Bhagchand Jain vs Smt. Parwati Sharma
2022 Latest Caselaw 6024 Chatt

                                      1

                                                                          AFR

           HIGH COURT OF CHHATTISGARH, BILASPUR
                    (Judgment Reserved on 12-09-2022)

                    (Judgment Delivered on 27-09-2022)


                             FA No. 295 of 2016

   1. Bhagchand Jain, Son of Shri Gulab Chand Jain, aged about 44 years,
      resident of 12, Wardhman Nagar, Rajnandgaon, District Rajnandgaon
      (CG) Civil and Revenue District Rajnandgaon

                                                                ----Appellant

                                       Versus

   1. Smt. Parwati Sharma, wife of Shri Narendra Sharma aged about 55
      years, resident of Kailash Nagar, Rajnandgaon, District Rajnandgaon
      (CG)

   2. State of Chhattisgarh through the Collector, District Rajnandgaon

                                                            ---- Respondents


For Appellant                        : Shri B.P. Sharma, Advocate with Shri
                                       M. L. Saket, Shri Nitesh Jain and
                                       Shri Ankur Agrawal, Advocates

For Respondent N o.1                 : Shri Ashish Surana, Advocate.

For Respondent No.2/State            : Shri Ashutosh Mishra, Panel Lawyer


                   Hon'ble Shri Justice Goutam Bhaduri

                & Hon'ble Shri Justice Radhakishan Agrawal

                             CAV JUDGMENT

Per Goutam Bhaduri, J.

1. Heard.

2. Challenge in this appeal is to the order dated 26.07.2016, passed by the

Court of Additional District Judge, (FTC), Rajnandgaon (CG) in Civil

Suit No.9-A/11, whereby the suit for specific performance of contract

filed by the plaintiff was dismissed. The instant appeal is by the

plaintiff/purchaser to the agreement.

3. The suit was filed on 31.03.2009 that the plaintiff entered into an

agreement with Smt. Parwati Sharma for purchase of a land bearing

Khasra No.274/8 and 274/13 total 16,000/- sq. feet, situated at Village

Lakholi for consideration of Rs.97 Lakhs. The agreement of sale was

executed on 03.12.2007 and earnest money of Rs.5 Lakhs was paid in

cash thereafter on 08.12.2007 Rs.1,50,000/- cash was paid and

subsequently an amount of Rs.2,50,000/- & Rs.1,00,000/- was paid

through cheque thereby total earnest money of Rs.10,00,000/- was paid

and according to the plaintiff, the sale was to be executed till

03.09.2008. As per plaintiff before such sale deed is executed, a month

before the land was required to be demarcated and all the documents of

title deed were required to be handed over. It was further agreed that

part of the subject land since was occupied by Ashoka Transport, it was

also decided to get such premises vacated from them. It was further

agreed that since the land was adjacent to the National Highway it was

agreed in case the part of land is acquired for construction of the

Highway if any part of the land is released, then the condition of

adjustment the amount of consideration was agreed. It was also agreed

that if the land goes by measuring from 90 feet from the center of the

road, then it would be the seller's liability. Further as per plaintiff it

was agreed that from the date of agreement if seller is in need of money

within a period of three months an amount of Rs.15 Lakhs would be

paid and the rest of the amount would be paid at the time of registration

of sale deed. The agreement was typed on 08.12.2007 wherein the

receipt of Rs.5 Lakhs on 03.12.2007 was acknowledged. It further

stated that in the agreement, the number of land was shown wrongly by

typographic mistake and it was written as 278/8 and 274/13.

