1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR :JUDGMENT: [CASE NUMBER] [ENTITY] Vs. [ENTITY] Date of Judgment 03rd February, 2014 PRESENT HON'BLE MR. JUSTICE [ENTITY] Mr. [ENTITY], for the appellant. Mr. [ENTITY], for the respondent. BY THE COURT:
This appeal is directed against judgment and decree dated 17.03.1986 passed by Additional District Judge, Bali, whereby, the suit for specific performance filed by the respondent-plaintiff has been decreed and it has been directed that plaintiff would pay or deposit the balance consideration of Rs.26,000/- within a period of two months, where after, the defendant would execute the sale deed in favour of the plaintiff and hand over the possession of the land.
When this appeal came up for admission, the same was admitted on 12.05.1986 and it was ordered that the execution of decree shall remain stayed. The interim order was confirmed on 25.08.1987 directing as under:-
"Heard on the stay application.
It is ordered that the amount of Rs.26,000/- which had been deposited by the plaintiff-respondent in the Court of Additional District Judge, Bali shall be deposited by that Court in fixed deposit for a term of three years.
The operation of the decree of the trial court is stayed till the decision of [CASE NUMBER]."
The facts in brief may be noticed thus: the plaintiff [ENTITY] filed a suit for specific performance on 17.09.1980 with the averments that the defendant [ENTITY] agreed to sale his land situated in village Jadri, Tehsil Bali to him and execute an agreement dated 03.07.1980 in his favour; his brother and agent had entered into negotiations with the defendant, which culminated into suit agreement and Rs.1,000/- were paid to defendant and it was agreed to pay the balance consideration of Rs.26,000/- on 15.08.1980 at the time of registration; in case the plaintiff failed to pay the balance amount by 15.08.1980, the advance payment of Rs.1,000/- would stand forfeited and the defendant would not be bound by the agreement; the plaintiff went to the house of the defendant and to his shop on 14.08.1980 with the requisite amount, but the son of the defendant informed that the defendant had gone to Pali; the defendant met one [ENTITY] at Falna on 16.08.1980 and they came to Bali and their Advocate Shri [ENTITY] demanded the passbook and previous sale deed, but the defendant told that he would bring the document in a day or two; as the defendant did not turn up for two days, [ENTITY], one [ENTITY] and [ENTITY], Advocate went to the house of defendant with the balance consideration, who was not found and, therefore, they went to Bali where the defendant met them; the defendant refused to get the deed registered and, therefore, a notice dated 20.08.1980 was sent to the defendant, to which, a false reply was given and, therefore, the suit was being filed seeking specific performance and it was prayed that decree for specific performance be passed directing the defendant to execute the sale deed and get it registered in plaintiff's favour; it was claimed that plaintiff was ready and willing to perform his part of the contract.
The defendant contested the suit by filing written statement; it was, inter alia, submitted that plaintiff failed to perform contract at the stipulated time i.e. by 15.08.1980; it was denied that plaintniff's brother [ENTITY] and [ENTITY] came to his house on 14.08.1980 with balance consideration of Rs.26,000/-; he was ready and willing to execute the deed and get it registered as per the agreement on 15.08.1980; as on 15.08.1980 there was a public holiday, he came to Bali on 16.08.1980 and plaintiff's brother [ENTITY] also came there; when he demanded Rs.26,000/- as per the agreement, the plaintiff tried to avoid the contract and, therefore, the registration of the deed could not take place though he was present in the Court till 05:00 PM; the averments relating to production of passbook and previous sale deed within a day or two were denied; on the other hand, it was claimed that it was made clear to the plaintiff's brother [ENTITY] at the time of agreement that the previous sale deed had been lost and the plaintiff's brother and his advocate had already seen the Khatoni and settlement [ENTITY], the fact about carrying the balance consideration of Rs.26,000/- was denied; it was claimed that as the time stipulated in the agreement had expired, he was no longer bound by the contract and was prepared to return the amount of Rs.1,000/-. Ultimately, it was prayed that the suit be dismissed.
