Case: Garikapati Veerayya Vs. Nannapaneni Subbayya Chowdhary & Others

Gajendragadkar, J.1. This appeal arises out of a suit filed by respondents 1 and 2 against the appellant claiming specific performance of an agreement to sell the land in suit which had been executed in favour of respondent No. 1 by the appellant on 4th December, 1947. The case set up by the said respondents in their plaint was that Under the agreement in question, the appellant had undertaken to execute a sale-deed in respect of the property covered by it within a month after the date of the agreement for payment of Rs. 11,400. At the time of the agreement Rs. 1, 500 had been paid and Rs. 2,000 and Rs. 1,000 had been paid thereafter on 14th January, 1948 and 2nd February, 1948 respectively. Respondent No. 1 had kept the balance of the sale-price ready to be paid to the appellant, but the appellant postponed executing the sale-deed and so, the present suit had to be instituted claiming specific performance of the said agreement.2. That plaint further alleged that on 16th September, 1948, the second respondent had agreed to purchase the said property from the first respondent for Rs, 13, 200 and so, the second respondent had joined the first respondent in the present suit. I he plaint claimed that the sale-deed should be executed by the appellant in favour of the second respondent. To this action, one Manthasa Venkatapathiraiu was impleaded as defendant No. 2, the appellant having been impleaded as defendant No. 1. The plaint alleged that defendant No. 2 claimed to be a prior mortgagee of the suit property and set up some conflicting claims in regard to the said property and so, it became necessary to add him as a party defendant to the present action. The claim thus made by the two respondents was challenged by the appellants His case was that respondent No. 1 was not ready and willing to carry out his part of the contract and that after waiting for a sufficiently long period, the appellant had called upon respondent No. 1 to pay the balance within four days by a telegraphic notice sent on 1st October, 1948. Since respondent No. 1 did not comply with the said notice, the appellant informed him by a notice on 16th November, 1948 that owing to his default, the contract stood cancelled. The appellants contention was that the cancellation of the contract by him was in the circumstances justified.3. Defendant No. 2 the alleged prior mortgagee, who had been impleaded as defendant No. 2.pleaded that he had been unnecessarily joined to the suit and denied that he had made conflicting statements regarding the subsisting nature of the debt as alleged in the plaint.4. On these pleadings, the trial Judge framed 6 substantive issues. He rejected the appellants contention that the second respondent was not competent to file the suit along with the first respondent, but he upheld his pleas on other points. According to the trial Court, the appellant had validly rescinded the contract, the respondent No. 1 had committed breach of the contract ana not the appellant, and respondent No. 1 was not ready and willing to perform his part of the contract He also held that the second defendant was not a necessary party to the suit. On these findings, the claim made by the respondents was rejected and their suit was dismissed with costs.5. Respondents 1 and 2 then preferred an appeal in the High Court of Andhra. Subba Rao, C.J. and Umamaheswaram, J., who heard the appeal in the first instance differed. Subba Rao, C.J. held that respondent No. 1 was ready and willing to perform his part of the contract at all material times and that the appellant was not justified in rescinding the contract. As we will presently mention, before the contract was rescinded, respondent No. 1 had called upon the appellant to satisfy him about his clear title by producing before him evidence that the prior mortgage over the property covered by the agreement had been satisfied. The trial Court had held that this requisition was not bona fide and had, in fact, been set up by respondent No. 1 to gain time, because he did not have enough money with him to pay the balance to the appellant. Subba Rao, C.J., differed from this conclusion and held that the requisition made by respondent No. 1 in that behalf was justified and had not been waived as alleged by the appellant.6. Umamaheswaram, J., on the other hand, agreed with all the findings recorded by the learned trial Judge. He held that respondent No. 1 was not ready and willing to perform his part of the contract at all material times, that the demand made by him for proof of the discharge of the alleged prior mortgage was not bona fide ana it was not justified, and according to him, the appellant had validly rescinded the contract.7. In view of this difference of opinion between the two learned Judges, the appeal was referred to Chandra Reddy, J., who agreed with the view taken by Subba Rao, C.J. and so, in the result, the appeal was allowed and the claim made by respondents 1 and 2 was decreed with costs throughout. It is against this decree that the appellant has come to this Court by Special Leave.8. Before dealing with the merits of the appeal, it is necessary to refer to some more facts in regard to the property with which we are concerned in the present appeal. The said property consists of agricultural land and its area is about 6 acres. It formed part of a larger area of 40 acres which originally belonged to one Upadrasta Venkatarama Sastri and his brothers widow Venkata Lakshmamma. It appears that on 26th March, 1928, the said two owners had created a simple mortgage in respect of this property for Rs. 10,000 in favour of the second defendant. On 12th April, 1931, one of the two mortgagors Venkatarama