R. Krishnamurthy vs Vel Jayakumar and Others

S. Vimala, J.—The unsuccessful plaintiff, for whom the relief of specific performance was denied by the trial Court, is the appellant. The

plaintiff filed the suit for specific performance seeking direction to the defendants to execute the sale deed in favour of the plaintiff, pursuant to the

sale agreement executed between the plaintiff and the deceased Velusamy. The legal representatives of the deceased Velusamy are the defendants.

The first defendant is the son, second defendant is the wife and the third defendant is the daughter of the deceased Velusamy.

Brief facts of the case are as follows : The deceased Velusamy and the plaintiff entered into the sale agreement dated 8-8-2003, with regard to

the suit property measuring an extent of 2.00 acres of land, each acre having been priced at Rs. 34.50 lakhs. Towards payment of advance. Rs.

1.00.000/-was paid by cash and Rs. 9 lakhs was paid by way of cheque. Prior to the suit sale agreement dated 8-8-2003, the deceased had

entered into a sale agreement with regard to the very same property with one Ravichandran and also had received some consideration. Under the

suit sale agreement, the deceased was under an obligation to give the property free from encumbrance. The deceased had promised to clear the

encumbrance, but he could not settle the issue with Ravichandran. Therefore, the plaintiff instructed the bankers not to honour the cheque if and

when it is presented by the deceased Velusamy and therefore, at his instruction the banker dishonoured the cheque. Despite the defendants

evading to settle the issue with Ravichandran, the plaintiff gave a sum of Rs. 9 lakhs by way of cash and got back the dishonoured cheque.

2.1. The case of the plaintiff is that he paid a sum of Rs. 2,00,000/- to Ravichandran towards settlement of the earlier sale agreement dated 12-6-

1994 and got the endorsement of payment on 16-4-2004. The son of the deceased Velusamy took the original sale agreement from the plaintiff,

on the guise of obtaining endorsement for receipt of money but did not return the sale agreement. In the meantime, the plaintiff issued a paper

publication in Dinamalar cautioning the public not to purchase the suit property. On 20-6-2004, there was yet another paper publication issued at

the behest of one Senniappan, giving alert to the public that he is intending to purchase the very same property. On 3-10-2004, the plaintiff issued

paper publication controverting the averments made in the paper publication issued by Senniappan. The plaintiff also issued notice to the

defendants through his counsel calling upon them to settle the matter with Ravichandran and then to execute the sale deed in favour of the plaintiff.

The defendant issued a reply notice under Ex. A2 making clear of his intention to sell the property in favour of Senniappa Gounder and that he

would not execute the sale deed in favour of the plaintiff, as he is not entitled to get the sale deed executed. Finding no other way out the plaintiff

filed the suit for specific performance.

The defendant contested the suit on the following grounds :

(a) The plaintiff is not entitled to specific performance because (a) By virtue of the express terms and conditions of the sale agreement dated 8-8-

2003, time was made as essence of contract and the plaintiff having failed to perform his part of the contract within the stipulated time of six

months and as he is guilty of breach of obligations undertaken by him in the sale agreement, he must be non-suited.

(b) The dishonour of cheque issued by the plaintiff for Rs. 9.00.000/- will speak about the insolvent condition of the plaintiff apart from showing

the unwillingness on the part of the plaintiff to perform his part of the contract. The inability of plaintiff even to pay the balance of advance amount

Rs. 9,00,000/-will bring to light his financial incapacity.

(c) The plaintiff did not pay Rs. 2,00,000/-to Ravichandran, the earlier agreement holder and if really it had been paid, it was not at the instance of

the deceased. He had been voluntarily blind in making the payment as the agreement was not at all in force.

(d) The defendants never took the original sale agreement from the plaintiff with a promise to get the endorsement for payment. Only when the

plaintiff made it clear that he was incapable of purchasing the property and when he also agreed to put an end to the agreement after the receipt of

advance amount, the defendant, as agreed by the plaintiff, after returning the advance amount got back the original sale agreement. This act of the

defendant was out of magnanimity and even though the defendants are entitled to confiscate the advance amount, still the defendants did not do it

and repaid the advance amount. Therefore, the suit based upon the cancelled agreement is untenable and baseless and hence, the suit must be

dismissed.

