Shri Ram Kishan Kainth vs M/S. Paul And Associates ...
2001 Latest Caselaw 732 Del

ORDER

Devinder Gupta. J.

1. This appeal has been preferred by the plaintiff/appellant against the judgment and decree of Additional District Judge, Delhi passed on 25.9.1984 in civil Suit No.257/80 dismissing his suit for specific performance. The suit, however, was decreed for recovery of Rs.26,100/- against defendants/respondents 1 and 2 with proportionate costs and interest from the date of institution of suit till realisation at the rate of 15% p.a.

2. Facts in brief are that on 26.11.1979 suit was filed by the plaintiff/appellant seeking a detree for specific performance of an agreement to sell. The plaintiff alleged that defendant No.4 Parkash Chand Jain was the owner of plot of land No.K-15, green Park Extension, New Delhi, which he had purchased from M/s. Urban Improvement Housing and Construction Company (P) Ltd. New Delhi, F-32, Connaught Place, New Delhi by a registered sale deed dated 21.7.1961. Defendants 1 and 2 were promoters and builders and acting as agent of defendant No.4 for booking and constructing flats. In the month of November, 1978 they persuaded the plaintiff to purchase one residential flat. Consequently on 30.11.1978 an oral agreement was entered into under which a flat was agreed to be sold to the plaintiff for a consideration of Rs.65,000/- on the following terms and conditions:-

"(a) Initial payment of Rs.1100/- will be made by the plaintiff.

(b) For the balance the defendants were to make a demand of the amount in Installments and that the amount so demanded was to be paid by the plaintiff as per his convenience within three months from the date of demand so made.

(c) That the building will be completed in one year and by the time of possession, the entire payment should be completed.

(d) That the flat would be handed over in its finished condition will all the findings and fixtures.

(e) That on payment of the entire amount of Rs.65,000/- the plaintiff would become the sole and absolute owner of flat No.104, shown in the plan.

(f) That the defendants would execute a sale deed in favor of the plaintiff in respect of the said flat and the expenses of the registration shall be borne by the plaintiff. However, necessary permission to sell has to be obtained by the defendant from the authority concerned at their cost. including income tax clearance certificate.

(g) That the sale deed would be executed by the defendants at their convenience after the possession of the flat is handed over to the plaintiff."

3. It was alleged in the plaint that a sum of Rs.26,100/- were paid by the plaintiff to defendants 1 and 2 from time to time as and when demanded. No amount was demanded thereafter. When defendants. No amount was demanded thereafter. When defendants 1 and 2 did not make further demand for the remaining amount for a considerable time, the plaintiff got apprehensive and on 8.7.1979 wrote a letter inquiring as to why no demand had been made. No reply was received by the plaintiff. Accordingly, another letter dated 2.7.1979 was sent. After receipt of the second letter, defendants 1 and 2 sent a letter dated 6.7.1979 informing the plaintiff that the agreement stood cancelled since the plaintiff had failed to make payment of the remaining amount and the plaintiff was informed that the flat had already been allotted by them to defendant No.3. The plaintiff in this suit also questioned the allotment of flat by defendants 1 and 2 in favor of defendant No.3 alleging that such allotment was bougs and made up story to defeat the claim of the plaintiff . Accordingly, the plaintiff claimed a decree against the defendants for specific performance of the agreement further alleging that he was always ready and willing to perform of his part of the contract.

