SRJ 1 FA-74-10.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.74 OF 2010 WITH CIVIL APPLICATION NOS.574/10, 1213/10 & 1214/10 Smt. Sangeeta R. Mishra .. Appellant. V/s. Shri Mukhtar N. Qureshi .. Respondent. WITH CIVIL APPLICATION NO.2384 OF 2010 Shri Mukhtar N. Qureshi .. Appellant V/s. Smt. Sangeeta R. Mishra .. Respondent. Shri Pratap S. Patil i/b. Shri Ravi Bharadwaj, for Appellant. Shri Uday P. Warunjikar, for Respondent in C.A.Nos.574/10, 1213/10 and 1214/10 and for Appellant in C.A.No.2384/10. CORAM : R.G.KETKAR, J. DATE : JULY 14,2010. JUDGMENT:- 1. Heard Shri Pratap S. Patil, learned counsel for the Appellant and Shri Uday P. Warunjikar, learned counsel for the Respondent. 2. Admit. Shri Warunjikar waives service on behalf of Respondent. SRJ 2 FA-74-10.sxw 3. By consent of the parties, appeal is heard finally forthwith. 4. This appeal is preferred by the Original Defendant, challenging the judgment and decree dated 7 th November, 2009 in Special Civil Suit No.1503 of 2007 passed by the learned Civil Judge Senior Division, Pune By that judgment, the learned Trial Judge decreed the suit instituted by the Respondent for specific performance of agreement of sale dated 16 th January, 2007. The learned Trial Judge directed the appellant, herein after referred to as the Defendant, to execute the sale deed/conveyance in respect of flat no.10, admeasuring about 514 sq. ft. situate on the second floor in the building No.36, South Wing, Pratiknagar Sector Nos. 3 & 4 Co-operative Housing Society Limited, Yerwada, Pune (in short suit flat ) in favour of Respondent, herein after referred to as the original plaintiff, after receiving the remaining sale consideration and deliver vacant possession to the Plaintiff within a period of one month from the date of the order. The learned Trial Judge further directed that in case of failure of the defendant in executing the sale deed, the Plaintiff would be at liberty to get it executed through the Court Commissioner and receive the possession by following the due process of law. The facts giving rise to the filing of this appeal are as under. SRJ 3 FA-74-10.sxw 5. The Defendant agreed to sale the suit flat to Plaintiff and entered into agreement of sale on 16 th January, 2007. The agreed consideration was of Rs.6,00,000/-. Clauses 2, 3 and 8 of the said agreement are relevant for deciding the controversy between the parties and the said clauses read as under:- Clause-2 Payment Schedule:- The Purchaser have agreed to pay to the Vendor the purchase consideration of Rs. 6,00,000,/- in the following manner:- Rs.1,00,000/- Paid by Cheque bearing no.843369 dated 12/12/2006,drawn on Bank of Maharashtra, Padmavati branch, Pune. Rs.5,00,000/- To be paid after sanction of loan from Bank. ------------- Rs.6,00,000/- Total consideration. ============= The vendor hereby admits and acknowledges the receipt of the said amount of Rs.1,00,000/- (Rs.One lakh only) and discharges the Purchasers for the same forever. Clause-3 Time is the essence of contract:- The time is the essence of this agreement and both parties has agreed to complete this agreement within a period of two months by performing their individual obligation and duties. Clause-8 Vendors to deliver documents to purchasers:- The vendor shall deliver and hand over the papers relating to the said flat which are in the custody of the vendor and the vendor further undertakes to deliver or cause to be delivered to the purchasers all the documents, deeds and writing, which may be found in the custody of the vendor. SRJ 4 FA-74-10.sxw 6. Under clause 2 of the agreement, the Plaintiff agreed to pay to the Defendant Rs.6,00,000/- and out of that amount, Rs.1,00,000/- was paid by cheque bearing no. 843369 dated 12 th December, 2006, drawn on Bank of Maharashtra, Padmavati Branch, Pune. The balance amount of Rs.5,00,000/- was to be paid after the sanction of loan from the bank. Defendant admitted and acknowledged the receipt of Rs.1,00,000/-. 7. Clause 3 provided that the time is the essence of the contract and both the parties agreed to complete the transaction within a period of two months by performing their individual obligations and duties. 8. Clause 8 thereof provided that Defendant was to deliver and hand over the papers relating to the said flat which were in her custody and Defendant further undertook to deliver to Plaintiff all the documents, deeds and writing which were in the custody of the Defendant. 