Madras High Court
D.Chitra vs S.Subramaniam
Author: P.T. Asha
Bench: P.T. Asha
S.A.No.635 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 15.07.2021
Delivered on : 03.08.2021
CORAM
THE HONOURABLE Ms. JUSTICE P.T. ASHA
S.A.No.635 of 2008
&
M.P.No.1 of 2008
D.Chitra ...Appellant
Vs
1.S.Subramaniam
2.M.Kanagambikai
3.R.Kamalam
4.M.Rajamani
5.V.Parimalam
6.Sudamani
7.Dhanalakshmi
8.J.Bharathi
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S.A.No.635 of 2008
9.Sreevalli
10.J.Muthukumar ...Respondents
Prayer: Appeal filed under Section 100 of the CPC against the
Judgement and Decree dated 24.09.2007 passed in A.S.No.148 of
2004 on the file of the Principal District Judge, Coimbatore, reversing
the Judgement and Decree dated 20.07.2004 passed in O.S.No.1374
of 1995 on the file of the Principal Subordinate Judge, Coimbatore.
For Appellant : Mr.Vijay Raghunathan
For Respondents 1 & 2 : Mr.M.Sriram
For Respondents 4, 6 & 7 : No Appearance
For Respondents 8 to 10 : Ex parte
For Respondents 3 & 5 : Not ready in notice.
JUDGMENT
The appellant is the 1st defendant in a suit filed for Specific Performance and injunction by respondents 1 and 2 herein. The suit O.S.No.1374 of 1995 was dismissed by the Trial Court, namely, the 2/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 Principal Subordinate Judge, Coimbatore. On an appeal in A.S.No.148 of 2004 by respondents 1 and 2 herein the Judgement and Decree of the Trial Court was reversed by the Principal District, Judge, Coimbatore.
2. It is challenging this Judgement and Decree that the 1st defendant is before this Court. The facts in brief necessary to dispose of the above Second Appeal is herein below narrated and for the ease of understanding the parties are referred to in the same array as before the Trial Court.
3.The plaintiffs have filed the suit O.S.No.1374 of 1995 to specifically enforce an agreement of sale dated 19.12.1992 entered into between themselves and the 1st defendant and her late husband P.N.Balasubramaniam in respect of the suit schedule properties. The A-Schedule property belonged absolutely to late P.N.Balasubramaniam and the B-Schedule property belonged 3/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 absolutely to the 1st defendant. The sale consideration was fixed at Rs.2,77,500/-. On the execution of the agreement a sum of Rs.1,00,000/- was paid and within six months the balance amount was to be paid and the sale deed executed i.e., by 19.06.1993.
4. The plaintiffs would submit that on the date of the agreement they had been put in possession of the suit property and that they had been always ready and willing to go ahead with the contract. On 18.03.1993 they had paid a sum of Rs.25,000/- to the 1st defendant and within two days of the payment P.N.Balasubramaniam had passed away on 20.03.1993. After the death of P.N.Balasubramaniam the plaintiffs had approached the 1st defendant asking her when the sale deed would be executed and whether there were any other legal representatives for P.N.Balasubramaniam, to which a very evasive response was given. This prompted the plaintiffs to conduct an independent enquiry. In the course of this enquiry they came to know about the 2nd defendant, the mother of P.N.Balasubramaniam. 4/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008
5. Meanwhile, disputes arose between the 1st and 2nd defendants as the 2nd defendant was insisting on a share in the property. The 1st defendant however relied on a Will said to have been executed by P.N.Balasubramaniam which was disputed by the 2nd defendant. The plaintiffs would submit that they had attempted several rounds of compromise between the defendants 1 and 2 but to no avail. Since the plaintiffs were reluctant to take the legal remedy they had waited for the defendants 1 and 2 to resolve the disputes. However, they did not come forward constraining the plaintiffs to issue legal notice dated 02.04.1995. The 1st defendant did not receive the said notice and the 2nd defendant had received the notice but had not sent any reply. Therefore, the plaintiffs were constrained to file the suit.
