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Attorney(S)
  • Pratibha M.Singh
  • Maninder Singh
  • Maninder Acharya
Judges
  • Dr. S. Muralidhar, J.
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Citation Codes
Equivalent Citations
citation codes
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Attorney(S)
  • Pratibha M.Singh
  • Maninder Singh
  • Maninder Acharya
Judges
  • Dr. S. Muralidhar, J.
Acts
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Smart Summary

Structured Summary of the Opinion (Dr. S. Muralidhar, J.)

Factual and Procedural Background

Seven plaintiffs joined to sue for specific performance of an agreement to sell dated 18 October 1994 in relation to Industrial Plot No. 34 (360 sq. m.) at Functional Industrial Estate, Patparganj, Delhi (the "suit property"). The agreement was between Plaintiff No.1 (predecessor-in-interest of Plaintiffs 2–7, late Shri Suresh Gaur) and the Defendant.

Chronology (as set out in the opinion):

  • 20 March 1990: Industrial plot allotted to Shri Bhagwan Das Gupta.
  • 27 June 1990: Shri Bhagwan Das Gupta executed a Will bequeathing half share to his wife Smt. Laxmi Devi Gupta and half to the Defendant; on the wife's death the Defendant would become sole owner.
  • 13 November 1990: Shri Bhagwan Das Gupta died; a probate petition (Probate Case No. 40 of 1991) was filed in this Court in respect of that Will.
  • 18 October 1994: Defendant and Smt. Laxmi Devi Gupta entered into an agreement to sell the suit property to Plaintiff No.1 and his elder brother Shri Suresh Gaur for Rs. 14 lakh; Rs. 7 lakh was paid at execution (receipt acknowledged).
  • 29 July 1995: Plaintiffs allege an additional sum of Rs. 1 lakh was paid to the Defendant.
  • 15 January 1996: Probate of the Will was granted by this Court.
  • 25 May 1998: Smt. Laxmi Devi Gupta died, making the Defendant absolute owner by virtue of the probated Will.
  • 3 July 2002: Plaintiffs were informed (via enquiries) that a perpetual lease deed had been executed by the Department in favour of the Defendant (mutation/transfer of lease).
  • November–December 2002: Meetings between the parties; Plaintiffs claim Defendant demanded additional consideration (an extra Rs. 12 lakh); Plaintiffs maintained readiness and willingness to pay the agreed balance.
  • 23 December 2002: Plaintiffs sent a lawyer's notice calling upon the Defendant to execute the sale deed within seven days; no reply.
  • 3 May 2003: Plaint was filed seeking specific performance (alternatively damages of Rs. 30 lakh and refund of Rs. 8 lakh with interest).

The Defendant's written statement alleged, inter alia, that time was the essence and the agreement had been discharged because probate was not granted within three months; she also raised issues such as obligation to pay "unearned increase" under the eventual lease deed and lack of lessor's consent for transfer. The Court framed seven issues on 18 January 2005 and heard counsel for both parties.

Legal Issues Presented

  1. Whether agreement dated 18.10.1994 was conditional and whether parties stood discharged from their respective liabilities thereunder?
  2. Whether the agreement dated 18.10.1994 is void for the reasons stated in the preliminary objection No. 9 by the defendants?
  3. Whether the suit is barred by limitation?
  4. Whether the agreement dated 18.10.1994 is not enforceable under law?
  5. Whether the plaintiffs were ready and willing to perform their obligations under the agreement dated 18.10.1994?
  6. If the relief of specific performance is denied, whether plaintiffs are entitled to decree or damages, if so in what amount?
  7. Relief.

