Brijesh Kumar, C. J. - An agreement entered into between the appellant and the respondent, being close relatives, to sell and purchase property with a view to help out each other, turned out to because of distress and irretrievable bad feelings between them, culminating into litigation, which is being fought out by them for the last about a decade. It is nothing but complex human nature which quite often ignores all considerations when confronted with clash of interest. This is one of such cases in hand. 2. Briefly, the facts are that the defendant/respondent owning a plot of land under Patta No.834 and Dag No.840 in the last Settlement Operation in 1987, with an Assarh Type house standing over it as described in Schedule B to the plaint, started RCC construction over a part of the land in front of the Assam Type house which is standing over the plot, but fell short of finance. The plaintiff, who is none else but the husband of his wife's sister, agreed to purchase the back portion of the land along with the Assam Type house, for a total sum of Rs. 1,25,000/-, out of which an amount of Rs.50,000/- was paid to the defendant as advance and the balance amount of Rs.75,000/ - was to be paid later. An agreement was executed and signed between the husbands of the two sisters, namely, the plaintiff and the defendant, on 11.9.1987. The sale deed was to be registered after payment of the balance amount of Rs.75,000/-. As destined, things did not happen as they were thought to be, namely, the defendant did not receive the money, nor the sale deed was registered in favour of the plaintiff, giving rise to filing of Title Suit No. 142 of 1989 by the plaintiff appellant, Rakhal Chakraborty, against the defendant respondent, Sanjib Kumar Roy, praying for a decree for specific performance of the contract of sale of suit land and for a direction to the defendant to execute and register the sale deed on receipt of the balance amount of consideration through the Court, and in case of failure to execute the sale deed within the time specified, the sale deed may be executed and registered by the Court transferring the suit land as described in Schedule B to the plaint.
The trial Court, namely, Assistant District Judge No. 1, Kamrup, Guwahati, dismissed the suit and passed a decree for refund of Rs. 50,000- in lieu of specific performance of the contract. The trial Court recorded a finding that the agreement in question was not intended to be enforced as it was a mere paper transaction and the plaintiff had no cause of action for the suit except that the plaintiff was entitled for recovery of Rs.50,000 which was given as a loan to the defendant. 3. We feel that there is no occasion, nor it is necessary for us to go into the details of the findings recorded by the trial Court, or to enter into the question of their correctness in view of the judgment and findings of the first appellate Court in the appeal preferred by the plaintiff/appellant against the judgment of the trial ft Court. The First Appeal No.5 of 1994, against the judgment and decree dated 22.12.93 passed by the Assistant District Judge, was decided and dismissed by the judgment dated 8.8.97 passed by the learned Single Judge of this Court, against which the present LPA No.57 of 1997 has been filed. 4. We have heard the learned counsel for the parties -at some length and perused the judgment of the trial Court as well as the judgment passed by the learned appellate Court. The learned first appellate Court observed that during the course of the hearing of the appeal the points which were keenly contested between the parties were as to whether the plaintiff was really ready and willing to pay the balance amount of the consideration within a reasonable period of time or not and the next question was as to whether at the time of execution of the agreement it was permissible under the law to transfer the plot of land in Guwahati city in view of the provisions under the Guwahati Metropolitan Development Authority Act, 1985. We feel that the learned appellate Court rightly observed that if the finding on the first point is recorded against the plaintiff, it may not at all be necessary to enter into the other question. The appellate Court came to the conclusion that there was default on the part of the plaintiff in the performance of his part of the contract. Hence, it would be inequitable to grant the relief of specific performance.
The appellate Court came to the conclusion that there was default on the part of the plaintiff in the performance of his part of the contract. Hence, it would be inequitable to grant the relief of specific performance. The appellate Court also took into consideration the surrounding circumstances, namely, the defendant needed money for completion of the RCC construction, which the plaintiff failed to provide and insisted on making the payment only at the time of registration of the sale deed, which was against the terms of the agreement. It was also observed that the plaintiff could not add an additional clause in the agreement regarding payment of the balance amount at the time of registration. The timely payment of money was not made when needed by the defendant for completion of the RCC construction and since then there has been escalation in cost of construction as well as in the value of the land. It would be inequitable to order the specific performance of the contract. The findings as recorded by the learned first appellate Court seem to be correct that there was no such term in the contract that the balance amount of consideration was to be paid at the time of registration of the sale deed. Hence, the default was there on the part of the plaintiff. 5. Learned counsel for the appellant has vehemently urged that there was no indication in the agreement to the effect that the defendant needed the balance amount of sale consideration for completion of the RCC building. This was a new case which has been made out by the first appellate Court. It has also been vehemently urged that the defendant did not even apply for permission of the Guwahati Development Authority for sale and it was applied for only after the suit was filed. Hence, there was no occasion for the appellant to make the payment of the balance amount of consideration. The appellant had already parted with the substantial amount of Rs.50,000 and it would not have been prudent or reasonable on the part of the appellant to have paid the balance amount without any step having been taken by the defendant for registration of the sale deed. Had the defendant obtained the permission, the appellant might have made the payment. The submission as made no doubt on the first flush sounds reasonable.
