Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 14
PETITIONER:
GOMATHINAYAGAM PILLAI AND ORS.
Vs.
RESPONDENT:
PALLANISWAMI NADAR
DATE OF JUDGMENT:
02/09/1966
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
WANCHOO, K.N.
BACHAWAT, R.S.
CITATION:
1967 AIR 868 1967 SCR (1) 227
CITATOR INFO :
R 1977 SC1005 (5)
ACT:
Contract, Act, 1872, s., 55-Time to be regarded as essence
of contract--Conditions for-Specific performance-Whether
decree can be granted unless party claiming can show he was
ready and willing at all times to perform his part.
HEADNOTE:
G and his son C, the first and second appellants, were
owners of a plot of land which they verbally agreed to sell
to the respondent on March 5, 1959, at a time when P,
another son of G, was on trial for murder and the latter
urgently needed funds for his defence. On that date, as
against the total agreed price of Rs. 15,106 the respondent
paid them Rs. 1006 as an advance amount for which a receipt
was executed by the two appellants. No time was fixed for
the completion of the sale. On April 4, 1959, upon receipt
of another amount of Rs. 2,000 from the respondent, the two
appellants executed a writing stipulating that the sale deed
would be executed on or before April 15, 1959. This writing
also incorporated a default clause imposing a penalty upon
the party failing to complete the sale by the agreed date.
The sale deed was however not executed by that date for
which different reasons, were given by each of the parties.
On April 15, another agreement was executed whereby it was
agreed to complete the sale by 30th April 1959 on the same
terms and conditions, but it was not completed by that date
either. On July 30, 1959, appellants 1 and 2 wrote to the
respondent stating that the agreement was subject to a spe-
cific undertaking that time was of the essence of the
agreement and since the respondent had failed to carry out
the agreement by April 30, 1959, the agreement stood
cancelled and the advance amount stood forfeited.
Thereafter on July 9, 1959 appellants 1 and 2 agreed to sell
the land to the 3rd appellant. On August 3, 1959 the
respondent deposited the balance of the amount payable by
him in a bank and informed the appellants that he was ready
and willing to carry out his part of the contract-, and he
called upon appellants 1 and 2 to execute the sale deed
within 3 days against payment of the balance of the price.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 14
The appellants having failed to execute the sale deed the
respondent instituted the present suit against them for a
decree for specific performance of the agreement.
The High Court reversed the decision of the Trial Court, and
decreed the claim of the respondent for specific
performance.
On appeal to this Court,
HELD: (By Wanchoo and Shah, JJ., Bachawat, J.
dissertation) Although the High Court had rightly held that
time was not of the essence of the contract, the finding of
the Trial Court that after entering into the contract the
respondent was not ready and willing to perform his part of
the contract must be accepted; a decree for specific
performance of the contract could not therefore be granted.
The agreements dated April 4 and April 15 did not express in
unmistakable language that time was to be of the essence and
existence of the default clause would not necessarily
evidence such intention. Fixation of the period within
which the contract is to be performed does not make the
stipulation as to time of the essence of the contract.
Intention to make
228
time of the essence of the contract may be evidenced by
either express stipulations or by circumstances which are
sufficiently strong to displace the ordinary presumption
that in a contract of sale of land stipulations as to time
are not of the essence. In the present case theme was no
express stipulation, and the circumstances were not such as
to indicate that it was the intention of the parties that
time was intended to be of the essence, of the contract.
[233E-H; 238 E-F]
Jamshed Khodaram Irani v. Burjorji Dhunjibhai, I.L.R. 40
Bom. 289 and Stickney v. Keeble. L.R. [1915] A.C. 386,
referred to.
Before he could be awarded a decree for specific
performance, the respondent had to prove his readiness and
willingness continuously from the date of the contract till
the date of hearing of the suit to complete his part of the
contract, and if he failed in that, his suit was liable to
fail. The Trial Court had found on the evidence that the
respondent was at no time ready and willing to perform his
part of the contract. This finding was never challenged
before the High Court and the High Court did not hold that
the finding was incorrect. [234 C]
Ardeshir Mamna v. Flora Sassoon, L.R. 55 I.A. 360, referred
to.
