K. Sirajuddin Khan Khatak v. P Liakath Ali Khan, Rep. by his GPA Holder
2025-02-04
VENUTHURUMALLI GOPALA KRISHNA RAO
body2025
DigiLaw.ai
JUDGMENT : Venuthurumalli Gopala Krishna Rao, J. The appeal is filed against the judgment and decree dated 03-3-2005 in O.S.No.131 of 1997 passed by the learned Senior Civil Judge, Kadapa, Kadapa District. The suit is filed by the General Power of Attorney Holder of the plaintiff against the defendants 1 to 5 for specific performance of an agreement of sale dated 30-5-1994 in respect of the plaint schedule property and to direct the defendants 1 and 5 to receive the balance sale consideration and execute a sale deed in favour of the plaintiff. 2. The case of the plaintiff as narrated in the plaint, in brief, is as follows: (a) It is pleaded that the 1 st defendant is the owner of the schedule property house bearing No.19/22 in Kadapa town and he offered it for sale to the plaintiff and the bargain was settled at Rs.7,00,000/- as sale consideration and an agreement dated 30-5-1994 was executed by the 1 st defendant in favour of the plaintiff after receipt of advance of Rs.1,50,000/-. The plaintiff intended to go to Kuwait and therefore, he authorized one Sardar Khan to act as his agent and told the defendants 1 and 2 that his agent would pay the balance sale consideration of Rs.5,50,000/- by 31-10-1994 on his behalf and the 1 st defendant should execute a sale deed in favour of Sardar Khan and the defendants 1 and 2 agreed for the same and thereafter, the plaintiff went to Kuwait. (b) It is further pleaded that the 1 st defendant undertook to discharge the debt due to the State Bank of India and clear of all taxes to the Municipality and Electricity Board by the date of execution of the deed. Again on 19-9-2004, the 1 st defendant wanted Sardar Khan to adjust Rs.40,000/- and Sardar Khan sent the said amount of Rs.40,000/- to the 1 st defendant through the 3 rd defendant and the same was received by the 2 nd defendant and the 2 nd defendant told that he would acknowledge Rs.40,000/- later. The 1 st defendant in order to defeat the right of the plaintiff executed a fraudulent and nominal gift deed dated 31-5-1997 in favour of the 5 th defendant, who is no other than his own daughter. Hence, the suit. 3.
The 1 st defendant in order to defeat the right of the plaintiff executed a fraudulent and nominal gift deed dated 31-5-1997 in favour of the 5 th defendant, who is no other than his own daughter. Hence, the suit. 3. Brief averments in the written statement filed by the 1 st defendant, which was adopted by the 2 nd defendant by filing a memo, are as follows: (a) The 1 st defendant admitted about the agreement of sale dated 30-5-1994 for Rs.7,00,000/- and also receipt of Rs.1,50,000/- as an advance. It is contended that time is the essence of the contract. The plaintiff has to pay the entire sale amount to the 1 st defendant on or before 31-10-1994 and get a regular registered sale deed. There was agreement to the effect that tenancy advance of Rs.75,000/- will be adjusted towards the plaintiff and the lease of the 4 th defendant should be continued. The entire building was offered as security to obtain loan from the bank. The schedule property is a small portion of offered building. At the time when the bank invoked the mortgage, the 1 st defendant undertook to discharge the same and as such, mortgage clearance is not a condition precedent to registration. (b) It is further contended that an amount of Rs.1,00,000/- was paid to the 1 st defendant towards part payment of the suit agreement and an endorsement was made to that effect on 16-9-1994. The plaintiff has no capacity to purchase the schedule property and he entered into the suit agreement with a thought that the suit schedule property fetches more value in future and somebody purchase it from him and thereby he will be benefitted and the plaintiff subsequently failed to perform his part of contract due to latches on his part. The General Power of Attorney executed by the plaintiff is not valid and the suit is barred by limitation and there is no cause of action to file the suit against the defendants 2 to 4 and they are unnecessary parties to the suit and the suit is bad for mis-joinder of necessary parties and suffered from non-joinder of necessary parties. He prayed to dismiss the suit with costs. 4.
