FA/750/1994 1/32 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 750 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE P.B.MAJMUDAR ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== HUSENABIBI WD/O AMIRBHAI YASINBHAI AND ANOTHER Versus ABDULMIYA KASAMMIYA KURESHI AND OTHERS ====================================== Appearance : MR HARIN P RAVAL for Appellants. NOTICE SERVED for Respondents No.1 - 4, 4.2.2, 4.2.3, 4.2.4, 4.2.6,4.2.7 MR AK TRIVEDI for Respondent no.1. PARTY-IN-PERSON for Respondent no. 4.2.1 MS HINA DESAI for Respondent no. 4.2.5 ====================================== CORAM : HONOURABLE MR.JUSTICE P.B.MAJMUDAR Date : 14/12/2006 ORAL JUDGMENT 1) By filing this Appeal under Section 96 of the Civil Procedure Code, the appellants have challenged the judgement and decree of of the FA/750/1994 2/32 JUDGMENT learned Judge, City Civil Court, Ahmedabad dated 15-2-1994 passed in Civil Suit No.3399/1985. By the aforesaid judgement and decree, the learned trial Judge has dismissed the suit filed by the appellants – plaintiffs for getting decree for specific performance of the suit agreement. It is the case of the plaintiffs that there is a property belonging to the defendants no.1 to 3, which is situated in Dariapur Ward No.1 in Bukhara Mohalla, description of which is given in para 1 of the plaint. The plaintiffs were occupying first floor in the suit house as tenants. The said tenanted portion is having Municipal Census no.2724/1 and 2724/2. It is the case of the plaintiffs that they were occupying the aforesaid portion as a tenant of defendant nos.1 to 3. It is the case of the plaintiffs that defendants no.1 to 3 wanted to sell the suit property and, therefore, they executed an agreement to sell in favour of the plaintiffs on 28-5-1982 and earnest money of Rs.2,800/- was paid by the plaintiffs to said defendants No.1 to 3. As per the case of the plaintiffs, total consideration was fixed at Rs.28,000/- and the said Banakhat was also got registered and sale deed was to be executed within six months. The defendants No.1 to 3 were supposed to get the property marketable by getting title clearance within the aforesaid period. The property was also required to be cleared from the ULC Authority within a period of six months from the date of agreement to sell and necessary permissions were also required to be taken by defendants No.1 to 3 from the ULC authority. After getting such permission from the ULC authority, sale deed was to be executed within a period of 90 days by defendants no.1 to 3. 2) It is the case of the plaintiffs that defendants no.1 to 3 have failed to satisfy the plaintiffs about the title clearance of the property. Thereafter, the plaintiffs gave a notice to defendants no.1 to 3 on 21-12- 1982 asking them to inform the plaintiffs whether the title of the FA/750/1994 3/32 JUDGMENT property is clear and marketable and whether it is free from all encumbrances and if it is so, to execute the sale deed in favour of the plaintiffs. As per the averments made in paragraph 5 of the plaint, said notice was received by defendants no.1 to 3 on 24-12-1982. As per the averments made in paragraph 6 of the plaint, defendants no.1 to 3 sent a notice dated 20-12-1982, which was received by the plaintiffs on 27-12- 1982, whereby defendants no.1 to 3 pointed out to the plaintiffs that Banakhat in question is cancelled. Thereafter, defendants no.1 to 3 sent a letter of attornment dated 3-1-1983 informing the plaintiffs that the property in question is sold to defendant no.4. As the defendants no.1 to 3 have not executed the sale deed in favour of the plaintiffs, the plaintiffs filed aforesaid suit for specific performance of agreement to sell dated 28-5-1982. The plaintiffs have asked for declaration to the effect that the sale deed executed by defendants no.1 to 3 in favour of defendant no.4 dated 3-1-1983 may be held to be illegal and not binding to the plaintiffs and it was also prayed that a decree may be granted asking defendants no. 1 to 3 to act as per the agreement dated 28-5-1982 and for directing defendants no.1 to 3 to execute sale deed in favour of the plaintiffs in connection with agreement to sell dated 28-5-1982. 