Silvian Noronha vs B.R. Banu Jayaram

K.L. Manjunath, J.—The appellant is questioning the legality and correctness of the judgment and decree passed by the XI Additional City Civil Judge, Bengaluru in OS No. 8720 of 2006 dated 25-9-2014. The appellant was the plaintiff and the respondent was the defendant in the suit.

For the sake of convenience, the parties would be referred to as per their status before the trial court.

The plaintiff instituted the aforesaid suit for specific performance of the contract dated 14-1-2001, requesting the court to direct the defendant to receive the balance sale consideration and execute the sale deed in his favour. According to the plaint averments, the defendant is the owner of the suit schedule property, which is a residential building bearing House list No. 143/B, situated at Benniganahalli village, K R Puram hobli, now Bangalore east taluk, measuring 3275 sqf. According to the plaintiff, he entered into an agreement for purchase of the suit schedule property on 14-1-2001 for a total sale consideration of Rs. 15.25 lakh and he paid a sum of Rs. 7.00 lakh on the date of agreement and he was put in possession of the property as part performance of the agreement. It is the specific case of the plaintiff that the sale transaction was required to be completed within three months from the date of agreement subject to the defendant fulfilling certain conditions. Since the defendant did not make out a clear marketable title to the suit schedule property, though the plaintiff was ready and willing to perform his part of the contract, the execution of the sale deed was being postponed. It is also the case of the plaintiff that in December, 2002, on the request of the defendant, a further sum of Rs. 1.00 lakh was paid in cash. Further, a sum of Rs. 1.00 lakh was paid on 1-10-2003, the plaintiff paid a further sum of Rs. 1.00 lakh to the defendant. Again, on 30-10-2003, the defendant demanded a further amount and accordingly, the plaintiff paid a further sum of Rs. 1.00 lakh to the defendant. Thus, in all, the plaintiff paid a sum of Rs. 10.00 lakh to the defendant towards the sale consideration. It is the further case of the plaintiff that though he was ready and willing to pay the balance sale consideration of Rs. 5.25 lakh, the defendant did not execute the sale deed. Therefore, after getting issued a legal notice, he filed the suit for specific performance of the contract on 29-9-2006.

The defendant contested the suit. She admitted the execution of the agreement of sale. According to her, she agreed to sell the suit schedule property for her legal necessity and that she received a sum of Rs. 5.00 lakh as advance sale consideration on the date of execution of the agreement, out of which Rs. 1.00 lakh was paid by way of cheque and the remaining amount in cash. The plaintiff had agreed to pay Rs. 3,750/- per month as rent to the defendant, but he has failed to pay the same. She also admitted receipt of a further sum of Rs. 2.00 lakh towards the total sale consideration, for which she has issued receipts. According to the defendant, she has received a total advance sale consideration of Rs. 7.00 lakh and not Rs. 10.00 lakh, as claimed by the plaintiff. She denied the execution of the receipts for the remaining sum of Rs. 3.00 lakh, as contended by the plaintiff. She also contended that receipts dated 13-12-2002, 1-10-2003 and 30-10-2003 are all concocted and fabricated documents and that she has not received any amount under those receipts. It was also the case of the defendant that the plaintiff was not ready and willing to perform his part of the contract, since he had no capacity to make the payment. It is the specific case of the defendant that on 13-8-2006, she had got issued a legal notice calling upon the plaintiff to vacate and hand over the possession of the suit schedule property by terminating the tenancy and suppressing the issue of legal notice dated 13-8-2006 by the defendant, the plaintiff filed the present suit. Therefore, she requested the court to dismiss the suit, since the plaintiff has not made out any case for grant of discretionary relief of specific performance. According to the defendant, for her immediate legal necessity she had agreed to sell the suit schedule property, as she being a widow having a son and a daughter. The plaintiff did not make the payment within a reasonable time and therefore he is not entitled for the relief sought for.

