THE HON'BLE SRI JUSTICE K.C. BHANU APPEAL SUIT NO. 136 OF 2008 JUDGMENT: This appeal is directed against the judgment and decree, dated 30-11-2007, in O.S.No.1468 of 2005, on the file of the II Additional Senior Civil Judge, R.R. District at NTR Nagar, Hyderabad, whereunder and whereby the suit filed for specific performance of contract in respect of suit schedule plot was dismissed. 2. Appellants herein are the plaintiffs and the respondent herein is the defendant in the suit. 3. The averments of the plaint in brief are as follows: The defendant is the owner of the suit schedule property and he agreed to sell it to the plaintiffs for a sale consideration of Rs.9,50,000/- and executed agreement of sale on 15-10-2004 after receiving part of sale consideration of Rs.2,30,000/-. Subsequently, the plaintiff came to know that the title of the defendant was defective, in as much as one of his vendors is a minor and no permission was obtained from the District Court for the said transaction, dated 15-10-2004. The plaintiffs therefore questioned the defendant with regard to defect in title. Though the defendant furnished a copy of order in OP 871 of 2002 on the file of II Addl. District Judge, but it was a conditional one and obtained after the transaction dated 15- 10-2004. Though the defendant promised to rectify the defects, he was dodging the matter on one pretext or the other. On 20-06- 2005, the defendant got issued a legal notice to the plaintiffs calling upon them to pay the balance of sale consideration. The plaintiffs issued reply notice asking him to rectify the defects. The plaintiffs have always been ready and willing to perform their part of contract, but the defendant without clearing the defects in title demanded them to pay the balance of sale consideration only with a view to avoid execution of the sale deed in favour of the plaintiffs and alienating the property for higher price in favour of third parties. Hence, the suit. 4. The defendant filed written statement denying the averments made in the plaint. It is stated that the suit is not maintainable and there is no cause of action for filing the suit. The suit is filed only to extract money which was lawfully adjusted by the defendant on account of non performance of obligations by the plaintiffs in making payment of balance of sale consideration in terms of agreement of sale. The agreement is not enforceable for want of sufficient stamp duty and registration. Plaintiffs violated clause Nos. 1 and 7 of agreement of sale. As the plaintiffs failed to pay balance of sale consideration within the stipulated time of 55 days, the defendant got issued legal notice demanding them to pay the balance of sale consideration. The plaintiffs failed to perform their part of contract. The defendant informed the plaintiffs that he would adjust the advance amount of Rs.2,30,000/- towards the damage and compensation and in case of default, he would forfeit advance amount. Time is the essence of contract and the defendant sold the property since he was in need of money. After satisfying with the title of the property, the plaintiffs agreed to purchase the property. The agreement is not subsisting as it has become unenforceable in view of default made by the plaintiffs in paying balance of sale consideration. The suit is filed in view of escalation of prices of land. Hence, he prays to dismiss the suit. 5. Basing on the above pleadings, the following issues were settled by the trial Court: 1. Whether the time is the essence of suit contract of sale dated 15-10-2004? 2. Whether the plaintiff was ready to pay the balance of sale consideration? 3. Whether the plaintiff is entitled for the relief of specific performance as prayed for? 4. To what relief? 6. On behalf of the plaintiffs, P.Ws.1 and 2 were examined and Exs.A1 to A3 were got marked. On behalf of the defendant, D.W.1 was examined, but no documents were marked. 7. The trial Court after considering the oral and documentary evidence available on record, dismissed the suit. Aggrieved thereby, this appeal has been preferred by the plaintiffs. 8. Now the points for determination are; (i) whether the plaintiffs are entitled for enforcement of agreement covered under Ex.A1? (ii) whether the plaintiffs are entitled to ask for refund of earnest money even without there being any prayer? and (iii) to what relief? 9. Learned counsel appearing for the appellants-plaintiffs contended that the appellants are ready and willing to perform their part of contract, that the respondent-defendant did not come forward to rectify the defect in the tile and therefore, the plaintiffs need not pay any balance of sale consideration and hence, he prays to set aside the judgment and decree of the trial Court or in the alternative he prays for refund of earnest money paid at the time of agreement of sale. 10. On the other hand, learned counsel appearing for the respondent-defendant contended that there is no evidence to show that the plaintiffs were ready and willing to perform their part of contract from the date of agreement of sale till the date of disposal of the suit, that there was no alternative prayer for refund of earnest money, that as the plaintiffs have not come forward for execution of registered sale deed, the defendant got issued a notice duly forfeiting the advance amount of Rs.2,30,000/- under agreement of sale and therefore, the plaintiffs are not entitled even for refund of earnest money. 11. POINT NO.1: It is an admitted fact that Ex.A1 was executed by the defendant in favour of the plaintiffs agreeing to sell 183.33 square yards in Sy.No.11/A, Ward No.5, Block No.5, Sahebnagar Khurd village, Hayathnagar Mandal, R.R. District and the plaintiff paid advance of Rs.2,30,000/- and agreed to pay balance of sale consideration within 55 days. A specific issue has been framed as to whether the time is the essence of contract and that issue was held in favour of the plaintiffs. No cross-objections have been filed. Therefore, the question whether the time is the essence of contract or not is not a matter to be considered in this appeal. The grant of specific performance is a discretionary relief and that discretion has to be exercised judiciously. Under Section 16 (c) of the Specific Relief Act, 1963 (for short ‘the Act’) expressly provides that in a suit for specific performance, the plaintiff should aver and prove that he has been always ready and willing to perform his part of contract. Readiness