Arguments of the Parties

Plaintiffs' Arguments

  • Plaintiffs asserted they paid Rs. 7 lakh at execution and a further Rs. 1 lakh on 29 July 1995, and remained ready and willing to perform (i.e., pay the balance sum of Rs. 6 lakh) when called upon to do so.
  • Plaintiffs contended the Defendant failed to inform them of the lease execution as required and subsequently demanded additional sums not agreed under the 1994 agreement.
  • Plaintiffs relied on authorities (Indira Kaur v. Sheo Lal Kapoor; P. D'Souza v. Shondrilo Naidu; Gurdial Kaur v. Piara Singh) to argue that the court should enforce the contract and lend its hand to specific performance where appropriate.
  • On limitation, plaintiffs referenced cases (Panchanan Dhara v. Monmatha Nath Maity; Kuldip Gandotra v. Shailendra Nath Endlay; Nisha Raj v. Pratap K. Kaula) and Section 54 of the Transfer of Property Act, 1882 to support the proposition that time is not the essence in sale transactions of immovable property.

Defendant's Arguments

  • Defendant contended time was the essence of the contract: probate was not granted within three months of the agreement, so the agreement stood dissolved and she was discharged from obligations; plaintiffs' remedy was limited to refund of amounts paid.
  • It was submitted it was never intended that the agreement remain binding indefinitely or at a fixed price if completion did not occur within the specified period.
  • The Defendant pointed to her alleged repeated requests for plaintiffs to take back the Rs. 7 lakh (with interest) and that she accepted Rs. 1 lakh on 29 July 1995 only reluctantly to accommodate plaintiffs' request to wait further.
  • She further contended that execution of the lease and its clauses (including a 15% "unearned increase" payable to the lessor and a proviso restricting transfer for ten years without lessor's consent) imposed obligations/liabilities not contemplated by the original agreement and that the agreement was therefore unenforceable.
  • Defendant relied on precedents (Subhash Chander Kathuria v. Umed Singh; K.S. Vidyanadam v. Vairavan) in support of the time-is-of-the-essence/dissolution contention.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court (as stated in the opinion)
Subhash Chander Kathuria v. Umed Singh Cited by Defendant to support the contention that time was the essence and agreement dissolved when probate was not granted within three months. Cited by the Defendant in submissions; the Court recorded the reliance but the excerpt does not state that the Court applied this precedent to decide the issue.
K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 Cited by the Defendant in support of the time-is-of-the-essence argument. Cited by the Defendant in submissions; the Court recorded the reliance but the excerpt does not show the Court's application of this specific precedent.
Indira Kaur v. Sheo Lal Kapoor, (1998) 2 SCC 488 Cited by Plaintiffs to argue the Court's obligation to enforce contracts and lend its hand for specific performance. Cited by Plaintiffs in submissions; the Court noted the reference while considering the plaintiffs' contention about readiness and willingness to perform.
P. D'Souza v. Shondrilo Naidu, (2004) 6 SCC 649 Cited by Plaintiffs to support the principle that courts should enforce agreements where appropriate. Cited by Plaintiffs in submissions; the Court recorded the reliance in the context of plaintiffs' plea for enforcement of the contract.
Gurdial Kaur v. Piara Singh, (2008) 4 SCALE 695 Cited by Plaintiffs in support of enforcement principles. Cited by Plaintiffs; the Court recorded the reference but the excerpt does not indicate application to a particular finding within the provided text.
Panchanan Dhara v. Monmatha Nath Maity, (2006) 5 SCC 340 Cited by Plaintiffs in relation to limitation issues. Cited by Plaintiffs on limitation; the Court considered the limitation submissions and decided Issue No. 3 against the Defendant (see Court's reasoning).
Kuldip Gandotra v. Shailendra Nath Endlay Cited by Plaintiffs on the question of limitation. Cited by Plaintiffs on limitation; the Court dealt with limitation in Issue No. 3 and found the suit not barred, though the opinion excerpt does not expressly state that this precedent was applied to reach the conclusion.
Nisha Raj & Anr. v. Pratap K. Kaula & Ors., 151 (2008) DLT 402 Cited by Plaintiffs on the question of limitation. Cited by Plaintiffs on limitation; the Court addressed limitation (Issue No. 3) and concluded the suit was not barred, while the excerpt does not attribute the outcome to any one precedent.

