Karnataka High Court
Shri. C.H. Manilal S/O. ... vs K Ramachandra Raju S/O. Anjaneya Raju on 26 July, 2024
Author: Mohammad Nawaz
Bench: Mohammad Nawaz
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NC: 2024:KHC-D:10619-DB
RFA No. 100299 of 2018
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 26TH DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE MOHAMMAD NAWAZ
AND
THE HON'BLE MR JUSTICE T. G. SHIVASHANKARE GOWDA
REGULAR FIRST APPEAL NO. 100299 OF 2018 (SP)
BETWEEN:
SHRI. C.H. MANILAL,
S/O. PATTABHIRAMAYYA
AGE:47 YEARS, OCC: BUSINESS AND AGRICULTURE,
R/O: MOHAMMED NAGAR,
KOPPAL-583231.
...APPELLANT
(BY SRI. K.L. PATIL, ADVOCATE)
AND:
K. RAMACHANDRA RAJU S/O. ANJANEYA RAJU
AGE:68 YEARS,
OCC: CHARTERED ACCOUNTANT AND AGRICULTURE,
R/O: SULTANPUR-583231,
TQ. AND DIST:KOPPAL,
Digitally signed NOW RESIDING AT FLAT NO.1003, BLOCK NO.13,
by GIRIJA A
BYAHATTI HILL RIDGE SPRINGS, GACHIBOWLI,
Location: HIGH
COURT OF
HYDERABAD-500032, ANDHRA PRADESH STATE.
KARNATAKA
... RESPONDENT
(BY SRI. S.H. MITTALKOD, ADVOCATE)
THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96
R/W ORDER XLI RULE 1 CPC., AGAINST THE JUDGMENT AND
DECREE DATED 11.06.2018 PASSED IN O.S.NO.95/2014 ON THE
FILE OF THE SENIOR CIVIL JUDGE, KOPPAL, PARTLY DECREEING THE
SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 09/07/2024 AND COMING ON FOR 'PRONOUNCEMENT
OF JUDGMENT', THIS DAY, T.G.SHIVASHANKARE GOWDA J.,
PRONOUNCED THE FOLLOWING:
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NC: 2024:KHC-D:10619-DB
RFA No. 100299 of 2018
CORAM: HON'BLE MR. JUSTICE MOHAMMAD NAWAZ
and
HON'BLE MR.JUSTICE T. G. SHIVASHANKARE GOWDA
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE T. G. SHIVASHANKARE GOWDA) In this appeal, the plaintiff has challenged the judgment dated 11.06.2018 passed in O.S.No.95/2014 by the Senior Civil Judge at Koppal (hereinafter referred to as 'the Trial Court', for short), in refusing to grant the relief of specific performance and directing the defendant to refund an advance amount with interest at 18% p.a.
2. The appellant was the plaintiff and respondent was the defendant before the Trial Court. For the sake of convenience, the rank of the parties will be referred to as per their status before the Trial Court.
3. The brief facts of the case are, the land in R.S.No.14/1 measuring 01 acre, 14/3 measuring 05 acres and 14/4 measuring 05 acres, situated in Sultanpur village, Taluk and District Koppal, is belonging to the -3- NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 defendant. The defendant approached the plaintiff for alienation of the said properties for his legal necessity on 23.05.2014, agreeing to sell the said lands for a consideration of Rs.16,50,000/- and received part consideration of Rs.10,00,000/-. It was further agreed by the defendant that balance consideration of Rs.6,50,000/- will be received at the time of registration of the sale deed within three months. The defendant executed a registered agreement of sale on 23.05.2014 receiving the part consideration.
3(a) In the first week of August 2014, plaintiff called upon the defendant to receive balance consideration of Rs.6,50,000/- and to execute the sale deed. The defendant sought for more time to execute the sale deed as it was not convenient for him to come to Koppal from Hyderabad where he resides.
3(b) In spite of repeated requests, defendant did not come forward to execute the sale deed by receiving balance consideration. Hence, on 17.09.2014, a notice -4- NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 was issued calling upon the defendant to execute the sale deed and reply was received on 08.10.2004 contending that the sale consideration was Rs.29,60,000/- and asking the plaintiff to pay Rs.13,10,000/- in addition to Rs.6,50,000/- for execution of the sale deed. As the defendant failed to execute the sale deed, the plaintiff has filed the instant suit.
