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Madhya Pradesh High Court · body

2013 DIGILAW 856 (MP)

Kaluram Agarwal v. Dinesh Kumar

2013-07-24

M.K.MUDGAL

body2013
JUDGMENT By this common judgment both the appeals No. 51/03 filed by the plaintiff, Kaluram and appeal No. 89/03 filed by the defendant No. 1, Dinesh Kumar Agarwal, arising out of the same judgment dated 11/11/2002 passed by the Court of 3rd Additional District Judge, Gwalior in Civil Suit No. 47A/95 filed by the plaintiff are being decided. 2. The said suit has been partly decreed in favour of the plaintiff for recovery of Rs. 10,000/- along with compound interest @ 12% per annum dismissing the suit of specific performance of the contract against which the appeal No. 51/03 has been filed. 3. Appeal No. 89/03 has been filed by Dinesh Kumar Agarwal, being aggrieved by the finding of the impugned judgment and decree regarding recovery of Rs. 10,000/- along with the compound interest from him. 4. The undisputed facts are that the disputed house No. 7-A described in para 1 & 2 of the plaint owned by the defendant No. 1, Dinesh Kumar Agarwal who executed an agreement to sell the disputed house on 26/12/1992 to the plaintiff for consideration of Rs. 1,95,000/- and sum of Rs. 10,000/- was received by him as advance vide Account Payee Cheque dated 26/12/1992. It is also an undisputed fact that as per terms and conditions of the said agreement the permission under Section 26 of the Urban Land Ceiling Act, 1976 for the sale of the property was to be obtained by the vendor at his own cost. The vendor would execute the sale deed of the property in favour of the vendee or in the name of third party within three days from the date of permission for sale. If the permission for sale under the Urban Land Ceiling Act was received early within the time limit for execution of the sale deed and the period of registration of sale deed would be sixty days from the date of agreement. The actual possession of the house would be delivered by the vendee at the time of registration after due measurement. 5. The actual possession of the house would be delivered by the vendee at the time of registration after due measurement. 5. From para 5 and 6 of the plaintiff Kalu Ram's (PW1) statement and para 4, 5 and 6 of the defendant Dinesh Kumar's (DW1) statement and para 1, 3 and 4 of the defendant Ram Babu Goyal's (DW3) statement, it has undisputedly come on record that before contracting to sell the disputed property on 26/12/1992 by the defendant No. 1 Dinesh Kumar Agarwal to the plaintiff, the defendant No. 1, Dinesh Kumar Agarwal had agreed to sell the entire house to the defendant No. 2 Smt. Shushila wife of plaintiff's younger brother Ram Babu Agarwal, defendant No. 3 for consideration of Rs. 5,75,000/- and executed a document of agreement for sale Ex. P-13. When the defendant No. 2 and 3 were unable to get the sale deed executed in their favour in the stipulated time, the contract for sale Ex. P-1 was made in favour of plaintiff with the consent of the defendant No. 2 and 3 for selling to him the half portion of the house. The sale deed dated 19/09/1993 Ex. P-10 was executed by the defendant No. 1 in favour of defendant No. 2. 6. In brief, facts of the plaint are that the plaintiff had been ready and willing to perform the contract as per terms and conditions of the contract Ex. P-1. The plaintiff has further pleaded that in furtherance of agreement of sale he applied for loan of Rs. 1,85,000/- for paying the remaining part of the consideration which was sanctioned on 10/01/1993 by his employer, the Dena Bank and pay order bearing No. 3299/147 dated 13/03/1993 was also issued for the sum of Rs. 1,85,000/- in favour of the defendant. The plaintiff gave a notice dated 04/04/1993 Ex. P-7 to the defendant to get the registered sale deed executed in his favour in respect of the disputed property at his expenses. However, the defendant did not perform the contract. On the other hand, the defendant No. 1 had executed the sale deed dated 19/09/1993 in favour of the defendant No. 2 who had full knowledge of the existence of sale agreement dated 26/12/1992 in favour of the plaintiff. In view, of the facts the plaintiff filed a suit for specific performance of the contract. 7. On the other hand, the defendant No. 1 had executed the sale deed dated 19/09/1993 in favour of the defendant No. 2 who had full knowledge of the existence of sale agreement dated 26/12/1992 in favour of the plaintiff. In view, of the facts the plaintiff filed a suit for specific performance of the contract. 