Karnataka High Court
Subhash Bagaria vs Sri Saraswathi Smelting & Refining ... on 6 August, 2014
Bench: K.L.Manjunath, A.V.Chandrashekara
IN THE HIGH COURT OF KARNATAKA AT
BANGALORE
DATED THIS THE 6TH DAY OF AUGUST, 2014
PRESENT
THE HON'BLE MR JUSTICE K L MANJUNATH
AND
THE HON'BLE MR JUSTICE A V CHANDRASHEKARA
Regular First Appeal No. 1084 of 2007 (SP-DB)
BETWEEN:
1. SUBHASH BAGARIA
SINCE DEAD BY LRs
a) SMT KUM KUM BAGARIA
W/O LATE SUBHASH BAGARIA
AGED ABOUT 54 YEARS,
b) ANURAG BAGARIA
S/O LATE SUBHASH BAGARIA
AGED ABOUT 34 YEARS,
c) KARAN BAGARIA
S/O LATE SUBHASH BAGARIA
AGED ABOUT 25 YEARS,
ALL ARE R/AT NO.157/A,
8TH 'B' MAIN ROAD
R M V EXTENSION
BANGALORE - 560 080
2. BAGARIA UDYOG
NO. 11, TUMKUR ROAD
YESHWANTHAPURA
BANGALORE - 560 022
A REGISTERED
PARTNERSHIP FIRM
2
REP. BY ITS PARTNER
SRI SUBHASH BAGARIA ... APPELLANTS
[By Sri C M Nagabushana, Adv.]
AND:
1. SRI SARASWATHI SMELTING
& REFINING COMPANY
NO. 45, LINK ROAD,
BANGALORE - 560 053
A PARTNERSHIP FIRM
REP. BY ITS PARTNERS,
THE R2, R3 & R4 HEREIN
2. SRI S V AMARNATH
S/O LATE S N VENKATA-
RATHNAM GUPTA
AGED ABOUT 64 YEARS
3. SRI S V RAMESH
S/O LATE S N VENKATA-
RATHNAM GUPTA
AGED ABOUT 62 YEARS
4. SMT ANNAPOORNAMMA
W/O LATE S N VENKATA-
RATHNAM GUPTA
AGED ABOUT 84 YEARS
5. THE KARNATAKA INDUSTRIAL
AREAS DEVELOPMENT BOARD
RASHTROTHANA PARISHAT BUILDING
NO.14/2, NRUPATHUNGA ROAD
BANGALORE - 560 001
REP. BY ITS EXECUTIVE MEMBER ... RESPONDENTS
[By Sri M D Raghunath, Adv. for R1 to R4;
Sri B P Puttasiddaiah, Adv. for R5]
THIS APPEAL IS FILED UNDER SECTION 96 OF CODE OF
CIVIL PROCEDURE, AGAINST THE JUDGMENT AND DECREE
DATED 20.02.2007 PASSED IN O.S. NO. 749/1997 ON THE FILE OF
THE PRL. CIVIL JUDGE (SR.DN.), BANGALORE RURAL DISTRICT,
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BANGALORE, PARTLY DECREEING THE SUIT FOR SPECIFIC
PERFORMANCE AND ETC.,
THIS APPEAL COMING ON FOR HEARING, THIS DAY,
MANJUNATH, J., DELIVERED THE FOLLOWING:
JUDGMENT
Being not satisfied with the judgment and decree dated 20-2-2007 in OS No 749 of 1997, on the file of Principal Civil Judge (Sr Dn), Bangalore Rural district, Bangalore, the appellants, who were plaintiffs in the suit, have filed this appeal under section 96 of Code of Civil Procedure,.
2. Heard the learned counsel for the parties.
3. For the sake of convenience, the parties would be referred to as per their ranking in the trial court.
4. Suit was filed by the plaintiffs to direct the defendants 1 to 4 to obtain a sale deed from the fifth defendant in respect of the suit schedule property and thereafter to execute a sale deed in favour of the first plaintiff or to direct 4 the fifth defendant to execute a sale deed directly in favour of the first plaintiff and on failure of the defendants to do so, to execute the sale deed through the court or in the alternative to direct the respondents 1 to 4 to refund a sum of Rs 10,66,770/- with interest at the rate of 24% p.a. from 27-11-1993 till the date of payment.
