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2001 DIGILAW 450 (MAD)

Haripriya Ramabadran v. P. R. Seshadri

2001-04-10

K.GNANAPRAKASAM, R.JAYASIMHA BABU

body2001
K.Gnanaprakasam, J: The plaintiff in O.S.No.2266 of 1981 is the appellant. The plaintiff has filed the suit for specific performance of contract of sale, based upon the agreement dated 24.4.1975 and the trial Court decreed the suit. On appeal to this Court, the learned single Judge reversed the findings of the trial court and allowed the appeal in A.S. No.651 of 1984. Aggrieved by the same, plaintiff has preferred this appeal. 2. The plaintiff in her plaint has stated that by the agreement dated 24.4.1975, the defendant agreed to sell the suit property to her for a sum of Rs.45,000 and also received an advance of Rs.5,000 on the date of the agreement. As per paragraph 4 of the agreement, the, balance amount of the sale consideration, was agreed to be paid at the time of registration of the sale deed before the Registering Officer, after paying any due towards property tax, urban land tax and also the loan amount due to the Egmore Branch of Indian Bank. The defendant purchased the suit property from one P.B. Lakshmanaswamy and three others under the sale deed dated 8.12.1966 and at that time the third vendor to the said sale deed namely, P.B.Ramji was a minor and that therefore the defendant retained a sum of Rs. 10,000, out of the sale consideration representing the share of the minor and agreed to pay the same to the said minor on his attaining majority and on his executing a ratification deed. The plaintiff demanded the defendant to send the ratification deed and also expressed her intention that she has been always ready and willing to perform her part of the contract. But, however, the defendant was evading to produce the ratification deed and that there upon the plaintiff sent a telegram to the defendant followed by a registered notice through her advocate on 6.7.1975 calling upon the defendant to produce the ratification deed and also to execute the sale deed, and the same was not complied with and hence, the plaintiff filed the suit. 3. The defendant, in his written statement, while admitting the agreement, has denied that the plaintiff was never ready and willing to perform her part of the contract. 3. The defendant, in his written statement, while admitting the agreement, has denied that the plaintiff was never ready and willing to perform her part of the contract. There is a specific clause in the Agreement that the time was the essence of the contract and that the plaintiff had to pay the balance of sale price of Rs.40,000 against the execution of the sale deed on 30.6.1975. He was ready to execute the sale deed on 30.6.1975, but the plaintiff was neither ready nor willing to perform her part of the contract before the date fixed viz., 30.6.1975 and thereby committed breach of the contract. The defendant further stated that the plaintiff’s acceptance of the defendant’s title to the suit property was only conditional. The plaintiff, who had undertaken to pay the loan amount of the defendant to the Indian Bank, Egmore Branch did not do so and because of that, the defendant was mulcted with costs and interest to be paid thereon. The plaintiff also gave a false complaint to the police, which caused loss to the defendant. As the plaintiff has not paid the amount due to the Indian Bank, the defendant is entitled to claim damages to the tune of Rs.65,000 and the same was demanded by him. As the plaintiff did not complete the transaction within the time fixed, the defendant negotiated for the sale of the property to the third parties as the Bank debt had to be paid. The defendant also denied all other averments in the plaint. 4. The trial Court, after having given due consideration to the case of the plaintiff and the defendant, came to the conclusion that the plaintiff is entitled to have the specific performance of the sale and decreed the suit. 5. On appeal by the defendant in A.S.No. 651 of 1984, before this Court, the learned single Judge has observed that the agreement to sell the property is only between the plaintiff and the defendant and the defendant has to convey a valid title for which, he should have a marketable title. From the version of the plaintiff herself, it is seen that the defendant had no valid title in view of the failure of Ramji to ratify the sale made by his father and others in favour of the defendant and that therefore no decree for specific performance could be passed. 6. From the version of the plaintiff herself, it is seen that the defendant had no valid title in view of the failure of Ramji to ratify the sale made by his father and others in favour of the defendant and that therefore no decree for specific performance could be passed. 6. Learned single Judge took a view that the plaintiff alone delayed the payment of the balance of the sale consideration and has not come forward to have the sale deed in time and the evidence of P.W.2 i.e., father of Ramji. appears to be artificial. It was further held that the defendant was not having a valid title in view of the failure of Ramji to ratify the sale deed and therefore, the plaintiff is not entitled to the relief of specific performance and further in the agreement, it was stated that the time is essence of the contract, but the plaintiff has not adhered to the said condition and committed default and therefore, the plaintiff is not entitled to the relief prayed for and allowed the appeal. Aggrieved by the same, the plaintiff has preferred this appeal. 