Sau. Chandraprabha Prabhakar ... vs Maruti Alias Marutrao Shivram ...
2008 Latest Caselaw 83 Bom

                                    1




                                                                                 
                                                         
            IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                    CIVIL APPELLATE JURISDICTION




                                                        
                  SECONd APPEAL NO. 706        OF    1991




                                          
    Sau. Chandraprabha Prabhakar Ghorpade .. Appellant
                              ig          (Orig. Defendant No.2)

                    Versus
                            
    1.   Maruti alias Marutrao Shivram Patil,

    2.   Sadashiv Balvant Puranik.                .. Respondents

                                         (No.1 - original plaintiff
           


                                          No.2 - original Deft.No.1)
        



    Mr. Madhav Jamdar, Advocate, for the appellant.





    Mr. V.S.Gokhale, Advocate, for respondent No.1.

                             CORAM:      J.H.BHATIA,J.

                              DATE:      28th August, 2008.





                             JUDGMENT

1. This Second Appeal is filed by the original

defendant No.2 challenging the concurrent findings of

both the Courts below whereby the plaintiff/respodnent

No.1 was granted a decree for specific performance of

the contract for sale of the suit property.

2. To state in brief, the plaintiff/respondent No.1

filed Regular Civil Suit No.188 of 1981 for specific

performance of the contract of sale. According to him,

the suit house described in the plaint was in his

possession as a tenant of the defendant No.1 since 1968.

    Admittedly,        the   defendant No.1, who is the          respondent

    No.2    before
                                 
                        this Court, had filed Suit No.265 of                1973

    for    eviction and possession against the plaintiff.                      In
                                
    that    suit, a compromise decree was passed on                12.7.1976

    and    as    per the compromise, the plaintiff was               to     hand

    over    possession of the suit house to the defendant No.1
            


    -    landlord by 31.5.1981.        It was also agreed that              from
         



    the    date      of compromise, the monthly rent of the               house

    would    be      Rs.50/-   per month.     The plaintiff        had      paid





    amount      of    Rs.2750/- to the defendant No.1          as      advance

    rent    on    12.7.1976      itself    and   had   obtained        receipt

Exhibit 76. According to the plaintiff, on 26.12.1976,

an agreement took place between himself and the

defendant No.1 whereby the defendant n.1 agreed to sell

the suit house to the plaintiff for consideration of

Rs.10,000/-. Out of this, he had paid an amount of

Rs.6750/- inclusive of the amount of Rs.2750/- already

paid on 12.7.1976, towards part payment of consideration

amount. The balance amount of Rs.3250/- was to be paid

at the time of execution of sale deed on or before

31.5.1981. Prior to the execution of sale deed, the

plaintiff issued a notice dated 30.3.1981 to the

defendant No.1 and called upon the defendant No.1 to

execute the sale deed as per the terms of the contract.

That notice was received by him on 1.4.1981, but there

was no reply nor he executed the sale deed as per the

terms of the contract. On 8.7.1981, the plaintiff filed

Regular Civil Suit No.188 of 1981 for specific

performance of the contract against defendant No.1.

3. During the pendency of the suit, it was revealed

that defendant No.1 had executed a sale deed in favour

of the defendant No.2 on 4.5.1977 for certain property,

including the suit house. Therefore, the plaintiff

impleaded the defendant No.2 in the suit.

4. The defendant No.1 contested the suit by filing

written statement. According to him, he had approached

the plaintiff for a loan because he was in urgent need

and accordingly, the plaintiff had advanced an amount of

Rs.4,000/- to him as a loan. However, the plaintiff had

insisted to execute an agreement for sale. According to

him, the said agreement for sale was not to be acted

upon. It was not a genuine transaction. He pleaded

that the real transaction was of loan. The value of the

suit house was much more and he could not have agreed to

sell the suit property for consideration of Rs.10,000/-

only. The defendant No.2 also contested the suit.

According to her, she was a bonafide purchaser of the

property for value without notice of any right of the

plaintiff or about the said agreement. According to

her, under the said sale deed dated 4.5.1977, she had

also purchased the rights of the defendant No.1 to take

possession of the suit house from the plaintiff in

execution of the decree in Suit No.265 of 1973.

