RSA No. 3150 of 2008 1 In the High Court for the States of Punjab and Haryana at Chandigarh … RSA No. 3150 of 2008 Date of decision: October 1,2008 Bimla Devi and others ..Appellants. Versus Janak Raj ..Respondent Coram: Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr. Kanwaljit Singh,Sr. Advocate with Mr.G.S.Ghuman, Advocate for the appellants. ... Rakesh Kumar Garg,J. This is plaintiffs second appeal challenging the judgment and decrees of the courts below whereby the suit for specific performance of the agreement filed by the plaintiff has been dismissed and it has been held that the defendant is entitled to forfeit the earnest money of Rs.1,00,000/-. The plaintiffs instituted a suit for specific performance of the agreement alleging that the defendant had entered into an agreement to sell dated 16.8.1993 and agreed to sell the suit property to Puran Chand for a consideration of Rs.9,25,000/-. A sum of Rs.1,00,000/- was received by the defendant as earnest money and the stipulated date for the execution of the sale deed was fixed as 30.11.1993. On the request of the defendant, the stipulated date for execution of the sale deed was extended to 31.12.1993 and thereafter, to 30.5.1994. A writing in this regard was recorded on the reverse of the agreement to sell Puran Chand during his life time was ready and willing to perform his part of the contract and defendant had been evading to perform his part of contract. Puran Chand had since died. The plaintiff No.1 is widow and plaintiff Nos.2 to 5 are the children of Puran Chand. After the death of Puran Chand, his natural heirs were always ready and willing to perform their part of contract. A registered notice was also served upon the defendant No.1 but to no RSA No. 3150 of 2008 2 effect. Accordingly, specific performance of the agreement to sell dated 16.8.1993 and in the alternative the refund of earnest money to the tune of Rs.1,00,000/- along with interest has been sought by the plaintiff for filing the suit through attorney Chaman Lal. In pursuance of the notice of the suit, the defendant appeared and through the written statement-cum-counter claim, it has been alleged that the defendant has always been ready and willing to perform his part of the contract. Puran Chand, during his life time and after his death, his legal heirs, did not get the sale deed executed on the stipulated date for execution of the sale deed. On merits, the execution of the agreement dated 16.8.1993 was admitted. It was also admitted that the stipulated date for execution of the sale deed was extended up to 31.12.1993 and thereafter to 30.5.1994 as the prospective purchaser could not make arrangement for the balance sale consideration and accordingly on his request, the stipulated date for the execution of the sale deed was extended. It was admitted that Puran Chand had since died and the plaintiffs were his legal heirs. It was denied that during his life time Puran Chand remained ready and willing to perform his part of contract or that the defendant had been evading to execute the sale deed. It was further stated that defendant was ready to execute the sale deed as he had got the shop in dispute vacated on 10.11.1993 and which is lying vacant since then. It was further averred that the prevalent rate of rent is Rs.60,000/- per annum. The plaintiffs were asked to pay the amount of Rs.8,25,000/- i.e., the balance amount of sale consideration along with interest amounting to Rs.445500/- to the defendant and get the sale deed executed but they had refused to do so. It was also stated in the written statement that the defendants are still ready to execute the sale deed in case the plaintiffs are ready to pay the balance amount along with interest which comes to Rs. 4,45,500/- The defendant also sought recovery of Rs.4,45,500/- through the counter claimant. The plaintiffs through reply to the counter claim and replication alleged that Moti Ram had instituted a suit for permanent injunction with regard RSA No. 3150 of 2008 3 to the shop in dispute against the defendant and other which was dismissed on 26.11.1994. On account of the pending suit the defendant had been getting the stipulated date for execution of the sale deed extended. The suit was got instituted by the defendant through Moti Ram with malafide intention to avoid the execution of the sale deed. The other material averments raised by the defendants were controverted and the plaintiffs reasserted the averments made in the plaint. From the perusal of the pleading and documents, the following issues were framed by the learned lower Court:- 1. Whether the plaintiffs were and are still ready and willing to perform their part of agreement dated 16.8.1993 ?OPP 2. Whether the plaintiffs are entitled to the specific performance of agreement dated 16.8.1993 or in the alternative, they are entitled to refund of Rs.1,00,000/- as earnest money with interest ?OPP 3. Whether the plaintiffs were not ready and willing to perform their part of agreement ? If so, whether the defendants are entitled to Rs.4,45,500/- from the plaintiffs ?OPD 4. Relief. Vide judgment and decree dated 12.4.2001, the suit of the plaintiff was dismissed with costs and the counter claim was partly allowed with the proportionate costs to the extent that defendant is entitled to forfeit the earnest money of Rs.1,00,000/-. Aggrieved by the aforesaid judgment and decree, the plaintniffs filed an appeal, which was dismissed by the Additional District Judge, Barnala vide impugned judgment and decree dated 16.5.2008. While dismissing the appeal, the lower Appellate Court found that there was no