Punjab-Haryana High Court
Veena Goyal And Ors. vs Raj Kumar Mittal on 11 March, 2008
Equivalent citations: (2008)2PLR680
Author: Nirmal Yadav
Bench: Nirmal Yadav
JUDGMENT Nirmal Yadav, J.
1. This is defendants' regular second appeal against the judgment and decree dated 26.8.2006 passed by the Additional Civil Judge (Senior Division), Panchkula, allowing the respondent/plaintiffs suit for possession of plot No. 601, Sector 16, Panchkula by way of specific performance of contract, and the judgment and decree dated 27.01.2007 passed by the Additional District Judge, Panchkula whereby the verdict of the trial Court has been affirmed.
2. Brief narration of facts is that Smt. Veena Goyal, appellant No. 1/defendant No. 1 entered into an agreement dated 1.5.1987 with Raj Kumar Mittal, respondent/plaintiff to sell plot No. 601, Sector 16, Panchkula for a consideration of Rs. 1,52,000/- and received Rs. 5,000/- as earnest money. As per agreement, the sale deed was to be executed in favour of the plaintiff by the defendant on or before 31.5.1987 or within 15 days from the receipt of documents mentioned therein. The balance amount was to be paid at the time of execution and registration of sale deed. It was further agreed between the parties that in case defendants back out from the agreement, the plaintiff would have a right to get the sale deed executed in his name through the Court of law under Specific Relief Act and in case of plaintiffs backing out his earnest money would stand forfeited to the defendant. The bargain was finalized with the efforts of property dealer M/s Sandeep Arora Jain and Company at Panchkula.
3. According to plaintiff, defendant No. 1 did not execute the sale deed in his favour nor she obtained permission to sell the said plot from the Estate Officer, HUDA within the stipulated period i.e. up to 31.5.1987 or within 15 days from the receipt of certificates/documents as mentioned in the agreement to sell. As per agreement, the defendant was to obtain and handover the documents to the property dealer 10 days before the execution and registration of sale deed. The defendant had not obtained the required certificates/documents till the date of filing of the suit. However, the plaintiff came to know that defendant had instead applied for permission to sell the plot in favour of Smt. Rajmati wife of Inder Sain, Anand Jain son of Inder Sain and others. The said permission was granted by the Estate Officer, HUDA, vide Memo No. 11991 dated 26.6.1987. The plaintiff, therefore, filed a suit for permanent injunction against the defendant restraining her from alienating the suit property wherein ad-interim injunction was granted in favour of the plaintiff. The plaintiff thereafter came to know that defendant has also applied for permission to transfer the plot in favour of Inderjit Sharma, son of Labhu Ram and Jaswinder Kaur wife of Inderjit Sharma. The defendant has, thus, failed to execute the agreement to sell and has thereby committed breach of contract. Hence, the plaintiff filed the present suit for specific performance of agreement to sell.
4. The defendants contested the suit stating that plaintiff has neither paid the sum of Rs. 5,000/- as earnest money nor defendant No. 1 entered into agreement dated 1.5.1987 to sell her plot for a consideration of Rs. 1,52,000/-. Smt. Rajmati, etc. filed an application on 28.3.1989 stating that the plot in question has been transferred in favour of Smt. Rajmati, etc. by the defendant and permission had been granted by the Estate Officer, HUDA vide Memo dated 26.6.1987. Even thereafter, the plaintiff did not file suit for specific performance upto 20.7.1992. It was denied that plaintiff was put off by the defendant on one pretext or the other. It was admitted that defendant Veena Goyal had applied for permission to transfer the plot in question in favour of Smt. Rajmati, etc. and the said permission was granted on 26.6.1987. The plaintiffs conduct is mala fide and, therefore, he is not entitled to any relief in the present suit. In the replication filed by the plaintiff, the pleas taken in the written statement were controverted.
