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2017 DIGILAW 1451 (ORI)

Surendranath Patro v. Suresh Kumar Padhi

2017-12-14

A.K.RATH

body2017
JUDGMENT : A.K. RATH, J. 1. The defendant is the appellant against a confirming judgment. 2. The plaintiff-respondent instituted the suit for specific performance of contract. The case of the plaintiff was that the defendant agreed to sale the suit house to him for a consideration of Rs.24/-per sq. ft. He executed an agreement on 25.1.92. He received Rs.50,000/-towards part consideration promising to get the land measured and to execute the sale deed within 60 days after receiving the balance consideration. The extent of land had to be demarcated by the defendant. The plaintiff approached the defendant several times, but all his persuasions ended in a fiasco. 3. The defendant resisted the claim of the plaintiff on the ground that though the agreement was executed on 25.1.92, he had not received Rs.50,000/-towards part consideration. Consideration was fixed at Rs.1,20,000/-. Earlier an agreement was executed on 1.9.1991. The same was cancelled as the plaintiff committed a breach of contract. Advance amount of Rs.50,000/-was paid in respect of the earlier amount had been forfeited. The agreement had not been acted upon and as such unenforceable. 4. On the interse pleading of the parties, learned trial court struck four issues. Parties led evidence, oral and documentary. Learned trial court came to hold that the price quoted in the agreement, Ext.A, was @ Rs.24/-per sq. ft. The sale price was to be calculated after measurement of the land. The advance consideration of Rs.50,000/-was paid by the plaintiff on 25.1.92. The defendant was a defaulter and wanted to avoid performance of contract. Time is not the essence of contract. Held so, it decreed the suit. Feeling aggrieved, the defendant filed T.A. No.6/97 before the learned District Judge, Ganjam-Gajapati, Berhampur. Learned appellate court concurred with the finding of the learned trial court and held that in case the defendant fails to get the suit land measured, calculate the price of the land @Rs.24/-per sq. ft. and execute the sale deed after receiving the balance consideration within a month from the date of the judgment, then he would be liable to refund the advance of Rs.50,000/-to the plaintiff within a fortnight. Held so, it dismissed the appeal. 5. The second appeal was admitted on the following substantial questions of law. “As to whether the finding of the courts below that time is not the essence of the contract is legal and/or proper.” 6. Heard Mr. Held so, it dismissed the appeal. 5. The second appeal was admitted on the following substantial questions of law. “As to whether the finding of the courts below that time is not the essence of the contract is legal and/or proper.” 6. Heard Mr. S.S. Rao, learned counsel for the appellant and Mr. Maheswar Das on behalf of Mr. K. Rath, learned counsel for the respondent. 7. Mr. Rao, learned counsel for the appellant submits that the defendant executed an agreement on 25.1.92. For nonperformance of part of contract by the plaintiff, the defendant cancelled the agreement. The amount so received by the defendant pursuant to the earlier agreement stood forfeited. He further submits that in the agreement itself, there is a clause that the sale deed was to be executed within a period of two months from the date of execution of the agreement. Thus time is the essence of contract. He further submits that there is interpolation in the agreement. The plaintiff sent two letters, which were not received by the defendant. The conduct of the plaintiff disentitled for grant of any specific relief. He further submits that there is neither any pleading nor evidence on record that the plaintiff had sustained any loss. Thus the award of damages of Rs.50,000/-by the learned appellate court is perverse. 8. Per contra, Mr. Das, learned counsel for the respondent submits that time is not essence of contract in case of immovable property. Stipulation period of 60 days in the agreement itself does not mean that time is the essence of contract. There is a further clause in the agreement that the defendant has to measure the land, calculate the amount adjusting Rs.50,000/-therefrom and sell the land after receipt of balance consideration. He further submits that the defendant executed an agreement to sale the land in favour of the plaintiff. He received an amount of Rs.50,000/-. Since it is not come forward to execute the sale deed, the plaintiff sent several reminders. Though the defendant had received letters, but he maintained a sphinx like silence. For non-fulfillment of his part of contract, the plaintiff instituted the suit. Both the courts concurrently held that the defendant had failed to perform his part of contract. There is no perversity in the said finding. Though the defendant had received letters, but he maintained a sphinx like silence. For non-fulfillment of his part of contract, the plaintiff instituted the suit. Both the courts concurrently held that the defendant had failed to perform his part of contract. There is no perversity in the said finding. He further contends that there is a stipulation in the agreement itself that in the event the defendant will not execute the agreement, then he will pay Rs.50,000/-towards penalty. Rightly the learned appellate court awarded penalty. 