Dismissed

Farooque Dadabhoy v. Dr. Usha S.Bhat

Madras HC23 Jun 2014CS/26/2006

Case brief

AI extract

What is this about?

The Court dismissed a suit for specific performance of a sale agreement. The plaintiff failed to establish readiness and willingness, concealed material facts regarding an unencashed advance cheque, and approached the Court with unclean hands. The Court found that enforcing the agreement would give the plaintiff an unfair advantage due to significant increase in property value and delay caused by

What the court decided

AI extract

Farooque Dadabhoy Vs Dr. Usha S.Bhat — Specific Performance | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED:23.06.2014

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CORAM:

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THE HONOURABLE MR. JUSTICE K.K. SASIDHARAN

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C.S.No.26 of 2006

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Farooque Dadabhoy ..Plaintiff

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-Vs.-

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Dr. Usha S. Bhat ..Defendant

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Prayer:- Suit filed under Order IV Rule 1 of Original Side Rules read with Order VII Rule 1 of Civil Procedure Code praying for a judgment and decree against the defendant (a) for specific performance of sale dated 12 August 2005 entered into by the plaintiff with the defendant by directing the defendant to execute a sale deed in favour of the plaintiff or his nominees in respect of the suit property on or before an appointed day after receiving the balance sale price of Rs.2,95,00,000/- failing which this court may execute the sale deed in favour of the plaintiff and (b) to award cost of the suit.

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For Plaintiff : Mrs. Chitra Sampath

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Senior Counsel for Mr.T.S. Baskaran

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For Defendant : Ms. S.P. Aarthi

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This is a suit for specific performance on the basis

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of a sale agreement dated 12 August 2005 whereby and https://hcservices.ecourts.gov.in/hcservices/ whereunder the defendant agreed to sell the property

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admeasuring 9560 sq.ft. with a residential house of 7300

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sq.ft. situated at Door No.17, Subbarao Avenue, First Street, Numgambakkam, Chennai-600 034, which is a prime residential area in the City of Chennai for a sum of Rs. 3 Crores to the plaintiff, making it clear that time was the essence of contract.

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Case of the Plaintiff:

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2(a) The plaintiff is a resident of Subbarao Avenue,

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Chennai. The defendant is his immediate neighbour. According to the plaintiff, he came to know through his friend and neighbour Mr.Kapil Chitale that the defendant is willing to sell the schedule property and was looking for a right purchaser. The plaintiff offered to purchase the property for a sum of Rs.3 Crores and gave a sum of Rs.5 lakhs as advance by way of cheque. Time was considered as the essence of contract. The plaintiff agreed to pay the balance sale consideration of Rs.2,95,00,000/- (Rupees two crores ninety five lakhs only) within a period of three months. There was a further stipulation in the sale agreement dated 12 August 2005 that the entire transaction should be completed on or before 30 November 2005.

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(b) It is the case of the plaintiff that he was ready with the balance sale consideration and to perform his part of the contract. However, the defendant expressed her

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inability to execute the sale deed for the reason that she https://hcservices.ecourts.gov.in/hcservices/ wanted to utilise the property till November, 2005 in

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connection with the marriage of her daughter. Since there was no communication from the defendant thereafter, the plaintiff sent a letter dated 5 October 2005, wherein he made a request to the defendant to indicate her convenient date. The defendant on receipt of the communication orally informed the plaintiff that she would be visiting Chennai between 1 and 3 November 2005 and would like to have the registration thereafter. The plaintiff sent an e-mail on 20 October 2005 to the defendant once again requesting her to inform the tentative dates on which she would complete the sale. However, there was no reply from the defendant. The plaintiff thereafter sent a letter dated 5 November 2005 to the defendant by registered post to her residential address at Chennai. Though the defendant was present in her residence, she refused to receive the letter and as such, the postman returned the letter with an endorsement "Intimation dropped in the house letter box".

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(c) It is the further case of the plaintiff that on 8 November 2005, he met the defendant in person. The defendant agreed to complete the transaction immediately after the marriage of her daughter scheduled to be held on 18 November, 2005. The plaintiff by letter dated 9 November 2005 requested the defendant not to delay the completion of sale. In the said letter the plaintiff

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informed the defendant that he has been holding huge sum of https://hcservices.ecourts.gov.in/hcservices/ money for almost two months and he would lose interest in

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case the transaction is further delayed. The letter dated

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9 November 2005 was also not received by the defendant and it was returned with an endorsement dated 14 November 2005 as "intimation dropped in the house letter box". The plaintiff sent another communication dated 18 November 2005 requesting the defendant to arrange the registration of sale deed atleast during the week commencing 21 November 2005. However, the defendant avoided the said notice also.

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(d) Thereafter, the plaintiff along with Mrs.Kashmere Chitale, wife of Mr.Kapil Chitale met the defendant in person in her residence on 23 November 2005 and requested her to perform her part of the contract. The defendant during the said discussion informed the plaintiff that the prices have gone up and wanted him to pay additional consideration over and above the agreed price. However, the plaintiff was not prepared to enhance the price. The plaintiff on the very same day through a letter called upon the defendant to register the property and deliver him vacant possession. The said letter sent by courier was not received by the defendant. The plaintiff sent another letter dated 28 November 2005 to the defendant reiterating his willingness to pay the balance consideration and to conclude the transaction. Thereafter a telegram was

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sent calling upon the defendant to complete the sale and https://hcservices.ecourts.gov.in/hcservices/ register the property. It was followed by an e-mail sent

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on 9 December 2005. According to the plaintiff, in spite

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of sending series of letters and e-mails the defendant has not taken any action to execute the sale deed after receiving the balance sale consideration. The plaintiff therefore laid the suit for specific performance.

