Telangana High Court
Thoom Narayana vs Dr. Lekkala Ram Reddy on 2 April, 2026
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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO
APPEAL SUIT No.371 of 2008
Dt. 02.04.2026
Between:
Thoom Narayana
.... Appellant
and
Dr.Lekkala Ram Reddy
...Respondent
JUDGMENT:
1. The present appeal has been filed by the
appellant/defendant challenging the judgment and decree in
OS.No.28 of 2006 (Old OS.No.62/02 on the file of the Senior Civil
Judge, Karimnagar) on the file of the III Additional District Judge,
Karimnagar (hereinafter referred to as ‘Trial Court’) whereby the
suit filed by the respondent/plaintiff for specific performance of an
agreement of sale has been decreed.
2. For brevity and also for better understanding of the case, the
parties hereinafter will be referred to as arrayed in the original suit
before the learned Trial Court.
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3. Brief facts of the case are that the plaintiff has filed the
aforesaid suit for specific performance of an agreement of sale
executed by the defendant on 04.07.2000. The defendant is the
owner and possessor of dry land an extent of Ac.0.37 guntas in
Survey No.274/à°…, Ac.0.37 guntas in Survey No.274/à°† and
Ac.0.26 guntas in Survey No.274/ à°† totally admeasuring Ac.2.20
guntas situated at Nagunoor Village, Karimnagar Revenue
Mandal, having purchased the same from the rightful owners for
valuable consideration. Further, the defendant also purchased
land to an extent of Acre 0.37 guntas in Sy.No.274/A, Acre.0.37
guntas in survey No.274/B and Acre 0.26 guntas in Sy.No.275/B,
totally admeasuring Acres 2.20 guntas situated in Nagunoor
village, Karimnagar Revenue Mandal & District, in the name of his
wife namely Smt Thoomu Mallamma, and both lands of the
defendant and his wife, are situated adjacent to each other.
4. Further, it is contended that out of the offer and acceptance
of the plaintiff and the defendant, they have entered into an
agreement of sale on 04.07.2000, whereby the plaintiff agreed to
purchase the entire extent of Acres.5.00 guntas @ Rs.2,20,000/-
per acre out of which one part of the extent of Acres.2.20 guntas,
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was agreed to be registered on 04.08.2000 and the other part of
land of an extent of Ac.2.20 guntas to be registered on 04.10.2000
upon receipt of the entire sale consideration. Pursuant to the said
agreement, a sum of Rs.30,000/- was paid as advance under
Ex.A1, Agreement of Sale, and subsequent thereto, the
defendant’s wife executed a registered sale deed conveying an
extent of Acres.2.20 guntas, standing in her name to the plaintiff,
out of total land admeasuring Acres.5.00 guntas under Ex.A1 on
05.08.2000 by Ex.A3/sale deed.
5. It is stated that the defendant having executed the sale deed
in respect of part of the total extent of land, has postponed the
execution of the registered sale deed in respect of the remaining
extent of land standing in his name to an extent of Acres 2.20
guntas, in favour of the plaintiff by receiving the balance of sale
consideration. Though the plaintiff has approached the defendant
to execute a proper sale deed, the defendant postponed the same,
on one pretext or the other, upon which the plaintiff got issued a
legal notice under Ex.B2, dt.03.11.2000 through his counsel by
demanding the defendant to execute a sale deed by receiving the
balance sale consideration, to which the defendant sent reply,
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dt.08.11.2000/Ex.B1 stating that as the plaintiff failed to obtain
the sale deed within the stipulated time on or before 04.10.2000
despite his repeated requests and therefore at present(at that
time), he was not willing to dispose of the same and through the
said reply notice the defendant purportedly cancelled the
agreement and requested the plaintiff to take back the advance
amount of Rs.30,000/- paid.
6. In this factual background, as the defendant failed to
execute the registered sale deed in favour of the plaintiff by
receiving the balance sale consideration to the extent of the
remaining property admeasuring Acres.2.20 guntas i.e., ‘suit
schedule property’), despite the legal notice issued by the plaintiff,
and the defendant so as to defeat the legitimate right of the
plaintiff, issued reply notice, dt.08.11.2000, stating that the said
agreement is cancelled by the defendant as the balance of sale
consideration is not paid within the stipulated time of 04.10.2000.
The plaintiff further asserted that having executed an agreement
of sale dt.04.07.2000 by receiving advance sale consideration of
Rs.30,000/- towards total sale of land admeasuring Acres.5.00
guntas only an extent of Acres.2.20 guntas was conveyed to the
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plaintiff and the advance consideration of Rs.30,000/- is not
adjusted in the sale deed executed vide Ex.A3 and thus, the same
is advance sale consideration for the balance extent of land, and
that as the defendant failed to perform his part of obligation, the
plaintiff was constrained to file the underlying suit for
enforcement of the agreement of sale dt.04.07.2000.
7. The defendant, at the first instance has filed his written
statement inter alia contending that the agreement of sale
dt.04.07.2000 was forged and fabricated and there was no
transaction at all, but however after leading the evidence i.e., after
almost more than five years, has filed an application to amend the
written statement which was allowed and after allowing of the said
application, whereby the defendant admitted the execution of the
agreement of sale and execution of registered sale deed in favour
of the plaintiff in respect of the half of the extent vide Ex.A2, i.e.,
in respect of the land standing in the name of his wife, and the
balance of land i.e., scheduled property is to be sold vide
agreement of sale after receiving proportionate sale consideration.
