Delhi High Court
Rakesh Kumar Jain vs Mr. Devender Singh Mehta on 1 December, 1999
Equivalent citations: 2000IIAD(DELHI)32, 83(2000)DLT615, 2000(52)DRJ616
Author: Vikramajit Sen
Bench: Vikramajit Sen
ORDER Vikramajit Sen, J.
1. This suit was filed a score years ago complaining that though an Agreement for the sale of 35, Babar Road, Bengali Market, New Delhi for Rs. 4.90 lakhs, had undisputably been arrived at between the parties, the Defendant had refused to complete the contract. The Defendant, to the contrary, asserts in the Written Statement that it was the Plaintiff who failed to honour this Agreement and hence the Defendant had no alternative but to end it. Hence this action for the specific performance of the written Agreement dated 8.9.1978 has come to be filed.
2. The Plaint sets out that the agreement was executed by the Plaintiffs and Defendant No. 1 for himself and for Defendant No. 2 as his duly constituted attorney. The Plaintiff paid Rs. 30,000/- to the Defendants on 8.9.1978 itself. The balance was to be paid in two stages - Rs. 2.6 lakhs at the time of possession and the execution of the Sale Deed and Rs. 2 lakhs within two years from the date of possession, together with iterest thereon at ten per cent per annum on the completion of the transaction. The payment of Rupees two lakhs contemplated at the second stage is indeed remarkable; almost always the entire sale consideration is made over atleast by the time of the execution of the Sale Deed. It was further covenanted that actual physical possession would be handed over within three months from the date of the agreement. Presumably it has envisaged that the construction would be completed by then. Clearance from then prevailing Competent Authority under Urban Land (Ceiling and Regulation) Act, 1976, and obtainment of permission from the L. & D.O. was also mentioned as the obligation of the Defendants. It is averred in the Plaint that these obligations were not performed by the Defendants as envisaged in the Agreement, the excuse given by them being the ill health of the sister of Defendant No. 1. After waiting for some time the Plaintiff state that the letter dated 5.4.1979 was written to the Defendants at their Rohtak Road address, which was received back with the endorsement that the Defendant was out of station. The next letter dated 2.5.1979 was also unserved, but this time the postal remark was "avoiding to take delivery" "kothi was lying vacant." It is then pleaded that on learning of the Defendant's return in December 1979 the Plaintiffs approached him to complete the transaction. Notices dated 21.12.1979, 23.12.1979 were then sent, but remained undelivered. On 13.1.1980 the Plaintiff received a letter dated 8.1.1980 from Defendant No. 1, stating that it was not possible to register the Sale Deed as requisite permissions had not been obtained and the sum of Rs. 30,000/- was tendered back. Admittedly, this payment has till date not been encashed by the Plaintiffs. Finally, another notice dated 5.7.1980 was issued by the Plaintiffs to the Defendants but could also not be served.
3. In the written statement it is pleaded that the agreement is "voidable, not executable and inoperative" on the grounds that the Plaintiffs were debarred, by virtue of Section 5 of the FERA, from making payment to the Defendants since they were British Nationals : and that since the Plaintiffs owned another immovable property they could not and did not sign and supply the necessary application and affidavits for the L. & D.O. persmission, as well as the Clearance under the Urban Land (Ceiling & Regulation) Act, 1976. It was next pleaded that the Agreement stood "exhausted, no longer operative and in force and binding upon the parties for the reason that Rs. 30,000/- was returned"; that the Plaintiffs were not financially in a position to pay the sale consideration : that the claim for damages of Rs. 4.5 lakhs was wrong, voidable and misconceived : that only Rs. 10,000/- at the most, could be claimed as damages : that the Defendants could not apply for the clearance/permission due to the failures of the Plaintiffs ; and that the letters/notices were never sent/served.
4. The disputes between the parties were crystallized by the Court in terms of the following issues having been framed :-
1. Whether defendant No. 1 and 2 are British National and are debarred from making any payment and/or receiving any payment in consideration of the sale of the suit property and the agreement is voidable/inoperative for that reason?
1A. Whether the agreement dated 8th September, 1978 is invalid and is hit by sections 31 and 47 of the Foreign Exchange Regulation Act, 1973?
2. Whether the parties had agreed to cancel the sale agreement dated September 8, 1978 as alleged in para - 8 (on merits) of the written statement?
2A. Whether it is not equitable to grant specific performance of the agreement to sell dated 8th September, 1978?
3. What is the effect of defendants returning Rs. 30,000/- by means of bank draft to the plaintiffs ?
3A. Whether specific performance of the agreement cannot be granted for the pleas raised in para 11 of the preliminary objections?
4. Whether the Plaintiffs were called upon to sign the necessary application and affidavits for obtaining permission for sale from the Government Authorities concerned and they failed to do so? If so, its effect?
5. Whether the plaintiffs were ready and willing to perform their part of the contract ?
6. Whether the plaintiffs are not entitled to specific performance of the contract even if breach on the part of the defendants is proved?
7. To what amount, if any, the plaintiffs are entitled towards damages?
8. Reliefs.
After considering the pleadings and perusing the evidence recorded by the adversaries, the decision on the various issues is as follows :-
ISSUE NO. 1 AND 1A.
5. These issues are best dealt with in two segments - firstly whether Defendant Nos. 1 & 2 are British Nationals and, if so, secondly whether they are legally debarred from the performance of the contract. The address at which the Defendants were arrayed and served is that of 3, C-31, Rohtak Road, Delhi, which is also the address given in the Agreement for Sale dated 8.9.1978, as also in the sundry affidavits filed in support of the Defendants pleadings. There is therefore no indication from here that the Defendants were not Indian citizens. Shri Sandeep Sethi, learned counsel for the Defendants did not address any arguments on this issue. This was perhaps for the reason that although Plaintiff No. 2, Shri Anil Kumar Jain was extensively cross examined on the question of applying for and obtaining permission for the sale of the suit property from the L. & D.O. there was not even a suggestion put to this witness/plaintiff that the efendants were British Nationals. Neither of the Defendants, nor any of their legal heirs have deposed to this effect. It is even more significant that apart from a bald statement by DW-2, allegedly a constituted attorney of the Defendants, that Defendants No. 1 was a British National, no evidence was offered on this issue. In a statement recorded on May 18, 1998 DW-2, Lok Nath Grover has stated that "because te Devender Singh could not stay in India for more than six months I say that he was a British National. I have seen his passport also and when he left in 1980 and 1981, he showed his passport to him." This statement will show that it was a mere assumption of this witness that Defendant No. 1 was a British National. It has also not been stated that Devender Singh (Defendant No.1) was the holder of a British Passport and even a photocopy of the passport has not been filed. There is considerable weight in the submission of the learned counsel for the Plaintiff that this issue could have been conclusively proved by submission of the Defendant's passport or documents showing their British Nationality. I, therefore, hold that the Defendants have failed to prove that they were British Nationals.
