Research › Search › Judgment

Andhra High Court · body

2023 DIGILAW 1365 (AP)

Myneni Purnachandra Rao, S/o. Subbaiah v. Pulipati Badrinarayana, S/o. Venkateswara Rao

2023-10-04

V.R.K.KRUPA SAGAR

body2023
JUDGMENT : This is the vendee’s appeal under Section 100 C.P.C. He filed O.S.No.112 of 2007 seeking for specific performance of an agreement for sale dated 10.11.1986 with a direction to the defendants to execute a registered sale deed in favour of the plaintiff and for delivery of possession of the property and for costs and such other reliefs. After due trial, the learned Principal Senior Civil Judge, Nandyal dismissed the suit. Aggrieved by it, he preferred an appeal before the learned District Court in A.S.No.1 of 2010. After due hearing, the learned III Additional District Judge, Kurnool at Nandyal by a judgment dated 06.01.2012 dismissed the appeal and thereby confirmed the judgment of the trial Court. In pursuit of his prayer, plaintiff is now in this second appeal. 2. Respondent Nos.1 and 2 are natural brothers to each other and they were the defendants in the suit and respondents in this appeal. 3. On 22.06.2012 a learned Judge of this Court admitted the appeal on the following substantial questions of law : (i) Whether time is the essence of the contract and the defendants had committed default in performing their part of contract from the material evidence available and appreciated by the Courts below? (ii) Whether the delay of 20 years in seeking the relief of specific performance entitles for equitable relief of specific performance? 4. Learned counsel on both sides submitted arguments and cited precedent. 5. The following are the facts admitted on both sides : (a) The property in dispute is Ac.0.81 cents of wet land in R.S.No.437/1 situate in Mulasagaram Village of Nandyal Sub-Division of Kurnool District. Originally it was owned by the plaintiff and one Cherukuru Sakkubayamma. Together they sold this property to defendants under a registered sale deed dated 30.09.1982. Thereafter defendants being owners continued to hold the title and possession over that property. Then they intended to sell it and in that process plaintiff offered to purchase the same and therefore between them an agreement for sale dated 10.11.1986 came to be executed. That agreement for sale was signed by both parties. The sale consideration was fixed at Rs.2,25,000/-. On the date of agreement for sale, vendee/plaintiff/appellant paid Rs.10,000/- towards part of agreed sale consideration. That was acknowledged in the agreement for sale. The balance sale consideration remained at Rs.2,15,000/-. That agreement for sale was signed by both parties. The sale consideration was fixed at Rs.2,25,000/-. On the date of agreement for sale, vendee/plaintiff/appellant paid Rs.10,000/- towards part of agreed sale consideration. That was acknowledged in the agreement for sale. The balance sale consideration remained at Rs.2,15,000/-. The agreement stipulated that the vendee/plaintiff was given time to pay Rs.1,00,000/- on or before 31.03.1987. Vendee/plaintiff was given further time to pay Rs.1,15,000/- on or before 09.09.1987. If payments were made within those stipulated dates, it was agreed between parties, that the vendors/defendants should execute a registered sale deed in favour of vendee/plaintiff at the expenses of the plaintiff. A further stipulation indicates that in the event of vendee/plaintiff delaying his payments, he was to pay 15% interest concerning Rs.1,00,000/- and the interest component had to be computed from 31.03.1987 till 09.09.1987. It is further stipulated that in the event of delay on part of the plaintiff in making payment of that Rs.1,00,000/- as well as the other scheduled payment of Rs.1,15,000/- on or before 09.09.1987, on the entire balance sale consideration of Rs.2,25,000/- the plaintiff had to pay 18% interest and this interest component continues till the entire payment was made and registration of regular sale deed was effected. (b) This agreement for sale is the one that fell into dispute leading to the litigation. Based on this agreement for sale plaintiff sued the defendants. While filing the suit plaintiff voluntarily deposited Rs.9,87,735/- in the trial Court and that represents the balance sale consideration along with interest calculated at the rates mentioned in the agreement for sale. The plaint was presented on 18.06.2007. Thus, concerning agreement for sale dated 10.11.1986 the suit was filed by vendee on 18.06.2007 which means on expiry of 20 years 7 months time. In the plaint it is alleged that plaintiff was offering for payment of balance sale consideration but the defendants on lame excuses dodged the matter. Therefore, plaintiff got issued a notice dated 01.06.2007 and the defendants received it and got issued a reply notice dated 11.06.2007 wherein they made false allegations. In the plaint it is mentioned, plaintiff has been ready and willing to perform his contractual obligations throughout. With