Satish Kumar and Another Vs. Ram Singh - Court Judgment

SooperKanoon Citationsooperkanoon.com/951177
CourtPunjab and Haryana High Court
Decided OnJan-17-2012
Case NumberRegular Second Appeal NO. 3935 of 2011
Judge L.N. MITTAL
AppellantSatish Kumar and Another
RespondentRam Singh
Excerpt:
l.n. mittal, j. oral: plaintiffs who were successful in the trial court but have been nonsuited by the lower appellate court have filed the instant second appeal. case of the plaintiffs is that defendant-respondent ram singh vide agreement dated 18.06.1996 agreed to sell the suit land measuring 52 bighas 4 biswas to plaintiff no.1 @ rs.5,40,000/- (rupees five lacs forty thousand) per acre comprising of 4 bighas. however, in the agreement, area of khasra no.949/855 was wrongly mentioned as 2 bighas 4 biswas although its actual area, which is also in possession of the defendant, is 2 bighas 10 biswas and thus in the agreement, total area of the suit land was mentioned to be 51 bighas 18 biswas instead of 52 bighas 4 biswas. at the time of agreement, the defendant received rs.10,00,000/- (rupees ten lacs) as earnest money. sale deed was to be executed on or before 10.09.1996. defendant was to obtain income tax clearance certificate. plaintiff no.1 assigned his rights under the agreement to plaintiff no.2 vide writing dated 25.06.1996. accordingly plaintiff no.2 is entitled to seek specific performance of the agreement, but if the same is not allowed, then plaintiff no.1 is entitled to the said relief. plaintiffs alleged that they have always been ready and willing to perform their part of contract but the defendant committed breach thereof. accordingly the plaintiffs sought relief of possession of the suit land by specific performance of the agreement and in the alternative, relief of recovery of rs.70,46,960/- (rupees seventy lacs forty six thousand nine hundred sixty). the defendant admitted that he had agreed to sell the suit land to plaintiff no.1 but the agreed rate was rs.10,00,000/- (rupees ten lacs) per 4 bighas i.e. per acre and not rs.5,40,000/- (rupees five lacs forty thousand) per acre. the defendant also denied receipt of earnest money. the defendant alleged that he was always ready and willing to perform his part of the contract but plaintiffs themselves committed breach thereof. the defendant also alleged that he had also obtained income tax clearance certificate. various other pleas were also raised. learned additional civil judge (senior division), dera bassi vide judgment and decree dated 08.11.2008 decreed the plaintiffs' suit for possession of the suit land by specific performance of the impugned agreement. however, first appeal preferred by defendant has been allowed by learned additional district judge, sas nagar, mohali vide judgment and decree dated 16.07.2011 and thereby suit filed by plaintiffs stands dismissed. feeling aggrieved, plaintiffs have filed instant second appeal. i have heard learned counsel for the parties and perused the case file. before proceeding further, it has to be noticed that during pendency of the first appeal, defendant sought amendment of his written statement to plead that the agreement was for sale of the suit land @ rs.5,40,000/- (rupees five lacs forty thousand) per acre (as pleaded by the plaintiffs) and the plea of the rate being rs.10,00,000/- (rupees ten lacs) per acre was taken in the written statement due to wrong advice of the counsel. however, lower appellate court rejected the said application of defendant for amendment of written statements vide order dated 20.12.2010 and civil revision no.172 of 2011 filed by defendant against the said order was dismissed by this court vide order dated 12.01.2011. finding of the trial court on issue no.1 that the defendant entered into impugned agreement of sale dated 18.06.1996 exhibit p-1 @ rs.5,40,000/- (rupees five lacs forty thousand) per acre and received rs.10,00,000/- (rupees ten lacs) as earnest money was not challenged by the defendant before lower appellate court as mentioned in its judgment. accordingly the said finding has attained finality. even otherwise, there is sufficient evidence to prove said issue no.1. in fact, defendant by seeking amendment of written statement admitted the said plea of the plaintiffs. the substantial question of law that arises for adjudication in the instant second appeal is whether the finding of the lower appellate court on issue no.2 that plaintiffs are not entitled to specific performance of the agreement (being not always ready and willing to perform their part of contract) is legally sustainable or not ? date for execution of the sale deed as stipulated in the agreement was 10.09.1996. the plaintiff filed the instant suit on 09.09.1999 i.e. after expiry of almost three years. during this long period of three years, plaintiffs remained completely silent except sending notice dated 31.08.1999 to the defendant i.e. ten days before the expiry of limitation period of three years for filing of suit. the plaintiffs also did not attend the office of the sub-registrar on 10.09.1996 the date stipulated in agreement for execution of sale deed. on the other hand, the defendant went to the office of sub-registrar on 10.09.1996 to execute the sale deed in terms of the agreement but plaintiff no.1 did not turn up. defendant affirmed affidavit dated 10.09.1996 exhibit d-4 regarding his presence and readiness and willingness to perform his part of the contract. he also sent notice dated 11.09.1996 exhibit d-1 to plaintiff no.1 by registered post vide postal receipt exhibit d-2 requiring plaintiff no.1 to get the sale deed executed within reasonable time say within ten days. however, even then the plaintiffs remained silent. plaintiffs have denied the receipt of the said notice but postal receipt exhibit d-2 raises presumption that the said notice was received by plaintiff no.1. defendant had also obtained income tax clearance certificate dated 10.09.1996 exhibit d-3. in all these documents i.e. notice exhibit d-1, income tax clearance certificate exhibit d-3 and affidavit exhibit d-4, defendant no.1 himself stated that agreed read was rs.5,40,000/- (rupees five lacs forty thousand) per acre. he also stated in notice and affidavit that