TMI Blog2013 (8) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule property. 3. Necessary facts and legal contentions urged on behalf of the parties are stated herein with a view to find out as to whether the impugned judgment and decree in granting the relief of specific performance of the sale of the suit schedule property in favour of the plaintiff requires to be set aside by allowing this appeal. In this judgment for the sake of brevity, we would like to refer to the ranking of the parties as assigned in the plaint presented before the trial court. Since there is incongruence in the mentioning of exhibits in the judgments of the trial court as well as of the High Court, we will refer to the documents as per the annexures presented along with this appeal. The plaintiff (respondent No.1 herein) instituted O.S. No. 2012/85 before the Additional Civil Judge for grant of a decree of specific performance in respect of suit schedule property on the basis of the Agreement of Sale dated 25.12.1983 (Annex.P-1) and also for grant of permanent injunction restraining the defendants from interfering with his peaceful possession and enjoyment of the suit schedule property. The suit property covered in the Agreement of Sale was a vacant site meas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract by paying the balance sale consideration on or before 18.03.1985 failing which legal action would follow, for which the plaintiff had issued a reply dated 16.03.1985 (Annex. P-3) calling upon the defendant Nos.1-4 to execute the conveyance deed and receive the balance sale consideration on 23.05.1985 by securing the draft sale deed five days prior thereto. By another letter dated 04.05.1985 (Annex. P-5) he requested the vendors to go to the sub-Registrar s office on 23.05.1985 and execute the deed of conveyance in his favour. He further pleaded in the plaint that the vendors by a telegram dated 18.05.1985 declined to accede to his request and stated that the Agreement of Sale was rescinded by the defendants by a letter dated 28.03.1985, which is a legal notice sent by them through their advocate to the plaintiff, wherein he was called upon to return the original documents of suit property given to him at the time of execution of the Agreement of Sale and on his failure to do so on or before 10.04.1985, the said agreement dated 25.12.1983 would stand terminated vide the aforesaid notice. 6. After institution of the original suit by the plaintiff for specific performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. P1- to P-27. On behalf of the defendants, the 5th defendant was examined as DW-1 and another witness named K.N.Prakash as DW-2 and marked 4 documents as Exhs.D-1 to D-4 to prove his case. The trial court on appreciation of the pleadings, documentary and oral evidence on record has recorded the findings of fact in the affirmative on the issue Nos. 1, 2 and 5 and answered issue No.3 partly in affirmative and issue Nos. 4 and 6 in the negative. The trial court in its judgment has recorded the finding of fact holding that 5th defendant is the owner of the suit property pursuant to sale deed dated 30.05.1985 and he is entitled to take possession of the same from the plaintiff in accordance with law and accordingly, partly decreed the suit in his favour vide judgment and decree dated 25.09.2000. 9. Aggrieved by the said judgment and decree, the plaintiff preferred Regular First Appeal before the High Court of Karnakata which was registered as RFA No. 97/2001, urging various legal contentions and prayed to set aside the same in so far as dismissal of the suit for grant of the decree for specific performance in respect of suit schedule property on the basis of sale deed is concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... schedule property in favour of the plaintiff. It is also urged in the R.F.A. before the High Court that defendant Nos. 1-4 were required to secure permission under the ULCR Act and Income Tax Department to convey the suit property in favour of the 5th defendant, which further demonstrates that without such a permission, the registration of deed of conveyance in favour of the 5th defendant was impermissible, thereby the defendant Nos. 1-4 committed a serious breach of the obligation in terms of Agreement of Sale dated 25.12.1983. It was further contended that the plaintiff was carrying cash with him to prove that he had necessary funds to pass on consideration to the defendant Nos.1-4 at the time of registration of the sale deed and the learned counsel has placed reliance on the reported decision of this Court in Sukhbir Singh Ors. Vs. Brij Pal Singh Ors. (1977) 2 SCC 200) It is further contended with reference to para 24 of the judgment of the trial court, that the trial court fell into error in recording the finding of fact on the contentious issue No.3 holding that the 5th defendant is the owner of the suit schedule property in pursuant to the sale deed dated 30.05.1985 alth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract as per Section 55 of the Contract Act as agreed upon by the parties in the agreement which has not been performed by the plaintiff and therefore the trial court has rightly declined to grant the decree of specific performance in favour of the plaintiff. 12. Therefore, the learned counsel on behalf of the 5th defendant placed reliance on the reported decisions of the Division Bench of the Karnataka High Court and this Court in the cases of Saraswathi Ammal Vs. V.C. Lingam(ILR 1993 KAR 427); Manjunath Anandappa Vs. Tammanasa(2003)10 SCC 390) and His Holyness Acharya Swamy Ganesh Dassji Vs. Shri Sita Ram Thapar(1996)4 SCC 526) , in justification of the findings and reasons recorded by the trial court on the contentious issues framed by it. 13. The first appellate court, on the basis of factual and rival legal contentions urged on behalf of the parties, has framed the following points for its determination: i) On issue No.3, whether the 5th defendant purchased the property under the sale deed dated 30.05.1985? ii) Whether the 5th defendant was entitled to take possession of the suit schedule property in accordance with law? iii) On issue Nos. 4 5 whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the amount payable under the contract in the manner provided in the contract in order to successfully claim the specific performance of the contract by placing reliance upon the judgment of this Court reported in International Contractors Ltd. Vs. Prasanta Kumar Sur (Deceased) Ors(1961 (3) SCR 579). wherein this Court has explained the above legal position. In another decision in A. Maria Angelena Vs. A.G. Balkis Bee(2002) 9 SCC 597), this Court has made observations with reference to the plea that for grant of a decree for specific performance would result in serious hardship to the vendor or the subsequent purchaser and that the plaintiff should be compensated in terms of money must be taken at the earliest stage. Further, the High Court with reference to the deed of conveyance in favour of the 5th defendant executed by defendant Nos. 1-4 raised the question as to whether the defendant No.5 was a bona fide purchaser for consideration without notice of the earlier Agreement of Sale in favour of the plaintiff is examined and answered against the 5th