Madras High Court
Gowrammal Alias Gowri vs V. Pechimuthu on 29 January, 1996
Equivalent citations: (1996)2MLJ145
JUDGMENT S.S. Subramani, J.
1. This second appeal is by the defendant in O.S. No. 447 of 1979, on the file of Second Additional Subordinate Judge's Court, Coimbatore.
2. As per Ex.A-2, dated 2.5.1973, the respondent herein executed a sale deed in respect of the plaint schedule property in favour of the appellant herein. The sale was for a consideration of Rs. 20,000. It is seen that on the date of sale, the respondent herein was indebted to some persons and that necessitated the execution of the sale. A stranger has obtained a decree against the plaintiff/respondent, and there was an understanding between the plaintiff and the defendant that the appellant will discharge the debt which as on that day came to Rs. 15,005. There was also some other payment to be made. Out of the sale consideration of Rs. 20,000, Rs. 15,005 was earmarked for discharging the decree debt, and out of the balance, an amount of Rs. 2,500 was to be paid to one Palaniammal, for getting vacant possession of the premises, and it is said that the balance amount was agreed to be paid at the time of sale. It is averred by the plaintiff that the defendant did not pay the amount of Rs. 2,495 as promised, and the expenses for registration was also refused to be met by the defendant on the ground that the property will be reconveyed to the plaintiff. So the plaintiff had to execute a promissory note for a sum of Rs. 3,000, and on that basis, the defendant met the expenses for stamp and registration of the sale deed Ex.A-2. Subsequent to Ex.A-2, a registered agreement was entered into between the plaintiff and the defendant on 4.5.1993 as evidenced by Ex. A-3, that the property will be reconveyed to the plaintiff, on the plaintiff paying a sum of Rs. 20,000. An advance amount of Rs. 10 was also paid, and the balance of Rs. 19,990 was to be paid by the plaintiff as per agreement Ex.A-3. It is said that there was a time-limit for reconveyance, i.e., it is to be exercised on or before 3.4.1979. Before the expiry of the period, the plaintiff requested the defendant to execute the reconveyance, A reply was sent by the defendant stating that even though a sum of Rs. 15,005 was earmarked for discharging decree debt, he has to pay more and, therefore, the plaintiff was bound to pay the excess amount paid by the appellant/defendant, for getting sale. For the said reply, plaintiff retorted by saying that the defendant has not paid the consideration of Rs. 2,495 and the promissory note debt of Rs. 3,000. According to him, he is liable to pay only the balance amount of Rs. 19,990. He wanted to enforce Ex.A-3 agreement by passing a decree after ascertaining the amount payable to the defendant, appellant herein.
3. The defendant filed a written statement stating that he has discharged the debt as promised, but by the time the payment could be made, the amount reserved under the sale deed was not sufficient and that in total, he has paid a sum of Rs. 30,648. He also said that the plaintiff and cancelled or waived his right for getting reconveyance in view of the excess amount paid. He also said that the entire amount as stated in the sale deed Ex.A-2 was paid to the plaintiff and the allegation that the appellant did not pay a sum of Rs. 2,495 is not correct.
4. On the above pleadings, issues were raised and the parties went on trial. On the side of the plaintiff Exs.A-1 to A-9 were marked and he got himself examined as P.W.1 and one more witness was also examined on his side as P.W.2. On the side of the appellant/defendant, Exs.B-1 to B-4 were marked and she got herself examined as D.W.1 and two more witnesses were also examined on her side.
5. The trial court, after taking into consideration the evidence, both oral and documentary, came to the conclusion that the defendant has paid the entire amount, payable to the plaintiff, after adjusting the amount of Rs. 15,005. It also came to the conclusion that the defendant has paid some amount in excess than what was agreed to be paid between the parties. But that will not disentitle the plaintiff from getting reconveyance. It also found that the contention of the appellant (defendant) that the plaintiff has waived his right to get reconveyance is not true. On the basis of the above findings, trial court came to the conclusion that for getting re-conveyance, plaintiff has to pay a sum of Rs. 23,448.75 and not Rs. 20,000, as evidenced by Ex.A-3.
