SMT. CHAND RANI (DEAD) BY L.RS.versusSMT. KAMAL RANI (DEAD) BY L.RS.

·A                   SMT. CHAND RANI (DEAD) BY L.RS.
                                          v.
                     SMT. KAMAL RANI (DEAD) BY L.RS.

                               DECEMBER 18, 1992

 B      [L.M. SHARMA, C.J., S.R. PANDIAN, S. MOHAN, B.P. JEEVAN
                   REDDY, AND S.P. BHARUCHA, JJ.)

         Indian Contract Ac~ 1872-Section SS-Agreement to sale of imm_ov-
   able property-Whether time was the essence of contract-Whether purchaser
 C was ready and willing to perfonn contract.

           On 26.8.71, an agreement for sale was entered into between the
     parties. The agreement was entered into through the husband of the
     appellant., Under the terms of the agreement, the respondent agreed to sell
 D   her house and property comprising of a free-hold plot measuring 311 sq.
     yards with a double-storeyed residential building constructed thereon
     along with fittings and fixtures for a sum of Rs. 1,78,000 in favour of the
     appellant. On the date of execution a sum of Rs. 30,000 was paid by way
     of earnest money.

 E         It was agreed upon· between the parties that a further sum of Rs.
     98,000 was payable within 10 days of the execution of the ageement and the
     balance of Rs. 50,000 was to be paid at the time of registration of sale
      deed; that the respondent-vendor would redeem the property by paying off
      a loan of Rs. 25,000 out of a sum of Rs. 30,000 paid at the time of
F     execution, as the property was mortgaged with the Life Insurance Cor-
      poration of India; that the vendor was also to obtain the income-tax
      clearance certificate; that the sale deed was to be executed on or before
      31.10.71; that the vendor would hand over documents pertaining to the
      property in the suit together with vacant possession of U1e first floor by
     .30.9.71 and possession of the front portion at the time of registration of
G     the sale deed; and that the amount of Rs. 30,000 would stand forl'eited in
      fa'\·our of the vendor should the vendee fail to pay the sale consideration
      and get the sale deed registered within the agreed time.

          Though the respondent was called upon to complete the sale
H    through various letters and notices, there was no response.
                                         798
               SMT. CHAND RANI v. SMT. KAMAL RANI                      799

      Respondent by letter dated 15.9.7~ informed the appellant that smce     A
the appellant failed to pay the sum of Rs. 98,000 within 10 days from the
date of the agreement, namely, by 6.9.71, the agreement stood annulled
and the sum of Rs. 30,000 stood forfeited.

      The appellant in reply asked the respondent to execute the sale deed
offering to pay the remaining consideration at the time of the execution of   B
the sale deed.

       Since the respondent failed tj>. comply with the demand, the appel-
lant filed a suit claiming specific performance of the agreement or in the
alternative, damages of Rs. 1,50,000 including the refund of Rs. 30,000.
                                                                              c
      The respondent-defendant took the stand that the payment of Rs.
98,000 within 10 days from the date of the execution of the agreement was
the essence of the contract; that as the said amount was not paid the
respondent was entitled to treat the contract as having become null and
void; that the appellant never tendered a sum of Rs. 98,000 but wanted D
possession of the ground floor before payment of Rs. 98,000; that such
demand was contrary to the terms of the agreement; and that under these
circumstances, the suit was misconceived and liable to be dismissed.

       The Trial Court decreed the suit holding that on a reading of the
suit agreement payment of Rs. 98,000 by 6.9.71 was not the essence of the     E
contract; and that the appellants were always ready and willing to perform
their part of the contract and it was the respondent who was trying to
resile from the terms of the contract.

       The Division Bench of the High Court in appeal held that the
non-payment of Rs. 98,000 by the plaintiffs appellants on or before 6.9.71    F
would entitle the defendant-respondent to treat it as a breach of contract
and the insistence of the appellants to obtain the income-tax clearance
certificate and redemption of the property before the payment of Rs.
98,000 was unjustified. Setting aside the decree for specific performance,
the High Court held that the appellants were entitled to the refund of the    G
sum of Rs. 30,000.                     ·

      Challenging the High Court's judgment, special leave to appeal was
preferred to this Court by the plaintiffs.
      This Court, while granting special leave, ordered that as the position H
    800                 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A   of law so decided in an earlier decision of this Court deserved reconsidera-
    tion by this Court; this appeal be placed before the learned CJ. for
    directions that it be heard by a larger Bench.

