1. BY A. P. RANDHIR
By : A P RANDHIR
(B. com, LL.B, LL.M, D.L.P)
2. BY A. P. RANDHIR
1. Suit For Specific Performance Of Contract
2. Elements That Are Involved In A Suit For Specific Performance
2. 2. Unregistered Agreement Of Sale :-
2. 2. Unregistered Agreement Of Sale :-
3. Conduct Of The Parties:-
4. Readiness And Willingness:-
5. Time Is Essence Of Contract:-
6. Adding Parties In Specific Performance Suit:-
7. Essential Elements To Constitute ‘Lis Pendens’:-
8. Readiness And Willingness
9. Limitation Act, Article 54. (Suit For Specific Performance)
10. Specific Relief Act, Section 20(C)
11. Evidence Act Section 68 And Specific Relief Act Sec.10.
12. Specific Relief Act Section 10 And Registration Act, Sec.49.
13. Transfer Of Property Act, Section 53-A
14.Essence Of Contract Relating To Immovable Property
3. BY A. P. RANDHIR
1. Suit For Specific Performance of Contract
Specific performance is a remedy developed by principle of equity.
A party to a contract who is damaged because the contract is breached
by another party has the option to file a suit for specific performance
compelling to perform his part of contract. Before an equity court will
compel specific performance, however, the contract must be one which
can be specifically performed. Section 16 (c) of the Act envisages that
plaintiff must plead and prove that he had performed or has always been
ready and willing to perform the essential terms of the contract which are
to be performed by him, other than those terms the performance of
which has been prevented or waived by the defendant. In our country,
most of the specific performance suits relate to sales of immovable
properties and to some extent, transfer of shares. As the law of specific
performance is basically founded on equity, considerations such as
conduct of the plaintiff, the element of hardship that may be caused to
one of the parties, the availability of adequate alternative relief and such
other matters are taken into consideration. It is a discretionary relief.
2. Elements That Are Involved In A Suit For Specific Performance
4. BY A. P. RANDHIR
2.1. Valid Contract :-
2.1.1. Vimlesh Kumari Kulshrestha vs Sambhajirao, 2008 (2)
Normally, suit for specific performance of contract based on agreement
of sale. Vague and uncertain agreement could not be given effect to. It
was observed in Ambica Prasad vs Naziran Bibi, AIR 1939 All 64],
[Balram v Natku, AIR 1928 PC 75 that there should be a valid contract
for suit for specific performance of contract.
2. 2. Unregistered agreement of sale :-
2.2.1 S.Kaladevi vs V.R.Somasundaram, AIR 2010 SC 1654
Unregistered agreement of sale is admissible in evidence under
Section 49(c) of the Registration Act in a suit for specific performance of
contract. Unregistered sale deed is admissible in evidence in a suit for
3. Conduct of the parties:-
3. 3.2. H.P.Pyarejan vs Dasappa, AIR 2006 SC 1144
Any person seeking benefit of specific performance of contract
must manifest that his conduct has been blemishless. Similarly, conduct
of defendant cannot be ignored (Silvey vs Arun Varghese, AIR 2008 SC
1568). The relief of specific performance is discretionary(V.R.Sudhakara
Rao vs T.V.Kameswari, (2007) 6 SCC 650). It was held in Aniglase
5. BY A. P. RANDHIR
Yohannan v. Ramlatha, 2005 (7) SCC 534 that if the pleadings manifest
that the conduct of the plaintiff entitles him to get the relief on perusal of
the plaint he should not be denied the relief.
4. Readiness and Willingness:-
Section 16(c) of the Act mandates the plaintiff to aver in the plaint
and establish the fact by evidence aliunde that he has always been
ready and willing to perform his part of the contract. Distinction between
“readiness” and “willingness” is that the former refers to financial
capacity and the latter to the conduct of the Plaintiff wanting
performance (2011) 1 SCC 429). The plaintiff’s readiness and
willingness, which is a condition precedent, must be in accordance with
the terms of the agreement (Bala Krishna vs Bhgawan Das, AIR 2008
SC 1786), however, the plaintiff need not carry money in his hand
M.K.Watts vs Usha Sharma, AIR 2004 P&H 295).
4.1 G.Jayashree vs Bhagawan Das, AIR 2009 SC 1749
In a suit for specific performance, plaintiff is to approach Court
with clean hands.
