# GOMATHINAYAGAM PILLAI AND ORS v. PALLANISWAMI NADAR September 2, 1966

- **Citation:** [1967] 1 S.C.R. 227
- **Court:** Supreme Court of India
- **Decided:** 1966-09-02
- **Bench:** K. N. Wanchoo, J.C. Shah, R. S. Bachawat
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gomathinayagam-pillai-and-ors-v-pallaniswami-nadar-september-2-1966-3816
- **Pages:** 16

## Headnote

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Contract, Act, 1872, s. 55-Tinie to be regarded as essence of contract
-Conditions for-Speci{i:c performance-Whether decree can be granted
unless party c/aim1'ng can show he was ready and willing at all times to
perform his part.
G and his son C, the first and second appellants, were owners of a
plot of.land which they verbally agreed to sell to the respondent on March
5, 1959, at a time when P, another son of G, was on trial for murder and
the latter urgently needed funds for his defence. On that date, as against
the total agreed price of Rs. 15, 106 the respondent paid them Rs. I 006
as an advance amount for which a receipt was executed by the two appellants. No time was fixed for the completion of the sale. On Apnl 4,
1959, upon receipt of another amount of Rs. 2,000 from the respondent,
the two appellants executed a writing stipulating that the sale deed would
be executed on or before April 15, 1959. This writing also incorporated a
default clause imposin.g a penalty upon tJie party failing to complete the
sale by the agreed date. The sale deed was however not executed by that
_date for which different reasons were given by each of the parties.
On
April 15. another agreement was executed whereby it was agreed to com~
plete the sale by 30th April 1959 on the same terms and conditions, but
it was not completed by that date either. On July 30, 1959, appellants I and
2 wrote to the respondent stating that the agreement was subject to a spe·
cific undertaking that time was of the essence of the agreement and since
the respondent bad failed to carry out the agreement by April 30, 1959.
th~· agreement stood cancelled and the 'advance amount stood forefeitcd.
Thereafter on July 9, 1959 appellants I and 2 agreed to sell the land to
the 3rd appellant. On August
3, 1959 the respondent
deposited
the
balance of the amount payable by him in a bank and informed the appellants that he was ready and willing to carry out his part of the contract;
and he called upon appellants I and 2 to execute the sale deed within 3
days against payment of the balance of the price. The appellants having
failed to execute the sale deed the respondent instituted the present suit
against them for a decree for specific .performance of the agreement.
The High Court reYersed the decision of the Trial Court, and decreed
the claim of the respondent for specific performance.
On appeal to this Court,
HELD: (By Wanchoo and Shah,
JJ.,
Bachawat,
J. di<.<enting)
Although the High Court had rightly held that time was not of the essence
of the contract, the finding of the Trial Court that after ett!<lring into the
contract the respondent was not ready and willing to perform his part of
the contract must be accepted; a decree for specific performance of the
contract could not therefore be granted.
The agreements. dated April 4 and April 15 did not express in unmistakable language that time was to be of the essence and existence of the
default clanse would not necessarily evidence such intention. Fixation of
the period within which the contract is to be performed does not make
the stipulation as to time of the essence of the contract. Intention· to make
228
SUPREME COURT REPORTS
[1967) l S.C.R.
time of tho essence of the contract may be evidenced by e'tber express
stipulations or by circumstances which are sufficiently strong to displace
the ordinary pr05umption that in a contract of sale of land stipulations as
to time are not of the essence.
In the present case thcirc was no express
stipulat:on, and the circumstances were not such as to indicate that it was
the intention of the parties that time was intended to be of the essence of
the contract.
[233E-H; 238 E-F)
Jams/zed Klwdaram Irani v. Burjorji Dlzunjibhai, I.LR. 40 Born. 289
and Stickney v. Keeble. L.R. (1915) A.C. 386, referred to.
Before he could bo awarded a decree for specific performance, the reoponde!ll bad to prove his readiness and willingness continuously from the
date of the contract till the date

## Text

_Characters 0–39,819 of 45,106. This is a partial read: ask again with offset=39819 for what follows._

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GOMATHINAYAGAM PILLAI AND ORS.
v.
PALLANISWAMI NADAR
September 2, 1966.
B
[K. N. WANCHOO, J.C. SHAH AND R. S. BACHAWAT, JJ.]
