Tuesday, 29 October 2019

Whether Judgement debtor can refuse to execute sale deed by refunding advance money in bank account of decree holder?

Therefore, when the time did not remain the essence of the contract, the judgment debtor/petitioner could not have rendered the compromise decree a non est by unilaterally depositing the advance money in the bank account of the decree holder, without his consent. Even if the petitioner refunded the advance money by depositing the same in the bank account of the respondent, without his consent, such refund or deposit, in view of order XXI Rule 2 of the CPC, as rightly contended by the learned counsel for the plaintiff/decree holder, was of no consequence to affect the decree, unless such adjustment or payment is brought to the notice of the court or the court certifies such adjustment or payment. On the facts and circumstances of the case, the petitioner/judgment debtor cannot be held to have acquired any right to refuse to execute the sale deed in terms of the compromise decree, and as such, the impugned order, in my considered view did not suffer from any jurisdictional error, warranting interference, in exercise of revisional jurisdiction u/s. 115 CPC.

IN THE HIGH COURT OF GAUHATI

CRP 160/2018

Decided On: 25.01.2019

 Partha Mazumder  Vs.  Abhijit Mazumder

Hon'ble Judges/Coram:
Mir Alfaz Ali, J.

Citation: AIR 2019(NOC) 173 Gau

1. This revision petition has been filed challenging the propriety and legality of the order dated 20-08-2018 passed by the learned Civil Judge, Tinsukia in Misc. (J) Case No. 85/2018 arising out of Title Ex. Case No. 6/2018.

2. The factual background leading to the present revision petition is thus : The present opposite party, as plaintiff, filed T.S. No. 16/2012 for specific performance of contract in respect of a plot of land measuring 12.24 lechas, covered by dag No. 480 and 483 and P.P. No. 79 situated at Tinsukia town. During the pendency of the suit, both the parties entered into an amicable settlement and filed a joint compromise petition before the court on 02-09-2015, urging the court to pass a compromise decree in terms of the compromise agreement entered into between the parties. Learned Civil Judge decreed the suit in terms of the amicable settlement and a compromise decree was accordingly drawn up. As the judgment debtor failed to execute the sale deed as per the decree, the respondent/decree holder filed an execution proceeding, which was registered as T. Ext. Case No. 6/2018. The petitioner/judgment debtor filed an application u/s. 47 of the CPC resisting the execution proceeding, alleging inter alia, that the opposite party/decree holder failed to comply with the terms and conditions of the compromise decree and had shown unwillingness to purchase the land and therefore, the petitioner/judgment debtor refunded the advance amount of Rs. 1 lakh by depositing the same in the bank account of the respondent/decree holder and thereby cancelled the decree. It was the contention of the petitioner/judgment debtor, that as the opposite party/decree holder failed to comply with the terms and conditions of the decree within the stipulated time and also demonstrated his unwillingness to purchase the land by paying the balance consideration money, and the petitioner/judgment debtor also refunded the advance money, the decree was non est and could not be executed.

3. Upon hearing both the parties, learned Civil Judge by the impugned order rejected the plea of the petitioner/judgment debtor. Aggrieved, the petitioner/judgment debtor filed the present revision petition.

4. I have heard learned senior counsel, Mr. G.N. Sahewalla for the petitioner/judgment debtor and learned counsel, Mr. S. Dutt for the respondent/decree holder.

5. Mr. Sahewalla referring to clause x of the compromise agreement being part of the decree, contended, that time was the essence of the contract between the parties and the respondent-decree holder having failed to perform his part of the contract by not paying the balance amount of Rs. 1,85,000/- within the stipulated time of 3 (three) months, the contract lapsed and the petitioner/judgment debtor also refunded the advance amount of Rs. 1 lakh in the meantime and therefore, the decree was non est and could not be executed. It was also contended by Mr. Sahewalla, that several years have elapsed in the meantime and the value of the property also escalated, and as such, the decree could not be executed. In order to buttress, his submission, Mr. Sahewalla placed reliance on the following decisions:

