Gujarat High Court
Sanjaybhai Shashikantbhai Acharya vs Dhavalbhai Balkrishnabhai Raval on 28 March, 2025
NEUTRAL CITATION
C/FA/3970/2012 JUDGMENT DATED: 28/03/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3970 of 2012
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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Approved for Reporting Yes No
NO
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SANJAYBHAI SHASHIKANTBHAI ACHARYA & ANR.
Versus
DHAVALBHAI BALKRISHNABHAI RAVAL
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Appearance:
MS MEGHA JANI(1028) for the Appellant(s) No. 1,2
MR PARTH S TOLIA(5617) for the Defendant(s) No. 1
SHIRISHCHANDRA B TOLIA(8163) for the Defendant(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 28/03/2025
ORAL JUDGMENT
1. The present appeal is filed at the instance of the original plaintiffs under Section 96 of the Code of Civil Procedure, 1908 challenging the impugned judgment and order dated 31.10.2012 passed by the learned 15th Additional Senior Civil Judge, Rajkot in Special Civil Suit No.163 of 2010. By the said impugned judgment and order, the learned Judge has dismissed the suit preferred by the present appellants- original plaintiffs seeking specific performance of the registered agreement to sell dated 02.02.2010, against the defendant as well as relief for injunction and other consequential reliefs has also been refused.
2. In order to appreciate the controversy involved, the facts as emerged from the record are briefly summarized as under:
Page 1 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined 2.1. The dispute pertains to the residential premises situated in society called "Ravipark" Sheri No.9, Block No.90-A, Behind Prem Mandir, Kalavad Road, Rajkot (hereinafter referred as 'suit premises). The aforesaid residential scheme is developed on non agricultural land bearing originally revenue survey no.103 paiki, which was later on reduced to plots bearing no.1 to 7, 10 to 14, 18 to 21, 25 and 26, 28 to 32, 36 to 38, 41, 43 to 36. The defendant being owner of the aforesaid premises had entered into a registered agreement to sell dated 02.02.2010, whereby, the suit premises was agreed to be sold for consideration of Rs.13 lakhs. It is the case of the original plaintiffs that an amount of Rs.1,30,000/-
was paid as Bana amount towards such aforesaid consideration through cheque bearing no.107338 dated 02.02.2010 of Corporation Bank, University Road Branch, Rajkot. As per the terms and conditions of the aforesaid registered agreement to sell, it was agreed between the parties that upon approval of the loan applied for by the plaintiffs within the period of 7 days and 90 days from the date of execution of sale deed the remaining amount of Rs.11,70,000/- was to be paid. It was also agreed between the parties that the registered sale deed was to be executed thereafter at the cost of the plaintiffs and the defendant was to handover the peaceful and vacant possession in view of the sale deed to be executed in respect of the suit premises. It is further pleaded that on 02.02.2010, the plaintiff had applied for loan before the State Bank of India, Javahar Branch at Rajkot. The valuation report of the consulting Engineer viz.
Page 2 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined Suresh Mistri was sought for and one report dated 11.03.2010 was submitted before the concerned Bank. The title investigation report of one Natvarlal S. Bhatt dated 18.3.2020 was submitted before the concerned Bank. Upon processing the aforesaid document, the State Bank of India had approved the loan for an amount of Rs.10 lakhs on 23.3.2010. The original plaintiff has further pleaded that he was always ready and willing to perform his part of the contract. The averments are also made to the effect that the house owned by the plaintiff at Janta Society, Rajkot was sold by him, however, because of the breach of the agreement to sell being committed by the defendant, the plaintiffs were constrained to reside with their relative( plaintiff's no.1 brother). The plaintiffs alleged that on various occasions they had approached the defendant, even through one land broker Chandresh Kanani, for execution of the registered sale deed as agreed. Lastly, they were constrained to send a legal notice through their advocate on 12.06.2010, which was sent through registered Post A.D as well as through UPC and which has been duly served upon the defendant, however the defendant has failed to act as agreed upon. The reference was also made to the notice sent through courier on 21.08.2010, however, in absence of any response given by defendant, a cause of action arose for plaintiffs to approach to Court of learned Civil Judge seeking performance of the aforesaid agreement to sell as well as for other ancillary reliefs.
3. Noticing the aforesaid facts of the case, the learned Judge had issued summons upon the defendant which has been duly Page 3 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined served. The summons issued by the Court has in fact been accepted by the father of the plaintiffs as evident from Exh.10 and Exh.11. The defendant had appeared before the Court as evident from Exh.12 on 21.09.2000, whereby, he had prayed for an adjournment, however thereafter the defendant had neither appeared in person nor through his advocate. The proceedings had been conducted ex-parte by the trial court. In absence of the written statement, the learned Judge proceeded to frame the issue at Exh.23 by taking into consideration the pleadings as averred in the plaint. The issues framed at Exh.23 reads as under:
"1. Whether the plaintiff prove that despite execution of the agreement to sell without possession and the despite readiness and willingness of the plaintiff, the defendant has failed to abide by the agreement to sell ?
2. Whether the plaintiff proves that he is entitled to the specific performance of the agreement?
3. Whether the plaintiff is entitled to the reliefs prayed for ?
4. What order and decree ?"
3.1. Before the trial Court the plaintiff no. 1 has entered into the witness box and his evidence has come on record at Exh.27. Apart from his oral evidence, the plaintiff has also led various documentary evidence. The details of which are reproduced as under:
Exh. No. Particulars
Receipt of registered sale deed of the
29
defendant.
30 Copy of registered sale deed of the defendant
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NEUTRAL CITATION
C/FA/3970/2012 JUDGMENT DATED: 28/03/2025
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bearing registration no.4735.
Receipt of supplementary sale deed of the 31 defendant.
Copy of the supplementary sale deed of
32
defendant bearing no.5442.
33 Extract of entry of the property card.
34 Copy of village form no.8A of the defendant.
Copy of the village form no.6 having entry of 35 the defendant.
36 Receipt of the revenue tax paid.
Development permission granted by the Rajkot 37 Municipal Corporation in respect of suit premises.
