Full Judgment Text
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CASE NO.:
Appeal (civil) 2583 of 2005
PETITIONER:
Umabai & Anr.
RESPONDENT:
Nilkanth Dhondiba Chavan (Dead) by Lrs. & Anr.
DATE OF JUDGMENT: 13/04/2005
BENCH:
H.K. Sema & S.B. Sinha
JUDGMENT:
J U D G M E N T
[Arising out of S.L.P. (Civil) No. 23864 of 2004]
S.B. SINHA, J :
Leave granted.
This appeal is directed against a judgment and order dated 3.9.2004
passed by the Bombay High Court in Letters Patent Appeal No.102 of 1990
whereby and whereunder the Appeal preferred against a judgment and order
dated 30.1.1990 passed by a learned Single Judge of the said Court in First
Appeal No.120 of 1984 affirming the judgment and decree dated 5.9.1983
passed by the Civil Judge, Sr. Division, Kolhapur in Special Suit No. 1 of
1979; was allowed.
The basic fact of the matter is not in dispute. The suit premises
measure about 346 sq. yds. of land. Structures consisting of ground and
first floor were built thereupon. The Appellant No.2 was a tenant in the
ground floor of the said building.
A decree at the instance of his creditor was said to have been passed
against the plaintiff-Respondents herein. The First Respondent with a view
to repay the said loan entered into an agreement of sale with the Appellants
on or about 30.12.1970. In terms of the said agreement, the plaintiff-
Respondents agreed to sell the said property for a consideration of
Rs.45,000/-, out of which a sum of Rs.3,434/- was paid by way of earnest
money and the rest being sum of Rs. 40,076/- was to be disbursed to the
creditors. Pursuant to or in furtherance of the said agreement, the plaintiff-
Respondents executed a deed of sale in favour of the First Appellant herein.
An agreement of sale was also entered into by and between the parties on the
same day, in terms whereof the First Appellant agreed to reconvey the said
property in favour of the First Respondent on receipt of the said sum of
Rs.45,000/- between a period of seven years and nine years from the said
date. The Respondents treating the said transaction to be one of mortgage
filed an application purported to be under Sections 4(e) and 7(f) before the
competent authority under the Maharashtra Debt Relief Act, inter alia, for a
declaration that he is a ’debtor’ thereunder and his debt should be
discharged. While the said application was pending, a notice was sent by the
plaintiff-Respondents to the Appellants herein wherein the aforementioned
transaction was said to be a mortgage. A plea was raised therein that the
said debt stood discharged under the provisions of the Maharashtra Debt
Relief Act. It was contended that the First Appellant herein had already
received more than Rs.50,000/- out of the income from the said property by
way of rent. Despite the same, the Appellants asked for specific
performance of the said agreement of re-conveyance. In her reply, the First
Appellant offered to reconvey the property on receipt of a further sum of
Rs.4,646/-, which allegedly was spent by her towards repairs of the house.
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Thereafter, the suit was filed by the Respondents herein in the Court of
Civil Judge, Senior Division at Kolhapur on 30.12.1978 which was marked
as Civil Suit No.1 of 1979. The Respondents in their plaint raised a plea that
the value of the suit property was about Rs.2 lacs but despite the same with a
view to discharge their dues they requested the Appellants to advance a loan
of Rs.50,000/- and to which the Appellants agreed for a sum of Rs.45,000/-;
whereupon the suit property was agreed to be mortgaged. It was further
contended that as the Appellants did not possess a money lenders’ licence
and the period of repayment was large, the parties agreed that the
Respondents would execute a deed of mortgage by way of conditional sale;
but the said document was termed as a deed of sale wherein a clause of re-
conveyance was to be incorporated. However, such condition having
mistakenly been not mentioned in the deed of sale and which having been
noticed, the First Appellant entered into an agreement of re-conveyance of
the suit property in the name of the Respondents on the same day. Both the
deeds were said to be part of the same transaction and in fact, it was
categorically averred that the "sale deed transaction" is a "mortgage
transaction". As regard readiness and willingness on the part of the
Respondents, it was averred in the plaint:
"Accordingly to the conditions in the agreement
Plaintiff was and is ready to pay the amount to defendant.
