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2006 DIGILAW 837 (RAJ)

Harsahai v. Ramcharan

2006-03-10

VINEET KOTHARI

body2006
Judgment Dr. Vineet Kothari, J.-This second appeal is directed against the Judgment and decree of the learned First Appellate Court of Additional District Judge No. 2, Alwar dated 10.03.1993 whereby the Judgment and decree of the learned trial Court dated 17.01.1990 passed by the learned Additional Civil Judge No. 2, Alwar was upheld and suit of plaintiff Ramcharan for specific performance was decreed against the defendant Harsahai S/o Shri Poonya Meena. This is defendants appeal with a following substantial question of law formulated by this Court while admitting the present second appeal:-“Whether a decree for specific performance could legally be granted as here without going into the question of fact whether the vendee was ready and willing to perform; his part of contract?” 2. The facts giving rise to the present second appeal are like this: as per the plaint the defendant Harsahai S/o Shri Poonya Meena agreed to sell his house a Haveli situated at Prithvipura, Alwar for a sum of Rs. 8,000/-to plaintiff Ramcharan and an agreement to this effect Exhibit-1 was executed by him on 09.08.1975 and under the said agreement a sum of Rs. 6,500/-was given by plaintiff Ramcharan to him with the stipulation that the balance amount of Rs. 1,500/-was to be paid by the plaintiff before the Sub-Registrar at the time of registration of the sale-deed which was to be executed by Jesth Sudhi Samvat 2033 corresponding to 31.05.1976. 3. It was further pleaded that the defendant Harsahai despite several verbal and written requests avoided registration of the property and execution of sale-deed that the plaintiff Ramcharan was always ready and willing to pay the balance sale price and complete other formalities but since the defendant refused to execute the said sale-deed, the suit was filed on 08.08.1978 seeking specific performance of the contract and in the alternative for refund of Rs. 6,500/-with interest @ 12% p.a. Seven issues were framed by the learned trial Court including one for relief . The first four issues were decided in favour of the plaintiff . The 5th issue as to whether the defendant had given as a consideration of loan taken from plaintiff s father the crop quantifying 80 Man Chana and 70 Man Wheat. The trial Court held that the defendant had failed to prove this. The Issue No. 6 was also decided in favour of the plaintiff and against the defendant. 4. The 5th issue as to whether the defendant had given as a consideration of loan taken from plaintiff s father the crop quantifying 80 Man Chana and 70 Man Wheat. The trial Court held that the defendant had failed to prove this. The Issue No. 6 was also decided in favour of the plaintiff and against the defendant. 4. The learned trial Court accordingly decreed the suit and held that defendant Harsahai was to execute the sale-deed in pursuance of the agreement dated 09.08.1975 within a period of two months. 5. The said Judgment and decree of the learned trial Court was upheld by the first appellate Court also vide its Judgment dated 10.03.1993. 6. Being aggrieved by the same, this second appeal has been preferred before this Court by the defendant. 7. Shri B.L. Mandhana, learned Counsel appearing for the defendant appellant Harsahai urged before this Court that there has been a complete misreading of the evidence led before the trial Court and on a correct and proper construction of the agreement Exhibit-1, it will be clear that it was essentially an transaction of loan given by the plaintiff Ramcharan to the defendant Harsahai and for securing the repayment of loan, the said agreement purporting to be an Agreement to Sell was got executed. The terms of the said agreement clearly stipulate that if the defendant fails to execute the sale-deed by the stipulated date, the plaintiff shall be entitled to refund of the said sum of Rs. 6,500/- and further sum of Rs. 6,500/-as a damages and total sum of Rs. 13,000/-and in case the plaintiff refused to purchase the said property, the said sum of Rs. 6,500/-given to the defendant shall be waived and be liable to be forfeited. The said agreement Exhibit-1 is duly signed by the defendant Harsahai alongwith two attesting witnesses Gopi Ram S/o Shri Harnarain and Prabhu Dayal S/o Shri Panchu Ram. While execution of the said document is not in dispute, the construction of the said document would be relevant for deciding the present second appeal and is the substantial question of law. 8. The learned Counsel for appellant has further submitted that neither the plaintiff has shown his readiness and willingness to perform his part of the contract namely payment of balance sum of Rs. 8. The learned Counsel for appellant has further submitted that neither the plaintiff has shown his readiness and willingness to perform his part of the contract namely payment of balance sum of