IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.10.2010 CORAM: THE HONOURABLE MRS.JUSTICE ARUNA JAGADEESAN SA.No.785/2001 Munira Fathima Appellant/Defendant Vs 1.G.Velusamy (Deceased) 2.V.Andal 3.Padmavathy 4.Kanagavalli Respondents/Plaintiff (Rr2 to 4 brought on records as LRs of the deceased sole Respondent vide order dated 23.3.2010 made in CMP.1196/03) Prayer:- This Second Appeal is filed against the Judgement and Decree dated 5.1.2000 passed in AS.No.286/1997 by the learned VI Additional Judge, City Civil Court, Madras, confirming the Judgement and Decree dated 29.8.1997 passed in OS.No.6173/1993 by the learned VII Assistant Judge, City Civil Court, Madras. For Appellant : Mr.S.Sadasharam For Respondents : Mr.N.Jayabalan-RR2to4 JUDGEMENT Being aggrieved by the suit for specific performance being decreed by the courts below, the unsuccessful defendant has filed this second appeal against the judgement and decree dated 5.1.2000 passed in AS.No.286/1997 by the learned VI Additional Judge, City Civil Court, Madras, confirming the Judgement and Decree dated 29.8.1997 passed in OS.No.6173/1993 by the learned VII Assistant Judge, City Civil Court, Madras. 2. The facts, giving rise to this second appeal, briefly, are as follows:- a. By an agreement dated 31.3.1993 Ex.A1 entered into between the appellant as vendor and the 1st respondent herein (since deceased) as purchaser, the appellant agreed to sell a vacant site bearing Plot No.26 in S.No.15, Kolathur, Madras-99 measuring about 2400 sq.ft for a total sale price of Rs.77,000/- and in pursuant to the said agreement, the respondent paid a sum of Rs.30,000/- on the same date and further agreed to get the sale deed executed within three months from 31.3.1993. Under a specific https://hcservices.ecourts.gov.in/hcservices/ clause in the agreement, it was agreed that the balance of consideration should be paid within three months from the date of the agreement and on such payment being made, the appellant should execute the sale deed and register the same in favour of the 1st respondent. b. The appellant through her husband had received a further sum of Rs.10,000/- on 10.4.1993 and the same was endorsed by the defendant's husband in Ex.A1 sale agreement itself. According to the 1st respondent, he was having the remaining amount in cash in hand and was always ready and willing to complete the sale. Apart from oral requests made by the 1st respondent, he also issued a lawyer's notice dated 10.7.1993 in Ex.A3, calling upon the appellant to accept the balance of sale consideration and to execute and register the sale deed on or before 16.7.1993 i.e. before the beginning of the Tamil Month Aadi. The said lawyer's notice was sent through Certificate of Posting as well as by Registered Post. The notice sent by Registered Post was returned with an endorsement as refused in Ex.A4 cover. The appellant having received the notice sent by Certificate of Posting sent a reply dated 13.7.1993 in Ex.A6 declining to complete the sale transaction on the ground that three months time stipulated under the sale agreement had elapsed and therefore, the agreement stood terminated. The 1st respondent/purchaser was always ready and willing to complete the sale transaction and therefore, he is entitled to the relief of specific performance of the said agreement. Pending the suit, after getting permission from the trial court, the balance of sale consideration was deposited by the 1st respondent in the court on 18.2.1994. c. The appellant in the written statement stated that under the agreement Ex.A1, the 1st respondent agreed specifically to get the transaction completed within three months from 31.3.1993 and the time was agreed specifically to be the essence of the contract. Further, it is stated that though three months time was stipulated in the agreement, the 1st respondent assured to complete the sale within 10 days from the date of the agreement. But, the 1st respondent was not prepared to get the sale deed executed, but only paid a sum of Rs.10,000/- on 10.4.1993 and assured that he would pay the balance of sale consideration and get the sale deed executed on or before 31.6.1993 as stipulated in the agreement of sale. Before the expiry of the time specified, the appellant called upon the 1st respondent to pay the balance consideration, but the 1st respondent neglected to pay the same and requested the appellant to give him a power of attorney in respect of the suit property so as to enable him to sell the same to third parties. But, the appellant refused to give any such power of attorney. By efflux of time stipulated in the agreement, the agreement stood cancelled. The 1st respondent had issued a lawyer's notice on 10.7.1993 after the expiry of the contract period and further after coming to know of the issuance of legal notice sent by the appellant dated 9.7.1993 in Ex.A7, the 1st respondent has sent Ex.A3 notice. Further, the appellant also sent a reply dated 13.7.1993 Ex.A6 indicating that on the expiry of three months period, https://hcservices.ecourts.gov.in/hcservices/ agreement stood cancelled. The agreement of sale is not in force and the 1st respondent is not entitled to claim specific performance of the contract. d. Before the Trial Court, on the side of the Plaintiff, Ex.A1 to A9 were marked and the Plaintiff examined himself as PW.1. On behalf of the Defendant, Ex.B1 was marked and one Tajuddin was examined as DW.1. e. On consideration of the oral as well as the documentary evidence, the Trial Court found that time was not the essence of the contract and the 1st respondent was willing and ready to perform his part of the contract and granted a decree for specific performance. Aggrieved over the same, the appellant preferred an appeal before the first appellate court, which dismissed the appeal, confirming the judgement and decree of the trial court. Aggrieved over the same, this Second Appeal has been filed by the defendant. 