R.L. Khurana, J.
1. In the present suit for specific performance, the plaintiffs have sought the following relief(s):--
'a decree for specific performance be passed in favour of the plaintiffs (or any of them preferably the second plaintiff) and against the defendant and--
(i) the defendant (in terms of Agreement to Sell dated 28-9-1990 as modified by the two addenda dated 20-10-1990 and 13-12-1991) be directed to transfer his right, title and interest in the property known and styled as The Peak, situated in village Mashobra, Pargana Showhawali, Tehsil and District Shimla along with plants and trees standing thereon, comprised in Khewat Khataunl No. 83 min/102, khasra Nos. 194/1 (0-11 biswas), 195/1 (11 bighas 13 biswas), 196 (0-8 biswas), 197 (0-3 biswas), 198 (0-2 biswas), 199/1 (7 bighas 19 biswas), 200 (0-18 biswas), 201 (1 bigha 3 biswas), 202 (0-15 biswas), 203 (0-4 biswas), 204 (0-4 biswas) and 205/1 (26 bighas 14 biswas) with one bungalow, outhouses and buildings standing therein, measuring a total of 50 bighas and 14 biswas (38, 152.6 sq.mts. equivalent to 45,630 sq. yds) as bounded in red in the plan annexed to the plaint and in the Tatima issued by the Patwari, by means of a sufficient instrument in favour of plaintiff No. 2, along with actual physical possession of property against payment of the balance sale price;
(ii) in case, the defendant fails to do so, the needful be got done by an officer of the Court. The defendant be also directed to perform all acts to facilitate and effectuate the transfer of the property in suit by the defendant in favour of plaintiff No. 2 including obtaining extension of period for execution and registration of the sale deed granted by the H. P. Government;
(iii) although with it is not necessary, but in case the Court considers proper, appropriate orders regarding delineation or any other matter in relation to the agreement, may also be passed;
(iv) such other and further reliefs and in such form as the Court deems proper may also be awarded to the plaintiffs along with costs of the suit.'
2. Admitted Facts.
The defendant is the owner of the property known as The Peak in village Mashobra, Pargana Showhawali, Tehsil and District Shimla, comprising of land measuring 65 bighas 14 biswas in khewat/ khatauni No. 83 min/102, and khasra Nos. 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204 and 205 along with plants, trees, a bungalow, out-houses and buildings therein as detailed in the jamabandi for the year 1984-85. He on 28-9-1990 vide an agreement (Ex. PW 2/A) agreed to sell about 45,000 sqr. yds. out of the above said land as delineated in the contour site plan Ex. PW 2/B annexed to the agreement, along with building therein for a total consideration of Rs. 1,10,00,000/-, that is, at the rate of Rs. 200/- per sqr. yds. for the land along with plants and trees therein and Rs. 20,00,000/- for the buildings therein. A sum of Rs. 25,00,000/- was paid to and received by the defendant by way of bank drafts at the time of agreement as earnest money. Vide this agreement, it was, inter alia, agreed between the parties as under :--
(a) a joint survey would be undertaken by the parties within 60 days from the date of the agreement and the area agreed to be sold shall be demarcated at the site and a plan shall be prepared on the basis of such demarcation;
(b) the actual area agreed to be sold shall be determined after the demarcation referred to at (a) above subject to the condition that the plaintiff shall take approx. 45,000 sq. yds. of land, leaving the remaining land towards the Mashobra Bazar falling on the South -- East of the property to the defendant;
(c) the survey plan referred to as at (a) above duly signed by the parties shall be considered as revised plan for the purpose of agreement and execution of sale deed; and
(d) the actual sale consideration would be determined and paid on the basis of actual measurement of the land agreed to be sold.
3. The original agreement dated 28-9-1990 (Ex. PW-2/A) was subsequently modified vide an addendum dated 20-10-1999 (Ex. PW 2/C) whereby the area agreed to be sold was fixed at 50 bighas 14 biswas, equivalent to 45,630 sq. yards comprising of khasra Nos. 194, 195 (min), 196, 197, 198, 199 min. 200, 201, 202, 203, 204 and 205 (min) in Khewat No. 83 min. The total sale consideration was fixed at Rupees 1,11,26,000/-. Other terms and conditions of the agreement dated 28-9-1990 (Ex. PW2/A) remained the same.
4. It may be stated here that as per the terms of the agreement Ex. PW2/A, the plaintiff was to obtain necessary permission from the State Government for the purchase of land to start a Hotel within nine months of the agreement or within a further extended period of six months or such extended period as might be agreed upon by the parties. In the event of non-receipt of necessary permission within the stipulated period, the defendant was to refund the amount of Rs. 25,00,000/- received by him as earnest money less Rs. 5,00,000/-.
