ORDER
1. There were two suits, one for specific performance of contract by The purchaser and the other for ejectment and arrears of rent by the landlady. The purchser was the tenant and the vendor was the landlady. The suit for specific performance of contract was dismissed, but the suit for ejectment and arrears of rent was decreed Accordingly both the appeals are by one and the same person, but in different capacities of purchaser and the tenant. Similarly the respondent in one appeal is also the respondent in the other appeal, but in different capacities of vendor and the landlady. In this state of affairs and for the sake of convenience, the appellant in both the appeals shall hereafter be also described as the 'purchaser-tenant' or as the 'tenant-purchaser'; and the respondent in the two appeals shall be described as the 'vendor-landlady' or as the 'landlady-vendor'.
2. The suit property is a double storeyed house. It was and is owned by the respondent in both the appeals. The first floor of the house was given on rent to the appellant in the two appeals for the purpose of reisdence on a montly rent of Rs. 670/- with effect from 1-12-1978. The tenancy was from the 1st to the last day of each English Calendar month and the rent was payable on the 1st day of each succeeding tenancy month. Rents till June, 1980 were paid, but rents thereafter were not paid, though the appellant in the two appeals continued and continues to be in possession of the first floor of the house till the date ofthis judgment. This is the factual position in so far as the tenancy agreement between the parties is concerned.
3. On 21-2-1980 the respondent In the two appeals entered into an agreement to sell the entire suit property with the appellant in the appeals for a consideration of Rs. 2,40,000/-subject to terms and conditions, which were reduced into writing in the form of 'Agreement of lale for a Dwelling House' and also received'a sum of Rs. 30,000/- by cheque and a further sum of Rs. 5,000/- in cash, total Rs. 35,000/- on the date of execution of the agreement. The balance of sale consideration was payable in monthly instalments of Rs. 10,000/- each commencing from April, 1980 with stipulation to execute and register one sale deed in respect of the first floor of the house soon after receipt of the instalments to the tune of Rs. 1,20,000/-; and to execute and register another sale deed in respect of the remaining portion of the house after receipt of the total Balance amount towards the sale consideration. It was agreed that the vendor-landlady would obtain nil encumbrance certificate, Income-tax clearance certificate and permission from the Urban Land Ceiling Authority separately for each portion of the house to be sold by two separate sale deeds on two different dates. It was stipulated that the purchaser-tenant would make fhe 'monthly payments promptly and without delay on his part. 'It was also Specifically mentioned in the agreement of sale, 'That both parties shall agree that time is essence of contract for this agreement'. After the date of this agreement, three monthly instalments of Rupees 10,000/-each for the months of April, May and June 1980 were paid by the purchaser-tenant and also received by the vendor-landlady. When the subsequent instalments for the months of July, August, Sept. and Oct. 1980 were not remitted by the purchaser-tenant, she was served with the registered notice dated 10-11-1980 of Sri M. Subbarao, Advocate for and on behalf of the vendor-landlady, repudiating the contract for sale of the house on the ground that the former had committed breach of contract by not remitting monthly instalments from July, 1980, though time was the essence of contract. The amount of Rupees65,000/- received by the vendor-landlady till the date of notice was simultaneously sent back by cheque No. 007131 dated 10-11-1980 drawn on Andhra Bank, Dwarakanaga'r, Visakhapatnam. The purchser-tenant sent her reply dated 14-11-1980 thorough her counsel Sri D.V. Subba Rao, Advocate, denying all material allegations against her and contending that 'When she sought to pay the amount of Rs. 10,000/- in the month of July, 1980 through her husband, your client (i.e., the vendor-landlady) has stated that the amount may be accumulated and could be paid in a lump sum, preferably if possible entirely of it earlier than February, 1981 which was the time of which the amount of Rs. 1,20,000/- has to be paid. Relying on the word of your client which was sent through her husband, my client (i.e., the purchaser-tenant) did not send the instalments for the months of July, August, Sept. and Oct. 1980.' While denying that the time was the essence of contract, the cheque for Rs. 65,000/- sent by the vendor-landlady was returned and four cheques of Rs. 10,000/- each of even date were also sent towards instalment of July, August, Sept. and Oct. 1980. She also expressed 'her willingness to pay the balance of the entire sale price as soon as your client (i.e., ' the vendor-landlady) can get a clearance from the Urban Land Ceiling Authorities and also the clearance under Section 230A of 'the Income-tax Act'. It was followed by another notice dated 7-12-1980 by Sri M. Subba Rao, Advocate for and on behalf of the vendor-landlady, reiterating her allegations in the notice dated 10-11-1980 and returning the cheques, one for Rs. 65,000/- and the four for Rs. 10,000/.