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2007 DIGILAW 968 (AP)

Mamidi Jagannadham v. Yelgani Shankaraiah

2007-10-03

G.YETHIRAJULU

body2007
JUDGMENT This Appeal is preferred by the plaintiff in O.S.No.55 of 1987 on the file of the learned District Munsif, Ibrahimpatnam. 2. The suit was filed by the plaintiff for specific performance of an agreement of sale against the defendant and for perpetual injunction retraining the defendant and his men from interfering with the peaceful possession and enjoyment of the suit schedule land. 3. The averments of the plaint discloses that the defendant offered to sell the suit land for a consideration of Rs.1,300/- per acre. The plaintiff agreed to purchase the same and an agreement of sale covered by Ex.A-1 was executed by the defendant, wherein it was mentioned that the plaintiff paid Rs.1,500/- towards earnest money and the possession of the property was delivered by the defendant to the plaintiff on the same day in part performance of the contract and since then, the plaintiff is in possession and enjoyment of the land. The defendant again approached the plaintiff on 16-08-1979 and requested to pay Rs.1,000/- and accordingly, the plaintiff paid the said amount in the presence of PW-2. Again the plaintiff paid Rs.5,000/- on 05-03-1981 in the presence of PW-2. But the defendant did not pass any receipts for the payments made subsequent to the agreement of sale. The plaintiff, after calculating the amount, paid the balance of consideration of Rs.1,112/- on 10-01-1982 and requested the defendant to execute the registered sale deed in his favour. The defendant was evading executing the sale deed on some pretext or other and tried to sell away the property to third parties. The plaintiff demanded the defendant in February, 1987 for execution of a registered sale deed. But, the defendant issued Ex.A-14 registered notice on 03-03-1987 with false and untenable allegations. The plaintiff gave Ex.A-15 reply notice on 17-03-1987 and filed the present suit for the reliefs as indicated above. 4. The defendant contended, through his written statement, that the execution of the agreement of sale, receipt of earnest money of Rs.1,500/- and consideration for the sale is not disputed. The plaintiff did not choose to pay the balance of sale consideration at the instance of the son of the defendant. The other son of the defendant by name Sudharshan pursued the matter. On demand of Sudharshan also, the plaintiff failed to pay the balance of sale consideration. The plaintiff did not choose to pay the balance of sale consideration at the instance of the son of the defendant. The other son of the defendant by name Sudharshan pursued the matter. On demand of Sudharshan also, the plaintiff failed to pay the balance of sale consideration. The said Sudharshan paid a sum of Rs.14,400/- towards the land bearing Sy.Nos.52 and 207 to the defendant and his other sons and got executed an agreement and also a receipt on 03-02-1984 in his favour and in consideration thereof, the land bearing Sy.Nos.52 and 207 were given to Sudharshan by all the share holders including the defendant. Thus the agreement executed by the defendant in favour of the plaintiff was cancelled and the suit lands have been given to his son Sudharshan and in pursuance of that, the said Sudharshan came into possession of the suit land and the entire transaction took place within the knowledge of the plaintiff and PW-2 after amicable settlement between the parties. But subsequently, when differences arose between the plaintiff and the defendant's son Sudharshan in Febarry, 1987, the plaintiff started asserting his rights on the basis of the agreement. Therefore, the defendant got issued a legal notice, dated 03-03-1987 for cancellation of the agreement. The suit is barred by limitation, therefore, it is liable to be dismissed. 5. On the basis of the above pleadings, the trial Court framed appropriate issues and trial was conducted. The plaintiff examined PWs.1 and 2 and marked Exs.A-1 to A-15. The defendant examined DWs.1 to 3 and marked Exs.B-1 to B-11. After considering the said evidence, the trial Court decreed the suit by granting the relief of specific performance and injunction on condition of the plaintiff paying the balance of sale consideration to the defendant on or before 30-11-1994 and the defendant shall execute the registered sale deed in favour of the plaintiff. Being aggrieved by the decree and Judgment of the trial Court, the defendant preferred A.S.No.12 of 1995 before the Additional District Court, Rangareddy District and the Appellate Court allowed the Appeal by setting aside the decree and Judgment of the trial Court. The plaintiff, being aggrieved by the first Appellate Court, preferred the present Appeal by raising the following substantial questions of law for consideration by this Court: 1. The plaintiff, being aggrieved by the first Appellate Court, preferred the present Appeal by raising the following substantial questions of law for consideration by this Court: 1. Whether the Appellate Court is justified in refusing to grant a decree for specific performance when the time was not the essence of the contract on the ground that the plaintiff was not ready and willing to perform his part of contract without properly appreciating the ratio laid down in SHA PEERCHAND v. JANDHYALA VENKATA SUBRAMANYA JYOSYULU 1. 