3) The said suit was resisted by defendants. So far as defendants no.1 to 3 are concerned, they have filed their written statement at Exh.28 contending, inter alia, that the plaintiffs were not ready and willing to perform their part of the contract and the time was essence of the contract. It is also contended that though necessary documents were shown to the plaintiffs with regard to title clearance of the suit property, the plaintiffs have never tried to pay the remaining consideration and, because of that the Banakhat in question was cancelled by said defendants, therefore, suit was required to be dismissed. It is the say of the said defendants in their written statement that the plaintiffs were FA/750/1994 4/32 JUDGMENT never ready and willing to perform their part of the contract and even though the plaintiffs were informed by letter dated 14-6-1982 that it is not necessary to take permission under the ULC Act, yet the plaintiffs have not taken any steps for paying the remaining amount. On this and other such grounds, the suit is resisted by the original owners, defendants no.1 to 3. 4) Defendant no.4, who is the purchaser of the property in question by way of a registered sale deed, has also filed her written statement at Exh.20, contending inter alia that she had no knowledge about the suit Banakhat till she received notice from the plaintiffs on 11-1-1983. It is the say of defendant no.4 that she is a bona fide purchaser for value without notice. It is the say of the said defendant that agreement to sell executed by the original owners in favour of the plaintiffs was already cancelled by the original owners and, thereafter, sale deed was executed in favour of defendant no.4. On these and such other averments, the suit was resisted by defendant no.4. 5) During the pendency of the suit, original defendant no.4 has died and her heirs were brought on record. 6) Learned trial Judge framed various issues at Exh.49 and after considering oral and documentary evidence on record, came to the conclusion that it is proved that defendants no. 1 to 3 had executed an agreement to sell in favour of the plaintiffs on 28-5-1982, which is a registered agreement. However, learned trial Judge found that the plaintiffs have failed to prove that defendants no.1 to 3 had committed breach of suit agreement. Learned trial Judge also found that the plaintiffs were not ready and willing to purchase the suit property. Learned trial Judge also found that the sale deed executed by defendants FA/750/1994 5/32 JUDGMENT no.1 to 3 in favour of defendant no.4 is not illegal or fraudulent document. Learned trial Judge also found that the time was essence of the contract. It is also found that the plaintiffs have committed breach of the terms of Banakhat. Accordingly, learned trial Judge has dismissed the suit. Against the aforesaid decree of the trial Court, original plaintiffs have preferred this First Appeal under Section 96 of the Civil Procedure Code. 7) Mr.Harin Raval, learned advocate for the appellants submitted that the plaintiffs have proved their case for getting decree for specific performance of the suit agreement and that the plaintiffs were always ready and willing to perform their part of the contract. It is submitted by Mr.Raval that time was never the essence of contract. It is further submitted by Mr.Raval that since defendants no.1 to 3 had not tried to clear the title of the suit property within a period of six months, it was not obligatory on the part of the plaintiffs to pay remaining consideration within the said period. It is submitted by Mr.Raval that after the plaintiffs sent a notice dated 21-12-1982, which the defendants had received on 24-12-1982, the defendants sent a letter dated 20-12- 1982, which was received by the plaintiffs on 27-12-1982. It is submitted by Mr.Raval that aforesaid letter, which is at Exh.66, was sent by UPC, whereby defendants no.1 to 3 have pointed out to the plaintiffs that since the plaintiffs have not paid the remaining consideration, suit Banakhat is hereby cancelled. Mr.Raval further submitted that the said letter was received by his client on 27-12-1982, therefore, it can be presumed the said letter must have been written after 24-12-1982, i.e., after receiving the letter written by the plaintiffs, which was sent on 21- 12-1982 and which was received by defendants no.1 to 3 on 24-12-1982. Mr.Raval also submitted that the agreement in favour of his clients was never cancelled by defendants no. 1 to 3. Mr.Raval also submitted that, FA/750/1994 6/32 JUDGMENT thereafter, within a very short time, a sale deed was executed by defendants no.1 to 3 in favour of defendant no.4, and, therefore, the learned trial Judge should have passed a decree for specific performance in favour of the plaintiffs and the trial Court should have set aside the sale deed executed in favour of defendant no.4. Mr.Raval further submitted that defendant no.4 cannot be said to be a bona fide purchaser for value without notice, because since the suit