f^^%Ei®-^<:5gtH.,' j?;l iSM&fe:&iitS.Ssl^S"'£^^?&'^;'!^£«;^t'i'^ "e»lll IN.THE HI&H COURTOFJUDICATUREATBILASPUR FIRST APPEAL N0 . ^^-/2007 APPELLANT: ^laintiff) •-^€^ ^^^y"'~ &EgPONDENT: ^(Plaintiff) ^'Shankarlal Btjreja, son Qf Shri Arjundas Bijreja, dged about 49 years, resident of Station Road, Sindhi Golony, Durg. i^ Vs -Ashok B Ahuja, son Late Bhagwan Das Ahuja, aged about 60 years, resiclent of "Civil Lihes, Raipur.l CiviT suit valued at • Rs. 24.00.600/- and. court fee affixed Rs.1,31,86^- Appeal valued at Rs. 24'Dp;60Q/^.<rnd court fee affixed Rs.l;3t,86Q/- APPEAL UN&ER SECTION 96 OF THE CObE OF CIVIL PROCE&URE. 1908 as ••'-T^'^: •u i :lsr s •sasi t£ HIGHCOURTOFCHHATnSGARHATBIIASPUR APPELLANT RESPONDENT F.A.No. 94/2007 Shankarlal Bijreja Versus AshokB.Ahuja c ^u ORDER For consideration Sd/- ^, -10-2010 HON'ELB SHRI I.M. QUDDUSI, J L, »c^—_ Sd/- I.M.Qiiddusi Judge Postfbr: 7 -10-2010 Sd/- N.K. Agrawal Judge ^^Ss ^.^^ ^' ~"\ fefe^a?. 1 SWfr'1 1 sy c y 't K-J^ mCSHCOURTOFCHiKAT'NSGARHATBH.ASPUR (F.A.NQ.94/S007' APPELLANT (PLAINTIFF) RESPONDENT (DEFENDANT) Shahkarlal Bijreja Versus AshokB. Ahuja DB:- HON. SHRILM. QUE)E>USIAND HONSHRIN.K.AGARWAL,,JJ PRfiSENT:- Shri B,F; Sharma, Adyocate for fhe appeUant. Shri D.S. Stu-ana with Shri Adhiraj Surana, Advocates for the responden.t. ORDER (^-10-2010) Per N.K. Aearwal, J Being aggrieved by the ji-idgment and decree dated 28t11 July, 2007 passed toy I?^ Additional District J^ (FTC), Raipur in CivH Suit No. 45-A/2004 dismissing the suit ffled by the appeUanf/plaintiff fbr specific perfbnnanee of the contract and permanent prohibitory injiinctibn against the respondents/defendants, the appellant has filed tliis appeal iinder Section 96 of the Code ofCiviLProcedure. Facts giving rise to this appeal briefly are as follows:- By an agreement fbr sell (Ex. P-1) dated 18-6-2003 entered, ;) --1 '. ' ' :^ . . ' '. into between the a|)pellaiit. as pureKaser^ a^ the respondent as vender, the respdndent agreed to seU the suit property cpmprising of Nazul Land and house No. 21/587 and 21/588 jjiew N6. 5/587 and 5/588)^ I^^ No. 363 and 372 areaabout 13,000 Sq.Pt., situated at Ram Sagar Para Ward N6. 5, Raipur Patwari Halka No. 6, Tehsil and Distf. Raipur at the rate of Rs. 185 per Sq^ for tptal ebnsideratiQn op Rs. 24,00,QQO/- along with ^godown standihg thereon. Prior to executibn of above SSs :3tsf: ^-^ % -sxy~~^ !ii'"?&fei.iA ^K^ ••^SSi^^,,:.;- L <riil /-• u. iu. agreement Ex. P-1, the appellant paid Rs. 5 lacs (Rs. 3 lacs iri cash and Rs. 2 lacs by two Gheques) as eamest money. Under Clause (1) of the said agreement, the sale deed was to be executed after getting entire amount of consideration within a period of sbc months. The expenses have to be bome by the purcha.ser/appellant. Under Clause (2), it was agreed upon between the parties that on appellant's direGtion, instead of one sale deed for the entire suit property, more than one sale deeds comprising ofpart of the suit property could be exeeuted in favour of the different purchasers at their pwn cost but sale deed was to be executed only after reeeiyingfull consideration amount. Under clause (3) if the purchaser so desires, he may get the suit land measured tbrough any architect or engineer for his own satisfaction and at his own eost. Under clause (5), performance of the agreenient was made essential within a period of sbe months from 26-5-20Q3. Under clause (6) it was agreed upon befrween the parties that vacant possession of the suit property mcluding the godown was to be handed over by the vender after getting full consideration before registration of the sale deed. On 8-11-2003, vide Ex. P-2, the appellant published pubUc notice inviting objections. Vide Annexure P-3 dated 19-11-2003, a notiee was senf calling upon the appeUant to get the sale deed executed in terms of the agreement Ex. P-1 latest by 26-11-2003 by paying Rs. 19 lacs i.e, balanGe ^onsideration amount else fhe agreeinent for sale would come tp an end and the respondent will be free to sell the above land to any other intendingpurchaser. ' In reply to the above nQtice, the appeUant sent reply Ex. P- 4 showirig his ihability t6 get the sale deed execyted on accoiint of non-CQOperation of the respondent in getting the suit property demarcated by nof supplying the l87 « ..