A.K. Shrivastava, J.
1. Feeling aggrieved by the judgment and decree dated 28-9-1995 passed by learned XIth, Additional Judge to the Court of District Judge, Indore in civil suit No. 78-A/90 decreeing the suit of plaintiff for specific performance of contract, the defendants/appellants have preferred this appeal.
2. The facts shorn on unnecessary details lie in a narrow compass. In brief the case of plaintiff is that, he is the tenant in the house bearing municipal No. 268 (New No. 381), situated at M.G. Road, Indore, the owner of which is appellant Vijay Bahadur (hereinafter referred to as the appellant No. 1).
3. The appellant No. 1 agreed to sell his house to the plaintiff for a consideration of Rs. 40,000/- (Rupees forty thousand only) and executed a document of agreement of Sale (Ex. P/1) on 6-12-1988 and received Rs. 15,000/- (Rupees Fifteen Thousand only) as an advance money from the plaintiff/respondent. It was agreed between the parties in the said agreement that appellant No. 1 would get his name mutated in the Municipal record of the disputed house within a period of six months and thereafter, would receive the balance of sale price Rs. 25,000/- (Rupees Twenty Five Thousand Only) and execute the sale-deed in favour of the plaintiff. According to the plaintiff, the appellant No. 2 had knowledge about the execution of the document of agreement of sale (Ex. P/1). It has been contended by the plaintiff that he always remain ready and willing to get the sale-deed executed in his favour, but, as appellant No. 1 failed to get his name mutated in the Municipal record, the sale deed could not be executed.
4. It has been putforth by the plaintiff that, when his wife went to the shop of appellant No. 2 in the month of August, 1990, she was informed by the appellant No. 2 that he is going to purchase the suit house, in which the plaintiff is residing. Upon getting this information, she immediately narrated, the said fact to the plaintiff. In the month of September, 1990, the plaintiff came to know that the disputed house has been sold to the appellant No. 2 for a consideration of Rs. 80,000/- (Rupees Eighty Thousand only). The plaintiff, thereafter, sent notice (Ex. P/3) to the appellant No. 1 to execute the sale-deed. In the plaint, it has been pleaded that despite having served the said notice, the plaintiff failed to execute the document of sale, hence, the suit for specific performance of the contract was filed on 20-10-1990. It has also been pleaded by plaintiff that despite having entered into an agreement of sale, the appellant No. 1 sold the disputed house in favour of appellant No. 2. As a result of which a relief of cancellation of the said sale deed dated 7-9-1990 was sought.
5. The defendants filed separate statements denying the plaint averments. According to the appellant No. 1, the plaintiff was in need of money, hence, he took back the earnest money of Rs. 15,000/- (Rupees fifteen Thousand Only) in the month of January, 1989 and cancelled the agreement. Thereafter, he entered into an agreement of sale with the defendant/appellant No. 2 on 3-1-1990. A public notice (Ex. D/1) was also published in 'Dainik Bhaskar' on 18-6-1990 regarding this sale but no body including the plaintiff, objected, hence, he executed the registered sale-deed of the house in question, in favour of the defendant/appellant No. 2. It has been pleaded by the appellant No. 1 that plaintiff was never ready and willing to perform his part of contract and was not at all interested in getting the sale deed executed.
6. The defendant/appellant No. 2 in his written statement denied the plaint averments and pleaded a total ignorance about the previous agreement dated 6-12-1988. It has been pleaded by him that no conversation took place between him and plaintiff's wife in the month of August. 1990 and the entire story about it, is baseless and false. After the publication of public notice in a news paper 'Dainik Bhaskar' dated 18-6-1990, sale-deed was executed in his favour on 7-9-1990 i.e. after more than two and half months, during this period no body, objected, including the plaintiff.
7. The plaintiff amended his plaint by adding an alternate relief of damages of Rs. 15,000/- with interest.
8. The plaintiff examined himself and three other witnesses namely P.W. 2 Manju Sharma, who is his wife, P.W. 3, Subhash Awasthi, P.W. 4 Rajkumar and placed Ex. P/1 to P/5 on the record. On the other hand, defendants (Vijay Bahadur and Champalal) examined themselves and also examined D.W. 3 Jalam Singh and D.W. 4 Ramesh Chandra Sharma and placed Ex. D/1 and D/2, the documents, on record.
