Gujarat High Court
M/S Raj Land Corporation vs Ichchhapore Industrial Co Op Service ... on 14 February, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1161 of 2011
With
R/FIRST APPEAL NO. 1341 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S RAJ LAND CORPORATION & 4 other(s)
Versus
ICHCHHAPORE INDUSTRIAL CO OP SERVICE SOCIETY LTD., & 6
other(s)
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Appearance:
MR KM PARIKH(575) for the Appellant(s) No. 3.1,3.2
MR MEHUL SHAH, SENIOR COUNSEL WITH MR SK PATEL(654) for the
Appellant(s) No. 1,2,3,4,5
for the Defendant(s) No. 1
MR DEVEN PARIKH, SENIOR COUNSEL WITH MR RUTUL P DESAI(6498)
for the Defendant(s) No. 1
MR VIMAL A PUROHIT(5049) for the Defendant(s) No. 1
RULE SERVED for the Defendant(s) No. 3,4,5,6,7
UNSERVED EXPIRED (R) for the Defendant(s) No. 2
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NEUTRAL CITATION
C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 14/02/2024
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This appeal is filed by the original plaintiffs on being aggrieved by the judgement and decree dated 22.02.2011 passed by the learned 6 th Additional Senior Civil Judge, Surat in Special Civil Suit No. 285 of 2001. By the aforesaid judgement and order, the suit filed by the original plaintiffs has been dismissed.
2. Facts giving rise to the appeal are as under:
2.1 The defendants - respondents no. 1, 2 & 3 herein are the Society, the President and the Secretary respectively. They were the owners of suit property situated at Ichhapore, Ta.
Choryasi bearing Revenue Survey No. 897, 898, 899, 912, 915, 916, 917 paiki, 918/2 etc. admeasuring 62142 sq. mtrs. It was the case of the plaintiffs that the respondents - defendants had agreed to sell the property to the appellants for consideration of Rs.60,58,845/-. An agreement to sell was Page 2 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined entered into on 27.08.1993. As per the sale agreement, the appellants had paid Rs.6,05,885/-. As per conditions no. 2, 4 & 6 of the suit agreement, it was for the appellants to undertake the procedure of dereservation of the lands which took a long time.
2.2 It is the case of the plaintiffs that time was not the essence of the contract and once the dereservation took place in the year 2001, they were ready and willing to pay the remaining amount of consideration. However, the defendants refused to perform their part of the contract and therefore the appellants were constrained to file a suit seeking a decree for specific performance of the contract. 2.3 The defendants - respondents herein filed their written statement at Ex. 16. It was their case that due to lapse of time, the agreement to sell was unenforceable. As per condition no. 11 of the agreement, it was on the appellants - plaintiffs to complete the necessary procedure for dereservation on or before 31.10.1993 which they failed to do and even after extension of time limit for 2 months, they did not complete the stipulated procedure and there was no Page 3 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined readiness and willingness to perform the contract. 2.4 The trial court after examining the evidence on record including the conditions of the agreement to sell and documents and oral evidence, framed issues, 19 in number. The trial court concurred with the plaintiffs on the question of there being an agreement to sell but on issues no. 7 & 8 namely whether the plaintiffs were able to prove that they were ready and willing to perform the contract, the same were held to be in the negative. Even on the issue of limitation, the trial court held that the suit was barred by limitation, particularly Article 54 of the Limitation Act and dismissed the suit.
3. Mr. Mehul S Shah, learned Senior Advocate appearing with Mr. S.K. Patel, learned advocate for the appellants made the following submissions:
(a) That though all the issues, especially issues no. 3 & 4, have been answered in favour of the plaintiffs, inasmuch as the execution, the agreement and part payment of the contract is proved, which is the basic Page 4 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined requirement for the suit of specific performance, only on the ground of the plaintiffs having failed to satisfy readiness and willingness to perform and on the question of limitation, the trial court has dismissed the suit.
(b) That looking to the conditions of the agreement to sell, the total consideration was Rs.60,58,845/-.
Conditions no. 2 to 4 were with regard to dereservation of the land and title clearance which was to be done by the appellants. It was their responsibility of removing the land from reservation and dropping it from acquisition and thereafter the remaining sale consideration was to be paid.
(c) That the sale deed was executed on 31.10.1993 and as per the terms of the agreements, time was mutually extended by the parties. That in the contracts involving immovable property, time is never the essence of contract as was the case on hand. Even otherwise, the trial court committed an error in holding that once the contract period had expired on 31.12.1993, there was no Page 5 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined obligation for the defendant to perform his contract.
(d) That it was only on 09.06.2021 did the defendants pass a resolution refusing to perform their part and the limitation therefore would begin to run from that date.
(e) Inviting the court's attention to the relevant paragraphs of the plaint namely paragraphs no. 6 to 8, Mr. Shah would submit that it was the specific case of the plaintiffs that it was only on 09.06.2021 that the defendants refused to perform their part. That there was no forfeiture of the amount or even a condition and there was documentary as well as oral evidence to suggest particularly in the form of a letter dated 28.07.1997 (Ex. 147) which clearly indicated that the intention of the defendants was to wait till the land is dereserved.
(f) That there is nothing on record to show based on the documentary and oral evidence even of the defendants - respondents herein that there would be no further extension for the performance of the contract. That Page 6 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined because of the mutual extension of the contract and unless and until dereservation was done, the agreement to sell could not have been cancelled and the trial court committed an error in holding that the suit for specific performance was time barred when admittedly it was only on 09.06.2001 after the land was dereserved by notification dated 17.05.2001 that the defendants first time refused to perform their contract.
(g) That the plaintiffs - appellants herein were always ready and willing to perform their part of the contract and the finding of the trial court on the question of the plaintiffs not being ready and willing to perform was misconceived. The finding of the trial court that the dereservation was due to the government's effort and not the plaintiffs' was also misconceived.
