Dismissed

A.Kanthudu v. S.Venkat Narayana

Andhra Pradesh HC14 Dec 2023AS/678/2007

Case brief

AI extract

What is this about?

The appellant challenged the trial court's decree for specific performance of an agreement of sale. The single judge held the agreement valid and binding, finding the defendant attempted to unilaterally cancel it without contractual authority. The appeal was dismissed, confirming the decree.

What did the court decide?

Appeal dismissed; decree dated 25.10.2007 in O.S.No.8 of 2005 confirmed.

A.Kanthudu Vs S.Venkat Narayana — Specific Performance | Andhra Pradesh HC (2023)

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THE HON’BLE SRI JUSTICE V.SRINIVAS

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APPEAL SUIT No.678 of 2007

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JUDGMENT:

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This regular appeal under Section 96 Code of Civil Procedure (hereinafter referred to as ‘CPC’) is directed against the decree and judgment in O.S.No.8 of 2005 dated 25.10.2007 on the file of the Court of learned I Additional District Judge, Kurnool.

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The defendant, before the trial Court, is the appellant. The respondent herein is the plaintiff.

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The respondent instituted the suit for specific performance of agreement of sale.

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Before adverting to the material and evidence on record and nature of findings in the judgment of the trial Court, it is necessary to scan through the case pleaded by the parties in their respective pleadings.

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The case of the respondent/plaintiff in brief in the plaint was as follows:

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(i) The appellant has been in possession and enjoyment of the plaint schedule property of an extent of Ac.3.00 cents in Survey No.5 of Pasupula Village since 21.12.1995, having purchased the same under a

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registered sale deed. He offered to sell the same to the respondent and respondent agreed to purchase the same for a consideration of Rs.12,35,000/-. On 11.01.2005, respondent paid an amount of Rs.35,000/to the appellant towards advance, also agreed to pay the remaining amount at the time of execution of regular sale deed, thereby executed an agreement of sale and on the same day appellant handedover photostat copy of registered sale deed dated 21.12.1995 to the respondent. As per the terms and conditions of the said agreement of sale, respondent has to pay the balance sale consideration on or before 11.02.2005 and obtain a regular sale deed.

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(ii) On 22.01.2005, respondent approached the appellant with balance sale consideration and requested him to receive the same and execute a sale deed in his favour. But appellant expressed personal inconvenience to receive the same and execute the sale

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deed and informed that he would receive the same on 05.02.2005 and asked the respondent to come to the Office of Sub-Registrar.

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(iii) On 27.01.2005, the respondent received a legal notice got issued by the sisters of the appellant with false and frivolous allegations. Then the respondent approached the appellant, who inturn informed that he would come to the Office of Sub-Registrar on 05.02.2005. On that respondent went to the office of Sub-Registrar with balance sale consideration and waited till 05.00 p.m. on 05.02.2005, but the appellant did not turn up for the reasons best known to him. As the due date was approaching, respondent deposited the balance sale consideration of Rs.12,70,000/- in Andhra Bank, Ashok Nagar Branch on 07.02.2005.

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(iv) Then the respondent received a legal notice dated 05.02.2005 from the appellant with false allegations along with Banker’s Cheque bearing No.750012 dated

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05.02.2005 for Rs.35,000/-, wherein it was mentioned that the agreement of sale is cancelled. The Banker’s Cheque with mis-description is in the hands of the respondent un-encashed, because he is not agreed for appellant’s illegal attempt to cancel the agreement of sale. Then the respondent got issued a telegraph notice on 09.02.2005 demanding the appellant to receive the amount and execute sale deed in his favour. Hence, the suit.

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The appellant/defendant denying all the allegations in the plaint and contending in the written statement as follows: (i) Having come to know about the existence of false agreement of sale, appellant returned Rs.35,000/- to the respondent and issued a legal notice to the respondent to the effect that the alleged agreement of sale was cancelled. The personal deposit of Rs.12,70,000/- made by the respondent will not amounts to comply of condition of said agreement. The respondent is not entitled to get the sale registered as there is no consensus ad idem . There is

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no concluded contract between the parties. There is no cause of action to file the suit. Hence, prays to dismiss the suit with costs.

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On these pleadings, the trial Court settled the following issues for trial:

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“1.Whether the agreement of sale dated 11.01.2005 is true, valid and binding on the defendant?

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2.Whether there is no consensus ad idem and contract is vitiated by fraud and misrepresentation, as being claimed by the defendant? and

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3.To what relief?”

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At the trial, on behalf of the respondent/plaintiff, P.Ws.1 to 3 were examined while relying on Exs.A.1 to A.12 in support of his contentions. On behalf of the appellant/defendant, D.W.1 was examined and no documents were exhibited.

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Basing on the material and evidence, trial Court came to conclusion that the agreement of sale dated 11.10.2005 is true, valid and binding on the appellant and the respondent

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is entitled for the relief of specific performance. Thus, decreed the suit.

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It is against this decree and judgment, the

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appellant/defendant preferred this appeal.

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Heard Sri Y.Mallikarjuna Reddy, learned counsel for the appellant/defendant and Sri R.Gopi Mohan, learned counsel for the respondent/plaintiff.

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For the sake of convenience, the parties hereinafter referred to as they arrayed before the trial Court.

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It is against this backdrop, the following points, which arise for determination need consideration now:

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Whether the agreement of sale dated 11.01.2005 is true, valid and binding on the defendant?

