Is time presumed not to be of the essence in a contract for the sale of immovable property?
Specific Relief Act, 1963 — s.16(c) — s.20 — Transfer of Property Act, 1882 — Agreement of sale of immovable property — Time not of the essence — Readiness and willingness —
Specific Relief Act, 1963 — s.20 — Sale of immovable property — Time not of the essence —
Held: Time is presumed not to be of the essence in a contract for the sale of immovable property, and the intention to make it so must appear from the whole contract and the surrounding circumstances. (¶19)
Specific Relief Act, 1963 — s.20 — Period fixed for completion — No default clause —
Held further: Fixing a period for completion does not make time of the essence where the agreement contains no default clause for cancellation on expiry of that period. (¶18, 19)
Specific Relief Act, 1963 — s.16(c) — Substantial consideration received — Readiness established —
Held further: Readiness and willingness are established once execution of the agreement and receipt of substantial sale consideration are proved. Appeal dismissed. (¶22, 23)
Is time presumed not to be of the essence in a contract for the sale of immovable property?
Yes. Time is presumed not to be of the essence in a contract for the sale of immovable property. Whether time is of the essence has to be culled out from a reading of the entire contract as well as the surrounding circumstances, and merely having an explicit clause is not sufficient. [¶19]
Does fixing a period for completion make time of the essence where the agreement contains no default clause?
No. Fixing a period for completion does not make time of the essence where the agreement contains no default clause. There is no default clause for cancellation of the sale agreement, and the defendant sent no notice within the four months insisting on payment of the balance or threatening cancellation. [¶18, ¶19]
Are readiness and willingness established once execution of the agreement and receipt of substantial sale consideration are proved?
Yes. Readiness and willingness are established once execution of the agreement and receipt of substantial sale consideration are proved. Nothing more needs to be proved by the agreement holder, and it is not necessary to produce the money or vouch a concluded scheme for financing the transaction. [¶21, ¶22]
What did the Madras High Court finally decide in this appeal against the decree for specific performance?
The appeal suit was dismissed and the decree for specific performance was confirmed with no order as to costs. The points framed were answered against the defendant and the connected miscellaneous petition was closed. [¶23, ¶24]
Prepared by the LexStreak Editorial Desk — verify against the judgment.
“19. It is pertinent to note here that the plaintiffs and defendant are neighbours and the defendant admitted in his evidence that Ex.A.3 notice was sent by the plaintiffs on 18.04.2013 at 12.50 p.m., whereas Ex.B.2 notice was sent by the defendant on 18.04.2013 at 8.44 p.m. So, the argument put forth by the plaintiffs that on coming to know about sending of notice by the plaintiffs, the defendant tried to send his notice in hurried manner cannot be brushed aside, as there is no reason. The Five Judges Bench of Hon’ble Supreme Court in (1993) 1 Supreme Court Cases 519 held that “..If the contract relates to the sale of immovable property, it would normally be presumed that time was not of the essence of the contract.” The said principle has been reiterated by the Hon’ble Supreme Court in subsequent verdicts also. On perusal of citations relied on by both sides, it is clear that “The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract. And “whether time is of the essence in a contract’ has to be culled out from the reading of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not be sufficient to make time the essence of the contract.” From the above facts and circumstances, the case of the defendant that the sale agreement was cancelled as the plaintiffs did not come to perform their part of the contract within fixed period of four months is not accepted.”
