Punjab-Haryana High Court
Sunita & Ors vs Rajender Singh & Anr on 10 September, 2024
Neutral Citation No:=2024:PHHC:118282
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RSA-374-2015 (O&M)
Reserved on: 02.09-2024
Pronounced on: 10.09.2024
SMT. SUNITA AND OTHERS
. . . .APPELLANTS
Vs.
RAJENDER SINGH AND ANOTHER
. . . . RESPONDENTS
CORAM: HON'BLE MR. JUSTICE DEEPAK GUPTA
Present:- Mr. P.R. Yadav, Advocate, for the appellants.
Mr. Vishal Aggarwal, Advocate, for the respondents.
DEEPAK GUPTA, J.
Present Regular Second Appeal was earlier disposed of by a
Coordinate Bench of this Court by way of order dated 16.01.2019. However,
the said order was challenged by the respondent of the appeal before Hon'ble
Supreme Court by filing Civil Appeal No.4222 of 2023 (arising out of SLP-C-
19102-2019) and by way of order dated 06.07.2023, Hon'ble Supreme Court
has set aside the order dated 16.01.2019 of this Court and has remanded the
matter with the direction to examine the appeal afresh on the question of
entitlement of the plaintiff to enforce specific performance of the agreement
or any other relief. That is how, the present appeal is again before this Court.
2.1 Perusal of the paper-book would reveal that vide an agreement
dated 10.04.2006, Raj Singh, the predecessor-in-interest of the defendants
(appellants & performa respondent herein) had agreed to sell the suit land to
plaintiff-Rajender Singh (respondent No.1 herein) and an amount of ₹4 lakh
was paid as earnest money. Initially, the target date for execution of the sale
deed was fixed as 16.08.2006, but with mutual consent, it was extended
firstly to 16.12.2006 and thereafter to 31.01.2007. Seeking the decree for
specific performance, it was alleged by the plaintiff that Rajender Singh had
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failed to procure no objection certificate and avoided the matter to perform
his part of contract on one pretext or the other and that with dishonest
intention to grab the earnest money, had even filed civil suit against the
plaintiff, which was duly contested by him. Later on, as Raj Singh had expired,
so specific performance was sought against his legal heirs - defendants, as
they did not respond to the repeated legal notices sent to them.
2.2 Defendants in the written statement raised various preliminary
objections. They challenged the readiness and willing on the part of plaintiff
to perform his part of the contract and prayed for dismissal of the suit.
2.3 Following issues were framed by the trial Court: -
"1. Whether late Raj Singh executed agreement to sell regarding his land
as mentioned in para No.1 of the plaint on dated 10.04.2006 in favour
of plaintiff?
2. Whether a decree for possession by way of specific performance of
agreement to sell is liable to be passed in favour of plaintiff against
the defendants on the grounds mentioned in the plaint? OPP
3. Whether the plaintiff has no cause of action to file the present suit?
OPD
4. Whether the plaintiff has no cause of action to file the present suit?
OPD
5. Whether the plaintiff has no locus-standi to file the present suit? OPD
6. Whether the suit of the plaintiff is hopelessly time barred? OPD
7. Relief."
2.4 After taking evidence produced by the parties, the trial Court
decided issue No.1 in favour of the plaintiff. Issue No.2 was partly decided in
favour of the plaintiff, whereas the findings on issues No.3 to 6 went against
the defendants. Consequent to these findings, trial Court decreed the suit on
10.9.2013 by directing the defendants to pay the earnest money of ₹4 lakh to
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the plaintiff along with the simple interest @ 8% per annum from the date of
filing of the suit till actual realization within the period of two months.