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(e) The plaintiff along with the suit filed an

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interlocutory application for injunction to restrain the respondent from selling the property to third parties or encumbering the same.

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Case of the defendant:

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3(a) The defendant filed a detailed written statement

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in answer to the contentions raised in the plaint filed in C.S.No.26 of 2006. According to the defendant she was not

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in good terms with her husband. Her husband was residing elsewhere. Her children were staying in hostel. She virtually led a lonely life and being unable to cope up with the strenuous work in the hospital, she was forced to close the hospital built with enormous effort. Subsequently, she sold the hospital. She was living in the house constructed by her in the suit property. In fact the house was constructed by none other than the father of Thiru Kapil Chitale, who is an architect and the adjacent house owner.

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(b) There was an offer by a person from Singapore to

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purchase the property for Rs.3 crores in August 2005. https://hcservices.ecourts.gov.in/hcservices/ However, she was not prepared to sell the property.

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(c) The plaintiff appears to have got the news that there was a proposal to sell the house. The plaintiff prevailed upon the defendant to sell the property. The plaintiff in association with Thiru Kapil Chitale exerted undue influence to sell the property to them. They spoke to her about the needless sense of loneliness that she suffered in the large house. According to the defendant, she was going through bounds of depression and was under medication. She was also taking professional counseling from known psychiatrists. The anti-depressants that the defendant was taking had a severe toll on her and slowed down her judgmental faculty and put her on edge that heightened her vulnerability to even minimal pressure. In short, she was not in good health during August, 2005.

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(d) It is the further case of the defendant that on 12 August 2005 at about 2.30 p.m. the plaintiff came in

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his car to her house which was just twelve houses away and took her to his house by infusing a needless sense of urgency. He had prepared the text of an agreement of sale and wanted the defendant to sign the document. Even though the defendant informed the plaintiff that there was another purchaser, who offered Rs. 3 Crores as down payment and as such there is no point in receiving a sum of Rs.5 lakhs as advance, the plaintiff told her that the advance mentioned in the agreement was only a formality. According https://hcservices.ecourts.gov.in/hcservices/ to the defendant, she signed the agreement feeling

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overwhelmed by the pressures the plaintiff was employing on

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her and taking full advantage of her vulnerability due to physical and mental ill health. In short, the defendant contended that the agreement dated 12 August 2005 was not

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the result of her free will. The plaintiff was taking undue advantage of his own relative physical strength and the position he held as a long time acquaintance. The defendant denied the receipt of e-mails, fax message and registered letters. According to the defendant, the plaintiff contacted her over phone when she was in Doha and asked her as to when she was coming to India. There was no discussion with regard to the execution of sale deed in the said conversation. The defendant arrived Chennai on 5 November 2005 for her daughter's marriage on 18 November 2005. She was staying in the suit property. The defendant further contended that for clear three months from 12 August 2005 to 12 November 2005, the plaintiff had never tendered any amount for conclusion of the sale transaction. She denied the contention that the plaintiff was ready with the money to complete the transaction. It was her further contention that she has not encashed the cheque given by the plaintiff towards advance. According to the plaintiff it is inequitable to enforce specific performance of contract.

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Evidence:

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https://hcservices.ecourts.gov.in/hcservices/

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The plaintiff was examined as P.W.1. The plaintiff

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marked Exs.P.1 to P.27 on his side. The plaintiff placed reliance on the returned postal covers, returned letters and copies of e-mails in support of his contention that he has been corresponding with the defendant to conclude the transaction.

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The defendant was not examined. The learned counsel for the defendant marked Exs.D.1 and D.2 through the plaintiff.

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The plaintiff in his evidence as P.W.1 has deposed that he was ready and willing to perform his part of the contract. Though in his chief examination, it was his case that the money was lying in the Bank for a period of two months, during his cross examination, he admitted that his intention was to procure money by transfer of shares.

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Submissions:

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The learned Senior Counsel for the plaintiff made the following submissions:

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(i) The defendant has very clearly admitted the

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execution of sale agreement dated 12 August 2005 marked as Ex.P.1. Therefore, there is no dispute with regard to the transaction.

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(ii) The plaintiff marked Exs.P.2 to P.17 and Exs.P.20 to P.23 and P.25 to show that he has been contacting the defendant time and again to accept the balance sale

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consideration and execute the sale deed. The plaintiff by https://hcservices.ecourts.gov.in/hcservices/ way of oral and documentary evidence clearly proved that he

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was ready and willing to perform his part of the contract.

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Therefore he is entitled to a decree for specific performance.

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(iii) There is no need to keep liquid cash to show the bona fides. It is sufficient that the plaintiff arranges money during the time of execution of sale deed.

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(iv) The defendant has not come to the box. Therefore there is no evidence on the side of the defendant to prove the contentions taken by her in the written statement.

