Smt. Vatsavai Suryakumari, vs Sri Dontamseeti Satyanaryaana ...
2023 Latest Caselaw 4716 AP

      HON'BLE DR. JUSTICE K. MANMADHA RAO

        SECOND APPEAL Nos.602 & 603 of 2011

COMMON JUDGMENT :

      These Second Appeals arose out of a common judgment

dated 25.04.2011 passed in A.S.Nos233 of 2008 & 25 of 2009

on the file of the Principal District Judge, West Godavari at

Eluru (for short "the Court below")


      2.     As the issue involved in both the second appeals

is one and the same, these matters are being taken up together

for disposal by way of this Common Judgment.


      3.    Originally the appeal in A.S.No.233 of 2008 was

filed by the appellant/plaintiff challenging the judgment and

decree dated 30.10.2008 passed by the learned Senior Civil

Judge, Tadepalligudem (for short "the trial Court") in O.S

No.149 of 2002 filed for the relief of specific performance of

suit agreement of sale with respect to the suit schedule

property or in alternative for refunding of the amount paid by

him under the suit agreement of sale along with interest to a

tune of Rs.2,61,300/- by way of creating charge over such

property and for costs.   The same was decreed by the trial

Court granting alternative relief only that too in part for
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                                                SA Nos.602 & 603 of 2011


Rs.95,000/- along with interest at 18% per annum in addition

to creating charge over the schedule property.            Whereas,

A.S.No.25 of 2009 was filed by the appellant/defendant

challenging the above judgment and decree granting such

alternative relief against her.


      4.     The sum and substance of the case of the

appellant/plaintiff   in   A.S.No.233   of   2008   who      is    the

respondent/defendant in A.S No.25 of 2009 is that the

defendant with a view to discharge the loan due by her to

Union Bank of India, Unguturu and as she is not getting

considerable income from schedule property, agreed to sell the

same to the plaintiff for Rs.1,05,000/- on 22.2.1995 and

executed an agreement of sale on the same day in his favour

with such terms and conditions as mentioned therein and as

per the conditions of such agreement of sale, the plaintiff

deposited Rs.10,000/- on 22.2.1995 and Rs.85,000/- on

23.5.1995 in his name as sundry deposits in Union Bank of

India, Ungutur against receipts issued by such bank. The

defendant has to perform her part of contract byway of taking

delivery of original title deed from the bank by giving

information to the plaintiff so as to transfer the above amount

to the credit of loan account of defendant. Though the plaintiff

DR.KMRJ SA Nos.602 & 603 of 2011

has always been ready and willing to perform his part of

contract, it is the defendant who failed to perform her part of

contract and that after exchange of legal notices the plaintiff

filed the appeals.

The defendants filed written statement before the trial

Court and denied all the allegations and stated that she never

agreed to sell the schedule property nor executed any

agreement of sale in favour of the plaintiff, who is the friend of

her husband obtained signatures of herself and her husband

on empty and stamped papers by representing that they are

required for one time settlement regarding the loan due by her

to Union Bank of India, Ungutur. Subsequently the matter

relating to the above bank was settled with the help of plaintiff

and that the suit documents are created by plaintiff taking

advantage of obtaining signatures from herself and her

husband with a view to grab the schedule property. The suit is

barred by time and that the time stipulated as an essence of

contract that there is no clause in the agreement of sale to pay

interest.

5. Basing on the above pleadings, the trial Court

framed the following issues :

DR.KMRJ SA Nos.602 & 603 of 2011

1. Whether the agreement of sale dated 22.2.1995 is true and supported by consideration?

2. Whether the deposit of Rs.10,000/- on 22.2.1995 and Rs.50,000/- on 23.5.1995 towards part of sale consideration are true?

3. Whether the plaintiff is entitled to claim interest and if so at what rate?

4. Whether the suit is barred by limitation?

5. Whether the plaintiff is entitled for decree for specific performance and possession or in the alternative for suit amount with a charge?