2. Whether the Judgment and decree of the Appellate Court are sustainable in holding the possession of the Appellant as illegal without referring to the fact that the plaintiff is entitled to protection under Section 53-A of the Transfer of Property Act (for short 'the Act'); 3. Whether the defendants are entitled for recovery of possession without filing the suit for recovery of possession when the plaintiff was in continuous possession of the suit schedule land. 6. In order to answer the said points, it has to be verified whether the plaintiff is entitled for the relief of specific performance and permanent injunction. 7. The execution of Ex.A-1, agreement of sale, by the defendant on 02-07- 1979, the sale consideration and the receipt of advance amount of Rs.1,500/- are not disputed. The plaintiff claimed that he paid the entire sale consideration in three instalments and the possession was delivered by the defendant on the date of Ex.A-1. As the defendant failed to execute the sale deed despite receipt of the sale consideration, the plaintiff filed the above suit. Per contra, the defendant contended that the plaintiff did not choose to pay the balance of sale consideration. Therefore, his sons persuaded him to sell the property in favour of his son Sudharshan, therefore, the defendant received a sale consideration of Rs.4,400/- from his son Sudharshan and executed an agreement of sale on 03-02-1984. Thus, the agreement of sale executed in favour of the plaintiff was cancelled and the land was delivered to his son Sudharshan and he immediately came into possession of the said land. 8. PW-1, who is the plaintiff in the suit, deposed that under Ex.A-1, agreement of sale, the balance of sale consideration was paid on three occasions in the presence of PW-2. But, no receipts were passed by the defendant. 8. PW-1, who is the plaintiff in the suit, deposed that under Ex.A-1, agreement of sale, the balance of sale consideration was paid on three occasions in the presence of PW-2. But, no receipts were passed by the defendant. He further stated that the subsequent payments were made in the presence of PW-2. He further stated that PW-2 did not disclose to him that he scribed Exs.B-1 agreement of sale and B-2, document executed between the defendant and his son Sudharshan. 9. PW-2, who alleged to be present at the time of payment, deposed that he along with the defendant went to PW-1 and collected Rs.1,000/- on 05-03-1981 and again a sum of Rs.5,000/- was paid to the defendant and on 10-01-1982 the entire balance of sale consideration less 50 paise was paid to the defendant by the plaintiff. In the cross-examination, he stated that there were no endorsements about the payments on Ex.A-1 even after making final payments also. Ex.B-2 was scribed and signed by him. He further stated that Ex.B-3 receipt is in his handwriting besides his signature. He further stated that Exs.B-2 and B-3 are reduced into writing in connection with the money transactions between the parties and the suit survey numbers were also referred in Exs.B-2 and B-3. As on the date of Exs.B-2 and B-3, PW-1 owes a sum of Rs.1,112-50 ps to the defendant. He further stated that except himself, there is no body present at the time of the subsequent payments made by the plaintiff. 10. The defendant, in his evidence as DW-1, stated that the time for payment of the balance of sale consideration was not mentioned in Ex.A-1. He admitted about the delivery of possession of the land to PW-1 subsequent to Ex.A-1. He further stated that he executed a sale deed and delivered possession of the land covered by Sy.No.52 to one Panjaldas. 11. The trial Court observed that the version of PW-1 that he paid the amounts subsequent to Ex.A-1 in the presence of PW-2 has to be viewed with suspicion. If really PW-1 paid the amounts, he would not have failed to obtain receipts from DW-1 in respect of the payments made subsequent to Ex.A-1. 