Court's Reasoning and Analysis

The Court considered the pleadings, evidence and submissions of counsel and addressed the framed issues. The opinion available in the excerpt contains the Court's analysis principally on Issue No. 3 (limitation) and Issue No. 1 (whether the agreement was conditional and whether parties were discharged). The step-by-step reasoning in the excerpt is as follows:

  1. Issue No. 3 — Whether the suit is barred by limitation:
    • The Court examined the terms of the agreement dated 18 October 1994 and noted that the Plaintiffs' entitlement to seek execution of the sale deed would arise only after 15 days had passed following receipt of intimation that the lease had been mutated in the Defendant's name.
    • The transfer/mutation of the lease in favour of the Defendant took place on 3 July 2002; meetings between the parties were held in November–December 2002; no sale deed was executed; the suit was filed on 3 May 2003.
    • The Court concluded that because the cause of action to seek specific performance arose only after mutation/notification of the lease, the suit could not be said to be barred by limitation. The issue was decided against the Defendant and in favour of the Plaintiffs.
  2. Issue No. 1 — Whether the agreement dated 18 October 1994 was conditional and whether parties stood discharged:
    • The Defendant asserted that time was of the essence, relying on the three-month stipulation in the agreement and arguing that the agreement therefore came to an end on expiry of that period (measured either from 18 October 1994 or from the later payment date 29 July 1995).
    • The Court closely examined the language of the agreement. It observed that the contract comprises a preamble, two paras and ten numbered Clauses, and that when read together the parties did not appear to intend time to be the essence.
    • The Court specifically identified Para 1 (reference to a three-month limit for completion of tasks) and Para 2 (which provided that the balance sum would be payable “after 15 days from execution of the lease deed in the name of the first party and informing to the second party by the first party”). The Court then read Para 2 together with Clauses 2, 8, 9 and 10. Those clauses (quoted in the opinion) create a framework in which plaintiffs' obligation to pay the balance sum arises only after the sellers inform them of mutation and a 15-day period elapses.
    • The Court concluded that time did not begin to run for the buyers until they were informed of the lease mutation and 15 days had elapsed; consequently the Court could not accept the Defendant's submission that the Agreement ended on expiry of the three-month period after either 18 October 1994 or 29 July 1995.
    • The Court also noted that the Defendant's conduct — specifically accepting Rs. 1 lakh on 29 July 1995 — indicated that the parties did not intend the agreement to terminate simply on the expiry of three months from the original agreement date.
    • The Court looked to the evidence: the Defendant (in her testimony as DW-1) stated she applied for mutation in her name in 1998, which the Court considered inconsistent with the Defendant's contention that she took no steps after expiry of the three-month period. The excerpt ends with the Court referencing the Defendant's written statement about repeated requests to plaintiffs to take back payments; the opinion in the excerpt does not conclude further on Issue No.1 beyond the points described above.

Holding and Implications

Based strictly on the findings and text contained in the provided excerpt, the Court made the following determinations:

Core Rulings:

  • On limitation: The Court held that the suit was not barred by limitation. (Issue No. 3 was decided against the Defendant and in favour of the Plaintiffs.)
  • On whether time was the essence / conditionality: The Court rejected the Defendant's contention that the agreement automatically terminated on expiry of the three-month period measured from 18 October 1994 or from 29 July 1995. The Court concluded, on the basis of the language of the agreement (paras and Clauses 2, 8, 9 and 10) and the parties' conduct (acceptance of Rs. 1 lakh on 29 July 1995), that the parties did not intend time to be the essence in the sense argued by the Defendant. (The Court expressly stated it was not possible to agree with the Defendant on that point.)

Implications (direct effect on the parties):

  • Because the Court found the suit was not time-barred, the Plaintiffs' claim for specific performance could proceed on the merits (as to which the excerpt does not contain a final adjudication).
  • Because the Court found that the contractual scheme delayed the buyers' obligation until notification of mutation and the 15-day period thereafter, the Defendant's claim that the contract had terminated purely by efflux of three months was not accepted in the excerpt.

The excerpt does not contain the complete final adjudication on all issues (for example, the excerpt ends during the Court's consideration of evidence regarding parties' conduct). No broader implications or the setting of a new precedent are stated in the provided portion of the opinion; the findings in the excerpt are directed at the parties' rights in this litigation (i.e., that limitation does not bar the suit and that the defendant's "time is of the essence" contention is not sustainable on the contractual reading and conduct described).

