1 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE14H DAY OF MARCH2018BEFORE THE HON’BLE MR. JUSTICE SREENIVAS HARISH KUMAR REGULAR FIRST APPEAL No.1165 OF2011C/W REGULAR FIRST APPEAL No.1166 OF2011IN RFA No.1165 OF2011BETWEEN B.V.Basavaraj Since deceased represented by his Lrs 1.
2. Smt. Sujaya Basavaraj, Major W/o. Late B.V.Basavaraj Smt. Reshma Balu D/o. Late B.V.Basavaraj Both R/o. No.F.004, Adarsha Palace 47th Cross, 5th Block, Jayanagar. Bangalore-560041. (Appellants amended vide order dated 22.2.2016) …Appellants (By Sri. T.B.Kiran Kumar, Advocate) AND1 K.L.Kumaraswamy, Major S/o. Lakshminarayana Shetty. Proprietor, Sri. Lakshmi Traders, 2 2. No.36, IInd Main Road, New Tarugapet, Bangalore-560002. Dr. Sunil Basavaraj, S/o. B.V.Basavaraj, E-002, Sterling Terraces, BSK3d stage, Outer Ring Road, Bangalore-560085. …Respondents (By Sri. M.R.Vijaya Raghavan, Advocate, for R1 Sri. T.S.Mahanthesh, Advocate for R2) This RFA is filed under Section 96 of CPC, against the judgment and decree dated 01.04.2011 passed in O.S.1977/1996 on the file of the XXV-Additional City Civil Judge, Bangalore, decreeing the suit for the specific performance. IN RFA No.1166 OF2011BETWEEN B.V.Basavaraj Since deceased represented by his Lrs 1.
2.
3. Smt. Reshma Balu D/o. Late B.V.Basavaraj, Aged about 46 years Smt. Sujaya Basavaraj, Major W/o. Late B.V.Basavaraj Dr. Sunil Basavaraj, S/o. B.V.Basavaraj, Aged about 56 years, 3 All are R/o. No.004, ‘F’ Block, Adarsha Palace 47th Cross, 5th Block, Jayanagar. Bangalore-560041. (Appellants amended vide order dated 22.2.2016) (By Sri. T.B.Kiran Kumar, Advocate) AND1 K.L.Kumaraswamy, Major S/o. Lakshminarayana Shetty. Propritor, Sri. Lakshmi Traders, No.36, New Tarugapet, Bangalore-560002. …Appellants …Respondent (By Sri. M.R.Vijaya Raghavan, Advocate) This RFA is filed under Section 96 of CPC, against the in judgment and decree dated 01.04.2011 passed O.S.2875/1996 on the file of the XXV-Additional City Civil Judge, Bangalore, dismissing the suit for the possession. These Regular First Appeals coming on for hearing this day, the court delivered the following: These two appeals arise from the common
JUDGMENTjudgment in the suits O.S.1977/1996 and O.S.2875/1996 on the file of XXV Additional City Civil Judge, (CCH23), Bengaluru. R.F.A.1165/2011 is 4 preferred by the legal representative of the first defendant in O.S.1977/1996. RFA11662011 was filed by the plaintiff in O.S.2875/1996 and after his death, his legal representatives came on record.
2. For the sake of convenience, throughout the discussion, the parties will be referred with respect to their position in O.S.1977/1996. In a nutshell, the pleadings in both the suits are as follows :
2. 1. O.S.1977/1996 is a suit for specific performance in respect of the entire first floor property bearing old No.J11, new No.17, measuring East to West 64’ and North to South 49’ situated at Vardhamanaiah Block, Shankarapuram, Bangalore City, as described in the plaint schedule (‘suit property’ hereafter). The first defendant-B.V.Basavaraj is the father of the second defendant-Dr.Sunil Basavaraj. The plaintiff is K.L.Kumarswamy. The first defendant is the owner of the entire property consisting of suit property in the 5 first floor and also a house in the ground floor. He acquired the same in a family partition that took place among himself, his father and others. The first defendant’s brother Prabhudev was in occupation of the ground floor house. Out of the entire property, the first defendant sold a portion of it measuring 16 x 49’ to somebody on 8.4.1985. The first defendant was in a financial crunch to educate his son, i.e., the second defendant and to clear of antecedent debts raised on the family property bearing No.65/1, East Anjaneya Temple Street, Bengaluru. To clear of his debts he mortgaged the suit property to the plaintiff for a sum of Rs.1,00,000/- by executing registered mortgage deed on 7.11.1987 and put him in possession of the suit property. It appears that he had also obtained loan from Travancore Bank and one Mr.Chandran. Since the first defendant did not clear the dues of Chandran, he obtained a decree against the first defendant and brought both the properties, i.e., the suit property as 6 also property bearing No.65/1, East Anjaneya Temple Street, Bengaluru, for sale in execution proceeding 427/1986. The first defendant wanted to avert the court sale of the property at East Anjaneya Temple Street as it was very valuable and therefore offered to sell the suit property with proportionate undivided share in the land to the plaintiff for a consideration of Rs.2,40,000/-. In this regard, he executed an agreement of sale in favour of the plaintiff on 15.2.1989 and in terms of the agreement, the plaintiff had to clear the mortgage amount of Rs.1,00,000/- to Chandran, deposit an amount of Rs.1,00,000/- in the court in connection with execution 427/1986 and to pay the balance amount of Rs.40,000/- to the first defendant. The plaintiff complied with this requirement. The first defendant agreed to get the execution case closed by clearing all the dues and execute a sale deed in favour of the plaintiff. The plaintiff was also put in possession of the suit property pursuant to the agreement. 