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2016 DIGILAW 430 (ORI)

Pinky Pradhan v. Pratap Kishore Das

2016-06-20

K.R.MOHAPATRA

body2016
JUDGMENT : K.R. Mohapatra, J. 1. The unsuccessful plaintiff in CS No. 431 of 2007(1) has filed this appeal assailing the judgment and decree dated 18.02.2010 and 04.03.2010 respectively passed by the learned Civil Judge (Senior Division) 1st Court, Cuttack. The suit was filed for specific performance of contract and for permanent injunction. 2. The plaint case in brief reveals that the suit property more fully described in the plaint schedule appertaining to Khata No. 326/212, plot No. 2/2205 to an extent of Ac.0.04 decimal out of Ac.0.26 decimal situated at Mouza: Bidyadharpur (Cuttack Sadar), now Bidanasi in the district of Cuttack (Lot No. 1) and land appertaining to Khata No. 474/60, plot No. 516/1726 to an extent of Ac.1.00 decimal situated in Mouza: Patia in new capital, Bhubaneswar now Chandrasekharpur in the district of Khurda (Lot No. 2). Defendant No. 1 was the owner of the suit property. He entered into an agreement with the plaintiff (Ext.3) for sale of the suit land (Lot Nos. 1 and 2) on 02.12.2005 for a consideration of Rs.1,35,00,000/- out of which the defendant No. 1 received an amount of Rs.3,00,000/- towards part consideration as advance on the date of agreement. It was also agreed between them that the sale deed would be executed upon receipt of the balance consideration. Subsequently, the plaintiff paid further part consideration of Rs.2.50 lakh and defendant No. 1 gave an endorsement to that effect acknowledging receipt of the money (Ext.3/a). The plaintiff being ready with rest consideration amount approached the defendant No. 1 on 20.06.2006, but the defendant No. 1 deferred the matter. After some days, the defendant No. 1 expressed that he was ready only to sell the lands situated at Bhubaneswar (Lot No. 2) and demanded the entire consideration money for the same. The plaintiff thereafter tried her best to contact the defendant No. 1 and convince him for sale of the land at Cuttack and Bhubaneswar but failed. Left with no other option, she issued a lawyer’s notice on 22.09.2007 to defendant No. 1 (Ext.4) expressing her readiness and willingness to execute the sale deed on payment of the balance consideration amount. A few days after, plaintiff received the reply from defendant No. 1 (Ext.6) through his lawyer intimating that he had already executed a nominal sale deed in favour of defendant No. 2. A few days after, plaintiff received the reply from defendant No. 1 (Ext.6) through his lawyer intimating that he had already executed a nominal sale deed in favour of defendant No. 2. The defendant No. 1, however, is ready to sell his Bhubaneswar property to the plaintiff on payment of the entire consideration money as agreed upon taking consent of defendant No. 2. Since the defendant No. 1 committed breach of contract and did not act upon the agreement under Ext.3, the suit was filed for the aforesaid relief. 3. Defendant No. 1 admitting execution of Ext.3 in his written statement contended that after execution of the agreement for sale, the plaintiff remained silent. She also failed to pay the balance consideration amount within the stipulated period and did not take any step for registration and execution of the sale deed. The defendant No. 1 being in requirement and in urgent need of money executed a nominal sale deed in favour of defendant No. 2 in respect of the property at Bhubaneswar on receipt of Rs.5.00 lakh towards consideration. He further contended that in reply to the legal notice of the plaintiff, the defendant No. 1 had clearly expressed his willingness to execute the sale deed with consent of defendant No. 2 on receipt of the balance consideration money in respect of Bhubaneswar property, but the plaintiff didn’t show any interest or responded to the same. Thus, he contended that the suit is liable to be dismissed. Defendant No. 2 resisted the claim of the plaintiff by filing written statement. He contended that the suit was not maintainable in absence of any of enforceable legal right, lack of jurisdiction of the Court and being barred by limitation. He further contended that Ext.3 is a forged and fabricated document. He is a bona fide purchaser for value of the suit schedule property situated at Bhubaneswar. He had no knowledge or notice about Ext.3 when he purchased the property from defendant No. 1 on 16.11.2006 by virtue of a valid registered sale deed. On and from the date of sale, i.e., 16.11.2006, he has been in possession and enjoyment of the suit property. The plaintiff in collusion with the defendant No. 1 had manufactured Ext.3 after execution of the sale deed dated 16.11.2006. Thus, he prayed for dismissal of the suit. 4. On and from the date of sale, i.e., 16.11.2006, he has been in possession and enjoyment of the suit property. The plaintiff in collusion with the defendant No. 1 had manufactured Ext.3 after execution of the sale deed dated 16.11.2006. Thus, he prayed for dismissal of the suit. 4. On consideration of the rival pleadings of the parties, learned Civil Judge framed the following issues:- (i) Whether the suit is maintainable under