^ V. appropriate documents and due to non-handing over possession of the vacant suit property to the appellant for the purposes of measurement. It was further mentioned in fhe above reply that despite several requests made by the appellant to execute fhe sale deed in part, i.e. proportionate to the amount paid by the appellant, the respondent is not executing the sale deed in part and thus had violated the terms of the agreement. The further reason given in the reply was that although some original documents were handed over to the appellant in the month of October but all the original documents were not handed over, however after gettmg fhe documents, the appellant has published public notice in the newspaper 'and also started verification of the title of the respondent over the suit property. It was further mentioned fhat in fact the appellant has paid Rs. 5,50,OOO/- instead of Rs. 5 lacs as mentioned by the respondent. Thereafter vide Ex. P-9 dated 15-12-2003 again a notice through his counsel was sent to the appellant infonning him about extension of time upto 31-12-2003 and also about receipt of further part consideration of Rs. 3,90,000/- in terms of two cheques. The appellant was also warned now not to violate the terms of the contract and get the sale deed executed after paying full consideration else the contract of sale would come to an end and the respondent will ibe free to sell out the suit property to any other intending purchaser and the amount paid would be forfeited. vi. In reply to the above notice, the appellant sent a reply dated 30-12-2003 vide Ex. P-10'repeating the same allegations and reasons for not getting the sale deed executed vide notice dated 21-1-2004. vii. Vide Ex. P-13, the appellant sent a notice intimating the respondent to get the suit property vacated from the tenant '>>. s. ~T~'y s i^, •^^,/./ i '\,ss:°y ^. ^ ^sl as per assurance dated 12-1-2004; to hand over him the possession of the suit property; to clarify fhe ownership of the suit property, and then execute the sale deed in appellant's favour within a period of 10 days after receiving balance consideration else the appellant will initiate legal action against the respondent. In this nbtice, it was mentioned that the appellant though Shrichand Wadhwa has handed over three cheques amounting to Rs. 4,30,000/- to the respondent and thus he has already paid Rs. 14 lacs toward the above agreement. The respondent vide reply dated 4-2-2004 (Ex. P-16) denied the allegations of receipt of Rs. 4,30,000/- in the form of three cheques through Shrichand Wadhwa, also intimated that fhe appellant was not having sufficient funds for getting the sale deed executed. viii. Further a notice was sent by fhe appellant dated 24-2- 2004 (Ex. P-18) and thereafter he preferred a suit for specific performance of contract on 16-3-2004 also claiming permanent injunction restraining the respondent from creating third party right over the suit property. ix. The respondent filed written statement inter alia denying the claim of specific performance of contract mainly on the ground : the appellant has not taken any steps within the time granted in the agreement as the time was essence of contract and the appellant was not ready and willing to get the sale deed executed. x. Leamed trial Courf on appre'ciation of evidence led, submissions made and material placed, dismissed the suit. Hence this appeal. 3. Shri B.P. Sharma, learned counsel for the appellant would contend that in case of sale of immovable property, time is never regarded as essence of contract; the respondent himself extended the period of limitation by 31st December, 2003; also received consideration amount '"^l.". •e 'L-. ^' in part after execution of agreement and before filing of the suit in the form of three cheques amounting to Rs. 4,30,000/-, the respondent is guilty of not performing his part of contractual obligation i.e. of delivering of vacant possession of the premises before the registration, tenants were in occupation of the premises even after fiUng of the suit and the plaintiff cannot be expected to purchase the property against the terms of the contract and with the burden which may amount to purchase of litigation wifh the tenants. Learned trial Court has failed to consider the evidence in its proper perspective inasmuch as the appellant has already deposited Rs. 14 lacs out of Rs. 24 lacs and showed his readiness and willingness to perform his part of the contract and it was the respondent who were not ready and willing to execute the sale deed even after receiving huge amount of Rs. 14 lacs as part considerafion amount. The conduct of the respondent was inequitable and is relevant in a case relating to specific performance of contract. For this, reliance has been placed on the judgments of Supreme Court in case of Bakisaheb Dayandeo Naik (dead) through Lrs and others -v- Appasaheb Dattatraya Pawar reported in 2008(4) SCC 464, SUvey and others -v- Arun Varghese and another reported in 2008 (11) SCC 45, Swarnam Ramachandran(Smt.) and another -v- AravacodeChakungal Jayapalan reported in 2004(8) SCC 689, ChandRani (Smt.)