# Ram Nihore & Ors v. Aiyab Lal

- **Citation:** (2019) 2 ILRA 718
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-30
- **Case number:** Second Appeal No. 1392 of 1998
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-nihore-ors-v-aiyab-lal-44735
- **Pages:** 41

## Headnote

A. General Clauses Act - Section 27 -
Meaning of expression 'ordinary course
of post' - At the end of 30 days, with a
few days of variation on either side,
presumption of service by post would
arise. (Para 38)
B. Contract Act - Section 55 - Whether time
essence of contract or not - True intention of
parties to be gathered from the terms of the
contract / covenant - In contracts relating to
immovable property - mere fixation of time
within which contract must be performed
would not make time the essence of contract
- however if the language employed is
couched in specific terms - that completion
of transaction should be done within
specified term - intention to make time the
essence may be inferred.
C. Specific Relief Act, 1963 - Section 20 -
Discretion
as
to
decreeing
specific
performance
-
Plaintiff's
conduct
/
inaction for a long period of time on the
part of the plaintiff in bringing the suit
and
substantial
rise
in
prices
of
properties - a relevant factor to refuse
specific performance. (Para 60)
Held: -No plausible explanation as to why the
suit that should have been filed shortly after
02.02.1981, came to be filed as late as on
10.08.1983, with a delay of two years and six
months. During this period of time, the
defendant executed a sale deed conveying the
suit property in favour of the purchasers on
03.08.1983. It is indeed reflective of conduct
certainly not bona fide on the plaintiff's part
that he brought this suit within seven days of
the aforesaid sale deed being executed by the
defendant in favour of the purchasers - By his
utter inaction to bring a suit during all the long
period of time of two years and six months
and doing that when rights in favour of the
purchasers were created under a sale deed
executed for valuable consideration by the
defendant, most certainly makes equity work
against the plaintiff and in favour of the
defendant. (62 & 65)
Decree of specific performance set aside and
substituted by a decree for refund of the
earnest money - defendant shall refund to the
plaintiff the earnest money of Rs. 1800/-
together with interest @ 14% per annum, past
and pendentelite; future interest would be
payable @ 6% per annum in accordance with
the provisions of Section 34 C.P.C.
Appeal allowed in part (E-5)
List of cases cited: -

## Text

_Characters 0–39,808 of 139,729. This is a partial read: ask again with offset=39808 for what follows._

718 INDIAN LAW REPORTS ALLAHABAD SERIES
no.18-C and 43-C and another family
register paper no.13-C. Referring the
family register 13-C of Mantoria as well
as Triveni Prasad and in view of questionanswer filed during first appeal, he
contended that D.W.-2 Ram Baran who
was examined as marginal witness of sale
deed dated 19.10.1984 by Naval Kishore
in favour of defendant Santosh Kumar,
was in fact Triveni Prasad and so the sale
deed in favour of defendant was not duly
proved by its marginal witness.

22. The above contention has no
force and above paper "Question-Answer"
has no evidenciary value as it was never
suggested by plaintiffs to D.W.-2 Ram
Baran, in his lengthy cross examination,
that he is Triveni Prasad and not Ram
Baran or is giving false evidence by
impersonating himself as Ram Baran.

23. The Courts below rightly held that
plaintiffs failed to prove that Naval Kishore
died on 27.9.1984 prior to execution of sale
deed dated 19.10.1984 of land in suit in favour
of defendant, or that upon death of Naval
Kishore the land in suit devolved on his
widow Smt. Sonpatti and she had any right,
title or authority to execute valid sale deeds in
favour of plaintiff and the above sale deeds
were for valuable consideration. The findings
of courts below are well considered and based
on correct and proper appreciation of evidence
on record and cogent reasonings and in
recording concurrent findings. The Court is of
considered view that the Courts below have
not committed any error, mistake or perversity
in disbelieving the contention of plaintiffsappellants regarding death of Nawal Kishor
on 27.09.1984 and did not acted wrongly or
illegally in disbelieving the Death Certificate
as well as entries of 'Birth Register' as well as
'Family Register'. The lower appellate Court
did not ignore any material documentary
evidence on record of trial Court or filed in
appeal and committed no mistake in relying
the sale deed 19.10.1984 in favour of
defendant which was fully proved in
accordance with law.

24. The Court is of the considered
view that there is no illegality, irregularity,
incorrectness or perversity in the concurrent
findings recorded by both the courts below.
The substantial questions of law framed and
reframed are decided in negative against
plaintiffs. No other substantial question of
law arises or was raised.

25. The appeal is devoid of merits
and is liable to be dismissed.

26. The appeal is dismissed with
costs throughout. The impugned judgment
and decree are affirmed.

27. Interim orders, if any, stand
vacated.

28. Let the lower court record be
transmitted back to the court below along
with a copy of this judgment, for
necessary action, after preparation of
decree in the appeal.
----------

(2019)10ILR A 718

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.08.2019

BEFORE

THE HON'BLE J.J. MUNIR, J.

