The Appeal vs Pedada Tulasi Rao Per Lrs
2023 Latest Caselaw 3294 AP

           THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

                        APPEAL SUIT NO.8 OF 2011

JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure, is

filed by the appellants/defendants 1 to 3 challenging the decree and

Judgment dated 14.12.2010 in O.S.No.67 of 2007 passed by the learned

Principal District Judge, Nellore (for short, 'the trial court'). The 1st respon-

dent is the plaintiff, who filed the suit in O.S.No.67 of 2007 seeking specif-

ic performance of agreement of sale dated 29.12.2006, registered on

30.12.2006.

2. The parties will hereinafter be referred to as arrayed before the trial

Court.

3. The brief averments of the plaint are as under:

(a) The plaint schedule property was originally owned by Dudala

Venkata Subbaiah, who was the 1st defendant's husband and father

of defendants 2 and 3. He died intestate. Defendants 1 to 3 inherited

his estate and became absolute owners. They agreed to sell the sche-

dule property to the plaintiff on 29.12.2006 for Rs.21,05,500/-. In

pursuance of the same, an agreement was entered between the plain-

tiff and the defendants 1 to 3 by reducing the terms into writing on

that day, where the plaintiff paid an advance of Rs.2,00,000/-. It was

agreed that the remaining sale consideration of Rs.19,05,500/- would

be paid on or before 01.06.2007, and the defendants 1 to 3 would ex-

ecute the registered sale deed in favour of the plaintiff upon receiving

the balance amount.

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(b) All the aforementioned conditions were included in the said

sale agreement and was registered as a document No.3013/2006 at

the Sub Registrar's Office, Buchireddipalem, on 30.12.2006. The de-

fendants 1 to 3 utilized the advance payment and failed to fulfill their

obligations under the agreement. They failed to receive the balance of

sale consideration till 01.06.2007 by postponing the same on some

pretext. The plaintiff waited till 04.06.2007, hoping that defendants 1

to 3 would positively react to her persuasions. Still, there was no re-

sponse from them. Subsequently the plaintiff got issued a legal notice

calling upon them to fulfill their contractual obligations by receiving

the balance payment.

(c) Defendants 1 to 3 received a notice. They got issued notice on

06.06.2007. The plaintiff waited for a response from the defendants

until 15.06.2007 as she had set the dead line for receiving the bal-

ance payment. As the defendants 1 to 3 did not respond, the plaintiff

filed the suit for specific performance of the agreement of sale.

4. A detailed written statement filed on behalf of the 2nd defendant

which is adopted by defendants 1 and 3, the contents of which in brief as

follows:

(a) The 2nd defendant admitted to agreeing to sell the plaint schedule

property for Rs.21,05,500/- and executing the agreement of sale on

29.12.2006 after receiving an advance payment of Rs.2,00,000/-. They

sold the plaint schedule property in order to purchase the site in the Nam-

pally area of Hyderabad, by paying an advance amount of Rs.4,00,000/- to

a person named Dhanaraj. Therefore, time was the essence of the contract.

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(b) The plaintiff despite agreeing to pay the balance of sale consideration

on or before 01.06.2007, failed to do so even after repeated demands from

the defendants. The defendants got issued a notice on 06.06.2007 stating

that the agreement of sale dated 29.12.2006 was cancelled, and the ad-

vance amount was forfeited. The plaintiff being aware of this notice, subse-

quently issued another notice with ante-date as 04.06.2007. The plaintiff

had no capacity to purchase the same.

5. Based on the above pleadings, the trial Court framed the following is-

sues:

(1) Whether the plaintiff is entitled to specific performance of the agreement of sale, dated 29.12.2006?

(2) To what relief?

6. During the trial, on behalf of the plaintiff, P.Ws.1 and 2 were ex-

amined, and Exs.A1 to A.11 were marked. On behalf of the defendants,

D.W.1 was examined, and no documents were marked.

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

sides, the trial Court decreed the suit with costs by granting specific per-

formance of the contract.

8. The learned counsel for the appellant/defendant submits the follow-

ing contentions

(i) The plaintiff did not fulfill her obligations to pay the balance of sale

consideration on or before 01.06.2007 as stated in the agreement, or

even at the time of filing the suit. Mere assertion in the plaint and de-

position that the plaintiff has the cash and means to pay the balance

of sale consideration is not sufficient to prove readiness and willing-

A.S.No.8 of 2011

ness. The plaintiff must provide evidence demonstrating that she of-

fered or deposited the amount in a bank with the intimation to the de-

fendants. But there is no such evidence.

(ii) The trial Court erred in concluding that the plaintiff has capacity to

pay the balance of sale consideration based on Exs.A.7 to A.11.

