MUHAMMAD ASHRAF ANJUM vs SABIR HUSSAIN — 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 vendee---Non-performance of contractual obligation within stipulated time---Time being essence of contract. A suit for specific performance of an agreement to sell was instituted by the appellant/vendee, who was a tenant of the suit shop, against the respondents/vendors. The agreement to sell dated 17.02.2009 provided that the respondents agreed to sell the shop for consideration of Rs.800,000 and the entire payment was to be made by 31.10.2010, failing which possession was to revert back to the vendors. The appellant/vendee alleged that he had paid Rs.200,000 in installments and claimed that the vendors avoided execution of sale deed. The Trial Court decreed the suit subject to deposit of Rs.800,000 and the appellate Court upheld the decree. The High Court, in revision, set aside the judgments and decrees of the Courts below and dismissed the suit. The primary question before the Supreme Court was 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. Held: In cases of specific performance, the conduct of the parties and terms of the agreement are required to be examined and equitable relief cannot be granted to a party who has failed to perform his own contractual obligations. The comparison of pleadings and evidence of the appellant/vendee revealed that the alleged amount of earnest money was not paid to the vendors. The agreement to sell was completely silent regarding payment of earnest money. During cross-examination, the appellant admitted that no earnest money had been paid to the vendors, which established that the appellant had misstated material facts in his plaint. The High Court rightly observed that the appellant had not approached the Court with clean hands and was not entitled to discretionary relief. The terms of the agreement were discussed and read over between the parties before execution and the appellant willingly undertook the obligation of obtaining clearance and completing his part of transaction within the stipulated period. The agreement clearly provided consequences for failure to perform contractual obligations, therefore, the intention of the parties was evident that time was to be treated as essence of the contract. The Supreme Court observed that the present case related to a commercial transaction and judicial notice could be taken of continuous escalation in prices of real estate. Granting specific performance in favour of a vendee who failed to perform contractual obligations within time would result in injustice where the agreement itself reflected intention of parties to treat time as essence of contract. The Courts below failed to consider the legal and factual aspects of the matter, whereas the High Court correctly appreciated the effect of contractual stipulations. The appeal was dismissed in circumstances.

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

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