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2024 Supreme(Telangana) 619
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P.SREE SUDHA, J.
M.Subash Reddy - Appellant
Versus
Vidyasagar S.Nitha. - Respondent
Appeal Suit No.167 of 2010
Decided on : 12-01-2024
Advocate Appeared:
For the Appellant : Sri M.Yadagiri
For the Respondent: Sri M.V.S.Sai Kumar
IMPORTANT POINT
Time is of the essence in contracts; failure to pay the balance sale consideration results in rescission of the agreement.
Headnote:
(A) Specific Relief Act, 1963 - Sections 27 and 28 - Agreement of Sale dated 24.09.2002 - Appellant/plaintiff sought specific performance of the agreement but failed to pay the balance sale consideration by the stipulated date of 28.02.2003 - The trial Court directed the respondent/defendant to return the advance amount of Rs.1,00,000/- with interest, which was contested by the appellant - The court found that time was the essence of the contract and the appellant's failure to pay the balance amount resulted in the agreement being rescinded - The appeal was dismissed, confirming the trial Court's judgment regarding specific performance and reversing the finding on the refund of advance amount. (Paras 12 and 13)
Facts of the case:
The appellant entered into an Agreement of Sale for land measuring Acs.6 - 28 gts, paid Rs.1,00,000/- as advance, but failed to pay the balance amount by the stipulated date, leading to the respondent's claim of rescission of the agreement.
Findings of Court:
The court ruled that the appellant was not entitled to specific performance due to non-payment of the balance sale consideration within the stipulated time.
Issues: The main issue was whether the appellant was ready and willing to perform his part of the contract and the implications of failing to pay the balance amount on time.
Ratio Decidendi: The court held that time is of the essence in contracts, and the appellant's failure to pay the balance amount within the stipulated time resulted in the rescission of the agreement.
Result: Appeal dismissed, confirming the trial Court's judgment regarding specific performance and reversing the finding on the refund of advance amount.
JUDGMENT :
This appeal suit is filed against the Judgment and decree dated 25.11.2009 in O.S.No.37 of 2003, passed by the learned Senior Civil Judge, Vikarabad.
2. The suit vide O.S.No.37 of 2003, was filed by appellant/plaintiff against respondent/defendant for specific performance of Agreement of Sale dated 24.09.2002. The trial Court examined P.Ws.1 to 3 and marked Exs.A1 to A5 on behalf of the appellant/plaintiff. There is no evidence on behalf of the respondent/defendant, but got marked Ex.B1 copy of the Judgment in O.S.No.310 of 2006, on behalf of the defendant. The trial Court after considering the arguments of both sides and evidence on record, decreed the suit to the extent of return of amount of Rs.1,00,000/- with interest @ 6% per annum from 24.09.2002 to till date without costs and respondent/defendant was directed to deposit the amount within two months, failing which, he was directed to pay interest @ 18% per annum. Aggrieved by the said Judgment and decree, plaintiff therein preferred the present appeal.
3. The learned Counsel for the appellant/plaintiff mainly contended that respondent/defendant is the owner of the land measuring Acs.5 – 04 gts in Sy.No.280 and land admeasuring Ac.1 – 24 gts in Sy.Nos.276, 277, 278 and 279, totally admeasuring Acs.6 – 28 gts, situated at Surangal village, Moinabad Mandal, R.R.District. He entered into an Agreement of Sale with respondent under Ex.A.1 on 24.09.2002, for an amount of Rs.5,49,000/- and paid Rs.1,00,000/- as advance on the same day and the respondent/defendant had issued Ex.A2 and also delivered possession to him. Later, when he requested the respondent to receive the balance sale consideration and to execute the registered sale deed, he did not turn up, as such he issued legal notice dated 01.03.2003 and respondent gave reply to the said notice on 17.03.2003, as such he filed the suit for specific performance. He was always ready and willing to pay the balance sale consideration, but the trial Court erroneously not granted decree of specific performance, but only directed the respondent/defendant to pay the advance sale consideration of Rs.1,00,000/- with interest. The evidence of P.Ws.2 and 3 was not considered properly and the respondent/defendant had not taken any steps for cancellation of the Agreement of Sale, as such time is not the essence of contract. Therefore, requested this Court to set aside the Judgment and decree passed by the trial Court.
4. In the plaint filed by the appellant/plaintiff, he stated that respondent/defendant is the owner of the land admeasuring an extent of Acs.5 – 04 gts in Sy.No.280 and land admeasuring Ac.1 – 24 gts in Sy.Nos.276, 277, 278 and 279, totally admeasuring Acs.6 – 28 gts, situated at Surangal village, Moinabad Mandal, R.R.District. He entered into an Agreement of Sale with the respondent/defendant on 24.09.2002 for a total sale consideration of Rs.5,49,000/-. Appellant/plaintiff paid Rs.1,00,000/- on the same day and respondent/defendant also issued a receipt. He also stated that respondent/defendant put him in physical possession of the suit schedule property. He further stated that though he was ready and willing to pay balance sale consideration, respondent did not came forward to receive the same and thus he issued legal notice dated 01.03.2003 and also filed suit against the respondent herein.
5. In the written statement filed by the respondent, he admitted about the Agreement of Sale dated 24.09.2002 for the land measuring an extent of Acs.6 – 26 gts in the above mentioned survey numbers for a total sale consideration of Rs.5,49,000/- and appellant also made payment of Rs.1,00,000/- as earnest money. He further stated that appellant got issued legal notice dated 01.03.2003 and he gave reply on 17.03.2003. He contended that appellant filed the receipt dated 24.09.2002, without referring the existence of the same in the notice dated 01.03.2003 and it amounts to suppressing the material facts. There was a default clause
