R.S.A.No.3650 of 2007 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
R.S.A.No.3650 of 2007
Date of Decision : 02.09.2009
Surinder Jit Singh ...Appellant
Versus
Malagar Singh ...Respondent
CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA
1. Whether Reporters of local papers may be allowed to see the
judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Mr. I.S.Ratta, Advocate,
for the appellants.
Ms. Rita Kohli, Advocate,
for the respondent.
HEMANT GUPTA, J. (ORAL)
The defendant is in second appeal aggrieved against the
judgment and decree passed by the Courts below, whereby the suit for
specific performance of an agreement to sell dated 12.6.1994, was
decreed.
The defendant-appellant entered into an agreement to sell for
his residential plot No.222, Sector 70, SAS Nagar, Mohali, after receiving
a sum of Rs.50,000/- as earnest money. The sale consideration agreed
was Rs.3,40,000/- as premium and Rs.1,50,000/- as paid up amount. The
last date for completion of the bargain was fixed on or before 15.8.1994.
At the time of agreement, the appellant had deposited Rs.60,000/- alone.
A sum of Rs.90,000/- was deposited soon after the receipt of earnest
R.S.A.No.3650 of 2007 2
money. Since, the plot was not transferred in favour of the plaintiff,
though plaintiff claims to be ready and willing to perform his part of the
contract, the present suit for permanent injunction was filed on
24.12.1994, which was later on amended to claim decree for specific
performance.
The stand of the defendant-appellant in the written statement
was that the agreement ceased to exist after 15.8.1994, as the agreement
was subject to condonation of delay in deposit of 15% of the amount and
restoration of the plot by the Department. Since, the plot was not restored
prior to 15.8.1994, the agreement stands frustrated. The defendant
communicated on 29.8.1995, 25.9.1995 and 28.5.1996 to the plaintiff that
the plot has not been restored and the agreement stands cancelled and the
plaintiff was asked to collect the money from the defendant, but the
plaintiff played hide & seek and did not receive the letters, thus, the
plaintiff is not entitled to decree for specific performance.
After considering the evidence led by the parties and Section
13 of the Specific Relief Act, 1963 (for short ‘the Act’) relied upon by the
defendant, the learned trial Court found that the condition for execution
of the agreement to sell stands fulfilled and the purchaser has a right to
get the contract make good. It has been found that admittedly the plot
stands restored. The plea of the defendant that time was essence of the
contract was not available as the lapse was on the part of the defendant,
as he failed to get the plot restored.
The learned trial Court also considered Section 20 of the Act
relied upon by the defendant to return a finding that the failure to
specifically enforce the agreement would cause unfair advantage to the
R.S.A.No.3650 of 2007 3
defendant. Consequently, the learned trial Court decreed the suit of
specific performance on payment of the remaining amount by the plaintiff
within two months of the decree.
The learned first Appellate Court dismissed the appeal filed by
the defendant-appellant. It noticed that till 15.8.1994, the appellant has
not deposited any amount over and above the payment of Rs.1,50,000/-
towards 25% of the cost of the plot. In terms of the agreement, the
appellant was to deposit 15% of the cost of plot alongwith upto date
interest and penalty, to enable him to get the possession of the plot in
question. Therefore, the appellant cannot be permitted to say that the
plaintiff is guilty of non-performance of his part of the contract. It also
found that the defendant has not produced any letters allegedly written to
the plaintiff to get the refund of Rs.50,000/-. The learned first Appellate
Court recorded that a sum of Rs.4,40,000/- was deposited by the plaintiff
within two months in terms of the judgment and decree passed by the
learned trial Court. It also recorded that the plaintiff has agreed to pay
the amount of Rs.8,78,991/- deposited by the appellant, as stated in
grounds of appeal before the first Appellate Court. The said amount was
directed by the learned first Appellate Court to be deposited within two
months of the decree of the first Appellate Court.
Before this Court, learned counsel for the appellant has
vehemently argued that the agreement to sell the plot was subject to
success of condonation. Since on or before 15.8.1994 i.e. the date of
completion of the bargain, there was no condonation, therefore, the
agreement stands frustrated.
