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2011 DIGILAW 1121 (KAR)

K. Ananthi Kumar v. S. Gopal

2011-11-18

H.S.KEMPANNA, N.KUMAR

body2011
JUDGMENT N. KUMAR, J.—This is plaintiffs appeal against the judgment and decree of the trial Court which has dismissed the suit of the plaintiff for specific performance of the agreement of sale. 2. For the purpose of convenience the parties are-referred to as they are referred to in the original suit. 3. The subject matter of the suit is a site bearing No. 251 situated at West of Chord road, 8th main, 4th stage, III block, Bangalore 79 measuring east to west 80 ft. and north to south 50 ft. and more particularly described in the schedule to the plaint and hereinafter referred to as schedule property. The said property was allotted to one H.M. Nanjappa. by the BDA under a lease/sale agreement dated 16.11.1981 which is duly registered. There was a non-alienation clause in the said agreement prohibiting the allottee from alienating the property for a period of 10 years. BDA issued possession certificate on 5.5.1982 to Sri. Nanjappa, The non-alienation clause was in force till 4.3.1992. The BDA executed a conditional sale deed in the name of Sri. H.M. Nanjappa on 26.10.1983. The conditional sale deed sale deed also contained the aforesaid non-alienation clause. Katha was made out in the name of Sri. H.M. Nanjappa. 4. The defendant purchased the schedule property from the said Nanjappa under a registered sale deed dated 28.11.1993 for a consideration of Rs. 98,000/-. He was put in possession on execution of the sale deed. In the middle of 1986 the defendant approached the husband of the plaintiff and informed him that he has purchased a lodge by name of Sunbeam Lodge which Is presently known as Srinidhi Lodge for which he is in need of certain amounts and accordingly, sought, for financial assistance. The brother of the defendant by name S. Namyan was known for several years to the husband of the plaintiff. The plaintiff and her husband along with her minor son issued three cheques totalling to Rs. 1,75,000/- drawn on the Syndicate Bank, Gandhinagar Branch, Bangalore. The said cheques were duly encashed by the defendant, The understanding was the said amount is to be returned by the defendant, within a period of three months and it is to be treated as hand loan in order to augment the purchase of the lodge by the defendant. The defendant did not keep up his promise. The said cheques were duly encashed by the defendant, The understanding was the said amount is to be returned by the defendant, within a period of three months and it is to be treated as hand loan in order to augment the purchase of the lodge by the defendant. The defendant did not keep up his promise. In those circumstances, the defendant made an offer to the plaintiff and her husband to sell the schedule property. He also promised that he would get the power of attorney executed in her favour from H.M. Nanjappa since he was not in a position to return the loan amount. The plaintiff was not. keen, but was prevailed upon by the defendant that in view of the feet that her husband was keen of setting up a garage and a service station, the said property would be made use of. Accordingly, the defendant got Mr. Narayan executed the power of attorney in favour of the plaintiff. Defendant also agreed to obtain the permission from the Urban band Ceiling Authority and also the income tax clearance certificate and also encumbrance certificate in order to facilitate the registration of the absolute sale deed in favour of the plaintiff since the katha of the suit schedule property stood in the name of Narayari. The defendant promised that pursuant to the sale in favour of the plaintiff it would be the duty of the defendant to have the katha transferred in favour of the plaintiff and that necessary steps would be taken to obtain the signature of Sri. H.N. Narayan in order to have the same done. The plaintiff was also promised by the defendant that the sale deed would be executed after 4.3.1982 In the event of failing to comply with the formalities as stated earlier. The defendant sought to go back on his promise and did not get necessary permission as agreed upon in respect of the lease period being over. He was in no mood to get the sale deed executed in favour of the plaintiff as agreed under the agreement of sale. The defendant had in the agreement of sale agreed to get the no objection certificate within the period of six months. When he did not obtain the no objection certificate, the plaintiff was left with no other alternative but to get. The defendant had in the agreement of sale agreed to get the no objection certificate within the period of six months. When he did not obtain the no objection certificate, the plaintiff was left with no other alternative but to get. issued the legal notice dated 14.9.1987 calling upon the defendant to execute the sale deed after obtaining the necessary documents and the no objection certificate from the BDA. The said notice was duly received by the defendant and after receiving the said notice, the defendant sought for time on 29.9.1987. Subsequently, the defendant approached the plaintiff