6. The 1st defendant filed a written statement inter alia denying the contentions of the plaintiffs regarding their readiness and willingness. She had raised the following defenses: 5/42
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(a)The agreement was a commercial one and therefore time was the essence of the contract and the entire sale had to be concluded by 19.06.1993.
(b)The plaintiffs had not taken any steps to form the layout though under the agreement they were permitted to immediately start the said process.
(c)Even after P.N.Balasubramaniam had died and despite a draft sale deed been given by the 1st defendant, the plaintiffs have not come forward to pay the balance sale consideration and go ahead with the sale deed. It was only on 02.04.1995 that the plaintiffs had issued a legal notice asking the defendants to execute the sale deed.
(d)The plaintiffs who claim that they are not bound by the interse dispute between defendants 1 and 2 have not taken any steps to pay the balance sale consideration and have the sale deed executed. In fact nothing prevented the plaintiffs from instituting the suit for Specific Performance as soon as they came to know about the rival claim made by the 2nd defendant with reference to the property of 6/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 P.N.Balasubramaniam and deposited into the Court the balance sale consideration.
The 1st defendant therefore submitted that the suit itself was highly misconceived and filed after a long delay. In short, she had sought for the dismissal of the suit.
7. After the death of the 2nd defendant, defendants 3 to 10 were impleaded as her legal heirs along with the 1st defendant. The 4th defendant had filed a written statement which was adopted by the other defendants in which they had also reiterated that the plaintiffs were never ready and willing to proceed with the sale and that therefore they are not entitled to the discretionary relief of Specific Performance.
8. The parties had gone to trial before the Principal Subordinate Judge, Coimbatore and the 2nd plaintiff was examined as P.W.1 and one R.Srinivasan as P.W.2 and 19 Exhibits were marked on their side. 7/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 The 1st defendant examined herself as D.W.1 and no documents were filed on their side.
9. The learned Subordinate Judge, Coimbatore on consideration of the evidence on record and taking note of the fact that the time was the essence of the contract and that the plaintiffs had not proved their readiness and willingness had proceeded to dismiss the suit with cost.
10. However, when the said Judgement was taken up on appeal in A.S.No.148 of 2004, the Appellate Court reversed the said Judgement holding that the time was not the essence and there were reciprocal obligations which the 1st defendant had not performed. The learned Judge therefore held that the plaintiffs were justified in not proceeding with the sale deed. The learned Judge also held that the possession of the property had also been given to the plaintiffs. Challenging the said Judgement the 1st defendant is before this Court. 8/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008
11. The above Second Appeal was admitted on the following substantial questions of law on 24.04.2008:
“(a)Whether the lower appellate Court is correct in holding that the appeal is filed within time even though deficit Court fee paid 11.10.2004 after expiry of the period of limitation 9.10.2004 but without filing petition for condone delay in payment of Court fee as contemplated under Section 148 and 149 read with Order 41 Rule 3A of CPC?
(b)Whether the lower appellate Court is correct in holding that the plaintiffs have prove their readiness and willingness to perform their part of contract by suit notice Exhibit A.3 even though it was not served on the D.W.1 and plaintiffs have failed to prove their ready and willingness by tendering the balance of sale consideration within the time stipulated in Exhibit A.1 which expired on 18.06.1993?
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(c)Where the agreement Exhibit A.1 specifying period of 6 months within which plaintiffs had to get the sale deed executed in their or their nominees by paying the balance of sale consideration to the defendants / appellants, total inaction of the plaintiffs for 2 years after initial payment of money would weigh against exercise of discretion for grant of specific performance in favour of the plaintiffs or not?
(d)Whether the lower appellate Court is correct in granting the relief of specific performance when the delay or laches on the part of the plaintiffs to perform his part of the contract would disentitle him the relief of specific performance while the price of land property is continuing in steep rise which would be relevant factor for the Court to decide before granting the relief?
(e)Whether the lower appellate Court has committed error in relying upon the inapplicable 10/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 judgements by ignoring the provisions of Sub Section 2
(a), (b) & ( c ) of Section 20 of the Specific Relief Act?”