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(v) There are no documents before this Court to show that the plaintiff took undue advantage in the matter.

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The learned counsel for the defendant made the following substantial contentions:

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(i) The plaintiff initially prepared the agreement

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dated 12 August 2005 in green paper and obtained signature of the defendant wherein it was stated that the sale was on

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behalf of himself and his associates. Thereafter a sale agreement was executed on the very same day. The document in Exs.P.1 and P.2 would make the position clear that the

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plaintiff and his friend Mr.Kapil Chitale, who is also a neighbour made all preparations to execute the sale agreement without the knowledge of the defendant and forced her to sign the document.

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(ii) The plaintiff in his letter dated 5 November 2005

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marked as Ex.P.6 contended that he is keeping money since https://hcservices.ecourts.gov.in/hcservices/ two months. However, the ledger extract marked in the suit

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viz., Ex.D.2 clearly shows that the amount was deposited two days prior to the expiry of the time limit and it was withdrawn immediately thereafter. It is therefore clear that the plaintiff was not having sufficient funds to pay the sale consideration.

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(iii) The plaintiff paid a sum of Rs.5 lakhs as advance by way of cheque. The cheque was not encashed by the defendant. However, in the plaint, the plaintiff failed to state that the cheque was not encashed and as such he is keeping the advance amount with him. Even after knowing very well that the defendant has not encashed the

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cheque, the prayer in the plaint remained as it is for execution of sale deed after paying a sum of Rs.2,95,00,000/-. The plaintiff suppressed the material

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information with regard to the factum of failure to encash the cheque by the defendant.

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(iv) Even though the defendant in his written

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statement stated that she has not encashed the cheque for a sum of Rs.5 lakhs, the proof affidavit filed by the plaintiff proceeds as if the defendant has taken a sum of Rs.5 lakhs and the remaining amount payable to her is only a sum of Rs.2,95,00,000/-.

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(v) The conduct of the plaintiff should be seen

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throughout in a suit for specific performance. The decree

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for specific performance being a discretionary remedy, the https://hcservices.ecourts.gov.in/hcservices/ plaintiff in such suit must approach the Court with clean

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hands. The plaintiff made a false representation by saying that he has paid a sum of Rs.5 lakhs and only a sum of Rs.2,95,00,000/- alone is due.

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(vi) The value of the property even in 2005 was more than Rs.10 crores. The present value of the property is more than Rs.25 crores. In case a decree is granted now, it would give undue advantage to the plaintiff.

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(vii) The plaintiff has not spent a single penny towards purchase of schedule property. It is inequitable to grant a decree to a person who has not made any investment.

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Authorities cited by Plaintiff and Defendant:

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The learned Senior Counsel for the plaintiff placed reliance on the following citations:

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(i) The judgments in Vidhyadhar v. Manikrao (1999) 3 SCC 573 and Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 were cited in support of the contention that if a party absented from entering the witness box, adverse inference should be drawn against him.

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(ii) The judgment in Narinderjit Singh v. North Star

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Estate Promoters Ltd., (2012) 5 SCC 712 was cited to explain the proposition that escalation of price cannot by itself be a ground to deny the relief of specific performance of an agreement of sale of immovable property.

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https://hcservices.ecourts.gov.in/hcservices/

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The learned counsel for the defendant placed reliance on the following citations:

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(i) The judgment in Lourdu Mari David and others v.

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Louis Chinnaya Arogiaswamy and others (1996) 5 SCC 589 was cited in support of the contention that a party who seeks to avail the equitable jurisdiction of the Court and specific performance being equitable relief, must come to the Court with clean hands.

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(ii) The judgment in Citadel Fine Pharmaceuticals v.

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Ramaniyam Real Estates (P) Ltd., (2011) 9 SCC 147 , was cited in support of the contention that the Court can take judicial notice of the fact that in the City of Chennai, prices of real estate is constantly escalating.

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Issues:

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This Court framed the following issues and Additional issues:-

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(i) Was there consensun-ad-idem among the parties, while signing the agreement of sale dated 12 August 2005?

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(ii) Whether the plaintiff is entitled for the relief of specific performance of the agreement of sale dated 12 August 2005 as prayed for?

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(iii) To what other reliefs the plaintiff is entitled?

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Additional Issues:

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(i) Whether the plaintiff has been ready and willing

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to perform his part of the contract?

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https://hcservices.ecourts.gov.in/hcservices/

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(ii) Whether the conduct of parties and circumstances

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under which the contract was entered into would give the plaintiff an unfair advantage over the defendant?

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(iii) Whether the performance of the contract would

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involve hardship to the defendant within the meaning of clause (b) of sub-section (2) of Section 20 of the Specific Relief Act?

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(iv) Whether it is inequitable to grant a decree of specific performance?

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Discussion:

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Issue No.1 and Additional Issue No.2:-

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12 (a) The plaintiff and defendant are neighbours residing in a most covetable locality in the City of Chennai. The Schedule property is situated at Subbarao Avenue, near College Road, which is a posh area. The area is inhabited by rich people which is evident from the large bungalows situated at Subbarao Avenue. It is therefore very clear that the suit property is a prime property.

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(b) The plaintiff in his plaint has stated that he came to know through his friend and neighbour Mr.Kapil Chitale that the defendant is willing to sell the property and she was looking for a right purchaser.

