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2022 DIGILAW 3992 (MAD)

M. Vijayakumar v. V. Subba Reddy (Died)

2022-12-22

N.MALA, S.S.SUNDAR

body2022
JUDGMENT : N.MALA, J. Prayer: Appeal Suit is filed under Section 96 of the Code of Civil Procedure, to set-aside the Judgment and Decree dated 09.11.2011 in O.S.No.101 of 2010 on the file of the Principal District Judge at Thiruvallur. This appeal is filed to set-aside the Judgment and Decree dated 09.11.2011 passed in O.S.No.101 of 2010 on the file of the Principle District Judge at Thiruvallur. 2. The appellant is the plaintiff in the suit in O.S.No.101 of 2010 on the file of the Principal District Judge, Tiruvallur. The parties will be referred to as per their rank in the Trial Court. PLEADINGS: 3. The brief facts giving rise to the present appeal are that the plaintiff approached the defendant who is the owner of the suit property, for sale of the suit property in his favour. The plaintiff and the defendant entered into an agreement for sale on 08.10.2008, where under the sale consideration was fixed at Rs.26,50,000/- and an amount of Rs.10,00,000/- was paid as advance by the plaintiff to the defendant. Among other terms and conditions of the Agreement the plaintiff agreed to pay the balance of sale consideration within 90 days of the agreement. According to the plaintiff the defendant had not disclosed that Urban Land Tax was due and payable in respect of the subject property and that inspite of repeated reminders the defendant failed to make the Urban Land Tax dues. The plaintiff in order to show his readiness and willingness to pay the balance of sale consideration and to complete the sale transaction issued a notice to the defendant enclosing the copy of the draft sale deed and posted the same to the defendant on 08.06.2009. As it was returned the plaintiff resent the said notice on 15.06.2009, which was received by the defendant on 18.06.2009. 4. The plaintiff's further case was that the defendant was postponing and giving evasive replies to receive the balance and to clear the Urban Land Tax dues. In fact, though the defendant denied it, the plaintiff on enquiry came to know that on 16.04.2010 an order was passed against the defendant demanding a sum of Rs.55,750/- and the defendant paid the same on 07.04.2010. In fact, though the defendant denied it, the plaintiff on enquiry came to know that on 16.04.2010 an order was passed against the defendant demanding a sum of Rs.55,750/- and the defendant paid the same on 07.04.2010. According to the plaintiff, the defendant vide letter dated 08.07.2010 returned the part advance amount of Rs.5,00,000/- through a Demand Draft and unilaterally cancelled the sale agreement ergo, he was constrained to file the present suit for specific performance. 5. The defendant in the written statement admitted the sale agreement, sale consideration and the advance amount. The defendant denied the plaintiff's contention that the suit property attracted Urban Land Tax. The defendant submitted that the payment of Urban Land Tax was not a condition of the Sale Agreement and as the plaintiff was not able to mobilize the balance sale consideration within the time stipulated under the Agreement, the plaintiff in order to escape from his contractual obligations invented the excuse of Urban Land Tax dues. According to the defendant time was the essence of the contract and as the plaintiff had not come-forward to pay the balance sale consideration and complete the sale within the time stipulated the defendant was forced to cancel the Sale Agreement. 6. The defendant submitted that the plaintiff even after knowing that the defendant had paid the regularization fee for converting the agricultural land into house plot on 07.04.2010 itself did not come-forward to complete the sale transaction even thereafter. The defendant further submitted that the suit itself was not maintainable, as the plaintiff had failed to satisfy the mandatory requirements of Section 16 of the Specific Relief Act, in that no specific pleadings were raised in the plaint satisfying the requirements of Section 16 of the Specific Relief Act. The defendant therefore prayed for the dismissal of the suit. 7. On the aforesaid pleadings, the trial Court framed the following issues: OTHER LANGUAGE 8. Before the Trial Court, the plaintiff examined himself as P.W.1 and two other witnesses as P.W.2 and P.W.3 and marked Exhibits A.1 to A.7 on his side. The defendant examined himself as D.W.1 and examined another witness as D.W.2, but did not mark any documents. 7. On the aforesaid pleadings, the trial Court framed the following issues: OTHER LANGUAGE 8. Before the Trial Court, the plaintiff examined himself as P.W.1 and two other witnesses as P.W.2 and P.W.3 and marked Exhibits A.1 to A.7 on his side. The defendant examined himself as D.W.1 and examined another witness as D.W.2, but did not mark any documents. The Trial Court on an analysis of the entire evidence on record both oral and documentary, held that the plaintiff was not entitled to the relief of specific performance but held that the plaintiff was entitled to the return of advance money of Rs.10,00,000/- with 6% interest per annum from the date of sale agreement i.e. from 08.10.2008, till the date of realisation and passed a decree to that effect. 