IN THE HIGH COURT OF JUDICATURE AT MADRAS Date: 26.8.2011 Coram The Hon’ble Mr.Justice R.S.RAMANATHAN Second Appeal No.1260 of 2007 and M.P.No.1 of 2007 Jamuna Rani Appellant vs. 1. Meenambal 2. Ratnakuam 3. Gunasekaran 4. Ramalingam 5. Ravikuam 6. Thilagavathi 7. Nagarajan 8. P.Sugumar Respondents For appellant : Mr.V.Raghavachari For RR 1 to 7 : Mr.AR.L.Sundaresan, Senior Counsel for Mrs.A.L.Gandhimathi For R8 : Mr.N.Sankaravadivel Prayer:- Second Appeal against the judgment and decree dated 25.6.2007 in A.S.No.74 of 2006 on the file of the Principal District Judge, Salem confirming the judgment and decree dated 28.9.2006 in O.S.No.368 of 1999 on the file of the Additional Sub Judge, Salem. JUDGMENT The unsuccessful plaintiff is the appellant. 2. The plaintiff filed the suit for specific performance of the agreement of sale executed by the deceased first defendant and also by his sons alongwith him in favour of the plaintiff/appellant. Both the courts below dismissed the suit and hence, the second appeal is field by the plaintiff/appellant to enforce the agreement of sale. https://hcservices.ecourts.gov.in/hcservices/ 3. The case of the plaintiff was that the suit property originally belonged to the deceased first defendant and that was taken on lease by the husband of the appellant and he was running a gunny bag business in that premises and on 12.5.1995, the deceased first defendant entered into an agreement to sell the property to the appellant/plaintiff for a sum of Rs.2,40,000/= and the agreement of sale was executed by the first defendant in favour of the appellant and the appellant paid an advance of Rs.40,000/= and as per the agreement of sale, the sale has to be completed within four months by paying the balance sale consideration. Though the appellant was ready to complete the transaction by paying the balance sale consideration, the deceased first defendant was evading to accept the payment and he was coming out with saying that he would execute the sale alongwith his sons and in that pretext, he was gaining time and thereafter, on 6.5.1997, the deceased first defendant received a sum of Rs.1,00,000/= from the appellant and he and his children executed an agreement of sale extending the period and also acknowledged receipt of Rs.1,00,000/= and as per the agreement of sale dated 6.5.1997, the sale has to be completed within a period of three months and as the appellant's husband was in possession of the property and as per the agreement, the appellant/husband was also paying the rent regularly and despite repeated request by the appellant, the respondent did not come forward to execute the sale deed after receiving the balance sale consideration and in July 1999, the property was sough to be attached by the Municipality for non payment of tax and on coming to know of the same, the appellant paid the tax of Rs.21,690/= and thereafter, the appellant came to know that the respondents are trying to sell the property to the third parties and therefore, filed the suit for specific performance on 18.7.1999 and later came to know that respondents 1 to 8 sold the property to the 8th respondent and therefore, he was also impleaded as one of the defendants in the suit and therefore, prayed for decree of the suit. 4. The first defendant died before filing written statement and his legal representatives were added as defendants 2 to 8 and they filed written statement stating the circumstances under which the agreement of sale was executed by their father in favour of the appellant and also stated that the appellant was not having the means to pay the balance sale consideration and that was the reason for her not paying balance sale consideration and even after the extension was granted on 6.5.1997, as per the time granted, the appellant did not come forward to pay the amount and got the document registered and having realised that the appellant is taking advantage of his possession of the property and is not interested in paying the https://hcservices.ecourts.gov.in/hcservices/ balance sale consideration, the property was sold by the deceased first defendant in favour of the 8th respondent and hence, the appellant is also not entitled to the relief of specific performance. It was further stated that the deceased first defendant requested the appellant's husband to vacate the premises and the husband of the appellant not only refused to vacate the premises but also filed a suit in O.S.No.843 of 1991 for injunction against the deceased first defendant and having realised that the husband of the first defendant cannot be evicted, the deceased first defendant had no other option but to enter into an agreement with the appellant to sell the property but, the appellant did not pay the balance sale consideration as per the original agreement dated 12.5.1995 and after two years, she came forward to pay a sum of Rs.1,00,000/= and agreed to complete the sale transaction within a period of three months and even thereafter, she did not evince any interest and therefore, the appellant was not ready and willing to perform her part of the contract and therefore she is not entitled to the specific performance. 