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2010 DIGILAW 945 (ALL)

Dev Kumar v. Rakesh Kumar

2010-03-19

POONAM SRIVASTAV

body2010
JUDGMENT Hon'ble Mrs. Poonam Srivastav, J. Heard Sri M.K. Gupta, Advocate on behalf of defendant/appellant and Sri O.P. Rai, Advocate, on behalf of plaintiff/respondents. 2. The instant second appeal is directed against judgment and decree dated 20.3.1999 passed by XVIth Additional District Judge, Meerut, in civil appeal no.96 of 1995 Rakesh Kumar and another Vs. Dev Kumar setting aside judgment and decree dated 1.4.1995 passed by trial court in original suit no.267 of 1989 on issue no.3. 3. This defendant's second appeal arises from a suit of specific performance instituted by plaintiff/respondents. 4. Record of the case was summoned at the stage of admission itself. Written submissions have already been preferred by learned counsels for respective parties. As agreed between parties, the instant second appeal is being decided finally at this stage on the following substantial questions of law, which are quoted below: "1.Whether plaintiff/respondents were not ready and willing to perform their part of the contract strictly in accordance with the terms of agreement and consequently the suit was rightly dismissed by the trial court in view of provisions of Section 16(c) of Specific Relief Act? 2. Whether the plaintiffs could legally alter the terms of agreement in depositing the decreetal amount in execution case no. 3 of 1986 and claim a set off for an amount of Rs.23,758 in lieu of balance payment in respect of agreement to sell? 3.Whether the trial court was justified in refusing relief for specific performance in view of provisions of Section 20 of Specific Relief Act and lower appellant court erred in interferring with exercise of discretion in this regard by the trial court? 4. Whether in view of plaintiff/respondents themselves having asked for alternative relief for refund of earneest money with interest, which was granted by the trial court, there was any occasion for the appellate court to interfere with judgment of the trial court?" 5. Original suit no.267 of 1989 was instituted by plaintiff/respondents for specific performance of an agreement to sale, dated 8.1.1986. Specific assertion in the plaint was that out of the sale consideration of Rs.2,77,800/-, advance of Rs.1,40,000/- was paid. According to terms and conditions of agreement, sale deed was to be executed by 31.7.1986. Plaintiffs assert that notice dated 9.7.1986 was given to appellant inviting him to appear before Sub Registrar on 31.7.1986 for execution of sale deed but appellant failed to turn up. According to terms and conditions of agreement, sale deed was to be executed by 31.7.1986. Plaintiffs assert that notice dated 9.7.1986 was given to appellant inviting him to appear before Sub Registrar on 31.7.1986 for execution of sale deed but appellant failed to turn up. Further claim of the plaintiffs is that subsequently they came to know that presence of appellant was manipulated in the office of Sub Registrar on 31.7.1986. Plaintiffs further assert that they came across an advertisement issued by defendant/appellant that property in question is free from all encumbrances. Also at a later date, it came to their knowledge that subject matter of the agreement to sale was attached in execution case no. 3 of 1986 for execution of a money decree against defendant/appellant. The plaintiffs' case is that they deposited Rs.23,758/- in the said execution case on behalf of defendant/appellant in satisfaction of the decree, therefore, the aforesaid amount would be deemed to be a payment made to defendant and it would be added to original amount of earnest money already paid by plaintiffs and only Rs.1,14,042/- is balance sale money. The plaintiffs were always ready to make the balance payment of Rs.1,14,042/- and there was a failure on the part of defendant to execute sale deed. Suit for specific performance was instituted on 6.1.1989. Relief claimed by plaintiffs was for specific performance and execution of sale deed alternatively relief for refund of Rs.1,62,785 with interest at the rate of 24%. 6. The suit was contested by defendant/appellant stating that in fact a loan was taken from plaintiff/respondents and by way of security alleged agreement for sale was executed. It was further stated that defendant remained present in the office of Sub-Registrar on 31.7.1986 and also got his attendance registered but plaintiffs failed to get the sale deed executed. In paragraph no.7 of written statement, it was categorically pleaded that plaintiffs were not ready and willing to perform their part of the contract. It was further stated that value of property is not less than Rs.5 Lacs and they are not entitled to discretionary relief of specific performance. 