4. Defendants 1 and 2 filed their written statement and contested the suit. defendant No.3 filed his separate written statement. Defendants 1 and 2 denied that the plot was owned by Parkash Chand Jain. They pleaded that Parkash Chand Jain had already sold the flat and it was Shri Maninder Singh, who was the owner of the plot and that they were acting for and on behalf of Maninder Singh. They denied that they approached the plaintiff for entering into an agreement to sell. According to them, plaintiff and defendants 1 and 2 were conducting their business from the same market in Green Park. It was the plaintiff who had approached them on several occasion for allotment of a flat in the building being constructed on the plot of land owned by Maninder Singh. The plaintiff was informed that all the flats had already been allotted but there was likelihood of one flat No.104 becoming available for re-allotment. Having come to know of the possibility of the said flat being available for re-allotment to him. Defendants a and 2 alleged that it was in these circumstances that the plaintiff asked defendants 1 and 2 to accept the token deposit of Rs.1100/- on 30.11.1978. They further alleged that there was no concluded agreement and it was only a probable offer, the condition precedent being payment of the amount towards proportionate costs of the plot and Rs.65,000/- towards construction of the flat. They alleged that the plaintiff failed to make payment and since there was no concluded contract, the allotment was rightly made by them in favor of defendant No.3. They pleaded that the suit in the absence of the owner was not maintainable and denied that the suit in the absence of the owner was not maintainable and denied that the plaintiff was ever ready and willing to perform his part of the contract. Defendant No.3 also contested the suit on similar pleas claiming that he was bonafide allottee. Following issues were framed by the trial court on the basis of the pleadings of the parties:-

1. Whether the defendants entered into a valid contract of sale dated 30.11.1978 and received a sum of Rs.26,100/- or part payment of the said contract? OPP

2. Whether the plaintiff was prepared to perform his part of the contract? OPP

3. Whether defendant No.3 was in possession of the premises in dispute as alleged in para No.4 of the preliminary objection? If so, to what effect? OPD

4. Is the suit for specific performance only maintainable in view of the admission of the plaintiff made in para 11 of the plaint? OPD

5. Whether the suit is without causes of action? OPD

6. Relief.

5. Parties led their respective evidence. Learned trial court decided issue No.1 holding that defendants 1 and 2 had entered into an agreement to sell on or about 30.11.1978 in favor of the plaintiff for sale of flat No.104 for consideration of Rs.65,000/- out of which the plaintiff had paid Rs.26,100/- as part payment. On issue No.2, it was held that the plaintiff had failed to prove that he had sufficient funds and means to perform his part of the contract and he was not ready and willing to perform his part of the contract before or after he filed the suit or even subsequently when his statement was recorded on 9.2.1983. Issues No.3, 4 and 5 were decided against the defendants. In addition it was held that defendants 1 and 2 acted as agent for the owner in booking the flats. Since the owner was not a party to the suit, therefore, decree for specific performance if passed would be incapable of execution, therefore, the suit for specific performance must fail. Accordingly, suit for specific performance was dismissed but it was partly decreed for recovery of Rs.26,100/- against defendants 1 and 2 only.

6. We have heard learned counsel for the parties at length.

7. Trial court record was summoned. It was noticed that the same stood weeded out. Accordingly, parties were directed to file in Registry copies of pleadings and other documents for our perusal. Paper book was made available for our perusal.

8. Learned counsel for the appellant urged that on true interpretation of the first explanation to clause (c) of Section 16 of the Specific Relief Act, defendants 1 and 2 could not have repudiated the agreement on mere on payment of money.

9. Such in interpretation put forth by learned counsel for the plaintiff/appellant on first explanation to clause (c) of Section 16 of the Act in our view cannot be accepted. In any case learned Single Judge found in favor of the plaintiff that irrespective of non-payment the contract subsisted. Clause (c) of Section 16 of Specific Relief Act casts a duty on the Courts that specific performance of contract be not granted in favor of a person unless he avers and proves readiness and willingness to perform his part of the contract. Explanations (i) and (ii) to clause (c) to Section 16 read:-

"(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 no directed by the court:

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."

10. Averment of readiness and willingness is required to be made in cases in which the plaintiff has already performed his part of the contract. The onus of proof of being ready and willing to perform his part of the contract at all material times from the date of the contract to the date of filing of the suit and up to the date of decree is on the plaintiff.

