Partly allowed

Sri Balakrishna Tiwari, v. P.Leelavathi

Telangana HC14 Nov 2014AS/77/1997

Case brief

AI extract

What is this about?

The High Court allowed the defendant's appeal against a decree for specific performance. The court held that the plaintiffs failed to prove readiness and willingness as they did not pay the balance consideration within the stipulated time and made false allegations. Specific performance was denied, but the defendant was directed to refund the advance payment.

What did the court decide?

Appeal allowed in part; judgment and decree of trial court set aside; defendant mandated to refund Rs.50,000/- advance within three months.

Sri Balakrishna Tiwari, Vs P.Leelavathi — Specific Performance | Telangana HC (2014)

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THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY

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APPEAL SUIT No. 77 of 1997

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JUDGMENT:

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The defendant in O.S.No.180 of 1989 on the file of the Subordinate Judge, Khammam, (hereinafter referred to as ‘the trial Court’) preferred this appeal against the judgment and decree dated 22.08.1996 passed by the trial Court. 2. The appellant was the defendant, and the respondents were the plaintiffs. For convenience, hereinafter they will be referred to as the defendant and the plaintiffs.

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3. The plaintiffs, being the legal heirs of the deceased Pasumarti Ranga Rao, filed the suit claiming relief of specific performance of the agreement of sale dated 21.11.1988; and, alternatively, for refund of advance of sale consideration of Rs.50,000/- with interest, alleging that Pasumarti Ranga Rao, husband of plaintiff No.1 and father of plaintiffs 2 to 5, purchased house property bearing municipal Door No.9-7-181, situated at Kasba Bazar, Khammam, which is more fully described in the schedule annexed to the plaint, under an agreement of sale dated 21.11.1988 for a total sale

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consideration of Rs.1,70,000/-, out of which the deceased Pasumarti Ranga Rao paid Rs.50,000/- to the defendant as advance on the date of execution of agreement itself while agreeing to pay the balance of sale consideration of Rs.1,20,000/- within one month from the date of agreement. The deceased Pasumarti Ranga Rao addressed a letter to the defendant during his life time requesting him to attend Registrar’s Office as he is ready with cash to get the property registered in his name, but the defendant never turned up on the date fixed in the letter and thereafter on 26.12.1988, the defendant addressed a letter to Pasumarti Ranga Rao with false allegations. Later on, Pasumarti Ranga Rao, while undergoing treatment at Madras, died due to kidney trouble.

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The plaintiffs got issued a legal notice dated 16.09.1989 through their advocate demanding the defendant to execute registered sale deed by receiving balance of sale consideration, but the defendant did not execute registered sale deed, but got issued a reply dated 22.09.1989 claiming interest on the balance of sale consideration for delayed payment. In fact, no interest was agreed to be paid as per the terms of agreement of sale between the defendant and the deceased Pasumarti Ranga Rao.

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The deceased Pasumarti Ranga Rao, during his

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life time, and after his death the plaintiffs, were always ready and willing to perform their part of obligation under agreement of sale by paying the balance of sale consideration and obtain sale deed, but the defendant did not come forward to execute registered sale deed. Hence, the suit.

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4. The defendant filed written statement contending that the defendant executed an agreement of sale for the schedule property on 21.11.1988 for a total consideration of Rs.1,70,000/-, and received Rs.50,000/- as advance of sale consideration from the deceased Pasumarti Ranga Rao and the balance of sale consideration has to be paid within one month from the date of agreement of sale. The defendant specifically contended that the deceased Pasumarti Ranga Rao was never ready and willing to perform his part of obligation under agreement of sale and, on one pretext or the other, tried his level best to postpone the payment of balance of sale consideration and postponed obtaining registered sale deed. The defendant sold the schedule property at a low price due to his dire need of money and fixed short time for payment of balance of sale consideration. The letter addressed by the deceased Pasumarti Ranga Rao to the defendant is without any intention to obtain the

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registered sale deed by paying the balance of sale consideration. Even after expressing readiness and willingness to execute the registered sale deed by the defendant on receipt of balance of sale consideration, in the reply notice the plaintiffs did not obtain the registered sale deed by paying the balance of sale consideration with interest and, on account of the delay in payment of balance of consideration, the defendant sustained loss to a tune of Rs.40,000/- and demanded for payment of interest at the rate of 24% by way of damages and finally agreed to execute the registered sale deed if interest at 24% is paid on the balance of sale consideration, but the plaintiffs did not express their readiness and willingness to perform their part of obligation under the agreement of sale and even they did not deposit the balance of sale consideration along with interest as claimed by the defendant in the trial Court and therefore the defendant is not under obligation to execute the registered sale deed and prayed to dismiss the suit with costs.

