PANCHANAN OHARA AND ORS.versusMONMATHA NATH MAITY (DEAD) TH. LRS. & ANR.

A                      PANCHANAN OHARA AND ORS.
                                          v.
           MONMATHA NA TH MAITY (DEAD) TH. LRS. & ANR.

                                   MAY 12, 2006

B                   [S.B. SINHA AND P.P. NAOLEKAR, JJ.]

           Limitation Act, 1963-Article 54-Agreement for sale of immoveable
    property-Vendee requesting vendor to execute and register a sale deed in
    its favour and latter in response assuring them that it would do so--However,
c   thereafter execution refused on the plea that it was barred by limitation---
    Vendee filing suit for specific performance of agreement for sale-Bar of
    limitation-Held-Suit was not barred by limitation as courts below had
    given a finding of fact that period of performance of agreement has been
    extended, and in such a case, the time to file a suit shall be deemed to start
    running only when plaintiff had notice that performance had been refused- -
D
    In facts of the case, the suit was filed soon after notice by plaintiff of such
    refusal.

         Contract-Extension of time for performance-Held-It need not
    necessarily be inferred from written document-It could be implied also-
E   Conduct of parties in this behalf is relevant.

           Companies Act, 1956-Sections 46 and 48-Mode of signing contract
    on behalf of company-Requirement of resolution and seal--Held-In their
    absence contract cannot be held to be invalid or illegal as the Company may
p   still be liable having regard to nature of transaction and authority of those
    who executed the contract-If act of Directors is not ultra vires or no public
    policy is involved, the parties acting thereupon cannot be left at large-It
    was more so as an oral agreement is permissible in law--lnfacts ofthe case,
    companyfound bound by agreement signed by all ofits directors with further
    evidence that all of them were aware of it and never disputed its correctness
G   or contents.

          Respondent No. 2, a company held the suit property and intending
    to sell it, entered into an agreement for sale thereof with Respondent
    no.I wherefor an amcunt was paid to it as advance, and balance amount
H   was to be paid within a period of fourteen months. Respondent No. I
                                         520
             PANCHANAN OHARA v. MONMATHA NATH MAITY                       521

    issued several letters asking Respondent No.2 to execute and register a      A
    sale deed in his favour, and latter in response thereto had all along been
    assuring them that it would do so. However, thereafter Respondent No.
    2 refused to execute and register a deed of sale on the plea that the same
    became barred by limitation. Respondent No. 1 filed a s1•it for specific
    performance of the said agreement for sale. Appellant is a subsequent
    purchaser having purchased the property with full notice of the agreement
                                                                                 B
    for sale. He had filed a caveat in the above suit.

         Trial Judge decreed the suit holding that it was not barred by
    limitation, and as all the Directors of Respondent No. 2 were parties to
    the said agreement, rejected the contention that in executing the said       C
    agreement the provisions of Section 46 and 48 of the Companies Act had
    not been complied with. A deed of sale was executed in favour of
    Respondent no. 1 in execution of the decree. Appeal against decree was
    dismissed by the First Appellate Court. In Second Appeal before the
    High Court, though neither the substantial question of law was framed        D
    nor the question as regards the applicability of the first part or the
    second part of Article 54 oft.he Limitation Act was raised, the appeal
    was dismissed. Hence the present appeal.

          Appellant contended (i) the suit was not barred by limitation as
    second part of Article 54 of the Limitation Act was attracted, and not       E
    the first part (ii) the provisions of Sections 46 and 48 of the Companies
    Act having not been complied with, the said agreement could not have
    been enforced.

