Supreme Court denies specific performance due to plaintiff's delay and equity considerations.

The Supreme Court set aside the High Court's decree granting specific performance of a contract for the sale of a house. The Court held that the plaintiff's delay of over 2 1/2 years and the significant rise in property prices made it inequitable to enforce specific performance. The Court emphasized that even without a time-is-of-the-essence clause, contracts must be performed within a reasonable time. Consequently, the Court restored the Trial Court's decision denying specific performance but ordering a refund of the earnest money.

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Issues Involved:
1. Specific Performance of Contract
2. Readiness and Willingness to Perform
3. Time as Essence of Contract
4. Discretion of Court in Granting Specific Performance
5. Impact of Delay and Rise in Property Prices

Summary:

1. Specific Performance of Contract:
The respondent's suit for specific performance was initially denied by the Trial Court, which directed a refund of the earnest money. However, the Madras High Court decreed specific performance in appeal. The Supreme Court reviewed the case, focusing on whether the plaintiff was entitled to specific performance of the agreement dated December 15, 1978, for the sale of a house for Rs. 60,000.

2. Readiness and Willingness to Perform:
The plaintiff issued a notice on July 11, 1981, claiming readiness and willingness to perform his part of the contract. The defendants countered that the plaintiff was not ready and willing, and the delay was due to the plaintiff's inaction. The Trial Court found the plaintiff ready but not willing, while the High Court reversed this finding. The Supreme Court examined the evidence and concluded that the plaintiff did not take necessary steps within the stipulated six months and was inactive for over 2 1/2 years.

3. Time as Essence of Contract:
The agreement did not explicitly state that time was of the essence. However, the Supreme Court noted that even if time is not the essence, the contract must be performed within a reasonable time. The plaintiff's delay of over 2 1/2 years was deemed unreasonable, especially given the rising property prices in Madurai.

4. Discretion of Court in Granting Specific Performance:
The Supreme Court emphasized that the jurisdiction to decree specific performance is discretionary, guided by judicial principles (u/s 10 and 20 of the Specific Relief Act, 1963). The Court found that the plaintiff's inaction and the significant rise in property prices made it inequitable to grant specific performance.

5. Impact of Delay and Rise in Property Prices:
The Court acknowledged the continuous rise in urban property prices and held that this factor should be considered when exercising discretion. The plaintiff's delay, coupled with the tripling of property prices, led the Court to conclude that granting specific performance would be inequitable.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's decree, and restored the Trial Court's decree, which denied specific performance but ordered a refund of the earnest money. The Court held that the plaintiff's delay and the substantial rise in property prices justified denying specific performance.

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