4. The defendant has opposed the suit by filing the written statement contending inter alia that, he is the owner of the suit schedule properties, he has agreed to sell the suit properties for a consideration of Rs.29,60,000/-, wherein the plaintiff obtained the registered agreement of sale for a consideration of Rs.16,50,000/- only and outside the agreement, he has issued two cheques, one for Rs.10,00,000/- and one cheque for Rs.3,10,000/- and instructed the defendant to present the cheque during August, 2014 and further he will pay the balance consideration of Rs.6,50,000/- within -5- NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 three months and get the sale deed registered on or before 23.08.2014.
4(a) It was agreed that, time was the essence of contract and the cheques issued by the plaintiff came to be dishonoured and consideration was not paid as agreed and dishonour of cheques was intimated to the plaintiff through notice dated 09.09.2014. In stead of performing his part of contract by paying the balance consideration including the cheque dishonoured amount, the plaintiff issued legal notice on 17.09.2014 and the same was replied by defendant on 08.10.2014.
4(b) The plaintiff was informed about cancellation of the agreement dated 23.05.2014 and that Rs.10,00,000/- advance will be returned on execution of the Cancellation Deed before the Sub-Registrar office, Koppal. In stead of complying the same, the plaintiff has ventured into filing the suit and sought for its dismissal.
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5. Based on the pleadings, the Trial Court has framed following issues:
i. Whether the plaintiff proves that he is/was ready and willing to perform his part of the contract?
ii. Whether the defendant proves that the plaintiff has failed to perform his part of the contract under the agreement of sale?
iii. Whether the plaintiff is entitled for the relief of specific performance of the contract?
iv. Whether plaintiff is entitled for the relief of refund of consideration amount with interest as sought?
v. What order or decree?
6. In order to prove the above issues, on behalf of the plaintiff, he himself is examined as PW1 and got marked 10 documents as Exs.P1 to P10. On behalf of the defendant, the GPA of the defendant and one witness are examined as DW1 and DW2 and got marked 13 documents as Exs.D1 to D13.-7-
NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018
7. After hearing both sides, the Trial Court recorded its negative finding in respect of issues No.1 and 3 and affirmative finding in respect of issues No.2 and 4 and while answering issue No.4, rejected the claim of the plaintiff for specific performance and ordered for refund of advance money of Rs.10,00,000/- with interest at 18% p.a. Aggrieved by the same, plaintiff seeking execution of sale deed, has filed the present appeal on various grounds.
8. We have heard the arguments of Sri. K. L. Patil, learned counsel appearing for the plaintiff/appellant and Sri.S. H. Mittalkod, learned counsel appearing for the defendant/respondent.
9. It is contended by the learned counsel for the plaintiff that, the defendant has admitted execution of the sale agreement. Major portion of the consideration amount of Rs.10,00,000/- out of Rs.16,50,000/- was paid to the defendant. The plaintiff has pleaded his readiness and willingness in the plaint, proved the same by placing -8- NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 evidence. Even in the cross-examination of the plaintiff, it has been brought out that more than five lakh rupees is available in the bank account of the plaintiff. There is no need to have the ready cash at all the times. The plaintiff is a businessman having agricultural lands and he has the capacity to pay and arrange balance sale consideration. There is no pleading by the defendant that the plaintiff has weak financial position. In spite of several requests made by the plaintiff, the defendant has not come forward. 9(a) It is further contended that, time will not be the essence of contract. There is no forfeiture clause in the agreement and defendant has unilaterally cancelled the agreement. The GPA holder of the defendant did not have personal knowledge about the transaction nor is he the signatory to the agreement. His evidence without personal knowledge is not believable. 9(b) The defendant failed to substantiate that the consideration agreed upon was Rs.29,60,000/-. Contrary to the same, the Power of Attorney holder of defendant -9- NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 admits in his cross-examination that, as per the agreement, balance sale consideration to be paid is only Rs.6,50,000/-.
