Research › Search › Judgment

Uttarakhand High Court · body

2016 DIGILAW 527 (UTT)

Kiran Chopra W/o Sri Kamal Chopra v. Kanwal Kishore S/o Sri Jetha Ram

2016-08-30

SERVESH KUMAR GUPTA

body2016
JUDGMENT : 1. By means of this appeal, the challenge herein is to the judgment and order dated 18.7.2011 rendered by the Civil Judge (Sr. Div.), Haridwar in Original Suit No.161/2008, whereby the suit was dismissed. 2. The facts, shorn of unnecessary details, are that a registered agreement for sale was executed on 24.8.2006 between Sri Kamal Chopra (the purchaser of the property in question) and Kanwal Kishore (the owner and vendor of the property). Total consideration of the transaction was Rs. 20,31,000/- and that had been paid vide cheques no. ‘874599’ dated 15.4.2006 worth Rs. 5,00,000/- and another cheque no. ‘886043’ dated 23.8.2006 worth Rs. 5,31,000/-. This amount of Rs. 10,31,000/-, out of the sale consideration, had been paid by Mr. Chopra to the defendant before or at the time of execution of this registered agreement to sale and rest of the consideration worth Rs. 10,00,000/- had to be paid vide two other cheques. These cheques were bearing no. ‘886044’ dated 1.10.2006 worth Rs. 5,00,000/- and another bearing no. ‘886045’ dated 25.12.2006 worth Rs. 5,00,000/-. Thus, the rest of the consideration of the transaction had to be satisfied by the post-dated cheques, as indicated above, and such cheques had been issued at the time of execution of the agreement itself. 3. Other important stipulations, inter alia, in the agreement were that the vendor will harvest the existing crop of sugarcane and the trees of poplar and eucalyptus (as it then was) and after such harvesting, he will execute the sale deed by 15.1.2007 and will receive the remaining consideration of Rs. 10,00,000/- through the cheques, as has been aforementioned. The possession on the property, in question, had to be delivered at the time or after the execution of the registered sale deed. 4. The most crucial was the condition no. 4, as it was depicted in the agreement, that if the purchaser does not get the sale deed executed up to 15.1.2007 after the payment of the cheques worth Rs. 10,00,000/- (Rs. 5,00,000/- + Rs. 5,00,000/-), then in such eventuality, the total earnest money would be deemed to have been forfeited and the transaction will be considered as cancelled. It was further stated that for any reason, whatsoever, if the payment of these two cheques is not received, then also this agreement dated 24.8.2006 shall also be considered to have been cancelled. 5. 5,00,000/-), then in such eventuality, the total earnest money would be deemed to have been forfeited and the transaction will be considered as cancelled. It was further stated that for any reason, whatsoever, if the payment of these two cheques is not received, then also this agreement dated 24.8.2006 shall also be considered to have been cancelled. 5. The defendant vendor submitted the first cheque no. ‘886044’ dated 1.10.2006 in his bank on 3.10.2006, but it was dishonoured by the bank on 12.10.2006 on account of insufficient funds and, accordingly, the information was extended to the defendant. 6. As the last date 15.1.2007 for execution of the sale deed was arriving, so a notice dated 13.1.2007 was sent (through telegram) by the plaintiff asking the defendant to execute the sale deed. It has been averred by the plaintiff that he remained ready for execution of the sale deed and had kept readied two bank drafts of Rs. 5,00,000/- each, total Rs. 10,00,000/-, of the remaining consideration, which were prepared by him on 13.1.2007 itself for making payment to the defendant, but he did not respond in any manner. 7. Further, another notice dated 27.1.2007 was also sent by Mr. Chopra asking the defendant to execute the sale deed, otherwise he shall be compelled to institute the appropriate legal proceedings including the suit for specific performance against him before a competent Court of Law at Haridwar. This notice also went unresponded. Therefore, the plaintiffs (Chopra spouse), who were the second party of the agreement, presented the suit for specific performance of the contract on 15.7.2008, i.e. after one year and six months, asking the relief that a decree of execution of the sale deed be passed in their favour after the payment of Rs. 10,00,000/- as remaining consideration. 8. On 1.7.2010, the relief clause of the plaint was amended to the effect that after decree of the execution of the sale deed, the possession over the property, in question, be also delivered to them. 9. The defendant appeared and resisted the plaint by way of filing the written statement. The sum and substance of all his averments was that since the cheque no. ‘886044’ dated 1.10.2006 worth Rs. 9. The defendant appeared and resisted the plaint by way of filing the written statement. The sum and substance of all his averments was that since the cheque no. ‘886044’ dated 1.10.2006 worth Rs. 5,00,000/- was presented by him on 3.10.2006 in the bank, but it was dishonoured on account of insufficiency of funds, hence as per the stipulations of the registered agreement dated 24.8.2006, the agreement itself has been rescinded because it is the plaintiffs who have violated the terms and conditions of the agreement and further he cannot be asked to refund even the earnest money of Rs. 10,31,000/-, which he had received through other cheques before or at the time of entering into the agreement to sale. 10. Following issues were formulated by the Court below for adjudication: (i) Whether the agreement to sale dated 24.8.2006 was entered into between the parties after receiving the earnest money worth Rs. 10,31,000/- against the total sale