JUDGMENT
M.M. Qazi, J.
1. The appellant is a Co-operative Society and the respondents are the owners of survey No. 3/1-A. 5 acres 23 gunthas situated at Malkapur, district Akola. The respondents wanted to sell the said field and the appellant wanted to purchase the same for constructing houses; consequently the agreement came to be recorded on 7-3-1979. The agreement shows that the property was not under any encumbrances and that the respondents had absolute right to sell the same. Under the agreement the permission under section 89 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958 (for short ‘Act’) was required to be obtained by the appellant and the respondents were to co-operate in getting the said permission. The deed was to be executed in two parts on two occasions and the possession of the land was to be delivered on or before 10-6-1980. The sale consideration was fixed at the rate of Rs. 26,500/- per acre and an amount of Rs. 10,000/- was paid by the appellant as earnest money that the balance was to be paid at the time of the sale deed but there is no dispute that the appellant again paid Rs. 30,000/- on 1-6-1980. Thus they have already received Rs. 40,000/- so far. Though no specific date for the execution of the sale-deed is mentioned but the possession of the property was to be delivered on or before 10-6-1980. The agreement further recites that in case the sale-deed was not got executed within the time stipulated the earnest money would be forfeited and the transaction would stand cancelled. There is no dispute that the transaction could not be completed within the time stipulated and, therefore, the time further extended by one month vide Ex. 57 dated 10-6-1980. The document shows that since the Collector did not grant necessary permission for sale by 10-6-1980, both the parties agreed to extend the period by one month i.e. upto 10-7-1980.
2. The appellant applied to the Sub-Divisional Officer on 10-4-1980 under section 89 of the Act for the necessary permission. The said application came to be rejected vide order dated 28-12-1980 on the ground that the property was under attachment in Special Civil Suit No. 5 of 1980 which was filed by one Saraswtibai against the respondent No. 1 Ratanlal Chomwai on 25-1-1980. The respondent No. 2 Ratanlal Mishra remained absent and did not at all co-operate with the appellant in getting the requisite permission. The appellant again applied on 20th January, 1980 but this application came to be rejected on 8-4-1981 on the ground that no clearance was brought from the Civil Court. The appellant applied on 15-5-1981. This application was dismissed in default. The appellant applied for restoration of the same but the application for restoration was also dismissed on 2-7-1981. Another application was filed on 14-7-1981 and the Sub Divisional Officer was pleased to grant conditional permission vide order dated 10-8-1981. The material part of the order which is relevant for our purpose is reproduced below:—
“The applicant Sanstha is permitted to purchase the suit field Survey No. 3/1-A area 5.22 acres from the land owner Ratanlal Chomwal and Ratanlal Biharilal on the condition that the seller will pay Rs. 40,000/- to the plaintiff Saraswatibai w/o Ganpatlal Sharma of Akola as per compromise petition as ordered by the Civil Judge, Akola in Spl. C.S. No. 5/1980. The sellers will clear their encumbrances first and then sell the suit land to the applicant purchaser.”
The appellant filed an appeal on 6-10-1981 before the Collector challenging the order of the Sub Divisional Officer granting conditional permission. However, the Collector returned the same on 31-10-1981 on the ground that the appeal did not lie before it.
