Case: Satya Jain(D)  Vs. Anis Ahmed Rushdie(D) Tr.Lrs

clause in the agreement which had obliged the Plaintiff No.1 to make any further payment after the initial part payment of Rs.50,000/-. The obligation of the Plaintiff No.1 was to pay any further amount(s) to the Income-Tax authorities, at the request of the defendant, in order to facilitate the issuance of the Tax Clearance Certificate. No payment to the defendant beyond the initial amount of Rs.50,000/- was contemplated by all. The above would appear to be consciously intended by the parties so as to exclude the possibility of any substantial monetary loss to the plaintiff in the event the defendant is to resile from his commitment to execute the sale document. The intent of the parties, acting as prudent businessmen, appears to be clear. An obvious intent to exclude any obligation of the plaintiff to pay any further amount (beyond Rs.50,000/-) to the defendant is clearly discernible. Consequently, resort to the principle of business efficacy by the High Court to read such an implied term in the agreement dated 22.12.1970, in our considered view, was not warranted in the facts and circumstances of the present case. 25. The principles of law on the basis of which the readiness and willingness of the plaintiff in a suit for specific performance is to be judged finds an elaborate enumeration in a recent decision of this Court in J.P. Builders and another v. A. Ramadas Rao and another [(2011) 1 SCC 429] . In the said decision several earlier cases i.e. in R.C. Chandiok vs. Chuni Lal Sabharwal [(1970) 3 SCC 140] , N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao [(1995) 5 SCC 115] and P.D Souza vs. Shondrilo Naidu [(2004) 6 SCC 649] have been noticed. To sum up, no straitjacket formula can be laid down and the test of readiness and willingness of the plaintiff would depend on his overall conduct i.e. prior and subsequent to the filing of the suit which has also to be viewed in the light of the conduct of the defendant. Having considered the matter in the above perspective we are left with no doubt whatsoever that in the present case the Plaintiff No.1 was, at all times, ready and willing to perform his part of the contract. On the contrary it is the defendant who had defaulted in the execution of the sale document. The insistence of the defendant on further payments by the plaintiff directly to him and not to the Income Tax authorities as agreed upon was not at all justified and no blame can be attributed to the plaintiff for not complying with the said demand(s) of the defendant. 26. Having arrived at the above conclusion it is wholly unnecessary for us to consider the arguments advanced on behalf of the appellants with regard to the provisions of the Foreign Exchange Regulation Act, 1973 (FERA) in the light of which it had been contended that it was not open in law for the plaintiff to comply with the demands for the additional amount(s) made by the defendant. The failure of the defendant to bring on record the draft sale deed which had to accompany the application for the required Tax Clearance Certificate, an aspect highlighted on behalf of the appellants to show the absence of a genuine desire of the defendant to go through the transaction, also, would not require any consideration for the above stated reason. 27. The ultimate question that has now to be considered is whether the plaintiff should be held to be entitled to a decree for specific performance of the agreement of 22.12.1970. The long efflux of time (over 40 years) that has occurred and the galloping value of real estate in the meantime are the twin inhibiting factors in this regard. The same, however, have to be balanced with the fact that the plaintiffs are in no way responsible for the delay that has occurred and their keen participation in the proceedings till date show the live interest on the part of the plaintiffs to have the agreement enforced in law. 28. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasized that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi [(2007) 10 SCC 231] and more recently in Narinderjit Singh v. North Star Estate Promoters Ltd. [(2012) 5 SCC 712] may be usefully recapitulated. 29. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalizing the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the market price as on date of the order of the final Court.