Based on the rival contentions of the parties, the trial court has framed the following issues:

"1. Whether the plaintiff prove that he has paid a sum of Rs. 1,00,000/- towards the part of sale consideration amount on 13.12.2002 or on 01.10.2003 and on 30.10.2003 and issued an acknowledgment/receipts?

Whether the plaintiff prove that he has been always ready and willing to perform his part of the contract?

Whether the defendant prove that the above acknowledgment/receipt are materially altered?

Whether the time is the essence of the contract?

Whether the suit is barred by the law of limitation?

Whether the plaintiff is entitled for the relief of Specific Performance of Contract?

Whether the plaintiff is entitled for the relief of Permanent Injunction as sought for?

What Order or Decree?"

In order to prove their respective case, on behalf of the plaintiff, three witnesses have been examined as PWs 1 to 3. Amongst them, P.W. 1 is the plaintiff and PW3 is the bank manager, who has been examined to show that the bank has sanctioned a loan in favour of the plaintiff for the purchase of the suit schedule property. Plaintiff relied on Ex. P1 to 10. On behalf of defendant, the defendant was examined herself as D.W. 1 and she relied on Ex. D1 to 4. The trial court, after appreciation of the evidence let in by the parties, has answered issues 1 and 4 in the affirmative, issues 2, 3, 4 and 7 in the negative and issue No. 6 partly in the affirmative and partly in the negative, and ultimately the court below came to the conclusion that the plaintiff is not entitled for the relief of specific performance. However, the court below ordered refund of a sum of Rs. 8.00 lakh with interest at the rate of 6% p.a. from the date of suit till realization to the plaintiff by the defendant. This judgment and decree is called in question in this appeal by the plaintiff in the suit.

It is the specific contention of Sri Arun Ponnappa, learned counsel for the appellant-plaintiff, that the trial court has committed an error in not granting the relief of specific performance to the plaintiff. According to him, when the court below has held that time is not the essence of the contract and when the suit was filed well within the time, there was no justification for the court below not to grant the discretionary relief in favour of the plaintiff. According to him, the reason assigned by the court below for not granting a decree of specific performance is not in accordance with law and therefore he requests the court to re-appreciate the evidence and set aside the findings of the trial court. He further submits that when the trial court has held that the plaintiff has proved the payment of Rs. 10.00 lakh, it was not justified in ordering refund of Rs. 8.00 lakh only. In the circumstance, he requests the court to allow the appeal and set aside the judgment and decree passed by the trial court and direct the respondent-defendant to execute the sale deed by receiving the balance sale consideration.

Per contra, Sri S Subhash, learned counsel for the respondent-defendant, submits that the trial court is justified in holding that the plaintiff has not approached the court below with clean hands. According to him, the plaintiff has suppressed material facts before the court. According to him, Ex. P2 to 4 are concocted and created documents and the same have not been proved by leading cogent evidence. It is also the case of the learned counsel for the respondent-defendant that though the court below has come to the conclusion that Ex. P2 to 4 are not proved, it has erroneously held that the plaintiff has proved payment of Rs. 10.00 lakh. Therefore, he submits that the trial court is justified in directing the defendant to pay only a sum of Rs. 8.00 lakh. He further submits that even though the time is not essence of the contract, the conduct of the plaintiff amply proved that the plaintiff has not approached the court within a reasonable time. He further submits that when a property in Bengaluru was agreed to sell for a sum of Rs. 15.25 lakh in the year 2001 with a specific condition that the sale transaction shall be completed within three months from the date of execution of the agreement, no man of prudence would wait for over a period of five years to file a suit for specific performance. According to him, even if the defendant had not produced the khata certificate to show that the khata was transferred to her name in the municipal records, nothing prevented the plaintiff from approaching the court for grant of specific performance of the contract by depositing the balance sale consideration. The very conduct of the plaintiff in not depositing the balance sale consideration within the stipulated time and non-approaching the court within a reasonable time and also non-payment of rents payable to the defendant in spite of demanding the same from the plaintiff, only show the conduct of the plaintiff. Therefore, he requests the court to dismiss the appeal.