He prayed to dismiss the suit with costs. 4. The 3 rd defendant filed a written statement contending that he has nothing to do with the alleged agreement of sale dated 30-5-1994 and he is not a necessary party to the suit and the suit is liable to be dismissed. 5. The 4 th defendant filed a written statement admitting that he is a tenant of the 1 st defendant in the schedule property and he paid an amount of Rs.75,000/- as advance to the 1 st defendant and eviction shall be only through legal process. It is further contended by him that he is not a proper party to the suit and he prayed to dismiss the suit with costs. 6. The 5 th defendant remained set ex parte 7. Based upon the pleadings of both the parties, the trial Court framed the following issues for trial: (1) Whether the plaintiff has paid Rs.40,000/- to the 1 st defendant on 19-9-1994 through the 3 rd defendant ? (2) Whether the plaintiff had capacity to pay the balance of sale consideration ? (3) Whether the suit is barred by limitation ? (4) Whether the defendants 2 to 5 are proper and necessary parties to the suit ? (5) Whether the plaintiff is entitled for specific performance of contract as prayed for ? and (6) To what relief, the plaintiff is entitled ? 8. During the course of trial, on behalf of the plaintiff, P.Ws.1 to 5 were examined and Exs.A-1 to A-12 were marked. On behalf of the defendants, D.Ws.1 to 3 were examined and Ex.B-1 was marked. Exs.C-1 and C-2 were also marked. 9. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs, directing the plaintiff to deposit the balance sale consideration of Rs.3,35,000/- before the Court within 15 days from the date of judgment, permitting the GPA Holder of the plaintiff to deposit the said amount on behalf of the plaintiff and directing the defendants 1, 2, 4 and 5 to execute a registered sale deed in favour of the plaintiff within one month from that day.
Further, the defendants 1, 2 and 5 were directed to receive the said amount of Rs.3,35,000/- from the Court and the costs relating to stamp duty and registration fee shall be paid by the plaintiff or GPA Holder of the plaintiff on behalf of the plaintiff. 10. Aggrieved by the said judgment and decree of the trial Court in decreeing the suit, the defendants 1 and 2 have preferred the present appeal. 11. During the pendency of the appeal before this Court, the GPA Holder of 1 st respondent was discharged as per Court order dated 04-11-2024 in I.A.No.1 of 2018. 12. Heard Sri O. Manoher Reddy, learned Senior Counsel on behalf of Sri T. Diwakar Reddy, learned counsel for the appellants/defendants 1 and 2 and Sri L.J. Veera Reddy, learned counsel for the 1 st respondent/plaintiff. 13. The learned Senior Counsel for appellants/defendants 1 and 2 would contend that the learned trial Judge ought to have noticed the fact that when there is no specific clause mentioned in the agreement of sale that on or before 31-10-1994, sale deed should be executed by tendering the balance amount and though the time is an essence of the contract, the same has not been considered by the learned trial Judge. He would further contend that the learned trial Judge failed to notice that very conduct of the plaintiff in not taking steps before stipulated time by 31-10-1994 or at least afterwards till the date of institution of the suit, it shows the incapacity of plaintiff to pay the balance of sale consideration. He would further contend that the learned trial Judge failed to notice that the plaintiff had appointed P.W.1 as General Power of Attorney Holder on 15-01-1995, much after the time stipulated in the agreement of sale only to drag on the issue. He would further contend that the learned trial Judge ought to have noticed that the plaintiff never approached in-person or through his Advocate, much less by a legal notice, to express his readiness and willingness within the stipulated time and he would further contend that the judgment and decree passed by the learned trial Judge is contrary to law and the appeal may be allowed by setting aside the judgment and decree passed by the learned trial Judge. 14.
