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2009 DIGILAW 271 (DEL)

DEVENDER SINGH MEHTA v. RAKESH KUMAR JAIN

2009-03-06

SANJAY KISHAN KAUL, SUDERSHAN KUMAR MISRA

body2009
SANJAY KISHAN KAUL, J. 1. A suit for specific performance and in the alternate for damages was filed by the plaintiffs (respondents herein) in respect of the property bearing No. 35, Babar Road, Bengali Market, New Delhi (hereinafter referred to as, „the suit property?). The suit was decreed for the claim for specific performance vide judgment and decree dated 01.12.1999. Hence, this appeal. 2. The plaintiffs in the suit are four brothers. The plaintiffs entered into an Agreement for Sale dated 08.09.1978 (Ex. P-1) (hereinafter referred to as, „the said Agreement?) with the defendants in respect of the suit property for a total consideration of Rs.4,90,000/-. The said Agreement was executed by the plaintiffs on the one side and defendant No. 1 on the other side (for himself and for and on behalf of defendant No. 2 as his duly constituted attorney). Defendant Nos. 1 & 2 are also brothers. 3. In terms of the said Agreement, the defendants had received a sum of Rs.30,000/- and the balance had to be paid in two installments, i.e., Rs.2,60,000/- to be paid at the time of possession of the property and execution of the Sale Deed and Rs.2,00,000/- to be paid within 2 years from the date of possession together with interest @ 10% p.a. on completion of the transaction in all respects. It was further covenanted and agreed between the parties that actual physical possession would be handed over within 3 months from the date of the said Agreement. It was also mentioned in the said Agreement that the defendants would, before registration, obtain permission in favour of the plaintiffs from the Competent Authority under Urban Land (Ceiling & Regulation) Act, 1976 (for short, „the ULCR Act?) apart from obtaining permission from L&DO to sell the suit property as also the income-tax clearance certificate. It is the case of the plaintiff, as averred in the plaint, that these obligations were not fulfilled by the defendants as envisaged in the said Agreement and the excuse given by them was the ill-health of the sister of the defendants. The plaintiffs after waiting for sometime wrote the letter dated 05.04.1979 (Ex. PW-2/1) to the defendants thereby requesting them to inform when possession shall be handed over as also to complete the transaction. The letter was sent to two addresses – one being at 3-C/31, Rohtak Road and the second at 35 Babar Road. The plaintiffs after waiting for sometime wrote the letter dated 05.04.1979 (Ex. PW-2/1) to the defendants thereby requesting them to inform when possession shall be handed over as also to complete the transaction. The letter was sent to two addresses – one being at 3-C/31, Rohtak Road and the second at 35 Babar Road. The letter further stated that the plaintiffs were ready and willing to fulfill their part of the contract subject to handing over of physical possession of the building complete in all respects as per the said Agreement. This letter was received back with endorsement that the defendants were out of India / out of station. The plaintiffs again wrote a letter dated 02.05.1979 (Ex. PW-2/2), which was also unserved but this time the postal endorsement in respect of Rohtak Road address was “avoiding to take delivery” and in respect of the address of 35, Babar Road was “that in spite of going several times, addressee has not met and the kothi is lying vacant”. 4. It is further stated that on learning of the defendant?s return, the plaintiffs approached him to complete the transaction. A notice by telegram dated 21.12.1979 (Ex. PW-2/3) was sent as also a registered notice dated 23.12.1979 (Ex. PW-2/4) was sent. Both these notice?s remained undelivered. 5. The plaintiffs thereafter received a letter dated 08.01.1980 (Ex. P-3) from defendant No. 1 stating that it was not possible to register the sale as the required permissions could not be obtained. The letter further stated that the money paid was being refunded, i.e., Rs. 30,000/-. The plaintiffs sent the letter dated 21.1.1980 (Ex. PW-2/5) to the effect that they did not accept that sale permission could not be obtained or that the transaction could not be completed and further stated that they were not encashing the draft and the same could be taken back. The said letter was stated to have been sent under postal certificate (UPC). It is averred in the plaint that since the letter was not returned, it must have been delivered. The plaintiffs further submitted that reminders dated 15.2.1980 (Ex. PW-2/6) and 12.5.1980 (Ex. PW-2/7) were sent under postal certificate and no reply to the same was received. Finally, a legal notice dated 05.07.1980 (Ex. PW-2/9) was sent by the plaintiffs to the defendants. This letter was returned back with the endorsement “not available”. 6. The plaintiffs further submitted that reminders dated 15.2.1980 (Ex. PW-2/6) and 12.5.1980 (Ex. PW-2/7) were sent under postal certificate and no reply to the same was received. Finally, a legal notice dated 05.07.1980 (Ex. PW-2/9) was sent by the plaintiffs to the defendants. This letter was returned back with the endorsement “not available”. 