Full Judgment Text
2024 INSC 28
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.8185 OF 2009
ALAGAMMAL AND ORS.
… APPELLANTS
VERSUS
GANESAN AND ANR.
… RESPONDENTS
A1: ALAGAMMAL
A2: PALANIAMMAL
A3: MARIAMMAL
A4: PATTAYEE AMMAL
A5: KARUPPARAJ
A6: LAKSHMI
A7: THANGAM
A8: MARUTHAMBAL
R1: GANESAN
R2: MAGUDEESWARI
J U D G M E N T
AHSANUDDIN AMANULLAH, J.
Signature Not Verified
Digitally signed by
POOJA SHARMA
Date: 2024.01.10
15:42:58 IST
Reason:
Heard learned counsel for the parties.
2
2. The present appeal is directed against the
Final Judgment dated 28.04.2009 (hereinafter
referred to as the “Impugned Judgment”) passed by
the Madurai Bench, Madras High Court (hereinafter
referred to as “the High Court”) dismissing a
Second Appeal [S.A. (MD) No.1127 of 2008] filed by
the appellants/original defendants.
BRIEF FACTS:
3. The appellants no.1, 2 and 3 entered into a
registered Agreement of Sale (hereinafter referred
to as the “Agreement”) with the respondents on
22.11.1990 to sell the suit property for a
consideration of Rs.21,000/-, against which
Rs.3000/- had been received in advance. Further,
six months’ time was fixed for completion of the
transaction. The appellants No.1, 2 & 3, in the
meantime, had executed a Sale Deed with regard to
the property in question with appellant no.7 on
3
05.11.1997 for a consideration of Rs.22,000/-. On
18.11.1997, the respondents sent a Notice to the
appellants calling upon them to execute the
Agreement. This led to the respondents filing of
Original Suit No.165 of 1998 before the Munsif,
District Court, Dindigul against the appellants
for specific performance of the Agreement, damages
and for recovery of money with interest. The suit
stood dismissed by the Principal District Munsif
Judge, Dindigul by order dated 10.09.2000. An
appeal bearing A.S. No.258 of 2008 filed by the
respondents was allowed by the First Appellate
Court, and the same has been upheld by the High
Court by the Impugned Judgment dated 28.04.2009.
SUBMISSIONS BY THE APPELLANTS:
4. Learned counsel for the appellants submitted
that as per the Agreement, the balance
consideration amount of Rs. 18,000/- was to be
paid within six months which was admittedly not
4
done. He submitted that the so-called subsequent
payments on 16.12.1990 of Rs.1,000/-; on
15.04.1991 of Rs.3,000/-, and; on 17.09.1991 of
Rs.2,500/- though were not actually paid to the
appellants and even without admitting the same and
accepting it for the sake of argument, the same is
incorrect as the fingerprint expert has found the
thumb-impression of the appellant no.1 as not
matching the admitted actual sample thumb-
impression of the appellant no.1. and, thus, the
very basis of holding that time was not the
essence of the agreement gets washed away. It was
submitted that the Agreement stipulated that if
there was default on the part of the respondents,
the advance paid would be forfeited, and the
entitlement to obtain the Sale Deed and get
possession free from all encumbrances would also
end.
5
5. It was submitted that once the fingerprint
has been disapproved of by an expert and such
report has been brought before the First Appellate
Court, the claim based on such a document on which
forgery has been committed itself renders the
whole transaction inadmissible in law on the well-
settled principle that the respondents did not
come before the Court with clean hands as the
entire claim was based on a forged document.
6. It was submitted that the claim of the
respondents to have paid Rs.3,000/- on 18.09.1992;
Rs.1,800/- on 24.07.1996; Rs.1,300/- on 25.07.1996
and Rs.1,000/- on 29.07.1996 i.e., a total of
Rs.20,425/- and ultimately Rs.1,000/- on
21.04.1997 i.e., an excess of Rs. 425/- over the
amount indicated in the Agreement, was false.
