A reference to Section 22 of the old Act, (the corresponding provision is Section 20 of the Act of 1963), would show that the jurisdiction of the Court to decree specific relief is discretionary and must be exercised on sound and reasonable grounds "guided by judicial principles and capable of correction by a Court of appeal". This jurisdiction cannot be curtailed or taken away by merely fixing a sum even as liquidated damages. We think that this is made perfectly clear by the provisions of Section 20 of the old Act (corresponding to Section 23 of the Act of 1963) so that the Courts has to determine, on the facts and circumstances of each case before it. Whether specific performance of a contract to convey a property ought to be granted.
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Karnataka High Court
N. Venkatappa vs Lingappa Reddy (Deceased) By L.Rs on 9 February, 1998
Equivalent citations: AIR 1998 Kant 372, ILR 1998 KAR 2730
Bench: H N Tilhari
1. This is defendant's appeal against the judgment and decree dated 14th June, 1988, delivered by Smt. Manjula Chellur, XI Additional City Civil Judge, Bangalore in Original Suit No. 3005 of 1983, A. Lingappa Reddy v N. Venkateshappa, decreeing the plaintiff's suit for specific performance of contract to execute the sale deed and directing the defendant-appellant to execute the sale deed in respect of Sy. No. 71, measuring 0.10 guntas and 0.25 guntas of land in Sy. No. 74/1B, after having received the balance consideration of Rs. 78,000/-. It further directed if the sale deed is not executed as directed, the plaintiff shall be at liberty to deposit the balance consideration of Rs. 78,000/- in Court and get the sale deed registered in his name, through a Commissioner to be appointed by the Court. The Trial Court further directed the defendant and restrained him permanently from interfering with the peaceful possession and enjoyment of the aforesaid land that is Sy. No. 71 measuring 0.10 guntas and Sy. No. 74/1-B, measuring 25 guntas. The defendant-appellant has challenged the entire decree.
2. The facts of the case in the nut-shell are that the plaintiff-respondent filed the above mentioned Suit No. 3005 of 1983, for the decree for injunction restraining the defendant from interfering with the plaintiff's possession over the suit property, as well as for grant of decree directing the defendant-appellant to execute a registered sale deed in favour of the plaintiff or his nominee or nominees, or in default by him for execution of deed by the Court on his behalf conveying or transferring the suit schedule property in terms of the agreement of sale dated 14-2-1983, after receiving the balance of the sale consideration. Plaintiff had also prayed for the decree of injunction as mentioned earlier. The relief for specific performance of the contract was added by amendment of the plaint. The property in the schedule mentioned consists of an area of 10 guntas of Sy. No. 71 and another area of five and half guntas of aforesaid Sy. No. 71 and 0.25 guntas of Sy. No. 74/1-B, the boundaries of which have been specifically given in the schedule to the plaint and which land is situate in Kowdenahally, K.R. Puram Hobli, Bangalore South Taluk. Plaintiff's case is that defendant had agreed, as per agreement dated 14-2-1983, to sell the land, extent of which and the survey numbers of which have earlier been mentioned, in the body of this judgment, for a sale consideration of Rs. 1,60,000/-. The defendant according to the plaintiff's case, in terms of agreement dated 14-2-1983, had received an advance of Rs. 50,000/- from the plaintiff, towards the sale consideration. Plaintiff's case is that under the agreement, plaintiff had agreed to pay a sum of Rs. 10,000/- by way of further advance towards the balance of consideration on or before 16-3-1983 and on such payment being made, the defendant had agreed to deliver the possession of the suit property to the plaintiff and to put the plaintiff in possession thereof, to enable the plaintiff to form a layout of sites. Plaintiffs case is that a sum of Rs. 10,000/- was paid by the plaintiff to the defendant and the defendant received that sum of Rs. 10,000/- on 17-6-1983. Plaintiffs further case is towards the remaining amount of Rs. 1,00,000/-, plaintiff was required to pay a sum of Rs. 50,000/- on or before 16-6-1983, and the remaining balance was to be paid on or before 16-12-1983. The plaintiff was given liberty to form the roads and layout of sites etc., and plaintiff was also given liberty to sell such sites. Plaintiffs further case is that the defendant had delivered the possession as well as some of the documents of title, and the remaining documents of the title were still to be delivered besides the defendant had to comply with such other formalities regarding the sale and registration of documents under law. Plaintiff has averred that as agreed plaintiff was always ready to pay to the defendant, the amounts of balance of consideration, but defendant did not turn up to collect the amounts from the plaintiff intentionally with ulterior motives and the plaintiff himself wrote a letter dated 19-7-1983 to the defendant, asking him to collect a sum. of Rs. 50,000/- towards balance of sale consideration and the said letter was sent by registered post-A/D i.e., with acknowledgment due and was duly served. Plaintiff has further averred that the stipulated time both under the agreement of sale or under law has not yet expired and the agreement of sale had been still in force. But defendant got issued a notice on 14-9-1983, which
was untenable and the same has been replied. Plaintiff claims to be in possession of the land under the agreement, in part performance of the contract and he has stated that he spent the amount in forming the layout. Plaintiff in Paragraph 11 stated that defendant has made attempts to interfere with the plaintiffs possession and to demolish the roads formed and to remove the stones put up by the plaintiff etc. and stated if the defendant is allowed to interfere in the manner he likes, the plaintiff will be put to irreparable loss and injury. Plaintiff asserted that he is and always been ready and willing to pay the balance of sale consideration of Rs. 78,000/- with regard to 0.25 guntas of land in Sy. No. 74/1-B and 0.10 guntas of land of Sy. No. 71, deducting Rs. 22,000/-out of the total balance of sale consideration of Rs. 1,00,000/-, with regard to five and half guntas of land in Sy. No. 71 as the same does not stand in the name of the defendant. Plaintiff submitted that on payment of Rs. 78,000/-, the plaintiff is entitled to obtain the registered sale deed. He asserted the cause of action to have accrued on 17-6-1983, as well as on 1-10-1983, when according to the plaintiff, defendant refused to execute the sale deed in favour of the plaintiff.