The trial court framed four issues:
(i) Whether the plaintiff has been ready and willing to purchase the suit land as per the conditions of agreement dated 03.07.1980 and he has not violated the agreement?
(ii) Whether after 16.08.1980 the defendant was not bound to execute the sale deed and deliver possession in terms of the agreement?
(iii) Whether defendant was entitled to special cost of Rs.3,000/-? (iv) Relief.
The plaintiff produced five witnesses including himself and defendant got examined in all two witnesses including himself and certain documents were also produced.
After recording the evidence of the parties and hearing arguments, the Additional District Judge, Bali came to the conclusion that it was proved that the plaintiff was always ready and willing to purchase the suit land in terms of the agreement and he has not violated the agreement; the defendant has failed to prove that after 16.08.1980 he was not bound to execute the sale deed; the defendant was not entitled to special costs and the suit was liable to be decreed and passed the directions as noted hereinbefore.
It was submitted by learned counsel for the appellant that the trial court fell in error in decreeing the suit filed by the plaintiff as it is apparent from record that the plaintiff was not ready and willing to perform his part of the contract; from the statement of witnesses, more particularly, that of PW-5 [ENTITY], Advocate it is apparent that the plaintiff tried to introduce certain terms, which were not agreed between the parties, which clearly shows that the plaintiff was not ready and willing to perform his part of the contract. It was emphasized that nowhere in the agreement it was stipulated that the defendant would produce the passbook and the previous sale deed and the insistence on behalf of the plaintiff for the said documents and his admitted absence on 16.08.1980 is a clear indication of absence of readiness and willingness to perform his part of the contract. It was further submitted that a bare look at the agreement would reveal that the plaintiff was required to make payment of the balance consideration by 15.08.1980 and the conduct of the plaintiff clearly shows that no efforts were made to do the same and, therefore, the terms of the agreement were violated by the plaintiff and, consequently, he was not entitled to grant of decree for specific performance, which is essentially a relief in equity.
Per contra, learned counsel for the respondent submitted that the judgment passed by the trial court does not call for any interference; it is apparent from the evidence led by the parties that the plaintiff was always ready and willing to perform his part of the contract and the very fact that notice Exhibit-2 was given on 20.08.1980 itself clearly indicates he was ready and willing to perform his part of the contract; it is proved on record that plaintiff had approached the defendant on 16.08.1980 and thereafter, however the sale deed was not executed; from the tenor and conduct of the parties, it cannot be said that time was essence of the contract.
Reliance was placed on judgments in [ENTITY] v. Appasaheb Dattatraya Pawar : AIR 2008 SC 1205 and [PRECEDENT] [ENTITY] v. Aravacode Chakungal Jayapalan : AIR 2000 Bombay 410 in support of the contentions.
I have considered the rival submissions.
The issues which arise for determination in this appeal is whether the plaintiff can be said to be ready and willing to perform his part of the contract and whether the time was essence of the contract.
It would be appropriate to notice the relevant part of the agreement dated 03.08.1980, which reads thus:-
" 27,000) $% 1000) 00 , 26,000) 15-8-80 3 3 , 4, % $ 4 % $ 15-8-80 % , % $% 3 4 8 4 , , , , % "
From the above it is apparent that the defendant had claimed that he was tenant of the land and the same had been purchased by him; the total consideration was Rs.27,000/-; Rs.1,000/- was received as advance; the balance consideration of Rs.26,000/- would be paid by 15.08.1980 and the defendant would execute sale deed in his favour in the office of Sub-Registrar, Bali and he would hand over the possession at that time; if the balance of consideration was not paid by 15.08.1980, defendant would not be bound to sell the land to the plaintiff and the advance amount shall be forfeited.
As noticed hereinbefore the plaintiff had claimed in the plaint that the plaintiff's brother had approached the defendant on 14.08.1980 but he was not available at his residence; 15.08.1980 was a public holiday; on 16.08.1980 plaintiff's brother met defendant at Falna, when both of them went to the counsel [ENTITY] at Pali; the counsel demanded original passbook and the previous sale deed, when defendant assured to bring it within a day or two; after two days when the plaintiff met the defendant, he refused to execute the sale deed; on 20.08.1980 notice was got issued to the plaintiff, to which, a reply dated 25.08.1980 was received and the suit was filed on 17.09.1980.
