Andhra Pradesh High Court - Amravati
Sampanji Joguludied 2 Ors vs Shaik Appa Saheb 2 Aotherws. on 9 December, 2022
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THE HON'BLE SRI JUSTICE BANDARU SYAMSUNDER
SECOND APPEAL No.981 OF 2003
JUDGMENT
The 1st Appellant Sampangi Jogulu in O.S.No.295 of 1990 on the file of II Additional Subordinate Judge at Visakhapantam, is the original defendant against whom the respondents herein have filed suit for specific performance of a contract in pursuance of agreement of sale, dated 20.06.1987. As the 1st Appellant died during the pendency of the 1st Appeal, Appellants 2 and 3 added as his legal representatives as per orders in I.A.No.400 of 1999, dated 30.07.1999 on the file of I Additional District Judge, Visakhapatnam. The Appellants and the respondents herein after referred to as defendants and plaintiffs as arrayed before trial Court.
2. The plaintiffs have filed suit against the 1st defendant for specific performance of a contract in pursuance of agreement of sale, dated 20.06.1987 stating that the 1st defendant is the absolute owner of the plaint schedule property, which is a vacant site to an extent of 101 square yards, which the 1st defendant got as per decree dated 19.08.1924 in O.S.No.210 of 1924 on the file of District Munsif Court, Visakhapatnam, since then he has been in possession and enjoyment of the property. The 1st defendant agreed to sell the plaint schedule 2 property to the plaintiffs for consideration of Rs.27,270/- and received Rs.16,000/- on 20.06.1987 as part of sale price and executed Ex.A.1 agreement of sale and the 1st defendant agreed to obtain clearance from Urban Land Ceiling Authority to execute sale deed, for which, he required time till 20.08.1987, which agreed by the plaintiffs.
3. It is the contention of the plaintiffs that as per recitals of the agreement, the 1st defendant has to obtain permission from Urban Land Ceiling Authority within two months and thereafter, execute registered sale deed in their favour after receiving balance of sale consideration amount. They submit that they have been ready and willing to perform their contract by paying necessary stamp registration charges and also balance of sale consideration and paid Rs.1,000/- to the 1st defendant towards charges for obtaining ULC permission, the 1st defendant failed to perform his part of contract inspite of their repeated demands and legal notice dated 30.04.1990, but issued a reply dated 18.05.1990 admitting execution agreement of sale and stated that due to refusal of Land Ceiling Authority to issue certificate of clearance, he could not perform his part of contract and suggested for any reasonable alternatives. The plaintiffs also claimed alternative relief of refund of advance money with interest.
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4. The 1st defendant filed written statement resisting the claim of the plaintiffs though admitted execution of Ex.A.1 agreement of sale after receiving advance of sale consideration of Rs.16,000/- out of Rs.27,200/- from the plaintiffs to sell the plaint schedule site to an extent of 101 square yards. He submits that he executed an agreement of sale in favour of plaintiffs with a condition to obtain ULC permission by 20.08.1987 and thereafter himself and plaintiffs have together applied for permission from ULC authorities, but they have not granted permission on the ground that suit land is once upon a time a "Gramakantam" land, they cannot grant permission as such execution and registration of sale deed could not be effected.
5. It is the contention of the 1st defendant that he has no objection to pass a decree for Rs.16,000/- for refund of advance amount without subsequent interest and denied receiving Rs.1,000/- from the plaintiffs towards ULC permission charges.
6. Basing on the above pleadings, the trial Court has framed following issues:-
1. Whether the plaintiff is entitled for the specific performance of an agreement of sale, dated 20.06.1987?
2. Whether the plaintiff is entitled for the recovery of the suit amount as an alternative remedy?4
3. To what relief?
7. The parties went to trial. On behalf of the plaintiffs, PWs.1 and 2 were examined and got marked Exs.A.1 to A.3. On behalf of the defendants, DWs.1 and 2 were marked and no documentary evidence is adduced.
8. On the material and evidence, the trial Court held that the plaintiffs are not entitled to the relief of specific performance of a contract as plaint schedule property is "Gramakantam" land, but granted alternative relief of refund of advance of amount Rs.16,000/- with interest.
9. Against the Judgment and Decree passed by the trial Court, the plaintiffs have preferred A.S.No.61 of 1998 on the file of I Additional District Judge, Visakhapatnam, which was allowed and suit filed by the plaintiffs was decreed granting relief of specific performance of a contract with a condition of compliance with the requirement of ULC permission if so required.