2.5 Unsatisfied with the judgment and decree of the trial court,
plaintiff filed appeal. The First Appellate Court modified the judgment and
decree of the trial Court and held vide judgment dated 11.09.2014 that
plaintiff was entitled to possession of the suit property by way of specific
performance of the agreement dated 10.04.2006. Accordingly, the plaintiff
was directed to deposit balance consideration amount either with the
respondents/defendants or in the trial Court within the period of one month
from the date of judgment & decree of the appellate Court, observing that
thereafter defendants would execute the sale deed and get it registered
within three months, failing which plaintiff would be at liberty to get the sale
deed executed through the trial Court.
3.1 Against the aforesaid judgment and decree, defendants
approached this Court by filing the present Regular Second Appeal.
3.2 The Coordinate Bench of this Court by way of the order dated
16.01.2019 held that target date for execution of the sale deed was
31.01.2007, whereas the suit had been filed on 01.02.2010 and so, it was
clearly barred by limitation and on this ground itself, the suit deserved to be
dismissed. The issue of readiness and willingness on the part of the plaintiff in
performing the contract was also considered by the Coordinate Bench of this
Court and it was held that plaintiff had failed to prove his readiness and
willingness to perform his part of contract and that in these circumstances,
the judgment and decree passed by the Courts below could not be sustained.
3.3 Consequently, the appeal was allowed and the judgments of the
Courts below were set aside, dismissing the suit of the plaintiff.
4. In the appeal filed by the plaintiff against aforesaid order, it has
been held by Hon'ble Supreme Court that the day, which has been treated by
the High Court as the date of expiry of limitation was actually a holiday and
that the suit was instituted on the next working day and as such, the suit was
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instituted within time. As such, the finding of this High Court to the effect that
suit was barred by limitation, was set aside.
5. On the issue of readiness and willingness of the plaintiff, Hon'ble
Supreme Court referred to the observations made by the trial Court, which
read as under: -
"15. Furthermore, plaintiff - PW1 when stepped into the witness box has
deposed that he was ready and willing to perform his part of the contract,
whereas, Late Raj Singh did not come present for getting the sale deed executed
and his testimony is substantiated by PW2 also. Both these witnesses were
thoroughly cross-examined, but, credibility of these witnesses could not be
impeached. Although, plaintiff has admitted in his cross-examination that notice
sent to him was received after 31.1.2007, but as no objection certificate was not
obtained, therefore sale deed could not be executed. He has also explained that
though notice was not replied, but same was not replied as the matter was
taken up in the village brotherhood. The plaintiff has placed on record affidavit
Ex.P.8, whereby, he marked his presence in the office of Sub Registrar on
31.1.2007. On the other hand, though, defendants have examined as many as
three witnesses and all the witnesses have supported the case of defendants in
their affidavits, but, none of them has deposed that Late Raj Singh went to the
office of Sub Registrar for getting the sale deed executed on 31.1.2007 or on
2.2.2007, whereas, DW1 and DW2 have admitted that due date for executing
the sale deed was extended twice. Even otherwise also, all the witnesses
examined by defendants are relatives of defendants, therefore, their testimony
is not worthy of credence. Therefore, conjoint reading of the oral testimony and
affidavit shows that plaintiff had been ready and willing to perform his part of
the agreement, whereas, Late Raj Singh has defaulted in the same.
6. Hon'ble Supreme Court then referred to the observations made
by this Court in its order dated 16.01.2019 and then held as under: -
" So far as the readiness and willingness of the plaintiff to undertake or
discharge his obligation in terms of a contract is concerned, we have quoted
from the judgment of the Trial Court. We do not find any basis for negating the
first two Court's views in the second appeal. The findings of the first two Courts
were based on evidence. The High Court, in second appeal has undertaken the
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exercise of reappreciation of evidence. The second issue, as framed by the Trial
Court appears to cover the question of readiness and willingness of the plaintiff
to perform his part of obligation.
We accordingly set aside the judgment of the High Court but remand the
matter to the High Court for examining the appeal afresh on the question of
entitlement of the plaintiff to enforce specific performance of the agreement or
any other relief. Since this proceeding originates from a suit instituted in the
year 2010, we request the High Court to fix an early date for hearing for
considering the appeal on the aforesaid point."