(iii)The trial Court ought to have considered the evidence of DW.1 and

dismissed the suit. As per the terms and conditions of Ex.A.1, time is

the essence of the contract, and noncompliance with the sale agree-

ment enables the defendants to resile from the contract.

(iv) The trial Court is not justified in awarding the costs of Rs.1,56,928/-

and fixing the senior advocate fee of Rs.1,00,000/-.

9. Per contra, the learned counsel appearing for respondent

No.1/plaintiff would contend that the trial Court correctly appreciated the

facts of the case and came to a correct conclusion. The reasons given by

the trial Court do not warrant any modification.

10. I have heard Sri P. Ganga Rami Reddy, learned counsel for the ap-

pellants and Sri J. Pradeep Kiran, learned counsel for the 1 st respondent.

11. Having regard to the pleadings in the suit, the findings recorded by

the Trial Court and in light of the rival contentions and submissions made

on either side before this Court, the following points would arise for deter-

mination:

1) Whether the trial court is justified in holding that the plaintiff is always been ready and willing to perform her part of contract?

2) Whether the time is the essence of the contract?

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POINT NOs.1 AND 2:

12. The following facts are either admitted or undisputed: The 1st

defendant is the wife, while the defendants 2 and 3 are the son and

daughter of the Late Dudala Venkata Subbaiah. Venkata Subbaiah owned

the property in question, and upon his death, the defendants became the

legal heirs and owners of the property. They offered to sell the schedule

property to the plaintiff for Rs.21,05,500/- on 29.12.2006, for which the

plaintiff agreed to purchase. An agreement (Ex.A1) was made between the

plaintiff and the defendants, where the plaintiff paid Rs.2,00,000/- as an

advance and agreed to pay the remaining balance of Rs.19,05,500 by

01.06.2007. The defendants were obliged to execute a registered sale deed

upon receiving the full payment. The plaintiff sent a legal notice (Ex.A.2) on

04.06.2007, requesting the defendants to fulfill their part of the contract

by receiving the balance payment by 15.06.2007. The defendants received

the notice vide Exs.A3 to A5 postal acknowledgments. The defendants in

their notice dated 06.06.2007 (Ex.A.6) assert that the balance payment

ought to have been rendered by 01.06.2007 and blamed the plaintiff for

not fulfilling her obligations despite repeated demands.

13. Based on the admitted facts, the court now considers the disputed

facts. The plaintiff, who testified as P.W.1, stated that the defendants used

the advance payment but failed to receive the remaining balance and

avoided meeting with the plaintiff despite her efforts. The plaintiff claims

that she was always ready and willing to fulfill her part of the contract.

She waited until 04.06.2007, hoping for a positive response from the

defendants, but received none, leading to the issuance of the legal notice

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(Ex.A.2). According to P.W.1, since the defendants evaded their

responsibilities, the fixed date of 01.06.2007 for receiving the balance

payment should not be considered.

14. During the cross-examination, P.W.1 stated that they had the

balance of the sale consideration amount at the time of Ex.A1 (the

agreement). However, there was no specific reason given for fixing a five-

month time period in Ex.A1. P.W.1 also mentioned that they did not

attempt to deposit the residual sale consideration with the court even after

filing the suit. Before instituting the suit, they visited the 2nd defendant's

house in Isakapalem Village carrying with the amount and requested him

to accept it and execute the sale deed, but he did not agree. P.W.1 denied

the suggestion that the defendants 2 and 3 had requested them multiple

times to pay the balance sale consideration, but they did not fulfill the

obligation due to paucity of funds.

15. In the cross-examination of P.W.2 (the plaintiff's husband), it was

revealed that they were unable to obtain a regular registered sale deed

because there was standing Para-grass on the property, and the

defendants requested six months to clear it and provide vacant possession

of the land.

16. During cross-examination, D.W.1 (3rd defendant) stated that the

suit property was fallow land due to entering of drainage water, and there

was green grass in the land at the time of Ex.A.1. She denied the

suggestion that they agreed five-months time period for executing the sale

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deed because of the standing Para-grass, which would take a minimum of

six months to cut.

17. Based on the evidence produced, it is manifest that P.Ws.1 and 2

were subjected to rigorous questioning during cross-examination

concerning the rationale behind stipulating a five-month time frame in

Ex.A1 (the agreement) to pay the balance sale consideration amount.

When parties concur and set a specific time for discharging their

contractual obligations, the defendants cannot assert that the time frame

was predicated on the plaintiff's lack of readiness with the requisite sum.