- each sent by the purchaser-tenant. This was replied to on 17-1-1981 by the purchaser tenant through her counsel coupled with the return of the cheque for Rs.65,000/- and the alleged tender of Rs. 60,000/- by meanss of two demand drafts for Rs. 30,000/- each. The same was alleged to have been returned by the counsel for the vendor-landlady on the ground that the file was taken away by her and further returned by the postal department with refusal endorsement, when directly sent to the vendor-landlady. The suit for specific performance of contract was, thereafter, filed in Feb. 1981, with an alternative prayer for refund of Rs.65,000/- and compensation to the tune of Rs. 1,00,000/-. The suit was resisted. After trial, the Courit below was pleased to refuse specific performance of contract, but to decree the ternative claim for refund of Rs. 65,000/- and compensation to the extent of Rs. 20,000/-. Being aggrieved the purchaser-tenant has filed Appeal No. 464/1988; wheras the vendor-landlady has filed cross objection against the award of compensation to the tune of Rs. 20,000/-.
4. It appears that after the suit for specific performance of contract was filed by the purchaser-tenant, her tenancy was terminated with effect from the expiry of June, 1981 by quit notice dated 10-6-1981 on the ground that she was in arrears of rent from July, 1980 and that of having made alterations without the permission of the vendor-landlady 'by cutting a window to instal A.C. Unit, made a hole to the roof of the stair case to fix up a T.V, Antenna and dug pit to instal pump etc.' The notice was duly replied on 17-6-1981 by the tenant-purchaser. The suit for ejectment and arrears of rent was, thereafter, filed which was decreed by the Court below. Being aggrieved, the tenant-purchaser has filed the Transfer Appeal No. 1191/1991.
TR. APPEAL NO. 1191/1991:
5. Taking up the Tr. Appeal No. 1191/1991 arising out of the decree for ejectment an arrears of rent first, it may be mentioned that Section 10(1) of the A.P. Buildings (Lease, Rent and Eviction) Control Act, I960, (in short, the 'Rent Control Act'), provided that, 'A tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or Sections 12 and 13.' Subsection (2) of Section 10 and Sections 12 and 13 of the Rent Control Act gave exclusive jurisdiction to the Controller under the Act in the matter of eviction of a tenant from any premises by a landlord. However, by virtue of Section 32(b) of the Rent Control Act, the provisions of the Act were not applicable to any building constructed on or after 26th dayof August, 1957. As in the present case, the suit house was constructed after 26-8-1957 and the provisions of Section 32(b) of the Rent Control Act existed on the statute book on the date of suit, the present suit for eviction and arrears of rent was filed in the civil Court. During the pendency of suit, the provisions of Section 32(b) of the Rent Control Act were struck down by the Supreme Court in Motor General Trader v. State of A.P. AIR 1984 SC 121, as violative of Art. 14 of the Constitution with the result that al) buildings, irrespective of the date of their construction, came within the purview of the said Act. Accordingly it comes to this that the jurisdiction of the Civil Court for entertaining a suit for eviction of a tenant was ousted. But somehow the Court below came to the conclusion that it continued to have jurisdiction in the matter and accordingly granted a decree for ejectment in favour of the landlady-vendor. It was brought to my notice that in S.A. Hakim Saheb v. P.V.K. Setty, 1989 (2) ALT 28; M. Mohan Rao v. T. Subbaiah, 1992(1) APLJ 245; and Yadamma (Smt.) v. K. Mallesh, : AIR1994AP272 ; this Court took the view that the Civil Court would continue to have jurisdiction ip such cases, where the suit was filed prior to the date of striking down the provisions. The contrary view taken in K. Bennayya v. P. Saraswathi, 1994 (1) APLJ 265, also came to my notice. All the decisions are of single Bench and ordinarily I would have referred the matter to a larger Bench for resolving the controversy, but in the light of what was Said by the Supreme Court in the concluding paragraph 32 of its aforesaid decision in Motor General Traders v. State of A.P. (supra), I do not consider it necessary to recommend the case for being referred to a larger Bench. In paragraph 32, it was said at page 132:
'In the result these petitions succeed. Clause (b) of Section 32 of the Act is hereby declared as unconstitutional and it is quashed. We, howevever, make it clear that this declaration would not affect the validity of any proceedings in which the decree for eviction passed by a Civil Court has become final and the landlord has already taken possession of the building in question pursuant thereto.'
