BY A. P. RANDHIR

JUDGMENT

ON

SUIT FOR

SPECIFIC

PERFORMANCE

OF CONTRACT

By : A P RANDHIR

(B. com, LL.B, LL.M, D.L.P)

BY A. P. RANDHIR

TABLE 

1. Suit For Specific Performance Of Contract

2. Elements That Are Involved In A Suit For Specific Performance

Of Suit:-

2. 2. Unregistered Agreement Of Sale :-

2. 2. Unregistered Agreement Of Sale :-

3. Conduct Of The Parties:-

4. Readiness And Willingness:-

5. Time Is Essence Of Contract:-

6. Adding Parties In Specific Performance Suit:-

7. Essential Elements To Constitute ‘Lis Pendens’:-

8. Readiness And Willingness

9. Limitation Act, Article 54. (Suit For Specific Performance)

10. Specific Relief Act, Section 20(C)

11. Evidence Act Section 68 And Specific Relief Act Sec.10.

12. Specific Relief Act Section 10 And Registration Act, Sec.49.

13. Transfer Of Property Act, Section 53-A

14.Essence Of Contract Relating To Immovable Property

BY A. P. RANDHIR

1. Suit For Specific Performance of Contract

Specific performance is a remedy developed by principle of equity.

A party to a contract who is damaged because the contract is breached

by another party has the option to file a suit for specific performance

compelling to perform his part of contract. Before an equity court will

compel specific performance, however, the contract must be one which

can be specifically performed. Section 16 (c) of the Act envisages that

plaintiff must plead and prove that he had performed or has always been

ready and willing to perform the essential terms of the contract which are

to be performed by him, other than those terms the performance of

which has been prevented or waived by the defendant. In our country,

most of the specific performance suits relate to sales of immovable

properties and to some extent, transfer of shares. As the law of specific

performance is basically founded on equity, considerations such as

conduct of the plaintiff, the element of hardship that may be caused to

one of the parties, the availability of adequate alternative relief and such

other matters are taken into consideration. It is a discretionary relief.

2. Elements That Are Involved In A Suit For Specific PerformanceOf Suit:-

BY A. P. RANDHIR

2.1. Valid Contract :-

2.1.1. Vimlesh Kumari Kulshrestha vs Sambhajirao, 2008 (2)Supreme 127)

Normally, suit for specific performance of contract based on agreement

of sale. Vague and uncertain agreement could not be given effect to. It

was observed in Ambica Prasad vs Naziran Bibi, AIR 1939 All 64],

[Balram v Natku, AIR 1928 PC 75 that there should be a valid contract

for suit for specific performance of contract.

2. 2. Unregistered agreement of sale :-

2.2.1 S.Kaladevi vs V.R.Somasundaram, AIR 2010 SC 1654

Unregistered agreement of sale is admissible in evidence under

Section 49(c) of the Registration Act in a suit for specific performance of

contract. Unregistered sale deed is admissible in evidence in a suit for

specific performance.

3. Conduct of the parties:-

3. 3.2. H.P.Pyarejan vs Dasappa, AIR 2006 SC 1144

Any person seeking benefit of specific performance of contract

must manifest that his conduct has been blemishless. Similarly, conduct

of defendant cannot be ignored (Silvey vs Arun Varghese, AIR 2008 SC

1568). The relief of specific performance is discretionary(V.R.Sudhakara

Rao vs T.V.Kameswari, (2007) 6 SCC 650). It was held in Aniglase

BY A. P. RANDHIR

Yohannan v. Ramlatha, 2005 (7) SCC 534 that if the pleadings manifest

that the conduct of the plaintiff entitles him to get the relief on perusal of

the plaint he should not be denied the relief.

4. Readiness and Willingness:-

Section 16(c) of the Act mandates the plaintiff to aver in the plaint

and establish the fact by evidence aliunde that he has always been

ready and willing to perform his part of the contract. Distinction between

“readiness” and “willingness” is that the former refers to financial

capacity and the latter to the conduct of the Plaintiff wanting

performance (2011) 1 SCC 429). The plaintiff’s readiness and

willingness, which is a condition precedent, must be in accordance with

the terms of the agreement (Bala Krishna vs Bhgawan Das, AIR 2008

SC 1786), however, the plaintiff need not carry money in his hand

M.K.Watts vs Usha Sharma, AIR 2004 P&H 295).

