Kanhaiya Lal v. Jhamat Mal — 1988 DIGILAW 34 (RAJ)

M.C. JAIN, J.—This is a defendants appeal in a suit for specific performance of" the contract of sale of 1/2. share of the suit-shop. The plaintiffs suit was decreed by the learned Additional District Judge, Sirohi on 18-12-76 and the defendant was directed to execute the sale-deed of his share of the shop described in para 1 of the plaint in favour of the plaintiff on payment of a sum of Rs. 12,500/- by the defendant before the Sub-Registrar. It was also directed that the defendant shall bear the expense of stamp-papers, registration etc. Two months time was allowed to execute the sale-deed and give vacant possession of the shop to the plaintiff. 2. The plaintiff Jhamatmal instituted a suit with the allegations that the parties to the suit purchased the suit-shop as joint property and were carrying on business in partnership in the name and style of M/s Sheoganj Engineering Works. As the disputes arose, so, through arbitration of their own elder brother Shittaldass, the partnership was dissolved and it was agreed that the defendant would purchase half share of the plaintiff in the shop in question by paying a sum of Rs. 12,500/-on or before 19-10-74. It was further stipulated that if the defendant Kanhaiyalal fails to purchase half share upto 19-10-74, then, the defendant would vacate the shop and deliver possession thereof to the plaintiff Jhamatmal and would execute the sale deed and get the same registered at his expense on payment of Rs. 12,500/- by Jhamatmal. It was also stipulated between the parties that M/s Sheoganj Engineering Works will remain in possession of the rented shop situated at Holiwala Market, Sheoganj for business and the defendant Kanhaiyalal would be responsible for making payment of rant of that shop till he pays Rs. 12,500/- and after receipt of Rs. 12,500/- by the plaintiff Jhamatmal, Jhamatmal will make payment of rent of the rented shop situated in Holiwala Market, Sheoganj. According to the plaintiff, the defendant did not pay a sum of Rs. 12,500/- before 19-10-74 and when the plaintiff asked the defendant to discharge his obligation to sell 1/2 share to the plaintiff, the defendant gave wrong notice dated 7-11-74. It was stared in the notice that the defendant in agreement with the plaintiff had made an agreement for sale of the shop in question in favour of Premchand and Chandrabhan for Rs. It was stared in the notice that the defendant in agreement with the plaintiff had made an agreement for sale of the shop in question in favour of Premchand and Chandrabhan for Rs. 35,000/- and to earn profit by dividing half and half The defendant stated that the price of half share Rs. 12,500/-was offered to the plaintiff on 1-10-74. The plaintiff in his reply to the notice denied the contents of the notice and insisted for sale of 1/2 share as contemplated in the agreement. It was averred by the plaintiff that the plaintiff was always ready and willing to discharge his obligation under the agreement and prayed for a decree of specific performance. 3. The defendant submitted his written statement in which he admitted that Shitaldass was appointed as Arbitrator, who gave an award on 19-10-71, which was accepted by both the parties. It was alleged that the date 19-10-74 was not the essence of the contract as there was stipulation in the agreement that the defendant shall continue to make payment of the rent of the shop of Shah Ratanchand Sheshmal till he makes payment of Rs. 12500/-. The date was mentioned in the agreement only with a view that payment of money may be made early and the plaintiff may not be liable to make payment of rent for a long time. The plaintiff had a right to purchase 1/2 share of the shop in question only under the agreement. It was also averred that the plaintiff accepted the rent of the shop of Shah Ratanchand Sheshmal upto 13-11-74, which money amounting to Rs.1875/- was paid on 12-11-74. Further rent for the period from 14-11-74 to 13-2-75 for three months at the rate of Rs. 150/-per month to the tune of Rs. 450/-, was sent by Cheque through registered post on 15-2-75. The defendant had complied with the terms of the Award. When the defendant offered a sum of Rs. 12,500/- the plaintiff thereupon told the defendant that the defendant is selling the business of M/s Sheogaj Engineering Works, so, he may also sell the suit shop and the shop would fetch a good price. The enhanced price shall equally be distributed between them and both will be benefited. The defendant accepted the proposal of the plaintiff being the younger brother. The enhanced price shall equally be distributed between them and both will be benefited. The defendant accepted the proposal of the plaintiff being the younger brother. The defendant thereupon entered into the agreement with the vendees Premchand and Chandrabhan for