(Per Bachawat J. dissenting) : There was no specific issue
on the question whether the respondent was ready and willing
to perform the contract. The Trial Court was clearly wrong
in inferring that the respondent was not ready and willing
to perform the contract from the fact that from April 30,
1959 upto the middle of July 1959 the respondent had not
taken any steps in the matter and from his failure to
explain the delay. If the respondent was guilty of aches,
it was the duty of the appellants to fix a reasonable time
for the completion of the sale. Mere delay, short of waiver
or abandonment of the contract, is no ground for refusing
relief, nor is it evidence of lack of readiness -and
willingness. The materials on the record clearly indicated
that the ’respondent was at all material times ready and
willing to perform the contract. [239 E; 241 D-F]
Jamshed v. Burjorji, (1916) L.R. 43 I.A. 26 and Bank of
India Ltd. v. Jamsetji A. H. Chiney and M/s. Chinoy and
Company, (1949) L.R.77 I.A. 76, referred to.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 14
JUDGMENT:
CIVIL, APPELLATE JURISDICTION : Civil Appeal No. 1043 of
1965.
Appeal by special leave from the judgment and order dated
December 17, 1964 of the Madras High Court in Appeal Suit
No. 375 of 1961.
H. R. Gokhale and R. Ganapathy Iyer, for the appellants.
A. K. Sen and R. Gopalakrishnan, for the respondent.
The Judgment Of WANCHOO and SHAH, JJ. was delivered by SHAH,
J. BACHAWAT, J. delivered a dissenting Opinion.
Shah, J. This appeal with special leave is filed against the
judgment of the High Court of Judicature at Madras reversing
the decree of the Subordinate Judge, Ramnathapuram in
original suit No. 30 of 1959. Gomathinayagam Pillai and his
son Chinnathambia hillai-hereinafter collectively referred
to as appellants
229
1 & 2 -were owners of a plot of land Survey No. 1155/2-3 in
village Periyakulam, District Ramnathapuram. In March 1959,
Palaniappa Pillai son of the first appellant was standing
trial in a Criminal Court for the offence, of murder and the
first appellant was in need of funds to defend him. On
March 5, 1959 appellants 1 & 2 agreed verbally to sell S.
No. II 5 5/2-3 to Palaniswami Nadar -respondent in this
appeal-for Rs. 15,106/- and received Rs. 1006/- in part
payment of the price. No time was fixed for completion of
the sale. A receipt Ext. A-1 was executed by appellants 1 & 2
reciting that the land was agreed to be sold by
appellants 1 & 2 to the respondent and that Rs. 1006/- were
received as "advance amount." On March 31, 1959 Palaniappa
Pillai was convicted of the offence of murder and sentenced
to imprisonment for life. On April 4, 1959 appellants 1 & 2
received Rs. 2,000/- from the respondent and executed a
writing stipulating that the sale deed will be executed on
or before April 15, 1959. It was recited in that writing
that appellants 1 & 2 had agreed to sell on March 5, 1959
and had received Rs. 1006/- on that date, and Rs. 2,000/- on
April 4, 1959 and it was further recited that appellants 1 & 2 "s
hall settle the aforesaid sale within 2nd Chittiral,
Vikhari (15th April 1959) in favour of" the respondent "that
the amount shall be paid as per the particulars of the
receipt of sale consideration; that even though" appellants
1 & 2 "are prepared to settle the sale accordingly, if" the
respondent "raises any objection whatever to settle the
sale, he shall lose the advance amount of Rs. 3006/- (Rupees
Three thousand and six only); and that, even though" the
respondent "is prepared to settle the sale, if" appellants 1
& 2 "raise any objection whatever to settle the sale, they
shall add a sum of Rs. 3000/- to the aforesaid advance
amount of Rs. 3006/- and pay in all, a sum of Rs. 6006/-
(Rupees six thousand and six only) to" the respondent. The
agreement clearly incorporated a default clause imposing
penalty upon the party failing to carry out the terms of the
contract. But the sale deed was not executed on or before
April 15, 1959. Different reasons were given by the parties
for not completing the sale by the date stipulated. It was
the case of the respondent that appellants 1 & 2 wanted to
consult a lawyer and to ascertain whether it was necessary
to secure attestation by the first appellant’s son
Palaniappa and his daughters because the property originally
belonged to Ulagammal, wife of the first appellant. It was
the case of appellants 1 & 2 that they were full owners of
the land agreed to be sold and that the children of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 14
first appellant were not interested in the land and the
respondent set up false excuses and neglected to take the
sale deed as stipulated. On April 15 1959, another
agreement was executed. It was recited in the agreement :
As certain unforeseen circumstances have
arisen to settle the sale on this day as has
been fixed as per the
230
Agreement executed on 4th April 1959 by us
three Individuals, we have decided to consult
the Vakil so as to settle the sale within 30th
April 1959 and to settle the sale and to bind
ourselves as per the conditions mentioned in
the previous Agreement should whomsoever fail
to finalise the sale."
