IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S.Jawalkar, J.
Gangadhar – Appellant
Versus
Bhagwan – Respondent
Second Appeal No. 507 of 2013
Decided On : 10-10-2022
Specific Performance - Contract for Sale of Immovable Property - Coal Bearing Areas (Acquisition and Development) Act, 1957 - Sec. 4(1), Sec. 7(1), Sec. 9(1) - Whether time was the essence of contract? Whether plaintiff was ready and willing to perform his part of contract? Whether respondent is entitled for amount of compensation in lieu of specific performance of contract? - Sec. 16(c) of the Specific Relief Act - Time is never regarded as the essence of contract in the case of sale of immovable property unless specifically stipulated - Plaintiff failed to establish continuous readiness and willingness to perform his part of contract - Decree for specific performance found incapable of being executed due to acquisition of subject land - Decree substituted by a decree for realization of compensation payable in lieu thereof as determined under the relevant Act - Judgment and decree of the Trial Court confirmed
Fact of the Case:
The plaintiff entered into an agreement of sale with the defendants for a field. The plaintiff claimed specific performance of the contract and possession of the property. The defendants contended that the agreement was for a loan and not for sale. The Trial Court decreed the suit with costs and directed the refund of the earnest money with interest. The plaintiff challenged the dismissal of the suit for specific performance in the first appeal, which was allowed. The defendants appealed against the grant of specific performance. During the pendency of the appeal, the suit property was acquired by the Central Government under the Coal Bearing Areas (Acquisition and Development) Act, 1957. The Court framed substantial questions of law regarding the essence of the contract, readiness and willingness of the plaintiff, and entitlement to compensation in lieu of specific performance.
Finding of the Court:
The Court found that the plaintiff failed to establish continuous readiness and willingness to perform his part of the contract. The Court also held that time was not the essence of the contract as there was no specific stipulation to that effect. The Court further determined that the decree for specific performance was incapable of being executed due to the acquisition of the subject land. As a result, the decree was substituted by a decree for realization of compensation payable in lieu thereof as determined under the relevant Act. The judgment and decree of the Trial Court were confirmed.
Issues: The issues involved in the case were whether time was the essence of the contract, whether the plaintiff was continuously ready and willing to perform his part of the contract, and whether the plaintiff was entitled to compensation in lieu of specific performance of the contract.
Ratio Decidendi: The Court held that time is never regarded as the essence of a contract in the case of sale of immovable property unless specifically stipulated. The plaintiff failed to establish continuous readiness and willingness to perform his part of the contract, as required by Sec. 16(c) of the Specific Relief Act. The Court also determined that the decree for specific performance was incapable of being executed due to the acquisition of the subject land, leading to the substitution of the decree by a decree for realization of compensation.
Final Decision: The appeal was allowed, and the judgment and decree of the District Judge-4, Nagpur in the first appeal were quashed and set aside. The judgment and decree of the Joint Civil Judge, Junior Division, Ramtek in the original suit were confirmed. The decree was drawn accordingly, and the direction to withdraw the amount of acquisition was not issued as the appellant agreed not to withdraw the amount for four weeks.
JUDGMENT
1. Heard learned Counsel for the appellants and learned Counsel for the respondent.
2. Present appeal is filed by the appellants challenging the judgment and decree dtd. 26/02/2009 passed by the District Judge-4, Nagpur in Regular Civil Appeal No.329/1999 by that allowed the said appeal preferred by the plaintiff/respondent. The respondent challenged the judgment and decree dtd. 07/04/1999 passed by the learned Joint Civil Judge, Junior Division, Ramtek in Regular Civil Suit No.99/1989. This Court vide order dtd. 28/09/2016 framed following substantial question of law. "Whether by virtue of acquisition of the suit property by the Central Government under the provisions of the Coal Bearing Areas (Acquisition and Development) Act, 1957, the decree passed for specific performance of contract becomes unexecutable?"
3. After hearing both the parties and at their request, additional substantial questions of law framed by me as follows:
i) Whether time was the essence of contract?
ii) Whether plaintiff was ready and willing to perform his part of contract?
iii) Whether respondent is entitled for amount of compensation in lieu of specific performance of contract?
4. The brief facts as per plaint can be summarized as under: For the sake of convenience, parties are referred as per their original status. The suit property is a field bearing survey No.33 admeasuring 2.83 hecteres of village Singori, Tah. Parsheoni, District Nagpur. It belongs to defendants. On 21/03/1986, the defendants entered into an agreement of sale, the suit property to the plaintiff for consideration of Rs.17,000.00. The plaintiff paid Rs.6,500.00 to the defendants towards earnest money. Accordingly, the defendants executed written agreement on 21/03/1986. The defendants agreed to execute the sale-deed of the suit property upon receiving the balance of consideration of Rs.10,500.00 before the Sub Registrar. He also agreed to sale the suit field free from all the encumbrances. It was contention of the plaintiff that though plaintiff was ready and willing to perform his part of contract but defendants avoided to execute the sale-deed. Ultimately, on 25/02/1989, the plaintiff issued notice to the defendants to execute the sale-deed. As defendants failed to execute the sale-deed, plaintiff filed suit for specific performance of contract and for the possession of the suit property. In alternative, the plaintiff claimed refund of earnest money with interest at the rate of 18% per annum.
5. Defendants filed their written statements. It is contention of the defendants that the plaintiff used to advance loan and they were needed Rs.3,000.00 for which plaintiff insisted for execution of agreement of sale by way of security. Therefore, the defendant nos.1 to 4 executed an agreement of sale of the suit field. The said agreement was not to be acted upon. It is further contention that defendants have repaid amount of Rs.1000.00 with interest only amount of Rs.2000.00 was left to be paid.
6. The learned Joint Civil Judge, Junior Division after considering the evidence on record and after hearing the parties, decreed the suit with costs and directed the refund of amount of Rs.6,500.00 along with 8% interest per annum. Claim of specific performance came to be dismissed.
7. Being aggrieved by the judgment dismissing the suit for specific performance, plaintiff challenged the same by filing in Regular Civil Appeal No.329/1999. The said appeal came to be allowed and relief of specific performance was granted. The plaintiff was directed to pay Rs.10,500.00 within one month. From the date of deposit of the amount by plaintiff, in case, failure of defendant to execute and register the sale-deed, plaintiff was granted liberty to get it executed and registered by the appointment of Commissioner. This order is under challenge in this second appeal.
8. The learned Counsel for appellants submits that the learned Appellate Court has not framed any issues of readiness and willingness or
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Time is of the essence of a contract if the parties have agreed that it is or if the circumstances of the case show that it is.
To secure a decree for specific performance, plaintiffs must demonstrate continuous readiness and willingness, supported by credible evidence, amidst a contract that specifies actionable terms.
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