5. It appears that since the plaintiff was not able to obtain in the requisite permission from the State Government, a meeting took place between the parties on 5-12-1991 and in terms of the decision(s) arrived at between the parties vide minutes Ex. PW2/E, a second addendum Ex. PW 2/F to the original agreement dated 28-9-1990 (Ex. PW2/A) was executed between the parties. Vide this addendum the parties agreed as under:--
(i) the sale consideration of the property agreed to be sold was increased to and fixed at Rs. 1,30,00,000/-;
(ii) in the event the necessary permission for the purchase of the property was not received till 31-12-1992, the total sale consideration would be increased by such amount calculated at the simple rate of interest of 15% per annum from 1-1-1993 till the date of receipt of intimation from the plaintiff by the defendant regarding the grant of requisite permission of the State Government, on balance sale consideration;
(iii) in case the requisite permission was not received till 31-12-1993, the defendant was to refund the entire amount less Rupees 5,00,000/- received by him from the plaintiff as earnest money/advance; and
(iv) the sale deed to be executed in favour of plaintiff No. 1 or its nominee, that is, plaintiff No.2.
6. A further sum of Rs. 5,00,000/- by way of two bank drafts dated 2-6-1992 and 20-7-1992 was paid to and received by the defendant from the plaintiff towards part of the sale consideration. In this way a total sum of Rs. 30,00,000/- stands paid to and received by the defendant. The requisite permission for the purchase of the land was granted to the plaintiff No.2 by the State Government on 31-12-1993 vide Ex. PW3/D.
7. Case of the plaintiffs.
After the execution of the agreement Ex. PW2/A on 28-9-1990 between the parties whereby land measuring about 45,000 sq. yds. with buildings, trees etc. thereon was agreed to be sold by the defendant, in terms of the said agreement, a joint survey was carried out and the area to be sold was demarcated, boundary poles were fixed and a revised contour plan Ex. PW2/D was prepared and annexed to the first addendum dated 20-10-1990 Ex. PW2/C. The actual area to be sold by the defendant and to be purchased by the plaintiffs was fixed at 50 bighas 14 biswas equivalent to 45,630 sq. yards. A Tatima Ex. PW3/C showing the area agreed to be sold was also got prepared from the Halqua Patwari. The plaintiffs applied to the State Government for obtaining the permission for the purchase of land under Section 118, H. P. Tenancy and Land Reforms Act on 30-9-1991, since the date for obtaining such permission as per the agreement dated 28-9-1990 (Ex.,PW2/A) was expiring on 27-12-1991, pursuant to the discussion between the parties in the meeting held on 5-12-1991 and the decisions arrived at during the course of such meeting a second addendum dated 13-12-1991 (Ex. PW2/F) to the agreement Ex. PW2/A was entered into between the parties by virtue of which time for execution of sale deed was extended till 31-12-1992 and the original sale consideration of Rs. 1,11,26,00,000/- was enhanced to Rs. l,30,00;000/- with additional stipulation that the sale consideration would be increased at the simple rate of 15% per annum for the period beyond 31-12-1992, that is, the plaintiff would be liable to pay enhanced price calculated at the simple rate of 15% per annum from 1-1-1993 till the date of receipt of information with copies of requisite permission by the defendant from the plaintiff.
8. Since the requisite permission was not received by the plaintiffs from the State Government till 30-12-1993, plaintiff No. 1 vide letter dated 21/30-12-1993 21/30-12-1993 (Ex. PW5/ D1) intimated to the defendant that since the requisite permission was not likely to be received by 31-12-1993, they had nominated one Shri K. N. Rattan son of Janki Dass Rattan of District Una, a Himachali agriculturist, to be their nominee and that the sale deed be executed, in terms of the agreement, in favour of the said nominee. It was further stipulated that if in the meanwhile the requisite permission was received the sale deed would be executed in favour of plaintiff No.2 as the nominee of plaintiff No. 1.
9. On the receipt of the requisite permission vide Ex. PW3/D from the State Government, plaintiff No. 1 informed the defendant on 4-1-1994 telegraphically about the receipt of permission and calling upon him to execute the necessary sale deed in favour of plaintiff No. 2. The defendant instead of performing his part of the agreement started raising frivolous and irrelevant issues and controversies and by suggesting to have a meeting to finalise the details of the agreement, demarcation and final measurement of the land. The defendant, at his request, was even supplied another copy of the permission Ex. PW3/D. A draft sale deed was also sent to the defendant by plaintiff No.2 with a request to take the necessary steps for the execution and registration of the sale deed and handing over the vacant possession of the property in question on payment of the balance sale consideration. The defendant failed to perform his part of the agreement. He kept on dilly-dallying and even offered to return the advance money received by him.
10. Further case of the plaintiffs is that the defendant has even started constructing 2-3 structures over a portion of the land agreed to be sold, as distinct from the land to be retained by him inspite of various meetings between the parties and the communications sent by the plaintiffs, the defendant did not come forward to complete the transaction in terms of the agreement to sell. He has not even obtained the income-tax clearance certificate. Ultimately, vide letter dated 22-5-1994; the defendant was called upon by the plaintiff No. 1 to execute the sale deed in favour of its nominee, plaintiff No. 2 within 10 days of the receipt of the letter, failing which it would be presumed that he was not interested to complete the transaction as per agreed terms. Hence the present suit on the failure of the defendant to perform his part of the agreement. It was averred by the plaintiffs that they have been and are willing to perform their part of the agreement and are possessed of requisite funds for payment of balance sale consideration, stamp and registration charges.
