RSA No.4047 of 2010 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.4047 of 2010 (O&M) Date of decision: 4.1.2011 Narinderjit Singh ......Appellant(s) Versus North Star Estate Promoters ......Respondent(s) CORAM:- HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Arun Palli, Sr. Advocate with Mr. Sunil Garg, Advocate and Mr. Jai Bhagwan, Advocate for the appellant. Mr. T.S. Dhindsa, Advocate and Mr. C.B. Goel, Advocate for the respondent. Rakesh Kumar Garg, J. This is defendant's second appeal challenging the judgment and decree of the Lower Appellate Court, whereby, while accepting the appeal, the judgment and decree of the trial Court has been modified and a decree for possession by way of specific performance of the agreement dated 22.10.1996 has been passed in favour of the plaintiff-respondent. Briefly stated, the facts of this appeal, as per the averments made in the plaint, are that the appellant through his attorney (defendant No.2-Gurcharan Singh) entered into an agreement of sale of the suit land measuring 51 Bighas 9 Biswas with the plaintiff-respondent at the rate of ` 14,00,000/- per acre vide agreement dated 22.10.1996 and defendant No.2 received a sum of ` 1,00,000/- as earnest money on behalf of the appellant and further executed a separate receipt in this regard. As per the terms and conditions of the agreement, the plaintiff-respondent was to make a payment of ` 9,00,000/- to the appellant on or before 23.11.1996 RSA No.4047 of 2010 (O&M) 2 and after receiving the said amount, the appellant was to deliver the possession of the land in question to the plaintiff-respondent for the purpose of development activities. It is the further case of the plaintiff- respondent that he was always ready and willing to perform its part of the contract. On 23.11.1996, the plaintiff-respondent was having the amount of ` 9,00,000/- for payment of the same to the appellant. On 22.11.1996, the appellant was requested to receive the aforesaid amount from the plaintiff-respondent. However, the appellant put off the matter. On 23.11.1996, the plaintiff-respondent also got issued a demand draft of ` 9,00,000/- bearing No.BC/F32234 dated 23.11.1996 from the State Bank of Patiala, Sector 10, Chandigarh and also sent a message to the appellant to receive the said amount. However, the appellant did not come to the office of the plaintiff-respondent for receiving the aforesaid amount. It is the further case of the plaintiff-respondent that he along with one Vijay Bhardwaj had gone to the house of the appellant to make the payment of ` 9,00,000/-. However, the appellant did not receive the said amount. Thus, the appellant committed breach of agreement. The plaintiff-respondent also got issued a notice dated 24.11.1996 upon the appellant through its counsel but the appellant refused to accept the said notice. As per agreement, the plaintiff-respondent was to make further payment of ` 10,00,000/- to the appellant on or before 24.12.1996 but the appellant refused to receive the said payment. It was agreed between the parties that the appellant would execute the sale deed regarding 2 acres of land out of the suit land after receiving the payment of ` 18,00,000/- equal to the value of 2 acres. The sale deed regarding 3 acres of land was to be executed after receiving the amount of ` 42,00,000/- equal to the value of 3 acres and last and final sale deed regarding the land measuring 31 Bighas 9 Biswas was to be executed and registered by the appellant in favour RSA No.4047 of 2010 (O&M) 3 of the plaintiff-respondent after receiving the balance sale consideration and the earnest money of ` 2,00,000/- was to be adjusted at the time of execution of the last sale deed. The plaintiff-respondent had always ready and willing and was still ready and willing to perform its part of contract but the appellant did not cooperate with the plaintiff-respondent for getting necessary clearance certificates from PUDA and Income Tax Authorities for the purpose of execution and registration of sale deed. The plaintiff- respondent made repeated requests to the appellant to execute the sale deed regarding the suit land as per the terms and conditions of the agreement but to no effect. Hence the present suit. Pursuant to the notice of the suit, the appellant put in appearance and filed written statement contesting the suit raising various preliminary objections. On merits, execution of the agreement of sale by defendant No.2 as attorney of appellant was denied. It was further pleaded that defendant No.2-Gurcharan Singh was an old and sick person and at that time he was not in a position to understand the nature of any such transaction. The rate of land prevailing in the village at the relevant time was ` 42,00,000/- per acre and there was no question of execution of agreement to sell by