9. Aggrieved by the judgment and decree of the Trial Court declining the relief of specific performance, the plaintiff has filed the above appeal. FACTUAL BACKGROUND: 10. The admitted facts are that defendant is the owner of the suit property. The plaintiff and defendant entered into an agreement of sale on 08.10.2008 for sale of the suit property by fixing the sale consideration at Rs.26,50,000/- and on the same day the plaintiff paid an advance amount of Rs.10,00,000/- to the defendant. The agreement stipulated a period of 90 days for performance. According to the plaintiff, the defendant had suppressed the fact that the Urban Land Tax dues were payable by him and in spite of the plaintiff's repeated reminders the defendant failed to pay the same. The plaintiff therefore caused a notice to the defendant exhibiting his readiness and willingness to pay the balance sale consideration with a further request to pay the Urban Land Tax dues. The plaintiff along with the notice sent a copy of the draft sale deed to the defendant on 08.06.2009 and as it was returned, he resent the notice on 15.06.2009 and the same was received by the defendant on 18.06.2009. Thereafter the defendant on 08.07.2010, unilaterally cancelled the sale agreement and returned part advance of Rs.5,00,000/- through Demand Draft drawn on State Bank of Hyderabad, Koyambedu Branch. 11. On the other hand it was the defendant's case that the plaintiff did not have funds ready with him for completing the sale transaction within 90 days and therefore in the ruse of non-payment of Urban Land Tax, the plaintiff was delayed the sale transaction. 11. On the other hand it was the defendant's case that the plaintiff did not have funds ready with him for completing the sale transaction within 90 days and therefore in the ruse of non-payment of Urban Land Tax, the plaintiff was delayed the sale transaction. The defendant denied the receipt of the letter dated 08.06.2009. 12. The defendant contended that on the plaintiff's own admission that the defendant had paid Rs.55,750/- towards the regularization fee for conversion of agricultural land into house plot on 07.04.2010, the plaintiff ought to have immediately come-forward to complete the sale transaction. As the plaintiff was delaying, the defendant left with no other alternative cancelled the sale agreement vide notice dated 08.07.2010 and returned the part advance of Rs.5,00,000/-. The further contention of the defendant was that the plaintiff did not satisfy the mandatory requirements of Section 16 of the Specific Relief Act and further the plaintiff failed to have the sale transaction completed within the time specified under the Agreement and so we was disentitled to the relief's claimed in the suit. LEGAL SUBMISSIONS: 13. In the backdrop of the above facts the learned counsel for the plaintiff submitted that the trial Court on mis-appreciation of the facts and law involved in the case declined the relief of specific performance. The learned counsel further submitted that the because of the defendant's failure to pay the Urban Land Tax dues in time, in spite of repeated reminder's by the plaintiff, the plaintiff could not complete the sale transaction in time and hence it was the defendant who had committed breach of the contract. 14. The counsel further submitted that the plaintiff was ever ready and willing to perform his part of the contractual obligations. The learned counsel for the plaintiff also submitted that time was not the essence of the contract and it is a well settled legal proposition that time is not the essence of the contract for sale of immovable property. The learned counsel therefore prayed that the appeal may be allowed and a decree for the relief of specific performance be granted. The counsel for the plaintiff cited the following Judgments: 2009 (5) SCC 182 , S.A.No.216 of 2010 dated 16.11.2016 and 2022 (7) SCC 384 . 15. The learned counsel therefore prayed that the appeal may be allowed and a decree for the relief of specific performance be granted. The counsel for the plaintiff cited the following Judgments: 2009 (5) SCC 182 , S.A.No.216 of 2010 dated 16.11.2016 and 2022 (7) SCC 384 . 15. On the other hand the learned counsel for the defendant submitted that the plaintiff was never ready and willing to perform his part of contract and there was no pleading in compliance of the mandatory requirements of Section 16 of the Specific Relief Act. The learned counsel also submitted that the law on time not being the essence of the contract for sale of immovable properties, has now changed and hence the contentions of the plaintiff deserve to be rejected. The learned counsel submitted that when a specific time was stipulated in the Agreement it cannot be said that time was not the essence of the contract. On the contention of the plaintiff that the delay was because of non-payment of Urban Land Tax dues, the learned counsel submitted that the payment of Urban Land Tax dues was not a term of the contract and the same was invented by the plaintiff to delay performance. For all the above said reasons, the learned counsel prayed that there were no merits in the appeal and the same deserved to be dismissed. 16. We have heard the submissions of the respective learned counsel and perused the entire evidence, materials on record and the Judgments cited by the appellant's counsel. ISSUES: 17. On the rival submissions of the learned counsel on both side the following issues arise for consideration in the present appeal. 1. Whether the plaintiff has satisfied the mandatory requirements of Section 16 of the Specific Relief Act. 2. Whether time is the essence of the sale agreement dated 08.10.2008. 3. Whether the plaintiff is entitled to the relief of specific performance, if not, to what other relief the plaintiff is entitled. DISCUSSION: ISSUE NO.1: 18. Adverting to the said issue, it is to be seen whether the pleadings in the plaint satisfy the requirements of Section 16(c) of the Specific Relief Act r/w explanation 2 therein. 