SUPREME COURT OF INDIA
A.N. RAY, C.J.I., M.H. BEG AND P.S. KAILASAM, JJ.
Govind Prasad Chaturvedi, Appellant
Versus
Hari Dutt Shastri and another, Respondents.
Civil Appeal No. 696 of 1971,
D/- 28-1-1977.
Advocates appeared
Mr. A. K. Sen Sr. Advocate and Mr. S. T. Desai, Sr. Advocate, (Mr. P. P. Juneja, Advocate with them), for Appellant; Mr. S. V. Gupte Sr. Advocate, (Mr. M. V. Goswami, Advocate with him), for Respondents.
U. P. Rent and Eviction Act - Section 3 - Specific performance of a contract of sale - While accepting the evidence- Trial Court - Trial Court found that it was proved beyond a shadow of any doubt that appellant was always ready and willing to perform his part of contract and the respondents were not at all anxious to execute sale deed in his and that respondents were guilty of breach of contract - On issue found that even though the time for getting sale deed executed expired appellant would not be disentitled to the relief of specific performance of the contract for sale on the ground of delay as the respondents themselves were responsible for it - Respondents preferred an appeal to Allahabad High Court and a Bench of the Court on the arguments set out two point for determination in the appeal - They are whether the appellants or the respondents committed the breach of contract entered into between parties whether the time was of the essence of the contract - If not its effect – Held, This conclusion which we consider is irresistible was not accepted by High Court - High Court while accepting evidence that appellant had a in deposit in bank and subsequently he deposited a sum and again a sum and that thus the appellant had found case of appellant unworthy of credit - High Court further observed that after the appellant had raised his deposit in the bank he did not deposit any further amount and therefore amount fell short of the needed amount - Conscious of weakness in his story, the appellant asserted in his statement that he had with him at his house – Court are at a loss to follow the reasoning of High Court - Appellant stated that he deposited the money which was with him in the house in bank on advice for the purpose of proving that he had money with him - Court does not suspect that he did not have Rs. shortage at the most is and it cannot be said that evidence of appellant that he had necessary money for expenses of registration is unacceptable. Further the appellant examined who stated that a sum belonging to the appellant was lying in deposit with them – Court are unable to accept the conclusion of the High Court that the appellant did not have enough funds for getting sale deed executed - High Court while not disbelieving the fact that various letters and telegrams were sent by appellant has remarked that appellant did not take the course of personally going to the respondents and asking for execution of the sale deed - In our view parties were suspecting each other and nothing would have been achieved by the appellant by going in person and requesting the respondents to execute sale deed - In fact respondents set up a story that the appellant approached the respondents and stated that he was not able to perform his part of contract within the stipulated time - This evidence cannot be accepted taking into account the relationship between parties – Court have carefully considered the evidence and the correspondence between the parties and we have no hesitation in accepting the conclusion reached by the trial Judge that the appellant was always ready and willing to perform his part of contract and that respondents were evading their responsibility - Appeal allowed
The court's decision in the provided case emphasizes that the party seeking specific performance was always ready and willing to perform their obligations under the contract. The court found that the appellant had demonstrated sufficient funds and was eager to complete the sale, and that the respondents were evading their responsibilities. The court's conclusion was that the respondents failed to establish that the time was of the essence of the contract and that the appellant had substantially performed his obligations.
This aligns with the principle that when a party has already performed substantial obligations under an agreement, equity tends to favor enforcing the contract rather than allowing it to be frustrated. The court's decision underscores that equitable relief is justified when the party seeking enforcement has demonstrated readiness and willingness to perform, and the other party's breach or evasion prevents the contract's full execution.
Thus, the court did hold that where a party has already performed substantial obligations, equity leans in favor of enforcing the contract rather than frustrating it.
Judgment
P. S. KAILASAM, J. :- This appeal is filed by the plaintiff against the judgment of the Allahabad High Court on a certificate dismissing the suit for specific performance of a contract of sale dated 24th March, 1964.
2. The facts of the case are briefly as follows :-
The suit property was owned by one Shri Aditya Narain and the plaintiff/appellant became a tenant of the suit property under Aditya Narain in the year 1942. On 2nd January, 1961 the respondents, the two defendants in the suit purchased the suit property for Rs. 19,000 from Aditya Narain and the appellant became tenant of the respondents. Soon after the purchase of the property by the respondents they sought to evict the appellant by filing a petition under Section 3 of the U. P. Rent and Eviction Act. The appellant resisted and the Rent Control and Eviction Officer rejected the petition holding that the respondents requirement of the premises was not genuine. On the mediation of Sri Chand Doneria, the parties entered into the suit agreement on 24th March, 1964. In pursuance of the agreement the appellant handed over Rs. 4,000 as earnest money to the respondents. The terms of the agreement will be set out in due course but suffice it at this stage to state that it provided that the appellant should get the sale deed executed within two months i.e. upon 24th May, 1964 and in case the appellant did not get the sale registered within two months the earnest money of Rs. 4,000 shall stand forfeited. From the 5th May, 1964 letters and telegrams were exchanged between the parties but the sale deed was not executed on or before the 24th or on the 25th May as the parties had agreed. The appellant filed a suit, Civil Suit No. 122 of 1964, in the court of Civil Judge, Agra, on 2nd September, 1964 alleging that the appellant has always been ready and willing to perform his part of the contract and he did all that he was bound to do under the agreement but the respondents failed to execute the sale deed as agreed and therefore committed breach of the contract. The plaintiff prayed for a decree of specific performance of the contract of sale dated 24th March, 1964 against the respondents and for direction to the respondents to execute the sale deed of the property and get it registered and in default the sale deed may be executed by the court according to law. The respondents filed a written statement denying the various allegations made in the plaint and pleaded that the appellant did not perform his part of the contract within the stipulated time and the contract thereafter did not subsist and therefore the suit was misconceived. On these pleadings the trial court framed five issues of which it is relevant to note only two which are issues 1 and 3. They are as under :-
Issue No. 1. "Whether the plaintiff was always ready and willing to perform his part of the contract as alleged in the plaint?"
Issue No. 3. "Whether the contract did not subsist on the date the suit was filed?"
The trial Court found that it was proved beyond a shadow of any doubt that the appellant was always ready and willing to perform his part of the contract and the respondents were not at all anxious to execute the sale deed in his favour and that the respondents were guilty of breach of contract. On issue No. 3 it found that even though the time for getting the sale deed executed expired after 24th May, 1964 the appellant would not be disentitled to the relief of specific performance of the contract for sale on the ground of delay as the respondents themselves were responsible for it. The respondents preferred an appeal to the Allahabad High Court and a Bench of the Court on the arguments set out two point for determination in the appeal. They are (1) whether the appellants or the respondents committed the breach of contract entered into between the parties on 24th March, 1964 and (2) whether the time was of the essence of the contract. If not, its effect. The High Court found that the respondents were
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