Andhra Pradesh High Court - Amravati

A.Kanthudu vs S.Venkat Narayana on 14 December, 2023

            THE HON'BLE SRI JUSTICE V.SRINIVAS

                   APPEAL SUIT No.678 of 2007

JUDGMENT:

This regular appeal under Section 96 Code of Civil

Procedure (hereinafter referred to as 'CPC') is directed against

the decree and judgment in O.S.No.8 of 2005 dated

25.10.2007 on the file of the Court of learned I Additional

District Judge, Kurnool.

2. The defendant, before the trial Court, is the appellant.

The respondent herein is the plaintiff.

3. The respondent instituted the suit for specific

performance of agreement of sale.

4. Before adverting to the material and evidence on record

and nature of findings in the judgment of the trial Court, it is

necessary to scan through the case pleaded by the parties in

their respective pleadings.

5. The case of the respondent/plaintiff in brief in the

plaint was as follows:

(i) The appellant has been in possession and

enjoyment of the plaint schedule property of an extent

of Ac.3.00 cents in Survey No.5 of Pasupula Village

since 21.12.1995, having purchased the same under a

registered sale deed. He offered to sell the same to the

respondent and respondent agreed to purchase the

same for a consideration of Rs.12,35,000/-. On

11.01.2005, respondent paid an amount of Rs.35,000/-

to the appellant towards advance, also agreed to pay

the remaining amount at the time of execution of

regular sale deed, thereby executed an agreement of

sale and on the same day appellant handedover

photostat copy of registered sale deed dated 21.12.1995

to the respondent. As per the terms and conditions of

the said agreement of sale, respondent has to pay the

balance sale consideration on or before 11.02.2005 and

obtain a regular sale deed.

(ii) On 22.01.2005, respondent approached the

appellant with balance sale consideration and

requested him to receive the same and execute a sale

deed in his favour. But appellant expressed personal

inconvenience to receive the same and execute the sale

deed and informed that he would receive the same on

05.02.2005 and asked the respondent to come to the

Office of Sub-Registrar.

(iii) On 27.01.2005, the respondent received a legal

notice got issued by the sisters of the appellant with

false and frivolous allegations. Then the respondent

approached the appellant, who inturn informed that he

would come to the Office of Sub-Registrar on

05.02.2005. On that respondent went to the office of

Sub-Registrar with balance sale consideration and

waited till 05.00 p.m. on 05.02.2005, but the appellant

did not turn up for the reasons best known to him. As

the due date was approaching, respondent deposited

the balance sale consideration of Rs.12,70,000/- in

Andhra Bank, Ashok Nagar Branch on 07.02.2005.

(iv) Then the respondent received a legal notice dated

05.02.2005 from the appellant with false allegations

along with Banker's Cheque bearing No.750012 dated

05.02.2005 for Rs.35,000/-, wherein it was mentioned

that the agreement of sale is cancelled. The Banker's

Cheque with mis-description is in the hands of the

respondent un-encashed, because he is not agreed for

appellant's illegal attempt to cancel the agreement of

sale. Then the respondent got issued a telegraph notice

on 09.02.2005 demanding the appellant to receive the

amount and execute sale deed in his favour. Hence, the

suit.

6. The appellant/defendant denying all the allegations in

the plaint and contending in the written statement as follows:

(i) Having come to know about the existence of false

agreement of sale, appellant returned Rs.35,000/- to the

respondent and issued a legal notice to the respondent to

the effect that the alleged agreement of sale was cancelled.

The personal deposit of Rs.12,70,000/- made by the

respondent will not amounts to comply of condition of

said agreement. The respondent is not entitled to get the

sale registered as there is no consensus ad idem. There is

no concluded contract between the parties. There is no

cause of action to file the suit. Hence, prays to dismiss the

suit with costs.

7. On these pleadings, the trial Court settled the following

issues for trial:

"1.Whether the agreement of sale dated 11.01.2005 is true, valid and binding on the defendant?

2.Whether there is no consensus ad idem and contract is vitiated by fraud and misrepresentation, as being claimed by the defendant? and

3.To what relief?"

8. At the trial, on behalf of the respondent/plaintiff,

P.Ws.1 to 3 were examined while relying on Exs.A.1 to A.12

in support of his contentions. On behalf of the

appellant/defendant, D.W.1 was examined and no

documents were exhibited.

9. Basing on the material and evidence, trial Court came

to conclusion that the agreement of sale dated 11.10.2005 is

true, valid and binding on the appellant and the respondent

is entitled for the relief of specific performance. Thus, decreed

the suit.

10. It is against this decree and judgment, the

appellant/defendant preferred this appeal.

11. Heard Sri Y.Mallikarjuna Reddy, learned counsel for

the appellant/defendant and Sri R.Gopi Mohan, learned

counsel for the respondent/plaintiff.

12. For the sake of convenience, the parties hereinafter

referred to as they arrayed before the trial Court.

13. It is against this backdrop, the following points, which

arise for determination need consideration now:

1. Whether the agreement of sale dated 11.01.2005 is true, valid and binding on the defendant?

2. Whether there is no consensus ad idem between the parties and the contract is vitiated under misrepresentation and fraud as claimed by the defendant?

3. Whether the Court below failed to follow the judgment of the Hon'ble Supreme Court while receiving the documents?

4. Whether the defendant is entitled to cancel the agreement unilaterally?

5. Whether the receipt of advance amount of Rs.35,000/- is quite meager, when the agreed amount of sale of land is more than value of Rs.12,00,000/-and cannot be placed reliance on the advance amount said to be received?