3. Written statement and additional written statements were filed by the defendant. According to the defendant, agreement dated 14-2-1983 is an admitted fact; that defendant agreed to sell the land to the plaintiff for a sum of Rs. 1,60,000/-. It has also been admitted that defendant received Rs. 60,000/- as advance under the said agreement. Defendant has also agreed that a sum of Rs. 50,000/- had to be paid on 16-3-1983 and that under the agreement, the defendant had to put the plaintiff in possession of the property in question. The defendant's case is that plaintiff failed to make payment, after repeated requests, even on 16-6-1983, plaintiff forced the defendant to accept Rs. 10,000/- with promise to pay a further advance of Rs. 50,000/- on 18-7-1983, as there was delay in payment of Rs. 10,000/-. It was also agreed between the parties that possession of property in question will be given to the plaintiff only on payment of subsequent advance of Rs. 50,000/-, which was already due to be paid by that time, as per the agreement. But on 16-6-1983 plaintiff took another one month's time and it was agreed that he will pay Rs. 50,000/- on 18-7-1983. Defendant asserted that he had never handed over possession of the suit property to the plaintiff. Defendant had pleaded that the plaintiff has failed to comply with the terms of the contract as well as the undertaking as given, so legal notice was issued to rescind the agreement forfeiting the advance in terms and conditions contained in the said agreement and as such, defendant's case is that plaintiff is not entitled to file the suit as well as he is not entitled to get the decree. Defendant admitted that he had delivered some of the documents of title to the plaintiff at the time of executing the agreement to sale and the documents were given bona fide and that the plaintiff is bound to return the said title deeds to the defendant. Defendant's case is that the plaintiff instead of paying the said sum of Rs. 50,000/- on 18-7-1983, as undertaken by him, again took time for one more month. Even then the defendant obliged to wait for one more month as requested, but the plaintiff never cared to comply with his promises. In
these circumstances, the defendant after having failed in his efforts to make the plaintiff to comply with the terms undertaken, defendant issued notice dated 12-9-1983, rescinding the contract of sale and forfeiting the advance. The defendant's case is that agreement is not now in force nor is it enforceable and suit is liable to be dismissed. In additional written statement, defendant denied plaintiffs allegation that he is and has always been ready and willing to perform his part of the contract, that he is willing to pay the balance of sale consideration. He stated that plaintiff has never come forward to pay the balance of sale consideration. It is admitted by the defendant in para 1 of the additional written statement that five and half guntas in Sy. No. 71, does not stand in the name of defendant and plaintiff had agreed to purchase the same along with other lands, hence he is not entitled to deduct Rs. 22,000/- from the balance of sale consideration. Defendant's case is that plaintiff did not come forward to pay the balance of sale consideration, the question of executing registered sale deed does not arise.
4. On the basis of the pleadings of the parties, the Trial Court framed
the following issues.-
1.Whether the plaintiff proves that he was put in possession of the property in pursuance of agreement of sale and as such he is in lawful possession of the suit property?
2.Does he further prove that the defendants is obstructing his possession?
3.Is the plaintiff entitled for injunction sought for?
4.What order? What decree?
Additional issues.-
1.Whether the plaintiff is ready and willing to perform his part of the contract?
2.Is the plaintiff entitled for specific performance of agreement on payment of balance of consideration of Rs. 78,000/-?
5. The Trial Court on the basis of the perusal of the evidence on record, held that plaintiff has successfully proved that he has been put in possession of the suit property in pursuance of the agreement of sale and as such his possession has been lawful over the suit land. It further held that plaintiff has also proved that the defendants have been disturbing his possession. The Trial Court held that the plaintiff is and has been ready and willing to perform his part of the contract and the plaintiff is entitled to decree for specific performance of contract to execute the sale deed on the payment of balance of consideration of Rs. 78,000/-. The Trial Court also held that the plaintiff is entitled to get the decree for injunction. Having recorded these findings, the Trial Court decreed the plaintiff's suit for the reliefs claimed in the plaint.