Had the defendant obtained the permission, the appellant might have made the payment. The submission as made no doubt on the first flush sounds reasonable. But it has to be considered in context with the terms of the agreement entered into between the parties. The appellant's averment about the willingness and readiness to perform his part of the contract has to be scrutinised to see as to how far it was in fact there at the time of making such an averment. It will also have to be scrutinised as to what are the actual terms of the contract and at what stage the balance amount of consideration was required to be paid. The relevant part of the contract, which admits of no dispute, is to the following effect: “The vendor has made this agreement after receiving Rs.50,000(Rs fifty thousand) from the said total consideration value and has given possession to the purchaser for occupation of the said area of land including this Assam type house along with electricity and water supply. The balance of Rs.75.000/- (Rs seventy five thousand) will be paid before final registration by this purchaser and the vendor after receiving the said amount will transfer the said area of land with Assam type house to the purchaser by deed of sale (registration) within a reasonable time." (emphasis supplied) On a perusal of the above part of the contract it is quite clear that the balance amount was to be paid before final registration and the transfer of land along with Assam Type house was to be made by deed of sale within a reasonable time on receipt of balance amount by the vendor to be paid by the vendee. The sale deed, do doubt, was to be registered within a reasonable time; but the question for consideration is as to what will be the starting point of the 'reasonable time' within which sale deed was to be executed. In our view, the starting point of the 'reasonable time' would be from the date of payment of the balance amount of sale consideration, as the term of the agreement is quite clear that after receiving the balance amount, the vendor will transfer the land and the house by deed of sale within a reasonable time.
In our view, the starting point of the 'reasonable time' would be from the date of payment of the balance amount of sale consideration, as the term of the agreement is quite clear that after receiving the balance amount, the vendor will transfer the land and the house by deed of sale within a reasonable time. The words, "after receiving the said amount" occurring before, 'within a reasonable time', leaves no room to doubt that the deed was to be executed within a reasonable time of receipt of the balance amount of sale consideration, and not before that. Howsoever it may seejn to be reasonable on the part of the appellant to withhold the payment without any step being taken by the vendor towards registration of the sale deed, namely, moving application for permission to transfer the land, but the terms of the agreement do not spell out any such condition that the balance amount of consideration was to be paid only after the defendant had taken some steps for execution and registration of the sale deed. The terms of the contract as indicated above are quite clear that the sale deed was to be executed within a reasonable time after the balance amount of sale consideration was paid to the defendant. So long this was not done, namely, the payment was not made, the reasonable time within which the sale deed was to be executed never started. 6. Another thing which needs to be seen is as to how the plaintiff 'understood' the scheme of the transaction, namely, at what stage the payment was to be made and the stage at which the registration was to be done. To begin with the d plaint, we find that in paragraph 11 it is mentioned that the plaintiff was willing to pay the balance amount of consideration at the time of registration of sale deed. In paragraph 7 of the plaint, it is averred as follows : “By the said written agreement the plaintiff agreed to pay the balance of Rs. 75,000.00 (seventy five thousand) before the Registration Officer before final registration of Sale Deed against the fixed price of Rs.