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the circumstances under which the Sale agreement was executed. She also explained the undue influence exerted

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on her by the plaintiff and the other neighbour Mr.Kapil https://hcservices.ecourts.gov.in/hcservices/ Chitale to get the sale agreement executed. There was no

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denial of these circumstances by the plaintiff either in

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his evidence or by filing a rejoinder. The course of conduct adopted by the plaintiff shows that he wanted the defendant to make a written commitment without giving her little time to think and respond to the proposal made to purchase the property. This is evident from Ex.P.2. A close reading of Ex.P.2 would show that even before executing the sale agreement, the plaintiff wanted to make it sure that the defendant will not retract from the deal.

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That is why, immediately after the discussion, he got an acknowledgment in writing with regard to the conclusion of deal. The plaintiff in his evidence as P.W.1 improved his case with a view to demonstrate that it was only the defendant who originally mooted the idea of selling the property to him through his mother, besides the proposal through Mr.Kapil Chitale. It was his further case that the

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defendant had put a board on the premises about the sale of property. However, such details are not seen in the plaint. The discussion was held on the road. P.W.1

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further admitted that there was no discussion in-between the initial meeting and finalisation of the sale price. In

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fact P.W.1 even stated in his evidence that the sale consideration was finalised over phone. He was also aware of the strained relationship between the defendant and her

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husband. The evidence of P.W.1 and more particularly the https://hcservices.ecourts.gov.in/hcservices/ following question and answer clearly reveals the fact that

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the transaction relating to sale was completed on the very same day and in a hasty manner.

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Q : Whether you asked the defendant as to what was the urgency for the sale of the property?

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A: She wanted to return to Qatar the next day and so she was very particular in finalising the transaction on that day.

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(d) The course of conduct adopted by the plaintiff and

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his neighbour and friend Mr.Kapil Chitale, the attending circumstances, the urgency shown to conclude the sale without giving breathing time to the defendant to think about the sale, the preparation of the memorandum of understanding even before giving the advance and executing the sale agreement, would clearly show that the plaintiff and Mr.Kapil Chitale used their position as neighbours and took full advantage of her vulnerability due to physical and mental ill health and made her agree to the proposal for sale. Therefore it is clear that there was no consensus-ad-idem among the parties while signing the

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agreement of sale. It is also clear that the conduct of the plaintiff and circumstances under which the contract was entered into would give the plaintiff an unfair advantage

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over the defendant. Issue No.1 and Additional Issue No.2

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https://hcservices.ecourts.gov.in/hcservices/ are answered against the plaintiff.

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Issue No. 2 and Additional issue Nos.1 and 3:

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13(a) The plaintiff has produced several documents in

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his attempt to demonstrate that he has been ready and willing to perform his part of the contract. The sale agreement contains a clause that time was the essence of contract and that payments towards consideration for the purchase shall be made on or before 30 November 2005. The plaintiff in his plaint and evidence very clearly admitted this fact. Therefore, he was expected to complete the entire transaction before the stipulated period.

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(b) The documents produced by the plaintiff clearly

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shows that he was creating records to appear as if he has been ready and willing to perform his part and it was only the defendant who was at fault. The contents of these documents are self contradictory. In fact in his lawyer notice marked as Ex.P.23 it was the case of plaintiff that the defendant promised to register the property on various occasions when he met her in person. However, when he made an attempt to reach her in the month of November through Phone and in person, the defendant avoided him till 30 November 2005.

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(c) Ex.P.6 letter was sent on 5 November 2005 by registered post. In the said letter, the plaintiff has stated that he has been keeping the balance sale consideration since two months. However, the ledger https://hcservices.ecourts.gov.in/hcservices/ extract marked as Ex.D.2 would show that the sale

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consideration was deposited in Bank only on 29 November

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2005 and 30 November 2005. The amount was withdrawn immediately thereafter. The letters dated 5 November 2005 (Ex.P.6), 9 November 2005 (Ex.P.7), 18 November 2005 (Ex.P.9), 23 November 2005 (Ex.P.12) etc., were not served on the defendant. The plaintiff in Ex.P.15 letter dated 28

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November 2005 stated that he is ready with the consideration of Rs.3 Crores and is losing money by way of

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interest. This letter was also not received by the

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defendant. Ex.P.15 would prove the falsity of the case pleaded by the plaintiff. The sale amount was deposited only on 29 November 2005. However, on 28 November 2005 he has stated that the money was in the bank and he was losing interest. This letter also gives an indication that he was

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aware of the fact that the defendant has not encashed the cheque for Rs.5 lakhs given while executing Ex.P.1. In case he was not aware of the said fact, he would have said that he has kept the balance amount of Rs.2,95,00,000/ready with him. However, in the plaint and evidence, the

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plaintiff has taken a position that he was not aware that the defendant failed to encash the cheque. The plaintiff

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obtained a certificate from Bank dated 1 December, 2005 (Ex.P.18) that he is having a sum of Rs.2,25,39,525.56 in his account. The deposits were made on 29 November 2005 and

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30 November 2005 to obtain this Certificate on 1 December https://hcservices.ecourts.gov.in/hcservices/ 2005. In fact after obtaining this certificate the

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plaintiff has withdrawn the amount from Bank. The documents marked on the side of the plaintiff clearly proves that he has not come to the Court with clean hands.

