Shivashankar Bhat, J.
1. The Appeal is by the first defendant, in a suit filed by the 1st respondent herein for specific performance of an agreement of sale. Plaintiff and 1st defendant entered into an Agreement of Sale on 26.5.1980, whereby, the 1st defendant agreed to sell and plaintiff agreed to purchase a property situated in Bangalore. 1st defendant was already in possession of residential portion of the property; the front portion has two shops which were then tenanted by others. The consideration for sale was Rs. 90,000/- out of which a sum of Rs. 10,000/- was paid by the plaintiff at the time of the agreement (Ex.D1). The plaintiff agreed to pay the balance sum of Rs. 80,000/-within six months from the date of the agreement i.e., on or before 26.11.1980; the agreement stated that 1st defendant agreed to sign the sale deed after receiving this balance amount. The plaintiff had to bear the expenses of the sale deed. Plaintiff was already in possession of the house as a tenant and he had to take possession of the two shop portions from the tenants after the sale of the property and it was not for the 1st defendant to handover the possession of those shops to the plaintiff. The agreement, further stated that if plaintiff failed to register the property as per the terms of the agreement 1st defendant could forfeit the advance amount of Rs. 10,000/-. If 1st defendant, after receiving the balance amount of Rs. 80,000/- from the plaintiff 'fails to get the property registered' in favour of the plaintiff, plaintiff was entitled to get the property registered through Court of law. On 25.11.1980, an endorsement was made, by the executants, that the agreement provided for the performance on 26.11.1980, but it was not possible to complete the. Sale Deed and hence they have agreed to extend the period by two months; the sale agreement had to be completed by 25.1.1981. Again, the date was extended in view of an injunction order of the Civil Court issued in O.S. 10452/1980; the extended period was further extended by subsequent endorsements. The last endorsement resulted in extending the date of completion till 24.10.1981. The agreement was executed and these endorsements were made at Salem, where the 1st defendant has been residing.
2. The plaint refers to the agreement and thereafter states that the first endorsement extending the time came to be made as desired by the first defendant 'in spite of the fact that the plaintiff was and has been always ready and willing to perform his part of the contract'. It also refers to the suit filed by the second defendant against the first defendant as per O.S.10452/1980 wherein the second defendant obtained an order of temporary injunction against the sale, claiming that he was entitled to enforce the oral contract under which the first defendant agreed to sell the property to the second defendant. In view of this order of temporary injunction, the time to complete the agreement in question (Ex,D1) had to be extended. The plaint further refers to the application filed by the first defendant in the suit O.S. No. 10452/80 (hereinafter referred to as 'the other suit) seeking the vacating of the order of injunction, This I.A. was rejected and consequently the first defendant filed an appeal before the High Court which was allowed resulting in the vacating of the temporary injunction on 16.2.1984. The plaint further asserts that immediately on 22.2.1984 first defendant issued a notice to the plaintiff informing of the said order of the High Court and calling upon the plaintiff to take from the first defendant the sale deed to which plaintiff replied by a telegram that he was ready and willing to execute the sale deed and further wrote a letter as to when the first defendant would arrive at Bangalore from Salem to enable the plaintiff to keep himself ready to complete the transaction. However, there was no response thereafter from the first defendant. Therefore, the plaintiff asserts that he sent a letter on 23.8.1984 with a copy to the Advocate, calling upon her to perform her part of the contract and expressing the plaintiff's readiness and willingness to perform the contract. The plaint further refers to the various letters and also refers to interrogatories delivered in the other suit to the first defendant by the second defendant, the second defendant being the plaintiff in the other suit. According to the plaintiff, the reply given by the first defendant to the interrogatories, indicated her different attitude from the one expressed in the contract in question, after asserting that the plaintiff is ready and willing to perform his part of the contract and asserting that the first defendant avoided to execute the Sale Deed.
3. The first defendant pointed out that the present plaintiff was impleaded as a second defendant in the other suit at the instance of the first defendant. Further it is stated that the second defendant has been offering Rs. 1 lakh for the suit property if possession was given to him after evicting the tenants and it is in these circumstances the plaintiff who knew about the said offer earns forth to purchase the property for Rs. 90,000/- which resulted in the agreement in question. However the agreement had to be completed within six months by payment of Rs,80,000 by the plaintiff to the first defendant (already Rs. 10,000/- having been paid at the time of the agreement); but the first defendant could not pay the amount and therefore the time to complete the agreement was extended by an appropriate endorsement on the agreement. This written statement further states that the plaintiff was already in possession of a substantial part of the property and had agreed to take possession of other portion from the tenants at his own risk and all that was left for the first defendant was, only to sign the sale deed at Salem and authorise the Plaintiff or his Agent to have the sale deed registered. The first defendant had obtained the requisite Income tax clearance Certificate by 15,11.1980 to enable the execution of the sale deed. According to the first defendant the balance sum of Rs. 80,000/- was to be payable to her at Salem and her signature had to be taken on the sale deed after the plaintiff got it prepared at his cost. She also pointed out that first defendant had not the necessary funds with him and was seeking extension. According to her there was a collusion between the plaintiff and the second defendant and the plaintiff made the second defendant to file the other suit and got an order of interim injunction, so that the plaintiff can gain time to arrange for the funds. She further stated that the present plaintiff who was a party to the other suit did not take any step to have the temporary injunction vacated and it was the first defendant who filed an application and thereafter filed an appeal before the High Court in that connection. Inaction of the plaintiff in this regard itself indicated the unwillingness of the plaintiff to perform his part of the contract Immediately on the appeal was allowed and the temporary injunction vacated, the first defendant issued a notice to the plaintiff calling upon him to execute the sale deed after making the payment, within a week from the receipt of the notice. It was further stated that, at the time of the agreement the value of the properly was more than Rs. 1 lakh and on the date of the written statement it was worth over Rupees five lakhs. The contract, if, performed after a lapse of over four and a half years, would result in hardship and prejudice to the first defendant. It is unnecessary to refer to the written statement of the second defendant.
