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2022 DIGILAW 2804 (MAD)

S. Guruprasad v. S. Venkatasway Reddy

2022-08-18

S.SOUNTHAR, V.M.VELUMANI

body2022
JUDGMENT (Prayer: This First Appeal is filed under Section 96 of C.P.C., against the judgment and decree dated 28.11.2014 made in O.S.No.76 of 2011 on the file of the Additional District Court, Hosur.) V.M. Velumani, J. The appellant is plaintiff and respondents are defendants in O.S.No.76 of 2011 on the file of the Additional District Court, Hosur. The appellant filed the said suit for specific performance of the suit sale agreement against the respondents, directing them to execute and register the sale deed with respect to the suit property in favour of the appellant within the time allowed by this Court, after receiving the balance of sale consideration and deliver vacant possession of the suit property to the plaintiff, failing which, to give liberty to the appellant to get the sale deed executed, registered and take delivery of vacant possession of the suit schedule property through the Court-s Execution Proceedings. The said suit was dismissed by the judgment and decree dated 28.11.2014, rejecting the relief for specific performance and directed the respondents to repay the sum of Rs.10,00,000/- received from the appellant as advance. 2. Challenging the said judgment and decree dated 28.11.2014 made in O.S.No.76 of 2011, the appellant has come out with the present First Appeal. The case of the appellant: 2(i). The 1st respondent is owner of the suit schedule property and the same having been allotted to the 1st respondent in the registered partition Deed Document bearing No.1036/2005 on the file of the Sub-Registrar Office, Hosur. The respondents 2 and 3 are sons of the 1st respondent. The appellant agreed to purchase the suit property from the respondents and after negotiations, the sale consideration was arrived at Rs.35,75,000/-. The appellant and respondents entered into an agreement of sale dated 12.09.2008. The appellant paid a sum of Rs.10,00,000/-, as advance amount, on the date of entering into agreement. As per the terms of agreement, the appellant has to pay the balance sale consideration of Rs.25,75,000/- within 90 days from the date of agreement. If the respondents failed to perform their part of contract, the appellant can approach the Court for specific performance of agreement of sale. 2(ii). The appellant was ready and willing to perform his part of the agreement of sale The respondents were not willing to perform their part of the agreement of sale in spite of repeated demands through panchayatars. If the respondents failed to perform their part of contract, the appellant can approach the Court for specific performance of agreement of sale. 2(ii). The appellant was ready and willing to perform his part of the agreement of sale The respondents were not willing to perform their part of the agreement of sale in spite of repeated demands through panchayatars. Even in November 2008, the appellant, through common friends and mediators, approached the respondents to receive the balance sale consideration and execute the sale deed. The 1st respondent requested for some more time as he got some personal problems. 2(iii). The appellant and respondents went to survey the land. At that time, one Veera Reddy and Satheesh Babu objected to the same and informed that suits are pending in respect of the suit properties. The appellant received notices in O.S.No.116 of 2008 on the file of the Sub Court, Hosur, filed by one Satheesh Babu, son of Veera Reddy and O.S.No.7 of 2006 on the file of the District Munsif Court, Hosur, filed by Veera Reddy. The appellant came to know that the respondents suppressed the pendency of suits and entered into the agreement of sale. 2(iv). The appellant sent a notice dated 02.02.2009 even before receiving the Court notice in O.S.Nos.7 of 2006 and 116 of 2008. The respondents refused to receive the said notice sent by the appellant. Again, the appellant requested the respondents on several occasions to complete the sale process after solving the disputes, but the respondents gave evasive reply and also demanded more money over and above the sale consideration agreed upon in the sale agreement, without settling the disputes pending in respect of the suit properties. 2(v).The appellant was always ready and willing to pay the balance sale consideration and get the sale deed executed in his favour. 2(vi). On the above pleadings, the appellant filed suit claiming a decree for specific performance of agreement of sale. The appellant had filed along with the plaint the lodgement schedule for depositing the balance sale consideration. The case of the respondents: 3(i). The 1st respondent filed written statement and respondents 2 and 3 adopted the written statement filed by the 1st respondent. The respondents admitted 1st respondent-s ownership of the suit property and execution of agreement of sale. They also admitted receipt of Rs.10,00,000/- as advance from the appellant. The case of the respondents: 3(i). The 1st respondent filed written statement and respondents 2 and 3 adopted the written statement filed by the 1st respondent. The respondents admitted 1st respondent-s ownership of the suit property and