Case: B.SANTOSHAMMA &amp; ANR.  Vs. D. SARALA &amp; ANR.

2. The Appellant No.1, in Civil Appeal No. 3574 of 2009, B. Santoshamma, hereinafter referred to as the Vendor, wife of the Appellant No.2 in the said appeal, B. Darshan Reddy, purchased 300 square yards of land, in survey No. 262 of Hayathnagar Village and T aluk in Ranga Reddy District, hereinafter referred to as the suit land, from one D. T anesha, under a registered sale deed dated 20 th August, 1982.3. After about ten days, the Vendor allegedly entered into an oral agreement with the proforma respondent in the said appeal, P. Pratap Reddy, for sale of 100 sq. yards out of the suit land in his favour, for a total consideration of Rs.3000/-, out of which Rs.2,500/- was paid in advance. The Vendor claims to have delivered possession of the said 100 sq. yards to Pratap Reddy on the date of the oral agreement itself.4. On or about 20 th January, 1984, the alleged oral agreement between the Vendor and Pratap Reddy was allegedly reduced into writing, upon payment of the balance consideration of Rs.500/-. The Vendor and her husband allegedly agreed to execute the sale deed on an auspicious day, after consulting the family priest.5. On 21 st March, 1984, the Vendor entered into an agreement with the contesting respondent in Civil Appeal No. 3574 of 2009, Smt D. Sarala, hereinafter referred to as the Vendee, for sale of the suit land to the Vendee, for a total consideration of Rs.75,000/-, out of which Rs.40,000/- was paid by the Vendee to the Vendor in advance. The Vendor claims to have informed the Vendee of the oral agreement with Pratap Reddy, which had been reduced to writing on 20 th January, 1984. The Vendor and her husband Darshan Reddy contend that the Vendor had also specifically informed the Vendee that the Vendor had received the sale consideration for 100 sq. yards from Pratap Reddy, and had delivered possession of 100 sq. yards of land to him.6. The Vendor has alleged that she specifically requested the Vendee to incorporate a clause with regard to the earlier agreement with Pratap Reddy in the sale agreement between the Vendor and the Vendee. However, the Vendee assured the Vendor that she would get the earlier agreement with Pratap Reddy cancelled as her husband knew Pratap Reddy well and had already spoken to Pratap Reddy. According to the Vendor, the Vendee represented to the Vendor, that there was no need for the Vendor to get any clearance from Pratap Reddy as the Vendee and her husband had been assured by Pratap Reddy that no difficulty would be created by him.7. On or about 25 May, 1984, that is, about two months after execution of the sale agreement with the Vendee, the Vendor executed a registered deed of conveyance transferring 100 sq. yards of the suit land in favour of Pratap Reddy. The Vendor and her husband Darshan Reddy, as also Pratap Reddy, have alleged that the Vendee had tried to interfere with Pratap Reddys possession of 100 sq. yards of the suit land.8. On or about 20 th June, 1984, the Vendor allegedly issued notice to the Vendee contending that the agreement of sale dated 21 st March, 1984 was conditional upon clearance from Pratap Reddy in view of the earlier agreement of the Vendor with Pratap Reddy for sale of 100 sq. yards of the suit. The purported notice, if any, was issued after execution of the registered deed of conveyance, for sale of 100 sq. yards of the suit land in favour of Pratap Reddy.9. On 22 nd June, 1984, the Vendors husband, Darshan Reddy, lodged a complaint with the Station House Officer, Hayathnagar, alleging that the original sale deed of the suit land in favour of the Vendor in respect of the suit land had been stolen from his residence, alongwith other documents.10. By a letter dated 28 th June, 1984, the Vendee replied to the notice, contending that the document had been handed over by the Vendor to the Vendee. Sometime thereafter, the Vendee filed a suit being O.S.No.222 of 1984 in the Court of the Principal Subordinate Judge, Rangareddy District, for specific performance of the agreement of sale dated 21 st March, 1984. In the said suit, the Vendee, being the plaintiff, claimed delivery of possession of 300 sq. yards of land from the Vendor. Pratap Reddy was not impleaded defendant in the said suit for specific performance of the Agreement dated 21.3.1984. Later the Vendee filed an