The sale was not completed even on April 30,1959. On July
30,1959, appellants 1 &2 addressed a letter to the
respondent stating that the agreement of sale was subject to
a "specific undertaking" that time was of the essence of the
agreement and it was twice extended at the request of the
respondent, and since the respondent had failed to carry out
the agreement even by April 30, 1959, the agreement stood
cancelled and the amount of Rs. 3006/- paid by the
respondent stood forfeited. On July 31, 1959 the Appellants
agreed to sell the land to P.K. Banarusami Naidu-who will
hereinafter be referred to as appellant No. 3. On August 3,
1959 the respondent deposited the balance payable by him
under the agreement of sale in a Bank ,and by letter dated
August 4, 1959 informed appellants 1 & 2 that time was not
of the essence, and that he was ready and willing to carry
out his part of the contract, and the respondent called upon
appellants 1 & 2 to execute a sale deed within three days of
the receipt of the letter against payment of the balance of
the price. He also offered to purchase the stamp paper and
to have the sale deed prepared for execution.
Appellants 1 & 2 having failed to execute the sale-deed the
respondent instituted original suit No. 30 of 1959 in the
Court of the Subordinate Judge, Ramnathapuram, against
appellants, 1, 2 & 3 and one Sethuramalingam Pillai (who was
implemented on the ground that he was a mortgagee of the
property by deed executed on September 15, 1952 for Rs.
6000/-) for a decree for specific performance of the
agreement, alleging that he was at all material times ready
and willing to perform his part of the contract and to
obtain the sale deed and it was only at the request of
appellants 1 & 2 that execution of the sale deed was twice
postponed and that appellants 1 & 2 had committed breach of
the contract. The suit was resisted by appellants 1, 2 & 3.
The learned Trial Judge dismissed the suit holding that
under the agreements dated April 4, 1959 and April 15, 1959
time was of the essence, that even if it be held otherwise
the respondent "was never ready and willing to perform his
part of the contract", that he had committed default in
carrying out his part of the bargain, that delay on the part
of the respondent to claim his rights under the agreement of
sale had caused the interest of the third appellant to
intervene and on that account the respondent was estopped
from enforcing the agreement, and that delay was evidence of
abandonment of the contract or of waiver of the right to
,enforce the contract. The Trial Judge accordingly rejected
the ,claim of the respondent for specific performance, but
awarded on
231
a concession made by appellants 1 & 2 a decree for recovery
of Rs. 3006/- with interest at 6 per cent. from the date of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 14
the decree till realisation against appellants 1 & 2.
Against the decree, the respondent appealed to the High
Court of Judicature at Madras. The High Court opined that
time was not of the essence of the contract, that delay on
the part of the respondent in claiming completion of sale
between April 30, 1959 and July 30, 1959 was not undue delay
and there was neither abandonment of the contract, nor
waiver, and that "even as a defaulting party", as found by
the Trial Court, the respondent was entitled to a decree for
specific performance of the agreement of sale. The High
Court accordingly reversed the decree passed by the Trial
Court, and decreed the claim of the respondent for specific
performance.
In this appeal with special leave, two questions fall to be
determined: (1) whether under the agreement of sale, time
was of the essence; and (2) whether as alleged by
appellants, 1, 2 & 3, the respondent was not ready and
willing to perform his part of the contract, and was on that
account disentitled to a decree for specific performance.
The facts which have a material bearing on the first
question have already been set out. Section 55 of the
Contract Act which deals with the consequences of failure to
perform an executory contract at or before the stipulated
time provides by the first paragraph:
"When a party to a contract promises to do a
certain thing at or before a specified time,
or certain things at or before specified
times, and fails to do any such thing at or
before the specified time, the contract, or so
much of it as has not been performed, becomes
voidable at the option of the promise if the
intention of the parties was that time should
be of the essence of the contract."
It is not merely because of specification of time at or
before which the thing to be done under the contract is
promised to be done and default in compliance therewith,
that the other party may avoid the contract. Such an option
arises only if it is intended by the parties that time is of
the essence of the contract. Intention to make time of the
essence, if expressed in writing, must be in language which
is unmistakable : it may also be inferred from the nature of
the property agreed to be sold, conduct of the parties and
the surrounding circumstances at or before the contract.
Specific performance of a contract will ordinarily be
granted, notwithstanding default in carrying out the
contract within the specified period, if having regard to
the express stipulations of the parties, nature of the
property and the surrounding circumstances, it is not
inequitable to grant the relief. If the contract relates to
sale of immovable property, it would normally be presumed
that time was not of the
232
,essence of the contract. Mere incorporation in the written
agreement of a clause imposing penalty in case of default
does not by itself evidence an intention to make time of the
essence. In Jamshed Khodaram Irani v. Burjorji Dhunjibhai
(1) the Judicial Committee -of the Privy Council observed
that the principle underlying s. 55 of the Contract Act did
not differ from those which obtained under the law of
England as regards contracts for sale of land. The Judicial
Committee observed :
"Under that law equity, which governs the
rights of the parties in cases of specific
performance of contracts to sell real estate,
looks not at the letter but at the substance
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 14
of the agreement in order to ascertain whether
the parties, notwithstanding that they named a
specific time within which completion was to
take place, really and in substance intended
more than that it should take place within a
reasonable time. . . . Their Lordships are of
opinion that this is the doctrine which the
section of the Indian Statute adopts and
embodies in reference to sales of land. It
may be stated concisely in the language used
by Lord Cairns in Tilley v. Thomas (1867) L.