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5. Basing on the above pleadings, the trial Court framed the following issues:

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1. Whether the plaintiffs and Late Ranga Rao failed to perform their part of agreement?

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2. Whether the defendant is entitled for

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interest on the balance sale consideration as prayed for?

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3. Whether the plaintiffs are entitled for specific performance as prayed for?

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4. To what relief?

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6. During trial, on behalf of the plaintiffs, the 1^st plaintiff was examined as PW1, and got marked Exs.A1 to A5. On behalf of the defendant, the defendant himself was examined as DW1, and attestor of agreement of sale-Ex.A1 was examined as DW2. No documents were marked on behalf of the defendant.

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7. Upon hearing the argument of both the counsel, the trial Court decreed the suit granting the decree for specific performance and decided issue No.4 in favour of the plaintiffs. However, while answering issue No.2, the trial Court held that the defendant is entitled to interest at 6% as damages on the balance of sale consideration. Aggrieved by the judgment and decree under challenge, the defendant preferred this appeal raising various contentions.

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8. The main contentions of the defendant are as follows:

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(a) As the plaintiffs claimed equitable and

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discretionary relief of specific performance, they have to plead and prove their readiness and willingness throughout but they did not comply with Section 16(c) of the Specific Relief Act, thereby the plaintiffs are disentitled to claim the relief of specific performance, but the trial Court did not appreciate the terms and conditions of Ex.A1-agreement of sale, and the conduct of the deceased Pasumarti Ranga Rao during his life time, and after his death the conduct of the plaintiffs, in proper perspective. If the conduct of the deceased Pasumarti Ranga Rao and the plaintiffs, who are the legal heirs of the deceased, is considered in proper perspective, it is evident that they did not approach the Court with clean hands; on this ground alone, the suit is liable to be dismissed.

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(b) The trial Court did not consider the time fixed for payment of balance of sale consideration and when time is fixed for payment of balance of sale consideration, it can be inferred that time is essence of the contract, and the plaintiffs and their predecessor deceased Pasumarti Ranga

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Rao failed to comply with the terms of Ex.A1, hence the plaintiffs are disentitled to claim the equitable relief of specific performance, but the trial Court, on erroneous appreciation, concluded that the plaintiffs were ready and willing to perform their part of obligation under Ex.A1-agreement of sale, and committed an error.

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(c) Apart from the above contentions, it is contended that addressing the letter (marked as Ex.A2) and the issue of notice (marked as Ex.A4) would not serve any purpose and the letter and notice were issued only to procrastinate the payment of balance of sale consideration and if the total conduct of the plaintiffs is taken into consideration, they are disentitled to claim the relief of specific performance, but the trial Court, on an erroneous appreciation of fact and law, decreed the suit.

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(d) Though the trial Court concluded that the defendant is entitled to interest at 6% on the balance of sale consideration, the same is not reflected in the operative portion of the judgment in the finding arrived by the trial

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Court on Issue No.4. Thus, the operative portion of the judgment of the trial Court is not in consonance with its findings. Thus the trial Court committed grave error in decreeing the suit and hence prayed to set aside the impugned judgment and decree.

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9. Learned counsel for the defendant, during the course of argument, mainly contended that when the plaintiffs approached the Court claiming equitable relief of specific performance, it is for them to plead and prove their readiness and willingness throughout, in compliance of Section 16(c) of the Specific Relief Act, and failure to plead and prove their readiness and willingness disentitles them to claim the relief of Specific Performance; and that they must approach the Court with clean hands. He placed reliance on the following decisions of the Apex Court.

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(i) SARADAMANI KANDAPPAN v. S.