The true motive underpinning the fixation of such duration remains

undisclosed in Ex.A1. The focus should be on whether the plaintiff can

prove that she fulfilled her part of the contract as per the terms enshrined

in Ex.A1. It is admitted that the plaintiff was required to pay the balance

sale consideration of Rs.19,05,500 by 01.06.2007. The plaintiff does not

claim to have paid the amount within the designated time frame. P.W.1

dispatched a legal notice (Ex.A2) on 04.06.2007, demanding the

defendants to fulfill their part of the contract by receiving the residual sale

consideration. Although the date on the notice is shown as 04.06.2007, it

appears that the notice was served upon the defendants on 08.06.2007.

However, the defendants had already dispatched their notice on

06.06.2007. The defendants dispute that Ex.A2 notice was not actually

prepared on 04.06.2007 but was antedated to create an impression that

the plaintiff had issued a notice prior to their notice dated 06.06.2007.

Even if the defendants' contentions are taken into consideration, it

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becomes apparent that both parties exchanged notices on 06.06.2007,

accusing the other party of defaulting on their contractual obligations.

18. The plaintiff asserts that after waiting until 01.06.2007, she and

her husband consulted their lawyer to issue notices to the defendants.

Their lawyer advised them to wait until 04.06.2007 owing to the

occurrence of a week end on the 1st and 2nd June. Consequently, they

intend to dispatch a notice through their counsel on 04.06.2007.

19. D.W.1 (3rd defendant) testified that her elder brother, the 2nd

defendant, is unmarried, and their mother was unwell faced with the

absence of a care taker. She planned to relocate them to Hyderabad in

close proximity to her own dwelling. She further stated that they agreed to

sell the property to the plaintiff when she expressed interest in purchasing

it, as they needed funds to acquire a 140 square yard site from someone

named Dhanaraj in Patel Nagar, Nampally. The rationale behind this

transaction, however, finds no mention in Ex.A.1. D.W.1 mentioned that

the plaintiff got drafted Ex.A1 without her knowledge, so the reason was

not included. Given that the defendants affixed their signatures to the

document, it is difficult to accept this explanation. It is not to be expected

that one would endorse a document without acquainting with oneself with

its contents.

20. It is not stated in the Ex.A.1 that the defendants intended to

purchase a 140 square yard site from Dhanaraj and sell the schedule land

for that purpose. Had the defendants' assertions held veracity, they would

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have mentioned the same in Ex.A1. The reason provided by D.W.1 fails to

inspire confidence.

21. The learned counsel for the appellants contends that Ex.A.1

agreement stipulates the payment of an amount of Rs.19,05,500/- on or

before 01.06.2007. But the plaintiff failed to make payment within

specified time, time is the essence of the contract and she is not entitled to

relief of specific performance. In support of his contention, he relied on

Chand Rani (Smt) (Dead) By LRs V. Kamal Rani (Smt) (Dead) By LRs1, the

Hon'ble Apex Court observed as follows:

19. It is a well-accepted principle that in the case of sale of immov- able property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtain- able in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agree- ment. It has to be ascertained whether under the terms of the con- tract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal lan- guage.

xxxxxx

In the said decision, the Hon'ble Supreme Court is pleased to refer the decision in Govind Prasad Chaturvedi v. Hari Dutt Shastri2 following the above ruling it was held at pages 543- 544:

"... It is settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract. [Vide Gomathinayagam Pil- lai v. Pallaniswami Nadar3] It may also be mentioned that the lan-

(1993) 1 SCC 519

(1977) 2 SCC 539

(1967) 1 SCR 227 : AIR 1967 SC 868

A.S.No.8 of 2011

guage used in the agreement is not such as to indicate in unmistak- able terms that the time is of the essence of the contract. The inten- tion to treat time as the essence of the contract may be evidenced by circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract."

25. From an analysis of the above case-law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:

1. From the express terms of the contract;

2. from the nature of the property; and

3. from the surrounding circumstances, for example: the object of making the contract.

22. In Nalamathu Venkaiya (deceased by L.R) & Anr. V. B.S.Neelakanta4,

this Court observed as follows:

26. ............though there is no express term in the agreement, the conditions stipulated for payment would go to show that the time is the essence of the contract and the plaintiffs failed to comply with the condition by paying or depositing the first instalment within the stipulated time.

23. In the said case relied on, that the payment is agreed to be paid

within the period of ten days only. Basing on the said condition, the Apex

Court held that time is the essence of the contract. In the present case, it

is agreed between the parties that the payment to be made on or before

01.06.2007, but not only before 01.06.2007. As such, it cannot be

concluded that failure to make payment within such time to be

constituted a breach of contract as Ex.A.1 transaction relates to

immovable property and it will normally be presumed that the time is not

the essence of the contract.