6. In the Written Statement, the following preliminary objections were raised : a. that the said Agreement is “voidable, not executable and inoperative” on the ground that the Plaintiffs were debarred by Section 5 of the Foreign Exchange Regulation Act, 1973 from making payment to the defendants since they were British Nationals. b. that since the plaintiffs owned another immovable property, they could not and did not sign and supply the necessary application and affidavits for the L&DO permission as well as the clearance under the Urban Land (Ceiling & Regulation) Act, 1976. c. that the Agreement stood exhausted, no longer operative and in force and binding upon the parties for the reason that Rs.30,000/- was returned. d. that the plaintiffs were not financially in a position to pay the sale consideration. e. that the relief claimed by the plaintiff, i.e., decree directing the defendants to execute the sale deed in favour of the plaintiffs? nominee is wrong, unsustainable, beyond the terms and conditions of the Agreement dated 08.09.1978. f. that the claim for damages of Rs.4,50,000/- was wrong, voidable and misconceived. g. that only Rs.10,000/- at most, could be claimed as damages. h. that the agreement between the plaintiffs and defendants is invalid and cannot be acted upon since the same is hit by Section 47 read with Section 31 of Foreign Exchange Regulation Act, 1973. i. that it is otherwise not equitable to grant specific performance. j. that the specific performance of the Agreement to Sell could not be granted having regard to the fact that the defendant had been restrained by the High Court in WP(C) No. 2659/1984 titled as “Devinder Singh Mehta Vs. L&DO” from alienating, encumbering or disposing of the property in question in any manner. 7. It was also pleaded by the defendants that the defendants could not apply for the requisite clearance(s) / permission(s) due to the failure of the plaintiffs and that the letters/notices were never received. 8. The learned Single Judge on the basis of the pleadings framed the following issues :- 1. Whether defendant Nos. 7. It was also pleaded by the defendants that the defendants could not apply for the requisite clearance(s) / permission(s) due to the failure of the plaintiffs and that the letters/notices were never received. 8. The learned Single Judge on the basis of the pleadings framed the following issues :- 1. Whether defendant Nos. 1 and 2 are British National and are debarred from making any payment and/or receiving any payment in consideration of the sale of the suit property and the agreement is voidable/ inoperative for that reason? 1A. Whether the agreement dated 8th September, 1978 is invalid and hit by Sections 31 and 47 of the Foreign Exchange Regulation Act, 1973? 2. Whether the parties had agreed to cancel the sale agreement dated September 8, 1978 as alleged in para 8 (on merits) of the written statement? 2A. Whether it is not equitable to grant specific performance of the Agreement to Sell dated 8th September, 1978? 3. What is the effect of defendants returning Rs. 30,000/- by means of bank draft to the plaintiffs? 3A. Whether specific performance of the agreement cannot be granted for the pleas raised in para 11 of the preliminary objections? 4. Whether the plaintiffs were called upon to sign the necessary application and affidavits for obtaining permission for sale from the Government Authorities concerned and they failed to do so? If so, its effect? 5. Whether the plaintiffs were ready and willing to perform their part of the contract? 6. Whether the plaintiffs are not entitled to specific performance of the contract even if breach on the part of the defendant is proved? 7. To what amount, if any, the plaintiffs are entitled to damages? 8. Reliefs. 9. The plaintiffs in support of their case examined plaintiff No. 2 as PW-2. Seven other witnesses were also examined by the plaintiffs, namely, (i) Mr. Harish Chander Bajaj, Clerk, Punjab National Bank as PW-1; (ii) Mr. Hari Singh, Jr. Engineer (Meters), NDMC as PW-3: and (iii) Mr. Kadag Singh, Record Keeper, NDMC as PW-4. The three remaining witnesses were Mr. Mehar Chand as PW-5; Mr. Satinder Jain as PW-6 and Mr. Padam Chand Jain as PW-7. These three witnesses are relatives of the plaintiffs. The last witness examined by the plaintiffs was Mr. Ghansham Vashist, Advocate as PW-8. PW-8 was appointed as a Local Commissioner. Kadag Singh, Record Keeper, NDMC as PW-4. The three remaining witnesses were Mr. Mehar Chand as PW-5; Mr. Satinder Jain as PW-6 and Mr. Padam Chand Jain as PW-7. These three witnesses are relatives of the plaintiffs. The last witness examined by the plaintiffs was Mr. Ghansham Vashist, Advocate as PW-8. PW-8 was appointed as a Local Commissioner. The defendants in support of their case only examined two witnesses, namely, Shri Bir Sen Singh, UDC, L&DO as DW-1 and Mr. Lok Nath Grover, power of attorney of the defendants as DW-2. 10. The learned Single Judge after considering the pleadings and perusing the evidence led by the parties has given categorical findings and the consequent decree of specific performance. The learned Single Judge has dealt with Issue Nos. 1 & 1A together. The learned Single Judge held that the defendants have failed to prove that they were British Nationals. The learned Single Judge has taken note of the fact that the address given of defendant No. 1 in the said Agreement was of Rohtak Road, Delhi and moreover, photocopy of the passport of the defendants had not been filed. It has been further held that even if the defendants were British Nationals, there would not have been an infraction of Section 31 nor Section 47 of the Foreign Exchange Regulation Act, 1973. The fact that the defendants admittedly maintained bank accounts in Delhi and had encashed the sum of Rs. 30,000/- in New Delhi was taken note of and, thus, it was held that there was no impediment in the defendants receiving sale consideration in India. Issue Nos. 1 & 1A were, thus, held against the defendants. 11. In so far as Issue No. 2, the learned Single Judge has taken note of the fact that the onus of proving this issue was upon the defendant and he failed to produce any evidence to prove his assertion. Accordingly, Issue No. 2 has also been held against the defendants by the learned Single Judge. 