Second Appeal No. 1392 of 1998

Ram Nihore & Ors. ...Appellants
Versus
Aiyab Lal ...Respondent
2 All. Ram Nihore & Ors. Vs Aiyab Lal
719
Counsel for the Appellants:
Sri N.D. Kesari, Sri K.M. Garg, Sri P.K.
Kesari

Counsel for the Respondent:
Sri A.N. Mishra, Sri Rohit Verma

A. General Clauses Act - Section 27 -
Meaning of expression 'ordinary course
of post' - At the end of 30 days, with a
few days of variation on either side,
presumption of service by post would
arise. (Para 38)
B. Contract Act - Section 55 - Whether time
essence of contract or not - True intention of
parties to be gathered from the terms of the
contract / covenant - In contracts relating to
immovable property - mere fixation of time
within which contract must be performed
would not make time the essence of contract
- however if the language employed is
couched in specific terms - that completion
of transaction should be done within
specified term - intention to make time the
essence may be inferred.
C. Specific Relief Act, 1963 - Section 20 -
Discretion
as
to
decreeing
specific
performance
-
Plaintiff's
conduct
/
inaction for a long period of time on the
part of the plaintiff in bringing the suit
and
substantial
rise
in
prices
of
properties - a relevant factor to refuse
specific performance. (Para 60)
Held: -No plausible explanation as to why the
suit that should have been filed shortly after
02.02.1981, came to be filed as late as on
10.08.1983, with a delay of two years and six
months. During this period of time, the
defendant executed a sale deed conveying the
suit property in favour of the purchasers on
03.08.1983. It is indeed reflective of conduct
certainly not bona fide on the plaintiff's part
that he brought this suit within seven days of
the aforesaid sale deed being executed by the
defendant in favour of the purchasers - By his
utter inaction to bring a suit during all the long
period of time of two years and six months
and doing that when rights in favour of the
purchasers were created under a sale deed
executed for valuable consideration by the
defendant, most certainly makes equity work
against the plaintiff and in favour of the
defendant. (62 & 65)
Decree of specific performance set aside and
substituted by a decree for refund of the
earnest money - defendant shall refund to the
plaintiff the earnest money of Rs. 1800/-
together with interest @ 14% per annum, past
and pendentelite; future interest would be
payable @ 6% per annum in accordance with
the provisions of Section 34 C.P.C.
Appeal allowed in part (E-5)
List of cases cited: -
1. M/s. Hind Construction Contractors by its sole
proprietor Bhikamchand Mulchand Jain (Dead)
by L. R's Vs St. of Mah. AIR 1979 SC 720

2. Smt. Chand Rani (dead) by LRs Vs Smt.
Kamal Rani (dead) by LRs AIR 1993 SC 1742

3. Govind Prasad Chaturvedi Vs Hari Dutt
Shastri (1977) 2 SCC 539

4. Govind Lal Chawla Vs C.K. Sharma & ors.
AIR 1978 All 446
5. M/s. Madan & Co. Vs Wazir Jaivir Chand
(1989) 1 SCC 264
6. Basant Singh & Anr. Vs Roman Catholic
Mission AIR 2002 SC 3557
7. N.P. Thirugnanam Vs R. Jagan Mohan Rao
(Dr) (1995) 5 SCC 115
8. Azhar Sultana Vs B. Rajamani & ors. (2009)
17 SCC 27

9. V. Pechimuthu Vs Gowrammal (2001) 7 SCC 617

10. Jiwan Lal (Dr) Vs Brij Mohan Mehra (1972)
2 SCC 757

11. R. Lakshmikantham Vs Devaraji 2019 SCC
Online SC 907
12. Madhukar Nivrutti Jagtap & ors. Vs Smt.
Pramilabai Chandulal Parandekar & ors. 2019
SCC Online SC 1026
720 INDIAN LAW REPORTS ALLAHABAD SERIES
13. Ramathal Vs Maruthathal & ors. 2017 SCC
Online SC 1100
14. Dr. Jivanlal & ors. Vs Brij Mohan Mehra &
anr. AIR 1973 SC 559
15. Parakunnan Veetill Joseph's son Mathew
Vs Nedumbara Kuruvila's Son AIR 1987 SC
2328
16. Satyanarayana Vs Yellogi Rao AIR 1965 SC
1405
17 K.S. Vidyanadam Vs Vairavan AIR 1997 SC
1751

(Delivered by Hon'ble J.J. Munir, J.)

1. This second appeal by the
defendant is directed against a judgment
and decree of Shri Subodh Kumar, the
then XIIth Additional District Judge,
Allahabad, dated 31.08.1998 passed in
Civil Appeal no.139 of 1985, allowing the
said appeal by the plaintiff and reversing
an original decree of Shri B.B. Singh, the
then Munsif (East), Allahabad, passed in
Original Suit no.572 of 1983, dismissing
the plaintiff-respondent's suit for specific
performance of contract and alternate
relief for refund of earnest money with
interest.

