Gujarat High Court
Rajya Tulsibhai Patel vs Benar Enterprise And Ors. on 29 July, 1987
Equivalent citations: AIR1988GUJ42, (1987)2GLR1082, AIR 1988 GUJARAT 42
Author: A.M. Ahmadi
Bench: A.M. Ahmadi
JUDGMENT A.M. Ahmadi, J.
1. The appellant plaintiff filed a Suit No. 238 of 1984 in the City Civil Court, Ahmedabad, for specific performance of the contract dated 15th Dec. 1980 and in the alternative for damages occasioned on account of breach of contract. The case set up in the plaint was that the first defendant, Messrs Banner Enterprise, a partnership firm, had floated a scheme for the construction and sale of industrial sheds on Final Plot No. 10-E of Rakhial Town Planning Scheme No. 10. The plaintiff met the organisers of the scheme and after knowing the terms and conditions thereof booked Shed No. 1 admeasuring 50sq. yards for a price of Rs.50,000/-, 70 per cent whereof was to be met through a loan to be at ranged by the defendants. Accordingly, out of the total price of Rs. 50,000/- a sum of Rs.35,000/- was to be paid through Government loan and the balance of Rs.15,000/- was to be paid by the plaintiff to the defendants, the organisers of the scheme. The plaintiff paid an amount of Rs.9,000/- by four instalments, the first three dated 15th Dec. 1980 and the last dated 17th Jan. 1981 under separate receipts issued by the defendants. According to the plaintiff, the balance amount was to be paid after the commencement of the construction of the shed.
2. On 24th May 1981 the foundation stone was laid and thereafter the plaintiff made inquiries from time to time as to when the construction was to commence but he was given evasive replies. However, on 15th March 1982 he received a letter from defendant No. 6. Messrs Banner Industrial Estate Limited, informing him that he was enrolled as a shareholder of that firm. The plaintiff states that this was done without his consent. He further states that thereafter when an explanation was sought as to how such a change could be brought about without the consent of the shareholders of defendant No. 1, evasive replies were given and when he insisted on knowing when the construction would start, a substantial amount without receipt was demanded from him. The plaintiff and three other members objected to the same and inserted a public notice in a local daily through an advocate dated 24th Dec. 1982 to which defendant No. 1 gave a reply dated 27th Dec. 1982 which was countered by an explanation dated 1st Jan. 1983. The plaintiff contends that the first defendant had with a view to defeating the claim of the plaintiff and others introduced a change in the name of the firm and in order to protect his rights for claiming Shed No. 1 on payment of the balance amount under the contract, the suit in, question was instituted. In para 8 of the plaint all these events have been stated as constituting the cause of action. In the relief clause, para 14(A), it is reiterated that out of the total amount of Rs.50,000/-, Rs.35,000/- were to be raised through Government loan and the balance of Rs.15,000/- was to be paid by the plaintiff to the defendants towards which Rs.9,000/- have already been paid. The plaintiff further stated in the relief clause that the defendants should be directed to receive the balance of Rs.6,000/- and execute a sale deed in his favour for Shed No. 1 after arranging for a loan of Rs. 35,000/- which he was and is ready and willing to repay by reasonable installments as may be fixed. On these averments the plaintiff claimed specific performance of the contract dated 15th Dec. 1980 and in the alternative damages for breach of contract amounting to Rs.30,000/-.
3. During the pendency of the suit the plaintiff filed an application. Exhibit 53, seeking to amend the plaint with a view to inserting a statement in the plaint to the effect that the plaintiff was always ready and willing to perform his part of the contract. The learned Judge in the City Civil Court relying on the decision of the Supreme Court in Prem Raj v. D.L.F. Housing & Construction Pvt. Ltd., AIR 1968 SC 1355 came to the conclusion that absence of averment as to readiness and willingness to perform his part of the contract tantamounts to absence of cause of action which is fatal to the suit in view of S. 16(c) of the Specific Relief Act. He also came to the conclusion relying on the decision of the Allahabad High Court in Mahomood Khan v. Ayub Khan, AIR 1978 All 463, that a valuable right to have the suit dismissed which had accrued to the defendants because of the absence of such an averment in the plaint would be lost if the amendment is allowed. He further observed under under Art. 54 of the Limitation Act, 1963, a suit for specific performance must be brought within three years from the time the plaintiff has notice about the refusal of the performance. Pointing out the averment in para 8 of the plaint, the learned Judge observed that the plaintiff had knowledge of the fact that the defendants had committed a breach of the contract sometime in May 1982 or, in any case, on 24th Dec. 1982 and hence the suit had to be brought on or before 24th Dec. 1985. Stating that it was settled law that an amendment, if and when granted, relates back to the date of the institution of the suit and, therefore, if the amendment application dated 5th Sept. 1986 is granted a valuable right which had accrued to the defendants for non-suiting the plaintiff would be lost because the application for amendment was made after 24th Dec. 1985. On these considerations the amendment application was rejected by his order dated 19th Sept. 1986. Thereafter on 26th Sept. 1986 the learned trial Judge rejected the plaint under O. 7, R. 11 (a) of the Civil P.C. on the ground that it did not disclose any cause of action. He also negatived the plea that the suit in regard to the relief for damages was maintainable on the ground that the relief for damages was claimed in lieu of specific performance of the contract and not alternatively or in addition to the relief for specific performance. In his view the relief for damages in lieu of specific performance could be granted only in those cases in which the plaintiff was entitled to specific performance and not otherwise. Since the cause of action for specific performance was wanting, the question of awarding damages in lieu thereof did not arise and hence the learned trial Judge held that the suit was not maintainable and rejected the plaint as stated above. Since the suit failed on a technical ground of non-disclosure of cause of action, the parties were directed to bear their own costs. It is against the aforesaid order of the learned trial Judge that the original plaintiff has preferred this appeal.
4. Section 16(c) of the Specific Relief Act, 1963 reads as under : -
"16. Specific performance of a contract cannot be enforced in favour of a person : -
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(c) who fails to aver and prove 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 terms the performance of which has been prevented or waived by the defendant.
Explanation: - For the purposes of clause (c): -
(i) where a contract involved the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."
On a plain reading of the above provision it is manifest that a Court of law will not enforce specific performance of a contract in favour of a person who fails to (i) aver and (ii) prove that he has performed or has always been ready and willing to perform his obligations under the contract other than those which have been prevented or waived by the defendant. The Explanation makes it clear that in cases where payment of money is involved under the contract, it is not obligatory on the part of the plaintiff to actually tender the same to the defendant or to deposit the same in Court unless the Court so directs. It is, however, necessary that the plaintiff should aver performance of, or readiness and willingness to perform the contract according to its true construction. The underlying idea is that a party seeking performance of the contract must not only aver but also prove that he has performed his part of the contract thus far and is ready and willing to perform the essential conditions of the contract, which he is required to perform. Only a person who is ready and willing to perform his part of the contract can seek redress in a Court of law for, specific performance of the contract against the party, which has committed a breach thereof. To put it differently, a person who has not performed his part of the contract or is not ready and willing to perform his part of the contract cannot come to Court seeking specific performance thereof on the plea that the other party has failed to perform his obligations under the contract. Only that person and is ready and willing to perform his contractual obligations can seek specific performance of the contract against a party which refuses to honour the contract. It is, therefore, obvious that in a suit for specific performance the plaintiff must both aver and prove that he has fulfilled all the conditions precedent to the contract and that he is ready and willing to perform the contract on his part. In Garikapati Veerayya v. Nannapaneni Subbyya Chowdhury, (1966) 11 SCJ 789 the Supreme Court observed: -
"........ In a suit for specific performance the plaintiff must aver in his plaint that he was ready and willing to perform his part of the contract and if the said averment is traversed, he must prove the said averment."
In Prem Raj's case (AIR 1968 SC 1355) (supra) the Supreme Court laid down the following proposition: -
"There is also another reason for holding that the appellant has made out no cause of action with regard to the relief of specific performance of the contract. 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. In the present case, no such averment is made in the plaint. On the other hand the plaintiff has alleged that the agreement was a result of fraud and undue influence and was not binding upon him. For these reasons it must be held that so far as the relief of specific performance is concerned, the plaintiff has no cause of action."
Again in Ouseph Varghese v. Joseph Alley, (1969) 2 SCC 539, the Supreme Court observed as under : -
"A suit for specific performance has to conform to the requirements, prescribed in Forms 47 and 48 of the First Schedule in the Civil P.C. In a suit for specific performance it is incumbent on the plaintiff not only to set out agreement on the basis of which he sues in all its details, he must go further and plead that he has applied to the defendants specifically to perform the agreement pleaded by him but the defendant has not done so. He must further plead that he has been and is still ready and willing to specifically perform his part of the agreement."
These observations show that absence of an averment on the part of the plaintiff in the plaint that he was and is ready and willing to perform his part of the contract amounts to failure to disclose a cause of action in regard to the relief for specific performance which would entitle: the Court to reject the plaint under O. 7. R. 11(a) of the Civil P. C. The question then is, whether in the present case the learned trial Judge was right in concluding that the plaintiff had failed to aver in the plaint that he was and is ready and willing to perform his part of the contract and had thereby failed to disclose a cause of action as required by S. 16(c) of the Specific Relief Act?
5. The remedy of specific performance was always regarded as supplementary to the common law remedy of damages. Being an equitable and discretionary remedy, the Courts considered the general fairness of the deal before granting the same. As a consequence Courts insisted that the plaintiff must show that he was always ready and desirous of performance of, the contract. This very principle has been given statutory recognition by the introduction of S. 16(c) on the recommendation of the Law Commission on the Specific Relief Act, 1877. While it is true that the averment is a 'must', the question is, whether mechanical reproduction of the words is what the statute contemplates?
6. It is true that a suit for specific performance must conform to the requirements of Forms 47 and 48 of the First Schedule to the Civil P.C. It is necessary that the plaintiff must aver that he was and is still ready and willing to perform his part of the contract. This is also the requirement of S. 16(c) of the Specific Relief Act. If a mechanical reproduction of the exact phraseology of the statute is intended, it must fairly be conceded that such words are not to be found in the plaint with which are concerned. In that case, on the ratio of the Supreme Court's judgment in Prem Raj's case (AIR 1968 SC 1355) (supra) the order rejecting the plaint for non-disclosure of the cause of action would have to be upheld. However, in our view the Supreme Court as, not laid down a hard and fast rule that failure on the part of the plaintiff to reproduce the exact words of the statute would be fatal. What the law contemplates is that when a person brings an action under a contract, he must disclose to the Court that he has not been guilty of breach of contract and that he has fulfilled all the material conditions of the contract and is also ready and willing to perform the other essential conditions of the, contract. What the law contemplates is that the plaintiff must disclose that he has hitherto performed his part of the contract and is ready and willing to perform the essential terms thereof, which he has to perform for the enforcement of the contract. Once he has disclosed this by pleading relevant facts, it would be futile to insist on form, that is, reproduction of the exact words of the statute. All that is required is that the facts pleaded in the plaint and the other averments made therein disclose substantial compliance with the requirements of the law. If the facts pleaded disclose that the plaintiff has performed his part of the contract and if the averments show that he is ready and willing to perform the other conditions of the contract, we think that would constitute compliance with the requirements of the forms and the statute even if the exact phraseology is missing. To insist on a mechanical reproduction of the exact words would be to insist on form rather than substance. It would be apposite to refer to the decision of the Supreme Court in Ramesh Chandra v. Chuni Lai, AIR 1971 SC 1238 wherein their Lordship pointed out that readiness and willingness cannot be treated as a straight jacket formula; these have to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned. To put it differently, the bundle of facts constituting the, cause of action must reveal that the plaintiff has not only performed his part of the contract but is also ready and willing to perform the other essential terms of the contract. If on an analysis of the facts averred in the plaint the Court finds that even though the exact words of the statute are not reproduced, the facts reveal that the plaintiff has performed all the terms and conditions of the contract up to the We of the institution of the suit and has shown his willingness to perform remaining terms of the contract, the requirement of law, in our view, would stand satisfied. In Prag Datt v. Sint. Saraswati Devi, AIR 1982 All 37, the High Court observed that it would not be proper to non-suit a plaintiff on the ground of omission to reproduce the exact words of the statute if from the averments in the plaint and the surrounding circumstances it can be inferred that the plaintiff was always ready and willing to perform his obligations under the contract and continued to do so. We are in respectful agreement with this line of reasoning.
7. In two cases, Dhian Singh v. Tara Chand, AIR 1984 All 4 and Anwarul Haq v. Nizam Uddin, AIR 1984 All 136, Agarwal J., had an occasion to consider whether omission on the part of the plaintiff to reproduce the phraseology of S. 16(c) would be fatal. The learned Judge pointed out that the substantive provision in S. 16(c) does not insist upon a particular set of words to be used: the averment must in substance indicate the continuous readiness and willingness on the part of the person suing to perform his part of the contract. This, the learned Judge observed, in suitable cases could be culled out from the totality of circumstances and the allegations made in the plaint. If the totality of circumstances and the allegations in the plaint disclose that the requirements of the statute are satisfied, the omission on the part of the plaintiff to adhere to the language or phraseology of the forms or the statute will be of no consequence. In other words, according to the learned Judge, it is not imperative nor is it the requirement of the law that the plaintiff must employ the same language or phraseology referred to in the forms and/or, the statute. We are in respectful agreement with the above view.
8. The next question is, whether there is substantial compliance with the requirements of law in the present case. The plaintiff has set out the essential terms of the agreement in the plaint. He has pointed out that he had entered into an agreement to purchase Shed No. 1 admeasuring about 50 sq. yards situate in Final Plot No. 10-E of Rakhiah Town Planning Scheme No. 10 for Rs.50,000/-, 70 per cent whereof was to be paid by raising a loan and the balance 30 per cent by payment in cash. The plaintiff has also averred that towards the amount of Rs.15,000/- to be paid in cash, he has already paid a sum of Rs.9,000/- by four instalments and was ready to pay the balance of Rs.6,000/- as per the agreement and the defendants may be directed to receive the same and execute a sale deed in his favour. He has also averred that he is ready and willing to take a loan of Rs. 35,000/- wh1ch the defendants had agreed to arrange and he is also ready and willing to repay the same by installments. On these averments the plaintiff claims specific performance if the contract dated 15th Dec., 1986 and alternatively claims Rs.30,000/- by way of damages for breach of contract. It would thus be seen from the averments in the plaint that so far as the plaintiff is concerned, he had entered into a contract for the purchase of one shed for Rs.50,000/- and had paid a sum of Rs.9,000/- in performance of the contract, was willing to pay the balance of, Rs.6,000/- on the execution of the sale deed and was also willing to raise a loan of Rs.35,000/- and pay the said amount to the defendants towards the sale price as initially agreed. The essential conditions of the contract set out in the plaint were thus sought to be performed by him. In our view therefore, the averments in the plaint clearly show that he had performed his part of the contract till the date of the institution of the suit and was ready and willing to abide by the other essential terms of the contract. We are, therefore, satisfied that even though the plaintiff did not employ the language of Forms 47/48 of the First Schedule to the Civil P.C. or the language of S. 16(c) of the Specific Relief Act, the averments in, the plaint amounted to substantial compliance with the requirements thereof and hence the learned Judge was not right in rejecting the plaint on the technical ground that it did not disclose a cause of action as the plaintiff had not stated in so many words that he was ready and, willing to perform his part of I the contract. There were sufficient averments in the plaint which substantially met with the requirements of law and hence when the plaintiff applied for amendment of the plaint with a view to conforming to the language of the statute, the learned Judge ought to have allowed the Amendment. By adding an averment, which would conform with the requirements of law, the plaintiff was not trying to add a new cause of action which was non est. In fact the bundle of facts constituting cause of action disclosed substantial compliance and if the learned Judge had allowed the amendment, the technical objection based on the omission of the phraseology of the statute would have been overcome. The order of the trial Court declining to permit the amendment has resulted in grave injustice to the plaintiff. It must be realised that the rules of pleadings ought not to be strictly construed and some latitude must be shown when the averments in the plaint substantially comply with the requirements of the forms and the law. Time and again it is pointed out that the rules of pleadings are intended to serve as guidelines and strict compliance therewith need not be insisted, That is why 14arula C.J., in Rama Nand v. Bhonri, AIR 1978 Punj & Har 291 held that if before the stage of recording evidence, has arrived the plaintiff applies for leave to amend the plaint with a view to expressing his readiness and willingness to perform his part of the contract, the amendment must ordinarily be allowed. The same view was taken in a recent judgment rendered by the Calcutta High Court in Byomkesh v. Nani Gopal, AIR 1987 Cal 92 where even though the averment in the plaint as to readiness and willingness to perform the contract was absent, both parties went to trial and the plaintiff tendered evidence to show his readiness and willingness and the defendant fully participated therein without a demur and the trial ended in a decree. The plaintiff was permitted at the appellate stage to make, good the defect by an amendment of the plaint. In the present case, however, we find that the bundle of facts pleaded in the plaint clearly disclose that the plaintiff was always ready and willing to perform his part of the contract and, therefore, the amendment was a formal one to conform to the phraseology employed by the law.
9. In view of the above discussion, we allow this appeal, set aside the order of the trial Court rejecting the plaint, restore the suit to file, permit the appellant to carry out the amendment as prayed and direct the trial Court to thereafter proceed with the suit m accordance with law. There will be no order as to costs.
10. Appeal allowed.