execution of agreement of sale. They also admitted receipt of Rs.10,00,000/- as advance from the appellant. They denied that appellant was ready and willing to perform his part of the agreement of sale. The appellant did not request the respondents to perform their part of the agreement of sale either personally or through common friends and panchayatars. There was no attempt to survey the suit properties and said Veera Reddy and Satheesh Babu never objected the same. The suit properties are not subject matter of O.S.Nos.7 of 2006 and 116 of 2008. The appellant did not approach the respondents in November 2008 through common friends. The allegation that the appellant issued notice dated 02.02.2009 was denied. The respondents sent a notice dated 17.05.2010, calling upon the appellant to be present in Sub Registrar-s Office with balance amount and get the sale deed executed in his favour. The said notice was returned as the appellant was not in his residence. 3(ii).The suit is barred by limitation. The time is essence of contract. On these pleadings, the respondents prayed for dismissal of the suit. 4. The learned Judge, considering the pleadings, framed following necessary issues: (i). Whether suit is barred by limitation? (ii). Whether time is essence of contract is mentioned in the agreement? (iii). Whether the plaintiff is always ready and willing to pay the balance sale consideration and get the sale deed executed? (iv). Whether as alleged in the plaint, the plaintiff is entitled to get the sale deed executed after paying the balance sale consideration to the defendants? (v). Whether the plaintiff is entitled to get the sale deed executed by depositing the balance sale consideration in the Court, if the defendants fail to execute the sale deed? (vi). Other reliefs the plaintiff entitled to are?” 5. Before the learned Judge, the appellant examined himself as P.W.1, examined one Krishnappa as P.W.2 and marked 6 documents as Exs.A1 to A6. The 1st respondent examined himself as D.W.1 and marked 6 documents as Exs.B1 to B6. 6. (vi). Other reliefs the plaintiff entitled to are?” 5. Before the learned Judge, the appellant examined himself as P.W.1, examined one Krishnappa as P.W.2 and marked 6 documents as Exs.A1 to A6. The 1st respondent examined himself as D.W.1 and marked 6 documents as Exs.B1 to B6. 6. The learned Judge, considering the oral and documentary evidence and the issues framed by the judgment and decree dated 28.11.2014, held that suit is not barred by limitation and time is not essence of contract. The learned Judge held that appellant failed to prove that he was ready and willing to pay the balance sale consideration and dismissed the suit with regard to relief of specific performance and directed the respondents to refund the sum of Rs.10,00,000/- to the appellant together with interest at the rate of 9% per annum from the date of petition till the date of judgment and 6% per annum from the date of judgment till the date of refund. 7. The present appeal is filed challenging the said judgment and decree dated 28.11.2014 made in O.S.No.76 of 2011. 8. The learned Senior Counsel appearing for the appellant contended that: (a) The appellant was always ready and willing to pay the balance sale consideration and perform his part of the contract. (b) The appellant had convened several panchayat with respondents through mediators and requested the respondents to execute the sale deed after receiving the balance sale consideration. (c) The respondents evaded from performing their part of the contract, since there was civil dispute between their family members in which the suit property was also included. As per the terms of agreement of sale, the respondents have to survey the suit property before execution of the sale deed. During the survey, the family members of the respondents objected to the survey, claiming right over the property in question. The delay in completion of sale agreement is due to the problem created by the relatives of respondents and the delay is not on the part of the appellant. The appellant, as early as on 02.02.2009, sent notice through his Advocate, calling upon the respondents to receive the balance sale consideration and execute the sale deed in his favour. This proves that the appellant was ready and willing to perform his part of the contract. The appellant, as early as on 02.02.2009, sent notice through his Advocate, calling upon the respondents to receive the balance sale consideration and execute the sale deed in his favour. This proves that the appellant was ready and willing to perform his part of the contract. (d) The appellant received summons in O.S.No.116 of 2008 from the Sub Court, Hosur, filed by the relatives of the respondents, claiming right over the property in question. In view of pendency of suits, the respondents were reluctant to execute the sale deed. (e) The respondents sought time to solve their problems and also demanded more money than the amount agreed in the sale agreement and evaded execution of sale deed. (f) The time is not essence of contract and only the respondents were dragging on the pleadings. (g) The appellant filed the suit within the period of limitation and the learned Judge erred in holding that appellant filed the suit for specific performance after lapse of 2 ½ years. (h) The appellant deposited into Court the balance sale consideration at the time of filing of the suit to prove his readiness and willingness to perform his part of the contract. 