4. The plaintiff further contended that the defendant sent a notice of

cancellation of the agreement on the ground that the plaintiff had not

paid the amount of Rs.15,00,000/- within three months from the date of

03.12.2007. The plaintiff further stated that after receipt of cancellation

notice of agreement, the plaintiff published a public notice that as to

whether anyone has any right or charge over the property, but pursuant

to such public notice no response was received. Whereas the defendant

published the cancellation notice of agreement in the news paper. The

plaintiff further stated that as agreed, the plaintiff appeared before the

Sub-Registrar on 12.05.2008 with the amount of consideration to get

the sale deed registered but the defendant did not turn up and when

contacted it was stated that the Husband of the defendant is since out of

station, therefore, the sale deed could not be executed and the same

state of affairs continue and eventually the plaintiff by a notice dated

27.05.2008 called upon the defendant to execute the sale deed in his

favour. The plaintiff further stated that the defendant neither got the

land demarcated as agreed in the sale agreement nor got the part of the

land vacated from Ashoka Transports, therefore, she herself failed to

perform her part of contract and illegally annulled the agreement.

Consequently, the execution of the sale deed of the subject property of

agreement by payment of 87 Lakh was prayed for.

5. The defendant in her reply agreed to receive the amount of Rs.10 Lakhs

pursuant to the oral agreement on 03.12.2007 for sale of land bearing

Khasra No.274/8 & 274/13. It was stated that on 03.12.2007 no

agreement was executed and receipt of the amount of Rs.5 Lakhs was

only acknowledged in a stamp of Rs.50/- and the plaintiff promised that

the rest of the amount of Rs.5 Lakhs would be paid and he would bring

a stamp paper with the agreed terms and would get the signature of the

defendant. The defendant further stated that believing into the statement

of the plaintiff on 08.12.2007, the typed agreement was brought which

contained the receipt of Rs.5 Lakhs. It was stated the agreement was

typed one but the payment of Rs. 15 Lakhs within three months from

03.12.2007 on need was wrongly typed with the added word that in case

of need by the defendant, Rs.15 Lakhs would be paid. The defendant

further pleaded that 200 sq. feet area which was occupied by the Ashoka

Transport got vacated, but the plaintiff knowing full well the identity

added the word demarcation would be carried out and the report would

be supplied to the plaintiff was added. It is stated that believing the

statement of the plaintiff, the defendant signed the agreement. Though

the alleged part of the premises under occupation of Ashoka Transport

was got vacated and the measurement of the land was already carried

out.

6. The defendant further contended that she wanted money for her

different needs for that the agreement of sale was executed but

according to agreement, within three months of the agreement Rs.15

Lakhs was not paid. As such terms of the agreement was not complied.

Thereby, the plaintiff himself got the agreement annulled by his

conduct.

7. It was further submitted by the defendant that the defendant served a

notice on 17.03.2008 informing cancellation of the agreement. It was

stated that the defendant had already complied her part of obligation

under the agreement but plaintiff did not pay the amount of Rs.15 Lakhs

within three months, therefore, the defendant did not reciprocate to the

notice of the plaintiff when served as agreement was already cancelled.

It is further stated that the false publication was made in the paper by

the plaintiff and it was rebutted by the defendant and contradictory

statements have been made for compliance of the terms of agreement.

The defendant contended that since the agreement was already annulled,

therefore, no further action was required in respect of the agreement and

the intention of the plaintiff was not for purchase but to sell it further at

a higher price to some other purchasers. Consequently, the averment of

the plaintiff that he was ready and willing to get the sale deed executed

is wrong and he did not have the money to pay the sale consideration.

The defendant further stated that the plaintiff is not entitled to any relief

and the suit be dismissed.

8. On the basis of the pleading learned Court below framed 9 issues.

9. In respect of issue No.1 which pertains to whether the plaintiff is

entitled to get the sale deed of Khasra No.274/8 & 274/13 i.e. 16000sq.

feet by payment of balance sale consideration, the finding was given

that the subject land was mortgaged, therefore, the plaintiff would not

be entitled to pay the amount of balance consideration and to get the

sale deed registered. With respect to issue No.2 the Court held that

whether the agreement stood canceled for non-payment of Rs.15 Lakhs

within three months as averred by the defendant, the Court held in

negative. With respect to the readiness and willingness, the issue No.3

the Court held that the plaintiff was always ready and willing to execute

his part of contract. With respect to the identity of the land as issue

No.6 which pertains to whether the land described in the agreement is a

different land, the Court held that the identity of the land is not in

dispute and further upheld the fact of issue No.7 it held that whether the

agreement was made in respect of the land bearing Khasra No.274/8

and 274/18 total 1000 sq. feet, it was answered in negative. Further the

Court in respect of issue No.8 held that whether the plaintiff himself has

committed breach of the agreement and in answer it was found that it is

not proved.