law? (ii) Whether there is cause of action to bring the suit? (iii) Whether the suit is barred by law of limitation? (iv) Whether this Court has jurisdiction to try the suit? (v) Whether the defendant No. 1 executed an agreement dated 02.12.2005 for sale of the suit properties in favour of the plaintiff and if so whether the above agreement is valid and enforceable under law? (vi) Whether the plaintiff is entitled for execution and registration of a sale deed in her favour in respect of the suit property? (vii) Whether the plaintiff is entitled for the relief of permanent injunction as prayed for? (viii) To what other reliefs the plaintiff is entitled under law? 5. The plaintiff examined four witnesses including herself as PW-1 and produced certain documents marked as Ext.1 to Ext.9. The defendants did not examine any witness. However, defendant No. 2 tendered certain documents which were marked as Ext. ‘A’ to Ext. ‘D’. On consideration of the materials available on record including the pleadings and evidence, the learned Civil Judge, while answering vital issue Nos. 5 and 6, came to the conclusion that there is no positive evidence before the Court to hold that the plaintiff was ever ready with the balance amount for execution and registration of the sale deed. Further, he held that defendant No. 1 should refund the amount received by him towards part consideration, i.e. Rs.5.50 lakh. He answered issue No. 4 in favour of the plaintiff holding that the Court has jurisdiction to try the suit and the suit was not barred by limitation. In view of his finding in respect of issue Nos. 5 and 6, learned Civil Jude refused to grant relief of permanent injunction and answered issue No. 7 in the negative. Thus, issue Nos. 5, 6 and 7 are vital issues to be considered in this appeal. Though notice has been held to be sufficient on respondent Nos. In view of his finding in respect of issue Nos. 5 and 6, learned Civil Jude refused to grant relief of permanent injunction and answered issue No. 7 in the negative. Thus, issue Nos. 5, 6 and 7 are vital issues to be considered in this appeal. Though notice has been held to be sufficient on respondent Nos. 1 and 2 vide order dated 13.12.2012, but respondent No. 2 preferred not to contest the appeal. 6. Execution of the agreement for sale (Ext.3) is not in dispute; thus, the question arises whether it is enforceable in law. The defendant No. 2 in his written statement specifically pleaded that Ext.3 is an outcome of collusion between the plaintiff and defendant No. 1 and a fraud has been played on him. The agreement for sale was manufactured after the sale deed dated 16.11.2006 was executed in his favour, but he has not come to the witness box to testify his statement. Decision of the Hon’ble Supreme Court in the case of Prem Sagar vs. Shri Darbari Lal and Ors. reported in AIR 1999 SC 1341 makes it abundantly clear that non-examination of the defendant to testify his version in the written statement is fatal to his case and adverse inference can be drawn against him under Section 114 of the Indian Evidence Act, 1872. Admittedly, defendant No. 2 has not entered witness box to testify his version. The defendant No. 2 has been arrayed as respondent No. 2 in this appeal. In spite of valid notice he preferred not to contest the appeal and remained absent. Thus, the case of defendant No. 2 that the agreement for sale (Ext.3) is an outcome of collusion between the plaintiff and defendant No. 1 and a fraud has been played on him cannot be believed. 7. Granting of a decree of specific performance of contract is a discretionary relief. Section 20 of the Specific Relief Act, 1963 provides that jurisdiction to decree a Specific Performance of Contract is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so. Sub-section (2) of Section 20 provides the cases in which the Court may properly exercise discretion not to decree specific performance. Section 20 of the Specific Relief Act, 1963 provides that jurisdiction to decree a Specific Performance of Contract is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so. Sub-section (2) of Section 20 provides the cases in which the Court may properly exercise discretion not to decree specific performance. The plaintiff in the plaint has categorically pleaded that she is ready and willing to perform her part of contract and in furtherance thereto she had issued notice to defendant No. 1 under Ext.6 showing willingness to perform her part of the contract. The learned Trial Court disbelieved such plea of the plaintiff on the ground that there is nothing in her evidence to show that she had remitted the balance amount to the vendor (defendant No. 1) or has deposited the balance consideration amount with the bank before filing the suit. There is also no evidence to the effect that plaintiff had ever offered the sale consideration to the defendant No. 1 and showed her willingness for execution and registration of the sale deed. There is no documentary evidence to show that the plaintiff had such sufficiency of funds and as such she was ready and willing to perform her part of the contract. From the evidence of the plaintiff (PW-1), it appears that she got married on 27.11.2003 and till then she