RAVI SETIA vs. MADAN LAL

Case Type: Civil Appeal

Date of Judgment: 04-10-2019

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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(s). 2837 OF 2011
RAVI SETIA
VERSUS
MADAN LAL AND OTHERS
JUDGMENT NAVIN SINHA, J. The plaintiff assails correctness of the order allowing the second appeal of the defendants.   By the impugned order, the High Court set aside the concurrent orders of the courts below decreeing the plaintiff’s suit for specific performance.   2. The   plaintiff   filed   a   suit   for   specific   performance   of rd agreement for sale dated 10.11.1989 with regard to 2/3  of the lands owned by defendants 1 and 2 as Defendant No. 3 declined Signature Not Verified Digitally signed by SANJAY KUMAR Date: 2019.10.04 12:18:41 IST Reason: to sign the agreement. Rs. 50,000/­ was paid as earnest money 1 and the balance consideration of Rs.3,10,490/­ was to be paid at the time of execution. The agreement provided for execution of the sale deed on or before 30.04.1990.  The Trial Court decreed the suit holding that the plaintiff had remained present in the office of the Sub­Registrar for registration of the sale documents on 30.04.1990, but defendant nos. 1 and 2 did not appear for execution.   During the pendency of the proceedings, defendant nos. 1 and 2 sold the lands to defendant nos. 4 to 7 by three separate sale deeds dated 16.01.1991.   The first appeal by the defendants was dismissed holding that defendant nos. 4 to 7 were not bonafide purchasers.  Thus, the present appeal. 3. Shri Amit Anand Tiwari, learned counsel for the appellant­ plaintiff, submitted that the High Court in a second appeal ought not to have interfered with a concurrent finding of fact that the plaintiff   was   ready   and   willing   to   perform   his   part   of   the obligations under the agreement.   Defendant nos. 1 and 2 had failed   to   appear   before   the   Sub­Registrar   for   execution   on 30.04.1990.   The plaintiff never received the purported notices from defendant nos.1 and 2 dated 28.05.1990 and 12.06.1990 2 requiring the plaintiff to execute the sale deed on 25.06.1990. The subsequent sale to defendants 4 to 7 has been held to be not bonafide, but a sham transaction.  The plaintiff had been granted extension of time for deposit of the balance consideration by the Trial   Court   till   the   disposal   of   the   first   appeal.   The   balance consideration was deposited after decision in the First Appeal.  In the alternative, a submission was made that if the appeal is not to be allowed, defendants 1 and 2 may be directed to pay the sum of Rs.1,00,000/­ to the plaintiff comprising the earnest money plus damages as claimed in the suit. 4. Shri Ranjit Thomas, learned senior counsel appearing for the   defendants­respondents,   submitted   that   the   plaintiff   had failed   to   prove   readiness   and   willingness   to   perform   its obligations under the agreement. The defendants were not put on notice for appearance before the Sub­Registrar on 30.04.1990. The   notices   dated   28.05.1990   and   12.06.1990   were   sent   by defendants   1   and   2   through   registered   post   at   the   correct residential address of the plaintiff.  The plaintiff did not respond to the same because he did not have the capacity to perform his 3 obligations under the agreement and failed to deposit the balance consideration within the two months’ time granted by the Trial Court on 01.06.1994.  The application for extension of time made after expiry of the time prescribed is sufficient evidence for the incapacity   of   the   plaintiff   to   perform   his   obligations demonstrating   readiness   and   willingness.     The   High  Court  in second appeal was empowered to set aside concurrent findings of facts if they were perverse.   5. We have considered the submissions on behalf of the parties and   have   also   been   taken   through   the   orders   under   appeal. Defendants nos. 1 to 3 owned 61 karnals 17 marlas of lands in Village Gumjal, Tehsil Abohar, District Ferozpur.  Defendant no.3 having refused to sign the agreement for sale dated 10.11.1989, the plaintiff instituted a suit for enforcement of the agreement rd with regard to the 2/3  share of defendants 1 and 2.  The sale deed was to be executed on or before 30.04.1990.   The Trial Court and  the   First  Appellate   Court  arrived  at  the   finding  of readiness and willingness on part of the plaintiff solely on basis of   a   certificate   produced   by   them   from   the   Sub­Registrar 4 confirming   their   presence   before   him   on   30.04.1990   for execution. Apart from the same, no further evidence was led by the plaintiff to demonstrate readiness and willingness including the   continuous   capacity   for   discharge   of   the   balance consideration.   The   plaintiff   in   its   application   before   the   Sub­ Registrar stated that he had required defendants 1 and 2 to be present for registration on 25.06.1990.  No evidence whatsoever has been led by the plaintiff in support of the same.  We are of the considered opinion that in the circumstances the certificate from   the   office   of   the   Sub­Registrar   cannot   be   construed   as conclusive evidence to non­suit defendants 1 and 2.  The findings to that effect are therefore held to be unsustainable. 