10. Learned counsel for the appellant would submit that despite holding the

fact that the agreement was very much in existence and the plaintiff was

ready and willing to perform his part of contract, the suit was dismissed

only on the ground that the subject land was under mortgage with the

bank so no sale deed could have been executed. He would further

submit that the evidence adduced by the plaintiff would go to show that

he tried to create the case against the pleading and it is settled law that

the evidence cannot be looked into beyond the pleading. It is further

stated that though in agreement it was written that the property was not

subject of any charge but during the evidence before the Court it was

tried to be proved by the defendant that the property is under mortgage

with the Bank, therefore, the defendant himself committed a fraud on

plaintiff by taking Rs.10 Lakhs. He would further submit that the

defendant has denied the contents of the agreement and has raised the

ground of fraud, therefore, he should not have been allowed to

challenge the contents of the agreement and about readiness and

willingness of the plaintiff to execute. Learned counsel further placed

reliance in the case of J.P. Builders and another Vs. A. Ramdas Rao

and Another {(2011) 1 SCC 429} to submit that when the huge court

fees and earnest money was paid, the Court should have molded the

relief by clearance of the mortgage amount so as to render substantive

justice to the plaintiff and accordingly the suit for specific performance

should have been decreed.

11. Per contra, learned counsel for the respondent referring to the cross-

objection would submit that in the written statement it is stated about

the identity of the land as land bearing Khasra No.274/8 & 274/13 were

shown in the plaint but in agreement 274/8 & 274/18 is shown,

therefore, the identity of the land in question is in dispute. He would

further submit that in the written statement it is specifically stated that

the oral agreement was drawn and subsequently it got typed and

additional condition was added that in case of demand Rs. 15 Lakhs

would be paid, which was not the part of the agreement. Referring to

the statement of DW-1 he would submit that on two dates i.e. on

02.03.2008 and 14.03.2008 the amount of Rs.15 Lakhs was demanded

and when the amount was not paid, the agreement was canceled by

notice Ex. P-2, therefore, the subsequent notice after the cancellation of

the agreement even if the plaintiff says that he wanted to pay the

amount it would be of no use. He refers to the case of I.S. Sikandar

(Dead) By Lrs. Versus K. Subramani and others {(2013) 15 SCC 27}

to submit that when no prayer was made, a declaration of the

cancellation of the agreement was bad and the suit for specific

performance cannot be entertained. He would further submit that the

subject land was mortgaged with the bank, therefore, the decree for

specific performance could not be granted. As according to the

provisions of the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002 the first charge of the

bank would remain. He would further submit that it has been stated that

the money would be arranged from one Rupesh Lodha and the plaintiff

went for execution of the sale deed on 12.05.2008 but Rupesh Lodha

has not been examined to show that the plaintiff has sufficient means to

pay.

12. He would further submit that the word has been used in the plaint that

Tatpar and Ikshuk it will not constitute readiness and willingness,

therefore, the plaintiff when himself was in breach, he cannot ask for

execution of agreement for specific performance and he placed his

reliance in the case of U.N. Krishnamurthy (Since Deceased) through

Lrs. Versus A.M. Krishnamurty 2022 OnLine SC 840 to show that the

plaintiff must prove that he has sufficient fund to purchase the land. He

would further submit that because of the non-payment of the amount,

the agreement was canceled and the defendant himself suffered loss as

such return of the earnest money is bad and accordingly that part of the

order too requires to be set aside apart from the holding the issue of

readiness and willingness in favour of the victim.

13. We have heard learned counsel for the parties and perused the record

and the evidence.