“22. The senior Judge of this Court held in a case in S.A.No.565 of 2015 reported in 2022 (4) CTC 649 following the judgment of the Hon'ble Supreme Court in P.Ramasubbamma v. V.Vijayalakshmi & Others [Civil Appeal No. 2095 of 2022, dated 11.04.2022]. ''20. Once the execution of the agreement of sale and the receipt of the substantial amount towards the sale consideration is established, there is nothing more to be proved by the agreement holder to establish his readiness and willingness to perform his part of the contract. The finding of the lower Appellate Court in this regard does not suffer from any perversity and it does not require the interference of this Court. This Court holds that the plaintiff had established the execution of the sale agreement and also the payment of substantial amount towards sale consideration and also his readiness and willingness to perform his part of the contract. Therefore, the natural consequence would be that the plaintiff will be entitled for the relief of specific performance. The substantial question of law framed by this Court is answered accordingly.'' Therefore, from the above facts and circumstances, the plaintiffs have established their readiness and willingness to perform their part of the contract and the trial Court has correctly held the same in favour of the plaintiffs. The citations relied on by the appellant/defendant side are not applicable to the facts and circumstances of this case, whereas the rulings relied on by the respondents/plaintiffs side are applicable to the facts of this case. Therefore, this Court is of the considered view that time is not the essence of contract in the case on hand is concerned and the trial Court has rightly held that there is no implication that time is the essence of the contract in this case.”
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This Appeal is directed against the judgment and decree, dated 30.11.2015 rendered in O.S.No.48 of 2013 on the file of the learned Principal District Judge, Dindigul.
The appellant is the defendant in O.S.No.48 of 2013 on the file of the Principal District Court, Dindigul. The respondents are the plaintiffs in that suit. The respondents have filed the suit for specific performance.
For the sake of convenience, the parties are referred to as per their rank before the trial Court.
The brief facts are as below:
(a) The case of the plaintiffs (respondents herein):- The suit property is house site in plot Nos.1 and 2 in Madurai Road, 5th Ward, Dindigul Town, Nagal Naickenpatti Sub D, Dindigul Re-D. The suit property is self acquired property of the defendant by virtue of registered sale deed, dated 30.09.1991. The defendant approached the plaintiffs and offered to sell the suit property in order to settle his sundry debts, necessary expenses. The plaintiffs have consented. The sale consideration was fixed at Rs.19,25,000/- and they entered into sale agreement, dated 10.10.2012, fixing time for concluding the sale within 4 months. On 10.10.2012, the plaintiffs paid Rs.5,00,000/- towards advance and the defendant received the same. Thereafter, on 21.11.2012, the defendant received another Rs.5,00,000/- from the plaintiffs and made an endorsement to that effect in the sale agreement. Though four months time was fixed, since the defendant received Rs.5,00,000/- on 21.11.2012, the time was not the essence of contract. The plaintiffs were ready to complete the sale by paying the balance sale consideration of Rs.9,25,000 and they demanded the defendant several times to execute the sale deed. The defendant has been evading to execute the sale deed. So, the plaintiffs sent a legal notice, dated 18.04.2013 to the defendant. The defendant received the same on 20.04.2013 and sent a reply notice on 29.04.2013 with false averments. The defendant stated that the plaintiffs have not approached him to complete the sale within 4 months as agreed and he had not demanded Rs.5,00,000/- on 21.11.2012. Time was not the essence of contract between them as the defendant received Rs.5,00,000/- on 21.11.2012, subsequent to the sale agreement. The defendant is trying to alienate the suit property to third party. Hence, the plaintiffs filed the suit for specific performance and permanent injunction against the defendant.
(b) The case of the defendant(appellant herein):- The defendant and the plaintiffs entered into an unregistered sale agreement, dated 10.10.2012 for sale of suit property for a sale consideration of Rs.19,25,000/-. The defendant received Rs.5,00,000/- on 10.10.2012 and also received another Rs.5,00,000/- on 21.11.2012. Because of payment on 21.11.2012, the averment that the time is not essence of contract is not correct. In the sale agreement four months time was fixed to conclude the sale. But, the plaintiffs were not willing and ready to pay the balance sale consideration of Rs.9,25,000/- within the said four months. Hence, the unregistered sale agreement itself was cancelled as per contents of the sale agreement. The defendant sent notice to the plaintiff on 18.04.2013 mentioning about the cancellation of sale agreement. The plaintiff managed to return the same and sent their legal notice stating that time is not essence of contract. The plaintiffs obtained the signature of the defendant and made an endorsement as the defendant received Rs.5,00,000/-. The plaintiffs are trying to create an encumbrance by taking advantage of sale agreement. The plaintiffs were not ready and willing to perform their part of contract. So, the plaintiffs are not entitled for the discretionary relief of specific performance and also permanent injunction.