(Dead) by Lrs. - v- Kamal Rani (Smt.) (Dead) byLrs. reported in 1993(1) SCC 519, AIoka Bose -v- Parmatma Devi and others reported in 2009 (2) SCC 582. Shri Siirana, . leamed Counsel appearing for the respondent would support the judgment and decree passed by the trial Court and would contend that time was essence of the contract, the appellant was never ready to pay the entire consideration amount in terms of l9o c & the agreement of sale within the stipulated time even within the time extended by the respondent, on the contrary, he was always insisting upon delivery of possession before payment of entire amount of consideration and also insisting upon execution of sale deed in part in violation of the terms of the agreement, the respondent gave sufficient time to the appellant but the appellant was never ready and willing for payment of entire amount of consideration before obtaining possession of the suit property; also was not capable of payment of entire amount of consideration. He would further contend that as per admission of the appellant himself, he was not the sole purchaser of the suit property and the suit was not filed on behalf of all purchasers and, therefore, was incompetent. The payment of Rs. 4,30,000/- was never received by the respondent and the same was deposited by the appellant in the bank account of the respondent in order to show that the contract is still subsisting and in such a situation, the trial Court has rightly dismissed the suit. Shri Surana placed his reliance upon the judgment of Hon'ble Supreme Court in case of H.P. Pyarejan -v- Dasappa (Dead) by Lrs. and others reported in 2006(2) SCC 496, Bal Brishna and another -v- Bhagwan Das (Dead)by Lrs. and other reported in 2008(12) SCC 145 and A.C. Arulappan —v-Snat. Ahalya Naik reported in 2001AIRSCW 3046. ' £•' ' We have heard leamed coitnsel for the parties and perused the judgment and decree impu^ned and record of the trial Court. The core questions arise for determination in this case are : 1. Whether in the facts and circumstances of fhe case, the time was essence of contract ? il'a. i; c ^ /" ii. Whether the appellant had succeeded to prove his readiness and willingness to perform his part of contract within the meaning of Section 16-C of the Specific Reliefs Act, 1963 ? iii. Whether the appellant is entitled for a decree of specific perforraance of contract ? Let us exaraine the facts. As per the agreement, payment of entire consideration was to be paid by the appellant necessarily within six months from 26-5-2003. There is no condition in the agreement by which the respondent has to deliver the possession of the premises to the appellant for the purpose of demarcation, nor demarcation of the property was made essential before the execution of the sale deed or before pa5rment of entire consideration amount, on the contrary, it has been mentioned that if the purchaser so desires, he may get the suit land measured through any architect or engineer for his own satisfaction and at his own cost. The total description and identification of the property was not in dispute. The total consideration payable was Rs. 24 lacs. It was not mentioned that it would vary if on demarcation the land will found more or less in area. Admittedly, the tenants were in occupation of the suit premises on the date of execution of agreement of sale. Vide reply dated 25-11-2003 (Ex. P-4), 30-12-2003 (Ex. P-10), the appellant insisted upon deUvery of vacanf possession for the purpose of demarcation, at the same time insisted upon execution of sale deed of fhe area proportionate to the amount paid by the appellant. The above demand was in violation of the terms of the agreement Ex. P-1. In para 10 and 12 of the plaint, the appellant reiterated the same. In his statement, P.W. 1 Shankarlal has admitted that in absence of delivery of possession, he has not paid :;Swg;ATi,^^^^e^ii6!^a!^^^s^^'*i^;" •ffla i.^^-- ''!!