2005 SCC Online AP 578 : (2005) ALD 767

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24. Though the defendants adduced evidence to show that they

entered agreement with the plaintiff with a view to purchase the property

at Nampally, however, no such whisper is made in the agreement. The

terms of the agreement do not show the reason for the sale and the reason

for stipulating that time for payment to be the essence of the contract.

Ex.A.1 does not show that there is an urgent need for money within the

time. The words used in the agreement do not show intention of the parties

to make the time essence of the contract with reference to payment. The

terms of Ex.A.1 agreement do not show in express terms that the time is

essence of the contract.

25. The counsel for the appellants relied on K.S.Vidyanadam V.

Vairavan5, wherein the Hon'ble Apex Court observed as follows:

...............The above finding means that from 15-12-1978 till 11-7- 1981, i.e., for a period of more than 2 ½ years, the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property. We are inclined to accept the defendants' case that the values of the house property in Madurai town were rising fast and this must have induced the plaintiff to wake up after 2½ years and demand specific performance.

26. In the present case, the schedule property is situate in a village

i.e., Isukapalem panchayat but not in the urban area. Further, within six

days, admittedly, the plaintiff got issued legal notice to the defendants and

also filed the suit within one month. Whereas in the case cited, the

(1997) 3 SCC 1

A.S.No.8 of 2011

demand for specific performance is made two and half years later. Hence,

the present case is distinguishable with the case relied on.

27. Learned counsel for the appellants relied on Saradamani

Kandappan V. S.Rajalakshmi and others6, wherein the Hon'ble Apex Court

observed as follows:

28. The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement. If, for example, the vendor discloses in the agreement of sale, the reason for the sale and the reason for stipulating that time prescribed for payment to be the essence of the contract, that is, say, need to repay a particular loan before a particular date, or to meet an urgent time-bound need (say medical or educational expenses of a family member) time stipulated for payment will be considered to be the essence. Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment, time will be held to be the essence of the contract.

30. The intention making time essence of the contract for payment of balance price is clear from the following:

(a),.......;

(b) .......;

(c) Clause 6 specifically stipulates that the payments on due dates is the essence of the contract and in case of failure on the part of the purchaser the vendors shall cancel the agreement.

...........................

28. Coming to the facts of the present case, there is no clause in the

Ex.A.1 agreement stipulating that in case of failure on the part of the

plaintiff to pay the amounts as mentioned in the agreement, the

defendants can cancel the agreement or forfeit the advance amount.

(2011) 12 SCC 18

A.S.No.8 of 2011

Furthermore, it is not the defendants' case that the steep increase is a

circumstance which makes it in equitable to grant the relief of specific

performance. Hence, the facts of the present case can be distinguishable

with the case relied on.

29. In Saradamani Kandappan V. S.Rajalakshmi and others cited

supra, wherein the Hon'ble Apex Court further observed as follows:

37.......A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non- readiness". .......In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice.....

The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist.. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.

30. In Padmakumari and Others V. Dasayyan and others7, the Hon'ble

Apex observed as follows:

18. xxxxxxxxx

8. It will be clear from the aforesaid statement of law that even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may,

(2015) 8 SCC 695

A.S.No.8 of 2011

on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental; for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of the contract. The emphasised portion of the aforesaid statement of law is based on Lamprell v. Billericay Union [(1849) 3 Exch 283 : 154 ER 850] (Exch p. 308), Webb v. Hughes [(1870) LR 10 Eq 281] and Rickards (Charles) Ltd. v. Oppenheim [(1950) 1 KB 616 : (1950) 1 All ER 420 (CA)] .'"

31. In the said case, a notice was issued by the plaintiff only after one

year, therefore, it is observed that the plaintiff has not adhered to the time

which is stipulated to pay the balance consideration amount to defendants

1 to 11. Whereas in the present case, within six days, the plaintiff sent a

legal notice and within one month, she filed the suit. As such, the facts of

the case can be distinguishable.

32. The counsel for the appellants/defendants contends that there

was no averment in the plaint that the plaintiff offered for payment of

balance of sale consideration and the defendants failed to receive the same.

A reading of the plaint averments at para No.4 shows that the plaintiff has

taken a specific plea that she is always ready and willing to perform her

part of contract, the defendant failed to receive the balance sale

consideration till 01.06.2007 and avoided to meet the plaintiff in spite of

her best efforts to meet the defendants for payment of the balance sale

consideration and the plaintiff waited till 04.06.2007 with a hope that the

defendants may positively react to her persuasions, but as there is no

response from their side, she got issued legal notice.

