Pradeep Kumar Singh vs Gulab Jain
2023 Latest Caselaw 4443 MP

                                1


IN THE HIGH COURT OF MADHYA PRADESH
            AT JABALPUR
                        BEFORE
     HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA
               ON THE 21st OF MARCH, 2023
                 SECOND APPEAL No. 2932 of 2022

BETWEEN:-

PRADEEP KUMAR SINGH S/O SHRI R.P. SINGH
AGED ABOUT ADULT, R/O A 68, SAIKUNJ,
PRAGATI NAGAR, NEAR RISHIPURAM PHASE-1,
BHOPAL (MP.) (MADHYA PRADESH)
                                                         .....APPELLANT
(BY SHRI PUSHPENDRA YADAV - ADVOCATE)

AND

1.    GULAB JAIN S/O LATE SHRI SABULAL JAIN
      R/O 126, B OLD ASHOKA GARDEN, BHOPAL
      (M.P.) (MADHYA PRADESH)

2.    STATE OF MADHYA PRADESH THROUGH
      COLLECTOR OLD SACHIVALAYA, BHOPAL
      (MADHYA PRADESH)
                                                      .....RESPONDENTS
(RESPONDENT NO.1 BY SHRI ABHISHEK TIWARI - ADVOCATE)
(RESPONDENT NO.2/STATE BY MS.SHANTI TIWARI - PANEL LAWYER)

"Reserved on : 16.03.2023"
"Pronounced on : 21.03.2023".
      This appeal having been heard and reserved for orders, coming on
for pronouncement this day, the court passed the following:
                             JUDGMENT

1. This Second Appeal under Section 100 of CPC has been filed against the Judgment and Decree dated 18-11-2022 passed by Principal

District Judge, Bhopal in RCA No. 96 of 2022 arising out of Judgment and Decree dated 30-7-2022 passed by 3rd Civil Judge Junior Division, Bhopal in RCS No 796A/2016.

2. The Appellant is the defendant who has lost his case from the Court of First Appellate Court.

3. The facts necessary for disposal of present appeal in short are that the plaintiff filed a suit for specific performance of contract pleading interalia that the defendant was the owner and in possession of agricultural land bearing Kh. No. 173/k area 0.15 acres, Kh. No. 296 area 0.8 acres, total area 0.23 acres situated in village Khajurikala, Tahsil Huzur, Distt. Bhopal, having purchased the same by registered sale deed dated 6-2-1995. The defendant got his name duly mutated in the revenue records. The defendant gave a proposal for sale of the disputed property and accordingly, a token money of Rs. 5,000 was paid and a public notice was published in the news paper on 13-2- 2000, expressing intention to purchase the land. When no objection was received, therefore, on 19-12-2000, an agreement to purchase was executed for a consideration amount of Rs. 1,15,000/-. An amount of Rs. 95,000/- was paid on 19-12-2000 in cash and a cheque of Rs. 15,000/- was given. Accordingly, the entire consideration amount was paid. The possession of the land was also given to the plaintiff. It was mentioned in the agreement that the plaintiff can get the sale deed executed as and when he desires. The plaintiff requested the defendant to execute the sale deed on various occasions, but the defendant on the pretext of shortage of time, said that possession has been given and time is not the essence of contract, therefore, the plaintiff also did not

insist for execution of the sale deed. Thus, the defendant avoided to execute the sale deed on number of occasions. On 28-3-2016, a general notice was once again got published in the news paper and since no objection was received and accordingly, the plaintiff made arrangements for money for execution of sale deed, but then the defendant refused to execute the sale deed and also extended a threat that the plaintiff must remove his possession. It was pleaded that the plaintiff is in possession of the land in dispute from 19-12-2000, i.e. after making payment of entire consideration amount and the defendant was continuously avoiding the execution of the sale deed and now he has refused to execute the sale deed. Accordingly, the suit for specific performance of contract was filed claiming that the cause of action arose for the first time on 19-12-2000 when the agreement to sell was executed and on 4-4-2016, when the plaintiff made police report regarding refusal by defendant to execute the sale deed and on 16-6- 2016, when the plaintiff sent a registered notice and on 22-6-2016, when reminder was sent by the plaintiff.

