IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No 1879 of 1984 For Approval and Signature: Hon'ble MR.JUSTICE D.C.SRIVASTAVA sd/- ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- GUNVANTLAL RATANCHAND Versus RAMESHBHAI P PATEL -------------------------------------------------------------- Appearance: MR PV NANAVATI for Petitioners MR MUKUND M DESAI for Respondent No. 1 UNSERVED-EXPIRED (N) for Respondent No. 2 DELETED for Respondent No. 3 RULE SERVED for Respondent No. 8 MR MK VAKHARIA for Respondent No. 13 -------------------------------------------------------------- CORAM : MR.JUSTICE D.C.SRIVASTAVA Date of decision: 13/09/2000 CAV JUDGEMENT 1 The plaintiffs-appellants have filed this First Appeal against the judgement and decree dated 31st January 1984 of Civil Judge (SD), Narol, partly dismissing the suit of the plaintiffs-appellants for specific performance of the agreement to sell but partly decreeing the suit of the plaintiffs-appellants against the defendants nos.8 to 12 directing them to refund the earnest money of Rs.20,000/- received by them from the plaintiffs with interest at the rate of 12% per annum from the date of the suit till realisation. The suit of the plaintiffs-appellants was dismissed against the defendants nos.1 to 7. 2 The brief facts giving rise to this appeal are as follows:- 3 Two plots bearing Nos.236/2 and 234/2 admeasuring 7986 sq. yards are situated in village Bodakdev, Taluka Dascroi, District Ahmedabad. These plots were owned by Parshottam Babarbhai Patel. These plots were undivided joint hindu family property. Defendants Nos.1 to 4 and deceased Parshottamdas Babarbhai Patel executed an agreement to sell in favour of the defendants nos.8 to 12 on 29.11.1971. Tweleve months' period was fixed for execution of the sale deed. Thus, the sale deed was to be executed by the defendants nos.1 to 4 and Parshottamdas Babarbhai Patel before 29.11.1972. On the basis of the aforesaid agreement to sell the defendants nos.8 to 12 in turn executed an agreement to sell in favour of the plaintiffs on 23.5.1972 and received Rs.20,000/- as earnest money from the plaintiffs. The time limit for the execution of the sale deed was fixed up to 20.11.1972. Under the terms and conditions of the agremeent to sell the defendants were required to produce title clearance and were to obtain necessary permission under Section 63 of the Bombay Tenancy Act. Another condition in the agreement to sell was that the defendants were to execute the sale deed in favour of the plaintiffs or any person as desired by the plaintiffs. On 17.11.1972 a supplementary agreement was executed by Parshottamdas Babarbhai Patel and the defendants nos.1 to 4 in favour of defendants nos.8 to 12. According to this agreement the time limit for execution of the sale deed was fixed as 3 months after cessation of Gujarat Vacant Land in Urban Areas Prohibition Alienation Act, 1972. Under the terms and conditions of the agreement the defendatns were required to produce title clearance and were to obtain necessary permission under Sec. 63 of the Bombay Tenancy Act. Another condition in the agrement to sell was that the defendants were to execute the sale deed in favour of the plaintiffs or any person as desired by the plaintiffs. On 17.11.1972 a suppplementary agrement was executed by Parshottamdas Babarbhai and the defendants nos.1 to 4 in favour of defendants nos.8 to 12. According to this agreement the time limit for execution of the sale deed was fixed as 3 months after cessation of Gujarat Vacant Land in Urban Areas Prohibition Alienation Act, 1972. Similarly defendants nos.8 to 12 executed agreement in favour of plaintiffs and extended the period for execution of the sale deed to two months after the provisions of the said Act ceased to remain in force vide agreement dated 8.11.1972. The said Act ceased to remain in force with effect from 12.8.1975. In this way, time limit given under the agreement dated 23.5.1972 stood extended up to 12.10.1975. Parshottam Babarbhai Patel expired on 26.10.1973. The defendants nos.1 to 4 and 6 and 7 are children of said Parshottam Babarabhai Patel. The defendant no.5 was the wiow of Parshottamdas Babarbhai Patel. In this way, according to the plaintiffs the transaction entered into by Parshottamdas Babarbhai Patel is binding upon the defendants nos.1 to 7. After 12.8.1975 when the Gujarat Vacant Land in Urban Areas Prohibition Alienation Act, 1972 ceased to remain in force, the plaintiffs asked the defendants to execute the sale deed. The plaintiffs were ready and willing to perform their part of the contract but the defendants did not perform their part of the contract