Layout plan approved by the Rajkot Municipal 38 Corporation in respect of suit premises. Receipt acknowledging the payment of tax 39 issued by the Rajkot Municipal Corporation. Copy of the registered agreement to sell without possession executed by the defendant 40 in favour of plaintiff bearing registration no.1727 The compare copy of the extract of passbook of 41 the corporation bank of the account of the plaintiff bearing no.6154 Valuation report issued by the consultant 42 agency of one Sureshbhai Mistry 43 Title investigation report issued by N S Bhatt Letter communicating about the approval of 44 loan issued by Javahar Branch, State Bank of India addressed to the plaintiff.
Page 5 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined Letter address by the Javhar Branch, State 45 Bank of India to the plaintiff.
No due certificate issued by the State Bank of 46 India in favour of the plaintiff.
Letter about no due certificate issued in favour 47 of the plaintiff addressed by the State Bank of India The copy of the advance cheque bearing 48 no.599321 issued by the plaintiff to the concerned bank.
Copy of the advance cheque bearing no.599322 49 issued by the plaintiff to the concerned bank. Copy of the advance cheque bearing no.599323 50 issued by the plaintiff to the concerned bank. Copy of the advance cheque bearing no.599324 51 issued by the plaintiff to the concerned bank. Copy of the advance cheque bearing no.599325 52 issued by the plaintiff to the concerned bank. Copy of the advance cheque bearing no.599327 53 issued by the plaintiff to the concerned bank Compare copy of joint Savings Account bearing 54 no.31048309340 of the plaintiff.
Copy of notice addressed by the plaintiff to the 55 defendant sent by registered post AD The acknowledgment slip issued by the postal 56 department.
Copy of the acknowledgment slip of the postal 57 department with endorsement of refusal. 58 The seal cover bearing endorsement of refusal. 59 Receipt issued by the postal department of Page 6 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined notice sent through UPC 60 Notice sent to the defendant through courier. 61 Cover having notice re-sent by the courier.
Copy of the sale deed bearing no.17989 of 62 house of Janta Society.
Copy of the sale deed bearing no.17994 of 63 house of Janta Society.
64 Court Commissioner panchnama.
65 Closing pursis.
3.2. The learned Judge upon overall appreciation of the aforesaid evidence in light of the submissions made by the original plaintiff has proceeded to decide and answered the issue framed at Exh.23. The learned Judge has decided issue no.1 and 2 together. The learned Judge mainly upon appreciation of the terms and conditions of the registered agreement to sell produced on record at Exh.40 has essentially taken into consideration the condition no.1 and has arrived at a finding that time was the essence of the contract. While analyzing condition no.1 the learned Judge has noticed that as per the aforesaid conditions remaining amount of sale consideration was agreed to be paid by the plaintiff within a period of 90 days from the date of execution of the registered agreement to sell. In fact, upon close reading of the aforesaid conditions, the parties have precisely agreed to confine the aforesaid period within the period of 7 days from the date of approval of the loan. By considering the aforesaid condition, the learned Judge has further noticed that the maximum period of 90 days was agreed to be reckoned from the execution of the agreement to sell which is 02.02.2010 and Page 7 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined therefore the last date agreed was 03.05.2010. As against the aforesaid period, the first notice issued upon by the plaintiff to the defendant was dt. 12.06.2010, which is produced on record at Exh.25. Thus, the learned Judge has arrived at a conclusion that after expiry of the maximum outer limit of the period of amount, the plaintiff had sought for specific performance of the agreement by the defendant. While appreciating the contention of the plaintiff as regards approval of loan relevant document being produced on record at Exh.44 and 45, the learned Judge has noticed that loan was approved as evident from the letter addressed by the State Bank of India to the plaintiff on 23.03.2010 and therefore, considering condition no.1, the term period of 7 days would end on 30.03.2010. By considering the aforesaid aspect, the learned Judge has arrived at a conclusion that no evidence worth has been brought on record by the plaintiffs to indicate that the remaining amount of consideration was offered to the defendant and he has refused to accept such remaining amount of consideration or to execute the sale deed in favour of the plaintiffs. Even appreciating the case of the plaintiffs, the first instance of the refusal of execution of the sale deed as evident from the notice dated 12.06.2010 is produced on record at Exh.55. Having noticed the aforesaid circumstances, the learned Judge has further taken into consideration Section 55 of the Indian Contract Act, 1872 and has held that in fact the plaintiffs have not acted as per the terms and conditions of the agreement to sell and therefore, no fault can be found with the defendant having refused to execute the registered sale deed as in light of the aforesaid provisions, the Page 8 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined agreement to sell stand cancelled and ceased to exists.
3.3. As regards the issue nos. 3 and 4, the learned Judge has noted that condition no.1 was the essential condition and the plaintiffs having failed to abide by the aforesaid condition, by performing their part of contract in the time period agreed between the parties, the defendant cannot be compelled to perform his part of contract. The learned Judge has also considered the provision of Specific Relief Act, more particularly, relief sought for being equitable in nature, no directions can be issued against the defendant to enter into a sale deed. The learned Judge has noticed that no evidence worth has been brought on record to suggest that the attempt was made by the plaintiffs within the period agreed by performing their part of contract and to pursue the defendant to accept the remaining amount of consideration and to execute the sale deed. With the aforesaid findings and reasons assigned, the learned Judge has proceeded to dismiss the suit thereby refusing the relief of specific performance in respect of suit premises. Hence, the present appeal at the instance of the original plaintiffs.
4. Ms. Megha Jani, learned advocate has appeared on behalf of the appellant and Mr. Shirish Tolia, learned advocate with Mr. Parth Tolia has appeared on behalf of respondent. Noticing the grounds raised in the appeal, this Court by order dated 26.12.2012 had issued notice upon the respondent. In the application for stay by order dated 26.12.2012, the ad- interim relief was granted by this Court, whereby, the Page 9 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined respondent was restrained from selling, mortgaging, leasing or dealing with the suit premises in any manner and was also restrained from handing over the possession of any part of the suit premises and from making or creating any document with respect to the sale and / or by effecting any change in the revenue entries of the suit property. Subsequently, by order dated 27.08.2013 this Court had admitted the appeal and had confirmed the aforesaid ad interim relief pending the appeal.