R. 3 Ch. 61
"The construction is, and must be, in equity
the same as in a Court of law. A Court of
equity will indeed relieve against, and
enforce, specific performance, notwithstanding
a failure to keep the dates assigned by the
contract, either for completion, or for the
steps towards completion, if it can do justice
between the parties, and if (as Lord Justice
Turner said in Roberts v. Berry (1853) 3 De G.
M. & G. 284), there is nothing in the ’express
stipulations between the parties, the nature
of the property, or the surrounding
circumstances,’ which would make it
inequitable to interfere with and modify the
legal right. This is what is meant, and all
that is meant, when it is said that in equity
time is not of the essence of the contract.
of the three grounds mentioned by Lord
Justice Turner express stipulations’ requires
no comment. The ’nature of the property’ is
illustrated by the case of reversions, mines,
or trades. The ’surrounding circumstances’
must depend on the facts of each particular
case."
Their Lordships will add to the statement just
quoted these observations. The special
jurisdiction of equity to disregard the letter
of the contract in ascertaining what the
parties to the contract are to be taken as
having really
(1) I.L.R. 40 Bom. 289.
233
and in substance intended as regards the time
of its performance may be excluded by any
plainly expressed stipulation. But to have
this effect the language of the stipulation
must show that the intention was to make the
rights of the parties depend on the observance
of the time limits prescribed in a fashion
which is unmistakable. The language will have
this effect if it plainly excludes the notion
that these time limits were of merely
secondary importance in the bargain, and that
to disregard them would be to disregard
nothing that lay as its foundation. "Prima
facie, equity treats the importance of such
time limits as being subordinate to the main
purpose of the parties, and it will enjoin
specific performance notwithstanding that from
the point of view of a Court of Law the
contract has not been literally performed by
the plaintiff as regards the time limit
specified."
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 14
The Trial Court relied upon three circumstances in support
of its conclusion that time was of the essence of the
contract of sale : (i) though no time was prescribed by the
oral agreement, in the agreements writing dated April 4,
1959 and April 15, 1959 there were definite stipulations
fixing dates for performance of the contract; (ii) that the
second and the third agreements contained clauses which
imposed penalties upon the party guilty of default; and
(iii) that appellants 1 & 2 were in urgent need of money and
it was to meet their pressing need that they desired to
effect sale of the property. But the agreements dated April
4 and April 15 do not express in unmistakable language that
time was to be of the essence and existence of the default
clause will not necessarily evidence such intention.
Fixation of the period, within which the contract is to be
performed does not make the stipulation as to time of the
essence of the contract. It is true that appellants 1 & 2
were badly in need of money, but they had secured Rs. 3006/-
from the respondent and had presumably tided over their
difficulties at least temporarily. There is no evidence
that when the respondent did not advance the full
consideration they made other arrangements for securing
funds for their immediate needs. Intention to make time of
the essence of the contract may be evidenced by either
express stipulations or by circumstances which are
sufficiently strong to displace the ordinary presumption
that in a contract of sale of land stipulations as to time
are not of the essence. In the present case there is no
express stipulation, and the circumstances are not such as
to indicate that it was the intention of the parties that
time was intended to be of the essence of the contract. It
is true that even if time was not originally of the essence,
the appellants could by notice served upon the respondent
call upon him to take the conveyance within the time fixed
and intimate that in default of compliance with the
requisition the contract will be treated as can-
234
celled. As observed in Stickney v. Keeble (1) where in a
contract for the sale of land the time fixed for completion
is not made of the essence of the contract, but the vendor
has been guilty of unnecessary delay, the purchaser may
serve upon the vendor a notice limiting a time at the
expiration of which he will treat the contract as at an end.
In the present case appellants 1 & 2 have served no such
notice; by their letter dated July 30, 1959 they treated the
contract as at an end. If the respondent was otherwise
qualified to obtain a decree, for specific performance, his
right could not be determined by the letter of appellants 1
& 2.
