1 FA 330/2010 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.330 OF 2010 1. Ashok Ramkrishna Adke, Age 50 years, Indian Inhabitant, 2. Arun Ramkrishna Adke, Agte 60 years, Indian Inhabitant, 3. Ramesh Ramkrishna Adke, Age 57 years, Indian Inhabitant, 4. Shreedhar Ramkrishna Adke, Age 52 years, Indian Inhabitant, 5. Bhalchandra Ramkrishna Adke Age 50 years, Indian Inhabitant, All agriculturists, residing at Adke Niwas Lam Road, Deolali Camp, Taluka & District Nashik .. Appellants V/s 1.Miss Kiran Pratapsingh Sampat, Age 58 years, Occupation Advocate, 2. Mrs.Nandini Jitendra Shah, Age 58 years, Occupation Housewife, Both residing at Pujari Apartments, 6th Floor, Opp.S.T.Road, Deonar, Mumbai- 88. .. Respondents 2 FA 330/2010 Mr.S.A.Sawant for the Appellants. Mr.J.V.Parmar for Respondent Nos.1 & 2. CORAM: R.G.KETKAR, J. DATE: 24th September, 2010. JUDGMENT: 1. This appeal is preferred by the original plaintiffs challenging the judgment and decree dated 23rd August, 2009 passed by the learned 4th Joint Civil Judge, Senior Division, Nashik in Special Civil Suit No.5 of 2007. By that judgment, learned trial Judge dismissed the suit instituted by the plaintiffs for specific performance of agreement of sale dated 1st June, 1995 and in the alternative for refund of earnest money and compensation of Rs.2,39,400/-. The parties shall hereinafter be referred as per their original status in the trial Court. The facts and circumstances giving rise to the filing of the present first appeal, briefly stated, are as under. 2. It is the case of the plaintiffs that under the registered Sale Deed dated 17th December, 1971, one Mr.Nagindas Jaychand Bhandari, sold an area of southern side admeasuring about 28.5 R out of Survey No.30/2A of village Belatgavan to one Mr.Khandu Savliram Kute. Under the registered sale deed dated 18th April, 1972 said Bhandari sold remaining area of northern side admeasuring about 28.5 R out of Survey No. 30/2A to one Mr.Shivram Savliram Kute. Mr.Shivram 3 FA 330/2010 Savliram Kute sold area of norther side admeasuring 28.5R from Survey No.30/2A presently numbered as Survey No. 30/1+2+3/2 to Defendant No.1 Ms.Kiran Pratapsingh Sampat under the registered sale deed dated 22nd April, 1988. Mr.Khandu Savliram Kute sold area of southern side admeasuring 28.5R out of Survey No.30/2A presently numbered as Survey No.30/1+2+3/2 to Defendant No.1 Ms.Kiran Pratapsingh Sampat and Defendant No.2 Nandini J.Shah. It is the case of the plaintiffs that Defendants agreed to sell to the plaintiffs an area of southern side admeasuring 28.5 R acquired by them from Mr.Khandu Savliram Kute, under the agreement of sale dated 1st June, 1995 (Exh.49) hereinafter referred as suit land. To the said agreement, Carlonie Ferrao was the consenting party. The prominent terms and conditions of the agreement were to the following effect:- (a) Total consideration agreed between the parties was Rs. 3,59,100/-. Plaintiffs paid Rs.1,19,700/- towards the part payment on the date of execution of agreement of sale, (b) Rs.1,19,700/- was to be paid within three months from the date of agreement (1.9.1995), (c) Rs.1,19,700/- was to be paid within six months from the date of agreement (1.12.1995) 3. Apart from other terms, No Objection Certificate from Balaji Sansthan was necessary. However, till date, the defendants did not take any steps despite the plaintiffs issuing repeated 4 FA 330/2010 reminders. 4. It is the case of the plaintiffs that the Defendants issued notice on 7th April, 2006 (Exh.50) to the plaintiffs setting out therein that the plaintiffs have not paid balance consideration of Rs. 2,39,400/-. As per the terms of agreement, first instalment of Rs.1,19,700/- was to be paid on or before 1st September, 1995 and the last instalment of Rs.1,19,700/- was to be paid on or before 1st December, 1995. As per clause 3 of the agreement of sale, time was essence of contract for payment of balance consideration. Since the plaintiffs did not pay the balance consideration of Rs.2,39,400/- till the date of issue of notice, they failed to perform their part of contract, and accordingly, by the said notice defendants terminated the agreement of sale. Defendants also revoked general power of attorney executed by them in favour of Plaintiff No.1 on 8th August, 1995. The said notice was received by the plaintiffs on 13th April, 2006. 5. Plaintiffs issued notice and the notice reply on 28th July, 2006 (Exh.52) acknowledging the receipt of notice dated 7th April, 2006 issued on behalf of the Defendants. It was interalia set out therein that the defendants were to obtain NOC from the Balaji Sansthan apart from other permissions, and despite repeated reminders from the plaintiffs, defendants did not take any steps for obtaining NOC and other permissions. It was the responsibility of the vendors (defendants) to obtain NOC at their own costs. It was further set out that the Plaintiffs were 5 FA 330/2010 and are still ready and willing to complete the sale deed by paying the remaining consideration. Plaintiffs further came out with the case that one Mr.Malunjkar had encroached upon the property and inspite of their repeated requests for removal of encroachment, the defendants did not take any steps. Plaintiffs called upon defendants to obtain permission and NOC as also settle the dispute and litigation within 15 days from the receipt thereof, failing which they will initiate legal action as may be advised. Since there was no compliance, the plaintiffs instituted present suit being the Special Civil Suit No.5 of 2007 in the Court of Civil Judge, Senior Division, Nashik. 