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2018 DIGILAW 1132 (ALL)

RATAN LAL v. OM PRAKASH

2018-05-07

SIDDHARTH

body2018
JUDGMENT Hon’ble Siddharth, J.—Heard Sri Ram Kishore Pandey, Advocate, assisted by Sri Ashok Bhatnagar, learned counsel for the appellant and Sri P. N. Saxena, Sr. Advocate, assisted by Sri K. K. Tewari, learned counsel for the respondents. 2. This is defendant’s Second Appeal against the Judgment and Decree dated 19.10.1984, passed by Ist Additional District Judge, Jhansi in Civil Appeal No. 194 of 1980, dismissing the Appeal and confirming the Judgment and Decree dated 2.8.1980 passed by Munsif Magistrate, Ist Class (Court No. 8), Jhansi in Original Suit No. 113/1979 (Sri Om Prakash v. Sri Ratan Lal). 3. The plaintiff, Om Prakash, instituted an Original Suit No. 113 of 1979, praying for a decree of Specific Performance of Contract dated 11.12.1972 on the ground that the defendant, Ratan Lal entered into an Agreement to Sale dated 11.12.1972 regarding H.No. 11/57, Sadar Bazar, Panna Lal Ka Hata, Jhansi; that at that time the registrations were closed, therefore it was agreed that as soon as the registration will start, defendant will execute a sale-deed in favour of the plaintiff; that the Agreement to Sale was for a consideration of Rs. 4,000/- and the plaintiff paid Rs. 2,000/- as advance and remaining amount of Rs. 2000/- was agreed to be paid to the defendant at the time of execution of sale-deed; that the expenses for registration of the sale-deed were required to be borne by the plaintiff; that there was condition that the defendant shall execute the sale-deed within 1 month from the date, the registration starts; that after registration started the plaintiff requested the defendant to execute the sale-deed but he avoided the same on various pretexts; that the plaintiff as a last resort gave notice dated 11.9.1978 to the defendant but he did not execute the sale-deed and hence the suit was instituted. 4. 4. The defendant’s case is that since there was a condition in the sale-deed that the sale-deed shall be executed within 1 month of the opening of registration of the sale-deed and that time has expired, therefore the agreement is not binding on the defendant; that there was another condition in the agreement that in case the Vendor does not executes sale-deed in favour of the Vendee then he can get the sale-deed registered by force and if the Vendee does not gets the sale-deed executed then the advance sale consideration shall be forfeited by the Vendor; that because the property belongs to joint family therefore the younger brother of the defendant is also co-owner of the same and therefore, the suit of the plaintiff deserves to be dismissed. 5. On the basis of the pleadings of the parties, the following issues were framed by the learned Trial Court, (1). Whether the plaintiff was always ready and willing to purchase the House but the defendant did not fulfill his promise? (2). Whether the suit is barred by time? (3). Any other relief ? Issue No. 1 was decided in favour of the plaintiff holding that time was not the essence of Contract and since the plaintiff gave the notice, paper No. 19-C to the defendant, he was ready and willing to get the sale-deed registered and since the defendant never replied to the notice, despite receipt of the same, his defence cannot be accepted. Issue No. 2 was also decided in favour of plaintiff holding that there is 3 years period provided for instituting the suit for Specific Performance of Contract. After the registration of the sale-deed started in April, 1977, the sale-deed was to be executed within 1 month i.e., upto May, 1977, therefore, the suit could have been filed from June, 1977 to 1980 any time. Because the suit was instituted on 13.1.1978, therefore, it is within time and not barred by time. Issue No. 3 was decided by the trial Court holding that the plaintiff is entitled to relief claimed and decreed the suit by the Judgment and Decree dated 2.8.1980. 6. The defendant preferred a Civil Appeal No. 194 of 1980 before the lower appellate Court which was dismissed by the Judgment and Decree dated 19.10.1984 and hence the Second Appeal. 7. 6. The defendant preferred a Civil Appeal No. 194 of 1980 before the lower appellate Court which was dismissed by the Judgment and Decree dated 19.10.1984 and hence the Second Appeal. 7. On 4.12.1984 this Second Appeal was admitted on the following substantial questions of law, (1). Whether the Courts below can decide the readiness and willingness of the plaintiff without any evidence? (2). When in the agreement to sale, there is specific condition in respect of time limit to perform the agreement and if the plaintiff fails to do so, still the suit can be decreed ? (3). Whether the time is essence to perform the agreement, the agreement can be enforced after the prescribed period ? 