7 2.2. Though plaintiff was always ready and willing to perform his part of the contract having been in possession of the suit property, the first defendant did not show any interest in getting the execution case closed. Instead he set up his son, i.e., the second defendant to file an application under Order XXI Rule 58 CPC; it was registered as miscellaneous proceeding, for determining his rights. The plaintiff entered appearance in the miscellaneous proceeding. The first defendant sensing that his son’s application would not be allowed, sent a notice through his advocate to the plaintiff on 16.2.1996. Thus, realizing that the first defendant was going back upon the agreement, the plaintiff instituted a suit for specific performance. 2.3. The plaintiff amended the plaint to state that the execution petition 427/1986 filed by Chandran came to be closed on 5.2.2002 for full satisfaction of the decree and therefore there was no impediment for the 8 first defendant to execute the sale deed. The Misc. Petition 436/1995 filed by the second defendant against his father, i.e., the first defendant and Chandran in relation to execution 427/1986 was dismissed on merits by order dated 31.3.2005 and therefore the claim that the second defendant had over the suit property came to be determined. Another Misc. Petition 435/1995 filed by second defendant under Order XXI Rule 97 CPC against the decree obtained by Prabhudev, i.e., purchaser of ground floor was also dismissed on 14.9.1995 and it became final. Thus the second defendant lost the right and interest in respect of the ground floor portion also.
3. The first defendant in his written statement denied the plaint averments and contended specifically that in a partition that took place on 6.5.1968, the whole property situate at Shankarapuram was allotted to him, but the partition by metes and bounds did not 9 take place. His younger brother P.V.Prabhudev was in occupation of the ground floor portion of the entire building at Shankarapuram. Actually in the partition he had been given a shop premises situate at New Tharagupete, Bengaluru. The first defendant was in occupation of this shop and after the partition he vacated it so that his brother could take its possession. But, his brother did not vacate the ground floor portion of the house. The first defendant also did not ask him to vacate because his parents were living with his younger brother in that house. In the year 1991, after the shifting of the market yard to Yeshwanthapura, first defendant suffered loss in his business. This resulted in making commitments financially. One such commitment was to clear the dues to the extent of Rs.1,40,000/- with interest at 18@ p.a. in relation to execution case No.427/1986. Being unable to clear the decretal amount, the first defendant sold the ground floor portion of the schedule property to his younger 10 brother Prabhudeva who had its possession already. Then, the first defendant put the plaintiff in possession of the plaint schedule property by mortgaging it to him on 7.11.1987. When he was deliberating whether to sell his house at East Anjaneya Temple Street or to raise new loan in order to satisfy the decree that was put into execution, the plaintiff approached and promised him that he would persuade the decree holder Mr.N.R.Chandran who was also his relative to settle the matter by accepting Rs.1,00,000/- in full and final satisfaction. It was for this reason the plaintiff agreed to make further payment of Rs.1,00,000/- to the first defendant in addition to Rs.1,00,000/- he had already paid at the time of the mortgage of the suit property. It is stated that in this background, the plaintiff persuaded the first defendant to enter into an agreement of sale and thus the agreement dated 15.2.1989 came into existence. The first defendant contended that after obtaining sale agreement, the 11 plaintiff, as promised by him did not prevail upon N.R.Chandran to agree for the settlement. The first defendant therefore contended that he had to execute the agreement of sale in these circumstances; there was a fraud played on him, and the plaintiff used undue influence over him to execute the agreement of sale. It is also pleaded that in the agreement of sale, time up to 15.5.1989 was fixed for completing the transaction. Time was the essence of the contract. Since the plaintiff did nothing pursuant to the agreement, the suit has to be dismissed for this reason and the other reasons stated above.
4. The second defendant in his written statement denied the plaint averments and took up a specific plea that his father did not have independent right to enter into the transaction. The suit property was not his father’s self acquisition and rather it was ancestral and that he also had a definite share in the property. 12 5. In the additional written statement filed by the first defendant pursuant to amendment of the plaint, the first defendant has made a reference to the proceeding OA1891998 pending before the Debt Recovery Tribunal and stated that he was not in a position legally to execute the sale deed in favouf of the plaintiff.