14. Per contra, the learned counsel for 1 st respondent/plaintiff would contend that on appreciation of the entire evidence on record, the learned trial Judge rightly decreed the suit and there is no need to interfere with the finding given by the learned trial Judge and that the appeal may be dismissed by confirming the judgment and decree passed by the learned trial Judge. 15. Now, the points for determination in the present appeal are: (1) Whether the time is essence of contract ? (2) Whether the 1 st respondent/plaintiff is entitled to the relief of specific performance of agreement of sale dated 30-5-1994 ? (3) Whether the judgment and decree passed by the trial Court needs any interference ? and (4) To what extent ? 16. Point No.1: Whether the 1 st respondent/plaintiff is entitled to the relief of specific performance of agreement of sale dated 30-5-1994 ? The 1 st respondent/plaintiff herein is claiming the relief of specific performance of agreement of sale dated 30-5-1994. The undisputed facts are that the 1 st appellant entered into an agreement of sale with the plaintiff on 30-5-1994 with an intention to sell the schedule property for a consideration of Rs.7,00,000/- against which, Rs.1,50,000/- was received in advance. Further, there is a time stipulation that the plaintiff has to pay the remaining balance of sale consideration of Rs.5,50,000/- within five months i.e. on or before 31-10-1994 and the plaintiff has to pay the remaining balance of sale consideration within a stipulated date and the 1 st appellant has to execute a sale deed after receipt of balance of sale consideration. It was also further agreed that an amount of Rs.75,000/- deposited towards advance amount has to be adjusted towards balance of sale consideration and lease of the 4 th defendant should be continued. It was also not in dispute by both the parties that the plaintiff paid an amount of Rs.1,00,000/- on 06-9-1994. The contention of the appellants is that the remaining sale consideration of Rs.4,75,000/- has to be paid within five months i.e. on or before 31-10-1994 and after receipt of the same, the 1 st defendant will execute a regular registered sale deed in favour of the plaintiff and also he will clear the Municipal tax and electricity charges by the date of registration.
It is also the further contention of appellants that the 1 st appellant also undertook to discharge the debt due to the State Bank of India on or after execution of registered sale deed and if any problems will arose, he will take steps to mortgage the remaining property by excluding the suit schedule property. It is also made it clear that the entire building was offered as security to obtain a loan from the bank and the suit schedule property is one small room and mortgage clearance is not a condition precedent to registration. Another specific recital made in Ex.A-2 is that if the plaintiff failed to pay the remaining balance of sale consideration of Rs.4,75,000/- to the 1 st defendant, the advance amount will be forfeited and the said agreement will stand cancelled. The contention of the plaintiff is that he sent an amount of Rs.40,000/- through the 3 rd defendant to the 1 st defendant and he received the same. The said amount is severely disputed by the appellants. The 1 st appellant pleaded that he has not received any amount of Rs.40,000/- either from the plaintiff or any other person. 17. The legal position in this regard is no more res integra. The same has been well settled that the grant of relief of specific performance of agreement is not an automatic and it is discretionary relief, the same is required to be exercised judiciously, sound and reasonably. 18. In the case of Saradamini Kandappan v. S. Rajalakshmi, [ (2011) 12 SCC 18 ], the Apex Court held as follows: “ 42.1. While exercising discretion in suits for specific performance, the courts should bear in mind that when the parties prescribed a time for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored. 42.2. The courts will apply greater scrutiny and strictness when considering whether purchaser was ready and willing to perform his part of the contract. 42.3. Every suit for specific performance need not be decreed merely because it is filed within the period of limitation, by ignoring time limits stipulated in the agreement. The courts will also frown upon suits which are not filed immediately after the breach/refusal.