(h) Referring to the agreement to sell, he would submit that though there was a specific time period fixed upto 31.10.1993, there was a condition in the agreement that on a failure of any party, the party is not entitled for specific performance. This omission cannot be treated Page 7 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined as extension of time. Reading the conditions of the agreement, Mr. Shah would submit that the dates and chain of events would show that the contracting parties were ad idem to the issue that till dereservation is over the agreement to sell shall subsist.
(i) Taking the court through the oral evidence of the witnesses of the plaintiffs especially that of plaintiff no. 2 Shri Chaturbhai Ramolia to indicate that several representations were made for dereservation of land; that time was mutually extended atleast four to five times; that there was no occasion prior to 05.05.2001 for writing a letter; that the parties were in touch with each other and the fact that money was arranged i.e. payment of an amount of Rs.25 lakhs was offered, he submitted that the trial court committed an error in believing that there was no readiness and willingness to perform the contract.
(j) Reading the evidence of Shri Navinchandra Mohanlal Patel at Ex. 218, Mr. Shah would submit that it was an admitted fact that the plaintiffs had financial Page 8 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined capacity to honour the contract and therefore there was no question for the trial court to hold otherwise.
(k) Relying on the provisions of Section 55 of The Indian Contract Act, 1872 it is submitted that the intention was never that time was the essence of the contract. Sections 63 & 66 of the Contract Act were pressed into service to submit that the conduct of the promisee shows that for the performance of the promise the time limit was extended. Section 66 was pressed into service together with Sections 3, 4 & 6 of the Contract Act to submit that there was no communication that the contract be declared voidable. That a party at whose instance the contract has become voidable can still go to court and get it enforced.
(l) Relying on the provisions of Sections 16 and 20 of the Specific Relief Act, Mr. Shah would submit that in accordance with Section 16(c) of the Act, it cannot be said that the plaintiffs had failed to aver and prove their readiness and willingness to perform the essential terms of the contract and therefore the trial court in Page 9 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined accordance with the provisions of Section 20 ought to have exercised discretion of granting the decree of specific performance.
3.1 In support of his submissions that there was evidence on record that the party was ready and willing to perform the contract and that time was extended, Mr. Shah would rely on the following decisions:
(I) K.Prakash Vs. B.R.Sampath Kumar reported in AIR 2015 SC 9;
(II) A.Kanthamani Vs. Nasreen Ahmed reported in 2017 (1) GLH 794;
(III) Panchanan Dhara Vs. Monmatha Nath Maity reported in 2006(5)SCC 340;
(IV) Narinderjit Singh Vs. North Star Estate Promoters Ltd reported in 2012(5) SCC 712;
(V) Zarina Siddiqui Vs. A Ramalingam @ R Amarnathan reported in 2015 (1) SCC 705;
(VI) A R Madana Gopal Etc Etc Vs. M/s Ramnath Publications Pvt Ltd And Another reported in 2021 (11) SCC 200;Page 10 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined (VII) Daya Singh & Ors. Vs. Gurudev Singh and Ors. reported in 2010 (2) SCC 194;
(VIII)Azhar Sultana Vs. B.Rajamani & Ors. reported in AIR 2009 (SC) 2157;
(IX) Nathulal Vs. Phoolchand reported in AIR 1970 (SC) 546;
(X) P.Ramasubbamma v/s. V.Vijaylakshmi reported in AIR 2022 SC 1793;
(XI) Nadiminti Suryanarayan Murthy(Dead) Through Lrs. Vs. Kothurthi Krishna Bhaskara Rao & Ors reported in 2017 (9) SCC 622;
(XII) Gaddipati Divija & Ors. Vs. Pathuri Samrajyam & Ors. reported in 2023 (3) GLH 311;
(XIII) Van Vibhag Karamchari Griha Nirman Sahkari Sanstha Maryadit Vs. Ramesh Chander & Others reported in 2010 (14) SCC 596.
4. Mr. Deven Parikh, learned Senior Counsel appearing with Mr. Rutul Desai, learned advocate for the respondent no. 1 - Society made the following submissions:
(A) That the findings of the learned trial court have been Page 11 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined arrived at after detailed evaluation of the documentary as well as oral evidence coupled with the fact that the grant of decree of specific performance is a discretionary relief which has rightly not been exercised by the trial court.
(B) That the parties were clearly ad idem on the point that the original agreement to sell was to be performed in a specific time frame. He would submit that the argument that the time stood extended by conduct is without any substance. The reasonings of the trial court cannot be faulted that the contract had expired since long. Reading the agreement to sell, he would submit that it was evident that the oral agreement was made on 28.06.1993 and it was a specific stipulation that it were the plaintiffs who were to remove the reservation and a time frame was set out failing which the contract could not be enforced. Time was therefore the essence of the contract. He would submit that the argument of learned Senior Advocate Mr. Shah that the contract was dependent on three stages i.e. to remove reservation and payment is incorrect. It was specifically the term of the Page 12 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined contract that the reservation had to be removed within four months' time. Having failed to do so, the trial court rightly came to the conclusion that the plaintiffs had failed to perform their part of the contract.
(C) That the parties were well aware of the fact that the contract was to expire on 31.10.1993 and even when an extension application was moved, no extension was made beyond 31.12.1993. No further extension was asked for and merely because, as rightly held by the trial court, on the defendants' witness the plaintiffs cannot demonstrate that in absence of the contract being made voidable, the contract was alive till the reservation was removed.
(D) Drawing the court's attention to the observations of the trial court in the judgement with regard to the question of readiness and willingness to perform, he would submit that it was a clear stipulation that the plaintiffs had agreed for getting the title clearance on execution of the sale deed within a fixed period of time. Page 13 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined (E) On the question of readiness and willingness, it is submitted that even if the letter dated 05.05.2001 is read, it does not indicate readiness and willingness to perform the contract. Reading the letter, he would submit that the plaintiffs had asked for time to pay the amount in installments over a period of one year which therefore clearly indicated their reservations in performance of the contract. In fact, what was evident from the letter by which extension was sought is that it was the case of the plaintiffs that their business was slack and therefore they wanted some time in order to enable honouring the commitment of payments. After December, 1993, there was absolute silence on the parts of the plaintiffs - appellants which indicated that there was no contractual relationship surviving between the parties.