12. Issue No. 2A has also been held against the defendant by the learned Single Judge while observing that the plaintiffs are not guilty of laches and hence, no case has been made out that it is not equitable to grant specific performance. Accordingly, Issue No. 2 has also been held against the defendants by the learned Single Judge. 12. Issue No. 2A has also been held against the defendant by the learned Single Judge while observing that the plaintiffs are not guilty of laches and hence, no case has been made out that it is not equitable to grant specific performance. The learned Single Judge has noted that it was the defendants who had sought adjournments from time to time and had delayed the final adjudication of the suit by amending their pleadings twice. It was also noted that defendant No. 1 had died in the United Kingdom on 24.05.1991 leaving behind his widow Smt. Surjit Kaur Mehta and two sons, namely, S/Shri Mehrban Singh and Harsharan Singh. The legal heirs had filed affidavits to this effect as well as vakalatnamas in favour of Mr. Vivekanand, but since these documents had not been authenticated by the Indian High Commission, the same were consequently inadmissible. None of the heirs had entered the witness box to affirm the averments in the Written Statement. The counsel for the defendants had been engaged by Shri Lok Nath Grover, Power of Attorney (Ex. DW-2/1) holder of the Defendants. It has been taken note of by the learned Single Judge that the said Power of Attorney did not empower Shri Lok Nath Grover to appoint an Advocate on behalf of the defendants nor authorized him to give evidence on their behalf. 13. As regards Issue No. 3, the learned Single Judge has returned a categorical finding that the defendants had attempted to unilaterally resile from their obligations under the contract by returning the part payment of Rs.30,000/-. It has been held that by returning Rs.30,000/- by way of bank draft to the plaintiffs, the defendants could not terminate the said Agreement dated 08.09.1978. The learned Single Judge has taken note of the fact that the plaintiffs had tried to contact the defendants repeatedly, but to no avail as the defendants were not available in India at least during the period from March, 1980 to December, 1980. 14. With respect to Issue No. 3A, the learned Single Judge has observed that the issue has arisen on account of the second amendment sought to be carried out in the written statement by including preliminary objection No. 11. 14. With respect to Issue No. 3A, the learned Single Judge has observed that the issue has arisen on account of the second amendment sought to be carried out in the written statement by including preliminary objection No. 11. The learned Single Judge has noted that the Written Statement on record does not conform to the requirements of Rules 14 and 15 of Order VI of the Code of Civil Procedure, 1908 (hereinafter referred to as, „the Code?) as it has not been signed by the defendants? Advocate and the verification does not state the place and the date of signing. The learned Single Judge has even considered this plea on merits and rejected the same. The defendants did not lead any evidence to prove this issue and it was consequently decided against the defendants. 15. The learned Single Judge has decided Issue No. 4 against the defendants and held that the plaintiffs were not called upon by the defendants to sign any application or affidavit for obtaining necessary permission for sale from the concerned authorities. The learned Single Judge has also taken note of the fact that a controversy arose in Crl. M. No. 3/86 on the question of cancellation, under the initials of defendant No. 1, of the words “their nominees” in Ex. P-1. Ex. P-1/B as also the certified copy (photocopy) did not contain this cutting. Ex. PW-2/10 has been taken note of, which is an Agreement between the plaintiffs nominating plaintiff No. 1 to be owner of the suit property. The learned Single Judge has also concluded that the scoring out of the words “their nominees” under the signature of Defendant No. 1 in Ex. P-1 was carried out in a surreptitious and illegal manner to subvert the understanding between the parties whereby the vendees were authorized to appoint their nominees. 16. The learned Single Judge has dealt with Issue Nos. 5 & 6 together. Issue No. 5 has been held in favour of the plaintiffs and Issue No. 6 has been decided against the defendants. The learned Single Judge has appreciated the evidence and dealt with the statutory provisions as well as the case-law on the subject to come to the aforementioned findings. The learned Single Judge observed that in a suit for specific performance, each case has to be decided on its own facts. The learned Single Judge has appreciated the evidence and dealt with the statutory provisions as well as the case-law on the subject to come to the aforementioned findings. The learned Single Judge observed that in a suit for specific performance, each case has to be decided on its own facts. It has also been observed that, “It is often argued, especially since damages are invariably claimed in the alternative in suits for specific performance of an agreement, that the discretionary relief of specific performance ought not to be granted and the alternative relief of damages should instead be considered. This is clearly a misnomer and is contrary to various decisions of the Apex Court including the case of Prakash Chandra v. Angadlal & Ors., AIR 1979 SC 1241 … ”. It has been observed by the learned Single Judge that the plaintiffs possessed the capacity to pay the sale consideration. The plaintiffs have produced evidence in the said regard. The learned Single Judge has also noted that as per the said Agreement, the plaintiffs were granted the liberty to pay the sale consideration even after execution of the sale deed. 17. So far as Issue No. 7 is concerned, the learned Single has not given a finding in respect thereof as the question of damages would only arise if the decree of specific performance was not being granted. 