the sale of the suit-shop in the sum of Rs. 35,000/-on 16.10.74 and accordingly informed the plaintiff. The business of M/s Sheoganj Engineering Works was also sold in which there were four partners. The Muhurat of the new shop was done on 25.10.74 and the business was agreed to be started by the partners w.e.f. Kartik Sud-1 Samvat 2031 and the sale-deed of the shop was agreed to be executed and registered on Migsar Sud-1 Samvat 2031. The defendant informed the plaintiff for execution of the sale deed after obtaining a sum of Rs. 17,500/- in favour of the vendees through a registered letter dated 17.11.74. The plaintiff afterwards changed his mind and gave a wrong reply to the defendants notice. The notices are exchanged. As the plaintiff broke the promise as a result of which, the defendant had suffered a huge loss as the agreement for the sale of the shop and business were cancelled by the vendees. An objection was also taken that if any right has accrued to the plaintiff for seeking specific performance, that right stood waived by the plaintiff on receipt of the rent of the shop, which was on rent with M/s. Sheoganj Engineering Works in Holiwala Bazar. The defendant, in the end, prayed that the plaintiffs suit be dismissed. 4. The following issues were framed by the trial court as under:— "1. Whether the defendant committed breach of the terms of the Award dated 19.10.71? 2. Whether the plaintiff is entitled to mesne profits at the rate of Rs. 200/- per month for the use and occupation of the premises after 19.10.74? 3. Whether time was not the essence of the contract hence the terms of agreement can not be enforced as-mentioned in para 2 of the written statement? 5. In order to prove his case, the plaintiff Jhamat Mal examined himself as P.W. 1 and produced his son P.W. 2 Laxmandass. In rebuttal, the defendant Kanhaiyalal examined himself as D.W. 1 and produced Shitaldass (DW 2) and his own son Chandrabhan (DW 3). 6. The learned Additional District Judge, after hearing the arguments, decided issues. 5. In order to prove his case, the plaintiff Jhamat Mal examined himself as P.W. 1 and produced his son P.W. 2 Laxmandass. In rebuttal, the defendant Kanhaiyalal examined himself as D.W. 1 and produced Shitaldass (DW 2) and his own son Chandrabhan (DW 3). 6. The learned Additional District Judge, after hearing the arguments, decided issues. No. 1 and 3 in favour of the plaintiff and issue No. 2 in favour of the defendant and against the plaintiff. In view of his findings, on issues No. 1 and 3, the plaintiffs suit for specific performance was decreed. Hence, this appeal by the defendant. The plaintiff also filed the cross-objection in respect of dismissal of the claim of mesne profits. 7. I have heard Mr. Lekh Raj Mehta, learned counsel for the defendant-appellant and Mr. P.R. Singhvi, learned counsel for the plaintiff-respondent. 8. The principal question in this case is as to whether the time was the essence of the contract. According to the plaintiff, payment of Rs. 12,500/- was to be made on or before 19.10.74 and if by this date, the payment is not made, a very valuable right would accrue to the plaintiff to purchase 1/2 share of the defendant Kanhaiyalal for a sum of Rs. 12,500/- and Kanhaiyalal was under an obligation to deliver vacant possession of the suit-shop. The agreement also contemplates that the defendant Kanhaiyalal shall continue to make payment of rent of the reined shop, which would remain in possession of the plaintiff till Rs, 12,500/- is paid by the defendant and after payment of Rs. 12,500/- the rent of the rented shop shall be paid by the plaintiff. 9. The crucial question is as to whether on the basis of the term relating to the liability of payment of rent by the defendant till a sum of Rs. 12,500/- is paid by him to the plaintiff, renders the date stipulated by the parties for making payment of Rs. 12 500/- and executing the sale-deed, in-effective. What was the intention of the parties on 19.10.74, when the Award was given by Shri Shitaldass and the parties agreed to the terms of the Award. The original Award and agreement is Ex A/1 and copy whereof is Ex. 2, which is also signed by them. It may be stated that, three years time was allowed to the defendant to make payment of Rs. The original Award and agreement is Ex A/1 and copy whereof is Ex. 2, which is also signed by them. It may be stated that, three years time was allowed to the defendant to make payment of Rs. 12,500/- and it was clearly stipulated under the Award Agreement by the parties, that in case, payment of the amount is not made upto 19 10.74, the defendant Kanhaiyalal would be under an obligation to deliver vacant possession of the shop to Jhamatmal and shall get the sale-deed executed and registered at his expense after accepting a sum of Rs. 12,500/- from Jhamatmal. The second term of making