Andhra HC (Pre-Telangana)
Nalamothu Venkaiya, S/O. Late Sri N. ... vs B.S. Neelakanta, S/O. Late Sri ... on 28 July, 2005
Equivalent citations: AIR2005AP535, 2005(5)ALD767, 2005(6)ALT585, AIR 2005 ANDHRA PRADESH 535, 2006 (1) AKAR (NOC) 41 (AP), (2006) 1 RECCIVR 575, (2006) 1 CURCC 370, (2005) 5 ANDHLD 767, (2005) 6 ANDH LT 585
JUDGMENT T. Meena Kumari, J.
1. This appeal is directed against the judgment and decree dated 1-10- 1999 in O.S. No. 1046 of 1994 on the file the V Senior Civil Judge, City Civil Court, Hyderabad, whereby the learned Senior Civil Judge decreed the suit for specific performance of the agreement of sale dt 03.6.1994.
2. The unsuccessful defendant is the appellant herein and the respondent herein is the first plaintiff in the above suit. Though the second plaintiff arrayed as second respondent herein, her name was deleted from the record as per the order in CMP No. 16823 of 2001 dt. 31-10-2001. During pendency of the appeal, since the original appellant died, his wife was brought on record as his legal representative.
3. The plaintiffs filed the suit for specific performance of the agreement of sale dated 3-6-1994. The case of the plaintiffs, as can be seen from the material allegations in the plaint, is as follows:-
(a) The defendant is the absolute owner and exclusive possessor of the suit schedule property having purchased the same under a registered sale deed document No. 1871/67 dt. 10-7-1967 and he constructed house with due permission from the Municipal Corporation of Hyderabad. The defendant in order to meet his domestic necessities and to discharge debts, offered to sell the suit schedule house and the plaintiffs agreed to purchase the same for Rs 2 crores. They both entered into agreement of sale dated 3.6.1994 and the plaintiffs paid a total sum of Rs 18 lakhs by 3.6.1994 including Rs 6 lakhs on 25-5-1994 which is evident from the suit agreement of sale and the receipt dated 3-6-1994. As per the agreed terms of the suit agreement of sale, from out of the balance sale consideration of Rs 182.00 lakhs, a sum of Rs. 32.00 lakhs had to be paid by the end of June, 1994 on the defendant executing power of attorney and other necessary papers in favour of the plaintiffs or their nominees to obtain necessary permission from the M.C.H., for construction etc., Rs 50.00 lakhs each was payable before 31.1.1995, 30-4-1995 and at the time of registration respectively. As per the covenants of the agreement of sale the defendant has to obtain Income tax clearance, to pay all the taxes, electricity charges, water charges and other statutory liabilities up to the date of execution of sale deed. The plaintiffs are entitled to deduct the proportionate value of the affected area, if any, at the rate of Rs.22,222/- per sq. yd., from the total sale consideration in the road widening. In the last week of June 1994, the plaintiffs offered to pay Rs. 32.00 lakhs and requested the defendant to execute power of attorney. The defendant avoided to receive the amount and to execute power of attorney. The plaintiffs persistently requested the defendant to perform his part of the contract while reiterating that they are ready and willing to pay the amount on executing power of attorney by the defendant. As the defendant refused to receive the a mount and execute power of attorney, the plaintiffs got issued legal notice dated 22-7-1994 for which the defendant sent reply notice dated 11-8-1994 disputing the right on the ground that he forfeited the advance amount of Rs 18.00 lakhs for violation of the agreement of sale. The plaintiffs are always ready and willing to perform their part of the contract. The allegation in the legal notice that the defendant is not the absolute owner of the suit schedule property and he was not in need of money establishes his malafide attitude to avoid the performance of his part of the contract. It is further stated that the defendant has no right or authority either to forfeit the earnest money of Rs. 18.00 lakhs or to refuse to perform his part of the contract. The time is not the essence of the contract. As the defendant declined to perform his part of the contract and issued reply with false allegations, the plaintiffs are constrained to file the suit.