4.1 G.Jayashree vs Bhagawan Das, AIR 2009 SC 1749

In a suit for specific performance, plaintiff is to approach Court

with clean hands.

4.2 N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors, (1995) 5SCC 115 at para 5.

BY A. P. RANDHIR

Right from the date of the execution till date of the decree he must

prove that he is ready and has always been willing to perform his part of

the contract.

4.3 J.P. Builders and Anr.Vs. A. Ramadas Rao and Anr, (2011)1 SCC429).

Even subsequent purchaser is entitled to raise objection as to

readiness and willingness. (AIR 2009 SC 2157). To know the

consequences in the case of absence of plea of readiness and

willingness in the plaint.

5. Time is essence of contract:-

5.1 Chand Rani v.Kamal Rani MANU/SC/0285/1993 : 1993 (1) SCC519

From the decision of a Constitution Bench of the Hon’ble Supreme Court

in, it is clearly known that in the case of sale of immovable property, time

is never regarded as the essence of the contract. An intention to make

time the essence of the contract must be expressed in unequivocal

language. As to the point of limitation is concerned, the suit for specific

performance has to be filed within reasonable time which depends upon

facts and circumstances of each case. (AIR 2009 SC 2157, Azhar

Sultana’s case). Even if it is not of the essence of the contract, the Court

may infer that it is to be performed in a reasonable time if the conditions

BY A. P. RANDHIR

are: 1. from the express terms of the contract; 2. from the nature of the

property; and 3. from the surrounding circumstances, for example: the

object of making the contract.( Smt. Chand Rani (dead) by LRs. Vs. Smt.

Kamal Rani (dead) by LRs, 1993 (1) SCC 519)

6. Adding parties in specific performance suit:-

6.1 Lingaraja Mohanty vs Binodini Mohanty & Ors. on 20 April, 20116.2 Thomson Press (India) Ltd. Vs. Nanak Builders and Investors P.Ltd. and Ors, 2013 (3) SCALE26).

Order 1 Rule 10 CPC is wider than the scope of Order 22 Rule 10

CPC as to person whose presence before the court is necessary or

proper for effective adjudication of the issue involved in the suit. Order

22 Rule 10 CPC is an enabling provision and that it has certain

parameters to continue the suit where right to sue is survival. Order 22,

Rule 10, C.P.C. speaks of cases of an assignment, creation or

devolution of any interest during the pendency of a suit and the suit may,

by leave of the Court, be continued by or against the person to or upon

whom such interest has come or devolved.

7. Essential elements to constitute ‘Lis Pendens’:-

7.1 Man Kaur (dead) by LRS. Vs. Hartar Singh Sangha, (2010)10SCC 512

BY A. P. RANDHIR

Section 52 of T.P.Act deals with ‘Lis Pendens’. In order to constitute a lis

pendens the following elements must be present :-

(I) There must be a suit or proceeding pending in a Court of competent

jurisdiction;

(II) The suit or proceeding must not be collusive;

(III) The litigation must be one in which right to immovable property isdirectly and specifically in question;

(IV) There must be a transfer of or otherwise dealing with the property indispute by any party to the litigation;

(V) Such transfer must affect the rights of the other party that mayultimately accrue under the terms of the decree or order.

To adjudge whether the Plaintiff is ready and willing to perform his

part of the contract, the Court must take into consideration the conduct

of the Plaintiff prior and subsequent to the filing of the suit along with

other attending circumstances and to prove willingness to perform

plaintiff must enter witness box. Right from the date of the execution till

date of the decree, he must prove that he is ready and has always been

willing to perform his part of the contract.

7.2 Adbul Hakkem vs Naiyaz Ahmed, AIR 2004 AP 299,

The case of similar instance was decided in the case of where the

defendant contended that the plaintiff vendee alone signed the sale

BY A. P. RANDHIR

agreement but not the defendant vendor, as such there can be no

contract, cannot be accepted. The Court held that specific performance

is maintainable.(Also see A.P.Civil Court Manual, Vol-2, at page 1358).

In my view, irrespective execution of written contract, when the vendor

and vendee both have same understanding of the terms of agreement,

Vendor cannot contend that there is no contract between them because

even oral contract is valid. if vendor contends that such agreement is

invalid for want of his signature on agreement of sale, such contention

cannot be acceptable on the ground of 'Consensus ad idem'.

