Andhra HC (Pre-Telangana)
P. Prabhakara Rao S/O. Chokka Rao And ... vs Y. Venkata Mohan Rao S/O. Venkata ... on 21 August, 2006
Equivalent citations: AIR2006AP405, 2006(6)ALD45, AIR 2006 ANDHRA PRADESH 405, (2006) 6 ANDHLD 45 (2006) 6 ANDH LT 266, (2006) 6 ANDH LT 266
JUDGMENT V. Eswaraiah, J.
1. This appeal is directed against the judgment and decree dated 03.12.1996 passed in O.S. No. 35 of 1993 by the Additional District Judge, Ranga Reddy District.
2. The appellants herein are the defendants in the suit O.S. No. 35 of 1993 filed by the plaintiff/respondent herein for specific performance of the agreement of sale dated 10.10.1979. Originally the suit was numbered as O.S. No. 241 of 1980 on the file of the III Additional Judge, City Civil Court, Hyderabad, which was transferred to the Additional District Court, Ranga Reddy District and numbered as O.S. No. 425 of 1982, later transferred to Sub-Court, Ranga Reddy District and numbered as O.S. No. 603 of 1983 and again transferred to the Court of Additional District Judge, Ranga Reddy District, which was numbered as O.S. No. 35 of 1993. The learned Additional District Judge by judgment dated 03.12.1999 decreed the suit with costs. Aggrieved by the said judgment and decree the defendants therein preferred this appeal. The parties herein are referred to as they were arrayed in the suit.
3. It is the case of the plaintiff that he and the defendants got acquainted with each other through one M. Brahma Reddy and that the defendants are related to each other as brothers-in-law.
4. The defendants approached the said Brahma Reddy to introduce any friend of his to purchase their plot admeasuring 21/2 acres bearing S. Nos. 181, 182 and 163 situated at Peda Amberpet, Ranga Reddy District. Accordingly, the plaintiff was introduced to the defendants and after some negotiations the plaintiff agreed to purchase the said land at the rate of Rs. 10,000/- per acre totaling to Rs. 25,000/- for entire suit schedule property and it was also agreed upon by the parties that the plaintiff would pay Rs. 15,000/- towards earnest money and advance. All this took place in the presence of Brahma Reddy, who being a common friend of the plaintiff as well as the defendants. An agreement of sale was prepared on 10.10.1979 and the advance and earnest money was mentioned as Rs. 15,000/-. After singing the agreement when the defendants demanded an extra amount of Rs. 6,500/-, the plaintiff expressed his inability to meet the demand as he had no prior information or such request was made to him. However, the plaintiff paid Rs. 15,000/- and the same was acknowledged by the defendants in the agreement of sale dated 10.10.1979. When the plaintiff was pressurized to pay Rs. 6,500/-, the said Brahma Reddy at the instance of the plaintiff issued a cheque bearing No. SB/R.128682 dated 10.10.1979 for the said amount in favour of the second defendant and the balance to be paid by the plaintiff to the defendants for the sale price of the suit land fixed at Rs. 25,000/- was only Rs. 3,500/-.
5. It is his further case that he performed a very major part of the contract when he paid 3/4th of the sale price for the suit schedule land and took possession of the said land towards part performance of the contract. The defendants agreed to complete all formalities by producing the necessary title deeds and other documents to the plaintiff before drawing up the sale deed. The said Brahma Reddy approached the defendants several times since the agreement of sale requesting them to perform their part of the contract and further informed that the plaintiff was ready with Rs. 3,500/- the balance of total consideration, but the defendants went on postponing the date of registration on some pretext or other. On 02.11.1979 the plaintiff sent a letter under certificate of posting to the defendants to produce the necessary documents and convey the suit property to him by 10.11.1979. However, when the defendants attempted to sell the suit schedule land the plaintiff by way of abundant caution issued a telegraphic notice through his counsel on 29.11.1979 informing the defendants to complete the sale transaction immediately and also published a notice in Deccan Chronicle on 01.12.1979. The plaintiff also issued a detailed notice to the defendants on 03.12.1979 under registered post acknowledgement due and the defendants evaded to receive the said notice. It is stated that the defendants are bound to complete the contract of sale dated 10.10.1979 but they failed to perform their part of contract such as producing the title deeds, non- encumbrance certificate etc. The defendants with a malafide intention to cheat the plaintiff have gone back on their promise after collecting huge amount of Rs. 21,500/- out of Rs. 25,000/-. Time was never the essence of the contract and on the contrary the defendants wantonly postponed to complete the formalities for which the plaintiff had to consent. The plaintiff is entitled to have the specific performance of the transaction of sale entered into on 10.10.1979 and the defendants are bound to convey and register the suit schedule property in favour of the plaintiff or in the alternative return the entire sale consideration and the defendants are also bound to pay Rs. 5,000/- towards damages for committing breach of the said agreement. Thus, the suit was filed to convey the suit schedule property in favour of the plaintiff pursuant to the agreement of sale and to pay damages of Rs. 5,000/- for committing breach of agreement or in the alternative to return the entire sale consideration of Rs. 25,000/- as per the agreement of sale along with interest at the rate of 9% per annum if the suit is decreed for payment of money.