4. The defendant filed his written statement and took a preliminary objection that the suit has not been valued properly. According to Collector's guidelines, the market value of the disputed land is 1,11,60,000/- whereas the suit has been valued at Rs. 1,15,000/-. The suit has been filed after 16 years of agreement to sell. It was denied that possession was given by the defendant. It was denied that the plaintiff had requested the defendant on multiple occasions to execute the sale deed and the defendant avoided to execute the sale deed on the pretext that time is not essence of contract. It was denied that the

intention of the defendant became dishonest. It was denied that cause of action arose for the first time on 19-12-2000, 4-4-2016, 16-6-2016 and 22-6-2016. It was claimed that the agreement to sell is neither a registered document, nor has been executed on proper stamp papers. The plaintiff was not ready and willing to perform his part of contract.

5. The Trial Court after framing issues and recording evidence, dismissed the suit on the ground that the plaintiff has failed to plead and prove that he was ready and willing to perform his part of contract. It was also held that the suit was barred by time. It was also held that the plaintiff has failed to prove that the defendant is interfering with peaceful possession of the land in dispute.

6. Being aggrieved by Judgment and Decree passed by the Trial Court, the respondent preferred an appeal which has been allowed by the First Appellate Court and a decree for specific performance of contract has been passed.

7. Challenging the Judgment and Decree passed by the First Appellate Court, it is submitted by the Counsel for the Appellant, that the plaintiff has failed to prove his readiness and willingness to perform his part of contract. When time is not the essence, then the sale deed has to be executed within reasonable period. The respondent has failed to prove that he was in possession of funds for executing the sale deed. The suit is barred by time.

8. Per contra, it is submitted by the Counsel for the respondent that since, time was not the essence of contract, therefore, the cause of action would arise only when the defendant refuses to execute the sale deed and thus, contended that the suit filed by the plaintiff was within

the period of limitation and the plaintiff was always ready and willing to perform his part of contract. To buttress his contentions, the Counsel for the respondent has relied upon the judgment passed by the Supreme Court in the case of Ahmadsahab Abdul Mull (2) (Dead) through proposed L.Rs. Vs. Bibijan and others reported in (2009) 5 SCC 462, R.C. Chandiok and another Vs. Chuni Lal Sabharwal and others reported in (1970) 3 SCC 140, Sughar Singh Vs. Hari Singh (Dead) through L.Rs. and others reported in 2021 SCC OnLine SC 975 and R.K. Parvatharaj Gupta Vs. K.C. Jayadeva Reddy reported in (2006) 2 SCC 428.

9. Accordingly, this appeal was admitted on the following Substantial Questions of Law :

Whether the First Appellate Court erred in law in holding that the plaintiff was ready and willing to perform his part of contract ?

In view of the admission in police report (Ex. P.6), that the plaintiff was not in possession of the sufficient money to get the sale deed executed, whether the readiness and willingness on the part of the plaintiff within a reasonable period, can be presumed or not?

10. On the date, when the Appeal was admitted for hearing, the Counsel for the respondent, insisted, that this Court should hear the appeal finally and accordingly argued the matter finally.

11. Heard the learned Counsel for the parties.

12. Both the Courts below have given concurrent findings of facts that an agreement to sell was executed on 19-12-2000. Whether the First Appellate Court erred in law in holding that the plaintiff was ready and willing to perform his part of contract ?

13. The Appellant Pradeep Kumar Singh (D.W.1) has admitted the execution of the agreement to sell, Ex. P.1, and also admitted the receipt of Rs. 5000 + Rs. 95,000/- but claimed that the cheque of Rs 15,000/- had bounced but admitted that he had not availed any legal remedy for payment of Rs. 15,000/-.

14. In the entire plaint, it has not been pleaded by the plaintiff that he was in possession of funds for bearing the registration charges. There is no specific pleading regarding readiness and willingness of the plaintiff.

15. In his affidavit filed under Order 18 Rule 4 CPC, the plaintiff Gulab Jain (P.W.1) again stated that after execution of agreement to sell, he requested the defendant to execute the sale deed on various occasions, but the defendant on the pretext of shortage of time, said that possession has been given and time is not the essence of contract, therefore, the plaintiff also did not insist for the execution of the sale deed. The original agreement to sell is Ex. P.1, Receipt of consideration amount is Ex. P.2, Public Notice dated 13-12-2000 published in news paper is Ex. P.3, Notice dated 16-6-2016 is Ex. P.4, registered notice dated 22-6-2016 is Ex. P.5, Police Complaint is Ex. P.6, Public notice published in news paper is Ex. P.7, return of registered notice dated 16-6-2016 is Ex. P.8 and order of impounding passed by Collector of Stamps on 11-10-2017 is Ex. P.9.