14. First with respect to the identity of the land, the agreement shows

Khasra No.278/8 & 274/8 admeasuring 16000 sq. feet situated at

Village Lakholi, District Rajnandgaon. The plaint averments it is stated

that the execution of the sale deed is sought for aforesaid lands. In the

agreement wrong number has been shown, the actual number is 274/8

& 274/13. Perusal of the statement of the witness and the earlier

injunction order which is part of the record, in the civil suit dated 26 th

August, 2009, would show that the said order was granted in favour of

the plaintiff and the defendant were restrained to create third party

interest in respect of subject land. In such order, injunction was granted

in respect of the land bearing Khasra No.274/8 & 274/13 admeasuring

16000/- sq. feet, therefore, the plaintiff and defendant were in know of

the fact for which the litigation is going on.

15. Narendra Sharma (DW-1) at para 32 has admitted the fact that in Rin

Pustika the name of Parwati was recorded in Khasra No.274/8

admeasuring 19 decimal and Khasra No.274/13 admeasuring 18

decimal thereby total 37 decimal was recorded and apart from those

lands no other land is recorded in name of his wife at Village Lakholi.

He further admitted that agreement for sale was in respect of those lands

only. Further at para 33 with respect to the notice given to the

defendant No.1 Parwati, the witness admitted that in the notice received

by him, contained the same fact and that by clerical mistake in

agreement Khasra No.278/8 and 274/8 was written whereas in the

revenue records it was 274/8 and 274/13.

16. In view of said averments & evidence it shows that the learned trial

Court at issue No.6 has held that the identity of the land is not in dispute

has rightly come to a finding. When holding of Parwati in a particular

locality in respect of land bearing Khasra No.274/8 and 274/13 was 37

decimal and no other land exists there, when such admission is read

with Ex. P-26, the Rin Pustika, the identity of the land cannot be put to

question and the finding by the learned trial Court is correct.

17. Since the issue revolves around the agreement (Ex. P-1), the same is

perused. In the said agreement, the stamp was purchased by Parwati

and endorsement shows that it was on 03.02.2007 an amount of Rs.5

Lakhs was received, thereafter, on subsequent date different amount

was received and total consideration on 08.12.2007 as part payment of

sale consideration Rs.10/- Lakhs was made.

18. The plaintiff Bhagchand Jain (PW-1) in his deposition stated at para 20

that he wanted to purchase the land for his own and not for others. The

suggestion given to him that he was in business of purchase and sale of

the land was also denied. This fact is corroborated by Mangilal Jain

(PW-2) about execution of Ex. P-1. Therefore, the primary allegation of

defendant that plaintiff only wanted to transfer the land at higher price

cannot be appreciated. The defendant in his written statement admitted

the initial oral agreement on 03.12.2007 and stated that Rs.10 Lakhs

was paid at the time of agreement and thereafter within three months

Rs.15 Lakhs was required to be paid.

19. At para 2.3 of the written statement, the defendant has stated that on

08.12.2007 one agreement was brought in the blank stamp which

contained receipt of Rs.5 Lakhs by the defendant and believing that to

be true that terms as agreed upon was been correctly written, the

defendant Parwati and her husband signed the agreement in the capacity

of seller and witness. It has been further stated that in the agreement

wrongly it was written that the amount of Rs.15 Lakhs would be paid in

case of need expressed by the seller within three months. At para 2.4 it

is further stated by the defendant that the plaintiff knowing full well

added a clause that the land would be demarcated and the report would

be given and signature on the document were made by the defendant

only by believing the plaintiff. Thereby the defendant doubted the very

execution of the agreement that it is outcome of fraud.

