Punjab-Haryana High Court
(O&M;) Narender Yadav vs Sultan Akbar Khan on 17 December, 2014
IN THE HIGH COURT OF JUDICATURE FOR THE STATES OF
PUNJAB AND HARYANA, AT CHANDIGARH
Regular Second Appeal No. 4395 of 2010
Date of Decision: December 17, 2014
Narender Yadav ....Appellant
Versus
Sultan Akbar Khan (Dead) by LRs ....Respondent
CORAM: HON'BLE MR. JUSTICE MAHAVIR S. CHAUHAN.
Present: Mr. Santosh Sharma, Advocate, for the appellant.
Mr. Sumeet Mahajan, Senior Advocate with Mr. Amit Kohar,
Advocate for the respondent.
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1. Whether Reporters of local papers may be allowed to see the
judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
---
Mahavir S. Chauhan, J.
Plaintiff Narender Yadav (here-in-after feferred to as 'the appellant') is in regular second appeal to challenge judgemnt/decree dated July 21, 2010 of the Court of learned Additional District Judge, Rewari (here-in-after referred to as 'the first appellate court') affirming judgment and decree dated April 22, 2009 of the Court of learned Additional Civil Judge (Senior Division), Rewari (here-in-after referred to as 'the trial court') dismissing appellant's civil suit for possession of property forming part of Khewat No. 20, Khatoni No. 40, Rectangle No. 32, Killa No. 18/2min, as fully described in the heading of the plaint (here-in-after referred to as 'the suit property') by specific performance of agreement of sale dated November 29, 2004 (Exhibit P7) executed by defendant Sultan Akabar Khan (here-in-after referred to as 'the respondent'). VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh Appellant's plea in the plaint:
2. As per case pleaded by the appellant, the respondent, claiming himself to be owner of the suit property, executed an agreement to sell (Exhibit P7) on November 29, 2004 for a consideration of Rs. 24,00,000/-
only; received from the appellant an amount of 2,35,000/-only, by way of a cheque, as earnest money; agreed to execute the necessary sale deed on or before March 31, 2005; but did not come present for execution of the sale deed inspite of repeated requests made, and a legal notice (Exhibit P2) sent, by the appellant whereas the appellant remained present in the office of Sub Registrar, Dharuhera and got his presence marked on March 31, 2005 by getting his affidavit (Exhibit P8) attested.
Respondent's defence in the written statement:
3. In the written statement, besides pleading preliminary objections regarding maintainability of the suit, locus standi of the appellant, concealment of facts by the appellant and plea of estoppel, respondent revealed that he was owner of the land measuring 4 Kanals I Marla, bearing Khewat No. 248/204, Khatoni No. 275min Rectangle No. 32, Killa No. 18/2/1(013), 23/1(3-8) as per Jamabandi for the year 1998-99 but not of the two-storey building which was erected thereon by H.S. Grewal and was presently owned by Jaiwant Singh Chandel; he had agreed to sell the land only and with regard to the building he had told the appellant that he (the respondent) would talk to its owner, Jaiwant Singh Chandel; the appellant was not ready and willing to perform his part of the agreement as he did not possess sufficient money to pay the balance sale consideration and to meet the expenses of execution and registration of the sale deed which were agreed to be borne by him; while he (the respondent) remained present in VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh the office of Sub Registrar, Dharuhera on the day appointed for execution and registration of the sale deed but the appellant did not come present there during the working hours of the office; he did receive notice dated March 23, 2005; and he had sent to appellant's counsel a cheque for Rs.2,35,000/-
only to return the earnest money on March 31, 2005. All other averments made in the plaint were denied.
Replication:
4. Appellant filed a replication to deny all what was said in the written statement and to re-assert his plea as put up in the plaint.
Proceedings before the trial Court:
5. In view of the diagonally opposing stands put forth by the parties, learned trial court entered into an inquisition into the controversy and to facilitate such an inquisition identified from the pleadings of the parties areas of discord in the form of following issues:
1. Whether the defendant entered into an agreement to sell the property mentioned in para No. 1 of the plaint in favour of the plaintiff for a sale consideration of Rs. 24 lacs on 29.11.2004?