And also the Plaintiff is and was ready to bear the cost of
reconveyance deed. According to the agreement Plaintiff
is and was ready to prepare the reconveyance deed\005"
In the said suit, the plaintiff-Respondents prayed for the following
reliefs :
"(a) The defendant no.1 be ordered to prepare the sale
deed of the suit property and get it registered as per
the agreement. The Plaintiff will pay the amount
when the order is passed.
(b) The sale deed be prepared in the plaintiff’s name
through the Honourable Court if the defendant
no.1 denies the same.
(c) According to the mortgage document at sr. no.7
dated 2.11.1971, the suit property be mortgaged
Relief and be given in the possession of the
Plaintiff.
(d) The declaration be passed under the provision of
Mumbai Debt Relief Act that the Plaintiff has been
debt released and the possession of the debt
released suit property be given to the plaintiff.
(e) If not done as mentioned above, then the
accounting of mortgage be done and whatever
amount remains be given to the Plaintiff or else
Plaintiff be ordered to pay the amount to defendant
no.1 and the reconveyance deed for the mortgage
relief be made in the name of the plaintiff by the
defendant on denial it should be done through the
court and possession of suit property be given to
the plaintiff.
(f) The Plaintiff be allowed to amend or alter the
plaint, if necessary."
The Appellants, however, in their written statement denied and
disputed the contentions raised in the Plaint. It was averred that the
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transaction was for a sale with an agreement of reconveyance. The
Appellants denied and disputed that the First Respondent was ’ready to act
as per the agreement’. It was contended that he never offered any amount to
the Appellants. It was further contended :
"\005But plaintiff did not take any steps to reconvey the
sale deed as per the notice of the plaintiff. But the
plaintiff did nothing. So the Plaintiff has committed a
breach of agreement and on that count suit may kindly be
dismissed. On the contrary Plaintiff had taken a stand
that the suit transaction is mortgaged and from rent
received the amount has been satisfied such a wrong and
false stand was taken by the Plaintiff. Also before the
Tahsildar proceeding was initiated saying that the
property is redeemed (Property is released from the debt)
from the total behaviour of plaintiff it cannot be said that
Plaintiff was ready to fulfill the terms of agreement."
The Trial Court dismissed the said suit holding (i) the suit property
was not undervalued; (ii) consideration of Rs.45,000/- mentioned in the
document was not inadequate; (iii) the transaction was one of sale and not of
mortgage; (iv) the suit property was not self-redeemed under the
Maharashtra Debt Relief Act; (v) the plaintiffs were not ready and willing to
perform their part of contract; and (vi) the defendants had spent a sum of
Rs.4,646/- over the repairs of the suit property.