4. The trial Judge framed the following issues:
'1. Was time the essence of the suit agreement of sale?
2. Does the plaintiff prove that he was and he is ready and willing to perform his part of the suit agreement?
3. Does the defendant prove that the balance of sale consideration under the suit agreement had to be paid and the first defendant had to execute the sale deed at Salem?
4. Has the suit agreement became void and is operative on the ground that the plaintiff had not performed his part of the contract within the time stipulated in the notice dated 22.2.84, issued by the first defendant, i.e., on or before 29.2.1984?
5. Is the 2nd defendant a necessary or proper party to the suit?
6. Is the suit property worth more than one lakh on 26.5.80 and is worth over Rs. 5 lakhs now and if so, is the same sufficient to perform specific performance of the suit agreement to sale as being inequitable?
7. Does the plaintiff prove that the defendant has failed to perform her part of the agreement for sale?
8. Does the plaintiff prove that the defendant has failed to perform her part of suit agreement for sale?
9. Has the plaintiff sustained damage and that to an extent of Rs. 4,000/- because of first defendant not performing her part of the suit agreement for sale?
10. Does the 2nd defendant prove that the first defendant had entered into an oral agreement of sale in favour of the 2nd . defendant in respect of the suit schedule property and that suit agreement of sale does not affect the right of the 2nd defendant under the oral agreement of sale?
11. Is the plaintiff entitled to a decree for specific performance of the suit agreement against the 1st defendant?
12. Is the plaintiff entitled to damages from the defendant of Rs. 4,000/- or of any other amount?
13. What relief, if any, is the plaintiff entitled to?'
It should be noted here that the suit filed by the present second defendant was also clubbed with the present suit. There was a common trial and a common judgment. However, the learned trial Judge has dismissed the other suit filed by Mariappa. It is in these circumstances the present plaintiff was ranked as D.W.2 and the first defendant was examined as D.W.1. P.W.1 was Mariappa. These designations of the witnesses will be necessary while appreciating some of the observations hereinafter.
5. The trial Judge dismissed the suit of Mariappa on the ground that the agreement pleaded by him was not proved. There is no appeal against the said dismissal and the matter stands concluded. A perusal of the judgment of the trial Court shows that the learned trial Judge missed issue No. 3 though para 24 of the judgment refers to issues 1 to 8. The learned trial Judge states that the only dispute between the parties is as to whether the plaintiff in this case was not ready and willing to perform his part of the contract and as to whether the defendant has committed breach of contract. Time was held to be not the essence of the contract. The four endorsements made in the agreement, Ex.D1, nowhere mentions the inability of the plaintiff to perform his part of the contract and therefore it cannot be inferred that he was not in a position to perform his part of the contract. Further, till 16th February 1984 there was an order of temporary injunction against the execution of the sale deed by the first defendant, Since in several letters the plaintiff had expressed his readiness and willingness to perform his part of the contract, the learned Judge accepted the same to be true. Ex.D9 is referred as a notice issued by the plaintiff to the first defendant, dated 14.9.1984. In fact Ex.D9 dated 14.9.1984 was issued to the plaintiff on behalf of the first defendant. There is another obvious error in the judgment of the trial Court when it says that according to the first defendant the value of the property was more than Rs. 5 lakhs on the date of agreement of sale; actually the written statement of the first defendant stated that this was the value of the property as on the date of the written statement, while the value on the date of the agreement was Rs. 1 lakh. This error has resulted in the following observation:
'.... Therefore, there is no merit in the contention that the value of the property was more than Rs. five lakhs on the date of the agreement and that the first defendant put to hardship if an order of specific performance is passed.'
Trial Court said, that since the first defendant is a resident of Salem having settled in the said place no undue hardship would result to her by an order of specific performance of the agreement.
6. In fact the discussion of the trial Court on the issues between the parties actually starts, regarding the present issues, only from para 24 onwards.
7. Having heard the learned Counsel for both the parties we are of the view that the following Questions arise for our Consideration:
(1) Has the plaintiff proved that he has been ready and willing to perform his part of the contract?
(2) Do the circumstances justify the exercise of the discretion against making an order for specific performance of the contract?
8. Both the Questions would be considered together having regard to the nature of the material on record.
9. The Agreement (Ex.D1) in question is actually in Tamil and the four endorsements are also in Tamil. An English translation has been furnished to the Trial Court in respect of which there is no dispute.