A careful reading of the underlined words in the said decision of the Supreme Court would indicate that the pending suits or appeals were not saved from the operation of the said decision of the Supreme Court. What were saved were the decrees passed, which had become final, i.e., already executed and the landlords had obtained possession of the building pursuant thereto. Accordingly any decision to the contrary by this Court would not be binding on me and as a necessary consequence of this, I am of the view that the decree for ejectment passed by the Court below in favour of the landlady-vendor was without jurisdiction and, therefore, it is liable to be set aside.
6. In so far as the claim for arrears of rent and pendente lite rent is concerned, the jurisdiction of the Civil Court was not ousted and, therefore, the decree in that regard cannot be set aside on the ground of jurisdiction. As for merits of the claim, there was no dispute that the tenant-purchaser did not pay any rent from July 1980. Her defence that after the date of agreement to sell, she was not liable to pay any rent, was rightly rejected by the Court below, because there was no such stipulation in the agreement and further because even after the date of agreement, she paid rents for the months of March, April, May and June 1980. She could also claim no ownership over the property before the date of sale in view of Section 54 of the Transfer of Property Act. Accordingly the Court below was right in passing a decree for arrears of rent with effect from July, 1980.
7. The rate of monthly rent was disputed by the tenant-purchaser, but it was rightly held to be Rs. 670/- per month in the light of her admission in her reply notice dated 17-6-1981 (Ex. B.2), where it was said, 'It is true, that the rent is Rs. 670/- per month.' Accordingly the legality of a decree for arrears of rent and the future rent at the said rate cannot be allowed to be questioned.
8. In the result, the Tr. Appeal No. 1191/1991 deserves to be partly allowed by setting asise the decree for ejectment passedby the Court below in favour of the landlady-vendor, while maintaining the decree for arrears of rent with effect from July, 1980 at the rate of Rs.670/- per month and for. furture rent at that rate.
APPEAL NO. 464/1988 AND THE
CROSS OBJECTION:
9. In this appeal against the dismissal of suit for specific performance of contract, it has to be remembered, as pointed out by the Supreme Court in Satyanarayana v. Yelloji Rao, : [1965]2SCR221 , relief of specific performance is discretionary but not arbitrary. Discretion is required to be exercised in accordance with sound and reasonable judicial principles. The cases providing for a guide to Courts to exercise discretion one way or the other are only illustrative; they are not intended to be exhaustive. As the Limitation Act prescribes a period of 3 years from the date fixed thereunder for specific performance of a contract, it follows that mere delay without more extending upto the said period cannot possibly be a reason for a Court to exercise its discretion against giving a relief of specific performance. Nor can the scope of the discretion, after excluding the cases mentioned in Section 20 of the Specific Relief Act, 1963, be confined to waiver, abandonment or estoppel. If one of these three circumstances is established, no question of discretion arises, for either there will be no subsisting right or there will be a bar against its assertion. So, there must be sonic discretionary field unoccupied by the three cases, otherwise the substantive section becomes otiose. It is difficult to define that field. Diverse situations may arise which may induce a Court not to exercise the discretion in favour of the plaintiff. In the light of these principles, I now proceed to examine whether time was the essence of contract, as contended by the learned counsel for the vendor-landlady and also found by the Court below.
