Madras High Court
Mohamed Sulthan vs Jabarulla on 27 July, 2007
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on ::23.11.2018
Delivered on::29.11.2018
CORAM :
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
A.S.(MD)No.48 of 2010
and
M.P(MD).Nos.1 of 2010 and 1 of 2013
1.Mohamed Sulthan
2.A.Ameena Begam
3.A.Ayisha Begam
4.A.Kajitha
5.M.Alima Begam ... Appellants
Vs.
Jabarulla .. Respondent
Prayer: The First Appeal has been filed under Section 96 of Civil
Procedure Code against the judgment and decree, dated 27.07.2007
made in O.S.No.276 of 2004 on the file of the Additional District Judge
Cum Fast Track Court No.2, Tiruchirappalli.
For Appellants : Mrs.J.Maria Roseline
For Respondent : Mrs.N.Juliet Latha
JUDGMENT
The defendants in O.S.No.276 of 2004 on the file of the Additional District Judge, Cum Fast Track Court No.II, Trichirappalli are the appellants.
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2.The said suit was laid by the respondent herein seeking specific performance of an agreement of sale is said to have been entered into between the first defendant and the plaintiff on 26.04.2002. According to the plaintiff, the total sale consideration was fixed at Rs.7,00,000/- and he paid advance of Rs.2,25,000/- on the date of agreement. A period of six months was fixed for payment of balance sale consideration. Stating that the time is essence of the contract and the plaintiff has been ready and willing to perform his part of the contract through out, the plaintiff would claim that the first defendant has been evading the performance of the contract. The plaintiff would further contend that he had made several requests to the first defendant to receive the balance sale consideration and execute the sale deed as per the agreement dated 26.04.2002. Since the first defendant did not come forward to execute the sale deed, the plaintiff had caused a notice on 16.02.2004 calling upon the first defendant to execute the sale deed. The first defendant sent a reply on 20.02.2004 admitting the agreement but claiming that the matter should be settled before the Jamath instead of the Court. In view of the said reply, the plaintiff had come forward with the suit seeking specific performance.
3.Though the original suit was only for specific performance without a prayer for alternative relief of refund of advance, the plaintiff amended the plaint subsequently for a relief of refund of advance.
4.The suit was resisted by the first defendant contending that http://www.judis.nic.in 3 the agreement dated 26.04.2002 was not intended to be an agreement of sale. According to the first defendant, he had borrowed money for the improvement of land in question from the plaintiff and as a security for the said borrowing, the plaintiff had taken a sale agreement from him. He would further contend that the plaintiff was never ready and willing to perform his part of the contract. The financial capability of the plaintiff to pay the balance sale consideration of Rs.4,75,000/- was also questioned by the first defendant.
5.On the above pleadings, the learned trial Judge has framed the following issues along with an additional issue:-
“1.26.04.2002 k; Njjpa fpua xg;ge;jk; cz;ikahdjh?
2.thjp jhthtpy; Nfhhpa tz;zk; gpujpthjpfSf;F vjpuhf Vw;wij Mw;Wk; ghpfhuk; ngw mUfijAiltuh?
3.thjpf;Fs;s NtW ghpfhuk; vd;d?
$Ljy; v*tpdh:
1) khw;W ghpfhukhd fpua xg;ge;j Kd; gzj;ij thjp jpUk;g ngw mUfijAiltuh?
6.At trial, the plaintiff was examined as P.W.1 and two other witnesses were examined on his side. Exhibits A1 to A6 were marked on the side of the plaintiff. The first defendant himself was examined as D.W. 1 and one Mohamed Iqbal was examined as D.W.2. Exhibits B1 to B7 were marked on the side of the defendants.
7.The learned trial Judge, on appreciation of evidence on record, rejected the contention of the first defendant that the suit agreement was intended http://www.judis.nic.in to be a security of loan transaction. It held that it is agreement 4 simpliciter and thus enforceable as such. The trial Judge also took note of the contents of the reply notice and the evidence of P.W.2 and P.W.3 to conclude that the plaintiff has been ready and willing to perform his part of the contract. On the said conclusion, the learned trial Judge decreed the suit for specific performance. Aggrieved, the defendants are on appeal.