he had received rs.10,00,000/- (rupees ten lacs) as earnest money. in income tax clearance certificate, the total sale consideration arrived at @ rs.5,40,000/- (rupees five lacs forty thousand) per acre was mentioned. these contemporaneous documents dated 10/11-09.1996 (the date stipulated for execution of the sale deed being 10.09.1996) depict that the defendant was ready and willing to perform his part of the contract and he admitted that the agreed rate was rs.5,40,000/- (rupees five lacs forty thousand) per acre and that he had also received rs.10,00,000/- (rupees ten lacs) as earnest money. however, the plaintiffs remained silent for almost three years since the date stipulated in the agreement for execution of the sale deed. consequently the plaintiffs are not entitled to relief of specific performance of the impugned agreement. learned counsel for the appellants relying on judgments of hon'ble supreme court in the case of chand rani versus kamal rani, (1993) 1 supreme court cases 519; swarnam ramachandran and another versus aravacode chakungal jayapalan, (2004) 8 supreme court cases 689; balasaheb dayandeo naik (dead) through lrs and others versus appasaheb dattatraya pawar (2008) 4 supreme court cases 464 and govind prasad chaturvedi versus hari dutt shashtri and another, (1977) 2 supreme court cases 539, contended that time is not the essence of the contract in case of agreement to sell immovable property and even defendant did not take the plea that time was essence of the contract and consequently the plaintiffs cannot be denied relief of specific performance of the agreement. learned counsel for the appellant also contended that judgment of hon'ble supreme court in the case of sardamani kandappan versus s. rajalakshmi and others with s. rajalakshmi and others versus saradamani kandappan and another, 2011(4) rcr (civil) 130 relied on by lower appellate court does not lay down that time should be presumed to be essence of the contract in view of rising prices of real estate, but left the matter open. i have carefully considered aforesaid contentions. it is correct that time is not the essence of the contract in case of agreement for sale of immovable property unless it is so made by the parties. in the instant case, the defendant did not even plead that time was essence of the contract nor there is any other circumstance to depict that time was essence of the contract. nevertheless, in the peculiar facts and circumstances of the instant case, the plaintiffs are not entitled to relief of specific performance of the agreement because they were not ready and willing to perform their part of the contract because they remained silent for almost three years, whereas the defendant always remained ready and willing to perform his part of the contract as noticed hereinbefore. the next question that arises for determination is as to whether the plaintiffs are entitled to any other relief in my considered opinion, the plaintiffs are entitled to refund of their earnest money along with interest thereon at reasonable rate. this relief is being granted to the plaintiffs because in the written statement, defendant came with false stand that he had agreed to sell the suit land @ rs.10,00,000/- (rupees ten lacs) per acre whereas, in fact, the agreed rate was rs.5,40,000/- (rupees five lacs forty thousand) per acre as pleaded by the plaintiffs. similarly the defendant in the written statement also falsely denied the receipt of earnest money although now it is admitted case that the defendant had received the earnest money of rs.10,00,000/- (rupees ten lacs) as pleaded by the plaintiffs. even in the witness box, defendant's attorney ram gopal dw-3 in examination-in-chief reiterated the aforesaid false stand taken in the written statement. the contention that the false stand in this regard was taken on legal advice of the counsel cannot be accepted and attempt of defendant to seek amendment of written statement on this ground has already been negatived. learned counsel for the defendant-respondent also contended that the agreed rate was mentioned to be rs.10,00,000/- (rupees ten lacs) per acre in the written statement on account of inadvertent error because the amount of earnest money received was rs.10,00,000/- (rupees ten lacs). this contention is also completely unacceptable because the defendant in the written statement even denied receipt of any earnest money. moreover, it was repeatedly pleaded in the written statement and reiterated by defendant's attorney ram gopal in the examination-in-chief that agreed rate was rs.10,00,000/- (rupees ten lacs) per acre and not rs.5,40,000/- (rupees five lacs forty thousand) per acre. ram gopal even stated that the defendant was ready and willing to execute the sale deed @ rs.10,00,000/- (rupees ten lacs) per acre and not @ rs.5,40,000 per acre. in view of this false stand of the defendant and also since the suit was filed within limitation period, the ends of the justice would be met if the plaintiffs are granted relief of refund of earnest money along with interest. substantial question of law posed at the outset is answered accordingly. as regards rate of interest to be awarded, interest rates were very high when earnest money was paid on 18.06.1996 at the time of agreement. interest rates started declining in the year 2000. consequently it would be reasonable to award interest @ 18 per cent per annum since the date of payment of earnest money i.e. 18.06.1996 till 09.09.1999 the date of filing of the suit. however, since thereafter interest rates started declining, it would be appropriate to award pendente lite and future interest @12 per cent per annum. for the reasons aforesaid, the instant second appeal is allowed partly. impugned judgment and decree of the lower appellate court are set aside. judgment and decree of the trial court are modified. suit filed by the plaintiffs is decreed for recovery of rs.10,00,000/- (rupees ten lacs only) along with interest thereon @ 18 per cent per annum since the date of agreement i.e. 18.06.1996 till the filing of the suit i.e. 09.09.1999 and @ 12 per cent per annum since the date of filing of suit till recovery, along with proportionate costs throughout.
Judgment:

L.N. Mittal, J.

Oral:

Plaintiffs who were successful in the trial Court but have been nonsuited by the lower appellate Court have filed the instant second appeal.

Case of the plaintiffs is that defendant-respondent Ram Singh vide agreement dated 18.06.1996 agreed to sell the suit land measuring 52 bighas 4 biswas to plaintiff No.1 @ Rs.5,40,000/- (Rupees five lacs forty thousand) per acre comprising of 4 bighas. However, in the agreement, area of khasra No.949/855 was wrongly mentioned as 2 bighas 4 biswas although its actual area, which is also in possession of the defendant, is 2 bighas 10 biswas and thus in the agreement, total area of the suit land was mentioned to be 51 bighas 18 biswas instead of 52 bighas 4 biswas. At the time of agreement, the defendant received Rs.10,00,000/- (Rupees ten lacs) as earnest money. Sale deed was to be executed on or before 10.09.1996. Defendant was to obtain income tax clearance certificate. Plaintiff No.1 assigned his rights under the agreement to plaintiff No.2 vide writing dated 25.06.1996. Accordingly plaintiff No.2 is entitled to seek specific performance of the agreement, but if the same is not allowed, then plaintiff No.1 is entitled to the said relief. Plaintiffs alleged that they have always been ready and willing to perform their part of contract but the defendant committed breach thereof. Accordingly the plaintiffs sought relief of possession of the suit land by specific performance of the agreement and in the alternative, relief of recovery of Rs.70,46,960/- (Rupees Seventy lacs forty six thousand nine hundred sixty).

The defendant admitted that he had agreed to sell the suit land to plaintiff No.1 but the agreed rate was Rs.10,00,000/- (Rupees ten lacs) per 4 bighas i.e. per acre and not Rs.5,40,000/- (Rupees five lacs forty thousand) per acre. The defendant also denied receipt of earnest money. The defendant alleged that he was always ready and willing to perform his part of the contract but plaintiffs themselves committed breach thereof. The defendant also alleged that he had also obtained income tax clearance certificate. Various other pleas were also raised.