12. Mr.Vijay Raghunathan, learned counsel appearing on behalf of the 1st defendant would submit that the agreement entered into between the plaintiffs and the 1st defendant and her husband was a commercial agreement since the properties were sold for the purpose of forming a layout of house sites. In fact the 2 nd plaintiff as P.W.1 has admitted to the fact that the agreement between them was for a commercial purpose. Once the agreement is for a commercial purpose then time becomes the essence of the contract. In support of this preposition he would rely on the Judgement reported in AIR 1965 MAD 352 – Sriram Cotton Pressing Factory Vs. K.E.Narayanaswami Naidu.
13. His next contention was that the plaintiffs have not proved their readiness and willingness to proceed with the contract. The 11/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 Legal notice under Ex.A.3 was issued only on 02.04.1995, nearly two years after the death of P.N.Balasubramaniam and the six months period had lapsed. The suit came to be filed on 10.10.1995, nearly two and half years after the date of the agreement. Though the property of the 1st defendant which was the second item of the suit property was free from any encumbrance and a distinct one the plaintiffs did not attempt to have the sale deed executed at least with reference to this unencumbered property.
14. Further, the plaintiffs have not been able to explain as to why they had not proceeded further with the sale agreement dated 19.12.1992. The suit had been filed only in the year 1995 nearly two years after the death of P.N.Balasubramaniam. That apart, the 1st defendant had produced a draft sale deed and she had also informed the plaintiffs that her husband had executed a will in her favour. Therefore, she was competent to execute the sale deed with reference to both the properties. This offer was made in the month of July 1994 12/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 when the dispute between the 1st defendant and her mother-in-law had not escalated into the filing of the suit.
15. He would further draw the attention of the Court to the terms of the agreement of sale, where, clause: 7 provides the procedure in case of the 1st defendant and her husband failing to execute the sale deed. He would submit that after executing the agreement nothing more had been done by the plaintiffs till the issue of legal notice under Ex.A.3. Therefore, he would submit that the readiness and willingness was absent from the very date of the execution of the agreement of sale. That apart no action had been taken in pursuance of the agreement of sale.
16. He would further submit that the plaintiffs had not even taken steps to form the layout. To buttress his arguments with reference to the time being essence and readiness and willingness, the learned counsel would rely on the following Judgements: 13/42
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(i) 2011 (4) CTC 640 – Saradamani Kandappan & others Vs. S.Rajalakshmi & others.
(ii) 2016 (3) MWN (Civil) 667 – Rajammal and another Vs. M.Senbagam.
(iii)(1997) 3 SCC 1 – K.S.Vidyanadam and others Vs. Vairavan.
(iv)2015 (8) SCC 695 – Padmakumari & others Vs. Dasayyan & others.
(v)1993 (1) SCC 519 – Chand Rani Vs. Kamal Rani.
(vi)1967 SCR (1) 227 – Gomathinayagam Pillai and others Vs. Pallaiswami Nadar.
17. As regards possession, he would submit that possession was never handed over to the plaintiffs and the agreement does not speak about the same. On the contrary under the agreement, clause: 5, the plaintiffs granted permission to do such things as required to form a layout in the suit property. The Trial Court has in very clear terms 14/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 held that possession was not given to the plaintiffs and it was only a licence that was granted. Even the Appellate Court has held that there is nothing to show under the agreement of sale that the possession was handed over to the plaintiffs. Despite observing so the lower Appellate Court has proceeded to decree the suit as prayed for.
18. The learned counsel would submit that the Court has to consider the hardship since the prices of property has sky-rocketed. In the year 1995, the market value of the land in the vicinity was Rs.5,00,000/- which increased to a sum of Rs.10,00,000/- to 20,00,000/- in the year 2000 and as on date the property is worth over Crores of rupees. The plaintiffs by not paying the balance sale consideration had the advantage of retaining the same all these years. Had they made the payment as agreed upon, the 1st defendant could have purchased some other property.
