Dismissed

Sri. P.K. Jagannatha Rao v. Sri. Muralidhar Bhat

Karnataka HC4 Dec 2021RFA/1060/2016

Case brief

AI extract

What is this about?

Plaintiff's appeal against dismissal of his suit for specific performance of an agreement to sell immovable property. The court held that time was not the essence of the contract, but that the plaintiff failed to prove his continuous readiness and willingness to pay the balance consideration by any documentary evidence, and confirmed the dismissal.

What the court decided

AI extract

Sri. P.K. Jagannatha Rao Vs Sri. Muralidhar Bhat — Specific Performance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF DECEMBER, 2021

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BEFORE

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THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY

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R.F.A.No.1060 OF 2016

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BETWEEN:

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Sri. P.K. Jagannatha Rao S/o. Krishna Rao Aged about 55 years, Residing at Kapoji House, Bengre Village, Padubidri, Udupi Taluk - 574 111 Udupi District.

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…Appellant (By Sri. A.S. Mahesha, Advocate)

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AND:

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Sri. Muralidhar Bhat S/o. Late Ramadas Bhat, Aged about 54 years, Businessman, Cassette Corner, Admar Mutt Lane, Udupi - 576 101. …Respondent (By Sri. Amruthesh C., Advocate)

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This R.F.A. is filed under Section 96 of the Code of Civil Procedure, 1908, praying to call for the records and set aside the judgment and Decree passed in O.S.No.39/2008 dated 6.4.2016 on the file of Principal Senior Civil Judge, Udupi and grant such other appropriate order or orders as this Hon'ble Court deems fit

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to grant in the circumstances of the case, in the interest of justice and equity.

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This R.F.A. having been heard through Physical Hearing/Video Conferencing Hearing and reserved on 29-11-2021 , coming on for pronouncement of judgment this day, the Court delivered the following:

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J U D G M E N T

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This is a plaintiff's appeal. The present appellant as plaintiff had instituted a suit in O.S.No.39/2008 against the present respondent in the Court of the Principal Senior Civil Judge, Udupi, (hereinafter for brevity referred to as “the Trial Court”) for the relief of specific performance.

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The summary of the plaint averments in the Trial Court was that, the plaintiff entered into an agreement with the defendant on Dt. 17-05-2007 for the purchase of suit schedule ‘A’ properties which are three pieces of immovable properties, in total measuring 51 cents, for a total consideration of a sum of 14,28,000/- from the defendant who was the absolute owner in possession of the said 'A' schedule properties. On the date of the agreement, the plaintiff had paid a sum of 8,50,000/- to the defendant as earnest money towards the part performance of the

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contract. The said sum of 8,50,000/- included a sum of 2,00,000/- in the form of two cheques and remaining sum of 6,50,000/- in the form of cash. It was agreed that the Sale Deed had to be executed in favour of the plaintiff within six months from the date of the agreement and that the plaintiff, as a purchaser had to pay the balance sale consideration of a sum of 5,78,000/- at the time of execution of the Sale Deed.

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It is further the contention of the plaintiff that he was ready and willing to perform his part of the promise under the contract, as such, on Dt.18-05-2008, he had come to Udupi from Chennai where he runs his hotel business, to complete the formalities of execution of Sale Deed in his favour. However, to his shock and surprise, the defendant revealed that he has mortgaged the suit schedule ‘A’ properties with Syndicate Bank, Car street Branch, Udupi, for loan of a sum of `7,50,000/- and gave an excuse to postpone the execution of the Sale Deed and started demanding double the price of what was agreed under the sale agreement. Hearing the same, the plaintiff got issued a legal notice to the defendant through his lawyer on Dt.01-092008, calling upon the defendant to execute the Sale Deed in his

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favour. However, the defendant even after receipt of the notice did not comply with the demand made therein. This constrained the plaintiff to institute a suit against him for the relief of specific performance of the agreement in the Trial Court.