7. The trial court framed under noted issues in the suit:- "1. Whether on 8.1.1986, defendant executed an agreement to sell the disputed property for a sale consideration of Rs.2,77,800.00 in favour of plaintiffs and received Rs.1,40,000/- as part payment from plaintiffs? 2. 7. The trial court framed under noted issues in the suit:- "1. Whether on 8.1.1986, defendant executed an agreement to sell the disputed property for a sale consideration of Rs.2,77,800.00 in favour of plaintiffs and received Rs.1,40,000/- as part payment from plaintiffs? 2. Whether plaintiffs were always ready and willing to get the sale deed executed in their favour in terms of agreement in question, if so its effect? 3. Whether plaintiffs are entitled to get adjusted the amount of Rs.23,758/- which has been paid as per orders of the court on behalf of defendant towards sale consideration of the property in question? 4. Whether defendant has taken a loan of Rs.1,40,000/- at interest of 12% per annum from plaintiffs as alleged in para 18 of written statement? 5. Whether the suit of plaintiffs is barred by provisions of Specific Relief Act? 6. To what relief plaintiffs are entitled to receive?" 8. It is further submitted by Sri M.K. Gupta that the trial court held that agreement was duly executed and sum of Rs.1,40,000/- was received as earnest money by defendant/appellant. On issue no.2, regarding readiness and willingness on the part of plaintiffs to get the sale deed executed, the trial court held that plaintiffs failed to prove continuous readiness and willingness to perform their part of the contract. 9. The plaintiffs can not unilaterally alter terms and conditions of agreement for sale and are bound to plead and prove readiness and willingness to perform each and every term of contract strictly in the manner it was construed. The trial court while deciding issue no.6 held that plaintiffs are not entitled to discretionary relief of specific performance and instead granted alternative relief for refund of earnest money of Rs.1,40,000/- with interest at the rate of 12% per annum from 8.1.1986 and also for refund of Rs.23,758/- deposited by plaintiffs on behalf of defendant/appellant in execution case no.3 of 1986 from 18.11.1989 (date of actual deposit) till date of payment. 10. Plaintiffs aggrieved by judgment of the trial court filed civil appeal no.96 of 1995 which was allowed and relief for specific performance was granted. Hence the instant second appeal. 11. Four substantial questions of law relevant for consideration are being decided at the stage of admission itself. 12. 10. Plaintiffs aggrieved by judgment of the trial court filed civil appeal no.96 of 1995 which was allowed and relief for specific performance was granted. Hence the instant second appeal. 11. Four substantial questions of law relevant for consideration are being decided at the stage of admission itself. 12. Learned counsel appearing for plaintiff/respondents submits that sale deed has already been executed on behalf of defendant/appellant by the court, therefore, second appeal has been rendered infructuous. 13. In reply, Sri M.K. Gupta refuted the aforesaid contention and asserted that possession of (subject matter of agreement) property in question still continues with appellant, therefore, assertion by plaintiff/respondents is of no consequences. The sale deed was executed by the court without getting the appellant any opportunity of objection and during pendencey of the instant appeal. 14. After hearing counsels for respective parties and going through written submissions, since all the four substantial questions of law are interconnect, I proceed to decide simultaneously. 15. There is no dispute so far execution of agreement to sell for a valid consideration arises but it has to be examined whether lower appellate court decided question of readiness and willingness in view of provisions of Section 16 (c) of Specific Relief Act legally and judgment of the trial court granting relief of return of money to plaintiffs in view of provisions of Section 20 of the Specific Relief Act could be interfered in the manner as done by lower appellate court. 16. In the instant case, admittedly agreement to sale was for total consideration of Rs.2,77,800/- out of which Rs.1,40,000/- was paid as earnest money. The willingness by plaintiffs to pay balance amount of Rs.1,37,800/- was an essential condition as incorporated in the agreement to sell. 17. It is an admitted case that plaintiffs claimed an adjustment of Rs.23,758/- allegedly deposited by them in execution case no. 3 of 1986 on behalf of defendant and thereby the plaintiffs unilaterally altered terms and conditions of the agreement. Therefore, readiness and willingness expressed by them was not absolute but with certain rider and embargo. The terms of the contract stands altered. 