    According      to      her,
                                   
                                   when she applied to         the      Executing

    Court    for execution of that decree, a notice was issued
                                  
    to    the    plaintiff        and then she came to know             that       the

    plaintiff      was also claiming specific performance of the

    contract      which      was    allegedly     entered        into       between
            


    himself      and    the defendant No.1.        It is contended               that
         



    she    had    already got her entered in the City Survey                        as

    owner    of the property and, therefore, the plaintiff was





    not    entitled to get decree for specific performance                          of

    the contract.

5. After hearing the evidence led by all the parties,

the trial court rejected the contention of the defendant

No.1 that it was a loan transaction and also rejected

the contention of the defendant No.2 that she is a

bonafide purchaser for value without notice of the

transaction between the plaintiff and the defendant

No.1. The trial Court held that the defendant No.1 had

agreed to sell the suit house to the plaintiff for

consideration of Rs.10,000/- and had received the amount

of Rs.6750/- towards earnest money. However, the trial

Court came to conclusion that the plaintiff had not

proved that he was ready and willing to perform his part

of the contract and in view of this finding, the suit

for specific performance of the contract was dismissed,

but alternative relief for refund of the amount with

interest was granted.

6. Being not satisfied with the decree passed in his

favour, the plaintiff preferred Regular Civil Appeal

No.521 of 1987. The plaintiff was allowed by lower

appellate Court to make an amendment in the plaint and

by making an amendment in the plaint, he pleaded that he

was always ready and willing to perform his part of the

contract.

7. After hearing the learned Counsel for all the

parties, the appellate Court also came to conclusion

that the defendant NO.1 had agreed to sell the suit

house for consideration of Rs.10,000/- on 26.12.1976 and

on the same day, he had also received Rs.6750/- towards

earnest money. The contention of the defendant No.1

that it was a loan transaction was rejected. The

appellate Court also came to conclusion that the

plaintiff had proved that he was ready and willing to

perform his part of the contract. The contention of the

defendant No.2 was also rejected. As a result, the

appellate Court allowed the appeal and passed the decree

for specific performance of the contract in favour of

the plaintiff. Being aggrieved by the said decree, only

defendant No.2 has preferred the present Appeal. No

further appeal is filed by defendnat No.1.

8. The Second Appeal was admitted on grounds Nos. 1

to 3.

The said grounds read as follows :-

"1. Whether the specific performance can be

granted in the absence of averment and evidence of

readiness and willingness on the part of the

Plaintiff from the alleged date of agreement of

sale dated 26th December 1976 till the passing of

the decree.

2. Whether the suit for specific performance was

maintainable in the absence of compliance with

section 16(c) of the Specific Relief Act, 1963.

3. Whether the lower Appellate Court was

justified in granting the amendment of the plaint

in appeal as regards the Plaintiff's alleged

readiness and willingness to perform his part of

the contract specially when on the date of the

application for amendment of the plaint a fresh

suit was barred by limitation."

9. Heard the learned Counsel for the parties and

perused the pleadings, oral evidence and the documentary

evidence placed before the Court by the parties.

10. Section 16 of the Specific Relief Act reads as

under :-

S.16: "Personal bars to relief : Specific

performance of a contract cannot be enforced in

favour of a person -

            


          (a)     who    would      not     be   entitled        to       recover
         



          compensation for its breach;                or





          (b)    who    has become incapable of            performing,            or

          violates      any essential term of, the contract that

          on    his    part remains to be performed, or acts                      in





          fraud    of    the      contract,      or    wilfully       acts        at

          variance      with, or in subversion of, the                  relation

          intended to be established by the contract;                        or



          (c)    who    fails      to   aver and prove         that       he     has

          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 terms                 the




                                                                               
            performance        of which has been prevented or waived




                                                       
            by the defendant.

Explanation - For the purposes of clause (c), -

                                                      
            (i)    where    a    contract involves    the    payment         of




                                           
            money,    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;
                               
            (ii)    the    plaintiff must aver performance of,               or

readiness and willingness to perform, the contract

according to its true construction."

Clauses (a) and (b) are not relevant for the purpose of

this Appeal. From the language of Section 16(c), it is

clear that it is mandatory for the plaintiff to aver and

prove that he has performed or has always been ready and

willing to perform his part of the contract and if this

part of the contract involves payment of money, it is

not necessary for the plaintiff to actually tender to

the defendant or to deposit in the Court any money

except when so directed by the Court. The averment

about performance or about readiness and willingness to

perform the contract has to be according to the true

construction or interpretation of the agreement between

the parties.

