Andhra Pradesh High Court - Amravati

Vonteddu Chinna Venkata Krishna Reddy vs Belle Lakshmanna on 24 June, 2024

Author: U. Durga Prasad Rao

Bench: U.Durga Prasad Rao

APHC010367962018
                   IN THE HIGH COURT OF ANDHRA PRADESH
                                 AT AMARAVATI             [3456]
                          (Special Original Jurisdiction)

            MONDAY, THE TWENTY FOURTH DAY OF JUNE
               TWO THOUSAND AND TWENTY FOUR

                                   PRESENT

     THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO

    THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA

                       FIRST APPEAL NO: 2040/2018

Between:

Vonteddu Chinna Venkata Krishna Reddy                         ...APPELLANT

                                      AND

Belle Lakshmanna and Others                               ...RESPONDENT(S)

Counsel for the Appellant:

   1. N PREMRAJ

Counsel for the Respondent(S):

       CHALLA GUNARANJAN

This Court made the following

JUDGMENT:

(Per Hon'ble Sri Justice U. Durga Prasad Rao)

Aggrieved by the judgment dated 18.01.2018 in O.S.No.36/2009 passed by learned District Judge, Anantapuram dismissing the suit for ::2::

specific performance of agreement to sell dated 01.02.2009, the 1st plaintiff out of 4 plaintiffs filed the instant appeal.

2. The factual matrix of the case is thus:

(a) Defendants are the absolute owners of plaint schedule land.

The plaintiffs and defendants entered into Ex.A1 - agreement to sell dated 01.02.2009 whereunder the plaintiffs agreed to purchase the plaint schedule land for Rs.80 lakhs from the defendants and paid an advance of Rs.10 lakhs. It was agreed that they should pay the balance sale consideration of Rs.70 lakhs within five months by 01.07.2009. Upon which the defendants agreed to execute the registered sale deed in their favour.

(b) It is further case of the plaintiffs that the 1st plaintiff will have 50% of the share and remaining plaintiffs 2 to 4 will together have remaining 50% of the share in the plaint schedule land on purchase.

(c) It is the case of the plaintiffs that they were ready and willing to perform their part of the contract. However, they came to know in respect of suit schedule property there is a Second Appeal No.335 of 2005 in C.M.A.No.694 of 2005 was pending before common High Court of Andhra Pradesh wherein interim status quo orders were passed and pending against the defendants herein. The said fact was not disclosed by the defendants. In that view, during the pendency of the said appeal the said property shall not be dealt with or alienate to anybody. Hence the plaintiffs brought the said fact before the defendants however there was no reply from them. The plaintiffs conducted number of mediations, ::3::

negotiations and panchayats before the defendants. However, their efforts proved futile. Hence the suit for specific performance.

3. The 3rd defendant filed written statement opposing the suit and defendants 1, 2, 5 to 9 adopted the same. It is contended that the plaintiffs were never ready and willing to pay the balance sale consideration to obtain registration. The allegation that there was a division of the suit schedule property among the plaintiffs was not known to the defendants and such a condition was not mentioned in Ex.A1- agreement to sell. Even the advance amount was not paid in full but only Rs.9 lakhs was paid in cash and for the balance of Rs.1 lakh cheuqe bearing No.005876515013002 was issued and the same was dishonored for lack of funds in the account of plaintiffs. So far as the pendency of the appeal is concerned, plaintiffs were well aware of the pendency of the litigation regarding the suit schedule property and that cannot be a ground to question the defendants. Further contention of the plaintiffs that despite the notices the defendants were not willing to receive the balance sale consideration is false. Upon receiving notice dated 04.07.2009 issued by the plaintiffs on 09.07.2009 the defendants gave a reply notice dated 13.07.2009 whereunder the defendants intimated plaintiffs to pay the balance of sale consideration and get registered sale deed on 27.07.2009 but the plaintiffs failed to do so which establishes that the plaintiffs were not ready and willing to perform their part of the contract. The defendants contended that the suit is not maintainable as the plaintiffs themselves willfully avoided the performance of the contract.

::4::

4. The 4th defendant filed written statement contending that the plaintiffs were not ready and perform their part of contract and further the 4th defendant is entitled to 0.42 cents of the suit schedule property and he is willing to sell the same by receiving his share of the consideration.

5. A perusal of the impugned judgment would show that so far as the pendency of the litigation before the High Court and the plaintiffs' allegation that the defendants did not inform the said fact to them is concerned, the observation of the trial Court is somewhat lacking clarity. It observed as follows:

"13.xxxxxx. In the circumstances when the plaintiff No.1 admits that one can file an appeal before the Hon'ble High Court the plaintiffs could have with due diligence found out about the pendency of the appeal before the Hon'ble High Court. Moreover as seen from the record the appeal was filed in the year 2005. Therefore, it has to be held that the defendants had knowledge of the pendency of appeal but did not inform the same to the plaintiffs."

