GOMATHINAYAGAM PILLAI Vs. PALANISWAMI NADAR

JUDGEMENT

(1.) This appeal with special leave is filed against the judgment of the High Court of Judicature at Madras reversing the decree of the Subordinate Judge, Ramnathapuram in original suit No. 30 of 1959. Gomathinayagam Pillai and his son Chinnathambia Pillai-hereinafter collectively referred to as appellants 1 and 2: were owners of a plot of land Survey No. 1155/2-3 in village Periyakulam, District Ramnathapuram. In March 1959 Palaniappa Pillai son of the first appellant was standing trial in a criminal Court for the offence of murder and the first appellant was in need of funds to defend him. On March 5, 1959 appellants 1 and 2 agreed verbally to sell S. No. 1155/2-3 to Palaniswami Nadar - respondent in this appeal for Rs. 15,106/- and received Rs. 1006 in part payment of the price. No time was fixed for completion of the sale. A receipt Ext. A-1 was executed by appellants 1 and 2 reciting that the land was agreed to be sold by appellants 1 and 2 to the respondent and that Rs. 1006 were received as "advance amount." On March 31, 1959 Palaniappa Pillai was convicted of the offence of murder and sentenced to imprisonment for life. On April 4, 1959 appellants 1 and 2 received Rs. 2,000 from the respondent and executed a writing stipulating that the sale deed will executed on or before April 15, 1959. It was recited in that writing that appellants 1 and 2 had agreed to sell on March 5, 1959 and had received Rs. 1006 on that date, and Rs. 2,000 on April 4, 1959 and it was further recited that appellants 1 and 2 "shall settle the aforesaid sale within 2nd Chittiral, Vikhari (15th April 1959) in favour of " the respondent "that the amount shall be paid as per the particulars of the receipt of sale consideration; that even though" appellants l and 2 "are prepared to settle the sale accordingly, if " the respondent "raises any objection whatever to settle the sale, he shall lose the advance amount of Rs. 3006 (Rupees Three thousand and six only); and that, even though" the respondent is prepared to settle the sale, if" appellants 1 and 2 "raise any objection whatever to settle the sale, they shall add a sum of Rs. 3000 to the aforesaid advance amount of Rs. 3006 and pay in all, a sum of Rs. 6006 (Rupees six thousand and six only) to" the respondent. The agreement clearly incorporated a default clause imposing penalty upon the party failing to carry out the terms of the contract. But the sale deed was not executed on or before April 15, 1959. Different reasons were given by the parties for not completing the sale by the date stipulated. It was the case of the respondent that appellants 1 and 2 wanted to consult a lawyer and to ascertain whether it was necessary to secure attestation by the first appellant's son Palaniappa and his daughters because the property originally belonged to Ulagammal wife of the first appellant. It was the case of appellants 1 and 2 that they were full owners of the land agreed to be sold and that the children of the first appellant were not interested in the land and the respondent set up false excuses and neglected to take the sale deed as stipulated. On April 15, 1959, another agreement was executed. It was recited in the agreement :

(2.) Appellants 1 and 2 having failed to execute the sale-deed, the respondent instituted original suit No. 30 of 1959 in the Court of the Subordinate Judge, Ramnathapuram, against appellants 1, 2 and 3 and one Sethuramalingam Pillai (who was impleaded on the ground that he was a mortgagee of the property by deed executed on September 15, 1952 for Rs. 6000) for a decree for specific performance of the agreement, alleging that he was at all material times ready and willing to perform his part of the contract and to obtain the sale deed and it was only at the request of appellants 1 and 2 that execution of the sale deed was twice postponed and that appellants 1 and 2 had committed breach of the contract. The suit was resisted by appellants 1, 2 and 3. The learned Trial Judge dismissed the suit holding that under the agreement dated April 4, 1959 and April 15, 1959 time was of the essence, that even if it be held otherwise the respondent "was never ready and willing to perform his part of the contract" that he had committed default in carrying out his part of the bargain, that delay on the part of the respondent to claim his rights under the agreement of sale had caused the interest of the third appellant to intervene and on that account the respondent was estopped from enforcing the agreement, and that delay was evidence of abandonment of the contract or of waiver of the right to enforce the contract. The Trial Judge accordingly rejected the claim of the respondent for specific performance, but awarded on a concession made by appellants 1 and 2 a decree for recovery of Rs. 3006 with interest at 6 per cent from the date of the decree till realisation against appellants l and 2. Against the decree, the respondent appealed to the High Court of Judicature at Madras. The High Court opined that time was not of the essence of the contract, that delay on the part of the respondent in claiming completion of sale between April 30, 1959 and July 30, 1959 was not undue delay and there was neither abandonment of the contract, nor waiver, and that "even as a defaulting party", as found by the Trial Court, the respondent was entitled to a decree for specific performance of the agreement of sale. The High Court accordingly reversed the decree passed by the Trial Court, and decreed the claim of the respondent for specific performance.

(3.) In this appeal with special leave, two questions fall to be determined: (l) whether under the agreement of sale, time was of the esence: and (2) whether as alleged by appellants 1, 2 and 3 the respondent was not ready and willing to perform his part of the contract, and was on that account disentitled to a decree for specific performance