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ff
Contract, Act, 1872, s. 55-Tinie to be regarded as essence of contract
-Conditions for-Speci{i:c performance-Whether decree can be granted
unless party c/aim1'ng can show he was ready and willing at all times to
perform his part.
G and his son C, the first and second appellants, were owners of a
plot of.land which they verbally agreed to sell to the respondent on March
5, 1959, at a time when P, another son of G, was on trial for murder and
the latter urgently needed funds for his defence. On that date, as against
the total agreed price of Rs. 15, 106 the respondent paid them Rs. I 006
as an advance amount for which a receipt was executed by the two appellants. No time was fixed for the completion of the sale. On Apnl 4,
1959, upon receipt of another amount of Rs. 2,000 from the respondent,
the two appellants executed a writing stipulating that the sale deed would
be executed on or before April 15, 1959. This writing also incorporated a
default clause imposin.g a penalty upon tJie party failing to complete the
sale by the agreed date. The sale deed was however not executed by that
_date for which different reasons were given by each of the parties.
On
April 15. another agreement was executed whereby it was agreed to com~
plete the sale by 30th April 1959 on the same terms and conditions, but
it was not completed by that date either. On July 30, 1959, appellants I and
2 wrote to the respondent stating that the agreement was subject to a spe·
cific undertaking that time was of the essence of the agreement and since
the respondent bad failed to carry out the agreement by April 30, 1959.
th~· agreement stood cancelled and the 'advance amount stood forefeitcd.
Thereafter on July 9, 1959 appellants I and 2 agreed to sell the land to
the 3rd appellant. On August
3, 1959 the respondent
deposited
the
balance of the amount payable by him in a bank and informed the appellants that he was ready and willing to carry out his part of the contract;
and he called upon appellants I and 2 to execute the sale deed within 3
days against payment of the balance of the price. The appellants having
failed to execute the sale deed the respondent instituted the present suit
against them for a decree for specific .performance of the agreement.
The High Court reYersed the decision of the Trial Court, and decreed
the claim of the respondent for specific performance.
On appeal to this Court,
HELD: (By Wanchoo and Shah,
JJ.,
Bachawat,
J. di<.<enting)
Although the High Court had rightly held that time was not of the essence
of the contract, the finding of the Trial Court that after ett!<lring into the
contract the respondent was not ready and willing to perform his part of
the contract must be accepted; a decree for specific performance of the
contract could not therefore be granted.
The agreements. dated April 4 and April 15 did not express in unmistakable language that time was to be of the essence and existence of the
default clanse would not necessarily evidence such intention. Fixation of
the period within which the contract is to be performed does not make
the stipulation as to time of the essence of the contract. Intention· to make
228
SUPREME COURT REPORTS
[1967) l S.C.R.
time of tho essence of the contract may be evidenced by e'tber express
stipulations or by circumstances which are sufficiently strong to displace
the ordinary pr05umption that in a contract of sale of land stipulations as
to time are not of the essence.
In the present case thcirc was no express
stipulat:on, and the circumstances were not such as to indicate that it was
the intention of the parties that time was intended to be of the essence of
the contract.
[233E-H; 238 E-F)
Jams/zed Klwdaram Irani v. Burjorji Dlzunjibhai, I.LR. 40 Born. 289
and Stickney v. Keeble. L.R. (1915) A.C. 386, referred to.
Before he could bo awarded a decree for specific performance, the reoponde!ll bad to prove his readiness and willingness continuously from the
date of the contract till the date of hearing of the suit to complete his part
of the contract, and if he failed in that, bis suit was liable to fail. The
Trial Court had found on the evidence
that the respondent was at no
time ready and willing to perform his part of the contract. This findi[l,I!
was never challen~ed before the High Court and the High Court did not
hold that the finding was incorrect.
(234 CJ
Ardeshir Mama v. Flora Sassoo11, L.R. 55 I.A. 360, referred to.
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(Per Bachawat J. dissenting) :
There was no specific issue on the
question whether the respoodent was ready and willing to perform the contract. The Trial Court was clearly wrong in inferr:ng that tho respondent
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was not ready and willing to perform the contract from the fact that from
April 30, 1959 upto the middle of July 1959 the respondent had not taken
any steps in the matter a~d from his failure to e<xplain the delay. If the
respondent wa. guilty of !aches, it was the duty of the 3ppellants to fix
a reasonable time for the completion of the sale. Mere delay, short of
waiver or abandonment of the contract, is no ground for refusing relief,
nor is it evidence of Jack of readiness and~ \Villingness.