such averments the suit was laid. Therefore, plaintiff got issued a notice dated 01.06.2007 and the defendants received it and got issued a reply notice dated 11.06.2007 wherein they made false allegations. In the plaint it is mentioned, plaintiff has been ready and willing to perform his contractual obligations throughout. With such averments the suit was laid. (c) Defendants filed their written statement stating that despite their demands plaintiff never came forward to pay the balance sale consideration and in fact refused to purchase the property and now at this length of time this false litigation was brought in and they sought for dismissal of the suit. 6. Learned Principal Senior Civil Judge settled the following issues for trial : (i) Whether the plaintiff has been ready and willing to perform his part of contract? (ii) Whether the plaintiff has rescinded the agreement for sale if so, whether the plaintiff was prepared to forfeit the earnest money of Rs.10,000/-? (iii) Whether the time is essence of the contract of sale? (iv) Whether the sale agreement is barred by time? (v) Whether the plaintiff is entitled for specific performance of agreement of sale dated 10.11.1986? (vi) To what relief? 7. At the trial, plaintiff testified as PW.1 and got marked Exs.A.1 to A.7. 1st defendant testified as DW.1 and no documentary evidence was adduced. 8. Learned trial Court extensively considered the evidence on record and terms and conditions of agreement for sale/Ex.A.1 and Section 16(c) of the Specific Relief Act, 1963 and considered several legal authorities cited before it on both sides and considered all the contentions raised on both sides and held that vendee/plaintiff failed to prove his readiness and willingness to perform his part of the obligation and the suit was barred by limitation and even if it was not barred by limitation plaintiff failed to approach the Court within a “reasonable time”. According to the learned trial Court, as a matter of principle of law, time may not be the essence of the contract. Having said so, the learned trial Court also observed that since defendants/vendors by the very terms of Ex.A.1-agreement for sale indicated their need for selling the property for the purpose of securing money for their business investment, mentioned various dates for payments and the outer date for payment of balance sale consideration those terms cannot be ignored. Having said so, the learned trial Court also observed that since defendants/vendors by the very terms of Ex.A.1-agreement for sale indicated their need for selling the property for the purpose of securing money for their business investment, mentioned various dates for payments and the outer date for payment of balance sale consideration those terms cannot be ignored. At more than one place the learned trial Court recorded that there has been no plausible explanation on part of the plaintiff/vendee about this long length of delay by more than two decades in approaching a Court for specific performance and in seeking a discretionary relief. It finally came to an emphatic conclusion that plaintiff had not made out a case for specific performance and dismissed the prayer in the suit accordingly. 9. Vendee in his first appeal argued before the learned Additional District Judge that the time is not the essence of the contract. That the balance sale consideration could be paid along with interest and he accordingly deposited the entire balance sale consideration and interest into the Court and that shows his readiness and willingness and that there is no delay on part of plaintiff in suing the defendants and questioned the correctness of the judgment of the trial Court. Stout protest was raised by the vendors/defendants before the learned first appellate Court. On hearing submissions on both sides, the learned first appellate Court settled the following points for its consideration : (1) Whether the plaintiff is entitled for specific performance of agreement of sale dated 10.11.1986? (2) To what relief the appellant/plaintiff is entitled? 10. After considering the facts on record and assessing the evidence on record and observing the reasons given by the learned trial Court and after referring to the various precedent cited on both sides, the learned first appellate Court observed that the litigation initiated by the plaintiff could be said as one to gain unfair advantage and he is using the agreement for sale as an instrument of oppression and plaintiff was not fair and failed to approach the Court within reasonable time and there was total inaction on his part for 20 years. In the view of the learned first appellate Court the recitals in Ex.A.1 convinced it to hold that time was the essence of the contract. In the view of the learned first appellate Court the recitals in Ex.A.1 convinced it to hold that time was the essence of the contract. It agreed with the conclusions reached by the trial Court and found no merits in the arguments of the appellant/plaintiff and accordingly dismissed the appeal and confirmed the judgment of the trial Court. 