2. The facts giving rise to this appeal
are these: that the plaintiff-respondent,
Ajayab Lal, who shall hereinafter be
referred to as the plaintiff, instituted
Original Suit no.572 of 1983 with
averments to the effect that Ram Nihor,
defendant-appellant no.1, since deceased,
and now represented before this Court by
his
heirs
and
legal
representatives,
appellants nos.1/1 to 1/5, was the owner
of the property as detailed at the foot of
the
plaint.
The
original
defendantappellant, Ram Nihor will hereinafter be
referred to as the defendant, and for the
sake of convenience, would be construed
to bear reference to his five heirs and
legal representatives, now on record in his
stead. It was averred by the plaintiff that
the defendant executed a registered
agreement to sell, dated 02.07.1980 in
favour of the defendant agreeing to
convey property as detailed at the foot of
the plaint (for short the suit property) for a
total sale consideration of Rs.8060/-. It
was further pleaded that at the time of
execution of the suit agreement, the
defendant accepted by way of earnest, a
sum of Rs.1800/-, leaving a residue of
Rs.6260/- that the plaintiff covenanted to
pay the defendant at the time of execution
of the sale deed. It was further specifically
pleaded that the suit agreement carried a
term that the sale deed would be executed
upto 02.02.1981.

3. It was averred further that in
accordance with the terms of the suit
agreement, the plaintiff always remained
ready and willing to get a sale deed
executed, and that he requested the
defendant a number of times, verbally, to
execute a conveyance as contracted. It is
then pleaded that on 24.01.1982, he
caused a notice to be sent to the plaintiff
to come forward and execute a sale deed
in terms of the suit agreement, accepting
the balance of sale consideration, and for
the purpose to appear in the office of the
Sub-Registrar, Karchhana on 02.02.1981.
It is averred that the defendant on the
scheduled date did not appear to execute
the agreed conveyance. It is pleaded that
thereafter the plaintiff sent further notices,
dated 30.03.1981 and 19.04.1982, calling
upon the defendant to discharge his
obligations in terms of the suit agreement,
both of which were duly served upon the
defendant. It is averred that despite
service of these notices, the defendant did
2 All. Ram Nihore & Ors. Vs Aiyab Lal
721
not
come
forward
to
fulfill
his
obligations. It is then pleaded that
defendant nos.2 to 6 to this appeal, who
shall hereinafter be referred to as the
purchasers, despite knowledge of the suit
agreement, got a registered sale deed
dated 03.08.1983, executed in their favour
by the defendant.

4. The plaintiff has described the
sale deed as one executed by conspiracy
between the defendant and the purchasers,
which has no binding effect on the rights
of the plaintiff. It was on the basis of
these facts that the plaintiff instituted the
present suit on 10.08.1983, seeking to
enforce the suit agreement against the
defendant and the purchasers, by way of
relief
of
specific
performance;
in
defeasance of the plaintiff not being found
entitled to specific performance, alternate
relief by way of refund of the earnest
money of Rs.1800/- together with interest
at the rate of 2% per mensem was sought,
payable for the period past, pendente lite
and future. The defendant filed his written
statement dated 20.12.1982, whereas
purchasers filed a written statement
together,
also
dated
20.12.1982,
independent of the defendant.

5. The stand taken by the defendant in his
written statement was to the effect that he
acknowledged execution of the suit
agreement dated 02.07.1980 for an agreed
sale consideration of Rs.8060/-. He,
however, pleaded that the plaintiff did not
have
with
him
the
balance
sale
consideration to get a sale deed executed
as covenanted. The defendant further
averred that he was in dire need of funds,
and on that account, he had executed the
suit agreement in favour of the plaintiff. It
was also averred that considering his dire
need for money, a specified date i.e.
02.02.1981 was covenanted, by which the
plaintiff was obliged to get the sale deed
executed. The defendant has also said that
upon the plaintiff failing to get a sale deed
executed as contracted, he sold the suit
property by executing a sale deed in
favour of the purchasers on 03.08.1982,
forfeiting the earnest paid by the plaintiff.
The defendant has also averred that on
02.02.1982, he remained present in the
office of the Sub-Registrar, Karchhana
from 10 a.m. to 5 p.m. in order to execute
a sale deed in terms of the suit agreement,
but the plaintiff did not come forward. He
has also averred in his written statement
that he never received any notice from the
plaintiff.

6. The purchasers in their separate
written statement have averred that they
are purchasers of the suit property. It is
pleaded that in accordance with the suit
agreement dated 02.07.1980, the plaintiff
had a right to get the sale deed executed
by 02.02.1981, and that on account of his
failure to do so by 02.02.1981, the suit
agreement got discharged, putting an end
to obligations inter se the plaintiff and the
defendant on the suit agreement. The
other pleadings put forward by the
purchasers are to like effect as the
defendant.