4.2 N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors, (1995) 5
SCC 115 at para 5.
6. BY A. P. RANDHIR
Right from the date of the execution till date of the decree he must
prove that he is ready and has always been willing to perform his part of
4.3 J.P. Builders and Anr.Vs. A. Ramadas Rao and Anr, (2011)1 SCC
Even subsequent purchaser is entitled to raise objection as to
readiness and willingness. (AIR 2009 SC 2157). To know the
consequences in the case of absence of plea of readiness and
willingness in the plaint.
5. Time is essence of contract:-
5.1 Chand Rani v.Kamal Rani MANU/SC/0285/1993 : 1993 (1) SCC
From the decision of a Constitution Bench of the Hon’ble Supreme Court
in, it is clearly known that in the case of sale of immovable property, time
is never regarded as the essence of the contract. An intention to make
time the essence of the contract must be expressed in unequivocal
language. As to the point of limitation is concerned, the suit for specific
performance has to be filed within reasonable time which depends upon
facts and circumstances of each case. (AIR 2009 SC 2157, Azhar
Sultana’s case). 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
7. BY A. P. RANDHIR
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.( Smt. Chand Rani (dead) by LRs. Vs. Smt.
Kamal Rani (dead) by LRs, 1993 (1) SCC 519)
6. Adding parties in specific performance suit:-
6.1 Lingaraja Mohanty vs Binodini Mohanty & Ors. on 20 April, 2011
6.2 Thomson Press (India) Ltd. Vs. Nanak Builders and Investors P.
Ltd. and Ors, 2013 (3) SCALE26).
Order 1 Rule 10 CPC is wider than the scope of Order 22 Rule 10
CPC as to person whose presence before the court is necessary or
proper for effective adjudication of the issue involved in the suit. Order
22 Rule 10 CPC is an enabling provision and that it has certain
parameters to continue the suit where right to sue is survival. Order 22,
Rule 10, C.P.C. speaks of cases of an assignment, creation or
devolution of any interest during the pendency of a suit and the suit may,
by leave of the Court, be continued by or against the person to or upon
whom such interest has come or devolved.
7. Essential elements to constitute ‘Lis Pendens’:-
7.1 Man Kaur (dead) by LRS. Vs. Hartar Singh Sangha, (2010)10
8. BY A. P. RANDHIR
Section 52 of T.P.Act deals with ‘Lis Pendens’. In order to constitute a lis
pendens the following elements must be present :-
(I) There must be a suit or proceeding pending in a Court of competent
(II) The suit or proceeding must not be collusive;
(III) The litigation must be one in which right to immovable property is
directly and specifically in question;
(IV) There must be a transfer of or otherwise dealing with the property in
dispute by any party to the litigation;
(V) Such transfer must affect the rights of the other party that may
ultimately accrue under the terms of the decree or order.
To adjudge whether the Plaintiff is ready and willing to perform his
part of the contract, the Court must take into consideration the conduct
of the Plaintiff prior and subsequent to the filing of the suit along with
other attending circumstances and to prove willingness to perform
plaintiff must enter witness box. Right from the date of the execution till
date of the decree, he must prove that he is ready and has always been
willing to perform his part of the contract.
7.2 Adbul Hakkem vs Naiyaz Ahmed, AIR 2004 AP 299,
The case of similar instance was decided in the case of where the
defendant contended that the plaintiff vendee alone signed the sale
9. BY A. P. RANDHIR
agreement but not the defendant vendor, as such there can be no
contract, cannot be accepted. The Court held that specific performance
is maintainable.(Also see A.P.Civil Court Manual, Vol-2, at page 1358).
In my view, irrespective execution of written contract, when the vendor
and vendee both have same understanding of the terms of agreement,
Vendor cannot contend that there is no contract between them because
even oral contract is valid. if vendor contends that such agreement is
invalid for want of his signature on agreement of sale, such contention
cannot be acceptable on the ground of 'Consensus ad idem'.