5. Both the courts below accepted the case of the respondents and held that though time is not the essence of the contract, even after extending the agreement on 6.5.1997, the appellant did not prove her readiness and willingness to complete the sale within a period of three months and the suit was filed merely two years thereafter and therefore, the appellant was not ready and willing to perform her part of the contract and she took advantage of the possession of the property and that was the reason for her inaction in getting the sale deed executed and therefore, she is not entitled to the relief of specific performance as the relief is a discretionary one. Aggrieved by the same, the second appeal is filed. 6. The following substantial questions of law are framed for consideration:- (i) Whether the courts below are right in holding that time is the essence of the contract and the appellant was not ready and willing to perform her part of the contract within the time stipulated? (ii) Whether the courts below were right in refusing to decree the suit for specific performance having regard to the conduct of the defendants in denying the execution of the extension agreement dated 6.5.1997 in the light of the judgment of the Supreme Court that in a suit for specific performance, the conduct of the defendant must also be taken into consideration to grant the relief. 7. Mr.V.Raghavachari, learned counsel for the appellant contended that time is not the essence of the contract in the case of immovable https://hcservices.ecourts.gov.in/hcservices/ property and without considering the said principle, both the courts below held that the sale was not completed within the time stipulated and therefore, the appellant is not entitled to the relief prayed for. He further submits that respondents 1 to 7 having signed the extension agreement dated 6.5.1997, denied the agreement in the written statement and also pleaded that the agreement of sale was obtained from their father Karuppanna Pillai by force and therefore, the conduct of the respondents in making false statement in denying the agreement of sale executed by them, would disentitle them from claiming any favour from the court as per the judgment reported in SILVEY AND OTHERS v. ARUN VARGHESE AND ANOTHER ((2008) 11 SCC 45), SARASWATHI AMMAL v. JAYARAMA RAO AND OTHERS (1999-1-LW 683) and MAN KAUR (D) BY LRS. v. HARTAR SINGH SANGHA (2010 (6) CTC 652). 8. On the other hand, Mr.AR.L.Sundaresan, learned Senior Counsel for respondents 1 to 7 submitted that the conduct of the appellant and the fact that she is in possession of the property would prove that she was not interested in completing the transaction by paying balance sale consideration and as per the agreement of sale dated 12.5.1995, Ex.A1, the sale has to be completed within a period of four months and except the payment of Rs.40,000/= o attempt was made by the appellant to pay the balance sale consideration within the period and when the respondents pressed for payment,the appellant paid a sum of Rs.1,00,000/= and got the document, Ex.A2 from the respondents as well as from the deceased first defendant and on receipt of that amount, the time was extended by three months and even thereafter, no attempt was made by the appellant to pay the balance sale consideration and therefore, the conduct of the appellant would make it clear that she took advantage of her possession of the property and did not come forward to execute the sale deed and that would also prove her inability to ay the balance sale consideration. He, therefore, contended that having regard to the escalation of prices, recently, the Supreme Court has held that time has to be construed as essence of the contract, and therefore, it cannot be contended that the time is not the essence of the contract in the present case. He relied on the unreported judgment of the Honourable Supreme Court in the matter of MRS.SARADAMANI KANDAPPAN v. S.RAJALAKSHMI AND OTHERS in Civil Appeal Nos.7254 to 7256 of 2002 dated 4.7.2011(Manu/SC/0717/2001). 9. He further submitted that readiness and willingness has to be infered from conduct of the parties and it is evident from the conduct of the appellant that the appellant did not have means to pay the balance amount and that was the reason for not coming forward to pay the balance sale consideration and get the document executed in https://hcservices.ecourts.gov.in/hcservices/ the year 1997 when Ex.A1 was obtained by her and if really, the appellant had money to pay the entire balance sale consideration, nothing would have prevented from paying the balance amount and obtaining the sale deed from the deceased first defendant and respondents 1 to 7 and no evidence was adduced that the respondents were not willing to execute the sale deed and even assuming that the respondents were not co-operating with the appellant, the appellant would have issued a notice calling upon the respondents to execute the sale deed and having obtained extension of time for the agreement of sale, by paying Rs.1,00,000/= in the year 1997 after a period of two years and thereafter did not take any further steps it cannot be contended that the appellant was ready and willing to perform her part of ht contract and therefore, the courts below were right in dismissing the suit filed by the respondent/appellant. The learned Senior Counsel further submitted that only in cases where the appellant proved her readiness to perform her part of the contract and the respondents were not willing to execute the sale deed despite the efforts taken by the appellant, or when the respondents projected a false case and failed to prove the same. In such circumstances, the court can exercise the discretion in favour of the appellant and when the appellant was not ready and willing to perform her part of the contract, falsity of the respondents cannot be taken advantage by the appellant to get a decree. 