Kerala High Court
Devassy vs Abdulla Koya Haji on 26 March, 2010
Author: S.S.Satheesachandran
Bench: S.S.Satheesachandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 25719 of 2008(J)
1. DEVASSY, S/O.POINCHU,KOLLANOOR THARAYIL,
... Petitioner
Vs
1. ABDULLA KOYA HAJI
... Respondent
2. KHADEEJA, W/O. ABDULLA KOYA HAJI
3. M.KUNHIKOYA, S/O.ABDULLA KOYA HAJI
For Petitioner :SRI.T.KRISHNANUNNI(SR.)
For Respondent :SRI.V.CHITAMBARESH (SR.)
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :26/03/2010
O R D E R
S.S. SATHEESACHANDRAN, J. 'CR'
= = = = = = = = = = = = = = = = = = = =
W.P.(C)No.25719 of 2008
& C.R.P.No.680 of 2008
= = = = = = = = = = = = = = = = = = = =
Dated this the 26th day of March, 2010.
JUDGMENT
Both the writ petition and revision are filed by the second plaintiff in O.S.No.89/08 on the file of the Sub Court, Palakkad. The above suit was one for specific performance of an agreement for sale, and the respondents are the defendants. The writ petition is filed challenging the order passed in Ext.P3 application filed by the defendants by which the learned Sub Judge directed the plaintiffs to deposit the balance sale consideration due within the time limit fixed. Consequent to the non-deposit of the balance sale consideration within the time fixed, as ordered by the court, the suit was dismissed. That order dismissing the suit is challenged in the revision.
2. Short facts germane for consideration in the writ petition and also the revision can be summed up thus:
Ext.P2 agreement dated 26.3.2007 was entered with the defendants by the second plaintiff on behalf of his son, the first plaintiff, who is working abroad, for purchase of the plaint schedule properties. A sum of Rs.75 lakhs W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 2 ::
out of the sale price fixed was paid when the agreement was entered into fixing a time limit for execution of the sale deed on or before 22.1.2008, on payment of the balance sale consideration. The defendants have also agreed to produce the original title deeds and also furnish such security demanded by defendants to dispose by sale the interest of some of the vendors, who are minors. Imputing default on the part of the defendants in completing the sale, suit was laid seeking a decree of specific performance with an alternative prayer for refund of the sale price paid with interest, in case specific performance of contract is found not feasible. The defendants, on appearance, filed Ext.P3 application seeking a direction from the court to compel the deposit of the balance sale price due under Ext.P2 agreement contending that the delay in completion of the sale was due to the paucity of funds with the plaintiffs for completion of the contract. Ext.P4 counter was filed by the plaintiffs, in which disputing the allegations imputed W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 3 ::
by the defendants, they contended that they will suffer monetary loss, if the balance sale consideration of more than Rs.1 crore is kept idle on deposit. But if the claim of the defendants is bona fide, on production of convincing documents regarding their title, it was stated, they will deposit the balance price and get the sale deed executed. In Ext.P3 application, after filing of such counter, the learned Sub Judge passed an order on 28.6.2008 directing the plaintiffs "to deposit the balance sale consideration by 5.7.2008, and the defendants to produce original title deed for perusal on 5.7.2008". On the request from the plaintiffs' counsel for time to deposit the sum, that IA was adjourned to 15.7.2008 and then to 30.7.2008. On 30.7.2008 since the amount ordered was not deposited, as undertaken (according to the court below) by the counsel for the plaintiffs the suit was dismissed under Section 151 of the CPC. As indicated earlier, the order dated 28.6.2008 passed on Ext.P3 application directing the plaintiffs to deposit the balance sale consideration is W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 4 ::
challenged in the writ petition, and the dismissal of the suit by order dated 30.7.2008 in the revision.