6. Even assuming against the plaintiffs on the former part of this issue, the question that would then arise is whether there was any legal embargo on the Defendants performing their obligations under the Agreement even if they were in fact British Nationals. It is relevant to mention that DW 2 has also stated that "no permission was obtained from any authority to sell the property No. 35, Babar Road. The Defendants being owner did not require any permission from any authority." The Defendant's witness has, therefore, destroyed the Defendant's set up in the Written Statement. Specifically, Ajit Prasad Jain Vs. N.K. Widhani & Ors. , is a complete answer on this vital issue. The relevant extract is reproduced below :
"In support of the objection under this issue defendants have relied upon Sec. 31 of the Foreign Exchange Regulation Act, 1973. The contention of defendants is that defendant No. 2 is not a citizen of India and as such he could not transfer or dispose of by sale, settlement or otherwise any immoveable property situate in India without prior permission of the Reserve Bank of India and as such the agreement to sell is void. In suport of the contention that defendant 2 has acquired citizenship of German Democratic Republic reliance is placed on citizenship certificate dt. 17.7.1970 (Ex. D6/1). It does appear from the said certificate that defendant No. 2 had acquired citizenship of German Democratic Republic but in my view that has no effect on the validity of the agreement in question. Section 31 of the Foreign Exchange Regulation Act on which reliance has been placed by the defendants only places a restriction on a foreign citizen on transfer or sale, ortgage, lease, gift, settlement or otherwise of any immoveable property situate in India except with the previous general or special permission of the Reserve Bank of India. The said provisions do not place any restriction on entering into greement like Ex.PW2/1. The said provisions also do not place an absolute bar to the transfer or sale of any property and as such it cannot be said that the agreement itself will become void. It is well-settled that a contract for sale by itself does not create any interest in or charge on such property (see Sec. 54 of the Transfer of Property Act). Thus it cannot be held that the agreement is void on the objection raised in preliminary bjection No. 4 based on Sec. 31 of the Foreign Exchange Regulation Act. The said provisions do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will arise, if at all, at the stage of execution of the sale deed."
7. A perusal of the Foreign Exchange Regulation Act would disclose that neither Section 31 nor Section 47 have been infracted. The Defendants admittedly maintained Bank Accounts in New Delhi, having encashed the sum of Rs. 30,000/- in New Delhi and there was thus no impediment in their receiving the sale consideration in India. Section 29 of the Act stipulates that foreigners must obtain Reserve Bank of India clearance prior to purchasing of immoveable property in India, but this restriction would obviously be inapplicable to persons who were Indian Nationals when they acquired such property. If they subsequently relinquished/lost Indian citizenship the intendment of the Act would be the placing of restrictions on their repatriation of the sale consideration. These disabilities eventually would, therefore, visit the Vendor and not the purchaser. Since I have held that it has not been proved that the Defendants were British citizens, the dicision on whether they were debarred from receiving payment in consideration of the sale of the suit property loses much of its significance. However, issue Nos. 1 and 1A, in their entirety, are decided against the Defendants.
ISSUE NO. 28. This issue was framed on the basis of the averments contained in paragraph 8 of the Written Statement on merits. It was stated that "on the receipt of Rs. 30,000/- returned by the Defendants, S/Shri Anil Kumar Jain and Rakesh Kumar Jain came in the middle of January 1980 and met Defendant No. 1 at the premises in question and mutually agreed to cancel the sale Agreement dated 8.9.1978 in the presence of one Shri Jamiat Singh". These allegations have been specifically denied in the Replication. No evidence has been presented by or on behalf of the Defendants in order to prove their assertion. No explanation is forthcoming why Shri Jamiat Singh/Jarnail Singh has not been produced. The only effort to lead some evidence on this issue, which evidence does not advance the Defendant's case in the least, is to be found in the cross-examination of P.W. 2 to the following effect :
"It is incorrect to suggest that in the middle of January 1980 I and Rakesh Kumar had met Defendant No. 1 at the premises in dispute and at that time it was decided that the agreement be cancelled as we were unable to furnish the affidavits. It is incorrect to suggest that we had met defendant No. 1 and at that time one Jarnail Singh was also present."
9. It shall be discussed below that the letter dated 8.1.1980 amounted to a unilateral termination of the Agreement, and was therefore not binding on the Plaintiffs. The Defendants have failed to prove this issue and I hold that the parties had not agreed to cancel the Sale Agreement dated 8.9.1978 as alleged in para 8 (on merits) of the Written Statement.
ISSUE NO. 2A
10. The discussion of this Issue should be considered in conjunction with Issue No. 6.
11. The circumstances where it would not be equitable to grant specific performance of the agreement are to be found in Section 20 of the Specific Relief Act. None of the provisions apply to the advantage of the Defendants in the present case. In addition to these statutory provisions, I would conceive of a situation worthy of the rejection of the prayer for specific performance in those instances where a plaintiff is guilty of protracting litigation. This is not so herein fact the Defendant has sought adjournments from time to time and has delayed the final adjudication of the suit by amending his pleadings twice. Furthermore it appears that Shri Devender Singh Mehta died in the United Kingdom on 24.5.1991, leaving behind his widow Smt. Surjit Kaur Mehta, and two sons namely Shri Meharban Singh and Harsharan Singh. All three heirs have filed affidavits to this effect, as well as vakalatnamas in favour of Mr. Vivekanand, but none of the documents have been authenticated by the Indian High Commission and are therefore inadmissable. These persons were imp leaded as Defendants pursuant to orders passed on 3.1.1995. None of them have appeared in the witness box to affirm the averments in the Written Statement. There is no vakalatnama in favour of any other Advocate, including Mr. Sandeep Sethi. Had my attention been drawn to these facts at the commencement of the arguments I may not have heard Mr. Sethi. Having done so, I have discussed the contentions raised by him. He had informed the Court that he had been engaged by Shri Lok Nath Grover, an holder of the Power of Attorney of the Defendants. This Power of Attorney, a photocopy of which has been exhibited as Ex. DW2/1, neither empowers Shri Lok Nath Grover to appoint any Advocate on behalf of the Defendants nor authorises him to give evidence on their behalf. Defendant No. 2 has not participated in these proceedings at all. Therefore, till date, no evidence has been led by the Defendants. I have narrated these facts in order to show that the signatories to the Agreement to Sell, being the original Defendants 1 & 2, and /or the former's legal heirs and subsequently imp leaded Defendants, are palpably not defending the suit. Equities in favour of the respective parties to the lis should alone be considered. I hold that no ground has been disclosed as would disentitle the Plaintiffs from the grant of the equitable relief of specific performance. This is specially so since the Defendants, other than Shri Lok Nath Grover, have not manifested any interest in the fortunes of this litigation. Mr. Sethi had relied on paragraph 1109 of Fry's treatise on Specific Performance of Contracts, but I cannot appreciate any reason for holding that the Plaintiffs are guilty of laches in filing of the present suit. I hold that no case has been made out that it is not equitable to grant specific performance of the Agreement to Sell dated 8.9.1978.
ISSUE NO. 312. It is not contested that the sum of Rs. 30,000/-, by Demand Draft, was sent to the Plaintiffs by the Defendants under cover of the former's letter dated 8.1.1980 (Ex.P-3). It reads as follows:
Dear Sir, With reference to your Sale Agreement dated 8th September 1978, regarding Sale of the House, I regret to inform that it is not possible to register the sale as the required permissions cannot be obtained. Therefore, the money paid is being refunded to you as per attached demand draft No. 233003 for Rs. 30,000/- issued by M/s. Karnataka Bank Ltd., New Delhi. Please acknowledge the same.
