Second Appeal No.282 of 1992

17th November, 2014.

Petitioner Counsel: Ms. M.A. KULKARNI
Respondent Counsel: Mr. M.L. DHARASHIVE

Cases Cited:
Ram Awadh (dead) by L.Rs. and Ors. Vs. Achhaibar Dubey and Anr., 2000(2) ALL MR 565 (S.C.)=AIR 2000 SC 860 [Para 13,28]
Motilal Jain Vs. Smt. Ramdasi Devi and Ors., 2000(4) ALL MR 285 (S.C.)=AIR 2000 SC 2408 (1) [Para 13,21]
Pushparani S.Sundaram and Ors. Vs. Pauline Manomani James (Deceased) and Ors., 2001 AIR SCW 2347 [Para 13,29]
Chand Rani (Smt) (dead) by L.Rs. Vs. Kamal Rani (Smt) (dead) by L.Rs., 2008 ALL SCR (O.C.C.) 33=(1993) 1 SCC 519 [Para 18]

JUDGMENT

JUDGMENT :- Heard Ms. M.A.Kulkarni, learned counsel for the appellants and Mr. M.L.Dharashive, learned counsel for respondent No. 2 (i) to 2 (v) at length.

2. By this Appeal, u/s 100 of the Code of Civil Procedure, 1908 (for short, 'C.P.C.' ), original defendant No. 2 has challenged the Judgment and decree dated 30/06/1980 passed by the learned Civil Judge, Senior Division, Ausa in R.C.S. No. 62/1980, as also the Judgment and decree dated 11/02/1992 passed by the learned Additional District Judge, Latur in R.C.A. No. 96 of 1986. By these orders, the Courts below decreed the Suit instituted by Limbabai D/o Abaji Jamdar through her legal representative for specific performance of contract dated 12/08/1973. The Courts below directed the legal representative of defendant No. 1 Niranjan and defendant No. 2 Venunath Sambha More to jointly execute the registered sale deed in favour of the plaintiff after accepting the consideration of ' 500/- (Rupees Five Hundred only) in respect of house bearing 1166 (old), which is renumbered as 1318/1 (new) admeasuring East-West 87 feet from southern side and 57 feet from northern side and 32 ½ feet North-South including 7 khan Dhaba bounded by Govt. road from East, by the land and house of Dwarkadas from West, by the house of Sambha More from South and the open house No. 1166/1 from northern side at Ausa. (for short, 'suit house'). The Courts below also declared that the sale deed dated 16/07/1977 executed by defendant No. 1 Niranjan in favour of defendant No. 2 Venunath Sambha More is not binding on the plaintiff. Defendant No. 2 is permanently restrained from causing any interference or obstruction in the peaceful possession of the plaintiff over suit house. The parties shall hereinafter referred to as per their status in the trial Court. The relevant and material facts giving rise to the present Second Appeal are as follows.

3. The plaintiff instituted Suit for specific performance of contract dated 12/08/1973 and for perpetual injunction interalia contending that defendant No. 1 Niranjan was the exclusive owner of the suit house. By an agreement dated 12/08/1973 (Exh. 56), defendant No. 1 agreed to sell his house to Limbabai, the original Plaintiff (since deceased), for total consideration of ' 1500/- (Rupees One Thousand Five Hundred only). Defendant No. 1 accepted ' 1000/- (Rupees One Thousand only) towards earnest money. Defendant No. 1 also executed a receipt at Exh. 57 and put plaintiff Limbabai in possession of the suit house. It is further contended that the plaintiff had applied to defendant No. 1 to specifically perform his part of contract, but defendant No. 1 had not done so. The plaintiff further asserted that he was and is still ready and willing to perform his part of contract. On 16/07/1977, defendant No. 2 purchased the suit house despite having notice that defendant No. 1 had already agreed to sell suit house to the plaintiff and handed over possession. The cause of action accrued to plaintiff on 16/07/1977. The plaintiff, therefore, instituted Suit for specific performance of agreement of the suit house and for perpetual injunction restraining defendants No. 1 and 2 from causing any interference or obstruction in the peaceful possession of the plaintiff's possession over the suit house.

