Gujarat High Court
M/S Raj Land Corporation vs Ichchhapore Industrial Co Op Service ... on 14 February, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1161 of 2011
With
R/FIRST APPEAL NO. 1341 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S RAJ LAND CORPORATION & 4 other(s)
Versus
ICHCHHAPORE INDUSTRIAL CO OP SERVICE SOCIETY LTD., & 6
other(s)
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Appearance:
MR KM PARIKH(575) for the Appellant(s) No. 3.1,3.2
MR MEHUL SHAH, SENIOR COUNSEL WITH MR SK PATEL(654) for the
Appellant(s) No. 1,2,3,4,5
for the Defendant(s) No. 1
MR DEVEN PARIKH, SENIOR COUNSEL WITH MR RUTUL P DESAI(6498)
for the Defendant(s) No. 1
MR VIMAL A PUROHIT(5049) for the Defendant(s) No. 1
RULE SERVED for the Defendant(s) No. 3,4,5,6,7
UNSERVED EXPIRED (R) for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 14/02/2024
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This appeal is filed by the original plaintiffs on being
aggrieved by the judgement and decree dated 22.02.2011
passed by the learned 6 th Additional Senior Civil Judge, Surat
in Special Civil Suit No. 285 of 2001. By the aforesaid
judgement and order, the suit filed by the original plaintiffs
has been dismissed.
2. Facts giving rise to the appeal are as under:
2.1 The defendants - respondents no. 1, 2 & 3 herein are the
Society, the President and the Secretary respectively. They
were the owners of suit property situated at Ichhapore, Ta.
Choryasi bearing Revenue Survey No. 897, 898, 899, 912,
915, 916, 917 paiki, 918/2 etc. admeasuring 62142 sq. mtrs.
It was the case of the plaintiffs that the respondents -
defendants had agreed to sell the property to the appellants
for consideration of Rs.60,58,845/-. An agreement to sell was
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entered into on 27.08.1993. As per the sale agreement, the
appellants had paid Rs.6,05,885/-. As per conditions no. 2, 4
& 6 of the suit agreement, it was for the appellants to
undertake the procedure of dereservation of the lands which
took a long time.
2.2 It is the case of the plaintiffs that time was not the
essence of the contract and once the dereservation took place
in the year 2001, they were ready and willing to pay the
remaining amount of consideration. However, the defendants
refused to perform their part of the contract and therefore the
appellants were constrained to file a suit seeking a decree for
specific performance of the contract.
2.3 The defendants - respondents herein filed their written
statement at Ex. 16. It was their case that due to lapse of
time, the agreement to sell was unenforceable. As per
condition no. 11 of the agreement, it was on the appellants -
plaintiffs to complete the necessary procedure for
dereservation on or before 31.10.1993 which they failed to do
and even after extension of time limit for 2 months, they did
not complete the stipulated procedure and there was no
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readiness and willingness to perform the contract.
2.4 The trial court after examining the evidence on record
including the conditions of the agreement to sell and
documents and oral evidence, framed issues, 19 in number.
The trial court concurred with the plaintiffs on the question of
there being an agreement to sell but on issues no. 7 & 8
namely whether the plaintiffs were able to prove that they
were ready and willing to perform the contract, the same
were held to be in the negative. Even on the issue of
limitation, the trial court held that the suit was barred by
limitation, particularly Article 54 of the Limitation Act and
dismissed the suit.
3. Mr. Mehul S Shah, learned Senior Advocate appearing
with Mr. S.K. Patel, learned advocate for the appellants made
the following submissions:
(a) That though all the issues, especially issues no. 3 &
4, have been answered in favour of the plaintiffs,
inasmuch as the execution, the agreement and part
payment of the contract is proved, which is the basic
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requirement for the suit of specific performance, only on
the ground of the plaintiffs having failed to satisfy
readiness and willingness to perform and on the
question of limitation, the trial court has dismissed the
suit.
(b) That looking to the conditions of the agreement to
sell, the total consideration was Rs.60,58,845/-.
Conditions no. 2 to 4 were with regard to dereservation
of the land and title clearance which was to be done by
the appellants. It was their responsibility of removing
the land from reservation and dropping it from
acquisition and thereafter the remaining sale
consideration was to be paid.
(c) That the sale deed was executed on 31.10.1993 and
as per the terms of the agreements, time was mutually
extended by the parties. That in the contracts involving
immovable property, time is never the essence of
contract as was the case on hand. Even otherwise, the
trial court committed an error in holding that once the
contract period had expired on 31.12.1993, there was no
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obligation for the defendant to perform his contract.
(d) That it was only on 09.06.2021 did the defendants
pass a resolution refusing to perform their part and the
limitation therefore would begin to run from that date.
(e) Inviting the court's attention to the relevant
paragraphs of the plaint namely paragraphs no. 6 to 8,
Mr. Shah would submit that it was the specific case of
the plaintiffs that it was only on 09.06.2021 that the
defendants refused to perform their part. That there
was no forfeiture of the amount or even a condition and
there was documentary as well as oral evidence to
suggest particularly in the form of a letter dated
28.07.1997 (Ex. 147) which clearly indicated that the
intention of the defendants was to wait till the land is
dereserved.
(f) That there is nothing on record to show based on the
documentary and oral evidence even of the defendants -
respondents herein that there would be no further
extension for the performance of the contract. That
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because of the mutual extension of the contract and
unless and until dereservation was done, the agreement
to sell could not have been cancelled and the trial court
committed an error in holding that the suit for specific
performance was time barred when admittedly it was
only on 09.06.2001 after the land was dereserved by
notification dated 17.05.2001 that the defendants first
time refused to perform their contract.
(g) That the plaintiffs - appellants herein were always
ready and willing to perform their part of the contract
and the finding of the trial court on the question of the
plaintiffs not being ready and willing to perform was
misconceived. The finding of the trial court that the
dereservation was due to the government's effort and
not the plaintiffs' was also misconceived.
(h) Referring to the agreement to sell, he would submit
that though there was a specific time period fixed upto
31.10.1993, there was a condition in the agreement that
on a failure of any party, the party is not entitled for
specific performance. This omission cannot be treated
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as extension of time. Reading the conditions of the
agreement, Mr. Shah would submit that the dates and
chain of events would show that the contracting parties
were ad idem to the issue that till dereservation is over
the agreement to sell shall subsist.
