Andhra HC (Pre-Telangana)
Mohd. Abdul Razak vs B. Venkatesh @ Venkataiah on 16 March, 2006
Equivalent citations: AIR2006AP300, 2006(4)ALD118, 2006(3)ALT242, AIR 2006 ANDHRA PRADESH 300, 2007 (1) AJHAR (NOC) 9 (AP), 2006 (5) AKAR (NOC) 758 (AP), 2006 A I H C (NOC) 339 (AP), (2007) 1 CIVILCOURTC 176, (2006) 4 ANDHLD 118, (2006) 3 ANDH LT 242
JUDGMENT D. Appa Rao, J.
1. The unsuccessful plaintiff in O.S. 189/98 on the file of the learned II Additional District Judge, R.R. District, filed this appeal against the decree and judgment dated 28-2-2003 dismissing the suit filed for specific performance of an oral agreement of sale.
2. The parties are described as arrayed in the suit for felicity expression.
3. It is the case of the plaintiff that the defendant had entered into an oral agreement of sale with him for sale of Ac.0.12 guntas of site viz., 1452 sq. yards in Sy.No. 17/AA situated at Soug-Bowli village, Rajendernagar Mandal, R.R. District on 26-4-1997 for a consideration of Rs. 11,00,0007-, approximately at the rate of Rs. 757-50 ps per sq. yard. He paid Rs. 1,100/- as token advance amount for which the defendant gave receipt under Ex.A-1. Again on 30-4-1997 he paid Rs. 10,000/- to the defendant under Ex.A-2 receipt. The defendant agreed that on receiving balance of sale consideration before Sub-Registrar at the time of registration, he would execute a registered sale deed. In the month of May, 1997 when they went to the suit land for purpose of measuring the land, the defendant informed that there was a boundary dispute on the western side. On that he got a notice published in Deccan Chronicle under Ex.A-5 and Eenadu under Ex. A-6, calling for objections if any from the public for purchasing of the land. He got a reply published in Deccan Chronicle on behalf of Ashok Vihar Cooperative House Building Society, Hyderabad (for short 'the Society') claiming that the society had purchased the said land from Sri S. Mallaiah and another under registered sale deed dated 30-3-1990. Yet another notice got issued on behalf of Sudhakar Reddy under Ex.A-7 claiming right in respect of the land in Sy.No. 17/A and 17/AA. When questioned, the defendant informed that he would settle the dispute with the society and asked him to wait and that he would also obtain income tax clearance certificate required for the registration of sale deed. He has always been ready and willing to pay the balance sale consideration and when the defendant was postponing on one pretext or the other, he got issued a registered notice under Ex.A-8 dated 19-11-1998, calling upon the defendant to execute registered sale deed at least for the undisputed extent of 1052 sq. yards by receiving the proportionate consideration before Sub-Registrar, and that he could execute another sale deed in respect of the remaining disputed extent of 400 sq. yards upon settlement of the dispute with the society. The defendant, having received it under Ex.A-9 acknowledgment, issued a reply notice under Ex.A-10 dated 24-11-1998, requesting for the supply of the documents, referred to in Ex.A-9 as he was not aware of the receipts under Exs.A-1 and A-2, which were said to have been issued by him. He gave reply under Ex.A-13. The defendant pleaded that as the balance of sale consideration was not paid within 15 days from the date of oral agreement of sale dated 26-4-1997, he had cancelled the said agreement of sale and also forfeited the advance amount. On that he filed the suit for specific performance of oral agreement of sale or in the alternative for recovery of advance amount paid under the agreement of sale.