consideration of Rs. 20,31,000/-? (ii) Whether the earnest money has been forfeited due to violation of the terms of agreement by the plaintiffs? (iii) Whether the time was the essence of the contract? (iv) Whether the plaintiffs remained ready and willing to get the sale deed executed in their favour as per the terms of agreement dated 24.8.2006? (v) Whether the suit was barred under Section 34 of the Specific Relief Act? (vi) What relief, if any, the plaintiffs are entitled to? (vii) Whether the suit has been instituted with inordinate delay? If yes, its effect? (viii) Whether the Court Fee has insufficiently been paid? Issue no. 1 11. This issue is not disputed because the acceptance of the registered agreement to sale dated 24.8.2006 has been in the written statement of the defendant. Therefore, it has been decided accordingly. Issue no. 2 & 4 12. These are the crucial issues, which will adjudicate the whole controversy between the parties. Learned Trial Judge has decided both these issues in favour of the defendant and such decision has been the cause of dismissal of the suit. 13. Learned Senior Counsel on behalf of the plaintiffs/appellants has taken this Court to the provisions of Section 16(b) of the Specific Relief Act with the submission that no such issue has been framed by the Trial Court in this regard. 14. 13. Learned Senior Counsel on behalf of the plaintiffs/appellants has taken this Court to the provisions of Section 16(b) of the Specific Relief Act with the submission that no such issue has been framed by the Trial Court in this regard. 14. I think that for deciding the controversy in the matter, Section 16(b) and 16(c) are to be read together. The same are reproduced as under: “16. Personal bars to relief.—Specific performance of a contract cannot be enforced in favour of a person— (a)….. (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (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 the performance of which has been prevented or waived by the defendant. Explanation.—For the purposes of clause (c),-- (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.” 15. It has been argued by the learned Senior Counsel that since the plaintiffs had prepared the draft of remaining consideration of Rs. 10,00,000/- on 13.1.2007, so their incapability of performing his part of the contract cannot be inferred by the Trial Judge. But I feel that firstly both these sub-sections (b) and (c) of Section 16 are to be read conjointly and not in isolation. Even if Section 16(b) is read separately, then also the question is not of determining the incapability of the plaintiffs to perform their part of the contract by 15.1.2007, but this incapability is to be seen on or soon after 1.10.2006, when the cheque no. ‘886044’ worth Rs. 5,00,000/- was dishonoured by the bank on 12.10.2006. Even if Section 16(b) is read separately, then also the question is not of determining the incapability of the plaintiffs to perform their part of the contract by 15.1.2007, but this incapability is to be seen on or soon after 1.10.2006, when the cheque no. ‘886044’ worth Rs. 5,00,000/- was dishonoured by the bank on 12.10.2006. It was incumbent upon the plaintiffs to keep the sufficient amount in the bank account so that the cheques issued by them be not dishonoured in any manner, and when such cheque was dishonoured, it tantamount to violation of the essential terms of the contract even under Section 16(b) on the part of plaintiffs because the stipulations in the registered agreement to sale are speaking in so many words that the rest of the consideration of Rs. 10,00,000/- had to be received by the defendant only through those cheques dated 1.10.2006 and 25.12.2006, and not by way of any subsequent draft, whatsoever, at the time of execution of the sale deed. 16. The plaintiffs first time have taken a new case by way of filing the replica on 21.8.2008 that these two cheques were in the form of security. This averment and the arguments in its support are wholly untenable and not acceptable to this Court as well. Had these cheques were in the form of security, then there was no reason for the plaintiffs to mention the date 1.10.2006 and 25.12.2006 on such cheques. Mentioning of these dates on the cheques by itself indicate that the intention of the plaintiffs was to make the actual payment of remaining Rs. 5,00,000/- consideration on 1.10.2006 and then further giving a week less than almost three months’ time to the defendant for cutting of his sugarcane crop and the trees of poplar and eucalyptus in that gap of period up to 25.12.2006, when the defendant was free to encash another cheque worth Rs. 5,00,000/-. Since the first cheque itself was dishonoured and the plaintiffs had come to know about the fact of this dishonour in October 2006, but they did not make any attempt approaching the defendant to beg excuse and make the payment of the dishonoured cheque, hence there was no question of presenting the second cheque in the bank. 17. 5,00,000/-. Since the first cheque itself was dishonoured and the plaintiffs had come to know about the fact of this dishonour in October 2006, but they did not make any attempt approaching the defendant to beg excuse and make the payment of the dishonoured cheque, hence there was no question of presenting the second cheque in the bank. 17. Terms/stipulations in the contract itself are very explicit in nature that if for any reason, the payment of these two cheques are not received by the defendant, then such contract would be deemed to have been be cancelled. 