Smt Nakka Lakshmi R/O Visakhapatnam vs Sri Rayidi Paydi Raju R/O Visakhapatnam
2023 Latest Caselaw 6135 AP

Andhra Pradesh High Court - Amravati

Smt Nakka Lakshmi R/O Visakhapatnam vs Sri Rayidi Paydi Raju R/O Visakhapatnam on 26 December, 2023

       THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO

                      APPEAL SUIT No.655 OF 2005

JUDGMENT:

-

This Appeal, under Section 96 of the Code of Civil Procedure

[for short 'the C.P.C.'], is filed by the Appellant/plaintiff challenging

the Decree and Judgment, dated 11.10.2002, in O.S. No.13 of 1996

passed by the learned II Additional Senior Civil Judge,

Visakhapatnam [for short 'the trial Court']. The respondent herein is

the defendant in the said Suit.

2. The appellant/plaintiff filed the Suit for specific performance of

the contract dated 25.06.1994 directing the defendant to register the

sale deed in favour of the plaintiff or her nominee after receiving the

balance of consideration: in the alternative to direct the defendant to

refund the advance amount paid by the plaintiff with interest @24%

p.a.

3. Both the parties in the Appeal will be referred to as they are

arrayed before the trial Court.

4. The brief averments of the plaint in O.S. No.13 of 1996, are as under:

2 VGKRJ AS 655 of 2005

i) The plaintiff agreed to purchase the plaint schedule property

from the defendant under an agreement of sale dated 25.06.1994

for Rs.3,50,000/-. The plaintiff paid an advance of Rs.20,000/- on

the date of agreement. The terms of the agreement were reduced in

writing. The main terms are (1)the defendant agreed to redeem the

mortgage to the plaint schedule property for which the plaintiff

agreed to provide the amount; (2)that the entire sale transaction

shall be completed within 6 months from the date of redeeming the

mortgage; (3)that the defendant undertakes that he would see that

the schedule mentioned property would be assessed to property tax

by the Visakhapatnam Municipal Corporation and pay all the dues.

ii) In pursuance of the agreement, the plaintiff paid Rs.1,50,000/-

on 25.10.1994 and endorsed on the back of the agreement. The

plaintiff also paid Rs.10,000/- each on two occasions for getting the

certificate. Thus, in total the plaintiff paid Rs.1,90,000/- out of the

total consideration. The plaintiff is ready and willing to perform her

part of contract. The defendant failed to register the property in the

name of the plaintiff inspite of demands made by the plaintiff. In the

month of July, 1995 there was a mediation, wherein the tenants 3 VGKRJ AS 655 of 2005

were directed to pay rents to the plaintiff. Accordingly, he delivered

possession of the shop rooms from 01.08.1995 and the tenants are

paying rents to the plaintiff. The plaintiff is ready and willing to

perform her part of contract, as the defendant did not come forward

to execute the sale deed, the plaintiff is constrained to file the suit.

5. The defendant filed a written statement. The contents of the

same are as follows: -

The defendant while admitting the execution of sale

agreement and consideration therein, pleaded that the plaintiff did

not pay the advance amount of Rs.20,000/- as mentioned by her.

Time is essence of contract in this case. 6 months period was fixed

for payment of balance of consideration, but the plaintiff did not pay

the same, therefore, the contract came to an end. The plaintiff paid

Rs.1,50,000/- on 25.10.1994 and Rs.20,000/- on different occasions

at Rs.5,000/- each. The plaintiff committed breach of contract and

there are laches on the part of the plaintiff. The plaintiff is not

entitled for equitable relief of specific performance of agreement of

sale or to refund of advance amount and prayed the Court to

dismiss the suit with costs.

4 VGKRJ AS 655 of 2005

6. Based on the above pleadings, the trial Court framed the following issues:

(i) Whether the plaintiff is entitled for specific performance of agreement of sale dated 25.06.1994 as prayed for?

(ii) Whether the plaintiff is entitled for the alternative relief of recovery of money of Rs.1,90,000/- with interest at 24% p.a. as prayed for?

