1966 (9) TMI 159 - SC - Indian Laws

Supreme Court: Time Not Essential in Sale Contract, Respondent Lacked Willingness

Gomathinayagam Pillai and Ors. Versus Pallaniswami Nadar

The Supreme Court held that time was not of the essence in the sale contract and that the respondent was not ready and willing to perform his part of the ... - Issues Involved:1. Whether under the agreement of sale, time was of the essence.2. Whether the respondent was ready and willing to perform his part of the contract.Issue-wise Detailed Analysis:1. Whether under the agreement of sale, time was of the essence:The Supreme Court examined whether time was of the essence of the contract under the agreements dated April 4, 1959, and April 15, 1959. The Court referred to Section 55 of the Contract Act, which stipulates that a contract becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract. The Court noted that the intention to make time of the essence must be expressed in unmistakable language or inferred from the nature of the property, conduct of the parties, and surrounding circumstances.The Court observed that the agreements did not express in unmistakable language that time was of the essence. The mere incorporation of a clause imposing a penalty for default did not necessarily indicate such intention. The Court held that in contracts for the sale of immovable property, it is normally presumed that time is not of the essence. The Court found that the appellants were in urgent need of money, but they had secured Rs. 3006/- from the respondent, which presumably tided over their difficulties temporarily. The Court concluded that there was no express stipulation or sufficiently strong circumstances to indicate that time was intended to be of the essence of the contract.The Court further noted that even if time was not originally of the essence, the appellants could have served a notice making time of the essence and requiring the respondent to complete the contract within a reasonable time. However, no such notice was served by the appellants. Instead, by their letter dated July 30, 1959, they treated the contract as at an end.2. Whether the respondent was ready and willing to perform his part of the contract:The respondent claimed a decree for specific performance and needed to establish that he was continuously ready and willing to perform his part of the contract from the date of the contract to the date of hearing. The Trial Court found that the respondent was not ready and willing to perform his part of the contract. The High Court did not consider this finding and granted a decree for specific performance without expressing dissent.The Trial Court considered the respondent's admission that he was not willing to take the sale deed on April 30, 1959, and found that the respondent committed default by not carrying out the contract on that date. The Court observed that the respondent was never eager, prompt, or willing to take the sale deed and concluded that he committed default in performing his part of the agreement. The High Court, however, focused on whether time was of the essence and whether the respondent was disentitled to relief on the ground of delay, without addressing the issue of readiness and willingness.The Supreme Court noted that the Trial Court's finding on the issue of readiness and willingness was based on prima facie good evidence and could not be set aside without reappraisal of the evidence. The Court found that the High Court did not discuss the evidence on this part of the case and did not hold the Trial Court's finding to be incorrect. The Supreme Court accepted the Trial Court's finding that the respondent was not ready and willing to perform his part of the contract.Separate Judgment by Bachawat, J.:Bachawat, J. agreed that time was not of the essence of the contract and that the respondent was entitled to specific performance. He noted that the High Court rightly held that time was not of the essence and that the respondent was not disentitled to relief on the ground of delay. He disagreed with the Trial Court's inference that the respondent was not ready and willing to perform the contract based on the delay from April 30, 1959, to the middle of July 1959. He held that mere delay, short of waiver or abandonment, is no ground for refusing relief and that the respondent was at all material times ready and willing to perform the contract. He concluded that the respondent was entitled to specific performance, and the High Court rightly decreed the suit.Final Order:In accordance with the majority opinion, the appeal was allowed, the decree passed by the High Court was set aside, and the decree passed by the Trial Court was restored. There was no order as to costs in the Supreme Court and the High Court.