Case: R LAKSHMIKANTHAM Vs. DEVARAJI

agreement. Further, the plaintiff?s readiness and willingness was proved by the fact that he has necessary funds as on the date of the agreement, and thereafter, as was stated by him in his letter dated 18.12.2002. This being the case, the Court ordered specific performance as the balance sale consideration had already been deposited into the Court on the date of the filing of the Suit. The first appeal from the aforesaid judgment was dismissed on 20.12.2010 by the Principal District Judge. The District Judge found concurrently for the plaintiff on all the points argued and hence dismissed the first appeal.6. By the impugned judgment, the High Court reversed the concurrent judgments and held, on a construction of the agreement, that since only three months were given to complete the sale transaction, time was of essence. It also went on to hold that the two letters dated 18.12.2002 and 19.12.2002 could not have been said to have been served on the defendant and hence were not proved. The High court recorded the defendant?s advocate?s statement that it was not going into other aspects except that plaintiff was not ready and willing throughout to perform the sale agreement. Despite this, the High Court held that since the Suit itself was filed belatedly, it would not be enough for the plaintiff to show that he had the necessary funds. It would also have been necessary for him to show that he was otherwise ready and willing throughout, which cannot be said to be correct considering that there was a long time gap between 22.09.2002 and 07.07.2003 inasmuch as the intermediate letters/notices were not proved. The High Court also further stated that the property value was Rs.10 lakhs on the date of the sale agreement, though this was not proved by the defendant, and then went on to state that since readiness and willingness had to be held against the Plaintiff, and since the Suit itself was belated, specific performance cannot be granted on the facts of this case and, as stated earlier, reversed the concurrent findings of the Courts below.7. We have heard learned counsel for the appellant.8. The High Court has, in the second appeal, obviously gone wrong on a number of counts. First, to hold that time was of essence in the agreement, is wholly incorrect. Clause 3 has to be read along with clauses 5 and 8, which clearly show that in the nature of reciprocal promises, the promise made by the seller in clause 5 has to be performed first, viz., that the title documents have to be obtained from the mortgagee after the mortgage is cleared. It is only then that the consideration above Rs.70,000/-, being the balance consideration for the sale, has to be paid. Secondly, the High court is wholly incorrect in stating that the two letters of 18.12.2002 and 19.12.2002 cannot be said to have been proved. Both the letters were registered A.D. letters sent to the very address of the defendant, which the defendant states is the address on which it received the legal notice dated 07.07.2003. Further, the moment the registered letter once sent is returned with the remarks mentioned hereinabove, it shall be deemed to have been served on the defendant on the address so stated, unless the contrary is proved. The defendant did not come forward with anything to show that this was not the proper address. In fact, that this is the proper address is shown by the fact that he acknowledged the receipt of the legal notice dated 07.07.2003 on this very address.9. The High Court order is not correct in stating that readiness and willingness cannot be inferred because the letters dated 18.12.2002 and 19.12.2002 had not been sent to the defendant. The High Court also erred in holding that despite having the necessary funds, the plaintiff could not be said to be ready and willing. In the aforesaid circumstances, the High Court was also incorrect in putting a short delay in filing the Suit against the plaintiff to state that he was not ready and willing. In India, it is well settled that the rule of equity that exists in England, does not apply, and so long as a Suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff – See Mademsetty Satyanarayana v. G. Yelloji Rao and others AIR 1965 Supreme Court 1405 (paragraph 7) which reads as under:?(7) Mr. Lakshmaiah cited a long catena of English decisoins to define the scope of a Court?s discretion. Before referring to them, it is necessary to know the fundamental differnece between the two systems-English and Indian-qua the relief of specific performance. In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no period of limitation for instituting a suit for the said relief and, therefore, mere delay – the time lag depending upon circumstances – may itself be sufficient to refuse the relief; but, in India mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law; if it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises.?10. The High Court also went into error in stating that the value of the property was Rs.10 lakhs at the time of the sale agreement. PW-1 in his cross examination admitted that it was Rs.10 lakhs on the date when PW1 was cross-examined. The value of the property on the date of the sale agreement was only Rs.6 lakhs, and it was open for the parties to negotiate the said price upwards or downwards, which was what the parties did in the facts of the present case. Nothing can, therefore, be derived from the erroneous assumption that a valuable property had been sold at a throwaway price.

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

Explanation:
1[ds]8. The High Court has, in the second appeal, obviously gone wrong on a number of counts. First, to hold that time was of essence in the agreement, is wholly incorrect. Clause 3 has to be read along with clauses 5 and 8, which clearly show that in the nature of reciprocal promises, the promise made by the seller in clause 5 has to be performed first, viz., that the title documents have to be obtained from the mortgagee after the mortgage is cleared. It is only then that the consideration above Rs.70,000/-, being the balance consideration for the sale, has to be paid. Secondly, the High court is wholly incorrect in stating that the two letters of 18.12.2002 and 19.12.2002 cannot be said to have been proved. Both the letters were registered A.D. letters sent to the very address of the defendant, which the defendant states is the address on which it received the legal notice dated 07.07.2003. Further, the moment the registered letter once sent is returned with the remarks mentioned hereinabove, it shall be deemed to have been served on the defendant on the address so stated, unless the contrary is proved. The defendant did not come forward with anything to show that this was not the proper address. In fact, that this is the proper address is shown by the fact that he acknowledged the receipt of the legal notice dated 07.07.2003 on this very address.9. The High Court order is not correct in stating that readiness and willingness cannot be inferred because the letters dated 18.12.2002 and 19.12.2002 had not been sent to the defendant. The High Court also erred in holding that despite having the necessary funds, the plaintiff could not be said to be ready and willing. In the aforesaid circumstances, the High Court was also incorrect in putting a short delay in filing the Suit against the plaintiff to state that he was not ready and willing. In India, it is well settled that the rule of equity that exists in England, does not apply, and so long as a Suit for specific performance is filed within the period of limitation, delay cannot be put against the plaintiff – See Mademsetty Satyanarayana v. G. Yelloji Rao and others AIR 1965 Supreme Court 1405 (paragraph 7) which reads asMr. Lakshmaiah cited a long catena of English decisoins to define the scope of a Court?s discretion. Before referring to them, it is necessary to know the fundamental differnece between the two systems-English and Indian-qua the relief of specific performance. In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no period of limitation for instituting a suit for the said relief and, therefore, mere delay – the time lag depending upon circumstances – may itself be sufficient to refuse the relief; but, in India mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law; if it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises.The High Court also went into error in stating that the value of the property was Rs.10 lakhs at the time of the sale agreement. PW-1 in his cross examination admitted that it was Rs.10 lakhs on the date when PW1 was cross-examined. The value of the property on the date of the sale agreement was only Rs.6 lakhs, and it was open for the parties to negotiate the said price upwards or downwards, which was what the parties did in the facts of the present case. Nothing can, therefore, be derived from the erroneous assumption that a valuable property had been sold at a throwaway price.