18. Sri M.K. Gupta has placed reliance on a decision of this Court; Rahat Jan Vs. Hafiz Mohammad Usman (deceased by LR's) and others AIR 1983 Allahabad page 343. Paragraph no.8 of which is quoted below: "8. Therefore, readiness and willingness expressed by them was not absolute but with certain rider and embargo. The terms of the contract stands altered. 18. Sri M.K. Gupta has placed reliance on a decision of this Court; Rahat Jan Vs. Hafiz Mohammad Usman (deceased by LR's) and others AIR 1983 Allahabad page 343. Paragraph no.8 of which is quoted below: "8. Section 16 (c) of the Specific Relief Act 1963 contains a mandatory provision, according to which no relief for specific performance of the contract can be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him. Explanation to this section, further, lays down that the plaintiff should aver and prove his readiness and willingness to perform the contract according to its true construction. Readiness and willingness to perform his part of the contract is to be judged on the true construction of the agreement. The plaintiff's readiness and willingness must be in accordance with the terms of the agreement. The plaintiff cannot add any additional condition for the performance of his part of the contract. The readiness and willingness of the plaintiff to perform the contract should, therefore, be in accordance with the terms contained in the agreement. The readiness of the plaintiff must be in relation to the real agreement between the parties. If it transpires that the real agreement is not what the plaintiff alleges and the readiness and willingness which the plaintiff displayed was not in relation to the agreement, the plaintiff would be within the mischief of the doctrine of readiness and willingness to perform the contract and he will not be entitled to any relief. (See Md. Ziaul Haque v. Calcutta Vyapar Pratisthan, AIR 1966 Cal. 605 )." 19. Similar view was expressed by Patna High Court in the case of Diwali Lal and others Vs. Sardar Baldev Singh and another AIR 1985 PATNA 344. This decision also relates to the question whether terms of original agreement to sell can be altered unilaterally at behest of one of the parties where terms and conditions have been expressly agreed upon by two parties at the time of entering the contract. Sardar Baldev Singh and another AIR 1985 PATNA 344. This decision also relates to the question whether terms of original agreement to sell can be altered unilaterally at behest of one of the parties where terms and conditions have been expressly agreed upon by two parties at the time of entering the contract. One of the parties cannot be allowed to make or claim any alteration such as adjustment claimed by plaintiffs in the instant case. 20. Admittedly, execution case no.3 of 1986 arises from a money suit where defendant/appellant was a judgment-debtor. The dispute was between the defendant and another party and subject matter of agreement to sell was attached pursuant to satisfaction of the decree. It appears that property was mortgaged in the suit and after a decree was passed against the defendant, the subject matter was attached. The execution case was still continuing. Plaintiffs deposited an amount of Rs.23,758/- without there being any such request on behalf of defendant without his knowledge. The appellant/defendant did not ask the plaintiffs to satisfy the decree. It was done by the plaintiffs themselves on their own and later adjustment was claimed. 21. In the circumstances, admitted position is that the plaintiffs were ready to pay balance amount only after adjusting Rs.23,758/- which they deposited on behalf of appellant in lieu of satisfaction of the decree in execution case no. 3 of 1986. This is not a part of the original agreement in respect of which the suit for specific performance was instituted. Execution case was pending between appellant and another third party and plaintiffs without there being any such stipulation with the defendant came in between and accepted claim of third party and made the deposit to satisfy the decree operating against the appellant. 