6. To what relief?

6). During the course of trial, on behalf of the plaintiff,

PW.1 to PW.3 were examined and Exs.A1 toEx.A7 were

marked. On behalf of the defendants, DW.1 and D.W.2 were

examined and Ex.B1 and Ex.B2 were marked.

7. After considering the material available on record and

after hearing the arguments, the trial Court decreed the suit,

granting alternative relief only in part and dismissed such suit

regarding the primary relief of specific performance of

agreement of sale. Being not satisfied with the same, the

plaintiff preferred A.S No.233 of 2008. Whereas, having not

satisfied with the above judgment and decree, the defendant

preferred A.S No.25 of 2009 before Principal District Judge,

Eluru (for short "the first appellate Court").

8. Since the appeals in A.S.No.233 of 2008 and A.S

No.25 of 2009 arise out of one judgment, the first appellate

DR.KMRJ SA Nos.602 & 603 of 2011

Court taken up together for disposal by way of common

judgment.

9. Basing on the pleadings, the first appellate Court has

framed the following points for consideration:

1. Whether Ex.A1 agreement of sale is true and supported by consideration?

2. Whether the time is stipulated as an essence of contract in Ex.A1 agreement of sale?

3. Whether the suit under appeals is barred by time?

4. Whether the plaintiff is entitled to have specific performance of agreement of sale with respect to schedule property as prayed for? And

5. Whether the judgment and decree dated 30.10.2008 passed by the learned Senior Civil Judge, Tadepaligudem in O.S No.149 of 2002 is liable to be set aside?

10. Basing on the facts and circumstances of the

case, the first appellate Court has allowed the A.S.No.233 of

2008 with costs setting aside the judgment and decree dated

30.10.2008 by the learned Senior Civil Judge,

Tadepalligudem in O.S No.149 of 2002. Consequently,

A.S.No.25 of 2009 is dismissed. Challenging the same, the

present two appeals came to be filed by the

defendant/appellant.

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11. This Court vide order, dated 28.10.2011, has

ADMITTED the appeals by considering the following

substantial questions of law.

a) When the agreement is silent as to the date, on which the transaction must be completed, whether the plaintiff can institute a suit only on the basis of a notice issued at his convenience, without reference to the terms of the agreement; and

b) Whether the limitation for institution of a suit in the matters of this nature would start from any specific event or just from the date of notice issued by the plaintiff?

12. Heard Sri K. Chidambaram, learned Senior counsel

appearing for the appellant and Sri P. Chandraiah Naidu,

learned counsel appearing for the respondent.

13. On hearing, learned counsel appearing for the

appellant while reiterating the contents made in the grounds

of appeals submits that the first appellate Court erred in

decreeing the suit for the primary relief of specific

performance of the agreement of sale dated 22.2.1995

without appreciating the entire material evidence available

on record in a proper perspective. He submits that the first

appellate Court erred in holding that the agreement of sale

dated 22.2.1995 alleged to have been executed by the

appellant is valid and the same was executed by the

DR.KMRJ SA Nos.602 & 603 of 2011

defendant in favour of the plaintiff and also erred in

upholding Ex.A1 agreement of sale on the basis of mere

assumptions and presumptions by taking into consideration

the only evidence of the platinic is PW.1 without there being

any evidence in support of the evidence of PW.1 . He further

submits that the first appellate Court failed to see that the

pleadings in the plaint are different from the contents of

Ex.A1 agreement of sale; therefore, the plaintiff deserves no

consideration and should have dismissed the suit. Learned

counsel further submits that the first appellate Court is

contrary to the procedure established since the lower

appellate court allowed the appeal filed by the plaintiff by

attacking the written statement of the defendant in a

negative manner instead of considering the evidence in a

positive and proper perspective and whether the plaintiff has

proved his case or not.

