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Andhra High Court · body

2007 DIGILAW 947 (AP)

Pundi Govindarajan v. Subas Chandra Sahu

2007-09-27

G.YETHIRAJULU

body2007
JUDGMENT :- This appeal is preferred by the plaintiff in O.S. No.627 of 1987 on the file of the learned District Munsif at Palakonda. 2. The suit was filed by the plaintiff for specific performance of an agreement of sale directing the defendant to execute a sale deed in respect of the plaint schedule property and to put the plaintiff in possession of the same or in the alternative to pay the advance amount of Rs.5,100/- with interest. The defendant resisted the suit and both parties adduced evidence in support of their respective contentions. The trial Court, after considering the evidence adduced by both parties, granted the decree in favour of the plaintiff directing the defendant to execute the sale deed in respect of the suit schedule property of 4 cents and put the plaintiff in possession of the same. Being aggrieved by the same, the defendant preferred A.S. No.15 of 1996 on the file of the Subordinate Judge, Rajam and the learned Subordinate Judge allowed the appeal by setting aside the decree and judgment of the lower Court to the extent of the relief of specific performance and decreed the suit for alternative relief of refund of Rs.4,901/-. Being aggrieved by the same, the plaintiff preferred the present appeal challenging the validity and legality of the judgment of the Appellate Court with the following substantial questions of law to be considered by this Court: 1. Whether the time is the essence of the contract between the parties; 2. Whether the• Appellate Court failed to frame points for consideration in the Appeal Suit; and 3. Whether there is any perversity in the judgment of the Appellate Court. 3. The suit was filed for specific performance of an agreement of sale. An agreement of sale was executed in favour of the plaintiff on 21.7.1987 agreeing to sell the land for Rs.l6,000/-. At the time of execution of the agreement of sale, Rs.5,001/- was given by the plaintiff as advance. The balance of sale consideration was agreed to be paid on 6.10.1987 and the plaintiff to bear the stamp and registration charges. The plaintiff averred that the defendant, with a view to sell the land for a higher price, gave a notice on 19.10.1987 to complete the execution of sale by 26.10.1987. The said notice was not received by the plaintiff before 23.10.1987 as he was absent at his village. The plaintiff averred that the defendant, with a view to sell the land for a higher price, gave a notice on 19.10.1987 to complete the execution of sale by 26.10.1987. The said notice was not received by the plaintiff before 23.10.1987 as he was absent at his village. After receiving the notice, the plaintiff asked the defendant about the notice. The defendant stated that he has issued the notice in the usual course and the plaintiff need not worry about it. But curiously on 8.11.1987, the defendant sent another registered notice infom1ing the plaintiff about the cancellation of the agreement of sale and sent a draft for Rs. 490l- in the name of the plaintiff. The draft was returned to the defendant's advocate stating that a suit is being filed in the Court. The plaintiff further averred that time is not the essence of the contract. The defendant has no legal right to cancel the suit agreement on the ground that the time is the essence of the contract. The defendant refused to execute the sale deed. The plaintiff is always ready and willing to perform his part of contract. Hence, the suit for specific performance. 4. The defendant filed a written statement with the following contentions in brief: The agreement of sale and consideration are not disputed. As the defendant is in dire need of money, he agreed to sell the land, provided the plaintiff pays the entire sale consideration at once. The plaintiff requested time till 6.10.1987 for payment of the entire amount and the defendant agreed for it. In the meantime, at the request of the plaintiff, the defendant executed the suit agreement on 21.7.1987 and received advance of Rs.5,001/-. The balance amount of Rs. l0,999/- has to be paid on or before 6.10.1987 and a registered sale deed has to be obtained from the defendant. Time is the essence of the contract and that is why the date was stipulated as 6.10.1987. The plaintiff did not pay the balance of sale consideration and obtained the sale deed by committing breach of trust. l0,999/- has to be paid on or before 6.10.1987 and a registered sale deed has to be obtained from the defendant. Time is the essence of the contract and that is why the date was stipulated as 6.10.1987. The plaintiff did not pay the balance of sale consideration and