22. The trial court rightly held that plaintiffs failed to fulfil requirement of provisions of Section 16(1) of the Act. Lower appellate court has only recorded finding that plaintiffs were not aware of property attached in execution case no.3 of 1986 at the time of execution of decree, therefore, since they had no knowledge, it is irrelevant to decide question of adjustment while deciding issue of readiness and willingness to perform the contract. Plaintiffs have admittedly claimed for the aforesaid amount while seeking relief of specific performance, which could only be claimed in a separate suit. Therefore. Plaintiffs have admittedly claimed for the aforesaid amount while seeking relief of specific performance, which could only be claimed in a separate suit. Therefore. I am of the view that willingness shown by plaintiffs to pay balance amount after adjustment of Rs.23,758/- will not amount to "willingness to perform original contract". This would amount to a new term of contract, which was never agreed upon between parties. Requirement of law is that terms and conditions agreed upon between parties is to be essentially adhered to which the plaintiffs have failed to do. 23. Admittedly, the alleged agreement for sale is dated 8.1.1986 and sale deed was to be obtained by 31.7.1986. According to the plaint assertions, defendant/appellant failed to execute the sale deed when called upon to do so by notice dated 9.7.1986. Thus, cause of action for filing suit for specific performance accrued on 31.7.1986 and thereafter. According to paragraph no.8 of the plaint, defendant published a notice in newspaper dated 17.9.1987 that there is no encumbrance on the property, thus denying agreement for sale. Thereafter, plaintiffs gave notice dated 22.9.1987 to defendant questioning the advertisement in the newspaper. Even then suit for specific performance was not filed for a considerable period. Suit for specific performance was ultimately instituted on 6.1.1989 i.e. after 2 ½ years. Thus, there was total inaction on the part of plaintiffs for a very long period. During this interregnum, there was a considerable escalation in price of the property. In paragraph no.19 of written statement, defendant stated that property was worth Rs.5 Lacs even at the time of execution of the alleged agreement for sale. It was further asserted in paragraph no.23 of written statement that with passage of time, value had increased considerably. 24. Hon'ble Apex Court in the case of K.S. Vidyanadam Vs. Vairavan 1997 AIR SC page 1751 in para nos.9 and 13 held as follows: "9. Article 54 of the Limitation Act prescribes three years as the period within which a suit for specific performance can be filed. The period of three years is to be calculated from the date specified in the agreement for performance or in the absence of any such stipulation within three years from the date the performance was refused. 13. In the case before us, it is not mere delay. The period of three years is to be calculated from the date specified in the agreement for performance or in the absence of any such stipulation within three years from the date the performance was refused. 13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2 ½ years in clear violation of the term of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices- accordingly to the defendants, three times- between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff." 25. Similar view has been taken by Hon'ble Apex Court in the case of Parak Unnan Veetill Joseph's Son Mathew Vs. Nedumbara Kuruvila's Son and others AIR 1987 SC 2328 , Kanshi Ram Vs. Om Prakash Jawal and others JT 1996 (4) SC 733. 26. Sri O.P. Rai has placed reliance on a decision of Hon'ble Apex Court T.Mohan Vs. Kannammal and another 2002 (47) ALR page 591. Emphasis laid by learned counsel appearing for plaintiff/respondents is that question of readiness and willingness to pay balance amount of consideration is not of much importance and, therefore, it is argued that assuming plaintiffs were ready to deposit the money after deducting and making adjustment of Rs.23,758/- it cannot be said that plaintiffs were not willing and ready to execute their part. 27. I have gone through the entire judgment of Hon'ble Apex Court. It is apparent that this decision is not relevant for the present appeal since there were other questions which Hon'ble Apex Court had taken into consideration such as secondary evidence and insufficiency of stamp on the deed of agreement to sell. 28. Reliance is also placed on another decision of Hon'ble Apex Court Rajeshwari Vs. Puran Indoria 2005 (61) ALR 145. In fact, this decision is in support of the appellant. 