However, the defendant has taken a plea that as the plaintiff was
not ready and willing to perform his part of contract and as time is
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essence of the contract and as the plaintiff failed to pay the
balance sale consideration within the stipulated time of
04.10.2000 vide Ex.A1. Further, it is stated by the defendant in
reply vide Ex.B1 that anticipating that the plaintiff would pay the
balance sale consideration in time, he had entered into an
agreement for purchase of land in Sy.No.462 at Nagunoor Village,
but as the plaintiff has not paid the amount in time, he could not
purchase the said land and his advance sale consideration was
fortified, and as such, the said agreement of sale entered into with
the plaintiff was cancelled by him through his reply notice
dt.08.11.2000/Ex.B1 by requesting the plaintiff to take back the
advance sale consideration of Rs.30,000/-, as the agreement of
sale vide Ex.A1 is purported to be cancelled.
8. Basing on the rival contentions, the trial Court has settled
the following issues for trial:
1. Whether the agreement of sale, dt.04.07.2000, is true
and valid?
2. Whether the plaintiff paid any part of the consideration
amount to the defendant?
3. Whether the plaintiff is entitled for specific
performance of agreement of sale?
4. To what relief?
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9. After settlement of issues and in view of the subsequent
amendment petition filed by the defendant raising new grounds,
the following additional issue was settled on 15.06.2000:
Whether the cancellation of agreement pleaded by the
defendant is valid, binding on the plaintiff?
10. During the trial, the plaintiff got examined himself as PW1
and other witnesses as PW2 to PW4, and exhibited Ex.A1 to A7
and the defendant was examined as DW1 and also got examined
DW.2 & DW3 and exhibited Ex.B1 and B2.
11. The learned trial Court after appreciating the evidence
adduced and the arguments advanced on both sides, has decreed
the suit by granting the relief of specific performance of the
agreement, dt.04.07.2000, by directing the plaintiff to deposit the
balance consideration in the Court and challenging the said
judgment and decree, the instant appeal is filed by the defendant.
CONTENTIONS OF THE APPELLANT/DEFENDANT:
12. Learned counsel for the defendant contends that there was
no readiness and willingness to perform his part of the contract by
the plaintiff by the stipulated date of 04.10.2000 as the amount
was not paid by the plaintiff, the learned trial Court judge without
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properly appreciating the facts in proper perspective and under
erroneous views, came to a conclusion that the defendant has
unilaterally cancelled the agreement of sale/Ex.A1 vide reply
notice/Ex.B1, dt.08.11.2000, by requesting the plaintiff to take
back the advance amount of Rs.30,000/- paid under Ex.A1 and it
is also contended that the reply notice under Ex.B1 dt.08.11.2000
and the plaintiff having received the said reply notice/Ex.B1,has
not chosen to give any rejoinder, to specifically show that he was
ready to perform his obligation within the stipulated time and filed
the suit after many months of the demand made by the legal
notice vide Ex.B1, as such it can be inferred that the plaintiff has
agreed for cancellation of the agreement of sale.
13. Another assertion of the counsel for the defendant is that
the agreement of sale was in two parts and the sale consideration
has to be paid by the plaintiff for total extent of Acres 5.00 guntas
in two parts i.e., at the first instance towards half of the property
i.e., Acres 2.20 guntas, the sale consideration should be paid on
or before 04.08.2000 and that for the remaining extent of Acres
2.20 guntas the sale consideration should be paid on or before
04.10.2000 and to the extent of first half of the extent the plaintiff
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has paid the total consideration for the extent of land
admeasuring Acres 2.20 guntas and accordingly the defendant’s
wife has executed a sale deed in favour of the wife of the plaintiff
and that remaining balance of sale consideration is required to be
paid on or before 04.10.2000 and it is urged that when it is
specifically stated that the balance of sale consideration for the 2nd
part is to be paid within such time as mentioned in the agreement
of sale vide Ex.A1, the plaintiff has not paid the balance sale
consideration within the stipulated time of 04.10.2000 and was
not ready and willing to pay the balance sale consideration within
the stipulated time, the plaintiff issued the legal notice vide Ex.B2
demanding the defendant to execute a sale deed only to gain time,
to which reply was sent by the defendant stating that the plaintiff
failed to obtain the sale deed within the stipulated time i.e., on or
before 04.10.2000 by paying the balance sale consideration and as
such the said agreement of sale was cancelled vide the reply
notice/Ex.B1 issued by the defendant, for which also there was no
rejoinder or any explanation offered in the suit pleadings.
14. It is thus, categorically asserted by the counsel for defendant
that as the said sale consideration was not paid within the
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stipulated time i.e., by 04.10.2000, though there is no condition in
the agreement of sale once the date is stipulated in the agreement
of sale for paying the second half of the consideration the time is
the essence of the contract and as the plaintiff has not performed
his part of the contract within the stipulated time, as such the
said agreement of sale is cancelled vide Ex.B1/reply notice, and in
that view of the matter it is stated by the learned counsel for the
defendant that the very finding of the trial Court judge that time is
not essence of the contract is erroneous and is liable to be set
aside and the learned counsel contended that the conduct of the
plaintiff was not proper and there was no readiness on his part.