3. This Second Appeal has been entertained on the following substantial question of law:- “When time was fixed for the performance of the contract by both the parties under mutual agreement, can the Courts below ignore the same finding that it was not stated so namely that the time is the essence of the contract? 4. This court heard the submissions of the learned counsel on either side and also perused the judgements of the court below and the materials on record. 5. Mr.S.Sadasharam, the learned counsel for the appellant vehemently contended that Ex.A1 agreement stipulated a specific date for the payment of the balance of sale consideration and for getting the sale executed, thus the parties to the agreement had agreed that time is the essence of the contract. When it is so, the courts below have ignored the same and erroneously found that the time is not the essence of the contract. It was urged that the suit having been filed after the expiry of time on which the sale deed was to be executed, the surrounding circumstances indicated that the 1st respondent did not have the money to pay the balance of sale consideration on the stipulated dated i.e. as on 31.6.1993 and therefore, the readiness and willingness has not been proved by the 1st respondent, which disentitled him to the relief of specific performance which is purely a discretionary relief. 6. The learned counsel for the appellant placed reliance on the judgement of the Division Bench of this court reported in 2009-4-CTC-639 [S.Krishnamurthy Vs. M.Venkateswara Rao @ M.V.Rao (died) and 6 others in support of his contention that when the purchaser was not ready and willing to perform his part of obligation, he was not entitled to the relief of specific performance. https://hcservices.ecourts.gov.in/hcservices/ 7. In the said decision, the purchaser had paid advance sale consideration and the vendor had obtained no objection certificate for the sale from the competent authority and the draft sale deed was also prepared and approved by the vendor, but the purchaser did not come forward to get the sale deed executed, but demanded original title deeds under the pretext of preparing the draft sale deed. The Division Bench held that the conduct of the purchaser indicated that he was adopting evasive tactics and wanted to gain time and accordingly refused to grant a decree for specific performance. On such facts, the Division Bench of this court observed that when the plaintiff was not ready and willing to perform his part of obligation, he is not entitled to the relief of specific performance. There is no quarrel over the preposition of law that the plaintiff is not entitled to the relief of specific performance, if he fails to prove his readiness and willingness to perform the requirements of the agreement. But, at the same time, in order to disentitle the plaintiff to the relief of specific performance, the acts in contravention of the contract must be gross and willful. 8. It is contended by the learned counsel for the appellant that the 1st respondent had committed breach of the terms of the agreement, Ex.A1, that is, the 1st respondent had violated the essential terms of Ex.A1 and had also not made out his readiness and willingness to perform the essential terms of Ex.A1 and therefore, disentitled to claim the equitable relief of specific performance. 9. On the other hand, Mr.N.Jayabalan, the learned counsel for the 1st respondent would contend that normally time would not be the essence of a contract in respect of an agreement relating to an immovable property and it would only be necessary that the plaintiff shall perform his part of the contract within a reasonable time and such a reasonable time will be determined by looking at the intention of the parties to the contract, surrounding circumstances including the express terms of the contract and the nature of the property. 10. The key issue which is to be decided in this second appeal is whether the time was the essence of contract as there is a stipulation for the payment of the balance of sale consideration on or before 31.6.1993 and whether the said term was breached by the 1st respondent. It has to be pointed out at this juncture that this question does not depend only upon express stipulation made by the parties, but it also depends upon the intention of the parties. Notwithstanding that a specific date is mentioned in the agreement, one has not only to look at the letter, but also at the substance of the contract. Whether time is the essence is a question of fact and the real test is the intention of the parties. It depends upon facts and circumstances of each case. 11. Referring to the original agreement where there was a specific date stipulating the time for payment of sale https://hcservices.ecourts.gov.in/hcservices/ consideration and getting the sale deed registered, the Honourable Supreme Court held in the case of Swarnam Ramachandran Vs. A Chakkungal Tajapalan [2004-8-SCC-689] that there was nothing in the express stipulation between the parties to show that the intention was to make the rights of the parties dependent upon the observance of the time limits. 12. The question whether the time is of the essence of the contract came up for consideration in Chand Rani Vs. Kamal Rani [AIR-1993-SC-1742] wherein it was held as below:- “It is a well accepted principle that in the case of sale of immovable property, time is never regarded as the essence of contract.” 13. Time is presumed not to be of essence of the contract relating to immovable property, but it is of essence in contract of reconveyance or renewal of lease. It is held by the Honourable Supreme Court in the decision reported in 2004-8-SCC-689 cited supra that the onus to plead and prove that time was the essence of the contract was on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence and further when the plaintiff pleads that time was not of essence and the defendant does not deny it by evidence, the court is bound to accept the plea of the plaintiff. 