7.3 JP Builders(supra) Hon’ble Supreme Court

Hon.ble court observed that Section 16 ( c ) of the Specific Relief

Act mandates averment as to readiness and willingness on the part of

the plaintiff and that it is a condition precedent for obtaining relief. The

plaintiff is duty bound to allege and prove a continuous readiness and

willingness to perform the contract on his part from the date of the

contract and that the onus is on the plaintiff alone. In para-27 of this

judgment, Hon’ble Supreme Court has held that when there is non-

compliance with these statutory mandates, court is not bound to grant

specific performance and is left with no other alternative but to dismiss

the suit.

BY A. P. RANDHIR

7.4 N.P. Thirugnanam (D) vs- Dr. R. Jagan Mohan Rao reported in1995 (5) SCC 115

The Hon’ble Supreme Court held in the case of that plaintiff must not

only aver and establish readiness and willingness but plaintiff is also

duty bound to show that he has financial ability to make payment of the

balance consideration.

7.5 Ramesh Chand (Dead) through L.Rs. VersusAsruddin (Dead) through LRs and another Citation;(2016) 1 SCC653

Section 20 of Specific Relief Act, 1963, provides that the

jurisdiction to decree specific performance is discretionary,

and the court is not bound to grant such relief merely because

it is lawful to do so. However, the discretion of the court is not

arbitrary but sound and reasonable, guided by judicial

principles. Sub-section (2) of Section 20 of the Act provides

the three situations in which the court may exercise discretion

not to decree specific performance. One of such situation is

contained in clause (a) of sub-section (2) of the Section which

provides that where the terms of the contract or the conduct of

the parties at the time of entering into the contract or the

other circumstances under which the contract was entered

into or such that the contract though not voidable, gives the

BY A. P. RANDHIR

plaintiff an unfair advantage over the defendant, the decree of

specific performance need not be passed. It is pertinent to

mention here that in the present case, though execution of

agreement dated 21.06.2004 between the parties is proved,

but it is no where pleaded or proved by the plaintiff that he got

redeemed the mortgaged land in favour of defendant No. 2 in

terms of the agreement, nor is it specifically pleaded that he

was ready and willing to get the property redeemed from the

mortgage.

7.6 K. NANJAPPA (Dead) BY LRs. … APPELLANT(S) VERSUS R.A.HAMEED alias AMEERSAB (Dead) BY LRs. AND ANOTHER …RESPONDENT(S) SUPREME COURT OF INDIA CIVIL APPEALNO.8224 OF 2003 Dated;September 02, 2015 Whether court can passdecree for specific performance of contract on the basis of evidenceadduced before criminal court?

Whether, while adjudicating plea of grant of decree for specific

performance, Court can consider a document produced and related

evidence led before the Criminal Court to make base for determining

existence of fact.

High Court vide its impugned finding in the instant matter set aside

the order of trial court rejecting the plea of grant of specific performance.

The relief was sought on the basis of agreement to sell written on a

quarter size piece of paper, which also included a mention of earlier

BY A. P. RANDHIR

execution of another agreement, which however was not filed on record.

High Court reversed the finding on the premise that document in

question was filed before the Criminal Court and evidence was led and

based thereupon decreed the suit for specific performance.

The Court while hearing appeal against the impugned High Court

finding made an observation that a decree for specific performance can

be granted even on the basis of oral contract. However, an oral

agreement with a reference to a future formal contract will not prevent a

binding bargain between the parties. In a case where plaintiff comes

forward to seek a decree for specific performance of contract of sale of

immovable property on the basis of an oral agreement or a written

contract, heavy burden lies on the him to prove that there was

consensus between the parties for the concluded agreement for sale of

immovable property.

Whether there was such a concluded contract or not would be a

question of fact to be determined on the facts and circumstances of each

individual case. In a suit for specific performance of a contract, the Court

cannot ignore Section 20 of the Specific Reliefs Act giving judicial

discretion to grant decree for Specific performance. However, the Court

is not bound to grant specific performance merely because it is lawful to

BY A. P. RANDHIR

do so. It should meticulously consider facts and circumstances of the

case to see that it is not used as an instrument of oppression to have an

unfair advantage not only to the plaintiff but also to the defendant. The

relief of specific performance is discretionary but not arbitrary which

must be exercised in accordance with sound and reasonably judicial

principles.