(i) Taking the court through the oral evidence of the
witnesses of the plaintiffs especially that of plaintiff no. 2
Shri Chaturbhai Ramolia to indicate that several
representations were made for dereservation of land;
that time was mutually extended atleast four to five
times; that there was no occasion prior to 05.05.2001 for
writing a letter; that the parties were in touch with each
other and the fact that money was arranged i.e. payment
of an amount of Rs.25 lakhs was offered, he submitted
that the trial court committed an error in believing that
there was no readiness and willingness to perform the
contract.
(j) Reading the evidence of Shri Navinchandra
Mohanlal Patel at Ex. 218, Mr. Shah would submit that it
was an admitted fact that the plaintiffs had financial
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capacity to honour the contract and therefore there was
no question for the trial court to hold otherwise.
(k) Relying on the provisions of Section 55 of The
Indian Contract Act, 1872 it is submitted that the
intention was never that time was the essence of the
contract. Sections 63 & 66 of the Contract Act were
pressed into service to submit that the conduct of the
promisee shows that for the performance of the promise
the time limit was extended. Section 66 was pressed
into service together with Sections 3, 4 & 6 of the
Contract Act to submit that there was no communication
that the contract be declared voidable. That a party at
whose instance the contract has become voidable can
still go to court and get it enforced.
(l) Relying on the provisions of Sections 16 and 20 of the
Specific Relief Act, Mr. Shah would submit that in
accordance with Section 16(c) of the Act, it cannot be
said that the plaintiffs had failed to aver and prove their
readiness and willingness to perform the essential terms
of the contract and therefore the trial court in
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accordance with the provisions of Section 20 ought to
have exercised discretion of granting the decree of
specific performance.
3.1 In support of his submissions that there was evidence on
record that the party was ready and willing to perform the
contract and that time was extended, Mr. Shah would rely on
the following decisions:
(I) K.Prakash Vs. B.R.Sampath Kumar reported in AIR
2015 SC 9;
(II) A.Kanthamani Vs. Nasreen Ahmed reported in
2017 (1) GLH 794;
(III) Panchanan Dhara Vs. Monmatha Nath Maity
reported in 2006(5)SCC 340;
(IV) Narinderjit Singh Vs. North Star Estate Promoters
Ltd reported in 2012(5) SCC 712;
(V) Zarina Siddiqui Vs. A Ramalingam @ R
Amarnathan reported in 2015 (1) SCC 705;
(VI) A R Madana Gopal Etc Etc Vs. M/s Ramnath
Publications Pvt Ltd And Another reported in 2021 (11)
SCC 200;
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(VII) Daya Singh & Ors. Vs. Gurudev Singh and Ors.
reported in 2010 (2) SCC 194;
(VIII)Azhar Sultana Vs. B.Rajamani & Ors. reported in
AIR 2009 (SC) 2157;
(IX) Nathulal Vs. Phoolchand reported in AIR 1970
(SC) 546;
(X) P.Ramasubbamma v/s. V.Vijaylakshmi reported in
AIR 2022 SC 1793;
(XI) Nadiminti Suryanarayan Murthy(Dead) Through
Lrs. Vs. Kothurthi Krishna Bhaskara Rao & Ors reported
in 2017 (9) SCC 622;
(XII) Gaddipati Divija & Ors. Vs. Pathuri Samrajyam &
Ors. reported in 2023 (3) GLH 311;
(XIII) Van Vibhag Karamchari Griha Nirman Sahkari
Sanstha Maryadit Vs. Ramesh Chander & Others
reported in 2010 (14) SCC 596.
4. Mr. Deven Parikh, learned Senior Counsel appearing
with Mr. Rutul Desai, learned advocate for the respondent no.
1 - Society made the following submissions:
(A) That the findings of the learned trial court have been
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arrived at after detailed evaluation of the documentary
as well as oral evidence coupled with the fact that the
grant of decree of specific performance is a
discretionary relief which has rightly not been exercised
by the trial court.
(B) That the parties were clearly ad idem on the point
that the original agreement to sell was to be performed
in a specific time frame. He would submit that the
argument that the time stood extended by conduct is
without any substance. The reasonings of the trial court
cannot be faulted that the contract had expired since
long. Reading the agreement to sell, he would submit
that it was evident that the oral agreement was made on
28.06.1993 and it was a specific stipulation that it were
the plaintiffs who were to remove the reservation and a
time frame was set out failing which the contract could
not be enforced. Time was therefore the essence of the
contract. He would submit that the argument of learned
Senior Advocate Mr. Shah that the contract was
dependent on three stages i.e. to remove reservation and
payment is incorrect. It was specifically the term of the
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contract that the reservation had to be removed within
four months' time. Having failed to do so, the trial court
rightly came to the conclusion that the plaintiffs had
failed to perform their part of the contract.
(C) That the parties were well aware of the fact that
the contract was to expire on 31.10.1993 and even when
an extension application was moved, no extension was
made beyond 31.12.1993. No further extension was
asked for and merely because, as rightly held by the trial
court, on the defendants' witness the plaintiffs cannot
demonstrate that in absence of the contract being made
voidable, the contract was alive till the reservation was
removed.
(D) Drawing the court's attention to the observations of
the trial court in the judgement with regard to the
question of readiness and willingness to perform, he
would submit that it was a clear stipulation that the
plaintiffs had agreed for getting the title clearance on
execution of the sale deed within a fixed period of time.
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(E) On the question of readiness and willingness, it is
submitted that even if the letter dated 05.05.2001 is
read, it does not indicate readiness and willingness to
perform the contract. Reading the letter, he would
submit that the plaintiffs had asked for time to pay the
amount in installments over a period of one year which
therefore clearly indicated their reservations in
performance of the contract. In fact, what was evident
from the letter by which extension was sought is that it
was the case of the plaintiffs that their business was
slack and therefore they wanted some time in order to
enable honouring the commitment of payments. After
December, 1993, there was absolute silence on the parts
of the plaintiffs - appellants which indicated that there
was no contractual relationship surviving between the
parties.
(F) Supporting the findings of the trial court on the
point of limitation, it is submitted that a time limit as is
evident from the agreement to sell expired on
31.12.1993. As per Article 54 a suit for specific
performance has to be brought within the time limit of
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three years whereas in the present case, the suit was
filed on 03.07.2001 i.e. after more than seven years and
hence is barred by limitation. In absence of any
evidence therefore, the time limit was extended mutually
between the parties. The time expired on 31.12.1993.
In support of his submissions, he would rely on the
oral evidence of the plaintiff no. 2 Chaturbhai Ramolia
and that of plaintiff no. 4 Vallabhbhai Kapuria.