14. Applying the above principles to the facts of the present case, it is no doubt true that there is a stipulation that the sale transaction should be completed within three months from the date of the agreement. There is a clause to the effect that in the event the 1st respondent fails to get the sale deed executed and registered, he has to forfeit Rs.10,000/- from the advance paid by him. There is also a clause that if the appellant failed to execute the sale in spite of the 1st respondent coming forward to get the sale deed registered, then the 1st respondent is entitled to get the sale deed registered compulsorily. 15. But, Ex.A1 does not contain any clause that the balance of sale consideration should be paid within 10 days. Admittedly, the 1st respondent had paid Rs.10,000/- apart from the payment of advance of Rs.37,000/-. In Ex.A1 agreement, there is no specific clause that on failure to pay the balance of sale consideration within the stipulated time, the agreement would stand cancelled or terminated. It only imposes a stipulation that in case if the 1st respondent failed to get the sale deed registered, then he would forfeit Rs.10,000/- from the advance amount. Therefore, there is nothing in the express stipulation to show that the intention of the parties was to make the rights of the parties dependent upon the observance of the time limits. 16. The first notice had only emanated from the 1st respondent in Ex.A3 dated 10.7.1993, expressing his readiness and willingness to perform his part of the obligation and accordingly, calling upon the appellant to accept the balance of sale https://hcservices.ecourts.gov.in/hcservices/ consideration and execute the sale deed. It is no doubt true that he had specified a date as 16.7.1993 for execution and registration of the sale deed and he has given reason for specifying such date. He had stated that as the inauspicious month of Aadi would commence from 16.7.1993, he had requested the appellant to get the sale deed registered on or before 16.7.1993. Therefore, it cannot be said that the 1st respondent has fixed the date contrary to the terms of the contract. 17. Only after receiving the notice dated 10.7.1993, the appellant had sent a reply declining to execute the sale deed on the ground that the time stipulated in the agreement got expired. Though an attempt was made to show that even before the notice issued by the 1st respondent dated 10.7.1993, the appellant had issued a notice on 9.7.1993, but no material was placed either to show its despatch to the 1st respondent nor the proof of service of such notice on the 1st respondent. The courts below have rightly refused to place any reliance on the said notice said to have been issued by the appellant. 18. It is not the case of the appellant that she made any attempt to refund the advance amount after deducting Rs.10,000/- as per the terms of the agreement. Neither any notice had been sent to the 1st respondent terminating the agreement on the ground that the 1st respondent failed to pay the balance of sale consideration and get the sale deed executed. Further, the conduct of the 1st respondent was not a gross conduct so as to justify an inference that he was adopting any delaying tactics in performing his part of the obligation. The 1st respondent has filed the suit on 4.8.1993, that is, nearly within a month from the date of expiry of three months time stipulated in the agreement. Though in respect of the agreement relating to immovable property time would not be the essence of the contract, however, it would be necessary that the plaintiff shall perform his part of the contract within a reasonable time. In the present case, after the appellant declined to execute the sale deed which was made known to the 1st respondent from the reply notice dated 13.7.1993 sent by the appellant, the 1st respondent has filed the suit within a month from the date of such refusal and he has also deposited the balance of the sale consideration before the trial court. Therefore, the 1st respondent has proved that he has been ready and willing to perform his part of the contract. 19. At this juncture, it is relevant to refer to the decision of the Andhra Pradesh High Court reported in AIR-1957-AP- 307 [Nannapaneni Subayya Chowdary and another Vs. Garikapati Veeraya and another], wherein it has been held, after examining various authorities, that in the suit for specific performance, all that is necessary for the purchaser to show is that he was ready and willing to fulfil the terms of agreement; that he had not abandoned the contract; that he had kept the contract subsisting. Applying the above tests to the facts of the present case, I am of the considered view that the courts below were right in their conclusion that the 1st respondent was always ready and willing to https://hcservices.ecourts.gov.in/hcservices/ comply with his obligation under the contract. In the said circumstances, the courts below were right in decreeing the suit for specific performance. Accordingly, the substantial question of law is answered against the appellant. 20. For the aforesaid reasons, I do not find any merits in this second appeal and accordingly, this second appeal is dismissed, as devoid of merits. However, in the circumstances of the case, there will be no order as to costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar Srcm To: 1.The VI Additional Judge, City Civil Court, Madras 2.The VII Assistant Judge, City Civil Court, Madras 3.The Record Keeper, VR Section, High Court, Madras 1 cc To Mr.S.Sadasharam, Advocate, SR.75254 1 cc To Mr.N.Jayabalan , Advocate, SR.75439 SA.No.785/2001 nsm(co) pmk.4.12.2010 https://hcservices.ecourts.gov.in/hcservices/