Time of essence in a sale agreement, readiness and willingness of the plaintiff, and the value of the property at the time of the agreement are crucial factors in determining specific performance.

JUDGMENT :

R. F. NARIMAN, J.

1. In the present appeal, despite service of notice, nobody appears for the respondent. We have heard Dr. (Ms.) Pooja Jha, learned counsel appearing for the appellant.

2. The High Court, in the present appeal, has, by the impugned judgment dated 03.02.2017, set aside the concurrent judgments of the Courts below, and allowed the appeal of the erstwhile defendant, who is the respondent before us, and hence, set aside the decree for specific performance that was passed in the plaintiff’s favour.

3. By an agreement to sell dated 22.09.2002, the suit property was to be sold for a sum of Rs.3,65,000/-. Certain clauses of the agreement are important and are set out here-in-below:

“1. The sale price of the property mentioned in the schedule hereunder shall be Rs.3,65,000/-(Rupees Three Lakhs and Sixty Five Thousand only).

2. The party of the second part has paid a sum of Rs.5,000/-(Rupees Five Thousand only) towards advance by cash and the party of the first part hereby admit and acknowledge the receipt of the same.

3. The balance sale consideration shall be paid by the party of the second part to the party of the first part within three months from today. The party of the first part agrees to execute sale deed on the day on which the balance sale consideration is paid.

4. The party of the second part agrees to pay part of the sale consideration of Rs.60,000/-(Rupees Sixty Thousand only) to the party of the first on or before 10th day of October.

5. The party of the first part had handed over the original title documents to the mortgagee and the party of the second part shall settle the loan, receive the documents from the mortgagee and keep the same in his custody.

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8. If there is no encumbrance to the schedule property and when the party of the second part is willing to pay the balance sale consideration, the party of the first shall execute sale deed in favour of the party of the second part or her nominee. If the party of the first part refuses to do so, the party of the second part is entitled to take legal action.”

4. It is stated that at the time of the sale agreement, the suit property was worth roughly a sum of Rs.6 lakhs, but the parties finally agreed and the defendant, in particular, agreed to sell the aforesaid property for Rs.3.65 lakhs. A perusal of the agreement to sell would show that though clause 3 requires that the balance sale consideration will be paid within three months from the date of the agreement and that the seller will execute the sale deed on the date on which balance sale consideration was paid yet, clauses 5 and 8 clearly show that the original title deeds which are with the mortgagee had yet to be handed over and the mortgage had yet to be redeemed. It is only when this is done that clause 3 would kick in, showing that the time of three months is obviously not of essence.

5. Soon after the agreement, the plaintiff sent a registered letter dated 18.12.2002 to the present address of the defendant reminding the defendant that Rs.5000/- had been received on the date of signing the agreement and Rs.60,000/- had been received on 14.10.2002. Despite this, the original title documents were not obtained from the mortgagee and hence the mortgage could not be discharged. The letter then goes on to state that repeated calls were made and that the plaintiff is ready with the balance money, and that the defendant should come forward immediately to discharge the mortgage, get all documents from the mortgagee, and register the sale deed. This registered A.D. letter was returned to the sender stating that the addressee did not receive the same for the past one week. The same was the fate of another legal notice on the very next date, i.e., 19.12.2002. Finally, on 07.07.2003, the plaintiff sent a legal notice referring to the earlier legal notice of 19.12.2002 and called upon the defendant to immediately comply with the terms of the agreeme