10. It may be recalled that the balance of sale consideration was payable in monthly instalments of Rs. 10,000/- each commencing from April 1980. Instalments for the months of April, May and June, 1980 were paid, but thereafter no instalments were either paid ortendered until the exchange of notices between parties. According to the' vendor-landlady time-schedule for payment of instalments was the essence of contract and as it was hot maintained and the default made in July 1980 and thereafter, she was within her right in repudiating the contract. Referring to two clauses of the Agreement of Sale (Ex. A.1) just before the last clause above the schedule, it was argued by the learned counsel for the vendor-landlady that the stipulation between the parties was 'that the Purchaser shall make abovesaid monthly payments promptly and without delay on his part', followed by the understanding that 'both parties shall agree that time is essence of contract for this agreement.' Accordingly by making default in payment of instalment for the month of July 1980, the purchaser-tenant committed breach of contract, justifying repudiation thereof by the vendor-landlady. He also referred to various facts and surrounding circumstances, which according to him justified the conclusion that the time-schedule for payment of instalments was the essence of contract. As against this, the learned counsel for the appellant (purchaser-tenant) submitted that time was not the essence of contract, even though there was recital to the effect that the time would be the essence of contract, because in such agreements for sale, time is not considered as essence of contract. It was urged that the purchaser was the tenant of the vendor and that both of them lived in the same building; the vendor on the ground-floor and the purchaser in the first-floor of the same building. They had very good relations and, therefore, the purchaser was given the concession or facility for payment of the balance of sale consideration in monthly instalments. It was. argued that there was no default, muchless deliberate default in payment of the instalments. According to the learned counsel, after receiving the first three monthly instalment of Rs. 10,000/- each, the vendor-landlady herself wanted the remaining balance of sale consideration in a lumpsum and, therefore, the monthly instalments from July, 1980 and onwards were not sent, but as soon as her first notice dated 10-11-1980 wasreceived, the due instalments were imme-daitely sent by means of four cheques dated 13-11-1980, showing that there was no wilful or deliberate default in payment of instal-ments. It was argued that two sale deeds at two different times in respect of two portions of the suit schedule property were intended to be executed by the vendor-landlady. The first sale deed Was to be executed in the month of Feb. 1981, i.e., after making up a payment of Rs. 1,20,000/- towards the sale consideration by that time. Accordingly even if time was essence of the contract, the time for performance of her part of the contract by the purchaser-tenant had not expired by the time the vendor-landlady repudiated the contract. Moreover, vendor-landlady had to obtain nil encumbrance certificate, clearance certificate from the Income-tax department and permission to sell the suit property from the Competent Authority under the Urban Land Ceiling Act. They were not obtained and, therefore, she could not insist payment of the balance of sale consideration, or the instalments. Accordingly it was urged that the vendor-landlady could not resile from the contract.
11. The parties are residents of Visakha-patnam, which is at a long distance from Bombay. Why the vendor-landlady wanted to sell the suit schedule property is not clear from the Agreement of Sale (Ex. A.1), but the evidence led by the parties does disclose the purpose. The husband of the vendor-landlady was suffering from some serious ailment which required treatment at Bombay and, therefore, it appears that in order to meet the Bombay expenses in connection with the treatment of her husband, she decided to sell the suit house for a consideration of Rs. 2,40,000/- and entered into the said Agreement of Sale dated 21-2-1980 with the purchaser-tenanl. It is to be seen that the purchaser-tenant and/or her husband had bank accounts at Bombay as well and, there-fore, at the time of agreement, a cheque for Rs. 30,000/- drawn on a Bombay Bank w;ts given to the vendor-landlady, as the amount was needed and intended to be spent at Bombay for the said purpose. A further sum of Rs. 5,000/- in cash was, perhaps, paid onthe dale of agreement by the purchaser-tenant for the purpose of enabling the vendor-landlady to meet the journey expenses and other sundry incidental expenses. It also appears from the Medical Certificate (Ex. B. 5) issued by the Bombay Hospital that the husband of the vendor-landlady was admitted in that hospital on 28-2-1980, i.e., hardly after six days from the date of Agreement of Sale, which was 21-2-1980. It, therefore, follows that soon after receipt of a cheque for Rs. 30,000/- and cash of Rs.5,000/- on 21-2-1980, the vendor-landlady and her husband proceeded-for Bombay and within a day or two from the date of their arrival at Bombay, vendor-landlady's husband was admitted in Bombay hospital on 28-2-1980. The nature of disease, the fact of re-admission in the hospital at Bombay on 28-5-1980 and the amputation of left leg of the vendor-landlady's husband on 10-7-1980, as disclosed from the Medical Certificate (Ex. B. 5), do indicate that the ailment was serious in nature and required a prolonged and continuous treatment; and also provide basis to think that the vendor-landlady was in recurring, but pressing need of money for the treatment of her husband. !t is common experience that after the sale agreement and payment of earnest or advance money, the balance of sale consideration is generally agreed to be paid on the date and at the time of execution and registration of sale deed. It is seldom agreed to be paid in instalments in the manner agreed to in the present case. This may explain that though the vendor-landlady