defendant No.2 thereby agreeing to sell the land at the rate of ` 14,00,000/- per acre. Receipt of earnest money of ` 1,00,000/- by defendant No.2 was also denied. It was further pleaded that in fact the plaintiff-respondent in collusion with Colonel Harjit Singh and Vijay Bhardwaj wanted to grab the valuable property of the appellant. Colonel Harjit Singh was close relative of defendant No.2 and defendant No.2 was having full confidence in him but both the witnesses colluded with the plaintiff-respondent and defrauded and cheated the old aged, sick and infirm person. The plaintiff-respondent did not make payment of earnest money to defendant No.2. In fact the appellant was away to Delhi on RSA No.4047 of 2010 (O&M) 4 22.10.1996 and taking advantage of this fact, the plaintiff-respondent through its Director colluded with Colonel Harjit Singh and Vijay Bhardwaj had hatched a criminal conspiracy to defraud the appellant; forged the agreement of sale dated 22.10.1996. It was further denied that the plaintiff- respondent was ready and willing to make payment of ` 9,00,000/- on 23.11.1996. It was further pleaded that false documents were prepared by the plaintiff-respondent in this regard. The remaining averments of the plaint were also denied and dismissal of the suit was prayed for. The plaintiff-respondent filed replication controverting the averments made in the written statement and reiterating those made in the plant. On the pleadings of the parties, the following issues were framed by the trial Court: “1. Whether the plaintiff is entitled for decree of possession by way of specific performance of agreement to sell dated 22.10.1996? OPP 2. Whether the plaintiff is entitled to relief claimed for? OPP 3. Relief.” After hearing the arguments and going through the record of the case, the trial Court came to the conclusion that from the evidence on the file it is proved that agreement dated 22.10.1996 regarding sale of the land in question was executed by defendant No.2 as attorney of the appellant in favour of the plaintiff-respondent. However, the trial Court observed that in view of the facts and circumstances of the case, it would not be proper to grant decree for specific performance of agreement in question in favour of the plaintiff-respondent and in stead thereof, the RSA No.4047 of 2010 (O&M) 5 alternative relief of refund of earnest money should be granted. Consequently, the trial Court partly decreed the suit vide judgment and decree dated 23.4.2009 and passed a decree for refund of ` 1,00,000/- with interest at the rate of 12% thereon from the date of execution of the agreement of sale till realization of the amount in question in favour of the plaintiff-respondent. Feeling aggrieved from the aforesaid judgment and decree of the trial Court, the plaintiff-respondent preferred an appeal before the Lower Appellate Court. It is relevant to mention that the appellant had not filed any appeal to challenge the findings of the trial Court regarding execution of the agreement to sell in question and the readiness and willingness of the plaintiff-respondent on his part to perform the agreement to sell in question. The aforesaid appeal filed by the plaintiff-respondent was accepted by the Lower Appellate Court vide impugned judgment and decree dated 24.7.2010. The relevant observations of the Lower Appellate Court reads as follows: “Therefore, it is absolutely clear that where the appellate Court finds that the discretion has not been exercised properly, by the trial Court, the appellate Court can rectify the mistake in the appeal. Now coming to the facts of this case that the defendant/respondents did not raise any plea that the terms of the contract shows that the appellant/plaintiff took unfair advantage or that the specific performance of the contract would cause any hardship to the defendants/respondents. The defendants/respondents have denied the execution of RSA No.4047 of 2010 (O&M) 6 the agreement in question. Once the denial of the execution of the agreement is found to be false, the decree for specific performance could not be declined by the learned trial Court on the grounds mentioned in the impugned judgment. The defendants/appellants did not mention the particulars of the fraud practiced upon defendant/respondent No.2 by the appellant/plaintiff at the time of entering into contract. The only plea raised by them is that the rates of the land were much higher at the relevant time. However, they could not substantiate this allegation as they have not produced any evidence to show that the rate of the land in the said locality was much higher than the rate agreed between the parties. The fact that earnest money was meager amount of Rs.1,00,000/- and the possession of the land was agreed to be delivered on the payment of only ` 10,00,000/- by the