3. I heard the counsel on both sides.
4. The learned counsel for the plaintiffs, Senior Counsel Sri.T.Krishnanunni assailed the orders impugned in the writ petition and the revision contending that readiness and willingness on the part of the plaintiffs in a suit for specific performance, as covered by Section 16(c) of the Specific Relief Act, is a relevant factor to be determined in the trial of the suit and at any rate, the plaintiffs need show only their financial ability for performance of the contract of sale during the pendency of the suit. Plaintiffs have produced Ext.P5 series, documents issued by the bank evidencing the financial capacity of the first plaintiff, but, according to the counsel, those materials were ignored and discarded by the court while passing the order dismissing the suit on the premise that the plaintiffs' counsel after 'undertaking' to tender the deposit, had failed to do so. The counsel cannot give such W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 5 ::
an 'undertaking' and if at all any representation was made by the counsel as to tendering of deposit subsequent adjournment granted by the court would indicate the submissions construed by the court as an 'undertaking' given by the counsel on 28.6.2008 never continued to be in force, according to the counsel. The court below has passed the order dismissing the suit invoking Section 151 CPC on the premise that the plaintiffs after having given an 'undertaking' to make the deposit flouted and violated it, but such an order non-suiting them was passed, according to the counsel, without even giving an opportunity to show that there was no 'undertaking' and non-compliance of any order passed by the court.
5. The learned counsel for the plaintiffs further submitted that some minors too, admittedly, have right over the property covered by Ext.P2 agreement for sale, and without obtaining permission from the court for sale of such minors' interest by taking proceedings under the Guardians and Wards Act, 1890, there could not be a W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 6 ::
completion of the sale under Ext.P2 agreement. The defendants have not taken any steps to get such permission from the court for sale of the minors' interest in the property and Ext.P3 petition was filed by them to wriggle out of the agreement of sale as the land value has increased considerably after Ext.P2 agreement had been entered into by the parties, is the submission of the counsel. The impugned orders are liable to be set aside and the suit has to be restored to file providing an opportunity to the plaintiffs to establish their case for the reliefs claimed, submits the counsel.
6. Per contra, the learned counsel for the respondents, Senior Counsel Sri.Chidambaresh contended that no interference with the dismissal of the suit, in the circumstances involved in the case in exercise of the revisional jurisdiction is called for. Inviting my attention to Section 16(c) of the Specific Relief Act, it is submitted by the counsel that the court which is approached to grant equitable relief of specific performance is empowered to W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 7 ::
call upon the party seeking such relief to deposit the balance sale consideration to show his readiness and willingness to complete the sale. When such an order has been given and if the party defaults to comply with such order, it is open to the court to non-suit that party and decline him the relief canvassed for, is the submission of the counsel. Relying on N.P.Thirugnanam v. Dr.R.Jagan Mohan Rao {1995(5) SCC 115}, the learned counsel urged that when an 'undertaking' had been given, as in the present case, by the counsel for the plaintiffs agreeing to comply with the order passed on Ext.P3 to deposit the balance sale consideration and that 'undertaking' had been flouted despite granting of several opportunities, the court was fully justified in dismissing the suit. Reliance is placed by the counsel on Rita Markandey v. Surjit Singh Arora {[1996] 6 SCC 14} and {2007 (3) KLT 888}, which had been relied on by the court below as well in the impugned order dismissing the suit, to show the authority of the court to pass such W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 8 ::
drastic orders for non-suiting the plaintiffs. The argument canvassed by the learned counsel for the petitioner that there was no 'undertaking' as spelt out in the order of the learned Sub Judge is impeached and questioned by the counsel contending that such a plea cannot be pressed into service as it has to be challenged by filing an appropriate petition before the court which passed the order as to the 'undertaking' given. When an 'undertaking' given to the court is flouted, the suit itself can be struck off from the file, is the submission of the counsel, relying on Parukutty Amma v. Thankamma Amma {1988 KLT 883} and Mangalam v. Velayudhan Asari {1992(2) KLT 553}. It was further urged that the writ petition filed against the order dated 28.6.2008 in Ext.P3 petition after the expiry of nearly one month and that too after the dismissal of the suit on 30.7.2008 is not maintainable. According to the learned counsel, an interim order passed in the suit cannot be challenged by way of a writ petition after the dismissal of the suit. W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008
:: 9 ::
Placing reliance is placed on Surya Dev Rai v. Ram Chander Rai {2003(3) KLT 490}, maintainability of the revision is impeached by the counsel contending that a revision will not lie against the final judgment passed in a suit. The remedy of the plaintiffs after the dismissal of the suit is by an appeal and not by way of a revision, is the submission of the counsel. Reliance is placed on Shiv Shakti Co-operative Housing Society v. Swaraj Developers {2003(2) KLT 503] and Vidyodaya Trust v. Mohan Prasad {2006 (4) KLT 1 (SC)} to buttress the challenge that revision is not maintainable contending that the proviso to S.115 of the Code bars entertainability of a revision against the order dismissing the suit. Maintainability of the writ petition and also the revision is challenged on another ground that both of them have been presented by the second plaintiff, who was only an agent of the first plaintiff in Ext.P2 agreement of sale. Since the principal, the first plaintiff, is not a party to the writ petition and revision, and no challenge had been raised by W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 10 ::
him against the orders passed by the court including the dismissal of the suit, according to the counsel, both the writ petition and the revision are liable to be dismissed in limine.