5. On the basis of pleadings of the parties, the following issues were settled for adjudication:
1. Whether the defendant entered into an agreement to sell the suit property in favour of the plaintiff vide agreement dated 1.5.1987 for a sum of Rs. 1,52,000/-? OPP
2. Whether the plaintiff paid a sum of Rs. 5,000/- as earnest money to the defendant? OPP
3. Whether the plaintiff is ready and willing to perform his part of agreement? OPP
4. Whether defendant failed to perform her part of agreement? OPP
5. Whether the suit is time barred? OPD
6. Whether the suit is barred under Order 2, Rule 2 CPC? OPD
7. Whether the suit is not maintainable in the present form? OPD
8. Whether the plaintiff has no cause of action to file the present suit? OPD
9. Whether the plaintiff has no locus standi to file the present suit? OPD
10. Whether the suit is bad for non-joinder of necessary parties? OPD
11. Relief?
6. The trial Court after taking into consideration the facts and evidence on record, decided all the issues against the defendants and decreed the suit. The defendants were directed to execute the sale deed in respect of the suit land in favour of the plaintiff within 15 days of depositing the balance sale consideration. The defendants filed an appeal against the judgment and decree of the trial Court, which were affirmed by the 1st Appellate Court. Hence the present regular second appeal.
7. I have heard learned Counsel for the parties and perused the evidence on record.
8. Learned Counsel for the appellants argued that plaintiffs suit is barred by limitation. It is argued that previously the plaintiff filed the suit for permanent injunction on 17.7.1987 pleading that he had come to know that defendant Veena Goyal had applied for permission to sell the plot in question in favour of Smt. Rajmati, Anand Jain, etc. as permission had been granted by the Estate Officer, HUDA vide memo No. 11991 dated 26.6.1987. It was further pleaded that the cause of action arose to the plaintiff on 30.6.1987 when he came to know about grant of permission to sell the suit property. Even as per plaintiffs own pleadings, he came to know about grant of permission on 30.6.1987 and, therefore, it had come to his notice that performance of agreement has been refused by the vendor. As such, limitation started from 30.6.1987, however, the present suit was filed on 20.7.1992 i.e. after a period of more than five years and much after the period of 3 years from the date of refusal for the performance of contract by the defendants. In support of his arguments learned Counsel placed reliance on in N.V. Srinivasa Murthy and Ors. v. Mariyamma (Dead) by Proposed LRs. and Ors. 1995 Supp (3) S.C.C. 17 : Rabeja Constructions Ltd. and Anr. v. Alliance Ministries and Ors. : Pukhraj D. Jain and Ors. v. G. Gopalakrishna , K.S. Vidyanadam and Ors. v. Vairavan and Ors. 1993 Supp (4) S.C.C. 492 in Thakamma Mathew (Smt.) Bakamma Mathew (Smt.) v. M Azamatbulla Khan and Ors.
9. The next argument raised by the learned Counsel for the appellant is that suit is barred by the provisions of Order 2 Rule 2 CPC. Learned Counsel pointed out that when the plaintiff came to know that defendant Veena Goyal had sought permission to transfer the plot in favour of some other person, he instead of filing suit for specific performance had chosen to file suit for permanent injunction on 20.7.1992. In the said suit, the person in whose favour permission was sought had filed an application under Order 1 Rule 1 CPC for being impleaded as a party. Despite that the plaintiff did not amend the suit already filed by him seeking permanent injunction to one for specific performance of the contract. The relief of specific performance, which he omitted to claim or relinquished in the earlier suit for permanent injunction, cannot now be claimed by filing the present suit. In support of his arguments, learned Counsel relied on (2005) 10 Supreme Court Cases 218 [Union of India v. H.K. Dhruv].
10. Learned Counsel for the appellants further argued that respondent/plaintiff has failed to prove his readiness and willingness to perform his part of contract. The plaintiff has himself admitted that on 31.5.1987, he did not go to the office of Sub Registrar. He also admitted that he did not withdraw the money from the bank nor he issued any notice to the defendant that he was ready and willing to perform his part of the contract.