4. Defendant No. 2 resisted the Suit by filing Written Statement at Exh. 39 and denied all the adverse allegations against him. It was contended that the document dated 12/08/1973 is a false and forged document and the same is not admitted by him. It was further denied that the plaintiff had purchased the suit property from defendant No. 1 and also taken possession thereof. Defendant No. 2 did not admit execution of the agreement and receipt. It was contended that defendant No. 2 had purchased the suit property on 16/07/1977 by executing registered sale deed. Defendant No. 1 did not file Written Statement.

5. During the pendency of the Suit, defendant No. 1 expired. He was issueless and he died leaving behind Kamlakar, as he was the only legal representative. He was brought on record by the plaintiff. The Suit proceeded only against defendant No. 2 as the contesting party.

6. On the basis of the pleadings of the parties, the learned trial Judge framed necessary Issues. The parties led oral as well as documentary evidence in support of their case. After considering the evidence on record, the learned trial Judge held that plaintiff proved that defendant No. 1 agreed to sell suit house to the plaintiff by agreement of sale dated 12/08/1973. The plaintiff also established that defendant No. 1 executed agreement of sale in respect of the suit premises on 12/08/1973. It was also held that defendant No. 1 had received earnest amount amount of ' 1000/- (Rupees One Thousand only) from the plaintiff and accordingly executed its receipt. The learned trial Judge held that the plaintiff proved her possession over the suit house on the basis of the agreement of sale. The learned trial Judge also held that the plaintiff was and is ready and willing to perform her part of contract. The learned trial Judge further held that the defendant No. 2 is not a bonafide purchaser for value without notice. Defendant No. 2 had purchased the suit house from defendant No. 1 though he was aware of the transaction between plaintiff and defendant No. 1 and that in pursuance thereof, plaintiff was put in possession of the suit house. The learned trial Judge further declared that the sale deed dated 16/07/1977 is not binding on the plaintiff.

7. Aggrieved by that decision, defendant No. 2 preferred Appeal before the District Court. The The learned District Judge dismissed the appeal on 11/02/1992. It is against these decisions, defendant No. 2 has preferred this Appeal.

8. The Appeal was admitted on 30/07/1992 as grounds No. (III) (IX) and (XII) raise substantial questions of law. Grounds No. (III) (IX) and (XII) read as under :

"(III) The learned Judge misconstrued the agreement of sale at Exhibit 56 dated 12th August, 1976 and arrived at a wrong conclusion.

(IX) The learned Judge failed to consider the fact that Section 16 of the Specific Relief Act bars the relief of specific performance of a contract 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 and in view of this provision as the plaintiff has failed to prove that as per the agreement she approached defendant No. 2 with amount of consideration remaining and asked the defendant No. 2 to execute the sale deed and in absence of such readiness, the Suit can not be decreed in favour of the plaintiff.

(XII) The learned Judge failed to consider the fact that under Article 54 of the Limitation Act, Suit of specific performance is to be filed within three years from the date of refusal to perform the contract and as such suit of the plaintiff is failed beyond the period of limitation.