20. Narendra Sharma (DW-1) at para 3 of his statement stated that on

08.12.2007 no agreement was executed but the plaintiff got the

signature in the blank stamp of his wife and the terms of sale were

written on it in absence of his wife without giving any information, on

the own accord of plaintiff the terms were added but at the time of

actual sale agreement no such terms were agreed that after three months

an amount of Rs.15 Lakhs would be given. Further challenging the

contents of document Ex. P-1, the terms of the agreement were denied

and stated that the plaintiff got the terms added of his own, but when he

read the same he objected to it, but it was explained that the agreement

are written in that way, therefore, believing such submission, he signed

the document Ex. P-1. The defendant maintains the stand that

agreement Ex. P-1 is a forged one. In the cross-examination of this

witness when Ex. P-1, the agreement, was confronted, he at para 23

denied to have received Rs.5 Lakhs on 03.12.2007 and denied to have

purchased the stamp by him. The agreement Ex. P-1 when are

compared which such oral statement it would show that on 03.12.2007

receipt of Rs.5 Lakhs has been shown and the stamp was also shown to

be purchased in name of Parwati by Narendra Sharma, the husband of

defendant No.1. The defendant No.1 Parwati has not been examined.

The defendant witness further denied that the agreement was brought

after typed on 08.12.2007 but he admitted to have received the cheque

of Rs.5 Lakhs on 08.12.2007. He further admitted that on 08.12.2007

the agreement Ex. P-1 signed by seller and purchase and other

witnesses.

21. Perusal of the agreement Ex. P-1 shows that the sale was fixed at

consideration of Rs.97 Lakhs and 10 Lakhs was given as a

consideration. Further in between 03.12.2007 till 03.09.2008 the time

was fixed to get the sale deed registered. It further contains that if seller

wants any amount after three months, an amount of Rs.15 Lakhs would

be given and rest of the amount would be given at the time of

registration. The said contents when are seen along with para 19 of the

cross-examination of Narendra Sharma (DW-1), he admits that it is

correct to say that after the agreement, in absence of payment of Rs.15

Lakhs within three months, the sale would be canceled, is not written in

Ex. P-1. Narendra Sharma (DW-1) further stated that he went to

demand Rs.15 Lakhs to the plaintiff along with one Sandeep

Shrivastava, but the amount was not given to him. The averments and

the defence of the respondent along with the contents of Ex. P-1, it do

not show any condition that within three months from 03.12.2007

without any demand the amount of Rs.15 Lakhs would further be paid

to the seller.

22. The defendant as against the terms of contract has tried to raise a

ground by oral evidence, which would not be admissible under Section

92 of the Evidence Act. To challenge the terms of grant or deposition,

when it is reduced in writing and the oral evidence for that purpose

would not be admissible. Now turning to the other condition, the

agreement purports that from 03.12.2007 till 03.09.2008, the sale deed

would be executed and the agreement further contains that before one

month of sale, the demarcation would be done as per procedure and the

demarcation report would be made available to the purchaser, thereafter,

only the sale deed would be executed. It further engrafts the documents

pertains to property & previous registry paper would be handed over at

the time of the execution of the sale deed.

23. There is nothing on record to show that demarcation was ever carried

out. It is also obvious that in a transaction of the like nature where the

sale amount is considerably high, it is logical to presume that the

purchaser would ask for demarcation report before purchase of property.

The defendant tried to project in his evidence that no such condition

was existing and consequently since the amount of Rs.15 Lakhs was not

given, the cancellation of the agreement was done by notice dated

17.03.2008 (Ex. P-2). The contents of the notice whereby the

cancellation of the agreement was done shows that the defendant served

a notice to the plaintiff that the amount of Rs.15 Lakhs was to be paid

within three months from 03.12.2007, which had expired on

03.03.2008, as such despite demand in person on phone, the amount

since has not been paid, the agreement stand cancelled.

24. In response to such cancellation of agreement, the plaintiff served a

notice Ex. P-3, wherein it was stated that the amount of Rs.15 Lakhs

was never demanded and stated that where and when the amount is to

be paid please inform, so that the amount can be paid. The plaintiff,

thereby expressed his willingness to pay the amount of Rs.15 Lakhs.