The trial Court framed the following issues upon the pleadings of both parties. 1. Whether the agreement entered into between the plaintiffs and the defendant are true? 2. Whether the defendant has obtained a sum of Rs.5,00,000/- and made endorsement on the back side of the agreement? 3. Whether the plaintiff is ready and willing to perform his part of obligation? 4. Whether the time is essence of the contract? 5. To what other relief? Trial Court re-casted the issue as follows: 1. Whether the plaintiff is entitled for the relief of specific performance as prayed for? 2. Whether the plaintiff is always ready and willing to perform their part of obligation? 3. Whether the time is the essence of contract?
During trial, the 1st plaintiff examined himself as P.W.1 and examined one Umar Farook as P.W.2 and Mohammed Siddiq as P.W.3. On the plaintiffs' side five exhibits were marked as Ex.A.1 to Ex.A.5. The defendant examined himself as D.W.1 and examined one Asaraf Ali as D.W.2 and marked Ex.B.1 to Ex.B.4.
On appreciation of evidence and the submissions made on behalf of the parties, the trial Court has decreed the suit in favour of the plaintiff by its judgment and decree, dated 30.11.2015.
The judgment and decree of the trial Court, dated 30.11.2015, is under challenge by way of this appeal.
Both parties have argued their respective cases by relying on rulings of the Hon’ble Supreme Court and High Courts. On hearing both sides and on perusing the material records along with grounds of appeal, both side admitted that they have entered into an unregistered sale agreement, dated 10.10.2012, for selling the suit property for Rs.19,25,000/- and an advance of Rs.5,00,000/- was paid, fixing four months time for payment of balance sale consideration from the date of sale agreement. Further, a sum of Rs.5,00,000/- was paid towards balance sale consideration on 21.11.2012. Thereafter, on exchange of legal notices, the suit was filed for the relief of specific performance, which was granted by the trial Court. The defendant moved this Court on appeal, mainly agitating the following points.
The points for consideration in this appeal are: 1)Whether the plaintiffs were not ready and willing to perform their part of contract within the fixed four months time? 2. Whether the time is the essence of contract? 3)Whether the sale agreement was cancelled as contended by the defendant?
Point Nos.1 to 3: The learned counsel for the appellant/defendant submitted that it is admitted by both that the sale agreement was executed on 10.10.2012 for sale of suit property i.e., house plots 1 and 2, for a total sale consideration of Rs.19,25,000/- and an advance of Rs.5,00,000/- was paid. The sale agreement is an unregistered one. As per the sale agreement, four months time was fixed to complete the sale i.e., on or before 10.02.2013. Another sum of Rs.5,00,000/- was paid on 21.11.2012. Thereafter, the plaintiffs have not paid the balance amount and have not been ready for completing the contract, so the sale agreement came to be cancelled. The defendant issued a legal notice, dated 18.04.2013 to the plaintiff cancelling the sale agreement, but the plaintiff managed to return it. Since four months time was specifically mentioned in the sale agreement, time is essence of contract. The plaintiffs were not ready and willing to perform their part of contract within four months. As per Section 16(c) of the Specific Reliefs Act, the plaintiffs did not take steps for completion of contract. The plaintiffs have not averred any pleading regarding readiness and willingness. They have not stated that they were in possession of the means to pay the balance sale consideration. Even the plaintiffs have not sent legal notice Ex.A.3 within the said four months, they have sent it on 18.04.2013 after the lapse of fixed four months time. The trial Court misconstrued the facts of the case while appreciating the evidences. The trial court failed to consider the facts that the plaintiffs were not ready and willing to perform the contract when the time was specifically mentioned as four months for completion of sale, so the time is the essence of contract. Therefore, the plaintiffs are not entitled for discretionary relief of specific performance. The trial Court has not considered all these aspects and simply decreed the suit, so the finding of the trial Court may be set aside.