6. The first defendant filed a written statement stating that he was carrying on business in wholesale-cum-retail in wine business and for the purpose of renewing the license he was in need of money for temporary accommodation to an extent of Rs. 10,000/-, he approached the said Brahma Reddy, who suggested the defendant that the suit land should be sold. On 10.10.1979 the plaintiff paid Rs. 15,000/- and an agreement was entered into and it is incorrect to state that on that day he demanded Rs. 6,500/- more. The said Brahma Reddy did not pay the said sum towards part consideration, in fact, as and when Brahma Reddy was in need of money he used to draw self-cheques and take the cash from him. The said Brahma Reddy gave a cheque dated 10.10.1979 for Rs. 6,500/- for self but the same did not form part of consideration, as such, it was not referred to in the agreement. The said Brahma Reddy used to collect cash from his wine shop as and when he was in need and used to give bearer cheques and there are instances of such nature. The said Brahma Reddy also used to purchase liquor from M/s. Tapati Wine Shop on credit, in which the second defendant was partner, and regular account was maintained. He never handed over the possession of the suit land to the plaintiff on part performance or otherwise and it is incorrect to state that the balance of sale consideration is only Rs. 3,500/-. It is stated that the plaintiff never sent a letter dated 02.11.1979. The said letter and the certificate of posting are issued as an after thought and as an innovation for the purpose of this case. It is stated that the certificate of posting is no proof of either posting or service. The contention of the plaintiff that the he has sent a telegraphic notice on 29.11.1979 was also denied and on the other hand, it is stated that the defendant published a notice in the newspaper on 29.11.1979 with a intention to sell the property to other and as a counter blast the plaintiff had given a counter notice in the Deccan Chronicle. In fact, the defendant did not receive the notice dated 03.12.1979 and the plaintiff himself committed breach of the terms of the agreement and therefore, the defendant treated the agreement of sale as cancelled as the plaintiff has not paid the balance sale consideration in time and the defendant never received a sum of Rs. 21,500/- as alleged. In fact, the plaintiff paid Rs. 15,000/- alone on 10.10.1979 and after that no subsequent amount has been paid. The possession of the suit land was not at all given and the possession continues to remain with the defendant alone. The property belongs to the defendants and therefore, they are entitled to deal with the same in any manner they like. Time was the essence of the contract. It is the stated that though the property was offered to be sold in the month of September 1979, as the license fee has to be paid by the end of September 1979, at the rate of Rs. 12,000/- per acre, the plaintiff did not agree to pay Rs. 12,000/- but later in the month of October only the defendants have agreed to sell the property at Rs. 10,000/- per acre as they have borrowed the money elsewhere to renew the license along with late fee on 06.10.1979 instead of 30.09.1979. Therefore, the plaintiff is not entitled to any specific performance of agreement as the plaintiff himself committed breach of the contract of sale. It is further stated that the plaintiff agreed to receive back the sale consideration of Rs. 15,000/- provided interest is paid on the said sum for which the defendants did not agree, The second defendant adopted the written statement of the first defendant.
7. On the said pleadings the trial Court framed the following issues:
1. What is the part played by Brahma Reddy between the parties and what about the cheque for Rs. 6,500/-?
2. What are the correct negotiations between the parties for coming to the suit agreement and what were the amounts actually paid by the plaintiff?
3. What is the effect of Telegram notice, ordinary, notice, and paper notification took out by the plaintiff?
4. Which party actually committed any breach of agreement?
5. Whether the plaintiff is entitled to specific performance? or to the alternative remedy?
6. Is the plaintiff entitled to Rs. 5,000/- towards damages?
7. Is plaintiff entitled to interest and if so at what rate?
8. Relief?
8. The plaintiff himself was examined as P.W.1, Mr. Brahma Reddy was examined as P.W.2 and one T. Anand, Manager, Personal and Services Bank, Division S.B.H., Chikkadpally, was examined as P.W.4 and Exs.A1 to A14 were marked. On behalf of the defendants, the first defendant was examined as D.W.1 and Exs.B1 to B10 were marked. The cheques issued by the said Brahma Reddy, P.W.2, were marked as Exs.X1 to X3.
9. The Court below mainly stressed on the real dispute involved in the suit as to whether the plaintiff paid Rs. 6,500/- by way of cheque through Brahma Reddy, P.W.2, to the defendants on the date of agreement of sale and whether the time was the essence of the contract and whether the plaintiff is entitled for specific performance of the agreement of sale.