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Whether there is no consensus ad idem between the parties and the contract is vitiated under misrepresentation and fraud as claimed by the defendant?

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Whether the Court below failed to follow the judgment of the Hon’ble Supreme Court while receiving the documents?

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Whether the defendant is entitled to cancel the agreement unilaterally?

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Whether the receipt of advance amount of Rs.35,000/- is quite meager, when the agreed amount of sale of land is more than value of Rs.12,00,000/-and cannot be placed reliance on the advance amount said to be received?

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Whether there is any concluded contract or agreement to enforce the same in this case?

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Whether there is any unfair advantage to the plaintiff over the defendant? and

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To what relief?

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Before answering the above points, this Court would like to refer the brief arguments advanced by the learned counsel on both sides.

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Sri Y.Mallikarjuna Reddy, learned counsel for the appellant/defendant submits that the relief of specific performance is purely discretionary and equitable relief as specified under Section 20 of Specific Relief Act, 1963 and the discretion is vested with the Court and that while exercising such discretion and equities, the Court is required to

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consider all pros and consequences of the case as may call on to parties in exerting the discretion as well it is not used as an instrument of oppression to have undue advantage to the plaintiff.

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He further submits that the Court below not properly appreciated the pleadings and evidence of both parties to come to conclusion that there is consensus ad idem. 17. He also submits that on 27.01.2007 itself, plaintiff received a notice from the sisters of the defendant claiming shares in suit property and resisted the agreement of sale made by the defendant; that despite of notice, the contention of the plaintiff that he visited the office of Sub-Registrar, Kurnool on 05.02.2005 with balance amount and waited till 05.00 p.m. are all false; that the plaintiff also pleaded in his pleadings as well received legal notice dated 05.02.2005 from the defendant along with banker’s cheque bearing No.750012 for Rs.35,000/- by cancelling the agreement and that

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subsequent to it on 09.02.2005 plaintiff got issued a notice demanding for specific performance by the defendant.

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He further submits that when P.W.1/plaintiff categorically admitted that he is doing real estate business, thus, he had knowledge about the disputes and notices regarding land properties etc., and having admitted receipt of notice from the sisters of defendant as well defendant on 05.02.2005 clearly goes to show the misrepresentation and fraud payed on the defendant by the plaintiff. When P.W.1 himself admitted receipt of legal notice, he did not express his readiness in writing to obtain registered sale deed from the defendant. It goes to show that he is not ready and willing to perform his part of contract. 19. He further submits that plaintiff himself admitted that he did not pay the remaining amount of Rs.12,00,000/- to the defendant and deposited the same in his account does not mean to say he is ready and willing to perform his part of contract and that plaintiff knows well that defendant already

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cancel the agreement. More so, P.W.1 himself admitted that he did not inform to the defendant about the deposit of amount into his account, which goes to show that he is not ready and willing to perform his contract.

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He further submits that the trial Court went on wrong in giving weight to the testimony of P.Ws.2 and 3 and their evidence is not much effective, because P.W.2 categorically admitted that he did not know as to what happened after execution of agreement of sale; that defendant is having four sisters and when Ex.A.1 was executed, none of the family members were present, as well P.W.3 also admitted that the agreement under Ex.A.1 was prepared on white paper as counter of registration office to sell the stamp papers was closed, are all created for the purpose of this case. P.W.3 categorically admitted that subsequent to execution of the agreement of sale under Ex.A.1, the plaintiff did not approach him and the plaintiff being document writer himself read and write his documents.

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He further submits that though defendant subjected to lengthy cross examination, but nothing was elicited to disbelieve his testimony and he stated that an amount of Rs.35,000/- was given to him, was returned within a week from the date immediately and that he has categorically mentioned in his notice that he cancelled the agreement as his sisters and family members are not agreed for the same. 22. He further submits that there is no concluded contract or agreement to enforce it. Because, the plaintiff paid very meager amount as an advance out of total sale consideration of Rs.12,35,000/-; that even the said advance amount of Rs.35,000/- was sent back by the defendant through banker’s cheque within the time specified in the agreement; that defendant got cancelled the agreement by issuing notice; that plaintiff kept the banker’s cheque with him and that except parting of such meager amount, there is no amount spent by the plaintiff under the agreement. As such, there is

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no concluded contract of agreement to enforce the same under specific performance.

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He further submits that as per Section 20(2)(a)(c) the trial Court gives the plaintiff an unfair advantage over the defendant, when the defendant entered into contract under the circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance; that the trial Court may properly exercise the discretion to decree the specific performance as in the present case the plaintiff has not done any substantial acts or suffered losses in consequence of contract capable of specific performance and that the trial Court failed to consider the facts and evidence on record.

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He further submits that the Court below has to consider the fact that even if it is proved by the plaintiff that the defendant committed breach of suit agreement and substantial loss was caused to the plaintiff, the court below

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ought to have granted compensation to the extent of loss suffered is sufficient instead of grant of specific performance. 25. He further submits that the defendant is an illiterate, agriculturist and living by cultivation; that he is having sisters and children and admittedly his father purchased the said property in his name; that on the other hand, plaintiff is a man of real estate and fraudulently obtained suit agreement without consent and knowledge of his family members, if really the plaintiff fairly obtained suit agreement, he could have negotiate with the family members of the defendant and entered into suit agreement by paying substantial amount as an advance under the suit agreement; that Kurnool is a big city and there are licensed stamp vendors in the city and he could get the stamp papers from any licensed stamp vendor and engross the document; that the evidence of plaintiff witnesses not explained about the execution of suit agreement on plain paper, despite availability of stamp vendors in the Kurnool city, clearly