7. It is, thus, clear that Hon'ble Supreme Court held that findings of
the two Courts below on the issue of readiness and willingness of the plaintiff
to undertake or discharge his obligation to the contract was based upon
evidence and that this Court had undertaken an exercise of re-appreciation of
evidence and as such, the order of this Court was set aside.
8. In view of the aforesaid observation made by Hon'ble Supreme
Court, the issue relating to readiness and willingness of the plaintiff to
perform his part of contract cannot be re-agitated before this Court.
9. The only question to be considered by this Court is regarding the
entitlement of the plaintiff to enforce specific performance of the agreement
or any other relief. In other words, whether in the facts and circumstances of
the present case, the discretionary relief of grant of specific performance of
contract should be granted in favour of the plaintiff or not?
10.1 Learned counsel for the appellants-defendants has drawn
attention of this court towards the fact that as per the own case of the
plaintiff-respondent, the last date for execution of the sale deed after
extension was 31.01.2007 and that suit has been filed for seeking specific
performance on 01.02.2010. Though the suit has been held by Hon'ble
Supreme Court to be within limitation, but still the suit is on the last date
prior to expiry of the limitation. Attention is further drawn by ld. counsel
towards the fact that property in dispute is situated in village Barhi, Tehsil
Ganaur, District Sonepat, which is adjacent to the GT Road and there is a
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phenomenal increase in the prices of the land. It is contended that the plea of
'time is not an essence of the contract', cannot be pleaded in these facts and
circumstances. Attention is drawn further towards the fact that total value of
the suit property as per the agreement works out to be `28,04,175/- and only
an amount of `4 lakh was paid as earnest money. Even the amount of `5 lakh,
which was agreed to be paid by the plaintiff while extending the time for
execution of the sale deed on 16.08.2006 was never paid and that in these
circumstances, plaintiff is not entitled for discretionary relief of specific
performance.
10.2 Learned counsel refers to the following decisions: -
(i) Saradamani Kandappan Vs. S. Rajalakshmi and others, 2011 AIR
SC (Civil) 812
(ii) U.N. Krishnamurthy (since deceased) through LRs Vs. A.M.
Krishnamurthy, 2022 AIR (Supreme Court) 3361
(iii) P. Daivasigamani Vs. S. Sambandan, 2022 AIR (Supreme Court)
(iv) Alagammal and others Vs. Ganesan and another, 2024(1) RCR
(Civil) 502.
11.1 Refuting the aforesaid contentions, it is urged by learned counsel
for the respondent-plaintiff that it is Raj Singh, predecessor-in-interest of the
defendants-appellants, who was required to obtain no objection certificate
but he failed to do so. Repeated legal notices were sent to the legal heirs of
Raj Singh i.e. the defendants to come forward for execution of the sale deed,
but they failed to do so and once it has been found that suit is within
limitation, it is no longer in the discretion of the Court to refuse the specific
performance, as the question of readiness and willingness cannot be
re-agitated before this Court in view of the concurrent findings of the Courts
below, as per the observations made by Hon'ble Supreme Court. Ld. counsel
refers to a decision of Hon'ble Supreme Court rendered in Sughar Singh Vs.
Hari Singh (Dead) through LRs and others, 2021(4) RCR (Civil) 632.
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11.2 It is further argued that hardship to the plaintiffs or the
phenomenal increase in prices cannot be the reason to decline the relief of
specific performance. To support this contention, ld. counsel refers to
decision of Hon'ble Supreme Court rendered in Prakash Chandra Vs. Narayan
and a decision of this Court rendered in Manju Vs. Virender Singh, 2023(4)
RCR (Civil) 167.
12. I have considered submission of both the sides and have
appraised the record.
