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Time cannot be presumed to be essence of the contract in sale of immovable properties

Cause Title : Gaddipati Divija & Anr. Vs Pathuri Samrajyam & Ors., Civil Appeal No. 4206-4207 Of 2011, Supreme Court Of India

Date of Judgment/Order : 18/4/23

Corum : Krishna Murari; J., Sanjay Karol; J.

Citied: 

  1. N.P. Thirugnanam vs Dr. R. Jagan Mohan Rao & Ors, 1995 (5) SCC 115
  2. U.N. Krishnamurthy (since deceased) Thr. Lrs. vs A.M. Krishnamurthy, 2022 SCC OnLine SC 840
  3. Nanjappan vs Ramasamy & Anr., (2015) 14 SCC 341
  4. Jaswinder Kaur vs Gurmeet Singh & Ors, 2017 (12) SCC 810
  5. Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd., 2022 LiveLaw (SC) 712
  6. Ardeshir H. Mama vs Flora Sassoon, AIR 1928 PC 208
  7. Syed Dastagir vs T.R. Gopalakrishna Setty, (1999) 6 SCC 337
  8.  Aniglase Yohannan vs Ramlatha & Ors., (2005) 7 SCC 534

Background

One G. Venugopala Rao had contracted with the Respondent for sale of some immovable property against which advance was paid by the Respondent. When after 4 months, Mr. Rao demanded the remaining money, the Respondent refused alleging failure on part of Mr. Rao to demarcate the property and also not disclosing that there is an encumbrance on the property. While several litigations were going on, Mr. Rao passed away. The Respondent filed a suit against his heirs claiming specific performance of the contract which was partially rejected by the Trial court. On appeal, the High Court allowed the appeal and decreeing the suit for specific performance. Hence this appeal filed by the heirs alleging that the Respondents were not ready and willing to perform her part of the contract.  

Judgment

The Supreme Court however agreeing with the High Court held that :-
  • As stipulated under Section 16 of the Specific Relief Act, 1963 (before 2018 amendment), the Respondents had averred before the High Court that she was always ready and willing to perform their part of contract with regard to the payment of the balance sale consideration and this evidence was not challenged by the Appellants. When a fact has been stated by witness and the same has not been challenged, it can be said that such a fact is admitted.
  • Mere stipulation of time would not make time the essence of the contract.
  • In case of sale of immovable property normally the time may not be essence of the contract.

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