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Judgment
@JUDGMENT-JUDGMENT
Sanjay K. Agrawal, J
This second appeal preferred by defendant No.1 (appellant herein) was admitted for hearing on 5-3-2020 by formulating the following substantial
question of law: -
Whether the first appellate Court is justified in holding that the plaintiff has proved the execution of agreement to sale by defendant No.1 in his favour
and if yes, whether the plaintiff has proved the readiness and willingness on his part as mandated under Section 16(c) of the Specific Relief Act,
1963?
(For the sake of convenience, parties hereinafter will be referred as per their status shown and ranking given in the plaint before the trial Court.)
The suit property was originally held by one Jivanram. He sold the suit property in favour of defendant No.1 by registered sale deed dated 3-3-1993
vide Ex.P-7 and delivered peaceful possession to defendant No.1. It is the case of the plaintiff / respondent No.1 that he has entered into agreement
to sale with defendant No.1 on 6-5- 2002 for a cash consideration of ₹ 35,000/- and paid him ₹ 10,000/- on 6-5-2002 and further paid ₹ 2,500/- on 1-9-
2002 and also ₹ 1,000/- thereafter. It is the further case of the plaintiff that after accepting ₹ 13,500/-, defendant No.1 failed to perform his part of
contract, therefore, the plaintiff issued legal notice vide Ex.P-3 to defendant No.1 to perform his part of contract and to execute sale deed in his
favour which the plaintiff is ready and willing to perform, but defendant No.1 refuted by replying vide Ex.P-4 stating that ₹ 10,000/- was obtained on
loan from the plaintiff for medical treatment and the amount of ₹ 3,500/- (Ex.P-2) is the amount paid towards interest of ₹ 10,000/-, as he was unwell
and in order to fulfill his medical treatment, he obtained loan of ₹ 10,000/- and as such, the plaintiff has extended him a loan of ₹ 10,000/- by taking the
original document Ex.P-1 - sale deed of defendant No.1 and therefore it is a case of loan transaction and the suit deserves to be dismissed with cost,
as the plaintiff is not entitled for decree for specific performance of contract.
The trial Court after appreciating oral and documentary evidence available on record by its judgment & decree dated 29-3-2007 dismissed the suit
holding that the plaintiff has not entered into agreement to sale with defendant No.1 on 6-5-2002 vide Ex.P-1 and has not obtained ₹ 13,500/- and the
plaintiff is not ready and willing to perform his part of contract and accordingly he is not entitled for decree for specific performance of contract.
On first appeal being preferred by the plaintiff, the first appellate Court agreed with the submissions made on behalf of the plaintiff and reversed the
judgment & decree of the trial Court by holding that defendant No.1 has entered into agreement to sale with the plaintiff and on 6-5-2002, he obtained
₹ 13,500/-, but, however, the first appellate Court did not address on the question of readiness and willingness on the part of the plaintiff to perform his
part of contract and decreed the suit by granting the first appeal against which this second appeal has been preferred by defendant No.1 in which
substantial question of law has been formulated and which has been set-out in the opening paragraph of this judgment.
Mr. Ravindra Sharma, learned counsel appearing for the appellant herein / defendant No.1, would submit that the first appellate Court is absolutely
unjustified in holding that defendant No.1 has entered into agreement to sale with the plaintiff as such witness to Ex.P-1 has not proved the agreement
to sale having been entered into by defendant No.1 in favour of the plaintiff. He would further submit that the plaintiff did not indicate any date of
performance by issuing notice Ex.P-3 before the Sub-Registrar by keeping himself present to make payment of the balance consideration and for
getting the sale deed executed in his favour. He would also submit that the finding of readiness and willingness that has been recorded against the
plaintiff has not been reversed by the first appellate Court and yet, decree for specific performance of contract has been passed in favour of the
plaintiff which deserves to be set aside by answering the substantial question of law in favour of defendant No.1.
