Trilokchandra Siadara Vs Smt. Vidyawati Kashyap

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2025:CGHC:13043-DB

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AFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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FA No. 464 of 2019 Order Reserved On : 24.01.2025 Order Delivered On : 19. 03.2025

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Trilokchandra Siadara S/o Atalram Sidara Aged About 54 Years R/o Near Manohar Talkies Bilaspur District Bilaspur Chhattisgarh..............Plaintiff, District : Bilaspur, Chhattisgarh

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... APPELLANT/plaintiff

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versus

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Smt. Vidyawati Kashyap D/o Late Ramswaroop Kashyap Aged About 62 Years R/o. Bajrang Chowk Mangala Bilaspur Tahsil And District Bilaspur Chhattisgarh...........Defendant, District : Bilaspur, Chhattisgarh

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Smt. Kalabai Kashyap D/o Late Ramswaroop Kashyap Aged About 57 Years R/o. Bajrang Chowk Mangala Bilaspur Tahsil And District Bilaspur Chhattisgarh...........Defendant, District : Bilaspur, Chhattisgarh

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State Of Chhattisgarh Through Collector Bilaspur District Bilaspur Chhattisgarh................Defendant, District : Bilaspur, Chhattisgarh

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----- Respondent/Defendant

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Digitally signed by SANTOSH SANTOSH KUMAR KUMAR SHARMA SHARMA Date: 2025.03.20 10:51:10 +0530

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For Appellants : Mr. Aishwarya Pandey, Advocate on behalf of Mr. Pravin Kumar Tulsyan, Advocate For State : Mr. Akhilesh Kumar, Govt. Advocate For Respondents/Defendants : Mr. B.P. Gupta, Advocate No. 1 & 2

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Division Bench: Hon'ble Smt. Justice Rajani Dubey & Hon’ble Shri Justice Narendra Kumar Vyas

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CAV ORDER

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Per Narendra Kumar Vyas, Judge

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1. This First Appeal has been preferred by the appellant/plaintiff against the judgment and decree dated 29.08.2019 passed by Additional District Judge, Bilaspur, District Bilaspur in Civil Suit No. 24-A/2018 (Trilokchandra v. Smt Vidyawati and others) by which learned trial Court has dismissed the suit filed by the plaintiff for specific performance of contract.

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2. For the sake of convenience, the parties would be referred to hereinafter as per their status shown in the suit before the trial Court.

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3. The plaintiff has filed the suit for specific performance of contract mainly contending that:-

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(a) The defendant No. 1 is the owner of the land bearing Khasra No. 61/3 area 0.58 Acre and defendant No. 2 is the owner of land bearing khasra No. 57/1 area 0.54 acre situated at Mangala

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P.H. No. 21/25, Tahsil and District Bilaspur. (hereinafter referred to suit land). A registered agreement was executed on 08.08.2011 between the plaintiff and the defendants for sale of suit land for total sale consideration of Rs. 48,00,000/-. In pursuance of agreement the plaintiff has paid Rs. 5,00,000/- as advance amount to the defendants.

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(b) It has been contended that as per clause of the agreement the plaintiff has to pay the entire sale consideration to the defendant upto 31^st January, 2012 and thereafter the sale deed should be executed either in the name of the plaintiff or any person authorized by the plaintiff within the said period. The agreement further provides that if the plaintiff does not pay the entire sale consideration or execute the sale deed then for every six months he has to pay Rs. 5,00,000/- and the defendants have no objection on it. The agreement further provides that in case the defendants fail to execute the sale deed the plaintiff has liberty to execute the sale deed through the Court.

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(c) It has been further contended that in January, 2012 it is brought to the notice of the plaintiff that the suit land was not situated on the road side but they have shown the land which belonged to someone else. It has also been contended that due to acquisition of the land in Arpa Project the suit land will be on the road side and under this impression, he has executed the

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sale deed but the land has not been acquired in the Arpa project though 6 years has already been lapsed and even the demarcation of the land has also not been done by the defendants. It is also case of the plaintiff that when he made a complaint to the defendants regarding fraud committed by them then they were agreed to execute the sale deed for sale consideration of Rs. 20,00,000/- and on the basis of oral consent the plaintiff became ready but the defendants have not shown their willingness to perform their part of contract and they were in process of selling the land to the other which has compelled the plaintiff to file the suit for specific performance. It is also case of the plaintiff that the defendants have taken Rs. 13,00,000/- from the plaintiff and only Rs. 7,00,000/- was payable to the defendants and the plaintiff is having fund to execute the sale deed but the defendants have not shown their willingness to execute the sale deed and accordingly he has filed the suit for specific performance of contract.