11. It is in the context of the above facts and circumstances, the substantial questions of law raised in this appeal fall for consideration. 12. In a Second Appeal filed against concurrent findings of both the Courts below the amplitude of powers of this Court under Section 100 C.P.C. are brought to the attention of this Court by the learned counsel for respondents by citing Thulasidhara v. Narayanappa, (2019) 6 SCC 409 . Explaining the scope of interference on part of this Court while exercising jurisdiction under Section 100 C.P.C., their Lordships have laid the law to the effect that reappreciation of entire evidence on record is impermissible unless the Courts below reached to conclusions based on inadmissible evidence or without evidence. Interference is permissible only when the impugned judgments are contrary to the mandatory provisions applicable to the questions that arose between parties. 13. On the above principles of law nothing is debated before this Court. Therefore, within the confines of the above-referred principles this Court must address the dispute. 14. Learned counsel for appellant argued that the purport of Section 16(c) of the Specific Relief Act, 1963 was not properly appreciated by the Courts below. The Courts below failed to consider the conduct of the respondents/defendants/vendors and failed to notice that they never rescinded the contract and never issued a notice demanding payments of balance sale consideration. That the property is still with the defendants and therefore, they did not alter their possession in any manner and hence, granting the relief prayed by the appellant would not cause any injustice to the defendants/respondents. Learned counsel further argued that time is not essence in this agreement for sale and there has been no evidence indicating any hike in prices. Therefore, there would be no loss to the defendants if specific performance is granted in favour of the appellant. 15. Learned counsel further argued that time is not essence in this agreement for sale and there has been no evidence indicating any hike in prices. Therefore, there would be no loss to the defendants if specific performance is granted in favour of the appellant. 15. As against it, the learned counsel for respondents/ defendants contended that the judgments of the Courts below are based on evidence and all the conclusions are reached only after furnishing elaborate reasons and there is no perversity in those findings. Mere alternative view that could be taken by this Court in second appeal cannot allow this Court to substitute its view as long as the view taken by the Courts below are reasonable on the evidence available before them. That it is an urban property and litigation was initiated 21 years after the agreement for sale and the plaint and the evidence of plaintiff would indicate serious laches in initiating the litigation. That the sale was intended by the respondents/vendors with a view to get money for their business investment and enormous delay on part of plaintiff decimated their plans. That the evidence on record would indicate that the defendants/vendors indicated their refusal to sell to the plaintiff way back in the year 1987 when the vendee/plaintiff failed to offer even the first installment of sale consideration. Learned counsel further argued that plaintiff issuing notice by itself does not amount to his readiness and willingness as contemplated under Section 16(c) of the Specific Relief Act and that the notion of time is not essence of contract was doubted by the Hon’ble Supreme Court of India in Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18 espousing for reformulation of the idea. It is for these reasons, they sought dismissal of the appeal. 16. After thoughtful consideration of material placed on record and the earnest arguments advanced on both sides, the following aspects are required to be noticed : An agreement for the sale of immovable property contemplates intendment of conveyance of title in future from one to the other. Every bargain is settled for mutual benefit of both parties to the contract. They are evenly placed when they entered into Ex.A.1-agreement for sale. Vendors intended to convey the property with a view to get money to use the money for a purpose that would serve better for them. Every bargain is settled for mutual benefit of both parties to the contract. They are evenly placed when they entered into Ex.A.1-agreement for sale. Vendors intended to convey the property with a view to get money to use the money for a purpose that would serve better for them. Vendee intends to obtain the title over the property in contemplation to raise his wealth by investing in the real property. Each side incorporated terms in the agreement for sale that would enable both sides to reap the required benefits. In the case at hand, Ex.A.1-agreement for sale was executed by both sides on 