OPP
2. Whether the plaintiff is still ready and willing to perform the part of his contract? OPP
3. Whether the plaintiff is entitled for possession of the suit land by way of specific performance of agreement to sell in question? OPP
4. Whether the suit is not maintainable? OPD
5. Whether the plaintiff has no cause of action to file the present suit? OPD
6. Whether the plaintiff has concealed the material facts from the Court? OPD
7. Relief.
VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh
6. Both the sides adduced evidence in support of their respective pleas.
Suit & Appeal dismissed:
7. After hearing learned counsel for the parties and on appraisal of the evidence, learned trial Court returned findings on issue No. 1 propitious to appellant's plea, on issue Nos. 4 & 5 hostile to the plea put up by the respondent and disposed of issue Nos. 2 & 3 by holding that the appellant was not entitled to possession of the suit property but was entitled to receive from the respondent the amount of Rs. 2,35,000/- only with interest @6% per annum from March 31, 2005 till the date of its payment/realization and decreed, with costs, appellant's suit in part for recovery of Rs. 2,35,000/- only with interest @6% per annum from March 31, 2005 till the date of its payment/realization, vide judgment/decree dated April 22, 2009.
8. To assail the findings recorded by the learned trial Court, appellant preferred an appeal which, after contest, was dismissed by the learned first appellate Court vide judgment/decree dated July 21, 2010 which is under challenge in the instant regular second appeal.
9. I have heard Mr. Santosh Sharma, Advocate, for the appellant and Mr. Sumeet Mahajan, Senior Advocate with Mr. Amit Kohar, Advocate for the respondent, besides perusing the record. In criticism of the judgments/decrees of the Courts below:
10. Learned counsel for the appellant has very ably argued that evidence available on record is sufficient to prove that the appellant has always been ready and willing to perform his part of the agreement. To support this contention learned counsel has taken me through appellant's chief examination, Exhibit PW7/A, wherein he has very emphatically stated that he has always been, and was still ready and willing, to perform his part VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh of the agreement and on the appointed day, i.e. March 31, 2005, remained present in the office of Sub Registrar, Dharuhera having sufficient money to pay the balance amount of consideration and meet the expenditure of execution and registration of sale deed, but the respondent did not turn up inspite of repeated requests and service of notice dated March 23, 2005 (copy Exhibit P2) (which was sent vide postal receipts Exhibits P3 and P4 and was duly served upon the respondent vide acknowledgment, Exhibit P5) calling upon the respondent to come present in the office of Sub Registrar, Dharuhera on March 31, 2005 for the purpose of execution and registration of the necessary sale deed, as is evident from his affidavit, Exhibit P8, attested by the Sub Registrar, Dharuhera in his capacity as an Executive Magistrate, and copy of relevant page of scribe's register, Exhibit P9. Learned counsel also refers to D'Souza versus Shondrilo Naidu, 2004(3) RCR(Civil) 668 and N.P. Thirugnanam (Dead) by LRs versus Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115 to contend that in view of continuous readiness and willingness of the appellant to perform his part of the agreement, a decree of specific performance should be granted.
11. Learned counsel for the appellant submits that Section 54 of The Transfer of property Act, 1882 (here-in-after referred to as, 'the 1882 Act') defining "sale "as transfer of ownership of immoveable property, Section 8 of the 1882 Act defining transfer of property as passing on to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof, and sub-section (26) of Section 3 of The General Clauses Act, 1897 (here-in-after referred to as 'the 1897 Act') defining immoveable property as including "land, benefits to arise out of land, and things attached to the earth, or permanently fastened to VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh anything attached to the earth" have been totally ignored by the Courts below while holding that the building erected upon the land in question does not form part of the agreement of sale. To buttress this contention learned counsel refers to Suresh Chand versus Kundan (Dead) by L.Rs. and others, 2003(2) RCR(Civil) 647, Jai Narain Parasrampuria (Dead) & Ors. Versus Pushpa Devi Saraf & Ors., 2007(1) Civil Court Cases 121 (SC), and Kodiyan and others versus Karambi, 2007(5) RCR(Civil) 124.
12. Ad finem, appellant's learned counsel submits that though it has remained unproved that Jaiwant Singh Chandel has any right to or interest in the building erected on the land in question, yet were it so, a decree of specific performance to the extent of respondent's share therein could and should be passed as has been held in Kapoor Singh versus Surinder Singh, 1993(1) Civil Court Cases 375.