          Respondents contended that (i) the contention that the first part      F
    of Article 54 of the Limitation Act would not be attracted in this case
    should not be permitted to be raised having not been raised before the
    courts below (ii) non-compliance of the provisions of Sections 46 and 48
•
    of the Companies Act was irrelevant as all the Directors signed the
    agreement of sale on behalf of the Company and in any event they had
    sufficient authority to do so under its articles of Association.             G

         Dismissing the appeal, the Court

          HELD : 1.1. Contention regarding the applicability of the first or
    the second part of Article 54 of the Limitation Act will have to be judged   H
    522                 SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A   having regard to the findings of fact recorded by courts below that suit
    was not barred under the above Article. [528-G-HI

          1.2. The contract was to be performed by both the parties to the
    agreement. The First Respondent was to offer the balance amount to
    the Company, which would be subject to its showing that it had a perfect
B   title over the property. (529-F-GI

          1.3. The courts below arrieved at a finding of fact that the period
    of performance of the agreement has been extended. Extension of
    contract is not necessarily to be inferred from written document. It
C   could be implied also. The conduct of the parties in this behalf is
    relevant. Once a finding of fact has been arrived at, that the time for
    performance of the said contract had been extended by the parties, the
    time to file a suit shall be deemed to start running only when the plaintiff
    had notice that performance had been refused. Performance of the said
    contract was refused by the Company only on 21.8.1985. The suit was
D   filed soon thereafter. [529-D, G-H, 530-AI

        S. Brahmanandv. K.R. Muthugopa! (Dead) (2005112 SCC 764, R.K.
    Parvatharaj Gupta v. K.C. Jayadeva Reddy, (20061 2 SCALE, 156,
    Gunwantbhai Mulchand Shah & Ors. v. Anton Elis Fare! & Ors., [20061
E   3 SCALE 82, relied on.

         Ramzan v. Hussaini, (199011SCC104, Tar!ok Singh v. Vijay Kumar
    Sabharwal, (19961 8 SCC 367; TL. Muddukrishna v. lalitha Ramchundra
    Rao (Smt)., 1199712SCC611 and Venkappa Gurappa Hosur v. Kasawwa
F   Clo Rangappa Ku/god, [19971 IO sec 66, distinguished.

          2.1. Section 46 of the Companies Act merely lays down the mode
    of signing contract on behalf of the company. Once a deed is executed
                                                                                   •
    on behalf of the company, it is company and not the persons signing can
    sue or be sued on the contract if the evidence is clear that the signature
G   was only that of the company. (534-81

         2.2. It is not in dispute that the contract was executed in the name
    of the company. It has furthermore not disputed that all the five
    directors executed the agreement. The company was a private limited
H   company. Before the courts below, execution of the agreement was not
         PANCHANAN OHARA v. MONMATHA NATH MAITY                       523

denied. Thus, even in the absence of resolution the contract could not       A
have been held to be invalid or illegal. [535-A, DJ

     2.3. So far as the question of putting up of the seal of tile Company
is concerned, it is a relic of the days when mediaeval barons, who could
not read or write, used their rings to make a characteristic impress.
Even in absence of a seal, the Company may still be held to be liable        B
having regard to the nature of transaction and the authority of those
who had executed it. If the act of the Directors is no ultra vires or not
public policy is involved, the parties acting thereupon cannot be left at
large. [535-E-F)
                                                                             c
    Probodh Chandra v. Roadoils (India) Ltd., AIR (1930) Cal 782,
approved.

     OTV Birwel Co. Ltd v. Technical and General Guarantee Co. Ltd.,
(2002) 4 All ER 668, referred to.
                                                                             D
      2.4. An oral agreement for sale is permissible in law. There is
furthermore no dispute that the agreement for sale was entered into by
three directors of the company. The subsequent letters written on behalf
of the Company clearly demonstrate that all the directors were aware
of the said agreement. The company before the Trial Court never chose        E
to file any written statement or dispute the contentions raised in the
plaint. The Company, thus never denied or disputed the correctness or
otherwise of the contents of the said agreement. The Company never
denied or disputed the terms of the agreement nor raised any plea that
the agreement was not binding on the company or the same was illegal.
In fact in the deeds executed in favour of the agreement, it had clearly     F
been stated that the suit for specific performance for contract filed by
Respondent No.I was pending. [534-C-E)

     Chairman, Life Insurance Corpn. v. Rajiv. Kumar Bhasker, [2005) 6
sec t88, relied on.                                                          G
     CIVIL APPELLATE JURISDICTION              Civil Appeal No. 5187 of
2001.

     From the Judgment and Order dated 29.01.1998 of the High Court of
Calcutta in SA No. 887/1991.                                                 H
    524                 SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A         Santosh Mishra and S.B. Upadhyay, Advs. for the Appellants.