Where the plaintiff brings a suit for specific performance of contract

for sale, the law insists upon a condition precedent to the grant of decree

for specific performance that the plaintiff must show his continued

readiness and willingness to perform his part of the contract in

accordance with its terms from the date of contract to the date of

hearing. Normally, when the trial court exercises its discretion in one way

or the other after appreciation of entire evidence and materials on

record, the appellate court should not interfere unless it is established

that the discretion has been exercised perversely, arbitrarily or against

judicial principles. The appellate court should also not exercise its

discretion against the grant of specific performance on extraneous

considerations or sympathetic considerations. Under Section 20 of the

Specific Relief Act, a party is not entitled to get a decree for specific

performance merely because it is lawful to do so. Nevertheless once an

BY A. P. RANDHIR

agreement to sell is legal and validly proved and further requirements for

getting such a decree are established then the court has to exercise its

discretion in favour of granting relief for specific performance.

In the instant case the issue related to as to whether the

agreement (in question) of 1967 allegedly executed by the defendants,

could be enforced. In the agreement there was reference of earlier

agreement where some sum of money was paid to the defendant-

appellant which was denied and disputed. As mentioned above, the

previous agreement was neither filed nor exhibited to substantiate the

case of the plaintiff. The High Court placed reliance on the said

agreement written in a quarter sheet of paper merely because of the fact

that said quarter sheet of paper was produced before the Magistrate in a

criminal proceeding.

The view taken by High Court was held to be incorrect to the effect

that there was no reason to disbelieve the execution of the document

although it was executed on a quarter sheet of paper and not on a

proper stamp and also written in small letter. The High Court also

misdirected itself in law in holding that there was no need for the plaintiff

to have sought for the opinion of an expert regarding the execution of

the document.

BY A. P. RANDHIR

Various documents including order-sheets in the earlier

proceedings including execution case were filed to nullify the claim of the

plaintiff regarding possession of the suit property but these documents

were not been considered by the High Court.

The evidence and the finding recorded by the criminal courts in a

criminal proceeding cannot be the conclusive proof of existence of any

fact, particularly, the existence of agreement to grant a decree for

specific performance without independent finding recorded by the Civil

Court.

It was accordingly held that the present was not the fit case where

the discretionary relief for specific performance could be granted in

favour of the plaintiff-respondent. The High Court in the impugned

judgment failed to consider the scope of Section 20 of the Specific Relief

Act and the precedents.

8. Readiness and Willingness

8.1 Azhar Sultana versus B.Rajamani and others civil appeal No.1077 of 2009 Decided on February. 17,2009 2009 (1) SCCD 525 (SC)

Section 20 and 16 (c) Section 16 (c)” postulates continuous readiness

and willingness on the part of plaintiff '" It is a condition precedent for

obtaining a relief of grant of specific performance of contract.

BY A. P. RANDHIR

8.2 Faquir Chand and Others V. Sudesh kumari 2006 (3) Apex Court Judgment 259 (SC)

Lack of pleading--- provision does not require any specific phraseology.

Compliance with the readiness and willingness has to be in spirit and

substance and not in letter and form. Continuous readiness and

willingness could be seen from the conduct of the plaintiff as a whole.

9. Limitation Act, Article 54. (Suit for specific performance)

9.1 Raghuvir Singh Bhatty Vs. Ram Chandra Waman Subhedarreported in AIR 2002 Allhabad, 13

(A) Limitation Act (36 of 1963), Art. 54 – Suit for specific performance

of contract – Limitation – Permission of ceiling authority, pre-requisite for

execution of sale deed – sale deed to be executed only after intimation

to purchaser of grant of permission – Notice by vendor to purchaser that

contract had frustrated on account of refusal to grant permission by

Ceiling Authority – Limitation would start running from service of notice.

(B) Specific Relief Act (47 of 1963), Ss. 20, 16 – Discretion of Court –

Permission of Ceiling Authority, pre-requisite for execution of sale deed –

Refusal of permission by authorities – Contract frustrated on account of

failure to obtain permission – Subsequent repeal of Ceiling Act – Legal

hurdle of impossibility in enforcing contract thus removed – Decree for

specific performance can be passed.

BY A. P. RANDHIR

(C) Specific Relief Act (47 of 1963), S 16 – Time whether essence of

contract – Sale of immovable property other than commercial transaction

– Agreement to purchase land for building house for purchaser himself –

Mere fixation of period within which contract is to be performed – Not a

decisive test – No recital in agreement that parties intended time to be of

essence – It cannot be held that time was essence of contract. Contract

Act S. 55.