6. Defendant   nos.   1   and   2   by   registered   notices   dated 28.05.1990 and 12.06.1990 required the plaintiff to get the sale deed executed by 25.06.1990.  The plaintiff does not dispute that the communication was   properly  addressed   and   sent  through registered acknowledgement due. If it was returned back with the endorsement that the plaintiff was not available at his home, defendants 1 and 2 were not required to do anything further.  If 5 the plaintiff was of the opinion that the endorsement was wrong, it was for him to have contended so and led necessary evidence in   this   regard.     The   Trial   Court   rightly   did   not   disbelieve defendants 1 and 2, but without returning any finding in that regard   preferred   to   rely   on   the   unsubstantiated   claim   of   the plaintiff   of   having   been   present   before   the   Sub­Registrar   on 30.04.1990.  The said finding is also held to be unsustainable. 7.  Under Section 16 of the Specific Relief Act, 1963 (for short “the   Act”),   there   are   certain   grounds   which   bar   the   relief   of specific performance of the contract. This section, insofar it is relevant, is as under: “16.  Personal bars to relief .—Specific performance of   a   contract   cannot   be   enforced   in   favour   of   a person— ( a )­( b ) * ( c )   who   fails   to   aver   and   prove   that   he   has performed or has always been ready and willing to   perform   the   essential   terms   of   the   contract which are to be performed by him, other than terms   the   performance   of   which   has   been prevented or waived by the defendant.” 8.  The Trial Court decreed the suit on 01.06.1994 and granted time   to   the   plaintiff   for   deposit   of   the   balance   consideration 6 within two months from 01.06.1994, i.e. by 31.07.1994.   The plaintiff   offered   no   explanation   whatsoever   for   the   failure   to comply the direction. After expiry of the time granted for deposit, on 02.08.1994 the plaintiff filed an application before the Trial Court that in view of the pendency of the First Appeal preferred by defendants, the time for deposit may be extended as otherwise the   amount   would   lie   in   the   bank   without   interest.   On 02.08.1994 itself, the time for deposit was extended till disposal of the First Appeal. The defendants’ challenge to the ex­parte order was unsuccessful on technical grounds.    9. There   can   be   no   straight   jacket   formula   with   regard   to readiness and willingness. It will have to be construed in the facts and circumstances of each case in the light of all attending facts and circumstances.  We are of the considered opinion, that in the facts and circumstances of the present case, the failure of the   plaintiff   to   offer   any   explanation   why   the   balance consideration   was   not   deposited   within   the   time   granted,   the filing of the application for extension of time after expiry of the prescribed period coupled with the frivolousness of the grounds 7 taken in the application for extension that the money would lie in the   bank   without   earning   interest,   are   all   but   evidence   of incapacity on part of the plaintiff to perform his obligations under the agreement and reflective of lack of readiness and willingness. He preferred to wait and abide by the gamble of a favourable decision in the first appeal.  10. The grant of relief for specific performance under Section 16 (1)(c) of the Act is a discretionary and equitable relief.   Under Section 16 (1)(c), the plaintiff has to demonstrate readiness and willingness   throughout   to   perform   his   obligations   under   the contract.  The plea that the amount would lie   in the bank without interest is unfounded and contrary to normal banking practice. To our mind, this is sufficient evidence of the incapacity or lack of readiness and willingness on part of the plaintiff to perform his obligations. Undoubtedly, the time for deposit could be extended under Section 28 of the Act. But the mere extension of time for deposit   does   not   absolve   the   plaintiff   of   his   obligation   to demonstrate   readiness   and   willingness   coupled   with   special circumstances beyond his control to seek such extension. The 8 plaintiff did not aver in the application that he was ready and willing to perform his obligations and was prevented from any special circumstances from doing so. The pendency of an appeal by the defendant did not preclude the plaintiff from depositing the amount in proof of his readiness and willingness. Readiness has been interpreted as capacity for discharge of obligations with regard to payment.  The High Court has rightly observed that there was no stay by the Appellate Court of the decree under appeal to justify non­deposit during the pendency of the appeal. The grant of extension of time cannot  ipso facto  be construed as otherwise demonstrating readiness and willingness on part of the plaintiff.     The   plaintiff   was   required   to   plead   sufficient, substantial and  cogent grounds  to seek extension  of  time  for deposit because otherwise it becomes a question of his conduct along with all other attendant surrounding circumstances in the facts of the case.  We therefore find no infirmity in the order of the High Court  concluding  that  the  plaintiff  in  the   facts   and circumstances   was   not   ready   and   willing   to   perform   his obligations. 