        Gourab Banerji, Sr. Adv., T. Momo Singh, Joydeep Mazumdar, Saurav
    Agrawal and Prashant Kumar, Advs. for the Respondents.

          The Judgment of the Court was delivered by
B
         S.B. SINHA, J : This appeal is directed against a judgment and order
    dated 29th January, 1998 passed by the Calcutta High Court in Second
    Appeal No. 887 of 1991 affirming the judgment and order dated 29th June,
    1990 passed by the learned Asstt. District Judge, Ghatal, District Midnapore,
c   West Bengal in Title Appeal No. 74 of 1989 whereby and whereunder an
    appeal against the judgment dated 31st August, 1989 passed by the learned
    Munsif, Ghatal, District Midnapore, West Bengal in Title Suit No. 133 of
    1985 was dismissed.

          The basic fact of the matter is not much in dispute. Respondent No.
D   2 herein (the company) is a company registered and incorporated under the
    Companies Act, 1956. The said company held and possessed the suit
    property situated in the District of Midnapur in the State of West Bengal.
    It intended to sell the said property. Respondent Nos. 1 and 2 having come
    to know of the said intention on the part of the company entered into an
E   agreement for sale thereof, wherefor a sum of Rs. 6000 was paid to the
    Company by way of advance. The balance amount was to be paid within
    a period of fourteen months. As the title of the Respondent No. 2 in respect
    of the said property was not clear, the Company instituted a suit against some
    persons who were claiming title thereover on or about 22.05.1971. The said
    suit was marked as Title Suit No. 110of1971. In the said suit a compromise
F
    petition was filed on 3.4.1979 which having been accepted by the concerned
    court, a consent decree was passed on the basis thereof on 3 .5. l 979.
    Respondent No. I thereafter issued several letters being dated 12.11.79,
     11.01.80, 05.01.81 and 08.10.84 asking the Company to execute and register
    a sale deed in his favour. The Company in response thereto had all along
G   been assuring the Respondent No. I that it would do so.

         By a letter dated 16.3.1985, one of the Directors of Respondent No.
    2 assured Respondent No. I that no apprehension should be entertained by
    Respondent No. l that the contract between him and the company would not
H   be honoured. However, on 21.8.1985, the company refused to execute and
            PANCHANAN DHARA v. MONMATHA NATH MAITY [SINHA, J.]            525

register a deed of sale in favour of Respondent No. 1 on the plea that the        A
same became barred by limitation.

      A suit for specific performance of the said agreement for sale dated
18.04.1971 was filed in the Court of Munsif, Ghatal, District Midnapore,
West Bengal which was marked as Title Suit No. 133 of 1985. It is not in
dispute that not only the Appellant herein had filed a caveat in the said suit,
                                                                                  B
it purchased the said property on 13.11.1985, i.e., during pendency thereof.
Even in the deed of sale executed in favour of the Appellant by the Company
the factum of the said suit being pending in the court had specifically been
mentioned.
                                                                                  c
     Before the learned Trial Judge, inter alia the following contentions
were raised on behalf of the Appellant:

     (i)     the agreement for sale was not enforceable as the provisions of
             Sections 46 and 48 of the Companies Act had not been complied
             with.
                                                                                  D

     (ii)    It was not established that the Respondent No. 1 had all along
             been and ready and willing to perform his part of contract.

     (iii) The suit was barred by limitation.                                     E

      As regards the contention that in executing the said agreement the
provisions of Sections 46 .and 48 of the Companies Act had not been
complied with, the learned Trial Judge held that as all the Directors of the
Company were parties to the said agreement, the said provisions are not           F
attracted. The plea that the Respondent No. I was not ready and willing to
perform his part of contract was also held to have been waived. The plea
of limitation was also negatived.

    The appeal preferred thereagainst was also dismissed by the First
Appellate Court.                                                                  G
     In the Second Appeal preferred by the Appellant herein, it does not
appear that any substantial question of law was framed by the High Court
as was mandatorily required under Section 100(4) of the Code of Civil
Procedure. However, a learned Single Judge of the court dealt with all the        H
    526                  SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A   contentions raised on behalf of the Appellant and dismissed the suit.

