B. Puttaswamy vs Joseph D''Cruez, Smt. B. Rajeshwari and Smt. Bebi Kamala Jammanni

H.V.G. Ramesh, J.—This appeal is by the plaintiff being aggrieved by the order of the II Addl. Civil Judge, Mysore in OS 256/1983. The plaintiff had filed a suit for specific performance against the defendants.

According to the plaintiffs, defendants are the absolute owners of the suit schedule house and 1st defendant entered into an agreement with the plaintiff for the sale of the said house in favour of the plaintiff for a consideration of Rs. 1,20,000/- and in furtherance of the said agreement, he wrote a letter to the plaintiff and also received a sum of Rs. 15,000/- as advance consideration. Subsequently on 24.5.1983 the defendant wrote a letter expressing his desire and decision for selling the said property in favour of the plaintiff for the agreed sale consideration. In reply, the defendant asked the plaintiff to collect the advance and also to execute a sale deed in respect of the suit house property. According to the plaintiff in unambiguous terms, the 1st defendant although intended to sell the property in favour of the plaintiff and in spite of the plaintiffs readiness and willingness to purchase the property by paying the balance consideration, the 1st defendant wrote a letter to the plaintiff that in stead of Rs. 1,20,000/- being the sale consideration agreed upon previously, he had unilaterally raised the consideration to Rs. 1,60,000/- and had also collected an amount of Rs. 50,000/- as advance from a third party. Thus, by returning the amount of Rs. 15,000/- received from the plaintiff, the defendant tried to repudiate the contract impliedly. According to the plaintiff, in part performance of the agreement, the 1st defendant had also parted with possession of the property in favour of the plaintiff. It is also the plaintiff''s contention that the 1st defendant in collusion with the other defendants, has committed breach of contract The plaintiff has pleaded that he was ready and willing to perform his part of the contract by paying the remaining sale consideration and he persuaded the 1st defendant to execute the sale deed Rather, the defendant has sent back the sum of Rs. 15,000/- to the plaintiff on 26.6.1983 through a demand draft. However, according to the plaintiff, he is said to have returned the said demand draft to the 1st defendant under a registered post and that the 1st defendant did not receive the same. Stating that the conduct of the 1st defendant amounts to breach of contract which he had solemnly entered into and further having noticed the 1st defendant making hectic attempts to sell the property in favour of a third party for a higher amount, he has filed the suit It is further alleged that subsequent to the filing of the suit, the 3rd and 4th defendants filed suits against the 1st defendant in OS 339/1983 and 338/1983 before the Civil Judge, Mysore for recovery of money advanced by them to the 1st defendant and these two suits have been filed on 20.10.1983.

The defendants contested the suit According to the 1st defendant, while admitting the plea that he is the owner of the suit property, it is stated that the plaintiff has concealed the true facts and the suit has been filed with an ulterior motive and in several correspondences between the plaintiff and the 1st defendant, this defendant has not agreed to sell the property though the plaintiff had written to him to purchase the suit property for Rs. 1,20,000/- and he had also stated that he is even ready to purchase the property for Rs. 1,30,000/-. However, the 1st defendant has denied the letter written to the plaintiff and according to him, the said letter was written by one Elizabeth of which the 1st defendant is not aware of. Further, he has also denied that he has agreed to sell the property to the plaintiff for a sum of Rs. 1,20,000/-. According to the 1st defendant, the plaintiff had written a letter on 28.5.1983 to him that he made enquiry with the Sub-Registrar at Mysore for ascertaining the value of the property in order to get it registered and came to know that it might be about Rs. 1,80,000/- for the purpose of registration. According to the defendant, he did not contact the plaintiff nor ask one Dr Shantakumar to deliver the key of the property to the plaintiff. In fact, the defendant did not write any letter nor contacted the plaintiff in this regard. Further, according to this defendant, he has agreed to sell the property for Rs. 1,60,000/- and has taken Rs. 15,000/- as advance and he has alleged that the sale agreement was cancelled between the plaintiff and the defendant and the above transaction has taken place with one R T Narasimha Murthy who is the general power of attorney holder of this defendant and plaintiff was aware of the power of attorney executed by this defendant and that the alleged sale agreement in favour of the plaintiff by the defendant is void and unenforceable. It is also stated that this defendant has sent back Rs. 15,000/- to the plaintiff through a demand draft and while denying the rest of the allegations, he has sought for dismissal of the suit. Additional written statement is also filed by the 1st defendant.