7. I have considered the rival submissions made by the counsel. Maintainability of the revision impeaching the order passed by the court below dismissing the suit is raised on the ground that no revision will lie against that order. Proviso to Section 115 of the Code with reference to Shiv Shakti Co-operative Housing Society's case [2003(2) KLT 503} and Surya Dev Rai's case {2003 (3) KLT 490} has been pressed into service to contend that revision is not maintainable. I cannot agree. The court below, for whatever reasons disposed of the suit by a final order. That order has terminated the proceedings and, so much so, the applicability of the proviso to Section 115 of the Code cannot be pressed into service to challenge the maintainability of the revision. The learned counsel for the respondents has relied on the observations W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 11 ::
in paragraph 32 of the decision in Shiv Shakti Co- operative Housing Society's case [2003(2) KLT 503} to canvass for the proposition that the question on the maintainability of the revision has to be decided by examining whether an order in favour of the party applying for revision would have given finality to suit the or other proceedings. If only the answer is yes, then alone the revision is maintainable, is the submission of the counsel. The learned counsel is not correct, as the Apex Court was considering the scope of interim orders and challenge against them by way of revision and not against a final order by which the suit or other proceedings had already been terminated. The observations of the apex court in the very same paragraph would clear off any lingering suspicion on the applicability of the proviso to Section 115 of the Code that it has been considered only in relation to a challenge against an interim order, and not against a final order which had terminated the proceedings. The apex court has observed thus; W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008
:: 12 ::
"If the impugned order is of interim in nature or does not finally decide the lis, the revision will not be maintainable. The legislative intent is crystal clear. Those order, which are interim in nature, cannot be the subject matter of revision under S.115".
8. Challenge raised by the senior counsel Sri.Chidambaresh, relying upon Surya Dev Rai's case {2003 (3) KLT 490} to contend that the decision is an authority explaining that the new proviso inserted in Section 115 of the Code of Civil Procedure under Act 46 of 1999 interdicted this court from exercising the powers of its revisional jurisdiction even when the order impugned is a final order terminating the proceedings as the reversal of that order has the effect of revival of the proceedings, has no merit at all. Clause (b) of the proviso to Section 115 had been deleted and the new proviso, as at present, was inserted under the Amendment Act, 1999 which came into force on July 1, 2004 on the basis of the recommendations made by the Malimath Committee, to curtail and limit the scope of interference against orders in interlocutory W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 13 ::
applications, which if entertained, could prolong the litigation. What is the impact of that amendment in Section 115 of the Code is clearly stated in Surya Dev Rai's case {2003 (3) KLT 490} relied by the counsel in the following terms:
"The effect of the erstwhile Clause (b) of the proviso being deleted and a new proviso having been inserted, is that the revisional jurisdiction, in respect of an interlocutory order passed in a trial or other proceedings, is substantially curtailed." (emphasis supplied)
9. The Apex Court in Surya Dev Rai's case considered whether the interdiction placed in the revisional jurisdiction of the High Court under Section 115 of the Code, inserting a new proviso therein, has in any way limited or fettered the powers conferred on the High Court under Article 227 of the Constitution of India to examine the correctness of an interim order passed in a pending suit or proceeding. Subject to the guidelines W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 14 ::
given in that decision, which are only illustrative and not exhaustive, it was held that the amendment inserting the new proviso under Section 115 of the Code cannot and does not affect, in any manner, the jurisdiction of the High Court under Articles 226 and 277 of the Constitution. Reliance placed by the counsel on the above decision to contend that revision against a final order terminating the proceedings even if found to be vitiated by jurisdictional infirmity contending that the new proviso added to the Section interdicted the court from exercising the revisional jurisdiction is unworthy of any merit. The new proviso inserted is applicable only in the case of interlocutory orders in a trial or other proceeding and not against a final order, as has been clearly stated in Surya Dev Rai's case {2003 (3) KLT 490}.