7.3 JP Builders(supra) Hon’ble Supreme Court
Hon.ble court observed that Section 16 ( c ) of the Specific Relief
Act mandates averment as to readiness and willingness on the part of
the plaintiff and that it is a condition precedent for obtaining relief. The
plaintiff is duty bound to allege and prove a continuous readiness and
willingness to perform the contract on his part from the date of the
contract and that the onus is on the plaintiff alone. In para-27 of this
judgment, Hon’ble Supreme Court has held that when there is non-
compliance with these statutory mandates, court is not bound to grant
specific performance and is left with no other alternative but to dismiss
10. BY A. P. RANDHIR
7.4 N.P. Thirugnanam (D) vs- Dr. R. Jagan Mohan Rao reported in
1995 (5) SCC 115
The Hon’ble Supreme Court held in the case of that plaintiff must not
only aver and establish readiness and willingness but plaintiff is also
duty bound to show that he has financial ability to make payment of the
7.5 Ramesh Chand (Dead) through L.Rs. Versus
Asruddin (Dead) through LRs and another Citation;(2016) 1 SCC
Section 20 of Specific Relief Act, 1963, provides that the
jurisdiction to decree specific performance is discretionary,
and the court is not bound to grant such relief merely because
it is lawful to do so. However, the discretion of the court is not
arbitrary but sound and reasonable, guided by judicial
principles. Sub-section (2) of Section 20 of the Act provides
the three situations in which the court may exercise discretion
not to decree specific performance. One of such situation is
contained in clause (a) of sub-section (2) of the Section which
provides that where the terms of the contract or the conduct of
the parties at the time of entering into the contract or the
other circumstances under which the contract was entered
into or such that the contract though not voidable, gives the
11. BY A. P. RANDHIR
plaintiff an unfair advantage over the defendant, the decree of
specific performance need not be passed. It is pertinent to
mention here that in the present case, though execution of
agreement dated 21.06.2004 between the parties is proved,
but it is no where pleaded or proved by the plaintiff that he got
redeemed the mortgaged land in favour of defendant No. 2 in
terms of the agreement, nor is it specifically pleaded that he
was ready and willing to get the property redeemed from the
7.6 K. NANJAPPA (Dead) BY LRs. … APPELLANT(S) VERSUS R.A.
HAMEED alias AMEERSAB (Dead) BY LRs. AND ANOTHER …
RESPONDENT(S) SUPREME COURT OF INDIA CIVIL APPEAL
NO.8224 OF 2003 Dated;September 02, 2015 Whether court can pass
decree for specific performance of contract on the basis of evidence
adduced before criminal court?
Whether, while adjudicating plea of grant of decree for specific
performance, Court can consider a document produced and related
evidence led before the Criminal Court to make base for determining
existence of fact.
High Court vide its impugned finding in the instant matter set aside
the order of trial court rejecting the plea of grant of specific performance.
The relief was sought on the basis of agreement to sell written on a
quarter size piece of paper, which also included a mention of earlier
12. BY A. P. RANDHIR
execution of another agreement, which however was not filed on record.
High Court reversed the finding on the premise that document in
question was filed before the Criminal Court and evidence was led and
based thereupon decreed the suit for specific performance.
The Court while hearing appeal against the impugned High Court
finding made an observation that a decree for specific performance can
be granted even on the basis of oral contract. However, an oral
agreement with a reference to a future formal contract will not prevent a
binding bargain between the parties. In a case where plaintiff comes
forward to seek a decree for specific performance of contract of sale of
immovable property on the basis of an oral agreement or a written
contract, heavy burden lies on the him to prove that there was
consensus between the parties for the concluded agreement for sale of
Whether there was such a concluded contract or not would be a
question of fact to be determined on the facts and circumstances of each
individual case. In a suit for specific performance of a contract, the Court
cannot ignore Section 20 of the Specific Reliefs Act giving judicial
discretion to grant decree for Specific performance. However, the Court
is not bound to grant specific performance merely because it is lawful to
13. BY A. P. RANDHIR
do so. It should meticulously consider facts and circumstances of the
case to see that it is not used as an instrument of oppression to have an
unfair advantage not only to the plaintiff but also to the defendant. The
relief of specific performance is discretionary but not arbitrary which
must be exercised in accordance with sound and reasonably judicial
Where the plaintiff brings a suit for specific performance of contract
for sale, the law insists upon a condition precedent to the grant of decree
for specific performance that the plaintiff must show his continued
readiness and willingness to perform his part of the contract in
accordance with its terms from the date of contract to the date of
hearing. Normally, when the trial court exercises its discretion in one way
or the other after appreciation of entire evidence and materials on
record, the appellate court should not interfere unless it is established
that the discretion has been exercised perversely, arbitrarily or against
judicial principles. The appellate court should also not exercise its
discretion against the grant of specific performance on extraneous
considerations or sympathetic considerations. Under Section 20 of the
Specific Relief Act, a party is not entitled to get a decree for specific
performance merely because it is lawful to do so. Nevertheless once an
14. BY A. P. RANDHIR
agreement to sell is legal and validly proved and further requirements for
getting such a decree are established then the court has to exercise its
discretion in favour of granting relief for specific performance.