6. From the above observation, it appears the trial Court held that by applying the due diligence the plaintiffs could have found out about the pendency of the appeal before the Hon'ble High Court and as the appeal was filed in the year 2005 and agreement to sell was entered in the year 2009, the plaintiffs cannot plead that they were not informed by the defendants.

7. Nextly, regarding the readiness and willingness of plaintiffs to 7obtain registered sale deed is concerned, the trial court observed that Ex.A8 - agreement dt: 03.04.2009 was only internal agreement among the plaintiffs to share the performance of obligation among themselves ::5::

and that is not binding on the defendants as such obligation was not mentioned in Ex.A1. The defendants never agreed for the performance of the contract by the plaintiffs individually. The trial Court further observed that the 1st plaintiff himself filed I.A.No.1456/2015 seeking permission to pay only part of the sale consideration which was not accepted by the Court and the application was dismissed with a direction that if the 1st plaintiff was willing, he can deposit his part of the sale consideration to show his bonafides. The 1st plaintiff has not done the same. The trial Court further observed that even at the time of examination of PW1, he only stated that he would pay his share of the sale consideration as per Ex.A8. Considering all these facts, the trial Court observed that the plaintiffs are not ready and willing to perform their part of their contract. Even other plaintiffs also have not stated that they were ready and willing to perform their part of their agreement contract. The trial Court accordingly dismissed the suit.

Hence the appeal by the 1st plaintiff.

8. The parties in this appeal are referred as they were arrayed in the suit.

9. Heard Sri N. Premraj, learned counsel for the appellant and Sri Challa Gunaranjan, learned counsel for respondents.

10. While severely fulminating the judgment, learned counsel for appellant Sri N. Premraj would argue that the trial Court erred in dismissing the suit on the observation that the plaintiffs were not ready and willing to perform their part of the contract. He would argue that the ::6::

trial Court has not comprehended the facts and evidence in right perspective. He would submit that by the date of Ex.A1-agreement to sell the litigation in respect of the plaint schedule property was pending in the form of Second Appeal No.335 of 2005 in C.M.A.No.694 of 2005 wherein the present defendants were parties and the High Court passed status quo order in respect of the property. He would submit that even now also the said litigation is pending. In those circumstances, though the plaintiffs were ever ready to obtain the sale deed, they could not proceed further and they contacted the defendants and requested them to resolve the issue. The defendants protracted the matter and did not resolve the issue and therefore ultimately the plaintiffs filed the suit for specific performance. In that process some time was elapsed. However, that cannot be treated as plaintiffs' unreadiness or unwillingness to obtain registered sale deed. He placed reliance on S. Mohan v. Dr. A.S. Anand1 to submit that pending status quo order, meddling with the property in any manner would amount to contempt and therefore the plaintiffs after knowing about the status quo order passed with regard to subject property, have not readily ventured to obtain sale deed but only consulted the defendants to resolve the issue and due to their non-cooperation, time was elapsed. He thus prayed to allow the appeal.

11. Per contra, Sri Challa Gunaranjan, learned counsel for respondents would argue that the pendency of the litigation before the High Court in respect of schedule property was very much known to the

AIR 1994 SC 1837 ::7::

plaintiffs even by the date of Ex.A1-agreement to sell and that was only a ruse to protract the matter and for non-showing the readiness and willingness to perform their part of the contract by the plaintiffs. Learned counsel argued that the status quo order will not prevent the parties to enter into a sale transaction subject to outcome of the litigation in the High Court as is envisaged under the doctrine of lis pendens. Therefore, such act of the parties to enter into a sale transaction subject to the result of pending litigation will not attract the contempt and the plaintiffs were also fully aware of this fact. That was the reason why the plaintiffs issued notice for specific performance and also filed the suit. However, learned counsel emphasized, the fundamental defect in plaintiffs' case is that they were never ready with the balance sale consideration. In fact, the defendants issued reply notice dated 13.07.2009 calling upon the plaintiffs to pay the balance of sale consideration and get registered sale deed on 27.07.2009 but the plaintiffs failed to do so which would amply demonstrate that the plaintiffs were never ready and willing to perform their part of the contract. On the other hand, the plaintiffs have come up with a strange plea that under Ex.A8 they themselves made an arrangement among themselves that 1st plaintiff should bear 50% of the sale consideration and remaining plaintiffs should bear the remaining 50% and also have the right over the plaint schedule property in that ratio. However, such an internal arrangement under Ex.A8 has nothing to do with the defendants, for, the said alleged arrangement was neither mentioned in the Ex.A1 nor the defendants were made as parties to the said agreement. However, on the strength of the said alleged agreement, ::8::

the 1st plaintiff claimed that he would deposit only 50% of the sale amount and the defendants should execute a sale deed in his favour for the proportionate extent of the plaint schedule property. The other plaintiffs did not come forward. Learned counsel would also submit that due to the lackadaisical attitude of the plaintiffs the suit was once dismissed for default and then restored at the instance of the 1st plaintiff. All these would show that the plaintiffs never evinced interest in purchasing the plaint schedule property by paying the sale consideration within the stipulated time or thereafter. The trial Court therefore rightly held that the plaintiffs who failed to show their readiness and willing in true spirit do not deserve the equitable relief of specific performance. He placed reliance on U.N. Krishnamurthy v. A.M. Krishnamurthy2 to contend that readiness and willingness is not an empty rhetoric but the party should show the sufficient funds in the hand. He thus prayed to dismiss the appeal.