But the respondent has claimed a decree for specific
performance and it is for him to establish that he was,
since the date of the contract, continuously ready and
willing to perform his part of the contract. If he fails to
do so, his claim for specific performance must fail. As
observed by the Judicial Committee of the Privy Council in
Ardeshir Mama v. Flora Sasson(2):
"In a suit for specific performance, on the
other hand, he treated and was required by the
Court to treat the contract as still
subsisting. He had in that suit to allege,
and if the fact was traversed, he was required
to prove a continuous readings and
willingness, from the date of the contract to
the time of the hearing, to perform the
contract on his part. Failure to make good
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 14
that averment brought with it the inevitable
dismissal of his suit."
The respondent must in a suit for specific performance of an
agreement plead and prove that he was ready and willing to
perform his part of the contract continuously between the
date of the contract and the date of hearing of the suit.
On this part of the case the Trial Court recorded a clear
finding against the respondent that he was at no time ready
and willing to perform his part of the contract. The High
Court did not consider the effect of this finding upon the
claim of the respondent and without expressing dissent with
that finding granted a decree for specific performance to
the. respondent.
It is necessary to consider the pleadings of the parties,
the issues raised, the findings recorded by the Trial Court
and the basis on which the appeal was pressed before the
High Court by counsel for the respondent. In paragraphs of
the plaint the respondent averred that he was always ready
and willing to perform his part of the contract and to have
the sale deed executed, but at the request of appealing 1 & 2 exec
ution of the sale deed was postponed. This was denied
by appellants 1, 2 & 3. They pleaded that the respondent was
not ready and willing to get the sale deed executed and that
he was deliberately putting off payment of the balance of
the consideration and was delaying performance of the
agreement. They
(1) L.R. [1915] A.C. 386.
(1) L.R. 55 I.A. 360, 372.
235
also pleaded that appellants 1 & 2 were "badly in need of
money", but the respondent committed default in completing
the sale as stipulated. The Trial Judge raised two issues
which are material on this part of the case
"2. Whether the plaintiff is not entitled to
the specific performance of the sale of the
suit properties in his favour ?
5. Whether the breach of the contract is
due to the fault of the dependents (appellants
1 & 2) or due to the fault of plaintiff (the
respondent) ?"
No specific issue was raised about the readiness and
willingness of the respondent to perform his part of the
contract, but the second issue included trial of the plea
raised by appellants, 1, 2 & 3. The parties were, it
appears, fully aware of what was required to be proved, and
led evidence in support of their respective cases. No
objection was raised in the Court of First Instance
protesting against the trial of that plea without a specific
issue thereon.
At the trial the respondent asserted that on April 15, 1959
be was willing to take the sale deed from appellants 1 & 2,
but on April 30, 1959 he was not ready to purchase the stamp
paper or take the sale deed. Somewhat inconsistently he
stated that on April 30, 1959 he met appellants 1 & 2 and
called upon them to execute the sale deed and appellant 1
told him that "he had urgent need to go for the case and
that he would get possession only later and the sale deed
would be executed after his return". The trial Court con-
sidered the plea that the respondent was not ready and
willing to perform his part of the contract on the footing
that time was not of the essence. The Court referred to the
admission made by the respondent that he was not willing to
take the sale deed on April 30, 1959, and then considered
the question whether the sale was not completed by April 30,
1959 on account of default on the part of the respondent or
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 14
of appellants 1 & 2. On a consideration of the evidence, the
Trial Court came to the conclusion that the respondent was
not ready to complete the sale by April 30, 1959, since he
wanted time for consulting his lawyer as to the desirability
of obtaining attestation of the children of appellant No. 1
in the proposed sale deed and that appellants 1 & 2 did not
ask for postponement. The Trial Court then proceeded to
consider whether default was committed by the respondent or
by appellants 1 & 2, and observed that mere assertion in the
plaint that he was ready and willing to perform the contract
was not sufficient and his readiness and willingness had to
be judged from what he had done or from his conduct
subsequent to the agreement, and on a review of the evidence
came to the conclusion that the respondent committed default
by not carrying out the contract on April 30, 1959, and that
even after April 30, 1959 he was not willing to have the
contract completed. The learned Sup.C.1./66n-2
236
Judge observed that the reasons set up by the respondent for
the delay in taking steps in the matter were "obviously
untrue.", and that the respondent was trying to put the
blame on the appellants and inventing excuses to explain the
omission in taking the sale deed. He concluded in
paragraph-18 of his judgment : "The consideration of the
evidence in the case discloses only one thing, viz., that
the plaintiff (the respondent) was never eager, prompt or
desirous or willing to take a sale deed in pursuance of
Exts. A-2 and A-3. It is the plaintiff (the respondent)
who committed default in performance of his part of the
agreement." The learned Judge then observed that in his view
time was of the essence of the contract and even if it was
not, the contract must be performed within a reasonable time
after the date fixed in the agreement dated April 4, 1959
and the agreement dated April 15, 1959, and this was not
done. The Trial Court thereafter summarised the evidence as
to the conduct of the respondent and appellants 1 & 2 and
held that the respondent was "never ready and willing to
perform his part or the contract at any time."
