Research › Search › Judgment

Telangana High Court · body

2022 DIGILAW 361 (TS)

B. Pankajam v. Ram Singh

2022-06-08

P.SREE SUDHA

body2022
JUDGMENT : 1. This appeal is directed against the judgment and decree dated 30.05.2011 passed in O.S.No.7 of 2007 on the file of the learned I Additional Chief Judge, City Civil Court at Secunderabad. 2. One Ram Singh-plaintiff filed suit seeking specific performance of the agreement of sale and for perpetual injunction over Plot bearing No.11 in Sy.No.74/12 admeasuring 292.6 square metres along with two rooms situated at East Marredpally, Secunderabad, (hereinafter called as ‘suit plot’) against B.Pankajam and B.Mamtha-wife and daughter of late M.Babu-defendants. The plaintiff would state that late M.Babu purchased the suit plot from one Harinarayan Rathi vide Sale Deed dated 07.04.1993 and thereafter he offered to sell the suit plot to the plaintiff for a total consideration of Rs.17,00,000/-. Accordingly, an Agreement of Sale-cum-General Power of Attorney (with possession) dated 01.04.2004 was executed and on the same day the plaintiff paid an amount of Rs.1,00,000/- through Account Payee Cheque drawn on A.P.Mahesh Co-operative Urban Bank Limited, West Marredpally Branch, Secunderabad, to late M.Babu and it was agreed between both the parties that the remaining balance sale consideration was to be paid on or before 31.12.2004. The plaintiff would contend that late M.Babu agreed to obtain all necessary and required permissions, clearances etc. for completing the sale transaction and also delivered possession to him in part performance of the agreement. The plaintiff would also submit that since the date of agreement he is in lawful possession of the suit plot and that he also constructed two rooms along with compound wall and gate with his own expenses and obtained electricity connection also. The plaintiff would also state that he was ready and willing to pay the balance sale consideration and the sale deed is to be executed in his favour. Late M.Babu died on 29.04.2006. After knowing about the death of M.Babu, the plaintiff visited his house and informed regarding execution of agreement of sale in his favour by M.Babu to the defendants as well as to the sister of Late M.Babu. He would submit that as there was no response from the defendants, he got issued a legal notice on 20.10.2006 calling upon them to execute the sale deed by receiving the balance sale consideration, for which the defendants issued a reply notice dated 20.10.2006 and returned Rs.1,00,000/- by way of cheque dated 16.10.2006. He would submit that as there was no response from the defendants, he got issued a legal notice on 20.10.2006 calling upon them to execute the sale deed by receiving the balance sale consideration, for which the defendants issued a reply notice dated 20.10.2006 and returned Rs.1,00,000/- by way of cheque dated 16.10.2006. The defendants in their reply notice stated that the agreement of sale-cum-general power of attorney executed by Late M.Babu was as a security to the money lend by the plaintiff to M.Babu and the value of the property was not less than Rs.30,00,000/- during the year 2004 and there is no necessity for them to sell the suit plot and that the plaintiff failed to pay the balance sale consideration on or before 31.12.2004 and he should have obtained consent from Late M.Babu for extending time and that the possession was not delivered to him. Merely permitting to stock materials in one room which was built by Late M.Babu, does not mean that possession was delivered to him. The suit agreement is not valid without paying stamp duty and penalty and it ought to have been registered. The Government filed a suit in LGC No.167 of 1997 claiming that the land in the vicinity of the suit plot is a Government land. In the suit plot there was a compound wall with gate in existence and that the plaintiff constructed only one room while the other room was constructed by Late M.Babu. 3. In support of his case, the plaintiff examined himself as P.W.1 and the attestor of the suit agreement as P.W.2. Exs.A1 to A7 are marked on behalf of the plaintiff. The first defendant examined herself as D.W.1 and marked Exs.B1 to B28 on her behalf. The trial Court after considering the oral and documentary evidence available on record, decreed the suit directing the defendants to receive the balance consideration of Rs.16,00,000/- and execute the sale deed within two months from the date of judgment, failing which the plaintiff was directed to deposit the amount in the Court within one month. Aggrieved by the said judgment and decree, the defendants in the suit preferred this appeal. 