Learned Additional Civil Judge (Senior Division), Dera Bassi vide judgment and decree dated 08.11.2008 decreed the plaintiffs' suit for possession of the suit land by specific performance of the impugned agreement. However, first appeal preferred by defendant has been allowed by learned Additional District Judge, SAS Nagar, Mohali vide judgment and decree dated 16.07.2011 and thereby suit filed by plaintiffs stands dismissed. Feeling aggrieved, plaintiffs have filed instant second appeal.

I have heard learned counsel for the parties and perused the case file.

Before proceeding further, it has to be noticed that during pendency of the first appeal, defendant sought amendment of his written statement to plead that the agreement was for sale of the suit land @ Rs.5,40,000/- (Rupees five lacs forty thousand) per acre (as pleaded by the plaintiffs) and the plea of the rate being Rs.10,00,000/- (Rupees ten lacs) per acre was taken in the written statement due to wrong advice of the counsel. However, lower appellate Court rejected the said application of defendant for amendment of written statements vide order dated 20.12.2010 and Civil Revision No.172 of 2011 filed by defendant against the said order was dismissed by this Court vide order dated 12.01.2011.

Finding of the trial Court on issue No.1 that the defendant entered into impugned agreement of sale dated 18.06.1996 Exhibit P-1 @ Rs.5,40,000/- (Rupees five lacs forty thousand) per acre and received Rs.10,00,000/- (Rupees ten lacs) as earnest money was not challenged by the defendant before lower appellate Court as mentioned in its judgment. Accordingly the said finding has attained finality. Even otherwise, there is sufficient evidence to prove said issue No.1. In fact, defendant by seeking amendment of written statement admitted the said plea of the plaintiffs.

The substantial question of law that arises for adjudication in the instant second appeal is whether the finding of the lower appellate Court on issue No.2 that plaintiffs are not entitled to specific performance of the agreement (being not always ready and willing to perform their part of contract) is legally sustainable or not ?

Date for execution of the sale deed as stipulated in the agreement was 10.09.1996. The plaintiff filed the instant suit on 09.09.1999 i.e. after expiry of almost three years. During this long period of three years, plaintiffs remained completely silent except sending notice dated 31.08.1999 to the defendant i.e. ten days before the expiry of limitation period of three years for filing of suit. The plaintiffs also did not attend the office of the Sub-Registrar on 10.09.1996 the date stipulated in agreement for execution of sale deed. On the other hand, the defendant went to the office of Sub-Registrar on 10.09.1996 to execute the sale deed in terms of the agreement but plaintiff No.1 did not turn up. Defendant affirmed affidavit dated 10.09.1996 Exhibit D-4 regarding his presence and readiness and willingness to perform his part of the contract. He also sent notice dated 11.09.1996 Exhibit D-1 to plaintiff No.1 by registered post vide postal receipt Exhibit D-2 requiring plaintiff No.1 to get the sale deed executed within reasonable time say within ten days. However, even then the plaintiffs remained silent. Plaintiffs have denied the receipt of the said notice but postal receipt Exhibit D-2 raises presumption that the said notice was received by plaintiff No.1. Defendant had also obtained income tax clearance certificate dated 10.09.1996 Exhibit D-3. In all these documents i.e. notice Exhibit D-1, income tax clearance certificate Exhibit D-3 and affidavit Exhibit D-4, defendant No.1 himself stated that agreed read was Rs.5,40,000/- (Rupees five lacs forty thousand) per acre. He also stated in notice and affidavit that he had received Rs.10,00,000/- (Rupees ten lacs) as earnest money. In income tax clearance certificate, the total sale consideration arrived at @ Rs.5,40,000/- (Rupees five lacs forty thousand) per acre was mentioned. These contemporaneous documents dated 10/11-09.1996 (the date stipulated for execution of the sale deed being 10.09.1996) depict that the defendant was ready and willing to perform his part of the contract and he admitted that the agreed rate was Rs.5,40,000/- (Rupees five lacs forty thousand) per acre and that he had also received Rs.10,00,000/- (Rupees ten lacs) as earnest money. However, the plaintiffs remained silent for almost three years since the date stipulated in the agreement for execution of the sale deed. Consequently the plaintiffs are not entitled to relief of specific performance of the impugned agreement.