Sastri executed another simple mortgage for Rs. 2,000 in favour of the same mortgagee the mortgaged properties being the same as under the first mortgage plus some more lands. During the subsistence of these mortgages the mortgagors sold the equity of redemption in the said lands bit by bit until about 11 acres remained with them.9. The appellant had obtained a money decree against the Upadrasta family in O.S. No. 213 of 1930 in the Court of the District Munsiff at Bapatla. In execution of the said decree, the said lands were brought to sale and they were purchased at Court auction by one Raghavayya. The sale certificate was issued in favour of the Court purchaser on 7th December, 1942. On 29th October, 1945, the said Court purchaser sold the said property to the appellant. Having obtained title to the said property in this manner, the appellant entered into the suit agreement of sale with respondent No. 1 on 4th December, 1947.10. As soon as this agreement was entered into between the parties, the first respondent was put in possession by the appellant. The agreement was that the balance had to be paid by respondent No. 1 to the appellant within one month and that if it was not paid within the said time, it was to carry interest at 6¼ per cent. per annum. It is common ground that soon after the property was thus put in possession of respondent No. 1, he received nearly Rs. 1,200 as income from the crops standing in the field which had been delivered to him. The result of this agreement was that respondent No. 1 on payment of Rs. 1,500 only got possession of the land, and promised to pay the balance within the stipulated time, subject to the condition that on failure to pay the amount, he would pay interest at 6¼ per cent. per annum on that amount.11. After this agreement was passed, respondent No. 1 paid Rs. 3,000 to the appellant on two dates which we have already mentioned. Since he did not pay the balance of the price, the appellant sent a telegraphic notice to him calling upon him to pay the balance within four days. This notice was served on 1st October, 1948. The first respondent did not acknowledge receipt of this telegram, but proceeded to ask the appellant to show him the documents of title as well as vouchers to satisfy him that the poor mortgage over the property had been discharged ; and he alleged that the appellant was deliberately avoiding to produce those documents and was gaining time. This notice was replied by the appellant on 22nd October 1948. The appellant warned the first respondent that the demand for the documents was a device intended to gain time and that the first respondent knew all about the prior mortgage and was not justified in asking the appellant to produce any documents in that behalf. Thereafter on 16th November, 1948 the appellant by notice informed the first respondent that the agreement had been cancelled and called upon him to deliver possession of the property and take back the amount of Rs. 4, 500 which had been paid by him to the appellant less the amount due to the appellant towards the yield from out of the said lands. Further exchange of notices took place between the parties and ultimately on 22nd April, 1949, the present suit was filed.12. We have already seen that two substantial issues arose between the Parties in the present litigation. The first issue was whether the appellant was justified in ressinding the contract and the decision of that issue would turn upon the consideration of two other points, whether the time was of the essence of the contract as it was initially made between the parties; if not, whether the appellant was justified in making time the essence of the contract by his notice which he issued on 1st October 1948. 1 he other aspect of the matter which would be relevant in dealing with the question about the validity of the rescission of the contract by the appellant is whether respondent No. 1 was justified in calling upon the plaintiff to produce satisfactory proof about the discharge of the prior mortgage. The other important issue which arose between the parties was whether respondent No 1 was readv and willing at all material times to perform his part of the contract. Since we have come to the conclusion that the trial Court was right in holding that respondent No 1 has not shown that he was ready and willing to perform his part of the contract we do not think it necessary to consider the other issue as to the validity of the rescussion of the contract. There is no doubt that in a suit for specific performance the plaintiff must show that he was ready and willing to perform his part of the con’ tract from the time that the contract was made until the date of the decree This position is not disputed before us, and so, we will deal with this point in the present appeal.13. The true legal position in this matter is not in doubt. In a suit for specific performance, the plaintiff must aver in his plaint that he was ready and willing to perform his part of the contract and if the said averment is traversed, he must prove the said averment. Law does not require that in order to prove his readiness and willingness, the plaintiff must show that he had ready in his hands the requisite amount which had to be paid by him to his vendor. If he proves that he had in his hands such ready amount at all material times and was willing to pay it and get the conveyance executed in his favour, that, of course is a very clear case of the plaintiffs readiness and willingness. But the same fact can be proved if the plaintiff can show that at all material times, he could have raised the said amount and was willing to do so and was prepared to perform his part of the contract and carry out the stipulations binding on him. If