11. Case of the defendant.
The execution of the agreement dated 28-9-1990 (Ex. PW2/A), first addendum dated 20-10-1990 (Ex. PW2/C) as well as the second addendum dated 13-12-1991 (Ex. PW2/F) is not denied. The receipt of Rs. 30,00,000/- as earnest /advance money is also admitted. The correctness of the plans Ex. PW2/B and Ex. PW2/D annexed to agreement Ex. PW2/A and the addendum Ex. PW2/C, respectively, has been denied. It has been pleaded that the plan Ex. PW2/ B annexed to agreement Ex. PW2/A did not depict true and correct state of affairs. The land agreed to be sold was to be actually identified after due demarcation through the Revenue Agency at the spot and proper plan identifying the land was to be prepared. According to the defendant neither any joint survey nor any demarcation of the land agreed to be sold was ever carried out at any time. The plaintiffs have been lax in obtaining the requisite permission from the State Government. The defendant could obtain the income-tax clearance only on submission of the draft sale deed, which draft could not be finalized for want of proper demarcation and identification of the land agreed to be sold. In the execution of- the agreement and the subsequent addendum there has been mutual mistake between the parties. It was further pleaded that the sum of Rs. 5,00,000/- paid to the defendant in June/July 1992 was, spent by him in the construction of a two roomed cottage on the land which was not agreed to be sold. Such cottage was allowed to be constructed in order to ensure that the privacy of the remaining estate was not disturbed. The defendant specifically denied that the area on which construction has been carried out by him was a part of the land agreed to be sold. In so far as nomination of Shri K.N. Rattan by the plaintiffs as their nominee is concerned, it was pleaded that such nomination being made with the sole object to circumvent and defeat the provisions of the H.P. Tenancy and Land Reforms Act was against public policy and contrary to law. The defendant has further pleaded that he has been willing to perform his part of the agreement by executing the sale deed in respect of 50 bighas 14 biswas of land, which could be identified only after demarcation at the spot. The permission obtained by the plaintiffs vide Ex. PW 3/D was valid only for 180 days and such permission stood lapsed with the passage of time. The plaintiffs themselves have failed to perform their part of the agreement. Time was the essence of the agreement and on the failure of the plaintiffs to get the necessary sale deed executed within the stipulated period, they were not entitled to specific performance. The agreement even otherwise cannot be specifically enforced in the absence of identification of the land agreed to be sold. An objection was further raised by the defendant that the plaintiffs being guilty of suppression of material facts, were not entitled to the reliefs prayed for.
12. Issues :
On the pleadings of the parties, following issues were framed on 26-2-1997 and 26-6-1997 :--
1. Whether the defendant entered into an agreement of sale dated 28-9-1990 which was modified by addendum afresh on 20-10-1990 and 13-12-1991 whereby he agreed to sell 50.14 bighas of land measuring 45,630 sq. yds. to the plaintiffs as per the details in the plaint? OPP
2. Whether the plaintiff has been ready and willing to perform its part of the contract and the defendant has resiled from getting the sale deed registered OPP
3. Whether the plaintiff is guilty of suppression of material facts and as such is not entitled to the relief of specific performance? OPD
4. Whether there has been any mutual mistake in the execution of agreement of sale dated 28-9-1990 and 20-10-1990? If so, its effect? OPD
5. Whether time was the essence of the contract and the plaintiff failed to fulfil its part of the contract? If so, its effect OPD
6. Relief.
13. Parties have led oral as well as documentary evidence in support of their respective case.
14. I have heard the learned counsel for the parties and have also gone through the record of the case. My findings on the above issues are as under :--
Issue No. 1.
It is the admitted case of the parties that the defendant vide agreement dated 28-9-1990 (Ex. PW 2/A) followed by addendum dated 20-10-1990 (Ex. PW2/C) and second addendum dated 13-12-1991 (Ex. PW 2/F) agreed to sell land measuring 50 bighas 14 biswas out of total area measuring 65 bighas 14 biswas, alongwith buildings, plants and trees located therein to the plaintiff No. 1 or its nominee. The issue is, therefore, decided in favour of the plaintiffs.
Issue No. 5.
It is by now well settled that in the case of agreement of sale relating to immovable property, time is not the essence of the contract unless specifically provided for to that effect.
15. In Smt. Raj Rani Bhasin v. S. Kartar Singh Mehta, AIR 1975 Delhi 137 which was followed by this Court in Dalip Singh v. Ram Nath and Anr., AIR 2002 Him Pra. 106, it has been held that a mere stipulation of a date before which the sale deed was to be executed and the stipulation that the earnest money would be forfeited if the date was not adhered to also would not necessarily make the time the essence of the contract. The sellers are entitled to make the time the essence of the contract by specifically giving a notice to the purchaser if the purchaser was found to be delaying performance of the contract.
16. A Constitution Bench of the Hon'ble Supreme Court in Chand Rani v. Kamal Rani (1993)1 SCC 519 : (AIR 1993 SC 1742) has held that 'it is clear that in case of sale of immovable property, there is no presumption as to time being the essence of the contract'.
17. The Hon'ble Court further went on to observe that even if time is not the essence of the contract, the Court may infer that it is to be performed within a reasonable time if the conditions are evident : (1) from the express conditions 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 other words, the Court should look at all the relevant circumstances including the time limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised.
