Madras High Court
Pachaiappan And Ors. vs S.P. Koon Mari on 25 June, 1996
Equivalent citations: (1996)2MLJ378
Author: M. Srinivasan
Bench: M. Srinivasan
JUDGMENT M. Srinivasan, J.
1.The appellants purchased the suit property from the respondent and his three minor sons represented by the respondent as their guardian on 5.2.1973 under Ex.B-1 for a sum of Rs. 21,000, out of which a sum of Rs. 13,200 was paid in cash. As regards the balance of Rs. 7,800 the appellants agreed to discharge within a period of five years the loan due to Dharmapuri Co-operative Land Development Bank. On the same day, the appellants executed a document marked as Ex.A-1 agreeing to reconvey the property to the respondent, if the latter paid the entire amount of sale consideration within a period of five years therefrom.
2. On 4.2.1978, the respondent filed O.S. No. 266 of 1978 on the file of Sub Court, Krishnagiri for a decree for specific performance. In the plaint it was alleged that the plaintiff was willing to deposit in court the sums due to the defendants. It was also alleged that the defendants had not discharged the loan due to the bank as agreed in the sale deed and the plaintiff had to repay only a sum of Rs. 13,500. It was further alleged that the plaintiff had offered payment of dues to the defendants several times, but they were postponing the event by giving false excuses and on 4.2.1978 refused to execute the deed of reconveyance.
3. The defendants in their written statement claimed to have discharged the loan due to the bank. It was contended that the plaintiff had come to court with a false case and he was never ready and willing to perform his part of the contract during the period of five years and therefore the suit should be dismissed with compensatory costs.
4. The Subordinate Judge held that the defendants had discharged the debts recited in the sale deed, that the plaintiff was not ready and willing to perform his part of the contract and that he had come to court with a false case. On those findings, the suit was dismissed. On appeal by the plaintiff in A.S. No. 1243 of 1980 in this Court, the learned Judge held that the defendants had not discharged the debts within five years as agreed to by them. It was also found that the plaintiff's case of having offered to the defendants to pay the dues and being ready and willing to deposit the entire amount due was true. It was also held that the plaintiff had not come with a false case but on the other hand the defendants had come forward with a false defence. Consequently, the appellate Judge reversed the judgment and decree of the Subordinate Judge and passed a decree for specific performance directing the plaintiff to deposit a sum of Rs. 21,000 in court within two months from the receipt of records in the trial court.
5. The aggrieved defendants have preferred this Letters Patent Appeal. It was brought to our notice by learned Counsel for the plaintiff that he had deposited the entire amount in court as directed by the decree in time.
6. According to learned Counsel for the appellants, the conduct of the defendants is wholly immaterial and irrelevant. It is argued that the plaintiff had claimed in the plaint that a sum of Rs. 13,500 was alone due to the defendants which would prove that he was not ready and willing to pay the entire amount due. It is further contended that the plaintiff put forward a new and false case in the evidence, that he had received only a sum of Rs. 11,500 at the time of sale and he was not therefore entitled to get the equitable relief of specific performance. On the other hand, the contentions of learned Counsel for the respondent are as follows: The plaintiff is not guilty of coming to court with a false plea. His erroneous statement in the evidence that he received only a sum of Rs. 11,500 in cash does not disentitle him to the relief. A suit for specific performance of reconveyance agreement stands on a different footing from a suit for enforcement of a contract for sale. For proving his readiness and willingness, he need not deposit the money in Court before suit. The fact that he deposited the entire amount within the time specified by the decree proves his readiness and willingness to perform his part. Hence, the appellate judgment, which has rendered justice should not be interfered with.
7. We have perused the records. We find no reason to reject the version of the plaintiff that he was ready and willing to perform his part of the contract by paying the amount due to the defendants. He has correctly stated in the plaint that the defendants have failed to discharge the debt due to the bank. Though the defendants denied the said statement and claimed to have discharged the loan, it is evident from the documents produced by themselves that the loan was not discharged before the filing of the suit. At the time when the suit was filed, the defendants had paid only Rs. 4,852 to the bank. Long after the fling of the suit, the defendants had paid a sum of Rs. 800 on 4.8.1978, Rs. 3,000 on 6.3.1979, Rs. 3,000 on 31.5.1979 and Rs. 527.65 on 29.8.1979 (vide Ex.B-2). Thus, it is seen that the defendants have not only failed to discharge the debts as agreed to in the sale deed within a period of five years, but have also set up a false plea in the written statement that they had already discharged the loan. The evidence of D.W.1 to the effect that the plaintiff never approached the defendants for payment of money cannot be believed.