banakhat was a registered document, even if defendant no.4 may not have actual notice, it can be presumed that he is having constructive notice about the Banakhat. Mr.Raval further submitted that the trial Court should have used its discretion appropriately and instead of refusing the decree for specific performance, trial Court should have granted the same. 8) Mr.Raval further submitted that considering the oral as well as documentary evidence on record, it can be presumed that the plaintiffs were always ready and willing to perform their part of the contract althroughout but since the original owners (defendants no.1 to 3) did not satisfy the plaintiffs that the title of the property in question is clear and marketable, it was not obligatory on the part of his clients to sent remaining amount of consideration within the stipulated time of six months. It is also submitted by Mr.Raval that since the property in question was mortgaged with Ahmedabad Peoples Cooperative Bank, till the mortgage was redeemed by defendants no.1 to 3, the plaintiffs were not required to perform their part of the contract. It is also submitted by Mr.Raval that since defendants no.1 to 3 have not informed the plaintiffs that the property is redeemed from mortgage, his clients were not required to pay the remaining amount of consideration within a period of six months and, therefore, it cannot be said that his clients have committed breach of the suit agreement. Mr.Raval also submitted that as per the abstract of the property register, which is at Exh.76, the suit FA/750/1994 7/32 JUDGMENT property can be said to have been cleared from the mortgage and as per the said abstract of property register, there is an entry dated 22-9-1982 to the effect that as per the letter of the bank dated 15-7-1982, the property is redeemed from mortgage. It is also the argument of Mr.Raval that after the notice of the plaintiffs at Exh.65, which is dated 21-12- 1982, defendants no.1 to 3 gave a notice wherein deliberately earlier date is mentioned and it is informed to the plaintiffs by defendants no.1 to 3 that agreement to sell is cancelled by them as the plaintiffs have not tried to perform their part of the contract. As pointed out earlier, it is argued by Mr.Raval that if really said letter was dated 20-12-1982, it would not take seven days to reach to the plaintiffs, as it was received by the plaintiffs on 27-12-1982. Mr.Raval further submitted that in a hot hurry defendants no.1 to 3 have executed sale deed in favour of defendant no.4. It is further submitted by Mr.Raval that defendants no.1 to 3 have deliberately sent aforesaid notice dated 20-12-1982 by UPC so that there may not be any cogent evidence available to show as to when said notice/letter was posted. Mr.Raval further submitted that defendants no.1 to 3 executed the sale deed in favour of defendant no.4 on 3-1-1983, for which a stamp was purchased on 1-1-1983 and, thereafter, defendants no.1 to 3 gave attornment notice on 3-1-1983, which was replied by the plaintiffs on 11-1-1983, which is at Exh.67. It is submitted by Mr.Raval that in said reply, the plaintiffs have clearly stated that the Banakhat is in existence and defendants no.1 to 3 should execute the sale deed in their favour. It is also stated in said reply that attornment notice given by defendants no.1 to 3 is not valid and legal. Mr.Raval has also relied upon oral and documentary evidence in support of his submissions. 9) So far as original owners (defendants no.1 to 3) are concerned, nobody has remained present on their behalf before this Court. So far as FA/750/1994 8/32 JUDGMENT original defendant no.4 is concerned, she has already expired, however, her husband – Gulam Mohammed Musabhai, who is defendant no.4/1 has appeared in person and submitted that he is a bona fide purchaser for value without notice. It is submitted by him that he was never aware about any agreement between the original owners and plaintiffs. It is submitted by defendant No.4/1 that the plaintiffs were never ready and willing to perform their part of the contract. It is submitted by him that the plaintiffs were never in a position to purchase the property in question, however, subsequently, when sale deed was executed in his favour, then the plaintiffs have tried to get the property on the basis of the agreement to sell in question. It is submitted by him that the trial Court has rightly appreciated documentary and oral evidence on record and, therefore, the appeal is required to be dismissed as there is no substance in the appeal. 