11. The trial Court observed that the version of PW-1 that he paid the amounts subsequent to Ex.A-1 in the presence of PW-2 has to be viewed with suspicion. If really PW-1 paid the amounts, he would not have failed to obtain receipts from DW-1 in respect of the payments made subsequent to Ex.A-1. Had the plaintiff paid the balance of sale consideration, he would not have kept quite for issuing a legal notice to the defendant for execution of a registered sale deed till the year 1987 when the defendant got issued a legal notice to him. It is not the case of PW-1 that he paid the amount to meet the litigation expenses in connection with the suit land. Therefore, the learned Magistrate has no hesitation to hold that PW-1 did not pay the balance of sale consideration to DW-1. The trial Court further observed that DW-1 admitted in his evidence that he delivered possession of the property in favour of PW-1 as per the terms of Ex.A-1 agreement of sale. Exs.A-2 to A-13 also go to show that PW-1 was in possession and enjoyment of the land. DW-2, who was examined by the defendant, stated that PW-1 is in possession of the suit land. If really PW-1 was not in possession of the suit land, DW-2 would not have spoken about the possession. Therefore, the possession of the PW-1 in the suit land has to be viewed without any suspicion. The trial Court further observed that if really the land was sold to Sudharshan on 03-04-1982, the defendant would not have failed to mention the same in Ex.A-14, legal notice, issued in 1987. The non-mentioning of the sale transaction in favour of his son Sudharshan, who was examined as DW-3, it is clear that it is an afterthought brought into existence to suit the story of the defendant in the present case. The trial Court further observed that under Ex.A-1, there is no time prescribed for payment of the balance of sale consideration. On the other hand, it is mentioned that the balance of sale consideration shall be paid only at the time of the completion of the sale transaction before registering authority. The trial Court further observed that under Ex.A-1, there is no time prescribed for payment of the balance of sale consideration. On the other hand, it is mentioned that the balance of sale consideration shall be paid only at the time of the completion of the sale transaction before registering authority. If really the sale transaction is cancelled and a sale is executed in favour of DW-3, DW-1 ought to have failed to mention the same under Ex.A-14 legal notice issued in the year 1987 just prior to the filing of the suit. By relying on a Judgment of this High Court in SHA PEERCHAND's case (1 supra), the trial Court held that as the time was not fixed for payment of the balance of sale consideration and as the plaintiff established delivery of possession under Ex.A-1, it cannot be said that PW-1 did not perform his part of contract in pursuance of the agreement of sale covered by Ex.A-1. The non-payment of balance of sale consideration will not disentitle the plaintiff to get the relief of specific performance of contract. Therefore, the plaintiff is entitled for the relief of specific performance of contract and he is also entitled for permanent injunction. 12. The Appellate Court reversed the Judgment of the trial Court with the following observations: The plaintiff contended that he paid the balance of sale consideration on different days and the payment was completed by 10-01-1982. PW-2 scribed Ex.B-1 agreement of sale and Ex.B-2 receipt executed by the defendant in favour of his son Sudharshan in respect of the suit property for a sale consideration of Rs.44,400/-. It is the evidence of Pw-2 that as on the date of Exs.B2 and B-3, the plaintiff has to pay some balance of sale consideration to the defendant under the suit agreement of sale. His evidence is quite contradictory from stage to stage. No proper explanation was given by PWs.1 and 2 as to why no receipts were obtained and no endorsement was made on Ex.A-1. Therefore, an adverse inference has to be drawn that the amounts were not paid to the defendants. The lower court rightly rejected the claim made by the plaintiff that he paid the balance of consideration under Ex.A-1. No proper explanation was given by PWs.1 and 2 as to why no receipts were obtained and no endorsement was made on Ex.A-1. Therefore, an adverse inference has to be drawn that the amounts were not paid to the defendants. The lower court rightly rejected the claim made by the plaintiff that he paid the balance of consideration under Ex.A-1. The Appellate Court further observed that on the observations made by the trial Court regarding the genuineness of the agreement of sale and delivery between the defendant and his son, he did not find any reasons to interfere with the same because the trial Court came to such conclusion after considering all the proper relevant circumstances. The circumstances that the plaintiff made false claims of payment of the balance of sale consideration and did not approach the Court with necessary material and approaching with clean hands makes it clear that the plaintiff was not ready and willing to perform his part of contract. Therefore, he is not entitled to the equitable relief of specific performance of agreement of sale. Simply there are laches on the part of the defendant, it is not sufficient to hold that the plaintiff is entitled to the decree as prayed for. Accordingly, the Appellate Court allowed the Appeal by setting aside the decree and Judgment passed by the trial Court. 