5. The relief sought for by the plaintiff is in respect of an industrial plot with existing building and 4HP power connection bearing Plot No 31A, situated at the KIADB Industrial Area, Kumbalgodu, Bangalore south, admeasuring 7991 sqmtrs.
6. According to plaint averments, the second plaintiff is a registered partnership firm and the first plaintiff is one of its partners. The first defendant is also a registered partnership firm and defendants 2 to 4 are its partners. Suit schedule property was allotted to the first plaintiff-firm by the fifth defendant - KIADB. Since defendants 1 to 4 were not able to run the factory, they closed their business 5 and defaulted in paying installments due to the fifth defendant. Hence, according to the plaintiffs, the defendants 1 to 4 intended to sell the suit schedule property. According to the plaintiffs, the first defendant approached the plaintiffs offering the suit schedule property for a sale consideration of Rs 18.60 lakh and defendants 2 and 3, representing the first defendant-firm, assured that they would secure the necessary permission from fifth defendant to transfer the suit schedule property in favour of first plaintiff. Accordingly, a sum of Rs 1.00 lakh was paid through cheque on 27-11-1993, which cheque was received by the defendants 2 and 3 on behalf of defendants 1 to 4. Subsequently, on 16-11-1994, a further sum of Rs 5.00 lakh was paid through cheque drawn on Canara bank, Tumkur road branch, Bangalore. The said cheque was received by the second defendant. Accordingly, a sum of Rs 6.00 lakh was paid as advance towards sale consideration to the defendants 1 to 4. In order to transfer the suit schedule property in favour of the 6 first or second plaintiff, the defendants 1 to 4 felt that they would convert the partnership business temporarily into a private limited company and get the suit schedule property transferred by the fifth defendant from the name of first defendant-firm to the name of the proposed private limited company. Accordingly, a private limited company under the name and style of M/s Bio-worth Private Ltd. was floated by the defendants 2 to 4 and one Sri C R Chandak, as directors.
7. It is also the case of the plaintiffs a request was made by the second defendant to fifth defendant seeking permission for such conversion and transfer of the suit schedule property to M/s Bio-worth Private Ltd. Accordingly, a sum of Rs 2.50 lakh was also received by the second defendant from the aforesaid private limited company. According to plaint averments, the first plaintiff was always ready and willing to perform his part of the contract. According to the plaintiffs, they were also put in 7 possession of the suit schedule property by the defendants 1 to 4 and the plaintiffs have improved the property by constructing a compound, as the property was not fenced properly. They have got renovated the ACC roof building, which was in a dilapidated condition, by spending a sum of Rs 4,66,770/- through M/s Rashmi Constructions. According to the plaintiffs, the amount spent by the first plaintiff for renovation of the building and construction of a compound has to be adjusted towards the payment of balance sale consideration. In the circumstances, the suit came to be filed on the ground that the defendants have failed to execute the sale deed.
8. The defendants 1 to 4 filed their written statement and contested the suit. It was contended that the third defendant is not a partner of first defendant-firm, since he retired from the directorship in the year 1991. They have denied that the second plaintiff-firm was a registered partnership firm and therefore contended that the suit filed 8 by the second plaintiff-firm is not maintainable. It is the specific case of the defendants 1 to 4 that the suit schedule property was allotted to them by the fifth defendant in the year 1982 under a lease agreement. They have denied that they were unable to run the factory and the factory was therefore closed. It is their specific case that there was no agreement to sell the suit schedule property in favour of first plaintiff. They have denied that they had agreed to sell the property for a sum of Rs 18.60 lakh. Receipt of Rs 1.00 lakh and Rs 5.00 lakh under two separate cheques towards the sale consideration from the first plaintiff has been specifically denied.
