Punjab-Haryana High Court
Pritam Singh vs Sukhdev Singh And Anr. on 13 January, 2005
Equivalent citations: (2005)140PLR219
Author: Hemant Gupta
Bench: Hemant Gupta
JUDGMENT Hemant Gupta, J.
1. This judgment shall dispose of Regular Second Appeal No. 1105 and 1486 of 1991 arising out of suit for specific performance of agreement of sale dated 9.8.1978 entered into by defendant Pritam Singh in favour of plaintiffs Sukhdev Singh and Subhash Chander.
2. On 9.8.1978, the defendant agreed to sell Kabari shop No. 52 in the Industrial Area, Chandigarh, for a total consideration of Rs. 75,000/-. An amount of Rs. 15,000/-was paid to the defendant at the time of execution of the agreement to sell whereas a sum of Rs. 25,000/- was be paid by 22.08.1978 and the remaining sum of Rs. 35,000/-was to be paid by 9.8.1979 i.e. at the time of execution and registration of sale deed. It is alleged by the plaintiffs that the defendant received @ sum of Rs. 25,000/- on 6.9.1978 and agreed to receive the balance amount at the time of registration of sale deed. A sum of Rs. 4302/- was deposited by the plaintiffs at the request of the defendant with the Estate Office, Chandigarh, as certain proceedings were pending against the defendant. Another sum of Rs. 15,000/- was paid to the defendant at Jagadhri in the first week of April, 1979, at the time of marriage of son of the defendant and, thus, a sum of Rs. 59,302/- has been received by the defendant from the plaintiffs towards the total sale consideration but the defendant refused to abide by the terms and conditions pf the contract. A registered notice was sent to the defendant at his Chandigarh address which remained undelivered. Another notice was sent to the defendant at Jagadhri which was received by the relative of the defendant, namely Harbans Singh. Still further, it has been alleged that the defendant filed ejectment petition against Subhash Chander plaintiff No. 2 for ejectment under Section 13 of the East Punjab Urban Rent Restriction Act, 1949, for the reason that the tenant is in arrears of rent. Thus, the plaintiffs allege that the defendant is going back on his agreement and is not willing to execute the sale deed whereas the plaintiffs are ready and willing to perform their pay of the contract and, thus, sought specific performance of the agreement with the intervention of the Court.
3. The defendant admitted the agreement but alleged that the plaintiffs have failed to honour the agreement and has violated the terms and conditions of the same. The payment of Rs. 25,000/- vide receipt dated 6.9.1978 was not denied but it was alleged that the plaintiffs did not make any payment in terms of the agreement and, therefore, failed to discharge their part of duty under the contract and, therefore, the plaintiffs are not entitled to the relief claimed in the suit. It is further stated that the agreement is not legal and valid inasmuch as permission from Chandigarh Administration through the Estate Office, Chandigarh, was not obtained. Therefore, the amount paid by the plaintiffs was forfeited.
4. It is a finding of fact recorded by the learned trial Court that a sum of Rs. 15,000/-allegedly paid by the plaintiffs to the defendant in April, 1979, and deposit of Rs. 4302/-in the Estate Office, Chandigarh, has not been proved on the record. Such finding was affirmed by the learned first Appellate Court. The plaintiffs have challenged such findings by way of Regular Second Appeal No. 1105 of 1991.
5. Before deciding the question arising out of defendant's appeal, it would be necessary to decide the question whether the plaintiffs have proved the payment of Rs. 15,000/- in April, 1979, or deposit of a sum of Rs. 4302/- in the Estate Office, Chandigarh. The entire case of the plaintiffs is based upon either on oral evidence of payment of Rs. 15,000/- or on receipt Exhibit P-4 which is a counterfoil of deposit of Rs. 4302/-for the purposes of preparation of draft. The amount of draft is Rs. 4300/- whereas exchange is Rs. 2/-. However, the said receipt does not show that the draft was prepared in the name of Estate Office, Chandigarh, and was deposited on behalf of the defendant with the Estate Office. The plaintiffs have not produced any witness from the Estate Office to the effect that Rs. 4300/- has been paid by the plaintiffs on behalf of the defendant or by anybody else vide demand draft allegedly issued on the basis of counterfoil Exhibit P-4. Still further, the reasoning given by the trial Court that payment of Rs. 15,000/- in the month of April, 1979, cannot be believed as such payment is allegedly without any receipt is possible finding based upon appreciation of evidence. Keeping in view the above said reasoning. I do not find that the finding recorded by the Courts below that the plaintiffs have failed to prove the payment of Rs. 15,000/- and deposit of Rs. 4302/- warrants interference by this Court in second appeal.
6. Therefore, following substantial question of law arises for consideration of this Court:-
Whether the plaintiffs were ready and willing to perform their part of the contract when part payment alleged by the plaintiffs is not proved?