18. In respect of Issue No. 8, the learned Single Judge has granted the relief of specific performance of the said Agreement in favour of the plaintiffs and against the defendants. 19. There is another aspect to the matter as contempt of court proceedings were initiated against Mr. Lok Nath Grover during the pendency of this appeal. The Order dated 25.09.2001 records the fact that Mr. Lok Nath Grover had written a letter to Devinder Gupta, J. It was recorded that an attempt had been made to influence the course of judicial proceedings. It was also recorded that Mr. Lok Nath Grover had been proceeded against for having committed contempt of court in Criminal Contempt Petition No. 25/98 titled „Sports Authority of India vs. Lok Nath Grover?. Pursuant to the aforesaid Order dated 25.09.2001, Cont. Cas. (Crl.) No. 16/2001 was registered, which has been heard along with the present appeal. The suit as well as the appeal has been prosecuted by Mr. Pursuant to the aforesaid Order dated 25.09.2001, Cont. Cas. (Crl.) No. 16/2001 was registered, which has been heard along with the present appeal. The suit as well as the appeal has been prosecuted by Mr. Lok Nath Grover being the holder of power of attorney of the defendants. 20. The learned counsel of the appellants has sought to assail the findings of the learned Single Judge on the following grounds :- Appellants are Foreign Nationals 21. Learned counsel for the appellants pleaded that the appellants herein are British Nationals, and though their British passports were not formally proved, a copy of the same has now been filed and the same being a public document can be taken into consideration. Learned counsel also sought to rely upon the cross-examination of PW-2 where the said witness only expressed an unawareness of the nationality of the appellants but did not dispute the same. Learned counsel also submitted that the reliance placed on Ajit Prasad Jain v. N.K. Widhani & Ors., AIR 1990 Del 42 by the learned Single Judge is misplaced, and hence the suit ought to have been dismissed at the initial stage itself. Effect of undertaking given to Court in WP (C) No.2659/1984 22. In regard to Issue No. 3A, it is submitted by learned counsel for the appellants that the respondents never disputed the factual position except for saying that it was in the form of an undertaking given in the year 1987. Learned counsel for the appellants further submitted that no further evidence was required to be given and, thus, the issue ought to have been decided in favour of the appellants. Respondents were not ready and willing to perform their obligations under the said Agreement 23. Learned counsel for the appellants further submitted that the respondents were not ready and willing to discharge their obligations, which as per the appellants also included their facilitating the obtaining of requisite permissions from the government authorities. In this regard, reliance is placed upon Clause 2(a) of the said Agreement which stipulated a payment of Rs.2,60,000/- by the vendee, i.e., the respondents herein to the vendor, i.e., the appellants herein at the time of possession of the property and execution of the sale deed. In this regard, reliance is placed upon Clause 2(a) of the said Agreement which stipulated a payment of Rs.2,60,000/- by the vendee, i.e., the respondents herein to the vendor, i.e., the appellants herein at the time of possession of the property and execution of the sale deed. Learned counsel further submitted that since as per Clause 4 of the said Agreement, actual physical possession was also to be given in three (3) months, therefore, it would follow that the payment of Rs.2,60,000/- also had to be made within the same period of time. It was also urged by learned counsel for the appellants that the permissions in favour of the vendee (respondents herein) or their nominee(s) were to be taken by the appellants before execution of the sale deed and upon failure of the vendee (respondents herein) to get the requisite permission, which was the condition precedent for execution of the sale deed, the bargain was to be treated as cancelled. 24. Learned counsel for the appellants further submitted that the respondents could not furnish the requisite certificates / affidavits as plaintiff Nos. 2 and 3 along with their mother in August, 1979 had bought a house bearing No. 41, Bengali Market, New Delhi and also assigned their rights in favour of plaintiff No. 1 by virtue of an internal arrangement / agreement. It was submitted that the said Agreement was correctly cancelled on 08.01.1980. Learned counsel for the appellants also placed reliance upon Sections 51 to 53 of the Indian Contract Act, 1872 (for short, „the Contract Act?) and Ex. PW-2/5, PW-2/6, PW-2/7 & PW-2/9 wherein the respondents had only demanded possession of the property without offering any money to contend that if the promisee is not ready and willing to perform his reciprocal promise, the promisor need not perform his promises. It was further submitted that once a disability had been incurred by plaintiff Nos. 2 and 3 on account of having bought property No. 41, Bengali Market as a result of which affidavits were not given, therefore, their unilateral assignment in favour of plaintiff No. 1 had no meaning as affidavits had to be filed by all the plaintiffs. Learned counsel for the appellants has relied upon the judgment of Full Bench of this Court in Daulat Ram v. Lt. Learned counsel for the appellants has relied upon the judgment of Full Bench of this Court in Daulat Ram v. Lt. Governor, AIR 1982 Del 470 to put forth the proposition that a nominee cannot acquire a status better than the principal. 