6. After service of the suit summons, defendants filed written statement Exh.20 and resisted the suit. All the adverse allegations made against them were denied. Defendants came out with the case that they had never agreed to sell property in question to plaintiffs. They have also not received any consideration from plaintiffs. Since plaintiff No.1 and Defendant No.1 are Advocates, they were knowing each other since long. Since the property in question was subject matter of revenue litigation, Defendant No.1 had appointed Plaintiff No.1 as their Advocate and also had given general power of attorney in favour of Plaintiff No.1 for contesting the said litigation. Plaintiffs got executed some documents illegally and taking undue advantage of the general power of attorney, 6 FA 330/2010 instituted present suit against them on the basis of false documents. Defendants further contended that the suit was clearly time barred and therefore prayed for dismissal of suit. 7. On the basis of rival contentions of the parties, learned Trial Judge framed necessary issues at Exh.22. Plaintiffs filed affidavit in lieu of examination in chief of PW1-Plaintiff No.4 Shridhar at Exh.35. Plaintiffs also filed affidavit of PW2- Plaintiff No.1 Ashok R.Adke, in lieu of examination in chief at Exh.68 and of PW3 Madan Ramchandra Bundele at Exh.70. On the basis of material on record, learned trial Judge dismissed suit, against which, plaintiffs have preferred this appeal. 8. In support of this appeal, I have heard Mr.Sanjiv Sawant, learned counsel for the Appellants and Mr.J.V.Parmar, learned counsel for Respondents at length. Learned counsel for the appellants-plaintiffs has filed compilation of all the relevant documents on record. In view of this, I deem it appropriate to dispense with calling for Record and Proceedings as per Order 41 Rule 11 (1) of the Code of Civil Procedure 1908. 9. Mr.Sanjiv Sawant submitted that as per the terms and conditions of agreement of sale defendants were to obtain NOC as also other permissions. Despite issuing several reminders to defendants to do the needful in that behalf, defendants did not obtain NOC from Balaji Sansthan as also other permissions. He further submitted that there was 7 FA 330/2010 encroachment over the suit land and defendants did not remove the encroachment. He further contended that the learned trial Judge wrongly recorded finding that the time was essence of contract. Having regard to the fact that the transaction is in respect of immovable property, and having regard to the judgments of the Apex Court, time is never considered as essence of contract in respect of immovable property. Plaintiffs were and even today are ready and willing to pay the balance consideration of Rs.2,39,400/-. He therefore submitted that the learned trial Judge committed grave error in not properly appreciating pleadings as also evidence adduced by the parties which has resulted into miscarriage of justice. Not only the learned trial Judge rejected the prayer of the plaintiffs for specific performance of the contract, learned trial Judge also rejected prayer for refund of earnest money of Rs.1,19,700/- which was admittedly paid by the plaintiffs to Defendants on the date of execution of agreement of sale on 1st June, 1995. Learned trial Judge committed error in holding that since PW1 admitted in the cross-examination that in the year 1996 defendants refused to execute the sale deed, present suit instituted in the year 2007 was time barred in view of Article 54 of the Indian Limitation Act, 1963 (for short the Act). Even on that ground, learned trial Judge refused the relief of refund of earnest money as also damages. On the other hand, Mr.Parmar supported the 8 FA 330/2010 impugned judgment and decree. He submitted that agreement of sale was executed on 1st June, 1995. On that date, plaintiffs paid Rs.1,19,700/-. As per the terms and conditions of agreement of sale, plaintiffs were required to pay amount of Rs.1,19,700/- within three months i.e.to say on or before 1st September, 1995 and the balance amount of Rs.1,19,700/- within six months from the date of agreement i.e.to say on or before 1st December, 1995. As per clause (3) of the agreement, time was made essence of contract for payment of balance consideration and on payment of full consideration, defendants were to execute the conveyance and hand over vacant possession as per clause 4 of the said agreement. He submitted that the plaintiffs thereafter did not do any overt act. Even they did not issue any notice calling upon defendants to obtain any NOC or permissions that were necessary according to the plaintiffs for completing the transaction. It was