and failed to execute the sale deed and thereby committed breach of the contract and defendants nos.1 to 7 tried to sell the land to other persons. Consequently, the plaintiffs published a notice in daily newsppare "Gujarat Samachar"on 16.11.1975 indicating their intention to purchase the land and disclosing the agreement to sell subsisting in their favour. Thereafter Urban Land (Ceiling & Regulation) Act, 1976, came into force on 17.2.1976. The plaintiffs asked the defendants to obtain the requisite permission from the competent authoirty under this Act to execute the sale deed but the defendants did not obtain any such permission. Accordingly, suit was filed by the plaintiffs against the defendants claiming specific performance of the agreement to sell, handing over of possession, refund of earnest money amounting to Rs.20,000/- and damages amounting to Rs.75,000/- with interest at the rate of 9% per annum. 4 The defendants nos.1,k 2, 4, 6 and 7 in their written statement contested the suit inter alia on the ground that the suit is not maintainable, that the suit is time-barred and that there is no privity of contract between them and the plaintiffs hence the plaintiffs are not entitled to relief under Specific Relief Act or even in the alternative they cannot claim refund of the earnest money nor they can claim damages from them. It is also pleaded that the defendants nos.2 and 3 being minors, the alleged agreement to sell is not binding on them. They have also deneied execution of the agreement to sell and pleaded that it was in connection with money lending transaction. 5. Defendants nos.8 to 12 despite service of summons on them remained absent. Hence, the suit proceeded against them ex parte. 6. The trial Court found that the defendants nos.1 to 4 and Parshottamdas Babarbhai Patel executed an agreement to sell dated 29.11.1971 in favour of the defendants nos.8 to 12. It further found that the defendants nos.8 to 12 executed agreement to sell dated 23.5.1972 in favour of the plaintiffs and accepted Rs.20,000/- towards earnest money. It further found that the writings in the nature of supplementary agreement dated 17.11.1972, 18.12.1972 and 13.7.1973 were proved to have been executed as alleged by the plaintiffs. The trial Court however found that the plaintiffs failed to establish their readiness and willingness to act in accordance with the terms of the contract, hence, they are not entitled to the specific performance of the contract. Regarding refund of the earnest money the trial Court found that in the alternative the plaintiffs are entitled to refund of Rs.20,000/- as eanrest money only from the defendants nos.8 to 12. It was further found by the trial Court that the plaintiffs are not entitled to damages amounting to Rs.75,000/- because the contract itself was void. On the plea of limitation, the trial Court found that the suit was within limitation. It repelled the defendants' plea that the contract is not binding upon the defendants nos.2 and 3. The trial Court further found that the suit is not maintainable against defendants nos.5 to 7. The last finding of the trial Court regarding binding nature of the agreement dated 23.5.1972 on the defendants nos.1 to 7 has been in negative. With these findings, the aforesaid judgement and decree was passed by the trial Court against which the present appeal has been filed. 7 In this appeal, the defendants nos.2 and 3 2ho were minors have been deleted. The defendant no.5 died during the pendency of the suit and her legal representatives were brought on record. Likewise, the defendant no.10 also died during the pendency of the suit and his legal representatives were brought on record. Respondent no.13 was impleaded during the pendency of the appeal alleging that subsequent agreement to sell was executed by the defendants nos.1 to 7 in his favour. 8 During the pendency of the appeal, learned counsel for the respondent no.13 stated that he has received the earnest money as well as the sale consideration from the remaining defendants and that he will not press anymore the agreement to sell executed in his favour. Similar statement was given by the other contesting respondents. Consequently, none appeared on behalf of the respondent no.13 at the time of hearing of appeal. 9 The defendants nos.8 to 12 neither appeared before the trial Court nor before this Court in this first appeal. As such, Shri P.V. Nanavati, learned counsel for the appellant and Shri M.M. Desai, learned counsel for the respondents nos.1 to 7 with consequent deletion of respondents nos.2 and 3 were heard and the record was examined. 