9. In support of said contentions, the learned Senior Counsel appearing for the appellant relied on the following judgments: (i) AIR 2006 SC 2281 [Panchanan Dhara and others Vs. Monmatha Nath Maity (dead) through Lrs. and another]: 27. Performance of a contract may be dependent upon several factors including grant of permission by the statutory authority in appropriate cases. If a certain statutory formalityis required to be complied with or permission is required to be obtained, a deed of sale cannot be registered till the said requirements are complied with. In a given situation, the vendor may not be permitted to take advantage of his own wrong in not taking steps for complying the statutory provisions and then to raise a plea of limitation. 28. An almost identical question came up for consideration before a Division Bench of this Court in S. Brahmanand and Others v. K.R. Muthugopal (Dead) and Others [(2005) 12 SCC 764] wherein this Court laid down the law: “34. 28. An almost identical question came up for consideration before a Division Bench of this Court in S. Brahmanand and Others v. K.R. Muthugopal (Dead) and Others [(2005) 12 SCC 764] wherein this Court laid down the law: “34. Thus, this was a situation where the original agreement of 10-3-1989 had a “fixed date“ for performance, but by the subsequent letter of 18-6- 1992 the defendants made a request for postponing the performance to a future date without fixing any further date for performance. This was accepted by the plaintiffs by their act of forbearance and not insisting on performance forthwith. There is nothing strange in time for performance being extended, even though originally the agreement had a fixed date. Section 63 of the Contract Act, 1872 provides that every promisee may extend time for the performance of the contract. Such an agreement to extend time need not necessarily be reduced to writing, but may be proved by oral evidence or, in some cases, even by evidence of conduct including forbearance on the part of the other party. Thus, in this case there was a variation in the date of performance by express representation by the defendants, agreed to by the act of forbearance on the part of the plaintiffs. What was originally covered by the first part of Article 54, now fell within the purview of the second part of the article“. 29. In R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy wherein one of us was a member, it was observed: “In terms of the said Article, a suit for specific performance of a contract is required to be filed within three years; in the event no date is fixed for the performance, within a period of three years from the date when the plaintiff has notice that performance is refused. The notice dated 24.04.1984, thus, is required to be construed in the context of the agreement dated 13.10.1982 entered into by and between the parties. There cannot be any doubt whatsoever that in respect of a contract for sale of immovable property, time is not of the essence of the contract, but the question as regard the conduct of the Appellant must be considered in the backdrop of the events noticed hereinbefore.“ (ii) (2011) 4 CTC 640 [Saradamani Kandappan Vs. S.Rajalakshmi and others]: 28. There cannot be any doubt whatsoever that in respect of a contract for sale of immovable property, time is not of the essence of the contract, but the question as regard the conduct of the Appellant must be considered in the backdrop of the events noticed hereinbefore.“ (ii) (2011) 4 CTC 640 [Saradamani Kandappan Vs. S.Rajalakshmi and others]: 28. The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating thesale, set out in the agreement. If for example, the vendor discloses in the agreement of sale, the reason for the sale and the reason for stipulating that time prescribed for payment to be the essence of the contract, that is, say, need to repay a particular loan before a particular date, or to meet an urgent time bound need (say medical or educational expenses of a family member) time stipulated for payment will be considered to be the essence. Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment, time will be held to be the essence of the contract.” 10(a). The learned counsel appearing for the respondent submitted that appellant failed to pay the balance sale consideration within the time limit fixed in the agreement of sale. (b). The appellant was never ready and willing to perform his part of the contract by paying the balance sale consideration. (c). The appellant did not approach the respondents through mediators and panchayatars requesting the respondents to receive the balance sale consideration and execute the sale deed. (d). The appellant did not send any notice dated 02.02.2009. On the other hand, the respondents sent a notice dated 17.05.2010 to the appellant, calling upon him to perform his part of the contract. The said notice was returned with an endorsement that the appellant was not at his residence. (e). In the present case, time is essence of contract. In any event, the appellant