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In response to the suit summons, the defendant appeared through his counsel and filed his Written Statement, wherein he stated that he had mortgaged the suit schedule ‘A’ properties in Syndicate Bank, Car street Branch, Udupi and availed financial assistance to a tune of 7,50,000/-. Though he admitted that, there existed an Agreement of Sale between himself and the plaintiff in respect of the suit schedule 'A' properties, which was entered into on Dt.17-05-2007, but contended that the plaintiff was not ready and willing to perform his part of the promise under the contract. Since the plaintiff did not pay the balance amount and come forward to get the Sale Deed executed in his favour, a meeting was held in the presence of witnesses and in the said meeting the plaintiff had agreed to take back the advance amount of 8,50,000/- paid to the defendant and agreed for cancellation of the Agreement for Sale.

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Accordingly, the defendant made arrangement for refund of the advance amount of 8,50,000/- to the plaintiff and started searching for a buyer of the suit schedule 'A' properties. Accordingly, he found a buyer by name one Sri. K. Narayana Ballal, who agreed to purchase the suit schedule 'A' properties for consideration of a sum of 15,00,000/-, in which regard, an agreement with him was entered into by the defendant on Dt.14-06-2008. Noting the previous agreement in favour of the plaintiff and existence of a mortgage loan upon the suit schedule ‘A’ properties, the said buyer - Sri.K. Narayana Ballal agreed to purchase the said suit schedule 'A' properties and also paid an advance amount of a sum of 7,50,000/- from time to time to him (defendant). With this, the defendant contended that he is ready and willing to refund the advance amount of 8,50,000/paid to him by the plaintiff.

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Based on the pleadings of the parties, the following issues were framed by the Trial Court:

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“1. Whether the plaintiff proves that he is always ready and willing to perform his part of contract as stipulated in Agreement for Sale dated 17.05.2007?

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2. Whether the plaintiff proves that the defendant has not disclosed the fact that he has mortgaged the plaint "A" schedule properties with Syndicate Bank, Car Street Branch, Udupi at the time of entering into an agreement of sale dated 17.05.2007?

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3. Whether the plaintiff proves that he has performed his part of contract as stipulated in the Agreement for Sale dated 17.05.2007?

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4. Whether the plaintiff proves that the defendant has demanded double the price than what is agreed under the Agreement for Sale dated 17.05.2007?

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5. Whether the defendant proves that, the Agreement for Sale dated 17.05.2007 has been cancelled by mutual consent of the parties?

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6. Whether the defendant proves that he has entered into Agreement for Sale dated 14.06.2008 with K. Narayana Ballal in respect of the plaint "A" schedule properties?

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7. Whether the defendant proves that there is no cause of action to file the above suit?

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8. Whether the plaintiff is entitled for the reliefs claimed in the plaint?

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9. What order or decree parties are entitled?”

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In order to prove his case, the plaintiff got examined

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himself as PW-1 and got examined one

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Sri. Raghurama Acharya as PW-2 and got marked documents from Exs.P-1 to P-6 (a). The defendant got himself examined as DW-1 and got examined three more witnesses by names Sri. S. Srinivasa Saralaya as DW-2, Sri. K.S. Padmanabhan as DW-3 and Sri. K. Narayana Ballal as DW-4 respectively and got marked documents from Exs.D-1 to D-4.

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After hearing both side, the Trial Court in its judgment and decree dated 06-04-2016, while answering issue Nos.1 to 5 in the negative, issues No. 6 and 7 in the affirmative and issue No.8 partly in the affirmative, proceeded to dismiss the suit of the plaintiff. Aggrieved by the same, the plaintiff has preferred the present appeal.

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The Trial Court records were called for and the same are placed before this Court.

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Heard the arguments of the learned counsel for the plaintiff/appellant herein and learned counsel for the defendant/respondent herein.

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Perused the material placed before this Court including the impugned judgment, memorandum of regular first appeal and the Trial Court records.

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For the sake of convenience, the parties herein would be henceforth referred to as per their rankings before the Trial Court.