5. The matter was pressed for final hearing by the appellants and the learned advocates for the parties have cooperated for final hearing of the matter. Learned advocates for the respective parties have placed on record their written submissions along with a list of authorities as relied upon during the course of argument.
6. Ms. Megha Jani, learned advocate for the appellants has vehemently submitted that the learned Judge committed serious error in dismissing the suit by treating the time being essence of the contract in the facts of the case.
6.1. At the outset, she has invited the attention of the Court that despite the service of summons and the defendant having appeared on the first date of hearing before the trial Court, had chosen not to contest the suit by filing any written statement or by leading any evidence. She has therefore submitted that the averments made in the plaint and the evidence led by the plaintiffs has remained uncontroverted. She has further submitted that merely in absence of any Page 10 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined challenge being made to the case of the plaintiffs, the trial Court may not straightway entertain the suit, however in absence of any defence being raised by the defendant raising the issue of time being essence of the contract and in absence of any specific issue being framed in this regard, the learned Judge ought not to have raised the aforesaid issue.
6.2. To contradict the findings and reasons assigned by the learned Judge, she has submitted that it is a settled legal position that in case of immovable property time is not the essence of the contract. In any case, even assuming for the sake of consideration that the learned Judge could have examined the aforesaid issue without framing the same, looking at the recitals of the agreement to sell, more particularly, reading of condition no.1 of the registered agreement to sell, time was not treated as essence of contract by the parties. Learned advocate have invited my attention to the relevant dates. She has pointed out that the loan was sanctioned on 23.3.2010 as evident from the document produced on record at Exh.44. She has further pointed out that the period of 90 days from the date of agreement as agreed and reflected in condition no.1, would expire on 02.05.2010. She has therefore, submitted that prior to the period of expiry agreed between the parties, the term loan of Rs.10 lakhs was sanctioned. The aforesaid documents were sufficient to corroborate the case of the plaintiff that he was ready and willing to perform his part of the contract. She has further submitted that she had waited for the defendant to perform his part of the contract till 2.5.2010. According to Page 11 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined her, any prudent man would rely upon the assurance given by the party to the agreement for reasonable period and would not immediately proceed for issuance of legal notice considering the relations with the respondent, the present appellant - original plaintiff waited for reasonable time and was constrained to the issue notice on 10.06.2010. The attention of this Court was invited to the averment of the aforesaid notice. She has invited my attention to the fact that the aforesaid notice was sent through registered Post AD. The postal receipts and acknowledgment receipts confirms the fact that notice has been duly served upon the respondent, however the respondent has failed to respond to such notice. In fact, the respondent has refused to accept such notice as evident from acknowledgement slip produced at Exh.57. The reference was also made to the UPC receipt dated 16.6.2010 produced on record at Exh.59. Learned advocate has also referred to and relied upon the second legal notice addressed to the respondent on 21.08.2010 produced on record at Exh.60 which was sent through courier. She has further pointed out in fact the original seal cover of the aforesaid notice sent through courier, has been produced on record at Exh.61. Despite repeated notice being served upon the respondent, the original defendant had chosen to not to reply to such legal notice. At this stage, she has submitted that admittedly agreement to sell is a registered document. At the most, the defendant could have revoked such agreement to sell while responding to such legal notice. Even on expiry of period of 90 days as considered by the learned Judge from the date of execution of the aforesaid agreement to sell in view of Page 12 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined condition no.1 of the said agreement, the defendant would have immediately addressed communication to the plaintiffs asking the plaintiff to perform his part of contract or alternatively he could have terminated agreement to sell either by forfeiting earnest money or by returning the same for the reasons best known, the respondent- original defendant has chosen not to opt either of the aforesaid options. He has merely pocketed 10% of the consideration amount and has remained silent all throughout while refusing to accept the notice and not addressing a single communication and having failed to appear before the trial Court.
6.3. By highlighting aforesaid conduct of the respondent - original defendant, she has submitted that the learned Judge has committed serious error in applying Section 55 of the Indian Contract Act in these facts of the case. While referring to Section 55 of the Indian Contract Act, learned advocate has submitted that in absence of any intention of the respondent or any declaration treating the contract to be void or terminated, the agreement to sell which is a registered document could not have been treated as voidable by the learned Judge by invoking provisions of Section 55 of the Indian Contract Act, 1872.
6.4. In this regard, learned advocate has placed reliance upon the judgment of the Hon'ble Supreme Court in the case of Govindprasad Chaturvedi vs. Haridutt Shashtri and another reported in (1977) 2 SCC 539 to contend that Page 13 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined fixation of the period within which the contract has to be performed does not make the stipulation as to time, the essence of the contract, more particularly when a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract.
6.5. The reliance was also placed on the judgment of the Hon'ble Supreme court in the case of Babasaheb Dayandeo Naik vs. Appasaheb Dattatraya Pawar reported in (2008) 4 SCC 464. While referring to the Constitutional Bench decision in the case of Chand Rani vs. Kamal Rani reported in (1993) 1 SCC 519, the Hon'ble Constitutional Bench held that general presumption is that in case of sale of immovable property time is not an essence of contract unless contrary intention is expressed in unequivocal language. The relevant observations made by the Hon'ble Supreme Court while referring to the case of Swarnam Ramachandran (Smt.) and Another vs. Aravacode Chakungal Jayapalan, reported in (2004) 8 SCC 689, in para 12, the Court noted that the onus to plead and prove that time was the essence of the contract is on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence.
6.6. While referring to the aforesaid observations, learned advocate has submitted that in the facts of the case the proceedings were conducted ex-parte before the trial Court and hence no defence was raised on the aforesaid aspect, however what is important is extending opportunity to Page 14 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined produce on record the rebuttal evidence to satisfy the trial Court that time was not essence in the facts of the present case. She has further submitted that the aforesaid issue is not framed specifically rather it is transpired only at the stage of judgment. She has therefore submitted that the vital right of the appellant- original plaintiffs has been prejudiced.