appellant/plaintiff to the respondents/defendants are no grounds on which the relief of specific performance could be declined to the appellant/plaintiff. As per explanation (1) appended to Section 20 of the Specific Relief Act even inadequacy of the consideration is not a ground for refusal of specific performance. When inadequacy of the consideration is not lawful ground, then inadequacy of earnest money can also not be a ground for refusal of decree of specific performance to the appellant/plaintiff. Moreover, in case the defendant/respondent wanted to avoid the contract on the ground that same is unfair or fraudulent, they RSA No.4047 of 2010 (O&M) 7 could have instituted a suit seeking rescission of the contract or even in this suit they could have made a counter claim. However, they did not make any prayer for rescission of contract as they were well aware that there is no ground to avoid the contract. The learned trial Court has specifically held that due execution of the agreement in question has been proved and there is no defect in the findings recorded by the learned trial Court in this regard. The version of the appellant/plaintiff in this regard has been proved by PW3 Vijay Bhardwaj who is marginal witness of the agreement in question. So far as, readiness and willingness on the part of the appellant/plaintiff to perform its contract is concerned, the learned trial Court has recorded findings in favour of the appellant/plaintiff and the said findings are based on proper appreciation of evidence. The evidence produced by the appellant/plaintiff shows that the appellant/plaintiff had got issued a demand draft of Rs.9,00,000/- on 23.11.1996 for payment of the said amount to the defendants/respondents but they did not receive the said amount. The appellant/plaintiff had sent message and also phonogram Ex.PW3/1 to the defendants/respondents on 23.11.1996 vide receipt Ex.PW3/H. Even a notice Ex.PW3/D was sent to the defendants/respondents through courier vide receipt Ex.PW3/C and even a legal notice had been sent to the defendants/respondents by the appellant/plaintiff through its counsel. Further the statement of M.K.Jain RSA No.4047 of 2010 (O&M) 8 Director of the appellant/plaintiff in this regard finds corroboration from the testimony of Vijay Bhardwaj. On the other hand, the defendant/respondents have denied the agreement in question and it is not their plea that appellant/plaintiff was not ready and willing to perform its contract. Under these circumstances, the evidence produced by the appellant/plaintiff to prove their readiness and willingness to perform their part of contract can be accepted without any hesitation and in this regard I find supports from the judgment of Hon'ble Punjab and Haryana High Court in Santa Singh vs. Binder Singh and Ors 2006(4) Civil Court Cases-608 wherein it was held as under:- “Since the case of the defendant is that of one of denial, therefore, the statement of the plaintiff that he was ready and willing to perform his part of the contract is sufficient to infer that plaintiffs were ready and willing to perform their part of contract. It was a meager amount of Rs.2,000/- alone which was required to be paid at the time of registration of the sale deed. The substantial amount was paid at the time of execution of the agreement. More than Rs.12,000/- was kept for payment to the mortgagee. Therefore, the argument raised by the learned counsel for the appellant that the plaintiffs have not led evidence to prove his ready and willingness to perform the contract is not tenable.” Once the due execution of the agreement and readiness and willingness on the part of the appellant/plaintiff is proved, the decree of specific RSA No.4047 of 2010 (O&M) 9 performance should be passed in favour of the appellant/plaintiff, unless, a specific case for refusal of relief of specific performance is made out. The decree for specific performance cannot be declined on the whims and fancy. The parties should be made to fulfill their contractual obligations unless there is some ground for relieving them from their contractual obligation. In Mohini Kapoor and ors. Vs. Deepak Uppal 2006(2) Civil Court Cases-160 the Hon'ble Punjab and Haryana High Court has held that contract for transfer of immovable property must be specifically enforced and alternative relief of securing compensation in money would not be adequate. As already mentioned even the escalation in the prices of the property is not a ground for refusing the specific performance. So far as the delay in filing of the suit is concerned, the same is not of any consequence as the suit has been held within limitation. It is not the case of the defendants/respondents that circumstances have changed due to delay in filing of the suit. “ Feeling aggrieved from the aforesaid judgment and decree