Before the High Court, the First Respondent herein gave up the plea
that he was a debtor in terms of the Maharashtra Debt Relief Act. The
learned Single Judge of the High Court while holding that the transaction
was that of sale and not mortgage proceeded also to consider as to whether
the transaction was a mortgage or not. As regard the plea of purported
readiness and willingness on the part of the Respondents, it was opined :
"\005It will not be open to the plaintiff to put his own
construction on the terms but he would be bound by the
terms as determined by the Court. It will not be open to
the plaintiff to vary the terms according to his
interpretation and yet claim specific performance. In the
present case the plaintiffs set up a plea under the
Maharashtra Debt Relief Act. In other words, the
plaintiffs sought to contend that their debt under the suit
transaction was discharged under the Maharashtra Debt
Relief Act. They were, therefore, not liable to pay and
yet claim reconveyance. This is not the conduct of a
party who is expected to perform his part of the terms
and conditions of the contract of repayment of
Rs.45,000/-. The first plaintiff had applied under the
aforesaid Act to the Mamlatdar for a declaration that he
was a debtor and that the debt had been discharged. He
had engaged an Advocate in those proceedings. When
the present suit was filed, the plea about the aforesaid
proceedings was set up in the forefront and a conditional
offer to pay was made subject to the result of those
proceedings. In the alternative, the plaintiffs set up a
case of a mortgage which case I have found as not proved
both on facts as also in law. The plaintiffs averred that
the entire mortgage debt had been paid up from out of the
income of the property. They offered to pay if any
amount was found due on taking accounts. In my
judgment, the aforesaid rival pleas set up by the plaintiffs
disentitle them to a decree for specific performance. By
setting up these rival pleas they have exhibited their
unwillingness to make an unconditional offer to pay
which was a pre-requisite condition in the agreement of
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reconveyance where it was provided that, if after the
period of 7 years and within the period of 9 years, the
plaintiff paid the amount of Rs.45,000/- along with
incidental charges of the sale deed, the defendants would
reconvey the property\005"
The Division Bench of the High Court, however, by reason of the
impugned judgment reversed the said findings holding that although
evidences were led to show that the amount of Rs.45,000/- paid by the
Appellants to the Respondents was a loan but having regard to Section 58(c)
of the Transfer of Property Act, the document could not be construed to be a
deed of mortgage.
The Division Bench differed from the learned Single Judge and the
learned Trial Judge on their finding as regard valuation of the property
holding that the Respondents had proved that the sale-deed was under-
valued, observing :
"\005From the fact that the agreement for reconveyance
provided for the payment of Rs.45,000/- after 7 years and
before nine years by itself would indicate that the
transaction was much more than a mere deed of
conveyance. No interest was provided for. It is in these
circumstances that the court must consider whether the
discretion should be exercised in favour of the Plaintiff."
As regard readiness and willingness on the part of the Respondents to
perform their part of contract in terms of the said agreement of reconveyance
dated 1.1.1971, the Division Bench came to the conclusion that the plaintiff-
Respondents had pleaded and proved the said fact.
Mr. Ajit S. Bhasme, learned counsel appearing on behalf of the
Appellants, in support of the appeal would urge that the Division Bench of
the High Court clearly erred in holding that the Respondents were ready and
willing to perform their part of contract. According to the learned counsel,
the plea taken by the Respondents that the amount of debt stood satisfied
from the income therefrom by way of rent and, thus, the debt stood
discharged was wholly inconsistent with a plea of readiness and willingness.
Totality of circumstances, the learned counsel would contend, vis-‘-vis the
conduct of the parties would be relevant for determining as to whether the
plaintiff-Respondents have been able to satisfy the court as regard
fulfillment of the conditions laid down under Section 16(c) of the Special
Relief Act, 1963.
Mr. Bhasme would submit that a manifest error had been committed
by the Division Bench of the High Court in arriving at the finding that the
plaintiff-Respondents pleaded and proved that they had all along been ready
and willing to perform their part of contract; without taking into
consideration that they initiated proceedings before the competent authority
under the Maharashtra Debt Relief Act and raised insufficient plea in that
behalf in the notice dated 9.6.1978 and furthermore made clear averments in
the plaint that they were debtors and their debt stood discharged.
The learned counsel would contend that from a perusal of the plaint, it
would appear that the plaintiffs made a conditional offer which does not
satisfy the requirement of Section 16(c) of the Specific Relief Act. In
support of the said contention, the learned counsel would relied upon Prem
Raj vs. D.L.F. Housing & Construction Pvt. Ltd. & Another [(1968) 3 SCR
648], Mahabir Prasad Jain vs. Ganga Singh [(1999) 8 SCC 274], Pushparani
S. Sundaram and Others vs. Pauline Manomani James (Deceased) and
Others ([(2002) 9 SCC 582], Manjunath Anandappa Urf Shivappa Hanasi
vs. Tammanasa and Others [(2003) 10 SCC 390] and Pukhraj D. Jain and
Others vs. G. Gopalakrishna [(2004) 7 SCC 251].