10. Since the order impugned is a final order terminating the suit and not an interim order in a pending proceeding, the challenge raised on the maintainability on that count is meritless.
W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008
:: 15 ::
11. Learned counsel for the respondents has raised a challenge as to the competency of the revision petitioner, who is stated to be an agent alone, which, however, is disputed by the opposite counsel, that a revision, at his instance, against the order passed by the court below is not maintainable. The revision petitioner is the 2nd plaintiff in the suit and the 1st plaintiff is his son. The agreement of sale giving the right to sue for, specific performance, on its breech, was entered by the 2nd plaintiff on behalf of his son, the first plaintiff, and the defendants. The defendants have received money, as part of the sale consideration, from the 2nd plaintiff, who is prosecuting the suit as the power of attorney of the 1st plaintiff as well. I do not find any reason to doubt the competency of the revision petitioner to challenge the order passed by the court below dismissing the suit. Even assuming that he has no competency if it is disclosed that the order passed by the court below is per se illegal and it is so brought to the notice of the court by a party to the suit supervisory jurisdiction W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 16 ::
vested with this court demand and mandate annulling that order and passing orders necessary to advance the ends of justice.
12. The writ petition filed as against the order passed by the court directing the plaintiff to deposit the balance sale consideration within one week from the date of that order has been challenged as not maintainable since the suit itself has been dismissed by a subsequent order which has been challenged in the revision. As on the date when the writ petition was filed against an interim order, the suit had been dismissed of course, affects its entertainability. However, as in the revision filed challenging the final order dismissing the suit, the correctness, regularity and legality of interim orders leading to such final order can also be gone into, the attack on the entertainability of writ petition has got only academic value and not decisive at all.
13. On the facts presented and disclosed by the impugned order itself, what is noticed is that the court W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 17 ::
below has non-suited the plaintiff passing an order imputing that an 'undertaking' given by the plaintiff's counsel before the court had been violated. The counsel for the plaintiff had conceded to deposit the balance sale price, but it was not complied with, is construed as a flouting of an 'undertaking' in passing the order of dismissal of the suit. The learned counsel for the respondent has been asked to enlighten whether there is any provision in the Code permitting the court to non-suit the plaintiff under the circumstances indicated in the order of the court below. Though there is no express provision in the Code, according to the learned counsel, the court has ample jurisdiction to dismiss the suit if the 'undertaking' given is not complied with. At this stage, assuming that there was an 'undertaking' and it was flouted and an order had been passed by the court dismissing the suit, in the absence of a provision in the Code permitting the court to do so, it can be construed only as an order in exercise of inherent powers vested in W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 18 ::
the court under Section 151 of the Code, as no other provision permits such dismissal. When that be so, the order impugned falling under Section 151 of the Code, no doubt, is amenable to a challenge by way of a revision provided, jurisdictional infirmity in passing of such an order is made out. So on that count also, the revision is perfectly maintainable.
