JUDGMENT
1. This appeal is directed against the judgment and decree in O. S. No. 58 of 1983 dated 23-3-1990 (or 28-3-1990 …… Ed.) on the file of the I Additional ‘Subordinate Judge, Kakinada. Appellant is the defendant and the r espondent is the
plaintiff in the said suit. For the purpose of convenience, the parties are arrayed as plaintiff and defendant.
2. Plaintiff– Meesala Kota Muvullayya instituted a suit for specific performance of agreement of sale dated 16-5-1979 directing the defendant to execute a registered sale deed in respect of plaint schedule property and put the plaintiff in vacant possession or in the alternative to pass a decree for an amount of Rs. 37,000/- with interest at 24% per annum and for costs.
3. The case of the plaintiff before the trial Court is that he entered into an agreement of sale on 16-5-1979 in respect of the plaint schedule property with the defendant who agreed to sell the same for a total consideration of Rs. 2,66,000/-. Under the terms of agreement, the defendant received advance amount of Rs. 10,000/- on the date of agreement i.e., on 16-5-1979 and another amount of Rs. 10,000/- subsequently. It is agreed under the sale agreement that the sale deed was to be executed within six months from the date of agreement. The balance of sale consideration of Rs. 2,46,000/- shall be paid to the defendant by the plaintiff on the date of registration before the Registrar, on receiving the said amount, the defendant shall get the tenants evicted from the schedule premises and put the plaintiff in vacant possession on the same day on which date registration shall take place.
4. Plaintiff alleged that the defendant did not take steps to get the tenants evicted and has been postponing the execution of the sale deed as a result of not able to evict the tenants from the subject-matter of the suit property which is occupied by tenants. Though time was made the essence of the contract, the defendant did not stick to his promise while getting the tenants evicted and failed to execute the sale deed within the period stipulated in the agreement. But however, the defendant received further sale consideration and extended time for execution of the sale deed from time to time either by way of endorsement on the agreement of sale or executing letters. The latest letter executed by the defendant was 31-3-1982 wherein the
defendant undertook to get the tenants evicted as early as possible and as soon as the eviction takes place, he will inform the plaintiff and execute the sale deed within a month from the date of eviction of the tenants by the defendant. Plaintiff alleged that the defendant could not keep up his promise as a result of which the execution of sale deed in favour of the plaintiff was delayed beyond the stipulated period and, therefore, he got issued a legal notice on 3-12-1982 to the defendant calling upon him to execute the sale deed in terms of the sale agreement within three days from the date of receipt of the said notice. Though the defendant received the notice on 11-12-1982, he failed to respond to the same. On the contrary, the defendant got separate notice issued to the plaintiff informing that the agreement is a voidable contract and he is avoiding the contract on account of the tenants not vacating the premises. Thus, the plaintiff instituted the suit in O.S. No. 58/83 for specific performance and alternatively for the purpose of decree for an amount of Rs. 37,000/- with interest.
5. The defendant filed a written statement admitting the sale agreement dated 16-5-1979 and also admitted the fact of receiving Rs. 10,000/- on the date of agreement. He also admitted the fact of receiving another sum of Rs. 10,000/- as indicated in the agreement thereafter. The defendant took a stand that the agreement entered into with the plaintiff for the sale of the suit schedule property is to discharge his pressing debts which he obtained for family necessities. The defendant admitted the fact of agreeing to sell the suit property at the rate of Rs. 95/- per square yard which is slated to be about 2800 square yards but the exact amount could be on the basis of actual measurements and the value would be at the rate of Rs. 95/- per square yard. The defendant also admitted the fact of the understanding with the plaintiff that the balance sale consideration of Rs. 2.46,000/- shall be paid by the plaintiff within a period of six months and inform the defendant that he is ready with the money and after such intimation the defendant shall execute one or more sale deeds in favour of the plaintiff or his nominee and get them
registered on payment of sale consideration of Rs. 2,46,000/- before the Registrar. The defendant stated before the trial Court that the suit schedule property is in occupation of the tenants by the date of agreement and it was agreed that the tenants would be evicted within the stipulated period of six months and vacant possession would be delivered to the plaintiff at the time of registering the sale deed. It is also specifically agreed between the parties that if the defendant fails to get the tenants evicted within six months’ time, the defendant shall refund the amount of Rs. 10,000/- paid on the date of agreement and another sum of Rs. 10,000;- agreed to be paid by the plaintiff by 30-5-1979 and that the agreement would stand cancelled.