and held out assurances that he would comply with the demands made in the legal notice, but did not choose to do so. After the period of five months he got issued an untenable reply on 25.2.1988. The plaintiff clarified the same vide rejoinder dated 14.3.1988. The said rejoinder was duly received by the defendant and after receiving the same, a reply was sent on 7.4.1988. There was no need for the plaintiff to send further reply in view of the fact that no new issues were raised in the reply. The defendant in the meanwhile was trying to interfere with the peaceful possession and enjoyment of the suit schedule property by the plaintiff. In the circumstances, she had to approach the Station Officer, Ramakshipalya police station. They issued an endorsement stating that the matter was of civil nature and they were unable to help. The plaintiff submits after being put in possession she has Invested lot of money on the suit schedule property and is carrying on the business which is the only means of livelihood for herself and her family since her husband who is looking after the day-to-day management of the said business. After waiting for sufficient time, on 8.8.1992 the plaintiff got issued one more notice calling upon the defendant to execute an absolute sale deed in her favour since the lease period was coming to an end on 4.3.1992. The husband of the plaintiff met the defendant a week prior to the issue of the legal notice and in view of the tenor of the talk of the defendant the plaintiff got an impression that the defendant was trying to retrace his steps. In the said legal notice she has expressed her readiness to pay the balance sale consideration of Rs. In the said legal notice she has expressed her readiness to pay the balance sale consideration of Rs. 4,00,000/- and called upon the defendant to obtain necessary certificate from the Urban Land Ceiling Authority, encumbrance certificate within one week from the date of notice and after hearing the defendant, the plaintiff would furnish the draft sale deed, The plaintiff also informed the defendant that on his failure to comply with the demands made she would be left with no other choice but to seek for specific performance of the agreement of sale dated 18.3.1987. The defendant caused a reply to the legal notice on 28.3.1992. On 1.6.1992, a rejoinder was issued, A public notice also came to be issued when an attempt was made by the defendant to alienate the property. Therefore, the plaintiff was constrained to file the suit for the specific performance of the agreement of sale. After service of summons the defendant entered appearance and filed the detailed written statement., They did not dispute the allotment of the site by the BDA to Nanjappa and Nanjappa executing the sale deed in favour of the defendant and in-turn entering into an agreement to sell the schedule property to the plaintiff for a consideration of Rs. 4,75,000/- and also the receipt of Rs. 75,000/- under the agreement of sale as an advance. They denied the payment of Rs. 1,75,000/- as a hand loan as set out in the plaint. The agreement of sale itself clearly shows how the defendant has become the owner of the schedule property. The defendant has produced before the plaintiff not only the possession certificate, but also the conditional sale deed executed by the BDA in favour of the Nanjappa and also the sale deed executed by Nanjappa in favour of the defendant apart from other connected records. Having verified all the documents knowing fully well the conditions imposed by the BDA, the plaintiff has agreed to purchase the property. The defendant has to obtain the certificate from the Urban Land Celling Authority and Income Tax clearance certificate, but the plaintiff did not have funds to purchase the property as she did not have Rs. 4,00,000/-. Purposely, she did not furnish the draft sale deed to produce before the Income Tax Authorities in spite of repeated request, Instead of complying her tinder the contract notices were issue done after the other. 4,00,000/-. Purposely, she did not furnish the draft sale deed to produce before the Income Tax Authorities in spite of repeated request, Instead of complying her tinder the contract notices were issue done after the other. It is specifically averred in the written statement that the plaintiff did not have money to pay and in order to postpone the execution of the sale deed, all sorts of allegations were made against the defendant. They denied the allegation made regarding extension of time as averred in para 9 of the plaint. It. is asserted that the defendant was ready and willing to perform his part of the contract right from the beginning, but the plaintiff herself went back, as she did not have the balance sale consideration. The plaintiff did not pay the amount within the stipulated period and was not willing to perform her part of the contract purchase the property as agreed upon. Therefore, the defendant was forced to resile the agreement and it was made very clear, to the effect in the notice exchanged between the parties. The defendant is not aware of issue of any public notice. It is false to say that time was not the essence of the contract. They denied the allegation, that the plaintiff was always ready and willing to perform her part of the contract by paying the balance sale consideration to the defendant. It was also contended that the suit is barred by limitation. On the aforesaid pleadings the trial Court framed the following issues: “1. Whether the plaintiff proves that on 18.3.1987, the defendant agreeing to sell the suit property to her for a consideration of Rs. 4,75,0200/-? 