JUDGMENT
A.K. Sikri, J.
Page 0004
1. The respondent herein, in a suit for specific performance and possession, filed on the original side of this Court, has obtained the decree of specific performance and on payment of the balance of purchase price, i.e. Rs. 59,400/-, for execution and registration of the sale deed, the appellants, who were the defendants in the suit, are also directed to handover the vacant possession of the ground floor of House No. 24/72, West Patel Nagar, New Delhi (hereinafter referred to as ‘the suit property’). In this appeal Page 0005 preferred by the appellants (hereinafter referred to as the ‘defendants’), the said decree for specific performance and possession dated 27.3.1980 is challenged. The undisputed facts are that Shri Gulzar Singh, predecessor-in-interest of the defendants, and the respondent (for short, ‘the plaintiff’) entered into an agreement to sell dated 13.10.1972 for the sale of the suit property for a total consideration of Rs. 80,000/-. A sum of Rs. 5,000/- was paid as earnest money. The property at that time of this agreement was mortgaged with Delhi Administration and according to the defendants, as on 13.10.1972, a sum of Rs. 23,000/- approximately was payable on account of the said mortgage. The plaintiff paid further amount of Rs. 15,000/- on various dates. On 4.12.1972, a further sum of Rs. 10,000/- was paid. It may be mentioned at this stage that during the pendency of the suit, Shri Gulzar Singh died and the defendants were brought on record. The circumstances in which this amount was demanded by the defendants and paid by the plaintiff are in dispute, which we shall refer to at the later stage.
2. In fact, there was no dispute between the parties about the execution of the agreement and the sale consideration, etc. The parties are, however, at variance as to whose obligation was to get the mortgage redeemed from the Delhi Administration. Whereas the case of the plaintiff was that a sum of Rs. 10,000/- was demanded by the defendants for redeeming the mortgage and against that payment the plaintiff had demanded possession of the first floor. However, the defendants offered possession of one room on the ground floor to the plaintiff stating that the first floor was in possession of a tenant. Therefore, it was the obligation of the defendants, even otherwise under the agreement, to redeem the mortgage.
3. The defendants, on the other hand, took the stand that mortgage was to be redeemed by the plaintiff by paying the money to the Delhi Administration (the mortgagee), out of the total consideration agreed upon by the parties; since the mortgage was not redeemed, vide notice dated 8.2.1973 issued by the predecessorin-interest of the defendants, it was clearly stated that the agreement stood cancelled because of failure on the part of the plaintiff in not paying a sum of Rs. 23,433.57/-, which was required for redemption, and the earnest money stood forfeited. The plaintiff had filed the suit after refuting those averments. Therefore, the real dispute between the parties is as to whose obligation was to redeem the mortgage. If it was to be done by the plaintiff then, according to the defendants, unless the mortgage was redeemed, there was no obligation on their part to fulfilll the terms of the agreement to sell.
4. On the basis of pleadings, the learned single Judge framed the following issues:
1. What were the terms of the agreement to sell dated 13th October, 1972?
2. Did the plaintiff fail to perform his part of the agreement and hence the agreement has come to an end?
3. Have the defendants committed breach of the agreement to sell?
4. Is there now no enforceable agreement subsisting between the parties?
Page 0006
5. Is the plaintiff entitled to specific performance of the agreement dated 13th October, 1972 or to other reliefs as claimed?
6. If the plaintiff is entitled to the relief of damages to what amount is he entitled?
7. Relief, including the question whether the earnest money is refundable or adjustable.
5. The learned single Judge pointed out, and rightly so, that the outcome of the suit was dependent on the determination of issue Nos. 2 and 3. In fact, whether there was failure on the part of the plaintiff or the defendant to perform their respective obligations depended on the question as to who was to get the mortgage redeemed. The plaintiff examined as many as 5 witnesses in support of his case. PW-1, Mr. Veer Kumar Sakhuja, a handwriting expert. PW-2 was Shri Vajinder Singh, the property dealer. Shri Nand Lal, one of the attesting witness entered the witness box as PW-3. One Shri Raj Kumar deposed as PW-4, who stated that the transaction was entered into in his presence when agreement to sell and the receipt were executed by the defendant. The plaintiff examined himself as PW-5, who also deposed about the agreement, payment of earnest money and further payments.