In the instant case the issue related to as to whether the
agreement (in question) of 1967 allegedly executed by the defendants,
could be enforced. In the agreement there was reference of earlier
agreement where some sum of money was paid to the defendant-
appellant which was denied and disputed. As mentioned above, the
previous agreement was neither filed nor exhibited to substantiate the
case of the plaintiff. The High Court placed reliance on the said
agreement written in a quarter sheet of paper merely because of the fact
that said quarter sheet of paper was produced before the Magistrate in a
The view taken by High Court was held to be incorrect to the effect
that there was no reason to disbelieve the execution of the document
although it was executed on a quarter sheet of paper and not on a
proper stamp and also written in small letter. The High Court also
misdirected itself in law in holding that there was no need for the plaintiff
to have sought for the opinion of an expert regarding the execution of
15. BY A. P. RANDHIR
Various documents including order-sheets in the earlier
proceedings including execution case were filed to nullify the claim of the
plaintiff regarding possession of the suit property but these documents
were not been considered by the High Court.
The evidence and the finding recorded by the criminal courts in a
criminal proceeding cannot be the conclusive proof of existence of any
fact, particularly, the existence of agreement to grant a decree for
specific performance without independent finding recorded by the Civil
It was accordingly held that the present was not the fit case where
the discretionary relief for specific performance could be granted in
favour of the plaintiff-respondent. The High Court in the impugned
judgment failed to consider the scope of Section 20 of the Specific Relief
Act and the precedents.
8. Readiness and Willingness
8.1 Azhar Sultana versus B.Rajamani and others civil appeal No.
1077 of 2009 Decided on February. 17,2009 2009 (1) SCCD 525 (SC)
Section 20 and 16 (c) Section 16 (c)” postulates continuous readiness
and willingness on the part of plaintiff '" It is a condition precedent for
obtaining a relief of grant of specific performance of contract.
16. BY A. P. RANDHIR
8.2 Faquir Chand and Others V. Sudesh kumari 2006 (3) Apex Court
Judgment 259 (SC)
Lack of pleading--- provision does not require any specific phraseology.
Compliance with the readiness and willingness has to be in spirit and
substance and not in letter and form. Continuous readiness and
willingness could be seen from the conduct of the plaintiff as a whole.
9. Limitation Act, Article 54. (Suit for specific performance)
9.1 Raghuvir Singh Bhatty Vs. Ram Chandra Waman Subhedar
reported in AIR 2002 Allhabad, 13
(A) Limitation Act (36 of 1963), Art. 54 – Suit for specific performance
of contract – Limitation – Permission of ceiling authority, pre-requisite for
execution of sale deed – sale deed to be executed only after intimation
to purchaser of grant of permission – Notice by vendor to purchaser that
contract had frustrated on account of refusal to grant permission by
Ceiling Authority – Limitation would start running from service of notice.
(B) Specific Relief Act (47 of 1963), Ss. 20, 16 – Discretion of Court –
Permission of Ceiling Authority, pre-requisite for execution of sale deed –
Refusal of permission by authorities – Contract frustrated on account of
failure to obtain permission – Subsequent repeal of Ceiling Act – Legal
hurdle of impossibility in enforcing contract thus removed – Decree for
specific performance can be passed.
17. BY A. P. RANDHIR
(C) Specific Relief Act (47 of 1963), S 16 – Time whether essence of
contract – Sale of immovable property other than commercial transaction
– Agreement to purchase land for building house for purchaser himself –
Mere fixation of period within which contract is to be performed – Not a
decisive test – No recital in agreement that parties intended time to be of
essence – It cannot be held that time was essence of contract. Contract
Act S. 55.