(D) Specific Relief Act (47 of 1963), S. 16(c) – Readiness and

willingness – Proof – Time not essence of contract – Mere delay in

absence of abandonment or waiver – Not a ground for inferring want of

readiness or willingness so as to refuse specific performance.

(E) Specific Relief Act (47 of 1963), S. 20 – Discretion of Court – Time

not of essence of contract – Clauses in agreement however, indicating

that contract had to be performed within reasonable time – plaintiff

contributing to the delay in execution of contract – Prices of property

escalating sharply in the meanwhile – defendant cannot be called upon

to execute the sale-deed.

(F) Specific Relief Act (47 of 1963), S. 21 – Compensation –

Determination – Sale deed to be executed within six months from date of

execution of agreement and during that period defendant-vendor was to

obtain permission from ceiling authorities – defendant however, not

BY A. P. RANDHIR

applying for such permission for three years – Contract frustrated due to

non-receipt of permission – Prices of property sharply escalating in

meanwhile – No evidence on record however, regarding market value of

property – Plaintiff allowed refund of earnest money together with

damages amounting to Rs.20,000/- and interest upon earnest money

from date of contract at the rate of 12% p.a. to date of payment Transfer

of Property Act, S. 54.

9.2 Harnam Singh Vs. Mangat Singh and anr. reported in AIR 2001

Punjab and Haryana, 257

Limitation Act, Art. 54- Suit for specific performance – Limitation –

Vendor entering into agreement of sale of land belonging to Central

Govt. as he was in its cultivating possession and policy of Central Govt.

was to allot such land to occupiers – Mutation of land sanctioned in his

favour – Notice by purchaser thereafter to vendor calling upon him to

execute sale deed – Suit filed within three years from date of receipt of

notice – Would be within limitation – As specific performance shall be

deemed to have refused when notice was received by vendor – Relief of

specific performance also cannot be refused on ground that suit was

filed after about 9 years from date of agreement as cause of action

BY A. P. RANDHIR

arose after mutation was sanctioned in favour of vendor.

Specific Relief Act (47 of 1963), S.13.

9.3 Sau. Shantabai Vs. Manakchand AIR 1988 BOMBAY, 82.

(A) Specific Relief Act (1963), S. 20 – Agreement to sell agricultural land

to plaintiff a non-agriculturist – Permission to be obtained by Vendor to

sell and to get land converted to non-agricultural user – Vendor not

taking steps as agreed – Held, that breach was on part of Vendor-

defendant.

(B) Specific Relief Act (1963), S. 20 – Evidence Act, S. 57 – Suit for

specific performance of agreement to sell land – Grant of damages –

Quantum – Court can take judicial notice of rise in prices of land. Civil

Procedure Code S. 34.

9.4 H.M. Krishna Reddy Vs. H.C.Narayana Reddy reported in 2001

Karnataka, 442.

(A) Limitation Act, Art. 54 – Suit for specific performance of contract –

Limitation – Starting point – Agreement of sale – Mentioning that vender

would execute sale deed “after repealing ban on registration by Govt.” -

Therefore, agreement did not fix date for performance of contract – Not

also mention an event “certain to happen” on happening of which

specific performance become due – Thus, time for filing suit for specific

BY A. P. RANDHIR

performance begins to run only when vendee had knowledge of vendor's

refusal to perform.

10. Specific Relief Act, Section 20(c)

10.1 Preetam Kaur Vs. Prakash Ramdeo Jaiswal [R.M. Savant, J.]

2011(6) Mh.L.J., 84.

A) Specific Relief Act, Section 20(c) – Specific performance of

agreement – Merely because there is rise in prices would not disentitle

the plaintiff to the right to specific performance of agreement – Court in

such cases would endeavour to balance the equities between the

parties, where there is an appreciation in the value of the land. 2010(6)

Mh.L.J.295 Relied.

10.2 AIR 1993 Madhya Pradesh 162 R. C. Lahoti, J.Premnarayan and

anr. Vs. Kunwarji and anr.

(A) Contract Act, S. 16 – Civil Procedure Code, Order 6 Rule 4 –

Contract of sale – Plea of undue influence – Absence of proof that

vendor is in position to dominate will of vendor – Onus not discharged –

Plea liable to be rejected. AIR 1967 SC 878, Rel.On.