Issues in trial Court : Before the lower Court, the plaintiff has been examined as P.W. 1 and Exs. A1 to A9 have been marked. On the side of

the defendants, first defendant has been examined as D.W. 1 and one Senthil Kumar has been examined as D.W. 2 and Exs. B1 to B5 have been

marked.

The lower Court has tried the suit on the following issues:

Whether the plaintiff was always ready and willing to perform his part of contract of sale?

Whether the plaintiff has got sufficient means to complete the transaction?

Whether the first defendant returned the advance amount and the sale agreement dated 8-8-2003 is cancelled?

Whether the plaintiff is entitled to get the relief of specific performance?

To what other relief the plaintiff is entitled to?

4.1. Findings of trial Court : The trial Court has given a specific finding that the plaintiff had neither sufficient means to pay the balance of sale

consideration and to complete the sale transaction nor he was ready and willing to perform his part of the contract and therefore he is not entitled

to the relief of specific performance and with these findings, the suit was dismissed.

Contention of the appellant/plaintiff in the appeal : As against the dismissal of the suit, now the present appeal has been filed by the plaintiff inter

alia with the following contentions.

(1) Time is not an essence of contract as Ex. A1 suit sale agreement pertains to sale of agricultural land, i.e. immovable property. In any event, the

defendants having received a sum of Rs. 9,00,000/- after the expiry of deadline fixed in the agreement, thereby led the plaintiff to believe that the

time is not the essence of contract.

(2) The dishonour of the cheque should not have been construed as amounting to proving the insolvent condition of the plaintiff, as the cheque was

dishonoured only at the instruction of the plaintiff/appellant. The plaintiff had to instruct the banker to dishonour the cheque as the defendant failed

to discharge his duty of settling the issue regarding prior sale agreement with Ravichandran.

(3) The income tax returns which are tiled under Exs. A7 to and A9 should have been taken as sufficient proof of solvent condition of the plaintiff.

The contention of the respondents/defendants is that the plaintiff was penniless and he was never willing to perform his part of the contract.

Further contention of respondents/defendants is that the defendants repaid the advance amount mentioned in the agreement in the presence of

witnesses and plaintiff cancelled the agreement and handed over the sale agreement to the defendants. It was further argued that on proper

appreciation of oral and documentary evidence dismissal of the suit by the trial Court is perfectly justified.

In view of the rival contentions, the following points arise for determination in this appeal :

Whether the time was agreed as the essence of contract in respect of the suit sale agreement dated 8-8-2003?

Whether the plaintiff was ready and willing to perform his part of a contract?

Whether the trial Court was justified in dismissing the plaintiff''s suit for specific performance?

Contention on ""lack of Pleadings"" :

The learned Counsel for the respondent vehemently contended that the plaintiff not only failed in proving that he was ready and willing to perform

his part of a contract, but also failed to make an averment regarding the same in the plaint itself and as there is fundamental and foundational

mistake the non-suiting of the plaintiff who is fighting a blackmailing litigation is legal and valid. The defendants claimed that it is a clear case of non-

performance of the plaintiff and therefore, the plaintiff has absolutely no case.

In support of the above contention, learned Counsel for respondent relied on various decisions.

(1) Manjunath Anandappa Urf. Shivappa Hanasi Vs. Tammanasa and Others, wherein the Supreme Court has held as follows :

Plaintiff in suit for specific performance of contract should specifically plead that he had all along been and even on date of suit was ready and

willing to perform his part of contract and prove same -- Pleading readiness and willingness is mandatory.

(2) Abdul Khader Rowther Vs. P.K. Sara Bai and Others, wherein it has been held as follows :

His plaint did not contain the requisite allegation that he is ready and willing to perform his part of the contract in terms of Forms 47 and 48 which

was necessary to obtain a decree for specific performance.

(3) N.P. Thirugnanam (D) by L.Rs., Vs. Dr. R. Jagan Mohan Rao and others, , wherein the Supreme Court has held as follows :

...........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......

