Telangana High Court
A.P.D.D.Coop F Ltd Hyd vs T.Chandrasekar Reddy And 6 Ors on 27 June, 2023
Author: P.Naveen Rao
Bench: P Naveen Rao, Nagesh Bheemapaka
HON'BLE SRI JUSTICE P.NAVEEN RAO
AND
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
CITY CIVIL COURT APPEAL NO.216 OF 2000
Date: 27.06.2023
Between:
The Andhra Pradesh Dairy Development Co-op.
Federation Limited, rep.by its General Manager,
having Regd. Office at Lalapet, Hyderabad.
.... Appellant
And
1.T.Chandrasekar Reddy s/o. Babu Reddy, 59 yrs.,
since died),
2. T.Rajagopala reddy s/o. Babu Reddy, 60 yrs.,
Business, 6-3-898, Somajiguda, Hyderabad
and others.
.... Respondents
This Court made the following:
PNR,J & NBK,J
CCCA No.216 of 2000
2
HON'BLE SRI JUSTICE P.NAVEEN RAO
AND
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
CITY CIVIL COURT APPEAL NO.216 OF 2000
JUDGMENT:(per Hon'ble Sri Justice P.Naveen Rao) The Plaintiffs agreed to sell to the defendant the plaint schedule property for ₹ 1,50,000/. The terms were reduced to writing as an agreement of sale dated 21.11.1978. A sum of ₹ 75,000/- was paid by the 1st defendant vide cheque dated 22.12.1978. Clause-4 of the agreement states that the sale transaction shall be completed within one year from the date of the agreement of sale after obtaining exemption from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 (for short, 'Act'). The Plaintiffs delivered the possession of the land to the 1st defendant on 21.11.1978.
2. Contending that permission to sell was not obtained from the authorities, the 1st defendant issued a legal notice dated 25.04.1983 to the plaintiffs, informing them of the decision to cancel the sale agreement dated 21.11.1978 and demanded refund of ₹ 75,000/- with interest, by agreeing and undertaking to deliver the possession of the suit schedule property. The plaintiffs sent a reply notice agreeing to refund ₹ 75,000/- only and not to pay interest, on delivery of possession of the suit schedule property. Vide latte dated 24.06.1983 the Plaintiffs reiterated their PNR,J & NBK,J CCCA No.216 of 2000 3 readiness to refund the advance in return of documents, title deeds and bank guarantee. To which the defendant replied on 28.07.1983, requesting the plaintiffs to send a Demand draft of ₹ 75,000/- in return for the documents. On 16.08.1983 the plaintiffs sent demand draft for ₹ 75,000/-. The 1st defendant returned the demand draft to the 1st plaintiff. The 1st defendant continued to be in possession of the property. The 1st defendant through a letter dated 26.10.1992, insisted execution of sale of a portion of the land which was the subject matter of agreement.
3. While so, O.S.No.65 of 1993 was instituted in the Court of IV Senior Civil Judge, City Civil court at Hyderabad, praying to grant decree that the possession of the plaint schedule property be delivered to the plaintiffs by dispossessing the 1st defendant there from and that the 1st defendant be ordered to pay mesne profits @ ₹ 5,000/- per month from the date of suit till restoration of possession to the plaintiffs.
4. In the written statement, the first Defendant asserted that the first defendant had purchased the suit schedule property under the agreement of sale and possession was delivered. The notice issued by the first defendant is only an offer for cancellation of the sale agreement subject to fulfilment of conditions mentioned therein. As the defendant has not accepted the terms of notice in toto the cancellation of agreement of sale has not come into effect. It was further asserted that as the land is governed by the Act, the Government is a necessary party. It is further PNR,J & NBK,J CCCA No.216 of 2000 4 asserted that as the Urban Land Ceiling authority has held that the plaintiffs are in possession of excess land over and above the ceiling limit the plaintiffs are not entitled to recovery of possession.
5. In the written statement filed by the second defendant, it is asserted that excessive land was found under the Act. G.O.s were issued in favour of 1st and 4th plaintiffs granting relaxation of the provisions of the Act to the extent mentioned therein. The Govt. has issued G.O. allotting the excess land to different organisations. The agreement is void and there are no merits in the suit.
6. On due consideration of respective pleadings, the trial court framed the following issues:
(i) Whether the plaintiffs are entitled for the recovery of possession of the suit property?
(ii) Whether the plaintiffs are entitled for the mesne profits prayed for?
(iii) To what relief?
Trial Court framed additional issues on 15.06.1998:
(i) Have not plaintiffs forfeited their title to their shares of the suit land by virtue of proceedings under the U.L.C. Act 1976 and is the suit not to be decreed and if so to what extent?
(ii) Is not A.P. State Government which has acquired title to a part of the suit property be necessary party to the suit?
(iii) To what relief?
PNR,J & NBK,J CCCA No.216 of 2000 5
7. On issue no.1, the trial Court held that the Plaintiffs have amply established their title. Further the evidence placed before the court shows that the agreement was cancelled. It is further observed that the Defendants have not questioned when the bank guarantee was not renewed by the plaintiffs. It is held that the plaintiffs are entitled to recovery of possession of the suit property. However, as the proceedings of the Urban Land Ceiling Act were challenged, the plaintiffs are entitled to the recovery of the suit land, subject to the Orders on the Writ Petition before the Hon'ble High Court.
8. On issue no.2, the trial Court observed that though the Plaintiffs claimed mesne profits, there is no clinching evidence that they sustained damages even because the possession was with the 1st defendant declined to grant mesne profits.
9. According to the trial Court, Notice dated 25.04.1983 (Ex.A2) shows that 1st defendant itself had cancelled the agreement and asked for the refund. Therefore, the 1st defendant cannot say that no cancellation was done by virtue of the notice. It is specifically mentioned in Ex.A4 that the Bank guarantee was obtained for the repayment of the advance amount, in the event of failure of obtaining permission from Urban Land Ceiling Authority within one year. In Clause 5 of the sale agreement, it is specifically stated that the permission must be obtained within one year.
PNR,J & NBK,J CCCA No.216 of 2000 6 There is no paper filed by the 1st defendant to prove its readiness or willingness to perform the contract. The 1st defendant has not issued any notice to the plaintiffs for specific performance. The 1st defendant has not taken any action when the Plaintiffs caused breach by invoking the bank guarantee and informed the same by addressing a letter Ex.A5. There is no correspondence to show why the defendants have returned the DD of ₹ 75,000/-.
10. The present appeal is filed by the Appellant/Defendant No.1 against the Judgement and decree dated 25.07.2000 in O.S.No.65 of 1993 on the file of the Court of the IV Senior Civil Judge, City Civil Court, Hyderabad.
11. We have heard learned Advocate General for the appellant and learned senior counsel Sri S.Niranjan Reddy for respondents/plaintiffs.
12. The submissions of learned Advocate General:
12.1. He would submit that the offer made for cancellation of agreement of sale was a composite offer to cancel the agreement of sale on condition to return the advance paid along with interest @ 12% per annum. The trial Court grossly erred in holding that the demand for payment of 12% interest on the advance paid is not a condition precedent for cancellation of the agreement for sale and is not a composite offer. He would submit that the trial Court grossly erred in holding that the agreement of sale was unilaterally and voluntarily cancelled by the 1st defendant.
PNR,J & NBK,J CCCA No.216 of 2000 7 12.2. He would submit that the trial Court erred in holding that the Plaintiffs are the absolute owners of the property, whereas 2,240.46 sq.mts. of land has vested in the Government as per the provisions of the Act.
12.3. He would further submit that G.Os. dated 28.02.1981 and 23.12.1991 issued in favour of Plaintiffs 1 and 4 exempting certain extent of properties from the purview of the Act were not made known to either the first Defendant or to the Hon'ble Civil Court. This amounts to suppression of crucial fact.
12.4. He would point out inconsistent findings by the trial Court on readiness to perform the contract by the defendants. At one breath the trial court observed that the first defendant did not file any paper to show its readiness to perform the contract, but the same is contrary to the last sentence of paragraph-46 of the judgement, wherein it is mentioned that the 1st defendant addressed a letter under Ex.A6 showing their readiness to pay the balance sale consideration.
12.5. He would submit that the trial court erred in holding that the 1stdefendant failed to seek specific performance and hence the plaintiffs are entitled to recovery of possession.
