Mohan, J.
1. This appeal arises out of the judgment and decree of our learned brother, Singaravelu, J. rendered in C.S. No. 184 of 1981. Aggrieved by the same, the defendant has preferred this appeal.
2. The facts of the case are briefly as follows: - The suit property is No. 49 Harrington Road Chetput, Madras-31. It is of an extent of 12 grounds and 974 sq. ft. It belongs to the defendent. The plaintiff herein is the Charitable Trust known as Central Chinmaya Mission Trust, which runs a school with about 1050 students on rolls.
3. Originally, the plaintiff had taken the property from the defendant on lease from 1-5-1978, on payment of Rs. 750 per flat per month and later on an enhanced rent of Rs. 1500 per month for the entire property. Therefore, on and from that date the plaintiff was inducted into possession. While the matter stood thus, under Ex. P. 1, dt. 1-6-1974, the agreement of sale was entered into between the parties. The term of the agreement inter alia provided that the defendant should sell the property to the plaintiff trust for a consideration of Rs. 3,20,000, free from all encumbrances. Advance of Rs. 50,000 was paid on the date of the agreement and the balance of sale consideration of Rs. 2,70,000 was agreed to be paid at the time of completion of sale deed.
4. The parties agreed that the sale shall be completed within a period of three months. Further it was, however, agreed to between the parties, that there could be extension of that period from 1-4-1975 on condition that till date of completion of the sale the monthly rent payable shall be Rs. 1800/-.
5. On 19-4-1974, Ex. P.2. was entered into between the parties under which the time for execution of the sale deed was extended till 30-6-1976, or up to the time of the purchaser getting the orders of the Government for exemption of stamp duty and the permission from the competent authority for the sale purchase of urban property if such permission is required under any law, in force at that time, whichever is later. The balance of sale consideration of Rs. 1.70,000 was agreed to be paid.
6. On 24-11-1976 Ex-P-3 was entered into between the parties under which the period of agreement was further extended tip to the time the orders of the Government for exemption of stamp duty obtained whichever is later. Therefore, in effect, and substance the earlier agreement was confirmed. At the same time, the plaintiff paid a further sum of Rs. 80,000 to the defendant and the rent for the building was reduced to Rs. 50 per month, inasmuch as the vendor, viz, the defendant, had received a sum of Rs. 2 ,30,000 as against the agreed sale consideration of Rs. 3.20.000.
7. On 9-1-1976, the plaintiff applied for exemption from stamp duty as well as exemption from urban land ceiling. To this, the Government of Tamil Nadu sent a reply to the plaintiff on 18-3-1977, informing that the owner of the premises shall file a statement under the Urban Land Ceiling Act and also for selling the property to the trust. In accordance with this, the defendant applied to the Government for the grant of exemption. However, that was negatived on the ground that the request for transfer could not be considered till the Urban Land Ceiling authority clears same. This required the defendant to write to the Urban Land Ceiling authorities under Ed. P. 7. dt. 13-7-1978. Inasmuch as the defendant was anxious to have the sale completed without any further delay issued Ex. P. 10 notice, dt. 16-6-1978 in which it was stated by him that already 15 months had elapsed and since the date of the agreement the prices of the properties were got escalated. Therefore, at least the plaintiff trust could enhance the rent substantially till the completion of the sale. To this the plaintiff replied under Ex. P. 11. dt. 25-6-1978, affirming that the plaintiff had always been ready and willing to perform the contract and if at all there is any delay it was only due to obtaining the clearance from the competent authority by the defendant.
