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2020 DIGILAW 620 (KAR)

R. Thejasvi v. Dr. Sheela . J

2020-03-03

N.S.SANJAY GOWDA

body2020
JUDGMENT 1. By an order dated 03.12.2019, this Court proposed the following substantial questions of law for being considered in this appeal and adjourned the matter for hearing on these questions: wxyz a) Whether the Appellate Court had to formulate points for consideration as regards the permissibility of an application under order XLI Rule 27 of CPC, and could the appellate Court have disposed of the appeal on merits without passing any order on the application filed under Order XLI Rule 27 of CPC? b) Whether the finding by the appellate Court on the respondents' ready and willingness is based on the evidence available on record and in the light of the mandate under Section 16(c) of the Specific Relief Act, 1963? c) Whether the appellate Court could have overlooked the fact that the suit for specific performance is filed much after the period contemplated in the agreement of sale on the ground that time is never the essence of contract in a agreement for sale of immovable property? zyxw 2. In continuation of the order dated 03.12.2019, this appeal is taken up for final disposal for consideration of the questions proposed and the appeal is formally admitted by formulating the aforesaid questions. 3. Facts are not in dispute. 4. An Agreement of Sale was entered into on 02.04.2008 between Sri L.P.Ramakrishna, late husband of plaintiff No.1 and the defendant. Under this Agreement of Sale, which is a registered agreement (marked as Ex.P1), the defendant agreed to sell the suit schedule property which is a residential house property for a sum of Rs.50,00,000/- and he received a sum of Rs.25,00,000/- in part payment. The agreement stipulated that on payment of balance amount of Rs.25,00,000/- within a period of ten months, the sale would be concluded by executing a Sale Deed. 5. Thus, the time fixed for performance of the obligation under the agreement was for a period of ten months which expired on 02.02.2009. It is the admitted case of both the parties that the purchaser L.P. Ramakrishna passed away on 28.12.2010 in a road accident. In other words, the purchaser passed away after nearly one year eight months after the execution of Agreement of Sale. 6. It is the admitted case of both the parties that the purchaser L.P. Ramakrishna passed away on 28.12.2010 in a road accident. In other words, the purchaser passed away after nearly one year eight months after the execution of Agreement of Sale. 6. Thereafter, on 15.03.2011, plaintiff No.1 i.e., the wife of the purchaser made a demand by issuance of legal notice calling upon the defendant to execute the Sale Deed and within a period of two weeks thereafter, she proceeded to file a suit on 29.3.2011. 7. The Trial Court, on consideration of evidence adduced before it, has proceeded to decree the suit and directed the defendant to execute the Sale Deed after receiving the balance sale consideration of Rs.25,00,000/-. 8. The matter was carried up in appeal. The Appellate Court proceeded to dismiss the appeal. Hence, this second appeal. 9. Out of three questions of law that are framed, in my view, if the second question regarding readiness and willingness is considered and answered in favour of the appellant-defendant, the other two questions may pale into insignificance. 10. The plea of the plaintiff was that she was ready and willing to discharge the obligations imposed under the Agreement of Sale. This plea of plaintiff No.1 that she was ready and willing to perform the obligations under the Agreement of Sale was however specifically denied by the defendant in the written statement. 11. Section 16 of the Specific Relief Act, 1963 (for short, 'the Act') reads as under: wxyz " 16. Personal bars to relief .- Specific performance of a contract cannot be enforced in favour of a person- a) who would not be entitled to recover compensation for its breach; or 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 willfully 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." zyxw 12. As could be seen from Sub-section (c) of Section 16 of the Act, the performance of a contract cannot be enforced in favour of a person 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 those terms, the performance of which has been prevented or waived by the defendant. 13. Thus, in law, irrespective of denial of readiness and willingness by the defendant in the suit, a plaintiff, in a suit for specific performance is bound to prove and establish that he has been ready and willing to perform those essential terms of the agreement and unless this readiness and willingness is proved, a decree of specific performance cannot be granted in his favour by the Court. 14. In the instant case, admittedly no documentary evidence was produced to establish the readiness and willingness of the original purchaser or by his wife. In support of readiness and willingness, only oral evidence was adduced on behalf of plaintiffs. During the course of cross-examination, plaintiff No.1 has admitted that she had no personal knowledge about the Agreement of Sale that her husband had entered into. Thus, it stands proved that there was no evidence of any kind that the husband of the plaintiff during his life time had even attempted to perform any part of the contract. 15. The husband of plaintiff No.1 passed away on 28.12.2010 and from that date, till the filing of the suit i.e., on 29.03.2011, apart from the vague assertion that she asked the defendant to conclude the sale transaction, no other evidence has been established which could be said in the eye of law to be satisfactory evidence to prove readiness and willingness. In other words, there is absolutely, no evidence on record to establish that the plaintiffs were ready and willing to perform the essential terms of the contract. 16. It is to be borne in mind that the legal notice itself was issued about five months after the death of her husband and the suit was filed within two weeks of the issuance of the legal notice. 17. 16. It is to be borne in mind that the legal notice itself was issued about five months after the death of her husband and the suit was filed within two weeks of the issuance of the legal notice. 17. It is also to be borne in mind that the period fixed for performance of the agreement was 02.02.2009 and thus the time limit for filing the suit would have expired on 02.02.2012. However, it appears from the sequence of events that the suit has been filed on the premise that it ought to have been filed within three years from 02.04.2008 i.e., on or before 02.4.2012 and thus, the suit is obviously filed in haste on 29.03.2011. 