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Judgment
158 paragraphs · 15,903 wordsP.S. Narayana, J.—A short Episode:
The unsuccessful defendants in O.S. No. 146 of 1979 on the file of the Subordinate Judge, Eluru, being aggrieved of the decree for specific performance granted in the aforesaid suit dated 08.10.1982, preferred the present appeal. Learned Subordinate Judge, Eluru, in the light of the respective pleadings of the parties, having settled the issues, recorded the evidence of P.Ws.1 to 4, D.Ws.1 to 4, marked Exs.A1 to A11 and Exs.B1 to B11 and after recording reasons, ultimately, came to the conclusion that the suit for specific performance to be decreed, directing the appellants/defendants to execute a regular sale deed and register the same in favour of respondent/plaintiff in terms of agreement of sale, Ex.A1, for the schedule mentioned property within three {3} months from the date of the decree and on failure on the part of the appellants/defendants to execute the sale deed, respondent/plaintiff is entitled to get the sale deed executed through process of Court. A.S.M.P. No. 1745 of 2008 was filed under Order IX Rule 9 of the CPC praying to set aside the judgment dated 28.02.1996 by restoring the appeal for hearing. By order dated 17.11.2008, after narrating the facts and recording certain reasons, learned Judge of this Court came to the conclusion that A.S.M.P. No. 1745 of 2008 to be allowed and accordingly, the order dated 28.02.1996 made in A.S. No. 938 of 1983 was recalled with a direction to post the appeal before the regular Bench after one week and thus, the matter is coming up for hearing before this Court.
There appears to be some controversy between the parties relating to the fact actually at what point of time, this application had been filed. No doubt, the counsel representing appellants contended that the application was moved immediately and the same was at the SR stage i.e., C.M.P. {SR} No. 16518 of 1996 filed on 18.03.1996 and for the reasons best known, the application in A.S.M.P. No. 1745 of 2008 was numbered in 2008 only. However, learned Counsel representing the respondent/plaintiff would contend that for sufficiently long time, the appeal was out of file and after a long lapse of time, this application had been moved. Be that as it may, the fact remains that A.S.M.P. No. 1745 of 2008 had been allowed by this Court by order dated 17.11.2008 and inasmuch as the prior judgment dated 28.02.1998 had been set aside by restoring the appeal to file, this Court heard the appeal on merits.
Contentions of Sri Y.V. Ravi Prasad.
Sri Y.V. Ravi Prasad, learned Counsel representing the appellants, had taken this Court through respective pleadings of the parties and the evidence available on record and would maintain that in the facts and circumstances of the case, the trial Court erred in decreeing the suit for specific performance. Learned Counsel pointed out to the contents of Ex.A1 and also the contents of Ex.A2 and would maintain that the terms and conditions agreed upon by the parties, as reflected from Ex.A1 stand as they are and those terms and conditions had not been watered down in any way by virtue of Ex.A2-endorsement. Learned Counsel also further explained under what circumstances Ex.A2-endorsement was made. The counsel pointed out that when normally the time is the essence of the contract, the trial Court totally erred in recording certain findings as though such time cannot be the essence of contract. The counsel also pointed out that even if the dates are to be carefully examined and even if Ex.A11 to be taken into consideration, it is clear that at the relevant point of time, respondent/plaintiff had not been ready and willing to perform his part of the contract. The counsel also would maintain that the trial Court should have disbelieved the version of P.W.1 to the effect that P.W.1 approached P.Ws.2 to 4 for money and they promised to supply the necessary funds for completing the transaction. This cannot be taken as readiness and willingness to perform the contract. The counsel also incidentally pointed out to Ex.B2 and the written statement filed by the fifth defendant in this regard and made certain other submissions. Learned Counsel also pointed out to the agenda made to Ex.A2 and the forfeiture clause as well. While pointing out to the contents made in Ex.A2, the counsel would maintain that when the appellants complied with the delivery of the possession and when the corresponding obligation on the part of the respondent/plaintiff to pay or deposit the amount within time had not been complied with, then the trial Court ought to have arrived at a conclusion that P.W.1 was not ready and willing to perform his part of the contract within the stipulated time. The counsel, in all thoroughness, had taken this Court through the oral evidence of P.Ws.1, 2, 3, 4 and also the evidence of D.Ws.1, 2, 3 and 4 as well. Learned Counsel had taken this Court through the relevant findings recorded by the trial Court and would maintain that a new case not pleaded by either of the parties, had been made out by the trial Court and the same is impermissible. Learned Counsel also would maintain that the mere non-giving of reply cannot be made a ground to decree the suit for specific performance. It is not the case of the plaintiff that any of the conditions of Ex.A1 had been diluted by virtue of Ex.A2, the counsel would maintain that the trial Court ought to have taken note of the fact that the offer to sell the property was to discharge the debts and hence, time was made essence of the contract. The fact that Rs. 5,000/- (Rupees five thousand only) alone had been paid also cannot be lost sight of. Here, is an unfortunate case where the appellants/defendants have lost possession by complying with the condition of delivery of possession, but, however, the other conditions specified making the time as essence of contract, the payment of balance of consideration within the stipulated time, these conditions had not been complied with. Thus, in the facts and circumstances, if the relief of specific performance is to be granted, the appellants/defendants would be put to disadvantage and the respondent/plaintiff would get unfair advantage and even if undue hardship is to be taken into consideration in the light of the conduct of the parties, it would be inequitable to grant the relief of specific performance. The counsel also pointed out to the fact of non-marking of the notice dated 04.06.1979 and would maintain that the contents of notice not being available before the Court, the said fact also to be considered. The counsel also would further maintain that certain subsequent events are brought to the notice of this Court by way of an affidavit. Even if it is to be taken that some further alienation had been made, the same is hit by the Doctrine of Lis pendens. The ingredients for granting the relief of specific performance had not been satisfied. The counsel also would maintain that till an affidavit is filed before this Court relating to subsequent alienation, the appellants are unaware of the same and hence, in the facts and circumstances of the case, the appeal is to be allowed. The counsel also placed reliance on several decisions to substantiate his submissions.
Contentions of Sri C. Subba Rao.
Sri C.Subba Rao, learned Counsel representing the respondent/plaintiff, would maintain that this is an unfortunate case, where the appeal was dismissed on merits in the year 1996 and though it is contended by the other side that immediately, an application had been moved for setting aside the said judgment, the application came to light only in the year 2008 and since the said application was allowed, the matter is coming up before this Court for hearing on merits. Learned Counsel also pointed out to the contents of the affidavit filed before this Court dated 12.12.2008 and would maintain that on verification of records, it is clear that the appellants having preferred an appeal, had not chosen to file any application praying for stay of execution of the registered sale deed for the reasons best known to them and the counsel also pointed out that inasmuch as mere pendency of appeal would not operate as stay of execution, the respondent/plaintiff bona fide obtained a regular sale deed through process of Court on 25.09.1985 and the main appeal itself was disposed of on merits by this Court on 28.02.1996, wherein the appellants were permitted to withdraw the balance sale consideration lying in deposit to the credit of the suit O.S. No. 146 of 1979. The counsel also pointed out that on 17.11.2008 this Court allowed the application recalling the decree made in A.S. No. 938 of 1983 dated 28.02.1996. But, even by that date i.e. by 10.11.2008, the property was transferred in favour of a third party namely N.Rama Devi vide document No. 5013 of 2008 and in fact this was preceded by an agreement of sale and thus, the counsel would maintain that there are bona fide series of transactions. Because of non-obtaining of the stay of execution of decree by the appellants, bona fide respondent/plaintiff obtained a sale deed through process of Court by putting the decree into execution. Inasmuch as the appeal had been disposed of even in the year 1996 and for sufficiently a long time, respondent was under the bona fide impression that no lis was pending relating to the property by way of an appeal. Yet another alienation was made and it is unfortunate that subsequent thereto, the application filed by the appellants had been allowed and that is how the matter is coming up for hearing on merits again. The counsel also would point out that no doubt the other side is contending, that an application had been moved at the earliest point of time, even in the year 1996 and in the absence of any acceptable material, inasmuch as the application had been numbered only in the year 2008, it may have to be taken that the second transaction of sale made by P.W.1 also is a bona fide transaction. In a way, the subsequent purchaser would be protected by Section 19 of the Act. The counsel would further maintain that it is not the case of the either of the parties that the relationship between these parties had not been cordial and normally, in case of immovable property, time is not the essence of contract. The recitals of Ex.A1 have to be read carefully along with Ex.A2 and even if the proximity of time to be taken into consideration, it is not as though there are serious lapses on the part of P.W.1 and in fact, when a notice had been given making a demand, there was no reply or response from the appellants/defendants. Learned Counsel also would lay emphasis on the aspect that had it been the interest of the parties, specifically to treat the time as the essence of contract within the stipulated time, when P.W.1 was not ready, nothing prevented the appellants/defendants to put P.W.1 on notice putting an end to the contract or making a demand in this regard. When this was not done, when the relationship between the parties had been cordial, taking the fact that the time to be not the essence of contract, normally, in case of immovable property, immediately, a notice of demand had been issued and Ex.A11 would go to show that within a short span of time, though exactly not within time, P.W.1 had been ready and willing to perform his part of the contract. The evidence of P.Ws.2 to 4 also cannot be ignored in relation to readiness and willingness to perform his part of the contract. The counsel also pointed out that in Ex.A2, the intention to put an end to contract had not been expressed. Learned Counsel also pointed out to the decisions relied upon by the counsel representing the appellants and would maintain that in all these decisions, there had been some correspondence between the parties and in spite of putting the party/agreement holder on notice, there was defiance to perform his part of the contract. Under the said circumstances and on facts, the Apex Court, no doubt, observed that such party is not entitled to the relief of specific performance. But the facts of the present case being distinguishable, the ratio laid down in those decisions cannot be made applicable. The counsel also pointed out to the relevant dates how in quick succession P.W.1 had acted and ultimately, instituted a suit. The counsel in all fairness would maintain that there is some controversy whether the notice is dated 19.04.1979 or 19.06.1979 or 04.06.1979, but, however the counsel would maintain that inasmuch as there is an attempt to the service of notice dated 04.06.1979. In the written statement, the notice dated 04.06.1979 may be taken as correct date. Even if the notice dated 04.06.1979 having been served, no reply had been given and the suit had been rightly instituted in July 1979. These acts done by P.W.1 in a quick succession would go to show that P.W.1 was interested in performance of the contract and had been ready and willing to perform his part of the contract. However, to avoid the contract, ground is being taken that time being the essence of the contract. This cannot be sustained. Though notice dated 04.06.1979 as such has not been marked, this may not seriously alter the situation. Exs.A5 to 8 are the acknowledgments and Ex.A9 is the returned cover, may be in relation to yet another notice. This controversy regarding to the date of notice may not have much impact in the light of the stand taken in the written statement of Exs.D1 to D3 relating to this notice. The counsel also had drawn attention of this Court to Sections 19 and 20 of the Specific Relief Act, 1963 and would maintain that the present purchaser, no doubt, an unknown party to the present litigation being a bona fide purchaser, without notice of any pending litigation as such, this fact also may have to be taken into consideration by invoking the principles relating to equity and even otherwise, in the light of convincing findings, which had been recorded by the trial Court, this is not fit matter to be interfered with and the appeal to be dismissed. The counsel also placed reliance on certain decisions to substantiate his submissions.