          Mr. Santosh Mislira, learned counsel appearing on behalf of the
    Appellant, in support of this appeal submitted that the courts below
    committed a manifest error in arriving at the finding that the suit was not
    barred by limitation, purported to be relying on or on the basis of the first
B   part of Article 54 of the Limitation Act whereas in this case the second part
    thereof could be attracted. It was urged that the Respondent No. I infeims
    of the agreement for sale dated 18.04.1971 was required to pay the balance
    sum of Rs. 8,000 within fourteen months therefrom but even assuming that
    the deed of sale was to be executed and registered on perfection of title, the
c   suit filed by the Company against third parties having been decreed on 3 lst
    August, 1979, the period oflimitation in terms of Article 54 of the Limitation
    Act should have been reckoned from the said date. Strong reliance in this
    behalf has been placed on Ramzan v. Hussaini, [1990] I SCC 104, Tarlok
    Singh v. Vijay Kumar Sabharwal, [1996] 8 SCC 367, TL. Muddukrishana
    and Another v. lalitha Ramchandra Rao (Smt.), [1997] 2 SCC 611 and
D
    Venkappa Gurappa Hosur v. Kasawwa Clo Rangappa Ku/god, [1997] 10
    sec 66.
          It was further urged that in .the event, the terms and conditions
    contained in the said agreement dated 18 .04.1971 were found to be uncertain,
E   the same would be void in terms of Section 29 of the Indian Con!ract Act.

          The learned counsel would furthermore submit that having regard to
    the provisions of Sections 46 and 48 of the Companies Act having not been
    complied with, the said agreement could not have been enforced.
F
          Mr. Mishra, as regards the plea of readiness and willingness on the part
    of the Respondent No. I to perform his part of contract, would submit that
    although the said plea is not available so far as the present Appellant is
    concerned in view of the decision of this Court in Jugraj Singh and Another
    v. Labh Singh and Others, [1995] 2 SCC 31 but it was for the court to see
G   as to whether the plaintiff has proved his case in this behalf or not.

         Mr. Gourab Banerji, learned Senior Counsel appearing on behalf of the
    Respondents, on the other hand, submitted that the question of limitation
    being a mixed question of fact and law, the contention that the first part of
H   Article 54 of the Limitation Act would not be attracted in this case should
           PANCHANAN OHARA v. MONMATHA NATH MAITY [SINHA, J.)                527

not be permitted to be raised having not been raised before the courts below.        A
It was submitted that both the courts understood that having regard to the
conduct of the parties, the agreement was kept alive and at all material point
of time the contract was subsisting. As regards alleged non-compliance of
the provisions of Sections 46 and 48 of the Companies Act, the learned
counsel urged that from the findings of the fact arrived at by all the courts,
it would be evident that all the Directors signed the agreement of sale on
                                                                                     B
behalf of the Company and in any event they have sufficient authority to
do so. Even under the Articles of Association of the Company, it was urged,
one of the Directors was entitled to execute the deed of sale on behalf of
the Company.
                                                                                     c
     The Appellant herein is a subsequent purchaser. A finding of fact has
been arrived at by all the courts that he had purchased the property with full
notice of the said agreement for sale.

     The Company has not preferred any appeal against the judgment and
                                                                                     D
decree passed by the learned Munsif before the appellate court.

      A deed of sale has already been executed in favour of the First
Respondent in execution of the decree passed by the learned Trial Court.
Before the High Court, as noticed hereinbefore, no substantial question of
law was framed. The question as regards the applicability of the first part          E
or the second part of Article 54 of the Limitation Act had also not been raised
before the High Court. The parties adduced evidence only on that basis.

        So far as the question of limitation is concerned, the learned Trial Judge
held:
                                                                                     F
           "The letters sent by the plaintiff or his brothers on behalf of the
           plaintiff (ext. 8 to 11 ), the letter of chairman director Purushattam
           Roy (ext. 7) coupled with the fact of non issuing of any notice by
           defendant no. 1 estate repudiating that contract proved beyond any
           trace of doubt that the agreement between plaintiff and defendant         G
           no. I estate was subsisting and was still in force and that the suit
           was not barred under Article 54 of Limitation Act."

