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Andhra Pradesh High Court
Judges : A.GOPAL RAO
Tandra Venkata Subrahmanayam - Appellant
Versus
Vegesana Viswanadharaju - Respondent
Decided On : 07-06-67
SPECIFIC PERFORMANCE - AGREEMENT OF SALE - TIME ESSENCE OF CONTRACT - NOTICE - CONSTRUCTION - DISCRETION OF COURT - EXERCISE OF - PRINCIPLES.
Fact of the Case:
Plaintiff filed a suit for specific performance of an agreement of sale dated 22-4-1959 executed by the 1st defendant in his favour and for recovery of damages of Rs. 200. He claimed in the alternative a sum of Rs. 2700 as compensation. It was alleged that the 1st defendant, who is the owner of the suit land, agreed to sell the same for a sum of Rs. 2450 to the plaintiff and executed Exhibit A-1 after receiving an advance of Rs. 750. According to the terms of the agreement the balance had to be paid on or before 31-5-1959 and the sale deed was to be executed. It is alleged that the plaintiff was always ready and willing to perform his part of the contract, but the 2nd defendant sent a notice to the plaintiff on 22-5-1959 (Exhibit A-2) asserting that the 1st defendant sold the suit land to him under an oral agreement and warned the plaintiff that if he obtained any sale deed in his favour from the 1st defendant it would not be binding upon him.
Finding of the Court:
The court held that Exhibit A-5 neither makes time the essence of the contract nor does it conditionally or otherwise put an end to the contact. The assertion that he will sell the property to others need not necessarily in all cases mean that he wanted to put an end to the contract. If the contract is kept alive and he sells the property to others, he does it at his risk and at the risk of the purchaser who was put on notice. It is not possible therefore to hold because of the threat given in the notice that the property will be sold to others that the 1st defendant had put an end to the contract which he had entered into with the plaintiff. The lower Courts therefore, in my view, were right in holding that Exhibit A-5 cannot be said to have made time the essence of the contract or that the contract Exhibit A-1 was determined by the 1st defendant.
Issues: 1. Whether Exhibit A-5 makes time the essence of contract and treats the contract as determined in case the plaintiff did not perform his part of the contract within the stipulated time? 2. Whether the plaintiff was ready and willing to perform his part of the contract? 3. Whether the appellate Court should have interfered in the exercise of the discretion by the trial Court in refusing a decree for specific performance?
Ratio Decidendi: 1. Time can be made the essence of the contract by subsequent notice given by anyone of the parties to the contract, even though Section 55 of the Indian Contract Act does not provide for such a notice. It is necessary that if the notice wants time to be made essence of the contract it must expressly or by necessary implication say so. 2. The mere fact that the notice gave a certain time to perform the contract would not necessarily lead to the conclusion that the time prescribed was the essence of the contract. 3. In all such cases, the Court has to look to the pith and substance of the notice and not at the letter of the notice and decide as to whether time was or was not essential to the subsistence of the contract. 4. The real intention of the party who gives notice must be clear from the notice itself. 5. It may in certain cases be necessary to rely upon surrounding circumstances. 6. Nevertheless one has to largely look to the notice itself. 7. Exhibit A-5 does not make time as essence of the contract. 8. The threat given in the notice cannot necessarily mean that the 1st defendant intended to expressly make time the essence of contract, nor can it be so inferred by necessary implication. 9. Exhibit A-1, the original agreement, does not make time the essence of the contract. 10. Exhibit A-5 neither makes time the essence of contract nor does it conditionally or otherwise put an end to the contact.
Final Decision: The second appeal fails and is dismissed with costs.
( 1 ) THIS appeal is from the judgment and decree of the Subordinate Judge, Eluru given on 23/03/1983. It arises in the following circumstances. The plaintiff, 1st respondent filed the suit for specific performance of an agreement of sale dated 22-4-1959 (Exhibit A-1) executed by the 1st defendant in his favour and for recovery of damages of Rs. 200. He claimed in the alternative a sum of Rs. 2700 as compensation. It was alleged that the 1st defendant, who is the owner of the suit land, agreed to sell the same for a sum of Rs. 2450 to the plaintiff and executed Exhibit A-1 after receiving an advance of Rs. 750. According to the terms of the agreement the balance had to be paid on or before 31-5-1959 and the sale deed was to be executed. It is alleged that the plaintiff was always ready and willing to perform his part of the contract, but the 2nd defendant sent a notice to the plaintiff on 22-5-1959 (Exhibit A-2) asserting that the 1st defendant sold the suit land to him under an oral agreement and warned the plaintiff that if he obtained any sale deed in his favour from the 1st defendant it would not be binding upon him. On enquiries, however, the plaintiff came to know that the alleged oral agreement was not true and genuine. The plaintiff accordingly sent a reply to the 2nd defendant. The 1st defendant told the plaintiff that there was no cause to worry since he had not entered into any oral agreement with the 2nd defendant. It was further alleged by the plaintiff that on 26-6-1959 he paid a further sum of Rs. 400 towards part payment of the sale price and the 1st defendant told him that he has got stamps worth Rs. 40 and the plaintiff should purchase stamp for Rs. 160. The plaintiff accordingly purchased stamps and went to the 1st defendant alone with one K. Satyanarayanamurthy and offered to pay the balance and demanded the execution of the sale deed, but the 1st defendant in collusion with the 2nd defendant evaded to execute the same The plaintiff therefore had to issue a notice on 11-9-1959 (Exhibit B-4) to the 1st defendant demanding the execution of appropriate sale deed. The 1st defendant however sent a reply on 28-12-1959 (Exhibit A-5) with false allegations that he had not received Rs. 750 by way of advance but only Rs. 50 and asked the plaintiff to pay the balance within 15 days and get the sale deed executed. Otherwise, he will sell the suit property to others. Without executing the sale deed in favour of the plaintiff, the 1st defendant executed sale deed in favour of the 2nd defendant (Exhibit B-8) on 81-10-1960. The suit therefore was instituted by the plaintiff for specific performance on 23-7-1961.
( 2 ) THE contention of the 1st defendant was that he received only Rs. 50 as advance and not Rs. 750 as was alleged by the plaintiff. He denied the oral agreement dated 20-3-1959 set up by the 2nd defendant and the payment of Rs. 500 in pursuance of such an oral agreement of sale. He contended that since the plaintiff did not perform his part of the contract within the time fixed by him in the notice dated 28-12-1959 (Exhibit A-5), he sold the land to the 2nd defendant under Exhibit B-8. He finally contended that the plaintiff is not entitled to file the suit for specific performance or in the alternative claim relief for compensation or damages.
( 3 ) THE 2nd defendant contended that the plaintiff was aware of his contract of sale dated 20-3-1959 settled through D. W. 2 K. Ramakrishnaraju, a close relation of the 1st defendant and when he gave a notice on 22-5-1959 (Exhibit A-2), the plaintiff did not give any reply till 2/09/1959.
( 4 ) UPON these pleadings, the trial Court framed appropriate issues and on appreciation of the evidence adduced by the parties held that the oral agreement of sale set up by the 2nd defendant is not true and that the plaintiff was not aware of the same. It was further found that the 2nd defendant is not a bona fide purchaser for value without notice and that he had no
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