8. No doubt, the plaintiff has, in the course of his evidence, stated that he received only a sum of Rs. 11,500 by way of cash at the time of Ex.B-1 and the remaining sum of Rs. 2,000 was retained by the defendants for discharging a debt due to one Munian. Though the case cannot be accepted a sit runs counter to the recitals in Ex.B-1, it cannot be rejected outright as a false case. Whatever may be the cash amount received by the plaintiff at the time of Ex.B-1, he has spoken categorically that he was prepared to pay the amount due to the defendants and made offers before the filing of the suit. He waited till 4.2.1978 and approached the court only when he found that the defendants were not willing to execute a reconveyance. The appellate Judge has not committed any error in accepting the evidence of plaintiff and rejecting the case of the defendants. We do not find any justification to reverse the findings of fact arrived at by the learned Appellate Judge.
9. The contention of learned Counsel for the respondent is that for proving readiness and willingness on the part of the plaintiff, it is not necessary to make deposit of the entire amount due before the filing of the suit and it is enough if the plaintiff is able to prove the same by other evidence and not by actual deposit. As we have accepted the evidence of the plaintiff that he was always ready and willing to pay the money due to the defendants and made offers to the defendants to pay the same, we hold that the plaintiff has established his readiness and willingness to perform his part of the contract.
10. Learned Counsel for the appellant invited our attention to the judgment of the Supreme Court in Tirugnanam v. Dr. Jagan Mohan Rao (1995)2 M.L.J. (S.C.) 118 : (1996)1 L.W. 239. It is held in that case that mere existence of a valid agreement of sale is no reason for court to grant relief of specific performance and continuous readiness and willingness on the part of the plaintiff is a condition precedent to the grant of relief. The court has also observed that the conduct of the plaintiff prior and subsequent to filing of suit and other surrounding circumstances are to be looked into, for deciding the question. We have already pointed out on the facts that it is the defendants who put forward a false plea of having discharged the loan due to the bank and after the filing of the suit proceeded to make payments to sustain their false plea. The above ruling does not help the defendants in view of our factual finding rendered above.
11. Reliance is placed on Jugraj Singh v. Raj Singh A.I.R. 1995 S.C. 945, in which it is held that continuous readiness and willingness at all stages from date of agreement till date of hearing of suit must be proved, in our opinion, the ruling cannot apply to a case of agreement for reconveyance. In the case of a sale with an agreement for reconveyance, the property is sold by the vendor, in order to get over a financial crisis. The agreement for reconveyance of the said property at the same price at which it was sold, after a certain period would itself show that the parties agreed that there was no permanent transfer of ownership and in the event of the vendor paying the amount of consideration within a particular date, his ownership would be restored. It has been repeatedly held that the sale and the agreement of reconveyance form part of one transaction. It has been construed to be an option to the vendor and an undertaking by the purchaser that he would execute a deed of reconveyance in the event of the exercise of the option by the vendor within the stipulated period. That is why it has been held that time is the essence of the contract of reconveyance and if the period lapsed, the vendor would lost the right to get back the property.
12. In Chinna Munuswami Nayudu v. Sagalaguna Nayudu 51 M.L.J. 229 : I.L.R. 49 Mad. 387 : A.I.R. 1926 Mad. 699, a Division Bench of this Court has considered the nature of a contract of reconveyance and held that the undertaking by the vendee under the said contract was not a mere standing offer, but was an executory contract, giving a right to the vendor to get a conveyance from the vendee and was assignable by the vendor. It was also held that the contract was part of the same transaction as the sale and was supported by consideration and that it was not personal to the original vendor, but was assignable and the same was not void for perpetuity, as the period for the exercise of the option was definite and limited. That decision was affirmed by the Privy Council in Sakalaguna Nayudu v. Chinna Munnuswami Nayakar I.L.R. 51 Mad. 533 : (1928)28 L.W. 51. On an earlier occasion, a Bench of this Court held in Narasingherji Nyanagerji v. Panuganti Parthasarathi Rayanam Gam 1921 M.W.N. 519 : A.I.R. 1921 Mad. 498, that the right to get a reconveyance is a property, which is assignable and heritable. No doubt, when the matter was taken to the Privy Council on appeal, it was held that on the facts of the case, the transaction was one of mortgage and the vendor was entitled to redeem the same (Vide I.L.R. 47 Mad. 729).