The Trial Judge apparently confused two independent issues
one of default in performance of the contract by the
respondent and the other of readiness and willingness of the
respondent to carry out his part of the contract. As
observed earlier, if time is not of the essence of the
contract, default occurs when a party serves a notice making
time of the essence and requires the other party within a
reasonable time fixed by the notice to carry out the terms
of the contract, and the party served with the notice fails
to comply with the requisition. In this case no such notice
was served, and from the mere delay in calling upon
appellants 1 & 2 to complete the contract, default on the
part of the respondent cannot be inferred. But the Trial
Court also came to the conclusion that the conduct of the
respondent as evidenced by his statement and his witnesses
proved that he was not ready and willing to perform his part
of the contract. This the Court inferred from the delay of
three months after April 30, 1959 and the evidence given by
the respondent to explain that delay and other
circumstances.
The Trial Court expressly recorded a finding on issue No. 2
adverse to the claim of the respondent. The respondent had,
as already observed, claimed that he was ready and willing
to perform his part of the contract and appellants 1, 2 & 3
had denied that claim. Before he could be awarded a decree
for specific performance, the respondent had to prove his
readiness and willingness continuously from the date of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 14
contract till the date of hearing of the suit and if he
failed in that, his suit was liable to fail. And the Trial
Court dismissed the respondent’s suit on that ground also.
The High Court could grant a decree for specific performance
in favour of the respondent against appellants 1 & 2 only if
the Court
237
was satisfied that the respondent was continuously ready and
willing to perform his part of the contract from the date of
the suit tin the date of hearing. But the respondent in the
High Court did not apparently challenge the finding of the
Trial Court on that question against the respondent. He
merely invited the High Court to decide the appeal on the
footing that even if the respondent "had defaulted in the
sense that on April 30, 1959 or before that date the
respondent was not ready with the necessary funds to go
through the sale" he was entitled to a decree for specific
performance. The statement so recorded is somewhat obscure
: a ground for rejecting the respondent’s claim for specific
performance will not arise merely because the respondent was
not ready with the necessary funds on April 30, 1959, if
time was not of the essence. But if the respondent was on
April 30, 1959 not ready and willing to, perform his part of
the contract, his suit must fail.
The Trial Court found that the respondent had committed
default in performing his part of the contract. This the
Court inferred from his statement made before the Court and
the evidence that for three months after the date fixed for
performance no steps were taken by the respondent for
completion of the contract. That inference however does not
necessarily follow from mere delay in calling upon
appellants 1 & 2 to perform the contract. But the Trial
Court also found that the respondent was at no time ready
and willing to perform his part of the contract. This
finding was never challenged before the High Court and the
High Court did not hold that the finding was incorrect.
Counsel for the respondent urged that the finding by the
Trial Court on the issue of readiness and willingness was
"without evidence, vague and perverse" and that the learned
Judges of the High Court were justified in "completely
ignoring" it and in granting a decree to the respondent for
specific performance, notwithstanding that finding. It is
difficult to characterise the finding as perverse or even
vague or without evidence. The Trial Judge on his view of
the evidence held that the respondent was at no time ready
and willing to perform his part of the contract. Whether
the evidence justified that conclusion is a matter of which
we may for the present defer consideration. But it is one
of the grounds on which the suit was dismissed by the Trial
Court. Without considering the evidence and without setting
aside that finding, a decree for specific performance could
not be granted, and there is, in the judgment of the High
Court no discussion of the evidence on this part of the
case.
Counsel for the respondent then urged that the inference
raised by the Trial Judge on the second issue, insofar as it
relates to the readiness and willingness for the respondent
to perform his part of the contract, could not be raised on
the findings recorded by him, The respondent had stated that
he was on April 30, 1959 not ready to purchase the stamp-
paper or to take the sale deed. After April
238
30, 1959 also according to the Trial Judge the respondent
took no steps to call upon appellants 1 & 2 to perform their
part of the contract, and did not purchase the stamp paper.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 14
The Trial Judge also found that the story of the respondent
that appellant No. 1 requested that completion of the sale
be postponed because he had to attend a social function at
Madurai and thereafter he had to go about making enquiries
for a suitable match for his grand-daughter, and that in the
first week of July 1959 appellant No. 1 and the respondent
went to V. Pillai P.W. 3 for preparation of the draft sale-
deed and that the first appellant requested for time to get
the attestation of his son and daughters, was not true, and
that the respondent was attempting to throw blame for the
delay on appellants 1 & 2 and was trying to invent excuses
to explain away his own unwillingness to take the sale-deed.