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(d) It is true that there is no requirement to keep

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liquid cash with the plaintiff to show that he has been ready and willing to perform his part of the contract. However, in this case the non-availability of money plays a crucial role, inasmuch as in all his letters marked as Exs.P.6, P.9, P.12. P.15, the plaintiff has stated that he had the funds in his account and he was losing interest. However, in his evidence, it was stated that by the term "deposit" what he meant was the availability of shares with him which could be sold to raise money. The false representation made by the plaintiff in various exhibits regarding availability of sale consideration in Bank would disentitle him from seeking the decree of specific performance.

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(e) The plaintiff in his evidence as P.W.1 admitted that he met the defendant on 23 November 2005. However, in Ex.P.23 notice he has stated that the defendant avoided him in November, 2005. Therefore it is clear that P.W.1 wanted

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to manipulate records to appear as if he was ready to conclude the transaction before the cut off date and it was only the defendant who avoided him during the month of November 2005.

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https://hcservices.ecourts.gov.in/hcservices/

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(f) The suit was filed on 18 January 2006. However,

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even before the institution of suit, the plaintiff has sent Ex.P.26 dated 17 January 2006 to the Sub Registrar not to register any document in relation to the subject property.

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(g) The plaintiff filed an application in A.No.34 of

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2006 to restrain the defendant from alienating or

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encumbering the property pending disposal of the suit. The plaintiff in his affidavit filed in support of the application has not stated that he is prepared to deposit the balance sale consideration. In his evidence he has stated that such willingness was not shown as he thought that the amount need not be unnecessarily locked up in court deposit. The injunction originally granted was vacated consequent to the dismissal of the suit for default. It was restored after restoring the suit. The plaintiff who has not invested a single penny in the transaction restrained the defendant all these years from dealing with her property.

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(h) The plaintiff is a businessman. According to the

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plaintiff his office staff and Auditor used to verify the bank statements on weekly or monthly basis. Such being the position, it is clearly unbelievable, the stand taken by the plaintiff that he was not aware as to whether the defendant encashed the cheque and that is why he has stated

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in his plaint that he has paid Rs.5 lakhs and his liability https://hcservices.ecourts.gov.in/hcservices/ is to pay only the balance amount of Rs.2,95,00,000/-.

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(i) Even though the defendant took a specific contention in her written statement that she has not encashed the cheque, the plaintiff failed to file a rejoinder to correct the statement regarding payment of Rs.5 lakhs. The plaintiff instead of coming with a fair statement that the defendant has not encashed the cheque, filed an affidavit by way of chief examination, wherein again he has stated that a sum of Rs.5 lakhs was paid as advance. Such a false statement was made in the affidavit filed in support of the application for injunction also.

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(j) The learned Senior Counsel for the plaintiff contended that during the time of cross examination, the plaintiff admitted that the defendant has not encashed the cheque and as such it cannot be said that he was guilty of suppression of material facts. There is no merit in the said contention. The plaintiff was well aware of the fact that the defendant has not encashed the cheque. In case he has disclosed it in the plaint, and in the application for injunction, this Court would not have given the order of interlocutory injunction. Even after filing the written statement with full disclosure of material facts, the plaintiff has not made an attempt to reveal the truth. In the affidavit for chief examination also he has taken the same stand regarding the advance paid. The plaint was not amended by changing the prayer for a decree of specific https://hcservices.ecourts.gov.in/hcservices/ performance after receiving the sale consideration of Rs.3

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https://hcservices.ecourts.gov.in/hcservices/

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Crores, instead of the earlier prayer containing the offer

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of payment of balance consideration of Rs.2,95,00,000/-. The plaintiff at all point of time till he was cross examined, maintained that he has paid a sum of Rs.5 lakhs as advance and thereby made a deliberate attempt to mislead the Court.

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(k) The plaintiff in association with Mr.Kapil Chitale (who is none other than the son of Architect) tried to snatch away a very valuable property for a song. The defendant was put in an embarrassing position. The plaintiff misused his position as a neighbour and made the defendant to execute Ex.P.1.

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(l) The plaintiff is clearly guilty of suppression of material facts. The available documents would not support the case pleaded by the plaintiff that he has been ready and willing at all point of time. The plaintiff who has approached the Court with unclean hands is not entitled to the discretionary remedy of specific performance. Issue No.2 and Additional Issue Nos.1 and 3 are answered against the plaintiff.

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Additional Issue No.4:

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14 (a) Sub Section (2) of Section 20 of the Specific

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Relief Act gives discretion to the Court not to enforce Specific Performance in case the contract gives an unfair

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advantage to the plaintiff over the defendant or it is https://hcservices.ecourts.gov.in/hcservices/ inequitable.