13. In Benode Behari Das Gupta v. Benow Bhusan Choudhury A.I.R. 1973 Gau. 66, a similar case arose for consideration. The plaintiff therein sold a house to the defendant for a sum of Rs. 400 in 1957. On the same date, the defendant executed a registered deed undertaking to retransfer the house on payment of Rs. 400 to him at any time within a period of five years. When the plaintiff approached the defendant for retransfer, the latter was putting him off and ultimately the suit was filed. One of the contentions raised by the defendant was that the plaintiff was much too poor a man to be in a position to arrange a sum of Rs. 400 to claim retransfer of the house to him and that actually he had filed the suit at the instance of persons inimically disposed towards him. It was also pointed out that the plaintiff had not deposited the amount in Court at the time of filing the suit. The trial court held that it was not obligatory for the plaintiff of deposit the amount while filing the suit. It was found that the plaintiff was ready and willing to perform his part of the contract. The suit was decreed. On appeal, the same was confirmed. On further appeal to the High Court, a learned single Judge held that the plaintiff was bound by the terms of the agreement to pay the sum of Rs. 400 to the defendant within five years from the date of the contract and he had not done so; nor had he deposited the money in court while filing the suit. On that footing, the appeal was allowed and the suit was dismissed. In the Letters Patent Appeal, the Division Bench reversed the conclusion of the single Judge and restored the decree passed by the trial court. The Division Bench placed reliance on the judgment of the Supreme Court in R.C. Candick v. Chunilal Sabharwal and also paragraph 62 of the Report of the Law Commission on the Specific Relief Act, 1877. The following passage in the Report of the Law Commission was extracted and relied upon by the Bench:
In connection with contracts for sale, a question has arisen whether in order to establish his readiness and willingness the plaintiff should have made a tender of the money due from him to the defendant. The further question which has been raised is whether the purchaser must in order to show his readiness and willingness, tender the money on the date fixed by the contract for completion. In a Calcutta case Manik v. Abhov (1917) 37 I.C. 257 : A.I.R. 1917 Cal. 283, it was held that such a tender must be made, while in a Bombay case Tribhobandas v. Balmukundass A.I.R. 1923 Bom. 23, it was held that an actual tender was not necessary for a suit for specific performance and it was enough if payment was made as directed by court. The Bombay view seems to have support in the observations of the Privy Council in Bank of India v. Chinoy A.I.R. 1950 P.C. 90, where it has been held that the plaintiff in such a suit need not deposit the money in court or prove his financial competence.
Having considered the different aspects of the question, we recommend that it should be provided that it is not essential that the plaintiff should tender the money to the defendant or deposit it in court except when so directed.
The Division Bench accepted the argument that there were two reciprocal promises to be simultaneously performed by the parties and the responsibility of the defendant when called upon to execute the deed of reconveyance was a relevant factor to be taken into account. On the facts it was held that the defendants were not ready to accept the amount tendered by the plaintiff and execute the reconveyance. The following passage in the judgment is relevant and instructive:
19. We may now sum of our conclusions. We hold that the contract between the parties falls in the category of contracts involving reciprocal promises; that the plaintiff had option to pay Rs. 400 to the defendant at any time within five years counted from 26.6.1957; that immediately the plaintiff paid or tendered the money to the defendant, the latter was bound in the terms of the contract to execute the deed of reconveyance in favour of the plaintiff and as such the contract is governed by the provisions of Section 51 of the Contract Act, that the plaintiff made repeated attempts to tender money to the defendant but the latter gave him a slip each time as he was determined not to reconvey the house to the plaintiff; that if the plaintiff's contention that the defendant was not out to honour his commitment is well founded, as we find it is, then the plaintiff was not legally required to manage paying somehow or other Rs. 400 to the defendant; that even if the contract is covered by Section 55 of the Contract Act the plaintiff was not bound to pay Rs. 400 to defendant if the latter was reluctant to reconvey the house to him; and that the entire blame for non-fulfilment of contract to this rests on the defendant.
14. The above ruling will apply on all fours to this case. We agree with the view expressed therein and hold that the plaintiff is not disentitled to get a decree for specific performance on the facts of the present case.
15. It is then contended that the plaintiff having made a false statement in the course of the evidence is not entitled to get the equitable relief of specific performance. Our attention is drawn to the judgments of this Court in Subbarayudu v. Tatayya 1937 M.W.N. 1158 and S. Sankaran v. N.G. Radhakrishnan (1994)2 L.W. 642. In the former case, a Division Bench held that the plaintiff was not entitled to specific performance, because he gave false testimony and because to grant him the relief would be doing injustice to the fourth respondent therein. The fourth respondent in that case was a subsequent agreement-holder. It was found that the plaintiff did not take any steps to prevent the first defendant from conveying the property to the fourth defendant and he sat by while the fourth respondent spent money on improving the property. There was a mortgage of it and the fourth respondent discharged it. It was in such circumstances, the court refused to grand specific performance to the plaintiff.