4. For the sake of convenience, the parties hereinafter are referred to as arrayed in the suit. 5. Heard the learned counsel appearing for the appellants and the learned counsel appearing for the respondent. 6. Aggrieved by the said judgment and decree, the defendants in the suit preferred this appeal. 4. For the sake of convenience, the parties hereinafter are referred to as arrayed in the suit. 5. Heard the learned counsel appearing for the appellants and the learned counsel appearing for the respondent. 6. The trial Court in its judgment observed that there are several strong circumstances to show that deceased M.Babu executed agreement of sale dated 01.04.2004 only with an intention to sell the suit plot to the plaintiff but not as a security as contended by the defendants. The recital of Ex.A1 goes to show that possession of the suit plot was also delivered to the plaintiff and he constructed two rooms and a compound wall with gate. If at all the plaintiff obtained Ex.A1 only as a security, he would not have constructed any rooms in it. Apart from that the plaintiff obtained electricity connection to the suit plot. D.W.1 is residing in another house, which is nearer to the suit plot and it is not her case that she is residing in the suit plot. D.W.1 got executed Ex.B5 notice to the officials of the Municipal Corporation to demolish the unauthorized constructions made by the plaintiff in the suit plot. She also gave a reminder under Ex.B12 to the Municipal Corporation for not taking action. If at all her husband has really constructed the rooms in the suit plot, she would not have given complaint to the authorities for its demolition. Therefore, her contention that Late M.Babu had no necessity to sell the suit plot is not proved. Ex.B2 is the application addressed by the Late M.Babu to the Mandal Revenue Officer, requesting for regularisation of the suit plot and Ex.B1 is the Memo issued from the Office of the Collector, Hyderabad District. He sent an application under Ex.B3 format and Ex.B4 is the Memo issued by the Officer of the Collector to file a fresh application for the purpose of regularisation. It clearly shows that he was trying to get regularisation of the suit plot. D.W.1 did not file any document to show that the land grabbing case was filed by her husband regarding the suit plot, may be survey number was included in the Government land. The plaintiff was prepared to purchase the suit plot knowing about the regularisation process. It clearly shows that he was trying to get regularisation of the suit plot. D.W.1 did not file any document to show that the land grabbing case was filed by her husband regarding the suit plot, may be survey number was included in the Government land. The plaintiff was prepared to purchase the suit plot knowing about the regularisation process. It was also observed by the trial Court that Ex.A1 was sent to the District Collector for impounding and for collection of necessary stamp duty and penalty. He relied upon the case law of this Court reported in T.A.KHAJA HUSSAIN V/S. C.IRSHAD BASHA NIZAMI, [ 2009 (6) ALD 497 ] in which it was held that sale agreement cannot be questioned on the ground of its being unregistered. An unregistered document can be received as evidence of a contract in a suit for specific performance as per Section 49 of the Registration Act, 1908. The trial Court also observed that the suit agreement relates to the immovable property and it was a vacant land when the same was given in possession to the plaintiff. The executant late M.Babu or the defendants never issued any notice to the plaintiffs demanding him to pay the balance sale consideration within the stipulated time or afterwards. Moreover, suit plot was not regularised by the Government by that time. As per Ex.A6 the market value of the property was Rs.39,20,380/-as on 07.11.2006 and as per Ex.B28 the market value was shown as Rs.8,450/- per square yard in the year 2004. There was no recital in Ex.A1 that time is the essence of the Contract. As such, the plaintiff entitled for an equitable relief of specific performance against the defendants. As the first defendant made an attempt for demolition of the constructions made by the plaintiffs over the suit plot, permanent injunction was also granted. 7. Aggrieved by the said Judgment and decree the defendants in the suit preferred this appeal by contending that no issue was framed regarding the readiness and willingness of the plaintiff in performing his part of the contact. 