Allowed

Smt. N.S.Varija Rao v. Sri P a Vijayan

Karnataka HC13 Sept 2021RFA/274/2007

Case brief

AI extract

What is this about?

The trial court decreed specific performance of an agreement to sell land. Allowing the appeal, the High Court held that time was the essence of the agreement and the plaintiff, who paid only earnest money and sued on the last day of limitation, was never ready and willing. The decree was set aside and the earnest money refunded with interest.

What did the court decide?

Appeal allowed; the decree of specific performance set aside; the appellant/defendant directed to refund Rs.21,000/- with interest at 12% per annum from 01.09.2001 within four weeks.

Smt. N.S.Varija Rao Vs Sri P a Vijayan — Specific Performance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13^TH DAY OF SEPTEMBER, 2021

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BEFORE

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THE HON'BLE MR. JUSTICE H.P. SANDESH

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R.F.A.NO.274/2007 (SP)

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BETWEEN:

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SMT.N.S.VARIJA RAO W/O SRI N.SHANKARANARAYAN RAO AGED ABOUT 51 YEARS RESIDENT OF DOOR NO.3/46, SAJIPA MANNUR VILLAGE BANTWALA TALUK NOW RESIDING AT MAJALU HOUSE NEERPADE POST, BELTHILE VILLAGE BANTWAL TALUK REPRESENTED BY HER HUSBAND AND SPECIAL POWER OF ATTORNEY HOLDER SRI N.SHANKARANARAYAN RAO S/O LATE N.VASUDEVA RAO AGED ABOUT 63 YEARS NOW RESIDING AT MAJALU HOUSE NEERPADE POST, BELTHILE VILLAGE BANTWAL TALUK, D.K. … APPELLANT

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[BY SRI K.S.CHANDRAHASA, ADVOCATE]

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AND:

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SRI P.A.VIJAYAN S/O LATE A.APPE AGED ABOUT 65 YEARS RESIDING AT B.C.ROAD BANTWAL TALUAK DAKSHINA KANNADA-574 219. … RESPONDENT

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[BY SRI K.S.HARISH, ADVOCATE]

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THIS R.F.A. IS FILED UNDER ORDER 41 RULE 1 R/W SECTION 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 29.09.2006 PASSED IN O.S.NO.279/2004 ON THE FILE OF THE II ADDL. CIVIL JUDGE (SR. DN.), MANGALURU, DECREEING THE SUIT FOR SPECIFIC PERFORMANCE.

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THIS R.F.A. COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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J U D G M E N T

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This appeal is filed challenging the judgment and decree passed in O.S.No.279/2004 dated 29.09.2006 on the file of II Additional Civil Judge (Sr.Dn), at Mangaluru, decreeing the suit for the relief of specific performance.

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The parties are referred to as per their original rankings before the Trial Court to avoid confusion and for the convenience of the Court.

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The factual matrix of the case is that the plaintiff and the defendant had entered into an agreement on 01.09.2001 for the valuable sale consideration of Rs.1,90,000/- and the price agreed was Rs.47,500/- per cent. As on the date of the agreement of sale, the plaintiff has paid a sum of Rs.21,000/- in cash which has been acknowledged by the defendant in the agreement itself and the plaintiff agreed to pay the remaining

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consideration amount of Rs.1,69,000/- within a period of one month and possession would be handed over at the time of execution of the sale deed.

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It is the contention of the plaintiff that he has put up a laterite stone compound wall on two sides and dug a well in the schedule property by spending more than Rs.35,000/-. In spite of repeated request by the plaintiff, the defendant has failed to execute the sale deed and went on postponing the execution of the document on one or other reasons and the plaintiff is always ready and willing to perform his part of contract. Even though he had called the defendant to come and execute the sale deed she did not come forward to execute the sale deed. Hence, without any other alternative, the suit for specific performance was filed before the Trial Court.

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The defendant in pursuance of the suit summons has filed the written statement admitting the execution of the sale agreement and also received an amount of Rs.21,000/- as earnest money on 01.09.2001 but took the contention in the written statement that the plaintiff has not paid the remaining sale consideration of Rs.1,69,000/- to the defendant within one

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month from 01.09.2001 and thereby he violated the terms and conditions of the agreement of sale. The suit is filed belatedly after lapse of three years seeking the relief of specific performance with an intention to knock off the land, which is valuing many times more than the previous rate and the suit agreement is not enforceable, nor the defendant has any such obligation to execute the sale deed. Hence, the plaintiff is not entitled for any relief of specific performance.

