TMI Blog2008 (12) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... y fact that the parties proceeded on the basis that all the lands would be developed together and steps having been taken in this behalf; it was too late for G. Srinivas Reddy to raise a fresh demand. The ld trial judge applied the principle of novation of contract having regard to the subsequent conduct of the parties. The said principle, in our opinion, is applicable as against the said G. Srinivas Reddy. The agreement in question is not an agreement for sale simplicitor. The parties thereto were aware that only for the purpose of development of the said plot the agreement had been entered into. If that be so, the vendors were right in enforcing the terms of the said agreement/contract keeping in view the aforementioned purpose in mind. The joint promisee might not have rescinded the contract prior to the filing of the suit for damages against the defendants 1 to 3 but then when he filed the suit claiming refund of the amount of advance which he had paid by way of his share as also the damages, the contract stood rescinded so far as he was concerned. His claim might have been based on the purported breach of the terms of the contract on part of defendants No. 1 to 3, but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew look is required to be given and the rigour of the rule is required to be relaxed by courts as regards the principle that time is not of the essence of the contract in case of immovable properties as when the said principle was evolved the prices and values were stable and inflation was unknown. We think, it is not a case where we should exercise our discretionary jurisdiction under Article 136 of the Constitution of India. We refuse to interfere with the discretionary jurisdiction exercised by the High Court particularly when the ld trial court had not adverted to this aspect of the matter at all. The appeals are dismissed with costs. - S.B. SINHA AND CYRIAC JOSEPH JJ. JUDGMENT S.B. SINHA, J. 1. Plaintiffs in a suit for grant of decree for specific performance of contract are before us aggrieved by and dissatisfied with the judgment and decree dated 13.11.2007 passed by a Division Bench of the Andhra Pradesh High Court reversing a judgment and decree dated 25.10.1995 of the Additional Subordinate Judge, Ranga Reddy district at Saroornagar, Hyderabad in Original Suit No. 191 of 1987 dismissing the said suit. 2. The basic facts of the matter are not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endors effect sale of that particular plot. 3. Indisputably, besides the above agreement of sale, the said two vendees had also entered into an Agreement of sale with one S. Yadagiri, his sons and some others for sale of land measuring 90 Acres in Survey No. 643 to 658, which is adjacent to the land of the respondents. 4. Pursuant to or in furtherance of the said agreements of sale, the said vendees had applied for a joint layout for the entire land of 101.39 acres and a sum of ₹ 1,54,725/- was paid by the said vendees towards layout permit fee and developmental charges vide undated receipt. The relevant portion of the said receipt reads as under: It is not part of sale consideration, for any reason, the amount is refunded, the same should be returned without any delay to the PURCHASERS. The Agreement period will be 8 MONTHS after the release of TENTATIVE LAYOUT from HUDA for SURVEY No. 36 of SATMRAI Village and for SURVEY NUMBERS 645, 647, 653, 654, 655/1, 657, 658, 666/2 and PART SURVEY NUMBERS 644, 646, 651, 655 is 15 MONTHS after the release of TENTATIVE LAYOUT from HUDA. After the above period for the unpaid balance of sale consideration the Bank interest will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale consideration in installments to my clients and ultimately you will be failing in completing the sale transaction within the time scheduled if you do not commence and complete the road formation work as per the approved draft layout plan within the time fixed by HUDA. 10. My Clients state that they are in no way concerned with your inter se mis-understandings and disputes. My clients are only interested in completing the sale transaction of the land covered by Contract of sale within the time fixed in the contract of sale. 8. The vendees responded to the said notice stating that the joint layout had resulted in much inconvenience to develop the portion of the land belonging to the owners as it was one of the conditions of the tentative layout that unless entire land was developed, the final layout would not be released. Under these circumstances, it was furthermore contended that the only alternative left was that the owners had to take a separate layout for their lands. It was stated that the vendees `were ready and prepared to develop the said land immediately as and when the owners obtain a separate layout for the land held by them'. 9. Indisputably, Mohamme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein also have made their appearance in the said suit. 10. Under these circumstances, it is submitted that this defendant is ready and willing to perform his obligations under the agreement of sale at all times, and for the reasons not known to this defendant the plaintiffs are avoiding purposely to secure separate layout in respect of the land and thereby causing hurdles for proceedings with the sale transaction. The said suit was, however, dismissed for default. 13. Indisputably, O.S. No. 171 of 1986 filed by G. Srinivas Reddy on the file of the Munsif Magistrate, West and South, Ranga Reddy, for grant of mandatory injunction was transferred to the Court of Additional Subordinate Judge, Ranga Reddy district at Saroornagar and was renumbered as O.S. No. 21 of 1993. 