Andhra HC (Pre-Telangana)
Samineni Venkateswarlu And Another vs Nagubandi Venkata Narasiah (Died) And ... on 24 February, 1994
Equivalent citations: AIR1994AP220, 1994(1)ALT626, AIR 1994 ANDHRA PRADESH 220, (1994) 2 CIVLJ 304, (1994) 2 CURCC 302, (1994) 1 APLJ 254, (1994) 1 ANDH LT 626, (1994) 1 LS 179
ORDER Eswara Prasad, J.
1. This appeal is filed against the judgment of the learned single Judge in A.S. No. 1936 of 1988, dismissing the appeal filed by the unsuccessful plaintiffs in the suit laid for specific performance of the agreement of sale dated 11-9-75.
2. Defendants 1 and 2 executed an agreement of sale dated 11-9-75 in favour of the plaintiffs agreeing to convey the plaint schedule property in an extent of Ac.1-20 guntas of land situated in S.No. 766 at Kedada by executing a registered sate deed and agreeing to deliver possession of the land. The sale consideration was fixed at Rupees 1,10,000/- and the plaintiffs paid a sum of Rs. 40,000/- towards advance and the balance was agreed to be paid within three months thereafter. It was stipulated that the defendants should satisfy the plaintiffs about their title to the property and that it is also unencumbered. While so, the third defendant issued a notice dated 30-11-1975 to the first plaintiff and to first defendant, who is the brother of the third defendant, through a counsel disputing the title in himself. On receipt of the said notice, the plaintiffs approached defendants 1 and 2 and requested them to resolve the dispute and receive the balance of sale consideration. Defendants 1 and 2 assured that they would resolve the dispute and the first defendant got issued a reply dated 11-12-1975 to the third defendant reiterating that the plaint schedule propety fell to his share in a partition between himself and the third defendant. The third defendant reiterated his stand by sending a reply dated 28-12-75. The first defendant issued a further reply to third defendant and defendants 1 and 2 issued a notice dated 6-10-76 to the plaintiffs calling upon them to pay the balance of sale consideration within one week from the date of receipt of that notice and obtain a registered sale deed, making it clear that if the plaintiffs failed to do so, the agreement shall stand cancelled, and the advance paid by them would be forfeited.
3. Subsequent to the notice dated 6-10-76, the plaintiff filed the suit on 16-1-80 for specific performance of the agreement or in the alternative for recovery of Rs. 40,000/-paid by them as earnest money with interest in a sum of Rs. 1,65,000/- as damages for breach of contract with the above mentioned averments. Defendants 1 and 2 took the stand that the plaintiffs entered into an agreement of sale after being satisfied about the title of the defendants in the suit property. They denied that the plaintiffs approached them to resolve the alleged dispute regarding the title and to convey the suit property by receiving the balance of sale consideration and asserted that the plaintiffs were never ready to pay the balance of sale consideration, but culluded with the third defendant and got issued a false notice. They averred that further to the demand of the defendants to pay the balance of consideration by the notice dated 6-10-76, the plaintiffs kept quite for a long period of three years and filed the suit and therefore, they are not entitled for specific performance of the agreement of sale, nor to the refund of the advance amount, as the said amount has been forfeited in accordance with the terms of the agreement and they are also not entitled to any special damages as claimed. The third defendant took the stand that the suit land and some other properties were the joint family properties of their father and that there was a partition amongst the joint family, and that he is not bound by the suit agreement as he was not a party to the same, and that he is not a necessary party to the suit.
4. Necessary issues were framed by the trial Court and it was found that the plaintiffs were not ready and willing to perform their part of the contract, and they were not ready with the balance of sale consideration and dismissed the suit. The plaintiffs preferred appeal before this court. The learned single Judge agreed with the findings of the trial Court and dismissed the appeal giving rise to the present LPA.
