Myneni Purnachandra Rao, vs Pulipati Badrinarayana,
2023 Latest Caselaw 4650 AP

      THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

                  SECOND APPEAL No.428 of 2012


JUDGMENT:

This is the vendee's appeal under Section 100 C.P.C. He

filed O.S.No.112 of 2007 seeking for specific performance of an

agreement for sale dated 10.11.1986 with a direction to the

defendants to execute a registered sale deed in favour of the

plaintiff and for delivery of possession of the property and for

costs and such other reliefs. After due trial, the learned

Principal Senior Civil Judge, Nandyal dismissed the suit.

Aggrieved by it, he preferred an appeal before the learned

District Court in A.S.No.1 of 2010. After due hearing, the

learned III Additional District Judge, Kurnool at Nandyal by a

judgment dated 06.01.2012 dismissed the appeal and thereby

confirmed the judgment of the trial Court. In pursuit of his

prayer, plaintiff is now in this second appeal.

2. Respondent Nos.1 and 2 are natural brothers to each

other and they were the defendants in the suit and respondents

in this appeal.

3. On 22.06.2012 a learned Judge of this Court admitted the

appeal on the following substantial questions of law:

Dr. VRKS, J S.A.No.428 of 2012

i) Whether time is the essence of the contract and the defendants had committed default in performing their part of contract from the material evidence available and appreciated by the Courts below?

ii) Whether the delay of 20 years in seeking the relief of specific performance entitles for equitable relief of specific performance?

4. Learned counsel on both sides submitted arguments and

cited precedent.

5. The following are the facts admitted on both sides:

(a) The property in dispute is Ac.0.81 cents of wet land in

R.S.No.437/1 situate in Mulasagaram Village of Nandyal

Sub-Division of Kurnool District. Originally it was owned by the

plaintiff and one Cherukuru Sakkubayamma. Together they

sold this property to defendants under a registered sale deed

dated 30.09.1982. Thereafter defendants being owners

continued to hold the title and possession over that property.

Then they intended to sell it and in that process plaintiff offered

to purchase the same and therefore between them an agreement

for sale dated 10.11.1986 came to be executed. That agreement

for sale was signed by both parties. The sale consideration was

Dr. VRKS, J S.A.No.428 of 2012

fixed at Rs.2,25,000/-. On the date of agreement for sale,

vendee/plaintiff/appellant paid Rs.10,000/- towards part of

agreed sale consideration. That was acknowledged in the

agreement for sale. The balance sale consideration remained at

Rs.2,15,000/-. The agreement stipulated that the

vendee/plaintiff was given time to pay Rs.1,00,000/- on or

before 31.03.1987. Vendee/plaintiff was given further time to

pay Rs.1,15,000/- on or before 09.09.1987. If payments were

made within those stipulated dates, it was agreed between

parties, that the vendors/defendants should execute a

registered sale deed in favour of vendee/plaintiff at the expenses

of the plaintiff. A further stipulation indicates that in the event

of vendee/plaintiff delaying his payments, he was to pay 15%

interest concerning Rs.1,00,000/- and the interest component

had to be computed from 31.03.1987 till 09.09.1987. It is

further stipulated that in the event of delay on part of the

plaintiff in making payment of that Rs.1,00,000/- as well as the

other scheduled payment of Rs.1,15,000/- on or before

09.09.1987, on the entire balance sale consideration of

Rs.2,25,000/- the plaintiff had to pay 18% interest and this

Dr. VRKS, J S.A.No.428 of 2012

interest component continues till the entire payment was made

and registration of regular sale deed was effected.

(b) This agreement for sale is the one that fell into dispute

leading to the litigation. Based on this agreement for sale

plaintiff sued the defendants. While filing the suit plaintiff

voluntarily deposited Rs.9,87,735/- in the trial Court and that

represents the balance sale consideration along with interest

calculated at the rates mentioned in the agreement for sale.