(D) Specific Relief Act (47 of 1963), S. 16(c) – Readiness and
willingness – Proof – Time not essence of contract – Mere delay in
absence of abandonment or waiver – Not a ground for inferring want of
readiness or willingness so as to refuse specific performance.
(E) Specific Relief Act (47 of 1963), S. 20 – Discretion of Court – Time
not of essence of contract – Clauses in agreement however, indicating
that contract had to be performed within reasonable time – plaintiff
contributing to the delay in execution of contract – Prices of property
escalating sharply in the meanwhile – defendant cannot be called upon
to execute the sale-deed.
(F) Specific Relief Act (47 of 1963), S. 21 – Compensation –
Determination – Sale deed to be executed within six months from date of
execution of agreement and during that period defendant-vendor was to
obtain permission from ceiling authorities – defendant however, not
18. BY A. P. RANDHIR
applying for such permission for three years – Contract frustrated due to
non-receipt of permission – Prices of property sharply escalating in
meanwhile – No evidence on record however, regarding market value of
property – Plaintiff allowed refund of earnest money together with
damages amounting to Rs.20,000/- and interest upon earnest money
from date of contract at the rate of 12% p.a. to date of payment Transfer
of Property Act, S. 54.
9.2 Harnam Singh Vs. Mangat Singh and anr. reported in AIR 2001
Punjab and Haryana, 257
Limitation Act, Art. 54- Suit for specific performance – Limitation –
Vendor entering into agreement of sale of land belonging to Central
Govt. as he was in its cultivating possession and policy of Central Govt.
was to allot such land to occupiers – Mutation of land sanctioned in his
favour – Notice by purchaser thereafter to vendor calling upon him to
execute sale deed – Suit filed within three years from date of receipt of
notice – Would be within limitation – As specific performance shall be
deemed to have refused when notice was received by vendor – Relief of
specific performance also cannot be refused on ground that suit was
filed after about 9 years from date of agreement as cause of action
19. BY A. P. RANDHIR
arose after mutation was sanctioned in favour of vendor.
Specific Relief Act (47 of 1963), S.13.
9.3 Sau. Shantabai Vs. Manakchand AIR 1988 BOMBAY, 82.
(A) Specific Relief Act (1963), S. 20 – Agreement to sell agricultural land
to plaintiff a non-agriculturist – Permission to be obtained by Vendor to
sell and to get land converted to non-agricultural user – Vendor not
taking steps as agreed – Held, that breach was on part of Vendor-
(B) Specific Relief Act (1963), S. 20 – Evidence Act, S. 57 – Suit for
specific performance of agreement to sell land – Grant of damages –
Quantum – Court can take judicial notice of rise in prices of land. Civil
Procedure Code S. 34.
9.4 H.M. Krishna Reddy Vs. H.C.Narayana Reddy reported in 2001
(A) Limitation Act, Art. 54 – Suit for specific performance of contract –
Limitation – Starting point – Agreement of sale – Mentioning that vender
would execute sale deed “after repealing ban on registration by Govt.” -
Therefore, agreement did not fix date for performance of contract – Not
also mention an event “certain to happen” on happening of which
specific performance become due – Thus, time for filing suit for specific
20. BY A. P. RANDHIR
performance begins to run only when vendee had knowledge of vendor's
refusal to perform.
10. Specific Relief Act, Section 20(c)
10.1 Preetam Kaur Vs. Prakash Ramdeo Jaiswal [R.M. Savant, J.]
2011(6) Mh.L.J., 84.
A) Specific Relief Act, Section 20(c) – Specific performance of
agreement – Merely because there is rise in prices would not disentitle
the plaintiff to the right to specific performance of agreement – Court in
such cases would endeavour to balance the equities between the
parties, where there is an appreciation in the value of the land. 2010(6)
10.2 AIR 1993 Madhya Pradesh 162 R. C. Lahoti, J.Premnarayan and
anr. Vs. Kunwarji and anr.
(A) Contract Act, S. 16 – Civil Procedure Code, Order 6 Rule 4 –
Contract of sale – Plea of undue influence – Absence of proof that
vendor is in position to dominate will of vendor – Onus not discharged –
Plea liable to be rejected. AIR 1967 SC 878, Rel.On.