obtained the sale deed by committing breach of trust. The defendant issued a legal notice on 19.10.1987 to the plaintiff mentioning that the time is the essence of the contract and further intimated that if the plaintiff failed to turn-up on or before 26.10.1987 with the balance of sale consideration of Rs.10,999/- and obtained the sale deed, the agreement of sale should be treated as cancelled and the plaintiff seizes to have any right over the suit land. After receipt of the notice, the plaintiff did not care to complete his part of contract. Therefore, the defendant got issued another legal notice on 8.11 .1987 intimating the plaintiff that the agreement of sale stood cancelled and after deducting Rs.100/- towards expenses, the balance amount of Rs. 4,901/- was refunded by enclosing the draft to the notice. The plaintiff returned the draft and got a reply notice issued on 17.11.1987 informing that a suit for specific performance is being filed against the defendant. Therefore, the suit is liable to be dismissed. 5. The trial Court framed appropriate c issues and proceeded with the trial. The plaintiffs examined PWs.1 to 3 and marked d Exs.A-1 to A-7. The defendant examined n DWs.1 and 2 and marked Ex. B-1. The trial a Court, after considering the oral and documentary evidence adduced by both parties, held that the time is not the essence of the contract as it is mentioned in the a agreement of sale that the plaintiff has to get the sale deed executed at the request of the defendant whenever called upon. Therefore, the plaintiff has not committed any breach of contract. The trial Court further observed that the defendant was having an evil idea of sel1ing away the property for higher price and to deny the plaintiff from possessing the suit schedule property, which the plaintiff is intending to purchase under EX.A-l. When the time is not the essence of the contract, the defendant is not entitled to cancel the suit agreement. Accordingly, the agreement of sale is enforceable under law and the plaintiff is entitled for the relief as prayed for. Accordingly, the suit was decreed. 6. The Appel1ate Court observed that if the plaintiff is ready to perform his part of contract, he is definitely entitled for specific performance as prayed for. The Appel1ate Court tested whether the plaintiff is ready and wil1ing to perform his part of contract and ultimately came to a conclusion that the plaintiff failed to prove that he is ready and willing to perform his part of contract. The Appellate Court further observed that when originally the date was fixed as 6.10.1987, the plaintiff kept quite, therefore, the defendant got issued a notice asking him to pay the balance of sale consideration before a particular date and get the sale deed registered. There was no reply from the plaintiff. In the, first notice, the defendant specifically stated that if he fails to get the sale deed by paying the sale consideration before 26.10.1987, he will be constrained to cancel the agreement of sale. Despite that, the plaintiff did not move his little finger and ultimately the defendant is constrained to give another notice on 8.11.1987 informing that the agreement of sale stands cancelled and the advance amount was refunded after deduction of expenses of Rs.l00/-. The plaintiff gave a belated reply on 17.11.1987 and even after that also he did not express his readiness to obtain the sale deed, therefore, the Appellate Court felt that the plaintiff was not ready and willing to perforn1 his part of contract. Therefore, the plaintiff is not entitled for the decree of specific performance and granted the alternative relief of refund of the advance amount. 7. The learned Counsel for the appellant, Sri S. Mujib Kumar, represented that there is no recital in the agreement of sale that if the plaintiff fails to pay the balance of sale consideration on a particular date, the agreement of sale stands cancelled or the earnest money forfeited. He further submitted that the time is not the essence of the contract of the sale under EX.A-l from the terms of the agreement. He further submitted that granting of a decree for specific perforn1ance is a rule and denial is an exception and there will be no miscarriage of justice if the suit for specific performance is decreed. He further submitted that the time is not the essence of the contract of the sale under EX.A-l from the terms of the agreement. He further submitted that granting of a decree for specific perforn1ance is a rule and denial is an exception and there will be no miscarriage of justice if the suit for specific performance is decreed. He relied on the following decisions in support of his contentions: In Gomathinayagam Pillai and others v. Palaniswami Nadar, AIR 1967 SC 868 , the