4. The defendant resisting the suit filed his written statement while admitting the mode of acquisition of the suit schedule property, execution of the suit agreement of sale, and receipt of Rs 18.00 lakhs by 3-6-1994 and exchange of notices, and while traversing the material allegations that Rs. 32.00 lakhs are to be paid by the end of June, 1994 on executing the power of attorney and other necessary papers to obtain permission for construction, alleged offer of the plaintiffs to pay Rs. 32.00 lakhs by the end of June 1994 and the demand, about refusal to receive the amount and execute power of attorney, that the plaintiffs are ready and willing to perform their part of the contract, contending as follows:
a) Clause 2 of the agreement of sale dt. 3-6-1994 provide for payment of balance of the sale consideration according to time schedule which is the essence of the contract and, therefore, the plaintiffs had to pay Rs 32.00 lakhs by the end of June, 1994 before they could call on the defendant to execute power of attorney. Plaintiffs were never ready and willing to pay the said amount of Rs 32,00,000/- before the end of June 1994, as stipulated in the agreement and they failed to perform their part of the contract. As the plaintiffs failed to pay Rs. 32.00 lakhs before the end of June 1994, the defendant terminated the agreement and informed the same to the plaintiffs. The question of the plaintiffs requesting him to execute power of attorney did not arise, as the plaintiffs did not pay Rs 32.00 lakhs before the due date.
(b) The agreement of sale dt. 3-6-1994 came to an end as the plaintiffs failed to perform their part of the contract by the end of June 1994. The plaintiffs have no right to seek specific performance and the defendant is avoiding to perform his part of the contract does not arise.
(c) The suit is speculative and no cause of action.
(d) Time is the essence of the contract and plaintiffs are never ready and willing to perform their part of the contract. The defendant had rightly terminated the agreement. Thus, he prays to dismiss the suit with costs.
5. On the strength of the pleadings of both parties, the following issues were settled by the trial Court:
1. Whether the plaintiffs are entitled for the relief of specific Performance of contract as prayed for?
2. To what relief?
6. The Court below after conducting trial decreed the suit with costs. Aggrieved by the same, the present appeal is filed by the defendants.
7. Learned Senior Counsel appearing on behalf of the appellant submits that late husband of the appellant was the owner of the suit schedule property and on 3-06-1994 the suit agreement was entered into between the plaintiffs and the first appellant to sell the property and as per the said agreement Ex.A1, by that date the vendee- i.e., the respondent herein, paid a total amount of Rs 18.00 lakhs out of the sale consideration towards advance and earnest money to the vendor. He further submits that as per clause 2 of the agreement, the vendee shall pay Rs. 32.00 lakhs by the end of June 1994 and vendor has to execute power of attorney in favour of the vendee, but as the vendee did not turn up for payment of Rs. 32.00 lakhs before the end of June 1994 as agreed, the vendor has not executed the power of attorney and the same was informed to the vendee through his reply notice dt.11.8.1994. Learned Counsel also submits that the condition stipulated in the agreement shows that Rs. 32.00 lakhs have to be paid by the end of June 1994, a sum of Rs.50.00 lakhs before 31st January 1993, a sum of Rs.50.00 lakhs before 30th April 1995 and balance amount before the registration of the schedule house.
8. Learned Counsel, on the aspect that time was of the essence of the contract, submits that the time fixed for payment of first installment itself is essence of the contract as it was agreed upon between the two parties and in the absence of it's compliance, the time cannot be extended beyond the period as both the parties have not agreed upon and also there is no such clause in the agreement to extend the period. Further, failure of payment of any one installment that is contained in agreement within the time stipulated has to be construed, as time is essence of the contract. He further submits that even during the filing of the suit, the vendee herein was never turned up in paying the first installment of Rs.32.00 lakhs, except by the order of the Court and hence the late husband of the appellant could not execute the power of attorney in favour of the vendee as the power of attorney was required for obtaining necessary permissions to construct and to sign all necessary related papers.