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Based on the pleadings of the parties, the Trial Court

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has framed the following six issues:-

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1. Whether the plaintiff proves that he has always been ready and willing to perform his part of the contract in terms of the agreement of sale dated 1-9-2001?

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2. Whether the plaintiff proves that the defendant committed default and failed to execute the regular sale deed as agreed upon?

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3. Whether the plaintiff is entitled to be put in possession of the plaint schedule property as claimed?

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4. Whether the suit is barred by limitation?

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5. Whether the plaintiff is entitled for the relief of specific performance?

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6. To what order or decree?

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The plaintiff in order to substantiate his contention,

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he examined himself as P.W.1 and got marked the documents as Exs.P1 to P12. On behalf of the defendant, the defendant herself examined as DW.1 and got marked the documents as Exs.D1 to D3.

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The Trial Court, after considering the material on record answered issue Nos.1 to 3 as affirmative regarding execution of the document and the defendant had committed default in executing the sale deed and also comes to the conclusion that the plaintiff is entitled to put in possession of plaint schedule property and answered issue No.4 as negative in coming to the conclusion that the suit is not barred by limitation.

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However, it is held that the plaintiff is entitled for the relief of specific performance. Being aggrieved by the judgment and decree of the Trial Court, the defendant has filed this appeal contending that the Trial Court has committed an error in decreeing the suit and the very finding of the Trial Court is arbitrary and passed against the material on record.

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The Trial Court erred in holding that the respondent herein agreed to pay the balance sale consideration of

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Rs.1,69,000/- at the time of registration of the document and the defendant had agreed and undertaken to execute the registered document within one month from the date of the agreement and received the balance sale consideration as per paragraph Nos.2 and 29 of the judgment. The said conclusion of the Trial Court is erroneous and Ex.P1 has been misread and misquoted by the Trial Court and failure of the respondent herein to come forward to perform his part of the contract by paying the balance sale consideration has not been highlighted anywhere in the impugned judgment and decree. The very finding of the Trial Court is erroneous. Though the burden of proof on issue Nos.1 and 2, is cast upon the respondent herein, the respondent has not produced any scrap of paper to show that he was always ready and willing to perform his part of contract and he repeatedly requested the appellant herein to execute the document and the defendant was postponing the request as alleged in para No.4 of the plaint. The Trial Court has erroneously comes to the conclusion that the defendant did not issue any notice against the plaintiff and the very approach of the Trial Court is erroneous instead the plaintiff has to prove his ready and willingness to prove his part of the contract. On the

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other hand, comes to an erroneous conclusion that the defendant did not come forward to demand to have the sale deed and the same is unknown to law.

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It is also contended by the learned counsel appearing for the appellant that the very suit itself has been filed on 29.09.2004, which is one day prior to receipt of the notice. Therefore, the Trial Court was totally failed to appreciate these aspects while passing the impugned judgment and decree. The Trial Court in believing the version of the respondent that after 10 to 15 days from the date of sale agreement under Ex.P1, the respondent herein put up the compound wall on two sides and dug a well, by allegedly spending Rs.35,000/-. In this regard,

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the respondent herein has not produced any scrap of paper to show that such compound wall and the alleged well was dug by the respondent herein. In spite of the same the Trial Court has committed an error in decreeing the suit in favour of the plaintiff. The learned counsel would vehemently contend that the agreement is dated 01.09.2001 and in terms of the agreement the amount is payable within one month i.e., 01.10.2001 and the Trial Court failed to take note of the recitals

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made in agreement-Ex.P1 regarding time is the essence of the contract.

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The learned counsel brought to the notice of this Court that a legal notice was issued on 18.09.2004 and though it is stated 18.09.2004, it was dispatched on 22.09.2004 and the same was acknowledged by the defendant on 30.09.2004. The suit was filed on 29.09.2004 before acknowledging the legal notice. The Trial Court has committed an error in relying upon the documents-Exs.P5 and P7 to P11. The very approach of the Trial Court in a case of suit for specific performance even in the absence of compliance of Section 16(c) of the Specific Relief Act passed an erroneous judgment directing the defendant to execute the sale deed by receiving the balance sale consideration, is erroneous. Hence, it requires an interference of this Court.