PNR,J & NBK,J CCCA No.216 of 2000 8 12.6. The trial Court erred in not considering the decisions relied upon by the 1st defendant on erroneous ground that the facts are not relevant (Paragraphs-86 to 98 of the judgement) and did not even refer to the citations filed by the appellant.
12.7. He would submit that the possession was vested in the 1st defendant on completed sale transaction.
12.8. He would further submit that as the offer made by the 1st defendant to refund the advance along with interest in Ex.A3 was not accepted by the plaintiffs cancellation of agreement of sale has not come into effect. 12.9. He would submit that there was total non-application of mind by the trial Court. It has recorded inconsistent and contradictory findings. 12.10. He would submit that Court below failed to apply the principles governed by the provisions of the Contract Act and Specific relief Act to the facts of the case.
12.11. Learned Advocate General would contend that there are three facets to the legality of the judgment of trial Court. He would submit that the trial Court has not considered the scope of Section 53-A of Transfer of Property Act. It is essential to find out whether the transferee has performed or is willing to perform his part of the contract. The appellant PNR,J & NBK,J CCCA No.216 of 2000 9 was always ready and willing to perform his part. Further, Ex.A1 has the facet of concluded contract but was not even considered by the trial Court. Further, offer to cancel the agreement was conditional. If the terms and conditions of the offer are not accepted by the plaintiffs, the question of termination of agreement of sale does not arise as conditions precedent to termination were not fulfilled.
12.12. Learned Advocate General placed reliance on following decisions:
i) M/s.Surat Besan & Rice Mills v. Food Corporation of India1;
ii) General Assurance Society Ltd. V. Life Insurance Corporation of India2;
iii) Pipraich Sugar Mills Ltd., v. Pipraich Sugar Mills Mazdoor Union3;
iv) Shrimant Shamrao Suryavanshi and another v. Pralhad Bhairoba Suryavanshi (dead) by LRs., and others4.
13. Learned senior counsel Sri S.Niranjan Reddy appearing for respondents 1 to 7 made following submissions:
13.1. He would submit that Ex.A2 has two limbs, (1) cancellation and (2) compensation. Unilateral decision to terminate the agreement of sale referable to breach of contract is not a conditional offer and such termination is permissible and that the cancellation has come into effect 1 1988 (4) Delhi Reported Judgments 176 2 (1964) 5 SCR 125 3 1956 SCR 872 4 (2002) 3 SCC 676 PNR,J & NBK,J CCCA No.216 of 2000 10 without regard to compensation on such cancellation. He would submit that the dispute was only for payment of interest for ₹ 75,000/-. This issue is independent to cancellation of agreement.
13.2. He would submit that Section 53A of Transfer of Property Act has no application to the case. It concerns past performance of contract not being revoked. He would further submit that this plea was not raised before the trial Court.
13.3. He would submit that if Section 53-A is relied on onus shifts to appellant to show readiness and willingness.
13.4. By relying on the decision of Madras High Court in Y.A.Kader v. Muthulakshmi Ammal (died) and others [AIR 1992 Mad 208] and the decision of Bombay High Court in Gangadhar Vittal Kale Vasrani vs. Shyamlal Bhikchand Rathod ( 2008 SCC Online Bom 1126], he would submit that Section 53-A is akin to Section 16 of the Specific Relief Act. 13.5. By referring to Ex.B3, he would submit deviating from terms of contract on its own appellant asked Government to relax ULC Act provisions.
13.6. He would submit that appellant cannot claim equitable relief in view of long passive conduct and not showing readiness and willingness to perform his part of terms of agreement.
PNR,J & NBK,J CCCA No.216 of 2000 11 13.7. He would submit that allowing of appeal results in absurdity inasmuch as the appellant would continue to retain possession without authority of law.
13.8. The principle of long possession also cannot come to the aid of appellant, as such possession is litigious possession. 13.9. He would submit that the appellant did not come forward to pay balance sale consideration and willingness to perform his part of contract. As held by Madras High Court in Chinnaraj v. Sheik Davood Nachiar and others [2002(4) CTC 478], readiness and willingness must be absolute and unconditional.
13.10. He would submit that the appellant has not filed suit for specific performance if he was ready and willing to perform his part of contract. It has not made any counter-claim. It has not offered even in the Court to pay the balance sale consideration.
13.11. He would submit that the last correspondence was on 10.12.1983 (Ex.A5). From 1983 to 26.10.1992, there was absolute silence. On 18.01.1993 suit was filed. In November, 1993, written statement was filed by appellant. At that stage also, appellant was not alert in seeking enforcement of agreement of sale, if what is urged by appellant is true.
PNR,J & NBK,J CCCA No.216 of 2000 12 13.12. Learned senior counsel contended that in the present case, even though the State was impleaded as Defendant No.2 in the suit, no appeal has been preferred by the State against the judgement. Protection under Section 53A is based on the doctrine of part performance developed by equity courts and as such, the court ought to balance the interest of both the parties in order to achieve just and equitable outcome. 13.12. The Appellant has been in possession of the schedule property since 1978 without paying any rents or amount to the respondents, and without any title to the same. Appellant has enjoyed the litigious property since 1983, i.e. for more than 40 years, without expressing any readiness or willingness to perform its part of the contract. 13.13. Learned senior counsel placed reliance on following decisions:
i) Vasanthi v. Venugopal (dead) through Legal Representatives5;
ii) Y.A.Kader v. Muthulakshmi Ammal (died) and others6;
iii) Chinnaraj v. Sheik Davood Nachiar and others7; and
iv) Legal Representative of late Shri Narendra Singh Bhati v. Legal representatives of Late Shri Fateh Singh and others8
14. In reply, learned Advocate General would submit that scope of Section 53A was not considered by trial court. Section 53A completely 5 (2017) 4 SCC 723 6 1992 (2) L.W. Madras High court 7 2002 (4) CTC 478 8 2016 (4) RLW 2844 (Raj.) PNR,J & NBK,J CCCA No.216 of 2000 13 attracts to the case. The Court can issue directions to register sale deed. Hon'ble Supreme Court gave such direction to register in a suit for possession.
15. Following issues arise for consideration:
i) Whether the Ex.A2 notice is a composite offer to cancel the agreement of sale (Ex.A1) on refund of ₹ 75,000/- along with 12% interest from the date of payment of advance till refund ?
ii) Whether the trial Court erred in granting decree in favour of
plaintiffs? and
iii) What relief?
ISSUE NO.1:
16. The undisputed facts are on 27.11.1978 plaintiffs and 1st defendant entered into agreement of sale (Ex.A1). The plaintiffs offered to sell 5240 square yards of land in Sy.No.Part of 9 and 10 of Somajiguda village and the 1st defendant agreed to purchase. The sale consideration was ₹ 1,50,000/-. On entering into agreement ₹ 75,000/- was paid as advance.
Balance sale consideration was to be paid before registering authorities at the time of registration of the sale deed. The vacant possession of the suit land was delivered to the 1st defendant and 1st defendant continues to be in possession.
PNR,J & NBK,J CCCA No.216 of 2000 14
17. On 25.04.1983, legal notice (Ex.A2) was issued on behalf of the 1st defendant informing the plaintiffs mentioned therein that their client is compelled to cancel the agreement and requested them to pay back the part consideration of ₹ 75,000/- paid by the 1st defendant when the agreement of sale was entered into with interest at the rate of 12% per annum.
18. While according to plaintiffs the agreement of sale stood terminated by virtue of Ex.A2 legal notice, the 1st defendant contended that the cancellation was conditional on payment of ₹ 75,000/- with 12% interest and as plaintiffs denied to pay interest, the cancellation has not come into effect. The crucial documents to test the respective submissions are Exs.A1 and A2.
19. The suit schedule land was governed by the Act. To transact on the said land, necessary permissions from the competent authority were required. Taking due note of this requirement, terms are incorporated in the agreement of sale-Ex.A1. Vendors undertook to obtain permissions from the competent authority and registration of sale deed would take place after obtaining permissions. As per clause-2 of Ex.A1, advance amount of ₹ 75,000/- was paid, which comes to 50% of the agreed amount and balance amount was required to be paid by the vendee before the registering authority at the time of registration of the sale deed. It is thus PNR,J & NBK,J CCCA No.216 of 2000 15 clear that until and unless the appellant is informed by the vendors that appropriate permissions are obtained under the Act, sale deed is drafted and presented before the registering authority, appellant was not required to inform his readiness and willingness to pay the balance sale consideration. This aspect was not appreciated by the trial Court and the trial Court erred in observing that appellant never showed readiness and willingness to perform its part earlier and even during the hearing of the suit.