9. The agreement dated 16 th January, 2007 was registered in the office of Sub-Registrar, Haveli No.VIII, Yerwada,Pune on 18 th January,2007 at Serial No.577/2007. Plaintiff submitted loan proposal to the State Bank of India, Main Branch, Pune on 3 rd February, 2007. SRJ 5 FA-74-10.sxw 10. It is the case of the Plaintiff that he resubmitted loan proposal on 19 th March, 2007. Defendant had supplied No Objection Certificate from the society on 26 th March, 2007 (Ex.42) and No Objection from Shiva Developers on 26 th April, 2007 (Ex.43). It is the case of the Plaintiff that the bank sanctioned the loan on 21 st May, 2007. He issued notice on 4 th August, 2007 to Defendant, calling upon her to complete the transaction. This was, however, not replied by the Defendant. In the notice, Plaintiff averred that he had paid Rs.2,00,000/-in cash towards the part consideration of the suit flat to the husband of Defendant and to that effect he executed the receipt on stamp paper, acknowledging the receipt of the said amount. Since, there was no compliance of the notice, Plaintiff instituted the present suit for specific performance of the contract. He further averred that Plaintiff was always ready and willing and is still ready and willing to perform his part of contract. 11. Defendant filed Written Statement at Ex. 14 and resisted the suit. It was contended that Plaintiff was to pay the balance consideration of Rs.5,00,000/- within two months from the date of agreement and get sale deed executed. Clause 3 of the agreement provided that the time was essence of the contract. Plaintiff was, therefore, bound to make payment of Rs.5,00,000/- by 16 th March, 2007. Plaintiff failed to obtain the bank loan within the period of two months. Plaintiff committed breach of the contract. SRJ 6 FA-74-10.sxw He had not applied to the bank for sanctioning of loan within two months from the date of the agreement of sale. It was further submitted that plaintiff had forfeited his rights under the agreement due to his failure to comply with the terms of the agreement regarding payment of the balance consideration within the specified time. 12. It was further contended that the original agreement dated 27 th December, 1995 by which she had purchased the suit flat was unlawfully withheld by Plaintiff. She also denied that she agreed to obtain any No Objection Certificate from the builder namely Shiva Developers in favour of Plaintiff. She also denied that she pressurized Plaintiff to pay Rs.2,00,000/- by cash and agreed to repay the same after sanctioning of the bank loan. Plaintiff had handed over two cheques of Rs.2,00,000/- and Rs.3,00,000/- without having sufficient funds in his account. The cheque of Rs.2,00,000/- was dishonored and second cheque of Rs.3,00,000/- was not attempted to be encashed by Defendant. Plaintiff also kept her in dark regarding rejection of his loan proposal. Though Plaintiff s bank sanctioned the loan of Rs.4,00,000/- on 21 st May, 2007 i.e. to say after more than two months when Plaintiff agreed to make payment by 16 th March, 2007, till 4 th August, 2007, Plaintiff did not inform her about the sanction of his loan. On these among other grounds, Defendant resisted the suit. SRJ 7 FA-74-10.sxw 13. On the basis of rival contentions of the parties,the learned Trial Judge framed the necessary issues. 14. In order to substantiate his case, Plaintiff examined himself at Ex.29-A and also examined PW-2 Shri Dinkar J. Khurjekar, Deputy Manager, State Bank of India, Main Branch, Pune at Ex.60. Defendant neither entered into witness box nor examined any other witness to substantiate her defence. 15. After considering the material on record, the learned Trial Judge held that Plaintiff was and is ready and willing to perform his part of contract. Plaintiff is also entitled to relief of specific performance and also injunction as prayed for. 16. Shri Pratap Patil, learned Counsel for Defendant submitted that the transaction was to be completed within two months from the date of execution of the agreement dated 16 th January, 2007. Since Plaintiff had not completed the transaction within the stipulated time, he forfeited his rights to obtain the relief of specific performance. The case of the Plaintiff that he had given Rs.2,00,000/- in cash to the husband of Defendant is un-acceptable. If at all, the