(B) Transfer of Propery Act, Section 54 – Contract of sale – Passing

of title – Sale deed duly executed and registered – Payment of

consideration not made condition for passing of title – Title passes to

BY A. P. RANDHIR

vendee despite non-payment of price – Suit for possession by vendee

maintainable – Vendor has remedy of asking for payment of price.

Where the document on its face is a deed of sale, duly executed

and registered and it is not the plea of the vendor that title in the suit

property was not intended to be passed on to the vendee and was

postponed to be passed until the consideration was paid, even if the

possession was not delivered and the price was not paid, on the

contents of the document the title passed to the vendee. If the vendee

was deprived of possession he was well justified in asking for the same.

The remedy of the vendor lay in asking for payment of price.

11. EVIDENCE ACT SECTION 68 AND SPECIFIC RELIEF ACT SEC.10.

11.1 Asudamal Laxmandas Sindhi Vs. Kisanrao Wamanrao

Dharmale 2003(4) Mh.L.H., 134.

(A) Evidence Act, S. 68 – Execution of document – proof by

examination of attesting witnesses when necessary.

Only where there is a specific provision made in the Act requiring that

the document is to be attested then in such cases the examination of the

attesting witnesses is necessary as laid down in section 68 of the

Evidence Act. The finding of the appellate Court that though one of the

BY A. P. RANDHIR

attesting witness is alive, the original plaintiff was duty bound to examine

him to prove the execution of isarchitthi i.e. agreement of sale, was not

correct.

(B) Specific Relief Act, S. 10 and Bombay Tenancy and Agricultural

Lands (Vidarbha Region) Act, S. 89 – Suit for specific performance of

agreement of sale of agricultural land owned by defendant – Lack of

permission under section 89 not an impediment in passing a decree for

specific performance.

12. SPECIFIC RELIEF ACT SECTION 10 AND REGISTRATION ACT,SEC.49.12.1 Nirav Deepak Mode Vs. Najoo Behram Bhiwandiwala and ors.2012(3) Mh.L.J. 370.(a) Specific Relief Act, S. 10 and Registration Act, S. 49 Proviso - Suits

for specific performance can be filed upon unregistered document or

even upon an oral agreement – Lack of notarization or registration

cannot entitlement the plaintiff to the relief at least prima facie for

protection of the premises agreed to be purchased by the plaintiff.

(b) Specific Relief Act, S. 12 and Civil Procedure Code, O. 39 R.1 – Suit

for specific performance – Relief of injunction for protecting the suit

property is required to be granted, but only upon the plaintiff performing

his part of the contract, which the plaintiff is required to be ready and

willing to perform at all material times including at the time of filing the

BY A. P. RANDHIR

suit – This would be only upon payment of the entire consideration by

the plaintiff which is the only obligation that the plaintiff is required to

perform.

13. TRANSFER OF PROPERTY ACT, SECTION 53-A

13.1 Yuvrani Hansa Devi Vs. Jafar Farooq Vohara and anr. reportedin 2012(1) Mh.L.J, 302 (Mrs. Roshan Dalvi. J)

Transfer of Property Act, S. 53-A – Donctine of “part performance”

- Transferee put in possession in part performance of the contract must

show that he has paid up the full purchase price or that he was ready

and willing and able at all times to make payment of the entire price.

“Section 53-A of the Transfer of Property Act contemplates effectuating

the English doctrine of what is called 'part performance' under which

when the possession is obtained by a transferee in part performance of

the contract or when the transferee has already been put in possession

prior to his performance of the other part of the contract, the possession

is safeguarded under the doctrine. It envisages several conditions

precedent. The transferee has to show that he had taken or continued in

possession of the property, that he was willing to perform his part of the

contract and has undertaken some action in part performance of the

contract. Since a transferee in possession would require essentially only

BY A. P. RANDHIR

to pay the balance consideration, he has to show that he has paid up the

full purchase price or that he was ready and willing and able at all times

to make payment of the entire purchase price”. CPC O.26 R.9.

13.2 M/s. Satguru Construction Co. Pvt. Ltd. Vs. Greater BombayCo-op. Bank Ltd., [2007(5) AIR Bom R 37 (DB)

(A) Maharashtra Co-op. Societies Act, S. 156 – Maharashtra Co-op.