the plaintiff fails to allege and prove his readiness and willingness in this matter, he has no right to claim specific performance14. In the present case, the plaint did not specifically aver in general terms the readiness and willingness of respondent No. 1 to perform his part of the contract The only material allegation made in the plaint was that:“the first plaintiff kept the balance of the sale-price all along ready and as the first defendant appeared to throw doubts even on this fact, the first plaintiff deposited the balance of Consideration money together with interest at the contract rate of Rs. 0-4 per Rs. 100 per month up to that date viz., Rs. 7, 290-7-6 in the name of his lawyer Shri Burra Ramamurti on 24th November 1948, in the District Co-operative Bank, Tenali and intimated the fact of deposit in the registered notice of that date.”15. It is true that the issue which was framed in this behalf was a general issue about the readiness and willingness of the first respondent to perform his part of the contract, but the allegation made in the plaint was more precise, concrete and narrow; it was that the first respondent had kept ready with him the whole of the balance due to be paid to the appellant. It is significant that when respondent No. 1 gave evidence he sought to support this narrow, specific and clear case. He stated on oath that he had money-ready and he had told the appellant that the money was ready with him and that he would pay it to him immediately if only the appellant was willing to execute the document. According to his evidence, by the first week of March, he had kept the balance ready with him. It is thus clear that the parties went to trial on this issue by reference to the narrow case made by respondent No. 1 that he had the balance ready with him from March, 1948. The trial Court examined the whole of the evidence, oral and documentary, led by respondent No. 1 in support of his plea and came to the conclusion that he did not have the necessary money till 23rd November, 1948 to perform his part of the contract, and so, in order to cover up his inability to produce that amount, he made unreasonable demands on the appellant by calling upon him to produce satisfactory evidence about the discharge of the prior mortgage. It may be stated at this stage that though the respondents impleaded defendant No. 2 on a specific plea that defendant No. 2 was making contrary claims on the strength of the prior mortgage, at the trial they gave up that plea and offered to have the sale-deed without any proof about the satisfaction of the said earlier mortgage.16. When the appeal was argued before the High Court, it does not appear to have been urged by the respondents that the finding of the trial Court on the narrow point raised before it was wrong. In fact, though there was a difference of opinion between Subba Rao, C.J. and Umamaheswaram, J., on other points raised in the appeal, all the three learned Judges who heard the appeal in the High Court have not differed from the finding of the trial Court that respondent No. 1 had failed to prove his plea that he had the balance ready with him since March, 1948. The difference arose on the question as to whether it was essential that respondent No. 1 must prove that he had the cash with him, or whether it would be enough if he showed that he could have raised the necessary amount at all material times. On this point, Umamaheswaram, J., held agreeing with the trial Court that since respondent No. 1 had made a clear, categorical and specific case in that behalf, it was not open to him to give up that case and to contend in the alternative that even if he had not the cash ready with him, he could have easily raised the said amount. Umamaheswaram, J.,. thought that if such a new plea was allowed to be raised in the appeal for the first time, it would be unfair to the appellant, whereas Subba Rao, C.J., took the view that the approach adopted by the trial Court was wrong and that, in law it was open to respondent No. 1 to prove that he could have raised the said amount at the relevant time. In our opinion, the view taken by Umamaheswaram, J., is right. Subba Rao, C.J., appears to have ignored the specific plea made by the respondents in their plaint. He has not noticed the fact that the plaint did not make any averment as it should have about the respondents readiness and willingness to perform their part of the contract, and the only allegation made in that behalf was that respondent No. 1 had the necessary cash at all material times. That being so, it would not be right, we think, with respect, to hold that the trial Court was bound to enquire whether respondent No. 1 could have raised the said amount. It was open to respondent No. 1 to make that plea and then the trial Court could certainly have considered it. But if the first respondent made out a much higher claim and suggested that he would prove that he had the necessary amount in his possession it would not be right to find fault with the trial Court if it considered that plea in the light of the evidence adduced by the respondent in its support and on the merits, rejected it. The finding of the trial Judge on the merits is unexceptionable and has not been dissented from in the High Court. The only question which calls for our decision, therefore, is whether the Appeal Court should have allowed the respondents to make out a new plea of fact for the first time in appeal. In dealing with tins question, we must have regard to the pleadings made by the parties on the point. and as we have already indicated, the pleas made by the respondents and the evidence led on their behalf unmistakably indicate that their case was that cash was ready in the hands of respondent No. 