Plaintiff had given Rs.2,00,000/- in cash to the husband of Defendant, considering the total consideration of Rs.6,00,000/-, there was no need of SRJ 8 FA-74-10.sxw issuing cheque of Rs.2,00,000/- and Rs.3,00,000/- in favour of the Defendant. This clearly falsify the case of the Plaintiff that he had paid Rs.2,00,000/- in cash. 17. On the other hand Shri Warunjikar, learned counsel for Plaintiff supported the impugned judgment. He submitted that Plaintiff had submitted proposal on 3 rd February, 2007. He re-submitted the proposal on 19 th March, 2007. The loan was sanctioned on 21 st May, 2007. On 30 th May,2007, Pay Order of Rs.4,00,000/-was prepared in the name of Defendant. He also executed mortgage deed in favour of the bank. As Defendant did not execute the assignment deed, the Pay Order was not handed over to her. On 30 th May, 2007, the original Pay Order was cancelled and new Pay Order was prepared for Rs.4,00,000/- after debiting of account of Plaintiff. He, therefore, submitted that the learned Trial Judge rightly decreed the suit. 18. In view of the rival contentions raised by the learned counsel for the parties, following points arise for my determination:- (i) Whether Plaintiff has proved that he was and is ready and willing to perform his part of contract? (ii) Whether the time was essence of the contract? SRJ 9 FA-74-10.sxw (iii) Whether Plaintiff is entitled to injunction as prayed for? 19. Since all the points are inter-linked with each other, I will answer these points together. As the learned counsel for the parties have tendered compilation of all the relevant documents, I deem it appropriate to dispense with calling for Record and Proceedings of the case under Order 41 Rule 11 of the Code of Civil Procedure, 1908. 20. Clause 2 of the agreement provided the payment schedule where-under, Plaintiff was to pay an amount of Rs.5,00,000/- after sanctioning of the loan from the bank. Plaintiff has examined PW-2 Shri Dinkar J.Khurjekar, Deputy Manager, State Bank of India, Main Branch, Pune Ex. 60. He deposed in his evidence that the Plaintiff had initially submitted loan proposal on 3 rd February, 2007. For non-compliance of certain formalities namely submission of relevant documents for sanctioning of loan, the proposal was not sanctioned. Plaintiff re-submitted the proposal on 19 th March, 2007. The said application is at Ex.47. The Plaintiff submitted No Objection Certificate on 26 th March, 2007 from Pratiknagar Co-operative Housing Society (Ex.42). The loan was sanctioned on 21 st May, 2007 along with the terms and conditions. He has produced letters at Ex.44 and 45 respectively. He further deposed that he personally contacted Defendant and informed her SRJ 10 FA-74-10.sxw about the sanctioning of loan and to execute deed of assignment. On 30 th May, 2007, Pay Order of Rs.4,00,000/- was prepared in the name of Defendant and mortgage deed at Ex.46 was got executed from Plaintiff. As Defendant did not execute the assignment deed, Pay Order was not handed over to her. On 30 th May, 2007, Pay Order was cancelled and after debiting the account of Plaintiff, new Pay Order of Rs.4,00,000/- was prepared. 21. From the evidence of PW-2 Dinkar J. Khurjeka, it is evident that Plaintiff initially submitted proposal for loan on 3 rd February, 2007. Since the relevant documents for sanction of loan were not submitted, the loan amount was not sanctioned. The No Objection Certificate from the society dated 26 th March, 2007 (Ex.42) and No Objection Certificate from the developer dated 27 th April, 2007 (Ex. 43) were supplied by the Defendant. The loan was eventually sanctioned on 21 st May, 2007. 22. As against this, the Defendant neither entered the witness box nor led any evidence whatsoever. Considering clause 3 of the agreement, it cannot be said that Plaintiff was at fault in not obtaining the loan. The bank did not sanction the loan earlier as requisite documents required by the bank were not available. If, at all, according to Defendant, the time was essence of the contract, she would have certainly issued the notice calling upon Plaintiff to complete the transaction or at SRJ 11 FA-74-10.sxw any rate, she would terminate the agreement. In order to prove that the time was essence of the contract, Defendant did not enter the witness box. Considering the conduct of the parties, after execution of the agreement of the sale, and the fact that the time which was reasonably required for sanctioning of the loan by the bank, it cannot be said that Defendant established that the time was essence of the contract. 