Any other matter can be amicably solved.
Thanking you, Yours faithfully, D.S. Mehta 3C/31, Rohtak Road, New Delhi-5.
A perusal of this letter leads me, inter alia, to the following conclusions :-
(a) No fault had been ascribed by Defendant No. 1 to the Plaintiffs for the failure to obtain any of the ermissions and in the syntax in which the word 'regret' has been used, it does seem to convey that the entire fault has been accepted by the author, that is Defendant No. 1. (b) The decision to return the money is not only unilateral, but is being conveyed for the first time.
(c) The significant result, the cancellation of the Agreement, is not even mentioned and has to be extracted from this communication, suggesting, perhaps, that the writer was greatly embarassed by the consequences of his action.
(d) On a comulative consideration of (a) to (c) the Plaintiffs had no role to play in the purported cancellation of the Agreement.
13. The ensuing events are of great importance : and not only for deciding this issue. Plaintiff No. 2 (PW-2) has stated that he tried to contact Defendant No. 1 at his Rohtak Road as well as Babar Road Addresses ; but could not find him. The statement is as follows :-
"I received letter dated 8th January, 1980 Ex. P3 on 13th January, 1979. Along with this letter, defendant No. 1 had enclosed a demand draft in the sum of Rs. 30,000/-, as per details mentioned in the letter Ex. P.3. On receipt of this letter I tried to contact the defendant No. 1 at his Rohtak Road address as well as Babar Road address but could not find him. His house at Rohtak Road was found locked and his neighbours told that he had gone out of station and they did not know his out station Address. We did not encash the draft but sent the letter dated 21st January, 1980 to defendant No. 1 under certificate of posting. Its carbon copy is Ex. PW2/5 (objected to). It was sent under certificate of posting Ex. PW2/5-A. The original of E. PW2/5 was not received back. In this letter we had told defendant No. 1 that we were not encashing the draft and had also asked him to contact us and tell us the problems in executing the sale deed. No reply was, however, received from defendant No. 1, and thereafter I sent letters dated 15th February 1980 and 12th May, 1980. The same are Ex. PW2/6 and PW2/7 (objected to).
These letters were sent under certificate of posting Ex. PW. 2/6-A and PW. 2/7-A. These were not received back. Because the registered A.D. letters sent earlier to defendant No. 1 were always received with the report about the non-availability of defendant No.1. I started sending letters by certificate of posting so that they could be delivered at his address and we can get some reply from him. The letters above said sent under certificate of posting have not been received back. Defendant No.1, however, did not send any reply to these letters".
14. In Cross Examination this witness stated as follows:
"It is incorrect to suggest that in the middle of January 1980 I and Rakesh Kumar had met defendant No.1 at the premises in dispute and at that time it was decided that the agreement be cancelled as we were unable to furnish the affidavits. It is incorrect to suggest that we have met defendant No.1 and at that time one Jarnail Singh was also present. I do not know if in March 1980 defendant No. 1 had gone to London. In January, 1980 however, Rohtak Road neighbours of defendant No.1 had told me that he had gone abroad. I do not know if in fact defendant No.1 was in India from January 1980 to March 1980. I do not know if defendant No. 1 lived in London from March 1980 to December 1980. It is incorrect to suggest that the letters dated 15th February 1980, 12th May, 1980 and 15th July, 1980 were never sent by us to the defendant. Since defendant No.1 was not available,the draft of Rs. 30,000/- sent by him could not be returned to him but we had written him a letter and the draft was not encashed by us".
The scenario that emerges, especially from the Cross-examination conducted on behalf of the Plaintiffs, is that Defendant No. 1 lived in London from March to December 1980. It was therefore not possible for the Plaintiffs to take any action pursuant to their having received the return of Rs. 30,000/- at least after February 1980. Had the Plaintiffs accepted the cancellation of the Agreement as proposed by Defendant No. 1 in his letter dated 8.1.1980, they would have encashed the sum of Rs. 30,000/- which was attempted to be regunded. Any prudent person would not risk returning the Demand Draft fully knowing that the addressee was not available at those addresses. I am unable to accept the argument put forward by the learned counsel for the Defendants that the letters PW2/5, PW2/6 and PW2/9, authored by the Plaintiffs are fabrications. This line of argument may have had some credibility had it not been the Defendants own case that they were not available in Delhi from March to December 1980. The argument of learned counsel for the Defendants that Rs. 30,000/- was not returned to the Defendants, is rejected, as also his further argument that by 'retaining' this amount "the Plaintiffs would be deemed to have acquiesced in the abandonment of the contract."
15. Reliance on the decision of Daulat Singh Chadha Vs. Rajender Kumar & Ors., is totally misplaced since the question which fell for determination was whether a notice sent under Certificate of posting was sufficient compliance under the Delhi Rent Control Act, Rule 22 of the Act lays down that service of notices should be carried out either in person or by registred post acknowledgment due. This precedent does not lay down that service by certificate of Posting is not to be countenanced in law. Much emphasis was placed on the fact that the letters dated 22.1.1980, 15.2.1980 and 12.5.1980 have not been referred to in the Legal Notice dated 5.7.1980. This would not, by itself, inescapably lead to the conclusion that these letters were not despatched. The Plaintiffs were not the authors of the 'legal' notice and it is fair speculation that the Advocate did not consider it essential to mention them. Perhaps the first mention would have been to these letters had they been fabricated/manufactured, so as to legitimise them.
16. In Bharti Rani Singh Vs. Rajinder Singh Bedi, 1997 III AD (Delhi) 1068, a Division Bench of this Court had examined in great detail the catena of cases on the vexed question of service of a notice sent under postal certificate. The decision in Bishambhar Nath Aggarwal Vs. Ved Kishan Chand, was relied on, specially the following passage :
"If any Agreement states that a particular act relating to the furtherance of the contract as to be done in a particular manner, then it should be done in that manner and it is not open to the concerned parties to chalk out his own manner of performing his part of contract".
Observation from other cases to the effect that it is not difficult to obtain a postal seal of a prior date on certificate of posting was also kept in perspective. The observations in Kanak Lata Ghosh Vs. Amal Kumar Ghosh, to the effect that where a letter is sent under postal certificate a presumption arises under Section 114 of the Evidence Act, but such presumption is rebuttable, found favour with the Division Bench. The view taken by the Division Bench was that "it can not be said that the mode of sending of letter under postal certificate is a very reliable and dependable mode in which implicit reliance can be placed. It will depend on the quality of evidence and the facts and circumstances of each case whether in fact such mode was actually adopted in a case and the evidence adduced is acceptable, dependable, and reliable or not?"