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33. In J.P.Builders and another V. A.Ramadas Rao and another 8, the

Hon'ble Apex Court observed as follows:

22. The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.

xxxxxxxxx

23. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao9, the Apex Court held that:

"5. ... Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The conti- nuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be consi- dered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the con- duct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of considera- tion which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the at- tending circumstances. The court may infer from the facts and cir- cumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract." Xxxxxxxxxxx

26. It has been rightly considered by this Court in R.C. Chan- diok v. Chuni Lal Sabharwal [(1970) 3 SCC 140] that "readiness and willingness" cannot be treated as a straitjacket formula. This has to be determined from the entirety of the facts and circums- tances relevant to the intention and conduct of the party concerned.

(2011) 1 SCC 429

(1995) 5 SCC 115

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34. In Killamsetty Eswari and another Vs. Pedada Tulasi Rao per LRs

and others10, this Court observed as follows:

26. What happened during the interregnum period of two years between 29.04.2005 to 23.07.2007, is not explained in the plaint. The relevant paragraphs of the plaint are conspicuously silent about what happened from 29.04.2005 upto 01.05.2007. As per the averments contained in Paragraph III (d), the plaintiffs sought to raise a dispute for the first time after 29.04.2005 only in the first week of May, 2007. Therefore, the requirements of Section 16(c) of the Act, does not stand satisfied. We are not holding that time was the essence of the contract of sale and we are not putting the period between 29.04.2005 and 01.05.2007, as a period during which the plaintiffs were guilty of delay or laches. We are highlighting this only to show that the failure of the plaintiffs to produce any evidence for establishing their readiness, is aggravated by such a long lapse of time and their conduct.

35. The defendants assert that the plaintiff lacks the financial capacity

to pay the balance sale consideration amount. However, they have failed to

elucidate why they entered into the agreement with the plaintiff, if she

indeed lacked the financial capacity. It strains credulity to believe that the

defendants would willingly enter into the sale agreement (Ex.A.1) without

conducting due diligence. To establish the plaintiff's financial capacity, the

plaintiff relies on documents such as Exs.A7 to A11. Ex.A7 is a certified

copy of a registered sale deed dated 16.06.2005, in favor of P.W.2, for

Rs.7,65,000. Ex.A8 is a certified copy of a registered agreement of sale-

cum-GPA dated 22.06.2006, in favor of P.W.2, for Rs.16,68,000. Ex.A9 is a

certified copy of a registered agreement of sale-cum-GPA dated

01.02.2007, in favor of P.W.2, for Rs.3,00,000. Ex.A10 is a certified copy of

a registered sale deed dated 29.03.2004, in favor of P.W.2, for Rs.1,57,700.

(2017) 3 ALD 573 (DB)

A.S.No.8 of 2011

Ex.A11 consists of a collection of certified copies of registered sale deeds in

favor of P.W.2 and third parties.

36. P.W.2 testified that he and his wife were capable of paying the

balance sale consideration and bearing the expenses for obtaining the

regular sale deed, as they own 10 acres of land and a house under

different sale deeds. According to P.W.2, he sold plots from properties

covered under Exs.A8 and A9, as evidenced by Ex.A11, which consists of

certified copies of 20 registered sale deeds executed by him in favor of third

parties. During cross-examination, it was revealed that the value of the

land covered under Ex.A11 is Rs.14,50,000/-. P.W.2 asserted that he and

his wife paid the sale consideration mentioned in Ex.A1, but as per the

request of his wife, the sale agreement obtained in her favor.

37. P.W.2 stated that among the Sale Deeds covered under Ex.A11,

seventeen were relating to the year 1996 and three were relating to the

year 1997. After a thorough examination of the documents presented by

the plaintiff, this Court views that the plaintiff has successfully

demonstrated that she possesses sufficient funds to fulfill the balance sale

consideration mentioned in the Ex.A1-Agreement.

38. During the cross-examination of D.W.1, it was revealed that her

father did not own any property other than the schedule property. It was

further disclosed that her brother and mother sold the schedule property

to Kanakam Venkata Ramana Reddy through an Agreement of Sale dated

07.10.1984. The agreement stipulated a sale consideration of

Rs.2,32,000/-, of which Rs.20,000/- was received as advance sale

A.S.No.8 of 2011

consideration on that day. The agreement also contained a provision

stating that if they failed to execute the Sale Deed within the agreed period

in favor of Kanakam Venkata Ramana Reddy, they would be liable to pay a

penalty of Rs.20,000/- in addition to returning the advance amount of

Rs.20,000/-. D.W.1 further admitted that Kanakam Venkata Ramana

Reddy filed a suit in O.S.No.163 of 1996 before the Principal Junior Civil

Judge in Kovvuru, seeking the return of the amount. The suit was decreed,

and Kanakam Venkata Ramana Reddy subsequently filed E.P.No.59 of

2000 to recover the amount and put the property up for sale.