11. The learned Counsel for the defendant

No.2/appellant vehemently contended that it is settled

position of law that the plaintiff has not only to aver

that he is ready and willing to perform his part of the

contract, but he has also to prove the same. He finds

support from the Judgment in the case of Bhaurao Shamrao

Bhalme and others vs. ig Mahadeo Raghu Yelekar AIR 1979

Bom.208 wherein the learned Single Judge of this Court

relied upon Ardeshir vs. Flora Sassoon AIR 1928 PC and

208, Prem Raj v. D.L.F. Housing and Construction

(Private) Ltd. AIR 1968 SC 1355 and observed as follows

:-

"....In my opinion, in view of what has been said

by the privy Council in Ardeshir's case and by the

Supreme Court in Prem Raj's case, it cannot be

gainsaid that such an averment has to be made by

the plaintiff in a suit for specific performance

of contract and not only that he has to make such

an averment, but he has to substantiate it by

means of evidence, if that fact is controverted."

12. The learned Counsel for the appellant also

contended that the remedy for specific performance is an

equitable remedy and is in the discretion of the Court

and if it is found that the plaintiff has not averred

and proved that he was ready and willing to perform his

part of the contract, that itself may be a ground to

refuse the decree for specific performance. In support

of this contention, he relied upon N.P.Thirugnanam vs.

Dr. R.Jagan Mohan Rao and others AIR 1996 SC 116 and

observed as follows :-

"5. It

is settled law that remedy for specific

performance is an equitable remedy and is in the

discretion of the Court, which discretion requires

to be exercised according to settled principles of

law and not arbitrarily as adumbrated under S.20

of the Specific Relief Act 1963 (for short 'the

Act'). Under S.20, the court is not bound to

grant the relief just because there was valid

agreement of sale. Section 16(c) of the Act

envisages that 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

continuous 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 considered 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 conduct of the plaintiff prior and subsequent

to the filing of the suit along with other

attending

circumstances. The amount of

consideration 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 attending

circumstances. The court may infer from the facts

and circumstances whether the plaintiff was ready

and was always ready and willing to perform his

part of contract."

From the above observations, it will be clear that

besides the factum of readiness and willingness to

perform part of the contract by the plaintiff is to be

adjudged with reference to the conduct of the party and

the attending circumstances. It may be noted that in

that particular matter, the plaintif had agreed to

purchase certain property for Rs.2,30,000/-. It appears

that he was unable even to pay his loans and the

instalments. It was found that the plaintiff was not

having sufficient money to pay the price of the

property. Though PW-2 had deposed that he was willing

to advance amount of Rs.2 lacs, t he himself was not

having the cash

and for that purpose he had to

hypothecate certain property. In these circumstances,

it was held that plaintiff was not in a position to

perform his part of the contract about payment of the

contract amount.

13. In the present case, except on the issue of

readiness and willingness of the plaintiff to perform

his part of the contract, on all other issues there are

concurrent findings of facts by both the Courts below.

Both the Courts below held that the plaintiff had agreed

to purchase suit house for Rs.10,000/- as per the

agreement Exhibit 63. The amount of Rs.2750/-, which

was already received by the defendant No.1 towards

advance rent at the time of compromise in the earlier

suit, was adjusted in the consideration amount. The

plaintiff paid further amount of Rs.4,000/- to him and

thus, the defendant No.1 had received Rs.6750/-. The

balance amount of rs.3250/- was to be paid at the time

of execution of the sale deed. It was agreed that the

sale deed would be executed on or before 31.5.1981. The

plaintiff pleaded in the plaint that before the last

date of execution of the sale deed, on 30.3.1981, he had

issued a notice to the defendant No.1 and had called

upon him to execute sale deed as per the terms of he

contract. That notice was received by him on 1.4.1981.