16. He admitted in his cross examination that earlier he was running a photo studio and thereafter, he did the business of garments, but he was not getting any profit therefore, he closed his businesses and now for the last 2 years, he is unemployed. He admitted that he

had two bank accounts and the bank account of Bank of India, Marwadi Branch was closed about 7 years back. He further stated that after 15 days of execution of agreement to sell, he had requested the defendant to execute the sale deed, but the defendant avoided to execute the same and subsequently on various occasions, he requested the defendant, but he avoided to execute the sale deed. However, he claimed that he never realized that the defendant is not interested in executing the sale deed. Neither he refused, nor executed the sale deed. He admitted that he never requested the defendant either in writing or verbally to execute the sale deed by a particular date. He admitted that from the year 2000 to 2016, the defendant always avoided to execute the sale deed. He also admitted that during this period, he never availed any legal proceedings. In the year 2016, he met with the defendant for execution of sale deed. The market value of the disputed property in the year 2016 was denied by this witness for want of knowledge. However, he claimed that the vendor had informed him that the registration charges would be Rs. 11,00,000/- and he had made arrangements of the same. He admitted that aforementioned amount was not in his bank account, but claimed that he had made arrangements from 3-4 persons. He claimed that in the month of March 2016, the defendant had agreed to execute the sale deed but he never informed the defendant about the date of execution of sale deed. He lodged a police complaint on 4-4-2016. The defendant had specifically informed that he would alienate the disputed land at a higher rate. He denied that the defendant is in possession of the land in dispute, but also admitted that he is not having document to

show that he is in possession of the land in dispute. From 2000-2016, he never tried to verify about the registration charges.

17. The plaintiff has relied upon the police complaint, Ex. P.6. In this complaint it is specifically mentioned that because of shortage of funds, he could not execute the sale deed. Now his financial condition has improved, and accordingly he requested the defendant to execute the sale deed, but he is avoiding to execute the sale deed.

18. Thus, it is clear that from the year 2000 to 2016, the plaintiff was not in possession of funds to bear the registration charges.

19. The plaintiff Gulab Jain (P.W.1) in para 18 of his cross examination has admitted that he was not having Rs. 11,00,000/- in his bank account and he had made arrangements from 3-4 persons. However, he has not named and examined any witness to prove that he had arranged money from them. Even Gulab Jain (P.W.1) has not proved his bank account to show the source of money.

20. The plaintiff has examined Vaibhav Shrivas (P.W.3), who was working as Senior Asstt., SBI. He has proved the bank statement of Gulab Jain (P.W.1), Smt. Jai Kumari Jain and the bank statement of A/c No. 31624782772 as Ex. P.10, P.11 and P.12. He has stated that on 19-3-2016, an amount of Rs. 6,25,000/- was transferred from the account of plaintiff to the Bank Account No. 31624782772, Ex. P.10 and on the same day Smt. Jai Kumari Jain had transferred Rs. 3,49,200/- to the same bank account, Ex. P.11. However, on 30-4- 2016 from account no. 31624782772, Rs. 6,25,000/- were refunded in the account of the plaintiff Gulab Jain, Ex. P.12 and Rs. 3,49,200/-

were transferred in the account of Smt. Jai Kumari Jain on 3-5-2016, Ex. P.12.

21. However, the plaintiff has not examined the holder of Bank Account No. 31624782772 to prove the nature of such transactions. It is not out of place to mention here that the plaintiff had filed an affidavit of one Mohd. Badar Khan under Order 18 Rule 4 CPC but did not produce him for cross examination and immediately after examining Vaibhav Shrivas (P.W.3), the plaintiff closed his evidence. Therefore, the affidavit of Mohd. Badar Khan filed under Order 18 Rule 4 CPC cannot be read in evidence.

22. Thus, in view of the specific admission made by Gulab Jain (P.W.1) that he did not have money in his bank account and he had made arrangements from 3-4 persons, the bank transactions, Ex. P.10, P.11 and P.12 relied upon by the plaintiff cannot be treated as transactions for bearing the registration charges.

23. Section 16 of Specific Relief Act reads as under :

16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--

(a) who has obtained substituted performance of contract under Section 20; or

(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

(c) who fails to 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 has been prevented or waived by the defendant.

Explanation.--For the purposes of clause (c),--

(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 so directed by the court;

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

24. The Supreme Court in the case of Kamal Kumar v. Premlata Joshi, reported in (2019) 3 SCC 704 has held as under :

7. It is a settled principle of law that the grant of relief of specific performance is a discretionary and equitable relief. The material questions, which are required to be gone into for grant of the relief of specific performance, are: 7.1. First, whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property. 7.2. Second, whether the plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract. 7.3. Third, whether the plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract;

7.4. Fourth, whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extent if such relief is eventually granted to the plaintiff; 7.5. Lastly, whether the plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money, etc. and, if so, on what grounds.