7. The Trial Court, on the basis of
the pleadings of parties, struck the
following issues (translated into English
from Hindi vernacular):

(1) Whether defendants nos.2 to 6
are bhumidhars in possession of the
property in dispute?

(2) Whether notices sent by the
plaintiff were duly served upon the
defendant? If so, its effect?
722 INDIAN LAW REPORTS ALLAHABAD SERIES

(3) Whether the agreement to sell
dated 02.07.1980 after 02.02.1981 is
enforceable in law?

(4) Whether defendant no.1 executed
an agreement to sell dated 02.07.1980 in
favour of the plaintiff?

(5) Whether the plaintiff is entitled to
any other relief?

(6) Whether the instant suit is barred
by time?

(7) Whether the agreement to sell
dated 02.07.1980 can be specifically
enforced on the basis of grounds pleaded
in the plaint?

8. The Trial Court held on issue no.1
that the factum of execution of the sale
deed dated 03.08.1983 is acknowledged
to the purchasers, and so is their
possession on the basis of the sale deed
aforesaid. As such, the Trial Court held
that the issue was not required to be
adjudicated. Regarding issue no.4, it was
opined by the Trial Court that the
execution of the suit agreement was
admitted to the parties, and the issue
between the parties was limited to the
extent,
whether
the
suit
agreement
remained
enforceable
in
law,
after
02.02.1981. And, if it was, whether it can
be specifically enforced. It was, therefore,
held by the Trial Court on the said issue
that the same also did not call for a
decision. The Trial Court proceeded to
determine issues nos.2, 3 & 7, taking
them up together and decided all of these
in favour of the defendant and the
purchasers. He held in conclusion that the
suit agreement was not capable of being
specifically enforced or any relief could
be granted on its basis to the defendant as
prayed.
Issue
no.6
that
relates
to
limitation and is a defendant's issue was
decided in favour of the plaintiff, holding
the suit within time. Upon the findings
substantially recorded on issues nos.2, 3
& 7, the Trial Court dismissed the suit
with costs.

9. That plaintiff appealed to the
learned District Judge vide Civil Appeal
no.139 of 1985, under Section 96 of the
Code of Civil Procedure (for short, the
Code).
The
appeal
came
up
for
determination before the learned XIIth
Additional District Judge, Allahabad, who
by means of his impugned decree,
reversed the Trial Court and decreed the
plaintiff's suit for specific performance,
ordering the defendant and the purchasers
together to execute the sale deed in terms
of the suit agreement, in favour of the
plaintiff after accepting the balance sale
consideration, within a period of one
month. It was further decreed that in case
the defendants do not execute a sale deed,
as ordered, despite the plaintiff paying the
balance sale consideration within a
month, the plaintiff would be entitled to
get the sale deed executed through
process of Court.

10. Aggrieved, the defendant and the
purchasers have joined in the present
appeal preferred under Section 100 of the
Code. This Appeal was admitted to
hearing on 24.09.1998, on the following
substantial questions of law:

"(1) Whether the time was the
essence of the agreement for sale in
question and non-compliance of the terms
of the suit agreement by the plaintiffrespondent would result in revocation of
the agreement for sale by the appellant
No.1?

(2) Whether the agreement for sale in
question was voidable at the option of the
appellant no.1 in view of Section 55 of the
Indian Contract Act?
2 All. Ram Nihore & Ors. Vs Aiyab Lal
723

(3) Whether the judicial discretion
exercised by the learned trial Court in
refusing to decree the suit for specific
performance could be interfered with by
the lower appellate Court ignoring the
provisions of Section 10, 16 and 20 of the
Specific Relief Act?"

11. This Appeal was heard across a
number of days. It was heard on
20.02.2019,
25.02.2019,
28.02.2019,
07.03.2019, 08.03.2019, 11.03.2019 and
27.03.2019 when judgment was reserved.
On 11.03.2019, during the course of
hearing, a further substantial question of
law was framed, that reads:

"Whether
a
suit
for
Specific
Performance instituted by a vendee after
the vendor has executed a sale deed in
favour of a third party can be decreed
without there being a relief seeking
cancellation of the sale deed executed in
favour of the third party?"

12. Sri K.M. Garg, learned Advocate
has been heard on behalf of the Defendant
and the purchasers (the appellants) and Sri
C.S. Agnihotri, learned Advocate on
behalf of the plaintiff (respondent).

13. The first submission advanced
on behalf of the defendant to assail the
judgment of the lower Appellate Court is
that the finding of the learned Judge in
Appeal to the effect that time was not
essence of the contract is not the case of
either party, which according to the
learned counsel for the defendant, could
never have been arrived at on the
pleadings and the evidence of parties.