9. In support of this Appeal, Ms. Kulkarni submitted that the Courts below have not properly construed agreement of sale dated 12/08/1973 at Exh. 56, thereby arrived at erroneous conclusion. She submitted that though no date is fixed for performance of contract, nonetheless, it can not be said that there was indefinite period during which plaintiff could institute Suit for specific performance. Though time is not the essence of contract, the agreement imposed duty on the plaintiff to call upon the defendant No. 1 to execute the sale deed. She invited my attention to the relevant recitals of the agreement in that regard. The agreement recited that the total consideration for selling the suit property is ' 15,00/- (Rupees One Thousand Five Hundred only) and that the defendant No. 1 received ' 1,000/- (Rupees One Thousand only) towards earnest amount. The remaining amount of ' 500/- (Rupees Five Hundred only) is to be paid at the time of execution of the sale deed. The plaintiff was to arrange remaining amount of ' 500/- (Rupees Five Hundred only) and was to call upon the defendant No. 1 for executing sale deed in his favour. Ms. Kulkarni submitted that in paragraph 5 of the plaint, it is merely asserted that he had applied to the defendant to specifically perform the agreement on his part, but the defendant No. 1 has not done so. However, no details are furnished in paragraph 5 as regards the date and time when he called upon the defendant No. 1 to perform his part of contract. That apart, the plaintiff did not issue any notice calling upon the defendant No. 1 to execute the sale deed and straight way instituted Suit for specific performance of contract. She submitted that since the plaintiff did not issue any notice calling upon defendant No. 1 to execute the sale deed before instituting the Suit, the plaintiff can not maintain the Suit for specific performance of contract.

10. Ms. Kulkarni further submitted that the plaintiff was and is not ready and willing to perform his part of contract. Paragraph 5 of the plaint though confirms form No. 47 prescribed under C.P.C., no details are given therein. She further submitted that no cause of action was accrued to the plaintiff for instituting the Suit. In that regard, she invited my attention to the assertions made in paragraph 8 of the plaint. She further submitted that the plaintiff has neither pleaded nor proved his continuous readyness and willingness and, therefore, the Courts below committed error in decreeing the Suit. She submitted that after the agreement of sale dated 12/08/1973, plaintiff did not do any overt act and kept silence till institution of the Suit. In other words, plaintiff had abandoned/waived his right to claim specific performance of contract. This is more so when defendant No. 1 had sold the suit property in favour of defendant No. 2 on 16/07/1977. This is also not a fit case for exercising discretion in favour of the plaintiff while granting specific performance. In that regard, she relied upon Section 20 of the Specific Relief Act, 1963. She also invited my attention to the evidence of Kamlakar at Exh. 52 and submitted that perusal of his testimony also shows that plaintiff did not establish readyness and willingness. Though in paragraph 5 of the plaint, it is contended that plaintiff had applied to defendant No. 1 for specific performance of contract, no such application is produced on record. What is produced on record are the applications dated 21/09/1978 (Exh. 60) and 25/04/1979 (Exh. 61). These applications are made by the original plaintiff to the Chief Officer, Municipal Council, Ausa. In other words, no application as contemplated by agreement of sale dated 12/08/1973 was ever made by the plaintiff.

11. Ms. Kulkarni further submitted that even though defendant No. 2 did not set up plea of limitation in Written Statement, having regard to Section 3 of the Limitation Act, the Court is obliged to dismiss the Suit even if limitation has not been set up as a defence.

12. Ms. Kulkarni invited my attention to the findings recorded by the Courts below and in particular paragraph 7 of the trial Court's Judgment. The learned trial Court observed that plaintiff asserted in the plaint that he was ready and willing to perform his part of contract, but it was defendant No. 1 who refused. She submitted that the said finding is contrary to the evidence on record and is not supported by any evidence. On the other hand, the plaintiff did not produce any application to substantiate his contentions in paragraph 5 that he had applied to defendant No. 1 for performing his part of contract. She further submitted that the learned District Judge while formulating points for determination, did not frame point as regards readyness and willingness of the plaintiff.

13. In support of her submissions, she relied upon following decisions:

(i) Ram Awadh (dead) by L.Rs. and others Vs. Achhaibar Dubey and another, AIR 2000 Supreme Court 860 : [2000(2) ALL MR 565 (S.C.)] to contend that where the plaintiff who fails to aver and to prove readiness and willingness to perform his part of agreement, relief of specific performance may not be granted.

(ii) Motilal Jain Vs. Smt. Ramdasi Devi and others, AIR 2000 Supreme Court 2408 (1) : [2000(4) ALL MR 285 (S.C.)] to contend that delay in filing the Suit for specific performance is relevant factor. The aspects of delay are relevant in case of specific performance of contract for sale of immovable property : (i) Delay running beyond the period prescribed under the Limitation Act : (ii) Delay in cases where though the suits are within the period of limitation, yet (a) due to delay the third parties have acquired rights in the subject-matter of suit; (b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief.