3. Whether the plaintiff is entitled to the relief of specific performance, if not, to what other relief the plaintiff is entitled. DISCUSSION: ISSUE NO.1: 18. Adverting to the said issue, it is to be seen whether the pleadings in the plaint satisfy the requirements of Section 16(c) of the Specific Relief Act r/w explanation 2 therein. It is seen from a reading of the plaint that the only averment in the plaint as regards readiness and willingness is found in the first three lines of paragraph No.6, which is extracted here under: “6. The plaintiff has, therefore, caused a notice on showing his readiness and willingness to pay the balance and purchase the suit property and requested to clear the Urban Land Tax arrears.” 19. It is no doubt true that no specific form is required for pleading readiness and willingness, but still a reading of the plaint should reflect that the plaintiff was always ready and willing to perform his part of the contract and that too in terms thereof. It is settled law that the concept of readiness and willingness implies to two aspects. Whereas readiness refer's to the possession of funds or the capacity to mobilize funds, Willingness on the other hand refer's to the conduct of the party and the attending circumstances which would reflect his willingness throughout to perform his part of the contract in terms thereof. 20. In the context of readiness it is to be seen whether the plaintiff had the requisite funds or he had the capacity to mobilize the funds for completing the sale transaction. The pleadings as regards readiness do not disclose the availability of the funds or the capacity of the plaintiff to mobilize the funds. The plaintiff merely states that he was ready and willing to pay the balance and purchase the suit property and requested the defendant to clear the Urban Land Tax arrears. In the absence of specific pleading that the plaintiff either had the funds or he had the capacity to mobilize the funds it cannot be said that the plaintiff was ready to perform his obligations. In the absence of pleadings no amount of evidence can be looked into. In any event, even the evidence of the plaintiff on the said aspect is suspect. 21. The plaintiff in cross examination deposed as follows: OTHER LANGAUGE 22. In the absence of pleadings no amount of evidence can be looked into. In any event, even the evidence of the plaintiff on the said aspect is suspect. 21. The plaintiff in cross examination deposed as follows: OTHER LANGAUGE 22. On the contrary PW3 who was the broker for the sale transaction in his cross examination deposed as follows: OTHER LANGAUGE 23. The evidence of the plaintiff discloses that though he had the money with him, he could not disclose the manner of availability of funds. PW3 on the other hand deposed that the plaintiff was ready with the cash. In our view this contradiction raises a doubt on the plaintiff's readiness. It is no doubt true that the plaintiff does not have to jingle the coins, but nevertheless the burden is on the plaintiff to plead and prove that he had the funds or the ability to generate funds and establish that he was ever ready and willing to perform the essential terms of the contract. 24. On the aspect of willingness, it would be relevant to refer to the terms of the sale agreement. Reading of the sale agreement particularly Clause 4 makes it clear that the only obligation cast on the defendant as far as the taxes were concerned was that the defendant should pay the property tax, electricity dues till the completion of the sale. 25. Clause 4 reads as follows: OTHER LANGAUGE 26. It is to be seen whether the willingness expressed by the plaintiff is in terms of the contract or on his own terms. In this regard, it would be relevant to refer to the evidence of the plaintiff in cross examination, which is as follows: OTHER LANGAUGE 27. It is seen that the plaintiff has categorically admitted that the payment of Urban Land Tax dues was not a term of the contract. While so it cannot be said that the plaintiff was willing to perform the contract as agreed and even the pleading is to the effect that the plaintiff caused notice showing his readiness and willingness to pay the balance and purchase the suit property with a request to clear the Urban Land Tax dues. When clearance of Urban Land Tax dues was admittedly not a term of the contract at all, the plaintiff could not make his willingness dependent on the payment of Urban Land Tax dues. When clearance of Urban Land Tax dues was admittedly not a term of the contract at all, the plaintiff could not make his willingness dependent on the payment of Urban Land Tax dues. The conversion charges were admitedly paid by the defendant on 07.04.2010 but the plaintiff waited for three months thereafter and that too after cancellation of the sale agreement on 08.07.2010 by the defendant and thereafter instituted the suit on 15.07.2010. This itself shows that the plaintiff was not ever ready and willing to perform his part of the contract. 28. In the case of U.N.Krishnamurthy Vs. A.M.Krishnamurthy reported in 2022 SCCOnline 840, it is held in paragraphs 24 and 46 as follows: “24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause (c) of Section 16, it may not be essential for the plaintiff to actually tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its construction.” “46. It is settled law that for relief of specific performance, the Plaintiff has to prove that all along and till the final decision of the suit, he was ready and willing to perform his part of the contract. It is the bounden duty of the Plaintiff to prove his readiness and willingness by adducing evidence. This crucial facet has to be determined by considering all circumstances including availability of funds and mere statement or averment in plaint of readiness and willingness, would not suffice.” 