Chandra Kant Gupta vs Krishna Manohar Bhatwara

This first appeal by the defendant arises out of a suit for specific performance of contract instituted by the plaintiffs. The parties in this appeal would be referred as arrayed in the plaint.

The suit was instituted by the plaintiffs (five in number) on 14-8-1991 with the averments that the defendants who are the owners of house property bearing No. C-86A, Jagraj Marg, Mangal. Marg, Bapu Nagar, Jaipur, agreed to sell this property to the plaintiff No. 1 for a consideration of Rs. 17,5 1,000 vide agreement dated 8-7-1989. An amount of Rs. 3 lakhs was paid in advance on 8-7-1989. The defendants in part performance of the agreement handed-over possession of some portions of this house to the plaintiff as contained in para 5 of the plaint while giving the details of the terms and conditions of the agreement, it was inter alia agreed upon between the parties that the defendants would get the house vacated from the tenants within a period of four months from the date of agreement and that the defendant should obtain NOC from the Income Tax department and thereafter shall get the registered sale deeds executed in favour of the plaintiff No. 1 or in the name of other persons as named by him. Thereafter, half portion of the house (Northern side) was got vacated from the tenants and sale-deed of this half portion was got registered on 9-8-1990 on payment of Rs. 4,37,750.

It was next pleaded that the defendants vide letter dated 22-12-1989, informed the plaintiff that remaining half portion of the property (Southern side) is now vacant and the plaintiff may take possession of the said potion after making the remaining payment but this information given by the defendants was incorrect as the plaintiff came to know that one tenant Baijnath Asharfilal is still in occupation in one portion of the house. It has also been pleaded that at the time of registry of the half potion, the plaintiff No. 1 informed the defendants to execute sale-deeds of the remaining half portion in favour of the defendant Nos. 2 to 5 and further asked the defendants to obtain NOC from the Income Tax department. But the defendants did not obtain NOC in the name of defendant Nos. 2 to 5 and vide Notice dated 7-11-1990, the defendants informed the plaintiff regarding cancellation of the agreement and raised a demand of Rs. 50,000 as damages in addition to an amount of Rs. 1,50,000 already deposited with the defendants as an advance consideration for the remaining half portion of the house.

It was also pleaded that the plaintiff was /is always ready and willing to perform his part of the contract but the defendants failed to do so.

The defendants in their joint written statement admitted the agreement and the terms contained therein with a plea that it was not agreed upon between them that the defendants would get the entire house vacated from the tenants within four months. As per written statement, entire house was got vacated from the tenants by 26-12-1989 and it is wrong to say that one tenant Baijnath Ashrafilal was in possession of one portion of this house. While admitting the correspondence between the parties, it was stated that the plaintiff No. 1 never informed them to obtain NOC in the name of remaining plaintiffs, and it was the plaintiff No. 1 who was never ready and willing to perform his part of the contract regarding remaining half portion of the house. It was also pleaded that since there was no agreement between the defendants and the plaintiff Nos. 2 to 5, the present suit for specific performance in favour of defendant Nos. 2 to 5 is not maintainable and transaction of sale in favour of defendant Nos. 2 to 5 is barred by section 3 of the Benami Transaction (Prohibition) Act, 1988 (hereinafter referred to as the ''Act'').

On the basis of the pleadings of the parties, following issues were framed.

(1) �vk;k oknh fo�; lEif�k gsrq fo�; vuqcU/k fnukafdr 8 tqykbZ] 1989 ds vuqlkj viuk nkf;Ro iw.kZ djus o fo�; ewY; dk Hkqxrku dj lEif�k dk fo�; i= vius i{k esa djkus ds fy, gesa''kk bPNqd o rS;kj jgk gS ,oa vc Hkh bPNqd o rS;kj gSA

(2) vk;k cknh us Lo;a us fo�; vuqcU/k fnukad 8-7-1989 dk mYya?ku fd;k gS o mldh ikyuk ugha dh gS] blfy, izfroknhx.k mDr izfrKki= dks fujLr djkus ds vf/kdkjh gSa vkSj bl dkj.k oknh bldh fof''k"V ikyuk dh izkFkZuk izkIr djus dk vf/kdkjh ugha gSA

(3) vk;k oknhx.k la- 2 rk&5 }kjk dher vnk dj fof''k"B ikyuk dh izkFkZuk ds }kjk fo�; i= rgjhj o rdehy izfroknhx.k ls dkuwuu djk;k tk ldrk gSA

(4) vk;k fo�; jkf''k oknh la- ,d }kjk gh fn;k tkuk fo�; vuqcU/k ds }kjk vko'';d gS ;fn ,slk gS rks fo�;&i= oknh la[;k&2 rk&5 ds i{k esa djkuk ,d VkatsD''ku gks tkrk gS o csukeh VkatsD''ku izksfgfc''ku ,DV] 1988 ds vuqlkj voS/k gS o n.Muh; gS] bl dkj.k nkok [kkfjt fd;s tkus ;ksX; gSA

(5) vk;k izfroknh {kfriwfrZ ds 2,00,000 #i;s izkIr djus dk vf/kdkjh gS] ftlesa ls izfroknh 1,50,000 #i;s izkIr dj pqdk gSA

(6) vk;k oknh la- rk&5 dks nkok ykus dk vf/kdkj gSA

(7) vuqrks"k�

Evidence of the parties was recorded. Vide impugned judgment dated 17-1-1995, the learned trial Judge decided all the issues in favour of the plaintiffs and thus decreed the suit for specific performance.