14. Learned counsel for the appellant submits that

the courts below should have seen that the

respondent/plaintiff failed to take any steps to summon the

husband of the defendant who was one of the attestor to the

alleged agreement of sale, and should have drawn adverse

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inference and dismiss the suit and the courts below should

have seen that absolutely there is no evidence to prove the

execution of the agreement of sale dated 22.2.1995 except

IPSO FACTO DIXT of the plaintiff and absolutely there is no

evidence to support the said plea and should have held that

the plaintiff failed to prove the due execution of the

agreement of sale. He further submits that the courts below

should have seen that even assuming per a moment that the

agreement of sale dated 22.2.1995 is true, the

respondent/plaintiff is not entitled for the relief of specific

performance since the plaintiff failed to establish that he is

ready and willing to perform his part of contract since he

has to pay the balance sale consideration Rs.95,000/- on or

before 20.5.1995 as per the terms and conditions of the said

agreement and there is no evidence prove that the plaintiff is

ready and willing to perform his part of contract and also

the courts below erred in observing that the time is not an

essence of contract ignoring the fact that the recitals of the

agreement itself stipulates payment of entire sale

consideration on or before 20.05.1995.

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15. To support his contentions, learned counsel for the

appellant has placed reliance on a catena of decisions of

Hon'ble Supreme Court reported in P. Bhaskara Peddi Raju

vs. K. Venkata Narasayamma (died) Lr. And another1,

wherein it was held in paras 21, 22 and 29 as under:

Thus, the basic principle behind Section 16 (c) of the Specific Performance Act, read with Explanation (ii) is that any person seeking benefit of specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief and the Court is to grant relief on the basis of the conduct of the person seeking relief and that the meaning of such averment of readiness and willingness must be that non-completion of the contract was not the fault on the part of the plaintiffs and that they were disposed and able to complete it had it not been renounced by the defendant.

22. Readiness and willingness are quite distinct and different in the context of Section 16 (c) of the Specific Relief Act. Readiness connotes financial capacity of one who seeks to enforce specific performance. Willingness distinctly refers to his personal or mental inclination to seek performance of the contract. The two words employed by the Statute are not mere surplus age for the other or even words with the connotation that have closely resembling status. The two being distinct, both must be pleaded and proved independently of the other throughout, from the time the contract is entered into and till the suit is filed, and also pending suit till a decree is passed.

29. Thus, in view of the discussion made supra, this Court is of the opinion that plaintiff failed to prove his readiness and willingness to perform his part of the contract and also his possessing sufficient amount to purchase the property.

(ii) In a case of Shenbagam and Ors. V. K.K.

Rathinavel2, wherein it was held that :

This Court in P Meenakshisundaram v. P Vijayakumar12, dealt with a suit for specific performance of a contract for sale of an immovable property, which had a mortgage over it. In evaluating whether the respondent-plaintiff had established that he was „ready and willing‟ to perform the contract, the two-judge Bench, held:

2022 (4) ALT 87 (S.B.)

AIR 2022 Supreme Court 1275

DR.KMRJ SA Nos.602 & 603 of 2011

"8. As regards suit for specific performance, the law is very clear that the plaintiff must plead and prove his readiness and willingness to perform his part of the contract all through i.e. right from the date of the contract till the date of hearing of the suit. If Respondent 1 was well aware about the encumbrance and the parties had chosen that the balance consideration be paid to the appellant before 20-3-2001 so that the sale deed could be registered without any encumbrance, it was for Respondent 1 to have taken appropriate steps in that behalf for completion of transaction. The facts on record disclose that the first step taken by Respondent 1 after the suit agreement was well after four months, when further amount of Rs 2 lakhs was paid on 21-1-2001. Thereafter nothing was done till 20-3-2001 by which the transaction had to be completed. The record is completely silent about any communication sent around 20-3-2001 towards completion of transaction. As a matter of fact the first step thereafter was six months after the deadline, namely, on 22- 9-

2001 when the communication (Ext. A-6) was sent along with amount of Rs 10 lakhs. The written submissions filed on behalf of Respondent 1 also do not indicate any steps till this time so as to say that he was all the while ready and willing to complete the transaction.