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proves that the plaintiff has played fraud on defendant and obtained suit agreement on plain paper without giving time to the defendant to think with his family members and execute the suit agreement with their consent. Thus, it is proved that the agreement is obtained by playing fraud and without knowledge of family members of the defendant and approached the Court with unclean hands to gain unfair advantage over the defendant and to grab the suit property at cheaper rate. On the other hand, immediately after execution of agreement by the defendant, sisters of the defendant got issued a notice as well defendant returned the advance amount, which goes to show that the agreement was cancelled, as such, the agreement of sale was not a concluded agreement and not in existence. Moreover, if the plaintiff did not encash the banker’s cheque sent by the defendant, he would have return the same to the defendant under proper acknowledgment. So, it is nothing but

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acceptance of refund of advance amount. Thereby, the plaintiff has no right to enforce the agreement.

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He further submits that since the defendant cancelled the agreement as well return he advance amount, no loss or injustice caused to the plaintiff as Ex.A.1 is non possessory agreement and it is cancelled under notice dated 05.02.2005 by refund of advance amount to the plaintiff. Thereby, agreement is not in subsistence as on the date of filing the suit. Hence, it is not enforceable. Despite the cancellation of said agreement and refund of advance amount immediately, filing of suit for specific performance by the plaintiff shows his evil intention and motive to grab the suit property; that the trial Court ought to have considered all these aspects and maintain equities and balance.

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In support of his contention, he placed reliance on the judgments of Hon’ble Supreme Court between A.C.Arulappan v. AAhlaya Vaik¹ , Sahadeva Gramani v. Perumal Gramani² ,

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1 AIR 2001 SC 2783

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2 (2005) 11 SCC 454

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Parakunnan Veetill Joseph’s Son Mathev v. Nedumbara Kuruvila’s Son³ , Hemanta Mondal v. Ganesh Chandra Nasker⁴ , B.R.Mulani v. A.B.Aswathanarayana⁵ , Jain Narain Parasram Puria v. Pushapa Devi Saraf⁶ , judgments of the High Court of A.P. reported between S.Kanaka Durga Manikyomba v. Rama Pragada Swamy Prakara Rao⁷ , P.Pandit Rao v. K.Damodar Rao⁸ , D.Vijayalakshmi v. T.K.Vijay Kumar⁹ , Pushpagiri Muti v. C.Indiramma¹⁰ and the judgment of Hon’ble Privy Council between Ramji Patel v. Rao Kishore Singh¹¹ .

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As against the same, Sri R.Gopi Mohan, learned counsel for the respondent, submits that after entering into agreement of sale, defendant failed to perform his part of contract, though the plaintiff is always ready and willing to perform the contract; that on the other hand, with an illegal

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3 AIR 1987 SC 2328

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4 AIR 2015 SC 3757

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5 AIR 1993 SC 138

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6 (2006) 7 SCC 756

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7 AIR 2010 2 AP 99

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8 2005 (5) ALD (AP) 646

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9 2012 (1) ALD 759

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10 AIR 2003 AP 379

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11 AIR 1929 PC 190

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motive instigated his sisters to issue legal notice as if subject property is joint family property and the evidence on record clearly indicates that it is an absolute property of the defendant.

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He further submits that by duly informing to the defendant, plaintiff went to the Sub-Registrar Officer at Kurnool on 11.02.2005 with balance sale consideration, but the defendant did not turn up and failed to perform his part of contract.

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He further submits that as per Ex.A.1 agreement, it is a condition that plaintiff has to pay the remaining consideration on or before 11.02.2005 and to get registered on his expenses; that when the plaintiff failed to pay the remaining consideration, the advance paid shall be forfeited and agreement shall be cancelled and if the defendant fails to come for registration when the plaintiff calls, plaintiff shall get the registration through Court of law by deposit the remaining sale consideration. In the present case, plaintiff

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deposited the balance sale consideration in the bank and intimated to the defendant about his ready and willingness. 31. He further submits that the contention of the defendant that he got cancelled the agreement of sale by notice dated 05.02.2005, but the said notice contain any legally tenable grounds, stating that his family members are not willing to sell the property as per the agreement of sale and in the notice, it is got mentioned that agreement of sale is cancelled. But, in-fact, the defendant is not entitled to cancel the agreement unilaterally when the plaintiff is willing and ready to pay the balance sale consideration and to obtain registered sale deed at his expenses.

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He further submits regarding unfair advantage over the defendant by the plaintiff that the said defence is liable to be rejected, because defendant always trying to wriggle out of the contract. Hence, defendant cannot take advantage of his own wrong and then pleaded that the grant of specific performance of agreement would amount to an unfair

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advantage. In the present case, defendant entered into an agreement on 11.01.2005 and agreed to register the property on 11.02.2005. Immediately, he instigated his sister to issue a notice claiming share in the subject property. For which, plaintiff got issued a reply notice on 09.02.205. Meanwhile, defendant issued a legal notice cancelled the agreement of sale unilaterally on the ground that his family members are not agreed to sell the property. For which, plaintiff issued a reply notice, dated 09.02.2005 and expressed his ready and willingness to perform his part of contract and call for execution of regular sale deed by receiving balance sale consideration, but he did not receive any reply.

