PUKHRAJ D. JAIN AND ORS.

G. GOPALAKRISHNA

APRIL 16, 2004

[S. RAJENDRA BABU AND G.P. MATHUR, JJ.]

Civil Procedure Code, 1908; Ss. 10, 47, 48 and 151/Limitation Act, 1963; Article 54/Specific Relief Act, 1963; Section 16C:

Agreement to sell property-Payment of part consideration by first partypurchaser-Transfer of part possession by owner-Rescinding the contract first party filed a suit for recovery of advance against the owner-Application for amendment to convert the suit into one for specific performance of the agreement of sale-Rejected by trial Court on the ground of limitation- D Owner sold the property to another party and transferred possession thereof-

Suit decreed by trial Court for recovery of the amount....,....Challenged by judgment creditor himself by filing a revision petition-Allowed by High Court observing it as unusual revision-Suit for eviction filed by new owners claiming possession and mesne profit-Another suit for specific performance filed by the first party against original owner and also filed an application for stay of suit under E Section JO CPC on ground of res judicata-Trial Court dismissed the suit as barred by limitation-Appeal allowed by the High Court remanding the matter to trial Court for disposal of stay application-On appeal, Held: It is open to the Court to decide early the suit which was instituted with an oblique motive to cause harassment to opposite party-Findings of the High Court wholly F erroneous in law since Section 10 CPC enacts merely a rule of procedure and a decree passed in contravention thereof is not a nullity-Since original owners were not prepared to execute the sale deed and trial Court having rejected the suit for specific performance as barred by limitation, the first party has notice of refusal of performance-Article 54 of Limitation Act attracted-Since the first party hmself was not willing to perform his part of the agreement, no G decree of specific performance could be passed in his favour-Hence, the trial Court rightly held that the suit was not maintainable as barred by limitation.

Appellant Nos. 6 to 10, original owners, executed an agreement to sell the suit property in favour of respondent and in consideration thereof

P.O. JAIN v. G. GOPALAKRISHNA 325

received certain sum of money by way of advance and in lieu thereof A parted with possession of the ground floor of the property to respondent.

The respondent rescinded the contract and filed a suit for recovery of the advance. After lapse of considerable period of time he also filed an application to convert the suit into one for specific performance of the agreement of sale. Trial Court rejected the application on the ground that B the suit for specific performance had become barred by limitation. High Court dismissed the Revision Petition. The trial Court decreed the suit for recovery of the advance. Respondent filed a Revision petition. High Court allowed the revision petition, dismissing the suit observing it as unusual revision.

In the meanwhile original owners sold the property to appellant Nos. 1 to 5. New owners of the property filed an eviction petition against the respondent seeking eviction and mesne profit. However, the respondent also filed another suit for specific performance of the earlier agreement and also filed an application seeking stay of suit on the ground of res judicata. Trial Court dismissed the suit as barred by limitation. Aggrieved, D

respondent preferred an appeal which was allowed by the High Court remanding the matter to the trial Court for disposal of the application for stay of the suit. Hence the present appeal.

Allowing the appeal, the Court E HELD: 1.1. The view taken by the High Court is wholly erroneous in law and is set aside. The proceedings in the trial of a suit have to be conducted in accordance with provisions of the Code of Civil Procedure.

The object of Section 10 CPC is to prevent Courts of concunent jurisdiction from simultaneously trying two parallel suits in respect of the F same matter in issue. The Section enacts merely a rule of procedure and a decree passed in contravention thereof is not a nullity. It is not for a litigant to dictate to the Court as to how the proceedings should be conducted, it is for the Court to decide what will be the best course to be adopted for expeditious disposal of the case. In a given case the stay of proceedings of later suit may be necessary in order to avoid multiplicity G of proceedings and harassment of parties. However, where subsequently instituted suit can be decided on purely legal points without taking evidence, it is always open to the Court to decide the relevant issues and not to keep the suit pending which has been instituted with an oblique motive and to cause harassment to the other side. [329-H; 330-C-D] H

A 1.2. The limitation of 3 years under Article 54 of the Limitation Act has to be reckoned from the date fixed for the performance, or if, no such date is fixed, when the plaintiff has notice that performa11ce is refused.