Heard the counsel on record and perused the oral and documentary evidence available on record and the findings recorded by the trial Court.
Before formulating the points for consideration to be decided in the appeal and record findings on the appreciation of oral and documentary evidence available, it may be appropriate to have a glance on the respective pleadings of the parties, the issues settled, the evidence available on record and the findings recorded by the trial Court in nutshell.
Pleadings of the parties.
Averments made in the Complaint.
The plaintiff/respondent in the present appeal pleaded in the plaint as hereunder.
In the partition of the family properties between the 1st defendant, his brother Venkata Rama Soma Subbarao and others the property mentioned in the schedule hereto fell to the share of the1st defendant and late Venkata Rama Some Subbarao garu while they were enjoying the property jointly Venkata Rama Soma Subbarao garu and defendants 4 to 8 became entitled to the share of the said Subbarao garu.
During course of the business which the defendants have been carrying on, in the name of Kanigolla Ramachandrarao & Co., Eluru and K.V.R.S. Subba Rao firm, the defendants became heavily indebted. The creditors preparing for payment of the debts and to discharge the debts due, the defendants agreed to sell and the plaintiff agreed to purchase the property mentioned in the schedule hereto for Rs. 46,000/-and an agreement of sale dated 14.10.78 was executed by the defendants in favour of the plaintiff.
The terms of the agreement are:
(i)The defendants agreed to sell and the plaintiff agreed to purchase the property mentioned in the schedule hereto for Rs. 46,000/-.
(ii) The plaintiff should pay Rs. 5,000/- as advance at the time of the execution of the agreement which amount he paid.
(iii) The plaintiff should pay the balance of Rs. 41,000/- within 3 months and 10 days i.e., by 23.1.1979 and got a sale deed executed and registered at his expense.
(iv) If the plaintiff commits default in making ready the balance of consideration and got the document executed and registered, the agreement shall stand cancelled and the plaintiff should loose the sum of Rs. 5,000/- paid as advance.
(v) If the plaintiff is ready and the defendant commit default in executing and registering the sale deed, the plaintiff can take proceedings against them for getting the sale deed executed and registered as the defendants shall also be liable for all loss occasioned to the plaintiff by their default.
(vi) The defendants should deliver possession of the property at the time of registration of the sale deed.
(vii) The defendants should execute the sale deed in favour of the plaintiff or his nominee.
The defendants could not obtain possession and were not in a position to give vacant possession of the property as agreed to in the agreement dated 4.10.78. So, on 16.1.1979, they requested the plaintiff to extend the time for performance of the agreement till 10.4.79 i.e., by 77 days. The plaintiff agreed and an endorsement, to that effect i.e., extending time for performance till 10.4.1979 was made by the defendants. All the defendants signed the said endorsement.
The defendants obtained vacant possession and they delivered possession of the property to the plaintiff on or about 15.2.1979. The plaintiff accordingly took vacant possession and spent Rs. 4,800/- for repairs of the building by fixing 2 roll shutter girder, a new stain case for the up-stair portion, painting and raising the level of the portions in front. The plaintiff has been in possession of the property ever since 15.2.1979.
The plaintiff made ready the balance of consideration even by 8.4.1979. He requested the defendants to receive the balance of consideration and execute and register a sale deed in pursuance of the agreement of sale. The defendants were putting of the same. The plaintiff has been ready and willing to perform his part of the contract. The plaintiff therefore issued a notice to the defendants on 4.6.79 calling upon them to receive the balance of consideration and execute and register a proper sale deed. The defendants 1 to 5 and 7 received the notice. The defendants 6 and 8 evaded to receive the notices and the notices were returned unserved. The defendants did not give any reply. They also did not execute and register a sale deed. The plaintiff has therefore a right.
The plaintiff now learns that some creditors filed suits and got the properties attached before judgment. The defendants are be and to have the attachments over the suit property raised. They are bound to make out a good title to the property.
If for any reason the court considers that specific performance cannot be granted, the plaintiff will be entitled to the amount of Rs. 5,000/- paid by him as advance and interest thereon from14.10.78 when the plaintiff paid the amount and the amount of Rs. 4,800/- spent by the plaintiff with interest thereon.
Averments made in the Written Statement of D1 to D3
It is true that in a partition of the family properties between the first defendant, late Venkatarama Soma Subbarao and others the plaint schedule property fell to the share of the first defendant and his brother the said Subbarao. It is also true that on the death of late Venkata Rama Soma Subbarao defendants 4 to 8 as his heirs became entitled to his share therein.
After the death of late Venkata Rama Soma Subbarao on 2.12.1969 defendants 1 to 3 and defendants 5, 6 and 7 partitioned their properties on 19.3.1978, defendants 4 and 8 having relinquished their share in favour of defendants 5 to 7 and the sharers as per the partition took possession of their properties that fell to their respective shares on the said date. The plaint schedule property fell to the share of the 5th defendant in the said partition.
It is true that an agreement of sale dated 14.10.1978 was executed by the defendants in favour of the plaintiff in respect of the plaint schedule property for a consideration of Rs. 46,000/-. These defendants also joined in the execution of the said agreement as the plaintiff required them also to join in the absence of a registered partition deed. The terms of the agreement mentioned in paragraph 5 of the plaint are true. It is also true that the plaintiff paid a sum of Rs. 5,000/- as advance. It is also true that an endorsement was made on the agreement extending time for performance of the agreement till 10.4.1979.
As per the terms of the agreement the plaint schedule property is to be delivered to the plaintiff at the time of registration of the sale deed. But the plaintiff promising that he would perform his part of the agreement within the extended time and in the meanwhile he wanted to make some minor repairs requested that he might be permitted to enter the plaint schedule property for carrying out minor repairs to which the 5th defendant agreed. It was only for that purpose the plaintiff got into possession of the plaint schedule property but not in pursuance of the agreement of sale or in any other capacity. It is true the plaintiff made the repairs etc., mentioned in paragraph 7 of the plaint spending a sum of Rs. 4,800/-.
The allegation in paragraph 8 of the plaint that the plaintiff has been ready and willing to perform his part of the contract, that he made ready the balance of the sale consideration even by 8.4.1979 and requested the defendants to receive the same and execute the registered sale deed in pursuance of the agreement are not at all true. The plaintiff never made any such request at any time prior to the issue of the registered notice dated 4.6.1979. Hence, as per the terms of the agreement on account of the default of the plaintiff, the said agreement stood cancelled on and from 10.4.1979 and became unenforceable. These defendants did not issue any reply as the plaintiff was aware that they joined in the execution of the said agreement of sale only nominally at the request of the plaintiff and also as the agreement of sale became cancelled and unenforceable from after 10.4.1979. These defendants also submit that the plaintiff is not entitled to file the suit for specific performance on the basis of a cancelled agreement of sale.
It is true that some creditors filed suits and got attached the plaint schedule property. The total amount claimed under those suits will be around Rs. 2,00,000/-.