6. As against the aforesaid evidence brought on record by the plaintiff, the defendants did not appear themselves, but produced an official from the Delhi Administration in the witness box as DW-1, who had deposed with respect to the mortgage of the property with Delhi Administration and redemption of the said mortgage by the predecessor-in-interest of the defendants himself. None of the defendants even appeared themselves in support of their case. On the basis of evidence brought on record by the plaintiff, receipts Ex.PW-1/12 and Ex.PW-1/13, vide which the plaintiff had given money to the defendants, were held to be proved by the learned single Judge. In any case, it is not even necessary to deal with all other issues, findings whereof are given in favor of the plaintiff, as before us the basic contention was about the redemption of mortgage. In this respect, the learned single Judge took note of various clauses in the agreement and those relevant for our purpose are as under:
2. That the 1st party has received Rs. 5,000/- (Rupees Five thousand only) in cash as earnest money from 2nd party, and shall further receive advance payment from 2nd party for redemption of mortgage loan of Govt. and shall deliver vacant possession of 1st floor.
3. That the period of sale is two months from today and on receipt of balance price the 1st party shall execute and get registered the sale deed of above property in favor of 2nd party or nominee, and shall deliver vacant possession of the remaining property and clear title deeds of the property.
4. If the 2nd party does not pay the balance sale price within the above period, the earnest money paid shall stand forfeited and not refunded. The sale bargain shall stand cancelled.
5. If the 1st party does not perform his part of contract within the above period then the 2nd party shall have full option to get the Page 0007 sale bargain completed through the courts of law at the costs and expenses of the 1st party.
7. As per Clause 3, the sale was to be completed within two months from the date of signing of the agreement and on receipt of the balance price, when the defendants were also to deliver vacant possession ‘of the remaining property and clear title deeds of the property’. The learned single Judge on the basis of these clauses and the evidence produced on record, returned his finding to the effect that it was the defendants who were to redeem the mortgage and transfer the property to the plaintiff within two months. The relevant portion in the impugned judgment containing this discussion reads as under:
Under the agreement the defendant was to redeem the mortgage and transfer the property to the plaintiff within two months of the agreement dated 13th October, 1972. There is no evidence that the defendant had within the aforesaid period given any notice to the plaintiff requiring him to pay any specific amount. If the defendant was to pay to the Government Rs. 23,433.57 and the plaintiff was not paying the full amount or any part of it, the defendant would have definitely served a notice on the plaintiff requiring him to pay the balance of the amount. The only notice that the defendant had served on the plaintiff was dated 8th February, 1973 in which the plaintiff was not asked to pay any amount but he was only told that since he had not paid the amount of Rs. 23,433.57 the agreement had been cancelled and the earnest money forfeited. The above position taken by the defendant in the notice dated 8th February, 1973 is factually not correct. The plaintiff had paid Rs. 15,600/- to the defendant in addition to the earnest money of Rs. 5,000/-. It is not clear from the record as to what was the actual amount payable by the defendant to the Government in the loan account. DW.1 Shri Chand Sharma deposed that on 13th October, 1972 Rs. 17,676.13 were due as principal and Rs. 5757.44 by way of interest. In cross-examination the witness admitted that on page 178 there is a carbon copy of a letter written to Gulzar Singh in which Gulzar Singh was asked to pay Rs. 17,675.13 in lumpsum. The witness further deposed that on 19th January, 1973 Gulzar Singh did not know as to what was the amount outstanding against him. It appears from the statement of D.W.1 that in November or December 1972 Gulzar Singh was not aware of the actual amount payable by him to the Government and it was only about 19th Juanuary, 1973 that Gulzar Singh was told about the amount that was payable by him in the loan account. The parties have not placed on record the notices which were exchanged between them and, therefore, it is not clear as to what position was taken by the parties in the notices served on each other. But ut us (it is) proved in unmistakeable terms that the plaintiff had paid Rs. 15,600/- to the defendant after the agreement Ex.P. and this amount was paid to enable the defendant to pay off the Government dues.
