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2023 DIGILAW 891 (AP)

Mogarala Nageswara Rao v. Bondilli Chandra Singh

2023-06-16

T.MALLIKARJUNA RAO

body2023
JUDGMENT : 1. The appeal, under Section 96 of the Code of Civil Procedure, 1908, is filed by the appellant/plaintiff challenging the decree and judgment dated 04.11.2009 in O.S. No.16 of 2006 passed by the Additional District Judge-cum-Family Court, Nellore (for short, ‘trial court’). 2. The parties will hereinafter be referred to as arrayed before the trial court. 3. The plaintiff's claims in the plaint are summarized as follows : (a) The defendant agreed to sell the schedule property for Rs.19,00,000/- to the plaintiff. An advance payment of Rs.1,00,000/- was made, and a sale agreement was executed on 04.03.2004. The terms of the agreement stipulated that the defendant would ensure the eviction of tenants from the ground floor shop rooms, while the plaintiff would be responsible for evicting the tenant on the first floor. After demolishing the entire house, the plaintiff was ready to pay the sale consideration of Rs.8,00,000/- to the defendant At the time of registration, agreed to pay the balance amount of Rs.10,00,000/-. However, the defendant failed to take any action to evict the three shop room tenants or vacate the portion of the house in their possession, hindering the execution of a registered sale deed in favor of the plaintiff. The first-floor tenant provided conflicting statements regarding her obligation to vacate the premises. In an abundance of caution, the plaintiff informed the defendant about this on 24.06.2004. In response, the defendant agreed to extend the time for executing the registered sale deed and handed over the title deeds. Consequently, an endorsement was made on the first and third pages of the agreement on the same date, extending the deadline until 20.07.2004. (b) Despite the agreement, the defendant failed to appear for the execution of a registered sale deed. The plaintiff sent a notice urging the defendant to collect the remaining sale consideration and execute the deed, which the defendant received and responded to, stating that the sale agreement dated 04.03.2004 had been canceled due to the plaintiff's failure to fulfill his contractual obligations. Subsequently, the plaintiff sent another notice on 26.10.2005, demanding the defendant to fulfill his contractual obligations and execute a registered sale deed. In reply, the defendant reiterated their previous stance in a letter dated 16.11.2005. The plaintiff asserts his readiness and willingness to fulfill his part of the contract, while the defendant failed to fulfill his part of the contract. 4. In reply, the defendant reiterated their previous stance in a letter dated 16.11.2005. The plaintiff asserts his readiness and willingness to fulfill his part of the contract, while the defendant failed to fulfill his part of the contract. 4. In the written statement, the defendant refuted the allegations made in the plaint. He admitted to executing the sale agreement and receiving an advance sale consideration of Rs.1,00,000/- from the plaintiff. However, he contended that the plaintiff was not prepared and willing to fulfill his contractual obligations. According to the terms of the agreement, it was the plaintiff's responsibility to evict the first-floor tenant. Nonetheless, the plaintiff failed to take any action to remove the said tenant, impeding the registration of a regular sale deed in his favour. The defendant also informed the plaintiff about the first-floor tenant filing R.C.C. No.6/1988 with the Rent Controller, Gudur, before entering into the sale agreement and provided a copy of the court's order. The defendant urgently needed money to finance his daughter's wedding and, since the plaintiff failed to fulfill his contractual obligations, the defendant had to arrange funds through interest to perform the wedding. In May 2004, the defendant managed to evict the tenants occupying the ground floor. Despite making several demands for the payment of the remaining sale consideration and, the plaintiff did not respond positively. Due to the plaintiff's failure to fulfill his obligations, including securing the balance sale consideration and evicting the first-floor tenant on time, the defendant requested an extension of the deadline from 30.07.2004 to 20.07.2004 to receive the balance sale consideration. 5. Based on the above pleadings, the trial court framed the following issues : (1) Whether the plaintiff is entitled to the specific performance of the agreement of sale dated 04.03.2004? (2) Whether the plaintiff is entitled to delivery or possession of the plaint schedule property? (3) To what relief the plaintiff is entitled? 6. During the trial, on behalf of the plaintiff, P.Ws.1 to 4 were examined and marked Exs.A1 to A15. On behalf of the defendant, D.Ws.1 to 3 were examined and got marked Exs.B1 and B2. 7. (2) Whether the plaintiff is entitled to delivery or possession of the plaint schedule property? (3) To what relief the plaintiff is entitled? 6. During the trial, on behalf of the plaintiff, P.Ws.1 to 4 were examined and marked Exs.A1 to A15. On behalf of the defendant, D.Ws.1 to 3 were examined and got marked Exs.B1 and B2. 