(F) Supporting the findings of the trial court on the point of limitation, it is submitted that a time limit as is evident from the agreement to sell expired on 31.12.1993. As per Article 54 a suit for specific performance has to be brought within the time limit of Page 14 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined three years whereas in the present case, the suit was filed on 03.07.2001 i.e. after more than seven years and hence is barred by limitation. In absence of any evidence therefore, the time limit was extended mutually between the parties. The time expired on 31.12.1993.
In support of his submissions, he would rely on the oral evidence of the plaintiff no. 2 Chaturbhai Ramolia and that of plaintiff no. 4 Vallabhbhai Kapuria. (G) That the defendant no. 2 Navnitlal Gandhi has supported what has been stated in the written statement. That the time limit for executing the sale deed expired on 31.12.1993. On the question of the submission made by learned Senior Advocate Mr. Shah in reference to the provisions of Sections 63, 65 and 66 of the Contract Act and Sections 16 and 20 of the Specific Relief Act, Mr. Parikh would submit that once a contract becomes voidable there is no necessity in law to actually enter into communication. He would submit that the judgements relied upon by the plaintiffs are not applicable to the facts of the case. Once it is shown that Page 15 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined the plaintiffs have committed breach of the agreement, it cannot be said that they are ready and willing to perform their part.
4.1 In support of his submissions, he would rely on the following decisions:
(a) Urvashi Aggarwal vs. Kushagr Ansal reported in (2020) 17 SCC 774;
(b) Katta Sujata Reddy vs. Siddam Setty Infra Projects reported in (2023) 1 SCC 355;
(c) U.N. Krishnamurthy (since deceased) thru. Lrs. vs. A.M. Krishnamurthy reported in AIR 2022 SC 3361;
(d) Anandram Mangturam vs. Bholeram Tanumal reported in 1946 ILR Bom 218;
(e) Mangala Vaman Karandikar vs. Prakash Damodar Ranade reported in (2021) 6 SCC 139;
(f) Haspur Road Cooperative Society Ltd. vs. Vithal Mandir Trust reported in 2023 JX (Guj) 13;
(g) Mrs. Sara Damani Kandappan vs. Mrs. S. Rajalaxmi and others reported in AIR 2011 SC 3234;
(h) M/s. Citadel Fine Pharmaceuticals vs. M/s. Ramaniyam Page 16 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined Real Estates Pvt. Ltd. & Others reported in AIR 2011 SC 3351;
(i) Balram Singh vs. Kelo Devi reported in 2022 SCCOnLine SC 1283.
5. Having considered the submissions made by the learned counsels for the respective parties and having perused the judgement and decree passed by the court below, we need to consider the submissions made in light of the discussions set out by the trial court. The trial court on the issues of whether the plaintiffs were ready and willing to perform their part of the contract and on the issue of limitation has held against them.
5.1 At this stage, we therefore need to consider the terms and conditions of the agreement to sell. The agreement to sell is on record which is dated 27.08.1993. Reading of the agreement would indicate that an oral agreement took place between the parties on 28.06.1993 for the purchase of land by the appellants. In furtherance thereof, the agreement to sell was executed on 27.08.1993 for a total consideration amount of Rs.60,58,845/- out of which Rs.6,05,885/- came to be paid Page 17 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined at the time of the execution of the agreement to sell. Reading conditions no. 2 to 4 and 6, 7 and 11 of the agreement would show that the land was under reservation and it was the responsibility of the appellants to get the land dereserved. A fixed time limit upto 31.10.1993 was set out. The agreement clearly stipulated that advance paid towards consideration was given as security and on non performance, that amount will entail forfeiture.
5.2 It is clear from the recitals in the agreement to sell that time begins to run from June 1983 when an oral agreement to enter into the transaction was conceived and sealed. The dereservation was to be done by the plaintiffs at their costs and that it was to be done within four months from June 1993. The date for such exercise was an outer limit of 31.10.1993. The exchange of letter only extended the time for performance of the contract till 31.12.1993. The remaining amount of Rs.54,52,900/- had to be paid by 31.10.1993 and thereafter by 31.12.1993.
5.3 Mark 17/1 is a letter dated 10.10.1993 issued by the appellant no. 1 requesting that the time be extended by a Page 18 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined further period of four weeks. The reasons set out for extension are that the time be treated as extended from the date of signing the agreement, that on account of lack of financial capacity the appellants had financial trouble and the process of getting the release was going to take about three to four months. Ex.146 is a letter of the society respondent no. 1 extending the time of agreement to sell for a further period of two months i.e. upto 31.12.1993. Reliance placed on the communication dated 12.11.1993 Ex. 157 by which the revenue department had informed the Collector that the land had been released from acquisition categorically was a declaration releasing the land from reservation making it free for transfer.
5.4 During the course of arguments, the notification dated 17.05.2001 has been placed on record which indicates that on 29.02.1996 the Government of Gujarat had published the first draft revised development plan calling for objections and thereafter the land was again put under reservation by virtue of the notification of 1996. On 28.07.1997, the respondent society communicated to SUDA requesting for getting the land dereserved. Though the appellants would rely on this Page 19 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined letter to contend that the reservation process was in pursuit, till 05.05.2001 there was no communication from the plaintiffs to show that they were ready and willing to perform their part of the contract. In fact, if the letter dated 05.05.2001 Ex. 158 is read, it indicates that the appellants plaintiffs had still asked for time to pay the amount of Rs.25 lakhs over a period of six months which obviously the trial court found to indicate lack of readiness and willingness to pay on the part of the plaintiffs.
