Bhandari Patel vs The State Of Madhya Pradesh

This first appeal filed under section 96 of the CPC is directed against the judgment and decree passed in Civil Suit No.9- A/91 dated 9.10.1995 by the learned Ist ADJ, Chhindwara. By the impugned judgment, the suit for specific performance filed by the plaintiffs was decreed. The plaintiffs were directed to pay remaining amount of sale consideration (Rs.1,20,000/-) to the defendant No.1 and, in turn, the said defendant was directed to execute the sale-deed. It is further ordered that if defendant No.1 fails to execute the sale-deed within one month after receiving the amount, the court will undertake the aforesaid exercise of Registration of sale deed on behalf of defendant No.1. If defendant No.1 refuses to receive the remaining sale consideration, the plaintiffs shall deposit the said amount in the court and in that event, they will be entitled to get the registry executed.

The plaintiffs instituted the suit for specific performance on 19.12.1990 in respect of an immovable property. The property belongs to respondent No.1, who admittedly entered into an agreement of sale with plaintiffs on 31.7.1989 (Ex.P/17) for land measuring 4.22 acre. Rs.5,000/- was paid by the plaintiffs as earnest money to defendant No.1 out of total sale consideration of Rs.1,25,000/-. The plaintiffs in the plaint contended that despite repeated requests by them, the defendant No.1 did not execute the sale deed. The repeated legal notices sent by plaintiff No.1 could not fetch any result. Having left with no option, the instant suit was filed praying for issuance of decree of specific performance against defendant No.1.

The defendant No.1 filed his written statement and denied the claim of the plaintiffs. The defendant No.1 assigned reasons for not executing the sale deed. He narrated the reasons which compelled him to enter into such agreement to sale. He pleaded that he is a poor person and under unavoidable circumstances, was required to enter into such agreement.

The learned trial judge after framing the issues and recording the evidence, allowed the suit by the impugned judgment and decree. Aggrieved, the appellant/ defendant No.1 filed this first appeal.

Shri Pranay Verma, learned counsel for the appellant submits that initially Bhuraji (appellant) and Keshav purchased the land ad-measuring 18.31 acre on 14.7.1958. On 6.5.1959, Keshav sold his piece of land in favour of present appellant. By way of a family partition dated 18.1.1981, the aforesaid land of 18.31 acre was partitioned and Bhuraji received 4.22 acre in his portion. Admittedly, this land is the subject matter of agreement to sale and present litigation.

Counsel for the appellant contends that Shivaji and Shakuntala, son and daughter of present appellant entered into two different agreements to sale with the plaintiffs. Plaintiffs had to satisfy the monitory requirement of the aforesaid separate agreements to sale and pay the money to Shivaji and Shakuntala. Thereafter, the plaintiffs did not have financial capacity to satisfy the requirement of present agreement to sale dated 31.7.1989 (Ex.P/17). The plaintiffs for this reason, never shown their readiness and willingness to pay the remaining money nor they were able to prove that they had adequate amount to satisfy the requirement of agreement to sale. Shri Verma submits that plaintiffs are admittedly engaged in the business of purchase and sale of land/property. He further submits that it is admitted that a revenue matter was pending before the revenue court, which was ultimately finalized by way of an agreement entered into between the parties. Although said revenue matter was filed by Shakuntala but she filed it at the behest of the plaintiffs. Shri Verma further submits that only two plaintiffs entered the witness box before the trial court. Only one plaintiff sent the legal notices. The depositions of witnesses, on behalf of the plaintiffs, were containing statements on behalf of that particular witness only. The legal notices do not contain any statement that the plaintiffs are ready and willing to pay the balance sale consideration and they have adequate amount to pay to defendant No.1.

In addition, learned counsel for the appellant further submits that as per section 16(c) of the Specific Relief Act, 1963 the plaintiffs have failed to aver and prove that they have performed or were always ready and willing to perform the essential terms of contract. By placing reliance on section 20(2)(b) of the said Act, it is submitted that,the court may exercise its discretion and decline the prayer for specific performance where hardship to the defendant is established. Shri Verma has taken pains to contend that out of a huge total consideration of Rs.1,25,000/- (which was a big amount in the year 1989), the plaintiffs only paid Rs.5000/- at the time of entering into agreement to sale. The only source of livelihood of defendant No.1, was the land which was the subject matter of the suit. Thus the court below ought to have rejected the prayer of the plaintiffs.

