Case: A.R. MADANA GOPAL ETC.ETC Vs. M/S RAMNATH PUBLICATIONS PVT. LTD. AND ANR

of MOUs. A plain reading of clause 3 in the MOUs would show that the Appellants were required to pay the balance sale consideration at the time of the registration of the sale deeds immediately when the Writ Petition is disposed of upholding the sale agreement. The High Court further found fault with the Appellants in waiting for 2 years and 3 months after the disposal of the Writ Petition for filing the suits. The High Court refused to grant relief of specific performance to the Appellants on the ground that there was total inaction on the part of the Appellants for more than two years after the parties entered into the MOU. Though, it was pleaded by the Appellants in the suits that they were always ready and willing to perform their part of the agreement, the High Court was of the opinion that they did not prove the same as they did not pay the balance sale consideration immediately after the disposal of the Writ petition. We find force in the submission made on behalf of the Appellants that payment of balance consideration has to be done only at the time of the registration of the sale deeds. Admittedly, no steps were taken for the registration of the sale deeds. The finding of the Division Bench of the High Court that the Appellants were not ready and willing to perform their part of the contract by not paying the balance consideration immediately after disposal of the Writ Petition is erroneous. 12. The Division Bench of the High Court agreed with the contention of the Appellants that mere fixation of time within which the contract was to be performed does not make the stipulation as to time being of the essence of the contract. However, the Appellants were found guilty of total inaction on their part. The sole ground for denial of relief to the Appellants is non payment of balance consideration immediately after disposal of the Writ Petition. The said conclusion is the result of a faulty interpretation of clause 3 of the MOUs as stated earlier. 13. The High Court highlighted the conduct of the Appellants to deny relief. The failure of the Appellants in not pleading and proving how they were put in possession of a part of the property, the frivolous complaint about vacant possession not being given by the Respondents and the attempt made by the Appellants to take forcible possession of a part of the property were commented upon to hold that the Appellants were disentitled to equitable relief. There is not dispute that the Appellants were in possession of the first floor of the property. Details about the manner in which possession was given to the Appellants not being pleaded cannot be a ground to deny relief. The contention of the Appellants before the High Court was that the Respondents should demolish the super structure and hand over vacant possession of the land. The High Court observed that the Appellants who were in possession of a part of the property cannot make such an inane plea. According to the terms of the agreement, the Respondents had to hand over vacant possession of the land. The Appellants submitted that no steps were taken to demolish the structure to highlight the inaction on the part of the Respondents. By no stretch of imagination, can it be said that the Appellants can be denied relief on this account. Yet another reason given by the Division Bench of the High Court is that the Appellants made an attempt to trespass into the ground floor where the Indian Bank was a tenant. The contention of the Appellants is that the Indian Bank was not a tenant in the ground floor but only a creditor of the Respondents. Admittedly, the Indian Bank sued the Respondents for recovery of the loan by the sale of the hypothecated goods stored in the ground floor. It was also contended on behalf of the Appellants that a police complaint was preferred by them against the Respondents for causing disturbance to their possession. The Appellants cannot be said to be disentitled for a relief of specific performance on the ground that their conduct on this count is blameworthy. 14. A suit for specific performance cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where an immovable property is to be sold within a certain period, time being of the essence, and it is not found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the Court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour even at the appellate stage (Ferrodous Estates (Pvt) Ltd. v. P. Gopirathnam (Dead) and Others, 2020 SCC OnLine SC 825) . We are in agreement with the Appellants that they did not file the civil suits immediately after the disposal of the Writ Petition in 1998 due to the pendency of Writ Appeals. Escalation of prices cannot be the sole ground to deny specific performance (Nirmala Anand v. Advent Corpn. (P) Ltd ., (2002) 8 SCC 146 ) . We are of the considered view that the Respondents are not entitled for any additional amount as 90 per cent of the sale consideration was paid by the Appellants before 1994. It is not necessary for us to deal with the submission of the Appellants regarding the applicability of the amendment to the Specific Relief Act, 1963, in view of the conclusion that we have reached in favour of the Appellants.