7. Defendant No. 1 denying the allegations of the plaint has submitted that he had been always ready and willing to perform the contract. After obtaining the permission under the Urban Land Ceiling Act he requested the plaintiff time and again for performance of the contract and also gave a notice to him for the same. Nonetheless the plaintiff raised some objections and did not get the contract executed. The defendant No. 1 has further pleaded that after cancellation of the said contract he executed a sale deed in favour of the defendant No. 2 who is wife of plaintiff's younger brother, defendant No. 3 and further has added that he had not committed any breach in performance of the contract. The trial Court has committed the mistake decreeing the suit for payment of money along with compound interest. 8. Defendants No. 2 and 3 also denying the allegations made in the plaint have submitted that they are bonafide purchaser. They have further pleaded that plaintiff was not ready for getting the sale deed executed in his favour from the defendant No. 1 and so defendant No. 1 Dinesh Kumar Agarwal canceled the agreement for sale executed in favour of the plaintiff. Thereafter, defendant No. 2 purchased the disputed house after paying the agreed consideration to the defendant No. 1. They have further submitted that defendant No. 2 purchasing the house secured its possession given from the defendant No. 1. 9. Learned Trial Court after framing issues and after recording the evidence of both the parties and having discussed the evidence has dismissed the suit for specific performance of the contract Ex. P-1 and only decreed the suit for payment of Rs. 10,000/- with compound interest as stated earlier. 10. The following issues crop up for consideration in this appeal:- (i) Whether, the plaintiff had been ready and willing to perform the contract of sale Ex. P-1. (ii) Whether the suit decreed regarding the payment of Rs. 10,000/- along with compound interest is not based on proper reasonings. 11. 10,000/- with compound interest as stated earlier. 10. The following issues crop up for consideration in this appeal:- (i) Whether, the plaintiff had been ready and willing to perform the contract of sale Ex. P-1. (ii) Whether the suit decreed regarding the payment of Rs. 10,000/- along with compound interest is not based on proper reasonings. 11. The appellant has filed an application I.A. No. 8201/10 under order 41 rule 27 of the C.P.C. for taking an additional evidence on record a photo copy of bank draft dated 13/03/1993 issued by Dena Bank, Gwalior in favour of defendant No. 1 or payment to the same as part consideration of the contract Ex. P-1. Learned counsel for the appellant placing reliance on the judgment North Eastern Railway Vs. dead Bhagwan Das by his LR's (2008) 8 SCC 511 , State of Rajasthan Vs. T.N. Sahani & ors. (2001) 10 SCC 619 and Nawab Saheb Vs. Firoz Ahmed 2002 (3) MPHT 414 has submitted that the additional evidence at the appellate stage may be taken on record. Considering the facts stated in the application and perusing the cited judgments the application is allowed and the document is taken on record. 12. Assailing the findings recorded by the trial Court the learned counsel Smt. Nandita Dube for the appellant submits that the plaintiff had successfully proved his readiness and willingness for performing the contract of sale Ex. P-1 but the learned Trial Court has erred in giving findings against the plaintiff and further adds that the plaintiff after having received the sanction from Dena Bank, Gwalior for grant of loan of Rs. 1,85,000/- sent an information to the same effect to the defendant No. 1 vide notice Ex. P-7 dated 04/04/1993 and requested him to execute the sale deed in his favour as per terms and conditions of the contract Ex. P-1 but the defendant Dinesh Kumar did not do so. Besides, the defendant No. 1 had to seek the permission for sale from the Urban Land Ceiling Department and inform the plaintiff for executing the sale deed in his favour even though he failed to perform his part of the contract. The counsel placing reliance on the following judgments has submitted that the impugned judgment and decree be set aside and suit be decreed in favour of the plaintiff. The judgments are as follows:- (i) Dead Rameshwar Prasad by LR's Vs. The counsel placing reliance on the following judgments has submitted that the impugned judgment and decree be set aside and suit be decreed in favour of the plaintiff. The judgments are as follows:- (i) Dead Rameshwar Prasad by LR's Vs. Basanti Lal (2008) 5 SCC 676 . (ii) Faquir Chand & another Vs. Sudesh Kumari (2006) 12 SCC 146. (iii) Since deceased Rattan Lal through his LR's Vs. S.N. Bhalla & ors. (2012) 8 SCC 659 . (iv) Smt. Swarnam Ramachandran & another vs. Aravacode Chakungal Jayapalan (2004) 8 SCC 689 . (v) Sukhbir Singh & ors. Vs. Brij Pal Singh & ors. (1997) 2 SCC 200. 