The defendant under Clauses 2 and 3 of the agreement was to deliver possession to the plaintiff of the first floor (which was admittedly with the tenant) at the time of receiving advance payment for redemption of Page 0008 the mortgage and of the ground floor (which was in the possession of the defendant) at the time of the execution of the sale deed. Undisputedly, the defendant had not delivered possession of the first floor to the plaintiff when he took the amount of Rs. 15,600/-. The case of the plaintiff is that at the time of taking the amount of Rs. 10,000/-, the defendant had said that since he was not able to get the first floor vacated from the tenant he would give possession of a room on the ground floor and possession of a room on the ground floor was in fact given to the plaintiff when the plaintiff had paid the amount of Rs. 10,000/-. The defendant had controverter the above position and stated that the room on the ground floor was given to the plaintiff at his request for the purpose of a marriage. I am inclined to believe the plaintiff that the possession of the room on the ground floor was given as stated to by him. There is little doubt that the defendant was to give possession of the first floor at the time of taking the advance amount for redeeming the mortgage but he had failed to fulfill the above obligation.
For the reasons discussed above, my findings on issues No. 2 and 3 are that it was the defendant Gulzar Singh who had committed breach of the agreement.
8. Challenging the aforesaid conclusion reached by the learned single Judge, Mr. Rameshwar Dayal, learned senior counsel appearing for the appellants/defendants, submitted that the plaintiff was not ready and willing to perform his part of the contract inasmuch as no notice was ever given by the plaintiff before filing the suit and it is the defendant who initiated the action by serving notice dated 8.2.1973 informing the plaintiff about the non-payment of amount of Rs. 23,433.57 required for redemption, and on this failure on the part of the plaintiff, it is the defendants who had informed the plaintiff about the cancellation of the agreement. He further submitted that the plaintiff, in his deposition, had clearly admitted that he was to pay a further sum of Rs. 20,000/- to the defendants to enable him to clear the Government dues and on payment of this amount, the plaintiff were to be given possession of the first floor. Learned Counsel also referred to the cross-examination of the plaintiff wherein he admitted that he did not make any enquiry from the Delhi Administration regarding the amount due from the defendants. He also highlighted answers given by the plaintiff to the following two questions:
Q. I put it to you that you had to pay the mortgage amount to Gulzar Singh who was thereafter to redeem the mortgage?
Ans. I was to pay the mortgage amount only after I was given possession of the first floor.
It is correct that the sale deed was to be registered within two months of the signing of the agreement and I was also to pay the mortgage amount within that period.
Q. I put it to you that since you did not pay the mortgage amount, the agreement automatically stood cancelled?
Ans. It is incorrect. I had paid the amounts demanded from me by Gulzar Singh.
Page 0009
9. Mileage, which is sought to be drawn by the defendants’ counsel from the aforesaid answers is that the plaintiff had admitted that he was to make payment to the Delhi Administration, though he took the stand that it was only after the defendants delivered him possession of the first floor and from this admission it was clear that not only the plaintiff had knowledge about the mortgage of the property with the Delhi Administration, but he knew his obligation to make the said payment, and created a false dispute that the payment was to be made only after the possession of the first floor was to be delivered as there was no such pre-condition attached to the said payment. He submitted that the said witnesses had clearly deposed that on 29.1.1973, Shri Gulzar Singh obtained challans for payment of the mortgage amount and the loan amount was ultimately cleared on 22.1.1977. Thus, intention of the Shri Gulzar Singh was very clear. He wanted to redeem the mortgage, but the plaintiff did not make the payment and, therefore, it could not be done by the Shri Gulzar Singh at that time and ultimately he had to make the payment of his own in the year 1977.