17. None of the cases cited in that decision are an authority for the proposition that service under postal certificate is to be invariably disbelieved by the Court. In the present lis it is the Defendants' own case that they were not available in Delhi from March to December 1980. No evidence has been led on their behalf to the effect that these letters had not been received by them. Whereas it is the Plaintiffs case that having been unable to reach the Defendants these letters were sent either by registered post acknowledgment due or under certificate of posting. In the Cross-examination the Defendants have, in my opinion, been unable to put any cloud on this part of the Plaintiffs case, such that the Court would conclude that these notices/letters were not in fact sent by the Plaintiffs. The dicision of the Division Bench would also assist the Plaintiffs inasmuch as the Agreement to Sell, of which specific performance has been sought, does not mandate that notices between the parties should be sent only by registered post. This decision, therefore, cannot further the case of the Defendants in this regard, that is, that the Plaintiffs were not ready and willing to perform their part of the contract and had manufactured/fabricated letters subsequently.
18. In these circumstances, I am of the considered view that the Defendants had attempted to unilaterally resile from their obligations under the contract by returning the part payment of Rs. 30,000/-. This is evident from the language of paragraph 8 of the Written Statement since it is averred that "for 3 months the Defendant No. 1 also did not receive any further intimation/reply to the effect that the Plaintiffs do not accept back the said sum of Rs. 30,000/- in cancellation of the sale Agreement... ." Mutuality is totally absent. The Defendants' did not contact the Plaintiffs. This action would not terminate the compact between the parties. The Plaintiffs did make repeated attempts to contact the Defendants, which were futile since the Defendants were not available in India atleast throughout March to December 1980. The fact that the Plaintiffs did not encash the Demand Draft sufficiently proves that they had not acquiesced in the Defendants attempt to cancel the Agreement. No inference is reasonably possible that the Plaintiffs had accepted the cancellation, and their filing the present suit in December 1980 also does not further the Defendants case. The filing of the suit, far from being inordinately delayed, was in the circumstances of the non-availability of the Defendants in India till the end of 1980, almost immediate, and atleast well before the statutory period of repose. Due to the absence of the Defendants from Delhi it may even have been reasonable for the Plaintiffs to have encashed the Demand Draft and still kept the Agreement alive, as has been held by a Division Bench in Mohd. Usman Vs. Union of India & Ors., , "that acceptance of earnest money under protest would not discharge the contract". I hold that by returning Rs. 30,000/- by means of the Bank Draft to the Plaintiffs, the Defendants could not terminate the Agreement dated 8.9.1978.
ISSUE NO. 3A
19. This issue arose consequent upon the second amendment sought to be carried out in the Written Statement, by the inclusion of Preliminary Objection No. 11. The Written Statement on record does not conform to the requirements of Rules 14 and 15 of Order VI of the Code of Civil Procedure, 1908; it has not been signed by the Defendants' Advocate and the verification does not state the date on which and the place at which it was signed. This Written Statement is, therefore, rejected. Perhaps this was the reason that learned counsel for the Defendants did not address any arguments on this issue.
20. However, since a Replication has been filed I have considered the objections, on merits. The subject Agreement to Sell was entered into on 8.9.1978 and would not be affected by any undertaking given in the subsequently filed writ petition, concurring issues which were not connected with the Plaintiffs. In any event, no evidence has been led by the Defendants to prove the issue, which is accordingly decided against the Defendants.
ISSUE NO. 421. The Agreement for Sale (Ex. P-1) contains the following Clauses 5 & 6, which are relevant for the determination of this issue :
"5. That the Intending Vendors before registration shall obtain the permission in favour of the Vendees or from the Competent Authority under Urban Land (Celling & Regulation) Act, 1976 and shall also obtain the permission to sell the above mentioned property from L & D O and shall also obtain the requisite Incometax clearance certificate from the Income-tax department before registration".
"6. That on receiving the above mentioned certificates the Intending Vendors shall inform in writing to the Intending Vendees, on receiving this intimation the Intending Vendees shall get the sale deed registered in their favour within two months from the date of information".
A controversy has been generated in Crl. M 3/86 on the question of the cancellation, under the initials of Defendant No. 1, of the words "their nominees" in Ex.P-1. Ex. P-1/B as also the certified copy (photocopy) of Ex.P-1 does not contain this cutting. A plain reading of these clauses would disclose that the responsibility of obtaining permissions from the Competent Authority under the Urban Land (Ceiling & Regulation) Act, 1976, from the L. & D.O. and from the Income Tax Department rested entirely with the Defendants/Vendors. No oral evidence controverting these terms is admissible. Even in the face of this legal embargo, learned counsel for the Defendant has submitted that PW-2 has admitted that the Plaintiffs were required to furnish the Affidavits in order to enable the Defendants to obtain the requisite permission. I have perused the testimony of PW-2 and in fact he merely states, in the context of the Plaintiffs' furnishing Affidavits for obtaining these permissions, that "I was not supposed to write to the Defendants that we were prepared to swear the affidavit and to give the same to them for obtaining the necessary permission from the authorities. " I am unable to read this statement as a refusal to furnish affidavits, as the learned counsel for the Defendant would have me do. Clauses 5 & 6 do not obligate the Plaintiffs to write letters to the Defendants in this regard. His statement, which has remained uncontroverted, to the following effect should be kept in mind " the Defendants ever asked to furnish any document either in the form of affidavits or otherwise to enable them to seek permission of the L. & D.O. for sale of the house in our favour." The same statement has been made in Cross-examination.
22. It was contended on behalf of Defendants that permission could not be obtained because of the failure of the Plaintiffs to give these affidavits, and that these affidavits could not be given by the Plaintiffs since they owned residential property in Delhi. It was argued that Plaintiff No. 1 met Defendant No. 1 in December 1979 and expressed his inability to give the required affidavit and hence it was mutually decided that the Agreement to Sell be cancelled. The tenor of the letter dated 8.1.1980 does not support this theory of a mutual decision to cancel the Agreement, and there is also no oral evidence to support this version.Significantly, there is no alternative evidence to show that the Defendants had called upon the Plaintiffs to provide these affidavits.
23. However, it would still have to be considered whether it was not possible for the sale transaction to be performed due to any inability of the Plaintiffs in this context. Reliance has been placed on 'Ex.DWC-1, which is a Sale Deed by which Plaintiffs 3 and 4 and the mother of the Plaintiffs, had acquired a share in a portion of 41, Babar Road, New Delhi. Learned counsel for the Plaintiffs has explained that permission could have been obtained from the L. & D. O. for the reason that the Plaintiffs had nominated Plaintiff No. 1 to purchase the suit property, as evidence in the Agreement Ex.PW2/10, and he was not debarred from being granted permission from the L.&D.O. It is also fair to conclude that the scoring out of the words "their nominees" under the signatures of Defendant No. 1 in Exhibit P-1 was carried out in a curreptitious and illegal manner to subvert the understanding between the parties whereby the Vendees were authorised to appoint their nominees. This issue is decided against the Defendants and I hold that they were not called upon by the Defendants to sign any application or affidavit for obtaining permission for sale from the Govt. Authority concerned.