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RAJALAKSHMI AND OTHER S^[1] , (ii) HIS HOLINESS ACHARYA SWAMI GANESH DASSJI v. SHRI SITA RAM THAPA R^[2] , (iii) PEMMADA PRABHAKAR & ORS. V. YOUNGMEN’S VYSYA ASSOCIATION & ORS.^[3]

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10. None appeared for the plaintiffs/respondents, despite service of notice. 11. Considering the contentions of the counsel for the defendant/appellant, and perusing the judgment and decree of the trial Court and the oral and documentary evidence available on record, the points for consideration are as follows:

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(i) Whether the deceased Pasumarti Ranga Rao, during his life time, and after his death the plaintiffs, were ready and willing to perform their part of obligation under the agreement of sale-Ex.A1? If so, whether the plaintiffs are entitled for relief of specific performance of agreement of sale-Ex.A1?

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(ii) Whether the defendant is entitled to claim interest on the balance of sale consideration? If so, at what rate?

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12. Point No.(i)

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The undisputed facts are that the deceased Pasumarti Ranga Rao entered into an agreement of sale Ex.A1 dated 21.11.1988 with the defendant for purchase of the suit schedule property for a total consideration of Rs.1,70,000/-, and paid Rs.50,000/- as advance of sale consideration, while agreeing to pay the balance of sale consideration within one month from the date of Ex.A1. The defendant also admitted execution of Ex.A1, receipt of advance of sale consideration of

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Rs.50,000/- and the terms and conditions of Ex.A1. But the only defence putforth by the defendant is that, during the life time of Pasumarti Ranga Rao, he was not ready and willing to perform his part of obligation. At the same time, after the death of Pasumarti Ranga Rao, the plaintiffs who are the legal heirs of Pasumarti Ranga Rao, were not ready and willing to perform their part of obligation in compliance of Section 16(c) of the Specific Relief Act and therefore disentitled to claim the relief of specific performance. In view of the specific contentions, the trial Court concluded that Pasumarti Ranga Rao, during his life time, and after his death, the plaintiffs expressed their readiness and willingness to perform their part of obligation under Ex.A1, but found that the defendant is entitled to claim interest at 6% on account of the delay in payment of balance of sale consideration by the plaintiffs. However, the same was not incorporated in the operative portion of the judgment while answering Issue No.4.

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Before this Court, the conclusions arrived by the trial Court about the readiness and willingness of the plaintiffs in compliance of Section 16(c) is challenged. This Court, being the Court of first appeal, is under obligation to re-appraise the entire oral and documentary evidence to come to an independent

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conclusion, notwithstanding the findings of the trial Court, in view of the power conferred on this Court under Order 41 Rule 33 of Code of Civil Procedure. Therefore, I would re-appraise the entire oral and documentary evidence to come to an independent conclusion, uninfluenced by the findings recorded by the trial Court.

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When the suit is filed claiming relief of specific performance, it is the duty of the plaintiffs to plead and prove their readiness and willingness to perform their part of obligation in view of the personal bars contained under Section 16(c) of the Specific Relief Act.

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To substantiate the contention of the plaintiff that they were always ready and willing to perform their part of obligation under Ex.A1, the 1^st plaintiff who is the wife of the deceased Pasumarti Ranga Rao was examined as PW1. According to her examination-inchief, her husband was always ready and willing to perform his part of obligation under Ex.A1-agreement of sale, but the defendant himself postponed the registration. Her husband addressed a letter, marked as Ex.A2, to the defendant calling upon him to execute registered sale deed, for which the defendant addressed a reply, marked as Ex.A3. At this stage, it is relevant to advert to the contents of Exs.A2 and A3 to

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decide the actual readiness and willingness expressed by deceased Pasumarti Ranga Rao. In the office copy of the letter marked as Ex.A2, the said Pasumarti Ranga Rao called upon the defendant to attend the Registrar’s Office “today” as he is willing to pay the balance of sale consideration as agreed under Ex.A1agreement of sale. But Ex.A2 is undated and, admittedly, it was sent by post. Ex.A2 was replied by the defendant, which is marked as Ex.A3, which is unsigned. In Ex.A3, the defendant admitted about the execution of Ex.A1, receipt of advance of sale consideration and specifically contended that on 20.12.1982, Pasumarti Ranga Rao sought some more time to obtain the registered sale deed and immediately he complained to his uncle on 21.12.1988 and on 22^nd after receiving the letter, the said Pasumarti Ranga Rao was called upon to obtain the registered sale deed immediately; but Pasumarti Ranga Rao postponed the same on the pretext that the day was not auspicious to obtain registered sale deed. However, in the last paragraph of reply Ex.A3, the defendant demanded Pasumarti Ranga Rao to pay the balance of sale consideration on or before 30.12.1988 and obtain the registered sale deed. In first paragraph of Ex.A3, the defendant admitted that he received the letter Ex.A2 on

