Gauhati High Court Dismisses Appeal for Specific Performance Due to Appellants’ Failure to Establish Continuous Readiness and Willingness Within Stipulated Period

Court’s Decision: The Gauhati High Court dismissed the second appeal, upholding the first appellate court’s decision to reverse the trial court’s decree for specific performance. The court found no substantial question of law in favor of the appellants (plaintiffs in the original suit), affirming that they failed to demonstrate their readiness and willingness to fulfill the contractual terms within the stipulated time.

Facts: The respondent (seller) entered an agreement with the appellants (buyers) to sell a plot of land with a house for a fixed price. After paying an advance, the appellants were to pay the remaining balance within four months, after which the respondent would execute a sale deed. Although the appellants claimed readiness to pay, they alleged that the respondent delayed executing the deed. Consequently, they filed a suit for specific performance, which the trial court decreed in their favor. The respondent appealed, and the first appellate court reversed the trial court’s decision, leading to this second appeal.

Issues:

1. Whether the appellants were ready and willing to perform their part of the contract.
2. Whether time was of the essence in the contract for the sale.

Petitioner’s Arguments: The appellants argued that time was not of the essence in the contract, citing Section 55 of the Contract Act, which allows for specific performance even if the specified time has passed. They contended they were consistently ready to perform their part, asserting that the respondent’s refusal to obtain the necessary sale permissions contributed to the delay.

Respondent’s Arguments: The respondent argued that the appellants failed to pay the balance within the agreed period, showing a lack of readiness. Additionally, they cited Supreme Court cases emphasizing that readiness and willingness to perform are essential in specific performance suits and claimed the appellants’ delay signified a lack of genuine intent to complete the transaction.

Analysis of the Law: The court reviewed legal standards on the essence of time in contracts, referencing cases such as Gomathinayagam Pillai vs. Palaniswami Nadar, which held that time is generally not the essence in immovable property contracts unless expressly stipulated. It also cited Hari Steel & General Industries Ltd. v. Daljit Singh, underlining the requirement for plaintiffs in specific performance suits to demonstrate unblemished conduct, including timely action.

Precedent Analysis: The court examined precedents, including Welspun Speciality Solutions Ltd. vs. ONGC and Swarnam Ramachandran vs. Aravacode Jayapalan, to evaluate if time was essential to the contract. It noted that without a specific clause, time may not automatically be the essence unless surrounding circumstances indicate otherwise. Here, the language of the contract and delay by appellants suggested time was, in fact, essential.

Court’s Reasoning: The court found discrepancies in the appellants’ claims of readiness, observing that they had not approached the respondent within the stipulated time and failed to prove they made consistent efforts to complete the purchase. The court noted that the appellants waited over a year after the alleged refusal before initiating legal proceedings, which weakened their claim of continuous readiness.

Conclusion: The court concluded that the appellants did not adequately demonstrate their readiness and willingness to fulfill their contractual obligations within the specified period. Consequently, it affirmed the first appellate court’s ruling, denying specific performance.

Implications: This judgment emphasizes the importance of both readiness and timeliness in suits for specific performance, particularly when dealing with immovable property. It reinforces that plaintiffs must demonstrate unbroken intent and action to meet contractual terms, especially when the contract language suggests that time is of the essence.

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