6. The first defendant and the plaintiff in O.S.1977/1996 are the plaintiff and the defendant respectively in O.S.2875/1996. This is a suit for redemption of mortgage dated 7.11.1987 created by the first defendant in O.S.1977/1996 in favour of the plaintiff in the said suit in respect of suit property. The pleadings in O.S.2875/1996 are almost the replica of the pleadings in O.S.1977/1996, therefore they are not referred to here. 13 7. The trial court framed the following issues in both the suits : - ISSUES IN O.S.1977/1996
1) Whether the plaintiff proves that the first defendant as owner of the suit schedule property executed an agreement of sale dated 15.02.1989 thereby agreeing to sell the suit schedule property to the plaintiff for a consideration of Rs.2,40,000/-?.
2) Whether the plaintiff further proves that this agreement of sale was entered into by the first defendant in order to avert sale of suit schedule property in Execution case No.427 of 1986?.
3) Whether the plaintiff proves that he paid the entire amount of sale consideration to 1st defendant as contended in para-3 of the plaint?.
4) Whether the plaintiff proves that he is in possession of the suit schedule property in part performance of the contract?. 14
5) Whether the plaintiff proves that the 1st defendant has set up 2nd defendant and got filed Misc. No.436/95 under Order 21, Rule 58 CPC., with ulterior motive to jeopardize this rights?.
6) Whether the plaintiff proves that he is ever ready and willing to perform his part of the contract?.
7) Whether the 1st defendant proves that the time is the essence of the contract and therefore, the plaintiff has no right to seek specific performance of the contract?.
8) Whether the 1st defendant proves that compensation in terms of money adequate alternative remedy is available to the plaintiff under the agreement dated 15.02.1989?.
9) Whether the plaintiff is entitled to a decree of specific performance as sought for?.
10) Whether the plaintiff is entitled to other reliefs as sought for?. 15
11) To what decree or order?. Additional Issue:
1. Whether the defendant No.1 proves that the suit schedule property is attached by the court in recovery proceedings under the award of the Debt Recovery Tribunal in O.A.No.189/1998?. ISSUES IN O.S.2875/1996
1) Does the defendant prove that he has ceased to be in possession of the schedule property as a mortgagee under the mortgage deed dated 07.11.1987 subsequent to the execution of agreement of sale dated 15.02.1989 by the plaintiff and that his possession is one under Section53- A of the T.P.Act?.
2) Does the defendant prove that the mortgage deed dated 07.11.1987 does not subsist to seek relief of redemption thereof?.
3) Whether the suit deserves to be stayed pending disposal of O.S.1977/1996 filed 16 by the defendant for specific performance of contract under the agreement of sale?.
4) Whether the suit cannot legally maintain?.
5) What decree/order the parties are entitled to?.
8. Common evidence was recorded in both the suits. The plaintiff in O.S.1977/1996 adduced evidence as PW1 and also examined two more witnesses PWs 2 and 3. They got marked 24 documents as per Exs. P1 to P24. The defendants in O.S.1977/1996 adduced evidence as DWs1 and 2 by getting marked 22 documents Exs. D1 to D22. After appreciating the evidence, the trial court decreed the suit O.S.1977/1996 and dismissed the suit O.S.2875/1996. The following are the findings of the trial court : - 8.1. Ex.P1 is the agreement of sale dated 15.2.1989. With regard to this agreement, though the first defendant admits to have executed it, he also 17 contends that he executed the said agreement towards security for the loan and that the plaintiff obtained the said document by defrauding him. The second stand of the first defendant cannot be upheld in view of a notice got issued by the first respondent to the plaintiff as per Ex.P2. In this notice it is clearly stated that the plaintiff was not ready to perform his part of the contract within time stipulated in the agreement. Therefore, the clear inference can be drawn that the first defendant executed the agreement voluntarily. 8.2. With regard to readiness and willingness of the plaintiff to perform his part of the contract, it has been held that after execution of the agreement in the year 1989, the plaintiff did not issue legal notice to the first defendant to perform his part of the contract, but only replied to the notice issued by the first defendant. In Ex.P1 three months’ time was fixed for the completion of the sale transaction; The contention taken 18 by the first defendant that the time was the essence of the contract cannot be upheld because the contract was with respect to immovable property. There is nothing on record to infer that the parties meant the time to be the essence of the contract. In the facts and circumstances it can also be said that the suit was not time barred though suit was filed nine years after the date of execution of the agreement. The defendant No.1 admits that out of sale consideration of Rs.2,40,000/-, Rs.1,00,000/- was adjusted towards the mortgage amount due to him and that the plaintiff deposited an amount of Rs.1,00,000/- in the execution case initiated by Chandran. The amount due was only Rs.40,000/-. The plaintiff should have paid this amount within three months and obtained the sale deed as stipulated in the agreement. But, the conduct of both the parties in the light of pendency of execution of 427/1986 would assume importance. In the said execution case the suit property had been attached. Though defendant No.1 19 sought permission of the court for private sale, the execution case was closed for full satisfaction in the year 2002. Ex.P7 shows that the attachment was raised and properties were released from attachment in February 2002. In Ex.P1 there are certain conditions that the first defendant has to clear all the encumbrances to clear further. There is nothing in evidence to show that the first defendant performed his obligations according to the stipulations of the agreement. In view of these circumstances, if the plaintiff did not call upon the first defendant in writing, it cannot be said that he was not ready and willing to perform his part of the contract. His failure to show payment of Rs.40,000/- is not a ground to say that he was not ready and willing. 8.3. As regards the discretionary power of the court to grant the relief of specific performance, it has been held that the first defendant failed to prove that 20 the time was essence of the contract and that the clauses found in the agreement with regard to extension of time in certain contingencies or forfeiture of earnest money in case of failure by the purchaser, his part of the contract would not render the agreement ineffective. It is the clear admission of DW1 in the cross- examination that the plaintiff had no other property of his own and that his business place was near to the suit property. The plaintiff entered into an agreement with the first defendant for the purpose of having residence for him and his family. The defendants will not be put to disadvantageous position if the decree of specific performance is granted. The facts and circumstances do not show that the granting of compensation would be adequate and alternate remedy for the plaintiff. For these reasons, the plaintiff would be entitled to decree for specific performance. 21 8.4. With regard to relief of redemption as sought in O.S.2875/1996 it is held that execution of the agreement as per Ex.P1 is admitted by its executor. The mortgage amount of Rs.1,00,000/- has also been adjusted in the consideration amount. The mortgage ceased to exist soon after coming into being of agreement of sale. The plaintiff is found to be entitled to a decree for specific performance and therefore O.S.2875/1996 cannot be decreed.