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He further submits that while pending the appeal, defendant admittedly created thirty party interest by way of sale deed document No.5139 of 2009 dated 31.07.2009 for Rs.1,86,000/- and subsequently cancelled the said registered sale deed under cancellation document No.3511 of 2013 dated 20.05.2013. Thereafter, on the same day he executed a

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partition deed between him, his sons and daughter, wherein he allotted the suit schedule property to his two sons, he and his daughter taken only Rs.1,00,000/- each by showing the property allotted to his sons value is Rs.5,00,000/- and Rs.10,00,000/-. All these acts of the defendant clearly go to show that subsequent to execution of the agreement of sale, he is trying to wriggle out of the contract. Hence, the defendant cannot take advantage of his own wrong and then pleaded that the grant of decree of specific performance would amount to an unfair advantage to the plaintiff.

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He further submits that the defendant did not seek any stay of depositing the remaining consideration in this Court or in trial Court. But, as per the orders of the Court, plaintiff deposited Rs.12,00,000/on 02.11.2007. Hence, the contention of the defendant that plaintiff did not done any substantial acts or suffered losses in consequences of suit agreement is absolutely wrong. In these circumstances, the appeal is liable to be dismissed with costs.

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In support of his contention, he relied upon judgment of the Hon’ble Supreme Court between Nirmala Anand v. Advent Corporation Private Limited¹² and judgments of the High Court of A.P. between T.Krishna Goud v. Sabitha Kamaluddin¹³ and Kalipatnapu Atchutamma v. Kommana Sambamurthy¹⁴ .

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36. POINT No.3 :

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For this point, this Court perused Ex.A.3 photostat copy of sale deed, dated 21.12.1995, Ex.A.4 photostat copy of Pattadar Passbook, Ex.A.5 photostat copy of Title Deed of defendant, Ex.A.7 photostat copy of Reply Legal Notice, dated 09.02.2005 and Ex.A.8 photostat copy legal notice along with copy of Banker’s Cheque, dated 05.02.2005 for Rs.35,000/-. 37. All these documents are concerned, in the pleadings and evidence of the plaintiff stated that the defendant himself got issued Ex.A.8 legal notice to the plaintiff in the month of February 2005. Exs.A.3 to A.5 photostat copies of sale deed,

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12 2002 CJ (SC) 731

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13 2010 CJ (AP) 839

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14 2002 CJ (AP) 636

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pattadhar pass book and title deed of the defendant are concerned, when plaintiff seeks to produce the originals of said documents under Ex.A.2 memo, in which it is categorically mentioned by the learned counsel for the plaintiff requesting the defendant for cause production of the original registered sale deed dated 21.09.1995 standing in his name and also original pattadhar passbook and title deed issued in the name of the defendant before the Court on 19.04.2006 or on any future date to which the above suit stands posted. For which, learned counsel for the defendant received notice, but kept silent over the said memo. The defendant neither filed original sale deed or title deed or pattadhar passbook into the Court, which are said to be exclusive possession of the defendant nor give any reply on Ex.A.2 memo.

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On the other hand, he allowed the plaintiff to mark the photostat copies, which said to have been handed over to the plaintiff at the time of agreement of sale, which goes any

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amount of doubt over the case of the defendant that the trial Court committed error in receipt of the secondary evidence in the place of original documents.

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It is an admitted fact that even Ex.A.8 photostat copy of the notice is available with the defendant as an office copy, but he did not choose to file the same nor stated anywhere that the plaintiff has withdrawn the amount sent by him by way of cheque. On the other hand, erroneously finding fault with the trial Court while receiving the secondary evidence under Section 65 of the Evidence Act. It is a specific contention made by the plaintiff that inspite of demand made by him requesting the defendant to produce originals, defendant knowing fully well that those documents are with him only, allowed the plaintiff to file the photostat copies. Even after receipt of notice/memo covered under Ex.A.2, the defendant failed to cause production of the documents which were call upon by the plaintiff to produce the same. For all these reasons, the trial Court followed the judgment of the

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Hon’ble Supreme Court while receiving the documents, which is prohibited under Section 65 of Evidence Act. Thus, this point is answered accordingly in favour of plaintiff.

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40. POINT Nos.1, 2, 4 & 6 :

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In-order to answer the above points, as seen from the testimony of P.W.1, defendant agreed to sell the plaint schedule property for a total consideration of Rs.12,35,000/and executed an agreement of sale on 11.01.2005 after receipt of advance amount of Rs.35,000/- and immediately after receipt of the advance amount, defendant affixed his thumb impression on the sale agreement.

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As could be seen from the written statement, it is contended by the defendant that he never transacted with the plaintiff or any others for sale of schedule land and so the alleged agreement cannot be said to have arisen out of the genuine talks of the transaction.

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In view of the claim made by the plaintiff that the defendant offered and agreed to sell the suit schedule

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property and when defendant says never transacted with the plaintiff or other person for sale of the suit schedule property, this Court perused Ex.A.8 legal notice said to have been issued on behalf of the defendant on 05.02.2005, in which the defendant categorically made a mention that he sold Ac.03.00 cents of land in Survey No.5 of Pasupula Village for Rs.12,35,000/- on 11.01.2005 and received Rs.35,000/- as an advance. So, the said statement culled out from Ex.A.8 cannot be denied by the defendant while he was in witness box, clearly goes to show that the agreement of sale dated 11.01.2005 is a true and genuine document. 43. Whether agreement of sale is valid, binding and there is consensus ad idem between the parties and whether defendant is entitled to cancel the said agreement unilaterally is concerned, this Court would state that unilateral cancellation of contract is not permissible without proper justification or compliance with contractual terms. The terms of contract itself govern whether unilateral cancellation is

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allowed. Unilateral cancellation without valid reasons and without adhering to contractual obligations may be considered as violation of his duty. Contacts often include provisions related to termination, cancellation, and breach of contract. Review the contract to understand the agreed upon terms. Contracts may include clauses specifying the conditions under which one party can terminate the agreement. These clauses might outline notice periods, grounds for termination and any associated penalties or consequences. If one party breaches the terms of the contract, the other party may have the right to cancel or terminate the contract. However, the breach must be material, and the non-breaching party typically needs to provide notice and, in some cases, an opportunity to cure the breach.