The real bone of contention between the parties is that when on 16.08.1980 the plaintiff's brother and defendant met at Advocate [ENTITY]'s place/office for the purpose of execution of sale deed, the plaintiff's brother demanded original passbook and the previous sale deed, while the version of the plaintiff is that the defendant stated that he would produce the same within two days, the defendant stated that the agreement did not envisage production of the said documents and the said documents were demanded only with a view to violate the terms of the agreement, wherein, the plaintiff was required to pay the balance consideration of Rs.26,000/- by 15.08.1980.
A scanning of the evidence led by the parties reveals that PW-1 [ENTITY] plaintiff stated that he was not present when the agreement was entered into and as to the terms he had no personal knowledge. The notice dated 20.08.1980 from the Advocate was got issued by his brother and that he did not know [ENTITY].
PW-2 [ENTITY] stated that the agreement was executed in his presence and he was one of the witness to the said agreement. On 14.08.1980 he alongwith plaintiff's brother [ENTITY] went to defendant's village where he was not present. In cross-examination, the said witness admitted that it was agreed between the parties that if by 15.08.1980, the balance consideration was not paid, then agreement shall stand cancelled; on 16.08.1980 the sale deed could not be registered because the defendant had not brought complete papers and, thereafter the defendant refused to execute the sale deed. However, on further cross-examination, he stated that he had not visited Bali on 16.08.1980, which fact clearly indicates that his statement about as to what transpired on 16.08.1980 is not based on his personal knowledge.
PW-3 [ENTITY], inter alia, stated that he was not present when the agreement was executed. The plaintiff had demanded original documents on 16.08.1980 when defendant stated that he has [ENTITY] only and does not have other documents, while other documents were required and the defendant stated that he will bring the other documents. Stamps were not purchased for execution of sale deed.
PW-4 [ENTITY] is the person, who had in fact negotiated the agreement on behalf of his brother - plaintiff and was involved in the so called attempts to get the sale deed executed. The said witness stated that on 16.08.1980 [ENTITY] defendant had brought one [ENTITY] only and he (PW-4) stated that the previous sale deed and other documents were necessary otherwise sale deed cannot be executed. When [ENTITY] stated that he does not have the documents and he would bring the same after two days and get it registered; [ENTITY], Advocate said that bring the documents. On 18.08.1980 [ENTITY] refused to execute the sale deed. In cross-examination the said witness stated that at the time of execution of agreement, he was not fully satisfied about the land as even at that time there was only a settlement [ENTITY] and [ENTITY] had said that he would bring the papers after registration. He further stated that on 16.08.1980 [ENTITY] was going to Bali for registration purpose and was ready to register the document. The documents were not complete and [ENTITY] refused to execute the sale deed on 18.08.1980 stating that he does not want to sell the land. The significant part of the cross-examination, which has implication reads thus:-
" ?% $% :- %,% % @ ? % :- % , % "
The most significant witness is PW-5 [ENTITY], Advocate, who prepared the agreement (Exhibit-1) and before whom the entire episode of 16.08.1980 is said to have happened. The said witness stated that Exhibit-1 agreement was drafted by him; when the document was executed the defendant had brought settlement [ENTITY]; he had not brought Jamabandi and passbook; there was no previous sale deed. When they came for getting the document registered, again settlement [ENTITY] was brought and the previous sale deed, passbook and Jamabandi were not brought. In cross-examination, he admitted that it was agreed that sale deed would be executed based on the documents brought by him. On 16.08.1980 the defendant had gone to him and stated that he was ready to get the sale deed registered and was sitting in the Court till 05:00 PM; on the said date [ENTITY] had also come. The expenses of registration and stamps were to be borne by [ENTITY]; [ENTITY] did not tell him to purchase stamps; [ENTITY] never refused to execute the sale deed. It is indicated in the agreement that if the consideration is not paid by 15.08.1980 the seller would not be bound to sell the land. [ENTITY] never told him that he was ready to execute the sale deed. [ENTITY] plaintiff never met him.