ISSUE NOS. 5 & 624. These issues were strenuously contested and are dealt with together. Plaintiff No. 2 (PW-2) has stated that "we were ready and willing to perform our part of the contract" and that "we were in a position to pay the balance price of the house in terms of the Agreement..." It was on these statements that learned counsel for the Plaintiff predicated his submission that the Defendants had failed to prove their continuous readiness and willingness to fulfill their obligations under the Agreement to Sell. He argued that the 'readiness and willingness' should continue throughout the suit if the discretionary relief of specific performance was to be granted; since the Plaintiffs had not stated that they were willing to perform their obligations even when the Statement PW-2 was recorded, the suit ought to be dismissed. The following decisions were relied upon by the Defendants, viz. Ardeshir H. Mama Vs. Flora Sassoon AIR 1928 PC 208, P.G. Sinha Vs. Commodore K.C. Chatterjee & Ors., , Mali Bewa and Ors. Vs. Dhunda Samal & Anr., , Bharti Rani Singh Vs. Rajinder Singh Bedi, 1997 III AD (Delhi) 1068.
25. In Ardeshir H. Mama's case (supra) the Plaintiff had, nine months prior to the trial, informed the Defendant that the former had abandoned his claim for specific performance, and would instead claim damages. It was in these circumstances that it was observed that in a suit for specific performance the plaintiff was required to treat the contract as still subsisting and that he and willingness, from the date of the contract to the time of the hearing, to perform the contract on his part. It was held that failure on the Plaintiff's part to make good that averment would bring with it the inevitable dismissal of the suit. In construing oral evidence a pedantic approach needs to be eschewed, and it is incumbent that the words used by a witness must get its colour from all the attending facts. In the present case, unlike the case relied upon, it was not in contest between the parties that the Plaintiffs continued in their resolve to have the Agreement performed. The defense was that the Plaintiffs had acquiesced to the termination of the Agreement, but that would perforce relate to the period in 1980 and not thereafter. Had it been pleaded by either party that the Plaintiff was not willing to perform his obligations after a certain date, the statement of PW-2, in the past tense, would have to be strictly construed against him. The Defendants have traversed the averments in the plaint to the extent that the parties had mutually agreed to put an end to the Agreement, and not that the Plaintiff had changed their mind viz-a-viz performing their obligations. This decision does not assist the Defendants. Parties to a lis cannot be allowed to steal a victory through empty semantics.
26. In Mali Bewa's case (supra) the Learned Judge followed the ratio in Ardeshis case (supra), and made the following observations :
"I was myself thinking of going into the matter to reases the evidence and record findings in exercise of powers under Section 107, C.P.C. But I find, as Mr. Patnaik for the respondents, rightly indicates, that there is want of the basic assertion in the plaint and there does not appear to be evidence to support the stand that the plaintiffs were always ready and willing to perform their part of the contract. It is one of the fundamental requirements in a suit for specific performance that the plaintiffs must assert their such readiness and in case that fact is controverted by the defendants, to prove at the trial that they are ready to perform their part of the contract. Mr. Patnaik placed before me a , Gomathinayagam Pillai Vs. Palaniswami Nadar. Mr. Justice Shah, speaking for the Court, stated.
"But the respondent has claimed a decree for specific performance and it is for him to establish that he was, since the date of the contract, continuously, ready and willing to perform his part of the contract. If he fails to do so, his claim for specific performance must fail."
This decision would not have any application to the present case since it has been categorically and unequivocally pleaded in para 18 and 19 of the plaint "that the plaintiffs have applied to the Defendants to specifically perform the Agreement on their part but the Defendants have refused to do so. That the Plaintiffs had always been and are still ready and willing to perform the agreement on their part of which the Defendants had notice". In the Written Statement these averments have been only formally traversed. If the words used by PW-2 are to be read in their strict grammatical tense, I would have expected a case to this effect being explicitly made in the Written Statement.
27. The case of Vairavan Vs. K.S. Vidyanandam and Ors., , is a conspectus of various decisions on the question of specific performance of contracts and the following passage quoted therein from Prag Datt Vs. Saraswati Devi is of special significance :
"The observations of the Supreme Court referred to above, make it clear that the requirement of Section 16(c) and of Form 47 of Appendix A to Civil P.C. are not to be interpreted narrowly and in a hypertechnical manner. It is the substance of the matter which is of importance. If from the averment made in the plaints and the surrounding circumstances, it is established in substance that the plaintiff was ready and willing to perform his part of the contract and had remained ready and willing to perform the same throughout, it would not be proper to non-suit him on a verbal omission here or there. It has to be remembered that Section 16(c) of Form 47 of Appendix A of Civil P.C does not provide for booby trap of which an unscrupulous litigant should be allowed to take advantage".
(Underlining added)
28. In P.G. Sinha's case (supra) the Division Bench upheld the dismissal of the suit for specific performance for the reason that the Plaintiff had failed to pay Rs. 2000/- being the remaining part of the Earnest Money. The following portions of the Judgment are relevant and hence reproduced to illustrate that it would not apply to the case in hand:-
"18. In view of S. 16 of the Specific Relief Act it is necessary for the Plaintiff to allege and prove his continuous readiness and willingness to perform his part of the contract from the date of the contract till the date of hearing. mere pleading is not enough, the plaintiff has to state during trial that he is still ready and willing to perform his part of the contract. Reference may be made to the decision of the Supreme Court in Premraj Vs. D.L.P. Housing and Construction (P) Ltd., , Gomathinayagam Vs. Palaniswami, and Sandhya Rani Vs. Sudha Rani (AIR 1967 SC 537). It is also well settled that in order to prove readiness the plaintiff has to prove that he had the necessary means from the date of the contract till the date of the filing of the suit to pay the balance consideration money. It is contended by Mr. Roy Chowdhury that the Learned Trial Judge was right in holding that the plaintiff has failed to prove his readiness and willingness to perform his part of the contract."
"19. There is no doubt that the plaintiff agreed to pay the earnest money of Rupees 10,000/- in terms of the defendant No. 1's proposal dated 14.3.1980. He, however, wanted time till May, 1980 for making such payment. But even when he sent Rs. 8000/- towards the earnest money, his letter dated 23.5.1980 clearly shows that he was unable to procure Rs. 10,000/- towards the earnest money and asked for time to make such payment. The defendant No. 1 at that stage agreed to give him about two months' time to make the payment of Rs. 2000/-. But the plaintiff has in his evidence stated that he never sent the balance amount of Rs. 2000/- to the defendant No. 1. He took the plea that as the defendant No. 1 demanded 95% of the consideration money he did not send Rupees 2000/- being the balance earnest money."
