TMI Blog2004 (8) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... for lump sum consideration of ₹ 10,00,000/-. Prior to the execution of the agreement, the respondent paid ₹ 1,00,000/- as earnest money. Under clause (1) of the said agreement, a sum of ₹ 1,25,000/- was to be paid by the respondent within two months from the date of the agreement i.e. by 18.4.1981 and the balance of ₹ 7.75,000/- was payable by him on completion of the sale i.e. by 31.8.1981. Under clause (8) of the agreement, the sale was to be completed on or before 31.8.1981. However, there was a proviso to clause (8) under which an option was given to the appellants to extend the date of sale up to 31.12.1981. On 31.3.1981, the respondent herein paid ₹ 50,000/- by cheque to the appellants. By letter dated 3.9.1981, addressed by the appellants, it was alleged that ₹ 1,25,000/- was payable by the respondent on or before 18.4.1981; that the full amount was not paid; that the respondent was, therefore, called upon to make the balance payment of ₹ 75,000/- within three days from the date of receipt of the said letter. However, by the said letter, time to complete the sale was extended by the appellants under clause (8) up to 31.12.1981. In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of certain cheques deposited by him by 15.10.1981. That contrary to the said arrangement, the appellants vide notice dated 3.10.1981 illegally terminated the agreement alleging that time to pay the balance amount by 30.9.1981 was the essence of the contract as indicated by the letter dated 12.9.1981; that respondent was always ready and willing to perform his part of the contract and in the circumstances, he was entitled to the decree for specific performance. In the written statement, the appellants pleaded that there was delay in payment of ₹ 1,25,000/- on or before 18.4.1981; that although time was the essence of the contract and the same was communicated to the respondent, he committed default and, therefore, the appellants were entitled to terminate the agreement for sale and that the respondent was neither entitled to the specific performance of the contract nor damages, as prayed for. On examination of the evidence on record, both documentary and oral, the High Court found that on the plain reading of the agreement, the same did not provide for time to be the essence; that circumstances did not exist enabling the appellants herein to make time the essence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the present suit was filed on 2.12.1981, which indicates that the respondent was eager to complete the transaction. In the above circumstances, the suit was decreed. Aggrieved, the appellants herein instituted LPA No.813 of 1994, which was dismissed by the impugned judgment. Hence, this civil appeal. Mr. T.L. Viswanatha Iyer, learned senior counsel for the appellants contended that parties intended to make time the essence of the contract, since the agreement stipulated specific dates for the payment of the purchase price. That the appellants had validly made time the essence of the contract on 12.9.1981 and since part of the purchase price was not paid on or before 30.9.1981, the appellants were justified in terminating the agreement dated 18.2.1981. That the property in question consisted of a house in an urban area whose price rose continuously, which fact was relevant and which has not been taken into account by the High Court. It was urged that in the aforestated circumstances, any delay on the part of the respondent disentitled him from the relief of specific performance. In this connection, reliance was placed on the judgment of this Court in the case of K. S. Vidy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surrounding circumstances. That time is presumed not to be of essence of the contract relating to immovable property, but it is of essence in contracts of reconveyance or renewal of lease. The onus to plead and prove that time was the essence of the contract was on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence. That when the plaintiff pleads that time was not of essence and the defendant does not deny it by evidence, the Court is bound to accept the plea of the plaintiff. In cases where notice is given making time of the essence, it is duty of the Court to examine the real intention of the party giving such notice by looking at the facts and circumstances of each case. That a vendor has no right to make time of the essence, unless he is ready and willing to proceed to completion and secondly, when the vendor purports to make time of the essence, the purchaser must be guilty of such gross default as to entitle the vendor to rescind the contract. Applying the above principles to the facts of the present case, we find that there was no justification in claiming, in the circumstances, to treat time a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of land agreed to be conveyed may be a relevant factor in denying relief of specific performance when Court is considering whether to grant decree for the first time. That it is not a relevant factor, however, before the Supreme Court of India at SLP stage where all the Courts below have granted decree. It was, therefore, held that judgment of this Court in K. S. Vidyanadam (supra) was inapplicable. In the present case, the appellants, in any event, have not stepped into the witness box nor have they led evidence on any of their allegations. In the circumstances, we do not wish to burden this judgment by citing various authorities. Mr. Iyer, learned counsel for the appellants next contended that the respondent has failed to prove that he was always and that he continued to be ready and willing to fulfil his obligations under the agreement as required by section 16 of the Specific Relief Act. It was urged that on 30.9.1981, the respondent herein offered two cheques to the appellants for ₹ 30,000/- dated 29.9.1981 and a post dated cheque for ₹ 45,000/- dated 15.10.1981. That in his evidence, the respondent had conceded that he had no funds on 30.9.1981. That under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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