was in urgent need of money for the treatment of her husband, it was not immediate, but recurring need and as the purchaser-tenant might not have been in a position to pay the entire sale consideration in a lumpsum, but was conscious of the constant pressing need of the vendor-landlady, they agreed to receive and pay the balance of sale consideration in monthly instalments of Rs. 10,000/- each, commecing from April, 1980. In this background, the finding arrived at by the Court below that time-schedule for payment of the balance of sale consideration was the essence of contract, cannot be said to be without any basis or wholly unreasonable.The plea that the purchaser-tenant was given the concession or facility of instalments for payment of the balance of sale consideration, therefore, does not appear to be true. Similarly the allegation that the vendor-landlady subsequently wanted the balance of sale consideration in a lumpsum cannot be believed, because if she so intended, she would have insisted for immediate payment of the entire balance and would not have asked the purchaser-tenant to go on accumulating the instalments month by month and, thereafter, to pay at the time of execution of the sale deed. In this context, it has to be remembered that the default was committed in July, 1980 and in July itself, the vendor's husband had to get his leg ampu-tated after being re-admitted in the Bombay Hospital on 28-5-1980. If it were true that the vendor-landlady wanted the balance of sale consideration in a lumpsum, the purchaser-tenant must also be deemed to have agreed to pay the said balance in a lumpsum by necessary implication and, therefore, when the vendor-landlady served her with notice of repudiation dated 10-11-1980, she ought to have tendered the entire balance of sale consideration instead of tendering four instalments by cheques covering the instalments for the months of July, August, Sept. and Oct. 1980. It was pleaded and also suggested during arguments that as the vendor had not obtained nil encumbrance certificate, clearance certificate from Income-tax department and permission from the Urban Land Ceiling Authorities, she was not entitled to the entire balance of sale consideration. However, this plea deserves to be rejected, because as per the relevant clause in the Agreement of Sale (Ex. A.1), they were required to be obtained by the vendor-landlady 'before each sale deed to be registered. 'The payment of instalment's, or the balance of sale consideration was not dependent or conditioned on obtaining the said documents by the vendor-landlady. The evidence brought on record also did not indicate thanhe purchaser-tenant had sufficient funds in her bank account on the date the four cheques for Rs. 10,000/- each were drawn in order to show that if the cheques were presented for encashment, they wouldhave been honoured. According to me, it was necessary to do so, because the cheques are not valid tenders and further because the initial cheque for Rs. 30,000/- given at the time of execution of the Agreement of Sale was twice dishonoured when presented for encashment, as would be evident from the Certificate dated 9-10-1985 (Ex.B. 3) issued by the Central Bank of India, Bombay Main Office. Bouncing of the eheque for Rupees 30,000/- itself would have provided a basis for repudiating the contract, but it was waived by the vendor-landlady. The failure to prove that the purchaser-tenant had sufficient funds to honour the four cheques for Rs. 10,000/- each issued by her in favour of the vendor may be over-looked on the face of the fact that two demand drafts for Rs. 30,000/- each were subsequently sent by the purchaser-tenant to the vendor-landlady, but that may not prove the fact that the purchaser-tenant was in a position to pay the entire balance of sale consideration, which was to the extent of Rs. 1,75,000/- on the date of repudiation of contract by the vendor-landlady as was offered by her through her reply notices. All these facts, according to me, do make out a case for not exercising the discretion in favour of the purchaser-tenant, even if it is held that time was not the essence of contract. In Gomathinayagam Pillai v. Palaniswami Nadar, : [1967]1SCR227 , it was held that at page 870:
'..... It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing must be in language which is unmistakable: it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, natureof the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the Written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence.'
The principle deducible from the said decision of the Supreme Court appears to be that if the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract; but this presumption may be rebutted by showing that the parties intended the time of the essence of contract and may also be inferred from the conduct of the parties and the surrounding circumstances at or before the contract. As in the present case, the contract was for sale of the immovable property, the presumption would be that time was not of the essence of contract. But the use of the words, 'the Purchaser shall make abovesaid monthly payments promptly and without delay on his part', followed by the words 'That both parties shall agree that time is essence of contract for this agreement', used in the agreement, coupled with the conduct of the parties in payment and receipt of the monthly instalments for the months of April, May and June, 1980; admission of the appellant in her reply notice dated 14-11-1980 that it was true that she was to pay Rs. 10,000/- every month and the apparently false defence of the appellant that in July 1980, she was asked by the respondent to pay the balance of sale consideration in a lump-sum, as well as the following surrounding circumstances at or before the contract do give an indication that time was the essence of contract:
(1) The parties were residents of Visakha-patnam. The agreement to sell was executed at Visakhapatnam and the house in respect of which the agreement was entered into was also situated at Visakhapatnam, which was at a distance of about 1400 K.M. from Bombay as per Survey of India Map.