20. Clause-4 of Ex.A1 requires the vendors to furnish bank guarantee in favour of the appellant for a sum of ₹ 75,000/-, which would serve as a guarantee for the vendee for repayment of the amounts paid by the vendors, together with all losses, damages, inconveniences suffered by the vendees on failure to conclude the sale deed in favour of the vendees within a period of one year from the date of the agreement. The bank guarantee was to be in force, irrevocable, till the discharge of the obligations by the vendors as per the agreement. Therefore, the bank guarantee was only to safeguard the interest of the vendee to realize the principal amount in case the vendors failed to conclude the deed of sale within a period of one year. Thus, even though the appropriate permissions were not obtained within one year from the date of execution of Ex.A1 and though option was available to the appellant to en-cash the bank guarantee, the appellant did not choose to do so. Be PNR,J & NBK,J CCCA No.216 of 2000 16 that as it may, this particular clause is only intended to protect the interest of the appellant in case of delay in securing appropriate permissions to encash the Bank Guarantee, but has no relevance to the main terms of the agreement. Thus, merely because the bank guarantee was not renewed later does not invalidate the agreement per se. The learned trial Court grossly erred in placing heavy reliance on the fact of non-renewal of bank guarantee.
21. The crucial document on which extensive submissions were made before the trial Court and also before this Court is on Ex.A2. By Ex.A2 legal notice issued by the counsel on behalf of the appellant, the notice expressed displeasure against the vendors in not taking steps for obtaining permissions from the Urban Land Ceiling Authorities as undertaken in Ex.A1 agreement and, therefore, informs the vendors that the client was compelled to cancel the said document and requested to pay back the part consideration of ₹ 75,000/- along with interest at the rate of 12% per annum from the date of the payment as losses, damages and inconveniences suffered by the client because of failure on their part to execute the registered sale deed in client's favour within the stipulated period after obtaining permissions from the competent authority. The notice also undertakes to handover the physical possession on payment of the amount with interest.
PNR,J & NBK,J CCCA No.216 of 2000 17
22. The Trial Court has divided content of legal notice-Ex.A2 into two parts. The Trial Court separated the term cancellation of agreement of sale from that of refund of part sale consideration with interest. According to the trial Court, the payment of consideration with interest is separable from the decision to cancel the agreement and, therefore, cancellation of agreement of sale has already come into force from the date of issuance of the said notice.
23. This view of the learned trial Court was based on the assumption that there are two parts in the legal notice-Ex.A2, noted above and that they are separable.
24. In order to understand the true intent of the vendee/appellant, it is necessary to look back to the terms of the agreement and the time lag that consumed from the date of the agreement to the date of Ex.A2-notice. As per the terms of the agreement-Ex.A1, the vendors were obligated to obtain appropriate permissions from the competent authority immediately and then proceed for registration of the sale deed. But, there was no response on steps taken by the vendors to obtain permissions till the legal notice was issued. Therefore, holding that inordinate delay was consumed in securing permissions legal notice-Ex.A2 was issued. Having regard to this background, the entire paragraph-2 of Ex.A2 has to be read together PNR,J & NBK,J CCCA No.216 of 2000 18 cumulatively and sentences cannot be split and read in isolation to give different meaning than the intendment of the appellant.
25. Paragraph-2 of the notice Ex.A2 reads as under:
"I am to state that my client entered into an agreement dated 21st November, 1978 to purchase a land admeasuring 5240 square yards in Sy.Nos.part of 9 and 10, Somajiguda, Hyderabad Urban Taluk for a consideration of ₹ 1,50,000/- out of which 50% i.e., ₹ 75,000/- was paid and possession was delivered to my client as part performance of the agreement of sale. As per the conditions of the agreement, you have undertaken to obtain the permission from the competent authority under the Andhra Pradesh Urban Land Ceiling Act to sell away the land at your own costs within a period of one year from the date of the said agreement. But, you failed to obtain the said permission and within a stipulated time even after a lapse of 4½ years. Hence, my client is compelled to cancel the said agreement and request you to pay back the part consideration of ₹ 75,000/- paid by my client at the time of agreement with interest at the rate of 12% per annum from the date of payment as a loss damages and conveniences suffered by my client as a consequence of failure on your part to execute a registered sale deed in my client's favour within the stipulated period after obtaining permission from the competent authority under Andhra Pradesh Urban Land Ceiling Act and on payment of such amount, my client undertakes to deliver the vacant possession to you on such day and time given by you."
26. The text of the above paragraph has to be understood in the normal terms of an agreement of sale when a vendee expresses his willingness to buy a property and pays advance sale consideration and certain terms are recorded in the agreement of sale for performance of obligations by the vendors. In the instant case, there was no fault on the part of the PNR,J & NBK,J CCCA No.216 of 2000 19 appellant in not concluding the agreement and execution of the sale deed. The vendors failed in securing appropriate permissions from the competent authority and delay in execution of sale deed was attributable entirely to the vendors. In such a case, no vendee would be willing to cancel the agreement without claiming compensation for the delay in execution of the sale deed in addition to refund of advance amount paid. Therefore, the terms of legal notice have to be understood in the background facts leading to such notice. The cancellation part of the agreement of sale cannot be separated from demand by the vendee to pay back the principal advance amount paid along with interest. As can be seen from the extracted portion, the notice clearly states that on account of failure to execute the registered sale deed within the stipulated period, the client suffered losses, damages and inconveniences and, therefore, the notice demands payment of interest on the part sale consideration paid by the client. Thus, the condition of payment of principal amount along with interest is integral to the offer to cancel the agreement of sale.
27. An issue of identical nature was considered by the Hon'ble Supreme Court in General Assurance Society Ltd., (supra). The facts in the said case are, the appellant is a company duly incorporated under the Indian Companies Act, 1882, and the Insurance Act, 1938. Prior to December 1957, its registered office was at Ajmer, but now it is in Calcutta. It was a composite insurer carrying on life insurance and general insurance PNR,J & NBK,J CCCA No.216 of 2000 20 business. The Act was passed to provide for the nationalization of life insurance business in India by transferring all such business to a Corporation established for the purpose. The Act came into force on July 1, 1956. On September 1, 1956, under Section 3 of the Act the Central Government established a Corporation called the Life Insurance Corporation of India. Under Section 7 of the Act on the appointed day, which was September 1, 1956, all the assets and liabilities appertaining to the controlled business of all insurers were statutorily transferred to and vested in the Corporation. Accordingly, the controlled business of the appellant as defined under the Act i.e. all the business pertaining to its life insurance business, was transferred to and vested in the Corporation. Thereafter disputes arose between the appellant and the respondent in the matter of ascertainment of the compensation payable to the appellant and in respect of incidental and consequential matters thereto. The respondent wrote a letter to the appellant informing it that it had referred the dispute to the Tribunal. The appellant, against the order of the Tribunal contended that: (1) the Tribunal had no jurisdiction to decide on the question of the capital allocable to the controlled business as there was no dispute thereto between the parties and the said question therefore, not referred to it; (2) the liability of the appellant-Company for unclaimed dividends and assets equivalent to the liability were not transferred to and vested in the Corporation under Section 7(1) of the Act; and (3) the appellant would be PNR,J & NBK,J CCCA No.216 of 2000 21 entitled to interest on the amount of compensation payable to it and the Tribunal had jurisdiction to award the same.
27.1. The Hon'ble Supreme Court held as under:
"4. On the first question the learned counsel took us through the correspondence that passed between the parties and the pleadings before the Tribunal, and contended that the said correspondence, pleadings, and the issues disclosed that there was no dispute between the parties in respect of the capital allocable to the controlled business and therefore, the Tribunal went wrong in deducting under that head a higher amount than was agreed upon between the parties. As the answer to this argument mainly depends upon the said correspondence and the pleadings, we shall briefly scrutinize them. On May 21, 1957, the respondent offered to the appellant to pay a sum of ₹ 3,30,023 in full satisfaction of the compensation payable to the appellant for the acquisition of its controlled business under the Act, and to set off against the said sum an amount of Rs 1,71,365, being the part of the paid-up capital of the appellant Company and assets representing such part, which had been allocated to the controlled business of the appellant-Company in accordance with Rule 18 of the Life Insurance Corporation Rules, 1956, made under the Act. The letter concluded thus:
"As the aforesaid assets have not yet been transferred to the Corporation the said amount of Rs 1,71,365 will be set off against, and form a deduction from, the amount of compensation payable to your Company."
