Patna High Court
Sadik Mian And Ors. vs Ram Dheyan Hajam on 28 January, 1992
Equivalent citations: 1992(2)BLJR1169
JUDGMENT S.N. Jha, J.
1. This appeal by the defendants second party, the purchasers of the suit property, arises out of a suit for specific performance of contract.
2. According to the plaintiff's case, as set out in the plaint, he entered into an agreement with the defendants first party for the purchase of 3.83 acres of land for Rs. 12,206/- on 17th May, 1968. Since the plaintiff did not possess the requisite amount and permission of the Consolidation Officer was also necessary, the execution of the sale deed was deferred. However, a Mahadnama was executed to that effect and Rs. 4000/- was paid in part performance of the agreement. As per the terms of the agreement, the defendants first party were required to execute the sale deed after receipt of the balance consideration money by 15th June, 1969. A registered notice through an advocate was served on the defendants first party but they had, in the mean-time, executed sale deed with respect to the land in question in favour of the defendants second party. According to the plaintiff, however, the said transaction, was farzi. The plaintiff also averred that they were ready to perform their part of the contract but the defendants first party were not ready and willing to execute the sale deed after receipt of the balance consideration money.
3. The defendants first party did not file any written statement. According to the contesting defendants, namely, defendants second party, the suit lands belong to Mostt. Marchi Mallahin, the mother of defendant No. 1 Mostt. Kawali Kuer. Although a deed of gift had been executed with respect to the properties possessed by the Mostt. Marchi in favour of her said daughter and grand-son, defendant No. 2 in the suit, on 15th February, 1957, the said transfer had remained inoperative, which would be evident from the fact that the name of Mostt. Marchi continued in the revenue records with respect to the lands. A plea, accordingly, was taken that defendants first party had no right or interest to enter into an agreement for the sale of the property. The defendants also stated that they had already for the purchase of 2.92 acres out of the 3.83 acres of land on 1st April, 1968. According to them, the impugned Mahadnama was brought into existence with full and prior knowledge of the aforesaid agreement. They alleged that the Mahadnama was collusive and ante-dated and that no payment in so-called part performance of the contract had been made to the defendants first party.
4. The trial court on the pleadings of the parties framed, inter alia, the following issues:
(i) Is the Mahadanama dated 17-5-1968 executed by defendants 1 and 2 valid, genuine, and for consideration and has any right been created to the plaintiff to compel the defendants 1 and 2 to perform their part of contract ?
(ii) Is the plaintiff entitled to a decree for specific performance of contract against defendants 1 and 2 ?
On consideration of the evidence both oral and documentary led on behalf of the parties, it came to the conclusion that defendants 1 and 2 as the donees had acquired title and were in possession of the property by virtue of the aforesaid deed of gift dated 15th February, 1957 and that thereafter, there was nothing left with Mostt. Marchi to sell or agree to sell. On the question of validity of the impugned Mahadnama, the court held that the plaintiff had proved passing of the part consideration and the same was valid, genuine and enforceable. The court disbelieved the defendants' case regarding their Mahadnama dated 1st April, 1968 and further held that they had purchased the suit property with full knowledge of the impugned Mahadnama. Accordingly, the court found that the plaintiff had made out his case and he was entitled to a decree for specific performance of contract against the defendants first party.
5. Mr. S.K. Mazumdar, learned Counsel appearing for the appellants submitted that althought the defendants-first party did not file any written statement of their own, defendant No. 1 has supported the case of contesting defendants as a witness (D. W. 9) which is corroborated by the evidence of Mostt. Marchi (D. W. 4). He submitted that the finding recorded by the trial court as to a valid agreement having taken place and part of the consideration money paid on 17th May, 1968 is not sustainable. He pointed out that the aforesaid finding is based on oral evidence but in view of the circumstances, which loom large on the plaintiff's case, the oral evidence of the witnesses cannot be believed. He, enumerated the following circumstances which, according to him, are sufficient to discredit the plaintiff's case. The Mahadnama (Ext. 1) is an unregistered document which does not mention about any payment, muchless in part performance of the contract of Rs. 4000/-. No receipt is said to have been granted by the contractee-defendants first party. The plaintiff admittedly had no money on the date of the contract and there is no evidence to establish that he had the requisite amount either at the time of institution of the suit or at the time of its hearing. It was pointed out that the plaintiff (P. W. 5) in his evidence no doubt stated about his earning during the intervening period but no such plea had been taken in the pleadings. There is no evidence that the plaintiff followed up the contract by asking the defendants to take steps for obtaining permission of the Consolidation Officer or otherwise. Although the plaintiff stated that a registered notice through lawyer was sent, neither copy of the notice has been brought on record nor the lawyer concerned has been examined to vouchsafe the plea. Learned Counsel also assailed the finding on the question of the validity of the gift in favour of the defendants first party and, in this connection, pointed out that neither the plaintiff had made any such averment in his plaint nor any issue had been framed to that effect. Counsel lastly submitted that the suit had been instituted after a long delay of almost three years and long after the sale of the property in favour of the defendants second party on 14th August, 1968. It was submitted that unexplained delay, on the facts of the case, would amount to abandonment or waiver of the plaintiff's right to seek specific performance of contract and having regard to the nature of the relief which is discretionary and equitable, the plaintiff is not entitled to the relief and the court has erred in granting the same to him.