9. Assailing the findings of the trial court, the learned counsel for the appellant/first defendant argued that the court below appears to have lost sight of the fact that in execution 427/1986, the court granted permission for private sale of the suit property. When private sale was permitted, coming to the conclusion that since attachment was raised only in the year 2002 and till then the plaintiff could not have instituted a suit for specific performance is erroneous. In the facts and 22 circumstances, especially when the court fixed four months time for completing the sale transaction, time was essence of contract. The suit having been filed after a lapse of nine years was time barred. The trial court should have taken this aspect into consideration. 9.1. The finding of the trial court that the plaintiff was ready and willing to perform his part of the contract is also not sustainable. The plaintiff never demanded the execution of the sale deed till the first defendant got issued a notice to him as per Ex.P2. Ex.P3 is a reply to Ex.P2 and in this reply notice the plaintiff demanded for execution of the sale deed. Moreover, in the plaint he has stated that the balance of Rs.40,000/- was paid by him. This balance was not paid at all and in the cross- examination PW1 admits that he has not paid this amount. This shows that the plaintiff did not approach the court with clean hands. The plaintiff took a false plea of having paid the balance of Rs.40,000/-. These 23 aspects should have been considered by the trial court to hold that the plaintiff was not ready and willing to perform his part of the contract. 9.2. The conduct of the plaintiff in keeping quite for about nine years without enforcing the agreement should have been given importance. These latches on his part can be a good ground for denying the relief of specific performance. While exercising discretion, the court should have considered this aspect of the matter. Non-appreciation of evidence in this perspective has resulted in suit for specific performance being wrongly decreed in favour of the plaintiff. 9.3. The first defendant paid the mortgage money of Rs.1,00,000/- to the plaintiff. In fact this amount was adjusted from the consideration amount. Ex.P2- notice was issued by the plaintiff seeking redemption of mortgage. Having found that the entire mortgage money stood repaid, the court should not have 24 dismissed the suit for redemption only on the ground that after the execution of the agreement the mortgage came to an end. Here are circumstances which compel the denial of the relief of specific performance and granting the decree for redemption of mortgage. Urging these points, the learned counsel argued that both the appeals are required to be allowed.