The offer was couched in clear and unambiguous terms. It was a composite offer. The letter could not be construed to contain two different matters, one an offer of compensation and the other a demand for payment of the amount due to the respondent in respect of the paidup capital allocable to the controlled business. On the other hand, in express terms the offer was for payment of compensation after setting off the amount due to the respondent. On August 9, 1957, the appellant wrote a letter in reply to the respondent's. Therein an attempt was made to split up the offer. The appellant stated that the amount of compensation offered in the letter, namely, the sum of Rs 3,30,023 was not acceptable to it. In regard to the amount of capital allocated by the Company to the controlled business, it stated that the assets worth Rs 1,35,919 has already been transferred to the respondent and that having regard to the amount claimed by the respondent under that head, only a sum of Rs 35,446 remained to be transferred to the Corporation by it. It asked that the said amount might be deducted from the amount of compensation that might be ordered and decreed to be paid to it by the Tribunal. It would be seen from this letter that the appellant accepted a part of the offer and rejected the rest. On August 20, 1957, the respondent replied to the appellant that as its offer was not accepted, it had sent the necessary papers to the Tribunal. On PNR,J & NBK,J CCCA No.216 of 2000 22 August 22, 1957, the appellant received a notice from the Tribunal. The preamble to that notice read:
"Whereas you have not accepted the amount determined by the Corporation and offered in full settlement of the compensation payable to you under the Act and whereas you have requested the Corporation to have the matter referred to the Tribunal for decision and whereas the Corporation has so referred the matter."
This clearly shows that the dispute before the Tribunal arose as the appellant did not accept the amount determined by the Corporation and offered in full settlement of the compensation payable to the appellant under the Act. It does not indicate that the accepted part of the offer was considered to be a closed matter between the parties and the disputed part only was put in issue. On September 13, 1957, the appellant wrote a letter to the respondent requesting it to pay the amount of compensation offered by it subject to adjustment on the basis of the decision to be given by the Tribunal. It also requested the respondent to supply to it a copy of the calculation sheet to show how the amount of compensation offered by it had been arrived at. On the same day, the respondent sent a copy of the said calculation sheet, which clearly showed not only the amount of compensation payable but also the amount of paid-up capital allocable to the controlled business deductible therefrom. On September 17, 1957, the respondent made it clear to the appellant that if the appellant agreed to accept the amount offered by it in full satisfaction of the compensation payable to the appellant under the Act, the respondent could make payment of the said amount to it. It is, therefore, clear that the dispute between the parties related to the composite offer made by the respondent i.e., the compensation payable as well as the set off of the amount due to the respondent calculated under Rule 18 of the Rules made under the Act.
5. That this was the dispute is also apparent from the pleadings before the Tribunal. On October 10, 1957, the appellant filed a statement before the Tribunal and in para 4 thereof, the contents of the letter written by the respondent on May 21, 1957 were extracted. How the appellant understood the scope of the offer is clear from the following extract from the said paragraph:
"By and under the said letter the defendant inter alia stated that part of the paid up capital of the claimant, and assets representing such part, which had been allocated to the controlled business of the claimant in accordance with Rule 18 of the Life Insurance Corporation Rules, 1956, amounted to Rs 1,71,365 and that as the aforesaid assets had not till then been transferred to the defendant, the said amount of Rs 1,71,365 would be set off against, and from a deduction from the amount of compensation payable to the claimant."
The appellant, therefore, understood the offer as a composite one. In para 5 thereof, the appellant gave the contents of its reply. On November 7, 1957, the respondent filed a statement before the Tribunal and in para 3 thereof it reiterated its offer of compensation of Rs 3300,23 with a claim for set off on a calculation made in accordance with Rule 18 of the Rules.
PNR,J & NBK,J CCCA No.216 of 2000 23 Throughout the correspondence and in the pleadings the respondent was consistently standing by the composite offer. It did not, either expressly or by necessary implication, accept the attempt made by the appellant to split up the said offer. When one party makes a composite offer, each part thereof being dependent on the other, the other party cannot by accepting a part of the offer, compel the other to confine its dispute only to that part not accepted, unless the party offering the composite offer agrees to that course. In this case not only there was no such agreement between the parties, but the respondent was throughout insisting upon the acceptance by the appellant of the entire offer in full settlement of the appellant's claim against the respondent." (emphasis supplied)
28. In M/s Suraj Besan & Rice Mills (supra) also, similar issue was considered by the Hon'ble Supreme Court. The facts in the said case are, the appellant firm is registered with defendant vide Registration No. 25/82 dated January 27, 1982. It is alleged that under this registration, the annual requirement of the appellant has been assessed at 15,000 quintals and the appellant can quote only for this registered quantity. Regional Office of defendant at Chandigarh invited tenders for the purchase and removal of damaged foodgrains declared fit for cattle/poultry feed etc, Plaintiff submitted their tenders but the tender was not signed by all the partners of plaintiff firm. It was alleged that tender of plaintiff was neither valid nor the same could be deemed as valid for acceptance beyond the annual assessed capacity of 1500 M.Ts of stocks. Plaintiff vide letter dated July 8, 1983 informed defendant that the offer was for 1500 M.Ts of stocks and not over and above specific quantity. The tender of plaintiff was accepted. It is alleged in the plaint that plaintiff's offer was only for 1500 M.Ts of stocks of damaged paddy but to the surprise of plaintiff, telegram dated July 22, 1983, placed an order for stock of about 6200 M.Ts of PNR,J & NBK,J CCCA No.216 of 2000 24 damaged paddy for purchase. According to plaintiff, the aforesaid acceptance did not bring about a valid, legal and binding contract between the parties to purchase 6200 M.Ts of stock. In any event, it is alleged that aforesaid acceptance was a counter offer as it did not conform to the offer of the plaintiff to the extent of 1500 M.Ts. The defendant alleged that tender submitted by plaintiff was valid. Plaintiff was issued acceptance telegram on July 22, 1983 for 6,176.790 M.Ts quantity of food grains. Any modification to the original offer made by plaintiff has no relevance and same is not binding on defendant. Plaintiff is prohibited to amend or modify the offer in terms of tender notice dated June 28, 1983. According to defendant, Clause 5 of tender notice prohibits any amendment to the original offer by the plaintiff. It is alleged that offer of the plaintiff was open for two months i.e. upto August 29, 1983. As such, there came into existence legal, valid and binding agreement between the parties. 28.1. Hon'ble Supreme Court held:
"12. The second contention of Mr. Rohtagi that the acceptance by defendant of part of the original offer amounted to a counter offer has a force. It is admitted case that plaintiff has quoted for the purchase of 13,576.884 M.Ts of damaged paddy. Defendant, however, placed order by telegram dated July 22, 1983 for 6,176.790 M.Ts. The acceptance under law should be absolute and unconditional. In the present case it was neither absolute nor unconditional because defendant accepted only part of the offer of the plaintiff by placing an order for 6,176.790 M.Ts. Under the circumstances, issue No. 1 is decided in favour of plaintiff and against the defendant."
PNR,J & NBK,J CCCA No.216 of 2000 25
29. By Ex.A3 reply, the vendors responded to the Ex.A2-legal notice by stating that they are willing to refund the advance amount paid, but are not willing to pay interest as the vendee is in possession of the suit schedule property and in fact, the vendors are entitled to rents and profits from the property and, therefore, no way liable to pay interest on ₹ 75,000/-.
30. In other words, Ex.A2-legal notice is a composite offer to cancel the agreement of sale subject to refund of the advance amount along with interest and Ex.A3 is a refusal to agree to pay interest component of the demand and only agreed for payment of the principal amount for the reasons assigned therein. It also amounts to counter offer. As the offer of vendee was not accepted it does not amount to conclusion of transaction and the issue reverts back to Ex.A1 stage. When a composite offer was made by appellant each part being dependant on other part, by accepting a part of offer to refund advance paid by the appellant, plaintiffs cannot compel the appellant to confine only to cancellation of agreement.
