1959 Supreme(AP) 10
Andhra Pradesh High Court
Judges : MUNI KANNIAH, P.SATYANARAYANA RAJU
Tadepalli Kutumba Rama Sastry - Appellant
Versus
Seetepalli Dakshina Murthy - Respondent
Decided On : 01-20-59
Time can be made of the essence of a contract by express agreement or by implication from the circumstances of the case.
Headnote:
CONTRACT - SALE OF LAND - TIME OF THE ESSENCE OF THE CONTRACT - NOTICE TO PERFORM WITHIN A REASONABLE TIME - REPUDIATION OF CONTRACT - RIGHT TO POSSESSION - FORFEITURE OF EARNEST MONEY.
Fact of the Case:
The plaintiff and the defendant entered into a contract for the sale of land. The defendant paid a deposit of Rs. 1,000 and agreed to pay the balance of the purchase price by a certain date. The defendant failed to pay the balance of the purchase price on time and the plaintiff served him with a notice to perform the contract within a week. The defendant failed to comply with the notice and the plaintiff filed a suit for possession of the land and for future profits.
Finding of the Court:
The court held that time was of the essence of the contract and that the defendant had repudiated the contract by failing to comply with the notice to perform. The court also held that the plaintiff was entitled to possession of the land on payment of the balance of the purchase price, but that he was not entitled to future profits.
Issues: 1. Whether time was of the essence of the contract. 2. Whether the defendant had repudiated the contract. 3. Whether the plaintiff was entitled to possession of the land. 4. Whether the plaintiff was entitled to future profits.
Ratio Decidendi: 1. Time can be made of the essence of a contract by express agreement or by implication from the circumstances of the case. In this case, the court found that time was of the essence of the contract because the defendant had failed to pay the balance of the purchase price on time and had failed to comply with the notice to perform the contract within a week. 2. A party to a contract repudiates the contract when he refuses to perform his obligations under the contract. In this case, the court found that the defendant had repudiated the contract by failing to pay the balance of the purchase price on time and by failing to comply with the notice to perform the contract within a week. 3. A party who is entitled to possession of land can recover possession by filing a suit for possession. In this case, the court held that the plaintiff was entitled to possession of the land on payment of the balance of the purchase price. 4. A party who is entitled to future profits can recover future profits by filing a suit for damages. In this case, the court held that the plaintiff was not entitled to future profits.
Final Decision: The appeal was allowed and the suit was decreed as aforesaid with costs throughout.
( 1 ) THIS appeal is against the judgment and decree of the Court of the Principal Subordinate Judge, Vijayawada, dismissing the suit of the plaintiff for possession of the suit properties and also for future profits. 2. The plaintiff is the brother-in-law of the defendant who is his sisters husband. The defendant resided at Nagavarappadu Agrahararn in Gannavaram Taluk of Krishna District where the plaintiff had the suit lands. The defendant has 10 acres of wet land to the north of the suit lands and as the defendant had no facility and convenience for flow of water except through, the suit lands, he requested the plaintiff to sell the same to him. On 16-5-1947, a contract (Exhibit A-1) was entered into between the plaintiff and the defendant whereby the suit lands wore agreed to be sold by the former to the latter for Rs. 9,263-4-0 and the plaintiff received a sum of Rs. 1,000. 00 as advance at the time when Exhibit A-1 was executed. As per the terms of the contract, the entire amount of consideration had to be paid before 30-6-1947 and the defendant should obtain the deed of sale on the understanding that both the parties should bear the stamp expenses equally. The defendant made further payments of Rs. 4,000. 00on 27-4-1950 and on 21-6-1950 a sum of Rs. 1,000. 00. Within one week of the agreement to sell, the defendant took possession of the lands and has been enjoying the same from that time. The plaintiff has since then been demanding payment of the balance of consideration and also urging upon the defendant to take the sale deed. On 24-6-1950 the defendant gave a hand letter (Exhibit A-2) to the plaintiff wherein it has been stated that on taking an account, the sum due under the sale agreement as on that day was Rs. 5,424-3-0 and the defendant should pay this amount with interest accruing thereon at Re. 0-12-0 per cent per mensem whenever demanded by the plaintiff "without reference to the limitation of the sale contract and obtain a sale deed" from the plaintiff "with proper terms as per the terms of the contract" which mentioned that the sale deed shall be executed with the proper terms (Kramamyna Sharathulu ). Thereafter the defendant has been writing several letters to the plaintiff expressing difficulties in making good the amount, hut defaulted to pay the balance of consideration and take the sale deed. The plaintiff thereupon caused a registered notice (Exhibit B-5) dated 26-5-1952 to he issued by his advocate to the defendant. After complaining about the vexatious delay, the plaintiff made it clear through that notice that the defendant should he given as a last chance a weeks time for payment of the balance of Consideration and for petting the sale deed and made the defendant aware that in default a suit will be filed for recovery of possession of the land and of profits. The defendant in his reply thereto averred that the suit lands were the paternal property of the plaintiff and as the plaintiff has minor sons and has also alleged that the plaintiff, prior to the contract of sale, referred about the necessity of selling the said lands, he believed the misrepresentations made by the plaintiff in regard to the supposed debts and that subsequently the plaintiff agreed that he would if necessary get a third party to be his surety or personally furnish some other immoveahle property sufficient to the contract as security. The plaintiff caused Exhibit B-6 dated 9-6-1952 to be issued denying these allegations as false. The plaintiff in this commnnication stated definitely that as the defendant did not avail the further time granted to him, he was cancelling the contract. But the defendant insisted in Exhibit A-26 on the plaintiff furnishing proper security before receiving the sale consideration. The suit had thereupon been filed for the aforesaid reliefs. 3. The defendant inter alia contended that he offered the plaintiff the balance of the unpaid purchase money due under the contract and requerted the plaintiff to
Click Here to Read the rest of this document
Back
