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High Court of Judicature at Madras
K. MOHAN RAM & M. DURAISWAMY
T.P. Latha @ Hemalatha & Others
Versus
P. Sukumar
Appeal Suit No.980 of 2009 & M.P.No.1 of 2009
Decided on: 12-04-2012
Specific Performance - Agreement of Sale - Time is not the essence of the contract - [SPECIFIC PERFORMANCE] - [AGREEMENT OF SALE] - [Section 16(c) of the Specific Relief Act, 1963, Section 20 of the Specific Relief Act, 1963] - The court held that time was not the essence of the agreement of sale. The respondent failed to prove continuous readiness and willingness to perform his part of the contract. The court also found that the respondent did not have the necessary funds or capacity to raise funds to pay the balance sale consideration. Therefore, the respondent was not entitled to the discretionary relief of specific performance.
Fact of the Case:
The respondent filed a suit for specific performance of an agreement of sale against the appellants. The appellants contended that time was the essence of the contract and that the respondent was not ready and willing to perform his part of the contract. The trial court decreed the suit for specific performance, and the appellants appealed the decision.
Finding of the Court:
The court found that time was not the essence of the agreement of sale and that the respondent failed to prove continuous readiness and willingness to perform his part of the contract. The court also found that the respondent did not have the necessary funds or capacity to raise funds to pay the balance sale consideration. Therefore, the respondent was not entitled to the discretionary relief of specific performance.
Issues: The issues framed by the trial court were: (i) Whether the time fixed under the agreement is the essence of the contract as alleged by the defendants? (ii) Whether the plaintiff was ready and willing to perform his part of the contract? (iii) Whether the plaintiff is entitled to the relief of specific performance as prayed for? (iv) Whether the plaintiff is entitled to the relief of permanent injunction as prayed for? (v) To what relief, the plaintiff is entitled to?
Ratio Decidendi: The court held that time was not the essence of the agreement of sale. The respondent failed to prove continuous readiness and willingness to perform his part of the contract. The court also found that the respondent did not have the necessary funds or capacity to raise funds to pay the balance sale consideration. Therefore, the respondent was not entitled to the discretionary relief of specific performance.
Final Decision: The judgment and decree passed in the trial court were set aside, and the appeal was allowed. The court also found that the respondent was not entitled to the refund of the advance amount paid.
K.MohanRam, J.,
1. The defendants in O.S.No.84 of 2008 on the file of the I Additional District Court, Erode, are the appellants in the above appeal. The respondent / plaintiff filed the suit for specific performance of the agreement of sale, dated 10.03.2007 against the appellants / defendants and the trial court decreed the suit and being aggrieved by that, the above appeal has been filed by the appellants.
2. The case of the respondent before the Court below is as follows:-
The suit property belonged to one Late T.M.Pasai Nayagam and he died on 11.08.2005 leaving behind the appellants as his legal heirs and the appellants inherited the suit properties and became the absolute owners thereof. The appellants made a proclamation for sale of the suit property for their family expenses and also for their welfare. After negotiations, an agreement of sale, dated 10.03.2007, was entered into between them. On 10.03.2007, the appellants agreed to sell the suit property at Rs.1,050/- per sq.ft. The total sale consideration comes to Rs.17,01,000/-. The time fixed for completing the sale is six months from the date of the agreement. A sum of Rs.5,00,000/- was paid as advance and the balance sale price of Rs.12,01,000/-is to be paid by the respondent to the appellants at the time of registration of the sale deed. Since the property is an immovable property, time is not the essence of the contract.
3. The appellants are in occupation of a residential house and a portion of the suit property is let out to the tenants. Since the third appellant was studying on the date of agreement, the appellants agreed to execute the sale deed and hand over possession of the suit property on the date of sale deed itself. Further, as the tenants had encroached the road for the purpose of laying steps to enable their customers to reach their shop, the appellants have agreed to measure the suit property with the help of the surveyor for the purpose of arriving at the sale price. The appellants also agreed to vacate and surrender vacant possession of the suit property, but they failed to do so.
4. The respondent was and is always ready and willing to perform his part of the contract from the date of agreement. On several occasions, the respondent tendered the balance sale consideration and requested the appellants to execute the sale deed free from all encumbrances but the appellants gave evasive replies and postponed the execution of the sale deed. The respondent is possessing sufficient means and amounts to pay the balance sale consideration. Subsequent to the date of the agreement, as Erode Municipality was upgraded as Erode Corporation, the market value has increased to some extent. Therefore, in order to cheat and defraud the respondent, the appellants were attempting to alienate and encumber the suit properties to the third parties. When the respondent approached the appellants for execution of the sale deed through mediators the appellants failed to execute the sale deed.
5. On 14.09.2007, the appellants sent a registered notice to the respondent admitting the suit agreement, but claimed that time is the essence of the contract and on the expiry of the period stipulated in the agreement, the respondent forfeited the advance amount. Since time is not the essence of the contract and as the appellants did not chose to vacate the tenants and on account of the studies of the third appellant, the appellants were not able to vacate the suit property and in fact, sought time up to May 2008, when the academic year ends. Since the appellants had failed to comply with the terms of the agreement of sale, the suit is filed for specific performance. The respondent also filed a lodgement schedule for deposing the balance sale consideration and he also sought for an injunction against the appellants.
6. The suit was contested by the appellants by filing a detailed written statement by the first appellant, which was adopted by the other appellants, inter-a
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