Article 27: (Art. 65 of the Act of 1908):
The period of limitation for a suit for compensation for breach of a promise to do anything at a specified time, or upon the happening of a specified contingency is three years and the limitation starts to run when the time specified arrives or the contingency happens.
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ADVERTISEMENTS:
In Phool Chand v. Laxminarayan, (AIR 1972 Raj. 247), it is held that a suit for recovery of compensation for breach of a forward contract is governed by the Article 27. Article 27 applies in general to all contracts which are to be performed at a specified future date on the happening of a specified contingency. The word ‘specified’ in Art. 27 implies that there should be some particularity in the contract itself as to the time when the contract is to be performed or as to the contingency which is to happen.
In Harakchand v. Sumatilal, (AIR 1932 Bom. 25), it is observed that the use of the word ‘contingency’ in Art. 27 refers to ‘contingent contracts’ as defined in Section 31 of the Contract Act, 1872. Such a contract not being enforceable unless the contingency happens limitation for a suit for damages for non-performance thereof does not arise until the contingency appears. It will not be correct to say that the Art. 27 applies only to contingent contracts referred to in Section 31 of the Contract.
In Ramnath v. Phoolchand, (ILR (1959) 9 Raj. 17), it is held that the Article 27 applies to cases of breaches of contract falling within Section 73 of the Contract Act.