13. Combating the submissions made on behalf of the appellant, the learned counsel Shri Manoj Gupta for the respondent No. 1 submits that the findings recorded by the learned Trial Court dismissing the suit for specific performance of the contract are based on proper and cogent reasons as the defendant No. 1 after getting the permission Ex D-1 from the concerned department gave the notice, Ex. D-2A along with the copy of the Ex. D-1 to the plaintiff and requested him to get the sale deed executed in his favour but the plaintiff had no money for its execution. The counsel further pleads in his submissions that the defendant was ready and willing to perform the contract and he was not at fault. The learned Trial Court seems to have committed the mistake in passing the decree as regards payment of Rs. 10,000/- with compound interest thereon. 14. The learned counsel, Arvind Dwivedi for respondents No. 2 and 3 submits that the defendant No. 2 is a bonafide purchaser. After the plaintiff's failure to get the sale deed executed in his favour, the defendant No. 1, canceled the contract Ex P-1 and thereafter defendant No. 2 got the sale deed executed in her favour after paying the full consideration to the defendant No. 1. The counsel, therefore, argues that there is no proper reason for the interference in the findings of the Trial Court. 15. The submissions made by both the parties were considered. 16. The execution of agreement to sell Ex. P-1 dated 26/12/92 is not disputed. The counsel, therefore, argues that there is no proper reason for the interference in the findings of the Trial Court. 15. The submissions made by both the parties were considered. 16. The execution of agreement to sell Ex. P-1 dated 26/12/92 is not disputed. The main terms and conditions to be complied by the plaintiff and defendant No. 1 are as follow:- (i) The defendant No. 1 was required to seek permission under section 26 of the Urban Land Ceiling Act for selling the disputed property and intimate to the plaintiff for execution of the sale deed. (ii) The plaintiff had to get the sale deed executed in three days after obtaining the permission and if the permission was not received at the earliest the period for execution of the contract would be sixty days. (iii) The plaintiff was required to take the loan from the bank for paying the consideration to the defendant No. 1 and was to get the sale deed executed in his favour. 17. The plaintiff has made the statement in support of his pleadings and has produced the document. The notice dated 4.4.1993 Ex. P/7 was given by the plaintiff to the defendant, there in, he stated that he got the loan sanctioned for payment of consideration and requested the defendant No. 1 to seek permission from the concerned department and executed the sale deed in his favour apropos of the contract Ex. P/1. The said notice was replied by the defendant No. 1 vide notice dated 24.4.1993 Ex. D-2-A. In this connection, the defendant No. 1 deposing in his statement in para 2 has stated that the plaintiff did not get the sale deed executed after receiving the Ex. D/2-A. The plaintiff has not specifically denied in para 16 of his statement receiving of notice Ex. D/2 A in the cross examination. 18. In this regard the defendant Dinesh Agarwal was cross examined on behalf of the plaintiff in para 7 of his statement, it has come on record that the defendant giving the notice Ex. D-2-A along with copy of Ex. D/1 asked the plaintiff for getting the sale deed executed in his favour. The plaintiff again sent a notice Ex. P/15 dated 1.5.1993 and dated 8.5.1993 Ex. D-2-A along with copy of Ex. D/1 asked the plaintiff for getting the sale deed executed in his favour. The plaintiff again sent a notice Ex. P/15 dated 1.5.1993 and dated 8.5.1993 Ex. P/17 to the defendant No. 1 in which the plaintiff has not alleged that the information regarding required permission for sale was not received by him. On perusal of both the notices Ex. P/15 and Ex. P/17, it is evident that permission letter was not demanded again by the plaintiff as asked by him in Ex. P/7 dated 4.4.1993. In this connection, the learned trial Court considering the evidence in paras 21 and 22 of the impugned judgment has inferred that the letter as regard the permission for sale was received by the plaintiff. The findings given by the trial Court seem to be proper. 