and willingness cannot be treated as a strait-jacket formula. These have to be determined from the entirely of facts and circumstances relevant to the intention and conduct of the party concerned. A discretion can be drawn between readiness and willingness to perform a contract. Readiness may mean the capacity of the plaintiff to pay the balance money, but to determined the willingness of a party to perform his part of the contract, his conduct must be scrutinized. Unless it is shown that the plaintiff is always ready and willing to perform his part of contract from the date of agreement till the date of judgment, he is not entitled for grant of specific performance. In this case, mere stating that the plaintiffs have always been ready and willing to perform their part of contract is not enough to comply with Section 16 (c) of the Act. It must be shown that they have got sufficient means to pay the balance of sale consideration of Rs.7,20,000/-. Furthermore, the plaintiffs did not come forward to pay the remaining balance amount. The defendant got issued a legal notice under Ex.A2, for which there was a reply under Ex.A3 stating that there was defect in the title of the defendant. Even if there was some defect in the title of the defendant, the plaintiffs have no other go except to pay the balance of sale consideration or to rescind the contract. Therefore, there were no circumstances indicating that the plaintiffs were always ready and willing to perform their part of contract. Though it is not obligatory on the part of the plaintiffs to deposit the balance of sale consideration into Court, but to show their bona fides at least they would have deposited the amount into Court and requested the Court to keep the said amount in Fixed Deposit or they can show the bank account or any other account, which will be having sufficient means so as to pay the balance of sale consideration. Except saying that they are ready and willing to perform their part of contract, no other evidence was adduced by the plaintiffs to show that they are having enough money of Rs.7,20,000/- from the date of execution of agreement till the date of judgment delivered by the trial Court. So in the absence of any evidence, it cannot be said that the plaintiffs were ready and willing to perform their part of contract. Accordingly, this point is answered against the plaintiffs. 12. POINT NO.2: Coming to the alternative prayer for refund of earnest money, admittedly, there was no prayer sought for in the plaint for refund of amount. This Court in a decision reported in PUSHPAGIRI MUTT, BY ITS MANAGER V C.INDIRAMMA [1], while ordering refund though not specifically prayed for, held thus: “It is needless to say that the relief of specific performance is a discretionary relief and merely because it is lawful, automatically in all cases, such relief need not be granted. However, in the light of the fact that Ex. A-4 was issued, it can be taken that the defendant Mutt had received an amount of Rs.2000/- apart from Rs.500/- initial deposit on the date of auction, in total Rs.2500/- and it is also not in dispute that the said amount is lying with the defendant Mutt till today. It is no doubt true that in the facts and circumstances of the case, the relief of specific performance, at any stretch of imagination, cannot be granted in favour of the plaintiff. The defendant is Pushpagiri Mutt. A finding had been recorded that the auction was held otherwise in accordance with law and the other concerned Officers also were present and in pursuance of the auction, the amount had been deposited by the plaintiff and the amount is lying with the defendant Mutt. It is no doubt true that specifically the alternative relief of refund of the amount had not been prayed for. But however, in the plaint, relief (c) had been specified to grant such other relief or reliefs as the Hon'ble Court may deem fit and necessary in the circumstances of the case in the interest of justice. In view of the same, taking the peculiar facts and circumstances into consideration, since an amount of Rs.2500/- deposited by the plaintiff is lying with the defendant Pushpagiri Mutt from 10-1-1983 till today, it shall be just and equitable to order refund of the amount of Rs.2500/- with interest @ 6% per annum till the date of payment. Except granting this relief, no other relief can be granted. Accordingly, the Judgment and decree of the appellate Court are hereby modified and the Second Appeal is partly allowed to the extent indicated above. No order as to costs.” The parties are governed by the terms and conditions laid down under Ex.A1. There is no condition for forfeiture of the earnest money in case the plaintiffs commit default in payment of balance of sale consideration or not willing to perform their part of contract. So in the absence of any contract contrary to Ex.A1, the defendant is bound to refund the earnest money that was received by him because there is no dispute about execution of Ex.A1 and receipt of advance amount. Therefore, in the factual background of the case, it is equitable to direct the defendant to refund the advance amount of Rs.2,30,000/- to the plaintiffs because even if there are laches on the part of the plaintiffs in not coming forward to pay the remaining balance of sale consideration, that would not cause any loss to the defendant as admittedly, the value of the suit schedule property has been increased substantially from the date of execution of agreement of sale till today. Further, considering the fact that there was no forfeiture clause in Ex.A1, the advance amount of Rs.2,30,000/- received by the defendant can be refunded to the plaintiffs with simple interest at 6% p.a. and by granting the alternative relief, the defendant would not be in a disadvantage position or it would cause irreparable loss or injustice to him. Accordingly, this point is answered in favour of the plaintiffs. 13. POINT NO.3: In the result, the Appeal Suit is partly allowed directing the defendant to refund earnest money of Rs.2,30,000/- to the plaintiffs with simple interest at 6% p.a. from the date of agreement of sale i.e.,15-10-2004 till the date of realization. No order as to costs. 14. At request of the learned counsel appearing for the defendant, four months time is granted from today for payment of the amount, failing which, the plaintiffs can execute the decree. _______________ K.C. BHANU, J DATED: 23-08-2011 Hsd [1] AIR 2003 AP 379