Appellant Nos. 6 to 10 (original owners of the property) had opposed the application moved by the respondent in the earlier suit for amendment seeking relief of specific performance of the agreement on the ground of B limitation and their plea was accepted. Thus it is crystal clear that long before filing of the present suit the respondent had notice of the fact that the original owners were not prepared to execute the sale deed in his favour. The original owners (appellant Nos. 6 to 10) sold the property in dispute in favour of appellant Nos. 1 to 5 on 18.4.1985 after the amendment C application had been rejected by the trial Court on the finding that the relief for specific performance had become barred by limitation. On these facts no other inference was possible and the trial Court was perfectly justified in holding that the suit was barred by limitation. (331-C-D-E]

1.3. It is well settled that equitable remedy of specific performance D cannot be had on the basis of pleadings which do no~ contain averments of readiness and willingness of the plaintiff to perform his part of the contract in terms of Forms 47 and 48 of CPC. In the instant case, the respondent himself sent a legal notice rescinding the contract and thereafter filed a suit claiming refund of the advance paid by him. In fact E the suit for recovery of the amount was decreed by the trial Court but he himself preferred a revision against the decree wherein an order of rejection of the plaint was passed by the High Court,. In such circumstances, if is absolutely apparent that the respodet was not ready and willing to perform his part of the contract and in view of the mandate of Section 16 of the Specific Relief Act. no decree for specific performance F could be passed in his favour. The trial Court rightly held that the suit

filed by the respondnt was not maintainable. (331-H; 332-A-B-C)

2. In view of the facts and circumstances of the case, the decree' passed by the trial Court dismissing the suit was perfectly correct and the High Court committed manifest error of law in not adverting to these G aspects of the matter and in accepting the contention raised on behalf of the respondent, which relate to a matter of.procedure and not to substance, that the application moved by him under Section 10 CPC seeking stay of the suit had not been considered on merits. (332-D]

H CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2082 of 1998.

...

From the Judgment and Order dated 17.3.97 of the Kamataka High A Court in R.F.A. No. 635 of 1996.

P.R. Ramasesh for the Appellants.

F.C. Vidya Sagar for the Respondent.

B The Judgment of the Court was delivered by

G.P. MA THUR, J. 1. This appeal by special leave has been preferred by the defendants against the judgment and order dated 17.3.1997 of High Court of Kamataka by which the Regular First Appeal preferred by the plaintiff was allowed arid case was remanded to the trial court with certa~ C directions.

2. In order to understand the controversy involved it is necessary to set out the facts which are little involved.

(i) The appellant no. 6 to 10 are sons and daughters of Shri M.G. D Dayal and they were owners of the suit property (residential building at Jayanagar, Bangalore). They executed an agreement to sell the suit property in favour of Dr. G. Gopalakrishna (plaintiff/respondent no. l) on 5.12.1974 for a consideration of Rs. 1,42,500 and received Rs. 42,500 by way of advance. The respondent no. I was also put in E possession of the ground floor of the property .

(ii) The respondent no. I issued a legal notice rescinding the contract and claimed refund of the advance amount paid by him. On 7. I I. I 977 he filed OS No.801of1977 (subsequently renumbered as OS No.1891 of I 980) against the appellant nos. 6 to IO (owners of the property) f 1 claiming the amount which had been paid by way of advance. After considerable period of time respondent no. I moved an amendment application seeking permission to convert the suit into one for specific performance of the agreement of sale. This application was rejected by the trial court on 3.12.1984 on the ground that the suit for specific performance had become barred by limitation. The Revision Petition preferred against the said order being CRP No. 702 of 1985 was dismissed by the High Court at the admission stage on 29 .5. I 985.

(iii) The appellant nos. 1 to 5 (Pukhraj D. Jain and his four sons) pur.chased the property in dispute from the original owners, namely, H respondent nos. 6 to 10 on 18.4.1985 for Rs. 3,60,000 and they were

put in possession of the first floor of the building.

(iv) Respondent no.1 filed an amendment application on 26.6.1985 seeking an amendment of the plaint in OS No.801 of 1977 and claiming an additional amount of Rs.125 towards the cost of the legal notice. The amendment application was allowed and the respondent no. l was required to pay an additional court fee of Rs.12.50 in view of the enhanced claim. However, instead of paying aforesaid amount the respondent no.1 filed a memo stating that he was not in a position to pay the court fee and as such the plaint may be rejected being deficiently stamped. The trial court decreed the suit or recovery of the amount on 24.7.1985.

(v) Though the suit filed by respondent no.l was decreed yet he preferred a revision petition being CRP No.3797of1985 challenging the judgment and decree passed in his favour. The High Court though observed that it was an unusual revision filed by a plaintiff yet allowed the same on 18.2.1987, set aside the judgment and decree of the trial court and rejected the plaint.