9. It is the specific case of the defendants that the second and third defendants are the directors of the company known as M/s Bio-worth Private Ltd, and the first plaintiff and one S R Chandak were also directors of the said company, which was registered and floated with an idea of taking over the assets and liabilities of first 9 defendant firm, since the same was not possible on account of the objection raised by the fifth respondent-KIADB. According to them, defendants 2 and 4 are the major shareholders of M/s Bio-worth Private Ltd. A cheque for a sum of Rs 2.50 lakh was issued by M/s Bio-worth Private Ltd in favour of second defendant and two cheques i.e., one for a sum of Rs 1.00 lakh and the other for Rs 5.00 lakh were issued by the second plaintiff firm in favour of first defendant for transfer of the suit schedule property in favour of M/s Bio-worth Private Ltd, since the first plaintiff and S R Chandak were also directors of M/s Bio-worth Private Ltd. However, they did not take any interest to get the property transferred in the name of M/s Bio-worth Private Ltd. It is averred by the defendants 1 to 4 that there is no privity of contract and the suit filed by the plaintiffs to enforce specific performance of the contract is not at all maintainable in law or on facts. It is averred that the fifth defendant did not agree for the merger of the first 10 defendant firm with M/s Bio-worth Private Ltd and that the notice got issued by the plaintiffs has been suitably relied.
10. Based on such rival contentions, the trial court framed the following issues and additional issues:
ISSUES
1) Whether the plaintiffs prove that 2nd plaintiff is a registered Partnership Firm and the 1st plaintiff is the partner of the same?
2) Whether the plaintiffs further prove that the suit schedule property was allotted to defendant No.1 Partnership Firm?
3) Whether the plaintiffs prove that defendants 1 to 4 offered to sell to plaintiff No.1 the suit schedule property along with the shed and machinery therein for valuable sale consideration of Rs.18,60,000/- and received advance of Rs.1,00,000/- under the cheque dated 27.11.93 and executed the agreement on the same day?
4) Whether the plaintiff further proves that the defendant received Rs.5,00,000/- on 16.11.94 by way of cheque in total they received Rs.6,00,000/- being part consideration amount?
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5) Whether the plaintiff further proves that they got converted the partnership business into a Private Limited Company under circumstances stated in para 8 of the plaint?
6) Whether the plaintiff further proves that he is always ready and willing to perform his part of the contract?
7) Whether the plaintiffs further prove that they were put in possession of the property and they have improved the suit property by speeding Rs.4,66,770/-?
8) Whether the plaintiff is entitled for relief of specific performance of contract?
9) Whether the plaintiff proves that the defendant nos. 1 to 3 are the mis-joinder of necessary parties?
10) What award or order?
ADDITIONAL ISSUE
1. Whether the defendants 1 to 4 prove that the alleged contract is unenforceable, as it is against the public policy and is against the law?
11. In order to prove their respective cases, on behalf of the plaintiffs, three witnesses have been examined. PW1 is the first plaintiff, PW2 Sriram Chandak, who is none other 12 than a director of M/s Bio-worth Private Ltd, and PW3 is the contractor through whom the plaintiffs claim to have got constructed the compound and renovated the ACC building. Plaintiffs have relied on ExP1 to 26. On behalf of the defendants, second defendant, who is a partner of first defendant-firm and a director of M/s Bio-worth Private Ltd is examined as DW1 and relied ExD1 to 11.
12. The trial court, after appreciating the entire evidence on record has answered issue No 1 in the affirmative, issue No 2 partly in the affirmative, holding that the suit schedule property has been allotted to the first defendant by the fifth defendant under a lease-cum-sale agreement. Issue No 3 is answered in the negative, holding that the defendants 1 to 4 have received Rs 6.00 lakh from the plaintiffs regarding transfer of the suit schedule property to M/s Bio-worth Private Ltd. Issue No 4 is answered in the negative, holding that the defendants 1 to 4 have received Rs 6.00 lakh from the plaintiffs regarding transfer of suit 13 schedule property to M/s Bio-worth Private Ltd. Issue No 5 is answered in the negative, holding that M/s Bio-worth Private Ltd was formed to take over the assets of the first defendant firm in favour of M/s Bio-worth Private Ltd. The other issues viz., issues 6 to 9 are answered in the negative and the sole additional issue framed by the court below is answered in the affirmative. Ultimately, the plaintiffs' suit has been decreed in part. Relief sought by the plaintiffs to direct the defendants to execute a sale deed in respect of the suit schedule property is rejected. However, a decree is granted in favour of plaintiffs directing the defendants 1 to 4 to refund Rs 6.00 lakh with proportionate court costs and interest at the rate of 10% p.a. from 27-11-1993 till the date of deposit.