8. The learned Counsel for the defendant-appellant has argued that as per Clause-1 of the Agreement to Sell dated 11.12.1972, it was clearly agreed between the parties that the defendant shall execute the sale-deed within 1 month from opening of the registration of the sale-deeds. In clause-4 of the same it was agreed that in case the defendant does not executes the sale-deed within the period provided in the agreement then the plaintiff shall be entitled to get the same registered by force and in case the plaintiff does not gets the sale-deed executed within the period agreed upon then his advance sale consideration shall be forfeited. Therefore, the submission is that since the plaintiff failed to get the sale-deed executed within the agreed period of 1 month from the date of opening of the registration i.e., April, 1977, therefore, his earnest money was forfeited and agreement between the parties stood cancelled as per the terms thereof. Time was the essence of contract and once the agreement was not got executed within time, it cannot be enforced thereafter. His further argument is that the plaintiff failed to prove his continuous readiness and willingness for execution of the sale-deed by way of pleadings and evidence. In this statement recorded as P.W.1, the plaintiff has only stated that he has money with him right now for paying the balance sale consideration. He has not stated that he had the resources to get the sale-deed executed all through from the date agreed to in the agreement till date. 9. The learned Counsel for the appellant has relied upon the following authorities in support of his case, which will be considered hereinafter. 10. He has not stated that he had the resources to get the sale-deed executed all through from the date agreed to in the agreement till date. 9. The learned Counsel for the appellant has relied upon the following authorities in support of his case, which will be considered hereinafter. 10. The learned Counsel for the plaintiff-respondent has argued that as per Clause-1 of the Agreement, one months time was agreed between the parties for getting the sale-deed registered as soon as the registration starts. The plaintiff requested the defendant to get the sale-deed executed thereafter, but he avoided the same on various pretexts and kept on making false promises of getting the same registered within 2-3 months. When the plaintiff found that the defendant’s conduct is not bona fide, he gave him the legal notice to execute the sale-deed on 11.9.1978, which was duly received by him but he never replied thereto. It has been further submitted that the period of limitation for filing a suit for Specific Performance of Contract is 3 years from the date, the performance is refused by the defendant and therefore, he instituted the suit within time in January, 1978. He has submitted that there was no issue of the suit property being joint framed by the Trial Court, nor any issue regarding the time being essence of contract was framed by the Trial Court and therefore the argument on behalf of the defendant-appellant, in this regard are misconceived. It has been submitted that the plaintiff has clearly pleaded and proved before the leaned Trial Court that he was always ready and willing to get the sale-deed executed from the defendant as per the terms of the agreement and had resources for the same. Time was not the essence of the contract and the recital in clause-4 that earnest money shall stand forfeited in case the sale-deed is not got executed by the plaintiff from the defendant is also subject to law of limitation and cannot be construed as a condition which will shut the entire cause of action available to the plaintiff under the law. His argument is that the cause of action for the plaintiff arose only after the defendant failed to execute the sale-deed within the 1 month period, agreed to for the purpose in clause-1 of the contract of sale and therefore the argument of the Counsel of the defendant-appellant that as soon as the period of 1 month expired, the earnest money of the plaintiff got forfeited by the defendant and consequently the contract came to an end, since after the forfeiture of the earnest money, no sale-deed can be executed, is legally incorrect. If the plaintiff was given right to get the sale-deed executed by force, in case, the defendant fails to get the sale-deed executed till the period agreed upon, then his right to institute the suit will start after the period agreed and not within the period agreed to as per the recital in the agreement dated 11.12.1972. The natural corollary of this condition is that the forfeiture of the amount shall also abide by the law limitation for instituting suit. After consideration of the rival submissions, the first substantial quest of law, regarding readiness and willingness of the plaintiff has to be decided, as per Section-16 (c) of the Specific Relief Act, 1963. 11. The learned counsel for the defendant-appellant in support of his argument on the question has relied upon paragraph Nos. 9, 10, 11 and 12 of the Judgment, J.P. Builders and another v. A. Ramdas Rao and another, 2010 Law Suit (SC) 831 : (2011) 1 SCC 429 , 9) The words “ready” and “willing” imply that the person was prepared to carry out the terms of the contact. The distinction between “readiness” and “willingness” is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness. 10) In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and others, (1995) 5 SCC 115 at para 5, this Court held: “.....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. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. 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 alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. 