Madras High Court
A1 Died vs M.Gurusamy on 30 November, 2023
Author: R.Subramanian
Bench: R.Subramanian
Appeal Suit.No.426 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 05.10.2023
Pronounced on 30.11.2023
CORAM
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
AND
THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI
Appeal Suit.No.426 of 2013
and M.P.No. 1 of 2013
1.T.Meenakshi (died)
2.T.Rangasamy
3.Hariharan
4.Divya
5.T.Rajan
6.Nivedha
7.Karthick
8.R.Poongothai
9.Jayanthi
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A1 died, Appellants 2, 5, 8 and 9 are already on record, as legal heirs
of deceased 1st appellant, vide order of Court dated 11.09.2023 made in
A.S.No.426 of 2013 memo dated 28.08.2023 [RSMJ & RKMJ]
Appellants 3, 4, 6 and 7 are declared as major and appellants 2 and 5
are discharged from Guardianship, vide order of Court dated 11.09.2023
made in C.M.P.Nos.20015, 20016, 20019 and 20020/2023 in A.S.No.426 of
2013 [RSMJ & RKMJ].
....Appellants/Defendants
Vs.
1.M.Gurusamy
2.N.V.Rajan ....Respondents/Plaintiffs
Prayer: First Appeal has been filed under section 96 of CPC read with order
41 Rule 1 Civil Procedure Code, against the Judgement and Decree dated
17.01.2013 made in O.S.No.148 of 2011 on the file of the Principal District,
Namakkal.
For Appellants : Mr.T.R.Rajagopalan
Senior Counsel
For Mr.T.R.Rajaraman
For Respondents : Mr.N.Manokaran
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Appeal Suit.No.426 of 2013
JU D G M E N T
(Judgment of the Court was delivered by K.GOVINDARAJAN THILAKAVADI,J.)
This appeal has been preferred against the judgement and decree dated
17.01.2013 made in O.S.No.148 of 2011 on the file of the Principal District,
Namakkal.
2. The Appellants 1 to 9 are the Defendants 1 to 9 in O.S.No.148 of
2011 and Plaintiffs 1 and 2 in the above suit are the respondents herein.
3. For the sake of convenience, the parties herein are referred to as
they are ranked before the trial Court as Plaintiff and Defendant.
4. The suit is for specific performance of contract dated 19.03.2008
directing the defendants to execute the sale deed by receiving the balance
sale price, and alternatively to return back the advance sum of Rs.30 lakhs
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and the development expenses, a sum of Rs.5 lakhs together with the interest
at the rate of 24% p.a. and for Permanent injunction restraining the
defendants, from encumbering the suit property.
5. The averments in the plaint is as follows:
The suit property originally belonged to one Thandavan, who died
intestate. The defendants are the legal heirs of the said Thandavan. The
defendants on 19.03.2008 entered into a sale agreement to sell the suit
property and the same was signed by the defendants 1, 2, 5, 8 and 9. The
second defendant signed the agreement for himself and for the minor
defendants 3 and 4. The 5th defendant signed the agreement for himself and
for the minor defendants 6 and 7. The sale price agreed was, Rs.96 lakhs and
on the date of agreement a sum of Rs.30 lakhs was paid as advance. It was
agreed that the balance sale consideration was to be paid within a period of 6
months and the defendants within the said period of 6 months have to
measure the property, and without any encumbrance hand over the same to
the plaintiff. It was agreed that, during measurement if the property is less,
then proportionately the price will be reduced. After agreement dated
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19.03.2008 the defendants subsequently, executed a declaration deed and
handed over possession of property. The property was handed over to the
plaintiff for him to develop the site into plots and to divide the same. In the
declaration deed the defendants also promised to remove the Angalaman
Temple, Periyandichi Temple from the suit premises.
