Case Note & Summary
The appeal arose from a suit for specific performance of an agreement to sell dated 22.09.2002, whereby the defendant agreed to sell suit property to the plaintiff for Rs.3,65,000. The plaintiff paid Rs.5,000 as advance and Rs.60,000 on 14.10.2002. The agreement contained clauses requiring the defendant to clear a mortgage and obtain original title deeds from the mortgagee before the balance consideration was payable. The plaintiff sent registered letters on 18.12.2002 and 19.12.2002 to the defendant's address, which were returned unclaimed, and a legal notice on 07.07.2003 which was received. The defendant did not reply. The plaintiff filed suit in February 2005, depositing the balance consideration in court. The trial court decreed specific performance, affirmed by the first appellate court. The High Court in second appeal reversed, holding time was of essence, letters not proved, and plaintiff not ready and willing. The Supreme Court found the High Court erred: time was not of essence due to reciprocal promises; letters were deemed served as sent to correct address; plaintiff's readiness and willingness was shown by deposits and notices; delay within limitation cannot bar relief. The appeal was allowed, restoring the decree for specific performance.
Headnote
A) Specific Relief Act - Specific Performance - Time Not of Essence - Agreement to sell containing reciprocal promises - Clause 3 requiring payment within three months must be read with clauses 5 and 8 requiring seller to first clear mortgage and obtain title deeds - Held that time is not of essence in such circumstances (Paras 5-6). B) Evidence Act - Service of Notice - Registered A.D. Letters - Letters sent to correct address and returned unclaimed - Deemed service unless contrary proved - Defendant admitted receiving legal notice at same address - Held that letters were duly served and proved (Paras 6-7). C) Specific Relief Act - Readiness and Willingness - Plaintiff deposited balance consideration in court and sent notices - Delay in filing suit within limitation period - Held that mere delay cannot be ground to refuse relief as per Mademsetty Satyanarayana v. G. Yelloji Rao (Para 7). D) Contract Act - Consideration - Adequacy of Price - Property valued at Rs.6 lakhs at time of agreement, sold for Rs.3.65 lakhs - Parties free to negotiate - No inference of undervaluation (Para 8).
Issue of Consideration
Whether the High Court was correct in reversing concurrent findings of courts below and refusing specific performance on grounds that time was of essence, notices were not proved, and plaintiff was not ready and willing.
Final Decision
Appeal allowed; judgment of High Court set aside; decree for specific performance passed by trial court and affirmed by first appellate court restored.
Law Points
- Time is not of essence in agreement to sell where reciprocal promises require seller to first clear mortgage and obtain title deeds
- Readiness and willingness can be inferred from registered letters sent to correct address even if returned unclaimed
- Delay in filing suit within limitation period cannot be used against plaintiff for specific performance in India