Societies Rules, R. 107 – Recovery certificate – Execution – Has to be

only in accordance with procedure contained in S.156 and R. 107 – And

Civil or Revenue Court will have no jurisdiction – As such, order of arrest

of appellants for non-payment of amount due passed by Civil Court, is

liable to set aside.

(B) Maharashtra Co-op. Societies Act, S. 163 – Recovery certificate –

Execution – Jurisdiction of Civil Courts – S. 163 clearly excludes civil

courts from exercising any jurisdiction to settle any disputes referred to

Co-operative Courts – And not pleading issue of jurisdiction at initial

stage will not clothe Civil Court with jurisdiction expressly barred.

13.3. Jijamata Sah. Sakhar Karkhana Ltd., Dusarbid Vs. SukhadeoRambhau Fulzade [ 2010(5) Mh.L.J., 431]

(A) Civil Procedure Code, S. 9 and Maharashtra Co-operative Societies

Act, S. 164 – Scope – Suit for recovery of sum from co-operative society

BY A. P. RANDHIR

– Transaction touching business of society – Civil Court had no

jurisdiction to entertain the suit since it was instituted without compliance

of requirements contained in section 164 of the Act.

(B) Maharashtra Co-op. Societies Act, S. 164 – Notice – Suit instituted

against society without pre-suit statutory notice and no waiver was

established before the Civil Court – Suit therefore correctly dismissed.

13.4 Gurudev Developers Vs. Kurla Konkan Niwas Co-op.Hsg.Society [2000(3) Mh.L.J., 131]

(A) Maharashtra Co-op. Societies Act, S. 164 – Suit against co-operative

housing society – Agreement entered into between plaintiffs Developers

and defendant-society touching business of society – No notice u/s 164

given by plaintiffs – Suit held not maintainable.

(B) Specific Relief Act, S. 14 – Development agreement by plaintiffs with

defendant co-operative housing society – Termination of agreement by

society – Suit for specific performance not maintainable as the

agreement could not be specifically enforced.

(C) Partnership Act, S. 69(2) – Suit by plaintiffs-Developers partnership

firm – Allegation of defendants on affidavit that partnership of plaintiffs

BY A. P. RANDHIR

was not registered on date of filing of suit not controverted – Suit not

maintainable.

14.Essence of Contract Relating to Immovable Property

14.1 Saradamani Kandappan v. S. Rajalakshmi and Ors in (2011) 12SCC 18

The Supreme Court of India in the recent judgment have tried to

address this question by calling upon the courts to revisit the principles

laid down by the court in the preceding judgments on same issue and

observed that as a general preposition of law time is not essence of

contract unless the parties to the contract intend to make time an

essential condition for the performance of contract. The court said that

parties to a contract may intend to make time an essence of contract by

expressly providing so or it can be inferred by necessary implication

from the conduct of parties or circumstance surrounding the

performance of contract. The court also said the general presumption of

law that time is not essence of a contract that is for sale of immovable

properties needs to be revisited as time forms an essential condition for

the performance of contract in circumstance of ever-increasing prices of

real-estate property which are bound to affect transactions of sale of

immovable property.

BY A. P. RANDHIR

These provisions of law come to rescue of the courts in deciding

questions as to whether obligations undertaken by parties under the

contract are to be performed as these provisions clearly indicate that

contracts shall be repudiated in cases where time is made essence of

contract and where the obligations undertaken by parties are not

performed within the said specified time. Time is the essence of contract

means that time is most essential condition of the contract for the

performance of the contract or completion of contract. The Supreme

Court of India have looked into the question of whether time is essence

of contract on different facts and situations and have provided some

principles of law to decide upon this question.

The following are some of the decisions of the apex court on

different facts in different decade that shall assist in explaining how the

apex court came to conclusion as mentioned in Saradamani Kandappan

v. S. Rajalakshmi and Ors in (2011) 12 SCC 18 and how the law

developed on this point.

14.2 Chandnee Widya Vati Madden v. Dr C. L. Katiai 1964 AIR (SC)

978

The Supreme Court of India in after looking into the terms of agreement

held that time was not essence of the agreement and reaffirmed the

BY A. P. RANDHIR

decision of the High Court decreeing specific performance of contract.

