Anandavally vs Kanda Kurju Natesan

P. Krishnamoorthy, J.—Both these revisions are by the decree-holder in O.S. No. 104 of 1988 in which a decree for specific performance of a contract for sale was passed. The decree was on 31-1-1990 and the defendant was directed to execute sale deed in respect of the suit property in favour of the plaintiff within one month from that date and that too after receiving the balance sale consideration. It was further, provided that if the defendant failed to execute the sale deed as ordered, the plaintiff will be at liberty to deposit the balance sale consideration in court and get the sale deed executed through court in execution of the decree. The cost was also awarded to the plaintiff. Plaintiff did not pay the balance sale consideration of Rs. 23,000/- as ordered in the decree. Thereafter, on 11-7-1990, the defendant, through his lawyer, sent Ext. A1 notice, intimating the plaintiff that he is ready to execute the sale deed on 1-8-1990 or on any other day convenient to her before 15-8-90 and further requested the plaintiff to be ready with the money for executing the sale deed. Though the plaintiff received this notice, she did not send any reply. On 4-10-1990, the defendant filed E.A. 506 of 1990 for a declaration that the plaintiff is not entitled to execute the decree due to the non-compliance by her to pay the balance sale consideration within the time stipulated in the decree as also in pursuance to Ext. Al notice issued by him. Thereafter, on 20-11-1990, the plaintiff filed I.A. No. 1387 of 1990 for amendment of the decree alleging that the costs shown in the decree is not correct and for incorporating the correct amount of costs due to her. That application was allowed on 24-1-1991. Thereafter on 5-8-1991 the plaintiff filed an execution petition for executing the decree and deposited the balance amount of Rs. 23,000/- on 9-8-1991. To the Execution Petition the judgment-debtor filed an objection contending that he was ready and willing to execute the sale deed after receiving the sale consideration as provided in the decree, but the decree -holder was not ready. He further alleged that he had even issued a lawyer''s notice to the decree-holder demanding her to inform a convenient date to execute the sale deed either on 1st August, 1990 or on any other date before 15-8-1990 and that he will be present before the Sub Registrar for executing the document. In that view of the matter, he contended that the plaintiff is not entitled to execute the decree. As mentioned earlier, the defendant had already filed E.A. No. 506 of 1990 for a declaration that the decree is not executable in the circumstances mentioned above.

The execution court considered the E.P. and came to the conclusion that the decree - holder was not ready and willing to get the sale deed executed by paying the balance sale consideration and further held that the judgment-debtor is entitled to get the contract rescined as provided for in Sec. 28 of the Specific Relief Act. Accordingly the E.P. was dismissed holding that the decree is not executable. Consequently the court allowed E.A. No. 506 of 1990 and held that the decree is not executable. Against these two orders the decree - holder has come up in revision.

The objection to the execution petition as also E.A. 506 of 1990 in effect was treated as an application by the defendant under Sec. 28 of the Specific Relief Act. Counsel for the revision petitioner contended that an application under Sec. 28 ought to have been filed on the trial side and not before the execution court; he also contended that; no circumstances are brought out satisfying the requirements of Sec. 28 for rescinding the contract as was done by the execution court and that there was no willful default on her part in not paying the balance sale consideration as, ordered in the decree. It was also contended by counsel that the decree did not provide any time - limit for payment of the balance sale consideration and as such Sec. 28 is not applicable at all.

I shall first consider the technical objection that the application should have been filed on the trial side and not on the execution side. It is an admitted fact that both the trial court and the execution court are the same. The decree was also passed by the Sub Court, Cherthala and the execution was also done there. If a party is entitled to file an application under Sec. 28, the mere fact that he filed it as an execution application will not affect the maintainability of the same if he is otherwise entitled to move the court. As the trial court and the execution court is the same. I am not inclined so accept this technical contention and reject the application filed by the defendant on that ground alone. The same view was taken by the Bombay High Court in Maruti Vishnu Kshirsagar Vs. Bapu Keshav Jadhav, .