In support of the judgments/decrees of the Courts below:
13. Per Contra, learned senior counsel appearing for the respondent has submitted, with no less adroitness, that the agreement, Exhibit P7, was entered into by the appellant with his eyes open and its terms cannot be orally extended or supplemented in view of the bar created by Sections 91, 92 and 93 of The Indian Evidence Act, 1872 (1872 Act, for brevity) and its perusal clearly brings out that only the land (and not the building erected thereon) was agreed to be sold by the respondent to the appellant as the term "Arazi Zarai" used therein only means agricultural land. According to the learned senior counsel use of the term "Arazi Zarai"
was not accidental or result of inadvertence, rather it was used deliberately as the respondent was not owner of the building erected over the land in question and, as such, was not competent to enter into an agreement to sell VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh it. The fact that only the land was agreed to be sold was well understood by the appellant also as is evident from use of the term "Arazi Zarai" in the notice (copy Exhibit P2) served by the appellant upon the respondent, submits learned senior counsel adding that use of the term "property"
instead of "Arazi Zarai" in the plaint is nothing but a deft move of the appellant to mislead the Court and such an effort needs to be sternly frustrated.
14. Further, according to respondent's learned senior counsel, appellant's assertion in the body of the plaint and in his chief examination, Exhibit PW7/A, that he has always been ready and willing to perform his part of the agreement, is also false as he has failed to reveal source of the money and his statement in cross-examination that the money was borrowed by him from his relatives cannot be accepted to be sufficient to reach a conclusion that he did possess requisite amount of money because neither the "relatives" have been named nor examined as witnesses in support of this assertion nor statements of bank accounts of such "relatives" have been made part of the record, and his statement in cross-examination that on March 31, 2005 he went to the office of Sub Registrar carrying with him an amount of Rs.28 or 30 lac is very vague and uncertain.
15. Further, according to learned senior counsel for the respondent assessment of value of the land as Rs. 1,46,16,000/- and building erected thereon as Rs. 3,05,1170/- by Sarja Civicon Consultancy vide report, Exhibit DW6/1 proved on record by P.K. Dabas (DW6), has remained unrebutted and from the circumstances attending on the transaction it emerges that there has been an effort to evade payment of stamp duty on the actual value of the land and, even otherwise, in view of the proven fact that VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh the building is owned by Jaiwant Singh Chandel and is occupied by State Bank of India, specific performance of the agreement of sale would be inequitable as held in Nahar Singh versus Harnek Singh, (1996) 6 SCC 699, AC Arulappan versus Smt. Ahalaya Naik, (2001) 6 SCC 600, Vimleshwar Nagappa Shet versus Noor Ahmed Sheriff and others, 2011 (6) RCR(Civil) 206 and Mathew versus Kuruvilla, AIR 187 SC 2328.
16. No other or further point has been urged on either side.
17. To succeed in a suit for specific performance, the plaintiff has to prove: (a) that a valid agreement of sale was entered by the defendant in his favour, and the terms thereof; (b) that the defendant committed breach of the contract; and (c) that he was always ready and willing to perform his part of the obligations in terms of the contract.
Execution of the agreement, Exhibit P7:
18. Question of due execution of agreement, Exhibit P7 need not hold this Court for long as finding of the learned trial court that execution of agreement dated November 29, 2004, Exhibit P7, has been sufficiently proved, has been affirmed by the learned first appellate Court and has not been challenged by the respondent.
What was agreed to be sold vide agreement, Exhibit P7? :
19. As aforesaid, appellant was also obliged to prove terms and conditions of the agreement, Exhibit P7. What was agreed to be sold or say what is the subject matter of the agreement, Exhibit P7, is one of the most important terms of an agreement. Incidentally, agreement, Exhibit P7, describes its subject matter as "Arazi Zarai" which means agricultural land. Learned counsel for the appellant, with the aid of sub-section (26) of Section 3 of the 1897 Act and Sections 8 and 54 of the 1882 Act and VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh Suresh Chand versus Kundan (Dead) by L.Rs. and others, Jai Narain Parasrampuria (Dead) & Ors. Versus Pushpa Devi Saraf & Ors. and Kodiyan and others versus Karambi (supra) has attempted to demonstrate that the term "Immoveable Property" includes all the things attached thereto and, as such, reference to the land in the agreement, Exhibit P7, includes a reference to the building standing thereon.