3. The appellant gave notice to the respondents on 1-7-1981 informing them that they have already received Rs. 40,000/- towards the sale consideration and that it has been ready and willing to perform its part of contract by paying the balance of consideration and that they should execute the sale-deed. The respondent No. 1 refused to execute the sale-deed on the ground that the appellant failed to get it executed within the time stipulated. The respondent No. 2 did not reply the notice at all. The appellant had no alternative but to file the suit for specific performance of contract of 23-10-1981. It contended that it was always ready and willing to perform its parts of contract and that the respondents were never ready and willing to perform their part of the contract. The appellant further alleged that the respondents did not co-operate in getting permission from the Sub Divisional Officer. Instead, they created every possible difficulty in the way of the appellant in getting the necessary permission. The appellant also alleged that the litigation between Saraswatibai and respondent No. 1 was collusive one. There seems to be no dispute that respondent No. 1 is a partner with Saraswatibai’s grand son and there seems to be also much substance in the contention of the appellant that respondent No. 1 deliberately did not furnish security as directed by the Civil Court, as a result of which the attachment of the suit property continued till 26-4-1983. Had the security been given earlier then there would have been no question of attachment of the suit property before judgment? Be that as it may, the fact remains that the property continued under attachment till 26-4-1983. The appellant asserted that even now it is ready and willing to perform its parts of contract and that the time was not the essence of contract.
4. The respondents contended the claim of the appellant essentially on the ground that time was the essence of contract and since the sale deed was not got executed within the time stipulated the contract came to an end; and that the appellant was not ready and willing to perform its part of contract. The appellant examined two witnesses on its behalf including Laxmichand Yawalkar, the President of the society, where as the respondents have examined themselves as their witnesses and closed their case. The trial Court dismissed the suit essentially on the ground that the time was the essence of contract; and the appellant was not ready and willing to perform its part of contract.
5. In our view the crucial question that falls for our consideration is, whether the time was the essence of contract; and whether the appellant was ready and willing to perform its part of contract. At the outset we may point out that though the trial Court has recorded a finding against the appellant on both the count but practically gave no reasons for the same. We are also constrained to observe that he has not even taken into consideration the various facts and circumstances which go to the very root of the case. Mr. Udhoji, contended and in our view rightly that the property involved in the litigation being immoveable one ordinarily the presumption would be that the time was not the essence of contract unless from the term of agreement and other surrounding facts and circumstances it can be safely found that the parties intended the time to be the essence of contract. Therefore, in our view, the most important factor would be the agreement of sale dated 7-3-1980. We have already shown above that the respondents represented in the said agreement that the property was not subject to any encumbrances whatsoever, and that they were fully competent to sell the same. There is overwhelming evidence to show that the property was not free from encumbrances and therefore the Sub Divisional Officer had to reject the application for the necessary permission under section 89 of the Act on earlier occasions and ultimately he granted conditional permission vide order dt. 10-8-1981. The Sub Divisional Officer, while granting permission gave directions to the respondent No. 1 to clear the encumbrances first and then sell the suit land. In our view, this is a clinching circumstance which supports the contention of the appellant that the time could not be the essence of the contract. There can be hardly any debate on the point that there could be any lawful sale-deed in the absence of the permission from the Sub Divisional Officer under section 89 of the Act. The parties already agreed in the agreement of sale that the appellant should obtain the necessary permission and that the respondents should give necessary help in this behalf. We have already shown above that the respondent No. 2 did not at all appear in the proceedings before the Sub Divisional Officer and respondent No. 1, though appeared, but did not co-operate at all; instead he did his best to see that the permission was not granted. The minimum that was expected of him was that he should have furnished security in the sum of Rs. 61.000/- as directed by the Civil Judge, Senior Division, Akola vide order dated 6-11-1980 in Spl. Civil Suit No. 5 of 1980 or in the alternative he should have paid the amount of Rs. 40,000/- to Saraswatibai as directed by the Civil Court, but the amount was paid as late on 25-4-1983 and hence the attachment continue till then. Having regard to these facts it is difficult to hold that the appellant has been guilty of any breach. On the contrary, there is overwhelming evidence to show that the respondent did not co-operate with the appellant. Consequently the necessary permission was not granted which was almost precedent for the execution of the sale-deed. Under these circumstances, it is difficult to hold that the time was the essence of contract. Nobody could be sure about the exact time that would be needed before the Sub Divisional Officer. The agreement also recites that a ‘valid sale deed was to be obtained’, which term in the facts and circumstances of this case, would obviously include obtaining of the necessary permission from the competent authority under section 89 of the Act.