8. In our opinion, the aforementioned questions are part of the statutory requirements [See Sections 16(c), 20, 21, 22, 23 of the Specific Relief Act, 1963 and Forms 47/48 of

Appendices A to C of the Code of Civil Procedure]. These requirements have to be properly pleaded by the parties in their respective pleadings and proved with the aid of evidence in accordance with law. It is only then the Court is entitled to exercise its discretion and accordingly grant or refuse the relief of specific performance depending upon the case made out by the parties on facts.

25. Thus, it is mandatory on the part of the plaintiff to prove his readiness and willingness in his plaint and evidence. The Supreme Court in the case of Ahmadsahab Abdul Mulla (2) (Supra) has held as under :

10. "Fixed" in essence means having final or crystallised form or character not subject to change or fluctuation.

11. The inevitable conclusion is that the expression "date fixed for the performance" is a crystallised notion. This is clear from the fact that the second part "time from which period begins to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on "when the plaintiff has notice that performance is refused". Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances.

26. As already held the plaintiff has not uttered a single word with regard to his readiness and willingness to perform his part of contract. When plaintiff Gulab Jain (P.W.1) has admitted that his business was not good, therefore, he was compelled to close the same and for the last 2 years he is unemployed, then the burden was on him to plead and prove that he was in possession of funds for bearing the registration

charges. There is not a single whisper in pleading in this regard. Even in evidence, Gulab Jain (P.W.1) has not stated that from 2000 to 2016, he was having funds for bearing registration charges. Even in para 18 of his cross-examination Gulab Jain (P.W.1) had admitted that he had no money in his bank account for bearing registration charges, but claimed that he had arranged from 3-4 persons, but did not name and examine any single person from whom he had arranged the money. The evidence of Vaibah Shrivas (P.W.3) will not come to the rescue of plaintiff as he has not examined the holder of Bank Account No. 31624782772. He has also not examined Jai Kumari Jain to prove the nature of transaction of Rs. 3,49,200/-. Further, Gulab Jain (P.W.1) has not stated in his evidence, that he had transferred an amount of Rs. 6,25,000/- for bearing the registration charges. Further in police report, Ex. P.6, the plaintiff had admitted that earlier sale deed could not be executed on account of shortage of funds.

27. So far as the judgment relied upon by the Counsel for the respondent in the case of R.C. Chandiok (Supra) is concerned, the same is distinguishable on facts. In the case of R.C. Chandiok (Supra), the Supreme Court had held that vendees were carrying out their business and there is nothing to indicate that they were not in a position to arrange for the remaining sum. However, in the present case, the respondent himself had admitted that he had closed his two businesses as he was not getting any profits and for the last 2 years he is unemployed.

28. So far as the judgment relied upon by the Counsel for the respondent in the case of Sughar Singh (Supra) is concerned, the

same is also distinguishable on facts. In the case of Sughar Singh (Supra), the Supreme Court in para 45 of the judgment has held that it is not necessary for the vendee to produce ready money but it is mandatory on his part to prove that he has means to generate consideration amount. However, in the present case, this Court has already held that the respondent was not even in a position to name any of the 3-4 persons, from whom he claimed to have made arrangements and none of them were examined.

29. In the case of R.K. Parvatharaja Gupta (Supra) it has been held that there cannot be any doubt whatsoever that in respect of a contract for sale of immovable property, time is not the essence of the contract, but the question as regards the conduct of the vendee must be considered in the backdrop of the events. In the present case, the vendee/respondent has already admitted that he was not in possession of funds for meeting out the registration and other allied charges. Therefore, it is clear that the respondent was not ready and willing to perform his part of contract.

30. Thus, it is held that the plaintiff Gulab Jain (P.W.1) was never in possession of money for bearing the registration charges and thus, he was never ready and willing to perform his part of contract. In view of the admission in police report (Ex. P.6), that the plaintiff was not in possession of the sufficient money to get the sale deed executed, whether the readiness and willingness on the part of the plaintiff within a reasonable period, can be presumed or not?

31. Now the next question for consideration is that whether the plaintiff can wait for unlimited period for execution of sale deed or he has to perform his part of contract within a reasonable period?

32. The Supreme Court in the case of Chand Rani v. Kamal Rani, reported in (1993) 1 SCC 519 has held as under :

25. From an analysis of the above case-law 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:

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.