39. The evidence of D.W.1 shows that she filed E.A.No.147 of 2002 in

the aforementioned Execution Petition (E.P.) to raise the attachment of her

1/3rd share. She paid the decreetal amount during the pendency of

E.A.No.147 of 2002 was pending, resulting in the closure of the E.P., as

the entire amount was settled. It shows that the defendants are familiar

with the legal procedures. As seen from Ex.A1, there is no stipulation in

the agreement that the failure to pay the balance sale consideration on the

specified date would result in the agreement being canceled. But the

defendants got issued a notice stating that due to the plaintiff's failure to

pay the balance sale consideration as stipulated in the agreement, the

Agreement of Sale dated 29.02.2006 is canceled. However, the plaintiff

asserts that she was unable to pay the amount within the stipulated time

as the defendants did not come forward to accept the balance sale

consideration.

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40. On the other hand, the counsel for the respondent/plaintiff

submits that the plaintiff at all material time was ready and willing to

perform her part of the contract. As the defendants did not come forward,

the plaintiff promptly issued legal notice to the defendants and in the case

of sale of immovable properties, time is not the essence of the contract.

Time, it is stated, is not the essence of the contract in the case of

immovable properties, unless, there are grounds to hold to the contrary.

41. The appellants counsel contends that the plaintiff failed to

establish that she is ready and willing to perform her part of the contract.

He further contends that the plaintiff has to prove that she has the money

or has alternatively made necessary arrangements to get the money, and

the continuous readiness and willingness on the part of the plaintiff is a

condition precedent to grant the relief of specific performance.

42. In U.N. Krishna Murthy (since deceased) Thr. Lrs Vs.

A.M.Krishnamurthy11, the Apex Court held that :

Section 16(c) of the Specific Relief Act, 1963, bars the relief of specific performance of a contract in favour of a person who fails to aver and prove his readiness and willingness to perform his part of the contract. Given Explanation (i) to clause (c) of Section 16, it may not be essential for the plaintiff to tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, Explanation

(ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction.

43. In Nathulal Vs. Phoolchand12, the Hon'ble Apex Court observed that:

6. ........To prove himself ready and willing, a purchaser has not necessarily have to produce the money or to vouch for a concluded

2022 Live law SC 588 in Civil Appeal No.4703 of 2022

A.I.R. 1970 SC 546

A.S.No.8 of 2011

scheme for financing the transaction: Bank of India Ltd. & Ors. v. Jamsetji A. H. Chinoy and Messrs. Chinoy and Company 13. .................

44. In P. Daivasigamani Vs. S.Sambandan14, the Hon'ble Apex Court re-

ferred to case of in case of Syed Dastagir v. T.R. Gopalakrishna Setty15, a

three-Judge Bench of the Apex Court observed that:

10. It cannot be gainsaid said that even though time is not consi- dered as the essence of the contract in case of immoveable property and that the suit could be filed within three years as provided in Ar- ticle 54 of the Limitation Act, the respondent - plaintiff had to per- form his part of the contract within the reasonable time having re- gard to the term of the agreement prescribing the time limit. The time limit prescribed in the agreement cannot be ignored on the ground that time was not made the essence of the agreement or that the suit could be filed within three years from the date fixed for perfor- mance or from the date when the performance is refused by the vendor. Nonetheless, as discussed above, the suit having been filed by the respondent well within the prescribed time limit under Article 54 of the Limitation Act, the respondent could not have been non- suited on the ground of the suit being barred by limitation as sought to be submitted by learned counsel for the appellant.

12. The ratio in Mademsetty Satyanarayana v. G. Yelloji Rao16, it has been observed as under:

"7. Mr. Lakshmaiah cited a long catena of English decisions to define the scope of a court's discretion. Before referring to them, it is necessary to know the fundamental difference between the two sys- tems-- English and Indian--qua the relief of specific performance. In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no pe- riod of limitation for instituting a suit for the said relief and, there- fore, mere delay -- the time lag depending upon circumstances -- may itself be sufficient to refuse the relief; but, in India mere delay cannot be a ground for refusing the said relief, for the statute pre- scribes the period of limitation. If the suit is in time, delay is sanc- tioned by law; it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises."

A.I.R. 1950 P.C. 90 at p.96

2022 SCC OnLine SC 1391

(1999) 6 SCC 337

AIR 1965 SC 1405

A.S.No.8 of 2011

The aforesaid ratio has also been followed recently by this Court in R. Lakshmikantham v. Devaraji17. We, therefore, have no hesitation in holding that mere delay alone in filing the suit for specific perfor- mance, without reference to the conduct of the plaintiff, could not be a ground for refusing the said relief, when the suit was filed within the statutory time limit by the respondent-plaintiff.