6. The time for execution of sale-deed was once extended by one month because the permission from the Collector was not obtained. This circumstances leaves no doubt that both the parties knew that obtaining the permission of the Sub Divisional Officer was a condition precedent for execution of valid sale-deed. We have already shown above that the necessary permission was not granted because the respondent No. 1 created liability on the suit land. Inspite of this if we hold that the appellant was guilty of the breach, it would, in our view, amount to allowing the respondents to take advantage of their own lapses. It may also be mentioned here that respondent No. 1 has admitted that he was ready and willing to execute the sale-deed even on 30th July, 1980. The admission goes to show that the extended date “10-7-1980” was also not intended to be the last date for execution of the sale-deed. Thus the sequence of events and extension of the date from time to time goes counter to the claim of the respondents that the time was the essence of contract. It is not the case of the respondents that they gave notice to the appellant at any time intimating that it would not extend the date beyond particular time. On the contrary as we have shown earlier, in the peculiar facts and circumstances of this case the parties never intended to treat the time as the essence of contract.
7. It is interesting to see the evidence of respondent No. 1 Ratanlal Chomwal. He has admitted that Saraswatibai had raised an objection before the Sub Divisional Officer in the permission proceedings. His evidence which is relevant for our purpose is reproduced below:—
“In permission proceedings only Saraswatibai was the objector. It is also to say that S.D.O. rejected the permission only because there was objection of Saraswatibai. I did not attack the order of Ex. 50 in appeal. It is correct that in Saraswatibai’s proceedings compromise decree was passed between us and her claim for Rs. 61.000/- was decreed against me. Co-defendants were discharged in that suit and decree for Rs. 40,000/- rupees was passed against me alone because our compromise was to that effect. In that compromise I agreed to pay the decretal sum within three months time. I did not pay that sum to Saraswatibai. It is false to say that I did not pay the money to Saraswatibai deliberately and that because I did not want to raise the attachment of the suit property. I say that I did not pay it, because I had no money to pay it. I opposed the contentions of plaintiff Society in attachment proceedings started by Saraswatibai, in M.J.C. No. 219/81. I took the stand even in appeal that attachment could not be raised. It is correct to say that in execution proceedings started by Saraswatibai when Yawalkar was prepared to pay the decretal sum I took a stand that it should not be accepted to raise the attachment with the money of Yawalkar viz., plaintiff society. The copy of it is on record. It is correct that this Court did not allow the plaintiff to make the payment of decretal sum payable to Saraswatibai to raise the attachment.”
In our view, the above admission of respondent No. 1 leaves no doubt that he was interested in allowing the property to remain under attachment so that necessary permission under section 89 of the Act could not be granted. He has made further admissions in the following words:—
“Our agreement with plaintiff Society was to sell the property without any encumbrance on it. It is correct that today as I did not possess any money.”
At the fag end of the evidence he has made the following admission which is reproduced below:—
“Today I do not possess the clearance certificate for the suit property which is required to sell it. Though I made application for it in the past it was not pursued due to further developments.
Thus, in our view, there is much substance in the contention of Mr. Udhoji that the parties did not intend the time to be the essence of contract. The finding of the trial court on this account is contrary to the evidence on record.
