Vadluri Laxmi vs Kawampelli Mallaiah

The present appeal has been directed against the judgment and decree dated 28.11.2018 in O.S.No.204 of 2012 on the file of the Principal Senior Civil Judge at Karimnagar, wherein and whereby the suit filed by respondent No.1 herein for specific performance of agreement was decreed.

The appellant herein is defendant No.2, respondent No.1 herein is the plaintiff and respondent No.2 herein is defendant No.1 in the said suit. For the sake of convenience, the parties hereinafter are referred to as they are arrayed in the suit.

The sum and substance of the case of the plaintiff is that he entered into an agreement of sale with defendant No.1 for purchase of land admeasuring 484 square yards in Sy.Nos.280 and 281, situated at Kothapelli Village, Karimnagar Mandal and District (hereinafter referred to as ‘suit property’). The said agreement was entered on 30.01.2012 for total sale consideration of Rs.10,00,000/-. On the date of agreement, the plaintiff paid Rs.1,00,000/- and agreed to pay balance amount on or before 31.03.2012, and upon payment of such balance sale consideration, the registration shall be completed by the end of April, 2012. As per the terms of the agreement, if the balance sale consideration is not paid within the agreed time, the advance amount paid stands forfeited.

It is the further case of the plaintiff that in the first week of March, 2012, he along with two witnesses viz., K. Satyanarayana and J. Venkanna, approached defendant No.1 and requested her to receive the amount and complete the registration process. Defendant No.1 postponed the receipt of amount and registration on one or other pretext and finally agreed for registration on 11.05.2012. On the said date, the plaintiff obtained challan for land admeasuring 121 sq. yards in his name and obtained another challan for land admeasuring 363 sq. yards in the name of one Sanga Devakumar Vidyasagar, who was a prospective purchaser. However, on the said date, defendant No.1 refused to register the suit property in the name of the plaintiff and the prospective purchaser and demanded additional amount of Rs.40,000/- to register the property. Under the said circumstances, the plaintiff issued legal notice to defendant No.1 to receive balance sale consideration and execute the sale deed. When there is no response from defendant No.1, the plaintiff filed the present suit.

Defendant No.1 filed her written statement admitting her ownership over the suit property, execution of agreement of sale and also the terms and conditions under Ex.A-1. It is her case that the plaintiff has not paid balance sale consideration to her on or before 31.03.2012, as per the terms of the agreement. Therefore, the agreement stood cancelled in terms of the agreement. She denied the averment that the plaintiff approached her along with two witnesses for payment of balance sale consideration and demanded for registration. Basing on the above pleadings, defendant No.1 prayed to dismiss the suit.

Defendant  No.2,  who  claims  to  be  the  bona  fide purchaser of the suit property, filed her written statement stating that she is entitled for protection, as she purchased the suit property for valid sale consideration from defendant No.1. She also stated that she obtained required permissions for construction of structures in the suit property and that she is possession and enjoyment of the same. Basing on the above pleadings, defendant No.2 prayed to dismiss the suit.

On the basis of the above pleadings, the trial Court has framed the following issues for consideration:

“1. Whether the parties entered into agreement, if so, it is valid?

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

To what relief?”

The plaintiff, in support of his case, examined P.Ws.1 to 3 and got marked Exs.A-1 to A-10. The defendants, to prove their case got examined D.Ws.1 to 3 and got marked Exs.B-1 to B-4.

The Court below accepted the readiness and willingness on the part of the plaintiff to perform his part of obligation under the agreement and granted decree for specific performance. Aggrieved by the same, the present appeal is filed at the instance of defendant No.2.

Heard the learned counsel for both parties.

The points for determination in this appeal are as follows:

“1. Whether the plaintiff has performed or has always been ready and willing to perform his part of obligation all through?

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

To what relief?”

There is no dispute as to execution of the agreement of sale; there is no dispute with regard to agreed sale consideration and also payment of advanced sale consideration. The only dispute is whether the plaintiff was ready and willing to pay the balance consideration within the time agreed.