10. With regard to the possession the learned trial Judge held that the as per Ex.A1 agreement of sale the balance sale consideration has to be paid on or before 10.11.1979 and obtain a registered sale deed on the expenses of the plaintiff but there was no mention about the delivery of possession to the plaintiff. There was also no endorsement to the effect that the plaintiff paid a sum of Rs. 6,500/- to the defendants through P.W.2. But admittedly the cheque for a sum of Rs. 6,500/- dated 10.10.1979 was encashed by the second defendant and that there were certain transactions between P.W.2 and the defendants. Though P.W.2 initially denied the signatures on the cheques issued by him under Exs.X2 and X3 later he agreed that he himself issued the said cheques. Therefore, the said Brahma Reddy, P.W.2, has given false evidence with some malafide intention and the defendants have established the falsehood of P.W.2. Even though there were certain discrepancies in the evidence of P.W.2, which have not been properly explained by P.W.2; merely because there is no endorsement with regard to payment of Rs. 6,500/- towards part sale consideration and delivery of possession in favour of the plaintiff; in view of the fact that the plaintiff had to pay Rs. 10,000/- to the defendants and also that a letter was sent under certificate of posting and thereafter the notice of publication for which the defendants never replied, the learned trail Judge came to the conclusion that as Exs.A6 and A7 telegrams issued to the defendants were refused, which appears to be deliberate, a presumption has to be drawn that the defendants have failed to submit their replies because the claim of the plaintiff is true and correct and an adverse inference was drawn against the defendants. Accordingly, it was held that the plaintiff bonafidely wanted to purchase the suit schedule land at the rate of Rs. 10,000/- per acre and immediately parted with Rs. 15,000/- on the date of the agreement. In view of the aforesaid evidence, presumptions and adverse inferences a conclusion has been drawn to the effect that the plaintiff has paid Rs. 6,500/- and the balance sale consideration payable is only Rs. 3,500/- as the plaintiff was always ready and willing to perform his part of the contract and the defendants only prolonged the matter and the defendants alone committed fault.
11. With regard to the question that the time is the essence of the contract, as it was stated that the time was not the essence of the contract and in view of the evidence of P.W.2 that Rs. 6,500/- was paid towards part sale consideration, though there are certain discrepancies in his evidence, and as no reply was given to the said notices issued by the plaintiff, it was held that time was not the essence of the contract. It was further held that as the defendants made a false claim that they never demanded Rs. 6,500/- more, the defendants are liable to pay some damages amounting to Rs. 500/-. Accordingly, it was held that the plaintiff is entitled for specific performance of contract and ultimately decreed the suit with costs directing the defendants to execute a regular sale deed in respect of the suit schedule property after receiving the balance sale consideration of Rs. 3,500/- within three months from the date of passing of the judgment and the defendants were also directed to pay a sum of Rs. 500/- towards damages. If the plaintiff fails to deposit the said amount of Rs. 3,500/- within three months the decree stands nullified. As against the said judgment, the defendants preferred this appeal.
12. Sri M.S. Ramachandra Rao, learned Counsel appearing for the appellants/defendants submits that as per Ex.A1 agreement of sale if the sale deed is not obtained by paying the balance sale consideration by 10.11.1979 the advance money stands forfeited and therefore, time was made an essence of the contract and the plaintiff was neither ready and willing to perform his part of the agreement of sale and he did not perform his duty and obligation under the agreement of sale in not paying the balance consideration of Rs. 10,000/-. Admittedly an amount of Rs. 6,500/- was paid by P.W.2 and there is no endorsement either in the agreement of sale or any receipt to the effect that the said amount was paid through cheque by P.W.2 only towards the part of sale consideration. Therefore, it cannot be said that the plaintiff was ready and willing to perform his part of the contract.
13. It is further stated that Ex.A2 and A3, letter and certificate of posting, said to have been sent by the plaintiff are fabricated documents and created. Ex.A12 notice dated 03.11.1979 was sent after lapse of one-month time fixed in Ex.A1 agreement of sale to obtain the sale deed and therefore, merely because no reply was sent to the said notice, it cannot be said that the defendants admitted the contents of Ex.A12. It is stated that Ex.A4 and A12 were not at all sent. Even assuming that they had been sent, they have been sent only after 10.11.1979, therefore, the plaintiff cannot rely on the said exhibits. It is stated that the trial Court having held that the testimony of P.W.2 is not trust-worthy as a piece of evidence, it ought not to have relied on the same. If that be the case, there is no other evidence available on record to prove that the said sum of Rs. 6,500/- was paid as part of sale consideration. Admittedly, as per Ex.A1 agreement of sale an amount of Rs. 15,000/- only was paid on the date of agreement, which was acknowledgement by the defendants and the balance sale consideration payable is Rs. 10,000/-. Therefore, it cannot be said that on the same date a cheque for an amount of Rs. 6,500/- was paid by the mediator, P.W.2, towards part sale consideration in the absence of either any endorsement on the agreement or any receipt passed by defendants to the said effect. It is stated that the said Brahma Reddy had an account in the liquor shop of the defendants and used to purchase liquor on credit basis and as and when the said Brahma Reddy was in need of money, he used to take cash from the defendants by giving self cheques and thereby the defendants used to encash the said cheques subsequently.
14. Thus, Exs.X1 to X3 are the transactions with regard to cash demands made by the defendants in favour of P.W.2, who issued the said cheques for encashment. In fact, abundant evidence has been adduced by the defendants with regard to the account maintained by the defendants with regard to the purchase of liquor. Exs.B2 to B8 go to show that there was a regular account maintained with regard to the liquor purchased by P.W.2. Therefore, it cannot be said that the said cheque issued for an amount of Rs. 6,500/- was towards the part of sale consideration.