5.5 The contention of the learned counsel for the appellants relying on the decision to indicate that in case of immovable property time is not the essence of the contract, cannot be accepted. Reading the terms of the contract would show that an oral agreement was entered into between the parties on 28.06.1993. The agreement to sell was signed in August 1993 which indicated that as per the oral agreement, the outer limit for obtaining dereservation was 31.10.1993. Time limit was extended only upto 31.12.1993.
5.6 Reading the terms of the contract therefore it is borne out that an outer time limit was fixed and in the event there Page 20 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined was failure to perform, the advance consideration that was received was liable to be forfeited. It cannot be accepted even if it is so pleaded that time was not the essence of the contract. When an extension application was moved on 10.10.1993, the time was extended only till 31.12.1993. Pressing into service the letter dated 28.07.1997 to suggest that time was not the essence of contract is misconceived and as set out by the trial court the trial court did not agree with the submission and in our opinion rightly so, that even after the letter of 1997 there was nothing on record by way of communications for a period of four years by the plaintiffs to suggest that the period of contract was extended. Except for a letter on 05.05.2001, there was complete silence on behalf of the appellants with regard to their readiness and willingness to perform their part of the contract.
6. Considerable arguments have been made by the learned counsels for the respective parties on the question whether in the case of immovable properties, time is not the essence of the contract. Relevant recitals which have been produced in the earlier part of this judgment would indicate that as per the terms of the contract when read with the letter dated Page 21 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined 27.10.1993 pursuant to the request made by the appellant vide letter dated 10.10.1993 (Mark 17/1) the society extended the time limit upto 31.12.1993 only i.e. only for a further period of two months upto 31.12.1993.
6.1 From the letter dated 12.11.1993 at Ex. 157, what is evident is that the revenue department released the land from acquisition and thereby making it free for transfer. When this is appreciated with the letter dated 10.10.1993 what is indicative is that there was no intention of the plaintiff to execute the sale. More than three years thereafter on 29.02.1996, the first Draft Revised Development Plan was published and proposals were made for reservation in various parcels of land under the jurisdiction of SUDA when the subject land was once again put in reservation by the notification under reference.
6.2 On 28.07.1997, the society requested for dereservation. Though it is the case of the appellant that this letter at Ex. 147 was written under their instructions there is no evidence brought over to substantiate this. The notification produced by the learned Senior Advocate Shri Deven Parikh dated Page 22 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined 17.05.2001 Ex. 263 indicates that dereservation of lands took place in the natural course and obviously the respondents on 09.06.2001 communicated their stand that time for performance of the contract was already over. 6.3 That time was the essence of the contract is evident from the examination-in-chief and cross examination that they were aware of the fact that dereservation had to be removed within four months' time. The question that needs to be decided as a consequence of the issue of time being the essence of the contract is the issue regarding limitation as both issues are intermingled and mixed. 6.4 Relevant provisions of the Contract Act and the Limitation Act have been read and relied upon by the respective counsels. Section 55 of the Contract Act deals with the issue of effect of failure to perform a contract at a fixed time in which, time is essential. Though it may be true that in case of sale of immovable property time may never be regarded as essence of the contract but when on examination of the terms of the agreement, it is ascertained that under the terms of the contract, the parties named a specific time within Page 23 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined which completion was to take place. The intention to make time the essence of the contract as expressed in the unequivocal language of the terms is evident. 6.5 The analysis of evidence would indicate that there was a clear intention of parties about time. In the case of immovable properties, the principle that time is not the essence is and cannot continue to be a presumption which can be of use in the present economic scenario or in context of the period in question.
6.6 From the evidence on record what also emerges is that prior to signing of the agreement to sell in August 1993, an oral understanding was reached; that the terms were discussed between the parties where the plaintiffs - appellants willing took upon themselves the burden of obtaining dereservation within the time stipulated in the agreement. From the conditions of the agreement spelt out, the parties here had expressly agreed to the fact that time is to be the essence of the contract.
6.7 In the case of Anandram Mangturam (supra), the Page 24 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined Bombay High Court considering the provisions of Section 55 of the Contract Act held that the mere fact that the contract was not put to an end did not entail a further consequence that time for performance of contract was automatically extended. The relevant portion of the decision reads as under:
"In this case, in my opinion, there is not even a basis of facts to support the argument of Mr. Desai, because at no time did the defendants request the plaintiff to forbear from exercising his rights and asking for delivery under the contract; on, the contrary, their whole attitude has been that they were only bound to deliver the goods as and when they received them from their vendors. Therefore really throughout the correspondence they were asserting their right not to be bound to give delivery of the contract goods until they had received them from their vendors. Assuming that there was a request by the defendants to the plaintiff to forbear, I do not find in the correspondence at any stage or at any time any compliance with that request. Assuming this was a request to forbear, what the defendants wanted was a forbearance till they received the goods from their vendors, and the emphatic and categorical answer given by the plaintiff was that he wanted the goods to be delivered within a short time. Therefore it seems to me impossible to hold that having turned down the request of the defendants to forbear, it was open to the plaintiff by his unilateral act to extend time for performance and come to Court and say : I have now repudiated the Page 25 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined contract and I shall fix the time according to my choice.
Mr. Desai has argued that if there is one thing that the correspondence showed is that both the parties considered the contract alive and subsisting. If by that expression is meant that the plaintiff had not exercised his option under Section 55 of the Indian Contract Act to put an end to the contract Mr. Desai is right; but the mere fact that the contract was not put an end to did not entail the further consequence that the time for the performance of the contract was automatically extended."