9. Learned Senior Counsel further submits on the aspect of reciprocal promises that the specific word "shall pay" as contained in clause-2 of Ex.A1 agreement of sale makes it mandatory and obligatory on the part of the vendee to pay the agreed amount of Rs.32.00 lakhs, and thereafter the vendor has to execute the power of attorney, and it is not a 'reciprocal promise' or 'simultaneous' as contended by the respondent. He also submits that the respondent was never ready and willing to perform his part of the contract and he failed to pay Rs 32.00 lakhs by the end of June 1994.
10. Learned Senior Counsel further submits with reference to the notice got issued by the plaintiff that it is stated in the notice that the power of attorney would be executed and registered for obtaining necessary permissions from the Municipal Corporation of Hyderabad to construct Commercial Complex over the said premises after demolishing the existing structure and would sign all necessary papers incidental thereto. The learned Counsel relying upon the above contents of the notice argues that the conditions agreed upon in the agreement relates to firstly the payment of Rs 32.00 lakhs by the end of June 1994, and it relates to execution of power of attorney by the vendor or by their nominees to obtain the permission for construction. The learned Counsel further argues that the interpretation of clauses 2 goes to show that the payment of first installment precedes the execution of power of attorney. The words in the notice that "to construct commercial complex over the said premises after demolishing the existing structure and to sign on all necessary papers" would itself go to show that the condition mentioned in clause 2 in the agreement of sale has been varied to suite the convenience of the vendee, which is not permissible as there is no other agreement varying the conditions of the suit agreement and he also submits that the terms of agreement cannot be varied at the instance of one party and without the consent of the other party. He further submits that the vendor had perfectly replied to the legal notice Ex.B1 terminating the contract in view of the conduct of the vendee for the reasons firstly that respondent had not paid Rs 32.00 lakhs as agreed before the end of June 1994 as the execution of power of attorney required the payment and the other reason that the vendee had misconstrued the clause in the agreement stating that payment would be made on the condition the vendor would execute a power of attorney and get the same registered in favour of vendees or their nominees for obtaining necessary pe rmission from the Municipal Corporation of Hyderabad to construct commercial complex over said premises after demolishing the existing structure and would sign on all the necessary papers incidental thereto which is not a clause incorporated in the agreement. In this regard, the learned Senior Counsel submits that that the power of attorney is meant only for obtaining necessary permission for construction, but not for demolishing the existing structure and as the respondent himself varied the terms of the contract unilaterally without the consent of the vendor, the vendor was bound to cancel the agreement of sale while denying the approach by the vendee for making the payment of Rs 32.00 lakhs .
11. Learned Senior Counsel further submits with respect to the performance of the contract on the part of the vendee that except the oral assertion made by the vendee that he was ready and willing to pay Rs 32.00 lakhs, no documentary evidence is forthcoming to prove the above contention. He submits that it is not sufficient if only an oral assertion is made that he is ready and willing to perform his part of the contract in making payment, but it must be supported by way of any other mode of evidence to that effect and in the absence of such corroborative or documentary piece of evidence, it has to be determined by interpreting the clauses of agreement and also from the facts of each case and with reference to the conduct of the parties. He further submits that the vendee wanted to take the advantage of obtaining the power of attorney without payment and also with an intention that not only for obtaining permission to construct but also to demolish the existing structure and to sign on all the necessary papers by forcing the late husband of the appellant herein and the vendee wanted to vary the terms and conditions of the agreement to suite his convenience, which is not and which could not be a basis for and is beyond the scope of agreement and hence the court below ought not to have decreed the suit for specific performance.
