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Allahabad High Court · body

2022 DIGILAW 2050 (ALL)

Ram Ratti v. Gorakh Pd. Dubey

2022-12-23

VIVEK CHAUDHARY

body2022
JUDGMENT : 1. Heard counsels for the parties and perused the record with their assistance. 2. The appellants have approached this Court challenging the judgment and decree dated 04.07.1981 passed by the I Additional District Judge, Gorakhpur in Civil Appeal No. 28 of 1980 and Civil Appeal No. 29 of 1980. 3. Both the appeals arise from a suit for specific performance of a contract for sale bearing Suit No. 62 of 1973, filed by the respondent in this second appeal. The suit was partly decreed and aggrieved by the findings of the Trial Court, both parties filed their separate appeals before the First Appellate Court. First Appellate Court set aside Trial Court’s Judgment and decreed the suit in favour of the plaintiff-respondent. Against the First Appellate Court’s judgment, the defendants in the original suit have filed this second appeal. 4. Learned counsel for the appellants submits that there are two substantial questions of law involved in the present second appeal, viz., (i) whether the judgment and decree of the Appellate Court is legally perverse? (ii) whether the appellate court has wrongly inferred readiness and willingness on the part of plaintiff-respondents to perform his part of the obligation to execute the sale deed in absence of any evidence to show his willingness? 5. With regard to the substantial question of law number one, learned counsel for the defendant-appellant contends that the first Appellate Court wrongly interpreted evidence on record and gave a finding contrary to the settled law of non-execution of a sale deed on the ground of unconscionable transaction and unfair advantage. Counsel for the appellant refers to points No. 2 and 3 of the judgment of the Appellate Court where it agrees with the view taken by the Trial Court, that the market value of the property must be at least Rs.30,000/-. Whereas, the agreement to sell was for a consideration of Rs.15,000/-. Counsel further argues that both the Courts have considered the admission of the plaintiff-respondent in his oral statement, that the property had a market value of Rs. 35,000/-, but the Appellate Court in its judgment ignored the said admission and ruled against the contention of unfair advantage and inadequacy of consideration taken by the defendant-appellant. 6. Counsel further argues that both the Courts have considered the admission of the plaintiff-respondent in his oral statement, that the property had a market value of Rs. 35,000/-, but the Appellate Court in its judgment ignored the said admission and ruled against the contention of unfair advantage and inadequacy of consideration taken by the defendant-appellant. 6. Learned counsel for the plaintiff-respondent contends that there is no perversity in the First Appellate Court’s judgment and that inadequacy of consideration is not a ground for non-execution of the sale deed. He further adds that the plea that the signature of the defendant-appellant was forged is not accepted by both the Courts. Counsel for the plaintiff-respondent further avers that defendant-respondent Bansraj has already sold most of his property therefore it can be inferred that he was in dire need of money and the same reasoning has been given by the First Appellate Court while refusing the plea of unconscionability of the terms of the agreement and undue advantage raised by the defendant-appellant. 7. A perusal of the record shows that plaintiff-respondent, Gorakh Prasad as P.W.1, admitted the value of the property at around Rs.35,000/-and both the Courts in their judgments have valued it at no less than Rs. 30,000. Appellate Court, while reversing the finding of the Trial Court regarding the unfair advantage to the plaintiff-respondent, has recorded that defendant Bansraj has been selling his other properties, and therefore, he must be in dire need of money. Furthermore, both the Courts have recorded that the sum of Rs.5,000, paid at the time of execution of the agreement to sell was to be used by the defendant-appellant for some urgent repair works on his property. Both of these findings recorded by the Appellate Court are in contradiction with each other. If the defendant was in dire need of money and he agreed to sell the property at less than half the market value of the property, at Rs.15,000/-, then why would defendant Bansraj take only Rs.5,000 as advance, and not take the entire consideration. Without recording cogent reasons, the finding of undue advantage recorded by the Trial Court could not be reversed by the First Appellate Court. 8. Without recording cogent reasons, the finding of undue advantage recorded by the Trial Court could not be reversed by the First Appellate Court. 