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(b) The findings on Issue No.1 and Additional Issue No.2 clearly proves that the contract gives the plaintiff an unfair advantage over the defendant. Similarly it would be inequitable to direct specific performance for the following reasons

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(i) The sale agreement was executed on

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12 August 2005. The suit was filed on 18 January 2006. The suit was dismissed for default on 19 June 2006. The plaintiff filed Application No.4228 of 2007 and 4229 of 2007 to condone the delay of 324 days in filing the application for restoring the suit. Those applications were dismissed on 8 August 2008 . Thereafter the plaintiff filed Application Nos.5018 and 5019 of 2008 to condone the delay of sixteen days in filing the applications to set aside the order dismissing Application Nos.4228 and 4229 of 2007. The delay was condoned by order dated 11 December 2008. The order dismissing the suit for non prosecution was set aside on 2 April 2009. So it is very clear that the suit which was dismissed for default on 9 April 2006 was restored only on 2 April

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https://hcservices.ecourts.gov.in/hcservices/

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(ii) The negligence of the plaintiff in prosecuting the suit and considerable delay caused inbetween, should not cause prejudice to defendant.

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note of the rise in land value in the city of Chennai and refused to grant a decree of specific performance.

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(d) Even as per Ex.P.1 sale has to be completed by 30 November 2005. The plaintiff filed the suit on 18 January 2006. It was dismissed for default on 19 June 2006 and finally got restored on 2 April 2009. The value of the property has gone up considerably in the meantime. The extent as per Ex.P.1 is 9560 sq.ft. (nearly 4 ground) with a residential building having an area of 7300 sq.ft. The value shown in Ex.P.1 for the entire property is far below the market value of one ground of land in Subbarao Avenue. Therefore, sale of the property now for the value fixed in 2005 would definitely give the plaintiff an unfair advantage over the defendant and it would be inequitable also.

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https://hcservices.ecourts.gov.in/hcservices/

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(e) In Mademsetty Satyanara v. G. Yellogi Rao (1965) 2

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SCR 221, the Supreme Court found that there was a delay of 2 1/2 years between the date of agreement and date of suit notice, and in the meantime there was a substantial increase in price. The Supreme Court held that the delay has brought about a situation, where it would be inequitable to give the relief of Specific performance.

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(f) Though there was no delay in filing the present suit, the failure on the part of the plaintiff to prosecute the suit diligently caused delay in the matter. The suit which was dismissed for default was restored only on 2 April 2009. This delay is substantial. The land value in Chennai has gone up more than five times even between the date of dismissal of the suit and its subsequent restoration. The defendant cannot be penalised for the fault committed by the plaintiff. Therefore, the inaction and negligence on the part of the plaintiff has created a situation where it would be inequitable to grant a decree of specific performance.

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(g) The plaintiff has not invested a single penny in this transaction. Neither in his plaint nor in the affidavit filed in support of the injunction petition the plaintiff has come forward to deposit the sale consideration. Therefore it is clear that the attempt was to get a decree for specific performance without spending

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any amount or depositing the sale consideration in Court. https://hcservices.ecourts.gov.in/hcservices/ The plaintiff is not interested to lock his money in Court

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and that is his evidence. Such being the position, it is again inequitable to grant a decree for specific performance. The Additional Issue No.4 is answered against the plaintiff and in favour of the defendant.

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The failure of defendant to give evidence:

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15(a) The learned Senior Counsel for the plaintiff by

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placing reliance on Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 contended that adverse inference has to be drawn against the defendant on account of her failure to give evidence.

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(b) In Man Kaur, the plaintiff, who was a power agent filed a suit for specific performance. The power agent was not aware of the facts relating to the readiness and willingness on the part of the plaintiff to perform the contract. The Supreme Court having found that the plaintiff failed to give evidence, opined that the power agent cannot

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depose or give evidence in the place of his principal for the acts done by the principal or transactions or dealings of his principal, of which principal alone has personal knowledge.

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(c) The Supreme Court in Man Kaur very clearly held that in a suit for specific performance and which involves an issue as to whether the plaintiff has been ready and willing to perform his part the plaintiff should give evidence by entering the box. According to the Supreme https://hcservices.ecourts.gov.in/hcservices/ Court, a third party who has no personal knowledge cannot

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give evidence about the readiness and willingness, even if

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he is an attorney holder of the person concerned.

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(d) The judgment in Man Kaur has no application to

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the facts of the present case. Here the burden of proof is on the plaintiff to prove his readiness and willingness. There was no obligation cast on the defendant to prove the negative.

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(e) The defendant in this case has taken a specific defence in her written statement. The plaintiff has not filed any rejoinder disputing the statement contained in the written statement. Even in his evidence the plaintiff has not denied the factual contentions taken in the written statement. Therefore the defendant was not obliged to enter the witness box and substantiate her contentions. The defendant was able to prove her case by extracting answers from P.W.1 with regard to the unfair advantage and non readiness on his part to perform the contract, besides the false plea taken by him.

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(f) In Pramod Buildings & Developers (P) Ltd., v.

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Shanta Chopra (2011) 4 SCC 741, a contention was taken

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before the Supreme Court that the defendant did not step into the witness box and evidence was given only by her husband and that was insufficient. The Supreme Court while negativing the said contention observed that it was for the

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plaintiff, who approached the Court, to prove that he was https://hcservices.ecourts.gov.in/hcservices/ ready and willing to perform the contract. It was further

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held that the plaintiff in a suit for specific performance cannot obviously succeed unless he proved that he was ready and willing to perform the contract.