The agreement in question provided that vendor/seller-defendant should

obtain permission of the chief commissioner for the transaction of sale of

immovable property within 2 months of the agreement and in case

where permission was seen not to be forthcoming within the time

specified then it was open to purchaser to extend the date or treat the

agreement cancelled. The Court after looking into these express terms

of the agreement i.e. purchaser could extend time inferred that time was

not essence of agreement. The Court also looked into the fact that

purchasers of the property were willing to extend time and perform their

part of contract and it was seller who had wilfully refused to perform her

part of contract and therefore the apex court directed the seller to apply

to the chief commissioner for the performance of her part of contract to

complete the performance of contract.

The Supreme Court dealt with the same question as to whether

time is essence of contract in Chand Rani v. Kamal Rani in (1993) 1

SCC 519 also. In this case, the apex court held that in case of sale of

immovable property there is no presumption of law as to time being

essence of a contract however even in case where time is not essence

of contract then also the court may infer that it is to be performed in a

BY A. P. RANDHIR

reasonable time from the conditions of express terms of contract, from

the nature of property and from surrounding circumstance like object of

making contract. The court also held that even when parties to contract

have expressly provided time to be essence of contract then also such

stipulation will have to be read along with other terms of contract as on

proper construction of these terms may indicate towards excluding

inference that the completion of work by particular date was meant to be

fundamental.

14.3 K. S Vidyanadam V. Vairavan 1997 (3) SCC 1

The Apex court was faced with this question again in where the question

arose whether decree of specific performance of contract should be

granted in every suit where the suit is filed within limitation period

prescribed for filing of suit for specific performance and the agreement

for sale of immovable property do not provide time as essence of

contract thereby ignoring any time limits prescribed in the agreement.

14.4 A. K. Lakshmipathi and Ors v. Rai Saheb Pannalal H Lahoti

Charitable Trust and Ors in (2010) 1 SCC 287

The apex court in also dealt with the same question as to when time is

essence of a contract. The clauses in the agreement had provided that

BY A. P. RANDHIR

time was to be the essence of contract and provided that under all

circumstance, the purchaser/buyer was to make deposit of the balance

amount of consideration by the date specified in the agreement. The

agreement had also stipulated that buyer was to obtain clearance /

permission from the Endowment department. The Court relying upon

ratio of Chand Rani Case observed that as a general presumption of law

time is not essence of contract in case of sale of immovable property

unless parties intend to make it essence of contract or a contrary

intension is expressed. The court looked at the various clauses of the

agreement and observed that parties intended to and were aware from

beginning that time was essence of contract and the clauses clearly

stipulated payment of the balance amount was the essence of the

agreement and failure to make the said payment by the date stipulated

on account of whatsoever reason shall result in forfeiture of the earnest

money paid and shall further result in loss of any right held by the vender

in the scheduled property.

14.5 Saradamani Kandappan v. S. Rajalakshmi and Ors in (2011) 12

SCC 18

The next case that came up before the apex court was of wherein

the court tried to address the issue as to time being essence of contract.

BY A. P. RANDHIR

The agreement in question provided that balance consideration was to

be paid on some specified dates and in case of these being declared

holiday then it was to be paid on the next immediate working day. The

agreement also provided that failure to make the payment on specified

date shall result in vendor cancelling the agreement. The agreement

further provided that the sale deed shall be executed only at the

convenience of the purchaser only after he is satisfied in regard to the

title of the land and in case of her not being satisfied with the title then

shall put the vendor notice of it and vendor has to satisfy the purchaser

in regard to title and in case the vendor fails then vendor shall within 3

months from that date pay to the buyer all the money that was advanced

to him.

14.6 Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates

Private Limited and others in (2011) 9 SCC 147

The last important apex court decision in where the apex court

conclusively held on the issue of time as essence of contract. The court

observed that as settled position of law in case of specific performance

of contract relating to immovable properties, time is not normally

considered an essence of contract but this is not absolute preposition of

law and is subject to several exceptions. The court relying upon ratios

BY A. P. RANDHIR

laid down in its other decisions observed that time as essence of

contract can be inferred from nature of properties or terms of agreement

and held that in view of express terms of agreement time was intended

to be essence of contract.

-:::::THANK YOU:::::-

NOTE : This Article is useful for enrichment of legal knowledge on civil side. This

book contains only relevant paras of the judgments on each topic and readers are

requested to go through full text understand the ratio- decidendi laid down in the

judgments. For easy reference, citations have been referred to. As some judgments

are gathered from using Internet, the case numbers, names of the parties and date

of judgment are also noted for easy reference.