8.I have heard Mrs.J.Maria Roseline, learned counsel appearing for the appellants and Mrs.N.Juliet Latha, learned counsel appearing for the respondent.
9.Mrs.J.Maria Roseline, learned counsel for the appellants would contend that the trial Court erred in concluding that the suit agreement was an agreement of sale simpliciter and the same was not intended to be a security for loan transaction. She would also fault with the trial Court for accepting the evidence of P.W.2 and P.W.3 who have admitted that there were disputes between them and the first defendant. The learned counsel would further attack the judgment of the trial Court on the ground that the trial Court had not framed essential issue relating to the readiness and willingness of the plaintiff in a suit for specific performance. She would further contend that the trial Court erred in holding that the plaintiff was ready and willing to perform his part of the contract, despite the fact that there is a huge delay in filing the suit.
10.Per contra, Mrs.N.Juliet Latha, learned counsel for the respondent would contend that the evidence of P.W.2 and P.W.3 are http://www.judis.nic.in 5 cogent and convincing and the trial Court was right in relying upon the said evidence to conclude that the plaintiff was always ready and willing to perform his part of the contract.
11.On the above arguments of the learned counsels, the following points that arise for determination:-
“(1)Whether the sale agreement dated 26.04.2002 was not intended to be an agreement for sale but was executed to serve as a security for repayment of the loan borrowed by the first defendant? and (2)Whether the plaintiff/respondent was ready and willing to perform his part of the contract within the time stipulated under the agreement?
(3)Whether the plaintiff is entitled to decree for refund of advance?” M.P.(MD).No.1 of 2013
12.This application has been filed by the appellants seeking to produce an unsigned document which according to them is a draft agreement and it contains the amount borrowed by the first defendant from the plaintiff, P.W.2 and P.W.3.
13.This application is opposed by the respondent contending that this document has been prepared to suit the convenience of the defendants. There is no pleading with reference to this document before the trial Court and being the unsigned document, the same cannot be received in evidence.
14.I have considered the rival submissions.
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15.As rightly pointed out by the learned counsel for the respondent, the document that is sought to be produced is an unsigned instrument which contains certain writings. The existence of the said document was not even pleaded by the defendant before the trial court. The petitioners have not made out sufficient reason for non production of the same before the trial Court. I, therefore find that the reception of this document, at the appellate stage, would not only prejudice the case of the plaintiff/respondent but will be in derogation of the procedure and principles set out for reception of additional evidence at the appellate stage. Hence, M.P.(MD).No.1 of 2013 is dismissed. Point No.1
16.It is the claim of the first defendant that the suit agreement was executed to serve as a security for loan transaction. No doubt true, such a plea is available to a defendant in a suit for specific performance. But the said plea must be proved by overwhelming evidence on the following aspects:-
(i)The advance paid must be a major portion of the sale consideration.
(ii)A long period of time must have been fixed for payment of the balance sale consideration.
(iii)The value of the property should be shown to be more than the price agreed under the agreement.
17.If the evidence in this case is analysed bearing in mind the http://www.judis.nic.in 7 above requirements, I find that the defendants have not established any of the above requirements. Admittedly, the sale consideration fixed is Rs.7,00,000/- and the advance paid is only Rs.2,25,000/- which is less than 1/3rd of the sale consideration. The time fixed is only a very reasonable period of 6 months. Therefore, I am unable to conclude that the agreement was intended to operate as a security for the alleged loan transaction. This issue is answered against the appellants. Point No.2:
18.Mrs.J.Maria Roseline, learned counsel for the appellants would strenuously contend that the plaintiff having admitted that the time is the essence of the contract, is not entitled to sue for specific performance, after expiry of six months time fixed under the agreement. She would further contend that the fact that the suit notice was issued only on 16.02.2004 that is nearly two years after the agreement would show that the plaintiff was not ready and willing to perform his part of the contract. She would also draw my attention to the evidence of P.W.2 and P.W3 wherein they have specifically admitted that they they have certain disputes with the first defendant.
