Mohan Singh and Another vs Kulwinder Singh

Ranjit Singh, J.—Judgment of the learned Single Judge in RFA No. 1388 of 1997 is under challenge in the present Letters Patent Appeal. Leaned Single Judge had dismissed the appeal filed by the defendant-appellants against the judgment of Civil Judge (Senior Division), Jalandhar, who had granted the decree of joint possession of the suit property by way of specific performance of the agreement dated 26.8.1989 further calling upon the defendant-appellants to execute the sale deed in favour of the plaintiff respondent.

The brief facts of the case are that one Kulwinder Singh had filed a suit seeking joint possession by way of specific performance with regard to 2/3rd share in a house for a consideration of Rs. 23,50,000/- vide an agreement dated 26.8.1989 entered into by said Kulwinder Singh with the defendant-appellants. A sum of Rs. 4 lacs was paid by way of earnest money. As per the terms of the agreement, a sum of Rs. 1 lac was required to be paid on or before 16.9.1989 and the remaining sale consideration was to be paid at the time of execution of the sale deed. The sale deed was required to be executed by 25.3.1990. It was claimed in the suit that plaintiff Kulwinder Singh was always ready and willing to perform his part of contract and had also paid a sum of Rs. 1 lac to the defendant-appellants on 16.9.1989. It was further disclosed that the date for executing the sale deed was extended with mutual consent by the parties upto 31.7.1990 and then to 1.10.1990, second time. Extension in date had been done as the defendants could not get income tax clearance certificate. It is then pleaded that the plaintiff was always ready and willing to perform his part of contract but the defendants threatened to sell the house to some other person, which necessitated the plaintiff to file the suit for injunction. This was subsequently withdrawn with liberty to file a suit for joint possession by way of specific performance and hence the suit leading to present proceedings.

In written statement filed by the defendant-appellants, execution of the agreement was admitted. However, the payment of Rs. 4 lacs as alleged was denied but it was admitted that a sum of Rs. 1 lac was paid on 26.8.1989. It was further mentioned that another sum of Rs. 1 lac was paid to the defendants. Thus, a total sum of Rs. 2 lacs had been paid as earnest money. It was alleged that the plaintiff in collusion with the deed writer had got written payment of Rs. 4 lacs as earnest money by way of misrepresentation.

Responding to the averments of extension of time first upto 31.7.1990 and then to 1.10.1990, it was mentioned that Mohan Singh defendant alone had agreed to extend this time and not Harminder Singh defendant. Accordingly, it was pleaded that the plaintiff was not entitled to a decree of specific performance as he was not ready and willing to perform his part of contract. It was stated that he did not have any money ready with him. It was also the stand of the defendants that they had appeared before the Sub Registrar on 31.7.1990 and so also on 1.10.1990 to execute the sale deed but the plaintiff did not turn up. It was, accordingly, prayed that the decree sought by the plaintiff be declined and the suit be dismissed. After filing of the rejoinder, the Court framed the following issues:

Whether the defendants executed an agreement of sale dated 26.8.1989 in favour of the plaintiff? OPP

Whether the plaintiff has always been ready and willing to perform his part of the agreement? OPP

Whether the plaintiff is entitled to the decree for specific performance or in the alternative for recovery? OPP

Whether the agreement dated 29.8.1989 is without complete consideration as alleged in para 3 of the written statement, filed by defendant No. 1, if so, its effect? OPD

Whether time is essence of the agreement and the plaintiff is guilty of the delay? If so, its effect? OPD

Whether the plaint is not in accordance with form 87 and 88, prescribed under the law? If so, its effect ?OPD

Whether the suit is barred u/o 2 Rule 2 CPC ?OPD

Whether the plaintiff is estopped by his own acts and conduct to file the present suit? OPD

Relief.

