Govardhan vs Anusyai Bai

Sanjay Yadav, J—Heard.

This is plaintiffs second appeal directed against judgment and decree dated 14.3.2005 passed by Additional District Judge, Multai District Betul in Civil Appeal No. 11-A/05, reversing the judgment and decree dated 4.12.2003 passed by Civil Judge Class I Multai in Civil Suit No. 4-A/99.

On a plea that an agreement of sale of plot admeasuring 20x65=1300 Sq. Ft. at the rate of Rs. 30/- per square feet entered into between the plaintiff and defendant on 6.9.1996 (Ex.P/1) and that an amount of Rs. 19,000/- was paid in advance and the plaintiff who is the brother of defendant, was placed in possession thereof with a further stipulation that the defendant shall execute the sale deed on or before 31.12.1996 and though the plaintiff was ready and willing to perform his part; however, defendant did not execute the sale deed. Plaintiff brought an action for specific performance of contract and for permanent injunction. Trial Court decreed the suit on the finding that the time being not the essence of contract, the defendant was bound to honour the same. Narration to that effect find mention in paragraph 26 and 27 of the judgment by the trial Court. It is found -

The Appellate Court has however, reversed the findings holding that though the defendant was ready and willing to perform her part; however, the plaintiff was not. Appellate Court relied on same set of facts to arrive at the conclusion as were before the trial Court. Relying on Ex.D/1, the Appellate Court held that the time was the essence of contract. Further, relying on the evidence of DW1, DW3, DW4, the Appellate Court arrived at a conclusion that the defendant was ready and willing. That referring to notice (Ex.P/15) dated 2.9.1997, the Appellate Court found that the defendant was ready and willing to perform her part of the contract.

Criticizing the judgment and decree, it is contended on behalf of the plaintiff that the Appellate Court has committed gross error in misconstruing the evidence on record inasmuch as that the defendant having not disputed the fact that the agreement of sale was entered into on 6.9.1996 and had received the amount of Rs. 19,000/- and that the remaining amount of Rs. 20,000/- was to be paid at the time of execution of sale-deed by 31.12.1996 and that the defendant having failed to advert to any circumstances preventing her from executing the sale deed, the impugned judgment on a perverse finding is not tenable.

Learned counsel for defendant on his turn, has supported the judgment by the Appellate Court.

Considered the rival submissions.

The substantial question of law which arises for consideration is as to "whether in given facts of the matter, the First Appellate Court is justified in holding that the time was the essence of contract"?

Basic facts as regard to suit property belonging to the defendant - That an agreement of sale was entered into between the plaintiff and defendant on 6.9.1996 and an advance of Rs. 19,000/- was paid. That the agreement of sale contained the stipulation that the sale deed be executed by 31.12.1996, which could not be, are not in dispute. It is even not in dispute that both the parties have pleaded of their readiness and willingness and since the sale deed could not be executed by 31.12.1996, the trial Court on same set of facts found that since time was not the essence of contract, the agreement of sale was operative and the sale deed could be executed after the expiry of 31.12.1996. Whereas, Appellate Court has held it otherwise holding that the time was the essence of contract.

In Madamsetty Satyanarayana Vs. G. Yellogi Rao and Others, AIR 1965 SC 1405 : (1965) 2 SCR 221 it is held -

"6. ...As Art. 113 of the Limitation Act prescribes a period of 3 years from the date fixed thereunder for specific performance of a contract, it follows that mere delay without more extending upto the said period cannot possibly be a reason for a Court to exercise its discretion against giving a relief of specific performance. Nor can the scope of the discretion, after excluding the Cases mentioned in S. 22 of the Specific Relief. Act, be confined to waiver, abandonment or estoppel. If one of these three circumstances is established, no question of discretion arises, for either there will be no subsisting right or there will be a bar against its assertion. So, there must be some discretionary field unoccupied by the three cases, otherwise the substantive section becomes otiose. It is really difficult to define that field. Diverse situations may arise which may induce a Court not to exercise the discretion in favour of the plaintiff. It may better be left undefined except to state what the section says, namely; discretion of the Court is not arbitrary, but sound and reasonable guided by judicial principles and capable of correction by a Court of appeal.

The result of the aforesaid discussion of the case law may be briefly stated thus: While in English mere delay or laches may be a ground for refusing to give a relief of Specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waiver of a right is not a precondition necessary to disentitle the plaintiff to the said relief, for if abandonment or waiver is established, no question of discretion on the part of the Court would arise. We have used the expression "waiver" in its legally accepted sense, namely, "waiver is contractual and may constitute a cause of action; it is an agreement to release or not to assert a right"; see Dawsons Bank Ltd. vs. Nippon Menkwa Kabushihi Kaish (JapanAIR 1935 79 (Privy Council) . It is not possible or desirable to lay down the circumstances under which a Court can exercise its discretion against the plaintiff. But they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position to his prejudice or such as to bring about a situation when it would be inequitable to give him such a relief."

In K.S. Vidyanadam and Others Vs. Vairavan, AIR 1997 SC 1751 : (1997) 1 CTC 628 : (1997) 2 JT 375 : (1997) 1 SCALE 739 : (1997) 3 SCC 1 : (1997) AIRSCW 956 : (1997) 2 Supreme 597 , it is held -

"10. It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the Court by both s 10 and 20. As held by Constitution Bench of this Court in Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., AIR 1993 SC 1742 : (1993) 1 JT 74 : (1992) 3 SCALE 544 : (1993) 1 SCC 519 : (1992) 3 SCR 798 Supp , "it is clear that in the case of sale of immovable properly there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident?) : (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract". In other words the Court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised...."

Bearing these principles in mind, when the findings arrived at by the trial Court in paragraph 26 and 27 and when these findings are compared with those of the Appellate Court, it is clear that the Appellate Court has ignored and the trial Court has taken into consideration the conduct of plaintiff and his willingness for execution of sale deed; whereas, the defendant, it seems from the evidence, was waiting for the period to expire by 31.12.1996. With these facts on record, the First Appellate Court committed grave error of law in negativing the suit on the principle that the time being essence of contract, no specific relief could be granted after it has expired, which deserves to be and is hereby set aside. And, the judgment and decree passed by the trial Court is restored with modification as under.

The question is that with the expiry of time since 1996 the price of the land has increased manifold and the property in question has remained in possession of defendant because of interim order of status-quo and non-alienation. Therefore, to do complete justice, the judgment and decree by trial Court is modified to the extent that the plaintiff, on depositing the sale price at the rate determined on the basis of Collector''s rate as was prevalent on 2.6.2005 with CCD, would be entitled for execution of sale deed within three months from the date of communication of this order.

The Appeal is allowed to the extent above. There shall be no costs. Let decree be drawn accordingly.