13. Being not satisfied with the partial decree granted for refund of Rs 6.00 lakh with interest, the present appeal is filed by the plaintiffs.
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14. Though several grounds have been urged in the memorandum of appeal filed under section 96 of Code of Civil Procedure, at the time of arguments, Sri C M Nagabhushana, learned counsel for the appellants- plaintiffs, has raised the following grounds in support of his arguments.
15. According to him, the trial court has failed to appreciate the evidence, both oral and documentary, in right perspective. It is further contended by him that ExP2 and 3 have not been properly analyzed by the court below, even though the defendants 1 to 4 have accepted receipt of Rs 6.00 lakh from the plaintiffs. According to him, the word 'transfer' mentioned in ExP2 and 3 is required to be considered as if the defendants 1 to 4 agreed to sell the suit schedule property. The trial court has also erred in not appreciating the fact that when the plaintiffs paid a sum of Rs 6.00 lakh as advance and when the plaintiffs have improved the property by engaging the services of PW3 15 contractor for construction of compound and repair the ACC sheet building, the trial court was required to hold that the plaintiffs were always ready and willing to perform their part of the contract and that the finding of the trial court that the defendants 1 to 4 had received the amount to transfer the suit schedule property with the consent of fifth respondent to a company floated by the first plaintiff and PW2 along with defendants 2 and 3 is incorrect. According to him, there was no agreement between the plaintiffs and the defendants that the amount covered under ExP2 and 3 was received by the defendants 2 and 3 for transfer of assets and liabilities of the first defendant- firm to a company known as M/s Bio-worth Private Ltd. According to him, the trial court has erred in not granting a decree of specific performance of contract, since the plaintiffs were ready and willing to perform their part of the contract. It is further contended by the learned counsel for the appellants-plaintiffs that when the plaintiffs' capacity to pay the balance sale consideration is not 16 questioned by the defendants, the trial court should have granted a decree as sought for by the plaintiffs.
16. Per contra, Sri M D Raghunath, learned counsel for the defendants 1 to 4, submits that none of the grounds urged by the appellants' counsel is tenable, because, at the first instance, there is no privity of contract between the plaintiffs and the defendants 1 to 4 to sell the suit schedule property. According to him, the terms of the contract have not been pleaded either in the legal notice or in the plaint. According to him, the first plaintiff has admitted in his evidence that he was not present when the sale transaction took place. If the first plaintiff, as a partner of second plaintiff-firm, has not participated in the sale transaction, when according to him, it is PW2 S R Chandak was responsible for the negotiations, in all fairness, it was for the plaintiffs to have stated the same in the legal notice and in the plaint as to how the transaction was materialized in the absence of the main partner of the firm. He contends 17 that the suit is filed for enforcing a contract which is not in writing. Therefore, he contends that there is nothing on record to show that there is any privity of contract between the plaintiffs and the defendants 1 to 4 to alienate the suit schedule property and that it is not a concluded contract to enforce specific performance.
17. According to the learned counsel for the respondents- defendants 1 to 4, the evidence of PW2 is also required to be discarded in full, because, M/s Bio-worth Private Ltd has issued a notice for recovery of Rs 2.25 lakh stating that the said amount was paid for transfer of suit schedule property in favour of M/s Bio-worth Private Ltd. This fact is also admitted by PWs 1 and 2. It is also admitted by PW1 that plaintiffs, PW2 and defendants 2 and 3 intended to merge the first defendant-firm with M/s Bio-worth Private Ltd. It has also come in the evidence that prior to ExP2 and 3, it was agreed between the partners of second plaintiff firm and PW2 that the property has to be 18 transferred in the name of M/s Bio-worth Private Ltd. If it is so, when the said agreement which was binding on first plaintiff, defendants 2 and 3 and also PW2, there could not be a further agreement between the first plaintiff and defendants 1 to 4 to sell or transfer suit schedule property in favour of first plaintiff. It is not the case of the plaintiff, either in the legal notice got issued for the first time or in the plaint, that since the property could not merged with M/s Bio-worth Private Ltd, the parties agreed to sell the suit schedule property in favour of first plaintiff. According to him, there is glaring inconsistency between the pleadings and the evidence and based on such inconsistent pleadings and evidence, no court can grant a decree for an extraordinary relief of specific performance. He further submits that even according to the plaint averments, ExP2 and 3 are dated 27-11-1993 and 16-11-1994 respectively and for the first time, a notice was got issued vide ExP13 dated 15-1-1997 i.e. three years after coming into existence of ExP2 and 3. The defendants 1 to 4 have sent a reply 19 vide ExP17 dated 14-2-1997, even denying the privity of contract between the plaintiffs and the defendants 1 to 4.