Respective parties had led their evidence. Plaintiff examined Krishan Lal, Deed-writer, Charanjit Singh, besides himself stepping into the witness box had also produced original agreement Ex.P1 containing endorsement regarding receipt of Rs. 1 lac and also of extension of time first upto 31.7.1990 and then upto 1.10.1990. Harminder Singh defendant appeared as a witness in defence of the suit. He also examined Inder Mohan, Tax Assistant as DW2. Trial Court, after assessing the evidence produced before it, decided issues No. 1 to 4 together in favour of the plaintiff and against the defendants. Issue No. 6 was decided against the defendants as it was not pressed. Trial Court, accordingly, passed the decree for joint possession by way of specific performance. This judgment of the trial Court was taken in first appeal before the High Court, which was dismissed leading to the filing of the present second appeal.

Mr. Puneet Jindal, learned Counsel appearing on behalf of the appellants has contended that in fact the plaintiff-respondent did not have any money and as such was not in a position to get the sale deed registered. He has adopted all these tactics to get over difficult situation created by his own doings. Highlighting the fact that the agreed date for executing the sale deed was 25.3.1990 and there was no valid extension of this period, the counsel has submitted that the decree sought by the plaintiff -respondent could not have been granted. Counsel has highlighted that Charanjit Singh PW2 in fact was a property dealer. He has also disputed the factum of extension of time first to 31.7.1990 and then to 1.10.1990. He points out that though the extension of time upto 31.7.1990 was written on the back side of the photostat copy of the agreement, yet no such endorsement could be found in regard to the extension of time from 31.7.1990 to 1.10.1990 though admittedly appellant No. 2 Harminder Singh was present before the Sub Registrar where the time is alleged to have been extended. He has also highlighted that extension of time had been got done from one of the appellants namely, Mohan Singh, whereas no such endorsement was made by Harminder Singh appellant No. 2. Pointing out that Mohan Singh and Harminder Singh appellants are illiterate persons and as such have been tricked into by the smart property dealer, who did not have even resources and money to buy this property. The counsel pointed out that on 31.7.1990 one of the appellants was available and got his attendance marked before the Sub Registrar whereas the respondent -plaintiff never came present. This attendance certificate is on the record as Ex.D1. It has, accordingly, been pleaded that the trial Court as well as first Appellate Court have wrongly allowed the suit for joint possession by way of specific performance without proper appreciation of evidence on record.

Mr. A.K. Chopra, learned Senior Advocate appearing on behalf of the respondent, however, has controverted the submissions made by Mr.Jindal. Counsel would submit that having regard to the bad attention of the appellants, respondent had filed a suit for injunction on 31.7.1990 even prior to the relevant date for executing the agreement, which would indicate that he was always ready and willing to perform his part of the contract. He would then submit that the plaintiff-respondent did not lose any time in filing the suit for specific performance, which he did on 20.11.1990 immediately when the date of execution of the agreement had expired. Rebutting the submissions made by the appellants'' counsel that he did not have resources and actual amount available with him to get the sale deed executed, counsel would submit that at no stage, the appellants had shown their readiness to execute the sale deed during the pendency of the suit and if they had so done, then respondent-plaintiff would have shown the availability of the money with him. It has, accordingly, been submitted by the counsel that no interference is called for in the judgment and decree passed by the trial Court as well as by the first appellate Court.

Having regard to the rival contentions raised by the parties, the main issue required to be determined in this case is to see if the plaintiff respondent had money to get the sale deed executed or not. Incidental to this would be an issue if there was any valid extension of time. The controversy is narrow as otherwise there is no dispute between the parties in regard to execution of the agreement. The parties, however, are at variance in regard to the amount of earnest money passed. Broadly speaking the defence of the appellants was that earnest money of Rs. 4 lacs was never paid to the vendee/defendant-appellants. In fact only Rs. 1 lac in cash had been paid, whereas fraudulently it has been entered as four lacs in the agreement. It has also been stated that the appellants have always been ready and willing to perform their part of contract and the plaintiff respondent was not ready and willing and was not having remaining sale consideration with him. It is also the case of the appellants that the extension by one of the appellant was not valid and time was the essence of contract.