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    Naresh Gaur v. Uma Gupta

    Dr. S. Muralidhar, J.— Seven Plaintiffs have joined together to file the present suit seeking specific performance of an agreement to sell dated 18th October, 1994 in respect of an industrial Plot No. 34 measuring 360 sq. m. in the Functional Industrial Estate, Patparganj, Delhi-110092 (hereafter “suit property”). The parties to this agreement were Plaintiff No. 1, the predecessor-in-interest of Plaintiffs 2 to 7 late Shri Suresh Gaur who was the elder brother of Plaintiff No. 1 and the Defendant.

    2. The background to the filing of the present suit is that on 20th March, 1990 an allotment was made by the Industries Department of the aforementioned industrial plot in favour of Shri Bhagwan Das Gupta. A Will was executed on 27th June, 1990 by Shri Bhagwan Das Gupta. Under the Will one half of the undivided share of the plot was bequeathed to Smt. Laxmi Devi Gupta, the wife of Shri Bhagwan Das Gupta and the other half of the share was bequeathed to the Defendant. It was provided in the Will that after the death of Smt. Laxmi Devi Gupta her share in the undivided plot would devolve on the Defendant who would become the sole owner of the property. Shri Bhagwan Das Gupta expired on 13th November, 1990. A Probate Case No. 40 of 1991 was filed in this Court in respect of the said Will dated 27th June, 1990.

    3. The Defendant and Smt. Laxmi Devi Gupta entered into the aforementioned agreement dated 18th October, 1994 with Plaintiff No. 1 Shri Naresh Gaur and his elder brother Shri Suresh Gaur agreeing to sell the suit property to them for a consideration of Rs. 14 lakh. A sum of Rs. 7 lakh was paid to the Defendant and Smt. Laxmi Devi Gupta at the time of the execution of the agreement to sell towards part payment of the sale consideration. Of the said sum of Rs. 7 lakh, the Defendant received Rs. 4,50,000/- in cash and a sum of Rs. 2,50,000/- by way of two demand drafts dated 21st September, 1994 for Rs. 1,25,000/- each. A receipt dated 18th October, 1994 was executed by the Defendant and Smt. Laxmi Devi Gupta in acknowledgement of the receipt of Rs. 7 lakh.

    4. Under the agreement to sell, the clauses of which will be discussed hereafter, it was agreed that the balance sum of Rs. 7 lakh would be received by the sellers at the time of delivering the vacant physical possession of the suit property and execution or registration of the concerned documents such as the general power of attorney (“GPA”), agreement to sell, affidavit, Will, receipt or sale deed in favour of the purchasers or their nominees “within three months”. The agreement further stipulated that the balance amount would be payable “after 15 days from execution of the sale deed in the name of the first party and informing to the second party by the first party”. It was further agreed that the price was settled and would neither be reduced nor enhanced by either party. The second party i.e the purchasers were entitled to get the sale deed registered in their names “after 15 days from getting the information of transfer of the lease deed in the name of the first party”. The agreement acknowledged the pendency of the probate case. It was agreed that “if the seller failed to get the case cleared from the High Court within three months then the purchasers shall have the full right to take back the said amount…with back interest within a period of one week”. The balance payment was to be made within 15 days from the date of execution of the lease deed in respect of the said plot “as well as taking over of the possession of the above said plot by the second party by the Commissioner of Industries”.

    5. According to the Plaintiffs they paid the Defendant a further sum of Rs. 1 lakh on 29th July 1995.

    6. On 15th January, 1996 this Court granted probate of the Will. Thereafter in 1998 the Defendant appears to have applied to the Industries Department for the grant of lease in her name. It may be mentioned here that on 25th May, 1998 Smt. Laxmi Devi Gupta died and therefore in terms of the Will of late Shri Bhagwan Dass Gupta, which was probated by that date, the Defendant became the absolute owner of the plot. The elder brother of Plaintiff No. 1, Shri Suresh Garg expired on 14th November, 2000 leaving behind Plaintiffs 2 to 7 as his legal heirs.