10. The learned counsel for the respondent in both the appeals argued that the suit property was allotted to Basavaraj at a partition. It was his self acquired property. For this reason, his son, i.e., second defendant in the suit for specific performance did not get any right. The agreement executed by Basavaraj was therefore valid and he had all the right to sell the property. In this regard, he referred to the reported decisions in the cases of SMT. SHAKUNTALA MALLIKARJUNA BALIKAI & OTHERS vs BASAVARAJ BASAVANNEPPA SIRIGERI AND OTHERS [2017 (2) 25 AKR209 UTTAM vs SAUBHAG SINGH AND OTHERS (2016) 4 SCC68AND MRS. MALLIKA AND OTHERS vs MR. CHANDRAPPA AND OTHERS ILR2007KAR3216 10.1. With regard to readiness and willingness, it was his argument that the plaintiff in O.S.1977/1996 was always ready and willing to perform his part of the contract. He had paid major part of the amount agreed to be paid towards sale consideration. The evidence on record would show that he was ready to pay the balance amount also. Only because the agreement contains some clauses with regard to paying damages or forfeiting the earnest money, it cannot be said that the contract was not enforceable. Moreover the plaintiff had been put in possession of the suit property pursuant to the agreement. Time was not essence of the contract. The trial court has come to right conclusion that plaintiff was ready and willing to perform his part of the 26 contract. In fact, the defendant in the suit has taken up some pleas that are untenable. On this ground also, the plaintiff becomes entitled to decree for specific performance. On these points he referred to the judgments in the cases of N.HANUMANTHARAYA vs SMT. MARIYAMMA AND OTHERS [2008 (1) AIR KAR R446; MOTILAL JAIN vs RAMDASI DEVI (SMT) AND OTHERS [(2000) 6 SCC420 P.D’SOUZA vs SHONDRILO NAIDU AIR2004SC4472AND SILVEY AND OTHERS vs ARUN VARGHESE AND ANOTHER [AIR2008SC1568. 10.2. On the point of limitation for the suit for specific performance, it was the argument of the learned counsel that though in the agreement, time has been fixed for performance, it has to be understood in the context of the obligations undertaken by the respective parties. The rule is that with respect to immovable property time is not essence of the contract. In this 27 case also, the said rule is very much applicable. If according to the first defendant, time was essence of the contract, he did not get the attachment over the suit property raised in the execution case which was closed for full satisfaction in the year 2002. This being the state of affairs, the parties did not mean that time was essence of the contract. Therefore, the starting point of time was the date of refusal by the first defendant to execute the sale deed. The suit was filed within the time limit after issuing reply notice as per Ex.P3. In this regard he referred to the reported decisions in BALASAHEB DAYANDEO NAIK (DEAD) THROUGH L.RS & OTHERS vs APPASAHEB DATTATRAYA PAWAR [AIR2008SC1205; SMT. SARASWATHAMMA vs H.SHARAD SHRIKHANDE AND OTHERS [AIR2005KAR292; H.M.KRISHNA REDDY vs H.C.NARAYANA REDDY [ILR2001KAR3870 AND SHRIKRISHNA KESHAV KULKARNI & OTHERS vs 28 BALAJI GANESH KULKARNI AND OTHERS [AIR1976BOM342. 10.3. His last point of argument was that the right of redemption that was available to the first defendant ceased to exist the moment an agreement of sale was executed. The first defendant admits in the cross-examination that mortgage money had been adjusted in the sale consideration amount. The subsequent contract between the parties resulted in extinguishment of the right of redemption. Therefore, the trial court rightly dismissed the suit for redemption also, and that both appeals deserve dismissal.
11. Before formulating the points for discussion, it is necessary to state here that in a suit for specific performance filed by the purchaser against the seller, question of ownership over the property doesn’t assume importance because if the purchaser is ready to 29 purchase the property from a person with defective title, he runs the risk of it. Whereas, same is not the position if the suit is filed by the seller against a purchaser or lessor against a lessee. Section 17 of the Specific Relief Act reads as below : - “17. Contract to sell or let property by one who has no title, not specifically enforceable.— (1) A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor— (a) who, knowing not to have any title to the property, has contracted to sell or let the property; (b) who, though he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt. (2) The provisions of sub-section (1) shall also apply, as far as may be, to 30 contracts for the sale or hire of movable property”. Language of the section is very clear. Here, the suit is filed by purchaser against seller. It is not necessary to discuss the point raised by the learned counsel for the respondent that the suit property was exclusive property of the first defendant, by referring to judgments in the case of Smt. Shakuntala Mallikarjuna, Mrs. Mallika and Uttam (supra). Therefore, the actual points that arise for consideration in these appeals are as follows :- (i) (ii) Has the trial court correctly held that suit for specific performance O.S.1977/1996 is not time barred?. Has the trial court come to correct conclusion that the plaintiff in O.S.1977/1996 was ready and willing to perform his part of the contract?. Aren’t 31 the findings of the trial court on issues 3 and 6 in O.S.1977/1996 conflicting with each other?. (iii) Can the plaintiff in O.S.2875/1996 claim redemption of mortgage if the suit for specific performance fails?. (iv) Whether the judgment of the trial court needs to be interfered with?. If so, what order?. Point No.(i):- 12. According to Article 54 of the Limitation Act, a suit for specific performance has to be filed within three years from the date fixed for performance, or if no such date is fixed, the time has to be calculated from the date when the plaintiff has notice of refusal of performance. There are two parts for reckoning the date of commencement of limitation period. If the time is essence of the contract, the suit has to be filed within 32 three years from the date fixed for performance, which comes within the first part. If no date is fixed, limitation period has to be calculated according to the second part. Ex.P1 is the agreement of sale. Clause 5 of the said agreement reads as below : - “The purchase shall be completed on or before 15.5.1989 by the purchaser by paying the balance price and the vendor executing the sale deed”. Going strictly by this clause, it appears that a date had been fixed for completion of the entire sale transaction and therefore the suit should have been filed within three years from 15.5.1989 and thus the suit filed in the year 1996 can be said to be time barred. But the general rule with respect to immovable property is time is not essence of the contract. Here are circumstances which show that both the parties did not mean the time to be essence of the contract. 33 13. Admittedly, in the execution case 427/1986, the first defendant who was a judgment debtor, was given permission to sell the suit property for clearing the debts of Chandran. It appears that the court exercised the power according to Order XXI Rule 83 CPC. In this background, the agreement, Ex.P1, between the plaintiff and the first defendant came into existence. A direction was given to the first defendant to deposit the money in the court after selling the suit property. But, in terms of the agreement, the plaintiff was permitted to adjust Rs.1,00,000/- towards his mortgage money and to deposit Rs.1,00,000/- in the court for being paid to Chandran who was the decree holder. The counsel for the respondent argued that the court gave four months’ time for completion of the sale transaction and this was the reason for stipulating the time period in the agreement up to 15.5.1989 for completion of the suit transaction. Whenever court grants permission under Order XXI Rule 83 CPC34authorizing the judgment debtor to sell, mortgage or lease the property privately for satisfying the decretal amount, such a transaction shall not become absolute until it is confirmed by the court. It appears that such a confirmation was not made by the court and even the first defendant appears to have not applied for confirmation because the sale deed was not executed. However the execution was kept pending even after deposit of Rs.1,00,000/- in the court. Therefore, in a situation like this, if the sale transaction was not at all completed and neither of the parties showed interest in spite of there being specific order of the court that the sale transaction should be completed within four months, it can only be said that they did not take the time factor seriously. Consciously, they gave a go-by to it.