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The learned counsel in support of his arguments, he relied upon the judgment of the Apex Court in the case of His

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Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar reported in (1996) 4 SCC 526 , wherein, the Apex Court held that in a case for suit for specific performance of

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contract for sale of land - Readiness and willingness of plaintiff to perform his part of the contract – To be ascertained from the conduct of the party and attending circumstances – Meaning of ‘readiness’ and ‘willingness’ and distinction between – Where plaintiff neither had sufficient funds to pay the consideration amount nor was he acting promptly within the stipulated time where time was of the essence of the contract, held, he was neither ready nor willing to perform his part of the contract – Hence plaintiff not entitled to decree for specific performance of the contract.

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The learned counsel also relied upon the judgment of

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the Apex Court in the case of N.P. Thirugnanam (D) by L.Rs v. Dr. R. Jagan Mohan Rao and others reported in AIR 1996

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SC 116 , wherein, the Apex Court with regard to ‘Ready and willing to perform’ contract held that the evidence showing that plaintiff was never ready with resources and money to fulfil his part of contract – Dismissal of suit for specific performance of contract is justified.

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The learned counsel also relied upon the judgment of

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this Court in the case of N.K.Giriraja Shetty v. N.K.

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Parthasarathy Setty and Others reported in 2006(2) KCCR SN 99 (DB), wherein, the Division Bench of this Court held that the Willingness to perform – The vendee is not only required to be always ready and willing to perform his part of the contract, but his readiness must be from the date of agreement till getting of registered sale deed in his favour.

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The learned counsel relied upon the judgment of the Apex Court in the case of H.P.Pyarejan v. Dasappa (DEAD) by LRs. and Others reported in (2006) 2 SCC 496, wherein, the suit for specific performance of contract – Requirement therein on the part of plaintiff to aver in plaint and establish the fact that he was always ready and willing to perform his part of the contract – Basic principle behind, held, is that the plaintiff must manifest that his conduct has been blemishless throughout entitling him to the specific relief.

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The learned counsel also relied upon the judgment of this Court in the case of C.N.Ranganath v. M.R.Thyagaraja reported in ILR 1996 KAR 3595 , wherein, this Court in reference to Section 16(c) – In suit for specific performance of agreement to sell property, plaintiff not expressing his being

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ready and willing to pay balance consideration nor intimating defendant – but filing suit on a day before date fixed for registration – suit though not premature, held, plaintiff not entitled to decree for specific performance for not proving his readiness and willingness.

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The learned counsel also relied upon the judgment of

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the Apex Court in the case of K.S.Vidyanadam and Others v. Vairavan reported in (1997) 3 SCC 1 , wherein, the Apex Court held that where agreement specifying period of 6 months within which plaintiff had to purchase the stamp papers, tender the balance amount of consideration and require the defendants to execute the sale deed, total inaction for 2½ years after initial payment of a small amount as earnest money by the plaintiff would be a circumstance which would weigh against exercise of discretion for grant of specific performance of the agreement in favour of the plaintiff.

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The learned counsel also brought to the notice of this

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Court the judgment in the case of Dasappa v. Seetharam reported in ILR 1995 KAR 1683 , wherein, this Court held that the plaintiff to stand on own legs not on weakness of defendant’s

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case – Allegation in plaint coupled with principal or main relief claimed determines nature of suit & forum. Further, held that under Section 5 of the Specific Relief Act, a person who has been deprived of his immoveable property or its possession can file a suit for recovery of that property and possession thereof claiming the decree for possession of the property on the basis of his title even. Also discussed Section 6 of the Act, for diligent ness of the party, who approaches the Court and also the applicability of the limitation to seek the redressal before the Court.

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The learned counsel relied upon the judgment of the Apex Court in the case of Bismillah Begum (SMT) DEAD by LRs, v. Rahmatullah Khan (DEAD) by LRs. reported in (1998) 2 SCC 226 , wherein, the Apex Court held that no evidence to show that plaintiff was unable to perform his part of the contract because of the defendant’s attitude. Time is always the essence of the contract for reconveyance of the property – Repayment having not been made by plaintiff within the stipulated time, option of reconveyance in her favour must be deemed to have lapsed.