33. The Supreme Court in the case of Saradamani Kandappan v. S. Rajalakshmi, reported in (2011) 12 SCC 18 has held as under :

36. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market values of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that grant of specific performance would not prejudice the vendor defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was comparatively very little inflation, in India.

The third quarter of the twentieth century saw a very slow

but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.

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 a property for rupees one lakh and received 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.

38. It is now well settled that laws, which may be reasonable and valid when made, can, with passage of time and consequential change in circumstances, become arbitrary and unreasonable. In Rattan Arya v. State of T.N. this Court held: (SCC pp. 389-90, para 4) "4. ... We must also observe here that whatever justification there may have been in 1973 when Section 30(ii) was amended by imposing a ceiling of Rs 400 on rent payable by tenants of residential buildings to entitle them to seek the protection of the Act, the passage of time has made the ceiling utterly unreal. We are entitled to take judicial notice of the enormous multifold increase of rents throughout the country, particularly in urban areas. It is common knowledge today that the accommodation which one could have possibly got for Rs 400 per month in 1973 will today cost at least five times more. In these days of universal, day-to-day escalation of rentals any ceiling such as that imposed by Section 30(ii) in 1973 can only be considered to be totally artificial and irrelevant today. As held by this Court in Motor General Traders v. State of A.P. a provision which was perfectly valid at the commencement of the Act could be challenged later on the ground of unconstitutionality and struck down on that basis. What was once a perfectly valid legislation, may in course of time, become discriminatory and liable to challenge on the ground of its being violative of Article 14."

39. In Malpe Vishwanath Acharya v. State of Maharashtra a three-Judge Bench of this Court considered the validity of determination of standard rent by freezing or pegging down the rent as on 1-9-1940 or as on the date of first letting, under Sections 5(10)(b), 7, 9(2)(b) and 12(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. This Court held that the said process of determination under the Act, which was reasonable when the law was made, became arbitrary and unreasonable in view of constant escalation of prices due to inflation and corresponding rise (sic fall) in

money value with the passage of time. This Court held: (SCC pp. 22-23, paras 29 & 31) "29. Insofar as social legislation, like the Rent Control Act is concerned, the law must strike a balance between rival interests and it should try to be just to all. The law ought not to be unjust to one and give a disproportionate benefit or protection to another section of the society. When there is shortage of accommodation it is desirable, nay, necessary that some protection should be given to the tenants in order to ensure that they are not exploited. At the same time such a law has to be revised periodically so as to ensure that a disproportionately larger benefit than the one which was intended is not given to the tenants. ...

* * *

31. Taking all the facts and circumstances into consideration we have no doubt that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable."

40. The principle underlying the said decisions with reference to statutes, would on the same logic, apply to decisions of courts also.

41. A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this Court in K.S. Vidyanadam v. Vairavan (by Jeevan Reddy, J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed: (SCC pp. 7 & 9, paras 10-11) "10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. ... in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades--particularly after 1973. ...

11. ... We cannot be oblivious to the 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. ... Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties--evolved in times when prices and values were stable and inflation was unknown--requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so." (emphasis supplied)

42. Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to a larger Bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.

43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam:

(i) The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.

(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.

(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. The courts will also "frown" upon suits which are not filed immediately after the breach/refusal. The fact that limitation

is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three-year period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part-performance, where equity shifts in favour of the purchaser.

34. The Supreme Court in the case of P.Daivasigamani vs S.Sambandan decided on 12 October, 2022 in C.A. No. 9006 of 2011 has held as under :

10. It cannot be gainsaid said that even though time is not considered as the essence of the contract in case of immoveable property and that the suit could be filed within three years as provided in Article 54 of the Limitation Act, the respondent - plaintiff had to perform his part of the contract within the reasonable time having regard to the term of the agreement prescribing the time limit. The time limit prescribed in the agreement cannot be ignored on the ground that time was not made the essence of the agreement or that the suit could be filed within three years from the date fixed for performance or from the date when the performance is refused by the vendor.........

(Underline supplied)

35. The Supreme Court in the case of Nanjappan v. Ramasamy, reported in (2015) 14 SCC 341 has held as under :

10. In a suit for specific performance, the plaintiff has to aver and prove with satisfactory evidence that he was always ready and willing to perform his part of contract at all material time as mandatorily required under Section 16(c) of the Specific Relief Act, 1963. The first appellate court and the High Court recorded findings that the plaintiff was always ready and willing to perform his part of the contract.