6. Further, the defendants also promised to clear the bank loan. Since
the defendants were unable to clear the encumbrance within the stipulated
period and the defendants extended the period of performance till 31.12.2008
and further, till 30.01.2009 and further, till 28.02.2009. On behalf of all the
defendants, the defendants 2 & 3 endorsed their signatures, BUT to their
surprise, the defendants failed to discharge the bank loan, clear the
encumbrance, failed to measure the property, and also failed to remove the
temples from the suit premises as agreed. The plaintiffs after taking
possession of property, spent nearly Rs.5 lakhs and developed the land in to a
house site and divided the same into house plots. When the defendants
dodged the execution of the sale deed, the plaintiff issued a notice on
6.12.2010. The defendants received the same and issued false reply on
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11.12.2010. Further, the plaintiff issued a telegram on 05.09.2011 as to the
plaintiffs' readiness and willingness to perform their part of the contract. To
the said telegram, the defendants never replied and further, the plaintiffs
issued notice, to the defendants to appear before the register office on
12.9.2011 to register the sale deed. The plaintiffs were waiting there but the
defendants failed to come to register the sale deeds. Hence in such
circumstances, the plaintiff filed the suit for specific performance of the
contract dated 19.03.2008 directing the defendants to execute the sale deed
by receiving the balance sale price and alternatively, to return the advance,
sum of Rs.30 lakhs + development expenses Rs.5 lakhs together with the
interest at the rate of 24% p.a.
7. Per contra, the contention of the defendants in their written
statement is that, the defendants agreed to sell the suit property on
19.03.2008 for a sum of Rs.96 lakhs and on the day of the sale agreement a
sum of Rs.30 lakhs advance was also paid and it was agreed that within 6
months, the sale is to be completed is true. But, other allegation that, within 6
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months period, the plaintiff was ready to execute the sale deed and the
defendants were not ready is false.
8. It is stated that, as per the agreement dated 19.03.2008 within 6
months period, the plaintiffs were not ready to get the sale deed executed.
But the plaintiff wanted to get the sale deed executed by unlawful means. As
far as the declaration deed is concerned, the plaintiffs wanted to grab the
property and took the defendants to the police station and the plaintiffs
threatened the defendants and made them to affix their signatures in the
stamp papers. It is further stated, the defendants, never executed, any
declaration deed, and the declaration deed is out of imagination and
fabricated. It is stated that, the Periyandichi Temple in the suit properties is
the defendant's family deity and belonged to more than 100 families. The
temple cannot be removed and the same is not in their hands.
9. It is stated that, within 6 months period, the plaintiff was not ready
and willing to get the sale deed executed and hence, the suit is not
maintainable and is liable to be dismissed.
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10. On consideration of the pleadings and materials on the record the
trial Court framed the following issues and additional issue :-
1) Whether the plaintiff is entitled to Specific Performance
of contract dated 19.03.2008 between the plaintiff and
the defendants?
2) To what relief if any the plaintiff is entitled to?
Additional Issue :-
1) Whether the plaintiff was ready and willing to
perform his part of the contract within 6 months?
On the side of the plaintiffs P.W.1 to P.W.4 were examined and Ex.A1
to Ex.A13 were marked. On the side of the defendants the second defendant
was examined as D.W.1 and no documents were produced.
11. After perusal of both documentary as well as oral evidence the trial
Court concluded that the plaintiff is entitled to specific performance of the
contract dated 19.03.2008 and the defendants were directed to execute the
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sale deed, by receiving the balance sale price Rs.66,00,000/-. And time to
deposit the balance sale price was one month.
12. The aggrieved Appellants are before this Court.
13. We have heard the learned Counsel for respective parties and
perused the documents produced on record.
14. Mr.T.R.Rajagopalan, learned Senior Counsel for the Appellants,
contended as below:
Firstly, the trial Court failed to note that time was the essence of
contract as per the sale agreement under Section 55 of the Indian Contract
Act, 1872,(hereinafter, 'Contract Act'). He submitted that the contractual
performance of Ex.A1 Sale agreement needed to be mandatorily effectuated
by the respondent/plaintiff within stipulated period of 6 months from the
date of executing the sale agreement. He further stated that the Appellants
reiterated the same stance in Ex.A3 legal notice, intimating the
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respondents/plaintiffs that they were not ready and willing to perform their
part of contract and the Appellants/defendants not only forfeited the advance
amount but also rescinded the contract.