31. It is also appropriate to note that vide letter dated 16.08.1983, one of the vendors Sri T.Chandrasekhar Reddy enclosed a Demand Draft for ₹ 75,000/- and requested the appellant to accept the same, but the PNR,J & NBK,J CCCA No.216 of 2000 26 appellant refused to receive the DD and same was returned. This clearly shows that the appellant was not willing to close the matter unless interest was also paid and that it is a composite offer. Vide another letter dated 10.12.1983, T.Chandrasekhar Reddy acknowledged the return of DD with reference to the notice issued on 25.03.1983 and on 22.05.1983, and holds that agreement of sale was rescinded, which was accepted by the vendors and, therefore, there is no need to renew the bank guarantee and requested to hand over the possession. It is clear that the appellant did not agree for the demand to hand over possession of the property as the vendors refused to pay interest on advance amount. After 10.12.1983, there was complete hiatus till 26.10.1992, by which letter the officer of the appellant requested T.Chandrasekhar Reddy to register the land, on which exemption was obtained from the Government by virtue of G.O.Ms.No.329 Revenue (UC.II) Department, dated 28.02.1981 and G.O.Ms.No.1158 Revenue (UC-II) Department Dated 23.12.1991 pertaining to Smt. T.Rukminamma and Sri T.Chandrasekhar Reddy in favour of Managing Director of the appellant as per the agreement. The hiatus is equally on both sides, whereas trial Court puts the blame only on appellant.
32. It is significant to notice that this letter was issued after Government passed orders on 23.12.1991.
PNR,J & NBK,J CCCA No.216 of 2000 27
33. At this stage, it is also appropriate to note that on 28.02.1981 G.O.Ms.No.329 was issued exempting 4933 square yards of vacant land in Sy.Nos.129/24 and 129/25 of Shaikpet village and vacate land in Sy.Nos.9 and 10 of Somajiguda, Hyderabad exercising the powers conferred by clause (b) of sub-section (1) of Section 20 of the Act, with condition that Sri T.Babu Reddy should not sub-divide or sell the said surplus land without prior permission of the government. Sri T.Babu Reddy is the husband of the T.Rukminamma, who is 4th plaintiff. In the deposition, P.W.1 admits that exemption was granted in favour of plaintiff no.4 and as there was a condition imposed prohibiting plaintiff no.4 from alienating her share the same fact was not informed to the appellant. For the reasons best known, the plaintiffs kept quiet on exemption granted in the year 1981 and not informed the plaintiff at any point of time and even in reply to the legal notice-Ex.A2. They have also not obtained permission from the government to sell the land in issue.
34. If the fact of such exemption granted to 4th plaintiff was informed to the appellant, it can be safely assumed that, the appellant would not have taken recourse to cancellation of agreement as sought to be enforced on it. As can be seen from Ex.A2 notice the reason assigned to take extreme course was that plaintiffs failed to obtain exemption for such a long time. Keeping quiet on the alleged exemption granted to them would amount to clear suppression of material fact and the basis for taking recourse to PNR,J & NBK,J CCCA No.216 of 2000 28 issue Ex.A2 legal notice proposing to cancel the agreement of sale would wipe out. Having suppressed crucial fact plaintiffs cannot plead ignorance and rely on a sentence in Ex.A2 legal notice to urge the agreement of sale is rescinded by the appellant. In view of suppression the terms of Ex.A2 cannot be put against the appellant.
35. It is also appropriate to note that what is restrained by G.O.Ms.No.329 dated 28.02.1981 is only that no sub-division should take place or not to sell the surplus land without prior permission of the Government. Therefore the plaintiffs could have executed sale deed by obtaining permission from the Government. It is not the case of the plaintiffs that they have applied for permission to Government and Government declined the permission.
36. In the peculiar facts of this case, the notice dated 25.04.1983 Ex.A2 cannot be treated as unilateral cancellation of agreement of sale separating the portion of the cancellation of agreement of sale as incorporated in paragraph-2 of Ex.A2 from demand to pay the advance amount along with interest and also the reason assigned to take such extreme course. The entire paragraph has to be read together. Assuming that if the plaintiffs were certain that the agreement of sale was cancelled, it cannot be expected that the plaintiffs would keep quiet for nine long years continuing the possession of the suit schedule land with the appellant and not to PNR,J & NBK,J CCCA No.216 of 2000 29 demand re-delivery of possession till notice was issued by the appellant for registration of the sale deed to the extent Government accorded sanction in favour of plaintiffs 1 and 4. It is only an after thought.
37. Having regard to above assessment of evidence and submissions, we are of the considered opinion that Ex.A2 notice is a composite offer for cancellation of agreement of sale (Ex.A1) on refund of advance amount of ₹ 75,000/- with 12% interest and therefore the agreement of sale is not rescinded. The issue is answered accordingly.
ISSUE NO.2:
38. The Trial court grossly erred in holding against the appellant that no further steps were taken by the appellant to seek specific performance of agreement of sale and could not have kept quiet for such long time. The trial court goes on to hold that defendants ought to have issued notice and take appropriate legal action against the plaintiffs and holds that keeping silent all these years would give force to Ex.A2 notice of cancellation of agreement of sale. It is strange to notice that keeping silent by appellant is used against it, whereas till Ex.A6 notice issued by the appellant the plaintiffs also kept quite. The trial Court is conspicuously silent on this. As considered hereunder merely because appellant was silent is no ground to grant relief to plaintiffs.
PNR,J & NBK,J CCCA No.216 of 2000 30
39. The trial Court also erred in holding against the appellant on possession. When the stand of the plaintiffs is accepted that agreement of sale was cancelled by Ex.A2 notice holding of possession is no more be permissible possession and it was open for the plaintiffs to recover the possession immediately thereafter. As no steps were taken by the plaintiffs immediately and kept quiet for more than 9 years, the principle of delay and latches would come to play. In the facts of this case, Article 65 of the Limitation Act is applicable.
40. It is contended by learned senior counsel for plaintiffs that it is an established principle of law that the right to claim protection under Section 53-A of the Transfer of Property Act would not be available, if the transferee remains passive without taking effective steps and abstains from performing his part of the contract or conveying his readiness and willingness to that effect.
41. Learned senior Counsel further submitted that unless the Appellant/transferee has proved that he has performed or is willing to perform his part of the contract, he cannot invoke Section 53A of the Transfer of Property Act. It is further submitted that the term willingness used in Section 53A would mean only "readiness and willingness" used in Section 16 of the Specific relief Act.
PNR,J & NBK,J CCCA No.216 of 2000 31
42. Learned senior counsel further submitted that the doctrine of readiness and willingness is an emphatic way of expression to establish that the transferee always abides by the terms of the agreement and is willing to perform his part of the contract. Part performance, as a statutory right, is conditioned upon the transferee's continuous willingness to perform his part of the contract in terms covenanted there under. As such, readiness and willingness in the context of Section 53A of the Transfer of Property Act, must be absolute and unconditional.
43. Learned senior counsel further submitted that except for filing written statement in the suit for recovery of possession filed by the respondents, the appellant has not shown any act or adduced any evidence to show that he was willing to pay balance consideration, nor did it assert in its pleadings that it demanded specific performance within stipulated time. Learned senior counsel further submitted that when the appellant has rescinded the contract and consequently is not ready to perform their part of the contract, there is no question of applicability of Section 53A of the Transfer of Property Act. Learned senior counsel placed reliance on the decisions of various High Courts in Vasanthi, Y.A.Kader, Chinnaraj, Narendra Singh Bhati and Gangadhar Vithal Kale Vasarni.
44. In Y.A. Kader (supra), the brief facts are, several suits were filed by the appellant and respondents before the subordinate Judge of Mayuram for possession and mesne profits. Two sale agreements were executed on PNR,J & NBK,J CCCA No.216 of 2000 32 19.6.1974. One in favour of the appellant, and the other by one Savithriammal, who died subsequently, in favour of the above said same Kader. Under each of the said agreements, a sum of ₹ 2,000/- was paid as advance. Possession of the lands under both the agreements was given to the appellant. The agreements were terminated by the respondents. The appellant did not pay the balance consideration despite the agreement providing six months and in spite of several reminders. The trial Court gave a partial decree against the appellant holding that there is no scope for application of Section 53-A of the Transfer of Property Act since one of the essential requirements therein, viz., the transferee performing or being willing to perform his part of the contract, has not been satisfied by the transferee. Aggrieved thereby appeal was filed.
