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2024 Supreme(Online)(SC) 6403

SUPREME COURT OF INDIA
VIKRAM NATH,J, AHSANUDDIN AMANULLAH,J
ALAGAMMAL AND ORS. – Appellant
Versus
GANESAN AND ANR. – Respondent
CIVIL APPEAL No.8185 OF 2009



Time is not the essence of a contract unless expressly stated; failure to perform within the stipulated time bars claims for specific performance.

Headnote:(A) Specific Relief Act, 1963 - Section 16(c) - Limitation Act, 1963 - Article 54 - Agreement of Sale - Time is not the essence of the contract unless expressly stated - The appellants entered into an Agreement to sell property but failed to execute the Sale Deed within the stipulated time - Respondents filed for specific performance after significant delay, which was deemed unreasonable - The High Court's decision to uphold the First Appellate Court's ruling was challenged. (Paras 3, 24, 31)

(B) Readiness and Willingness - The respondents failed to demonstrate readiness and willingness to perform their part of the Agreement, as required under Section 16(c) of the Specific Relief Act - The court emphasized that mere acceptance of late payments does not extend the time for performance. (Paras 9, 20, 30)

Facts of the case:
The appellants entered into a registered Agreement of Sale with the respondents in 1990, receiving an advance payment but failing to execute the Sale Deed within the agreed six-month period. The respondents filed a suit for specific performance in 1998, after a significant delay, which was dismissed by the Trial Court but later allowed by the First Appellate Court and upheld by the High Court.

Findings of Court:
The court found that the respondents did not comply with the Agreement's terms within the stipulated time, and their subsequent actions did not demonstrate readiness and willingness to perform their obligations. The High Court's ruling was set aside, restoring the Trial Court's decision.

Issues: The main issues included whether time was of the essence in the Agreement and whether the respondents had shown readiness and willingness to perform their obligations under the Agreement.

Ratio Decidendi: The court ruled that time was indeed of the essence in the Agreement, and the respondents' failure to act within the stipulated time barred their claim for specific performance. The court also noted that the acceptance of late payments did not negate the requirement for timely performance.

Result: The appeal is allowed, and the judgment of the High Court is set aside.

JUDGEMENT

AHSANUDDIN AMANULLAH, J. Heard learned counsel for the parties.

Digitally signed by POOJA SHARMA Date: 2024.01.10 15:42:58 IST Reason:

    Signature Not Verified

2. The present appeal is directed against the Final Judgment dated 28.04.2009 (hereinafter referred to as the “Impugned Judgment”) passed by the Madurai Bench, Madras High Court (hereinafter referred to as “the High Court”) dismissing a Second Appeal [S.A. (MD) No.1127 of 2008] filed by the appellants/original defendants.

BRIEF FACTS:

3. The appellants no.1, 2 and 3 entered into a registered Agreement of Sale (hereinafter referred to as the “Agreement”) with the respondents on 22.11.1990 to sell the suit property for a consideration of Rs.21,000/-, against which Rs.3000/- had been received in advance. Further, six months’ time was fixed for completion of the transaction. The appellants No.1, 2 & 3, in the meantime, had executed a Sale Deed with regard to the property in question with appellant no.7 on 05.11.1997 for a consideration of Rs.22,000/-. On 18.11.1997, the respondents sent a Notice to the appellants calling upon them to execute the Agreement. This led to the respondents filing of Original Suit No.165 of 1998 before the Munsif, District Court, Dindigul against the appellants for specific performance of the Agreement, damages and for recovery of money with interest. The suit stood dismissed by the Principal District Munsif Judge, Dindigul by order dated 10.09.2000. An appeal bearing A.S. No.258 of 2008 filed by the respondents was allowed by the First Appellate Court, and the same has been upheld by the High Court by the Impugned Judgment dated 28.04.2009. SUBMISSIONS BY THE APPELLANTS:

4. Learned counsel for the appellants submitted that as per the Agreement, the balance consideration amount of Rs. 18,000/- was to be paid within six months which was admittedly not done. He submitted that the so-called subsequent payments on 16.12.1990 of Rs.1,000/-;

    on 15.04.1991 of Rs.3,000/-, and; on 17.09.1991 of Rs.2,500/- though were not actually paid to the appellants and even without admitting the same and accepting it for the sake of argument, the same is incorrect as the fingerprint expert has found the thumb-impression of the appellant no.1 as not matching the admitted actual sample thumb- impression of the appellant no.1. and, thus, the very basis of holding that time was not the essence of the agreement gets washed away. It was submitted that the Agreement stipulated that if there was default on the part of the respondents, the advance paid would be forfeited, and the entitlement to obtain the Sale Deed and get possession free from all encumbrances would also end.

5. It was submitted that once the fingerprint has been disapproved of by an expert and such report has been brought before the First Appellate Court, the claim based on such a document on which forgery has been committed itself renders the whole transaction inadmissible in law on the well- settled principle that the respondents did not come before the Court with clean hands as the entire claim was based on a forged document.

6. It was submitted that the claim of the respondents to have paid Rs.3,000/- on 18.09.1992; Rs.1,800/- on 24.07.1996; Rs.1,300/- on 25.07.1996 and Rs.1,000/- on 29.07.1996 i.e., a total of Rs.20,425/- and ultimately Rs.1,000/- on 21.04.1997 i.e., an excess of Rs. 425/- over the amount indicated in the Agreement, was false.

7. Learned counsel submitted that the endorsement(s) made not having been proved, it cannot be assumed that the respondents were ready and willing, or that they had, in fact, paid the excess amount.

8. It was contended that the Legal Notice sent on behalf of the respondents dated 18.11.1997 was clearly to get over the fatal lapses on their part and to give life to a dead cause i.e., revive the Agreement, which already stood incapable of being executed through Court due to efflux of time. On this issue, the contention was that readiness and willingness





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