5. Shri P. M. Gopala Rao, the learned counsel for the appellants, contended that the appellants were always ready and willing to perform their part of the contract and that they were always ready with the balance of sale consideration and the respondents 1 and 2 have committed breach of the agreement and did not satisfy the appellants with regard to the title to the suit property. He further submitted that the finding of the learned single Judge that there was a waiver of agreement on the part of the respondents 1 and 2 is not based on any pleadings or the evidence and is erroneous. He further con-tended that the appellants are entitled to wait till the last date of expiry of the period of three years from the date of receipt of the notice issued by the respondents 1 and 2 and there was no question of any laches on their part.
6. The learned counsel for the respondent 1 and 2 contended that the appellants entered into the agreement of sale after being fully satisfied with the title of the respondents Nos. 1 and 2 and that they did not pay the balance of sale consideration as demanded by them and filed the suit after a long period of five years from the date of the agreement of sale and as such, they are not entitled for the specific performance of the agreement of sale. He contended that the appellants having failed to deposit the balance of sale consideration are not entitled to the grant of a decree for specific performance, which is an equitable relief.
7. The question for consideration arising out of the rival contentions of the parties is, whether the appellants are entitled to a decree for specific performance of the agreement of sale?
8. On behalf of the plaintiffs/appellants, P.Ws. 1 to 4 were examined and Exs.A-1 to A-10 were marked. Defendants 1 and 2 examined D.Ws. 1 to 4 and marked Exs. B-1 to B-12, and Ex.X-1 is the agreement of sale dated 22-1-1973. Ex.A-1/agreement of sale is dated 11-9-1975. Respondents Nos. 1 and 2 agreed to execute a sale deed in favour of the appellants conveying an extent of Ac. 1.20 guntas in Survey No. 766 of Kodad for a total consideration of Rs. 1,65,000/- at the rate of Rs. 1,10,000/-per acre. Rs. 40,000'- was paid towards advance and the balance of sale consideration shall be paid within three months from the date of the agreement and the respondents Nos. 1 and 2 were to produce the documentary evidence relating to their title and that it is also unencumbered. The possession will be delivered on the execution of the sale deed. The 3rd respondent raised a dispute with regard to the title of the respondents Nos. 1 and 2 by issuing a notice dated 13-11-1975 (Ex.A-2) to the appellants, to which the appellants sent a reply, Ex.A-3, dated 11-12-1975. Once again, the third respondent sent a notice dated 28-12-1975 and the respondents 1 and 2 sent a reply, Ex. A-6, dated 13, (sic) 1976. The respondents Nos. 1 and 2 issued a notice, Ex.A-7 dated 20-10-1976 to the appellants calling upon them to pay the balance of sale consideration, to which the appellants did not send any reply nor deposit the balance of sale consideration. Another notice, Ex.A-9 dated 4-1-1977 was issued by the respondents 1 and 2, for which there was no reply and the suit was instituted by the appellants on 16-1-1980.
9. It is the contention of the appellants that they did not pay the balance of sale consideration, as there was a doubt thrown on the title of the vendors by the third respondent and the vendors failed to produce the documents relating to the partition which they alleged in their notices and did not clear the doubt relating to the title of the suit property. Therefore, they were justified in not depositing the balance of sale consideration. They contend that they were always ready and willing to deposit the balance of sale consideration. The delay in filing the suit on 16-1-1980 did not amount to waiver, as the suit was filed within the three years period from the date of Ex. A-9. The trial Court as well as the learned single Judge rejected this contention and came to the conclusion that the appellants were not read with the balance of sale consideration. It was further found that the conduct of the appellants amounted to waiver of the agreement.
10. Shri P. M. Gopala Rao, the learned counsel for the appellants referred to Cha-marthi Suryaprakasarayadu v. Arardhi Lakshminarasimhacharyulu, AIR 1914 Mad 462 and contended that the delay in instituting a suit is not always the evidence of waiver and should not be a ground for refusing a decree for specific performance of a contract of sale. He next relied upon the decision in S. V. Sankaralinga Nadar v. P.T.S. Ratna-swami Nadar, and contended that the waiver cannot be inferred and that there should be a specific plea in support of the contention of waiver and that the mere hike in prices cannot be a ground for rejection of claim for specific performance of the agreement of sale.