Rs. 1,500/-nor the trial Court even framed an issue in this regard and even his application under Order 14 Rule 5 for framing additional issues was rejected by the trial Court. He has further drawn my attention to the notice given by the plaintiff before filing of the suit, Exhibit-3 and in the said notice also the plaintiff has not signified his readiness and willingness to perform his part of the contract and the said notice was merely for payment of Rs. 13,000/-. In the said notice the plaintiff merely stated that he also has the right to get the sale-deed of the Haveli in question executed but he does not call upon the defendant to execute the sale-deed. Therefore, in the absence of this aspect being proved, no decree for specific performance could be passed. Therefore, he contends that it was only a loan transaction under which the plaintiff advanced a loan of Rs. 6,500/-and, therefore, suit for specific performance in these circumstances on the strength of Exhibit-1 agreement could not have been decreed by both the Courts below and those Judgment deserves to be set aside. .9. Learned Counsel for appellant has further invited the attention of the Court towards Section 23 of the Specific Relief Act, 1963 which is reproduced here under:- .23. Liquidation of damages not a bar to specific performance -(1) A contract, otherwise proper to be specifically enforced, may be so enforced, though a sum be named in it as the amount to be paid in case of its breach and the party in default is willing to pay the same, if the Court, having regard to the terms of the contract and other attending circumstances, is satisfied that the sum was named only for the purpose of securing performance of the contract and not for the purpose of giving to the party in default an option of paying money in lieu of specific performance. .(2) When enforcing specific performance under this section, the Court shall not also decree payment of the sum so named in the contract.” .10. On the basis of the aforesaid provisions, he contended that since the option of paying money of Rs. .(2) When enforcing specific performance under this section, the Court shall not also decree payment of the sum so named in the contract.” .10. On the basis of the aforesaid provisions, he contended that since the option of paying money of Rs. 13,000/-was in lieu of specific performance which was further corroborated by the notice Exhibit-3 given by the plaintiff , it would amount to an option given to the defendant to pay back the money in lieu of specific performance and, therefore, it would amount to bar against specific performance and both the Courts below have erred in awarding the specific performance. He relies upon the Judgment of Honble Supreme Court in the case of Dadarao & Anr. vs. Ramrao & Ors., 1999 (8) SCC 416 . The relevant extract of the said Judgment is as under:- .“The relationship between the parties has to be regulated by the terms of the agreement between them. The agreement in this case contemplates that on or before 15.04.1972 the sale-deed would be executed. But what is important is that the agreement itself provides as to what is to happen if either the seller refuses to sell or the purchaser refuses to buy. In that event the agreement provides that in addition to the earnest money of Rs. 1,000/-a sum of Rs. 500/-was to be given back to T and that “no sale-deed will be executed.”. The agreement is very categorical in envisaging that a sale deed is to be executed only if both the parties agree to do so and in the event of any one of them resiling from the same there was to be no question of the other party being compelled to go ahead with the execution of the sale-deed. In the event of the sale-deed not being executed, Rs. 500/-in addition to the return of Rs. 1,000/-was the only sum payable. This sum of Rs. 500/- perhaps represented the amount of quantified damages or, as the defendants would have it, interest payable on Rs. In the event of the sale-deed not being executed, Rs. 500/-in addition to the return of Rs. 1,000/-was the only sum payable. This sum of Rs. 500/- perhaps represented the amount of quantified damages or, as the defendants would have it, interest payable on Rs. 1,000/-If the agreement had not stipulated as to what is to happen in the event of the sale not going through, then perhaps the plaintiff could have asked the Court for a decree of specific performance but here the parties to the agreement had agreed that even if the seller did not want to execute the sale-deed he would only be required to refund the amount of Rs. 1,000/-plus pay Rs. 500/-in addition thereto. There was thus no obligation on B to complete the sale transaction.” 