4. The defendant resisted the claim of the plaintiff. However, he admitted that there was an oral agreement of sale on 26-4-1997 with a stipulation that the balance of sale consideration shall be paid within 15 days as agreed upon by the plaintiff. In fact the plaintiff failed to perform his part of contract by paying balance of sale consideration and he intimated under the original of Ex.B-1 letter dated 19-5-1997, which he sent by certificate of posting under Ex.B-2 that he cancelled the agreement and also forfeited the advance amount. The dispute between him and the society has nothing to do with the suit transaction. In fact, the plaintiff was never ready to pay the balance of sale consideration. For the first time he demanded for the execution of sale deed on 19-11-1998 long after the agreement. For about 18 months he did not respond when he was informing about his dire need of money. After 18 months for the first time he gave notice on 19-5-1997 (sic. 19-11-1998). The plaintiff did not pay the entire sale consideration. Only after coming to know that there was increase in the market rate, he suddenly issued notice, demanding execution of the sale deed. The plaintiff has committed breach of trust and took advantage of his illiteracy as a villager. The suit is misconceived and therefore, prayed for dismissal of the suit with exemplary costs.
5. On the basis of the above pleadings, the trial Court has framed the following issues:
(1) Whether the plaintiff is entitled for specific performance of contract? (2) Whether the plaintiff is entitled for possession of the suit land by evicting the defendant? (3) Whether the suit is barred by limitation?
(4) Whether the court fee paid is not correct?
(5) To what relief?
6. The plaintiff in proof of his case examined himself as P.W.1 and filed Exs.A-1 to A-16, the receipts, publications and the reply received as earlier mentioned.
7. Refuting his evidence, the defendant examined himself as D.W.1, besides one Smt. Darshankur as D.W.2 who is said to have been present at the time of transaction covered under Exs.A-1 and A-2.
8. After considering the evidence placed on record and considering various circumstances, the learned District Judge opined that the plaintiff has failed to prove that he was ready and willing to perform his part of contract right from the date of entering into transaction i.e. 26-4-1997 till the date of filing of the suit. He could not prove that he was having requisite amount to pay the balance sale consideration. Since admittedly the defendant received Rs. 11,100/- towards advance a decree was passed for the said amount with subsequent interest at 12% p.a.
9. Aggrieved by the said decision, the plaintiff preferred this appeal, contending that the learned District Judge did not consider either facts or law in correct perspective. The learned District Judge had failed to see that it was the defendant who delayed the matter and responsible for not registering the sale deed and that he was always ready and willing to perform his part of contract. The learned District Judge had also failed to consider the mutually contrary pleas taken by the defendant in the matter, and that he ought to have decreed the suit for specific performance rather than granting refund of advance amount.
10. In view of the contentions, the point that arises for consideration is whether the plaintiff is entitled for specific performance of agreement of sale?
11. It is undisputed fact that the defendant is the owner of 1452 sq. yards of site in Sy.No. 17/AA situated at Sough Bowli village. He agreed to sell the suit schedule property to the plaintiff for a total consideration of Rs. 11,00,000/-. On 26-4-1997 the plaintiff has paid Rs. 1,100/- to the defendant under receipt Ex.A-1. After 4 days i.e. on 30-4-1997 he paid Rs. 10,000/- under receipt Ex.A-2. In Ex.A-1 there was a mention that the balance of sale consideration will be paid as per the extent of the land, available after final measurements.
12. P.W.1 in his evidence deposed that when the land was got measured by a private surveyor in the month of May, 1997, the defendant informed that there was a boundary dispute on the northern side with one Ashok Vihar Co-operative House Building Society and as such asked him to wait for sometime to settle the dispute, on that he got a notice published in Deccan Chronicle and Eenadu, evidenced under Exs.A-4 and A-5. Ashok Vihar Co-operative House Building Society gave a reply in Ex.A-6. Another legal notice Ex.A-7 was issued on behalf of one S. Subhash Reddy of Upperpalli village, where under he advised not to purchase land in respect of Sy.No. 17/A and 17/AA. D.W.1 refutes the said version. According to him, there was no dispute with Subhash Reddy or with the Ashok Vihar Co-operative House Building Society with regard to suit land. It relates to altogether a different property. The said theory was introduced only to gain time.
13. P.W.1 himself admitted in the very chief-examination that the dispute with S. Subhash Reddy was settled as the land claimed by him is different from the suit schedule land, which he intended to purchase. In regard to the dispute with Ashok Vihar Cooperative House Building Society, there was exchange of sites between them, evidenced under Exs.A-14 and A-15. While Ashok Vihar Co-operative House Building Society executed a sale deed in favour of D.W.1 for an extent of 375 sq. yards, D.W.1, in turn executed sale deed in favour of society, admeasuring 374 sq. yards.