6. Whether there is any concluded contract or agreement to enforce the same in this case?

7. Whether there is any unfair advantage to the plaintiff over the defendant? and

8. To what relief?

14. Before answering the above points, this Court would

like to refer the brief arguments advanced by the learned

counsel on both sides.

15. Sri Y.Mallikarjuna Reddy, learned counsel for the

appellant/defendant submits that the relief of specific

performance is purely discretionary and equitable relief as

specified under Section 20 of Specific Relief Act, 1963 and the

discretion is vested with the Court and that while exercising

such discretion and equities, the Court is required to

consider all pros and consequences of the case as may call on

to parties in exerting the discretion as well it is not used as

an instrument of oppression to have undue advantage to the

plaintiff.

16. He further submits that the Court below not properly

appreciated the pleadings and evidence of both parties to

come to conclusion that there is consensus ad idem.

17. He also submits that on 27.01.2007 itself, plaintiff

received a notice from the sisters of the defendant claiming

shares in suit property and resisted the agreement of sale

made by the defendant; that despite of notice, the contention

of the plaintiff that he visited the office of Sub-Registrar,

Kurnool on 05.02.2005 with balance amount and waited till

05.00 p.m. are all false; that the plaintiff also pleaded in his

pleadings as well received legal notice dated 05.02.2005 from

the defendant along with banker's cheque bearing No.750012

for Rs.35,000/- by cancelling the agreement and that

subsequent to it on 09.02.2005 plaintiff got issued a notice

demanding for specific performance by the defendant.

18. He further submits that when P.W.1/plaintiff

categorically admitted that he is doing real estate business,

thus, he had knowledge about the disputes and notices

regarding land properties etc., and having admitted receipt of

notice from the sisters of defendant as well defendant on

05.02.2005 clearly goes to show the misrepresentation and

fraud payed on the defendant by the plaintiff. When P.W.1

himself admitted receipt of legal notice, he did not express his

readiness in writing to obtain registered sale deed from the

defendant. It goes to show that he is not ready and willing to

perform his part of contract.

19. He further submits that plaintiff himself admitted that

he did not pay the remaining amount of Rs.12,00,000/- to

the defendant and deposited the same in his account does

not mean to say he is ready and willing to perform his part of

contract and that plaintiff knows well that defendant already

cancel the agreement. More so, P.W.1 himself admitted that

he did not inform to the defendant about the deposit of

amount into his account, which goes to show that he is not

ready and willing to perform his contract.

20. He further submits that the trial Court went on wrong

in giving weight to the testimony of P.Ws.2 and 3 and their

evidence is not much effective, because P.W.2 categorically

admitted that he did not know as to what happened after

execution of agreement of sale; that defendant is having four

sisters and when Ex.A.1 was executed, none of the family

members were present, as well P.W.3 also admitted that the

agreement under Ex.A.1 was prepared on white paper as

counter of registration office to sell the stamp papers was

closed, are all created for the purpose of this case. P.W.3

categorically admitted that subsequent to execution of the

agreement of sale under Ex.A.1, the plaintiff did not approach

him and the plaintiff being document writer himself read and

write his documents.

21. He further submits that though defendant subjected to

lengthy cross examination, but nothing was elicited to

disbelieve his testimony and he stated that an amount of

Rs.35,000/- was given to him, was returned within a week

from the date immediately and that he has categorically

mentioned in his notice that he cancelled the agreement as

his sisters and family members are not agreed for the same.

22. He further submits that there is no concluded contract

or agreement to enforce it. Because, the plaintiff paid very

meager amount as an advance out of total sale consideration

of Rs.12,35,000/-; that even the said advance amount of

Rs.35,000/- was sent back by the defendant through

banker's cheque within the time specified in the agreement;

that defendant got cancelled the agreement by issuing notice;

that plaintiff kept the banker's cheque with him and that

except parting of such meager amount, there is no amount

spent by the plaintiff under the agreement. As such, there is

no concluded contract of agreement to enforce the same

under specific performance.

23. He further submits that as per Section 20(2)(a)(c) the

trial Court gives the plaintiff an unfair advantage over the

defendant, when the defendant entered into contract under

the circumstances which though not rendering the contract

voidable, makes it inequitable to enforce specific

performance; that the trial Court may properly exercise the

discretion to decree the specific performance as in the

present case the plaintiff has not done any substantial acts

or suffered losses in consequence of contract capable of

specific performance and that the trial Court failed to

consider the facts and evidence on record.

24. He further submits that the Court below has to

consider the fact that even if it is proved by the plaintiff that

the defendant committed breach of suit agreement and

substantial loss was caused to the plaintiff, the court below

ought to have granted compensation to the extent of loss

suffered is sufficient instead of grant of specific performance.