In support of his argument, the learned counsel for the defendant relied on ruling of the Hon’ble Supreme Court reported in 2022 Live Law (SC) 588 in the case of U.N.Krishnamurthy /v/ A.M.Krishnamurthy, in which it is held in paragraph Nos.25 and 43 as follows:
“25. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligation in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money. 43. In Saradamani Kandappan (supra) this Court reiterated that (i) while exercising discretion in suits for specific performance, the Courts should bear in mind that when the parties prescribed a time for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored. (ii) The Courts will apply greater scrutiny and strictness when considering whether purchaser was ready and willing to perform his part of the contract and (iii) every suit for specific performance need not be decreed merely because it is filed within the period of limitation, by ignoring time limits stipulated in the agreement.”
Per contra, the learned counsel for the plaintiffs/respondents has argued that the defendant mainly contended about that time is essence of contract and that the plaintiffs were not ready and willing to perform their part of contract. Ex.A.1 sale agreement was executed between the plaintiffs and the defendant on 10.10.2012 and on that date itself the defendant received Rs.5,00,000/- out of the sale consideration of Rs.19,25,000/-. Though four months time was fixed, within four months the defendant received another sum of Rs.5,00,000/- on 21.11.2012. The four months was expired on 10.02.2013. In between the plaintiffs have demanded the defendant several times to complete the sale, but the defendant has evaded to execute the sale deed, so the plaintiffs issued a legal notice on 18.04.2013. The plaintiffs and the defendant are neighbours, so having knowledge of sending legal notice by the plaintiff, the defendant has chosen to send notice on his part on the same date. The defendant admitted that at the time of sending the legal notice by both parties that the plaintiffs sent the legal notice first. The suit was filed on 15.05.2013 and the suit was decreed on 30.11.2015, granting one month time. On direction, the plaintiffs deposited the balance sale consideration on 10.12.2015. So, the plaintiffs were ready and willing to perform their contract and deposited the balance sale consideration into court. Since the defendant received another advance amount within the stipulated four months, the time is not essence of contract. Moreover, the defendant has not showed his part of willingness to execute the sale deed within four months. The plaintiffs have clearly averred in the plaint about their readiness and willingness.
The learned counsel for the plaintiffs further argued that the defendant admitted in his written statement regarding receipt of Rs.10,00,000/- from the plaintiffs towards sale consideration. In the sale agreement, there is no cancellation clause after expiry of four months. Also, since there is no default clause in the sale agreement on expiry of stipulated time, the time is not essence in this case. It is a settled position that in respect of sale agreement for immovable property, time is not the essence of contract. The suit is filed within the period of limitation. The Hon’ble Supreme Court settled the principle that where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon a condition precedent to the grant of decree for specific performance and once the agreement to sell is admitted and is legal, the Court has to exercise its discretion in granting relief of specific performance to the plaintiff. In this case, the defendant admitted the execution of Ex.A.1 sale agreement and the receipt of Rs.10,00,000/- out of sale price of Rs.19,25,000/-. So, the plaintiffs are entitled to the discretionary relief. The trial Court has correctly appreciated these aspects and granted discretionary relief. The findings of the Court below need not be set aside. Therefore, the plaintiffs have established their case for the relief of specific performance and the appeal may be dismissed.
