Case Title: Kolli Satyanarayana (D) v. Valuripalli Kesava Rao Chowdary (D)
The Supreme Court observed that time limit(s) specified in the agreement cannot be ignored altogether by the Court while exercising its discretion to grant specific performance.
The facts, in brief, are that the defendant executed an agreement of sale in favour of the plaintiff for the sale of the suit property. The agreement of sale provided that in the event that permission from the ULC Authorities was not obtained within 75 days, the purchaser shall be entitled to get back his advance money paid after 75 days but not later than 90 days under any circumstances. The defendant terminated the agreement on 12th April 1982 stating that since permission could not be obtained, she had cancelled the agreement of sale. After ULC permission was granted on 7th February 1984, the plaintiff issued a legal notice to the defendant on 19th February 1984 and thereafter filed a suit for specific performance. The Trial Court decreed the suit. Later, the Andhra Pradesh High Court set aside the decree by allowing the defendant's appeal.
During the course of the proceedings, the Court relied upon K.S. Vidyanadam and Others v. Vairavan in which it has been observed that the court should look at all the relevant circumstances including the time limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. It has been held that in the case of urban properties, the prices have been rising sharply. It has been held that while exercising its discretion, the court should bear in mind that when the parties prescribe certain time limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that time is not the essence of the contract.
In light of the abovementioned legal principle, the Court held that, “Taking into consideration the facts and circumstances and an undisputed position that the defendant had, in fact, received an amount of Rs.15,000/- as early as 1978, we direct the respondents-defendants to pay an amount of Rs.15,00,000/- to the appellants-plaintiffs. The said amount shall be paid within a period of 3 months from the date of this judgment.”