15. It is stated that Ex.A2 letter dated 02.11.1979 said to have been sent by the plaintiff under Ex.A3 certificate of posting, was not at all sent to the defendants. In fact, the plaintiff in his deposition stated that the original letter Ex.A2 sent under certificate of posting and the duplicate of the same has been filed along with the plaint. Therefore, it cannot be said that the said letter was sent through certificate of posting when the original has been filed before the Court. It is stated that when the plaintiff has not approached the Court with clean hands making false allegations that the said letter had been sent under certificate of posting and that an amount of Rs. 6,500/- was paid on behalf of the plaintiff by the said Brahma Reddy towards part of sale consideration, the discretionary relief under the specific performance of agreement of sale cannot be granted in favour of the plaintiff.
16. It is further stated that even assuming that the telegrams were refused and no reply was given to Ex.A12 telegram, no presumption can be drawn under the Evidence Act and therefore, the learned trial Judge ought not to have drawn an adverse inference against the defendants and ought not to have presumed that the said amount of Rs. 6,500/- was paid towards part of the sale consideration. Thus, it is stated that the suit filed by the plaintiff was erroneously decreed and the judgment impugned is liable to be set aside.
17. On the other hand Sri. T. Bal Reddy, learned Senior Counsel appearing for the respondent/plaintiff submits that P.W.2, who is a friend of plaintiff as well as the defendants, arranged the sale of suit schedule vacant lands and accordingly, Ex.A1 agreement of sale was executed after receipt of part consideration of Rs. 15,000/- out of the total sale consideration of Rs. 25,000/- for 21/2 acres. Immediately after receiving Rs. 15,000/- at the time of execution of agreement of sale, as the defendants were in dire necessity of money they requested the plaintiff to arrange for some more money and the plaintiff being a non-resident of Hyderabad, asked P.W.2 to pay Rs. 10,000/- which P.W.2 owed to the plaintiff. As P.W.2 was not having that much money he gave a cheque for Rs. 6,500/- in the name of the second defendant, which was encashed on the same day i.e. 10.10.1979. Therefore, it cannot be said that the amount of Rs. 6,500/- paid through cheque by P.W.2, was not towards part of sale consideration. It is further stated that as the said amount was received the trial Court has rightly drawn an adverse inference against the defendants and believed the versions of P.Ws.1 and 2 with regard to payment of Rs. 6,500/- towards part of sale consideration and therefore, a separate receipt was not necessary.
18. It is further stated that the version of the defendants in the written statement that P.W.2 has drawn a self cheque Ex.X1 and gave it to them for collection and they paid the amount to P.W.2 cannot be admitted as true and correct as there is no need for P.W.2 to get the assistance of the defendants for encashment of self cheque. Thus, it is stated that there is a contradictory version on the part of the defendants which would lead to drawing a legitimate inference that the amount of Rs. 6,500/- was paid towards part of sale consideration under Ex.A1. The version of the defendants that the said cheque given by P.W.2 represents payment made by him during the course of their business transactions cannot be believed as true and correct and Exs.B2 to B8 filed by the defendants do not prove the same. However, the defendants took the said plea by amending the written statement after ten years of filing the suit and therefore, the said plea of the defendants cannot be relied on.
19. It is further stated that the plaintiff has been exhibiting his readiness and willingness to perform his part of the contract right from the beginning. The plaintiff filed Ex.A3 certificate of posting, which contains the seal of the Post-Office to prove sending of Ex.A2 notice on 02.11.1979. Ex.A4 telegram was sent, which was refused; Exs.A6 and A7 are also the telegram intimations and later Ex.A12 notice dated 03.12.1979 was sent and in all the above exhibits the plaintiff has shown the payment of Rs. 21,500/- towards sale consideration and the balance sale consideration as only Rs. 3,500/-, but there was no response to the letter sent under certificate of posting and also to the subsequent telegrams, therefore, necessarily an adverse inference has to be drawn against the defendants, which was rightly drawn by the trial Court.
20. With regard to the contention that Ex.A2 letter being original as admitted by P.W.1 it could not have been sent by the plaintiff, it is stated that a copy of Ex.A2 was appended to the plaint as document No. 13 and filing of original notice at the time of trial does not lead to any adverse inference, as it is quite possible that the plaintiff had prepared two original notices as there were two defendants and one was sent by post and another was retained with him, which was filed into the Court as Ex.A2.
21. It is further stated that whether any possession was given or not is immaterial as it was only a vacant and it was lying idle. Therefore, it is stated that the defendants were never ready to perform their part of the contract and the plaintiff was always ready and wiling to perform his part of the contract as required under Section 16(c) of the Specific Relief Act right from the execution of Ex.A1 agreement of sale. Therefore, the suit has been rightly decreed by the Court below. In support of the said contentions it is stated that a ruling of the Apex Court in Jugraj Singh v. Labh Singh AIR 1995 SC 945 lends support to his contentions. It is further stated that the plaintiff's unblemished conduct has to be taken into consideration and the suit for specific performance, in view of the judgment of the Apex Court in Sugani v. Rameshwar Das 2006 (4) ALD 41 (SC), has to be granted.
22. The questions that arise for consideration are:
1. Whether an adverse inference can be drawn by the trial Court merely because the defendants failed to submit any reply with regard to payment of Rs. 6,500/- by P.W.2 vide Ex.X1, cheque on the same date of Ex.A1 agreement of sale, in the absence of any endorsement in the agreement of sale or any receipt to the effect that Rs. 6,500/- was paid by P.W.2 towards part sale consideration?