16. In the latter case, the plaintiff wanted a decree for specific performance with a variation and not in terms of the contract as such. The court found that he had put forward a false claim and he was trying to use the court as an instrument of oppression to gain an unfair advantage over the defendant. The Bench refused to grant specific performance on those findings.
17. The principle that the equitable relief of specific performance cannot be granted to a person who has put forward a false case is based on the doctrine that one who seeks equity must do equity. But the question whether the plaintiff is dis-entitled to claim the relief with depend on the facts of each case. If, in a particular case, a false claim set up by the plaintiff is immaterial and does not affect the main case in any manner, the court shall not refuse the relief. In the present case, the plaintiff has correctly stated in the plaint that he had received a sum of Rs. 13,500 in cash under Ex.B-1. He has also correctly stated that the defendants have not discharged the loan due to the society. But in his deposition, the plaintiff has for the first time said that he received a sum of Rs. 11,500 only in cash. No doubt that person is not proved. But the same does not in any way, affect the merits of the case. According to the deposition, a sum of Rs. 2,000 was retained by the defendants to discharge the loan due to one Munian. He has not stated in the deposition that the loan due to the said Munian was not discharged and, therefore, he was entitled to deduct that sum also from the amount payable to the defendants for getting reconveyance. He has categorically stated in the plaint that he is prepared to deposit in court whatever is the amount due to the defendants. In such circumstances, the version put forward in the deposition, even if it is false, cannot disentitle the plaintiff from getting the relief. The said version has not in any way misled the defendants or led to any injustice.
18. In S. Venkateswara Rao v. M. Subbayya A.I.R. 1958 A.P. 99, the court held that in a suit for specific performance of two contracts, the mere fact that the plaintiff put forward a false case in regard to the second contract would not entitle the court to refuse specific performance of the first contract, which was true, valid and binding. It was observed that to dismiss the suit for specific performance on the ground that the plaintiff had come with unclean hands was not justified. The court has derived the above said principle from the following passage in Halsbury's Laws of England, Second Edition, (Hailsham Edition), Volume 31, at page 301 quoted and relied upon by the learned Judge:
Where the plaintiff's non-performance is of a separate and collateral contract, although relating to the same subject-matter and entered into simultaneously with the agreement which it is sought to enforce, it does not constitute a defence.
19. In Ramjanam Bharthi v. Dhurandhar Kuer , the suit was for specific performance of an agreement under which the defendant had agreed to execute a deed of usufructuary mortgage for a certain amount. The plaintiff thought it proper to get the deed prepared on the stamp paper showing that it had been executed by the defendant, though the defendant had not actually done so. Beyond that, the plaintiff had not done anything and in fact, no amount was shown in the deed as due from the defendant higher than that agreed to; nor the property mentioned in the deed differed from or in excess of that agreed between them. The Court held that the fraud played by the plaintiff was not of such a nature as to bring in the application of the principle of law that the person who has not come to court with clean hands is not entitled to get the equitable relief of specific performance. The following passage in the judgment is relevant:
(10) The second point raised before me was that the plaintiff was not entitled to any relief whatsoever even on the admitted case when he had come to court with a forged document. A large number of cases were cited before me in support of this contention. Five of these cases are of this High Court and they are Ram Autar Shukul v. Baldeo Shukul A.I.R. 1932 Pat. 352; A.I.R. 1937 Pat. 425, Nagina Raj v. Raghubar Singh v. Perkash Singh A.I.R. 1939 Pat. 255 and Laduram Marwari v. Bansidhar Marwari 18 P.L.T. 640 : A.I.R. 1937 Pat. 572. All these cases deal with negotiable instruments, and, therefore, they are, in my opinion, not authorities for the proposition put before me by the learned Counsel in this case having regard to the facts thereof. The Negotiable Instruments Act itself contains the provision dealing with the consequences of forging or altering any negotiable instrument.
The learned Counsel for the appellant, however cited two other cases dealing with documents and bonds, and they are Gogun Chandar Ghose v. Dhunidhur Mundul I.L.R. 7 Cal. 616 and Mahila Bai v. Ram Singh A.I.R. 1954 M.B. 31. These cases also deal with consequence of alteration in a document, the document in controversy having been already in existence. That is the great distinguishing factor, because in the present case the finding is that no document had been in existence. This is not a case of any alteration, or forgoing in an already existing document. I, therefore, think that these cases do not help the appellant in this case.