         During the pendency of the civil appeal, both the appellant, and
    respondent died and their legal representatives were brought on record.
B
           The appellants urged that in the case of an agreement for sale of
    immovable property time was never regarded as the essence of the con-
    tract; that it would be an essence of the contract only when it was specifi-
    cally stipulated or it clearly emerged by way of implication, which was not
    the case here; that the word "only" occurring under clause(l) of the suit
c   agreement would qualify only the amount and not the time for payment;
    and that the appellants at all material times, were ready and willing to
    perform their part of the contract.

          The respondents submitted that having regard to the terms of the
D   contract it was clear that there was an obligation to pay a sum of Rs.
    98,000 within 10 days from the date of the execution of the contract; that
    failure to do so would render the contract vitiated; that obligations on the
    part of the respondent to clear off the mortgage as well as to obtain the
    income-tax clearance certificate would arise only after the payment of Rs.
    98,000 and in the absence of such a payment, the appellant had no right
E   to insist upon the obligations being performed; that the parties did intend
    to make time the essence of the contract; that as had been rightly held by
    the Division Bench that where a counter term stipulated which was not
    supported by the suit contract, the suit contract would stand vitiated; and
    that no case was made out for interference of this Court.
F
         On the questions, whether time was the essence of the contract and
    whether the first plaintiff was ready and willing to perform the contract,
    dismissing the appeal, this Court,

          HELD: 1.1. In the case of sale of immovable property there is no
G   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 per-
    formed within a reasonable time if the conditions are:

          I. from the express terms of the contract;
                                                                                   -
H         2. from the nature of the property; and
               SMT. CHAND RANI v. SMT. KAMAL RANI                         801

     3. from the surrounding circumstances, for example: the object of A
making the contract. [811-F,G]

       1.2. 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(l) of the suit agree-
ment. (814-B]                                                                    B

    . 1.3. 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-
                                                                                 c
      (2) to qualify the period of 10 days. (813-F]

Therefore, having qualified the amount there was no further need to
qualify the same unless it be the intention to the parties to make time as
the essence of the contract. (813-G]                                       D

      1.4••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. The plaintiff was insisting upon
delivery of possession as a condition precedent for making the payment. E
The income-tax certificate was necessary only for completion of sale. The
obligations on the part of the defendant could not be insisted upon for
payment of R~. 98,000. [813-H, 814-A]

      1.5. Where, therefore, the plaintiff was put on notice as to the stand
of the defendant with regard to payment of Rs. 98,000 which again was            F
reiterated in the notice dated 16.9.73, nothing would have been easier for
the plaintiff than to pay the said sum. Therefore, even as late as 24.9.71
the plaintiff was never willing to make the payment of Rs. 98,000. There
was no readiness and willingness. (814-E]

        Gomathinayagam Pillai and Ors. v. Pallaniswami Nadar, [19671 1           G
SCR 227; Hind Constrnction Contractors v. 17ie State of Maharashtra,
(1979] 2 SCR 1147; Jamshed Khodaram Irani v. Burjorji Dhunjibhai, AIR
1915 Privy Council 83; Govind Prasad Chaturvedi v. Hari Dutt Shastri and
rt1tall1cr1 ( l 977] 2 SCC 539 and Smt. Indira Kaur and others v. Shri Sheolal
Kapoor. AIR 1988 SC 1074, referred to                                            H
    802                  SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A           Nathulal v. Phoo/chand, (1970) 2 SCR 854, distinguished.

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3377 of
    1979.

         From the Judgment and Order dated 26.10.79 of the Delhi High
B   Court in R.F.A. (O.S.) 15 of 1975.

            Shanti Bhushan and K.R. Nagaraja for the Appellants.

