Time is Essence of Contract if Unequivocally Stated and Linked to Termination for Non-Payment

The plaintiffs (respondents) entered into a registered Agreement of Sale dated 17.09.2005 to purchase agricultural land from the defendant (appellant) for ₹60,41,875.

An advance of ₹10,00,000 was paid, and the balance of ₹50,41,875 was due by 15.11.2005, with the agreement explicitly stating "time being the essence of the contract".

Despite the defendant’s letter dated 05.10.2005 confirming his availability in Bengaluru to conclude the sale, the plaintiffs failed to pay the balance.

On 18.11.2005, the defendant terminated the agreement and forfeited the advance.

The plaintiffs replied only on 15.02.2006, claiming the defendant failed to provide a survey sketch (Form 11-E) and resolve boundary disputes.

The Trial Court decreed specific performance in favor of the plaintiffs, holding that time was not the essence and the defendant had breached "implied" obligations.

The defendant appealed to the High Court.

1. Whether the time was the essence of the contract and the plaintiffs failed to perform their part under the Agreement of Sale dated 17.09.2005?

2. Whether the plaintiffs proved their readiness and willingness to perform their part of the contract within the stipulated time?

3. Whether the defendant breached the terms of the agreement, rendering the suit liable to be decreed?

The court applied Section 16(c) of the Specific Relief Act, 1963, requiring the plaintiff to aver and prove continuous readiness and willingness.

Regarding time as the essence, it relied on Chand Rani v. Kamal Rani, which holds that while there is no general presumption in immovable property, it can be inferred from express terms, the nature of the property, and surrounding circumstances.

It applied the principle from A.S. Vidyanadam v. Vairavan that even where time is not the essence, the court must exercise discretion considering the time limits specified.

Finally, it noted Padmakumari v. Dassayan, which establishes that "implied" obligations (like measurement) do not excuse a purchaser’s failure to pay the balance within a contractually mandated timeframe.

The Court found that Clause 1(b) and Clause 8 of the Agreement unequivocally made time the essence of the contract.

The plaintiffs agreed to purchase the property on an "as is where is" basis and waived objections to title, yet later used the lack of a survey sketch—which was not a contractual requirement at the time—as a pretext for non-performance.

Evidence from PW-1 (plaintiffs' witness) showed they did not have the funds ready nor did they obtain demand drafts by the deadline.

The Court noted the plaintiffs' significant delay: they replied to the termination notice three months late and filed the suit nearly three years later, suggesting they were waiting for property prices to rise rather than being genuinely ready and willing.

The Court held that the Trial Court erred by creating "implied" obligations for the defendant that contradicted the express "as is" terms of the contract.

The Court set aside the Trial Court's judgment and decree dated 10.10.2013; The appeal was allowed, and the suit for specific performance (O.S. No. 297/2008) was dismissed with costs; All interlocutory applications, including those for additional evidence and amendment of the plaint, were dismissed.