payment of rent by the defendant Kanhaiyalal of the rented shop till he makes payment of Rs. 12,500/- to Jhamatmal, cannot be read in the manner, so as to render the date 39.10.74 ineffective. A very valuable right was created in favour of Jhamatmal and Kanhaiyalal was under an obligation to deliver vacant possession of the suit-shop on accepting a sum of Rs. 12,500/-from Jhamatmal. Kanhaiyalal was allowed three years time for making payment of the value of 1/2 share. By inserting the second term, it cannot be conceived that the parties extended the time of execution of sale-deed and of giving possession of the shop beyond three years. It cannot be conceived that the parties intended not to create any right in the plaintiff Jhamatmal to purchase 1/2 share on making payment. An obligation to make payment of rent by Kanhaiyalal appears to have been created, so that, Jhamatmal may not be liable for payment of rent for the rented shop as the defendant would remain in possession of the shop in question and payment of price of 1/2 share was deferred upto 3 years. If the document is read as a whole, the second term would be read in the manner, so that the main term may not be rendered ineffective. If the second term would have been an overriding term then, the parties would have clearly and unequivocally stated that on payment of rent beyond 19.10.74 and on non-payment of Rs 12,500/-upto 19.10.74 no right of purchase would arise in favour off he plaintiff. There would have been a clear stipulation in this regard. Simply because the words used in the second term are ^^tc rd** meaning thereby "till" payment of Rs. There would have been a clear stipulation in this regard. Simply because the words used in the second term are ^^tc rd** meaning thereby "till" payment of Rs. 12,500/- is not made by Kanhaiyalal to Jhamatmal, Kanhaiyalal would continue to make payment of rent. This till in my opinion, would not extent beyond 19.10.74 That is the outer limit because the first term is the main term and when the second term is not clear, then, it would not override the main term and the main term would remain. It may be mentioned that the second shop was a rented shop, so, it appears that the parties had stipulated that price of 1/2 share shall be paid within 3 years else the plaintiff would purchase the 1/2 share and the plaintiff would come to occupy the shop in question It is with this object that the main term has been introduced in the agreement. Thus, looking to the nature of the document and the nature of the stipulation made by the parties, in my opinion, the date 19.10 74 was of the essence. 10. No doubt, Shri Shitaldass (DW 2) in his statement has deposed as to what was the intention behind the second term in Ex. A/1, he has stated that till Rs. 12,500/- are paid, the liability of paying the rent would be of Kanhaiyalal. It would mean that it was not essential to execute the sale-deed and to make payment of Rs. 12,500/- upto 19.10.74. Simply because, the arbitrator has said so, this cannot be considered to be the intention of the terms of the agreement looking to the important character of the first principal, term creating a very valuable right in favour of the plaintiff Jhamatmal. 11. It may be stated that it is not an ordinary agreement for sale of immovable property. It is a settlement arrived through an Award. The matter has to be considered in this context and perspective. It can be considered to be in the nature of an Award decree. 12. In Govind Prasad Chaturvedi v. Hari Dutt Shastri (1), it has been observed as under: — "The fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. It can be considered to be in the nature of an Award decree. 12. In Govind Prasad Chaturvedi v. Hari Dutt Shastri (1), it has been observed as under: — "The fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property, it will normally be presumed that the time is not the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by circumstances which should be sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract." 13. In M/s Hind Construction Contractors v. State of Maharashtra (2), it has been observed as under:— "The question whether or not time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract." 14. So far as the present case is concerned, the intention of the parties has to be gathered from; the context in which the settlement through arbitration was arrived at, the nature of the terms of the settlement; the long period allowed to the defendant to perform the part of his contract and the nature of right created in favour of the plaintiff in default of performance by the appointed date and thus, looking to all the circumstances of this case, I am clearly and definitely of the opinion that the stipulation as to the time, was essence of the settlement. 