13. It is an undisputed fact that Ex.A-1 was executed by the defendant in favour of the plaintiff in respect of the suit land. The advance of Rs.1,500/- and the delivery of possession was also not disputed. The Appellate Court held that the plaintiff failed to prove the subsequent payments to the defendant and the plaintiff came forward with a false claim that he paid the balance of sale consideration. But the defendant's evidence disclosed that the plaintiff was in possession of the property. 14. The Appellate Court held that the plaintiff failed to prove the subsequent payments to the defendant and the plaintiff came forward with a false claim that he paid the balance of sale consideration. But the defendant's evidence disclosed that the plaintiff was in possession of the property. 14. In the agreement of sale covered by Ex.X-1, it is mentioned that Ac.6-25 cents was agreed to be sold @ Rs.1300/- per acre for a total consideration of Rs.8,612-50 ps; that the balance of sale consideration shall be paid at the time of completion of the sale before the Registering Authority; that the executant agreed to do all the needful in case of any litigation over the land and in case the purchaser looses possession over the land, the advance amount shall be repaid to the executant with interest from the date of dispossession and if the executant requires any amount to meet the expenses, the purchaser shall not hesitate to give the amount. 15. The agreement of sale was executed on 02-07-1979. There was no litigation in respect of the disputed land. It was agreed between the parties that the balance amount shall be paid at the time of registration of the sale deed. Subsequent to the agreement of sale, the plaintiff alleged that he paid the balance amount of sale consideration in three instalments and the payment was said to be completed by 10-01-1982. No endorsements or receipts were obtained for payment of the amounts. Except the oral evidence of PW-2, there is no other evidence in support of the contention regarding the payment of the balance amount. 16. On 03-03-1987, the defendant issued a legal notice for cancellation of the agreement by contending that the plaintiff failed to pay the balance of sale consideration and that he reminded the plaintiff on several occasions for payment of the balance of sale consideration and completion of the sale transaction, but the plaintiff evaded the same on some pretext or the other, therefore, the agreement of sale is cancelled and the defendant is at liberty to sell the land to some other intending purchasers. The plaintiff, till the receipt of the said notice covered by Ex.A-14, kept quite without taking any steps to get the land registered in his name. The plaintiff, till the receipt of the said notice covered by Ex.A-14, kept quite without taking any steps to get the land registered in his name. The non-obtaining of the receipts for the payments alleged to be made, the non-demanding of the plaintiff for execution of the sale deed and the plaintiff keeping quite for a period of eight years without demanding the defendant to execute the sale deed is a clear indication that the plaintiff wanted to avoid the payment of further sale consideration and to get the land with the advance amount of Rs.1,500/-. The plaintiff is supposed to come to the Court with clean hands, but he did not come with clean hands and he has gone to the extent of speaking falsehood about the payment of the balance amount without obtaining any proof. The silence on the part of the plaintiff is also lending support to the defendant's version that he did not receive the balance of sale consideration, therefore, he issued a notice for cancellation of the agreement of sale. 17. In M.N.MOHAMMAD MIRZA ALIAS MIRZA v. B. SUBHAN SAHEB 2, a Division Bench of this High Court held: "Under the Specific Relief Act the Court exercises equitable jurisdiction. Sec.20 of the Act makes it clear that the jurisdiction to decree specific performance is discretionary and there I no obligation on the part of the court to grant the relief sought merely because it is