6.8 From the facts on hand, what is evident is that an oral agreement was made in June 1993 for obtaining dereservation within four months i.e. by 31.10.1993. That time was then extended only upto 31.12.1993. Evidently, the appellants failed to perform their part at the time fixed in the contract. The appellants then cannot argue that because of the mere fact that the contract was not expressly put to an end the time for performance of the contract was automatically extended. Thus, when both the parties meant that time was to be the essence of the contract and the time limit for fixing the reservation and getting the sale deed executed was fixed, the time limit expired on 31.12.1993. For a suit for specific Page 26 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined performance, time limit is three years and the same would commence from the date fixed for performance i.e. December 1993 whereas the suit was filed in 2001, once the contract expired on 31.12.1993 and therefore there was no requirement of law to communicate on the date of expiry of time. The communication of 09.06.2001 cannot therefore be termed as the date of refusal also for the purposes of limitation. The communication of refusal dated 09.06.2001 also cannot mean that the extension of the contract can be inferred or implied. The contention of the learned counsel for the appellants that since dereservation was dependent upon several factors and failure thereof cannot work to the disadvantage of the appellants cannot be accepted. The letter of 09.06.2001 cannot be treated as a case of variation in the date of performance by express representation. At the cost of reiteration, when the terms of the agreement to sell are read in the entirety, the language makes it clear that time was the essence and failure to perform would lead to forfeiture, if not performed within the time stipulated.
7. Coming to the provisions of the Specific Relief Act, particularly, Sections 16, 20 etc., the discussion of evidence Page 27 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined indicates that the appellants failed to aver and prove that they were ready and willing to perform the essential terms of contract. The continuous readiness and willingness is a condition precedent and the evidence placed before the trial court indicates that even when extension was sought, it was the case of the plaintiffs - appellants that they needed more time as the business was slack. Moreover also, what was explicit from the letter of 05.05.2001 was that even three years after 1998, they still wanted time of over six months to pay installments of Rs.25 lakhs over a period. If the discretion as argued was to be exercised in favour of the appellants by accepting their plea that time was not the essence of the contract then the significance of time limits stipulated in the agreements would lose its significance or relevance and even if we were to presume time being of no essence, the discretionary jurisdiction cannot be exercised in favour of the appellants who have failed to file suits within reasonable time.
7.1 The analysis of the evidence on record and the discussion thereof made by the trial court make it clear that the contract was strictly conditioned on a time frame. On a Page 28 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined reading of Article 54 of the Limitation Act what is apparent is that it provides for two consequences in a case of there being a fixed time period of performance which is not the case here. It is only in a case where the time period of performance is not fixed that a purchaser can take recourse to an issue that a reply would extend the period of limitation. Here that plea cannot be and is not available to the appellants. 7.2 From the communications on record, it has come to be proved that once essential terms of the contract are violated, not only Sections 16(c) and 20 of the Specific Relief Act do not come to the rescue of the appellants but even on account of the time being the essence the suit is barred by limitation. 7.3 Further on the question of readiness and willingness to perform, in accordance with Section 16(c) of the Specific Relief Act, it is the plaintiffs who have to aver and prove that they are ready and willing to perform their part of the contract. In the case of U.N. Krishnamurthy (since deceased) thru. Lrs. (supra), considering section 16 of the Act, the Apex Court has held as under:
Page 29 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined "24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause
(c) of Section 16, it may not be essential for the plaintiff to actually tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money.
However, explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction.
25. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money.
26. In Man Kaur v. Hartar Singh Sangha, (2010) 10 SCC 512 this Court held that:
"40. ...A person who fails to aver and prove Page 30 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him (other than the terms the performance of which has been prevented or waived by the defendant) is barred from claiming specific performance. Therefore, even assuming that the defendant had committed breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and willing to perform the essential terms of contract which are required to be performed by him (other than the terms the performance of which has been prevented or waived by the plaintiff), there is a bar to specific performance in his favour. Therefore, the assumption of the respondent that readiness and willingness on the part of the plaintiff is something which need not be proved, if the plaintiff is able to establish that the defendant refused to execute the sale deed and thereby committed breach, is not correct. Let us give an example. Take a case where there is a contract for sale for a consideration of Rs. 10 lakhs and earnest money of Rs. 1 lakh was paid and the vendor wrongly refuses to execute the sale deed unless the purchaser is ready to pay Rs. 15 lakhs. In such a case there is a clear breach by the defendant. But in that case, if the plaintiff did not have the balance Rs. 9 lakhs (and the money required for stamp duty and registration) or the capacity to arrange and pay such money, when the contract had to be performed, the plaintiff will not be entitled to specific performance, even if he proves breach by the defendant, as he was not "ready and willing" to perform his obligations."Page 31 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined
27. In Pt. Prem Raj v. D.L.F. Housing and Construction (Private) Ltd. And Anr., AIR 1968 SC 1355 cited by Mr. Venugopal, this Court speaking through Ramaswamy J. held that "it is well-settled that in a suit for specific performance the plaintiff should allege that he is ready and willing to perform his part of the contract..." and if the fact is traversed, he is required to prove a continuous readiness and willingness from the date of the contract to the time of the hearing, to perform the contract on his part. For such conclusion the learned Judge relied upon the opinion of Lord Blanesburgh, in Ardeshir Mama v. Flora Sassoon, AIR 1928 PC 208.
28. In D.L.F. Housing and Construction (Pvt.) Ltd. (supra), in the absence of an averment on the part of the Plaintiff in the plaint, that he was ready and willing to perform his part of the contract, it was held that the Plaintiff had no cause of action so far as the relief for Specific Performance was concerned. In this case, of course, there is an averment in the plaint that the Respondent Plaintiff was all along ready and willing to perform his obligations under the contract. The question is whether the Respondent Plaintiff had proved his readiness and willingness to perform his obligations under the contract.
29. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors., (1995) 5 SCC 115 this Court reiterated that Section 16(c) of the Specific Relief Act, 1963 envisages that the Plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which were to be performed by him other than those terms, the performance of which has been prevented or waived by the Defendant. In N.P. Thirugnanam (supra) this Court Page 32 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined said that the continuous readiness and willingness on the part of the Plaintiff was a condition precedent for grant of the relief of Specific Performance.
30. This Court, in effect, held that for determining whether the Plaintiff was ready and willing to perform his part of the agreement it is necessary for the Court to consider the conduct of the Plaintiff prior and subsequent to filing the suit for specific performance. The relevant part of the judgment is extracted hereinbelow:-
"5. .Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief."
