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2010 DIGILAW 1771 (MAD)

Lizamma Urmese v. S. Sankar & Another

2010-04-15

G.M.AKBAR ALI

body2010
Judgment :- A.S.293 of 1997 preferred against the judgment and decree passed in O.S.No.438 of 1992 dated 27/8/1996 on the file of the Principal Subordinate Judge, Dindigul. 2. Transfer Appeal A.S.No.1137 of 2001 filed against the judgment and decree passed in O.S.No.373 of 1992 dated 27/8/1996 on the file of the Principal Sub-Judge, Dindigul. This appeal was pending on the file of the Principal District Judge,Dindigul and was ordered to be transferred to this Court to be heard along with A.S.No.293 of 1997. Both appeals are arising out of the common judgment delivered in O.S.No.373 of 1992 and O.S.No.438 of 1992 dated 27/8/1996. The plaintiff in O.S.No.373 of 1992 who is the second defendant in O.S.No.438 of 1992 is the appellant. The plaintiff in O.S.No.438 of 1992 is the first respondent in A.S.No.293 of 1998 and the second respondent in Transfer A.S.No.1137 of 2001. .3. The brief facts of the case giving rise to both the appeals are as follows:- .The suit property bearing Door No.77 and 78 A measuring 95 cents in Survey No.87 in Kodaikanal originally belong to the respondents herein. The second respondent K.S.Chandrasekaran is the sisters husband of the first respondent who is the contesting party. Therefore, he is referred as first respondent in this common judgment. The appellant entered into a sale agreement with the respondents on 6/1/1997 for the purchase of the property. As per the terms of the agreement, the sale price was fixed at Rs.1,02,000/- and the appellant paid a sum of Rs.60,000/- by way of demand draft as advance. The possession was handed over to the appellant. The time to conclude the contract was fixed as three months with necessary default clauses. However, the time was extended and the appellant was permitted to continue to be in possession and the appellant made several payments on various dates to the second respondent who is the co-owner of the property. The last of such payment was made on 21/5/1983. The appellant approached the vendors for the execution of the sale deed on several occasions and they have not come forward to perform their part of contract. Therefore, originally a suit for specific performance in O.S.No.19 of 1986 was filed before the Subordinate Judge, Periyakulam which is later transferred to Dindigul in O.S.No.373 of 1992. 4. The appellant approached the vendors for the execution of the sale deed on several occasions and they have not come forward to perform their part of contract. Therefore, originally a suit for specific performance in O.S.No.19 of 1986 was filed before the Subordinate Judge, Periyakulam which is later transferred to Dindigul in O.S.No.373 of 1992. 4. The second respondent namely K.S.Chandrasekaran almost conceded to the allegations of the appellant and filed a written statement to that effect. The first respondent resisted the suit on various grounds. It was contended that the time was the essence of contract; the appellant was put on possession and such possession was only as a licensee and on the expiry of the stipulated three months, the contract came to an end and there was no extension of time and first respondent was not a party to the various amount received by the second respondent. It is also contended that the second respondent was colluding with the appellant to knock away the valuable property and therefore, the suit for specific performance is not maintainable. The first respondent filed a partition suit in O.S.No.206 of 1989 on the file of the Subordinate Judge, Periyakulam stating that he and the second respondent are the co-owners of the property and the sale agreement had been rescinded and he is entitled for half share in the property. 5. The said suit was also transferred to the file of the Subordinate Judge, Dindigul and was renumbered as O.S.No.438 of 1992. The appellant resisted the suit. Both the suits were taken up together and evidence was recorded in the partition suit and stood for the consideration of the Subordinate Judge, Dindigul. 6. Onperusal of the oral and documentary evidences the Subordinate Judge found that the first appellant was not a party to the extension of time and has not received the subsequent payments and therefore, the suit for specific performance is not maintainable against him. The learned Judge found that the first respondent is entitled for half share in respect of the suit property and thereby allowed the suit for partition for his half share and also allowed the specific performance of the suit in part, thereby, the appellant can get a sale deed for half share of the property belong to the second respondent. .7. .7. Not satisfied with the finding and reasoning of the Principal Subordinate Judge, Dindigul, the plaintiff in O.S.No.373 of 1992 who is the second defendant in O.S.No.432 of 1992 has preferred these two appeals on various grounds. In these two appeals also the first respondent is the contesting respondent. 8. It is not in dispute that the parties have entered into the sale agreement dated 6/1/1977 which is marked as Ex.B.1. It is also not in dispute that the second respondent gave a consent to extend the time to the appellant for payment of the balance amount beyond the period of three years under Ex.B.20 dated 27/3/1977. It is also not in dispute that the second respondent received the balance of amount on various dates and issued receipts under Ex.B.8 to B.10 and B.12. It is also not in dispute that the appellant was approaching the respondents personally and also by writing various letters requesting them to execute a sale deed. 9. Whether the time extended to perform the contract and the receipt of various amounts by one of the vendor is binding on the co-vendor and whether the time is essence of contract are the points to be decided in these appeals. 