18. The above said ratio was followed and reiterated in K. S. Vidyanadam and others v. Vairavan, AIR 1997 SC 1751.
19. In the present case, time for execution of the sale deed initially stipulated in the agreement Ex. PW 2/A was extended vide the second addendum Ex. PW2/F with a further stipulation that the agreed sale price would be increased at the simple rate of 15% per annum with effect from 1-1-1993, Vide this addendum Ex. PW2/F, the original Clause (1) of the agreement Ex. PW2/A was substituted as under :--
'The first party has agreed to purchase the above said property with all buildings, its fittings and fixtures and all plants and trees standing thereon free from all encumbrances, charges, liens etc. for a total sale consideration of Rs. 1,30,00,000/- (Rupees one crore thirty lacs only). Provided, however, that in the event, the required permission from Deputy Commissioner for transfer of land in favour of the second party and/or its nominees is not received until 31-12-1992, the total sale consideration as mentioned above shall further stand increased by such amount as may be determined at the rate of fifteen percent per annum on simple interest basis, with effect from 1-1-1993 till the date of receipt of intimation with copies of all permission and certificates, on any part of sale consideration remaining to be paid by the second party to the first party, after adjusting for advance and any part of sale consideration paid by the second party to the first party.
20. Clause (12) of the original agreement Ex. PW2/A was also substituted by the second addendum. Ex. PW2/F as under :--
'That after obtaining income-tax clearance certificate and all the required permissions for hotel /resort and any other permission as may be required, the second party will inform the first Party or vice-versa, as the case may be, in writing and thereafter the final payment of the balance sale consideration will be made by the Second party within 90 (Ninety) days from the date of receipt of intimation with copies of all permission and certificates, simultaneously, with execution and registration of the sale deed by the First Party. At this stage, if the Second Party fails to perform its part of duties, that is, payment of balance sale consideration, the First Party will be at liberty, to forfeit the advance amount. In the event, the First Party fails to perform its part of the obligations, the Second Party will get the transfer done through Courts for specific performance or otherwise at the risk and cost of the first party. In the event, the required permission for making a hotel/resort on the said property and/or permission from Deputy Commissioner for transfer of land in favour of the second party and/or its nominee is finally rejected, in writing, by any concerned authority, or not received from any concerned authority until 31-12-1993, the amount of advance money and any part of sale consideration received by the first Party from the Second Party would immediately become payable. However, in that event, the first party would be entitled to retain a sum up to Rs. 5,00,000/- (Rupees Five lacs only) out of the amount of advance/sale consideration paid by the Second Party to the First Party.'
21. The terms of the agreements arrived at between the parties show that the time was not expressly made the essence of the contract. The execution of the sale deed was dependent on the grant of permission by the State Government in favour of the plaintiffs under Section 118, H.P. Tenancy and Land Reforms Act. Sufficient provision was also made for the increase in the sale consideration in the event of delay in the receipt of requisite permission.
22. It is, therefore, held that time was not the essence of the contract between the parties. The issue is decided against the defendant.
23. Issue No.3.
During the course of hearing the present issue was not pressed by the learned counsel for the defendant. Neither anything has been said in the written submissions of the defendant which have been placed on record. Therefore, this issue is decided against the defendant.
24. Issues No. 2 and 4.
Both these issues are being taken up for consideration together since they are correlated and inter-connected.
25. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the Court, which discretion requires to be exercised according to settled principles of law and not arbitrarily.
26. Section 10 of the Specific Relief Act, 1963 (for short : the Act) provides that 'Except as otherwise provided in this Chapter, specific performance of any contract, in the discretion of the Court, be enforced - (a) when there exists no standard for ascertaining the actual damage caused by 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 performance would not afford adequate relief.' Subsection (1) of Section 20 of the Act says that 'The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant suck, 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. Sub-section (2) sets out the situations in which the Court may refuse specific performance. Sub-section (3) provides that the Court may properly exercise the discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. Section 21 of the Act sets out the circumstances in which the Court may award compensation in lieu of or in addition to specific performance. Section 23 provides that merely because an agreement mentions a particular sum payable by the defaulting party to the other, that shall not be a ground for refusing the specific performance.
27. Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to the grant of relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court has to take into consideration, the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. Right from the date of execution of the agreement till the date of the decree, he must aver and prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his 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 of the case whether the plaintiff was ready and willing to perform his part of the agreement.
28. There is no dispute between the parties that by virtue of the agreement Ex. PW 2/A followed by the two addendum defendant had agreed to sell 50 bighas 14 biswas of land out of his total land measuring 65 bighas 14 biswas of land. In the first agreement Ex, PW 2/A the exact area to be sold has not been mentioned. Vide this agreement an area measuring about 4500 square yards out of the estate known as 'The Peak' measuring about 5800 square yards was agreed to be sold for the consideration mentioned therein. The 'Khasra Nos.' of the land agreed to be sold also do not find mentioned in this agreement. The land agreed to be sold has also not been identified in the agreement by way of boundaries. Such area has been depicted to be falling within the red lines as shown in the contour plan Ex. PW 2/B annexed to the agreement. Clause (2) of this agreement reads :--
'A joint survey shall be undertaken within a period of 60 (sixty) days from the date of signing of this agreement and the area agreed to be sold shall be surveyed and demarcated at site and accordingly a plan shall be prepared on the basis; of such demarcation subject to the condition that the second party shall take approx. 45000 (forty five thousand) sq. yards leaving the remaining land towards Mashobra Bazar falling on the South East of the property.