25. He further submits that the defendant is an illiterate,

agriculturist and living by cultivation; that he is having

sisters and children and admittedly his father purchased the

said property in his name; that on the other hand, plaintiff is

a man of real estate and fraudulently obtained suit

agreement without consent and knowledge of his family

members, if really the plaintiff fairly obtained suit agreement,

he could have negotiate with the family members of the

defendant and entered into suit agreement by paying

substantial amount as an advance under the suit agreement;

that Kurnool is a big city and there are licensed stamp

vendors in the city and he could get the stamp papers from

any licensed stamp vendor and engross the document; that

the evidence of plaintiff witnesses not explained about the

execution of suit agreement on plain paper, despite

availability of stamp vendors in the Kurnool city, clearly

proves that the plaintiff has played fraud on defendant and

obtained suit agreement on plain paper without giving time to

the defendant to think with his family members and execute

the suit agreement with their consent. Thus, it is proved that

the agreement is obtained by playing fraud and without

knowledge of family members of the defendant and

approached the Court with unclean hands to gain unfair

advantage over the defendant and to grab the suit property at

cheaper rate. On the other hand, immediately after execution

of agreement by the defendant, sisters of the defendant got

issued a notice as well defendant returned the advance

amount, which goes to show that the agreement was

cancelled, as such, the agreement of sale was not a

concluded agreement and not in existence. Moreover, if the

plaintiff did not encash the banker's cheque sent by the

defendant, he would have return the same to the defendant

under proper acknowledgment. So, it is nothing but

acceptance of refund of advance amount. Thereby, the

plaintiff has no right to enforce the agreement.

26. He further submits that since the defendant cancelled

the agreement as well return he advance amount, no loss or

injustice caused to the plaintiff as Ex.A.1 is non possessory

agreement and it is cancelled under notice dated 05.02.2005

by refund of advance amount to the plaintiff. Thereby,

agreement is not in subsistence as on the date of filing the

suit. Hence, it is not enforceable. Despite the cancellation of

said agreement and refund of advance amount immediately,

filing of suit for specific performance by the plaintiff shows

his evil intention and motive to grab the suit property; that

the trial Court ought to have considered all these aspects and

maintain equities and balance.

27. In support of his contention, he placed reliance on the

judgments of Hon'ble Supreme Court between A.C.Arulappan

v. AAhlaya Vaik1, Sahadeva Gramani v. Perumal Gramani2,

1 AIR 2001 SC 2783 2 (2005) 11 SCC 454

Parakunnan Veetill Joseph's Son Mathev v. Nedumbara

Kuruvila's Son3, Hemanta Mondal v. Ganesh Chandra

Nasker4, B.R.Mulani v. A.B.Aswathanarayana5, Jain Narain

Parasram Puria v. Pushapa Devi Saraf 6, judgments of the High

Court of A.P. reported between S.Kanaka Durga Manikyomba

v. Rama Pragada Swamy Prakara Rao7, P.Pandit Rao v.

K.Damodar Rao8, D.Vijayalakshmi v. T.K.Vijay Kumar9,

Pushpagiri Muti v. C.Indiramma10 and the judgment of Hon'ble

Privy Council between Ramji Patel v. Rao Kishore Singh11.

28. As against the same, Sri R.Gopi Mohan, learned

counsel for the respondent, submits that after entering into

agreement of sale, defendant failed to perform his part of

contract, though the plaintiff is always ready and willing to

perform the contract; that on the other hand, with an illegal

3 AIR 1987 SC 2328 4 AIR 2015 SC 3757 5 AIR 1993 SC 138 6 (2006) 7 SCC 756 7 AIR 2010 2 AP 99 8 2005 (5) ALD (AP) 646 9 2012 (1) ALD 759 10 AIR 2003 AP 379 11 AIR 1929 PC 190

motive instigated his sisters to issue legal notice as if subject

property is joint family property and the evidence on record

clearly indicates that it is an absolute property of the

defendant.

29. He further submits that by duly informing to the

defendant, plaintiff went to the Sub-Registrar Officer at

Kurnool on 11.02.2005 with balance sale consideration, but

the defendant did not turn up and failed to perform his part

of contract.

30. He further submits that as per Ex.A.1 agreement, it is a

condition that plaintiff has to pay the remaining

consideration on or before 11.02.2005 and to get registered

on his expenses; that when the plaintiff failed to pay the

remaining consideration, the advance paid shall be forfeited

and agreement shall be cancelled and if the defendant fails to

come for registration when the plaintiff calls, plaintiff shall

get the registration through Court of law by deposit the

remaining sale consideration. In the present case, plaintiff

deposited the balance sale consideration in the bank and

intimated to the defendant about his ready and willingness.

31. He further submits that the contention of the defendant

that he got cancelled the agreement of sale by notice dated

05.02.2005, but the said notice contain any legally tenable

grounds, stating that his family members are not willing to

sell the property as per the agreement of sale and in the

notice, it is got mentioned that agreement of sale is cancelled.

But, in-fact, the defendant is not entitled to cancel the

agreement unilaterally when the plaintiff is willing and ready

to pay the balance sale consideration and to obtain registered

sale deed at his expenses.

32. He further submits regarding unfair advantage over the

defendant by the plaintiff that the said defence is liable to be

rejected, because defendant always trying to wriggle out of

the contract. Hence, defendant cannot take advantage of his

own wrong and then pleaded that the grant of specific

performance of agreement would amount to an unfair

advantage. In the present case, defendant entered into an

agreement on 11.01.2005 and agreed to register the property

on 11.02.2005. Immediately, he instigated his sister to issue

a notice claiming share in the subject property. For which,

plaintiff got issued a reply notice on 09.02.205. Meanwhile,

defendant issued a legal notice cancelled the agreement of

sale unilaterally on the ground that his family members are

not agreed to sell the property. For which, plaintiff issued a

reply notice, dated 09.02.2005 and expressed his ready and

willingness to perform his part of contract and call for

execution of regular sale deed by receiving balance sale

consideration, but he did not receive any reply.