As per the terms of the agreement, the plaintiff being at default in performing his part of the contract, the plaintiff is not entitled to claim Rs. 5,000/- which stood forfeited on 10.4.1979. The plaintiff effected repairs for his own sake in the hope that he would be able to complete the transaction as per the agreement and as he committed default, he is not entitled to seek recovery of the sum of Rs. 4,800/- spent by him. The plaintiff''s possession of the suit property was only permissive for the specific purpose of doing certain repairs and the plaintiff is, therefore, not entitled to be in possession of the same or use it was owner thereof. The plaintiff contrary to the said purpose and understanding has been carrying on his own business in the suit building for which he is liable to pay damages for use and occupation, for recovery of which separate action would be taken. The plaintiff has to deliver back possession of the plaint schedule property for which separate proceedings will be taken.
In any view of the matter the plaintiff is not entitled to ask these defendants to have the attachments over the suit property raised and to make out good title to the property. The attachments are subsequent to the suit agreement of sale.
In any view the plaintiff is not entitled to the relief of specific performance or refund of the sum of Rs. 5,000/- or interest thereon. The plaintiff can, at best, claim a sum of Rs. 4,800/- spent for the repairs but not interest thereon. As stated above, the plaintiff is liable to pay damages for use and occupation of the suit property from 15.2.1979 and deliver back possession of the suit property to the 5th defendant.
The fifth defendant in his written statement pleaded as hereunder.
The plaint schedule property was originally the joint family property of the 1st defendant and his brother, late Venkata Rama soma Subbarao; and in the family partition between them and other members, the same fell to the share of the 1st defendant and late Subbarao. He died on 2.12.1969. While he was alive, himself, the 1st defendant and two others were partners of Kanigolla Ramachandrarao Firm. In the firm by name and style of "K.V.R.S. Subbarao Firm", late Subbarao and the 1st defendant alone were partners. After the death of Subbarao, his wife (the 4th defendant herein) was taken as partner of the said firm. This defendant has nothing to do with the said firms or other alleged liabilities.
After the death of Subbarao, the properties were divided between the 1st defendant and his sons and the legal representatives of late Subbarao. A memorandum evidencing the prior partition was executed on 8.4.78 between the late defendant and son and the sons of late Subbarao. Defendants 4 and 8 relinquished their share in the properties of late Subbarao. In the said partition, the plaint schedule property fell to the exclusive share of this defendant and he has been in possession and enjoyment of the same as the absolute owner thereof.
This defendant is not aware if the firms mentioned supra were heavily indebted and the creditors were pressing for the repayments of their respective loans. This defendant is not liable to discharge any debts owing by the aforesaid firms. This defendant has never been partner of the said firm, and there is no need for this defendant to sell away the plaint schedule property to the plaintiff as alleged. After the death of his father Subbarao, this defendant came under the protection of his brother, the 1st defendant. Being of an young age, he has been following the dictates of the 1st defendant in all matters. The 1st defendant was practically managing the affairs of the firms after the death of Subbarao. This defendant did not execute the suit agreement of his own free volition. He 1st defendant got the agreement to Eluru and obtained the signatures of this defendant, exercising undue influence upon him. He was not made aware of the nature of the transaction. He signed the agreement on account of his implicit faith in the 1st defendant. This defendant did not receive Rs. 5,000/- as advance or any part thereof on the date of agreement from the plaintiff. The agreement is not true, valid and binding on this defendant.
The allegation in para C of the plaint that this defendant was not in a position to give vacant possession as per the stipulation in the suit agreement of sale and that he requested the plaintiff to extent time is not true. The plaintiff was not ready and willing to perform his part of the contract within the time stipulated under the agreement of sale or subsequent to the period of the alleged extension of time. Time was the essence of the contract and the latches on the part of the plaintiff disentitles him from claiming the equitable relief of specific performance. The endorsement as respects the extension of time on the suit agreement of sale is vitiated for the circumstances stated supra and the same is not valid and binding. Even assuming otherwise, this defendant is entitled to forfeit the advance amount as per the terms embodied in the suit agreement of sale.
This defendant did not deliver vacant possession of the plaint schedule properties to the plaintiff or about 15.3.1979 as alleged. The plaintiff did not effect any repairs to the tune of Rs. 4,800/- by fixing roll shutters, girder, stair case etc. Assuming without admitting that the plaintiff effected the suit repairs, this defendant cannot be made liable to reimburse the plaintiff on this score.
It is not true that the plaintiff made ready the balance of sale consideration even by 8.4.1979. The plaintiff did not request this defendant to execute a sale deed in terms of the suit agreement of sale. The recitals in the notice issued by the plaintiff dt.4.8.79 are not true and valid. In so far as this defendant is concerned, there is no consideration for the suit agreement of sale.
This defendant is not aware if the plaint schedule property was attached before judgment in the suits filed by creditors against the aforesaid firms. The alleged attachment is illegal and void as none of the defendants therein have even a semblance of a right in respect of the plaint schedule property.
This defendant is not liable to return the alleged advance of Rs. 5,000/- or any interest thereon as claimed in the plaint. The rate of interest claimed is excessive. The plaintiff is not entitled to the primary relief of specific performance or the alternative relief or refund of purchase money from this defendant.
The plaintiff has no cause of action against this defendant. He is not entitled to any relief as against this defendant.
Defendants 4 and 8 have no interest in the subject matter of the suit. They have been needlessly impleaded. They are not necessary or proper parties to the suit. Defendants 5 and 6 also have no interest in the plaint schedule property in view of the partition as submitted supra. The suit is bad for mis-joinder of parties.
A memo was field on behalf of defendants 4, 6, 7 and 8 adopting the written statement of the fifth defendant.
The issues settled by the trial Court are as under.
Whether the suit agreement dated 14.10.1978 stood cancelled and became unenforceable on and from 10.04.1979?
Whether the plaintiff is entitled for the relief of specific performance prayed for?
Whether the plaintiff is entitled for the alternative relief of refund of any amount?
To what relief?
Oral and documentary evidence adduced by the parties.
Appendix of Evidence Witnesses Examined. For Plaintiff:
P.W.1. Grandhi Subbarayudu. P.W.2. Mannepalli Gavarraju. P.W.3. Muthu venkata Ratna Vaikunta Rao. P.W.4. Kollepara Venkateswarulu.
For defendants:
D.W.1. K.Ramanga Soma Lakshmana Rao (D5). D.W.2. K.V.R.S. Raghavarao. D.W.3. A.V. Sri Maha Vishnu. D.W.4. Chakka Venkata Ramakrishna Sastrulu.
Documents Marked
For Plaintiff:
Ex.A1. 14.10.1978 Sale Agreement executed by defendants in favour of the plaintiff.
Ex.A2. 16.01.1979 Endorsement on Ex.A1 on the reverse on page No.1.
Ex.A3. 14.10.1978 Entries in the day book at pages 118 for the advance of Rs.5,000/-.
Ex.A4. 31.03.1979 Entries at pages 222 in the day book for Rs.4,800/- paid to the contractor.
Ex.A5. 15.05.1979 Postal acknowledgment.
Ex.A6. 17.05.1979 do
Ex.A7. 14.05.1979 do
Ex.A8. 17.05.1979 do
Ex.A9. 08.05.1979 Returned R.P. cover with acknowledgement due.
Ex.A10. 08.05.1979 Returned R.P. cover with acknowledgement due.
Ex.A11. 19.06.1979 Pass Book No.3039 of Bank of India, Tadepalligudem showing the deposit. For Defendants:
Ex.B1. Counter agreement to Ex.A1.
Ex.B2. 08.04.1978 Memorandum of Firm Registration.
Ex.B3. Certificate.
Ex.B4. 30.03.1982 Tax Receipt in the name of KVRS Subba Rao.
Ex.B5. 02.04.1981 Tax Receipt issued in favour of KVRS Subba Rao.
Ex.B6. 16.07.1980 do
Ex.B7. 19.03.1980 do
Ex.B8. 18.06.1980 do
Ex.B9. 02.04.1981 do
Ex.B10. 16.06.1980 do
Ex.B11. 30.03.1982 do
Findings recorded by the trial Court in nut shell.
Learned Subordinate Judge, Eluru, on appreciation of the oral and documentary evidence available on record, while answering issue No. 1, recorded reasons at paras-7, 8, 9, 10, 11 and 12 and came to the conclusion that as can be seen from Ex.A1, time was not made the essence of contract and only at the instance of the defendants, the time was extended as per Ex.A2 endorsement and no notice was issued by any of the defendants making the time as essence of contract, hence, it cannot be said that the suit agreement stood cancelled and became enforceable. While answering issue No. II, learned Subordinate Judge recorded reasons at paras-13, 14, 15 and 16 and came to the conclusion that the plaintiff had been always ready and willing to perform his part of the contract as can be seen from the oral and documentary evidence available on record and hence, the plaintiff is entitled to the relief as prayed for. Further reasons were recorded while answering issueNos.3 and 4 at paras-17 and 18 and ultimately, the suit was decreed with costs. Aggrieved by the same, the present appeal had been preferred.
Points for Determination:
Whether the findings recorded by the trial Court while granting relief of specific performance in favour of respondent/plaintiff in the light of the oral and documentary evidence available on record to be confirmed or to be set aside in the facts and circumstances of the case.
If so, to what relief the parties would be entitled to.
