Radheshyam S/O Babulal Sharma vs Lalchand S/O Vishweshwardas ...
2005 Latest Caselaw 730 Bom

JUDGMENT

S.T. Kharche, J.

1. Invoking the jurisdiction of this Court under Section 100 of the Code of Civil Procedure, this appeal takes an exception to the judgment and decree dated 7-3-1989 passed by the learned Additional District Judge in regular Civil Appeal No. 321/1984, whereby the appeal has been dismissed and judgment and decree passed on 23-11-1983 by the learned Joint Civil Judge, Junior Division in Regular Civil Suit No. 1644/1982 has been confirmed by which the defendant No. 1 was directed to refund the earnest money of Rs. 6,000/- together with interest @ Rs. 6% per annum amounting to Rs. 900/- to the plaintiff with future interest at the same rate till realisation refusing to grant specific performance of the contract in favour of the appellant-plaintiff.

2. The facts relevant for our purpose can be stated as under : Defendant No. 1 is the owner of the house property. He had entered into agreement of sale with the plaintiff on 3-4-1980 for consideration of Rs. 23,000/-, on receiving an earnest amount of Rs. 6,000/-. The plaintiff had agreed to obtain permission of the competent authority for the purpose of sale of the house. There was a tenant inducted in the suit premises, and therefore, the plaintiff had also agreed that he would be responsible for getting the suit premises vacated from the tenant. Defendant No. 1 was called upon to execute the sale deed on receiving balance consideration of Rs. 17,000/- by the notice dated 5-4-1982 to which he had given reply on 20-4-1982 and declined to execute the sale deed. However, defendant No. 1 sold the suit property to defendant No. 2 for the consideration of Rs. 27,000/- on 23-4-1982 and has committed breach of the agreement of sale, therefore, the plaintiff was constrained to file the suit for specific performance.

3. Defendant No. 1 combated the suit claim by filing his written statement and contended that the plaintiff was not ready and willing to perform his part of the contract and since there was a tenant in the suit premises, he did not feel it safe to purchase the suit house by investing the amount of Rs. 23,000/- in all, and therefore, he sold it to defendant No. 2 on 23-4-1982. The stand taken by defendant No. 2 is that he is bona fide purchaser for value without notice.

4. The learned trial Judge, on appreciation of the evidence has refused to grant the relief of specific performance in favour of the plaintiff but directed defendant No. 1 to refund the earnest amount of Rs. 6,000/- together with interest @ Rs. 6% per annum. The plaintiff, being aggrieved by this judgment and decree passed by the trial Court, carried appeal to the District Court. The learned Additional District Judge on hearing the parties and on consideration of the facts and law has held that the plaintiff is not entitled to get the relief of specific performance of contract as he was not ready and willing to perform his part of the contract and consistent with these findings, he dismissed the appeal. This judgment and decree passed by the Appellate Court is under challenge in this appeal.

5. Mr. Chhabra, learned counsel for the plaintiff contended that time was not essence of the contract and it is defendant No. 1 who has committed the breach of the agreement of sale because in spite of notice dated 5-4-1982 served on him, he declined to execute the sale deed and moreover, he sold the suit house to defendant No. 2 on 23-4-1982. He contended that the plaintiff was ever ready and willing to perform his part of the contract and was ready to pay balance consideration of Rs. 17,000/-, but defendant No. 1 sold the suit house to defendant No. 2 intentionally and committed breach of the contract. He further contended that the Courts below ought to have awarded the compensation in view of the provisions of Section 73 of the Indian Contract Act, 1872 because defendant No. 1 has been benefited by Rs. 4,000/- by selling the suit house subsequently to defendant No. 2 on 23-4-1982. He further contended that the substantial questions of law arises in this appeal are; whether the time was essence of the contract, whether the plaintiff was willing to perform his part of the contract and whether compensation aught to have been awarded in accordance with Section 73 of the Act in case of refusal of the relief of specific performance in favour of the plaintiff?