23. The evidence of the Plaintiff and his witness also indicates that after sanctioning of loan, Pay Order dated 30 th May, 2007 was prepared. The PW-2 deposed that he informed Defendant about the sanction of loan proposal and called upon her to execute the assignment deed. Though the Defendant assured him, she did not execute the deed of assignment. On 30 th May, 2007, Pay Order of Rs.4,00,000/- was prepared in the name of Defendant and the mortgage deed at Ex.46 was got executed by the bank from Plaintiff. This also shows readiness and willingness on the part of the Plaintiff. 24. Mr. Patil submitted that Plaintiff did not establish receipt at Ex.55 which shows that he paid Rs.2,00,000/- in cash to the husband of Defendant. The evidence of the Plaintiff on this point remained un- challenged. There was no cross examination by the Defendant to suggest that no such payment was received by herself or by her husband. Defendant, as noted earlier, SRJ 12 FA-74-10.sxw has also not entered the witness box. She also did not examine her husband or any other witness to falsify the claim of Plaintiff on that point. Mr. Patil submitted that Plaintiff had issued cheque of Rs.2,00,000/- and Rs.3,00,000/-. Defendant deposited the cheque of Rs.2,00,000/- but it was dishonored on the ground of in- sufficient funds in the Plaintiff s account. Even after sanctioning of loan amount in the month of May, 2007, the Plaintiff never informed the Defendant to execute the conveyance and receive the balance consideration. It is only on 4 th August, 2007, the Plaintiff issued notice to the Defendant which shows that Plaintiff was not ready and willing to perform his part of contract. 25. I do not find any merit in this submission. As observed earlier, PW-2 deposed that he personally informed Defendant about the sanction of loan immediately after 21 st May, 2007 and called upon her to execute the assignment deed. Though Pay Order drawn in the name of Defendant was prepared, she did not come and execute the assignment deed. In these circumstances, it cannot be stated that Plaintiff was not ready and willing to perform his part of contract. 26. Shri Warunjikar also submitted that during pendency of the suit, the Trial Court passed order on 18 th December, 2007, permitting Plaintiff to deposit an amount of Rs.4,00,000/-. Pursuant to that order, Plaintiff made SRJ 13 FA-74-10.sxw an application on 16 th January, 2008 at Ex.28 for permission to deposit cheque of Rs.4,00,000/- in the name of Civil Judge Senior Division, Pune. On that application, the court passed the order on 16 th January, 2008, permitting the Plaintiff to deposit Rs.4,00,000/-. Accordingly, the Plaintiff deposited the amount of Rs.4,00,000/- in the trial Court. 27. Considering the evidence on record, I am of the opinion that the Plaintiff has established readiness and willingness. It also cannot be said that Plaintiff committed any default of clause 3 of the agreement. I do not find that the learned Trial Judge committed any error in decreeing the suit. 28. In view of the aforesaid discussion, I find no merit in this First Appeal and the same is liable to be dismissed. Hence, the First Appeal is dismissed with no order as to costs. 29. In view of dismissal of the First Appeal, Civil Application does not survive and the same is dismissed with no order as to costs.30. In view of dismissal of the First Appeal, nothing survives in Civil Application No.2384 of 2010 and the same is also dismissed with no order as to costs. SRJ 14 FA-74-10.sxw 31. On the oral application made by the learned counsel for the Defendant, this order shall remain stayed for the period of eight weeks from today subject to Defendant giving undertaking within two weeks from today to this Court undertaking therein that she as of today has not created any third party interest in respect of the suit flat so far and that she will not create third party interest. She will further give undertaking that in case she does not obtain suitable orders from the superior court within a period of eight weeks from today, she will hand over the vacant and peaceful possession of the suit premises to Plaintiff after the expiry of the period of eight weeks. (R.G.KETKAR,J.)