Dahu Sahu vs Satya Narayan Prasad
2022 Latest Caselaw 856 Jhar

             IN THE HIGH COURT OF JHARKHAND AT RANCHI
                           F.A. No. 158 of 2010

       Dahu Sahu                               ....     ....    Appellant

                                        Versus
   1. Satya Narayan Prasad
   2. Bank of Baroda, Irba Branch,
      P.O. Irba, P.S. Ormanjhi, Ranchi    ....  ....  Respondents
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CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY

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For the Appellant : Mr. Rahul Kumar Gupta, Advocate For the Respondents : Mr. Rajeev Ranjan Tiwary, Advocate

C.A.V. ON 15.02.2022 PRONOUNCED ON 04 .03.2022

1. The appellant is the defendant who has preferred the instant appeal against the judgment and decree passed by the learned Subordinate Judge-1, Ranchi in Title Suit No. 193 of 2007, whereby the suit of the plaintiff has been decreed for specific performance of contract.

2. The plaintiff's suit is for decree of specific performance of contract and for a direction to execute and register sale deed transferring the suit property mentioned in the schedule of the plaint, besides cost of the suit.

3. The case of the plaintiff is that defendant No. 1 was the owner of the suit property and possessed 2 kathas of land in village Pandra in District Ranchi, with two storied building under Khata No. 32, plot No. 486 and he offered to sell the aforesaid property at total price of Rs.26,51,000/- which was accepted and on the basis of contract in writing dated 5th October, 2006 an agreement was entered between both the sides. The plaintiff paid defendant No. 1, a sum of Rs.10,51,000/- as an advance towards the price of suit property and the balance amount of Rs.16,00,000/- was to be paid at the time of execution of the sale deed which was to be executed within three months from the date of agreement. It is the further case of the plaintiff that as per the terms of the agreement there was a loan taken by the defendant no.1 from defendant No. 2, Bank of Baroda on the suit property and the concerned deed of the suit property was with the Bank and it was assured by defendant No. 1 that he would clear the entire loan prior to the execution of the sale deed whereupon in December, 2006, the plaintiff requested the defendant No. 1 to clear the loan amount and to execute the sale deed. The defendant No. 1 agreed to execute the sale deed in the month of February, 2007 and demanded

Rs.2,00,000/- from the plaintiff out of the remaining amount of Rs.16,00,000/- which the plaintiff paid on 8th January, 2007. Again on 25.02.2007 and 15.03.2007 the plaintiff requested defendant No. 1 to execute the sale deed which was evaded and not heeded to whereupon a legal notice was sent to the plaintiff on 17.04.2007 with a reminder. On the request of defendant No. 1, the plaintiff on 9.07.2007 presented an account payee cheque bearing No. 032442 dated 9.6.2007 for Rs.4,93,135/- for clearing all the dues lying against Dahu Sao, even then the defendant No. 1 refused to execute the sale deed. When after presentation the plaintiff requested the defendant no.1 to acknowledge the amount in the agreement paper and execute the sale deed then the plaintiff was constrained to withdraw the account payee cheque.

4. The agreement of sale has not been denied by the contesting defendant number one. It is also not denied that there was an agreement to sell the suit property at a total price of Rs.26,51,400 out of which Rs.10,51,000/- was paid as advance and the balance amount of Rs.16,00,000/- was to be paid at the time of execution of the sale deed. It is also admitted that the plaintiff paid a sum of Rs.2,00,000/- on 8th January, 2007. It has, however, been pleaded in the written statement that the defendant was in need of amount within 90 days and on the assurance of the plaintiff that he would pay the entire amount within the stipulated period of three months and also will clear the loan amount taken by the defendant, the defendant entered into an agreement with the plaintiff for the sale of suit land. The two main pleas put forward is the urgency of the amount for which the defendant No.1 entered into agreement and the precondition that the plaintiff will clear the bank loan. Since balance amount was not paid in time and the bank loan was not cleared by the plaintiff, therefore the plaintiff failed to perform the reciprocal promise so as to entitle him to the relief claimed.