9. The learned trial Judge after appreciating the evidence and documents, decreed the suit of plaintiff for specific performance of the contract and further held that the sale deed dated 7-2-1990 executed by defendant No. 1 in favour of defendant No. 2 Champalal is ineffective and accordingly, set-aside it. The learned trial Judge further passed decree of permanent injunction in favour of plaintiff. Hence, this appeal has been filed by both the defendants.
10. In this appeal Shri S. R. Saraf, learned counsel for the appellants has submitted that the learned trial Court erred in law by holding that plaintiff was ready and willing to perform his part of contract. According to him, neither there is any pleading to this effect nor it has been proved by the plaintiff. It has been putforth by him that the learned trial Judge committed serious error of law in holding that the sale-deed (Ex. D/2), executed by appellant No. 1 in favour of the appellant No. 2 is bogus, sham transaction and without consideration. He has further contended that the agreement between the plaintiff (Surendra Kumar) and defendant (Vijay Bahadur) came into an end as the plaintiff was in need of money and he requested to return his earnest money Rs. 15,000/-, which was paid to him. In his vehemence, it has been canvassed by Shri Saraf that learned trial Judge committed a serious error of law by placing reliance on the notice (Ex. P/3) sent by the plaintiff, after the execution of the sale-deed (Ex.D/1) in favour of the defendant No. 2 and after near about one year and nine months of the execution of the documents of agreement to sell (Ex. P/1). To bolster his submission, he has contended that in the agreement dated 6-12-1988, six months time was agreed between the parties to get the sale-deed executed. During this period, the plaintiff never tried to get the sale-deed executed and he sent notice (Ex. P/3) on 19-9-1990 after the publication of public notice in the news paper (Ex. D/1) and the execution of sale-deed in favour of Champalal. Thus, the conduct of the plaintiff was that he was not ready and willing to purchase the suit, property. He has further submitted that the appellant No. 2 (Champalal) is the bona fide purchaser of a valuable consideration without prior knowledge of the agreement. According to the learned counsel, the learned trialJudge erred in law in decreeing the suit. To bolster his submission Shri S. R. Saraf, learned counsel for the appellants has placed reliance upon K.S. Vidyanadam v. Vairavan, AIR 1997 SC 1751, Ramji Patel v. Rao Kishore Singh, AIR 1929 Privy Council 190, Ram Awadh (dead) by LRs. v. Achhaibar Dubey, (2000) 2 SCC 428 : (AIR 2000 SC 860), P.R. Deb and Associates v. Sunanda Roy, (1996) 4 SCC 423 : (AIR 1996 SC 1504). and His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526 : (AIR 1996 SC 2095).
11. Combating the aforesaid submissions made by the learned counsel for the appellants, Shri G..M. Chaphekar, learned Senior Counsel assisted by Shri D.M. Kulkarni submitted that the plaintiff had paid Rs. 15,000/-, therefore, he would be interested in purchasing the property, he is a Bank employee, having sufficient funds and thus, the plaintiff always remain ready and willing to perform his part of the contract and on account of failure of appellant No. 1, the sale-deed could not be executed. According to him the learned trial Judge rightly decreed the suit in favour of the plaintiff and there is no error either on the fact or in law in the judgment of the trial Court. According to him the appeal has no merit and deserves to be dismissed. In support of his contention learned Senior counsel Shri Chaphekar has placed reliance on Division Bench decision of this Court reported in Mulla Badruddin v. Master Tufail Ahmed, AIR 1963 MP 31, Bibi Jalbunisha v. Jagdish Pandit, (1997) 4 SCC 481, Smt. Indira Kaur v. Sheo Lal Kapoor, (1988) 2 SCC 488 : (AIR 1988 SC 1074), Ramesh Chandra Chandiok v. Chuni Lal Sabharwal (dead) by his legal representatives, AIR 1971 SC 1238, Syed Dastagir v. T.R. Gopalakrishna Setty, (1999) 6 SCC 337 : (AIR 1999 SC 3029), Motilal Jain v. Ramdasi Devi (Smt), (2000) 6 SCC 420 : (AIR 2000 SC 2408), Satyanarayana v. G. Yelloji Rao, AIR 1965 SC 1405, The Bank of India Ltd. v. Jamsetji A. H. Chinoy and Messrs. Chinoy and Co., AIR 1950 Privy Council 90.