6.7. With regard to contract being treated as voidable in light of Section 55 of the Contract Act, 1872, she has placed reliance upon the judgment of the Hon'ble Supreme Court in the Hindustan Construction Co vs. State of Bihar reported in AIR 1963 Patna 254. While analyzing Section 55 of the Contract Act, the Court noted that even where time is essence of contract, it is only voidable at the option of the promisee and does not come to end by itself after expiry of period. The Court noted that the promisee has to terminate it by proper notice as provided under Section 66 of the Act of 1872, otherwise the option to avoid contract deemed to have been waived and contract subsists. She has further pointed out that in fact the Court noted that such intention has to be explicitly expressed in the agreement itself. However in cases where the intention is not explicit, it can also be inferred from the antecedent conduct of the party in surrounding circumstances but not from the subsequent conduct of the parties after the contract was made. Reliance was also placed on the decision of the Andhra Pradesh High Court in the case of Tandra Venkata Subramanayam vs. Vegesana Viswanadharaju reported in AIR 1968 Andhra Pradesh
190. The Court has held that even if by conduct of the parties, Page 15 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined the contract becomes voidable, however there is no automatic termination of the contract in light of the unambiguous words as provided in Section 64 of the Act of 1872. The irresistible conclusion was drawn that the contract was to be terminated before proceeding with any third party transaction.
6.8. While referring to the judgment delivered by the Karnataka High Court in the case of K. Kallaiah vs. Ningegowda reported in AIR 1982 Karnataka 93, learned advocate has submitted that the Court has reiterated the two essential principles while following the decision of the Hon'ble Supreme Court in the case of Govind Prasad (supra). Firstly, that where a contract relates to sale of immovable properties, normal presumption would be that time stipulated in the contract will not be treated as essence of the contract and secondly, when plaintiff proves that time is not essence of the contract, the defendant does not deny the same, a Court is bound to accept the plea of the plaintiff. The Court noted that the second principle is based on the law of pleading incorporated in Rule 3,4 and 5 of the Order VIII of Code of Civil Procedure. She has further pointed out that the Court noted that the defendant had not denied the assertion of the plaintiff that the time was not the essence of the contract. The Court held that in such cases the Courts below were bound to hold that the time was not the essence of the contract and in holding to the contrary were committing substantial error of law.
6.9. By referring to the aforesaid legal position, learned Page 16 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined advocate has submitted that the cogent material has been brought on record before the trial Court to satisfy that the plaintiff was always ready and willing to perform his part of the contract. She has further urged this Court to take into consideration the surrounding circumstances, more particularly, the fact that the plaintiff no.1 was a salaried employee having a monthly salary of Rs.30,000/- per month. Such a fact is borne out from the bank statement produced on record at Exh.41. She has further submitted that admittedly the loan of an amount of Rs.10 lakhs was sanctioned while considering the statement of accounts and the loan amount sanctioned by the Bank, the plaintiffs were financially competent to make payment of remaining amount of Rs.11,70,000/. She has further pointed out that two residential properties belonging to the plaintiffs were also sold, the amount of which has been realized as evident from the relevant entries reflected in the statement of accounts of the concerned bank. By making aforesaid submissions, she has submitted that the plaintiffs had successfully demonstrated before the trial Court that their paying capacity and therefore, readiness and willingness capacity could have been ascertained from the aforesaid comprehensive evidence.
6.10. She has further submitted that once the loan was sanctioned, it would be very easy for the plaintiffs to get money disbursed again. However, in absence of any cooperation from the defendant to proceed with the execution of the registered sale deed, they withdrew from the loan and accordingly the concerned Bank had issued no due certificate, Page 17 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined which is produced on record at Exh. 46. By making the above submissions, the learned advocate has invited my attention to the findings and reasons assigned, and has submitted that the aforesaid facts have not been appreciated by the trial Court in its right perspective.
6.11. She has further submitted that the learned Judge committed serious error in recording the finding that the registered agreement to sell produced on record at Exh.40 ceased to exist by treating it as having become voidable in light of the conduct of the respondent. In fact, there is nothing on record to suggest that the respondent - original defendant had declared his intention treating such registered documents to be cancelled.
6.12. While summarizing her submission, the learned advocate has reiterated that the learned Judge has committed mainly three errors, firstly in deciding the issue of time being the essence of contract in the facts of the case in absence of any separate issue being framed in this regard. Secondly, by misreading the terms and conditions of the agreement requiring the plaintiffs to give notice within a period of 7 days from the date of sanction of the loan and thirdly by treating the agreement to sell as being not in existence by erroneously applying Section 55 of the Contract Act in the facts of the case.