DW-1 defendant [ENTITY] stated that till 15.08.1980 [ENTITY] never visited him, on 14.08.1980 also [ENTITY] did not meet him; on 16.08.1980 he had reached Bali to meet Advocate [ENTITY] at 10:00 AM. [ENTITY] was not ready for execution of sale deed and insisted on production of the previous sale deed; on 03.07.1980 he had specifically told [ENTITY] that the old sale deed has been lost and it was agreed to register the document based on settlement [ENTITY]. In cross- examination he stated that the previous sale deed was already lost when the agreement was executed. He denied that he had told [ENTITY] that as he has not brought the papers, he will bring the papers and get the sale deed executed. He also indicated in the cross-examination that as he required money he has sold the land to other person and, therefore, there was no question of selling the same to [ENTITY].
DW-2 [ENTITY], who is clerk of the Advocate [ENTITY] and one of the witnesses to the agreement stated that [ENTITY] had brought settlement [ENTITY] and the agreement was executed based on the said document; on 16.08.1980 [ENTITY] had come and he was prepared to get the document registered and stated that payment be made to him; he was prepared to execute the sale deed, however, [ENTITY] was dragging his feet, he did not see any money with [ENTITY].
From the above statements it is apparent that the agreement to sale was executed based on the settlement [ENTITY] and on 16.08.1980 when the defendant and plaintiff's brother met in the presence of Advocate [ENTITY], [ENTITY] insisted for other documents, which documents apparently were not available with [ENTITY]. However, the Advocate PW-5 [ENTITY], who is plaintiff's witness clearly admitted that the sale deed was to be executed based on the documents brought by the defendant i.e. the settlement [ENTITY] and defendant [ENTITY] was available in Court till 05:00 PM and [ENTITY] did not tell the Advocate to purchase stamps for execution of sale deed. [ENTITY] never refused to execute the sale deed. The insistence of the plaintiff regarding the 'other documents' is also apparent from the averments in the plaint and statement of [ENTITY], a portion whereof has been quoted hereinbefore, wherein, he has specifically stated that even on the date of his statement he was not prepared to purchase the land without the documents sought by him. The demand of the documents is also fortified from the notice dated 20.08.1980 (Exhibit-2), wherein, it was indicated that the Advocate [ENTITY] demanded the documents, which were not produced by the defendant.
From the statement of the parties, it is quite significant that the agreement was executed based on the settlement [ENTITY] and there is no mention of production of documents at the time of registration of sale deed in the agreement (Exhibit-
1). The readiness and willingness of parties has to be judged based on the terms of the agreement and not as to what necessarily follows in practise.
The statements of the parties and the facts and circumstances discussed above clearly indicate that the plaintiff and/or his brother [ENTITY] (PW-4) wanted to introduce certain terms, which were not agreed between the parties and was/were not ready to complete the transaction in true spirit of the terms agreed between the parties.
The requirement of readiness and willingness has been dealt with by Hon'ble Supreme Court in [PRECEDENT], wherein, it was observed and held as under:-
"Readiness and Willingness
8. [SECTION] of the [ACT] provides for personal bars to relief. This provision states that specific performance of a contract cannot be enforced in favour of a person,
a) who would not be entitled to recover compensation for its breach; or
b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
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), - (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. 8.1 Among the three sub-sections, we are more concerned about sub-section (c). "Readiness and willingness" is enshrined in clause (c) which was not present in the old Act of 1877. However, it was later inserted with the recommendations of the 9th Law Commission's report. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract which are to be performed by him.
9. The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contact. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.
10. In [PRECEDENT]. [[PRECEDENT]] at para 5, this Court held:
" [SECTION] of the Act envisages that plaintiff must plead and prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his 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. The court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract."
11. In [PRECEDENT] paras 19 and 21, this Court observed:
"It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstance of each case. No strait-jacket formula can be laid down in this behalf The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale."