1. MANU/SC/0051/1998 : (1998) 2 SCC 226, Bismillah Begum (SMT) Dead by LRs. VS. Rahmatullah Khan (Dead) by LRs.

2. MANU/SC/0667/2001 : (2002) 1 SCC 134, Veerayee Ammal VS. Seeni Ammal

3. MANU/SC/0939/2011 : (2011) 9 SCC 147, Citadel Fine Pharmaceuticals VS. Ramaniyam Real Estates Private Ltd. and Anr.

6. Refuting the submission of the learned counsel for the petitioner, learned counsel for the respondent, Mr. S. Dutta submitted, that the alleged refund of advance money by the petitioner/judgment debtor could not affect the decree, inasmuch as, such payment was not brought to the notice of the court, nor the same was certified by the court as per Rule 2 of Order XXI CPC. Therefore, the unilateral deposition of the money in the account of the decree holder without his consent was of no consequence and could not have any impact on the decree, which was passed on the basis of compromise settlement between the parties. To buttress his submission, Mr. Dutta placed reliance on the decision of the Apex Court in Badamo Devi & Ors. VS. Sagar Sarma reported in MANU/SC/0985/1999 : (1999) 6 SCC 30. The Apex Court, while holding that objection raised u/s. 47 of the C.P.C. on the ground of any payment or adjustment outside the court is not maintainable, unless such payment or adjustment is brought to the notice of the court, reiterated its' earlier decisions as under ---

"10. Admittedly, neither the decree-holder nor the respondent had applied to the Court for certification of the compromise entered into between the parties which had the effect of adjustment of the decree in its entirety. What would be the effect of non-compliance with the provisions of Order 21 Rule 2 was considered by this Court in Sultana Begum v. Prem Chand Jain MANU/SC/0227/1997 : AIR 1997 SC 1006 in which the entire case-law was reviewed and it was laid down that any payment or adjustment which is not certified under Order 21 Rule 2 would not be recognized by the executing court. Since the respondent had not approached the Court under Order 21 Rule 2 for certifying the adjustment of the decree in terms of the so-called agreement between him and appellant 2, the objections filed under Section 47 C.P.C. before the executing court were not maintainable and no investigation was required to be done in those objections."
7. Mr. Dutta further contended, that the petitioner/judgment debtor himself failed to obtain necessary permission within time and as such, there was no question of the payment of balance money within the stipulated time, inasmuch as, as per the terms of settlement, the balance amount was to be paid at the time of execution of the sale deed. Mr. Dutta, referring to Clause XII of the compromise agreement contended, that the petitioner/judgment debtor was required to obtain the necessary sale permission within three months and in case of failure to do so, he was to take required consent from the decree holder/respondent to extend the time for further one month. The judgment debtor/petitioner neither obtained sale permission within the stipulated time nor took consent of decree holder to extend the time as per clause xii, and as such, he could not take the advantage of his own fault to evade the compromise decree, submits Mr. Dutta. Further contention of Mr. Dutta was that the impugned order passed by the learned executing court having not suffered from any jurisdictional error, the High Court in exercise of revisional power under Section 115 of the CPC shall not interfere with such order passed by the learned executing court.

8. In Veerayee Ammal VS. Seeni Ammal (supra), the Apex Court observed that even when time was not the essence of the contract, the plaintiff is required to approach the court of law within a reasonable time. The Apex Court held in para 11 as under:

"11. When, concededly, the time was not the essence of the contract, the appellant-plaintiff was required to approach the court of law within a reasonable time. A Constitution Bench of this Hon'ble Court in Chand Rani v. Kamal Rani, MANU/SC/0285/1993 : (1993) 1 SCC 519 held that in case of sale 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 (i) from the express terms of the contract; (ii) from the nature of the property; (iii) from the surrounding circumstances, for example, the object of making the contract. For the purposes of granting relief, the reasonable time has to be ascertained from all the facts and circumstances of the case."
9. In Bismillah Begum (SMT) Dead by LRs. VS. Rahmatullah Khan (Dead) by LRs. (supra) there was an agreement for re-conveyance of the sold property. The Apex Court, having taken note of the facts of the said case that plaintiff failed to perform his part of the contract and there was no material on record to attribute any lapse on the part of the defendant for failure of the plaintiff to perform his part of the contract, held in para 7 as under:

"7. The above passage refers both to options for renewal and options to repurchase where, in regard to immovable property, as a matter of law time becomes the essence of the contract. Therefore, in regard to contracts of reconveyance relating to immovable property the principle laid down in A.H. Mama v. Flora Sassoon - that time is not normally the essence of the contract in contracts relating to immovable property--does not apply. It is in fact, so observed in Caltex (India) Ltd. case. In view of the abovesaid decision of this Court relating to contract of re-conveyance, and inasmuch as, the amount was not paid within the stipulated time, the said option in favour of the plaintiff must be deemed to have "lapsed". For the aforesaid reasons, the appeal fails and is dismissed. No costs."
10. In Citadel Fine Pharmaceuticals VS. Ramaniyam Real Estates Private Ltd. and Anr. (surpa) relied by learned counsel for the petitioner, the Apex Court held in para 33, 34 and 35 as under:-

"33. The settled law seems to be that in a case for specific performance of contract relating to immovable property, time is not normally the essence. However, this is not an absolute proposition and it has several exceptions.

34. Reference in this connection may be made to the decision of the Privy Council in Jamshed Khodaram Irani v. Burjorji Dhunjibhai, MANU/PR/0015/1915 : (1915-16) 43 IA 26. Viscount Haldene delivering the judgment for the Judicial Committee of the Privy Council held that the law applicable to this question is contained in Section 55 of the Contract Act, 1872 and the learned Law Lord was of the opinion that Section 55 of the Contract Act does not lay down any principle which is different from those which obtain under the law of England with regard to contracts for sale of land.

35. It was further held that in cases relating to specific performance of contract, equity, which governs the rights of the parties, does not look always at the express term of the agreement but at the substance of it in order to ascertain whether the parties named a specific time within which completion was to take place and whether the parties in substance intended that the completion should take place within a reasonable time. The legal position was as follows : (Jamshed Khodaram' case MANU/PR/0015/1915 : (1915-16) 43 IA 26 (AP-32)

"....... A court of equity will indeed relieve against and enforce specific performance, notwithstanding a failure to keep the dates assigned by the contract, either for completion or for the steps towards completion, if it can do justice between the parties, and if (as Lord Justice Turner said in Roberts v. Berry, De GM & G at p. 289 : ER p. 114) there is nothing in the 'express stipulations between the parties, the nature of the property, or the surrounding circumstances', which would make it inequitable to interfere with and modify the legal right"."

11. The constitutional Bench of the Apex Court in Chand Rani VS. Kamal Rani reported in MANU/SC/0285/1993 : 1993 (1) SCC 519 also relied by learned Civil Judge, the Apex Court held that "it is a well-accepted principle that in case of sale of immovable property, time is never regarded as essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the right of the parties in case of specific performance of contract, to sell realistic, law looks not at the letter, but in the substance of the agreement. It has to be ascertain whether under the terms of the contract the parties names as specified time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time and intention to make time, the essence of the contract must be expressed in unequivocal language."

12. What therefore, follows is that though, usually in a contract for sale of immovable property time is not regarded as essence of the contract, nor there can be a presumption of time being the essence of the contract, such proposition is not absolute. It would depend upon the facts of each case, more particularly, the terms of the contract both in letters and spirit as well as other surrounding facts and circumstances. As the right of the parties in case of specific performance of contract is governed by the law of equity, it is not merely the letters or express terms of the contract, but the substance of the contract and all other attending facts and circumstances, which are required to be taken into account to ascertain whether time was the essence of the contract or not.