Mr. Vijay K. Deshmukh, learned counsel appearing for the plaintiff / respondent No.1 herein, would submit that the first appellate Court has rightly
held that defendant No.1 has entered into agreement to sale with the plaintiff and the first appellate Court is further justified in holding that the plaintiff
is ready and willing to perform his part of contract and therefore rightly decreed the suit which calls for no interference in appellate jurisdiction under
Section 100 of the CPC, as it is a pure and simple finding of fact based on the evidence available on record which is rather binding to this Court in this
appeal.
I have heard learned counsel for the parties and considered their rival submissions made herein-above and went through the record with utmost
circumspection.
The substantial question of law is in two parts, first is with regard to whether the plaintiff has proved the execution of agreement to sale by
defendant No.1 in his favour qua Ex.P-1, which I would take up first for the sake of brevity.
The alleged agreement to sale Ex.P-1 was witnessed by one Narendra Kaushik (PW-3). In paragraph 3 of the statement, he has clearly stated
before the Court that he is not witness to the alleged agreement to sale Ex.P-1 and he has signed the agreement to sale on information being given to
him. As such, he is not witness to the agreement to sale Ex.P-1.
Ex.P-2 is the receipt of ₹ 2,500/- paid by the plaintiff to defendant No.1 on 1-9-2002 and ₹ 1,000/- paid on 2-10-2002. This document is said to be
witnessed by Darasram (PW-2) and Kaushal Prasad (PW-4). Darasram (PW-2) has clearly stated that Latelram (defendant No.1) was unwell and
he is not aware about the contents of Ex.P-2, he has only brought the stamp paper and Ex.P- 2 is not the document which was signed on that date.
Kaushal Prasad (PW-4) is another witness to the receipt Ex.P-2. He has clearly stated before the Court in paragraph 4 of his statement that Ex.P-2
was not executed in his presence and the amount of ₹ 1,000/- was not given in his presence and such an incident has been informed to him by
Latelram - defendant No.1.
The plaintiff - Horilal has been examined as PW-1. It is his case that he has given ₹ 13,500/- to defendant No.1 in lieu of the consideration amount
i.e. total ₹ 35,000/-. It is pertinent to notice here that though defendant No.1 has purchased the suit property vide sale deed vide Ex.P-7 on 3-3-1993,
but his application for mutation was pending before the revenue officer in which the plaintiff has filed an objection on 24-11-2004 that he has
purchased the suit land from defendant No.1 and he has paid only ₹ 10,000/-, but the plaintiff did not mention in the said objection filed before the
Tahsildar that he has also paid ₹ 3,500/- to defendant No.1 which he has also admitted in his statement before the Court that he has not mentioned in
the said objection before the Tahsildar that he has also given ₹ 3,500/- to defendant No.1.
The aforesaid analysis would show that defendant No.1 Latelram, it appears, was unwell as stated by Darasram (PW-2) and for medical
treatment, he has taken loan of ₹ 10,000/- from the plaintiff which defendant No.1 got by giving the possession of his registered sale deed Ex.P-7 to
the plaintiff, otherwise, there was no occasion or reason on the part of the plaintiff to have the possession of registered sale deed (Ex.P-7) executed
by Jivanram in favour of defendant No.1. That is the reason why the plaintiff's two witnesses to Exs.P-1 & P-2 have clearly refuted that such a
document was ever executed in their presence and it is only on being informed by the plaintiff, that was executed. Omission of the plaintiff that the
amount of ₹ 3,500/- was paid to defendant No.1 supports the statement of defendant No.1 that it was a loan transaction and ₹ 3,500/- was given
towards interest on the said loan of ₹ 10,000/-. As such there is sufficient evidence on record to hold that the impugned transaction was a loan
transaction of ₹ 10,000/- having been taken by defendant No.1 from the plaintiff and in lieu of that, the original sale deed of defendant No.1 was
obtained by the plaintiff and it has been given the colour of agreement to sale which is sought to be enforced and which the trial Court has rightly held
that it was not an agreement to sale intended and executed for enforcement and it was a pure and simple loan transaction which the first appellate
Court legally erred and misdirected itself by holding that it was a real and real agreement to sale which can be enforced by a specific performance of
contract. The finding recorded by the first appellate Court in this regard holding it to be an agreement to sale deserves to be and is accordingly set-
aside and that the trial Court is restored.