of the Lower Appellate Court, the defendant has filed the instant appeal. In the grounds of appeal, it is submitted that the following substantial questions of law arise in this appeal: “(i) Whether the findings of the courts below are perverse to the pleadings, evidence and material placed on record? (ii) Whether the plaintiff has to stand on his own legs RSA No.4047 of 2010 (O&M) 10 and to prove his positive case or the suit of the plaintiff can be decreed on the basis of weaknesses of the defence? (iii) Whether the plaintiff, throughout has to prove his readiness and willingness i.e. from the date of execution of the agreement to sell to till the actual execution of the sale deed, even in the cases where the execution of the agreement to sell itself is being denied? (iv) Whether the judgments of the courts below is totally perverse as the courts below has failed to give any observation that whether the plaintiff was still ready and willing to purchase the property on 24.12.1996, 23.4.1997, 23.7.1997 and 23.10.1997? (v) Whether the court has to satisfies to his own conscience by looking at the disputed signature as well as standard signatures, where contradictory reports of the handwriting experts are on record? (vi) Whether the trial court was justified in declining the relief of specific performance to the plaintiff in terms of Section 20 of Specific Relief Act and in view of the facts and circumstances of the present case? (vii) Whether the finding of the ld. Lower Appellate Court is totally illegal that a legal issue like hardship has to be specifically pleaded or the legal issue can be raised at any stage?” Learned counsel appearing on behalf of the appellant has argued that in the present case the requirement of Section 16 of the Specific Relief Act has not been complied with as the plaintiff-respondent RSA No.4047 of 2010 (O&M) 11 has failed to prove his readiness and willingness to perform his part of the contract at all the stages of the agreement. Elaborating his argument further, learned counsel for the appellant has argued that readiness and willingness of the plaintiff-respondent on 24.12.1996, 23.4.1997, 23.7.1997 and 23.10.1997 is not proved from the record. The plaintiff-respondent has not produced any evidence on record to show that on the said dates, he was ready and willing to purchase the property in dispute. He has neither made any pleadings nor led any evidence with regard to his readiness and willingness on the above mentioned dates/stages and thus, has failed to prove that he was continuously ready and willing to perform his part of the agreement from the date of the contract till the filing of the suit notwithstanding that the appellant had repudiated the contract and was not ready to complete the transaction in terms of the agreement. According to the learned counsel for the appellant, the fact that the appellant had refused to receive ` 9,00,000/- from the plaintiff-respondent on 23.11.1996 amounts to repudiating the contract and in such a case in a suit for specific performance of the agreement, the plaintiff-respondent was required to prove continuous readiness and willingness from the date of the contract upto the date of filing of the suit to perform the contract on his part and failure to make good that averment brought with it the inevitable dismissal of his suit. In support of his case, learned counsel for the appellant has relied upon the judgments cited as Ardeshir H. Mama v. Flora Sassoon AIR 1928 Privy Council 208, Saral Kumar Chatterjee v. Madhusudan Auddy and another AIR 1964 Calcutta 556 and H.P. Pyarejan v. Dasappa (dead) by L.R.s and Ors.2006(1) RCR (Civil) 646. It was also argued by the learned counsel for the appellant that the discretion available with the Court under Section 16 of the Specific Relief Act was to be used very cautiously and in the present case it RSA No.4047 of 2010 (O&M) 12 becomes even more important as there was total inaction on the part of the purchaser for almost three years and the delay in filing the suit coupled with substantial rise in prices of properties it would be inequitable to give relief of specific performance to the appellant. Counsel for the appellant has cited K.S. Vidyanadam and others v. Vairavan AIR 1997 SC 1751 to contend that in such circumstances specific performance of the agreement in question cannot be granted. Lastly, learned counsel for the appellant also argued that in view of the conduct of the respondent, he was not entitled to the discretionary relief as granted and therefore, the judgment and decree of the Lower Appellate Court was liable to be set aside. On the basis of the aforesaid argument, learned counsel for the appellant has argued that the following substantial question of law arises in this appeal: “Whether the Lower Appellate Court was right in law