(iii) To what relief?

7. During the course of trial in the trial Court, on behalf of the

Plaintiff, PW1 to PW3 were examined and Ex.A1 to Ex.A6 were

marked. On behalf of the Defendant DW1 and DW2 were examined

and Ex.B1 was marked.

8. After completion of the trial and hearing the arguments of both

sides, the trial Court dismissed the suit so far as the relief of specific

performance of agreement of sale is concerned, insofar as the

alternative relief of refund of earnest money is concerned, the suit is

decreed for Rs.1,90,000/- with interest at 12% p.a. from the date of

suit till the date of decree and at 6% p.a. from the date of decree till

realization on Rs.1,90,000/- vide its judgment, dated 11.10.2002, 5 VGKRJ AS 655 of 2005

against which the present appeal is preferred by the

appellant/plaintiff in the Suit questioning the Decree and Judgment

passed by the trial Court.

9. Heard Ms.R.Maitraie, learned counsel, representing Sri

G.Ram Gopal, learned counsel for appellant/plaintiff. As per the

registry endorsement, notice was served on the respondent, but

none appeared on behalf of respondent.

10. Having regard to the pleadings in the suit, the findings

recorded by the trial Court and in the light of rival contentions and

submissions made on either side before this Court, the following

points would arise for determination:

1. Whether the appellant/plaintiff is entitled the main relief of specific performance of agreement of sale dated 25.06.1994?

2. Whether the trial Court is justified in rejecting the main relief of specific performance of agreement of sale and granting alternative relief of refund of advance amount paid by the plaintiff?

6 VGKRJ AS 655 of 2005

3. Whether the decree and judgment passed by the trial court needs any interference? If so, to what extent?

11. Point No.1 :

Whether the appellant/plaintiff is entitled the main relief of specific performance of agreement of sale dated 25.06.1994?

The case of the plaintiff is that she intends to purchase the

plaint schedule property from the defendant, the defendant came

forward to alienate the plaint schedule property and the bargain was

settled for Rs.3,50,000/- and the plaintiff paid an advance amount of

Rs.20,000/- on the date of agreement on 25.06.1994 and the

defendant agreed for the terms of the contract and executed

agreement of sale on 25.06.1994 for agreeing to alienate the plaint

schedule property to the plaintiff. The plaintiff further pleaded that

the terms of the agreement are (1)the defendant agreed to redeem

the mortgage to the plaint schedule property for which the plaintiff

agreed to provide the amount; (2)that the entire sale transaction

shall be completed within 6 months from the date of redeeming the

mortgage; (3)that the defendant undertakes that he would see that 7 VGKRJ AS 655 of 2005

the schedule mentioned property would be assessed to property tax

by the Visakhapatnam Municipal Corporation and pay all the

respective dues to the corporation.

12. The suit is based on Ex.A1 agreement of sale, execution of

agreement of sale is not at all disputed by the defendant. Ex.A1

recitals goes to show that the defendant agreed to redeem the

mortgage to the plaint schedule property for which the plaintiff

agreed to provide the amount and entire sale transaction shall be

completed within 6 months from the date of redeeming the mortgage

and the defendant has to take steps for assessing to pay the

property tax by the Visakhapatnam Municipal Corporation. As stated

supra, the total agreed sale consideration is Rs.3,50,000/- from out

of which Rs.20,000/- was paid on the date of Ex.A1 i.e., on

25.06.1994, within 4 months the plaintiff paid substantial amount of

Rs.1,50,000/- on 25.10.1994 and obtained Ex.A2 endorsement on

the back of Ex.A1 agreement of sale. It is also not in dispute that

the plaintiff paid an amount of Rs.10,000/- on 10.01.1995 and

obtained endorsement to that effect on the back of Ex.A1 agreement

of sale under Ex.A3 and the plaintiff also paid an amount of 8 VGKRJ AS 655 of 2005

Rs.10,000/- on 20.06.1995 under Ex.A4 endorsement. Another

important point is Ex.A1 agreement is not at all disputed by the

defendant. The defendant is also admitting about Ex.A2 to Ex.A4

part payments endorsements and the signatures on Ex.A1, Ex.A2 to

Ex.A4 are not at all disputed by the defendant. It is an admitted fact

by the defendant that he received an amount of Rs.1,90,000/- from

out of Rs.3,50,000/- towards sale consideration.

