Chattisgarh High Court
Ashish Gupta vs Smt. Sarla Devi Khetan on 18 August, 2022
1
FA No.388 of 2017
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
FA No.388 of 2017
{Arising out of judgment and decree dated 4-5-2017 passed by the First
Additional District Judge, Durg, in civil suit No.5-A/2008}
1. Ashish Gupta S/o Ramchandra Gupta, Aged About 35 Years R/o
Through Ganpati Allied Works Private Limited, Chintak Press,
Station Road, Durg, Tahsil And District Durg Chhattisgarh.
---- Appellant
Versus
1. Smt. Sarla Devi Khetan, W/o Santosh Kumar Khetan, ageda bout
46 years, R/o Kadambari Nagar, Dhamdha Road, Durg, Tahsil
And District Durg Chhattisgarh.
2. State Of Chhattisgarh, Through Collector, Durg, District Office
Durg Chhattisgarh.
---- Respondents
For Appellant Mr. B.P. Singh, Advocate with Mr.
Sudhansu Kumar Singh, Advocate
For Respondent No.1 Mr. H.B. Agrawal, Sr. Advocate with
Ms Richa Dwivedi, Advocate
For Respondent No.2/State Mr. Ashutosh Mishra & Mr. Sanjay
Pathak, Panel Lawyer
Hon'ble Mr. Justice Goutam Bhaduri &
Hon'ble Mr. Justice Radhakishan Agrawal
Judgment on Board
Per Goutam Bhaduri, J.
18-08-2022
1. Challenge in this appeal is to the judgment and decree dated
4-5-2017 passed by the First Additional District Judge, Durg, in
civil suit No.5-A/2008 whereby the suit for specific performance
brought by the plaintiff/appellant was dismissed.
FA No.388 of 2017
2. The facts, in brief, as pleaded by the plaintiff/appellant, are that the
defendant No.1 owns land bearing khasra No.715, 712/1 and 714
area 0.80, 0.60 and 1.40 hectares (total 2.80 hectares) situated at
village Basin, PH No.11, R.I. Circle Durg-1, Tahsil & District
Durg. The said land was agreed to be sold for a sum of Rs.10.00
lacs and on 16-1-2007 an amount of Rs.1,50,000/- was paid as an
earnest money. Thereafter, an agreement was executed on 8-2-
2007 in presence of the witnesses wherein it was agreed that the
remaining amount of sale consideration would be paid at the time of
execution of sale deed. The plaintiff pleaded that at the time of
agreement, the defendant agreed to get the land demarcated and
would show the original title deed i.e. land papers before the actual
sale. The plaintiff further pleaded that he was always ready and
willing to perform his part of contract by paying the rest part of sale
consideration and to get the sale deed executed, but the defendant
never agreed to it. The plaintiff also pleaded that subsequently he
came to know that despite receiving Rs.1,50,000/- as an earnest
money the defendant wanted to sale the land to someone else as
such public notice was made in the newspaper on 15-10-2007
followed by a registered notice on 16-10-2007 to get the sale deed
registered, but eventually the defendant failed, therefore, the suit
was filed.
3. The case of the defendant No.1/respondent No.1 was that the sale
consideration was not Rs.10.00 lacs but it was of Rs.21,70,000/-
and the agreement for sale was executed on 1-2-2007 and 8-2-2007.
FA No.388 of 2017
It was denied that there was any agreement entered to demarcate the
land before the sale deed is executed. It was further contended that
the agreement stipulates that if the sale deed is not executed till
June, 2007 the earnest money would be forfeited. Therefore, when
the sale deed was not executed, initially the defendant issued notice
to the plaintiff on 14-9-2007, but despite that no efforts were shown
on the part of the plaintiff to execute the sale deed, therefore, since
the time was the essence of contract and the plaintiff was failed to
execute the sale deed within the stipulated period, he is not entitled
for any relief.
4. Learned Court below framed primarily seven issues and found that
the plaintiff has failed to prove his readiness and willingness and
execute the sale deed and eventually dismissed the suit. Hence, this
appeal.