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4. The defendant No.1 and 2 have filed their written statement denying the allegation made in the plaint mainly contending that:-

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(a) as per clause 2 of the agreement, the agreement was executed between the plaintiff and the defendant on 08.08.2011 for sale consideration of Rs. 48,00,000/- and there is no

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execution of agreement for sale consideration of Rs. 20,00,000/for the suit land, as such no specific performance of contract can be ordered by the Court. It has been further contended that they have never given consent to execute the sale deed on less sale consideration of Rs. 20,00,000/-. It has been further contended that they have already demarcated the land on 21.06.2010 and the same has been given to the plaintiff. It has also been contended that the plaintiff is doing the business of sale and purchase of the property and he was aware of the physical status of the land whereas the defendant No.1 is an illiterate lady and not aware about the starting of the Arpa Project, as such no oral consent can be given to this effect. The plaintiff himself has not performed his part of the contract as he has not shown the readiness and willingness to perform his part of contract. It has been speficially contended that the suit is barred by limitation as the agreement was executed on 08.08.2011 and the suit has been filed on 08.03.2018, as such prayed for dismissal of the suit.

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5. On the pleading of the parties, learned trial court has framed following issues.

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1- D;k oknh ,oa izfroknh Øekad 1 o 2 ds e/; gq, bdjkjukek fnukad 08-08-2011 ds vuqlkj oknh lafonk ds vius Hkkx ds ikyu gsrq lnSo rS;kj ,oa rRij jgk gS\

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2- D;k oknh }kjk izLrqr okn fu;r le;kof/k ds Hkhrj izLrqr fd;k x;k gS\

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3- D;k oknh lafonk ds fofufnZ"V vuqikyu dk vuqrks"k izkIr djus dk vf/kdkjh gS\

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4- D;k lgk;rk ,oa O;;\

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6. The plaintiff to substantiate his case has examined himself as (PW-1), Girja Shankar (PW-2) and Jethu Chouhan (PW-3) and exhibited documents i.e. Agreement (Ex.P-1), Khasra report B-I (Ex.P-2), Khasra report B-I (Ex.P-3), Khasra map (Ex.P-4), Khasra report B-I (Ex.P-5),Khasra report B-I (Ex.P-6), Khasra map (Ex.P-7), postal receipt (Ex.P-8), postal receipt (Ex.P-9), Notice dated 27.02.2018 (Ex.P-10), Envelopment and Acknowledgment receipt (Ex.P-11), Envelopment and Acknowledgment receipt (Ex.P-12).

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7. The defendants examined Kalla Bai as DW-1 and Santosh Kashyap (DW-2) and exhibited documents I.e.Notice dated 16.12.2014 (Ex.D-1) and Notice (Ex.D-2).

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8. The plaintiff (PW-1) in his examination in chief by way of an affidavit as provided under Order 18 Rule 4 CPC has reiterated the facts mentioned in the plaint. This witness was extensively cross-examined by the defendant wherein he has stated that the disputed land was not adjacent to the main road; therefore, he did not agree to purchase the said land. He has stated that as per agreement sale deed was executed on or before 31^st

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January, 2012 and the defendants received earnest money of Rs. 13,00,000/- from him on different dates. But the defendants neither executed the sale deed nor demarcation of the land was done by them thereafter, he went to spot for inspection with Ramkumar Sahu, Revenue Inspector and 50 other persons wherein the Revenue Inspector informed him that the land situated in front of disputed land was recorded in the name of Arjun Bhojwani. He further stated that he did not renew the agreement dated 08.08.2011 (Ex.P-1) as the defendants are not willing to execute the sale deed in his favour. He further stated that the defendants were willing to execute the sale deed in his favour but his son refused to renew the agreement executed between them on 08.08.2011 and at the time of discussion for sale and purchase of land, his son was there with him.

