Facts
The Appellants (Defendants) entered into an agreement of sale dated 18.03.2011 to sell a property in Chitradurga to the Respondent (Plaintiff) for Rs. 58,00,000/-.
Source reference: p. 3-7The Plaintiff paid Rs. 32,10,000/- in installments, which helped the Defendants settle a bank loan and a prior litigation.
Source reference: p. 3-7The agreement stipulated that the balance consideration of Rs. 32,40,000/- was to be paid within three months.
Source reference: p. 6, 13While the Plaintiff made a part payment after the three-month period (30.06.2011), the Defendants eventually issued a legal notice on 04.10.2011 terminating the contract and offering a refund, alleging the Plaintiff failed to pay the balance within the stipulated time.
Source reference: p. 9-10The Trial Court decreed the suit for specific performance in favor of the Plaintiff.
Source reference: p. 11-12Issues
1. Whether the time was the essence of the contract in the Agreement of Sale dated 18.03.2011?
Source reference: p. 12, para 162. Whether the plaintiff has been able to prove his readiness and willingness throughout to perform his part of the contract?
Source reference: p. 12, para 16Law Applied
The court applied Section 96 and Order XLI Rule 1 of the CPC regarding appellate jurisdiction and Order XLI Rule 27 regarding additional evidence.
Source reference: p. 2, 18Constitution Bench decision in Chand Rani v. Kamal Rani, which holds that while there is no general presumption that time is the essence in immovable property sales, it can be inferred from express terms, the nature of the property, and surrounding circumstances.
Source reference: p. 26, 31Principles from K.S. Vidyanadam v. Vairavan regarding the need for performance within a reasonable time even if time is not the essence.
Source reference: p. 29The discretionary nature of specific performance under Section 20 of the Specific Relief Act, 1963 (pre-2018 amendment context).
Source reference: p. 29, 45Reasoning
The High Court observed that Clauses 15 and 16 of the agreement explicitly gave both parties the right to treat "time as the essence" and cancel the agreement upon default.
Source reference: p. 24-25The Court rejected the Trial Court’s finding that time was not the essence, noting that the express, unequivocal language of the contract overrode any general presumption.
Source reference: p. 27Accepting a part payment of Rs. 3,70,000/- after the expiry of the three-month period did not obliterate the original time-bound obligation.
Source reference: p. 27The Court analyzed the Plaintiff’s bank statements (Ex.P.2 and Ex.P.3), which revealed only meager balances (ranging from approx. Rs. 2,000 to Rs. 35,000) during the performance period, proving the Plaintiff lacked the financial "readiness" to pay the balance of over Rs. 25 lakhs.
Source reference: p. 28-29, 45Regarding equity, the Court found that the Defendants lived in the suit house with their family, whereas the Plaintiff sought the property for commercial expansion, thus the "comparative hardship" favored the Defendants.
Source reference: p. 45Holding
The Court held that time was the essence of the contract and the Plaintiff failed to prove readiness and willingness.
The High Court allowed the appeal and set aside the Trial Court's decree for specific performance.
Source reference: p. 46The Court ordered the Defendants to refund the paid amount of Rs. 32,10,000/- with 6% interest per annum from 30.06.2011.
Source reference: p. 46It further directed the Plaintiff to refund the stamp duty and registration charges incurred during the execution of the (now cancelled) sale deed.
Source reference: p. 46All pending applications for additional evidence (I.A. Nos. 1/2025 and 1/2026) were dismissed for failing to meet the criteria of Order XLI Rule 27.
Source reference: p. 22-23Original Court PDF
SRI RAJU SHETTIGARvsSRI S SHIVAPRAKASH
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