10.11.1986. The appellant is the vendee. In his evidence he stated that he already owns Acs.46.00 cents of land. He said that some of his lands are nearer lands that he intended to purchase under Ex.A.1. At one point in time this very land was owned by him. Therefore, he knew the type of land he agreed to purchase. In his evidence PW.1/appellant/plaintiff stated that the respondents/ defendants approached him and requested him to purchase the land and he agreed to it. Respondents mentioned in Ex.A.1 that they intended to sell this property with a view to acquiring money to invest the same in business of manufacturing iron sheets. Total sale consideration is Rs.2,25,000/-. Appellant paid Rs.10,000/- on 10.11.1986 which was the date on which Ex.A.1-agreement for sale was executed. Looking at the kind of richness of the appellant, who owned Acs.46.00 cents of land who also once owned this very land, it was not difficult for him to pay the entire sale consideration and obtain a regular registered sale deed at once. However, that was not the way in which he settled for the bargain. By the very terms of Ex.A.1-agreement for sale he intended to pay the entire sale consideration in two further installments. Parties were at liberty to agree on it. Parties were also at liberty either to have a clause for payment of interest or not to have any clause for payment of interest. The immovable property has been in possession of the vendors/respondents. The vendee/appellant was not in possession of the property and he had paid only Rs.10,000/- out of Rs.2,25,000/-. Thus, he parted with a small portion of the agreed sale consideration. This is not a case of lending and borrowing of any amount. The immovable property has been in possession of the vendors/respondents. The vendee/appellant was not in possession of the property and he had paid only Rs.10,000/- out of Rs.2,25,000/-. Thus, he parted with a small portion of the agreed sale consideration. This is not a case of lending and borrowing of any amount. Though property was not in the possession of the appellant, the appellant agreed to pay the balance sale consideration in two installments and further agreed to pay the same with interest in the event of his failure to pay the balance sale consideration within the stipulated dates. What does it indicate is a matter for analysis. Be it noted once again, that it is not a case of appellant’s financial incapacity that is either alleged or argued. The fact that respondents stipulated for payment of interest on delayed payment is indicative of the fact that they intended to expedite the deal to reach its culmination as quickly as possible. It is only for that reason; the vendee was asked to pay his own money with interest in the event of delay. There are two different dates for the two subsequent payments that are mentioned in the agreement for sale. The first payment was to be paid on or before 31.03.1987. By that date vendee/appellant did not pay the agreed part consideration of Rs.1,00,000/-. About this aspect of the matter appellant as PW.1 testified saying that he was requesting the vendors to measure the land and receive the remaining sale consideration and he requested them on several occasions but they were postponing it giving lame excuses. This evidence of PW.1 is devoid of any dates of himself raising demands against the vendees inviting them to perform their part of the contract. In that context, the vendors questioned him in cross-examination to elicit the details of his assertion. In his cross-examination PW.1 said that 10 days prior to the outer date for his payment on 31.03.1987 he went to Vijayawada and found respondent No.1 and offered him Rs.1,00,000/- but respondent No.1 declined to receive the payment saying that his brother/respondent No.2 was not available. PW.1 further said that respondent No.1 told him that he and his brother would come to Nandyal where the appellant lives and would receive the payment. PW.1 further said that respondent No.1 told him that he and his brother would come to Nandyal where the appellant lives and would receive the payment. According to appellant, the respondents never came to him and never met him and never asked him to pay that Rs.1,00,000/-. What was to be done in such circumstances is a matter for consideration. Since the appellant was waiting for respondents to come and meet him and receive the money and since the respondents never came to him was there anything on part of the appellant to do then. One who is eager to complete the deal would have certainly put another effort in this regard. Appellant would have sent a word to the respondents or would have issued a notice inviting the respondents to come and receive money or would have gone to the respondents once again and made the payment. In his own showing appellant did nothing of this. If respondents had promised to come and receive money and if they did not comply with that promise that may have been taken by the appellant as one of refusal