18. Within a reasonable time, the plaintiffs have not approached the court. The suit was instituted to enforce the alleged agreement of sale based on ExP2 and 3 dated 27-11-1993 and 16-11-1994 on 13-11-1997. The very fact that the plaintiffs have slept over the matter for nearly four years and no steps were taken to file a suit for specific performance of the contract or demanding the defendants 1 to 4 to execute a sale deed would only show that all was not well in the instant case. If the court below has felt that the plaintiffs are not entitled for the relief, this court cannot lightly interfere with the said finding of the trial court, which is based on proper assessment of evidence.
19. Learned counsel for the respondents-defendants 1 to 4 further contends that first defendant is only a lessee under fifth defendant. It had no absolute right to alienate the suit schedule property or transfer the same either in 20 favour of first plaintiff or in favour of M/s Bio-worth Private Ltd. According to him, the plaintiffs have produced ExP5 dated 5-5-1994 to show that the first defendant had sought permission for change of constitution of first defendant-firm into a private limited company under the name and style of M/s Bio-worth Private Ltd, and the plaintiffs have also produced a copy of the reply sent by KIADB stating that under the law, the request of the first defendant cannot be conceded. When the first plaintiff, being a director of M/s Bio-worth Private Ltd was aware of the rejection of the permission sought by the first plaintiff to transfer the suit schedule property in favour of M/s Bio-worth Private Ltd, it is difficult for any court to accept that a man of produce would go to file a suit seeking specific relief when there is no agreement of sale executed by the defendants 1 to 3 in favour of first plaintiff.
20. The very conduct of first plaintiff in producing ExP4 would conclusively prove that what was agreed between 21 the parties is only to transfer the suit schedule property to M/s Bio-worth Private Ltd and not in favour of the first plaintiff. If the first plaintiff had paid amount under ExP2 and 3 and when he has produced ExP4, a communication addressed to KIADB by the first defendant on 5-5-1994, no person would pay a sum of Rs 5.00 lakh six months after the letter addressed by the first defendant. Therefore, the amount paid vide ExP2 and 3 has to be considered as payment towards transfer of the property to M/s Bio-worth Private Ltd and not in favour of first plaintiff.
21. He further contends that in view of the evidence of PW2 and PW1 it is evident that the first plaintiff was not present when the contract was entered into with the first defendant and its partners. Hence, the evidence of PW1 has to be discarded, as it is only a hearsay evidence. He further submits that at the best the plaintiffs can rely upon the evidence of PW2. According to him, the evidence of PW2 is also not of much assistance to the plaintiffs. 22 Hence, he submits that the trial court is justified in rejecting the prayer for specific performance.
22. Having heard the learned counsel for the the parties, what is to be considered by us in this appeal is:
i. Whether there is a privity of contract between the plaintiffs and the first defendant?
ii. Whether the first defendant has absolute right to alienate the suit schedule property?
iii. Whether the plaintiffs have approached the court within reasonable time, even if the privity of contract is established by the first plaintiff?
iv. Whether the judgment and decree of the trial court requires to be interfered with?
23. Since all the points are interlinked with one another, we would like to deal with all the points together as hereunder.