10. Heard both sides. It is true that in a case of specific performance ordinarily time is not the essence of contract. But, that does not mean that the person who seeks specific performance of agreement of sale can come to court at any point of time within the period of limitation. As per section 16 of the Specific Relief Act, specific performance of contract cannot be enforced in favour of a person who was always not ready and willing to perform the essential terms of the contract and the plaintiff has ever performed or shown his readiness and willingness to perform the contract according to the true construction and in the judgment in N.P.THIRUGNANAM v. DR.R.JAGAN MOHAN RAO ((1995) (5) SCC 115) the Supreme Court has held as follows:- "5. ... Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of https://hcservices.ecourts.gov.in/hcservices/ specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract." 11. In the judgment in P.D.'SOUZA v. SHONDRILO NAIDU ((2004) 6 SCC 649, the Honourable Supreme Court has stated as follows:- "19. It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf. ... 21. ... The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement." 12. In J.P. BUILDERS v. A.RAMADAS RAO ((2011) 1 SCC 429), the Honourable Supreme Court has held as follows:- "22. The words "ready" and "willing" imply that the person was prepared to carry out the terms of https://hcservices.ecourts.gov.in/hcservices/ the contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness. ... 26. It has been rightly considered by this court in R.C.Chandiok V. Chuni Lal Sabharwal ((1970) 3 SCC 140) that "readiness and willingness" cannot be treated as a straitjacket formula. This has not be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. 27. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. "Readiness and willingness" to perform the part of the contract has to be determined/ascertained from the conduct of the parties." 13. In the Judgment reported in 2010 (6) CTC 652 (cited supra) the Honourable Supreme Court has held as follows:- "To succeed in a Suit for Specific Performance, the plaintiff has to prove: (a) that a valid Agreement of Sale was entered by the Defendant in his favour and the terms thereof; (b) that the Defendant committed breach of the contract; and (c) that he was always ready and willing to perform his part of the obligations in terms of the contract." 14. In the judgment in ANIGLASE YOHANNAN v. RAMLATHA (2005 (7) SCC 534), the Honourable Supreme Court has held as follows:- "12. The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking https://hcservices.ecourts.gov.in/hcservices/ benefit of the grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief." 15. In the light of the principles laid down by the Honourable Supreme Court, we will have to see whether the parties have agreed to have time as essence of contract and whether the appellant was ready and willing to perform her part of the contract. Admittedly, the agreement of sale was executed on 12.5.1995 by the deceased first defendant in favour of the appellant to the sale consideration was fixed as Rs.2,40,000/= and advance of Rs.40,000/= was paid and it was agreed that the sale has to be completed within a period of four months. Admittedly, the husband of the appellant is in possession of the property as tenant. Even after four months period was fixed, no evidence was let in by the appellant to prove her readiness and willingness by performing part of the contract in offering to pay the balance sale consideration and calling upon the deceased first defendant to execute the sale deed. It was stated that the deceased first defendant was delaying the execution of the sale deed in the pretext that he would bring his sons also to join the execution of the sale deed. The reason stated by the appellant cannot be believed as it is not the case of the appellant that she wanted the deceased first defendant to execute the sale deed alongwith his sons. Therefore, when the deceased first defendant was gaining time to execute the sale deed stating that he would bring his sons also for the execution of the sale deed and if the appellant had felt that the deceased first defendant was only delaying the execution of the sale deed under that pretext, she should have called upon the deceased first defendant to execute the sale deed by himself without insisting upon the sons to join in the execution of the sale deed. Apart from the oral evidence of PW1 that she was requesting the first defendant to execute the sale deed, no worthy evidence was produced to prove that she was ready. 