6. Having felt aggrieved from the judgment and decree of the Trial Court, the defendant has come up in appeal.
7. I have heard Sri. R. Nataraj, learned Counsel for the appellant and Sri P. Subba Rao for the respondents.
8. It has been contended by the learned Counsel for the appellant that the findings recorded by the Court below that the plaintiff was and has been ready and willing to perform his part of the contract, suffers from error of law and error of fact and as such is erroneous. Learned Counsel for the appellant contended that plaintiffs readiness and willingness to perform his part of the contract should be looked in the light of the terms of the agreement. Learned Counsel contended that a sum of Rs. 10,000/- had to be paid by the plaintiff on 16-3-1983. Learned Counsel contended that the same was not paid on 16-3-1983, but was paid on 17-3-1983, so there was a breach of contract on the part of the plaintiff. Learned Counsel for the defendant-appellant further contended that as per agreement, plaintiff had to pay a sum of Rs. 50,000/- on or before 16th of June, 1983 and the balance of Rs. 50,000/- had again to be paid by or before 16th of September, 1983. Learned Counsel contended that Rs. 50,000/- that had to be paid or deposited with the vendor by the vendee or by the plaintiff with the defendant, by or before 16th of June, 1983, has not been deposited. Learned Counsel contended nodoubt the defendant was made to accept a sum of Rs. 10,000/- on 16-6-1983 and he was made to extend the period for deposit of that amount by 18th of July, 1983 and even that period was again had to be extended up to 18-8-1983. So plaintiff-respondent did commit breach of contract, as he has not been paying the money at the time agreed. So in such circumstances, it was open to the defendant-appellant to rescind the agreement and which the defendant-appellant rescinded by notice dated 14-9-1983. Learned Counsel contended that in view of the circumstances that he was always seeking extension of time, it cannot be said that he was ready and willing to perform his part of contract. Learned Counsel further contended that no doubt he has written a letter to the plaintiff, but that will not suffice and on that basis it could not be said that plaintiff was ready and willing to perform his part of the contract.
9. Learned Counsel for the defendant-appellant further contended that he (the plaintiff) had not even indicated, whether he had money ready with him. In this view of the matter, learned Counsel contended that the finding that the respondent was ready and willing to perform his part of the contract is erroneous. Learned Counsel for the defendant-appellant further contended that grant of decree for specific performance is discretionary and equitable. In such circumstances, the Court may be pleased to consider the case for award of compensation for damage if any the plaintiff-respondent had suffered and the Court finds that really defendant-appellant has committed breach of contract, and not the plaintiff and if the Court finds that the agreement continues to be in existence, it does not stand rescinded. No doubt appellant's Counsel also offered orally on behalf of his client that client is ready to pay a sum of Rs. 2,70,000/- and instead of decree for specific performance being granted, the plaintiffs suit may be decreed for the said amount with costs of the two Courts.
10. Learned Counsel for the appellant made reference to the case of B.R. Mulani v Dr. A.B. Aswathanarayana and Others and to the decision of Hon'ble Supreme Court in the case of Jugraj Singh and Another v Labh Singh and Others. He also relied upon the decision in the case of Rahat Jan v Hafiz Mohammad Usman and Others .
Learned Counsel for the appellant submitted that in suit for specific performance of contract the burden of proof is on the plaintiff to prove the necessary ingredients.
11. Learned Counsel for the plaintiff-respondent contended that his client is interested in the property and not in money and he is interested in the decree for specific performance of contract. Learned Counsel for the respondent contended that the sale consideration could be paid in entirety by or before 16th of September, 1983, as per agreement even if it might not be up to 16-12-1983. It has further been contended that the defendant-vendor had no right to rescind the agreement in every case, till the expiry of the period namely, 16th September, 1983, in every case and before rescinding he should have called upon the plaintiff to get the sale deed executed. Learned Counsel further contended that so far as default is concerned, if it was committed on 16-3-1983 in the making of payment, it was for the reason defendant was not available on 16-3-1983. On 17-3-1983 he being available, money was paid to him, he accepted it. So, plaintiff is not to be blamed. Learned Counsel contended that on 16th June, 1983, Rs. 10,000/- was offered and extended period was given. Learned Counsel for the respondent contended that plaintiff has always been ready and willing to perform his part of the contract and has asked the defendant to indicate his address where cheque or money should be paid. Learned Counsel contended that the finding that the plaintiff has been ready and willing to perform his part of the contract, even on the date of the suit is almost pure and simple finding of fact. He submitted that it is also one of the principles of law that as regard finding recorded by the Trial Court, unless there is something very substantial brought to the notice of this Court as to have escaped the notice of the Court below, the finding recorded by the Trial Court on the appreciation of evidence is to be accepted. Learned Counsel contended that the contention made by Counsel for the appellant on the basis of Section 20 of the Act and on the basis of cases cited by him-B.R. Mulani's case, supra and Jugraj Singh's case, supra, has got no substance as no such case has ever been pleaded, nor the facts of the case disclose any such case. The cases relied by learned counsel for the appellant are distinguishable. Learned Counsel for the respondent contended many facts have been admitted, agreement is admitted, payment is admitted, nodoubt the burden is on the plaintiff to prove his willingness and the question of burden of proof lies almost with the plaintiff, but when the parties have led their evidence, the finding had to be recorded
by the Court below on the basis of the appreciation of evidence and question of burden of proof remained as question of academic importance only.