lawful to do so. But at the same time, the discretion has to be exercised by the court guided by sound judicial principles. It is settled law that false allegations in the plaint dis-entitle the plaintiff for the relief of specific performance." In SRIRIGNEEDI SUBBARAYUDU v. KOPANATHI TATAYYA AND OTHERS 3, the Madras High Court held: "A Plaintiff who is capable of setting up a false case cannot expect a Court of equity to grant him relief." In K. VENKATASUBBAYYA v. K. VENKATESWARLU 4, the A.P. High Court held: "................the plaintiff who seeks equitable remedy of specific performance must come to the Court with clean hands." In the light of the above legal position, I find that the plea of the plaintiff that he paid the balance of sale consideration prior to 1982 is unfounded and he took a false plea to avoid payment of the balance sale consideration. The Appellate Court, after considering the evidence, came to a conclusion that the plaintiff approached the Court with a false case, therefore, he is not entitled for the relief of specific performance. 18. Though time is not the essence of the contract, a willing party is supposed to get the sale deed executed within a reasonable time after payment of the sale consideration. But the silence on the part of the plaintiff for a period of eight years is creating any amount of doubt about the genuineness of the plea taken by him, therefore, he is not entitled for the equitable relief of specific performance, though the defendant delivered possession of the land to him at the time of the agreement of sale. 19. The learned counsel for the plaintiff relied on the following decisions in support of his contention that since the time is not the essence of the contract, the plaintiff is entitled to file the suit as and when he likes: In SMT. INDIRA KAUR AND OTHERS v. SHRI. SHEO LAL KAPOOR 5, the Supreme Court held that in the facts and circumstances of the case, time is not the essence of contract in respect of sale of immovable property. In V. PECHIMUTHU v. GOWRAMMAL 6, the Supreme Court held that in a suit for specific performance, the Court was not concerned with whether any consideration has been paid under the original sale deed executed by the appellant in favour of the respondent, where the court is considering whether or not to grant a relief of specific performance, the rise in price of the land agreed to be conveyed may be a relevant factor in denying the specific performance. In T. MOHAN v. KANNAMAL AND OTHERS 7, the supreme Court held that in a suit for specific performance the question of readiness and willingness to pay the balance of sale consideration is not of much importance in view of the admitted factual position that the vendor had parted with possession of the property in favour of the purchaser even before expiry of the period stipulated in the agreement and found that the finding of the High Court that the plaintiff duly satisfied the requirement of law of readiness and willingness to perform her part of the contract is correct. In MOHAMMED MASTHAN v. ABDUL REHMAN (S.A.No.281 of 1997, dated 04-04-2007 of A.P. High Court), a learned single Judge held that where a party is not ready and willing to perform his part of the contract, such party cannot take shelter under Section 53-A of the Transfer of Property Act, 1882. The Court further observed that while applying the equitable principles it has to be observed whether the institution of the suit is after long lapse of time, whether the plaintiff is not diligent in approaching the Court and whether the defendant has not been diligent in getting regular registered sale deed. 20. But after perusal of the above decisions, I am of the view that they are not applicable to the facts of the present case. In the light of the above discussion, I am of the view that the Appellate Court rightly allowed the Appeal by setting aside the decree and Judgment of the trial Court by refusing to grant the relief of specific performance in favour of the plaintiff. 21. Though the learned counsel for the plaintiff contended that the plaintiff is entitled for protection under Section 53-A of the Act on account of delivery of possession at the time of execution of the sale, the protection in favour of the plaintiff is available only in respect of third parties till the date of registration of the sale deed. But as the plaintiff failed to take any steps to get the sale deed registered in his favour, he is not only disentitled for the decree of specific performance, but also not entitled for protection under Section 53-A of the Act. 22. In the result, the Second Appeal is dismissed by confirming the decree and Judgment of the Appellate Court in A.S.No.12 of 1995. No order as to costs.