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Mr. Bhasme would submit that the Division Bench had wrongly
interfered with the concurrent findings of fact arrived at by the two courts.
Mr. A.V. Sawant, the learned Senior Counsel appearing on behalf of
the Respondents, on the other hand, would contend that there is no limitation
as regard exercise of jurisdiction by a Division Bench of the High Court
while entertaining a Letters Patent Appeal as in such an appeal, the Court is
entitled to consider the questions of both fact and law. Reliance, in this
behalf, has been placed on Smt. Asha Devi vs. Dukhi Sao and Another
[(1974) 2 SCC 492].
Mr. Sawant would submit that the plea that a transaction is a mortgage
vis-‘-vis an ostensible sale cannot be said to be fraudulent nor dishonest
which would debar the court from granting an equitable relief for specific
performance of contract.
The learned counsel would argue that the Trial Judge as also the
learned Single Judge of the High Court overlooked the pleadings of
Respondents in the plaint as also the evidence adduced in this behalf as
regard readiness and willingness on their part of contract and, thus, the
Division Bench of the High Court cannot be said to have committed any
error in interfering therewith. Readiness and willingness to perform one’s
part of contract must be judged, Mr. Sawant would submit, upon taking into
consideration all the attending circumstances as also the conduct of both the
parties and, therefore, it is not necessary to deposit the amount in court or to
be possessed of the requisite amount at all times. Strong reliance, in this
behalf, has been placed on The Bank of India Ltd. and Others vs. Jamsetji
A.H. Chinoy and Messrs. Chinoy and Co. [AIR (37) 1950 PC 90], Nathulal
vs. Phoolchand [(1969) 3 SCC 120], Smt. Indira Kaur and Others vs. Sheo
Lal Kapoor [(1988) 2 SCC 488], Tamboli Ramanlal Motilal (Dead) by Lrs.
vs. Ghanchi Chimanlal Keshavlal (Dead) by Lrs. And Another [(1993) Supp.
(1) SCC 295]; and Mushir Mohammed Khan (Dead) by Lrs. Vs. Sajeda
Bano (Smt.) and Others [(2000) 3 SCC 536].
It may be true that level of a document is not decisive. A true nature
of transaction must be determined having regard to the intention of the
parties as well as the circumstances attributing thereto as also the wordings
used in the document in question.
In this case, admittedly, two documents were executed on the same
day. In view of the express provisions contained in Section 58(c) of the
Transfer of Property Act, indisputably the transaction in question was not a
mortgage by way of conditional sale.
There exists a distinction between mortgage by conditional sale and a
sale with a condition of repurchase. In a mortgage, the debt subsists and a
right to redeem remains with the debtor; but a sale with a condition of
repurchase is not a lending and borrowing arrangement. There does not
exist any debt and no right to redeem is reserved thereby. An agreement to
sell confers merely a personal right which can be enforced strictly according
to the terms of the deed and at the time agreed upon. Proviso appended to
Section 58(c), however, states that if the condition for re-transfer is not
embodied in the document which effects or purports to effect a sale, the
transaction will not be regarded as a mortgage. [See Pandit Chunchun Jha
vs. Sheikh Ebadat Ali and Another (1955) 1 SCR 174, Shri Bhaskar
Waman Joshi and Others vs. Shri Narayan Rambilas Agarwal (deceased)
and Others (1960) 2 SCR 117], K. Simrathmull vs. Nanjalingiah Gowder,
AIR 1963 SC 1182; Mushir Mohammed Khan (supra); and Tamboli
Ramanlal Motilal (supra)],
The plaintiff in a suit for specific performance of contract may raise
an alternative plea that the transaction is a mortgage by way of conditional
sale but he must be ready and willing either to repay the debt or pay the
amount of consideration as agreed upon. In the instant case, the First
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Respondent herein, however, raised a specific plea that he was a debtor and
that the deed of mortgage was executed only because the Appellants were
not licensed money lenders. He not only approached the competent
authority under the Maharashtra Debt Relief Act for a declaration that he
was a debtor and stood discharged from his debt, but also in the plaint he
sought for a decree for possesion of the suit land on the premise that the
provisions of the Maharashtra Debt Relief Act were attracted. He even
asked for a decree of accounting.