33. He further submits that while pending the appeal,

defendant admittedly created thirty party interest by way of

sale deed document No.5139 of 2009 dated 31.07.2009 for

Rs.1,86,000/- and subsequently cancelled the said registered

sale deed under cancellation document No.3511 of 2013

dated 20.05.2013. Thereafter, on the same day he executed a

partition deed between him, his sons and daughter, wherein

he allotted the suit schedule property to his two sons, he and

his daughter taken only Rs.1,00,000/- each by showing the

property allotted to his sons value is Rs.5,00,000/- and

Rs.10,00,000/-. All these acts of the defendant clearly go to

show that subsequent to execution of the agreement of sale,

he is trying to wriggle out of the contract. Hence, the

defendant cannot take advantage of his own wrong and then

pleaded that the grant of decree of specific performance

would amount to an unfair advantage to the plaintiff.

34. He further submits that the defendant did not seek any

stay of depositing the remaining consideration in this Court

or in trial Court. But, as per the orders of the Court, plaintiff

deposited Rs.12,00,000/- on 02.11.2007. Hence, the

contention of the defendant that plaintiff did not done any

substantial acts or suffered losses in consequences of suit

agreement is absolutely wrong. In these circumstances, the

appeal is liable to be dismissed with costs.

35. In support of his contention, he relied upon judgment

of the Hon'ble Supreme Court between Nirmala Anand v.

Advent Corporation Private Limited 12 and judgments of the

High Court of A.P. between T.Krishna Goud v. Sabitha

Kamaluddin13 and Kalipatnapu Atchutamma v. Kommana

Sambamurthy14.

36. POINT No.3:

For this point, this Court perused Ex.A.3 photostat

copy of sale deed, dated 21.12.1995, Ex.A.4 photostat copy of

Pattadar Passbook, Ex.A.5 photostat copy of Title Deed of

defendant, Ex.A.7 photostat copy of Reply Legal Notice, dated

09.02.2005 and Ex.A.8 photostat copy legal notice along with

copy of Banker's Cheque, dated 05.02.2005 for Rs.35,000/-.

37. All these documents are concerned, in the pleadings

and evidence of the plaintiff stated that the defendant himself

got issued Ex.A.8 legal notice to the plaintiff in the month of

February 2005. Exs.A.3 to A.5 photostat copies of sale deed,

12 2002 CJ (SC) 731 13 2010 CJ (AP) 839 14 2002 CJ (AP) 636

pattadhar pass book and title deed of the defendant are

concerned, when plaintiff seeks to produce the originals of

said documents under Ex.A.2 memo, in which it is

categorically mentioned by the learned counsel for the

plaintiff requesting the defendant for cause production of the

original registered sale deed dated 21.09.1995 standing in his

name and also original pattadhar passbook and title deed

issued in the name of the defendant before the Court on

19.04.2006 or on any future date to which the above suit

stands posted. For which, learned counsel for the defendant

received notice, but kept silent over the said memo. The

defendant neither filed original sale deed or title deed or

pattadhar passbook into the Court, which are said to be

exclusive possession of the defendant nor give any reply on

Ex.A.2 memo.

38. On the other hand, he allowed the plaintiff to mark the

photostat copies, which said to have been handed over to the

plaintiff at the time of agreement of sale, which goes any

amount of doubt over the case of the defendant that the trial

Court committed error in receipt of the secondary evidence in

the place of original documents.

39. It is an admitted fact that even Ex.A.8 photostat copy of

the notice is available with the defendant as an office copy,

but he did not choose to file the same nor stated anywhere

that the plaintiff has withdrawn the amount sent by him by

way of cheque. On the other hand, erroneously finding fault

with the trial Court while receiving the secondary evidence

under Section 65 of the Evidence Act. It is a specific

contention made by the plaintiff that inspite of demand made

by him requesting the defendant to produce originals,

defendant knowing fully well that those documents are with

him only, allowed the plaintiff to file the photostat copies.

Even after receipt of notice/memo covered under Ex.A.2, the

defendant failed to cause production of the documents which

were call upon by the plaintiff to produce the same. For all

these reasons, the trial Court followed the judgment of the

Hon'ble Supreme Court while receiving the documents, which

is prohibited under Section 65 of Evidence Act. Thus, this

point is answered accordingly in favour of plaintiff.

40. POINT Nos.1, 2, 4 & 6:

In-order to answer the above points, as seen from the

testimony of P.W.1, defendant agreed to sell the plaint

schedule property for a total consideration of Rs.12,35,000/-

and executed an agreement of sale on 11.01.2005 after

receipt of advance amount of Rs.35,000/- and immediately

after receipt of the advance amount, defendant affixed his

thumb impression on the sale agreement.

41. As could be seen from the written statement, it is

contended by the defendant that he never transacted with the

plaintiff or any others for sale of schedule land and so the

alleged agreement cannot be said to have arisen out of the

genuine talks of the transaction.

42. In view of the claim made by the plaintiff that the

defendant offered and agreed to sell the suit schedule

property and when defendant says never transacted with the

plaintiff or other person for sale of the suit schedule property,

this Court perused Ex.A.8 legal notice said to have been

issued on behalf of the defendant on 05.02.2005, in which

the defendant categorically made a mention that he sold

Ac.03.00 cents of land in Survey No.5 of Pasupula Village for

Rs.12,35,000/- on 11.01.2005 and received Rs.35,000/- as

an advance. So, the said statement culled out from Ex.A.8

cannot be denied by the defendant while he was in witness

box, clearly goes to show that the agreement of sale dated

11.01.2005 is a true and genuine document.