            B.A. Masodkar, S.K. Aneja and K.L. Taneja for the Respondents.

C           The Judgment of the Court was delivered by

         MOHAN, J. This appeal by special leave is preferred against the
    judgment of the High Court of Delhi at New Delhi passed in R.F.A. (O.S.)
    No. 15 of 1975 dated 26.10.79, reversing the decree for specific perfor-
D   mance passed by the learned Single Judge in O.S. No. 463 of 1971.

            The short facts leading to this appeal are as under:

    )      On 26.8.71, an agreement for sale was entered into between Kamal
    Rani and Chand Rani. This agreement was entered into through the
E   husband of Chand Rani, Niranjan Nath. Under the terms of the agreement,
    Kamal Rani agreed to sell her house and property comprising of a free-
    hold plot bearing No. 30 Block 'K', Green Park, New Delhi (Village
    Kharera) measuring 311 sq. yards with a double-storeyed residential build-
    ing constructed thereon along with fittings and fixtures for a sum of Rs.
    1, 78,000 in favour of Chand Rani. On the date of execution a sum of Rs.
F   30,000 was paid by way of earnest money. The agreement stipulated that a
    further sum of Rs. 98,000 was payable within 10 days of the execution of
    the agreement. The balance of Rs. 50,000 was to be paid at the time of ·
    registration of sale deed. It was agreed between the parties that Kamal
    Rani, the vendor would redeem the property by paying off a loan of Rs.
    25,000 out of a sum of Rs. 30,000 paid at the time of execution. The
G   property was mortgaged with the Life Insurance Corporation of India. The
    vendor was also to obtain the income-tax clearance certificate. The sale
    deed was to be executed on or before 31.10.71.

          At the time of this agreement the first floor of the house had been
    let out to tenants. It was stipulated in the agreement that the vendor would
H   hand over documents pertaining to the property in the suit together with
        Sf\;{T. CHAND RANI v. SMT. KAMAL RANI [MOHAN, J.]                  803

vacant possession of the first floor by 30.9.71 and possession of the front       A
portion at the time of registration of the sale deed. It was further agreed
that the amount of Rs. 30,00 l would stand forfeited in favour of the vendor
should the vendee fail to pay the sale consideration and get the sale deed
registered within the agreed time.

       Based on this agreement Chand Rani and her husband ·filed O.S. No.
                                                                                  B
463 of 1971 for specific performance. It was alleged that though the
defendant (Kamal Rani) was called upon to complete the sale through
various letters and notices, they evoked no response. She failed to perform
her part of the contract. Since the plaintiff had failed to pay the sum of
Rs. 98.000 within ten days from the date of the agreement, namely, by             C
6.9.71, the agreement stood annulled and the sum of Rs. 30,000 stood
forfeited. To this effect the defendant addressed a letter on 15.9.71. In reply
to the said letter the plaintiff wrote to the defendant calling upon her to
execute the sale deed offering to pay the remaining consideration at the
time of the execution of the sale deed. Since the defendant failed tp comply      D
with this demand the suit came to be filed claiming specific performance
of the agreement or_ in the alternative, damages in the sum of Rs. 1,50,000
including the refund of Rs. 30,000.


      In defence, the execution of the suit agreement was admitted.               E
Likewise, the receipt of the sum of Rs. 30,000. However, this stand was
taken that the payment of Rs. '98,000 within 10 days from the date of the
execution of the agreement was the essence of the contract. Inasmuch as
the said amount was not paid the defendant was entitled to treat the
contract as having become null and void. No doubt, the defendant was to
redeem the suit property and to deliver the documents by 30.9.71. How-            F
ever, this had to be done only on payment of Rs. 98,000 within 10 days of
the execution of the agreement. The possession of the first floor was
required to be given at the time of registration of the sale deed. In fact,
the first floor had been got vacant from the tenants by 20.9.71. The front
portion of the house was already in her possession and delivery thereof
could easily be made at the relevant time. The plaintiff never tendered a         G
sum of Rs. 98,000. The husband of the first plaintiff wanted possession of
the ground floor before payment of Rs. 98,000. This demand was contrary
to the terms of the agreement. Therefore, the defendant was not wiHing to
accede to the demand. Under these circumstances, the suit is misconceived
and is liable to be dismissed. The sum of Rs. 30,000 stood rightly forfeited
against her.                                                                      H
    804                 SUPREME COURT REPORTS (1992] SUPP. 3 S.CR.