11. There is no dispute regarding the proposition of law as laid down in the decisions relied on by the learned counsel for the appellants. The question which has to be answered in this case is, whether from the facts and circumstances of the case, as established by the parties, the learned single Judge was correct to infer that the appellants have given up the rights under the contract?
12. From the evidence on record, it is noticed that the agreement of sale was entered into on 11-9-1975. There was exchange of notices between the parties and the last one of such notices was Ex. A-9 dated 4-1-1977. It is a legal notice got issued by the respondents Nos. 1 and 2 to the counsel for the appellants. It was stated in Ex.A-9 that eversince the partition between the respondents 1 and 2 and the 3rd respondent in the year 1957, respondents Nos. 1 and 2 have been in continuous possession and enjoyment and the rights of the 3rd respondent, if any, were extinguished and had no manner of right, title or interest in the suit schedule property. It was specifically alleged in the notice that the appellants not being ready to pay the balance of sale consideration are trying to take shelter in the notice issued by the third respondent. The appellants were required to pay the balance of sale consideration within one week from the date of receipt of the notice, Ex.A-9, failing which it was made clear that the advance paid by them under the agreement of sale will be forfeited. The receipt of this notice is not denied by the appellants. Having received the notice dated 4-12-1977, the appellants kept quiet till 16-1-1980 when the suit was filed. The relief of specific performance is an equitable relief and cannot be claimed as a matter of right. The appellants failed to establish the bona fides by depositing the balance of sale consideration even after the receipt of Ex.A-9. Though time was not the essence of the contract initially, Ex.A-9 by fixing the period of one week for payment of the balance of sale consideration after the receipt of the notice enjoined a duty on the appellants for showing the bona fides by depositing the balance of sale consideration.
13. In Messrs. Sriram Cotton Pressing Factory (P) Ltd. v. K. B. Narayanaswami Naidu, , a delay of nine months was considered for inferring waiver as laches on the part of the vendee. In the present case, the delay is three years. The learned single Judge was perfectly justified in drawing an inference of waiver from the facts and circumstances of the case.
14. The learned counsel for the appellants placing reliance on Mademsetty Satyanara-yana v. G. Yelloji Rao, contended that it is an error to hold that mere delay amounts to a waiver of abandonment apart from other facts and circumstances or conduct of the plaintiff indicating that the delay was due to a waiver or abandonment of the contract on the plaintiffs part. The said contention is based on the observations of Sadasiva Aiyar, J., in Chamarthi Suryapra-kasharayadu v. Arardhi Lakshminarasimhacharyulu, (AIR 1914 Mad 462) (supra). Dealing with the said observations, the Supreme Court held (at p. 1410) :--
"We do not think, though the observations of Sadasiva Aiyar, J., are rather wide, that the learned Judges intended to lay down that unless there is a waiver or abandonment by the plaintiff or his rights to sue for specific performance, he should be non-suited, for if that was the law, as we have pointed out earlier, the substantive part of S. 22 of the Specific Relief Act would become nugatory."
It was further observed (at p. 1410):--
"To sum up, while in England mere delay or laches may be a ground for refusing to give a relief of specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a court to refuse such a relief."
15. It is, therefore, clear that mere delay may not be a ground to disentitle the vendee from obtaining a sale deed unless it is coupled with some other conduct on his part as would cause prejudice to the vendors. Examined in the light of the observations of the Supreme Court, the conduct of the appellants in not depositing the balance of sale consideration, in spite of receiving Ex.A-9 notice and even after filing of the suit, would disentitle them from obtaining a decree for specific performance of the contract from the Court.