(4) Man Kaur (dead) by LRS. Vs. Hartar Singh Sangha, wherein the Supreme Court has held as follows :

plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his

obligations under the contract in terms of the contract"" Evidence Act, 1872, S. 101 -Specific Relief Act, 1963, S. 16(c).

The same principle was reiterated in Raj Kishore (Dead) By L.Rs. Vs. Prem Singh and Others,

Section 16(c) of the Specific Relief Act mandates the plaintiff to aver in the plaint and establish that he has always been ready and willing to

perform his part of the contract. Therefore, it is necessary to look into the averments made in the plaint. The settled principles in construing a plea

in any pleading are (a) Court 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, (b) No specific phraseology or language is required to take such a plea, (c) It is not the letter and form but the

spirit and substance that has to be looked into. The Court cannot and should not expect the pleadings to look like the mathematical formulae or a

chemical equation and the Court should look into the entirety of the averments made in the plaint and to find out the real meaning of the averments.

In view of the contention that the plaint is lacking in basic averments as to readiness and willingness of the plaintiff it is necessary to find out

whether the plaint contains such an averment or not. We have carefully perused the entire plaint. By perusal of the entire plaint, it is seen that the

plaintiff did not make out a case to establish that the plaintiff was ready and willing to perform his part of the contract. In the plaint, there is no

averment as to the readiness and willingness on the part of the plaintiff to perform his part of the contract. In the absence of such averment, it

cannot be said that the mandatory requirement of Section 16(c) has been satisfied.

In order to appreciate this contention, one has to look into the terms and conditions prescribed in the agreement itself. As per Ex. A1, the

following are the terms.

If the plaintiff fails to pay the balance within the stipulated time the agreement would become unenforceable and the plaintiff will not be entitled to

specific performance. If the defendants fail to execute the sale deed, despite the plaintiff paying the full sale price within the stipulated time the

plaintiff shall pay the balance into Court and get the sale deed executed through Court.

Readiness and willingness to perform on the part of the plaintiff can be adjudged/ appreciated, only if the Court finds out whether time is

essence of the contract or not. Now the contention as to whether the time is the essence of the contract or not has to be looked into. Normally, in

respect of the agreement for sale of immovable property the presumption is that the time is not the essence of contract. The Constitution Bench of

the Supreme Court in Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs., has held that it is well settled principle that in the

case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the

essence of contract.............The Hon''ble Supreme Court in the same Chand Rani''s case, after examining in detail the precedent in this regard

finally concluded..............""it is clear that in the case of sale of immovable property, there is no presumption as to time is being the essence of

contract. Even if it is not of essence of the contract, the Court may infer that it is to be performed within a reasonable time, if the conditions are (a)

from the express terms of the contract (b) from the nature of the property and (c) from the surrounding circumstances. Therefore, now it is

necessary to look into the express terms of the contract and the surrounding circumstances.

Perusal of Ex. A1 sale agreement reveals that there is a penalty clause. The agreement provides for penalty of forfeiture of advance amount

and the risk of the agreement being cancelled if the plaintiff fail to pay the sale consideration within six months from the date of agreement. If the

defendants fail to execute the sale deed after the receipt of entire sale consideration, then the plaintiff is given the right of paying the balance sale

consideration into Court and get sale deed executed through Court. The terms and conditions of the sale agreement give an impression that time

had been understood to be an essence of contract between the parties.

The Hon''ble Supreme Court in the decision reported in Civil Appeal Nos. 7254 to 7256 of 2002 reported in Mrs. Saradamani Kandappan

Vs. Mrs. S. Rajalakshmi and Others, has observed as follows :

Now there is galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are

no longer stable or steady. We can take judicial notice of the comparative purchase power of the property in the year 1975 and now as also steep

increase in the value of the immovable properties between then and now.

It has also been observed in the judgment that the steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific

performance where the purchaser does not take steps to complete the sale within the agreed period and the vendor has not been responsible for

any delay or nonperformance.