44.1. It is held:
"8. The learned counsel for the appellant has also argued that the suits O.S. Nos. 84 and 85 of 1977 are not maintainable in view of S. 53-A of the Transfer of Property Act. His contention is that the appellant, in part performance of the respective sale agreements, was put in possession of the respective suit properties on 19.6.1974 and continued to be in possession thereof and his possession could not be disturbed. But, I am unable to accept this contention in view of the fact that one of the several requirements under S. 53-A of the Transfer of Property Act has not been satisfied by the appellant for claiming protection thereunder. The said requirement under S. 53-A of the Transfer of properly Act is the transferee should have performed or is willing to perform his part of the contract. So, unless the appellant transferee has proved that he has performed or is willing to perform his part of the contract, he cannot invoke S. 53-A of the Transfer of Property Act. I have already held that he was not ready and willing to pay the balance sale price and perform his part of the respective contracts and that he was not entitled to specific performance claimed by him in his two suits. But, the learned counsel for the appellant, however contends that the term used in S. 53-A is mere witlingness to perform the transferee's part of the contract and not readiness and witlingness to PNR,J & NBK,J CCCA No.216 of 2000 33 perform his part as mentioned under S. 16 of the Specific Relief Act. But, the said counsel was unable to cite any authority to make any such distinction between the abovesaid terminology used in S. 53-A and the corresponding one used in S. 16 of the Specific Relief Act. On the other hand, the learned counsel for the respondents brought to my notice three decisions from which it can be safely inferred that the term 'willingness' used in S. 53-A of the Transfer of Properly Act is, nothing different from the term willingness and readiness used in S. 16 of the Specific Relief Act. The first of these decisions is Karthikeya Mudaliar v. Singaram Pillai1, where I find the following passage:--
"S. 53-A however docs not provide that there must he a plea in a suit for possession, where the defendant seeks the aid of S. 53-A, that he is ready and willing to perform his part of the contract. The readiness and willingness to perform his part of the contract must no doubt he established by evidence and that readiness and willingness must be shown to have existed ever since the time of the agreement and not necessarily when the suit is filed. It maybe that such a pleading may be absolutely necessary in a suit for specific performance on the part of the plaintiff. But the absence of an averment in the written statement in a suit for possession, where the defendant raises plea under S. 53-A, does not appear to me to be fatal, as S. 53- A does not in terms provide for any such requirement."
Then in Anantha Pillai v. Rathnasabapathy Mudaliar1 after citing the above passage the learned Judge observes as follows:--
"Admittedly, in this case the plaintiff has not let in evidence to show that he was ready and willing to perform his part of the contract. Therefore, condition No. (VI) enumerated already is not satisfied in this case and for this reason the plaintiff cannot have any reliance on S.53-A."
Further in Sardar Govindarao Mahadik v. Devi Sahai2 also find a similar observation as follows:
"S. 53-A. requires that the person claiming the benefit of part performance must always be shown to be ready and willing to perform his part of the contract. And if it is shown that he was not ready and willing to perform his part of the contract he will not qualify for the protection of the doctrine of part performance."
No doubt, the learned counsel for the appellant contends that the Supreme Court in the above said decision was only concerned with another requirement under S. 53-A of the Transfer of Property Act, viz., that the transferee has done some act in furtherance of the contract". But, I do not think so, it was considering both the requirements on the facts that were before it. Even assuming that the above quoted observation of the Supreme Court was obiter, it has to be given due weight.
9. So, it is clear from the above said passages quoted in the above referred to three decisions, the term willingness used in S. 53/A would mean only 'readiness and willingness' used in S. 16 of the Specific Relief Act.
PNR,J & NBK,J CCCA No.216 of 2000 34 Therefore, I find that the appellant cannot invoke S. 53. A of the Transfer of Property Act."
45. In Chinnaraj (supra) case, the landlord filed suit for recovery of possession and past and future mesne profits. The tenant resisted suit relying on doctrine of Part Performance as the tenant entered into agreement of sale with Land Lord in the year 1996 after paying advance sale consideration. The Tenancy was terminated by Land Lord in 1999. The suit was decreed by the Trial Court ordering eviction of tenant on the ground that there was valid termination of tenancy. The tenant was not put in possession or continued in possession as the agreement holder and tenant had not shown readiness and willingness to perform his part of contract so as to invoke benefit of Doctrine of Part Performance. The Lower Appellate Court confirmed decree in favour of the Land Lord. On a second appeal, it was held that continuous possession of tenanted properties even after entering into sale agreement would not by itself amount to part performance of putting tenant in possession of properties when tenancy had continued thereafter. It was held that benefit of Section 53-A of the Transfer of Property Act, 1882 cannot be conferred on person who was not ready and willing to perform his part of contract. The prospective vendee who claims to have taken possession could not resist dispossession if he is not willing to pay sale consideration agreed upon within stipulated time. On facts held that there was no evidence to show PNR,J & NBK,J CCCA No.216 of 2000 35 that tenant as agreement holder was ready and willing to perform his part of contract, the decree of eviction passed against tenant was confirmed. 45.1. It is held:
"15. 1Admittedly, there is no evidence on record adduced by the appellant/defendant to show that he was ready and willing to perform his obligation as per Ex.Bl dated 3.2.1996. On the other hand, the respondents/plaintiffs have proved that they sent a legal notice on 24.5.1999, marked as Ex.A2, terminating the relationship of landlord and tenant between the respondents/plaintiffs and the appellant/defendant by 30.6.1999 and requiring the appellant/ defendant to hand over vacant possession of the suit properties on 1.7.1999, which was found as valid in law by the Courts below. Even prior to the entering of the agreements of sale dated 3.2.1996, marked as Ex.B2, the appellant/defendant was already put in possession of the suit properties as tenant. Therefore, his continuous possession in the suit properties even after entering into the sale agreements would not by itself amount to a part performance, putting the appellant/defendant in possession of the suit properties pursuant to the sale agreements dated 3.2.1996, marked as Ex.Bl. If the agreements of sale are accepted, the tenancy would come to an end on the execution of the sale agreements dated 3.2.1996, marked as Ex.Bl itself. In which case, the appellant/defendant is not entitled for the benefit of Section 53A of the Transfer of Property Act, as it is well settled in law that the benefit under Section 53A of the Transfer of Property Act cannot be conferred on a party who is not willing to perform his part of the contract. It is also well settled in law that a prospective vendee, who claims to have taken possession, could not resist dispossession, if he is not willing to pay the price agreed upon within the stipulated time. In other words, in order to substantiate the plea of part performance, the appellant/defendant must assert that he demanded specific performance of the contract within the stipulated time, otherwise, it would only mean that he did not show readiness and willingness to perform his part of the contract, as held in M. Mariyappa v. A.K. Satyanarayana, AIR 1984 Kar.50.
16. The doctrine of readiness and willingness is an emphatic way of expression to establish that the transferee always abides by the terms of the agreement and is willing to perform his part of the contract. Part performance, as a statutory right, is conditioned upon the transferee's continuous willingness to perform his part of the contract in terms covenanted thereunder, as held in Mohan Lal v. Mira Abdul Gaffar, AIR 1996 SC 910. Hence, such readiness and willingness in the context of Section 53A of the Transfer of Property Act, must be absolute and unconditional.
PNR,J & NBK,J CCCA No.216 of 2000 36
17. In the instant case, the appellant/defendant, who claims benefit of Section 53A of the Transfer of Property Act, has not adduced any evidence that he was ready and willing to perform his part of obligation to substantiate his defence based on Section 53A of the Transfer of Property Act. On the other hand, as held by both the Courts below, the notice of termination dated 24.5.1999, marked as Ex.A2, terminating the tenancy with regard to each of the suit properties, is valid in law. Therefore, I am obliged to negative the contention of the learned counsel appearing for the appellant/defendant and the appellant/defendant is not entitled to the benefit of Section 53A of the Transfer of Property Act, as he had failed to substantiate his claim that he was ready and willing to perform his part of the contract nor asserted that he demanded specific performance within the stipulated time in the manner known to law. Therefore, his failure to assert that he demanded specific performance of the agreements of sale dated 3.2.1996, within the stipulated time also disentitles him to stake the claim that he was ready and willing to perform his part of the contract. Answering the substantial questions of law against the appellant/defendant these second appeals are dismissed. No costs. Consequently, C.M.P. Nos. 4761 and 4762 of 2002 are also dismissed."