42.3. Every suit for specific performance need not be decreed merely because it is filed within the period of limitation, by ignoring time limits stipulated in the agreement. The 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 that a purchaser can wait for one or two years to file a suit and obtain specific performance. The three year period is intended to assist the purchaser 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.” Admittedly, in the case on hand, five months? time has been fixed for performance of the contract. As seen from the recitals of Ex.A-3, endorsement in Ex.A-2, an amount of Rs.1,00,000/- was paid on 06-9-1994 and subsequently, the plaintiff did not pay the remaining balance of sale consideration. The contention of the plaintiff is that the General Power of Attorney Holder of the plaintiff sent an amount of Rs.40,000/- through the 3 rd defendant and the same has been received by the 2 nd defendant and he told that it would be acknowledged later. The alleged payment is denied by the 1 st defendant. The 2 nd defendant or the 3 rd defendant is no way connected with Ex.A-1 agreement of sale. 19. As per the case of the 1 st appellant, the plaintiff has to pay the remaining balance amount of Rs.3,75,000/-. Admittedly, no notice has been issued by the plaintiff to the 1 st defendant to show that he is ready with balance of sale consideration. In fact, the 1 st defendant issued a legal notice under Ex.A-4 dated 26-10-1994 i.e. five days prior to the stipulated time by demanding him to pay the balance of sale consideration on or before 31-10-1994 and get registered sale deed with the expenses of the plaintiff, otherwise the advance amount will be forfeited.
In fact, the 1 st defendant issued a legal notice under Ex.A-4 dated 26-10-1994 i.e. five days prior to the stipulated time by demanding him to pay the balance of sale consideration on or before 31-10-1994 and get registered sale deed with the expenses of the plaintiff, otherwise the advance amount will be forfeited. Soon after receipt of the legal notice, one Sardar Khan and Jani, on behalf of the plaintiff, got issued a reply notice to the 1 st defendant, on 31-5-1994, on the last date of stipulation of time, after receipt of the legal notice, the 1 st defendant issued a reply notice to the counsel for Sardar Khan and Jani dated 03-11-1994 under Ex.A-6. In Ex.A-6, the 1 st appellant reiterated as follows: “1. My client questions at first your clients i.e., D. Sardar Khan and Jani?s authority to issue the notice under reply. I state that your clients referred to above has nothing to do with the transaction and they have no locus standi to issue notice. Your clients under what or which authority gave notice is not stated in your notice dated 31-10-1994. The agreement dated 30-4-1994 executed by my client in favour of P. Liakathali Khan is forfeited by 31-10-1994.” 20. Admittedly, by the date of Ex.A-5, Sardar Khan and Jani have no authority to issue legal notice on behalf of the plaintiff i.e. on 31-10-1994. Ex.A-1 goes to show that on 15-01-1995, P.W.1 Sardar Khan obtained General Power of Attorney from the plaintiff. Sardar Khan and Jani are not having personal knowledge of Ex.A-2 transaction and they are not the attestors. 21. The material on record indicates that the plaintiff had appointed one D. Sardar Khan as General Power of Attorney Holder on 15-01-1995, much after the time stipulated in agreement of sale only. The fact remains that there is no correspondence from the plaintiff to the 1 st defendant prior to stipulation of time. Admittedly, the plaintiff never approached the 1 st appellant in-person or through his Advocate, much less by legal notice, to express his readiness and willingness and to pay the remaining balance of sale consideration within the stipulated time i.e. by 31-10-1994. 22. In the case of Alagammal v. Ganesan, [ (2024) 3 SCC 232 ] , the Apex Court held as follows: “ 35.
22. In the case of Alagammal v. Ganesan, [ (2024) 3 SCC 232 ] , the Apex Court held as follows: “ 35. The ratio laid down in K.S. Vidyanadam [K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1 ] which had a similar factual matrix squarely applies in the facts and circumstances of the present case, on the issue that time was the essence of contract and even if time is not the essence of the agreement, in the event that there is no reference of any existence of any tenant in the building and it is mentioned that within a period of six months, the plaintiffs should purchase the stamp paper and pay the balance consideration whereupon the defendants will execute the sale deed, there is not a single letter or notice from the plaintiffs to the defendants calling upon them to the tenant to vacate and get the sale deed executed within time. Further, the legal notice was issued after two-and-a-half years from expiry of the time period in K.S. Vidyanadam [K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 ], whereas in the present case, the legal notice has been issued after more than six-and-a-half years.” 23. In the case of K.S. Vidyanadam v. Vairavan, [ (1997) 3 SCC 1 ], the Apex Court held as follows: “10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing.