    We may notice that the learned First Appellate Court as regards the
Appellants' contention that the suit was baiTed by limitation held:                  H
    528                  SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A           ·'Next, it was vehemently argued before this court that the suit is
            barred by limitation as it was recited in ext. 3 that the transfer would
            be effective within 14 months after execution of the bainanama
            (Ext. 3). But the argument is not tenable in view of the fact that
            the time has been expanded by the respondent no. 2 impliedly by
            agreeing to transfer of the suit property as and when time comes.
B           The respondent no. l and his brother despatched several letters (Ext.
            8,9, I0, 11) to the respondent no. 2 for transfer of the suit property
            to them. Ultimately, by ext. 7 (a letter sent by the company to the
            respondent no. I) the company has agreed to extend the time giving
            the respondent no. I assurance that just in time transfer would be
c           made effective. Ext. 7 also suggests that the letters (ext 8,9,10,11)
            sent by the respondent no. I and his brothers were received by the
            company, respondent no. 2. Thus, it can be said safely that the time
            which was recited in the ext. 3 was extended by respondent no.
            2 by ext. 7 and moreover, ext. 3 suggests unequivocally that time
             is not essence of the contract. Had the time being the essence, the
D
            words "subject to perfection" on the title of the respondent no. 2
            of the suit property would not have occurred in ext. 2. Therefore,
            when the Id. Muns if has discussed this point in this light this court
            sees nothing to interfere "

E        The High Court has also accepted the said reasonings of the learned
    lower appellate court stating:

             "As regards the second point urged by Mr. Mukherjee, in my
             opinion. the same is also without any force. The respondent no.
F            I having made specific case that the company refused to perform
             its part of the contract in the year 1985 and having produced letters
             written on behalf of the company showing that the agreement was
             subsisting and no person having come forward to depose on behalf
             of the company to convert those statements, in my opinion, the
             learned courts below rightly found that the suit is not barred by
G            limitation."

         Contention of Mr. Mishra as regard the applicability of the first or the
    second part of Article 54 of the Limitation Act will have to be judged having
    regard to the aforementioned findings of fact. A plea of limitation is a mixed
H   question of law and fact. The question as to whether a suit for specific
         PANCHANAN OHARA v. MONMATHA NATH MAITY [SINHA. J.]                 529

perfonnance of contract will be barred by limitation or nat would not only          A
depend upon the nature of the agreement but also the conduct of the parties
and also as to how they understood the tenns and conditions of the
agreement. It is not in dispute that the suit for specific perfonnance of
contract would be governed by Article 54 of the Limitation Act, 1964. While
detennining the applicability of the first or the second part of the said
provision, the court will firstly see as to whether any time was fixed for
                                                                                    B
perfonnance of the agreement of sale and if it was so fixed, whether the suit
was filed beyond the prescribed period unless any case of extension of time
for perfonnance was pleaded and established. When, however, no time is
fixed for perfonnance of contract, the court may dete.rrnine the date on which
the plaintiff had notice of refusal on the part of the defendant to perfonn the     c
contract and in that event the suit is required to be filed within a period of
three years therefrom.

      In this case, before the Trial Court, the parties proceeded on the basis
that the Second Respondent herein refused to execute and register a deed            D
of sale in tenns of the said agreement on 21.8.1985. The courts below have
also arrived at a finding of fact that the time for perfonnance of the said
agreement for sale had all along been extended and even as on 16.3.1985,
a Director of the Second Respondent assured the First Respondent that it
would be honored. In a suit for specific perfonnance of contract in respect
of any immovable property, time would ordinarily not be the essence of the          E
contract. The Appellant herein also did not raise any plea to the said effect.