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After hearing the learned counsel for the parties, the points that arise for my consideration in this appeal are :

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1. Whether the plaintiff proves that the time was the essence of the Agreement for Sale dated 17-05-2007 entered into between himself and the plaintiff with respect to the suit schedule 'A' properties?

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2. Whether the plaintiff has proved that he was ready and willing to perform his part of the contract as stipulated in Agreement of Sale dated 17-05-2007?

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3. Whether the plaintiff is entitled for the relief of specific performance of the agreement as claimed in the plaint?

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4. Whether the judgment and decree under appeal warrants any interference at the hands of this Court?

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In his pleading itself, the defendant has admitted the execution of Agreement for Sale dated 17-05-2007 by him in favour of the plaintiff, agreeing to sell the suit schedule ‘A’ properties for a total consideration of a sum of 14,28,000/-, as such, no issue regarding the existence of the Agreement for Sale between the parties was framed by the Trial Court. However, the plaintiff, as PW-1, in his examination-in-chief in the form of affidavit evidence, has reiterated the plaint averments with respect to himself and the defendant entering into an Agreement for Sale between themselves with respect to suit schedule ‘A’ properties for a total consideration of a sum of 14,28,000/- on Dt.17-05-2007 and got marked the Sale Agreement at Ex.P-6. The defendant, as DW-1 also, has stated about he entering into

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such an agreement with the plaintiff on Dt.17-05-2007. However, he contended that the said agreement has stood

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cancelled, as such, he is ready to refund the advance amount of 8,50,000/- received by him from the plaintiff towards the partial sale consideration. Contending that he has deposited the amount for refund in Fixed Deposit with two Banks, produced two Fixed Deposit receipts at Exs.D-1 and D-2, each for a sum of 7,00,000/- and 8,00,000/- respectively. He also contended that the said agreement at Ex.P-6 came to be cancelled after holding a meeting over phone with the plaintiff in the presence of DW-2 – Sri. Srinivasa Saralaya and DW-3 – Sri. K.S. Padmanabhan. He entered into another Agreement for Sale with DW-4 – Sri. K. Narayana Ballal with respect to the same schedule ‘A’ properties for a sum of 15,00,000/on Dt.14-06-2008. Stating so, he has got produced the said Agreement of Sale dated 14-06-2008 and got it marked as Ex.D-3.

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A perusal of the Agreement for Sale at Ex.P-6 would go to show that, clause 3 of the said agreement mentions about the period fixed for the performance of the contract in the form of execution of the Sale Deed as six months from the date of the

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agreement. It is relying upon the said clause, the learned counsel for the defendant/respondent vehemently submitted that, the time was the essence of the contract. Since the plaintiff did not pay the balance amount and prove his readiness and willingness to get the Sale Deed executed in his favour within the said period, the defendant had cancelled the agreement dated 17-05-2007 and entered into another Agreement of Sale with DW-4 with respect to the suit schedule ‘A’ properties. Thus, time was the essence of the contract, which the plaintiff did not honour.

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In his support, the learned counsel for the defendant/respondent also relied upon a judgment of the Hon’ble Apex Court in the case of Saradamani Kandappan Vs. S. Rajalakshmi and others reported in (2011) 12 Supreme Court Cases 18 .

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The learned counsel for the plaintiff/appellant herein, in his argument submitted that, the agreement does not show that time was the essence of the contract. However, the plaintiff has shown that, from the date of agreement, he has

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always been ready and willing to perform his part of the promise under the contract, as such, whether time was the essence of the contract should not be a material aspect in the matter.