46. In Narendra Singh Bhati (supra) case, appeal was filed against order dismissing suit as withdrawn, and directed Defendants to pay sum and the plaintiffs to handover possession of disputed property to defendants.
46.1. It is held:
"44. A perusal of the above provisions reveals that same bundle of facts constitute a valid defence under Section 53A, which pertains to the right to seek specific performance of the contract under the Act of 1963.
45. In both the cases, the two requisites are the existence of contract between the parties and readiness and willingness on part of the person, who wants to avail the benefit under the said provisions, it is only when it is established on the basis of acceptable and cogent evidence that the party was ready and willing to perform his part of the contract that the benefit under the relevant provisions can be extended. Further both the reliefs being equitable in nature, any lapse or lack of bona fides in the matter would enable the Court to refuse the relief.
46. From what has been held hereinbefore, appellants-plaintiffs have rescinded the contract and consequently are not ready and willing to PNR,J & NBK,J CCCA No.216 of 2000 37 perform their part of the contract and, therefore, there is no question of applicability of provisions of Section 53A of the TP Act and submissions in this regard are, therefore, baseless.
47. The other submissions made by learned counsel for the appellants that the respondents had neither filed any counter claim nor paid the court fees for seeking the relief of possession as granted by the trial court, suffice it to notice that in the suit for specific performance, once the Court has noticed the rescission on part of the plaintiff and a prayer was made for grant of relief of possession based on the principles enshrined in Sections 64/65 of the Contract Act and Section 30 of the Act of 1963, there was no requirement for the defendants to file a counter claim and/or pay court fees in this regard. As already noticed hereinbefore, the rescission can be set up by way of defence and consequences under the Act of 1963 and Sections 64 and 65 of the Contract Act would follow.
48. There is substance in the submissions made by learned counsel for the defendants that the appellants have failed to indicate any right under any provision of law to retain the possession of the land in question after having rescinded the contract dated 17.05.1989 and terming the same as voidable/void. A specific query was also put to counsel for the appellants in this regard, which went unanswered except of course the standard plea that the appellants are in possession for a long time, which could not be a valid reason for continuing to retain possession after having rescinded the contract."
47. In Gangadhar Vithal Kale Vasarni v. Shyamlal Bhikchand Rathod9 case, the deceased plaintiff/respondent filed suit for recovery of possession of the suit land on basis of title, which he derived from deceased Maneji @ Manika s/o Dattaram, who was admittedly original owner on basis of a registered sale deed dated 5-11-1971, executed in his favour. He asserted that the defendant/appellant had no right or interest in the suit land. However, the appellant unlawfully dispossessed him in or about 1975 and claimed certain rights on basis of an agreement of sale, which was allegedly executed by original owner Maneji @ Manika 9 (2009) 2 Bom CR 829 PNR,J & NBK,J CCCA No.216 of 2000 38 s/o.Dattaram in his favour. He further asserted that said Maneji @ Manika never executed any agreement of sale in favour of the defendant/appellant and yet, illegally, the possession of the suit land was being enjoyed by the latter. Consequently, he sought recovery of possession along with compensation on account of unlawful enjoyment of the suit land by the defendant/appellant. The learned Civil Judge came to conclusion that the deceased plaintiff was never put in possession of the suit land on basis of sale deed dated 5.11.1971. It was further held that the appellant was in possession of the suit land on basis of the agreement executed by Maneji @ Manika s/o Dattaram Kale in his favour. The learned Civil Judge, therefore, dismissed the suit. The first Appellate Court, however, held that the appellant could not plead and prove his readiness and willingness to perform his part of agreement to sell and as such protection under section 53-A of the Transfer of Property Act was not available to him. The first Appellate Court held that the deceased plaintiff-Shyamlal became owner of the suit land on basis of the sale deed and was, therefore, entitled to possession thereof. Aggrieved thereby second appeal was filed before the High Court of Bombay.
47.1. It is held:
"12. The appellant must plead and prove that he was ready and willing to perform his part of the agreement of sale in order to get equitable relief available under section 53- A of the Transfer of Property Act. The plea of part performance is based on principles of equity. It would not einure to benefit of a dormant litigant, who did not express willingness to perform his PNR,J & NBK,J CCCA No.216 of 2000 39 part of the agreement of sale. The Apex Court in (Ramkumar Agrawal v. Thawar Das (dead) though L.Rs.)11999 DGLS (soft) 836 : A.I.R. 1999 S.C. 3248 : 1999 (7) S.C.C. 303, observed:
"Plea under section 53-A of the Transfer of Property Act raises a mixed question of law and fact and therefore cannot be permitted to be urged for the first time at the stage of second appeal. That apart, performance or willingness to perform his part of the contract is one of the essential ingredients of the plea of pan performance. Thawar Das having failed in proving such willingness, protection to his possession could not have been claimed by reference to section 53-A of the Transfer of Property Act."
13. The term "willingness" as used in section 53-A of the Transfer of Property Act does imply "readiness and willingness" as used in section 16 of the Specific Relief Act. The Apex Court in (Sardar Govindrao Mahadik v. Devi Sahai)2, 1981 DGLS (soft) 492 : A.I.R. 1982 S.C. 989 : 1982 (1) S.C.C. 237, observed:
"Section 53-A requires that the person claiming the benefit of part performance must always be shown to be ready and willing to perform his part of the contract. And if it is shown that he was not ready and willing to perform his part of the contract he will not qualify for the protection of the doctrine of part performance."
14. It is conspicuous on basis of above observations that the term "willingness" as used in section 53-A would mean "readiness and willingness" likewise the expression used in section 16 of the Specific Relief Act. In this view of the legal position, the appellant is not entitled to invoke the doctrine of part performance. For, he did not prove the willingness and readiness to perform his part of the agreement of sale from the date of agreement till death of Maneji @ Manika i.e. between 1968 to 1973. The deceased plaintiff had stepped into the shoes of Maneji @ Manika due to the purchase transaction depicted in the sale deed (Exhibit-21). Once it is found that the appellant could not claim legal protection under the doctrine of part performance, it will have to be said that the deceased plaintiff was entitled to claim possession of the suit land on basis of his title."
48. In Shrimant Shamrao Suryavanshi (supra), an identical issue was considered by the Hon'ble Supreme Court. The facts are, respondent No.3 executed an agreement for sale in favour of appellant No.1 and the appellant paid earnest money. Subsequently, the appellant having noticed that the transferor was negotiating for sale of the said land in favour of PNR,J & NBK,J CCCA No.216 of 2000 40 respondent No.1, filed a suit for injunction restraining the transferor from selling the property to respondent No.1, and injunction was granted. However, according to the appellant, the transferor sold the land to respondent No.1 despite the order. After execution of the sale deed, respondent No.1 filed for recovery of possession of the land which was dismissed by the trial court and Single Bench of High Court. The Letters Patent Bench allowed further appeal by Respondent No.1 holding that the protection as regards possession was not available to the defendant appellant as the suit for specific performance of the agreement for sale was barred by limitation. Appeal was filed against the same. 48.1. Hon'ble Supreme Court held:
"12. In England, the provisions of the Statute of Fraud provided that no suit or action would be brought on agreement relating to a property which was not in writing signed by the parties. The aim and object of the statute was to protect a party against fraud. However, certain difficulties were experienced when it was found that under an oral agreement a party has performed his part of the contract, yet he was unable to bring any action or suit against other party viz. transferor for a specific performance of the agreement which was not in writing in view of the provisions contained in the Statute of Fraud. Under such situations, transferors managed to play fraud on innocent buyers who entered into an oral agreement and performed their part of the contract. In view of such prevailing circumstances in England, the Court of Equity intervened on the ground of equity and took action to enforce specific performance of a parole agreement. The view taken by the Court of Equity was that the object behind the Statute of Fraud was to protect against a fraud, but the provisions of the Statute of Fraud were being used as an instrument to help and protect fraud. Thus, the Court of Equity did not permit the Statute of Fraud to be used as an instrument to cover the fraud by the transferors where there was a part-performance of a parole agreement.
xxxx
15. The Special Committee's report which is reflected in the aims and objects of the amending Act, 1929 shows that one of the purposes of PNR,J & NBK,J CCCA No.216 of 2000 41 enacting Section 53-A was to provide protection to a transferee who in part-performance of the contract had taken possession of the property even if the limitation to bring a suit for specific performance has expired. In that view of the matter, Section 53-A is required to be interpreted in the light of the recommendation of the Special Committee's report and aims, objects contained in the amending Act, 1929 of the Act and specially when Section 53-A itself does not put any restriction to plea taken in defence by a transferee to protect his possession under Section 53-A even if the period of limitation to bring a suit for specific performance has expired.
