Jambagalakshmi Krishnan vs P.C. Martin

S.M. Ali Mohamed, J.—These two original side appeals arise out of a common judgment of a learned single Judge of this Court in C.S. No.

232 of 1981 dated 7.6.1984.

The plaintiff is the appellant in O.S.A. No. 166 of 1985 and the first defendant is the appellant in O.S.A. No. 9 of 1986. The appellant P.C.

Martin in O.S.A. No. 166 of 1985 instituted a suit on the original side of this Court for specific performance of contract for sale against the

defendants. The first defendant has filed O.S.A. No. 9 of 1986 against the impugned judgment insofar as the counter-claim made by the 1st

defendant against the plaintiff was not decreed in its entirety.

The respective pleadings of the plaintiff and the defendants are summarised by the learned trial Judge which are as follows:

The plaint mentioned house belongs to the first defendant and the second defendant who is the husband of the first defendant. The house was

newly constructed and the plaintiff was put in possession of the same as a tenant on 3.9.1977 on a monthly rent of Rs. 800. Since the defendants

have purchased another house in some other locality, they have decided to dispose of this house to the plaintiff who is in occupation of the same as

a tenant. There were prolonged negotiations and for some reasons or other, the agreement of sale was pending and finally on 29.11.1979 the

agreement was entered into under which the defendants agreed to sell the house to the plaintiff at Rs. 1,75,000. The plaintiff paid a sum of Rs.

10,000 as advance on 29.11.1979. It was agreed that the balance of payment shall be made within six months from that day, and if time were to

be extended, the plaintiff, will pay interest on the amount upto a limit of Rs. 800 being the rent for the premises. A further sum of Rs. 25,000 was

paid as consideration by the plaintiff on 22.2.1980.

As per the agreement of sale the tenancy came to an end and the plaintiff was a purchaser and possessor of the property in part-performance of

the contract. When the plaintiff wrote to the defendants on 7.11.1980 offering to pay the balance of sale consideration, the letter repudiated the

contract and cancelled the same. The plaintiff was all along ready and willing to perform his part of the contract and to pay the balance of sale

consideration on receipt of the documents of title. But the defendants were postponing the same and the defendants are now trying to wriggle out

of the contract. Hence, the suit for specific performance of the contract sale. The first defendant/Jambagalakshmi who is the owner of the suit

property filed a written statement as follows:

The house in question was a newly constructed one and completed in or about 1977. The plaintiff is a friend of her husband and the plaintiff

became a tenant of the property in September, 1977 on a rent of Rs. 800 per month. The plaintiff wanted to purchase the property himself and

was negotiating with this first defendant''s husband, viz., second defendant. But the plaintiff took his own time and he never evinced any eagerness

to purchase the same, and he was putting it of endlessly. Therefore, in the middle of 1979, this defendant, wanted to know from the plaintiff

whether he was interested in purchasing the house at all, and if not whether it can be sold to third parties in which case the plaintiff will have to

vacate the premises. It was in this context, after a considerable delay, an agreement of sale was entered into between the parties under which the

first defendant agreed to sell the house at a confessional price of Rs. 1,75,000. The plaintiff had no money to make the purchase and he has only

paid a small sum of Rs. 10,000 as advance on 29.11.1979 on which date he was already in arrears of rent. The receipt-cum agreement was

written on 29.11.1979 and it was agreed that the plaintiff should pay the balance of the sale consideration within six months and take sale deed.

Besides the sum of Rs. 10,000 paid on the date of agreement, the plaintiff could pay only a sum of Rs. 25,000 on 22.2.1980 and thereafter the

plaintiff was unable to make any payment and he did not evince any interest also in purchasing the property, since he happened to be in possession

of the property. Time was the essence of the contract and the contract period came to an end in May, 1980. The plaintiff apparently lost interest in

purchasing the property because paying the rent of Rs. 800 per month and that too as and when he liked was beneficial to him. Therefore, the

defendants had no other alternative except to terminate the contract and they duly intimated the same to the plaintiff. The plaintiff was never ready

and willing to perform his part of the contract and he has come to court with a speculative claim. He has not even put the agreement of sale into

court. That apart, the plaintiff, has no right to be in possession of the property after the tenancy has been validly terminated. He has not even paid

the rent from August, 1970 onwards inspite of demands. Therefore this defendant makes a counter-claim against the plaintiff for possession of the

suit house and for a decree for Rs. 14,400 made up of eighteen months rent at the rate of Rs. 800 per month from August, 1979 to January, 1981

and Rs. 2,000 per month as damages thereafter. This defendant prays that the plaintiffs suit may be dismissed and a decree may be passed against

the plaintiff for possession, recovery of rent and for future mesne profits as claimed.