Secondly, the trial Court completely overlooked the fact that the
defendants in their written statement categorically denied the execution of
Ex.A2-declaration deed and the endorsements made in Ex.A1-agreement for
extension of time on three different occasions. He submitted that no evidence
was let in by the plaintiffs to establish the execution of Ex.A2 declaration
deed and the endorsements made in Ex.A1 agreement. He further submitted
that the trial Court failed to advert to the candid admission made by P.W.1
that all the three endorsements were made on the very same day in Ex.A.1-
Agreement. He would further submit that the signatures found in Ex.A2
declaration deed and in the endorsement for extension of time do not belong
to the defendants. No steps were taken by the plaintiffs to establish that the
disputed signatures belonged to the defendants.
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Thirdly, the trial Court failed to note that no prudent man would
execute a deed of declaration on the very same day of the execution of sale
agreement especially when the law mandates that handing over possession
should be in writing in the document itself.
Fourthly, the trial Court erroneously observed that D.W.1 admitted in
his evidence that the plaintiffs have spent a sum of Rs.5,00,000/- for
developing the suit property, when no such admission was made by D.W.1.
He would submit that the trial Judge failed to consider the evidence of D.W.1
in a proper perspective.
Fifthly, the trial Judge ought to have held that the plaintiffs failed to
establish that they were always ready and willing to perform their part of
contract. He submitted that the trial Court ought to have seen the conduct of
the plaintiffs through out the transactions with regard to readiness and
willingness. He further submitted that the suit was filed on 16.09.2011 after
lapse of three years and 6 months from the date of the agreement which
clearly shows that the plaintiffs were never ready and willing to perform their
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part of the contract. Therefore, as per law of Equity, the plaintiffs are not
entitled to the relief of specific performance and moreover, granting of decree
for specific performance is subject to rules specified under the Specific Relief
Act, 1963.
15. The composite essence of all the above mentioned arguments by
Mr.T.R.Rajagopalan, learned Senior Counsel is that non-performance of
contractual obligations on the part of the plaintiffs within the stipulated time
resulted in lawful exercise of right of termination by the defendants and the
consequent forfeiture of earnest money as stipulated under the sale agreement
which was in-accordance with the settled law.
16. On the contrary, Mr.N.Manokar, learned Counsel for the
respondents argued as follows:
Firstly, the defendants failed to perform their contractual obligations,
especially to measure the property, and handover the same without any
encumbrance, to the plaintiffs as per the agreement.
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Secondly, the defendants, after agreement dated 19.03.2008
subsequently executed Ex.A2 declaration deed and handed over possession
of property to the plaintiff to develop the same into plots and to divide the
same. In the declaration deed, the defendants promised to remove the temples
from the suit properties. The defendants also promised to clear the bank loan.
Since the defendants were unable to clear the encumbrance the defendants
further extended the period for performance of contract on three different
dates ie., on 31.12.2008, 30.01.2009 and further till 28.02.2009. The
defendants affixed their signatures in Ex.A1 agreement for the said
endorsements.
Thirdly, the plaintiffs after taking possession of the property, spent
nearly Rs.5,00,000/- for developing the land and to divide the same into
house plots.
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Fourthly, since the defendants failed to execute the sale deed as per the
agreement, the plaintiffs issued a legal notice on 06.12.2010 for which the
defendants issued a reply notice on 11.12.2010 with false allegations.
Fifthly, the findings of fact recorded by the trial Court on readiness and
willingness on part of plaintiff, was only on appreciation of evidence on
record. The trial Court has exercised its discretionary jurisdiction in
accordance with sound and reasonable judicial principles. The trial Court is
justified in granting the relief of specific performance. Since the suit was
filed within period of limitation, it cannot be inferred against plaintiffs that
they were not ready and willing to perform their part of the contract.