10. Learned senior counsel for the appellants/defendants also disputed the exact amount paid. He stated that as per the plaintiff, in the suit the total amount paid was Rs. 20,600/-, but in fact, he had paid only Rs. 15,000/-. He submitted that in the written statement filed by the plaintiff in other suit between the parties entitled Shri Gulzar Singh v. Shri Kuldeep Singh, the plaintiff had admitted that he had paid only Rs. 15,000/-. This was a suit for mandatory injunction filed by Shri Gulzar Singh and in para 5 of the written statement thereto, the aforesaid admission has come. Copy of this written statement is placed on record along with CM No. 5110/2005.
11. Another submission of learned Counsel for the appellants/defendants was that the conduct of the plaintiff was to be seen from the date of agreement till the notice of termination was given by the defendants and from the date of said notice till the filing of the suit. Not only during this period the mortgage was not redeemed, argued the counsel, he also contended that the plaintiff had come to the Court more than 21/2 years after the signing of the agreement, whereas the agreement stipulated completion of the transaction within two months. Further, there was no notice from the plaintiff to the defendant till the filing of the suit. He, thus, also sought to argue that in a case like this, the discretionary jurisdiction should not have been exercised by the learned single Judge by passing the decree of specific performance and at the most, the plaintiff could be awarded damages/reasonable compensation. In support of the aforesaid submissions, learned Counsel relied upon the following judgments:
i) Chand Rani (dead) by LRs. v. Kamal Rani (dead) by Lrs.
ii) K.S. Vidyanadam and Ors. v. Vairavan
iii) Shri R.K. Aneja v. Delhi Development Authority and Anr. 1996 (1) AD (Del) 909
Page 0010
iv) S. Rangaraju Naidu v. S. Thiruvarakkarasu
v) Smt. Jamila Khatoon and Ors. v. Ram Niwas Gupta AIR 1998 ALL 138
12. Per contra, Mr. S.K. Puri, learned senior counsel appearing for the plaintiff/respondent, submitted that the testimony of various witnesses on the agreement to sell, payment of consideration, obligation of the defendants to redeem the mortgage, etc. had gone unchallenged, inasmuch as, no evidence in rebuttal on these aspects was produced by the defendants. The official from the Delhi Administration was produced, who stated about the redemption of mortgage from which it could not be established as to whose obligation it was to get the said mortgage redeemed. He also referred to the part performance of the contract by Shri Gulzar Singh himself, which was clear from the fact that Shri Gulzar Singh had filed the suit for mandatory injunction against the plaintiff seeking to recover back the one room which was given by him to the plaintiff and he pointed out that the suit filed by Shri Gulzar Singh was dismissed. He referred to the clauses of the agreement as per which the possession was to be given simultaneously with the payment and argued that this clearly proved that there was no obligation on the part of the plaintiff to make any payment earlier. Explaining the delay of 2? years, the learned Counsel submitted that the plaintiff was engaged in the suit filed by Shri Gulzar Singh for mandatory injunction and due to the pendency of that suit, the plaintiff waited for the outcome and file the present suit after the dismissal of the suit filed by Shri Gulzar Singh, inasmuch as, same issues were involved in that suit as well. He referred to the reasoning of the learned single Judge in passing the decree of specific performance and also submitted that the decree was rightly passed as it was not a case for award of damages. In support of this contention, he submitted that equity was in favor of the plaintiff, inasmuch as, none of the defendants resided in Delhi, except one sister and, therefore, the defendants did not need any accommodation. One room was in possession of the plaintiff and rest of the property was lying vacant and purpose of continuing with this litigation was only to grab more money from the plaintiff.