5. On the basis of the pleadings of the parties the following main issues were framed.

I. Is the suit maintainable in its present form?

II. Is there any valid cause of action for the suit?

III. Whether the suit is barred by law of limitation? IV. Whether the suit is bad for non-joinder and mis-joinder of parties? V. Whether the agreement in question is enforceable under the law?

VI. Whether the plaintiff is ready and willing to perform his part of contract?

VII. Whether the defendant is liable to execute and register the deed of sale in favour of the plaintiff?

VIII. Whether the defendants received some consideration amount from the plaintiff?

IX. To what relief or reliefs the plaintiff is found entitled to?

6. The learned Court below on the basis of the pleadings of the parties decreed the suit.

7. The instant appeal has been preferred mainly on the ground that the learned Court below failed to appreciate the clause of the agreement of sale which provided that the entire balance consideration amount was to be paid within a period of three months which was not complied by the plaintiff. Time was the essence of the agreement and specifically stipulated for in it which was violated by the plaintiff. Non-compliance made the agreement voidable in favour of defendant no.1 under section 55 of the Contract Act. Further, there was an express term in the agreement that the plaintiff will clear the bank loan within the stipulated period, but the plaintiff failed on this count as well. Reliance has been placed on (2014) 15 SCC 743 Telikicherla Sebibhusan (Dead) By LRs Vs. Kali Raja Rao wherein it was held that under Section 16( C) of the Specific Relief At,1963 specific performance of contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which he has been prevented or waived by the defendant.

8. The main point for the determination in the instant appeal is whether the plaintiff has performed the essential terms of contracts which were to be performed by him so as to entitle him to the discretionary relief?

9. It is argued on behalf of the respondent/plaintiff that it was the defendant who had to pay the loan amount, but few wordings in the agreement the defendant no.1 is being wrongly constructed to gain advantage. Time was not the conditions of the contract which will be evident from the acceptance of Rs.2,00,000/- beyond the stipulated period. With regard to the loan amount it is submitted though payment on behalf the plaintiff was

not within the understanding of the parties but it still they were ready to pay the amount and had also presented the cheque for payment of the loan amount to the bank, but when the plaintiff refused to acknowledge it in the agreement only then the payment was stopped.

10. The facts of the case turns on the agreement of sale (Ext. 1) which is the foundational document on the basis of which the suit has been filed for specific performance of contract. Under Section 91 of the Evidence Act, when the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. Section 92 of the Evidence Act excluded oral agreement when the term of contract has been reduced into writing. It has been held in (1996) 4 SCC 551 Tamil Nadu Electricity Board & Anr. Vs N. Raju Reddiar, once a contract is reduced to writing, by operation of Section 91 of the Evidence Act it is not open to any of the parties to seek to prove the terms of the contract with reference to some oral or other documentary evidence to find out the intention of the parties. Under Section 92 of the Evidence Act where the written instrument appears to contain the whole terms of the contract then parties to the contract are not entitled to lead any oral evidence to ascertain the terms of the contract. It is only when the written contract does not contain the whole of the agreement between the parties and there is any ambiguity then oral evidence is permissible to prove the other conditions which also must not be inconsistent with the written contract.

11. A plain reading of the agreement reveals the following relevant terms of agreement (Ext 2):

a. The agreement of sale dated 5.10.2006 is between the promisor first party Dahu Sahu (Defendant No.1) and promisee second party Satya Narayan Prasad (Plaintiff) for the sale of 2 katha of land and two storied house in village Pandra, District Ranchi, for consideration amount of Rs.26,51, 000/- out of which Rs.10, 51,000/- was given in advance by cheque.

b. The promisor was entering into an agreement for he was in need for money for an urgent work and the amount could not be mobilized by him through other sources. The promisee had agreed to purchase the schedule property at the rate as agreed upon.

c. The promisor had taken a loan on the scheduled land and which shall be repaid by the promisee and after getting the documents released from the bank and getting it verified and if any defect is found in the document then the promisee shall be entitled to the return of the advance amount with interest.

d. The sale deed shall be executed by a registered deed of sale within three months after making the payment of the balance amount.