In view of aforesaid, following points were raised by the appellant No. :- (1) Readiness and willingness on the part of the plaintiffs, was not established and learned trial judge has committed a grave error in holding otherwise, (2) the monitory potential and mental preparedness of plaintiffs required for seeking decree of specific performance was not established, (3) the court below has committed an error in passing the impugned judgment whereas it should have exercised its discretion in favour of the present appellant.

In support of his contention, appellant relied on Gyaneshwar Vs. Smt. Moongabai @ Muneshwari Bai and another-2006(1) MPLJ 221 and Leeladhar Yadav Vs. Siddhartha House Co-operative Society Ltd. Garha-2006(2) MPLJ 329. It is noteworthy that during the course of arguments Shri Pranay Verma fairly stated that he is not pressing the point relating to the time and essence of contract.

Shri A.P.Shroti, Advocate entered appearance in view of this court''s order dated 24.6.2016 and supported the case of the appellant. He borrowed the arguments of Shri Pranay Verma, Advocate.

Per contra, Shri K.C.Ghildiyal, learned counsel for the respondents/ plaintiffs submits that the plaint averments must be read in totality. It is not necessary for the plaintiffs to aver in the same words used in section 16(c) of the Act. If in the facts and circumstances of the case, it is established that there was readiness and willingness to perform their part of contract, it is sufficient to grant the decree of specific performance. In support of this contention, he relied on the judgment of Pakistan Supreme Court in Maksud Ali Vs. Eskandar Ali-(1964) 16 DLR-138 which was considered in the case of Biswanth Ghosh Vs. Gobinda Ghosh-(2014) 11 SCC 605. The next contention of Shri Ghildiyal is that the statements of plaintiffs'' witnesses were sufficient to establish the preparedness to satisfy their part of agreement and no fault can be found in this regard in the impugned judgment. He submits that even if plaintiffs are not members of the same family, it will not disentitle them to seek specific performance of contract by filing the suit. He further argued that occupation of plaintiffs is immaterial for the purpose of deciding the suit for specific performance. The present appellant has failed to plead anything regarding his financial health in the written statement. It is argued that deficiency of evidence cannot be a ground to disturb the judgment. Reliance is placed in the case of Narinderjit Singh Vs. North Star Estate Promoters Ltd.-(2012) 5 SCC-712 to bolster the submission that where court below can gather from the available pleadings that the case for specific performance is made out, no interference is warranted. Readiness and willingness cannot be treated as straight jacket formula and the issue has to be decided keeping in view the facts and circumstances relevant to the intention and the conduct of the party concerned. Shri Ghildiyal also relied on Murlidhar Pinjani and another Vs. Sheela Tandon and another-2007(3) MPLJ-506 to contend that once factum of entering into agreement has been admitted, passing of consideration is not disputed, suit has to be ordinarily decreed. The discretion exercised by the court below need not be interfered with unless it is based on unsound reasons.

No other point is pressed by learned counsel for the parties.

I have bestowed my anxious consideration on the rival contentions advanced by the counsel for the parties and perused the record .

In the plaint, it is averred that a revenue matter was pending before the competent revenue court between 4/24.11.1989 and 30.4.1990. For this reason, on the proposed date (31.12.89), the sale deed could not be executed. After decision of the said revenue matter, the plaintiffs made various oral requests to defendant No.1 for executing the sale deed. This is followed by issuance of legal notices by the plaintiffs. By notice dated 4/5.11.1990, the defendant No.1 was directed to remain present before the concerned Registrar for executing the sale deed. In the legal notices, it was averred that the sale deed may be executed after receiving the remaining sale consideration on 12.11.1990. This legal notice was followed by two more legal notices but none could fetch any result. It is further averred that the plaintiffs were willing to execute the sale deed and are still ready to execute the same by paying the balance sale consideration. In the written statement, the defendant No.1 contended that the plaintiffs have taken advantage of his poor financial condition and lack of education.