6. It was reiterated by the defendant that time was expressly made essence of the contract. The plaintiff desired to purchase the property only if he was given vacant possession after eviction of the tenants within six months. The defendant also contended that both the parties were aware that the eviction of the tenants could only be tried by requesting and persuading them. In spite of sincere efforts made by the defendant, the defendant could not evict any of the tenants within six months’ time. It was stated by the defendant that only one tenant Yendamuri Nukaraju vacated the premises in the month of February, 1980. Against another tenant Bongarala Subrahmanyam, eviction petition has been instituted. The defendant contended that except requesting the other tenants to vacate the premises, he could not do anything more and these factors were known to the plaintiff. When six months’ period was about to be lapsed, the tenants could not be evicted by that time, the plaintiff desired to extend the period upto 10-2-1980 and requested the defendant to extend time upto 10-2-1980 on the same condition which was incorporated in the agreement of sale. Defendant says both the parties endorsed on the agreement on 30-10-1979 to that effect. Even after the extension of time, tenants could not be evicted. Though the defendant admitted the fact of receiving Rs. 10,000/- on the date of agreement and further Rs. 10.000/- on 12-6-1979 (Ex. A.2) further sum of Rs.4,000/- on
29-9-1979 (Ex. A. 3) and further sum of Rs.9,000/- on 28-6-1981 (Ex. A. 4), but however, disputed the fact of receiving further sum of Rs. 4,000/- on 31-3-1982 (Ex. A. 5) as claimed by the plaintiff. Defendant, however, admits that in all, he received Rs.33,000/-. The defendant has categorically taken a stand that the contract being a contingency contract, since the contingency i.e., vacating the tenants could not be completed, it became impossible to fulfil the contractual obligation and as such, the contract is a void contract. Defendant has also stated that he entered into an agreement with the plaintiff on account of pressing financial liabilities. As the plaintiff failed to pay the balance sale consideration within the period of six months from the date of agreement and as such, contended that the plaintiff is not entitled for the relief sought for. On the contrary, the defendant has taken a plea that the plaintiff was not ready and willing and failed to discharge his part of the contract by getting ready with the money within the stipulated period. The defendant has also taken a specific plea that the contract is voidable based on a contingency to take place and the said contingency having not taken place, there is no obligation for the defendant to perform his part as the contract itself is void. The defendant has also taken a clear plea that he got issued a legal notice on 29-11-1982 which was received by the plaintiff on 4-12-1982 showing his willingness to refund the amounts and requested the plaintiff to return the agreement which has become unenforceable. The plaintiff, however, got issued a separate registered notice on 3-12-1982 which was received by the defendants on 11-12-1982. The defendant has taken a clear stand that the plaintiff has committed breach of agreement and is not entitled for specific performance.
7. The defendant has also filed additional written statement wherein he stated that he never executed the alleged letters dated 9-2-1990 and 31-3-1982 which were filed into Court on,23-7-1986. The defendant has also stated that the said letters are concocted and fabricated.
8. The plaintiff, however, has filed a
rejoinder reiterating his contentions that the defendant has received Rs. 37,000/- in advance towards sale consideration.
9. On the basis of the divergent stands taken by the parties, the lower Court framed the following issues for consideration on 8-8-1983:
(1) Whether the plaintiff is entitled to
specific performance of agreement of sale
dated 16-5-1979 together with possession of
the plaint schedule property?
(2) What relief is the plaintiff entitled ?
On 6-10-1987, the Court also framed the following additional issue:
(3) Whether the letters dated 9-2-1980 and 31-3-1982 are true, valid and binding on the defendant ?