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22.12.1988 sent by Certificate of Post. Thus, it is clear from the allegations made in Ex.A3 that Pasumarti Ranga Rao addressed the letter before 22.12.1988; otherwise, the question of receiving the letter sent by Certificate of Post on 22.12.1988 by defendant does not arise. In fact, the agreement of sale was obtained on 21.11.1988 and balance of sale consideration is agreed to be paid on or before 21.12.1988, i.e. within one month from the date of Ex.A1. Conveniently, the purchaser Pasumarti Ranga Rao, without paying the balance of sale consideration as agreed, addressed letter-Ex.A2 calling upon the defendant to attend at Registrar’s Office on the same date of addressing the letter to receive the balance of sale consideration and execute registered sale deed. It appears from the letter-Ex.A2 that Pasumarti Ranga Rao is educated, and is aware that the letter sent by Certificate of Posting would reach on the next day or on the subsequent day; but calling upon the defendant to attend at Registrar’s Office on the day when the letter was addressed itself is ridiculous, since, it is impossible for the defendant to attend the Registrar’s Office on the day when the letter was addressed, sent by post. Thus, it appears from the contents of letter-Ex.A2 that Pasumarti Ranga Rao conveniently avoided to pay the balance of sale consideration as agreed under Ex.A1.

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Even otherwise, the defendant, under Ex.A3, called upon Pasumarti Ranga Rao to pay the balance of sale consideration on or before 30.12.1988 and obtain registered sale deed, but Pasumarti Ranga Rao conveniently avoided to pay the balance of sale consideration to obtain registered sale deed. The reason stated for non-compliance of demand under Ex.A3 is that Pasumarti Ranga Rao was shifted to Madras for treatment of his Kidney trouble and, while undergoing treatment at Madras, he died and therefore, he could not pay the balance of sale consideration. In the examination-in-chief, PW1 admitted that her husband fell ill and he was shifted to Madras for treatment and he died in the month of August, 1989. After the death of Pasumarti Ranga Rao, PW1 and her children got issued a legal notice dated 16.09.1989 demanding the defendant to execute registered sale deed by receiving the balance of sale consideration. Ex.A4 is the office copy of the legal notice dated 16.09.1989 got issued by the plaintiffs. In the crossexamination, PW1 admitted that her husband was always ready and willing to perform his part of obligation under Ex.A1, and that her husband has withdrawn the amount and kept in the house; but expressed her inability as to why she could not deposit the said

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amount into Court. At the end of the crossexamination, a suggestion was put to her that there was a proposal for payment of interest at 24% on the balance of sale consideration for delay in performing their part of obligation, but she denied the same. As per material available on record, Pasumarti Ranga Rao was shifted to Madras for treatment of his kidney trouble three months before his death.

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The defendant himself was examined as DW1. In his examination-in-chief, he admitted about execution of Ex.A1 and terms and conditions therein; however, disputed the contents of Ex.A2 while admitting receipt of the same on 22.12.1988, and issue of Ex.A3 demanding Pasumarti Ranga Rao to pay balance of sale consideration on or before 30.12.1988 to obtain registered sale deed, and later he received notice-Ex.A4 and reply by him under Ex.A5. In the cross examination, a suggestion was put to him that late Pasumarti Ranga Rao was always ready and willing to perform his part of obligation under Ex.A1 but the defendant was not willing to perform his part of obligation, but denied the same. It was elicited in the cross examination of PW4 that DW1 is not aware that late Pasumarti Ranga Rao was suffering from kidney trouble and that Ranga Rao went to Madras for

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treatment within one month from the date of execution of Ex.A1 and died. He admitted about issue of Ex.A5reply to Ex.A4-notice expressing readiness and willingness to execute registered sale deed on payment of interest on the balance of sale consideration. Thus, from the evidence of DW1, he is ready and willing to perform his part of obligation subject to payment of interest at 24% on the balance of sale consideration. The defendant also examined the attestor of Ex.A1, but his evidence is not useful either to prove the readiness and willingness pleaded by the plaintiffs or to disprove the same.