12. Learned Senior Counsel also submits that the Court below went wrong in giving a finding that merely because forfeiture clause is absent in the agreement of sale, an inference cannot be drawn that time is not the essence of the contract and that the vendor has not chosen to cancel the contract as stipulated without issuing any notice. He further submits that the findings of the Court below that the suit contract consists of reciprocal promises to be simultaneously performed as enumerated in Section 51 of the Indian Contract Act is against the contents of the agreement and the Court below wrongly included the words 'simultaneous' which is not born on the agreement itself and which shows that it is one which fixes the order in which reciprocal promises are to be performed and it goes without any hesitation to show that to arrive at a conclusion the Court is prohibited from altering the conditions of the agreement. Learned Senior Counsel also submitted that during the course of pendency of the suit, a prohibitory order was issued against the plaintiff dated 31.1.1997 (Ex.B4) informing the vendee that the property mentioned in the suit shall not be disposed to any third parties and therein it was also mentioned that the defendant has acquired the property by cheating the Government with the connivance of the others. He submits that as per the pleading in para-4 of the plaint "Rs 32.00 lakhs by the end of June, '94 on defendant executing power of attorney and other papers in favour of the plaintiffs", which varies the conditions in the original agreement and hence the same is not permissible as the conditions have been varied by the plaintiff to suite his convenience.
13. Learned Senior Counsel further submits that in clause 5 of the legal notice, it was stated that Rs 32.00 lakhs will be paid provided late husband of the appellant would execute the said power of attorney and necessary papers incidental there to. So, a reading of clauses 2 & 5 of the said notice would go to show that to arrive at a conclusion that the payment should be made only on executing the power of attorney not only for obtaining permission to construct a commercial complex but also for demolition which is not condition agreed in the agreement of sale Ex.A1 and hence the legal notice itself goes to show that the plaintiffs themselves tried to vary the condition of the agreement beneficial to them which is not permissible.
14. Learned Counsel further submits with regard to readiness and willingness that except the oral statement of the respondent that he offered to pay the first installment of Rs 32.00 lakhs to the defendant, the defendant did not receive any amount, there is no corroborative or documentary evidence to substantiate the same. He also argues that had the plaintiffs been ready with the said amount, they could have paid it by way of cheque or draft to show their bonafides. In the absence of any such clinching evidence it can be safely said that they were never ready and willing to perform their part of the contract, and that they could have proved their bonafides by depositing the first installment of Rs 32.00 lakhs, leave alone the other installments, even at the time of filing of the suit and non depositing of the same itself goes to show that they were not ready and willing to perform their part of the contract. On this ground alone the suit filed by the plaintiff for specific performance of agreement would have been dismissed.
15. Learned Counsel also submits that in the reply notice issued by the late husband of the appellant the mentioning that the property is HUF cannot be taken advantage to say that the appellant was not inclined to proceed with the agreement in view of the fact that the appellant has not raised that dispute and by mistake it was stated that that it is a HUF property. Learned Counsel further argues that in the absence of any evidence, the plaintiff's stand that there is a breach of contract on the part of the late husband of the appellant herein on the ground that it is a simultaneous performance is not in conformity with the provisions of the 0 and also the Court below ought not have given a finding with regard to nature of property without there being any pleading and issue, whether it is HUF or not with the observations that the defendant did not choose to produce the registered sale deed and other relevant documents in respect of the suit schedule property in support of his assertion that he is the absolute owner. Learned Counsel further argues that the above observation should not be allowed to raise by the trial Court as it is no body's case that the defendant had a defective title and hence the findings on this aspect is beyond the scope of litigation. For the above reasons, the judgment of the Court below will not sustain and the same is liable to be dismissed.
16. Per contra, the learned Counsel appearing on behalf of the respondent argues that if clauses 2 and 3 read together it reveals that performance of the contract is simultaneous and the execution of power of attorney should precede the payment. As the late husband of the appellant herein denied to execute the power of attorney, the amount of Rs 32.00 lakhs could not be paid by the end of June 1994 and hence the time is not the essence of the contract, there cannot be a plea that time was essence of the contract and thus the Court below has rightly decreed the suit and ordered for specific performance. He further argues that apart from Rs 32.00 lakhs, which have been deposited in pursuance of the interim orders of the Civil Court, the vendee also deposited the balance amount of consideration in this Court. But, subsequently, the amount has been withdrawn by filing a petition with the permission of this Court. In the absence of any other evidence the version of the vendor that vendee was not ready at any time and did not approach him would not be relied upon and should not be believed. Learned Counsel further submits that though the vendee was always ready and willing to perform his part of obligation, it is the late husband of the appellant who was not at all ready to execute the power of attorney to obtain permission for construction. With reference to issuance of prohibitory order by the authorities of CBI, learned Counsel submits that it is an admitted fact that it was issued only against the third parties to the suit but not with reference to the parties to the agreement.