The plaint was presented on 18.06.2007. Thus, concerning

agreement for sale dated 10.11.1986 the suit was filed by

vendee on 18.06.2007 which means on expiry of 20 years 7

months time. In the plaint it is alleged that plaintiff was

offering for payment of balance sale consideration but the

defendants on lame excuses dodged the matter. Therefore,

plaintiff got issued a notice dated 01.06.2007 and the

defendants received it and got issued a reply notice dated

11.06.2007 wherein they made false allegations. In the plaint it

is mentioned, plaintiff has been ready and willing to perform his

contractual obligations throughout. With such averments the

suit was laid.

Dr. VRKS, J S.A.No.428 of 2012

(c) Defendants filed their written statement stating that

despite their demands plaintiff never came forward to pay the

balance sale consideration and in fact refused to purchase the

property and now at this length of time this false litigation was

brought in and they sought for dismissal of the suit.

6. Learned Principal Senior Civil Judge settled the following

issues for trial:

i) Whether the plaintiff has been ready and willing to perform his part of contract?

ii) Whether the plaintiff has rescinded the agreement for sale if so, whether the plaintiff was prepared to forfeit the earnest money of Rs.10,000/-?

iii) Whether the time is essence of the contract of sale?

iv) Whether the sale agreement is barred by time?

v) Whether the plaintiff is entitled for specific performance of agreement of sale dated 10.11.1986?

vi) To what relief?

Dr. VRKS, J S.A.No.428 of 2012

7. At the trial, plaintiff testified as PW.1 and got marked

Exs.A.1 to A.7. 1st defendant testified as DW.1 and no

documentary evidence was adduced.

8. Learned trial Court extensively considered the evidence on

record and terms and conditions of agreement for sale/Ex.A.1

and Section 16(c) of the Specific Relief Act, 1963 and considered

several legal authorities cited before it on both sides and

considered all the contentions raised on both sides and held

that vendee/plaintiff failed to prove his readiness and

willingness to perform his part of the obligation and the suit

was barred by limitation and even if it was not barred by

limitation plaintiff failed to approach the Court within a

"reasonable time". According to the learned trial Court, as a

matter of principle of law, time may not be the essence of the

contract. Having said so, the learned trial Court also observed

that since defendants/vendors by the very terms of Ex.A.1-

agreement for sale indicated their need for selling the property

for the purpose of securing money for their business

investment, mentioned various dates for payments and the

outer date for payment of balance sale consideration those

terms cannot be ignored. At more than one place the learned

Dr. VRKS, J S.A.No.428 of 2012

trial Court recorded that there has been no plausible

explanation on part of the plaintiff/vendee about this long

length of delay by more than two decades in approaching a

Court for specific performance and in seeking a discretionary

relief. It finally came to an emphatic conclusion that plaintiff

had not made out a case for specific performance and dismissed

the prayer in the suit accordingly.

9. Vendee in his first appeal argued before the learned

Additional District Judge that the time is not the essence of the

contract. That the balance sale consideration could be paid

along with interest and he accordingly deposited the entire

balance sale consideration and interest into the Court and that

shows his readiness and willingness and that there is no delay

on part of plaintiff in suing the defendants and questioned the

correctness of the judgment of the trial Court. Stout protest

was raised by the vendors/defendants before the learned first

appellate Court. On hearing submissions on both sides, the

learned first appellate Court settled the following points for its

consideration:

Dr. VRKS, J S.A.No.428 of 2012

1) Whether the plaintiff is entitled for specific performance of agreement of sale dated 10.11.1986?

2) To what relief the appellant/plaintiff is entitled?

10. After considering the facts on record and assessing the

evidence on record and observing the reasons given by the

learned trial Court and after referring to the various precedent

cited on both sides, the learned first appellate Court observed

that the litigation initiated by the plaintiff could be said as one

to gain unfair advantage and he is using the agreement for sale

as an instrument of oppression and plaintiff was not fair and

failed to approach the Court within reasonable time and there

was total inaction on his part for 20 years. In the view of the

learned first appellate Court the recitals in Ex.A.1 convinced it

to hold that time was the essence of the contract. It agreed with

the conclusions reached by the trial Court and found no merits

in the arguments of the appellant/plaintiff and accordingly

dismissed the appeal and confirmed the judgment of the trial

Court.