8. The law on unfair advantage in specific performance of contract is well settled and traces its origin from the principles of equity and is incorporated in Section 20 of the Specific Relief Act, 1963 (hereinafter referred to as the Act of 1963). Suffice would be to refer to the judgment of the Supreme Court in the case of A.C. Arulappan v. Ahalya Naik, reported as (2001) 6 SCC 600 , where paragraph 15 reads; “15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court. The trial court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses, considered the relevant facts and reached a conclusion. The appellate court should not have reversed that decision disregarding these facts and, in our view, the appellate court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract.” 9. Furthermore, the Appellate Court while decreeing the specific performance in favour of the plaintiff-respondent did not adhere to the established judicial precedent of being sound and reasonable and being guided by the settled judicial principles. The law is settled that no decree of specific performance be granted because courts are bound to do so, courts have ample discretion while deciding whether they should decree a suit for a specific performance or not. However, such discretion cannot be arbitrary and the same has been reiterated in a plethora of judgments by the Supreme Court. Suffice would be to refer to the judgment of the Supreme Court in the case of Ramesh Chand v. Asruddin, reported as (2016) 1 SCC 653 , where it has been held in paragraph 8 that; “8. Section 20 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. Section 20 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. However, the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles. Subsection (2) of Section 20 of the Act provides the three situations in which the court may exercise discretion not to decree specific performance. One such situation is contained in clause (a) of sub-section (2) of Section 20 which provides that 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, the decree of specific performance need not be passed. It is pertinent to mention here that in the present case, though execution of the agreement dated 21-6-2004 between the parties is proved, but it is nowhere pleaded or proved by the plaintiff that he got redeemed the mortgaged land in favour of Defendant 2 in terms of the agreement, nor is it specifically pleaded that he was ready and willing to get the property redeemed from the mortgage.” 10. With regard to question number two learned Counsel for the defendant-appellant submits that there was nothing on record to show that his client ever received any notice from the plaintiff-respondent regarding his willingness to get the sale deed executed on his payment of the remaining Rs.10,000/-. He further contends that as per Section 16(c) of the Act of 1963, averments and proof of the plaintiff’s willingness in clear terms are a must. Merely saying that he has issued a notice for the execution of sale deed, without any proof filed in his suit for specific performance, is not enough to satisfy the requirements of Section 16(c) of the Act of 1963. Counsel for the appellant places reliance on two judgments of the Supreme Court in the cases of Manjunath Anandappa Urf Shivappa Hansi Appellant v. Tammanasa and Others Respondents as reported in AIR 2003 Supreme Court 1391, and Umabai & Anr.-Appellants v. Nilkanth Dhondiba Chavan (Dead) by Lrs. and Anr.-Respondents as reported in 2005 3 AWC 2948 . 11. Counsel for the appellant places reliance on two judgments of the Supreme Court in the cases of Manjunath Anandappa Urf Shivappa Hansi Appellant v. Tammanasa and Others Respondents as reported in AIR 2003 Supreme Court 1391, and Umabai & Anr.-Appellants v. Nilkanth Dhondiba Chavan (Dead) by Lrs. and Anr.-Respondents as reported in 2005 3 AWC 2948 . 11. Learned Counsel for the plaintiff-respondent contends that the Appellate Court has rightly decided the issue of his willingness to perform his part of the contract, in his favour. He further adds that in the suit for eviction and recovery of rent by the defendant-appellant against the plaintiff-respondent, he has taken a stand that he is not a tenant and is willing to pay the rest of the consideration and get the sale deed executed in his favour. In reply to the respondent’s notice, it was the defendant-appellant who refused to accept the remaining sum and execute a sale deed in the respondent’s favour. Counsel for the plaintiff-respondent further contends that his willingness to perform his part of the deal should be adjudged by taking into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances such as his stand in the subsequent suit for eviction. Counsel for the respondent places reliance upon the judgment of the Supreme Court in the cases of C.S. Venkatesh vs. A.S.C. Murthy (D) By Lrs. & Ors. as reported in 2020 3 SCC 280 , and Sughar Singh vs. Hari Singh (Dead) Through LRS. & ORS. as reported in 2021 AIR(SC) 5581. 