MUHAMMAD ASHRAF ANJUM vs SABIR HUSSAIN Ss — 2026 SCMR 36 SUPREME-COURT

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MUHAMMAD ASHRAF ANJUM VS SABIR HUSSAIN Ss. 12 & 22---Contract Act (IX of 1872), S. 55---Suit for specific performance of agreement to sell---Failure to establish payment of earnest money by the vendee---Non-performance of contractual obligation by the vendee within stipulated time was fatal for his case of specific performance---Time being essence of contract---Principle and applicability---Explicit mention of consequences for non-performance of contractual terms in the agreement would infer that time would be of essence of the contract---Facts in brevity were that the appellant (vendee), a tenant of the suit shop, filed a suit for specific performance of an agreement to sell dated 17.02.2009, under which the respondents (vendors) had agreed to sell the shop for Rs. 800,000, with full payment to be made by 31.10.2010, failing which possession was to revert to the vendors---Appellant (vendee) alleged having paid Rs.200,000 in installments, but the vendors stated to have avoided execution of the sale deed---The Trial Court decreed the suit subject to deposit of Rs. 800,000, and the appellate court upheld the decree, however, in revision, the High Court set aside both judgments by dismissing the suit---Primary question for determination before the Supreme Court was as to "Whether a vendee, who failed to perform contractual obligations within the stipulated period where time was expressly made the essence of the contract, was entitled to a decree for specific performance?"---Comparison of the pleadings and the testimony of the appellant/vendee revealed that the amount in question was not paid to the vendors as earnest money---Even the agreement to sell was completely silent about any such payment---During cross-examination, it was admitted by the vendee that no earnest money was paid to the vendors, which clearly demonstrated that he had misstated in the plaint about the factum of payment of earnest money---High Court, therefore, correctly observed that the vendee had not come to the Court with clean hands and thus was not entitled to discretionary relief---In the present case, prior to the execution of the agreement, its terms were admittedly discussed and read over to both parties---The vendee willingly undertook the burden of obtaining clearance within the time stipulated in the agreement---It was clear from the terms of the agreement that time was the essence of the contract, and this was understood by both parties, particularly, in view of the fact that the consequences of non-performance of the contractual terms by the vendee were also explicitly set out in the said agreement---Thus, such default on the part of the vendee was fatal to his suit---Present case related to a contract in commercial transaction and the Court could take judicial notice of the fact that the price of real estate was constantly escalating---The clear intention of the parties, as it appeared from the stipulation of the agreement, was to treat time as essence of the contract---Exercise of jurisdiction, under these circumstances in favour of the vendee when character of the property or other circumstances would render such exercise likely to result in injustice, would be against the settled norms of justice---Both the Courts below failed to consider the above legal and factual aspects of the case, thus arrived at a wrong conclusion, decreeing the suit of the appellant, but the High Court rightly took notice of the same while setting aside the judgments and decrees of the Courts below---Appeal lacking any merit was dismissed, in circumstances. S.55---Specific Relief Act (I of 1877), S.12---Time being essence of the contract---Principle---Applicability---Determinative factor---Intention of the contracting parties---Where there is a clear intention of the parties, as appears from the stipulation of the agreement, to treat time as essence of the contract then the Court cannot attribute a different intention to the parties and cannot specifically enforce the contract at the instance of the vendee, who has failed to perform his part of the obligation within the stipulated time---In cases relating to specific performance, equity, which governs the rights of the parties, does not rigidly adhere to the express terms of the contract---Instead, the Court examines the substance of the agreement to ascertain whether the parties intended that performance be completed within a specific time period and whether the parties in substance intended that the completion should take place within a reasonable time.

MUHAMMAD ASHRAF ANJUM vs SABIR HUSSAIN Ss — 2026 SCMR 36 SUPREME-COURT

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