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2011 DIGILAW 491 (AP)

Puvvada Chiranjeeva Rao v. Busi Koteswara Rao

2011-07-04

L.NARASIMHA REDDY

body2011
Judgment : These two second appeals are filed by the same person and are between the same parties and are interrelated. Hence, they are disposed of through a common judgment. 2. The appellant is the owner of land in Survey No.173/2 Ongole Rural. He entered into an agreement of sale with the respondent on 22.09.1989 in respect of 9 Gadies and 51 Square Feet (roughly about 80 Square Yards) of site in Ongole Town of Prakasam District. According to the terms of the agreement, the consideration was agreed to be paid at Rs.1,500/- per Gadi and a sum of Rs.500/-was paid as advance by the respondent. The balance of consideration was agreed to be paid within two months from the date of agreement and the respondent was under obligation to get the land measured. The land covered by the agreement abuts a piece of land that was assigned to the respondent by the Government. 3. In addition to the advance of Rs.500/-, the respondent paid a sum of Rs.5000/-on 05.01.1990 and four years thereafter, a further sum of Rs.1,500/-. The appellant got issued a notice, dated 01.03.2000, alleging that the respondent trespassed into his plot in 1995, without paying the balance of consideration, constructed a house thereon and did not vacate the same in spite of repeated requests. He demanded the respondent to vacate the premises, deliver possession of the vacant site and pay damages for illegal occupation of site at the rate of Rs.700/-per month. The respondent got issued a reply, stating that the house was constructed with the oral permission of the appellant and that the balance of sale consideration was not paid on account of the failure on the part of the appellant to get the site measured. 4. After receipt of the reply, the appellant filed O.S.No.899 of 2000 in the Court of Principal Junior Civil Judge, Ongole, for the reliefs of recovery of possession of the plot, recovery of a sum of Rs.25,200/-as past mesne profits and prayed for ascertainment of future profits. The respondent filed a written statement opposing the suit. He virtually repeated contentions of his reply notice and stated that the house was constructed with the oral permission of the appellant. 5. The respondent filed a written statement opposing the suit. He virtually repeated contentions of his reply notice and stated that the house was constructed with the oral permission of the appellant. 5. Two years thereafter, the respondent filed O.S.No.174 of 2002 in the Court of IV Additional Junior Civil Judge, Ongole, for relief of specific performance of contract, covered by the agreement of sale. He pleaded that he was ready and willing to pay the balance of consideration and to perform his part of the contract, and that the appellant did not get the land measured, much less, executed the sale deed. The appellant opposed the said suit by raising several contentions including the one of limitation. It was also stated that the respondent is not entitled for the relief of specific performance, on account of his not being ready and willing to perform his part of contract and that the respondent lacks bona fides. 6. O.S.No.899 of 2000 was decreed on 08.07.2003. Aggrieved thereby, the respondent filed A.S.No.100 of 2004 in the Court of I Additional District Judge, Ongole. O.S.No.174 of 2002 was dismissed by the trial Court on 12.10.2004. The respondent filed A.S.No.2 of 2005 in the same appellate Court. 7. Through common judgment, dated 02.08.2010, the lower appellate Court allowed both the appeals. The result was that O.S.No.899 of 2000 was dismissed and O.S.No.174 of 2002 was decreed. Hence, these two Second Appeals. 8. Sri Posani Venkateswarlu, learned counsel for the appellant, submits that the recitals in the agreement of sale, Ex.A1, are clear to the effect that the balance of sale consideration shall be paid within two months from the date of agreement and that the possession of the property would be delivered at the time of execution of the sale deed. He submits that though time ceased to be essence of contract, on account of receipt of part of the consideration after the due date, the possession was not delivered at all to the respondent. Learned counsel submits that the respondent occupied the suit site high-handedly, taking advantage of the absence of the appellant. He submits that the respondent was not only disentitled for the relief of specific performance, but was also liable to be evicted since he was not entitled for the benefit under Section 53-A of the Transfer of Property Act, 1882. 9. Learned counsel submits that the respondent occupied the suit site high-handedly, taking advantage of the absence of the appellant. He submits that the respondent was not only disentitled for the relief of specific performance, but was also liable to be evicted since he was not entitled for the benefit under Section 53-A of the Transfer of Property Act, 1882. 