Supreme Court held that: "Fixation of the period within which the contract is to be performed does not make the stipulation as to time as the essence of the contract. Intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. It is true that even if time was not originally of the essence, the appellants could by notice served upon the respondent call upon him to take the conveyance within the time fixed and intimate that in default of compliance with the requisition the contract will be treated as cancelled." In Nirmala Anand v. Advent Corporation Private Limited. (2002) 5 SCC 481 , the Supreme Court held that: "Section 20 of the Specific Relief Act, 1963 provides that relief of the specific performance lies in the discretion of the Court and the Court is not bound to grant such relief merely because it is lawful to do so. The discretion cannot be exercised arbitrarily. It has to be exercised in a sound and reasonable manner guided by judicial principles. Sub-section (2) enumerates the circumstances in which the Court may exercise its discretion in not granting the decree of specific performance; subsection (3) gives guidelines for proper exercise of the discretion in decreeing the relief of specific performance; and subsection (4) does away with the requirement of mutuality as a condition for grant of relief of specific performance. Grant of relief of specific performance being discretionary, it cannot be claimed as a matter of right. Grant of relief of specific performance being discretionary, it cannot be claimed as a matter of right. It is governed by sound judicial principles and one of the foremost principle is that the Court should be satisfied that circumstances are such that it is equitable to grant the relief of specific performance of the contract. Under this principle one of the questions which has been considered at times by the Courts is: as to whether due to delay in the grant of decree and the escalation of prices of the real estate during the period is a ground to deny the relief of specific performance. It has repeatedly been held that per se the delay or the escalation of price is no ground to deny the relief of specific performance, in certain cases the Courts in equity and to mitigate the hardship to the vendor have directed the vendee to pay further compensatory amount. But this is not a principle of universal application. It would depend upon the facts and circumstances of each case. It is well-settled that in cases of contract for sale of immovable property, the grant of relief of specific performance is a rule and its refusal an exception based on valid and cogent grounds. Further, the defendant cannot take advantage of his own wrong and then plead that the decree for specific performance would be an unfair advantage to the plaintiff." In S. Indira v. Netyam Venkataramana 1996 (3) ALD 548 = 1996 (3) AL T 1080, , learned Single Judge of this Court held that refusing to grant the specific performance is based on two reasons (i) that the delay is such that it may be properly inferred that the plaintiff has abandoned his right, though waiver is not to be inferred merely from delay in the institution of the suit and (ii) that on account of delay there must have been such a change of circumstances that the grant of specific performance would prejudice the defendant. The Court further observed that if abandonment or waiver is proved, no question of discretion arises and the plaintiff must prove automatically. If there are no circumstances in favour of the defendant, merely because of delay it cannot be held that the plaintiff has abandoned his right. 8. There is no dispute regarding the principles laid down in the above decisions. If there are no circumstances in favour of the defendant, merely because of delay it cannot be held that the plaintiff has abandoned his right. 8. There is no dispute regarding the principles laid down in the above decisions. But, by keeping in view the findings of the Supreme Court, let us examine whether the time is not the essence of the contract, whether the plaintiff is not ready and willing to perforn1 his part of contract and whether the defendant has right to cancel the agreement on account of no response from the plaintiff. Point No.1 : 9. EX.A-1 is the agreement of sale. It was executed on 21.7.1987. In EX.A-1 it was mentioned that the defendant agreed to sell the land for Rs.16,000/- and received an advance of Rs.5,001/- from the plaintiff. It w is further mentioned that the plaintiff be should pay the balance of sale consideration before 6.10.1987 and get ready to bear stamp and registration charges to get the sale deed executed in his favour or the person authorized by him. In EX.A-2 registered notice, dated 19.10.1987, the defendant mentioned that