Andhra HC (Pre-Telangana)
Chunduru Padmavathi vs Chunduru Narasimha Rao on 20 December, 1999
Equivalent citations: 2000(2)ALD106, 2000(1)ALT613
JUDGMENT
1. The defendant is the appellant. The parties are closely related to each other. The defendant/appellant is the widowed daughter-in-law of the respondent/ plaintiff. The respondent filed the suit for specific performance of an agreement of sale dated 14-8-1979 executed by the appellant agreeing to sell the suit schedule property, which consists of Ac.1-00 of wet land in Garikapadu village, for a total sate consideration of Rs.5,750-00. On the date of agreement, a sum of Rs.200-00 was paid by the respondent to the appellant as advance. As per the terms of the agreement the balance of sale consideration is payable within one month from the date of the agreement, at the time of registration of the sale deed, and the appellant has to deliver the possession of the land along with the standing crop at the time of registration. On 27-8-1979 the respondent issued Ex.A2 notice stating that he was ready and willing to perform his part of the agreement and further stating that it was learnt by him that the appellant was in arrears of revenue taxes and also a Land Mortgage Bank loan and called upon the appellant to clear of all her dues and execute a registered sale-deed in his favour within 10 days. On 11-9-1979 the appellant sent a reply (Ex.A3) through her Counsel stating that the sale consideration agreed to was actually Rs.7500-00 but the agreement dated 14-8-1979 was obtained by the respondent by exercising undue influence, coercion and mis-representation taking advantage of her weak position. She denied that there was any Land Mortgage Bank loan or any other encumbrance on the property. She also denied that there were any arrears of land revenue due from her. She, however, stated that if really there are any such arrears of land revenue payable in respect of the land, the respondent may deduct the same from the sale consideration payable by him and pay the balance to her and obtain the sale deed within 10 days from the date of receipt of her reply. On 22-10-1979 the appellant, however, sent a further notice through her Counsel to the respondent (Ex.B1) stating that on thorough consideration and on the advice of well wishers she is voluntarily giving up her contention made in her reply notice dated 11-9-1979 with respect to the amount of consideration mentioned in the contract of sale dated 14-8-1979 and that she is ready and willing to execute a registered sale deed provided the respondent pays the balance of sale consideration of Rs.5,500-00 after deducting the advance of Rs.200-00 paid by him on the date of agreement. She reiterated that there is no encumbrance or mortgage in favour of the Land Mortgage Bank. She further stated in the said notice that the respondent is at liberty to ascertain the land revenue dues and he can deduct the same from out of the balance of sale consideration payable to her. She also stated that if the respondent is still in doubts about the title and encumbrance on the land he is at liberty to obtain encumbrance certificate. She undertook to deliver the land along with the standing crop on the date of registration. She finally stated in the said notice that she honestly and sincerely believes that the respondent is not having sufficient funds to pay the balance of sale consideration and requested the respondent to purchase the stamps and take the sale deed and get it registered after paying the balance of sale consideration within a week after receipt of the sale notice, failing which she will be obliged to file a suit for specific performance of contract. It is the case of the respondent that after the receipt of Ex.Bl notice he purchased the stamps worth Rs.400-00 and he has been always ready and willing to perform his part of the agreement but the appellant though pretending to be ready was not willing to execute the sale deed in his favour. Hence he filed the suit on 24-12-1981 i.e., after the lapse of more than two years.
2. In the written statement filed by her, the appellant resisted the suit contending that taking advantage of her weak position the respondent obtained the agreement of sale by undue influence, coercion and misrepresentation, but however, at the instance of the elders she agreed to abide by the contract. She, therefore, took initiative and issued the notice dated 22-10-1979 calling upon the respondent to pay the balance of sale consideration and obtain the registered sale deed but the respondent was not ready and willing to perform his part of the contract and committed breach. The contract therefore stood cancelled and the respondent is not entitled to the relief of specific performance.