on part of respondents to complete the deal. If that were to be considered as refusal on part of the respondents, the appellant ought to have initiated legal process at that point of time in the year 1987. Even that he did not do. Even according to appellant’s own showing the next visible thing he did was only 20 years later when he issued Ex.A.1-notice dated 01.06.2007 expressing his desire to have the agreement for sale enforced. Could a reasonable prudent man ever agree that a vendee intending to purchase a property having parted with Rs.10,000/- would wait for 20 years without taking any step forward either for culmination of the contract or for dissolving the contract. It is clear the Courts below categorically held that by his own conduct appellant demonstrated to the Courts that he has not been ready and willing to perform his part of the contract. Payment of balance sale consideration is an obligation on part of the appellant. If the vendors did not receive the payment, nothing prevented him from sending the payment by known modes of remittance. He did not do that. Payment of balance sale consideration is an obligation on part of the appellant. If the vendors did not receive the payment, nothing prevented him from sending the payment by known modes of remittance. He did not do that. This demonstrated inaction on part of appellant convinced the Courts below to think that appellant was not ready and willing to perform his part of the contract. Section 16(c) of the Specific Relief Act mandates the appellant to plead and prove that he has always been ready and willing to perform the essential terms of the contract. Payment of consideration is the most essential term of a contract. Evidence on record clearly discloses that for all these years appellant did not evince any desire to pay balance sale consideration and obtain a registered sale deed. The contention of the appellant is curious. He states that since there is a clause concerning payment of interest he could be making his payment at any time along with interest and that shall be considered as sufficient compliance of contractual obligations on his part. Precisely such conduct is condemned by this Court in Rudram Builders, Secunderabad v. Mir Asharafuddin, 2011 (5) ALD 554 . That was a case where the vendee instead of making payment of agreed sale consideration at one time or in two installments was making payments in small measures in about 34 occasions. There were other facts that fell for consideration. It was in those circumstances a learned Judge of this Court held that the conduct of the vendee/plaintiff indicated as if he was repaying the loan installments and his conduct did not show that he was obliged to make payment of sale consideration for an immovable property. Such conduct was found inequitable and indicates absence of bona fides disentitling specific performance. 17. In the case at hand, the attitude of the appellant indicates that vendors would not lose anything because he is prepared to pay interest to them. Be it noted, vendors did not agree for sale consideration with any interest. They agreed to receive sale consideration in installments even without interest. They incorporated the clause of interest only when payments were not made at the scheduled dates. Thus, the clause concerning interest was only a contemplated catalyst. Be it noted, vendors did not agree for sale consideration with any interest. They agreed to receive sale consideration in installments even without interest. They incorporated the clause of interest only when payments were not made at the scheduled dates. Thus, the clause concerning interest was only a contemplated catalyst. Thus, what was intended to excite the appellant to complete the deal is sought to be argued as one of broad heartedness on part of appellant to pay interest. This ingenious contention has no moral and no legal basis. Be that as it may. According to Ex.A.1, if there was failure to pay Rs.1,00,000/- by 31.03.1987 the appellant was to pay 15% interest on that Rs.1,00,000/- and make such payment on or before 09.09.1987. The pleadings and evidence of appellant do not indicate any positive act on part of the appellant in making any payment including interest between those dates. When once appellant was aware that 10 days prior to 31.03.1987 respondents declined to receive money he must have been on his guard to safeguard his interest that accrued to him by virtue of Ex.A.1. His failure to make any payments and his failure to show any efforts on his part in making any payments is a clear indication of disinclination on the part of the appellant in having the deal materialized. Therefore, Courts below are right in holding that appellant has failed to demonstrate his readiness and willingness and therefore, he was not entitled for specific performance of agreement for sale. 18. The contention of the appellant is that the values of the land did not go up, that the respondents have been still owning and possessing