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Herein this case, as could be seen from Ex.A.1 time fixed as per the document is the defendant executed the agreement of sale on 11.01.2005 in favour of plaintiff

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agreeing to sell the schedule property for a consideration of Rs.12,35,000/- and after receipt of advance amount of Rs.35,000/- from the plaintiff also agreed to execute the regular sale seed on receipt of balance sale consideration on 11.02.2005. Before that, there is no clause or condition mentioned in Ex.A.1 to say that there is a permissible clause with the vendor/defendant/appellant to cancel the agreement unilaterally.

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In the case on hand, no such clause was made in the agreement which permits rather govern the defendant to cancel the same unilaterally. May be true, as there are so many grounds for cancellation of the agreement, but those grounds can legally valid or not, has to be explained. Admittedly, Ex.A.1 does not contain a clause of cancellation and only one clause is breach of contract that if on 11.02.2025, the defendant did not agree for registration, the plaintiff shall get the registration through Court of law by depositing the remaining sale consideration or if the plaintiff

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did not come for registration, the advance amount paid shall be forfeited and agreement shall be cancelled. But there is no clause in Ex.A.5 to review the contract.

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It is a settled principle that if one party breaches the terms of contract, the other party may have right to cancel or terminate the contract. However, the breach must be material and non-breaching party typically needs to provide notice.

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In the present case on hand, till 11.02.2005, defendant is not having any right to terminate or cancel the agreement rather review the contract, who understand the agreed upon terms. It is found from the record that plaintiff after issuing notice on 09.02.2005 covered under Ex.A.11, immediately filed the suit dated 18.02.2005. In which, he reiterated that agreement is still valid and sustaining on the defendant and he is ready and willing to perform his part of contract and defendant is also bound by the terms of the contract and obliged to perform part of his contract according to the terms of the agreement.

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Another important aspect, which was referred during

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the arguments in the appeal, is that there is no concluded contract at all. In this regard, this Court would like to mentioned that a concluded contract refers to a legally binding agreement between two or more parties. When parties reach an agreement on the essential terms of a contract, and there is an intention to create legal relations, the contract is considered concluded. This is often accompanied by an offer, acceptance, consideration and a mutual understanding of the terms and the contract must the reduced in writing.

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In this case, Ex.A.1 agreement of sale was reduced into writing and as per pleading of the plaintiff there is an offer, acceptance and consideration is also mentioned and according to the plaintiff there was a mutual understanding of the terms and same was reiterated by P.W.1, which was supported by the evidence of P.W.2, who said to be witness to the agreement as well P.W.3 document writer.

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In this context, it is relevant to state in respect of the concluded contract the APEX Court in Karnataka Power

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Transmission Corporation Limited v. JSW Energy

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Limited¹⁵ , held that:

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"In order that there must be a contract concluded, undoubtedly, there must be a proposal made, which must be accepted. There must be consideration for the promise. The proposal must be accepted, which must be communicated, as already explained. The acceptance must be unqualified. This is an oversimplification of a complex process. We say this, as the parties can be said to have entered into a contract or a contract would be said to be concluded only when they are ad idem on all the essential terms of the contract. In other words, if the proposals containing the essential terms have been accepted, and the acceptance is communicated and, if the other conditions in Section 2 of the Indian Contract Act are complied with, viz. , that is there is consideration and the contract is enforceable in law, within the meaning of Section 2 of the Contract Act, it would lead to the creation of a concluded contract."

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15 (2023) 5 SCC 541 equivalent to 2022 LiveLaw (SC) 981

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In the above judgment, there is a reference regarding consensus ad idem in all essential terms of contract. For which, it is the contention of the plaintiff that the defendant himself under Ex.A.8 categorically stated that he agreed to sell the Ac.03.00 cents of land in Survey No.5 of Pasupula Village for Rs.12,35,000/- on 11.01.2005 and received Rs.35,000/- as an advance. It is needless to say that admitted facts need not be proved. Even during the cross examination of P.Ws.1 to 3, nothing was elicited to disbelieve their testimony so far as agreement of sale and contents mentioned therein. The evidence of P.Ws.1 to 3 cogent, convincing, and consistent. With regard to execution of Ex.A.1 is concerned, P.Ws.2 and 3 are independent witness and their testimony cannot be dismissed rather discredited on flimsy grounds. On close perusal of evidence of P.Ws.1 to 3 as well documents covered under Exs.A.1, A.3 to A.9 and A.11, clearly established that defendant executed Ex.A.1 agreement of sale in favour of plaintiff on 11.01.2005.