15. The other contention raised by the learned counsel for the
defendant is that in fact though the legal notice was issued under
Ex.B2 on 03.11.2000, for which a reply notice was issued dt.
08.11.2000, purporting to cancel the said agreement of sale vide
Ex.A1, but however for a considerable time the plaintiff though
demanded for execution of the registered sale deed in his favour
and after issuance of the reply notice kept quiet for much time
and that when other half of the property vide Ex.A1 the
defendant’s possession was interfered with by the plaintiff and his
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wife, the defendant was forced to file O.S.No.389/2001 on the file
of the Prl. Junior Civil Judge, Karimnagar and after obtaining
interim orders in I.A.No.1702/01, after a lapse of around 1 year 5
months 9 days, the plaintiff has instituted the underlying suit
before the trial Court stating that though he was ready and willing
to perform his part of obligation the defendant failed to execute
the registered sale deed in pursuance of Ex.A1, and thus filing of
the underlying suit after 1 year 5 months shows that the plaintiff
has accepted that the said agreement of sale was cancelled vide
Ex.B1, however after lapse of much time has filed the instant suit
and that the trial Court Judge under misconception of law and
facts and without properly appreciating the evidence on record
has decreed the suit and that the said findings are perverse and
liable to be set aside.
16. The learned counsel for the defendant placed reliance in the
case of Lakha Singh v. Balwinder Singh1 wherein the Hon’ble
Supreme Court held as under:
“29. Apparently thus, there was no rhyme or reason as to
why, the respondent-plaintiff would agree to defer the
execution of the sale deed to a date more than a year and
four months after the execution of the disputed agreement.
Thus, the disputed agreement i.e., the agreement to sell read1 Air 2024 Supreme Court 4769
12in entirety is highly suspicious and does not inspire
confidence at all.
30. As per the disputed agreement, the consequence of
nonappearance of the appellant-defendant at the Registrar’s
office on 19th September, 2008 and his failure to get the sale
deed registered, was that the appellant-defendant would be
liable to return the earnest money of Rs.16,00,000/- along
with a penalty of equal amount, totalling to Rs.32,00,000/-
and even thereafter, the respondent-plaintiff would be
entitled to file a case in the civil Court for the execution of the
sale deed. Simultaneously, it was agreed that if the balance
amount was not paid by the respondent-plaintiff, the earnest
money would be liable to be forfeited by the appellant-
defendant.
31. As per the averments made in the plaint, the
respondent-plaintiff did not even once, during the aforesaid
period of 16 months, approach the appellant-defendant for
getting the sale deed executed in terms of the disputed
agreement. He claimed that he straight away proceeded to
the Sub-Registrar’s office on 19th September, 2008 and
remained present there from 09:00 am to 05:00 pm waiting
for the appellant-defendant to turn up and get the sale deed
registered. However, the appellant-defendant failed to
appear at the office of the Sub-Registrar on the scheduled
date. Admittedly, the respondent-plaintiff did not give any
advance intimation to the appellant-defendant imploring him
to receive the balance consideration and execute the sale
deed on the scheduled date i.e. 19th September, 2008 or
anytime thereafter. Instead, he directly proceeded to file the
subject suit in the month of December, 2008 wherein,
alternative prayers, one for the execution of the sale deed
and the other for the refund of the earnest money were
made.”
17. Learned counsel for defendant also relied on the case of
Annamalai v. Vasanthi & Others 2 wherein the Hon’ble Supreme
Court has held that as under:
“When a declaratory relief is essential
2 2025 SCC Online SC 2300
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25. A declaratory relief seeks to clear what is doubtful, and
which is necessary to make it clear. If there is a doubt on the
right of a plaintiff, and without the doubt being cleared no
further relief can be granted, a declaratory relief becomes
essential because without such a declaration the
consequential relief may not be available to the plaintiff8.
For example, a doubt as to plaintiff’s title to a property may
arise because of existence of an instrument relating to that
property. If plaintiff is privy to that instrument, Section 31 of
Specific Relief Act, 1963 enables him to institute a suit for
cancellation of the instrument which may be void or voidable
qua him. If plaintiff is not privy to the instrument, he may
seek a declaration that the same is void or does not affect
his rights. When a document is void ab initio, a decree for
setting aside the same is not necessary as the same is non
est in the eye of law, being a nullity. Therefore, in such a
case, if plaintiff is in possession of the
property See: Anathula Sudhakar v. P. Buchi
Reddy (dead) by L.R.s. and others, (2008) 4 SCC
594 which is subject matter of such a void instrument, he
may seek a declaration that the instrument is not binding on
him. However, if he is not in possession, he may sue for
possession and the limitation period applicable would be
that as applicable under Article 65 of the Limitation Act,
1963 on a suit for possession9. Rationale of the aforesaid
principle is that a void instrument /transaction can be
ignored by a court while granting the main relief based on a
subsisting right. But, where the plaintiff’s right falls under a
cloud, then a declaration affirming the right of the plaintiff
may be necessary for grant of a consequential relief.
However, whether such a declaration is required for the
consequential relief sought is to be assessed on a case-to-
case basis, dependent on its facts.”