Section 3 of the 1882 Act says that in this Act, unless there is something repugnant in the subject or context "Immoveable property" does not include standing timber, growing crops or grass and "attached to the earth" means -(a) rooted in the earth, as in the case of trees and shrubs;
(b) embedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached.
Sub-section (26) of Section 3 of the 1897 Act, however, says, "Immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth and according to Section 8 of the 1882 Act, "Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the moveable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer; and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect". In Suresh Chand versus Kundan (Dead) by L.Rs. and others(supra) Hon'ble the Supreme Court, in the context of trees standing on the land which was subject matter of the agreement of sale, interpreted these provisions as under:
"6. A perusal of Section 3(a) of the Act shows that all things attached with the earth are included in the land. Thus the standing trees being embedded in the earth are part of the land. Section 8 of the Act provides that if there is any transfer of a property and unless there is any expressed or implied different intention appearing in the agreement, the interest in the property would also include anything attached with the land which is agreed to be sold. Thus when a vendor sells a property, he sells all his rights embedded in the property unless it is specifically or impliedly excluded. This Court in Shantabai v. State of Bombay, 1959 SCR 265 : AIR 1958 S. C. 532 held that although the Transfer of Property Act does not define immovable property excepting saying that immovable property does not include standing timber, growing crops or grass but Section 3(26) of the General Clauses Act defines "immovable property". According to the said provision immovable property shall include land, benefits arising out of land and things attached to the earth, or permanently fastened to anything attached to the earth. As there is no special definition of immovable property, the general definition contained in the General Clauses Act would prevail and, therefore, trees are regarded as part of land because they are attached and rooted in the earth. In view of the said legal position, the trees, which at the time of agreement for sale were mere saplings on the land would vest in the transferee.
7. This matter can be examined from another angle. As noticed earlier that when the agreement for sale was entered into between the appellant and the defendant, no full-fledged trees were in existence on the land and there were only plants and saplings which, during the long VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh period of litigation of 25 years have grown into full- grown trees. The question, therefore, arises whether the land, which was agreed to be transferred, would also include subsequent fullgrown trees on the land. In Divisional Forest Officer, H. P. v. Daut, 1968(2) SCR 112: AIR 1968 S. C. 612, this Court held as under :
"There can be no doubt that trees are capable of being transferred apart from land, and if a person transfers trees or gives a right to a person to cut trees and remove them it cannot be said that he has transferred land. But we are concerned with a different question and the question is whether under Section 11 of the Act trees are included within the expression 'right, title and interest of the landowner in the land' of the tenancy. It seems to us that this expression 'right, title and interest of the landowner in the land' is wide enough to include trees standing on the land. It is clear that under Section 8 of the Transfer of Property Act, unless a different intention is expressed or implied, transfer of land would include trees standing on it. It seems to us that we should construe Section 11 in the same manner."
8. The aforesaid decision makes it clear that interest in the property also includes anything attached to the land including trees standing on the land. Where a vendor sells his right, title and interest in the land unless expressly or impliedly provided in the agreement, sale of the land would also include trees standing thereon. But where trees are sold for being cut and removed it does not mean that the land is also transferred along with the trees. It is open to the vendor while transferring the land to exclude the trees from sale if he wants to appropriate it by cutting and removing them. In the present case, there was no mention in the agreement that the saplings were not being sold along with the land. In the absence of any expressed or implied intention in the agreement, it would be taken that the land along with the saplings standing on the land, which subsequently had grown into trees, were sold. The view taken by the High Court that unless the trees are sold separately, trees would not go with the land, is erroneous."
Again in Jai Narain Parasurampuria v. Pushpa Devi Saraf (supra) Hon'ble the Supreme Court ruled as under:
"71. One of the learned Judges of the High Court also opined that as the agreement to sell referred to only the house or the bungalow, the parties did not agree to sell the land. We have gone through the agreement for sale and are of the opinion that the views taken by the learned judge were wholly unwarranted. Apparently the VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh respondents intended to sell what they had purchased. There is nothing in the averments of the agreement to suggest that the intention of the respondents was restricted to the house alone and not the lands. There was no basis for arriving at the said findings. In any event, expression 'the house' will also include the land appurtenant thereto.
