The supreme court sets aside the order of Madurai bench on property consideration not being paid; States Time would be the essence of the contract.
TITLE : Alagammal and Ors v Ganesan and Anr
CORAM : Hon’ble Justice Ahsanuddin Amanullah and Hon’ble Justice Vikram Nath
DATE : 10th January 2024
CITATION : Civil Appeal No. 8185 of 2009
FACTS
The appellant got into an agreement with the respondents for the consideration amount of Rs.21000. Out of which Rs.3000 was paid in advance. 6 months has elapsed since the last payment and the appellants did not pay the pending money and subsequently executed a sale deed to a third party for the consideration amount of Rs.22000.
LAWS INVOLVED
The supreme court relied on the judgement of K.S Vaidyanthan which stated that :
‘10.It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party.”
However the court also stated that in matters of inaction by the purchasing party to buy, time is of the essence :
- In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2 1/2 years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices — according to the defendants, three times — between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff.
ISSUES
Whether the agreement discloses a fixed time frame for making payment in full?
JUDGEMENT
The court set aside the Madurai bench judgement and holds that there being no willingness to pay the remaining amount, the time is of essence.
“the same being at great intervals and there being no willingness shown by them to pay the remaining amount or getting the Sale Deed ascribed on necessary stamp paper and giving notice to the appellants to execute the Sale Deed, it cannot be said that in the present case, judged on the anvil of the conduct of parties, especially the appellants, time would not remain the essence of the contract.”
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Written by- Sanjana Ravichandran