10) On behalf of one of the heirs of original defendant no.4, learned advocate Ms.Hina Desai, has appeared through legal aid and submitted that the trial Court has rightly declined the relief for specific performance of the suit agreement. She further submitted that it cannot be said that the trial Court has exercised its discretion arbitrarily or contrary to law. It is submitted by her that this is not a case in which the decree for specific performance can be granted as during the time limit of the suit agreement, the plaintiffs have never tried to assert their rights nor they have taken any steps for performing their part of the contract. It is also submitted by her that the plaintiffs have never made any attempt for getting the sale deed executed in their favour. It is argued by Ms.Desai that the plaintiffs had no intention to purchase the property. It is submitted that under these circumstances, the appeal is required to be dismissed. FA/750/1994 9/32 JUDGMENT 11) Mr.Raval alternatively prayed that, in any case, the Court may direct defendants no.1 to 3 to pay appropriate compensation to the plaintiffs for committing breach of the agreement in question. 12) I have heard learned advocates as well as party-in-person in detail. I have also gone through the oral as well as documentary evidence on record. The question, which is required to be considered by this Court in this appeal is whether the plaintiffs are able to prove that they were ready and willing to perform their part of the contract and whether decree for specific performance is required to be granted by considering the evidence on record or whether any amount of compensation can be awarded in favour of the original plaintiffs. 13) Before answering the aforesaid questions, reference is required to be made to the agreement to sell, which is at Exh.64. Said agreement is dated 28-5-1982. As per the aforesaid agreement, defendants no.1 to 3 agreed to sell the property to the plaintiffs for Rs.28,000/- and at the time of executing said agreement, the plaintiffs had paid Rs.2,800/- in cash to defendants no.1 to 3. As per clause 3 of the said agreement, time limit fixed for performance of the Banakhat is six months. It is provided in the said agreement that within said time limit, sellers were to satisfy the plaintiffs about the title clearance of the suit property. In Clause 4 of the agreement, it is provided that within the aforesaid period, the sellers were required to obtain necessary permission under the ULC Act, 1976 for selling the property, and after getting such permission from ULC authority, sale deed was to be executed. In Clause 6 of the agreement, it is provided that within the stipulated time of six months, if the sellers satisfy the purchasers about the title clearance of the property and obtains necessary permission under the ULC Act, and yet the purchasers (plaintiffs) fail to get the sale deed executed within the stipulated time, FA/750/1994 10/32 JUDGMENT the Banakhat shall stand cancelled and the amount paid towards the earnest money shall be forfeited. Said agreement is signed by the sellers as well as purchasers and some witnesses. 14) It is not in dispute that the plaintiffs and defendants no.1 to 3 have entered into said agreement at Exh.64. Subsequently, according to defendants no.1 to 3, a letter was sent by them to the plaintiffs on 14-6- 1982, by which the plaintiffs were informed that since the property in question is less than 1,000 sq.mtrs., permission under ULC Act is not necessary. In the said letter, it is mentioned that nobody has got any right, title or interest in the suit property in any manner. 15) It is argued by Mr.Raval that there is nothing to show that the plaintiffs have received such letter, which was sent by UPC. He further submitted that, the plaintiffs were not aware about aforesaid facts and, therefore, it was not necessary for them to get the sale deed executed within 90 days from ULC clearance, as per stipulation in agreement. Mr.Raval, therefore, submitted that the plaintiffs were althroughout under impression that title was required to be cleared and that is why they were not required to perform their part of the contract within the stipulated time. 16) Other documentary evidence on record is a notice dated 21-12- 1982 sent by the plaintiffs to defendants no.1 to 3, which is at Exh.65. By the said letter, the plaintiffs pointed out to defendants no.1 to 3 that the defendants have not shown anything in connection with title clearance of the suit property. 17) There is also an attornment notice dated 3-1-1983 given by defendants no.1 to 3, which was replied by the present plaintiffs on 11-1- FA/750/1994 11/32 JUDGMENT 1983. 