MRS. SARADAMANI KANDAPPAN versus MRS. S. RAJALAKSHMI & ORS.

Citation: [2011] 8 S.C.R. 874 · Decided: 04-07-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Disposed off

Cited by 12 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011] 8 S.C.R. 874 
MRS. SARADAMANI KANDAPPAN 
v. 
MRS. S. RAJALAKSHMI & ORS. 
(Civil Appeal Nos. 7254-7256 of 2002) 
And 
(Contempt Petition (C) No. 28-29 of 2009) 
JULY 4, 2011 
[R.V. RAVEENDRAN AND K.S. RADHAKRISHNAN, JJ.] 
C 
Contract Act 1872: 
s. 55 - Effect of failure to perform at a fixed time in 
contracts in which time is essential - Held: In a contract 
relating to sale of immovable property if time is specified for 
0 
payment of sale consideration but not in regard to the 
execution of sale deed, time will become the essence only 
with reference to payment of sale consideration but not in 
regard to execution of sale deed - Normally in regard to 
contracts relating to sale of immovable properties, time is not 
E considered to be the essence of the contract unless such an 
intention can be gathered either from the express terms of the 
contract or impliedly from the intention of the parties as 
expressed by the terms of the contract - In the instant case, 
in the agreement for sale, there was a conscious effort to de/ink 
the terms relating to payment of balance sale consideration 
F 
from the term relating to execution of sale deed and making 
the time essence only in regard to the payment of the balance 
sale consideration - Therefore, failure of the plaintiff to pay 
the balance consideration clearly amounted to breach since 
time for such payment was the essence of the contract - The 
G defendants were justified in determining the agreement of sale 
-
The rejection of the prayer for specific performance is 
upheld - However, there was no provision in the agreement 
for forfeiture of the amounts already paid, even in the event 
of breach by the purchaser - On the other hand, it provided 
H 
874 
SARADAMANI KANDAPPAN v. S. RAJALAKSHMI & 875 
ORS. 
that if the vendors did not satisfy the purchaser in regard to 
A 
their title, the amounts received would be refunded - Though 
the plaintiff is not entitled to the relief of specific performance, 
it cannot be said that the plaintiff had filed false, frivolous and 
mischievous suits - In view of that, in terms of the agreement 
and in terms of its offer, the plaintiff was entitled to recover s 
the amounts paid by her. 
Principle " Time is not of the essence of the contracts 
relating to immovable properties - Relevance of - Need for 
legislation - Held: The said principle took shape in an era 
C 
when market value of immovable properties were stable and 
did not undergo any marked change even over a few years -
As. a consequence, time for performance, stipulated in the 
agreement was assumed to be not material, or at all events 
considered as merely indicating the reasonable period within 
which contract should be performed - This principle made 
D 
sense during the period when there was comparatively very 
little inflation in India - But a drastic change occurred from 
. the beginning of the last quarter of the twentieth century -
There is a galloping inflation and prices of immovable 
properties are increasing steeply, by leaps and bounds -
E 
Market values of properties are no longer stable or steady - · 
Judicial notice is taken of the comparative purchase power 
of a rupee in the year 1975 and now, as also the steep 
increase in the value of the immovable properties between 
then and now - Properties in cities, worth a lakh or so in or F 
about 1975 to 1980, may cost a crore or more now - The 
reality arising from this economic change cannot continue to 
be ignored in deciding cases relating to specific performance 
- The steep increase in prices is a circumstance which makes 
it inequitable to grant the relief of specific performance where 
G 
the purchaser does not take steps to complete the sale within 
the agreed period, and the vendor has not been responsible 
for any delay or non-performance - A purchaser can no longer 
take shelter under the principle that time is not of essence in 
performance of contracts relating to immovable property, to 
H 
876 
SUPREME COURT REPORTS 
(2011) 8 S.C.R. 
A cover his delays, /aches, breaches and 'non-readiness' - The 
precedents from an era, when high inflation was unknown, 
holding that time is not the essence of the contract in regard 
to immovable properties, may no longer apply, not because 
the principle laid down therein was unsound or erroneous, but 
B the circumstances that existed when the said principle was 
evolved, no longer exist - Legislation - Specific relief- Equity. 
s. 54 -
Reciprocal p

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