Manju vs Sriram

B.S. Patil, J—Revision Petitioner - defendant in O.S. No. 607/2008 filed an application I.A. No. 10 under Section 28 of the Specific Relief Act (for short, ''the Act'') seeking rescission of the Agreement of Sale dated 25.03.2006 and also the decree for specific performance granted on 23.05.2011, alleging that plaintiff had failed to pay balance sale consideration of Rs. 99,89,175/-. By the impugned order dated 18.03.2015, learned I Additional Senior Civil Judge, Mysuru, has dismissed the said application. Aggrieved by the same, the present revision petition is filed under Section 115 CPC.

Facts briefly stated, relevant for the disposal of this revision petition are that respondent herein filed a suit for specific performance contending inter alia that as per the Agreement dated 25.03.2006, the suit schedule land situated at Mysuru was agreed to be sold for a sum of Rs. 1,91,00,000/-. Advance amount of Rs. 91,50,000/- was paid and balance amount of Rs. 99,89,175/- was agreed to be paid at the time of registration of the Sale Deed. The suit was decreed on 23.05.2011. Operative portion of the judgment reads as under:

"The suit of the plaintiff is hereby decreed with costs as under:--

Defendant is hereby directed to execute Sale Deed in favour of the plaintiff in terms of sale agreement dated 25.03.2006 duly conveying the suit schedule property after receiving balance sale consideration amount of Rs. 99,89,175/- within 3 months from the date of this judgment.

If the defendant fails to do so, plaintiff is at liberty to get it done through the agency of the court.

Further defendant is hereby directed to handover possession of the suit schedule property to the plaintiff."

Plaintiff instituted execution proceedings in Ex. No. 581/2013 on 17.07.2013. Thereafter, on 18.01.2014, defendant filed present I.A. No. 10 under Section 28 of the Act seeking rescission of the Agreement of Sale on the ground that plaintiff failed to pay balance sale consideration of Rs. 99,89,175/- within three months as directed in the decree passed. This application was objected. The Trial Court, on consideration of the respective contentions has dismissed the application recording a finding that plaintiff had produced copy of the legal notice dated 21.06.2011 issued by him to the defendant calling upon the defendant to receive the balance sale consideration and execute the Sale Deed; the postal acknowledgement produced disclosed that the said notice had been duly served upon the defendant and that the said notice was issued within a period of three months from the date of judgment which disclosed that the plaintiff had made efforts to get the Sale Deed executed.

The court below also took note of the fact that plaintiff had even produced xerox copy of the Demand Draft dated 08.08.2011 for a sum of Rs. 99,89,175/- payable to the defendant which also disclosed that plaintiff was ready and willing to pay the balance consideration to the defendant to execute the Sale Deed, but the defendant did not come forward to execute the Sale Deed. The Court below has also noticed that plaintiff had filed an application under Section 151 CPC in the suit on 19.01.2012 narrating certain further developments leading to filing of several suits by a group of persons against the defendant in respect of the very suit property and the matter was pending in Regular Second Appeal before this Court, wherein plaintiff had made efforts to get himself impleaded. Thus the Trial Court has come to the conclusion that prayer made for rescission of the contract could not be entertained.

Learned Senior Counsel appearing for the petitioner Sri Srivatsa has contended that notice allegedly issued by the plaintiff was not received by the defendant. Regular Second Appeals filed by the defendant against third parties challenging the judgment and decree passed have since been allowed and the injunction suits filed cannot justify the delay in payment of balance sale consideration which was required to be made within three months. He urges that direction issued in the judgment clearly required the plaintiff to make payment within three months and get the Sale Deed registered; no further time being allowed by extending the period of three months prescribed in the decree the agreement was liable to be rescinded. It is also urged that postal acknowledgment produced showed that legal notice did not bear the signature of the defendant.