72. In P. Ramanatha Aiyar's Advanced Law Lexicon, Volume 2, 2005, the word "house" has been defined to mean :
"HOUSE" means a house suitable for occupation by a Military Officer or a military mess. The term includes the land and buildings appurtenant to a house. [Cantonment (House Accommodation) Act (6 of 1923), Section 2(f)] "HOUSE" includes any building or part of a building with its appurtenances and outhouses used for any purpose whatsoever [Orissa House Rent Control Act, 1967 (4 of 1968), Section 2(3)]. "HOUSE"
includes :
(a) any part of a building occupied or intended to be occupied as a separate dwelling, and
(b) any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it [Housing Act, 1996 (c. 52 1996), Section 6B(1)]"
73. In 'Word and Phrases, Permanent Edition, Volume 19A, it is stated :
"The word "building" necessarily embraces the foundation on which it rests; and the cellar, if there be one, under the edifice, is also included in the term "house" or "building". If there be a cellar, the word "building" includes it, unaffected by the height above the foundation Benedict v. Ocean Ins. Co., 31 N.Y. 389, 394.9"
74. Furthermore, it is now well settled that the building includes the land on which it stands, unless by express stipulation it is excluded. [See T. Lakshmipathi & Ors. v. P. Nithyananda Reddy & Ors. (2003) 5 SCC 150, paras 19 to 24]"
In Kodiyan v. Karambi (supra), learned Single Judge of Kerala High Court observed as under:
"4. Counsel for the appellants contended that Ext.A1 does not disclose that the house was available at the time when the transfer was made in favour of the plaintiff and Ayyer and that would lead to the inference that the house was constructed by the first defendant. If VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh immovable property is transferred, all improvements attached to the earth would also stand transferred to the assignee. It is not necessary to mention each and every item of improvements in the schedule of the assignment deed. Even if the existence of a house is not mentioned in Ext.A1, it cannot be said that the plaintiff has no title to the house in the plaint schedule property. As per Section 3 of the Transfer of Property Act, the expression "attached to the earth" means rooted in the earth, as in the case of trees and shrubs; imbedded in the earth, as in the case of walls or buildings; or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. Section 8 of the Transfer of Property Act provides that :
"Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof.
Such incidents include, when the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth."
In view of the definition of the term "attached to earth"
in Section 3 read with Section 8 of the Transfer of Property Act, even if the title deed or the schedule of property attached thereto does not mention that the house in the property which is the subject of transfer is also transferred, the transferee would get title to the house situated in the property, unless the house is specifically excluded from the transfer."
19. From a combined reading of the cited provisions and judgments it emerges that when a vendor sells a property, he sells all his rights embedded in the property unless these are specifically or impliedly excluded. In the plaint subject matter of the agreement, Exhibit P7 has been described as "property". However, agreement, Exhibit P7, describes the property thereby proposed to be sold as "Arazi Zarai", or say, agricultural land. In this agreement there is no reference to the building standing on that land even though it is admitted by the appellant, while appearing as PW7 before the learned trial Court, that at the time of execution of this agreement the building on the land in question was in existence. Similarly in the notice VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh dated March 23, 2005 (copy Exhibit P2), served by the appellant, through his counsel, upon the respondent, subject matter of the agreement has been stated to be "Arazi Zarai". It is not that the building standing on the land in question came into being after execution of the agreement, Exhibit P7, or that it was not in the knowledge of the parties. In fact it has come on record that the building under reference was under the occupation of State Bank of India since prior to date of execution of the agreement and the appellant while appearing as PW7 before the learned trial Court has admitted that the building under reference was in existence at the time on inception of the agreement and it was so told to the scribe of the agreement. He has also admitted that he had appended his signatures on the agreement only after having gone through its contents. Similarly, he had told his counsel about existence of the building and had gone through the contents of the notice dated March 23, 2005, Exhibit P2, before it was despatched by his counsel to the respondent. He exhibited his ignorance about value of the building. It is not that the appellant was unaware of how to describe the property proposed to be purchased by him. As aforesaid, he signed the agreement, Exhibit P7 and allowed notice, Exhibit P2, to be sent to the respondent knowing it fully well that the subject matter of the bargain was described as "Arazi Zarai" but in the plaint the description has been changed as "Property" and in his affidavit, Exhibit PW7/A, tendered by him in lieu of his statement in examination in chief he has stressed that the bargain pertained to "Zaidad May Bhawan" which means 'property including the building'. If one reads these circumstances in between the lines it, per force, emerges that the building, though in existence, was not intended to be part of the bargain. Exhibit P7 being a written documents, its terms cannot be VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh allowed to be supplemented orally and the appellant cannot be permitted to set up a case different from the intent of the agreement in question. That being so, the judgments cited by the learned counsel for the appellant are rendered of no assistance to his plea and findings of the Courts below that the building standing on the land in question was not intended to be part of the bargain, are affirmed.