(B) Transfer of Propery Act, Section 54 – Contract of sale – Passing
of title – Sale deed duly executed and registered – Payment of
consideration not made condition for passing of title – Title passes to
21. BY A. P. RANDHIR
vendee despite non-payment of price – Suit for possession by vendee
maintainable – Vendor has remedy of asking for payment of price.
Where the document on its face is a deed of sale, duly executed
and registered and it is not the plea of the vendor that title in the suit
property was not intended to be passed on to the vendee and was
postponed to be passed until the consideration was paid, even if the
possession was not delivered and the price was not paid, on the
contents of the document the title passed to the vendee. If the vendee
was deprived of possession he was well justified in asking for the same.
The remedy of the vendor lay in asking for payment of price.
11. EVIDENCE ACT SECTION 68 AND SPECIFIC RELIEF ACT SEC.10.
11.1 Asudamal Laxmandas Sindhi Vs. Kisanrao Wamanrao
Dharmale 2003(4) Mh.L.H., 134.
(A) Evidence Act, S. 68 – Execution of document – proof by
examination of attesting witnesses when necessary.
Only where there is a specific provision made in the Act requiring that
the document is to be attested then in such cases the examination of the
attesting witnesses is necessary as laid down in section 68 of the
Evidence Act. The finding of the appellate Court that though one of the
22. BY A. P. RANDHIR
attesting witness is alive, the original plaintiff was duty bound to examine
him to prove the execution of isarchitthi i.e. agreement of sale, was not
(B) Specific Relief Act, S. 10 and Bombay Tenancy and Agricultural
Lands (Vidarbha Region) Act, S. 89 – Suit for specific performance of
agreement of sale of agricultural land owned by defendant – Lack of
permission under section 89 not an impediment in passing a decree for
12. SPECIFIC RELIEF ACT SECTION 10 AND REGISTRATION ACT,
12.1 Nirav Deepak Mode Vs. Najoo Behram Bhiwandiwala and ors.
2012(3) Mh.L.J. 370.
(a) Specific Relief Act, S. 10 and Registration Act, S. 49 Proviso - Suits
for specific performance can be filed upon unregistered document or
even upon an oral agreement – Lack of notarization or registration
cannot entitlement the plaintiff to the relief at least prima facie for
protection of the premises agreed to be purchased by the plaintiff.
(b) Specific Relief Act, S. 12 and Civil Procedure Code, O. 39 R.1 – Suit
for specific performance – Relief of injunction for protecting the suit
property is required to be granted, but only upon the plaintiff performing
his part of the contract, which the plaintiff is required to be ready and
willing to perform at all material times including at the time of filing the
23. BY A. P. RANDHIR
suit – This would be only upon payment of the entire consideration by
the plaintiff which is the only obligation that the plaintiff is required to
13. TRANSFER OF PROPERTY ACT, SECTION 53-A
13.1 Yuvrani Hansa Devi Vs. Jafar Farooq Vohara and anr. reported
in 2012(1) Mh.L.J, 302 (Mrs. Roshan Dalvi. J)
Transfer of Property Act, S. 53-A – Donctine of “part performance”
- Transferee put in possession in part performance of the contract must
show that he has paid up the full purchase price or that he was ready
and willing and able at all times to make payment of the entire price.
“Section 53-A of the Transfer of Property Act contemplates effectuating
the English doctrine of what is called 'part performance' under which
when the possession is obtained by a transferee in part performance of
the contract or when the transferee has already been put in possession
prior to his performance of the other part of the contract, the possession
is safeguarded under the doctrine. It envisages several conditions
precedent. The transferee has to show that he had taken or continued in
possession of the property, that he was willing to perform his part of the
contract and has undertaken some action in part performance of the
contract. Since a transferee in possession would require essentially only
24. BY A. P. RANDHIR
to pay the balance consideration, he has to show that he has paid up the
full purchase price or that he was ready and willing and able at all times
to make payment of the entire purchase price”. CPC O.26 R.9.
13.2 M/s. Satguru Construction Co. Pvt. Ltd. Vs. Greater Bombay
Co-op. Bank Ltd., [2007(5) AIR Bom R 37 (DB)
(A) Maharashtra Co-op. Societies Act, S. 156 – Maharashtra Co-op.