Point No. 1:
For the purpose of convenience, the parties hereinafter would be referred to as plaintiff and defendants as shown in O.S. No. 146 of 1979.
The plaintiff filed the suit praying for the relief of specific performance. The same was resisted by the respective defendants and the respective pleadings of the parties already had been referred to above. The issues settled by the trial Court also had been specified supra. The evidence available on record and the findings recorded by the trial Court in nutshell already had been also specified supra. The principle question, which had been argued in elaboration, is that in the light of Exs.A1 and A2 since the time being the essence of contract and though the defendants performed their part of the contract of effecting delivery since within the time stipulated, the plaintiff inasmuch as was not ready and willing to perform his part of the contract, the relief for specific performance granted by the trial Court cannot be sustained. No doubt the oral and documentary evidence available on record had been pointed out and submissions in elaboration had been made by the counsel representing the parties.
It is the case of the plaintiff that in the partition of the family properties between first defendant and his brother, late Venkata Rama Subba Rao and another, the property had fallen to the share of first defrendant late Venkata Rama Subba Rao and while they were enjoying the property jointly, the said Venkata Rama Subba Rao died and defendants 4 to 5 became heavily indebted in the business, which they had been running in the names of Ramachandra & Co., Eluru and Subba Rao & Firm. As the creditors are pressing for payments of debts, the defendants agreed to sell the property and the plaintiff agreed to purchase the property. The subject matter of the suit for Rs. 46,000/- (Rupees forty six thousand only) as an agreement of sale dated 14.10.1978 was executed by the defendants in favour of the plaintiff. The said agreement of sale had been marked as Ex.A1. Under the terms of agreement, the plaintiff paid Rs. 5,000/- (Rupees five thousand only) as advance and balance of Rs. 41,000/- (Rupees forty one thousand only) to be paid within three months and ten days i.e. on 23.01.1979 and a sale deed to be obtained and if the plaintiff commits default, the agreement shall stand cancelled and the plaintiff is also not entitled to a sum of Rs. 5,000/-, which he paid as advance and in the event of defendants committing default in executing or registering a sale deed, the defendants also be liable for the losses, which may be incurred by the plaintiff and the defendants should be delivered the property at the time of registering the sale deed. As the defendants could not be delivered the property at the time of registration of sale deed and inasmuch as they were not in a position to execute as agreed on 16.01.1979, they requested the plaintiff for further time for performance of the agreement to 10.04.1979 i.e., 77 days for which the plaintiff agreed and endorsement was also written on the agreement of sale. The defendants obtained vacant possession and delivered possession of the property to the plaintiff on or before 15.03.1979. The plaintiff spent Rs. 4,807/- (Rupees four thousand eight hundred and seven only) towards repairs of the buildings and he has been in possession of the property since then. It is also his case that the plaintiff has been ready and willing to perform his contract and he had been ready with his balance on 08.04.1979 and requested the defendants to receive the same and register the sale deed. But, however, the defendants had been postponing the same. In such circumstances, the plaintiff was left with no other option except to issue a notice on 04.06.1979 calling upon the defendants to receive the balance of sale consideration and execute a registered sale deed. Defendants 1 to 5 and 7 received notices and defendants 6 and 8 evaded to receive the notices. The defendants has not chosen to give any reply and for the reasons best known, they were not willing to execute the sale deed, Ex.A1. In such circumstances, the plaintiff had no other option except filing a suit praying for relief of specific performance. It is also his case that some creditors filed suit and got the properties attached before the judgment and such attachment over the property also to be raised. Defendants 1 to 3 filed written statement admitting the earlier partition and further, it was stated that after the death of Venkata Rama Subba Rao on 02.12.1969, defendants 1 to 12 partitioned their property on 19.03.2008 and defendants 4 and 8 relinquished their shares in favour defendants 5 to 7 and the shares as per the partition had been taken possession and the plaint schedule property had fallen to the share of fifth defendant. It is also stated that these defendants joined executed of the said agreement of sale. As the plaintiff requested them to join in the absence of a registered partition deed, the terms of agreement of sale are true. It is a fact that the plaintiff paid a sum of Rs. 5,000/- and an endorsement was made extending time till 10.04.1979. As per the terms of the agreement, schedule property is to be delivered at the time of registration of the sale deed. But, however, plaintiff promising that he would perform his part of contract within the extended time and in the meanwhile, he wanted to make some minor repairs and requested them to permit him to carry on the repairs to which the fifth defendant agreed. It is only for this purpose, the plaintiff was to be in possession of the property and not in terms of agreement of sale or in any other transaction. However, it is admitted that the plaintiff made certain repairs by spending a sum of Rs. 4,800/- (Rupees four thousand eight hundred only), but he was never ready and willing with the balance of amount and the plaintiff never made any request prior to the issuance of registered notice in his favour. Hence, the agreement stood cancelled on 10.04.1979 and it became unenforceable. The defendants had not chosen to give any reply. As the agreement of sale stood cancelled and became unenforceable after 10.04.1979, the advance amount of Rs. 5,000/- (Rupees five thousand only) stood forfeited by 10.04.1979. Hence, the plaintiff is not entitled to recover the said amount or Rs. 4,800/- (Rupees four thousand eight hundred only) spent by him for the purpose of repairs. Thus, the possession is only permissive. The fifth defendant filed written statement pleading that relatively it is joint family property by the first defendant and his brother, late Venkata Rama Subba Rao and he died on 02.12.1969 while he was alive, himself and two others were partners in the firm. After the death of Subbarao, the four defendant herein, his wife, had been taken as partner of the said firm. This defendant has nothing to do with the said firms or their alleged liabilities. After the death of Subba Rao, the properties were divided between the first defendant and the legal representatives of late Subba Rao. A memorandum evidencing prior partition was executed on 08.04.1978 between the first defendant and sons of late Subba Rao. Defendants 4 and 8 relinquished their share in the properties of late Subbarao. In the said partition, the plaint schedule property fell to the exclusive share of this defendant and he has been in possession and enjoyment of the same as the absolute owner thereof. This defendant is not aware if the firms were heavily indebted and the creditors were pressing for repayment of loans. After the death of his father Subbarao, this defendant came under the protection of his brother, the first defendant. Being of an young age, he has been following the instructions of the first defendant in all matters. The first defendant was managing the affairs of the firms after the death of Subbarao. This defendant did not execute the suit agreement of his own free volition. The first defendant brought him to Eluru and obtained his signature. He was not made aware of the nature of the transactions. He signed the same. This defendant did not receive Rs. 5,000/- (Rupees five thousand only) as advance or in part thereof. This defendant did not deliver vacant possession to the plaintiff on or about 15.03.1979 as alleged. The plaintiff did not effect any repairs to the tune of Rs. 4,800/- (Rupees four thousand eight hundred only).
P.W.1 in detail deposed the averments made in the complaint. Apart from the evidence of P.W.1, the evidence of P.Ws.2 to 4 is also available on record. As already referred to above, Ex.A1 is the agreement of sale dated 14.10.1978. Ex.A2 is the endorsement on Ex.A1 dated 16.01.1979. Exs.A3 to A11 also had been relied upon. Ex.A3 is the entry in the Day Book about advance and Ex.A4 is the entry in the Day Book about amount spent towards repairs. Exs.A5, A6, A7 and A8 are the postal acknowledgments and Exs.A9 and 10 are the returned R.P. covers with acknowledgment due. Ex.A11 is pass book bearing No. 3039 of Bank of India, Tadepalligudem, in which certain statements were made. As this evidence, the evidence of D.Ws.1, 2, 3 and 4 is available on record and Exs.B1 to B11 had been relied upon. Exs.B4 to B11 are the tax receipts. Ex.B1 is the counter agreement to Ex.A1. Ex.B2 is the memorandum of firm registration. Ex.B3 is the certificate.
In para-7 of the written statement filed by the fifth defendant, it is stated as hereunder.
It is not true that the plaintiff made ready the balance of sale consideration even by 8.4.1979. The plaintiff did not request this defendant to execute a sale deed in terms of the suit agreement of sale. The recitals in the notice issued by the plaintiff dt.4.8.79 are not true and valid. In so far as this defendant is concerned, there is no consideration for the suit agreement of sale.
It is no doubt true that this notice dated 04.08.1979 had not been marked. The fact that a notice had been issued and the fact that there was no reply to this notice, these aspects are not in serious controversy. No doubt, the counsel appearing for appellant made certain submissions that inasmuch the said notice had not been placed on record, the contentions of the said notice being unknown. The mere fact that the existence of such notice had been admitted may not seriously alter the situation. Be that as it may, certain submissions also were made relating to the relationship between the witnesses examined by P.W.1.
P.W.1 deposed about the defendants running the business and the defendants incurring loss and how they wanted to dispose of the properties and the defendants offered to sell the plaint schedule property for Rs. 46,000/- (Rupees forty six thousand only) and he gave advance of Rs. 5,000/- (Rupees five thousand only) on 14.10.1978. It was agreed that the balance to be paid before 21.03.1979 and the sale deed to be registered. They executed agreement in his favour with the above conditions as per Ex.A1. This witness also deposed that K.Vijaya sekhar Rao, S/o.K.Raja Rao was the tenant in that shop and he also attested Ex.A1. On 16.01.1979, the agreement had been extended till 10.04.1979. All the defendants, except D6, signed the said agreement. D5 signed on behalf of D6. If the shop was vacated, which was given possession to him on 15.02.1979, he got it repaired by spending Rs. 4,800/- (Rupees four thousand eight hundred only). All these amounts were noted in his accounts books maintained for business purpose. Ex.A2 is the endorsement made in Ex.A1-sale deed. Exs.A1 and A2 read as hereunder.