Now, the question is, whether the plaintiff has proved readiness and willingness on his part to perform his part of contract as mandated under
Section 16(c) of the Specific Relief Act, 1963?
Section 16(c) of the Specific Relief Act, 1963 (prior to its amendment with effect from 1-10-2018), reads as follows: -
S. 16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--
(a) xxx xxx xxx
(b) xxx xxx xxx
(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to
be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation.--For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any
money except when so directed by the Court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.
Clause (c) of Section 16 of the Specific Relief Act, 1963 provides that the person, seeking specific performance of the contract, must file a suit
wherein he must aver and prove that he has performed or has been ready and willing to perform the essential terms of the contract, which are to be
performed by him. The words 'ready and willing' imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far
as they depend upon his performance. The terms of a contract performable by the plaintiff may be of two kinds:
(i) those that have to be performed before the other side can be called upon to fulfill his promise; and
(ii) others that may have to be subsequently performed.
The onus of proof of being ready and willing to perform his part of the contract, from the date of the contract, to the date of filing of the suit, is on
the plaintiff. Mere proof of readiness and willingness, it is also well settled, where the essential ingredients are absent in the pleadings, must be
deemed to be an exercise in vain. Proof in such cases cannot be regarded as substitute for averments, which were absent in the pleadings. The
plaintiff will have to prove that he demanded execution of the sale deed from the defendant, and also service of notice.
In the matter of J.P. Builders and another v. A. Ramadas Rao and another (2011) 1 SCC 429 ,the Supreme Court has laid down the principles of
law flowing from Section 16(c) of the Specific Relief Act, 1963 relating to specific performance of contract and reiterated that readiness and
willingness on the part of the plaintiff to perform his part of contract is a condition precedent for obtaining relief. The said principles running from
paragraphs 21 to 27 of the report read as follows: -
Among the three clauses, we are more concerned about clause (c). ""Readiness and willingness"" is enshrined in clause (c) which was not present
in the old Act of 1877. However, it was later inserted with the recommendations of the 9th Law Commission's Report. This clause provides that the
person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract
which are to be performed by him.
The words ""ready"" and ""willing"" imply that the person was prepared to carry out the terms of the contact. The distinction between ""readiness"" and
willingness"" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is
backed by willingness.
In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao (1995) 5 SCC 115 Â at para 5, this Court held: (SCC pp. 117-18) ""5. ... 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 grant 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 filing of the suit along with other attending circumstances. The amount of consideration which he has 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 adjudged 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 the contract.
In P. D'Souza v. Shondrilo Naidu (2004) 6 SCC 649, this Court observed: (SCC p. 654, paras 19 and 21) ""19. It is indisputable that in a suit for
specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether
the onus was discharged by the plaintiff or not will depend upon the facts and circumstance of each case. No straitjacket formula can be laid down in
this behalf. ...
* * *
... The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the
defendant did everything which was required of him to be done in terms of the agreement for sale.
Section 16(c) of the Specific Relief Act, 1963 mandates ""readiness and willingness"" on the part of the plaintiff and it is a condition precedent for
obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous
readiness and willingness"" to perform the contract on his part from the date of the contract. The onus is on the plaintiff.
It has been rightly considered by this Court in R.C. Chandiok v. Chuni Lal Sabharwal (1970) 3 SCC 14 0Â that ""readiness and willingness"" cannot
be treated as a straitjacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct
of the party concerned.