43. Whether agreement of sale is valid, binding and there is

consensus ad idem between the parties and whether

defendant is entitled to cancel the said agreement unilaterally

is concerned, this Court would state that unilateral

cancellation of contract is not permissible without proper

justification or compliance with contractual terms. The terms

of contract itself govern whether unilateral cancellation is

allowed. Unilateral cancellation without valid reasons and

without adhering to contractual obligations may be

considered as violation of his duty. Contacts often include

provisions related to termination, cancellation, and breach of

contract. Review the contract to understand the agreed upon

terms. Contracts may include clauses specifying the

conditions under which one party can terminate the

agreement. These clauses might outline notice periods,

grounds for termination and any associated penalties or

consequences. If one party breaches the terms of the

contract, the other party may have the right to cancel or

terminate the contract. However, the breach must be

material, and the non-breaching party typically needs to

provide notice and, in some cases, an opportunity to cure the

breach.

44. Herein this case, as could be seen from Ex.A.1 time

fixed as per the document is the defendant executed the

agreement of sale on 11.01.2005 in favour of plaintiff

agreeing to sell the schedule property for a consideration of

Rs.12,35,000/- and after receipt of advance amount of

Rs.35,000/- from the plaintiff also agreed to execute the

regular sale seed on receipt of balance sale consideration on

11.02.2005. Before that, there is no clause or condition

mentioned in Ex.A.1 to say that there is a permissible clause

with the vendor/defendant/appellant to cancel the agreement

unilaterally.

45. In the case on hand, no such clause was made in the

agreement which permits rather govern the defendant to

cancel the same unilaterally. May be true, as there are so

many grounds for cancellation of the agreement, but those

grounds can legally valid or not, has to be explained.

Admittedly, Ex.A.1 does not contain a clause of cancellation

and only one clause is breach of contract that if on

11.02.2025, the defendant did not agree for registration, the

plaintiff shall get the registration through Court of law by

depositing the remaining sale consideration or if the plaintiff

did not come for registration, the advance amount paid shall

be forfeited and agreement shall be cancelled. But there is no

clause in Ex.A.5 to review the contract.

46. It is a settled principle that if one party breaches the

terms of contract, the other party may have right to cancel or

terminate the contract. However, the breach must be material

and non-breaching party typically needs to provide notice.

47. In the present case on hand, till 11.02.2005, defendant

is not having any right to terminate or cancel the agreement

rather review the contract, who understand the agreed upon

terms. It is found from the record that plaintiff after issuing

notice on 09.02.2005 covered under Ex.A.11, immediately

filed the suit dated 18.02.2005. In which, he reiterated that

agreement is still valid and sustaining on the defendant and

he is ready and willing to perform his part of contract and

defendant is also bound by the terms of the contract and

obliged to perform part of his contract according to the terms

of the agreement.

48. Another important aspect, which was referred during

the arguments in the appeal, is that there is no concluded

contract at all. In this regard, this Court would like to

mentioned that a concluded contract refers to a legally

binding agreement between two or more parties. When

parties reach an agreement on the essential terms of a

contract, and there is an intention to create legal relations,

the contract is considered concluded. This is often

accompanied by an offer, acceptance, consideration and a

mutual understanding of the terms and the contract must

the reduced in writing.

49. In this case, Ex.A.1 agreement of sale was reduced into

writing and as per pleading of the plaintiff there is an offer,

acceptance and consideration is also mentioned and

according to the plaintiff there was a mutual understanding

of the terms and same was reiterated by P.W.1, which was

supported by the evidence of P.W.2, who said to be witness to

the agreement as well P.W.3 document writer.

50. In this context, it is relevant to state in respect of the

concluded contract the APEX Court in Karnataka Power

Transmission Corporation Limited v. JSW Energy

Limited15, held that:

"In order that there must be a contract concluded, undoubtedly, there must be a proposal made, which must be accepted. There must be consideration for the promise. The proposal must be accepted, which must be communicated, as already explained. The acceptance must be unqualified. This is an oversimplification of a complex process. We say this, as the parties can be said to have entered into a contract or a contract would be said to be concluded only when they are ad idem on all the essential terms of the contract. In other words, if the proposals containing the essential terms have been accepted, and the acceptance is communicated and, if the other conditions in Section 2 of the Indian Contract Act are complied with, viz. , that is there is consideration and the contract is enforceable in law, within the meaning of Section 2 of the Contract Act, it would lead to the creation of a concluded contract."

15 (2023) 5 SCC 541 equivalent to 2022 LiveLaw (SC) 981

51. In the above judgment, there is a reference regarding

consensus ad idem in all essential terms of contract. For

which, it is the contention of the plaintiff that the defendant

himself under Ex.A.8 categorically stated that he agreed to

sell the Ac.03.00 cents of land in Survey No.5 of Pasupula

Village for Rs.12,35,000/- on 11.01.2005 and received

Rs.35,000/- as an advance. It is needless to say that

admitted facts need not be proved. Even during the cross

examination of P.Ws.1 to 3, nothing was elicited to disbelieve

their testimony so far as agreement of sale and contents

mentioned therein. The evidence of P.Ws.1 to 3 cogent,

convincing, and consistent. With regard to execution of

Ex.A.1 is concerned, P.Ws.2 and 3 are independent witness

and their testimony cannot be dismissed rather discredited

on flimsy grounds. On close perusal of evidence of P.Ws.1 to

3 as well documents covered under Exs.A.1, A.3 to A.9 and

A.11, clearly established that defendant executed Ex.A.1

agreement of sale in favour of plaintiff on 11.01.2005.