2. Whether the plaintiff proves that she paid Rs. 75,000/- to the defendant as advance towards sale consideration? 3. Whether the plaintiff proves that she is ever ready and willing to perform her part of agreement of sale? 4. Whether the plaintiff proves that she is entitled for specific performance of the agreement of sale? 5. Whether the defendant proves that the suit transaction is loan, transaction? 6. Whether the defendant proves that the suit is barred by limitation? 7. What order or decree?” The plaintiff in order to substantiate her claim examined her husband Sri. S. Kalyan Kumar as P.W. 1, produced 42 documents which are marked as exhibits PI to P42. 5. Whether the defendant proves that the suit transaction is loan, transaction? 6. Whether the defendant proves that the suit is barred by limitation? 7. What order or decree?” The plaintiff in order to substantiate her claim examined her husband Sri. S. Kalyan Kumar as P.W. 1, produced 42 documents which are marked as exhibits PI to P42. On behalf of the defendant his brother and power of attorney holder S. Narayan was examined as P.W. 1 and the special power of attorney was marked as Ex. D1. The trial Court on appreciation of the aforesaid oral and documentary evidence on record held, the execution of the agreement of sale is admitted by the defendant. It is also agreed that the sale consideration is Rs. 4,75,000/- and a sum of Rs. 75,000/- was paid under the agreement of sale. Therefore, it held issues 1 and 2 in the affirmative and in favour of the plaintiff. Insofar as issue regarding readiness and willingness to perform her part of the agreement of sale is concerned, it held the plaintiff was not ready and willing to perform her part of the contract as she did not. have the remaining four lakhs consideration payable and, therefore, she failed to establish that she was ready and willing to perform her part of the contract, Consequently, it held that the plaintiff is not entitled to the decree for specific performance. It also held that the suit is barred by limitation. Therefore, it dismissed the suit of the plaintiff. Aggrieved by the said judgment and decree of the trial Court, the plaintiff has preferred this appeal. 5. The learned counsel for the appellant/plaintiff who is appointed as the Amicus Curiae by the Court Sri. Yeshu Mishra submitted though six months is the period stipulated in the agreement of sale, there was an obligation east upon the defendant to obtain, the income tax clearance certificate, encumbrance certificate, permission from the urban land ceiling authorities and a no objection from the BDA for execution of the sale deed. None of these obligations were performed by the defendant. It is he who committed the breach of the terms of the agreement. The plaintiff was always ready and willing to perform her part of the contract. She was ready with Rs. 4,00,000/-, the balance consideration payable. In the legal notice sent, this feet is abundantly made clear. None of these obligations were performed by the defendant. It is he who committed the breach of the terms of the agreement. The plaintiff was always ready and willing to perform her part of the contract. She was ready with Rs. 4,00,000/-, the balance consideration payable. In the legal notice sent, this feet is abundantly made clear. Under these circumstances, the trial Court committed a serious error in holding that the plaintiff has failed to establish her readiness and willingness to perform her part of the contract. Secondly, he contended the period of limitation is to be counted from the date the defendant has performed their obligation. As till today, as they have not performed their obligation the trial Court recording a finding that the suit is barred by limitation is erroneous. That apart, no sale deed could have been executed during the non-alienation period which came to an end only on 4.3.1982 and, therefore, the suit filed on 4,3.1983 is well within time and it is not barred as held by the trial Court. Therefore, he contends the judgment and decree of the trial Court requires to be set aside and the suit is to be decreed for specific performance. 6. Per contra, the learned counsel for the respondent supported the impugned order. 