13. Factual position is not in dispute to the effect that target date for
execution and registration of the sale deed, after agreed extensions, was
31.01.2007 and the suit has been filed on 01.02.2010 i.e. on the last date of
the expiry of the limitation. It is also undisputed that only an earnest money
of `4 lakh was paid at the time of execution of the agreement on 10.04.2006,
out of total price of the suit land, which works out to be above `28 lakh. It is
further undisputed that as per the endorsement dated 16.08.2006 for
extension of target date, an amount of `5 lakh was to be paid up to
10.11.2006, but this additional amount of `5 lakh was never paid by the
plaintiff-respondent.
14. Though, there is reference of obtaining no objection certificate in
the subsequent endorsement for extension of time dated 16.12.2006, but
there was no such stipulation in the agreement. Ld. counsel for the
respondent has been unable to convince this Court as to what sort of no
objection was to be obtained by Raj Singh and from which authority and as
such, the plaintiff-respondent cannot be permitted to take shelter under the
fact that Raj Singh failed to obtain any no objection certificate.
15. The question is that whether in the above said facts and
circumstances, plaintiff deserves to be granted the relief of specific
performance?
16. In the case of Saradamani Kandappan (Supra), Hon'ble Supreme
Court has observed that the law that 'time was not essence of contract' was
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evolved long years back, when prices were stable and inflation was unknown.
However, these days there is galloping increase in prices of immovable
properties. Market values of properties are no longer stable or steady and
therefore, there is an urgent need to revisit the principle that time is not of
the essence in contracts. It will be apt to reproduce the observations made
by the Supreme Court in this regard after referring to a decision in K.S.
Vidyanadam and others Vs. Vairavan, (1997) 3 SCC 1, which read as under: -
"27. 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 and Others vs. Vairavan - (1997) 3 SCC 1 (by
Jeevan Reddy J. who incidentally was a member of the Constitution Bench in
Chand Rani). This Court observed:
"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. .........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)
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
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this case, nor referring the matter to 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.
28. Till the issue is considered in an appropriate case, we can only reiterate
what has been suggested in K.S. Vidyanadam (supra) :
(i) 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) 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. 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 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 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."
17. Taking similar view in the case of U.N. Krishnamurthy (since
deceased) through LRs (Supra), Hon'ble Supreme Court held that the fact that
limitation is three years does not mean that purchaser can wait for one or two
years to file the suit and obtain specific performance. Hon'ble Supreme Court
observed as under: -
"38. In this case, we cannot overlook the fact that the suit property is located
in the industrial town of Hosur located about 30/40 kms. from Bengaluru. The
Court is obliged to take judicial notice of the phenomenal rise in the price of real
estate in Hosur. The proposition finds support from case reported in K.S.
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Vidyanadam v. Vairavan (supra). To quote this Court "we cannot be oblivious to
reality - and the reality is constant and continuous rise in the values of urban
properties -fuelled by large scale migration of people from rural areas to urban
centres and by inflation."
39. Mr. Venugopal argued that the Plaintiff had only paid an insignificant
amount of Rs.10,001/- as advance when the consideration was Rs.15,10,000/-.
Having paid an insignificant amount the Plaintiff was not entitled to
discretionary equitable relief of Specific Performance, as observed by this Court
in Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18. The relevant
paragraph of the judgment of this Court is set out hereinbelow:-
"37. The reality arising from this economic change cannot continue to be
ignored in deciding cases relating to specific performance. The steep
increase in prices is a circumstance which makes it inequitable to grant
the relief of specific performance where the purchaser does not take
steps to complete the sale within the agreed period, and the vendor has
not been responsible for any delay or non-performance. A purchaser can
no longer take shelter under the principle that time is not of essence in
performance of contracts relating to immovable property, to cover his
delays, laches, breaches and 14 (2011) 12 SCC 18 "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
receiving rupees ten thousand as advance may be required to execute a
sale deed a quarter century later by receiving the remaining rupees
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ninety thousand, when the property value has risen to a crore of
rupees."
40. As argued by Mr. Venugopal, the fact that the suit had been filed after
three years, just before expiry of the period of limitation, was also a ground to
decline the Respondent Plaintiff the equitable relief of Specific Performance for
purchase of immovable property. Mr. Venugopal's argument finds support from
the judgments of this Court in P.R. Deb and Associates v. Sunanda Roy (1996) 4
SCC 423; K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1; Manjunath Anandappa
v. Tammanasa (2003) 10 SCC 390, Azhar Sultana v. B. Rajamani (2009) 17 SCC
27; Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18.
41 & 42 Xxxxxxxx.......
43. In Saradamani Kandappan (supra) this Court reiterated that (i) while
exercising discretion in suits for Specific Performance, the Courts should bear in
mind that when the parties prescribed a time 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 purchaser was ready and
willing to perform his part of the contract and (iii) every suit for Specific
Performance need not be decreed merely because it is filed within the period of
limitation, by ignoring 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 one or two years to file a suit and obtain Specific Performance. The three
year period is intended to assist the purchaser 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."
18. In the case of P. Daivasigamani (Supra), after referring to
decisions in the case of K.S. Vidyanadam and others (Supra) and Saradamani
Kandappan (Supra), it has been held by Hon'ble Supreme Court that there is
distinction between limitation and delay and laches. Limitation is a ground for
dismissing a suit, even if the plaintiff is otherwise entitled to specific
performance, while delay operates to determine the discretion and exercise
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under Section 20 of the Specific Relief Act, even if the suit is not dismissed on
account of limitation. It was held further that not one but several aspects
have to be considered when the court, in terms of Section 20 of the Specific
Relief Act exercises discretion, guided by judicial principles, sound and
reasonable.
19. In the case of Alagammal and others (Supra), suit for specific
performance was filed 2½ years after the target date fixed in the agreement.
It was observed by Hon'ble Supreme Court as under: -
"In the case before us, it is not mere delay. It is a case of total inaction on the
part of the plaintiff for 2 1/2 years in clear violation of the terms of agreement
which required him to pay the balance, purchase the stamp papers and then ask
for execution of sale deed within six months. Further, the delay is coupled with
substantial rise in prices -- according to the defendants, three times -- between
the date of agreement and the date of suit notice. The delay has brought about
a situation where it would be inequitable to give the relief of specific
performance to the plaintiff." (Emphasis supplied)
20. In view of the legal position discussed as above and applying the
same to the facts of the present case, this Court is of the view that plaintiff-
respondent is not entitled to the relief of specific performance, having regard
to his conduct, who filed the suit three years after the target date fixed for
execution of the sale deed i.e. on the last date of limitation. The Court also
notices that petty amount of approximately 14% of the total sale
consideration was paid. Even additional amount of `5 lakh agreed to be paid
by the plaintiff while extending the time for execution, was not paid. Prices of
the suit property in the last approximately 20 years have increased
phenomenally and in these circumstances, it will not be a sound exercise of
discretion so as to grant the relief of specific performance in favour of the
respondent-plaintiff. Even in the case of Sughar Singh (Supra), referred by ld.
counsel for the respondent, it has been held by Hon'ble Supreme Court that
the discretion under Section 20 of the Specific Relief Act is required to be
exercised judiciously, soundly and reasonably.
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21. Consequent to the aforesaid discussion, the present appeal is
hereby accepted. The judgment and decree dated 11.09.2014 passed by the
First Appellate Court of ld. Additional District Judge is hereby set aside. The
judgment and decree of the trial Court dated 10.09.2023 of ld. Additional
Civil Judge (Jr. Division), Ganaur is hereby upheld, whereby the defendants-
appellants were directed to return the amount of `4 lakh towards earnest
money to the plaintiff-respondent along with simple interest @ 8% per
annum from the date of filing of the suit till actual realization. The appeal is
accepted accordingly. Parties are left to bear their own costs.
10.09.2024 (DEEPAK GUPTA)
Vivek JUDGE
Whether speaking/reasoned? Yes
Whether reportable? Yes
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