6. Mr. Janardan Prasad Singh appearing for the plaintiff respondent, on the other hand, submitted that the plaintiff had proved not only the existence of a valid contract but also payment of Rs. 4000/- in part performance of the contract and his readiness and willingness to perform the remaining part of the contract. Learned Counsel submitted that according to the terms of the Mahadnama, the defendants first party were required to execute the sale within a period of one year, namely, by 15th June, 1969 but, in the meantime, they had entered into a farzi transaction with defendants second party in order to defeat their rights. In view of these facts, the question of delay is not very significant. Learned Counsel also pointed out that as per the provisions of the Bihar Consolidation of Holdings and Prevention of Fragmentation Act, 1956 (in short "the Consolidation Act'), the plaintiff was not required to take any step for grant of permission and therefore, for the continued inaction on the part of the defendants first party to take necessary steps in that regard, the plaintiff cannot be made to suffer. He pointed out that the defendants first parly did not file any written statement and there is no positive evidence in this case regarding non-payment of Rs. 4000/- in part performance of the contract, as alleged by the contesting defendants. Counsel also submitted that both the Mahadnama (Ext. C) dated 1st April, 1968 and the sale deeds (Ext. B series) executed by Mostt. Marchi in favour of the contesting defendants are of no legal consequence since Mostt. Marchi was no longer owner of the property after having made a gift in favour of the defendants second party way back in 1957.
7. As regards the competence of Mostt. Marchi to make the transfer of the property, it is to be borne in mind that no such pleading was made by the plaintiff. The contesting defendants raised the plea for the first time in their written statement as a defence. No formal issue, however, was framed by the trial court to that effect. Having regard to these facts as also the nature and scope of suit for specific performance, the court was not required to go into the aforesaid question and muchless, record any finding. During the course of hearing, it was suggested at the Bar that since a concluded finding has been recorded regarding the nature of the aforesaid gift, although beyond the scope of the suit, for proper consideration of the question, the suit may be remanded to the trial court for fresh decision. However, in my opinion, in view of the fact that the sale deeds in favour of the contesting defendants second party have been executed not only by Mostt. Marchi but also by her daughter Mosst. Kawali Kuer, the question as to whether the property could only be transferred by Mostt. Marchi loses its significance. Having regard to the facts of the case, therefore, it is not necessary to go into the question of the validity of the deed of gift dated 15th February, 1957.
8. I shall now consider the question of delay in filing the suit. In view of the importance of the question, I propose to examine that aspect of the matter in some detail. I have already referred to the necessary facts above. To recapitulate some of them which are relevant on the point of delay, it may once again be noticed that on 17th May, 1968 the parties are said to have been entered into the impugned agreement. The suit for specific performance, however, was filed on 13.5.1971 i e. a few days prior to the expiry of the period of limitation of three years. In the meantime, on 14th August, 1968, the defendants first party along with Mostt. Marchi had already sold away 2.92 acres of land out of the aforesaid 3.83 acres in respect of which the agreement is said to have been executed, by the five registered sale deeds (Ext. B series). The plaintiff in paragraph 9 of his evidence admitted that he learnt about the aforesaid sale of property about 11 months after the agreement i. e. some time in April, 1969. There is no explanation whatsoever as to why he did not institute the suit with a reasonable despatch thereafter.