(iii) Pushparani S.Sundaram and others Vs. Pauline Manomani James (Deceased) and others, 2001 AIR SCW 2347 to contend that since no notice was issued by the plaintiff to defendant No. 1 before instituting the Suit, it ought to be held that the plaintiff did not establish his readyness and willingness. Mere plea about readyness and willingness without proof thereof is not sufficient for granting relief of specific performance.

14. Lastly, she submitted that the Suit is even otherwise barred by limitation under Article 54 of the Limitation Act, 1963, as the agreement of sale was executed on 12/08/1973 and the Suit is instituted on 05/02/1980. For all these reasons, she submitted that the impugned orders are liable to be quashed and set aside, thereby dismissing the Suit instituted by the plaintiff for specific performance of contract.

15. On the other hand, Mr. M.L.Dharashive supported the impugned orders. He submitted that P.W. 1 Kamlakar deposed that original plaintiff Limbabai was ready and willing to perform her part of contract. Even P.W. 1, who was brought on record after the death of original plaintiff, deposed that he was and is ready and willing to perform his part of contract, viz. payment of balance consideration of ' 500/- (Rupees Five Hundred only). In other words, both Limbabai and Kamlakar were and are ready and willing to perform their part of contract. He further submitted that the courts below after considering the evidence on record have concurrently decreed the suit by holding that plaintiff was and is ready and willing to perform his part of contract. Plaintiff has pleaded and proved his readiness and willingness. He submitted that defendant No. 2 is not a bonafide purchaser for value without notice. Defendant No. 2 was aware that in pursuance of agreement of sale, original plaintiff was put in possession. Despite that, defendant No. 2 purchased the suit property from defendant No. 1. He submitted that the courts below after appreciating the evidence on record, have concurrently held that the defendant No. 2 is not a bonafide purchaser. The relief of specific performance being an equitable relief, the courts below have properly exercised discretion in favour of the plaintiff while granting the relief. In view of the conduct of the defendant No. 2, no case is made out for invoking powers of this Court u/s 100 of C.P.C.

16. I have considered rival submissions of the learned counsel for the parties. I have also perused the material on record as also original record.

17. As noted earlier, the Appeal was admitted on grounds No. (iii), (ix) and (xii) as they raise substantial questions of law. Ms. Kulkarni submitted that the courts below did not construe the agreement of sale dated 12/08/1973 properly and arrived at wrong conclusion. It is not possible to accept this submission. Perusal of the recitals of the agreement shows that no time is fixed for performance of contract. It however does not mean that the agreement stipulated indefinite period for performance of contract. Section 46 of the Indian Contract Act, 1872 lays down that where, by the contract, a promiser is to perform his promise without application by the promisee and no time for performance is specified, the engagement must be performed within a reasonable time. Explanation thereto lays down that the question "what is a reasonable time", is, in each particular case, a question of fact. The question, therefore, is whether in the facts and circumstances of the present case, it can be said that the plaintiff demanded specific performance within a reasonable time or not.

18. In the case of Chand Rani (Smt) (dead) by L.Rs. Vs. Kamal Rani (Smt) (dead) by L.Rs., (1993) 1 Supreme Court Cases 519 : [2008 ALL SCR (O.C.C.) 33], the Constitution Bench held in paragraph 19 as under,

"It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language".

19. The Apex Court thereafter considered earlier decisions, as also Section 55 of the Contract Act. After considering the Judgments, it was observed in paragraph 25 thus,

"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 evidence :

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".