16. But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53-A of the Act. The necessary conditions are:
(1) there must be a contract to transfer for consideration of any immovable property;
(2) the contract must be in writing, signed by the transferor, or by someone on his behalf;
(3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained; (4) the transferee must in part-performance of the contract take possession of the property, or of any part thereof; (5) the transferee must have done some act in furtherance of the contract; and (6) the transferee must have performed or be willing to perform his part of the contract.
17. We are, therefore, of the opinion that if the conditions enumerated above are complied with, the law of limitation does not come in the way of a defendant taking plea under Section 53-A of the Act to protect his possession of the suit property even though a suit for specific performance of a contract is barred by limitation.
20. It is, therefore, manifest that the Limitation Act does not extinguish a defence, but only bars the remedy. Since the period of limitation bars a suit for specific performance of a contract, if brought after the period of limitation, it is open to a defendant in a suit for recovery of possession brought by a transferor to take a plea in defence of part-performance of the contract to protect his possession, though he may not be able to enforce that right through a suit or action.
21. In the present case, it is not disputed that the transferee has taken possession over the property in part-performance of the contract. It is also not disputed that the transferee has not brought any suit for specific performance of the agreement to sell within the period of limitation. It is also not disputed that the transferee was always and is still ready and willing to perform his part of the contract. Further, the view taken by the High Court in judgment under appeal was overruled by the Full Bench of the Bombay High Court in the case of Mahadeo Nathuji Patil v. Surjabai Khushalchand Lakkad [1994 Mah LJ 1145 (FB)] which, according to our view, lays down the correct view of law. In that view of the matter these appeals deserve to be allowed." (emphasis supplied) PNR,J & NBK,J CCCA No.216 of 2000 42
49. In Vasanthi (supra), the brief facts are, the appellant/plaintiff instituted suit against the predecessor-in-interest of the Respondents i.e. deceased original Defendant, praying for a declaration of her title in the suit property and also for recovery of possession thereof. She claimed to have purchased the same vide registered sale deed for a certain consideration from the sons of the original owner, whereupon she was registered in the municipal records as the title-holder thereof. She averred that at the time of sale, the original Defendant was in possession of the property as a tenant of her vendors on payment rent of ₹ 100/- per month. As the Defendant did neither accept her as his landlord nor agreed to pay the enhanced rent, as demanded, after causing a notice to be served on him, the Appellant filed an application before the Rent Controller for his eviction from the suit property. The Trial Court framed issues and by its verdict dismissed the suit holding inter alia that the possession of the original Defendant of the suit property was protected Under Section 53A of the TP Act, as the ingredients thereof stood complied with by him and that the Appellant was not entitled to the relief of declaration or possession, as sought for. The Appellant preferred appeal before the High Court and it also met the same fate. Her Letters Patent Appeal (LPA) was dismissed as not maintainable being in the teeth of Section 100A of Code of Civil Procedure. Hence, the present appeal.
PNR,J & NBK,J CCCA No.216 of 2000 43 49.1. Hon'ble Supreme Court held as under:
"25. This Court in Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi [Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676 : 2002 SCC (Cri) 469] , while tracing the incorporation of Section 53-A in the TP Act, vide 1929 Act, acting on the recommendations of the Special Committee on the issue, had ruled that mere expiration of the period of limitation for bringing a suit for specific performance would not debar a person in possession of an immovable property by way of part-performance from setting up a plea, as contemplated therein in defence to protect his possession of the property involved. It was however underlined that if the conditions precedent, as enumerated, in Section 53-A of the Act, are complied with, the law of limitation would not come in the way of the said person to avail the benefit of the protection to his possession as extended thereby even though a suit for specific performance of a contract by him had gone barred by limitation. Explicitly therefore, though mere expiry of the period of limitation for a suit for specific performance may not be a bar for a person in possession of an immovable property in partperformance of a contract for transfer thereof for consideration to assert the shield of Section 53-A of the TP Act, it is nevertheless imperative that to avail the benefit of such protection, all the essential prerequisites therefor would have to be obligatorily complied with.
25. In A. Lewis v. M.T. Ramamurthy [A. Lewis v. M.T. Ramamurthy, (2007) 14 SCC 87] , it was propounded that the right to claim protection under Section 53-A of the TP Act would not be available, if the transferee remains passive without taking effective steps and abstains from performing his part of the contract or conveying his readiness and willingness to that effect."
50. In the instant case, what was stated in Ex.A2 notice was only an offer to cancel agreement of sale subject to re-payment of advance amount with interest @ 12% per annum. Even this offer was issued on the assumption that no exemption was granted on suit schedule land by the Government. As held in Issue No.1, the agreement of sale was not rescinded.
51. The trial Court also failed to appreciate that subsequent to agreement of sale, the provision of ULC Act was relaxed by the Government PNR,J & NBK,J CCCA No.216 of 2000 44 and, therefore, the land to the extent relaxation granted was available for completing the sale transaction. However, at no point of time the appellant was informed about such relaxation. The trial Court ought to have noticed that by referring to Government orders granted in favour of 1st and 4th plaintiffs, the appellant made request to register the sale deed to the extent of relaxations granted. This clearly shows, even otherwise, the appellant was ready and willing to perform his part. Further, as per the order of relaxation, plaintiffs were required to seek permission from Government to sell the land. The plaintiffs have not applied for such permission. They have not intimated appellant about relaxation granted by Government. Plaintiffs never demanded to hand over possession earlier to notice to register sale deed (Ex.A6) showing readiness and willingness to perform its part by the appellant. These are all crucial facts which go to the root of the matter.
52. Further, in the instant case, readiness and willingness of appellant would arise only when the plaintiffs obtained relaxation and permissions from the Government under the Urban Land Ceiling Act to sell the suit land, intimated the said fact to the appellant, sale deed is drafted and presented before the Registering Authority. The appellant was required to pay the balance sale consideration at the time of registration of sale deed before the Registering Authority. Till then appellant was not required to inform his readiness and willingness. Plaintiffs have not complied this PNR,J & NBK,J CCCA No.216 of 2000 45 requirement. Plaintiffs having failed to comply their obligations under the agreement of sale and failed to inform the appellant on securing relaxation cannot seek to deprive the appellant's right to confirmation of sale on mere technicalities.
53. As held by Hon'ble Supreme Court in Shrimant Shamrao Suryavanshi (supra), all the conditions to seek application of Section 53-A of Transfer of Property Act are complied in this case. Therefore, delay cannot be attributed to the appellant to defeat its right to registration of sale deed. However, even though the plaintiffs have not complied their part of obligations as per Ex.A1 agreement, vide notice (Ex.A6) appellant demanded registration of sale deed to the extent exemptions are granted by the Government.
54. The trial Court also erred in dealing with the issue of payment of interest to the appellant.
55. The learned trial Court also erred in holding that the plaintiffs have established their title when records clearly disclosed that the land is governed by the Act and major portion of the land was already taken by the Government and allotted to Government Departments/other Organizations. Therefore, it cannot be said that entire suit schedule land is owned by the plaintiffs.
PNR,J & NBK,J CCCA No.216 of 2000 46
56. For all the aforesaid reasons, the trial Court grossly erred in decreeing the suit in favour of plaintiffs. The issue is answered accordingly.
ISSUE NO.3:
57. The Appeal is allowed. The Judgment and decree of IV Senior Civil Judge, City Civil Court, Hyderabad, dated 25.07.2000 in O.S.No.65 of 1993 is set aside. However, in the facts of this case, no order as to costs. Pending miscellaneous applications if any shall stand closed.
____________________________ P.NAVEEN RAO, J ___________________________ NAGESH BHEEMAPAKA, J Date: 27.06.2023 KKM/tvk PNR,J & NBK,J CCCA No.216 of 2000 47 HON'BLE SRI JUSTICE P.NAVEEN RAO AND HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA CITY CIVIL COURT APPEAL NO.216 OF 2000 Date: 27.06.2023 Kkm/tvk