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Neither the witnesses for the plaintiff nor the witnesses for the defendant, anywhere in their evidence have specifically mentioned as to whether the time was the essence of the contract. However, both side witnesses have mentioned about the Agreement of Sale at Ex.P-6, which inter alia includes clause 3 of the agreement, which is about the period agreed for the performance of the promise under the contract. The defendant, though has admitted the existence of an agreement dated 17-05-2007 between himself and the plaintiff as per Ex.P-6, neither in his pleading nor in his evidence has stated as to whether time was the essence of the contract. No suggestion in that regard was specifically and expressly made to PW-1 or PW-2 in their cross-examination. However, the defendant, both in his Written Statement as well in the evidence led from his side, has stated that, time agreed for the performance of the contract was six months, after expiry of which, waiting for some more time, a meeting was arranged over phone in the presence

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of DW-2 and DW-3, in which meeting, the plaintiff stated that he could not arrange for the balance fund, as such, with his consent only, the agreement dated 17-05-2007 came to be cancelled. The said cancellation of the agreement has not been admitted by the plaintiff in his evidence. The suggestion made to him in that regard was specifically denied by him. Though he admitted that he knows DW-2 and DW-3 and that the negotiation for an agreement of sale was taken place in the shop of DW-2 - Sri.S. Srinivasa Saralaya, however, he specifically denied that a meeting was held over phone between himself and DW-1, DW-2 and DW-3 and that he expressed his unwillingness and unpreparedness for the purchase of the suit schedule ‘A’ properties. He specifically denied a suggestion that, within the agreed period of six months from the date of agreement, the defendant had approached him several times and had mentioned to him that he (defendant) was in need of money and had requested for the payment of the balance amount.

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PW-2 - Sri.M. Raghurama Acharya, though claims that he knows both parties to the suit and also about the

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agreement dated 17-05-2007, but has not stated anything about the time, whether time was the essence of the contract. However, he has only stated that the plaintiff was always ready and willing to perform his part of the promise under the contract. However, the defendant was refusing to perform his part of the contract and postponing the matter. In his cross-examination, PW-2 specifically stated that six months after the agreement at Ex.P-6, a negotiation or conversation has taken place between the plaintiff and defendant with respect to the agreement, is not to his knowledge. He also stated that he does not know whether the defendant cancelled the said agreement at Ex.P-6, since the plaintiff is said to have not paid the balance amount under the agreement.

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The defendant, as DW-1, in his detailed examinationin-chief in the form of affidavit evidence though has reiterated the contentions taken up by him in his Written Statement, has not specifically stated that, time was the essence of the contract, as such, after expiry of the time, he had to cancel the agreement made in favour of the plaintiff. However, he

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reiterated his contention that since the plaintiff did not come forward for payment of the balance amount to get the Sale Deed executed in his favour, he had to arrange a meeting of DW-2 and DW-3 with the plaintiff, wherein the plaintiff expressed his un-preparedness to pay the balance amount and to get the Sale Deed executed in his favour, as such, with his consent only, the agreement came to be cancelled. The same narration about the holding of a meeting with the plaintiff and after informing him and getting his consent for cancellation of the agreement, the defendant proceeded to treat the agreement at Ex.P-6 as cancelled, was further corroborated by the oral evidence of Sri. S. Srinivasa Saralaya and Sri. K.S. Padmanabhan, who were examined as DW-2 and DW-3 respectively. However, neither DW-2 nor DW-3, have, anywhere in their evidence, stated that the time was the essence of the contract, as such, for nonperformance of the promise within time, the agreement came to be cancelled.

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Learned counsel for the defendant/respondent relying upon a decision of the Hon'ble Apex Court in Saradamani

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Kandappan's case (supra) submitted that, where time in an agreement would be stipulated, then that time amounts to the essence of the contract.

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In Saradamani Kandappan's case (supra), which has also arisen from out of a matter of specific performance of the contract, the Hon’ble Apex Court, inter alia , was to consider whether the time stipulated in the agreement was the essence of the contract. In that connection, in paragraphs 41, 42 and 43, the Hon’ble Apex Court was pleased to observe as follows:

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"41. A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this court in K.S.Vidyanadam Vs. Vairavan (1997) 3 SCC 1 [by Jeevan Reddy J. who incidentally was a member of the Constitution Bench in Chand Rani V. Kamal Rani (1993) 1 SCC 519]. This Court observed: (SCC pp.7 & 9, paras 10-11)

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"10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect…..in the case of urban properties in India, it

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is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. .....