12. Before appreciating the rival contentions of learned counsel for the parties, it would be relevant to re-write certain provisions of Specific Relief Act, 1963 (hereinafter referred to as 'the Act'). Chapter II of the Act relates to specific performance of contracts. Section 10 of the Act pertains to the Specific Performance of Contracts which are enforceable. Section 10 reads as under :--
10. Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced--
(a) when there exists no standard for ascertaining actual damage caused by the, non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation.--Unless and until the contrary is proved, the Court shall presume--
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases :--
(a) where the property is not ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
Section 14 of the Act relates to the contracts which are not specifically enforceable, the relevant portion reads as under :--
14. Contracts not specifically enforceable (1) The following contracts cannot be specifically enforced, namely :--
(a) a contract for the non-performance of which compensation is an adequate relief;
(b) to (d) ...............
Section 16 of the Act relates to personal bars to relief, which reads as under :--
16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--
(a) who would not be entitled to recover compensation for its breach; or
(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant.
Explanation.--For the purposes of Clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court :
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.
Section 19 of the Act pertains the relief which the parties are entitled, which reads as under :--
19. Relief against parties and persons claiming under them by subsequent title.--Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against--
(a) either party thereto :
(b) any other person claiming under him by a title arising subsequently to be contract, except a transferee for value who has paid his money in good faith and without notice of the original contract:
(c) to (e) ...............
Section 20 of the Act confers power to the Court to grant the decree of specific performance which read as under :--
20. Discretion as to decreeing specific performance.--(1) The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.
(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance :--
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract of the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in Its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause (b).
Explanation 2.--The question whether the performance of a contract would involve hardship on the defendant within the meaning of Clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) and (4) ...............
Section 21 of the Act relates to the power of the Court to award compensation which reads as under ;--
21. Power to award compensation in certain cases :--(1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.
(2) If, in any such suit, the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly,
(3) If, in any such suit, the Court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation of breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.
(4) In determining the amount of any compensation awarded under this Section, the Court shall be guided by the principles specified in Section 73 of the Indian Contract Act, 1872.
(5) No compensation shall be awarded under this Section unless the plaintiff has claimed such compensation in his plaint:
Provided that where the plaintiff has not claimed any such compensation in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.
Explanation.--The circumstance that the contract has become incapable of specific performance does not preclude the Court from exercising the jurisdiction conferred by this section.
13. The case law cited by learned senior counsel Shri G. M. Chaphekar throw sufficient light that the conduct of the parties is to be seen. Further, for the performance of readiness and willingness, it. is not necessary that plaintiff, should tender the money, but, it should be proved that he is having the capacity to pay the money.
14. In the case Mohanlal (through LRs) v. Mirza Abdul Gaffar, (1996) JLJ 354, it was held by the Apex Court that in a suit for specific performance sale the plaintiff is required to plead and prove his readiness and willingness to perform his part of contract and it was further held that when the remaining consideration was neither paid. nor deposited or offered, the readiness and willingness cannot be inferred.
15. On the point of readiness and willingness the plaintiff has pleaded in Para 6 of the plaint that he was ready to perform his part of contract but the defendant/appellant No. 1 did not mutate his name in the municipal record of the suit house, for which he made several request to him. In Para 7 of the plaint, he has pleaded that appellant No. 1 despite having knowledge of the agreement with the plaintiff, to cheat him, executed sale deed in favour of defendant No. 2 for which he was having no right. He could have executed the sale deed in his favour only after obtaining Rs. 25,000/- the balance sale price. He was ready to abide of the conditions of the agreement. It will be apposite to mention that no where in the plaint, it has been pleaded by the plaintiff that he was having sufficient funds with him or was having capacity to pay the sale price. The facts regarding readiness and willingness of the plaintiff cannot be inferred from these averments pleaded by him in his plaint. In this view of the matter, it will be difficult to hold that plaintiff was ready and willing to perform his part of contract.