9. Learned counsel further submits that the respondent disqualified himself from seeking the relief of specific performance on account of the fact that he occupied the suit land unauthorisedly and contrary to the agreement of sale and that he did not pay the balance of consideration in spite of repeated requests. He further submits that once the respondent is not entitled for the relief of specific performance, the inevitable consequence is that he has to vacate the suit site and pay the damages. He contends that the lower appellate Court has committed legal and factual errors in reversing the judgments rendered by the trial Courts. 10. Sri Ravi Kumar Toleti, learned counsel for the respondent, on the other hand, submits that though the agreement of sale was executed in the year 1989, further progress in the direction of execution of the sale deed did not take place on account of the failure on the part of the appellant to get the site measured. He contends that O.S.No.899 of 2000 was not maintainable since the appellant did not pray for the cancellation of agreement of sale. Learned counsel further submits that the respondent made construction on the site with the oral permission of the appellant. 11. The purport of the two suits filed by the parties herein against each other was already explained in brief. Since both the suits were inter-dependant, the parties ought to have taken steps to get them heard by one and the same Court. However, it did not happen. 12. In O.S.No.899 of 2000, the trial Court framed the following issues: “(1) Whether the defendant constructed building with permission of plaintiff? (2) Whether plaintiff is entitled to seek possession of schedule property?” The appellant deposed as PW.1 and he filed Exs.A1 and A2 i.e., Legal Notice and Reply thereto. On behalf of the respondent, DWs.1 to 3 were examined and Exs.B1 to B10, House Tax Demand Notices and Exs.B11 to B25, Electricity Receipts, were filed. The suit was decreed as prayed for. 13. On behalf of the respondent, DWs.1 to 3 were examined and Exs.B1 to B10, House Tax Demand Notices and Exs.B11 to B25, Electricity Receipts, were filed. The suit was decreed as prayed for. 13. In O.S.No.174 of 2002, filed by the respondent for relief of specific performance of agreement of sale, the trial Court framed the following issues: “1) Whether suit claim is barred by time? 2) Whether the plaintiff is entitled for specific performance of contract? 3) Whether plaintiff is not ready and willing to perform the part of contract?” In that suit, the respondent and the appellant herein deposed as PW.1 and DW.1, respectively. The documentary evidence comprised of Ex.A1, agreement of sale, and Ex.B1, certified copy of the judgment in O.S.No.899 of 2000. The suit was dismissed. 14. In A.S.Nos.100 of 2004 and 2 of 2005, filed against the decrees referred to above, the lower appellate Court framed only one issue for its consideration, viz., Whether the plaintiff (the respondent herein) is entitled for specific performance of Ex.A1, agreement? As observed earlier, the appeals are allowed and the decrees passed by the trial Courts were reversed. 15. After hearing the learned counsel for the parties at length, this Court is of the view that the following substantial questions of law arise for consideration in these Second Appeals: a) Whether a party to an agreement of sale, who takes possession of the property on his own accord, can complain of failure on the part of the vendor to get the land measured and cite it as an excuse for non-payment of balance of consideration? b) Whether a purchaser under the agreement of sale, who assumes possession of the property contrary to the recitals in the agreement and without permission of the vendor, can be granted the relief of specific performance of contract, covered by an agreement of sale. c) Whether a suit for specific performance of agreement of sale, filed years after receiving a notice from the vendor for delivery of possession and filing of the suit for recovery of possession, can be said to be within limitation. 16. The appellant executed an agreement of sale, Ex.A1, in favour of the respondent on 22.09.1989. The total consideration for the land was about Rs.15,000/-. Advance of Rs.500/- was paid. Two months time was stipulatedfor completion of the transaction. 16. The appellant executed an agreement of sale, Ex.A1, in favour of the respondent on 22.09.1989. The total consideration for the land was about Rs.15,000/-. Advance of Rs.500/- was paid. Two months time was stipulatedfor completion of the transaction. Deviating from the time schedule, appellant received Rs.5,000/- in the year 1990 and a further sum of Rs.1,500/- in the year 1994. It is not in dispute that the possession of the property was to be delivered after the entire consideration is paid and at the time of execution of the sale deed. Every facet of the contract was reduced into writing. 