52. Coming to the point of consensus ad idem is concerned,

there is no dispute with regard to the identity of the property

and there is no dispute that defendant intended to sell the

same. On the other hand, he went on to say in the written

statement that he never offered to sell the suit schedule

property to anyone, whereas Ex.A.8 clearly goes to show that

himself agreed to sell the same and executed Ex.A.1. The

defendant did not offer to sell the property is concerned, the

document referred in Exs.A.1, A.3 to A.9 clearly goes to show

with regard to the suit schedule property alone. There was a

transaction taken place in between plaintiff and defendant

and defendant is very much aware that land being sold to the

plaintiff, otherwise he would not have issued Ex.A.8 notice.

Thus, it is clinching to establish that defendant intended to

sell the suit schedule property to the plaintiff. Thereby,

material placed on record in particularly before the trail

Court clearly shows that there is consensus ad idem in

between the plaintiff and defendant, otherwise Ex.A.1 would

not have been executed.

53. In this context, it is also to be taken care whether there

is any fraud played by the plaintiff while obtaining Ex.A.1 as

it is urged by the defendant that plaintiff played fraud on him

and obtained the document. For that, it is for the defendant

to plead and prove rather to establish the fraud allegedly

played by the plaintiff to bring the agreement under Ex.A.1

with all preponderance of probabilities. A mere assertion in

the written statement or chief examination affidavit of D.W.1

by itself is not sufficient to stand on the defendant's

contention that the plaintiff payed fraud in obtaining Ex.A.1

agreement.

54. On careful perusal of Ex.A.8 legal notice, which was got

issued by the defendant through his counsel, shows that

defendant intended to cancel the agreement due to his family

members are not in favour of sale of the property. Nowhere, it

was mentioned in Ex.A.8 that the plaintiff played fraud and it

was not even made any specific pleading about the manner in

which the plaintiff played fraud on him in obtaining Ex.A.1

agreement of sale. All the times, he consistently stated that

his sisters have right under the said property, if that is the

case, the burden is on the defendant to place evidence that

his sisters are also having right over the property and they

did not accept for agreement of sale. He did not plead so. Any

amount of oral evidence without a specific plea is not

permissible under law and it is a settled legal position. More

so, neither his sisters nor any piece of paper produced by the

defendant to prove his contention.

55. The testimony of D.W.1 is silent with regard to the

manner of fraud said to be played by the plaintiff. Simply

rather using the words fraud itself is not sufficient. Above all

in Ex.A.8 in second para defendant mentioned that he sold

Ac.03.00 cents of land in Survey No.5 of Pasupula Village for

Rs.12,35,000/- on 11.01.2005 and received Rs.35,000/-. In

Para No.3 it is averred that after the agreement of sale

entered on 11.01.2005, defendant explained the same with

his family members and his family members are not in favour

of the sale and the attachment to the said land by the family

members from the year, 1995 is very strong and the family

members are objecting for sale of the land. Thereby, in para

No.4 averred that defendant is not prepared to sell the land.

Nowhere in Ex.A.8 mentioned that plaintiff played fraud on

him and obtained Ex.A.1. Thereafter, in-order to wriggle out

of the contract, he started with a plea stated that his family

members had a very strong attachment with the suit

schedule property and objecting to sell the same, thereby he

is not prepared to sell the property. If really there is no

consensus ad idem, he would have stated the same in Ex.A.8

itself, but he mentioned that his family members are not

accepted to sell the suit schedule property in favour of

plaintiff. The unequivocal admissions referred above in

Ex.A.8 categorically shows that the defendant accepted to sell

the property and executed agreement of sale covered under

Ex.A.1.

56. Apart from the above, strangely he come out with a new

plea in the evidence affidavit as D.W.1 that a real estate

businessman has been concocted the sale agreement in white

paper and obtained signatures and then threatened the

defendant to come to his terms. It is an admitted fact that

defendant is a 'marks' man and his contention is that real

estate businessman obtained his signatures, which is stated

in the chief examination of D.W.1, itself is a false theory

introduced. Not only the said theory, but also stated that the

suit schedule property, which stands in his name, is not that

of his exclusive property. Whereas the document covered

under Ex.A.3 goes to show that the defendant is the exclusive

owner of the schedule property. More so, the defendant did

not disclose the name of the real estate businessman, who

said to have obtained his signatures, which indicates that

somehow defendant intended to avoid execution of regular

sale deed in favour of plaintiff.

57. Agreement of sale came into existence on 11.01.2005.

So called cancellation covered under Ex.A.8 sent on

05.02.2005. If really plaintiff obtained Ex.A.1 by playing

fraud, he would not have waited till 05.02.2005 and even if

that is true, he might have specifically made a mention in

Ex.A.8 that plaintiff played fraud and obtained Ex.A.1. But,

for the first time in his written statement defendant comes up

with a plea of fraud. So, it all goes to show his defence has no

legs to stand.

58. On the other hand, it is all clear that there was

consensus ad idem between the plaintiff and defendant in

execution of Ex.A.1 agreement of sale, dated 11.01.2005.

59. In this context, it is relevant to state about unilateral

cancellation of agreement of sale by one party is not

permissible under law, except where the agreement is

determinable in terms of Section 14 of Specific Relief Act.

