Madras High Court
Subbanna Gounder (Deceased), ... vs Subbayammal, Duraiswamy, ... on 17 March, 2003
Equivalent citations: AIR2003MAD437, (2003)2MLJ231, AIR 2003 MADRAS 437, (2003) 2 MAD LJ 231 (2003) 4 ICC 130, (2003) 4 ICC 130
Author: M. Chockalingam
Bench: M. Chockalingam
JUDGMENT M. Chockalingam, J.
1. The first defendant is the appellant herein.
2. This appeal has arisen from the judgment and decree of the learned Subordinate Judge, Erode granting a decree for specific performance in favour of the first respondent/plaintiff.
3. The case of the plaintiff as set out in the plaint is as follows:
The 2nd defendant is the only son of the 1st defendant, and they are members of Hindu joint family. The suit survey field is the ancestral property of the defendants 1 and 2, who are in possession and enjoyment of the suit property. On 9.12.1980, a written agreement for sale was executed by the defendants 1 and 2 agreeing to sell half share in the suit property for Rs.45,000/- to the plaintiff. The plaintiff paid an advance of Rs.7,500/-. Since the sale transaction could not be completed, another agreement of sale was made on 2.6.1981, and it was also registered. The said advance amount was taken over as part of the advance for the agreement dated 2.6.1981. The defendants 1 and 2 received another sum of Rs.3,500/- as additional advance, making in all Rs.11,000/- as advance. As per the agreement, the plaintiff is to pay Rs.34,000/- being the balance of sale consideration on or before 1.12.1981. The plaintiff has got sufficient means to purchase the properties and has been ready and willing to perform her part of the contract. The 2nd defendant wanted additional advance of Rs.4,000/-, and an endorsement was made on the agreement on 28.11.1981, wherein the 2nd defendant has signed. It was agreed that the additional advance of Rs.4,000/- is to be paid after getting the endorsement signed by the first defendant, but the 1st defendant refused to sign the endorsement. Since the defendants 1 and 2 failed to execute the sale deed, the plaintiff issued a notice on 29.11.1981. On 29.2.1984, she issued another notice to the defendants 1 and 2. The defendants 1 and 2 sent a reply notice making false allegations. She came to know that the 1st defendant executed sale deeds over small plots along the road margin in favour of the defendants 3 and 4 on 31.8.1984. Those sale deeds are sham and nominal and not supported by consideration. She is entitled to get a registered sale deed executed by the defendants. The defendants 3 and 4 could not claim right and title to the sites purchased by them as the right of the plaintiff prevails. Hence this suit.
4. The suit was resisted by the first defendant by filing a written statement with the following averments:
On 16.9.1944, the father of the first defendant Chennimalai Gounder sold an extent of Ac.4.19 in G.S. No. 306/2 to the first defendant and his brother Kandasamy. On 10.6.1968, Kandasamy Gounder sold his half share to the first defendant. The first defendant and his brother Kandasamy did not have any joint family nucleus. The said property is the separate property of the first defendant, in which the second defendant has no right, title and interest. Even in the agreement of sale, the first defendant has stated that the suit properties were his self acquired properties. The agreement dated 9.12.1980 is admitted. The plaintiff agreed to tender the balance of sale consideration of Rs.37,500/- within six months from 9.12.1980 i.e. on or before 8.6.1981. Time was the essence of the contract. The plaintiff failed to tender the said balance of sale consideration. Thus, the plaintiff has committed breach of contract. Even before the expiry of six months, the plaintiff expressed her inability to perform her part of the contract and requested further extension of time. A fresh agreement of sale was executed on 2.6.1981 whereby the plaintiff paid Rs.3,500/- making up total advance of Rs.11,000/- and agreed to tender the balance of consideration of Rs.34,000/- on or before 1.12.1981. She again committed default, committed breach of contract and failed to tender the balance of sale consideration. The sum of Rs.11,000/- was paid as advance to be forfeited in case of default. The second defendant never demanded additional advance of Rs.4,000/-. The alleged endorsement dated 28.11.1981 by the second defendant is not true, valid and genuine. The defendants did not receive any notice as alleged by the plaintiff. The plaintiff in order to show her readiness and willingness, sent a telegraphic notice. The first defendant sent a reply telegraphic notice. But she did not approach the first defendant or tender the balance of sale consideration. The conduct of the plaintiff clearly establishes that she has not come to Court with clean hands and this fact alone may be sufficient to disentitle the plaintiff to the equitable relief of specific performance. The plaintiff was not at all ready and willing to perform her part of the contract. The plaintiff did not evince any interest in performing her part of the contract between 9.12.1980 and 8.6.1981 and between 2.6.1981 and 1.12.1981. She had not sought the relief immediately after 1.12.1981. The present suit was filed after the expiry of more than two years. The plaintiff's remedy has become barred by time. Hence, the suit may be dismissed with costs.