7. Learned counsel submitted that the
endorsement(s) made not having been proved, it
cannot be assumed that the respondents were ready
6
and willing, or that they had, in fact, paid the
excess amount.
8. It was contended that the Legal Notice sent
on behalf of the respondents dated 18.11.1997 was
clearly to get over the fatal lapses on their part
and to give life to a dead cause i.e., revive the
Agreement, which already stood incapable of being
executed through Court due to efflux of time. On
this issue, the contention was that readiness and
willingness must be pleaded and proved which has
not been done as is clear from the averments made
in the plaint filed by the respondents. Thus, it
was submitted that the trial court and even the
First Appellate Court not recording any finding on
the aspect of the readiness and willingness on the
part of the respondents, the High
Court’s
observation in the Impugned Judgement on readiness
and willingness of the respondents is without
basis.
7
9. Learned counsel submitted that readiness and
willingness has to be specifically pleaded and
proved as per Section 16(c) of the Specific Relief
Act, 1963 (hereinafter referred to as the “1963
Act”) and there cannot be any question of drawing
inference. Thus, he submitted that the respondents
were obliged to obtain stamp-paper and draw up the
Sale Deed, of which there is no indication in the
plaint. It was urged that this establishes that
there was no readiness and willingness to comply
with their obligations in terms of the Agreement.
10. Learned counsel submitted that the thumb-
impression(s) in the endorsement(s) have neither
matched nor been found to be identical as per the
fingerprint report which has been
expert’s
referred to in the judgment of the First Appellate
Court.
8
11. Learned counsel submitted that as per the
judgment rendered by the First Appellate Court and
affirmed by the High Court, the last payment made
and endorsed on 17.09.1991 has been accepted and
thus three years from such date would be
16.09.1994 but the suit was instituted only on
23.03.1998, which is clearly barred by limitation.
12. It was submitted that the Trial Court had
found that the endorsements were silent regarding
extension of time, which finding has not been
disturbed either by the First Appellate Court or
the High Court and looking at the issue from such
angle, six months’ time under the Agreement would
expire on 21.05.1991 and a three-year limitation
would end on 22.05.1994. On this, learned counsel
submitted that the contention of the respondents
that the limitation would start from the judgment
rendered in Original Suit No.551 of 1992 dated
24.07.1996, filed by appellant no.1 for seeking
9
possession and eviction of her husband and mother-
in-law from the suit property, is not the correct
legal perspective, as mere absence of possession
would not have defeated the passing of title from
the appellants in favour of the respondents by the
execution of a Sale Deed. The object of the
Agreement was only for conveying the title of the
property in question.
13. Learned counsel submitted that neither
Original Suit No.551 of 1992 nor the judgment
rendered therein have been mentioned by the
respondents in Original Suit No.165 of 1998 for
computing the cause of action for filing suit in
the year 1998 with regard to the Agreement, which
was entered into in 1990. Further, it was urged
that it was incumbent upon the respondents to have
obtained the Sale Deed and possession through
Court as set forth in the Default Clause in the
Agreement and thus, the Legal Notice dated
10
18.11.1997 by the respondents would not extend the
time as it had expired much before and such
unilateral issuance of notice would not get over
the legal bar of Article 54 of the Limitation Act,
1963 (hereinafter referred to as the “Act”).
14. Learned counsel summed up arguments by
contending that in any view of the matter, prior
to filing of the suit, the property in question
had already been sold under registered Sale Deed
to the appellant no.7 and the suit for specific
performance was required to be dismissed as the
Sale Deed to appellant no.7 has not been
challenged.
15. Learned counsel relied upon the decision of
this Court in K.S. Vidyanadam v Vairavan , (1997) 3
SCC 1 , at Paragraphs 10, 11 and 13 for the
proposition that Courts in India have consistently
held that in the case of agreement of sale
relating to immovable property, time is not the
11
essence of the contract unless specifically
provided to that effect, and the period of
limitation prescribed by the Act for filing a suit
was 3 years.