A         Two i~portant points came up for consideration to the trial court.

          (1) Whether time was the essense of the contract?

          (2) Whether the plaintiffs were ready and willing to perform their
    part of the contract?
B
           On trial, the learned Single Judge held that on a reading of the suit
    agreement payment of Rs. 98,000 by 6.9.71 was not the essence of the
    contract. He further concluded that the plaintiffs were always ready and
    willing to perform their part of the contract and it was the defendant who
c   was trying to resile from the terms of the contract. In view of this, he
    decreed the suit.

           Aggrieved by the same, the matter was taken up in appeal. under
    R.F.A. (O.S) No. 15/75. The Division Bench of the High Court on an
    elaborate consideration of the oral and documentary evidence held that the
D   non-payment of Rs. 98,000 by the plaintiffs on or before 6.9.71 would entitle
    the defendant to treat it as a breach of contract. The insistence of the
    plaintiffs to obtain the income-true clearance certificate and redemption of
    the property before the payment of Rs. 98,000 was unjustified. Such an
    insistence could only be regarded as trying to vary the terms of the
    agreement. On the whole, the transaction failed primarily on account of
E   non-payment of Rs. 98,000 by 6th of September, 1971. If on this account it
    was treated as a breach it was understandable and could not be said to be
    unjustified. In the result, the decree for specific performance was set aside.
    The plaintiffs were held entitled to the refund of the sum of Rs. 30,000. To
    this effect, a decree was granted 'in their favour. Challenging the same,
    special leave to appeal was preferred. This Court while granting special
F   leave ordered as under:

            "We grant leave in the light of the observations brought to
            our notice in an earlier decision of this Court referred to
            by the High Court. Nevertheless, we feel the position of
            law so decided deserves reconsideration by this Court. And
G           therefore we direct that this appeal be placed before the
            learned C.J. for directions that it be heard by a larger
            Bench. Stay appln. allowed to be withdrawn."

          It is under these circumstances, the present civil appeal comes before
H   us.
         SMT. CHAND RANI v. SMT. KAMAL RANI [MOHAN, J.]                     805

      Pending civil appeal, both the appellant, Chand Rani (plaintiff) and         A
 respondent, Kamal Rani (defendant) died. Their legal representatives have
 been brought on record. The parties will be referred to as plaintiff and
 defendant throughout this judgment.

       Mr. Shanti Bhushan, learned counsel would urge the same two
 points.                                                                           B

        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    C
 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 and Ors. v. Pallani-
 swami Nadar, [1967] 1 SCR 227, Hind Construction Contractors v. The State
 of Maharashtra, [1979j 2 SCR 1147 andlamshed Khodaram Irani v. Burjorji           D
 Dhunjibhai, AIR 1915 Privy Council 83.

         As regards the readiness and willingness, it. is clear from the various
  documents that the plaintiffs, at all material times, were ready and willing
  to perform their part of the contract. Repeated notices were issued sup-
  ported by telegrams, calling upon the defendant to complete the sale. Even       E
  latterly, notice was issued through advocate that the plaintiff never refused
· to make the payment ·and was ready to make the payment. Again, by 24th
  September, 1977, this stand was reasserted through advocate's notice.
  Delivery of possession was insisted upon because that was a part of the
  agreement that such possession must be handed over by 30th of September,
  1971. The suit agreement must be read as a whole and the sequence of             F
  events ought to have been ascertained properly and as laid down in
  Nathulal v. Phoolchand, [1970] 2 SCR 854.

