1992 (12) TMI 236 - SC - Indian Laws

Summary

Issues Involved:
1. Whether time was the essence of the contract.
2. Whether the plaintiffs were ready and willing to perform their part of the contract.

Issue-wise Detailed Analysis:

1. Whether time was the essence of the contract:
The trial court and the Division Bench of the High Court had differing views on this issue. The trial court held that "payment of Rs. 98,000 by 6.9.71 was not the essence of the contract." It concluded that the plaintiffs were always ready and willing to perform their part of the contract and decreed the suit in their favor. However, the Division Bench of the High Court, upon an "elaborate consideration of the oral and documentary evidence," held that the non-payment of Rs. 98,000 by the plaintiffs on or before 6.9.71 constituted a breach of contract. The Division Bench emphasized that the insistence of the plaintiffs on obtaining the income-tax clearance certificate and redemption of the property before the payment of Rs. 98,000 was unjustified and amounted to "trying to vary the terms of the agreement." The Supreme Court agreed with the Division Bench, stating that "the word 'only' has been used twice over" to qualify both the amount and the period of 10 days, thus making time the essence of the contract.

2. Whether the plaintiffs were ready and willing to perform their part of the contract:
The trial court found that the plaintiffs were ready and willing to perform their part of the contract. However, the Division Bench disagreed, noting that the plaintiffs' readiness and willingness were not substantiated by their actions. The Supreme Court analyzed the notices exchanged between the parties and found that the plaintiffs were not willing to pay Rs. 98,000 unless vacant possession of one room on the ground floor was given. The Supreme Court observed that the plaintiffs' insistence on delivery of possession as a condition precedent for making the payment was contrary to the terms of the agreement. The Court concluded that "though as a general proposition of law time is not the essence of the contract in the case of a sale of immovable property, yet the parties intended to make time as the essence under Clause (1) of the suit agreement." The Court further noted that the plaintiffs' conduct did not demonstrate readiness and willingness to perform their part of the contract, agreeing with the Division Bench's conclusion.

Conclusion:
The Supreme Court dismissed the civil appeal with costs, affirming the Division Bench's judgment that time was the essence of the contract and that the plaintiffs were not ready and willing to perform their part of the contract.