Has the appellant been ready and willing to perform his part of the agreement?:
20. It is beyond cavil that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of the contract. The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf (per P. D'Souza Vs. Shondrilo Naidu, (2004) 6SCC649).
21. Section 16(c) of the Specific Relief Act, 1963 (1963 Act, for brevity), in fact, bars the specific performance of a contract in favour of a plaintiff 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 of the performance of which has been prevented or waived by the defendant). Explanation (ii) to Section 16 of the 1963 Act provides that for purposes of Clause (c) of Section 16, the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction. Thus VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh in a suit for specific performance, the plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his obligations under the contract in terms of the contract. (See: N.P. Thirugnanam to R. Jagan Mohan Rao, AIR 1996 SC 116; Pushparani S. Sundaram v. Pauline Manomani James, 2002 (9) SCC 582 and Manjunath Anandappa v. Tammanasa, 2003 (10) SCC 390). In N.P. Thirugnanam to R. Jagan Mohan Rao(supra) Hon'ble Supreme Court held:
"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 ay 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 contract."
22. Appellant herein though has stated in the plaint and his examination in chief while appearing as PW7 before the learned trial Court that on the appointed day he remained present in the office of Sub Registrar, Dharuhera having with him sufficient amount of money to pay the balance sale consideration and to meet the expenditure of execution and registration VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh of sale deed but when cross examined on behalf of the respondent he could not disclose exact amount he carried along and gave a very vague reply saying that he had Rs. 28-30 lac. His reply with regard to source of the money was still the more vague and uncertain. He replied saying that the money was not withdrawn by him from a bank, rather it was collected from the relatives. Neither has he named the "relatives" nor has proved on record bank statements of such relatives nor has examined any one of them to substantiate such a plea. Needless to state that payment of balance amount of sale consideration by the appellant to the respondent was a condition precedent to execution and registration of the sale deed and expenses of execution and registration of the sale deed were to be borne by the appellant. In view of this, it is a bit difficult to accept appellant's plea that he has always been ready and willing to perform his part of the agreement. Concurrent finding recorded by the Courts below to the effect that the appellant has failed to establish his readiness and willingness, therefore, cannot be interfered with.
Is it equitable to direct specific performance of the agreement, Exhibit P7?:
23. It is trite law that jurisdiction of the Court to grant a decree of specific performance of an agreement is discretionary or say the Court is not bound to grant a decree of specific performance of an agreement merely because it is lawful to do so. Section 20 of the 1963 Act provides that 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. Section 20 reads as under:
"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 VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh 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; or
(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 party."
Though grant of relief of specific performance is discretionary but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles. The circumstances specified in Section 20 of the 1963 Act are only illustrative and not exhaustive. The Court has to take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract. In A.C. Arulappan v. Smt. VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh Ahalya Naik(supra) Hon'ble Supreme Court ruled as under:
"7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but his discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff."
In Sardar Singh v. Krishna Devi,(1994)4 SCC 18 appellant, Sardar Singh while in Govt. service, Kartar Lal (first defendant in the suit), his brother had purchased on April 7, 1959 the house bearing Municipal No. 313, with land admeasuring 222 sq. yards in Karol Bagh from the Ministry of Rehabilitation. On January 22, 1963 the sale certificate was issued in favour of Kartar Lal. Finding it exclusively in the name of Kartar Lal, the appellant raised a dispute which was referred to named private arbitrators for resolution. The two arbitrators by their award dated October 16, 1963 declared that:
"We award that Shri Sardar Singh is the owner of half house bearing Municipal 313, Ward No. XVI situate at Gali No. 10, Faiz Road, Karol Bagh, New Delhi, from the date of purchase of the said house, i.e. from 7-4- 1959 as he paid Rs. 18,100/- to Shri Kartar Lal in the shape of claim bonds valued at Rupees 11,560.00 and Rs. 6,540.00 in cash towards the purchase price of the said house and Shri Kartar Lal paid half of the price of the said house in the shape of claim bond and cash. The price of the said house was contributed half and half by both of them. Though, the sale deed was taken by Shri Kartar Lal in his name benami but actually Shri Kartar Lal and Shri Sardar Singh, are the owners of the said VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh house in equal share from the date of its purchases, i.e. from 7-4-1959 and Shri Sardar Singh, is also entitled to half the amount of rent of the said house from the date of its purchase after deducting property taxes paid by Shri Kartar Lal."