(vi) The appellants nos. l to 5 after execution of the sale deed in their favour on 18.4:1985, filed a suit being OS no. 4631 of 1986 seeking eviction of respondent no. I from the ground floor of the house in dispute and also for mesne profits.

(vii) On 2.4.1988 the respondent no. l filed another suit being OS no.1629 of 1988 against appellant nos. 6 to 10 in the Court of City Civil Judge, Bangalore for specific performance of the agreement dated 5.12.1974. In this suit issue no.3 relating to the bar of limitation and issue no.4 relating to the maintainability of the suit were framed.

The respondent no. l also filed an application under section 10 CPC seeking stay of his own suit OS no. 1629 of 1988 on the ground that the issues involved were also directly and substantially in issue in a previously instituted suit being OS no. 4631 of 1986 which had been filed by the appellants nos. I to 5 for his eviction from the ground floor of .the house and for possession.

(viii) The Addi. City Civil Judge, Bangalore dismissed OS no. 1629 of 1988 on 30.9.1995 after deciding issuesno.3 and 4 wherein he held that the suit was barred by limitation and the same was not H maintainable.

(ix) The respondent no. I preferred RF A no.635 of I 996 in the High A Court against the judgment and decree dated 30.9. I 995 of the Addi.

City Civil Judge, Bangalore. The High Court allowed the appeal and set aside the judgment and decree of the Addi. City Civil Judge and remanded the matter to the trial court to dispose of the application moved by the respondent no. I (plaintiff) under section I 0 CPC for B stay of his suit. It is this judgment and order which is subject matter ' of challenge in the present appeal.

(x) The suit for eviction of respondent no. I and possession (OS no. 463 I of I 986) filed by the appellant nos. I to 5 was decreed by the . trial court on 20.I2.I997. RFA no. I7I of 1998 preferred by, C respondent no. I against the aforesaid judgment. and decree was dismissed by the High Court on 2.7.2001. This development has taken' place subsequent to the filing of special leave petition in this Court.,

3. The only ground urged in the appeal preferred by respondent no. I in the High Court was that as he had filed an application under section lO D CPC on 21.10.1993 seeking stay of his suit (OS no.I629 of 1988), it was obligatory upon the trial court to consider the said application first before deciding issues no.3 and 4. The High Court has observed that the defendantS in the suit had sought time to file objection in reply to the application moved under section 10 read with section I 5 I of CPC seeking stay of his suit.

Thereafter the suit was listed on several dates for consideration of the E application but finally, after hearing the counsel for the parties, the learned Addi. City Civil Judge dismissed the suit by deciding issues no. 3 and 4 an~ the application under section 10 CPC was not at all considered. It was obligatory on the part of the learned Addi. City Civil Judge to have considered the application moved under section I 0 CPC at the first instance before F deciding issues no. 3 and 4. The High Court has held that the course adopted by the learned Addi. City Civil Judge in not deciding the application moved by the plaintiff and in proceeding to decide issues no. 3 and 4 was wholly illegal. On these findings the judgment and decree of the Addi. City Civil Judge were set aside and the case was remanded to the court of Addi. Civil Judge with a direction to dispose of the application under section I 0 read G with 15 l CPC moved by the plaintiff on priority basis.

4. We have heard learned counsel for the parties and have perused the records. In our opinion, the view taken by the High Court is wholly erroneous in law and must be set aside. The proceedings in the trial of a suit have 'to be conducted in accordance with provisions of the Code of Civil Procedure. H

A Section l 0 CPC no doubt lays down that no court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having B jurisdiction to grant the relief claimed. However, mere filing of an application

under section lO CPC does not in any manner put an embargo on the power of the court to examine the merits of the matter. The object of the section is to prevent Courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue. The section enacts merely a rule of procedure and a decree passed in contravention thereof is not a C nullity. It is not for a litigant to dictate to the court as to how the proceedings should be conducted, it is for the court to decide what wm be the best course to be adopted for expeditious disposal of the case. In a given case the stay of proceedings of later suit may be necessary in order to avoid multiplicity of proceedings and harassment of parties. However, . where subsequently instituted suit can be decided on purely legal points without taking evidence, D it is always open to the court to decide the relevant issues and not to keep the suit pending which has been instituted with an oblique motive and to cause harassment to the other side.