In support of his argument, the learned counsel for the plaintiffs relied on the following citations:
(1) (2004) 8 Supreme Court Cases 689 in the case of ‘Swarnam Ramachandran /v/ Aravacode Chakungal Jayapalan” held in paragraph No.12 as follows:- “12. That time is presumed not to be of essence of the contract relating to immovable property, but it is of essence in contracts of reconveyance or renewal of lease. The onus to plead and prove that time was the essence of the contract is on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence. That when the plaintiff pleads that time was not of essence and the defendant does not deny it by evidence, the Court is bound to accept the plea of the plaintiff. In cases where notice is given making time of the essence, it is duty of the Court to examine the real intention of the party giving such notice by looking at the facts and circumstances of each case. That a vendor has no right to make time of the essence, unless he is ready and willing to proceed to completion and secondly, when the vendor purports to make time of the essence, the purchaser must be guilty of such gross default as to entitle the vendor to rescind the contract.” (2) (2008) 4 Supreme Court Cases 464 in the case of “Balasaheb Dayandeo Naick /v/ Appasaheb Dattartraya Pawar” the Hon’ble Supreme Court held in paragraph Nos.10 and 11 as follows:
“10. In Chand Rani (Smt.) (dead) by LRs. Vs. Kamal Rani (Smt.) (dead) by LRs, (1993) 1 SCC 519, a Constitution Bench of this Court has held that in the sale of immovable property, time is not the essence of the contract. It is worthwhile to refer the following conclusion: (SCC pp.525, 527 and 528, paras 19, 21, 23) 19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language. 21. In Govind Prasad Chaturvedi v. Hari Dutt Shastri (1977) 2 SCC 539 following the above ruling it was held at pages 543-544: (SCC para 5) 5. ….It is settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract. [Vide Gomathinayagam Pillai v. Pallaniswami Nadar (at p. 233).] It may also be mentioned that the language used in the agreement is not such as to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract. 23. In Indira Kaur (Smt) v. Sheo Lal Kapoor (1988) 2 SCC 488 in paragraph 6 it was held as under: (SCC p 495) 6. ...The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract. 11. It is clear that in the case of sale of immovable property, there is no presumption as to time being the essence of the contract. 8. ...Even where the parties have expressly provided that time is the essence of the contract, such a stipulation will have to be read along with other provisions of the contract.....; for instance, if the contract was to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week, the work undertaken remains unfinished on the expiry of the time provided in the contract, such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract. In the case on hand, though the parties agreed that the sale deed is to be executed within six months, in the last paragraph they made it clear that in the event of failure to execute the sale deed, the earnest money will be forfeited. In such circumstances, the above-mentioned clauses in the last three paragraphs of the agreement of sale would render ineffective the specific provision relating to the time being the essence of contract.” (3) (2022) 2 Supreme Court Cases 382 in the case of “Welspun Speciality Solutions Ltd., /v/ ONGC” in which it is held in paragraph No.35 as follows:
“35. It is now settled that ‘whether time is of the essence in a contract’, has to be culled out from the reading of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not be sufficient to make time the essence of the contract. As the contract was spread over a long tenure, the intention of the parties to provide for extensions surely reinforces the fact that timely performance was necessary. The fact that such extensions were granted indicates ONGC’s effort to uphold the integrity of the contract instead of repudiating the same.” (4) (2019) 8 Supreme Court Cases 62 in the case of “R.Lakshmikantham /v/ Devaraji) in paragraph No.11 it is held as follows: “11. The High Court order is not correct in stating that readiness and willingness cannot be inferred because the letters dated 18.12.2002 and 19.12.2002 had not been sent to the defendant. The High Court also erred in holding that despite having the necessary funds, the plaintiff could not be said to be ready and willing. In the aforesaid circumstances, the High Court was also incorrect in putting a short delay in filing the Suit against the plaintiff to state that he was not ready and willing. In India, it is well settled that the rule of equity that exists in England, does not apply, and so long as a Suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff – See Mademsetty Satyanarayana v. G. Yelloji Rao and others AIR 1965 Supreme Court 1405 (paragraph 7) which reads as under: “7. Mr. Lakshmaiah cited a long catena of English decisions to define the scope of a Court’s discretion. Before referring to them, it is necessary to know the fundamental difference between the two systems - English and Indian-qua the relief of specific performance. In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no period of limitation for instituting a suit for the said relief and, therefore, mere delay – the time lag depending upon circumstances – may itself be sufficient to refuse the relief; but, in India mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law; it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises.” (5) (2015) 1 Supreme Court Cases 597 in the case of “K.Prakash /v/ B.R.Sampath Kumar” it is held in paragraph No.16 as follows: “16.The principle which can be enunciated is that where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon a condition precedent to the grant of decree for specific performance that the plaintiff must show his continued readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or the other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree is established then the Court has to exercise its discretion in favour of granting relief for specific performance.”