    7. The Plaintiffs did not hear from the Defendant thereafter. In the plaint it is stated that when inquiries were made from Shri R.D Gupta, husband of the Defendant, working as Joint Director, Department of Industries, Govt. of National Capital Territory of Delhi, the Plaintiffs were informed that the process for the execution of the lease was underway.

    8. In the month of November 2002 the husband of the Defendant, Shri R.D Gupta informed the Plaintiffs that a perpetual lease deed had already been executed by the Department in favour of the Defendant on 3rd July, 2002. Although in terms of the agreement the Defendant was to inform the Plaintiffs of the execution of the lease deed, they did not do so and the Plaintiffs learnt of it only upon making inquiries with Shri R.D Gupta. On 12th, 18th, 27th November and 9th December, 2002 meetings were held by the Plaintiffs with the Defendant. According to the Plaintiffs when called upon to execute the sale deed the Defendant demanded an additional sum of Rs. 12 lakh which the Plaintiffs were unwilling to pay. On their part the Plaintiffs informed the Defendants of their readiness and willingness to perform their obligations under the agreement to sell dated 18th October 1994. They were in other words willing to make the balance payment of Rs. 6 lakh. However the Defendant was demanding an additional sum of Rs. 6 lakh.

    9. Thereafter a lawyer's notice dated 23rd December, 2002 was sent to the Defendant by the Plaintiffs calling upon her to execute the sale deed in favour of the Plaintiffs within seven days. The willingness of the Plaintiffs to pay the balance amount of Rs. 6 lakh was reiterated. This notice was not replied to. Thereafter the present suit was filed praying inter alia for a decree of specific performance and in the alternative for a decree for damages in the sum of Rs. 30 lakh being the present market value of the property minus the amount of Rs. 14 lakh and refund of Rs. 8 lakh along with pendente lite interest and future interest @ 18% per annum. It may be mentioned that the Court fee has been paid on the said amount of Rs. 30 lakh.

    10. The stand of the Defendant in the written statement was that time was the essence of the contract. Since the probate of the Will was not granted within three months of the execution of the agreement to sell, the said agreement stood dissolved. Consequently the Plaintiffs could only claim refund of the money deposited by them with the Defendant. It was contended by the Defendant that it was not the intention of the parties that the agreement to sell should remain valid and enforceable for an indefinite period. Neither the Defendant nor late Smt. Laxmi Devi Gupta would have agreed to be bound down to a fixed price particularly if had been known that the transaction would not be completed within three months of the execution of the agreement to sell. In the written statement it was pointed out that possession of the suit property was delivered to the Defendant on 8th October, 2002. The market price had by then risen considerably. Even according to the Plaintiffs the current price (as on the date of the written statement i.e 29th July, 2003) was Rs. 35 lakh.

    11. As regards the events that transpired after the expiry of the three-month period in January 1995, the Defendant stated that she had “repeatedly impressed” upon the Plaintiff No. 1 and Shri Suresh Gaur to take back the amount of Rs. 7 lakh paid by them along with interest as per the agreement of the parties. However, Plaintiff No. 1 and Shri Suresh Gaur did not do so and rather impressed upon the Defendant and late Smt. Laxmi Devi Gupta to accept another instalment of Rs. one lakh only and wait for a further three months thereafter. According to the Defendant, on 29th July, 1995 she reluctantly accepted the amount of Rs. one lakh. However, once again despite the passage of three months thereafter, neither the probate petition was finalised nor the lease in respect of the suit property executed in favour the Defendant and Smt. Lakshmi Devi Gupta nor its possession delivered. It is claimed by the Defendant that on the expiry of three months from 29th July, 1995, i.e some time, in November, 1995, the Defendant and Smt. Laxmi Devi Gupta verbally communicated to the Plaintiff No. 1 and Shri Suresh Gaur, their intention to cancel the transaction in exercise of the rights under the Agreement since they could wait any longer to receive the balance consideration and to complete the transaction. Notwithstanding these contentions, the Defendant submits that it would be unjust to specifically enforce the agreement dated 18th October, 1994. It is submitted that in that event the agreement is liable to be declared null and void under Section 23 of the Contract Act.