       Mr. B.S. Masodkar, learned counsel for the defendant, in opposition,
 would urge that as a general proposition of law, in the case of sale of
 immovable property time is not the essence of the contract. To this, there G
 cannot be any demur. However, in this case having regard to the terms of
 the cont~act it is clear that there was an obligation to pay a sum of Rs.
 98,000 within 10 days from the date of the execution of the contract. Failure
 to do so would render the contract vitiated. From this point of view the
 authorities cited above will have no relevance.                               H
    806                 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A          No doubt, there were obligations on the part of the defendant to
    clear off the mortgage as well as to obtain the income-tax clearance
    certificate. Those obligations will arise only after the payment of Rs. 98,000.
    In the absence of such a payment the plaintiff had no right to insist upon
    these obligations being performed. In other words, in this case the parties
    did intend to make time the essence of the contract. Though the learned
B   Single Judge did not agree with this argument, the Division Bench correctly
    appreciated the matter in the proper perspective and has come to the right
    conclusion. In this view, there is no scope for application of the ratio in
    the ruling in Nathu/al's case (supra). The question of judging the sequence
    of events does not arise.

C        From the materials available in this case it is clear that the plaintiff
  was.never ready and willing. No doubt, on 10.9.71, a notice was issued to
  the defendant that the first plaintiff had ready money with her for the
  purchase of property. It was also followed' by a telegram. However, that
  was replied to calling upon the plaintiff to pay a sum of Rs. 98,000 which
  should have been paid on or before 26.8.71. This stand was reiterated by
D reply notice dated 16.9 .73. Strangely, the plaintiff would insist upon the
  vacant possession of the first floor by 30th of September, 1971. Only on
  such deliver of possession and payment of taxes the plaintiff was prepared
  to part with the consideration of Rs. 98,000. Therefore, it would be clear
  from the notice of the plaintiff dated 24.9.71 excepting mere assertion of
  readiness and willingness, it was not followed by conduct. The idea of the
E plaintiff seems to be to obtain delivery of possession. As has been rightly
  held by the Division Bench that where a counter term stipulated which was
  not supported by the suit contract, certainly the suit contract will stand
  vitiated. Thus it is submitted that no case is made out for interference.

          Having regard to the. above submissions only two points require to
F be consisdered by us.

          (1) Whether time is the essence of the contract?

        (2) Whether the first plaintiff was ready and willing to perform the
G contract?
        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
H the law of equity which governs the rights of che parties in the case of
                SMT. CHAND RANI v. SMT. KAMAL RANI [MOI-IAN, .J.]                807

        specific performance of contract to sell real estate, law looks not at the A
        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 inten-
        tion to make time the essence of the contract must be expressed in
        unequivocal language.                                                      B
               We will now refer to the decisions of this Court. In Gomathinayagam
        Pillai's case (supra) it was held at pages 231 to 233:

                "Section 55 of the Contract Act which ·deals with the
                consequences of failure to perform an executory contract               c
                at or before the stipulated time provides by the first para-
                graph:

                    '"When a party to a contract promises to do a certain
                thing at or before a specified time, or certain things at or           D
                before specified times, and fails to do any such thing at
                or -Oefore 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."
                                                                                       E
                    It is not merely because of specification of time at or
                before which th~ 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           F
                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 parti~s
                and the surrounding circumstances at or before the con-
                tract. Specific performance of a contract will ordinarily be           G
                granted, notwithstanding default in carrying out the con-
                tract 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 immov-         H
    808               SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A         able 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 (I.L.R. 40 Born. 289) the Judicial
B         Committee of the Privy Council observed that the prin-
          ciple underlying s. 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:
c
              "Under that law equity, which governs the rights of the
          parties in cases of specific performance of contracts to
          sell real escate, 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
D         which completion was to take place, really and in sub-
          stance 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 feference to sales of land. It may
E         be stated concisely in the language used by Lord Cairns
          in Tilley v. Thomas (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
F         against, and enforce, specific performance, notwithstand-
          ing 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
G         between the parties, the nature of the property, or the
          surrounding circumstances' which would make it in-
          quitable 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
H         three grounds .... mentioned by L0rd Justice Turner 'ex-
       SMT. CHAND RANI v. SMT. KAMAL RANI [MOHAN, J.]                   809

        press stipulation' requires no comment. The 'nature of the            A
        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             B
        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              c
        stipulation must show that the intention was to 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 merely. secondary
        importance in the bargain, and that to disregard them
                                                                              D
        would be to disregard nothing that lay as its foundation.
        "Prima f acie, equity treats the importance of such time
        limits as being subordinate to the main purpose not-
        withstanding that from the point of view of a Court of Law
        the contract has not been literally performed by the plain-           E
        tiff as regards the time limit specified."