16. In this context a three Judges decision of the Supreme Court in Ram Awadh (dead) by L.Rs. v. Achhaibar Dubey, (2000) 2 SCC 428 is relevant, Para 6 of the said judgment reads as under :--
The obligation imposed by Section 16 is upon the Court not to grant specific performance to a plaintiff who has not met the requirements of Clauses (a), (b) and (c) thereof. A Court may not, therefore, grant to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement the specific performance whereof he seeks. There is, therefore, no question of the plea being available to one defendant and not to another. It is open to any defendant to contend and establish that the mandatory requirement of Section 16(c) has not been complied with and it is for the Court to determine whether it has or has not been complied with and, depending upon its conclusion, decree or decline to decree the suit. We are of the view that the decision in Jagraj Singh case is erroneous.
17. The Supreme Court in the case His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526 has held that suit for specific performance of contract for sale, readiness and willingness of plaintiff to perform his part of contract is to be ascertained from the conduct of the party and attending circumstances. Their Lordship further held that where the plaintiff neither had sufficient funds to pay the consideration amount nor was he acting promptly within the stipulated time, where time was of the essence of the contract, the plaintiff was not entitled to decree for specific performance of the contract. It will be relevant to reproduce Paras 2 and 3 of the said decision which reads as under :--
2. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised. There Is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had ever funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale-deed to the defendant within 7 days of the execution of the agreement, i.e. by 27-2-1975. The draft sale deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiff's part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The fact of this case would amply demonstrate that the petitioner/plaintiff was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time was of the essence of the contract.
3. It is sought to be contended by Mr. B. K. Mehta, the learned senior counsel for the petitioner, that the petitioner has performed the essential terms of the contract. Essential terms of the contract is that he has to return the approved draft sale deed which he has already returned to him. But amendment sought in the sale deed is not of material particulars and is not an essential terms and, therefore, the High Court was in error in considering this aspect of the matter. We find no force in the contention. The essential term of the contract is executing the sale deed within the stipulated period. He did not perform his part of the contract within the stipulated period. The High Court was right In refusing to enforce the contract. It being a discretionary remedy, the High Court has exercised sound judicial discretion to negate the relief of specific performance of the contract.
18. In Ex-P/1 condition to get the sale-deed executed within six months has been embodied. To understand the nature of the agreement, it will be relevant to re-write the said condition :--
(Vernacular matter omitted..........Ed.)
19. On going through the aforesaid condition, it has become crystal clear that it was agreed between the parties to get the sale-deed executed within a period of six months, in between, the vendor would get his name mutated in the Municipal record. As the suit house was still in the name of his father Kanchan Singh in the Municipal record. In Para 2 of the said document, it has been mentioned that the suit house fell in the share of appellant No. 1 after partition and he Is the sole owner of the suit property. The plaintiff, who was examined as PW/1 in Para 13 has specifically given answer to the question put to him, that even without mutation, he could have purchased the suit property.
20. It has been noticed herein above that the document Ex. P/1 is dated 6-12-1988 and after the expiiy of six months, the plaintiff did not send any notice to appellant No. 1 and he sent notice Ex. P/3 by registered A.D. post only on 19-9-1990, i.e. near about one year and nine months after the execution of Ex. P/1. In the notice the plaintiff has averred that appellant No. 1 is initiating to alienate the suit house on higher price. In this context, in Para 7 of his testimony, he has stated that in the year 1990, he came to know that the suit house has been sold. In Para 15 he has said that he came to know that the sale deed of the said house has been registered in favour of Champalal. Surprisely, when the plaintiff was ready to get the sale-deed executed, even without mutation, then why he did not take any action after the expiry of six months. At this juncture, it will be relevant to mention that a public notice in news paper was published on 18-6-1990 and in the notice the Municipal number of the house and its location at M. G. Road has been mentioned, despite it, the plaintiff kept silent. The sale deed Ex. D/2 in favour of defendant No. 2 Champalal was executed after near about three months of public notice published in news paper and thereafter on 19-9-1990, the plaintiff sent the notice Ex. P/3. Thus, it remains no doubt that so as to make out a cause to file a suit, the notice (Ex. P/3) was sent after more than one year and nine months from the date of the execution of Ex. P/1.