is not entitled to the discretionary relief of specific performance, as he has filed the suit after a lapse of considerable time, on the last date of limitation. (f). The said notice was returned with an endorsement that the appellant was not at his residence. (e). In the present case, time is essence of contract. In any event, the appellant is not entitled to the discretionary relief of specific performance, as he has filed the suit after a lapse of considerable time, on the last date of limitation. (f). The property in question is not the subject matter of suits mentioned by the appellant. The appellant, as P.W.1, in cross-examination, admitted that respondents have title to the property and suit property is not subject matter of the suits mentioned by the appellant. (g). The learned Judge considering the pleadings, oral and documentary evidence placed properly and giving valid reasons, dismissed the claim for specific performance of agreement of sale. The appellant has not placed any materials to prove that he was ready and willing to perform his part of the contract. There is no reason to set aside the said judgment and decree appealed against and prayed for dismissal of the First Appeal. (h). The learned counsel appearing for the respondents relied on paragraph no.28 of the judgment of the Hon-ble Apex Court reported in (2011) 4 CTC 640 (cited supra), which reads as follows: 28. The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement. If for example, the vendor discloses in the agreement of sale, the reason for the sale and the reason for stipulating that time prescribed for payment to be the essence of the contract, that is, say, need to repay a particular loan before a particular date, or to meet an urgent time bound need (say medical or educational expenses of a family member) time stipulated for payment will be considered to be the essence. Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment, time will be held to be the essence of the contract.” 11. Points for consideration arising in this appeal are: (i) Whether the appellant was ready and willing to perform his part of the contract. Points for consideration arising in this appeal are: (i) Whether the appellant was ready and willing to perform his part of the contract. (ii) Whether the appellant is entitled to decree of specific performance of agreement of sale dated 12.09.2008. Points (i) & (ii) 12. The appellant has filed O.S.No.76 of 2011 against the respondents for specific performance of agreement of sale dated 12.09.2008. It is admitted that appellant and respondents entered into an agreement of sale dated 12.09.2008 for total sale consideration of Rs.35,75,000/- and appellant paid a sum of Rs.10,00,000/- to the respondents as advance. The appellant agreed to pay the balance sale consideration within 90 days from the date of agreement of sale and get the sale date executed in his favour. It is also admitted that appellant did not pay the balance amount within 90 days and filed the suit on the last date of limitation. 13. The disputed facts are that the appellant was ready and willing to perform his part of contract by paying balance sale consideration, while the respondents evaded receiving the same and failed to execute the sale deed. On the other hand, it is the case of the respondents that the appellant was not ready and willing to perform his part of contract, while the respondents were ready and willing to receive the balance sale consideration and execute the sale deed. When the appellant contended that he was ready and willing to pay the balance sale consideration and perform his part of the contract, the burden is on the appellant to prove by acceptable evidence his readiness and willingness to perform his part of the contract. 14. According to the appellant, he approached the respondents through mediators and panchayatars, requesting the respondents to receive the balance sale consideration and execute the sale deed in his favour. The appellant has not furnished any details of dates as to when the mediators and panchayatars met the respondents and names of such mediators and panchayatars. The appellant further took a stand that in November, 2008, he approached the respondents through common friends. Again, the appellant has not mentioned the names and date on which the said common friends met the respondents. The appellant has not mentioned the date on which the appellant and respondents tried to survey the land in question. The appellant further took a stand that in November, 2008, he approached the respondents through common friends. Again, the appellant has not mentioned the names and date on which the said common friends met the respondents. The appellant has not mentioned the date on which the appellant and respondents tried to survey the land in question. The appellant has not examined any one of the mediators, panchayatars or their common friends, surveyor or persons who accompanied the appellant to survey the land. Apart from his self-serving evidence, the appellant examined one Krishnappa as P.W.2, who did not know anything about the appellant-s readiness and willingness to perform his part of contract. It is not necessary for the purchaser to have the balance sale consideration in cash or in the bank from the date of agreement of sale, till payment. But the purchaser must prove that he is capable of marshalling the required funds to pay the balance sale consideration either through bank or through his private source. In the present case, the appellant, except stating that he was always ready and willing to pay the balance sale consideration and get the sale deed executed in his favour, failed to prove the same by acceptable oral and documentary evidence. Considering all the above materials, we are of the opinion that the appellant failed to prove that he had sufficient funds to pay the balance sale consideration and that he was always ready and willing to perform his part of contract as per the agreement of sale dated 12.09.2008. 