3. On the above pleadings, the trial Court settled the following issues for trial:
(1) Whether the plaintiff is entitled to the specific performance of contract?
(2) Whether the plaintiff has cause of action to file the suit?
(3) To what relief?
4. To substantiate their respective contentions, the respondent/plaintiff got examined himself as PW1 and marked Exs.A1 to A4; whereas the appellant/ defendant got examined herself as DW1 and marked Exs.Bl to B3. The trial Court on a consideration of the oral and documentary evidence decreed the suit holding that the plaintiff is entitled to specific performance of the contract and he has got cause of action to file the suit. On the appeal filed by the defendant the lower appellate Court framed only one point for consideration, namely, whether the judgment and decree of the trial Court are liable to be set aside as contended by the appellant. The lower appellate Court confirming the findings given by the trial Court on issues 1 and 2 confirmed the decree of the trial Court.
5. This second appeal initially came up for hearing before my learned brother Hon'ble Justice A. Hantimanthu who, after hearing the learned Counsel for both parties, framed the following questions:
(1) Whether the time is essence of contract?
(2) Whether the plaintiff or the defendant that has committed breach of contract?
and called for a finding on the said questions from the lower appellate Court by an order dated 28-7-1999. Pursuant to the said order, the lower appellate Court after hearing both parties submitted its finding on 23-11-1999 holding that the time is not essence of the contract and that it is the defendant who has committed the breach of contract. A memo of objections has been filed on behalf of the defendant/appellant canvassing the correctness of the said findings.
6. Sri S. Sathyanarayana Prasad, learned Counsel for the appellant has assailed the findings recorded by both the Courts below by contending that the whole approach of the Courts below was wrong as they focussed their attention on the plea of undue influence, coercion and mis-representation, which was given up by the appellant, and failed to concentrate on the real questions in controversy and as such the findings are totally vitiated. He submitted that the time was of the essence of the contract and the agreement stood cancelled on account of the default committed by the respondent/ plaintiff. He further submitted that in any case the plaintiff is dis-entitled for specific performance as he miserably failed to establish his readiness and willingness to perform his part of the contract at all material times and on account of the great delay in filing the suit. On the other hand, Sri P.V.R. Sharma, learned Counsel for the respondent has contended that the time was not of the essence of the contract, that the plaintiff was throughout ready and willing to perform his part of the contract as borne out by the fact that within 10 days of the agreement, he issued the notice Ex.A2 expressing his readiness and willingness and he purchased the stamps necessary for obtaining the sale deed on 26-10-1979 itself i.e., within three days of receiving the notice Ex.B1 as evidenced by Ex.A4, and he also deposited the balance of sale consideration into Court immediately after filing the suit. He further contended that the appellant did not issue any notice avoiding or cancelling the contract, on the other hand, both the parties proceeded on the footing that the contract was still subsisting and that it was only the appellant who committed breach. He further submitted that mere delay in filing the suit within the period of limitation is not a valid ground for refusal of specific performance. He finally submitted that the concurrent findings of fact recorded by the two Courts below are not amenable for interference in the second appeal.
7. It is well settled that in case of contracts relating to the sale of immoveable property, generally time is not regarded as the essence of the contract. It is, however, open to the parties to make time the essence of the contract by making express provisions in that behalf in the contract. It can also be inferred from the surrounding facts and circumstances of the case. Even though time was not originally made the essence of the contract, by a subsequent notice it can be made the essence of the contract. In Chandi Rani v. Kamal Rani, , a Constitution Bench of the Supreme Court held that 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, nature of the property and the object of making the contract. This principle was reiterated in the recent decision of the Supreme Court in K.S. Vidyanadam v. Vairavan, 1997 (2) Supreme 597, where the Apex Court, in keeping with the changing times, has made a bold departure from the traditional rule that time is not of the essence of the contract in the case of immoveable properties in the following words:
"Indeed we are inclined to think that the rigour of the rule evolved by Courts that time is not of the essence of the contract in the case of immoveable properties --evolved in times when prices and values were stable and inflation was unknown-requires to be relaxed if not modified, particularly in the case of urban immoveable properties. It is high time we do so."