2. The trial Court having held that P.W.2 was not speaking truth with regard to issuance of Exs.X2 and X3 cheques, whether his deposition with regard to issuance of Ex.X1 cheque for an amount of Rs. 6,500/- towards part of sale consideration on behalf of the plaintiff, in the absence of any specific endorsement in the agreement of sale or any separate receipt to that effect can be presumed to be true and correct?
3. Whether the plaintiff has approached the Court below with clean hands without any falsehood either with regard to Ex.A2 letter sent through Ex.A3 certificate of posting or with regard to payment of Rs. 6,500/- towards part of sale consideration?
23. The plaintiff, examined as P.W.1, stated that he knew the defendants through Brahma Reddy, P.W.2, and when he intended to purchase a land, the said Brahma Reddy introduced him to the defendants stating that their land (suit schedule land) is available for sale. He entered into an agreement of sale with the defendants for sale consideration of Rs. 10,000/- per acre and the total sale consideration was Rs. 25,000/- vide Ex.A1 agreement of sale dated 10.10.1979 and earlier he paid an advance of Rs. 15,000/- when he entered into oral agreement on 03.10.1979. Ex.A1 was the agreement of sale executed in the morning hours of 10.10.1979 and in the evening the defendants approached him and demanded the balance sale consideration. As he was not having the money, he asked Brahma Reddy, who was due certain amounts to him, to give Rs. 6,500/- to the defendants on his behalf. The said Brahma Reddy issued a cheque for Rs. 6,500/- to the defendants. The sale deed was to be executed and registered within one month from the date of Ex.A1. In spite of demanding the defendants to produce non- encumbrance certificate and title deeds of the suit land, they did not produce those documents and went on taking time and therefore, he wrote a letter Ex.A2 dated 02.11.1979 to the defendants. Ex.A2 letter was sent under Ex.A3 certificate of posting and Ex.A4 is the telegram issued on 29.11.1979 and Ex.A5 is the receipt of refusing to receive the same. Exs.A6 and A7 were the intimations and EX.A8 is the returned cover. Then, he gave a notice under Ex.A9 by publication in Deccan Chronicle dated 02.12.1979 and thereafter, a legal notice Ex.A12 was issued to the defendants, which was returned as party not found. Exs.A13 and A14 are the receipts of the registered letters and defendants refused the same and issued a legal notice with false allegations. The balance sale consideration payable is only Rs. 3,500/- and the plaintiff was ready to pay the same.
24. In the cross-examination it is stated that the plaintiff paid Rs. 15,000/- under Ex.A1 in cash as the plaintiff was having the said amount in his house and it is stated that he is doing business in cotton. It is stated that except the said amount he has not paid any amount but again he added that he has paid further amounts on that day by cheque through his friend, P.W.2 and the cheque amount was not mentioned in the agreement and there is no Clause in the agreement that non-encumbrance certificate to be produced before the date of registration. It is stated that before 10.11.1979 he has sent Ex.A2 letter through certificate of posting and the suggestion that he never sent Ex.A2 letter was denied. The suggestion that the plaintiff was not ready for completing the sale transactions was also denied.
25. The plaintiff did not sent any draft sale deed to the defendants and he did not purchase any stamps for the purpose of registration. The suggestion that the plaintiff was not having money for getting the sale deed registered was also denied. The suggestion that except the amount mentioned in Ex.A1 no further amount was paid was also denied. The suggestion that the suit schedule property was not handed over to the plaintiff was denied. The suggestion that the plaintiff has not acted as per the terms of the agreement and therefore, the plaintiff is not entitled for specific performance was also denied.
26. With regard to Ex.A2 letter dated 02.11.1979 it is stated that the duplicate of Ex.A2 was filed as annexure No. 13 along with the plaint and Ex.A2, which was shown to him was admitted as original letter filed by him. Thus, the suggestion of the defendants that Ex.A2 letter was not at all sent under certificate of posting and that Exs.A2 and A3 concocted documents were filed for the purpose of the case was denied. He did not know whether Brahma Reddy used to take money form the defendants and use to pay back. He did not know whether Brahma Reddy had any account with Tapati Wines run by the defendants and he did not know the dealings between Brahma Reddy and the defendants. The suggestion that Rs. 6,500/- was not paid in his presence towards sale consideration was also denied. He did not file any documents to show that he was in possession. He had sent the amount of Rs. 6,500/- to P.W.2 after 10 days. It is stated that P.W.2 was never indebted to him and he was never due any amount to him. The plaintiff received Ex.B1 letter canceling the agreement. He did not know about Rs. 6,563-25 ps. due by P.W.2 to the defendants in the accounts book maintained by the defendants in the name of Tapati Wines. There was no signature of the defendants on Ex.A1 agreement on the first and second page. P.W.2, Brahma Reddy, stated that the agreement of sale was executed on 10.10.1979 and as per the agreement the plaintiff earlier paid an amount of Rs. 15,000/-. After the agreement was executed on the same day, the defendants demanded another sum of Rs. 8,000/- from the plaintiff. He was due a sum of Rs. 10,000/- to the plaintiff. The plaintiff asked him to pay the said amount of Rs. 8,000/- from the amount due to the plaintiff. He was having only Rs. 6,500/- on that day and therefore, he paid the said amount through Ex.X1 cheque dated 10.10.1979 on the same day. Therefore, the balance sale consideration payable was only Rs. 3,500/-. As he was a common friend of both the parties, he requested the defendants to execute a registered sale deed in favour of the plaintiff and the plaintiff was in possession of the suit property.