28. Reliance is also placed on another decision of Hon'ble Apex Court Rajeshwari Vs. Puran Indoria 2005 (61) ALR 145. In fact, this decision is in support of the appellant. Hon'ble Apex Court was of the view that right to specific performance of agreement for sale of immoveable property raises question of substantial importance and thereby view was in affirmative and it was held that an order in exercise of discretion may not involve a substantial question of law, the question whether court could, in law, exercise a discretion at all for decreeing specific performance is definitely substantial question of law as it substantially effects right of the parties in the suit. 29. In the instant case, according to terms of agreement, plaintiffs were required to pay balance of Rs.2,77,800/- after deducting Rs.1,40,000/-, which was paid in advance i.e. to establish willingness and readiness. Plaintiffs were liable to show their willingness and readiness to deposit Rs.1,37,800/- only then it would be strict compliance of terms and conditions of the agreement to sale. Plaintiffs chose to satisfy the decree operating against defendant in which they were not parties and thereafter claimed an adjustment of the said amount and expressed their willingness to deposit only Rs.1,14,042/-. Plaintiffs cannot add any additional conditions to performance of their part of contract. Readiness of plaintiffs may be collateral to actual agreement and if it transpires that real agreement is not what plaintiffs allege and so-called readiness and willingness displayed by plaintiffs in relation to agreement would be definitely within the mischief of doctrine of willingness and readiness to perform contract, therefore, they will not be entitled to any relief whatsoever. Besides, plaintiffs have not led any evidence to substantiate even remotely that defendant had allowed plaintiffs to justify and satisfy money decree or about any such claim in another suit between defendant/appellant and a third party. Therefore, in absence of the same, plaintiffs are not entitled to any relief whatsoever. 30. I cannot lose sight of delay in institution of the suit. The sale deed was to be executed by 31.7.1986. Presence of appellant before Sub Registrar was recorded on 31.7.1986 but suit was instituted only on 6.1.1989. Thus, this delay on the part of plaintiffs does not entitle them for any discretionary relief whatsoever. 30. I cannot lose sight of delay in institution of the suit. The sale deed was to be executed by 31.7.1986. Presence of appellant before Sub Registrar was recorded on 31.7.1986 but suit was instituted only on 6.1.1989. Thus, this delay on the part of plaintiffs does not entitle them for any discretionary relief whatsoever. It is also to be noticed that while deciding issue no.3, the trial court has taken a note of paper nos.18-C and 19-C and it was deposed in evidence by defendant that plaintiffs have not deposited a sum of Rs.23,758/- in execution case no.3 of 1986 Smt. Santosh Kumari Vs. Dev Kumar on behalf of judgment debtor Dev Kumar. 31. Discretion exercised by lower appellate court is also liable to be interfered since consequence of delay on the part of plaintiffs and escalation of price as well as claim of plaintiffs of alternate relief was completely ignored by XVIth Additional District Judge. This itself constitutes a substantial question of law as it substantially effect right of the parties in the suit as held by Hon'ble Apex Court in the case of Rajeshwari (supra). It is a question, which was liable to be decided as to whether specific performance was enforceable in terms of Section 20 of the Act and also question of limitation which has completely been ignored. Thus, substantial questions of law raised by learned counsel cannot be said to be questions of fact as argued by the counsel appearing for respondents based on appreciation of evidence. These are questions which are liable to be adjudicated upon in the context of relevant provisions of Specific Relief Act. 32. Hon'ble Apex Court had clearly held in the case of Rajeshwari (supra) that these questions amount to substantial questions of law and High Court can very well decide these questions in second appeal. For ready reference, paragraph nos.4 and 7 of which is quoted below: "4. 32. Hon'ble Apex Court had clearly held in the case of Rajeshwari (supra) that these questions amount to substantial questions of law and High Court can very well decide these questions in second appeal. For ready reference, paragraph nos.4 and 7 of which is quoted below: "4. The right to specific performance of an agreement for sale of immovable property, when filed, raises questions of substantial importance between the parties as to whether the plaintiff has satisfied the requirements of section 16 of the Specific Relief Act, whether it is a case in which specific performance of the contract is enforceable in terms of section 10, whether in terms of section 20 of the Act, the discretion to decree specific performance should be exercised by the Court and in some cases, whether the suit was barred by limitation and even if not, whether the plaintiff has been guilty of negligence or laches disentitling him to a decree for specific performance. Theses