      A bare perl!sal of Article 54 of the Limitation Act would show that the
period of limitation begins to run from the date on which the contract was
to be specifically performed. In tenns of Article 54 of the Limitation Act,         F
the period prescribed therein shall begin from the date fixed for the
perfonnance of the contract. The contract is to be perfonned by both the
parties to the agreement. In this case, the First Respondent was to offer-the
balance amount to the Company, which would be subject to its showing that
it had a perfect title over the property. We have noticed hereinbefore that
the courts below arrived at a finding of fact that the period of perfonnance        G
of the agreement has been extended. Extension of contract is not necessarily
to be inferred from written document. It could be implied also. The conduct
of the parties in this behalf is relevant. Once a finding of fact has been
arrived at, that the time for performance of the said contract had been
extended by the parties, the time to file a suit shall be deemed to start running   H
    530                  SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A   only when the plaintiff had notice that performance had been refused.
    Performance of the said contract was refused by the Company only on
    21.8.1985. The suit was filed soon thereafter. The submission of Mr. Mishra
    that the time fixed for completion of the transaction was determinable with
    reference to the event of perfection of title of the Second Respondent cannot
    be accept~d. The said plea had never been raised before the courts below.
B   Had such a plea been raised, an appropriate issue could have been framed.
    The parties could have adduced evidence thereupon. Such a plea for the first
    time before this Court cannot be allowed to be raised. Even otherwise on
    a bare perusal of the agreement for sale dated 18.4.1971, it does not appear
    that it was intended by the parties that the limitation would begin to run from
c   the date of perfection of title.

          In Ramzan (supra), Sharma, J., (as the learned Chief Justice then was),
    opined that the date fixed for the parties for performance of the agreement
    should be ascertained on the basis of the terms of the contract. On an
    interpretation of the agreement in sale, which was the subject matter of the
D   said suit, the same was held to be a contingent contract within the meaning
    of Section 31 of the Indian Contract Act. Therein, the property was placed
    under a mortgage and the defendant had agreed to execute a deed of sale
    on the redemption of the mortgage by her. The mortgage was redeemed in
    1970. It was in the aforementioned fact situation, the doctrine of id certum
E   est quad certum redid potest (certainty need not be ascertained at the time)
    was applied. The said decision, therefore, is not applicable in the instant
    case.

          In Tarlok Singh (supra), an agreement was entered into by the parties
    on 21.12.1984. A proceeding was pending in respect of the suit land. The
F   time for performance was extended by an agreement dated 18.8.1984
    stipulating that the Appellant therein would be required to execute the same
    within the 15 days of the order vacating the injunction which had been
    passed. In view of the said admitted fact, it was held that the date for
    performance of the contract was fixed. The order granting injunction having
G   been vacated on 6.4.1986, the suit which was instituted on 25.8.1989, was
    held to be barred by limitation.

          In TL. Muddukrishana (supra), Tarlok Singh (supra) was followed.

          In Venkappa Gurappa Hosur (supra), a finding of fact wa~ arrived at
H   that the agreement was refused to be executed as far back in 1959 and in
         PANCHANAN DHARA v. MONMATHA NATH MAITY [SINHA, J.]                531

that view of the matter it was held that the issuance of a notice in August,       A
1972 did not stop running of the period of limitation. The said decision,
therefore, has no application in the present case.

      Performance of a contract may be dependent upon several factors
including grant of permission by the statutory authority in appropriate cases.
If a certain statutory formality is required to be complied with or permission
                                                                                   B
is required to be obtained, a deed of sale cannot be registered till the said
requirements are complied with. In a given situation, the vendor may not
be permitted to take advantage of his own wrong in not taking steps for
complying the statutory provisions and then to raise a plea of limitation.
                                                                                   c
     An almost identical question came up for consideration before a
Division Bench of this Court in S. Brahmanand and Others v. K.R.
Muthugopal (Dead) and Others, [2005] 12 SCC 764 wherein this Court laid
down the law:
                                                                                   D
         "Thus, this was a situation where the original agreement of 10-3-
         1989 had a "fixed date" for performance, but by the subsequent
         letter of 18-6-1992 the defendants made a request for postponing
         the performance to a future date without fixing any further date for
         performance. This was accepted by the plaintiffs by their act of
         forbearance and not insisting on performance forthwith. There is
                                                                                   E
         nothing strange in time for performance being extended, even
         though originally the agreement had a fixed date. Section 63 of the
         Contract Act, 1872 provides that every promisee may extend time
         for the performance of the contract. Such an agreement to extend
         time need not necessarily be reduced to writing, but may be proved        F
         by oral evidence or, in some cases, even by evidence of conduct
         including forbearance on the part of the other party. Thus, in this
         case there was a variation in the date of performance by express
         representation by the defendants, agreed to by the act of forbearance
         on the part of the plaintiffs. What was originally covered by the first   G
         part of Article 54, now fell within the purview of the second part
         of the article ... "

