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R. Kandasamy (Since Dead) & Ors. vs. T.R.K. Sarawathy & Anr.

Not available · 2024 INSC 884Decided 21 Nov 2024
Not available
Justice Dipankar Datta · Justice Sanjay Karol

Background

The sellers (R. Kandasamy and others) agreed on 20 January 2005 to sell land with a tenanted building to the buyer, T.R.K. Sarawathy, for Rs 2.3 crore, with time expressly made "of the essence" and the balance consideration payable within four months. The buyer paid only Rs 15 lakh in instalments (including a Rs 10 lakh advance) and did not pay the balance within the stipulated period. When the sale did not go through, the buyer sued for specific performance; the Trial Court dismissed the suit, but the Madras High Court reversed this and decreed specific performance in her favour. During the pendency of that appeal, the sellers sold the property to M/s. ABT Limited, which was impleaded and also appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that since time was expressly of the essence, the buyer's failure to pay the balance consideration within the agreed four-month window was fatal to her claim, and that she had also failed to plead and prove continuous readiness and willingness to perform her obligations under the contract, an essential requirement under Section 16(c) of the Specific Relief Act for a decree of specific performance. The Court restored the Trial Court's dismissal of the suit and set aside the High Court's decree, allowing both appeals. It directed that the Rs 25 lakh (including any court deposits with accrued interest) already paid by the buyer be returned to her.

Lesson Learnt

A buyer seeking specific performance of a property sale agreement must strictly comply with a "time is of the essence" clause and must affirmatively show continuous readiness and willingness to perform their side of the bargain: partial payment alone is not enough to enforce the contract.

Official source (sci.gov.in)View Judgment (PDF)

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