The second defendant, who is the husband of the first defendant, stated that the property belongs to his wife, viz., the first defendant and that he is

unnecessary party to the suit.

On the above pleadings, the learned Single Judge framed as many as seven issues.

After considering the evidence, both oral and documentary, the learned Single Judge was of the view that the plaintiff was not entitled for

specific performance of contract for sale and therefore, dismissed the suit. With regard to the counter-claim filed by 1st defendant for recovery of

possession of the suit property was concerned the learned Judge rejected the contention of the defendant but, however, the learned Judge was of

the view that the defendant was entitled to deduct a sum of Rs. 800 per mensem from August, 1979 onwards till the date of the decree out of a

sum of Rs. 35,000 (Rs. 10,000 + Rs. 25,000) being the part of sale consideration paid by the plaintiff to the first defendant by way of set off.

Aggrieved by the above judgment, both the plaintiff and the first defendant have preferred the above two appeals.

It is contended by Mr. S. Chellaswamy, learned Senior Counsel appearing in O.S.A. No. 166 of 1985 on behalf of the plaintiff/appellant that

the judgment and decree of the single Judge is unsustainable both on facts and in law. Mr. S. Chellasamy, strenuously contended that the

plaintiff/appellant was ready and willing to fulfil his part of the contract and the learned single Judge erred in holding that the plaintiff/appellant was

not ready and willing to fulfil his part of contract of sale. Mr. Chellaswamy was fair in his submission that upon the facts and circumstances of the

case, there is some delay in tendering the balance of sale consideration on the part of the plaintiff/appellant and submitted that any delay on the part

of the plaintiff/appellant in fulfilling his part of the contract has to be judged upon the peculiar facts and circumstances of the case. In this

connection, the learned Counsel referred to Section 46 of the Contract Act which reads as follows:

Where, by the contract, a promisor is to perform his promise without application by the promisee, and no time for performance is specified, the

engagement must be performed within a reasonable time.

Explanation: The question, ''what is a reasonable time'' is, in each particular case, a question of fact.

Learned Counsel for the petitioner further contended that as far as the sale of immovable property is concerned, it is well settled by the rulings of

the Apex Court that time is not the essence of the contract. In support of the above contention, the learned Counsel cited the ruling of the Supreme

Court reported in Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., , wherein the Supreme Court observed as follows:

In Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Another, , following the above ruling it was held (at pages 543-544 of S.C.C : (at pp.

1007-08 of A.I.R.:

It is settled law that the 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.

Vide Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, . It may also be mentioned that the language used in the agreement is not such as

to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be

evidenced by circumstances which are 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.

The learned Counsel submitted that what is reasonable time for performance of contract will depend upon the facts of each particular case. On the

other hand, Mr. S. Gopalratnam, learned Senior Counsel appearing on behalf of the respondents submitted that there are no infirmities in the

impugned judgment and the contentions of the learned Counsel for appellant are unsustainable in law. The learned Counsel further contended that

the learned single Judge erred in his finding to the effect that the counterclaim by the first defendant/appellant for recovery of possession of the suit

property was not maintainable. Mr. S. Gopalratnam contended that a suit for specific performance of conduct for sale cannot be enforced in

favour of a person who fails to aver and prove his readiness and willingness to perform his part of the contract and the plaintiff in the instant case

miserably failed in both the aspects. Mr. Gopalratnam in this connection referred to two decisions of this Court reported in Pushparani

Shanmughasundharam and two Ors. v. Pauline Manonmani James and five Ors. (1993) 1 L.W. 219 and Maruthai, S. v. Padmini Ramachandran

(1993) 2 L.W. 318. In the latter case, a Division Bench of this Court to which one of us was a party to the judgment has elaborately considered

the case law on the subject and has observed as follows:

that in the case of sale of immovable property, there is no presumption as to time being the essence of the contract. But even if it is not the obvious

essence of the contract, the court may infer that it has to be performed within a reasonable time, if the conditions are from the express terms of the

contract, from the nature of the property and from the surrounding circumstances, for example, the object of making the contract. The Court may

infer the fact that the plaintiff has not been ready and willing to perform his part of the contract.

After carefully considering the contentions of both the learned Senior Counsel for the appellant and the respondent and the evidence on record

both oral and documentary, we are of the view that there is no infirmity in the impugned judgment of the learned Single Judge as far as his findings

are concerned that the plaintiff/appellant is not entitled for specific performance of the contract. We are unable to accept the contention of Mr.