Furthermore, he would submit that the insistence by plaintiffs on
measurement of land and production of all document making out a complete
chain of title by defendants, before paying balance consideration does not
militate against readiness and willingness of plaintiffs to perform their part of
the contract. He would submit that without any pleadings in the written
statement, the question of hardship to the defendant if decree for specific
performance is passed long after execution of sale agreement is
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impermissible at the time of hearing the appeal. He would further contend
that the execution of Ex.A2 declaration deed was not specifically denied in
the written statement. Therefore, the defendants cannot deny the execution of
declaration deed at the time of examination. The learned counsel for the
respondents/plaintiffs would submit that no specific defence had been taken
in respect of Ex.A1 and A2 except denying the plaint averments. P.W4,
witness to Ex.A1 and A2 was not cross examined by the defendants with
regard to the signatures found in Ex.A1 and A2. To support his contention,
he has relied upon the following decided cases reported in 2017 (4) CTC 734
(DB) - Para Nos. 54 to 59; 2016 (12) SCC 288 Para Nos. 14 – 16; 2017 (4)
CTC 734 (DB) Para No.52.
17. The learned counsel further submitted that, time is not the essence
of contract in respect of immovable property and that the suit is well within
the period of limitation. He would further contend that the new amendment
to the specific relief Act is a guiding factor and therefore, when the plaintiffs
proved their readiness and willingness and the defendants have caused the
delay, discretion has to be exercised in favour of the plaintiffs. To support
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his contention he has relied upon the cases reported in AIR 2019 SC 4251;
2019 (6) SCC 233; 2008 (4) SCC 464; 2015 (1) SCC 597; 2021 (8) MLJ 576.
18. The sum and substance of the above arguments are,
That the appellants herein who are the defendants in the above suit,
agreed to sell the suit property for a sale consideration of Rs.96 lakhs and a
sum of Rs.30 lakhs was paid a advance on the date of agreement.
That it was agreed by the parties to complete the sale transaction
within a period of 6 months from the date of agreement after receiving the
balance sale consideration and hand over the property without any
encumbrance.
That the defendants herein were unable to measure the property and
hand over the same without any encumbrance within the stipulated period.
That the defendants also executed Ex.A2 declaration deed,on the same
day of executing the sale agreement and handed over the possession of
property to the respondents to develop the site into plots and to divide the
same.
That the plaintiffs have spent a sum of Rs.5 lakhs to develop the
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properties into plots.
That in the declaration deed the defendants promised to remove the
Angalaman Temple, Periyandichi Temple from the suit property.
That the defendants also promised to clear the bank loan.
That the defendants were unable to clear the encumbrance and
therefore, the time was extended for performance of contract on three
different occasions by the defendants making endorsements in Ex.A1 sale
agreement.
That the defendants failed to perform their part of contract, the
respondents filed the above suit for specific performance.
The defendants filed their written statements denying the endorsement
for extension of time and execution of the declaration deed.
19. Based on the above, the following points for consideration arises
which are as follows:-
1. Whether time was the essence of the contract?
2. Whether the signatures found in Ex.A1 sale agreement and Ex.A2
declaration deed belong to the appellants?
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3. Whether the respondents were ready and willing to perform their
part of contract under the suit sale agreement?
4. Whether the trial Court was right in granting the relief of specific
performance to the respondents?
5. Whether the respondents have established that they have spent a
sum of Rs. 5 lakhs for developing the suit property into plots?
6. To what other relief the respondents are entitled too?
Point Nos.1 to 4
20. The plaintiffs have alleged that they did not pay the balance
consideration as the defendants failed to remove the encumbrance from the
suit property.
21. We have considered the submissions on behalf of the parties and
have also been taken through the trial Court judgement under appeal. As per
the agreement, the sale deed was to be executed on or before 19.09.2008. The
trial Court arrived at the finding of readiness and willingness on part of the
plaintiffs solely on the basis of the endorsements found in Ex.A1 sale
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agreement alleged to have been made on three occasions by the defendants
and by stating that the defendants failed to clear the encumbrance as per
Ex.A1 agreement and Ex.A2 declaration deed. The trial Court failed to
analyse the genuineness of the above document in a proper perspective.