That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time- limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [Chand Rani v. Kamal Rani, (1993) 1 SCC 519 ] : (SCC p. 528, para 25) 25. … 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.' In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. … … …” 24. In the case of Shenbagam v. K.K. Rathinavel , [2022 SCC Online SC 71] , the Apex Court held as follows: “True enough, generally speaking time is not essence in an agreement for the sale of immovable property in deciding whether to grant the remedy of specific performance, specifically in a suit relating to sale of immovable property. The Courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party specifically when they are not at fault.” 25. The law on the subject of specific performance is quite clear in the case of Acharya Swami Ganesh Dassji v. Sita Ram Thapar, [ (1996) 4 SCC 526 ] .
The remedy provided must not cause injustice to a party specifically when they are not at fault.” 25. The law on the subject of specific performance is quite clear in the case of Acharya Swami Ganesh Dassji v. Sita Ram Thapar, [ (1996) 4 SCC 526 ] . The Apex Court draw the distinction between “readiness” to perform the contract and “willingness” to perform the contract, it was observed that “readiness” is the capacity of the plaintiff to perform the contract which was included his financial position to pay the purchase price. As far as “willingness” to perform the contract is concerned, the conduct of the plaintiff has to be provisionally scrutinized along with the attending circumstances. 26. The learned counsel for 1st respondent/plaintiff relied on a decision of the Punjab and Haryana High Court at Chandigarh in the case of Brahm Dutt v. Sarabjit Singh, [MANU/PH/3179/2017]. The learned counsel for 1st respondent/plaintiff also relied on a decision of the Apex Court in the case of Shanbaggakannu Bhattar v. Muthu Bhattar, [MANU/SC/0725/1971] 27. The learned counsel for appellants relied on a judgment of the Apex Court in the case of I.S. Sikandar v. K. Subramani, [ (2013) 15 SCC 27 ], where it is held as follows: “37. As could be seen from the prayer sought for in the original suit, the plaintiff has not sought for declaratory relief to declare the termination of agreement of sale as bad in law. In the absence of such prayer by the plaintiff the original suit filed by him before the trial court for grant of decree for specific performance in respect of the suit schedule property on the basis of agreement of sale and consequential relief of decree for permanent injunction is not maintainable in law.” 28. The learned counsel for appellants placed another reliance on a judgment of the Apex Court in the case of R. Kandasamy (Since Dead) v. T.R.K. Saraswathy, [2024 SCC Online SC 3377], wherein it is held as follows: “ 41. A comprehensive reading of the two decisions reveals that in a fact scenario where the vendor unliterally cancels an agreement for sale, the vendee who is seeking specific performance of such agreement ought to seek declaratory relief to the effect that the cancellation is bad and not binding on the vendee.
A comprehensive reading of the two decisions reveals that in a fact scenario where the vendor unliterally cancels an agreement for sale, the vendee who is seeking specific performance of such agreement ought to seek declaratory relief to the effect that the cancellation is bad and not binding on the vendee. This is because an agreement, which has been cancelled, would be rendered non-existent in the eyes of law and such a non- existent agreement could not possibly be enforced before a court of law. Both the decisions cited above are unanimous in their approval of such legal principle. However, as clarified in Kanthamani (supra), it is imperative that an issue be framed with respect to maintainability of the suit on such ground, before the court of first instance, as it is only when a finding on the issue of maintainability is rendered by trial court that the same can be examined by the first or/and second appellate court. In other words, if maintainability were not an issue before the trial court or the appellate court, a suit cannot be dismissed as not maintainable. This is what Kanthamani (supra) holds.” 42. The aforesaid two views of this Court, expressed by coordinate benches, demand deference. However, it is noticed that this Court in Kanthamani (supra) had not been addressed on the effect of nonexistence of a jurisdictional fact (the existence whereof would clothe the trial court with jurisdiction to try a suit and consider granting relief), i.e., what would be its effect on the right to relief claimed by the plaintiff in a suit for specific performance of contract.” 29. Admittedly, in the case on hand, no plea about maintainability of the suit and cancellation of the agreement of sale is pleaded by the 1 st defendant in the written statement. It was not suggested to P.W.1 in cross-examination by the learned counsel for 1 st defendant that the suit for specific performance of agreement of sale is not at all maintainable without cancelling Ex.A-2 agreement of sale. It is also relevant to say that no issue has been framed by the learned trial Judge with regard to maintainability of the suit. Therefore, the suit for specific performance of agreement of sale is maintainable. 30.