The points for consideration are:

1. Whether the pendency of the litigation before the High Court was not made known to the plaintiffs and that was the reason why the plaintiffs could not seek for specific performance ?

2. Whether the plaintiffs were ready and willing to perform their part of the contract during the relevant period and are entitled to equitable relief of specific performance of the contract under Ex.A1 ?

3. To what relief ?

2022 SCC OnLine SC 840 ::9::

12. POINT No.1: It is needless to emphasize that from the respective pleadings it is admitted fact that even by the date of entering into Ex.A1- agreement to sell, Second Appeal No.335 of 2005 in C.M.A.No.694 of 2005 were pending in the High Court wherein the defendants herein were parties. It is also not in dispute that status quo order was passed by the common High Court in respect of the plaint schedule property. However, the point is in what manner both the parties responded to the pending litigation. As rightly submitted by Sri Challa Gunaranjan, learned counsel for respondents, mere pendency of a litigation or status quo order will not disentitle the parties to effect the alienation subject to the outcome of the said litigation unless the order specifically directs the parties not to make any alienation pending the litigation. In such instances the doctrine of lis pendens as envisaged in Section 52 of the Transfer of the Property Act applies. It appears the plaintiffs came to know about the said legal position and that was why, their pleadings in the plaint would show that even after knowing about the status quo orders, they consulted the defendants to settle the issue. According to the pleadings, when the defendants did not settle the matter, they filed the suit for specific performance. It should be noted that if really the plaintiffs were afraid of the status quo order and not aware of the legal position relating to the effect of alienation lis pendens, they would have filed a suit for refund of their advance amount but not for the specific performance. Since the suit filed is one for specific performance, it can be understood that the plaintiffs were not serious about the pending litigation and status quo order. So that cannot be a ground for the ::10::

plaintiffs to procrastinate the matter without seeking for specific performance within the reasonable time.

13. POINT Nos.2&3: Then the readiness and willingness of the plaintiffs is concerned, their conduct manifest that they were never ready. The impugned judgment would show, among themselves the plaintiffs entered into an agreement Ex.A8 whereunder the 1st plaintiff was to bear 50% of the liability and remaining plaintiffs should bear the remaining 50% of liability and they should get the plaint schedule property in such moieties. As rightly observed by the trial Court this agreement has nothing to do with the defendants as they were not parties to the same nor it has any effect on Ex.A1-agreement to sell because the terms of Ex.A8 were not incorporated in Ex.A1. Therefore, neither the 1st plaintiff nor other plaintiffs can claim for specific performance on the plea that particular plaintiff will pay his share of the amount so as to obtain a sale deed in his favour to that extent of the property. That is not the purport of Ex.A1. On the other hand, it is a collective responsibility of all the plaintiffs to pay the balance of the sale consideration and obtain a regular registered sale deed from the defendants. That was not manifestly done by the plaintiffs. In fact, the 1st plaintiff filed I.A.No.1456/2015 seeking permission to pay only his part of the sale consideration which was rightly rejected by the trial Court.

14. So, the conduct of the plaintiffs clearly manifested that they were not collectively showed their readiness and willingness to perform their part of the contract by paying the balance of sale consideration due to ::11::

the defendants. The decree of specific performance of a contract is an equitable relief and hence a party who seeks equity must exhibit equity by showing readiness and willingness. That has not been done. The decision relied upon by the appellant is of no avail. In that case the Hon'ble Apex Court was considering the question as to during the pendency of the status quo order in respect of the subject Church property, whether one of the parties is entitled to sub-lease a portion of the property, particularly when his tenancy itself was in dispute. The Apex Court held that the act of sub-lease is a violation of the status quo order. In the instant case as already discussed supra, the status quo order in respect of plaint schedule property could not be a hurdle for the plaintiffs as they could have entered into a sale transaction subject to the outcome of the pending litigation. As already discussed supra, in spite of pending litigation they filed suit for specific performance which implies that they are aware of this fact. The reason for their not getting ready to obtain sale deed appears to be not because of the pendency of the litigation but on account of their lack of funds in their hands. In U.N. Krishnamurthy's case (Supra 2) cited by learned counsel for respondents, with regard to the manifestation of readiness and willingness the Apex Court noted thus:

"25.To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to ::12::

specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money"

15. In the instant case that is sorely missing with the plaintiffs which is discernible from their conduct. The appeal merits no consideration. Accordingly, the appeal is dismissed by confirming the judgment of the trial Court. No costs.

As a sequel, interlocutory applications pending if any, shall stand closed.

_______________________ U.DURGA PRASAD RAO, J

________________________ KIRANMAYEE MANDAVA, J 24.06.2024 nnn/krk ::13::