JUDGMENT

MOHAN, CJI. —This appeal by special leave is preferred against the judgment of the High Court of Delhi at New Delhi passed in R.F.A. (O.S.) No. 15 of 1975 dated 26-10-79, reversing the decree for specific performance passed by the learned single Judge in O.S. No. 463 of 1971.

2. The short facts leading to this appeal are as under:

On 26-8-71, an agreement for sale was entered into between Kamal Rani and Chand Rani. This agreement was entered into through the husband of Chand Rani, Niranjan Nath. Under the terms of the agreement, Kamal Rani agreed to sell her house and property comprising of a free-hold plot bearing No. 30 Block K, Green Park, New Delhi (Village Kharera), measuring 311 sq. yards with a double-storeyed residential building constructed thereon along with fittings and fixtures for a sum of Rupees 1,78,000/- in favour of Chand Rani. On the date of execution a sum of Rs. 30,000/- was paid by way of earnest money. The agreement stipulated that a further sum of Rs. 98,000/- was payable within 10 days of the execution of the agreement. The balance of Rupees 50,000/- was to be paid at the time of registration of sale deed. It was agreed between the parties that Kamal Rani, the vendor would redeem the property by paying of a loan of Rs. 25,000/- out of a sum of Rs. 30,000/- paid at the time of execution. The property was mortgaged with the Life Insurance Corporation of India. The vendor was also to obtain the income tax clearance certificate. The sale deed was to be executed on or before 31-10-71.

3. At the time of this agreement the first floor of the house had been let out to tenants. It was stipulated in the agreement that the vendor would hand over documents pertaining to the property in the suit together with vacant possession of the first floor by 30-9-71 and possession of the front portion at the time of registration of the sale deed. It was further agreed that the amount of Rs. 30,000/- would stand forfeited in favour of the vendor should the vendee fail to pay the sale consideration and get the sale deed registered within the agreed time.

4. Based on this agreement Chand Rani and her husband filed O. S. No. 463 of 1971 for specific performance. It was alleged Chat though the defendant (Kamal Rani) was called upon to complete the sale through various letters and notices, they evoked no response. She failed to perform her part of the contract. Since the plaintiff had failed to pay the sum of Rs. 98,000/- within 10 days from the date of the agreement, namely, by 6-9-71, the agreement stood annulled and the sum of Rs. 30,000/- stood forfeited. To this effect the defendant addressed a letter on 15-9-71. In reply to the said letter the plaintiff wrote to the defendant calling upon her to execute the sale deed offering to pay the remaining consideration at the time of the execution of the sale deed. Since the defendant failed to comply with this demand the suit came to be filed claiming specific performance of the agreement or in the alternative, damages in the sum of Rupees 1,50,00/- including the refund of Rupees 30,000/-.

5. In defence, the execution of the suit agreement was admitted. Likewise, the receipt of the sum of Rs. 30,000/-. However, this stand was taken that the payment of Rs. 98,000/- within 10 days from the date of the execution of the agreement was the essence of the contract. Inasmuch as the said amount was not paid the defendant was entitled to treat the contract as having become null and void. No doubt, the defendant was to redeem the suit property and to deliver the documents by 30-9-71. However, this had to be done only on payment of Rs.98,000/- within 10 days of the execution of the agreement. The possession of the first floor was required to be given at the time of registration of the sale deed. In fact, the first floor had been got vacant from the tenants by 20-9-71. The front portion of the house was already in her possession and delivery thereof could easily be made at the relevant time.