13. The legal position in this regard is no more res integra, the law

is well settled that grant of specific performance is not an automatic

and it is a discretionary relief, the same cannot be accepted or

approved, the said discretion has to be exercised judiciously, sound

and reasonable

14. The plaintiff cannot be punished by refusing the relief of

specific performance of agreement of sale despite the fact that the

execution of agreement of sale in her favour has been established

and proved that she is found to be always ready and wiling to

perform her part of contract, not to grant decree of specific

performance, despite execution of agreement of sale is proved

would encourage dishonesty.

9 VGKRJ AS 655 of 2005

15. In the instant case, the execution of Ex.A1 agreement of sale

is not at all in dispute and receipt of advance sale consideration

under Ex.A1 to Ex.A4 is also not in dispute by the defendant. The

same is supported by DW1 and also own brother of the defendant

i.e., DW2. It was specifically pleaded in the written statement that

the time is essence of contract. As stated supra, Ex.A1 agreement

of sale itself goes to show that the defendant has to comply 3

conditions before registering the document. Admittedly no notice

was issued by the defendant to the plaintiff to show that he complied

the said 3 conditions which are incorporated in Ex.A1 agreement of

sale. The total agreed sale consideration is Rs.3,50,000/- from out

of which Rs.1,90,000/- is paid by the plaintiff i.e., more than 50% of

amount was paid by the plaintiff. The law is very clear that the

question whether the time is essence of contract cannot be decided

mainly on the basis of agreement deciding the fixation of time limit.

16. As stated supra, the execution of agreement of sale is not in

dispute. The plaintiff to discharge her initial burden examined herself

as PW1. She clearly deposed in her evidence about her readiness

and willingness to perform her part of contract and she narrated in 10 VGKRJ AS 655 of 2005

her evidence that to show her bonafides, she paid substantial

amount of Rs.1,50,000/- from out of Rs.3,50,000/- within 4 months

from the date of Ex.A1 agreement of sale and so also payment of

another Rs.10,000/- each under Ex.A3 and Ex.A4 endorsements.

The defendant is not at all disputed the part payments received

under Ex.A2 to Ex.A4, but the defendant failed to redeem the

mortgage on the plaint schedule property. To discharge her burden,

the plaintiff also examined the 5th attestor in Ex.A1 as PW2. PW1

was cross examined by the leaned counsel for defendant. In lengthy

cross examination, the evidence of PW1 is not at all disturbed on

the material aspects of the case. In cross examination, nothing was

elicited from PW1 discredit the testimony of PW1. PW2 is the 5 th

attestor in Ex.A1 agreement of sale. He deposed in his evidence by

supporting the Ex.A1 agreement contents. In cross examination his

evidence is also not at all disturbed on the material aspects of the

case. PW3 is the scribe of Ex.A4 endorsement. The evidence of

PW3 also supports the case of the plaintiff.

17. Per contra, the defendant examined himself as DW1. As

stated supra, the defendant admitted the execution of Ex.A1 11 VGKRJ AS 655 of 2005

agreement of sale and the signature on Ex.A1, Ex.A2 to Ex.A4

endorsements are also admitted by the defendant. Another

admission made by the defendant in his evidence in cross

examination is that he has not obtained necessary permission from

the concerned authorities as per Ex.A1 within a stipulated period.