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On consideration of entire material on record, it is evident that Pasumarti Ranga Rao agreed to pay balance of sale consideration within one month from the date of execution of Ex.A1, which expired on 21.12.1988, and addressed a letter-Ex.A2 without paying the balance of sale consideration and it was received by the defendant on 22.12.1988; thereby, there was no possibility for the defendant to attend at the Registrar’s Office to receive the balance of sale consideration and to execute registered sale deed. The said conduct of Pasumarti Ranga Rao creates any amount of suspicion about his actual readiness and willingness. If really Ranga Rao was ready and willing

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to perform his part of obligation, nothing prevented him to address a letter or issue legal notice demanding the defendant to execute registered sale deed before the expiry of the time fixed in Ex.A1; but, conveniently Ranga Rao addressed a letter-Ex.A2 calling upon the defendant to attend at Registrar’s Office on the same date of addressing the letter which is impossible for any body. Apart from that, under Ex.A3 the defendant agreed to register the sale deed provided Pasumarti Ranga Rao pays balance of sale consideration on or before 30.12.1988. Even then, Pasumarti Ranga Rao did not pay the balance of sale consideration. On the other hand, the plaintiffs putforth a lame excuse for non-compliance of demand made by the defendant in Ex.A3 contending that Pasumarti Ranga Rao was shifted to Madras for treatment of kidney trouble and that he died while undergoing treatment. But PW1 admitted in her cross examination, at page No.3, made a clear admission about shifting of Ranga Rao to Madras, which is extracted below for better appreciation:

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“Since about three months since prior to death of my husband was taking treatment at Madras by visiting frequent visits.”

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In view of the evidentiary admission extracted

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above, the plea of the plaintiffs that Pasumarti Ranga Rao was shifted to Madras within one month from the date of agreement of sale-Ex.A1 is ex facie false; on the other hand, the evidence of PW1 is suffice to conclude that Pasumarti Ranga Rao was not shifted to Madras immediately after one month from the date of execution of Ex.A1, but he was visiting Madras frequently for treatment for the last three months prior to his death which took place in the month of August 1989. Hence, the excuse pleaded by the plaintiffs for non-compliance of demand made by Ex.A3 is ex-facie false. Hence, failure to pay balance of sale consideration as demanded in Ex.A3 on or before 30.12.1988 and making false allegations both in the plaint and in the evidence is sufficient to disbelieve readiness and willingness pleaded by the plaintiffs to perform their part of obligation under Ex.A1. Even after the death of Pasumarti Ranga Rao in the month of August 1989, the plaintiffs maintained silence, but issued legal notice Ex.A4 calling upon the defendant to receive balance of sale consideration; however the defendant issued reply dated 22.09.1989, marked as Ex.A5, complaining that Pasumarti Ranga Rao, during his life time, did not pay balance of sale consideration as demanded in Ex.A3 and in paragraph 9 of Ex.A5reply, the defendant demanded for payment of

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damages by way of interest, called upon the plaintiffs for payment of balance of sale consideration with interest to obtain registered sale deed. Instead of complying with the demand made by the defendant under Ex.A5 dated 22.09.1989, the defendants filed suit on 22.12.1989 i.e. after almost three months from the date of Ex.A5. When the defendant expressed his readiness and willingness to register sale deed on payment of balance of sale consideration, nothing prevented the plaintiffs to pay the balance of sale consideration to obtain registered sale deed. The explanation putforth by the plaintiffs for non-payment of balance of sale consideration as demanded under Ex.A5 is that no interest was agreed to be paid in Ex.A1. Undoubtedly, there is no clause for payment of interest in Ex.A1 on delayed payment; but on consideration of totality of circumstances, more particularly demand made in Ex.A3 and failure to pay balance of sale consideration thereafter clearly indicates that Pasumarti Ranga Rao or the plaintiffs are not ready and willing to perform their part of obligation. The trial Court, though considered all the documents, concluded that Pasumarti Ranga Rao himself expressed his readiness and willingness before the expiry of one month time stipulated in Ex.A1 for payment of balance