10. The Ex.D1 recites that the plaintiff paid a sum of Rs. 10,000/- as advance and that he agreed to pay the balance of amount of Rs. 80,000/- within six months from the date of the agreement (23.5.1980) i.e. on or before 26.11.1980. The plaintiff had also agreed to get the deed registered bearing registration fees himself and that the first defendant had agreed to sign the sale deed after receiving balance amount. It further states that the plaintiff was already residing in the house and after the sale deed he would take possession of the front 2 shops either directly or through Court of law and the plaintiff agreed not to insist on the first defendant to handover the actual possession of the property. If there is a failure to get the sale registered as per the conditions, the first defendant is entitled to forfeit the advance amount; in case the first defendant fail to get the property registered after receiving the balance amount, plaintiff is entitled to get the registration through Court of law. A reading of the agreement would show that the initiative will have to come from the plaintiff to take steps for the completion of the sale transaction. It is for him to bear the expenses of registration. It is for him to pay the balance amount of Rs. 80,000/-. The first defendant's liability to sign the sale deed arises only after the actual receipt of the sum of Rs. 80,000/-. On 20th November 1980 an endorsement was made by the parties which states that the time fixed under the sale deed for its conclusion closes on 26.11.1980; since it was not possible to complete the 'sale deed agreement', it was agreed to extend the period by two months and accordingly it was agreed to complete the sale agreement as per the conditions, by 25.1.1981. The other suit by Mariappa was filed on 11.12.1980; initially the present plaintiff was not impleaded as a defendant. On 26.1.1981 another endorsement was made on the agreement, Ex.D1, stating that in view of the injunction order issued in the other suit the period is further extended upto 25.4.1981. Again two more endorsements were made extending the period mentioning the order of temporary injunction made in the other suit. The last endorsement extended the period upto 24.10.1981. The present plaintiff did not take any steps to come on record in the other suit even though the order of temporary injunction affected his right to get the sale deed registered because the said order restrained the first defendant from executing any sale deed in respect of the property in question. The plaintiff was impleaded in the other suit on 21.10.1981. The impleading application was filed actually by Mariappa, the plaintiff in the other suit as could be inferred from the order sheet found in the records of the trial Court, The said application was obviously filed in March 1981. The plaintiff herein cannot plead ignorance of the filing of the suit because of the endorsement dated 26.1.1981 found in Ex.D1. He was impleaded at the instance of Mariappa on 21.10.1981 which shows that for nearly 10 months the present plaintiff did not care as to what happened to the terms of the agreement Ex.D1 and obviously was enjoying the benefit of the extensions as endorsed in Ex.D1.
11. The temporary injunction was vacated by the High Court for which the first defendant filed an appeal to the High Court, Even here, the present plaintiff did not care to challenge the order of the Trial Court and thereby disclosed his intention that he was not anxious to have the sale deed completed.
12. On 16.2.1984 (as per Ex.D2) the order of temporary injunction was vacated by the High Court. Immediately, on 22.2.1984 as per Ex.D3, the first defendant caused a notice to be issued through her Counsel, to the plaintiff. The notice states that on 20th November 1980 plaintiff had represented to the first defendant that the former was not in a position to get the necessary funds and therefore sought the extension of time till 251.1981 and accordingly the first endorsement came to be made. Subsequently time was extended in view of the pendency of the other suit. On 18.8.1983 the exparte injunction order was made absolute by the trial Court which was challenged in appeal by the first defendant herein. The notice further states that time was the essence of the contract and now that the order of temporary injunction is vacated, there was no impediment to complete the transaction. Consequently the plaintiff was called upon to pay the balance consideration of Rs. 80,000/- and take the sale deed at his cost within a week from the date of receipt of the notice, failing which the amount of Rs. 10,000/- would be forfeited and the agreement would be treated as cancelled and void. This registered notice was served on the plaintiff on 27.2.1984 (Ex.D4). On 1st March 1984 the Counsel for the plaintiff issued a registered reply to the Advocate of the first defendant stating that the plaintiff was always ready and willing to perform his part of the contract. On behalf of the plaintiff it was stated that the assertion made by the first defendant in her Lawyer's notice that plaintiff was yet to get the necessary funds, etc., was incorrect. It is further stated in Ex.D5: 'right from the time the agreement was entered into my client was always ready and willing to perform his part of the contract i.e., to pay balance of sale consideration and get the sale deed executed and registered in his favour. But it was your client who on some pretext or the other went on postponing to complete the sale and the endorsements regarding extension of time were made on the agreement at the instance of your client.' According to this notice, plaintiff had written letters and sent telegrams earlier in April and July 1981 as to his readiness and willingness to perform his part of the contract.
13. This notice also refers to a telegram issued on 29.2.1984, in response to the notice received by him (Ex.D3) stating that he was ready to perform his part of the contract. Para 6 of Ex.D5 requires to be repeated here:
'You are hereby requested to instruct your client to intimate my client in writing the date and time on which she would be prepared to arrive at Bangalore with the requisite Income Tax clearance certificate and the tax paid receipts in respect of the property prior to 1975 to complete the sale. Your client may be requested to intimate her readiness to complete the sale to my client in writing IN ADVANCE so as to enable him to get ready with the sale deed and to be present at Bangalore.'
14. There was no immediate response from the first defendant. The telegram sent by the plaintiff to the first defendant on 22.2.1984 is reflected in its copy Ex.D8. On 14.9.1984 the first defendant's Counsel sent a registered letter to the plaintiff stating that it was a reply to the notice issued by the plaintiff on 23.8.1984. In this notice Ex.D9 it was stated on behalf of first defendant that the said reply was without prejudice to the contentions already raised in the notice dated 22.2.1984 and without admitting the correctness, etc. of the allegations made by the plaintiff in his notice dated 23.8.1984, It further states that the other suit is still pending and was ripe for trial and the first defendant would revert to the subject after disposal of the suit. Ex.D10 is a copy of the telegram sent by the plaintiff to the first defendant asking her to come to Bangalore and execute the sale deed, stating that the amount was ready and that everything was kept ready. The phrase 'everything kept ready' in the telegram was preceded by the sentence 'immediately come and execute the sale deed purchasing the stamp at my cost.' Therefore this indicates that the plaintiff was informing the first defendant that the sale consideration was ready with him and the sale deed was also ready for execution. This assertion obviously was a make believe assertion as could be seen from the material on record. The plaintiff has not produced the draft sale deed prepared by him not has he spoken to the steps taken by him to keep the sale deed ready.