It may be true that the plaintiff had made alternative prayers of
specific performance of the agreement of reconveyance and redemption of
mortgage but it appears that the plaints starts with the description of the
mortgage property.
In the plaint, the plaintiffs averred :
"2\005The sale deed and the agreement are two documents
of the same transaction. They are written in same
meeting and registered on same day. Sale deed
transaction is a mortgage transaction\005\005"
"3. The Plaintiff as agreed wrote a sale deed in the name
of defendant no.1 on 1.1.1971 as a security to the loan\005"
After reciting the relevant stipulations contained in the registered
deed of agreement of sale to the effect that the First Appellant would
reconvey the suit property in his name and got a document registered, it was
averred :
"Accordingly to the conditions in the agreement Plaintiff
was and is ready to pay the amount to defendant. And
also the Plaintiff is and was ready to bear the cost of
reconveyance deed. According to the agreement Plaintiff
is and was ready to prepare the reconveyance deed\005"
However, from paragraph 6 onwards, a plea as regard creation of a
mortgage was raised specifically contending :
"(7). Plaintiff is a debtor under Mumbai Debt
Relief Act. According to the Plaintiff the mortgage
amount in the said document has been shunked.
Therefore Plaintiff prays that accordingly it be decided.
(8) If not decided as above then the accounting
of the mortgage property shall be done under the
provisions of Mumbai Money Lending Act. The
defendant has earned a large amount by giving the
mortgage property on rental basis. After the accounting
whatever amount remains for paying or taking
accordingly the Plaintiff is ready to give and take."
It was further averred :
"The Plaintiff prays that if it is not done as
mentioned above then the amount of Rs.45,000/- which
the Plaintiff is ready to pay to the defendants be given to
the defendant and the Plaintiff be given the possession of
mortgage relief suit property with necessary documents."
Reading the plaint as a whole, it becomes evident that the First
Respondent principally raised a contention that the transaction was of
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mortgage and the sale stood redeemed and he was discharged from the debt.
He moreover prayed for a decree for accounting, but contended that only in
the event, such prayer is not granted, he was ready to pay the defendants the
said sum of Rs.45,000/- The averments made in the pleadings must be
construed reasonably and so read the statement made as regard purported
readiness and willingness to pay the stipulated amount to the defendants
according to the conditions mentioned in the agreement cannot be read in
isolation.
In his examination-in-chief although he stated :
"\005I am and I was ready to pay the consideration as per
the agreement. I am ready to pay the consideration
amount of Rs.45,000/-. I was also ready to pay the said
sum. I am also ready to pay the costs of the registration
of the sale deed".
but in his cross-examination, he admitted :
"I am not doing any business or work, since last 10
years. I have no source of income. I have no bank
account. I am not to receive any amounts from any one.
I have no amount with me. I am money less since last 10
years. At the time of giving notice (9.6.1978) I have no
my own accounts. It is not true to say that I was never
ready and willing to pay the sums of the defendants, for
the reconveyance of the suit house."
The learned trial Judge further noticed the following statement of te
plaintiffs in paragraph 18 of the cross-examination :
"It is my prayer in the suit that the suit property is
to redeemed without any amount being given, as the said
sum is already satisfied out of the income of rent,
received by the Defendant. It is also my prayer that
account of dues be taken and if necessary, I would pay if
any dues remained unsatisfied. It is also my say that the
suit transaction is of mortgage nature."
(Emphasis supplied)
It is now well-settled that the conduct of the parties, with a view to
arrive at a finding as to whether the plaintiff-Respondents 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 examination-in-chief would not suffice.
The conduct of the plaintiff-Respondents must be judged having regard to
the entirety of the pleadings as also the evidences brought on records.