It is also relevant to say that no issue has been framed by the learned trial Judge with regard to maintainability of the suit. Therefore, the suit for specific performance of agreement of sale is maintainable. 30. The contention of the plaintiff is that he sent an amount of Rs.40,000/- through the 3 rd defendant and the 2 nd defendant received the same and he told that he will send the acknowledgement later. The same is seriously disputed by the 1 st defendant. Admittedly, there is no whisper in the plaint itself in which month and on which date, the said amount of Rs.40,000/- was sent by the plaintiff through the 3 rd defendant. In the plaint, it was recited that an amount of Rs.40,000/- was received by the 2 nd defendant and he told he will give acknowledgment later. According to P.W.5 scribe, at request of the 1 st defendant, P.W.1 paid Rs.40,000/- to the defendants 1 and 2 through the 3 rd defendant. In Ex.A-5 reply notice, P.W.1 stated that an amount of Rs.40,000/- was sent through the 3 rd defendant on 19-9-1994 and the 1 st defendant himself received the same. The 3 rd defendant is examined as D.W.3. The 2 nd defendant is examined as D.W.1. They have specifically denied the receipt of alleged Rs.40,000/- by the defendants. The said payment of Rs.40,000/- by the plaintiff to the 1 st defendant is not at all proved by the plaintiff, but the learned trial Judge came to wrong conclusion that the plaintiff proved the payment of Rs.40,000/- to the 1 st defendant. 31. In the case of Saradamani Kandappan v. S. Rajalakshmi, [ (2011) 12 SCC 18 ] the Apex Court held as follows: “28. The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement.
The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement. If, for example, the vendor discloses in the agreement of sale, the reason for the sale and the reason for stipulating that time prescribed for payment to be the essence of the contract, that is, say, need to repay a particular loan before a particular date, or to meet an urgent time-bound need (say medical or educational expenses of a family member) time stipulated for payment will be considered to be the essence. Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment, time will be held to be the essence of the contract.” The Apex Court in Saradamani Kandappan ?s case (supra), further held as follows: “43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam [ (1997) 3 SCC 1 ] : (i) The 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) The 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. The 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 that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance.
The 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 that 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 the 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.” Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam [ (1997) 3 SCC 1 ] : (i) The 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) The 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. The 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 that 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 the 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.” In the case on hand, a specific time is prescribed to perform the part of the contract, which is fixed on or before 31-10-1994. According to P.W.3 scribe, there is a condition in the agreement itself that the balance amount of Rs.5,50,000/- has to be paid by 31-10-1994. Admittedly, in the case on hand, there is no correspondence from the plaintiff to D.W.1 till the date of filing of the suit.