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Coming to the point of consensus ad idem is concerned, there is no dispute with regard to the identity of the property and there is no dispute that defendant intended to sell the same. On the other hand, he went on to say in the written statement that he never offered to sell the suit schedule property to anyone, whereas Ex.A.8 clearly goes to show that himself agreed to sell the same and executed Ex.A.1. The defendant did not offer to sell the property is concerned, the document referred in Exs.A.1, A.3 to A.9 clearly goes to show with regard to the suit schedule property alone. There was a transaction taken place in between plaintiff and defendant and defendant is very much aware that land being sold to the plaintiff, otherwise he would not have issued Ex.A.8 notice. Thus, it is clinching to establish that defendant intended to sell the suit schedule property to the plaintiff. Thereby, material placed on record in particularly before the trail Court clearly shows that there is consensus ad idem in

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between the plaintiff and defendant, otherwise Ex.A.1 would not have been executed.

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In this context, it is also to be taken care whether there is any fraud played by the plaintiff while obtaining Ex.A.1 as it is urged by the defendant that plaintiff played fraud on him and obtained the document. For that, it is for the defendant to plead and prove rather to establish the fraud allegedly played by the plaintiff to bring the agreement under Ex.A.1 with all preponderance of probabilities. A mere assertion in the written statement or chief examination affidavit of D.W.1 by itself is not sufficient to stand on the defendant’s contention that the plaintiff payed fraud in obtaining Ex.A.1 agreement.

¶144

On careful perusal of Ex.A.8 legal notice, which was got issued by the defendant through his counsel, shows that defendant intended to cancel the agreement due to his family members are not in favour of sale of the property. Nowhere, it was mentioned in Ex.A.8 that the plaintiff played fraud and it

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was not even made any specific pleading about the manner in

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which the plaintiff played fraud on him in obtaining Ex.A.1 agreement of sale. All the times, he consistently stated that his sisters have right under the said property, if that is the case, the burden is on the defendant to place evidence that his sisters are also having right over the property and they did not accept for agreement of sale. He did not plead so. Any amount of oral evidence without a specific plea is not permissible under law and it is a settled legal position. More so, neither his sisters nor any piece of paper produced by the defendant to prove his contention.

¶148

The testimony of D.W.1 is silent with regard to the

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manner of fraud said to be played by the plaintiff. Simply rather using the words fraud itself is not sufficient. Above all in Ex.A.8 in second para defendant mentioned that he sold Ac.03.00 cents of land in Survey No.5 of Pasupula Village for Rs.12,35,000/- on 11.01.2005 and received Rs.35,000/-. In

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Para No.3 it is averred that after the agreement of sale

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entered on 11.01.2005, defendant explained the same with his family members and his family members are not in favour of the sale and the attachment to the said land by the family members from the year, 1995 is very strong and the family members are objecting for sale of the land. Thereby, in para No.4 averred that defendant is not prepared to sell the land. Nowhere in Ex.A.8 mentioned that plaintiff played fraud on him and obtained Ex.A.1. Thereafter, in-order to wriggle out of the contract, he started with a plea stated that his family members had a very strong attachment with the suit schedule property and objecting to sell the same, thereby he is not prepared to sell the property. If really there is no consensus ad idem, he would have stated the same in Ex.A.8 itself, but he mentioned that his family members are not accepted to sell the suit schedule property in favour of plaintiff. The unequivocal admissions referred above in Ex.A.8 categorically shows that the defendant accepted to sell

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the property and executed agreement of sale covered under Ex.A.1.

¶155

Apart from the above, strangely he come out with a new plea in the evidence affidavit as D.W.1 that a real estate businessman has been concocted the sale agreement in white paper and obtained signatures and then threatened the defendant to come to his terms. It is an admitted fact that defendant is a ‘marks’ man and his contention is that real estate businessman obtained his signatures, which is stated in the chief examination of D.W.1, itself is a false theory introduced. Not only the said theory, but also stated that the suit schedule property, which stands in his name, is not that of his exclusive property. Whereas the document covered under Ex.A.3 goes to show that the defendant is the exclusive owner of the schedule property. More so, the defendant did not disclose the name of the real estate businessman, who said to have obtained his signatures, which indicates that

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somehow defendant intended to avoid execution of regular sale deed in favour of plaintiff.

¶158

Agreement of sale came into existence on 11.01.2005. So called cancellation covered under Ex.A.8 sent on 05.02.2005. If really plaintiff obtained Ex.A.1 by playing fraud, he would not have waited till 05.02.2005 and even if that is true, he might have specifically made a mention in Ex.A.8 that plaintiff played fraud and obtained Ex.A.1. But, for the first time in his written statement defendant comes up with a plea of fraud. So, it all goes to show his defence has no legs to stand.

¶159

On the other hand, it is all clear that there was consensus ad idem between the plaintiff and defendant in execution of Ex.A.1 agreement of sale, dated 11.01.2005.

¶160

In this context, it is relevant to state about unilateral cancellation of agreement of sale by one party is not permissible under law, except where the agreement is determinable in terms of Section 14 of Specific Relief Act.

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Such cancellation cannot be raised as a defence in a suit for specific performance. If such unilateral cancellation of nondeterminable agreement is permitted as a defence then virtually every suit for specific performance can be frustrated by the defendant. Therefore, the Specific Reliefs Act has made detailed provision for this aspect. The bare perusal of the provisions of the Specific Relief Act shows that once a party claims the right of revocation or rescission of the agreement then such a party is required to seek a declaration from the Court regarding the validity of revocation or rescission, as the case may be. In the present case also, it was not the duty caste upon the plaintiff to challenge the alleged cancellation of the agreement, which, otherwise, also not proved on record. On the contrary, if the defendant so claimed that he had valid reasons to terminate the contract or rescind the contract then he should have sought a declaration from the competent Court, as required under Sections 27 and 31 of Specific Relief Act. Admittedly, so far defendant has not taken

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any such declarative suit for cancellation of the agreement of sale, except claimed that he has cancelled the agreement.