"It is significant that this explanation carves out a contract which involves payment of money as a separate class from Section 16(c). Explanation (i) uses the words "it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court". (emphasis supplied) This speaks in a negative term what is not essential for the plaintiff to do. This is more in support of the plaintiff that he need not tender to the defendant or deposit in court any money but the plaintiff must [as per Explanation (ii)] at least aver his performance or readiness and willingness to perform his part of the contract".

18. In Sukhbir Singh v. Brij Pal Singh18 this Court had laid down that Law is not in doubt and it is not a condition that the respon- dents (Plaintiffs) should have ready cash with them. It is sufficient for the respondents to establish that they had the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of the suit till the date of the decree. The said principle was followed in case of A. Kanthama- ni v. Nasreen Ahmed19, in case of C.S. Venkatesh v. A.S.C. Murthy20 etc.

45. The learned appellant's counsel contends that the trial Court

passed a decree for specific performance, despite making claim by the

plaintiff for an alternative relief of a refund of the earnest money.

46. In the light of the above settled legal position, this Court views that

mere non deposit of the balance sale consideration amount, cannot be a

ground to hold that the plaintiff is not ready and willing to perform her part

of the contract. It is not the appellants/defendants case that despite the

(2019) 8 SCC 62

(1997) 2 SCC 200

(2017) 4 SCC 654

(2020) 3 SCC 280

A.S.No.8 of 2011

direction of the trial Court or this Court, the respondent/plaintiff failed to

deposit the amount.

47. In P.C.Varghese v. Devaki Amma Balambika Devi and Others21, the

Hon'ble Supreme Court held that an alternative plea of refund of the

earnest amount and damage could not be a bar to claiming a decree for the

specific Performance of a contract.

48. This Court views that simply because, the plaintiff has claimed

alternative relief, it cannot be held that the plaintiff is not entitled to the

primary relief of specific performance. The grant of alternative relief will

arise if the plaintiff's claim for specific Performance is refused. When the

plaintiff asks for alternative relief, there is no legal presumption or

assumption that he gives up the primary relief of specific Performance of

the contract.

49. The evidence on record establishes that the defendants executed

Ex.A.1 agreement of sale with the plaintiff, agreeing to the terms and

conditions. The trial Court, on proper appreciation of the evidence on

record, has come to the correct conclusion regarding the execution of the

sale agreement by the defendant.

50. In P.Ramasubbamma Vs. V.Vijayalakshmi & Ors22, the Hon'ble Apex

Court observed that:

Once the execution of the agreement to sell and the payment/receipt of advance substantial sale consideration was admitted by the vendor, nothing further was required to be proved by the plaintiff-

vendee. Therefore, as such, the learned Trial Court rightly decreed

21 A.I.R. 2006 SUPREME COURT 145 22 2022 (2) DNJ 625

A.S.No.8 of 2011

the suit for the specific performance of an agreement to sell. The High Court was not required to go into the aspect of the execution of the agreement to sell and the payment/receipt of substantial advance sale consideration once the vendor had specifically admitted the execution of the agreement to sell and receipt of the advance sale consideration; thereafter no further evidence and/or proof was required.

51. In Prakash Chandra V. Angadial23, the Hon'ble Apex Court

reiterated that the ordinary rule is that specific performance should be

granted. It ought to be denied only when equitable considerations point to

its refusal and the circumstances show that damages would constitute an

adequate relief.

52. Section 20(2) of the Specific Relief Act contains the cases in which

the Court may properly exercise discretion not to decree specific

Performance. Three types of cases have been given under subsection (2) in

the form of clauses (a), (b) & (c), in which the Court exercises its discretion

not to decree specific Performance; it is useful to extract the said clauses

hereunder:

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances un- der which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b) where the performance of the contract would involve some hard- ship on defendant which he did not foresee, whereas its non- performance would involve no such hardship on Plaintiff; or

(c) where defendant entered into the contract under circumstances which though not rendering the contract voidable, make it inequita- ble to enforce specific performance.

53. The instant case does not fall under any of these clauses. Usually,

when the trial Court exercises its discretion in one way or another after

23 A.I.R. 1979 SC 1241

A.S.No.8 of 2011

appreciating the entire evidence and the materials on record, the appellate

Court should not interfere unless it is established that the discretion has

been exercised perversely, arbitrarily or against judicial principles. The

appellate Court should also not exercise its discretion against the grant of

specific performance on extraneous considerations or sympathetic

considerations. It is true, as contemplated under section 20 of the Specific

Relief Act, that a party is not entitled to get a decree for a specific

performance merely because it is lawful to do so. Nevertheless, once an

agreement to sell is legal and validly proved and further requirements for

getting such a decree are established, the Court has to exercise its

discretion to grant relief for a specific performance.