18. He further relied on the decision of the Hon’ble Supreme
Court in the case of Jai Kishan Garg v. Randhir Singh 3 wherein
it was held as under:
“13. Another aspect of the matter is that no readiness and
willingness apparently has been proved by the plaintiff3 2024 SCC Online SC 3935
14respondent. Apart from a bald statement that he was ready
and willing and that he went to the office of the Sub-
Registrar on the 60th day i.e. 15.12.2005 and marked his
presence, there is no other evidence or pleading for
establishing readiness and willingness. This was without
any prior notice to the defendant appellant or without even
offering him the balance amount before the said date. The
readiness and willingness was clearly lacking and,
therefore, the suit would also be hit by Section 16(c) of the
Specific Relief Act.”
19. He also placed reliance in the case Parakunnan
Veetill Joseph’s Son Mathew v. Nedumbara Kuruvila’s
Son and others4, wherein the Hon’ble Supreme Court held as
under:
“14. Section 20 of the Specific Relief Act, 1963 preserves
judicial discretion to 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 The High Court has failed to
consider the motive with which Varghese instituted the suit.
It was instituted because Kuruvila could not get the estate
and Mathew was not prepared to part with it. The sheet
anchor of the suit by Varghese is the agreement for sale Ex
A1. Since Chettiar had waived his rights thereunder,
Varghese as an assignee could not get a better right to
enforce that agreement. He is, therefore, not entitled to a
decree for specific performance.”
Contentions of Respondent/Plaintiff:
20. Per contra, learned Senior Counsel Sri A. Venkatesh,
appearing for the plaintiff would contend that the conduct of the
4 1987 Supreme Court 2328
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defendant from his own pleadings in the written statement is clear
that at first instance he denied the execution of Ex.A1 agreement
of sale, and later after commencing the evidence has sought for
amendment of the written statement and stated that the
agreement of sale has been cancelled vide reply notice/Ex.B1, as
the sale consideration was not paid within the stipulated time of
04.10.2000 and that the learned trial Court having seen the
conduct of the defendant and appreciation of judgments cited by
the counsel for the plaintiff has rightly observed that time is not
the essence of the contract, unless the terms of the contract
specifically state that time is essence and determine as to in what
circumstances the time is essence of contract, and since, the
agreement of sale vide Ex.A1 has not stipulated any conditions, in
that view of the matter, the trial Court has by recording
categorical findings held that time is not the essence of the
contract.
21. The learned Senior Counsel placed reliance upon the
principle laid down in Chand Rani v. Kamal Rani 5 wherein it
was held that:
5 (1993) 1 SCC 519
16“19. It is a well-accepted principle that in the case of sale of
immovable property, time is never regarded as the essence of
the contract. In fact, there is presumption against time being
the essence of the contract. This principle is not in any way
different from that obtainable in England. Under the law of
equity which governs the rights of the parties in the case of
specific performance of contract to sell real estate, law looks
not at the letter but at the substance of the agreement. It has
to be ascertained whether under the terms of the contract the
parties named a specific time within which completion was to
take place, really and in substance it was intended that it
should be completed within a reasonable time. An intention to
make time the essence of the contract must be expressed in
unequivocal language.”
22. Learned Senior Counsel also placed reliance in the case of
Ramathal v/s. Maruthathal and ors6 to contend that in the
instant case neither Ex.A1 nor the subsequent notice of any
defendant stipulated that time is the essence of contract, and in
that view of the matter the findings arrived at by the learned trial
Court judge to the extent that time is not essence of contract in
the instant suit is valid and cannot be interfered with. The
relevant portion of the said judgment is as under:
“17. We are mindful of the fact that the agreement contained a
provision stipulating time for payment and completion of the
contract. It is to be noted that Clause 3 of the agreement
makes execution of the contract by the buyer contingent on the
payment which ultimately hinges on the performance of
seller’s obligation to conduct survey and affix boundaries.
Additionally the conduct of the seller especially taking into
consideration the reply notice, dt.05.10.1987, by the seller
wherein they admit that the 6 month time frame was not
binding as the payment obligation may be performed by the6 2018) 18 SCC 303
17end of one year i.e., before completion of the sale. Further by
the aforesaid reply notice the sellers were agreeable to accept
delayed payment subject to payment of extra interest clearly
indicates that the time was not the essence of the contract.
Moreover the sellers were unwilling to perform their part of the
contract in any case.
18. As per the law laid down by this Court in respect of sale
of immovable property there is no presumption as to time
being the essence of the contract. Even when there is no
stipulation courts may infer that it has to be performed within
a reasonable time taking into consideration the terms of the
contract, the nature of the property and other surrounding
circumstances. We feel that this proposition needs to be
revisited in an appropriate case, as the value of an immovable
property rate is fluctuating in recent times.
19. At the cost of repetition, it should be noted that, whether
the time is an essence of the contract would depend on facts
and circumstances of each case. In this case, after taking into
consideration the terms of the contract, the conduct of the
parties and other material placed before us, the contention of
the seller that the time is the essence of the contract is
negated.”
23. Learned Senior Counsel further contended that it is trite law
that even if time is not the essence of the contract, the Court may
infer that it should be performed in a reasonable time, if the
conditions are evident from – (1) the express terms of the
contract, (2) the nature of the property and (3) the surrounding
circumstances and in that regard placed reliance in the case of T.