¶165

Now coming to any misrepresentation is concerned, even for that defendant has to plead and prove that there was a misrepresentation on the part of the plaintiff. When there is no material on record that there was a misrepresentation on the part of the plaintiff in obtaining Ex.A.1 agreement of sale, the agreement covered under Ex.A.1, dated 11.101.2005 is valid and binding on the defendant. Thus, these points are answered against the appellant/defendant and in favour of the respondent/plaintiff.

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61. POINT Nos.5 & 7 :

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The agreed amount of sale of land is more than Rs.12,00,000/and receipt of advance amount of Rs.35,000/- is quite meagre. On this aspect, except the selfserving testimony of D.W.1, there is no other evidence. Even in Ex.A.8 notice also, he is not mentioned worth of the plaint schedule property is more than Rs.12,35,000/- as on the

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date of execution of sale, thereby it seems that it is an afterthought. However, even the defendant established that the value of the property is more than rupees twelve lakhs, he requires to execute the sale deed in favour of plaintiff as per the agreement of sale under Ex.A.1, but absolutely no such evidence on record to show that the land is more than worth of rupees twelve lakhs as on the date of execution. The trial Court has elaborately and rightly discussed on this point and rightly came to conclusion that the defendant failed to prove that the suit land is more than Rs.12,35,000/- as on the date of execution of Ex.A.1. 62. Now the point that arises for consideration is whether plaintiff is ready and willing to perform his part of contract is concerned, until and unless the defendant is able to establish that the plaintiff is not ready and willing to perform his part of contract, the Court can grant decree, for which the Court taken into consideration conduct of the plaintiff pre and

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subsequent to filing of the suit along with other attending circumstances.

¶172

As could be seen from Ex.A.1, the balance consideration of Rs.12,00,000/- is concerned, plaintiff has to pay the same on or before 11.02.2005 and according to P.W.1 on 21.01.2005, he approached the defendant with balance sale consideration for execution of regular sale deed and as per the testimony of P.W.1, defendant promised that he will execute the regular sale deed. But, strangely on 27.01.2005, sisters of the defendant got issued a legal notice under Ex.A.6 to the plaintiff. Subsequently, in the year, 2007 as per the orders of the Court, he deposited an amount of Rs.12,00,000/- into the bank. This particular aspect is not disputed by the defendant. Moreover, it is not the contention of the defendant that plaintiff has no capacity. 64. On the other hand, it is established that defendant deposited an amount of Rs.12,75,000/-in Andhra Bank, Ashok Nagar Branch, Kurnool on 07.02.2005 to show that

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the plaintiff has been ready and willing to pay the balance consideration of Rs.12,00,000/-. As per Ex.A.1, plaintiff has to pay balance consideration on or before 11.02.2005 and obtain regular sale deed. From the facts placed on record, it is well established that the plaintiff is always ready and willing to perform his part of contract.

¶175

The defendant, in-order to wriggle out of the contract rather to avoid execution of regular sale deed, initially taken a plea that this property is attached with his family and they do not want to sell the same and thereafter come with another plea that some real estate business man obtain his signatures, though he only put his thumb impression on Ex.A.1 being a rustic man, and also come with another plea of misrepresentation and fraud. So, one after another the defendant taken a plea that the plaintiff is not entitled to seek decree of specific performance.

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In this context, it is relevant to make a mention a

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judgment of Hon’ble Supreme Court between Ramathal v. Maruthathal¹⁶ , wherein at Paragraph No.22 held as follows:

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“22. The buyer has taken prompt steps to file a suit for specific performance as soon as the execution of the sale was stalled by the seller. From this discussion, it is clear that the buyer has always been ready and willing to perform his part of the contract at all stages. Moreover, it is the seller who had always been trying to wriggle out of the contract. Now the seller cannot take advantage of their own wrong and then plead that the grant of decree of specific performance would be inequitable. Escalation of prices cannot be a ground for denying the relief of specific performance. Specific performance is an equitable relief and granting the relief is the discretion of the court. The discretion has to be exercised by the court judicially and within the settled principles of law. Absolutely there is no illegality or infirmity in the judgments of the courts below, which has judicially exercised its discretion and the High Court ought not to have interfered with the same.”

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16 (2018) 18 SCC 303

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44 A.S.No.678 of 2007

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From the above, it is clear that the buyer or the plaintiff has always been ready and willing to perform his part of the contract at all stages. Moreover, it is the seller or defendant who had always been trying to wriggle out of the contract. Now the seller cannot take advantage of their own wrong and then plead that the grant of decree of specific performance would be inequitable. In the above judgment, it is also mentioned that escalation of prices cannot be a ground for denying the relief of specific performance. Specific performance is an equitable relief and granting the relief is the discretion of the court. The discretion has to be exercised by the court judicially and within the settled principles of law.

¶183

In Nirmala Anand v. Advent Corporation (p) Limited¹⁷ , the Hon’ble Supreme Court specifically held that a Court of appeal should not ordinarily interfere with the discretion exercised by the Courts below.