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9. Girja Shankar (PW-2) in his examination-in-chief by way of affidavit as provided under Order 18 Rule 4 CPC has stated that at the time of execution of agreement, the disputed land was shown adjacent to main road and front road of the land was shown as 150-160 feet but when the measurement of the disputed land was done by Revenue Inspector it was of back of land of Arjun Bhojwani. Thereafter the plaintiff told that he will not purchase the land so costly and he will pay Rs. 20,00,000/of the back side land. He has stated that at the time of agreement of land, Santosh Kashyap was present and signed

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the document and the execution of agreement was done by Jethu Chouhan. He further stated that at the time of agreement, he was present with the plaintiff and signed the documents.

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10. Jethu Chouhan (PW-3) in his examination in chief by way of an affidavit as provided under Order 18 Rule 4 CPC has stated that at the time of execution of the agreement, Trilokchand Sidara informed him that the land was adjacent to the main road, he was interested to purchase the land and an agreement was executed between them for total sale consideration of Rs. 48,00,000/-. He has stated that the defendant No. 1 and 2 received earnest money of Rs. 13,00,000/- from the plaintiff. This witness reiterated the stand taken by Girja Shankar (PW-2).

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11. Defendant Kalabai (DW-1) in her examination in chief by way of an affidavit as provided under Order 18 Rule 4 CPC has stated that an agreement was executed on 08.08.2011 for total sale consideration of Rs. 48,00,000/- with the plaintiff. She has stated that as per agreement, the sale deed was executed on or before 31/01/2012 and if the sale deed was not executed prior to the date i.e. 31/01/2012 then the plaintiff will pay Rs. 5,00,000 in addition to Rs. 48,00,000/- after six months. Neither money was paid by the plaintiff to the defendants nor he executed the sale deed. She has further stated that the plaintiff has adopted delay tactics in execution of the sale deed because of the increase in

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the prices of land. She has also stated that reply to the notice was given to the plaintiff wherein it has been superficially contended that no agreement was executed for selling the property on the sale consideration of Rs. 20,00,000/-.

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12. Learned trial Court after appreciating the oral and documentary evidence found that there is no evidence that the sale consideration of the disputed land was of Rs. 20,00,000/instead of Rs. 48,00,000 and held that the plaintiff is not entitled for decree of Specific Performance of Contract and dismissed the suit of the plaintiff. Being aggrieved by the judgment and decree passed by the trial court on 29.08.2019, the plaintiff has preferred First Appeal under Section 96 CPC before this Court.

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13. During pendency of the appeal, the plaintiff has moved an application on 30.09.2019 for amendment in the plaint wherein it has been pleaded that in case the plaintiff fails in getting decree of specific performance of contract then alternatively he is entitled to get Rs. 13,00,000/- with 12% interest from the defendants. The defendants have filed reply to the said application on 18.04.2022 raising preliminary objection about the application for amendment as the plaintiff in para-5 of the plaint has not pleaded this alternate plea when the occasion was available to him before the trial court. It has also been contended that as per Order 6 Rule 17 the amendment cannot

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be allowed to be incorporated after the trial has commenced, as such also prayed for rejection of the application for amendment. It has been further contended that once the claim is barred by the time the same cannot be incorporated by way of an amendment and prayed for rejection of the application for amendment on the count time barred also.

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14. This Court vide its order dated 04.05.2022 has directed that it will proper for this Court to adjudicate the same during the final hearing as the issue may have deliberated on merits. Accordingly, the matter was posted for final hearing on 24.01.2025.

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15. Learned counsel for the appellant would submit that the finding recorded by trial Court is bad-in-law and it has not considered the testimony of the witnesses and has wrongly dismissed the suit of the plaintiff. He would further assail the judgment and decree of the trial court by placing reliance under Section 92 of the Evidence Act, 1972 and contended that documentary evidence will supersede the oral evidence and in the matter learned trial court failed to see Ex.P-10 to Ex.P12 which clearly demonstrates that the plaintiff was ready to execute the agreement as he has given legal notice to the defendants. He would further submit that as per agreement plaintiff has to pay Rs. 48,00,000/- sale consideration of the land and he has paid

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advance amount of Rs. 13,00,000/- to the defendants, which comes to 27 % of the total amount and he was ready to pay the remaining amount on the date of execution of sale deed for that he has issued notice to the defendants, thus the intention of the plaintiff was clear to purchase the land, thereafter, the finding of the court in respect of non-readiness of the plaintiff is bad in law. He would further submit that as per agreement dated 08.08.2011 (Ex.P-1) it was duty of the defendants to get demarcated the land and obtain report from the competent authority then only the sale deed can be executed but the respondents failed to execute the sale deed, therefore, the trial court has ignored the vital terms of the agreement and wrongly held that the defendants have performed their part of contract, as such this finding is perverse and would pray for allowing the appeal.