7. Mr. Tolia, learned advocate has appeared on behalf of the Page 18 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined respondent and has supported the findings and reasons assigned by the learned Judge by submitting that no error can be found with the approach of the learned Judge in dismissing the suit for specific performance, more particularly, when the plaintiffs have committed breach of agreement to sell. While referring to the relevant dates and events, learned advocate has pointed out that the condition no.1 stipulated in the agreement to sell executed on 02.02.2010 explicitly provided that the remaining amount of Rs.11,70,000/- was to be paid within the period of 90 days from the date of agreement. It further prescribed that in the event the loan is sanctioned in favour of the plaintiffs then such remaining amount was to be paid within the period of 7 days from the receipt of loan amount. The reading of the aforesaid conditions, according to learned advocate, clearly indicate the timeline was accorded and fixed between the parties to perform their part of obligation. He has further submitted that indisputably the plaintiff had applied for loan on 02.03.2010 for an amount of Rs.10 lakhs which was sanctioned by the Bank on 23.03.2010. Thus, as per the condition no.1 of the agreement to sell, the plaintiff was required to pay the remaining amount by 30.03.2010. At the most, reading of condition no.1 outer period of the payment of remaining amount of agreement to sell could have been extended upto 03.05.2010. However, for reasons not clarified by the plaintiffs, the plaintiff had failed to make payment of the remaining amount in either of this contingency. On the contrary, the evidence has been brought on record by the plaintiff, more particularly, no due certificate issued by the Bank at Exh.46, wherein, it clearly transpires Page 19 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined that the plaintiffs have returned the amount to the Bank on 21.05.2010, which is after the expiry of the aforesaid period. He has therefore submitted that the plaintiffs have miserably failed to prove their case of readiness and willingness to seek decree of specific performance in their favour. As regards the submissions made by the learned advocate for the appellants about their financial capacity to meet with the payment of the consideration against the agreement to sell, learned advocate has submitted that what was essential was to fulfill the obligation within the prescribed time period, failing which, the agreement to sell stood cancelled. Learned advocate has further submitted that the plaintiffs claim to have sold their two residential houses, would fail insignificant as the same were sold after the period of agreement to sell had expired. He has further contended that in fact the plaintiffs had sufficient opportunity to issue a notice on or before 03.05.2010, in case, if the case of the plaintiffs has to be believed about being readiness and willingness to perform their part of the contract. Indisputably, no evidence has been brought on record in the form of notice or communication addressed by the plaintiffs prior to 03.05.2010. He has further pointed out that though the plaintiffs claims to have sold two properties by registered sale deed on 12.07.2010, however the same has not been brought to the notice of the defendant. Learned advocate has also referred to the deposition of the plaintiff no.1 at Exh.27 to point out that he had clearly deposed on oath before the trial Court that he did not withdraw the amount of loan from the bank though sanctioned. While inviting my attention to the date on which Page 20 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined the suit was filed i.e. 18.09.2010, the learned advocate has further submitted that at no point of time the plaintiffs have paid the remaining amount of consideration to the defendant. He has further submitted that even before the trial Court no such amount of consideration was offered or deposited before the Court. No material worth has been brought on record to suggest that the defendant had at any stage refused to accept such an amount. As regards the submission made by the learned advocate about no issue being framed on time being the essence of contract, the learned advocate has submitted that though the proceedings were conducted ex-parte, no objection was raised by the plaintiff before the trial Court with regard to issue being framed. Thus, according to him, issue no.1 covers the issue of time being the essence of contract. Hence, no error can be found with the approach of the learned Judge who has proceeded to decide the issue of readiness and willingness in context of time being the essence of contract and has rightly decided against the plaintiff. Inviting my attention to the evidence produced on record by the plaintiff, the learned advocate has submitted that no independent witnesses have been examined to establish their case. He has further submitted that when the loan amount was sanctioned on 23.03.2010, there was no reason for the plaintiffs to withdraw such loan amount, if plaintiffs were ready and willing to proceed with the execution of the sale deed by offering such amount within the period of 7 days as stipulated in the agreement, which could have been extended till May, 2010, in light of the condition no.1. The reliance was placed on the findings and reasons assigned by the trial Court Page 21 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined while adjudicating the issue of time being the essence of the contract as well as Section 55 of the Indian Contract Act. Lastly, learned advocate has submitted that the performance of the agreement sought for was in respect of residential premises which belonged to the defendant. Noticing the conduct of the plaintiffs, the Court has exercised its judicial discretion in light of Section 20 of the Specific Relief Act, 1963 as prevailed at relevant point of time. He has therefore submitted that thereafter sufficient time has lapsed and the value of the property has been thereafter multiplied. He has therefore urged this Court to not to interfere with the impugned judgment and order. The reliance was placed on the following judgments:
(1). Sikandar (Decd) by Lrs vs. K. Subramani reported in (2013) 15 SCC 27.
(2). Citadel Fine Pharmaceuticals vs. Ramaniyam Real Estates Pvt. Ltd reported in (2011) 9 SCC 147. (3). Chand Rani vs. Kamal Rani reported in (1993) 1 SCC 519.
8. Considering the arguments canvassed by learned advocates appearing for the respective parties and the legal propositions pressed, the following points of determination arise for consideration of this Court in the present appeal:
"(1) Whether the trial court committed any error in facts and/or in law by holding that time was essence of contract, in the facts and circumstances of the case?Page 22 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025
NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined (2) Whether the trial court committed any error in holding that the plaintiffs were not ready and willing to perform their part of the contract?
(3) Whether the trial court committed any error in denying specific performance of agreement to sell in favour of the plaintiffs?"
TIME IS ESSENCE OF CONTRACT:
9. Before examining the question no.1, it would be appropriate to first deal with the submissions made by learned advocate for the appellants that whether the trial court committed any error in deciding the aspect of time being the essence of contract without framing distinct issue in this regard. Looking to the provisions of the Order XIV Rule 1(5) of the Code of Civil Procedure, 1908, essentially it is the fundamental function of the Court to frame the issues upon reading the plaint and written statements.
10. In case of Maddala Sai Lakshmi vs. Medisetti Lakshmi Narasamma And Ors. reported in 2006 (3) ALT 708, the Court held that "before commencement of trial, suit be posted to a specific date for hearing both the sides on the issues already framed to see if they have been properly framed or if any re-fraiming of issues is needed on the core issues in Page 23 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined dispute. Trial be commenced only after such exercise".
Considering the aforesaid legal position, admittedly the defendant, despite service of summons, has chosen not to appear before the trial court and the proceedings have been conducted ex parte. Thus, the trial court was assisted all throughout by the plaintiffs. Looking at the issues framed at Exh.23, as rightly pointed out by learned advocate for the appellants, no separate distinct issue as to whether time was the essence of contract, has been framed by the trial court. The question, therefore, arises as to whether a Court can go into the question and decide any aspect without framing distinct issues in this regard.
11. At this juncture, it would be appropriate to refer to the position of law which is well settled that where parties adduce evidence in respect of a matter for which an issue has not been struck and both sides are well aware of the dispute which relates to the issue, the defect of non- framing of the issue is cured and there will be no inherent lack of jurisdiction in the Court to go into that question and decide that aspect of the matter. It was observed in Kali Prasad v. M/s. Bharat Coking Coal Ltd., AIR 1989 SC 1530, in para 18 thus:
"It was, however, urged for the appellant that there is no proper pleading or issue for determination of the aforesaid question and the evidence let in should not be looked into. It is too late to raise this contention.
The parties went to trial knowing fully well what they Page 24 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined were required to prove. They have adduced evidence of their choice in support of the respective claims. That evidence has been considered by both Courts below. They cannot now turn round and say that the evidence should not be looked into. This is a well accepted principle."
Thus, the Court held that once the evidence is adduced on record touching the issue, non-framing of a particular issue, would be immaterial.