application being I.A.No.44 of 1989 for impleading Pratap Reddy, pursuant to which an order dated 5 th April, 1989 was passed whereby Pratap Reddy was added as defendant No.3 in the said suit.11. In the meanwhile, in 1985, Pratap Reddy filed a suit being O.S.No.190 of 1985 in the court of the Principal District Munsif, Hyderabad East and North, seeking a decree of perpetual injunction restraining the Vendee from interfering with his possession over 100 sq. yards of the suit land.12. In the suit filed by Pratap Reddy, it was alleged that he was not aware of any agreement of sale between the Vendor and the Vendee in respect of the suit land or of payment of Rs.40,000/- to the Vendee in terms thereof.13. It is the case of Pratap Reddy, that even if the Vendee had entered into any agreement as alleged with the Vendor, there could be no question of sale of 100 sq. yards of the suit land earlier agreed to be sold to Pratap Reddy, and actually sold to Pratap Reddy by a registered deed of conveyance dated 25.5.1984.14. The Vendee also filed a suit being O.S.No.401 of 1985 against Pratap Reddy in the Court of Principal District Munsif, Hyderabad for a declaration that the agreement between the Vendor and Pratap Reddy with regard to 100 sq. yards was null and void. The Vendor was not impleaded as party to the said suit.15. On or about 19 th July, 1989, the Vendor and her husband Darshan Reddy filed their Written Statement in O.S.No.222 of 1984 subsequently renumbered as O.S.No.20 of 1993 being the suit for specific performance of the sale agreement between the vendor and the Vendee, which is hereinafter referred to as the suit for specific performance. Pratap Reddy also filed his written statement in the suit for specific performance. The three suits have, from time to time, been renumbered.16. The suit for specific performance, which had been transferred to the Additional District Court of Rangareddy District and renumbered O.S.No.20 of 1993, was clubbed for hearing along with Suit No.190 of 1985, renumbered as O.S.No.91 of 1993 and O.S.No.702 of 1991 renumbered as O.S.No.92 of 1993.17. The Trial Court framed the following issues in the suit being O.S No.20/1993, that is the suit for specific performance:1. Whether the plaintiff (sic the Vendee) was put in possession of the suit plot admeasuring 300 sq. yards?2. Whether the suit agreement of sale was subject to the clearance of any agreement of sale of 100 sq. yards out of the suit plot in favour of one Sri. P . Pratap Reddy?3. Whether the sale of 100 sq. yards out of the suit plot to Sri. P. Pratap Reddy is true and binding on the plaintiff.(sic the Vendee)4. Whether the suit is bad for non-joinder of necessary parties?5. Whether the defendants (Sic the Vendor) committed breach of contract of sale?6. Whether plaintiff is entitled to the specific performance of the suit agreement of sale?7. T o what relief?An additional issue was framed as to whether 3 rd defendant, that is Pratap Reddy, was a bona fide purchaser of 100 square yards of the suit land.18. In O.S.No.91/1993, being the suit for injunction filed by Pratap Reddy, the Trial Court framed the following issues:1.Whether the plaintiff (sic Pratap Reddy) is entitled to perpetual injunction as prayed for?2. T o what relief?The following additional issue was also framed:Whether the plaintiff (sic Pratap Reddy) is entitled to the declaration and possession sought?19. In Original Suit No.92 of 1993, being the suit for declaration, filed by the Vendee against Pratap Reddy, the following issues were framed:1. Whether the suit is bad for non-joinder of parties?2. Whether the plaintiff (sic Vendee) is entitled to declaration as prayed for?3. Whether the defendants are entitled to exemplary costs of Rs.3,000/-?4. T o what relief?20. By a common judgment and decree dated 30 th March, 1994, the learned District Judge, Rangareddy disposed of all the three suits. The suit for specific performance was allowed, in part, holding that the Vendee, was not entitled to seek specific performance of the agreement in respect of 100 sq. yards covered by the sale deed dated 25 th May, 1984, but entitled to relief of specific performance in respect of the remaining 200 sq. yards of the suit land. The Vendees suit for declaration against Pratap Reddy was dismissed for non- joinder of the Vendor.21. Since Exhibit A-1, being the sale agreement