1 and respondent No. 1 was willing to pay it to the appellant at all material times.17. Besides, there are some general considerations which are inconsistent with the view taken by the majority of the Judges in the High Court. If respondent No. 1 had the necessary amount ready in his possession, it is very unlikely that the would keep it with himself and not pay it to the appellant, because a fairly large amount lying idle with him carried no interest, whereas non-payment of the said amount to the appellant involved the liability of respondent No. 1 to pay interest. That is one consideration which is inconsistent with the case of the respondents.18. The other consideration which has not been duly taken into account by the High Court is the conduct of respondent No. 1 in depositing the amount on 24th November, 1948, with his lawyer. This deposit was made after respondent No 1 received Rs. 6,900 from respondent No. 2 on 22nd November, 1948. It is not without significance that respondent No. 1 who claims to have had the balance ready with him during the whole of the period, has had to agree to sell the property to respondent No. 2 even before a conveyance was executed in his favour and as the trial Court has observed, and rightly, there is every reason to believe that it is out of the amount of Rs. 6,900 paid by respondent No. 2 to respondent No 1 that the deposit came to be made on 24th November, 1948.19. In this connection, the demand made by respondent No. 1 on the appellant to produce evidence about the discharge of the prior mortgage also throws some light The respondents solemnly impleaded defendant No. 2 in the present suit on the plea that defendant No. 2 was setting up a claim in respect of the property in question and when defendant No. 2 denied that he made any conflicting statements they told the trial Court that they did not press that part of their case. It is unnecessary to consider the evidence led by the parties on this part of the case, but we cannot help observing that the trial Court appears, on the whole to be right in coming to the conclusion that respondent No. 1 invented this requisition in order to gain time; otherwise it is not easy to understand how without satisfying himself that the prior mortgage had been discharged, he agreed to convey a good title to respondent No. 2 and how at the trial, both the respondents agreed to take a document from the appellant without adjudication about the said alleged claims of the prior mortgagee. Those general considerations in our opinion, lend strong support to the view taken by the trial Court that respondent No. 1 did not passes the necessary cash, and so, could not succeed in the present suit for specific performance. If respondent No. 2 had pleaded at the trial that he would have been able to raise the necessary amount, the appellant would have had an opportunity to meet that case; but since no such Plea was made at the trial, it was not open to him to raise this point for the first time in appeal. Therefore, we are satisfied that the High Court erred in entertaining this plea and allowing the respondents claim for specific performance on the ground that the said plea had been established.

Decision reasoning: 1[ds]Since we have come to the conclusion that the trial Court was right in holding that respondent No 1 has not shown that he was ready and willing to perform his part of the contract we do not think it necessary to consider the other issue as to the validity of the rescussion of the contract. There is no doubt that in a suit for specific performance the plaintiff must show that he was ready and willing to perform his part of theIt is true that the issue which was framed in this behalf was a general issue about the readiness and willingness of the first respondent to perform his part of the contract, but the allegation made in the plaint was more precise, concrete and narrow; it was that the first respondent had kept ready with him the whole of the balance due to be paid to the appellant. It is significant that when respondent No. 1 gave evidence he sought to support this narrow, specific and clear case. He stated on oath that he hadand he had told the appellant that the money was ready with him and that he would pay it to him immediately if only the appellant was willing to execute the document. According to his evidence, by the first week of March, he had kept the balance ready with him. It is thus clear that the parties went to trial on this issue by reference to the narrow case made by respondent No. 1 that he had the balance ready with him from March, 1948. The trial Court examined the whole of the evidence, oral and documentary, led by respondent No. 1 in support of his plea and came to the conclusion that he did not have the necessary money till 23rd November, 1948 to perform his part of the contract, and so, in order to cover up his inability to produce that amount, he made unreasonable demands on the appellant by calling upon him to produce satisfactory evidence about the discharge of the prior mortgage. It may be stated at this stage that though the respondents impleaded defendant No. 2 on a specific plea that defendant No. 2 was making contrary claims on the strength of the prior mortgage, at the trial they gave up that plea and offered to have thewithout any proof about the satisfaction of the said earlier mortgage.16. When the appeal was argued before the High Court, it does not appear to have been urged by the respondents that the finding of the trial Court on the narrow point raised before it was wrong. In fact, though there was a difference of opinion between Subba Rao, C.J. and Umamaheswaram, J., on other points raised in the appeal, all the three learned Judges who heard the appeal in the