16. It was contended that in the aforesaid
judgment, the terms of the agreement therein were
identical to the instant Agreement, inasmuch as
there was no reference to any tenant in the
building and it was stated that within six months,
the plaintiff should purchase the stamp-papers and
pay the balance consideration upon which the
defendants shall execute the Sale Deed either in
his name or the name(s) proposed by him before the
Sub-Registrar. It was restated that there was no
prior letter/notice from the plaintiffs
(respondents) to the defendants (appellants)
calling upon them to get the Sale Deed executed
till the issuance of the Legal Notice dated
12
18.11.1997 i.e., after a gap of 6 ½ years,
identical to the facts in K.S. Vidyanadam ( supra ).
SUBMISSIONS ON BEHALF OF THE RESPONDENTS:
17. In opposition to the appeal, learned counsel
for the respondents submitted that on 23.03.1992,
appellant no.1 had filed Original Suit No.551 of
1992 against her husband, mother-in-law, second
wife of her husband and the son of the second
wife, which was decreed. He submitted that
appellants even after accepting Rs.425/- over and
above the amount indicated in the Agreement and
even after getting a decree for declaration and
possession of the suit property in her favour on
24.07.1996, did not execute the Sale Deed due to
which Legal Notice was sent to her on 18.11.1997.
As no action was taken, the respondents were
forced to file a suit on 23.03.1998 seeking
specific performance.
13
18. Learned counsel submitted that the First
Appellate Court had recorded that the Sale Deed
executed by appellant no.1 in favour of appellant
no.7 dated 05.11.1997 was not bonafide as the said
sale was effected after getting an order for
declaration and recovery of possession of the suit
property in favour of appellant no.1 on 24.07.1996
in Original Suit No.551 of 1992.
19. Learned counsel submitted that the issue
whether time is the essence of the contract i.e.,
the Agreement would depend also on the conduct of
the parties and in the present case, when money
was accepted by appellant no.1, much after the
stipulated time, clearly the Agreement’s validity
so as to culminate in sale could not be said to
have been extinguished, as by accepting money
later, the time indicated for completion of the
transaction by execution of Sale Deed had been
relaxed.
14
20. It was contended that the actual intention of
the parties was not only to execute the Sale Deed
but also handover the possession which is an
implied term of every sale of immovable property
and thus only when on 24.07.1996, the appellant
concerned became capable of handing over
possession, limitation would start from such date
as otherwise even if the Sale Deed was executed in
favour of the respondents, it would have been of
no real consequence in the absence of possession
being capable of hand over.
21. Learned counsel contended that the stand
taken by the appellants, that the proposed sale
was only for transfer of title and not possession,
cannot be accepted since the sale of immovable
property is always for the transfer of possession
from the seller to the buyer in terms of Section 5
read with Section 54 of the Transfer of Property
Act, 1882 (hereinafter referred to as the “TP
15
Act”). Further, it was submitted that Section
55(f) of the TP Act contemplates duty of the
seller to hand over possession of the property at
the time of sale, and if the seller is not in
possession of the property at the time of the
agreement to sell or thereafter, it is a “material
in the property necessarily to be
defect”
disclosed to the purchaser at the time of sale in
accordance with Section 55(1)(a) of the TP Act.
Thus, according to him, it is the obligation of
the seller to hand over possession at the time of
sale, as was stipulated in the Agreement.
22. On the question of whether time is of the
essence in such a contract, it was contended that
when a party is not in possession to hand over the
same at the time of execution of an agreement for
sale, then time would not be of the essence as the
right to sue would accrue in favour of the person
to whom the suit property is required to be sold
16
only upon the vendor being in a position to hand
over possession of the property to the buyer. It
was further submitted that subsequent conduct of
parties is also relevant for testing whether time
is of the essence of the contract in question. It
was submitted that in the present case, the
acceptance of money much after the expiry of the
six-month period by the appellant no.1 from the
respondents leaves no doubt that time was not the
essence and the time for performance of the
Agreement would commence only after obtainment of
physical possession by the appellants.