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16. It has also been contended that the finding recorded by the learned trial Court in para-19 of the judgment that suit was filed on 08.03.2018 and as per Article -54 of the Limitation Act, 1963 the period is three years for specific performance of contract which is beyond the time period, accordingly issue No. 2 has been answered in negative. This finding is contrary to the evidence and material on record as the defendants have refused the execution of the agreement in their reply notice; as such the suit is within limitation. It has also been contended that

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alternatively the plaintiff is entitled to refund of the advance amount paid to the defendants to the tune of Rs, 13,00,000/with interest. The appellant to substantiate his submissions has relied upon the judgment of Hon’ble Supreme Court in the case of Sabbir(dead) through Lrs v. Anjuman (Since Deceased) through Lrs reported in AIR 2024 SC (Civil) 51 and this High Court in the cases of Priyabratta Choudhary and others vs. Jayshankar Sahu and others in FA No. 427 of 2018, Manish Bajpai vs. Alkesh Lakde in FA No. 155 of 2019, Anil Kumar Surana vs. Smt. Shanti Bai (died) and others and Smt. Sangeeta Agrawal vs. Santosh Bhimnani and others in FA No. 31 of 2017.

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17. On the other hand, learned counsel for the respondents would submit that the finding recorded by the trial Court is just and proper as the plaintiff has failed to prove his case that they have paid the advance amount of Rs. 13,00,000/- to the defendants to purchase the land from them and but the defendants were not willing to perform their part of contract. He would further submit that the trial Court after minutely appreciating the oral and documentary evidence, has rightly dismissed the suit filed by the plaintiff, as such the impugned judgment and decree is well merited and does not call for any interference by this court and would pray for dismissal of the appeal. It has also been contended that learned trial court has rightly dismissed the suit

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on the count of limitation also as the suit was filed on 08.03.2018 whereas the agreement was executed on 08.08.2011 which is hopelessly barred by limitation.

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18. To substantiate his submission, learned counsel for the respondent-defendants has relied upon the judgment of the Hon’ble Supreme court in the cases of Life Insurance Corporation of India vs. Sanjeev Builders and Private Limited and another reported 2022(16) SCC 1, South Konkan Distilleries and another vs. Prabhakar Gajanan Naik and others in Civil Appeal No. 5567 of 2008 decided on 09.09.2008, Van Vibhag Karamchari Griha Nirman Sahakari Sanstha Maryadi (Regd.) v. Ramesh Chander and others reported in 2010 AIR SCW 6761.

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19. We have heard learned counsel for the parties and perused the record of the trial Court with utmost satisfaction.

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20 . From the above submission made by the parties, the points emerged for determination by this Court are as under:-

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(1) Whether the finding recorded by the trial Court is legal, justified, does not suffer from perversity or illegality which warrants interference by this Court?

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(2) Whether the application for amendment can be considered at the appellate stage or not?

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(3) Whether the plaintiff is entitled to get refund of Rs

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13,00,000/- or not?

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Discussion and finding on point No.1,

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21. It is expedient for this Court to extract Section 16 of the Specific Performance Act, 1963 as stood prior to amendment.

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16. Personal bars to relief.—

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22. Specific performance of a contract cannot be enforced in favour of a person—(a) who would not be entitled to recover compensation for its breach; or

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23. (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

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(c) 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, other than terms the performance of which has been prevented or waived by the defendant.