    12. It is further contended in the written statement that under Clause (5)(a) of the lease deed dated 23rd July, 2002 the lessor i.e Delhi Administration was entitled to charge 15% unearned increase which in the present case works out to Rs. 6,10,000. The agreement in question did not deal with the aspect of the obligation of payment of unearned increase to the lessor i.e Delhi Administration in the event of the transfer of the suit property by the Defendant to the Plaintiffs. Since this was a substantial liability, not anticipated at the time of entering into the agreement, there was no consensus between the parties on this aspect and therefore the agreement was not enforceable. It is also pointed out that under Clause 5(a) of the perpetual lease deed no alteration or transfer of the suit property could take place without the previous consent of the lessor i.e Delhi Administration. The proviso to the said clause states that consent should not be given for a period of ten years from the commencement of the lease deed unless exceptional circumstances exist for the grant of such consent. It is pointed out that on the date of the agreement i.e 18th October, 1994 neither the Defendant nor late Smt. Laxmi Devi Gupta were co-owners of the suit property since the Probate of the Will of late Sri Bhagwan Das Gupta had not been granted in their favour. It is accordingly submitted that the agreement cannot be enforced.

    13. In the replication it is pointed out that the acceptance of Rs. 1 lakh by the Defendant on 29th July, 2005 i.e beyond the expiry of the three months from 18th October, 1994 indicated that time was not the essence of the contract. The contention of the Defendant that she had communicated to the Plaintiffs about her intention to cancel the agreement was denied as being factually incorrect. On the other hand she demanded Rs. 12 lakh additionally for executing the sale deed.

    14. On the basis of the pleadings and the documents, this Court by an order dated 18th January, 2005 framed the following issues:

    “1. Whether agreement dated 18.10.1994 was conditional and whether parties stood discharged from their respective liabilities thereunder?—OPD

    2. Whether the agreement dated 18.10.1994 is void for the reasons stated in the preliminary objection No. 9 by the defendants?

    3. Whether the suit is barred by limitation?—OPD

    4. Whether the agreement dated 18.10.1994 is not enforceable under law?—OPD

    5. Whether the plaintiffs were ready and willing to perform their obligations under the agreement dated 18.10.1994?—OPP

    6. If the relief of specific performance is denied, whether plaintiffs are entitled to decree or damages, if so in what amount?

    7. Relief.”

    15. The submissions of Mr. Maninder Singh, learned Senior Counsel appearing for the Plaintiffs and Ms. Maninder Acharya, learned Counsel appearing for the Defendant have been heard.

    Issue No. 3: Whether the suit is barred by limitation?

    16. A perusal of the agreement dated 18th October, 1994 shows that the entitlement of the Plaintiffs to seek execution of the sale deed in their favour would arise only on the expiry of 15 days after receiving intimation that the lease stood mutated in the name of the Defendant. The transfer of the lease in favour of the Defendant admittedly took place only on 3rd July, 2002. Thereafter four meetings were held in November and December, 2002 between the parties. However, no sale deed came to be executed. The suit was filed on 3rd May, 2003. Since the cause of action to seek specific performance arose only after the mutation of the lease in favour of the Defendant, it cannot be said that the suit is barred by limitation. This issue is accordingly decided against the Defendant and in favour of the Plaintiffs.

    Issue No. 1: Whether agreement dated 18th October, 1994 was conditional and whether parties stood discharged from their respective liabilities thereunder?

    17. The stand of the Defendant has been that time is the essence of the contract. It is contended that under the agreement dated 18th October, 1994 the sale deed was to be executed and possession to be handed over to the Plaintiffs within three months of the Agreement. It is submitted that the said period of three months could be reckoned either from 18th October, 1994 itself or at the highest the expiry of three months after 29th July, 1995 when the further sum of Rs. 1 lakh was received by the Defendant. It is submitted that on either of these parameters, the agreement came to an end latest on 28th October, 1995. It is accordingly submitted that beyond that date the Plaintiff cannot seek specific performance. Inasmuch as the Defendant has filed the suit only in 2003, long after the Defendant stood discharged from her obligation, the suit is not maintainable as such. Reliance is placed by the Defendant on the judgment of this Court in Subhash Chander Kathuria v. Umed Singh, 127 (2006) DLT 292. Reliance is also placed on the judgment in K.S Vidyanadam v. Vairavan, (1997) 3 SCC 1.