It is material to note that in the written statement

filed

by the defendant No.1, he nowhere denied to have

received the notice. In the evidence in

examination-in-chief also the plaintiff deposed that on

30.3.1981, he had issued notice to the defendant No.1

and asked him to execute sale deed as per the terms of

contract. He also deposed that notice was received

though according to him acknowledgment of the receipt of

the notice was with his advocate. It is material to

note that in the cross-examination on behalf of the

defendant No.1, no question was put to the plaintiff

about issuance of that notice. From this it is clear

that the defendant No.1 does not deny to have received

the notice dated 30.3.1981 to execute the sale deed as

per the terms of the contract. When the plaintiff asked

the defendant to execute sale deed on or before the

fixed date as per the terms of the contract, that

clearly implies that the plaintiff was ready and willing

to pay the balance amount of consideration and to get

the sale deed executed and at the same time, he also

asked the defendant to receive the balance amount and to

execute the sale deed. There was no denial or challenge

to this pleading anywhere. It is true that in the

plaint, it was not averred in so many words that the

plaintiff was always ready and willing to perform his

part of the contract, but at the same time, it is to be

noted that out of the total consideration amount of

Rs.10,000/-, the plaintiff had already paid more than

2/3rd

at the time of agreement for sale and the balance

amount of Rs.3250/- was to be paid at the time of

execution of the sale deed. The time to pay the balance

amount would be the time of execution of the sale deed

which was agreed to be 31.5.1981. Even before that

date, the plaintiff had issued the notice dated

30.3.1981 and by this conduct he showed his readiness

and willingness to pay the balance amount and to get the

sale deed executed. It is also material to note that

the defendant No.1 did not execute the sale deed as per

the terms of the contract within the stipulated period

and, therefore, the plaintiff filed suit for specific

performance on 8.7.1981 i.e. just about one month after

the last date fixed for execution of the sale deed. The

prompt action on the part of the plaintiff in filing the

suit also goes to show that he was ready and willing to

perform his part of the contract. It is well settled

that in view of the Explanation to Section 16(c) of the

Specific Relief Act, it was not necessary for the

plaintiff to actually tender the amount to the defendant

or to deposit the amount in the Court immediately,

unless he was so directed by the Court. Admittedly, the

trial Court had never directed the plaintiff to deposit

the balance amount in the Court and therefore he was not

required to deposit the amount. It is material to note

that before the trial Court passed the judgment on

24.7.1987, the plaintiff had deposited the balance

amount

of consideration on 4.7.1987 in the Court as per

receipt Exhibit 59 and this fact was also noted by the

trial court. All these circumstances reveal that the

plaintiff was always ready and willing to perform his

part of the contract, but he had not averred this fact

in so many words in the plaint. In these circumstances,

the appellate Court allowed him to amend the plaint and

make necessary averment. After noting of the facts and

circumstances and the amendment carried out in para 4B

to that effect, the appellate Court observed that in

such circumstances, the provisions of Section 16(c) of

the Specific Relief Act would not come into play,

particularly when the appellant had already paid balance

amount on 4.7.1987. In my considered opinion, in the

peculiar circumstances of the case, the learned

appellate Court was justified in allowing the amendment

in the plaint.

14. In similar circumstances, where there was no

specific pleading about readiness or willingness of the

plaintiff to perform his part of the contract, but the

trial Court had come to the conclusion that he had

proved his readiness and willingness the Madras High

Court in Indravanthi vs. Kamala AIR 2001 Madras 127,

allowed the application for amendment when the appeal

was as pending in the High Court. In Kailash Prasad Sah

and others vs. Govind Das Shastri and others, AIR 1999

Pat.149, in almost

similar circumstances, where the

plaintiff had not pleaded his readiness and willingness,

after its defect was pointed out by the defendant, the

trial court allowed the amendment of the plaint. The

Patna High Court held that in view of the circumstances,

prayer for amendment to the plaint to specifically aver

that the plaintiff was ready and willing to perform his

part of the contract cannot be faulted. It is also

material to note that in Motilal Jain vs. Smt. Ramdasi

Devi and others AIR 2000 SC 2408, Their Lordships held

that if averment in the plaint read as a whole, clearly

indicates that the plaintiff was always and is still

ready and willing to fulfill his part of the contract it

is sufficient compliance. Their Lordships observed as

follows :-

"9.....The language in Section 16(c) of the

Specific Relief Act, 1963 does not require any

specific phraseology but only that the plaintiff

must aver that he has performed or has always been

and is willing to perform his part of the

contract. So the compliance of "readiness and

willingness" has to be in spirit and substance and

not in letter and form." It is thus clear that an

averment of readiness and willingness in the

plaint is not a mathematical formula which should

only be in specific words. If the averments in

the plaint as

a whole do clearly indicate the

readiness and willingness of the plaintiff to

fulfil his part of the obligations under the

contract which is subject-matter of the suit, the

fact that they are differently worded will not

militate against the readiness and willingness of

the plaintiff in a suit of specific performance of

contract for sale."