5. The facts in the present case speak for themselves. The agreement E in question was executed by appellants nos.6 to 10 (original owners) in favour of G. Gopalakrishna (respondent no. I) on 5 .12.197 4. He himself issued a legal notice rescinding the contract and claiming refund of the advance amount paid. Thereafter on 7 .11.1977 he filed a suit for recovery of the advance amount paid by him. This clearly shows that he gave up his right under the contract for execution of sale deed of the property in his favour.

F After considerable period of time he filed an application for amendment seeking to convert the suit into one for specific performance of agreement of sale but the said application was dismissed by the trial court on 3.12.1984 as being barred by limitation. The Revision preferred against_ the said order was dismissed by the High Court and therefore the finding of the trial court that G the relief seeking specific performance of agreement of sale had become time barred attained finality. The suit for recovery of the amount was decreed by the trial Court on 24.7.1985 but on account of very clever device adopted by respondent no.l of seeking additional sum of Rs. 125 towards cost of legal notice and thereafter not paying the requisite additional court fee of Rs. 12.50 on the enhanced claim, the High Court in a Re".ision filed by him set aside H the decree for refund of the amount and rejected the plaint. .The suit giving

rise to the present appeal was instituted by respondent no. I on 2.4.1988 A wherein he again sought specific performance of the agreement to sell dated 5 .. 12.1974. The trial court was of the opinion that the present suit was filed after nearly 14_years. Even in the earlier suit (OS no.80I of I977) the amendment sought by the respondent no. I wherein he wanted to convert his suit into one for specific performance of agreement of sale had been rejected B and a finding had been recorded that the relief for specific performance had already become time barred and this finding had been affirmed in Revision by the High Court. Article 54 of the Limitation Act provides a limitation of three years for instituting a suit for specific performance of a contract. This period of 3 years has to be reckoned from the date fixed for the performance, or if, no such date is fixed, when the plaintiff has notice that perfo, mance is C refused. The appellant nos. 6 to 10 (original owners of the property) had opposed the application moved by respondent no. I in the earlier suit for amendment seeking relief of specific performance of the agreement on the ground of limitation and their plea was accepted. Thus it is crystal clear that long before filing of the present suit the respondent no. I had notice of the D fact that the original owners were not prepared to execute the sale deed in his favour. The original owners (appellant nos. 6 to 10) sold the property in dispute in favour of appellants nos. I to 5 on 18.4.1985 after the amendment application had been rejected by the trial court on the finding that the relief for specific performance had become barred by limitation. On these facts no other inference was possible and the trial court was perfectly justified in E. holding that the suit (OS no. 1629 of 1988) was barred by limitation.

6. Section 16(C) of the Specific Relief Act lays down that specific performance of a contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing F to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation II to this sub-section provides that the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction. The requirement of this provision is that plainti.ff must aver that he has always been ready and willing to perform the G essential terms of the contract. Therefore not only there should be such an averment in the plaint but the surrounding circumstances must also indicate that the readiness and illingness continue from the date of the contract till the hearing of the suit. It is well settled that equitable remedy of specific performance cannot be had on the basis of pleadings which do not contain H

A averments of readiness and willingness of the plaintiff to perform his contract in terms of Forms 47 and 48 of CPC. Here the respondent no. I himself sent a legal notice rescinding the contract and thereafter filed OS no.80 I of 1977 on 7. l l .1977 claiming refund of the advance paid by him. In fact the suit for recovery of the amount was decreed by the trial court on 24.7.1985 but he B himself preferred a revision against the decree wherein an order of rejection of the plaint was passed by the High Court. In such circumstances, it is absolutely apparent that the respondent no. I was not ready and willing to perform his part of the contract and in view of the mandate of section 16 of the Specific Relief Act no decree for specific performance could be passed in his favour. The trial court, therefore, rightly held that the suit filed by C respondent no. I was not maintainable.

7. In view of these facts the decree passed by the trial court dismissing the suit was perfectly correct and the High Court committed manifest error of law in not adyerting to these aspects of the matter and in accepting the contention raised on behalf of respondent no. I, which relate to a matter of D procedure and not to substance, that the application moved by him under section I 0 CPC seeking stay Of the suit had not been considered on merits.

The appeal is accordingly allowed with costs throughout and the judgment and order of the High Court dated 17 .3. I 997 is set aside. The E decree dismissing the suit passed by the trial court is affirmed.

S.K.S.

Appeal allowed