Dr. VRKS, J S.A.No.428 of 2012

11. It is in the context of the above facts and circumstances,

the substantial questions of law raised in this appeal fall for

consideration.

12. In a Second Appeal filed against concurrent findings of

both the Courts below the amplitude of powers of this Court

under Section 100 C.P.C. are brought to the attention of this

Court by the learned counsel for respondents by citing

Thulasidhara v. Narayanappa1. Explaining the scope of

interference on part of this Court while exercising jurisdiction

under Section 100 C.P.C., their Lordships have laid the law to

the effect that reappreciation of entire evidence on record is

impermissible unless the Courts below reached to conclusions

based on inadmissible evidence or without evidence.

Interference is permissible only when the impugned judgments

are contrary to the mandatory provisions applicable to the

questions that arose between parties.

(2019) 6 SCC 409

Dr. VRKS, J S.A.No.428 of 2012

13. On the above principles of law nothing is debated before

this Court. Therefore, within the confines of the above-referred

principles this Court must address the dispute.

14. Learned counsel for appellant argued that the purport of

Section 16(c) of the Specific Relief Act, 1963 was not properly

appreciated by the Courts below. The Courts below failed to

consider the conduct of the respondents/defendants/vendors

and failed to notice that they never rescinded the contract and

never issued a notice demanding payments of balance sale

consideration. That the property is still with the defendants

and therefore, they did not alter their possession in any manner

and hence, granting the relief prayed by the appellant would not

cause any injustice to the defendants/respondents. Learned

counsel further argued that time is not essence in this

agreement for sale and there has been no evidence indicating

any hike in prices. Therefore, there would be no loss to the

defendants if specific performance is granted in favour of the

appellant.

15. As against it, the learned counsel for respondents/

defendants contended that the judgments of the Courts below

Dr. VRKS, J S.A.No.428 of 2012

are based on evidence and all the conclusions are reached only

after furnishing elaborate reasons and there is no perversity in

those findings. Mere alternative view that could be taken by

this Court in second appeal cannot allow this Court to

substitute its view as long as the view taken by the Courts

below are reasonable on the evidence available before them.

That it is an urban property and litigation was initiated 21 years

after the agreement for sale and the plaint and the evidence of

plaintiff would indicate serious laches in initiating the litigation.

That the sale was intended by the respondents/vendors with a

view to get money for their business investment and enormous

delay on part of plaintiff decimated their plans. That the

evidence on record would indicate that the defendants/vendors

indicated their refusal to sell to the plaintiff way back in the

year 1987 when the vendee/plaintiff failed to offer even the first

installment of sale consideration. Learned counsel further

argued that plaintiff issuing notice by itself does not amount to

his readiness and willingness as contemplated under Section

16(c) of the Specific Relief Act and that the notion of time is not

Dr. VRKS, J S.A.No.428 of 2012

essence of contract was doubted by the Hon'ble Supreme Court

of India in Saradamani Kandappan v. S.Rajalakshmi2

espousing for reformulation of the idea. It is for these reasons,

they sought dismissal of the appeal.

16. After thoughtful consideration of material placed on

record and the earnest arguments advanced on both sides, the

following aspects are required to be noticed:

An agreement for the sale of immovable property

contemplates intendment of conveyance of title in future from

one to the other. Every bargain is settled for mutual benefit of

both parties to the contract. They are evenly placed when they

entered into Ex.A.1-agreement for sale. Vendors intended to

convey the property with a view to get money to use the money

for a purpose that would serve better for them. Vendee intends

to obtain the title over the property in contemplation to raise his

wealth by investing in the real property. Each side incorporated

terms in the agreement for sale that would enable both sides to

reap the required benefits. In the case at hand, Ex.A.1-

(2011) 12 SCC 18

Dr. VRKS, J S.A.No.428 of 2012

agreement for sale was executed by both sides on 10.11.1986.