8. The plaintiff trust made it further payment of Rs. 10,000 under the letter Ex. P. 13. dt. 22-9-1978, informing the defendant that the plaintiff had been pursuing the matter with the Government for the exemption of stamp duty -- it is important to note at this stage that the defendant accepted this Rs. 10,000 and stated that the amount received in confirmation of the agreement of sale referred to and reiteration of the terms of the agreement. On 28-2-1978 the defendant under Ex. P. 14 wrote to the plaintiff to obtain the necessary exemption from the Government as the matter was getting delayed. He called upon the plaintiff to finalise the transaction by 15th Mar. 1979, as otherwise, the plaintiff trust alone will have to pay the municipal tax and other taxes due to the property. It was also stated that letter that he will be obliged to charge interest at the rate of 15 per cent for he balance of the sale price. To this a reply emanated from the plaintiff under Ex. P. 15, dt. 29-3-1979. Stating that they were making a further payment of Rs. 10,000 and the sale could be registered only after the exemption was granted. After a lapse of few months under Ex. P. 16, Dt.-31-12-1979, the defendant wrote to the plaintiff being aggrieved by the fact that the Collector had not so far given exemption while the defendant had been compelled to pay the urban land tax for the property and the plaintiff must see that some thing was done about this delayed transaction. The defendant also stated that a fair rent application should be filed before the Rent Controller for fixation of fair rent as the rent that was paid was very nominal. It was replied by the plaintiff under Ex. P. 17, that every endeavor was taken, to get exemption and the delay was only on the part of the Government. The Government sent a reply to the plaintiff on 22-4-1980. that the request for exemption from stamp duty was under consideration. While the matter stood thus, the defendant issued a lawyer's notice under Ex. P. 18, on 29-4-1980 stating that the price of immovable property had gone up and that he had sufficiently waited for the completion of the sale. It was also stated that on account of the long delay the plaintiff has lost its right to purchase the property and therefore the contract of sale had been terminated. It was also stated that the entire amount of Rs. 2,70,000, which he had received would be refunded to the plaintiff. Under Ex. P. 19. the plaintiff replied to the defendant that the plaintiff was ready and willing to perform its part of the contract, and that the delay in getting exemption was beyond the control of the plaintiff. Under Ex. P. 20. the defendant again complained about the inflation in price. It is at that stage the Government by its communication dt. 3-9-1980 informed the plaintiff that the request for exemption could not be complied with. Thereupon under Ex. P. 4, dt. 10-9-1980. the plaintiff wrote to the defendant saying that in view of the order of rejection of exemption by the Government the plaintiff would be willing to pay the stamp duty and register the sale deed and that a draft sale deed would be prepared and sent to the defendant for approval. The defendant on 7-10-1980, saying that the agreement of sale had already been cancelled, issued a reply notice under Ex. P. 21.
9. Notwithstanding the rejection of the request of the plaintiff for grant of exemption from stamp duty the matter was still pursued by the plaintiff and ultimately the exemption from payment of stamp duty was granted under Ex. P. 9. dt. 22-12-1980. In the meanwhile, finding that the defendant was not willing to complete the sale and willing to resile from the terms of the contract the suit came to be filed on 23-3-1981, even before the exemption was obtained.
10. On these facts, the following issues came to be settled down for trial-
1. Whether the plaintiff or the defendant, who committed breach of contract?
2. Whether the plaintiff is not entitled to specific performance for the reasons stated by the defendant?
3. Whether the suit as framed is maintainable ?
4. Whether the defendant is not liable to perform, the contract for the reasons stated in the written statement?
5. To what relief, If any, are the parties entitled
11. The learned trial Judge on a consideration of the oral and documentary evidence came to the conclusion on issue No. 1, that the defendant had committed breach of contract on account of the spurt in rise of price. Issue No. 2 was decided in favour of the plaintiff. Under issue No. 3 it was held that the suit as framed is clearly maintainable. On these findings, he came to the conclusion that the plaintiff was entitled to a decree for specific performance of the contract of sale and the defendant will execute the sale deed of the property after receiving the balance of sale consideration which had to be deposited by the plaintiff within four weeks from the date of the judgment. It is under these circumstances, the present appeal is preferred.
12. Mr. Habibulla Badsha, learned counsel for the appellant would urge the following points for consideration. Firstly, he urged that this is a case in which the price as stipulated between the parties is grossly indequate. It is open to this court to take judicial notice of the fact that a contract which was entered into as early as on Ist June 1974, is sought to be enforced in the year 1981. In between this period the value of the property had gone up considerably. Certainly, the defendant cannot be compelled to execute the sale deed because that will be unfair as far as the defendant-appellant is concerned. Therefore, by reason of the delay, the position of the parties is substantially altered and in such a case the discretionary relief of specific performance should be refused on equitable grounds.