29. According to the plaintiff, in terms of Clause (2) of the agreement Ex. PW 2/A, quoted above a joint survey of the land agreed to be sold was carried out on 19-10-1990 and a revised survey plan was prepared. As a consequence of such alleged joint survey an addendum Ex. PW 2/C to the agreement Ex. PW 2/A was entered into between the parties. The material part of this addendum reads :--
'The stipulated joint survey has now been undertaken on 19-10-1990 and a revised survey plan has been prepared on the basis of the survey and demarcation which is annexed hereto, with the area agreed to be sold by the First Party to the Second Party delineated in red colour. This revised survey plan so prepared duly signed by both the parties shall for all purposes and for all times would be considered as the only plan for the purposes of the said agreement and for the purpose of execution, of the sale Deed unless otherwise agreed to by and between both the parties.'
30. The contour plan Ex. PW 2/D, duly signed by the parties, and alleged to have been prepared after the alleged Joint survey of the land on 19-10-1990, has been annexed to and made a part of the addendum Ex. PW 2/C. In this revised contour plan Ex. PW 2/D also, neither the area nor khasra Nos. of the land agreed to be sold find mentioned nor the boundaries thereof have been specified nor such boundaries can be ascertained. Admittedly, neither the contour plan Ex. PW 2/B, annexed to original agreement Ex. PW 2/A, nor the contour plan Ex. PW 2/D, annexed to the addendum Ex. PW 2/C, has been prepared according to scale.
31. Though in the plan Ex. PW 2/D does not contain and specify either the area or the khasra Nos. of the land agreed to be sold, Clause (2) of the addendum Ex. PW 2/ C specifies the area to be sold as 50 bighas 14 biswas, equivalent to 45630 square yards comprising of Khasra Nos. 194, 195 (mm), 196, 197, 198, 199 (min), 200, 201, 202, 203, 204 and 205 (min).
32. There is no denying that out of khasra Nos. 195, 199 and 205 a part thereof was agreed to be sold and it was for this reason that in the addendum Ex. PW 2/C such part of the land out of khasra Nos. 195, 199 and 205 has been described as 195 min, 199 min and 205 min.
33. The total area of khasra No. 195 is 16 bighas 8 bis was and that of khasra No. 199 is 8 bighas 8 biswas while that of khasra No. 205 is 35 bighas 18 biswas. There is nothing either in the addendum Ex. PW 2/ C or in the plan Ex. PW 2/D or in any subsequent document to show as to what was the actual area which was to be purchased out of khasra Nos. 195, 199 and 205 and what are the boundaries of such land. The land agreed to be sold out of these three khasra Nos. has not been identified nor the same is capable of being identified on the basis of the material coming on record.
34. Ex. PW 3/D is the letter dated 31-12-1993 of the State Government whereby the necessary permission under Section 118, H.P. Tenancy and Land Reforms Act for the purchase of 50 bighas 14 biswas of land comprising of khasra Nos. 194/1, 195/1, 196, 197. 198, 199/1, 200, 201, 202, 203, 204 and 205/1 was granted in favour of plaintiff No. 2 From this letter also it cannot be made out as to what area out of khasra Nos. 194, 195, 199 and 205 (denoted by khasra Nos. 194/1, 195/1, 199/1 and 205/1) was agreed to be sold and purchased.
35. The identity of the land agreed to be sold and purchased is not certain, is also established from the fact that the parties are at variance with regard to land measuring 1 bigha 1 biswa forming part of khasra Nos. 194, 199 and 205 wherein the defendant has constructed a bungalow. The plaintiffs claim such area, on which construction has been raised by the defendant, to be a part of the land agreed to be sold, whereas according to the defendant the construction was carried out by him over the land not forming part of the land agreed to be sold and that it forms part of the land measuring 15 bighas, which was to be retained by him out of his total holding. Nothing has come on the record on behalf of the plaintiff to show that this parcel of land which the defendant has admittedly raised construction forms part of the land agreed to be sold vide agreement Ex. PW 2/A read with the two addendum Ex. PW 2/C and PW 2/F.
36. From the evidence coming on record, it can be inferred that the area measuring 1 bigha 1 biswa over which construction has been raised does not form part of the land agreed to be sold. Admittedly, out of the total area of 65 bighas 14 biswas, an area measuring 50 bighas 14 biswas was agreed to be sold by the defendant. The remaining area measuring 15 bighas was to be retained by him.
37. P. W. 5 Shri R.B. Sharma, Senior General Manager of plaintiff No. 1 as well as Director of plaintiff No. 2 (through whom the present suit has been filed) has admitted as under :--
'A sum of rupees five lacs was paid to the defendant for the alternate road and construction of cottage. 1 had not visited the site at the time of the filing of the suit, therefore, I cannot say if at the time the cottage was in existence or still in the process of being constructed. I had signed and verified the plaint after having gone through the same. It is correct that in para 32 of the plaint there is a mention that a cottage has been constructed by the defendant. I cannot say when such cottage was constructed whether before or after the agreement. At no time any letter or protest was sent by the plaintiff to the defendant regarding the construction of the cottage.'