7. Aggrieved by the said Judgment and decree the defendants in the suit preferred this appeal by contending that no issue was framed regarding the readiness and willingness of the plaintiff in performing his part of the contact. Learned counsel for the appellants-defendants would further contend that only small amount was taken as advance for the value of the property, and therefore, the preponderance of probabilities being not in the nature of an agreement of sale and it was also erroneously held by the trial Court that time is not the essence of the contract and there was specific mention regarding the specific date on or before which the plaintiff has to pay the balance sale consideration. He would also contend that there is no evidence to show that the plaintiff ever offered to pay the balance sale consideration on or before 31.12.2004 or even afterwards. He would also assert that 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 is barred from claiming specific performance. 8. Learned counsel for the appellant would mainly contend that the so called agreement was only a security offered in respect of the hand loan of Rs.1,00,000/- obtained by late M.Babu. As the plaintiff was not a money lender, the learned counsel would state that he cannot pay Rs.1,00,000/- on a promissory note and as such the Late M.Babu-husband of the first appellant executed the said agreement. Learned counsel would also argue that the attitude and conduct of the plaintiff in not taking any steps from the date agreement clearly shows that he was trying to trespassing into the suit plot after sudden demise of M.Babu and constructed a room unauthorisedly. He would also contend that the trial Court grossly erred in holding that plaintiff is in possession of the suit plot and granted decree in his favour without actually looking into the facts of the case. 9. The plaintiff was examined as P.W1. During his cross- examination he admitted that he has not paid the balance sale consideration of Rs.16,00,000/- on or before 31.12.2004 to late M.Babu. 9. The plaintiff was examined as P.W1. During his cross- examination he admitted that he has not paid the balance sale consideration of Rs.16,00,000/- on or before 31.12.2004 to late M.Babu. He also agreed that after the agreement M.Babu was alive for two years and twenty eight days and he did not wrote any letter to him during his life time stating that he was ready to pay the balance sale consideration. But he stated that he had informed to the deceased orally and also admitted that the said fact was not mentioned in the plaint. He further admitted that the cheque returned by the first defendant on 16.10.2006 was with him. D.W.2 is the brother-in-law of the plaintiff and the attestor to the agreement of sale. 10. The first defendant was examined herself as D.W.1 and deposed that the agreement-cum-general power of attorney is not an agreement of sale and it was executed only as a security for the loan of Rs.1,00,000/- obtained by her husband from the plaintiff and as such she returned the same. Perusal of the agreement of sale (with possession dated 01.04.2004) clearly shows that late M.Babu executed the said agreement of sale in favour of plaintiff for sale of the suit plot for a total consideration of Rs.17,00,000/- and the plaintiff paid Rs.1,00,000/- on the same day and it was agreed that the balance amount of Rs.16,00,000/- would be paid on or before 31.12.2004. Late M.Babu agreed to obtain all necessary and required permissions and clearances for completing and executing the sale transactions and furnished the Xerox copies of the same to the plaintiff. He also handed over possession of the suit plot as part of performance of the agreement of sale- cum-general power of attorney and agreed to pay all taxes, cess, charges etc., up to the date of execution of the deed and will handed over the receipts to the plaintiff. He further stated that if there is any defect found or established in the title of the suit plot, he will rectify such defects at his own costs. If at all the plaintiff is deprived of whole or part of the suit plot, he shall indemnify and reimburse the loss caused to him. He also appointed the plaintiff as true and lawful general power of attorney and permitted to execute sale deeds in favour of third parties. If at all the plaintiff is deprived of whole or part of the suit plot, he shall indemnify and reimburse the loss caused to him. He also appointed the plaintiff as true and lawful general power of attorney and permitted to execute sale deeds in favour of third parties. Apart from that he also stated that plaintiff is authorised to apply and obtain all necessary certificates permissions, clearances from the competent authorities/departments for transferring the suit schedule property. The trial Court further observed that the nature of the document and contents of the document clearly goes to show that it is an agreement of sale executed by late M.Babu in favour of plaintiff and he received Rs.1,00,000/- towards part performance and also authorized the plaintiff to obtain all necessary certificates, permissions and clearances. The argument of the first defendant that it was only executed as a security cannot be accepted. 