¶184

The defendant also canvassed that the plaintiff has unfair advantage in this case. In this context, there is a

¶185

17 (2002) (6) ALD 54 (SC)

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judgment of the Division Bench of this Court reported between T.Krishna Goud v. Sabiha Kamaluddin¹⁸ , wherein

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at Paragraph Nos.46 to 48 held as follows:

¶189

“46. Section 10 of the Act provides that specific performance of any contract may be enforced when there exists no standard for ascertaining the actual damage caused by the non-performance of an act agreed to be done, or when the agreed act is such that compensation in money for its nonperformance would not afford adequate relief.

¶190

Granting such relief is within the discretion of the Court. The said provision also provides that unless and until the contrary is proved, the Court should presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money.

¶191

The instant case does not fall within the exceptions falling in other provisions of Chapter-II, which provide for non-enforceable contracts. Demonstrably, the defendant has also not proved that the breach of contract could be adequately compensated in money.”

¶192

18 2010 SCC Online AP 729

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46 A.S.No.678 of 2007

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From the above, it is very clear that Section 10 of the Specific Relief Act provides that specific performance of any contract may be enforced when there exists no standard for ascertaining the actual damage caused by the non-performance of an act agreed to be done, or when the agreed act is such that compensation in money for its nonperformance would not afford adequate relief.

¶195

It is also further held in the said judgment that unless and until the contrary is proved, the Court should presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money.

¶196

In the present case on hand also defendant has not proved any breach of contract committed by the plaintiff to adequately compensate in money.

¶197

So far as subsequent rise in price of property is concerned, it is also well settled by the Hon’ble Supreme Court in a judgment reported between K.Prakash v. B.R.

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Sampath Kumar¹⁹ , wherein at Paragraph No.18 held as follows:

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“18. Subsequent rise in the price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed.”

¶201

From the above, it is very clear that subsequent rise in the price will not be treated as a hardship entailing refusal of the decree for specific performance.

¶202

Even in 2012, the Hon’ble Supreme Court in Narinderjit

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Singh v. North Star Estate Promoters Limited²⁰ , held at Paragraph No.25 that:

¶204

“25. We are also inclined to agree with the lower appellate court that escalation in the price of the land cannot, by itself, be a ground for denying relief of specific performance. In K.Narendra v. Riviera Apartments (P) Ltd. [(1999) 5 SCC 77] this Court interpreted Section 20 of the Act and laid down the following propositions: (SCC p. 91, para 29

¶205

19 (2015) 1 SCC 597

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20 (2012) 5 SCc 712

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“ 29 . Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognised in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant .”

¶209

From the above, it is clear that the escalation in the price of the land cannot, by itself, be a ground for denying relief of specific performance. That judgment is followed another

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judgment of the Hon’ble Supreme Court between K.Narendra v.

¶212

Riviera Apartments (P) Limited²¹ , which was discussed above. 77. The Hon’ble Supreme court also held that it would not only be unreasonable but too inequitable for courts to make the appellant the sole beneficiary of the escalation of real estate prices.

¶213

In this context, it is relevant to refer another judgment of the Hon’ble Supreme Court reported between P.D Souza v. Shondrilo Naidu²² , wherein at Paragraph No.41 held as follows:

¶214

“41. In the facts and circumstances of the matter obtaining therein held that it would not only be unreasonable but too inequitable for courts to make the appellant the sole beneficiary of the escalation of real estate prices and the enhanced value of the flat in question, preserved all along by Respondents 1 and 2 by keeping alive the issues pending with the authorities of the Government and the municipal body. It was in the facts and circumstances of the case held: (SCC p. 501, para 23)

¶215

21 (1999) 5 SCC 77

¶216

22 (2004) 6 SCC 649

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“ 23 . … Specific performance being an equitable relief, balance of equities have also to be struck taking into account all these relevant aspects of the matter, including the lapses which occurred and parties respectively responsible therefor. Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into (sic consideration) the totality of circumstances of each case.”

¶219

In the above judgment, it is categorically held by the Apex Court that it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant.

¶220

Herein in this case, no such unfair advantage established by the defendant except pleaded the same. The much of law would speaks that the claim of the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. The entire benefit of phenomenal increase of the value of the

¶221

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property during the pendency of the litigation, while balancing the equities, one for the consideration to be kept in view is as to who is the defaulting party and it is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant. In this context, it is relevant to refer the judgment of the Hon’ble Supreme Court in Nirmala Anand case (referred to supra), wherein at Paragraph No.6 held as follows:

¶223

“6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the

¶224

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considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.”

¶226

In the present case also, may be true, property value might have been increased during the pendency of the litigation, but the Hon’ble Supreme Court categorically held that the Court is to be kept in mind, who is defaulting party. Furthermore, the decisions relied upon by the learned counsel for the appellant/defendant are not at all applicable to the present facts of the case. Perusing the material on

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record and in view the elaborate discussion made supra, it is clear that the defendant, who intended to wriggle out of the contract and stands with different contentions/defences from notice dated 05.02.2005, though he agreed in Ex.A.1 to execute regular sale deed by receiving advance amount of Rs.35,000/- from the plaintiff, is the defaulting party. Thus, these points are answered accordingly.

¶229

82. POINT No.8 :

¶230

In view of the above findings in point Nos.1 to 7, this Court does not find any grounds to interfere with the wellarticulated judgment and decree of the trial Court. Therefore, there are no merits in this appeal and as such the same is liable to be dismissed.

¶231

In the result, the appeal is dismissed by confirming the decree and judgment dated 25.10.2007 in O.S.No.8 of 2005 on the file of the Court of learned I Additional District Judge, Kurnool. There shall be no order as to costs.

¶232