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The learned counsel also relied upon the judgment of the Privy Council in the case of Ardeshir H. Mama v. Flora Sassoon reported in AIR 1928 Privy Council 208 , wherein, discussed Section 24 of the specific Relief Act, suit for specific performance – Plaintiff must show readiness to do his part of the contract up to decree.

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The learned counsel also relied upon the judgment of this Court in the case of Smt. Savitramma v. Dr. M.P. Somaprasad and another reported in 2010 (4) KCCR 2864 (DB) , wherein, this Court held that readiness and willingness to perform contract – Party not performing any act within stipulated period - Time expired - Buyer contending that time is not the essence of contract – Seller contending time is essence of contract – Whether the presumption as laid down in AIR 1993 SC 1742 (Smt. Chand Rani (Dead) by LRs. v. Smt. Kamal Rani (Dead) by LRs.) applies, and the same is explained in the judgment.

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The learned counsel also relied upon the judgment of this Court in the case of Sri K.L. Sathyaprakash and another

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v. Kothari Motors Limited, Mysore reported in 2010(4)

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KCCR 2933 (DB) , the Division Bench in this judgment held that the time is the essence of the contract - Facts of the case to be taken into account. The vendor agreed to sell the property for dire necessity – Buyer not complying with the term within stipulated period – Total in action on the part of the buyer – Cannot seek specific performance. He who seeks equity share does equity. The plaintiff approaching Court seeking specific performance not complying his obligations cannot have the relief.

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Per contra, the learned counsel appearing for the respondent in his argument he vehemently contend that the Court has to take note of the averments made in the agreement

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– Ex.P1. Though the time is mentioned as one month, the Court has to take note of other terms of the agreement and the same has to be taken note of while considering the document Ex.P1Sale Agreement.

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The main contention of the defendant before the Trial Court is that the plaintiff has approached the Court belatedly though took the contention that he was not having any capacity. But in the cross-examination, the defendant

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categorically admitted with regard to the capacity of the plaintiff to pay the balance amount of sale consideration. When such being the case, the plaintiff cannot contend that he was not having any capacity to sell the property.

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The learned counsel also would vehemently contend that the Trial Court while considering the case of the plaintiff has discussed in detail the evidence of P.W.1 and also D.W.1, wherein, comes to the conclusion that the defendant did not give any notice to the plaintiff even though the time is the essence of the contract and she kept quiet and now she cannot contend that the plaintiff was not always ready and willing to perform his part of contract.

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The learned counsel in support of his arguments he relied upon the judgment of the Apex Court passed in Civil Appeal No.2420/2018 D.D. 10.07.2019 , wherein, the High Court has reversed the concurrent finding of both the Courts and setting aside the decree of specific performance and the same has been reversed by the Apex Court and while passing the order, it is observed that the High Court was also incorrect in putting a short delay in filing the suit against the plaintiff to state

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that he was not ready and willing. The Apex Court also discussed with regard to the rule of equity, exists in England and also in India. Hence, the learned counsel would vehemently contend that the said judgment is aptly applicable to the case on hand in a case of specific performance.

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The learned counsel also relied upon the judgment of the Apex Court in the case of Ram Niwas Gupta v. Mumtaz Hasan and Ors. reported in 2002(7) Supreme 591 , wherein, the Apex Court held that while considering the discretionary power of the Court, the delay in filing suit for specific performance, whether can be sole ground to refuse specific performance relief – Court must frame issue as to whether there has been unexplained delay on the part of the plaintiff in taking recourse to law, though suit is filed within prescribed period of limitation – Lower Courts, in this case, not justified in refusing specific performance of contract for sale but granting compensation in the alternative, without framing specific issue on question of delay in filing a suit.

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The learned counsel also relied upon the judgment of this Court in the case of B.R. Rangaswamy v. D.Syed

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Younous and others reported in 2000(4) Kar.L.J. 187(DB) , the Division Bench in this case held that in a suit for specific performance, it is a discretionary relief – Ordinary rule is that relief should be granted. It is to be denied only when equitable considerations point to its refusal and circumstances show that damages would be adequate relief – Appreciation in value of property over years since agreement is no ground to deny specific performance when party itself is responsible for delay in execution of sale – Where prior agreement to sell suit property to third party, alleged to be existing is not proved, Court should decree suit for specific performance.