The plaintiff had paid a sum of Rs. 15,000/- at the time of execution of agreement and another sum of Rs. 25,000/- on 6.9.1978 though it was contemplated to be paid by 22.08.1978. Though learned counsel for the defendant has argued that payment was not made on or before 22.08.1978 and time was essence of the contract but said argument is not tenable in law. It is well settled that time is not essence of the contract in cases for the purchase of immovable property. Reference may be made to Constitution Bench judgment of the Supreme Court reported as Smt. Chand Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs., A.I.R. 1993 S.C. 1742 wherein it was held to the following effect:-
"24. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:
1. from the express terms of the contract
2. from the nature of the property; and
3. from the surrounding circumstances, for example: the object of making the contract."
8. In view of the said judgment, it is apparent that though payment of Rs. 25,000/-was made to the defendant on 6.9.1978 but that is after about 15 days of the stipulated date in the agreement that will not affect the right of the plaintiffs to seek specific performance of the agreement to sell. However, the material question which arises is that the plaintiffs having failed to prove the payment of Rs. 19302/- i.e. Rs. 15,000/- in April, 1979, and another sum of Rs. 4302/- on behalf of the defendant, still the plaintiffs can be said to be ready and willing to perform their part of the contract.
9. In para No. 6 of the plaint, the plaintiffs have categorically pleaded that they have paid a sum of Rs. 59,302/- towards the sale consideration and the plaintiffs were ready and willing to perform their part of the contract and to pay the balance of sale price. As per stand of the plaintiffs, balance price comes to Rs. 15698/- on the date of filing of the suit. Still further, in the notice Exhibit P-6 dated 3.7.1980, the plaintiffs have again asserted that the defendant has received Rs. 59302/- towards the above agreement of sale and that the plaintiffs have been offering the balance of the purchase money. The balance of the purchase money again comes to Rs. 15698/-. Neither in the plaint nor in the notice it is the case of the plaintiffs that they are ready and willing to pay the entire amount of Rs. 35,000/-. Even the plaintiff while appearing as his own witness has not stated that he is ready and willing to pay the entire balance amount of Rs. 35,000/-. Rather, he asserted that he had paid a sum of Rs. 15,000/- in cash at the time of marriage of the son of the defendant. Even in cross-examination, plaintiff Subhash Chander has deposed that a total sum of Rs. 59,302/- has been paid to the defendant under the sale agreement. In view of the said stand of the plaintiffs before the filing of the suit and thereafter shows that the plaintiffs have asserted payment of Rs. 59302/- and that they are ready and willing to pay the balance sale consideration. It is not the case of the plaintiffs at any point of time that they are ready and willing to pay the entire amount of Rs. 35,000/-. Thus, the finding recorded by the Courts below that the plaintiffs were ready and willing to perform their part of the contract i.e. to pay the balance sale consideration of Rs. 35,000/- is not sustainable in law.
10. Hon'ble Supreme Court in the judgment reported as His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) Supreme Court Cases 526, has examined the readiness and willingness required by the plaintiff to perform his part of the contract. It was held that 'readiness' means the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price whereas for determining the 'willingness' the conduct has to be properly scrutinised. The factum of readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. Whether the plaintiff was ready, and was always ready and willing to perform his part of the contract. In para No. 2 of the judgment, Hon'ble Court held as under:-
"There is a distinction between readiness to perform the contract. "By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to . perform his part of the contract, the conduct has to be properly scrutinized. There is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had the funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale deed to the defendant within 7 days of the execution of the agreement i.e. by 27.2.1975. The draft sale deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff's part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may inter from the facts and circumstances whether the plaintiff was ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time is of the essence of the contract."
11. Keeping in view the said judgment, it is to be noticed that plaintiff No. 2 Sub-hash Chander is a tenant in the premises in dispute. He stopped paying rent which necessitated filing of ejectment petition. He alleged part payment of Rs. 19302/- towards sale consideration. The said payment is not proved. The substantial amount of the balance sale consideration i.e. Rs. 19302/- out of Rs. 35,000/-, is not proved to be paid. Thus, the plaintiffs were not wiling to perform their part of the contract. One cannot lose sight of the fact that it was the plaintiff who challenged the decree passed by the learned Courts below before this Court and sought stay of the execution of the decree. The necessary inference is that the plaintiffs were not even willing to pay the balance amount of Rs. 35,000/- even after the decree was passed by the Courts below. Thus, the finding recorded by the Courts below that the plaintiffs were ready and willing to perform their part of the contract is not sustainable in law and, therefore, set aside.
12. Consequently, the appeal filed by the defendant is accepted. The judgment and decree passed by the Courts below is set aside and the suit filed by the plaintiff is dismissed with no order as to costs.