15. Section 16 of the Specific Relief Act, 1963 speaks about when the specific performance of a contract cannot be enforced. As per Section 16(c), the specific performance cannot be granted when a purchaser fails to plead and prove that he is always been ready and willing to perform his part of contract. Section 16(c) of the said Act reads as follows: 16. Personal bars to relief- (c) 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. Section 16(c) of the said Act reads as follows: 16. Personal bars to relief- (c) 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 thepurpose 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 performance of, or readiness and willingness to perform, the contract according to its true construction.” 16. In the present case, the appellant pleaded that he was always ready and willing to perform his part of contract, but failed to prove the same. It is well settled that relief of specific performance is a discretionary relief and in the facts and circumstances of the case, the Courts have power to reject the said relief. In the present case, the learned Judge has held that time is not the essence of contract and suit is not barred by limitation. The respondents have not challenged the said portion of the judgment. The judgments relied on by the learned Senior Counsel appearing for the appellant do not support the case of the appellant. 17. Both the learned Senior Counsel appearing for the appellant as well as the learned counsel appearing for the respondents relied on para 28 of the judgment reported in (2011) 4 CTC 640 , which is extracted supra. The said paragraph is squarely applicable to the facts of the present case and is in favour of the respondents. Even when time is not essence of contract, the purchaser must initiate legal proceedings within reasonable time from the time fixed in the agreement for payment of sale consideration or when the vendors refused to perform their part of contract. The period of limitation for initiating a suit for specific performance is three years from the expiry of time fixed for payment of balance sale consideration or when the purchaser refused to perform his part of contract. The period of limitation for initiating a suit for specific performance is three years from the expiry of time fixed for payment of balance sale consideration or when the purchaser refused to perform his part of contract. But the purchaser must approach the Court within a reasonable time and when the suit is filed on the last date of limitation, the Court exercising its discretion, can refuse the relief of specific performance considering the facts and circumstances of the case. In the present case, the appellant did not pay the balance amount within the time limit fixed in the agreement. He issued notice dated 02.02.2009 to the respondents to receive the balance sale consideration and execute the sale deed. The appellant has mentioned in the said notice that if the respondents fail to receive the balance sale consideration and execute the sale deed, he would approach the Court. But the appellant has filed the suit only on 12.09.2011, on the last date of the limitation viz., three years of agreement of sale and after two years of notice dated 02.02.2009. The appellant has not explained the delay in approaching the Court. In view of such a long unexplained delay, the appellant is not entitled to the discretionary relief of specific performance. 18. The appellant had admitted in cross-examination that the respondents have title to the property in question and that after verifying the title of the respondents only he entered into the agreement of sale. The respondents have issued notice dated 17.05.2010 to the appellant, calling upon him to pay the balance sale consideration and get the sale deed executed. The said notice was returned as the appellant was not in his residence. The appellant, in his cross-examination, admitted that he did not inform the respondents his change of residence. The notice issued, marked as Ex.B5, clearly proves that only the respondents were ready and willing to perform their part of the contract and the appellant was not ready and willing to pay the balance sale consideration executed in his favour. The learned Judge, considering all the materials placed before him in proper perspective, has rightly dismissed the suit in respect of the relief of specific performance. For the reason stated above, both the points are answered against the appellant. In the result, this First Appeal is dismissed. No costs.