16. In J. Ramakoteswara Rao v. M. Kamalamma, 1986 (1) Andh LT 361 this Court held :--
"Stipulation as to time in the contract is not conclusive in determining whether time is made the essence of the contract, but the cumulative effect of the entire recitals in the contract in conjunction with the intention and conduct of the parties, nature of the property and totality of circumstances have to be considered bearing in mind the presumption that time is not normally the essence of contract in relation to contract of sale of immovable properties."
It was further observed that :--
"It must be stated that the presumption that time is not normally essence of the contract in cases of immovable properties does not bear a realistic impress in the present context of inflationary tendencies and gallopping increase in prices. It is scarcely an exaggeration when it is said that within the normal period of three or six months for execution of the sale deed from the date of contract there is a considerable increase in prices and the vendor is repenting for having committed to sale and second thoughts to resile from the agreement are not excluded. The leisurely approval and lukewarm adherence to the time schedule results in enormous loss to the vendor also as the value of money is rapidly eroding and depreciating."
17. Dealing with the delay and laches, a Division Bench of this Court in Damacharla Venkataseshaiah v. Damacharla Venkayya, held thus (para 33):--
"Two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval which might affect either party, and cause a balance of justice or injustice in taking the one course or other, so far as it relates to the remedy. In other words, delay has two aspects. It may lead to a change in the thing sold or it may imply acquiescence so as to bar a plaintiff's remedy. It is very important to keep these two things separate when the consequences of delay have to be considered in a given case."
18. In Smt. Chand Rani v. Smt. Kamal Rani, AIR 1933 SC 1742, it was held that though as a general proposition of Law, time is not essence of the contract in the case sale of immoveable property, let the parties can intend to make time as the essence of the contract.
19. Applying the principle laid down by the above decisions, I have no hesitation in holding that though the time was not the essence of the contract initially, by issuing Ex. A-9 notice, the respondents Nos. 1 and 2 made time as the essence of the contract. Inasmuch as the appellants did not comply with the conditions laid down by Ex.A-9 notice in depositing the balance of sale consideration, they are disentitled for a decree of specific performance of the contract. The relief being a discretionary relief cannot be granted keeping in view the escalation of prices due to the enormous delay from the date of the agreement in the year 1975 till the date of the institution of the suit.
20. The last submission made by the learned counsel for the appellants is that the respondents 1 and 2 failed to satisfy the appellants with regard to their title. Therefore, the appellants were justified in not depositing the balance of sale consideration. In support of his contention, he relied on the Commentaries by FRY on 'Specific Performance' (VI Edition) at page 609 (paras 1316and 1317), page 638 (para 1393) and page 645 (para 1411).
21. DW 1 stated in his evidence that the plaintiff entered into the agreement only after making enquiries about the title and verifying the revenue records and after satisfying about the title. He also stated that copies of the documents executed by the 3rd defendant/ 3rd respondent and his declaration under the Land Ceiling Act are shown to the appellants/plaintiffs along with the cist receipts. It is further stated that the suit property was worth Rs. 10,00,000/- on the date of deposition. Relying on the evidence, the trial Court as well as the learned single Judge came to the conclusion that the agreement was entered into after the plaintiffs/appellants were satisfied with regard to the title of the vendors. It was also found as a fact that-the plaintiffs were not ready with the balance of sale consideration. These findings are findings based on facts and also on consideration of the entire evidence on record. We see no reason to differ with the said findings of the fact in this Letters Patent Appeal.
22. In the result, the appeal fails and is accordingly dismissed. No costs.
23. We have heard the counsel for the cross-objectors. In view of the reasoning given in the Letters Patent Appeal, we see no merits in the contentions raised by the learned counsel for the cross-objectors. Hence, the cross-objections are also dismissed. No costs.
24. The learned counsel for the appellants makes an oral application for leave to appeal to the Supreme Court. We do not find any question of law, much less a substantial question of law of general importance which requires to be decided by the Supreme Court in this case. Therefore, the oral request is declined.
25. Appeal dismissed.