Defendants 3 & 4 have also contested the suit by filing written statement denying the allegations made in the plaint. According to these defendants, the suit filed by the plaintiff is not maintainable. The plaintiff asserts his claim only through the 1st defendant and when the property has been sold in court auction, the plaintiff has sought for cancellation of the sale and these defendants have purchased the property in the court auction in Ex.No. 200/1983 and 202/1983 and have also paid the sale consideration. It is also their contention that the plaintiff is an intruder and in unauthorised occupation of the eastern portion of the house. Stating that 3rd and 4th defendants are in exclusive possession of their respective properties and stating that they are the bonafide purchasers of the suit house in the auction sale held by the court, it is contended that the plaintiff has no right and is estopped from violating or otherwise the auction sale held by the Court It is further stated that the proceedings are collusive and accordingly, resisted the suit Based on the pleadings, the trial court has framed as many as seven issues and four additional issues. On behalf of the plaintiff, two witnesses have been examined and as many as eighty eight documents were got marked. On behalf of the defendants, three witnesses were examined and seven documents were got marked. The trial court having heard the arguments, has answered the issue ''whether the plaintiff proves that there is a privity of contract of sale between himself and 1st defendant'' in the negative; and on the issue whether the plaintiff proves that he has taken possession of the suit schedule property as a part performance of the contract, it has held that plaintiff has taken possession of a portion in furtherance of the sale negotiations; as regards the issue whether the plaintiff proves that at the request of the 1st defendant he paid a sum of Rs. 15,000/- to one Mr. M N Swamy as advance, the trial court has held in the affirmative and, as to the issue whether the 1st defendant proves that there is no privity of contract of sale with the plaintiff and plaintiff is a trespasser who is in wrongful possession of the suit schedule property, the trial court has answered in the affirmative. However, it has held that it cannot be said that the plaintiff took possession of a portion of the plaint schedule property forcibly and that his possession now has become wrongful. Ultimately, it has dismissed the suit of the plaintiff. Being aggrieved by the same, this appeal is filed by the plaintiff on various grounds.

Heard the Counsel for the appellant and the Counsel representing the respondents.

It is the argument of the learned Counsel for the appellant/plaintiff that as per the correspondence between the plaintiff and defendant No. 1 plaintiff agreed to purchase the suit schedule property for a sum of Rs. 1,20,000/- and also advanced Rs. 15,000/- which was accepted by defendant No. 1 and for having received Rs. 15,000/-, the plaintiff had been given possession of the portion of the suit property which amounts part performance of the contract as per Section 53A of the Transfer of Property Act Further submitted that having regard to the conduct and correspondence between the parties it is to be treated as concluded contract since plaintiff was always ready and willing to perform his part of the contract and is ready to pay the amount in excess if it is demanded. Accordingly, sought for to decree the suit.

The learned Counsel for the appellant has relied upon the following citations: Pirthi alias Sansi etc. Vs. Jati Ram and others etc., and M.L. Devender Singh and Others Vs. Syed Khaja, to stand by his contention.

Per-contra, the learned Counsel appearing for the respondents/defendants submitted that the letter written by the plaintiff and replied by defendant No. 1 clearly depicts that a condition was imposed by the plaintiff on ascertaining from the office of the sub-registrar that the value of the suit property is Rs. 1,80,000/-, to concede before the sub-registrar that defendant No. 1 had received an advance of Rs. 60,000/- which was not agreeable to the defendant No. 1 and ultimately plaintiff himself expressing that there is no reply from defendant No. 1 has asked him to return back the earnest amount of Rs. 15,000/- paid by him, accordingly, defendant No. 1 returned the amount through demand draft and the same has been refused by the plaintiff and it is not the concern of defendant No. 1 and as such, there was no concluded agreement/contract between the parties to order for specific performance. Apart from that he has also contended that as per Section 20 of the Specific Relief Act the Court has to look into justice, equity in good conscience while decreeing the suit for specific performance and any such order should not lead to unfair advantage of the other party. The trial Court has taken into consideration that when there is no concluded contract the question of enforcement does not arise and much less there is no specific agreement entered into between the parties. In support of his argument he relied upon some of the rulings.

The suit of the plaintiff was dismissed by the trial Court holding that there is no concluded contract. However, this Court, in appeal, had decreed the suit of the plaintiff on 15.3.1999 against which, defendants have approached the Supreme Court. By an order dated 16.10.2006, while setting aside the order of this Court, the Apex Court remanded the matter back to this Court on the ground that no points for determination were formulated and has directed this Court to formulate the points and to dispose of the appeal in accordance with law. Hence, this appeal is taken up once again for determination on the following points:

i) Whether there is any equity of agreement/contract between the parties so as to enforce the contract?

ii) Whether as per Section 20 of the Specific Relief Act, the plaintiff would be entitled for decree of specific performance while exercising discretion in his favour?