Now, it is for the Court to consider whether the delay or non-performance is on the part of the plaintiff or on the part of the defendants. The

contention of the plaintiff is that the defendant is guilty of non-performance in not clearing the encumbrance over the property covered in the sale

agreement (Ex. A2) between the deceased Velusamy and one Ravichandran.

The plaintiff would contend that he had taken the pain of clearing the encumbrance by paying a sum of Rs. 2,00,000/- to Ravichandran under

Ex. A2 endorsement and the defendants who are duty bound to do that, failed to perform their promises. Even though it is claimed by the plaintiff

that he has paid a sum of Rs. 2,00,000/- as per Ex. A2 endorsement, it is not proved as per law. This contention cannot be accepted because

under Ex. A1 agreement there is no obligation imposed upon the plaintiff to discharge Ex. A2-Sale Agreement. Despite the specific suggestion that

the defendants never instructed the plaintiff to pay a sum of Rs. 2,00,000/-to Ravichandran, the plaintiff has not chosen to examine Ravichandran.

Moreover, the perusal of Ex. A2 endorsement reveals that it did not contain the signature of the defendants or the deceased Velusamy. If really the

plaintiff had paid a sum of Rs. 2,00,000/-towards clearing the encumbrance, for the purpose of getting the sale deed executed as per Ex. A1 any

prudent person, under normal circumstances, would have taken the signature of the defendants. That is not the case here. Therefore, the contention

of the plaintiff that he took steps to get the encumbrance cleared is not acceptable.

One more circumstance which has to be taken into consideration is that in the evidence during cross-examination, the plaintiff has stated that he

came to know about the sale agreement between Ravichandran and the deceased Velusamy even on the date of Ex. A1 sale agreement. If that be

the case, either immediately, the plaintiff should have issued a notice calling upon the defendants to clear the encumbrance or the plaintiff should

have issued a notice calling upon the defendants to cancel the sale agreement. Nothing has been done. These circumstances would probablise the

contention of the defendants that the plaintiff is willfully ignorant in contending that he took steps to clear the encumbrance. The plaintiff has tried to

inject life into dead agreement for the purpose of gaining some more time to pay or for the purpose of giving an explanation for the delay in

payment of balance of sale consideration.

Payment of consideration : The learned Counsel for defendants has contended that the plaintiff has not chosen to pay the balance of sale

consideration within a period of six months and even the advance amount itself had been paid only after the expiry of six months. The fact remains

that out of the agreed advance amount (Rs. 10,00,000/-) Rs. 1,00,000/- was paid by way of cash and Rs. 9,00,000/- by way of cheque on the

date of agreement. The cheque was dishonoured. It is the case of the plaintiff that he instructed the banker to stop the payment because there was

an encumbrance i.e. earlier sale agreement. But, there is no evidence to show that the cheque was dishonoured only on account of the instruction

given by the plaintiff. The cheque has been returned with the endorsement of ''insufficient funds''. Therefore, the probability is that the plaintiff had

no money to pay the advance.

The contention of the plaintiff is that inasmuch as the balance of advance amount of Rs. 9,00,000/- having been received by the defendants

even after the expiry of six months. it would amount to waiver of the condition as to time as the essence of contract.

This contention cannot be accepted because what was payable as on the date of agreement as advance has been paid after a lapse of six

months. In any event, believing that with fond hope that at least within a reasonable time, the plaintiff would perform his part of the contract, the

defendants might have accepted the money. Even assuming that there was waiver of time as essence of the contract, still the plaintiff did not

perform his part of the contract within a reasonable time after the expiry of the time prescribed in the agreement.

The plaintiff has contended that the income tax returns which was filed as Ex. A7, dated 16-10-2004. Ex. A8 dated 31-10-2004. Ex. A9

dated 29-10-2005, provide ample proof, he was a man of means and therefore, his financial soundness cannot be doubted. But, this contention

also is incorrect, as the plaintiff has admitted that he had accounts in twenty banks and even the collecting the entire amount available in all the 20

banks together, he did not have nine lakhs rupees. This admission is sufficient to show that the plaintiff was not having enough money even to pay

even after the expiry of six months period prescribed in the sale agreement. Therefore, the finding of the trial Court that the plaintiff did not prove

that he was ready and willing to perform his part of the contract is correct and that finding must be confirmed.