6. Both the parties were not satisfied with the decree, and they went on appeal. A.S. No. 233 of 1981 was filed by the plaintiff, respondent herein, and A.S. No. 62 of 1982 was filed by the defendant, appellant herein. Both the appeals were clubbed together, and a common judgment was pronounced by the lower appellate court on 31.8.1982. The lower appellate court came to the conclusion that both parties were bound by Ex.A-3 agreement, and the plaintiff need pay only Rs. 20,000, for getting re-purchase. In the result, the appeal filed by the appellant herein was dismissed, and the appeal filed by the plaintiff (respondent herein) was partly allowed. It is against the said judgment, the defendant has preferred this second appeal.
7. At the time of admission of this second appeal, the following substantial of law has been framed:
Whether on the facts and in the circumstances of the case, the decree for specific performance is sustainable.
8. Both the courts below have held that the plaintiff is entitled to get reconveyance. The plaintiff has not preferred any Appeal against that finding whereby he was to make certain adjustments in the amount payable or agreed to be paid under Ex.A-3. In the memorandum of appeal, the appellant herein has contended that the plaintiff is not entitled to get specific performance. According to the learned Counsel, an agreement for reconveyance is a privilege conferred on the original vendor and it is only a concession. If it is only a concession, the plaintiff must go to court expressing his willingness to abide by the terms thereof and if the conduct of the plaintiff shows that the intention of the plaintiff was not to implement Ex.A-3 as it is, specific performance cannot be had. According to me, the said contention of the appellant is well-founded.
On the basis of the available evidence, I feel that the plaintiff was not willing to take the property in terms of Ex.A-3.1 arrive at this conclusion for following reasons.
9. In Shanmugam Pillai v. Annalakshmi Ammal A.I.R. 1950 F.C. 38, the majority Judges have ruled that an agreement to re-purchase is only in the nature of a concession or privilege, and if those conditions have not been fulfilled in terms of the contract, the right to purchase is lost. The relevant portion of the said decision reads thus:
...the agreement reserved an option to A to repurchase the property and was in the nature of a concession or privilege on fulfilment of certain conditions with a proviso that in case of default the stipulation should be void. A not having paid the instalment punctually according to the terms of the contract the right to repurchase was lost and could not be specifically enforced. It was not in the nature of penalty and the court had no power to afford relief against forfeiture for its breach The said decision was followed in K. Simrathmull v. Nanjalingiah Gowder . In that case, the plaintiff borrowed certain amount from the defendant who executed the conveyance deed. On the same date, another reconveyance deed was also executed. In the agreement of reconveyance, it was said that the defendant will reconvey the house on certain conditions. That is, the right must be exercised within two years and the rent payable by the plaintiff should not be in arrears for more than six months. When the defendant refused to re-convey, suit for specific performance was filed by the plaintiff. It was contended before the court that he should not be compelled to give the arrears of rent in default by him in paying the rent, that would result in the forfeiture of his right to get specific performance. It was held in that case that the sale deed, reconveyance and the rent note were all parts of the same transaction, and refusal to pay the rent and the failure to abide by the conditions did not amount to enforcement of penalty, and the court has no power to afford relief against forfeiture arising as a result of breach of its conditions. Their Lordships thereafter went on to hold thus:
Where under a contract, conveyance, or will a beneficial right is to arise upon the performance by the beneficiary of some act in a stated manner, or at a stated time, the act must be performed accordingly in order to obtain the enjoyment of the right, and in the absence of fraud, accident or surprise, equity will not relieve against a breach of the terms." The Federal Court in Shanmugam Pillai v. Annalakshmi Ammal. A.I.R. 1950 F.C. 38, held by a majority of three to two that where under an agreement an option to a vendor is reserved for repurchasing the property sold by him the option is in the nature of a concession or privilege and may be exercised on strict fulfilment of the conditions on the fulfilment of which it is made exercisable. If the original vendor fails to act punctually according to the terms of the contract, the right to repurchase will be lost and cannot be specifically enforced. Refusal to enforce the terms specifically for failure to abide by the conditions does not amount to enforcement of a penalty and the court has no power to power to afford relief against the forfeiture arising as a result of breach of such a condition....