11. The next argument raised by learned Counsel was that the agreement was not even scribed on stamp-paper. The plaintiff at that stage, stated that he was ready to make good the deficiency in stamp duty. But no document to show that plaintiff had acted upon the same, has been produced, therefore, the agreement to sell, Ex. P1 is not admissible in evidence. In support, learned Counsel referred to a judgment of this Court in Nathi v. Ghansi (1985-2) 88 P.L.R. 243 as well as of Karnataka High Court in K.B. Jayaram and Anr. v. Navineethamma and Ors. 2003 (2) I.C.C. 877.
12. On the other hand, learned Counsel for the respondent-plaintiff has argued that no substantial question of law arises in the present appeal for decision under Section 100 CPC by this Court. Learned Counsel pointed out that the questions of law, as formulated by learned Counsel for the appellants, are merely the questions based on facts and not on law, therefore, the appeal deserves to be dismissed on this score alone. It is vehemently argued that the question with regard to readiness and willingness of the plaintiff to perform his part of agreement is a question of fact and not of law. In support the learned Counsel relied on a judgment of the Apex Court in Phool Pata and Anr. v. Vishwanath Singh and Ors. .
13. Learned Counsel further argued that Vendor, Smt. Veena Goyal has admitted her signatures on document, Ex. P1 i.e. agreement to sell. No issue was framed with regard to deficiency of stamp duty on the said document and, therefore, the same cannot be allowed to be raised at this stage. The document, Ex. P.1 has also been proved from the statement of PW1-Raj Kumar and PW2-Suresh Kumar Jain. Learned Counsel further argued that defendant Veena Goyal herself did not step into the witness box. Though Manju Jain was stated to be her General Attorney, but no Power Of Attorney in her favour, was placed on record. Learned Counsel further argued that the terms and conditions as incorporated in the agreement to sell have not been complied with. As per Clause-3 of the agreement, vendor Smt. Veena Goyal had to obtain the Certificates/documents as mentioned in Clause-6, 10 days before the execution and registration of sale deed. Admittedly, none of these certificates/documents was obtained by her even till the date of filing of the suit. In Clause-3, it has been mentioned that last dare for completion of bargain is 31.5.1987 or within l5 days from the receipt of certificate(s) mentioned there under, but no date for execution of the sale deed was fixed and, therefore, there was no delay in filing the suit.
14. The plaintiff had been waiting that defendant Veena Goyal would obtain the certificates/documents as mentioned in the agreement to sell as sale deed was to be executed within ten days after handing over the documents. However, the defendant obtained the permission to sell in favour of a third person. When the plaintiff came to know that defendant has failed to perform her part of the contract, he filed the present suit. In such circumstances, the suit is not barred by the provisions of Order 2, Rule 2 CPC nor there is any delay in filing the suit.
15. Learned Counsel for the respondent further argued that the cause of action would have accrued only after the defendant had obtained the required certificates, therefore, the limitation would start from the date of accrual of cause of action. To substantiate his argument, learned Counsel referred to a couple of judgments in A. Abdul Rashid Khan (dead) v. P.A.K.A. Shahul Humid and Bhagwan Singh v. Teja Singh alias Teja Ram (1994-2) 107 P.L.R. 50. Learned Counsel further argued that for determining the applicability of Article 54 of the Limitation Act, it has to be seen whether any time was fixed for performance of agreement to sell and where no time is fixed for performance of contract, the Court may determine the date. It is further argued that the plaintiff was required to file the suit within three years from the date he had come to know about the refusal on the part of defendant to perform the contract. It is further argued that plaintiff has always been ready and willing to perform his part of contract, whereas, the defendant has caused breach of terms of the contract. In these circumstances, the Courts below have rightly decreed the suit in his favour.
16. Having heard the learned Counsel for the parties and after going through the judgments and decrees of the Courts below, I am of the view that the following substantial questions of law need to be answered in the present appeal:
i) Whether on a fair and reasonable interpretation of the relevant clauses of agreement, the suit is barred by limitation under Article 54 of the Limitation Act?
ii) Whether in the facts and circumstances of the case, the plaintiffs suit is barred by the provisions of Order 2, Rule 2 CPC?
iii) Whether on facts and in the circumstances of the case the discretion in granting relief of specific performance deserves to be exercised in favour of the appellant while also keeping in view the delay in filing the suit as well as the escalating prices of the land in question?