10. Mr.R.Nandakumar, learned counsel for the appellant submitted that the first respondent had full knowledge about the extension of time by the co-owner and he was also aware about the payment of balance of sale consideration and there are ample evidence to show that he has received his share of the sale consideration and therefore, he is bound to perform his part of contract. 11. The learned counsel also pointed out that the appellant was in possession in pursuant to the sale agreement and therefore, her possession is protected under Section 53 A of the Transfer of Property Act and the appellant was always ready and willing to perform her part of contract and on the contrary, the first respondent was evading the execution of sale deed and he never objected the payment of balance of sale consideration to the second respondent and therefore, the appellant is entitled for specific performance of the sale agreement for the entire suit property. 12. The learned counsel relied on 1996 1 Law Weekly – 239 (N.P.THIRUGNANAM (D) by L.rs Vs. 12. The learned counsel relied on 1996 1 Law Weekly – 239 (N.P.THIRUGNANAM (D) by L.rs Vs. Dr.R.JAGAN MOHAN RAO & ORS), for the proposition of readiness and willingness and relied on 1995 1 Law Weekly – 716 (K.M.MADHAVAKRISHNAN Vs. S.R.SWAMI AND ANOTHER) for the proposition of increase in sale price is not a ground for refusing specific performance and relied on AIR 1967 Supreme Court – 868 (GOMATHINAYAGAM PILLAI AND OTHERS Vs. PALANISWAMI NADAR) for the proposition that time is not essence of contract if the parties intend it to be so. 13. On the contrary, Mrs.N.Krishnaveni, learned counsel for the first respondent submitted that the first respondent was not a party to the extension of time under Ex.B.20. The learned counsel also pointed out that the payments were made to the second respondent under various receipts which are not binding on the first respondent. The learned counsel also pointed out that time is the essence of contract and as rightly held by the trial Court, on the expiry of the stipulated time and subsequent to the extension of time by the second respondent could not, in no stretch of imagination be deemed to have been effectively made on behalf of the first respondent also. The learned counsel pointed out that the sale agreement has come to an end on the expiry of three months and is not binding on the first respondent. .14. Heard both sides.It is well settled principle that the time is not the essence of contract if the parties intend it to be so. In AIR 1967 Supreme Court – 868, (GOMATHINAYAGAM PILLAI AND OTHERS Vs. PALANISWAMI NADAR), the Supreme Court has held that ."It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable; it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable; it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence." 15. Under Clause 4 of Ex.B.1, the appellant agreed to pay the balance of purchase price within three months from the date of agreement to complete the sale transaction. The agreement was dated 6/1/1977 which would expire on 5/4/1977. However, under Ex.20, on 27/3/1977, the second respondent consented for an extension of time. Whether such consent will bind the first respondent is the main question to be answered. 16. Section 55 of the Contract Act deals with the stipulated time "when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract". Though the time is essence of contract, if the parties expressly or impliedly agree to extend the time, then the time is not the essence of contract. In the absence of any written agreement, the conduct of the parties and the circumstances of the case would decide the intention of the parties. .17. After extending the time under Ex.B.20 dated 27/3/1977, the appellant had made payments under Exs.B.8 to B.10 and under Ex.B.12. The last of the payment was on 21/5/1983. In the absence of any written agreement, the conduct of the parties and the circumstances of the case would decide the intention of the parties. .17. After extending the time under Ex.B.20 dated 27/3/1977, the appellant had made payments under Exs.B.8 to B.10 and under Ex.B.12. The last of the payment was on 21/5/1983. Under Ex.B.2 dated 28/11/1984, the second respondent had written to the first respondent requesting him to give a specific Power of Attorney to register a sale deed in favour of the appellant. The first respondent would admit in his evidence that he has received this letter, but he has not responded to the same. Under Ex.B.21, the husband of the appellant requested the first respondent to execute a Power of Attorney or to execute a sale deed. Ex.B.7 is a letter dated 29/3/1985 written by the second respondent to the first respondent. The first respondent admits in his evidence that he received this letter. Ex.B.3 dated 19/2/1985; B.21 dated 6/12/1984, B.22 dated 3/1/1985, B.23 dated 18/5/1985 and B.24 dated 2/3/1985 are some of the letters written either by the appellant or by the second respondent to the first respondent in respect of execution of sale deed. The first respondent would state that he has not received any letters. However, the appellant has filed various acknowledgments Exs.B.4 to B.6. The first respondent