he was in dire need of money. When the plaintiff agreed to pay the entire price within the stipulated time, he agreed to sell the same. Though he is in dire need of money, he complied with the request of the plaintiff with a hope that he will abide by the agreement. But the plaintiff has not turned up till the date of notice to get the land registered in his favour though the time is the essence of contract. It was further mentioned in the notice that if the sale deed is not obtained on or before 26.10.1987 by paying the balance of sale consideration, the plaintiff shall treat the agreement as cancelled, if this notice was received by the plaintiff. But no reply was given. The defendant issued EX.A-3 notice on 8.11.1987 informing re the plaintiff that though he issued EX.A-2 notice, he has not cared to complete the sale transaction and failed to turn-up, is The plaintiff has been notified orally and in writing that is made the essence of the contract in view of the dire necessity of the money for the defendant, the plaintiff has committed deliberate breach of trust. Therefore, the agreement to sell the land stands cancelled and the advance amount of Rs. Therefore, the agreement to sell the land stands cancelled and the advance amount of Rs. 4,901/- was returned after deduction of Rs.100/- towards expenses. After receipt of the said notice of the cancellation of agreement, the plaintiff issued EX.A-5 reply notice on 17.11.1987, wherein it was only mentioned that the cheque for Rs. 4,90l/- on behalf of the plaintiff is returned and a suit for specific performance is being filed. Despite two registered notices issued by the defendant, the plaintiff has not even mentioned that he is ready and willing to perform his part of contract and he is ready with the balance of sale consideration even before the stipulated time mentioned in the agreement. The plaintiff deposited the balance of sale consideration into the Court as per the directions of the Court after the decree of the suit and he did not make any effort to offer the balance of sale consideration before Exs.A-2 and A-3 notices or at the time of issuing EX.A-5 reply notice. Though it was not mentioned in the stir agreement of sale that if the balance of sale consideration is not paid before 6.10.1987, the agreement shall stand cancelled. But in Ex.A-2, notice, the defendant categorically mentioned that if the plaintiff fails to pay to the amount on or before 26.10.1987, he shall treat the agreement cancelled. Even aft after the receipt of the notice also, the plaintiff did not respond and he kept quite. ITC The silence on the part of the plaintiff is an indication that he was not ready and willing to perform his part of contract. Otherwise, he would have definitely paid the amount and get the sale deed executed hi in his favour. 10. The plaintiff mentioned in the plaint d that on receipt of the notice after 23.10.1987, he approached the defendant about the notice and the defendant stated that he gave the notice in the usual course and he need not worry about it. The draft sent by the g defendant was returned to his Counsel, as a the time is not the essence of the contract. The agreement does not speak that the time is the essence of the contract. The defendant has no legal right to cancel the suit agreement. The defendant refused to execute the sale deed. The plaintiff is always ready and willing to perform his part of contract. The agreement does not speak that the time is the essence of the contract. The defendant has no legal right to cancel the suit agreement. The defendant refused to execute the sale deed. The plaintiff is always ready and willing to perform his part of contract. But in the plaint the plaintiff did not mention whether he made any attempt to contact the defendant expressing his willingness to obtain the sale deed. He did not issue any notice to the defendant or raise any dispute before the elders or keep the amount in deposit and convey to the defendant that the sale consideration is lying with the bank or with any other agency or in cash with him. The contents of the documents indicate that the defendant had dire necessity of the money, therefore, he stipulated a condition that the amount has to be paid on or before 6.10.1987. 