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24. From the perusal of the Section 16 of the Act for decree of specific performance of a contract it is expedient for the plaintiff to plead and prove the readiness and willingness by adducing evidence to this effect. The readiness and willingness to execute agreement is subject to interpretation by the Hon’ble Supreme Court in various judgments which are as under :-

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(A). Hon’ble the Supreme Court in case of C.S. Venkatesh Vs. A.S.C. Murthy [(2020) 3 SCC 280] , on consideration of various decisions culled out what is implied by the words “ready and willing” which reads as under:-

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“16. The words ‘ready and willing’ imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far as they depend upon his performance. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of performance. 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 contract, the 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 which he has to pay the defendant must be of necessity to be proved to be available. Right from the date of the execution of the contract till the date of decree, he must prove that he is ready and willing to perform his part of the contract. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready to perform his contract.”

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(B) U.N. Krishnamurthy Vs. A. M. Krishnamurthy [(2023) 11

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SCC 775] wherein it has been held that requisite pleadings and proof are required for the plaintiff to succeed in a suit for specific performance. The Hon’ble Supreme Court has held as under:-

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“24. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and

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prove, by adducing evidence, an arrangement with a financier for disbursement of 25 adequate funds for timely compliance with the terms and conditions of a contract involving payment of money.”

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For tracing an answer, one would necessarily have to bear in mind Sections 10, 16 and (unamended) Section 20 of the Act. Scanning of the evidence on records unmistakably points to the conclusion that the buyer was not ready and willing to have the terms agreed by and between the parties to be performed.

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(C) . Again the Hon’ble the Supreme Court in case of R. Shama Naik Vs. G. Srinivasiah, SLP (Civil) 13933 of 2021 dated

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28.11.2021 Neutral Citation 2024 INSC 927 wherein it has been

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held in paragraph 8 to 13 as under:-

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“8. Section 16(c) of the Specific Relief Act, 1963 (prior to amendment w.e.f. 01.10.2018) bars the relief of the specific performance of a contract in favour of a person who fails to aver readiness and willingness to perform his part of the contract.

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There is a legion of precedents on the subject of readiness and willingness.

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The law is well settled. The plaintiff is obliged not only to make specific statement and averments in the plaint but is also obliged to adduce necessary oral and documentary evidence to show the availability of funds to make payment in terms of the contract in time.

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There is a fine distinction between readiness and willingness to perform the contract. Both the ingredients are necessary for the relief of specific performance.

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While readiness means the capacity of the plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the plaintiff.

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The High Court in first appeal upon appreciation

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of the evidence on record both oral and documentary has arrived at the conclusion that the plaintiff has failed to establish that he was always ready and willing to perform his part of the contract.”

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25. In light of the above factual and legal position the facts of the case have to be considered to examine whether the plaintiff was ready and willing to perform his part of contract. The plaintiff has admitted in the cross-examination that the present situation of the land is the same which was at the time of execution of the agreement and he has seen the land thereafter executed the agreement. He has also admitted that no agreement for reducing the sale consideration of the suit land from 48,00,000/to Rs. 20,00,000/- has been executed. He has also admitted that the suit land is a agricultural land and not a diverted land and in the agricultural land there was no approach road, people go there by way of medh. He has also admitted that he has not submitted any document before the Trial Court to demonstrate that he has already arranged Rs. 48,00,000/- which clearly demonstrates that the plaintiff was not ready and willing to perform his part of contract as no material was placed on record before the trial court regarding availability of the fund. From the bare perusal of the evidence of the plaintiff, it is quite vivid, that very bald statements were made by him. The learned trial Court on the basis of the evidence also recorded its finding that from execution of agreement till filing of the suit except issuance of

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notice what attempts he has made to execute the sale deed whether he has offered the money to the defendants. The trial Court has also recorded its finding that in the evidence the plaintiff has also not given the time and place for execution of sale deed which clearly demonstrates that plaintiff was not ready and willing to perform his part of contract. Thus, the finding recorded by the learned trial Court that the plaintiff was not ready and willing to perform his part of contract is legal and justified which does not suffer from perversity or illegality warrants interference by this Court. Accordingly the point No. 1 framed by this Court is answered against the plaintiff.

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Discussion on Point No. 2 and 3.

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26. It is expedient for this Court to extract Section 22 of the Specific Relief Act, 1963.

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Section 22. P ower to grant relief for possession, partition, refund of earnest money, etc.—

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(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for—

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(a) possession, or partition and separate possession, of the property, in addition to such performance; or

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(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused.

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(2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the

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proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.