&.. isis, ••la^s ~%s y L the entire amount of consideration. In para 16, it was also admitted that 3 cheques dated 12-1-2004 amounting to Rs. 1,00,000/-, Rs. 1,20,000/- and Rs. 2,10,000/- total Rs. 4,30,000/- were given to the defendant, without obtaining any receipt, nor the same was paid from his bank account and he is not aware from which account the same was paid. He further deposed in para 15 of his statement that he has verified the title of respondents before 8-11-2003 i.e. date of publication of public notice by him in the newspaper. In para 9 of his statement, it was stated that Shrichand Wadhwa, his wife and he himself were joint intending purchaser of the suit property having ea.ch 33% share of fhe suit property as per agreement (Ex. P-1). 7. P.W. 3 Shrichand Wadhwa who is by occupation a broker has admitted in para 5 of his statement that as p'er the agreement (Ex. P-1), registration of the sale deed was to be got executed within six months from 26-5-2003, also that he has received all the documents regarding suit property before expiration of above six months i.e. in the month of October, 2003. It para 8, it was stated that cheque of Rs. 6,00,000/- were given from account of Smt. Laxmi Devi Birej'a which is a joint account of his and Smt. Laxmi Devi Bireja. In para 9 of his statement, it has been categorically admitted that the respondent was ready to execute the sale 4eed after getting the entire sale consideration from the appellant but fhey were not ready to get the sale deed executed before measurement and getting possessiQn of the suit property. It was further stated by him in the same paragraph that he was not intending to purchase the suit property and the agreement was in the name of appellant. He further admitted in para 9 of his statement that cheque of Rs. 3, 90,000 were given by him to the respondent, although he 'fo4.»:'" ^' • - . '-^;.<: ("i. p; ' ^^;. ^^ ••^Rte, c .y .y ^ denied the suggestion that the appellant was not having siifficient money. 8. The Supreme Court in ease of Chand Rani (Supra) has held in para 25 of its judgment: "From an analysis of the above case-law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of fhe contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are : (i) From the express terms of the contract; (ii) From the nature of the property; and (iii) From the surrounding circumstances, for example: the object of making the contract." 9. The Supreme Court in the case bf Balasaheb Dayandeo Naik (supra), relying upon the constitution bench decision ofthe Supreme Court in the case ofChandRani (supra) has observed in para 10 and 11 of its judgment as under:- "10. In Chand Rani (Smt.) (dead) by LRs. Vs. Kamal Rani (Smt.) (dead) by LRs, (1993) 1 SCC 519, a Constitution Bench of this Court has held that in the sale of immoveable property, time is not the essence of the contract. It is worthwhile to refer the foUowing conclusion (SCC pp. 525, 527 and 528 para 19, 21 and 23): : "19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the conta-act. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real 10 ^4 %9^,/ ^•<TS^>'n=~'/r^'^-J^ c r'~ /' -<-' estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the ferms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequiyocal language." 21. In Govind Prasad Chaturvedi v. Hari Dutt Shastri (1977) 2 SCC 539 following the above ruling it was held at pages 543-544: (SCC para 5) '5... It is settled law that the fixation of the period within which the conta-act has to be performed does not make the stipulation as to time the essence of the contract. When a contracf relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract. [Vide Gomathinayagam Pillai v. Pallaniswami Nadar 1 (at p. 233).] It may also be mentioned that the language used in the agreement is not such as to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the egsence of the contract may be evidenced by circumstances which are suffieiently strong to displace the normal presiunption that in a contraet of sale of land stipulation as to time is not the essence of the contract.' ^r^ 11 [^ c -c' 23. In Indira Kaur (Smt) v. Sheo Lal Kapoor (1988) 2 SCC 488 ih paragraph 6 it was held as under: '6... The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract.' (emphasis in original) 11. It is clear that in the case of sale of immoveable property, there is no presumption as to time being the essence of the contract. '8. Even where the parties have expressly provided fhat time is the essence of the contract, such a stipulation will have to