Telecommunications Engineering Services Association (India) vs Jasbir Singh and Others

Vikramajit Sen, J.—The suit has been filed for the specific performance of an Agreement to Sell dated 5th September, 1988 in respect of property bearing No. 1/144, Subhash Nagar, New Delhi for a total sale consideration of Rs. 5,10,000/-. This Agreement acknowledges the payment of Rs. 50,000/- received from the Plaintiff by the Defendant. The relevant Clause reads as follows- "That within a period of one months from the date hereof, the first party shall execute requisite documents, such as G.P.A/Agreement/Will/Receipt/Affidavit/Sale Promotion etc. regarding transfer of the said property in favour of the second party or her nominees on receipt of the balance sum of Rs. 4,60,000/- (Rupees four lacs sixty thousand only) before sub-registrar, Delhi and simultaneously the first party shall deliver vacant possession of the said property to the second party on the spot." In paragraph 4 of the plaint it has been stated - "That the balance was to be paid before the Sub Registrar, Delhi at the time of execution of the Sale Deed by defendant No. 1". In paragraph 6 of the plaint it has been averred- "That it was specifically agreed that the defendant No. 1 will get permission to sell the aforesaid property from the Competent Authority and within a month thereafter shall execute the sale deed and the plaintiff was required to pay the balance amount i.e. Rs. 4,60,000/- to the defendant No. 1 at the time of his executing the sale deed before the Sub Registrar, Delhi." In paragraph 11 it is stated- "That the plaintiff has already been ready and willing to and still prepared to purchase the said property and pay the balance amount throughout the said period. The required money lies in the bank account of the plaintiff."

These statements have been specifically denied by the Defendant No. 1. Learned Counsel for the Defendant has contended that his client had been compelled by abject circumstances to sell the property, as money was urgently required by him for the treatment of his wife who eventually succumbed to her liver aliment. He has relied on a legal Notice dated 27.10.1988 calling upon the Plaintiff to pay a balance sum of Rs. 4,60,000/-. In Reply thereto, by a letter dated 4.11.1988 it had been demanded on behalf of the Plaintiff, inter alia, that the contesting Defendant should obtain sale permission, which had not done.

On 4.8.1998 counsel for the Plaintiff stated that the Plaintiff did not propose to lead any oral evidence. The evidence was, however, led by the Defendant by way of an affidavit and the documents filed along therewith were duly exhibited. The matter was placed before Court on 7.1.2003 when on a specific query to counsel for the Plaintiff as to whether he stood by the previous statement for not leading evidence, it was reaffirmed that no evidence was to be led. Right to cross examine the Defendant''s witness was also waived. It is in these circumstances that final arguments have been heard.

The central issue is whether the Plaintiff is ready and willing to perform his part of the contract. Section 16(c) of The Specific Relief Act, 1963 in terms mandates that specific performance of the contract cannot be enforced in favour of a person 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 have been prevented or waived by the defendant. Sub-section (ii) of Section 16(c) further stipulates that the Plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.

The Plaintiff has filed Annexure ''C'' along with the plaint, which is an application for sale permission duly signed by Defendant No. 1 on 6.9.1988, that is one day after the Agreement to Sell. When the relevant Clause is analysed it will be evident that this was the only principal obligation of Defendant No. 1. Use of the words ''Sale Deed'' is conspicuous in its absence in the Agreement to Sell. It has been contended, and in my view correctly so, that the sale permission could not reasonably have been expected to be obtained within thirty days. What was agreed between the parties, therefore, was that within thirty days from the execution of the Agreement to Sell, on Defendant No. 1 signing the application for sale permission, the Plaintiff should have made arrangements for the payment of the balance sale consideration of Rs. 4,60,000/-. In fact, as is evident, from the pleadings as well as of the legal Notice exchanged between the parties, the Plaintiff desired that Defendant No. 1 should execute a Sale Deed. In my opinion there is no room for doubt that the Sale Deed was not in the contemplation of the parties. Keeping the possible impediment in the way of the execution of a Sale Deed before them, the parties had agreed for the execution of General Power of Attorneys, Will etc., which in Delhi are used as substitute title deeds. In these circumstances I hold that the Plaintiff has failed to prove its readiness and willingness to perform obligations contained in the contract, according to its true construction. It is the Plaintiff who has breached the contract by insisting, firstly, on the obtainment of sale permission; and secondly by requiring the execution of a Sale Deed. Specific performance is essentially a discretionary relief and ought not to be granted in favour of the party which has failed to perform all its contractual obligations.

In the course of arguments counsel for the Plaintiff has stated that at least the Earnest Money of Rs. 50,000/- ought to be returned. Learned Counsel for the Defendant has drawn my attention to the unchallenged testimony of the Defendant that due to failure of the Plaintiff to make timely payment, the Defendant had to pay a higher sale consideration for the smaller and cheaper property which he intended to buy out of the sale proceeds of the property in suit. It has been reiterated that the sale of the suit property was necessitated for meeting the medical bills of the Defendant''s wife. Neither on contractual nor on any equitable grounds, therefore, is there any justification for ordering the refund of Earnest Money. Since it is the Plaintiff who has breached the Agreement to Sell, the further question of paying the sum of Rs. 50,000/- as damages does not arise. The suit is dismissed. In the facts of the case the parties shall bear their respective costs.