By a careful reading of the recitals in the agreement, the concurrent findings so recorded do not seem to reflect the

conduct of the parties. As per recitals in Ext. P-1 agreement dated 30-9-1987, an amount of Rs 25,000 was paid by the respondent-plaintiffs to the appellant-defendant. Balance amount of Rs 20,000 was to be paid within 2½ years thereafter and get the sale executed. In the second agreement of sale (Ext. P-2 dated 21-3-1990) it is stated that the plaintiffs were unable to pay the balance amount within the stipulated period and get the sale deed executed and therefore the second sale agreement was executed extending the period for execution of sale deed for a further period of three years. As could be seen from the recitals from Ext. P-2, the respondents were unable to pay the balance sale consideration and get the sale deed executed. It is pertinent to note that the time for performance of contract was extended again and again totalling period of eight years. Even though the first appellate court and the High Court recorded findings that the respondent-plaintiffs were ready and willing to perform their part of contract, the fact that time was extended for eight years is to be kept in view while considering the question whether discretion is to be exercised in favour of the respondent-plaintiffs.

11. Under Section 20 of the Specific Relief Act, grant of specific performance of contract is discretionary. Though the decree for specific performance is discretionary, yet the court is not bound to grant such a relief merely because it is lawful to do so. But the discretion of the court is not arbitrary, but sound and reasonable, guided by judicial principles of law and capable of correction by a court of appeal and should be properly exercised keeping in view the settled principles of law as envisaged in Section 20 of the Act. The jurisdiction of decreeing specific performance is a discretion of the court and it depends upon facts and circumstances of each case. The court would take into consideration circumstances of each case, conduct of the parties, recitals in the sale agreement and the circumstances outside the contract have to be seen.

12. In Sardar Singh v. Krishna Devi, this Court observed that as the court has to see the totality of the circumstances,

conduct of the parties and respective interests under the contract while granting/refusing such relief.

13. The first sale agreement was executed on 30-9-1987 about twenty-seven years ago. The property is situated in Coimbatore City and over these years, value of property in Coimbatore City would have considerably increased. In Saradamani Kandappan v. S. Rajalakshmi, this Court has held that the value of the property escalates in the urban areas very fast and it would not be equitable to grant specific performance after a lapse of long period of time. In the instant case, the first agreement was executed on 30-9-1987 i.e. twenty-seven years ago. In view of passage of time and escalation of value of the property, grant of specific relief of performance would give an unfair advantage to the respondent-plaintiffs whereas the performance of the contract would involve great hardship to the appellant-defendant and his family members.

14. Considering the totality and the facts and circumstances, in our view, it is not appropriate to grant discretionary relief of specific performance to the respondent-plaintiffs for more than one reason. Admittedly, the suit property is the only property of the appellant-defendant and the appellant is said to have constructed a house and where he is currently residing with the family. As compared to the respondents, the appellant will suffer significant hardship if a decree for specific performance is granted against the appellant. Considering the circumstances, such as the construction of the residential house over the suit property, sale consideration, passage of time and hardship caused to the appellant, makes it inequitable to exercise the discretionary relief of specific performance and the concurrent finding of the first appellate court and the High Court decreeing the suit for specific performance is to be set aside.

15. The next point falling for determination is the relief to be granted to the respondent-plaintiffs. Admittedly, the respondents have paid advance amount of Rs 42,500, even though, the respondents are not entitled to the relief of specific performance, in our view, the advance amount of Rs

42,500 paid by the respondents is to be refunded to the respondents with interest @ 9% p.a. In addition, the appellant is directed to pay compensation of Rs 2,00,000 to the respondents.

36. The Supreme Court in the case of Veerayee Ammal v. Seeni Ammal, reported in (2002) 1 SCC 134 has held as under :

11. When, concededly, the time was not of the essence of the contract, the appellant-plaintiff was required to approach the court of law within a reasonable time. A Constitution Bench of this Hon'ble Court in Chand Rani v. Kamal Rani held that in case of sale of immovable property there is no presumption as to time being of the essence of the contract. Even if it is not of the essence of contract, the court may infer that it is to be performed in a reasonable time if the conditions are (i) from the express terms of the contract; (ii) from the nature of the property; and (iii) from the surrounding circumstances, for example, the object of making the contract. For the purposes of granting relief, the reasonable time has to be ascertained from all the facts and circumstances of the case.

12. In K.S. Vidyanadam v. Vairavan this Court held: (SCC p. 11, para 14) "Even where time is not of the essence of the contract, the plaintiff 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."