22. The plaintiffs failed to establish the signatures found in the above
documents belong to the defendants. The defendants in their written
statement have categorically denied not only the execution of Ex.A2
declaration deed but also the endorsements made in Ex.A1 agreement.
However, the trial Court failed to frame necessary issues and put the onus on
the plaintiffs to establish that Ex.A2 declaration deed and the endorsements
found in Ex.A1 agreement are genuine. First of all, we note that the
agreement to sell the suit property did not specifically record the mortgage
over the property and removal of the temples from the suit property. As per
the plaintiffs, the defendants have executed Ex.A2 declaration deed in which
the defendants have agreed to clear the mortgage loan and agreed to remove
the temples from the suit property. However, the defendants have specifically
denied the execution of the declaration deed in their written statement and in
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their evidence. While so, the plaintiffs ought to have proved the execution of
the declaration deed by the defendants. The plaintiffs failed to prove the
signatures found in declaration deed that the same belongs to the defendants.
Therefore, the version of the plaintiffs that the defendants agreed to clear the
mortgage loan and remove the temples from the suit property by executing
Ex.A2 declaration deed cannot be accepted. It is more significant to note that
the said declaration deed was alleged to have been executed on the same day
of executing Ex.A1 sale agreement. It is not spoken by the plaintiffs, the
need for executing the declaration deed on the same date and why the said
conditions mentioned in the declaration deed were not mentioned in the sale
agreement. The trial Court failed to consider the admission made by P.W.1,
that all the endorsements were made on the very same day. The trial Court
failed to analyze the evidence of P.W.1 in this regard. P.W.1 also admitted
in his evidence that he did not take any steps to establish the disputed
signatures found in the above documents are made by the defendants. When
the plaintiffs failed to prove the endorsements and the execution of Ex.A2
declaration deed by the defendants, the findings of the trial Court that the
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defendants failed to perform their part of the contract and the plaintiffs cannot
be blamed for not performing their part of contract cannot be accepted.
23. Now it has to be examined whether time is essence of contract and
whether the plaintiff was always ready and willing to perform his part of
contract.
24. Though time is not essence of contract for sale of immovable
property, while deciding to grant the relief of specific performance, especially
in suits relating to sale of immovable property, the Courts must be cognizant
of the conduct of the parties and see whether one party will unfairly benefit
from the decree. The remedy provided must not cause injustice to a party,
especially when they are not at fault.
25. In this respect, we must now take note of Section 55 of Contract
Act which stipulates the aftermath in case of failure to perform Contractual
obligations at fixed time. The provision states:-
“Effect of failure to perform at fixed time, in Contract in
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which time is essential – When a party to a Contract
promises to do a certain thing at or before a specified time,
or certain things at or before specified times, and fails to do
any such thing at or before the specified time, the Contract,
or so much of it as has not been performed, becomes
voidable at the option of the promisee, if the intention of the
parties was that should be of the essence of the Contract.
Effect of such failure when time is not essential – If it was not
the intention of the parties that time should be of essence of
the Contract, the Contract does not become voidable by the
failure to do such thing at or before the specified time; but
the promisee is entitled to compensation from the promisor
for any loss occasioned to him by such failure.
Effect of acceptance of performance at time other than
agreed upon. – If , in case of Contract voidable on account
the promisor’s failure to perform his promise at the time
agreed, the promisee accepts performance of such promise at
any time other than that agreed,
the promisee cannot claim Compensation for any loss
occasioned by the non-performance of the promise at the
time agreed, unless, at the time of such acceptance, he gives
notice to the promiser of his intention to do so.”