Chellaswamy to the effect that Section 46 of the Contract Act will apply to the instant case. A reading of Section 46 of the Contract Act makes it

clear that where by the contract, a promisor is to perform his promise and no time for performance is specified, the engagement must be performed

within a reasonable time and what is reasonable time is a question of fact in each case. In the instant case, contract for sale itself specifies three

months'' time which was erroneously stated in the plaint as six months. The plaintiff failed to perform within reasonable time upon the facts and

circumstances of the instant case even assuming the contract for sale did not specify time for performance of contract. In this connection, the

learned Judge has rightly held as follows:

It is difficult to believe his explanation for the non-production of this vital document. In fact, I am of opinion that he has suppressed the same and

produced into court after the suit was listed for trial. In this connection, I may also point out that at least after the production of this document, Ex.

P-14, the plaintiff ought to have amended the plaint that the time stipulated in the contract was only three months and not six months as pleaded in

the plaint. But, he has not chosen to do so till now and the allegation in the plaint is that six months'' time was stipulated for the performance of the

contract. Now, the plaintiff himself has given a go-bye to his six months story and he has stated that the mention of three months'' time in the

agreement was only for the purpose of records and that it has no significance or relevance''s. I am unable to accept this contention.

Even though in a contract for sale of immovable property, time is not essence of contract, it is well-settled that it has to be performed within a

reasonable time. In the instant case, it has not been performed at all within reasonable time. We therefore, reject the contentions of Mr. S.

Chellaswamy on the other hand, there is force in the contentions of Mr. Gopalratnam, learned senior Counsel appearing on behalf of the

respondent to the effect that a suit for specific performance of contract for sale, cannot be enforced in favour of the plaintiff who fails to aver and

prove his willingness and readiness to perform his part of the contract. In the instant case, there are averments in para. 13 of the plaint which are as

follows:

The plaintiff is ready and willing to pay the balance of the consideration on receipt of the document of title and ready and willing to perform his part

of the contract of sale.

But the plaintiff has not proved the averments of willingness and readiness in the instant case. In this connection, the Division Bench of this Court in

Pushparani Shanmughasundaram and two Ors. v. Pauline Manonmani James and five Ors. (1993) 1 L.W.219 , has observed as follows:

Clause (c) of Section 16 of the Specific Relief Act, 1963 reads as follows:

Specific performance of a contract cannot be enforced in favour of a person, 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 the performance of which

has been prevented or waived by the defendant.

This is a special rule of pleading and the proof, for the reason that the relief in a suit for specific performance of contract is a relief in equity. Section

16 which speaks of personal bar to relief has this special provision which deals with objections, not derived from the nature of the contract, but

solely from the acts or conduct of the claimant. Ordinarily rules of pleading require that the plaint should contain only a statement in a concised

form of the material facts on which the party pleading relies, but not be evidence by which they have to be proved. Order 6, Rule 8 of the Code

Civil Procedure says:

Where a contract is alleged in any pleading, a bare denial of the same by the opposite party shall be construed only as a denial in fact of the

express contract alleged or of the matters of fact from which the same may be implied, and not as a denial of the legality or sufficiency in law of

such contract.

Provisions in Chapter VI of the Indian Evidence Act say in no uncertain terms that the terms of a document cannot be proved otherwise than by

the production of the document itself. But, Courts in India have taken the view that apart from the exceptions that are enumerated in the said

Chapter, the fact of proof of the transaction is permissible. Rules as to burden of proof in Chapter VII of the Indian Evidence Act say, in Sections

101 to 106, that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts, which he asserts,

must prove that those facts exist; the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on

either side; the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence unless it is provided by

any law that the proof of that fact shall lie on any particular person. The words in Section 103 the burden of proof as to any particular facts lies on

that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof shall lie on any particular person clearly

show that a fact required to be proved by a law, has to be proved by the person upon whom the burden is created. Such exception is indisputable

in the language of Clause (c) of Section 16 of the Specific Relief Act, 1963, afore quoted. This provision says, specific performance of a contract

cannot be enforced in favour of a person who fails to aver and prove...."" The word ''prove'' in this (section) must be understood in the sense that

the plaintiff is required to bring in support of the fact in issue such facts, which would prove his readiness and wiling ness to perform his part of the

contract and the Court can either disbelieve it or believe it. In the light of the above, when we see the a fore cited two judgments, that is to say, the