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11. ......We cannot be oblivious to the reality - and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation….Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so." (emphasis supplied)

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42. Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to larger bench as we have held on facts in this case that time is the essence of the contract, even with reference to the

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principles in Chand Rani V. Kamal Rani (1993) 1 SCC 519 and other cases. Be that as it may.

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43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam V. Vairavan (1997) 3 SCC 1:

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(i) The Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.

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(ii) The Courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.

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(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. Courts will also "frown" upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to

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assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser."

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The Hon’ble Apex Court, though observed that there is an urgent need to re-visit the principle that, time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, however, in the very same paragraph, the Hon’ble Apex Court made it clear that, it would not propose to undertake that exercise in the case before it nor referring the matter to a larger bench, as they have already held on facts in the case before it that, time was the essence of the contract. Therefore, the argument of the learned counsel for the defendant/respondent that, in a contract for agreement of sale of immovable property, time had to be invariably considered as the essence of the contract, is not acceptable.

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In the instant case, it is not in dispute that Agreement of Sale as per Ex.P-6 was entered into on Dt.17-05-2007 and the period fixed for the performance of the contract was six months from the date of the agreement. The said period has come to an end on Dt. 16-11-2007. However, the plaintiff, in his plaint contended that, further more, a period of additional six months was incorporated by the parties for the performance of the promise under the contract. The plaintiff reiterated the same even in his evidence also. However, the defendant has categorically denied the same. Except making such a bald statement, the plaintiff has not produced any cogent evidence to show that, the time for performance of the agreement was extended by a further period of six months between the parties. But that itself is not sufficient to hold that, time was of the essence of the contract and it is because, even according to the defendant, immediately after the expiry of the period of six months, he has not issued any notice to the plaintiff, bringing to his notice about the cancellation or termination of the contract by the expiry of the time. On the other hand, even according to the defendant and DW-2 and DW-3, the defendant had been

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contacting the plaintiff to know from him as to whether he is ready and willing to perform his part of the promise under the contract. It is in that regard, a telephonic meeting was also held with the plaintiff by the defendant along with DW-2 and DW-3 in June 2008, when the plaintiff is said to have expressed his inability to pay the balance sale consideration of a sum of `5,78,000/- and is said to have stated his no objection for the defendant to cancel the agreement dated 17-05-2007. Without giving any finding as to the alleged consent of the plaintiff for cancellation of the agreement, suffice it to say that according to the defendant himself, he had got the Agreement of Sale open and amenable for the performance of the promise by the plaintiff till June 2008, when the telephonic meeting is said to have taken place between the parties. Thus, though the time stipulated in the agreement was for six months only, still, the defendant kept alive the agreement for more than one year and also did not declare himself that agreement has come to an end by efflux of time, but after the alleged consent by the plaintiff himself, he has treated the agreement as cancelled. Therefore, the facts

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and circumstances of the case clearly shows that, time was not the essence of the contract.

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The plaintiff as PW-1 in the plaint as well in his evidence has stated that, he was always ready and willing to perform his part of the promise under the contract. However as stated by him in his cross-examination, he has not informed about his readiness and willingness in writing to the defendant within six months, which was the time stipulated under the agreement. He has further stated in his cross-examination that he had no inconvenience to inform the defendant about his readiness and willingness either through a letter or through a legal notice to the defendant. On the other hand, he has stated that he was fully aware that as per the contract, he had to pay the balance amount within six months from the date of the agreement and get the Sale Deed executed in his favour. Though he contended that another six months' period for the purpose of the contract was incorporated, but admittedly, he has not produced any cogent evidence to substantiate his statement, except stating that the alleged extension of time was made in

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the presence of DW-2. However, the said DW-2 has not stated about the same in his evidence. Assuming for a moment that such an alleged extension of time was agreed to between the parties, still, the plaintiff has not produced any material to show that during such an alleged extended period also, he was ready and willing to perform his part of the promise under the contract. Suggestions were made to PW-1 in his cross- examination that the plaintiff was not ready and willing to perform his part of the contract, however, PW-1 did not admit the same as true. It was also suggested to him that he had no capacity to pay the balance amount and it was for the said reason, the agreement came to be cancelled. Even the said suggestion also, PW-1 did not admit as true.