17. The respondent, however, constructed a house on the suit plot in the year 1995. Though he pleaded that construction was made earlier thereto, the record does not support him. It needs to be mentioned that the construction made by him at the suit site was nothing but extension of the construction made by him on eastern side of the suit plot. The Municipal Tax Receipts and Electricity Bills relied upon by him were for the entire plot and not parts thereof. Further, the date of construction virtually becomes inconsequential,as long as the possession was taken without permission of the appellant and contrary to the recitals in the agreement. 18. While the appellant filed the suit for recovery of possession, the respondent filed the suit for specific performance in respect of the same property. If the relief of specific performance is granted, the suit for recovery of possession becomes redundant. Similarly, in case, the respondent is held not entitled for the relief of specific performance, he would naturally be under obligation to redeliver the possession of the property. Therefore, the entire dispute turns around the entitlement of the respondent for the relief of specific performance. 19. The first question framed by this Court is referable to Section 16 (c) of the Specific Relief Act (for short, “the Act”). The provision mandates that a plaintiff in a suit for specific performance must plead and prove that he was and continues to be ready and willing to perform his part of the contract. Through a catena of judgments, the Supreme Court held that the readiness and willingness must be continuous, commencing from the day on which the execution of the sale deed became due. Through a catena of judgments, the Supreme Court held that the readiness and willingness must be continuous, commencing from the day on which the execution of the sale deed became due. It has already been mentioned that the balance of consideration was required to be paid within two months from the date of agreement. Admittedly, the amount was not paid by that time. The excuse pleaded by the respondent was that the appellant did not get the site measured. This plea is belied from the fact that he paid a sum of Rs.5,000/- in the year 1990 and Rs.1,500/- in the year 1994. If the measurement was so essentially a condition and that it cannot be ignored, there was no occasion for the respondent to pay the consideration in different spells, spread over four years. 20. Assuming that the consideration was paid without prejudice to his right to insist on measurement, he cannot still insist on measurement of the site, once the respondent has taken the possession of the property and constructed the house. The possession of the plot was taken in the year 1992 according to the respondent, but in the year 1995 according to the appellant. Either way, once the possession was taken, he ought to have paid the balance of consideration and insisted on execution of the sale deed. The alleged failure on the part of the appellant to measure the suit site was pleaded as an excuse for not complying with Section 16 (c) of the Act. Therefore, the respondent, the purchaser under agreement of sale who took possession of the property, was disentitled from taking the plea that the appellant did not perform his part of the contract, viz., to get the site measured. 21. The second question is as to the entitlement of the respondent for the relief of specific performance. Section 20 of the Act itself makes it amply clear that the relief is equitable in nature and a Court has the discretion to refuse it, even if the necessary ingredients are proved. The provision also sounds note of caution that the exercise of discretion must not be arbitrary. The Court is required to keep the interest of both the parties in view and if it is found that the plaintiff in a suit of this nature acted in a manner, which is not bone fide, the relief can certainly be denied. 22. The provision also sounds note of caution that the exercise of discretion must not be arbitrary. The Court is required to keep the interest of both the parties in view and if it is found that the plaintiff in a suit of this nature acted in a manner, which is not bone fide, the relief can certainly be denied. 22. In the instant case, the terms of the contract are reduced into writing. Important among the terms, have already been referred to. Delivery of possession happens to be fundamental, in all transactions of this nature. Under Ex.A1, the possession was to be delivered after the entire consideration is paid and while executing the sale deed. The respondent did not dispute that he has not paid the entire consideration, and the very fact that the suit is filed for specific performance discloses that the sale deed was not executed. Hence, there was no basis for him to assume possession. The plea raised by him that the appellant gave oral consent for taking possession of the suit site cannot be believed for two reasons. First is that the appellant categorically denied the averment. Second is that when the parties have reduced every facet of the transaction including the one of the payment of Rs.500/- as advance and Rs.1,500/-at a later point of time into writing, it is just unbelievable that an important event of taking possession would occur without any written endorsement or agreement. 