16. Further, Ex.A2 extension of agreement of sale was executed by the first defendant alongwith his sons after a period of two years and they were ready to receive Rs.1,00,000/= towards sale consideration and under Ex.A2, three months time was fixed to complete the sale transaction. This aspect, taken advantage by the learned counsel for the appellant to contend that though initially under Ex.A1, four months time was given for completing the sale transaction, even after expiry of two years, the respondents executed https://hcservices.ecourts.gov.in/hcservices/ the extension of sale agreement after receiving Rs.1,00,000/= and granted three months time and that would prove that time was not the essence of the contract and therefore, the courts below erred in holding that time was the essence of the contract and the sale was not completed by the appellant. 17. It is true that after two years, the respondents received Rs.1,00,000/= and accepted the extension of the sale agreement. The reason for executing that document has been properly explained by the respondents in the pleadings and in the evidence. It was stated that the appellant's husband is in possession of the property and as the first defendant requested to vacate him, he filed a suit against the deceased first defendant restraining him from interfering with his possession and enjoyment and the first defendant was also in need of money and therefore, he had executed the agreement of sale for a sum of Rs.2,40,000/=. Even after entering into the sale agreement, the appellant did not pay the balance sale consideration within a period of four months and she paid only Rs.1,00,000/= under Ex.A2 and thereafter also, she did not make any attempt to pay the balance sale consideration and insisted the sale deed to be executed by the respondents. 18. As rightly submitted by the learned counsel for the respondents, the appellant also admitted in evidence that even by the end of 1997, she realised that the respondents would not execute the sale deed. Even after realising by the end of 1997, no steps were taken by the appellant calling upon the respondents to execute the sale deed by receiving the balance sale consideration and only in July 1999, she came forward to file the suit after issuing a notice. There was no explanation by the appellant for her silence for nearly two years after the extension of agreement of sale which would lead to only one presumption that the appellant was not having sufficient money to pay the balance sale consideration and she also took advantage of her possession of the property and therefore, she was not interested in completing the sale transaction by paying the balance sale consideration. 19. The above aspects were rightly appreciated by the courts below and held that the appellant was not ready and willing to perform her part of the contract. As held by the Honourable Supreme Court in the above judgments, the conduct of the party would prove whether the party was ready and willing to perform his/her part of the contract. In this case, the conduct of the appellant would only lead to the irresistible conclusion that she was not ready and willing to perform her part of the contract even after the agreement https://hcservices.ecourts.gov.in/hcservices/ was extended after a period of two years an the appellant had taken advantage of the possession of the property by her and did not evince any interest to complete the transaction. Therefore, the first substantial question of law is answered against the appellant and I hold that though in the case of immovable property, time is not the essence of the contract, having regard to the facts of this case, the appellant was not ready and willing to perform her part of the contract by offering to pay the balance sale consideration even after extension of the agreement was accepted by the respondents. 20. It was submitted by the learned counsel for the appellant that the conduct of the respondent must also be taken into consideration in the matter of exercise of discretionary relief and relied upon the judgments reported in 1999-1-LW 683 and (2008) 11 SCC 45. 21. No doubt, in the judgment reported in (2008) 11 SCC 45 the Honourable Supreme Court, relying upon the decision in (1996) 5 SCC 589 in the matter of Lourdu Mari David V. Louis Chinnaya Arogiaswamy held that the conduct of the defendant cannot be ignored while weighing the question of exercise of discretion for decreeing or denying a decree for specific performance. Similarly, in the judgment reported in 1999-1-LW 683, the Honourable Judge of this Court also held that the principle that one who seeks equity must do equity and that the parties should approach the court with clean hands would apply equally to the plaintiff as well as the defendant and having regard to the conduct of the defendant in that particular case, the discretionary relief was exercised in favour of the plaintiff having regard to the conduct of the defendant in that case. 22. According to me, the conduct of the defendant can be taken into consideration only when the plaintiff also proved her readiness and willingness and her conduct is blemishless throughout. As stated supra, in this case, even after executing Ex.A1, no attempt was made by the plaintiff to complete the sale transaction by paying the balance sale consideration and even after expiry of two years,