I have carefully considered the arguments advanced by the respective counsels of both sides. I have also considered the rulings relied on either side, along with material records of the case. As already stated supra, there is no dispute that the plaintiffs and defendant are neighbours and they entered into a sale agreement, dated 10.10.2012, which is an unregistered one, for the sale of suit property, i.e., house plots bearing Nos.1 and 2 comprised in T.S.No.887 of Ward No.5, Dindigul Town. Total sale consideration was fixed at Rs.19,25,000/-. The defendant received advance of Rs.10,00,000/-, i.e., Rs.5,00,000/- on 10.10.2012 and another Rs.5,00,000/- on 21.11.2012. In the sale agreement, four months time was fixed for completion of sale. However, the sale transaction has not been completed within four months. There is no dispute in the above facts.
It is the definite case of the defendant that the sale agreement came to be cancelled since the plaintiffs have not come forward to complete the sale within the stipulated period of four months as mentioned in the sale agreement. It is further argued that the plaintiffs were not ready and willing to perform their part of the contract and also they were not in possession of balance sale consideration. These contentions were vehemently denied by the plaintiffs.
As regards the plea of cancellation is concerned, a perusal of the contents of Ex.A.1 - Sale Agreement, it shows as follows:
“moapy;fz;l gpshl; vz; 1 & 2 cs;s kidaplj;ij ek;kpy; 1tJ egh; ek;kpy; 2 & 3 egh;fSf;F fpiuak; bra;J bfhLg;gjhf ngrp Kot[ bra;J fpiua bjhifahf U:.1925000/ vd;Wk; nkw;go fpiuak; ngrpajw;F Kd;gzkhf U:.500000/- moapy; fz;l rhl;rpfs; Kd;ghf ek;kpy; 2 & 3 egh;fsplkpUe;J 1tJ egh; buhf;fk; bgw;Wf; bfhz;lhh;. kPjp fpiua Jif U:.1425000/ j;ij ,JKjy; 4 (ehd;F) khj fhy bfLtpw;Fs; ek;kpy; 1tJ eghplk; 2 & 3 egh;fs; brYj;jp fpiuag; gj;jpuj;ij g{h;j;jp bra;J gjpt[ bra;J bfhs;s ntz;oaJ vd;Wk;> ,dp moapy; fz;l brhj;ij bghUj;J ek;kpy; 1tJ egh; ahbjhU tpy;yq;fKk; bra;af;TlhJ vd;Wk; ek;kpy; 2 & 3 egh;fs; fhy bfLtpw;Fs; kPjp fpiuaj; Jifia brYj;jpat[ld; 1tJ egh; kPjp fpiuaj; Jifia bgw;Wf; bfhz;L brhj;jpy; ahbjhU tpy;yq;fkpd;wpa[k; tPz;fhyjhkjk; bra;jhy; chpa ePjpkd;wj;jpy; kPjp fpiua Jifia brYj;jp Mtzj;ij ePjpkd;wk; K:yk; g{h;j;jp bra;J bfhs;s ek;kpy; 2 & 3 egh;fSf;F chpik cz;L vd;Wk;> ek;kpy; 1tJ egh; fpiuak; bra;J bfhLf;f jahuhf ,Ue;J ek;kpy; 2 & 3 egh;fs; tPz;fhyjhkjk; bra;jhy; ek;kpy; 2 & 3 egh;fs; bfhLj;j Kd; gzj;ij ek;kpy; 1tJ egh; bfhLf;Fk; rkak; bgw;Wf; bfhz;L ,e;j cld;gof;ifapypUe;J tpyfp bfhs;s ntz;oaJld; ek;kpy; 1tJ egh; moapy; fz;l brhj;ij ntW xU egUf;F fpiuak; bra;J bfhLg;gij ek;kpy; 2 & 3 egh;fs; vt;tpj Ml;nrgiza[k; bra;af;TlhJ vd;Wk;…..”. From the above recitals, it is clear that there is no default clause for cancellation of sale agreement as rightly held by the trial Court. The defendant has not sent any notice to the plaintiffs within the said four months, as he is ready to perform his part of the contract and is insisting the plaintiffs to pay the balance sale consideration otherwise, he would cancel the sale agreement. Even immediately after the expiry of four months, the defendant has not sent such notice to the plaintiffs stating that he was in possession of the means to repay the amount received by him as per the contents of the sale agreement. When the plaintiffs intended to send notice on 18.04.2013, the defendant stated that he also sent notice to the plaintiffs, cancelling the sale agreement on the same date i.e., 18.04.2013.