5. Mr. B.P. Singh, learned counsel appearing with Mr. Sudhansu
Kumar Singh, learned counsel for the appellant, would submit that
the conduct of the parties in the likewise cases would be of utmost
important. He would further submit that the contents of notice
(Ex.P/3) would show that the defendant was called upon to exercise
his part of agreement, but he did not do so and the plaintiff was
ready and willing to perform his part of contract. He would also
submit that in the written statement before the Court entire
execution of the agreement was denied, therefore, the defendant
could not have taken the pleading that the plaintiff is not ready and
FA No.388 of 2017
willing to perform his part of contract. He would place reliance
upon the decision rendered by the Supreme Court in Kadupugotla
Varalakshmi v Vudagiri Venkata Rao & Others1.
6. Per contra, Mr. H.B. Agrawal, learned senior counsel appearing
with Ms Richa Dwivedi, learned counsel for the respondent
No.1/defendant No.1, would submit that perusal of the agreement
(Ex.P/1) would show that the time was the essence of contract. He
would further submit that till June, 2007 the sale deed should have
been executed but since the plaintiff failed to abide by the terms of
contract as such the notice was issued on behalf of the respondent/
defendant apprising the fact. He would, therefore, submit that the
finding of the Court below is well merited, which do not call for
any interference.
7. We have heard learned counsel appearing for the parties, perused
the pleadings and the evidence available on record.
8. The agreement in this case is Ex.P/1. Perusal of the original record
of the agreement styled as 'इक़रार नामा' dated 8-2-2007 would show
that the same was executed for sale of the land bearing khasra
No.715, 712/1 and 714 area 0.80, 0.60 and 1.40 hectares (total 2.80
hectares) situated at village Basin, PH No.11, R.I. Circle Durg-1,
Tahsil & District Durg. The sale consideration was Rs.10.00 lacs
and out of that an amount of Rs.1,50,000/- was paid by cheque,
towards earnest money, which was received on 16-1-2007. It
1 2021 SCC OnLine SC 365
FA No.388 of 2017
further purports that the remaining amount would be paid at the
time of registration and the registration date was fixed up till June,
2007. The agreement specifically provides that if the registration is
not done within the stipulated time, the earnest money would be
forfeited and the seller would be free to execute the sale deed to
some other.
9. Now coming back to the issue of readiness and willingness along with
the fact whether the time was essence of contract, the averments of
agreement (Ex.P/1) were examined. On plain reading, it is manifest
that time was fixed to execute the sale deed up till June, 2007 thereby,
prima facie, June, 2007 was made the target date. The notice (Ex.P/2)
issued on behalf of the defendant. The contents of the said notice,
which was addressed to Ashish Gupta purports that since sale deed
was not executed till June, 2007 and no effort was shown to get the
sale deed executed and hence claimed compensation of Rs.5.00 lacs.
10. The question cropped up for consideration is as to whether the time
was essence of contract. The said issue came up for consideration
before the Supreme Court on number of occasions.
11. In Rathnavathi and Another v Kavita Ganashamdas 2, the Supreme
Court reiterated the law down in Govind Prasad Chaturvedi v Hari
Dutt Shastri3 and Gomathinayagam Pillai v Palaniswami
Nadar4and held thus at paras 35 and 36 :
2 (2015) 5 SCC 223
3 (1977) 2 SCC 539
4 AIR 1967 SC 868
FA No.388 of 2017
35. In Govind Prasad Chaturvedi Vs. Hari
Dutt Shastri, this Court placing reliance on
the law laid down in Gomathinayagam Pillai,
reiterated the aforesaid principle and held as
under (Govind Prasad case, SCC pp.543-44,
paras 5-6):
"5.......It may also be mentioned that the
language used in the agreement is not
such as to indicate in unmistakable terms
that the time is of the essence of the
contract. The intention to treat time as
the essence of the contract may be
evidenced by circumstances which are
sufficiently strong to displace the normal
presumption that in a contract of sale of
land stipulation as to time is not the
essence of the contract.
6. Apart from the normal
presumption that in the case of an
agreement of sale of immovable properly
time is not the essence of the contract
and the fact that the terms of the
agreement do not unmistakably state that
the time was understood to be the
essence of the contract neither in the
pleadings nor during the trial the
respondents contended that time was of
the essence of the contract."