31. In Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243 this Court held that a finding as to whether the Plaintiffs were all along and still ready and willing to perform their part of the contract, was a mandatory requirement under Section 16(c) of the Specific Relief Act. The Court would necessarily have to arrive at the finding that the Plaintiff all along were, and still are ready and also willing to perform their part of the contract, taking into account the entirety of the pleadings as also the evidence brought on record. To quote this Court:-
Page 33 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined "So far there being a plea that they were ready and willing to perform their part of the contract is there in the pleading, we have no hesitation to conclude, that this by itself is not sufficient to hold that the appellants were ready and willing in terms of Section 16(c) of the Specific Relief Act. This requires not only such plea but also proof of the same. Now examining the first of the two circumstances, how could mere filing of this suit, after exemption was granted be a circumstance about willingness or readiness of the plaintiff. This at the most could be the desire of the plaintiff to have this property. It may be for such a desire this suit was filed raising such a plea. But Section 16(c) of the said Act makes it clear that mere plea is not sufficient, it has to be proved."
32. In K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 Justice B.P. Jeevan Reddy said that grant of the relief of specific performance is discretionary and the Court is not bound to grant it. This Court further held that though time is not of essence to a contract relating to transfer of property, such contracts need to be completed within a reasonable time period. Thus the time element cannot be completely ignored.
33. In a suit for Specific Performance of a contract, the Court is required to pose unto itself the following questions, namely:-
(i) Whether there is a valid agreement of sale binding on both the vendor and the vendee and
(ii) Whether the Plaintiff has all along been and still is ready and willing to perform his part of the contract as envisaged under Page 34 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined Section 16(c) of the Specific Relief Act, 1963 .
34. There is a distinction between readiness and willingness to perform the contract and both ingredients are necessary for the relief of Specific Performance. In His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526 cited by Mr. Venugopal, this Court said that there was a difference between readiness and willingness to perform a contract. While readiness means the capacity of the Plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the Plaintiff. The same view was taken by this Court in Kalawati v. Rakesh Kumar, (2018) 3 SCC 658.
35. Even in a first appeal, the first Appellate Court is duty bound to examine whether there was continuous readiness and willingness on the part of the Plaintiff to perform the contract. This proposition finds support from Balraj Taneja v. Sunil Madan, (1999) 8 SCC 396 and H.P. Pyarejan v. Dasappa, (2006) 2 SCC 496 where this Court approved the views taken by the Privy Council in Ardeshir Mama v. Flora Sassoon, AIR 1928 PC 208.
36. In Malluru Mallappa v. Kuruvathappa, (2020) 4 SCC 313 this Court observed and held:-
"13. It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the appellant and therein all questions of fact and law decided by the trial court are open for reconsideration. Therefore, the first appellate court is required to address itself to all the issues and decide the case by giving Page 35 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined reasons. The court of first appeal must record its findings only after dealing with all issues of law as well as fact and with the evidence, oral as well as documentary, led by the parties. The judgment of the first appellate court must display conscious application of mind and record findings supported by reasons on all issues and contentions [see :
Santosh Hazariv. Purushottam Tiwari [Santosh Hazari v. Purushottam Tiwari, (2001) 3 SCC 179] , Madhukar v. Sangram [Madhukar v. Sangram, (2001) 4 SCC 756] , B.M. Narayana Gowda v. Shanthamma [B.M. Narayana Gowda v. Shanthamma, (2011) 15 SCC 476 : (2014) 2 SCC (Civ) 619] , H.K.N. Swami v. Irshad Basith [H.K.N. Swami v.
Irshad Basith, (2005) 10 SCC 243] and Sri Raja Lakshmi Dyeing Works v. Rangaswamy Chettiar [Sri Raja Lakshmi Dyeing Works v. Rangaswamy, (1980) 4 SCC 259]]
14. A first appeal under Section 96 CPC is entirely different from a second appeal under Section 100. Section 100 expressly bars second appeal unless a question of law is involved in a case and the question of law so involved is substantial in nature.
18. It is clear from the above provisions and the decisions of this Court that the judgment of the first appellate court has to set out points for determination, record the decision thereon and give its own reasons. Even when the first appellate court affirms the judgment of the trial court, it is required to comply with the requirement of Order 41 Rule 31 and non- observance of this requirement leads to infirmity in the judgment of the first appellate court. No doubt, when the appellate court Page 36 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined agrees with the views of the trial court on evidence, it need not restate effect of evidence or reiterate reasons given by the trial court. Expression of a general agreement with the reasons given by the trial court would ordinarily suffice.
37. In H.P. Pyarejan v. Dasappa (supra), Justice Arijit Pasayat speaking for this Court reversed the judgment of the High Court holding that High Court did not provide reasoning for its conclusion that Plaintiff was ready and willing to perform his part of contract. To arrive at such conclusion the Court had relied upon Cort v. Ambergate etc. and Rly. Co., (1851) 117 ER 1229 where Lord Campbell observed that in common sense, the meaning of such an averment of readiness and willingness must be that the non-completion of contract was not the fault of the Plaintiff.
38. In this case, we cannot overlook the fact that the suit property is located in the industrial town of Hosur located about 30/40 kms. from Bengaluru. The Court is obliged to take judicial notice of the phenomenal rise in the price of real estate in Hosur. The proposition finds support from case reported in K.S. Vidyanadam v. Vairavan (supra). To quote this Court "we cannot be oblivious to reality - and the reality is constant and continuous rise in the values of urban properties -fuelled by large scale migration of people from rural areas to urban centres and by inflation."
39. Mr. Venugopal argued that the Plaintiff had only paid an insignificant amount of Rs.10,001/- as advance when the consideration was Rs.15,10,000/-. Having paid an insignificant amount the Plaintiff was not entitled to discretionary equitable relief of Specific Performance, as observed by this Court in Page 37 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18. The relevant paragraph of the judgment of this Court is set out hereinbelow:-
"37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non- readiness". The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell Page 38 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined a property for rupees one lakh and receiving rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees."