8. According to the respondents the appellant was not ready and willing to perform his part of contract and, therefore, the suit for specific performance of contract was rightly dismissed. We have already shown above hat the appellant was continuously making efforts to get the necessary permission from the Sub-Divisional Officer. The applications were earlier rejected on the ground that the property was under attachment and ultimately though permission was granted vide order dated 10-8-1981, but it was only conditional and we have already shown above that the respondents had made it impossible for the appellant to get the necessary permission and the respondent No. 2 did not even care to appear before the Sub-Divisional Officer in the permission proceedings. The respondent No. 1, though appeared but contested the claim on frivolous grounds. The appellant served the respondents with notice dated 1-7-1981 calling upon them to execute the sale-deed. The notice shows that the appellant had already paid the amount of Rs. 40,000/-. It also shows that the appellant was ready and willing to perform its part of contract. The notice also refer to the liability of one Saraswatibai which was created by respondent No. 1. this notice was not replied to by the respondent No. 2 at all and respondent No. 1 did not comply with the same. The appellant made it absolutely clear in the notice that in the event of failure on the part of the respondents to execute the sale-deed, it would be constrained to file a suit for specific performance of contract. Thus, in our view, the appellant did everything that was possible in order to demonstrate that the was always ready and willing to perform its part of contract. The finding of the trial Court that the appellant was not ready and willing to perform its part of contract is devoid of substance.
9. Mr. Udhoji, learned Counsel for the appellant has invited our attention to the decisions Gomathinavagam Pillai v. Palaniswami Nadar and Govind Prasad Chaturvedi v. Hari Datt Shastri, in support of his contention that the fixation of there period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. It is not refer to since it has already been referred to in cited supra. The portion of para 5 which is material for our purpose is reproduced below:—
“It is settled law that the fixation of the period within which the contract had to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immoveable property it will normally be presumed that the time is not the essence of the contract. Vide Gomathinavagam Pillai v. Palaniswami Nadar, . It may also be mentioned that the language used in the agreement is not such as to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by the circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract.”
He has also invited our attention to the decision Prakash Chandra v. Angadial & others. The material portion from para 9 which is relevant for our purpose is reproduced below:-
“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.”
Mr. Udhoji has also relied on the decision reported in A.I.R. 1971, Mysore 217, Devendra Basappa Doddannayar v. Smt. Sonubai, in support of his contention “where the time was extended twice, the time could not be the essence of contract”. The material portion from para 6 of the judgment is reproduced below:-
“This by itself does not mean that if the plaintiff or the defendants failed to turn up at the fixed place and time, the contract would automatically come to an end. As submitted by the appellant’s Counsel that meeting on the 26th October, 1959 was only a step in the implementation of the agreement for sale. It was not a term of the contract. If it were a term of the contract, the complexion and the inference to be drawn from the conduct of the parties on 26th October, 1959, would be quite different. That the parties did not think of a meeting fixed for 26-10-1959 as a term of the contract is clear from the fact that subsequent to that date the defendants kept quite till 9-11-1959. It is said that the defendants extended the time for fulfilment of the contract till 9-11-1959.”
10. There is no doubt that all the aforesaid decisions relied on by Mr. Udhoji fully support his contention. We have already shown above that the crucial question in the present case is, whether the time was the essence of contract. It would normally be a question of fact which has to be decided on the basis of terms and conditions of the agreement and the surrounding facts and circumstances and the conduct of the parties. We have already discussed this aspect at length and we have no doubt that in view of the peculiar facts and circumstances of this case the parties never intended that time was the essence of contract.
11. Mr. K.H. Despande, learned Counsel for the respondents has tried to support the judgment of the trial Court on the ground that specific date was fixed in the agreement by which the transaction was to be completed failing which the transaction would stand cancelled. He has also argued that the appellant was not at all diligent in getting the permission from the Sub-Divisional Officer. He tried to demonstrate that there was lot of inaction on its part. We have given our anxious consideration to these submissions of Mr. Deshpande and we have already considered this aspect when we discussed the issue whether time was the essence of contract. We find it difficult to agree with the respondents. The appeal is allowed. The impugned judgment and decree is hereby quashed and set aside. Respondents are directed to execute the sale-deed in favour of the appellant-society in respect of the suit property on payment of the balance consideration within a period of 3 months from today. In case the respondents fail to execute the sale-deed the trial Court shall execute the sale-deed for and on behalf of the respondents and shall take necessary steps to deliver possession of the suit property to the appellant. No order as to costs.