21. The Apex Court in the case (Mrs. Sandhya Rani Sarkar v. Smt. Sudha Rani Debi), AIR 1978 SC 537 has held as under :--
In a suit for specific performance of contract for sale of immovable property it is incumbent upon the plaintiff to affirmatively establish that all throughout he or she, as the case may be, was willing to perform his or her part of the contract, and that the failure on the part of the plaintiff to perform the contract or willingness to perform her part of the contract may in an appropriate case disentitle her to relief, one such situation being where there is inordinate delay on the part of the plaintiff to perform his or her part of the contract.
The question whether relief of specific performance of the contract for the purchase of immovable property should be granted or not always depends on the facts and circumstances of each case and the Court would not grant such a relief if it gives the plaintiff an unfair advantage over the defendant.
22. A Five Judges Bench of Supreme Court in the case Smt. Chand Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs., AIR 1993 SC 1742, in Para 24 has held as under :--
24. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even, if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the condition are :
1. from the express terms of the contract;
2. from the nature of the property; and
3. from the surrounding circumstances, for example : the object of making the contract :
In this context, the latest pronouncement of Supreme Court in Golap Chand Agarwalla G. K. Agarwalla v. Gopal Chandra Pal, JT (2002) (1) SC 406 may also be seen. In the case of P. R. Deb and Associates, (Supra), the Apex Court has held that the plaintiff, in a suit for specific performance, must be ready and willing to cany out his part of the agreement at all material times. Although in the case of a sale of immovable property time is not of the essence of the contract, it has to be ascertained whether under the terms of the contract, when the parties; named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. The Court should meticulously consider all facts and circumstances before granting specific performance. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage. In this, decision the Supreme Court further held that part payment must be made within a reasonable time and failure to do so would seriously affect proposed vendor's right.
23. In the present case, the plaintiff paid earnest money Rs. 15,000/- and it was agreed between the parties, that the balance of Rs. 25,000/- will be paid at the time of registration of sale-deed. The plaintiff has not at all pleaded that he was having Rs. 25,000/- with him or was having the capacity to pay the said amount. Though, in Para 7, it has been pleaded by him that he was having right to get the sale deed ex- ecuted, after payment of Rs. 25,000/- to defendant No. 1 for which he was always ready to abide the condition embodied in agreement, but, no where he has pleaded that he was having Rs. 25,000/- with him or was having the capacity to pay this amount.
24. The evidence of plaintiff and his witnesses regarding readiness, willingness or payment or tender of the balance sale price is not clear, cogent and trustworthy. In Para 6 of his testimony the plaintiff had said that in rainy season, he approached the appellant No. 1, in Para 15 he states that for the first time in the year, 1990 i.e. after near about one year and two months, he approached the appellant No. 1 to get the document of sale deed registered, he was accompanied by his wife. Second time he went in March, 1990, thereafter, he changed his version and said that he had wrongly stated 1990, indeed, it was 1989. He had further stated that, thereafter, in the month of July, 1989, he approached the appellant No. 1 and thereafter, he did not go, but, his wife went to approach the appellant No. 1, but she went along with his brother in the rainy season of 1989.
25. On the other hand, P.W. 2 Manju Sharma who is the wife of the plaintiff has said that her husband approached the appellant No. 1 in April, 1989 and thereafter, after two months she and her brother in law approached the appellant No. 1, It be seen that, no where this witness had said that she approached the appellant No. 1 in the rainy season of year 1989 while, plaintiff in Para 15 says that his brother and wife approached the appellant No. 1 in the rainy season of 1989. This witness specifically says that she went along with her brother in law Hemkumar to approach the appellant No. 1.