9(c) It is also contended that, the Trial Court has failed to note the fact that, there is no need for proving of agreement, as it is already admitted. In spite of admitted documents, no oral evidence is permitted to alter the terms of contract. The plaintiff has proved the consideration agreed upon and part payment made to the defendant. Readiness and willingness of the plaintiff is explained through evidence. Though it is a case for grant of specific performance, which does not involve any hardship to the defendant, denial of specific performance has caused hardship to the plaintiff having paid major portion of the consideration amount. The order of refund is not justifiable and sought for grant of specific performance.
9(d) To buttress his argument, learned counsel has relied upon the judgment of the Hon'ble Supreme Court in
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 the case of P. Daivasingamani Vs. S. Sambandan1.
10. Per contra, learned counsel for the defendant has contended that, the total consideration agreed upon was Rs.29,60,000/- and not Rs.16,50,000/-. In order to substantiate the same, outside the agreement, plaintiff has issued two cheques under Exs.D3 and D4, drawn from Oriental Bank of Commerce, in favour of the defendant, asking to encash the same on 23.08.2014, along with the letter under Ex.D10. The recitals of Ex.D10 explains, under the agreement - Ex.P1 sale consideration was fixed. payments were through RTGS at Rs.10,00,000/-, one cheque for Rs.10,00,000/-, one cheque for Rs.3,10,000/- paid and agreed to pay remaining Rs.6,50,000/- at the time of registration of the sale deed.
10(a) The cheques under Exs.D3 and D4 have been dishonored on presentation and therefore, the defendant has caused notice to the plaintiff on 09.09.2014. Instead of honouring the cheques, the plaintiff issued notice on 1 AIR 2022 SC 5009
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 17.09.2014. In the cross-examination of the plaintiff, it is brought out that the plaintiff has no sufficient money in his bank account. Even if Exs.P9 and P10 - bank passbooks are accepted, the balance available in the account of the plaintiff is only Rs.2,02,000/- as on 31.07.2014 and Rs.3,05,000/- as on 25.12.2014. At no point of time from the date of agreement till the date of performance of agreement, the plaintiff has sufficient money in his bank account and no evidence is placed that he has arranged the money and offered the same to the defendant. 10(b) It is further contended that, time is the essence of contract, it is recited in the agreement. Time as admitted by the plaintiff and defendant is three months for performance of contract. During the said period, the plaintiff did not offer any money nor issued notice to the defendant calling upon him to execute the sale deed. Under Ex.P8 - notice, reply was issued to the plaintiff narrating that the sale consideration agreed was Rs.29,60,000/- and not Rs.16,50,000/-. Therefore, the
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 Trial Court has rightly analysed that the plaintiff is/was ever ready and willing to perform his part of contract, as he has no sufficient funds in his account and rightly ordered for refund of advance money.
10(c) To buttress is argument, learned counsel relied upon the judgment of the Hon'ble Supreme Court in the case of U. N. Krishnamurthy (since deceased) Thr. Lrs Vs. A. M. Krishnamurthy2.
11. We gave our anxious consideration to the arguments addressed on behalf of both the parties and perused the evidence and also the impugned judgment.
12. Ex.P1 is the agreement entered into between the plaintiff and defendant. Since the execution is not in dispute, the Trial Court has framed issue No.1 in respect of readiness and willingness on the part of the plaintiff. We have perused the evidence of the plaintiff as well as the witnesses examined on behalf of the defendant. The execution of the agreement and part payment of 2 2022 SCC OnLine SC 840
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 Rs.10,00,000/- has been established. In the cross- examination of the plaintiff, Exs.D3 and D4 - cheques have been confronted to the plaintiff, who denied the signature found therein. The evidence explains that Exs.D3 and D4
- cheques belonging to the plaintiff and at the relevant point of time, the accounts pertaining to the said cheques has been operated by him. The defendant disputed the sale consideration of Rs.16,50,000/-, claiming it as Rs.29,60,000/-.
13. The agreement came into existence on 23.05.2014. Ex.P5 is the notice issued by the plaintiff to the defendant on 17.09.2014. There is recital in the agreement that balance consideration has to be paid to the defendant within 3 months. The plaintiff admits that, no notice was issued to the defendant within 3 months. In Ex.P8 - reply notice, the defendant claimed that Exs.D3 and D4 are issued in favour of the defendant outside the said agreement. On 09.09.2014, the defendant issued
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 notice to the plaintiff, expressing that he is not interested to sell the properties and he is canceling the agreement.