In terms of Form Nos. 47 and 48 appended to Appendix A of the
Code of Civil Procedure, ’the plaintiff must plead that he has been and still
is ready and willing specifically to perform the agreement on his part of
which the defendant has had notice’ or ’the plaintiff is still ready and willing
to pay the purchase-money of the said property to the defendant’. The offer
of the plaintiff in the instant case is a conditional one and, thus, does not
fulfill the requirements of law.
In Bank of India (supra), it was held :
"\005It is true that plaintiff 1 stated that he was buying for
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himself, that he had not sufficient ready money to meet
the price and that no definite arrangements had been
made for finding it at the time of repudiation. But in
order to prove himself ready and willing a purchaser has
not necessarily to produce the money or to vouch a
concluded scheme for financing the transaction. The
question is one of fact and in the present case the
appellate Court had ample material on which to found the
view it reached\005"
The said decision was, thus, rendered on its own fact. Such a
conclusion was arrived at having regard to the fact that ample material had
been brought on records. There must, thus, be some evidence to show that
the plaintiff could arrange for the amount stipulated for payment to the
vendor as and when called upon to do so. In this case no such evidence was
disclosed.
In Nathulal (supra), the contract was required to be performed in
certain sequence. Therein it was found that certain arrangements had been
made by the Respondent therein for paying the amount due. It was held that
so long as Nathulal did not carry out his part of contract, Phoolchand could
not be called upon to pay the balance of the price and it was in that situation
held that latter at all relevant time was ready to perform his part of contract.
The said decision also has no application in the instant case.
In Smt. Indira Kaur (supra), this Court merely held that for
determining the question as regard readiness and willingness on the part of
the plaintiff to perform his part of contract, the Court must examine the
position of both the parties. This Court did not say, as was submitted by
Mr. Sawant, that the conduct of both the parties must be taken into
consideration. In that case, the defendant’s contention that he had not
received the notice of the plaintiff was held to be incorrect, as despite his
alleged receipt of notice, he admitted to have visited the Sub-Registrar’s
office on 16.8.1977. In that situation it was held that the defendant was not
ready and willing to perform his part of contract. It was held that as of fact
that the plaintiff had done what he could do. He went to the Sub-Registrar’s
Office, he filed an application for recording his presence. The said decision,
therefore, has no application in the instant case.
On the other hand in Mahabir Prasad Jain (supra), it has been held :
"22. The way in which the respondent has been
instituting different proceedings in different fora within a
short time making inconsistent allegations shows that the
respondent has been abusing the process of court and not
come to court with clean hands. He is not entitled to get
any equitable relief under the Specific Relief Act."
In Pushparani S. Sundaram (supra), it was opined :
"\005Inference of readiness and willingness could be
drawn by the conduct of the plaintiff, the circumstances
in a particular case in other words to be gathered from the
totality of circumstances."
It was further held
"\005So far these being a plea that they were ready and
willing to perform their part of the contract is there in the
pleading, we have no hesitation to conclude, that this by
itself is not sufficient to hold that the appellants were
ready and willing in terms of Section 16(c) of the
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Specific Relief Act. This requires not only such plea but
also proof of the same. Now examining the first of the
two circumstances, how could mere filing of this suit,
after exemption was granted be a circumstance about
willingness or readiness of the plaintiff. This at the most
could be the desire of the plaintiff to have this property.
It may be for such a desire this suit was filed raising such
a plea. But Section 16(c) of the said Act makes it clear
that mere plea is not sufficient, it has to be proved."
In N.P. Thirugnanam (Dead) by Lrs. vs. Dr. R. Jagan Mohan Rao and
Others [(1995) 5 SCC 115], this Court held :
"\005The continuous readiness and willingness on the part
of the plaintiff is a condition precedent to grant the 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 must take
into consideration the conduct of the plaintiff prior and
subsequent to the filing of the suit along with other
attending circumstances. The amount of consideration
which he has to pay to the defendant must of necessity be
proved to be available..."
