S.H. Kapadia, J. - (1.) Being aggrieved by the suit for specific performance being decreed, the defendants-vendors have filed this appeal by special leave against judgment and order passed by the Division Bench of the Bombay High Court dated 17.6.2000 in Appeal No.813 of 1994 confirming the judgment of the learned Single Judge dated 3.10.1994.
(2.) The facts giving rise to this civil appeal, briefly, are as follows:- By an agreement for sale dated 18.2.1981 entered into between appellants as vendors and respondent as purchaser, the appellants agreed to sell all that piece or parcel of land admeasuring 481.25 square metres bearing plot no.423-C out of the larger piece of land bearing City Survey No.1285 (Part) of Suburban Scheme-III of Chembur with bungalow bearing Municipal No.1137 (2) standing thereon. (hereinafter for the sake of brevity referred to as "the suit property") for lump sum consideration of Rs. 10,00,000/-. Prior to the execution of the agreement, the respondent paid Rs. 1,00,000/- as earnest money. Under Clause (1) of the said agreement, a sum of Rs. 1,25,000/- was to be paid by the respondent within two months from the date of the agreement i.e. by 18.4.1981 and the balance of Rs. 7.75,000/- was payable by him on completion of the sale i.e. by 31.8.1981. Under Clause (8) of the agreement, the sale was to be completed on or before 31.8.1981. However, there was a proviso to Clause (8) under which an option was given to the appellants to extend the date of sale up to 31.12.1981.
(3.) On 31.3.1981, the respondent herein paid Rs. 50,000/- by cheque to the appellants. By letter dated 3.9.1981, addressed by the appellants, it was alleged that Rs. 1,25,000/- was payable by the respondent on or before 18.4.1981; that the full amount was not paid; that the respondent was, therefore, called upon to make the balance payment of Rs. 75,000/- within three days from the date of receipt of the said letter. However, by the said letter, time to complete the sale was extended by the appellants under Clause (8) up to 31.12.1981. In reply, the respondent stated that out of Rs. 1,25,000/-, a sum of Rs. 50,000/- had been paid on 31.3.1981, when it was agreed by and between the parties that the balance amount of Rs. 75,000/- would be paid by 30.9.1981. By letter dated 12.9.1981, the appellants denied having agreed to receive the balance amount of Rs. 75,000/-, payable on or before 18.4.1981, by 30.9.1981. At the same time, by the same letter dated 12.9.1981, the appellants agreed to accept the amount of Rs. 75,000/- on or before 30.9.1981 and purported to make time the essence for such payment. On 30.9.1981, the respondents advocate forwarded two cheques to the appellants i.e. cheque dated 29.9.1981 for Rs. 30,000/- and another cheque dated 15.10.1981 for Rs. 45,000/- (post-dated cheque). In the said letter, it was pointed out that the cheque for Rs. 45,000/- was post-dated as the respondent would be realizing the effects of certain cheques deposited by him in his account. By letter dated 3.10.1981, the appellants alleged that time to pay balance amount of Rs. 75,000/- by 30.9.1981 was made the essence of the contract; that since the respondent had failed to pay the said amount, the agreement for sale stood terminated. Consequently, the appellants forfeited the amounts paid by the respondent under the agreement. By letter dated 17.10.1981, respondent herein contended that time was not the essence of the agreement; that the agreement had been terminated with malafide intentions; that the respondent had complied with all his obligations and that he was ready and willing to perform his obligations under the said agreement.;