25. Learned counsel for the appellants also sought to urge that the respondents were not in a financial capacity to pay the sale consideration as they had acquired property bearing No. 41, Bengali Market. Learned counsel further sought to disregard the evidence of the relations of the plaintiffs as it was stated to be too remote and full of contradictions. 26. Learned counsel for the appellants relied upon the judgment of the Apex Court in N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao and Ors., (1995) 5 SCC 115 , which was followed in the case of Umabai & Anr. v. Nilkanth Dhondiba Chavan (Dead) by Lrs. & Anr., 2005 IV AD (S.C.) 587 to support the proposition that mere capacity to raise funds is not adequate to meet the parameters set in Section 16 of the Specific Relief Act, 1963. Relief 27. Learned counsel for the appellants further submitted that the relief of specific performance was a discretionary one and the increase in prices of the property would result in inequities between the parties. In this behalf, learned counsel relied upon the judgment of the Apex Court in Kanshi Ram v. Om Prakash Jawal & Ors., JT 1996 (4) S.C. 733 to urge that the alternative relief of damages may be granted when there has been a manifold increase in the price of the property in question. Learned counsel also relied upon the judgment of the Apex Court in K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77 to submit that the specific performance can be declined when the agreement has become incapable of performance. Reliance was also placed upon the judgment of a learned Single Judge of this Court in Ravi Sood and Anr. v. Vir Bala Sharma, 71(1998) DLT 254 to contend that if there was a denial of requisite permission by the competent authorities, specific performance could not be granted. 28. Lastly, learned counsel for the appellants submitted that since requisite permissions had not been taken, decree of specific performance would be contrary to public policy. 29. v. Vir Bala Sharma, 71(1998) DLT 254 to contend that if there was a denial of requisite permission by the competent authorities, specific performance could not be granted. 28. Lastly, learned counsel for the appellants submitted that since requisite permissions had not been taken, decree of specific performance would be contrary to public policy. 29. Learned counsel for the respondents, at the outset itself, brought to our notice that the respondents had filed an application under Section 340 of the Criminal Procedure Code, 1973 against the appellants for trying to erase the words “or nominees” from the said Agreement. A reference is also made to the Order dated 20.08.1986 where the learned Single Judge has directed a reply be filed to the application within one month. 30. In support of his case learned counsel for the respondents submitted that the payment clause in the said Agreement as well as page 49 of the impugned judgment clearly mention that the covenant in the agreement evidences the defendants? complete faith in the financial reliability and creditworthiness of the plaintiffs. It was further submitted by the learned counsel that the appellants have admitted that steps were not taken and the work to be done as per the said Agreement was not complete. Reliance is also placed upon page 8 of the impugned judgment to contend that no permission was obtained from any authority. 31. In support of his case, learned counsel for the respondents also argued that the fact that two of the plaintiffs had entered into an Agreement to purchase property No. 41, Bengali Market, does not frustrate the performance of the contract, and that the nominee clause inserted in the said Agreement was for this specific purpose and no disability was caused with respect to the said Agreement. It was also submitted that the occasion for giving affidavits did not arise at all. Learned counsel also relies upon the Agreement dated 01.06.1979 (Ex. PW-2/10) which mentions the said Agreement and further nominates Mr. Rakesh Kumar Jain (plaintiff No. 1) as their nominee. 32. Learned counsel for the respondents in respect of the legal notice dated 23.12.1979 (Ex. PW-2/4) submitted that the same was dispatched on 09.01.1980 before receipt of the letter dated 08.01.1980 (Ex. P-3). The same is stated to have been received on 13.01.1980. Rakesh Kumar Jain (plaintiff No. 1) as their nominee. 32. Learned counsel for the respondents in respect of the legal notice dated 23.12.1979 (Ex. PW-2/4) submitted that the same was dispatched on 09.01.1980 before receipt of the letter dated 08.01.1980 (Ex. P-3). The same is stated to have been received on 13.01.1980. It was further submitted that as per the said Agreement, all the permissions and clearances had to be obtained by the appellants only. 33. Learned counsel for the respondents also submitted that there was no talk of cancellation of the said Agreement and the same is proved by sending of the legal notice dated 23.12.1979 (Ex. PW-2/4). It was submitted that the learned Single Judge while giving findings on Issue No. 3 has mentioned regarding the tenor of the letter dated 08.01.1980 (Ex. P-3) and has also noticed that the demand draft of Rs.30,000/- has not been encashed, which fact clearly shows that the respondents did not agree to cancellation of the said Agreement and that the act of cancellation was a unilateral one. 34. Learned counsel for the respondents further submitted that the learned Single Judge has gone into great details as to the sufficiency of funds with the respondents to buy the property and the same has to be read along with clause (2) of the said Agreement. 