dated 21 st March, 1984 between the Vendor and the Vendee showed that the sale consideration for 300 sq. yards land was fixed at Rs.75,000, which meant that the price fixed per sq. yard was Rs.250/-, the Court held that the Vendee had to pay Rs.50,000/- to the Vendor, towards sale consideration. As the Vendee was found to have paid Rs.40,000/- under Ex.A1 and a further Rs.5,000/- under the receipt being Ex.A3, the Trial Court effectively held that the Vendee was liable to pay a further sum of Rs.5,000/- to the Vendor. The Vendee was directed to deposit Rs.5,000/- in Court towards the balance sale consideration payable by her, on or before 15 th April, 1994, whereupon the Vendee would have to execute a sale deed in respect of 200 sq. yards from out of the suit land, in favour of the Vendee. In case of failure to deposit Rs.5,000/- in Court within the time stipulated, the suit would stand dismissed.22. Being aggrieved, by the judgment and order referred to above, the Vendor filed an appeal in the High Court, against the judgment and decree in the suit for specific performance being O.S. of 1993 which was numbered as A.S. 1785 of 1994. The Vendee also filed three appeals being A.S. No.892 of 1994 against the judgment and decree in O.S.No.91 of 1993, an appeal being A.S.No.893 of 1994 against the judgment and decree in O.S.No.20 of 1993 and an appeal being A. S. No.894 of 1994 against the judgment and decree in O.S.No.92 of 1993.23. By a common judgment and order dated 7 th September 2006, which is under appeal in this Court, the High Court inter alia dismissed all the appeals that is A.S. Nos.892, 893, 894 filed by the Vendee and A.S. No.1785 of 1994 filed by the Vendor and confirmed the judgment passed by the Trial Court. While the appeal being C.A. No.3574 of 2009 has been filed by the Vendor, the three appeals being C.A. Nos. 3575-3577, have been filed by the Vendee.

Court's reasoning:
54. It is not in dispute that the Vendor agreed to sell the entire suit land comprising 300 square yards to the Vendee for a consideration of Rs.75,000/-. The agreement dated 21.3.1984 is admitted by the Vendor.55. It is also not in dispute that the Vendee paid Rs.40,000/- to the Vendor on the date of the agreement itself and also paid a sum of Rs.5,000/- to the Vendors husband, which was duly acknowledged.56. The defence of the Vendor that the Vendee was unable and/or unwilling to perform her obligations under the agreement dated 21.3.1984 has been rejected by the Trial Court, as also the Appellate Court, that is, the High Court.57. The finding of the Trial Court, affirmed by the High Court that the Vendee was ready and willing to perform her obligations under the agreement dated 21.3.1984, which is based on evidence and supported by cogent reasons, is unexceptionable as discussed hereinafter.58. The contention of the Vendor, that the agreement dated 21.3.1984 was subject to the condition that the Vendee would get the earlier agreement between the Vendor and Pratap Reddy cancelled, cannot be accepted for the following reasons:(i) The agreement dated 21.3.1984, which is in writing does not incorporate any such condition.(ii) It is incredible that the Vendor, who knew Pratap Reddy, to whom she had, as per her own assertion, agreed to sell 100 square yards of land, should proceed on the basis of an alleged assurance of the Vendee, that Pratap Reddy would relinquish his rights under the earlier agreement between the Vendor and Pratap Reddy, without ascertaining from Pratap Reddy, whether Pratap Reddy was actually ready to relinquish his rights under the said earlier agreement with her.(iii) Pratap Reddy has denied knowledge of the agreement between the Vendor and the Vendee.