In paragraph 7 of the plaint, it is averred as follows : “By the said written agreement the plaintiff agreed to pay the balance of Rs. 75,000.00 (seventy five thousand) before the Registration Officer before final registration of Sale Deed against the fixed price of Rs. 1,25,000.00 (one lakh twenty five thousand) at the time of the registration of the sale deed by the defendant in favour of the plaintiff transferring the suit land and house at Schedule B of the plaint...” It is thus clear that it was pleaded in the plaint itself that the balance amount of sale consideration was to be paid at the time of registration of the sale deed. In his statement before the trial Court, the plaintiff stated in examination-in- chief as follows: “The agreement was that the remaining amount of consideration should be paid on the day of registration of the land." In the cross-examination, he stated : "It had been agreed upon that the deed would be registered immediately after the payment of the money." It would thus be evident that the plaintiff had been through out under the impression and insisted that the balance of sale consideration would be paid at the time of registration of sale deed, whereas this stand taken by the plaintiff in the plaint as well as in his statement in the Court is at variance with the terms of the agreement. According to the terms of the agreement as indicated above, the sale deed was to be executed and registered within a reasonable time of receipt of the balance amount of Rs.75,000/-. The deed was not to be executed simultaneously with the payment, nor on payment before the Registrar. From the above facts and circumstances it is quite clear that the default has been on the part of the plaintiff to make the payment of balance amount of sale consideration in terms of the agreement. We find that it has been averred in the written statement that the balance amount was agreed to be paid within a reasonable time, but the plaintiff failed to pay the same. Undoubtedly, the money was needed by the defendant for construction of his RCC building. He approached the plaintiff in that connection while his construction work had already started.
We find that it has been averred in the written statement that the balance amount was agreed to be paid within a reasonable time, but the plaintiff failed to pay the same. Undoubtedly, the money was needed by the defendant for construction of his RCC building. He approached the plaintiff in that connection while his construction work had already started. In these circumstances, it is clearly made out that there was a reason to incorporate a term in the agreement that sale deed would be executed within a reasonable time of payment of balance amount of consideration. The plaintiff cannot be said to have been ready and willing to make the payment of the balance amount of consideration according to the terms of the agreement. Hence, the default lies on his part. The other stage of executing the sale deed within a reasonable time never arrived. 7. It is thus to be considered whether in equity the plaintiff would be justified in making a claim for exercise of judicial discretion in his favour. We find no merit in the submission made on behalf of the appellant that the first appellate Court made out any fresh case or third case for the defendant that the money was required for the construction of the RCC building as no such averment is to be found in the agreement. It is true that in the agreement the purpose of entering into the agreement has not been disclosed as to why the property was agreed to be sold. Nonetheless, there is material on the record to indicate that the defendant needed the money for the purpose of construction of the RCC building over the front part of the plot. As a matter of fact, in paragraph 6 of the plaint itself it has been averred that while the construction work of the RCC building of the defendant was going on, the defendant was in need of money to meet the cost of construction. Hence, he had approached the plaintiff saying that he needed money to meet the cost of construction of the RCC building and to complete the same and expressed his desire to sell half of his land for the purpose. It was in these circumstances that on the own showing of the plaintiff the agreement was entered into as the plaintiff had agreed to purchase the property for a sum of Rs.1,25,000/-.
It was in these circumstances that on the own showing of the plaintiff the agreement was entered into as the plaintiff had agreed to purchase the property for a sum of Rs.1,25,000/-. Hence, it would not be correct to say that any new case was made out by the first appellate Court. The first appellate Court rightly came to the conclusion that the money was urgently needed by the defendant for completion of his half constructed RCC building. The money was thus not paid to the defendant when needed. It has been rightly observed in the judgments passed by the two Courts that in the circumstances indicated above, the defendant might have to have made arrangement for completion of the construction from other sources as the required payment of balance amount was not forthcoming from the plaintiff. In our view, the first appellate Court rightly emphasised on the fact that cost of construction has been escalating as well as the value of the property. As observed earlier, the plaintiff had been withholding the payment of the baknce amount of sale consideration under the misapprehension that the said amount was to be paid at the time of registration. Such an understanding on he part of the plaintiff was clearly as a result of misconstruing the terms of the agreement. It is always open to consider the attending circumstances in such matters and, in our view, the learned first appellate Court has rightly placed a reliance upon the decision on the point, namely, the case reported in (1997)3 SCC 1 , KS Vidyanadam & others vs. Vairavan, in which it was held that even where in a case, the time may not be the essence of the contract, the plaintiff must perform his part of the contract within reasonable time, which would depend upon the surrounding circumstances in the light of the terms of the contract. That being the position, the learned first appellate Court has rightly taken into b consideration the attending circumstances that the money was needed by the defendant for the purpose of completion of his incomplete RCC building. The money was thus to be paid within a reasonable time by the plaintiff; but admittedly, it was not done. As held earlier, the reasonable time for executing the sale deed was to start only after the payment is so made as provided in the agreement. 8.