     In Govind Prasad Chaturvede v. Hari Dutt Shastri and Another, {1977]
2 sec 539 following the above ruling it was held at pages 543-544:
                                                                              F
            "It is settled law that the fixation of the period within
        which the contract has to be perfonned 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. Pallanis-                G
        wami Nadar, [1967] 1 SCR 227, 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 if
        of the essence of the contract. The intention to treat time
        as the essence of the contract may be evidenced by cir-               HI
     810                SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A           cumstances which are sufficiently strong to displace the
            normal presumption that in a c;ontract of sale of land
            stipulation as to time is not the ess('fnce of the contract."

                                                    (Emphasis supplied)

B         In Hind Constru.ction Contractor's case (supra) quoting Halsbury's
     Laws of England, this Court observed at pages 1154-55 as under:

             "In the latest 4th edn. of Halsbury's Laws of England in
             regard to building and engineering contracts the statement
             of law is to be found in Vol. 4, Para 11791 which runs thus:-
c
                 "1179. Where time is of the essence of the contract.
             The expression time is of the essence means that a breach
             of the condition as to the time for performance will entitle
             the innocent party to consider the breach as a repudiation
             of the contract. Exceptionally, the completion of the work
.D
             by a specified date may be a condition precedent to the
             contractor's right' to claim payment. The parties may ex-
             pressly provide that time is of the essence of the contract
             and where there is power to determine the contract on a
             failure to complete by the specified date, the stipulation
E            as to time will be fundamental.

             Other provisions of the contract may, on the con,rtru.ction of
             the contract, exclude an inference that the completion of the
             works by a particular date 'is fundamental, time is not of the
             essence where a sum is payable for each week that the work
F            remains incomplete after the date fu:ed, nor where the parties
             contemplate a postponement of completion.

                Where time has not been n.ude of the essence of the
            contract or, by reason of waiver, the time f1Xed has ceased
G           to be applicable, the employer may by notice fix a reasonable
            time for the completion of the work and dismiss the con-
            tractor on a failure to complete by the date so fixed."

                                                    (Emphasis supplied)

H               It will be clear from the aforesaid statement of law that
        SMT. CHAND RANI v. SMT. KAMAL RANI (MOHAN, J.]                   811

        even where the parties have expressly provided that time                A
        of the essence of the contract such a stipulation will have
        to be read along with other provisions of the contract and
        such other provisions may, on construction of the contract,
        exclude the inference that the completion of the work by
        a particular date was intended to be fundamental, for
        instance, if the contract were to include causes providing              B
        for extension of time in certain contingencies or for pay-
        ment of fine or penalty for every day or week the work
        undertaken remains unfinished on the expiry of the time
        provided in the contract such clauses would be construed
        as rendering ineffective the express provision relating to              c
        the time being of the essence of contract. The emphasis
        portion of the aforesaid statement of law is based on
        Lamprel/ v. Billericay Union (1849) 3 Exch 283 at 308,
        Webb v. Hughes (1870) L.R. 10 Eq 281 and Charles Rick-
        ards Ltd. v. Oppenheim (1950) 1 KB 616."
                                                                                D
     In Smt. Indira Kaur and others v. Shri Sheo Lal Kapoor, AIR 1988
SC 1074 in paragraph 6 it was held as under:

        "The law is well-settled that in transactions of sale of
        immovable properties, time is not the essence of the Con-
        tract."                                                                 E

     For this proposition reliance was placed on Govind Prasad
Chaturvedi's case (supra) quoted above.