15. It is necessary to note here that Ex.D6 is the Income-tax clearance Certificate issued by the Income-tax Officer, Salem on 15.11.1980. In the application filed for the Certificate the first defendant had mentioned that she had to execute a sale deed in favour of the plaintiff in consideration of sum of Rs. 90,000/-. The first defendant seems to have enclosed the sale deed also which gave the particulars of the property. The place of registration is shown as Bangalore. Application was filed on 3.11.1980. Thus it is clear that the first defendant was ready with the Income-tax clearance Certificate on 15.11.1980 itself, even before the date of the first endorsement extending the period to complete the transaction under the agreement. This is a very strong circumstance showing that the first defendant had taken all steps which she had to take to complete the sale transaction, except receiving the sum of Rs. 80,000/- and signing the sale deed. This action again, would be taken by the first defendant only if the plaintiff had paid the amount and produced the sale deed for signature.
16. All the four endorsements were made at Salem. The first defendant is a resident of Salem. The plaintiff was very punctual in going to Salem on several occasions to get the sale agreement and to have the time for performance extended. But when it was required of him to perform his part of the contract, he was asking the first defendant to come over to Bangalore, ignoring the condition that it was he who has to pay the balance of Rs. 80,000/- and get the signature of the first defendant on the sale deed. Payment was a condition precedent for the signature of the first defendant.
17. It was contended before us that the plaintiff was ready with the fund and that the sale deed had to be registered at Bangalore and therefore it has to be presumed that the first defendant had to come to Bangalore to receive the amount and sign the sale deed.
18. It is not possible to accept this contention advanced on behalf of the plaintiff. Payment of the balance consideration is not to be simultaneous with the registration of the sale deed. If the payment of balance consideration was to be at the time of registration the agreement would have provided for such a term stating that the balance consideration of Rs. 80,000/- shall be paid by the plaintiff to the first defendant at the time of the registration of the sale deed. In fact such a term is found in many of such sale agreements. Here the plaintiff was already enjoying the property except a small portion thereof. Further, the first defendant who is a lady is a resident of Salem. In such a situation it is reasonable to infer that the parties intended that the plaintiff should go to Salem and make the payment and get the signature of the first defendant or at any rate make the payment and then invite the first defendant to Bangalore for signing sale deed in the office of the Sub-registrar. There were two terms of the agreement to complete the transaction. The first term is the payment of Rs. 80,000/- by the plaintiff to the first defendant. The question is, as to when this promise had to be performed. The second term is the signing of the sale deed by the first defendant. Regarding the first term, the plaintiff is in the nature of a debtor and the first defendant is in the nature of a creditor and the presumption is that the debtor should seek the creditor and therefore even on this principle it was the duty of the first plaintiff to go to Salem and make the payment instead of demanding her presence at Bangalore. Obviously the plaintiff was trying to find some reason not to complete the sale transaction because there was nothing for him to suffer by the delay by the completion of the sale transaction.
19. In the evidence of the plaintiff, as D.W.2, he has admitted that he was paying the taxes to the Corporation till the year 1981. One of the tenants of the shops also had vacated and the plaintiff had taken possession of the said portion and as D.W.2 plaintiff stated that he has been in possession of 80% of the total building and only one shop was not in his possession. Even regarding this tenant, D.W.2 was asked to vacate and handover vacant possession. Therefore it is clear that D.W.2 was in complete control of the property in question. Regarding the taxes he stated thus:
'I have paid kandayam upto 31.3.1981 in respect suit property. Defendants-1 and 2 had not authorised me to pay the kandayam and I have paid kandayam on the pressure of the Corporation. Corporation has not issued any notice in that respect.'
This statement is very relevant while appreciating the conditions stated in para 6 of Ex.D.5. in the said notice issued on 1.3.1984 on behalf of the plaintiff, the first defendant was asked to intimate in writing, the date and time on which she would be prepared to arrive at Bangalore with the requisite Income-tax clearance certificate and the tax paid receipts in respect of the property prior to 1975 to complete the sale. On the face of it this demand for the tax paid receipts for the period prior to 1975 looks to be unreasonable. It was an entirely irrelevant requirement. When the plaintiff was paying the taxes to the Corporation till the year 1981 and the Corporation no where demanded any arrears from him, it is not clear as to why the tax paid receipts for the period prior to 1975 were necessary. Even here, the commencement of the period is not stated. It will be really an arbitrary demand if a purchaser insists that the vendor should produce all the tax paid receipts, in respect of all the past years without any limitation, as a condition for the performance of the purchaser's part of the contract. In these circumstances the letter Ex.D. 11 has no significance. It was an earlier letter dated 23.4.1981 addressed to the first defendant under which the plaintiff sought further endorsement on the agreement in view of the pendency of the other suit and the order of temporary injunction which was then in force.
20. The plaintiff admittedly had no fund available with him to pay the balance sum of Rs. 80,000/- at least on the date of the first endorsement, As D.W.2 he stated:
'....It is not true to suggest that 6 months time was stipulated as I had to arrange for sale consideration. I did not have the balance amount of Rs. 80,000/- on the date of agreement. I am not an Income-tax Assessee. In 1980 I was maintaining a bank account. It is not true to suggest that I could not arrange for payment of the balance consideration, within the period of 6 months originally fixed. I do not have the documentary evidence to show that I was in possession of sufficient amount of paying the balance consideration and the Registration fees within the period originally fixed.'