The money was thus to be paid within a reasonable time by the plaintiff; but admittedly, it was not done. As held earlier, the reasonable time for executing the sale deed was to start only after the payment is so made as provided in the agreement. 8. In view of the finding recorded above, it will not at all be necessary to enter into other arguments as submitted by the learned counsel for the parties. However, two other points on which submissions have been made at some length, we propose to mention. On behalf of the appellant it has been vehemently urged that the defendant had not even applied for the permission from the Guwahati Development Authority for transferring the land. Hence, the plaintiff rightly doubted the bonafides of the defendant. At this juncture it may also be mentioned that the permission which had been applied for by the defendant, said to be moved after filing of the suit, was rejected. In that connection parties had filed affidavits indicating rejection of the application and the plaintiff indicating that after the rejection of the application for permission moved by the defendant, on enquiry it was informed by the appropriate authorities that now the permission e was being granted as such hurdles by reason of which the permission was refused earlier, are no more there now. Therefore, the defendant can again apply for the permission, which may be granted in all likelihood. The affidavits have been filed by the parties indicating that these are the developments which have taken place during the pendency of the case. 9. So far as the submission made on behalf of the appellant that he doubted the bonafides of the defendant since he had not applied for the permission, we do not find any merit in that submission. The defendant needed money urgently to complete the incomplete RCC building. According to the terms of the contract, sale deed was to be executed within a reasonable time of payment of the balance amount of sale consideration. The plaintiff might be trying to act prudently in not making the payment of balance amount of consideration, but the fact remains that the plaintiff could not insist that the defendant must obtain such a permission first before making the payment of balance amount of sale consideration. There was no such condition in the contract.
The plaintiff might be trying to act prudently in not making the payment of balance amount of consideration, but the fact remains that the plaintiff could not insist that the defendant must obtain such a permission first before making the payment of balance amount of sale consideration. There was no such condition in the contract. The only condition was execution of sale deed within a reasonable time of payment of balance of the sale consideration. The plaintiff cannot get advantage of the fact that the defendant had not applied for the permission to transfer the property before filing of the suit since the plaintiff itself failed to make the payment of balance amount of sale consideration which, according to the attending circumstances was to be paid within a reasonable time to complete the incomplete building. The fact as it stands is that permission has been refused. According to the plaintiff, the hurdle which existed earlier for grant of permission is now not there and permission is being granted. The question is, as to whether in the facts and circumstances of the case would it be justified that a decree be passed directing the defendant to apply again for grant of permission, or not ? Section 16 of the Specific Relief Act, 1963 provides that specific performance of a contract cannot be enforced in favour of a person : "(a) .…….. (b) who has become incapable of performing, or violates any essential term, of, the contract that on this part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c)……… Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so, but the discretion has, of course, to be exercised reasonably guided by judicial principles. It is, thus, clear that d even though it may appear to be lawful, yet the discretionary remedy is not necessarily be given. 10. On behalf of the respondent reliance has been placed upon a case reported in AIR 1987 SC 2328 , Purakunnan Veetill Joseph's son Mathew vs. Nedumbara KuruVila's son & others.
It is, thus, clear that d even though it may appear to be lawful, yet the discretionary remedy is not necessarily be given. 10. On behalf of the respondent reliance has been placed upon a case reported in AIR 1987 SC 2328 , Purakunnan Veetill Joseph's son Mathew vs. Nedumbara KuruVila's son & others. More particularly, our attention ' has been drawn to paragraph 14, where it has been observed that the Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict and the plaintiff should not be allowed to have an unfair advantage. Another case upon which reliance has been placed by the respondent is reported in AIR 1993 SC 1742 , Smti Chand Rani vs. Smti Kamal Rani. Paragraph 24 of the judgment may be quoted : “24. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are : 1. from the express terms of the contract; 2. from the nature of the property; and 3. from the surrounding circumstances, for example: the object of making the contract.” In the present case, it is though not specific in the contract that the balance amount was to be paid within a particular time, yet the surrounding circumstances lead to the inference that the payment must be made within a reasonable time so as to enable the defendant to complete the incomplete RCC building. It is not necessary that it must be a case of time being the essence of the contract. In AIR 1996 SC 1504 , M/s PR Deb & Associates vs. Sunanda Roy, the decision in the case of Chand Rani (supra) was followed and it has been observed in paragraph 8 of the judgment that even though the time may not be the essence of the contract, but the Court may infer that it is to be performed in a reasonable time if it is evident from the express terms of the contract, or from the nature of the property, or from the surrounding circumstances.
