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Madhya Pradesh High Court · body

2008 DIGILAW 1009 (MP)

Mohanlal Garg v. Chaudhary Builders Pvt. Ltd.

2008-08-12

S.K.SETH

body2008
ORDER (Oral) Seth, J. --1. This order shall also govern the disposal of Civil Revision No.50/2008 (Mohanlal Garg s/o Prahaladdasji Garg v. M/s. Chaudhary Builders Pvt. Ltd. and two others) as learned counsel appearing for the parties agreed that common facts and law are involved in both the civil revisions and both civil revisions arise out of the common impugned order dated 14.12.2007 passed by Additional District Judge, Indore in Civil Suit No.52-A/2007. 2. By the impugned order, learned Court below has rejected applicants' application u/s 28 of the Specific Relief Act (hereinafter referred to as "the Act" for short), while it allowed the application for extension of time filed by non-applicant No. 1. Hence, these two revisions are against the common impugned order. The facts relating to these two revisions are common and the relevant facts for the disposal of these revisions are as under. 3. It is undisputed that on 15.7.1992, an agreement of sale was executed jointly by late Rajendra Kumar Garg and the above applicants in favour of non-applicant No.1 in respect of the suit property situated in the heart of the city of Indore. As per agreement, they had agreed to sell suit property @ Rs.130/- per sq.ft. to the non-applicant No. 1. Thus, the total sale consideration comes to Rs.40.95 lacs and as against the same, applicants ,had received Rs.22,44,500/- as an advance. Said agreement of sale contained an arbitration clause to resolve mutual disputes by the sole arbitrator Shri Gulabchandji. 4. Dispute arose between the parties and applicants refused to submit to the arbitration; therefore, the non-applicant No.1 filed an application u/s 20 of the Arbitration Act, 1940 in the year 1994 which was subsequently registered as Civil Suit No.12-NI996 in the Court of XVIth Additional District Judge, Indore. The application was allowed and by order dated 27.11.1998 the dispute was referred to sole arbitrator Shri Gulabchandji for arbitration. This order of the Civil Court was challenged in this Court in MA No.173/ 1999 by applicants and without inviting any final decision on merit; the said appeal was withdrawn on 15.1.2004. As a result, the order dated 27.11.1998 passed by XVI Additional District Judge, Indore became final. 5. It seems that after withdrawal of the said appeal, the sole arbitrator issued notices to the parties and invited their respective claims. As a result, the order dated 27.11.1998 passed by XVI Additional District Judge, Indore became final. 5. It seems that after withdrawal of the said appeal, the sole arbitrator issued notices to the parties and invited their respective claims. The applicants in their claim admitted the execution of agreement of sale, but contended that the non-applicant No.1 had failed to pay the balance amount of consideration within the stipulated time, therefore, the agreement of sale had come to an end. In the alternative, the applicants also submitted that apart from the sale consideration, if they were paid damages for the last twelve years, then they were ready and willing to perform their part of the contract. 6. The parties before the sole arbitrator agreed not to adduce any evidence, therefore, the sole arbitrator after discussing the matter with the parties, passed the award dated 24.9.2004, wherein the non-applicant No.1 was directed to pay the balance amount of sale consideration amounting to Rs.18,50,500/- together with damages as mentioned in the award itself. The award was filed in the Court in the presence of the parties by the sole arbitrator. No objections were raised by either of the parties, therefore, on 19.10.2004, the Court below passed order relevant portion whereof is extracted below: ^^mHk; i{k us vokMZ ij dksbZ vkifÙk Hkh izLrqr ugha dh gS vkfcZVªs"ku ,aM dalhys"ku ,DV ds izko/kkuksa ds vuqlkj vc vokMZ dks :y vkWQ dksVZ cukus dh dksbZ vko";drk ugha gS vokMZ dk fu'iknu lh/ks Hkh fd;k tk ldrk gSA** This order went unchallenged and the award passed by the sole arbitrator attained finality. 7. On 16.12.2005, the non-applicant No.1 filed execution case in the lower Court for the execution of sale-deed in its favour pursuant to the award, alleging that despite order passed by the Court on 19.10.2004, the applicants were delaying or avoiding execution of the sale-deed in favour of non-applicant No.1. 8. The applicants submitted an application praying for dismissal of the execution proceedings on the allegation that they had never delayed or avoided execution of the sale-deed. On the contrary, it was contended that right from the beginning, they were ready and willing to perform their part of the contract for which several letters were written to the non-applicant No. 1. The applicants submitted an application praying for dismissal of the execution proceedings on the allegation that they had never delayed or avoided execution of the sale-deed. On the contrary, it was contended that right from the beginning, they were ready and willing to perform their part of the contract for which several letters were written to the non-applicant No. 1. In reply to the said application, the non-applicant No.1 contended that at no point of time, the applicants had issued any letter nor they submitted any amendment to the draft sale-deed sent along with the notice of the execution application. A rejoinder dated 4.9.2006 to the said reply was filed by the applicants, wherein they had taken a stand that the non-applicant No.1 had not sufficient money with him for payment of balance amount of sale consideration to the applicants and the non-applicant No.1 was never ready and willing to perform his part of the contract. 