It is pertinent to note here that the plaintiffs and defendant are neighbours and the defendant admitted in his evidence that Ex.A.3 notice was sent by the plaintiffs on 18.04.2013 at 12.50 p.m., whereas Ex.B.2 notice was sent by the defendant on 18.04.2013 at 8.44 p.m. So, the argument put forth by the plaintiffs that on coming to know about sending of notice by the plaintiffs, the defendant tried to send his notice in hurried manner cannot be brushed aside, as there is no reason. The Five Judges Bench of Hon’ble Supreme Court in (1993) 1 Supreme Court Cases 519 held that “..If the contract relates to the sale of immovable property, it would normally be presumed that time was not of the essence of the contract.” The said principle has been reiterated by the Hon’ble Supreme Court in subsequent verdicts also. On perusal of citations relied on by both sides, it is clear that “The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract. And “whether time is of the essence in a contract’ has to be culled out from the reading of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not be sufficient to make time the essence of the contract.” From the above facts and circumstances, the case of the defendant that the sale agreement was cancelled as the plaintiffs did not come to perform their part of the contract within fixed period of four months is not accepted.
Next point is readiness and willingness. As rightly argued by the defendant's side, the plaintiffs have to prove their willingness and readiness to be entitled to the relief of specific performance, as per Section 16 of the Specific Relief Act, which dealt with by the Apex Court as follows:
“23. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause (c) of Section 16, it may not be essential for the plaintiff to actually tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, Explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction. 24. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. 33. There is a distinction between readiness and willingness to perform the contract and both ingredients are necessary for the relief of Specific Performance. In Acharya Swami Ganesh Dassji v. Sita Ram Thapar cited by Mr. Venugopal, this Court said that there was a difference between readiness and willingness to perform a contract. While readiness means the capacity of the plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the plaintiff. The same view was taken by this Court in Kalawati v. Rakesh Kumar. 34. Even in a first appeal, the first Appellate Court is duty bound to examine whether there was continuous readiness and willingness on the part of the plaintiff to perform the contract. This proposition finds support from Balraj Taneja v. Sunil Madan, and H.P. Pyarejan v. Dasappa where this Court approved the views taken by the Privy Council in Ardeshir Mama v. Flora Sassoon.” From the above, it is clear from the explanation that the plaintiffs must aver performance or readiness and willingness to perform the contract according to its true construction.
