Case: P. Purushottam Reddy  Vs. M/S. Pratap Steels Ltd

2. An introductory statement of bare necessary facts would suffice for the purpose of this order. On 31.10.1987, a contract for sale of immovable property was entered into between the parties whereby the appellant agreed to sell the suit property consisting of a building and the site on which the building stands, for a consideration of Rs.An amount of Rs. 8,00,000/was paid by way of advance or earnest money, the balance consideration of Rs. 32,25,000/was to be paid simultaneously with the execution and registration of sale deed. This contract was in supersession of an earlier contract dated 22.9.1986 which had lapsed. The vendor had agreed to obtain the requisite permission from the Urban Land Ceiling Authority before 30th June, 1988. The time so appointed could be extended by mutual consent of the parties. It was expressly agreed upon between the parties that if the requisite that if the requisite exemption or permission under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA, for short) was not forthcoming by 30th June, 1988 or within such extended period as may be mutually agreed to, then the contract was to become inoperative and unenforceable in which event the only obligation surviving on the vendor was to refund the earnest money. The vendor could return the earnest money within three months thereafter and if for any reason whatsoever the amount could not be so repaid then the amount was to carry interest at the rate of 12 per cent per annum. It appears that proceedings for declaration that the suit property was within the ceiling limits as appointed by the ULCRA were already pending before the Competent Authority at a point of time when the agreement was entered into between the parties. However, the decision was not forthcoming within the period of six months from the date of the agreement. On 1.12.1988 the appellant wrote a letter to respondent informing that the agreement to sell stands cancelled as per the terms of the agreement for failure of the requisite clearance from the competent authority (Urban Land Ceiling) forthcoming. With the letter the appellant tendered an amount of Rs. 2,00,000/through two cheques enclosed with the letter, requesting for the agreement being returned duly cancelled to the vendor and assuring the payment of the balance amount of the earnest money before the end of December, 1988. This letter erupted a conflict between the parties leading to exchange of legal notices and filing by the respondent of a suit for specific performance of agreement to sell on 29.6.1989. On 12.3.1992 the Trial Court decreed the suit against which the appellant filed First Appeal before the High Court. On 19.8.1999 the High Court has allowed the appeal, set aside the judgment and decree of the Trial Court and remanded the case for holding additional trial on the three additional issues framed by the High Court and thereafter to decide the case afresh.

Reasoning:
3. A perusal of the order of remand made by the High Court shows that on behalf of the appellants six contentions were raised: (i) that the suit was not maintainable as the pleadings did not conform to the requirements of Forms 47 and 48 of the Appendix A of the Code of Civil Procedure; (ii) that there was no pleading in the plaint that the plaintiffrespondent had always been ready and willing to perform his part of the contract and continued to be so; and on the contrary the conduct of the respondent showed the absence of such readiness and willingness: (iii) that the agreement became inoperative and unenforceable on 30th June, 1998 and therefore was rendered incapable of specific performance; (iv) that the grant of relief of specific performance was discretionary, which the facts and circumstances of the case did not permit being exercised in favour of the(v) that the respondent had not approached the Court with clean hands and therefore was not entitled to the discretionary and equitable relief of specific performance; and (vi) that the respondent was not financially sound and therefore was not in a position to perform his part of the contract.On an analysis of several recitals of the agreement dated 31.10.1987 and of the law the High Court concluded that time was not the essence of the contract and therefore the factum of not obtaining the clearance under the ULCRA by the appellant within the time appointed did not render the agreement inoperative and unenforceable. The High Court also held that the six months time appointed by the agreement could not be said to have been extended by acquiescence and implied consent on the part of the appellant. The High Court then proceeded to examine the crucial questionwhether the respondent was ready and willing to perform his part of the contract and the pleading in that regard as contained in the plaint.The High Court noticed that there was no specific issue framed by the Trial Court as to such a plea. The High Court also noticed that in the written statement there was no plea taken that the suit for specific performance was not maintainable forwith Forms 47 and 48 of Appendix A of the Code of Civil Procedure. Having stated of the High Court felt the need of framing three additional issues, viz., (i) whether