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The binding Precedent:

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The Supreme Court in Mohammadia Coop. Building Society Ltd. v. Lakshmi Srinivasa Coop. Building Society Ltd., (2008) 7 SCC 310 , indicated that the conduct of the plaintiff plays an important role in a suit for specific performance. The Supreme Court said:

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"71. Grant of a decree for specific

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performance of contract is a discretionary relief. There cannot be any doubt whatsoever that the discretion has to be exercised judiciously and not arbitrarily. But for the said purpose, the conduct of the plaintiff plays an important role. The courts ordinarily would not grant any relief in favour of the person who approaches the court with a pair of dirty hands. "

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In Lourdu Mari David v. Louis Chinnaya

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Arogiaswamy, (1996) 5 SCC 589 , the issue before the

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Supreme Court was in relation to the specific performance of the agreement to sell the property. The suit filed by the plaintiff was dismissed by the trial Court on the https://hcservices.ecourts.gov.in/hcservices/ ground that the property was sold to a bona fide purchaser

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for value without notice. The decree was confirmed in first

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appeal. In the further appeal before the Division Bench, a finding was rendered to the effect that the plaintiff has not come to the Court with clean hands. When the decree was taken up before the Supreme Court, it was found that false contentions were taken by the plaintiff in the suit. The Supreme Court was of the view that specific performance being an equitable relief, any party who comes to the Court with unclean hands should be denied the remedy. The relevant paragraph would read thus:

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“2. It is settled law that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.”

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In Gobind Ram v. Gian Chand, (2000) 7 SCC 548, the

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discretionary jurisdiction of specific performance was indicated by the Supreme Court thus:

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“7. It is the settled position of law that grant of a decree for specific

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performance of contract is not https://hcservices.ecourts.gov.in/hcservices/ automatic and is one of the discretions of the Court and the Court has to

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consider whether it will be fair, just and equitable. The Court is guided by principle of justice, equity and good conscience. As stated in P.V. Josephs Son Mathew the Court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered.”

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The Supreme Court in N.P. Thirugnanam v. R. Jagan

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Mohan Rao (Dr), (1995) 5 SCC 115 , indicated that it is open to the Court to infer from the facts and circumstances that the plaintiff was ready and willing to perform his part of the contract. The Supreme Court further said that the amount of consideration must of necessity be proved to be available.

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"5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act, 1963 (for short “the Act”). Under Section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Section 16( c ) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of

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the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. 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 the 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 of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract."

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In N.P.Thirugnanam cited supra the Supreme Court

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found that the appellant was dabbling in real estate transaction without means to purchase the land. The Supreme Court observed:

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“Section 16(c) of the Act envisages that plaintiff must plead and prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. 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 the 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 of

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consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the

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date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.”

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The Supreme Court in K. Narendra v. Riviera

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Apartments (p) Ltd. (1999) 5 SCC 77 observed that Doctrine of Comparative hardship has been statutorily recognised in India and that Section 20 of the Specific Relief Act is an indication.

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In Parakunnan Veetill Joseph's Son Mathew v.

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Nedumbara Kuruvila's Son (1987) Supp. SCC 340, the Supreme Court considered the scope and ambit of Section 20 of the Specific Relief Act and observed thus:

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"Section 20 of the Specific Relief Act 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. https://hcservices.ecourts.gov.in/hcservices/ The motive behind the litigation should

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also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff.

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The Supreme Court in Bal Krishna v. Bhagwan Das, (2008) 12 SCC 145 , indicated that if specific performance

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would give unfair advantage to the plaintiff, no decree should be given.

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"13. Section 16 of the Specific Relief Act, 1963 (hereinafter referred to as “the Act”) corresponds with Section 24 of the old Act of 1877 which lays down that the person seeking specific performance of the contract, must file a suit wherein he must allege and prove that he has performed or has been ready and willing to perform the essential terms of the contract, which are to be performed by him. The specific performance of the contract cannot be enforced in favour of the person who fails to aver and prove his readiness and willingness to perform essential terms of the contract. Explanation ( ii ) to clause ( c ) of Section 16 further makes it clear that the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction. The compliance with the requirement of Section 16( c ) is mandatory and in the

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absence of proof of the same that the plaintiff has been ready and willing to perform his part of the contract suit cannot succeed. The first requirement is that he must aver in plaint and thereafter prove those averments made in the plaint. The plaintiff’s readiness and willingness must be in accordance with the terms of the agreement. The readiness and willingness of the plaintiff to perform the essential part of the contract would be required to be demonstrated by him from the institution of the suit till it is culminated into decree of the court.

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14. It is also settled by various decisions of this Court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct

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of parties, and their respective interests under the contract. No specific performance of a contract,

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though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court’s discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void."

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Most recently in Shamsher Singh v. Rajinder Kumar

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(2014) 5 Scale 292, the Supreme Court while considering the discretionary remedy of specific performance in the light of Section 20 of the Specific Relief Act referred to the observation made in an earlier decision in A.C.Arulappan v.

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Ahalya Naik (2001) 6 SCC 6 00, which reads thus:

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"If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff.............. If it is inequitable to grant specific relief, then also the Court would desist from granting a decree to the plaintiff."

