This article has been written by Sunidhi Sharma pursuing Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution and has been edited by Oishika Bnaerji (Team Lawsikho).
This article has been published by Sneha Mahawar.
Table of Contents
Introduction
In this article, we are going to discuss the case of Deshraj Singh vs Rohtash Singh (2022). The case involves an appeal against a judgment of the Punjab and Haryana High Court dated 15.05.2019, which was heard by the Supreme Court of India. This case revolves around a property situated in the revenue estate of a village named Tigra, Tehsil and District Gurgaon and the same was jointly owned by Appellants as a part of their respective shares.
Facts of the case
There was a property of 23 Kanals 4 Marlas, Khewat No.226, Khatoni No 225, Rect no 27 kila number 3 min (29), 4 min (415), 7(80), 14(40). This property was located in the revenue estate of Village Tigra, Tehsil and District Gurgaon. This property was owned by the appellants jointly according to their share in the property.
On 17.02.2004, the parties entered into a separate agreement to sell this property. One of the appellants’, was a female, and wanted to sell her property as well. This share was owned by herself along with her minor son and therefore, she was bound to take permission under Hindu Minority and Guardianship Act, 1956 (HMGA 1956) to sell the share of the minor. Consideration for the concerned property is decided at the rate of Rs 79,00,000 per acre between the parties. Respondent paid the part payment of the amount (earnest money) which is Rs 22,90,000. Both parties decided to execute the sale deed on 16.08.2004.
The respondent, who is the original plaintiff in the case, had filed a suit in January 2006 because he sought relief of specific performance of sale agreements entered by the appellants.
Contentions of the appellants
- Firstly, time was the essence of the contract for the sale agreements under Section 55 of the Indian Contract Act, 1872.
- Secondly, contractual obligations need to be fulfilled as per the sale agreements and this was completely mentioned in the notices served.
- Thirdly, for a certain period of time it is not necessary to get NOC according to Section 7A of the HUDA Act and the land was agricultural land at the time of execution
Contentions of the respondent
- Firstly, the appellants were unwilling and that’s why they failed to perform their contractual obligations. Respondent’s obligations were restricted to those which were sanctioned and he could obtain them unilaterally.
- Secondly, she argued that the sale agreements were acquired by the state of Haryana and that is why they were rendered impossible.
- Thirdly, the appellants have obtained land possession measuring eight Marla from land acquired.
Legal issues involved
- Whether time was the essence of the contract?
- Whether it was proved that appellants were willfully avoiding the performance of their contractual obligations?
- Whether the respondent was entitled to recover the earnest money?
Judgment
The Supreme Court of India while deciding the present case in hand had observed that the forfeiture was justified and the respondent neither prayed for earnest money nor contested the nature of forfeiture. While holding that the suit is liable to be dismissed, the Apex Court had set aside the decision of the lower courts.
Analysis of the judgment
Before beginning the analysis, it is ideal to note that time is a critical component of every contract and the same holds immense importance in giving effect to the same. In this case, it was clearly mentioned that time was the essence of the contract and even in the notice that was delivered, the intention of appellants abided by such an essence.
In the case of Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates Private Ltd (2011) and Saradamani Kandappan v. S. Rajalakshmi (2011), time being the essence of the contract, was considered to be a valid defence for the purpose of specific performance. Hence by analysing every aspect we can say that time being the essence is the clear intention of parties to contract and the respondent delayed the time decided and specific performance relief cannot be granted.
Secondly, the court rejected the interpretation of this clause that his obligation was limited to NOCs that he could obtain independently and there is no evidence given by the respondent which can say that he has taken all necessary steps to obtain the required NOC for execution of sale deed.
Respondent’s stand that the property in concern was an ‘urban’ area according to Section 2(o), also includes lands within five kilometres of the municipal area. This stand also gets rejected because he did not plead to courts and there is no evidence that can say that property was within five kilometres radius of the municipal area. It was observed by analysing various facts that respondents have not even pleaded for relief of earnest money and courts cannot suo moto grant any refund of earnest money.
Conclusion
As we reach the conclusion of the present case analysis, it is ideal to note that the judgment comes with an affirmation of two significant observations which are by itself declared laws as well:
- Time is the essence of every contract.
- The court cannot suo moto grant any relief unless the same has been specifically prayed for in the suit.
Thus, the relevance of this particular case lies in these two firm and unambiguous observations.
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