in granting the discretionary relief under Section 20(c ) of the Specific Relief Act in the absence of compliance of provisions of Section 16 ( c). However, on the other hand, learned counsel appearing on behalf of the plaintiff-respondent has supported the impugned judgment and decree submitting that the escalation in prices of the properties is no ground to refuse the specific performance of the agreement in question and the delay in filing the suit is not of any consequence as admittedly the suit was filed within limitation prescribed under law and moreover, it is not the case of the appellant that circumstances have changed due to delay in filing of the suit. Learned counsel for the respondent has also argued that in the present case, the appellant had denied the agreement in question and it was not even his plea that the plaintiff-respondent was not ready and willing to perform its contract and under these circumstances, the findings recorded by the Courts below regarding the readiness and willingness of RSA No.4047 of 2010 (O&M) 13 the plaintiff-respondent to perform its part of the contract do not suffer from any infirmity. Moreover, the evidence produced by the plaintiff-respondent shows that the plaintiff-respondent was ready with an amount of ` 9,00,000/- on 23.11.1996 for payment of the said amount to the appellant but he did not receive the same. Neither the appellant parted with the possession of the suit property on 23.11.1996 on receipt of ` 9,00,000/- from the plaintiff-respondent as stipulated in the agreement and once the appellant had not performed his part of the contract on 23.11.1996, there was no occasion thereafter for the plaintiff-respondent to perform its part of the agreement as argued. Learned counsel for the respondent has further argued that the inadequacy of consideration is not a ground for refusal of specific performance. Moreover, the plea raised by the appellant has not been substantiated by producing any evidence to the effect that the rate of the land in the said locality was much higher than the agreed rate. Moreover, the appellant had taken a false plea of fraud which he failed to prove and therefore, he was not entitled to any equity in his favour. Counsel for the respondent further argued that even the plea of hardship has not been pleaded by the appellant and thus, the appeal was devoid of any merit and is liable to be dismissed. I have heard learned counsel for the parties and have perused the impugned judgment and decrees. Execution of the agreement dated 22.10.1996 in question by defendant No.2 ( who was father and general power of attorney) on behalf of the appellant is not in dispute. The defence taken by the appellant in the written statement was that the aforesaid attorney Gurcharan Singh was an old and sick person and was defrauded and cheated by the plaintiff- respondent in connivance with the marginal witnesses of the agreement in question. However, the aforesaid defence taken by the appellant could not RSA No.4047 of 2010 (O&M) 14 be proved. It may be noticed that while decreeing the suit for alternative relief of refund of earnest money, the trial Court also found that the plaintiff- respondent was ready and willing and was still ready and willing to perform his part of the contact on 23.11.1996 by offering a sum of ` 9,00,000/- to the appellant as stipulated in the agreement. In fact the trial Court observed that since the appellant had denied the execution of the agreement dated 22.10.1996, therefore, he cannot take the plea that the plaintiff was not ready and willing to perform its part of the contract and that the plaintiff did not have the capacity to make the payment and therefore, the question whether the plaintiff-respondent was ready with the balance payment of ` 10,00,000/-, ` 18,00,000/- and ` 42,00,000/- to be paid on subsequent dates became meaningless and lost its significance and there was no occasion for the Court to come to the conclusion whether the plaintiff-respondent was ready with the remaining amount. However, the trial Court refused to exercise its jurisdiction of granting the relief of specific performance under Section 20 of the Specific Relief Act on the ground that the suit was filed after a long gap and the prices have escalated in the meantime. Relevant para of the trial Court judgment reads as follows: “The main contention raised by the learned counsel for the plaintiff is that defendant No.1 Narinderjit Singh being owner in possession of the suit land had appointed defendant No.2 Col. Gurcharan Singh i.e. his father as his attorney, whereas, defendant No.2 had executed an agreement to sell in question dated 22.10.1996 in favour of the plaintiff at the rate of Rs.14 lacs per acre after having received the earnest amount of Rs.One lac in respect of the land in dispute. The