8. There is no reason why the said observations should not be made applicable with equal force to agricultural lands also whose values are constantly rising and the Court can certainly take judicial notice of this fact. In the instant case the parties are closely related to each other and the contract was entered into pursuant to the settlement arrived at between the parties in some prior litigation. The property agreed to be sold is a wet land in Krishna District where the lands are very fertile and valuable. The time stipulated in the contract for performance was one month from the date of the agreement, Even though initially the defendant took the stand that the sale consideration agreed to was Rs.7,500-00 but not Rs.5,750-00 as recited in the agreement and that the agreement was obtained by undue influence, coercion and misrepresentation taking advantage of her weak position, she specifically gave up those contentions and issued notice Ex.Bl dated 22-10-1979 expressing her readiness and willingness to execute the sale deed on receipt of the balance of sale consideration of Rs.5,500-00 and called upon the plaintiff to pay the balance of sale consideration and take the sale deed within one week from the date of receipt of the notice. To this notice there was no reply from the plaintiff. Though it is stated that the plaintiff purchased the stamps worth Rs.400-00 on 26-10-1979, there is absolutely nothing on record to show that he made any attempt to pay the balance of sale consideration to the defendant or call upon her to execute and register the sale-deed. There was total inaction and silence on the part of the plaintiff for more than two years and he ultimately filed the suit only on 24-12-1981. There is no explanation whatsoever for this long delay. From the above facts, I am inclined to hold that time was of the essence of the contract. Even if the time was not of the essence of the contract originally, it was made so by the notice Ex.B1. The question whether time was of the essence of the contract is a question of law being a legal inference to be derived from the facts. (See Sreeram Cotton Pressing Company v. Narayanaswamy, .) I am," therefore, satisfied that the Courts below have committed error of law in concluding that time was not of the essence of the contract.
9. Even otherwise, I am of the view that the plaintiff is not entitled to a decree for specific performance as he failed to perform his part of the contract within a reasonable time and there was undue delay in filing the suit. It was, no doubt, held by the Supreme Court in Satyanarayana v. Yelloji Rao, , that mere delay in filing the suit within the period of limitation prescribed under Article 113 of the Limitation Act, without more, cannot possibly be a ground for refusing the relief of specific performance. But in view of the later judgment of the Constitution Bench in Chandi Rani v. Kamal Rani, (supra) and the latest judgment of the Supreme Court in K.S. Vidyanadam v. Vairavan, (supra), it must be held that the plaintiff in this case is not entitled for specific performance. The following observations made in K.S. Vidyanadam v. Vairavan, (supra), are apposite:
"It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the timc-1imit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the Court by both Sections 10 and 20..... All this only means that while exercising its discretion, the Court should also bear in mind that when the parties prescribed certain time limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that the time has not been made the essence of the contract..... We may reiterate that the true principle is the one stated by the Constitution Bench in Chandi Rani's case. Even where time limit 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."
10. Following the above judgment of the Supreme Court, a Division Bench of this Court in Sardar Amarjeet Singh v. Nandu Bai, (DB), in some what similar circumstances as in present case, held that the plaintiff in that case, who was sitting quiet without taking any steps to perform his part of the contract and filed the suit after 2 1/2 years without any satisfactory explanation for such delay was disentitled for the relief of specific performance.