PW 5 has further admitted as follows :--
It is correct that the cottage constructed by the defendant has been shown as house at point EFG in the plan Ex. PW 2/D. It is correct that during the pendency of the present case I had visited the spot along with wife of defendant and the Kanungo to measure and identify the disputed area where cottage has been constructed by the defendant and which he wants to retain. It is correct that the area of the cottage and the land appurtenant was found one bigha one biswas. It is correct that the area is depicted in tatima Ex. D-15 as ABCD. It is correct that this area falls in Khasra Nos. 194/1, 199/2 and 205/3.
38. It is admitted case of the parties that a meeting took place between the parties on 5-12-1991. Ex. PW2/E are the minutes recorded in such meeting. It was, inter alia, agreed between the parties as under :--
(i) The aspect of change in the northern boundary by about 200 sq. yds. (Two hundred square yards) of the land being purchased by the plaintiffs would be mutually decided after making a joint visit to the site; and
(ii) The plaintiffs would allow the defendant to continue to keep the animals in the same premises where these were being kept and his furniture/fixture etc. In the two front rooms of the main building and store room near the walnut tree for a few months until the new building being constructed by the defendant was ready.
39. In this letter dated 8/11-3-1994 the plaintiffs while reiterating their permission for using the building(s) for keeping animals and furniture etc. In paras 3(ii) to 3(iv) of such letter have averred :--
'It was intended that construction of your dwelling house/sheds etc. would be taken up immediately without even waiting for permission for transfer of property. It was for this reason that a provision was made in the agreement dated 28-9-1990 that in case the required permission are not received by our company, you would be entitled to retain a sum up to Rs. 5 lacs out of the advance/sale consideration paid by us to you. This was done to cover your cost of construction on the portion of the land which was to be retained by you, in the event of permission not having been received for the project.
Vide your letter dated 21-5-1992, you had asked for payment of part of sale consideration of Rs. 10 lacs to start construction of your building etc. A sum of Rs. 5 lacs was paid against this on 2-6-1992 and 25-7-1992 when you desired us not to send any more money as you did not need additional funds.
We, therefore, sincerely hope that by now, the construction of your buildings would have been over and therefore you would not be needing the buildings built in the portion of the property agreed to be sold by you to us.'
40. It is evident from the abovesaid letter that the plaintiffs till March, 1994 had no objection to the construction of cottage (bungalow) by the defendant. Rather they had provided financial assistance for the same. It was never claimed by the plaintiffs that the construction was being/had been carried out in a part of the land agreed to be sold. The defendant as DW 1 has stated that the work of construction was completed by him in December, 1993. Neither there is any denial nor rebuttal to this fact. It is only for the first time vide para 32 of the plaint that the plaintiffs have come up with the plea that the work of construction has been carried out by the defendant in a part of the land agreed to be sold to the plaintiffs.
41. Though it was agreed in the meeting held on 5-12-1991 vide minutes Ex. PW 2/ E that there would be a deviation/change in the northern boundary of the land agreed to be sold by about 200 square yards, which would be mutually decided after a Joint visit to the site, admittedly there has been no such Joint visit after 5-12-1991 for the said purpose. The defendant vide his communications, after the receipt of requisite permission Ex. PW 3/D by the plaintiffs to purchase the land, has been calling upon the plaintiffs for a joint demarcation of the land agreed to be sold but no steps in this regard were taken by the plaintiffs. PW 5 Shri R. B. Sharma has, during the course of his cross-examination admitted to the following facts:--
(i) The area marked as BCD in the plan Ex. PW 2/B (annexed to the original agreement Ex. PW 2/A) was left out in the plan Ex. PW 2/D (annexed to the first addendum Ex. PW 2/C);
(ii) At no time the area shown within the red lines in Ex. PW 2/B was got measured and demarcated to find out the exact area thereof in terms of square yards/sq. mts;
(iii) in the first addendum Ex. PW 2/C only the area agreed to be purchased by the plaintiffs and the sale consideration was mentioned/identified;
(iv) The tatima Ex. PW 3/C prepared on 30-10-1990 does not bear the signatures of the defendant;
(v) No tatima has been attached/annexed either to the agreement Ex. PW2/A or the addendums Ex. PW 2/C and Ex. PW 2/F;
(vi) The defendant vide letter Ex. PW 5/ D4 had called upon the plaintiffs for joint demarcation of the land agreed to be sold;
(vii) The defendant had visited Delhi on 22-1 -199.4 and had a meeting with the plaintiffs;
(viii) The defendant was disputing the area to be sold during his such visit to Delhi; and
(ix) The defendant had invited PW 5 to Mashobra on 7-2-1994 for demarcation of the area agreed to be sold;
42. It is also in the statement of PW 5 (while stating in his examination in chief) that the plan Ex. PW 2/D was signed by the parties since it was made a part of the agenda Ex. PW 2/C for the purpose of Identifying the area agreed to be sold. As pointed out above, neither the area of the land agreed to be sold, nor the khasra numbers, nor the boundaries thereof find mentioned in Ex. PW 2/D.