27. In the cross-examination it is stated that in Ex.A1 agreement only an amount of Rs. 15,000/- was mentioned as paid towards earnest money and there was no mention for getting non-encumbrance certificate. He had not obtained any receipt for Rs. 6,500/-. It is not true to say that he had not paid the said amount towards the suit transaction. He is having an industry at Jeedimetla and the defendants are having a wine shop by name M/s. Tapati Wines. The suggestion that he used to purchase wines from the said shop was denied and the further suggestion that he used to give cheques was also denied and that there was no account maintained in his name by Tapati Wines. The suggestion that he issued a cheque Ex.X2 dated 06.04.1979 in favour of the defendants and also Ex.X3 cheque dated 17.10.1979 by taking cash for the value of the said cheques and that he was due a sum of Rs. 8,463-25 ps. by 06.10.1979 on account of liquor purchased by him and that Ex.X1 cheque dated 10.10.1979 was issued towards the settlement of the said amount was all denied. The suggestion that the cheque for an amount of Rs. 6,500/- was issued towards part of sale consideration was also denied. With regard to his signatures on other two cheques Exs.X2 and X3 though initially he denied the same but later on when he was confronted with the signatures, he accepted that he signed the cheques Exs.X2 and X3 and that they were issued by him only. The suggestion that Exs.X2 and X3 cheques were issued towards the account of Tapati Wines in respect of the liquor purchased by him was denied. Admittedly, neither P.W.2 nor P.W.1 had obtained any endorsement on the agreement of sale or obtained any separate receipt to the effect that the said amount of Rs. 6,500/- was paid through Ex.X1 cheque towards part of sale consideration.
28. The first defendant, examined as D.W.1, admitted about the execution of Ex.A1 agreement of sale and also the receipt of Rs. 15,000/- on the date of execution of Ex.A1 agreement of sale on 10.10.1979. It is stated that he did not undertake to obtain any non-encumbrance certificate and even the terms of Ex.A1 do not provide for getting non-encumbrance certificate and the plaintiff never requested to execute a sale deed by offering the balance amount within the stipulated time of Ex.A1. He also did not demand to pay the same. The total amount received by him was only Rs. 15,000/- and as the balance amount was not paid within the stipulated time he had got published a notice in the Deccan Chronicle on 29.11.1979 for the sale of the suit schedule land. Thereafter. Ex.B1 notice dated 30.11.1979 was sent to the plaintiff. It is stated that the he never received the certificate of posting under Ex.A3. P.W.2 did not pay Rs. 6,500/- to the second defendant towards part sale consideration. The contention that they have demanded a further amount and on that P.W.2 gave Rs. 6,500/- towards sale consideration was denied. It is specifically stated that the defendants were only in possession of the suit land and P.W.2 was having an account in respect of Tapati Wines and Exs.B2 to B8 relate to the said account, which goes to show that in October 1978, the khata was opened at page 132 of the Ledger for 1978-79 mentioning the particulars and P.W.2 gave Ex.X2 cheque dated 06.04.1979 for a sum of Rs. 500/- which was encashed by the first defendant and the same was remitted in the account of the first defendant. Ex.X1 cheque for Rs. 6,500/- a bearer cheque was given by Brahma Reddy in favour of the second defendant towards payment payable to the account of New Tapati Wines and it was not credited to the bank account. They were maintaining accounts in the regular course of business. Exs.B2 to B4, the entries in the Ledgers was inspected by the sales tax authorities and the income tax authorities also inspected those accounts and they bear the signatures of the inspecting officers. Thus, it is stated that Ex.X1 payment of Rs. 6,500/- was not towards the part of sale consideration payable under Ex.A1. The defendants filed cashbooks for 1978-79 and 1979-80 and the entries of the cashbooks were found corresponding to the entries in the Ledger. Exs.B7 and B8 are the cashbooks.
29. The plaintiff has to succeed on the merits of his own case but not on the weakness of the defendants' case. Therefore, the question that arises for consideration is as to whether the payment of Rs. 6,500/- though cheque by P.W.2, Brahma Reddy, is proved as payment towards part of sale consideration payable by the plaintiff to the defendants. The plaintiff in his chief examination stated that in the evening of 10.10.1979 after the execution of Ex.A1 agreement of sale, when the defendants demanded the balance sale consideration, he asked the said Brahma Reddy, who was due an amount of Rs. 10,000/- to him, to give Rs. 6,500/- to the defendants on his behalf and accordingly the said Brahma Reddy gave a cheque for Rs. 6,500/- to the defendants but in the cross- examination it is stated that he had sent Rs. 6,500/- to the said Brahma Reddy after ten days through one Doctor Venkat Reddy, who knew the said Brahma Reddy. Thus, there is discrepancy in the evidence of P.W.1 itself as he stated in his chief examination that the said Brahma Reddy was due certain amounts to him and in his cross-examination he stated that he had sent Rs. 6,500/- to the said Brahma Reddy after ten days, which means that the statement of the plaintiff that the said Brahma Reddy was due certain amounts to him is not correct. If the said Brahma Reddy was due certain amounts to the plaintiff the question of sending Rs. 6,500/- to the said Brahma Reddy, P.W.2, does not arise. In the cross examination it is clearly admitted by the plaintiff that P.W.2 was never indebted to him and that he was never due any amount to him, if that be the case of the plaintiff with regard to the said amount of Rs. 6,500/-, it is the deposition of the said Brahma Reddy, P.W.2, that as he was due an amount of Rs. 10,000/- to the plaintiff, he issued a cheque for Rs. 6,500/- in favour of second defendant on behalf of the plaintiff. Therefore, the deposition of P.W.2 that he was due certain amount to the plaintiff is not correct as the plaintiff himself agreed in his cross-examination that the said Brahma Reddy was not due any amount to him. The plaintiff stated that an amount of Rs. 6,500/- was sent to the said Brahma Reddy after ten days but the said Brahma Reddy has not stated anything about the same in his deposition.