24. The undisputed facts in this appeal are that: The suit schedule property is an industrial plot allotted by the 23 fifth defendant-KIADB in favour of first defendant. The plaintiffs do not dispute that in order to get the first defendant merged with a private company floated by defendants 2 and 3 along with first plaintiff and PW2 S R Chandak. When the first plaintiff, being a director of M/s Bio-worth Private Ltd its directors agreed for merger of first defendant firm, we cannot understand what prompted the first plaintiff to claim that there was an agreement of sale in favour of plaintiffs in respect of suit schedule property? It has also come in the evidence that consensus arrived at amongst the directors of M/s Bio-worth Private Ltd was for merging the first defendant-firm with the former company, but much later to ExP2 and 3. When the said agreement was not cancelled and the same was in force, the first plaintiff, being a director of M/s Bio-worth Private Ltd, cannot contend that he has entered into an agreement to purchase the suit schedule property from first defendant. 24
25. Similarly, he could not have paid advance vide ExP2 and 3 and as rightly contended by the defendants, such a payment has to be treated as a payment made towards the transaction to be materialized on behalf of M/s Bio-worth Private Ltd. Admittedly, there is no written agreement between the plaintiffs and the defendants 1 to 4. According to plaint averments, it is the first plaintiff who agreed to purchased the suit schedule property. But, unfortunately, in his evidence, PW1 has stated that he was not present when the sale transaction was materialized. According to him, it was PW2 who materialized the contract. If really PW2 has materialized the contract on behalf of the plaintiffs, there must be documents to evidence the same. It is curious to note that either in the legal notice or in the plaint, the time stipulated for completion of the contract is not been mentioned. It is the only evidence to show that payment was made by the first plaintiff. In such circumstance, if the suit is filed based on ExP2 and 3 without there being a proper pleading in regard 25 to the manner in which the contract was to be concluded and in the absence of a contract between first plaintiff and PW2 on the one hand and the defendants 2 and 3 on the other, the plaintiffs cannot maintain the suit for specific performance.
26. Even if we consider that on account of relationship between the defendants 1 to 4 and PW2, there was an agreement between the parties to alienate the suit schedule property, the plaintiffs were required to approach the court within a reasonable time. In the instant case, four years after ExP2 the suit was filed to enforce the agreement. Whether non-filing of the suit within a reasonable time has been explained by the plaintiffs, either in their pleadings or in the evidence, has to be looked into. Unfortunately, no such averment is made by the plaintiffs. In the circumstances, it is useful for us to refer to the judgment of the Hon'ble Supreme Court in the case of K S VIDYANADAM vs VAIRAVAN [(1997) 3 SCC 1 - PARAs- 26 10, 11 & 14]. Relying upon the earlier decision rendered in CHAND RANI vs KAMAL RANI [(1993) 1 SCC 519], Supreme Court in VIDYANADAM 's case has held as under:
"...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 (evident?):
(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."
In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well- known that their prices have been going up sharply over the last few decades - particularly after 1973.
In the present case, the property is in the immediate outskirts of Bangalore City that too in an industrial area. As such, the price of the property in question was likely to increase year by year.
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27. In the instant case, the suit schedule property is an industrial plot situated in the outskirts of Bangalore city. The Hon'ble Supreme Court had occasion to consider whether time would be the essence of contract to sell an immovable property if such property is situated in an urban area [see decision in the case of SARADAMANI KANDAPPAN vs S RAJALAKSHMI [AIR 2011 SC 3234]. The Hon'ble Apex Court held as under:
24. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market value of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that grant of specific performance would not prejudice the vendor-defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was 28 comparatively very little inflation, in India.
The third quarter of the twentieth century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.
25. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-
performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and `non-
readiness'. The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, 29 may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for Rs. One lakh and received Rs. Ten Thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining Rs. Ninety Thousand, when the property value has risen to a crore of rupees.
28. Even if we consider ExP2 and 3 as agreement of sale, the plaintiffs have not approached the court within a reasonable time. Hence, they are not entitled for a decree of specific performance. We are of the view that in the first instance, the plaintiffs have to prove the privity of contract between first plaintiff and the defendants 1 to 4. Based on 30 the proper appreciation of evidence, the trial court has rightly come to the conclusion that what was agreed between the first plaintiff and the first defendant is to transfer and merge the first defendant's property with M/s Bio-worth Private Ltd. Therefore, we are of the view that the plaintiffs are not entitled for a decree for specific performance. Thus, viewed from any angle, we do not find any merit in this appeal and accordingly we answer all the points raised by us in this appeal against the appellants- plaintiffs and in favour of defendants-respondents.
29. In the result, the appeal is dismissed. Parties to bear their own costs.
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JUDGE Sd/-
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