Learned counsel for the appellants relying on judgments of Hon'ble Supreme Court in the case of Chand Rani versus Kamal Rani, (1993) 1 Supreme Court cases 519; Swarnam Ramachandran and another versus Aravacode Chakungal Jayapalan, (2004) 8 Supreme Court Cases 689; Balasaheb Dayandeo Naik (dead) through LRs and others versus Appasaheb Dattatraya Pawar (2008) 4 Supreme Court Cases 464 and Govind Prasad Chaturvedi versus Hari Dutt Shashtri and another, (1977) 2 Supreme Court Cases 539, contended that time is not the essence of the contract in case of agreement to sell immovable property and even defendant did not take the plea that time was essence of the contract and consequently the plaintiffs cannot be denied relief of specific performance of the agreement. Learned counsel for the appellant also contended that judgment of Hon'ble Supreme Court in the case of Sardamani Kandappan versus S. Rajalakshmi and others with S. Rajalakshmi and others versus Saradamani Kandappan and another, 2011(4) RCR (Civil) 130 relied on by lower appellate Court does not lay down that time should be presumed to be essence of the contract in view of rising prices of real estate, but left the matter open.

I have carefully considered aforesaid contentions. It is correct that time is not the essence of the contract in case of agreement for sale of immovable property unless it is so made by the parties. In the instant case, the defendant did not even plead that time was essence of the contract nor there is any other circumstance to depict that time was essence of the contract. Nevertheless, in the peculiar facts and circumstances of the instant case, the plaintiffs are not entitled to relief of specific performance of the agreement because they were not ready and willing to perform their part of the contract because they remained silent for almost three years, whereas the defendant always remained ready and willing to perform his part of the contract as noticed hereinbefore.

The next question that arises for determination is as to whether the plaintiffs are entitled to any other relief In my considered opinion, the plaintiffs are entitled to refund of their earnest money along with interest thereon at reasonable rate. This relief is being granted to the plaintiffs because in the written statement, defendant came with false stand that he had agreed to sell the suit land @ Rs.10,00,000/- (Rupees ten lacs) per acre whereas, in fact, the agreed rate was Rs.5,40,000/- (Rupees five lacs forty thousand) per acre as pleaded by the plaintiffs. Similarly the defendant in the written statement also falsely denied the receipt of earnest money although now it is admitted case that the defendant had received the earnest money of Rs.10,00,000/- (Rupees ten lacs) as pleaded by the plaintiffs. Even in the witness box, defendant's attorney Ram Gopal DW-3 in examination-in-chief reiterated the aforesaid false stand taken in the written statement. The contention that the false stand in this regard was taken on legal advice of the counsel cannot be accepted and attempt of defendant to seek amendment of written statement on this ground has already been negatived. Learned counsel for the defendant-respondent also contended that the agreed rate was mentioned to be Rs.10,00,000/- (Rupees ten lacs) per acre in the written statement on account of inadvertent error because the amount of earnest money received was Rs.10,00,000/- (Rupees ten lacs). This contention is also completely unacceptable because the defendant in the written statement even denied receipt of any earnest money. Moreover, it was repeatedly pleaded in the written statement and reiterated by defendant's attorney Ram Gopal in the examination-in-chief that agreed rate was Rs.10,00,000/- (Rupees ten lacs) per acre and not Rs.5,40,000/- (Rupees five lacs forty thousand) per acre. Ram Gopal even stated that the defendant was ready and willing to execute the sale deed @ Rs.10,00,000/- (Rupees ten lacs) per acre and not @ Rs.5,40,000 per acre. In view of this false stand of the defendant and also since the suit was filed within limitation period, the ends of the justice would be met if the plaintiffs are granted relief of refund of earnest money along with interest.

Substantial question of law posed at the outset is answered accordingly.

As regards rate of interest to be awarded, interest rates were very high when earnest money was paid on 18.06.1996 at the time of agreement. Interest rates started declining in the year 2000. Consequently it would be reasonable to award interest @ 18 per cent per annum since the date of payment of earnest money i.e. 18.06.1996 till 09.09.1999 the date of filing of the suit. However, since thereafter interest rates started declining, it would be appropriate to award pendente lite and future interest @12 per cent per annum.

For the reasons aforesaid, the instant second appeal is allowed partly. Impugned judgment and decree of the lower appellate Court are set aside. Judgment and decree of the trial Court are modified. Suit filed by the plaintiffs is decreed for recovery of Rs.10,00,000/- (Rupees ten lacs only) along with interest thereon @ 18 per cent per annum since the date of agreement i.e. 18.06.1996 till the filing of the suit i.e. 09.09.1999 and @ 12 per cent per annum since the date of filing of suit till recovery, along with proportionate costs throughout.