(G) That the defendant no. 2 Navnitlal Gandhi has
supported what has been stated in the written
statement. That the time limit for executing the sale
deed expired on 31.12.1993. On the question of the
submission made by learned Senior Advocate Mr. Shah
in reference to the provisions of Sections 63, 65 and 66
of the Contract Act and Sections 16 and 20 of the
Specific Relief Act, Mr. Parikh would submit that once a
contract becomes voidable there is no necessity in law to
actually enter into communication. He would submit
that the judgements relied upon by the plaintiffs are not
applicable to the facts of the case. Once it is shown that
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the plaintiffs have committed breach of the agreement, it
cannot be said that they are ready and willing to perform
their part.
4.1 In support of his submissions, he would rely on the
following decisions:
(a) Urvashi Aggarwal vs. Kushagr Ansal reported in (2020)
17 SCC 774;
(b) Katta Sujata Reddy vs. Siddam Setty Infra Projects
reported in (2023) 1 SCC 355;
(c) U.N. Krishnamurthy (since deceased) thru. Lrs. vs. A.M.
Krishnamurthy reported in AIR 2022 SC 3361;
(d) Anandram Mangturam vs. Bholeram Tanumal reported
in 1946 ILR Bom 218;
(e) Mangala Vaman Karandikar vs. Prakash Damodar
Ranade reported in (2021) 6 SCC 139;
(f) Haspur Road Cooperative Society Ltd. vs. Vithal Mandir
Trust reported in 2023 JX (Guj) 13;
(g) Mrs. Sara Damani Kandappan vs. Mrs. S. Rajalaxmi and
others reported in AIR 2011 SC 3234;
(h) M/s. Citadel Fine Pharmaceuticals vs. M/s. Ramaniyam
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Real Estates Pvt. Ltd. & Others reported in AIR 2011 SC
3351;
(i) Balram Singh vs. Kelo Devi reported in 2022 SCCOnLine
SC 1283.
5. Having considered the submissions made by the learned
counsels for the respective parties and having perused the
judgement and decree passed by the court below, we need to
consider the submissions made in light of the discussions set
out by the trial court. The trial court on the issues of whether
the plaintiffs were ready and willing to perform their part of
the contract and on the issue of limitation has held against
them.
5.1 At this stage, we therefore need to consider the terms
and conditions of the agreement to sell. The agreement to sell
is on record which is dated 27.08.1993. Reading of the
agreement would indicate that an oral agreement took place
between the parties on 28.06.1993 for the purchase of land by
the appellants. In furtherance thereof, the agreement to sell
was executed on 27.08.1993 for a total consideration amount
of Rs.60,58,845/- out of which Rs.6,05,885/- came to be paid
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at the time of the execution of the agreement to sell. Reading
conditions no. 2 to 4 and 6, 7 and 11 of the agreement would
show that the land was under reservation and it was the
responsibility of the appellants to get the land dereserved. A
fixed time limit upto 31.10.1993 was set out. The agreement
clearly stipulated that advance paid towards consideration
was given as security and on non performance, that amount
will entail forfeiture.
5.2 It is clear from the recitals in the agreement to sell that
time begins to run from June 1983 when an oral agreement to
enter into the transaction was conceived and sealed. The
dereservation was to be done by the plaintiffs at their costs
and that it was to be done within four months from June 1993.
The date for such exercise was an outer limit of 31.10.1993.
The exchange of letter only extended the time for
performance of the contract till 31.12.1993. The remaining
amount of Rs.54,52,900/- had to be paid by 31.10.1993 and
thereafter by 31.12.1993.
5.3 Mark 17/1 is a letter dated 10.10.1993 issued by the
appellant no. 1 requesting that the time be extended by a
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further period of four weeks. The reasons set out for
extension are that the time be treated as extended from the
date of signing the agreement, that on account of lack of
financial capacity the appellants had financial trouble and the
process of getting the release was going to take about three to
four months. Ex.146 is a letter of the society respondent no. 1
extending the time of agreement to sell for a further period of
two months i.e. upto 31.12.1993. Reliance placed on the
communication dated 12.11.1993 Ex. 157 by which the
revenue department had informed the Collector that the land
had been released from acquisition categorically was a
declaration releasing the land from reservation making it free
for transfer.
5.4 During the course of arguments, the notification dated
17.05.2001 has been placed on record which indicates that on
29.02.1996 the Government of Gujarat had published the first
draft revised development plan calling for objections and
thereafter the land was again put under reservation by virtue
of the notification of 1996. On 28.07.1997, the respondent
society communicated to SUDA requesting for getting the
land dereserved. Though the appellants would rely on this
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letter to contend that the reservation process was in pursuit,
till 05.05.2001 there was no communication from the plaintiffs
to show that they were ready and willing to perform their part
of the contract. In fact, if the letter dated 05.05.2001 Ex. 158
is read, it indicates that the appellants plaintiffs had still
asked for time to pay the amount of Rs.25 lakhs over a period
of six months which obviously the trial court found to indicate
lack of readiness and willingness to pay on the part of the
plaintiffs.
5.5 The contention of the learned counsel for the appellants
relying on the decision to indicate that in case of immovable
property time is not the essence of the contract, cannot be
accepted. Reading the terms of the contract would show that
an oral agreement was entered into between the parties on
28.06.1993. The agreement to sell was signed in August 1993
which indicated that as per the oral agreement, the outer limit
for obtaining dereservation was 31.10.1993. Time limit was
extended only upto 31.12.1993.
5.6 Reading the terms of the contract therefore it is borne
out that an outer time limit was fixed and in the event there
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was failure to perform, the advance consideration that was
received was liable to be forfeited. It cannot be accepted
even if it is so pleaded that time was not the essence of the
contract. When an extension application was moved on
10.10.1993, the time was extended only till 31.12.1993.
Pressing into service the letter dated 28.07.1997 to suggest
that time was not the essence of contract is misconceived and
as set out by the trial court the trial court did not agree with
the submission and in our opinion rightly so, that even after
the letter of 1997 there was nothing on record by way of
communications for a period of four years by the plaintiffs to
suggest that the period of contract was extended. Except for
a letter on 05.05.2001, there was complete silence on behalf
of the appellants with regard to their readiness and
willingness to perform their part of the contract.
6. Considerable arguments have been made by the learned
counsels for the respective parties on the question whether in
the case of immovable properties, time is not the essence of
the contract. Relevant recitals which have been produced in
the earlier part of this judgment would indicate that as per the
terms of the contract when read with the letter dated
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27.10.1993 pursuant to the request made by the appellant
vide letter dated 10.10.1993 (Mark 17/1) the society extended
the time limit upto 31.12.1993 only i.e. only for a further
period of two months upto 31.12.1993.