Secondly it is urged that this is a case of contingent contract falling under Sec. 30 of the Indian Contract Act, because it was subject to obtaining exemption from stamp duty. When the plaintiff had been clearly informed that the exemption had been denied to him on 341980, he cannot go on try and expect the defendant to complete the sale transaction. Therefore, the judgment and decree cannot be supported.
The next submission of the learned counsel is that in a case of specific performance it is essential that the plaintiff must always do ready and willing to perform the contract. Though the plaintiff-respondent agreed to send a draft sale deed within 15 days from the date of Ex. P. 4 he never did so. Nor did he take any further step to complete the sale transaction but only he was taking umbrage under the fact that he applied for exemption from stamp duty. In this case, as the evidence disclosed escalation of prices has not been denied, and in none of the letters the plaintiff had denied, the escalation of the prices when .it was pointed out. Under Sec. 29 subsec. (2)(c) of the Specific Relief Act, a decree for specific performance need not be granted when the court finds it to be inequitable, In the case reported in Satyanarayana v. Yelloji Rao, : [1965]2SCR221 , it has been held that mere delay is not sufficient to refuse the relief of, specific performance. In this case, it must be deemed that the plaintiff by his own conduct had lost his right to specific performance. Again it has been held in Sanohya Rani v. Sint. Sudha Rani : [1978]2SCR839 that the readiness and willingness had to be established from, the beginning to the end.
13. In a series of cases inadequacy of consideration, if it is grossly low, had been held to be a good ground to deny the equitable relief of specific performance; (vide -Rangasami Gounder v. Periamuthu Gounder : (1977)1MLJ231 , Gandhisan v. Ayyasami : (1979)1MLJ270 and Dodharami Reddi v. Devireddi Pattabbirami Reddy AIR 1937 Mad 124 : 71 MLJ 599. For all these reasons it is contended that the judgment and decree of the learned Judge has to be set aside.
14. Learned counsel for the respondent would urge first and foremost that this is a case in which the agreement Ex. P. I when it was entered into on 1-6-1974, as admitted by the defendant as D.W. 1, the Act in relation to Urban Land Ceiling was prevailing. It is also candidly stated by him that there were no buyers for this property. Therefore, by no stretch of imagination it can be contended that it was unconscionable bargain, nor can it be contended that the price was grossly inadequate. On the contrary it is clearly established that the price as stipulated on the date was the proper price. In this case, the fact that Rs. 2,70,000 had been paid by the plaintiff itself would prove positively of its readiness and willingness at all material times to complete the sale transaction. All that stood in the way was the grant of exemption. Even when the defendant was called upon to send the documents of title, after the rejection of the request for exemption from stamp duty, nothing was done by the defendant-appellant. That was under Ex. P. 15. Even as late as 28-2-1979 all that the defendant wanted was that the plaintiff should pay the municipal tax. As a matter of fact, he received Rs. 2000 in confirmation of the terms of the contract. Therefore, this is a clear case in which owing to the escalation in prices the defendent tries to resile from the contract and tries to put the blame on the plaintiff. Merely because specific performance is a discretionary relief, though it may have its origin in the law of equity in England, in so far as that right is conferred under a statute, it is the limits of that statute, which have to be looked into. The explanation to Sec. 20 of the Specific Relief Act bars any such discretion on the ground of inadequacy of price. In other words, that discretion cannot be exercised in an arbitrary fashion or in a capricious manner. The learned counsel relies, in this connection, on a passage in Specific Performance, by Gareth Jones & William Goodhart, Chapter 1 1986, Edn. Learned counsel also relies upon a passage in para 401 in Halsbury's Laws of England, page 275, 4th Edn., Volume 44.
15. Having regard to the above, only the following three questions arise for consideration-
1. Whether by reason of the delay the plaintiff could be denied the right of specific performance?
2. Whether this is a contingent contract and if so merely because the exemption sought for was denied to the plaintiff in the first instance could the contract be said to have fallen to ground?