Kartar Lal entered into a contract of sale of the entire property with Joginder Nath, husband of the first respondent on January 15, 1973 for Rupees 90,000/-
and received part consideration. The time to execute the sale deed was extended from time to time up to December 31, 1979 by which date Joginder Nath died and the first respondent entered into fresh contract with Kartar Lal and brought a suit in O.S. No. 2/83 against Kartar Lal. The appellant, becoming aware of the contract of sale and pending suit, got himself impleaded in that suit as second defendant. The trial court by decree dated May 5, 1986 decreed the suit. On appeal the High Court of Delhi in R.F.A. No. 206 of 1986 by judgment and decree dated November 21, 1990 (reported in AIR 1991 Delhi 178) confirmed the decree. The matter having been taken to it, the Hon'ble Supreme Court held as under:
"12. The next question is whether the Courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that 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. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and exhaustive. The Court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract."
Modifying the decree of the learned trial Court, Hon'ble Supreme Court ruled as under:
"15. In view of the finding that the appellant had half share in the property contracted to be sold by Kartar Lal, his brother, the agreement of sale does not bind the appellant. The decree for specific performance as against Kartar Lal became final. Admittedly the respondent and her husband are neighbours. The appellant and his brother being co-parceners or co- owners and the appellant after getting the tenant ejected both the brothers started living in the house. As a VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh prudent purchaser Joginder Nath ought to have made enquiries whether Kartar Lal had exclusive title to the property. Evidence of mutation of names in the Municipal Register establishes that the property was mutated in the joint names of the appellant and Kartar Lal and was in joint possession and enjoyment. The Courts below, therefore, have, committed manifest error of law in exercising their discretion directing specific performance of the contract for the entire property. The house being divisible and the appellant being not a consenting party to the contract, equity and justice demand partial enforcement of the contract, instead of refusing specific performance in its entirety, which would meet the ends of justice. Accordingly we hold that Joginder Nath having contracted to purchase the property, it must be referable only in respect of half the right, title and interest held by Kartar Lal, his vendor. The first respondent being successor in interest, becomes entitled to the enforcement of the contract of the half share by specific performance. The decree of the trial Court is confirmed only to the extend of half share in the aforestated property. The appeal is accordingly allowed and the decree of the High Court is set aside and that of the trial Court is modified to the above extent. The parties are directed to bear their own costs throughout."
In Damacherla Anjaneyulu v. Damacherla Venkata Seshaiah,AIR 1987 SC 1641 godowns and other costly structures had already been built on the land in question by the vendors and execution of sale deed in specific performance of the agreement to sell was ordered. Hon'ble Supreme Court, however, ruled as under:
"2. Having been taken through the records and the judgment under appeal, and having considered the submissions urged by counsel, we are of the view that whilst the High Court was right in upholding the finding that the plaintiffs were ready and willing to perform the contract whereas the defendant was guilty of the breach thereof, the High Court might well have invoked Section 20 of the Specific Relief Act, 1963 in order to do complete justice between the parties. Inasmuch as godowns and other costly structures have already been built on the land in question by the appellants (defendants) it would result in special hardship to grant specific performance. This is accordingly a fit case where the problems can be resolved by directing that instead of executing a sale deed of the land in favour of VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh the plaintiffs, the defendant shall pay to the plaintiffs Rs. 1,25,000/- being the approximate present value of 10 kunthas of land. We, therefore, substitute an order in the following terms in place of the decree passed by the High Court. The appellants-defendants shall pay to the respondents-plaintiffs a sum of Rs. 1,25,000/-(Rupees One lakh twenty five thousand only). This amount of Rs. 1,25,000/- shall be paid to the plaintiffs within six months from today in two equal instalments of Rs. 62,500/- each. The first instalment of Rs. 62,500/- will be paid on or before 31st May, 1987 and the second instalment of Rs. 62,500/- will be paid on or before 31st August, 1987. In case of failure to pay any instalment within time, the aforesaid amount will carry interest at 12% from today and will be recoverable by executing this decree. If payment is made in accordance within the aforesaid time limit, it will not carry any interest and this decree will stand satisfied upon the aforesaid amount being paid in the aforesaid manner. The appeal will stand disposed of in these terms with no order as to costs."