Yet again in Manjunath Anandappa (supra), this Court held :
"27. The decisions of this Court, therefore, leave no
manner of doubt that a plaintiff in a suit for specific
performance of contract not only must raise a plea that he
had all along been and even on the date of filing of suit
was ready and willing to perform his part of contract, but
also prove the same. Only in certain exceptional situation
where although in letter and spirit, the exact words had
not been used but readiness and willingness can be culled
out from reading all the averments made by the plaintiff
as a whole coupled with the materials brought on record
at the trial of the suit, to the said effect, the statutory
requirement of Section 16(c) of the Specific Relief Act
may be held to have been complied with."
In Pukhraj D. Jain (supra), it was held :
"6. Section 16(c) of the Specific Relief Act lays
down that specific performance of a contract cannot be
enforced in favour of a person 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. Explanation (ii) to this sub-section
provides that the plaintiff must aver performance of, or
readiness and willingness to perform, the contract
according to its true construction. The requirement of this
provision is that the plaintiff must aver that he has always
been ready and willing to perform the essential terms of
the contract. Therefore, not only should there be such an
averment in the plaint but the surrounding circumstances
must also indicate that the readiness and willingness
continue from the date of the contract till the hearing of
the suit. It is well settled that equitable remedy of specific
performance cannot be had on the basis of pleadings
which do not contain averments of readiness and
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willingness of the plaintiff to perform his contract in
terms of Forms 47 and 48 CPC. Here Respondent 1
himself sent a legal notice rescinding the contract and
thereafter filed OS No. 801 of 1977 on 7-11-1977
claiming refund of the advance paid by him. In fact the
suit for recovery of the amount was decreed by the trial
court on 24-7-1985 but he himself preferred a revision
against the decree wherein an order of rejection of the
plaint was passed by the High Court. In such
circumstances, it is absolutely apparent that Respondent
1 was not ready and willing to perform his part of the
contract and in view of the mandate of Section 16 of the
Specific Relief Act, no decree for specific performance
could be passed in his favour. The trial court, therefore,
rightly held that the suit filed by Respondent 1 was not
maintainable."
Furthermore, the First Respondents had raised inconsistent plea in the
sense that he had categorically taken a standing that the debt stood
discharged. Such a plea was irreconcilable with the plea that he had all
along been ready and willing to perform his part of contract. It is in that
situation, the decision of this Court in Prem Raj (supra) is attracted wherein
it was held that although inconsistent reliefs by a party to the suit is
maintainable but it must be shown that each of such pleas is maintainable.
The plea of automatic redemption of mortgage and discharge from
debt raised on the part of the Respondents herein cannot stand with a plea of
readiness and willingness on his part to perform their part of contract.
The Division Bench of the High Court, thus, posed a wrong question
unto itself. It also failed to take into consideration the statement of the
plaintiff in his cross-examination and in particular paragraphs 12 and 19
thereof in their proper perspective. The statements made by the plaintiff
before the court, if read as a whole would clearly show that he was neither in
a position to raise any fund. He proceeded on the basis that he was not
required to pay any amount. The Division Bench furthermore misdirected
itself in holding :
"The test would be whether the Plaintiff was in a
position to pay the money on direction by the court and
not whether he had the money. No such question was
ever put to him to suggest that if he was called upon by
the Court to deposit the money, he had no means to
deposit the money or make it available for deposit.