Thereafter, the exchange of various notices were made but eventually

nothing materialized. The contents of Ex. P-1, the agreement do not

support the fact that within three months from 03.12.2007 amount of

Rs.15 Lakhs would be paid instead it contains a clause that in case of

need within three months from 03.12.2007 an amount of Rs.15 Lakhs

would further be paid to the defendant. The defendant though stated that

he on two occasions demanded the money but evaluating the conduct of

defendant it is difficult to rely on such oral statement. The Ex. P-1

further contains a clause that before execution of the sale deed, the land

would be demarcated. Though it was written in the agreement till

03.09.2008 sale deed would be executed but such execution was to be

preceded by obligation on part of defendant to carryout the

demarcation. Therefore, the contents of agreement would show that

time was not the essence of contract that 03.09.2008 was the target date

for execution of agreement.

25. In Rathnavathi and Another v Kavita Ganashamdas 1, the Supreme

Court reiterated the law down in Govind Prasad Chaturvedi v Hari

Dutt Shastri2 and Gomathinayagam Pillai v Palaniswami Nadar 3and

held thus at paras 35 and 36 :

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 1 (2015) 5 SCC 223 2 (1977) 2 SCC 539 3 AIR 1967 SC 868

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 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 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.

26. Applying the aforesaid principles when certain obligations were

imposed on the earlier seller to get the land demarcated, it cannot be

said before the sale deed is executed and documents are handed over to

the plaintiff, the purchaser in absence of any document to show that the

land was demarcated as per C.G. Land Revenue Code, 1959 and the

demarcation report was given to the plaintiff, it cannot be said that the

defendant has performed his part of contract as the execution of the sale

deed was dependent on it.

27. The defendant has further denied the contents of the contract and even

in the deposition it is deposed that it is out come of fraud.

28. The Supreme Court in 2021 SCC OnLine 365

KadupugotlaVaralakshmi v. Vudagiri Venkata Rao held that when a

defence is raised in the written statement about the non-existence of the

agreement, the defence cannot be entertained that the plaintiff is not

ready and willing to perform his part of contract. Further in Silvey v.

Arun Varghese {(2008) 11 SCC 45} the Court held that when a false

plea has been taken by the defendant about the non execution of the

agreement then the conduct of the parties would be relevant to exercise

the discretion for decreeing the suit for specific performance. Again in

Narinderjit Singh v. North Star Estate Promoters Ltd {(2012) 5 SCC

712}, the Supreme Court held that when a contract itself was denied the

defendant could not have raised the other plea that the plaintiff was not

ready and willing to perform his part of contract. Later, in A.

Kanthamani v. Nasreen Ahmed {(2017) 4 SCC 654} the Court held that

it was not necessary to show that the plaintiff has moneyin his account

to purchase the property

29. Further the defendant has placed his reliance in the case of U.N.

Krishnamurthy (Since Deceased) through Lrs. Versus A.M.

Krishnamurty (2022 SCC OnLIne SC 840) to submit that the plaintiff

was not in possession of sufficient fund to execute the sale deed. The

statement of plaintiff Bhagchand Jain (PW-1) at para 20 has denied the

suggestion that he do not have the money, the reply was given that if the

Court orders then he would deposit the money. He further submitted

that the rest of the amount since is considerable, therefore, he has kept

the money in the bank and the name of Bank is Durg Raj Gramin Bank.

He further submitted that on 12.05.2008 he went to the office of Sub-

Registrar, Rajnandgaon along with one Rupesh Lodha and on that date

he arranged some money and withdrew some money from Bank and

some money was with him since he has sold some land to Rupesh

Lodha at village Haldi. U.N. Krishnamurthy (Since Deceased) (supra)

further shows that 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. The plaintiff has made statement that

he would be able to arrange the fund can be appreciated with his past

conduct to show that money for sale was already arranged. Therefore,

the submission of the defendant that the plaintiff should have proved the

fact that he has sufficient means cannot be seen in isolation without the

conduct of the defendant/respondent.