the suit is maintainable; (ii) whether the plaintiff is ready and willing to perform his part of the contract, and (iii) whether the plaintiff is entitled for specific of the contract. Having formed that opinion the High Court set aside the judgment and decree of the Trial Court framed the three issues as abovesaid, allowed liberty to the parties for adducing in the trial court such evidence as was necessary on the abovesaid issues without amending the pleadings and sent the matter back to the Trial Court. The High Court also left it open to the Trial Court to take into account the subsequent events.11. In the case at hand, the trial court did not dispose of the suit upon a preliminary point. The suit was decided by recording findings on all the issues. By its appellate judgment under appeal herein, the High Court has recorded its finding on some of the issues, not preliminary, and then framed three additional issues leaving them to be tried and decided by the trial court. It is not a case where a retrial is considered necessary. Neither Rule 23 nor Rule 23A of Order 41 applies. None of the conditions contemplated by Rule 27 exists so as to justify production of additional evidence by either party under that Rule. The validity of remand has to be tested by reference to Rule 25. So far as the objection as to maintainability of the suit for failure of the plaint to satisfy the requirement of Forms 47 and 48 of Appendix A of CPC is concerned, the High Court has itself found that there was no specific plea taken in the written statement. The question of framing an issue did not, therefore, arise. However, the plea was raised on behalf of the defendants purely as a question of law which, in their submission, strikes at the very root of the right of the plaintiff to maintain the suit in the form in which it was filed and so the plea was permitted to be urged. So far as the plea as to readiness and willingness by reference to clause (e) of Section 16 of the Specific Relief Act, 1963 is concerned, the pleadings are there as they were and the question of improving upon the pleadings does not arise in as much as neither any of the parties made a prayer for amendment in the pleadings nor has the High Court allowed such a liberty. It is true that a specific issue was not framed by the trial court. Nevertheless, the parties and the trial court were very much alive to the issue whether Section 16(e) of the Specific Relief Act was complied with or nor and the contentions advanced by the parties in this regard were also adjudicated upon. The High Court was to examine whether such finding of the trial court was sustainable or notin law and on facts. Even otherwise the question could have been gone into by the High Court and a finding could have been recorded on the available material in as much as the High Court being the court of first appeal, all the questions of fact and law arising in the case were open before it for consideration ad decision.In the case before us it was not the grievance raised by any of the parties before the High Court that there was any failure on the part of the trial court in discharging its obligation of framing issues. Nobody complained of prejudice at the trial for want of any issue or a specific issue. It was nobodys case that any evidence, oral or documentary, was excluded or not allowed to be taken on record by the trial court. The very fact that thehave come up to this court laying challenge to the order of remand shows that the appellants are not interested in remand and do not want any additional issue to be framed or to adduce any further evidence. One of the pleas taken by the appellants in the memo of special leave petition is that the High Court had erred in remanding the matter back for fresh trial and the High Court had failed to appreciate that there was sufficient material on record to show absence of readiness and willingness on the part of the plaintiff to perform its part of the contract. On the other hand, after the passing of the impugned order of remand thehas also, through his counsel, filed a memo before the trial court on 18.2.2000 submitting that on the additional issues framed pursuant to the direction of the High Court, the evidence on behalf of the plaintiff was already on record and the plaintiff would lead rebuttal evidence only if any evidence was adduced by the defendants. Thus the plaintiff is also not desirous of adducing any additional evidence on the issues.14. The subsequent events which are material and ought to be noticed by the appellate court are only two, i.e. (i) communication of the order of the competent authority (Urban Land Ceiling) holding the land of the appellants to be within ceiling limits, and (ii) order of BIFR holding theto be a sick company. These two events are subject matter of documentary evidence and almost admitted between the parties. The High Court can be requested to take note of such subsequent events by bringing the relevant documents on record which being public documents would not require any formal proof. The High Court may take note of such subsequent events and test the validity of judgment under appeal by reference to those events also or mould the relief suitably and as may be considered necessary.