The recitals made in Exs.A1 and A2 being self explanatory need not be further elaborated. P.W.1 also deposed about Ex.A3, the entry made in the day book dated 14.10.1978 and Ex.A4, the entry made in the day book dated 31.03.1979, which relate to Rs. 5,000/- (Rupees five thousand only) and Rs. 4,800/- (Rupees four thousand eight hundred only) respectively. This witness also deposed that he was ready and willing to perform his part of contract and ready with balance of consideration before 10.04.1979 and requested them to execute sale deed. But they did not come forward for registration. Hence, he got issued a notice through his counsel. Except D6 and D8, rest received notices. Exs.A5 to A8 are acknowledgments and Exs.A9 and A10 are the returned notices. He deposited the balance consideration in the Bank of India, Tadepalligudem. Ex.A11 is the pass book. He has been ready and willing to take the sale deed. He learnt that there were attachments on this property. He does not know when these attachments were affected. In such circumstances, he filed the suit for specific performance. This witness, in his cross examination deposed that initially, it was agreed to get a sale deed registered by 29.07.1979 by paying Rs. 40,000/- (Rupees forty thousand only) and to give possession on the date of registration. It is not mentioned in Ex.A1 that they would get evicted by K.Vijaya Sekhar Rao. It is not mentioned in Ex.A1 that they would give him vacant possession. If he did not get the sale deed registered by paying Rs. 41,000/- (Rupees forty one thousand only), the agreement stands cancelled and P.W.1 has to loose the earnest money. He would not ready with hard cash by 21.03.1979. This witness also deposed that by the date of Ex.A2 also, possession was not delivered. Ten or twenty days after Ex.A2, possession was delivered to him. Even by then, he did not pay any other amount. No doubt, this witness deposed that it is incorrect to say that he was simple permitted to attend for the repairs. Again he says that he was simply permitted to get the repairs done. By 16.01.1979, he was not having possession of ready cash of Rs. 41,000/- (Rupees forty one thousand only) at any time, but he can secure it by any time. There is no interest clause to be paid for Rs. 41,000/- (Rupees forty one thousand only). He deposited the amount in the bank when the suit was filed. This witness also deposed that it is incorrect to say that as he could not fulfill the conditions, he lost the advance as per the terms of Ex.A1. This witness not doubt admitted that all conditions in Ex.A1 were written with an intention to be acted upon and he had not given any notice prior to 10.04.1979 stating about his readiness with the money. Ex.B1 is the counter part of Ex.A1. The suggestions put to this witness had been denied.
P.W.2 is the attestor of the endorsement-Ex.A2. P.W.2 deposed about the endorsement Ex.A2 and also deposed about certain other facts. The evidence of P.Ws.2, 3 and 4 had been relied to show that P.W.1 approached them for financial help at the relevant point of time and they readily agreed to assist him in this regard with supply of necessary funds as and when required. In nutshell, this is the evidence available on record. The evidence of P.W.1 is well supported by the evidence of P.W.2, who is also an attestor of Ex.A2. As against this evidence, D.W.1, the first defendant, deposed about the relationship between the defendants on the death of his brother and the separation and partition of the properties and the execution of the memorandum of partition dated 08.04.1978. Ex.B2 and the suit property fallen to the share of D5. This witness deposed that Ex.A1 was executed by them in favour of P.W.1 for Rs. 46,000/- (Rupees forty six thousand only) and he received a sum of Rs. 5,000/- (Rupees five thousand only as advance. This witness also deposed that because P.W.1 insisted all of them to execute Ex.A1, since Ex.B2 is not registered at all, they executed Ex.A1. It was agreed to hand over possession on the date of registration of sale deed. K.Vijaya Sekhar Rao was the then tenant in the suit property. This witness also deposed that they did not agree to evict the tenant and give possession to P.W.1. They simply agreed to give possession. D.W.1 also deposed that by 21.03.1979, the plaintiff must pay balance of consideration and take sale deed. They were ready by then to execute sale deed. But the plaintiff was not ready to take the sale deed. P.W.1 did not demand them by 21.03.1979 that he was ready with balance of consideration and did not ask them to come for registration. It was agreed that in case of default Ex.A-1 is deemed to have been cancelled and he must forfeit the advance. They executed Ex.A-2 extending time at the request of P.W.1. Even then P.W.1 was not ready with the balance of consideration of Rs. 41,000/- since he did not ask them to come for registration.
D.W.1 also deposed that they gave permission to P.W.1 to get repairs done and as per the conditions of agreement they never gave possession to P.W.1. P.W.1 effected repairs by spending Rs. 4,800/- and hence they need not execute sale deed, since it should be taken that the agreement is deemed to have been cancelled because of his default and the advance also to be forfeited. This witness also deposed that they need not give Rs. 4,800/- incurred for repairs. D.W.1 also further deposed that he got issued registered notice and prior to that he did not demand. As the agreement was cancelled, they had not given any reply. He is the partner of K.V.R. & Co., and Kanigalla Ramachandra Rao and Co. D-5 and his brothers are not partners in those companies. The advocate for D-4 to D-8 gave him notice to produce firm registration certificate for K.V.R. Subba Rao and K. Ramachandra Rao and Co. Ex.B-3 is the firm registration certificate.
In cross-examination this witness deposed about the business and debts of Ramachandra Rao and Co., and K.V.R. Subba Rao & Co. This witness also deposed that the sons of K.V.R. Subba Rao have no necessity to sell the property. Their signatures were obtained at Eluru and only to discharge the debts they sold the property. The sons of K.V.R. Subba Rao signed Ex.A-1 and Ex.A-2 willingly and they did not told them about D.W.1 permitting P.W.1 to get the repairs done. This witness also deposed that by the date of Ex.A-1 partition was already effected. During 1972 and 1973 differences started between them. This witness also deposed that it is incorrect to say Ex.A-1 was executed at Tadepalligudem and signed there only. In the cross-examination this witness asserted that P.W.1 did not request them to execute sale deed within time and they orally demanded them to take sale deed and he does not remember the date of demand. It is not mentioned in the written statement. They demanded only once to take sale deed before due date. They did not give any notice to that effect. D.W.1 gave shop to P.W.1 for repairs. Because D-5 does not know about the affairs he did not tell him. This witness also deposed that it is incorrect to say that he did not give the shop only for repairs. Even after due date he did not give any notice to hand over possession to him.
D.W.2 is the 5th defendant in the suit. This witness deposed that D-4 is his mother, D-6 and D-7 are brothers and D-8 is his sister and he was aged 16 years by the date of death of his father. D.W.1 was looking after the affairs and he did not independently enter any transaction and he has no connection with both the firms. D-4 was taken as partner after the death of his father. In March 1978 they separated their properties by partition. Ex.B-2 is the memorandum of partition. D-4 and D-8 did not take any share. The suit schedule property fell to his share. He is paying taxes to his property. Exs.B-4 to B-11 are tax receipts. He has no necessity to sell the property. At the instance of D.W.1 this witness and his brothers signed in Ex.A-1 at their house. He was not told about the sale of the property. He simply signed in Ex.A-2 as directed by D.W.1. They did not receive any amount much less Rs. 5,000/- as advance. No notice was given to him by P.W.1. He does not know about the possession given to P.W.1 and his spending Rs. 4,800/- for repairs. On receipt of notice he questioned D.W.1 and he said that he would settle. This witness also deposed that they need not execute sale deed in pursuance of Ex.A-1. This witness also in cross-examination deposed that after partition he did not see the plaint schedule property and he does not know if any income is got from that property. Ex.A-1 contains his signature. He signed it on his behalf and as power of attorney holder for D-6. He did not enquire D.W.1 before signing Ex.A-1. D-4, D-7 and D-8 also signed. He did not enquire as to why they signed in Ex.A-1. He did not read Ex.A-1. Nobody objected him from reading it. Subsequently he learnt about the advance of Rs. 5,000/-. He did not give any notice about that Rs. 5,000/-. D.W.1 said that he would settle it. He did not read Ex.A2. In that also all of them signed. He received registered notice. He did not give any reply because he does not know the worldly affairs. This witness also deposed that he studied B.Com.
D.W.3 was examined relating to Ex.B-2. This witness deposed that he had attested Ex.B-2 and further deposed that this property had fallen to the share of D-5.
D.W.4 deposed that he simply signed Ex.B-2 and he does not know the contents of Ex.B-2.