On more than one place in the written statement, the defendant No.1 averred that plaintiffs have neither shown any willingness for executing the sale deed nor they had adequate amount to satisfy the requirement of the sale deed.

Shri Ashish Tripathi (P.W.1) deposed that amongst the plaintiffs, there was no written agreement to act jointly. The plaintiffs did not have any joint bank account. The other plaintiffs have not given any power of attorney to him. He deposed that a legal notice was sent to the present appellant by him. He categorically deposed that plaintiffs collected Rs.25,000/- each and they had requisite money to satisfy the requirement of sale deed.

The second witness Shri Anand also deposed that he was willing to execute the sale deed. He further deposed that he had Rs.25,000/- for the purpose of registration of sale deed. In his cross examination, he deposed that he did not enter into any agreement with Bhuraji and Ashish Kumar (P.W.1) informed him that he had entered into an agreement on behalf of the plaintiffs. He further stated that when, how and where agreement was entered into, he was not aware. On plain reading of the statement of both the witnesses show that they deposed for themselves. They did not depose that their statements are on behalf of all the plaintiffs. Readiness and willingness expressed by those witnesses has to be read as willingness on the part of said individual witnesses. There is a glaring contradiction in the statements of the said two witnesses. Ashish Tripathi (P.W.1) on the one hand said that Rs.25,000/- from each of the plaintiffs were collected and that money was available with the plaintiffs, Anand (P.W.2) deposed that he had only Rs.25,000/- with him. Thus, it is not satisfactorily established that Rs.25,000/- from each of the plaintiffs were collected and plaintiffs had the requisite money. The plaint averments regarding readiness and willingness to perform their part of agreement was required to be proved by all the plaintiffs. For this purpose,either all the plaintiffs could have entered the witness box and proved the plaint averments or the witnesses who had entered the witnessbox could have deposed that such agreement/ readiness shown was on the part of all the plaintiffs. At the cost of repetition, in my view, the readiness/ willingness expressed by the witnesses were confined to their personal willingness/readiness because the witnesses deposed about themselves. In the facts and circumstances of this case, in my view, readiness and willingness of all the plaintiffs were not established by leading credible evidence. Moreso, when in the written statement, the defendant No.1 has raised the objection that plaintiffs were not ready and willing to execute their part of the agreement. In the case of N.P. Thirugnanam (D) By Lrs vs Dr. R. Jagan Mohan Rao & Ors -(1995) 5 SCC 115, the Apex Court held that the factum of readiness and willingness to perform his (plaintiff''s) part of contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiffs were ready and were always ready and willing to perform their part of contract. This is an admitted fact that out of total sale consideration i.e 1,25,000/-, the plaintiffs had paid a paltry sum of Rs.5,000/-. Admittedly, the remaining amount of sale consideration (Rs.1,20,000/-) was not paid to defendant No.1 within stipulated period. The said amount was not deposited in the court during pendency of the instant suit. There is no deposition on behalf of all the plaintiffs that they had ever offered the balance consideration to defendant No.1 along with legal notices. Admittedly, plaintiffs had not sent the amount of balance consideration to defendant No.1. Thus, the question is whether this shows monitory potential of plaintiffs to pay the sale consideration and mental preparedness. In Gyaneshwar (supra), this court opined as under :-

"14. The next crucial point for deciding the entitlement of plaintiff to seek a decree for specific performance is to determine whether the plaintiff has been ready and willing to perform his part under the agreement. Admittedly, the plaintiff out of the consideration amount of Rs. 65,0007- had paid only Rs. 10,000/-. The balance of consideration amounting to Rs. 55,000/- was not paid by the plaintiff within the stipulated period. It was also not deposited in the Court during the pendency of the suit or even during the pendency of the present appeal. The plaintiff has no where stated even in his chief examination that he had ever offered the balance consideration to the defendant/respondent No. 1. Even along with notice Ex. P-2, issued by the plaintiff to the defendant/respondent No. 1, the amount of balance consideration was not offered/ tendered to the defendant/ respondent No. 1. The witnesses of the plaintiff are also silent on this point. No such suggestion seems to have been made to the defendant/respondent No. 1. The readiness and willingness for the purpose of seeking a decree for specific performance implies monetary potential to pay the consideration and mental preparedness to perform the part under the contract. The plaintiff/appellant having failed to discharge this burden is not entitled to a decree for specific performance....."