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PW-2 in his evidence though has stated that plaintiff was ready and willing to perform his part of the promise under the contract, however, admittedly, he too has not shown any reason as to based upon what he is making such a statement, as such, the statement of both PW-1 and PW-2 that the plaintiff was ready and willing to perform his part of the promise under the

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contract, is merely an oral statement without any corroboration in the form of documentary proof. However, the plaintiff, by issuing a legal notice as per Ex.P-4 has stated that he has been ready and willing to perform his part of the promise under the contract. It is heavily relying upon the said legal notice at Ex.P-4, the learned counsel for the plaintiff/appellant vehemently submitted that, the readiness and willingness of the plaintiff to perform his part of the promise under the contract is established through the issuance of notice at Ex.P-4. Whether a mere statement made in a legal notice alleging his readiness and willingness is sufficient to hold that the plaintiff was ready and willing to perform his part of the promise under the contract, is a point to be looked into.

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In the case of Punny Akat Philip Raju, since dead by

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his LRs. Vs. Sri. Dinesh Reddy reported in ILR 2016 Kar.2252 , a Division Bench of this Court in paragraph 32 of its judgment was pleased to observe that, the proof of readiness necessarily means demonstration of financial ability or capacity to pay the balance sale consideration and take the sale deed. When a person on oath states in the witness box that he is ready with the requisite

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funds, he must produce some evidence to prove his possession of the required funds. The explanation to Section 16(c) of the Specific Relief Act makes it clear that the proof of requisite funds does not mean he should produce the currency before the Court or he should deposit the money in Court. But at the same time, mere statement on oath in the witness box that he is possessed of the requisite funds would also do not prove the possession of funds. The said proof has to be necessarily by way of documentary evidence.

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In paragraph 33 of the same judgment, it was further held that, when a person claims that he is possessed of sufficient funds, he has to produce some documentary evidence, which proves his capacity to raise the funds or he possess the funds. It may be a pass book issued by a Bank where he has kept the balance sale consideration ready for payment. If he has invested his money by way of securities, he has to produce those Certificates/securities before the Court to show that, any time he can encash the same and pay the balance sale consideration. If he intends to borrow from a Nationalised Bank or from his

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employer or from any other financial Institution, it has to be demonstrated by producing a request for such financial assistance in writing, sanctioning of the said loan, which has to be necessarily in writing.

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Thus, it has been clearly held in the said judgment that, there must be some material documents and proof to show that the plaintiff, as an agreement holder and purchaser, has always been ready and willing to perform his/her part of the promise under the contract. A mere statement that he or she is ready and willing to perform his/her promise would only show his/her desire to acquire the property by purchasing the same, but it does not substitute the requirement of proving his/her readiness in the matter.

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The Hon’ble Apex Court in the case of C.S. Venkatesh Vs. A.S.C. Murthy (Dead) by Legal Representatives and others reported in 2020 (3) Supreme Court Cases 280 at paragraph 16 was pleased to observe as follows:

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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

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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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In the instant case, admittedly the plaintiff, except his oral statement, oral evidence of PW-2 and the legal notice at Ex.P-4, has not placed any other corroborative evidence to show that he was ready with cash amount of the balance sum of `5,78,000/- or that he was in a position and capacity to pool up the said balance amount for its payment to the defendant and the Sale Deed executed. Therefore, the mere oral statement that, he was ready and willing to perform his part of the promise under the contract or a statement made to that effect in the legal

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notice at Ex.P-4 issued by the plaintiff to the defendant, is not sufficient to hold that the plaintiff has proved that he was ready and willing to perform his part of the contract.