Another admission made by the defendant in his evidence in cross

examination is that he has not issued any notice to the plaintiff

showing his readiness and willingness to execute a sale deed within

a stipulated period. In Ex.A1 there was a specific recital that the

defendant has to obtain necessary permission from the Municipal

Corporation for tax assessment and he will pay the tax dues. There

was a clear admission on the part of the defendant in cross

examination itself that he has not obtained necessary permission

from the concerned authorities as per Ex.A1 within a stipulated

period. Therefore, certainly there are laches on the part of the

defendant for complying the terms and conditions in Ex.A1, but the

trial Court unfortunately failed to consider the said aspects.

18. The defendant also examined his own brother as DW2. He

admits that Ex.A1 was voluntarily executed by the defendant without 12 VGKRJ AS 655 of 2005

any force. DW2 also clearly admitted in his evidence in cross

examination that the bargain was settled for Rs.3,50,000/- and

defendant voluntarily executed an agreement of sale in favour of the

plaintiff. There was a specific plea in the plaint averments and so

also in the evidence of PW1 that she is always ready and willing to

perform her part of the contract, but to discharge his burden, the

defendant failed to adduce any evidence to show that he complied

the terms and conditions incorporated in Ex.A1 agreement of sale.

19. As stated supra Section 20 of Specific Relief Act defines that

grant of relief of specific performance is discretionary and the said

discretion has to be exercised judiciously but not arbitrary.

Therefore, the evidence on record has to be scrutinized with due

care and caution. Here in the present case, as stated supra, the

evidence of PW1 to PW3 clearly supports the case of the plaintiff.

On the other hand, the evidence of DW1 and DW2 fails to support

the case of the defendant to show that the defendant is always

ready and willing to perform his part of the contract. Further more,

there was a clear admission by the defendant in his evidence in

cross examination itself that he has not obtained any necessary 13 VGKRJ AS 655 of 2005

permission from the concerned authorities as per Ex.A1 within a

stipulated period and he has also not issued any legal notice to the

plaintiff showing his readiness and willingness to execute a sale

deed within a stipulated period. To prove her bonafides, the plaintiff

got issued a legal notice under Ex.A5 on 19.12.1995.

20. The recitals of Ex.A1, which is not disputed by the defendant

makes it clear that the total agreed sale consideration was fixed for

Rs.3,50,000/- on 25.06.1994 which is a substantial amount in those

days in the year 1994 i.e., at about approximately 30 years ago.

The plaintiff paid Rs.20,000/- on the date of Ex.A1 and the plaintiff

paid Rs.1,50,000/- on 25.10.1994 under Ex.A2 within 4 months from

the date of Ex.A1 and Rs.10,000/- on 10.01.1995 under Ex.A3 and

Rs.10,000/- on 20.06.1995 under Ex.A4. Ex.A1 to Ex.A4 are not at

all disputed by the defendant. The receipt of total advance sale

consideration of Rs.1,90,000/- is also not at all disputed by the

defendant and the execution of Ex.A1 agreement of sale is also not

in dispute by the defendant. The part payments amounts were

accepted by the defendant, without any pretext. To show her

bonafides, the plaintiff got issued a legal notice under Ex.A5 dated 14 VGKRJ AS 655 of 2005

19.12.1995. Therefore, the material on record reveals that even

though the plaintiff is in ready to perform her part of the contract, the

defendant did not come forward to execute a regular registered sale

deed in favour of the plaintiff.

21. In the judgment of M.Rangaiah vs. T.V.Satyanarayana Rao

and another 1 , the composite High Court of Andhra Pradesh,

Hyderabad observed as follows:

The requirements, mentioned above, are almost substantive in nature. The Legislature had made its intention very clear, to the effect that before a suit for specific performance of an agreement is filed, the plaintiff must issue notice to the defendant calling upon him to perform his part of contract. In the instant case, the respondent did not issue such a notice and straight away filed the suit.

The other requirement is, about the readiness and willingness on the part of the plaintiff to perform his part of contract. This is made mandatory not only in the Code, but also under Section 16(c) of the Act.

