Question Of Paying Balance Sale Consideration Does Not Arise When The Vendor Did Not Get The Subject Land Measured Within Prescribed Time: SC

The Supreme Court has observed that unless the vendor gets the subject land measured and demarcated within stipulated time period, it would be impossible for the purchaser to get a sale deed executed, and as such, the question of paying the balance sale consideration does not arise.

The Court also added that when specific performance of the terms of the contract has not been done the question of time being the essence does not arise.

The bench of Justice Krishna Murari and Justice Sanjay Karol was dealing with a case wherein the High Court had set aside the Trial Court’s Order and directed the vendor to execute sale deed in favour of purchaser after receiving balance sale consideration.

The High Court had held that the vendor (Appellants herein) failed to perform their obligation with regard to getting the property measured and demarcated, while the purchaser (Respondent No. 1 herein) was always ready and willing to perform her part of contract by paying the balance sale consideration.

Senior Counsel A. Sirajuddin appearing on behalf of the appellants contended that the High Court erred in allowing the appeal filed by Respondent No. 1 herein (Plaintiff) and decreeing the suit for specific performance. Per contra, C. Mohan Rao, Senior Counsel appearing on behalf of the Respondents argued that the appeal is liable to dismissed with costs in view of the detailed judgment of the High Court, passed after minutely examining the evidence on record.

The Supreme Court held that “…the High Court has rightly held that the deceased G. Venugopala Rao or his legal heirs (Defendants in the suit, including the Appellants herein) failed to perform their obligation with regard to the demarcation of the property, while the Plaintiff had established that she was always ready and willing to perform her part of contract by paying the balance sale consideration which is the primary requirement as per Section 16 (c) of the Act”

The Court noted that it was clearly mentioned in the sale agreement that within three months the suit property will be measured and demarcated which was not ultimately measured or demarcated and that the Plaintiff (Respondent No. 1 herein) shall pay the balance sale consideration.

The Court further noted that the Plaintiff (Respondent No. 1 herein) paid the advance sale consideration of Rs. 4,00,000 and that when the land wasn’t measured and demarcated by the vendor, the question of the Plaintiff (Respondent No. 1 herein) paying the balance sale consideration does not arise.

The Court also held that the appellants cannot claim that time was of the essence of the contract.

To that end, the Court observed, “…it is clear that the vendor (deceased G. Venugopala Rao) failed to perform his part of the obligations by getting the subject land measured and demarcated, while the purchaser (Respondent No. 1 herein/Plaintiff) was ever ready and willing to pay the balance consideration. As such, when specific performance of the terms of the contract has not been done, the question of time being the essence does not arise.”

Accordingly, the Court upheld the findings of the High Court and appeals were dismissed.

Cause Title- Gaddipati Divija & Anr. v. Pathuri Samrajyam & Ors.

Click here to read/download Judgment