19. The defendant No. 1 has tried to say in his pleadings as well as in his statement that he was ready and willing for performance of the contract but after receiving the letter of permission, the plaintiff did not make sincere efforts for getting the sale deed executed in his favour. On the contrary, by giving notice dated 8.5.1993 Ex. P/17 the plaintiff directed the defendant to make the partition wall and closed the windows and ventilators of his house which opened on the disputed property. The contents of Ex. P/17 are as follows: 20. The said notice Ex. P/17 dated 8.5.1993 was given by the plaintiff to the defendant in response to the notice dated 7.5.1993 Ex. P.11 which was sent by the defendant No. 1, thereby the defendant warned the plaintiff that he should get the performance of the contract executed in his favour within 10 days, otherwise the agreement would be cancelled but the plaintiff persisted with his demand referred to above to the defendant No. 1 in his notice dated 18.5.1993 Ex. D/2. On perusal of Ex. P/17 and Ex. D/2 it become clear that plaintiff was persisting the defendant to get the partition wall constructed and windows and ventilators closed of his portion. The condition for making partition wall and closing windows and ventilators was not a part of the contract. In this reference, in para 16 of the plaintiff's statement it is on record that it is true there is no mention in the agreement Ex. The condition for making partition wall and closing windows and ventilators was not a part of the contract. In this reference, in para 16 of the plaintiff's statement it is on record that it is true there is no mention in the agreement Ex. P/1 about closing of windows and ventilators and making partition wall. 21. In view of the facts it is concluded that plaintiff was compelling the defendant to make the construction which was not a condition for performing the contract. The defendant No. 1 was repeatedly requesting the plaintiff to perform the contract but the plaintiff was not read and willing for getting sale deed executed in his favour and he himself was avoiding to perform the agreement Ex. P/1 by imposing arbitrary conditions which were not part of the contract and which the defendant No. 1 was not under any obligation to perform. It is pertinent to mention here that after receipt of the defendant letter dated 7.5.1993 Ex. P/11 the plaintiff did not fix any date and did not inform the defendant No. 1 for getting the sale deed executed in his favour. 22. The provision of Section 16(c) of the Specific Relief Act, 1963 in short "the Act" are as follows: “16 Personal bars to relief- Specific performance of a contract cannot be enforced in favour of a person- (a)-(b) (c) 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, other than terms of the performance of which has been prevented or waived by the defendant." The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemish-less throughout entitling him to the specific relief. The provision imposes a personal bar. The court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief. Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish as the fact by evidence aliunde that he has always been ready and willing to perform his part of the contract. Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish as the fact by evidence aliunde that he has always been ready and willing to perform his part of the contract. These aspect were highlighted in Sugani Vs. Rameshwar Das, (2006) 11 SCC 587 . 23. The learned counsel for the appellant contends that the finding given by the trial Court in para 26 of the judgment are perverse and against the contents of the documents as the document Ex/P/4 and P/5 have not been understood correctly. The arguments were considered. The certificate dated 17.9.98 Ex. P/4 issued by the Dena Bank is related to the payment of Rs. 10,000/- by cheque dated 26.12.1992 which was given by the plaintiff to the defendant No. 1 as earnest money for part consideration of the contract and it is mentioned in the contract for sale Ex. P/1 dated 26.12.1992. 24. Though a photo copy of the bank draft dated 1.7.1992 issued by the State Bank of Indore Branch Gwalior has been produced on record, yet it has neither been exhibited in the evidence by the plaintiff nor has been tendered by the defendant during the cross examination. All the same, no explanation in this regard has been sought from the plaintiff on behalf of the defendant. Where the photo copy of the document was not proved in evidence by either of the party of the case, it could not have been made the basis of findings. 