36. Again in Chand Rani vs. Kamal Rani,
this Court placing reliance on law laid down
in aforementioned two cases took the same
view. Similar view was taken with more
elaboration on the issue in K.S. Vidyanadam
v. Vairavan, wherein it was held as under
(SCC pp.7&9, paras 10 & 11):
"10. It has been consistently held by the
courts in India, following certain early
English decisions, that in the case of
agreement of sale relating to immovable
property, time is not of the essence of the
contract unless specifically provided to
that effect. The period of limitation
prescribed by the Limitation Act for
filing a suit is three years. From these
two circumstances, it does not follow
that any and every suit for specific
FA No.388 of 2017
performance of the agreement (which
does not provide specifically that time is
of the essence of the contract) should be
decreed provided it is filed within the
period of limitation notwithstanding the
time-limits stipulated in the agreement
for doing one or the other thing by one or
the other party. That would amount to
saying that the time-limits prescribed by
the parties in the agreement have no
significance or value and that they mean
nothing. Would it be reasonable to say
that because time is not made the essence
of the contract, the time-limit(s)
specified in the agreement have no
relevance and can be ignored with
impunity? It would also mean denying
the discretion vested in the court by both
Sections 10 and 20. As held by a
Constitution Bench of this Court in
Chand Rani v. Kamal Rani (SCC p.528,
para 25)
"25....it is clear that in the case of
sale of immovable property there
is no presumption as to time being
the essence of the contract. Even if
it is not of the essence of the
contract, the Court may infer that
it is to be performed in a
reasonable time if the conditions
are (evident?) :
(1) from the express terms
of the contract;
(2) from the nature of the
property; and
(3) from the surrounding
circumstances, for example,
the object of making the
contract."
In other words, the court should look at
all the relevant circumstances including
the time-limit(s) specified in the
agreement and determine whether its
discretion to grant specific performance
should be exercised. Now in the case of
FA No.388 of 2017
urban properties in India, it is well-
known that their prices have been going
up sharply over the last few decades -
particularly after 1973.
"11......Indeed, we are inclined to think
that the rigor of the rule evolved by
courts that time is not of the essence of
the contract in the case of immovable
properties - evolved in times when prices
and values were stable and inflation was
unknown - requires to be relaxed, if not
modified, particularly in the case of
urban immovable properties. It is high
time, we do so......"
The aforesaid view was upheld in
K. Narendra vs. Riviera Apartments (P)
Ltd.
12. The aforesaid judgment would indicate that in an agreement of sale
relating to immovable property, time would not be essence unless
specifically provided to that effect.
13. Now coming back to the agreement along with oral evidence
adduced by the plaintiff wherein it was stated that the demarcation
and showing of the original title deed before execution of the sale
deed was a condition precedent do not exist in the agreement. After
the target date i.e. 8-6-2007 when the sale deed was not executed
initially a notice was served on behalf of the defendant about failure
of execution of sale deed at the behest of the plaintiff. It then
followed by a notice by the plaintiff attaching condition that the
demarcation and show of original title deed was a condition
precedent for execution of sale deed. The oral evidence, which was
adduced by the plaintiff if are accepted in absence of any ambiguity
to the contents of agreement, then Section 92 of the Indian
FA No.388 of 2017
Evidence Act, 1872 would come into play which mandates that
when the terms of any such contract, grant or other disposition of
property has been reduced in writing, no evidence of any oral
agreement or statement shall be admitted, as between the parties to
any such instrument or their representatives in interest, for the
purpose of contradicting, varying, adding to, or subtracting from, its
terms.
14. From the evidence of the plaintiff, it is manifest that time was the
essence of contract as it was not required to be pre-qualified by
demarcation and display of original title deed. If the contention of
the appellant is allowed to sustain it would amount to accepting the
oral evidence as against the agreement (Ex.P/1) entered in between
the parties by changing the terms of contract. Primary reading of
the evidence, therefore, would lead to show that 8-6-2007 was the
target date and the time was essence of the contract and specific
agreement and terms were settled in between the parties.