6. Mrs. Dewani, learned counsel appearing for respondent No. 2 contended that no substantial question of law arises in this appeal inasmuch as the Appellate Court has recorded findings of fact that the plaintiff was not ready and willing to perform his part of the contract. She contended that though the time was not made essence of the contract and since respondent No. 2 is a bona fide purchaser for value without notice, no interference with the findings of fact recorded by the Appellate Court is warranted and the appeal may kindly be dismissed.

7. This Court has given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. It is not disputed that defendant No. 1 is the owner of the suit house and he had agreed to sell it to the plaintiff on 3-4-1980 for total consideration of Rs. 23,000/- on receiving the earnest amount of Rs. 6,000/-. There is also no dispute that the notice dated 5-4-1982 was served on defendants No. 1 calling upon him to execute the sale deed, but he sold the suit house to defendant No. 2 on 23-4-1982 for consideration of Rs. 27,000/-.

8. Perusal of the agreement of sale dated 3-4-1980 (Exh. 25) would reveal that time has not been made essence of the contract and it was agreed by the plaintiff that he would obtain permission of the competent authority within one month and thereafter defendant No. 1 would execute the sale deed. The plaintiff has also agreed that he himself would be responsible for getting the suit house vacated from the tenant. Similarly, perusal of the notice (Exh. 26) would reveal that the time has not been made essence of the contract. It is settled law that generally in case of immovable property, time is not always the essence of the contract and it is for the parties to make the time essence of the contract by issuing notices to each other, however, it all depends upon the facts and circumstances of each case. In the present case neither the plaintiff nor the defendant had made the time as an essence of the contract.

9. However, simply because the time was not made essence of the contract, it did not follow that the plaintiff was ever ready and willing to perform his part of contract. The Appellate Court rightly observed that; though the agreement of sale was entered into on 3-4-1980, the plaintiff did not take any steps to get the sale deed executed till 5-4-1982 on which date he issued the notice. His silence for two years after the date of execution of the agreement of sale has been considered by the Appellate Court together with the oral evidence adduced and recorded findings that the plaintiff was not ready and willing to perform his part of contract especially when he had agreed in the agreement itself that he would obtain permission of the competent authority and after he came to know that no such permission was necessary, he did not call upon defendant No. 1 immediately to execute the sale deed showing his readiness and willingness to perform his part of contract.

10. However, it would clearly reveal that defendant No. 2 is bona fide purchaser for value without notice of the earlier transaction. It is settled law that the agreement of sale does not convey any title nor any mutation entry was recorded in the City Survey, therefore, defendant No. 2 was not aware of the aforesaid agreement of sale and hence, the Appellate Court was perfectly justified in finding that the defendant No. 2 is a bona fide purchaser for value without notice.

11. On close scrutiny, it would reveal that in fact even Section 73 of the Indian Contract Act is not applicable to the facts and circumstance of the present case. The plaintiff neither pleaded nor adduced any evidence to show that he had claimed compensation on account of breach of contract on the basis of these provisions of law and therefore, he cannot be allowed for the first time in the second appeal to raise the contention that the Appellate Court ought to have granted compensation to the plaintiff.

12. The learned counsel for respondent No. 2 has rightly relied on the decision of the Apex Court in the case of Santosh Hazari v. Purushottam Tiwari, , wherein it has been observed in para 14 as under :

"A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be "substantial" a question of law must be debatable, not previously settled by law of the land of a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law "involving in the case" there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by Court of facts and it must be necessary to decide that question of law for just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis."

13. Once the finding has been recorded by the Appellate Court that the plaintiff was not ready and willing to perform his part of contract, it is not possible to accept the submission of the learned counsel for the plaintiff that it is the defendant respondent who has committed the breach of the contract and since he has been benefited by the subsequent transaction by the amount of Rs. 4,000/-, he should be called upon to pay that much amount also to the plaintiff by way of compensation in view of the provisions of Section 73 of the Indian Contract Act. Consequently, this Court do not find any merit in this appeal and is of the considered opinion that no substantial question of law is involved in this appeal and the same stands dismissed with cost throughout.