10 I find substance in the contention of Shri P.V. Nanavati that the trial Court has not recorded finding with reasons that the plaintiffs were not ready and willing to perform their part of the obligation under the contract. Consequently, this could not be a ground for dismissing the suit for specific performance of the agreement to sell. A casual finding has been recorded by the trial Court that "even if we presume for the sake of arguments that the plaintiffs were ready and willing to perform their part of the contract, they cannot enforce a void contract." As such, the finding of the trial Court that the plaintiffs were not readyand willing to perform their part of the contract is without any evidence and reasoning and such finding cannot be sustained. From the evidence on record it transpires that the plaintiffs were ready and willing to peform their part of obligation under the contract and when they came to know that the property was going to be sold to some other person they gave public notice in daily newspaper Gujarat Samachar on 16.11.1992, which shows that the existence of the agreement to sell in their favour was disclosed and the public was warned not to purchase the property. There is nothing on record to show that the plaintiffs were not ready and willing to perform their part of the contract. As such, this finding of the trial Court is against the evidence on record and is also without any evidence and reason and the same is required to be quashed and set aside. The finding of the trial Court regarding the limitation of the suit was not challenged by the learned counsel for the respondent. In view of the extended period given in the supplementary agreement to sell, the trial Court rightly concluded that the period of limitation will be computed from 12.11.1975 inasmuch as The Vacant Land in Urban Areas (Prohibition of Alienation) Act ceased to remain in force with effect from 12.8.1975. The suit was filed on 16.4.1977. It was thus a suit within limitation and the trial Court was justified in holding that the suit was within the period of limitation. There is clear averment in para 8 of the plaint that the plaintiffs were and are always ready and willing to act as per the said agreement and they had informed this fact often to the defendants. There is thus averment in the plaint regarding the plaintiffs' readiness and willingness to perform their part under the contract and also there is evidence to that effect from the side of the plaintiffs. There was thus effective compliance of the provisions of Section 16(c) of the Specific Relief Act. 11. The trial Court has rightly held from the evidence on record that the defendants nos.1 to 4 and Parshottam Babarbhai Patel had executed the agreement to sell dated 29.11.1971 in favour of the defendants nos.8 to 12 stipulating to execute the sale deed within a year by making title clear. The trial Court has rightly repelled the case of the defendants that it was not an agreement to sell rather it was a money lending transaction. From the agreement to sell nothing is indicated that it was a money lending transaction nor the ingredients ofloan given and taken are flowing from the said agreement. Consequently, the findingof the trial Court on issue no.1 requires no interference and it is confirmed. 12 Similarly, the findings of the trial Court that the defendants nos.8 to 12 had executed an agreement to sell dated 23.5.1972 stipulating to clear title by 20.11.1972 and had accepted Rs.20,000 towards earnest money isalso justified from the evidence on record and this finding could not be challenged by the learned counsel for the respondents. Consequently, the findings of the trial Court on issue no.2 have also to be confirmed. 13. Likewise, the trial Court has rightly concluded from the evidence on record that the writings dated 17.11.1972, 18.12.1972 and 13.7.1973 were duly executed. Through these writings the period for execution of the sale deed was extended. These are in the nature of supplementary agreements. As such no interference on findings of the trial Court on issue no.3 is likewise required. 14. For the reasons given above, the finding of the trial Court on issue no.4 regarding the plaintiffs' readiness and willingness to perform their part of the obligation under the contract is set aside. 15. Findings of the trial Court on issue no.8 had been confirmed in the foregoing portion of the judgement where it has been held that the suit is not barred by limitation. 