"20. It was the obligation of the plaintiff to perform his part of the contract. Even if he did not agree to pay 95% of the balance consideration money as was subsequently made by the defendant No. 1 after he had occupied the suit premises, the plaintiff could have intimated that he was not willing to make the 95% of the consideration money immediately but was performing his part of the contract by paying the balance amount of Rs. 2000/-. The fact that the plaintiff did not take any step whatsoever to pay Rs. 2000/- being the balance earnest money which he even agreed to pay within two months from the letter dated 23.5.1980 but the explanation given by the plaintiff in his evidence for not performing that part of the original contrat clearly militates against his readiness to perform at least his part of the contract. Moreover, the correspondence clearly revealed that the defendant No.1 in view of his financial commitment wanted to dispose of his Calcutta properties to get the sale proceeds thereof quickly. As he found that the permission of the State Government might take more time he demanded the payment of 95% of the sale proceeds which amounts to Rs. 38,000/-. It is surprising that the repeated demands to that effect given by several letters failed to evoke any response from the plaintiff. The correspondence clearly reveals that his financial position was not good that is why he could not make initial payment of Rs. 10,000/- within one month of 12th March, 1980 and even if the defendant No. 1 gave him time till the month of May, 1980 to pay Rs. 10,000/-, the plaintiff could not make such payment. He asked for two months' time to make the payment of Rs. 2000/- but could not pay even Rs. 2000/- to the defendant and only in the letter of the Advocate made sometime in 1983 prior to the filing of the suit he made a very weak and half-hearted offer to pay the balance of Rs. 2000/- if the defendant No. 1 insisted upon it. The plaintiff has in his evidence stated that he had Provident Fund amounting to Rs. 35,000/- or Rs. 36,000/- to his credit and he could procure the same from his authority on production of the agreement for sale. No document was produced to show really what amount is lying to his credit at the time when the agreement for sale was entered into. Moreover, the Learned Trial Judge has rightly pointed out that there was no talk of formal agreement for sale and in such case when there was no such formal agreement for sale how could he procure money even from his P.F. Account. The defendant No. 1 performed his part of the contract submitted the application with the Estate Manager seeking the permission for sale. He also paid the certificate dues even though he wanted the plaintiff to pay 95% of the consideration money in order to meet his urgent commitment. If the plaintiff had really (shown?) his readiness to purchase the property, there is no reason as to why he would not respond to it. The fact that he remained completely silent to such request for money by the plaintiff shows that he did not have the readiness namely the financial capability to pay 95% of the consideration money as per the request of the defendant No.1. The defendant No. 1 has in his evidence stated that when he became convinced that he was not in a position to fulfill his obligation under the contract, he returned back the earnest money. We are unable to hold that such return of earnest money and revoking contract was in any way unjustified. In that view we are satisfied that the plaintiff has failed to prove his readiness and willingness to perform his part of the contract from the date of the agreement till the date of the suit".
29. The learned counsel for the Defendants has next relied on paragraph 69, but I find paragraph 90 also to be relevant in Bharti Rani Singh's case (supra). Both the paragraphs are reproduced :
"69. The legal position is not in dispute. Under Section 16(c) of the Act, the plaintiff seeking specific performance has to 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 continuously between the date of contract and the date of hearing of the suit. (Gomathinayagam Pillai & Ors. Vs. Pallani Swamynadu and Ardeshir H. Mama Vs. Flora Sassoon, AIR 1928 PC 208)".
"90. PW1 has also stated that his wife and he had enough cash money to pay balance amount but in cross-examination he has admitted that his wife had no money in the bank from 1969 to 1970. He has not disclosed the means and resources available with them. He has then claimed that they had sufficient cash with them being old Zamindars. There is no material on record to show what estate or assets were available to them to raise money or to convert it into money or what arrangement had been made for financing and completing the sale. It is also not his case that any money was available in his own bank accounts like the money shown in Ex.P. 13 in the bank account of his brother. Without disclosing the means and resources at their command his statement that he could arrange Rs. 3 lacs in a week's time cannot be believed. No witness or material to corroborate him in this respect has also been examined or produced. No doubt to prove himself ready and willing a purchaser has not necessarily to produce money or to vouch a concluded scheme for financing the transaction. But one has to show his bonafides and it cannot be left to the ipsi dixit of the plaintiff and for the purpose it is necessary that the plaintiff to be entitled to the relief of specific performance should prove his financial position or capacity to finance the purchase price as held in Swami Ganesh Dassji's case and Sukhbir Singh's case, ). In M.P. Thiruganam (dead) by LRs Vs. Dr. R. Rajan Mohan Rao and Others it has been held that, "The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. This circum-
stance is material and relevant and is required to be considered by the Court, while granting or refusing to grant the relief. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the Court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity to proved to be available. The Court cannot infer from the facts and circumstances the plaintiff is and was always ready and willing to perform his part of the contract."
(Underlining added)
30. The counsel for the Defendants has placed heavy reliance on the Order passed in His Holiness Acharya Swami Ganesh Dasji Vs. Shri Sita Ram Thapar, , but a perusal thereof shows that the Apex Court had concurred with the conclusions of the Single Judge and the Division Bench that the Vendee was not ready and willing to perform his part of the contract since he had refused to pay a sum of Rs. 1,00,000/- urgently required by the Vendor for the performance of his daughter's marriage. This decision has no application to the facts of the present case.
31. Similarly the decision in N.P. Thirugnanam (Dead) by Lrs. Vs. Dr. R. Jagan Mohan Rao & Ors. , turns on its own circumstances and paragraphs 4 and 5 are reproduced in order to illustrate the significance to be attached to facts in cases of specific performance :
"4. It is next contended that the plaintiff was always ready and willing to perform his part of the contract. To buttress it, counsel placed strong reliance on the evidence of P.W. 2, who had testified that he was willing and prepared to lend a sum of Rs. 2,00,000 to the plaintiff on the foot of a promissory note. It is not necessary for the Plaintiff that he should keep ready the money on hand. What is relevant and material is that he should have the necessary capacity to raise the funds and was ready and willing to perform his part of the contract which has been demonstarted by the evidence of P.W.2. We do not accede to the contention. The trial Judge had pointed out that on an application filed by the defendants, a direction was given to the plaintiff by order dated 11.2.1991 to deposit the amount of Rs. 2,00,000 or furnish bank guarantee giving time up to 11.3.1991. He neither deposited the amount nor has given bank guarantee. It was also found that the plaintiff was dabbling in real estate business. He had a house on hire purchase agreement with T.N. Housing Board. He paid only Rs.7750 upto 1980. A sum of Rs. 29,665 was further payable. He had an agreement with one Annama Philip for Rs. 49,500 to sell the said house after purchase from the Board. Obviously, he had obtained advance and sold the house to the vendee on 7.2.1980 after getting a sale deed executed in his favour. He entered into an agreement(EX.P-1) on 9.4.1979 to purchase the suit house for Rs. 2,30,000. He was not able to pay the loans and he ajusted Rs. 20,000/- which was paid towards arrears of rent and paid only Rs. 1975 under Ex. P-30 for the sale consideration of his house. He was unable to pay the rent to the respondents and had deposited huge amount towards arrears of rent pursuant to the orders of the courts. P.W.2, though professed to be willing to advance a sum of Rs. 2,00,000/- did not have cash and admitted that he had to obtain Rs. 2,00,000/- by hyothecating his property and at the same time was willing to lend on a pronote to the plaintiff a sum of Rs. 2,00,000/-, which was hard to believe. These circumstances were taken into consideration by the trial Judge as well as the Division Bench in concluding that the plaintiff was not ready and willing to perform his part of the contract contract".
"5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act, 1963 (for short "the Act"). Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. 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. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract."
