SURAJ SINGH Vs. NATHI BAI

JUDGEMENT

(1.) This is plaintiff's first appeal under Sec. 96 of the Code of Civil Procedure against the judgment and decree dated 29-7-1985 passed by Shri K.C. Agarwal, First Additional Judge to the Court of District Judge, Sagar in Civil Suit No.8-A of 1983, dismissing the appellant's suit for specific performance.

(2.) Admittedly the respondent No.1 is the owner of a house and plot situate at Ravishanker Ward, Sagar and demarcated in the map annexed to the plaint. It is admitted by the parties that respondent No.1 agreed to sell the said house to the appellant for a sum of Rs. 21,000/- only and executed an agreement on 3-1-1983 (Ex. P/1). There is also no dispute that respondent No.1 received a sum of Rs. 2,000/- from the appellant as advance. The appellant and the respondent No.1 agreed that sale deed may be got executed by the appellant by paying balance of Rupees 17,000/-, before the Registrar by 5-3-1983. The agreement further provides that in case, the respondent No.1 did not execute the sale deed, as aforesaid, the appellant would be entitled to get the same executed through the Court of law. The document is witnessed by Ashok Kumar Choubey (D.W. 1) and Nathu Singh (PM. 3), The case of the appellant, as stated in the plaint, is that he had been ready and willing to obtain the sale deed and had even approached the respondent No.1 for that purpose but the respondent No.1 somehow avoided the execution thereof: There appears to be no dispute now that the respondent No.1 sold the very same house to the respondents Nos.2 to 4 for a valuable consideration of Rs. 22,000/- and executed sale deed on 7-3-1983 (Ex.P/4). The appellant claims that the subsequent sale in favour of respondents Nos.2 to 4 was without any legal effect. He, therefore, prayed for a declaration that the sale deed dated 7-3-1984 (Ex. P/4) was illegal and inoperative and that the respondent No.1 be directed to execute the sale deed in his favour in specific performance of agreement (Ex. P/1), The respondent No.1 admitted execution of the agreement (Ex. P/1) but submitted that she had been ready and willing to execute the sale deed as per the same. She alleged that she had herself approached the appellant for the purpose several times before 5-3-1983 but the appellant did not have the ready money to buy the house and, therefore, did not obtain the sale deed. She admitted having sold the same house to respondents Nos.2 to 4 which according to her, was legal and valid. Respondents Nos.2 to 4 filed their separate written statement and submitted that they had no knowledge of the agreement dated 3-1-1983 (Ex. P/1) or else they would not have purchased the said house. They, therefore, claim that they were bona fide purchasers for value and, without notice of prior agreement and, therefore, the sale in their favour could not be invalidated. They further allege that the appellant was guilty of breach of condition of agreement and, therefore, his suit must fail. The learned trial Judge, on examination of evidence adduced by the parties, held that the appellant did not have the ready money to buy the suit house and, therefore, it cannot be inferred that he was ready and willing to perform his part of the agreement. The suit was accordingly dismissed and hence this appeal.

(3.) A perusal of the agreement dated 3-1-1983 (Ex.P/1) indicates that the parties had fixed time limit for execution of the same i.e. 5-3-1983 and had provided that the respondent No.1 would execute the sale deed in favour of the appellant on his paying balance consideration of Rs. 19,000/-. A plain reading of this document would, therefore, indicate that the appellant was required to pay Rs. 19,000/- and got the sale deed executed at his cost latest by 5-3-1983. The date 5-3-1985, therefore, was the outer limit for getting the sale deed executed in terms of this agreement. This interpretation of the agreement would give rise to two legal questions, namely, (i) whether the time was the essence of the agreement; and (ii) whether the appellant was ready and willing to perform his part of the contract. The first question arises because o the provision of Sec. 55 of the Contract Act, whereas the second question arises because o Sec. 16(c) of the Specific Relief Act, 1963. In Govind Prasad v. Hari Dutt, AIR 1977 SC 1005, it was clarified by the Supreme Court that "It is settled law that the 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. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract". This case is also the authority for the proposition that the parties may if they so like indicate in unmistakable terms that the time is the essence of the contract. In Gomathinayagam Pillai v. Palaniswami Nadar, AIR 1967 SC 868, the Supreme Court considered this matter in the context of English law and held that the principle underlined in S.55 of the Indian Contract Act, did not differ from those which obtained under the law of England as regards contract for sale of land. Under the circumstance, it must be accepted that time will not be treated to be of essence with regard to contract relating to sell of immovable properties but this presumption will give way to proof of a contrary intention by express words or by the nature of the transaction. Application of this rule would indicate that where the parties have expressly stipulated in their contract that the time fixed for performance must be strictly complied with, the Courts will infer an intention to the contrary and would treat time as of the essence of the contract. This presumption would, however, stand rebutted where the circumstances of the contract or the nature of the subject-matter indicate that the fixed date must be strictly complied with, e.g. the purchase of a leasehold house for immediate occupation; the purchase of business land or premises such as a public house as a going concern, the option for the purchase of property, etc. Under the circumstances it will be the obligation of this Court not only to gather the intention to make time as the essence of the contract from the language used in the document but also by the nature of the property and surrounding circumstances showing the said intention. If surrounding circumstances are taking into consideration as they should be, it would appear that the respondent No.1 was compelled to sell the suit house to repay the loan which she has taken from others and also for meeting her day-to-day living expenses. In such a situation, the respondent No.1 could not have agreed to an indefinite period for execution of sale deed. In this view of the 'matter, it would appear that the parties intended that the sale deed must be executed 'latest by 5-3-1983. Indeed, that is how the appellant Suraj Singh himself understood it and has stated in his evidence on oath. This is also the precise reason why his defence is that 'he had been ready and willing to pay the amount and get the sale deed executed before 5-3-1983. Under the circumstances, it must be held that the normal presumption about time not being the essence of contract would be dislodged in the instant case. The learned Counsel for the appellant has on the basis of Govind Prasad's case (supra) submitted that the stipulation about time as appearing in the impugned agreement was exactly the same in the case before the Supreme Court. Since the Supreme Court has held that the time was not the essence of the contract, it is submitted that this Court should also hold that the time is not the essence of the contract. It is true that the Supreme Court while interpreting almost an identical language in the agreement has held that the time was not the essence of the contract. That was because the Supreme Court did not have before it anything to infer as to how the parties themselves understood the said term. The Supreme Court has not, in this case, laid down that irrespective of surrounding circumstances, every agreement relating to sale of immovable property will be interpreted as the agreement where time does not of essence. Indeed the conclusion will differ from case to case depending on facts of each case. In the present case, the evidence of parties that they treated 5-3-1983 to be the outer limit during which the appellant was entitled to obtain the sale deed is the determining factor, In this view of the matter, this Court is of the opinion that the time was of the essence of the contract and, therefore, the parties were bound to perform the same by that date.