6.1 From the letter dated 12.11.1993 at Ex. 157, what is
evident is that the revenue department released the land from
acquisition and thereby making it free for transfer. When this
is appreciated with the letter dated 10.10.1993 what is
indicative is that there was no intention of the plaintiff to
execute the sale. More than three years thereafter on
29.02.1996, the first Draft Revised Development Plan was
published and proposals were made for reservation in various
parcels of land under the jurisdiction of SUDA when the
subject land was once again put in reservation by the
notification under reference.
6.2 On 28.07.1997, the society requested for dereservation.
Though it is the case of the appellant that this letter at Ex.
147 was written under their instructions there is no evidence
brought over to substantiate this. The notification produced
by the learned Senior Advocate Shri Deven Parikh dated
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17.05.2001 Ex. 263 indicates that dereservation of lands took
place in the natural course and obviously the respondents on
09.06.2001 communicated their stand that time for
performance of the contract was already over.
6.3 That time was the essence of the contract is evident
from the examination-in-chief and cross examination that they
were aware of the fact that dereservation had to be removed
within four months' time. The question that needs to be
decided as a consequence of the issue of time being the
essence of the contract is the issue regarding limitation as
both issues are intermingled and mixed.
6.4 Relevant provisions of the Contract Act and the
Limitation Act have been read and relied upon by the
respective counsels. Section 55 of the Contract Act deals with
the issue of effect of failure to perform a contract at a fixed
time in which, time is essential. Though it may be true that in
case of sale of immovable property time may never be
regarded as essence of the contract but when on examination
of the terms of the agreement, it is ascertained that under the
terms of the contract, the parties named a specific time within
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which completion was to take place. The intention to make
time the essence of the contract as expressed in the
unequivocal language of the terms is evident.
6.5 The analysis of evidence would indicate that there was a
clear intention of parties about time. In the case of
immovable properties, the principle that time is not the
essence is and cannot continue to be a presumption which can
be of use in the present economic scenario or in context of the
period in question.
6.6 From the evidence on record what also emerges is that
prior to signing of the agreement to sell in August 1993, an
oral understanding was reached; that the terms were
discussed between the parties where the plaintiffs -
appellants willing took upon themselves the burden of
obtaining dereservation within the time stipulated in the
agreement. From the conditions of the agreement spelt out,
the parties here had expressly agreed to the fact that time is
to be the essence of the contract.
6.7 In the case of Anandram Mangturam (supra), the
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Bombay High Court considering the provisions of Section 55
of the Contract Act held that the mere fact that the contract
was not put to an end did not entail a further consequence
that time for performance of contract was automatically
extended. The relevant portion of the decision reads as
under:
"In this case, in my opinion, there is not even
a basis of facts to support the argument of Mr.
Desai, because at no time did the defendants
request the plaintiff to forbear from exercising his
rights and asking for delivery under the contract;
on, the contrary, their whole attitude has been that
they were only bound to deliver the goods as and
when they received them from their vendors.
Therefore really throughout the correspondence
they were asserting their right not to be bound to
give delivery of the contract goods until they had
received them from their vendors. Assuming that
there was a request by the defendants to the
plaintiff to forbear, I do not find in the
correspondence at any stage or at any time any
compliance with that request. Assuming this was a
request to forbear, what the defendants wanted
was a forbearance till they received the goods from
their vendors, and the emphatic and categorical
answer given by the plaintiff was that he wanted
the goods to be delivered within a short time.
Therefore it seems to me impossible to hold that
having turned down the request of the defendants
to forbear, it was open to the plaintiff by his
unilateral act to extend time for performance and
come to Court and say : I have now repudiated the
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contract and I shall fix the time according to my
choice.
Mr. Desai has argued that if there is one thing
that the correspondence showed is that both the
parties considered the contract alive and
subsisting. If by that expression is meant that the
plaintiff had not exercised his option under Section
55 of the Indian Contract Act to put an end to the
contract Mr. Desai is right; but the mere fact that
the contract was not put an end to did not entail
the further consequence that the time for the
performance of the contract was automatically
extended."
6.8 From the facts on hand, what is evident is that an oral
agreement was made in June 1993 for obtaining dereservation
within four months i.e. by 31.10.1993. That time was then
extended only upto 31.12.1993. Evidently, the appellants
failed to perform their part at the time fixed in the contract.
The appellants then cannot argue that because of the mere
fact that the contract was not expressly put to an end the time
for performance of the contract was automatically extended.
Thus, when both the parties meant that time was to be the
essence of the contract and the time limit for fixing the
reservation and getting the sale deed executed was fixed, the
time limit expired on 31.12.1993. For a suit for specific
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performance, time limit is three years and the same would
commence from the date fixed for performance i.e. December
1993 whereas the suit was filed in 2001, once the contract
expired on 31.12.1993 and therefore there was no
requirement of law to communicate on the date of expiry of
time. The communication of 09.06.2001 cannot therefore be
termed as the date of refusal also for the purposes of
limitation. The communication of refusal dated 09.06.2001
also cannot mean that the extension of the contract can be
inferred or implied. The contention of the learned counsel for
the appellants that since dereservation was dependent upon
several factors and failure thereof cannot work to the
disadvantage of the appellants cannot be accepted. The letter
of 09.06.2001 cannot be treated as a case of variation in the
date of performance by express representation. At the cost of
reiteration, when the terms of the agreement to sell are read
in the entirety, the language makes it clear that time was the
essence and failure to perform would lead to forfeiture, if not
performed within the time stipulated.
7. Coming to the provisions of the Specific Relief Act,
particularly, Sections 16, 20 etc., the discussion of evidence
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indicates that the appellants failed to aver and prove that they
were ready and willing to perform the essential terms of
contract. The continuous readiness and willingness is a
condition precedent and the evidence placed before the trial
court indicates that even when extension was sought, it was
the case of the plaintiffs - appellants that they needed more
time as the business was slack. Moreover also, what was
explicit from the letter of 05.05.2001 was that even three
years after 1998, they still wanted time of over six months to
pay installments of Rs.25 lakhs over a period. If the
discretion as argued was to be exercised in favour of the
appellants by accepting their plea that time was not the
essence of the contract then the significance of time limits
stipulated in the agreements would lose its significance or
relevance and even if we were to presume time being of no
essence, the discretionary jurisdiction cannot be exercised in
favour of the appellants who have failed to file suits within
reasonable time.