18. Both the Trial Court as well as the Appellate Court have proceeded to come to the conclusion that the plaintiffs were ready and willing to perform the obligations imposed in the agreement of sale only because the plaintiffs had issued a legal notice demanding the execution of the sale deed. In the eye of law, mere issuance of demand notice calling upon the defendant to execute the Sale Deed would not constitute compliance of the requirement of readiness and willingness envisaged under Section 16(c) of the Act. Section 16(c) of the Act stipulates that plaintiff should establish that he or she was ready and willing to perform the essential terms of the contract. 19. In the instant case, the basic terms of the contract was that the plaintiff should pay the balance sale sum of Rs.25,00,000/- within 10 months from the date of the agreement of sale. It was, therefore, incumbent on the plaintiff No.1 to plead and establish that she either had resources with her to pay the balance sale consideration or possessed the necessary wherewithal to raise a sum of Rs.25,00,000/- to conclude the sale transaction. Unfortunately, there is no evidence of any kind produced by the plaintiffs to establish this particular and essential term of the contract. It will have to be therefore held that plaintiff No.1 has failed to prove that she was ready and willing to perform her part of the contract. As a consequence, the plaintiffs would not be entitled to a decree for specific performance. 20. The Apex Court in a judgment rendered in Civil Appeal No.8425/2009 dated 07.02.2020 in paragraph 20 observed as follows: wxyz ".. As a consequence, the plaintiffs would not be entitled to a decree for specific performance. 20. The Apex Court in a judgment rendered in Civil Appeal No.8425/2009 dated 07.02.2020 in paragraph 20 observed as follows: wxyz ".. Mere plea that he is ready to pay the consideration, without any material to substantiate this plea, cannot be accepted. It is not necessary for the plaintiff to produce ready money, but it is mandatory on his part to prove that he has the means to generate the consideration amount. Except the statement of PW-1, there is absolutely no evidence to show that the plaintiff has the means to make arrangements for payment of consideration under the reconveyance agreement." zyxw 21. Learned counsel for the respondents, however, contended that requirement of establishing readiness and willingness would arise only if there was a specific denial of the defendant. According to him, the requirement of law to prove readiness and willingness would arise only if the plaintiff's inability to raise resources is raised as a defence by the defendant in a suit for specific performance. As could be seen from Section 16(c) of the Act, there is no need of any denial by the defendant regarding the capability of the plaintiff to perform the essential terms of the contract. In fact, the law enjoins a responsibility on the plaintiff to prove to the satisfaction of the Court that he/she was ready and willing to perform the essential terms of the contract. This is because the exercise of the power of a Court under the Specific relief Act is essentially an exercise of the equity jurisdiction of the Court. In other words, it will have to be established by the person who seeks to invoke this equity jurisdiction of the Court that he was entitled to a decree not in law but also in equity. 22. If the plaintiff in a suit for specific performance does not prove that he/she was ready and willing to perform the essential terms of the contract, I am afraid, no decree for specific performance in favour of such a plaintiff can be granted. The argument of the learned counsel for the respondents is, therefore, rejected. 23. Learned counsel for the respondents thereafter contended that the conduct of the defendant/appellant needs to be taken note of and his appeal was required to be dismissed on that score alone. The argument of the learned counsel for the respondents is, therefore, rejected. 23. Learned counsel for the respondents thereafter contended that the conduct of the defendant/appellant needs to be taken note of and his appeal was required to be dismissed on that score alone. According to him, notwithstanding the fact that a suit for specific performance had been filed, the defendant nevertheless proceeded to enter into one transaction after the other in respect of the suit property and he had ultimately sold the suit property in favour of others during the pendency of the suit itself and this disentitled him to maintain the very appeal. 24. In my view, the transaction entered into by the defendant during the pendency of the suit may have no relevance for the purpose of determining whether the plaintiff had a right to get a decree for specific performance. It is needless to state that if the plaintiff was ultimately found to be entitled to a decree to enforce the agreement of sale, none of the transactions entered into by the defendant would be of any avail and all these transactions would suffer the consequence envisaged under Section 52 of the Transfer of Property Act and they would not bind the plaintiff in any manner. The only consequence of the transactions entered into during the pendency of the suit would be that the purchasers of the suit property would be bound by the decree that would be passed by the Court and they would have virtually no defence against the decree. I am, therefore, unable to accept this contention of the learned counsel for the respondents. 25. In the light of the finding on question No.2, the other two questions regarding necessity of the Appellate Court to formulate points for consideration as regards the necessity of formulating points for determination regarding the admissibility of an application under Order XLI Rule 27 CPC or the fact that the suit for specific performance was filed much after the period contemplated in the Agreement of Sale would be unnecessary and superfluous in view of the decision on the second question of law regarding readiness and willingness on the part of the plaintiffs. 26. 26. Accordingly, this second appeal is allowed and the second question of law is held in favour of defendant and it is held that the plaintiffs are not entitled for a decree of specific performance since the plaintiffs have failed to prove that they were ready and willing to perform the essential terms of the contract. 27. Since the plaintiffs are held to be not entitled to a decree for specific performance on the ground that they were not ready and willing, as a necessary consequence, the defendant would be bound to return the advance amount of Rs.25,00,000/- received by him. In my view, interest of justice would be met, if the defendant is directed to refund the said amount of Rs. 25,00,000/-. 28. Accordingly, the appellant/defendant is directed to refund Rs.25,00,000/- with interest at the rate of 9% p.a. from 02.02.2009 till the date of realization. 29. The appellant/defendant is directed to refund the said amount within three months from today, to the respondents/plaintiffs. 30. If the amount so ordered is not paid within the stipulated time, there shall be a charge on the suit property till the said sum is paid to the plaintiffs.