"Time Not Essence of Contract, Plaintiff in Lawful Possession Since 1984": Madras High Court Directs Defendant to Execute Sale Deed Upon Deposit of Balance Consideration
Isabella Mariam
The High Court of Judicature at Madras, Single Bench, of Justice V. Sivagnanam, adjudicated upon two appeal suits and one cross objection arising out of a suit for specific performance and permanent injunction. The Court directed the execution of the sale deed in favor of the plaintiff upon deposit of the balance sale consideration and dismissed the appeal suits preferred by the defendant.
The case arose out of O.S.No.87 of 2006 filed on the file of the Principal District Court, Puducherry. The plaintiff instituted the suit seeking specific performance of two sale agreements dated 30.11.1984 and 09.04.1987 and also sought a permanent injunction to restrain the defendant from dispossessing her from the A and B schedule properties mentioned in the suit.
According to the plaintiff, the properties originally belonged to Gothandapani, the father of the defendant. A sale agreement was entered into between the plaintiff and Gothandapani on 30.11.1984 in respect of the A schedule property for a consideration of Rs.10,000/-, of which Rs.8,000/- was paid as advance. The remaining Rs.2,000/- was paid on 02.03.1985. The plaintiff claimed that possession of the A schedule property was handed over to her on 30.11.1984.
Further, the plaintiff contended that another agreement was entered into on 09.04.1987 for the sale of the B schedule property for Rs.50,000/-. An advance of Rs.10,000/- was paid on the date of the agreement and another Rs.15,000/- was paid on 05.07.1988, totaling Rs.25,000/-. The plaintiff claimed that possession of the B schedule property was handed over to her on 09.04.1987.
It was submitted by the plaintiff that due to legal hurdles arising under the Urban Land Ceiling Act, the sale deeds could not be executed during the lifetime of Gothandapani. Upon his death, his son, the defendant, promised to execute the sale deed after the repeal of the Act but failed to do so. The plaintiff issued a legal notice expressing readiness and willingness to complete the sale by paying the remaining amount but received no response from the defendant. Consequently, the suit was filed.
The defendant filed a detailed written statement denying the claims. He stated that the properties belonged to his mother, Jayamarie, based on a registered sale deed dated 10.03.1982. The defendant claimed that he became the owner through a will executed by Jayamarie on 30.01.1989. He asserted that the agreements, if any, were unenforceable as they were time-barred under Article 54 of the Limitation Act, 1963. He also denied that possession had been handed over and asserted that the plaintiff had no legal right to seek specific performance or continue possession. A counterclaim was filed seeking a declaration of title and recovery of possession from the plaintiff.
The trial court framed several issues, including the authenticity of the agreements, the payment of consideration, whether time was the essence of the contract, whether the plaintiff was ready and willing to perform the contract, whether the suit was barred by limitation, and whether the defendant was the rightful owner. Based on oral and documentary evidence, the trial court concluded that the agreements were genuine, but the relief for specific performance was barred by limitation. However, it granted a permanent injunction in favor of the plaintiff against dispossession.
On appeal, the High Court examined the documents and testimonies presented at the trial. Justice V. Sivagnanam observed that Jayamarie, mother of the defendant, had executed a registered power of attorney dated 06.06.1981 in favor of her husband, Gothandapani. This was supported by Ex. A13.
The Court recorded, "When there is no specific denial that the signatures found in Ex. A1 and Ex. A2 are not that of him, this Court construes that it is the father of the defendant who had executed the Ex. A1 and Ex.A2 for a valid sale consideration to and in favour of the plaintiff is clearly proved."
It was further recorded that the plaintiff took possession of both A and B schedule properties and had remained in uninterrupted possession since 1984. The plaintiff submitted documentary evidence, including electricity receipts, wealth tax particulars, and application for electricity connection, marked as Ex. A6 to Ex. A12. The Court recorded, "The possession of the suit properties is clearly established by the evidence of the plaintiff and also by the documentary evidence."
The Court noted that Gothandapani passed away on 08.02.1988, as evidenced by Ex. B5. Consequently, the power of attorney ceased to be in force. It was observed: "Since the power of attorney agent namely Gothandam died on 08.02.1988, the power of attorney deed dated 06.06.1981... comes to an end. Therefore, the plaintiff ought to have called upon Jayamarie to execute the sale deed." There was no evidence that the plaintiff took any such step.
However, the Court further noted that the plaintiff continued in possession and had partly performed the agreement. As such, it held that the conduct of parties showed that time was not the essence of the contract. The Court stated, "Normally, in the sale of immovable properties, time is considered not to be an essence of contract, unless such intention is made out either from expressed terms of contract or implied intention of the parties."
The Court also noted that the defendant, in his cross-examination, admitted that other plots in the same survey number (R.S.No.6/4) had been sold and registered in the same period. The plaintiff's possession of plots 16 and 17 was thereby affirmed.
On the issue of the counterclaim, the Court referred to the defendant's admission that the plaintiff was in possession and found no merit in his claim for possession. It was observed that the trial court had correctly held that the plaintiff was in lawful possession and therefore entitled to protection from dispossession.
The trial court's conclusion on the limitation issue was set aside. The Court noted that partial payments made after the initial agreement date, delivery of possession, and subsequent conduct indicated that the time stipulated in the agreement was not strictly enforceable.
The Court recorded: "It reflects that time would not be an essence of contract in regard to the execution of the sale deed as evidenced by putting the plaintiff in the portion of suit properties by the sellers. Putting the plaintiff in possession of the property reflects clear indication the time was not intended to be an essence for completion of the sale."
In view of the findings, the High Court allowed the cross objection filed by the plaintiff and set aside the trial court's dismissal of the claim for specific performance. The appeal suits filed by the defendant were dismissed. The permanent injunction granted by the trial court was confirmed.
The Court ordered:
"The plaintiff is directed to deposit the balance sale consideration of Rs.25,000/- before the trial Court within two months and the defendant is directed to execute the sale deed within three months from the date of receipt of a copy of this judgment."
No costs were awarded.
Advocates Representing the Parties:
For the Appellant: Ms. Anisha Gupta
For the Respondent: Mr. T.M. Naveen
Case Title: Premraja vs. Djeyarattiname
Case Numbers: A.S. Nos. 80 & 81 of 2015 and Cross.Obj.No.14 of 2024
Bench: Justice V. Sivagnanam
[Read/Download order]