19. That apart, it was the specific case of the 1st defendant that 15/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 they had to sell the property only on account of their facing certain financial difficulties. Therefore, it is the argument of the learned counsel that the Court should take note of the hardship that the defendant has faced. He would rely on explanation 2 to Section 20 (2) of the Specific Relief Act and explanation 2 to Section 16 (c) of the Specific Relief Act. The learned Counsel would rely on the Judgement of the Hon'ble Supreme Court reported in 2011 (4) CTC 640 – Saradamani Kandappan & others Vs. S.Rajalakshmi & others
20. He would therefore submit that the Appellate Court has been swayed by irrelevant issues while setting aside the Judgement and Decree of the Trial Court. He would therefore pray that the appeal be allowed and the Judgement and Decree of the Appellate Court be set aside.
21. Per contra, Mr.M.Sriram, learned counsel appearing on 16/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 behalf of the plaintiffs would submit that under the agreement there were counter obligations which had to be performed by the 1st defendant before demanding the balance of sale consideration. He would rely on clauses: 3 and 4, wherein, the 1st defendant was bound to provide the encumbrance certificate for a period of 14 years at their expense as also provide patta, Chitta, topo sketch, adangal etc., and also sign the necessary documents for the purpose of layout formation.
22. He would draw the Court's attention to the written statement of the 1st defendant particularly to paragraph nos.8 (a), 8 (b), 8 (c) and 8 (d), where the 1st defendant has herself listed out the obligations that were cast upon her under the agreement and which had not been completed by her. He would argue that in case of agreements relating to immovable properties time is never the essence of the contract. He would contend that the agreement subject matter of the suit was for the sale of immovable property and therefore time cannot be taken as 17/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 the essence of the contract. He would submit that the plaintiffs have proved their readiness and willingness by providing Ex.A.6 to A.19.
23. He would submit that the plaintiffs could not proceed further with the sale only on account of the disputes that had arisen between the 1st and 2nd defendants. He would state that the plaintiffs were all along ready and willing to proceed with the sale and it was only the dispute between the defendants 1 and 2 that has prevented them from doing so. He would therefore summarise that as far as Ex.A.3, Agreement was concerned time was not the essence of the contract and the plaintiffs were always ready and willing to perform their part of contract. He would rely on the following Judgements in support of his contentions:
(i)2020 SCC online 825 – Ferrodous Estates (Pvt.) Ltd Vs. P.Gopirathnam (Dead) and others.
(ii)CDJ 2010 MHC 1327 – B.Nemi Chand Jain and another Vs. G.Ravindran and others.
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(iii)2021 SCC online SC 300 – A.R.Madana Gopal etc Vs. Ramnath Publications Pvt. Ltd. and another.
(iv)(2000) 6 SCC 420 – Motilal Jain Vs. Ramdasi Devi (Smt) and others.
(v)(2015) 1 SCC 705 – Zarina Siddiqui Vs. A.Ramalingam alias R.Amarnathan.
Discussion:
24. The suit in question is one to specifically enforce the agreement dated 19.12.1992 entered into between the plaintiffs and the 1st defendant and her late husband, P.N.Balasubramaniam. The following conditions need to be extracted herein below in order to appreciate the issue on hand:
“2. !& ml;thd;!; bjhif U:gha; xU
yl;rk; eP';fyhf kPjKs;s ghf;fp fpua
bjhifia ,d;W Kjy; (6) MW khj
fhyf;bfLt[f;Fs; Kjy; ghu;l;of;F 2k; ghu;l;o
brYj;jp 2k; ghu;l;oapd; bgaupnyh my;yJ 2k;
19/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 ghu;l;o tpUk;g[k; ntW egu;fspd; bgau;fspnyh 2k; ghu;l;oapd; brhe;j brytpy; xU fpuakhfnth my;yJ gy fpua';fshfnth 2k; ghu;l;o fpuaKk; RthjPdKk; bra;J bfhs;s ntz;oaJ/ 3/fPH;fz;l g{kpf;F 14 tUl tpy;y';f rhd;wpjH; rk;ge;jg;gl;l gjpt[ mYtyfj;jpypUe;J Kjy; ghu;l;oapd; brhe;j brytpy; bgw;W 2k; ghu;l;oaplk; Kjy; ghu;l;o xg;gilf;f ntz;oaJld; !& fpua
fhyf;bfLt[ tiuf;Fk; fPH;fz;l g{kpf;Fz;lhd fe;jha tifawhf;fis Kjy; ghu;l;oapYs;s brhe;j brytpnyna brYj;jp bfhs;s ntz;oaJ/ 4/!& fpuaf; fhy bfLt[f;Fs; fPH;fz;l g{kpapy; Kjy; ghu;l;oapd; brhe;j brytpy;
mse;J mWjpf;fy; el;L bfhLf;fg;gl
ntz;oaJld; fPH;fz;l g{kpia bghWj;J 2k;
ghu;l;of;F njitg;gLk; rpl;lh ml';fy; nlhg;gh `bfr; Mfpatw;iwa[k; rk;ge;jg;gl;l rfy j!jhnt$%fisa[k; Kjy; ghu;l;oapd; brhe;j brytpy; bgw;W 2k; ghu;l;oaplk; bfhLg;gnjhL mg;U:tYf;fhf mDg;gg;gLk; tiu glj;jpYk;
tpz;zg;g';fspYk; ghu';fspYk; vt;tpj 20/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 kWg;gk [ pd;wp Kjy; ghu;l;oapdu; ifbahg;g';fs; bra;J bfhLf;fg;gl ntz;oaJ/ 5/,d;W Kjy; fPH;fz;l g{kpia 2k; ghu;l;oapd; brhe;j brytpy; ny?Mt[l;
rapl;Lfshf gpupf;fg;gLtjw;Fk; nymt[l; nuhL or;R nghd;wtifis mikf;ft[k; gpupf;fg;
kidg;gpupt[fis 2k; ghu;l;oapd; crpjk; nghy;
kw;wtu;fSf;F fpua vf;upbkd;l; bra;J
bfhLf;ft[k; vf;upbkd;l bjhiffs; bgwt[k;
,jd; K:yk; 2k; ghu;l;oapdUf;F Kjy;
ghu;l;oapdu; mDkjp bfhLf;fpwhu;fs;/
6/!& tpgug;go !& bfLt[f;Fs; 2k; ghu;l;o
fpuaKk; RthjPdKk; bra;J bfhs;s
jtwpdhYk; kWj;jhYk; 2k; ghu;l;o
brYj;jpa !& ml;thd;!; bjhifa[ld; fpuak;
nfhUk; cupikiaa[k; 2k; ghu;l;o ,He;Jtpl
ntz;oaJ/
7/!& tpgug;go !& bfLt[f;Fs; 2k;
ghu;l;of;F Kjy; ghu;l;oapdu; fpuaKk;
RthjPdKk; bra;J bfhLf;f jtwpdhYk;
kWj;jhYk; 2k; ghu;l;o brYj;jpa !&
ml;thd;!; bjhif eP';fyhf kPjKs;s ghf;fp
fpua bjhifia 2k; ghu;l;o nfhu;l;oy;
blghrpl; bra;J fl;lha up$p!;l;nuc&d; bra;J 21/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 bfhs;s ntz;oaJld; mjw;nfw;gLk;
epahakhd nfhu;l; brytpd';fisa[k; 2k;
ghu;l;oahy; nfhu;oy; blghrpl; bra;ag;gLk;
ghf;fp fpua bjhifapy; 2k; ghu;l;o gpoj;jk;
bra;J bfhs;s ntz;oaJ/
25. The following chronology would show the sequence of events that unfurled after the signing of the agreement dated 19.12.1992:
* 18.03.1993 - Further sum of Rs.25,000/- paid by the plaintiffs to the 1st defendant.
* 20.03.1993 - P.N.Balasubramaniam passes away. * 1994 – Suit for partition filed by the 2nd defendant, the mother of P.N.Balasubramaniam against the 1st defendant.
* 02.04.1995 – First legal notice issued by the plaintiffs to the defendants 1 and 2 calling upon them to express their readiness and willingness to receive the balance sale consideration within a week of receipt of the notice, failing which the plaintiffs had stated that they 22/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 would move the Court. Notice not received by the 1 st defendant and received by the 2nd defendant.
* 10.10.1995 – Suit O.S.No.1374 of 1995 filed by the plaintiffs before the Subordinate Judge, Coimbatore against the defendants 1 and 2.