defendant. The defendant Nos. 1-4 have remained absent and unrepresented in the original suit proceedings, hence they were placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the suit schedule property without seeking the declaratory relief with respect to termination of the Agreement of Sale vide notice dated 28.3.1985, rescinding the contract, is maintainable in law? 2) Whether the reversal of the findings of the trial court on the issue Nos. 3, 4 and 5 by the High Court and answering the same in favour of the plaintiff in the impugned judgment and granting the decree for specific performance in favour of the plaintiff in respect of the schedule property is legal and valid? (3) Whether the grant of decree of specific performance in favour of the plaintiff despite Clause 12 of the Agreement of Sale dated 25.12.1983 is legal and valid? (4) Whether the grant of the decree is in conformity with sub-sections (1) and (2) of Section 20 of the Specific Relief Act and whether the learned Judge of the High Court has exercised his discretionary power reasonably in granting the same in favour of the plaintiff? 5) What decree or order to be passed? 17. Answer to Point No.1 The first point is answered in favour of the defendant No. 5 by assigning the following reasons: It is an undisputed fact that there is an Agreement of Sale executed by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal notice referred to supra, the Agreement of Sale was terminated as per notice dated 28.03.1985 and thus, there is termination of the Agreement of Sale between the plaintiff and defendant Nos. 1-4 w.e.f. 10.04.1985. As could be seen from the prayer sought for in the original suit, the plaintiff has not sought for declaratory relief to declare the termination of Agreement of Sale as bad in law. In the absence of such prayer by the plaintiff the original suit filed by him before the trial court for grant of decree for specific performance in respect of the suit schedule property on the basis of Agreement of Sale and consequential relief of decree for permanent injunction is not maintainable in law. Therefore, we have to hold that the relief sought for by the plaintiff for grant of decree for specific performance of execution of sale deed in respect of the suit schedule property in his favour on the basis of non existing Agreement of Sale is wholly unsustainable in law. Accordingly, the point No. 1 is answered in favour of the defendant No.5. 18. Answer to Point No. 2 Even if we assume that the Agreement of Sale dated 25.12.1983 is subsisting, we have to answer point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language. 20. Section 55 of the Contract Act which deals with the consequences of failure to perform an executory contract at or before the stipulated time provides by the first paragraph: When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract. It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time has not been made of the essence of the contract or, by reason of waiver, the time fixed has ceased to be applicable, the employer may by notice fix a reasonable time for the completion of the work and dismiss the contractor on a failure to complete by the date so fixed. It will be clear from the aforesaid statement of law that even where the parties have expressly provided that time of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental; for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract. 19. The legal principle laid down by this Court in the above case squarely applies to the facts of this case for the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rao Ors. (1995) 5 SCC 115) in support of the findings of the trial court on the above contentious issues wherein this Court has held that the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the original suit along with other attending circumstances and further the amount of consideration which he has to pay to the defendant Nos. 1-4 must be proved by the plaintiff. Further, the plaintiff is required to prove the fact that right from the date of execution of the Agreement of Sale till the date of passing the decree he must prove that he is ready and has always been willing to perform his part of the contract as per the agreement. Further, he rightly contended the same by placing reliance upon another judgment of this Court in the case of P.R.Deb Associates Vs. Sunanda Roy(1996) 4 SCC 423) wherein this Court held that the plaintiff in a suit for specific performance must be ready and willing to carry out his part of the agreement at all material times. 22. The correctness of the findings of fact recorded by the trial court on the contentious issue Nos. 4 5 is examined by us keeping in view the law laid down by this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w laid down in this regard by this Court which are referred to supra upon which the trial court has rightly relied upon and answered the contentious issues against him by recording valid and cogent reasons. In view of the foregoing reasons, we are of the view that the learned trial judge has applied his mind consciously and correctly to the admitted facts and on proper analysis and appreciation, he has correctly recorded the finding of fact holding that the plaintiff has failed to perform his part of the contract in paying the remaining sale consideration and made sincere efforts to get necessary permission from the Urban Land Ceiling Authority and the Income Tax Department by paying the conversion charges of the land to get the sale deed executed in his favour from the defendant Nos. 1-4 within the stipulated time of five months and further extended period of two months as per clause 6 of the agreement. The same has been erroneously set aside by the appellate court by recording its reasons by placing reliance upon the judgments of this Court in Nirmala Anand s case (supra), Jawahar Lal Wadhwa Vs. Haripada Chakroberty (1989) 1 SCC 76); and A.Maria Angelena s case (supra). 23. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the same in the above aspect. 27. Further, the High Court should have considered the relevant and important aspect of the case namely that the plaintiff is entitled to compensation as agreed upon by him under clause 12 of the Agreement of Sale which is in favour of defendant Nos. 1-4. It provides that the defendant Nos.1-4 have agreed that in the event of their failure to comply with the terms of the agreement they shall pay sum of ₹ 10,000/- to the plaintiff and also such sum which is spent by him towards conversion charges and building plan charges. Similarly, the plaintiff had agreed that in the event of his failure to comply with the terms of the agreement the defendant Nos. 1-4 are entitled to forfeit the advance amount. This important aspect of the terms of the Agreement of Sale has not been noticed by the learned Judge of the High Court while reversing the judgment and decree of the trial court and granted the decree for specific performance in favour of the plaintiff in exercise of his discretionary power under sub-sections (1) and (2) of Section 20 of the Specific Relief Act. Further, in view of the foregoing reasons and statutory provisions of Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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