According to P.W.3 scribe, there is a condition in the agreement itself that the balance amount of Rs.5,50,000/- has to be paid by 31-10-1994. Admittedly, in the case on hand, there is no correspondence from the plaintiff to D.W.1 till the date of filing of the suit. It is not the case of the plaintiff that he intimated to the 1 st defendant either through phone or through somebody that he is ready to pay the balance of sale consideration as fixed under the agreement of sale by 31-10-1994. As stated supra, in first the 1 st defendant having waited till four months and 25 days, on 26-10-1994 issued a legal notice to the plaintiff, but P.W.1 and one Jani issued a reply notice after receipt of legal notice on the last date of stipulated time through registered post. It was received by the 1 st defendant subsequent to the expiry of stipulated time. P.W.1 is not a plaintiff in the suit. Ex.A-1 goes to show that on 15-01-1995, P.W.1 was appointed as General Power of Attorney Holder by the plaintiff to look after the suit transaction. Therefore, admittedly, there is a total inaction on the part of the plaintiff to prove his readiness and willingness on the part of the contract. 32. It is settled law that for the relief of specific performance, the plaintiff has to prove that all along and till 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 by adducing evidence. The crucial facet has to be determined by considering all the circumstances including the availability of funds and mere statement or averment in the plaint of readiness and willingness could not suffice 33. In the case of Padmakumari v. Dasayyan, [ (2015) 8 SCC 695 ], the Apex Court held as follows: “20. The said contention urged on behalf of the plaintiff is unacceptable to us that the question of taking measurement would not arise before the plaintiff performed his part of the contract regarding the balance consideration within the period stipulated in the agreement.
The said contention urged on behalf of the plaintiff is unacceptable to us that the question of taking measurement would not arise before the plaintiff performed his part of the contract regarding the balance consideration within the period stipulated in the agreement. Undisputedly, that had not been done by the plaintiff in the instant case within the stipulated time and the notice was issued by the plaintiff only after one year, therefore, the plaintiff has not adhered to the time which is stipulated to pay the balance consideration amount to Defendants 1 to 11 which is a very important legal aspect which was required to be considered by the courts below at the time of determining the rights of the parties and passing the impugned judgment. The courts below have ignored this important aspect of the matter while answering the contentious Issues (i) and (ii) in favour of the plaintiff and granted decree of specific performance in respect of the suit scheduled property. The said finding of fact is contrary to the terms and conditions of the agreement, pleadings and the evidence on record. … … …” As stated supra, admittedly in the case on hand, the plaintiff has not paid the balance of sale consideration within the stipulated time. No notice has been issued by the plaintiff to the defendants with a specific plea that he is ready and willing to perform his part of the contract and ready to pay the balance of sale consideration within a time prescribed in Ex.A-1. As noticed supra, third parties issued a reply notice on 31-10-1994 to the plaintiff i.e. on the last date of stipulation of time mentioned in the contract, they have no authority to give reply notice to the 1 st defendant as on the date of issuance of reply notice. Ex.A-1 goes to show that on 15-01-1995, P.W.1 was appointed as General Power of Attorney Holder of the plaintiff after more than two months? stipulated time of period of contract mentioned in Ex.A-2. Therefore, the ratio laid down in the aforesaid case law is squarely applicable to the present facts of the case. 34. For the aforesaid reasons, I am of the considered view that the time is essence of contract in the case on hand and the total inaction is on the part of the plaintiff only. Accordingly, point No.1 is answered against the plaintiff. 35.
34. For the aforesaid reasons, I am of the considered view that the time is essence of contract in the case on hand and the total inaction is on the part of the plaintiff only. Accordingly, point No.1 is answered against the plaintiff. 35. Point Nos.2 and 3 : Whether the 1 st respondent/plaintiff is entitled to the relief of specific performance of agreement of sale dated 30-5-1994 ? and Whether the judgment and decree passed by the trial Court needs any interference ? As stated supra, time is the essence of contract in the case on hand and total laches are on the part of the plaintiff. P.W.1, who is the General Power of Attorney Holder of the plaintiff, admits in his evidence in cross-examination that the entire complex was under mortgage with the State Bank of India as security, there are four floors in the said complex, which includes cellar, Ground Floor, First Floor and Second Floor and in the ground floor there are four shop rooms and out of the four shop rooms, suit property is one of the shop rooms. 36. The recitals in Ex.A-2 agreement of sale go to show that discharge of mortgage on the schedule property is not a condition precedent. There is a distinction between the terms “readiness” and “willingness”. “Readiness” is capacity of the plaintiff to perform the contract which includes the financial position to pay the sale consideration. “Willingness” is conduct of the party. Continuous readiness and willingness is a condition precedent to grant the relief of specific performance. Admittedly, in the case on hand, the plaintiff has not sufficiently explained and proved that he was always ready and willing to perform his part of the contract. The long unexplained delay and silence on the part of the plaintiff in this regard would not entitle him to a decree of specific performance of the agreement of sale, dated 30-5-1994. In the case on hand, the 1 st respondent/plaintiff has not produced any satisfactory evidence to prove his readiness and willingness. As regards the willingness of the plaintiff to perform his part of the contract, conduct of the plaintiff warranting performance has to be looked into.