14. G. Srinivas Reddy, thereafter filed another suit for specific performance of the agreement of sale bearing O.S. No. 191 of 1987 in the Court of Additional Subordinate Judge Ranga Reddy district at Saroornagar through his constituted attorney. Issues were framed in both the suits separately. Issue No. 2 framed in O.S. No. 21 of 1993 reads as under: Whether the Defendants 1 to 3 are liable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the date of grant of approval for tentative layout plan, the learned trial judge held that there was not much delay in filing the suit for enforcement of the agreement on the part of the plaintiff and he had all along been ready and willing to perform his part of the contract. The learned judge, furthermore, opined that a suit for specific performance of contract at the instance of the plaintiff alone was maintainable although Mohammed Kasim Ali was not to be a party to the deed of sale. The High Court, on the other hand, reversed the said findings of the learned trial judge holding that: (1) in terms of clause 3 of the agreement, it was for the vendees to obtain the tentative layout plan; (2) in view of the stand taken by Mohammed Kasim Ali resulting in entering into a compromise between him and the owners of the land, the contract was not kept alive and in view of the fact that the suit was instituted by the joint purchaser, the plaintiff could not enforce agreement of sale against the wish of the joint purchaser; and (3) the suit for specific performance of the contract having been filed five days before expiry of three years from the date of expiry of contract was a cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be developed together and permission for common layout should be obtained from the competent authority therefor. Applications for grant of layout could have been filed only by the owners. In terms of the agreement, however, it was for the vendees to obtain the same. Concededly, defendants 1 to 3 signed all papers in relation thereto. They had no doubt received a sum of ₹ 1,54,725/- from the vendees on that account, but it has not been disputed that they deposited the amount with the competent authority of HUDA for obtaining the said layout plan. In fact, the combined proposal was placed before the said authority which was granted as would appear from its letter dated 26.4.1985 addressed to Shri S. Yadagiri. The said sanction was granted subject to certain conditions, one of them being that a road was to be formed as per the specifications. 20. Indisputably, at least for a period of three months no decision was taken. There is also nothing on record to show that any decision was taken prior to or immediately after the receipt of the said letter dated 26.4.1985; appellants contended that a proposal for a draft layout should be filed with the authority only in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the filing of the suit for damages against the defendants 1 to 3 but then when he filed the suit claiming refund of the amount of advance which he had paid by way of his share as also the damages, the contract stood rescinded so far as he was concerned. His claim might have been based on the purported breach of the terms of the contract on part of defendants No. 1 to 3, but they had arrived at a compromise. True it is that G. Srinivas Reddy filed a written statement in the suit filed by the Mohammed Kasim Ali. He expressed his intention to pay the amount of consideration for the entire land but evidently the suit did not go to trial. He did not insist therefor. When an application for settlement arrived at between Mohammed Kasim Ali and the defendant Nos.1 to 3 was filed, he did not object thereto. As he had appeared even before the High Court through counsel, it was obligatory on his part to oppose the said compromise between the vendors and his co-vendee. 26. Mr. Nariman may be right that a suit for enforcement of a contract on the part of the joint promisee is maintainable. Reliance has been placed by Mr. Nariman on a decision of Jagdeo Singh ors. v. Bisambhar ors. [AIR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance has also been placed by Mr. Nariman on Jahar Roy (Dead through L.Rs.) Anr. v. Premji Bhimji Mansata Anr. [(1978) 1 SCR 770] wherein, in terms of the agreement, defendants were to be entitled to all box-office collections, but they were to contribute a sum of ₹ 5275/- every month towards the expenses and was also to pay the same within the time prescribed. This Court, having regard to the provisions contained in Section 45 of the Indian Contract Act, held as under: The section thus deals with devolution of joint rights in the case of joint promises, but it does not deal with a case where, a joint promise, does not want to joint as a co-plaintiff and is arrayed as a proforma-defendant with the specific plea that no relief is claimed against him. The judgment and the decree in this case have in fact enured to his benefit also. 28. This Court, furthermore, while opining that a person cannot be compelled to be a plaintiff, for as is obvious, he cannot be compelled to bring an action at law if he does not want to do so, held: At the same time, it is equally true that a person cannot be prevented from bringing an action, by any rule of law or practice, mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween them and it is not open to the first defendant to plead that the second and third defendant's right should be separated from that of the plaintiffs. (Emphasis supplied) 30. We would proceed on the basis that the ratio has correctly been laid down in the aforementioned decisions. The question, however is, is it applicable to the fact of the present case? The answer thereto must, in our opinion, be rendered in the negative. Keeping in view the consent decree passed by a competent court of law in terms of consent entered into by and between Mohd. Kasim Ali and defendants 1 and 3, the agreement of sale in the same form could not have been enforced. The matter might have been different had the compromise not been recorded. A part of the contract stood rescinded; it has been worked out. We, however, must place on record that the terms of the compromise are not placed before us. Presumably, that proportionate amount of advance taken must have been refunded; some damages also must have been paid. G. Srinivas Reddy not being a party thereto may not be bound thereby but at least being a party to the suit he, keeping in view the interest he had in the matter, should hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as nonexistent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribes certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit (s) cannot be ignored altogether on the ground that time has not been made the essence of the contract [relating to immovable properties]. This court therein noticed the decision rendered in Mademsetty Satyanarayana v. G. Yellogi Rao [(1965) 2 SCR 221] where Subba Rao, J. (As His Lordship then was) made a distinction between Indian law and the English law on the subject to hold that some delay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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