14. It is pertinent to note that, the defendant has produced letter dated 28.08.2014 as per Ex.D9 along with postal receipt at Ex.D1 intimating about Exs.D3 and D4 - cheques issued by the plaintiff in connection with sale of lands and he called upon the plaintiff to complete the transaction on 23.08.2014, intimating the plaintiff that he is going to present the said cheques of Rs.10,00,000/- and Rs.3,10,000/- for encashment on 28.08.2014. Accordingly the cheques were presented and they came to be dishonoured as per the endorsement issued by the bank as per Exs.D6 and D7. The defendant based his evidence under Ex.D10, which carry the signature of the plaintiff. The plaintiff denies his signature. The recitals in Ex.D10 goes to explain the transaction between plaintiff and defendant under Ex.P1 and amount of Rs.10,00,000/- received through RTGS by the defendant from the plaintiff. Exs.D3 and D4 cheques drawn from Oriental Bank of
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 Commerce dated 23.08.2014 was issued and Rs.6,50,000/- was agreed to be paid at the time of registration.
15. The plaintiff seriously disputed Ex.D10. Plaintiff and defendant are well educated, one is businessman and another is a Chartered Accountant. By production of Exs.D3 and D4 cloud is created against the plaintiff. The plaintiff is the owner of these cheques and he has to explain how these cheques were gone to the hands of the defendant.
16. In this regard we have perused the evidence of the plaintiff. We do not find any explanation nor in the course of cross-examination of DW1, anything suggested in the nature of explanation, under what circumstance Exs.D3 and D4 came to the hands of the defendant. It is not the case of the plaintiff that he had any earlier financial transaction with the defendant and these cheques were issued in connection with the said transaction. When the defendant is the holder of the cheques belonging to
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 the plaintiff, it is for the plaintiff to explain how these cheques have been gone to the hands of the defendant, otherwise adverse inference has to be drawn against the plaintiff.
17. We have carefully perused the evidence of the GPA holder of the defendant, so also his cross-examination on behalf of the plaintiff.
18. DW1 is the GPA holder. He admits the sale consideration mentioned in Ex.P1 as Rs.16,50,000/-. He is not the signatory to Ex.P1. Is unaware of the contents of Ex.P1 though present during the negotiation on 23.05.2014. DW3 has informed him personally about cancellation of the agreement.
19. As we referred above, Exs.D9 and D10 are the letters of the plaintiff in connection with issuing of Exs.D3 and D4 - cheques. Ex.D9 refers to transaction under Ex.P1. It is admitted that, the agreement was executed on 23.05.2014 and the time mentioned for paying the
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 balance consideration of Rs.6,50,000/- is 3 months, that is on or before 23.08.2014.
20. As referred above, plaintiff never approached the defendant offering balance consideration on or before 23.08.2014. This goes to show that the plaintiff has not paid the balance consideration of Rs.6,50,000/- within 3 months as recited in Ex.P1. Even we have not found any explanation from the plaintiff why he has not approached the defendant within 3 months offering to pay balance consideration of Rs.6,50,000/- and asking him to execute the sale deed. From this, it is very much clear that the evidence of the plaintiff is not sufficient to hold that he was acted in terms of Ex.P1.
21. The main issue is readiness and willingness of the plaintiff. Plaintiff has produced Exs.P9 and P10 - Bank Passbooks. As referred supra, the balance amount in the bank, even together will not exceed more than Rs.3,05,000/- as on 30.06.2014. The plaintiff is required to explain his readiness and willingness to perform his part
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 of contract. First time the plaintiff came out with a notice on 17.09.2014 calling upon the defendant to execute the sale deed. There is no explanation for belated notice and in this regard, the evidence of the plaintiff is not convincing.
22. Adverting to the argument of the learned counsel for the plaintiff, the conduct of the plaintiff is not a ground for refusing specific performance and the suit is filed within 3 years. The Hon'ble Apex Court in P. Daivasingamani's case (supra) held that, the delay in payment of full consideration would go to the advantage of the plaintiff, which will be a relevant consideration to examine the readiness and willingness of the plaintiff. The plaintiff though averred that he is ready and willing to perform his part of contract, the Hon'ble Apex Court in this judgment referring to Section 16(c) of the Specific Relief Act, held that the plaintiff must aver performance of contract, or readiness and willingness to perform contract according to its true construction. If that is shown, there
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 is compliance of Section 16(c). In order to accept the readiness and willingness of the plaintiff, the plaintiff is required to aver his readiness and willingness.