In the case on hand, the 1 st respondent/plaintiff has not produced any satisfactory evidence to prove his readiness and willingness. As regards the willingness of the plaintiff to perform his part of the contract, conduct of the plaintiff warranting performance has to be looked into. Admittedly, the plaintiff has not issued any legal notice to the 1 st defendant within a stipulated period of contract by intimating that he is ready to pay the balance of sale consideration and the plaintiff has not brought anything on record to prove that he contacted the defendants after expiry of stipulated period of contract and he was interested in finalizing the contract. The plaintiff also has not sufficiently explained and proved that he was always ready and willing to perform his part of the contract. 37. For the aforesaid reasons, I am of the considered view that the plaintiff is not entitled to the main relief of specific performance of agreement of sale. 38. In the case on hand, it is the admitted case of the 1 st defendant that he executed Ex.A-2 agreement of sale in favour of the plaintiff. It is not in dispute by the 1 st defendant that he received Rs.2,50,000/- (Rs.1,50,000/- on the date of agreement and Rs.1,00,000/- under Ex.A-3 part payment endorsement) from the plaintiff. In the case on hand, alternative relief of refund of advance amount is not sought by the plaintiff. 39. Section 22 of Specific Relief Act, 1963 defines as follows: “ 22. Power to grant relief for possession, partition, refund of earnest money, etc. (1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for— (a) possession, or partition and separate possession, of the property, in addition to such performance; or (b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief. (3) The power of the court to grant relief under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21.” 40.In the case of Usha Devi v. Ram Kumar Singh (Civil Appeal No.8446 of 2024, decided on 05-8-2024), [MANU/SC/0864/2024], the Apex Court held as follows: “12. Accepting that the Plaintiffs-Respondents paid an amount of Rs.80,000/- to the Defendant-Appellant, and there being no relief claimed for refund of this money, in order to do complete justice between the parties, we feel it appropriate that the said amount of Rs.80,000/- be returned to the Plaintiffs along with 12% simple interest by the Appellants within three months from today.” Admittedly, in the case on hand, the 1 st defendant admitted the execution of agreement of sale under Ex.A-2 and he admitted about the receipt of Rs.2,50,000/- from the plaintiff, therefore, by applying the ratio laid down in Usha Devi ?s case (supra), which was decided by the Apex Court on 05-8- 2024 and on considering the provisions under Section 22 of the Specific Relief Act, I am of the considered view that in order to complete justice between the parties to the suit, it is appropriate to order refund of Rs.2,50,000/- to the plaintiff with interest of 12% per annum on Rs.2,50,000/- from 01-11-1994 (the date stipulated to complete the contract is 31-10-1994) till the date of payment of amount by the 1 st defendant. 41. Point No.4 :- To what extent ? For the aforesaid reasons, the appeal suit is accordingly allowed and the impugned judgment of the learned trial Judge is liable to be set aside and the plaintiff is not entitled to the main relief of specific performance of agreement of sale.
41. Point No.4 :- To what extent ? For the aforesaid reasons, the appeal suit is accordingly allowed and the impugned judgment of the learned trial Judge is liable to be set aside and the plaintiff is not entitled to the main relief of specific performance of agreement of sale. The 1 st appellant/1 st defendant is directed to refund the amount of Rs.2,50,000/- (Rupees two lakhs and fifty thousand only) to the 1 st respondent/plaintiff with interest of 12% per annum on Rs.2,50,000/- from 01-11-1994 till the date of payment of amount by the 1 st defendant. Pending applications, if any, shall stand closed. Each party do bear their own costs in the appeal.