Now coming to the main contentions, it is now well-settled by a series of decisions including that of the Supreme Court in H.I. Trust v. Haridas Mundhra (AIR 1972 SC 1826) that the Court which passes a decree for specific performance retains control over the decree even after the decree has been passed. It was further held that the Court which passes a decree for specific performance has the power to extend the time fixed in the decree for the reason that the Court retains control over the decree. It was also held that the contract between the parties is not extinguished by the passing of a decree for specific performance and that the contract subsists notwithstanding the passing of the decree. It was further held as follows :-

As the Court retained control over the matter despite the decree, it was open to the Court, when it was alleged that the party moved against has positively refused to complete the contract to entertain the application and order rescission of the decree if the allegation was proved. We, therefore, think that the application of the appellant was competent.

Though the Supreme Court laid down these principles do hors the Specific Relief Act, I am of the view that the same principles are applicable even if the Act is applied, for the wording of Sec. 28 of the Act is absolutely clear that even after the passing of a decree for specific performance, Court retains control over the subject matter and can pass appropriate orders either extending the time for payment or rescinding the contract, if circumstances exist.

It is well settled by a series of decisions of the Privy Council as also of the Supreme Court that a plaintiff who files a suit for performance of a contract has always to be ready and willing to perform his part of the contract. The performance of the contract by a purchaser including tender or deposit of full purchase money is part of his obligation before the seller is liable to execute a sale deed. This has been given legislative recognition in Sec. 16(c) of the Specific Relief Act which provides as follows:

Personal bars to relief Specific performance of a contract cannot be enforced in favour of a person,--

(a) xx xx xx

(b) xx xx xx

(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.

Explanation. --For the purposes of clause (c),--

(i) whether a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court:

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.

As far as this case is concerned, the Explanation to Sec. 16 (c) is very relevant. The Explanation provides that where a contract involves payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court. Though normally a plaintiff is not bound to tender to the defendant or deposit the purchase money in court, when there is an order of court, he is bound to do the same under Explanation to Sec. 16 (c). In other words, if after an order or a decree is passed by court, if the decree - holder fails to tender or deposit the money within the time fixed in the decree, it has to be presumed that he was not ready and willing to perform his part of the contract. The fact that a decree was passed does not absolve him from the liability to be always ready and willing to perform his part of the contract. Though counsel for the revision petitioner - decree holder relied on the decisions of the Privy Council and the Supreme Court in Ardeshir It. AIR 1928 208 (Privy Council) , Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, and Ramesh Chandra v. Chuni Lai (AIR 1971 SC 1238) to contend for the position that her readiness need continue only till the decree, on going through the said decisions, I do not think that such a proposition is laid down therein. All those cases were appeals against the decrees and in that context only their Lordships said that he must be ready and willing to perform his part of the contract till the trial is over. A decree-holder in a suit for specific performance cannot choose his own time for depositing the money. No doubt, in given cases the court has the power to extend the time and the purchaser is bound to deposit the purchase money as ordered by court. Though the purchase money is not deposited within the time, it is not as if the decree becomes in executable; on the application of the defendant if other circumstances exist, court can rescind the contract under Sec. 28 or if the decree-holder satisfies the court that there were sufficient reasons for not depositing the money in time, the court can grant extension of time.

Sec. 28 of the Specific Relief Act provides that if the purchaser does not, within the period allowed by the decree or such further period as the court may allow, pay the purchase money or other sum which the court has ordered him to pay, the vendor can apply in the suit to have the contract rescinded and the court is given power to rescind the contract subject to the other conditions mentioned in Section 28. The scope of this Section was considered by a Division Bench of this Court in Joseph George v. Chacko Thomas (1992 (1) KLT 6) in which it was held that for the application of Sec. 28 of the Act there must be a willful default on the part of the decree-holder to deposit the money as ordered in the decree.