5. In the additional written statement, the first defendant has stated that the plea for the refund of advance is belated; that the plaintiff is not entitled to make a claim after elaborate arguments have been advanced in the suit on behalf of the defendants; and that the claim for refund of advance is barred by limitation.
6. The second defendant was set exparte. The defendants 3 and 4 adopted the written statement of the first defendant.
7. On the above pleadings, the trial Court framed the necessary issues and tried the suit. After considering the rival submissions and the evidence both oral and documentary, the learned Subordinate Judge granted the relief of specific performance. Aggrieved first defendant has brought forth this appeal.
8. As seen above, the first respondent/plaintiff laid the said civil action for the relief of specific performance on the basis of an agreement for sale marked as Ex.B1 or in the alternative to direct the first appellant and the second respondent namely defendants 1 and 2 to return the advance of Rs.11,000/- with interest. The defendants 1 and 2 contested the suit mainly on the ground that the plaintiff was never ready and willing to perform her part of the contract and has not approached the Court with clean hands and hence not entitled to the equitable relief of specific performance.
9. The learned Counsel appearing for the appellants would submit that the trial Court has not considered the entire evidence properly; that it is pertinent to note that the question as to the entitlement of any right of the 2nd respondent over the suit properties has not been considered and decided by the lower Court; that time is the essence of the contract in question; that the fact that the parties entered into a fresh agreement and the subsequent conduct would go to show that time was considered to be the essence of the contract; that the finding of the lower Court that the first respondent was ready and willing to perform her part of the contract is patently erroneous and not supported by any legally acceptable evidence; that the first respondent was never ready and willing to perform her part of the contract; that it is evident from the oral and documentary evidence that she was not possessed of the necessary funds; that it is pertinent to note that in spite of the reply given by the appellant to her telegram, she was not ready to get along with the suit transaction; that the finding of the lower Court that she was possessed of sufficient funds during the relevant time is opposed to evidence and hence liable to be set aside; that there is no sufficient pleading with regard to the readiness and willingness of the first respondent to perform the contract; that the judgment of the lower Court has got to be set aside and the appeal be allowed. In support of his contentions, the learned Counsel relied on the following decisions: 1) 1996 (1) LW 238; 2) ; 3) ; 4) 1991 (7) SCC 307; 5) ; 6) ; 7) 1994 (II) MLJ 78 and 8) AIR 1965 MADRAS 30.
10. The learned Counsel appearing for the first respondent would argue that only after scrutiny of the entire evidence, the lower Court has granted the relief of specific performance; that the plaintiff was always ready and willing to perform her part of the contract; that instead of executing the sale deed, the defendants 1 and 2 were prolonging the transaction; that it is pertinent to note that the sale deeds executed in favour of the defendants 3 and 4 by the first defendant are sham and nominal and not acted upon; that at every stage, the time was not the essence of the contract; that though the first defendant has agreed to execute the sale deed in favour of the plaintiff even after the expiry of the stipulated period, as per the reply telegraphic message sent by his wife, he has not performed his part of the contract, and hence, he cannot be permitted to say that the plaintiff was never ready and willing to perform the contract; that having agreed to the terms of the second agreement, the defendants 1 and 2 have committed default in completing the transaction; that the evidence adduced by both sides has been elaborately considered and discussed by the lower Court; that the findings of the lower Court have got to be sustained and the appeal be dismissed. In support of his contention, the learned Counsel relied on the decisions namely 1) 2000 (5) SUPREME 168; 2) ; 3) 1974 (I) MLJ 62; 4) and 5) AIR 1988 SC 1024.
11. Arguing for the respondents 5 to 7, the learned Counsel would submit that they are the legal representatives of the fourth defendant; that the fourth defendant has purchased some of the properties from the appellant for valuable consideration; that the sale deeds in that regard are valid, and hence, the properties purchased by the fourth defendant have got to be protected. In support of his argument, the learned Counsel relied on the decisions reported in 1) 2002 AIR SCW 417; 2) 2002 (2) LW 399; 3) and 4) .