9. It is true that in terms of Article 54 of the Limitation Act a suit for specific performance can be filed within a period of three years from the date fixed for the performance of the contract or when the plaintiff gives notice of its performance by the other side. If the suit is filed after expiry of the period, the suit has necessarily to be dismissed on this ground alone and no question of discretion arises. The question of delay, therefore, has to be considered only in cases where the suit has been filed within the period of limitation. It is also true that a suit for specific performance cannot be dismissed merely on the ground of delay but as would appear from the authorities, referred to hereinafter, in appropriate cases, delay may constitute laches disentitling the plaintiff to the discretionary relief on specific performance. Reference in this connection may first be made to Madesetty Satyanaraya v. G. Yellowji Rao in which their Lordships noticed the distinction between the English law and the Indian law on the subject in these words:
While in England mere delay or laches may be a ground for refusing to give a relief of specific performance, in India mere delay without such conduct no the part of the plaintiff as would cause prejudice to the defendant does not empower a court to refuse such a relief.
Their Lordships, while observing that under Section 22 of the Specific Relief Act, 1877 (Section 20 of the present Act) relief of specific performance is discretionary but not arbitrary and the discretion must be exercised in accordance with sound and reasonable judicial principles, held in the following words that, on the question of delay, discretion is not limited to only waiver, abandonment or estoppel:
Nor can the scope of the discretion mentioned in Section 22 of Specific Relief Act, be confined to waiver, abandonment or estoppel. If one of these three circumstances is established, no question of discretion arises, for either there will be no subsisting right or there will be a bar against its assertion. So there must be some discretionary field unoccupied by the three cases, otherwise the substantive section becomes, otiose.
The learned Judges further observed that the field of discretion cannot be defined since diverse situation may arise in such suits, but, nonetheless stated:
But another class of cases which dealt with the doctrine of laches have some bearing in the Indian context.
Their Lordships referred to several English authorities and case law on the subject including the following passage from Lindsay Petroleum Co. v. Prosper Armstrong Hurd (1874) 5 CP 221, in the pen of Sir Barness Peacock.-
Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or has by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay, are most material.
and stated the law in these words at page 1409 of the Report:
This passage indicates that either waiver or conduct equivalent to waiver along with delay may be a ground for refusing to give a decree for specific performance.... It is clear from these decisions that the conduct of party which puts the other party in a disadvantageous position, though it does not amount to waiver, may in certain circumstances preclude him from obtaining a decree for specific performance.
So far as the decisions of this Court are concerned, in Babu Rameshwar Prasad Sahi v. Mst. Anandi Devi , it was stated that mere delay is bringing the suit for specific performance will not disentitle the plaintiff to a decree for specific performance but if there is complete inaction for a bag time without any adequate explanation, that inaction debars the plaintiff to the equitable relief by way of specific performance. In Bhageran Rai v. Bhagwan Singh the parties had entered into a contract on 27th November, 1953 but the suit was filed on 23rd May, 1956, During the intervening period, the position of the parties had changed inasmuch as by registered deed the contractee-vendor had transferred the property in favour of other persons on 4th October, 1954. A Bench of this Court following an earlier Bench decision held that if the remedy available to the aggrieved party by bringing a suit for specific performance had not been availed for a period of 12 months, it would tantamount to an abandonment of contract or waiver of his rights to sue for specific performance. It was stated that a delay of this kind is always fatal to the plaintiff in suit for specific performance which is a discretionary relief." In Jitandra Nath Roy v. Smt. Maheshwari Bose , which was relied upon by the counsel for the appellants, it was observed that "delay was not material so long as matters remained in status quo and did not mislead the defendant or amount to acquiescence."
10. The law on the subject may be summarised in these words. Relief of specific performance is discretionary in nature, but the discretion has to be exercised reasonably in accordance with the sound judicial principles. Mere delay is not sufficient to refuse the relief but if the continued inaction on the part of the plaintiff in availing the legal remedy, by suit or otherwise, gives rise to long, unexplained delay amounting to waiver or acquiescence and in the meantime, during subsistence of the contract, status of the vendor has changed and third parties have acquired rights in good faith without notice and for value, the relief should ordinarily be refused.