It is next contended by him that no application has been filed by the plaintiff seeking extension of time and the one filed was only for deferring the payment/deposit; by merely taking Demand Draft in the name of the defendant, it cannot be said that balance sale consideration was either tendered or paid. He has placed reliance on the judgments of the Apex Court in Chanda (dead) through LRs. Vs. Rattni and Another, AIR 2007 SC 1514 : (2007) 3 CTC 773 : (2007) 5 JT 28 : (2007) 5 SCALE 53 : (2007) 4 SCR 402 and in the case of Narinder Kumar Malik Vs. Surinder Kumar Malik, (2009) 1 SCALE 388 : (2009) 8 SCC 743 : (2009) 12 SCR 479 .

Sri Naganand, learned Senior Counsel appearing for the plaintiff - respondent supports the order passed by the Trial Court and urges that legal notice was issued on 21.06.2011 well before the expiry of three months enclosing a copy of the demand draft taken in the name of the defendant which disclosed that plaintiff had complied with the terms of the decree and required the defendant to execute the Sale Deed; this was followed by institution of execution proceedings on 17.07.2013. It is his submission that defendant did not come forward to execute the Sale Deed and kept quiet till 18.01.2014 on which date the present application under Section 28 of the Act was filed seeking rescission of the contract. His contentions are :

"a) that the decree does not fix any time limit for payment of balance sale consideration by the plaintiff;

b) defendant has deliberately not come forward to execute the registered Sale Deed despite receipt of legal notice;

c) that the Demand Draft obtained by the plaintiff clearly disclosed that he was ready with the balance sale consideration to be paid at the time of registration;

d) that the defendant could not expect payment of such huge amount of Rs. 99,89,175/- without he coming forward to register the Sale Deed;

e) that the direction issued in the decree has to be construed to mean that after receiving the balance sale consideration before the Sub-Registrar, defendant had to execute the Sale Deed."

He has placed reliance on an unreported judgment dated 05.04.2010 passed in W.P. No. 3926/2010 by this Court to contend that in some what similar circumstances, this Court has confirmed the dismissal of the application filed under Section 28(1) of the Act. He has urged that decisions relied upon by the counsel for the defendant have no application to the facts of the present case.

Upon hearing the learned counsel for both parties and on careful perusal of the pleadings and the order impugned, I find that while decreeing the suit for specific performance, the Trial Court has directed the defendant to execute the Sale Deed in favour of the plaintiff in terms of the Sale Agreement duly conveying the suit property after receiving the balance sale consideration amount within three months from the date of the judgment. Indeed, well before the expiry of three months from 23.05.2011 (date of the judgment and decree) and on 21.06.2011, plaintiff has issued a legal notice calling upon the defendant to receive the balance sale consideration and execute the Sale Deed. A perusal of the legal notice makes it clear that plaintiff has called upon the defendant to intimate the date on which and the time at which the defendant would be ready to execute the Sale Deed, so that plaintiff can obtain the Demand Draft in favour of the Sub-Registrar, Mysuru North for the value of stamp paper and also towards registration fee. The legal notice further states that in the absence of any communication from the defendant, it would be treated that he was not ready and willing to perform his part of the contract to execute the Sale Deed and the Court would be moved accordingly as per law and in terms of the judgment and decree.

Though receipt of this notice has been denied by the defendant, the postal acknowledgment produced clearly shows that notice was received by the defendant. The Trial Court has rightly placed reliance on the notice issued and the postal acknowledgment placed before the Court to hold that defendant was indeed notified by a legal notice to execute the Sale Deed by receiving balance sale consideration. If the defendant was indeed desirous of complying with the direction issued in the decree to execute the Sale Deed within three months by receiving the balance sale consideration, he would have, immediately after the receipt of notice, notified the plaintiff regarding the date for registration of the Sale Deed and called upon the plaintiff to appear before the Sub-Registrar by fixing the date and time. He would have also asked him to bring the balance sale consideration amount payable to enable him to register the Sale Deed by receiving the balance consideration within three months from the date of the judgment.