17. Learned Counsel for respondent also tried to support the judgment of the lower court stating that the contents of Exhibits have to be read in total to arrive at a conclusion that whether the time is essence of the contract or not and also to interpret the clauses of agreement whether they are simultaneous or the vendee should pay the amount first and then to obtain the power of attorney. Learned Counsel also argues the conduct of the husband of the appellant goes to show that it is the vendor who committed the breach of contract in not issuing even the legal notice immediately after 30-6-1994 to show his willingness to cancel the contract and on the other hand the vendee has issued a legal notice Ex.A3 dt.22.7.1994 requesting to execute the power of attorney and thereafter the vendor got issued the reply notice informing the vendee that he is canceling the agreement taking the plea of HUF and hence the judgment of the court below cannot be set aside.
18. From the above arguments it has to be examined the aspects that (1) whether the performance of the conditions in the agreement of sale is simultaneous as contended by the respondent herein; (2) whether the time was of the essence of the Contract.
19. POINT Nos. 1 & 2 :- It is very necessary to go into the clause 2 of Ex.A1, which is extracted below:
(1) xxxxxxxxxxxxxx (2) That it is mutually agreed upon between the parties that out of the balance sale consideration the vendee shall pay a sum of Rs. 32.00 lakhs by the end of June, 1994, and Vendor is agreed to execute power of Attorney in favour of the vendee or their nominee for obtaining the necessary permissions to construction and agreed to sign all necessary related papers. The remaining sum of Rs. 150.00 lakhs shall be paid to the vendor by the vendee as per the following schedule:
Before 31st January, 1995 Rs 50.00 lakhs Before 30th April, 1995 Rs. 50.00 lakhs And balance amount before the registration of the schedule house on the condition that the vendor shall discharge all the liabilities over the schedule house and produce nil encumbrance certificate and produce the original sale deed before the vendee. Further it is agreed by the vendor that if any land is taken over by the Government at the time of sanctioning the permission for the construction for road widening to that extent of land taken over by the Government a sum of Rs. 22,222/- per Sq. yard shall be deducted from the amounts payable by the Vendee.
From a reading of the above clause, it has to be observed that both the parties had an understanding for making payment by the end of June 1994 and then the vendor has to execute the power of attorney. In this case we had an occasion to go through the oral evidence adduced on behalf of the plaintiff, who was examined as P.W.1, who stated in his chief examination that they offered to pay the first installment of Rs. 32.00 lakhs in the month of June 1994, the defendant did not receive the amount nor was he ready with the G.P.A which he is supposed to give as per the terms and conditions. He further deposed that they waited for some time and requested him to receive the amount and execute G.P.A. As their personal request did not yield any result, they got issued legal notice. From the above evidence it has to be observed that P.W.1 except saying orally that he offered to pay the first installment of Rs. 32.00 lakhs and the defendant did not receive the amount, no other corroborative oral evidence or any other documentary evidence is placed to prove the said contention. In the further chief examination, the plaintiff himself has agreed as after full payment the defendant has agreed to execute an irrevocable power of attorney authorizing him to deal with the said property. He also deposed that the defendant did not execute G.P.A in his favour before end of June 1994 nor shown any draft of the sale deed and that they made several requests to execute the G.P.A and receive Rs 32.00 lakhs. Except the oral assertion of P.W.1 to the above effect, there is no documentary evidence or any other corroborative evidence is forthcoming to prove the said oral assertion of P.W.1. Further, P.W.1 also agreed in his chief examination that he has not enclosed any demand draft or he has deposited the said Rs 32.00 lakhs in the court below while filing the suit, except stating that he was ready and willing to pay the remaining sale consideration though his property was under attachment.