11. In order to apply the aforesaid principle, it would first be necessary to see whether the defendants second party are bona fide purchasers of the property or not. According to the plaintiff's case, as set out in the plaint the sale deeds dated 14th August, 1968 were executed with full and prior knowledge of the impugned Mahadanama. The trial court has also held that the contesting defendant had knowledge about the Mahadanama. Learned Counsel for the appellants while challenging the aforesaid finding, took us through the evidence of the plaintiff's witnesses. P. Ws. 2 and 4 stated that the agreement with regard to the sale of 3.83 acres of land in favour of the plaintiff had been finalised in presence of Sadik Mian and Sharif Mian i. e. defendants second party. However, it would appear from the evidence of the plaintiff (P.W. 5) himself that at the time of finalisation of the agreement, besides the plaintiff and defendants 1 and 2, one Ram Chandre Hajam alone was present. In other words, the plaintiff's own evidence contradicts the statements made by P. Ws. 2 and 4. It appears to me that P. Ws. 2 and 4 made the aforesaid statement in their zeal to prove the plaintiff's case that the defendants second party had knowledge about the Mahadanama before they purchased the property. They appear to be more interested in the plaintiff's case than the plaintiff himself. Their evidence, in my view, is not worthy of reliance. There is no other positive evidence on behalf of the plaintiff suggesting that defendants second party had prior knowledge about the aforesaid agreement. The case of the defendants, on the other band, is that an agreement had already been entered into between defendants 1,2 and Mostt. Marchi for the sale of 2.92 acres of land in favour of the defendants second party on 1st April, 1968. A perusal of the Mahadanama (Ext. C) in favour of the defendants second party shows that an area of 2.92 acres of land had been agreed to be sold to them for Rs. 7.400/-. It is mentioned in the agreement that the vendor of the land would take necessary steps for obtaining the permission of the Consolidation Officer as required under the Consolidation Act. In the Mahadanama (Ext. 1) there is no statement in regard to taking such permission. Although, Mahadanama (Ext. C) has been written on plain paper bearing revenue stamp of ten paise, it has got more credibility than Ext. 1 in view of the recitals made therein. If the defendants wanted to bring into an existence and create an ante-dated document, they could have done so by scribing a proper document on stamp papers. The fact that no such attempt was made is a circumstances in favour of the defendants and makes their plea more natural and convincing. The sale deeds (Ext. D series) show that prior to the sale, permission of the Consolidation Officer had been obtained, vide Case No. 27 of 1968-69. Although, order-sheet of that proceeding has not been brought on record which could conclusively show the dates on which application for permission was made and permission was granted, nonetheless, it is obvious that all this must have happened some time prior to 14th August, 1968. One can take judicial notice of the fact that after application for sanction is filed under Section 6 of the Consolidation Act, notice in Form 1 of the Schedule and in conformity with Rule 4 of the Rules has to be issued and usually it takes at last few months to secure necessary orders of sanction. In my opinion, the defendants, case that an agreement had been entered into on 1st April, 1968 and pursuant thereto, the parties had taken steps to obtain the sanction of the Consolidation Officer appears to be more credible. It further appears to me that having learnt about the said agreement for the sale of 2.92 acres of land in favour of the defendants second party, the plaintiff offered higher sum of Rs. 12,206/- albeit for a larger area of 3.83 acres, and induced defendant No. 1 Mostt. Kawali to enter into an agreement with him. The fact, however, remains that an agreement had already come into existence on 1st April, 1968 and the concerned parties were taking necessary steps in pursuance thereof.
12. Once it is established that the plaintiff had knowledge about the sale of the property by Ext. D series dated 14th August, 1968, some time in April, 1969 but filed the suit only two years thereafter, the plaintiff was obliged to explain the aforesaid inordinate delay of two years. No explanation whatsoever, however, has been furnished. It was most unnatural on the part of the plaintiff that having advanced a sum of Rs. 4000/- as part performance of the contract, he did not take any further step in following up the contract. Although, the plaintiff claimed to have served a registered notice, there is no corroboration circumstances or evidence showing giving of any such notice. On these facts, delay amounts to waiver and it is difficult to condone the same.
13. The conclusion that follows from the above discussion is that defendants second party are the bona fide purchasers of 2,92 acres of land for valuable consideration. Section 20 of the Act, inter alia, provides that the discretion in granting the relief of specific performance is to be exercised reasonably, guided by sound judicial principles. If the plaintiff did not file the suit with reasonable despatch and during subsistence of the contract with him, defendants second party acquired rights in good faith and for value on the basis of prior agreement, it would not be a sound and reasonable exercise of discretion on the part of the Court to decree the suit for specific performance.
14. Mr. Janardan Prasad Singh in the course of arguments submitted that the plaintiff having paid a sum of Rs. 4000/- in part performance of the contract, his case should be liberally examined since equity lies on his side. In my opinion, it was open to the plaintiff to pray for an alternative relief for the rescission of the contract and refund of the amount. No such relief was claimed either in the suit or even at the appellate stage in this Court by way of amendment. It is not necessary to consider further the merits of the aforesaid submission.
15. On the basis of the aforesaid discussion, I held that the plaintiff is not entitled to the relief of specific performance of contract and the trial court has erred in decreeing the plaintiff's suit. This appeal is, accordingly allowed. The judgment and the decree of the trial court are set aside. The plaintiff's suit is, thus, dismissed. In the circumstances of the case, however, I shall make no order as to costs.