43. Much reliance was placed on behalf of the plaintiffs on the Tatima Ex. PW 3/C alleged to have been prepared by the Halqua Patwari on 20-10-1990 after joint survey of the land agreed to be sold and demarcation thereof; for the purpose of identifying the land agreed to be sold.
44. It may be stated that the Tatima Ex. PW 3/C cannot be looked into and relied upon for holding that the land depicted therein was in fact agreed to be sold. Firstly, Ex. PW 3/C has not been proved in evidence in accordance with law. Nothing has come on the record to show as to who had carried out the demarcation and who had prepared the Tatima Ex. PW 3/C.
45. According to the plaintiffs the demarcation at the spot were carried out by PW 4 Bal Kishan Patwari on 18/19-10-1990 18/19-10-1990 and the Tatima Ex. PW 3/C was prepared by him. PW4 Bal Kishan. however, is silent on this aspect PW 4 has deposed that he had carried out the demarcation at the spot on the asking of the defendant and after such demarcation, had prepared the Tatima Ex. PW 3/B. He does not say that Tatima Ex. PW 3/C was prepared by him after carrying out the demarcations.
46. A bare perusal of the Tatima Ex. PW 2/B shows that the same is shown to have been prepared on 1-9-1990, that is, before the execution of the agreement dated 28-9-1990 Ex. PW 2/A. This Tatima shows the entire land measuring 65 bighas 15 biswas of the defendant. The area agreed to be sold is not depicted therein. Assuming that this Tatima was got prepared by the defendant, as claimed by PW 4, the same might have been got prepared by him only for the purpose of identifying the estate owned by him for the purpose of agreement Ex. PW 2/A.
47. Tatima Ex. PW 3/C is shown to have been prepared on 20-10-1990. As stated above, there is nothing on record to show as to who prepared it. This Tatima is not a public document nor the same is per se admissible in evidence. In order to prove the same in evidence, the person preparing the same was required to be examined. Merely because the same has been marked as an exhibit would not dispense with the proof of the same in accordance with law.
48. In Sait Tarajee Khimchand v. Yamarti Satyam, AIR 1971 SC 1865, the plaintiff therein wanted to rely upon two documents, namely, day book and ledger, which had been marked as Exs. A/12 and A/13, respectively. No evidence was led by the plaintiffs to prove these documents. In the absence of formal proof of these documents, the Hon'ble Supreme Court did not rely on these documents and it was held that mere marking of an exhibit does not dispense with the proof of documents.
49. To the similar effect is the decision of Gauhati High Court in Thagiram Borah v. State of Assam, AIR 1980 Gau 59 and a Division Bench of the Calcutta High Court in Punjab National Bank v. Britannia Industries Ltd., 2002 (3) Civil Law Times 517.
50. In the present case as well in the absence of formal proof of the Tatima Ex. PW 3/C, no reliance can be placed thereon even though it has been marked as an exhibit.
51. Secondly, the Tatima Ex. PW 3/C was never made a part of the agreement Ex. PW 2/A or the addendums Ex. PW 2/C and PW 3/D, nor the parties appear to have intended to make it a part of the agreement and the addendums. The addendum Ex. PW 2/C specifically stipulates :
'This revised survey plan (annexed to the addendum Ex. PW 2/D) so prepared duly signed by both the parties shall for all purposes and for all times would be considered as the only plan for the purpose of the said agreement and for the purpose of execution of sale deed unless otherwise agreed to by and between both the parties.'
52. From the above, it is evident that parties intended only the Plan Ex. PW 2/D to be made a part of the agreement and that Tatima Ex. PW 3/C was never so intended. Therefore, Ex. PW 3/C cannot be looked into for the purpose of holding that the land detailed therein was agreed to be sold.
53. The fact that the plaintiffs are themselves not sure of the agreed to be sold is also evident from the fact that though in the addendum the whole of khasra No. 194 is recorded to have been agreed to be sold, in para 10 of the plaint as well as in the prayer clause, the plaintiffs have claimed only a part of this khasra number to the extent of 11 biswas by describing the same either as khasra No. 194 min or khasra No. 194/1. If only a part of khasra No; 194 was agreed to be sold, then such part has not been identified. Even the Tatima Ex. PW 3/C does not depict that particular part of khasra No. 194/1 (194 min) measuring 11 biswas which according to the plaintiffs was agreed to be sold and regarding which relief is being sought by them.
54. It is significant to note that vide minutes Ex. PW 2/E of the meeting held between the parties on 5-12-1991, as stated above, the parties had agreed to the deviation/change in the northern boundary of the land agreed to be sold. Such deviation/ change was to the extent of about 200 sq. yds. which was to be decided mutually after joint visit and inspection of the site. Nothing has come on the record to show that anytime there was a joint visit and inspection of the site to decide and identify the deviation to be made in the northern boundary. Admittedly, as per the plaintiffs the only joint inspection/survey of the land agreed to be sold was made on 20-10-1990 before the execution of the first addendum Ex. PW 2/C. There is evidence on record in the form of letters from the defendant whereby the plaintiffs were repeatedly called upon to get the land agreed to be sold demarcated. PW 5 has categorically admitted to this fact and that even in the meeting held at Delhi on 22-1-1994 the defendant had disputed the area to 'be sold' and had invited and plaintiffs to Mashobra on 7-2-1994 for joint demarcation of the land. Nothing was done by the plaintiffs to get the land agreed to be demarcated in terms of the minutes Ex. PW 2/E and in spite of repeated requests of the defendant.