It appears, during the month of May 1983 the defendant No. 1 offered the suit schedule property to the plaintiff for a sale consideration of Rs. 1,20,000/- and in this regard, an advance of Rs. 15,000/- had been paid by the plaintiff. However, except the paper correspondence, no such agreement was entered into between the parties on the stamp paper. Ex.P1 and P2 are the letters written by defendant No. 1 intending to sell the suit property to the plaintiff for a sum of Rs. 1,20,000/- on some terms and conditions and Ex.P3 is the receipt issued by one Dr. M. Narayana Swamy for having received Rs. 15,000/- from the plaintiff on behalf of defendant No. 1. As per Ex.P1 it was for the plaintiff to bear the registration charges, stamp duty and also any other expenses at the time of registration. It was also agreed to hand over the key of one of the vacant house to the plaintiff. Plaintiff had also communicated to defendant No. 1 through several letters. Ex.D1 is the letter written by the plaintiff to Dr. M. Narayana Swamy regarding the terms and conditions imposed at Ex.P1. Ex.D2 is the letter written to defendant No. 1 regarding the registration of the property. Further, Ex.P4 is a letter written by defendant No. 1 to the plaintiff regarding the correspondence made by the estate agent stating that he is ready to get the property sold for Rs. 1,60,000/- and that defendant No. 1 has stated that he is willing to sell the property to the plaintiff even forgoing Rs. 40,000/- and the interference of third party is not necessary. Ex.D4 is the letter written by the plaintiff to the defendant wherein he has expressed that he is ready to purchase the property for Rs. 1,20,000/- as proposed, but since the sub-registrar has valued the property at Rs. 1,80,000/- as per the Government value and built up area, it cannot be registered less than Rs. 1,80,000/-, as such, he requested defendant No. 1 to give his consent before the sub-registrar that he has received the amount of Rs. 60,000/- as advance and apart from that he also insisted defendant No. 1 to obtain the income tax clearance certificate, encumbrance certificate and permission from Deputy Commissioner although earlier defendant No. 1 had clearly stated that plaintiff has to bear the registration expenses etc.,. On realising that property values more than Rs. 1,80,000/- for which the registration expenses has to be borne by the plaintiff, a condition was imposed on defendant No. 1 that he has to express his consent before the sub-registrar that he received Rs. 60,000/- as an advance so as to make him liable for the payment of income tax and also to obtain income tax clearance etc., However, the terms and conditions expressed by the plaintiff were shown to be not agreeable to defendant No. 1. Further the plaintiff has written one more letter as. per Ex.D3 stating that there is no further correspondence by defendant No. 1 although he waited for several days, and if the condition imposed by him is not aggreable, the amount of Rs. 15,000/- be returned to him. In pursuance of the said letter defendant No. 1 also sent demand draft for Rs. 15,000/- in favour of the plaintiff as per Ex.P7 and P8, however, the same has not been accepted on the ground that plaintiff is ready and willing to perform his part of contract. As the base stands there was a tripartite transaction and in order to sell the property the defendant No. 1 shown to have made all efforts and when the plaintiff has expressed his willingness to purchase the property as a man of prudence he has acted in a diligence to execute the sale deed and after having received Rs. 15,000/- as an advance, he also directed one Dr. Shantha Kumar to hand over the key of the outhouse to the plaintiff even before concluding the terms of the agreement., but since the condition imposed by plaintiff was unconscionable, defendant No. 1 has not agreed for the same. It appears, defendant No. 1 had also executed a power of attorney in favour of one R.T. Narayana Murthy and in furtherance of the same R.T. Narayana murthy had entrusted the same to a real estate agent to dispose of the property who in turn received an amount of Rs. 25,000/- from each of the defendants 3 and 4. Even though, the said real estate agent had offered Rs. 1,60,000/-for the said property defendant No. 1 had written letter to the plaintiff wherein the plaintiff sought for unreasonable leniency from defendant No. 1 for which defendant No. 1 has not expressed his consent. Hence, there is no concluded contract As per the material evidence on record and also as contended by the appellant''s Counsel the defendants 3 and 4 instead of filing suit for specific performance they have filed a suit for recovery of money which came to be decreed and that the power of attorney holder of defendant No. 1 had consented for decreeing the suit without contest In the factual circumstances and background even assuming that such a decree has been passed as a matter of conclusive decree and in furtherance of the same the property in question has been sold in Court auction to defendants 3 and 4, the fact remains that there was no concluded agreement between the plaintiff and defendant No. 1 to order for specific performance. On communication of the proposal and on coming to the knowledge of the said proposal the defendant No. 1 rather revoked the condition/communication to agree before the sub-registrar that he has received a sum of Rs. 60,000/- as an advance and more so it is in the form of unconscionable bargain on the plaintiff to impose such a condition as there was a burden on defendant No. 1 on such acceptance to shell down some more amount to obtain income tax clearance certificate etc., As per the terms of the contract revocation could be made by communication of notice by the proposer/other party or by lapse of time prescribed in such a proposal for its acceptance or if no time is so prescribed, by lapse of reasonable time without communication of the acceptance and, by the failure of the acceptor to fulfil the condition precedent to acceptance. Unless an acceptance is absolute the question of concluded agreement does not arise and such an acceptance must be absolute and should be expressed in usual and reasonable manner. In view of the above discussion and also having gone through several documents and material evidence produced it is clear that there is no concluded agreement between the parties. Accordingly, point No. 1 is answered.