14. The trial court after considering the evidence placed on record, opined that there was no dispute in regard to the suit schedule property either with the Subhash Reddy or with the society. The plaintiff issued a public notice when the defendant informed him that there was a dispute in regard to the site towards northern side. The society claimed by way of publication in Deccan Chronicle under Ex.A-6 to an extent of 12 guntas in Sy.No. 17/AA, said to have been purchased from one S. Mallaiah and another under a registered sale deed dated 30-3-1990 and that the society was in possession of the said property. Ex.A-16 the very sale deed filed by the plaintiff would show that the said property has nothing to do with the suit schedule property. The boundaries mentioned in the said document and in the plaint schedule are entirely different. When the plaintiff alleges that there was dispute between the society and the defendant, which was subsequently settled after filing the suit, the trial court opined that the said contention was false. In Ex.A-1, there was no mention of the boundaries. What all the defendant stated was that he would sell Ac.0.12 guntas in Sy.No. 17/AA. The contention of the plaintiff that there was a genuine dispute between the parties was not accepted, which finding cannot be assailed being based on documentary or oral evidence.
15. Admittedly, P.W.1 is a post-graduate in MBA, doing business in iron and steel scrap. On the day when the deal was made on 26-4-1997 P.W.1, with his own handwriting, executed Ex.A-1 receipt. Four days thereafter he paid Rs. 10.000/- and scribed another receipt Ex.A-2. When the plaintiff issued a notice, demanding the defendant to execute a registered sale deed under Ex.A-11, the defendant asked the plaintiff to furnish Xerox copy of receipts. Accordingly, the plaintiff supplied the Xerox copies of the same.
16. The learned Counsel for the plaintiff contended that in order to evade giving a reply, such course was adopted seeking Xerox copies of documents. In fact, they were furnished to him. Suggestions were made to P.W.1 that there was interpolation by mentioning 'agreement of sale' over the receipt marked as Ex.A-1, and in Ex.A-2 the words that 'the remaining amount would be taken at the time of registration.' This contention was not taken in the trial Court as could be seen from the judgment. The learned Counsel for the defendant referred to the cross-examination of P.W.1 on this aspect. P.W.1 stated in the cross examination that "I scribed Ex.A-1. After Ex.A-1 was executed by the defendant, I supplied Xeroxcopy thereof to the defendant. Under Ex.A-2 I paid additional amount of Rs. 10,000/- to the defendant under Ex.A-2. Ex.A-2 was also scribed by me. I had supplied Xerox copy of Ex.A-2 simultaneously to the defendant. The defendant came to my office and collected the amount, I paid him under Ex.A-2. The Xerox copies which are shown to me (which are confronted to the witness and which are filed with a memo at the time of cross-examination) and the Xerox copies of Exs.A-1 and A-2 except to the extent that the signature of the 2nd attestor is not seen in the Xerox copies, which are shown to me. The witness volunteers and adds: that the Xerox copies which are shown to him were not the Xerox copies that were supplied to the defendant on his request for supply of Xerox copies. In Ex.A-1 it was not mentioned that the balance of sale consideration amount would be paid at the time of registration of document.
Q. It is suggested to you that prior to the filing of the suit you had changed the receipt Ex.A-1 as an agreement of sale by putting the caption "Agreement of Sale". What do you say?
Ans: I had never changed the Ex.A-1 and the words "Agreement of sale" were written in Ex.A-1 on the day of Ex.A-1 itself.
It is not true to say that subsequent to execution of Ex.A-2 I had incorporated in Ex.A-2 that the balance of sale consideration would be received (by the Executant of Ex.A-2) at the time of registration and that I made the said incorporation for the purpose of this suit.