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. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract.” 11) In P.D’Souza v. Shondrilo Naidu, (2004) 6 SCC 649 paras 19 and 21, this Court observed: “It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstance of each case. No strait-jacket formula can be laid down in this behalf.... The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale.” 12) Section 16(c) of the Specific Relief Act, 1963 mandates “readiness and willingness” on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. The onus is on the plaintiff. It has been rightly considered by this Court in R.C. Chandiok and another v. Chuni Lal Sabharwal and others, (1970) 3 SCC 140 , that “readiness and willingness” cannot be treated as a straight jacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. “Readiness and willingness” to perform the part of the contract has to be determined/ascertained from the conduct of the parties. 12. Paragraph No. 2 of Judgment of Apex Court, His Holiness Acharya Swami Ganesh Das Ji v. Sita Ram Thapar, 1996 Law Suit (SC) 852 : 1996, 4 SCC 522 : There is a distinction between deadiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For contract, the conduct has to be properly scrutinised. There is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had the funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale-deed to the defendant within 7 days of the execution of the agreement, i.e., by 27.2.1975. The draft sale-deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff’s part of the party and the attending circumstances. According to the terms of the agreement, the plaintiff was to supply the draft sale-deed to the defendant within 7 days of the execution of the agreement, i.e., by 27.2.1975. The draft sale-deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff’s part of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff was no ready no capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bit for the time which disentitles him as time is the essence of the contract. 13. Paragraph No. 23 of the Apex Court’s Judgment, Man Kaur (dead) by LRs. v. Hartar Singh Sangha, 2010 LAW Suit (SC) 675: (2010) 10 SCC 512 , 23. The learned counsel for the respondent contended that in terms of the agreement, the defendant had to furnish an NOC from Chandigarh Administration, as also ULC clearance and income tax clearance required for the sale and there was nothing to show that she had obtained them, and therefore the question of plaintiff proving his readiness and willingness to perform his obligations did not arise. This contention has no merit. There are two distinct issues. The first issue is the breach by the defendant - vendor which gives a cause of action to the plaintiff to file a suit for specific performance. The second issue relates to the personal bar to enforcement of a specific performance by persons enumerated in Section 16 of the Act. A person who fails to aver and prove that he has 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 the terms the performance of which has been prevented or waived by the defendant) is barred from claiming specific performance. A person who fails to aver and prove that he has 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 the terms the performance of which has been prevented or waived by the defendant) is barred from claiming specific performance. Therefore, even assuming that the defendant had committed breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and willing to perform the essential terms of contract which are required to be performed by him (other than the terms the performance of which has been prevented or waived by the plaintiff), there is a bar to specific performance in his favour. Therefore, the assumption of the respondent that readiness and willingness on the part of plaintiff is something which need not be proved, if the plaintiff is able to establish that defendant refused to execute the sale-deed and thereby committed breach, is not correct. Let us give an example. Take a case where there is a contract for sale for a consideration of Rs. 10 lakhs and earnest money of Rs. 1 lakh was paid and the vendor wrongly refuses to execute the sale-deed unless the purchaser is ready to pay Rs. 15 lakhs. In such a case there is a clear breach by defendant. But in that case, if plaintiff did not have the balance Rs. 9 lakhs (and the money required for stamp duty and registration) or the capacity to arrange and pay such money, when the contract had to be performed, the plaintiff will not be entitled to specific performance, even if he proves breach by defendant, as he was not ‘ready and willing’ to perform his obligations. 14. Paragraph Nos. 9 and 10 of Jayakantham and others v. Abay Kumar, 2017 Law Suit (SC) 142: (2017) 5 SCC 178 , 9. The precedent on the subject is elucidated below : (i) In Parakunnan Veetill Joseph’s Son Mathew v. Nedumbara Kuruvila’s Son and others[1], this Court held that : “...14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff...” (ii) A similar view was adopted by this Court in Sardar Singh v. Smt. Krishna Devi and another[2] : “...14. Section 20(1) of the 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; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The Court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.” (iii) Reiterating the position in K. Narendra v. Riviera Apartments (P) Ltd. [3], this Court held thus : “...29. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the Court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate Court.” (iv) These principles were followed by this Court in A.C. Arulappan v. Smt. Ahalya Naik[4], with the following observations : “.....7. The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the Court would desist from granting a decree to the plaintiff.” ........ “.....15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the Court.....” (v) A Bench of three Judges of this Court considered the position in Nirmala Anand v. Advent Corporation (P) Ltd. and others[5], and held thus : “.....6. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the Court.....” (v) A Bench of three Judges of this Court considered the position in Nirmala Anand v. Advent Corporation (P) Ltd. and others[5], and held thus : “.....6. It is true that grant of decree of specific performance lies in the discretion of the Court and it is also well-settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well-settled that the Court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.” 10. In the present case, the material on the record contains several aspects which will have to weigh in the balance. There is no dispute about the fact that the father of the respondent who entered into an agreement on his behalf (and deposed in evidence) carried on money lending business. In the present case, the material on the record contains several aspects which will have to weigh in the balance. There is no dispute about the fact that the father of the respondent who entered into an agreement on his behalf (and deposed in evidence) carried on money lending business. The consistent case of the appellants in reply to the legal notice, in the written statement as well as in the course of evidence was that there was a transaction of a loan with the father of the respondent. The evidence of DW2 was to the following effect : “The defendant was having a relationship with plaintiff’s father, Babu Dhanaraj in respect of loan transaction. Already the Defendant No. 2 has taken loan from Babu Dhanapathy Raj and bought a lorry and was driving it. In this case, in order to return the loan of Rs. 1,00,000/- as per the instruction of Babu Dhanapathy Raj only on the basis of trust, the Exhibit P1 agreement to sell was executed. In the said document, I have put my signature as a witness.” During the course of the evidence, the appellants produced material (Exhibit D3) indicating that the value of the property was six lakhs thirty thousand on 20 November 2006. The agreed consideration between the parties was rupees one lakh sixty thousand of which an amount of rupees sixty thousand was paid at the time of the execution of the agreement. The sale transaction was to be completed within three years against the payment of the balance of rupees one lakh. The appellants also relied upon Exhibit D2 which indicated that the value of the property as on 1 April 1999. These aspects were adverted to in the judgment of the trial Court and the first appellate Court while setting out the evidence, but have evidently not been borne in mind in determining as to whether a decree for specific performance could judiciously have been passed. 15. Paragraph No. 5 of the Apex Court’s Judgment, N.P. Thirugnanam v. R. Jagan Mohan Rao, Laws (SC), 1995-7-3 : (1995) 5 SCC 115 , 5. 15. Paragraph No. 5 of the Apex Court’s Judgment, N.P. Thirugnanam v. R. Jagan Mohan Rao, Laws (SC), 1995-7-3 : (1995) 5 SCC 115 , 5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the Court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act 1963 (for short, ‘the Act’). Under Section 20, the Court is not bound to grant the relief just because there was valid agreement of sale. 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. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. 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 alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. 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. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of contract. 16. The common ratio in all the Judgment is that the readiness and willingness of the plaintiff to perform his part of contract is a condition precedent to grant of Relief of Specific Performance of contract of sale. 16. The common ratio in all the Judgment is that the readiness and willingness of the plaintiff to perform his part of contract is a condition precedent to grant of Relief of Specific Performance of contract of sale. The plaintiff must allege and prove his continuous readiness and willingness to perform his part of the contract. There is no straight jacket formula to determine this requirement and readiness and willingness on the part of the plaintiff is to be determined/ascertained from the conduct of the parties. In the present case the Clause-1 of the contract clearly provided that the sale-deed would be required to be executed by the defendant in favour of the plaintiff within 1 month from the date the registration of such agreements