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26. This ratio was dealt with by the Hon'ble Supreme Court in
K.S.Vidyanadam and others vs. Vairavan, [1997 (1) CTC 628 (SC) : (1997)
3 SCC 1], in the following manner:
“10.It has been consistently held by the courts in India,
following certain early English decisions, that in the case of
Agreement of Sale relating to immovable property, time is not
of the essence of the Contract unless specifically provided to
that effect. The period of limitation prescribed by the
Limitation Act for filing a suit is three years. From these two
circumstances, it does not follow that any and every suit for
Specific Performance of the Agreement (which does not
provide specifically that time is of the essence of the Contract)
should be Decreed provided it is filed within the period of
limitation notwithstanding the time-limits stipulated in the
agreement for doing one or the other thing by one or the other
party. That would amount to saying that the time-limits
prescribed by the parties in the agreement have no significance
or value and that they mean nothing. Would it be reasonable
to say that because time is not made the essence of the contract,
the time-limit(s) specified in the agreement have no relevance
and can be ignored with impunity? It would also mean denying
the discretion vested in the Court by both Sections 10 and 20.
As held by a Constitution Bench of this court in Chand Rani v.
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Kamal Rani: (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.”
21. In K.S.Vidyanadam's case (supra), the facts involved
was that 6 months period was specified in the sale agreement
therein for completion of the sale transaction and on expiry of such
period, the plaintiff had waited for more than 2 ½ years for issuing
the notice. Even though it was held therein that time was not the
essence of the contract, the plaintiff must perform his part of the
contract, within a reasonable time based on the surrounding
circumstances and the nature of the property.
22. The decision in K.S.Vidyanadam's case(supra), came
to be relied on by the Hon-ble Supreme Court in a recent decision
in Kolli Satyanarayana (dead) by Lrs. vs. Valuripalli Kesava
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Rao Chowdary (dead) through Lrs. And others Civil Appeal
No.1013 of 2014, dated 27.09.2022, in the following manner:
“12.In the case of K.S.Vidyanadam and others
v.Vairavan, this Court has held that 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. It has been held that in case of urban
properties, the prices have been rising sharply. It has
been held that while exercising its discretion, the court
should bear in mind that when the parties prescribe
certain time limit(s) for taking steps by one or the other
party, it must have some significance and that the said
time limit(s) cannot be ignored altogether on the ground
that time is not the essence of the contract.”
27. Therefore, the corollary issue that arises for consideration is that,
merely because time was not the essence of the contract, the suit for specific
performance cannot be automatically decreed and that, the relevant
circumstances including the time limit specified in the agreement is required
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to be looked into and the contract should be performed within the reasonable
time.
28. In the present case, the terms of the agreements stipulated that the
plaintiffs were to pay the balance sale consideration within a period of 6
months and on receipt of balance consideration, the defendants were to
execute the sale deed pertaining to the property free from all encumbrances.
It is evident from the agreement that the liability to deliver the property free
from any encumbrance was on the defendants. However, this obligation is
prefaced by the condition that the defendants would be required to execute
the sale deed free from encumbrance on the receipt of the balance
consideration. Thus, the agreement did not specify when the defendants
should discharge their mortgage and remove the temples whether before the
expiry of 6 months or after receipt of the advance amount, or after receipt of
balance consideration. It only obligated them to ensure that after the balance
consideration is received, the sale deed executed should be free from
encumbrances. Based on a plain reading of the agreement, we are unable to
accept the respondents plea that they were willing to perform their
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obligations under the contract. It is evident that the plaintiffs were required
to pay the remaining consideration and only then they could have sought the
specific performance of the contract. The agreement required the plaintiff to
pay the balance consideration. It clearly provided that the balance
consideration would be paid and then the sale deed would be executed. The
plaintiffs have to prove their readiness and willingness to perform the
contract. Section 16 (c) of the Act, mandates the plaintiffs to prove their
readiness and willingness to perform the essential terms of the contract.