The Apex Court in N.P.Thiurgnanam Vs. Dr. R.Jagan Mohan Rao-AIR 1996 SC 116 held that the amount of consideration which plaintiff has to pay to the defendant must be necessarily proved to be available. Right from the date of execution, till the date of decree, he must prove that he is ready and has always been willing to perform his part of the contract. The continuous readiness and willingness on the part of the plaintiff is precondition to grant the relief of specific performance. This principle is followed by Division Bench of this Court in the case of Leeladhar (supra). This court opined that where a party has utterly failed to prove that it had arrangement of funds prior to the date of suit and from the date of agreement till passing of decree, the suit for specific performance of contract of sale could not have been decreed.

The evidence in the instant case shows that the plaintiffs have miserably failed to show that all of them were always ready to perform their part of agreement and offered the remaining sale consideration to the defendant. They also failed to establish by leading credible evidence that they had monitory potential to satisfy their part of agreement. In Biswanath Ghosh (supra), the Apex Court clearly held that no straight jacket formula can be formed for the purpose of deciding whether requirement of section 17 is fulfilled or not. It has to be seen on the basis of facts and circumstances of a particular case. As noticed, in the facts and circumstances of the present case, the plaintiffs have failed to establish their joint preparedness and monitory potential to perform their part under the contract. It is profitable to mention here that as per section 16(c) (explanation) it may not be necessary for the plaintiffs to actually tender to the defendant or to deposit in court any money except when so directed by the court. However, it does not mean that the plaintiffs were not required to show their willingness to pay the remaining sale consideration and availability of fund. In absence of establishing willingness of all the plaintiffs, it cannot be said that all the plaintiffs were willing to fulfill the requirement of their part. Moreso, when legal notices were also sent by only one plaintiff and P.W.2 Anand in his deposition narrated a different story about collection/availability of fund in comparison to the statement of Ashish (P.W.1).

Section 20(2)(b) of the Specific Relief Act makes it clear that where performance of contract would involve some hardship on the defendant which he could not foresee and non-performance would not involve any such hardship on plaintiffs, the court in its discretion may decline to grant decree for specific performance.

The admitted fact are that the plaintiffs had paid only Rs.5000/- out of total sale consideration of Rs.1,25,000/-. The defendant No.1 has pleaded in his written statement that he is illiterate and poor person. It is, thus, clear that his livelihood is based on suit property whereas the plaintiffs are involved in the business of purchase and sale of land/property. In Parakunnan Veetill Joseph''S Son ... vs Nedumbara Kuruvila''S Son -AIR 1987 SC 2328, the Apex Court held that section 20 of the Act empowers the court to deny the relief of specific performance when court finds that the conduct of plaintiff has made him dis-entitled for the said relief. Same view is taken by High Court of Kerala in Narayana Pillai Chandresekharan Nair s. Kunju Amma Thankamma-AIR 1990 Kerala-177. This Court followed the said principle in Gyaneshwar (supra). In this view of the matter, in the considered opinion of this court, the court below has committed an error in not exercising the discretion in favour of defendant No.1. In the factual backdrop of this case, it is clear that the performance of contract would involve some hardship on the defendant/ appellant whereas non- performance would not involve any such hardship on the plaintiffs who had only spent Rs.5000/- in the year 1989. For these cumulative reasons, I have no scintilla of doubt that the court below has committed an error in passing the judgment and decree in favour of the plaintiffs. Resultantly, the impugned judgment and decree dated 09.10.1995 is hereby quashed. The appellant shall return the earnest money of Rs.5000 /-to the plaintiffs with 6% interest per annum from the date of institution of the suit till its actual payment to the plaintiffs.

With aforesaid directions, the appeal is allowed.