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of sale consideration and accepted the contention of plaintiffs. Even assuming, for a moment, that Pasumarti Ranga Rao expressed his readiness and willingness by issuing Ex.A2, nothing prevented him to pay balance of sale consideration atleast on or before 30.12.1988 as demanded in Ex.A3, since the contention that Pasumarti Ranga Rao was shifted to Madras for treatment of his kidney trouble is proved to be false in view of the admission by PW1 in her cross-examination extracted above. Hence non-payment of balance of sale consideration during the life time of Pasumarti Ranga Rao though he was visiting Madras frequently for his treatment for the last three months prior to his death is sufficient to conclude that Pasumarti Ranga Rao was not ready and willing to perform his part of obligation during his life time atleast before visiting Madras for his treatment for the last three months prior to August 1989. If the evidence on record is analysed critically, the trial Court ought not to have come to such a conclusion accepting readiness and willingness of the plaintiffs strictly adhering to Section 16(c) of the Specific Relief Act. Thus, the conclusion arrived at by the trial Court that the plaintiffs were ready and willing to perform their part of obligation during the life of Pasumarti Ranga Rao, the Vendee, under Ex.A1 or after the death of Pasumarti Ranga Rao is false on the

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face of record.

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Learned counsel for the defendant mainly contended that when one month time is fixed for payment of balance of sale consideration, it is obligatory on the part of Pasumarti Ranga Rao to pay balance of sale consideration within the time stipulated under Ex.A1 and non-payment of balance within the time stipulated amounts to breach of contract thereby the plaintiffs are disentitled to claim the equitable relief of specific performance. He placed reliance in SARADAMANI (1 supra) wherein the Apex Court held as follows:

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“The order of performance of reciprocal promises does not depend upon the order in which the terms of the agreement are reduced into writing. The order of performance should be expressly stated or provided, that is, the agreement should say only after performance of obligations of vendors, the purchaser will have to perform her obligations. In the present case the agreement of sale expressly provided that the purchaser shall pay the balance sale consideration within time schedule as specified. The payment of sale price was delinked from execution of sale deed. The purchaser had to fulfill her obligation in regard to payment of price and thereafter vendors were required to perform their reciprocal promise of executing the sale deed, whenever required by the purchaser. The agreement provided specifically that having paid the balance price, if the purchaser is not satisfied about the title and on being intimated about the same if the vendors fail to satisfy the purchaser about their title, all amounts paid towards the price should be refunded to purchaser. This clearly demonstrates that the payment of balance of sale price in terms of the contract was not postponed nor made conditional upon the purchaser being satisfied about the title, but that payment of the balance price should be made

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to the vendors as agreed unconditionally. In such circumstances the plea of purchaser that since clause providing that execution of the sale deed shall depend upon the purchaser getting satisfied regarding title to the lands and that properly is not subject of any encumbrance; precedes clause requiring payment of balance consideration in three installments, the satisfaction of the purchaser in regard to the vendor's title to the land and encumbrance , was a condition precedent for payment of the balance consideration cannot be accepted. Since section 52 cannot come in aid of purchaser to save his non-payment of balance consideration within time fixed when time was essence of contract. Therefore, the failure of the appellant purchaser to pay the balance sale consideration within time fixed, clearly amounted to breach of contract. As the time for payment was, the essence of the contract, the respondents were justified in determining the agreement of sale. The rejection of the prayer for specific performance was, therefore, proper. “

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In another judgment of the Apex Court reported in CHAND RANI (DEAD) BY L.RS. VS. KAMAL RANI (DEAD) BY L.RS.^[4] the Constitutional Bench of the

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Hon’ble Apex Court held as follows:

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“In case of immovable property, there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the court may infer that it is to be performed in a reasonable time if the conditions are [1] from the express terms of the contract [2] from the nature of property and [3] from the surrounding circumstances.”

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In the judgment reported in K.S. VIDYANADHAM

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AND OTHERS VS. VAIRAVA N^[5] , the Apex Court held

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as follows:

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“Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at

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all the surrounding circumstances including the express terms of the contract and the nature of the property.”