12. I have applied my mind to the contentions made by the learned Counsels for the parties and have perused the record.
13. Before I proceed further with reference to first contention regarding the question of readiness and willingness of the plaintiff to perform his part of contract under Section 16(c) of the Specific Relief Act, for short, 'Act' and the burden of proof, it will be appropriate to refer to the provisions of Section 16 of the Specific Relief Act, for short, 'Act'. Section 16 is a provision which creates personal bars to the relief. Section 16 reads as under:
16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person.-
(a) .....
(b) .....
(c) who fails to aver and prove that he has 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 terms the performance of which has been prevented or waived by the defendant".
Explanation.--For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true constructions.
14. A reading of this section per se reveals that as per requirement of Section 16(c), the plaintiff has to aver, i.e., plead in the plaint and to prove either (a) that he has already performed the essential terms of the contract which he had to perform or (b) in the alternative, he has to aver or allege in the plaint, and he is also duty bound to prove, that he is from the date of contract will upto date and always been ready and willing to perform his part of the contract. Exception is in respect of those terms which the plaintiff has been prevented by the defendant to perform or performance of which the defendant has already waived. These are the mandatory provisions under Section 16 of the Act. Whereas, explanation to clause (c) of Section 16, further provides that plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.
15. The basic principle of law, really, has been recognised, the case of Ardeshir H. Mama v Flora Sassoon, their Lordships of the Privy Council have been pleased to lay down this very principle at page 216:
"In a suit for specific performance on the other hand, he treated and was required by the Court to treat the contract as subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness, from the date of the contract to the time of the hearing, to perform the contract on his part. Failure to make good that averment brought with it the inevitable dismissal of his suit".
16. The same view, as like Ardeshir H. Mama's case, supra, has also been expressed by the Allahabad High Court in the case of Rahat Jan, supra, vide Paragraph 8 of the decision and the Allahabad High Court has followed with approval the decision of the Calcutta High Court in the case of Md. Ziaul Haque v Calcutta Vyapar Pratisthan .
17. In the case of Palthur Honnur Saheb v Bopanna Annapurnamma and Others, this Court has also expressed the same view after having taken into consideration various decisions of the High Courts in this regard. The relevant paragraph in Honnur Saheb's case is Paragraph 9.
18. In the case of Jugraj Singh, supra, their Lordships have expressed the same view that continuous readiness and willingness at all stages from date of agreement till date of hearing of suit is needed to be proved. It has also been laid down that: "Section 16(c) of the Specific Relief Act, 1963 provides that the plaintiff must plead and prove that he has always been ready and willing to perform his part of the essential terms of the contract. The continuous readiness and willingness at all stages from the date of agreement till the date of hearing of suit need be proved. The substance of the matter and surrounding circumstances must be taken into consideration in adjuring readiness and willingness to perform the plaintiffs part of contract".
19. In the case of Smt. Indira Kaur and Others v Shri Sheo Lal Kapoor , their Lordships of the Supreme Court had observed that to determine the question of readiness and willingness of the plaintiff to perform his part of the contract, the Court has to examine the conduct and positions of both the parties.
20. In the case of His Holiness Acharya Swami Ganesh Dassji v Shri Sita Ram Thapar, their Lordships of the Supreme Court observed:
"There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised.
Their Lordships further observed:
The factum of readiness and willingness to perform plaintiff;s 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 willing to perform his part of contract".
21. Thus the basic principle of law that emerges is that in order to succeed in a suit for specific performance of contract and to enable the plaintiff to get entitled to the relief of decree for specific performance of contract, plaintiff must allege or aver in the plaint, his continuous readiness from the date of contract till, the date of hearing of the suit to perform his part of contract and further he must prove that fact. So, there is no dispute so far as the bare proposition of law that, burden lies on the plaintiff to aver and prove that fact, as contended by the learned Counsel for the appellant.
22. We have to look to the plaint, whether these conditions have been satisfied by making the allegations first and if it is found from the perusal of the plaint that averment has been made as per requirement of law, the question of proof will arise but if there is no assertion or averment of this fact, then plaint will have to be thrown out.
23. So far as the question of burden of proof is concerned, I have mentioned that there is no dispute about it, but it has to be taken note that when both the parties have to lead evidence on record, then burden of proof looses its importance, it remains a question of academic importance. It is really the evidence that has to be appreciated which may be oral, documentary or circumstantial and which may also be the evidence coming out of the conduct of both the parties which they have to be looked into.