10. On behalf of the plaintiff, two witnesses were examined. Plaintiff examined himself as P. W. 1 and got examined P. W. 2 who was the attestor and got marked Exs. A.1 to A.9. On behalf of the defendant, he examined himself as D.W. 1 and got marked Exs. B.1 to B.3. The lower Court on the basis of the oral and documentary evidence and in the set of circumstances held that the plaintiff is entitled for specific performance of agreement of sale for taking constructive possession of the plaint schedule property subject to the tenancy rights of the tenants in occupation of the property and directed the defendant to execute the registered sale deed in respect of the plaint schedule properties as per the terms of the agreement of sale dated 16-5-1979 and put the plaintiff in constructive possession of the plaint schedule property by attorning the tenants to the plaintiff within two months on payment of balance sale consideration of Rs. 2,29,000/- by the plaintiff to the defendant. The lower Court further directed that if the defendant fails to receive the balance sale consideration and execute the sale deed as directed, the plaintiff is at liberty to take the sale deed from the Court by depositing the balance of sale consideration into Court within two months from the date of failure of the defendant to do so. Aggrieved by the said judgment and decree, the defendant has
preferred this appeal.
11. Sri C. Poornaiah, learned counsel appearing on behalf of the appellant-defendant has emphasised that the agreement Ex. A-1 specifies six months’ period and as such the plaintiff should have paid the balance sale consideration within six months’ period and should have got the sale deed executed. Having failed to pay the balance amount within the time stipulated, he is not entitled for specific performance. Secondly, it is contended by Sri Poornaiah that the transaction dependent upon the contingency of getting the tenants evicted by the defendant; As the defendant could not get the tenants evicted within the stipulated time, therefore, the said contingency having not taken place, the plaintiff is only entitled for refund of the money which he has paid to the defendant at the time of agreement and on subsequent dates. Thirdly, it is contended that the agreement does not contemplate taking of the suit house by the plaintiff along with the tenants and as such the suit filed by the plaintiff has to he dismissed. The further emphasis of Sri Poornaiah is in the direction to convince this Court that lime being the essence of the contract, the plaintiff has failed to discharge his part within the time stipulated and, therefore, he is not entitled for specific performance. It is also contended that the plaintiff was never ready and has not shown his willingness to get the agreement executed during the stipulated period and, therefore, in the absence of the plaintiff getting ready and showing to the Court that he is always ready and willing to take the house along with the tenants, the plaintiff is not entitled for the relief as prayed for. The contract being condition precedent, if the condition is not fulfilled, the contract gets frustrated and, therefore, it is pleaded, the contingency being the eviction of the tenants having been frustrated, the contract is no more in force to get a decree. Sri Poornaiah has disputed as to the existence of Exs. A.5 and A.7 alleging that these documents are concocted by the plaintiff. It is stated that the” contents of Ex. A. 4 were not known to the defendant though he admits the fact of the defendant receiving a sum of Rs. 9,000/- from
the plaintiff. Thus, it is contended that the Court below failed to appreciate the evidence on record and granted a decree for specific performance in favour of the plaintiff contrary to the evidence. In support of his contentions, Sri Poornaiah has placed reliance on the following cases reported in N. Palanichami Nadar v. Gomathinayagam Pillai, AIR 1966 Madras 46, M/s. Hind Construction Contractors v. State of Maharashtra, , Mrs. Chandnee Widya Vati Madden v. Dr. C. L. Katial, , Suraj Singh v. Smt. Nathi Bai, , Jugraj Singh v. Labh Singh, AIR 1995 SC 945 and in Gomathinayagam Pillai v. Palaniswami Nadar, .