19.Contending contra, Mrs.N.Juliet Latha, learned counsel appearing for the respondent would submit that the plaintiff has averred in the plaint itself that he has been ready and willing to perform his part of the contract, even in his evidence, he had deposed that he has requested the first defendant to execute the sale deed and it was the first http://www.judis.nic.in 8 defendant who was evading such execution. She would also draw my attention to the evidence of P.W.2 and P.W.3 who had deposed about the readiness and willingness on the part of the plaintiff to take the sale deed by paying the balance sale consideration.
20.I have considered the rival submissions.
21.Mrs.J.Maria Roseline, learned counsel for the appellants would also invite my attention to the following judgments:-
“1.In K.S.Vidyanadam and others Vs.Vairavan reported in 1997(I) CTC page 628 (Supreme Court).
2.In Mrs.Saradamani Kandappan Vs. Mrs.S.Rajalakshmi and others reported in AIR 2011 Supreme Court 3234.
3.In P.Meenakshisundaram Vs. P.Vijayakumar and another reported in 2018(3) CTC 428 (Supreme Court).
4.In T.R.Murugesan Vs.S.Balakrishnan and others reported in 2018(6) CTC 56”.
22.Mrs.N.Juliet Latha, learned counsel for the respondent would rely upon the judgment of the Hon'ble Supreme Court in Motilal Jain Vs.Ramdasi Devi (SMT) and others reported in 2000 6 SCC 420.
23.The law relating to readiness and willingness has undergone sea-change after the judgment of the Hon'ble Supreme Court in Mrs.Saradamani Kandappan Vs.Mrs.S.Rajalakshmi and others. Of course, in Chand Rani Vs.Kamal Rani reported in (1993) 1 Supreme Court Cases 519, the Hon'ble Supreme Court had held that the time cannot be held to be the essence of contract in respect of the immovable http://www.judis.nic.in 9 property unless the parties agree that the time should be treated as the essence of the contract. The said proposition was clarified by the Hon'ble Supreme Court in K.S.Vidyanadam and others Vs.Vairavan reported in 1997 (I) CTC 628.
24.While agreeing with the conclusions of the Larger Bench, the Division Bench of the Supreme Court in K.S.Vidyanadam's case supra held that even though the time cannot be said to be an essence of the contract, the plaintiff must prove that he was ready and willing to perform his part of the contract through out and any unexplained delay in suing for specific performance would be a fatal to the claim of the plaintiff.
25.In Mrs.Saradamani Kandappan Vs.Mrs.S.Rajalakshmi and others, the Hon'ble Supreme Court reiterated the principles laid down in K.S.Vidyanadam and others Vs.Vairavan referred supra and concluded that if is there is a delay on the part of the plaintiff in suing for specific performance, the plaintiff will not be entitled to the equitable relief of specific performance. While doing so, the Hon'ble Supreme Court in paragraph 25 of the said judgment had observed as follows:
“25.The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non performance. A http://www.judis.nic.in purchaser can no longer take shelter under the principle that 10 time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and non readiness. The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not indent that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two or three decades to attain finality. As a result, an owner agreeing to sell a property for Rs.one lakh and received Rs.Ten thousand as an advance may be required to execute a sale deed a quarter century later by receiving the remaining Rs.Ninety Thousand, when the property value has risen to a crore of rupees.”
26.The said position of law was reiterated by the Hon'ble Supreme Court in P.Meenakshisundaram Vs. P.Vijayakumar and another reported in 2018(3) CTC 428 (Supreme Court). In Meenakshmisundaram's case, the Hon'ble Supreme Court had specifically held that mere assertion in the plaint regarding readiness and the payments made after the expiry of the time stipulated under the agreement is not sufficient to prove that the plaintiff was always ready and http://www.judis.nic.in willing to perform his part of the contract. While saying so, the 11 Hon'ble Supreme Court had observed as follows:
“8.As regards suit for Specific Performance, the law is very clear that the plaintiff must plead and prove his readiness and willingness to perform his part of the contract all through I.e. right from the date of the contract till the date of hearing of the suit. If respondent No.1 was well aware about the encumbrance and the parties had chosen that the balance consideration be paid to the appellant before 20.03.2001 so that the sale deed could be registered without any encumbrance, it was for respondent no.1 to have taken appropriate steps in that behalf of completion of transaction. The facts on record disclose that the first step taken by the respondent no.1 after the suit agreement was well after four months, when further amount of Rs.2 lakhs was paid on 21.01.2011. Therefore nothing was done till 20.03.2001 by which the transaction had to be completed. The record is completely silent about any transaction had to be completed.