24. Thus arises the need to examine the plaint allegations in this regard. That paragraphs 8 and 9 of the plaint read as under:
"8. As agreed upon the plaintiff has always been ready to pay to the defendant the amounts towards balance of the consideration. But the defendant did not turn upto collect the amounts from the plaintiff intentionally with ulterior motives and the plaintiff himself wrote a letter dated 19-7-1983 (Nineteenth July Eighty Three) to the defendant asking him to collect a sum of Rs. 50,000/- (Rupees Fifty Thousand) towards the balance of consideration and the said letter was sent by registered post acknowledgement due and the same has been duly served on the defendant-but he has neither replied the said letter nor complied with the terms of the said letter.
9. The plaintiff submits that the stipulated time both under the agreement of sale or under law is not yet over and as such the agreement of sale is still in force. The defendant got issued a notice dated 14-9-1983 (Fourteenth September Eighty Three) which is an untenable notice and the same has been duly replied on 22-9-1983 (Twenty-third September Eighty Three)."
In paragraph 11, the plaintiff has further averred "that he is ready and willing to pay the balance of sale consideration of Rs. 78,000/-, with regard to 25 guntas of Sy. No. 74/1-B, 10 guntas in Sy. No. 71 deducting Rs. 22,000/-, out of the total balance of sale consideration of Rs. 1,00,000/-, with regard to 5 1/2 guntas in Sy. No. 71, as the same does not stand in the name of the defendant. It is submitted that on payment of Rs. 78,000/-, the plaintiff is entitled to obtain the registered sale deed".
25. A perusal of the plaint thus, indicates that so far what is required for the time being averred in the plaint, that the plaintiff is and has been ready and willing to perform his part of the contract, has been averred.
26. The plaintiff has complied with the requirement of Section 16(c), as regards making of averment in the plaint. But as mentioned earlier, no doubt, plaintiffs readiness has to be looked into and judged in the light of evidence on record and the conduct of both the parties. There is no dispute between the parties about the agreement being entered into with respect to the property as mentioned earlier and so far as 5 1/2 guntas of land of Sy. No. 71, is concerned, defendant had no title and the defendant had indicated that he will execute the sale deed after obtaining the sale deed in respect thereof (5 1/2 guntas of land) from Y.N. Ramakrishna. That, as this 5 1/2 guntas land does not stand in defendant's name so after deducting the sum of Rs. 22,000/-, out of total sale consideration, the plaintiff is and has been ready to pay Rs. 78,000/-.
27. It is admitted that a sum of Rs. 50,000/- has been paid by the plaintiff, as the advance on the date of agreement, that is, on 14/15-2-1983. Under the terms of the contract, the plaintiff had to pay a sum of Rs. 10,000/-, on 16-3-1983 and thereafter, he had to pay a sum of Rs. 50,000/-, on or before 16-6-1983. The balance sum of Rs. 50,000/-, as per terms of the agreement had to be paid by or before 16th September, 1983.
28. A reading of the contract thus, reveals that the plaintiff had time to perform his part of the contract, as per the terms of the contract in an ordinary course by or before 16th of September, 1983. If time is taken to be the essence of the contract. Here, the conducts of the parties lead me to think that time was not the essence of the contract, as the sum of Rs. 10,000/-, which had to be paid by 16-3-1983, could not be paid. No doubt, the plaintiff says, he attempted, but he could not pay, while, the defendant admitted that on 17-3-1983, the plaintiff paid the sum of Rs. 10,000/-, which he could not pay on 16-3-1983, for one reason or the other and the defendant-vendor accepted that amount, it means, the defendant-vendor did not attach any importance to the date by which the instalment of Rs. 10,000/- towards advance had to be paid, so also the sum of Rs. 50,000/-, which had to be paid by 16-6-1983, had not been paid on that date, instead paid on 17-6-1983, and the defendant-appellant accepted the lesser sum than Rs. 50,000/-, that is, Rs. 10,000/-. Again, the conduct of the defendant per se reveals that time was not the essence of the contract, as to when the money to be paid, while plaintiff's case as per pleadings, is that one month time had been granted to the
plaintiff initially, as 18-7-1983. Then, plaintiff was again, granted one more month time to pay Rs. 50,000/-, as 18-8-1983. As admitted, in those two months granted time, as such, a sum of Rs. 60,000/-, had been paid by the plaintiff to defendant on different dates. Here, lies main dispute, as the plaintiffs case is that defendant did not turn up to take money inspite of that notice, he was required to take on 18-8-1983.
29. P.W. 1 and D.W. 1, are the only witnesses in this regard. P.W. 1-Nagappa, had deposed in paragraph 5, of his statement, that on 17-6-1983, we had agreed to pay the balance of Rs. 50,000/-, on or before
18-8-1983. On 18-8-1983, myself and my uncle Lingareddy, went to the house of the defendant with Rs. 50,000/-, but we could not meet the defendant on that day, though we went to the house of the defendant on
19-8-1983 also. I sent a letter by registered post to the defendant asking him to specify the place, where he would be available to receive Rs. 50,000/-. That letter was also sent to his factory address. The letter addressed to the factory was returned unserved, but letter sent to his house address was received by him.