In the affidavit filed on behalf of the respondent-plaintiff it is stated that the suit O.S. No. 146 of 1979 was decreed on 08.10.1982 directing the appellants to execute sale deed within three months from the date of decree and the present appeal appear to have been filed in the month of January 1983 and was numbered as A.S. No. 938 of 1983. Further it is averred that subsequently a regular sale deed was executed by the learned Subordinate Judge, Tadepalligudem on 25.9.1985 and it was numbered as Registered No. 4984/1985. Later on, main appeal was disposed of on merits by this Court on 28.02.1986 permitting the appellants herein to withdraw the balance of sale consideration lying in deposit to the credit of the suit O.S. No. 146 of 1979. It is also averred that while matters stood thus, C.M.P. No. 1745 of 2008 was filed by the appellant stating that they had no knowledge of disposal of the appeal and prayed for setting aside the judgment made in the appeal and this Court on 17.11.2008 allowed the application by recalling the decree made in A.S. No. 938 of 1983 and specifically it is stated that even by that date the property was transferred and sold to a third party i.e., Nakka Rama Devi under a registered sale deed vide Document No. 5013/2008 and this was preceded by an agreement of sale. These are the subsequent events, which had been placed before this Court by way of affidavit.
Fifth appellant, denying certain averments, filed a counter-affidavit. It was stated that the main appeal was disposed of on 28.02.1996 permitting the appellants to withdraw the balance of sale consideration lying in deposit to the credit of O.S. No. 146 of 1979 and that the rights of the third parties would be effected, since the property was subsequently transferred to Nakka Rama Devi are absolutely incorrect. It is also stated that the appellants are not aware of the fact that deposit of balance of sale consideration said to have been made. Further, while dismissing the appeal on 28.02.1996 this Court never made any observation permitting the appellants to withdraw the money in deposit. So far as the sale deed obtained by the respondent is concerned, the same is always subject to final outcome of the present appeal. Apart from that, if any, subsequent sales were effected by the respondent creating third party rights in the plaint schedule property, the said transactions are hit by the doctrine of lis pendens as contemplated u/s 52 of the Transfer of Property Act.
The agreement of sale Ex.A-1 was executed by defendants agreeing to sell the plaint schedule property and on the date of execution of Ex.A-1 an advance of Rs. 5,000/- had been taken is not in serious controversy. No doubt, D.W.2 pleaded ignorance and had thrown the blame relating to the receipt of consideration by D.W.1 and the other defendants and had taken a stand that though this property had fallen to his share i.e., D.W.2, he had not received any consideration, but acted at the dictates of D.W.1. It was also agreed that the balance of amount to be paid on 23.01.1979 and the registered sale deed to be executed by the defendants at the expense of the plaintiff. As per the evidence available on record by the date of Ex.A-1 the plaint schedule property was in possession of a tenant K. Vijaya Prakasa Rao. In Ex.A-1 it had been specified that possession to be delivered to the plaintiff on the date of registration. However, it is also not in controversy that within the time as specified in Ex.A-1 for certain reasons possession could not be taken from the tenant and, hence, the time was further extended by 77 days agreeing to hand over possession by 10.4.1979 by getting the tenant vacated. The said endorsement dated 10.01.1979 marked as Ex.A2 and the contents thereof also are not put into serious controversy.
No doubt, there is some evidence available on record relating to the oral demands said to have been made once by D.W.1 even prior to the expiry of time. It is pertinent to note that D.W.1 deposed that as though delivery of possession may not mean actual delivery of possession and the fact the tenant was in possession of the property at the relevant point of time, though it is not in serious controversy, D.W.1 explained it in a particular fashion, may be, with a view to take a stand that what had been agreed upon was only symbolic delivery though specifically had not been deposed by D.W.1. The reason for taking such a stand by D.W.1, it may be best known to D.W.1. It is again pertinent to note that though delivery of possession subsequent thereto is not in controversy, the specific stand taken by D.W.1 is that it may have to be taken as permissive possession, only for the purpose of effecting repairs and it cannot be an admission as though possession had been taken in pursuance of either Ex.A-1 or Ex.A-2. This is yet another crucial aspect to be taken into consideration.
No doubt, the evidence of D.Ws.3 and 4 is available apart from the evidence of D.W.1 and D.W.2 relating to the fact that by virtue of Ex.B-2 this property had fallen to the share of D.W.2. No doubt, D.W.1 had taken a stand that D.W.2 as such had not received any portion of this advance amount i.e., Rs. 5,000/-, but the fact remains that even in the evidence of D.W.2, D.W.2 deposed that because D.W.1 was looking after the affairs of the family and he was not aware of several facts and at the dictates of D.W.1 he had signed. The fact of these parties willingly signed both Ex.A-1 and Ex.A-2, this aspect also appears to be not in serious controversy.
It is the evidence of P.W.1 that he has been making oral demands for execution of sale deeds and he is ready and willing to perform his part of contract and no doubt P.W.1 deposed that he was not having ready cash, but for the readiness and willingness to perform his part of contract and how he could have raised funds at the relevant point of time, the evidence of P.W.2, P.W.3 and P.W.4 had been adduced. It is no doubt true if the facts are carefully examined the parties began throwing blame on one another only after the lapse of time. It is also true that there is no material available on record to show that P.W.1 had specifically done something prior to the expiry of the time. It is also true that strongly Ex.A-11 had been relied upon. It is needless to say that Ex.A-11 is subsequent to the stipulated time.
Now the principal question to be considered is that in the light of the facts and circumstances i.e., the recitals made in Ex.A-1 and Ex.A-2 and also in the light of the evidence of P.W.1, P.W.2, P.W.3, P.W.4 and D.W.1, D.W.2 and Ex.A-11 whether the stand taken by the appellants the time being the essence of contract since within the time though delivery had been effected, respondent-plaintiff was unable to perform his part of contract, the relief of specific performance to be negatived or in the light of Ex.A-2 inasmuch as normally time since is not essence of contract in the case of immovable properties, the findings recorded by the trial court to be confirmed.
For the purpose of appreciating this question, the recitals made in Ex.A-2 and Ex.A-3 may have to be glanced at. The said documents had been referred to supra and the recitals being self-explanatory need not be repeated again. Here itself it may be mentioned that though elaborate submissions were made relating to the performance of their part of obligation of delivery of possession in the light of Ex.A-2 by the defendants, D.W.1 specifically deposed that what had been recited in Ex.A-1 is not relating to actual delivery and further deposed that even actual delivery effected to be taken as permissive delivery only for the purpose of permitting P.W.1 to carry on repairs and not thereto. This is the specific stand taken by D.W.1.
In the backdrop of conduct of D.W.1 who had been looking after the affairs now it is to be seen on appreciation of oral evidence available on record apart from the documents relied upon by the parties whether the stand taken by the appellants to be accepted or the stand taken by the respondent-plaintiff to be accepted.
In Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Another, relying upon Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, the Apex Court observed as hereunder.
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.
In Unni Madhavan Nair v. Kamalakshy AIR 1993 Ker 357 a learned Judge of Kerala High Court observed as hereunder.
Grant of specific performance of a contract is the ordinary rule. Its denial should be only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief ( Prakash Chandra Vs. Angadlal and Others, ). The delay in this case occurred only due to the refusal of the defendant to perform his obligations under the contract Ext. A1. The plaintiff had issued his notice Ext. A2 as early as on 2/06/1978 within the period fixed for performance. But apart from raising some untenable contentions, defendant was not prepared to fulfill his obligations. He delayed matters. Even in the suit, he raised contentions which were untenable. It was for these reasons, attributable to the conduct of the defendant that the sale got delayed. It may be true that prices have gone high by this time. But there is nothing to indicate that there was any steep hike in the prices from the date of Ext. A1 and the filing of the suit, assuming that that was a relevant factor (apart from the assertions of the defendant). It will be a perverse exercise of discretion to deny specific performance in such circumstances. The discretion has been rightly exercised by the lower appellate Court to decree specific performance.
Apart from the evidence of P.W.1 there is evidence of P.W.2, P.W.3 and P.W.4 who had categorically deposed about P.W.1 approaching them for assisting P.W.1 with financial help. In the light of this evidence of P.W.2, P.W.3 and P.W.4 and also in the light of close proximity of dates and if Ex.A-11 to be taken into consideration, the conduct of P.W.1 would definitely go to show that P.W.1 always had been anxious to further proceed with the transaction. It is no doubt true that prior to this date as already specified supra the assertion of P.W.1 relating to making of oral demands and assertion of D.W.1 otherwise that he also made a demand only at one point of time, demanding P.W.1 to take sale deed this evidence is also available on record.
In Syed Dastagir Vs. T.R. Gopalakrishnasetty, the Apex Court at para-9 observed as hereunder.
So whole gamut of issue raised is, how to construe a plea specially with reference to Section 16(c) and what are the obligations which the plaintiff has to comply with reference to his plea and whether the plea of the plaintiff could not be construed to conform to the requirement of the aforesaid Section, or does this section require specific words to be pleaded that he has performed or has always been ready and is willing to perform his part of the contract. In construing a plea in any pleading, Courts must keep in mind that a plea is not an expression of art and science but an expression through words to place fact and law of one''s case for a relief. Such an expression may be pointed, precise, some times vague but still could be gathered what he wants to convey through only by reading the whole pleading, depends on the person drafting a plea. In India most of the pleas are drafted by counsels hence aforesaid difference of pleas which inevitably differ from one to other. Thus, to gather true spirit behind a plea it should be read as a whole. This does not distract one from performing his obligations as required under a statute. But to test, whether he has performed his obligations one has to see the pith and substance of a plea. Where a statute requires any fact to be pleaded then that has to be pleaded may be in any form. Same plea may be stated by different persons through different words then how could it be constricted to be only in any particular nomenclature or word. Unless statute specifically require for a plea to be in any particular form, it can be in any form. No specific phraseology or language is required to take such a plea. The language in Section 16(c) does not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract. So the compliance of "readiness and willingness" has to be in spirit and substance and not in letter and form. So to insist for mechanical production of the exact words of a statute is to insist for the form rather than essence. So absence of form cannot dissolve an essence if already pleaded.