10. In Hasam Nurani Malak v. Mohansingh and Anr. , a similar question came for consideration, before a Division Bench. Chandurkar, J., as he then was, (speaking for the Bench), held that the plaintiff who wants to enforce an agreement of re-purchase, must act according to the terms of the contract and not otherwise. In paragraph 7 of the judgment, it was held thus:
In Caltex Limited v. Bhagwan Devi , the Supreme Court, referring to the decision of the Privy Council, in 43 I.A. 26 : A.I.R. 1915 P.C. 83, has observed:
In his well considered judgment Viscount Haldane carefully refrained from saying that time was not to be regarded as of the essence in all contracts relating to land.
In that case the Supreme Court was dealing with the case of a renewal of a lease. The time within which the notice of renewal of the lease was to be given was fixed by the terms of the lease deed and it was held that time fixed was of the essence of the bargain and the tenant lost his right unless he made the application within the stipulated time. The following observations from Halsbury's Laws of England, 3rd Edn., Vol.3, Article 281, page 165: were quoted with approval;
An option for the renewal of a lease or for the purchase or re-purchase of property must in all cases be exercised strictly within the time limited for the purpose, otherwise it will lapse.
[Underlining as in the original text] It is settled law that in the case of agreement of repurchase the condition of repurchase must be construed strictly against the original vendor and the stipulation with regard to time of performance of the agreement must be strictly complied with as time must be treated as being of the essence of the contract in the case of an agreement of reconveyance. If the original vendor fails to act according to the terms of the contract, the right to repurchase is lost and cannot be specifically enforced. The plaintiffs were, therefore, bound to have the reconveyance made within the stipulated time as time was of the essence of the contract.
11. On the above principles of law, let us see whether the plaintiff is entitled to get specific performance of the agreement. Even though in Ex. A-3 it is stated that before getting the sale deed, he has to pay or tender a sum of Rs. 19,990, it is not that contract, which he wanted to enforce. In the suit, he put forward a contention that he was not paid the entire amount as stated in Ex.A-2, and he wanted to get adjustment of some amount which he said that the defendant has not paid. Both the courts below have held against the plaintiff. It is now found that the defendant has paid the entire amount. A reading of the plaint will show that what the plaintiff wanted is not the performance of Ex.A-3 agreement, but the performance of a contract as the plaintiff understood it or wants this Court to understand. In Hasam Nurani Malak v. Mohansingh , their Lordships were following the decision reported in Ardeshir v. Flora Sassoon 55 M.L.J. 528 : A.I.R. 1928 P.C. 208 : 11 I.C. 413 : L.R. 55 I.A. 360, wherein it was stated that in a case where the plaintiff claims specific performance of a contract of sale he must allege, and if the fact was traversed, he is required to prove a continuous readiness and willingness from the date of the contract to the time of the hearing, to perform the contract on his part and the failure to make good that averment brings with it, inevitable dismissal of the suit. The readiness and willingness to perform the contract must be with reference to the true nature of the contract found between the parties and not readiness and willingness to perform the contract as the plaintiff understood it to be. Their Lordships further discussed the evidence in that case and came to the conclusion that the plaintiff therein wanted to get a settlement of the accounts of the defendant and had expressed their readiness only to pay the balance amount. Therefore, the court held that in view of the said conduct on the part of the plaintiff, the plaintiff was not entitled to get specific performance.