14. If according to the first defendant time was essence of the contract, it was for him to have called 35 upon the plaintiff within the time stipulated in the agreement to get the sale deed executed from him stating that he was ready to execute it. He did not do it. It was only in the year 1996 that he issued a notice as per Ex.P2 seeking redemption of mortgage. In Balasaheb Dayananda Deo Naik (supra), there is a reference to the judgment in the case of Ramachandran (Smt.) and Another vs Aravacode Chakungal Jayapalan, [(2004) 8 SCC689 where it is held as below : - “12. That time is presumed not to be of essence of the contract relating to immovable property, but it is of essence in contracts of reconveyance or renewal of lease. The onus to plead and prove that time was the essence of the contract is on the person alleging it, thus giving an opportunity to the other side to adduce rebuttal evidence that time was not of essence. That when the plaintiff pleads that time was not of essence and the defendant does not deny it by evidence, the 36 court is bound to accept the plea of the plaintiff. In cases where notice is given making time of the essence, it is duty of the court to examine the real intention of the party giving such notice by looking at the facts and circumstances of each case. That a vendor has no right to make time of the essence, unless he is ready and willing to proceed to completion and secondly, when the vendor purports to make time of the essence, the purchaser must be guilty of such gross default as to entitle the vendor to rescind the contract.” Therefore, from the conduct of the first defendant, it can be said that he did not adhere to the time limit.
15. The learned counsel for the respondent/first defendant has referred to the judgment of the Supreme Court in the case of AHMADSAHAB ABDUL MULLA (DEAD) BY PROPOSED LRS VS BIBIJAN AND OTHERS [(2009) 5 SCC462 in support of his argument that the suit for specific performance was time barred. The 37 Hon’ble Supreme Court has elaborately dealt with the meaning of the expression ‘date fixed for the performance’. In paras 11 & 12 it is held as below :- “11. The inevitable conclusion is that the expression `date fixed for the performance' is a crystallized notion. This is clear from the fact that the second part "time from which period begins to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on `when the plaintiff has notice that performance is refused'. Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances.
12. Whether the date was fixed or not the plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and 38 evidence to be brought on record. The expression `date' used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. We answer the reference accordingly. The matter shall now be placed before the Division Bench for deciding the issue on merits.” 16. The learned counsel for the respondent referred to the above judgment probably in the context that in the agreement of sale, a date for completion of the sale transaction is mentioned and therefore from that date suit should have been filed within three years from that date. If evidence on record discloses that either side parties adhered to the given date, situation would have been different; it could have been held that time was essence of the contract. As nothing of that sort can be seen in this case, suit filed after issuance of reply as per Ex.P3 cannot be held to be time barred. The trial court’s conclusion deserves to be upheld. Point No.(i) is therefore answered in affirmative. 39 Point No.(ii):- 17. It is very specific plea of the plaintiff that entire sale consideration of Rs.2,40,000/- has been paid; and that he is ready to perform his part of the contract. An amount of Rs.40,000/- was due to be paid by the plaintiff, and he has stated that this money was also paid by him. But, the first defendant has denied this. The trial court has held that there is no evidence to hold that the plaintiff had made payment of this money. This finding of the trial court is correct, as the plaintiff, i.e., PW1 clearly admits in the cross- examination that he has not produced any document to show payment of amount of Rs.40,000/- although he denies the suggestion that an amount of Rs.40,000/- was not paid by him to the first defendant. If he had paid it, he should have provided proof; mere denial of suggestion has no value. Hence, inference to be drawn is that Rs.40,000/- was still due by him. But, the trial 40 court, having given a finding on issue No.3 in negative, has answered issue No.6 in affirmative. On issue No.6, its findings are that according to the terms of Ex.P1, the defendant No.1 was supposed to clear all the encumbrances, that he was also supposed to give information in writing to the second party, i.e., the plaintiff after obtaining necessary certificates from the competent authorities, that he should have assured the plaintiff that the property was not the subject matter of any dispute or court attachment, that Ex.P7 would show that the suit property was attached in an execution case and that the attachment was raised in February 2002 and that defendant No.1 has not placed any evidence for having performed his obligations under the contract. Therefore, the trial court came to the conclusion that failure to prove payment of Rs.40,000/- by the plaintiff is not sufficient to hold that the plaintiff was not ready and willing to perform his part of the contract. 