2004 (8) TMI 732 - SC - Indian Laws

Summary

Issues Involved:
1. Whether time was the essence of the contract.
2. Whether the respondent was ready and willing to perform his part of the contract.

Issue-wise Detailed Analysis:

1. Whether time was the essence of the contract:

The appellants contended that time was made the essence of the contract by notice dated 12.9.1981, requiring the respondent to pay Rs. 75,000 on or before 30.9.1981. The High Court found that the original agreement dated 18.2.1981 did not expressly stipulate that time was of the essence. The agreement allowed for the extension of the completion date up to 31.12.1981, indicating that the parties did not intend for time to be of the essence. The High Court also noted that the appellants' conduct of extending the time contradicted their claim that time was of the essence. The Supreme Court upheld this view, stating that the intention of the parties is crucial in determining whether time is of the essence, and in this case, the evidence did not support the appellants' claim.

2. Whether the respondent was ready and willing to perform his part of the contract:

The appellants argued that the respondent was not ready and willing to perform his part of the contract, as evidenced by the post-dated cheque for Rs. 45,000 dated 15.10.1981. However, the High Court found that the respondent had shown readiness and willingness to perform his obligations. The respondent had paid Rs. 50,000 on 31.3.1981 and had agreed to the extension of the payment deadline to 30.9.1981. The Supreme Court noted that the respondent had instituted the suit for specific performance on 2.12.1981, soon after the appellants' notice of termination on 3.10.1981, indicating his eagerness to complete the transaction. The Supreme Court also emphasized that the respondent's overall conduct demonstrated his readiness and willingness to perform his part of the contract.

Conclusion:

The Supreme Court dismissed the appeal, affirming the High Court's judgment that time was not of the essence of the contract and that the respondent was ready and willing to perform his obligations. The Court ordered the respondent to deposit Rs. 75,000 within eight weeks from 17.6.2000, allowing the appellants to withdraw the amount with interest if deposited. The appeal was dismissed with no order as to costs.