1977 (1) TMI 167 - SC - Indian Laws

Summary

Issues Involved:
1. Whether time was of the essence of the contract.
2. Whether the plaintiff was always ready and willing to perform his part of the contract.
3. Whether the contract subsisted on the date the suit was filed.
4. Whether the respondents committed a breach of contract.

Issue-wise Analysis:

1. Whether time was of the essence of the contract:
The Supreme Court examined Clause 4 of the suit agreement dated 24th March 1964, which required the appellant to get the sale deed executed within two months, failing which the earnest money would be forfeited. The Court reiterated the settled law that the fixation of a period within which a contract must be performed does not make time the essence of the contract, especially in agreements involving the sale of immovable property. The Court noted that neither the pleadings nor the trial indicated that time was of the essence. The respondents did not raise this issue in their written statement, and no issue was framed on this point during the trial. The High Court's inference that the parties intended to treat time as of the essence based on their conduct and correspondence was found to be erroneous. The Supreme Court concluded that there was no basis for the plea that time was of the essence of the contract.

2. Whether the plaintiff was always ready and willing to perform his part of the contract:
The trial court found that the appellant was always ready and willing to perform his part of the contract, supported by evidence such as letters, telegrams, and the withdrawal of funds from the bank. The High Court, however, found the appellant's case unworthy of credit, citing a shortfall of Rs. 2,000 in the appellant's bank deposits. The Supreme Court disagreed with the High Court's reasoning, noting that the appellant had sufficient funds and had shown great anxiety to complete the sale deed. The Court accepted the trial court's finding that the appellant was always ready and willing to perform his part of the contract and that the respondents were evading their responsibility.

3. Whether the contract subsisted on the date the suit was filed:
The trial court held that the contract subsisted despite the expiration of the stipulated time for execution, as the delay was caused by the respondents. The High Court, however, found that the appellant's failure to get the sale deed executed by 25th May 1964 constituted a breach. The Supreme Court, agreeing with the trial court, found that the contract subsisted and the appellant was entitled to specific performance, as the respondents were responsible for the delay.

4. Whether the respondents committed a breach of contract:
The trial court found that the respondents were guilty of breach of contract by not executing the sale deed as agreed. The High Court, however, held that the appellant committed the breach by not getting the sale deed executed within the stipulated time. The Supreme Court, after examining the evidence and correspondence, concluded that the respondents were evading their responsibility and were guilty of breach of contract.

Conclusion:
The Supreme Court allowed the appeal, setting aside the judgment of the High Court and restoring that of the trial court. The appellant was directed to deposit Rs. 20,000 and the sale document in the Court of the Civil Judge, Agra within six weeks, with further directions to be taken from the Civil Judge, Agra. The appeal was allowed with costs.