Jagannadham (died) v. Akkineni Radhakrishna7, wherein this
Hon’ble Court held that mere mention of the date in the agreement
7 1997 APLJ 276 (HC)
18
does not make the time as essence of the contract. Further, in the
instant case the contention of the defendant, who had sought the
amendment after a period of five years of filing of the initial written
statement, that without challenging the cancellation of Ex.A1, the
present suit is not maintainable, is absolutely baseless. Further,
it is contended that that the unilateral cancellation of agreement
of sale vide reply notice/Ex.B1 is bad in law as held in the case of
Annamalai v. Vasanthi8 by the Hon’ble Supreme Court held that
a party cannot unilaterally terminate a contract wherein the
agreement does not provide a specific “consequence clause” and
Ex.A1 does not provide consequence clause or power to any of the
parties to unilaterally terminate the contract as such the
contention of the defendant that the termination in challenged
and thus, the suit is not maintainable against to the settled
principles of law.
24. Insofar as readiness and willingness, it is contended by the
learned Senior Counsel that it is an undisputed principle of law
that the plaintiff needs to establish readiness and willingness to
succeed in the suit for specific performance and in the present
8 2025 SCC online SC 2300
19
case the respondent/plaintiff conduct remained consistent with
the intent of fulfilling the contract while the defendant conduct
was marked by evasion and the plaintiff herein showed his
financial capacity and readiness vide Ex.A7 dt.06.06.2007, letter
of Oriental Bank of Commerce, wherein the plaintiff herein has
deposited the balance sale consideration in the fixed deposit and
that as the plaintiff has already paid half of the sale consideration
and an extent of Acres 2.20 guntas has already been conveyed to
the plaintiff vide Ex.A3 and Rs.30,000/- paid as advance sale
consideration still remains with the defendant, as it was not
adjusted in the sale deed vide Ex.A3, and in that view of the facts
and circumstances more than 50% of the sale consideration has
been received by the defendant.
25. In that view of the matter, learned Senior Counsel placed
reliance on the judgments in Motilal Jain v. Ramdasi Devi and
others9 and P.Ramasubbamma v. V.Vijayalakshmi10 wherein
the Hon’ble Supreme Court held that apparent refusal was
motivated by increase in land value and also stated that ordinary
9 (2000) 6 SCC 420
10 (2022) 7 SCC 384
20
rule is that specific performance should be granted and it ought to
be denied when equitable considerations point to its refusal.
26. Further, placing reliance on the judgments of the Hon’ble
Supreme Court in Prakash Chandra v. Angadlal 11 and R.
Kandasamy(Since Dead) v T.R.K.Sarawathy12, contends that
as long as suit for specific performance is filed within the period of
limitation, delay cannot be put against the plaintiff and also stated
that in view of Section 49 of the Indian Registration Act, 1908, the
unregistered agreement of sale can still be taken and the effect of
non-registration of agreement of sale can be received as evidence
of a contract in a suit for specific performance under Chapter II of
the Specific Relief Act, 1963, and as already stamp duty is paid
under Ex.A1, the learned Senior Counsel contends that on all
aspects the plaintiff has substantially proved the case and that as
more than substantial amount of consideration has already been
paid, though it is an equitable relief, it should be applied in favour
of the plaintiff. The learned Senior Counsel also contends that if
the suit for specific performance is filed within the limitation, it is
enough to controvert the contention of the defendant that the suit
11 (1979) 4 SCC 393
12 (2025) 3 SCC 513
21
has been filed after 1 year 5 months after issuance of legal notice.
It is further contended by the learned Senior Counsel that initially
the defendant has denied the execution of Ex.A1 and
subsequently amended the written statement and admitted the
execution of Ex.A1, which itself shows the conduct of the
defendant as unclean.
27. Further it is contended that in view of the findings of the
learned trial Court judge there are no grounds made by the
defendants for interfering with the findings of the learned trial
Court judge and that the findings arrived are properly based on
material adduced in evidence by the plaintiff and that the
defendant has not established any case much less any grounds for
interference of this Court and this appeal is devoid of merits and
is liable to be dismissed.
28. Having carefully considered the submissions of the learned
counsel on both sides and perused the material on record, the
Court proceeds to address the merits of the case.
29. Basing on the grounds of appeal and the contentions
advanced by both the parties, this Court thought it fit to form the
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following issues for proper adjudication of the matter and re-
appreciate the evidence on record and also determine whether the
findings arrived at by the learned trial Court judge are just and
proper.
1) Whether cancellation of the Agreement of Sale,
dt.04.07.2000/Ex.A1 vide reply notice, dt.08.11.2000/
Ex.B1, issued by the defendant is valid and binding on
the plaintiff, so as to extinguish the rights of the
plaintiff over the suit schedule property, taking into
consideration, whether the time was the essence of the
contract?
2) Whether the plaintiff has shown constant readiness
and willingness to perform his part of obligation as per
the provisions of Section 16C of the Specific Relief Act,
1963.
3) Whether the plaintiff has proved the case to grant the
equitable relief of specific performance of the
agreement of sale vide Ex.A1, in view of Section 20 of
the Specific Relief Act, 1963.
4) Whether the findings arrived at by the learned trial
Court vide impugned judgment and decree are proper,
valid and legal.
OBSERVATION BY THE COURT :
1) Whether cancellation of the Agreement of Sale,
dt.04.07.2000/Ex.A1 vide reply notice, dt.08.11.2000/
Ex.B1, issued by the defendant is valid and binding on
the plaintiff?