13. The word "reasonable" has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the word "reasonable". The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks. The dictionary meaning of

the "reasonable time" is to be so much time as is necessary, under the circumstances, to do conveniently what the contract or duty requires should be done in a particular case. In other words it means, as soon as circumstances permit. In P. Ramanatha Aiyar's The Law Lexicon it is defined to mean:

"A reasonable time, looking at all the circumstances of the case; a reasonable time under ordinary circumstances; as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract requires should be done; some more protracted space than 'directly'; such length of time as may fairly, and properly, and reasonably be allowed or required, having regard to the nature of the act or duty and to the attending circumstances; all these convey more or less the same idea."

37. This Court has already held that the respondent was never in possession of funds for meeting out the registration charges, therefore, there is no question of willingness and readiness within the reasonable period. The Supreme Court in the case of Kalawati v. Rakesh Kumar, reported in (2018) 3 SCC 658 has held as under :

18. In Acharya Swami Ganesh Dassji v. Sita Ram Thapar this Court drew a distinction between readiness to perform the contract and willingness to perform the contract. It was observed that by readiness it may be meant the capacity of the plaintiff to perform the contract which would include the financial position to pay the purchase price. As far as the willingness to perform the contract is concerned, the conduct of the plaintiff has to be properly scrutinised along with the attendant circumstances. On the facts available, the Court may infer whether or not the plaintiff was always ready and willing to perform his part of the contract. It was held in para 2 of the Report: (SCC p. 528)

"2. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised. ... The factum of readiness and willingness to perform the plaintiff's part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances.

The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time is of the essence of the contract."

19. In I.S. Sikandar v. K. Subramani this Court noted that the plaintiff is required to prove that from the date of execution of the agreement of sale till the date of the decree, he was always ready and willing to perform his part of the contract. In this case, looking at the attendant facts and circumstances, the Court upheld the view of the trial Judge that the plaintiff had no money to pay the balance sale consideration and was apparently not capable of making necessary arrangements for payment of the balance consideration. It was held in para 45 and para 47 of the Report: (SCC pp. 41-42) "45. ... Further, the plaintiff is required to prove the fact that right from the date of execution of the agreement of sale till the date of passing the decree he must prove that he is ready and has always been willing to perform his part of the contract as per the agreement.

* * *

47. Further, there is nothing on record to show that the plaintiff could have made arrangement for payment of the balance consideration amount to them. But, on the

other hand, the trial court has recorded the finding of fact to the effect that the correspondence between the parties and other circumstances would establish the fact that the plaintiff had no money for payment of balance sale consideration...."

20. Insofar as the present appeal is concerned, the material on record clearly indicates that Rakesh Kumar did not have the necessary funds available with him to pay the balance consideration. His low income and low bank balance indicated his incapacity to make the balance payment. As far as his capacity to arrange for funds is concerned, it has come on record that Rakesh Kumar did take a loan from his cousin but that was only for his business and not for paying the balance consideration for the land in dispute. There is nothing on record to indicate that Rakesh Kumar could have not only repaid the loan taken from his cousin, but additionally, could have arranged sufficient funds to pay the balance consideration. It is very doubtful, and it is easy and reasonable to infer this, that Rakesh Kumar was incapable of meeting both liabilities.

38. The Supreme Court in the case of Vijay Kumar v. Om Parkash reported in (2019) 17 SCC 429 has held as under :

6. In order to obtain a decree for specific performance, the plaintiff has to prove his readiness and willingness to perform his part of the contract and the readiness and willingness has to be shown throughout and has to be established by the plaintiff. In the case in hand, though the respondent-plaintiff has filed the suit for specific performance on 29-4-2008, the respondent-plaintiff has not shown his capacity to pay the balance sale consideration of Rs 22,00,000 (Rupees twenty-two lakhs). In his evidence, the respondent-plaintiff has stated that he has borrowed the amount from his friends and kept the money to pay the balance sale consideration. As rightly pointed out by the trial court, the respondent-plaintiff could not produce any document to show that he had the amount of Rs 22,00,000

(Rupees twenty-two lakhs) with him on the relevant date; nor was he able to name the friends from whom he raised money or was able to raise the money. Furthermore, as rightly pointed out by the trial court, the respondent-plaintiff could have placed on record his accounts book, passbook or the statement of accounts or any other negotiable instrument to establish that he had the money with him at the relevant point of time to perform his part of the contract. We are, therefore, in agreement with the view taken by the trial court that the respondent-plaintiff has not been able to prove his readiness and willingness on his part.

39. The purchaser has to bear the registration charges, therefore, non-availability of funds to bear the registration charges is equally important aspect which has to be looked into while considering the question of readiness and willingness. In the present case, the respondent had claimed that he arranged money from 3-4 persons, but neither named them in his evidence, nor examined them. He has further admitted in his police complaint Ex. P.6, that he was not in possession of necessary funds for bearing registration charges and now after making arrangement for the same, when he requested the appellant, he is not executing the sale deed. Thus, shortage of funds to perform his part of contract, would certainly mean that he was not ready and willing to perform his part of contract.