The materials on
the record clearly indicated that the respondent was at an material times
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re•dy and willing to perform the contract. (239 E; 241 D-F]
Jamshed v. Burjorji, (1916) L.R. 43 I.A. 26 and Bank of India Ltd.
v. Jmmetji A. H. Chiney a11d Mis .. Chinoy and Company,
(1949) L.R.
77 I.A. 76, referred to.
CIVIL APPELLATE JURtSDlCTIO!< :
Civil Appeal No. 1043 of
1965.
F
Appeal by special leave from the judgment and order dated
December 17. 1964 of the Madras High C0urt in Appeal Suit No.
375 of 1961.
II.
R.
Goklwlc
and R. Ga11apatlty Iyer. for the appellants.
A. K. Sen and R. Gopalakris/111011, for the respondent.
The Judgment of WANCHOO and SHAH, JJ. was delivered by
SHAH, J. BACHAWAT, J. delivered a dissentmg Opinion.
Shah, J. This appeal with special leave is filed against the
judgment of the High Court of Judicature at Madras reversing the
decree of the Subordinate
Judge, Ramnathapuram in original
suit No. 30 of 1959.
Gomathinayagam Pillai and his son Chinaathambia Pillai-hereinafter collectively referred to as appellants
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GOMATHINAYAGAM V. PALAN!SWAMI- (Shah, J.)
229
1 & 2 -were owners of a plot of land Survey No. 1155/2-3 in
village Periyakulam, District
Ramnathapuram. In March 1959
Palaniappa Pillai son of the first appellant was standing trial in
a Criminal Court for the offence of murder and the first appellant
was in need of funds to defend him. On March 5, 1959 appellants
1 & 2 agreed verbally to sell S. No. 1155/2-3 to Palaniswami Nadar
-respondent in
this appeal-for Rs.
15,106/-
and received
Rs. 1006/- in part payment of the price. No time was fixed for completion of the sale. A receipt Ext. A-1 was executed by appellants
1 & 2 reciting that the land was agreed to be sold by appellants
1 & 2 to the respondent and thal Rs. 1006/- were received as "advance amount." On March 31, 1959 Palaniappa Pillai was convicted of the offence of murder and sentenced to imprisonment for
life. On April 4, 1959 appellants 1 & 2 received Rs. 2,000/- from
the respondent and executed a writing stipulating that the sale deed
will be executed on or before April 15, 1959. It was recited in that
writing that appellants 1 & 2 had agreed to sell on March 5, 1959
and had received Rs. 1006/- on that date, and Rs. 2,000/- on April
4, 1959 and it was further recited that appellants 1 & 2 "shall settle
the aforesaid sale within 2nd Chittiral, Vikhari (15th April 1959}
i'n favour of" the respondent "that the amount shall be paid as per
the particulars of the receipt of sale consideration; that even though"
appellants 1 & 2 "are prepared to settle the sale accordingly, if"
the respondent "raises any objection whatever to settle the sale,
he shall lose the advance amount of.Rs. 3006/- (Rupees Three thousand and six only); and that, even though" the respondent "is prepared to settle the sale, if" appellants 1 & 2 "raise any objection
whatever to settle the sale, they shall add a sum of Rs. 3000/- to the
aforesaid advance amount of Rs. 3006/- and pay in all, a sum of
Rs. 6006/- (Rupees six thousand and six only) to" the respondent.
The agreement clearly incorporated a default clause imposing
penalty upon the party failing to carry out the terms of the contract.
But the sale deed was not executed on or before April 15,
1959. Different reasons were given by the parties for not completing the sale by the date stipulated. It was the case of the respondent that appellants 1 & 2 wanted to consult a lawyer and to ascertain whether it was necessary to secure attestation by the first
appellant's son Palaniappa and his daughters because the property
originally belonged to Ulagammal, wife of the first appellant. It
was the case of appellants 1 & 2 that they were full owners of the
land agreed to be sold and that the children of the first appellant
were not interested in the land and the respondent set up false ex"
cuses and neglected to take the sale deed as stipulated. On April 15
1959, another agreement was executed. It was recited in the agreement :
"As certain unforeseen circumstances have arisen to
settle the sale on this day as has been fixed as per the
230
SUPREME COURT REPORTS
fl 967) I S.C.R.