starts and it is admitted to the parties that the same started in April, 1977. It was further agreed that in case the defendant does not executes the agreement, the plaintiff would be at liberty to get the same executed by force upto the period of 1 month from the date, the registration of such agreement starts. It was further provided in the contract that if upto the time agreed above no effort is made by the plaintiff to get the sale-deed executed, the advance sale consideration shall be forfeited. The plaintiff states that he contacted the defendant variously for the purpose of execution of the sale-deed but he avoided him on various pretexts and perforce he had to sent a notice dated 11.9.1978 to the defendant to execute the sale-deed but he neither replied to the same nor executed the sale-deed. The plaintiff never brought on record the dates when he requested the defendant to get the sale-deed executed, nor the date whereon he directed the defendant to be present before the Registrar for the purpose of execution of the sale-deed. He has not brought on record any evidence to prove that on which date he appeared before the Registrar’s Office and got his attendance registered. A perusal of the trial Court’s record shows that the plaintiff only filed the copy of the receipt of registered post dated 11.9.1978 and the receipt of acknowledgement dated 12.9.1978 duly signed by the defendant as Exhibits-20A1 and 21A1 respectively. A perusal of the trial Court’s record shows that the plaintiff only filed the copy of the receipt of registered post dated 11.9.1978 and the receipt of acknowledgement dated 12.9.1978 duly signed by the defendant as Exhibits-20A1 and 21A1 respectively. The copy of the notice sent by the plaintiff to the defendant requesting him to execute the sale-deed by appearing before the Registrar on a particular date was never filed in Suit. 17. The Counsel for the plaintiff-respondent has stated that since the defendant never replied to the notice sent by the plaintiff for execution of the sale-deed, therefore, adverse inference was rightly be drawn by the Court’s below against him. The defendant could have replied to the notice of the plaintiff stating that as per the agreement the period of execution of the sale-deed has come to an end and therefore he is not bound to execute any sale-deed in his favour. The initial burden of proof was on the plaintiff to prove that his notice and his conduct will ultimately satisfied the requirements of Section-16(c) of the Specific Relief Act, 1963. Therefore, without discharge of the same by the plaintiff, adverse interference cannot be drawn against the defendant on the basis of his conduct. When the plaintiff himself did not brought on record the notice sent to the defendant, so that the contents thereof can be seen by the Court, to decide his readiness and willingness for complying his part of contract, the initial burden of proof was not discharged by the plaintiff. Coupled with this is the question of appearance before the Registrar on any date by the plaintiff for registration of his presence, which was another important consideration to determine his readiness and willingness for performing his part of contract. The Apex Court in the case of Sukhbir Singh and others v. Brij Pal Singh and others, AIR 1966 SC 2510, has held in para 4 and 5: “4.........................When the respondents had pleaded and proved by the Sub-Registrar’s endorsement as per paper No. 41/C that the respondents were present in the office of the Sub-Registrar for having the sale-deed executed and registered by the petitioners, it would be explicit that the respondents were ready and willing to perform their part of the agreement., The facts that the petitioners did not attend the office would prove positively that the petitioners had avoided execution of the sale-deed. 5.................The fact they attended the Sub-Registrar’s office to have the sale-deed executed and waited for the petitioners to attend the office of the Sub-Registrar is a positive fact to prove that they had necessary funds to pass on consideration and had with them the needed money with them for payment at the time of registration...............” 18. Thereafter in the pleadings as well as in his oral statement before the learned Trial Court, the plaintiff has not stated a word about having necessary finances all through for the purpose of getting the sale-deed executed after paying the balance sale consideration to the defendant. 19. Therefore the substantial question of law No. 1 is decided against the plaintiff-respondent and in favour of the defendant-appellant. 20. Now coming to the Second and Third Substantial Questions of Law which are regarding time as essence of the contract. It is to be seen from the perusal of the agreement that in Clause-4 it is clearly provided that the sale-deed is required to be executed by the defendant upto the period of 1 month from the date, the registration of the sale-deed starts and on failure of the defendant to execute the same, the plaintiff would be entitled to get the same executed by force upto the period agreed between the parties. It was also provided that upto the period agreed, if no sale-deed is executed, the advance sale consideration would be forfeited. It is notable that the word “upto” (“Tak” in vernacular) is mentioned in the agreement and not “within” (“Ke Andar” in Vernacular). Therefore, the starting point of limitation for cause of action would start after the period of one month expires and not within the period of 1 month of the opening of the registration. 