30. This Court has carefully considered the rival submissions
and the material available on record. It is not in dispute that the
plaintiff issued legal notice dt.03.11.2000 under Ex.B2 calling
upon the defendant to execute the sale deed. In response, the
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defendant issued reply notice dt.08.11.2000 under Ex.B1, wherein
he categorically stated that as the entire sale consideration was
not paid within the stipulated time, the agreement of sale stood
cancelled and called upon the plaintiff to take back the advance
amount of Rs.30,000/-.
31. However, the validity of such cancellation depends upon the
terms of the agreement and the subsequent circumstances, which
happen to make it a voidable agreement.
32. A perusal of Ex.A1 does not disclose any clause enabling
either party to unilaterally cancel the agreement, nor does it
contain any “consequence clause” stipulating automatic
termination upon failure to perform within the stipulated time. In
that view of the matter, the unilateral cancellation sought to be
effected by the defendant through Ex.B1 cannot, by itself, be said
to be legally conclusive or binding.
33. In T.Jagannadham (died) per LR’s case(supra) a Division
Bench of the erstwhile High Court of Andhra Pradesh observed as
under:
“The normal principle is that in case of contracts relating to the
sale of immovable property, time is not treated as the essence
24of the contract unless the parties have intended it to be so.
Time can be made the essence of the contract either by an
express stipulation to that effect in the contract or it may also
be inferred from the facts and circumstances of the case. Even
if time was not originally made the essence of the contract, it
can be made so by a subsequent notice fixing a reasonable
time for performance. In the instant case there is no express
stipulation in the suit agreement making time the essence of
the contract. The mere fact that a date was fixed in the
agreement for performance does not by itself make the
stipulation as to the time the essence of the contract. (See
Govinda Prasad v. Haridutt)”
34. Further in Govind Prasad Chaturvedi v. Hari Dutt
Shastri And Another13, the Hon’ble Supreme Court observed as
under:
“It is settled law that the fixation of the period within which the contract
has to be performed does not make the stipulation as to time the essence
of the contract. When a contract relates to sale of immovable property it
will normally be presumed that the time is not the essence of the
contract.”
35. Thus, unilateral cancellation is not valid unless the
agreement explicitly permits it, and that the intent of the parties
and subsequent circumstances must be considered to evaluate
the said facts to arrive at a just and proper conclusion.
13 (1977) 2 SCC 539 = 1977 INSC 37
25
36. In the instant case, the conduct of the plaintiff subsequent
to Ex.B1 assumes significance, as the plaintiff despite receiving a
clear communication cancelling the agreement, vide reply
notice/Ex.B1, did not immediately challenge the same or take
steps to enforce the contract nor did the plaintiff issued any
rejoinder to show his readiness to perform his obligation of paying
balance sale consideration nor sufficiently explained the reason
for such delay in his pleadings or chief examination. Instead, he
remained silent for a considerable period i.e., more than 1 year 5
months (approximately) and such inaction for a prolonged period
materially affects the enforceability of the agreement and creates a
cloud on the readiness and willingness of the plaintiff to perform
his part of obligation, moreso, the suit is instituted when the
defendant filed a suit in OS.No.38/2001 on the file of the Prl.
Junior Civil Judge, Karimnagar, and obtained interim orders in
IA.No.1702 of 2001 vide Ex.A4.
37. The further contention of the learned Senior Counsel that
the defendant has denied the execution of Ex.A1 in the initial
written statement and subsequently filed amendment and
admitted the agreement of sale/Ex.A1, which shows the conduct
26
of the defendant to avoid execution of sale deed, does not assume
significance if read the initial reply vide Ex.B1.
38. In view of the above, while the cancellation under
Ex.B1/reply notice may not be strictly valid in law in the absence
of a contractual clause, the surrounding circumstances and
subsequent conduct of the parties cannot be ignored while
considering the ultimate relief, more particularly the conduct of
the plaintiff. Accordingly, this point is answered.
2. Whether time is the essence of the contract?
39. Insofar as this aspect is concerned, the learned trial Court
has relied upon the settled principles laid down in
T.Jagannadham (died) per LR’s case(supra), and Govind Prasad
Chaturvedi‘s case(supra), wherein it has been consistently held
that in contracts relating to immovable property, time is not
ordinarily treated as the essence of the contract unless the parties
have expressly intended it to be so.
40. A careful reading of Ex.A1 shows that though dates have
been mentioned for payment of consideration, there is no express
stipulation making time the essence of the contract. Further, there
27
is no material to show that prior to issuance of Ex.B1, the
defendant had put the plaintiff on notice, either orally or in
writing, making time the essence or indicating that failure to
adhere to the stipulated dates would result in cancellation.
41. The Hon’ble Supreme Court in Chand Rani‘s case( supra)
explained the general principle governing time as essence of
contract, and it reads as under:
“It is a well-accepted principle that in the case of sale of
immovable property, time is never regarded as the essence of
the contract. In fact, there is presumption against time being
the essence of the contract. This principle is not in any way
different from that obtainable in England. Under the law of
equity which governs the rights of the parties in the case of
specific performance of contract to sell real estate, law looks
not at the letter but at the substance of the agreement. It has
to be ascertained whether under the terms of the contract the
parties named a specific time within which completion was to
take place, really and in substance it was intended that it
should be completed within a reasonable time. An intention to
make time the essence of the contract must be expressed in
unequivocal language”.