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

Explanation:
1[ds]13. Even going by any of the three different/alternative dates on which the cause of action for the plaintiffs suit had arisen, as conceded by the learned counsel for the respondent, it is evident that the suit was filed beyond the stipulated period of three years from any of the dates of the accrual of the cause of action. However, the plaintiffs have invoked the provisions of Section 15 (5) of the Limitation Act, 1963 to claim the benefit of the exclusion of the period during which the defendant was absent from India. There can, indeed, be no doubt that if the plaintiff is entitled to exclude the period of such absence the bar of limitation will not apply to the present suit. The court, therefore, must make an endeavour to find out the true meaning of the provisions contained in Section 15 (5) of the Limitation Act in order to determine as to whether the plea put forward by the plaintiffs is sustainable in law14. The provisions contained in Section 15 (5) of the Limitation Act, 1963 are pari materia with those in Section 13 of the Indian Limitation Act, 1908. The aforesaid provision of the Act of 1908 has received a full and complete consideration of this Court in P C K Muthia Chettiar & Ors v. V E S Shanmugham Chettair (D) & Anr. [AIR 1969 SC 552 ]. While holding that the words of the Section (Section 13), namely, that time during which the defendant has been absent from India are clear and therefore must be excluded in computing the period of limitation, two earlier decisions in Atul Kristo Bose v. Lyon & Co. [ILR 14 Cal 457 para 6] and Muthukanni Mudaliar v. Andappa Pillai [AIR 1955 Mad 96 ] were also noticed by this Court. The discussion in respect of the aforesaid two earlier decisions which had formed the basis of the conclusions in P C K Muthia Chettiar (Supra), as noticed above, have been set out in paragraph 6 of the judgment which may be profitably extracted below :6. In Atul Kriato Bose v. Lyon & Co. [(1887) ILR 14 Cal 457] the defendants were foreigners and they never came to India on or after the date of the accrual of the cause of action. The Calcutta High Court held that Section 13 applied and that the suit was not barred by limitation. The Court was not impressed with the argument that according to this construction a defendant who was in England when a cause of action against him accrued, and has remained there ever since might be liable after an indefinite time to be sued in a Calcutta court. In Mathukanni v. Andappa [AIR 1955 Mad 96 ] the plaintiff and the defendant who were residents of Mannargudi in India had gone to Kaula Lampur to earn their livelihood, and while there the defendant executed a promissory note to the plaintiff on November 16, 1921. In 1925 the plaintiff brought a suit on the promissory note in the District Munsifs Court of Mannargudi. The cause of action in the suit arose outside India. A Full Bench of the Madras High Court held that the plaintiff was entitled to the benefit of Section 13 and in computing the period of limitation he was entitled to exclude the time during which the defendant was absent in Kaula Lampur. We agree with this decision. The Full Bench rightly overruled the earlier decisions in Ruthinu v. Packiriswami [AIR 1928 Mad 1088 ] and Subramania Chettiar v. Maruthamuthu [AIR 1944 Mad 437 ]. We hold that the suit is not barred by limitation15. In the present case from the evidence on record it is established that till the date of filing of the suit i.e. 03.11.1977, the defendant was in India during following periods:1. from 24.09.1970 to 15.10.1970,2. from 17.12.1970 to 28.12.1970,3. from 16.08.1971 to 11.09.1971,4. from 29.10.1972 to 10.11.1972,5. from 02.09.1977 to 01.10.1977The decision of this Court in P C K Muthia Chettiar (Supra) clearly lays down that the operation of Section 13 of the Limitation Act, 1908 (corresponding to Section 15 (5) of the Limitation Act, 1963) does not make any exception in cases where the cause of action had arisen in a foreign country or in India or in cases in which the defendant was in India or in a foreign country at the time of the accrual of the cause of action. Taking into account the ratio laid down by this Court in P C K Muthia Chettiar (Supra) and the period during which the defendant was absent from India there can be no doubt, whatsoever, that on due application of the provisions of Section 15(5) of the Limitation Act of 1963, the suit filed by the plaintiff was well within time as the period of the absence of the defendant from India has to be excluded while computing the limitation for filing of the suit16. To answer the next question that would arise consequent to our decision on the first issue the clauses of the agreement between the parties will have to be noticed in some detail. The total sale price was agreed at Rs. 3,75,000/out of which a sum of Rs.50,000/had been acknowledged to have been paid by the purchaser(plaintiff No.1) to the vendor (defendant) by means of an account payee cheque. Under clause 4 of the agreement, the vendor was required to obtain, at his own cost, a Wealth Tax clearance certificate to enable the transfer of property to be made and to intimate the said fact along with a copy of the tax clearance certificate to the purchaser not later than 12 months from the date of the agreement. Under Clause 5 of the agreement, the vendor was to execute the sale deed within a period of 15 months from the date of the agreement. The purchaser, in turn, was to pay to the vendor the balance sale consideration after deducting the amount of Rs.50,000/at the time of the registration of the sale deed which was to be within three months after receipt of the necessary intimation that the tax clearance certificate has been obtained along with the copy thereof as contemplated under clause 4 of the agreement. Under Clause 7 of the agreement, the purchaser was obliged to pay to the Income Tax authorities such amount as may be desired by the vendor (not exceeding the balance sale price payable) in order to enable the vendor to get the required Wealth Tax clearance certificate. The