the defendants who issued notice on 7th April, 2006 terminating the contract. Said notice was received by plaintiffs on 13th April, 2006 and thereafter plaintiffs issued notice & notice reply on 28th July, 2006. In that, plaintiffs for the first time came out with the case of obtaining NOC of Balaji Sansthan. Suit was instituted in the year 2007. He further submitted that PW1-Shridhar clearly admitted in cross examination that defendants refused to execute the sale deed in the year 1996. Having regard to Art.54 of the Act, plaintiffs 9 FA 330/2010 ought to have instituted suit for specific performance within a period of three years from the date of refusal. However, present suit was instituted in the year 2007. It was therefore clearly time barred. Even assuming that the time was essence of contract, the agreement of sale was executed on 1st June, 1995 and considering the conduct of the plaintiffs it cannot be said that the plaintiffs were all along ready and willing to perform their part of the contract by paying the balance consideration. 10.In view of rival contentions of the parties, following points arise for my consideration, and I have recorded my findings as under:- (1) Whether plaintiffs were and are still ready and willing to perform their part of the contract? Answer:- Negative. (2) Whether suit instituted by plaintiffs is within limitation? Answer:- Negative. Whether plaintiffs are entitled to relief of specific performance of contract as sought? Answer:- Negative. 11.Since all points are interlinked, I propose to discuss them together. Though in the trial Court, defendants came out with the case that they did not execute the agreement of sale in favour of plaintiffs, learned trial Judge, after considering the material on record held that plaintiffs established that the 10 FA 330/2010 defendants agreed to sell 28.5R land to plaintiffs for consideration of Rs.3,59,100/- on 1st June, 1995. Learned trial Judge also held that plaintiffs established that they have paid Rs.1,19,700/- towards part payment to defendants. These two findings were not seriously challenged by learned Counsel Mr.Parmar during the course of arguments. The controversy therefore centers around whether plaintiffs were & are still ready and willing to perform their part of contract and whether suit instituted by them is within limitation? 12.Perusal of preamble of agreement of sale dated 1st June, 1995 indicates that the vendors agreed to sell the suit land on “as is where is” basis free from all encumbrances, if any, created therein by vendors (defendants herein), for net price of Rs. 3,59,100/- . Out of total consideration, an amount of Rs. 1,19,700/- was to be paid on or before signing of said agreement by way of earnest money. An amount of Rs. 1,19,700/- was to be paid within three months from the date of execution of agreement of sale, and the balance amount of Rs. 1,19,700/- was to be paid within six months from the date of agreement. Perusal of the notice and notice reply dated 28th July, 2006 as also plaint indicates that plaintiffs did not come with the case that they had paid anything over and above Rs. 1,19,700/- . Thus, balance consideration that was to be paid by plaintiffs was Rs.2,39,400/- . As per clause 3 of the agreement of sale, time was made essence of contract for payment of 11 FA 330/2010 balance purchase price. Clause 4 thereof provided that on payment of entire consideration, defendants will execute conveyance in favour of plaintiffs and hand over vacant possession of the suit land. Clause 5 thereof provided that the vendors shall at their costs comply for and obtain all permissions necessary for completing the same. Now it is relevant to note that plaintiff No.1 as also defendant No.1 are advocates. However clause 5 did not specifically set out permissions which were necessary for completing the sale. Even agreement of sale is totally silent in respect of obtaining NOC from the Balaji Sansthan. It is only on 28th July, 2006 when plaintiffs issued notice & notice reply, it was asserted for the first time that defendants failed to obtain NOC from the Balaji Sansthan. 13.Plaintiffs have also not brought anything on record to indicate as to what steps they took after execution of agreement of sale dated 1st June, 1995. Plaintiffs have not brought on record any documents to substantiate their claim that they called upon defendants to obtain permissions necessary for completing sale as contemplated in clause 5 of the agreement of sale. Plaintiffs have not also brought on record any material to substantiate their contention that before completing sale, NOC from the Balaji Sansthan was necessary for completing the sale. They have also not made clear as to which permissions are necessary for completing the sale. Even by subsequent notice 12 FA 330/2010 plaintiffs did not specify as to which permissions were necessary for completing the sale and also did not call upon defendants to obtain those permissions. In short, after execution of agreement of sale on 1st June, 1995, plaintiffs paid Rs.1,19,700/- and thereafter they did nothing. Plaintiffs did not do any overt act to show their readiness and willingness to perform their part of the contract. It is also not the case of plaintiffs that despite payment of balance consideration to defendants, they failed and neglected to execute the sale deed. In fact, plaintiffs have not produced any material on record to substantiate that they were ready and willing to pay balance consideration and for that purpose they approached defendants requesting them to complete the transaction by accepting the remaining consideration. 