14. Learned counsel for the
defendant has, in this connection, invited
the attention of the Court to the dock
evidence of PW-1, where on 08.01.1985,
he has testified as under:

"०२.०७.१९८० को मैंने राम जनहोर को
१८००/- रुपया देकर इकरार नामा जलखाया था
और इ इकरार नामा में यह जलखा गया था
जक बाकी ६२६०/- रुपया देकर के जववाजदत
भूजम का बैनामा करा लेंगे। यजद २-२-८१
बैनामा की रजििरी नहीिं करा लूगा या २-८-८०
का माहदया बय इकरारनामा रद्द मझा
िावे।"

15. In order to further buttress his
contention that time was of the essence,
learned counsel for the defendant has
drawn the attention of the Court to the
following recital in the suit agreement:

"मुझको मुबजलग 1800/- एक हिार आठ
 ौ रुपया आि नकद रुबरु ब रजििरार
 ाहब करछना के श्री अिायबलाल महािन
मिकूर े बतौर िर बयाना के जमल गया
बाकी मुबजलग 6260/- छ: हिार दो ौ रुपया
बरवक्त बैनामा रुबरु ब रजििार ाहब
करछना के लूाँगा यह तय पाया है लेहािा
बखुशी व रिामन्दी अपनी व जबला दबाव
जक ी दू रे के मैं एकरार करता हाँ जक दो
फरवरी न 1981 ई० तक मे िब भी मिकूर
के पा पूरा रुपया हो िायेगा और महािन
इ की ूचना मुझे जलल्दखत या मौल्दखक िै े ही
देगे मैं उनकी ुजवधानु ार जनम्नजलल्दखत
िायदाद का बैनामा उनके हक मे कर दूाँगा
और अगर महािन अन्दर जमयाद मुकरचरा के
बैनामा नहीिं करवा लेते तो उनका िर बयाना
रद्द
 मझा
िायेगा
और
मै
िायदाद
जनम्नजलल्दखत को दू रे के हाथ बेचने का
अजधकारी हाँगा।"

16. Learned counsel for the
defendant has urged that from the
aforesaid recital in the agreement and the
724 INDIAN LAW REPORTS ALLAHABAD SERIES
testimony of the plaintiff in the witness
box extracted above, the intention of the
parties on a true construction of the suit
agreement about time being of the essence
is
indisputable.
He
submits
that
determining a date in the agreement
coupled with a covenant to the effect if by
that date the plaintiff fails to get a sale
deed executed, the suit agreement would
be deemed to be cancelled and further that
the defendant would be free to alienate
the suit property in favour of any third
party, is clearly indicative of the intent
that time was of essence. In support of his
contention, learned counsel for the
defendant has placed reliance on a
decision of the Hon'ble Supreme Court in
M/s. Hind Construction Contractors by
its
sole
proprietor
Bhikamchand
Mulchand Jain (Dead) by L.R's vs.
State
of
Maharashtra1,
where
in
paragraph 7 of the report, it has been held:

"7. The first question that arises for
our consideration, therefore, is whether
time was of the essence of the contract
that was executed between the parties on
July 12, 1955 (Ex. 34). It cannot be
disputed that question whether or not time
was of the essence of the contract would
essentially be a question of the intention
of the parties to be gathered from the
terms of the contract. ....."

17. Sri K.M. Garg, learned counsel
for the defendant has further depended on
the decision of the Supreme Court in Smt.
Chand Rani (dead) by LRs vs. Smt.
Kamal Rani (dead) by LRs2, where in
paragraphs 12, 18, 19, 20, 24, 25, 26 and
28 of the report, it has been said thus:

"12. The Division Bench of the High
Court erred in its construction of clause
(1) of the suit agreement. In the case of an
agreement for sale of immovable property
time is never regarded as the essence of
the contract. It would be an essence of the
contract only when it is specifically
stipulated or it clearly emerges by way of
implication. That is not the case here. The
word "only" occurring under clause (1) of
the suit agreement would qualify only the
amount and not the time for payment. In
support of this argument the learned
counsel relied on Gomathinayagam Pillai
v. Pallaniswami Nadar [(1967) 1 SCR 227
: AIR 1967 SC 868], Hind Construction
Contractors v. State of Maharashtra
[(1979) 2 SCC 70 : (1979) 2 SCR 1147]
and Jamshed Khodaram Irani v. Burjorji
Dhunjibhai [AIR 1915 PC 83].

18. It is a well-accepted principle
that in the case of sale of immovable
property, time is never regarded as the
essence of the contract. In fact, there is a
presumption against time being the
essence of the contract. This principle is
not in any way different from that
obtainable in England. Under the law of
equity which governs the rights of the
parties in the case of specific performance
of contract to sell real estate, law looks
not at the letter but at the substance of the
agreement. It has to be ascertained
whether under the terms of the contract
the parties named a specific time within
which completion was to take place,
really and in substance it was intended
that it should be completed within a
reasonable time. An intention to make
time the essence of the contract must be
expressed in unequivocal language.