23. As discussed supra, though Ex.P1 carry 3 months time for payment of balance consideration, the plaintiff never pleaded that he has offered payment of the balance consideration of Rs.6,50,000/- to the defendant within 3 months, rather a letter under Ex.D9 indicate that, on 28.08.2014, the plaintiff was informed about the transaction under Ex.P1 on 23.05.2014 and his liability to pay the balance consideration on or before 23.08.2014, with an intimation that the cheque under Exs.D3 and D4 are being presented on that day expressing his readiness to register the sale deed. This goes to show that, above the Ex.P1, parties have done some more transaction.
24. The Hon'ble Apex Court in U. N. Krishnamurthy's case (supra), held that the plaintiff not only to aver and prove his readiness and willingness to perform an obligation to pay money in terms of the
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 contract, he has to show the availability of funds to make payment in terms of the contract in time. At para 48 of the judgment, the Hon'ble Apex Court specifically observed that, the plaintiff if failed to prove his readiness and willingness to perform his part of contract from the date of execution of the agreement till date of decree, which is a condition precedent for grant of relief of specific performance, the plaintiff was not entitled for the relief of specific performance. The conduct of the plaintiff if shows that he is trying to take time to discharge his part of contract, it is a case for refund of money and not a case for grant of specific performance.
25. In view of the law laid down by the Hon'ble Apex Court referred to supra, the conduct of the plaintiff is very relevant at the relevant point of time. As referred to supra, the recital of Ex.P1 that 3 months time is granted for payment of balance consideration, but only after 4½ months the plaintiff issued notice calling upon the defendant to execute the sale deed, in fact, the first notice
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 issued from the defendant on 28.08.2014, informing that as per the agreement the transaction is to be completed by 23.08.2014 and presentation of cheques - Exs.D3 and D4. If really time was not agreed as essence of contract, why in Ex.D9 defendant reminds the plaintiff that the time was agreed to be the essence of contract.
26. Section 91 of the Evidence Act contemplate that, the oral evidence is not permissible to controvert the terms of the documents. The explanation is culled out in Section 92 of the Evidence Act that the evidence is permissible to explain the real nature of transaction between the parties.
27. On 17.09.2014, the notice of the plaintiff under Ex.P5 was replied with a specific averment that the agreed consideration was Rs.29,60,000/-, part consideration was also paid through Exs.D3 and D4 and balance consideration of Rs.6,50,000/- to be paid at the time of registration of sale deed. Even otherwise the consideration is accepted to be Rs.6,50,000/-, the plaintiff
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 failed to place evidence to show that he has sufficient funds in his hands within 3 months from the date of the agreement. Even Exs.P9 and P10 are accepted, money available in the hands of the plaintiff during the subsistence of the agreement is not more than Rs.3,05,000/-.
28. The plaintiff claims to be a businessman holding agricultural lands. That is not sufficient to specify his readiness and willingness as is required to show to the defendant that he was always ready and willing to perform his part of contract, holding the money in his hands.
29. In U. N. Krishnamurthy's case (supra), the Hon'ble Apex Court referring to the case of Chand Rani Vs. Kamal Rani3, referred to that, in case of sale of immovable property there is no presumption as to time being the essence of contract. Even if it is not of the essence of contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident): 3
(1993) 1 SCC 519
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 i. from the express terms of the contract; ii. From the nature of the property; and iii. From the surrounding circumstances, for example, the object of making the contract.
30. The defendant is a Chartered Accountant residing in Hyderabad and plaintiff is a businessman residing in Hospete. They are all highly learned people and they knew the pros and consequences once of the terms of agreement. We cannot ignore that, in case of sale deeds, in order to avoid payment of stamp duty, parties generally undervalue the consideration amount, and acting outside the agreement by receiving the cash consideration. This aspect cannot be unknown even in respect of the plaintiff and defendant.
