LI Network
Published on: January 12, 2024 at 11:00 IST
The Supreme Court emphasized that adherence to the specified payment timeframe in a contract is crucial for a buyer seeking specific performance of an agreement to sell.
The Court, comprising Justices Vikram Nath and Ahsanuddin Amanullah, overturned the concurrent judgments of the High Court and the First Appellate Court.
The Court observed that within six months, the onus was on the buyer to pay the entire balance, and since there was no evidence of an offer to pay before the deadline, the buyer failed to fulfill the obligation under the agreement within the stipulated period.
Rejecting the respondent’s argument that the transaction completion time had been extended, the court noted the absence of willingness on the part of the respondent to pay the remaining amount or initiate the sale deed execution process.
Factual Background
The appellants entered into a registered Agreement of Sale with the respondents on 22.11.1990, involving a property transaction for Rs. 21,000, with Rs. 3,000 received as advance.
The agreement set a six-month period for transaction completion. In the meantime, the appellants executed a Sale Deed with appellant no.7 for the same property on 05.11.1997, for Rs. 22,000.
On 18.11.1997, the respondents sent a notice to the appellants, demanding execution of the Agreement. This led to the filing of a suit for specific performance, damages, and money recovery by the respondents.
The Principal District Munsiff Judge dismissed the suit, but the First Appellate Court overturned it, a decision upheld by the High Court.
Issue Discussed
The central question revolved around whether the Agreement dated 22.11.1990 outlined a fixed timeframe for the respondent to make the full payment.
Observations by the Court
After scrutinizing the agreement, the Court acknowledged that the specified time for payment was six months, ending on 21.05.1991. The respondents paid only Rs. 7,000 within the stipulated time, and the court emphasized that the respondents had not fulfilled their obligation under the agreement within the six-month period.
Addressing the respondent’s claim that acceptance of money after the stipulated time extended the six-month timeframe, the court noted that forensic analysis revealed inconsistencies in the thumb-impression, indicating that time had not been extended.
Furthermore, the Court highlighted that the respondent did not seek the cancellation of the Sale Deed in subsequent proceedings, making a specific performance suit untenable.
Citing the case of K.S. Vidyanadam v Vairavan, the Court concluded that the decisions relied upon by the respondents were irrelevant, as the intermittent payments did not demonstrate willingness to pay the remaining amount or initiate the sale deed execution process.
Time remained crucial in the contract, according to the court’s assessment of the parties’ conduct, especially the appellants.