15. So far as the averments made on behalf of the plaintiff that he was
ready and willing to perform his part of contract is concerned, as
per Section 16(c) of the Specific Relief Act, 1963 it would amount
to extension of terms of agreement, which was not agreed in
between the parties. Thus, we are of the view that time being the
essence of contract it cannot be extended beyond the period as
agreed upon by the parties irrespective of other facts and conduct of
the parties.
FA No.388 of 2017
16. For the foregoing reasons, we do not find any infirmity or
illegality in the impugned judgment and decree passed by the
Court below, warranting interference in the appeal.
17. The Supreme Court in the matter of India Council for Enviro-legal
Action v Union of India and others 5 discussed different case-laws.
Few of the paras i.e. para Nos.152, 153, 154, 155 & 156 are
reproduced hereinbelow:
152. Unjust enrichment' has been defined by
the court as the unjust retention of a benefit
to the loss of another, or the retention of
money or property of another against the
fundamental principles of justice or equity
and good conscience. A person is enriched if
he has received a benefit, and he is unjustly
enriched if retention of the benefit would be
unjust. Unjust enrichment of a person occurs
when he has and retains money or benefits
which in justice and equity belong to
another.
153. Unjust enrichment is "the unjust
retention of a benefit to the loss of another,
or the retention of money or property of
another against the fundamental principles of
justice or equity and good conscience." A
defendant may be liable "even when the
defendant retaining the benefit is not a
wrongdoer" and "even though he may have
received [it] honestly in the first instance."
(Schock v. Nash (732 A 2d 217) Delware
1999), 232-33.
154. Unjust enrichment occurs when the
defendant wrongfully secures a benefit or
passively receives a benefit which would be
unconscionable to retain. In the leading case
of Fibrosa Spolka Akcyjna v. Fairbairn
Lawson Combe Barbour Ltd. [1942] 2 All
ER 122, Lord Wright stated the principle
thus :
5 (2011) 8 SCC 161
FA No.388 of 2017
"....(A)ny civilized system of law is
bound to provide remedies for cases of
what has been called unjust enrichment
or unjust benefit, that is, to prevent a
man from retaining the money of, or
some benefit derived from another which
it is against conscience that he should
keep. Such remedies in English law are
generically different from remedies in
contract or in tort, and are now
recognized to fall within a third category
of the common law which has been
called quasi-contract or restitution."
155. Lord Denning also stated in Nelson v.
Larholt, [1947] 2 All ER 751 as under:-
"......It is no longer appropriate,
however, to draw a distinction between
law and equity. Principles have now to
be stated in the light of their combined
effect. Nor is it necessary to canvass the
niceties of the old forms of action.
Remedies now depend on the substance
of the right, not on whether they can be
fitted into a particular frame-work. The
right here is not peculiar to equity or
contract or tort, but falls naturally within
the important category of cases where
the court orders restitution, if the justice
of the case so requires."
156. The above principle has been accepted
in India. This Court in several cases has
applied the doctrine of unjust enrichment.
18. Perusal of the record of the learned Court below show that after
exchange of notices the suit was filed on 25-4-2008. The sale deed
could not be executed and the defendant is in hold of Rs.1,50,000/-
since 16-1-2007 when the cheque was encashed and deposited in
his account. Since we are not inclined to pass a decree for specific
performance and the money is in hold of the defendant, we are of
view of that the plaintiff has a right of restitution and he cannot be
FA No.388 of 2017
deprived of the said amount. The Supreme Court has observed that
the restitution and unjust enrichment have to be viewed in two
stages i.e. pre-suit and post-suit. In the pre-suit position the amount
is not returned and also in the post-suit the amount is still with the
defendant. No efforts have been made to return the amount though
the statement has been made that the defendant has suffered certain
loss, but nothing is on record to substantiate the same.
19. Under the circumstances of this case, applying the principles of
justice and equity, we deem it appropriate to direct the defendant/
respondent No.1 to pay an amount of Rs.1,50,000/- to the appellant/
plaintiff along with interest at the rate of 6% per annum from today.
Ordered accordingly.
20. In the result, the appeal is disposed of with the above observations.
No order as to cost(s).
21. A decree be drawn accordingly.
Sd/- Sd/-
(Goutam Bhaduri) (Radhakishan Agrawal)
Judge Judge
Gowri