12. A perusal of the Appellate Court judgment on this issue shows that nowhere it refers to “the notice” sent by the plaintiff-respondents. There is no such notice on record. All it has considered is a letter bearing paper no. 115/C marked as Ext. 2, sent by the defendant-appellant refusing to honour his part of the agreement to sell, and repudiating any contract for sale between him and the plaintiff-respondent. A perusal of the letter itself does not reveal whether it was in response to any notice sent by the plaintiff-respondent, where the plaintiff-respondent has expressed his willingness to perform his part of the promise. Plaintiff-respondent has failed to aver and prove his notice to the defendant-appellant to perform his part of the contract. A perusal of the letter itself does not reveal whether it was in response to any notice sent by the plaintiff-respondent, where the plaintiff-respondent has expressed his willingness to perform his part of the promise. Plaintiff-respondent has failed to aver and prove his notice to the defendant-appellant to perform his part of the contract. The judgments in C.S. Venkatesh (supra) and Sughar Singh(supra), relied upon by the counsel for the plaintiff-respondent, also approve this view. The law in this regard is very well settled that there must be clear and unambiguous proof of a notice as required under Section 16(c) of the Act of 1963 and Forms 47 and 48 of Appendix A of the CPC, 1908. Suffice would be to refer to the judgment of the Supreme Court in the case of Manjunath Anandappa (Supra), paragraphs 13, 14 and 15 thus reads: “13. Section 16(c) of the Specific Relief Act reads thus: “Specific 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 terms the performance of which has been prevented or waived by the defendant.” 14. In terms of the aforementioned provision, it is incumbent upon the plaintiff both to aver and prove that he had all along been ready and willing to perform the essential terms of contract which were required to be performed by him. 15. Forms 47 and 48 of Appendix A of the Code of Civil Procedure prescribe the manner in which such averments are required to be made by the plaintiff. Indisputably, the plaintiff has not made any averment to that effect. He, as noticed hereinbefore, merely contended that he called upon Defendant 2 to bring Defendant 1 to execute a registered sale deed. Apart from the fact that the date of the purported demand has not been disclosed, admittedly, no such demand was made upon Defendant 1. We may notice, at this juncture, that the plaintiff in his evidence admitted that Defendant 1 had revoked the power of attorney granted in favour of Defendant 2. In his deposition, he merely stated that such revocation took place after the agreement for sale was executed. We may notice, at this juncture, that the plaintiff in his evidence admitted that Defendant 1 had revoked the power of attorney granted in favour of Defendant 2. In his deposition, he merely stated that such revocation took place after the agreement for sale was executed. If he was aware of the fact that the power of attorney executed in favour of Defendant 2 was revoked, the question of any demand by him upon Defendant 2 to bring Defendant 1 for execution of the agreement for sale would not arise at all. Furthermore, indisputably the said power of attorney was not a registered one. Defendant 2, therefore, could not execute a registered deed of sale in his favour. The demand, if any, for execution of the deed of sale in terms of the agreement of sale could have been, thus, made only upon Defendant 1, the owner of the property. The balance consideration of Rs 10,000 also could have been tendered only to Defendant 1. As indicated hereinbefore, the purported notice was issued only on 8-8-1984, that is, much after the expiry of the period of three years, within which the agreement of sale was required to be acted upon.” 13. From the aforesaid, it is clear that the plaintiff did not give any notice to the defendants of the execution of the sale deed as is required under the law. Thus, on both the grounds the present appeal succeeds and is allowed. The judgment of the appellate Court is set aside. The suit of the plaintiff for specific performance fails. The defendants shall return the amount received by them under the agreement to sell to the plaintiff along with interest at the rate of 6% p.a., within a period of three months from today. 14. With the aforesaid, the appeal stands allowed.