In his entire evidence nowhere D.W.2 states as to where he has kept this sum of Rs. 80,000/- and how he obtained the said fund. He has not even stated how he could be treated as a person ready to make the payment when admittedly he had no funds either on the date of the agreement or for a period of 6 months thereafter (i.e., the date fixed initially for making the payment). In view of this statement it is clear that the first endorsement extending the period by two months was made at the instance of the plaintiff and thereafter the suit filed by Mariappa came as a very convenient excuse for the non-performance of the contract. The circumstances disclose that the order of temporary injunction made by the trial Court in the other suit was more beneficial to or suited the plaintiff herein and the first defendant had actually suffered financially or otherwise by the said order.
21. D.W.2 no where states that the sate deed was ready with him and in anticipation of the first defendant coming to Bangalore, he proceeded to purchase the stamp paper, etc. In the cross-examination it was suggested to D.W.2 plaintiff that he was not at all ready nor willing to purchase the property because he could not arrange for the balance consideration. It was also suggested that he colluded with Mariappa (plaintiff in the other suit) to harass the first defendant. D.W.2, no doubt asserted, in para 8 of his deposition, that he was ready and willing to purchase the property by performing his part of the contract and that he was ready with the money 'within six months' and that he had the money even at the time of his deposition. But this statement is falsified by his statement in the cross-examination, of which, extract is given above.
22. First defendant was examined as D.W.1 She states that Mariappa had offered her Rs. 1 lakh and required vacant possession of the suit property. However, there was no agreement with him because ultimately the' present plaintiff who was in possession of the major portion of the property as a tenant offered to purchase the entire property for a sum of Rs. 90,000/-. According to D.W.1 sale deed had to be executed at Salem. She further states that the present plaintiff did not perform his part of the contract by paying the sale consideration within six months. According to her the present plaintiff went to Salem and requested for the first extension of two months. There is nothing in the cross examination of D.W.1 which demolishes these statements of the first defendant as D.W.1.
23. Before concluding it is necessary to consider the principle governing a suit for specific performance of an agreement, which are found in several Decisions.
24. In Lt. Cdr. M.C. KENDALL v. S.CHANDRASEKHAR : ILR1991KAR4142 a Bench of this Court pointed out that, mere rise in price, subsequent to the date of contract or inadequacy of price is not to be treated as a hardship entailing refusal of specific performance of the contract, and under Section 20 of the Specific Relief Act, the circumstances to be considered cannot be enumerated. A totality of several circumstances has to be considered before considering the grant or refusal of the relief of specific performance.
25. In YOGAMBIKA v. NARSINGH : ILR1992KAR717 the scope of the Appellate Court's power to interfere with the discretion exercised by the trial Court, and the circumstances under which a Court may refuse to grant a decree for specific performance, are stated. At page 734, Court observed:
'....Normally, when a discretion is exercised by a trial Court judicially on applying relevant considerations, the appellate Court will be slow to interfere unless it finds that the exercise of discretion is arbitrary or is based upon the considerations not relevant to the issue.'
On facts, the Court held that the reason for refusing to grant the decree of specific performance, stated by the trial Court was not correct in law. As to Section 20 of the Specific Relief Act, the Bench observed, at page 736:
'.....Under Section 20 of the Act, the grounds which enable the Court to refuse to grant a decree must be such which were not in the contemplation of the parties when they entered into an agreement of sale and also that the defendant had no control over those grounds and as a result of those grounds, it has become impossible for him to get on without the property agreed to be sold. In the instant case, it is to be seen whether the circumstances now put forth by the learned Counsel for the respondent were not in existence at the time when the agreement was entered into. It is true that the defendant has two unmarried daughters and his wife was also not keeping good health. If we have to lay down the law that a person whose wife is ailing and has two unmarried daughters, therefore a decree for specific performance cannot be granted, it would be a wrong exercise of the discretion because such a circumstance is not something which is unusual.'
The Court at page 737 referred to the Decision of the Supreme Court in PRAKASH CHANDRA v. ANGADLAL : AIR1979SC1241 which reads:
'The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. In the present case, the conduct of the appellant has not been such as to disentitle him to the relief of specific performance. He has acted fairly throughout, and there is nothing to show that by any act of omission or commission he encouraged Mohsinali and Qurban Hussain to enter into the sale with the first and second respondents. There is no evidence that the appellant secured an unfair advantage over Mohsinali and Qurban Hussain when he entered into the agreement. Nor is there anything to prove that the performance of the contract would involve the respondents in some hardship which they did not foresee, in our opinion, there is no reason why the appellant should not be granted the relief of specific performance.'
It was contended by the learned Counsel for the 1st defendant that she could not foresee that there would be an order of temporary injunction by a civil Court against the execution of sale deed, where the contract was entered into in the year 1980. The plaintiff was already in possession of a substantial position of the property as a tenant, paying a low rent and this possession enabled him to lake advantage of while bargaining with the 1st defendant and persuade her to agree to sell the property to him for Rs. 90,000/-; and could continue in possession of the property throughout without paying any rent thereafter and he took advantage of his position to take possession of the shop vacated by another tenant also. 1st defendant was deprived of the rent, as well as, the enjoyment of the property as its owner; she was deprived of the benefit of a substantial sum of Rs. 80,000/- also, for no fault of hers; if she had been paid the entire consideration of Rs. 90,000/- in the year 1980 or 1981, she could have utilised the amount either by a better investment or in any other mode. The money value has been falling at such a speed, that the worth of Rs. 80,000/- in 1984, would be no where comparable to its purchasing power in the year 1980 of 1981, whereas, property value in Bangalore has been increasing steadily with steep escalation. Plaintiff demanded that 1st defendant shall come to Bangalore from Salem, inter alia, with tax-paid receipts for the years prior to 1975 which were entirely irrelevant. The conduct of the plaintiff in not caring to take any steps to have the order of Temporary Injunction vacated and not filing any appeal against the trial Court's order in the 'other suit' was also highlighted to emphasis that, the plaintiff is not entitled to any discretionary relief.