      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         F
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;
                                                                                G
         2. from the nature of the property; and

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

      In the above legal background, we will now look at the terms of the       H
    812                SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A   suit contract dated 26th of August, 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
B           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 ac-
            knowledges. Rs. 98,000 (Rupees ninety eight thousand
            only) will be paid by the second party to the 1st party
            within a period of ten days only and the balance of Rs.
c           50,000 (Rupees fifty thousand only) at the time of registra-
            tion 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
D           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
E           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
F           or before 31.10.1971.

                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
G           court of law.

               5. That if the second party fails to pay the balance sale
                                                                              )Ill
            consideration and get the sale deed exe<;:uted and
            registered within the specific period mentioned in para 3
H           above, the earnest money of Rs. 30,000 (rupees thirty
        SMTtCHAND RANI v. SMT. KAMAL RANI [MOHAN, J.]                    813
          I
           1,
        thousand only) shall stand forfeited to the 1st party and               A
        this agreement deemed null and void. ·

            6. That the 1st party shall pay all taxes, rates municipal
        taxes upto 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                 B
        completion certificate from the Municipal Corporation,
        Delhi in respect of the super-structure built on the said
        plot shall be handed over along with the vacant possession
        of first floor by 30.9.71 and the front portion of the
        property by the first party to the second party at the time             c
        of registration of the sale deed."

       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
26th of August, 1971. The trial court was of the view that the word "only"      D
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 6th of
September, 1971. Failure to do so would constitute a breach committed by        E
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 wor·d "only" has been used twice over.

      (1) to qualify the amount of Rs. 98,000 and
                                                                                F
      (2) to qualify the period of 10 days.

      Therefore, having qualified the amount there was no further need to
qualify the same unless it be the intention of the parties to make time as
the essence of the contract.

      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 cross-examination 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 I-
     814                 SUPREME COURT REPORTS [1992) SU~_P. 3 S.C.R.
                             .                                           \
A 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 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. Ther~fore, we
     conclude that though as a general proposition of law time is not the essence
B    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 agree-
     ment. From this point of view, we are unable to see how the case in
     Nathulal (supra) could have any application to the facts of this case.

C          The next question is whether the plaintiff was ready and willing? The
     notices which were exchanged between the parties have to be looked into
     in determining readiness and willingness. On 10.9.71 the plaintiff would say
     through the registered notice that ready money was available for purchase
     of the property which was followed up by a telegram. The stand is taken
     by the defendant that within 10 days from 26.8.71, the sum of Rs. 98,000
D    was not paid; hence, the sum of Rs. 30,000 stood forfeited. The redemption
     of the mortgage would be done and the income-tax clearance also would
     be obtained after the purchase of stamp paper. Where, therefore, the
     plaintiff was put on notice as to the stand of the defendant with regard to
     payment of Rs.98,000 which again was reiterated in the notice dated
is   16.9.73, nothing would have been easier for the plaintiff than to pay the
     said ~m. Instead of adopting that course what is stated in the notice dated
     24.9.71 by the plaintiff is as follows:

             "5. That as per agreement, your clientess has to pay all taxes,
             rates, municipal taxes upto the date of registration and that
''           the previous and other documents pertaining to the said
             plot No. 30, block 'K', sanctioned plan and completion
             certificates from Municipal Corporation of Delhi in respect
             of the superstructure built on the said plot shall be handed
             over alongwith the vacant possession of first floor by
             30.9.1971.

                 You know that 30.9.1971 is fast approaching and your               <
             clientess is still to comply with these requirements besides
             mentioned in para No. 2 and 3 of the agreement.

                I, therefore, caU upon you to advise your clientess to
          SMT. CHAND RANI v. SMT. KAMAL RANI [MOHAN, J.]                  815

           comply with the requirements will before 30.9.71 or latest            A
           by 30.9.71 and obtain the further part consideration of Rs.
           98,000 from my clientess.

      Therefore, even as late as 24.9.71 the plaintiff was never willing to
make the payment of Rs. 98,000. In this connection, we have already seen         B
the oral evidence. It shows there was no readiness and willingncs!> We are
in agreement with the conclusion of the Division Bench.

         In view of the foregoing discussion, civil appeal is dismissed with
costs.                                                                           c
V.P.R.                                                     . Appeal dismissed.