30. Having received the said letters, the defendant did not send us any reply. On the record, I found the notice and the A.D., on his home address, was sent on 21-7-1983.
31. There are true copies of the notice on record. There appears to be some typing mistake in one notice, because it was issued as if on 19-7-1983, and the defendant was called upon to give his address by 21-7-1983, while the other notices indicate that he was really, required to give address by 19-8-1983. As per the statement recorded, it appears on 19-8-1983, the notice was given, but his address was required to be given by 19-8-1983, because, a notice would have been served in a day or two from when the notice was given on 19-8-1983, as he was required to furnish the address before 18-8-1983, when the money had to be paid by the plaintiff. There is no document on record to indicate whether this notice dated 19-8-1983, was at all replied, though A.D. indicate service of the notice on record. It was the duty of the defendant to have replied, but anyway, the defendant did not reply that notice dated 18-8-1983.
32. A suggestion was made to the plaintiff, on behalf of the defendant that he did not have the sum of Rs. 50,000/-, on 18-8-1983, and that P.W. 1, along with his uncle had not gone to his house. This suggestion was strongly refuted by P.W. 1, who states in paragraph 11 of his deposition, that it is not true to suggest that he did not have that sum of Rs. 50,000/-, on 18-8-1983, and he did not go to the house of the defendant to pay the said amount. This is the plaintiff's evidence.
33. In that regard, D.W. 1, is the material witness. D.W. 1 states: "As per agreement Ex. P-2, plaintiff had to pay Rs. 50,000/-, instalment, but he did not pay the amount. When I demanded the plaintiff to pay this amount, he told me that he would inform the date when he will be paying that amount in three instalments".
34. When the plaintiff-respondent sent the letter dated 19-7-1983, it was the duty of the defendant-appellant to have replied and informed
the plaintiff that money should be paid by or before 19-8-1983. Defendant has no where stated that he had given any reply. His statement in the written statement and on record does not indicate that the above assertions made by the plaintiff were wrong. There appears, to be default on the part of the defendant-appellant of not only this, but the defendant inspite of the agreement requiring the amount to be paid by 16-9-1983, if we take strict view of contract or the agreement and for a moment ignoring the conduct of the defendant-appellant when he waived the date, has done an act of again, dissuading the plaintiff from performing his part of the contract by issuing him a notice dated 12-9-1983, Ex. P-11, on record. By this notice, the defendant has alleged that he is entitled to forfeit the amount already paid and cancel the agreement, he has forfeited and did not wait till 16th September, 1983. Neither did he comply with Ex. P-12 nor gave reply nor did he give the address, where he would be available to the plaintiff, so as to approach him. In these circumstances, the plaintiff had to file the suit and in this view of the matter, in my opinion, no doubt, circumstances of the case and evidence on record per se reveal that plaintiff has been ready and willing to perform his part of the contract. But, the learned Counsel for the appellant contended that the plaintiff had not shown that he was ready with the money and he had not deposited the amount, while filing the suit. It is not necessary to deposit the money, unless so Court directs. Not depositing the money along with the plaint cannot be taken as a factor to deprive the plaintiff of his relief nor is it indicative of the fact that plaintiff is not ready and willing to perform his part of the contract in view of explanation to Section 16(c) of the Act. Really here, the conduct of the defendant also appears to be such that, though plaintiff had been ready and willing to perform his part of the contract, but, it was the defendant, who did not give reply to the letter of plaintiff and so, the instalment of Rs. 50,000/-, could not be paid on 19-8-1983, because of the defendant-appellant's failure to communicate his address, as to where he will be available and further plaintiff having visited the place of defendant and the defendant was not available by then, undisputedly and I take it, to be so, as it was admitted in the course of the deposition of the defendant as D.W. 1 also, he did not and could not deny that allegation. Thus, the defendant was by his own act instrumental in being the cause for failure of the plaintiff from performing his part of the contract. In this view of the matter, in my opinion, the learned Trial Court was quite justified in answering Issue No. 1, with regard to readiness and willingness of the plaintiff-respondent to perform his part of the contract in plaintiff's, i.e., respondent's favour and holding that the plaintiff is and has been ready to perform his part of the contract.