7. Thiru B.Shantha Kumar, learned advocate for the appellant / plaintiff has submitted that the defendant, having admitted the sale agreement and also the receipt of advance of Rs.5,000 out of the sale consideration of Rs.45,000 is bound to execute the sale deed and when especially the plaintiff has always been ready and willing to pay the balance of the sale consideration and to have the sale deed. After having entered into the agreement, the plaintiff came to know that at the time when the defendant purchased the suit property, one of his vendor was a minor and the defendant had retained some amount payable to the said minor’s share and on attaining majority of the minor, he should pay the said amount and to get the ratification deed. When the plaintiff requested the defendant to obtain a ratification deed from the minor, who by that time, become major, the defendant has not complied with the same and only in the said circumstances, the plaintiff was not able to pay the amount due to the Bank. But, however, the plaintiff was always been ready and willing to pay the balance of the sale consideration. 8. But, however, the plaintiff was always been ready and willing to pay the balance of the sale consideration. 8. On the contrary learned advocate for the respondent/defendant would submit that the plaintiff was not at all ready to have the sale deed and there was no condition or stipulation in the sale agreement that the defendant has to obtain a ratification deed from the minor vendor of the defendant and in the absence of the same, the plaintiff cannot compel the defendant to obtain such a document. It is further submitted that as per the terms and conditions of the agreement, the “time stipulated in the agreement is essence of the contract” and the plaintiff committed breach of the same and therefore, he is not entitled to have the specific performance of the contract and thereby supported the decree and judgment passed by the learned single Judge. 9. Now, the point for consideration is, whether the plaintiff has performed her part of the contract as per the terms and conditions of the agreement or had she caused breach of the contract? 10. The fact that the defendant agreed to sell the suit property to the plaintiff and the sale consideration was fixed at Rs.45,000 out of which, the defendant received Rs.5,000 as advance and the terms and conditions were reduced into writing, are not in dispute. As per Clause 4(a) of the agreement, the property tax due to the Corporation of Madras and the urban land tax due to the Government of Tamil Nadu, if any, till date of registration of the sale deed shall be deducted from the balance amount of Rs.40,000. Clause 4(b) states that the loan amount due to the Egmore Branch of the Indian Bank shall be paid by the purchaser from and out of the balance amount of Rs.40,000. Clause 8 recites “The purchase shall be completed on or before 30.6.1975 by purchaser paying the balance of purchase money as aforesaid and the vendor executing the sale deed and getting it registered. The parties mutually agree that ‘time is the essence of the contract.” It emerges from the agreement itself that the defendant had the necessity to sell the suit property to discharge the loan amount due to the Indian Bank, and the plaintiff had agreed to discharge the said loan amount as per the terms and conditions of the agreement. The parties mutually agree that ‘time is the essence of the contract.” It emerges from the agreement itself that the defendant had the necessity to sell the suit property to discharge the loan amount due to the Indian Bank, and the plaintiff had agreed to discharge the said loan amount as per the terms and conditions of the agreement. It is also seen from the evidence of D.W.1 that, within two or three days, from the date of agreement, the plaintiff’s advocate was taken to the Bank for scrutinising the document, which fact is not denied by the plaintiff. In fact, there is an admission of the said fact, in the notice issued on behalf of the plaintiff on 6.7.1975, (Ex.A.12) wherein it is stated “the documents of title were also inspected by me (advocate) at the Egmore Branch of the Indian Bank, Madras, that your title to the property agreed to be sold is proper except to the extent of getting a ratification deed executed and registered by P.B.Ramji, one of your vendors under the sale deed dated 8.12.1966, who was a minor at the time of the sale”. As such, the plaintiff had knowledge that one Ramji has to execute a ratification deed, but no demand has been made by the plaintiff for about two months, till a telegram sent on 28.6.1975, followed by a notice dated 6.7.1975. The plaintiff also had not chosen to discharge the loan amount due to the Bank and the defendant in his evidence has stated that the Bank has filed a suit against him in O.S.No.1526 of 1975 for non payment of the loan amount. 11. It is clear that the defendant came forward to sell the property mainly to discharge the loan amount due to the Bank and the plaintiff also had undertaken to discharge the said loan amount, but she has not chosen to do so. The plaintiff having entered into an agreement with the defendant, has been keeping silent for about two months till she sent a telegram, which shows that the plaintiff has not moved even an inch to carry out the conditions prescribed in the agreement and to have the sale deed. The plaintiff has also not chosen to send a notice immediately after the inspection of the title deeds. The plaintiff has also not chosen to send a notice immediately after the inspection of the title deeds. In the absence of the fulfilment of material conditions, plaintiff cannot be heard to say that the plaintiff has been ready and willing to perform her part of the contract. 