aforesaid clause further stipulated that such money as may be paid to the Income Tax authorities, at the request of the vendor and on the vendors account, will be deducted by the purchaser from the balance sale consideration at the time of the execution of the sale deed. It must also be noted that under the terms of the agreement between the parties apart from the payment contemplated by Clause 7 to the authority and in the manner specified therein the purchaser had no obligation to tender any further payment directly to the vendor20. Under the said clause 7 of the agreement, clearly, the obligation of the plaintiff No.1 was to pay to the Income Tax department such sum (not exceeding the balance consideration payable) as may be requested by the defendant. Neither clause 7 nor any other Clause of the agreement had cast upon the plaintiff No.1 a duty to tender any further payment to the defendant or to credit the bank account of the defendant with any further advance amount after payment of the initial amount of Rs.. In as far as the obligation to pay the Income Tax Department as contemplated by clause 7 is concerned it has been already noticed that the plaintiff No.1 had repeatedly asserted in the correspondence referred to above that he was always ready and willing to pay any amount (within the balance consideration payable) to the Income Tax department so that the necessary tax clearance certificate can be issued in favour of the defendant. Nothing has been brought on record by the defendant to show that any demand or request had been made by him to the plaintiff No.1 for payment of any amount to the Income Tax Department21. The High Court, notwithstanding the clear language of clause 7 of the agreement, had invoked the principle of business efficacy to hold that a slight deviation from the plain meaning of the language of clause 7 would be justified so as to read an obligation on the part of plaintiff to pay the further amount of Rs. One lakh as demanded by the defendant instead of insisting on making such further payment(s) only to the Income Tax authorities22. The principle of business efficacy is normally invoked to read a term in an agreement or contract so as to achieve the result or the consequence intended by the parties acting as prudent businessmen. Business efficacy means the power to produce intended results. The classic test of business efficacy was proposed by Lord Justice Bowen in The Moorcock [(1889) 14 PD 64]. This test requires that a term can only be implied if it is necessary to give business efficacy to the contract to avoid such a failure of consideration that the parties cannot as reasonable businessmen have intended. But only the most limited term should then be implied – the bare minimum to achieve this goal. If the contract makes business sense without the term, the courts will not imply the same24. The business efficacy test, therefore, should be applied only in cases where the term that is sought to be read as implied is such which could have been clearly intended by the parties at the time of making of the agreement. In the present case not only the language of clause (7) of agreement dated 22.12.1970 is clear and unambiguous there is no other clause in the agreement which had obliged the Plaintiff No.1 to make any further payment after the initial part payment of Rs.. The obligation of the Plaintiff No.1 was to pay any further amount(s) to thex authorities, at the request of the defendant, in order to facilitate the issuance of the Tax Clearance Certificate. No payment to the defendant beyond the initial amount of Rs.50,000/was contemplated by all. The above would appear to be consciously intended by the parties so as to exclude the possibility of any substantial monetary loss to the plaintiff in the event the defendant is to resile from his commitment to execute the sale document. The intent of the parties, acting as prudent businessmen, appears to be clear. An obvious intent to exclude any obligation of the plaintiff to pay any further amount (beyond) to the defendant is clearly discernible. Consequently, resort to the principle of business efficacy by the High Court to read such an implied term in the agreement dated 22.12.1970, in our considered view, was not warranted in the facts and circumstances of the present case25. The principles of law on the basis of which the readiness and willingness of the plaintiff in a suit for specific performance is to be judged finds an elaborate enumeration in a recent decision of this Court in J.P. Builders and another v. A. Ramadas Rao and another [(2011) 1 SCC 429] . In the said decision several earlier cases i.e. in R.C. Chandiok vs. Chuni Lal Sabharwal [(1970) 3 SCC 140] , N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao [(1995) 5 SCC 115] and P.D Souza vs. Shondrilo Naidu [(2004) 6 SCC 649] have been noticed. To sum up, no straitjacket formula can be laid down and the test of readiness and willingness of the plaintiff would depend on his overall conduct i.e. prior and subsequent to the filing of the suit which has also to be viewed in the light of the conduct of the defendant. Having considered the matter in the above perspective we are left with no doubt whatsoever that in the present case the Plaintiff No.1 was, at all times, ready and willing to perform his part of the contract. On the contrary it is the defendant who had defaulted in the execution of the sale document. The insistence of the defendant on further payments by the plaintiff directly to him and not to the Income Tax authorities as agreed upon was not at all justified and no blame can be attributed to the plaintiff for not complying with the said demand(s) of the defendant28. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasized that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi [(2007) 10 SCC 231] and more recently in Narinderjit Singh v. North Star Estate Promoters Ltd. [(2012) 5 SCC 712] may be usefully recapitulated29. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalizing the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the market price as on date of the order of the final Court.