HON’BLE SRI JUSTICE G. BHAVANI PRASAD A.S.No.1057 of 1996 JUDGMENT: This appeal is directed against the judgment and decree in O.S.No.359 of 1988 on the file of the I Additional Subordinate Judge, Visakhapatnam, dated 02.03.1995. The suit was filed for specific performance of an agreement of sale, dated 06.07.1985, by the appellant against the respondent contending that the respondent agreed to sell the suit schedule property, measuring 630 square yards, for Rs.68,400/- under an agreement of sale, dated 06.07.1985. The respondent had to obtain the Encumbrance Certificate, Urban Land Ceiling Certificate and Income-tax Clearance Certificate before 20.10.1985 and the balance sale consideration had to be paid by the appellant after measuring the land and recalculating the price at Rs.120/-per square yard after production of the said certificates. The appellant and the respondent were obliged to pay interest at 18% per annum on the balance sale consideration or the advance of Rs.20,000/- if they are respectively at default. The respondent did not produce the certificates in spite of demands and readiness of the appellant with balance of sale consideration and in spite of a legal notice, dated 01.06.1988. When the appellant filed the suit, the respondent resisted the same claiming that the appellant ought to have paid the balance of sale consideration on or before 20.10.1985 and obtained a registered sale deed and he did not do so till the issuance of registered lawyer notice. The respondent also contended that the value of the property had gone up several times and the appellant never approached her for the alleged certificates. The agreement did not fructify due to the failure of the appellant and not the respondent and therefore, the respondent expressed her readiness to repay the amount of Rs.20,000/-to the appellant and requested for dismissal of the suit with costs. The trial Court framed appropriate issues on the readiness and willingness of the appellant, whether time is the essence of the contract and the entitlement of the appellant for specific performance or for recovery of the earnest money with interest and damages. During trial, P.Ws.1 and 2 and DW1 were examined and Exs.A1 to A4, Exs.B1 and B2 were marked. The trial Court in the impugned judgment referred to the rival contentions and the evidence on record and found that the appellant himself failed to give affidavit as required for obtaining Urban Land Ceiling permission and the agreement also did not stipulate withholding of balance of sale consideration merely on the ground of non-production of any certificates by the respondent. The trial Court observed that the appellant did not prove his readiness and willingness and did not perform the contract till issuance of Ex.A2 notice. The trial Court also further observed that time was not the essence of the contract and though it took judicial notice of the escalation of the value of the sites in and around Visakhapatnam, it observed that the respondent agreed to receive the balance of sale consideration with interest at 18% per annum under the agreement. It opined that the delay by either party in performing their part of the contract under the agreement was thus agreed to be compensated by way of interest and cannot lead to cancellation of the agreement. The trial Court went on to conclude that as time was not the essence of the contract, the appellant is still entitled to specific performance subject to his liability to pay the balance of sale consideration with interest at 18% per annum till the date of execution of the registered sale deed from 20.10.1985. Accordingly, a decree for specific performance was granted allowing one-month’s time to the respondent to execute registered sale deed and deliver vacant possession of the suit schedule property on receiving the balance of sale consideration with interest at 18% per annum for the specified period. The appellant pleaded herein that the trial Court ought to have concluded that he was always ready and willing to perform his part of the contract and it was the respondent, who failed in her responsibility of obtaining and producing the relevant certificates. The appellant also contended that in the absence of any failure on his part, he could not have been directed to pay interest at 18% per annum on the balance of sale consideration, more so, when the respondent never informed about obtaining necessary certificates required for registration and never issued any notice expressing her readiness and willingness to perform her part of the contract. Unless the certificates were produced by the respondent, there was no obligation on the part of the appellant to pay the balance of sale consideration. Therefore, the appellant desired that the condition to pay interest be deleted from the decree in his favour. Though the respondent was personally served with the notice in A.S.M.P.No.1750 of 2008 filed for restoration of the appeal, none appeared on behalf of the respondent and therefore, the arguments of Sri V.L.G.K.Murthy, learned counsel for the appellant, have been heard. The point for consideration is whether the direction of the trial Court obliging the appellant to pay interest at 18% per annum from 20.10.1985 till 01.04.1995 or till the execution of a registered sale deed, whichever is earlier, is unsustainable. The terms and conditions of Ex.A1-agreement of sale extracted in detail in the impugned judgment are not in dispute and the appellant and the respondent were obliged by the agreement to pay interest at 18% per annum on the balance of sale consideration or the advance of Rs.20,000/-respectively, depending on the non-compliance with the terms and conditions of the agreement by either party. The trial Court had the benefit of observing the witnesses in flesh and blood, while appreciating their claims about the default of the opposite party. The trial Court noted that the appellant never expressed readiness and willingness to perform his part of the contract, more particularly, his readiness to pay the balance of sale consideration till the issuance of the registered notice by him under Ex.A2 and remained silent for about 2 years 11 months in the meanwhile. No demand in writing was ever made by the appellant, in the meanwhile, seeking the respondent to perform her part of the contract and the oral evidence of P.Ws.1 and 2 about making oral demands did not convince the trial Court. The failure of the appellant to join the respondent in applying for an Urban Land Ceiling Clearance Certificate, as noted by the trial Court, is not contradicted by any material on record and though time might not have been the essence of the agreement of sale as found by the trial Court, the appellant cannot escape from performing his obligation under Ex.A1 agreement to pay interest as stipulated due to the absence of any positive expression of readiness and willingness on his part before the registered notice. The rate of interest stipulated at 18% per annum cannot be considered to be oppressive or penal. In granting the equitable relief of specific performance, the trial Court also took judicial note of the fact that in and around Visakhapatnam the value of the sites has abnormally gone up, but it granted limited interest at the rate of 18% per annum from 20.10.1985 till the date of execution of a registered sale deed or till 01.04.1995 i.e., one month from the date of decree whichever is earlier, but did not even grant any subsequent interest in favour of the respondent. The direction of the trial Court granting interest in favour of the respondent on the balance of sale consideration cannot be considered as unreasonable. The appeal is, therefore, to fail and there is no cross-appeal or cross-objections at the instance of the respondent to consider any other relief. Accordingly, the appeal is dismissed without costs. _____________________ G. BHAVANI PRASAD, J Date: 28.06.2010 sj