14. Now, on the Propriety and correctness of the order passed by the court dismissing the suit for the reason that the 'undertaking' given by the plaintiff's counsel was not complied with, indisputably, there is no specific provision in the Code empowering the court to pass such order of dismissal. The learned Sub Judge has relied on two decisions, both of them rendered under Order 11 Rule 21 of the Code Parukutty Amma's case {1988(1) KLT 883} and Mangalam's case {1992(2) KLT 553} as empowering the court to dismiss a suit under the circumstances indicated in the order. Both the decisions rendered by this court related to striking of W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 19 ::
defence, in the former Parukutty Amma's case {1988 (1) KLT 883} invoking Section 151 and also Order VI Rule 16 of the Code. Striking out of pleadings is governed by Order VI Rule 16 Code and striking out defence dismissal of suit under Order XI Rule 21 of the Code. In the present case, striking out pleadings under Order VI Rule 16 is totally inapplicable for dismissing the suit.
Striking out a defence or dismissing the suit for non- compliance with an order for discovery under Order XI Rule 21 of the Code can be proceeded only after an opportunity is extended to the party who has not complied with the order of discovery, inspection or furnishing of answers as directed. Without hearing him the court cannot dismiss the suit if it is the plaintiff, and strike out the defence if it is the defendant who has not complied with the discovery or inspection and to furnish answers to the interrogatories. The decisions relied by the court below have no applicability nor any of them is an authority recognising the power of a court to dismiss a suit for W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 20 ::
flouting an 'undertaking' given by the plaintiff or his counsel, even assuming such an undertaking had been given.
15. Placing emphasis on the readiness and willingness to be pleaded and proved by a party seeking specific performance of a contract before the court as stipulated in Section 16(c) of the Specific Relief Act, the learned counsel for the respondents has contended that the court has ample power to direct the plaintiff to deposit the balance sale consideration and if that is not complied with within the time fixed it can non-suit the plaintiff. Some of the observations contained in the decision in N.P.Thirugnanam v. Dr.R.Jagmohan {1995 (5) SCC 115} are relied to contend that the court can take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit, to consider the readiness and willingness on his part to get the relief of specific performance. Observations made by Apex Court relied by the counsel, as appearing in paragraph 4 of that W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 21 ::
decision, were with reference to the facts and circumstances in a case of specific performance which had been finally disposed of after trial. There is nothing in the above decision indicating that readiness and willingness of the plaintiff is to be determined as a preliminary question on an application moved by the defendants before trial, and they can compel the plaintiff to deposit the balance sale consideration. Even assuming that readiness and willingness can be adjudged as a preliminary point, the plaintiff should be given an opportunity to prove his case. No doubt, if a challenge thereof is raised an issue has to be framed and it has to be tried and decided. To show readiness and willingness the plaintiff in a specific performance need not furnish liquid cash and he need only show that he is possessed of funds or that he is capable of generating funds for the specific performance of the contract. In the present case, the plaintiffs have produced communication from the bank showing the bank balance of the first plaintiff, but, no enquiry as to the W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 22 ::
balance shown in that statement was conducted. When that be the case, it cannot be construed that the impugned order dismissing the suit is based on a decision taken by the court with reference to readiness and willingness of the plaintiff covered under Section 16(c) of the Specific Relief Act.
16. An interesting question also emerge for consideration whether a statement made by the counsel, that the balance sale price would be deposited before the court when a petition was moved by the defendants insisting such deposit, is an 'undertaking' given by the plaintiff. To constitute an 'undertaking', mere submission by the counsel to tender the deposit will not be sufficient. An 'undertaking' is a pledge and submission of the counsel to bind the party as an 'undertaking' the court must record that submission with notice to the counsel that submission is accepted as an 'undertaking'. A request for time with a representation to deposit the sum by the counsel, by no stretch of imagination, can be considered as an W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 23 ::
'undertaking' given by the plaintiff before the court. Assuming that the representation was an 'undertaking' it cannot lead to dismissal of a suit, even if it is flouted, without giving notice to the plaintiff to show cause why the 'undertaking' has not been complied with. Before a party is non-suited for the reason of an 'undertaking' given by the counsel, the elementary principles of natural justice demand that he should be heard. In spite of the fact that the plaintiff has produced statements issued by the bank showing his cash balance, which is not disputed as not sufficient to satisfy the balance sale consideration, for not depositing the sum, as if there was an 'undertaking' by the plaintiff's counsel to do so, the court below has dismissed the suit. The order passed by the court below is patently not only erroneous, but to say the least, an abuse of the process exceeding the jurisdiction vested with the court.