     In R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy, [2006] 2 SCALE
156, wherein one of us was a member, it was observed:
                                                                                   H
    532                 SUPREME COURT REPORTS (2006] SUPP. 2 S.C.R.

A                In terms of the said Article, a suit for specific performance of
            a contract is required to be filed within three years; in the event
            no date is fixed for the performance, within a period of three years
            from the date when the plaintiff has notice that performance is
            refused. The notice dated 24.04.1984, thus, is required to be
            construed in the context of the agreement dated 13.10.1982 entered
B           into by and between the parties.

         There cannot be any doubt whatsoever that in respect of a contract for
    sale of immovable property, time is not of the essence of the contract, but
    the question as regard the conduct of the Appellant must be considered in
C   the backdrop of the events noticed hereinbefore."

         The said decision has again been noticed in Gunwantbhai Mulchand
    Shah & Ors. v. Anton Elis Fare/ & Ors., (2006] 3 SCALE 82 wherein it has
    been held:

D           "We may straightaway say that the manner in which the question
            of limitation has been dealt with by the courts below is highly
            unsatisfactory. It was rightly noticed that the suit was governed by
            Article 54 of the Limitation Act, 1963. Then, the enquiry should
            have been, first, whether any time was fixed for performance in the
E           agreement for sale, and if it was so fixed, to hold that a suit filed
            beyond three years of the date was barred by limitation unless any
            case of extension was pleaded and established. But in a case where
            no time for performance was fixed, the court had to find the date
            on which the plaintiff had notice that the performance was refused
            and on finding that date, to see whether the suit was filed within
F
            three years thereof. We have explained the position in the recent
            decision in R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy, [2006]
            2 Scale 156. In the case on hand, there is no dispute that no date
            for performance is fixed in the agreement and if so, the suit could
            be held to be b8:11'ed by limitation only on a finding that the plaintiffs
G           had notice that the defendants were refusing performance of the
            agreement. In a case of that nature normally, the question of
            limitation could be decided only after taking evidence and recording
            a finding as to the date on which the plaintiff had such notice. We
            are not unmindful of the fact that a statement appears to have been
H           filed on behalf of the plaintiffs that they do not want to lead any
         PANCHANAN DHARA v. MONMATHA NATH MAITY [SINHA, J.]                    533

         evidence. The defendants, of course, took the stand that they also            A
         did not want to lead any evidence. As we see it, the trial court should
         have insisted on the parties leading evidence, on this question or
         the court ought to have postponed the consideration of the issue of
         limitation along with the other issues arising in the suit, after a trial."

      In view of the aforementioned pronouncements of this Court, we are               B
of the opinion that the plea raised by the learned counsel for the Appellant
that the suit was barred by limitation cannot be accepted as all the courts
have arrived at a finding of fact that the period for execution of the deed
of sale had been extended.

      Similarly, the applicability of the provisions of Section 29 of the Indian       c
Contract Act having not been raised, the same cannot be permitted to be
raised for the first time before this Court. Even otherwise we do not see,
on a plain reading of the said agreement of sale dated 18.04.1971, that the
terms thereof were uncertain or vague so as to attract the provisions of
Section 29 of the Indian Contract Act.                                                 D
    · Sections 46 and 48 of the Companies Act, read as under:

         "46. Form of contracts. (I) Contracts on behalf of a company may
         be made as follows:-
                                                                                       E
         (a) a contract which, if made between private persons, would by
         law be required to be in writing signed by the parties to be charged
         therewith, may be made on behalf of the company in writing signed
         by any person acting under its authority, express or implied, and
         may in the same manner be varied or discharged;
                                                                                       F
         (b) a contract which, if made between private persons, would by
         law be valid although made by parole only and not reduced into
         writing, may be made by parole on behalf of the company by any
         person acting under its authority, express or implied, and may in
         the same manner be varied or discharged.
                                                                                       G
         (2) A contract made according to this section shall bind the
         company.