12. A similar question came for consideration by this Court in S. Sankaran v. N.G. Radhakrishnan (1994) 2 L.W. 642 and it was held thus:
Section 16 of the Specific Relief Act, 1963 mandates that in a suit for specific performance, the plaintiff has to allege his readiness and willingness from the date of agreement to the date of sale and he must also prove the same. The agreement for which readiness and willingness is pleaded must be the agreement that is sought to he implemented and in terms thereof. When the plaintiff wants an implementation of contract, not according to the terms contained therein, but with modification he deemed proper, and even in the plaint, willingness disclosed was not a willingness to deposit the full balance amount but such balance as remained after making such deductions, he cannot claim to have always been ready and willing to perform his part of the contract.
In this case the plaintiff has not expressed in the plaint, that he wanted specific performance "in terms" thereof. In fact, what the plaintiff wants is a settlement of accounts in a suit for specific performance and we do not find any averment in the plaint expressing his willingness to perform the contract in terms of Ex.A-12. What he wants is a decree for specific performance with variation when it is admitted that Ex.A-12 is not varied by any subsequent contract. The plaintiff wants specific performance on his own terms which goes against Ex.A-12. That also is an added reason to say that the plaintiff is not entitled to get specific performance of Ex.A-12.
[Underscoring as in the original reports]
13. I have already extracted the facts and even in evidence, plaintiff has said that he wanted to adjust these amounts and in the last sentence of the examination of his evidence, he has said that he wanted to adjust a sum of Rs. 2,495 from the amount mentioned in Ex.A-3. From the above pleadings and evidence, it is clear that the plaintiff did not want enforcement of the contract in terms of Ex.A-3.
14. There is one more reason why the plaintiff should not be granted the relief of specific performance. That is, the plaintiff has come to court with a statement that he has not received any amount under Ex.A-2, and that is why he is claiming adjustment or set-off. When the courts below have said that such an allegation is false, discretionary remedy under the Specific Relief Act should not be exercised in his favour.
15. In Komisetti Venkatasubbarayya v. Karamsetti Venkateswarulu , a learned Judge of that High Court has followed the decision of the Supreme Court in Civil Appeal No. 1076 (N) of 1966 (SC) arising from an appeal against the decision of the Andhra Pradesh High Court reported in Buchiraju v. Sri Rama Satyanarayana A.I.R. 1967 A.P. 69, wherein it was held thus:
The plaintiffs had set up a false case that they had offered on June 4, 1953 to the first defendant the balance of the purchase price due, and they sought to support that case by leading evidence which was to their knowledge false. It is true that the trial court and District Court have held that after June 4, 1953 the plaintiffs were ready and willing to perform their part of the contract and under the terms of the agreement of sale, time was not of the essence, but having regard to their conduct the plaintiffs were not entitled to a decree for specific performance. The question whether in the circumstances of the case the claim of the plaintiff for specific performance may be decreed being within the discretion of the trial court and the District Court the High Court could not interfere with the exercise of that discretion unless the order was shown to be arbitrary or patently erroneous in law... the exercise of discretion (by the trial court and District Court) against the claim made by the plaintiffs was not arbitrary but was reasonable and guided by judicial principles. The High Court could not, sitting in second appeal, interfere with the exercise of jurisdiction merely because the District Court refused relief of specific performance also on the ground of delay.
Thereafter, the learned Judge held thus:
In this case, the lower appellate court has refused to exercise the discretion in favour of the plaintiff who had set up false plea of payment of a minor portion of the purchase money. The plaintiff, in my view, was not only disentitled to the discretionary relief on the ground that he has set up a false plea but also on this ground that discloses that he was not ready and willing to perform his part of the contract.
[Italics supplied]
16. On going through the evidence in this case, it is clear that the plaintiff has not come to court with clean hands. Being a concession given to the plaintiff as per Ex.A-3, he ought to have come to court to implement Ex.A-3 as it is, which he has failed to do. His right to get reconveyance is, therefore, found against.
17. In the result, the substantial question of law is found in favour of the appellant. The second appeal is allowed, but, however, with no order as to costs. The concurrent findings of the courts below are set aside, and the suit is dismissed.