After Buyer Paid ₹1.31 Crore, Rajasthan HC Rejects Newspaper Cancellation And Orders Remaining Sellers To Register Their Land Shares On Balance Payment

The plaintiff agreed to purchase approximately 7.71 bighas of land from the defendants at ₹43 lakh per bigha.

Under the agreement dated 14 August 2012 and a supplementary agreement dated 13 September 2012, he paid a total of ₹1.31 crore, with the balance payable within three months.

The plaintiff alleged that the defendants delayed registration while a partition dispute and status quo orders concerning the land remained in force.

The defendants, asserting that the balance had not been paid by the deadline, announced cancellation of the agreement in a newspaper and claimed a right to forfeit the amount received.

The trial court rejected the plaintiff’s claim for specific performance and held that he was entitled to recover the amount paid. The plaintiff appealed; the defendants filed no cross-appeal or cross-objection.

Under Section 55 of the Contract Act, a failure to perform by a stipulated time makes the contract voidable at the promisee’s option only if the parties intended time to be of the essence. In contracts for the sale of immovable property, time is not ordinarily presumed to be of the essence; that intention must be determined from the contract’s language, the nature of the property, and the surrounding circumstances and conduct of the parties (Chand Rani v. Kamal Rani; Indira Kaur v. Sheo Lal Kapoor; Coromandel Indage Products Pvt. Ltd. v. Garuda Chit & Trading Co. Pvt. Ltd.)

Section 54 of the Transfer of Property Act recognises a sale for a price paid, promised, or partly paid and partly promised; the parties’ intention governs the passing of title, and non-payment of a balance does not by itself invalidate a completed sale (Kaliaperumal v. Rajagopal; Vidhyadhar; Dahiben)

In a claim for specific performance, the purchaser must establish readiness and willingness through the evidence and conduct of the parties

Although the agreement fixed a three-month period, the Court found no sufficient basis to treat that period as making time essential.

The plaintiff had paid ₹1.31 crore—substantial consideration—and the evidence, including the defendants’ conduct and the circumstances surrounding the pending land proceedings, supported his case that he remained willing to complete the purchase.

The defendants did not establish that they had first served a registered notice requiring payment of the balance before announcing cancellation in a newspaper. The plaintiff’s subsequent notices, which the defendants refused to accept, and his response to the cancellation announcement supported his readiness and willingness.

In those circumstances, the defendants’ cancellation and forfeiture were not accepted as a bona fide exercise of the agreement’s terms. However, the Court limited specific performance to the contracting defendants, excluding respondents 2, 5 and 6.

The plaintiff was directed to pay the balance within the prescribed period; if the defendants did not provide their bank details, he was to deposit it before the trial court. If the sale deeds were not executed thereafter, the plaintiff could have them registered through the trial court. The eligible defendants could receive the ₹1.31 crore deposited before the trial court, with interest, and the specified costs.