11. From the above backdrop, now it is for this Court to decide whether the plaintiff was ready and willing to perform his part of contract and if so, whether the time is essence of the contract or not. 12. Now in the agreement it was clearly mentioned that the balance amount of Rs.16,00,000/- is to be deposited on or before 31.12.2004 and it was not stated specifically anywhere that the time is the essence of the contract, but the said fact is to be ascertained by the Court on considering the terms of the agreement, contentions of the respective parties and the surrounding circumstances. As the plaintiff filed suit for specific performance of the contract, it is necessary that he should establish high standard of equitable conduct. In a case reported in Smt. SHYAMABAI V/s. RAMKISAN, [2008 (3) ALL MR 189] it was held that “readiness and willingness are sometimes treated as synonymous and have almost the same sense or meaning but there is a clear cut distinction between the two while ‘willingness’ is merely mental process, ‘readiness’ is something to do with translating that will into action and is preceded by necessary preparation for being in a position to be ready. In other words, we can say that while ‘willingness’ may be something to do mainly with a person’s mental process to do an act, his readiness implies close proximity of such willingness and its ultimate physical manifestation. In other words, we can say that while ‘willingness’ may be something to do mainly with a person’s mental process to do an act, his readiness implies close proximity of such willingness and its ultimate physical manifestation. ‘Readiness’ must in all cases be backed by ‘willingness’ and its imminent physical action is demonstrated when it is about to be put into action. Time lag between the two may sometimes be very short, may even be negligible, but it must always be preceded by an intention or a will to do. In short, ‘readiness’ must be said to be the total equipment of a person who is willing to do a thing before he actually does it ... since in granting specific performance the Court acts in equity, it becomes necessary that a high standard of equitable conduct must be displayed by the plaintiff...” 13. The plaintiff herein is the alleged purchaser of the suit plot and he approached the Court for discretionary remedy and he must come to the Court on proper disclosure of the facts. He has not stated anywhere that he had complied with the conditions of the agreement and deposited the balance sale consideration amount on or before 31.12.2004. He simply stated that he orally offered the amount to late M.Babu but the said fact was not even mentioned by him in the plaint. Admittedly, the suit plot was sold for an amount of Rs.17,00,000/- and on taking a token amount of Rs.1,00,000/- the possession was also delivered to him and he was specifically directed to deposit the amount within eight months from the date of the agreement, which is a reasonable time given to him for payment of the balance sale consideration. The plaintiff never made any attempt either to pay the balance sale consideration or sought time for extension in respect of the payment of balance sale consideration. Learned counsel for the plaintiff simply argued that time is not the essence of the contract and the trial Court also observed that as it is not specifically mentioned in the agreement that the time is not the essence of the contract. 14. There was no prior acquaintance between the plaintiff and late M.Babu at the time of entering into agreement of sale. As such, a specific time was mentioned in the agreement with regard to deposit of the balance sale consideration of Rs.16,00,000/-. 14. There was no prior acquaintance between the plaintiff and late M.Babu at the time of entering into agreement of sale. As such, a specific time was mentioned in the agreement with regard to deposit of the balance sale consideration of Rs.16,00,000/-. In fact, possession was also handed over and the plaintiff was appointed as lawful general power of attorney. He has not made any efforts to obtain necessary certificates, permissions or clearances from the competent authorities on or before 31.12.2004 or even during the life time of late M.Babu. The plaintiff simply kept quiet and enjoying the possession of the suit plot. He got constructed a compound wall along with two rooms in the suit plot and also obtained electricity connection. The defendants clearly stated that the value of the suit plot during the year 2004 was nearly Rs.30,00,000/- and to that effect they also filed certificate issued by the Sub-Registrar, Marredpally and they further stated that there is no necessity for the husband to sell the said plot for a meagre amount of Rs.17,00,000/-. 