On perusal of plaint, the plaintiffs clearly averred as follows:
“tHf;F brhj;J rk;ge;jkhf 10.10.2012k; njjpapy; Vw;gl;l fpua cld;gof;if Mtzj;jpd;go tHf;F brhj;Jf;F chpa fpua Jif U:.19>25>000/y; thjpfsplkpUe;J gpujpthjpf;F Kd;gzkhf bry;yhd; U:.10>00>000/ nghf ghf;fp fpua Jif U:.9>25>000/ I gpujpthjpf;F brYj;jp thjpfs; fpiuak; Koj;Jf; bfhs;s jahuha; ,Uf;fpwhh;fs;. vdnt> thjpfs; fpiuak; Koj;Jf; bfhs;s Ready and Willing Mf ,Ue;J tUfpwhh;fs;. Mdhy; gpujpthjp thjpfsplk; ghf;fp fpiua Jifia bgw;Wf; bfhz;L tHf;F brhj;ijg; bghWj;J fpiua gj;jpuk; vGjpg; gjpe;J bfhLf;fhky; tPz; fhyjhkjk; bra;J tUfpwhh;...” On perusal of legal notice Ex.A.3, the plaintiffs stated about the above said version in their legal notice. The plaintiffs categorically deposed in their evidence as P.W.1. Moreover, the plaintiff has examined P.W.2 and P.W.3, who have deposed supporting the case of the plaintiffs. The defendant has examined D.W.2, who is alleged to be witness to the sale agreement has deposed that “fpiua xg;ge;jj;jpy; ehd; rhl;rp ifbaGj;J nghltpy;iy. fpiua xg;ge;jj;jpy; vd;d vd;d vGjg;gl;Ls;sJ vd goj;Jg; ghh;f;ftpy;iy..” So, the evidence of D.W.2 need not be considered as it has no weight. Therefore, the plaintiffs have clearly established the ingredients of Section 16 of the Act. The defendant admitted that he has received Rs.5,00,000/- on the date of sale agreement on 10.10.2012 and has also received Rs.5,00,000/- on 21.11.2012. If it is so, in case the plaintiffs were not willing to purchase, they had no reason to pay further amount. Total sale consideration is Rs.19,25,000/-. The defendant received more than 50% of that amount. It is settled position in (2017) 4 Supreme Court Cases 654 “A.Kanthamaniu /v/ Nasreen Ahmed” case “it is not necessary for the plaintiff to produce the money or vouch a concluded scheme for financing the transaction to prove his readiness and willingness, muchless purchaser need not prove possession of sufficient money for financing transaction during stipulated period. In this case, the defendant admitted the execution of sale agreement and also receipt of advance of substantial amount.
The senior Judge of this Court held in a case in S.A.No.565 of 2015 reported in 2022 (4) CTC 649 following the judgment of the Hon'ble Supreme Court in P.Ramasubbamma v. V.Vijayalakshmi & Others [Civil Appeal No. 2095 of 2022, dated 11.04.2022]. ''20. Once the execution of the agreement of sale and the receipt of the substantial amount towards the sale consideration is established, there is nothing more to be proved by the agreement holder to establish his readiness and willingness to perform his part of the contract. The finding of the lower Appellate Court in this regard does not suffer from any perversity and it does not require the interference of this Court. This Court holds that the plaintiff had established the execution of the sale agreement and also the payment of substantial amount towards sale consideration and also his readiness and willingness to perform his part of the contract. Therefore, the natural consequence would be that the plaintiff will be entitled for the relief of specific performance. The substantial question of law framed by this Court is answered accordingly.'' Therefore, from the above facts and circumstances, the plaintiffs have established their readiness and willingness to perform their part of the contract and the trial Court has correctly held the same in favour of the plaintiffs. The citations relied on by the appellant/defendant side are not applicable to the facts and circumstances of this case, whereas the rulings relied on by the respondents/plaintiffs side are applicable to the facts of this case. Therefore, this Court is of the considered view that time is not the essence of contract in the case on hand is concerned and the trial Court has rightly held that there is no implication that time is the essence of the contract in this case.
The trial Court has correctly appreciated the evidence adduced on both sides and after considering the arguments and citations relied on by both, the trial Court correctly held that the respondents/plaintiffs have proved their case and they are entitled to the discretionary relief of specific performance. Hence, the points are answered against the appellant/defendant. For all these reasons, the judgment and decree of the trial Court is sustainable in law and the same need not be interfered with by way of this appeal. Thus, the appeal fails.
In the result, this Appeal Suit is dismissed. The judgment and decree, dated 30.11.2015 rendered in O.S.No.48 of 2013 on the file of the learned Principal District Judge, Dindigul, is confirmed. No costs. Consequently, the connected Miscellaneous Petition is closed. 22.01.2026
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