12. For the specific performance of contract the plaintiff respondent filed the suit. It has been specifically averred in para eight of the plaint that the defendant number one had assured the plaintiff that he would clear the entire loan prior to the execution of the sale deed. Exhibit-3 is the legal notice dated 17.4.07 served on behalf of the plaintiff to the defendant No.1. wherein it has been stated as follows: "I, therefore, on behalf of my client request you to clear the bank loan and vacate the rented shop within a month from the receipt of this notice and informed my client to pay the rest amount which will be paid at the time of registration". The plaintiff (PW 1) has deposed in para 36 that at the time of agreement of sale he was aware that the suit property was mortgaged by the bank. In para 47 he has deposed that the period for making full payment in the agreement was three months.

13. From the above it is manifest that the express terms of agreement provided that the plaintiff will repay the bank loan and after verification of the documents shall make the payment within three months of the agreement. However, from the plaint, legal notice served on behalf of the plaintiff it is evident that the plaintiff refused to admit the liability to perform the reciprocal promise to pay the bank loan and insisted that the loan amount was to be paid by the defendant. The plea of the plaintiff is not sustainable in view of the express and emphatic language of the agreement of sale. The learned counsel on behalf of the appellant has relied on Telikicherla Sesibhushan v. Kalli Raja Rao, (2014) 15 SCC 743 wherein it has been held:

"8. Clause (c) of the Specific Relief Act, 1963 provides that specific performance of contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which he has been prevented or waived by the defendant. In the present case, as discussed above, due to the failure on the part of the appellant to repay the loan in terms of the agreement dated 10-5-1980 (Ext. A-1) and further considering the fact that not only the suit being OS No. 208 of 1981 filed by the creditor Bank was decreed against the debtor but it attained finality, the courts below have committed no error of law in refusing to decree the suit of the appellant for specific performance of contract".

It has been held in Surinder Kaur v. Bahadur Singh, (2019) 8 SCC

"13. Explanation (ii) to Section 16(c) of the Specific Relief Act lays down that it is incumbent on the party, who wants to enforce the specific performance of a contract, to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract. The plaintiff miserably failed to do insofar as payment of rent is concerned.

14. A perusal of Section 20 of the Specific Relief Act clearly indicates that the relief of specific performance is discretionary. Merely because the plaintiff is legally right, the court is not bound to grant him the relief. True it is, that the court while exercising its discretionary power is bound to exercise the same on established judicial principles and in a reasonable manner. Obviously, the discretion cannot be exercised in an arbitrary or whimsical manner. Sub-clause (c) of sub-section (2) of Section 20 provides that even if the contract is otherwise not voidable but the circumstances make it inequitable to enforce specific performance, the court can refuse to grant such discretionary relief. Explanation (2) to the section provides that the hardship has to be considered at the time of the contract, unless the hardship is brought in by the action of the plaintiff."

14. In view of the above, since the plaintiff/respondent failed to perform its part of promise and the term of agreement namely payment of the bank loan and final payment to be completed within three months of the agreement, I am of the considered view that the plaintiff is not entitled to the discretionary relief of specific performance of contract. The plaintiff acted in breach of the essential term of the agreement and therefore, cannot be entitled for the discretionary relief.

Under the circumstance, the judgment and decree passed by the learned Court below is set aside. The appeal is allowed with cost. Consequently, I.A. No. 3274 of 2014 stands disposed of.

(Gautam Kumar Choudhary, J.) Jharkhand High Court, Ranchi Dated the 4th March, 2022 AFR / AKT