24 No issue on readiness and willingness was framed by the trial court. The trial court analysed the notice issued by the appellants and held that the appellants made no demand from the respondent to discharge the mortgage liability. Thus, the appellants‟ plea that the respondent-plaintiff had to pay the loan and only thereafter, could the appellants execute the sale deed was rejected. The court also accepted the respondent‟s argument that the advance PART C amount of Rs. 10,000 was paid to discharge the mortgage. Further, the trial court observed that the documents submitted by the respondent indicate that he had sufficient means to purchase the suit property. The judgment of the trial court was upheld by the first appellate court and, in a second appeal, by the High Court. 25 All the three courts, including the High Court, grossly erred in the manner in which they have adjudicated upon this dispute in a suit for specific performance. In the first instance, the trial court failed to frame an issue on whether the respondent-plaintiff was ready and willing to perform his obligations under the contract and instead assessed whether he is entitled to the relief of specific performance. In doing so, the trial court viewed the legal issue from an incorrect lens. The foundation of a suit for specific performance lies in ascertaining whether the plaintiff has come to the court with clean hands and has, through his conduct, demonstrated that he has always been willing to perform the contract. There is a conspicuous absence in judgment of the trial court of any reference to evidence led by the respondent to indicate his willingness to perform the contract. The trial court merely adverted to "document produced on behalf of the plaintiff" and concluded that he had sufficient means to purchase the suit property. Apart from this observation, the judgment fails to analyse the terms of the agreement, the obligations of the parties and the conduct of the respondent or the appellant.

We shall now advert to the respondent‟s conduct throughout the sale transaction. The respondent has failed to provide any documents or communication which would indicate that he called upon the appellants to perform their obligations or discharge the mortgage within the time period stipulated in the contract. Even after the expiry of the six months, the respondent did not reach out to the appellants. It is only in response to the appellants‟ legal notice that the respondent demanded performance of their obligations.

31 The „readiness‟ of the respondent to perform his obligations refers to whether he was financially capable of paying the balance consideration. Both the trial court and the first appellate court have observed that the respondent was ready to pay the balance consideration as (i) he was paying income tax since 1988 and (ii) his bank passbooks indicate that he had sufficient funds. The payment of income tax by itself does not show that the respondent had sufficient resources to pay for the suit property. Moreover, the bank passbooks submitted in evidence by the respondent were for accounts opened on 11 March 1992 and 22 July 1994, that is, after the

DR.KMRJ SA Nos.602 & 603 of 2011

expiry of the period written in the contract. The first appellate court despite noting this, has chosen to hold that the respondent was PART C ready and willing to perform the agreement. The respondent however did not lead any evidence to indicate that in the year 1990 he had the money to pay the balance consideration. The first appellate court shifted the burden on the appellants to prove that the respondent-plaintiff was incapable of paying the balance consideration. It is an established principle of law that the plaintiff must prove that he is ready and willing to perform the contract. The burden lies on the plaintiff. The respondent has not led any evidence that he was ready or willing to perform his obligations under the agreement.

(iii) In another case reported in Puvvada Chiranjeeva

Rao v. Busi Koteswara Rao3, wherein the Andhra Pradesh

High Court held that :

The first question framed by this Court is referable to Section 16(c ) of the Specific Relief Act (for short "the act"). The provision mandates that a plaintiff in a suit for specific performance must plead and prove that he was and continues to be ready and willing to perform his part of the contract. Through a catena of judgments, the Supreme Court held that the readiness and willingness must be continuous, commencing from the day on which the execution of the sale deed became due. It has already been mentioned that the balance of consideration was required to be paid within two months from the date of agreement. Admittedly, the amount was not paid by that time. The excuse pleaded by the respondent was that the appellant did not get the site measured. This plea is belied from the fact that he paid a sum of Rs. 5,000/- in the year 1990 and Rs. 1,500/- in the year 1994. If the measurement was so essentially a condition and that it cannot be ignored, there was no occasion for the respondent to pay the consideration in different spells, spread over four years.