    18. On behalf of the Plaintiffs it is pointed out that they have throughout been willing to perform their part of the contract. Reference is made to the evidence and to the decisions in Indira Kaur v. Sheo Lal Kapoor, (1998) 2 SCC 488 and P. D'Souza v. Shondrilo Naidu, (2004) 6 SCC 649 to plead that it is the obligation of the Court to lend its hand for enforcement of the contract. Reference is also made to the judgment in Gurdial Kaur v. Piara Singh, (2008) 4 SCALE 695. On the aspect of limitation reference is made to the judgment in Panchanan Dhara v. Monmatha Nath Maity, (2006) 5 SCC 340; Kuldip Gandotra v. Shailendra Nath Endlay, AIR 2007 Delhi pagel and Nisha Raj & Anr.…Plaintiffs; v. Pratap K. Kaula & Ors.…Defendants. 151 (2008) DLT 402. Reference is also made to Section 54 of the Transfer of Property Act, 1882 to contend that time is not the essence of the contract in transactions of sale of immovable property.

    19. The submissions have been considered. In the present case the paras and clauses of the agreement when read together show that the parties did not intend time to be essence of the contract. The agreement consists of paras by way of a preamble followed by paras 1 and 2 (hereafter for convenience referred to as “paras”) followed by the actual Clauses of the agreement which are again numbered from 1 to 10 (hereafter referred to as “Clauses”). Para 1 makes a reference to the time limit of three months for completion of several tasks including delivering of vacant physical possession, execution and registration of concerned documents such as GPA, agreement to sell, affidavits, Will and simultaneous payment of the balance sum of Rs. 7 lakh. However Para 2 contemplates that the said balance sum of Rs. 7 lakh would be payable “after 15 days from execution of the lease deed in the name of the first party and informing to the second party by the first party”. When Para 2 is read together with Clauses 2, 8, 9 and 10 the position that emerges is that time does not begin to run for the buyers till they have been informed by the seller about the leased having been mutated in her name and 15 days have elapsed thereafter. Clauses 2, 8, 9 and 10 read as under:

    “2. That the second party shall be entitled to get the Sale Deed/proper documents executed and registered either in their own name or in the names of their nominee(s) after fifteen days from getting the information of transfer of the lease deed in the name of the first party.

    8. After getting the Lease Deed in their own name, the first party will be responsible to inform the second party in written as soon as possible.

    9. That if the first party fails to get the case cleared from the High Court within three months, then the second party shall have full right to take back the said amount, which is paid to the first party by the second party, with Bank Interest within a period of one week.

    10. That the balance consideration amount shall be payable by the second party to the first party within a period of 15 days from the date of execution and registration of lease deed of the above mentioned plot as well as taking over the possession of the above said plot by the first party from the Commissioner of Industries/Authority concerned.”

    20. It is not possible for this Court to agree with the learned Counsel for the Defendant that notwithstanding the fact that the obligation on the part of the buyers to make the payment of the balance sum did not arise till they were informed of the lease being mutated in favour of the Defendant, the Agreement itself would come to an end on the expiry of three months after either 18th October, 1994 or 29th July, 1995. The conduct of the Defendant in accepting the payment of Rs. 1 lakh on 29th July, 1995 is indeed a pointer that the parties did not intend the Agreement to come to an end on the expiry of three months after 18th October, 1994.

    21. The evidence of the parties in this aspect may be looked at. In her evidence the Defendant who examined herself as DW-1 specifically stated that she applied for the mutation of the lease in her name in 1998. This belies the stand of the Defendant that she had not taken any step in pursuant to the Agreement after the expiry of three months from 29th July, 1995. In her written statement the Defendant stated that she had repeatedly asked the Plaintiffs to

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    Comments

    Naresh Gaur v. Uma Gupta
    (Aug 13, 2009)