29. We shall now advert to the plaintiffs conduct through out the sale
transaction. The plaintiffs have failed to provide any documents or
communications which would indicate that he called upon the defendants to
perform their obligations within the time period stipulated in the contract. In
fact, the defendants issued a legal notice under Ex.A3 on 05.03.2009
rescinding the contract and also intimated the plaintiffs that the defendants
had forfeited the advance amount. Only then the plaintiffs issued a reply
notice under Ex.A4 dated 10.03.2009 calling upon the defendants to perform
their part of contract. Again the plaintiffs issued a legal notice under Ex.A5
only on 06.12.2010 calling upon the defendants to clear the mortgage loan
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and also to take steps to measure the property. Therefore, only in response to
the legal notice issued by the defendants, the plaintiffs demanded the
performance of their obligations. Merely averring that the plaintiffs were
waiting with the balance consideration and believed that the defendants
would clear the encumbrance is insufficient to prove the plaintiffs were
willing to perform their obligations under the contract Act. Moreover, the
sale agreement was executed in the year 2008. However, the plaintiffs did
not institute the suit for specific performance until 2011. The plaintiffs have
taken plea that since the defendants failed to discharge the mortgage loan,
measure the property and remove the temples from the suit property, they did
not take steps to file a suit for specific performance. We are unable to accept
this submission. By extending the plaintiffs arguments, if the defendants
failed to remove the above encumbrances, the plaintiffs could not have filed a
suit for specific performance of the contract at all. The inconsistency in the
plaintiffs conduct, the lack of communication with the defendants urging
them to clear the encumbrances and showing their willingness to pay the
balance consideration, and the delay of above 3 years in filing the suit, are all
indicative of the plaintiffs lack of will to perform the contract.
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30. In a suit for specific performance the plaintiffs must demonstrate
readiness and willingness though out to perform their obligations. For
ascertaining readiness and willingness, conduct of parties must be determined
having regard to entire attending circumstances of each case. Merely because
the suit is filed within prescribed period of limitation it does not absolve the
plaintiffs from showing as to whether they were ready and willing to perform
their part of agreement. If there was non-performance, the question would be
whether that obstacle was put up by the seller or otherwise. The Court has to
see all attendant circumstances including if the plaintiffs conducted
themselves in a reasonable manner under the agreement.
31. Though there can be no straight jacket formula with regard to
readiness and willingness, it will have to be construed on the facts and
circumstances of each case in the light of all attending facts and
circumstances. Though the sale agreement was on 19.03.2008 the suit was
filed only in the year 2011. No explanation is forthcoming as to why the
plaintiffs had not taken action immediately. Merely because a suit is filed
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Appeal Suit.No.426 of 2013
within the prescribed period of limitation, it does not absolve the plaintiffs
from showing as to whether they were ready and willing to perform their part
of their contract. In Umabai v. Nilkanth Dhondiba Chavan reported in
(2005) 6 SCC 243, it has been observed as follows:
''30.It is now well settled that the conduct of the parties,
with a view to arrive at a finding as to whether the
respondent-plaintiffs were all along and still are ready
and willing to perform their part of contract as is
mandatorily required under Section 16(c) of the
Specific Relief Act must be determined having regard to
the entire attending circumstances. A bare averment in
the plaint or a statement made in the examination-in-
chief would not suffice. The conduct of the respondent-
plaintiffs must be judged having regard to the entirely
of the pleadings as also the evidence brought on
record.''
32. The plaintiffs herein failed to demonstrate that they were always
willing to perform their part of contract. The trial Court failed to frame an
issue as to whether the plaintiffs were ready and willing to perform their
obligations under the contract and instead assessed whether the plaintiffs are
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Appeal Suit.No.426 of 2013
entitled to the relief of specific performance. The reason given by the
plaintiffs that the defendants failed to perform the obligations to hand over
the property without encumbrance and the plaintiffs were waiting for the
defendants to discharge the bank loan, measure the property and remove the
temples from the suit property are untenable. The conduct of the plaintiffs
proves their lack of will to perform the agreement. As discussed above, the
factum of readiness and willingness to perform the plaintiffs part of the
contract is to be adjudged with reference to the conduct of the party and
attending circumstances. The Court may infer from the facts and
circumstances whether the plaintiffs were always ready and willing to
perform their part of contract. In spite of the fact that the defendants issued
the legal notice on 19.03.2009, rescinding the contract and also intimating the
plaintiffs that they had forfeited the advance amount, the suit has been filed
only in the year 2011 after lapse of three years and 6 months from the date of
agreement, which clearly goes to show that the plaintiffs were never ready
and willing to perform their part of the contract. On a overall consideration
of the legal position discussed above, we are of the view that the plaintiffs
were never ready and willing to perform their part of contract and though
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time was not the essence of the contract, the plaintiffs were legally bound to
perform their part, within the reasonable time. The findings of the trial court
that the plaintiffs were ready and willing to perform their part of contract
requires interference. As per law of equity, the plaintiffs are not entitled to
the relief of specific performance.