3. Whether the plaintiff had been ready and willing to perform at all material times its part of the contract?
16. We have already set out the facts in some detail. The first of the agreements is Ex. P. I dt. 1-6- 1974. It is only under Ex. P. 2, a clause was stipulated to the following effect-
'1. The period of the earlier agreement of sale dated 28th Mar. 1974, shall stand extended to 30-6-1978, or up to the time of the purchaser getting the order of the Government for exemption of stamp duty and the permission from the competent authority for the sale and purchase of urban property if such permission is required under any law in-force at that time, whichever is later, on payment of the further advance of Rs. 1,00,000 (Rs. One lakh only) on execution of this agreement. The balance of consideration vis, Rs. 1,70,000
shall be paid on or at the time mentioned supra and the sale, will be completed by execution of the necessary sale deed.'
It is important to note that the parties were fully aware of the implication of the contract entered into. The clause 'whichever is later' in effect means that time had never been intended to be the essence of the contract as far as the parties are concerned. It is one of the fundamental principles of contract that when solemn contracts are entered into between the parties, they are meant to be honoured. The same clause is reiterated as seen in Ex. P. 3 in the following terms-
' 1. The period of the earlier agreement of sale dated 28th Mar. 1974, as extended by agreement dated 9-4-1976 shall stand further extended up to the time the orders of the Government for exemption of stamp duty or the permission from the competent authority for the sale and purchase of the demised property namely 49 Harrington Road, Madras, are obtained, whichever time is later.'
It requires also to be noted that at the time of entering into Ex. P.1 Rs. 50,000 was paid towards part of the sale consideration and thereafter, Rs. 1,00,000 was paid under Ex. P. 2 and another Rs. 80,000 was paid under Ex. P. 3. The plaintiff did not remain idle. The plaintiff has been exercising every deligence on his part and was writing to the Government repeatedly. It is true under Ex. P. 8.dt. 3-9-1980, the request for exemption from stamp duty was rejected. Soon after in Ex. P. 4,, dt. 10-9-1980 the defendant was informed that the sale will be completed inasmuch as the trust had decided to pay the stamp duty and the sale deed could be registered. At every material point of time, the defendant not only agreed for the time being extended till the plaintiff obtained the necessary exemption, but also received substantial sum, as learned Judge correctly pointed out, towards sale consideration. Under Ex. P. 14, dt. 28-2-1979, the defendant himself gave a further time to the plaintiff for finalising the transaction. As a matter of fact he received a sum of Rs. 10.000 under Ex. P. 14, and he stated in Ex. P. 14, as follows-
'Please note that if this transaction is not finalised by the 15th Mar. 1979, you will have to pay the Municipal taxes and other taxes due on this property, and i am also putting you on notice that interest at 15 per cent will have to be paid by you for the late payments. I hope you will co-operate and finalise the transaction before 15th Mar. 1979. Thanking you for your kind co-operation early.
Yours faithfully
K. B. Namazi.
Copy to 1. Mrs. Nambiar; 2. M. Ramaswami: 3. Mr. Ramiah.The said sum of Rs. 10,000 is received in further confirmation of the agreement of sale referred to and in reiteration of the terms of agreement.'
This has been the attitude of the defendant and only later he chose to resile from the contract. Therefore, not only the parties did not consider the time as the essence of the contract, because of the wording under Exs. P. P. 3 and the vendor but I had received substantial sums and thereafter stood by the contract. In this case, the evidence discloses that exemption from stamp duty, was obtained only in 1981 and it is only thereafter the contract could be completed. But, by then, the defendant-appellant has changed his attitude. It is in this background, we will have to consider Sec. 20 of the Specific Relief Act 1963, What is relied on by Mr. Habibullah Badsha is Sec. 20(2)(c) of the Act which reads its follows-
'20(2)(c). Where the defendant entered into the contract under circumstances, which, though not rendering the contract voidable, makes, it inequitable to enforce specific performance.'
But at the same time, we are of the view that regard should be had to the succeeding explanation. Due to some supervening circumstances namely the grant of exemption from the provisions of the Urban Land Ceiling Act and the payment of stamp duty: there has been a delay and during this period, undoubtedly, there was an escalation in prices. The question is whether, by reason of that escalation this price could be held to be inadequate. We do not think so. The evidence in this case clearly discloses, as admitted by P.W. 1, that at the time when the contract was entered into, the present Act relating to the Urban Land Ceiling was in force. There were no buyers for this property. Hence the price as paid on that date was adequate. Therefore, the inadequacy of the price cannot be pressed into service. This is beside the scope of Explanation 1 to Sec. 20 of the Specific Relief Act, where it is stated that inadequacy of consideration shall not constitute an unfair advantage. Mr. C. Ramakrishnan, is therefore, right in his submission that on the date of the contract, the sale consideration of Rs. 3,20,000 as stapulated was the proper price. As a matter of fact, it is nobody's case, as the learned trial Judge himself has found, that the price is inadequate.