17. The rigour imposed under Section 24 of the Specific Relief Act, 1877 insisting for deposit of the balance sale consideration due under an agreement of sale W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 24 ::
to prove the readiness and willingness of the purchaser to establish his claim for specific performance of a contract by the opposite party was watered down and in fact given a goby under the new Act, Specific Relief Act, 1963 {for short "the Act"}. The recommendations of the Law Commission in its 9th report for dispensing with such onerous condition on a party seeking specific performance of a contract, in fact, has given rise to the liberalised provision under Section 16(c) with the 'Explanation' added to that Section under the new Act. Section 16(c) of the Act with the 'Explanation' thereto, which alone is relevant in the present case, read thus:
"16. xxx xxx xxxx xxx
(c) 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 the performance of which has been prevented or waived by the defendant.
Explanation -- For the purposes of Clause (c) W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 25 ::
(i) Where a contract involves 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;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.
Explanation (1) to Section 16(c) of the Act clearly demonstrate that it is not essential for the plaintiff to tender to the defendant or deposit in court any money except when he is directed to do so by the court. No doubt, the 'Explanation' if read in its literal sense would give rise to an interpretation that the court can direct the plaintiff to deposit the amount, the balance sale consideration in an agreement for sale at any stage of the trial of the suit. But to consider the scope and ambit of the 'Explanation' it is profitable to examine the back drop of the recommendation made by the Law Commission to W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 26 ::
dispensing with the deposit of balance money in a suit for a specific performance of a contract.
18. Section 24 of the Specific Relief Act, 1877 had given rise to conflicting views among the High Courts whether tender of balance sale consideration by the plaintiff suing for specific performance of an agreement of sale has to be insisted upon as part of his readiness and willingness to perform the obligations arising under the contract of sale. A conflict of judicial opinion as to the exact scope of readiness and willingness required by that doctrine prevailed. The Calcutta High Court took the view in Manikchandra Bhowmik v. Abhoy Charan Gope {37 IC 257} that tender or deposit must be made, but, the Bombay High Court in Tribhovandas Varjivandas v. Balmukundas Kishoredas {67 IC 865} held that it was not necessary that an actual tender be made in a suit for specific performance and it was enough if such payment was made as directed by the court. The Privy Council in Bank of India v. Jarosetji A.H.Chinoy {AIR 1950 PC W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 27 ::
90} endorsed the view of the Bombay High Court. The Law Commission of India, considering the different aspects over the question involved, in its 9th report recommended that a provision be made in the Act that it is not essential that the plaintiff should tender the money to the defendant or deposit in court except when so directed. In the light of the recommendation so made by the Law Commission, in the Specific Relief Act, 1963, an 'Explanation' is added to sub clause (c) Section 16 that "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."
19. Power of the court to insist or issue directions for tendering to the defendant or to deposit the balance sum due under the contract which involves payment of money is retained under the Explanation. But the larger question that has to be looked into is at what stage and under what circumstances the court can and is expected to pass such order for tendering to the defendant W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 28 ::
or to deposit in court any money require to be analysed. That question has come up for consideration before the High Court of Andhra Pradesh in Gonugunta Gopala Krishna Murthy v. Uppala Jwala Narasimham {AIR 2002 AP 68}. The Andhra Pradesh High Court dilating on the question has expressed the view that while exercising power under Section 16 of the Specific Relief Act to direct the plaintiff to deposit the balance sale consideration the court must prima facie come to the conclusion that a false and vexatious litigation has been filed and a direction to the plaintiff to deposit the balance sale consideration to prove his readiness and willingness to perform his part of the contract is necessary. View expressed in the above decision has to be examined with reference to the observations made by the apex court over the "readiness and willingness" to be established by the plaintiff in a suit for specific performance of a contract. The Apex Court in Azhar Sultana v. B.Rajamany & ors. {AIR 2009 SC 2157} W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 29 ::
has stated that in order to establish 'readiness and willingness' to perform the contract, it is not necessary that the entire amount should be kept ready by the plaintiff. In Boramma v. Krishna Gowda & ors. {2000 (9) SCC 214}, the Apex Court has held that even an answer from the plaintiff during the course of cross-
examination to the effect "I am unable to deposit the amount" cannot be read in isolation, but has to be considered on the totality of the facts and circumstances presented by materials to examine his readiness and willingness to perform his part of the contract.