14.During the course of cross-examination, PW1-Shridhar admitted that in the year 1996 defendants refused to execute the sale deed. He further admitted that after 1996, plaintiffs did not take any steps, save and except, instituting the present suit. He also admitted that plaintiffs never issued any public notice for verifying the ownership of defendants over the suit land. He also admitted that Mr.Malunjkar encroached on the northern side and said encroachment is not over the suit land. As indicated earlier, suit land is the area of southern side admeasuring 28.5R out of Survey No.30/2A presently numbered as Survey No.30/1+2+3/2. Thus, the case made out 13 FA 330/2010 by plaintiffs in the notice and notice reply dated 28th July, 2006 as also in the plaint about obtaining of NOC from Balaji Sansthan, as also failure of defendants in removing encroachment made by Mr.Malunjkar, is not at all established. It is also significant to note that the preamble of agreement of sale recited that the vendors agreed to sell suit land on “as is where is’ basis to the plaintiffs. 15.Having regard to the testimony of PW1-Shridhar it is evident that defendants refused to execute the sale deed in the year 1996 and present suit is instituted in the year 2007. Having regard to Article 54 of the Act, plaintiffs ought to have instituted suit for specific performance within three years from the date of refusal. Iin view of this, suit instituted by plaintiffs was clearly time barred. I do not find that learned trial Judge committed any error in holding that suit was time barred. As indicated earlier, plaintiffs have paid Rs.1,19,700/- on the date of agreement of sale on 1st June, 1995 and thereafter did not take any steps. This fact was also admitted by PW1-Shridhar in cross-examination. It is also not the case of plaintiffs that they had paid balance consideration of Rs.2,39,400/-, and therefore nothing remained to be performed by them. In this view of the matter, I am clearly of the opinion that plaintiffs were not ready & willing and are not ready & willing to perform their part of contract. Plaintiffs ought to be ready & willing all along to perform their part of contract. In the instant 14 FA 330/2010 case, plaintiffs have miserably failed to establish their continuous readiness and willingness. In my view, learned trial Judge, was perfectly justified in holding that plaintiffs were and are not ready & willing to perform their part of the contract. In view of this, I am clearly of the opinion that plaintiffs are not entitled to the reliefs of specific performance of contract. Mr.Sawant strongly relied upon judgment of the Apex Court in the case of Chand Rani V/s.Kamal Rani, AIR 1993 SC 1742 to contend that in case of sale of immovable property, there is no presumption as to time, being essence of contract. In the case of agreement of sale of immovable property time is never regarded as essence of contract. It would be an essence of contract only when it is specifically stipulated or it clearly emerges by way of implication. 16.Even accepting plaintiffs contention that time was not the essence of contract, then also from the conduct of plaintiffs it is evident that they were never ready and willing to perform their part of contract. Even assuming that time was not essence of contract, having regard to section 46 of the Contract Act, when no time limit is prescribed for performance, then engagement must be performed within a reasonable time. As noted earlier, agreement of sale was executed on 1st June, 1995 and the present suit was instituted in 2007. During the intervening period of 12 years, plaintiffs did not take any steps. In view of this, I am of the opinion that reliance placed 15 FA 330/2010 by plaintiffs on the judgment of Chand Rani (supra) is of no assistance to plaintiffs. 17.Learned trial Judge has also refused prayer of plaintiffs for refund of earnest money and the compensation. I do not find that the learned trial Judge committed any error in refusing the prayer of compensation. Mr.Parmar, on taking instructions from his clients, fairly made a statement that within four weeks from today, defendants will refund amount of earnest money of Rs.1,19,700/- received by defendants to plaintiffs. Statement is accepted. 18.In view of above, appeal fails and the same is dismissed. In the circumstances of the case, however, there shall be no order as to costs. Defendants shall pay amount of Rs.1,19,700/- to plaintiffs within a period of four weeks from today. 19.In view of dismissal of appeal, no orders are necessary in the Civil Application No.290 of 2010 and the same is disposed of. (R.G.Ketkar, J.)