40. Further, this Court in the case of Surendra Vs. Dr. Kamal and others decided on 17-2-2023 in S.A. No. 2898 of 2023 has held that keeping mum for sufficient period of time, clearly indicates that the vendee was not ready and willing to perform his part of contract. In the present case, the respondent had kept mum

for 16 long years and has admitted that he was not in possession of funds to bear the registration charges. Thus, it is clear that the respondent was not ready and willing to perform his part of contract within a reasonable period.

41. Further, it is the case of the respondent that he had requested the Appellant on multiple occasions but on one pretext or the other, he always avoided to execute the sale deed.

42. Therefore, the question of consideration is that whether the act of vendor in avoiding the execution of sale deed can be treated as refusal to execute the sale deed or not?

43. To avoid means "to evade" or "to make it void" or "to annul or to avoid efficacy of anything".

44. The Bombay High Court in the case of Shri Vinayak Shankar Bawane and others Vs. Shri Tilakraj in C.R.A. No. 136/2019 decided on 6-3-2020 has held that as per the pleadings the predecessor of the vendor had repeatedly avoided to execute the sale deed, and inspite of repeated approaches, the vendor was not performing its part of contract. Therefore, it was held that the vendee was aware of refusal on the part of the predecessors to perform their part of contract. Even then no notice or any step was taken for specific performance of contract. Thus, the averment that right from the date of execution of agreement to sell, the appellant was avoiding to execute the sale deed, would clearly mean that the respondent was aware of the fact that the appellant has refused to execute the sale deed, but still the suit was not filed within three years from the date of refusal by the

appellant to execute the sale deed and the suit was filed after 16 long years.

45. At this stage, it is submitted by the Counsel for the respondent that since, the respondent was given possession in the light of agreement to sell, therefore, the respondent is entitled to protect his possession as provided under Section 53-A of Transfer of Property Act.

46. Considered the submissions made by the Counsel for the respondent.

47. Section 53-A of Transfer of Property Act reads as under :

53-A. Part performance.--Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty:

and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

48. From plain reading of Section 53-A of Transfer of Property Act, a person is entitled to protect his possession acquired by virtue of agreement to sell provided he has done some act in furtherance of contract and has performed or is willing to perform his part of the contract. The Supreme Court in the case of Seshasayee Steels (P) Ltd. v. CIT, (2020) 14 SCC 774 has held as under :

15. In order that the provisions of Section 53-A of the TP Act be attracted, first and foremost, the transferee must, in part- performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee must have performed or be willing to perform his part of the agreement. It is only if these two important conditions, among others, are satisfied that the provisions of Section 53- A TPA can be said to be attracted on the facts of a given case.

49. Seeking protection under Section 53-A of Transfer of Property Act is a defence available to the transferee, however, the said defence is subject to fulfillment of two ingredients including that the transferee must perform or must be willing to perform his part of agreement. Since, this Court has already come to a conclusion that the respondent has failed and was not willing to perform his part of contract, therefore, the defence of protection of his possession by virtue of Section 53-A of Transfer of property Act is not available to the respondent.

50. Since, the respondent has failed to prove that he was ready and willing to perform his part of contract, therefore, the question of limitation in filing the suit becomes redundant.

51. Accordingly, both the Substantial Questions of Law are answered in affirmative. However, the appellant has accepted execution of agreement to sell and the entire consideration amount of Rs.1,15,000/- was also received by the appellant. The agreement to sell was executed about 16 years prior to institution of civil suit and since the respondent no.1 was not ready and willing to perform his part of contract, therefore, he is not entitled for decree for specific performance of contract. Accordingly, it is directed that the appellant shall refund an amount of Rs.1,15,000/- to the respondent within a period of 2 months from today otherwise the appellant shall be liable to pay interest @ 6% from the date of institution of suit. If the respondent refuses to take the refund, then the amount shall be deposited in the trial court.

52. Ex consequenti, the Judgment and Decree dated 18-11-2022 passed by Principal District Judge, Bhopal in RCA No. 96 of 2022 is hereby set aside and the decree in aforementioned term is passed.

53. The Appeal succeeds and is hereby allowed.

54. No order as to cost.

55. Decree be drawn accordingly.

(G.S. AHLUWALIA) JUDGE HEMANT SARAF 2023.03.21 17:39:22 +05'30'

HS