18) There is also a documentary evidence at Exh.76, which is an abstract of property card wherein there is an entry dated 22-9-1982, pointing out that as per letter of the bank dated 15-7-1982, since an amount of Rs.4,000/- has been paid by defendants no.1 to 3, entry regarding mortgage of the property is to be treated as cancelled. As per the said entry in the property card, which is at Exh.76, the bank has written a letter dated 15-7-1982 to City Survey authority regarding payment of Rs.4,000/- by original owners to the bank on 29-7-1977 and accordingly, entry regarding mortgage is cancelled. 19) On behalf of the plaintiffs one, Samatullah Khan has given his oral evidence at Exh.59. Plaintiff no.1 is the mother-in-law of said witness and plaintiff no.2 is the wife of said witness. Said witness has given his evidence in view of the power of attorney given to him, which is at Exhs.60 and 61. Said witness has stated in his evidence that he is aware about the suit transaction. Said witness has stated that defendants no.1 to 3 were the joint owners of the suit property. Plaintiff no.1 was residing as a tenant in part of the suit property with her sister-in-law, namely, Ayeshabibi and they were occupying Municipal census number 2724/1 and 2724/2. It is stated by him that municipal census no.2724 which is on the ground floor was occupied by defendant no.4/1 Gulam Mohammed Musabhai as a tenant. 20) Said witness has given evidence with regard to agreement to sell dated 28-5-1982. Said witness has said in his chief examination that defendants no.1 to 3 had failed to point out anything regarding title clearance within six months, as provided in the agreement to sell. He also stated that defendants no.1 to 3 have never informed either orally or FA/750/1994 12/32 JUDGMENT in writing that the title regarding the suit property is clear. He has also further stated that defendants no.1 to 3 had orally assured the plaintiffs that sale deed will be executed in due course. Said witness has said that at the time when they obtained property card, they came to know that said property was under mortgage of a cooperative bank. Said witness has also stated about the notice given to defendants no.1 to 3 dated 21- 12-1982, which is at Exh.65 as well as notice given by defendants no.1 to 3 dated 20-12-1983, which is at Exh.66. Said witness has also stated in his chief examination that prior to notice dated 20-12-1982, defendants no.1 to 3 had not sent any letter or notice to the plaintiffs. 21) In his cross-examination, said witness has stated that plaintiff no.1 is residing with him and that plaintiff no.1 had filed a criminal case against defendants no.1 to 3 in the year 1984 for cheating, but the said complaint was dismissed on the ground that the dispute is of civil nature. Said witness has said that in the said criminal case, nobody had given any evidence on behalf of the plaintiffs. In paragraph 3 of his cross examination, said witness has admitted that plaintiff no.1 is not doing any business nor is having any bank account and even in connection with notice correspondence, he had gone to the advocate. 22) Said witness has admitted in paragraph 4 of his cross-examination that he is doing business of building contract and he is aware about the Urban Land Ceiling Act. Said witness has further admitted that he had never requested defendants no.1 to 3 to extend the date of Banakhat. He has also admitted in paragraph 4 of his cross-examination that date mentioned in Banakhat was to be over by 28-11-1982, but no occasion had taken place to get the said date extended. He has also admitted that he had never gone to defendants no.1 to 3 for verifying the documents in connection with title clearance of the suit property. He has, however, FA/750/1994 13/32 JUDGMENT stated that he had gone at the house of defendants no.1 to 3 for the purpose of getting sale deed executed. He has denied the suggestion that notice dated 20-12-1982, which was sent by defendants no.1 to 3 by way of UPC was received by him on 21-12-1982. He has also denied the suggestion that after receiving said notice he had sent notice dated 21- 12-1982, asking defendants no.1 to 3 to execute the sale deed. He denied the suggestion that the plaintiffs were not ready and willing to perform their part of the contract. He has also denied suggestion that at the time when the agreement was entered into, the property was not subjected to any mortgage. He has admitted in paragraph 7 of his cross- examination that he was not aware as to when the title of the property was cleared.