It was for the plaintiff to prove his readiness and willingness to pay
the stipulated amount and it was not for the Appellants to raise such
question. The Division Bench furthermore considered irrelevant facts in
holding that the plaintiff deposited the amount of Rs.60,000/- in the Court of
Appeal to arrive at the conclusion that the plaintiff-Appellant was ready and
willing to perform his part of contract. Deposit of any amount in court at the
appellate stage by the plaintiffs by itself would not establish their readiness
and willingness to perform their part of the contract within the meaning of
Section 16(c) of the Specific Relief Act. It further erred in holding that the
mere fact that he did not have money at the time of issuance of the notice,
the day when plaint was filed or at the time of his evidence was of no
consequence in total disregard of statutory mandate contained in Section
16(c) of the Specific Relief Act. Similarly, the finding of the Division
Bench that the prayer for grant of specific performance of contract and in
the alternative for redemption of mortgage or cancellation of debt cannot be
said to be pleas which could not be raised or be a bar for the court to
consider to grant the relief of specific performance, cannot be accepted, as
pleas of specific performance of contract and cancellation of debt and/or a
decree for accounting are inconsistent.
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As regard the question as to whether the transaction was undervalued,
the Appellate Court committed a manifest error in taking into consideration
the fact that payment of Rs.45,000/- was to be made after 7 years and before
9 years without any interest is a circumstance to hold that discretion should
be exercised in favour of the plaintiff-Respondents.
In Sargunam (Dead) by Lr. Vs. Chidambram and Another [(2005) 1
SCC 162], this Court observed :
"In the case of Mademsetty Satyanarayana v. G.
Yelloji Rao, it has been held that the jurisdiction to
decree specific performance is discretionary and the court
is not bound to grant such relief merely because it is
lawful to do so; that in cases where one of the three
circumstances mentioned in Section 20(2) is established,
no question of discretion arises\005"
[See also M.V. Shankar Bhat and Another vs. Claude Pinto since
(Deceased) by Lrs. And Others. \026 (2003) 4 SCC 86].
It is furthermore trite that normally a court of appeal would not
interfere with a concurrent finding of fact which is based on appreciation of
oral evidence.
In Bank of India (supra) whereupon Mr. Sawant placed reliance, the
Privy Council held :
"Their Lordships are not unmindful of the great
weight to be attached to the findings of fact of a Judge of
first instance who sees and hears the witnesses and is in a
position to assess their credibility from his own
observation. For this reason they would be reluctant to
differ from the learned Judge in this instance if his
conclusion on the issue under consideration had turned
on the impression made by Jamsetji in the witness-
box\005."
Yet in Manjunath Anandappa (supra), it was held :
"It is now also well settled that a court of appeal
should not ordinarily interfere with the discretion
exercised by the courts below."
The question also came up for consideration in Collector of Customs,
Bombay vs. Swastic Woollens (P) Ltd. and Others [(1988) Supp. SCC 796]
"\005An appeal has been provided to this Court to oversee
that the subordinate tribunals act within the law. Merely
because another view might be possible by a competent
court of law is no ground for interference under Section
130-E of the Act though in relation to the rate of duty of
customs or to the value of the goods for purposes of
assessment, the amplitude of appeal is unlimited. But
because the jurisdiction is unlimited, there is inherent
limitation imposed in such appeals. The Tribunal has not
deviated from the path of correct principle and has
considered all the relevant factors. If the Tribunal has
acted bona fide with the natural justice by a speaking
order, in our opinion, even if superior court feels that
another view is possible, that is no ground for
substitution of that view in exercise of power under
clause (b) of Section 130-E of the Act."
[See also West Bengal Electricity Regulatory Commission vs. CESC
Ltd. (2002) 8 SCC 715 and Commissioner of Customs, Chennai vs. Adani
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Exports Ltd. and another (2004) 4 SCC 367]
It may be, as has been held in Asha Devi (supra) that the power of the
Appellate Court in intra court appeal is not exactly the same as contained in
Section 100 of the Code of Civil Procedure but it is also well-known that
entertainment of a Letters Patent Appeal is discretionary and normally the
Division Bench would not, unless there exist cogent reasons, differ from a
finding of fact arrived at by the learned Single Judge. Even as noticed
hereinbefore, a court of first appeal which is the final court of appeal on fact
may have to exercise some amount of restraint.
For the reasons aforementioned, the impugned judgment cannot be
sustained which is set aside accordingly. The appeal is allowed. In the facts
and circumstances of the case, however, there shall be no order as to costs.