35. Learned Counsel for the appellant further contended that instead of decree for specific performance being passed, the Trial Court should have passed a decree for return of the advance money. The learned Counsel for the appellant in this connection referred to Section 20 of the Specific Relief Act. Section 20 of the Act provides that the jurisdiction of the Court to grant decree for specific performance of contract is discretionary and Court is not bound to grant such relief merely because it is
lawful to do so: It has to be taken note of that Section 20 provides that discretion has not to be exercised arbitrarily, instead, it has to be exercised on sound and reasonable principles and is capable of being corrected by the Appellate Court. Sub-section (2) of Section 20, no doubt refers to the specific cases referred in clauses (a) to (c) and provides that the Court may exercise discretion not to decree specific performance, in cases, namely, (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances reveal that though contract was not voidable, but it gave or gives the plaintiff an unfair advantage over the defendant. Apatt from argument, the circumstances have to be indicated how plaintiff is going to get an unfair advantage, as such in such a case, defendant has to plead the fact and to prove the circumstances along with the terms of contract to show and exhibit that the plaintiff was going to get unfair advantage. That clause (b) provides where the performance of the contract would involve some hardship to the defendant which he did not foresee, but its performance would not cause any such hardship to the plaintiff again it requires assertion of facts in the pleadings to that effect which the other party, i.e., plaintiff may deny and which have to be established by evidence. The third category of case, i.e., are those cases where the defendant had entered into a contract in the circumstances which though may not render the contract voidable, but makes it inequitable to enforce "the contract. Then, in such a case in order to claim protection or benefit of clause (c) of sub-section (2) of Section 20, the defendant had to place the facts on record and make the pleadings in the written statement which plaintiff could have denied and defendant would have been called to prove. No such case as is needed to be pleaded in order to claim benefit or protection of Section 20(2)(a) or fb) or (c) has been pleaded, nor any issue was pressed, nor has defendant alleged that he is ready to return the money and to pay the compensation. In the absence of the pleadings, such an argument as has been raised by defendant with reference to Section 20(2) of the Act cannot be permitted to be raised nor can it be considered as such. Section 14 of the Act provides that a contract shall not be specifically enforced, where for the non-performance of the contract, compensation is an adequate relief. No such plea has also been raised, nor any amount has been suggested as to be adequate compensation for non-performance with reference to it.
36. The learned Counsel for the appellant contended that in the contract or agreement, it has been stated that in case, of breach of contract by the vendor the vendee may be entitled to damages. He tried to strengthen upon it and submitted that it provided an alternative that the compensation will be paid.
37. The material portion of the agreement which has been read over to me in Kannada and the translation of which in English has been made by the learned Counsels for both the parties jointly, reads as:
"In case, I do not register a registered document in time when called by you, the vendee, and if you, that is, the vendee is put in trouble, then, I shall be liable for all costs and consequences that may be incurred by the vendee".
38. After placing reliance on it, in support of his contention, learned Counsel for the appellant made a reference to the decision of their Lordships of the Supreme Court in the case of B.R. Mulani v Dr. A.B. Aswathanarayana and Others. It appears, the Supreme Court's decision is in appeal from the judgment of a Division Bench decision of this Court in the case of B.R. Mulani's case, supra. Their Lordships of the Supreme Court have, no doubt upheld the view of the Division Bench of this Court which was to the effect that the plaintiff of the suit (in D.B.'s case of B.R. Mulani), was not entitled to decree for specific performance of contract, hut they disagreed with the Division Bench in dismissing the suit for refund of money of compensation. The Supreme Court held the plaintiff to be entitled to get decree for refund of money/compensation.
39. Their Lordships of the Supreme Court in B.R. Mulani's case quoted the observation of the High Court which after having referred to the recital of the document and made observation to the effect that: "an option was given in that case to the defendants under the agreement to either pay the amount and retain the property or to sell the property to plaintiff for a consideration of Rs. 1,10,000/-. The terms of the agreement which has been quoted in the decision is: "And whereas .... (respondents) agreed to help the member of the First Party) to pay off the arrears of rents or damages to Sri Lakshmi Narayana and also to help the members of the First Party to improve the Poultry Farm and Dairy farm which they are running at present to bring them to a remunerative stage so that from the income that they have been realising from various sources they will be in a position to discharge the mortgage loan of rupees one lakhs and pay off the rents or damages as stated above and retain the property or in the alternative to sell the schedule property to the Second Party for a consideration of Rs. 1,10,000/-, which is an attractive one subject to the following terms and conditions:"
These terms of the agreement-Ex. P-3, in Mulani's case were construed by the Division Bench as under.-
"Our reading of the clause is that it gives option to the defendants either to pay the amount or to execute the sale deed".
40. That, here in the present case, there is no such case or term under agreement, nor was any such case that the vendor-defendant was given option under the agreement either to pay off the money or to sell the property. The decision of B.R. Mulani's case referred to above as such, is of no help to the defendant-appellant and in view of above is distinguishable and is not applicable to the facts of this case.
41. It may be mentioned that in the case of M.L. Devender Singh v Syed Khaja , their Lordships of the Supreme Court with approval
quoted the statement of law in Sir Edward Fry's "Treatise on a Specific Performance of the Contract".
42. In the present case, what the clause with regard to stipulation means, is that, if on failure of the vendor to execute the sale deed on 18-6-1983, vendee has to suffer and he may have to incurr legal expenditure as well, the vendor will bear all costs and the damages or loss caused to the vendee and reimburse them. If deed is not executed on the date stipulated, because of the fault of the vendor, the vendee in addition to the decree for specific performance, will also be entitled to costs and damages suffered by vendee. Here it is not the case of the defendant-appellant that compensation was an alternative, provided under the contract to specific performance of contract to sell.