35. Learned counsel for the respondents also submitted that the present case is a fit one for grant of discretionary relief of specific performance and that the drastic change in market prices has no relevance as the matter is at an appellate stage. It was also submitted that the appellants were allowed to rent the premises and that the power of attorney holder, Mr. Lok Nath Grover came into possession of the said property in 1981 as a tenant. 36. In our considered view, the first plea of the learned counsel for the appellants that the appellants herein are foreign nationals has to be negated, as has been rightly done by the learned Single Judge. No evidence has been led in that behalf nor has any leave been sought either from this Court or from the trial court to produce additional evidence in this regard. Once the same has not been done, no new documents can be taken on record at this stage. No evidence has been led in that behalf nor has any leave been sought either from this Court or from the trial court to produce additional evidence in this regard. Once the same has not been done, no new documents can be taken on record at this stage. The onus to prove the fact that the appellants were foreign nationals was on the appellants and they failed to do so. The learned Single Judge has correctly appreciated the observations made in Ajit Prasad Jain?s case (supra). The relevant portion has been quoted in para 7 of the impugned judgment, which reads as under :- “7. … … … … … … … … In support of the objection under this issue defendants have relied upon Section 31 of the Foreign Exchange Regulation Act, 1973. The contention of defendants is that defendant No. 2 is not a citizen of India and as such he could not transfer or dispose of by sale, settlement or otherwise any immoveable property situate in India without prior permission of the Reserve Bank of India and as such the agreement to sell is void. In support of the contention that defendant No. 2 has acquired citizenship of German Democratic Republic reliance is placed on citizenship certificate dated 17.7.1970 (Ex.D6/1). It does appear from the said certificate that defendant No.2 had acquired citizenship of German Democratic Republic but in my view that has no effect on the validity of the agreement in question. Section 31 of the Foreign Exchange Regulation Act on which reliance has been placed by the defendants only places a restriction on a foreign citizen on transfer or sale, mortgage, lease, gift, settlement or otherwise of any immoveable property situate in India except with the previous general or special permission of the Reserve Bank of India. The said provisions do not place any restriction on entering into agreement like Ex.PW2/1. The said provisions also do not place an absolute bar to the transfer or sale of any property and as such it cannot be said that the agreement itself will become void. It is well settled that a contract for sale by itself does not create any interest in or charge on such property (See: Section 54 of the Transfer of Property Act). It is well settled that a contract for sale by itself does not create any interest in or charge on such property (See: Section 54 of the Transfer of Property Act). Thus it cannot be held that the agreement is void on the objection raised in preliminary objection No.4 based on Section 31 of the Foreign Exchange Regulation Act. The said provisions do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will arise if at all, at the stage of execution of the sale deed.” 37. The second plea of learned counsel for the appellants is only stated to be rejected. In our considered view, the learned Single Judge has correctly appreciated the fact that the said Agreement was executed on 08.09.1978, whereas the undertaking was given in a subsequently filed writ petition, concerning issues not connected with the plaintiffs. In our considered view, the said undertaking given subsequently cannot defeat the rights of the plaintiffs. 38. The third plea raised by learned counsel for the appellants was that the plaintiffs were not ready and willing to perform their obligations under the contract, i.e., the said Agreement. The submission of learned counsel for the appellants with respect to the payment which, as per Clause 2(a) had to be given within 3 months, i.e., the time stipulated under Clause 4 of the said Agreement for handing over of physical possession, is without any merit. Clause 2(a) of the said Agreement reads as under :- “2. … … … … … … … … (a) Rs.2,60,000/- (Rupees Two Lacs Sixty thousand only) at the time of possession of the property and execution of the Sale Deed”. Thus, the clause itself stipulates that the payment was to be made once the sale deed is executed and possession handed over. The occasion for the same did not arise as the appellants herein did not execute the requisite documents and hand over possession. 39. Furthermore, the reliance placed upon Sections 51 to 53 of the Contract Act and Ex. PW-2/5, PW-2/6 PW- 2/7 & PW-2/9 is wholly misplaced. The respondents had sent legal notice dated 23.12.1979 (Ex. PW-2/4) stating that they were ready and willing to perform their obligations under the contract. The occasion to pay the consideration would only arise once the possession is handed over and sale deed executed. PW-2/5, PW-2/6 PW- 2/7 & PW-2/9 is wholly misplaced. The respondents had sent legal notice dated 23.12.1979 (Ex. PW-2/4) stating that they were ready and willing to perform their obligations under the contract. The occasion to pay the consideration would only arise once the possession is handed over and sale deed executed. The respondents were always ready to perform their obligations under the said Agreement and, thus, Sections 51 to 53 of the Contract Act would not apply. The essential pre-requisite, which needs to be satisfied under Section 51, is that the promisee is not willing to fulfill his obligations under the contract, which fact is wholly absent in the present case. 40. It was also urged on behalf of the appellants that once the requisite permissions could not be obtained within the stipulated and/or reasonable time, the bargain was to be treated as cancelled. In our considered view, this plea is without any merit as in terms of Clause 7 of the said Agreement, the bargain could only be cancelled if the respondents failed to get the sale deed registered. The occasion for the same never arose as the requisite permissions were not obtained. It may also be noted in terms of Clause 5 of the said Agreement, an obligation had also been imposed upon the appellants to obtain the requisite permissions from the L&DO and Income-tax clearance certificate. Once the same had been obtained, the appellants were to inform the respondents as per clause 6 of the said Agreement and only thereafter, were the respondents supposed to get the sale deed registered. 