Case Note & Summary
The case arose from a Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908, filed against the judgment and decree dated 25.04.2015 in O.S.No.51/2011 by the I Additional Senior Civil Judge, Chitradurga, which decreed the suit for specific performance of an agreement of sale dated 18.03.2011. The suit property was situated in Chitradurga. The plaintiff, proprietor of M/s. Shanthi Agencies, sought to purchase the defendants' property to establish a showroom. The defendants had a housing loan with State Bank of India and were offered a One Time Settlement scheme for Rs.20,00,000 to be paid by March 2011. They also had to settle a previous suit O.S.No.7/2010 for Rs.5,50,000. On 18.03.2011, the parties entered into a sale agreement for a total consideration of Rs.58,00,000. The plaintiff paid Rs.5,60,000 on that date, cleared the bank loan of Rs.19,90,000, and received the original documents. By 29.03.2011, the plaintiff had paid a total of Rs.25,60,000. The balance consideration of Rs.32,40,000 was to be paid within three months, and the defendants were to get two tenants vacated. The plaintiff subsequently made further payments: Rs.1,50,000 by cheque on 11.04.2011, cash payments of Rs.10,000, Rs.70,000, Rs.50,000, and finally Rs.3,70,000 on 30.06.2011 to help vacate the tenants. These payments were endorsed on the agreement. The defendants sent a legal notice on 04.10.2011 claiming the plaintiff had failed to pay the balance within the three months and offered to return the amount with a 10% deduction. The plaintiff replied, asserted readiness and willingness, and went to the Sub-Registrar's office on 17.10.2011 with the balance amount, but the defendants did not appear. The plaintiff then filed the suit for specific performance and permanent injunction. The Trial Court held that time was not the essence of the contract because the defendants accepted payment even after the three‑month period (on 30.06.2011) and the plaintiff had proved his continuous readiness and willingness. The suit was decreed with directions for execution of the sale deed and delivery of possession. In appeal, the defendants contended that time was of essence and the plaintiff had paid only Rs.6,50,000 by 30.06.2011, not the full balance of Rs.25,90,000 by the due date of 18.06.2011, and thus was not ready and willing. The High Court framed two questions: whether time was the essence of the contract and whether the plaintiff had proved continuous readiness and willingness. The judgment text was truncated before the court's analysis and decision could be recorded.
Issue of Consideration
Whether the time was the essence of the contract in the Agreement of Sale dated 18.03.2011; Whether the plaintiff has been able to prove his readiness and willingness throughout to perform his part of the contract
Law Points
- Time is not of essence of contract if parties by conduct indicate otherwise
- readiness and willingness under section 16(c) of Specific Relief Act
- acceptance of payment after due date may waive time stipulation
- plaintiff must continuously show readiness to perform
- specific performance decreeable if plaintiff performed or was ready to perform essential terms