55. The evidence coming on record not only shows that there has been a mutual mistake between the parties as to the land agreed to be sold, it also shows that the identity of the land agreed to be sold has also not been established nor such identity can be established.
56. It is also worthy to note that vide para 46(iii) of the plaint, the plaintiffs have themselves prayed for a relief regarding the delineation of the land agreed to be sold vide agreement entered into between the parties. In other words, in seeking such a prayer for delineation of the land agreed to be sold, it is established that even the plaintiffs are not sure of the land which was agreed to be purchased by them from the defendant.
57. In Nahar Singh v. Harnak Singh and others (1996) 6 SCC 699, where the property agreed to be sold was vague and un-inentifiable since neither the exact area of the land to be sold nor the boundaries were mentioned and no length and breadth of the land were given nor the agreement pinpointed the place from where it was to be measured, it was held that since the property agreed to be sold was not identifiable, no relief by way of specific performance could be granted. The property must be identifiable in order to avail the relief under the Specific Relief Act.
58. During the course of hearing of the case on 14-11-2000 an offer was made by the defendant to the plaintiffs that he was ready to execute the sale deed in respect of 50 bighas 14 biswas of land in terms of the agreement which area may be demarcated at the spot leaving out the area of 1 bigha 1 biswas where he had raised the construction of his cottage. On such offer opportunity was given to the parties to visit the spot and to arrive at some amicable settlement. However, in spite of opportunity(s) no settlement could be arrived at since the plaintiffs were not ready to leave the said disputed area of 1 bigha 1 biswas. A similar offer was again made by the defendant on 3-6-2002 and at the request of learned counsel for the plaintiffs again an opportunity was granted to the plaintiffs to consider the offer and explore the possibility of some amicable settlement. However, no settlement was arrived at since the plaintiffs were not agreeing to leave the disputed area of 1 bigha 1 biswas.
59. In K. Narendra v. Riviera Apartments (P) Ltd. (1999) 5 SCC 77 : (AIR 1999 SC 2309), it has been held the Section 20 of the Act provides that 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. 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. Performance of the contract involving some hardship on the defendant, which he did not foresee, while non-performance invoking no hardship on the plaintiff, is one of the circumstances in which the Court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been statutorily recognised in India.
60. The Hon'ble Supreme Court in N. P. Thirugnanam (D) by L. Rs. v. Dr. R. Jagan Mohan Rao, AIR 1996 SC 116, has held that right from the date of execution of the agreement till the date of the decree the plaintiff must prove that he is ready and has always been ready and willing to perform his part of the agreement. The factum of his readiness and willingness to perform his part of the agreement 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 of the case whether the plaintiff was ready and was always ready and willing to perform his part of the contract.
61. The conduct of the plaintiffs, in the present case, by insisting upon the disputed area measuring 1 bigha 1 biswas on which the defendant has constructed a cottage and which area has been held to be not a part of the land agreed to be sold, to be a part of and for its inclusion in the land agreed to be sold, shows that they are not ready and willing to perform their part of the contract. Besides, the inclusion of this disputed area in the land agreed to be sold and by grant of decree of specific performance would involve substantial hardship to the defendant who has raised construction over such area to the knowledge of and with the finances provided to him by the plaintiffs themselves. Admittedly, no objection was ever raised by the plaintiffs at any time to such construction by the defendant, who in view of the demarcation of the exact land to be sold has been believing that such area formed part of the land to be retained by him and as such could not foresee the likely hardship in the event of decree for specific performance. This disputed are marked as BCD in the plan Ex. PW 2/B was left out in the plan Ex. PW/D annexed to the addendum Ex. PW 2/C (as admitted by PW 5). The plaintiffs have not accepted the offer of the defendant made twice during the pendency of the suit as pointed out above.
62. I, therefore, hold that the parties are under a mutual mistake as to the identity of the land agreed to be sold and that the plaintiffs are not ready and willing to perform their part of the contract. Issue No. 2 is decided against the plaintiffs while issue No. 4 is decided in favour of the defendant.
63. Relief:
As a result of my findings on issues Nos. 2 and 4 above, the suit of the plaintiff for specific performance fails. However, in view of the fact that the parties have been under a mutual mistake as to the identity of the land agreed to be sold and the agreement between the parties has been found to be not capable or specifically enforced, the defendant is liable to refund the whole sum of Rs. 30,00,0007- (Rupees thirty lacs) received by him as part payment of the sale consideration. A decree for the said sum of Rs. 30,00,000/- with proportionate costs is, therefore, passed in favour of the plaintiffs and against the defendant.
64. Coming to the question of award of interest on the sum of Rs. 30,00,000/- it is significant to note that the transaction between the parties is not a commercial transaction. Section 34 prohibits the grant of interest exceeding 6% per annum in the case of non-commercial transactions. Therefore, the plaintiffs shall be entitled to interest at the rate of 6% per annum on the principal amount of Rs. 30.00.000/- from the date of suit, that is, 18-6-1994 till the date of payment of the said amount.