40. As argued by Mr. Venugopal, the fact that the suit had been filed after three years, just before expiry of the period of limitation, was also a ground to decline the Respondent Plaintiff the equitable relief of Specific Performance for purchase of immovable property. Mr. Venugopal's argument finds support from the judgments of this Court in P.R. Deb and Associates v. Sunanda Roy, (1996) 4 SCC 423; K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1; Manjunath Anandappa v. Tammanasa, (2003) 10 SCC 390, Azhar Sultana v. B. Rajamani, (2009) 17 SCC 27; Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18.
41. In K.S. Vidyanadam v. Vairavan (supra) this Court held:
"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 timelimits stipulated in the agreement for doing one or the other Page 39 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined 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. 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 [(1993) 1 SCC 519] : (SCC p. 528, para 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...""
7.4 On reading the above decision, it is clear that it is well settled that in a suit for specific performance, the plaintiff should aver and prove that he is ready and willing to perform Page 40 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined his part of the contract. He is required to prove a continuous readiness and willingness from the date of the contract. The evidence on hand would indicate that when two letters dated 10.10.1993 and 05.05.2001 are read the first letter would indicate that the plaintiffs wanted time for over six months so as to overcome the slackness in business and the letter dated 05.05.2001 indicates that they were willing to pay Rs. 25 lakhs, however over a period of six months. Therefore, the trial court in our opinion rightly held that there was no readiness and willingness to perform the contract and we would add that these documents would indicate that they were being pressed into service only to overcome the startling fact of the parties being ad idem on the time being the essence of the contract which was not extended beyond 31.12.1993.
7.5 The release of the land from the acquisition proceedings did take place in the month of November, 1993, however, the plaintiffs did not perform and execute the contract till 31.12.1993. Thereafter, there is no written document to suggest that time was extended by the respondents/appellants. No clause of renewal of the Page 41 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined agreement based on expiry of time limit is shown in the agreement which could take the court to opine that time was not the essence of the contract. Therefore, it cannot be concluded that there was any contractual relationship between the parties post December 1993 either in the form of written communication or conduct .
8. On the question of discretionary relief in context of Sections 16 & 20 of the Specific Relief Act, read with Section 55 of the Contract Act, it is clear that though there was a clear stipulation in the agreement to sell, that dereservation shall be obtained latest by 31.12.1993, that was not done which therefore did not automatically entail extension of time.
8.1 Consequential to this, the trial court in our opinion having held that time was the essence of the contract i.e. upto 31.12.1993, a suit for specific performance had to be brought within three years from 31.12.1993, whereas it was filed seven years hence on 03.07.2001. It will be apt to consider the findings of the trial court on the issue of limitation where the trial court has held as under:Page 42 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024
NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined "In light of above legal position, looking to the facts and circumstances of this case, the following things become come out from the records.
(i) In this case, as per admitted suit agreement, there is specific dates were fixed by the parties to perform certain acts.
(ii) Neither, the plaintiffs nor defendant no. 1 to 3 has taken any objection during entire proceeding of this suit in respect of any conditions of contract or any kinds of illegalities of any conditions of contract. On the contrary, both the side were specifically admitted each and every conditions and contents of the suit agreement through their pleadings as well as their evidences.
Therefore, from records it's become clear that in this suit, dates were fixed by the parties with mutual free consent to perform certain act as mention in suit agreement.
(iii) Moreover, as per discussed earlier, in this judgment, there is no evidence is on record to establish that time motion in suit agreement was extended beyond 31st December, 1993.
(iv) Moreover, as per discussion in para 17 of this judgment, it's become clear that time was essence of the suit contract.
Above all the circumstances, makes clear that whe e particular time and date were fixed for performance of suit agreement in such a circumstances, cause of action to file any civil suit for specific performance, limitation would commence from the date fixed for performance and in the light of above discussion as well as facts and Page 43 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined circumstances of this suit, I do believe that in this case to file any civil suit for specific performance cause of action was arise from the date of 31st December 1993 and against this, the plaintiff has filed this suit after more than 7 years in the year of 2001. There- -fore, I do believe that the plaintiff suit is not filed within the limitation and it is filed after the period of prescribed limitation and same is hits by Sec.3 of law of limitation and require to dismiss on this ground alone.
In above all the circumstances, I am not agreed with the submission of plaintiffs' aide and after holding that the plaintiffs' suit is barred by Law of Limitation, I decided issue no.8 in in the Affirmative."
8.2 In the case of Urvashi Aggarwal (supra), the Apex Court considering the provisions of Article 54 of the Schedule to the Limitation Act read with Section 20 of the Specific Relief Act in paragraphs no. 10 to 15 held as under:
"10. There are essentially two points that arise for our consideration in this case. The first relates to limitation. A specific date i.e. 31.03.1975 was fixed for performance of the Agreement, i.e. execution of the sale deed. As per Article 54 of the Schedule to the Limitation Act, when a date is fixed for performance of the contract, the period of limitation is three years from such date. The cause of action has arisen on 31.03.1975 and the suit ought to have been filed within three years from that date. Admittedly, the suit was filed only in the Page 44 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined year 1987. However, the submission of the Plaintiffs is that the date fixed for performance of the Agreement stood extended by the conduct of the parties. It was submitted that even after 31.03.1975, the Defendants were pursuing the application filed for permission before the L&DO with the cooperation of the Plaintiffs. The further submission of the Plaintiffs is that without the permission of the L&DO, the sale deed could not have been executed on 31.03.1975. Therefore, the Plaintiffs submit that the date fixed by the agreement for the execution of the sale deed stood extended. It is settled law that the vendee cannot claim that the cause of action for filing the suit has not arisen on the date fixed in the contract on the ground that certain conditions in the contract have not been complied with. (See: Fateh Nagpal & Co. v. L.M. Nagpal, (2015) 8 SCC 390 Vishwa Nath Sharma v. Shyam Shanker Goela, (2007) 10 SCC 595 and K. Raheja Constructions Ltd. v. Alliance Ministries, 1995 Supp (3) SCC 17).