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The learned counsel also relied upon the judgment of the Apex Court in the case of Laxman Tatyaba Kankate and another v. Smt. Taramati Harishchandra Dhatrak reported in AIR 2010 SC 3025 , wherein, the Apex Court held that the suit for specific performance – Agreement to sell land – Plea that there has been considerable increase in price of suit land – Even if true, cannot be ground to deny specific performance.

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The learned counsel also relied upon the judgment of this Court in the case of C. Nazeer Ahmed v. S. Jahan Ara

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reported in ILR 2000 KAR 3536 , wherein, the division bench of this Court regarding Section 16 is concerned held that, whether time is the essence of contract in suit for specific performance has to be ascertained by looking to other provisions of the contract. If those terms indicate that the completion of the transaction within the time specified was intended to be a “Fundamental Requirement”, then only it has to be held that the Time is the essence of Contract.

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The learned counsel referring to these judgments would vehemently contend that the Trial Court has rightly comes to the conclusion that the time is not the essence of the contract looking into the material available on record. Hence, it does not require any interference of this Court and seeks for dismissal of the appeal.

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Having heard the learned counsel appearing for the appellant/defendant and the learned counsel appearing for the respondent/plaintiff and also on consideration of the material available on record in keeping the principles laid down in the judgments referred supra by the respective counsel, the points that would arise for consideration of this Court are:

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Whether the Trial Court has committed an error in decreeing the suit in coming to the conclusion that the time is not the essence of the contract?

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Whether the Trial Court has come to an erroneous conclusion that the plaintiff was always ready and willing to perform his part of the contract?

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Whether the Trial Court has committed an error in granting the relief of specific performance exercising its discretion under Section 20 of the Specific Relief Act, 1963?

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What order?

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Point Nos.(i) to (iii):

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Having heard the respective counsel and the principles laid down in the judgments referred supra; there is no dispute with regard to the fact that when the suit is filed for the relief of specific performance there must be an agreement between the parties. It is not in dispute that the Court has to look into whether the parties have acted upon in terms of the contract entered into between the parties in a case of suit for specific performance under Section 16(c) of the Specific Relief Act is more important to balance the discretion whether it is in favour of the plaintiff or in favour of the defendant. In the case

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on hand, there is no dispute with regard to the execution of the sale agreement, which is in question. It is also not in dispute that the said sale agreement came into existence on 01.09.2001 for the sale consideration of Rs.1,90,000/-. It is also not in dispute that an amount of Rs.21,000/- was paid by way of cash and remaining consideration amount of Rs.1,69,000/- would be paid by him to the defendant within one month from 01.09.2001.

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The main contention of the plaintiff is that the time is not the essence of the contract. It is also contended by the plaintiff that even though he had requested orally the defendant to receive the balance sale consideration and execute the sale deed, she did not come forward to execute the sale deed. But the fact remains before the Court is that the sale agreement is dated 01.09.2001 in terms of Ex.P1. It is also important to note that the legal notice was issued on 18.09.2004. It is the contention of the defendant’s counsel that though it is stated the legal notice was dated 18.09.2004, the same was dispatched on 22.09.2009 and acknowledged on 30.09.2004. It is not in dispute that the suit was filed one day prior to acknowledging

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the legal notice i.e., on 29.09.2004. It is evident from the records that in terms of the agreement – Ex.P1, time is the essence of the contract under which Ex.D1, one month time is stipulated to make the balance payment of Rs.1,69,000/-. It is also evident from the records that the suit was filed one day prior to the limitation. Since the time is the essence of the contract i.e., for a period of one month from 01.09.2001 and also filing of the suit on 29.09.2004, it is emerged in the evidence that the suit is filed one day prior to the period of limitation. It is also important to note that the claim of the defendant is that he had requested the plaintiff to execute the sale deed within a period of one month. In order to substantiate the said contention except the oral evidence of P.W.1 nothing is placed on record. It has to be noted that he was cross-examined by the defendant’s counsel and in the cross-examination, he categorically admits that the time is stipulated for a period of one month to pay the balance sale consideration amount, but his evidence is that he had requested the plaintiff orally within one month, but he categorically admits that he did not issue any notice to the defendant, but he claims that he went near the Hotel of the defendant and requested to execute the sale deed.

