Case: Madamsetty Satyanarayana Vs. G. Yellogi Rao And Two Others

2. The facts may be briefly stated: On August 23, 1954, at 10 a. m. defendants 1 and 2, through their Auction Agent, defendant 3, advertised and put their plots Nos. 1 to 4 situated in Narayanguda opposite to Deepak Mahal Theatre to public auction. In regard to plots Nos. 2 and 3 the plaintiff offered the highest bid of Rs. 12,000. He wanted to purchase the plots for the purpose of starting his business. When the plaintiff tendered one fourth of the sale price as earnest money in accordance with the terms of the auction, the defendants unlawfully refused to accept it. On August 30, 1954, the plaintiff gave notice to the 3rd defendant and sent copies thereof to the other defendants calling upon them to obtain from him theamount of the sale price as earnest money within 24 hours and pass a receipt therefor and accept the balance of the auction price within a period of one week thereafter in accordance with the conditions of the auction sale and to execute aduly registered in his favour. Defendants 1 and 2 did not give any reply to the said notice. The plaintiff filed the suit in the Court of the 4th Additional Judge, City Civil Court, Hyderabad, on April 18, 1955, for directing the defendants, inter alia, to execute thein his favour. Defendants 2 and 3 in theiradmitted that there was an auction sale and that plaintiff was the highest bidder; but the 1st defendant, on the other hand, denied that there was any final bid or that it was accepted. He further stated that he gave up the idea of selling the plots and that after obtaining the necessary permission from the Municipality he began to build shops on the said plots. The City Civil Court Judge held that the suit plots were knocked down at the auction in favour of the plaintiff and that the 1st defendant refused to take the earnest money. He further held that though the plaintiff gave notice as early as August 30, 1954, to the defendants, he did not take any steps to enforce his contract and that though he knew of the construction a couple of months before he filed the suit, he kept quiet and allowed the 1st defendant to complete his construction and, therefore, it was not a fit case where he could, in exercise of his discretion, give a decree for specific performance; instead he awarded to the plaintiff a sum of Rs. 500 towards damages. On appeal, a Division Bench of the Andhra Pradesh High Court, on a consideration of the evidence, came to the conclusion that the delay in filing the suit was due to the illness of the plaintiffs wife and also on account of the demolition of one of his houses by the Municipal Corporation, that he came to know for the first time on April 13, 1955, that the lst defendant was raising a structure on the suit plots and that without any loss of time within a few days thereafter he filed the suit. The High Court also found that the 1st defendant did not act bona fide inasmuch as he chose to rush head long in raising the structure evidently to defeat the claims of the plaintiff. On those findings, the High Court held that the Trial Court went wrong on principle in exercising its discretion in favour of the defendants and in refusing to grant a decree for specific performance in favour of the plaintiff. In the result, the High Court set aside the decree of the Trial Court and gave a decree for specific performance in favour of the plaintiff on his depositing a sum of Rs,12,000 together with stamp papers and registration charges within a month from the date of the decree. It may also be mentioned that the learned counsel for the plaintiff made an offer that his client was willing to pay a sum of Rs. 14,750 towards the cost of the building put up by defendants 1 and 2 on the suit plots and the Court recorded the same. But, the High Court left it to the said defendants either to give vacant possession of the plots or with the structure thereon accepting money for it, as they chose. The 1st defendant has preferred this appeal by certificate to this Court making the plaintiff the 1st respondent, and defendants 2 and 3, respondents 2 and 3.

Court's reasoning:
5. We cannot allow the learned counsel for the appellant to raise before us the first question, namely, but the 1st respondent did not accept the repudiation but kept the contract alive and committed a breach thereof, with the result that he disqualified himself to file the suit for specific relief, for the said plea was not raised in the pleadings, no issue was raised in respect thereof and no arguments were addressed either in the Trial Court or in the High Court. As the question is a mixed question of fact and law, we cannot permit the appellant to raise it for the first time before us.It is clear from these decisions that the conduct of a party which puts the other party in a disadvantageous position, though it does not amount to waiver, may in certain circumstances preclude him from obtaining a decree for specificdo not think, though the observations of Sadasiva Aiyar, J., are rather wide, that the learned Judges intended to lay down of that unless there is a waiver or abandonment by the plaintiff of his rights to sue for specific performance, he should befor if that was the law, as we have pointed out earlier, the substantive part of S. 22 of the Specific Relief Act would become nugatory. A Division Bench of the Calcutta High Court in Jadu Nath Gupta v. Chandra Bhusan, AIR 1932 Cal 493  , again emphasized the fact that the English doctrine of delay and laches showing negligence in seeking relief in a Court of equity cannot be imported into the Indian law in view of Art. 113 of the Limitation Act. But it pointed out that where the conduct of the plaintiff was such that it did not amount to abandonment but showed waiver or acquiescence especially when inaction on his part induced the defendant to change his position, the plaintiff ought not to be allowed any relief. This case brings out not only the distinction between English and Indian law but also that waiver or abandonment of a right is not afor refusing relief of specific performance.11. The result of the aforesaid discussion of the case law may be briefly stated thus : While in English mere delay or laches may be a ground for refusing to give a relief of Specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waiver of a right is not anecessary to disentitle the plaintiff to the said relief, for if abandonment or waiver is established, no question of discretion on the part of the Court would arise. We have used the expression "waiver" in its legally accepted sense, namely, "waiver is contractual and may constitute a cause of action; it is an agreement to release or not to assert a right"; see Dawsons Bank Ltd. v. Nippou Menkwa Kabushiki Kaisha, 62 Ind App 100 at p. 108 : (AIR 1935 PC 79   at p. 82). It is not possible or desirable to lay down the circumstances under which a Court can exercise its discretion against the plaintiff. But they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position to his prejudice or such as to bring about a situation when it would be inequitable to give him such ais true that the lst respondents wife was ill even before the auction, but she continued to be ill even after the auction and there is clear evidence that she was being treated in a hospital. This continual illness of the 1st respondents wife must have unnerved him and when the High Court accepted his evidence we cannot say that it went wrong. It is also true that the notice by the Municipal Corporation to demolish the house was given two months prior to the auction, but there is nothing on the record to show when the house was actually demolished. Some time must have elapsed between the notice and the actual demolition. The only evidence in regard to the demolition of the house is that of the 1st respondent; and it is not suggested in thethat the demolition of the house was before the auction. On the uncontradicted evidence of the 1st respondent, we must hold, agreeing with the High Court, that the 1st respondent was in a worried state of mind because of the said two circumstances which might have been responsible, to some extent, for his not taking immediate active and effective steps to enforce his right. The most important circumstance in the case is, when did the 1st respondent come to know of the commencement of the building operations by the appellant on the suitTrial Court surmised without any evidence that at the tie the lst respondent saw the foundations the stage of the construction indicated that the building operations must have commenced two months earlier. The High Court rightly pointed out that it was a pure surmise and accepted the evidence of the 1st respondent that a few days after he saw the foundations being dug in the suit site he filed the suit. But all these are beside the point, for it is not the case of the appellant that because of the 1st respondents conduct he was induced to put up the building at a heavy cost; his case throughout was that there was no contract at all. If so, there was no question of his being induced to act to his detriment because of the conduct of the 1st respondent. Therefore, except for some delay, there are no circumstances within the meaning of the aforesaid decisions which should induce a Court to refuse in its discretion to give a relief of specific performance. The High Court rightly held that it was a fit case where the plaintiff should have been given a relief of specific performance.