9. On 4.10.2006, the applicants herein filed an application u/s 28 of the Act read with section 46 of the Indian Contract Act for rescission of contract for. sale of immovable property (the suit property). The non-applicant No.1 filed reply to the said application, and also deposited the balance amount of sale consideration including the damages awarded by the sole arbitrator in the month of January, 2007. 10. Looking to the factual controversy, learned trial Court recorded evidence, but before any order could be passed, the non-applicant No.1 filed an application on 18.8.2007 for extension of time u/s 28 of the Act read with section 148 of the Civil Procedure Code. Learned trial Court heard arguments on both the applications and thereafter, by the common impugned order rejected the applicants' application u/s 28 of the Act read with section 46 of the Indian Contract Act and allowed the application of non-applicant No.1 for extension of time, as aforesaid. Hence, these two revisions. 11. It is well settled that revisional powers of this Court under section 115 of the CPC are limited to keep the subordinate Courts within the bounds of their jurisdiction. It is only where there is a jurisdictional error or illegality or material irregularity in the exercise of jurisdiction that interference by way of revision is called for. It is against this backdrop, that the case of applicants has to be examined. 12. It is only where there is a jurisdictional error or illegality or material irregularity in the exercise of jurisdiction that interference by way of revision is called for. It is against this backdrop, that the case of applicants has to be examined. 12. A brief reference may be made to the grounds raised in the memo of revision; that the applicants' application under section 28(1) of the Act was wrongly rejected; lower Court was in error in not rescinding the contract for laches by the respondent No.1; lower Court erred in extending time for performance of the contract; lower Court erred in ignoring material evidence; the evidence was wholly ignored; the discretion was arbitrarily exercised in granting extension of time to respondent No.1. 13. Shri Chaphekar, learned senior counsel appearing for the applicants, contended that specific performance is an equitable relief and notwithstanding law being in favour of vendee, the Court has discretion to refuse to grant of specific relief if it is found to be iniquitous. He submitted that the applicants cannot be pinned down to the agreement of sale executed in the year 1992 specially keeping in view the steep rise in the prices of urban properties in a city like Indore. In support of his contention, Shri Chaphekar has placed strong reliance on the following passage from K.S. Vidyanadam v. Vairavan [(1997)3 SCC, p.1] : "It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. That would amount to saying that the time limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Even where time is not of the essence of the contract, the plaintiffs must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property. While exercising its discretion, the Court should also bear in mind that when the parties prescribe certain time limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)." 14. It was also contended by Shri Chaphekar, that the agreement of sale of immovable property was executed on 15.7.1992 which the non-applicant No.1 is trying to enforce in the year 2007, therefore, it could not be said that steps were taken by the non-applicant No.1 within reasonable time. Even otherwise, the Court had accepted the award in 2004 and the non-applicant No.1 came forward for execution of the award only after fifteen months and this delay is also fatal to the non-applicants. Thus, according to Shri Chaphekar, the Court below while exercising its jurisdiction has acted with an illegality or with material irregularity and as such, the common impugned order is unsustainable in law. 15. On the other hand, Shri A.S. Garg, learned senior counsel for the non-applicant No.1 submitted, and in our opinion not without justification, that the delay was entirely due to the applicants. He has mentioned following facts in support of his contention. He submitted that right from the beginning applicants did not accept the nomination of sole arbitrator which compelled the non-applicant No.1 to file an application in the trial Court. When the said application was allowed, the applicants challenged the order of the trial Court in this Court in MA No. 173/1999. The said miscellaneous appeal was unilaterally withdrawn by the applicants in the year 2004 without