had no source of income of her own. After her marriage, she started Potato, Onion, Garlic and Ginger business at Chhatrabazar in 2004. She is also an income tax assessee. However, learned Trial Court opined that such piece of evidence is not sufficient to believe that her Potato, Onion etc. business for a short period could earn her a huge amount, i.e., Rs.1,35,00,000/- to purchase the suit land and in fact she was ready with the said consideration amount to execute the sale deed. Learned Trial Court further held that though she was an income tax assessee, she had not proved her income to be sufficient to purchase the suit property. It is also held by the learned Civil Judge that she had not gone to the Registration Office for getting the sale deed executed and registered and the Vendor (defendant No. 1) did not turn up. It is also held by the learned Civil Judge that she had not gone to the Registration Office for getting the sale deed executed and registered and the Vendor (defendant No. 1) did not turn up. Thus, he came to the conclusion that the Vendee (the plaintiff) did not prove the account with the bank for the period from the date of execution of the agreement for sale till the date of filing of the suit, which would be strong enough to indicate that she was neither ready nor willing to discharge her obligation. 8. Before assessing the correctness of the findings of the learned Trial Court, sub-sections (2) (3) and (4) of Section 20 of the Specific Relief Act has to be gone into:- 20. Discretion performance — as to decreeing specific performance:- (1)………. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance:- (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff; (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.—Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.—The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.” Thus, the language of sub-sections (2), (3) and (4) makes it clear that the discretion to refuse specific performance of contract is not exclusive, but the same is inclusive in nature. Hon’ble Supreme Court in the case of Sardar Singh vs. Krishna Devi (Smt.) and another, reported in 1994 (4) SCC 18 , made it clear that circumstances specified in sub-section (2) Section 20 of the Act are only illustrative and not exhaustive. The Court could take into consideration, the circumstances in each case and the conduct of the parties as well as the respective interest under the contract while exercising such jurisdiction. In Sardar Singh (supra), Hon’ble Supreme Court at paragraph-14 held as under:- “14. The next question is whether the courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.” 9. Mr. Mishra, learned Senior Advocate strenuously urged that learned Trial Court failed to appreciate the meaning of the word judicial discretion which must be sound, fair and reasonable and must not be arbitrary or discriminatory. Learned Court below having found that defendant No. 1 is liable to refund the consideration money with 6% interest per annum makes it clear that the agreement for sale was validly executed. He relied upon a decision reported in AIR 2006 SC 2172 (Mst. Learned Court below having found that defendant No. 1 is liable to refund the consideration money with 6% interest per annum makes it clear that the agreement for sale was validly executed. He relied upon a decision reported in AIR 2006 SC 2172 (Mst. Sugani vs. Rameshwar Das and Anr.), wherein the Hon’ble Supreme Court has held as under:- “….It is thus clear that an averment of readiness and willingness in the plaint is not a mathematical formula which should only be in specific words. If the averments in the plaint as a whole do clearly indicate the readiness and willingness of the plaintiff to fulfil his part of the obligations under the contract which is the subject-matter of the suit, the fact that they are differently worded will not militate against the readiness and willingness of the plaintiff in a suit for specific performance of contract for sale." Thus, he argued that scrutiny of the pleadings of the plaintiff as well as evidence makes it abundantly clear that she was ready and willing to perform her part of the contract. He heavily relied upon endorsement Ext.3/c made by the defendant No. 1 on Ext.3 and also Ext.6 for that purpose. Relying upon endorsement made on Ext.3, i.e., Ext.3/c, he submitted that to meet the urgent need of the defendant No. 1, the plaintiff had remitted the amount towards part payment of the consideration. Further, Ext.4 in all unambiguous terms spelt out that she was ready and willing to perform her part of the contract and requested the defendant No. 1 to execute the sale deed at an early date. He also relied upon a decision of the Hon’ble Supreme Court in the case of Prakash Chandra vs. Angadlal And Ors. reported in AIR 1979 SC 1241 and submitted that the ordinary rule that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. In the instant case, he emphatically submitted that the plaintiff had not prayed for any compensation or refund of money in lieu of specific performance. He relied upon provision sub-section (2) of Section 22 of the Act and submitted that no relief for refund of the consideration amount could have been granted by the Court unless it has been specifically claimed. He relied upon provision sub-section (2) of Section 22 of the Act and submitted that no relief for refund of the consideration amount could have been granted by the Court unless it has been specifically claimed. The Court without assessing the relevant materials on record mechanically exercised its discretion under Section 20 of the Act when no case is made out for the same. Further, learned trial Court exceeded its jurisdiction in directing refund of the consideration money, instead of granting relief of specific performance of contract. 