17. On this aspect, Mr. Habibulla Badsha relies on the rulings in Ramakrishna v. Palaniappa, : AIR1963Mad17 , D. Rami Reddi v. D. Pattabhirami Reddi AIR 1937 Mad 124, Ramswarup Singh v. Mahabir, : AIR1960Pat235 , and Jadunath v. Chandra Bhusan : AIR1932Cal493 . It requires to be noted that all there cases were under Sec. 22 of the Specific Relies Act, 1877. There was no explanation to that section corresponding to Explanations 1 and 2 to S. 20(2)(a) and (b) of the present Act. That makes a vital distinction. As a matter of fact, in Sankaralinga v. Ratnaswami, : AIR1952Mad389 it was held that the hardship must be judged with reference to the date of the transaction and not with reference to the subsequent events. Therefore, we discountenance the argument of the learned counsel for the appellant that, since the original rent of Rs. 1500 came to be reduced from time to time and a huge building cannot ultimately fetch only a rent of Rs. 50, it resulted in extreme hardship. In Ex. P. 3 in no uncertain terms it was stipulated as follows-
'In view of the fact that the vendor has received a total of Rs. 2,30,000 till date, the purchaser has agreed to pay a rent of Rs. 50 (fifty only) per month from the day of execution of this agreement.'
The parties with open eyes entered into such transaction.
18. As to what exactly is the remedy of specific relief, we would only refer to the passage of the Specific Performance by Gareth Jones and Williams Goodhart, chapter 1, 1986 Edn. Which is as follows-
'Specific performance is a decree of the court which compels the defendant personally to do what he promised to do. If the defendant disobeys, the Court had adequate remedies to compel compliance; for example, it has the power to nominate a person to execute an instrument if the defendant refuses to do so, and, in the last resort, he may be punished by being committed for contempt. The remedy of specific performance is an equitable remedy which the Court will grant if the plaintiff requests it and if it is just to do so. No plaintiff is therefore, entitled to specific performance as of right. The court gives a specific performance instead of damages' only when it can by that means do more perfect and complete justice. But the discretion to grant or refuse specific performance is not exercised capriciously but with regard to principles established by previous authorities.'
Again, in Halsbury's Laws of England, in para 401 - page-275, 4 th Edn. Volume 44, it is stated as follows-
'The remedy by specific performance is a equitable relief, given by the court to enforce against a defendant the duty of doing what he agreed by contract to do, a plaintiff may, therefore, obtain judgment for specific performance even though there has not in the strict sense, been any default by the defendant before the issue of the writ.
19. On a consideration of all the above, we hold that the delay in this case cannot be put against the plaintiff-respondent so as to deny it the right of specific performance merely on the ground that such a relief is discretionary.
20. Question No. 2: As to what is a contingent contract, we will refer to See. 31 of the Indian Contract Act which reads as follows-
'A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen.'
21. In Satyanarayana v. Yelloji Rao, : [1965]2SCR221 it has been categorically stated that mere delay is not sufficient to deny specific performance unless there is a waiver, or abandonment. But in this case, there was no waiver at all at any point of time; nor had the plaintiff-respondent abandoned its right. On the contrary, it is the other way about, if there was nothing to suggest in the conduct of the plaintiff-respondent implying an abandonment, the contract will have to be enforced. Therefore, we are unable to agree with the contention of Mr. Habibulla Badsha that because of the failure to obtain exemption hi the first instance, the contract had fallen to the ground. The plaintiff-respondent has been trying its level best to obtain the exemption from payment of stamp duty notwithstanding its failure to obtain it in the first instance which was because of the language of Exs. P. P. 3, and I to which we have already made a reference.