The appellant is the vendee. In his evidence he stated that he

already owns Acs.46.00 cents of land. He said that some of his

lands are nearer lands that he intended to purchase under

Ex.A.1. At one point in time this very land was owned by him.

Therefore, he knew the type of land he agreed to purchase. In

his evidence PW.1/appellant/plaintiff stated that the

respondents/ defendants approached him and requested him to

purchase the land and he agreed to it. Respondents mentioned

in Ex.A.1 that they intended to sell this property with a view to

acquiring money to invest the same in business of

manufacturing iron sheets. Total sale consideration is

Rs.2,25,000/-. Appellant paid Rs.10,000/- on 10.11.1986

which was the date on which Ex.A.1-agreement for sale was

executed. Looking at the kind of richness of the appellant, who

owned Acs.46.00 cents of land who also once owned this very

land, it was not difficult for him to pay the entire sale

consideration and obtain a regular registered sale deed at once.

However, that was not the way in which he settled for the

bargain. By the very terms of Ex.A.1-agreement for sale he

intended to pay the entire sale consideration in two further

Dr. VRKS, J S.A.No.428 of 2012

installments. Parties were at liberty to agree on it. Parties were

also at liberty either to have a clause for payment of interest or

not to have any clause for payment of interest. The immovable

property has been in possession of the vendors/respondents.

The vendee/appellant was not in possession of the property and

he had paid only Rs.10,000/- out of Rs.2,25,000/-. Thus, he

parted with a small portion of the agreed sale consideration.

This is not a case of lending and borrowing of any amount.

Though property was not in the possession of the appellant, the

appellant agreed to pay the balance sale consideration in two

installments and further agreed to pay the same with interest in

the event of his failure to pay the balance sale consideration

within the stipulated dates. What does it indicate is a matter

for analysis. Be it noted once again, that it is not a case of

appellant's financial incapacity that is either alleged or argued.

The fact that respondents stipulated for payment of interest on

delayed payment is indicative of the fact that they intended to

expedite the deal to reach its culmination as quickly as possible.

It is only for that reason; the vendee was asked to pay his own

money with interest in the event of delay. There are two

different dates for the two subsequent payments that are

Dr. VRKS, J S.A.No.428 of 2012

mentioned in the agreement for sale. The first payment was to

be paid on or before 31.03.1987. By that date vendee/appellant

did not pay the agreed part consideration of Rs.1,00,000/-.