12. Sri. T. Veerabhadraiah, counsel appearing on behalf of the respondent-plaintiff, on the other hand, submitted that what is to be seen in this case is whether the decree granted by the Lower Court is liable to be set aside as it being a contract of contingency as the vendor could not get the tenants evicted, and if so, in such circumstances whether the contract becomes void or voidable and whether the plaintiff was ready and willing to perform his part of the contract. The endeavour of Sri Veerabhadraiah is to say that unless and until the defendant gives the vacant possession of the premises which is under the occupation of the tenants, time cannot be held to be the essence of the contract. The further endeavour of the learned counsel is that time was never the essence of the contract as the contract was extended from time to time by the defendant while receiving further amounts. It is stated, Exs. A.3, A.4, A.5 and A.7 fully demonstrate the extension of time and, therefore, it is not open to the defendant to say that time is the essence of the contract. It is stated that through Ex. A. 4 dated 28-6-1981, the defendant received Rs. 9,000/-. The defendant undertook to get the tenants vacated and intimate the plaintiff. Likewise, through Ex. A.7 dated 9-2-1980 the defendant stated that he would evict the tenants and inform the plaintiff. These aspects fully demonstrate that time was never the essence of contract. It is further submitted that when there is no explanation as to how
the defendant received these moneys after the expiry of time and as such it is not open to the defendant to say that time is the essence of the contract. On 31-3-1982, through Ex. A.5, the defendant also received Rs. 4,000/- which fact though disputed by the defendant, counsel stated that the Lower Court has held that the documents Exs. A.5 and A.7 are genuine and as such the defendant cannot escape the liability of executing the sale deed in favour of the plaintiff. On 29-11-1982, Ex. A.9 notice was issued by the defendant. Ex. A.8 notice dated 3-12-1982 was issued by the plaintiff to which the defendant has not given any reply. In the absence of any reply being given by the defendant to Ex. A.8, the plaintiffs case cannot be rejected. Sri Veera-bhadraiah, therefore, in this background, contended that time cannot be the essence of the contract. He also contended that the contingency the defendant should have got the tenants evicted and intimated to the plaintiff has not taken place. When once the time factor is given a go-bye by the parties in this case on account of subsequent developments, the defendant having also received further amounts of Rs.4,000/- on 29-9-1979 (Ex. A.3) and Rs.9,000/-on 28-6-1981 (Ex. A. 4) and another sum of Rs. 4,000/- on 31-3-1982 (Ex. A.5), it is not open to say that time is the essence of the contract.
13. It is further contended by Sri Veera-bhadraiah, counsel for the plaintiff that though the defendant has disputed as to the genuineness of the documents Exs. A.5 and A.7 which the Lower Court has rejected, even without the assistance of Exs. A.5 and A.7, there is no breach on the part of the plaintiff to perform his part of the contract as long as the defendant fails to give vacant possession to the plaintiff. In this background, it is contended that time cannot be the essence of the contract. In support of his contentions, he has also relied on a series of decisions reported in The Bank of India Ltd. v. Jamsetji A. H. Chinoy and Messrs. Chinoy and Co., AIR 1950 PC 90, Natulal v. Phoolchand, , Ramesh Chandra Chandiok v. Chunilal Sabharwal (dead) by his L.Rs., , Govindbhai Gordhanbhai Patel v. Gularn Abbas Mulla Allibhai, and in Pasumarti Ramulu v. Nuthi Anantha Ramulu, .
14. On hearing the persuasive submissions of both the learned counsel elaborately and on reading the judgment of the Lower Court, the foremost questions that arise for consideration in this appeal before this Court are:
(1) Whether the time is the essence of the contract ?
(2) Whether the plaintiff was ready and willing to perform his part of the contract? and;
(3) Whether the contract is a voidable contract?
The agreement of sale Ex. A.1 is dated 16-5-1979. According to the terms of the agreement the site has to be measured at the time of registration and the remaining balance of sale consideration was to be paid at the rate of Rs. 95/- per square yard. The vendee has to pay another sum of Rs. 10,000/ – on or before 30-5-1979 and the remaining balance of sale consideration of Rs.2,46,000/- was agreed to be paid at the time of registration of the sale deed i.e., within six months. The vendor has also agreed to get the tenants in occupation of the suit schedule property evicted within six months and on his failure to do so, he has to refund the amounts taken by him. The vendor has to discharge the debt on the schedule property due by him to Muta people and their daughters, if he fails to do so before the registration of the sale deed, the vendee himself can discharge these debts and deduct the same from out of the remaining consideration. If the vendor fails to comply with the above conditions, the vendee is at liberty to take the sale deed from the Court and get it registered and the vendor is also liable to pay the loss, if any, sustained by the vendee. If the vendee fails to take the sale deed as per the above terms and conditions, he must forego the amount of Rs. 20,000/- i.e., Rs. 10,000/-paid on the date of agreement and another sum of Rs. 10,000/- agreed to be paid on 30-5-1979.