26. The plaintiff did not examine his brother Hemkumar with whom it is said that his wife went to approach the appellant No. 1. He had examined his another brother P.W. 4 Rajkumar, who had said that he went twice to meet appellant No. 1 along with his Bhabhi (Manju Sharma) Neither plaintiff nor his wife has said that P.W. 4 Raj Kumar was accompanied with Manju, on the contrary it has come in the evidence that Manju went with Hem Kuar, who has not been examined. Thus, if the testimony of these three witnesses are kept in juxtaposition, it would reveal that the statement of all the witnesses are contradictory to each other. In this view of the matter, it is very difficult to infer that the plaintiff was always remain ready and willing to perform his part of contract and for that he approached the appellant No. 1. It would be apposite to mention that in the plaint, it has been pleaded by the plaintiff that because the name of the appellant No. 1 was not mutated in the Municipal record, therefore, the sale deed could not be executed while in the evidence he has developed a new story that when he approached the appellant No. 1 to get the sale deed executed his leg was fractured and was plastered and on this count, the appellant No. 1 was unable to execute the sale deed. In this view of the matter, there is variance between the pleading and proof and which would be an additional factor to infer that plaintiff was not ready and willing to perform his part of contract.
27. In Para 20 of its judgment, the trial Court merely on the basis of notice Ex. P/3 has held that the plaintiff was ready and willing to perform his part of contract, completely ignoring the pleading and the conduct of the plaintiff.
28. It be seen before the enactment of the present Specific Relief Act, 1963, the earlier Specific Relief Act of 1877 was in force. The equivalent Section of Section 16 of the present Act was Section 24 of the old Act which reads as under :--
Personal bars to the relief :
24. Specific performance of a contract cannot be enforced in favour of a person--
(a) who could not recover compensation for its breach;
(b) who has become Incapable of performing, or violates, any essential terms of the contract that on his part remains to be performed;
(c) who has already chosen his remedy and obtained satisfaction for the alleged breach of contract;
or
(d) who, previously to the contract, had notice that a settlement of the subject-matter thereof (though not founded on any valuable consideration) had been made and was then in force.
On bare perusal of Section 24 of the old Act it would reveal that under the said Act the plaintiff was not required to aver and prove the readiness and willingness, which, we find place in Section 16(c) of the present Act. Thus, if the law so require to aver and prove the readiness and willingness, the plaintiff should not only aver but should also prove the same.
29. Whether plaintiff was ready and willing to perform his part of contract is a pure question of fact and no straight jacket, formula can be framed in that respect. It is to be gathered from the facts and circumstances of the each case, that how the plaintiff has averred, the facts in the plaint and how he has proved them in his evidence. On the anvil of the spirit of the Section 16(c) of the present Act, the plaintiff has failed to prove that he was ever ready or willing to perform his part of the contract, The circumstances which indicates that he was not ready and willing can be summarized in nut shell as under ;--
(I) In the plaint though it has been pleaded that the plaintiff was ready to abide all the conditions embodied in the agreement (Ex. P/1) and the appellant No. 1 was obliged to execute the sale deed after obtaining the balance sale price of Rs. 25,000/- from him, but, no where it has been so pleaded that he was having sufficient money or capacity to pay money;
(II) it was agreed between the plaintiff and the appellant No. 1 in the agreement (Ex. P/1) that the sale deed shall be executed within six months. If the plaintiff intent to purchase the property, he would have given notice to the appellant No. 1 after six months for the non-performance of his part;
(III) that the notice was not given by the plaintiff, immediately, after expiry of six months and was given on 19-9-1990 after the execution of the sale deed (Ex. D/2) i.e. after the expiry of one year and nine months, which would indicate, that he was not ready and willing to purchase the suit property;
(IV) the evidence of the plaintiff and hiswitnesses, as noticed hereinabove, is contradictory to each other regarding his conduct; '
(V) In the plaint it has been pleaded that because the appellant No. 1 could not get his name mutated, therefore, the sale deed was not executed, while in the evidence, altogether new story has been developed that on account of fracture sustain to the appellant No. 1, the sale deed could not be executed ;
(VI) the plaintiff in paragraph 13 has said that he was ready to purchase the suit property despite the name of the appellant No. 1 was not mutated, then why the plaintiff did not get sale deed executed;
(VII) in para 16 of his testimony the plaintiff has said that in September, 1990 his wife informed that the suit house has been sold but in the notice Ex. P/3 which was sent on 19-9-1990, he has not stated this fact;
(VIII) vide Ex. D/1 a public notice published in daily news paper on 18-6-1990 the house No. 268 situated at M.G. Road, Indore has been mentioned, It will be relevant to mention that in the document of agreement to sale (Ex. P/1), the same house No. 268 has been mentioned and the plaintiff himself resides at M.G. Road, Indore, but, he did not raise any objection.