Discretionary relief : u/s 20 of the Specific Relief Act, the specific performance is a discretionary remedy. Court is not bound to decree specific

performance merely because it is lawful to do so. It can be seen from section that the discretion of the Court is not arbitrary but sound and

reasonable, guided by the judicial principles and capable of correction by a Court of Appeal. The cases in which the Court may properly exercise

discretion not to decree specific performance has been enumerated in sub-section (2) of Section 20 of Specific Relief Act. They are (i) where the

terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was

entered into are such that the contract, though not avoidable, gives the plaintiff an unfair advantage over the defendant; or (ii) where the

performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve

no such hardship on the plaintiff; (iii) where the defendant entered into the contract under circumstances which though not rendering the contract

voidable, makes it inequitable to enforce specific performance. Under the Specific Relief Act, the Court exercises equitable jurisdiction. Section 20

of the Act makes it clear that the jurisdiction to decree specific performance is discretionary and there is no obligation on the part of the Court to

grant the relief sought merely because it is lawful to do so.

The relief of specific performance is an extraordinary equitable remedy that compels a party to execute the terms and conditions of the contract

according to the precise terms agreed upon between them or to execute it substantially, so that in the given set of circumstance complete justice

will be done between the parties. Since, this relief is given exercising the equity jurisdiction the conduct of the plaintiff should be fair. So far as this

case is concerned, considering the conduct of the plaintiff and the defendants, interest of parties under the sale agreement, it would not be in the

interest of justice to grant the relief of specific performance. There had been inordinate delay in paying even the advance amount. The plaintiff had

chosen to create another dispute in order to purchase time. The galloping raise in price with leaps and bounds should also be considered. Under

such circumstances granting of relief of specific performance would put the defendants into undue hardship and put the plaintiff under an unfair

advantage and therefore, the grant of specific performance would not be in the interest of justice. Hence, the refusal of the relief of specific

performance by the trial Court in justified.

With reference to Ex. A1 Sale agreement, the lower Court has given a finding that the suit is not maintainable because the original sale

agreement is not filed. So far as this case is concerned, the plaintiff has not filed the original sale agreement. But he has offered an explanation as to

non-production of the originals. The contention of the plaintiff is that the plaintiff had handed over the original sale agreement to the defendants in

order to get signature regarding the endorsement of payment. But the defendants would content that after repaying the advance amount paid by the

plaintiff under the sale agreement, he got it back. However, the common elements in the statement of both parties is that the original sale agreement

is in the possession of the defendants. When the fact remains that the original sale agreement is in the hands of the defendants, non-production of

the originals by the plaintiff would not make the suit as not maintainable. The non-production of the original sale agreement, however would be a

circumstance against the plaintiff which would go to show that there is implied cancellation of sale agreement. The plaintiffs case that it is handed

over the same to the defendants for the purpose of getting endorsement is unbelievable because it is admitted that he is a person doing real estate

business and as person well versed in the business, he could not have chosen to hand over the originals. He would have taken caution to get the

signature in the originals and would not have chosen to hand over it.

The contention of the defendants that he got the original sale agreement from the plaintiff after repaying the advance money stands probabilised

because only after 16-8-2004, the public notice has been issued by the intending purchaser Senniappan claiming openly that he is intending to

purchase the property. If really the sale agreement had not been cancelled, the defendants would not have permitted the intending purchaser

Senniappan to issue such a public notice. Through out the conduct of the plaintiff has been to delay and to postpone the payment of consideration

and finding that it was not possible, he has approached the Court may be, in order to gain time. In proper appreciation of evidence, trial Court

rightly held that Plaintiff is not entitled to the discretionary relief of specific performance. The dismissal of the suit by the trial Court is justified and

therefore, the appeal is also liable to be dismissed. In the result, the judgment and decree in O.S. No. 924 of 2004, dated 23-01-2007 on the file

of Additional District and Sessions Judge, Fast Track Court No. 1, Coimbatore is confirmed and this appeal is dismissed with costs.

Consequently, connected M.P. is closed.