21. The learned Counsel for the defendant-appellant has relied upon the Apex Court Judgment in the case of Citadel Fine Pharmaceuticals and others v. Ramaniyam Real Estates (P) Ltd., and another, 2011 CJ (SC) 1208 : (2011) 9 SCC 147 on the issue. He has relied upon paragraph Nos. 30, 31, 32, 33, 36, 37, 38, 39 and 40, 30. 21. The learned Counsel for the defendant-appellant has relied upon the Apex Court Judgment in the case of Citadel Fine Pharmaceuticals and others v. Ramaniyam Real Estates (P) Ltd., and another, 2011 CJ (SC) 1208 : (2011) 9 SCC 147 on the issue. He has relied upon paragraph Nos. 30, 31, 32, 33, 36, 37, 38, 39 and 40, 30. Under these circumstances, the question is whether from the facts of this case vendor can raise a defence to the suit for specific performance of the contract that time being of the essence of this contract, the Court cannot order its specific performance when plaintiff failed to discharge its part of the contract within time and when after expiry of time, the contract was cancelled by the vendor in terms of clause 9 of the Contract. 31. The settled law seems to be that in a case for specific performance of contract relating to immovable property time is not normally of the essence. However, this is not an absolute proposition and it has several exceptions. 32. Reference in this connection may be made to the decision of Privy Council in Jamshed Khodaram Irani v. Burjorji Dhunjibhai, (1915-16) 43 I.A. 26. Viscount Haldane delivering the judgment for the Judicial Committee of the Privy Council held that the law applicable to this question is contained in Section 55 of the Indian Contract Act and the learned Law Lord was of the opinion that Section 55 of the Indian Contract Act does not lay down any principle which is different from those which obtain under the law of England with regard to contracts for sale of land. It was further held that in cases relating to specific performance, equity, which governs the rights of the parties, does not look always at the express term of the agreement but at the substance of it in order to ascertain whether the parties named a specific time within which completion was to take place and whether the parties in substance intended that the completion should take place within a reasonable time. The legal position was as follows : “...A Court of Equity will indeed relieve against and enforce specific performance, notwithstanding 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 [3 D.M.& G. 284 at 289] there is nothing in the `express stipulation between the parties, the nature of the property, or the surrounding circumstances’, which would make it inequitable to interfere with and modify the legal right....” (page 32 of the report) 33. The learned Law Lord made it clear that equity can operate in the construction of a contract “unless excluded by any clearly expressed stipulation”. However, it was made clear that equity will not assist where there has been undue delay on the part of one party to the contract and one party has given notice to the other party that the defaulting party must complete the contract within a definite time. A further caution was added by saying that equity will not assist when other circumstances will result in injustice on application of equitable principle. In the words of Lord Haldane the principles have been formulated as follows : “...Nor will it (equity) exercise its jurisdiction when the character of the property or other circumstances would render such exercise likely to result in injustice. In such cases the circumstances themselves, apart from any question of expressed intention, exclude the jurisdiction. Equity will further infer an intention that time should be of the essence from what has passed between the parties prior to the signing of the contract....” (Page 33 of the report) 36. From the terms of agreement in this case which have been set out in the earlier part of the judgment it is clear that the time is of the essence and this is clearly stipulated and understood by the parties having regard to the previous correspondence and also having regard to the laid down terms of the contract and especially when the consequence of non-completion of the terms by purchaser within the stipulated time was spelt out in clause 9. 37. 