7.1 The analysis of the evidence on record and the
discussion thereof made by the trial court make it clear that
the contract was strictly conditioned on a time frame. On a
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reading of Article 54 of the Limitation Act what is apparent is
that it provides for two consequences in a case of there being
a fixed time period of performance which is not the case here.
It is only in a case where the time period of performance is
not fixed that a purchaser can take recourse to an issue that a
reply would extend the period of limitation. Here that plea
cannot be and is not available to the appellants.
7.2 From the communications on record, it has come to be
proved that once essential terms of the contract are violated,
not only Sections 16(c) and 20 of the Specific Relief Act do not
come to the rescue of the appellants but even on account of
the time being the essence the suit is barred by limitation.
7.3 Further on the question of readiness and willingness to
perform, in accordance with Section 16(c) of the Specific
Relief Act, it is the plaintiffs who have to aver and prove that
they are ready and willing to perform their part of the
contract. In the case of U.N. Krishnamurthy (since
deceased) thru. Lrs. (supra), considering section 16 of the
Act, the Apex Court has held as under:
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"24. Section 16 (c) of the Specific Relief Act,
1963 bars the relief of specific performance of a
contract in favour of a person, who fails to aver and
prove his readiness and willingness to perform his
part of contract. In view of Explanation (i) to clause
(c) of Section 16, it may not be essential for the
plaintiff to actually tender money to the defendant
or to deposit money in Court, except when so
directed by the Court, to prove readiness and
willingness to perform the essential terms of a
contract, which involves payment of money.
However, explanation (ii) says the plaintiff must
aver performance or readiness and willingness to
perform the contract according to its true
construction.
25. To aver and prove readiness and willingness to
perform an obligation to pay money, in terms of a
contract, the plaintiff would have to make specific
statements in the plaint and adduce evidence to
show availability of funds to make payment in
terms of the contract in time. In other words, 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. If the plaintiff does not have sufficient
funds with him to discharge his obligations in
terms of a contract, which requires payment of
money, the plaintiff would have to specifically plead
how the funds would be available to him. To cite an
example, the plaintiff may aver and prove, by
adducing evidence, an arrangement with a
financier for disbursement of adequate funds for
timely compliance with the terms and conditions of
a contract involving payment of money.
26. In Man Kaur v. Hartar Singh Sangha, (2010) 10
SCC 512 this Court held that:
"40. ...A person who fails to aver and prove
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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 the terms the
performance of which has been prevented or
waived by the defendant) is barred from
claiming specific performance. Therefore,
even assuming that the defendant had
committed breach, if the plaintiff fails to aver
in the plaint or prove that he was always
ready and willing to perform the essential
terms of contract which are required to be
performed by him (other than the terms the
performance of which has been prevented or
waived by the plaintiff), there is a bar to
specific performance in his favour. Therefore,
the assumption of the respondent that
readiness and willingness on the part of the
plaintiff is something which need not be
proved, if the plaintiff is able to establish that
the defendant refused to execute the sale
deed and thereby committed breach, is not
correct. Let us give an example. Take a case
where there is a contract for sale for a
consideration of Rs. 10 lakhs and earnest
money of Rs. 1 lakh was paid and the vendor
wrongly refuses to execute the sale deed
unless the purchaser is ready to pay Rs. 15
lakhs. In such a case there is a clear breach
by the defendant. But in that case, if the
plaintiff did not have the balance Rs. 9 lakhs
(and the money required for stamp duty and
registration) or the capacity to arrange and
pay such money, when the contract had to be
performed, the plaintiff will not be entitled to
specific performance, even if he proves
breach by the defendant, as he was not "ready
and willing" to perform his obligations."
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27. In Pt. Prem Raj v. D.L.F. Housing and
Construction (Private) Ltd. And Anr., AIR 1968 SC
1355 cited by Mr. Venugopal, this Court speaking
through Ramaswamy J. held that "it is well-settled
that in a suit for specific performance the plaintiff
should allege that he is ready and willing to
perform his part of the contract..." and if the fact is
traversed, he is required to prove a continuous
readiness and willingness from the date of the
contract to the time of the hearing, to perform the
contract on his part. For such conclusion the
learned Judge relied upon the opinion of Lord
Blanesburgh, in Ardeshir Mama v. Flora Sassoon,
AIR 1928 PC 208.
28. In D.L.F. Housing and Construction (Pvt.) Ltd.
(supra), in the absence of an averment on the part
of the Plaintiff in the plaint, that he was ready and
willing to perform his part of the contract, it was
held that the Plaintiff had no cause of action so far
as the relief for Specific Performance was
concerned. In this case, of course, there is an
averment in the plaint that the Respondent Plaintiff
was all along ready and willing to perform his
obligations under the contract. The question is
whether the Respondent Plaintiff had proved his
readiness and willingness to perform his
obligations under the contract.
29. In N.P. Thirugnanam v. Dr. R. Jagan Mohan
Rao and Ors., (1995) 5 SCC 115 this Court
reiterated that Section 16(c) of the Specific Relief
Act, 1963 envisages that the 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 were to be performed
by him other than those terms, the performance of
which has been prevented or waived by the
Defendant. In N.P. Thirugnanam (supra) this Court
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said that the continuous readiness and willingness
on the part of the Plaintiff was a condition
precedent for grant of the relief of Specific
Performance.
30. This Court, in effect, held that for determining
whether the Plaintiff was ready and willing to
perform his part of the agreement it is necessary
for the Court to consider the conduct of the
Plaintiff prior and subsequent to filing the suit for
specific performance. The relevant part of the
judgment is extracted hereinbelow:-
"5. .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."
31. In Umabai v. Nilkanth Dhondiba Chavan,
(2005) 6 SCC 243 this Court held that a finding as
to whether the Plaintiffs were all along and still
ready and willing to perform their part of the
contract, was a mandatory requirement under
Section 16(c) of the Specific Relief Act. The Court
would necessarily have to arrive at the finding that
the Plaintiff all along were, and still are ready and
also willing to perform their part of the contract,
taking into account the entirety of the pleadings as
also the evidence brought on record. To quote this
Court:-
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"So far there being a plea that they were
ready and willing to perform their part of the
contract is there in the pleading, we have no
hesitation to conclude, that this by itself is not
sufficient to hold that the appellants were
ready and willing in terms of Section 16(c) of
the Specific Relief Act. This requires not only
such plea but also proof of the same. Now
examining the first of the two circumstances,
how could mere filing of this suit, after
exemption was granted be a circumstance
about willingness or readiness of the plaintiff.