23. In support of his contentions, learned
counsel relied upon the decision of this Court in
Godhra Electricity Company Limited v State of
Gujarat , (1975) 1 SCC 199 , the relevant paragraphs
being 11 to 16; of the United Kingdom Supreme
Court in
The Commissioners for Her Majesty’s
Revenue and Customs v Secret Hotels2 Limited
17
(formerly Med Hotels Limited) , [2014] UKSC 16
1
dated 05.03.2014, the relevant being paragraph 33 ,
th
, 7 Edition
and; The Interpretation of Contracts
Sir Kim Lewison,
by the relevant being paragraph
3.189.
ANALYSIS, REASONING AND CONCLUSION:
24. Having considered the matter, this Court
finds that the Judgment impugned cannot be
sustained. The moot question revolves around
whether the Agreement dated 22.11.1990 discloses a
fixed time-frame for making payment in full by the
respondents that is, in terms of the recitals in
the agreement for sale executed by the appellant
no.1 in favour of the respondents. The admitted
position is that the time indicated in the
1
‘ 33. In English law it is not permissible to take into account the subsequent behaviour or statements of the parties
as an aid to interpreting their written agreement – see FL Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC
235. The subsequent behaviour or statements of the parties can, however, be relevant, for a number of other reasons.
First, they may be invoked to support the contention that the written agreement was a sham – ie that it was not in
fact intended to govern the parties’ relationship at all. Secondly, they may be invoked in support of a claim for
rectification of the written agreement. Thirdly, they may be relied on to support a claim that the written agreement
was subsequently varied, or rescinded and replaced by a subsequent contract (agreed by words or conduct).
Fourthly, they may be relied on to establish that the written agreement represented only part of the totality of the
parties’ contractual relationship. ’
18
Agreement was six months from 22.11.1990 i.e.,
till 21.05.1991 and as per the Legal Notice dated
18.11.1997 sent by the respondents to the
appellants, only Rs.7000/- was paid within the
time stipulated. Perusal of the Agreement reveals
that the respondents had agreed to pay the
appellants Rs.21,000/- for the property in
question, out of which Rs.3,000/- was already paid
as earnest money and the rest was to be paid
within 6 months. The respondents were to purchase
stamp papers at their expense and the appellants
had to register the Sale Deed either in the name
of the respondent no.1 or as proposed by him
before the Sub-Registrar after paying the
remaining/balance amount. If the appellants failed
to register the Sale Deed, respondent no.1 had a
right to deposit the balance of sale consideration
in the Civil Court and get sale with possession
effected through Court from the first party i.e.,
appellants no.1 to 3.
19
25. At this juncture, the Court would indicate
that within six months there existed the onus of
paying the entire balance amount of Rs.18,000/- by
the respondent no.1 to the appellant no.1. It is
not the case of the respondents that they had even
offered to pay the remaining/balance amount before
the expiry of the six-month period. Thus, payment
of Rs.3,000/- only out of Rs.21,000/- having been
made, or at best Rs.7,000/- out of Rs.21,000/-,
which is the amount indicated in the Legal Notice
sent by the respondents to the appellants, the
obvious import would be that the respondents had
not complied with their obligation under the
Agreement within the six-month period.