The case of the plaintiff is that he was ready with the money and he approached defendant No.1 in the first week of March, 2012 with balance sale consideration and requested to make registration. As per the plaintiffs, he went along with two witnesses viz., K. Satyanarayana and J. Venkanna, but defendant No.1 postponed the registration and finally, agreed for registration on 11.05.2012. On 11.05.2012, the plaintiff obtained challans in his name and in the name of prospective purchaser for the remaining land, but defendant No.1 refused to execute the registered sale deed.

On the contrary, it is the claim of defendant No.1 that the plaintiff has neither approached her nor paid the balance amount within stipulated time.

The trial Court, on the basis of Exs.A-9 and A-10 - bank passbooks pertaining to the plaintiff, found that the plaintiff was ready with the money to perform his part of obligation of the agreement. The trial Court also made great emphasis on the challan which is paid by the plaintiff on 11.05.2012.

As per the agreement of sale, the relevant time for compliance of the obligation on the part of the plaintiff for payment of balance sale consideration was 31.03.2012. Further, time is also contemplated that after payment of balance sale consideration, sale deed had to be executed by the end of April, 2012. The challans paid by the plaintiff shows that he intended to purchase land to an extent of 121 sq.yards only and the majority of land i.e., an extent of 363 sq.yards was intended to get registered in the name of Sanga Devakumar Vidyasagar, who is the prospective purchaser.

The Court below found that Exs.A-9 and A-10 bank passbooks clearly demonstrate that the plaintiff was having sufficient money to pay balance sale consideration. The Court below has not looked into the statement forming part of these two bank passbooks. Ex.A-9 bank statement shows that amounts were available during the year 2014, i.e., from 26.02.2014 and the entries in Ex.A-10 reflect from 18.07.2012. The required date for establishing the capacity of the plaintiff to perform his part of obligation was 31.03.2012 and no evidence was produced to show that by 31.03.2012, the plaintiff was having money to pay the balance consideration of Rs.9,00,000/-, which is 90% of the agreed amount of sale consideration.

The contention of the learned counsel for the plaintiff is that the trial Court noted that defendant No.1 came to the registration office on 11.05.2012, which shows that she was still ready and expressed her willingness to proceed with the sale transaction. Such statement is not correct. On reading of the entire evidence of defendant No.1, there is no such admission on the part of defendant No.1. It was the claim of the plaintiff that defendant No.1 came to the registration office, and on seeing third party purchaser, she refused to register the property and demanded Rs.40,000/-. However, defendant No.1 denied in her cross examination such a claim of the plaintiff.

The terms of the agreement clearly indicate that time is the essence of the contract. This essence is made clear from the stipulation of particular date for payment of balance sale consideration. Apart from the same, a threat is also imposed by forfeiting the earnest money, if the plaintiff fails to pay the balance sale consideration within the time agreed.

The bank statements or any other evidence on record do not show that the plaintiff was ready with money of Rs.9,00,000/- by 31.03.2012. Apart from the same, his subsequent conduct to retain only 121 square yards and to sell the balance land in favour of third party, show that the plaintiff was not ready with money. This corroborates absence of any money in the bank to show that the plaintiff was having money. The trial Court without looking into the bank statements has self-assumed that the plaintiff was having money to perform his part of obligation. This finding of the trial Court suffers from illegality.

In view of the above, the plaintiff failed to establish his readiness and willingness to perform his part of obligation within the time agreed under the contract. This was not appreciated by the trial Court with reference to the evidence on record. Therefore, the plaintiff is not entitled to specific performance and the suit was wrongly decreed without going through evidence on record. Hence, the impugned decree is liable to be set aside.

Defendant No.2 is the purchaser of the suit property from defendant No.1 during the pendency of the suit. She tried to resist the suit on the ground that she is the bona fide purchaser. Her evidence shows that she has purchased with the knowledge that the suit is pending. The purchaser from the party to the suit proceedings is entitled to canvass all the defences that are available to her vendor. Except that, she has no other equity.

In the result, the appeal is allowed setting aside the judgment and decree dated 28.11.2018 in O.S.No.204 of 2012 on the file of Principal Senior Civil Judge, Karimnagar. There shall be no order as to costs. Miscellaneous petitions, if any, pending, shall stand closed.