11. As already noticed above, in the instant case, the time originally fixed in the contract for performance was one month. By the subsequent notice Ex. B1, the defendant called upon the plaintiff to complete the transaction within one week from the date of the notice. Out of the total sale consideration of Rs.5,750-00, the plaintiff paid only a meagre sum of Rs.200-00 as advance on the date of the agreement. He did not pay the balance of sale consideration despite the notice Ex.B1. He filed the suit after the lapse of more than two years. During this period, there would have been a substantial increase in the value of the suit property. On these facts I am clearly satisfied that there are no equities whatsoever in favour of the plaintiff and it will be inequitable to grant the relief of specific performance to the plaintiff.
12. Even on the second question I am satisfied that the Courts below have erred in holding that it is the defendant who committed breach of the contract. In a suit for specific performance, the plaintiff has not only to aver but also prove his readiness and willingness to perform his part of the contract continuously at all material times. In N.P. Thirugnanam (D) by L.Rs., v. Dr. R. Jagan Mohan Rao and others, , the Supreme Court observed as follows:
"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 execution till the date of decree, he must prove that he is ready and has always been willing to perform his part of the contract. 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 attendant circumstances."
Except a bald assertion in the plaint that the plaintiff has been all the while ready and willing to perform his part of the agreement and has been demanding the defendant to execute the registered sale deed as per the terms of the agreement but the defendant though pretends to be ready is not willing to execute the registered sale-deed, nothing more is brought on record to satisfy the Court that the plaintiff is ready with the balance of sale consideration. If really the plaintiff was ready with the balance of sale consideration and the defendant was dodging, one would have expected the plaintiff to issue a notice to the defendant in reply to Ex.B1 intimating his readiness with the balance of sale consideration and calling upon the defendant to execute and register the sale deed. But he did nothing of the kind. His evidence also does not inspire much confidence in this behalf. He stated that his sons purchased the stamp for execution of Ex.A1. He further stated that he will be keeping stamps with him and that he and his sons wanted to write an agreement for partition and that his sons might have purchased the stamps. It is, therefore, doubtful whether the stamps allegedly purchased by him under Ex.A4 are really meant for obtaining the sale deed from the defendant or they were intended for some other purpose. At one stage he stated that he has Ac.1-00 of wet land and Acs.0-25 cents of dry land. He, however, admitted that the said lands belong to his wife and he has no land. He further admitted that since five or six years, he was not doing any work and that he has no bank account. He again stated that by the date of Ex.A2 the amount was in deposit in Andhra Bank at Tsundur. But no documentary evidence is produced to substantiate the same. Merely because he purchased some stamps and subsequently deposited the balance of sale consideration into Court after he filed the suit, it cannot be said that the plaintiff has proved his readiness and willingness continuously. Though the question of readiness and willingness is a question of fact, the Courts below failed to examine the said question in the proper perspective and failed to draw the proper inferences from the proved facts and as such I am satisfied that the findings arc vitiated and they are also perverse. It is, no doubt, true that in view of Explanation to Section 16(c) of the Specific Relief Act, 1963, it is not necessary for the plaintiff to deposit the amount into Court in order to prove his readiness and willingness to perform the contract. But in case the plaintiff's capacity is disputed and more so, in a case like this where the defendant issued a notice Ex.B1, specifically stating that the plaintiff is not in a position to pay the balance of sale consideration and called upon him to complete the transaction within one week, it was incumbent upon the plaintiff to satisfy the Court by reliable evidence about his capacity and means to pay the amount and establish his readiness and willingness to perform his part of the contract. The two decisions cited by the learned Counsel for the plaintiff, namely, S. Indira v. N. Venkatramana, (DB) and Rajaratan Gopal Sainchar v. Rajendra Prasad, (DB), in this behalf are easily distinguishable on facts. In both those cases the plaintiffs were found to be possessing ample resources to pay the balance of sale consideration and there was also no demand by the vendor on the vendee to perform his part of the contract or to deposit the money in Court. Those judgments cannot, therefore, render any assistance to the plaintiff in the present case.
13. For all the aforesaid reasons, the second appeal is allowed. The judgment under appeal is set aside and the suit is dismissed with costs throughout.