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The Supreme Court in Citadel Fine Pharmaceuticals

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v. Ramaniyam Real Estates (P) Ltd., (2011) 9 SCC 147 ,

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observed that the Court can take judicial notice of fact https://hcservices.ecourts.gov.in/hcservices/

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that prices of real estate are constantly escalating in the

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city of Chennai. The observation reads thus:

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"46. The instant case obviously relate to a contract in commercial transaction and the Court can take judicial notice of the fact that in the city of Chennai the price of real estate is constantly escalating and the clear intention of the parties, as it appears from the stipulations of the agreement, was to treat time as the essence of the contract."

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The Supreme Court in Citadel Fine Pharmaceuticals

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cited supra, found that even before filing the suit, the defendant returned the advance which was received by the plaintiff. Even then, the plaintiff made a claim for return of theadvance in the suit. This false statement, made the Supreme court to hold that the plaintiff has not come to the Court with clean hands.

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"57. There is another aspect of the matter also. In the instant case by asking for specific performance of the contract, the plaintiff purchaser is praying for a discretionary remedy. It is axiomatic that when a discretionary remedy is prayed for by a party, such party must come to court on proper disclosure of facts. The plaint which it filed before the court in such cases must state all the facts with sufficient candour and clarity. In the instant case https://hcservices.ecourts.gov.in/hcservices/ the plaintiff purchaser made an averment in the plaint that the defendant vendor

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be directed to return the advance amount of Rs 10,00,000 with interest at the rate of 24% from the date of payment of the said amount till the realisation and an alternative prayer to that effect was also made in the prayer clause ( c ).

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58. However, the fact remains that prior to the filing of the suit the defendant vendor returned the said amount of Rs 10,00,000 by its letter dated 4-91996 by an account payee cheque in favour of the plaintiff and the same was sent to the plaintiff under registered post which was refused by the plaintiff on 6-9-1996. The plaintiff suppressed this fact in the plaint and filed the suit on 9-9-1996 with a totally contrary representation before the court as if the amount had not been returned to it by the vendor. This is suppression of a material fact, and disentitles the plaintiff purchaser from getting any discretionary relief of specific performance by the court.

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61. Following the aforesaid tests, this Court is of the opinion that the suppression of the fact that the plaintiff refused to accept the cheque of Rs 10 lakhs sent to it by the defendant under registered post with acknowledgment due in terms of Clause 9 of the contract is a material fact. So on that ground the plaintiff purchaser is not entitled to any relief in its suit for specific

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performance."

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The plaintiff has also made a similar false

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representation by contending that he has paid Rs.5 Lakhs and balance is only a sum of Rs.2,95,00,000/-, knowing fully well that the cheque was not encashed by the defendant.

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Even according to the plaintiff, time was

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considered as the essence of contract. There are no documents before this Court to show that the plaintiff has kept the sale consideration ready with him while sending communications to the defendant to register the sale deed. He has not purchased the required stamp papers for preparation of sale deed. Even though the defendant is his immediate neighbour and she was available at her residence the plaintiff has chosen only to send letters with a view to create records.

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The suit being one for specific performance a

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question of substantial importance would arise as to whether the plaintiff has satisfied the requirement of Section 16 of the Specific Relief Act. This aspect was considered by the Supreme Court in Rajeshwari v. Puran

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Indoria, (2005) 7 SCC 60.

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"6. The right to specific performance of

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an agreement for sale of immovable

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property, when filed, raises questions of https://hcservices.ecourts.gov.in/hcservices/ substantial importance between the

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parties as to whether the plaintiff has satisfied the requirements of Section 16 of the Specific Relief Act, whether it is a case in which specific performance of the contract is enforceable in terms of Section 10, whether in terms of Section 20 of the Act, the discretion to decree specific performance should be exercised by the court and in some cases, whether the suit was barred by limitation and even if not, whether the plaintiff has been guilty of negligence or laches disentitling him to a decree for specific performance. These questions, by and large, may not be questions of law of general importance. But they cannot also be considered to be pure questions of fact based on an appreciation of the evidence in the case. They are questions which have to be adjudicated upon, in the context of the relevant provisions of the Specific Relief Act and the Limitation Act (if the question of limitation is involved)"

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It is trite that remedy of specific performance is purely an equitable remedy. The plaintiff in such a suit must come to the Court with clean hands. Entire facts of

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the case have to be pleaded without any kind of reservation. There should be no attempt on the part of the plaintiff to conceal or suppress material facts. Similarly, https://hcservices.ecourts.gov.in/hcservices/ there should not be any kind of attempt to mislead the

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Court. Whether it is favourable or unfavorable, the plaintiff must disclose the entire details of the transaction. The conduct of the plaintiff should be trustworthy. The course of conduct adopted by the plaintiff should be fair. Any suppression of material particulars would be treated as unfair, which would dis-entitle him from seeking the equitable remedy of specific performance.

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Since the remedy of specific performance is a discretionary remedy on equitable grounds, plaintiff has to

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produce materials with respect to his readiness and willingness at all point of time. The conduct of the plaintiff also assumes significance in a case of this nature. The Court was expected to weigh the materials produced by the plaintiff to come to a definite conclusion with regard to the readiness and willingness to perform the contractual obligation voluntarily undertaken by the plaintiff. Any action on the part of the plaintiff to take undue advantage of the situation would result in denial of the equitable remedy. In short, the conduct of the

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plaintiff throughout should be taken note of to decide the genuineness of the claim and his bonafides.

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Conclusion:

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