7. In the light of the aforesaid facts and the rival contentions the points that arise for our consideration are: (i) Whether the finding of the trial Court that the plaintiff was not ready and willing to perform her part of the contract is erroneous and calls for interference? (ii) Whether the suit is barred by time? 8. Re. Point No. 1: The facts are not in dispute. The schedule property belongs to the defendant. He has purchased the same under the registered sale deed from the previous owner Nanjappa on 28.11.1983. It is a site allotted to Nanjappa by the BDA. BDA In turn has executed a lease/sale agreement, issued a possession certificate and also a conditional sale deed in favour of Nanjappa. Both in the lease/sale agreement and In the conditional sale, there is a prohibition of alienation for a period of 10 years. In. It is a site allotted to Nanjappa by the BDA. BDA In turn has executed a lease/sale agreement, issued a possession certificate and also a conditional sale deed in favour of Nanjappa. Both in the lease/sale agreement and In the conditional sale, there is a prohibition of alienation for a period of 10 years. In. spite of the same, Nanjappa has executed a. registered sale deed in favour of the defendant, The defendant in turn has executed an agreement of sale in favour of the plaintiff on 18.3.1987 agreeing to sell the schedule property for a consideration of Rs. 4,75,000/-. A sum of Rs. 75,000/- is paid as advance under the agreement of sale. The period stipulated for completing the sale transaction is six months from the date of execution of the agreement of sale. The agreement of sale stipulates for completing the sale transaction, The defendant has to obtain receipt for having paid tax, get encumbrance certificate, IT. clearance certificate from the ULCA and then on receipt of the balance sale consideration of Rs. 4,00,000/-, he has to execute the sale deed either in the name of the plaintiff-or her nominee and register the sale deed. At the time of registration of the sale deed he is expected to hand over all the original title deeds and also deliver possession of the schedule property. The entire dispute between the parties revolves round the compliance of the terms of the agreement. But in the entire agreement, there is no obligation cast on the defendant to obtain the no objection from the BDA for sale of the schedule property. It is not in dispute both the parties after the execution of the agreement of sale have filed necessary application before the ULCA by duly affixing the signatures. On expiry of 60 days, the permission is deemed to have been granted. The defendant has paid tax and ready with the tax paid receipt. He is also ready with the encumbrance certificate. Insofar as the income tax clearance certificate is concerned, plaintiff has to furnish a draft sale deed in the name of the person in whose name they wanted to take. It is only after production of the draft sale deed, the defendant would he able to apply and obtain the clearance certificate. The plaintiff did not. furnish the draft sale deed. It is only after production of the draft sale deed, the defendant would he able to apply and obtain the clearance certificate. The plaintiff did not. furnish the draft sale deed. The contents of the legal notice, reply rejoinder, the reply to the respondent clearly establish that the plaintiff was insisting upon, for no-objection, certificate from the BDA for payment, of the balance sale consideration as there was a non-alienation clause in the lease/sale agreement, conditional sale deed executed by the BDA in favour of Nanjappa. As the defendant did not furnish the same, the sale transaction could not be completed in view of that non-alienation clause in the lease/sale agreement and the conditional sale. Nanjappa who was bound by that clause executed the sale deed in favour of the defendant on 28.11.1983. All these facts are recited in the agreement of sale itself. If Nanjappa could execute the sale deed in favour of the defendant, certainly there was no prohibition in law for the defendant to execute any sale deed in favour of the plaintiff. No objection certificate from the BDA was not a condition precedent; for execution and registration of the sale deed. No such term was introduced in the agreement of sale. Therefore, it is clear the said condition was not insisted upon. It is not an agreed term of the contract and on that pretext the payment of balance sale consideration was postponed. In the first series of legal notice dated 14.9.1987 ended with rejoinder on 14.3.1988. Four years nothing happened, The second set of legal notice was issued on 3.3.1992 and it is only thereafter, the present suit is filed. Even before the Court when the defendant specifically averred both in the notice as well as in the written statement that the plaintiff was not ready and willing to perform her part of the contract, she was not ready with four lakh balance sale consideration, the plaintiff has not produced any evidence to show tier readiness and willingness from the date of agreement till the date of payment. It is in this background the trial Court on careful scrutiny of the oral and documentary evidence produced in the ease has categorically held that the plaintiff has failed to establish her readiness and willingness to perform her part of the contract, she was not ready with the balance sale consideration of Rs. It is in this background the trial Court on careful scrutiny of the oral and documentary evidence produced in the ease has categorically held that the plaintiff has failed to establish her readiness and willingness to perform her part of the contract, she was not ready with the balance sale consideration of Rs. 4,00,000/- and, therefore, it is she who committed breach of terms of the contract. Accordingly, she is not entitled to the relief of specific performance. The said finding is based on legal evidence and do not suffer from any legal infirmity which calls for interference by this Court. 