Such cancellation cannot be raised as a defence in a suit for

specific performance. If such unilateral cancellation of non-

determinable agreement is permitted as a defence then

virtually every suit for specific performance can be frustrated

by the defendant. Therefore, the Specific Reliefs Act has made

detailed provision for this aspect. The bare perusal of the

provisions of the Specific Relief Act shows that once a party

claims the right of revocation or rescission of the agreement

then such a party is required to seek a declaration from the

Court regarding the validity of revocation or rescission, as the

case may be. In the present case also, it was not the duty

caste upon the plaintiff to challenge the alleged cancellation

of the agreement, which, otherwise, also not proved on

record. On the contrary, if the defendant so claimed that he

had valid reasons to terminate the contract or rescind the

contract then he should have sought a declaration from the

competent Court, as required under Sections 27 and 31 of

Specific Relief Act. Admittedly, so far defendant has not taken

any such declarative suit for cancellation of the agreement of

sale, except claimed that he has cancelled the agreement.

60. Now coming to any misrepresentation is concerned,

even for that defendant has to plead and prove that there was

a misrepresentation on the part of the plaintiff. When there is

no material on record that there was a misrepresentation on

the part of the plaintiff in obtaining Ex.A.1 agreement of sale,

the agreement covered under Ex.A.1, dated 11.101.2005 is

valid and binding on the defendant. Thus, these points are

answered against the appellant/defendant and in favour of

the respondent/plaintiff.

61. POINT Nos.5 & 7:

The agreed amount of sale of land is more than

Rs.12,00,000/- and receipt of advance amount of

Rs.35,000/- is quite meagre. On this aspect, except the self-

serving testimony of D.W.1, there is no other evidence. Even

in Ex.A.8 notice also, he is not mentioned worth of the plaint

schedule property is more than Rs.12,35,000/- as on the

date of execution of sale, thereby it seems that it is an

afterthought. However, even the defendant established that

the value of the property is more than rupees twelve lakhs,

he requires to execute the sale deed in favour of plaintiff as

per the agreement of sale under Ex.A.1, but absolutely no

such evidence on record to show that the land is more than

worth of rupees twelve lakhs as on the date of execution. The

trial Court has elaborately and rightly discussed on this

point and rightly came to conclusion that the defendant

failed to prove that the suit land is more than

Rs.12,35,000/- as on the date of execution of Ex.A.1.

62. Now the point that arises for consideration is whether

plaintiff is ready and willing to perform his part of contract is

concerned, until and unless the defendant is able to establish

that the plaintiff is not ready and willing to perform his part

of contract, the Court can grant decree, for which the Court

taken into consideration conduct of the plaintiff pre and

subsequent to filing of the suit along with other attending

circumstances.

63. As could be seen from Ex.A.1, the balance

consideration of Rs.12,00,000/- is concerned, plaintiff has to

pay the same on or before 11.02.2005 and according to P.W.1

on 21.01.2005, he approached the defendant with balance

sale consideration for execution of regular sale deed and as

per the testimony of P.W.1, defendant promised that he will

execute the regular sale deed. But, strangely on 27.01.2005,

sisters of the defendant got issued a legal notice under Ex.A.6

to the plaintiff. Subsequently, in the year, 2007 as per the

orders of the Court, he deposited an amount of

Rs.12,00,000/- into the bank. This particular aspect is not

disputed by the defendant. Moreover, it is not the contention

of the defendant that plaintiff has no capacity.

64. On the other hand, it is established that defendant

deposited an amount of Rs.12,75,000/-in Andhra Bank,

Ashok Nagar Branch, Kurnool on 07.02.2005 to show that

the plaintiff has been ready and willing to pay the balance

consideration of Rs.12,00,000/-. As per Ex.A.1, plaintiff has

to pay balance consideration on or before 11.02.2005 and

obtain regular sale deed. From the facts placed on record, it

is well established that the plaintiff is always ready and

willing to perform his part of contract.

65. The defendant, in-order to wriggle out of the contract

rather to avoid execution of regular sale deed, initially taken a

plea that this property is attached with his family and they do

not want to sell the same and thereafter come with another

plea that some real estate business man obtain his

signatures, though he only put his thumb impression on

Ex.A.1 being a rustic man, and also come with another plea

of misrepresentation and fraud. So, one after another the

defendant taken a plea that the plaintiff is not entitled to seek

decree of specific performance.

66. In this context, it is relevant to make a mention a

judgment of Hon'ble Supreme Court between Ramathal v.

Maruthathal16, wherein at Paragraph No.22 held as follows:

"22. The buyer has taken prompt steps to file a suit for specific performance as soon as the execution of the sale was stalled by the seller. From this discussion, it is clear that the buyer has always been ready and willing to perform his part of the contract at all stages. Moreover, it is the seller who had always been trying to wriggle out of the contract. Now the seller cannot take advantage of their own wrong and then plead that the grant of decree of specific performance would be inequitable. Escalation of prices cannot be a ground for denying the relief of specific performance. Specific performance is an equitable relief and granting the relief is the discretion of the court. The discretion has to be exercised by the court judicially and within the settled principles of law. Absolutely there is no illegality or infirmity in the judgments of the courts below, which has judicially exercised its discretion and the High Court ought not to have interfered with the same."

16 (2018) 18 SCC 303

67. From the above, it is clear that the buyer or the plaintiff

has always been ready and willing to perform his part of the

contract at all stages. Moreover, it is the seller or defendant who

had always been trying to wriggle out of the contract. Now the

seller cannot take advantage of their own wrong and then plead

that the grant of decree of specific performance would be

inequitable. In the above judgment, it is also mentioned that

escalation of prices cannot be a ground for denying the relief of

specific performance. Specific performance is an equitable relief

and granting the relief is the discretion of the court. The

discretion has to be exercised by the court judicially and within

the settled principles of law.