20. During the trial of the suit, whether on a petition filed by the defendant, is it proper for the court to determine the readiness and willingness of the plaintiff, which is essentially a matter to be pleaded and established by evidence to enable the plaintiff to claim the specific relief applied for, has to be examined on the facts and circumstances involved and also materials produced in the case. No doubt, the court can issue a direction for W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 30 ::
deposit of the sum as empowered under the Explanation to the above Section, if it is satisfied that such a direction is called for in the case during the trial of the suit. But before issuing any such direction, an opportunity should be given to the plaintiff to produce relevant documentary materials as to his financial capacity showing his ability to complete the contract in accordance with its terms. If only the court is not satisfied from such materials it can insist for deposit of the balance sum due on the contract. As the disputed question over readiness and willingness of the plaintiff is an issue to be adjudicated in the suit it is imperative to provide an opportunity to tender materials in support of his case. In the absence of exceptional circumstance justifying the court to pass an order or direction to deposit the money before completion of the trial of the suit has to be avoided. At any rate, on the mere asking of the defendant filing a petition, without applying its mind to the facts and circumstances present in the case and also examining whether the defendant has W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 31 ::
complied with his obligations arising under the contract, it is not proper and appropriate for the court to direct the plaintiff to deposit the balance amount due under the contract invoking its power under Explanation to Section 16(c) of the Act. That power, during the course of trial, has to be exercised sparingly, and only when the court is satisfied from the facts presented and materials placed such a direction is necessary to advance the ends of justice.
21. In the given facts of the case, where it is seen even from Ext.P3 application filed by the 4th defendant on behalf of the defendants that the property covered by the agreement of sale involved the interest of some minors also, was it proper to the court to pass an order directing the plaintiff to deposit the balance sale consideration before the defendants could prima facie establish their competency to execute the sale deed crops up for consideration. Even now, the defendants have not moved for sanction from the competent court for W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 32 ::
permission to transfer the interest of the minors in the property to complete the contract of sale with the plaintiffs. What they contended in their written statement was that it was not necessary and they had obtained such sanction from court in respect of an earlier agreement of sale. Whether such sanction is necessary or not, which is a pure question of law, was not considered by the court, despite the dispute canvassed over that issue before ordering the plaintiff to deposit the balance sale consideration.
22. It is also interesting to note from the endorsements made in Ext.P2 copy of the agreement of sale, nearly 7 months after it was entered into on 14.10.2007, on the request of the defendants time was extended for completion of the contract till 22.1.2008 since they wanted such extension of time to show their clear unimpeachable title over the property to be conveyed despite being satisfied that the plaintiffs have arranged the balance sale consideration for completing W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 33 ::
the contract. Endorsement so made in Ext.P2 subscribed with the signatures of the defendants wherein the 2nd plaintiff had also signed on behalf of the first plaintiff, demonstrate the satisfaction of the defendants as to the raising of balance funds by the plaintiff, but they requested for extension of time stating that the plaintiffs need pay the balance sale consideration on the date of execution of the sale deed. Strangely enough, that circumstance was also not even considered or looked into by the learned Sub Judge while passing orders on Ext.P3 application of the defendants.