(2) At or immediately before the date ofcontract, the only need for money faced by the vendor-landlady was in connection with the medical treatment of her husband at Bombay. That is why a cheque for Rs. 30,000/-, drawn on Bank of India, Bombay was given by the purchaser-tenant and accepted by the vendor-landlady, besides a cash amount of Rs. 5,000/- on the, date of agreement dated 21-2-1980. Soon after the date of agreement, the vendor-landlady proceeded to Bombay with 'Her husband, who was admitted in Bomb'ay Hospital on 28-2-1980 as per Medical Certificate (Ex. B. 5).
(3) The cheque for Rs. 30,000/- was twice dishonoured, as would be evident from the Certificate (Ex. B. 3) issued by the Central Bank of India, Bombay Main Office. However, it appears that the vendor-landlady could not avoid the contract on that basis, as she was, in need of money, because, her husband was already hospitalised.
(4) The three instalments of Rs. 10,000/-each for the months of April, May and June, 1980 were paid by the appellant and accepted by the respondent.
(5) The left leg of the respondent's husband was amputated on 10-7-1980. Earlier he was 'operated on Femove-Poplitial by-pass on left-leg'. (See Ex. B. 5).
(6) From the said facts, it may be inferred that the respondent was in real and immediate need of money for the treatment of her husband and, therefore, she ventured to sell her house for Rs. 2,40,000/-. However, as the appellant was not having money to the extent of Rs. 2,40,000/- on the date of agreement and the respondent was also not in immediate need of the entire amount of Rs. 2,40,000/-, she remained satisfied with the advance of Rs. 35,000/- to meet her immediate need and further felt secured for future month to month expenditure by a clause in the agreement for payment of the balance of sale consideration by monthly instalments of Rs. 10,000/- each.
(7) In the light of the aforesaid facts, it appears that the initial presumption that time was not of the essence of contract stands rebutted from the conduct of the parties andthe surrounding circumstances at or before the contract.
(8) In the alternative, the said facts, do afford a basis for not exercising the discretion in favour of the purchaser-tenant.
12. The learned counsel for the parties admitted that there has been a tremendous escalation in prices of lands and buildings in the town of Visakhapatnam, but as held by the Supreme Court in Satyanarayana v. Yelloji Rao (supra), and by the Madras High Court in P. Lakshmi Ammal v. S. Lakshmi Ammal, : AIR1991Mad137 , escalation in prices is no ground to refuse specific performance of a contract. Not only this, during the course of arguments, the learned counsel for the appellant also made an offer to pay a sum of Rs. 10,00,000/- (Rupees ten lacs only) by way of price, if the respondent agreed to execute the sale deed in pursuance of the agreement dated 21-2-1980 (Ex. A.1), The offer was not accepted by the respondent. I am, therefore, not influenced by these matters while considering this appeal on merits. But what impels me to exercise my discretion against granting a decree for specific performance, may be examined :--
(1) If the appellant was right in contendingthat in July 1980 she was asked by therespondent to pay the balance of sale consideration in a lumpsum, she would not havesent only a sum of Rs. 40,000/ - along with herreply notice dated 14-11-1980 (Ex. A. 4),representing the instalments due by the timeof the reply notice. She would have tenderedthe entire balance of sale consideration whileexpressing 'her willingness to pay the balanceof the entire sale price'. This willingness wasalso not unconditional. It was subject to 'aclearance from the Urban Land CeilingAuthorities and also the clearance underSection 230A of the Income-tax Act', thoughas per the agreement dated 21-2-1980, payment of the balance of sale consideration wasnot dependent on any such condition ofobtaining-clearance certificates by the respondent.
(2) The appellant could not prove that she had sufficient funds on 13-11-1980 when thefour cheques for Rs. 10,000/- each were offered by her to the respondent, so (hat it could be held that if presented, the cheques would have been honoured by the Bank.