In the view of the Trial Court the respondent was undecided
as to whether he should go through with the ,contract, and
was apparently willing to allow the matter to drift. The
Trial Court has therefore come to the conclusion, having re-
gard to the admission made by the respondent, his subsequent
conduct and other circumstances, that the respondent was not
ready ,and willing to take the sale deed at any time. The
finding is based on prima facie good evidence, and the
inference raised by the Trial ,Court is reasonable. It
would be difficult for this Court to set aside the finding
without reappraisal of the evidence. Counsel for the
appellant has not asked us-and we think that in the
circumstances he was right in so doing-to review the
evidence on the record and to arrive at an independent
conclusion on the plea of readiness and willingness of the
respondent on the evidence, as the learned Judges of the
High Court may have done if the question was raised before
them. The finding of the Trial Court that after entering
into the contract the respondent was not ready and willing
to perform his part of the contract must be accepted.
The appeal is allowed and the decree passed by the High
Court is set aside, and the decree passed by the Trial Court
restored. There will be no order as to costs in this Court
and the High Court.
Bachawat, J. Having regard to the decision in Jamshed v.
Burjorji (1), the High Court rightly held that time was not
of the essence of the contract. The contract was entered on
March 5, 1959. On that day, the respondent paid a deposit
of Rs. 1,006/-. On April 4, 1959, the parties agreed that
the sale should be completed before April 15, 1959. On that
day, the respondent deposited another sum of Rs. 2,000/-.
On April 15, 1959, the time for completion of the sale was
extended up to April 30,1959. The transaction was not
completed within April 30, 1959. But as the time was not of
the essence of the contract, the contract remained alive.
On July 30, 1959, the appellants abruptly cancelled the
contract
(1) (1916) L.R. 43 I.A. 26.
239
and forfeited the deposit. The respondent did not accept
the cancellation. On August 3, 1959, he deposited the
balance price of Rs. 13,906/- in a bank. On August 4, 1959,
he called upon the appellants to perform the agreement, On
March 21, 1960, the respondent instituted the present suit.
The High Court repelled the contention that the relief of
specific performance was barred by delay. The appellants no
longer urge that the respondent was disentitled to relief on
the ground of delay. Counsel for the appellants took the
new point that the respondent was not ready and willing to
perform his part of the contract and his suit should be
dismissed on this ground. I find no trace of this argument
in the judgment of the High Court. Before the High Court,
the present appellants urged two points only, viz., (a) time
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 14
was of the essence of the contract and therefore the respon-
dent was guilty of breach of contract and (b) in any event,
the respondent was not entitled to relief on the ground of
delay. The High Court rejected both these contentions. The
appellants did not rely upon the finding of the trial Court
that the respondent was not ready and willing to perform the
contract. If the appellants relied on this finding, the
High Court would have suitably dealt with it. The High
Court could not have decreed the suit for specific per-
formance without finding that the respondent was at all
material times ready and willing to perform the contract.
The trial Court framed six issues. There was no specific
issue on the question whether the respondent was ready and
willing to perform the contract. I do protest against any
Court, be it the mofussil Court or the High Court, recording
a finding on such a vital question without raising a
specific issue on the point. Issue No. 2 was a general
issue. The issue was "whether the plaintiff is not entitled
to specific performance of the sale of the suit properties
in his favour." Under this issue, the trial Court in
paragraphs 17 to 20 of its judgment, discussed all kinds of
questions such as readiness and willingness, default in
performance of the contract, delay, waiver and abandonment.
The substance of the finding of the trial Court was that the
time was of the essence of the contract, and as the
respondent had failed to perform his contract by April 30,
1959, he was guilty of breach of contract and could not
claim specific performance. It further held that the
respondent was disentitled to relief on the ground of delay,
waiver, and abandonment. Incidentally, as the respondent
had failed to perform the contract by April 30, 1959 and had
taken no steps till July 30, 1959, the trial Court found
that he was never ready and willing to perform the contract.
The finding with regard to readiness and willingness was
linked up with the finding that the time was of the essence
of the contract and the respondent could not claim any
relief on the ground of delay. As we are reversing the
finding that the time was of the essence of the contract and
also that the respondent was.
240
disentitled to relief on the ground of delay, we must
reverse the finding that the respondent was not ready and
willing to perform the contract.