Societies Rules, R. 107 – Recovery certificate – Execution – Has to be
only in accordance with procedure contained in S.156 and R. 107 – And
Civil or Revenue Court will have no jurisdiction – As such, order of arrest
of appellants for non-payment of amount due passed by Civil Court, is
liable to set aside.
(B) Maharashtra Co-op. Societies Act, S. 163 – Recovery certificate –
Execution – Jurisdiction of Civil Courts – S. 163 clearly excludes civil
courts from exercising any jurisdiction to settle any disputes referred to
Co-operative Courts – And not pleading issue of jurisdiction at initial
stage will not clothe Civil Court with jurisdiction expressly barred.
13.3. Jijamata Sah. Sakhar Karkhana Ltd., Dusarbid Vs. Sukhadeo
Rambhau Fulzade [ 2010(5) Mh.L.J., 431]
(A) Civil Procedure Code, S. 9 and Maharashtra Co-operative Societies
Act, S. 164 – Scope – Suit for recovery of sum from co-operative society
25. BY A. P. RANDHIR
– Transaction touching business of society – Civil Court had no
jurisdiction to entertain the suit since it was instituted without compliance
of requirements contained in section 164 of the Act.
(B) Maharashtra Co-op. Societies Act, S. 164 – Notice – Suit instituted
against society without pre-suit statutory notice and no waiver was
established before the Civil Court – Suit therefore correctly dismissed.
13.4 Gurudev Developers Vs. Kurla Konkan Niwas Co-op.
Hsg.Society [2000(3) Mh.L.J., 131]
(A) Maharashtra Co-op. Societies Act, S. 164 – Suit against co-operative
housing society – Agreement entered into between plaintiffs Developers
and defendant-society touching business of society – No notice u/s 164
given by plaintiffs – Suit held not maintainable.
(B) Specific Relief Act, S. 14 – Development agreement by plaintiffs with
defendant co-operative housing society – Termination of agreement by
society – Suit for specific performance not maintainable as the
agreement could not be specifically enforced.
(C) Partnership Act, S. 69(2) – Suit by plaintiffs-Developers partnership
firm – Allegation of defendants on affidavit that partnership of plaintiffs
26. BY A. P. RANDHIR
was not registered on date of filing of suit not controverted – Suit not
14.Essence of Contract Relating to Immovable Property
14.1 Saradamani Kandappan v. S. Rajalakshmi and Ors in (2011) 12
The Supreme Court of India in the recent judgment have tried to
address this question by calling upon the courts to revisit the principles
laid down by the court in the preceding judgments on same issue and
observed that as a general preposition of law time is not essence of
contract unless the parties to the contract intend to make time an
essential condition for the performance of contract. The court said that
parties to a contract may intend to make time an essence of contract by
expressly providing so or it can be inferred by necessary implication
from the conduct of parties or circumstance surrounding the
performance of contract. The court also said the general presumption of
law that time is not essence of a contract that is for sale of immovable
properties needs to be revisited as time forms an essential condition for
the performance of contract in circumstance of ever-increasing prices of
real-estate property which are bound to affect transactions of sale of
27. BY A. P. RANDHIR
These provisions of law come to rescue of the courts in deciding
questions as to whether obligations undertaken by parties under the
contract are to be performed as these provisions clearly indicate that
contracts shall be repudiated in cases where time is made essence of
contract and where the obligations undertaken by parties are not
performed within the said specified time. Time is the essence of contract
means that time is most essential condition of the contract for the
performance of the contract or completion of contract. The Supreme
Court of India have looked into the question of whether time is essence
of contract on different facts and situations and have provided some
principles of law to decide upon this question.
The following are some of the decisions of the apex court on
different facts in different decade that shall assist in explaining how the
apex court came to conclusion as mentioned in Saradamani Kandappan
v. S. Rajalakshmi and Ors in (2011) 12 SCC 18 and how the law
developed on this point.
14.2 Chandnee Widya Vati Madden v. Dr C. L. Katiai 1964 AIR (SC)
The Supreme Court of India in after looking into the terms of agreement
held that time was not essence of the agreement and reaffirmed the
28. BY A. P. RANDHIR
decision of the High Court decreeing specific performance of contract.