12. Admittedly, the first appellant and the second respondent being father and son entered into an agreement for sale under Ex.B1 dated 9.12.1980 agreeing to sell the half share in the suit property for Rs.45,000/-. The plaintiff paid an advance of Rs.7,500/-. The sale could not be completed within the stipulated period of six months, and hence, another agreement of sale was entered into between the parties on 2.6.1981 under Ex.A1. The earlier advance of Rs.7,500/- paid on 9.12.1980 was treated as advance under Ex.A1 agreement also. An additional advance of Rs.3,500/- was paid by the plaintiff on 2.6.1981. Excepting the aforesaid advance totalling to Rs.11,000/-, the plaintiff was to pay the balance of sale price namely Rs.34,000/- on or before 1.12.1981, and on receipt of the same, the defendants 1 and 2 should execute a registered sale deed in favour of and at the expenses of the plaintiff and deliver possession of the property, and in default by the defendants 1 and 2, the plaintiff should approach the concerned Court for her remedy. On 29.11.1981, the plaintiff issued a telegraphic message as found under Ex.A8, which resulted in a reply telegraphic message issued by the wife of the first defendant. A notice issued by the plaintiff through her counsel under Ex.A9 on 29.11.1981 was returned unserved. Again the plaintiff issued another notice through her lawyer on 29.2.1984 under Ex.A6. Receiving the same, the defendants 1 and 2 issued Ex.A7 reply notice through their counsel on 12.3.1984 stating that the plaintiff was not entitled for specific performance as demanded in the notice. The first defendant executed sale deeds in respect of small plots out of the suit property to the defendants 3 and 4 on 31.8.1984. The plaintiff filed the suit for specific performance on 8.10.1984 against the defendants 1 and 2 and has also added the subsequent purchasers as defendants 3 and 4.
13. The whole appeal rests on the main question whether the first respondent/plaintiff was ready and willing to perform her part of the contract as required by law. Needless to say that a duty is cast upon the plaintiff to specifically aver and strictly prove the same. Concededly, a registered agreement for sale was entered into between the parties on 9.12.1980, as found under Ex.B1, wherein the sale consideration for the suit property was fixed at Rs.45,000/-, and the plaintiff has paid an advance of Rs.7,500/-. Under the said agreement for sale, it was clearly agreed that the first respondent/plaintiff should pay the balance of sale consideration within a period of six months therefrom. It is not in dispute that since the sale transaction under Ex.B1 could not be completed, the parties entered into another agreement on 2.6.1981 as found under Ex.A1. Ex.A1 agreement recites thus:
"nkw;go cld;gof;if bfLt[f;Fs; gj;jpuk; gjpt[ bra;J bfhs;s trjpapy;yhkypUg;gjhft[k; ,d;Dk; MW khj fhyk; tha;jh bfhLf;FkhWk; 3 yf;fkpl;lth; nfl;Lf; bfhz;ljw;F 1. 2 yf;fkpl;lth;fSk; rk;kjpj;J nkYk; U:gha; 3500/00 ml;thd;R Jif bgw;Wf; bfhz;L ehsJ njjpapypUe;J MW khj fhyj;Jf;Fs; mjhtJ 1/12/81 njjpf;Fs; fpuaj;Jifapy; ehsJ njjp tiu brYj;jpa[s;s ml;thd;R Jif U:gha; 11000/00 gjpbdhU Mapuk; nghf kPjp U:gha; 34000/00 Kg;gj;jp ehd;fhapuj;ija[k; 3 yf;fkpl;lth; 1. 2 yf;fkpl;lth;fsplk; brYj;jp jd; brhe;j brytpy; fpuag;gj;jpuk; th';fp fpuak; vGjp Koj;J 1. 2 yf;fkpl;lth;fisf; Tg;gpl;L gj;jpuk; gjpt[ bra;J Koj;J g{kpiaa[k; RthjPdk; bgw;Wf; bfhs;s ntz;oaJ/"
It is quite evident from the above recital that the said transaction as contemplated under the first agreement under Ex.B1 could not be completed in view of the inability on the part of the plaintiff due to lack of necessary funds.