this property without any further encumbrances and that the respondents never issued a notice rescinding the agreement entered between them under Ex.A.1 should have been considered for granting relief in his favour. On this basis, the appellant argues that there is default on part of respondents and for that his suit for specific performance should be decreed. There is absolutely no merit in this contention. Ex.A.1 does not indicate any further obligation on the part of respondents till the appellant remitted all the payments due under the agreement. Simply because respondents did not revoke the contract does not mean that appellant is entitled for specific performance of it. There is absolutely no merit in this contention. Ex.A.1 does not indicate any further obligation on the part of respondents till the appellant remitted all the payments due under the agreement. Simply because respondents did not revoke the contract does not mean that appellant is entitled for specific performance of it. If there is a positive obligation on part of the respondents to do anything, only then the appellant can contend about failures on part of respondents but not otherwise. In the case at hand, there is no occasion for respondents to do anything positive to compel further obedience from the appellant. The entire obligation has been on the shoulders of appellant and the appellant never fulfilled any of his obligations for a period of 20 years and more. 19. Learned counsel for appellant cited the celebrated judgment of the Hon’ble Supreme Court of India in Chand Rani v. Kamal Rani, (1993) 1 SCC 519 . That is a case where their Lordships expounded the principle as to whether time is essence of contract or not. Their Lordships held that there is no presumption to hold that time is essence of the contract. In that case vendors issued a notice to vendee demanding payments and the vendee failed to make the payments. In those circumstances, their Lordships refused to grant specific performance. Learned counsel for appellant also cited Gomathinayagam Pillai v. Palaniswami Nadar, AIR 1967 SC 868 . That was also a case where their Lordships dealt with the concept as to time is essence of contract or not. On facts their Lordships found that the vendee has not been ready and willing to perform his part of the contract. In those circumstances, their Lordships refused to grant the relief of specific performance. 20. In the case at hand, when once it is demonstrated that appellant has not been ready and willing to perform his part of the contract, the question whether time is essence of the contract or not remains for academic discussion and nothing more. The stipulation of clauses for interest were rightly considered by the learned first appellant Court holding that they are essential terms of the contract. This Court finds no flaw in that approach. Learned counsel for respondents cited Jagjit Singh v. Amarjit Singh, (2018) 9 SCC 805 . The stipulation of clauses for interest were rightly considered by the learned first appellant Court holding that they are essential terms of the contract. This Court finds no flaw in that approach. Learned counsel for respondents cited Jagjit Singh v. Amarjit Singh, (2018) 9 SCC 805 . Their Lordships expounded Section 16(c) of the Specific Relief Act and categorically held that a vendee who failed to prove his readiness and willingness to perform his part of obligations is disentitled from seeking specific performance. 21. The prescribed period of limitation is three years in terms of Article 54 of the Schedule of the Limitation Act. In this regard it has to be stated that way back in the year 1987 when the respondents refused to receive money of Rs.1,00,000/- allegedly sought to be paid by appellant and when respondents never met the appellant thereafter the reasonable inference any prudent man would have drawn from it was that there was refusal on part of respondents. If that is the case, the finding of the learned trial Court which was upheld in the first appeal by the learned Additional District Judge that the suit was barred by limitation cannot be disputed as the suit was filed 20 years thereafter. 22. From the discussion made above, it is clear that looking at the terms of the agreement for sale and the surrounding circumstances and conduct of parties on both sides, there was no default committed by respondents and the time is essence of the contract and the Courts below rightly appreciated the evidence and reached to legally correct conclusions and the appellant who invoked the legal adjudication 20 years after agreement for sale is not entitled for specific performance and the observations of the Courts below that it is inequitable to grant a relief of specific performance is justified on facts and law. Both the substantial questions of law are answered against the appellant. 23. In the result, this Second Appeal is dismissed with costs. As a sequel, miscellaneous applications pending, if any, shall stand closed.