19. We will now refer to the
decisions
of
this
Court.
In
Gomathinayagam Pillai case[(1967) 1
SCR 227 : AIR 1967 SC 868] it was held
at pages 231 to 233:

"... Section 55 of the Contract Act
which deals with the consequences of
2 All. Ram Nihore & Ors. Vs Aiyab Lal
725
failure to perform an executory contract at
or before the stipulated time provides by
the first paragraph:

''When a party to a contract promises
to do a certain thing at or before a
specified time, or certain things at or
before specified times, and fails to do any
such thing at or before the specified time,
the contract, or so much of it as has not
been performed, becomes voidable at the
option of the promisee if the intention of
the parties was that time should be of the
essence of the contract.'

It
is
not
merely
because
of
specification of time at or before which
the thing to be done under the contract is
promised to be done and default in
compliance therewith, that the other party
may avoid the contract. Such an option
arises only if it is intended by the parties
that time is of the essence of the contract.
Intention to make time of the essence, if
expressed in writing, must be in language
which is unmistakable: it may also be
inferred from the nature of the property
agreed to be sold, conduct of the parties
and the surrounding circumstances at or
before the contract. Specific performance
of a contract will ordinarily be granted,
notwithstanding default in carrying out
the contract within the specified period, if
having regard to the express stipulations
of the parties, nature of the property and
the surrounding circumstances, it is not
inequitable to grant the relief. If the
contract relates to sale of immovable
property, it would normally be presumed
that time was not of the essence of the
contract. Mere incorporation in the
written agreement of a clause imposing
penalty in case of default does not by
itself evidence an intention to make time
of the essence. In Jamshed Khodaram
Irani v. Burjorji Dhunjibhai [ILR 40 Bom
289] the Judicial Committee of the Privy
Council observed that the principle
underlying Section 55 of the Contract Act
did not differ from those which obtained
under the law of England as regards
contracts for sale of land. The Judicial
Committee observed:

''Under that law equity, which
governs the rights of the parties in cases
of specific performance of contracts to
sell real estate, looks not at the letter but
at the substance of the agreement in order
to
ascertain
whether
the
parties,
notwithstanding
that
they
named
a
specific time within which completion
was to take place, really and in substance
intended more than that it should take
place within a reasonable time .... Their
Lordships are of opinion that this is the
doctrine which the section of Indian
Statute adopts and embodies in reference
to sales of land. It may be stated concisely
in the language used by Lord Cairns in
Tilley v. Thomas [(1867) 3 Ch App 61] :

"The construction is, and must be, in
equity the same as in a Court of law. A
Court of equity will indeed relieve
against,
and
enforce,
specific
performance, notwithstanding a failure to
keep the dates assigned by the contract,
either for completion, or for the steps
towards completion, if it can do justice
between the parties, and if (as Lord
Justice Turner said in Roberts v. Berry
[(1853) 3 De GM &G 284] ) there is
nothing in the ''express stipulations
between the parties, the nature of the
property,
or
the
surrounding
circumstances' which would make it
inequitable to interfere with and modify
the legal right. This is what is meant, and
all that is meant, when it is said that in
equity time is not of the essence of the
contract.
Of
the
three
grounds
...
mentioned
by
Lord
Justice
Turner
''express
stipulations'
requires
no
726 INDIAN LAW REPORTS ALLAHABAD SERIES
comment. The ''nature of property' is
illustrated by the case of reversions,
mines, or trades. The ''surrounding
circumstances' must depend on the facts
of each particular case."

Their Lordships will add to the
statement just quoted these observations.
The special jurisdiction of equity to
disregard the letter of the contract in
ascertaining what the parties to the
contract are to be taken as having really
and in substance intended as regards the
time of its performance may be excluded
by any plainly expressed stipulation. But
to have this effect the language of the
stipulation must show that the intention
was to make the rights of the parties
depend on the observance of the timelimits prescribed in a fashion which is
unmistakable. The language will have this
effect if it plainly excludes the notion that
these
time-limits
were
of
merely
secondary importance in the bargain, and
that to disregard them would be to
disregard
nothing
that
lay
as
its
foundation. ''Prima facie, equity treats the
importance of such time-limits as being
subordinate to the main purpose of the
parties, and it will enjoin specific
performance notwithstanding that from
the point of view of a court of law the
contract has not been literally performed
by the plaintiff as regards the time-limit
specified.'"