23. By its very nature, an equitable relief requires the person claiming it to be fair, reasonable and trustworthy. A plaintiff would disentitle himself from claiming such relief, if he has flout the terms of the very agreement, which he seeks to enforce, with impunity. A person cannot be permitted to reap the benefits of a transaction partly through his unilateral acts, and to approach a Court of law for the balance of it. A plaintiff in a suit of this nature must prove his bona fides, before he seeks the assistance of the Court to compel the other person to perform his part of the obligation. It is not without reason that relief of specific performance is treated as equitable. In the ordinary course of things, if a party to a contract commits breach of terms thereof, the aggrieved party can certainly institute proceedings for damages. It is not without reason that relief of specific performance is treated as equitable. In the ordinary course of things, if a party to a contract commits breach of terms thereof, the aggrieved party can certainly institute proceedings for damages. Further, the concerned party may choose to pay damages than to abide by the terms of contract, may be for variety of reasons. Grant of relief of specific performance would curtail the freedom of a party to the agreement to rescind from it. Such a course can be adopted only when the persons who seek the relief convince the Court about their bona fides and prove that the entire blame for not taking the contract to its logical end, is with the other party. Once it has emerged that the respondent in this case has flouted the terms of the contract and highhandedly entered the possession of the suit plot taking advantage of the fact that he owns the property in the immediate neighbourhood, he is not entitled for the relief of specific performance. 24. Now remains the last question. The limitation for filing of a suit for specific performance is three years from the date of refusal by the other party to perform his part of the contract, under Article 54 of the schedule to Limitation Act. There are instances where Courts have dismissed the suits though they are filed within the period of three years, if it is found that in interregnum between the date of agreement and the date of filing of the suit, certain events such as steep increase in the value of the property, acts of illegality committed by the parties etc., have taken place. Further the time stipulated in the agreement for completion of the transaction would also assume significance. For instance, if a very short period for completion of the transaction, as in the instant case, was stipulated, a party cannot be permitted to wait for three years and institute the suit at leisure. The facts such as that the property was agreed to be sold to him on account of acute necessity cannot be ignored. 25. The agreement in the instant case was executed in the year 1989 and two months was stipulated for the payment of consideration. The facts such as that the property was agreed to be sold to him on account of acute necessity cannot be ignored. 25. The agreement in the instant case was executed in the year 1989 and two months was stipulated for the payment of consideration. The appellant who is a Doctor by profession and living at different place has exhibited generosity to receive small sums as part consideration even after four years. Taking advantage of his absence, the respondent entered the possession of the plot and constructed a house. The very plea raised by the respondent that the appellant failed to perform his part of the contract, viz., to get the land measured, ought to have been a cause of action for him to file the suit at least in the year 1994, when a sum of Rs.1,500/-was paid. The appellant got issued a notice few years thereafter requiring the respondent to vacate the premises. At least then, suit could have been filed. It was only two years after the appellant filed the suit for eviction, that the respondent filed the suit for specific performance. The suit was patently barred by limitation. 26. For the foregoing reasons, the Second Appeals are allowed and the common Judgment and Decrees passed by the lower appellate Court in the respective appeals are set aside. Consequently, the decrees passed by the trial Courts in O.S.Nos.899 of 2000 and 174 of 2002 are sustained. There shall be no order as to costs.