Strong reliance was placed on the decision of the Apex Court in R.C. Chandiok and Another Vs. Chuni Lal Sabharwal and Others, .
The learned Counsel representing the appellants placed strong reliance on several decisions to substantiate his submissions. In Voleti Rangaiah Vs. Adapa Satyanarayana and others, the learned Judge observed as hereunder.
The ground on which the trial Court held that the plaintiff was not ready and willing to perform his part of the contract is as on the date stipulated in the agreement i.e. 25-8-1983, on which date the plaintiff was required to pay the balance of sale consideration and obtain a registered sale deed from the defendants, the plaintiff was really not ready with the amount.
Normally, time cannot be considered as the essence of the contract in respect of the agreements for sale of immovable properties. But, in this case, not only a date was fixed in the agreement for payment of balance of sale consideration but the parties had agreed that on the failure of the plaintiff to pay the balance of sale consideration on 25-8-1983, on the next day the agreement shall stand cancelled and the sale consideration already paid shall be refunded to the plaintiff after schedule property was sold away by the defendants. The conduct of the parties, as apparent from the evidence on record that both of them treated this date as crucial and adduced meticulous evidence to show that they went to Sub-Registrar''s office on that day would also show that the date fixed in the agreement of sale was considered as determinative. Considering the terms in the agreement and the conduct of the parties and exchange of notice Exs.A4 to A6, in this case, time must be held to be the essence of the contract.
However, it would appear that a specific plea on behalf of the defendants that the time was of the essence of the contract has not been taken. But, in para 2 of the written statement of defendant No. 1, a specific plea has been taken that if the plaintiff did not comply with the conditions of the agreement of sale, the same stands cancelled.
The relevant portion of the plea is extracted below :"for the failure on the part of the plaintiff, this defendant cannot be made responsible. As the plaintiff failed to comply with the conditions of the said agreement of sale, the same stands cancelled, and becomes null and void and it does not bind this defendant. "
Even if it is not specifically stated that the time is of the essence of the contract, this plea does imply that the defendant proceeded on the basis that time was of the essence of the contract.
In Smt. Sandhya Rani Sarkar Vs. Smt. Sudha Rani Debi and Others, the Apex Court observed at para 12 as hereunder.
MR. Chatterjee contended that delay on the part of the plaintiff would not disentitle her to a decree for specific performance unless it can be shown that time was of the essence of the contract or was made essence of the contract or delay on the part of the plaintiff amounted to abandonment of the contract. Our attention was drawn to Article 466, Halsbury''s Laws of England, III Edition, Vol. 36, p. 322 where it is observed that delay by a plaintiff in performing his part of the contract is a bar to his enforcing specific performance, provided that (1) time was in equity originally of the essence of the contract; or (2) was made so by subsequent notice; or (3) the delay has been so great as to be evidence of an abandonment of the contract. It was then said that in view of the finding of the High Court that time was not of the essence of the contract or was not so made, the decree could not be refused on the ground of delay. The question whether relief of specific performance of the contract for the purchase of Immovable property should be granted or not always depends on the facts and circumstances of each case and the Court would not grant such a relief if it gives the plaintiff an unfair advantage over the defendant. A few relevant facts of the case would unmistakably show that if a decree for specific performance in this case is granted it would give the plaintiff an unfair advantage over the defendant. The defendant was obliged to sell the property because it was mortgaged with Hindustan Co-operative Insurance Society Ltd. , and the mortgaged company had filed title Suit No. 10/56 for realisation of mortgage dues. The vendor then had thus a compelling necessity to sell the property to save the property from being sold at a court auction. It is in this background that we have to appreciate the conduct of the plaintiff. The stages within which the contract was to be completed were clearly demarcated and set out in the contract itself and by the end of April 1956 the transaction was to be completed. In her anxiety to see that the transaction was completed the defendant vendor put the plaintiff in possession of a substantial portion of the property even when the plaintiff had not paid a major part of the consideration. This would clearly evidence the anxiety of the defendant to successfully complete the contract within the stipulated time. To repel this submission on the flimsy ground that mortgage was not referred to in the contract for sale is to ignore the letter on behalf of the defendant dated 25th Feb. 1956 in which it is specifically stated that the title deeds of the property in question were lying in the court of Sub-Judge at Alipore in which Hindustan Co-operative Insurance Society Ltd. , had filed a suit for realisation of mortgage dues. And the procrastination on the part of the plaintiff put the defendant then in such a disadvantageous position that she was forced to sell the adjacent property 86-A, Rash Behari Avenue to Hindu Maha Sabha to raise enough money to pay off the dues in respect of the property which the plaintiff desired to purchase. If in this background the High Court took into consideration the fact that while the defendant did everything within her power to meet the requests made by the plaintiff, the latter avoided performing her part of the contract under one or the other pretext and, therefore, is disentitled to a decree for specific performance, no serious exception can be taken to this finding.
Further strong reliance was placed on the decision in Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., Wherein at paras 3, 4 and 29 the Apex Court observed as hereunder.
At the time of this agreement the first floor of the house had been let out to tenants. It was stipulated in the agreement that the vendor would hand over documents pertaining to the property in the suit together with vacant possession of the first floor by 30-9-71 and possession of the front portion at the time of registration of the sale deed. It was further agreed that the amount of Rs. 30,000. 00 would stand forfeited in favour of the vendor should the vendee fail to pay the sale consideration and get the sale deed registered within the agreed time.
Based on this agreement Chand Rani and her husband filed O. Section No. 463 of 1971 for specific performance. It was alleged Chat though the defendant (Kamal Rani) was called upon to complete the sale through various letters and notices, they evoked no response. She failed to perform her part of the contract. Since the plaintiff had failed to pay the sum of Rs. 98, 000.00 within 10 days from the date of the agreement, namely, by 6-9-71, the agreement stood annulled and the sum of Rs. 30, 000.00 stood forfeited. To this effect the defendant addressed a letter on 15-9-71. In reply to the said letter the plaintiff wrote to the defendant calling upon her to execute the sale deed offering to pay the remaining consideration at the time of the execution of the sale deed. Since the defendant failed to comply with this demand the suit came to be filed claiming specific performance of the agreement or in the alternative, damages in the sum of Rupees 1,50,00/- including the refund of Rupees 30,000/ -.
The next question is whether the plaintiff was ready and willing? The notices which were exchanged between the parties have to be looked into in determining readiness and willingness. On 10-9-71 the plaintiff would say through the registered notice that ready money was available for purchase of the property which was followed up by a telegram. The stand is taken by the defendant that within 10 days from 26-8-71, the sum of Rs. 98,000. 00 was not paid; hence, the sum of Rs. 30,000. 00 stood forfeited. The redemption of the mortgage would be done and the Income Tax clearance also would be obtained after the purchase of stamp paper. Where, therefore, the plaintiff was put on notice as to the stand of the defendant with regard to payment of Rs. 98,000.00 which again was reiterated in the notice dated 16-9-73, nothing would have been easier for the plaintiff than to pay the said sum. Instead of adopting that course what is stated in the notice dated 24-9-71 by the plaintiff is as follows:
That as per agreement, your clientess has to pay all taxes, rates, municipal taxes up to the date of registration and that the previous and other documents pertaining to the said plot No. 30, block ''k'', sanctioned plan and completion certificates from Municipal Corporation of Delhi in respect of the superstructure built on the said plot shall be handed over along with the vacant possession of first floor by 30-9-1971.
You know that 30-9-1971 is fast approaching and your clientess is still to comply with these requirements besides mentioned in para Nos. 2 and 3 of the agreement.
I, therefore, call upon you to advise your clientess to comply with the requirements well before 30-9-71 or latest by 30-9-71 and obtain the further part consideration of Rs. 98,000. 00 from my clientess.
While following the decision in Smt. Chand Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs. (7 supra) learned Judge of this Court in A.K. Lakshmipathy (died) by LR and Others Vs. Rai Saheb Pannalal Hiralal Lahoti Charitable Trust and Others, observed at para-25 as hereunder.
A plain reading of the above clauses would show that time is essence of the contract. The parties also covenanted two important aspects. One is payment of balance of sale consideration on or before 6.6.1979. A look at Clause 10 read with clauses 1, 3 and 11 would show that the payment of balance of consideration of Rs. 5,00,000/- on or before 6.6.1979 is rigid condition which cannot be relaxed. However, as per the Clause 11 it is the registration of the sale deed that can be done at any time after the purchasers make payment of Rs. 5,00,000/- and take possession of the schedule property. What the parties to Ex.A-1 intended does not admit two opinions. It only point to one condition precedent essential for the successful completion of sale transaction between first plaintiff and first defendant. The condition precedent is vendee shall have to pay balance sale consideration of Rs. 5,00,000/- on or before 6.6.1979 and take possession before taking necessary steps for registration of sale deed which can even wait as agreed to by the parties. Another important facet which can be culled out is that the first plaintiff accepts that first defendant is the full and absolute owner of the suit premises and this is mentioned in the preamble itself by referring to a sale deed and other connected sale deeds. It is rational to draw an inference from various clauses of the agreement that the purchasers entered into sales transaction "on terms settled between them" and it would be impermissible for either of the parties to the contract to turn around and attempt to introduce new conditions unilaterally as covenants of the agreement to suit their diplomatic overtures.