30. However, I am of the opinion that the trial Court rightly came to the conclusion that P.W.2 was not a truthful witness. But having held so, believing the version of P.Ws.1 and 2 with regard to payment of Rs. 6,500/- towards the part of sale consideration, is without any justification whatsoever. If really the said amount of Rs. 6,500/- is paid towards the part of sale consideration and more so when the plaintiff was there in Hyderabad on 10.10.1979, on which date P.W.2 is said to have paid an amount of Rs. 6,500/- through cheque, they would have obtained an endorsement on Ex.A1 with regard to the said payment. Even otherwise no separate receipt has also been obtained with regard to said payment either by P.W.1 or P.W.2. Perusal of Ex.A1 agreement of sale dated 10.10.1979 goes to show that the purchaser today paid Rs. 15,000/- as advance to the vendor as against total sale consideration of Rs. 25,000/- and the vendor acknowledged the receipt of the same, which means that the plaintiff paid Rs. 15,000/- on 10.10.1979 but whereas P.W.1 in his chief examination stated that the said amount of Rs. 15,000/- was paid on 03.10.1979 thus, the plaintiff also did not speak truth with regard to the date of actual payment of Rs. 15,000/-. However, the defendants have honestly and truthfully accepted the receipt of Rs. 15,000/- on the date of agreement of sale. As per the condition of the agreement the balance of sale consideration has to be paid on or before 10.11.1979 and sale deed has to be registered by that date and the expenses for the stamps and registration has to be borne by the purchaser. It was also agreed that the sale deed has to be registered by 10.11.979 by completing all the formalities or such other period as extended by mutual consent of the parties. There is no evidence to show that the plaintiff was ready and willing to get the sale deed executed by the defendants before 10.11.1979 as the balance of sale consideration was not paid, stamps were not purchased, draft sale deed was not sent and even the certificate of posting said to have been sent on 02.11.1979 also cannot be believed to be true and correct, as the plaintiff filed the original letter under Ex.A2 said to have been sent though certificate of posting Ex.A3 along with the plaint and a copy of the same was already filed along with the plaint as annexure No. 13. Apart from the said discrepancies in the depositions of P.W.1, the said Brahma Reddy, P.W.2 was not at all speaking truth with regard to the cheques issued under Exs.X1 to X3 admittedly the same were credited to the account of the defendants.
31. Though there is some discrepancy in the evidence of D.W.1 with regard to the contention that the cheques were issued towards the accounts maintained by Tapati Wines in respect of the amounts due and payable by P.W.2; merely because there are certain discrepancies to the effect that P.W.2 used to give self cheques and take cash and that P.W.2 issued the said cheques towards the amounts due and payable to the account of Tapati Wines but the same are of no help to the plaintiff to prove his case. Admittedly, there is no evidence to show that Rs. 6,500/- paid under Ex.X1 cheque was towards the part of sale consideration; Ex.A2 is the original letter which has been filed by the plaintiff, therefore, it cannot be said that Ex.A2 letter was sent through certificate of posting. Perusal of Ex.A2 letter also goes to show that the date under the signature is written by applying much pressure and added to it, the original and the copy of the same have been filed along with the plaint, therefore, it cannot be said that the said letter has been sent to the defendants.
32. With regard to the other contention of the learned Counsel appearing for the plaintiff that the trial Court rightly presumed that the payment of Rs. 6,500/- was towards the part of sale consideration as the defendants have failed to submit any reply to the notice, telegrams etc, I am of the opinion that the said contention has to be rejected in view of the authoritative judgment pronounced by Division Bench of this Court in Manepalli Udaya Bhaskara Rao v. Kanuboyina Dharmaraju . In the said case the question as to whether non-issuance or reply to the prior notice by the defendant in a suit would amount to an admission, was authoritatively answered after considering several judgments of this Court and the Apex Court and relevant provisions of the Evidence Act. It was held that the exchange of notices would only at the most constitute a demand and refusal in writing, but the absence thereof would not either way constitute an admission. Even failure to issue a notice cannot be said to be an absence of demand nor the failure to reply to such notice would amount to an admission of the claim made in the notice.