The agreement in question provided that vendor/seller-defendant should
obtain permission of the chief commissioner for the transaction of sale of
immovable property within 2 months of the agreement and in case
where permission was seen not to be forthcoming within the time
specified then it was open to purchaser to extend the date or treat the
agreement cancelled. The Court after looking into these express terms
of the agreement i.e. purchaser could extend time inferred that time was
not essence of agreement. The Court also looked into the fact that
purchasers of the property were willing to extend time and perform their
part of contract and it was seller who had wilfully refused to perform her
part of contract and therefore the apex court directed the seller to apply
to the chief commissioner for the performance of her part of contract to
complete the performance of contract.
The Supreme Court dealt with the same question as to whether
time is essence of contract in Chand Rani v. Kamal Rani in (1993) 1
SCC 519 also. In this case, the apex court held that in case of sale of
immovable property there is no presumption of law as to time being
essence of a contract however even in case where time is not essence
of contract then also the court may infer that it is to be performed in a
29. BY A. P. RANDHIR
reasonable time from the conditions of express terms of contract, from
the nature of property and from surrounding circumstance like object of
making contract. The court also held that even when parties to contract
have expressly provided time to be essence of contract then also such
stipulation will have to be read along with other terms of contract as on
proper construction of these terms may indicate towards excluding
inference that the completion of work by particular date was meant to be
14.3 K. S Vidyanadam V. Vairavan 1997 (3) SCC 1
The Apex court was faced with this question again in where the question
arose whether decree of specific performance of contract should be
granted in every suit where the suit is filed within limitation period
prescribed for filing of suit for specific performance and the agreement
for sale of immovable property do not provide time as essence of
contract thereby ignoring any time limits prescribed in the agreement.
14.4 A. K. Lakshmipathi and Ors v. Rai Saheb Pannalal H Lahoti
Charitable Trust and Ors in (2010) 1 SCC 287
The apex court in also dealt with the same question as to when time is
essence of a contract. The clauses in the agreement had provided that
30. BY A. P. RANDHIR
time was to be the essence of contract and provided that under all
circumstance, the purchaser/buyer was to make deposit of the balance
amount of consideration by the date specified in the agreement. The
agreement had also stipulated that buyer was to obtain clearance /
permission from the Endowment department. The Court relying upon
ratio of Chand Rani Case observed that as a general presumption of law
time is not essence of contract in case of sale of immovable property
unless parties intend to make it essence of contract or a contrary
intension is expressed. The court looked at the various clauses of the
agreement and observed that parties intended to and were aware from
beginning that time was essence of contract and the clauses clearly
stipulated payment of the balance amount was the essence of the
agreement and failure to make the said payment by the date stipulated
on account of whatsoever reason shall result in forfeiture of the earnest
money paid and shall further result in loss of any right held by the vender
in the scheduled property.
14.5 Saradamani Kandappan v. S. Rajalakshmi and Ors in (2011) 12
The next case that came up before the apex court was of wherein
the court tried to address the issue as to time being essence of contract.
31. BY A. P. RANDHIR
The agreement in question provided that balance consideration was to
be paid on some specified dates and in case of these being declared
holiday then it was to be paid on the next immediate working day. The
agreement also provided that failure to make the payment on specified
date shall result in vendor cancelling the agreement. The agreement
further provided that the sale deed shall be executed only at the
convenience of the purchaser only after he is satisfied in regard to the
title of the land and in case of her not being satisfied with the title then
shall put the vendor notice of it and vendor has to satisfy the purchaser
in regard to title and in case the vendor fails then vendor shall within 3
months from that date pay to the buyer all the money that was advanced
14.6 Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates
Private Limited and others in (2011) 9 SCC 147
The last important apex court decision in where the apex court
conclusively held on the issue of time as essence of contract. The court
observed that as settled position of law in case of specific performance
of contract relating to immovable properties, time is not normally
considered an essence of contract but this is not absolute preposition of
law and is subject to several exceptions. The court relying upon ratios
32. BY A. P. RANDHIR
laid down in its other decisions observed that time as essence of
contract can be inferred from nature of properties or terms of agreement
and held that in view of express terms of agreement time was intended
to be essence of contract.
NOTE : This Article is useful for enrichment of legal knowledge on civil side. This
book contains only relevant paras of the judgments on each topic and readers are
requested to go through full text understand the ratio- decidendi laid down in the
judgments. For easy reference, citations have been referred to. As some judgments
are gathered from using Internet, the case numbers, names of the parties and date
of judgment are also noted for easy reference.