30. The defendant further has stated that the agreement having been

terminated by a notice dated 17.03.2008 as per the law laid down in the

case of I.S. Sikandar (Dead) By Lrs. Versus K. Subramani and others

{(2013) 15 SCC 27} without seeking the declaratory relief with respect

to termination of the agreement of sale, the suit for specific performance

would not lie and the Court in the said judgment has held thus at para

37 which is reproduced hereinbelow:-

"37. As could be seen from the prayer sought for in the original suit, the plaintiff has not sought for declaratory relief to declare the termination of Agreement of Sale as bad in law. In the absence of such prayer by the plaintiff the original suit filed by him before the trial court for grant of decree for specific performance in respect of the suit schedule property on the basis of Agreement of Sale and consequential relief of decree for permanent injunction is not maintainable in law."

31. The judgment of I.S. Sikandar (Dead) (supra) was considered in the

case of A. Kanthamani Versus Nasreen Ahmed {(2017) 4 SCC 654}

wherein the aforesaid case law was considered and the Court held that

objection regarding the maintainability of the Suit was neither raised by

the defendant in the written statement nor in first appeal before the High

Court and nor in grounds of appeal in this Court. Since no plea was

raised in the written statement, a fortiori, no issue was framed and, in

consequence, neither the Trial Court nor the High Court could render

any finding on the plea. it is a well-settled principle of law that the plea

regarding the maintainability of suit is required to be raised in the first

instance in the pleading (written statement) then only such plea can be

adjudicated by the Trial Court on its merits as a preliminary issue under

Order 14 Rule 2 of the CPC. Once a finding is rendered on the plea, the

same can then be examined by the first or/and second appellate Court. It

is only in appropriate cases, where the Court prima facie finds by mere

perusal of plaint allegations that the suit is barred by any express

provision of law or is not legally maintainable due to any legal

provision; a judicial notice can be taken to avoid abuse of judicial

process in prosecuting such suit. Such is, however, not the case here.

The Supreme Court in para 30.1 to 30.3 has held thus which are

reproduced herein below:-

30.1 First, as rightly argued by learned counsel for the respondent, the objection regarding the maintainability of the Suit was neither raised by the defendant in the written statement nor in first appeal before the High Court and nor in grounds of appeal in this Court.

30.2 Second, since no plea was raised in the written statement, a fortiori, no issue was framed and, in consequence, neither the Trial Court nor the High Court could render any finding on the plea.

30.3 Third, it is a well-settled principle of law that the plea regarding the maintainability of suit is required to be raised in the first instance in the pleading (written statement) then only such plea can be adjudicated by the Trial Court on its merits as a preliminary issue under Order 14 Rule 2 of the CPC. Once a finding is rendered on the plea, the same can then be examined by the first or/and second appellate Court.

32. In the instant case maintainability of the suit was not an issue before the

trial Court. The parties knowing full well what are the issues framed

went into trial. Before this Court maintainability of the suit is raised.

In the cross-objection under Order 14 Rule 2, the maintainability of the

suit on the ground that the declaration against the cancellation of the

agreement has not been raised. It is only by the surprise element during

the argument by placing reliance in I.S. Sikandar (Dead) By Lrs.

Versus K. Subramani and others {(2013) 15 SCC 27} by passing the A.

Kanthamani v. Nasreen Ahmed {(2017) 4 SCC 654} case supra

wherein the case of 2013 was considered. Therefore, this also shows

the conduct of the defendant that though he is alleging fraud on the

plaintiff but all efforts have been made to resist the claim, which cannot

be stated to be bona fide. The submission of the defendant, therefore,

cannot be up held.

33. The trial Court held that the existence of agreement Ex. P-1; the issue of

readiness and willingness of plaintiff; and the identity of the land are

favouring the plaintiff, the dismissal was only on the ground that the

land since was mortgaged with the Central Bank, it cannot be put to

execution and no decree can be passed for specific performance.

34. In the written statement of the defendant no such plea was taken and it

was for the first time before the trial Court during evidence, the

document marked as Ex. D-5 to show that the land is mortgaged with

bank. The conduct of the defendant to show that the defendant has also

exhibited D-4 a marriage invitation of their daughter of 27th January,

2008. The amount of Rs.10 Lakhs was paid by the plaintiff uptill

08.12.2007, thereafter, as against terms of the agreement, the agreement

was terminated by the notice Ex. P-2. During the course of trial it was

revealed that the land is mortgaged with the Bank.