15. Now, I may examine the question as to whether the defendant had offered a sum of Rs. 12,500/- to the plaintiff, Jhamatmal on 1.10.74 and whether at the instance of the plaintiff, it was agreed that the shop in question may be disposed of as the business is being disposed of and parties will share the enhanced price equally. In this regard, suffice it to say that the plaintiff has not at all been cross-examined on these aspects of the defendants case. When the defendant has not put its case to the plaintiff, it can be taken that the defendants case does not stand and is weak. In this regard, suffice it to say that the plaintiff has not at all been cross-examined on these aspects of the defendants case. When the defendant has not put its case to the plaintiff, it can be taken that the defendants case does not stand and is weak. It is true that the notice was first served by the defendant but, for which, the plaintiff has come forward with an explanation that when the payment was not made upto 19.10.74, he asked the defendant to accept the money and execute the sale-deed of 1/2 share of the shop. It is, thereafter, a notice dated 7.11.74 was served on the plaintiff by the defendant, which was properly replied by the plaintiff. It is also pertinent that the defendant has not been able to establish his case that there was an agreement for sale of the business as well as the shop. These agreements have not been produced and proved and as already stated, the plaintiff was not at all cross-examined, on this aspect, so, the plea of the defendant, in my opinion, appears to be an after thought and has been invented by him only with a view to counter the plaintiffs case. Besides that, the acceptance of rent for the period beyond 19.10.74 would not in any way effect the plaintiffs right, which has accrued to him under the agreement. It may be stated that the rent was paid for 12 months 15 days, amounting to Rs. 1875/- and was paid to Laxmandass. In that regard, the plaintiff has come forward with an explanation that the rent was payable from Diwali to Diwali. On the basis of rent having been accepted beyond 19.10.74 up to 13.7.74, the plaintiffs right under the agreement is not in any way defeated. This case of the defendant is to be judged as a whole in the light of the agreement that when the dispute had arisen between the parties and the arbitrator was appointed, the dispute was settled through the arbitration and document Ex. A/1 and copy thereof Ex. 2 were executed, then, if a fresh oral agreement was reached, it should have been reduced in writing and even if, it is an oral, then, the vendees with whom the agreement for Rs. A/1 and copy thereof Ex. 2 were executed, then, if a fresh oral agreement was reached, it should have been reduced in writing and even if, it is an oral, then, the vendees with whom the agreement for Rs. 35,000/- had taken place; that agreement should have been reached between the plaintiff and defendant on the one hand and the vendees on the other. How the word plaintiffs word could be taken to be sufficient by the defendant? Thus, the case set up by the defendant, does not appear to be worthy of credence in the facts and circumstances of the case and it cannot be believed that the defendant in fact offered the price, which was payable by him to the plaintiff. Thus, viewed from all angles, in my opinion, it is established that the defendant committed breach of the terms of the agreement dated 19.10.74 and 19.10.74 was the essence of the agreement. Issues No. 1 and 3, in my opinion, have been rightly decided by the court-below and the findings thereon call for no interference. As a result thereof, the plaintiffs suit for specific performance was rightly decreed by the learned Additional District Judge. 16. Coming to the cross-objection filed by the plaintiff, suffice it to say that the plaintiff has claimed a sum of Rs. 100/- by way of mesne profits for 15 days upto the date of the suit. The plaintiff had accepted the rent beyond 19.10.74. The plaintiff has not paid any court-fee on the amount of mesne profits upto the date of filing of the cross-objection and, so, for the subsequent period, the plaintiffs claim mesne profits is not entertain able. Besides that, while staying the execution of the decree, this Court had already directed the defendant-appellant to deposit the amount of mesne profits at the rate of Rs. 200/- per month with effect from 1.5.1977. The defendant is required to deposit mesne profits on the first day of each succeeding month. For the aforesaid reasons, the claim of mesne profits does not deserve to be decreed. 17. No other point has been pressed before me. 18. In the result, the appeal and cross-objections are dismissed. 19. The parties shall get the costs according to their success. The defendant-appellant is allowed two months time from today to comply and satisfy the decree passed by the trial court.