9 11. In   V.S. Palanichamy Chettiar Firm vs. C. Alagappan , : (1999) 4 SCC 702, it was observed as follows “17. The agreement of sale was entered into as far back on 16­2­1980, about 19 years ago. No explanation is forthcoming as to why the balance amount of consideration could not be deposited within the time granted by the Court……Merely because a suit is filed within   the   prescribed   period   of   limitation does   not   absolve   the   vendee­plaintiff   from showing   as   to   whether   he   was   ready   and willing to perform his part of the agreement and if there was non­performance, was that on account of any obstacle put by the vendor or   otherwise.   Provisions   to   grant   specific performance   of   an   agreement   are   quite stringent.   Equitable   considerations   come into   play.   The   court   has   to   see   all   the attendant   circumstances   including   if   the vendee   has   conducted   himself   in   a reasonable   manner   under   the   contract   of sale….. It is not the case of the respondent decree­holders that on account of any fault on the part of the vendor judgment­debtor, the amount could not be deposited as per the   decree……That   apart,   no   explanation whatsoever is coming from the respondent decree­holders as to why they did not pay the   balance   amount   of   consideration….. Equity   demands   that   discretion   be   not exercised in favour of the respondent decree­ holders and no extension of time be granted to them to comply with the decree.” 12.  In our opinion, had the plaintiff deposited the amount after expiry of the time but during the pendency of the appeal, as held 10 in  Ramankutty Guptan vs. Avara,  (1994) 2 SCC 642, entirely different considerations may have arisen. The judgement in any event is based on its own peculiar facts and circumstances.   13. In    Umabai and Another vs. Nilkanth Dhondiba Chavan (Dead) by Lrs. and Another,   (2005) 6 SCC 243, it has been observed as follows : “30. It is now well settled that the conduct of the parties, with a view to arrive at a finding as to   whether   the   plaintiff­defendants   were   all along and still are ready and willing to perform their   part   of   contract   as   is   mandatorily required   under   Section   16(c)   of   the   Specific Relief Act must be determined having regard to the   entire   attending   circumstances.     A   bare averment in the plaint or a statement made in the   examination­in­chief   would   not   suffice. The conduct of the plaintiff­defendants must be judged having regard to the entirety of the pleadings   as   also   the   evidence   brought   on records.” 14. According to normal human prudence, land price escalates over time. Unless it be a situation of a distress sale, no land owner will sell his land for a lesser price than what may have been   recorded   in   an   agreement   for   sale.     The   fact   that   the defendants   nos.1   and   2   subsequently   sold   the   land   on 16.01.1991 to defendants nos.4 to 7 at a lesser price, due to 11 personal necessity, also mitigates against the plea of the plaintiff that   he   was   ready   and   willing   to   perform   his   part   of   the obligations under the contract. 15. There can be no quarrel with the well settled proposition of law that in a second appeal, the High Court ought not to enter into reappreciation of evidence to arrive at new findings, except on pure questions of law. But if the findings are perverse, based on   complete   misappreciation   or   erroneous   consideration   of evidence,   and   the   failure   to   consider   relevant   evidence,   it becomes a question of law. In   Dilbagrai Punjabi vs. Sharad it Chandra,  1988 Supp SCC 710,  was observed as follows: “5…..The High Court was right in pointing out that the courts below had seriously erred in not   considering   the   entire   evidence   on   the record including the aforesaid documents. It is true   that   the   High   Court   while   hearing   the appeal under Section 100 of the Code of Civil Procedure has no jurisdiction to reappraise the evidence  and  reverse  the  conclusion reached by the first appellate court, but at the same time   its   power   to   interfere   with   the   finding cannot be denied if when the lower appellate court   decides   an   issue   of   fact   a   substantial question of law arises. The court is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue   and   the   error   which   arises   is   of   a 12 magnitude that it gives birth to a substantial question   of   law,   the   High   Court   is   fully authorised to set aside the finding….” 16. In view of the discussion, we arrive at the conclusion that the plaintiff failed to prove readiness and willingness to perform its   obligations   under   the   agreement   for   sale.     We   are   of   the considered opinion that there is no merit in the present appeal. However, in the peculiar facts and circumstances of the case, we are of the considered opinion that the respondent is not entitled to   retain   the   earnest   money   and   it   shall   be   refunded   to   the appellant without interest within a period of one month failing which it shall carry interest at the rate of 7 per cent. 17. The appeal is dismissed. There shall be no order as to costs. …………...................J. [NAVIN SINHA] …………...................J. [INDIRA BANERJEE] NEW DELHI OCTOBER 04, 2019 13