controversy between the parties to the effect that the defendant entered into an agreement to sell with Puran Chand, predecessor-in-interest of the plaintiffs on 16.8.1993 for consideration of Rs.925,000/- and received a sum of Rs.1,00,000/- as earnest money from him and the stipulated date for execution of the sale deed which RSA No. 3150 of 2008 4 was fixed as 30.11.1993 was firstly extended upto 31.12.1993 and thereafter extended up to 30.5.1994 vide endorsement on the reverse side of the agreement. The courts below on appreciation of evidence also recorded a finding of fact that the material on record does not indicate that either the plaintiffs or their predecessor-in-interest had been ready and willing to perform their part of contract and as such they were neither entitled to specific performance of contract nor refund of money as there is a specific clause in the agreement with regard the forfeiture of earnest money and as such earnest money stood forfeited on account of lapse on the part of the plaintiffs in getting sale deed executed in this regard. The plaintiffs have filed the instant appeal challenging the judgment and decrees of the courts below. Shri Kanwaljit Singh, learned senior counsel has vehemently contended that the judgment and decrees of the courts below dismissing the suit for specific performance of agreement dated 16.8.1993 is absolutely against the law particularly so when the agreement to sell has been admitted. The argument of the learned senior counsel is that in the written statement filed by the defendant, he had agreed to get the sale deed executed and had only demanded interest on account of delay by way of counter claim and therefore, since the defendant admitted the agreement to sell and the contents of the written statement showed readiness and willingness to perform their part of the contract, the suit should have been decreed in accordance with the provisions of Order 12 Rule 6 of C.P.C. and the counter claim should have been decided separately. The learned counsel asserted that an application under Order 12 Rule 6 of CPC was filed stating that suit may be decreed and sale deed be ordered to be executed and with respect to the counter claim, the matter can be decided by the court, however, vide order dated 29.11.1997, the trial Court passed the following order:- “Present: Counsel for parties. The parties are unable for compromise because the defendant is RSA No. 3150 of 2008 5 interested to execute the sale deed only if the plaintiff will pay amount of interest asked for to which the plaintiff is not agreed. Therefore, compromise is not possible. Accordingly, plaintiffs are directed to file replication and reply to counter claim on 16.12.1997. Sd/- ACJ(SD): 29.11.97” And thereafter, did not even decided the application under Order 12 Rule 6 C.P.C and therefore, the impugned judgment and decrees are liable to be set aside. On the basis of the above averments, learned counsel for the appellants has sought to raise the following substantial question of law in the appeal:- “ Whether on admission of Agreement to sell and readiness and willingness of the defendants to perform their part of the contract, the suit should have been decreed in accordance with the provisions of Order 12 Rule 6 of C.P.C. ? I have heard learned counsel for the appellants and find that the argument raised is misconceived in the facts and circumstances of the case as there is no admission on the part of the defendant-respondents on the basis of which the suit of the plaintiff-appellants could be decreed under Order 12 Rule 6 C.P.C. From the pleadings of the parties and evidence on record, it is clear that the defendant was always ready and willing to perform his part of contract and it was the plaintiff-appellants who were not willing and ready to perform their part of contract. The defence taken by the respondents is that the plaintiff kept quite for almost three years and in the process, the defendants had suffered a lot and in case they are paid the interest on the balance amount of sale consideration, they were still ready to execute the sale deed. Thus the willingness and readiness of the defendant at the time of filing of the written statement was conditional to which the appellants were not agreeable as is clear from the order dated 29.11.1997, reproduced above. Thus there was no RSA No. 3150 of 2008 6 occasion for the trial Court to pass any decree in favour of the appellants on the basis of the alleged admission made by the defendant. Moreover, the appellants have raised this issue for the first time only in the second appeal. Learned counsel for the appellants was unable to point out from the judgments of the courts below that this issue was ever raised before the courts below. He has very fairly conceded that even in the grounds of appeal submitted before the lower Appellate Court, the appellants have not raised this issue. Though the question of law even if it is not raised in the courts below, it can be raised in the second appeal, yet, in my view, this question was not raised by the appellant rightly before the courts below as this issue does not arise from the facts and circumstances of the case at all as there is no admission on the part of the defendant-respondents, on the basis of which decree of specific performance of the agreement to sell could be passed in favour of the appellants. No other argument has been raised by the learned counsel for the appellants. Thus, no substantial question of law arises in the facts and circumstances of the case. No merit. Dismissed. October 1, 2008 (RAKESH KUMAR GARG) nk JUDGE