Counsel for the appellants laid stress upon an admission
made by the respondent in his cross-examination that on
April 30, 1959, he was not ready to purchase the stamp paper
or to take the sale deed. Counsel also relied upon the
concessions made on behalf of the respondent and recorded in
the following passages in the judgment of the High Court
"Before us Mr. K. S. Desikan for the appellant
made no attempt to canvass the finding that
his client had defaulted in the sense that on
April 30, 1959, or before that date the
appellant was not ready with the necessary
funds to go through the sale...... The
question then is, whether the appellant being,
as found by the trial Court, which, as we
said, is not contested before us, a defaulting
party, he is entitled to a decree for specific
performance. That would depend upon whether
there was undue delay on the part of the
appellant and whether respondents 1 and 2 have
given him reasonable notice that he must
complete the agreement within a definite
time."
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 14
The effect of these admissions is this : If the time was of
the essence of the contract, the respondent had defaulted on
April 30, 1959. But if the time was not of the essence of
the contract, he had committed no breach of contract and the
only question then was whether he could be refused relief of
specific performance on the ground of delay. It is no
longer contended that the respondent is disentitled to
relief on the ground of delay. As the time was not of the
essence of the contract, it was the duty of the appellants
to give to the respondent a notice fixing a reasonable time
for the completion of the sale. They did not do so.
Instead of fixing a reasonable time for the completion of
the sale, they wrongfully ’cancelled the contract by their
letter dated July 31, 1959. There was undoubtedly delay ,on
the part of the respondent to complete the sale. According
to the respondent, the appellants were putting off the sale
on various pretexts, but his testimony on this point was not
accepted by the trial Court. It follows that there was no
explanation for the delay in the completion of the sale.
But the High Court rightly found that neither the delay nor
the failure to explain the delay was a ground for refusing
relief.
After discussing the evidence, the trial Court recorded the
following finding :
"The reasons for the delay or the omission on
the part of the plaintiff to take any step in
the matter, are obviously untrue, and it is
clear that he was throwing
2 4 1
blame on defendant and finding out some reason
or other to explain the delay or omission to
take any sale deed. Thus from 30-4-1959 up to
the middle of July 1959, the plaintiff has not
taken any step in the matter .... The time
expired by 30-4-1959. Nothing was done by the
plaintiff till 30-7-1959 for a period of 3
months. The plaintiff did not do anything on
his part to implement the agreement for the
said period of 3 months."
On the basis of this finding it held that the
respondent was not ready and willing to
perform the contract. It said :
"The consideration of the evidence in the case
discloses only one thing, viz., that the
plaintiff was never eager, prompt or desirous
or willing to take a sale deed in pursuance of
Exs A-2 and A-3. It is the plaintiff who
committed default in performance of his part
of the agreement .... even if time was not the
essence of the contract, the plaintiff was
never ready and willing to perform his part of
the contract at any time."
I am of the opinion that the trial Court was clearly wrong
in inferring that the respondent was not ready and willing
to perform the contract from the fact that from April 30,
1959 up to the middle of July 1959 the respondent had not
taken any steps in the matter and from his failure to
explain the delay. If the respondent was guilty of
laches, it was the duty of the appellants to fix a reason-
able time for the completion of the sale. Mere delay, short
of waiver or abandonment of the contract is no ground for
refusing relief, nor is it evidence of lack of readiness and
willingness. The materials on the record clearly indicate
that the respondent was at all material times ready and
willing to perform the contract. The total consideration
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 14
money was Rs. 15,106/- On March 5, 1959, the respondent
made an advance deposit of Rs. 1,006/-. On April 4, 1959,
he made another deposit of Rs. 2,000/-. As soon as he
received the letter dated July 30, 1959, he deposited the
balance sum of Rs. 13,906/- in a bank. Counsel urged that
before July 30, 1959 the respondent should have been ready
with the money. There is no force in this contention. In
Bank of India Limited v. Jamsetji A. H. Chinoy and Messrs.
Chinoy and Company (1), the Privy Council decreed specific
performance of the contract to sell shares. On the question
of readiness and willingness of the buyer to perform the
contract, Lord Mcdermott observed at p. 91 of the Report :
"It is true that the first plaintiff stated
that he was buying for himself, that he had
not sufficient ready money to meet the price
and that no definite arrangements had been
made for finding it at the time of
repudiation. But to
(1) (1949) L.R. 77 I.A. 76.
2 4 2
prove himself ready and willing a purchaser
has not necessarily to produce the money or to
vouch a concluded scheme for financing the
transaction."
In my opinion, the respondent is entitled to
specific performance of the contract, and the
High Court rightly decreed the suit.
In the result, the appeal is dismissed with
costs.
ORDER
In accordance with the opinion of the majority the appeal is
allowed, the decree passed by the High Court is set aside
and the decree passed by the trial court restored. There
will be no order as to costs in this Court and in the High
Court.
R.K.P.S.
243