Taking into consideration the facts and circumstances of

the pleadings of the plaintiff and his conduct, I am

satisfied that the appellate Court was justified in

holding that the plaintiff was always ready and willing

to perform his part of the contract and was also

justified in granting permission to amend the plaint to

aver that fact.

15. The learned Counsel for the appellant vehemently

contended that grant of decree for specific performance

is discretionary and the discretion should not be used

in favour of the plaintiff because the defendant

No.2/appellant is a bonafide purchaser for value and she

had purchased the property including the suit house

under a registered sale deed dated 4.5.1977 and she is

entitled to get possession of the suit house due to

assignment of the decree in favour of the defendant No.1

in suit No. 265 of 1973. I am not convinced with this

contention, particularly when both the courts below have

given concurrent finding that the defendant No.2 is not

a bonafide purchaser for value without notice of the

rights of the plaintiff. It may be noted that as per

the admissions on record, PW-2 Prabhakar, who is the

husband of defendant no.2 was admittedly holding power

of attorney for the defendant No.1. Admittedly, his

father was working as guardian for the defendant no.1

during his minority. From the admissions, it appears

that even though the defendants and PW-2 are not real

brothers. In such circumstances, it is impossible to

believe that the defendant No.2 had no knowledge or

notice of the contract between the plaintiff and the

defendant No.1. During the course of cross-examinatin

of the plaintiff, it was contended that value of the

suit property was about Rs.55,000/-. Of course, this

was denied by the plaintiff. The fact remains that the

defendant No.2 claims to have purchased not only the

suit property, but also some more property o for

consideration of just Rs.5,000/-. The Courts below

noted that the property allegedly purchased by defendant

No.2 under the sale deed dated 4.5.1977 is almost 3

times the suit property for which she claims to have

paid only for Rs.5,000/-. Taking into consideration the

meagre amount paid by her for much larger

property,including the suit house also, it cannot be

held that she is the bonaide purchaser for value. In

such

circumstances, I find no fault with the appellate

Court ingranting the decree for specific performance of

the contract.

16. The original plaintiff also filed cross-objections

contending that the defendant no.1 has already executed

the sale deed in favour of the defendant no.2 for the

property including the suit property and therefore, the

first appellate Court should have directed the defendant

no.2 also to join the defendant No.1 in executing the

sale deed in favour of the plaintiff. In my considered

opinion, taking into consideration the facts stated

earlier, it will be in the interest of justice to pass

such an order to avoid any further complications. At

the same time, even though the original defendant No.1

has not preferred any appeal, I notice that the

plaintiff deposited the amount of Rs.3250/- towards the

balance consideration on 4.7.1987. As per the terms of

the contract, he was to pay that amount on or before

31.5.1981 i.e. at the time of executing the sale deed.

It is true that because of the complications created by

the defendant Nos.1 and 2 themselves the execution of

the decree has been delayed, but at the same time, the

facts remains that though the plaintiff is in possession

of suit property, he had not paid that amount for a

period of more than five years beyond 31.5.1981. Though

for this fault cannot be found with him,to balance the

equities,

I find that the plaintiff may be directed to

pay interest on that amount for the period 1.6.1981 to

4.7.1987 at the rate of 12% per annum. Mr. Gokhale,

the learned Counsel for the plaintiff has no objection

to the same.

17. In view of the above findings, I find no merit in

the Appeal and the Appeal is liable to be dismissed.

18. In the result, the Appeal stands dismissed.

However, the Cross Objection is allowed. It is hereby

directed that the defendant Nos. 1 and 2 shall execute

the sale deed in favour of the plaintiff in respect of

the suit property. The plaintiff shall also deposit

interest on the amount of Rs.3250/- from 1.6.1981 to

4.7.1987 at the rate of 12% per annum before the trial

Court within six weeks from this date. The parties

shall bear their own costs. Th decree shall stand

modified accordingly.

19. Parties to act on an authenticated copy of this

Judgment.

(J.H.BHATIA, J.)