20. Assuming that the consideration was paid without prejudice to his right to insist on measurement, he cannot still insist on measurement of the site, once the respondent has taken the possession of the property and constructed the house. The possession of the plot was taken in the year 1992 according to the respondent, but in the year 1995 according to the appellant. Either way, once the possession was taken, he ought to have paid the balance of consideration and insisted on execution of the sale deed. The alleged failure on the part of the appellant to measure the suit site was pleaded as an excuse for not complying with Section 16(c) of the Act. Therefore, the respondent, the purchaser under agreement of sale who took possession of the property, was disentitled from taking the plea that the appellant did not perform his part of the contract, viz., to get the site measured.

16. Per contra, learned counsel for the respondent while

reiterating the contents made in the plaint and denied all

AIR 2012 Andhra Pradesh 17

DR.KMRJ SA Nos.602 & 603 of 2011

the allegations made in the appeals. He submits that the

first appellate Court has rightly concluded and allowed the

appeals with proper and perspective manner and there is no

cause of action to allow these appeals and hence prayed to

dismiss the same in limni.

17. To support his contentions, learned counsel for the

respondent has placed reliance on a decision of Hon'ble

Supreme Court reported in P.S. Ranakrishna Reddy versus

M.K. Bhagyalakshmi and another4 , wherein the Apex

Court held that :

The submission of Mr. Chandrashekhar that in view of the fact that parties had agreed that in the event of breach on the part of the appellant, the respondent would be entitled to claim damages for a sum of Rs. 10,000/- only and, thus, the said agreement for sale was not meant to be acted upon cannot be accepted. If the said contention is accepted, the damages quantified in the event of any breach on the part of Respondent No. 1 cannot be explained. It is clear that in the event of commission of any breach on the part of respondent, the appellant was entitled to forfeit the entire amount of advance. The very fact that the parties intentionally incorporated such default clause clearly goes to show that they intended to lay down their rights and obligations under the contract explicitly. They, therefore, knew the terms thereof. They understood the same. There is no uncertainty or vagueness therein.

18. On hearing the submissions of both the counsels

and on perusing the entire material available on record, this

Court observed that, on verifying the written statement of

the defendant/appellant that her case with regard to the

(2007) 19 Supreme Court Cases 231

DR.KMRJ SA Nos.602 & 603 of 2011

circumstances under which Ex.A1 was brought into

existence particularly in view of Exs.A2, A3, A7 and B.2

appears to be quite pale and the same does not stand to a

strict scrutiny of law. Further, the defendant/appellant has

not whispered about her case as focused at para-4 of the

written statement in her Ex.A5 reply notice got issued by

her for the original of Ex.A4 reply notice of plaintiff. Except

marking a mention at para-2 of Ex.A5 reply notice that the

plaintiff/respondent has created an agreement of sale to

harass her, her family and to get wrongful gain, the

defendant/appellant has not whispered in it as to the

circumstances under which Ex.A1 was brought into

existence as mentioned at para-4 of her written statement.

19. As seen from the impugned order at para-19, it is

observed that by virtue of evidence of PW.1 documents

marked under Exs.A1, A3, A6, A7 and B2 and the

surrounding circumstances stood in favour of the plaintiff

and against the defendant, it can be held that Ex.A1

agreement of sale is true and that it is supported by

consideration. Admittedly, the defendant/appellant wanted

to impress upon the Court that the time is stipulated as an

DR.KMRJ SA Nos.602 & 603 of 2011

essence of contract and that the plaintiff is not entitled to

have the relief of specific performance as he failed to fulfill

his part of contract by 20.5.1995. but the controversy as to

whether the time stipulated as an essence of contract in an

agreement of sale has to be gathered from the conduct and

intention of the parties and not from the recitals mentioned

therein. A perusal of Ex.A1 shows that duty casts upon the

defendant also that she has to perform her part of contract

by clearing her debt due to Union Bank of India, Unguru

and taking her original title deed with respect to schedule

property back from such bank. In that view of the matter, it

cannot b held that time is stipulated as an essence of

contract.

20. It is further observed that the trial Court

accepting the case of plaintiff that Ex.A1 agreement of sale

was executed by the defendant in favour of plaintiff,

ultimately negative the primary relief of such specific

performance of suit agreement of sale erroneously

warranting the interference of the Court.