This at the most could be the desire of the
plaintiff to have this property. It may be for
such a desire this suit was filed raising such a
plea. But Section 16(c) of the said Act makes
it clear that mere plea is not sufficient, it has
to be proved."
32. In K.S. Vidyanadam v. Vairavan, (1997) 3 SCC
1 Justice B.P. Jeevan Reddy said that grant of the
relief of specific performance is discretionary and
the Court is not bound to grant it. This Court
further held that though time is not of essence to a
contract relating to transfer of property, such
contracts need to be completed within a reasonable
time period. Thus the time element cannot be
completely ignored.
33. In a suit for Specific Performance of a contract,
the Court is required to pose unto itself the
following questions, namely:-
(i) Whether there is a valid agreement of sale
binding on both the vendor and the vendee
and
(ii) Whether the Plaintiff has all along been
and still is ready and willing to perform his
part of the contract as envisaged under
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Section 16(c) of the Specific Relief Act, 1963 .
34. There is a distinction between readiness and
willingness to perform the contract and both
ingredients are necessary for the relief of Specific
Performance. In His Holiness Acharya Swami
Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC
526 cited by Mr. Venugopal, this Court said that
there was a difference between readiness and
willingness to perform a contract. While readiness
means the capacity of the Plaintiff to perform the
contract which would include his financial position,
willingness relates to the conduct of the Plaintiff.
The same view was taken by this Court in Kalawati
v. Rakesh Kumar, (2018) 3 SCC 658.
35. Even in a first appeal, the first Appellate Court
is duty bound to examine whether there was
continuous readiness and willingness on the part of
the Plaintiff to perform the contract. This
proposition finds support from Balraj Taneja v.
Sunil Madan, (1999) 8 SCC 396 and H.P. Pyarejan
v. Dasappa, (2006) 2 SCC 496 where this Court
approved the views taken by the Privy Council in
Ardeshir Mama v. Flora Sassoon, AIR 1928 PC 208.
36. In Malluru Mallappa v. Kuruvathappa, (2020) 4
SCC 313 this Court observed and held:-
"13. It is a settled position of law that an
appeal is a continuation of the proceedings of
the original court. Ordinarily, the appellate
jurisdiction involves a rehearing on law as
well as on fact and is invoked by an aggrieved
person. The first appeal is a valuable right of
the appellant and therein all questions of fact
and law decided by the trial court are open
for reconsideration. Therefore, the first
appellate court is required to address itself to
all the issues and decide the case by giving
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reasons. The court of first appeal must record
its findings only after dealing with all issues
of law as well as fact and with the evidence,
oral as well as documentary, led by the
parties. The judgment of the first appellate
court must display conscious application of
mind and record findings supported by
reasons on all issues and contentions [see :
Santosh Hazariv. Purushottam Tiwari
[Santosh Hazari v. Purushottam Tiwari,
(2001) 3 SCC 179] , Madhukar v. Sangram
[Madhukar v. Sangram, (2001) 4 SCC 756] ,
B.M. Narayana Gowda v. Shanthamma [B.M.
Narayana Gowda v. Shanthamma, (2011) 15
SCC 476 : (2014) 2 SCC (Civ) 619] , H.K.N.
Swami v. Irshad Basith [H.K.N. Swami v.
Irshad Basith, (2005) 10 SCC 243] and Sri
Raja Lakshmi Dyeing Works v. Rangaswamy
Chettiar [Sri Raja Lakshmi Dyeing Works v.
Rangaswamy, (1980) 4 SCC 259]]
14. A first appeal under Section 96 CPC is
entirely different from a second appeal under
Section 100. Section 100 expressly bars
second appeal unless a question of law is
involved in a case and the question of law so
involved is substantial in nature.
18. It is clear from the above provisions and
the decisions of this Court that the judgment
of the first appellate court has to set out
points for determination, record the decision
thereon and give its own reasons. Even when
the first appellate court affirms the judgment
of the trial court, it is required to comply with
the requirement of Order 41 Rule 31 and non-
observance of this requirement leads to
infirmity in the judgment of the first appellate
court. No doubt, when the appellate court
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agrees with the views of the trial court on
evidence, it need not restate effect of
evidence or reiterate reasons given by the
trial court. Expression of a general agreement
with the reasons given by the trial court
would ordinarily suffice.
37. In H.P. Pyarejan v. Dasappa (supra), Justice
Arijit Pasayat speaking for this Court reversed the
judgment of the High Court holding that High
Court did not provide reasoning for its conclusion
that Plaintiff was ready and willing to perform his
part of contract. To arrive at such conclusion the
Court had relied upon Cort v. Ambergate etc. and
Rly. Co., (1851) 117 ER 1229 where Lord Campbell
observed that in common sense, the meaning of
such an averment of readiness and willingness
must be that the non-completion of contract was
not the fault of the Plaintiff.
38. In this case, we cannot overlook the fact that
the suit property is located in the industrial town of
Hosur located about 30/40 kms. from Bengaluru.
The Court is obliged to take judicial notice of the
phenomenal rise in the price of real estate in
Hosur. The proposition finds support from case
reported in K.S. Vidyanadam v. Vairavan (supra).
To quote this Court "we cannot be oblivious to
reality - and the reality is constant and continuous
rise in the values of urban properties -fuelled by
large scale migration of people from rural areas to
urban centres and by inflation."
39. Mr. Venugopal argued that the Plaintiff had
only paid an insignificant amount of Rs.10,001/- as
advance when the consideration was
Rs.15,10,000/-. Having paid an insignificant
amount the Plaintiff was not entitled to
discretionary equitable relief of Specific
Performance, as observed by this Court in
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Saradamani Kandappan v. S. Rajalakshmi, (2011)
12 SCC 18. The relevant paragraph of the
judgment of this Court is set out hereinbelow:-
"37. The reality arising from this economic
change cannot continue to be ignored in
deciding cases relating to specific
performance. The steep increase in prices is a
circumstance which makes it inequitable to
grant the relief of specific performance where
the purchaser does not take steps to complete
the sale within the agreed period, and the
vendor has not been responsible for any delay
or non-performance. A purchaser can no
longer take shelter under the principle that
time is not of essence in performance of
contracts relating to immovable property, to
cover his delays, laches, breaches and "non-
readiness". The precedents from an era, when
high inflation was unknown, holding that time
is not of the essence of the contract in regard
to immovable properties, may no longer
apply, not because the principle laid down
therein is unsound or erroneous, but the
circumstances that existed when the said
principle was evolved, no longer exist. In
these days of galloping increases in prices of
immovable properties, to hold that a vendor
who took an earnest money of say about 10%
of the sale price and agreed for three months
or four months as the period for performance,
did not intend that time should be the
essence, will be a cruel joke on him, and will
result in injustice. Adding to the misery is the
delay in disposal of cases relating to specific
performance, as suits and appeals therefrom
routinely take two to three decades to attain
finality. As a result, an owner agreeing to sell
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a property for rupees one lakh and receiving
rupees ten thousand as advance may be
required to execute a sale deed a quarter
century later by receiving the remaining
rupees ninety thousand, when the property
value has risen to a crore of rupees."