* 19.01.2002 – The 2nd defendant dies. Her legal representatives brought on record as defendants 3 to 10 along with the 1st defendant.
* 20.07.2004 – Suit O.S.No.1374 of 1995 dismissed. *24.09.2007 - Appeal filed in A.S.No.148 of 2004 allowed and decree of the Trial Court set aside.
26. Over a period of time Judicial pronouncements have set out the principles that have to be taken into consideration while deciding a suit for specific performance. These are:-
(i)Whether the time is the essence of the contract?
(ii)Whether the plaintiffs have averred and proved 23/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 their readiness and willingness to proceed further with the contract (Section 16 (c) of the Specific Relief Act).
(iii)Being a discretionary relief whether the conduct of the plaintiffs enables them to have the decree for specific performance particularly when immense hardship is likely to be caused to the defendant by reason of the plaintiff having an unfair advantage.
(i)Time essence of the contract:
27. Let us now examine the case on hand on the above parameters. The case of the 1st defendant is that time was essentially the essence of this contract since the contract was a commercial one as the properties were sought to be purchased for forming a layout of house sites and selling it to third parties i.e., to commercially exploit the properties. This fact was also admitted by the 2nd plaintiff who had adduced evidence as P.W.1.
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28. Ex.A.1 agreement stipulated a time frame for its performance and time was the essence of the contract. That apart, the contract was a commercial one. The learned counsel would rely on the Judgement reported in AIR 1965 MAD 352 – Sriram Cotton Pressing Factory Vs. K.E.Narayanaswami Naidu, in support of the same to examine as to whether the time was the essence of the contract. It is necessary to once again refer to the terms of the agreement Ex.A.1. Clause : 2 there of provides that the balance sale consideration has to be paid within a period of six months from the date of the agreement, on such payment the vendor would execute sale deed either in the name of the plaintiffs or their nominee / nominees.
29. From a reading of clause: 6 of the agreement which provides that if within a specified period the plaintiffs do not take any steps to have the sale executed and possession taken then they would forfeit their right to claim execution of the sale deed and the advance 25/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 it is further fortified that time is the essence of the contract. This stipulation is once again reiterated in clause:7, where the reverse situation is taken into consideration. The Judgements in K.S.Vidyanadam and Saradamani Kandappan supra, reiterates the principle that considering steep rise in prices the time stipulated in the agreement would definitely form the essence of the contract.
30. In the Judgement reported in (1997) 3 SCC 1 – K.S.Vidyanadam and others Vs. Vairavan, the Hon'ble Supreme Court was considering a similar set of facts, wherein, the agreement of sale had provided six months time for completing the contract and only two and half years later that the plaintiff had issued the first notice to the counsel for the defendants therein. The Bench had considered the changing scenario relating to the value of lands being on the increase and how a delay would cause hardship to the defendants. In paragraph No.10 of the said Judgement the learned Judges had observed as follows:
26/42
https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 “It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not 27/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the Court by both Sections 10 and 20. As held by a Constitution Bench of this court in Chand Rani v. Kamal Rani, "it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the court may infer that it is to be performed in a reasonable time if the conditions are (evident)? : (1) From the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract".
In other words, the court should look at all the relevant circumstances including the time-limit(s) 28/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 specified in the agreement and determine whether its discretion to grant specific performance should be exercised.”
31. The Bench had observed that there was a total inaction on the part of the plaintiff in that case for over 2 ½ years which was in clear violation of the terms of the agreement which required him to pay the balance sale consideration and demand execution of the sale deed within a period of six months. The Bench observed that the delay had brought about the situation where it would become inequitable to grant the relief of Specific Performance to the plaintiff.
32.The Bench had further observed as follows in paragraph no.11:
“All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance 29/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract [relating to immovable properties].” Therefore, applying these principles to the instant case and also taking into account the agreement between the parties wherein they have made the time essence and the agreement being for commercial purpose, it is needless to state that time would definitely play a very important part of the contract and would be the essence of the contract.