Agreement executed on 4th April 1959 by us three Individuals, we have decided to consult the Vakil so as to settle
the sale within 30th April 1959 and to settle the sale and
to bind ourselves 'as per the conditions mentioned in the
previous Agreement should whomsoever fail to finalise
the sale."
The sale was not completed even on April 30,1959. On July 30, 1959,
appellants 1 &2 addressed a letter to the respondent stating that the
agreement of sale was subject to a "specific undertaking" that time
was of the essence of the agreement and it was twice extended at the
request of the respondent, and since the respondent had failed to
carry out the agreement even by April 30, 1959, the agreement stood
cancelled and the amount of Rs. 3006/- paid by the respondent
stood forfeited.
On July 31, 1959 the appellants agreed to sell the
land to P.K. Banarusami Naidu-who will hereinafter be referred
to as appellant No. 3. On August 3, 1959 the respondent deposited
the balance payable by him under the agreement of sale in a Bank
and by letter dated August 4, 1959 informed appellants 1 & 2 that
time was not of the essence, and that he was ready and willing to
carry out his part of the contract, and the respondent called upon
appellanL~ I & 2 to execute a sale deed within three days of the receipt of the letter against payment of the balance of the price. He
also offered to purchase the. stamp paper and to have the sale deed
prepared for execution.
Appellants 1 & 2 having failed to execute the sale-deed the
respondent instituted original suit No. 30 of 1959 in the Court of the
Subordinate Judge, Ramnathapuram, against appellants, l, 2 & 3
and one Sethuramalingam Pillai (who was impleaded on the ground
that he was a mortgagee of the property by deed executed on September 15, 1952 for Rs. 6000/-) for a decree for specific performance
of the agreement, alleging that he was at all material times ready and
willing to perform his part of the contract and to obtain the sale
deed and it was only at the request of appellants l & 2 that execution of the sale deed was twice postponed and that appellants
I & 2 had committed breach of the contract. The suit was resisted
by appellants I, 2 & 3. The learned Trial Judge dismissed the
suit holding that under the agreements dated April 4, 1959 and April
15, 1959 time was of the essence, that even if it be held otherwise
the respond~nt "was never ready and willing to perform his part of
the contract", that he had committed default in carrying out his
part of the bargain, that delay on the part of the respondent to
claim his rights under the agreement of sale had caused the interest
of the third appellant to intervene and on that account the respondent was estopped from enforcing the agreement, and that delay was
evidence of abandonment of the contract or of waiver of the right to
enforce the contract. The Trial Judge accordingly rejected the
claim of the respondent for specific performance, but awarded on
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GOMATHINAYAGAM v. PALANISWAMI (Shah, J.)
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a concession made by appellants 1 & 2 a decree for recovery of
Rs. 3006/- with interest at 6 per cent. from the date of the decree
till realisation against appellants 1 & 2. Against the decree, the res~
pondent appealed to the High Court of Judicature at Madras. The
High Court opined that time was not of the essence of the contract,
that delay on the part of the respondent in claiming completion of
sale between April 30, 1959 and July 30, 1959 was not undue delay
and there was. neither abandonment of the contract, nor waiver,
and that "even as a defaulting party", as found by the Trial Court,
the respondent was entitled to a decree for specific performance of
the agreement of sale. The High Court accordingly reversed the
decree passed by the Trial Court, and decreed the claim of the respondent for specific performance.
In this appeal with special leave, two questions fall to be determined: (!) whether under the agreement of sale, time was of the
essence; and (2) whether as alleged by appellants, !, 2 & 3, the respondent was not ready" and willing to perform his part of the contract, and was on that account disentitled to a decree for specific
performance.
The facts which have a material bearing on the first question
have already been set out. Section 55 of the Contract Act which
deals with the consequences of 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 co.ntract 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 cir.cumstances, 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
232
SUPREME COURT REPORTS
[1967] 1 S.C.R.
essence of the contract.
Mere incorporation in the written agreement of a clause imposing penalty in case of default docs not by
itself evidence an intention to make time of the essence. In Jamshed
Khodaram Irani v. Burjorji Dhunjibltai (')the
Judicial Committee
of the Privy Council observed that the principle underlying s. 55 of
the Co!ltract Act did not differ from those which C•btaincd 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 lo
sell real estate, looks not at the Jetter 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 the 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. 111omas (1867) L.R. 3 Ch. 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 G. M. & G. 284), there
is nothing in the 'express stipulations between the
parties, the nature of the property, or the surrounding
circwnstances,' which would make it inequitable lo
interfere with and modify the legal right. This is what
is meant, and all that is meant, when it is said that
in ecp.1ity time is not of the essence of the contract.