About this aspect of the matter appellant as PW.1 testified

saying that he was requesting the vendors to measure the land

and receive the remaining sale consideration and he requested

them on several occasions but they were postponing it giving

lame excuses. This evidence of PW.1 is devoid of any dates of

himself raising demands against the vendees inviting them to

perform their part of the contract. In that context, the vendors

questioned him in cross-examination to elicit the details of his

assertion. In his cross-examination PW.1 said that 10 days

prior to the outer date for his payment on 31.03.1987 he went

to Vijayawada and found respondent No.1 and offered him

Rs.1,00,000/- but respondent No.1 declined to receive the

payment saying that his brother/respondent No.2 was not

available. PW.1 further said that respondent No.1 told him that

he and his brother would come to Nandyal where the appellant

lives and would receive the payment. According to appellant,

the respondents never came to him and never met him and

never asked him to pay that Rs.1,00,000/-. What was to be

Dr. VRKS, J S.A.No.428 of 2012

done in such circumstances is a matter for consideration. Since

the appellant was waiting for respondents to come and meet

him and receive the money and since the respondents never

came to him was there anything on part of the appellant to do

then. One who is eager to complete the deal would have

certainly put another effort in this regard. Appellant would

have sent a word to the respondents or would have issued a

notice inviting the respondents to come and receive money or

would have gone to the respondents once again and made the

payment. In his own showing appellant did nothing of this. If

respondents had promised to come and receive money and if

they did not comply with that promise that may have been

taken by the appellant as one of refusal on part of respondents

to complete the deal. If that were to be considered as refusal on

part of the respondents, the appellant ought to have initiated

legal process at that point of time in the year 1987. Even that

he did not do. Even according to appellant's own showing the

next visible thing he did was only 20 years later when he issued

Ex.A.1-notice dated 01.06.2007 expressing his desire to have

the agreement for sale enforced. Could a reasonable prudent

man ever agree that a vendee intending to purchase a property

Dr. VRKS, J S.A.No.428 of 2012

having parted with Rs.10,000/- would wait for 20 years without

taking any step forward either for culmination of the contract or

for dissolving the contract. It is clear the Courts below

categorically held that by his own conduct appellant

demonstrated to the Courts that he has not been ready and

willing to perform his part of the contract. Payment of balance

sale consideration is an obligation on part of the appellant. If

the vendors did not receive the payment, nothing prevented him

from sending the payment by known modes of remittance. He

did not do that. This demonstrated inaction on part of

appellant convinced the Courts below to think that appellant

was not ready and willing to perform his part of the contract.

Section 16(c) of the Specific Relief Act mandates the appellant to

plead and prove that he has always been ready and willing to

perform the essential terms of the contract. Payment of

consideration is the most essential term of a contract. Evidence

on record clearly discloses that for all these years appellant did

not evince any desire to pay balance sale consideration and

obtain a registered sale deed. The contention of the appellant is

curious. He states that since there is a clause concerning

payment of interest he could be making his payment at any time

Dr. VRKS, J S.A.No.428 of 2012

along with interest and that shall be considered as sufficient

compliance of contractual obligations on his part. Precisely

such conduct is condemned by this Court in Rudram Builders,

Secunderabad v. Mir Asharafuddin 3. That was a case where

the vendee instead of making payment of agreed sale

consideration at one time or in two installments was making

payments in small measures in about 34 occasions. There were

other facts that fell for consideration. It was in those

circumstances a learned Judge of this Court held that the

conduct of the vendee/plaintiff indicated as if he was repaying

the loan installments and his conduct did not show that he was

obliged to make payment of sale consideration for an immovable

property. Such conduct was found inequitable and indicates

absence of bona fides disentitling specific performance.

17. In the case at hand, the attitude of the appellant indicates

that vendors would not lose anything because he is prepared to

pay interest to them. Be it noted, vendors did not agree for sale

consideration with any interest. They agreed to receive sale

consideration in installments even without interest. They

2011 (5) ALD 554

Dr. VRKS, J S.A.No.428 of 2012

incorporated the clause of interest only when payments were

not made at the scheduled dates. Thus, the clause concerning

interest was only a contemplated catalyst. Thus, what was

intended to excite the appellant to complete the deal is sought

to be argued as one of broad heartedness on part of appellant to

pay interest. This ingenious contention has no moral and no

legal basis. Be that as it may. According to Ex.A.1, if there was

failure to pay Rs.1,00,000/- by 31.03.1987 the appellant was to

pay 15% interest on that Rs.1,00,000/- and make such

payment on or before 09.09.1987. The pleadings and evidence

of appellant do not indicate any positive act on part of the

appellant in making any payment including interest between

those dates. When once appellant was aware that 10 days prior

to 31.03.1987 respondents declined to receive money he must

have been on his guard to safeguard his interest that accrued to

him by virtue of Ex.A.1. His failure to make any payments and

his failure to show any efforts on his part in making any

payments is a clear indication of disinclination on the part of

the appellant in having the deal materialized. Therefore, Courts

below are right in holding that appellant has failed to

Dr. VRKS, J S.A.No.428 of 2012

demonstrate his readiness and willingness and therefore, he

was not entitled for specific performance of agreement for sale.