26. Pausing here, it is notable that the appellant
no.1 having accepted payment of Rs.1,000/- on
21.04.1997 i.e., after appellant no.1 had executed
a Sale Deed in favour of appellant no.7 on
05.11.1997, coupled with the fact that the
20
forensic expert found the two thumb-impressions
purportedly acknowledging payment after the expiry
of the time fixed not matching the fingerprints of
appellant no.1 is clearly indicative that time
having not been extended, no enforceable right
accrued to the respondents for getting relief
under the 1963 Act. At the highest, if the
appellant no.1 had accepted money from respondent
no.1 after the expiry of the time-limit, which
itself has not been conclusively proved during
trial or even at the first or second appellate
stages, the remedy available to the defendants was
to seek recovery of such money(ies) paid along
with damages or interest to compensate such loss
but a suit for specific performance to execute the
Sale Deed would not be available, in the prevalent
facts and circumstances. In the present case,
there is also no explanation, as to why, an excess
amount of Rs.425/-, as claimed, was paid by
respondent no.1 to the appellant no.1, when the
21
respondents’ specific stand is that due to the
appellants not being in possession of the property
so as to hand over possession to the respondents,
delay was occasioned. The submission that no
adverse effect could be saddled on the respondents
as decree for declaration and recovery of
possession was obtained by appellant no.1 in her
favour only on 27.04.1996 is not acceptable for
the reason that there is no averment that pursuant
to such decree, she had also obtained possession
through execution. Thus, the decree dated
27.04.1996 also remained only a decree on paper
without actual possession to appellant no.1. The
contention of the respondents becomes self-
contradictory especially with regard to cause of
action having arisen after such decree in favour
of the appellant no.1 since even at the time of
filing the underlying suit, actual possession not
being with appellant no.1, the Sale Deed could not
have been executed.
22
27. Another important aspect that the Court is
expected to consider is the fact that the
appellant no.7 in whose favour there was a Sale
Deed with regard to the suit premises, much prior
to issuance of any Legal Notice and the
institution of the suit in question and that no
relief had been sought for cancellation of such
Sale Deed, a suit for specific performance for
execution of sale deed qua the very same property
could not be maintained. The matter becomes worse
for the respondents since such relief was also not
sought even at the First Appeal stage nor at the
Second Appeal stage, despite the law permitting
and providing for such course of action. Even the
Legal Notice dated 18.11.1997 has been issued
after almost seven months from the alleged last
payment of Rs.1.000/-, as claimed by the
respondents to have been made on 21.04.1997.
28. Pertinently, though appellant no.7 was
arrayed as a defendant in the suit, yet no relief
23
seeking cancellation of his Sale Deed was sought
for.
29. The ratio laid down in K.S. Vidyanadam
(supra) which had a similar factual matrix
squarely applies in the facts and circumstances of
the present case, on the issue that time was the
essence of contract and even if time is not the
essence of the agreement, in the event that there
is no reference of any existence of any tenant in
the building and it is mentioned that within a
period of six months, the plaintiffs should
purchase the stamp paper and pay the balance
consideration whereupon the defendants will
execute the Sale Deed, there is not a single
letter or notice from the plaintiffs to the
defendants calling upon them to the tenant to
vacate and get the Sale Deed executed within time.
Further, the Legal Notice was issued after two and
a half years from expiry of the time period in
24
K.S. Vidyanadam ( supra ), whereas in the present
case, the Legal Notice has been issued after more
than six and a half years. The relevant paragraphs
from K.S. Vidyanadam ( supra ) read as under:
It has been consistently held by the
10.
‘
courts in India, following certain early
English decisions, that in the case of
agreement of sale relating to immovable
property, time is not of the essence of the
contract unless specifically provided to
that effect. The period of limitation
prescribed by the Limitation Act for filing
a suit is three years. From these two
circumstances, it does not follow that any
and every suit for specific performance of
the agreement (which does not provide
specifically that time is of the essence of
the contract) should be decreed provided it
is filed within the period of limitation
notwithstanding the time-limits stipulated
in the agreement for doing one or the other
thing by one or the other party. That would
amount to saying that the time-limits
prescribed by the parties in the agreement
have no significance or value and that they
mean nothing. Would it be reasonable to say
that because time is not made the essence
of the contract, the time-limit(s)
specified in the agreement have no
relevance and can be ignored with impunity?
It would also mean denying the discretion
25
vested in the court by both Sections 10 and
20. As held by a Constitution Bench of this
Court in Chand Rani v. Kamal Rani [(1993) 1
SCC 519]: (SCC p. 528, para 25)
“… 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. Even if it is not of
the essence of the contract, the Court
may infer that it is to be performed in
a reasonable time if the conditions are
(evident?): (1) from the express terms
of the contract; (2) from the nature of
the property; and (3) from the
surrounding circumstances, for example,
the object of making the contract.”