20. In the present case, admittedly, the agreement does not stipulate any specific period. The parties to the agreement did not issue any notice to make the time as an essence of contract. Having regard to the settled position in law that in a suit for specific performance, generally time is not essence of contract, the courts below after appreciating the evidence on record, have concurrently held that plaintiff has made out a case for grant of specific performance. Section 3 of the Limitation Act undoubtedly lays down that even though limitation has not been set up, if the suit is instituted, after the prescribed period of limitation, the court shall dismiss the suit. In the first place, there is no refusal on the part of the defendant No. 1 to perform his part of contract by issuing notice as contemplated under Article 54 of the Limitation Act. No material is produced on record to show that defendant No. 1 refused to perform his part of contract. Secondly, no period of limitation is prescribed in the agreement of sale. Thirdly and more importantly, limitation, in the facts and circumstances of the case, is not a pure question of law but is a mixed question of law and fact. Admittedly, defendant No. 2 did not take up a plea that suit is barred by limitation. As noted earlier, explanation to Section 46 lays down that the question what is a reasonable time is a question of fact. The Courts below have concurrently decreed the suit.

21. Ms. Kulkarni relied upon decision of the Apex Court in the case of Motilal Jain, [2000(4) ALL MR 285 (S.C.)] (supra). In the case of Motilal, [2000(4) ALL MR 285 (S.C.)] (supra), the Apex Court has held that aspects of delay are relevant in the case of specific performance of contract for sale of immovable property, namely (i) Delay running beyond the period prescribed under the Limitation Act; (ii) Delay in cases where though the suits are within the period of limitation, yet (a) due to delay the third parties have acquired rights in the subject matter of suit; (b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief. In that case, plaintiff had entered into agreement for consideration of ' 25,000/- (Rupees Twenty Five Thousand only), out of which he had paid ' 17,000/- (Rupees Seventeen Thousand only) at the time of execution of agreement of sale. The balance of ' 8,000/- (Rupees Eight Thousand only) was to be paid within five months at the time of execution of registered sale deed in favour of the plaintiff. The plaintiff sent notice on 15/03/1978 and thereafter on 04/04/1978 and finally on 26/11/1978. The plaintiff thereafter instituted Suit in the year 1979. The learned trial Judge decreed the Suit. The High Court confirmed the finding of the trial court that defendant executed agreement of sale. High Court, however, noted that the suit was filed after two years of the accrual of the cause of action and and after about one year of last notice issued on 26/11/1978 and from the averment in the plaint, the readiness and willingness could not be inferred. It was further held that there was no evidence to prove the readiness and willingness. The High Court accordingly set aside the Judgment of the trial Court with regard to relief of specific performance, but granted decree for compensation. The Apex Court observed in paragraph 6 that the last notice was issued on 26/11/1978 and from that date, the Suit was filed only after 9 months and not after more than one year. Therefore, on the facts the ground of delay can not be invoked to deny the relief to the plaintiff. As noted earlier, the courts below have held that plaintiff has made out case for grant of specific relief. I have also held that suit can not be said to be barred by limitation. In view thereof, the reliance placed on Motilal Jain's case, [2000(4) ALL MR 285 (S.C.)] (supra) does not advance the case of the plaintiff.

22. Ms. Kulkarni submitted that there is discrepancy as regards mentioning the number of the property in the agreement of sale and in the plaint. The courts below did not find any discrepancy as regards number in mentioning suit property in the agreement of sale and the plaint. I do not see any good and valid reason for taking a different view.

23. The submission advanced by Ms. Kulkarni that the courts below misconstrued the agreement of sale dated 12/08/1973 at Exh. 56 and arrived at wrong conclusion is unacceptable. For the reasons already indicated, I do not see that the courts below have committed any error in that regard.

24. Ms. Kulkarni submitted that the courts below have committed any error in granting relief of specific performance when the plaintiff had neither pleaded nor proved his readiness and willingness. In paragraph 5, plaintiff had made general averments in conformity with form No. 47 of C.P.C.. However, no details are given. In fact, plaintiff never made any application to defendant No. 1 calling upon him to execute the sale deed. The applications at Exhs. 60 and 61 were made to the Municipal Council and not to the defendant No. 1. Thus, since the plaintiff did not make any application to defendant No. 1 or did not issue any notice to defendant No. 1 before instituting the Suit, the courts also ought to have dismissed the Suit on this ground alone. I do not find any merit in this submission.