42. In such circumstances, mere fixation of dates for payment
cannot be construed as making time the essence of the contract.
Therefore, this Court finds that the conclusion arrived at by the
learned trial Court on this aspect is in accordance with settled
legal principles and does not warrant interference. Accordingly,
this point is answered, in favour of the plaintiff.
28
3. Whether the plaintiff has established continuous
readiness and willingness as required under Section 16C
of the Specific Relief Act, 1963?
43. This issue, in the considered opinion of this Court, goes to
the root of the matter. Even if time is not the essence of the
contract and even if the agreement is otherwise valid, the plaintiff
must establish that he was continuously ready and willing to
perform his part of the contract from the date of agreement till the
date of decree.
44. In the present case, though the plaintiff issued legal notice
under Ex.B2 on 03.11.2000 expressing his willingness to get the
sale deed executed, the defendant issued reply notice under Ex.B1
on 08.11.2000 cancelling the agreement. Thereafter, the plaintiff
did not take any immediate steps to assert his rights and
remained silent for about one and half years, and filed the suit
only on 19.04.2002. Further, during this interregnum period, the
defendant had already got instituted O.S.No.389/2001 on the file
of the Prl. Junior Civil Judge, Karimnagar(Ex.A5), alleging
interference by the plaintiff with possession and after obtaining
interim orders in I.A.No.1702/01 vide order dt.18.12.2001(Ex.A4),
and after a lapse of around 1 year 5 months 9 days from the
29
issuance of legal notice vide Ex.B2, the plaintiff has instituted the
underlying suit before the trial Court. This circumstance also
assumes relevance while assessing the conduct of the parties.
45. The plaint does not show any satisfactory explanation for
this prolonged silence, that too, no rejoinder filed to the said reply
notice/Ex.B1, to show that the plaintiff was ready with the
balance sale consideration as on 04.10.2000 and no material is
placed on record to show that the plaintiff made any attempt to
tender the balance sale consideration or took any concrete steps
to complete the transaction during this period. Such inaction, in
the considered view of this Court, is inconsistent with the
requirement of continuous readiness and willingness.
46. Though reliance is placed on Ex.A7 to show financial
capacity, the same only indicates that the plaintiff had certain
fixed deposits, but it does not establish that he was ready and
willing in terms of actually performing the contract. It is settled
law in view of the judgment of the Hon’ble Supreme Court in
30
N.P.Thirugnanamv. Dr.R.Jagan MohanRao & Ors. 14,
wherein at para 5, it was held as under:
“…..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 along with 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.”
47. Thus, readiness must be continuous and demonstrable
through conduct, not merely inferred from partial performance or
financial ability. Thus, financial capacity alone is not sufficient,
but consistent course of conduct demonstrating the intention to
perform is also required.
14 (1995) 5 SCC 115
31
48. The contention that more than 50% of the contract has been
performed does not, in any way, assist the plaintiff. The earlier
sale deed executed in favor of the plaintiff with respect to Ac.2.20
guntas, standing in the name of the defendant’s wife, constituted
a distinct and completed transaction. In the agreement, it was
expressly stipulated and agreed between the parties that separate
sale deeds would be executed for two different portions of land,
each within a fixed time frame and the sale consideration has to
be paid, that too the land standing on the name of the defendant
to an extent of Ac.2-20 gts., was conveyed to the plaintiff’s wife
through Ex.A2, by the wife of the defendant was not a party to
Ex.A1, which shows the conduct of the defendant to be bonafide.
However, the earlier transaction and payment made in relation
thereto, paid to the wife of the defendant, cannot be considered as
part performance of the current obligation for the remaining
Ac.2.20 guntas, i.e., the suit schedule property, and it does not
support the plaintiff’s case.
49. Thus, the contention of the learned Senior Counsel for
plaintiff that the stand of the defendant that the suit was filed
after 1 year 5 months, after issuance of reply notice/Ex.B1, has
32
no significance as the suit is filed within the limitation, is hereby
negated for the findings arrived above.
50. Further the contention of the learned Senior Counsel for
plaintiff that initially the defendant denied the execution of Ex.A1
and subsequently sought amendment of the written statement
and accepted Ex.A1, and came with altogether a new plea that the
said Ex.A1 was cancelled vide Ex.B1/reply notice, shows the
conduct of the defendant as unclean, is untenable for the simple
reason that once the written statement is amended, the initial
written statement gets substituted and more so, the very same
stand is taken in the reply notice/Ex.B1 is only taken in the
amended written statement by obtaining orders from the
jurisdictional Civil Court, and it does not have any impact on the
stance of the defendant, and as such the conduct of the defendant
cannot be said to be unclean.
51. In view of the above circumstances, this Court is of the
opinion that the plaintiff has failed to establish continuous
readiness and willingness as required under Section 16C of the
Specific Relief Act, 1963.
33
4. Whether the plaintiff is entitled to the equitable relief of
specific performance under Section 20 of the Specific
Relief Act, 1963?
52. It is well settled that the relief of specific performance is
discretionary and equitable in nature. Even where a contract is
valid and enforceable, the Court is not bound to grant such relief
as a matter of course. The conduct of the parties and the
surrounding circumstances play an important role.