33.The lower Appellate Court has treated Ex.A.1 agreement of sale as a regular agreement in respect of immovable properties ignoring the nature of the transaction. Not only has the plaintiffs not completed the sale within the stipulated time but the first communication calling upon the defendants to execute the sale deed has been made only twenty two months after the period of six months had expired and twenty eight months after the agreement of sale. 30/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 Therefore the Substantial Questions of law Nos. (c) and (d) are answered against the plaintiffs.
(ii)Readiness and Willingness:
34. Section 16 of the Specific Relief Act lists out the contingencies in which Specific Performance cannot be enforced in favour of person seeking such performance. We are particularly concerned with the provisions of Section 16 (c) of the Act and its explanation which reads as follows:
“(c)[Who fails to 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 the performance of which has been prevented or waived by the defendant.
Explanation.-For the purposes of clause ( c )
(i)Where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court;
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(ii)The plaintiff [must prove] performance of, or readiness and willingness to perform, the contract according to its true construction”.
Therefore a reading of the above Section clearly provides that if the person instituting a suit for Specific Performance does not make averments regarding his readiness and willingness and if he fails to prove such readiness and willingness then he is not entitled to the discretionary relief of the Specific Performance.
35. In the Judgement reported in 2010-5-L.W.673 – M/s.J.P.Builders & Another Vs. A.Ramadas Rao & another, the learned Judges were called upon to consider the readiness and willingness as enshrined in Section 16 (c) of the specific Relief Act. The Bench in paragraph no.9 of the said Judgement had stated as follows:
“9) The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contract. The distinction between "readiness" and 32/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.” The Bench brought out the difference in the terms readiness and willingness with the former relating to the financial capacity and the latter relating to the conduct of the plaintiff wanting performance.
36. In yet another Judgement reported in 2010 (10) SCC 512 – Man Kaur (Dead) By Lrs. Vs. Hartar Singh Sangha, the issue of readiness and willingness was also once again considered and the Bench had set out the ingredients which the plaintiff had to prove in order to succeed in a suit for Specific Performance. In paragraph no.17 of the Judgement the Bench had observed as follows:
“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 33/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 willing to perform his part of the obligations in terms of the contract.” The Bench observed that in order to prove readiness and willingness the plaintiff has to step into the box to give evidence for the same. The Bench had also observed that the averments relating to readiness and willingness was not a mathematical formula but required express words denoting readiness and willingness of the plaintiff to fulfil his part. From the provisions of Section 16 (c) it is very clear that the plaintiff should not only aver readiness and willingness but the averments should be proved by letting in evidence.
37. In the Judgement reported in 2011 (4) CTC 640 – Saradamani Kandappan & others Vs. S.Rajalakshmi & others, the Hon'ble Supreme Court once again was reiterating the principles regarding readiness and willingness.
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38. In the light of the above Judgements when we examine the facts on hand, particularly while considering the sequence of events, it can be seen that the agreement had specifically provided that the payment of balance sale consideration had to be completed within a period of six months from the date of the agreement. It is no doubt an admitted fact that one of the vendors had passed away. Although the plaintiffs were very much aware about his death no overt steps had been taken by the plaintiffs to go ahead with the execution of the sale deed immediately on hearing about the death. On the contrary within four months of the death of the said P.N.Balasubramaniam, his wife had produced a draft sale deed to the plaintiffs stating that her husband had bequeathed his share of the property on her and expressing her willingness to proceed with the same. In fact, reference to this is made by the plaintiffs themselves in their notice Ex.A.3.
39. Even thereafter, the plaintiffs have not proceeded to have 35/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 the sale completed. The explanation that is offered is that there was a dispute between the 1st and 2nd defendants and a suit had been filed. The suit for partition had been filed by the 2nd defendant only in the year 1994. There is absolutely no explanation for the silence between the date on which the performance of the agreement fell due and the filing of the suit. Even thereafter the first step taken by the plaintiffs to proceed with the sale was only under Ex.A.3 dated 02.04.1995 which is nearly two years and four months after the agreement had been executed.