In other words, the court should look at
all the relevant circumstances including
the time-limit(s) specified in the
agreement and determine whether its
discretion to grant specific performance
should be exercised. Now in the case of
urban properties in India, it is well-known
that their prices have been going up
sharply over the last few decades
—
particularly after 1973 [ It is a well-
known fact that the steep rise in the price
of oil following the 1973 Arab-Israeli war
set in inflationary trends all over the
world. Particularly affected were countries
like who import bulk of their requirement
of oil.]. In this case, the suit property
is the house property situated in Madurai,
which is one of the major cities of Tamil
26
Nadu. The suit agreement was in December
1978 and the six months' period specified
therein for completing the sale expired
with 15-6-1979. The suit notice was issued
by the plaintiff only on 11-7-1981, i.e.,
more than two years after the expiry of six
months' period. The question is what was
the plaintiff doing in this interval of
more than two years? The plaintiff says
that he has been calling upon Defendants 1
to 3 to get the tenant vacated and execute
the sale deed and that the defendants were
postponing the same representing that the
tenant is not vacating the building. The
defendants have denied this story.
According to them, the plaintiff never
moved in the matter and never called upon
them to execute the sale deed. The trial
court has accepted the defendants' story
whereas the High Court has accepted the
plaintiff's story. Let us first consider
whose story is more probable and
acceptable. For this purpose, we may first
turn to the terms of the agreement. In the
agreement of sale, there is no reference to
the existence of any tenant in the
building. What it says is that within the
period of six months, the plaintiff should
purchase the stamp papers and pay the
balance consideration whereupon the
defendants will execute the sale deed and
that prior to the registration of the sale
deed, the defendants shall vacate and
deliver possession of the suit house to the
27
plaintiff. There is not a single letter or
notice from the plaintiff to the defendants
calling upon them to get the tenant vacated
and get the sale deed executed until he
issued the suit notice on 11-7-1981. It is
not the plaintiff's case that within six
months', he purchased the stamp papers and
offered to pay the balance consideration.
The defendants' case is that the tenant is
their own relation, that he is ready to
vacate at any point of time and that the
very fact that the plaintiff has in his
suit notice offered to purchase the house
with the tenant itself shows that the story
put forward by him is false. The tenant has
been examined by the defendant as DW 2. He
stated that soon after the agreement, he
was searching for a house but could not
secure one. Meanwhile (i.e., on the expiry
of six months from the date of agreement),
he stated, the defendants told him that
since the plaintiff has abandoned the
agreement, he need not vacate. It is
equally an admitted fact that between 15-
12-1978 and 11-7-1981, the plaintiff has
purchased two other properties. The
defendants' consistent refrain has been
that the prices of house properties in
Madurai have been rising fast, that within
the said interval of 2 1/2 years, the
prices went up three times and that only
because of the said circumstance has the
plaintiff (who had earlier abandoned any
idea of going forward with the purchase of
28
the suit property) turned round and
demanded specific performance. Having
regard to the above circumstances and the
oral evidence of the parties, we are
inclined to accept the case put forward by
Defendants 1 to 3. We reject the story put
forward by the plaintiff that during the
said period of 2 1/2 years, he has been
repeatedly asking the defendants to get the
tenant vacated and execute the sale deed
and that they were asking for time on the
ground that tenant was not vacating. The
above finding means that from 15-12-1978
till 11-7-1981, i.e., for a period of more
than 2 1/2 years, the plaintiff was sitting
quiet without taking any steps to perform
his part of the contract under the
agreement though the agreement specified a
period of six months within which he was
expected to purchase stamp papers, tender
the balance amount and call upon the
defendants to execute the sale deed and
deliver possession of the property. We are
inclined to accept the defendants' case
that the values of the house property in
Madurai town were rising fast and this must
have induced the plaintiff to wake up after
2 1/2 years and demand specific
performance.