All these facts and circumstances mentioned hereinabove indicates that the plaintiff was not at all ready and willing to perform his part of contract. It has been discussed on the basis of evidence scanned hereinabove that after the execution of the document of agreement Ex. P/1, the plaintiff did not approach the appellant No. 1 and for the first time after a period of near about one year nine months, when the sale deed was executed in favour of the defendant No. 2, notice Ex. P/3 was sent. In this view, of the matter from all the angles, after x-raying the entire gamut, it is held that the plaintiff was not at all ready and willing to perform his part of contract and therefore, the finding of learned trial Court holding that the plaintiffs was ready and willing to perform his part of contract is not only erroneous but is contrary to the pleading and evidence, therefore, it is set aside.
30. The learned trial Court in para 15 has held that the sale deed (Ex. D/2) executed by the appellant No. 1 in favour of the appellant No. 2 is collusive and without consideration. It be seen that there is no pleading in the plaint in this regard, the trial Court even did not frame any issue and no evidence was led by the plaintiff and therefore such finding could not be arrived by the trial Court. The Division Bench of this Court in the case Ramjilal Tiwari v. Vijay Kumar, 1970 JLJ 20 has held that it is well established that it is not open to third parties to challenge consideration for a sale. In this view of the matter the said finding cannot be sustained in the eyes of law.
31. The transaction between the plaintiff and the appellant No. 1 could not be finalised and the execution of the sale deed in favour of the plaintiff did not take place. meaning thereby the balance of the sale price Rs. 25,000/- was not received by the appellant No. 1 if that be the position, then why without consideration, he would execute a sale deed in favour of the appellant No. 2. The learned trial Court has totally ignored this material aspect of the matter.
32. Shri Chaphekar, learned senior Advocate vehemently argued that the defendant No. 2 is not a bona fide purchaser, because, he did not make any enquiry before purchasing the suit property, either from the plaintiff or from the persons living in the same locality. According to him, the plaintiff was possessing the suit property, as the tenant of appellant No. 1 and therefore, the defendant No. 2 should have enquired from him, regarding the nature of his possession. This argument, prima facie appears to be attractive, but, on deep scrutiny, found to be devoid of any force. Defendant No. 2 Champalal had pleaded in his written statement that he was not having cordial relation with the plaintiff. They were not having good relations between them for last several years. He has proved this fact in paras 3 and 7 of his testimony. Therefore, in the present circumstances, it was not necessary to make any enquiry from the plaintiff.
33. Much reliance has been placed by the trial Court on the case Dr. Govinddas v. Smt. Shantibai, AIR 1972 SC 1520 holding that defendant No. 2 was having prior knowledge of agreement between the plaintiff and the appellant No. 1. It has been held that defendant No. 2 and the plaintiff were not having cordial relations between them and there was enmity between them, therefore, no enquiry was contemplated by the defendant No. 2 from the plaintiff. In the case Dr. Govind Das (Supra), the owner of the property, namely Dagdu had a talk with the purchaser Govinddas on March 16, 1960 and the sale deed was executed on the next date on March 17, 1960 and registered on 18th March, 1960 but in the present case, before the sale deed (Ex. D/2) was executed a public notice was published in the news paper (Ex. D/1) on 18-6-1990 and the sale deed was executed near about after three months on 7-9-1990 and therefore, the case of Dr. Govinddas (supra) is not at all applicable in the present case.