12. It is clear that if the evidence is available on record and the Court finds that it can go into a question even if the issue is not framed from that question, the Court can decide that aspect of the matter. Even otherwise, looking to the findings and the reasons assigned by the learned Judge in the facts of the case, the aforesaid issue as to whether time being essence of contract has a bearing with regard to the issue of readiness and willingness of the plaintiffs to perform their part of contract, which has otherwise been distinctly framed as issue no.1 by the trial court. In the opinion of this Court, the issue of time being the essence of contract is interwoven with the issue of the readiness and willingness of the plaintiffs to perform their part of contract. Hence, the non-framing of a distinct and separate issue as to time being the essence of contract, in no manner prejudices the case of the plaintiffs.
13. This brings me to the core point of determination as to whether the trial court committed error in facts or in law that time was the essence of contract in the facts of the case.
Page 25 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined In order to appreciate the aforesaid question, appropriate would be to look into the core condition no.1 of the agreement to sell (Exh.40). The condition no.1 provides that towards the payment of total sale consideration of Rs.13 Lakhs of agreement to sell of subject property, after deduction of Rs.1,30,000/- of paid Bana amount, the purchaser has agreed to pay remaining amount of Rs.11,70,000/- to the seller within a period of 7 days from the sanction of loan or 90 days from the date of execution of agreement, and on such payment, the purchaser shall be entitled to get execute the registered sale deed, and the seller would be under obligation to hand over peaceful, vacant, actual and undisputed clear possession of the subject property to the seller. Thus, looking to the aforesaid stipulation, the parties have mutually agreed as regards the timeline for performance of the contract. There cannot be any dispute to the settled legal position. Normally, it is presumed that when a contract relates to sale of immovable property, time is not the essence of the contract. The reading of the condition no.1 of the agreement to sell, clearly indicates that the payment of remaining amount of sale consideration of Rs.11,70,000/- was to be made within a period of 7 days from the date of sanction of loan and the outer limit was agreed for 90 days from the date of execution of agreement to sell i.e. 90 days from 02.02.2010.
14. In other words, the parties have mutually agreed to enter into the registered agreement to sell upon payment of full amount of consideration, which was to be paid in the aforesaid stipulated time period. As regards submission made Page 26 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined by learned advocate Ms. Jani for the appellants that mere stipulation of timeline cannot be a criteria to treat time being the essence of contract. However, from the analysis of the case laws right from the decision of the Constitutional Bench in the case of Chand Rani (supra), which has referred to and followed their earlier judgments pronounced in cases of Jamshed Khodaram Irani (supra), Gomthinayagam Pillai (supra), Govindprasad Chaturvedi (supra) and Hindustan Construction Contractors (supra), it can be discern that even if the contract expressly reflects the intention of the parties to treat time as fundamental, the same has to be read along with other provisions of the contract as well as from the nature of the property involved in the transaction and the surrounding circumstances to determine as to whether actually time was the essence of contract. In other words, where there is clear and unequivocal stipulation about time being the essence of the contract, the same has to be treated as a vital condition to be adhered to for a party seeking specific performance of contract. However, in cases where there is ambiguity in language and though being incorporated, the same being required to be read along with other provisions, then the above stated criteria comes into play. Thus, there is no straight jacket formula to be applied and the proposition of law has to be considered in light of the facts of each case.
15. Applying the aforesaid principles in the facts of the case, the appreciation of other provisions of the agreement to sell (Exh.40), it is found that there is no expressive provision Page 27 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined being incorporated with regard to the consequences to follow in case of failure or breach of the contract by either of the parties to abide by the aforesaid time framed for example repudiation of the contract, waiver/forfeiture of the earnest money, extension of time. At the same time, it cannot be ignored that the subject matter is residential premises. In the agreement to sell, there is reference to the housing loan availed by the respondent-owner of the subject property, which he was required to be cleared before entering into the registered sale deed. Taking into consideration the expressive language reduced in writing in context of the aforesaid circumstances, leads to the inference that time was made the essence of contract. As can be gathered from the record, the agreement to sell was executed on 02.02.2010, the outer limit for performance of the obligation by making payment of the remaining amount of consideration was fixed to 7 days from the date of the loan sanctioned or 90 days from the date of execution of agreement to sell i.e. 02.05.2010. Indisputably, the loan amount was sanctioned on 23.03.2010 and the period of 7 days expired on 31.03.2010. However, on 21.05.2010, the loan amount was liquidated. It is evident from the record that the legal notice seeking performance of agreement was issued by the appellant on 12.06.2010, whereas the suit was filed on 18.09.2010. Thus, in both the eventualities, the appellants- original plaintiffs failed to adhere to timeline as stipulated in condition no.1 of the agreement to sell.
Section 55 of the Indian Contract Act, 1872:
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16. This brings me to the second limb of the argument of learned advocate appearing for the appellants that the learned Judge committed error in invoking Section 55 of the Indian Contract Act, 1872, in the facts of the case. Section 55 of the Indian Contract Act provides that when time is of essence of contract then failure to perform within stipulated time renders the contract voidable at the option of the promisee. In other words, once the time is stipulated in the contract, the parties are under obligation to adhere to the same, failing which, the contract is rendered voidable at the instance of the promisee.
17. The question further arises as to whether the agreement to sell in such an event stands repudiated at the instance of the respondent-original owner. The plain reading of Section 55 of the Indian Contract Act confers the right upon the party to treat the contract as voidable in breach of the conditions of the contract by the other side. Such an option can be exercised by the first party either expressly or in the conduct.
In the facts of the case, the respondent-original defendant/owner has failed to respond to the legal notice dated 12.06.2010 and the subsequent notice issued on 21.08.2010 by the appellant-original plaintiff. In other words, the respondent-original defendant had refused to treat the contract in existence.
18. For the foregoing reasons, I am of the view that no error can be found with the approach of the trial court in treating the time being essence of the contract. As regards the Page 29 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined judgement relied upon by the Learned Advocate for appellants, there cannot be any dispute to the legal propositions laid down, however, the same has been laid down in the facts of the case and for the reasons above stated, the same shall not be applicable in the facts of the present case.