questions, by and large, may not be questions of law of general importance. But they cannot also be considered to be pure questions of fact based on an appreciation of the evidence in the case. They are questions which have to be adjudicated upon, in the context of the relevant provisions of the Specific Relief Act and the Limitation Act (if the question of limitation is involved). Though, an order in exercise of discretion may not involve a substantial question of law, the question whether a Court could, in law, exercise a discretion at all for decreeing specific performance, could be a question of law that substantially affects the rights of parties in that suit. Therefore, in the case on hand, the High Court was not justified in dismissing the second appeal in the manner in which it has done. Be it noted, that the High Court has also not spoken while dismissing the second appeal. We are, therefore, of the view that it is necessary for the High Court to consider whether a substantial question of law is involved or not and to give us reasons for coming to its conclusion either way, and if it finds that a substantial question of law or substantial questions of law is or are involved, to frame that question or those questions and to answer it or them in accordance with law. In the context of the notice issued by this Court while entertaining the petition for special leave to appeal, the proper course to adopt is to set aside the judgment and decree of the High Court in the second appeal and remand the second appeal to the High Court for a consideration of the question whether any substantial question of law is involved in the case in the light of the pleadings and the facts established and if it arises, to decide whether any interference in second appeal under Section 100 of the Code of Civil Procedure, 1908 is warranted or justified. 7. It is true that it is in consonance with public policy, to curtail a right of appeal (that too, a second appeal) so as to ensure that a litigation attains finality as early as possible. At the same time, it has also to be ensured that justice, according to law, is made available to the litigant who approaches the Court. Our experience, as lawyers and Judges of High Courts shows that more often than not, first Appellate Court, simply, mechanically, reiterate what is stated by the Trial Court and confirm findings of fact rendered by the Trial Court without making an independent reappraisal of the pleadings and the evidence in the case as they are bound to do as Courts of appeal. But even in such cases, the High Courts find it difficult to interfere, though, they do interfere, when the injustice caused to the litigant is so apparent that the same could not be overlooked and the judgment under appeal allowed to pass muster. There have also been occasions when the High Courts had felt compelled to interfere, notwithstanding the limitation imposed by the wording of section 100 of the Code of Civil Procedure, and on occasions such decisions have been interfered with by this Court, on the ground that the High Court has exceeded its jurisdiction under section 100 of the Code of Civil Procedure. After all, the purpose of the establishment of Courts of justice is to render justice between the parties. Is it necessary to unduly curtail the jurisdiction of the High Courts, either under section 100 of the Code of Civil Procedure or under section 115 of the Code of Civil Procedure in that context? Of course, the High Courts have to act with circumspection while exercising theses jurisdictions. Is it necessary to unduly curtail the jurisdiction of the High Courts, either under section 100 of the Code of Civil Procedure or under section 115 of the Code of Civil Procedure in that context? Of course, the High Courts have to act with circumspection while exercising theses jurisdictions. Certainly, it is for the Parliament to take into account all the relevant aspects. We are making these observations only with a view to highlight the position that has emerged in the light of the amendments to sections 100 and 115 of the Code of Civil Procedure as they are now obtaining. 33. In view of what has been stated above, judgment and decree dated 20.3.1999 passed by XVIth Additional District Judge, Meerut, in civil appeal no.96 of 1995 is set at naught. Alternative relief claimed by plaintiff/respondents is decreed for an amount of refund of Rs.1,33,758/- along with interest @ 12% per annum till the date of institution of second appeal. In addition to this, an amount of Rs.23,758/- is payable by appellant. The amount shall be paid within a period of four months and sale deed executed by court is a nullity and cannot be given effect to. The instant second appeal is allowed.