The record is completely silent about any communication sent around 20.03.2001 towards completion of transaction. As a matter of fact the first step thereafter was six months after the deadline namely on 22.09.2001 when the communication (Ex.A6) was sent along with the amount of Rs.10 lakhs. The written submissions filed on behalf of the respondent no.1 also do not indicate any steps till this time so as to say that he was all the while ready and willingness to complete the transaction.
9.The assertion made by the respondent no.1 in paragraph 7 of the plaint is a mere assertion without any relevant details as to what exactly he had done towards fulfilment of his obligations and completion of the transaction. The factual aspects as detailed above are quite clear that http://www.judis.nic.in 12 respondent no.1 had completely failed in his obligation and was not ready and willing to perform his part of the contract. Even going by the case set up by the respondent no.1, that around 29.07.2002 an arrangement was arrived at, under which out of the balance amount Rs.19.5 lakhs, Rs.13.5 lakhs were to be made over by the respondent no.1 to the bank directly and rest of the sum of Rs.6 lakhs was to be paid to the appellant in cash, the facts do not indicate any observance of these conditions. Beyond filing an application for impleadment which came to be dismissed, respondent no.1 did not take any step. The amount of 13.5 lakhs was independently deposited and discharge was obtained by the appellant”.
27.From the above principles of law laid down by the Hon'ble Supreme Court, it is incumbent on the part of the plaintiff who seeks discretionary relief of specific performance to establish that he was always ready and willing to perform his part of the contract, even in a case where the time cannot be said to be the essence of the contract. In the case on hand, the plaintiff has expressly admitted in the plaint that the time was considered to be the essence of the contract by the parties. In paragraph 4 of the plaint, the plaintiff has specifically pleaded as follows:
“4.....As time is essence of the contract, the plaintiff has been bent upon obtaining sale deed by stipulated period of six months after paying, the balance of sale consideration in the sum of Rs.4,75,000/- to the first defendant. In manifestation of said intention, the plaintiff approached the first defendant directly and through mediators on several occasions and persuaded him to perform their part http://www.judis.nic.in of contractual obligations for completion of sale deed in terms 13 of agreement for sale dated 26.04.2002 after receiving the balance of sale consideration of Rs.4,75,000/-. But the defendants assigned various untenable and false reasons and thereby evaded performance of obligations arising out of the agreement for sale dated 26.04.2002.”
28.In order to prove his readiness and willingness, the plaintiff would rely upon the evidence of P.W.2 and P.W3 who are said to be independent witnesses. According to the defendants, both P.W2 and P.W3 had certain disputes with them and hence they have deposed against him.
In support of the said plea, Mrs.Mariya Roseline, learned counsel appearing for the appellants would point out the following portion of the evidence in cross examination of P.W.2:
“20.02.2006 k; Njjp Kjy; gpujpthjp vd;id mbj;jhh;. mjw;F fhty; epiyaj;jpy; Gfhh; nfhLf;ftpy;iy. ngah; gyif mbj;jjw;fhfTk; vd;id mbj;jjw;fhfTk; fhty; epiyaj;jpy; Gfhh; nfhLf;fg;gl;lJ. me;j Gfhh; vz;.201/2006 gjpT nra;ag;gl;lJ”
29.P.W3 in his cross objection had deposed as follows:
“.....fkpl;bia fiyj;jJ rk;ke;jkhf kzg;ghiw khtl;l chpikapay; ePjpkd;wj;jpy; xU tof;F ele;J tUfpwJ. 1k; gpujpthjpf;F me;j tof;fpd; fhuzkhf vdf;Fk; 1k; gpujpthjpf;F fhuzkhf tpNuhjk; cz;L vd;why; rhpay;y. vd;id kPz;Lk; jiytuhf;f Ntz;Lk; vd;W jhd; 1k; gpujpthjp tof;F jhf;fy; nra;Js;shh;..”