26. In CHINNASWAMY v. PROFULLA : ILR1992KAR2294 it was held that a person seeking specific performance must be always ready and willing to perform her part of the agreement. No doubt in the matter of agreement of sale of immoveable property time is not of the essence of the agreement unless it is specifically agreed to by the parties and followed by their conduct, but the intended purchaser cannot drag on for an unreasonable length of time. A person seeking specific performance of an agreement must approach the Court with clean hands. He or she should not suffer from or give rise to unrighteous conduct. In a suit for specific performance, the plaintiff who seeks specific performance of the agreement must not only adhere to the essential terms of the agreement, but, not also suffer from lack of probity and lack of bonafides. Apart from the fact that the plaintiff must always be ready and willing to perform his/her part of the agreement, his/her conduct must be above board. Hardship is not the only deciding factor in considering the question as to whether a decree for specific performance should or should not be granted. Several other circumstances enumerated in Section 16 and also Section 20 of the Act are to be taken into consideration. The Counsel for the plaintiff relied on a Decision of the Madras High Court in S.P. NARAYANA-SWAMI PILLAI v. DHANAKOTI AMMAL : AIR1967Mad220 wherein, it was held:
'In my view when time is provided for performance, readiness and willingness on the part of the person seeking performance can only mean that on his part he has throughout the period kept the contract as a subsisting one with a preparedness to fulfil his obligations and accept performance when the time came. This does not mean that the purchaser should besides show that he had command of the necessary finance throughout the life of the contract. Such an insistence will make the fixing of a time for performance meaningless.'
27. However, it should be noted that this observation does not say that the plaintiff need not prove his capacity to pay the sale price, at the time fixed for payment; observation of the learned Judge is only to the effect that throughout the life of the contract, command of the finance need not be proved; when the time to perform his part came, he has to be ready to pay the money.
28. JITHENDRA NATH ROY v. SMT. MAHESWARI BOSE : AIR1965Cal45 is a Decision of a Bench of Calcutta High Court. G.K. Mitter, J., speaking for the Bench held at page 49:
'(15) Once it is held that the contract was rightly terminated by the vendor the further question as to whether the purchaser was ready and willing to perform the agreement need hardly be considered. Circumstances which justify termination of contract by one party cannot be compatible with readiness and willingness on the part of the other to perform it. It was pointed out by the Judicial Committee of the Privy Council in Mama v. Sassoon, 55 lnd.App.360 at p.373: (AIR 1928 PC 208 at p.216) that 'in a suit for specific performance' the plaintiff
'treated and was required by the Court to treat the contract as still 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.' In my opinion, this means that the plaintiff must allege and prove that he had taken all the essential steps which he was required to take under the agreement for sale when he filed his suit. 'Readiness and willingness' has also to be considered from another point of view namely whether the plaintiff if a purchaser was in a position to pay the money and take the conveyance in terms of the contract. This however does not mean that the purchaser has got to put the money by and be able to show that he had command of the necessary finance throughout the life of the contract. It was held by the Judicial Committee in Bank of India Ltd. v. Jamsetji A.H. Chinoy, 77 Ind App 76 at P.91 : (AIR 1950 PC 90 at p.96) that
'to prove himself ready and willing a purchaser has not necessarily to produce the money or to vouch a concluded Scheme for financing the transaction. The question is one of fact.' The Board approved of the view taken by Chagle, A.C.J. that it was not necessary for the plaintiff to work out actual figures and satisfy the Court what specific amount a bank could have advanced on the mortgage of his property and the pledge of shares. In my opinion, if the plaintiff can show that he was in a position to raise the money required at or about the time when the contract was to be performed he discharges the obligation of proving readiness and willingness so far as the financial aspect is concerned. As was pointed out by Subba Rao C.J. as he then was, in Subeyya Chowdary v. Veeraya, (S) AIR 1957 Andh. Pra. 307atp.313
'where the question is whether he (the plaintiff) was in a position to pay as in the present case, the enquiry should be whether he could, if he wanted, raise the money he required.' On the facts of that case his Lordship felt no doubt that the first plaintiff who was a man of property and a business man with dealings with third parties and oil mills could have raised the sum of Rs. 4,000/- if he urgently required it and on the evidence his Lordship was satisfied that the first plaintiff was substantial enough to make ready the necessary amount if the occasion arose and held that he was ready and willing to perform his part of the agreement.'
SMT. RAJ RANI BHASIN AND ORS. v. S. KARTAR SINGH MEHTA : AIR1975Delhi137 brought out the distinction between the concepts of readiness to perform the contract and willingness to perform the contract. At page 141, the Bench held:
'A distinction may be drawn 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. This includes his financial ability to pay the purchase price. We will assume for the sake of argument that the plaintiff respondent could have raised the money to pay the purchase price if he wanted to do so. But the more important question is whether he was willing to perform his part of the contract even if he had the financial capacity to do so. It is here that the plaintiffs conduct has to be properly scrutinised. In our view, the trial Court has not done so. It has merely concentrated its attention on the financial ability of the plaintiff to raise the money to pay the purchase price but has not noticed the unwillingness of the plaintiff to perform his part of the contract and to present a sale deed on stamp paper for the execution of the defendants and to pay the purchase price from 16.8.1962 to 16.9.1962. The trial Court was under the misapprehension that the defendants complied with the terms of the agreement only 8.9.1962 when the documents were handed over to the plaintiff-respondent as per Exhibit D-38. It failed to notice that the agreement did not require the defendants to hand over any documents as such to the plaintiff.'