11. Shri Sivasubramaniam cited the
decision of the Madras High Court in S.V.
Sankaralinga Nadar v. P.T.S. Ratnaswami
Nadar [AIR 1952 Mad 389 : (1952) 1 MLJ 44]
holding that mere rise in prices is no
29
ground for denying the specific
performance. With great respect, we are
unable to agree if the said decision is
understood as saying that the said factor
is not at all to be taken into account
while exercising the discretion vested in
the court by law. We cannot be oblivious to
the reality — and the reality is constant
and continuous rise in the values of urban
properties fuelled by large-scale
—
migration of people from rural areas to
urban centres and by inflation. Take this
very case. The plaintiff had agreed to pay
the balance consideration, purchase the
stamp papers and ask for the execution of
sale deed and delivery of possession within
six months. He did nothing of the sort. The
agreement expressly provides that if the
plaintiff fails in performing his part of
the contract, the defendants are entitled
to forfeit the earnest money of Rs 5000 and
that if the defendants fail to perform
their part of the contract, they are liable
to pay double the said amount. Except
paying the small amount of Rs 5000 (as
against the total consideration of Rs
60,000) the plaintiff did nothing until he
issued the suit notice 2 1/2 years after
the agreement. Indeed, we are inclined to
think that the rigor of the rule evolved by
courts that time is not of the essence of
the contract in the case of immovable
properties — evolved in times when prices
and values were stable and inflation was
30
unknown — requires to be relaxed, if not
modified, particularly in the case of urban
immovable properties. It is high time, we
do so. The learned counsel for the
plaintiff says that when the parties
entered into the contract, they knew that
prices are rising; hence, he says, rise in
prices cannot be a ground for denying
specific performance. May be, the parties
knew of the said circumstance but they have
also specified six months as the period
within which the transaction should be
completed. The said time-limit may not
amount to making time the essence of the
contract but it must yet have some meaning.
Not for nothing could such time-limit would
have been prescribed. Can it be stated as a
rule of law or rule of prudence that where
time is not made the essence of the
contract, all stipulations of time provided
in the contract have no significance or
meaning or that they are as good as non-
existent? All this only means that while
exercising its discretion, the court should
also bear in mind that when the parties
prescribe certain time-limit(s) for taking
steps by one or the other party, it must
have some significance and that the said
time-limit(s) cannot be ignored altogether
on the ground that time has not been made
the essence of the contract (relating to
immovable properties).
xxx
31
13. In the case before us, it is not mere
delay. It is a case of total inaction on
the part of the plaintiff for 2 1/2 years
in clear violation of the terms of
agreement which required him to pay the
balance, purchase the stamp papers and then
ask for execution of sale deed within six
months. Further, the delay is coupled with
substantial rise in prices — according to
the defendants, three times — between the
date of agreement and the date of suit
notice. The delay has brought about a
situation where it would be inequitable to
give the relief of specific performance to
the plaintiff.
’
(Emphasis supplied)
30. The decisions relied upon by the respondents,
relating to the conduct of parties are of no avail
to them in the circumstances, as even if the case
of later payments by the respondents to the
appellants is accepted, the same being at great
intervals and there being no willingness shown by
them to pay the remaining amount or getting the
Sale Deed ascribed on necessary stamp paper and
giving notice to the appellants to execute the
Sale Deed, it cannot be said that in the present
32
case, judged on the anvil of the conduct of
parties, especially the appellants, time would not
remain the essence of the contract.
31. For reasons afore-noted, the Impugned
Judgment of the High Court as also the judgment of
the First Appellate Court stand set aside. The
judgment/order of the Trial Court is revived and
restored.
32. The appeal is allowed accordingly.
33. In the facts and circumstances, no order as
to costs is proposed.
........................J.
[VIKRAM NATH]
`
........................J.
[AHSANUDDIN AMANULLAH]
NEW DELHI
JANUARY 10, 2024