30.From the above evidence, it is clear that P.W 2 and P.W3 are not independent witnesses as alleged by the plaintiff and there are raging disputes http://www.judis.nic.in between the plaintiff, P.W.2 and P.W.3 on the one side and the 14 first defendant on the other side. Therefore, the evidence of P.W.2 and P.W.3 will have to be taken with a pinch of salt. The plaintiff who had averred that time is the essence of contract had issued legal notice demanding specific performance nearly after 1 year and 10 months from the date of the agreement.
31.Of course, the learned counsel for the respondent would submit that even in the reply notice issued by the first defendant on 20.02.2004 marked as exhibit A4, the first defendant has not claimed that the plaintiff was not ready and willing to perform his part of the contract.
The reply notice is not very precise. The first defendant only says that the matter should be resolved before the Jammath instead of going to Court. In the written statement filed in the suit, the first defendant had categorically disputed the readiness and willingness on the part of the plaintiff. However, the requirements under Section 16(3) is mandatory and it is for the plaintiff who sues for specific performance to show continuous readiness and willingness de hors the defence taken.
32.If we examine the evidence on record in the light of the principles of law laid down by the Hon'ble Supreme Court cited supra, I am afraid that the essential conclusion would be that the plaintiff has not established that he was continuously ready and willing to perform his part of the contract. Moreso, when he himself admitted in the plaint that the time was considered to be the essence of the contract. The very fact that the notice itself was issued nearly after 22 months, would in my http://www.judis.nic.in 15 considered opinion, disentitle the plaintiff from seeking the relief of specific performance.
33.Mrs.N.Juliet Latha, learned counsel for the respondent would rely upon the judgment of the Hon'ble Supreme Court reported in (2000) 6 Supreme Court Cases 420 (Motilal Jain Vs.Ramdasi Devi and others and contend that mere averment in the plaint is sufficient to show the readiness and willingness.
34.On the facts of the said case, it was found that the major portion of the sale consideration namely 2/3rd of the amount was paid at the time of agreement. What remains to be paid was only minor portion. Therefore, the Hon'ble Supreme Court concluded that the readiness and willingness could be inferred. But the factual situation in the case on hand is quite different and therefore, the second point is answered in favour of the appellants and against the respondent.
Point No.3
35.No doubt, the appellants would contend that they had received a sum of Rs.1,10,000/- from the plaintiff and not Rs.2,25,000/- as alleged. But I find that the agreement to be true and genuine. The claim of the defendants that it was executed only with an object of providing security for loan transaction has also been rejected. Therefore, the plaintiff would be entitled to a decree of refund of advance. The plaintiff has claimed refund of advance with 24% interest. The interest claimed is exorbitant. I am of the considered opinion that the http://www.judis.nic.in 16 appellants/defendants would be liable to pay reasonable interest. The third point is therefore answered in favour of the respondent.
36.In fine, the appeal is partly allowed. The judgment and decree of the trial Court granting specific performance is set aside and there will be a decree for alternative relief of refund of advance. The advance amount of Rs.2,25,000/- will carry interest at 12% per annum from the date of filing of the suit till the date of decree of the trial Court and 6% per annum from the date of decree till the date of realisation. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed 29.11.2018 Index : Yes/No Internet : Yes/No msa/sms To
1.The Additional District Judge Cum Fast Track Court No.2, Tiruchirappalli.
2.The Record Keeper, V.R.Section, Madurai Bench of Madras High Court, Madurai.
http://www.judis.nic.in 17 R.SUBRAMANIAN, J msa Predelivery judgment made in A.S.(MD)No.48 of 2010 29.11.2018 http://www.judis.nic.in