20. In Govind Prasad Chaturvedi v.
Hari Dutt Shastri [(1977) 2 SCC 539]
following the above ruling it was held at
pages 543-544: (SCC para 5)

"... 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. [Vide Gomathinayagam
Pillai v. Pallaniswami Nadar [(1967) 1
SCR 227 : AIR 1967 SC 868] (at p. 233).]
It may also be mentioned that the
language used in the agreement is not
such as to indicate in unmistakable terms
that the time is of the essence of the
contract. The intention to treat time as the
essence of the contract may be evidenced
by circumstances which are sufficiently
strong to displace the normal presumption
that in a contract of sale of land
stipulation as to time is not the essence of
the contract."

(emphasis supplied)

24. From an analysis of the above
case-law it is clear that in the case of sale
of immovable property there is no
presumption as to time being the essence
of the contract. Even if it is not of the
essence of the contract the Court may
infer that it is to be performed in a
reasonable time if the conditions are:

1. From the express terms of the
contract;

2. from the nature of the property;
and

3.
from
the
surrounding
circumstances, for example: the object of
making the contract.

25. In the above legal background,
we will now look at the terms of the suit
contract dated August 26, 1971. The
agreement reads as under:

"Now, therefore this agreement to
sell witnesseth and the parties hereto have
agreed as follows:

1. That in pursuance of the said
agreement, the 1st party has received a
sum of Rs 30,000 (rupees thirty thousand
only) from the second party as earnest
money the receipt whereof the 1st party
hereby
separately
acknowledges.
Rs
98,000 (rupees ninety-eight thousand
only) will be paid by the second party to
2 All. Ram Nihore & Ors. Vs Aiyab Lal
727
the 1st party within a period of ten days
only and the balance of Rs 50,000 (rupees
fifty thousand only) at the time of
registration of the sale deed before the
Sub-Registrar, New Delhi.

2. That the 1st party has completed
the house with all fixtures and fittings and
it has been agreed to between the parties
that the 1st party shall take necessary
steps for immediate redemption of the
said property from the said mortgagee and
shall inform the second party in writing
about
the
completion
of
the
said
redemption.

3. That the 1st party shall apply
immediately for the permission to sell to
the income tax authorities and after
getting the permission to sell by getting
an income tax clearance certificate in
respect of the said property the sale deed
of the same shall be executed by the 1st
party in favour of the second party or her
nominee/nominees on or before October
31, 1971.

4. That in case 1st party fails to
execute and get the sale deed registered
within the period stipulated in para 3
above, the 2nd party shall have the right
to get this agreement enforced by specific
performance through the court of law.

5. That if the second party fails to
pay the balance sale consideration and get
the sale deed executed and registered
within the specific period mentioned in
para 3 above, the earnest money of Rs
30,000 (rupees thirty thousand only) shall
stand forfeited to the 1st party and this
agreement deemed null and void.

6. That the 1st party shall pay all
taxes, rates municipal taxes up to the date
of registration of the sale deed and that
the previous deeds and other documents
pertaining to the said plot No. 30, Block
''K' sanctioned place and completion
certificate
from
the
Municipal
Corporation, Delhi in respect of the superstructure built on the said plot shall be
handed over along with the vacant
possession of first floor by September 30,
1971 and the front portion of the property
by the first party to the second party at the
time of registration of the sale deed."

26. Then comes the question as to the
payment of Rs 98,000. The question is as
to what is the meaning of the words
"within a period of 10 days only"? Does it
apply to the amount or the time-limit of
10 days from August 26, 1971. The trial
court was of the view that the word "only"
was meant to stress and qualify the
amount of Rs 98,000 and cannot be read
to mean as if payment within 10 days was
the essence of the contract. On this aspect,
the appellate court takes the contrary view
and holds that the amount of Rs 98,000
ought to have been paid on or before
September 6, 1971. Failure to do so
would constitute a breach committed by
the defendant. We are of the considered
view that the Division Bench is right in its
conclusion. As rightly pointed out in the
judgment under appeal, the word "only"
has been used twice over

(1) to qualify the amount of Rs
98,000 and

(2) to qualify the period of 10 days.

28. The analysis of evidence would
also point out that the plaintiff was not
willing to pay this amount unless vacant
delivery of possession of one room on the
ground floor was given. In crossexamination it was deposed that since
income tax clearance certificate had not
been obtained the sum of Rs 98,000 was
not paid. Unless the property was
redeemed the payment would not be
made. If this was the attitude it is clear
that the plaintiff was insisting upon
delivery of possession as a condition
precedent for making this payment. The
728 INDIAN LAW REPORTS ALLAHABAD SERIES
income tax certificate was necessary only
for completion of sale. We are unable to
see how these obligations on the part of
the defendant could be insisted upon for
payment of Rs 98,000. Therefore, we
conclude that though as a general
proposition of law time is not the essence
of the contract in the case of a sale of
immovable property yet the parties
intended to make time as the essence
under clause (1) of the suit agreement.
From this point of view, we are unable to
see how the case in Nathulal [(1969) 3
SCC 120 : (1970) 2 SCR 854] could have
any application to the facts of this case."