So the next question to be considered is as to whether the lower court was justified in rescinding the contract by exercising its power under Sec. 28 of the Specific Relief Act. Counsel for the revision petitioner-decree-holder contended that on the wording of the decree, no time for payment of the purchase money is stipulated in the decree and as such the provisions of Sec. 28 cannot apply at all. I am not inclined to agree with this contention. On the wording of the decree which I have already stated in the first paragraph, it provides that the defendant shall execute a sale deed in respect of the suit property in favour of the plaintiff within one month and that too after receiving the balance sale consideration. It is well-known that the vendor is bound to execute the sale deed only on receipt of the sale consideration. In other words, payment of the sale consideration is a condition precedent for his executing a sale deed and that is what is provided for in the decree. On a reading of the decree I have no doubt in my mind that what the court intended was to fix a time-limit for the decree-holder to pay the balance purchase price as contemplated under Order 20 Rule 12A of the Code of Civil Procedure. Thus, the contention of counsel for the revision petitioner that no time is fixed in the decree cannot be accepted.

The further question to be decided is as to whether there was wilful default on the part of the decree-holder. As stated earlier, the decree was passed on 31-1-1990 which granted her one month''s time to pay the balance sale consideration and to get the sale deed executed. Admittedly, the amount was not paid within that time and so far the decree-holder has not filed any application for extension of the time fixed in the decree. She filed an application for amendment of the decree only on 20-11-1990, though she has an explanation that she got the copy of the decree only by then. Whatever that may be, that petition was allowed on 24-1-91. Even then she did not apply for extension of time nor did she deposit the purchase price as ordered in the decree. She actually deposited the money only on 9-8-1991. The E.P. itself was filed only on 5-8-91. It is also pertinent to note that the judgment debtor (defendant) had sent Ext. A1 lawyer notice on 11-7-1990 intimating the plaintiff decree-holder that he is ready and willing to execute the sale deed as ordered in the decree either on 1-8-1990 or any other day before 15-8-1990 recording to the convenience of the plaintiff alter receipt of the balance consideration. Though admittedly that notice was received by the plaintiff no reply was seat nor did she take any step to get the sale deed executed. She has not even taken a contention that the application for amendment of the decree precluded her from doing that, though such a contention was raised by counsel for the revision petitioner - plaintiff before me. As stated earlier, even that application was allowed on 24-1-1991 and in spite of that the decree - holder was not prepared to pay the money so that there is a consistent and wilful default on the part of the decree-holder to deposit the balance sale consideration as ordered by the court. In the objection to E.A. 506 of 1990 though she has raised a contention that she was ready and willing to pay the money as provided for in the decree or in pursuance to Ext. A1, there is no material before court to show that she was ready to pay the money during the relevant time. Though normally time is not the essence of a contract for sale of Immovable property, the decree provided for one month''s time for paying the sale amount; the defendant actually sent a notice on 11-7-90 evidenced by Ext. A1 initiating the plaintiff that he is ready and willing to execute the sale deed and in spite of all these, the plaintiff did not take any steps to get the sale deed executed after paying the balance sale consideration. In these circumstances, I have no hesitation to hold that the plaintiff was in wilful default in cot paying the balance sale consideration within the time allowed by the decree and getting She sale deed executed. It is also pertinent to note that till now no application has been filed by the decree - holder for extension of time fixed in the decree. In those circumstances, the order of the court below rescinding the contract is proper.

It is an admitted fact that under the agreement of sale, an advance amount of Rs.- 2000/- was paid to the defendant. When once the contract is rescinded, I think interests of justice require that the defendant refunds that amount of Rs. 2000/- to the plaintiff and the court is entitled to pass appropriate orders under Sec. 28 (2) of the Specific Relief Act while rescinding the contract,. In that view of the matter, I direct the defendant to pay the plaintiff, an amount of Rs. 2000/- received by him as part of the sale consideration, with interest at 12% from today. If the amount is not paid, the plaintiff will be entitled to execute this order and realise the money, -

In view of what is stated above, I confirm the orders of the lower court rescinding the contract and direct the defendant to pay the plaintiff an amount of Rs. 2000/- with 12% interest from today till date of payment. Plaintiff will be entitled to execute this order, in case the defendant fails to pay the amount. The C.R.Ps. are disposed of as above. No costs.