In Nahar Singh v. Harnak Singh(supra) appellant filed a suit for specific performance of the agreement of sale dated 28.11.1984. The respondent resisted the said suit by denying the allegations made in the plaint. It was further pleaded that the appellant had borrowed a sum of Rs. 11,050/- from the respondent and executed a pronote and therefore, he had filed a suit for recovery of the amount alongwith interest which had been registered as suit No. 463 of 1987. He accordingly prayed for dismissal of suit for specific performance. In the suit filed by Harnak Singh for realisation of the sum of Rs. 11,050/- together with the interest thereon. Nahar Singh took the plea that he had never taken any money as alleged and never executed any pronote. Both these suits were tried together and disposed of by a common judgment dated 31.1.1990. The suit filed by Harnak Singh for recovery of money was dismissed (Civil Suit No.463 of 1990), the suit filed for specific performance by Nahar Singh was decreed (Civil Suit No.181 of 1988). Two appeals were preferred by Harnak Singh VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh and the learned Additional District Judge, Sangrur, by his judgment dated 13th September, 1994 came to hold that the agreement dated 28.11.1984 (Exhibit D1) was not enforceable and no specific performance of the said agreement could be ordered as the property in respect of which the agreement had been entered into was vague and unidentifiable and the said agreement, Exhibit D1, having been deliberately undervalued to save the stamp duty and registration fee, was void on the ground of public policy. The Lower Appellate Court also found that the parties had entered into an agreement to save stamp duty and registration fee and the said agreement was thus opposed to the public policy and relief of specific performance could not be claimed and dismissed both the suits. Regular Second Appeal having been carried to the High Court the High Court agreed with the conclusion of the Lower Appellate Court. Hon'ble Supreme Court also refused to upset the findings recorded by the lower Appellate Court.
24. From the above it is manifest that in a case where interest of a third party is involved or on account of improvements and/or erection of costly structures market price of the property under agreement has escalated or there has been effort to evade payment of stamp duty by the parties, Court may legitimately exercise its discretion under Section 20 of the 1963 Act not to direct specific performance of an agreement. In the instant case respondent's very specific plea is that the building standing over the land in dispute was constructed by H.S. Grewal and is presently owned by Jaiwant Singh Chandel and that the building is under occupation of State Bank of India. In the evidence of P.K. Dabas (DW6) and his report, Exhibit DW6/1, it has come on record that the land under dispute is worth Rs. 14616000/-, building erected thereon is worth Rs. 3051170/- and value of other VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh amenities available there is Rs. 132379/-. In the agreement, Exhibit P7, value of its subject matter has been fixed as Rs. 2400000/- only which is far less than the value of the land as assessed by P.K. Dabas (DW6). Nothing to the contrary has been brought on record by the appellant. This renders specific performance of the agreement inequitable, firstly, because interest of third parties is involved; secondly, because value of the land alone is far more than the value of the subject matter of the bargain fixed by agreement, Exhibit P7; and thirdly, because from the circumstances appearing on record it is evident that an effort has been made to deprive the State exchequer of the stamp duty to a great extent.
25. It also emerges from the record that the appellant has attempted to give a twist to the facts of the case by describing the subject matter of the agreement, Exhibit P7, as "property' in the plaint and to project that building standing on the land was also agreed to be sold, whereas, as here- in-before noted, it was agricultural land alone that was agreed to be sold by the respondent and even the appellant had described it so in notice, Exhibit P2. It is settled law that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief. (per Lourdu Mari David and othersVs. Louis Chinnaya Arogiaswamy and others, AIR 1996 SC 2814).
26. In view of the above, exercise of discretion by the Courts below not to direct specific performance of the agreement in question cannot be said to be unreasonable or arbitrary and, therefore, cannot be interfered with.
VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh
27. For the reasons recorded above, the appeal is found to lack in merit and not to involve any question of law, much less a substantial question law, and, as such, is dismissed with costs.
[Mahavir S. Chauhan] Judge December 17, 2014 adhikari VIRENDRA SINGH ADHIKARI 2015.05.07 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh