Smt B. Pankajam vs Ram Singh
2022 Latest Caselaw 2424 Tel

              HON'BLE SMT. JUSTICE P.SREE SUDHA

                        C.C.C.A.No.160 of 2011

                            JUDGMENT

1. This appeal is directed against the judgment and decree

dated 30.05.2011 passed in O.S.No.7 of 2007 on the file of the

learned I Additional Chief Judge, City Civil Court at

Secunderabad.

2. One Ram Singh-plaintiff filed suit seeking specific

performance of the agreement of sale and for perpetual

injunction over Plot bearing No.11 in Sy.No.74/12 admeasuring

292.6 square metres along with two rooms situated at East

Marredpally, Secunderabad, (hereinafter called as 'suit plot')

against B.Pankajam and B.Mamtha-wife and daughter of late

M.Babu-defendants. The plaintiff would state that late M.Babu

purchased the suit plot from one Harinarayan Rathi vide Sale

Deed dated 07.04.1993 and thereafter he offered to sell the suit

plot to the plaintiff for a total consideration of Rs.17,00,000/-.

Accordingly, an Agreement of Sale-cum-General Power of

Attorney (with possession) dated 01.04.2004 was executed and

on the same day the plaintiff paid an amount of Rs.1,00,000/-

through Account Payee Cheque drawn on A.P.Mahesh

Co-operative Urban Bank Limited, West Marredpally Branch,

Secunderabad, to late M.Babu and it was agreed between both

the parties that the remaining balance sale consideration was to

be paid on or before 31.12.2004. The plaintiff would contend

that late M.Babu agreed to obtain all necessary and required

permissions, clearances etc. for completing the sale transaction

and also delivered possession to him in part performance of the

agreement. The plaintiff would also submit that since the date of

agreement he is in lawful possession of the suit plot and that he

also constructed two rooms along with compound wall and gate

with his own expenses and obtained electricity connection also.

The plaintiff would also state that he was ready and willing to

pay the balance sale consideration and the sale deed is to be

executed in his favour. Late M.Babu died on 29.04.2006. After

knowing about the death of M.Babu, the plaintiff visited his

house and informed regarding execution of agreement of sale in

his favour by M.Babu to the defendants as well as to the sister

of Late M.Babu. He would submit that as there was no response

from the defendants, he got issued a legal notice on 20.10.2006

calling upon them to execute the sale deed by receiving the

balance sale consideration, for which the defendants issued a

reply notice dated 20.10.2006 and returned Rs.1,00,000/- by

way of cheque dated 16.10.2006. The defendants in their reply

notice stated that the agreement of sale-cum-general power of

attorney executed by Late M.Babu was as a security to the

money lend by the plaintiff to M.Babu and the value of the

property was not less than Rs.30,00,000/- during the year 2004

and there is no necessity for them to sell the suit plot and that

the plaintiff failed to pay the balance sale consideration on or

before 31.12.2004 and he should have obtained consent from

Late M.Babu for extending time and that the possession was not

delivered to him. Merely permitting to stock materials in one

room which was built by Late M.Babu, does not mean that

possession was delivered to him. The suit agreement is not valid

without paying stamp duty and penalty and it ought to have

been registered. The Government filed a suit in LGC No.167 of

1997 claiming that the land in the vicinity of the suit plot is a

Government land. In the suit plot there was a compound wall

with gate in existence and that the plaintiff constructed only one

room while the other room was constructed by Late M.Babu.

3. In support of his case, the plaintiff examined himself as

P.W.1 and the attestor of the suit agreement as P.W.2. Exs.A1 to

A7 are marked on behalf of the plaintiff. The first defendant

examined herself as D.W.1 and marked Exs.B1 to B28 on her

behalf. The trial Court after considering the oral and

documentary evidence available on record, decreed the suit

directing the defendants to receive the balance consideration of

Rs.16,00,000/- and execute the sale deed within two months

from the date of judgment, failing which the plaintiff was

directed to deposit the amount in the Court within one month.

Aggrieved by the said judgment and decree, the defendants in

the suit preferred this appeal.

4. For the sake of convenience, the parties hereinafter are

referred to as arrayed in the suit.

5. Heard the learned counsel appearing for the appellants

and the learned counsel appearing for the respondent.

6. The trial Court in its judgment observed that there are

several strong circumstances to show that deceased M.Babu

executed agreement of sale dated 01.04.2004 only with an

intention to sell the suit plot to the plaintiff but not as a security

as contended by the defendants. The recital of Ex.A1 goes to

show that possession of the suit plot was also delivered to the

plaintiff and he constructed two rooms and a compound wall

with gate. If at all the plaintiff obtained Ex.A1 only as a security,

he would not have constructed any rooms in it. Apart from that

the plaintiff obtained electricity connection to the suit plot.

D.W.1 is residing in another house, which is nearer to the suit

plot and it is not her case that she is residing in the suit plot.

D.W.1 got executed Ex.B5 notice to the officials of the Municipal

Corporation to demolish the unauthorized constructions made

by the plaintiff in the suit plot. She also gave a reminder under

Ex.B12 to the Municipal Corporation for not taking action. If at

all her husband has really constructed the rooms in the suit

plot, she would not have given complaint to the authorities for

its demolition. Therefore, her contention that Late M.Babu had

no necessity to sell the suit plot is not proved. Ex.B2 is the

application addressed by the Late M.Babu to the Mandal

Revenue Officer, requesting for regularisation of the suit plot

and Ex.B1 is the Memo issued from the Office of the Collector,

Hyderabad District. He sent an application under Ex.B3 format

and Ex.B4 is the Memo issued by the Officer of the Collector to

file a fresh application for the purpose of regularisation. It

clearly shows that he was trying to get regularisation of the suit

plot. D.W.1 did not file any document to show that the land

grabbing case was filed by her husband regarding the suit plot,

may be survey number was included in the Government land.

The plaintiff was prepared to purchase the suit plot knowing

about the regularisation process. It was also observed by the

trial Court that Ex.A1 was sent to the District Collector for

impounding and for collection of necessary stamp duty and

penalty. He relied upon the case law of this Court reported in

T.A.KHAJA HUSSAIN V/S. C.IRSHAD BASHA NIZAMI1 in

which it was held that sale agreement cannot be questioned on

the ground of its being unregistered. An unregistered document

can be received as evidence of a contract in a suit for specific

performance as per Section 49 of the Registration Act, 1908.

The trial Court also observed that the suit agreement relates to

the immovable property and it was a vacant land when the

same was given in possession to the plaintiff. The executant late

M.Babu or the defendants never issued any notice to the

plaintiffs demanding him to pay the balance sale consideration

within the stipulated time or afterwards. Moreover, suit plot was

not regularised by the Government by that time. As per Ex.A6

the market value of the property was Rs.39,20,380/- as on

07.11.2006 and as per Ex.B28 the market value was shown as

Rs.8,450/- per square yard in the year 2004. There was no

recital in Ex.A1 that time is the essence of the Contract. As

such, the plaintiff entitled for an equitable relief of specific

2009 (6) ALD 497

performance against the defendants. As the first defendant

made an attempt for demolition of the constructions made by

the plaintiffs over the suit plot, permanent injunction was also

granted.

7. Aggrieved by the said Judgment and decree the

defendants in the suit preferred this appeal by contending that

no issue was framed regarding the readiness and willingness of

the plaintiff in performing his part of the contact. Learned

counsel for the appellants-defendants would further contend

that only small amount was taken as advance for the value of

the property, and therefore, the preponderance of probabilities

being not in the nature of an agreement of sale and it was also

erroneously held by the trial Court that time is not the essence

of the contract and there was specific mention regarding the

specific date on or before which the plaintiff has to pay the

balance sale consideration. He would also contend that there is

no evidence to show that the plaintiff ever offered to pay the

balance sale consideration on or before 31.12.2004 or even

afterwards. He would also assert that a person who fails to aver

and prove that he has performed or has always been ready and

willing to perform the essential terms of the contract which are

to be performed by him is barred from claiming specific

performance.

8. Learned counsel for the appellant would mainly contend

that the so called agreement was only a security offered in

respect of the hand loan of Rs.1,00,000/- obtained by late

M.Babu. As the plaintiff was not a money lender, the learned

counsel would state that he cannot pay Rs.1,00,000/- on a

promissory note and as such the Late M.Babu-husband of the

first appellant executed the said agreement. Learned counsel

would also argue that the attitude and conduct of the plaintiff in

not taking any steps from the date agreement clearly shows that

he was trying to trespassing into the suit plot after sudden

demise of M.Babu and constructed a room unauthorisedly. He

would also contend that the trial Court grossly erred in holding

that plaintiff is in possession of the suit plot and granted decree

in his favour without actually looking into the facts of the case.

9. The plaintiff was examined as P.W1. During his cross-

examination he admitted that he has not paid the balance sale

consideration of Rs.16,00,000/- on or before 31.12.2004 to late

M.Babu. He also agreed that after the agreement M.Babu was

alive for two years and twenty eight days and he did not wrote

any letter to him during his life time stating that he was ready

to pay the balance sale consideration. But he stated that he had

informed to the deceased orally and also admitted that the said

fact was not mentioned in the plaint. He further admitted that

the cheque returned by the first defendant on 16.10.2006 was

with him. D.W.2 is the brother-in-law of the plaintiff and the

attestor to the agreement of sale.

10. The first defendant was examined herself as D.W.1 and

deposed that the agreement-cum-general power of attorney is

not an agreement of sale and it was executed only as a security

for the loan of Rs.1,00,000/- obtained by her husband from the

plaintiff and as such she returned the same. Perusal of the

agreement of sale (with possession dated 01.04.2004) clearly

shows that late M.Babu executed the said agreement of sale in

favour of plaintiff for sale of the suit plot for a total

consideration of Rs.17,00,000/- and the plaintiff paid

Rs.1,00,000/- on the same day and it was agreed that the

balance amount of Rs.16,00,000/- would be paid on or before

31.12.2004. Late M.Babu agreed to obtain all necessary and

required permissions and clearances for completing and

executing the sale transactions and furnished the Xerox copies

of the same to the plaintiff. He also handed over possession of

the suit plot as part of performance of the agreement of sale-

cum-general power of attorney and agreed to pay all taxes, cess,

charges etc., up to the date of execution of the deed and will

handed over the receipts to the plaintiff. He further stated that if

there is any defect found or established in the title of the suit

plot, he will rectify such defects at his own costs. If at all the

plaintiff is deprived of whole or part of the suit plot, he shall

indemnify and reimburse the loss caused to him. He also

appointed the plaintiff as true and lawful general power of

attorney and permitted to execute sale deeds in favour of third

parties. Apart from that he also stated that plaintiff is

authorised to apply and obtain all necessary certificates

permissions, clearances from the competent

authorities/departments for transferring the suit schedule

property. The trial Court further observed that the nature of the

document and contents of the document clearly goes to show

that it is an agreement of sale executed by late M.Babu in

favour of plaintiff and he received Rs.1,00,000/- towards part

performance and also authorized the plaintiff to obtain all

necessary certificates, permissions and clearances. The

argument of the first defendant that it was only executed as a

security cannot be accepted.

11. From the above backdrop, now it is for this Court to

decide whether the plaintiff was ready and willing to perform his

part of contract and if so, whether the time is essence of the

contract or not.

12. Now in the agreement it was clearly mentioned that the

balance amount of Rs.16,00,000/- is to be deposited on or

before 31.12.2004 and it was not stated specifically anywhere

that the time is the essence of the contract, but the said fact is

to be ascertained by the Court on considering the terms of the

agreement, contentions of the respective parties and the

surrounding circumstances. As the plaintiff filed suit for specific

performance of the contract, it is necessary that he should

establish high standard of equitable conduct. In a case reported

in Smt. SHYAMABAI V/s. RAMKISAN2 it was held that

"readiness and willingness are sometimes treated as

synonymous and have almost the same sense or meaning

but there is a clear cut distinction between the two while

'willingness' is merely mental process, 'readiness' is

something to do with translating that will into action and

is preceded by necessary preparation for being in a

position to be ready. In other words, we can say that while

2008 (3) ALL MR 189

'willingness' may be something to do mainly with a

person's mental process to do an act, his readiness implies

close proximity of such willingness and its ultimate

physical manifestation. 'Readiness' must in all cases be

backed by 'willingness' and its imminent physical action is

demonstrated when it is about to be put into action. Time

lag between the two may sometimes be very short, may

even be negligible, but it must always be preceded by an

intention or a will to do. In short, 'readiness' must be said

to be the total equipment of a person who is willing to do a

thing before he actually does it ... since in granting

specific performance the Court acts in equity, it becomes

necessary that a high standard of equitable conduct must

be displayed by the plaintiff..."

13. The plaintiff herein is the alleged purchaser of the suit

plot and he approached the Court for discretionary remedy and

he must come to the Court on proper disclosure of the facts. He

has not stated anywhere that he had complied with the

conditions of the agreement and deposited the balance sale

consideration amount on or before 31.12.2004. He simply

stated that he orally offered the amount to late M.Babu but the

said fact was not even mentioned by him in the plaint.

Admittedly, the suit plot was sold for an amount of

Rs.17,00,000/- and on taking a token amount of Rs.1,00,000/-

the possession was also delivered to him and he was specifically

directed to deposit the amount within eight months from the

date of the agreement, which is a reasonable time given to him

for payment of the balance sale consideration. The plaintiff

never made any attempt either to pay the balance sale

consideration or sought time for extension in respect of the

payment of balance sale consideration. Learned counsel for the

plaintiff simply argued that time is not the essence of the

contract and the trial Court also observed that as it is not

specifically mentioned in the agreement that the time is not the

essence of the contract.

14. There was no prior acquaintance between the plaintiff and

late M.Babu at the time of entering into agreement of sale. As

such, a specific time was mentioned in the agreement with

regard to deposit of the balance sale consideration of

Rs.16,00,000/-. In fact, possession was also handed over and

the plaintiff was appointed as lawful general power of attorney.

He has not made any efforts to obtain necessary certificates,

permissions or clearances from the competent authorities on or

before 31.12.2004 or even during the life time of late M.Babu.

The plaintiff simply kept quiet and enjoying the possession of

the suit plot. He got constructed a compound wall along with

two rooms in the suit plot and also obtained electricity

connection. The defendants clearly stated that the value of the

suit plot during the year 2004 was nearly Rs.30,00,000/- and to

that effect they also filed certificate issued by the Sub-Registrar,

Marredpally and they further stated that there is no necessity

for the husband to sell the said plot for a meagre amount of

Rs.17,00,000/-.

15. The conduct of the plaintiff prior to and subsequent to the

filing of the suit, attendant circumstances and availability of

funds to pay the balance sale consideration are relevant factors

to be considered by the Court before granting a discretionary

relief of specific performance. There is total inaction on the part

of the plaintiff. The agreement was entered into on 01.04.2004

and M.Babu was died in the year 2006. So he kept quiet for

nearly two years twenty eight days. In the meanwhile, there was

substantial raise in the price of the suit plot and the defendants

opposed for the execution of the sale deed in his favour.

16. Learned counsel for the appellant relied upon the decision

reported in N.P.THIRUGNANAM (Died) BY Lrs. V/s.

Dr.RJAGAN MOHAN RAO3 wherein it was held that "it is

settled law that remedy for specific performance is an

equitable remedy and it is in the discretion of the court,

which discretion requires to be exercised according to

settled principles of law and not arbitrarily as

adumbrated under Section 29 of the Specific Relief Act,

1963. Under Section 20, the court is not bound to grant the

relief just because there was a valid agreement of sale.

Section 16(c) of the Act envisages that the plaintiff must

plead and prove that he had performed or has always been

ready and willing to perform the essential terms of the

contract which are to be performed by him, other than

those terms the performance of which has been prevented

or waived by the defendant. The continuous readiness and

willingness on the part of the plaintiff is a condition

precedent to grant the relief of specific performance. This

circumstance is material and relevant and is required to

be considered by the court while granting or refusing to

grant the relief. If the plaintiff fails to either aver or prove

the same, he must fail. To adjudge whether the plaintiff is

ready and willing to perform his part of the contract, the

(1995) 5 SCC 115

court must take into consideration the conduct of the

plaintiff prior and subsequent to the filing of the suit

along with other attending circumstances. The amount of

consideration which he has to pay to the defendant must

of necessity be proved to be available. Right from the date

of the execution till date of the decree he must prove that

he is ready and has always been willing to perform his

part of the contract. As stated, the factum of his readiness

and willingness to perform his 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."

17. The trial Court without properly appreciating the conduct

of the plaintiff observed that late M.Babu has not issued any

notice and not demanded the sale consideration. As the plaintiff

was in possession of the suit plot, there is an onerous

responsibility on his part to deposit the balance sale

consideration on or before 31.12.2004 and to get the sale deed

executed in his favour. What transpired between the plaintiff

and late M.Babu is not known to the Court as he kept quiet till

the demise of late M.Babu and he cannot take advantage of his

own mistake.

18. In JITENDER KUMAR V/s. VIJENDER KUMAR4 it was

held as that '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 make it inequitable to grant the relief of specific

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.

2018 SCC OnLine Del. 12315

Adding to the misery is the delay in disposal of cases

relating to specific performance, as suits and appeal there

from routinely take two to three decades to attain finality.

As a result, an owner agreeing to see a property for rupees

one lakh and received rupees two thousand as advance

may be required to execute a sale deed a quarter century

later by receiving the remaining rupees ninety thousand,

then the property value has risen to a crore of rupees.'

19. In an agreement of sale even if the date is not mentioned

for payment of the sale consideration, the balance sale

consideration is to be paid within a reasonable time. Therefore

the argument of the learned counsel for the plaintiff that in a

suit for specific performance, time is not the essence of the

contract is not sustainable. As the plaintiff herein failed to

deposit the balance sale consideration on or before 31.12.2004

and even afterwards during the life time of M.Babu, his conduct

is devoid of bona fides. It is not his contention that he was

always ready and willing to perform his part of contract and in

fact he has also not taken out a cheque in favour of late M.Babu

or deposited the same immediately after filing of the suit in the

Court. Moreover, the plaintiff has not even deposited

Rs.1,00,000/- cheque returned by D.W.1 along with legal

notice. From the above facts, it is clear that the plaintiff want to

take advantage of the sudden demise of M.Babu and

helplessness nature of his wife and child to grab the suit plot for

a much lesser amount than the market value and hence he is

not entitled for the discretionary relief of specific performance

and the trial Court erroneously decreed the suit in his favour

and the same is liable to be set aside.

20. In the result, the appeal is allowed and the judgment and

decree dated 30.05.2011 passed in O.S.No.7 of 2007 on the file

of the learned I Additional Chief Judge, City Civil Court at

Secunderabad, is set aside. However there shall be no order as

to costs.

21. Miscellaneous Petitions, if any, pending in this appeal

shall stand closed in the light of this final order.

____________________ P.SREE SUDHA, J.

8th JUNE, 2022.

PGS