Thus, surrounding circumstances under which a contract has been entered into is held to be a relevant consideration to come to the conclusion as to whether the condition was to be performed within a reasonable time or not (1996) 6 SCC 218 , Kallathil Sreedhara vs. Komath Pandyala Prasanna & another has been cited on the point that relief of specific performance is a discretionary relief and the circumstances may justify refusal to grant the relief. 11. The respondent also places reliance upon the case of KS Vidyanadam (supra) for the proposition that even though time may not be provided to be the essence of the contract in the agreement, but it can well be inferred from the facts and surrounding circumstances that the parties have to perform their parts of the contract within a reasonable time. In paragraph 11 of the judgment it has been observed that reality of the fact that there is constant and continuous rise in the value of urban properties cannot be ignored and such circumstances could not be taken into consideration while exercising the discretion to pass a decree or not in a suit for specific performance. In paragraph 14 it has been observed that even where the time is not the essence of the contract, the plaintiff must perform his part of the contract within reasonable time and reasonable time should be determined by looking to all the surrounding circumstances and the nature of the property. 12. Another submission which was pressed into service on behalf of the respondent is that the property which was to be transferred according to the agreement has not been specific, nor its identity is furnished; hence, the agreement was incapable of being acted upon. The submission was that it was impossible to execute a sale deed as no boundaries or particulars of the property had been indicated and in support of that contention, reliance has been placed upon a decision of the Supreme Court reported in (1990) 3 SCC 1 , Mayawati vs. Kaushalya Devi. We, however, feel that this point need not detain us and to be rejected. According to both the parties, the defendant on receipt of Rs.50,000/- had given possession of the property agreed to be sold under the agreement to the plaintiff.
We, however, feel that this point need not detain us and to be rejected. According to both the parties, the defendant on receipt of Rs.50,000/- had given possession of the property agreed to be sold under the agreement to the plaintiff. The party who has himself handed over the possession of the property which is agreed to be sold, cannot plead that the property is unascertainable. We also fell it equally unnecessary to go into the other aspect of the matter relating to the path available S to the plaintiff for his ingress and outgress as to whether it was only 4 feet wide, or was agreed to be 7 feet wide. The fact, however, remains that there was a pathway for the purpose of ingress and outgress from the property. 13. In view of the law as discussed above and the facts and surrounding circumstances of the case, we feel that it would not be a case for interference in the judgment of the learned first appellate Court. It cannot be said that discretion has been wrongly exercised in refusing to grant the relief of specific performance. In our view, the considerations which weighed with the learned first appellate Court while exercising the discretion are valid considerations. The plaintiff had been under some misconception that the balance amount of sale consideration was to be paid at the time of registration of the sale deed, whereas, as indicated earlier, the amount was to be paid before the execution of the sale deed and it was after payment of the said amount that the sale deed was to be executed within a reasonable time. We have already held that the starting point of the said reasonable time within which sale deed was to be executed never started running since the plaintiff never paid the balance of the sale consideration. This fact alone disentitles him for grant of the relief of specific performance due to failure on his part to perform his part of the contract. Even though the time was not the essence of the contract, yet in view of the decisions of the Hon'ble Supreme Court, referred to above, clearly indicating that from attending circumstances it can always be inferred that the plaintiff had to perform his part of the .contract within a reasonable time.
Even though the time was not the essence of the contract, yet in view of the decisions of the Hon'ble Supreme Court, referred to above, clearly indicating that from attending circumstances it can always be inferred that the plaintiff had to perform his part of the .contract within a reasonable time. Admittedly, according to the plaintiff himself as pleaded in the plaint, the defendant needed money for completion of his incomplete RCC building. Thus money was not paid to the defendant for about two years of the entering into of the agreement. The learned first appellate Court rightly took into consideration the fact that cost of construction escalated during all this period. It also rightly took into consideration the fact that the value of the property agreed upon to be sold has increased and must have gone very high. This will be a valid consideration while considering the question of grant of relief, as held by the Supreme Court in the case of KS Vidyanadam (supra). Obviously, since no payment was made for about two years, it has been rightly observed by the Court that he might have had.to make arrangements from somewhere else. It is thus clear that the plaintiff himself failed to perform his part of the contract in accordance with the agreement and the attending facts and circumstances also do not justify grant of discretionary relief, as held by the learned first appellate Court. We, therefore, find no good reason to interfere in the judgment and decree passed by the trial Court and the first appellate Court. The appeal is, therefore, dismissed. There will, however, be no order as to costs.