Of the three grounds .
mentioned by Lord
Justice Turner ·express stipulations•
requires
no
comment. The 'nature of the 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
(I) 1.L.R. 40 Born. 289.
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GOMATH!NAYAGAM v. PALANISWAMI (Shah, J.)
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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 intentipn was tc make the rights
of the parties depend on the observance of the time limits
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 mereiy 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 a>
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."
The Trial Court relied upon three circumstances in support of
its conclusion that time was of the essence of the contract of sale :
(i) though no time was prescribed by the oral agreement, in the
agreements writing dated April 4, 1959 and April 15, 1959 there
were definite stipulations fixing dates for performance of the contract; (ii) that the second and the third agreements contained clauses
which imposed penalties upon the party guilty of default; and
(iii) that appellants 1 & 2 were in urgent need of money and it was
to meet their pressing need that they desired to effect sale of the
property .. But the
agreements dated April 4 and April 15
do not express in unmistakable language that time was to be of the
essence and existence of the default clause will not necessarily evidence such intention. Fixation of the period within which the contract is to be performed does not make the stipulation as to time of
the essence of the contract. It is true that appellants 1 & 2 were
badly in ner l of money, but they had secured Rs. 3006/- from the
respondent ;md had presumably tided over their difficulties at least
temp0i-arily. There is no evidence that when the respondent did
not advance the full consideration they made other arrangements
for securing funds for their immediate needs. Intention to make
time of the essence of the contract may be evidenced by either
express stipulations or by circumstances which are sufficiently strong
to displace the ordinary presumption that in a contract of sale of
land stipulations as to time are not of the essence. In the present
case there is no express stipulation, and the_ circumstances are not
such as to indicate that it was the intention of the parties that time
was intended to be of the essence of the contract. It is true that even
if time was not originally of the essence, the appellants could by
notice served upon the respondent call upon him to take the-car:.
veyance within the time fixed and intimate that in default of compliance with the requisition the contract will be treated as can-
234
SUPRl!MB COURT Rl!PORTS
(1967] I S.C.R.
celled. As observed in Stickney v. Keeble (1) where in a contract
A
for the sale of land the time fixed for completion is not made of the
essence of the contract, but the vendor has been guilty of unnecessary delay, the purchaser.may serve upon the vendor a notice !Uniting a time at the expiration of which he will treat the contract as
at an end. In the present case appellants I & 2 have served no such
notice; by their letter dated July 30, 1959 they treated the contract
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as at an end. If the respondent was otherwise qualified to obtain
a decree for specific performance, his right could not be determined
by the letter of appellants I & 2.
But the respondent has claimed a decree for specific performance
and it is for him to establish that he was, since the date of the
contract, continuously ready and willing to perform his part of the
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contract. If he fails to do so, his claim for specific performance
must fail.
As observed by the Judicial Committee of the Privy
Council in Ardeshir Mama v. Flora Sasson(2):
"In a suit for specific performance, on the other hand, he
treated and was required by the Court to treat the contract as still subsisting. He had in that suit to allege, and
if the fact was traversed, he was required to prove a continuous readines and willingness, from the date of the
contract to the time of the hearing, to perform the contract
on his part. Failure to make good that averment brought
with it the inevitable dismissal of his suit."
The respondent must in a suit for specific performance of an agreement plead and prove that he was ready and willing to perform his
part of the contract continuously between the date of the contract
and the date of hearing of the suit. On this part of the case the
Trial Court recorded a clear finding against the respondent that hi(
was at no time ready and willing to perform his part of the contract.
The High Court did not consider the effect of this finding upon the
claim of the respondent and without expressing dissent with that
finding granted a decree for specific performance to the respondent.
It is necessary to consider the pleadings of the parties, the issues
raised, the findings recorded by the Trial Court and the basis on
which the appeal was prc:Ssed before the High Court by counsei for
the respondent. In paragraph-9 of the plaint the respondent averred
that he was always ready and willing to perform his part of the contract and to have the sale deed executed, but at the request of appellants I & 2 execution of the sale deed was postponed. This was
denied by appellants I, 2 & 3.