32. Each case has to be decided on its own facts, as has been held by the Supreme Court in Ramesh Chandra Chandiok & Anr. Vs. Chuni Lal Sabharwal (dead) by Lrs. & Ors., . I have extracted paragraph 7 of this judgment since it contains the reasons why the Court, in facts and circumstances similar to those in the present case, concluded that the Plaintiffs (Vendees) should not be non-suited :
"On behalf of the respondents it has been urged that in spite of the letters of the respondent by which the agreement had been cancelled the appellants did not treat the agreement of sale as having come to an end and kept it alive. They were therefore bount to send a draft of the conveyance and call upon the respondents to executed the sale deed and get it registered on payment of the balance of the sale price as soon as they came to know directly from the Housing and Rent Officer that sanction had been granted. This they failed to do and it must be inferred that they were not ready and willing to perform their part of the agreement. Our attention has been invited to a statement in Halsbury's Laws of England, Vol. 34, Third Edn. at page 338 that in the absence of agreement to the contrary it is the purchaser who has to prepare the draft conveyance and submit it to the vendor for approval. No such point was raised at any prior stage and in any case we do not consider that after the cancellation of the agreement by the respondents it was necessary or incumbent on the appellants to send any draft conveyance. The very fact that they promptly filed the suit shows their keenness and readiness in the matter of acquiring the plot by purchase. It must be remembered that the appellants had not only put in an advertisement in newspapers about the existence of the agreement but had also sent a letter Exhibit P-13 on September 12, 1956 declaring their readiness and willingness to pay the balance of the purchase price on the respondents procuring the sanction. The appellants further made enquiries directly from the authorities concerned about the sanction. Readiness and willingness cannot be treated as a strait-jacket formula. These have to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned. In our judgment there was nothing to indicate that the appellants at any stage were not ready and willing to perform their part of the contract. The High Court had taken another aspect of readiness and willingness into consideration, namely, the possession of sufficient funds by the appeallants at the material time for payment of the balance of the sale price. Romesh Chand P.W. 6 had stated that his father was a Head Master since 1922 in a High School and he was also doing import business. He gave up service in 1934. The son joined the father in his business in the year 1928 and his other brother appellant No. 2 also joined that business some years ago. The bank account was produced which showed that between July 18, 1955 and December 31, 1955 the appellants' father had in his account a credit of over Rs. 15,000/- but thereafter January 1956 and March 1956 an amount of Rupees 16,000/- odd had been withdrawn. According to the High Court after these dates there was nothing to show that the appellants had any funds. The evidence of Romesh Chand P.W. 6 that the family had an amount of Rs. 40,000/- lying at their house was not believed. Now in the first place the relevant period for determining whether the appellants were in a position to pay the balance of the sale price was after November 1956 when sanction had been obtained by the respondents for transfer of the plot from the Rehabilitation Ministry. The appellants had admittedly paid without any difficulty Rs. 7,500/- as earnest money and the bank account of the father showed various credit and debit entries from time to time. On March 5, 1956 an amount of Rs. 12,720/- had been withdrawn by a cheque in favour of Romesh chand P.W. 6. According to his statement this amount was withdrawn because his father was very ill and it was decided to withdraw the amount at that time. It was deposited with his mother and remained with her throughout. There is no material or evidence to show that this amount had been expended or spent and that the statement of Romesh Chand was false on the point. Even if the version that Rs. 40,000/- in cash were lying at the house of the appellant is discarded at least an amount of Rs. 12,720/- must have been available at the material and relevant time. The appellants were carrying on business and there is nothing to indicate that they were not in a position to arrange for the remaining sum to make up the total of Rs. 15,000/-. We are, therefore, unable to accept that the appellants, who had all along been trying their utmost to purchase the plot, did not have the necessary funds or could not arrange for them when the sale deed had to be executed and registered after the sanction had been obtained".
33. Before discussing the evidence recorded in the present case, it would be appropriate to mention some of the cases relied upon by the Plaintiffs. It is often argued, especially since damages are invariably claimed in the alternative in suits for specific performance of an agreement, that the discretionary relief of specific relief ought not to be granted and the alternative relief of damages should instead be considered. This is clearly a legal misnomer and is contrary to various decisions of the Apex Court including the case of Prakash Chandra Vs. Angadlal & Ors., where it was held as follows:
"The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances should that damages would constitute an adequate relief. In the present case, the conduct of the appellant had not been such as to disentitle him to the relief of the specific performance. He has acted fairly throughout, and there is nothing to show that by any act of omission or commission he encouraged Mohsinali and Qurban Hussain to enter into the sale with the first and second respondents. There is no evidence that the appellant secured an unfair advantage over Mohasinali and Qurban Hussain when he entered into the agreement. Nor is there anything into the agreement. Nor is there anything prove that the performance of the contract would involve the respondents in some hardship which they did not foresee. In our opinion, there is no reason why the appellant should not be granted the relief of specific performance."
34. Since it has been argued with vehemence that the plaintiffs have failed to prove their capacity to make the payment of the balance sale consideration mention should be made to the decision of the Privy Council in the case of The Bank of India Ltd. & Ors. Vs. Jamsetji A.H.Chinoy and M/s.Chinoy and Co., AIR 1950 PC 90,wherein it was held as follows:
"The Appellate Court found on the evidence that JamsetjI was ready and Willing to fulfill his financial obligations under the sale. Their Lordships agree with this conclusion and the grounds on which it was based.It is true that plaintiff 1 stated that he was buying for himself, that he had not sufficient ready money to meet the price and that no definite arrangement had been made for finding it at the time of repudiation. But in order to prove himself ready and willing a purchaser has not necessarily to produce the money or to vouch a concluded scheme for financing the transaction. The question is one of fact and in the present case the appellate Court had ample material on which to found the view it reached".
35. Similar views have been expressed in Nathulal Vs. Phoolchand, , of which the following paragraphs call for extraction:
"4. In the view of the Trial Court Phoolchand was unable to procure the amount of Rs.21,000 which he had agreed to pay on or before May 7,1951 and on that account he had committed breach of the contract. The High Court held that Nathulal was not quality of breach of contract, for, Phoolchand had arranged with a Bank to borrow upto Rs.75,000/- when needed by him, and Phoolchand had on that account sufficient resources at his disposal to enable him to pay the amount due. The Trial Court and the High Court have held that Phoolchand failed to pay the amount on or before May 7, 1951. They have also held that he had not made the tender as pleaded by him"
"5. Under the terms of the agreement Nathulal had undertaken to get the name of his brother Chittarmal removed from the revenue records and to get his own name entered, but the lands continued to stand recorded in the name of Chittarmal till October 6,1952, and before that date Nathulal rescinded the contracts. Again by virtue of Section 70(4) of the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950, Phoolchand not being an agriculturist the land could not be sold to him without the sanction of the State Government. In the absence of any specific clause dealing wi6th this matter, a condition that Nathulal will secure the sanction under Section 70(4) after paying the appropriate fee must be implied for it is well settled that where by statute property is not transferable without the permission of the authority, an agreement to transfer the property must be deemed subject to the implied condition that the transferor will obtain the sanction of the authority concerned: See Motilal Vs. Nanhelal and Mrs. Chandnee Widya Vati Madden Vs. Dr. C.L. Katial, ".