16 The trial Court has rightly concluded that the agreement in question is binding on the defendatns nos.2 and 3. It has come in evidence that the property was ancestral in the hands of Parshottam Babarbhai Patel. The defendants nos.2 and 3 though minors were coparceners in the joint hindu family and as such the action of the karta of the Joint Hindu Family in executing the agreement to sell will bind them. There is no evidence on record that hte action of the Karta was not for legal necessity or for the benefit of the minors. As such the finding of the trial Court on issue no.9 also requires no interference. It is further clear that the agreement to sell is binding on defendants nos.2 and 3. Moreover, these defendants were deleted subsequently. Consequently, such finding becomes redundant. 17 The trial Court has rightly held that the suit is maintainable against the defendants nos.5 to 7. They also being members of the coparcenery and joint hindu family are bound by the action of the karta. As such findings of the trial Court on isue no.11 also require no interference. 18 The case of the respondents nos.1 to 7 inter alia was that the subsequent agreement dated 23.5.1972 between the defendants nos.8 to 12 and the plaintiffs is not binding on them because they were not parties to it. Shri M.M. Desai has argued that there is no privity of contract between the plaintiffs and the defendants nos.1 to 7, hence, the contract cannot be specifically enforced. Likewise, he has contended that no earnest money was taken by the respondents nos.1 to 7 from the plaintiffs, hence, they are not liable to refund any earnest money to the plaintiffs. Likewise, he contended that in the absence of privity of contract between the plaintifss and these respondents, the plaintiffs cannot claim any damages for breach of contract against these respondents. The trial Court under issue no.12 has held that the agreement dated 23.5.1972 is binding ont he defendants nos.1 to 7. This finding cannot be assailed for the obvious reason that here was one of the conditions in the agreement to sell dated 29.11.1971 executed by the defendants nos.1 to4 and Parshottamdas Babarbhai Patel that they will execute the sale deed in favour of the defendants nos.8 to 12 or 12 direct. Consequently, the agreement dated 23.5.1972 between the plaintiffs and defendants nos.8 to 12 is binding upon the defendants nos.1 to 7. As such, the findings of the trial Court on issue no.12 hardly requires any interference which is hereby confirmed. 19 Now the first point for consideration in this appeal whether the plaintiffs are entitled to get a decree for specific performance of agreement to sell. The trial Court found that the plaintiffs are not entitled to decree for specific performance of contract. Several grounds had been given by the trial Court in support of its conclusion. Those findings and reasonings have been assailed by Shri P.V. Nanavati, learned counsel for the appellants. 20 Before appreciating the contentions raised by Shri Nanavati, it has to be seen whetehr the affidavit and annexures annexed to the affidavit (page no.61) dated 11.8.2000 can be admitted in evidence in this appeal. Needless to say that there is no application under Order 41 Rule 27 of CPC by the appellant seeking permission to adduce additional evidence in the nature of affidavit and domentary evidence in appeal. Except the provision of Order 41 Rule 27 of CPC there is no other provision in the CPC under which appellant can as of right tender affidavit or additional documentary evidence. Mere tender of such document or affidavit does not amount that it has been admitted as additional evidence unless an application under Order 41 Rule 27 of CPC is moved and ingredients of the siad Order are satisfied and the permission of the Court is obtained for filing additional evidence, the appellant cannot as of right file additional evidence in appeal. Even by moving an application under Order 41 Rule 27 of CPC the appellant cannot be permitted to file additional evidence as of right. Such additional evidence can be accepted only on three grounds mentioned in Order 41 Rule 27 of CPC. It has not been disclosed in the affidavit as to why the documents tendered could not be filed earlier. Similarly it is not alleged that these documents were tendered during trial but were rejected. Likewise, it is not disclosed in the affidavit that the additional evidence will help the appellate Court in pronouncing the judgement. Additional evidence cannot be admitted for filling in lacunae in the case of a party. If the appellate Court thinks that for removal of any lacunae in evidence some additional evidence, may be oral or documentary, is required then it can permit such additional evidence to be brought on record and that too for pronouncing effective judgement by the appellate Court. Shri Nanavati