12. [SECTION] of the [ACT] mandates "readiness and willingness" on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous "readiness and willingness" to perform the contract on his part from the date of the contract. The onus is on the plaintiff. It has been rightly considered by this Court in [PRECEDENT] that "readiness and willingness" cannot be treated as a straight jacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with [SECTION] of the [ACT] and when there is non-compliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. "Readiness and willingness" to perform the part of the contract has to be determined ascertained from the conduct of the parties."
It is also significant to notice that despite introducing condition, which was not agreed between the parties on 16.08.1980 neither the plaintiff himself was present nor PW-4 [ENTITY] had even instructed his Advocate [ENTITY] to purchase the stamps for execution of sale deed, which two aspects are necessary ingredients for the purpose of execution of sale deed. The fact that plaintiff got issued notice on 20.08.1980, which was immediately replied by the defendant on 25.08.1980 (Exhibit-4) specifically denying the contents of the notice cannot be taken as a singular fact to show his readiness and willingness in view of statement of [ENTITY] insisting for documents, which were not in power and possession of the defendant and, regarding which, there was no agreement as PW- 5 [ENTITY] has specifically admitted in the cross-examination that the sale deed was to be executed based on the settlement [ENTITY], which was available on 16.08.1980.
In view of the above, it cannot be said that the plaintiff was ready and willing to perform his part of the contract. The finding of the trial court that it was agreed between the parties on 16.08.1980 that the documents would be produced within 2-3 days and on the said date the sale deed would be executed and as it cannot be said that [ENTITY] was not ready with the money, he was not ready and willing to perform his part of the contract. The said finding recorded by the trial court is wholly in ignorance of the categorical statement in cross-examination by PW-5, who of all the witnesses is the most independent witness being an Advocate, produced by the plaintiff and being a privy to the terms of agreement, having himself got the document (Exhibit-1) drafted. The further basis of the trial court on account of so called availability of balance consideration with [ENTITY] is not sufficient for coming to the conclusion that he was ready and willing to perform his part of the contract as it has been found that the demand of 'other documents' was introduction of a term, which was not agreed between the parties and was clear reflection of fact that the plaintiff/[ENTITY] was not ready to complete the transaction in true spirit of the terms agreed between the parties and, therefore, the finding recorded by the trial court on issue No.1 being perverse is set aside.
So far as the fact as to whether the time was essence of the contract or not, the Constitution Bench of Hon'ble Supreme Court in [PRECEDENT] laid down as under:-
"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."
However, in the facts of the case, the Hon'ble Supreme Court came to the conclusion that if the purchaser was not willing to make payment of amount within specified time without fulfillment of some conditions, which was contrary to agreement, the purchaser was not entitled to specific performance of contract. The said judgment has been followed in the case of [ENTITY] (supra) and [PRECEDENT] [ENTITY] (supra) cited by learned counsel for the respondent.
In the present case, though 15.08.1980 was indicated as the date by which the payment was required to be made by the plaintiff, the fact that a meeting took place on 16.08.1980 and the notice was sent on 20.08.1980 by the plaintiff shows that, even if, the time was essence of the contract, it cannot be said that in the present case there is any reason to come to a conclusion that as the consideration was not paid by 15.08.1980 the agreement came to an end, therefore, the finding on issue No.2 recorded by the trial court does not call for any interference.
In view of the above discussion, the judgment and decree passed by the trial court cannot be sustained and the same is, therefore, reversed and set aside. The suit filed by the plaintiff for specific performance of agreement dated 03.07.1980 is dismissed. As the plaintiff has not made any prayer for refund of deposit of Rs.1,000/- in the plaint, in view of the bar created by [SECTION] of the [ACT] the said relief cannot be granted to the plaintiff. The amount, if any, deposited by the plaintiff as noticed in order dated 25.08.1987 (supra) and placed in fixed deposit by the trial court shall be refunded back to the plaintiff alongwith the interest earned on the said fixed deposit within a period of three weeks.
The appeal is allowed in the above terms. No costs.
([ENTITY]), J.
[ENTITY]