(iv) Within a month and a few days from the date of execution of the agreement between the Vendor and the Vendee, after the Vendee tendered full consideration, the Vendor executed a registered deed of conveyance in favour of Pratap Reddy, without any prior intimation to the Vendee, and without giving the Vendee any opportunity to persuade Pratap Reddy to abrogate his earlier agreement with the Vendor.59. It is well settled that the onus of proof lies on the party who makes an allegation. It was for the Vendor to establish that the agreement dated 21.3.1984 was subject to the condition as alleged by the Vendor, that the Vendee and/or her husband would negotiate with Pratap Reddy to get his earlier agreement with the Vendor cancelled. The Vendor failed to discharge her onus of proving that there was such a condition in the agreement dated 21.3.1984. The Trial Court and the High Court rightly did not believe the Vendor.60. The effective concurrent finding of the High Court and the Trial Court, that the Vendee had been ready and willing to perform and had in fact performed her obligations under the Agreement dated 21.3.1984, is also unexceptionable for the following reasons:(i) As observed above, the Vendee paid Rs.40,000/- out of the total consideration of Rs.75,000/- on the date of execution of the Agreement dated 21.3.1984 itself.(ii) It is not disputed that the Vendee paid a further Rs.5,000/- to the Vendors husband against a receipt.(iii) It is the Vendors own case that in terms of the Agreement dated 21.3.1984, the full consideration was to be paid within 45 days. The Vendees claim that she tendered Rs.30,000/- on 30.4.1984 was not disputed by the Vendor in her legal notice/letter dated 20.6.1984.(iv) In any case the Vendee obtained Demand Draft No.463961 dated 4.5.1984 for Rs.30,000/- in favour of the Vendor towards balance consideration, within 47 days from the execution of the Agreement dated 21.3.1984.(v) It is well settled that time is not of essence to agreements for sale of immovable property, unless the agreement specifically and expressly incorporates the consequence of cancellation of the agreement, upon failure to comply with a term within the stipulated date.61. The concurrent findings of the High Court and the Trial Court that the Vendee was ready and willing to perform and had performed her obligations under the Agreement dated 21.3.1984, which as observed above, are based on evidence and sound reasons, do not call for interference of this Court.62. It is true that the Trial Court had directed the Vendor to pay the balance of Rs.5,000/- on or before 15.4.1994, failing which the suit for specific performance would stand dismissed. However, any time granted by the Court at its discretion, can always be extended by the Court.63. In any case, the Vendor had filed an appeal against the decree in the suit for specific performance. The Vendee, who had been litigating for about 10 years by April, 1994 and had already paid Rs.45,000/- over 10 years ago, but not got the suit land, could not be expected to put in more money, until the decree assumed finality, upon disposal of the appeal.64. Since there was an appeal of the Vendor pending, the failure of the Vendor to put in Rs.5,000/- within the time stipulated by Court, wold not, in itself, disentitle the Vendor to the relief of specific performance. It was for the Court to decide whether or not to extend the time for payment of Rs.5,000/-. The Appellate Court rightly expressed its discretion in favour of the Vendee.67. The relief of specific performance of an agreement, was at all material times, equitable, discretionary relief, governed by the provisions of the Specific Relief Act 1963, hereinafter referred to as S.R.A. Even though the power of the Court to direct specific performance of an agreement may have been discretionary, such power could not be arbitrary. The discretion had necessarily to be exercised in accordance with sound and reasonable judicial principles.70. After the amendment of Section 10 of the S.R.A., the words specific performance of any contract may, in the discretion of the Court, be enforced have been substituted with the words specific performance of a contract shall be enforced subject to .... The Court is, now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the S.R.A. Relief of specific performance of a contract is no longer discretionary, after the amendment.71. An agreement to sell immovable property, generally creates a right in personam in favour of the Vendee. The Vendee acquires a legitimate right to enforce specific performance of the agreement.72. It is well settled that the Court ordinarily enforces a contract in its entirety by passing a decree for its specific performance. However, Section 12 of the Specific Relief Act carves out exceptions, where the Court might direct specific performance of a contract in part.73. Where a party to the contract is unable to perform the whole of his part of the contract, the Court may, in the circumstances mentioned