13. From what is narrated above and after taking note of the facts on which there is a dispute, we may first list those facts which are not in dispute as that would be of some help to take decision on the disputed aspects of the case. The admitted factual position is as under:
(a) Agreement of sale dated 13.10.1972 entered into between the plaintiff and the defendant is not in dispute.
(b) As per this agreement, the defendant agreed to sell house No. 24/72, West Patel Nagar for a total consideration of Rs. 80,000/-. A sum of Rs. 5,000/- was paid as earnest money at the time of signing the agreement.
(c) Though the balance amount was to be paid at the time of registration of the sale deed and delivery of vacant possession, some further amounts were paid by the plaintiff to the defendant. According to the Page 0011 plaintiff, he paid an additional amount of Rs. 15,600/- (Rs. 5,000/- on 31.10.1972, Rs. 10,000/- on 4.12.1972 and Rs. 600/- on 18.12.1972), whereas the defendant alleges that an additional amount of Rs. 15,000/- was only paid. However, it is not in dispute that further amounts were paid by the plaintiff to the defendant.
(d) Part possession of the house in question was given by the defendant to the plaintiff.
(e) At the time of execution of the agreement to sell, suit property was mortgaged with the Delhi Administration, which was to be redeemed. For redemption, the defendant was to take further advance payment from the plaintiff.
(f) As per the agreement, the period of sale was two months within which the registered sale deed was to be executed by the defendant in favor of the plaintiff on receipt of balance price and the defendant was to deliver vacant possession of the remaining property and clear title deeds of the property.
14. It is not in dispute that transaction could not be completed within two months. It is also not in dispute that before entering into the sale deed that mortgage was to be redeemed. As per the defendant, a sum of Rs. 23,000/- approximately was the amount payable, on account of mortgage, to the Delhi Administration. The bone of contention is as to whose responsibility it was to redeem the mortgage. The case set up by the defendant is that it was the obligation of the plaintiff and as the plaintiff did not pay the amount to Delhi Administration and get the property redeemed, he committed breach and, therefore, notice dated 8.2.1973 given by the defendant to the plaintiff was a right move wherein the defendant stated that the agreement stood cancelled and earnest money forfeited. The outcome of the case, therefore, turns primarily on the decision of this issue. If what the defendant says is correct, then the plaintiff was clearly in breach. On the other hand, if it was the liability of the defendant to get the property redeemed and plaintiff was only to make payment as per demand of the defendant, the plaintiff virtually succeeds.
15. We have already taken note of the relevant clauses of the agreement and the manner in which these clauses are interpreted and also the evidence analysed by the learned single Judge in accepting the plea of the plaintiff on this aspect and decreeing the suit.
16. In order to find out the answer to the issue raised, one will have to bank upon the terms of the agreement as the respective rights and obligations of the parties flow from this agreement, which is in writing, signed by the parties and there is no dispute about the clauses stated therein. In view of the written stipulations, it would not be permissible either for the plaintiff or the defendant to say anything contrary thereto in their oral evidence.
17. The agreement nowhere cast any duty or obligation upon the plaintiff to get the mortgage redeemed. Clause 2 of the agreement stipulates that the defendant has received Rs. 5,000/- in cash as earnest money and “shall Page 0012 further receive advance payment from the 2nd party for redemption of mortgage loan of the Government and shall deliver vacant possession of the first floor”. It is crystal clear from the phraseology used in this clause that the defendant was only to receive further advance payment from the plaintiff for the purpose of redemption of the mortgage. It necessarily follows that obligation of the plaintiff was limited to giving money to the defendant to enable the defendant to get the mortgage redeemed. As far as act of redemption is concerned, steps were to be taken by the defendant. Otherwise, the language should have been to the effect that the plaintiff shall get the mortgage redeemed rather than making payment to the defendant for getting the property redeemed. By reading this Clause 2 in conjunction with Clause 3, one can clearly conclude that this was to be done within a period of two months so that at the end of two months, the balance price is paid, sale deed executed and vacant possession of the remaining property delivered along with?clear title deeds of the property?. Delivery of clear title deeds also indicates that it was the defendant who was to get the property redeemed.