9. In Chand Rani (Smt.) (Dead) by LRs. vs. Kamal Rani (Smt) (dead) by LRs., (1993) 1 SCC 519 , the apex Court held: “The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract.” xxx xxx xxx “……………..even where the parties have expressly provided that time of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental; for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract.” xxx xxx xxx ………………in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are: 1. from the express terms of the contract; 2. from the nature of the property; and 3. from the surrounding circumstances, for example; the object of making the contract.” 10. The defendant received an amount of Rs.50,000/-towards part consideration. There is a stipulation in the agreement that the plaintiff will measure the land, calculate the consideration @Rs.24/-per sq. ft, adjust Rs.50,000/-towards part consideration and receive the balance consideration at the time of execution of sale deed. from the surrounding circumstances, for example; the object of making the contract.” 10. The defendant received an amount of Rs.50,000/-towards part consideration. There is a stipulation in the agreement that the plaintiff will measure the land, calculate the consideration @Rs.24/-per sq. ft, adjust Rs.50,000/-towards part consideration and receive the balance consideration at the time of execution of sale deed. In the event, the defendant fails to execute the sale deed, he shall refund the advance amount of Rs.50,000/-and pay penalty of Rs.50,000/-. There is a further stipulation that if the plaintiff fails to pay the balance consideration at the time fixed and get the sale deed executed in his favour, the advance amount shall be forfeited. Clause itself shows that time was not the essence of contract. 11. There is interpolation of the agreement itself. Ext.2 is the letter dated 7.3.92. The same was posted on 16.3.92. The defendant received the same on 17.3.92. Immediately sent reply on 18.3.92, Ext.3. It was not possible on his part to remain present. Similarly, Ext.4 was another letter dated 21.3.92 sent by the plaintiff to the defendant. The same was posted on 23.3.92 asking the defendant to remain present on 25.3.92, but the letter was received on 28.3.92. Learned appellate court held that there is clause in the agreement that for non-performance of contract, the defendant cannot be forced to execute the sale deed. He has the option either to execute the sale deed or receive the amount. In view of the same, the plaintiff is not entitled to any relief under specific performance of contract. 12. Now the question falls for consideration as to whether the defendant shall refund Rs.50,000/-received towards part consideration ? The submission of Mr. Rao, learned counsel for the appellant that since there is no prayer in the suit, the court cannot direct to refund the same in view of Sec.22(2) of the Specific Relief Act. 13. In Firm Srinivas Ram Kumar Vs. Mahabir Prasad and others, AIR (38) 1951 SC 177, the apex Court held: “xxx xxx xxx The fact that such a prayer would have been inconsistent with the other prayer is not really material. A pltf. may rely upon different rights alternatively & there is nothing in the Civil P.C. to prevent a party from making two or more inconsistent sets of allegations & claiming relief thereunder in the alternative. A pltf. may rely upon different rights alternatively & there is nothing in the Civil P.C. to prevent a party from making two or more inconsistent sets of allegations & claiming relief thereunder in the alternative. The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Ct. to give him relief on that basis. The rule undoubtedly is that the Ct. cannot grant relief to the pltf. on a case for which there was no foundation in the pleadings & which the other side was not called upon or had an opportunity to meet. But when the alternative case, which the pltf. could have made, was not only admitted by the deft. in his written statement but was expressly put forward as an answer to the claim which the pltf. made in the suit, there would be nothing improper in giving the pltf. a decree upon the case which the deft. himself makes. A demand of the pltf. based on the deft’s own plea cannot possibly be regarded with surprise by the latter & no question of adducing evidence on these facts would arise when they were expressly admitted by the deft. in his pleadings. In such circumstances when no injustice can possibly result to the deft., it may not be proper to drive the pltf., to a separate suit. xxx xxx xxx” In view of the authoritative pronouncement of the apex Court in the case of Firm Srinivas Ram Kumar (supra), the inescapable conclusion is that the plaintiff is entitled to receive Rs.50,000/-from the defendant. The substantial question of law has been answered in affirmative. 14. The next question crops up as to whether the defendant is liable to pay penalty of Rs.50,000/-? There is no pleading or evidence on record that the defendant sustained any loss. Thus the learned appellate court is wholly unjustified in awarding Rs.50,000/-towards penalty. 15. As a sequel to the above discussion, the defendant shall refund an amount of Rs.50,000/-(Rupees Fifty Thousand) towards consideration to the plaintiff, which shall bear interest @12% per annum from the date of execution of the agreement within a period of three months. The appeal is allowed to the extent indicated above. There shall be no order as to costs.