20. On the contra, D.W.1 has denied the averments made in the plaint stating that he was not demanded either orally or by any notice on or before 30th June 2004. He accepted the receipt of CBI notice Ex.B4 and it is his evidence that on the payment of Rs 32.00 lakhs by the end of June 1994 he has to execute the general power of attorney for the limited purpose of sanction for obtaining permission to construction. It is his further evidence that he denies the suggestion that the vendee is always ready and willing to perform his part of the contract. He further deposed that after 30-6-1994 the vendee never met him and he also never contacted.
21. Further, the Court below basing on the oral evidence decreed the suit while granting relief of specific performance on the ground that the undisputed and unchallenged evidence of P.W.1 touching this aspect of the case, coupled with the facts and circumstances clearly and clinchingly go to establish that the plaintiffs are always ready and willing to perform their part of the contract and in fact paid/deposited substantial sum of Rs 50.00 lakhs and expressed readiness to pay the remaining balance within one week. But the pleadings themselves go to show that the respondent has paid only 18 lakhs by 3- 6-1994 and deposited Rs 32.00 lakhs by virtue of the interim orders of the court on 6.2.1995. Thus, the observations of the Court below that the plaintiffs paid and deposited both prior and subsequent to the institution of the suit a substantial amount of Rs. 50.00 lakhs to arrive at a conclusion that the said fact leads to the irresistible conclusion that the plaintiffs are always ready and willing to perform their part of the contract, otherwise, the plaintiff cannot part with the substantial amount of Rs 50.00 lakhs is not acceptable. It is also the observation of the Court below that the defendants in the suit i.e., the appellant herein did not chose to dispute the statement of P.W.1. But, on examination of the evidence of D.W.1 it goes to show that he has stated that the plaintiffs even did not meet him during that period and there was no explanation for non payment and that there was no demand either orally or in writing before 30-6-1994. In his cross examination also he specifically denied the suggestion that the plaintiff approached him even before the end of June, 1994 and offered Rs 32.00lakhs while requesting to execute G.P.A for permission, that the payment and execution of G.P.A is simultaneous.
22. It has to be observed that the finding of the Court below as non-payment of Rs. 32.00 lakhs cannot be taken into consideration as a circumstance to show that the plaintiffs were not ready and willing to perform their part of the contract cannot have a basis in the absence of any term in the contract. The observation of the Court below that the plaintiffs have deposited the amount of Rs 32.00 lakhs in pursuance of the interim orders of the court goes to show that he was always ready and willing to perform the contract is not acceptable in the absence of any supporting evidence to arrive at such a conclusion and it cannot be surmised that plaintiff was always ready and willing to perform his part of the contract. Except a vague statement in para-6 of the plaint and also the oral assertion that the plaintiffs persistently requested the defendant to perform his part of contract and reiterated that they are ready and willing to pay the amount on executing power of attorney by defendant, there is no other documentary evidence to substantiate the said contention. The oral assertion itself is not sufficient to say that the plaintiff was ready and willing. It is also to be observed that the plea has to be supported by proof as propounded by the Apex Court in Pushparani S. Sundaram v. Pauline Manomani James . In this case, the Supreme Court categorically held that :
"So far there being a plea that they were ready and willing to perform their part of the contract is there in the pleading, we have no hesitation to conclude, that this by itself is not sufficient to hold that the appellants were ready and willing in terms of Section 16(c) of the Specific Relief Act. This requires not only such plea but also proof of the same."
"Section 16(c) of the said Act makes it clear that mere plea is not sufficient, it has to be proved."
From the above material and legal position, it has to be observed that the plaintiffs were never ready and willing to perform their part of the contract in terms of the conditions as agreed in the suit agreement.