What is essential is the readiness and willingness on the part of the plaintiff to perform his part of contract. This may include, not only payment of balance of consideration, but also compliance with the other conditions, that are stipulated under the agreement. The respondent no doubt mentioned in para 7 of the plaint, that he is

2009 (5) ALD 663 15 VGKRJ AS 655 of 2005

ready and willing to pay the balance of consideration within the agreed period of time, That, however, does not constitute compliance with Section 16(c) of the Act, or Form No.47 of the Code. He did not say that he is willing to perform his part of contract.

Here in the present case, the material on record clearly

express about the readiness and willingness on the part of the

plaintiff to perform her part of contract. It is further established that

even through the plaintiff is ready and willing to perform her part of

contract, the defendant failed to came forward to execute a regular

registered sale deed, but unfortunately the trial Court rejected the

main relief of specific performance of agreement of sale and granted

alternative relief of refund of advance amount. Admittedly, no appeal

is filed by the defendant. The plaintiff, who defeated her case before

the trial Court approached this Court and filed an appeal against the

alternative relief granted by the trial Court. It goes to show as on

today also the appellant/plaintiff is inclined to obtain regular

registered sale deed instead of obtaining alternative relief of refund

of advance amount.

22. It was pleaded by the defendant before the trial Court that the

prices are abnormally increased from the date of Ex.A1 agreement 16 VGKRJ AS 655 of 2005

of sale. Ex.A1 is relates to the year 1994. The total agreed sale

consideration is Rs.3,50,000/-, in those days i.e., in the year 1994 it

is a substantial amount, the plaintiff also paid total substantial

advance amount of Rs.1,90,000/- at about 29 years ago from out of

Rs.3,50,000/- which is substantial amount in those days, therefore,

after a lapse of long time, that too after a lapse of 29 years, now the

defendant cannot took a different plea that the prices abnormally

increased. Admittedly, the substantial amount of Rs.1,90,000/- from

out of Rs.3,50,000/- is held up with the defendant since 30 years

without obtaining any sale deed from the defendant by the plaintiff.

Therefore, for the foregoing reasons, the plaintiff is always ready

and willing to perform her part of contract, but the defendant failed to

came forward to execute a regular registered sale deed. Therefore,

for the foregoing reasons, the plaintiff is entitled the main relief of

specific performance of agreement of sale dated 25.06.1994.

Accordingly, the point No.1 is answered.

23. Point No.2:

Whether the trial Court is justified in rejecting the main relief of specific performance of agreement 17 VGKRJ AS 655 of 2005

of sale and granting alternative relief of refund of advance amount paid by the plaintiff?

In view of my findings on point No.1, the trial Court is not

justified in granting the alternative relief of refund of advance

amount, instead of granting main relief of specific performance of

agreement of sale. Accordingly, the point No.2 is answered.

24. Point No.3:

Whether the decree and judgment passed by the trial court needs any interference? If so, to what extent?

In view of my findings on point Nos.1 and 2, the appeal is

allowed by setting aside the decree and judgment passed by the

trial Court, consequently, the appellant/ plaintiff is entitled the main

relief of specific performance of agreement of sale dated 25.06.1994

and the appellant/plaintiff is directed to pay the remaining balance

sale consideration of Rs.1,60,000/- to the respondent/defendant

within 2 months from the date of this judgment. If the defendant

refused to receive the said amount, the plaintiff is directed to deposit

the same before the trial Court, the defendant is directed to execute 18 VGKRJ AS 655 of 2005

a regular registered sale deed within one month from the date of

receipt of the balance sale consideration or from the date of deposit

of balance sale consideration by the plaintiff as case may be, failing

which the appellant/plaintiff is at liberty to take necessary steps as

per law.

25. Resultantly, the Appeal Suit is allowed. Considering the

circumstances of the case, each party do bear their own costs in the

suit and the appeal.

As a sequel, miscellaneous petitions, if any, pending in the

Appeal shall stand closed.

_________________________ V.GOPALA KRISHNA RAO, J Date: 26.12.2023 sj 19 VGKRJ AS 655 of 2005

THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO

APPEAL SUIT No.655 OF 2005

Date: 26.12.2023

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