obtaining any decision on merit. Thus, according to Shri Garg, the applicants cannot make capital on account of their own conduct so as to deprive the non-applicant No.1 of the fruits of the agreement relating to immovable property. The said miscellaneous appeal was unilaterally withdrawn by the applicants in the year 2004 without obtaining any decision on merit. Thus, according to Shri Garg, the applicants cannot make capital on account of their own conduct so as to deprive the non-applicant No.1 of the fruits of the agreement relating to immovable property. Shri Garg also pointed out that after death of Shri Rajendra Kumar Garg during the pendency of MA No. 173/1999, inter se disputes arose between the applicant No.1 and the widow and daughter of late Rajendra Kumar Garg (non-applicants No.2 and 3 herein) and a civil suit is pending between them filed by applicant No.1. One of the reliefs prayed in that suit is that the applicant No.1 be declared authorised to execute the sale-deed(s) in favour of non-applicant No.1 pursuant to the agreement of sale dated 15.7.1992. It was also contended that in the pleadings the applicant No.1 took a stand that the agreement of sale has come to an end, whereas in the evidence, he has stated that he accepted the agreement valid for a period of one month from the date of the award and thereafter, the agreement ceased to have any force. He further submitted that looking to the shifting stand taken by the applicant No.1 in his pleadings and evidence, it became necessary for the non-applicant No.1 to apply for extension of time by way of abundant caution, though in fact, there was no delay on the part of the non-applicant No.1 to perform his part of the contract, which he was ever ready and willing to perform. Shri Garg also submitted that considering the overall facts and circumstances of the case, it could not be said that the Court below while exercising its discretion and the jurisdiction has acted with illegality or material irregularity so as to warrant interference with the order impugned u/s 115 of the Civil Procedure Code. 16. After having heard learned counsel for the parties at length and going through the material available on record, we find that there is no merit and substance in the revisions. There is no infirmity in the impugned order to bring it within the mischief of section 115 of the CPC. 16. After having heard learned counsel for the parties at length and going through the material available on record, we find that there is no merit and substance in the revisions. There is no infirmity in the impugned order to bring it within the mischief of section 115 of the CPC. The Court below has analysed the material before it before coming to conclusion that there was no unreasonable delay on the part of the non-applicant No.1 to approach the Court for enforcing the award. Reasonable time is a relative concept and it would vary from case to case depending upon the facts. In Veerayee Ammal v. Seeni Ammal [ (2002)1 SCC 134 ], their Lordships of Supreme Court have explained what is a reasonable time in relation to a person seeking specific performance when the time is not essence of the contract. It was held as under: "The word 'reasonable' has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the word 'reasonable'. The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks. The dictionary meaning of 'reasonable time' is to be so much time as is necessary, under the circumstances, to do conveniently what the contract or duty requires should be done in a particular case. In other words, it means as soon as circumstances permit." 17. The contention of Shri Chaphekar that rise in price of immovable property agreed to be conveyed would be a relevant factor to deny the relief of specific performance is based upon [ (1997)3 SCC 1 ]. It may be relevant to point out that the said decision was distinguished in a subsequent decision of Supreme Court in V. Pechimuthu v. Gowramma [ (2001)7 SCC 617 ], wherein it has been held by their Lordships that: "Rise in price of land agreed to be conveyed may be a relevant factor in denying the relief of specific performance when Court is considering whether to grant decree for the first time." [emphasis added] Same principle was reiterated by their Lordships of Supreme Court in a decision reported in Swarnam Ramachandran v. Aravacode Chakungal Jayapalan [ (2004)8 SCC 689 ]. Thus, it is clear that at this stage, the rise in prices, if any, relating to the immovable property agreed to be conveyed to the non-applicant No.1, would not be a relevant or telling factor to deny the relief of specific performance in terms of the arbitration award. We have already pointed hereinabove that the delay is on the part of the applicants and, therefore, no premium can be put on the said delay so as to relieve the applicants from their contractual obligations under the agreement of sale. 18. In view of the foregoing discussion, both the revisions fail and are hereby dismissed with costs. Counsel's fee Rs.1,000/- (One thousand), if certified. 19. Let a copy of this order be retained in the file of Civil Revision No.50/2008 (Mohanlal Garg v. M/s. Chaudhari Builders Pvt. Ltd.). 20. Order accordingly.