Kulla Kone and four others vs Gopal Kone

Defendants 2 to 6 in O.S.No. 132 of 1982 on the file of the Subordinate Judge''s Court, Tiruvannamalai, are the appellants. The

respondent/plaintiff filed the suit for specific performance of an agreement for reconveyance against the legal representatives of one Gopal Kone.

The first defendant Ellammal, wife of Gopal Kone also died pending suit. The other defendants were recorded as her legal representatives and as

already stated they are the appellants in the second appeal.

The case of the respondent was that deceased Gopal Kone purchased the suit property on 31.7.1973 under Ex.A.4. On the same date under

Ex.A.1 there was an agreement entered into between the respondent and Gopal Kone, under which Gopal Kone agreed to reconvey the suit

property to the respondent on or before 30.7.1978 for a consideration of Rs.11,012.50 and on the same day a sum of Rs. 12.50 was paid as

advance. The respondent by notice dated 25.7.1978 under the original of Ex.A.2 called upon the legal representatives of Gopal Kone to reconvey

the property and as they did not comply with the demand, the suit came to be filed.

The defence in substance was that chough the agreement for reconveyance was true, still the respondent did not pay the sale price nor was he

ready and willing to perform his part of the contract and complete the transaction.

The trial court framed the necessary issues and on the oral and documentary evidence produced, held that the plaintiff respondent had

established his case and that he was entitled to reconveyance. On appeal by the appellants in A.S.No. 102 of 1984, the learned District Judge,

Vellore, confirmed the decision of the trial court and dismissed the appeal. Aggrieved, the present second appeal has been filed.

At the time of admission, the following substantial question of law was raised for decision in the second appeal:

Whether the courts below have misconstrued the evidence and overlooked the material evidence in holding that the plaintiff was ready and willing

to perform his part of the contract for reconveyance?

It is contended by the learned Counsel for the appellants as follows:

It has not been established by the plaintiff/respondent that he was always ready and willing to perform his part of the contract and that he had the

amount of Rs. 11,000 as on 30.7.1978 to seek specific performance. In the suit notice Ex.A.2 as well as in the plaint the respondent had

specifically pleaded that he was keeping the money in hand and this had been demonstrated to be false from the evidence of P.W.2 and Ex.A.5.

The plaintiff had not stated in the notice Ex.A.2 or in the plaint that he called upon the defendants to appear before Thiruvannamalai Primary Land

Development Bank for receiving the consideration as per Ex.A.1 agreement of reconveyance. The plaintiff had also not substantiated his case that

on the date he issued the notice he had Rs.11,000 as neither his son nor his father-in-law was examined to show that the two of them had

entrusted their money to the plaintiff as loan or otherwise. The very fact that the amount had not been deposited into court while filing the plaint

showed that the plaintiff was not possessed of sufficient funds to enforce the agreement of reconveyance. The courts below ought to have held that

the plaintiff was neither ready nor willing to perform his obligations under Ex.A.1 agreement. The courts below had not also given adequate

consideration to the fact that the plaintiff had waited for over 4 years 11 months and 24 days for issuing a notice. The relief for specific

performance being an equitable relief, the courts below erred in accepting the case of the plaintiff. The learned Counsel relied on the following

judgments in support of the appellant''s case:

(1) N.P. Thirugnanam (died) by L.Rs. v. Dr.R. Jagan Mohan Rao & others, 1996 (1) L.W. 239 ; (2) K.S. Vidyanadam and Others Vs. Vairavan,

and (3) Koothapadayachi and another v. Arjuna Pillai and two others, 1998 (1) L.W. 301.

Per contra, the learned Counsel for the respondent/plaintiff submitted that the finding reached by the courts below is based on the documentary

and oral evidence and as a question of fact, the courts below have found that the respondent/plaintiff had always been ready and willing to perform

his part of the obligations and that the finding is unexceptionable and cannot be interfered with u/s 100 of the Code of Civil Procedure. The learned

Counsel also submitted that different considerations would arise in a case for specific performance of an agreement for reconveyance as opposed

to the considerations recognised by courts in suits for specific performance of agreements for sale. The respondent had clearly demonstrated that

he had the wherewithal to seek performance and he had complied with the requirements of law in letter and spirit and even conceding that there

had been some contradictions between pleading and proof, the same was immaterial. In support of the contention, the learned Counsel for the

respondent relied on the judgment of a Division Bench of this Court in Pachaiappan and others v. S.P. Koon Mari, 1996 (II) MLJ 378.

The courts below have found that the plaintiff has always been ready and willing to perform his part of the contract, that in Ex.A.2 notice the

respondent had specifically stated that he had the money ready for getting the reconveyance, though he had not specifically mentioned as to the

source from which he expected to get money whether it was from his son or father-in-law and that the non-deposit of the amount into court, would

not in any way discredit the respondent''s case. The learned District Judge further found that the appellants had not stated in their written statement

that they were willing to comply with the sale transaction after receiving the consideration. 8(a). The factual findings are unassailable. The

judgments relied on by the learned counsel for the appellants are also clearly distinguishable on facts. It should also be noted that none of the

Supreme Court decisions deals with a case of reconveyance.