23. Ext.P3 application, as seen from the copy produced, was filed by the 4th defendant on behalf of all the defendants on 18.6.2008. That application came up before the court on 25.6.2008 and was adjourned to 28.6.2008 for counter and hearing. Ext.P4 counter was filed by the plaintiffs. On 28.6.2008, the learned Sub Judge has passed an order in the following lines: W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008
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"Plaintiff is directed to pay sale consideration by 5.7.2008. Defendants is directed to produce the original document for perusal by 5.7.2008".
As seen from the entries in the copy of Ext.P3 on 5.7.2008, the application was adjourned to 15.7.2008. The order dated 5.7.2008 reads thus:
"Prays for time NFT".
Obviously, there was a request from both parties or by the plaintiffs through the counsel to comply with the order dated 28.6.2008. From 15.7.2008 the case was adjourned to 31.7.2008. There is nothing to indicate from the orders passed by the court that there was an undertaking by the counsel for the plaintiffs other than a request for time to comply with the direction for deposit in Ext.P3 application. In the context, it has also to be noticed, the plaintiffs have produced communications from the bank (Exts.P5 series) at least by 27.6.2008 as seen from the endorsements made in such copies with a memo filed by their counsel to show that the first plaintiff has sufficient funds in the bank to W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 35 ::
complete the sale in accordance with the terms of the agreement. No challenge was raised before me that Ext.P5 series so produced by them are insufficient to satisfy the balance amount due under the agreement of sale. Ignoring that aspect, the court below passed the order dismissing the suit, as if there was an undertaking by the plaintiffs' counsel to deposit the balance sale consideration as directed by the court. The learned Sub Judge has not cared to examine the value and merit of Ext.P5 series. No opportunity was extended to the plaintiffs, if at all there was an undertaking by their counsel (which in fact appears to be not so) to show cause why they should not be proceeded for flouting and violating such undertaking. Suffice to state, the dismissal of the suit in the circumstances involved in the case was an irregular exercise of jurisdiction by the court discarding the fundamental principles applicable in the trial of a suit for specific performance of an agreement of sale, which, if not corrected, in exercise of the supervisory W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 36 ::
jurisdiction vested with this court, would result in travesty of justice.
24. A counter affidavit had been filed by the plaintiffs to the application moved by the defendants to direct them to deposit the balance sale consideration. The court had passed an order without adverting to such counter for depositing the balance sum within one week, with direction to the defendants to produce their title deeds 'for perusal'. It is the case of the plaintiff that the interest of some minor children are also involved in the property covered by the sale, and without permission from the competent court no transfer of the interest of the minors is permissible. Defendants have no case that they have obtained permission from the court with reference to the agreement for sale of the minors' property. Plaintiffs have already paid Rs.75 lakhs as part of the sale consideration and the balance amount due is more than Rs.1,17,00,000/-, it seems, was not even considered by the court when it passed an order for depositing the balance W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008 :: 37 ::
sale price within a week. The entire procedure followed by the court on Ext.P3 application filed by the defendants canvassing a direction for deposit of the balance sale price and in default to pass orders dismissing the suit, to say the least, indicate at least that there was some undue haste, if not judicial impropriety. Readiness and willingness in a suit for specific performance is to be pleaded and proved by the plaintiff to show his entitlement for the relief of specific performance. Pre-judging his readiness and willingness solely for the reason, on the basis of an application moved by the defendant directing deposit of the balance sale consideration, that too when he has not complied with and honoured the promise of the agreement is not proper and correct.
25. The orders impugned in the revision dismissing the suit shall stand set aside, and the orders passed in Ext.P3 application for deposit shall stand vacated. No further enquiry on Ext.P3 application will be entertained by the court and it shall be treated as closed. W.P.(C)No.25719 of 2008 & C.R.P.No.680 of 2008
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The court below is directed to give the suit top priority in trial and also to make every endeavour to dispose the suit as expeditiously as possible, but, providing reasonable opportunity to both sides to lead evidence in support of their case, at any rate, within a period of six months from the date of receipt/production of a copy of this judgment.
26. Parties are directed to appear before the court below on 09.04.2010.
Return the records forthwith.
Writ petition is closed, and the revision is allowed.
Sd/-
(S.S. SATHEESACHANDRAN) JUDGE SK/-
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