14. As per the terms of the agreement under Ex.A1 as seen above, the first respondent/plaintiff should pay Rs.34,000/- on or before 1.12.1981 being the balance of consideration and obtain a sale deed from the defendants 1 and 2 at her cost. There is no material available to indicate that the first respondent/plaintiff made any attempt either to pay the balance of consideration of Rs.34,000/- or to purchase the stamp papers or was ready and willing to get the sale deed executed in her favour within the stipulated date. The first respondent/plaintiff though was not ready with necessary funds to get the sale deed executed, has cleverly issued a telegraphic message on 29.11.1981 as found under Ex.A8, two days prior to the stipulated date namely 1.12.1981 as if she was ready to pay the balance of consideration. It has to be pointed out that in order to prove the fact that the plaintiff was actually ready with necessary funds, she has not placed any material before the trial Court. On receipt of the said telegraphic message, the first defendant's wife has issued a reply telegraphic message on 2.12.1981 as follows:
"Ready to perform my part of contract. I am willing to execute sale deed as agreed or within a week from today. You are delaying wantonly."
The receipt of the said reply telegraphic message is not disputed by the first respondent/plaintiff.
15. The plaintiff has issued the second notice under Ex.A6 after a lapse of 26 months i.e. on 29.2.1984. No explanation is offered by the first respondent/plaintiff as to why she waited for nearly 26 months after issuing the first notice through her lawyer. In the instant case, there is available evidence to show that a telegraphic message was issued on the side of the first defendant even after the stipulated date namely 2.12.1981 that the plaintiff should pay the balance of consideration and get the sale deed executed within a week therefrom. But, the plaintiff has failed to do so. Instead, she has issued a second notice under Ex.A6 after 26 months. At this juncture, it is pertinent to point out that the second notice issued on 29.2.1984 resulted in a reply dated 12.3.1984 under Ex.A7 by the defendants 1 and 2 flatly denying the right of the plaintiff to demand a sale deed on the basis of Ex.A1 agreement. But, the plaintiff has come forward to file the suit only on 8.10.1984. Under the stated circumstances, it would be clear that the second notice has been issued by the plaintiff in order to make up the delay that was already caused and also the inaction. The absence of any explanation for the inordinate delay as stated above, will, no doubt, lead to the inference that the plaintiff has waived the performance of the contract. The Court is able to notice an unexplained silence and wanton delay, which should have occasioned under the circumstances, due to the lack of necessary funds to pay the defendants 1 and 2 so as to get the sale deed executed in favour of the plaintiff. Hence, the plaintiff cannot be allowed to escape the consequences of the same by saying that the suit was filed in time and not barred by limitation, and the mere delay in seeking the relief of specific performance would not dis-entitle her to get the relief.
16. The averments in the plaint that the plaintiff was ever ready and willing to pay Rs.34,000/- being the balance of consideration and made many a demand on the defendants 1 and 2 are thoroughly falsified by the contents of the notice issued under Ex.A6 dated 29.2.1984, wherein it has been specifically stated that the second defendant received a sum of Rs.4,000/- on 28.11.1981 and has made an endorsement in the agreement therefor. The specific averment in the plaint is as follows:
"It was agreed that the additional advance of Rs.4000/- is to be paid after getting the endorsement signed by the Ist defendant also. The first defendant refused to sign the endorsement."
Nowhere it is stated in the plaint that a sum of Rs.4,000/- was either paid by the plaintiff or received by the defendants 1 and 2. Under Ex.A6 notice dated 29.2.1984 through her Counsel, the plaintiff has made a demand on the defendants to execute a sale deed by receiving the balance of consideration of Rs.30,000/- only and not Rs.34,000/-. This averment in the notice would not only indicate that the plaintiff was ready and willing to pay only Rs.30,000/- and not Rs.34,000/-, which was the actual balance of consideration excepting the advance payment of Rs.11,000/-, but also demonstrate that the plaintiff has issued the said notice containing false allegations as if Rs.4,000/- was paid to the second defendant. Under such circumstances at no stretch of imagination, the plaintiff can claim that she was ready and willing to pay the balance of consideration as found under Ex.A1 agreement. The learned Counsel appearing for the first respondent/plaintiff made a feeble attempt to explain the same by stating that the averment in the notice in respect of payment of Rs.4,000/- to the second defendant was a mistake that has crept in the notice, and hence, it has been specifically averred in the plaint that the plaintiff was ready and willing to pay Rs.34,000/- being the balance of consideration. Viewing from the legal requirement as to the readiness and willingness, this contention put forth by the first respondent's side cannot be taken as an explanation at all. The Court is of the considered view that the contents of the notice dated 29.2.1984 stating that the plaintiff has paid Rs.4,000/- to the second defendant on 28.11.1981, one day prior to the telegraphic message, by obtaining proper endorsement from him under Ex.A1, and hence, the defendants 1 and 2 should execute a sale deed by receiving the balance of consideration of Rs.30,000/- would clearly falsify the case of the plaintiff that she was ready and willing to pay the balance of consideration under Ex.A1.