40. The plaintiffs have not been able to prove their willingness to proceed with the sale deed and in fact the conduct of the plaintiffs appeared to be rather indifferent. Therefore, although the plaintiffs have been able to substantiate their wherewithal however the willingness is totally absent. Infact, post the death of P.N.Balasubramaniam the plaintiffs had not taken any active steps to get the sale deed executed but on the contrary they appeared to be 36/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 waiting for the 2nd defendant to initiate legal proceedings. Another argument that was put forward by the plaintiffs was that the 1st defendant had not performed her obligations under Clauses: 3 and 4. However, there is no notice or letter from the plaintiffs to the 1st defendant asking her to perform her obligations as set out in clauses:
3 and 4. In fact, no such letter was sent even during the life time of P.N.Balasubramaniam. Even in Ex.A.3 notice the plaintiffs have not even made a mention of the alleged failure on the part of the 1 st defendant to perform her obligation as set out in clauses: 3 and 4 of the agreement. Therefore, it is crystal clear that the plaintiffs have not proved their willingness to preform their part of the contract.
41. Section 16 (c) of the Specific Relief Act, clearly sets out that in order to succeed in a suit for specific performance the plaintiff has to prove both readiness and willingness and the failure to prove one of the ingredients would definitely dis-entitle the plaintiff to a decree for Specific Performance. Therefore, the Substantial Question 37/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 of Law No: (b) is answered against the plaintiffs.
(iii)Hardship caused to the party:
42. There has been an unexplained and inordinate delay on the part of the plaintiffs. The suit for specific performance is a discretionary relief. Section 20 (2) of the Specific Relief Act would provide that the cases where the Court may exercise its discretion not to grant the decree for Specific Performance. Section 20 (2) (b) would read as follows:
“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.”
43. The learned counsel for the 1st defendant would contend that when the agreement was entered into the value of the property was only a sum of Rs.1,50,000/-. In the year 1995 when the notice was issued the properties value had increased to a sum of Rs.5,00,000/- 38/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 per acre and in 2000 the property was selling between the rates Rs.10,00,000/- to Rs.20,00,000/- and as today it is over Rs.2,00,00,000/-. The plaintiffs have deprived the 1st defendant of balance sale consideration within the agreed time and they have been having advantage of having balance amount in their credit.
44. The Hon'ble Supreme Court in the case of K.S.Vidyanadam supra, had stated that the delay on the part of the plaintiff to institute the proceedings coupled with substantial rise in price has bought about a situation where it would be inequitable to give the relief of Specific Performance to the plaintiff. This Court is also inclined to follow the above dicta as there has been unexplained delay at the end of the plaintiffs. The plaintiffs have not taken any steps to enforce the agreement immediately on the death of P.N.Balasubramaniam and even after they had come to know about the suit instituted by the 2nd defendant for the partition.
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45. In fact, as already stated, a reading of the plaint would give an impression that the plaintiffs were waiting for the 2nd defendant to initiate the proceedings against the 1st defendant and to take advantage of such situation. It is well open to the plaintiffs to institute this very suit the minute they came to know that there was a rival claimant in respect of the share of P.N.Balasubramaniam. Another point in favour of the 1st defendant is that the properties which are the subject matter of the suit are two different properties and one of them, namely, B-Schedule property belongs exclusively to the 1st defendant. The plaintiffs had not deemed it fit to have the sale executed at least with reference to this unencumbered property. Therefore, the Substantial Question of Law no:(e) is answered in favour of the 1st defendant.
46. Both the parties have not addressed arguments with reference to Substantial Question of Law no:(a). As regards possession both the Courts below have held that the plaintiffs have 40/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 not proved their contention that possession was handed over to them at the time of signing Ex.A.1.
47. Consequently, the Second Appeal is allowed and the Judgement and Decree of the lower Appellate Court in A.S.No.148 of 2004 is set aside and the Judgement and Decree in O.S.No.1374 of 1995, Principal Subordinate Judge, Coimbatore is confirmed. Consequently, connected Miscellaneous Petition is also closed. No costs.
03.08.2021
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1.The Principal District Judge, Coimbatore.
2.The Principal Subordinate Judge, Coimbatore. 41/42 https://www.mhc.tn.gov.in/judis/ S.A.No.635 of 2008 P.T. ASHA. J, kan Pre-delivery Judgment in S.A.No.635 of 2008 03.08.2021 42/42 https://www.mhc.tn.gov.in/judis/