23. With regard to reciprocal promises, the learned Counsel for the respondent submits that the terms of the contract would fall under Section 51 of the Indian Contract Act, 1872, in view of the fact that the payment of Rs 32.00 lakhs is only on the execution of the power of attorney in favour of the vendee. But, to rebut the said contention, the learned Senior Counsel relies on Section 52 of the Indian Contract Act, 1872 and submits that the order of performance have to be with reference to the clauses of the Contract and they have to be performed in the same order. In this regard, a Division Bench of this Court in Vegi Venkateswara Rao v. Venkatarama Rao alias Rajababu and Ors. discussed about the order of performance by quoting Sections 51, 52 & 54 of Indian Contract Act.
At this juncture it is necessary to refer to the Section 52 of the Indian Contract Act and the relevant clauses of the agreement of sale, which are extracted hereunder;
"Section 52:- Order of performance reciprocal promises, and as per which where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and, where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires."
Clause (2) of the agreement of sale:- "That it is mutually agreed upon between the parties that out of the balance sale consideration the vendee shall pay a sum of Rs 32.00 lakhs by the end of June, 1994 and vendor is agreed to execute power of Attorney in favour of the vendee or their nominee for obtaining the necessary permissions to construction and agreed to sign all necessary related papers...."
From the above, in this case, the order is fixed by the contract, and it has to be construed that the order of performance i.e., firstly the vendee shall pay a sum of Rs. 32.00 lakhs by the end of June, 1994 and then the Vendor has to execute the power of attorney and hence the observations of the Court below that in view of Section 51 of the Indian Contract Act, plaintiffs need not perform their part of the contract and that the contract consists of reciprocal promises to be performed simultaneous is without any basis and is not in conformity with the conditions of the agreement.
24. It has to be further observed that the Apex Court in a recent case in Manjunath Anandappa URF Shivappa Hanasi v. Tammanasa and Ors. , having referred to Pushparani S. Sundaram case (1st supra), held as follows at paragraphs 27 and 28.
"27. The decisions of this Court, therefore, leave no manner of doubt that a plaintiff in a suit for specific performance of contract not only must raise a plea that he had all along been and even on the date of filing of suit was ready and willing to perform his part of contract, but also prove the same. Only in certain exceptional situation where although in letter and spirit, the exact words had not been used but readiness and willingness can be culled out from reading all the averments made by the plaintiff as a whole coupled with the materials brought on record at the trial of the suit, to the said effect, the statutory requirement of Section 16 (c) of the Specific Relief Act may be held to have been complied with."
"28. Having regard to the facts and circumstances of the case and keeping in view the decisions of this Court, as referred to hereinbefore, we are of the opinion that the plaintiff cannot be said to have even substantially complied with the requirements of law."
In view of the above observations of the Supreme Court, and in view of the facts of the present case it has to be observed that except making a plea in the plaint, the appellant has utterly failed to prove his readiness and willingness and that he has also not deposited at least the first installment of Rs. 32.00 lakhs as agreed to be paid by the end of June 1994 even at the time of filing of the suit to seek the discretionary relief of Specific Performance, though he deposited an amount of Rs. 32.00 lakhs only at the instance of the orders of the Court which cannot be taken as a material by the Court below to come to a conclusion that the plaintiff-respondent was always ready and willing to perform his part of the contract and the said findings of the Court below is contrary to the observations made by the Apex Court in the above referred decision. Further, even in the absence of any material on record at the trial of the suit, in addition to oral evidence, to prove that vendee was always ready and willing to perform, merely the payment of Rs 32.00 lakhs will not enure to the benefit of the plaintiff to seek the discretionary relief under Section 16 (C) of the Specific Relief Act.
25. Further, on the aspect that whether the time was the essence of the contract, it is to be observed that even agreeing the contention of the Counsel for the respondent that time was not the essence of the contract but still the obligation is on the part of the respondent in performing his part of the contract by paying the amount of Rs 32.00 lakhs to make it obligation on the part of the vendor to execute the power of attorney. In the absence of any specific term in the contract that it is simultaneous as contended by the learned Counsel for the respondent, it has to be construed that the performance of contract is not simultaneous. Further, the Apex Court in K.S. Vidyanadam v. Vairavan, (1997)3 SCC 36 held :
' Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property.' Further a Constitution Bench of the Apex Court in Chand Rani v. Kamal Rani held that "in case of sale of immovable property there is no presumption as to time being of the essence of the contract. Even if it is not of the essence of contract, the court may infer that it is to be performed in a reasonable time if the conditions are (i) from the express terms of the contract; (ii) from the nature of the property; and (iii) from the surrounding circumstances."
