Holding

Time is not deemed the essence of a contract unless expressly pleaded, and the plaintiff was ready, willing and able to perform; consequently the appeal is allowed.

Summary

Bibi Jaibunisha sold a property to Jagdish Pandit by a registered conveyance dated 21‑02‑1969, which included an agreement that the property would be reconveyed for Rs 4,000. She filed a suit for specific performance of reconveyance on 07‑04‑1975. The trial court and the Patna High Court dismissed the suit, holding that time was the essence of the contract, that she was not ready and willing to perform, and that the suit was barred by limitation. The Supreme Court held that time can be treated as the essence only if expressly pleaded and an issue is raised, which was not done; therefore the lower courts erred. It also found that the plaintiff was ready, willing and capable of paying the consideration, and that the suit was filed within the limitation period. The Court allowed the appeal, directing the plaintiff to deposit Rs 40,000 and the defendant to reconvey the property, with costs awarded to the plaintiff for execution and registration.

Issues considered

Whether time was the essence of the contract for reconveyance and could be raised without specific pleading.
Whether the plaintiff was ready, willing and capable of performing her part of the contract.
Whether the suit was barred by limitation.

Legislation cited

Limitation Act, 1963s. Article 54 of the Schedule
Specific Relief Act, 1963

Subjects

specific performancereconveyancetime of essencelimitation periodcapacity to paycivil appeal

Judgment

A BIBI JAIBUNISHA
v.
JAGDISH PANDIT AND ORS.

FEBRUARY 10, 1997

B [K. RAMASWAMY AND G.T. NANAVATI, JJ.]

Specific JJ.elief Act, 1963 :

Specific pelfonnance of reconveyance-Suit for-Defence-Time as es-
C sence of Contract-+Villingness of plaintiff to pelfonn his part of con-
tract-Held, there is no express plea in the written statement that time was the
essence of the contract-Nor any issue is raised in that behalf-T71ere was no
opportunity to plaintiff to adduce evidence in rebuttal that time was not the
essence of the contract-Limitation of contract was 20.2.1973 and suit filed
D on 7.4.1975. i.e. within the presclibed period of limitation-Therefore, courts
below were wrong in holding that plaintiff had not tendered the amount to
defendant and that plaintiff was not ready and willing to pelfonn her part of
contract-Material question is whether plaintiff had capacity to pay the
money-On this aspect there is no consideration by courts below-Plaintiff
E would deposit Rs. 40,000 in trial court and defendant would reconvey the
property--01i failure of defendant to do so, trial court would have the deed
of reconveyance executed in te1ms of the sale deed.

Smt. Indira Kaur& Ors. v. Shea Lal Kapoor, (1988) 2 SCC 488, relied
on. +
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 921 of
1997.

From the Judgment and Order dated 23.5.96 of the Patna High Court
G in A.F.A.D. No. 135 of 1982.

S.B. Sanyal and Akhilesh Kr. Pandey for the Appellant.

Uday Sinha, Ms. Vimla Sinha and Gopal Singh for the Respondents.

H The following Order of the Court was delivered :
1116
BIBI JAIBUNISHA v. JAGDISH PANDIT 1117
'-+.· Leave granted. A

- This· appeal by special leave arises from 'the judgment of the High
Court of Patna, made on May 23, 1996 in appeal from appellate decree
No. 135 of 1982.
·~

The admitted facts are that the appellant had sold the suit property B
by a registered conveyance dated 21.2.1969 with a contemporaneous agree-
,;.. ment of reconveyance for a consideration of Rs. 4,000. The appellant had
" filed the suit on April 7, 1975 for specific performance of reconveyance of
the property. The Courts below had dismissed the suit on the ground that
the appellant was not ready and willing to perform her part of the contrad. c
The trial Court as well as the High Court further dismissed on the ground
that the time was the essence of the contract and the appellant had not
performed the contract within the stipulated time and, therefore, the suit
is barred by limitation.