18. The plaintiff admittedly paid further amounts. Whether it is Rs. 15,000/- or Rs. 15,600/- is a question we shall address to later. The agreement does not stipulate the exact amount payable for getting the property redeemed. There is nothing on record as per which the defendant indicated to the plaintiff the exact amount which was payable. The plaintiff has denied the suggestion that the defendant had told the plaintiff that more than Rs. 23,000/- was to be paid to the Delhi Administration. No doubt, the plaintiff has stated that the defendant was to deliver possession of the first floor and only thereafter he had to pay the amount payable to the Delhi Administration. In the same breath, the plaintiff has also stated that he had paid the amounts as demanded by the defendant from him. Thus, it was for the defendant to show that he had made demand of specific amount and it was for the defendant to show that he had made known to the plaintiff as to how much was the loan amount payable to the Delhi Administration. Moreover, it is also not in dispute that as per Clause 2 of the agreement, along with making further advance payment for the purpose of redemption of mortgage, the defendant was to deliver possession of first floor of the suit property. The plaintiff had made a categorical statement that the first floor was in possession of a tenant and, therefore, was not given to the plaintiff and it is nowhere denied by the defendant. Thus, even this obligation of the plaintiff to pay further amount for redemption of mortgage was coupled with reciprocal obligation of the defendant to handover first floor of the suit property, which the defendant failed to do. In view of this, the judgment of the Supreme Court in the case of Chand Rani (supra) will have no application.
19. We, therefore, agree with the findings recorded by the learned single Judge on this aspect and are of the opinion that it was the obligation of the defendant to get the property redeemed and there was no breach on the Page 0013 part of the plaintiff in this behalf. We do not agree with the submission of learned Counsel for the appellant/defendant that the plaintiff was not ready and willing to perform his part of the contract only because no notice was given by the plaintiff before filing the suit. It has come on record that the defendant filed a suit of injunction, which the plaintiff was defending and immediately after the dismissal of the said suit, the plaintiff filed the suit in question. After entering into the agreement to sell and paying earnest money of Rs. 5,000/-, the circumstances in which further amounts were paid have been discussed above. Whether this amount was Rs. 15,000/- or Rs. 15,600/- would not have bearing on the outcome of the case. The plaintiff has produced receipts on record showing the payment of Rs. 15,600/-. However, it is also correct that in the written statement filed by the plaintiff in the suit for injunction, which was filed by the defendants, the plaintiff had stated that he had paid a sum of Rs. 15,000/-. Since this is not going to affect the result of the suit and the differences between the two amounts is Rs. 600/-, we may safely pin down the plaintiff to the admissions contained in the said written statement and would treat that the plaintiff had made further payment of Rs. 15,000/- and in this manner, total amount paid is Rs. 20,000/-. Consequently, balance amount payable would be Rs. 60,000/- and not Rs. 59,400/-.
20. The only other question which needs to be determined is as to whether it was not proper on the part of the learned single Judge to pass the decree of specific performance and discretion should have been exercised in granting the compensation, instead. efore we appreciate this argument we deem it proper to elucidate the legal principle governing the field.
21. The grant of relief for specific performance is a rule and it was for the appellant to demonstrate as to how her case would fall in any of the exceptions carved out under Sub-section 2 and Section 20 of the Specific Relief Act. There has to be valid and cogent reasons for refusal of the relief of specific performance and applying the exception. Section 20 of the Specific Relief Act, which provides ‘Discretion as to decreeing specific performance’, also stipulates the manner in which such a discretion is to be exercised. It is made clear in Sub-section (1) of Section 20 itself, which provides that ‘the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of Appeal’. Sub-section (2) gives three situations in which discretion not to decree specific performance is to be exercised. These are as follows:
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
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22. As we have already pointed out, there has to be a valid and cogent reason for refusal to grant the relief of specific performance and applying the exceptions. This would clearly cast duty upon the defendants to make out a specific case under one or more exceptions stipulated in Section 20 of the Specific Relief Act.