12. The sale agreement does not state that the defendant should get a ratification deed from Ramji and produce the same to the plaintiff. According to appellant’s counsel though such a clause was not incorporated in the agreement, it is incumbent upon the defendant to sell the property without any encumbrance, for which, he has to obtain a ratification deed from Ramji. The plaintiff never demanded that the defendant should get a registered document from Ramji as they now contend. It is also seen that the defendant has also not taken any steps to call upon the plaintiff to have the sale deed when the time stipulated in the agreement was fast approaching. The defendant should have also intimated the said fact to the plaintiff, but, has not done so. Hence, the defendant is also equally guilty. 13. Though time is not usually the essence of the contract, in the matter of sale in respect of immovable property, in our case, there is clear stipulation in Clause 8 of the agreement itself, that the time stipulated in the agreement is essence of the contract. The plaintiff had not chosen to comply with any of the conditions set forth in the agreement. When the time was running short, the plaintiff has chosen to send a telegram and there is nothing on record to show that the plaintiff was ready to fulfil her obligations. But, on the other hand, it could be seen that the plaintiff was not ready and willing to perform her part of the contract. Even at the time, when the plaintiff issued the notice, she has not come forward to show her bona fide that she is always ready and willing to pay the balance of the sale consideration and to have the sale deed by sending the amount to the defendant. The plaintiff at least could have deposited the amount into a bank or into the Court at the time when the suit was filed to prove that she is always ready and willing to pay the balance of the sale consideration and to have the sale deed. The plaintiff at least could have deposited the amount into a bank or into the Court at the time when the suit was filed to prove that she is always ready and willing to pay the balance of the sale consideration and to have the sale deed. But, the plaintiff has miserably failed in doing so and having not proved that she was ready to perform her part of contract, she is not entitled to the discretionary relief of specific performance from the Court. 14. The plaintiff having paid a fraction of the sale consideration, has been in an assertive mood that she would be able to get the sale deed without performing or carrying out any of the conditions set forth in the agreement and also seeking the help of the Court to assist her. The plaintiff cannot seek such an assistance from the Court, as granting of the decree for specific performance is discretionary one and it should be exercised judiciously and cautiously. 15. Sec.20 of the Specific Relief Act states "Discretion as to decreeing specific performance: (i) 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 of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance- (a) Where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) Where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff. (c) Where the defendant entered into the contract under circumstances’ which though not rendering the contract voidable, makes it inequitable to enforce specific performance." 16. (c) Where the defendant entered into the contract under circumstances’ which though not rendering the contract voidable, makes it inequitable to enforce specific performance." 16. In our case, the sale agreement was entered into in the year 1975 and even thereafter, the defendant/owner of the suit property has been in continuous possession and enjoyment of the property and there was no delivery of the property agreed to be sold to the plaintiff and the plaintiff is also not in possession of the property agreed to be sold in part performance of the contract and now, two and half decades have passed after the agreement and the value of the property has spirallinq and increased by leaps and bounds, but, whereas the plaintiff parted away only a sum of Rs.5,000 and therefore, if the performance of the contract is ordered, the hardship that would be caused to the defendant would outweigh the hardship that could be caused to the plaintiff. 17. In Parakunnan Veetill Joseph’s Son Mathew v. Nedumbara Kuruvila’s Son, A.I.R. 1987 S.C. 2328, the Supreme Court held that, "Sec.20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. 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. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff." 18. Bearing, in mind the above-said proposition, we are of the considered view that the plaintiff is not entitled to the discretionary relief of specific performance, as she has miserably failed to prove that he was ready and willing to perform her part of the contract within the stipulated time despite the fact that there was specific clause that the "time was essence of the contract" and that therefore, we hold that the above said facts would constitute good and reasonable grounds for refusing the discretionary relief of specific performance and the plaintiff is not entitled to the relief as prayed for. 19. In the result, the decree and judgment of the learned single Judge are confirmed. 19. In the result, the decree and judgment of the learned single Judge are confirmed. We feel that the plaintiff, who had paid Rs.5,000 should not go with empty hands and therefore, we direct the defendant to return the said amount together with interest at the rate of 12% per annum from the date of agreement till the date of payment. No order as to costs.