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The principle laid down in SARADAMANI (1 supra) is only obitar dicta, but not ratio. Therefore, the principle laid down in the above decision is not strictly applicable. In CHAND RANI (4 supra), the Constitutional Bench of the Apex Court held that time cannot be held as essence of the contract. However, in SARADAMANI (1 supra) when order of performance is fixed, it is the duty of the parties to perform their obligation under the agreement in the order specified in the agreement in view of Section 55 of Indian Contract Act. So, payment of balance of sale consideration is not linked with execution of registered sale deed for the reason that the purchaser Pasumarti Ranga Rao has to get the property measured at his own expenses in terms of Ex.A1 before obtaining registered sale deed. Hence, payment of balance of sale consideration is a pre-condition to get the land measured and to obtain registered sale deed within one month from the date of Ex.A1. After receipt of Ex.A3, Pasumarti Ranga Rao did not comply with the demand. Hence, the conduct of the plaintiffs and Pasumarti Ranga Rao clearly shows that they avoided to pay balance of sale consideration to obtain registered sale deed by setting up a lame

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excuse for their failure to perform their obligation.

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While determining the readiness and willingness in compliance of Section 16(c) of the Specific Relief Act, the Court shall take into consideration the conduct of the parties as held by the Apex Court in G.JAYASHREE

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AND OTHERS VS. BHAGWANDAS S.PATEL AND OTHER S^[6] , as follows:

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“When the plaintiff did not choose to file a suit for specific performance of contract at first instance speaks volumes about his conduct. However civil Courts, in matter of enforcement of an agreement to sell, exercise a discretionary jurisdiction. A plaintiff was expected to approach Court with clean hands and his conduct plays an importunate role in matter of exercise of discretionary jurisdiction by a court of law. He has to approach the court within reasonable time.”

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In another judgment reported in LOURDU MARI DAVID AND ORS. VS. LOUIS CHINNAYA AROGIASWAMY AND ORS.^[7] , the Apex Court held as follows:

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“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 ACHARYA SWAMI GANESH DASSJI (2 supra), the Apex Court held that the essential term of the contract is executing the sale deed within the stipulated period. When the essential term stipulated in the contract is not complied within the stipulated time,

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then the plaintiff is not entitled to claim the relief of specific performance.

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In view of the principles laid down in the above judgments for deciding the readiness and willingness in suit for specific performance, the Court has to take into consideration the conduct of the parties through out. If that is so, Pasumarti Ranga Rao did not comply with the legitimate demand made by the defendant in Ex.A3 to obtain the registered sale deed and no reasonable explanation was offered for non-payment of balance of sale consideration. On the other hand, the plaintiffs made false allegations that Pasumarti Ranga Rao was shifted to Madras for treatment immediately after one month from the date of execution of Ex.A1. In view of the false allegation made by the plaintiffs, it is difficult to conclude that the plaintiffs approached the Court with clean hands. In view of the principle laid down in LOURDU MARI (7 supra), the plaintiffs are not entitled for relief of specific performance.

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Relief of specific performance is purely discretionary under Section 20 of Specific Relief Act and it cannot be granted merely because it is lawful to do so as held by the Apex Court in NIRMALA ANAND VS. ADVENT CORPORATION (P) LTD. AND ORS.^[8] ,

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wherein it was ruled in para 6 as follows:

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“It is true that grant of decree of specific performance lies in the discretion of the Court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the Court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance.”

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The counsel for the defendant, while contending that when the plaintiffs committed breach of essential terms of the Contract, they are not entitled to claim relief of specific performance, placed reliance in the judgment of the Apex Court reported in PEMMADA (3 supra), wherein the Apex Court held as follows:

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“It is an undisputed fact that the plaintiffs have not approached the Trial Court with clean hands. It is evident from the pleadings of the Agreement of Sale which is produced for the decree for specific performance of Agreement of Sale as the plaintiffs did not obtain the signatures of all the co-sharers of the property namely, the mother of the defendants, the third brother and 3 sisters. Therefore, the agreement is not enforceable in law as the persons who have executed the sale deed, did nto have the absolute title of the property. Apart from the said legal lacuna, the terms and conditions of the Agreement of Sale for payment of sale consideration agreed to be paid by the first plaintiff in instalments within the period stipulated as indicated above were not paid. The First Appellate Court and the High Court have not exercised their power under Section 20(2) of the Specific Relief Act which by itself is the substantial question of law which fell for consideration before the High Court as the First Appellate Court failed to consider this important aspect of the matter and exercised its power while determining the rights of the party, particularly, in the light of the unenforceable contract between the plaintiffs against the defendants as all of them are not parties to the Agreement of Sale document (Ex.A1) and the executants viz., defendant Nos. 1 and 2 have not acquired absolute title to the property in question. Therefore, the impugned judgment is vitiated and liable to be set aside.”

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In view of the principles laid down in the above referred judgments, when time is fixed for payment of balance within specified date, and failure to comply with such condition disentitles the plaintiffs to claim equitable relief of specific performance. The same principle is applicable to the facts and circumstances of the present case, but the trial Court did not appreciate the contentions in proper perspective.

¶82

By exercising power conferred on this Court under Order XVI Rule 33 and after discerning the entire material available on record, I find that Pasumarti Ranga Rao, during his life time, and plaintiffs, after death of Pasumarti Ranga Rao, committed breach of essential terms of agreement i.e. non-payment of balance of sale consideration within the stipulated time or as demanded by the defendant in Ex.A3. Consequently, the plaintiffs are not entitled to claim relief of specific performance which is purely discretionary under Section 20 of the Specific Relief Act.

¶83

On close analysis of entire material on record, I find that the plaintiffs miserably failed to establish readiness and willingness of Pasumarti Ranga Rao, and after death of Pasumarti Ranga Rao, their readiness and willingness in compliance of Section 16(c) of the

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Specific Relief Act, which disentitles them to claim equitable relief of specific performance. On the other hand, the plaintiffs did not approach the Court with clean hands for equitable relief of specific performance. They took false plea that Pasumarti Ranga Rao was shifted to Madras for kidney trouble immediately one month after execution of Ex.A1 which is proved to be false in view of the clear evidentiary admission of PW1 in her cross examination extracted above. Hence, by applying principles laid down in the above judgments, taking into consideration the conduct of plaintiffs and Pasumarti Ranga Rao during his life time, I find that the plaintiffs are disentitled to claim relief of specific performance, but the trial Court on improper appreciation of evidence granted the decree which deserves to be set aside. Accordingly, the point is held in favour of the defendant/appellant and against the plaintiffs/respondents.

¶85

13. Point No.(ii)

¶86

In view of my finding on Point No.(i), it is wholly unnecessary to record any finding about the entitlement of defendant to claim interest on the balance of sale consideration. Therefore, no finding is recorded.

¶87

14. In view of my finding on Point No.(i), the plaintiffs are disentitled for primary relief of specific performance of agreement of sale, but entitled to recover the advance of sale consideration which is an alternative relief claimed in the plaint. According to Section 22 of the Specific Relief Act, if the Court finds that the plaintiffs are not entitled to claim the primary relief of specific performance, the Court may grant alternative relief of refund of advance of sale consideration or earnest money, if claimed. Here, undisputedly, the defendant received Rs.50,000/- as advance of sale consideration and he is liable to refund the same. Hence, the defendant is directed to refund the advance of sale consideration of Rs.50,000/- within three months from the date of judgment. In case the defendant fails to refund the advance of sale consideration of Rs.50,000/- to the plaintiffs within the aforesaid period, the plaintiffs are at liberty to recover the same through the process of Court.

¶88

15. In the result, the appeal is allowed-in-part, setting aside the judgment and decree of the trial Court, while granting the alternative relief of refund of advance of sale consideration of Rs.50,000/directing the defendant to refund the same within a period of three months from the date of judgment. No costs.

¶89

Miscellaneous petitions, if any pending in this appeal suit, shall stand closed.

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__________________________________ JUSTICE M.SATYANARAYANA MURTHY

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14^th November, 2014

¶92

KSM

¶93

[1] 2011 (5) ALD 100 (SC) [2] AIR 1996 SUPREME COURT 2095

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[3] 2014 (9) SCALE [4] AIR 1993 SC 1742