READINESS AND WILLINGNESS TO PERFORM
CONTRACT:
19. This brings me to the second point for determination as to whether the trial court committed any error in holding that the plaintiffs were not ready and willing to perform their part of the contract.
Recently, the Hon'ble Supreme Court in the case of R. Kandasamy (Since Dead) & Ors. vs. T.R.K. Sarawathy & Anr. reported in 2024 INSC 884, while emphasizing on the requirement of pleadings and proof as regards readiness and willingness to perform the part of the obligation of the plaintiff to succeed in a suit for specific performance, considered their earlier decisions which culled out what is implied by the words "ready and willing". The relevant observations are reproduced hereunder:
"20. In C.S. Venkatesh vs. A.S.C. Murthy, this Court on consideration of various decisions culled out what is implied by the words "ready and willing". It was held:
"16. The words 'ready and willing' imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far as they depend upon his performance. The continuous Page 30 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of performance. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of 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. The amount which he has to pay the defendant must be of necessity to be proved to be available. Right from the date of the execution of the contract till the date of decree, he must prove that he is ready and willing to perform his part of the contract. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready to perform his contract."
21. Requisite pleadings and proof that are required of a plaintiff to succeed in a suit for specific performance are succinctly captured in this Court's decision of recent origin in U.N. Krishnamurthy v. A.M. Krishnamurthy . The relevant passage reads:
"24. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the Page 31 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money."
20. It would also be appropriate to consider the judgment of the Hon'ble Supreme Court in the case of Pydi Ramana @ Ramulu vs Davarasetty Manmadha Rao reported in 2024 INSC 507. The relevant observations are reproduced hereunder:
"14. There is a distinction between the terms 'readiness' and 'willingness'. 'Readiness' is the capacity of the plaintiff to perform the contract which includes his financial position to pay the sale consideration. 'Willingness' is the conduct of the party. In the instant case, even according to the concurrent findings recorded by the courts below, it would emerge that the plaintiff had been able to successfully prove the sale agreement dated 07.06.1993 Ex.A1 on which date Rs.2,005/- was paid by the plaintiff to the defendant. The evidence on record tendered by plaintiff came to be accepted by all the courts and judgments of courts below would also indicate that further amount towards sales consideration in a sum of Rs.17,000/- was paid by plaintiff to defendant on 23.06.1993 and same was endorsed by him. As per the recital in the agreements, the defendant was required to get the suit land surveyed and as such the total consideration was agreed to be settled after such survey. On the one hand, the plaintiff contends that defendant never got Page 32 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined surveyed the suit land. On the other hand pleadings and evidence of plaintiff is silent on steps taken by the plaintiff as expected of a reasonable person which has not been taken in the instant case namely the plaintiff has not produced any evidence either oral or documentary to establish that there was any demand made by him for the land being surveyed by defendant. No witnesses have been examined on behalf of the plaintiff to establish that at any point of time there has been demand made by the plaintiff with the defendant by calling upon him to get the suit land surveyed as agreed under the agreement of sale Ex.A1. It is for the first time after a period of 3 years from the date of agreement Ex.A.1 namely on 30.05.1996 legal notice (Ex.A3) was got issued or in other words plaintiff was silent for a period of 3 years in enforcing of the agreement of sale. It is for this specific reason the trial court while rejecting the prayer for decree of specific performance has recorded a categorical finding to the following effect:
21. The terms of the agreement xxx the period of one year. The plaintiff got issued a legal notice on 30.05.1996 Ex.A.3 expressing his readiness to go ahead with the transaction and calling upon the vendors to execute the sale deed. That means nearly for two years after the expiry of one year period. The plaintiff vendee did nothing to act in furtherance of the agreement. Excepting a bald and vague assertion that he was contacting the vendors but they were dodging nothing more is brought on record to satisfy the court that the plaintiff was at all material times interested in finalizing the deal and showing his readiness and willingness to perform the essential terms of the agreement. Though the suit was filed within the period of limitation, it is not sufficient. In assessing the question of readiness and willingness of the party to perform his part of the contract. It is highly essential to take into account the long unexplained silence and inaction on the part of the plaintiff 22. Plaintiff must perform his part of the contract within Page 33 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined reasonable time. There was total inaction on the part of the plaintiff for 2 ½ years which was not consistent with the terms of agreement. From 6.6.94 to 30.5.96 i.e., for a period of 23 months, plaintiff sat quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of one year, within which he was expected to urge the defendant vendor to get measurements of land and fix the sale price and to tender the balance amount and call upon the defendants to execute sale deed and deliver possession of the property.
As rightly pointed out by the trial court, the respondent-plaintiff has not produced any satisfactory evidence to prove his readiness and willingness. As regards 'willingness' of the plaintiff to perform his part of the contract, the conduct of the plaintiff warranting the performance has to be looked into. The following conduct of the plaintiff warrants consideration:
a. Plaintiff got issued legal notice nearly after two years after the expiry of one year period as prescribed in the agreement.
b. Plaintiff has not brought anything on record to prove that he contacted the Defendant after the expiry of one year period and was interested in finalising the deed.
c. There was total inaction of the Plaintiff from 06/06/1994 (expiry of one year period) to 30/05/1996 (Date of issuance of legal notice).
d. Suit was filed on 09/06/1997 i.e. after a period of more than one year from the date of issuing of legal notice. Said delay has not been sufficiently explained by the Plaintiff.
The continuous readiness and willingness is a condition precedent to grant the relief of specific performance.4 The trial Court has rightly held Page 34 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined that plaintiff has not sufficiently explained and proved that he was always ready and willing to perform his part of the contract. As such the High Court and the First Appellate Court had erred in holding that plaintiff had proved his readiness and willingness.
15. The ratio of the above judgment in all force would be applicable to the facts on hand in the instant case. The agreement of sale (Ex.A1) was executed on 07.06.1993 and the date fixed for execution of the sale deed was one year from the date of measurement of the suit schedule property. Undisputedly no such measurement was carried out and plaintiff has not raised his little finger in this regard from the date of execution of agreement till he got issued legal notice dated 30.05.1996 that is almost for a period of 3 years and suit came to be filed only on 09.06.1997 at the fag end of the expiration of the limitation. The long unexplained delay in not taking any reasonable steps as is expected from a reasonable person is itself sufficient to disentitle the plaintiff to an equitable relief.5 It is no doubt true that suit for specific performance can be filed even on the last date of the limitation as prescribed under Article 54 of the Limitation Act.