7. After completion of the trial and hearing the arguments of either side, the suit was decreed without costs, directing the defendant to refund the advance amount of Rs.1,00,000/- to the plaintiff with interest at 18% per annum from the date of Ex.A2-Sale Agreement, i.e. on 04.03.2004 till the date of realization. Aggrieved by the judgment and decree, the plaintiff filed the present appeal. 8. The appellant's counsel argues that the trial court failed to properly interpret the Ex.A2 Agreement of Sale. The crucial aspect of the agreement is that the respondent/defendant was obligated to ensure the eviction of tenants from the three shop rooms and either register the sale deed with the building or demolish the building. The appellant, on the other hand, had to pay Rs.8,00,000/- after demolition of the building and the balance at the time of registration. The respondent was supposed to fulfil his obligation and inform the appellant about the eviction of the tenants, thereby enabling the appellant to fulfil his part of the contract. The counsel further asserts that the trial court should have recognized that the time was extended to allow the respondent to provide vacant possession of the ground floor and provide the address of the upstairs tenant. However, the respondent failed to fulfil his obligation even during the extended period. As a result, the appellant issued Ex.A.9 notice dated 19.07.2004 to the respondent. 9. The appellant's counsel further argues that the trial court, in paragraph 12 of its judgment, concluded after analyzing and evaluating the evidence that the defendant failed to prove the eviction of the three tenants on the ground floor and register the sale deed, the trial court erred by not granting the specific performance of contract. The counsel also contends that the trial court determined that the appellant/plaintiff did not violate the terms of Ex.A2 and Ex.A3, which demonstrate his good faith. The counsel also contends that the trial court determined that the appellant/plaintiff did not violate the terms of Ex.A2 and Ex.A3, which demonstrate his good faith. The appellant issued Ex.A9 and Ex.A10 notices, and the respondent did not provide any notice stating that he had fulfilled his obligations and that the appellant should pay the balance consideration to register the sale deed. Therefore, the counsel argues that the suit ought to have been decreed. Additionally, the counsel submits that the trial court dismissed the suit solely on the ground that the purpose of selling the property was defeated, but it ought to have recognized that the failure of the sale's purpose is not a legally valid reason to deny relief to the plaintiff. 10. Per contra, the learned counsel for the respondent/defendant supported the findings and observations of the trial Court. 11. Now, the points that arose for consideration are : (1) Whether the trial Court erred in not granting the relief of specific performance of agreement of sale dated 04.03.2004? (2) Whether the judgment of the trial Court needs any interference? POINT Nos.1 & 2: 12. There is no dispute concerning the proposition that a suit for a specific performance burden is always on the plaintiff to prove and aver that he is always ready and willing to perform his part of the contract throughout. Mere taking a plea in the plaint is not sufficient; the plaintiff should prove, with cogent evidence, his readiness and willingness to perform his part of the contract at all material times, i.e. from the date of the contract till the date of the suit. It is also settled law that the grant of decree for specific performance is a discretionary relief. Undoubtedly, discretion has to be exercised judicially and not arbitrarily. 13. Before considering the rival contentions raised on behalf of both sides, it is relevant to refer to the admitted facts born out from the record. 14. The defendant's mother, Radha Bayamma, was the original owner of the plaint schedule property, and the defendant got it through a Registered Will, i.e. Ex.A1 dated 17.01.1966, executed by his mother. The defendant agreed to sell the plaint schedule property for Rs.19,00,000/- and received a sum of Rs.1,00,000/- towards advance sale consideration and executed Ex.A2-Sale Agreement dated 04.03.2004. 14. The defendant's mother, Radha Bayamma, was the original owner of the plaint schedule property, and the defendant got it through a Registered Will, i.e. Ex.A1 dated 17.01.1966, executed by his mother. The defendant agreed to sell the plaint schedule property for Rs.19,00,000/- and received a sum of Rs.1,00,000/- towards advance sale consideration and executed Ex.A2-Sale Agreement dated 04.03.2004. As per the contents of Ex.A2-Agreement, the defendant agreed to sell the scheduled property to meet his family expenses and the marriage expenses of his daughter. The plaintiff had to pay the balance sale consideration of Rs.18,00,000/- within four months from the date of execution of the sale agreement, i.e. on or before 03.07.2004, and in case he failed to do so, he had to forego the advance sale consideration paid to the defendant. Similarly, if the defendant fails to execute the Registered Sale Deed within the above-stipulated date, he has to pay Rs.2,00,000/- to the plaintiff. Under Ex.A3 endorsement, the time for payment of balance sale consideration by the plaintiff and to get the Registered Sale Deed from the defendant was extended from 03.07.2004 to 20.07.2004. 