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But in the cross-examination, he categorically admits

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that he cannot tell on what date he went near the Hotel and requested. But he claims that he was visiting every 15 days subsequent to the agreement and requesting him to execute the sale deed. He categorically admits that he was not having any difficulty to issue any notice within one month as agreed in terms of the agreement to receive the balance sale consideration amount and to execute the sale deed. He also categorically admits that though he claims that he dug the well and put up the compound wall, he did not obtain any permission from the defendant. However, he volunteers that the same is also an oral permission. He categorically admits that he has also not taken any permission, but claims that the owner may be obtained the permission. In the cross-examination, he admits that he cannot tell how much he had spent for put up the compound wall and from whom he got extracted the work of compound wall. Even he does not remember the person, who dug the well and his name is also not remembered. He also admits that he cannot tell how much amount he has spent to dug the well and also to put up the compound wall. He admits that in terms of the agreement he was liable to pay an amount of Rs.1,69,000/-.

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Having taken note of the evidence available on record before the Court, it is clear that the time is the essence of the Contract and the remaining balance sale consideration amount of Rs.1,69,000/- was payable within one month i.e., on or before 01.10.2001, admittedly, the same has not been paid. It is also important to note that the defendant, who has been examined before the Trial Court, in her evidence, she categorically admitted the execution of the sale agreement. But his main contention is that the balance amount of Rs.1,69,000/has not paid within the said period.

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The learned counsel appearing for the plaintiff also brought to the notice of this Court that the contents of the written statement in paragraph Nos.5 and 7, wherein, the defendant has taken the contention that the plaintiff is now waking up himself after long lapse of three years and seeking for execution of the sale deed at the very same rate and praying to knock off the land, which is valuing many times more than the previous date.

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The learned counsel referring to this statement would contend that due to the escalation of the price in the

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market, the defendant contended that the agreement cannot be enforced under law. In support of his contention, he also relied upon several judgments referred to supra. No doubt, it is a settled law that even the value is escalated; the same cannot be

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a ground to refuse the relief of specific performance. At the same time, the Court has to take note of whether the plaintiff was always ready and willing to perform his part of contract in compliance of Section 16(c) of the Specific Relief Act. The principles laid down in the judgments referred supra by the defendant’s counsel also it is very clear that if the plaintiff fails to perform his part of the contract then he is not entitled for the relief of Specific Performance.

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In keeping the principles laid down in the judgments

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and also referring to the evidence of the parties, I have already pointed out that the defendant also not disputed the execution of the agreement. But the only main contention is that the plaintiff slept over for a period of almost three years from the date of agreement and he did not come forward to pay the balance sale consideration and also it is the contention of the defendant that he was not having any capacity to pay the amount but the

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counsel appearing for the plaintiff has brought to the notice of this Court, he has produced the document Exs.P5 and 11. On perusal of Ex.P5, no doubt, in the relevant month he was having an amount of Rs.75,000/- in his account. The defendant apart from Ex.P5 also produced Ex.P11, particularly in the relevant period he was having an amount of Rs.1,04,000/- in his account.

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Now, the question before the Court is whether the plaintiff was always ready and willing to perform his part of the contract. It is not in dispute that the time is the essence of the contract in terms of the agreement-Ex.P1 and one month time is stipulated in the agreement. Now, the question before this Court is whether within one month the plaintiff has tendered the amount in favour of the defendant asking her to come and execute the sale deed. But no documentary evidence is placed before the Court for having he demanded the defendant to receive the balance sale consideration and execute the document.

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It is also important to note that the legal notice was issued on 18.09.2004 almost fag end of three years of the agreement. It is also important to note that the notice was

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delivered on 30.09.2004 but the suit was filed on 29.09.2004 for the reason that if the plaintiff is waited till receipt of the postal acknowledgement suit would have been barred by limitation. One day prior to the limitation, the present suit is filed. In between 01.09.2001 and till the date of issuing legal notice, the plaintiff is not acted upon in terms of the contract. When the time is the essence of the contract, the plaintiff ought to have issued a legal notice within one month as stipulated in document-Ex.P1. It is not the case of the plaintiff that the defendant had not produced any document in respect of the property is concerned. But he slept over almost for a period of three years and did not demand or offer any amount in favour of the plaintiff to pay the amount within one month. Even immediately after one month also not tendered the amount or demanded and issued any legal notice, he kept quiet for a period of three years and in the fag end of the limitation period, he had approached the Trial Court for seeking the relief of specific performance. When such being the conduct of the plaintiff, the Trial Court ought not to have come to the conclusion that the plaintiff was always ready and willing to perform his part of the contract. The said observation of the Trial Court is erroneous

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and no material on record to show that he was always ready and willing to perform his part of contract.