25. The plaintiff has stated in para 2 of his statement that he had got the loan of Rs. 1,85,000/- sanctioned from the Dena Bank and informed the defendant No. 1 about the same vide notice Ex. P/7. The Ex. P/5 dated 10.1.1993 being a loan sanction letter corroborates the plaintiff statement whereby the loan of Rs. 1,85,000/- was sanctioned to the plaintiff. On perusal of the notice dated 4.4.1993 Ex. P/7 it becomes clear that the plaintiff had given the intimation to the defendant No. 1 about the loan having been sanctioned to him for payment of remaining consideration of the contract but on the basis of said fact, it cannot be held that the plaintiff was ready and willing to perform the contract. As discussed earlier the plaintiff was compelling the defendant to make the construction which was not a condition for performance of the contract. As discussed earlier the plaintiff was compelling the defendant to make the construction which was not a condition for performance of the contract. In view of the fact that the defendant No. 1 cannot be blamed for non-performing the contract Ex. P-1. Over and above, the plaintiff did not take steps to get the sale deed executed in his favour for considerable period after receipt of letter dated 7.5.1993 Ex. P/11 sent by the defendant No. 1, who executed the sale deed dated 20.9.1993 Ex. P/10 in favour of the defendant No. 2. It shows that the defendant No. 1 had waited for sufficient time before execution of the sale deed Ex. P.10. 26. As per Section 20 of Specific Relief Act, relief of specific performance is discretionary as held in A.I.R. 2001 SC 2783 A.C. Arulappan Vs. Smt. Ahalya Naik. 27. In the instant case the plaintiff himself was avoiding the performance of the contract. He unnecessarily burdened the defendant No. 1 with conditions which were not a part of the contract before execution of sale deed. In the facts and circumstances of the case, it can be concluded that the learned trial Court has not committed any mistake in refusing the decree for performance of the contract Ex. P/1. The judgment cited on behalf of the appellant do not support his case in any manner, they are based on different facts and circumstances and different from the instant case. 28. The learned counsel for the defendant No. 1 contends that the defendant was ever ready and willing to perform the contract, so the trial Court ought not to have passed the decree for refund of Rs. 10,000/- along with compound interest at the rate of 12% per annum. The submission placed by the learned counsel do not appear to be acceptable in to-to as no clause forfeit for earnest money has been made in the contract Ex. P/1. Besides, the defendant No. 1 do not make any such intention in the letter dated 7.5.1993 Ex. P/11 also. Where the defendant No. 1 had received Rs. 10,000/- as earnest money it was his duty to refund it to the plaintiff with interest as he was getting the benefit of the plaintiff's money. It is true that the trial Court has erred in awarding the compound interest at the rate 12% per annum. P/11 also. Where the defendant No. 1 had received Rs. 10,000/- as earnest money it was his duty to refund it to the plaintiff with interest as he was getting the benefit of the plaintiff's money. It is true that the trial Court has erred in awarding the compound interest at the rate 12% per annum. In the interest of justice, payment of interest at the rate of 12% per annum (Simple) will be justified as held by the Hon'ble Supreme Court in para 9 of the judgment 2003 (11) SCC 17 Aditya Mass Communication (P) Ltd. Vs. A.P. SRTC. 29. Having taken into account, the recorded evidence, this Court comes to the conclusion that findings given by the learned trial Court for rejection of the suit for relief of specific performance of the contract are affirmed and Appeal No. 51/2003 is hereby dismissed. 30. Appeal No. 89/2003 is hereby partly allowed and it is ordered that the rate of interest is changed from the compound to simple. It is clarified that defendant No. 1 would pay simple interest at the rate of 12% per annum instead of compound interest. 31. The remaining conditions shall be same as per trial Court's judgment. 32. The cost of the appeal for the respondent shall be borne by the appellant. Let decree be drown up accordingly.