37. In a case where time is of the essence of the contract, the consequence of non-performance of such term has been very succinctly explained by Chitty on Contracts, (Volume 1, Thirteenth Edition, Sweet & Maxwell in paragraph 21-015) and the same is set out: “Consequences of time being “of the essence”. In determining the consequences of a stipulation that time is to be “of the essence” of an obligation, it is vital to distinguish between the case where both parties agree that time is to be of the essence of the obligation and the case where, following a breach of a non-essential term of the contract, the innocent party serves a notice on the other stating that time is to be of the essence. In the former case the effect of declaring time to be of the essence is to elevate the term to the status of a “condition” with the consequences that a failure to perform by the stipulated time will entitle the innocent party to: (a) terminate performance of the contract and thereby put an end to all the primary obligations of both parties remaining unperformed; and (b) claim damages from the contract-breaker on the basis that he has committed a fundamental breach of the contract (“a breach going to the root of the contract”) depriving the innocent party of the benefit of the contract (“damages for loss of the whole transaction”. (page 1410) 38. Fry in his Treaties on the Specific Performance of Contracts (Sixth Edition) has dealt with this aspect in paragraph 1075 : “Time is originally of the essence of the contract, in the view of a Court of Equity, whenever it appears to have been part of the real intention of the parties that it should be so, and not to have been inserted as a merely formal part of the contract. As this intention may either be separately expressed, or may be implied from the nature or structure of the contract, it follows that time may be originally of the essence of a contract, as to any one or more of its terms, either by virtue of an express condition in the contract itself making it so, or by reason of its being implied.... “ (page 502) 39. “ (page 502) 39. In paragraph 1079, the learned author has explained the position further by saying the time may be implied as essential in a contract from the nature of the subject-matter with which the parties are dealing. The learned author explained this by saying : “1079. Time may be implied as essential in a contract, from the nature of the subject-matter with which the parties are dealing. “If, therefore,” said Alderson B., “the thing sold be of greater or less value according to the effluxion of time, it is manifest that time is of the essence of the contract: and a stipulation as to time must then be literally complied with in Equity as well as in Law....” (page 504) 40. At paragraph 1081 page 505, the learned author made it very clear that in a contract relating to commercial enterprise the Court is strongly inclined to hold time to be essential, whether the contract is for the purchase of land or for such purposes or more ‘directly for the prosecution of trade’. The elaboration of this point by the learned author is as follows : “1081. And so, again, where the object of the contract is a commercial enterprise, the Court is strongly inclined to hold time to be essential, whether the contract be for the purchaser of land for such purposes, or more directly for the prosecution of trade. This principle has been acted on in the matter of a contract respecting land which had been purchased for the erection of mills, also in relation to a sale of pasture lands, required by the purchaser, as the vendor new, for stocking, and in several cases of contracts for the sale of public-houses as going concerns....” (page 505) 22. After considering the above Judgment, it is clear that the Court of equity is required to consider the intention of the parties behind the contract and merely on the limitations of dates mentioned in the contract, the suit of the plaintiff cannot be thrown out. In the present case, the parties agreed that till the last day of month, the terms of the agreement would have to be complied. This does not means that after the last day mentioned in the agreement, the contract stands terminated. In the present case, the parties agreed that till the last day of month, the terms of the agreement would have to be complied. This does not means that after the last day mentioned in the agreement, the contract stands terminated. The cause of action will start only when the contract was not honored by either of the parties and therefore the substantial questions of law Nos. 2 and 3 are answered in favour of the plaintiff and against the defendant to the effect that the time limit mentioned in the agreement did not barred the filing of the suit by the plaintiff. Time was not the essence of contract in the present case as rightly held by learned Trial Court. 23. Therefore, after considering the substantial questions of law framed in this appeal, this Court has come to the conclusion that the plaintiff has failed to prove his readiness and willingness to perform his part of contract and therefore the Courts below have wrongly decreed the suit of the plaintiff for specific performance of contract of sale in exercise of jurisdiction under Section 20 of Specific Relief Act. The decree of the Court’s below are hereby set aside. The suit of the plaintiff for main relief is dismissed. The defendant-appellant is directed to refund the amount of Rs. 2000/- received as advance sale consideration from the plaintiff at the time of agreement dated 11.12.1972 alongwith 10% simple interest per annum till the date of actual payment within a period of 2 months. Failure to deposit the amount, shall make the defendant-appellant liable to pay interest @ 18% per annum. 24. This Second Appeal is consequently allowed and the plaintiff is held entitled to a decree of reimbursement of sale consideration paid to the defendant as stated above.