10. Mr. Sarkar, learned counsel for the respondent No. 1 (defendant No. 1) supported the impugned judgment and decree and submitted that an agreement for sale was executed on 02.12.2005 (Ext.3). Thereafter, the plaintiff did not come forward to execute the sale deed. Being in urgent need of money he executed the sale deed in favour of defendant No. 2 on 16.11.2006 (Ext.C). However, Mr.Sarakar submitted that the sale deed in favour of the defendant No. 2 is a nominal one and he is ready and willing to sell the property at Bhubaneswar (Lot-2 of the suit schedule) to the plaintiff for the agreed amount under Ext.3 after taking consent from defendant No. 2. Though defendant No. 2 did not examine any witness on his behalf he had produced certain documents which were marked as exhibits without objection. Ext.B is the certified copy of the ROR in respect of Khata No. 474/3142 which stood recorded in his name and Ext.D to Ext.D/1 are the rent receipts. Thus, it appears that after execution of the sale deed (Ext.C) in his favour the defendant No. 2 had already mutated his name in respect of Lot No. 2 of the suit land and has been paying rent in respect of the said land. There is nothing on record which suggests that defendant No. 2 had knowledge of Ext.3 at the time of execution of sale deed under Ext.C. Mr. Mishra,, learned Senior Advocate relying on a decision of this Court in the case of Dinesh Chandra Guha vs. Satchidananda Mukherji and others, reported in AIR 1972 Ori. 235 and decision of the Hon’ble Supreme Court of India in the case of Dr. Govinddas and Anr. Vs. Shrimati Shantibai and Ors. Mishra,, learned Senior Advocate relying on a decision of this Court in the case of Dinesh Chandra Guha vs. Satchidananda Mukherji and others, reported in AIR 1972 Ori. 235 and decision of the Hon’ble Supreme Court of India in the case of Dr. Govinddas and Anr. Vs. Shrimati Shantibai and Ors. reported in AIR 1972 SC 1520 submitted that a transferee in good faith must prove that he had no knowledge of previous contract for sale with the plaintiff. So, the burden of proof lies with the subsequent purchaser to prove his bona fide. The materials on record shows that defendant No. 2 has not made any reasonable enquiry with regard to any previous transaction with regard to the suit land. Therefore, defendant No. 2 cannot be treated to be a bona fide purchaser. There can be no dispute about the legal position as held in Dinesh Chandra Guha (supra) that the initial onus rests on the subsequent transferee to prove the circumstances which will permit him to retain the benefit under the transfer (Ext.C). Thus, in the instant case, the initial burden always lies on the defendant No. 2 to prove that he was the bona fide purchaser to protect his right under Ext.C under Section 27 (1)(b) of the Act. Though it is pleaded by defendant No. 2 that he had no knowledge of previous agreement for sale between plaintiff and defendant No. 1 (Ext.3), he didn’t enter into the witness box to testify his statement. However, on perusal of Ext.C, which is marked without objection, it is apparent that there is no recital about previous agreement for sale (Ext.3). Further, neither the pleadings of defendant No. 1 nor the oral as well as documentary evidence available on record suggest that the defendant No. 2 had knowledge of Ext.3. The question of onus of proof is certainly important at early stages of a case. It may also assume importance, where no evidence is at all led by either side on the issue involved. But, the consideration of onus loses its importance, where however, evidence has been led by the contesting parties on the issue involved. In that event, abstract consideration of onus are out of place. Truth or otherwise of the case, must be adjudged on the evidence led by the parties. But, the consideration of onus loses its importance, where however, evidence has been led by the contesting parties on the issue involved. In that event, abstract consideration of onus are out of place. Truth or otherwise of the case, must be adjudged on the evidence led by the parties. This view gets support from a decision of the Hon’ble Supreme Court in the case of Kalwa Devadattam and others vs. The Union of India and others, reported in AIR 1964 SC 880 , at paragraph-11 held as under:- “11. The question of onus probandi is certainly important in the early stages of a case. It may also assume importance where no evidence at all is led on the question in dispute by either side; in such a contingency the party on whom the Onus lies to prove a certain fact must fail. Where however evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place; truth or otherwise of the case must always be adjudged on the evidence led by the parties.” Similar view has also been taken in the case of Union of India and Ors. Vs. Sugauli Sugar Works (P) Ltd. reported in AIR 1976 SC 1414 , wherein the Hon’ble Supreme Court held that the question of onus is not important when the entire evidence is before the Court. 