54. Having regard to the facts and circumstances of the case and to

the conduct of the parties, I have no hesitation in holding that there was

due compliance of section 16(c) r/w explanation of Specific Relief Act, on

the part of the plaintiff and that it was the appellant who had raised a

contention regarding the forfeiture of the advance amount.

55. After going through the entire evidence on record, this Court

upholds the trial court's findings that the defendants executed Ex.A.1

registered agreement of sale agreeing to the terms and conditions therein

and the plaintiff is always ready and willing to perform her part of the

contract.

56. The counsel for the appellants contends that the trial Court fixed

the Advocates' fee without following A.P. Advocates' Fee Rules, 2010. As

seen from the decree, the trial Court fixed the Senior Advocate's fee at

A.S.No.8 of 2011

Rs.1,00,000/- and Junior Advocate's fee at Rs.33,000/-. This Court views

that to appreciate the said contention raised by the appellants, it would be

proper to refer the relevant Rules mentioned in A.P. Advocates' Fee Rules,

2010, which are as under:

7. In all suits where any declaration of title to any property is involved along with any other consequential relief such as possession or injunction, the fee shall be fixed at the rate 10% of the total value of the property taken as the value for the purpose of Court Fee and Suits Valuation Act, 1956 or any such Act for the time being in force, subject to a minimum of Rs. 2,000/- in the Court of Civil Judges (Junior Division) and a minimum of Rs. 4,000/- in other Courts subject to a maximum of Rs. 1,50,000/-.

xxxxxxxxxx

10. In all suits for enforcement of an agreement of sale or any other relief under the Specific Relief Act, 1877, the fee shall be fixed as in suits for declaration of title to immovable property mentioned in Rule 7 and any other suit for recovery of possession under a contract of sale or otherwise or for the recovery of money under such a contract shall be treated likewise.

xxxxxxxxxx

42. Whenever a Counsel of more than 15 years standing at the Bar is assisted by a Junior Counsel from the time when appearance is entered, an additional fee amounting to 1/3rd of the fee payable to the Senior Counsel shall be fixed by the Court subject to a minimum of Rs.1,000/-.

As per the decree in O.S.No.67 of 2007, the valuation of the Suit

is shown as Rs.21,05,500/-. As such, this Court views that as per Rules

referred above, the fixation of Senior Advocate's fee at Rs.1,00,000/- and

the Junior Advocate's fee at Rs.33,000/- cannot be found fault with.

57. Having reached the conclusion that the Judgment of the trial court

is the result of proper appreciation of evidence, I find no illegality or

arbitrariness in the impugned Judgment. In my view, however, the learned

Judge ought to have granted a decree for specific performance, directing

A.S.No.8 of 2011

the plaintiff to pay a balance sale consideration amount with interest

thereon at 12% per annum.

58. The findings of the trial court are accurate, and there is no need for

interference except for awarding interest on the balance sale consideration

amount. Accordingly, the points raised in the Appeal are answered.

59. As a result,

i) The Appeal is allowed in part. The Judgment and decree dated dt.14.12.2010 passed in O.S.No.67 of 2007 by the learned Principal District Judge, Nellore, is hereby confirmed to the relief of specific Performance with costs, and

ii) The Judgment and decree dated 14.12.2010 in the O.S.No.67 of 2007 shall stand modified and direct the 1st respon- dent/plaintiff to deposit the balance sale consideration amount of Rs.19,05,500/- (Rupees Ninteen Lakhs Five Thou- sand Five Hundred Only) within two months from the date of this Judgment (if not already deposited), and the Plaintiff is further directed to deposit the amount towards interest @ 12% per annum on the balance sale consideration from 01.06.2007 till the date of deposit of such amount in the Court, and

iii) On such deposit, the defendants 2 and 3 shall execute the sale deed in favour of the plaintiff within one month, failing which, the Court shall execute the sale deed in favour of the Plaintiff in respect of the plaint schedule property, and

iv) After execution of the sale deed, the defendants 2 and 3 are entitled to withdraw the amount deposited in the Court, and

v) In the facts and circumstances, the parties have to bear their costs in the Appeal.

A.S.No.8 of 2011

60. Miscellaneous petitions pending, if any, in this Appeal shall

stand closed.

____________________________________ JUSTICE T. MALLIKARJUNA RAO

Date: 04.07.2023 MS/SAK

A.S.No.8 of 2011

THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

APPEAL SUIT NO. 8 OF 2011

DATE: 04.07.2023

MS/SAK