13. In the present case, in order to ascertain, whether time was the essence of the contract or whether due to failure on the part of the respondent/decree holder to pay the balance consideration money within the stipulated time, the contract stood lapsed, rendering the compromise decree non est, it will be apposite to look into the relevant terms and conditions of the compromise settlement being the part of the decree. In order to appreciate the controversy in the present case the following clauses of the compromise agreement will be relevant --

"v) That the necessary land sale permission from the concerned authorities shall be obtained by the defendant and the cost of land sale permission from the office of the Tinsukia Municipal Board shall be borne by the Defendant and the cost of the land sale permission from the office of the Deputy Commissioner, Tinsukia shall be borne by the plaintiff.

vi).................................. ........................................................

vii).................................................................................................

viii) That after obtaining land sale permission from the Tinsukia Municipal Board in the name of the plaintiff, the plaintiff shall pay full amount of Rs. 1,85,000/- (Rupees one lakh eighty five thousand) only to the defendant on the day of execution of formal deed of sale in favour of plaintiff.

ix) That if the plaintiff fails to pay the balance amount of Rs. 1,85,000/- (Rupees one lakh eighty five thousand) only within three months and also fails to get the sale deed registered, in that event, the defendant shall refund the advance amount to the plaintiff and the defendant will be at liberty to refuse to execute any sale deed in favour of the plaintiff.

(x).................................................

xi) That the defendant will have to hand over the land sale permission to the plaintiff within three months from today for execution of sale deed.

....................................................................................

xii) That if the defendant fails to obtain necessary land sale permission from the concerned authorities within three months from today, in the event, the defendant shall take written consent from the plaintiff for granting another one month time for obtaining land sale permission."

14. The contention of the learned counsel for the petitioner/judgment debtor was that as per clause 10 of the terms of the compromise decree the balance amount of Rs. 1,85,000/- should be paid within three months and in case the plaintiff/decree holder fails to pay the said amount within three months and get the sale deed registered, the defendant shall refund the advance amount to the plaintiff and the defendant shall be at liberty to refuse to execute of the sale deed and as such, time was the essence of the contract. It was further contended that because of the failure of the respondent/decree holder to perform his part of the contract by paying the balance amount and getting the sale deed registered the petitioner/judgment debtor refunded the advance money. Evidently, as per the terms of the compromise agreement, as indicated above, defendant was to obtain the land sale permission from the concerned authority. The clause xii of the terms of compromise agreement provided, that in case the defendant fails to obtain necessary sale permission from the concerned authority within three months, he shall take written consent from the plaintiff for another extended time of one month for obtaining sale permission. In the instant case, admittedly the sale permission was obtained far beyond the stipulated time of three or four months. Therefore, the defendant also apparently failed to perform his part of the contract as per the compromise decree to obtain the sale permission within the stipulated time. When the sale permission was not obtained within time, there could not be execution and registration of the sale deed, and as such, plaintiff-decree holder could not be faulted for not making the payment of balance amount within such stipulated time of three months.

15. What is apparent from the terms of the contract as per the compromise settlement is that, both the parties failed to stick to the stipulated time to perform their respective part of the contract as per decree. Therefore, from the conduct of the parties, time could not be held to have remained the essence of the contract, and as such, plaintiff could not have cancelled the contract unilaterally by depositing the advance amount in the bank account of the decree holder to nullify the compromise decree. Notwithstanding the fact, that time was sought to be made essence of the contract in the compromise agreement, when both parties failed to maintain the time, or failed to perform their respective part of the contract within the stipulated time, time no longer remained the essence of the contract. Therefore, when the time did not remain the essence of the contract, the judgment debtor/petitioner could not have rendered the compromise decree a non est by unilaterally depositing the advance money in the bank account of the decree holder, without his consent. Even if the petitioner refunded the advance money by depositing the same in the bank account of the respondent, without his consent, such refund or deposit, in view of order XXI Rule 2 of the CPC, as rightly contended by the learned counsel for the plaintiff/decree holder, was of no consequence to affect the decree, unless such adjustment or payment is brought to the notice of the court or the court certifies such adjustment or payment. On the facts and circumstances of the case, the petitioner/judgment debtor cannot be held to have acquired any right to refuse to execute the sale deed in terms of the compromise decree, and as such, the impugned order, in my considered view did not suffer from any jurisdictional error, warranting interference, in exercise of revisional jurisdiction u/s. 115 CPC.

16. In the teeth of the discussion hereinabove, the revision petition appears to be without merit and accordingly dismissed. The civil revision petition is disposed of accordingly.




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