17. Placing much reliance on the general proposition of law that there is no presumption as to the time being the essence of the contract in a case of sale of immovable property, it was contended by the learned Counsel for the first respondent/plaintiff that in the instant case also time was not the essence of the contract; that many a demand was made on the first appellant/first defendant expressing the first respondent's readiness and willingness to perform her part of the contract, and under such circumstances, the first respondent was constrained to file the suit seeking the relief, and she has also done so. Added further the learned Counsel that the mere fact that the first respondent was not able to pay the entire amount within the particular time would not dis-entitle her to the relief of specific performance. True it is that in the case of sale of immovable property, there is no presumption as to the time being the essence of the contract. Even then, the Court may infer that the contract between the parties is to be performed in a reasonable time taking into consideration the following conditions:
(i) the expression of time stipulated in the contract; (ii) the nature of the property and (iii) the surrounding circumstances attendant.
In the instant case, if the conduct of the first respondent/plaintiff from the time of entering into the first agreement under Ex.B1 till the time of filing of the suit and all the surrounding circumstances are taken into consideration, it would be highly inequitable to grant the relief. From the available materials, without any hesitation it can be stated that the plaintiff was never ready and willing to perform her part of the contract.
18. Normal presumption that time is not the essence of the contract when it relates to the sale of immovable property, cannot be applied to the present facts and circumstances of the case, in view of the language used in the agreement, which would indicate in unmistakable terms that the time was the essence of the contract. When the plaintiff came forward with a request to extend time in view of her inability to perform her part of the first agreement due to lack of sufficient funds, the defendants 1 and 2 were compelled to enter into the second agreement under Ex.A1, which is the basis for the suit. The intention of the parties to treat the time as the essence of the contract is clearly evidenced not only by the recitals under Ex.A1, but also by circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale, time is not the essence of the contract. The available materials would amply demonstrate that the plaintiff was not ready, nor had she the capacity to perform her part of the contract, since she had not the financial capacity to pay the consideration as agreed upon between the parties.
19. The Hon'ble Apex Court had an occasion to consider the circumstances that should weigh for granting the discretionary relief of specific performance in a case like one on hand, in A.C.ARULAPPAN VS. SMT. AHALYA NAIK reported in 2002-2-L.W.399 and held thus:
"Specific Relief Act (1963), S. 20(3) - See Specific Performance.
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 this 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.
It is clear that the respondent (Plaintiff) had been trying to take an unfair advantage over the appellant and that the circumstances in which this agreement was executed within a short period of termination of the first contract by the respondent, make it highly probable that the appellant might not have readily agreed to this contract. There are other circumstances also to hold that the defendant-respondent had not approached the court with clean hands.
Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court."
20. In a case (K.S.VIDYANADAM AND OTHERS VS. VAIRAVAN), the Hon'ble Apex Court has considered the nature of the discretionary power of the Court to decree specific performance and has 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 and the nature of the property. The Apex Court has also pointed out that where an agreement specifying the period of 6 months within which plaintiff had to purchase the stamp papers, tender the balance amount of consideration and require the defendants to execute the sale deed, total inaction for 2 1/2 years after initial payment of a small amount as earnest money by the plaintiff would be a circumstance which would weigh against exercise of discretion for grant of specific performance of the agreement in favour of the plaintiff.
21. The Court is of the considered view that the above two decisions of the Hon'ble Apex Court are squarely applicable to the present facts of the case. Applying the above decisions, the Court without any hesitation cannot exercise its discretion in favour of the first respondent/plaintiff to grant the equitable relief of specific performance, and thus, the plaintiff is not entitled to the said relief. Therefore, the judgment of the lower Court has got to be set aside.
22. The first respondent/plaintiff as an alternative relief has sought for the refund of the advance amount of Rs.11,000/- with interest. The contention of the defendants 1 and 2 that in view of the facts and circumstances of the case, the first respondent/plaintiff has forfeited the advance amount cannot stand the scrutiny of law. The Court is unable to notice any legal impediment in granting the alternative relief. Therefore, the plaintiff is entitled for the refund of advance of Rs.11,000/- with interest at 6% per annum from 2.6.1981 till the date of payment.
23. In the result, this appeal suit is allowed with costs, and the judgment and decree of the lower Court are set aside. The first respondent/plaintiff is given a decree for a sum of Rs.11,000/- with interest at 6% per annum from 2.6.1981 till realisation and with proportionate costs. In other respects, O.S. No. 335/84 is dismissed.