10. In these circumstances, the present Second Appeal is presented by the legal representatives of deceased 1st defendant, who are added as Appellants 2 and 3.
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11. I have heard learned counsel Mr.Rohith, representing on behalf of Mr.D.V.Sita Rama Murthy, learned senior counsel for the Appellants as well as learned counsel Mr.K.A.Narasimham, representing for the respondents/plaintiffs.
12. This Second Appeal was admitted on the following substantial question of law:-
a) Whether the Lower Appellate Court erred in exercising its discretion in favour of the plaintiffs under Section 20 of Specific Relief Act particularly when the time is essence of the contract as per specific recitals of the suit agreement Ex.A.1 that the vendor shall obtain clearance from Urban Land Ceiling Authorities within two months from the date of agreement i.e., 20.08.1987?
b)Whether the suit agreement Ex.A.1 became inoperative and unenforceable in view of the refusal of the permission by the Urban Land Ceiling Authorities to suit transaction?
c)Whether the Lower Appellate Court erred in holding that refusal of permission by the ULC is bad, permission is not necessary to the suit property, which is nobody's case and beyond the scope of the suit under the provisions Specific Relief Act?6
d)Whether the Lower Appellate Court erred not granting decree in favour of the plaintiff by incorporating new terms that the ULC permission is not necessary etc., which parties have not agreed to at all?
e)Whether the plaintiffs are entitled for decree of Specific Relief as claimed in the suit particularly when, in the absence of any explanation by them for making demand for a period of two years, eight months and ten days from the date of agreement or from the date of expiry of period of two months for obtaining permission of ULC and there is rapid increase in the value of the suit property being Urban property?
f)Whether the Lower Appellate Court failed to frame proper points for consideration as to the plaintiffs entitled to the suit relief, as being the final Court of fact under Order XLI Rule 4 of C.P.C?.
13. Learned counsel for the Appellate would submit that there is specific clause in Ex.A.1 agreement of sale fixing time for performance of a contract within such date, the plaintiffs failed to pay balance of sale consideration amount. He would further submit that there is a condition in Ex.A.1 agreement of sale that ULC permission has to be obtained by the 1st defendant which refused due to that contract is became unenforceable thereby no relief of specific performance can be granted in favour of the plaintiffs which erroneously granted by learned 7 Appellate Judge reversing well reasoned Judgment of trial Court. It is the contention of learned counsel for the Appellants that the land being "Gramakantam" land no registered document can be executed in respect of those lands due to that Ex.A.1 agreement of sale is unenforceable.
14. He relied on following precedent law:
1) P.Purushotham Reddy and another ... Appellants Vs. Pratap Steels Ltd., ... Respondent (2002) 5 ALT 438 (DB) wherein this Court while considering the similar circumstances with regard to condition of obtaining Urban Land Ceiling permission to sell 4820 square meters of site as authorities have refused Urban Land Ceiling permission to sell the land held that contact become unenforceable in view of rejection of the permission by the authorities.
2) Lakshmi Sreenivasa Cooperative Building Society Vs. Puvvada Rama (Dead) by L.Rs. and Ors., MANU/SC/0798/2018 = AIR 2018 SC 3580 wherein the Hon'ble Apex Court held that when execution of agreement of sale is not proved relief of specific performance cannot be granted. In the said decisions, the Hon'ble Apex Court only discussed trial Court finding about suit agreement could not have been executed in view of bar contained in the Urban 8 Land Ceiling Act and even for that reason same were not valid. It is not the observation of the Hon'ble Apex Court that no specific performance of contract can be granted when land comes under Urban Land Ceiling Act, which only discussed with regard to the finding of the trial Court.
15. Learned counsel for the respondents/plaintiffs would submit that there is no pleading in the written statement filed by the 1st defendant that time is essence of the contract and admittedly the 1st defendant executed Ex.A.1 agreement of sale, now, the Appellants cannot contend that as it is "Gramakantam" land agreement of sale is unenforceable. He would further submit that learned First Appellate Judge also discussed extent of land as 101 square yards only, which not requires any permission and even otherwise no evidence placed by the appellants to show that the 1st defendant applied for Urban Land Ceiling Authority to sell the property, which was rejected as rightly observed by learned First Appellate Judge. He prays to dismiss the appeal.
16. As per Section 100 of Civil Procedure Code, this Court can interfere with the Judgment of the Appellate Court, if it is satisfied that case involves a substantial question of law. A finding of fact recorded 9 by Appellate Court is binding on this Court unless there is any error of law in such finding.
17. The Hon'ble Apex Court in Chandrabhan (Deceased) Through LRs and Ors .... Appellant(s) Vs. Saraswathi and Ors ... Respondent (s) in Civil Appeal No.NIL of 2022 arising out of S.L.P.(C) No.8736 of 2016, Judgment Dated 22.09.2022 held at para No.33 of Judgment, which reads as under:-
"33. The principles relating to Section 100 of the CPC relevant for this case may be summarised thus:
(i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law.
(ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents and involves a debatable legal issue. A 10 substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law.
(iii) The general rule is that the High Court will not interfere with findings of facts arrived at by the courts below. But it is not an absolute rule. Some of the well-recognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously;
or (iii) the courts have wrongly cast the burden of proof. When we refer to "decision based on no evidence", it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding."
18. In the present case, there is no dispute about execution of Ex.A.1 by the 1st defendant in favour of the plaintiffs wherein the recitals shows that the 1st defendant agreed to sell the plaint schedule property, which is a vacant site to an extent of 101 square yards to the plaintiffs for Rs.27,200/- and received Rs.16,000/- and agreed to execute registered sale deed within two months i.e., on or before 20.08.1987. It is also agreed that the 1st defendant shall obtain 11 permission from Urban Land Ceiling Authority and produce the same at the time of registration of the documents. It is no doubt true that the relief of specific performance of a contract for the sale of immovable property is Governed by equity and discretion of the Court. Ordinarily, relief of specific performance should be granted unless equitable consideration point to its refusal. So, the Court has to consider various circumstances, such as conduct of the parties, their respective interest under the contact and circumstances of the case to decide whether such relief is to be granted. Therefore, merely because it is lawful to grant specific relief, the Court need not grant the order. Even the Court would not exercise discretion in favour of the specific performance where the contract is not equal and fair, though such contract is not void. It is also well settled that the person who seeks the equitable relief of specific performance, must come to the Court with clean hands. It is also settled law that in case of contract of immovable property, time presumed not to be essence of contract, but even then it has to be performed in a reasonable time.
19. In the present case, though specific time of two months mentioned in the agreement of sale, as a condition for performance of contract which condition is followed by obligation on the part of the 1st 12 defendant to obtain ULC permission to perform his part of contract. It shows that the plaintiffs agreed to obtain registered sale deed when the 1st defendant obtained ULC permission, which is condition precedent. Though the 1st defendant has pleaded that himself and the plaintiffs together applied for ULC permission, but refused by authority, for which, he failed to produce any evidence to support his contention. As rightly contended by learned counsel for the respondents/plaintiffs that there is no averment in the written statement that time is essence of the contract of sale as per contents of agreement of sale, now the defendants are not permitted to take such plea in the Second Appeal. Even otherwise the Hon'ble Apex Court K.Prakash ... Appellant(s) Vs. B.R.Sampath Kumar ... Respondents(s) in Civil Appeal No.9047 of 2014, Judgment dated 22.09.2014 after elaborately discussing precedent law including English decision held at Para Nos.15, 16 and 17, which reads as under:-
15. Indisputably, remedy for specific performance is an equitable remedy. The Court while granting relief for specific performance exercise discretionary jurisdiction. Section 20 of the Act specifically provides that the court's jurisdiction to grant decree of specific performance is discretionary but not arbitrary.
Discretion must be exercised in accordance with the sound and reasonable judicial principles.
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16. The King's Bench in Rookey's Case [77 ER 209; (1597) 5 Co.Rep.99] it is said :
"Discretion is a science, not to act arbitrarily according to men's will and private affection: so the discretion which is exercised here, is to be governed by rules of law and equity, which are to oppose, but each, in its turn, to be subservient to the other. This discretion, in some cases follows the law implicitly, in others or allays the rigour of it, but in no case does it contradict or overturn the grounds or principles thereof, as has been sometimes ignorantly imputed to this Court. That is a discretionary power, which neither this nor any other Court, not even the highest, acting in a judicial capacity is by the constitution entrusted with"
The Court of Chancery in Attorney General vs. Wheat [(1759) 1 Eden 177; 28 ER 652] followed the Rooke's case and observed :
"the law is clear and courts of equity ought to follow it in their judgments concerning titles to equitable estates; otherwise great uncertainty and confusion would ensue. And though proceedings in equity are said to be secundum discretionem boni vin, yet when it is asked, vir bonus est quis? The answer is, qui consulta partum, qui leges juraq servat. And as it is said in Rooke's case, 5 Rep. 99 b, that discretion is a science not to act arbitrarily according to men's will and private affection: so the discretion which is exercised here, is to be governed by rules of law and equity, which are to oppose, but each, in its turn, to be subservient to the other. This discretion, in some cases follows the law implicitly, in others or allays the rigour of it, but in no case does it contradict or overturn the grounds or principles 14 thereof, as has been sometimes ignorantly imputed to this Court. That is a discretionary power, which neither this nor any other Court, not even the highest, acting in a judicial capacity is by the constitution entrusted with. This description is full and judicious, and what ought to be imprinted on the mind of every judge."
17. The principles which can be enunciated is that where the plaintiff brings a suit for specific performance of contract for sale, the law insists a condition precedent to the grant of decree for specific performance that the plaintiff must show his continued readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree is established then the Court has to exercise its discretion in favour of granting relief for specific performance.
20. It is also held at para No.19 that subsequent rise in price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, 15 therefore, on that ground a decree for specific performance cannot be reversed.
21. In Rathnavathi and Another ... Appellant(s) Vs. Kavita Ganashamdas ... Respondent (s) (2015) 5 SCC 223 the Hon'ble Apex Court after discussing precedent law also held that if the contract relates to sale of immovable property, it would normal be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence.
22. In the present case, as discussed supra though specific dates of performance recited in Ex.A.1 agreement of sale, the said condition is followed by obligation on the part of the 1st defendant to obtain ULC permission, which the 1st defendant failed to obtain and no evidence adduced by the 1st defendant that he applied and rejected due to that contract of sale is unenforceable to apply ration laid down by Division Bench of this Court in P.Purushotham Reddy and another case referred supra relied on by learned counsel for the Appellants. Learned Appellate Judge also discussed with regard to provisions of Urban Land Ceiling Act Section 26 of which provides that a person cannot sell the vacant land within the Ceiling Limit except after giving notice in writing of the intended transfer to the competent authority. Learned First 16 Appellate Judge also discussed Section 4 of the Act which prescribed the Ceiling Limit is fixed for 500 square meters in an Urban Agglomaration, failing which, Category-A 1000 square meters in Category-B 1500 square meters in Category-C and 2000 square meters in Category-D and discussed that transfer is only an extent of 101 square yards. Learned Judge also discussed about "Gramakantam" means as per "P.Ramanatha Aiyar", "The Law Lexicon" The Encyclopaedic Law Dictionary 1997 Edition is a part of ground in a village for building huts upon. Even otherwise the 1st defendant who admittedly owner of the plaint schedule property, he being owner entered into agreement of sale with the plaintiffs esstopped from pleading that he has no right to execute registered sale deed as land being classified as Gramakantam. Learned First Appellate Judge also discussed ration laid down in Indra Prasad Saxena, Appellant Vs. Chaman Lal Malik, Respondent AIR 1994 Allahabad 105 wherein it is held that non obtaining permission from authorities to sell the land will not oust jurisdiction of Courts to grant decree of specific performance of a contract. Learned Appellate Judge though Appellants/Defendants have not placed any evidence with regard to their applying ULC permission and rejecting the same by authorities, granted relief of specific performance with a condition of compliance with the requirements of ULC permission if so required. The said 17 observation of learned First Appellate Judge is well within parameters prescribed under Specific Relief Act and he rightly extended its discretion in favour of the plaintiffs which this Court not inclined to interfere while considering the Second Appeal under Section 100 of C.P.C.
23. Basing on the material and evidence, First Appellate Court rightly appreciated the evidence and reversed finding of the trial Court and decreed the suit. In these circumstances, finding no such questions that require consideration in the Second Appeal, much less, substantial question of law as pointed out for the Appellants, this Second Appeal has to be dismissed.
24. In the result, this Second Appeal is dismissed, confirming the Judgment of the Appellate Court. In the circumstances, there shall be no order as to costs.
As a sequel, pending miscellaneous applications, if any, shall stand closed.
The interim orders granted earlier, if any, shall stand vacated.
__________________________ JUSTICE BANDARU SYAMSUNDER Date :09.12.2022 Chb 18 THE HON'BLE SRI JUSTICE BANDARU SYAMSUNDER S.A.No.981 OF 2003 Date :09.12.2022 Chb