18. Sri C.S. Agnihotri, learned
counsel for the plaintiff countering the
submission of Sri Garg, learned counsel
for the defendant, submits that what is
evident from the decision relied upon by
the की नहीिं प्राप्त हुई defendant, is that in
cases relating to sale of immoveable
property, the Rule is that time is not of the
essence, even if a specific date for
performance
is
specified.
The
presumption is always in favour of the
time not being of the essence where the
contract is about sale of immoveable
property. In particular, he has submitted
that the principles laid down by their
Lordships in M/s. Hind Construction
(supra) would not at all be attracted to the
question involved in this case, inasmuch
as, M/s. Hind Construction (supra) related
to a works contract, and not a contract
regarding sale of immoveable property.
He has emphasized that contracts for the
sale of immoveable property stand on a
very different pedestal. So far as the
question of time being of the essence is
concerned, he submits that the other
decision relied upon by the learned
counsel for the defendant in Chand Rani
(supra) is more than eloquent in itself, and
by reference to other authority noticed
there, it is apparently a well settled
principle of law that in transactions of
sale of immoveable property, time is not
of the essence.

19. In order to appreciate the
submissions on this question advanced by
the learned counsel for parties, reference
to the terms of the suit agreement are of
prime importance. It has been noticed
above that the covenant in the suit
agreement, that has decisive bearing on
the issue whether time is of essence, is
encapsuled in the words that say, that the
defendant agrees to execute a sale deed in
favour of the plaintiff upto 02.02.1981
whenever the plaintiff has the whole
money ready on him, and he conveys
information to the defendant to this effect,
written
or
verbal,
whereupon
the
defendant as per convenience of the
plaintiff, would execute the sale deed. If
within the period of time agreed the
plaintiff does not get a sale deed executed,
the said agreement would stand avoided,
and the defendant shall have the right to
alienate the suit property in favour of any
third party. The fact that the parties,
indeed, had covenanted in the aforesaid
terms is affirmed by the dock evidence of
the plaintiff, who deposing as PW-1, has
said that in case by 02.02.1981, sale deed
was not got executed by him, it was
agreed that the suit agreement would be
deemed to be avoided. It, therefore, turns
upon the true intention of parties to be
gathered from a discernible construction
to be placed upon the covenant regarding
time in the suit agreement.

20. The decision in Chand Rani
(supra) indicates that mere stipulation of a
date, or the fixation of a period of time
within which the contract must be
2 All. Ram Nihore & Ors. Vs Aiyab Lal
729
performed would not make it the essence
of contract, in cases governing contracts
relating to immoveable property. At the
same time, if the language employed is
couched
in
such
unmistakable
and
specific terms, that leave no doubt about
the matter that completion of transaction
should be done within the specified time,
or within a reasonable time, that intention
to make time the essence may be inferred.
The decision in Chand Rani (supra) would
further indicate that the Court quoted with
approval the principle in an earlier
decision of their Lordships in Govind
Prasad Chaturvedi vs. Hari Dutt Shastri
and another3 to the effect that even if not
regarded as the essence of the contract,
inference as to time for its performance
within a reasonable time period may be
drawn under conditions enumerated in
paragraph 24 of the report in Chand Rani
(supra): (1) the express terms of the
contract; (2) the nature of the property;
and (3) the surrounding circumstances, for
example: the object of making the
contract.

21. Here, time being essence of the
contract falls to be examined under the
category where the express terms of the
contract make it so. The question about time
being of the essence flows from Section 55
of the Indian Contract Contract Act. Section
55 of the Contract Act, reads thus:

"55. When a party to a contract
promises to do a certain thing at or before
a specified time, or certain things at or
before specified times, and fails to do any
such thing at or before the specified time,
the contract, or so much of it as has not
been performed, becomes voidable at the
option of the promisee, if the intention of
the parties was that time should be of the
essence of the contract.

If it was not the intention of the
parties that time should be of the essence
of the contract, the contract does not
become voidable by the failure to do such
thing at or before the specified time; but
the promisee is entitled to compensation
from the promisor for any loss occasioned
to him by such failure.

If, in case of a contract voidable on
account of the promisor's failure to
perform his promise at the time agreed,
the promisee accepts performance of such
promise at any time other than that
agreed,
the
promisee
cannot
claim
compensation for any loss occasioned by
the non-performance of the promise at the
time agreed, unless, at the time of such
acceptance he gives notice to the promisor
of his intention to do so."

22. What is relevant in the context
of the question that arises here is the first
part of Section 55 (supra). It embodies a
statutory principle that where time is
specified for certain acts or things to be
done by one party, who is the promisor in
relation to that part, failure to do that act
or thing at or before the time specified,
renders the obligation voidable at the
option of the other party, that is to say, the
promisee in relation to the act or thing to
be done. This principle, however, is
applicable in relation to the contract
where it is the intention of parties that
time should be of the essence.