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(3) The power of the court to grant relief under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21.

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27. From bare perusal of Section 22 of the Specific Relief Act, it is quite vivid that no doubt, the provision of Section 22 of the Specific Relief Act provides that where a relief is not claimed with respect to refund of earnest money or advance price/deposit, the courts will not grant such a relief. The provision of Section 22 of the Specific Relief Act, however, allows amendment of the plaint at any stage of the proceedings to seek refund of the amount paid under an agreement to sell. In the facts of the present case, there was no specific prayer in the plaint with respect to the refund of the price. But in the appeal, by way of amendment the appellant has sought to incorporate the said amendment which was vehemently objected by the defendants on the count of delay and latches and also on the count that once the plaint is barred by limitation then the amendment cannot be incorporated in the plaint. This submission deserves to be rejected as at the time of allowing or disallowing the amendment in the pleading, the Court has to ascertain whether it is relevant for deciding the controversy between the parties or not has to be seen. Even if the application for amendment of refund of the amount is not allowed it will amount enrichment to the plaintiff as suit for

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specific performance has already been dismissed by the trial Court and the defendants have been benefited by the amount which was part of sale consideration without selling their suit land and also admitting the fact of receipt of amount in paragraph 2 and 3 of the written statement. Thus, this Court while considering enrichment likely to be faced by the defendants, also considering the relevancy of the proposed amendment, admission by the defendants in their written statement in paragraph-2 and 3 wherein they have admitted the facts that part payment was made on 21.10.2011, 20.01.2012 and 09.02.2012, and admitted that at the time of execution of agreement on 08.08.2011 they have received Rs. 5,00,000/thus they have received Rs. 13,00,000/- as advance by the plaintiff. Further considering the fact that the Court must be liberal in allowing the application for amendment in view of Sections 21(5) and 22 (2) of Specific Relief Act. Hon’ble Supreme Court in the case of Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Anr. Reported

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2022(16) SCC1 in paragraph 18 to 25 as under:-

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18.It is well settled that the court must be extremely liberal in granting the prayer for amendment, if the court is of the view that if such amendment is not allowed, a party, who has prayed for such an amendment, shall suffer irreparable loss and injury. It is also equally well settled that there is no absolute rule that in every case where a relief is barred because of limitation, amendment should not be allowed. It is always open to the court to allow an amendment if it is of the view that al-

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lowing of an amendment shall really sub-serve the ultimate cause of justice and avoid further litigation. In L.J. Leach & Co. Ltd. & Anr. v. Jardine Skinner & Co. AIR 1957 SC 357, this Court at paragraph 16 of the said decision observed as follows:

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"16. It is no doubt true that courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the court to order it, if that is required in the interest of justice….."

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Again in T. N. Alloy Foundary Co. Ltd. v. T.N. Electricity Board & Ors. (2004) 3 SCC 392, this Court observed as follows:

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"2. …..The law as regards permitting amendment to the plaint, is well settled. L.J. Leach & Co. Ltd. & Anr. v. Jardine Skinner & Co. [AIR 1957 SC 357 : 1957 SCR 438] it was held that the Court would as a rule decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the court to order it.

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It is not disputed that the appellate court has a coextensive power of the trial court. We find that the discretion exercised by the High Court in rejecting the plaint was in conformity with law.”

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So far as the answer to the specific plea that the claim of damages is barred by limitation and cannot be permitted at this stage is concerned, it becomes necessary to examine the various judicial pronouncements of this Court. The principles governing an amendment which may be permitted even after the expiry of the statutory period of limitation were laid down by the Privy Council in its judgment in Charan Das & Ors. vs. Amir Khan & Ors., AIR 1921 PC 50. In this case, the Privy Council laid down the principles thus:

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“…..That there was full power to make the amendment cannot be disputed, and though such a power should not as a rule be exercised where its effect is to take away from a defendant a legal right which has accrued to him by lapse of time, yet there are cases: see for example Mohummud Zahoor Ali v. Rutta Koer, where such considerations are outweighed by the special circumstances of the case, and their

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Lordships are not prepared to differ from the Judicial Commissioner in thinking that the present case is one.”

