2008 (1) TMI 1005 - SC - Indian Laws

Summary

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

Summary:

Issue 1: Whether time is the essence of the contract.

The Supreme Court examined the agreement of sale dated 31.07.1985, which specified that the sale deed was to be executed within six months. The Court referred to the default clause, which stated that if the defendant failed to execute the sale deed within the stipulated period, the plaintiffs could get it executed based on the agreement, and if the plaintiffs failed, the earnest money would be forfeited. The Court cited precedents such as Chand Rani v. Kamal Rani and Govind Prasad Chaturvedi v. Hari Dutt Shastri, which established that in the sale of immovable property, time is not the essence of the contract unless explicitly stated in unequivocal language. The Court concluded that the clauses in the agreement rendered ineffective the provision relating to time being the essence of the contract. The High Court's reliance on K.S. Vidyanadam and Ors. v. Vairavan was found inapplicable as the subject matter was agricultural land, not urban property.

Issue 2: Whether the plaintiffs were ready and willing to perform the contract.

The plaintiffs consistently expressed their readiness and willingness to perform their part of the contract, including sending a legal notice to the defendant. The trial Court found that the plaintiffs were ready and willing to perform their part of the contract, and the defendant failed to prove otherwise. The defendant did not enter the witness box or provide any evidence to support his claim that time was the essence of the contract. The Supreme Court noted that the High Court overlooked the material aspects and the conduct of the defendant. The plaintiffs' alternative claim for the refund of earnest money was deemed appropriate, as it is a standard practice in suits for specific performance to seek alternative relief.

Conclusion:

The Supreme Court set aside the judgment and decree of the High Court and confirmed the decree granted by the trial Court. The plaintiffs were directed to deposit the balance amount of sale consideration within eight weeks, after which the defendant was to execute the sale deed. In case of failure by the defendant, the plaintiffs could get the sale deed executed through the Court. The civil appeal was allowed with no order as to costs.