(11) The only case made out by the defendant is that he had made over a stamp paper to the plaintiff for getting a zarpeshgi bond prepared. There is no case here that the document had actually been executed, and subsequently the plaintiff had made certain alteration and fabrications in the document. I agree that in a case in which the plaintiff has not come with clean hands and is guilty of fraud and forgery, he should not be given any relief ordinarily, but in the present case the only thing which can be said against the plaintiff was that for some reason or other not clear, he thought it proper to get a zarpeshgi bond prepared on the stamp paper, showing that it had been executed by the defendant which he had actually not done.
Beyond this he does not appear to have done anything to over-reach the defendant and put him to any loss. For instance, he did not mention in the document any amount due to him from the defendant higher than what actually was due, nor did he purport to include in the document any amount which was different from or in excess of what the parties had agreed to be the subject-matter of the agreement embodied in the compromise decree dated 10.1.1949. The fraud, therefore, is not of such a grave nature as to bring in the application of the above principle of law to disentitle the plaintiff to any relief whatsoever in this case.
20. Recently, in Guruswami Gounder v. Kesave Reddiar and Anr. , a learned Judge of this Court has considered this question and after referring to the various rulings on the point held that no uniform standard or formula as to what would constitute false case or approaching court with unclean hand can be adopted and the facts and circumstances of each case have to be considered. The learned Judge has said:
9. A careful consideration of the conclusions arrived by the learned Judges of the two Division Benches in the decisions cited supra, would go to show that the respective plaintiffs who approached the competent court in those cases have found to have not only pleaded false cases but tried to get a decree for specific performance of agreement in varied form Chockalingam's case, (1994)1 L.W. 321 and that the plaintiffs attempted to plead part satisfaction of the consideration relying upon materials and liabilities totally unconnected with the suit agreement. Though there can be no dispute with reference to the position of law that good faith and honesty are expected from parties, who want discretion of the court to be exercised in their favour, and that too, in exercise of jurisdiction in equity, there is no comparison of the cases which were under consideration of the learned Judges of the Division Benches referred to supra with the case before me. It is not every incorrect case pleaded or plea made and rejected by the courts that recoils on the plaintiff to be dubbed and castigated as having come with a false case or unclean hands to seek an equitable remedy available in the discretion of the court. It should depend upon the facts of each case and the peculiar circumstances substantiated in a particular case before court, and there can be no standardised formula to uniformly deal with the plea in all matters. As noticed earlier during the course of narration of facts, it is seen that though the plaintiff pleaded that a sum of Rs. 4,000 has been paid on 29.4.1979 without obtaining a receipt or endorsement therefor, he has also stated that if the court is not satisfied with the claim of such payment on that particular date, the plaintiff was ready and willing to deposit that amount also. In the context of the said plea and the conduct of the plaintiff, there is no scope for condemning the plaintiff as having come with unclean hands or with a false case, merely because he could not establish his plea of payment on that particular date. In this view of the matter, I am unable to agree with the learned Counsel for the appellant that the plaintiff should be denied the relief of specific performance on the ground of his alleged approach to the court with unclean hands.
21. We are in agreement with the view expressed by the learned Judge in the above passage. We hold that in the facts of the present case, the statement of the plaintiff made in the deposition for the first time which runs counter to the recitals in Ex.B-1 does not disentitle him from getting the equitable relief of specific performance of the contract.
22. It is contended by learned Counsel for the plaintiff that the principle that equitable relief should not be granted to a person who has approached the court with unclean hands, cannot be as strictly enforced in a suit for specific performance of an agreement of reconveyance as in the case of a suit for specific performance of other agreements. It is submitted by him that in the case of reconveyance agreement, the plaintiff is seeking to get back his own property, which he had earlier placed in the name of the defendant in order to get over a financial crisis. But in the other case, a person seeks to become the owner of the property for the first time by enforcing an agreement. There is considerable force in this argument and we are inclined to accept the same. In the case of an agreement for reconveyance, the court cannot adopt the same stringent standards as are applicable to a case of enforcement of other agreements. The person who was the owner of the property and had, by force of circumstances, to part with the same for a temporary period and the purchaser being fully aware of the same, having undertaken to restore the status quo ante by reconveying the property for the same amount of consideration cannot be placed on the same pedestal as a person who seeks to enquire ownership of the property for the first time by enforcing an agreement. Hence, on the facts and circumstances of the case, we hold that the plaintiff is not guilty of any act which would prevent him from getting the decree for specific performance.
23. In the result, this appeal is dismissed and the judgment and decree passed by the learned single Judge are confirmed. There will, however, be no order as to costs.