In so far as the second substantial question of law is concerned, to order for a decree of specific performance, Section 20 of the Specific Relief Act of 1963 imposes several conditions wherein one of the condition is that it is the discretion of the Court to order for specific performance subject to justice, equity and good conscience. Further there is an obligation on the Court not to decree the suit for specific performance by exercising its discretion when it gives an unfair advantage over the defendant and also performance of the contract would involve some hardship on the defendant which he did not foresee.

In the decision reported in Damacherla Anjaneyulu and Another Vs. Damcherla Venkata Seshaiah and Another, the Apex Court while invoking Section 20 of the Specific Relief Act of 1963 has held that that Godown and other costly structures have been built on disputed land by the vendor, as such, grant of decree of specific performance would result in special hardship to the vendor, accordingly, in the alternative, it was ordered to pay the present value of the land instead of executing sale deed.

In the decision reported in Ganesh Shet Vs. Dr. C.S.G.K. Setty and Others, the Apex Court specifically with respect to the factual position has held that in a suit for specific performance of contract, when the contract was found to be not a concluded contract, relief cannot be given on the basis of subsequent agreement when it is not proved to be fresh or independent contract.

In the decision reported in Gobind Ram Vs. Gian Chand, the Apex Court has held that the Court is guided by principal of justice, equity and good conscience in ordering for specific performance.

In the decision reported in M/s. Rickmers Verwaltung GMB H Vs. The Indian Oil Corporation Ltd., the Apex Court has held that, when there is no concluded and binding contract between the parties, agreement executed between the parties could not become enforceable as terms of letter of credit and performance guarantee were not agreed to between the parties.

In the decision reported in Pirthi alias Sansi etc. Vs. Jati Ram and others etc., the Apex Court has held that the suit for specific performance will not be an impediment merely because the third party came into possession.

In the decision reported in M.L. Devender Singh and Others Vs. Syed Khaja, wherein with reference to Sections 10, 20 and 23 of the Specific Relief Act, the Apex Court has held that provision for damages or penalty for breach is not sufficient to rebut the presumption.

In the decision reported in Nathulal Vs. Phoolchand, the Apex Court with reference to Section 53 A of Transfer of Property Act regarding the conditions essential to make out defence of part performance has held that, ''(1) that the transferor has contracted to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty; (2) that the transferee has, in part performance of the contract, taken possession of the property or any part thereof or the transferee, being already in possession continues in possession in part performance of the contract; (3) that the transferee has done some act in furtherance of the contract; and (4) that the transferee has performed or is wilting to perform his part of the contract.'' The plaintiff has taken this as a defense to seek for an order of specific performance. However, in the instant case, there is no such furtherance act being done by the plaintiff to claim his right u/s 53 A of the Transfer of Property Act as there was no concluded agreement between the parties. The defendant No. 1 has acted as a man of trust, but however, the plaintiff has tried to take unfair advantage of the trust of defendant No. 1 which he had on the plaintiff, as such, defendant No. 1 rather revoked the contract since the condition imposed by the plaintiff was not acceptable to, him.

For the foregoing reasons, while answering the points for determination accordingly, the appeal filled by the plaintiff is dismissed. The plaintiff is said to be in possession of the out house/portion of the suit property. In the event, if defendant No. 1 returns the amount of Rs. 15,000/- paid by the plaintiff with 8% interest from the date of suit till payment the plaintiff shall vacate and hand over the vacant possession of the premises which he is in occupation. The defendant No. 1 shall return the said amount within six months from today. No costs.