41 18. The above findings of the trial court are perverse and do not stand to reason. According to Section 16(c) of the Specific Relief Act the burden is on the plaintiff to prove that he is ready and willing to perform his part of the contract. The findings of the trial court are as such that some failures of the defendants are considered to lean in favour of the plaintiff, i.e., to answer issue No.6 in affirmative. The trial court appears to have lost sight that the executing court accorded permission for private sale. Once the executing court grants permission in accordance with Order XXI Rule 83 CPC, subsistence of attachment in an execution case does not come in the way of execution of the sale deed. The clauses or the conditions as aforementioned found in the agreement should not have been given undue importance. The application made by second defendant under Order XXI Rule 58 CPC and pendency of execution case till 2002 were not obstacles for enforcing the agreements. The approach of the trial 42 court should have been to examine whether the plaintiff was and has been ever ready to perform his part of the contract.
19. In the case on hand the total sale consideration agreed to be paid was Rs.2,40,000/-. Rs.1,00,000/- was deposited in the executing court for being paid to decree holder Chandran. Another Rs.1,00,000/- was adjusted from the sale consideration in relation to mortgage money payable to the plaintiff. Rs.40,000/- was due and the remaining part to be performed by the plaintiff was to make payment of this Rs.40,000/- to the first defendant to get the sale deed executed. The learned counsel for the respondent/plaintiff has relied upon the judgment of the Supreme Court in the case of MOTILAL JAIN VS RAMDASI DEVI AND OTHERS [(2000 (6) SCC420 in support of his argument that if major portion of the consideration (two-thirds) was paid at the time of 43 execution of the contract, willingness on the part of the plaintiff to pay the remaining amount is apparent. Reliance is also placed on another decision of this court in the case of HANUMANTHARAYA vs SMT. MARIYAMMA AND OTHERS20081) AIR KAR R446 in fortification of the argument that since possession was allowed to be continued by the plaintiff on the basis of agreement also, there remained nothing to be performed from the plaintiff’s side.
20. The above two decisions do not help the plaintiff. Indeed the plaintiff did make payment of Rs.2,00,000/-; but in regard to the balance of Rs. 40,000/-, he has taken a false plea of having paid that amount also. It is not his case that he is due to pay Rs.40,000/- and that he is ready to pay that amount also. Had he pleaded like that, the ratio in Motilal Jain could have strengthened his case. The learned counsel for respondent has referred to another 44 judgment of Supreme Court in SILVEY AND OTHERS vs ARUN VARGHESE AND ANOTHER (AIR2008SC1568 on the point of argument that false plea raised by defendant benefits the plaintiff, rather it can be conversely applied to disbelieve the plaintiff’s plea and assertion of his being ready and willing to perform his part of the contract. The judgment of this court in Hanumantharaya does not help plaintiff as in that case plaintiff had made full payment having been put in possession of the property in part performance of the contract. In the case on hand, there is no evidence for full payment.
21. Another circumstance that goes against the plaintiff is inordinate delay in approaching the court. It was only when the plaintiff replied as per Ex. P3 to first defendant’s notice, Ex. P2, that he would demand performance of the contract. It was within his knowledge that the executing court had granted 45 permission for private sale; no more clearance was necessary. He has offered no explanation for the delay. The argument of respondent’s counsel is that this delay cannot be a reason for non-suiting the plaintiff as time was not essence of the contract. No, this analogy cannot be applied; while delay reflects on the conduct of the plaintiff, to be more clear it is indicative of his unwillingness; the concept of time being essence of the contract is decisive of period of limitation prescribed for the suit though both are interwoven.