68. In Nirmala Anand v. Advent Corporation (p)

Limited17, the Hon'ble Supreme Court specifically held that a

Court of appeal should not ordinarily interfere with the

discretion exercised by the Courts below.

69. The defendant also canvassed that the plaintiff has

unfair advantage in this case. In this context, there is a

17 (2002) (6) ALD 54 (SC)

judgment of the Division Bench of this Court reported

between T.Krishna Goud v. Sabiha Kamaluddin18, wherein

at Paragraph Nos.46 to 48 held as follows:

"46. Section 10 of the Act provides that specific performance of any contract may be enforced when there exists no standard for ascertaining the actual damage caused by the non-performance of an act agreed to be done, or when the agreed act is such that compensation in money for its nonperformance would not afford adequate relief.

47. Granting such relief is within the discretion of the Court. The said provision also provides that unless and until the contrary is proved, the Court should presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money.

48. The instant case does not fall within the exceptions falling in other provisions of Chapter-II, which provide for non-enforceable contracts. Demonstrably, the defendant has also not proved that the breach of contract could be adequately compensated in money."

18 2010 SCC Online AP 729

70. From the above, it is very clear that Section 10 of the

Specific Relief Act provides that specific performance of any

contract may be enforced when there exists no standard for

ascertaining the actual damage caused by the non-performance

of an act agreed to be done, or when the agreed act is such that

compensation in money for its nonperformance would not afford

adequate relief.

71. It is also further held in the said judgment that unless

and until the contrary is proved, the Court should presume that

the breach of a contract to transfer immovable property cannot

be adequately relieved by compensation in money.

72. In the present case on hand also defendant has not

proved any breach of contract committed by the plaintiff to

adequately compensate in money.

73. So far as subsequent rise in price of property is

concerned, it is also well settled by the Hon'ble Supreme

Court in a judgment reported between K.Prakash v. B.R.

Sampath Kumar19, wherein at Paragraph No.18 held as

follows:

"18. Subsequent rise in the price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed."

74. From the above, it is very clear that subsequent rise in

the price will not be treated as a hardship entailing refusal of

the decree for specific performance.

75. Even in 2012, the Hon'ble Supreme Court in Narinderjit

Singh v. North Star Estate Promoters Limited20, held at

Paragraph No.25 that:

"25. We are also inclined to agree with the lower appellate court that escalation in the price of the land cannot, by itself, be a ground for denying relief of specific performance. In K.Narendra v. Riviera Apartments (P) Ltd. [(1999) 5 SCC 77] this Court interpreted Section 20 of the Act and laid down the following propositions: (SCC p. 91, para 29

19 (2015) 1 SCC 597 20 (2012) 5 SCc 712

"29. Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognised in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant."

76. From the above, it is clear that the escalation in the

price of the land cannot, by itself, be a ground for denying relief

of specific performance. That judgment is followed another

judgment of the Hon'ble Supreme Court between K.Narendra v.

Riviera Apartments (P) Limited21, which was discussed above.

77. The Hon'ble Supreme court also held that it would not

only be unreasonable but too inequitable for courts to make the

appellant the sole beneficiary of the escalation of real estate

prices.

78. In this context, it is relevant to refer another judgment of

the Hon'ble Supreme Court reported between P.D Souza v.

Shondrilo Naidu22, wherein at Paragraph No.41 held as

follows:

"41. In the facts and circumstances of the matter obtaining therein held that it would not only be unreasonable but too inequitable for courts to make the appellant the sole beneficiary of the escalation of real estate prices and the enhanced value of the flat in question, preserved all along by Respondents 1 and 2 by keeping alive the issues pending with the authorities of the Government and the municipal body. It was in the facts and circumstances of the case held: (SCC p. 501, para 23)

21 (1999) 5 SCC 77 22 (2004) 6 SCC 649

"23. ... Specific performance being an equitable relief, balance of equities have also to be struck taking into account all these relevant aspects of the matter, including the lapses which occurred and parties respectively responsible therefor. Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into (sic consideration) the totality of circumstances of each case."

79. In the above judgment, it is categorically held by the

Apex Court that it is obligatory for courts to consider whether

by doing so any unfair advantage would result for the plaintiff

over the defendant.

80. Herein in this case, no such unfair advantage established

by the defendant except pleaded the same. The much of law

would speaks that the claim of the plaintiff is not to be denied

the relief of specific performance only on account of the

phenomenal increase of price during the pendency of litigation.

The entire benefit of phenomenal increase of the value of the

property during the pendency of the litigation, while balancing

the equities, one for the consideration to be kept in view is as to

who is the defaulting party and it is also to be borne in mind

whether a party is trying to take undue advantage over the

other as also the hardship that may be caused to the defendant.

In this context, it is relevant to refer the judgment of the Hon'ble

Supreme Court in Nirmala Anand case (referred to supra),

wherein at Paragraph No.6 held as follows:

"6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the

considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen."

81. In the present case also, may be true, property value

might have been increased during the pendency of the

litigation, but the Hon'ble Supreme Court categorically held

that the Court is to be kept in mind, who is defaulting party.

Furthermore, the decisions relied upon by the learned

counsel for the appellant/defendant are not at all applicable

to the present facts of the case. Perusing the material on

record and in view the elaborate discussion made supra, it is

clear that the defendant, who intended to wriggle out of the

contract and stands with different contentions/defences from

notice dated 05.02.2005, though he agreed in Ex.A.1 to

execute regular sale deed by receiving advance amount of