In N.P. Thirugnanam (died) by L.Rs. v. Dr.R. Jagan Mohan Rao and others, 1996 (I) L.W. 239 the Supreme Court dealing with sections 16(c)

and 20 of the Specific Relief Act, observed in paragraph 5 as follows:

It is settled law that remedy for specific performance is an equitable remedy and it in the discretion of the court, which discretion requires to be

exercised according to settled principles of law and not arbitrarily as adumbrated under S. 20 of the Specific Relief Act, 1963 (for short, ""the

Act""). Under S. 20 the court is not bound to grant the relief just because there was valid agreement of sale. Section 16(c) of the Act envisages that

plaintiff must plead and prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous

readiness and willingness on the part of the plaintiff is a condition precedent to gram the relief of specific performance. This circumstance is material

and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the

same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration

the conduct of the plaintiff prior and subsequent to the filling of the suit along with other attending circumstances. The amount of consideration

which he had to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he

must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to

perform his part of the contract is to be adjusted with reference to the conduct of the party and the attending circumstances. The court may infer

from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of contract.

On the facts of that case, it was found that the plaintiff was not always ready and willing to perform his part of the contract, that he did not have the

resource, that he was not able to pay even the loans he had borrowed and that he was unable to pay the rent to the respondents in that case.

These circumstance were taken into consideration in that case for refusing the discretionary relief of specific performance. The decision has no

application to the facts of the present case.

In K.S. Vidyanadam and Others Vs. Vairavan, it was held by the supreme Court that from the mere fact that in the case of agreement of sale

relating to immovable property, time was not of the essence of the contract unless specifically provided to that effect and that the period of

limitation for such suits prescribed by the limitation act being three years, it did not follow that nay and every suit for specific performance of the

agreement, which did not provide specifically that item, was of the essence of the contract, should be decreed, provided it was filed within the

period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. In that

case, there was delay coupled with substantial rise in prices and therefore the discretionary relief of specific performance was refused. However, in

reconveyance cases, time is the essence of the contract because of the fact that hands of the purchaser are tied and his dealing with the property in

absolute abandon is thoroughly restricted. He cannot that third parties interest do not intervene. The criteria relevant for agreements for sale do not

fully apply to agreements for reconveyance. The Supreme Court decisions relied on by the learned Counsel for the appellants do not apply to the

facts of the present case.

Conceding that the respondent had not made precise pleadings and that there are variations between pleading and proof, still the person

seeking to enforce an agreement for reconveyance cannot be refused relief. The ratio of the decision of the Bench of this court in Pachaiappan and

others v. S.P.Koon Mari, 1996 (II) L.W 1 : 1996 (II) MLJ 378 will squarely apply to the facts of the present case. The Bench dealing with a case

of a suit for specific performance of an agreement for reconveyance held as follows:

The principle that the equitable relief of specific performance cannot be granted to a person who has put forward a false case is based on the

doctrine that one who seeks equity must de equity. But the question whether the plaintiff is disentitled to claim the relief will depend on the facts of

each case. If, in a particular case, a false claim set up by the plaintiff is immaterial and does not affect the main case in any manner, the court shall

not refuse the relief.

The Bench further observed as follows:

In the case of a sale with an agreement for reconveyance, the property is sold by the vendor, in order to get over a financial crisis. The agreement

for reconveyance of the said property at the same price at which it was sold, after a certain period would itself show that the parties agreed that

there was no permanent transfer of ownership and in the event of the vendor paying the amount of consideration within a particular date, his

ownership would be restored. It has been repeatedly held that the sale and the agreement of reconveyance form part of one transaction. It has

been construed to be an option to the vendor and an undertaking by the purchaser that he would execute a deed of reconveyance in the event of

the exercise of the option by the vendor within the stipulated period. That is why it has been held that time is the essence of the contract of

reconveyance and if the period lapsed, the vendor would lose the right to get back the property.

The present case is on a stronger ground. The original price was Rs.10,000 and the reconveyance price was Rs.11,012.50. It was not as if the

respondent wanted the property to be reconveyed to him at the same old price. He had agreed to pay Rs1,000 more. Not only that, he had

demanded reconveyance within the stipulated five year period and had also filed the suit in time. No case of reconveyance decided by the

Supreme Court or this Court taking a view contrary to the one taken by the bench was cited by the learned counsel for the appellants. The courts

below have concurrently held that the respondent/plaintiff had always been ready and willing to perform his part of the contract, that he had the

necessary resources to pay the consideration and that he was entitled to the relief prayed for. The courts below have exercised their discretion in a

proper manner and the same cannot be assailed in second appeal.

No other point is raised by the learned counsel for the appellants.

Consequently, the substantial question of law raised is answered against the appellants and the second appeal fails and it is dismissed. There

will be no order as to costs.