Again at page 142:
'... The plaintiff had agreed to buy the property in 1961 but because he did not pay the purchase money the said agreement had fallen through and the new agreement of 20th March 1962 was entered into. The facts regarding the procrastination by the plaintiff had been fully set out in the pleading made by the defendants and the evidence adduced by them. They have not been rebutted by the plaintiff. The defendants were found justified in thinking that the plaintiff was interested merely in prolonging his tenancy as much as possible on the pretext that he was buying the property and the defendants should not take steps to evict him. Later when the defendants took proceedings to evict him, the plaintiff got the eviction proceedings stayed on the ground that his suit for specific performance was pending. In this manner the plaintiff has managed to stay in the premises from 1961 onwards till now. Secondly, the plaintiff's conduct shows that he only wanted to have a grip on the suit premises so that the defendants would not be able to transfer them to some other person. Thereby the plaintiff could ensure the continuance of his stay in the premises.'
As to the time performance, it was observed, at page 144:
'.... It is true that the presumption is that in a contract for sale of immovable property the time is not the essence of the contract. A mere stipulation of a date before which the sale deed was to be executed and the stipulation that the earnest money would be forfeited if the date was not adhered to also would not necessarily make the time the essence of the contract. But the sellers were entitled to make the time the essence of the contract by specifically giving a notice to the purchaser if the purchaser was found to be delaying the performance of the contract.'
The trial Court's decision was ultimately reversed. As to the time being the essence of the contract, is a matter of intention of the parties to the contract, evidenced by express stipulations or by circumstances which are sufficiently strong to displace ordinary presumption that in contract for sale of land stipulation as to time is not of essence; however by an appropriate notice, one of the parties may notify the other making the time essence of contract, subsequently. The plaintiff seeking specific performance must 'plead and prove that he was ready and willing to perform his part of the contract continuously between the date of the contract and the date of hearing of the suit' (vide : GOMATHINAYAGAM PILLAI AND ORS. v. PALANISWAMI NADAR : [1967]1SCR227 ). To prove himself ready and willing, a purchaser has not necessarily to produce the money or to vouch a concluded scheme for financing the transaction. (NATHULAL v. PHOOLCHAND : [1970]2SCR854 ). In this case, as also the earlier case decided by the Privy Council in BANK OF INDIA LTD. v. JAMSETJI A.H. CHINOY, 1950 PC 90 @ 96 the capacity of the purchaser to pay the money was quite patent, because, the purchasers had already arranged to borrow the fund, from the Banks. In the Privy Council Decision, observations made by Chagle Ag.C.J. of Bombay High Court as to the facts were quoted, indicative of the purchaser's arrangement with his bank.
29. There is no authority for the proposition that the purchaser's readiness and willingness has to be inferred by his repeated assertion of those magic words. It is essentially a question of fact to be answered from the material on record read with the proved circumstances of the case.
30. In SMT. INDIRA KAUR v. SHRI SHEO LAL KAPOOR : AIR1988SC1074 according to the purchaser he was ready with the requisite fund, having kept it in the Bank, and the defendant failed to enquire with the Bank nor called upon the plaintiff to produce his Bank accounts.
31. In RAMESH CHANDRA CHANDIOK AND ANR. v. CHUNI LAL SABHARWAL (DEAD, by his LRs) : [1971]2SCR573 also, the facts were considered by the Supreme Court (at page 1242) to be satisfied that the purchaser had the requisite funds or could have arranged for the same when the sale deed had to be executed. Since the vendor had cancelled the agreement earlier, question of purchaser sending a draft conveyance deed did not arise, in the said case.
32. While exercising the discretion under Section 20 of the Specific Relief Act, Court should see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff and the Court is not bound to grant specific performance merely because it is lawful to do so. (PARAKUNNAN VEETILL JOSEPH'S SON MATHEW v. NEDUMBARA KURUVILA'S SON AND ORS.) : AIR1987SC2328 . The burden of proving the readiness and willingness to perform his part of the contract is entirely on the plaintiff and he cannot succeed in his claim for a decree for specific performance, by establishing that the vendor-defendant was avoiding to perform the contract; defendant's failure to perform his part of the contract is the cause for the suit; but, to succeed in the suit, plaintiff has to prove his readiness and willingness. The readiness involves proof of capacity to perform, which in turn requires proof of his financial ability at the relevant point of time. The willingness to perform the contract is not a mere desire; it should be a genuine willingness, to be proved like any other fact; circumstances may justify an inference that the assertion of the plaintiff as to his willingness is a mere verbal assertion and as a fact, his conduct may disclose that he was really interested in procrastination, because, delay was to his advantage; in many cases, a person who agreed to purchase a property of which he is already in possession, may not be anxious at all to complete the contract, either because, he had no ready cash with him, or may consider it expedient not to part with the money, so that he can have the continued benefit of the money as well as the enjoyment of the property. The respective position of the parties to the agreement, the circumstances under which the agreement was entered into, the relative advantage or disadvantages to the parties by the performance or non-performance of the contract during the relevant period, are some of the relevant circumstances to be considered by the Court, while scrutinising the evidence adduced before it. The main thrust of the analysis of the facts and circumstances, would be to scrutinise the plaintiff's conduct in relation to the property and the term of the agreement. However, even if the plaintiff makes out his case for specific performance, Court has to still consider as to whether the discretionary relief should be granted in favour of the plaintiff or it should be denied, in the light of Section 20 of the Specific Relief Act; no doubt, it is a judicial discretion, exercise of which depends upon several factors.