in Section 12 of the S.R.A., direct the specific performance of so much of the contract, as can be performed, particularly where the value of the part of the contract left unperformed would be small in proportion to the total value of the contract and admits of compensation.74. The Court may, under Section 12 of the S.R.A. direct the party in default to perform specifically, so much of his part of the contract, as he can perform, provided the other party pays or has paid the consideration for the whole of the contract, reduced by the consideration for the part which must be left unperformed. In this case the Vendee had apparently tendered the full consideration within the time stipulated in the Agreement dated 21.3.1984, that is, within 45 days or if not 45, within 47/48 days from the date of its execution.75. As observed above, the Vendee admittedly paid Rs.40,000/- from out of the total consideration of Rs.75,000/- on the date of execution of the agreement, a further sum, of Rs.5,000/- sometime thereafter, which was duly acknowledged and also offered to pay the balance Rs.30,000/- within 30.4.1984 that is, within 45 days from the date of execution of the contract, which the Vendor did not accept. A Demand Draft for equivalent amount of Rs.30,000/- was obtained from Canara Bank on 4.5.1984, that is the 47 th day of the execution of the agreement.76. Admittedly, a major portion of the full consideration, that is, Rs.45,000/- had already been paid by the Vendor to the Vendee and the Vendor had been ready to and had offered to pay the entire balance consideration to the Vendor. However, the Vendor purported to sell 100 square yards of the suit land to Pratap Reddy by executing a registered deed of conveyance in his favour.78. The Vendee claimed specific performance of the agreement dated 21.3.1984 in its entirety, and sought execution and registration of a deed of conveyance in respect of the entire suit land comprising 300 square yards, but without impleading Pratap Reddy to whom ownership of 100 square yards of land had been transferred by a registered deed of conveyance.79. A transferee to whom the subject matter of a sale agreement or part thereof is transferred, is a necessary party to a suit for specific performance. Unfortunately, the Vendee omitted to implead Pratap Reddy. By the time she filed an application to implead Pratap Reddy, in 1989, the suit for specific performance of the agreement dated 21.3.1984 had become barred by limitation as against Pratap Reddy.80. Under the Limitation Act 1963 the period of limitation for filing a suit for specific performance is three years from the date fixed for performance of the contract, or if no date is fixed, then three years from the date on which the Vendee is put to notice of refusal to perform the agreement (Item No.54 in Part II of the Schedule to the Limitation Act 1963).82. The Vendee was put to notice of the refusal of the Vendor to execute the agreement dated 21.3.1984, by the Vendors letter/legal notice dated 20.6.1984. Any suit for specific performance would be time barred by June/July 1987. Moreover, it is a matter of record that the Vendee knew of the registered deed of conveyance in favour of Pratap Reddy, when she instituted the suit in 1984.83. The Vendee neither amended her pleadings in the plaint nor amended the prayers. Pratap Reddy was simply added defendant. The Court adding Pratap Reddy as defendant in the suit for specific performance, did not make any direction in terms of the proviso to Section 21(1) of the Limitation Act, that the suit against Pratap Reddy be deemed to be instituted at any earlier date. There could therefore be no question of any relief against Pratap Reddy in the suit for specific performance.84. The Vendee did not implead the Vendor as defendant in her later suit (Original Suit No.401 of 1985, renumbered Original Suit No.92 of 1993) inter alia for a declaration that the Deed of conveyance executed by the Vendor in favour of Pratap Reddy was null and void. The suit has rightly been dismissed for non joinder of the Vendor as defendant. There could be no question of a document being adjudged null and void without impleading the executant of the document, as defendant.85. The suit for specific performance being time barred against Pratap Reddy, and the suit against Pratap Reddy also having been dismissed for non