High Court have not differed from the finding of the trial Court that respondent No. 1 had failed to prove his plea that he had the balance ready with him since March, 1948. The difference arose on the question as to whether it was essential that respondent No. 1 must prove that he had the cash with him, or whether it would be enough if he showed that he could have raised the necessary amount at all material times. On this point, Umamaheswaram, J., held agreeing with the trial Court that since respondent No. 1 had made a clear, categorical and specific case in that behalf, it was not open to him to give up that case and to contend in the alternative that even if he had not the cash ready with him, he could have easily raised the said amount. Umamaheswaram, J.,. thought that if such a new plea was allowed to be raised in the appeal for the first time, it would be unfair to the appellant, whereas Subba Rao, C.J., took the view that the approach adopted by the trial Court was wrong and that, in law it was open to respondent No. 1 to prove that he could have raised the said amount at the relevant time. In our opinion, the view taken by Umamaheswaram, J., is right. Subba Rao, C.J., appears to have ignored the specific plea made by the respondents in their plaint. He has not noticed the fact that the plaint did not make any averment as it should have about the respondents readiness and willingness to perform their part of the contract, and the only allegation made in that behalf was that respondent No. 1 had the necessary cash at all material times. That being so, it would not be right, we think, with respect, to hold that the trial Court was bound to enquire whether respondent No. 1 could have raised the said amount. It was open to respondent No. 1 to make that plea and then the trial Court could certainly have considered it. But if the first respondent made out a much higher claim and suggested that he would prove that he had the necessary amount in his possession it would not be right to find fault with the trial Court if it considered that plea in the light of the evidence adduced by the respondent in its support and on the merits, rejected it. The finding of the trial Judge on the merits is unexceptionable and has not been dissented from in the Highdealing with tins question, we must have regard to the pleadings made by the parties on the point. and as we have already indicated, the pleas made by the respondents and the evidence led on their behalf unmistakably indicate that their case was that cash was ready in the hands of respondent No. 1 and respondent No. 1 was willing to pay it to the appellant at all material times.17. Besides, there are some general considerations which are inconsistent with the view taken by the majority of the Judges in the High Court. If respondent No. 1 had the necessary amount ready in his possession, it is very unlikely that the would keep it with himself and not pay it to the appellant, because a fairly large amount lying idle with him carried no interest, whereasof the said amount to the appellant involved the liability of respondent No. 1 to pay interest. That is one consideration which is inconsistent with the case of the respondents.18. The other consideration which has not been duly taken into account by the High Court is the conduct of respondent No. 1 in depositing the amount on 24th November, 1948, with his lawyer. This deposit was made after respondent No 1 received Rs. 6,900 from respondent No. 2 on 22nd November, 1948. It is not without significance that respondent No. 1 who claims to have had the balance ready with him during the whole of the period, has had to agree to sell the property to respondent No. 2 even before a conveyance was executed in his favour and as the trial Court has observed, and rightly, there is every reason to believe that it is out of the amount of Rs. 6,900 paid by respondent No. 2 to respondent No 1 that the deposit came to be made on 24th November, 1948.19. In this connection, the demand made by respondent No. 1 on the appellant to produce evidence about the discharge of the prior mortgage also throws some light The respondents solemnly impleaded defendant No. 2 in the present suit on the plea that defendant No. 2 was setting up a claim in respect of the property in question and when defendant No. 2 denied that he made any conflicting statements they told the trial Court that they did not press that part of their case. It is unnecessary to consider the evidence led by the parties on this part of the case, but we cannot help observing that the trial Court appears, on the whole to be right in coming to the conclusion that respondent No. 1 invented this requisition in order to gain time; otherwise it is not easy to understand how without satisfying himself that the prior mortgage had been discharged, he agreed to convey a good title to respondent No. 2 and how at the trial, both the respondents agreed to take a document from the appellant without adjudication about the said alleged claims of the prior mortgagee. Those general considerations in our opinion, lend strong support to the view taken by the trial Court that respondent No. 1 did not passes the necessary cash, and so, could not succeed in the present suit for specific performance. If respondent No. 2 had pleaded at the trial that he would have been able to raise the necessary amount, the appellant would have had an opportunity to meet that case; but since no such Plea was made at the trial, it was not open to him to raise this point for the first time in appeal. Therefore, we are satisfied that the High Court erred in entertaining this plea and allowing the respondents claim for specific performance on the ground that the said plea had been established.