15. It is seen that the plaintiff paid another sum of Rs. 10,000/- to the defendant
and obtained receipt on 12-6-1979 which is marked as Ex. A.2. The defendant has again received an amount of Rs. 4.000/- anil gave a receipt on 29-9-1979 which is marked as Ex.A.3. The defendant has also received Rs. 9,000/- on 28-6-1981 and executed Ex.A. 4 – – Kharamnama. Insofar Exs. A. 1 to A.4, A.8, A.9 and B.1 to B.3 are concerned, these are all undisputed documents. The defendant has denied only Exs. A.5 and A.7 which were subject-matter oi additional issue framed on 6-10-1987 by the Lower Court. No doubt as agreed initially, time was the essence of the contract. The plaintiff was to pay the remaining sale consideration of Rupees 2,46,000/- within a period of six months from 16-5-1979 and get the registered sale deed executed. The defendant by that time shall get the tenants vacated. When it is contended that time is the essence of the contract, the action of the defendant in receiving Rs. 4,000/- on 29-9-1979 through Ex. A.3 and also receiving Rs.9,000/- on 28-6-1981 through Ex.A. 4 goes to show that the time factor was given a go-bye by the defendant. Ex.A.7 is the letter dated 9-2-1980 executed by the defendant stating that the tenants’ Have not yet vacated the properly and agreeing to intimate about the vacating of the property by the tenants within one month from the date of such eviction and both of them agreed to execute the safe deed within a period of one month from the date of intimation. This itself also goes to show that the time was not the essential factor in this ease. No doubt, the defendant has denied the execution of Exs.A.5 and A.7 which is a receipt for Rs. 4,000/- and a letter addressed by the defendant agreeing to intimate to the plaintiff immediately after the tenants vacating the premises and also undertaking to register the sale deed within one month. The finding of the Lower Court as to the correctness of the documents in my view, cannot be rejected.
16. Strangely, the defendant admits the fact of receiving Rs.9,000/- on 28-6-1981 Ex.A. 4) but denies the contents of Khara-runama through which the defendant undertook to intimate the plaintiff about the vacating of the tenants and further agrees to execute the sale deed when once the tenants
vacate the premises. It is hard to believe the version of the defendant. It must be noted that the defendant is a law graduate and could not understand the contents of Ex.A. 4. As discussed above, I hold that the conduct of the parties has given a go-bye to the terms of the original contract and, therefore, time is not the essence of the contract.
17. Insofar as the submission that life plaintiff was not ready and willing to perform, his part of the contract is concerned, though the agreement stipulates that the plaintiff shall get ready with the moneys within six months and get the sale deed executed, the obligation on the part of the defendant is to get the tenants evicted. As seen from Exs. A. 4 and A.7, the defendant has admitted that the tenants have not vacated the premises and has also agreed to intimate as soon as the tenants vacate the premises. As long as the defendant fails to get the tenants evicted and intimate to the plaintiff, there is no reason for the plaintiff to get prepared with the balance of sale consideration and to intimate the same to the defendant. It is not the case that the plaintiff has refused to take premises with tenants. One of the clauses in the agreement Ex. A. 1 is that the vendor has to get the tenants evicted who are in occupation of the suit property within six months and if he fails to do so, he shall refund the amounts taken by him. Thus, it is clear, if the defendant is not in a position to get the tenants evicted, it was open to him to refund the money which he has received, i.e., an amount of Rs. 20,000/- after expiry of six months’ period. Nothing is placed either before the Lower Court or before this Court, on behalf of the defendant that the defendant had intimated to the plaintiff that he is ready to refund the money and requested the plaintiff to return the sale agreement, immediately after the expiry of the agreement period which expired by 15-11-1979. On the contrary, the defendant has issued a belated notice Ex. A.9 dated 29-11-1982, after a lapse of more than three years’ period through which notice he has requested the plaintiff to receive his money and release the documents which he is in possession. I do not think, in the circumstances, it is open to the defendant to say that the plaintiff was not ready and willing
to perform his part of the contract. On the contrary, I am inclined to hold that the defendant was not ready to discharge his obligation by getting the tenants evicted. In the rejoinder to the additional written statement, the plaintiff has pleaded before the trial Court that he is willing to take the plaint schedule property along with the tenants. It is said that such an attempt by the plaintiff is only intended to gain an advantage over the defendant. I do not think such a situation could be visualised as the defendant himself has not acted upon immediately after the expiry of the agreed time by intimating the plaintiff to receive the amounts which he received as advance and sought the return of the documents. On the contrary, the material placed before the Court do indicate that the defendant has received the moneys after expiry of the period which is evident from Ex.A. 4 on 28-6-1981 apart from receiving Rs.4,000/- on 29-9-1979 (Ex.A.3). The Khararunama Ex.A. 4, Exs.A.5 and A.7 all go to show that the parties have given a go-bye to the original terms. In the evidence of P.W. 1, it has been categorically stated that the plaintiff (P.W. 1) was ready and willing to perform his part. On the contrary, the defendant was not ready to discharge his part as is evident from the facts of the case.