26. From the above material, it has to be observed that though there is no express term in the agreement, the conditions stipulated for payment would go to show that the time is the essence of the contract and the plaintiffs failed to comply with the condition by paying or depositing the first installment within the stipulated time.
27. In respect of the findings of the Court below on the aspect of defective title basing on the ground that the suit schedule property is HUF consisting the defendant and his wife, no plea was raised in the pleadings nor any evidence was adduced on that aspect. Even the defendant did not take such plea in his written statement except stating in the reply notice. It is settled principle of law that without there being any pleading and evidence on any aspect, a finding on the same will not sustain in the eye of law. Hence, in view of the absence of any specific pleading and evidence, this aspect requires no consideration at this stage to give any finding.
28. Learned Counsel appearing on behalf of the respondent in support of his arguments placed reliance on the judgment of the Apex Court reported in Raghunath and Ors. v. Kedar Nadh , wherein the Apex Court dealt with the aspect of Section 49 of Indian Registration Act, 1908 whether applicable to documents Registerable under Section 54(2) of Transfer of Property Act, 1882. Secondly, the learned Counsel relied upon the judgment reported in B.P. Achala Anand v. S. Appi Reddy , wherein the Apex Court dealt with the aspects of Hindu Law regarding the rights of a divorced wife etc., Thirdly, learned counsel also relied upon a judgment reported in Raj Gopal(died) Lrs v. Kishan Gopal . In this case the Supreme Court held that in the absence of specific pleading, Courts are precluded from taking cognizance on mere evidence. In fact this decision is helpful to the case of the defendant in the light of the findings of the Court below in respect of title and nature of property as defective title. Thus, the citations relied upon by the learned Counsel for the respondent have no relevancy to the facts and circumstances of the present case and they are in no way helpful to the stand taken by the respondent herein.
29. Having regard to the facts and circumstances of the case and keeping in view the decisions of the Apex Court, as referred to hereinabove, we are of the opinion that the plaintiffs cannot be said to have even complied with the requirements of law and also the conditions in the agreement, they are not entitled to get any relief, particularly a discretionary relief of specific performance of agreement of sale. Hence, the appeal has to be allowed and the decree and judgment of the Court below is liable to be set aside. Further, since the plaintiffs could not succeed in getting the relief of specific performance of agreement of sale, they are entitled for refund of the amount paid towards the advance. Here, it is not out of place to mention that in view of the fact that the vendor did not give any notice, except the reply, forfeiting the advance or earnest money paid under the suit agreement, and also as there is no such clause in the agreement, the vendor is not entitled to forfeit the amount and is liable to repay the same to the vendee. So, as there is no dispute with regard to the payment of Rs. 18.00 lakhs between the parties, it is proper to give a direction to the appellant herein to return the said amount of Rs 18.00 lakhs to the respondents herein. With regard to award of interest, since there is no covenant in the agreement to that effect, we are inclined to grant interest at 12% pa., from 22-07-1994, the date of issuance of legal notice by plaintiffs, till the date of payment. Hence, we are inclined to direct the appellant herein that the above said payment shall be made within a period of three months from the date of this judgment.
30. The appeal is allowed. The judgment and decree under appeal cannot be sustained and accordingly, set aside. Consequently, the suit shall stand dismissed. However, the appellant/defendant is directed to return Rs.18.00 lakhs to the respondent herein with interest at 12% p.a., from 22-7-1994 till date of payment, within a period of three (3) months from the date of the judgment. We further make clear that since the amount of Rs 32.00 lakhs has been lying to the credit of the suit, the plaintiffs-respondent can withdraw the same. Both parties shall bear their own costs.