11. PW -1, in his evidence, stated that in the agreement of sale, there is no stipulation that if he does not obtain a sale deed by 6.10.1987, the suit agreement has to be cancelled. He secured the money for sale consideration and stamp and registration charges and asked the defendant to execute the sale deed on 6.10.1987. But the defendant requested him to come after two days. The defendant postponed the execution of the registered sale deed from time to time and ultimately sent EX.A-2 notice. When he received the notice, he approached the defendant. In the evidence also the plaintiff did not state whether he is ready and wining to perform his part of contract. If he is ready, he should have purchased the stamps and got the sale deed written to prevail on the defendant to execute the sale deed. But no such attempt was made. In the cross-examination, PW -1 stated that he did not give any reply to the notice given by the defendant under EX.A-2. He also conceded that in EX.A-2 it was mentioned that time is the essence of the contract and he was asked to get the sale deed registered by 26.10.1987 and it was also mentioned in EX.A-2 that if he fails to get the sale deed registered by 26.10.1987, the agreement shall stand t cancelled. He also conceded that in EX.A-2 it was mentioned that time is the essence of the contract and he was asked to get the sale deed registered by 26.10.1987 and it was also mentioned in EX.A-2 that if he fails to get the sale deed registered by 26.10.1987, the agreement shall stand t cancelled. It was suggested to the plaintiff f that the agreement of sale was executed to y arrange finance for the marriage of g defendant's wife's sister which was arranged e to take place in the month of November, 1987. He further agreed that originally the p time was stipulated and the amount was agreed to be paid on or before 6.10.1987. He also agreed that it is his responsibility to pay the balance of sale consideration by 6.10.1987 and obtain the sale deed. 12. PW -2, the scribe of Ex. A-1, as mentioned about the writing of the agreement of sale, terms and conditions. He further mentioned that there was no stipulation that if the sale deed is not obtained on or before no 6.10.1987, the agreement stands cancelled. 13. PW-3, one of the attestors of Ex.A-l, also stated the same thing and in the cross-examination, he expressed his ignorance about the negotiations before the agreement of sale. 14. From the above evidence, it is clear that the defendant was always ready to execute the sale deed and receive the sale consideration. Whereas the plaintiff was not ready and willing to perform his part of contract for the reasons best known to him. There is no iota of evidence to show that the plaintiff expressed his readiness at any time before the filing of the suit for obtaining the sale deed after payment of the sale consideration. Since there is a date stipulated in the agreement of sale for execution of sale deed and as it was specifically mentioned in Ex.A-2 that if the plaintiff fails to obtain the sale deed after payment of consideration on or before 26.10.1987, the agreement shall stand cancelled. Therefore, the Appellate Court was right in holding that time is the essence of the contract under the present set of circumstances and after going through the entire material, I am also convinced that the time is the essence of the contract and the defendant was right in cancelling the agreement. Point No.2: 15. Therefore, the Appellate Court was right in holding that time is the essence of the contract under the present set of circumstances and after going through the entire material, I am also convinced that the time is the essence of the contract and the defendant was right in cancelling the agreement. Point No.2: 15. Though the Appellate Court did not frame specific points/for consideration, after going through the entire judgment, I am convinced that the Court has considered the pleadings and oral and documentary evidence and the points raised by the Counsel and in view of the judgments rendered by the Supreme Court, the mere non-framing-of the points for consideration is not a ground to set aside the judgment as the Appellate Court discussed all the aspects at length. Therefore, I do not find re, any grounds to set aside the judgment of the Appellate Court on this ground 363 Point No.3 : 16. The Appellate Court observed that the plaintiff failed to establish that he was ready and willing to perform his part of contract and as the time was made the essence of the contract, the plaintiff failed to get the sale deed executed after payment of the sale consideration. Therefore, the Appellate Court was right in setting aside the judgment of the trial Court. 17. So far as the granting of specific relief is concerned, as the defendant was always ready to refund the amount, the Appellate Court was right in granting the relief of alternative prayer of the plaintiff for refund of the advance amount, therefore, I do not find any perversity in the judgment of the Appellate Court and it was right in reversing the judgment of the trial Court for the reasons as mentioned above. 18. In the result, the second appeal is dismissed by confirming the judgment and decree of the Appellate Court. No order as to costs.