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Learned counsel for the plaintiff/appellant herein also raised a point in his argument that since the defendant had not cleared the mortgage loan and kept the property free of encumbrances, the question of the plaintiff proving his readiness and willingness to perform his part of the promise under the contract does not arise. Learned counsel also submitted that Section 55 of the Transfer of Property Act, 1881 (hereinafter referred to as 'the T.P. Act' for short) makes the seller liable to keep the property free of encumbrances. Section 55 (1)(g) of the T.P. Act, inter alia mentions that, in the absence of a contract to the contrary, the seller of an immovable property is bound to discharge all encumbrances on the property then existing. No doubt in the instant case, the defendant, as a vendor, has mortgaged the property in favour of a Bank and availed the financial assistance and that the said mortgage loan was not cleared even on the date of filing of the suit by the

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plaintiff. However, the non-performance of a promise by the vendor/defendant in a contract under an Agreement of Sale would not be a ground for the plaintiff/purchaser for nonperformance of his promise under the very same agreement unless the performance of the plaintiff/vendee is contingent upon the performance of the promise of the defendant/vendor under the same agreement.

¶151

In the instant case, the defendant clearing the mortgage loan was not contingent upon the plaintiff to perform his part of the promise under the contract and thus to show that he was ready and willing to perform his part of the contract. Since in the instant case, as observed above, the plaintiff, except his oral statement, has not placed any material on record to show that he was ready to perform his part of the promise under the contract, it cannot be held that the plaintiff was ready and willing to perform his part of the promise under the contract.

¶152

When the plaintiff has failed to prove that he was ready and willing to perform his part of the promise under the contract, the question of granting him the relief of specific

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performance of the contract would not arise. Even otherwise also, the evidence of DW-1 to DW-4, more particularly of DW-1 and DW-4 would clearly go to show that, the defendant, after noticing that the plaintiff is not ready and willing to perform his part of the promise in the form of payment of balance consideration and getting the Sale Deed executed in his favour, has proceeded to agree to sell the very same suit schedule 'A' properties in favour of DW-4 on Dt. 14-06-2008 and in that direction, he also entered into an agreement as per Ex.D-3. The said aspect has been confirmed in the evidence of DW-4, who though is said to be a relative of the defendant, but still has stated that, he is an agreement holder and after coming to know that the plaintiff has not proceeded in the performance of his part of the promise under the previous agreement dated 17-05-2007, he decided to purchase the property from the defendant, as such, he has entered into an agreement with the defendant as per Ex.D-3 with respect to the same property. Therefore, granting of the relief of specific performance of the contract in favour of the plaintiff would cause more hardship to the defendant and also harm the interest of DW-4, who is an

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agreement holder with respect to the purchase of the same property from the defendant.

¶159

Added to these, the defendant also by producing Exs.D-1 and D-2 has shown that, he is ready to return the advance amount of a sum of 8,50,000/- paid by the plaintiff to him together with agreed interest there upon as per the interest given by the banker with whom the said amount is said to have been deposited by him. The two Fixed Deposit receipts at Exs.D-1 and D-2 would go to show that they are FD receipts for a sum of 7,00,000/- and `8,00,000/- respectively. DW-1 has also stated in his evidence that the said deposit which was earlier kept in Kamakshi House Building Co-operative Society Limited, Udupi, was later taken back and deposited with Indian Overseas Bank and Syndicate Bank as per Fixed/Term Deposit receipts at Exs.D-1 and D-2. Thus, the quantum of hardship that would cause would be greater upon the defendant compared to the plaintiff, as such also, the plaintiff is not entitled for the discretionary relief of specific performance of the contract in his favour.

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Since it is considering all these aspects in their proper

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perspective, the Trial Court has arrived at a proper finding on the issues framed by it and dismissed the suit of the plaintiff, I do not find any reasons to interfere in the impugned judgment and decree passed by the Trial Court.

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Accordingly, I proceed to pass the following:

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O R D E R

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[i] The Regular First Appeal stands dismissed;

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[ii] The judgment and decree dated 06-04-2016 passed by the learned Principal Senior Civil Judge,

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Udupi, in O.S.No.39/2008, stands confirmed.

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Registry to transmit a copy of this judgment along with