25. Perusal of paragraph 5 of the plaint with form No. 47 of C.P.C. shows that plaintiff, in tune with form No. 47, has made assertions in paragraph 5. The submission that no details are given by the plaintiff in paragraph 5 is also not acceptable as it is a matter of evidence. The courts below after appreciating the evidence of P.W. 1 Kamlakar, have recorded finding that Limbabai as also P.W. 1 both were and are ready and willing to perform their part of contract. It is also material to note that total consideration was fixed as ' 1500/- (Rupees One Thousand Five Hundred only), out of that, plaintiff had paid ' 1000/- (Rupees One Thousand only) towards earnest amount and the remaining amount was ' 500/- (Rupees Five Hundred only) to be paid at the time of execution of the sale deed.

26. Ms. Kulkarni further submitted that no cause of action is pleaded in the plaint. Perusal of paragraphs 7 and 8 of the plaint clearly shows that plaintiff has pleaded necessary facts showing the accrual of cause of action.

27. Ms. Kulkarni further submitted that, in any case, after execution of agreement of sale on 12/08/1973, no overt act was done by the plaintiff. The silence of the plaintiff amounts to waiver of his claim towards specific performance. As I have already indicated that Suit is neither barred by law of limitation nor it can be said that it was filed after expiry of reasonable time, I do not find any merit in the submission of Ms. Kulkarni. This is more so when in pursuance of the agreement of sale, the plaintiff was already put in possession of the suit property.

28. Ms. Kulkarni relied upon the decision referred in the case of Ram Awadh, [2000(2) ALL MR 565 (S.C.)] (supra). The Apex Court observed in paragraph 6 that the obligation imposed by Section 16 is upon the Court not to grant specific performance to a plaintiff who has not met the requirements of Clauses (a), (b) and ( c) thereof. A Court may not, therefore, grant to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement, the specific performance whereof he seeks. In the present case, I have already held that the plaintiff has pleaded and proved his continuous readiness and willingness. In view thereof the decision in the case of Ram Awadh, [2000(2) ALL MR 565 (S.C.)] (supra) does not advance the case of defendant No. 1.

29. Ms. Kulkarni submitted that plaintiff did not make any application to the defendant No. 1. She also did not issue any notice to the defendant No. 1 calling upon him to perform his part of contract. The plaintiff is, therefore, not ready and willing to perform his part of contract. She relied upon the decision of Pushparani (supra). In that case, it was observed that except for a mere plea about readiness and willingness, there was no other evidence on record to prove the same. In the present case, plaintiff has not only pleaded but also proved his readiness and willingness. The plaintiff instituted the Suit that itself constitutes the notice to the defendant No. 1.

30. That finally takes me to the question whether defendant No. 2 can be said to be the bonafide purchaser. The courts below have held that in pursuance of the agreement of sale, original plaintiff was put in possession of the suit property. Defendant No. 2 was aware of this fact and despite that he purchased the suit house. The Courts below, therefore, held that defendant No. 2 can not be said to be a bonafide purchaser for value without notice. The said finding is purely finding of fact based upon appreciation of evidence on record. I, therefore, do not find that the courts below committed any error in decreeing the Suit.

31. In the result, Appeal fails and the same is dismissed. It has to be held that the suit is not barred by limitation as there was no refusal on the part of the defendant No. 1 to perform his part of contract. The suit instituted therefore is not by limitation. The substantial questions of law as framed are answered accordingly.

32. In view of dismissal of the Appeal, C.A. Nos. 2234 of 1992 and 2235 of 1992 do not survive and the same are also disposed of.

33. At this stage, Ms. Kulkarnni states that interim relief, that was operating pending the Appeal, may be continued for a period of eight weeks. She states that by the interim order, decree for execution of the sale deed was stayed by this Court. In view thereof, notwithstanding the dismissal of the Appeal, the sale deed shall not be executed for a period of eight weeks from today. Order accordingly.

Appeal dismissed.