11. On a detailed consideration of the evidence on record, the Courts below have come to the conclusion that the clauses in the Agreement have neither been amended nor varied. Merely because the Defendants were pursuing the application filed for permission before the L&DO, it cannot be said that the date fixed for performance of the Agreement stood extended. We agree with the findings of the Courts below that the suit ought to have been filed within three years from 31.03.1975 which was the date that was fixed by the Agreement. The submission made on behalf of the Plaintiffs that part II of Article 54 of the Schedule to the Limitation Act applies to this case and that the suit was filed within limitation as the refusal by the Defendants was only in the year 1987 is not Page 45 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined acceptable. Moreover, the Plaintiffs have not performed their part of the Agreement within a reasonable period. As per the Agreement, the Plaintiffs were given the right to get the sale deed executed through the Court in case of failure on the part of the Defendants to execute the sale deed by 31.03.1975. The Plaintiffs filed the suit 12 years after the date fixed for performance. It is relevant to refer to the judgment of this Court in K.S.Vidyanadam v. Vairavan, (1997) 3 SCC 1 wherein it was held as follows:
"Even where time is not of the essence of the contract, the plaintiffs 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 and the nature of the property."
12. The silence maintained by the Plaintiffs for about 12 years amounted to abandonment of the Agreement and we approve the finding in this regard made by the Trial Court.
13. The Courts below have found that the Plaintiffs failed to prove their readiness and willingness to perform their part of the Agreement. The failure on the part of the Plaintiffs in not paying the monthly instalments of Rs.7,000/-, not collecting the rent from the tenant on the ground floor, not paying the house tax etc., and not taking any action for eviction of the tenant on the ground floor are some of the points held against the Plaintiffs by the Courts below which show that they were not ready and willing to perform their part of the Agreement. There is no compelling reason to re-examine the said findings of fact by the Courts below in exercise Page 46 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined of our jurisdiction under Article 136 of the Constitution of India. We are in agreement with the view of the Courts below that the Plaintiffs have not proved their readiness and willingness to perform their part of the Agreement and, therefore, are not entitled to a decree of specific performance.
14. The High Court directed a refund of Rs.70,000/- which was paid by the Plaintiffs to the Defendants in 1975 with interest at the rate of 24% p.a.. In view of the peculiar facts of this case in which the Plaintiffs have paid Rs.70,000/- way back in 1975 and the steep increase in the price of the property over time, we are of the considered opinion that the Plaintiffs are entitled to a higher amount than what was granted by the High Court. Instead of the refund of Rs.70,000/- with interest at the rate of 24% p.a., we direct the Defendants to pay Rs. 2,00,00,000/- (Rupees Two Crores) to the Plaintiffs within a period of eight weeks from today.
15. Subject to the above modification, the appeal is dismissed."
8.3 The Apex Court thus held that it is settled law that vendee cannot claim that the cause of action for filing the suit has not arisen on the date fixed in the contract on the ground that certain conditions in the contract are not being complied with. The court has held that even where time is not of the essence of the contract, the plaintiffs must perform their part Page 47 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined of the contract within a reasonable time and reasonable time should be determined by looking at all surrounding circumstances including the express terms of the contract and the nature of property.
9. Moreover, once the plaintiffs breached the contract and reasonable time has run, then there is no question of enforcing such a contract. Once it is shown that the plaintiffs have committed breach of agreement of failing to perform within a stipulated time or reasonable time, then it cannot be held that he was ready and willing to perform his obligation during the subsistence of contract. In such circumstances, as per Section 16(C)(3) of the Specific Relief Act, the plaintiff loses his right of specific performance of contract. This is also held in the decision of the Apex Court in the case of Anandram Mangturam (supra).
9.1 In the case of Haspur Road Cooperative Housing Society Ltd. (supra), the Apex Court has held that if two views are possible and one taken by the trial court being in consonance with the material evidence available on record, this court would not disturb such findings in exercise of Page 48 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined appellate jurisdiction.
10. For the aforesaid reasons therefore, this appeal is dismissed. Notice of admission is discharged. FIRST APPEAL NO. 1341 OF 2011
1. This appeal has been filed by the subsequent purchaser of the property. It appears that pending the suit an agreement to sale was executed by plaintiff no. 2 in favour of original defendant no. 4. The defendants no. 4 & 5 in turn executed a sale deed in favour of defendants no. 6 & 7 who are the appellants in First Appeal No. 1341 of 2011.
2. Considering the fact that the trial court had dismissed the suit for specific performance and refused to grant such a decree, once it was found that the plaintiffs had no right, title or interest over the land, the first appeal filed by the appellants who are subsequent purchasers and who had filed a counter claim cannot be accepted. The trial court therefore was of the opinion rightly on issues no. 11, 14 & 16 held that the disputed agreements to sell dated 28.11.2003 and Page 49 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024 NEUTRAL CITATION C/FA/1161/2011 CAV JUDGMENT DATED: 14/02/2024 undefined 27.11.2004 were not enforceable.
3. For the reasons therefore and in light of the decision in First Appeal No. 1161 of 2011, the aforesaid appeal also stands dismissed. Notice of admission is discharged. FURTHER ORDER:
Mr. Mehul Shah, learned Senior Counsel appearing with Mr. S.K. Patel, learned advocate for the appellant requests that the interim relief which was granted during the pendency of the appeals may be continued. Mr. Rutul Desai, learned counsel appearing for the respondent - original defendant objects to the extension of interim relief. However, considering the fact that during the pendency of the appeal of the year 2011, the interim relief has continued, we deem it fit to continue the interim relief till 20.03.2024.
(BIREN VAISHNAV, J) (NISHA M. THAKORE,J) DIVYA Page 50 of 50 Downloaded on : Wed Feb 14 20:46:15 IST 2024