The said argument has been considered by the learned first
R.S.A.No.3650 of 2007 4
Appellate Court and has rightly not found any favour with it. The
tentative price of the plot was Rs.6,00,000/- as per the letter of allotment
dated 3.3.1994. The appellant was to deposit 25% of the tentative price
within 30 days from the issue of the said letter. In terms of the said letter,
thus, the appellant was to deposit balance sum of Rs.90,000/- within 30
days. The balance amount was to be paid in six annual installments. The
total sale price of the plot agreed to be purchased by the plaintiff was
fixed at a profit/premium of Rs.3,40,000/- plus the paid amount of 25%
cost of the plot, amounting to Rs.1,50,000/-. The balance amount after
deducting the earnest money was to be paid by the purchaser to the seller
at the time of completion of the bargain.
The appellant was to pay 15% of the total cost alongwith upto
date interest and penalty to the Authority for getting the possession of the
plot. In terms of the agreement between the parties, it was the
responsibility of the appellant to get the plot restored having received the
earnest money and agreed to sell the plot to the plaintiff. The appellant
deposited only a sum of Rs.90,000/- without any interest and penalty
before 15.8.1994. It is the appellant, who has faulted in not making the
payment of interest and penalty to seek restoration of the plot. The
appellant cannot take benefit of his own fault. Still further, the time
cannot be said to be essence of the contract as it is not essence so in
respect of the contract of sale of immoveable property. The restoration of
the plot was not in the hands of the parties, but within the domain of
Punjab Urban Development Authority, therefore, on restoration of the
plot, the plaintiff is entitled to seek specific performance of the
agreement.
R.S.A.No.3650 of 2007 5
It may be noticed that the plaintiff has filed suit for injunction
in December, 1994, when the defendant intended to sell plot to some
other person. The letter of cancellation of the plot was received by the
appellant thereafter. The appellant has got restoration of the plot in the
year 1997 i.e. during the pendency of the suit. Therefore, the plaintiff
having sought specific performance of the agreement, the defendant
cannot be permitted to seek the frustration of the contract merely because
the plot was not restored before 15.8.1994, as the plaintiff has shown its
readiness and willingness all through.
Learned counsel for the appellant further argued that specific
performance of the agreement to sell at this stage shall cause undue
hardship to the defendant. The learned trial Court has negated the plea of
the appellant based upon Section 20 of the Act, but the appellant has not
raised any such ground in the grounds of appeal before the learned first
Appellate Court. No such argument was raised even before the learned
first Appellate Court. Before this Court, in voluminous grounds of
appeal running to 85 pages, it is not asserted by the appellant that an
argument was raised before the learned first Appellate Court that specific
performance of the agreement at this stage would cause hardship to the
appellant.
The only hardship, which is canvassed before this Court is that
the appellant has deposited more than Rs.8,78,000/- whereas the
agreement is of a payment of premium of Rs.3,40,000/- and that too on
payment of meager amount of earnest money of Rs.50,000/-. Therefore,
the execution of sale at this stage shall cause acute financial loss to the
appellant.
R.S.A.No.3650 of 2007 6
The said aspect has been taken into consideration by the
learned first Appellate Court. The entire amount deposited by the
appellant has been ordered to be deposited by the plaintiff as a condition
precedent to seek specific performance of the agreement. Even
otherwise, in terms of Explanation 1 to Section 20 of the Act, mere
inadequacy of consideration is neither an unfair advantage to the plaintiff
nor hardship to the appellant. Therefore, it cannot be said that the
agreement is causing any hardship to the appellant.
Another argument raised by the learned counsel for the
appellant that the amount of Rs.8,78,000/- was deposited by the appellant
in the year 1997, but the said amount has been ordered to be paid to the
appellant without payment of any interest.
The said argument is wholly untenable. It is plaintiff, who has
been deprived of the benefit of the agreement having paid the earnest
money in the year 1994. The appellant cannot be permitted to take
benefit of inaction in completing the bargain soon after the delay was
condoned and even when the plaintiff initiated action on the basis of
agreement in December, 1994 itself.
In view of the above, I do not find that any substantial question
of law arises for consideration by this Court in second appeal.
Dismissed.
02.09.2009 (HEMANT GUPTA) Vimal JUDGE