11. Keeping in view the ratio decided (supra) as well as the discussions made above, it can be safely held that the defendant No. 2 had no knowledge of Ext.3 on the date of execution of sale deed Ext.C and he is a purchaser of the suit property in good faith. Thus, he is entitled to the protection under Section 27 (1) (b) of the Act. 12. To testify the veracity of ready and willingness of the plaintiff for execution of the sale deed pursuant to the agreement under Ext.3, this Court perused the pleadings, evidence, more particularly Ext.4, i.e., the legal notice issued by the plaintiff to the defendant No. 1. She has stated therein that she is ready and willing to purchase the suit land by paying the balance consideration amount and the defendant No. 1 has been avoiding to perform his part of the contract. She has stated therein that she is ready and willing to purchase the suit land by paying the balance consideration amount and the defendant No. 1 has been avoiding to perform his part of the contract. Exhibit 4 further reveals that he had sent a draft sale deed for that purpose and asked the defendant No. 1 to execute the same within fifteen days from the date of receipt of the notice. In reply to the same, the defendant No. 1 vide Ext.6 communicated her that the plaintiff had paid Rs.5.50 lakh in two installments and promised to arrange money and intimate the date for registration of the sale deed. But, the plaintiff did not inform thereafter regarding her readiness to get the sale deed executed. Thus, being in urgent need of money, defendant No. 1 had executed a nominal sale deed in favour of defendant No. 2. Accordingly, he intimated the plaintiff that if she pays the entire balance consideration at a time to the defendant No. 1 he would fix the date for registration of the sale deed with consent of Managing Director of defendant No. 2, namely, Amitabh Mishra in whose name the nominal sale deed has been executed and registered. Thereafter, the plaintiff neither took any step nor intimated her readiness to pay the entire balance consideration to execute the sale deed in respect of Lot No. 2. 13. As it appears from the evidence of PW-1 that she had no income of her own till 2003. She started her business on Potato, Onion, Garlic and Ginger in 2004. She became income tax assessee in the year 2005. Thus, it would be highly improbable on the part of the plaintiff to arrange such a huge amount to the tune of Rs.1,29,50,000/- within a short span of one year by which date she issued a notice under Ext.4, more so, when no documentary evidence is available showing her readiness. Further, she did not also reply to the annexure-6 showing her ready and willingness to pay the entire consideration amount at a time to the defendant No. 1. That shows that she was not ready at the time of issuance of notice under Annexure-4 to execute and register the sale deed on payment of balance consideration amount. 14. Further, she did not also reply to the annexure-6 showing her ready and willingness to pay the entire consideration amount at a time to the defendant No. 1. That shows that she was not ready at the time of issuance of notice under Annexure-4 to execute and register the sale deed on payment of balance consideration amount. 14. No doubt, the discretion to be exercised by a Court should be sound, fair, reasonable and should not suffer from any arbitrariness. From the discussions made above, and principles laid down in the case of Mst. Sugani (supra) and Prakash Chandra (supra), I find that learned trial Court has committed no error in exercising its discretion under Section 20 of the Act and the same does not warrant any interference. Apparently, no prayer for refund of the consideration amount was made by the plaintiff; however, the Court in exercise of its discretion has granted that relief. Section 22(2) of the Act specifically bars grant of such relief unless it is prayed for. However, proviso to sub-section (2) makes it clear that where the plaintiff has not claimed any relief as enumerated under Clause-(a) and (b) of sub-section (1) of Section 22 of the Act, the Court shall at any stage of the proceeding allow him (the plaintiff) to amend the plaint on such terms as may be just for considering the claim of such relief. Thus, this Court feels it proper to remit the matter to the learned trial Court for the limited purpose to give an opportunity to the plaintiff to amend the plaint for grant of relief under Clause-(b) of sub-section (1) of Section 22 of the Act. If such an application is filed within a period of fifteen days from the date of appearance of the parties, learned Civil Judge shall do well to amend the plaint and proceed in accordance with law. 15. With the aforesaid modification to the impugned judgment and decree the appeal stands disposed of.