Having heard the learned counsel for the parties, we have to consider the following points in this appeal:

"(i) Whether trial court has committed any error in not granting a discretionary relief of specific performance?

(ii) Whether the trial court has committed any error in ordering refund of Rs. 10.00 lakh, as demanded by the plaintiff?"

Re: Point (i):

Admittedly, the defendant had agreed to sell the suit schedule property in favour of the plaintiff under the agreement dated 14-1-2001. Three months'' time was stipulated for competition of the entire sale transaction. According to the plaintiff, time is not an essence of the contract and that though he was ready and willing to perform his part of the contract, the sale could not be concluded on account of the fault on the part of the defendant, as she failed to get transferred the khata to her name. According to the plaintiff, he approached the defendant on 1-10-2003, requesting her to execute the sale deed. On that date, the defendant demanded a further sum of Rs. 1.00 lakh towards the balance sale consideration and the same was paid by the plaintiff.

Even if we accept that there was a demand for a sum of Rs. 1.00 lakh by the defendant in October 2003 and even if the trial court has rightly held that the suit filed by the plaintiff is well within three years from the date of last payment, the fact remains that the plaintiff has not approached within a reasonable time. Though the agreement is in January, 2001, the plaintiff filed the suit on 29-9-2006 i.e. more than five years and eight months after the execution of the agreement. Merely because the suit is well within three years from the date of last payment, that cannot be the sole ground for any court to grant a discretionary relief. In this case, the trial court in para-29 of the judgment has considered the case of the plaintiff in detail and held that the plaintiff is not entitled for the discretionary relief of specific performance vested under Section 20 of the Specific Relief Act, 1963. The trial court has given cogent reasons for refusing grant of relief of specific performance, on the ground that the plaintiff did not approach the court within a reasonable time and that the plaintiff has suppressed material fact of issuance of a legal notice by the defendant much prior to the issuance of legal notice by the plaintiff. The trial court has also come to the conclusion that when the defendant is a widow having a minor son and a daughter and if an order directing the defendant to receive the balance sale consideration and execute the sale deed at this belated stage, it would cause more hardship to the defendant than the plaintiff. In these circumstances, if the court below has come to the conclusion that the plaintiff is not entitled for the discretionary relief, this court cannot find fault with the same. In addition to that, the plaintiff has not even paid the rent for the premises in question and he is squatting on the property, which only shows the conduct of the plaintiff. Such conduct definitely disentitles the plaintiff in getting the discretionary relief. Accordingly, we answer the first point against the plaintiff and in favour of the defendant.

Re: Point (ii):

In so far as the second point is concerned, we have seen that the trial court has rightly come to the conclusion that the plaintiff has proved the payment of Rs. 10.00 lakh. Having held so, we are at loss to understand how the trial court can direct the defendant to refund only a sum of Rs. 8.00 lakh with interest at the rate of 6% p.a. In view of the finding of the trial court that Ex. P2 to 4 are proved by the plaintiff, the trial court has erred in directing refund of only Rs. 8.00 lakh by the defendant to the plaintiff. Accordingly, we hold that the appellant-plaintiff is entitled for refund of a sum of Rs. 10.00 lakh with interest. Considering the escalation in the cost of properties in Bengaluru, we are of the view that granting of interest at the rate of 6% p.a. is on the lower side and the same is required to be enhanced to 15% p.a. The second point is answered accordingly.

In the result, the appeal is allowed in part. The finding of the trial court that the plaintiff is not entitled for a decree of specific performance is confirmed. However, the judgment and decree of the trial court in ordering refund of Rs. 8.00 lakh is modified holding that the plaintiff is entitled for refund of Rs. 10.00 lakh with interest at the rate of 15% p.a. from the date of suit till payment. Taking into consideration the facts and circumstances of the case, we direct the parties to bear their own costs.