judgment of a learned single Judge of this Court in the case of P. Lakshmi Animal v. S. Lakshmi Animal, (1980) 2 M.L.J. 192 and the Bench

decision of the Rajasthan High Court in the case of Kirpal Singh Vs. Mst. Kartaro and Others, , we fail to find any departure. It is not possible to

read in those judgments a rule that will require a pleading of denial of the contractor a specific denial about the ever readiness and willingness. Such

readiness and will always be a fact of special knowledge and conduct of the plaintiff and not that of the defendant. The specific acts of

representations to the defendant, if pleaded may require a denial. Absence of denial in such a case, and in some other cases may be a

circumstance, as has been said in the judgment of Rajasthan High Court, and not in the absence of denial, the requirement of proof created by the

statute, will be waived.

In the instant case, it is clear from the evidence on record that the plaintiff/appellant was not ready and willing to perform his part of the contract

and the learned trial Judge was right in his finding to the effect that,

I am satisfied that the plaintiff had no funds at any time and it was he who committed the breach of contract of sale and not vice-versa.

We are in entire agreement with the findings of the learned Trial Judge. Applying the above rulings of the Apex Court and the Division Bench

rulings of this Court, it is clear that the plaintiff/appellant was not ready and willing to perform his part of the contract and even if we apply the test

of reasonable time given in Section 46 of the Contract Act, the plaintiff/appellant has failed to satisfy the test as he was not in a position to fulfil his

part of the contract within reasonable time. The peculiar feature in this case in that the plaintiff/appellant wanted the title deeds of the first defendant

to raise loan from his bank to pay the sale consideration as evidenced by Ex. P-23 which clearly shows that the plaintiff/appellant had no source to

pay the balance of sale consideration and there was inordinate delay in fulfilling his part of the contract and it does not satisfy the reasonable time

even assuming Section 46 of the Contract Act applies to the instant case. In view of the above, we reject the contention of the learned Counsel for

the plaintiff/appellant.

There is force and substance in the contention of Mr. Chellaswamy, the learned Counsel for the plaintiff/appellant to the effect that the learned

Single Judge having held that the first defendant is not entitled for recovery of possession of property by filing a counter-claim and in fact granted a

decree against the plaintiff for arrears of rent. In reply, Mr. Gopalratnam, counsel for the 1st defendant contended that as the petitioner did not file

any application directing the defendant to file a separate suit in terms of Order 5, Rule 2 of Original Side Rules, it was not open to the

plaintiff/appellant to urge that the counter-claim filed by the plaintiff was not maintainable. Order 5, Rule 2 of Original Side Rules is as follows:

A defendant in a suit may set-off, or plead by way of counter-claim against the claims of the plaintiff, any right or claim, whether such set-off or

counter-claim sound in damages or not, and such set-off or counter-claim shall have the same effect as a cross suit, so as to enable the court to

pronounce a final judgment in the same suit both on the original and on the cross claim. But the court may, on the application of the plaintiff before

trial, if in the opinion of the court such set-off or counter-claim cannot be conveniently disposed of in the pending suit, or ought not to be allowed,

refuse permission to the defendant to avail himself thereof and direct the same to be tried separately.

A defendant pleading a set-off or counter-claim shall within three days of his filing the same serve the plaintiff or his advocate with a copy of the

written statement containing such set-off or counter-claim.

We are unable to accept the above contention of the learned Counsel for the first defendant. Order 5, Rule 2 of Original Side Rules has to be

read along with Rule 6 of the Original Side Rules and as the suit for specific performance has been dismissed by the learned single Judge; the

proper remedy for the first defendant is by way of filing a separate suit and work out, remedies available to the 1st defendant. Mr. Gopalratnam in

the alternative contended that if this Court hold that a separate suit has to be instituted to work out the remedies available to the first

defendant/appellant in O.S.A. No. 9 of 1986 the first defendant/appellant is entitled to the benefit u/s 14 of the Limitation Act, 1963. There is

force in the contention of Mr. Gopalratnam as far as this aspect of the matter is concerned and we are of the view that upon the facts and

circumstances of the case, the first appellant in O.S.A. No. 9 of 1986 is entitled to the benefit of Section 14 of the Limitation Act, 1963 and he is

entitled to exclude the period of time taken for litigation covered by the proceedings in the instant case. In the interests of justice, we grant time

upto 31st July, 1994 to the first defendant/appellant if she intend to file a separate suit to claim appropriate relief. In view of the above, both the

appeals are dismissed. Upon the facts and circumstances of the case, there shall be no as to costs.