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Madras High Court
NATESAN
S.P.Narayaaswami Pillai - Appellant
Versus
Dhanakoti Ammal - Respondent
Decided On : 04/01/1965
SPECIFIC PERFORMANCE - CONTRACT FOR SALE OF IMMOVABLE PROPERTY - TIME NOT ESSENCE OF CONTRACT - READINESS AND WILLINGNESS TO PERFORM - CAPACITY TO FIND MONEY - DELAY IN FINDING MONEY - UNDUE DELAY - NOTICE TO COMPLETE CONTRACT WITHIN DEFINITE TIME - DISCRETION OF COURT - HARDSHIP - SUBSEQUENT RISE IN VALUE OF PROPERTY.
Fact of the Case:
Plaintiff filed a suit for specific performance of an agreement for sale of a house property in his favor. The agreement provided for completion of the sale within 8 months, with a default clause for forfeiture of the advance in case of failure to complete the sale. The plaintiff secured an encumbrance certificate for the property and cleared an encumbrance over the property. He also purchased stamp papers for engrossing the sale deed. On the last day for completing the transaction, the plaintiff filed the suit for specific performance, alleging that the defendant failed to receive the balance of consideration and execute the sale deed despite his readiness and willingness to perform his part of the contract. The defendant contended that the plaintiff did not have the requisite balance of consideration, that he had sought a loan from her, that she had waited at the Sub Registrar's office on the last day but the plaintiff did not appear, and that the suit was premature and without bonafides. The trial court decreed the suit for specific performance, but the lower appellate court dismissed the suit, holding that the plaintiff did not have the balance of consideration till he deposited the money into court and that there was no force in his contention that he was ready and willing to perform his part of the contract.
Finding of the Court:
The High Court held that time was not the essence of the contract and that the plaintiff had established his readiness and willingness to perform his part of the contract. The court found that the plaintiff had the capacity to find the money within a reasonable time and that there was no undue delay on his part in finding the requisite money. The court also held that the defendant did not give the plaintiff reasonable notice requiring performance within a definite time. The court further held that the subsequent rise in the value of the property was not a ground for refusing specific performance.
Issues: 1. Whether time was the essence of the contract for sale of immovable property. 2. Whether the plaintiff had established his readiness and willingness to perform his part of the contract. 3. Whether the plaintiff had the capacity to find the money within a reasonable time. 4. Whether there was undue delay on the part of the plaintiff in finding the requisite money. 5. Whether the defendant gave the plaintiff reasonable notice requiring performance within a definite time. 6. Whether the subsequent rise in the value of the property was a ground for refusing specific performance.
Ratio Decidendi: 1. In a contract for sale of immovable property, time is not the essence of the contract unless there is a plainly expressed stipulation to that effect. 2. Readiness and willingness to perform a contract means that the party seeking performance has kept the contract as a subsisting one with a preparedness to fulfill his obligations and accept performance when the time came. 3. A purchaser need not keep the money and establish that he had the money in advance. He could be said to be ready and willing to perform his part of the contract if he could find the money when the occasion arose. 4. Failure to find money or prove possession of money before the time for performance has arrived can never be taken as a breach entitling the vendors to resile from the contract. 5. When time is not the essence of the contract, the vendor must give reasonable notice requiring performance within a definite time. 6. The subsequent rise in the value of the property is not a ground for refusing specific performance.
Final Decision: The High Court allowed the second appeal, restored the decree of the trial court, and granted the plaintiff specific performance of the contract for sale of the house property.
2. The material facts of the case are not very much in dispute and may be briefly set out. The agreement for sale is evidenced by Ex. A. 1, dated 23-6-1958 whereunder the defendant, the admitted owner of the property had received an advance of Rs. 600, the price fixed for the conveyance being Rs. 9700. The contract for sale had to be completed within 8 months, the balance of price namely, Rs. 9200 being payable by 23-9-1958 at the time of the registration of the sale, expenses of the execution and registration of the sale deed to be borne by the purchaser, namely, the plaintiff. There was the usual default clause providing for the forfeiture of the advance in the event of the purchaser failing to complete the sale as provided. The plaintiff secured an encumbrance certificate for the property on 8-9-1958, and there is evidence that the defendant cleared an encumbrance over the property in favour of the Varalakshmi Bank on 13-9-1958. It is also established that by 20-9-1958 the plaintiff had purchased stamp papers of the value of Rs. 765 for engrossing the sale deed. On, 23-9-1958, that is, the last day as shown in the agreement for sale for completing the transaction, the plaintiff filed the suit for specific performance out of which this second appeal arises complaining that in spite of his having been ready and willing to perform his part of the contract, the defendant failed to receive the balance of consideration and execute the sale deed. The defendant contended that the plaintiff had not the requisite balance of consideration with him on 23-8-1958, that even earlier the plaintiff had sought of the defendant a loan Rs. 6000, that on 22-9-1958 she had sent her husband to inform the plaintiff that she would wait at the Sub Registrar's office on 23-9-1958 and that she waited in the Sub Registrar's officer till 4 p. m. that there was no bonafides in the suit as the plaintiff had not deposited the balance of consideration when filing the suit, that time was essence of the contract, that the suit was prematurely instituted without even issuing a notice to the defendant and that in the circumstance the plaintiff was not entitled to specific performance. At the time of arguments in the trial court, each side sought to throw the entire blame on the other and the defendant while giving evidence expressed her readiness to register the sale deed if money was paid even then. Within three days, the plaintiff deposited the entire balance of consideration into court. On this, the learned Subordinate Judge, while penalising the plaintiff for not issuing a notice to the defendant by depriving the plaintiff of his costs decreed the suit for specific performance. But the learned District Judge on appeal while agreeing with the conclusion of the trial court that time was not the essence of the contract, took the view that as the plaintiff had not the balance of consideration till he deposited the money into court there was no force in his contention that he was ready and willing to perform his part of the contract. Commenting on the failure of the plaintiff to tender the balance to the defendant he found against the claim of the plaintiff for specific performance and dismissed the suit with costs. In my view, on the facts and circumstances of the case, this is an extraordinary decision to take.
3. There has been no contention before me, nor do I find it adumbrated specifically in that form in arguments in the courts below that the suit does not lie because it was premature. The plea of the defendant was that there was no bona fides in filing this suit on 23-9-1958 itself prematurely and that it had been filed only with a view to gain time, the plaint
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