15. The intention to make time stipulated for payment of balance consideration will be considered the essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale set out in the agreement. 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, regarding payment, time will be held to be the essence of the contract. 16. At the cost of repetition, it should be noted that whether time is an essence of the contract would depend on the facts and circumstances of each case. In this case, after taking into consideration the terms of the contract, the conduct of the parties and other material placed before the Court, this Court views that as per the terms of the agreement, time is the essence of the agreement and, thereby, the plaintiff had taken steps to get an extension of the time by way of Ex.A3 endorsement. 17. In Chunduru Padmavati Vs. Chunduru Narasimha Rao, 2000 (1) ALT 613 , the Combined High Court of Andhra Pradesh at Hyderabad, held as under:- “7. 17. In Chunduru Padmavati Vs. Chunduru Narasimha Rao, 2000 (1) ALT 613 , the Combined High Court of Andhra Pradesh at Hyderabad, held as under:- “7. It is well settled that in the case of contracts relating to the sale of immovable property, generally, time is not regarded as the essence of the contract. It is, however, open to the parties to make time the essence of the contract by making express provisions on that behalf in the contract. It can also be inferred from the surrounding facts and circumstances of the case. Even though time was not originally made the essence of the contract, it can be made the essence of the contract by subsequent notice. In Chandi Rani v. Kamal Rani, a Constitution Bench of the Supreme Court held that even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract, nature of the property and the object of making the contract. This principle was reiterated in the recent decision of the Supreme Court in K.S. Vidyanadam v. Vairavan, 1997 (2) Supreme 597 , where the Apex Court, in keeping with the changing times, has made a bold departure from the traditional rule that time is not of the essence of the contract in the case of immovable properties in the following words: “Indeed we are inclined to think that the rigour of the rule evolved by Courts that time is not of the essence of the contract in the case of immoveable 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 immoveable properties. It is high time we do so." 18. In Smt. Chand Rani (dead) by L.R.s. Vs. Smt. Kamal Rani (dead), (1993) 1 SCC 519 , the Hon'ble Apex Court held that it is a well-settled principle of law that in the case of the sale of immovable property, time is not the essence of the contract. However, if the parties agree to a specified time in the agreement to perform their part of the contract, then time is the essence of the contract, and the parties shall adhere to the same. 19. However, if the parties agree to a specified time in the agreement to perform their part of the contract, then time is the essence of the contract, and the parties shall adhere to the same. 19. Section 55 of the Indian Contract Act of 1872 deals with the consequences of failure to perform an executory contract at or before the stipulated time provided by the first paragraph : ‘When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promise if the intention of the parties was that time should be of the essence of the contract.’ 20. The plaintiff was examined as P.W.1. He also examined P.W.2-V. Kuchelaiah, the Scribe of the Ex.A1-Agreement. Since the execution of the agreement is not in dispute, the evidence of P.Ws.1 and 2 need not be referred to in detail. 21. It is undisputed that according to the terms of Ex.A1 Agreement, there are three shop rooms on the southern side of the scheduled property, and the defendant was responsible for evicting the tenants from those shop rooms, while the plaintiff had to evict a tenant on the first floor. The agreement also stipulated that after evicting the tenants, the defendant would execute the sale deed either by demolishing the existing structures or keeping them intact, and would pay all the applicable taxes such as house tax, water tax, and electricity charges. 22. The plaintiff, as P.W.1, testified that the tenant on the first floor, K. Varalakshamma, promised to vacate the premises based on the plaintiff's representation and request. The plaintiff claimed that he intended to raise a new building and had assured Varalakshamma of providing an equal portion in the new building or arranging a comfortable alternative premises for her. Relying on Varalakshamma's promise, the plaintiff intended to register the sale deed as a vacant site to reduce the stamp duty. However, upon close examination of the plaint's content, there is no indication of such an assurance made by Varalakshamma. Relying on Varalakshamma's promise, the plaintiff intended to register the sale deed as a vacant site to reduce the stamp duty. However, upon close examination of the plaint's content, there is no indication of such an assurance made by Varalakshamma. In contrast, Ex.A9 Notice dated 19.07.2004, issued by the plaintiff, states that the defendant did not inform him about a serious dispute between himself and the upstairs tenant. The notice mentions that the tenant filed CMA.No.15/1996, challenging the orders issued in R.C.C. No.6/1988. Ex.A8, a copy of the order in R.C.C. No.6/1988, reveals that the defendant filed an eviction petition against Kancherla Varalakshamma, citing default as the ground for eviction and the petition was allowed. The evidence on record indicates that the tenant filed CMA.No.15/1996, contesting the orders passed in R.C.C.No.6/1988. The plaintiff's case does not suggest that the tenant withdrew CMA.No.15/1996 due to assurances made by the plaintiff. Both parties made reciprocal promises as stated in the agreement. Section 51 of the Indian Contract Act, 1872 stipulates that when a contract consists of reciprocal promises to be simultaneously performed, no promisor needs to fulfil their promise unless the promisee is ready and willing to fulfil their reciprocal promise. 