31. Hence the circumstances clearly point out that the plaintiff has failed to place convincing evidence that he is/was ready and willing to perform his part of contract from the date of agreement till the date of notice on 17.09.2014.
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32. The Trial Court has framed issue No.2 in respect of the time is the essence of contract, as contemplated in the agreement. We have carefully perused the evidence and pleading to this extent. As referred supra in U. N. Krishnamurthy's case, in case of an agreement with respect to immovable property, time is not essence of contract. But in Ex.P1 - agreement, it is specifically mentions the terms providing date of payment of balance consideration as three months. As admitted by the plaintiff, he has not paid the balance consideration nor offered to defendant to pay consideration within three months. From this we can draw an inference that plaintiff failed to perform his part of contract. From this conduct of the plaintiff, it is very clear that he is not ready to get the sale deed registered within 3 months and the explanation that the plaintiff issued cheques at Exs. D3 and D4, outside the terms of agreement cannot be ignored. Hence we are of the opinion that time agreed upon for payment of balance consideration has not been acted upon by the plaintiff.
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33. Another issue framed by the Trial Court and also discussed is the grant of specific performance in favour of the plaintiff. As we discussed from the pleadings, the extent of land agreed to be sold was 10 acre 21 guntas. The sale price is fixed at Rs.16,50,000/- according to the recital in the agreement. The defendant claims it is Rs.29,50,000/-. To substantiate the same, defendant relies on Ex.D10, so also Exs.D3 and D4. The plaintiff is the owner of the said cheques and he has failed to explain how the said cheques came to the hands of the defendant. These cheques were dishonoured and the same has been intimated to the plaintiff by a notice dated 09.09.2014 by the defendant. Instead of replying to the said notice, plaintiff issued notice on 17.09.2014, calling upon the defendant to execute the sale deed. Even on that day, the evidence produced at Exs.P9 and P10 and also the oral evidence did not point out that the plaintiff was having enough funds to pay balance consideration of Rs.6,50,000/-.
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018
34. Section 16(c) of the Specific Relief Act is clear that compliance of the same Court is bound to grant specific performance. If there is no compliance, the Court is not bound to grant specific performance. The specific performance cannot be granted arbitrarily, unless the Court satisfies that it is a case for grant of discretion. The agreement provides clear terms that for performance, time should be treated as essence of contract. The documentary evidence placed by the plaintiff clearly explains that he was not having enough funds in his hands on the date of issuing notice.
35. Section 20 of the Specific Relief Act reads as follows:
20. Substituted performance of contract.-(1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.
36. The Trial Court read Section 20 of the Specific Relief Act to understand that it is the discretion of the Court in granting or not granting the relief of specific performance and it is not arbitrary, but discretionary governed by the rules of equity. If the plaintiff proves his case, the Courts will have no jurisdiction to refuse the
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 specific performance. In proving the same, as referred supra, the plaintiff shall have sufficient funds in his hands as on 27.08.2014. The Trial Court has considered the hardship in favour of the defendant in granting the specific performance and order of refund will not cause hardship to the plaintiff.
37. We have carefully perused the impugned judgment. The Trial Court has referred all the relevant evidence, pleadings and rightly appreciated that it is not arbitrary to grant specific performance. It is the discretion of the Court as the plaintiff failed to prove his readiness and willingness, time is the essence of contract, no money was in the hands of the plaintiff to perform his part of contact and the defendant has placed evidence explaining transaction outside the terms of Ex.P1 - agreement. Thereby the Trial Court has weighed the hardship in favour of both the plaintiff and defendant and held that hardship weighed in favour of the defendant if specific performance is ordered. The plaintiff is a businessman and defendant
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NC: 2024:KHC-D:10619-DB RFA No. 100299 of 2018 is a Chartered Accountant. The Trial Court exercised its discretion in granting interest of 18% p.a. on the advance money, which meets the ends of justice in the facts and circumstances of the case.
38. Hence, we are persuaded to hold that the Trial Court has not committed any error in appreciating the case and not committed any illegality in directing refund of advance money while refusing to grant specific performance. The appeal is devoid of merits, in the result, the following:
ORDER The appeal is dismissed.
Sd/-
JUDGE Sd/-
JUDGE gab/Ct-cmu List No.: 1 Sl No.: 2