33. Such omission would not amount to a tacit consent in respect of the demanded liability.
34. Learned Counsel for the defendants with regard to the denial of the receipt of the letter by the defendants sent under certificate of posting by the plaintiff relied on an observation made by the Apex Court in GADAKH Y. K. v. Balasaheb Vikhe Patil that when the receipt of letter by the addressee is denied and the likelihood of its dispatch is extremely doubtful since it was not sent by registered post and a certificate of posting being easy to obtain is not reliable.
35. As per the judgment of the Supreme Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy it is well settled law that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief. In the said case also it was contended that the possession was delivered and that the plaintiff made an express allegation in the plaint stating that he has informed the defendant about the agreement and that the defendant inspected the house for the purpose of purchasing the same but the said pleading was proved to be false and that the plaintiff paid Rs. 400/- in addition to Rs. 4,000/- was also held to be false. Therefore, the plaintiff was not entitled to specific performance.
36. Relying on the aforesaid judgment of the Supreme Court the Division Bench of this Court in Tatavarthi Jagannadham v. Akkineni Radhakrishna 1997 (6) ALD 261 (DB) declined to grant a decree for specific performance as the plaintiff deliberately set up a false claim and held that the plaintiff is disentitled to equitable relief of specific performance for setting up a false case.
37. Following the said principle laid down by the Supreme Court in the aforesaid judgment another Division Bench of this Court in K. Kameswaramma v. K. Balaramayya 1998 (5) ALT 690 rejected the relief of specific performance on the ground that the relief by way of specific performance lies within the discretion of the Court and the plaintiff should come to the Court with clean hands. A plaintiff who sets up a false case cannot expect a Court of equity to grant him the relief.
38. It was also inferred that the plaintiff who sets up a false plea of payment and fails to substantiate that he is always ready and willing to perform his part of the contract cannot seek the relief of specific performance.
39. On the other hand, learned Senior Counsel appearing for the plaintiff placing reliance on a judgment of the Apex Court in Sugani's case (2 supra) contended that under Section 16(c) of the Specific Relief Act, 1963, the specific performance of contract cannot be performed in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant and where a contract involved the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court and the plaintiff must aver performance of, or readiness and willingness to perform, the contract accordingly to its true construction; but the said legal requirements were fulfilled by the plaintiff as the plaintiff was able to aver and prove that he has performed and always has been ready and willing to perform the essential terms of the contract. Therefore, the plaintiff is entitled to specific performance of contract and the Court below rightly decreed the suit.
40. I am unable to accept the said contention for the reasons that as the plaintiff having averred that he has paid Rs. 6,500/- through P.W.2 vide Ex.X1 cheque dated 10.10.1979 on the date of execution of Ex.A1 agreement of sale failed to establish that the said amount was paid towards the part of sale consideration as there is no endorsement on the agreement of sale or any receipt has been taken to that effect from the defendants. Therefore, it cannot be said that Rs. 6,500/- was paid towards the part of sale consideration. The other contention that the plaintiff has sent Ex.A2 letter under Ex.A3 certificate of posting also cannot be believed as the plaintiff has filed the original as well as the duplicate copy of the said letter along with the plaint. As per Ex.A1 agreement of sale dated 10.10.1979 though the advance earnest money of Rs. 15,000/- was paid on the same day of execution of the agreement, the plaintiff falsely stated in his deposition that the said amount of Rs. 15,000/- was paid on 03.10.1979 that is seven days prior to the execution of Ex.A1 agreement of sale. The plaintiff having stated that as P.W.2 was due certain amounts to him, therefore, he asked P.W.2 to pay the said amount of Rs. 6,500/-, but in his cross-examination he stated that he has sent Rs. 6,500/- to P.W.2 after ten days, if really P.W.2 is due certain amounts to the plaintiff the question of sending the said amount to P.W.2 does not arise. More so, the plaintiff further stated in his cross-examination that P.W.2 was never indebted to him and also that P.W.2 was never due any money to him. P.W.2 was not at all speaking truth as rightly observed by the trial Court, when he is not a truthful witness, his statement that the said sum of Rs. 6,500/- was paid towards part of sale consideration under Ex.A1 cannot be believed to be true and correct. However, as per Ex.A1 agreement of sale the time is essence of the contract, as the plaintiff has to get the sale deed executed by 10.11.1979 and in the absence of any mutual agreement between the parties that the defendants agreed to extend the time, it cannot be said that the time is not the essence of the contract.
41. Therefore, I am of the opinion that the plaintiff is not entitled to specific performance of the agreement of sale as he failed to prove the averments made in the plaint with regard to payment of Rs. 6,500/- and also with regard to sending Ex.A2 letter by certificate of posting. Merely because the defendants failed to submit reply to Ex.A2 letter as per the aforesaid judgments of the Division Bench of this Court the adverse inference drawn by the trail Court presuming that the said amount of Rs. 6,500/- was paid towards part of sale consideration is illegal and without jurisdiction.
42. For the aforesaid reasons, I am of the opinion that the plaintiff is not entitled to the relief of specific performance of the agreement of sale. However, the plaintiff is entitled to alternative relief only.
43. The appeal suit is accordingly allowed setting aside the judgment and decree of the trial Court. Accordingly, the suit is decreed directing the defendants to return the amount of Rs. 15,000/- to the plaintiff at the rate of 9% per annum from 10.10.1979 till the date of repayment. In the circumstances, each party shall bear their own costs.