Court case(1993) 1 SCC 519

The parties agreed to the sale of a house in Delhi. The agreement required the purchaser to pay a substantial part of the price within a short fixed period so that the vendor could redeem a mortgage on the property and produce the papers, the balance being payable on registration within a further fixed period. The purchaser did not pay within the period fixed and later sued for specific performance, contending that in a sale of immovable property time is never of the essence.

A Constitution Bench of the Supreme Court held that in contracts for the sale of immovable property there is no presumption that time is of the essence; but the parties may make it so, and the intention is to be gathered from the express terms of the contract, the nature of the property and the surrounding circumstances, including the conduct of the parties. Here the terms, read with the purpose of the early payment (redemption of the mortgage), showed that the parties intended time to be of the essence. The purchaser having failed to pay within the time, her suit for specific performance was rightly dismissed.