34. Shri S.R. Saraf, learned counsel for the appellants in his vehemence putforth before me that the plaintiff was in need of money as a result of which he requested the appellant No. 1 to pay the earnest money Rs. 15,000/- back to him. Shri Chaphekar, learned senior Advocate for the respondent invited my attention to the evidence of the parties and their witnesses on this point. To me, the evidence in this regard is sufficient to hold that the earnest money was not returned and the learned trial Court did not err in holding that the earnest money was not returned by the plaintiff. But, this in itself will not escape the plaintiff to prove his readiness and willingness. As discussed hereinabove in detail, the plaintiff has failed to prove his readiness and willingness, therefore, he is not entitled to the decree of specific performance of the contract.
35. The learned Senior counsel for the respondent relied the case of Bibi Jaibunisha (supra). This case was of reconveyance of the property sold and in that context it was held that time is not of the essence of the contract. In the case Syed (supra) the defendant entered into an agreement to sale of property for a consideration of Rs. 9,500/-. As per stipulation in the agreement, the plaintiff agreed to that on adjustment of amount Rs. 5,000/- and paid Rs. 500/-to the defendant towards part of consideration and only Rs. 4,000/- remain as a balance amount to be paid. Subsequently, the defendant received a sum of Rs. 3,880/- on different dates and only balance Rs. 120/- was to be paid. In that context, the Apex Court held that the plaintiff was ready and willing to perform his part of contract but in the present case only Rs. 15,000/- was paid as an earnest money and the plaintiff was still required to pay Rs. 25,000/-. In case of Smt. Indira Kaur (supra), the plaintiff deposited the request amount in the bank and in that context it was held that he was ready and willing to perform his part of contract. In the ease of Rameshchand (supra), it was held that the conduct of the plaintiff is required to be seen. It has already been observed hereinabove, the plaintiff was not at all ready and willing to perform his part of contract and therefore, this case is not helpful to the plaintiff. In the case of MotilalJain (supra) 2/3 of the consideration was paid to the Vendor at the time of execution of the contract. Therefore, it was held that plaintiff was ready and willing to perform his part of contract but in the present case near about 2/3 amount was required to be paid by the plaintiff to the appellant No. 1 and thus, the said case is not at all applicable in the present case. In the case of Mademshetty Satyanarayanan (supra) it was held by the Apex Court that grant of specific performance is a discretionary relief. In the present case it has been noticed that the discretion cannot be exercised in favour of the plaintiff as he was not ready and willing to perform his part of contract. In the same context, the case of Mulla Badruddin (supra) and Bank of India, (supra) are distinguishable.
36. No doubt the relief to grant decree of specific performance of contract is discretionary, in view of the Section 20 of the Act but the discretion could not be exercised arbitrarily. In exercising the discretion the Court has to keep in mind that it must be exercised judicially. In the exercise of such discretion if a Judge proceeds on a wrong principle his order may be set-aside by the appellate Court, see (Watson v. Rodwell) (1876) 3 Ch D 388.
37. If the present factual scenario is tested on the anvil of the aforesaid case laws and the circumstances of the case, it would reveal that the discretion in favour of plaintiff decreeing suit could not have been exercised and therefore, the Impugned decree passed by the trial Court cannot be sustained and deserves to be set aside.
38. It has been held that the plaintiff was not ready and willing tp perform his part of contract. Accordingly, the appeal is allowed. The judgment and decree passed to the trial Court is hereby set aside and the suit of the plaintiffs is hereby dismissed so far as it relates to the specific performance of the contract, However, he shall be entitled to the damages as prayed by him in his plaint. Thus, it is hereby ordered that the plaintiff shall be entitled to recover Rs. 15,000/- (Rupees Fifteen Thousand only) with interest @ of 9% per annum from the appellant No. 1 (Vijay Bahadur) from the date of the filing of the suit till the date of the decree, and further interest at the rate of six per cent per annum on the principal sum from the date of the decree to the date of payment. Let the decree be drawn up accordingly.
39. Looking to the facts and circumstances of the case, the parties are directed to bear their own costs throughout. Counsel fee according to the schedule.