"6. Phoolchand could be called upon to pay the balance of the price only after Nathulal performed his part of the contract. Phoolchand had an outstanding arrangement with his Banker to enable him to draw the amount needed by him for payment to Nathulal.To prove himself ready and willing a purchaser has not necessarily to produce the money or to vouch a concluded scheme for financing the transaction: Bank of India Ltd. Vs. Jamsetji A.H Chinoy and M/s. Chinoy and Co.,77 Ind App 76 at p. 91=(AIR 1950 PC 90 at p. 96).
36. In a more recent judgment of the Apex Court in Sukhbir Singh & Ors. Vs. Brijpal Singh & Ors. , it has been opined as under :
"Law is not in doubt and it is not a condition that the respondents should have ready cash with them. The fact that they attended the Sub-Registrar's office to have the sale deed executed and waited for the petitioners to attend the office of the Sub Registrar is a positive fact to prove that they had necessary funds to pass on consideration and had with them the needed money with them for payment at the time of registration. It is sufficient for the respondents to establish that they had the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of the suit till date of the decree. It would, therefore, be clear that the courts below have appropriately exercised their discretion for granting the relief of specific performance to the respondents on sound principles of law".
(underlining added)
37. The relevant statutory provision are to be found in Chapter II of the Specific Relief Act, 1963, and Sections thereof which are relevant for the disposal of the suit are set out hereunder :
"10. Cases in which specific performance of contract enforceable. _ Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced_
(a) when there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done : or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation. _ Unless and until the contrary is proved, the court shall presume_
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases_
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff."
"16. Personal bars to relief. _ Specific performance of a contreat cannot be enforced in favour of a person_
(a) who would not be entitled to recover compensation for its breach; or
(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
(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 bas been prevented or waived by the defendant.
Explanation. _ For the purposes of clause (c), _
(i) where a contract involves 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."
"20. Discretion as to decreeing specific performance._ (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so ; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.
(2) The following are cases in which the court may properly exercise discretion not to decree specific performance _
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant;
or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1._ Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).
Explanation 2. _ The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff, subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party."
I shall venture to digest the precedents on this subject in the following propositions :-
(a) A reading of the statutory provisions would show that although the passing of a decree for specific performance is discretionary, its grant would be the norm rather than the exception, or to use the words of the Section, there is a presumption in favour of its grant. This is also the observation of the Apex Court. It is most often argued on behalf of the Vendor/Defendant to the contrary, but there is neither precedential nor statutory imprimatur for canvassing this proposition. This is amply clear also from the fact that in this aspect of the law, the discretion is capable of correction by the Appellate Court, which is not normally the legal position.
(b) The instances/exceptions where the decree for specific performance may not be granted are to be found in the Chapter it-self, that is in Section 16 and 20(2).
(c) It is not essential that the Vendee/Plaintiff should have the sale consideration, in specie, at all times, but it is sufficient that he should have the capacity to pay. It would be absurd to insist that the Vendee should prove the ready availability of necessary funds, even in the instance where the Vendor/Defendant has cancelled or repudiated the contract.
(d) Pleadings even in the realm of specific relief should not be construed in so formal or 'strait'jacket' a manner that they would be stumbling blocks or booby traps or unsurmountable hurdless in the grant of discretionary and equitable relief.
(e) It is sufficient if the Plaintiff makes an everment of his readiness and willingness for performance of the contract at the time of the filing of the plaint. If there are averments in Written Statement, disclosing that after the filing of the Plaint certain events have occurred which are indicative of the Plaintiff either being unable or unwilling to perform the contract, then these would necessarily have to be traversed by way of a Replication, and evidence would have to be lead to dispel these doubts. For example, it would be necessary to prove willingness and capacity to perform the contract during the pendency of the suit if it has been pleaded in the Written Statement that the Plaintiff has suffered a financial set back or had changed his intention to go through with the contract after the filing of the suit.
38. Now, to the facts of the present case. The defense is that the Agreement stood cancelled by the letter dated 8.1.1980 of Defendant No. 1. I have already observed, and reiterate again, that the tenor of this letter is such that it indicates that the decision to put an end to the Agreement to Sell dated 8.9.1978 was unilaterally taken by the Defendants, and that they had not ascribed any fault to the Plaintiffs. This accusation is, no doubt, contained in the Written tatement, as also that the Plaintiff were "not financially in a position to pay off the full consideration of the suit property." This plank of assault is clearly an afterthought and is highly speculative inasmuch as no foundation for this grievance was made in the letter dated 8.1.1980. It stands to reason that if this was infact true, the Plaintiffs would have referred to it explicitly in this letter' itself. The deposition on behalf of the Plaintiffs, which has already been excerpted shows that they were businessmen of some means, earning annual profits which were substantial enough to enable them to pay the balance sale consideration, either on their own or through financial assistance of relatives such as Mr. Mohan Chand (P.W. 5) and Mr. Satinder Jain (P.W.6). In this context it is also relevant to refer to the covenant in the Agreement whereby the Plaintiffs were granted the liberty of paying the sale consideration even after the execution of the Sale Deed ; a clause which evidences the Defendants complete faith in the financial reliability and credit worthiness of the Plaintiffs. There is considerable force in the contention of the learned counsel for the Plaintiffs that as they were businessmen, it was reasonable to expect that they would not have kept money idle in Bank Accounts. The case of Ardeshir H. Mama's case (supra) was referred. In any event the Defendants had admittedly not performed their contractual obligations in the context of the construction in the suit property, obtaining electric and water connection etc., and it was only thereafter that the balance sale consideration was payable. In S.P. Narayanaswami Pillai Vs. Dhanakoti Ammal, it was held, and I respectfully concur, that failure to find money or prove possession of money before the time for performance arrives cannot be taken as a breach entitling the Vendor to resile from the contract. I am therefore satisfied that this ground is a fiction and has been raised only as a report to the filing of the action. Objections pertaining to the Plaintiffs inability to possess sufficient funds fall for minute consideration only on those cases where this ground has been taken by the Vendors from the inception of the disputes, and not where the Vendors have terminated the agreement for other reasons. The cancellation by the Defendants occured well before the time for payment had arrived. In any event, I am satisfied that the Plaintiffs had the financial strength to pay the balance sale consideration. By their conduct in not encashing the Bank Draft of Rs. 30,000/-, the Plaintiffs have manifested thier readiness and willingness to perform their part of the contract dated 8.9.1978. Issue No. 5 is decided in favour of the Plaintiffs. The Defendants have failed altogether to prove that the Plaintiffs are not entitled to specific performance of the contract dated 8.9.1978 and Issue No. 6 is decided against the Defendants.
Issue No. 739. Since, in my opinion, the Agreement to Sell dated 8.9.1978 deserves to be specifically enforced, this issue does not fall to be decided. The question of awarding, of damages, if any, would arise only in the event that, the prayer for the passing of a decree of a specific performance was not being granted.
ISSUE No. 840. For the reasons datailed above the prayer for the specific performance of the Agreement to Sell dated 8. 9. 1978 is granted.
Decree Sheet be drawn up accordingly.
41. The plaintiffs will be entitled to all the costs incurred in the suit.