53. In C.S.Venkatesh vs A.S.C.Murthy (D) By Lrs 15, the
Hon’ble Supreme Court has observed as under:
“The words ‘ready and willing’ imply that the plaintiff was
prepared to carry out those parts of the contract to their
logical end so far as they depend upon his performance.
The continuous readiness and willingness on the part of the
plaintiff is a condition precedent to grant the relief of
performance. 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 contract, the court
must take into consideration the conduct of the plaintiff
prior, and subsequent to the filing of the suit along with
other attending circumstances. The amount which he has to
pay the defendant must be of necessity to be proved to be
available. Right from the date of the execution of the
contract till the date of decree, he must prove that he is
ready and willing to perform his part of the contract. The
court may infer from the facts and circumstances whether
the plaintiff was ready and was always ready to perform
his contract.”
54. Further, the Hon’ble Supreme Court in R.
Kandasamy(Since Dead)’s case(supra) referred to its own
15 AIR2020 Supreme Court 930
34
judgment in Prakash Chandra‘s case(supra), wherein a three-
Judge Bench has held that the ordinary rule is that specific
performance should be granted. It ought to be denied only when
equitable considerations point to its refusal and the
circumstances show that damages would constitute an adequate
relief.
55. Also, in Saradamani Kandappan v. S. Rajalakshmi14
the Hon’ble Supreme Court observed that :
“36. The principle that time is not of the essence of contracts
relating to immovable properties took shape in an era when
market values of immovable properties were stable and did not
undergo any marked change even over a few years (followed
mechanically, even when value ceased to be stable)…..This
principle made sense during the first half of the twentieth
century, when there was comparatively very little inflation, in
India. The third quarter of the twentieth century saw a very
slow but steady increase in prices. But a drastic change
occurred from the beginning of the last quarter of the twentieth
century. There has been a galloping inflation and prices of
immovable properties have increased steeply, by leaps and
bounds. Market values of properties are no longer stable or
steady. We can take judicial notice 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. It is no exaggeration to say that properties in cities,
worth a lakh or so in or about 1975 to 1980, may cost a crore or
more now.
37. 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 the purchaser does not take steps to
complete the sale within the agreed period, and the vendor has
35not 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 cover his delays, laches, breaches and
‘non-readiness’…………….”
56. Thus, the relief of specific performance may be denied if
plaintiff has not acted diligently, even where partial performance
exists.
57. Applying these settled principles to the present case, the
unexplained delay of about one and half years in filing the
underlying suit, after receipt of the reply notice, Ex.B1,
dt.08.11.2000, wherein Ex.A1 was purported to be cancelled as
the plaintiff has not paid the amount by the said date, for which,
the defendant had to cancel the purchase of other land at
Nangunoor in the very same survey No.462, and also the advance
sale consideration paid by the defendant was forfeited due to such
non-payment, that too, after a suit was filed by the
defendant(Ex.A5) and obtained an interim order vide Ex.A4 on
18.12.2001, in the absence of any concrete steps taken by the
plaintiff to perform his part of the contract coupled with the
overall conduct of the plaintiff, is clearly a deciding factor against
the grant of equitable relief.
36
58. Further, though an amount of Rs.30,000/- was paid as
advance, the same by itself is not sufficient to tilt the balance of
convenience in favour of the plaintiff, particularly when the
essential requirement of continuous readiness and willingness is
not satisfied.
59. Therefore, this Court is of the considered view that the
plaintiff is not entitled to the discretionary relief of specific
performance. Accordingly, the point is answered.
5) Whether the judgment and decree of the trial Court are
sustainable?
60. In the light of the above discussion, while this Court affirms
the finding of the learned trial Court that time is not the essence
of the contract, however, the findings to the extent of the plaintiff
being ready and willing to perform his part of the obligation under
the agreement of sale Ex.A1 is unsustainable and the learned trial
Court, in granting the decree for specific performance, has not
properly appreciated the effect of the delay and the conduct of the
plaintiff, as the crucial requirement under Section 16(c) of the
Specific Relief Act has not been satisfied.
37
61. Thus, this Court unequivocally holds that the agreement of
sale vide Ex.A1 was not diligently acted upon by the plaintiff and
that the plaintiff has not made out any grounds for the grant of
specific performance of the agreement of sale vide Ex.A1, and on
the other hand, the defendant has made sufficient grounds for
interference by this Court for setting aside the impugned
judgment and decree passed by the learned trial Court.
62. Further, the Hon’ble Supreme Court, in K.R. Suresh v. R.
Poornima16, has held that an alternative relief of refund of
advance sale consideration cannot be granted to a plaintiff in the
absence of a specific prayer to that effect in the suit. In view of the
said legal position, and considering that no such relief was sought
in the suit, the plaintiff is not entitled to the refund of the said
amount. Accordingly, the point is answered.
CONCLUSION:
63. In view of the above findings, the appeal suit is allowed
setting aside the judgment and decree passed in OS.No.28 of 2006
(Old OS.No.62/02 on the file of the Senior Civil Judge,
16 2025 INSC 617
38
Karimnagar) on the file of the III Additional District Judge,
Karimnagar, and the suit is accordingly, dismissed. No costs.
__________________________________
SUDDALA CHALAPATHI RAO, J
02nd April, 2026
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39
THE HON’BLE SRI JUSTICE SUDDALA CHALAPATHI RAO
APPEAL SUIT No.371 of 2008
Dt. .04.2026
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