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It would be useful to also notice the observations of this Court in, Pirgonda Honganda patil v. Kalgonda Shidgonda Patil & 2 Ors., 1957 SCR 595 : AIR 1957 SC 363, wherein this Court considered an objection to the amendment on the ground that the same amounted to a new case and a new cause of action. In this case, this Court laid down the principles which would govern the exercise of discretion as to whether the court ought to permit an amendment of the pleadings or not. This Court approved the observations of Batchelor, J., in the case of Kisandas Rupchand & Anr. v. Rachappa Vithoba Shilwant and Ors. reported in ILR (1909) 33 Bom 644, when he laid down the principles thus:

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“10. …..“All amendments ought to be allowed which satisfy the two conditions (a) of not working injustice to the other side, and (b) of being necessary for the purpose of determining the real questions in controversy between the parties … but I refrain from citing further authorities, as, in my opinion, they all lay down precisely the same doctrine. That doctrine, as I understand it, is that amendments should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. It is merely a particular case of this general rule that where a plaintiff seeks to amend by setting up a fresh claim in respect of a cause of action which since the institution of the suit had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriving him of a good defence to the claim. The ultimate test therefore still remains the same : can the amendment be allowed without injustice to the other side, or can it not?”…..”

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This Court has repeatedly held that the power to allow an amendment is undoubtedly wide and may be appropriately exercised at any stage in the interests of justice, notwithstanding the law of limitation. In this behalf, in Ganga Bai v. Vijay Kumar & Ors. (1974) 2 SCC 393, this Court held thus:

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“22. …..The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discre-

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tion, greater ought to be the care and circumspection on the part of the Court…..”

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Again in M/s. Ganesh Trading Co. v. Moji Ram, (1978) 2 SCC 91, this Court laid down the principles thus:

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“4. It is clear from the foregoing summary of the main rules of pleadings that provisions for the amendment of pleadings, subject to such terms as to costs and giving of all parties concerned necessary opportunities to meet exact situations resulting from amendments, are intended for promoting the ends of justice and not for defeating them. Even if a party or its Counsel is inefficient in setting out its case initially the shortcoming can certainly be removed generally by appropriate steps taken by a party which must no doubt pay costs for the inconvenience or expense caused to the other side from its omissions. The error is not incapable of being rectified so long as remedial steps do not unjustifiably injure rights accrued.”

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The principles applicable to the amendments of the plaint are equally applicable to the amendments of the written statements. The courts are more generous in allowing the amendment of the written statement as question of prejudice is less likely to operate in that event. The defendant has a right to take alternative plea in defense which, however, is subject to an exception that by the proposed amendment other side should not be subjected to injustice and that any admission made in favor of the plaintiff is not withdrawn. All amendments of the pleadings should be allowed which are necessary for determination of the real controversies in the suit provided the proposed amendment does not alter or substitute a new cause of action on the basis of which the original lis was raised or defense taken. Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts should not be allowed to be incorporated by means of amendment to the pleadings. The proposed amendment should not cause such prejudice to the other side which cannot be compensated by costs. No amendment should be allowed which amounts to or relates in defeating a legal right accruing to the opposite party on account of lapse of time. The delay in filing the application for amendment of the pleadings should be properly compensated by costs and error or mistake which, if not fraudulent, should not be made a ground for rejecting the application for amendment of plaint or written statement. (See South Konkan Distilleries & Anr. v. Prabhakar Gajanan Naik & Ors., (2008) 14 SCC 632).

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But undoubtedly, every case and every application for amendment has to be tested in the applicable facts and circumstances of the case. As the proposed amendment of the pleadings amounts to only a different or an additional approach to the same facts, this Court has repeatedly laid down the principle that such an amendment would be allowed even after the expiry of statutory period of limitation.

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28. In view of the above stated legal position and considering the

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facts of the case the application for amendment deserves to be allowed and it is allowed. The plaintiff is directed to incorporate the proposed amendment in the memo of appeal.

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29. The effect of limitation so far as it relates to refund of advance amount has come up for consideration in the case of Sabbir (supra) wherein the Hon’ble Supreme Court has held in paragraph-12.

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It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The court has no power to extend the period of limitation on equitable grounds. “A result flowing from a statutory provision is never an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation.” The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means “the law is hard but it is the law”, stands attracted in such a situation. It has consistently been held that, “inconvenience is not” a decisive factor to be considered while interpreting a statute. The statute of limitation is founded on public policy, its aim being to secure peace in the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury's Laws of England, Vol. 28, p 266.