21. The other controversy between the parties is that

whether time is stipulated as an essence of contract under

DR.KMRJ SA Nos.602 & 603 of 2011

Ex.A1 or not? No doubt, as per Ex.A1 the plaintiff has to

deposit Rs.10,000/- on 22.2.1995 and the balance amount

of Rs.85,000/- by 20.5.1995. whereas, as per Ex.A2, A3, A7

and B2, the plaintiff deposited Rs.10,000/- on 22.2.1995

and Rs.85,000/- on 23.5.1995.

22. Admittedly, the plaintiff did not deposit the

remaining sale consideration in the Bank in time. He

deposited the said Rs.85,000/- under Ex.A3 on 23.5.1995

though he agreed to deposit balance of sale consideration of

Rs.95,000/- on or before 30.02.1995

23. The discretion to direct specific performance of an

agreement and that too after elapse of a long period of time,

undoubtedly, has to be exercised on sound, reasonable,

rational and acceptable principles. The parameters for the

exercise of discretion vested by Section 20 of the Specific

Relief Act, 1963 cannot be entrapped within any precise

expression of language and the contours thereof will always

depend on the facts and circumstances of each case. The

ultimate guiding test would be the principles of fairness and

reasonableness as may be dictated by the peculiar facts of

DR.KMRJ SA Nos.602 & 603 of 2011

any given case, which features the experienced judicial mind

can perceive without any real difficulty. It must however be

emphasised that efflux of time and escalation of price of

property, by itself, cannot be a valid ground to deny the

relief of specific performance. [...]

24. The twin inhibiting factors identified above if are to

be read as a bar to the grant of a decree of specific

performance would amount to penalising the plaintiffs for no

fault on their part; to deny them the real fruits of a

protracted litigation wherein the issues arising are being

answered in their favour." (emphasis supplied) In directing

specific performance of the agreement, this Court in Satya

Jain (supra) held that sale deed must be executed for the

current market price of the suit property.

25. It is true that grant of decree of specific

performance lies in the discretion of the court and it is also

well settled that it is not always necessary to grant specific

performance simply for the reason that it is legal to do so. It

is further well settled that the court in its discretion can

impose any reasonable condition including payment of an

DR.KMRJ SA Nos.602 & 603 of 2011

additional amount by one party to the other while granting

or refusing decree of specific performance. Whether the

purchaser shall be directed to pay an additional amount to

the seller or converse would depend upon the facts and

circumstances of a case. Ordinarily, the plaintiff is not to be

denied the relief of specific performance only on account of

the phenomenal increase of price during the pendency of

litigation. That may be, in a given case, one of the

considerations besides many others to be taken into

consideration for refusing the decree of specific

performance.

26. In the case on hand, it is observed that the

plaintiff gave notice to the Bank on 18.5.1998 and came to

know that the amounts deposited into Bank transferred to

the loan account of the defendant/appellant on 24.7.1995,

which shows that the plaintiff has got knowledge, however

he waited more than 3 years to issue notice to the defendant

and later filed suit after prescribed period of limitation and

the same is barred by limitation as per Article 54 of the

Limitation Act.

DR.KMRJ SA Nos.602 & 603 of 2011

27. In view of the foregoing discussion, these Second

Appeals are allowed and the common judgment and decrees

passed by the first appellate Court in the respective appeals

are set aside. Consequently, the judgment and decree

passed by the trial Court in O.S.No.149 of 2002 is

sustained. There shall be no order as to costs

28. As a sequel, miscellaneous applications pending,

if any, shall also stand closed.

                            ___________________________________
                            DR.JUSTICE K. MANMADHA RAO
Date:     06-10-2023.

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                                                     DR.KMRJ
                                       SA Nos.602 & 603 of 2011


      THE HON'BLE DR. JUSTICE K. MANMADHA RAO




       SECOND APPEAL Nos.602 & 603 of 2011


                 Date :   6 .10.2023




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