11. As against this Ms. Shilpi Gupta, learned Counsel appearing for the plaintiff respondent Ram Charan vehemently and very ably submitted that not only two Courts below have concurrently found against the defendant that Exhibit-1 was an agreement to sell of which specific performance was decreed in favour of the plaintiff but she also contended that the plaintiff was always ready and willing to perform his part of the contract and requirement of Section 16(c) of the Specific Relief Act, 1963 that the plaintiff has to aver and prove that he 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 has been prevented or waived by the defendant, stands satisfied in the present case. Since, the plaintiff in Paras 5 and 7 of the plaint has clearly stated and there is no specific denial of the same in the written statement filed by the defendant, it has to be treated as established that the plaintiff has proved his readiness and willingness to perform his part of the contract throughout. She relies upon the following Judgment s in support of her submissions:- 1. JT 2006 (2) SC 419, Most. Etwari Devi & Ors. vs. Most. Parvati Devi. 2. 2005(12) SCC 270 , Harjeet Singh & Anr. vs. Amrik Singh & Anr. 3. 2005(12) SCC 214, Alizan Mian vs. Naro Dusadh & Ors. 4. 2000(6) SCC 420 , Motilal Jain vs. Ramdasi Devi (Smt.) & Ors. 5. 1999(6) SCC 337 , Syed Dastagir vs. T.R. Gopal Krishna Setty. 6. Etwari Devi & Ors. vs. Most. Parvati Devi. 2. 2005(12) SCC 270 , Harjeet Singh & Anr. vs. Amrik Singh & Anr. 3. 2005(12) SCC 214, Alizan Mian vs. Naro Dusadh & Ors. 4. 2000(6) SCC 420 , Motilal Jain vs. Ramdasi Devi (Smt.) & Ors. 5. 1999(6) SCC 337 , Syed Dastagir vs. T.R. Gopal Krishna Setty. 6. AIR 1986 MP 39 , Mithu Khan vs. Ms. Pipariyawali & Ors. 12. Learned Counsel for the respondent plaintiff Ms. Shilpi Gupta further contends that two Courts below having exercised their powers and granted the discretionary relief of specific performance, the decree does not deserve to be upset in the second appeal and as a matter of fact no substantial question of law arises in the matter and the second appeal deserves to be dismissed. 13. On a thoughtful consideration of the rival submissions and upon perusal of record, this Court is of the opinion that the present second appeal deserves to be allowed. The agreement Exhibit-1 signed by the defendant Harsahai alongwith two attesting witnesses is not signed by the plaintiff at all. Therefore, ex-facie, this cannot be an agreement between two parties. The tenor of the said agreement also shows that it is more an undertaking of the respondent to pay back the said amount of Rs. 6,500/- by the stipulated date and if he fails to pay the same, the double of that amount is to be paid. The additional stipulation that he would execute a registered sale-deed in favour of the plaintiff shows that the same was more by way of providing a collateral security to the plaintiff for the amount advanced by him rather than a real agreement to sell his property under the said agreement. The notice Exhibit-3 given by the plaintiff makes his intention more than clear. He was more interested in refund of Rs. 13,000/-and additionally he has expressed his right to get the registered sale-deed for the house of defendant executed in his favour, without expressing anywhere in the said notice that he was ready and willing to purchase the said property by paying the balance amount of Rs. 1,500/-. There is no other document in writing on record which signifies the readiness and willingness of the plaintiff to complete his part of the said agreement, if it can be called one. 1,500/-. There is no other document in writing on record which signifies the readiness and willingness of the plaintiff to complete his part of the said agreement, if it can be called one. In the face of this merely bald and vague averment in the plaint that he was ready and willing to complete his part of the agreement is more to reiterate the language of statute rather than reflection of truthful events. Added to all this is the failure of trial Court to frame an issue and pronounce upon the same after allowing the parties to lead evidence on such issue, knocks the bottom out of the case of the plaintiff . Without the aspect of readiness and willingness of the plaintiff to perform his part of the agreement being decided no decree for specific performance can be passed in his favour. 14. Therefore, this Court is of the clear opinion that the plaintiff clearly gave an option of paying back the money to the defendant in lieu of specific performance bringing the case within exception part of Section 23 (1) of the Act. Therefore, the suit for specific performance could not have been decreed in favour of the plaintiff and both the Courts below have erred in doing so. The impugned Judgment s and decrees of the trial Court as well as first appellate Court are, therefore, liable to be set aside and are accordingly hereby set aside. 15. For the aforesaid reasons, this second appeal is allowed. The plaintiff is not entitled to specific performance of the contract. The defendant is however directed to refund the sum of Rs. 6,500/-alongwith simple interest @ 6% p.a. through out to the plaintiff . Decree be made accordingly.