         48. Execution of deeds.- (I) A company may, by writing under
         its common seal, empower any person, either generally or in respect           H
    534                  SUPREME COURT REPORTS [2006) SUPP. 2 S.C.R.

A            of any specified matters, as its attorney, to execute deeds on its
             behalf in any place either in or outside India. (2) A deed signed by
             such an attorney on behalf of the company and under his seal where
             sealing is required, shall bind the company and have the same effect
             as if it were under its common seal."

B         Section 46 merely lays down the mode of signing contract on behalf
    of the company. Once a deed is executed on behalf of the company, it is
    company and not the persons signing can sue or be sued on the contract if
    the evidence is clear that the signature was only that of the company.

C         An oral agreement for sale is permissible in law. There is furthermore
    no dispute that the agreement for sale was entered into by three directors of
    the company. The subsequent letters written on behalf of the Company
    clearly demonstrate that all the directors were aware of the said agreement.
    The company before the Trial Court never chose to file any written statement
D   or dispute the contentions raised in the plaint. The Company, thus, never
    denied or disputed the correctness or otherwise of the contents of the said
    agreement. The Company never denied or disputed the terms of the
    agreement nor raised any plea that the agreement was not binding on the
    company or the same was illegal. In fact in the deeds executed in favour
E   of the agreement, it had clearly been stated that the suit for specific
    performance of contract filed by Respondent No. l was pending.

         In Chairman, Life Insurance Corpn. and Others v. Rajiv Kumar
    Bhasker, [2005) 6 SCC 188, this Court held:

F           "Agency as is well settled, is a legal concept which is employed by
            the Court when it becomes necessary to explain and resolve the
            problems created by certain fact situations. In other words, when
            the existence of an agency relationship would help to decide an
            individual problem, and the facts permits a court to conclude that
G           such a relationship existed at a material time. then whether or not
            any express or implied consent to the creation of an agency may
            have been given by one party to another, the Court is entitled to
            conclude that such relationship was in existence at the time, and for
            the purpose in question. [See Establishing Agency by GHL Fridman
            1968 (84) Law Quarterly Review 224 at p. 231.]"
H
         PANCHANAN DHARA v. MONMATHA NATH MAITY [SINHA, J.]                535

     It is not in dispute that the contract was executed in the name of the        A
company. It has furthennore not disputed that all the five directors executed
the agreement. The company was a private limited company. The Trial
Court held:

         " .... As all the directors of the company took part in execution of
         ext. - 3 there was not necessity of giving any special authorization      B
         either u/s 46 or u/s 48 of the Companies Act for entering into or
         for execution of the contract. It is true that at the time of execution
         of the documents in favour of the party defendants (ext. A series)
         there was a resolution of the company. The copy of the said
         resolution was marked (ext. 1). On plain reading of Ext. 1 it is          c
         found that as 4 directors out of the 5 directors of the company were
         empowered to execute those documents said resolution was necessary
         u/s. 48 of the Companies Act."

     Before the courts below, execution of the agreement was not denied.
                                                                                   D
Thus, even in the absence ofresolution the contract could not have been held
to be invalid or illegal.

      So far as the question of putting up of the seal of the Company is
concerned, it is a relic of the days when mediaeval barons, who could not
read or write, used their rings to make a characteristic impress. Even in          E
absence of a seal, the Company may still be held to be liable having regard
to the nature of transaction and the authority of those who had executed it.
If the act of the Directors is not ultra vires or no public policy is involved,
the parties acting thereupon cannot be left at large. [See Probodh Chandra
v. Roadoils (India) Ltd., AIR 1930 Cal 782 and OTV Birwel Co. Ltd. v.              p
Technical and General Guarantee Co. Ltd., [2002) 4 All ER 668.

       For the reasons aforementioned, we· do not find any merit in this
appeal which is dismissed accordingly. No costs.

v.s.                                                        Appeal dismissed.      G




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