It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with
Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the court is not bound to grant specific
performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the
relevant points of time. ""Readiness and willingness"" to perform the part of the contract has to be determined/ ascertained from the conduct of the
parties.
Likewise, in the matter of Avtar Singh v. Jaspal Singh AIR 2018 SC (Supp) 487, the Supreme Court has held that the plaintiff is required to clearly
indicate the notice regarding specific performance of contract by holding as under: -
It is apparent from other circumstances also that plaintiff has not come to the Court bonafidely. Initially, he had filed a suit only for a mandatory
injunction to direct the defendant to execute the sale deed without payment of the court fee. He avoided the payment of court fee as it was ultimately
found that the suit was not maintainable in the form it was filed. Later on, court fee had been paid. Be that as it may. The fact is also apparent that
even the date of serving notice regarding specific performance has not been mentioned in the plaint, as also the date on which the plaintiff kept himself
present before the Sub-Registrar. The plaintiff has not pleaded whether he had intimated to the defendant with respect to the date on which he was
required to be present before the Sub-Registrar for the execution of the sale deed. Thus, in the way the suit has been filed, it does not inspire
confidence with respect to the bonafide nature of transaction of sale. However, money had been advanced. Therefore, it would be appropriate to
refund the money which has been paid, i.e., Rs.3,26,000/- (Rupees Three Lakhs Twenty Six Thousand only), along with an interest @ 6% per annum.
Let the money be refunded within three months from today.
Similarly, in a recent pronouncement by their Lordships of the Supreme Court in the matter of Ravi Setia v. Madan Lal and others (2019) 9 SCC
381, the Supreme Court has summarised the principles with regard to readiness and willingness, which are as under: -
There can be no straitjacket formula with regard to readiness and willingness. It will have to be construed in the facts and circumstances of each
case in the light of all attending facts and circumstances. We are of the considered opinion, that in the facts and circumstances of the present case,
the failure of the plaintiff to offer any explanation why the balance consideration was not deposited within the time granted, the filing of the application
for extension of time after expiry of the prescribed period coupled with the frivolousness of the grounds taken in the application for extension that the
money would lie in the bank without earning interest, are all but evidence of incapacity on part of the plaintiff to perform his obligations under the
agreement and reflective of lack of readiness and willingness. He preferred to wait and abide by the gamble of a favourable decision in the first
appeal.
The grant of relief for specific performance under Section 16(1)(c) of the Act is a discretionary and equitable relief. Under Section 16(1)(c), the
plaintiff has to demonstrate readiness and willingness throughout to perform his obligations under the contract. The plea that the amount would lie in
the bank without interest is unfounded and contrary to normal banking practice. To our mind, this is sufficient evidence of the incapacity or lack of
readiness and willingness on part of the plaintiff to perform his obligations. Undoubtedly, the time for deposit could be extended under Section 28 of
the Act. But the mere extension of time for deposit does not absolve the plaintiff of his obligation to demonstrate readiness and willingness coupled
with special circumstances beyond his control to seek such extension. The plaintiff did not aver in the application that he was ready and willing to
perform his obligations and was prevented from any special circumstances from doing so. The pendency of an appeal by the defendant did not
preclude the plaintiff from depositing the amount in proof of his readiness and willingness. Readiness has been interpreted as capacity for discharge of
obligations with regard to payment. The High Court has rightly observed that there was no stay by the appellate court of the decree under appeal to
justify non-deposit during the pendency of the appeal. The grant of extension of time cannot ipso facto be construed as otherwise demonstrating
readiness and willingness on part of the plaintiff. The plaintiff was required to plead sufficient, substantial and cogent grounds to seek extension of
time for deposit because otherwise it becomes a question of his conduct along with all other attendant surrounding circumstances in the facts of the
case. We therefore find no infirmity in the order of the High Court concluding that the plaintiff in the facts and circumstances was not ready and
willing to perform his obligations.