23. As seen from the record, the plaintiff has not produced any evidence to demonstrate that he took steps to evict the tenant as he had undertaken. Nothing on the record to suggest that the plaintiff fulfil his part of the contract. 24. According to the agreement terms, the defendant was responsible for taking steps to evict the tenants occupying the southern portion of the scheduled property. The defendant, as D.W.1 testified that he successfully evicted the tenants from the three shop rooms on the ground floor by May 2004, incurring significant expenses. To support his claim, he examined his wife as D.W.2 - Revathi Bai, who corroborated his statement. D.W.3 - Shaik Khader Basha also supported the version of DWs.1 and 2. However, the trial Court, after evaluating the evidence of D.Ws.1 to 3, concluded that the defendant did not provide any documentary evidence to substantiate the eviction of the three tenants from the shop rooms located in the southern portion of the ground floor. Consequently, the trial Court did not accept the testimony of D.Ws.1 to 3. The trial Court’s said finding is not questioned by the defendant by filing cross objection or appeal. Consequently, the trial Court did not accept the testimony of D.Ws.1 to 3. The trial Court’s said finding is not questioned by the defendant by filing cross objection or appeal. The said finding cannot be fault with. 25. It is evident that both parties agreed to perform their respective obligations on or before July 20, 2004. However, they failed to fulfil their part of the contract. Evicting tenants from tenanted premises involves a legal process, and specific procedures are outlined in the Rent Control Act for tenant eviction. It cannot be reasonably expected that either the land owner or the plaintiff (P.W.1) would have full control over evicting the tenants from the premises. In the absence of specific evidence, it would be unfair to blame the parties for not fulfilling the contract terms. There is no indication that the defendant deliberately avoided taking steps to evict the tenants from the ground floor. The plaintiff did not express willingness to obtain a registered sale deed from the defendant despite the defendant's failure to fulfil the condition of tenants eviction. The primary requirement stipulated in Ex.A1 Agreement was the eviction of tenants from the scheduled premises within the stipulated time and the defendant intended to bear the marriage expenses of his daughter with the consideration amount. In the light of the well settled principles of law referred to in the preceding paragraphs, this Court views that the parties agreed to a specified time in the agreement to perform their part of the contract and as such, the parties made time the essence of contract. Thus, it is clear that both parties failed to fulfil their part of the contract in terms of tenants eviction within the time frame. Consequently, this Court holds that both parties failed to fulfil their obligations, but they cannot be blamed since the eviction process involves legal complexities. The plaintiff examined P.W.3 and P.W.4 as witnesses and produced documentary evidence to demonstrate his financial capacity to pay the balance amount. This evidence does not significantly contribute to resolving the dispute since the defendant's main contention was not that the contract could not be performed due to the plaintiff's lack of funds. Despite the plaintiff's ability to demonstrate his financial capacity, the contract could not be performed due to the non-fulfilment of conditions by both parties within the agreed time frame. This evidence does not significantly contribute to resolving the dispute since the defendant's main contention was not that the contract could not be performed due to the plaintiff's lack of funds. Despite the plaintiff's ability to demonstrate his financial capacity, the contract could not be performed due to the non-fulfilment of conditions by both parties within the agreed time frame. As the parties did not anticipate the contingency of failure of tenants eviction, the trial Court correctly denied the discretionary relief of specific performance of the agreement, as neither party was at fault for non-performance due to the involvement of legal processes. 26. I find no good ground to differ with the finding with the trial Court. The finding recorded by the trial Court does not call for any interference. 27. In the light of the preceding discussion, I find no merits in the appeal, and it is accordingly dismissed, but in the facts and circumstances of the case, no costs. 28. Miscellaneous petitions pending, if any, in this Appeal shall stand closed.