However, the steps taken by the plaintiff during this period namely from the date of agreement till date of filing of suit will have to be explained in the plaint and proved in the evidence which is lacking in the instant case. The long unexplained delay and silence on the part of the plaintiff in this regard while in the witness box would not entitle the plaintiff to a decree of specific performance and it is for this precise reason, the trial court as noticed supra has refused to grant the equitable relief which has been reversed by the appellate court without assigning proper and cogent reason and the one assigned are at tangent or in other words contrary to the facts. The resultant effect of filing the suit for specific performance on the verge of limitation coming to an end came to be examined by this Court in the matter of Rajesh Kumar Vs. Anand Kumar and Ors6 and held that plaintiff would not be entitled Page 35 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined to the equitable relief (vide paragraph Nos.14, 15, 16, 17 and 18). Hence, the appellant would succeed in this appeal. Point No.1 is answered in favoured of appellant-defendant."
21. Applying the aforesaid legal proposition in the facts of the case, it is evident from the record that the oral evidence of the plaintiff and the documentary evidence led on record by the them, that the original loan was applied for on 08.08.2009, which was much prior to entering into the agreement to sell on 02.02.2010. The parties were, thus, aware about the aforesaid facts of the plaintiffs having applied for the loan, and had accordingly, stipulated in condition no.1 fixing the time period of 7 days to make payment of the remaining amount of consideration of Rs.11,70,000/-, and to enter into the registered sale deed, upon payment of such total consideration.
22. Indisputably, the loan was sanctioned on 23.03.2010. Thus, as agreed between the parties, the aforesaid period of 7 days expired from the date of loan sanctioned i.e. on 31.03.2010. The plaintiffs were under an obligation to produce satisfactory evidence before the trial court to prove their readiness and willingness to perform their part of contract as evident from the bare perusal of the agreement to sell. The plaintiffs were under obligation to make payment of the remaining amount of Rs.11,70,000/- within the stipulated time period as agreed. Learned advocate for the appellants has made strenuous efforts to convince the Court that the plaintiffs were always ready and willing to perform their part Page 36 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined of contract by emphasizing on the fact that as agreed, the loan amount was sanctioned and the amount as reflected in the bank statement, was available. However, it was the defendant who had failed to perform his part of obligation.
23. On the contrary, in the opinion of this Court, the plaintiffs have remained silent by not offering any explanation or leading any cogent evidence to point out as to what steps were taken by them between the period from 23.03.2010 to 31.03.2010 when the period of 7 days expired from the date of sanction of loan or even thereafter i.e. the period of 90 days from the date of execution of the agreement to sell, which expired on 02.05.2010. The only evidence which emerges on record after the expiry of the aforesaid period is the legal notice dated 12.06.2010 thereby calling upon the respondent to perform his part of contract. As regards the submissions made by learned advocate for the appellants about the plaintiff having sold his house on 09.07.2010 and the amount derived thereafter, would be of no significance as the time period agreed between the parties had already expired.
24. Applying the ratio of the above stated judgments in the facts on hand, the action of the plaintiffs of getting loan sanctioned and selling of the house would contribute to the feature of the readiness of the plaintiffs to perform their part of the contract. As regards willingness of the plaintiffs as noted by the Hon'ble Supreme Court in the case of Pydi Ramana (supra), the unexplained delay and silence on the part of the plaintiffs during the interregnum period of date of Page 37 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined loan sanctioned to the outer limit of 90 days which expired on 02.05.2010, goes against the plaintiffs.
25. Indisputably, there is no whisper about the fact that the plaintiffs have offered the remaining amount of consideration even to the extent of sanctioned loan amount of Rs. 10 Lakhs to the respondent during the aforesaid stipulated time period. It is also evident from the letter dated 21.05.2010 addressed by the plaintiffs to the Bank discharging from the loan liabilities, goes to suggest that in fact the loan amount which was otherwise sanctioned, was not availed by the plaintiffs to meet with the payment of remaining amount of consideration as agreed. Thus, the plaintiffs have miserably failed to explain and prove that they were always ready and willing to perform their part of the contract. It is a settled legal position that in a suit seeking specific performance of the agreement, the plaintiffs are under an obligation to prove continuous readiness and willingness, and is treated as a condition precedent to grant the relief of specific performance.
26. This brings me to the last limb of the points for determination as to whether the trial court committed any error in denying specific performance of agreement to sell in favour of the plaintiffs.
27. For the reasons afore-stated, I am of the considered view that no error of fact or any law can be found with the approach of the trial court in not entertaining the suit for Page 38 of 39 Uploaded by RATHOD KAUSHIKSINH JILUSINH(HC00957) on Sat Apr 05 2025 Downloaded on : Sat Apr 12 00:01:13 IST 2025 NEUTRAL CITATION C/FA/3970/2012 JUDGMENT DATED: 28/03/2025 undefined specific performance of agreement to sell. Consequently, the impugned judgment and order dated 31.10.2012 passed by the learned 15th Additional Senior Civil Judge, Rajkot in Special Civil Suit No.163 of 2010 is hereby stands confirmed. The appeal, therefore, fails with no order as to costs. In view of dismissal of appeal, the interim relief is hereby stands vacated.
28. Record and proceedings is directed to be sent back to the concerned court forthwith.
sd/-
(NISHA M. THAKORE,J) FURTHER ORDER After the order was pronounced, learned advocate Mr. Mit Thakkar, appearing on behalf of Ms. Megha Jani, learned advocate for the appellants prays for extension of interim relief which has continued all throughout pending the appeal, as they would like to assail the order before the Higher forum.
Learned advocate Mr.Tolia appearing through virtual mode has objected to the prayers prayed for by the learned advocate for extension of interim relief.
Considering the fact that interim relief has operated all throughout pending the appeal, the same is extended for a period of further six weeks from the date of the order.
sd/-
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