In our opinion, had the plaintiff deposited the amount after expiry of the time but during the pendency of the appeal, as held in Ramankutty Guptan
v. Avara (1994) 2 SCC 642, entirely different considerations may have arisen. The judgment in any event is based on its own peculiar facts and
circumstances.
In a very recent pronouncement of the Supreme Court in the matter of C.S. Venkatesh v. A.S.C. Murthy (D) by LRs. and others 2020 SCC
OnLine SC 143, their Lordships of the Supreme Court have clearly held that continuous readiness and willingness on the part of the plaintiff is a
condition precedent to grant of the relief of specific performance. It was also held that if the plaintiff fails to aver or prove the same, he must fail and
the amount must be available. It was succinctly held as under: -
The words 'ready and willing' imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far as they
depend upon his performance. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of
performance. 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 contract, the court must take into consideration the conduct of the plaintiff prior, and subsequent to the filing of the suit along with other
attending circumstances. The amount which he has to pay the defendant must be of necessity to be proved to be available. Right from the date of the
execution of the contract till the date of decree, he must prove that he is ready and willing to perform his part of the contract. The court may infer
from the facts and circumstances whether the plaintiff was ready and was always ready to perform his contract.
Reverting to the facts of the present case in the light of the aforesaid principles of law flowing from the aforesaid judgments of the Supreme
Court, it is quite vivid that though the plaintiff has stated that he is ready and willing to perform his part of contract and he has only paid ₹ 10,000/- in
advance to defendant No.1, but further, while issuing notice Ex.P-3, he has simply stated that he is ready and willing to perform his part of contract.
At this stage, it would be appropriate to mention paragraphs 5, 6 & 7 of the plaint qua readiness and willingness which state as under: -
, 1
1
 6/ , 2/2/2005
1
 7/ , - -
- ,
-
Similarly, paragraphs 4 & 5 of the legal notice Ex.P-3 state as under: -
4/ ,
5/ ,
A careful perusal of the above-stated averments would show that the plaintiff even did not aver / plead that balance amount which he has to pay
to defendant No.1 / appellant herein is available with him as held by the Supreme Court in C.S. Venkatesh (supra).
Similarly, as held by the Supreme Court in Avtar Singh (supra), the plaintiff failed to mention the date on which he kept himself present before the
Sub-Registrar and also did not plead and establish that he had intimated to defendant No.1 with respect to the date on which he was required to be
present before the Sub-Registrar for the execution of the sale deed. As such, mere assertion that he is ready and willing to perform his part of
contract without pleading the specific particulars and without showing his actual readiness and willingness to perform his part of contract, it cannot be
held that the plaintiff is ready and willing to perform his part of contract. Therefore, the plaintiff has failed to plead and establish readiness and
willingness to perform his part of contract, as he did not plea that balance consideration amount is available with him and he did not inform the date for
executing the sale deed and for remaining present before the Sub-Registrar and to perform his part of contract. He has also failed to establish
execution of agreement to sale by defendant No.1 in his favour as held herein-above.
The first appellate Court has reversed the well reasoned finding of the trial Court by merely holding that defendant No.1 has entered into
agreement to sale with the plaintiff and reversed the decree of the trial Court. As such, no specific finding was recorded by the first appellate Court
for holding that the plaintiff was ready and willing to perform his part of contract in terms of Section 16(c) read with Explanation of the Specific Relief
Act, 1963. Thus, the plaintiff has failed to establish that he is ready and willing to perform his part of contract as mandated under Section 16(c) of the
Specific Relief Act, 1963. The substantial question of law (two parts) are answered against the plaintiff and in favour of defendant No.1.
As a fallout and consequence of the aforesaid discussion, judgment & decree of the first appellate Court are set-aside and that of the trial Court
are restored leaving the parties to bear their own cost(s).
Appellate decree be drawn-up accordingly.