17. Since both the parties did not canvass the question as to the interpolation before the trial court rendering the agreement inoperative, there is no need to consider the aspect of this matter. The only question that arises for consideration is whether the plaintiff was ever ready and willing to perform his part of contract. The defendant alleges that he was in dire need of money and therefore, he entered into an oral agreement of sale with the plaintiff by taking a small token amount as advance. As against Rs. 11,00,000/- he received only Rs. 11,000/-. The plaintiff disputed the said fact. He alleged that the defendant agreed to get the dispute with neighbour settled and further that he would get income tax clearance, before execution of the sale deed. Admittedly, no such condition was stipulated in Ex.A-1 or in Ex.A-2. Though publication was made by the plaintiff, calling for the objections, they were found to be unsubstantiated in the sense that his claim was found to be false. After all the plaintiff did not make any attempt either immediately paying the amount and getting the sale deed executed in his favour, nor issuing a notice to the defendant asking him to execute sale deed for the undisputed portion of the site.
18. For the first time under Ex.A-8 he offered to purchase undisputed 1050 sq. yards. It is the specific contention of the defendant that the plaintiff was not having money; therefore, he was postponing the execution of the sale deed. Indeed the contention that the plaintiff agreed to pay the balance of sale consideration within 15 days from the date of agreement of sale is not substantiated. Evidently there is no recital in Ex.A-1 that the plaintiff would pay the remaining balance within 15 days.
19. However, the burden is on the plaintiff to prove that he had the balance of sale consideration with him and he was ready and willing to perform his part of contract throughout. P.W.1 failed to establish the same. When questioned, P.W.1 stated that "I do not remember how much amount exactly I was having in my Bank Account by the time I issued Exs.A-4 and A-5 notices published in a newspaper.
He gave following answers to the questions put:
Q: Do you produce the Bank Account to show that you were ready with the balance of sale consideration amount by the time of Exs.A-4 and A-5? Ans: I never said that I kept the balance sale consideration amount in my Bank Account. Q. Will you produce copy of your Bank Account by the time Exs.A-4 and A-5? Ans: Yes.
20.The Bank account was never produced. He could not prove that he was having that amount with him. In fact, he stated, "By borrowing monies from the Market I intended to pay the balance of sale consideration amount." This would undoubtedly show that P.W.1 was not having any money and that was why he was creating one ground or the other to postpone payment of amount taking advantage of Exs.A-1 and A-2 with him.
21. The learned Counsel for the appellant mainly contended that D.W. 1 did not mention about the cancellation of agreement in Ex.A-10. Had there been such cancellation, he would have mentioned in Ex.A-10. This contention is taken for the first time at the time of trial to defeat his claim.
22. As could be seen from the pleadings as well as evidence on both sides, each party is throwing blame against other. Section 9 of the Specific Relief Act, 1963 (for short 'the Act') enables a defendant to raise, in a suit of specific performance, all those defences which he is eligible in a suit on contract. Section 10 enumerates the cases in which specific performance can be granted. Specific performance is a discretionary remedy. Section 16 lays down grounds on which the relief may be refused to the plaintiff on account of his conduct; and Section 20 direct the circumstances in which the discretion may or may not be exercised in granting the relief. It is settled proposition of law that where time is of the essence of the contract, and the plaintiff has failed to perform his part of the contract within the stipulated time, specific performance can be refused. Time, in contracts for sale of immovable property, is not of the essence of the contract, unless the nature of the property and surrounding circumstances make it so. Equity treats limits of time as supporting to the main purpose of the parties. So long as the plaintiff is willing to make payment on or before the date which was prescribed or within a reasonable time, the ordinary presumption, that the time is not of essence of the contract of sale of immovable property, would not be displaced. It is said that where the time is not of the essence of the contract for sale of immovable property, some delay in payment of consideration money is no bar to specific performance; provided the delay has caused no prejudice to the defendant or abandonment by the plaintiff or such a change as would make the relief inequitable. If a plaintiff is negligent and dilatory in carrying out his part of the contract for sale of immovable property, the plaintiff cannot get his contract specifically performed.
23. We may also mention herein that rules evolved by the courts that time is not of the essence of the contract in the case of immovable properties, were evolved in times when prices and values were stable and inflation was unknown, and were required to be relaxed, particularly in the case of urban immovable properties. The Supreme Court, in K.S. Vidyanadam v. Vairavan AIR 1997 SC 1751, has sounded a word of caution in the application of this principle.