Point Nos.5 and 6
33. Now it has to be considered whether the plaintiffs have spent a sum
of Rs.5 lakhs to develop the suit property into house sites. In this regard, the
cross examination of D.W.1 is extracted as here under:
“jhth brhj;J. bey; tpiyaf;Toa fspkz; vd;W
brhd;dhy; rhpjhd;/ jhth brhj;J fspkz; g{kpahf ,Ug;gjhy;.
gpyhl;L nghl;L tPL fl;LtJ rpukk; vd;gjhy;. jhth brhj;jpy;
,uz;L mo cauj;jpw;F thjpfs; kz; nghl;L epug;gpdhh;fs; vd;W
brhd;dhy; rhpjhd;/ thjpfs; nkw;go ,uz;L mo cauj;jpw;F
kz; nghl;L epug;gpa tifapy; U:/5 yl;rk; brythdJ vd;W
thjpfs; vdf;F nehl;o!; bfhLj;jhh;fs;/ ehd; mjw;F gjpy;
vJt[k; brhy;ytpy;iy vd;W brhd;dhy; rhl;rp thjpfs; vt;tst[
bryt[ bra;jhh;fs; vd;W vdf;F bjhpahJ vd;W brhy;fpwhh;/”
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34. Therefore, from the evidence of D.W.1 it is understood that the
plaintiffs have spent for developing the suit property to convert it into house
plots. The plaintiffs have also issued a legal notice to the defendants stating
that they have spent a sum of Rs.5 lakhs for the same. The defendants by way
of reply did not resist the claim made by the plaintiffs. Hence, it is assumed
that the plaintiffs have spent the said amount for developing the property.
Therefore, the plaintiffs are entitled for a sum of Rs.5 lakhs as development
expenses.
35. True enough, generally speaking, time is not of the essence in an
agreement for the sale of immoveable property. In deciding whether to grant
the remedy of specific performance, especially in suits relating to sale of
immovable property, the courts must be cognizant of the conduct of the
parties, the escalation of the price of the suit property, and whether one party
will unfairly benefit from the decree. The remedy provided must not cause
injustice to a party, specifically when they are not at fault. In the present case,
three decades have passed since the agreement to sell was entered into
between the parties. The price of the suit property would have undoubtedly
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escalated. Given the blemished conduct of the respondents/plaintiffs in
indicating his willingness to perform the contract, we decline in any event to
grant the remedy of specific performance of the contract. Though in this case
a situation is brought about where it would be inequitable to give the relief of
specific performance to the plaintiff, however there will be a decree for
refund.
36. In the result, the Appeal Suit is allowed. The defendants are
directed to refund a sum of Rs.30 lakhs to the plaintiffs along with Rs.5 lakhs
as development expenses together with interest at the rate of 6% per annum,
from the date of filing of the suit, till the date of actual payment, within a
period of 6 months from the date of receipt of a copy of this judgment. No
costs. Consequently, connected miscellaneous petition is closed.
(R.S.M.,J.) (K.G.T.,J.)
30.11.2023
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Appeal Suit.No.426 of 2013
vsn/mac
Internet:Yes/No
Index:Yes/No
Speaking/Non-speaking order
R.SUBRAMANIAN,J.
and
K.GOVINDARAJAN THILAKAVADI, J.
vsn/mac
https://www.mhc.tn.gov.in/judis
Copy to
The Principal District Court, Namakkal.
PRE- DELIVERY JUDGEMENT MADE IN
30.11.2023
https://www.mhc.tn.gov.in/judis