The efforts of Sri Poornaiah, counsel for the defendant to say that as contemplated under Section 16(C) of the Specific Relief Act that a party shall plead and prove that he is ready and willing to perform his part of the contract throughout, the plaintiff, in my view, has pleaded that he is ready and willing to perform his part of the contract as discussed above and, therefore, the submission on behalf of the defendant is not sustainable.
18. Coming to the third limb of the argument that the contract is a voidable contract, I do not think that such an argument is tenable in the set of circumstances. No doubt; the contingency of evicting the tenants by the defendant has to take place and thereafter he has to get the sale deed executed in favour of the plaintiff. There is no evidence to show before this Court that the-defendant
has tried his best to get the tenants vacated. On the contrary, the defendant has stated that he has requested the tenants to vacate and only succeeded in getting one tenant vacated. This aspect goes to show that the defendant was not sincere in taking steps for getting the tenants vacated. The contingency is such that it becomes impossible to perform, then only it could be said that the contract becomes voidable. It is not the case that the plaintiff refused to take the house along with the tenants. It is also not the case of the defendant that he intimated to the plaintiff immediately after the expiry of six months’ period that he is unable to evict the tenants and requested the plaintiff to return the documents by collecting the advance amounts paid by him. On the contrary, the defendant went on receiving moneys. Exs.A. 4 and A. 7 in particular are very much clear to the fact that the defendant promised to evict the tenants and intimate the plaintiff for taking further steps. When the party defaults itself, it is not open to such party to say that the contract is frustrated. Therefore, 1 do not think that present contract is voidable contract as pleaded by the counsel for the defendant. On the contrary, this is not such a situation where the contract becomes voidable and the contingency becomes impossible to perform. I do not think the contract has become frustrated in view of the tenants not vacating the premises. What is to be examined in a case of this nature is the surrounding circumstances that have to be taken into consideration while examining whether the contract has become frustrated or not. The eviction of the tenants is a contingency which ought to have been taken up by the defendant. Having failed to do so, it is not open to him to say that the contract has become-frustrated as if the eviction of the tenants is an impossible task thus making the contract unenforceable. As discussed by me, the contract cannot be held to have been got frustrated.
19. Insofar as Exs. A.5 and A.7 are concerned which are disputed by the defendant, the Lower Court, in my view, given cogent reasons rejecting the stand of the defendant and held that Exs.A.5 and A.7 are genuine. The trial Court has also opined that
there is no reason for the plaintiff to create Exs. A.5 and A.7. Even without Exs. A.5 and A.7, the Lower Court has held, that the plaintiff has succeeded in seeking the relief of specific performance. I agree with the finding of the Lower Court on this aspect. Some discrepancies in the letters and words, cannot enure to the benefit of the defendant to deny the relief sought by the plaintiff. Accordingly, I do not see any justifying reasons to come to a different conclusion on the finding of the Lower Court with regard to Exs.A.5 and A.7.
20. Though the learned counsel for the appellant-defendant has drawn the attention of this Court while referring to a series of decisions referred to in earlier paras, I do not
think, the ratio laid down in those cases can in any way assist the case of the appellant-defendant. On the contrary, the ratio laid down in the decisions cited by the counsel for the plaintiff-respondent assist the stand taken by the plaintiff.
21. Having regard to the above discussion, I am inclined to hold that the judgment and decree of the trial Court do not warrant any interference from this Court.
22. Accordingly, the appeal fails and is, therefore dismissed, but in the circumstances, no costs.
23. Appeal dismissed.