43. In M.L. Devender Singh's case, supra, in paragraphs 15 to 20, their Lordships of the Supreme Court have observed as under:
"15. We think that Section 23 of the Act of 1963 contains a comprehensive statement of the principles on which, even before the Act of 1963, the presence of a term in a contract "specifying" a sum of money to be paid for a breach of the contract has to be construed. Where payment is an alternative to carrying out the other terms of the contract, it would exclude, by the terms of the contract itself, specific performance of the contract to convey a property.
16. The position stated above is in conformity with the principles found stated in Sir Edward Fry's "Treatise on the Specific Performance of Contracts" (Sixth edition at p. 65). It was said there:
"The question always is: What is the contract? Is it that one certain act shall be done, with a sum annexed whether by way of penalty or damages, to secure the performance of this very act? Or, is it that one of the two things shall be done at the election of the party who has to perform the contract, namely, the performance of the act or the payment of the sum of money? If the former, the fact of the penal or other like sum being annexed will not prevent the Court's enforcing performance of the very act, and thus carrying into execution the intention of the parties: if the latter, the contract is satisfied by the payment of a sum of money, and there is no ground for proceeding against the party having the election to compel the performance of the other alternative
From what has been said it will be gathered that contracts of the kind now under discussion are divisible into three classes:
(i) Where the sum mentioned is strictly a penalty -- a sum named by way of securing the performance of the contract, as the penalty is a bond;
(ii) Where the sum named is to be paid as liquidated damages for a breach of the contract;
(iii) Where the sum named is an amount the payment of which may be substituted for the performance of the act at the election of the person by whom the money is to be paid or the act done.
Where the stipulated payment comes under either of the two first-mentioned heads, the Court will enforce the contract, if in other respects it can and ought to be enforced, just in the same way as a contract not to do a particular act, with a penalty added to secure its performance or a sum named as liquidated damages, may be specifically enforced by means of an injunction against breaking it. On the other hand, where the contract comes under the third head, it is satisfied by the payment of the money, and there is no ground for the Court to compel the specific performance of the other alternative of the contract".
17. Sir Edward Fry pointed out that the distinction between a strict penalty and liquidated damages for a breach of contract was important in common law where liquidated damages were considered sufficient compensation for breach of contract, but sums stipulated by way of penalty stood on a different footing. He then said:
"But as regards the equitable remedy the distinction is unimportant: for the fact that the sum named is the amount agreed to be paid as liquidated damages is, equally with a penalty strictly so called, ineffectual to prevent the Court from enforcing the contract in specie".
18. The equitable principles which regulated the grant of specific performance by the separate Court of Equity which existed in England at one time have been given statutory form in India. It is, therefore, immaterial that the stipulated payment under the terms of the contract under consideration before us could be viewed as one for payment of liquidated damages. The question would still remain whether the Courts are relieved by the agreement between the parties of the duty to determine, on the facts of a particular case, whether damages specified or left unspecified, would really afford adequate compensation to the party which wants a conveyance of immovable property as agreed upon.
19. A reference to Section 22 of the old Act, (the corresponding provision is Section 20 of the Act of 1963), would show that the jurisdiction of the Court to decree specific relief is discretionary and must be exercised on sound and reasonable grounds "guided by judicial principles and capable of correction by a Court of appeal". This jurisdiction cannot be curtailed or taken away by merely fixing a sum even as liquidated damages. We think that this is made perfectly clear by the provisions of Section 20 of the old Act (corresponding to Section 23 of the Act of 1963) so that the Courts has to determine, on the facts and circumstances of each case before it. Whether specific performance of a contract to convey a property ought to be granted.
20. The fact that the parties themselves have provided a sum to be paid by the party breaking the contract does not, by itself, remove the strong presumption contemplated by the use of the words "unless and until the contrary is proved". The sufficiency or insufficiency of any evidence to remove such a presumption is a matter of evidence. The fact that the parties themselves specified a sum of money to be paid in the event of its breach is, no doubt, a piece of evidence to be considered in deciding whether the presumption has been repelled or not. But, in our opinion, it is nothing more than a piece or evidence. It is not conclusive or decisive".
44. In this view of the matter, the jurisdiction of the Court cannot be said to be curtailed by mere fixing of even some liquidated damages, if so fixed in the contract. Each case has to be judged on its own facts, whether to decree the specific performance, to perform and to convey the property or not. In the present case, no such facts have been pleaded which may indicate or make it clear that the Trial Court should not have granted the decree for specific performance of contract. As such, there is no force in the contention of the learned Counsel for the appellant.
45. Thus considered, this appeal is devoid of merits, it is hereby dismissed. The judgment and decree of the Trial Court is hereby confirmed. Costs of appeal are made easy, that is, parties to bear their respective costs.
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