"lo( The question therefore, is : whether the view taken by the trial Court D
" and the High Court that the time is the essence of the contract is correct
in law? No doubt, the High Court has framed the point in paragraph 8 of
the judgment and recorded the finding that the time was the essence of the
contract. It is an admitted position that the plea was not specifically raised,
though it was stated in the written statement that the appellant had not
E
performed her terms. of the contract within time. Admittedly, no issue was
raised in this behalf. The question, therefore, is : whether the High Court
would be justified in coming to the conclusion that the time was the essence
of the contract? It i~ now well settled legal position that in the matter .of
+ enforcement of the agreement or agreement of reconveyance, time is not
always the essence of the contract up.less the agreement specificaHy stipu- F
lates and there are special facts and circumstances. in support thereof. It
must be specifically pleaded and issue raised so that the other party has a
right to lead evidence. There is no express plea in the written statement
nor any issue raised in that behalf. Co11sequently, there was no opportunity
to the appellant to adduce rebuttal evidence that time was not the essence G
of the contract.

· This Court in Smt. Indira Kaur & Ors. v. Shea Lal Kapoor, [1988) 2
sec 488 in paragraph 6 held as under :
"On the question whether the time is of the essence of the contract H

,.
1118 SUPREME COURT REPORTS [1997] 1 S.C.R.

A or not we are satisfied that the High Court was in error in allowing
the respondents to raise this question in the absence of specific

-
pleadings or issues raised before the trial court and when the case
of time being the essence of the contract was not put forward by
the respondent~ in the trial court. Apart from the absence of
pleadings we do not find any basis for the plea of the respondents
B that time was of the essence of the contract."

This Court held that the plea cannot be raised, for the first time, in
the High Court when it is not a matter of pleading or issue in that behalf.
We find that the same ratio applies to the facts in this case. Accordingly,
C the fmding·that the time was the essence of the contract and non-suiting
the appellant on that finding is clearly in error. ·

The next question is : whether the appellant was ready and willing
to perform her part of the contract? Jn that behalf, all the Courts have
D found that the appellant was not ready and willing to perform her part of
the contract and an inference has been drawn in support of the finding
from the non-production of the Bank Pass-book. It is seen that though she
has not produced the passbook, it is not the plea of the respondent that
she had no capacity to pay the amount. She established that she has a
substantial money to pay the amount. Under these circumstances, it would ·
E be unlikely that the appellant would have failed to offer the amount before
corning to the Court for the specific performance. It is seen that the last
day of the limitation under the contract was February 20, 1973 and the suit
was filed on April 7, 1975 within three years under Article 54 of the
Schedule to the Limitation Act. The courts below were wrong in corning
F to the conclusion that the appellant had not tendered the amount to the
respondent. It is seen that in the evidence of the plaintiff (PW-1), it is
stated that she was willing and, in fact, she had offered a sum of Rs. 4,500.
On the other hand, another witness (PW-3) has stated that she has offered
to pay a sum of Rs. 4,000. On this minor discrepancy of Rs. 500, the court
below was not right in disbelievin~ the entire evidence.
G
The material question is : whether the appellant had capacity to pay
the money as offered. On this aspect, there is no consideration by either
of the courts. Under these circumstances, the courts below were in error
in reaching the conclusion that the appellant was not ready and willing to
H perform her part of the contract. As held earlier, there is no dispute on
•
I,
.BIBIJ AIBUl'<lSHA v. JAGDISH PANDIT 1119

the capacity of the appellant to pay back Rs. 4,000 the consideration paid A
under the conveyance executed in favour of the respondent. When we put
the question to the learned counsel for the appellant as to what amount
his client is willing to pay since the property is required to be reconveyed
under the agreement, the learned counsel, in fairness, has Mated the
appellant is willing to pay a sum of Rs. 40,000 in lump sum. We think that .B
the offer is very fair. Under these circumstances, even if the learned
counsel for the respondent was not willing to accept, but in our considered
view, we think that the ends of justice and equity would require and be met
by directing the appellant to deposit a sum of Rs. 40,000 in the trial Court
within a period of six months from today. The appellant on so depositing,
the respondent is directed to produce the title deeds before the Court and C
reconvey the property. In case the respondent refuses to produce the
document of conveyance executed in his favour dated 21.2.1969 as directed
earlier, the trial Court is directed to have the deed of reconveyance
executed in terms of the sale deed dated 21.2.1969. In that event, the
appellant is entitled to the costs of the execution and also the cost of the D
stamp duty and registration fee of the sale deed.

The appeal is accordingly allowed. But, in the circumstances, without
costs.

R.P. Appeal allowed.