40. As argued by Mr. Venugopal, the fact that the
suit had been filed after three years, just before
expiry of the period of limitation, was also a ground
to decline the Respondent Plaintiff the equitable
relief of Specific Performance for purchase of
immovable property. Mr. Venugopal's argument
finds support from the judgments of this Court in
P.R. Deb and Associates v. Sunanda Roy, (1996) 4
SCC 423; K.S. Vidyanadam v. Vairavan, (1997) 3
SCC 1; Manjunath Anandappa v. Tammanasa,
(2003) 10 SCC 390, Azhar Sultana v. B. Rajamani,
(2009) 17 SCC 27; Saradamani Kandappan v. S.
Rajalakshmi, (2011) 12 SCC 18.
41. In K.S. Vidyanadam v. Vairavan (supra) this
Court held:
"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 timelimits stipulated in
the agreement for doing one or the other
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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 [(1993) 1 SCC 519] : (SCC
p. 528, para 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...""
7.4 On reading the above decision, it is clear that it is well
settled that in a suit for specific performance, the plaintiff
should aver and prove that he is ready and willing to perform
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his part of the contract. He is required to prove a continuous
readiness and willingness from the date of the contract. The
evidence on hand would indicate that when two letters dated
10.10.1993 and 05.05.2001 are read the first letter would
indicate that the plaintiffs wanted time for over six months so
as to overcome the slackness in business and the letter dated
05.05.2001 indicates that they were willing to pay Rs. 25
lakhs, however over a period of six months. Therefore, the
trial court in our opinion rightly held that there was no
readiness and willingness to perform the contract and we
would add that these documents would indicate that they
were being pressed into service only to overcome the startling
fact of the parties being ad idem on the time being the
essence of the contract which was not extended beyond
31.12.1993.
7.5 The release of the land from the acquisition proceedings
did take place in the month of November, 1993, however, the
plaintiffs did not perform and execute the contract till
31.12.1993. Thereafter, there is no written document to
suggest that time was extended by the
respondents/appellants. No clause of renewal of the
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agreement based on expiry of time limit is shown in the
agreement which could take the court to opine that time was
not the essence of the contract. Therefore, it cannot be
concluded that there was any contractual relationship
between the parties post December 1993 either in the form of
written communication or conduct .
8. On the question of discretionary relief in context of
Sections 16 & 20 of the Specific Relief Act, read with Section
55 of the Contract Act, it is clear that though there was a
clear stipulation in the agreement to sell, that dereservation
shall be obtained latest by 31.12.1993, that was not done
which therefore did not automatically entail extension of time.
8.1 Consequential to this, the trial court in our opinion
having held that time was the essence of the contract i.e. upto
31.12.1993, a suit for specific performance had to be brought
within three years from 31.12.1993, whereas it was filed
seven years hence on 03.07.2001. It will be apt to consider
the findings of the trial court on the issue of limitation where
the trial court has held as under:
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"In light of above legal position, looking to the
facts and circumstances of this case, the following
things become come out from the records.
(i) In this case, as per admitted suit agreement,
there is specific dates were fixed by the parties to
perform certain acts.
(ii) Neither, the plaintiffs nor defendant no. 1 to 3
has taken any objection during entire proceeding of
this suit in respect of any conditions of contract or
any kinds of illegalities of any conditions of
contract. On the contrary, both the side were
specifically admitted each and every conditions and
contents of the suit agreement through their
pleadings as well as their evidences.
Therefore, from records it's become clear that in
this suit, dates were fixed by the parties with
mutual free consent to perform certain act as
mention in suit agreement.
(iii) Moreover, as per discussed earlier, in this
judgment, there is no evidence is on record to
establish that time motion in suit agreement was
extended beyond 31st December, 1993.
(iv) Moreover, as per discussion in para 17 of this
judgment, it's become clear that time was essence
of the suit contract.
Above all the circumstances, makes clear that
whe e particular time and date were fixed for
performance of suit agreement in such a
circumstances, cause of action to file any civil suit
for specific performance, limitation would
commence from the date fixed for performance and
in the light of above discussion as well as facts and
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circumstances of this suit, I do believe that in this
case to file any civil suit for specific performance
cause of action was arise from the date of 31st
December 1993 and against this, the plaintiff has
filed this suit after more than 7 years in the year of
2001. There- -fore, I do believe that the plaintiff
suit is not filed within the limitation and it is filed
after the period of prescribed limitation and same
is hits by Sec.3 of law of limitation and require to
dismiss on this ground alone.
In above all the circumstances, I am not
agreed with the submission of plaintiffs' aide and
after holding that the plaintiffs' suit is barred by
Law of Limitation, I decided issue no.8 in in the
Affirmative."
8.2 In the case of Urvashi Aggarwal (supra), the Apex
Court considering the provisions of Article 54 of the Schedule
to the Limitation Act read with Section 20 of the Specific
Relief Act in paragraphs no. 10 to 15 held as under:
"10. There are essentially two points that arise for
our consideration in this case. The first relates to
limitation. A specific date i.e. 31.03.1975 was fixed
for performance of the Agreement, i.e. execution of
the sale deed. As per Article 54 of the Schedule to
the Limitation Act, when a date is fixed for
performance of the contract, the period of
limitation is three years from such date. The cause
of action has arisen on 31.03.1975 and the suit
ought to have been filed within three years from
that date. Admittedly, the suit was filed only in the
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year 1987. However, the submission of the
Plaintiffs is that the date fixed for performance of
the Agreement stood extended by the conduct of
the parties. It was submitted that even after
31.03.1975, the Defendants were pursuing the
application filed for permission before the L&DO
with the cooperation of the Plaintiffs. The further
submission of the Plaintiffs is that without the
permission of the L&DO, the sale deed could not
have been executed on 31.03.1975. Therefore, the
Plaintiffs submit that the date fixed by the
agreement for the execution of the sale deed stood
extended. It is settled law that the vendee cannot
claim that the cause of action for filing the suit has
not arisen on the date fixed in the contract on the
ground that certain conditions in the contract have
not been complied with. (See: Fateh Nagpal & Co.
v. L.M. Nagpal, (2015) 8 SCC 390 Vishwa Nath
Sharma v. Shyam Shanker Goela, (2007) 10 SCC
595 and K. Raheja Constructions Ltd. v. Alliance
Ministries, 1995 Supp (3) SCC 17).