I have heard learned counsel for the parties. On the basis of the submissions made before this court, following points arise for consideration :-

" 1. Whether the plaintiff No. 1 was and is ready and willing to perform his part of the contract ?

Whether the suit was not maintainable in absence of fresh agreement ?

Whether decree for specific performance in favour of plaintiff Nos. 2 to 5 is illegal ?

Whether Ex. 1 is a Benami Transaction prohibited by the Act, 1988

First Point

In a suit for specific performance, it is well settled that the plaintiff has to plead and prove that he was and is ready and willing to perform his part of the contract from the date of agreement to the date of filing of the suit.

It is admitted case that in performance of the agreement Ex. 1, registered sale-deed for half portion of the suit house was executed in favour of the plaintiff No. 1 on 9-8-1990. The case is, now confined to only remaining half portion. Clause No. 5 of this agreement provides that the defendant No. 1 shall get the property vacated from the tenants within four months from the date of this agreement. Admittedly the defendant No. 1, having taken possession of the half portion informed the plaintiff No. 1 and thereafter the defendants obtained NOC for half portion which is Ex.A 2, dated 24-7-1990 and thereafter sale-deed for half portion was got for remaining half portion of the house was registered on 9-8-1990, NOC obtained on 10- 10- 1990, which is Ex. A 2 /1 and sale deed for this remaining half portion was to be executed only after having obtained NOC as per clause No. 5 of the agreement.

It was contended by learned senior counsel Mr. 13handari that the entire house f ell vacant by 26-12-1989 and the plaintiff No. 1 was informed accordingly but he did not take any further steps and it shows that he was not ready and willing to perform his part of the contract. Learned senior counsel Mr. Mehta referred Ex. 29 letter dated 27-3-1990, whereby the defendants informed the plaintiff No. 1 that entire house is now vacant and the plaintiff should take steps for execution of the sale deed. The plaintiff in reply informed the defendants vide letter Ex. 16 dated 5-4-1990 to prepare fresh agreement for the remaining half potion. The plaintiff further informed the defendants that he is ready to pay the balance price, to take possession of the remaining half portion and is also ready to get registered sale deed executed for the entire house if the defendants so agreed.

Having considered the above submissions and the letters, it is obvious that the entire house fell vacant in between the last week of December 1989 to March 1990, but both the parties agreed to get the registered sale deed executed only for the half portion on 9-8-1990. Even otherwise the registered sale deed was to be executed only after obtaining NOC and the same was obtained on 10- 10- 1990, which is Ex. A.2/1 and thus there was no delay on the part of the plaintiff No. 1 for getting the sale deed executed for the remaining half portion.

It was next submitted by Mr. Bhandari that the defendants informed the plaintiff No. 1, vide letter Ex. 32 dated 12-10-1990 that NOC for the remaining half portion has already been obtained on 10-10-1990 and he was asked to prepare sale-deed for its registration within 15 days but no step was taken by the plaintiff No. 1. Mr. Mehta placing reliance upon Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Another, contended that time was not essence of the contract between the parties. The Hon''ble Supreme Court held that fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by circumstances which should be sufficiently, strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract. In the instant case the defendants vide letter Ex. 27 dated 22-12-1989 informed the plaintiff No. 1 that the two tenants have vacated half of the portion of the house and the plaintiff No. 1 should make the payment within 15 days so that the defendants may Obtain NOC, The plaintiff made payment of Rs. 2,87,500 on 17-1-1990 and this payment though after expiry of 15 days was accepted by the defendants. First NOC Ex.A 2 was obtained on 24-7-1990 and the sale deed for the half portion was got registered on 10- 10- 1990. It shows that first NOC was obtained after a period of more than six months of the payment and sale deed was got registered after about two and half months of NOC Ex.A 2. In view of these circumstances, it is evident that it was never the intention of the parties to treat time as the essence of the contract. It is also significant to say here that in reply of the letter Ex. 32 dated 12-10-1990, the plaintiff No. 1, vide letter Ex. 18 dated 20-10-1990 informed defendants to obtain NOC in the name of four persons named in this letter, who are the defendant Nos. 2 to 5 with a further specific prayer that the defendants should supply a photostat copy of NOC so that the plaintiff may purchase the stamps in the name of the person NOC has been obtained by the defendants. All this correspondence between the parties very well proves that the plaintiff No. 1 was always ready and willing to perform his part of the contract from the date of the agreement to the date of filling of the suit.