29. In the present case as discussed above the plaintiff did not have the requisite funds and was insisting on the payment of the Urban Land Tax dues which was not at all a term of the contract and therefore it cannot be said that the plaintiff was ready and willing to perform his part of the contract in terms thereof. In the present case as discussed above the plaintiff did not have the requisite funds and was insisting on the payment of the Urban Land Tax dues which was not at all a term of the contract and therefore it cannot be said that the plaintiff was ready and willing to perform his part of the contract in terms thereof. A fleeting statement in the plaint or evidence does not satisfy the mandatory requirements of Section 16(c) of the Specific Relief Act. 30. In the light of the above said discussion, we are of the view that the plaintiff was never ready and willing to perform his part of the contract in terms thereof and there has been no compliance of Section 16 of the Specific Relief Act by the plaintiff. Issue No.1 is therefore answered against the plaintiff. ISSUE NO.2: 31. On the issue whether time was the essence of the contract. Clause 5 of the contract is extracted hereunder: OTHER LANGAUGE 32. It is no doubt true that at one time judicial opinion was that time was not the essence of the contract relating to immovable property. The Constitution Bench of the Hon'ble Supreme Court in the case of Chand Rani Vs. Kamal Rani reported in 1993 1 SCC 519 held as follows: “25. From an analysis of the above case-law it is clear that 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 evident: 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.” 33. In the case of K.S.Vidyanadam and others Vs. Vairavan reported in 1997 (1) SCR 993 , the Hon'ble Supreme Court held that “the rigor of the rule evolved by Courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time we do so”. It is high time we do so”. The Hon'ble Supreme Court thereafter held that when parties stipulate a prescribed time limit it should have some significance and it cannot be totally ignored. 34. Following the Constitution Bench Judgment in Chand Rani Vs. Kamal Rani (Cited supra) and K.S.Vidyanandam Vs. Vairavan (Cited supra), the Hon'ble Supreme Court in the case of Saradhamani Kandappan Vs. S.Rajalakshmi and others reported in 2011 (12) SCC 18 held in paragraph Nos.42 and 43 as follows: “42. Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may. 43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam (supra) : (i) Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored. (ii) Courts will apply greater scrutiny and strictness when considering whether the purchaser was `ready and willing' to perform his part of the contract. (iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. Courts will also `frown' upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser.” 35. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser.” 35. From the reading of the above Judgments of the Hon'ble Supreme Court which were followed in the subsequent Judgments and also in the latest Judgment reported in 2022 SCC Online SC 840, referred to supra, it is clear that when time is stipulated under the contract the same cannot be totally ignored and some sanctity has to be attached to the same. In the present case the period of 90 days was stipulated in the contract for performance and the plaintiff having failed to do so on grounds beyond the terms of the Agreement he is disentitled to the relief claimed. ISSUE NO.3: 36. The defendant in his evidence has admitted as follows: OTHER LANGAUGE 37. From the said admission of the defendant, it is clear that the defendant has not repaid the advance amount of Rs.10,00,000/-. In the light of the said admission of the defendant, we are of the view that the trial Court was right in finding that the plaintiff would be entitled to a decree for return of advance of Rs.10,00,000/- together with interest at the rate of 6% per annum from the date of sale agreement i.e. on 08.10.2008. The said issue is answered in favour of the appellant. 38. The defendant returned the part advance of Rs.5 lakhs on 08.07.2010 and cancelled the sale agreement. It was only thereafter that the plaintiff filed the suit. No reasons were adduced by the plaintiff as to why he waited for over three months from the date of payment of reconversion charges by the defendant when his case was that he was waiting for the defendant to pay the same. The conduct of the plaintiff in waiting till the defendant cancelled the Agreement to file the suit disentitles him in our considered view to the discretionary relief of specific performance. 39. For all the above reasons, We confirm the Judgment and Decree of the trial Court and direct the defendant to return the advance amount of Rs.10,00,000/-, with interest of 6% per annum from the date of sale agreement i.e. 08.10.2008 till the date of realisation with proportionate costs. 39. For all the above reasons, We confirm the Judgment and Decree of the trial Court and direct the defendant to return the advance amount of Rs.10,00,000/-, with interest of 6% per annum from the date of sale agreement i.e. 08.10.2008 till the date of realisation with proportionate costs. The appeal is therefore dismissed and the Judgment and Decree of Trial Court is confirmed. However there shall be no order as to costs.