22. Question No. 3: Coming to the question to readiness and williness, in answer to the letter of the appellant-defendant dt. 16th 1978, on 25th June 1978 under Ex. P. 11, the plaintiff-respondent states as follows-
'We are always ready and willing to perform our part of the contract conclude the sale. But it is unfortunate that the delay has been caused on your part to get a clearance from the competent authority, which has actually delayed the conclusion of the deed. Incidentally we may point out that we have applied for stamp duty exemption long ago and the authorities have directed us to produce clearance certificate from the competent authority to enable them to pass necessary orders granting the exemption. In this connection we may point out that we have brought to your notice the letter received from the Government dated 18-3-1977 calling upon the permission of the competent authority as condition for granting exemption of stamp duty. A copy of the letter is enclosed for your reference.'
On 14-7-1978, in Ex. P. 7 an endorsement made by the Assistant Commissioner of Urban Land Tax, is to the effect that there is no vacant land in excess of the ceiling limit as per the new Act. This is the communication addressed to the appellant-defendant. On 17th Aug. 1978 under Ex. P. 12, the appellant defendant wrote to the respondent-plaintiff that he had requested the Corporation to collect the taxes. On 22nd Sept. 1978 under Ex. P. 13 the plaintiff-respondent wrote to the defendant-appellant stating that, inasmuch as only about a fortnight ago clearance certificate was given by him, steps were being taken to have stamp duty exemption: Under Ex. P. 15, dt. 29th Mar. 1979, the respondent plaintiff wrote an important letter which presumably was in confirmation of the discussion the parties had. That is made clear in the first para of Ex. P. 15 which reads as follows-
Subsequent to the receipt of your letter dt. 28-2-1979 and 6-3-1979, you were kind enough to participate in the discussion with the school committee on 26-3-1979. In confirmation of the discussion and also in reply to your letter dt. 28-2-1979, we wish to write as follows:
'We have decided to accede to your request of paying a further sum of Rs. 10,000. The sale deed could be registered only after the exemption is granted and the finalisation can be done within the time mentioned in the agreement dt. 24-11-1974. Therefore your saying that time is extended up to Nov. 1978 or 15-3-1979 is not correct in view of the agreement between us. However, in the meanwhile, that is, before the receipt of the exemption order from the Government; please direct your advocate to hand over all the original title deeds relating to the property to our advocate Mr. Vallinayagam, 12 Thambu Chetti St; Madras so that the sale deed could be finalised and agreement be made for finalising the registration of sale. Please also make it definite, the final balance payment under the terms of the agreement will be only at the time of registration of the sale deed.'
On Feb. 8,1980, the plaintiff-respondent writes to the appellant-defendant saying that the Government machinery was not acting quickly in regard to grant of exemption from payment of stamp duty and that it appreciated the difficulty of the appellant and that it would consider as to how best it could help the appellant. An assurance was given in that letter that the transaction would be finalised as early as possible. It is thereafter notices between the advocates passed.
23. On 10-9-1980, under Ex. P. 4, the advocate for the plaintiff-respondent wrote to the defendant-appellant stating that the Government had since passed orders on 8-9-1980 rejecting the request of the plaintiff respondent for the grant of exemption and in view of that final order, the plaintiff-respondent had decided to pay the stamp duty and register the sale deed. In unequivocal terms it is stated therein as follows-
'My client hereby expresses his readiness and willingness to complete the sale transaction by paying you balance of sale consideration and registering the sale deed.'
24. Though a copy of the draft sale deed was agreed to be sent, nothing was done in pursuance of the same. However, ultimately, the exemption was obtained in 1981, but by then, as we observed above, the defendant appellant taking advantage of the increase in price wanted to resile from the contract. Therefore, it became necessary on the part of the plaintiff-respondent to file, the suit. This shows readiness and willingness of the plaintiff to complete the sale transaction. It is worthwhile to remember that out of the sale consideration of Rs. 3,20,000, if the respondent-plaintiff had paid Rs. 2,70,000/-, it cannot ever be contended that there was any lack of readiness or willingness on the part of the respondent-plaintiff. Therefore, we would hold that the respondent-plaintiff was always ready and willing to complete the sale transaction.
25. For all these reasons, we find no difficulty in upholding the judgment and decree of the learned trial Judge and dismissing this appeal. Accordingly the appeal is dismissed. In the circumstances, we make no order as to costs.
26. Appeal dismissed.