41. Learned counsel for the appellants also submitted that since the respondents had bought another property, they could not furnish the requisite certificates / affidavits. Reliance was placed upon the judgment in Daulat Ram?s case (supra) to support the contention that a nominee cannot acquire a better status than the principal. The facts of that case are very different from the facts of the present one. In Daulat Ram?s case (supra), it has held that unless the petitioner could first establish or lay a claim / right to be allotted a plot, he could not exercise any right with regard to non-existing title. In the present case, the said Agreement itself provided that the property could be transferred in the name of “nominees” and accordingly, the plaintiffs entered into an agreement / arrangement dated 01.06.1979 (Ex. In the present case, the said Agreement itself provided that the property could be transferred in the name of “nominees” and accordingly, the plaintiffs entered into an agreement / arrangement dated 01.06.1979 (Ex. PW2/10) thereby nominating Mr. Rakesh Kumar Jain (plaintiff No. 1). In our considered view, there was no bar on transfer of the said property in favour of plaintiff No. 1 as a valid arrangement / agreement had been entered into between the plaintiffs. Plaintiff No. 1 could have given the requisite affidavits / undertakings if he had been called upon to do so. At the time when the plaintiffs entered into the said Agreement, they did not face any disability and once the nomination was made in favour of plaintiff No. 1, a subsequent transaction of buying a house by some of the plaintiffs and their mother cannot defeat their rights. It has been emphasized by learned counsel for the respondents that the words “nominees” had been inserted for such a contingency only. We are in agreement with the said submission. 42. Learned counsel for the appellants also urged that the respondents were not in a financial capacity to pay the sale consideration. Reliance was also placed upon N.P. Thirugnanam (Dead) by LRs.?s case (supra), which was followed in the case of Umabai & Anr.?s case (supra) to support the proposition that mere capacity to raise funds is not adequate to meet the parameters set in Section 16 of the Specific Relief Act. In our considered view, the learned Single Judge has correctly appreciated the evidence on record as well as the depositions on behalf of the plaintiffs to conclude that the plaintiffs were possessed of means to pay the balance sale consideration either on their own or through financial assistance of relatives such as Mr. Mehar Chand (PW-5) and Mr. Satinder Jain (PW-6). The learned Single Judge has referred to the judgment in N.P. Thirugnanam (Dead) by LRs.?s case (supra) to illustrate the significance to be attached to the facts in cases of specific performance. In the said case, it was observed that the continuous readiness and willingness on the part of the plaintiff is a condition precedent for grant of specific performance. The relevant observations in para 4 and 5 are as under :- “4. It is next contended that the plaintiff was always ready and willing to perform his part of the contract. In the said case, it was observed that the continuous readiness and willingness on the part of the plaintiff is a condition precedent for grant of specific performance. The relevant observations in para 4 and 5 are as under :- “4. It is next contended that the plaintiff was always ready and willing to perform his part of the contract. To buttress it, counsel placed strong reliance on the evidence of PW 2, who had testified that he was willing and prepared to lend a sum of Rs.2,00,000/- to the plaintiff on the foot of a promissory note. It is not necessary for the plaintiff that he should keep ready the money on hand. What is relevant and material is that he should have the necessary capacity to raise the funds and was ready and willing to perform his part of the contract which has been demonstrated by the evidence of PW-2. We do not accede to the contention. The trial Judge had pointed out that on an application filed by the defendants, a direction was given to the plaintiff by order dated 11-2-1991 to deposit the amount of Rs.2,00,000/- or furnish bank guarantee giving time up to 11-3-1991. He neither deposited the amount nor has given bank guarantee. It was also found that the plaintiff was dabbling in real estate business. He had a house on hire purchase agreement with the T.N. Housing Board. He paid only Rs.7,750/- up to 1980. A sum of Rs. 29,665/- was further payable. He had an agreement wide one Annamma Philip for Rs.49,500/- to sell the said house after purchase from the Board. Obviously, he had obtained advance and sold the house to his vendee on 7-2-1980 after getting a sale deed executed in his favour. He entered into an agreement (Ex. P-1) on 9-4-1979 to purchase the suit house for Rs.2,30,000/-. He was not able to pay the loans and he adjusted Rs.20,000/-, which was paid towards arrears of rent and paid