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]11. There is no dispute about the agreements dated 20.03.1991 and the MOUs between the parties. It is also a fact that Income Tax Department wanted to compulsorily acquire the property, due to which Writ Petitions were filed which were disposed of on 11.09.1998. Writ Appeals filed by the Department were pending on the date of filing of the suit. The relevant clause in the MOU is that the Appellants shall pay the balance sale consideration at the time of registration of sale deeds immediately after the disposal of the Writ Petition. The Division Bench of the High Court in the impugned judgment held that the Appellants were not ready and willing to perform their part of the agreement by not depositing the balance sale consideration immediately after the disposal of the Writ Petition. The High Court lost sight of the words at the time of registration of sale in clause 3 of MOUs. A plain reading of clause 3 in the MOUs would show that the Appellants were required to pay the balance sale consideration at the time of the registration of the sale deeds immediately when the Writ Petition is disposed of upholding the sale agreement. The High Court further found fault with the Appellants in waiting for 2 years and 3 months after the disposal of the Writ Petition for filing the suits. The High Court refused to grant relief of specific performance to the Appellants on the ground that there was total inaction on the part of the Appellants for more than two years after the parties entered into the MOU. Though, it was pleaded by the Appellants in the suits that they were always ready and willing to perform their part of the agreement, the High Court was of the opinion that they did not prove the same as they did not pay the balance sale consideration immediately after the disposal of the Writ petition. We find force in the submission made on behalf of the Appellants that payment of balance consideration has to be done only at the time of the registration of the sale deeds. Admittedly, no steps were taken for the registration of the sale deeds. The finding of the Division Bench of the High Court that the Appellants were not ready and willing to perform their part of the contract by not paying the balance consideration immediately after disposal of the Writ Petition is erroneous.12. The Division Bench of the High Court agreed with the contention of the Appellants that mere fixation of time within which the contract was to be performed does not make the stipulation as to time being of the essence of the contract. However, the Appellants were found guilty of total inaction on their part. The sole ground for denial of relief to the Appellants is non payment of balance consideration immediately after disposal of the Writ Petition. The said conclusion is the result of a faulty interpretation of clause 3 of the MOUs as stated earlier.13. The High Court highlighted the conduct of the Appellants to deny relief. The failure of the Appellants in not pleading and proving how they were put in possession of a part of the property, the frivolous complaint about vacant possession not being given by the Respondents and the attempt made by the Appellants to take forcible possession of a part of the property were commented upon to hold that the Appellants were disentitled to equitable relief. There is not dispute that the Appellants were in possession of the first floor of the property. Details about the manner in which possession was given to the Appellants not being pleaded cannot be a ground to deny relief. The contention of the Appellants before the High Court was that the Respondents should demolish the super structure and hand over vacant possession of the land. The High Court observed that the Appellants who were in possession of a part of the property cannot make such an inane plea. According to the terms of the agreement, the Respondents had to hand over vacant possession of the land. The Appellants submitted that no steps were taken to demolish the structure to highlight the inaction on the part of the Respondents. By no stretch of imagination, can it be said that the Appellants can be denied relief on this account. Yet another reason given by the Division Bench of the High Court is that the Appellants made an attempt to trespass into the ground floor where the Indian Bank was a tenant. The contention of the Appellants is that the Indian Bank was not a tenant in the ground floor but only a creditor of the Respondents. Admittedly, the Indian Bank sued the Respondents for recovery of the loan by the sale of the hypothecated goods stored in the ground floor. It was also contended on behalf of the Appellants that a police complaint was preferred by them against the Respondents for causing disturbance to their possession. The Appellants cannot be said to be disentitled for a relief of specific performance on the ground that their conduct on this count is blameworthy.14. A suit for specific performance cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where an immovable property is to be sold within a certain period, time being of the essence, and it is not found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the Court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour even at the appellate stage (Ferrodous Estates (Pvt) Ltd. v. P. Gopirathnam (Dead) and Others, 2020 SCC OnLine SC 825) . We are in agreement with the Appellants that they did not file the civil suits immediately after the disposal of the Writ Petition in 1998 due to the pendency of Writ Appeals. Escalation of prices cannot be the sole ground to deny specific performance (Nirmala Anand v. Advent Corpn. (P) Ltd ., (2002) 8 SCC 146  ) . We are of the considered view that the Respondents are not entitled for any additional amount as 90 per cent of the sale consideration was paid by the Appellants before 1994. It is not necessary for us to deal with the submission of the Appellants regarding the applicability of the amendment to the Specific Relief Act, 1963, in view of the conclusion that we have reached in favour of the Appellants.