9. Re: Point No. 2: It is not in dispute that 6 months is the period prescribed under the agreement of sale for completing the sale transaction. It is nobody’s case that the original period fixed was extended by agreement between the parties nor there is any evidence. Assuming that the defendant did not perform his obligations under the terms of the agreement and thereby committed breach of the terms of the agreement, the cause of action for filing the suit for specific performance arose on the expiry of 6 months period, i.e., 18.9.1987. Three years is the period prescribed for performance of the contract. From that date, the cause of action arose. In the event of time being fixed for performance of the contract, Article 54 of the Limitation Act makes it very clear when date is fixed for the purpose of the contract time begins to run from that date and three years is the period prescribed for filing of the suit. This Court had an occasion to consider this aspect. After reviewing the entire case law it was held in the case of L. Krishnoji Rao vs. Agarhathi Workers House Building Co-operative Society Limited and another, (RFA Nos. 529/2000 and 530/2009 disposed of on 23.9.2011) as under: “The law on the point is fairly well settled. The suit for specific performance of contract would be governed by Article 54 of the Limitation Act, 1963, For specific performance of contract three years period has been prescribed for filing a suit But this three years period has to be counted in the mode in the last column, which is in two parts. The suit for specific performance of contract would be governed by Article 54 of the Limitation Act, 1963, For specific performance of contract three years period has been prescribed for filing a suit But this three years period has to be counted in the mode in the last column, which is in two parts. The first part indicates that, in case any date has been fixed for performance of contract in that event three years will be counted from that date. But when there is no date fixed, the second part will he applicable, which in substance is that the period of three years would commence to run when notice of performance is refused, ‘The third column shows that wherever a time is fixed for the specific performance the first part of it would apply and in other cases the second part While determining the applicability of the first or the second part of the said provision, the Court will first see as to whether any time was fixed for performance of the agreement of sale and if it was so fixed, whether the suit was filed beyond the prescribed period unless any case of extension of time for performance was pleaded and established. When, however, no time is fixed for performance of contract, the Court may determine the dale on which the plaintiff had notice of refusal on the part of the defendant to perform, the contract and in that event the suit is required to be filed within a period of three years therefrom. The principle underlying this article is that when the date is fixed under this first part of column 3, limitation begins to run forthwith as the date is certain, hut where no such time is fixed and. where the party against whom the limitation runs is not in a position to know of the occurrence of the contingency contemplated by the contract time begins to run. only when he has notice of the refusal of the performance. The expression “date” used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. “Dale fixed for performance” does not mean a precise dote by calendar alone, but the same is comprehensive enough to include a date which can be ascertained with reference to an event certain to happen. The expression “date” used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. “Dale fixed for performance” does not mean a precise dote by calendar alone, but the same is comprehensive enough to include a date which can be ascertained with reference to an event certain to happen. The phrase “the date fixed for the performance” must be not only an identifiable dale but also a date which the parties intended should be the date when the contract should be performed. The expression” date fixed under this article means and connotes the date expressly agreed to by the parties in the convenant itself.” Therefore, in the instant case, six months is the period fixed under the contract of sale for the purpose of the contract. The date of the agreement is 18.3.1987. six months prescribed expires on 18.9.1.987 and three years is computed from the date. The date expires on 18.9.1990 and, therefore, the suit filed on 4.3.2003 Is clearly barred by limitation. The trial Court on careful scrutiny of the material on record, keeping in mind the settled position has rightly held that the suit is barred by the law of limitation. The said finding is also unexceptionable. 10. We do not see any merit in this appeal and accordingly, the appeal is dismissed.