In contrast, plaintiff had indeed taken a demand draft in the name of the defendant for the balance sale consideration of Rs. 99,89,175/- and informed the defendant about the same which disclosed that he did not merely offer to pay the amount by issuing the notice, but had indeed taken the demand draft that showed his earnestness in arranging the amount and his willingness to pay the same provided the defendant came forward to execute the Sale Deed. It is the defendant who did not comply with the reciprocal obligation that was cast on him under the decree. In addition, it has to be seen that admittedly, there were several suits filed against the defendant and decree of injunction was obtained which were the subject matter of challenge in the Regular Second Appeals filed by the very defendant before this Court.

In the said appeals, plaintiff had tried to implead himself. This development leading to the third parties filing suits made the plaintiff to approach the Civil Court in the suit with an application under Section 151 CPC seeking to defer, until further orders from the Court, tendering or depositing of the balance sale consideration in favour of the defendant. The reason assigned in the affidavit filed in support of the said application makes it clear that when the plaintiff inspected the suit property, a group of persons approached and claimed that there was a decree already obtained by them in their favour, whereupon the plaintiff collected the certified copies of the proceedings in the Trial Court and also the First Appellate Court and learnt about the claims made by the third parties. He has further contended in the affidavit that the said facts were suppressed before the Court below in the suit filed for specific performance thereby, the decree passed for specific performance had been rendered infructuous and deposit of the balance amount would not secure any relief in favour of the plaintiff.

He also alleged that 17 plaintiffs in the suits filed against the defendant had been indeed set up by the defendant himself to defraud the plaintiff. He, therefore, urged in the suit before the Court that deposit of the amount would result in a futile exercise and even if he were to file any execution, there would be obstruction by the 17 rival claimants who had secured decrees in their favour and the amount to be deposited would be a dead investment.

The above mentioned facts would make it clear that the defendant/revision petitioner did not come forward to execute the sale deed within three months as per the terms of decree, though he was called upon to execute the sale deed. It has to be noticed here that the plaintiff had already paid Rs. 91,00,000/- on the date of agreement of sale executed on 25.3.2006 and had taken the demand draft for the balance amount of Rs. 99,89,175/- in the name of the defendant and had indeed enclosed the same while issuing the legal notice. The default was on the part of the defendant in not coming forward to execute the registered sale deed.

In view of the above, the two decisions relied upon by learned counsel for the petitioner have no application to the facts of the present case. In the case of Narinder Kumar Malik Vs. Surinder Kumar Malik, (2009) 1 SCALE 388 : (2009) 8 SCC 743 : (2009) 12 SCR 479 , facts disclose that despite parties having fixed time limit for the respondent therein to comply with the terms and conditions of memorandum of understanding, he did not honour the commitment and instead went on sending notices through his advocate. In such circumstance, by examining the conditions imposed in the memorandum of understanding, Apex Court has held that admittedly, respondent therein had not honoured his commitments within the extendable period given to him. Hence, the facts and circumstances involved in the said case have no application to the context in which the present controversy has arisen.

Similarly, the case of Chanda (dead) through LRs. Vs. Rattni and Another, AIR 2007 SC 1514 : (2007) 3 CTC 773 : (2007) 5 JT 28 : (2007) 5 SCALE 53 : (2007) 4 SCR 402 , has no application to the facts of the present case. While there can be no dispute with regard to the position of law that power under Section 28 of the Act is discretionary and the Court cannot ordinarily annul a decree once passed by it and that if the defendant establishes that plaintiff had failed to deposit the amount for years which smacked of malafide intention, discretion cannot be exercised in favour of such plaintiff, the facts and circumstances of each case has to be looked into. In the instant case, as already noticed above, the conduct of the plaintiff in issuing the legal notice to the defendant within three months and calling upon him to execute the sale deed by receiving the balance sale consideration and intimating the defendant to communicate the date and time of registration of the sale deed, etc., clearly disclosed that he was sincere and earnest in performing his part of the obligation and that it was the defendant who did not respond to the legal notice and kept quiet until the present application was filed in the year 2014. In such circumstance, the decisions relied upon by learned counsel for the petitioner cannot be made applicable to the facts of the case.

Hence, revision petition being devoid of merit is dismissed.