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It is also important to note that the Trial Court even erroneously proceeded in coming to the conclusion that the time is not the essence of the contract. When the document – Ex.P1 itself clearly discloses that the time is the essence of the contract and one month time is stipulated in the agreement, the Trial Court ought not to have comes to such a conclusion that the time is not the essence of the contract. The very approach of the Trial Court is erroneous and the same is against the material available on record.

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The learned counsel for the respondent also brought to the notice of this Court that the Trial Court considering both oral and documentary evidence placed on record comes to the conclusion that the time was not the essence of the contract and also tried to convince this Court that the Court has to look into the other terms of the agreement. No doubt, in the agreement there is no any stipulation with regard to the forfeiture of the amount, which has been paid as earnest money but the fact is that the time is the essence of the contract and one month time

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is stipulated in the agreement, is not disputed. When such being the facts and circumstances of the case, even in the absence of any forfeiture clause in the agreement, the plaintiff cannot slept over for a period of almost three years.

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When such being the facts and circumstances of the case, I do not find any force in the contention of the plaintiff’s counsel that he was always ready and willing to perform his part of the contract. The very finding of the Trial Court is erroneous and the same is against the material available on record and even failed to discuss the stipulation of time mentioned in the agreement instead of comes to the conclusion that the balance amount is payable at the time of registration of the document. No doubt, on perusal of document – Ex.P1, it is clear that the possession would be delivered at the time of registration of the document. But it is specific that the amount should be paid within one month from the date of agreement and not discussed anything about the time is the essence of the contract. Instead erroneously comes to the conclusion that the time is not the essence of the contract. The very observation is nothing but excluding documentary evidence; when the documentary

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evidence is available, the Court cannot rely upon the oral evidence. But in the case on hand, the Trial Court only relied upon the oral evidence and excluded the documentary evidence available on record. Hence, the very finding of the Trial Court is perverse in coming to such a conclusion that the time is not the essence of the contract.

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Having considered the material on record, the Trial

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Court has erroneously proceeded in a case of specific performance exercising the discretion and while exercising the discretion under Section 20 of the Specific Relief Act, first Court has to satisfy with regard to Section 16(c) even though the agreement is lawful to do so only after compliance of Section 16(c) then again the Court has to exercise the discretion whether it is a fit case to exercise the powers under Section 20 of the Specific Relief Act. In the case on hand, as held by the Apex Court by paying a nominal amount cannot prolong the matter. In a case on hand also, an amount of Rs.21,000/- was paid out of Rs.1,90,000/- as sale consideration and not taken any steps for a period of three years and 15 days. But notice is issued after three years and 15 days of the sale agreement for

¶137

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enforcing the sale agreement. When such being the factual aspects of the case, the very judgment of the Trial Court requires to be interfered with by this Court by setting aside the judgment of the Trial Court and the plaintiff is not entitled for the relief of specific performance under the above circumstances. However, taking into note of the document Ex.P1, there was no any recital for forfeiture of the earnest money paid under the sale agreement. When such being the case, when there is no clause for forfeiture in the agreement, the plaintiff is entitled for refund of the amount, which has already been paid i.e., Rs.21,000/- and taking into note of the period, it is appropriate to award an interest at the rate of 12% per annum on the amount of the earnest money of Rs.21,000/-. Hence, I answered point Nos.(i) to (iii) as affirmative.

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Point Nos.(iv):

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In view of the discussions made above, I pass the

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following:

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ORDER

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(i) The appeal is allowed.

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(ii) The impugned judgment and decree passed in O.S.No.279/2004 dated 29.09.2006 on the file

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¶146

of II Additional Civil Judge (Sr.Dn), at Mangaluru, is hereby set aside.

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(iii) The appellant/defendant is directed to refund the amount of Rs.21,000/- with interest at 12% per annum from 01.09.2001 within four weeks from today.

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In view of allowing the main appeal, I.As, if any, do not survive for consideration and the same stand disposed of.

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Sd/JUDGE

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cp*

Smt. N.S.Varija Rao v. Sri P a Vijayan

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Smt. N.S.Varija Rao v. Sri P a Vijayan

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