15. The conduct of the plaintiff prior to and subsequent to the filing of the suit, attendant circumstances and availability of funds to pay the balance sale consideration are relevant factors to be considered by the Court before granting a discretionary relief of specific performance. There is total inaction on the part of the plaintiff. The agreement was entered into on 01.04.2004 and M.Babu was died in the year 2006. So he kept quiet for nearly two years twenty eight days. In the meanwhile, there was substantial raise in the price of the suit plot and the defendants opposed for the execution of the sale deed in his favour. 16. Learned counsel for the appellant relied upon the decision reported in N.P.THIRUGNANAM (Died) BY Lrs. V/s. Dr.RJAGAN MOHAN RAO, [ (1995) 5 SCC 115 ] wherein it was held that “it is settled law that remedy for specific performance is an equitable remedy and it is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 29 of the Specific Relief Act, 1963. Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had 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. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.” 17. The trial Court without properly appreciating the conduct of the plaintiff observed that late M.Babu has not issued any notice and not demanded the sale consideration. As the plaintiff was in possession of the suit plot, there is an onerous responsibility on his part to deposit the balance sale consideration on or before 31.12.2004 and to get the sale deed executed in his favour. What transpired between the plaintiff and late M.Babu is not known to the Court as he kept quiet till the demise of late M.Babu and he cannot take advantage of his own mistake. 18. In JITENDER KUMAR V/s. VIJENDER KUMAR, [2018 SCC OnLine Del. What transpired between the plaintiff and late M.Babu is not known to the Court as he kept quiet till the demise of late M.Babu and he cannot take advantage of his own mistake. 18. In JITENDER KUMAR V/s. VIJENDER KUMAR, [2018 SCC OnLine Del. 12315] it was held as that ‘the reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which make it inequitable to grant the relief of specific performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and “non-readiness”. The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeal there from routinely take two to three decades to attain finality. As a result, an owner agreeing to see a property for rupees one lakh and received rupees two thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, then the property value has risen to a crore of rupees.’ 19. In an agreement of sale even if the date is not mentioned for payment of the sale consideration, the balance sale consideration is to be paid within a reasonable time. Therefore the argument of the learned counsel for the plaintiff that in a suit for specific performance, time is not the essence of the contract is not sustainable. In an agreement of sale even if the date is not mentioned for payment of the sale consideration, the balance sale consideration is to be paid within a reasonable time. Therefore the argument of the learned counsel for the plaintiff that in a suit for specific performance, time is not the essence of the contract is not sustainable. As the plaintiff herein failed to deposit the balance sale consideration on or before 31.12.2004 and even afterwards during the life time of M.Babu, his conduct is devoid of bona fides. It is not his contention that he was always ready and willing to perform his part of contract and in fact he has also not taken out a cheque in favour of late M.Babu or deposited the same immediately after filing of the suit in the Court. Moreover, the plaintiff has not even deposited Rs.1,00,000/- cheque returned by D.W.1 along with legal notice. From the above facts, it is clear that the plaintiff want to take advantage of the sudden demise of M.Babu and helplessness nature of his wife and child to grab the suit plot for a much lesser amount than the market value and hence he is not entitled for the discretionary relief of specific performance and the trial Court erroneously decreed the suit in his favour and the same is liable to be set aside. 20. In the result, the appeal is allowed and the judgment and decree dated 30.05.2011 passed in O.S.No.7 of 2007 on the file of the learned I Additional Chief Judge, City Civil Court at Secunderabad, is set aside. However there shall be no order as to costs. 21. Miscellaneous Petitions, if any, pending in this appeal shall stand closed in the light of this final order.