They pleaded that the respondent was not ready and willing to get the sale deed executed and that
he was deliberately putting off payment of the balance of the consideration and was delaying performance of the agreement. They
(t) LR. [191SJ A.C. 386.
(1) LR. SS I.A. J6J, 372.
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GOMATffiNAYAGAM V. PALANJSWAMJ (Shah, J.)
235
also pleaded that appellants 1 & 2 were "badly in need of money",
but . the respondent committed default in completing the sale as
stipulated. The Trial Judge raised two issues which are material
on this part of the case :
"2. Whether the plaintiff is not entitled to the specific performance of the sale of the suit properties in his favour ?
5. Whether the breach of the contract is due to the fault of the
defendents (appellants 1 & 2) or due to the fault of plaintiff
(the respondent) ?"
No specific issue was raised about the readiness and willingness
of the 'respondent to perform his part of the contract, but the second issue included trial of the plea raised by appellants, 1, 2 & 3.
The parties were, it appears, fully aware of what was required to be
proved, and Jed evidence in support of their respective cases. No
objection was raised in the Court of First Instance protesting against
the trial of that plea without a specific issue thereon.
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At the trial the respondent asserted that on April 15, 1959 he
was willing to take the sale deed from appellants 1 & 2, but on April
30, 1959 he was not ready to purchase the stamp paper or talce the
sale deed. Somewhat inconsistently he stated that on April 30,
1959 he met appellants 1 & 2 and called upon them to execute the
sale deed and appellant 1 told him that "he had urgent need to
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go for the case and that he would get possession only later and the
sale deed would be executed after his return". The trial Court considered the plea that the respondent was not ready and willing to
perform his part of the contract on the footing that time was not
of the essence. The Court referred to the admission made by the
respondent that he was not willing to take the sale deed on April 30,
1959, and then considered the question whether the sale was not com-
¥
pleted by April 30, 1959 on account of default on the part of the respondent or of appellants 1 & 2. On a consideration of the evidence,
the Trial Court came to the conclusion that the respondent was not
ready to complete the sale by April 30, 1959, since he wanted time
for consulting his lawyer as to the desirability of obtaining attestation of the children of appellant No. 1 in the proposed sale deed
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and that appellants I & 2 did not ask for postponement. The Trial
Court then proceeded to consider whether default was committed
by the respondent or by appellants I & 2, and observed that mere
assertion in the plaint that he was ready and willing to perform the
contract was not sufficient and his readiness and willingness had to
be judged from what he had done or from his conduct subsequent
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to the agreement, and on a review of the e'fidence came to the conclusion that the respondent committed default by not carrying
out the contract on April 30, 1959, and that even after April. 30,
1959 he was not willing to have the contract completed. The learned
•M Jl Sup.C.J./G6-l
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(1967] I S.C.R.
Judge observed that the reasons set up by the respondent for the
delay in taking steps in the matter were "obviously untrue.", and
that the respondent was trying to put the blame on the appellants
and inventing excuses to explain the omission in taking the sale
deed. He concluded in paragraph-18 of his judgment : "The
consideration of the evidence in the case discloses only one thing,
viz., that the plaintiff (the respondent) was never eager, prompt or
desirous or willing to take a sale deed in pursuance of Exts. A-2
and A-3. It is the plaintiff (the respondent) who committed default
in performance of his part of the agreement." The learned Judge
then observed that in his view time was of the essence of the contract
and even if it was not, the contract must be performed within a
reasonable time after the date fixed in the agreement dated April 4,
1959 and the agreement dated April 15, 1959, and this was not
done. The Trial Court thereafter summarised the evidence as to
the conduct of thq respondent and appellants I & 2 and held that
the respondent was "never ready and willing to perform his part of
the contract at any time."
The Trial Judge apparently confused two independent issues :
one of default in performance of the contract by the respondent and
the other of readiness and willingness of the respondent to carry out
his part of the contract.
As observed earlier, if time is not of the
essence of the contract, default occurs when a party serves a notice
making time of the essence and requires the other party within a
reasonable time fixed by the notice to carry out the terms of the
contract, and the party served with the notice fails to comply with
the requisition. In this case no such notice was served, and from
the mere delay in calling upon appellants I & 2 to complete the
contract, default on the part' of the respondent cannot be inferred.
But the Trial Court also came to the conclusion thijt the conduct
of the respondent as evidenced by his statement and his witnesses
proved that he was not ready and willing to perform his part of
the contract. This the Court inferred from the delay of three
months after April 30, 1959 and the evidence given by the
respondent to explain that delay and other circumstances.