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“605. Policy of the Limitation Acts.— The courts have expressed at least three differing reasons supporting the existence of statutes of limitations namely, (1) that long dormant claims have more of cruelty than justice in them, (2) that a defendant might

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have lost the evidence to disprove a stale claim, and (3) that persons with good causes of actions should pursue them with reasonable diligence.” An unlimited limitation would lead to a sense of insecurity and uncertainty, and therefore, limitation prevents disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. (See Popat and Kotecha Property vs. SBI Staff Assn.(2005) 7 SCC 510) Rajender Singh vs. Santa Singh [(1973) 2 SCC 705: AIR 1973 SC 2537 and Pundlik Jalam Patil vs. Jalgaon Medium Project. [(2008) 17 SCC 448: (2009) 5 SCC (Civ) 907].)’ (emphasis supplied).

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For reasons aforesaid, we set aside the Impugned Judgment. The judgment and order passed by the First Appellate Court, dismissing the suit, stands restored. The appeal is, accordingly, allowed.

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The respondents had paid, in 1975, Rs.1,000 to the appellants. The respondents are entitled to refund thereof. We quantify such lump-sum refund, factoring in the time elapsed, at Rs.1,50,000 to be paid on/before 01.01.2024 to the respondents by the appellants.

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30. It is also settled law that unless a seller proves a loss being

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caused to him on account of breach by a buyer in purchasing a property under an agreement to sell, the advance price and/or earnest money received under the agreement to sell cannot be forfeited because forfeiture is in the nature of being liquidated damages under Section 74 of the Indian Contract Act, and that Section 74 of the Indian Contract Act cannot come into play if the nature of the contract is such that the loss which is caused on account of the breach of contract can be proved and assessed in a court of law. This is the law as laid down way back by the Constitution Bench of the Hon'ble Supreme court in the case of Fateh Chand v/ Balkishan Dass, AIR 1963 SC 1405 , and such ratio being elaborated and expounded in the

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judgment of the Hon'ble Supreme Court in the case of Kailash Nath Associates v. Delhi Development Authority and Anr. (2015) 4 SCC 136 wherein the Hon’ble Supreme Court has held in paragraph 42 to 43 which reads as under;-

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42.In the present case, forfeiture of earnest money took place long after an agreement had been reached. It is obvious that the amount sought to be forfeited on the facts of the present case is sought to be forfeited without any loss being shown. In fact it has been shown that far from suffering any loss, DDA has received a much higher amount on re-auction of the same plot of land.

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On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:-

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43.1 Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.

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43.2 Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.

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43.3 Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section.

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43.4 The Section applies whether a person is a plaintiff or a defendant in a suit.

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43.5 The sum spoken of may already be paid or be

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payable in future.

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43.6 The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

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43.7 Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application.

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31. From the above stated legal position and considering the facts and circumstances of the case, it is not in dispute that the plaintiff has nowhere pleaded in the plaint with regard to refund of earnest money but by way of amendment it has been sought in the appeal and the appeal is continuous proceedings, therefore, this Court can very well consider grant of refund of earnest money to the plaintiff. The defendants in their written statement have clearly admitted the fact that they have received Rs. 13,00,000/- as advance amount and no monetary loss for delay in execution of sale deed has been proved by the defendants, therefore, the defendants cannot forfeit the earnest money given by the plaintiff, as such the judgment and decree passed by the learned trial Court needs to be modified and it is modified to the extent that the defendants shall refund the earnest money of Rs. 13,00,000/- to the plaintiff within eight weeks from the date of receipt of the copy of the judgment and decree passed by this court. Consequently, points No.2 and 3

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are answered in favour of the plaintiff.

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32. Accordingly, the appeal is allowed in part. Rest of the judgment and decree passed by the learned trial Court is affirmed. No order as to the cost. Decree be drawn up accordingly.

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Sd/Sd/(Rajani Dubey) (Narendra Kumar Vyas) Judge Judge

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Santosh

Trilokchandra Siadara v. Smt. Vidyawati Kashyap

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Trilokchandra Siadara v. Smt. Vidyawati Kashyap

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