17. On careful consideration of the rival submissions, this Court is of the view that the plaintiffs suit for specific performance is hopelessly barred by limitation. As per agreement to sell, the sale deed was to be executed on or before 31.5.1987 or within 15 days from the date of submission of documents as referred to in the agreement. An overall reading of clauses of agreement to sell clearly shows that the agreement to sell was to be executed on or before 31.5.1987 and not beyond that date. The plaintiff had even come to know that defendant Veena Goyal had applied for permission to transfer, the plot in favour of Smt. Rajmati, Anand Jain, etc. As per Article 54 of the Limitation Act, limitation for specific performance of contract is 3 years from the date fixed for the purpose, and if no such date is fixed, the limitation would start from the date when the plaintiff had noticed that performance was refused. From the plaintiffs own admission and pleadings, it is evident that he had the knowledge that defendant Veena Goyal had refused to perform the contract on the date when she applied for permission to sell the plot in favour of Smt. Rajmati, etc. or it may be taken from the date when the permission was granted to defendant No. 1 i.e. 26.6.1987 or at the most, the date of knowledge would be from 30.6.1987 when the plaintiff came to know about grant of permission to sell the plot in favour of Smt. Rajmati, etc.
18. It is thus, evident that the plaintiff filed the suit after a delay of almost five years. In the meantime, third party having acquired the right in the suit property, the plaintiff is not entitled to the discretionary relief of specific performance, moreso, in view of the high rising and escalating prices. Even in the suit for permanent injunction filed by the plaintiff on 17.7.1987, it was specifically pleaded that he had come to know that defendant Veena Goyal had applied for permission to sell the plot in favour of Smt. Rajmati, Anand Jain, etc. and permission had been granted by the-Estate Officer, HUDA. The present suit is, thus, hopelessly barred by time and can not be allowed to be entertained at such a belated stage.
19. The next argument raised by learned Counsel for the appellant is that the suit is barred by the provisions of Order 2 Rule 2 CPC. Admittedly, the plaintiff filed suit for permanent injunction on 17.7.1987 vide plaint, Ex. DW3/C. In para-4 of the plaint, it was categorically averred that plaintiff has come to know from his own sources that defendant Veena Goyal has applied for permission to sell the plot in favour of Smt. Rajmati, wife of Shri Inder Sain, Smt. Purvashi, wife of Shri Tilak Raj, Smt. Shashi wife of Shri Sbhna Ram and Shri Anand Jain, son of Shri Inder Sain, residents of 3150, Sector 28-D, Chandigarh. A mention of memo No. 11991 dated 26.6.1987 vide which permission was granted by Estate Officer, HUDA, was also made in the plaint. Accordingly, the cause of action to file suit for specific performance, had arisen in favour of the plaintiff in June-1987 when he had acquired the knowledge that the vendor has obtained permission to sell the suit property in favour of some other persons. Moreover, as per agreement to sell, the sale deed was to be executed on or before 31.5.1987 or within 15 days from the receipt of certificates, which were to be handed over by defendant Veena Goyal to the property dealer M/s Sandeep Arora Jain & Co. Admittedly, it had come to the knowledge of the plaintiff that Veena Goyal had refused to execute the sale deed as she had already obtained permission to sell the plot in favour of a third party, therefore, there was no question of Obtaining the certificates as mentioned in the agreement to sell by Veena Goyal.
20. A bare reading of agreement to sell shows that sale deed was to be executed up to 31.5.1987 and not beyond that date. When the vendor did not come forward to execute the sale deed as per the conditions settled in the agreement to sell and the plaintiff had even come to know that vendor is taking active steps to sell the disputed property to a third party. To effectively deal with the contention raised on behalf of the appellants about the applicability of Order 2, Rule 2 CPC, it is apt to notice the provisions contained in Order 2, Rule 2 CPC, which are reproduced as under:
2. Suit to include the whole claim.-
xx xx xx xx (2) Relinquishment of part of claim. - Where a plaintiff to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.
xx xx xx xx As per provisions of Order 2, Rule 2 CPC, if a person is entitled for more than one relief in respect of same cause of action, may sue for all but shall not be allowed afterwards to sue for part of that relief, which he omitted at the time of filing of first suit. In order to attract the applicability of the bar enacted by Order 2, Rule 2 CPC, it is necessary that the cause of action on which subsequent claim is founded, should have arisen to the plaintiff when he had sought for enforcement of first claim before any court. The Apex Court in Kunjan Nair Sivaram Nari v. Narayanan Nair and Ors. has held that no subsequent suit will be allowed to proceed on the is sues which were substantially and directly in issue in a former suit between the same parties arising out of the same cause of action.
21. In the present case, admittedly, the cause of action to file the suit for specific performance had arisen on the date when suit for permanent injunction was filed by the plaintiff, but the plaintiff himself omitted to claim the relief of specific performance in the pleadings of the earlier suit. He did not even amend the suit later on, to incorporate the relief of specific performance. The plaintiff, however, filed the present suit for specific performance in the year 1992. The argument of learned Counsel for the respondent/plaintiff that cause of action in the earlier suit was distinct from the one accrued in the present suit, is fallacious and cannot be accepted. Once the plaintiff had come to know that vendor Veena Goyal had obtained the permission to sell the plot to third party, he was quite aware of refusal of performance of contract on her part, therefore, at that stage itself, he should have filed the suit for specific performance along with consequential relief of permanent injunction. Accordingly both the Courts below have erred in repelling and rejecting the argument raised by the appellants that the suit is barred by the provisions of Order 2 Rule 2 CPC.
22. Learned Counsel for the appellant vehemently argued that the relief of specific performance is a discretionary relief and it cannot be granted at such a belated stage. The plaintiff has allegedly paid Rs. 5000/- as earnest money and the suit property was agreed to be sold for a consideration of Rs. 1,52,000/- only in the year 1987. In the meantime, there has been a steep rise in the property prices in the region. The suit property may be worth several lakhs or in crores of rupees, therefore, the plaintiff is not entitled to the relief of specific performance at such a belated stage.
23. It is true that rise in prices of the property during the pendency of the suit cannot be the sole consideration for declining the claim for specific performance. However, it is well settled that discretion in a suit for specific performance of contract in respect of immovable property cannot be exercised mechanically, rather such a discretion has to be exercised on sound principles guided by justice, equity, good conscience and fairness to both the parties. It has come on record that even at the time of filing of the suit for specific performance, the permission had already been granted and even sale deed has been executed in favour of a third party and accordingly, the rights of third party have already accrued in the suit property. In these circumstances, grant of decree of specific performance in favour of the plaintiff at this stage, would be quite inequitable and unjust.
24. Learned Counsel for the respondent/plaintiff argued that appellant Veena Goyal has failed to prove that she was ready and willing to perform her part of the contract, whereas, the plaintiff has successfully proved that he was ready and willing to perform his part of the contract. It is argued, that vendor Veena Goyal did not obtain income tax clearance certificate nor did she obtain the required no dues certificates from the concerned departments, thus she failed to perform her part of contract, whereas, the plaintiff was having sale consideration ready with him and wanted to execute the sale deed. In this regard, there is only a self-serving statement of Raj Kumar, plaintiff who appeared as PW1 and oral statement of PW2-Satish Kumar. There is nothing on record to prove that plaintiff had approached the vendor or issued any notice to the vendor to perform her part of the contract. As per Clause-6 of the agreement, the sale deed was to be executed on or before 31.5.1987 and not later on. There is no evidence on record suggesting that the plaintiff was ready with sale consideration or he had approached the Sub-Registrar on the said date. Therefore, the plaintiff has miserably failed to prove that he was ready and willing to perform his part of contract.
25. In view of the above discussion, this Court is of the view that plaintiff is not entitled to discretionary relief of specific performance, therefore, it would be unrealistic, unfair and inequitable to grant decree' of specific performance to the plaintiff. Accordingly, the appeal is allowed and judgments and decrees passed by both the Courts below are set aside and suit is dismissed with no order as to costs.