11. On a detailed consideration of the evidence on
record, the Courts below have come to the
conclusion that the clauses in the Agreement have
neither been amended nor varied. Merely because
the Defendants were pursuing the application filed
for permission before the L&DO, it cannot be said
that the date fixed for performance of the
Agreement stood extended. We agree with the
findings of the Courts below that the suit ought to
have been filed within three years from 31.03.1975
which was the date that was fixed by the
Agreement. The submission made on behalf of the
Plaintiffs that part II of Article 54 of the Schedule
to the Limitation Act applies to this case and that
the suit was filed within limitation as the refusal by
the Defendants was only in the year 1987 is not
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acceptable. Moreover, the Plaintiffs have not
performed their part of the Agreement within a
reasonable period. As per the Agreement, the
Plaintiffs were given the right to get the sale deed
executed through the Court in case of failure on
the part of the Defendants to execute the sale deed
by 31.03.1975. The Plaintiffs filed the suit 12 years
after the date fixed for performance. It is relevant
to refer to the judgment of this Court in
K.S.Vidyanadam v. Vairavan, (1997) 3 SCC 1
wherein it was held as follows:
"Even where time is not of the essence of the
contract, the plaintiffs must perform his part
of the contract within a reasonable time and
reasonable time should be determined by
looking at all the surrounding circumstances
including the express terms of the contract
and the nature of the property."
12. The silence maintained by the Plaintiffs for
about 12 years amounted to abandonment of the
Agreement and we approve the finding in this
regard made by the Trial Court.
13. The Courts below have found that the Plaintiffs
failed to prove their readiness and willingness to
perform their part of the Agreement. The failure on
the part of the Plaintiffs in not paying the monthly
instalments of Rs.7,000/-, not collecting the rent
from the tenant on the ground floor, not paying the
house tax etc., and not taking any action for
eviction of the tenant on the ground floor are some
of the points held against the Plaintiffs by the
Courts below which show that they were not ready
and willing to perform their part of the Agreement.
There is no compelling reason to re-examine the
said findings of fact by the Courts below in exercise
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of our jurisdiction under Article 136 of the
Constitution of India. We are in agreement with the
view of the Courts below that the Plaintiffs have
not proved their readiness and willingness to
perform their part of the Agreement and, therefore,
are not entitled to a decree of specific
performance.
14. The High Court directed a refund of
Rs.70,000/- which was paid by the Plaintiffs to the
Defendants in 1975 with interest at the rate of 24%
p.a.. In view of the peculiar facts of this case in
which the Plaintiffs have paid Rs.70,000/- way back
in 1975 and the steep increase in the price of the
property over time, we are of the considered
opinion that the Plaintiffs are entitled to a higher
amount than what was granted by the High Court.
Instead of the refund of Rs.70,000/- with interest at
the rate of 24% p.a., we direct the Defendants to
pay Rs. 2,00,00,000/- (Rupees Two Crores) to the
Plaintiffs within a period of eight weeks from today.
15. Subject to the above modification, the appeal is
dismissed."
8.3 The Apex Court thus held that it is settled law that
vendee cannot claim that the cause of action for filing the suit
has not arisen on the date fixed in the contract on the ground
that certain conditions in the contract are not being complied
with. The court has held that even where time is not of the
essence of the contract, the plaintiffs must perform their part
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of the contract within a reasonable time and reasonable time
should be determined by looking at all surrounding
circumstances including the express terms of the contract and
the nature of property.
9. Moreover, once the plaintiffs breached the contract and
reasonable time has run, then there is no question of
enforcing such a contract. Once it is shown that the plaintiffs
have committed breach of agreement of failing to perform
within a stipulated time or reasonable time, then it cannot be
held that he was ready and willing to perform his obligation
during the subsistence of contract. In such circumstances, as
per Section 16(C)(3) of the Specific Relief Act, the plaintiff
loses his right of specific performance of contract. This is also
held in the decision of the Apex Court in the case of
Anandram Mangturam (supra).
9.1 In the case of Haspur Road Cooperative Housing
Society Ltd. (supra), the Apex Court has held that if two
views are possible and one taken by the trial court being in
consonance with the material evidence available on record,
this court would not disturb such findings in exercise of
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appellate jurisdiction.
10. For the aforesaid reasons therefore, this appeal is
dismissed. Notice of admission is discharged.
FIRST APPEAL NO. 1341 OF 2011
1. This appeal has been filed by the subsequent purchaser
of the property. It appears that pending the suit an agreement
to sale was executed by plaintiff no. 2 in favour of original
defendant no. 4. The defendants no. 4 & 5 in turn executed a
sale deed in favour of defendants no. 6 & 7 who are the
appellants in First Appeal No. 1341 of 2011.
2. Considering the fact that the trial court had dismissed
the suit for specific performance and refused to grant such a
decree, once it was found that the plaintiffs had no right, title
or interest over the land, the first appeal filed by the
appellants who are subsequent purchasers and who had filed
a counter claim cannot be accepted. The trial court therefore
was of the opinion rightly on issues no. 11, 14 & 16 held that
the disputed agreements to sell dated 28.11.2003 and
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27.11.2004 were not enforceable.
3. For the reasons therefore and in light of the decision in
First Appeal No. 1161 of 2011, the aforesaid appeal also
stands dismissed. Notice of admission is discharged.
FURTHER ORDER:
Mr. Mehul Shah, learned Senior Counsel appearing with
Mr. S.K. Patel, learned advocate for the appellant requests
that the interim relief which was granted during the pendency
of the appeals may be continued. Mr. Rutul Desai, learned
counsel appearing for the respondent - original defendant
objects to the extension of interim relief. However,
considering the fact that during the pendency of the appeal of
the year 2011, the interim relief has continued, we deem it fit
to continue the interim relief till 20.03.2024.
(BIREN VAISHNAV, J)
(NISHA M. THAKORE,J)
DIVYA