18. The date 15.1.2007 was the last one for execution of the sale deed, but such date and the execution was subject to the payment of these two cheques dated 1.10.2006 and 25.12.2006. Since the first cheque itself was dishonoured and no attempt was made by the plaintiffs to make the payment of such dishonoured cheque, hence as per the terms, the contract had been finished. Therefore, it was quite futile on the part of the plaintiffs to issue the notices dated 13.1.2007 and further dated 27.1.2007 with the preparation of the bank drafts (if any) for remaining consideration of Rs. 10,00,000/-. 19. Since no payment of these two cheques has been made, hence stipulation of the contract also entails the forfeiture of the earnest money. 20. Plaintiffs have not clarified as to how they could not plead in their plaint regarding the issuance of these two cheques in the form of so-called security. When all the facts were highlighted by the defendant in his written statement, then only the plaintiffs had to accept the issuance of these two cheques in their replica. So, in that way also, the intention of the plaintiffs has not been clear and they tried to conceal the real facts from the Court. 21. There was no mention in the agreement to sale itself that these cheques were in the shape of guarantee. So, raising an entirely different case in the replica cannot pave the way for success to the plaintiffs. 22. In view of what has been discussed above, I do not find any infirmity in the findings of the Court below in deciding these two issues in favour of the defendant and against the plaintiffs. Issue no. 3 23. So, raising an entirely different case in the replica cannot pave the way for success to the plaintiffs. 22. In view of what has been discussed above, I do not find any infirmity in the findings of the Court below in deciding these two issues in favour of the defendant and against the plaintiffs. Issue no. 3 23. The last date for execution of the agreement was 15.1.2007, but it was subject to the payment of both the cheques dated 1.10.2006 and 25.12.2006, as has been indicated above. So, on this score, there is nothing like that of the supply of movable property where this phenomena pertaining to the time as the essence of contract usually applies, and in this regard the Trial Court has rightly referred to the precedent rendered by the Constitution Bench of the Hon’ble Apex Court in the case of Chand Rani v. Kamal Rani, AIR 1993 SC 1742 , Issue No. 5 24. This issue was also not relevant in the present controversy. Hence, it is not warranted for this Court to discuss marshalling the whole controversy in the light of Section 34 of the Specific Relief Act. Issue No. 6 25. As the crucial issues have been adjudicated against the plaintiffs, hence they are not entitled to the relief claimed. As regards the refund of the earnest money is concerned, the law is very clear in this regard. Section 21 and 22 of the Specific Relief Act are very relevant for this purpose. Section 21(5) reads that no compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint. 26. Sub-section (1) and (2) of Section 22 of the Specific Relief Act read as under: “22. Power to grant relief for possession, partition, refund of earnest money, etc.—(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for— (a) possession, or partition and separate possession, of the property, in addition to such performance; or (b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused. (2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the Court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.” 27. Therefore, the law is amply clear on this score that if the relief of refund of the earnest money or compensation, in whatever name it may be called, is not claimed by the plaintiff in the relief clause, then the Court cannot ponder over the issue of such refund, much less as per the specific terms and conditions of the agreement to sale, such earnest money will be deemed to have been forfeited if the cheques are dishonoured. In the relief clause of the plaint, there is no alternate prayer made by the plaintiffs regarding the back payment of the earnest money or the compensation. The plaintiffs although got the plaint amended on 1.7.2010 claiming the relief of possession over the property, but at the same time or at any time thereafter did not consider necessary to amend the plaint asking the relief of getting back the earnest money or compensation even. Hence, the learned Trial Judge has rightly refused to return the earnest money or the compensation whatsoever. Issue No. 7 28. The time prescribed under Article 54 of the Indian Limitation Act for institution of such a suit is three years after the date fixed for the performance and such date in the present case was 15.1.2007. Therefore, the suit could have been instituted up to 14.1.2010. That way it was not barred by the time limitation, but certainly it has been filed on 15.7.2008, i.e. after one year and six months, wherefor no cogent and convincing reason has been offered by the plaintiffs/appellants. Therefore, it can safely be said that filing of the suit by the plaintiffs suffers with the delay and laches and even if such averment has not been pleaded by the defendant, it can well be raised and taken up by the Court under Order 41 Rule 2 of the Civil Procedure Code, which empowers the Court that it shall not be confined to the grounds of objections set forth in the memorandum of appeal. This issue no. 7 is accordingly decided against the plaintiffs. Issue No. 8 29. This issue pertains to the payment of Court Fee, which is not disputed. Hence, it is decided in favour of the plaintiffs. 30. All told, I do not find any force in this appeal. It is hereby dismissed. Impugned judgment and order dated 18.7.2011, passed by the Civil Judge (Sr. Div.), Haridwar, is affirmed. Let the lower court record be sent back.