only Rs.1,975/- under Ex. P-30 for the sale consideration of his house. He was unable to pay the rent to the respondents and had deposited huge amount towards arrears of rent pursuant to the orders of the courts. He was not able to pay the loans and he adjusted Rs.20,000/-, which was paid towards arrears of rent and paid only Rs.1,975/- under Ex. P-30 for the sale consideration of his house. He was unable to pay the rent to the respondents and had deposited huge amount towards arrears of rent pursuant to the orders of the courts. PW-2, though professed to be willing to advance a sum of Rs.2,00,000/- did not have cash and admitted that he had to obtain Rs.2,00,000/- by hypothecating his property and at the same time was willing to lend on a pro-note to the plaintiff a sum of Rs.2,00,000/-, which was hard to believe. These circumstances were taken into consideration by the trial Judge as well as the Division Bench in concluding that the plaintiff was not ready and willing to perform his part of the contract. 5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act, 1963 (for short “the Act”). Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.” 43. In our considered opinion, the aforesaid judgment does not really apply to the facts of the present case. The plaintiffs, i.e., respondents herein have averred and also produced evidence to prove that they were always ready and willing to perform their obligations under the contract. Evidence has also been produced to prove that the plaintiffs possessed sufficient means. It is not a case where the respondents / plaintiffs had been asked to tender the sale consideration and they had refused to do the same, but rather a case where the appellants unilaterally resiled from the contract. 44. The last aspect to be considered is the relief of specific performance granted by the learned Single Judge. In our considered view, the reliance placed by learned counsel for the appellants upon the judgment of the Apex Court in Kanshi Ram?s case (supra) does not really benefit the appellants. It has been observed in the said judgment itself that the rise in prices of the property during the pendency of the suit may not be the sole consideration for refusing to decree the suit for specific performance. It may also be noted that Kanshi Ram?s case (supra) was decided on its own facts; the respondent had only claimed Rs.12,000/- as damages; and the appellant was willing to pay Rs.10 lakhs as damages. Reliance was also placed upon the decision of in the case of K. Narendra?s case (supra) to submit that specific performance can be declined when the agreement has become incapable of performance. In the said case, a part of the land was acquired by the State and a part of the plot was excess land under ULCR Act. Reliance was also placed upon the decision of in the case of K. Narendra?s case (supra) to submit that specific performance can be declined when the agreement has become incapable of performance. In the said case, a part of the land was acquired by the State and a part of the plot was excess land under ULCR Act. There can be no dispute regarding this well-settled legal position, but what has to be examined is whether the same will apply to the facts of the present case. No such facts have arisen in the present case, which would make the agreement impossible to perform. Lastly, reliance was placed upon Ravi Sood?s case (supra) to contend that if there was a denial of requisite permission by the competent authority, the relief of specific performance could not be granted. Once again, there can be no qualms with this proposition of law, but the same is inapplicable to the facts of the present case. The question of denial of permission would only arise if permission was sought. The appellants never sought permission from the concerned authorities and hence, neither was any permission granted nor denied. It may also be taken note of that the appellants have been enjoying rents from the suit property for a long period of time. In our considered view, the learned Single Judge has, in the facts and circumstances of the case, rightly granted the relief of specific performance in favour of the respondents. 45. Another aspect which may be noted is that the defendant no.1 never entered the witness box. Defendant no. 1 had entered into the said agreement (for himself and for and on behalf of defendant no. 2 as his duly constituted attorney) with the plaintiffs. It was only the power of attorney holder of the defendants who was a tenant in the suit property, who deposed on behalf of the defendants. Since, the attorney holder was not a party to the said agreement all evidence tendered by him would be in the nature of hearsay evidence and cannot be taken note of. Facts of which the principal has personal knowledge cannot be deposed on by an attorney holder. The observations of the Apex Court in this regard in Janki Vashdeo Bhojwani v. Indusind Bank Ltd., (2005) 2 SCC 217 are as under : “13. Facts of which the principal has personal knowledge cannot be deposed on by an attorney holder. The observations of the Apex Court in this regard in Janki Vashdeo Bhojwani v. Indusind Bank Ltd., (2005) 2 SCC 217 are as under : “13. Order 3 Rules 1 and 2 CPC empower the holder of power of attorney to “act” on behalf of the principal. In our view the word “acts” employed in Order 3 Rules 1 and 2 CPC confines only to in respect of “acts” done by the power-of-attorney holder in exercise of power granted by the instrument. The term “acts” would not include deposing in place and instead of the principal. In other words, if the power-of-attorney holder has rendered some “acts” in pursuance of power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined.” 46. In view of the aforesaid, the appeal is without any merits and dismissed with costs of Rs.50,000/-.