would also admit that the husband of the appellant had contacted him over phone. Ex.B.3 is a letter dated 19/2/1985 written by the first respondent to the husband of the appellant. The first respondent has mentioned about the Power of Attorney and has instructed the appellants husband to contact his father-in-law one Vaitheeswaran. Under Ex.B.18 dated 3/7/1985, the second respondent has written to the appellants husband about his conversation with the said Vaitheeswaran and furnishing certain particulars about sale agreement and payment of money. The first appellant has denied that the time was not extended by him and has denied that he has received any balance of consideration. The first respondent has also taken the defence that after the date of the sale agreement the value of the property in Kodaikanal has raised to fifteen times and therefore, the appellant ought to have performed her part of contract in 1977. 118. The first respondent has also taken the defence that after the date of the sale agreement the value of the property in Kodaikanal has raised to fifteen times and therefore, the appellant ought to have performed her part of contract in 1977. 118. The various letters and the evidence would show that the first respondent was aware of the time extension by the second respondent and the receipt of various payments. Even assuming that he was put on notice, as agreed by him only under Ex.B.2 dated 28/11/1984, the appellant was requesting for a sale deed he has not objected to such extension of time or receipt of balance of consideration by the second respondent. He has even directed the husband of the appellant to contact his father-in-law about the Power of Attorney. Until a suit is filed in O.S.No.19 of 1996, he has not denied that he was not approached for extension of time and he was not paid his share of balance of sale consideration. 119. As stated earlier, conduct of the parties would show that there was an intention for extension of time to perform the contract. The evidence of the appellant, both oral and documentary, it is proved that she was ready and willing to perform her part of the contract. 120. In pursuant to the contract, the first appellant was put on possession after paying a sum of Rs.60,000/- which constitute around 60% of the sale amount. The appellant has also paid the balance consideration on various dates to one of the vendors. The appellant has performed her part of the contract and has shown the readiness and willingness to get the sale deed executed. On the contrary, the first respondent has not rescinded the contract at the earliest point of time and he has not objected to the extension of time by one of the co-owner and also the receipt of various amounts by him. The first respondent cannot claim ignorance of all those facts and take a plea that the agreement holder was not ready and willing to perform her part of the contract and time is the essence of contract. From the evidence it is proved that after 1984, the delay was only due to the first respondent. The first respondent cannot claim ignorance of all those facts and take a plea that the agreement holder was not ready and willing to perform her part of the contract and time is the essence of contract. From the evidence it is proved that after 1984, the delay was only due to the first respondent. Simply because the appellant has paid the balance of consideration over a period of seven years, will not dis-entitle her to get the sale deed in her favour. Under Section 16 of the Specific Relief Act, 1963, the plaintiff has to plead and prove that he/she has always been ready and willing to perform the essential terms of the contract. Under Section 20 of the Specific Relief Act, it is a discretionary relief and the Court has to properly exercise its discretion in any case where the plaintiff has done substantial acts in consequence of a contract capable of specific performance. Merely because the rise in prices over a period of seven years is not a ground for refusing specific performance of a contract as held in 1995 1 Law Weekly – 716 (cited supra). 121. The trial Court is wrong in holding Ex.B.1 has expired on the stipulated time limit and the extension of time by one of the party to the agreement cannot deemed to have been made on behalf of the other party to the agreement. The extension of time and the payment of amount was brought to the knowledge of the first respondent and having chosen to not objecting the same he is estopped from denying the same. When there are two co-owners to the property and had agreed to sell the same and allowed a substantial amount to be paid to one of the co-owner and having not objected to the same at the earliest point of time the actions of one co-owner is binding on the other. 122. Therefore, the trial Court is wrong in holding that the sale agreement under Ex.B.1 is seized to have its legal effect and not binding on the first respondent. The consent and acceptance of the period is implied and therefore, plaintiff is entitled to enforce the contract. 123. In the result, (i). A.S.No.293 of 1997 is allowed and the suit for partition is dismissed. (ii). The consent and acceptance of the period is implied and therefore, plaintiff is entitled to enforce the contract. 123. In the result, (i). A.S.No.293 of 1997 is allowed and the suit for partition is dismissed. (ii). Transfer A.S.No.1137 of 2001 is allowed and the decree for specific performance is granted directing the defendants to execute a sale deed within three months from the date of decree. (iii). No costs.