The Trial Court expressly recorded a finding on issue No. 2
adverse to the claim of the respondent. The respondent had, as
already observed, claimed that he was ready and willing to perform
his part of the contract and appellants I, 2 & 3 had denied that claim.
Before he could be awarded a decree for specific performance, the
respondent had
to prove his
readiness and willingness continuously from the date of the contract till the date of hearing of the
suit and if he failed in that, his suit was liable to fail.
And the
Trial Colirt dismissed the respondent's suit on that ground also
The High Court could grant a decree for specific performance in
favour of the respondent against appellants I & 2 only if the Court
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GOMATHINAYAGAM V. PALAN!SWAMI (Shah, J.)
237
was satisfied that the respondent was continuously ready and willing
to perform his part of the contract from the date of the suit till
the date of hearing. But the respondent in the High Court did
not apparently challenge the finding of th.e Trial Court on that question against· the respondent. He merely invited the High Court
to decide the appeal on the footing that even if the respondent "had
defaulted in the sense that on April 30, 1959 or before that date the
respondent was not ready with the necessary funds to go through
the sale" he was entitled to a decree for specific performance.
The .statement so recorded is somewhat obscure : a ground for
rejecting the respondent's claim for specific performance will not
arise merely because the respondent was not ready with the necessary funds on April 30, 1959, if time was not of the essence. But
if the respondent was on April 30, 1959 not ready and willing to
perform his part of the contract, his suit must fail.
The Trial Court found that the respondent had committed
default in performing his part of the contract. This the Court
inferred from his statement made before the Court and the evidence
that for three months after the date fixed for performance no steps
were taken by the respondent for completion of the contract. That
inference however does not necessarily follow from mere delay. in
calling upon. appellants I & 2 to perform the contract. But the
Trial Court also found that the respondent was at no time ready and
willing to perform his part of the contract. This finding was never
challenged before the High Court and the High Court did not hold
that the finding was incorrect. Counsel for the respondent urged
that the finding by the Trial Court on the issue of readiness and
willingness was "without evidence, vague and perverse" and that
the learned Judges of the High Court were justified in "completely
ignoring" it and in granting a decree to the respondent for specific performance, notwithstanding that finding. It is difficult to
characterise the finding as perverse or even vague or without
evidence. The Trial Judge on his view of the evidence held that
the respondent was at no time ready and willing to perform his part
of the contract. Whether the evidence justified that conclusion is
a matter of which we may for the present defer consideration. But
it is one of the grounds on which the suit was dismissed by the
Trial Court. Without considering the evidence and without setting aside that finding, a decree for specific performance could not
be granted, and there is, in the judgment of the High Court no
discussion of the evidence on this part of the case.
Counsel for the respondent then urged that the inference raised
by the Trial Judge on the second issue, insofar as it relates to the
readiness and willingness for the respondent to perform his part of
the contract, could not be raised on the findings recorded by him.
The respondent had stated that he was on April 30, 1959 not ready
to purchase the stamp-paper or to take the sale deed. After April
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SUPREME COURT REPORTS
[1967] I S.C.R.
30, 1959 also according to the Trial Judge the respondent took
no steps to call upon appellants I & 2 to perform their part of the
eontract, and did not purchase the stamp paper. The Trial Judge
also found that the story of the respondent that appellant No. 1
requested that completion of the sale be postponed because he had to
attend a social function at Madurai and thereafter he had to go
about making enquiries for a suitable match for his grand-daughter
and that in the first week of July 1959 appellant No. I and the res'.
pondent went to V. Pillai P.W. 3 for preparation of the draft saledeed and that the first appellant requested for time to get the attestation of his son and daughters, was not true, and that the respondent
was attempting to throw blame for the delay on appellants 1 & 2
and was trying to invent excuses to explain away his own unwillingness to take the sale-deed. Jn the view of the Trial Court the respondent was undecided as to whether he should go through with the
contract, and was apparently willing to allow the matter to drift.
The Trial Court has therefore come to the conclusion, having regard to the admission made by the respondent, his subsequent con-
<iuct and other circumstances, that the respondent was not ready
and willing to take the sale deed at any time. The finding is based
en prima facie good evidence, and the inference raised by the Trial
Court is reasonable. It would be difficult for this Court to set aside
the finding without reappraisal of the evidence. Counsel for the
appellant has not asked us-and we think that in the circumstances
he was right in so doing-to review the evidence on the record and
to arrive at an independent conclusion on the plea of readiness and
willingness of the respondent on the evidence, as the learned Judges
of the High Court may have done if the question was raised before
them. The finding of the Trial Court that after entering into the
contract the respondent was not ready and willing to perform his
1Jarl of the contract must be accepted.