22. In this aspect, the learned counsel for appellant, has referred to some reported decisions, SURYGANDHI vs LOURDUSWAMY (AIR2004MAD8 and SMT. RAJ RANI BHASIN AND OTHERS vs. S. KARTAR SINGH MEHTA (AIR1975DEL137. Therefore, delay in filing the suit disproves plaintiff’s plea of being ready and willing to perform his part of contract. The trial court’s findings on issues 3 and 6 46 are conflicting. The evidence on record shows that the plaintiff was not ready and willing to perform his part of the contract. Therefore first part of the point is answered in negative and the second part in affirmative. Point No.(iii) :- 23. It is not disputed that the plaintiff was put in possession of suit property when it was mortgaged to him. Subsequently, when the agreement of sale came into existence, he was allowed to continue the possession in part performance of the agreement. The plaintiff claims protection under Section 53A of Transfer of Property Act. Whether the plaintiff can seek protection under Section 53A is the question. For claiming protection under this Section, the essential ingredients to be satisfied are : - (i) the agreement must be in writing signed by the person intending to transfer an immovable property; the terms necessary to 47 constitute transfer being capable of ascertainment with reasonable certainty; and (ii) the transferee, having taken possession of the immovable property must do an act in furtherance of the contract, and (iii) the transferee has performed or is willing to perform his part of the contract. As the above conditions are conjunctive and not disjunctive, there must be strict compliance of all the conditions, not any one of them. In the case on hand, no doubt the first two conditions are satisfied, but so far as the last condition is concerned, it is evident that he had not performed his part of the contract. His conduct is as such that he was unwilling to perform his part of the contract. For this reason he cannot claim right under Section 53A of Transfer of Property Act. Once a suit for specific performance has to fail for plaintiff 48 being not ready and willing to perform his part of contract, whether the suit for redemption filed by first defendant can be decreed?.
24. Section 60 of the Transfer of Property Act confers a statutory right on the mortgagee to redeem the mortgaged property. It can be exercised by the mortgagor any time after the principal amount becomes due. Upon making payment or tendering of that money, the mortgager has a right to require the mortgagee to deliver to him the mortgage deed and all documents relating to the mortgaged property, the possession of the property retransfer the mortgaged property to him or to any third person whom he directs and execute an instrument (in case of registered mortgage) extinguishing the right of mortgagee. This right has been qualified, the proviso to Section 60 of Transfer of Property Act states that subsequent act of the parties or decree of a court extinguishes the right of redemption. 49 25. In the instant case, mortgage between the parties was registered; and there came into existence an agreement Ex.P1 between the parties. No doubt this agreement dated 15.2.1989 was a subsequent act. But it was not a completed sale transaction. This agreement did not extinguish the right of redemption. ‘Subsequent Act’ contemplated is the one which results in taking away the right of mortgagor to claim redemption, for instance sale or release, etc., In this case since there was no completed sale, as it was just an agreement, the right of the mortgagor did not extinguish.
26. The mortgage money of Rs.1,00,000/- payable to the plaintiff was, admittedly adjusted from sale consideration amount. The suit for specific performance has failed. The first defendant issued a notice to plaintiff as per Ex.P2 to enforce right of redemption. Where the circumstances are as such that the plaintiff is not entitled to decree for specific 50 performance, necessarily the suit property must revert back to the first defendant. The right and title of the first defendant over suit property should not remain in vacuum. Though the plaint in O.S.2875/1996 is not in conformity with form 46 of Appendix ‘A’ of CPC, it can be decreed, as mortgage money has been paid. Therefore, this is answered in affirmative. Point No.(iv):- 27. In view of the discussion on points (ii) and (iii), the judgment of the trial court cannot be allowed to stand. The trial court has not discussed the intrinsic legal issues. Therefore, both the appeals have to be allowed. In a suit for specific performance, refund of earnest money cannot be ordered unless it is specifically claimed according to Section 22 of the Specific Relief Act. In the case of hand, the plaintiff has not sought refund of Rs.1,00,000/- that he paid to the decree 51 holder Chandran from the agreed sale consideration amount. Though he has not claimed or sought refund of earnest money specifically, the alternative relief that he has claimed is as follows : - “granting to the plaintiff such other reliefs or other consequential or alternate reliefs that may arise in the suit as this Hon’ble court may deem fit under the circumstances of this suit”. The alternative relief the plaintiff has thus claimed may be construed as one sought under Section 22 of the Specific Relief Act and refund of Rs.1,00,000/- to him may be ordered with reasonable interest calculated from the date of suit. I am of the opinion that the interest @ 6% p.a. on the amount of Rs.1,00,000/- may be granted to meet the ends of justice.
28. In the suit for redemption filed by first defendant, there is no need to order for preliminary decree since the principal amount was paid long back. 52 No subsequent interest is also payable on the amount as on the date of agreement principal amount was paid. The first defendant is only entitled to possession of suit property, execution of redemption deed at his cost and delivering up of the documents (if any) relating to suit property. With this discussion, the following order: - (a) Both the appeals are allowed with costs. (b) The judgment of the trial court in O.S. No.1977/1996 is modified. (c) Suit with respect of specific performance is dismissed. Alternatively, it is held that the plaintiff is entitled to refund of Rs.1,00,000/- along with interest @ 6% p.a from the date of suit till the date of realisation. (d) O.S. No.2875/1996 is decreed. The plaintiff is entitled to redeem the mortgage of the suit property that he mortgaged on 7.11.1987 with the plaintiff. The plaintiff is hereby 53 directed to execute the instrument of redemption at the cost of the first defendant and deliver the possession of the suit property to the first defendant within six months from the date of judgment. The plaintiff is also directed to return all the documents relating to suit property if any to the first defendant. Sd/- JUDGE ckl