18. The contention of the appellant is that the values of the

land did not go up, that the respondents have been still owning

and possessing this property without any further encumbrances

and that the respondents never issued a notice rescinding the

agreement entered between them under Ex.A.1 should have

been considered for granting relief in his favour. On this basis,

the appellant argues that there is default on part of respondents

and for that his suit for specific performance should be decreed.

There is absolutely no merit in this contention. Ex.A.1 does not

indicate any further obligation on the part of respondents till

the appellant remitted all the payments due under the

agreement. Simply because respondents did not revoke the

contract does not mean that appellant is entitled for specific

performance of it. If there is a positive obligation on part of the

respondents to do anything, only then the appellant can

contend about failures on part of respondents but not

otherwise. In the case at hand, there is no occasion for

respondents to do anything positive to compel further obedience

from the appellant. The entire obligation has been on the

Dr. VRKS, J S.A.No.428 of 2012

shoulders of appellant and the appellant never fulfilled any of

his obligations for a period of 20 years and more.

19. Learned counsel for appellant cited the celebrated

judgment of the Hon'ble Supreme Court of India in Chand Rani

v. Kamal Rani4. That is a case where their Lordships

expounded the principle as to whether time is essence of

contract or not. Their Lordships held that there is no

presumption to hold that time is essence of the contract. In

that case vendors issued a notice to vendee demanding

payments and the vendee failed to make the payments. In those

circumstances, their Lordships refused to grant specific

performance. Learned counsel for appellant also cited

Gomathinayagam Pillai v. Palaniswami Nadar 5. That was

also a case where their Lordships dealt with the concept as to

time is essence of contract or not. On facts their Lordships

found that the vendee has not been ready and willing to perform

his part of the contract. In those circumstances, their

Lordships refused to grant the relief of specific performance.

(1993) 1 SCC 519

AIR 1967 SC 868

Dr. VRKS, J S.A.No.428 of 2012

20. In the case at hand, when once it is demonstrated that

appellant has not been ready and willing to perform his part of

the contract, the question whether time is essence of the

contract or not remains for academic discussion and nothing

more. The stipulation of clauses for interest were rightly

considered by the learned first appellant Court holding that they

are essential terms of the contract. This Court finds no flaw in

that approach. Learned counsel for respondents cited Jagjit

Singh v. Amarjit Singh6. Their Lordships expounded Section

16(c) of the Specific Relief Act and categorically held that a

vendee who failed to prove his readiness and willingness to

perform his part of obligations is disentitled from seeking

specific performance.

21. The prescribed period of limitation is three years in terms

of Article 54 of the Schedule of the Limitation Act. In this

regard it has to be stated that way back in the year 1987 when

the respondents refused to receive money of Rs.1,00,000/-

allegedly sought to be paid by appellant and when respondents

never met the appellant thereafter the reasonable inference any

(2018) 9 SCC 805

Dr. VRKS, J S.A.No.428 of 2012

prudent man would have drawn from it was that there was

refusal on part of respondents. If that is the case, the finding of

the learned trial Court which was upheld in the first appeal by

the learned Additional District Judge that the suit was barred

by limitation cannot be disputed as the suit was filed 20 years

thereafter.

22. From the discussion made above, it is clear that looking

at the terms of the agreement for sale and the surrounding

circumstances and conduct of parties on both sides, there was

no default committed by respondents and the time is essence of

the contract and the Courts below rightly appreciated the

evidence and reached to legally correct conclusions and the

appellant who invoked the legal adjudication 20 years after

agreement for sale is not entitled for specific performance and

the observations of the Courts below that it is inequitable to

grant a relief of specific performance is justified on facts and

law. Both the substantial questions of law are answered against

the appellant.

Dr. VRKS, J S.A.No.428 of 2012

23. In the result, this Second Appeal is dismissed with costs.

As a sequel, miscellaneous applications pending, if any,

shall stand closed.

_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 04.10.2023 Ivd

Dr. VRKS, J S.A.No.428 of 2012

THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

SECOND APPEAL No.428 of 2012

Date: 04.10.2023

Ivd