Case Note & Summary
The dispute arose out of an agreement to sell dated 1st June 1978 executed by the original defendant No.2 (since deceased, represented by appellants) in favor of the plaintiff-respondent No.1 (Pradip Ramchandra Mutalik Desai) for a total consideration of Rs. 10,000. The plaintiff paid Rs. 2,000 as earnest money and was put in possession of the suit property. The balance of Rs. 8,000 was to be paid at the time of execution of the sale deed. The defendant failed to execute the sale deed despite repeated demands. The plaintiff filed a suit for specific performance in 1983. The trial court dismissed the suit holding that the plaintiff was not ready and willing to perform his part and that time was of the essence. The first appellate court confirmed the dismissal. In second appeal, the High Court framed substantial questions of law regarding readiness and willingness, time being of essence, and limitation. The High Court held that the agreement did not make time of essence, the plaintiff had always been ready and willing, and the suit was within limitation. The court allowed the appeal, set aside the judgments below, and decreed the suit for specific performance directing the defendants to execute the sale deed on payment of the balance consideration within three months.
Headnote
A) Specific Relief Act, 1963 - Section 16(c) - Readiness and Willingness - Plaintiff must prove continuous readiness and willingness to perform his part of the contract - In the absence of any stipulation making time of essence, the court must consider the conduct of the parties and the circumstances - Held that the plaintiff had always been ready and willing to pay the balance consideration and the defendant failed to execute the sale deed (Paras 5-10). B) Contract Act, 1872 - Section 55 - Time not of essence - In agreements for sale of immovable property, time is not presumed to be of the essence unless expressly stipulated or implied from the nature of the property - Held that the agreement did not make time of essence and the defendant did not fix any time for performance (Paras 5-6). C) Limitation Act, 1963 - Article 54 - Suit for specific performance - Limitation period of three years from the date fixed for performance, or if no date fixed, when the plaintiff has notice that performance is refused - Held that the suit was filed within limitation as the defendant refused to perform only when the plaintiff demanded execution (Paras 7-8). D) Evidence - Part Performance - Possession delivered under agreement to sell - Delivery of possession pursuant to an agreement to sell is a strong circumstance indicating the agreement was acted upon - Held that the plaintiff was put in possession and that fact coupled with payment of earnest money showed part performance (Paras 9-10).
Issue of Consideration
Whether the courts below erred in dismissing the suit for specific performance of an agreement to sell on the ground that the plaintiff was not ready and willing to perform his part of the contract and that time was of the essence of the contract.
Final Decision
Second appeal allowed. Judgments and decrees of the trial court and first appellate court set aside. Suit for specific performance decreed. Defendants directed to execute sale deed in favor of plaintiff within three months on payment of balance consideration of Rs. 8,000. In default, plaintiff entitled to get sale deed executed through court. No order as to costs.
Law Points
- Specific performance
- Time not of essence
- Part performance
- Agreement to sell
- Possession
- Balance consideration
- Limitation
- Readiness and willingness