35. The Supreme Court in the matter of Shenbagam and Ors. Versus K.K.

Rathinavel {Civil Appeal No.150 of 2022, decided on 20.01.2022} has

laid down that while balancing the equities, one of the considerations to

be kept in view is as to who is the defaulting party. It is also to be borne

in mind whether a party is trying to take undue advantage over the

other. Further the Supreme Court in the matter of Zarina Siddiqui

Versus A. Ramalingam Alias R. Amarnathan {(2015) 1 SCC 705} held

that in deciding the case of specific relief conduct of the parties must be

considered and the parties must come before the Court with clean

hands. When the defendant suppressing the material facts and making

distorted statement to mislead the Court. It held that the discretion

cannot be exercised in favour of the defendant by refusing to grant of

specific performance. It further held that if a party to a lis does not

disclose all material facts truly and fairly but states them in distorted

manner and mislead the Court, the Court has inherent power to exercise

its discretionary jurisdiction in order to prevent abuse of the process of

law.

36. The perusal of the agreement Ex. P-1, the defendant had made a

statement that the land is free from mortgage and encumbrances. In the

written statement too nothing was putforth but instead a document Ex.

D-4 was filed to show that the land is under mortgage with the bank.

There is nothing on record to appreciate as to whether such statement in

the Ex. D-4 is correct or not. The Supreme Court in the case of Zarina

Siddiqui Versus A. Ramalingam Alias R. Amarnathan {(2015) 1 SCC

705} has held that the equitable discretion to grant or not to grant a

relief for specific performance also depends upon the conduct of the

parties. The necessary ingredient has to be proved and established by

the plaintiff so that discretion would be exercised judiciously in favour

of the plaintiff. At the same time, if the defendant does not come with

clean hands and suppresses material facts and evidence and misled the

Court then such discretion should not be exercised by refusing to grant

specific performance. The conduct and the pleading of the parties

would show that the defendant has tried to mislead the Court by

suppressing the material fact. Therefore, we are of the view that the

discretionary power is required to be exercised in favour of the

appellant for decree for specific performance.

37. The Supreme Court in the like nature of case J.P. Builders and another

Vs. A. Ramdas Rao and Another {(2011) 1 SCC 429} dealt the situation

in respect of the specific relief and observed that when a party is able to

secure substantial relief, namely, decree for specific performance with

clearance of mortgage amount, it is the duty of the Court to mould the

relief so as to render substantial justice between the parties.

38. Since the issue of conduct has come to fore that the defendant was tight

lipped about mortgage but did not disclose to the appellant as he was

tight lipped about the mortgage and nothing was disclosed while he

received the amount of Rs.10 Lakhs, agreed to sale the property but

subsequently cancelled the agreement did not return the money. We

deem it proper taking into the conduct of the defendant to grant a decree

of specific performance in favour of the plaintiff in terms of the

agreement Ex. P-1 and relief claimed in the plaint. The plaintiff would

be entitled to get the sale deed executed with clearance of the

mortgaged amount with bank if any as the defendant cannot be allowed

to give an incentive of their own wrong. The amount of Rs.10 Lakhs

received as an earnest money on 08.12.2007 would carry an interest of

Rs.6% p.a., which would be adjusted towards the balance sale

consideration of Rs.87 Lakhs which was to be paid to the

respondent/seller.

39. In the result, we allow the appeal to the above extent. Accordingly, the

impugned judgment & decree is set aside. The respondent shall also

bear the cost of the suit and the appeal.

40. A decree be drawn accordingly.

          Sd/-                                                        Sd/-


       (Goutam Bhaduri)                                    (Radhakishan Agrawal)

           Judge                                                     Judge

Ashu


                   Head note

(1) When a party to lis do not disclose material facts truly and fairly but in distorted manner to mislead the Court, the discretionary relief can be granted in favour of the purchaser in specific relief case.

(2) Maintainability of the suit is required to be raised in the first instance in pleading before the trial Court.

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