24. We may reiterate that the relief of specific performance is discretionary and it is not given merely because it is lawful to do so, but it is governed by sound judicial principles. The grant of this relief is the discretion of the court, and cannot be claimed as a matter of right. But, however, the discretion shall not be arbitrary; it should be governed by rules and principles.
25. The discretion exercised by the trial Court will not be interfered with in appeal unless it has been exercised perversely, arbitrarily, capriciously, unreasonably or against judicial principles. It is not possible or desirable to lay down the circumstances under which the court can exercise its discretion against the plaintiff.
26. The trial Court has opined that in the facts and circumstances, the contention of the plaintiff that the balance of sale consideration amount shall be paid after the defendant gets income tax clearance cannot be accepted. The other contention in view of the dispute between the society and third party the plaintiff could not obtain sale deed was also not found favour with the trial Court. The very plaintiff admitted that the dispute raised by Subhashreddy does not pertain to the suit land, equally so with the claim of the society. It was categorically held that the said exchange of the sale deeds with respect to the schedule lands mentioned therein have nothing to do with the offer of the defendant to sell the plaintiff an extent of Ac.0.12 guntas in Sy.No. 17/AA. These findings were arrived after considering all the documentary and oral evidence placed on record. They are well reasoned and cannot be set at naught on the mere fact that equally different findings can be arrived.
27. Obviously in order to get over the delay in payment of balance of sale consideration amount, the plaintiff introduced a plea that the defendant agreed to produce the income tax clearance certificate for execution of the sale deed. The said stipulation was not made a mention either in Ex. A-1 or in Ex. A-2. The trial Court relied on a decision of the Supreme Court in Smt. Chand Rani (Died) by LRs v. Smt. Kamal Rani (Dead) per LRs. AIR 1993 SC 1742 for the proposition that the purchaser who was not willing to make payment of the amount within specified time without fulfillment of some conditions, which were contrary to agreement is not entitled to specific performance of contract. Out of Rs. 11,00,000/-, the plaintiff had merely paid Rs. 11,100/-. The defendant pleaded categorically that the plaintiff was not having the remaining balance of sale consideration. It was his case that he cancelled the agreement and forfeited the advance amount. The plaintiff could not prove that he was having requisite amount. He did not file account though he was businessman. He did not file bank account to show that he has capacity to pay the balance amount. Naturally, if the specific performance is ordered, it would cause injustice to the defendant. The plea of the defendant that he had cancelled the agreement and forfeited the advance amount was not found favour with the trial Court. There was no proof that he sent Ex.B-1. Had it been sent, it would have been mentioned in the subsequent registered notice. Considering the fact that the agreement was of 1977 and the plaintiff having failed to prove that he had the amount with him and in view of his conduct, the trial court refused to grant specific performance. It cannot be said that the finding arrived at by the trial court was perverse or illegal.
28. The learned Counsel for the appellant contended that when the appellate court directed him to deposit the amount the plaintiff had deposited the amount of balance sale consideration. The learned Counsel for the defendant contended that the order was ex parte and in fact, he was not aware of the fact. He further contended that procuring the remaining consideration after 10 years of the contract would not be difficult, more so when the prices of real estate was escalated beyond one's imagination. The Court has to take judicial notice of the high escalation of immovable properties in and around of Hyderabad. If the agreement is enforced at this juncture, he will suffer great and irreparable loss. The defendant is illiterate and a poor man and he should not be made to suffer for the laziness on the part of the plaintiff.
29. We have gone through the evidence placed on record. The plaintiff could not prove that he was ready and willing to perform his part of contract althrough. There were laches on his part in performing his part of contract; consequently the defendant cannot be directed to execute a registered sale deed. Therefore, we hold that the alternative relief of refund of advance was rightly ordered. There is no need to interfere with the findings arrived at by the trial Court.
30. In the result, the appeal is dismissed. However, in the circumstances, there is no order as to costs.