2009 (10) TMI 970 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the insistence of the appellants to get the clearance of the Endowment department of the State of Andhra Pradesh at Hyderabad was the condition to be incorporated in the agreement itself for the purpose of a decree for specific performance of the contract for sale?
2. Whether in the facts and circumstances of the present case the appellant could be found to be not ready and willing to perform their part of the contract?
3. Whether in the facts and circumstances of the present case, the High Court was in error in holding that time was the essence of the contract for sale?
4. Whether in the facts and circumstances of the present case, the respondents are entitled to forfeit the advance amount paid by the appellants-purchasers?

Summary:

Issue 1:
The appellants argued that they were entitled to seek clarifications regarding the procurement of clearance from the Endowment Department, citing sub-sections (b) and (c) of Section 55(1) of the Transfer of Property Act, 1882. However, the court held that the contract did not include a clause requiring such clearance for specific performance. The court concluded that there was no obligation on the part of the respondents to obtain clearance from the Endowment Department, as the laws of West Bengal, where the trust was registered, did not require such permission.

Issue 2:
The court examined whether the appellants were ready and willing to perform their part of the contract. It was found that the appellants imposed additional conditions and sought clarifications that were not part of the original contract. The trial court and the High Court both concluded that the appellants were not ready and willing to perform their obligations under the contract. The Supreme Court affirmed this finding, noting that the appellants' demands were unjustified and unreasonable.

Issue 3:
The appellants contended that time was not the essence of the contract despite a specific clause stating otherwise. The court referred to clauses 3 and 10 of the agreement, which explicitly mentioned that time was of the essence. The court held that the intention of the parties was clear from the contract, and time was indeed the essence of the contract. The court rejected the appellants' reliance on the case of Swarnam Ramachandram, as the facts of that case were different.

Issue 4:
The court did not address the issue of forfeiture of the advance amount, as no appeal was filed by the respondents against the order regarding forfeiture. The court affirmed the judgment of the High Court concerning the suit for specific performance of the contract for sale.

Conclusion:
The appeal was allowed to the extent indicated, with no order as to costs. The Supreme Court affirmed the High Court's judgment regarding the specific performance of the contract for sale and upheld the findings that the appellants were not ready and willing to perform their part of the contract and that time was the essence of the contract.