The material on record reveal :
(1) Plaintiff was in possession of a substantial part of the property and by virtue of his possession he was able to get the agreement of sale for Rs. 90,000/- in the year 1980. Property is situated in a fully developed area of Bangalore, having both commercial and residential advantages. At the time of agreement, value of the property, according to the 1st defendant, was more than a lakh of rupees
(2) The 1st defendant had obtained the Income-tax Clearance Certificate much earlier to the period of six months fixed in the agreement for its performance.
(3) Plaintiff admitted that he has been paying the taxes to the Corporation, atleast till the year 1981; still, in year 1984, when 1st defendant called upon the plaintiff to come and complete the sale transaction, he required her to go to Bangalore with the Income-tax Clearance Certificate and tax paid receipts from the period prior to 1975. It was absolutely unnecessary in the circumstances, for the plaintiff to require the 1st defendant to produce tax paid receipts for the period prior to 1975, because, if taxes were in arrears, the Corporation would have by that time taken action for their recovery and it is not the case of plaintiff that there was any claim by any authority that old taxes were in arrears.
(4) Agreement was executed in Salem. On the date of agreement, plaintiff had no fund to pay the sale consideration; even by the time the initial period of six months came to an end, plaintiff had no money with him to pay the sum of Rs. 80,000/- as per the agreement. On this aspect there is no dispute, and in fact plaintiff admitted that he had no requisite amount with him at that time, to pay to the 1st defendant, it is not his case that subsequently he had the requisite amount kept in the bank; he was not an income-tax assessee, By the year 1984, how he came to possess the requisite fund is not forthcoming.
(5) When the agreement was executed at Salem and subsequently four endorsements extending the period to complete the performance were also made at Salem, it is reasonable to infer that, the plaintiff was expected to go to Salem with the balance of sale price and pay the same to the 1st defendant, to obtain her signature on the sale deed. The reading of the agreement shows that, payment of the sum of Rs. 80,000/- was a condition precedent, before the 1st defendant could be asked to sign the sale deed; as is clear from the terms of the agreement The expenses of safe deed were to be borne by the plaintiff; he did not take any steps to purchase the stamp-papers and get the sale deed prepared; his reply to the notice issued by the 1st defendant, immediately after the order of temporary injunction was vacated, reflects his unwillingness and unread ness to perform his part of the agreement; plaintiff was putting-forth an irrelevant term to be complied with by the 1st defendant. Further, as a person in the nature of a debtor (to pay the sum of Rs. 80,000/-) he had to seek the 1st defendant by going to Salem.
(6) There was nothing to be gained by the 1st defendant by the delay; she had done everything possible in the circumstances, by receiving a small amount of Rs. 10,000/- and signing the agreement; the Income-tax Clearance Certificate was also obtained by her. Delay was entirely advantageous to the plaintiff who was enjoying the property without parting with a substantial sum of Rs. 80,000/-. He had the benefit of taking possession of the shop premises vacated by another tenant also (though, it is stated to be in a dilapidated condition). Inference is irresistible that the plaintiff took undue advantage of the 1st defendant's helplessness to sell the property to any third party, because the plaintiff was in occupation of a major part of the property as a tenant.
(7) The other suit filed by Mariappa (2nd defendant herein) came as a convenient excuse to the plaintiff rather than to the 1st defendant. Even after the plaintiff was impleaded as a defendant in the other suit, he did not take any steps to have the order of temporary injunction vacated. He did not take any steps even to file an appeal against the said order. This is a strong circumstance indicating that plaintiff was not at all anxious to have the sale deed completed as per the agreement,
(8) According to the 1st defendant, on the date of her written statement in this suit, property was worth over Rs. 5 lakhs (as per the written statement). Having regard to the locality, and the extent of the site, the said valuation is quite reasonable. There has been a steady escalation in the price of properties in Bangalore. The delay caused by the order of temporary injunction was an unforeseen factor, which none could have anticipated at the time of the agreement in question. This delay, certainly has contributed to the hardship of the 1st defendant, who had not the advantage of the sale price with her, nor, any income from the property, if she had received the sum of Rs. 80,000/- in or about the year 1980 or 1981, 1st defendant could have invested it profitably or would have enjoyed it beneficially. This deprivation and the consequential hardship cannot be ignored by the Court, in the light of Section 20 of the Specific Relief Act. 1st defendant's anxiety for an early completion of the transaction is clear by the fact that, initially she agreed for six months under the agreement; thereafter, she agreed for an extension of the period by two months; this was obviously because, plaintiff had no money with him; before the expiry of this period of 2 months, the other suit was filed by Mariappa, and the order of temporary injunction against the sale of property came to be passed. Immediately after the High Court vacated the said order. 1st defendant asked the plaintiff to have the sale deed executed, but, the plaintiff reacted in a way which reflected his evasive attitude.
(9) Even at the time of filing the suit and at the time of hearing the case before the trial Court, plaintiff has not shown his readiness and willingness to be genuine; it is entirely unclear as to where he kept the sum of Rs. 80,000/- and how he got it; it is reasonable to infer that his ability to make the payment on the relevant dates has not been proved.
33. In view of the above, we are constrained to reverse the judgment and decree under Appeal resulting in the dismissal of the suit.
34. Accordingly, the Appeal is allowed with costs throughout.