In the present case, the defendants had not even pleaded that the plaintiff, even if succeeds, be not granted decree for specific performance. No evidence is led endeavoring to cover the case in any of the aforesaid exceptions. It seems that no argument was also addressed and for this reason the only observation of the learned single Judge on this aspect is-
I find no valid reason why the plaintiff should be denied the right to specifically enforce the agreement. Issue No. 5 is found in favor of the plaintiff.
23. Learned Counsel for the appellants/defendants submitted that the conduct of the plaintiff was to be seen which would disentitle him to get the decree for specific performance. He pointed out that the plaintiff had approached the Court by filing the suit 21/2 years after the date of agreement to sell and this inaction on the part of the plaintiff was sufficient to refuse him the decree of specific performance, as held by the Supreme Court in K.S. Vidyanadam (supra). In this case, the Court held that it cannot be said that any and every suit for specific performance of the agreement, which does not provide specifically that time is of the essence of the contract, should be decreed, provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time limits prescribed by the parties in the agreement have no significance or value and that they mean nothing.
The rigor of the rule evolved by the courts that time is not the essence of the contract in the case of immovable properties (evolved in times when prices and values were stable and inflation was unknown) requires to be relaxed, if the modified, particularly in the case of urban immovable properties. It is high time for the Court to do so. In that case, may be the parties knew of the circumstance regarding rising prices but they have also specified six months as the period within which the transaction should be completed. The said time limit may not amount o making time the essence of the contract but it must yet have some meaning. Not for nothing could such time limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning of that they are as good as nonexistent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract, relating to immovable properties.
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24. The reason for denying the relief of specific performance was that from the date of agreement to sale till the date of suit notice, the purchaser was sitting quiet without taking any steps to perform his part of the contract under the agreement, through the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the vendors to execute the sale deed and deliver possession of the property. Further, the delay was coupled with substantial rise in prices, according to the vendors its three times, between the date of agreement and the date of suit notice.
The Court, thus, took note of the fact that such a delay had brought about a situation where it would be inequitable to give the relief of specific performance to the purchaser. We may point out that in the said case the seller had sold the property to another buyer and rights have been created in favor of the third party as well. As against that, in the present case, the plaintiff has explained the delay in filing the suit, namely, the defendants had filed suit for injunction and the plaintiff was made to defend that suit, which kept pending for all these years, and immediately after the dismissal of that suit filed by the defendants, the plaintiff had filed the instant suit. Moreover, in the present case, no third party interest is created. There is no evidence on record to show that between the date of agreement and the date of filing of the suit, the rates of property had gone up substantially. Further, none of the defendants is staying in Delhi, except in sister who is in her matrimonial home.
25. Learned Counsel for the appellants/defendants had referred to two more judgments in support of his contentions that in this case damages should be awarded instead of decree for specific performance. These are S. Rangaraju Naidu (supra) and Smt. Jamila Khatoon (supra).
26. As far as the judgment in the case of S. Rangaraju Naidu (supra) decided by the Apex Court is concerned, the Court did not grant specific performance primarily on the ground that the main transaction between the parties was that of grant of loan by the plaintiff, who was a money lender, and he had filed suit for recovery of the said amount. Since the debtor was not in a position to pay, agreement to sale of the property was also thought to be enforced. The fact situation in that case was, thus, materially different.