Further strong reliance was placed on the decision of the Division Bench in Nalamothu Venkaiya (Died) and N.J. Lalitha Vs. B.S. Neelakanta and M. Aruna, wherein at para 24, the Division Bench observed as hereunder.
It has to be further observed that the Apex Court in a recent case in Manjunath Anandappa Urf. Shivappa Hanasi Vs. Tammanasa and Others, , having referred to Pushparani Section Sundaram case (supra), held as follows at paragraphs 27 and 28.
The decisions of this Court, therefore, leave no manner of doubt that a plaintiff in a suit for specific performance of contract not only must raise a plea that he had all along been and even on the date of filing of suit was ready and willing to perform his part of contract, but also prove the same. Only in certain exceptional situation where although in letter and spirit, the exact words had not been used but readiness and willingness can be culled out from reading all the averments made by the plaintiff as a whole coupled with the materials brought on record at the trial of the suit, to the said effect, the statutory requirement of Section 16(c) of the Specific Relief Act may be held to have been complied with.
Having regard to the facts and circumstances of the case and keeping in view the decisions of this Court, as referred to hereinbefore, we are of the opinion that the plaintiff cannot be said to have even substantially complied with the requirements of law.
In view of the above observations of the Supreme Court, and in view of the facts of the present case it has to be observed that except making a plea in the plaint, the appellant has utterly failed to prove his readiness and willingness and that he has also not deposited at least the first instalment of Rs. 32.00 lakhs as agreed to be paid by the end of June 1994 even at the time of filing of the suit to seek the discretionary relief of Specific Performance, though he deposited an amount of Rs. 32.00 lakhs only at the instance of the orders of the Court which cannot be taken as a material by the Court below to come to a conclusion that the plaintiff-respondent was always ready and willing to perform his part of the contract and the said findings of the Court below is contrary to the observations made by the Apex Court in the above referred decision. L Further, even in the absence of any material on record at the trial of the suit, in addition to oral evidence, to prove that vendee was always ready and willing to perform, merely the payment of Rs. 32.00 lakhs will not enure to the benefit of the plaintiff to seek the discretionary relief u/s 16(c) of the Specific Relief Act.
In Shaik Shafiullah and another Vs. Mohammadiya Educational Society, Cuddapah and others, the Apex Court at paras 7 and 15 observed as hereunder.
The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the Court would desist from granting a decree to the plaintiff.
Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the Court. The trial Court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses considered the relevant facts and reached a conclusion. The appellate Court should not have reversed that decision disregarding these facts and, in our view, the appellate Court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract.
There cannot be any quarrel relating to the propositions laid down in the decisions referred to supra. In the light of the ratio which had been pointed out by the learned Counsel representing appellants it may have to be examined whether these decisions are applicable to the facts to the present case or these decisions are distinguishable, the light of the peculiar facts and circumstances of the present case. There is admission of D.W.2 that he is a graduate and nothing prevented D.W.2 also from going through the contents of either Ex.A-1 or Ex.A-2 as well and non-receipt of any portion of the advance amount by D.W.2 as such, cannot be said to be the fault of P.W.1 or D.W.1. It is the understanding between the defendants inter se.
This Court is not inclined to go into several of the facts relating to the alleged partition in between the family members and whether this property had fallen to the share of D.W.2, 5th defendant and 5th defendant only. In all probability when a tenant had been in possession of the property though initially time had been stipulated under Ex.A-1, since appellants-defendants were unsuccessful in seeing that the then sitting tenant was got vacated within time, Ex.A-2 had been thought of. No other inference is possible in the facts and circumstances of the case. Hence, the default if any cannot be attributed, since possession is expected to be delivered even on the date of registration of the sale deed. When this is a condition accepted by the parties when a tenant had been in possession of the property at the relevant point of time even if the registration of the sale deed to be completed, the actual delivery of possession could not have been effected by appellants-defendants. May be, that is the only reason why Ex.A-2 had been thought of and time had been extended.
On a careful reading of evidence of D.W.1 some evidence had been adduced to throw the blame on the part of P.W.1 in this regard, may be, this is an after thought on the part of D.W.1. This Court is not inclined to express any further opinion relating to this aspect. It is no doubt true that the advance amount of Rs. 5,000/- alone had been paid. It is also true that there is some evidence to show that this offer was made and out of the sale proceeds they were interested in discharging the debts. In the light of the present need it may be stated that the parties intended to make time essence of contract. It was stipulated so in Ex.A-1. But by volition of parties when Ex.A-2 had been voluntarily signed by the appellants and time had been extended, whether the same rigor of time being the essence of contract would continue to hold the field? Definitely not.
As already referred to supra, normally in case of immovable property when the relief of specific performance is prayed for, time is not the essence of contract. It may be that depending upon the rigor of the stipulations time can be taken as essence of contract or the parties willing to treat the time as essence of the contract should specifically put the same on notice of the other party bringing it to the notice of the other party that the time being essence of the contract, the contract would be put an end to and be taken as deemed to have been cancelled.
Elaborate submissions were made by Sri Y.V. Ravi Prasad that no such notice need be issued since after the lapse of time as stipulated originally in Ex.A-1 even Ex.A-1 is to be taken into consideration automatically it may have to be deemed that the agreement of sale stood cancelled automatically and in the light of the same this conduct on the part of appellants in not giving any notice at all cannot be taken serious note of. This Court is not inclined to accept the said contention.
Apart from this aspect of the matter, on a careful analysis of the whole evidence available on record though there is some controversy relating to the dates of issuance of notices though record is not very clear, some attempt had been made on the part of P.W.1 to serve notices and certain parties received and certain parties evaded receipt of notices. Subsequent thereto in the light of para 7 of the written statement of D-5 the issuance of notice, at least on 4.6.1979, is not in serious controversy. The proximity of time after the lapse of time stipulated in Ex.A-1 and Ex.A-2 also may have to be taken into consideration. There was no reply to this notice. The explanation forthcoming is that there is no need to give such reply.
No doubt strong reliance was placed on the decision of the Division Bench of this Court in Manepalli Udaya Bhaskara Rao Vs. Kanuboyina Dharmaraju, wherein the learned Division Bench while dealing with non-issuance of reply in the context of summary suit observed as hereunder.
From the above discussion, it makes clear that the admission has to be spelled out only from the positive acts on the part of the party, but cannot be culled out or cannot be based on any presumptions. The exchange of notices would only at the most constitute a demand and refusal in writing, but the absence thereof would not either way constitute an admission. Even failure to issue a notice cannot be said to be an absence of demand nor the failure to reply to such notice would amount to an admission of the claim made in the notice. Such omission would not amount to a tacit consent in respect of the demanded liability. Even otherwise, on a reading of the defence as set up in this case, it amply shows that there is a valid defence leading to a triable issue which has to be appreciated and considered only after giving opportunity to both sides to substantiate their respective pleas. In fact, it is the case of the petitioner herein that the respondent-plaintiff is totally stranger to him and whatever loan transaction which he had, was with one M. Dorayya and the same was already discharged, but the document was not returned and the said m. Dorayya, got filed the present suit through the respondent-plaintiff by making use of the signature obtained by him on a blank promissory note at the time of obtaining loan from him. In the circumstances, the only conclusion which can be arrived at on the facts and circumstances of the case is that there is a clear cut triable issue on the basis of the substantial defence as urged by the petitioner. Thus, in view of the aforesaid principles, it cannot be said that mere non-issuance of a reply notice would constitute an admission on the part of the defendant and in the circumstances, we are not prepared to accept the principle as laid down by the Single Judge of this Court in Thota Kanakadurga Varaprasad rao ''s case (supra ).
There cannot be any dispute or controversy relating to the proposition laid down by the Division Bench specified supra. Here is a case where the conduct of the parties is being dealt with. In the context of deciding the time being treated as essence of the contract in relation to the relief of specific performance of immovable property in a way the rigor of Ex.A-1 had been liberalized by Ex.A-2 and this is only the possible conclusion that can be drawn and P.W.1 had been willing to perform his contract and assertion of P.W.1 is there that he had been making some demands. The evidence of P.W.2, P.W.3 and P.W.4 is available to the effect that they were ready and willing to provide necessary financial assistance.
This Court had given careful consideration to the evidence available on record and also the findings recorded by the trial court in elaboration. This Court is thoroughly satisfied that in the facts and circumstances of the case findings recorded by the trial Court need no disturbance at the hands of this Court. Incidentally, the subsequent events also had been brought to the notice of this Court. This Court is not inclined to express any opinion relating to the subsequent events, since the same may not be seriously alter the situation.
In the light of the findings recorded above, the appeal being devoid of merit, the same shall stand dismissed, however in the light of the peculiar facts and circumstances, let the parties bear their own costs.