The appeal is allowed and the decree passed by the High Court
is set aside, and the decree passed by the Trial Court restored. There
will be no order as to costs in this Court and the High Court.
Bacbawat, J. Having regard to the decision in Jamshed v.
Burjorji (1), the High Court rightly held that time was not of the
essence of the contract. The contract was entered on March 5,
1959. On that day, the respondent paid a deposit of Rs. 1,006/-.
On April 4, 1959, the parties agreed that the sale should be com·
pleted before April 15, 1959. On that day, the respondent deposited
another sum of Rs. 2,000/-. On April 15, 1959, the time for completion of the sale was extended up to April 30, 1959. The transaction was not completed within April 30, 1959. But as the time
was not of the essence of the contract, the contract remained alive.
On July 30, 1959, the appellants abruptly cancelled the contract
(I) (1916) L.R. 43 I.A. 26.
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GOMATHINAYAGAM v. PALANJSWAMI (Bachawat, /.)
239
and forfeited the deposit. The respondent
did not accept the
concellation. On August 3, 1959, he deposited the balance price
of Rs. 13,906/- in a bank. On August 4, 1959, he called upon the
appellants to perform the agreement, On March 21, 1960, the
~ondent instituted the present suit.
The High Court repelled the contention that the relief of specific performance was barred by delay. The appellants no longer
urge that the respondent was disentitled to relief on the ground of
delay. Counsel for the appellants took the new point that the respondent was not ready and willing to perform his part of the contract and his suit should be dismissed on this ground. I find no
trace of this argument in the judgment of the High Court. Before
the High Court, the present appellants urged two points only, viz.,
(a) time was of the essence of the contract and therefore the responc
dent was guilty of breach of contract and (b) in any event, the respondent was not entitled to relief on the ground of delay. The High
Court rejected both these contentions. The appellants did not rely
upon the finding of the trial Court that the respondent was not
ready and willing to perform the contract. If the appellants relied
on t.his finding, the High Court would have suitably dealt with it.
The High Court could not have decreed the suit for specific performance without finding that the respondent was at all material
times ready and willing to perform the contract.
The trial Court framed six issues. There was no specific issue
on the question whether the respondent was ready and willing to
perform the contract. I do protest against any Court, be it the
mofussil Court or the High Court, recording a finding on such a
vital question without raising a specific issue on the point. Issue
No. 2 was a general issue. The issue was "whether the plaintiff
is not entitled to specific performance of the sale of the suit properties
in his favour." Under this issue, the trial Court in paragraphs 17
to 20 of its judgment, .discussed all kinds of questions such as readiness and willingness, default in performance of the contract, delay,
waiver and abandonment. The substance of the finding of the
trial Court was that the time was of the essence of the contract,
and as the respondent had failed to perform his contract by April
30, 1959, he was guilty of breach of contract and could not claim
specific performance. It further held that the respondent was disentitled to relief on the ground of delay, waiver, and abandonment. Incidentally, .as the respondent had failed to perform the
contract by April 30, 1959 and had taken no steps till July 30, 1959,
the trial Court found that he was never ready and willing to per·
form the contract. The finding with regard to readiness and willingness was linked up with the finding that the time was of the essence
of the contract and the respondent could not claim .any relief on the
ground of delay. As we are reversing the finding that the time was
of the essence of the contract and also that the respondent was
2 40
SUPREME COURT REPORTS
( 1967] I S.U\.
-d isentitled to relief on the ground of delay, we must reverse the
finding that the respondent was not ready and willing to perforrn
the contract.
Counsel for the appellants laid stress upon an admission made
hy the respondent in his cross-examination that on April 30, 1959,
he was not ready to purchase the stamp paper or to take the sale
deed. Counsel also relied upon the concessions made on behalf of
the respondent and recorded in the following passages in the
judgment of the High Court :
"Before us Mr. K. S. Desikan for the appellant made
no attempt to canvass the finding that his client had defaullcd in the sense that on April 30. 1959,
or before
that date the appellant was not ready with the necessary
funds to go through the sale ......