27. In the case of Smt. Jamila Khatoon (supra), which is a judgment of the Allahabad High Court, the relief of specific performance was again denied on the ground that the plaintiff did not file the suit with a right promptitude though it is filed within the period of limitation and since there was inordinate delay in the presentation of the suit, without giving proper explanation for filing it after a long lapse of time, the Court chose to grant alternative remedy of damages instead of decree for specific performance.
28. We may state at the cost of repetition that though we have considered these submissions of learned Counsel for the appellants/defendants, no such case was brought before the learned single Judge; no evidence led; Page 0016 no argument addressed and, therefore, there is no discussion on this aspect in the impugned judgment. Normally, therefore, the appellants would not be entitled even to raise this issue.
29. At the same time we may also point out that discussing the exception contained in Clause (b) of Sub-section (2), where discretion not to pass decree for specific performance in case of undue hardship to the defendants, the Karnataka High Court in the judgment rendered by it in Lt. Cdr. M.C. Kendall v. S. Chandrasekhar AIR 1991 Karnataka 4142, while interpreting Section 20 of the Specific Relief Act held as under:
A perusal of the aforesaid provision would go to show as to under what circumstances hardship can be taken into consideration in refusing specific performance. It is not possible to enumerate the different circumstances which constitute hardship. It will suffice if it is noted that the question of hardship will have to be adjudged in the facts and circumstances of the case. In this connection, the observation of the Privy Council in the decision in Devis v. SHWE GO 11 I.C. 801 (PC) throws light on an important aspect of the matter. Among other things, it is observed in the said case as under:
In the absence of any evidence of fraud or misrepresentation on the part of the plaintiff which induced the defendant to enter into the contract, Their Lordships see no reason to accede to the argument. The bargain is onerous, but there is nothing to show that it is unconscionable. The defendant knew all along that a lakh was the plaintiff’s limit; it is in evidence that he had frequently urged the defendant’s daughter to advise him to sell the land if he was getting a higher offer. It is difficult to say under what circumstances that he took an improper advantage of his position or the difficulties of the defendant.
The again, it is necessary to remember that mere rise in price subsequent to the date of the contract or inadequacy of price is not to be treated as a hardship entailing refusal of specific performance of the contract. Further, the hardship involved should be one not foreseen by the party and should be collateral to the contract. In sum, it is not just one factor or two, that is relevant for consideration. But it is the sum total of various factors which is required to enter into the judicial verdict. In the instant case, defendant 1 has not pleaded hardship much less adduced any evidence. He has not even stepped into the witness box. Under these circumstances, it is not at all possible to hold that the performance of the contract would involve some hardship on the defendant which he did not foresee.
What is emphasised is that applicability of the exception to the rule of specific performance depends on the facts and circumstances of each case and those facts need to be pleaded.
30. In the instant case, the defendant failed to place on record any special circumstances which could have persuaded the learned single Judge not to exercise the discretion in passing the decree of possession. In the absence of any such findings on record, it is not open to the appellants to even raise this submission.
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31. Before we part with, one aspect needs attention. The plaintiff was to make balance consideration of Rs. 60,000/-. This amount has not been paid. With the decree of suit for specific performance, the plaintiff would be getting the property in question, the market price whereof would be much more than the agreed sale consideration in the year 1972. No doubt, the reason is pendency of this appeal which was filed in the year 1980 and remained pending for all these years and the plaintiff cannot be blamed for the same. At the same time, the plaintiff did not part with the consideration which the plaintiff was supposed to give had the deal been matured within the time specified in the agreement. We, therefore, are of the opinion that on the balance consideration of Rs. 60,000/-, the plaintiff should pay interest @ 18% p.a., which shall be computed with effect from 1.1.1973. The plaintiff shall tender this amount to the appellants/defendants within two months from today and in case the defendants refuse to accept the said amount, the same shall be deposited by the plaintiff with this Court within the said period.
32. The consequence of the aforesaid discussion would be to hold that there is no merit in this appeal. We, accordingly, dismiss the same.
No costs.