joinder of the Vendor, there could be no question of nullifying the rights that had accrued to Pratap Reddy, pursuant to the Deed of Conveyance dated 25.4.1984 executed by the Vendor transferring 100 sq. yards of the suit land to Pratap Reddy. Moreover, there was apparently an agreement in writing executed between the Vendor and Pratap Reddy on or about 25.01.1984 before execution of the agreement between the Vendor and the Vendee.86. Since title in respect of 100 square yards had passed to Pratap Reddy and the suit for specific performance was barred by limitation, the Trial Court was constrained to decree the suit for specific performance in part, and direct that a Deed of Conveyance be executed in respect of the balance 200 square yards of the suit land, under the ownership and control of the Vendor.87. Section 12 of the SRA is to be construed and interpreted in a purposive and meaningful manner to empower the Court to direct specific performance by the defaulting party, of so much of the contract, as can be performed, in a case like this. T o hold otherwise would permit a party to a contract for sale of land, to deliberately frustrate the entire contract by transferring a part of the suit property and creating third party interests over the same.88. Section 12 has to be construed in a liberal, purposive manner that is fair and promotes justice. A contractee who frustrates a contract deliberately by his own wrongful acts cannot be permitted to escape scot free.89. After having entered into an agreement for sale of 300 Sq. yards of land, with her eyes open, and accepted a major part of the consideration (Rs.45,000/- out of Rs.75,000/-) it does not lie in the mouth of the Vendor to contend that the contract should not have specifically been enforced in part, in respect of the balance 200 sq. yards meters of the suit land which the Vendor still owned. It is patently obvious that the Vendor did not disclose any earlier agreement to the Vendee, as discussed above. The agreement in writing dated 21.3.1984, does not bear reference to any earlier agreement, as noted above.90. Instead of awarding damages in respect of the part of the contract which could not be enforced and/or in other words damages for breach of agreement to sell the entire suit land, the Trial Court reduced the total consideration by 1/3 rd of the agreed amount, in lieu of damages, as one third of the area agreed to be sold to the Vendee could not be sold to her. The total price agreed upon being Rs.75,000/- for the entire suit land, comprising 300 square yards, the agreed price works out to Rs.25,000/- for 100 square yards and/or Rs.2,500/- per square yard. The Trial Court very fairly reduced the consideration by Rs.25,000/-, being the price of 100 square yards of land computed proportionally, in lieu of damages. The Vendor can have no legitimate reason to complain.91. Since we have upheld the dismissal of Suit No.92/1993 filed by the Appellant against Pratap Reddy, it is not really necessary to go into the question of whether the said suit was barred under Order II Rule 2 of the Civil Procedure Code as contended by Mr. Navare. It is true that, the clubbing of suits for hearing them together and disposal thereof by a common judgment and order is for practical reasons. Such clubbing together of the suits do not convert the suits into one action as argued by Mr. Navare. The suits retain their separate identity as held in Mahalaxmi Coop. Housing Society Ltd. and Ors. v. Ashabhai Atmaram Patel (supra). The clubbing together is done for convenience, inter alia, to save time, costs, repetition of procedures and to avoid conflicting judgments.92. We are, however, unable to agree with Mr. Navares argument that the Court is under an obligation to reject the subsequent suit, irrespective of whether objection of bar under Order II Rule 2 of the CPC was raised or not.93. The plea of bar under Order II Rule 2 of the CPC is a technical plea which has to be pleaded and satisfactorily established. In R. A. Oswal v. Deepak Jewellers and Ors. (1999) 6 SCC 40 [42] , this Court held that if the plea of bar under Order II Rule 2 is not taken, the Court should not suo moto decide the plea. Moreover, in Dalip Singh v. Mehar Singh Rathee and Ors. (2004) 7 SCC 650   , this Court held that the plea cannot be raised before this Court if not raised in the High Court.