11. Readiness means the plaintiff's preparedness to fulfilll his obligation and to accept performance when the time for performance has arisen. In case it was part of the plaintiff's obligation to pay full cost of the flat on completion, it was for him to have shown that he had financial capacity to pay the remaining price and that he had the requisite money at his disposal. It, however, does not mean that he had to prove that he was possessed of the necessary money through out the existence of the contract. To prove readiness and willingness, the plaintiff need not actually produce the money to demonstrate his capacity to purchase. But he had to prove that he was ready and willing to go through with the contract. Readiness and willingness cannot be treated as a strait jacket formula. These have to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned. Learned trial court on appreciation of the correspondence exchanged and the oral evidence adduced by the appellant concluded that though there was default on the part of the appellant in not making payment of the amounts, when the same had fallen due, but notwithstanding such default in making payment the contract subsisted. It was further held that since the contract was treated as subsisting by the appellant, it was for him to show that he has been ready and willing to perform his part of the agreement throughout, which he had failed to prove. Installments were due on 31.3.1979, which were not cleared despite demands. The appellant by writing letters was gaining time and avoiding payment, therefore, it must be inferred that he was not ready and willing.

12. The trial court on appreciation of evidence adduced by the parties concluded that the appellant had defaulted in making payment of the Installments on due dates saying:-

"The plaintiff cannot be believed to say that either no amount was due from him or he did not know as to what amount of Installments was due from him. These letters sent by him were obviously intended to gain time for making payment of the amounts which had fallen due from him and had not been paid inspite of demands. The plaintiff had thus defaulted in making payment of the Installments on due dates."

13. In addition to this finding, in para 41 of the impugned judgment the trial court further held:-

"In this case the total sale was Rs.65,100/- out of which only Rs.26,100/- had been paid by 31.3.1979. Installments were due from the plaintiff even when last payment was made on 31.3.1979 and these had not been paid by the plaintiff inspite of demands and the plaintiff was gaining time and avoiding payments unreasonable. The full payment was to be made on completion of construction. The plaintiff would be entitled to claim specific performance when the premises were in a fit condition to be delivered possession. The present suit presupposes that the premises were ready on the date the suit was filed."

14. In view of the aforequoted findings learned trial court held that the plaintiff was not ready and willing to perform his part of the contract before or after he filed the suit or even subsequently when his statement was recorded on 9.2.1993. In view of these findings of fact there is hardly any scope for interference with the impugned judgment.

15. On the second point raised that no issue was framed on the question of ownership, therefore, grant of decree for specific performance could not have been denied and decree ought to have been passed against defendants 1 and 2. In fact this argument is not open to the appellant. Parties were aware of their respective pleadings. They went to the trial knowing fully well of their respective cases. Non framing of issues as such does not affect the legality and validity of the trial of the suit. The appellant was aware of the fact that he had to prove the ownership of the property in the absence of which no decree for specific performance could be passed against the other defendants, who were not the owners. It was pleaded by the plaintiff that Shri Parkash Chand Jain, defendant no.4 was the owner. This fact was specifically denied by defendants 1 and 2 in their written statement. It was pleaded by them that Maninder Singh had purchased the plot in question from Parkash Chand Jain with whom they had entered into an agreement of developing the plot. Obviously, the plaintiff by impleading Parkash chand Jain wanted a decree to be passed against the true owner, who in fact was not the owner when suit was filed. Decree could have been passed had Parkash Chand Jain been the owner but, subject to other conditions being fulfillled. In the instant case in view of the specific denial by defendants 1 and 2 of the ownership of Parkash Chand Jain, it was incumbent on the part of the plaintiff to have imp leaded Maninder Singh as a defendant, in whose absence learned trial court rightly held that no effective decree can be passed in favor of the plaintiff and on that basis the discretion was rightly exercised by not granting decree for specific performance. Accordingly trial court decreed the suit for recovery of the amount with interest.

16. No other point was urged. We find no force in the appeal, which is hereby dismissed leaving the parties to bear their respective costs.