Learned Single Judge after appreciating the evidence came to conclude that the time had been extended because the present appellants had admitted the receipt of Rs. 1 lac on 26.8.1989. From this, he has also concluded that this would indicate that a sum of Rs. 4 lacs was received by them on 26.8.1989. He also found that time was never the essence of this contract as can be seen from the fact of extension granted. Dealing with the submission that this extension had only been granted by Mohan Singh appellant and not Harminder Singh appellant, learned Judge found that Harminder Singh never gave any notice to the plaintiff-respondent indicating that he was no more bound by the agreement. Asking a rustic villager like Mohan Singh and Harminder Singh to give notice that they were not bound to execute the sale deed because of lapse of time, which, according to them, was in essence, would be expecting little too much. It also cannot be said that the time in this case was not essence. It is seen from the evidence that only Mohan Singh appellant No. 1 had agreed to extend the date of execution. Appellant No. 2 never agreed or signed for extension. Even if it is believed that the time agreed for execution of the agreement was extended validly, then also the sale deed was required to be executed upto 1.10.1990. On this date, the respondent-plaintiff failed to appear before the Sub Registrar. Appellant No. 1, however, appeared before the Sub Registrar with income tax clearance as is seen from Ex.DW2/1 and Ex.DW3/1. Copy of attendance certificate is at Ex.DW3/1. We can thus notice that trial Court as well as the learned Single Judge had not properly applied themselves to see that if the plaintiff-respondent had the resources and the money to get the sale deed executed being ready and willing to perform his part of contract. The outcome of the case basically would depend upon the availability of the money and resources with the plaintiff. Learned Single Judge has non suited the appellants by saying that they could have agreed to execute the sale deed before the Court and then the respondent could have shown that he had money with him. Once time for executing the sale deed was over, we see no reason to say that yet the appellant-defendants should have made a statement before the Court in the month of November or December or any subsequent stage thereafter to the effect that they were still ready and willing and inclined to get the sale deed executed. It needs to be noticed that the present suit had been filed by the plaintiff-respondent and it was for him to show that he was ready and willing to perform his part of contract. He could have shown his readiness and willingness to perform his part of contract by showing that he had with him the requisite resources and money ready. Finding fault with the conduct of the defendant-appellants, as done by the learned Single Judge, to say that the plaintiff-respondent would have shown the availability of money with him in case they had agreed for execution of the sale deed, would be putting burden on them, which did not lay on them in any manner. It can be seen from the evidence that on 31.7.90 the respondent/plaintiff failed to appear before the Sub Registrar for execution of sale deed whereas appellant No. 2/defendant did appear before Sub Registrar as is noticed from the document Ex.DW1/1, which was proved by DW3 Santosh Sehgal, Clerk in the office of Sub Registrar. Principle governing the seeing readiness and willingness to perform contract is now settled by the various pronouncements. Mere statement in the plaint or statement of readiness and willingness alone is not sufficient. It is required to be seen from the attending circumstances and then real position is to be ascertained. It has been held by the Hon''ble Supreme Court in N.P. Thirugnanam (D) by L.Rs., Vs. Dr. R. Jagan Mohan Rao and others, that to see 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.

It was further said that amount of consideration which he has to pay to the defendant must of necessity be proved to be available and this is to be done right from the date of execution till the date of the decree and further that he must prove that he has always been ready and willing to perform his part of contract. It was observed by the Hon''ble Supreme Court in Sukhbir Singh and others Vs. Brij Pal Singh and others, that the presence before Sub Registrar and waiting for a party is a positive fact to prove that they had necessary funds and then they can show that they had the capacity to pay the said consideration. It can thus be discerned that it is incumbent upon the buyer to show or prove resources if not funds at the date of execution. In the present case, the respondent was not present before the Sub Registrar, which could have indicated that he had the funds. The respondent has also not been able to establish that he had the resources. In N.P. Thirugnanam (D) by L.Rs''s case (supra), dismissal of suit for specific performance was held justified when it was found that plaintiff buyer was never ready with resources and money. The readiness and willingness to perform the essential terms of the contract were required to be proved by the respondent-plaintiff. Mere filing of the suit cannot lead to an inference that a particular party is ready and willing to perform his part of contract. This was so held by the Hon''ble Supreme Court in Pushparani S. Sundaram and Others Vs. Pauline Manomani James (Deceased) and Others, . One of the important circumstance in this regard to see is the availability of the resources. No evidence has been pointed out before us to indicate that the respondent plaintiff had the money and the resources at his command to perform his part of the contract. Rather the evidence of PW2 and PW3 would show that they were not ready and willing to perform their part as they did not have resources. PW3 while under cross-examination stated as under:

At the time of agreement I was doing business of rice sheller. At the time of writing agreement I had gone to Tehsil with a sum of Rs. 4 lacs cash. This money was neither withdrawn from bank nor from sheller my business, this money was not taken as loan from anybody rather they were lying at my place. I cannot say from where those 4 lac rupees had come. xxx xxxx xxxx This is correct that there is condition in the agreement that we can get as many registrations done. It is right that if the registration amount is less than 2 lacs then there is no need of income tax clearance certificate. In agreement there is nothing mentioned regarding tenants. There was conversation only regarding the possession. This was also stated at that time that not one rather more registered deeds would be got executed, this statement was recorded in the agreement. Xxx xxxx xxx I had not given any notice in writing to defendants Harminder Singh and Mohan Singh that they should come for the registration. Most of the time I had gone to Charanjit Singh. He has been giving further messages. I had gone to meet defendants in March, 1990 along with Charanjit Singh, I cannot tell the date. I had not taken money along with me on that date, I had some money in my house and some money was to be withdrawn from bank.

It can further be seen from his cross-examination only that he had never gone to the office of Sub Registrar for extension of time on 31.7.90. At that time also, witness Charanjit Singh had gone to the Tehsil Office. His version that time was extended at the instance of appellant Mohan Singh as such cannot be accepted as he was admittedly not present at the time of such extension. He also conceded that he never gave any notice in writing to the appellants requiring them to register the sale deed and that he had not gone to the office of Sub Registrar on 1.10.90. All this would make it appear that he had filed the suit for injunction just only to get over his difficulty of not having requisite funds or resources. In contrast to this, the appellants had appeared before Sub Registrar on 1.10.90 and evidence in this regard has been produced as referred to above. If the respondent-plaintiff had the resources and was interested in getting the sale deed executed, he was bound to or was expected to appear before Sub Registrar on 1.10.90, which he admittedly did not. Since this essential circumstance indicating readiness and willingness is missing, it can be said that being ready and willing to perform this part of contract was a mere averment by the plaintiff-respondent in the suit. This, in our view, is one of the very important circumstances, which the plaintiff has not been able to establish. We cannot endorse the view of the learned Single Judge, that the plaintiff-respondent was never directed to produce the actual money and that the appellants could have called upon him to do so, to ignore the same. Since this important aspect has not been established on record by the plaintiff-respondent, we cannot say that the present appellants were taking advantage of their wrong. Appellants have been present before the Sub Registrar at both the relevant dates fixed for executing the sale deed. We also cannot ignore this fact that prices of the property have risen phenomenally. In Surjit Kaur Vs. Naurata Singh and Another, it was held by the Supreme Court that where contract itself sets out compensation payable then the Court must abide by it. Specific performance being an equitable relief, the court has to strike a balance of equities between the parties having regard to all the relevant aspects, including the lapses which occurred and the parties respectively responsible thereof. Where the grant of such relief appears to the Court to be iniquitous, due to escalation of real estate, the Court is not obliged to grant the relief merely because it is lawful to do so. See Nirmala Anand Vs. Advent Corporation Pvt. Ltd. and Others, in this regard. Courts are required to strike balance of equities. Taking all these factors into consideration, we would hold that the plaintiff-respondent has not been able to establish if he had funds and as such it cannot be said that he was ready and willing to perform his part of contract. We, accordingly, would allow this appeal and set aside the judgment of the trial Court as well as of the first appellate Court leaving the parties to bear their own costs.