has referred to the Supreme Court pronouncement in M.M. QUASIM V. MANOHAR LAL SHARMA AIR 1981 SC 1113. However, this case does not help Shri Nanavati that he can adduce additional evidence in appeal without moving an application under Order 41 Rule 27 of CPC. Even in this it was laid down by the Apex Court that application under Order 41 Rule 27 of CPC has to be moved and application so drawn up and affidavit sworn is sufficient compliance of ORder 41 Rule 27 of CPC. Thus, firstly there is no application under Order 41 Rule 27 of CPC, hence, additional evidence cannot be accepted. Moreover, the evidence on record is sufficient to pronounce effective judgement hence also additional evidence cannot be permitted to be taken on record. Thirdly, there is no lacuna in the evidence on record hence also additional evidence cannot be permitted. 21 One of the contentions of Shri Nanavati was that time is not of the essence of the contract and therefore decree for specific performance could not have been refused by the trial Court. The trial Court has not considered this aspect of the matter whether the time was of the essence of the contract or not. However, the law on the subject has been clarified by the Apex Court in its two decisions. In Govind Prasad Chaturvedi v. Hari Dutt Shastri reported in AIR 1977 SC 1005 the Supreme Court has laid down that where time is not of the essence of the contract and the plaintiff is ready and willing to perform his part of the contract the decree for specific performance of the contract has to be granted. 22 In M/s Hind Constructions, Contractors v. State of Maharashtra AIR 1979 SC 720 the Apex Court has laid down that the question whether or not time was of the essence fot he contract would esentially be a question of the intention of the parties to be gathered from the terms of the contract. Even where parties have expressly provided that the time is of the essence of the contract, such stipulation will have to be read along with other provisions of the Contract and such other provisions made on construction of the contract excluding the inference that the completion of the work by the particular date was intended to be fundamental. Thus, according to the Apex Court, the question whether time was of the essence of the contract is to be decided with reference to the intention of the parties and also with reference to the agreement between the parties. The intention of the parties is therefore primary consideration for determining whether the time was of the essence of the contract or not. 23 In CHAND RAVI V. KAMAL RAVI AIR 1993 SC 1742 the Apex Court has held that in the case of sale of immovable property there is no presumption as to the time being the essence of the contract. Even if it is not the essence of the contract, the Court may infer that it is to be peformed in a reasonable time if the conditions are (i) from the express terms of the contract, or (ii) from the nature of the property and (iii) from the surrounding circumstances, for example, the object of making the contract. 24 In the light of the afoersaid guidelines evidence on record has been examined and it is found that the time was not of the essence of the contract and the parties never intended that the time shall be the essence of the contract. No doubt, time limit has been prescribed in the agreement to sell but there was further stipulation that necessary permission under the Bombay Tenancy and Agricultural Lands Act was to be obtained and that subsequent supplementary agreements were also executed on 17.11.1972, 18.12.1972 and 13.7.1973 extending the period during which the sale deed was to be executed. Naturally, some time was required for obtaining permission from the competent authorities and in view of these and supplementary agreements it can be held that the time was not of the essence of the contract. Moreover, the suit was not dismissed by the trial Court on the ground that time was of the essence of the contract. Hence this contention on the facts and circumstances of the case has only an academic value. 25 On the point of seeking permission of the competent authority under Section 63 of the Bombay Tenancy Act and under Urban Land (Ceiling & Regulation) Act, 1976, Shri Nanavati contended that the judgement of the trial Court is erroneous and even if permissions under these Sections were not obtained, conditional decree for specific performance of contract could have been granted. He further contended that reliance of the trial Court on the judgement of this Court reported in 19 GLR 920 does not hold water in view of the subsequent Full Bench pronouncement of this Court in Shah