be read along with other provisions of the contract. For instance, if the contract was to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week, the work undertaken remains unfinished on the expiry of the time provided in the contract, such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract. In the case on hand, though the parties agreed that the sale deed is to be executed within six months, in the last paragraph they made it clear that in the event of failure to execute the sale deed, the eamest money will be forfeited. In such circumstances, the above-mentioned clauses in the last three paragraphs of the agreement of sale would render ineffective the specific provision relating to the time being the essence of contract. 12 [^^ >"' ^•"•^ £^''vi^f^"- 'iik h.s-.....,V ,:1?' c x In the case on hand, though the parties agreed that the sale deed is to be executed within sbc months, in the last paragraph they made it clear that in the event of failure to execute fhe sale deed, the eamest money will be forfeited. In such circumstances, the above-mentioned clauses in the last three paragraphs of the agreement of sale would render ineffective the specific provision relating to the time being the essence of contract." 10. The Supreme Court in case of SUvey and others (supra) has held:- "14. As regards the false plea of the defendants, the effect needs to be noted. It was pleaded that defendant 3 had gone to fhe house of Plaintiff 2 in Alleppey prior to receiving any letter from the plaintiffs and had spoken that they had told him that they were not keen on enforcing the application under Ext. A-l. But when examined as DW-1, the said Defendant 3 admitted that he had never met the plaintiff as pleaded in the written statement and that he or any other defendant had never gone to Alleppey to mmet Plantiff 2 at his residence to speak about the performance of the contract. The plea stated in the written statement was abandoned in evidence. In Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SpC 589] it was noted that the conduct of the defendant cannot be ignored while weighmg the question of exercise of discretion for decreeing or denying' a decree for specific performance. The High Court has, after analying the fafitual po^i|ion, come -IQ the conclysion that the defendants weee really not ready to perform their obligatfion in terms of the contract and had taken a false plea in the written statement." 13 (%?; 11 -I/ y /^--' . . 1 - -<^ 12. In case Of Swarani Raniachandran (supra), wtule interpreting SeGtion. 37 aiid 55 of the Contract Act, 1872, Hon'ble Apex Court has held that tune is presumed not t6 be Of essence of the cohtract relating to immovable property, but it is of the essence in contraets of reGonveyance or renewal of lease^ F'urther, a vender has np right to make tiine ofthe essence, unless lie is ready and willing to proceed to completiQri ajid secoridly, when the vendor purports to make time 6f the essenre piirGhaser must be guilty of suGb gi-oss default a§to entitle the vendor to^rescind the con act. Whethertte is pfthe essenee, is a question off^ intention; ofthe pai-ties. If depenfls •upon the facts and cu-cuinstances of each case, By applying tUe aibresaid legal prQpositioh laid dbwn by the Supreme Court m the dieta ofabove referred cases iri the facts arid GircumsfanGesdf the present case, it is crystal clear that the appeUant utterly failed to prove his readiness and willingness to perfbrm. his part of the contract. It cannot be over looked thaf the appeUant never came forward. with the entire amount of cohsideratiQn for gefting tUe sale deed executed in his favour. Every time; he insisfed ori delivety 6f possession beforesuch paytnent, also insisted fpr execution of sale deed in part in prpportion to fhe amount paid by him which was not justified. STitch an insistence could only tie regarded as trying 1o yary the •terrns of the agfeeinent. Qn the whole, the fransaetion failed prunarily on aGCount of non-paynient 6f entire ainpunt of consideratibn either within fhe time stipulated in the agreement pr within flie extendedtimei.e.till 31-12-2003. If oh this account it was treated as a breach it \vas understahdable and coulfl ,not be sajil^.o be unjusfr&ed. If yve anatyse the ambulit paid by the appeUant in part on various occasions, it appears thal the said arnount was also arranged tey ^-r-'L'^- ;"^.. rStey^ i!1 14 ts ^^ ::c f y: / 13. Shrichand Wadhwa i.e. brother-in-law of the appellant. It