(3) The last notice dated 17-1-1981 (Ex. A.13) sent by the appellant did not accompanyany, cheque or demand draft for the entirebalance towards the sale price. It was to theextent of Rs. 1,75,000/- after giving adjustment of the amounts paid by way of advanceon the date of agreement and by way ofmonthly instalments for the months of April,May and June, 1980. The demand drafts sentalong with the notice were only to the extentof Rs.60,000/- in all.
(4) There is no evidence on record to show that on the date of suit, the appellant had with her a sum of Rs. 1,75,000/- for payment towards the balance of sale consideration. Capacity to raise funds cannot be equated with readiness to pay on the date of suit.
13. The appellant examined her husband Parusuram Hemarajani as PW 1 in support of her case. He made so many contradictory statements in his evidence before the Court. The appellant also took somersaults in her defence as disclosed in her various notices and/or reply notices and during trial of the suit. Thus changing nature of her defence and her failure to prove that she was possessed of sufficient funds on the date of suit to enable her to pay the entire balance of sale con-sideration do compel me to hold that the Court below was right in refusing to grant a decree for specific performance of contract in favour of the appellant.
CROSS OBJECTION :
14. This takes me to the alternative reliefs claimed by the appellant in her suit for specific performance of contract and the Cross Objection preferred by the respondent. In the alternative, the appellant had claimed refund of sale consideration of Rs,65,000/-paid to the respondent together with compensation for a sum of Rs. 1,00,000/-. The Court below was pleased to direct refund of Rs. 65,000/-, as also to award compensation to the tune of Rs. 20,000/-. The learned counsel for the respondent did not disputethat the appellant was entitled to refund of Rs. 65,000/-, but disputed her entitlement for compensation to the tune of Rs. 20,000/-.
15. It does not appear necessary for me to discuss the various arguments advanced-before me on either side about the quantum or entitlement of compensation. There do appear circumstances justifying grant of compensation to the appellant. The first and foremost is that the amount of Rs.63,000/-has remained in deposit with the respondent ever since June or July, 1980. Had it been invested and reinvested in National Savings Certificates or in some nationalised Bank, it would have multiplied by more than four times within a period of 14 1/2 years from the date of agreement to the date of this judgment. But the arrears of rent from July, 1980 to December, 1994 at the rate of Rs. 670/- per month has also piled up to the tune of Rs. 1,16,580/-. If the amount of Rs. 65,000/-received by the respondent towards the sale consideration is adjusted against or deducted from this amount of Rs. 1,16,580/- payable by way of rent by the appellani, the balance remains at Rs. 51,580/- towards the arrears of rent. I am of the view that taking into account over all picture of the case and the equities to be worked out, it would serve the ends of justice, if the compensation payable to the appellant is enhanced from Rs. 20,000/- to this amount of Rs. 51,580/-, so that nothing remains payable either by the appellant (tenant-purchaser) to the respondent (landlady-vendor) towards the decree for arrears of rent till 31-12-1994; or by the respondent (vendor landlady) to the appellant (purchaser-tenant) towards the decree for refund of sale consideration of Rs.65,000/- with compensation to the extent of Rs. 51,580/-. In other words, by adjustment or set off, both the decrees; one in favour of-the appellant and the other in favour of the respondent shall stand satisfied with the result that only on and from 1-1-1995, rent at the rate of Rs. 670/- per month shall be payable by the appellant to the respondent in the appeals.
RESULT :--
16. In the result, the Cross Objection preferred by the respondent in AppealNo. 464/88 is hereby dismissed, but
(i) while maintaining the dismissal of the suit for specific performance of the contract, Appeal No. 464/88 is partly allowed by enhancing the amount of compensation from Rs. 20,000/- to Rs. 51,580/-; and
(ii) while maintaining the decree for ar-rears of rent, Transfer Appeal No. 1191/91 is partly allowed by setting aside the decree for ejectment passed in favour of the respondent;
(iii) there shall be no order as to costs either in Cross Objection; or in any of the two appeals;
(iv) both the decrees in the two suits, as modified by this common judgment, shall stand mutually adjusted and fully satisfied; but the respondent as landlady shall be entitled to recover rent from the appellant-tenant at the rate of Rs. 670/- per month on and from 1-1-1995.
17. Order accordingly.