JUDGMENT
Page 0104
1. This is an appeal by the plaintiff against the judgment and decree dated 19th March, 2005 in O.S. 1020/1995 on the file of the I Additional Civil Judge Sr.Dn.) Bangalore Rural District, Bangalore.
2. The case of the plaintiff is that, she entered into a contract of sale on 31.3.1995 with the defendant in respect of the land measuring 1 acre 30 guntas in Sy. No. 1 of Nalluruhalli Village Krishnarajapuram hobli, Bangalore for consideration of Rs. 16 lakhs per acre. On the date of agreement, a sum of Rs. 5,60,000/- was paid towards advance and a further amount of Rs. 5 lakhs was paid on 10.6.1995. In all the plaintiff had paid Rs. 10,60,000/- to the defendant under the agreement. The defendant was required to obtain necessary clearance from the income tax authorities and also no objection from the appropriate authority under the provisions of Page 0105 Income Tax Act and the Rules made thereunder in order to finalise and complete the sale transaction.
3. It is further averred by the plaintiff, that she was always ready and willing to perform her part of contract, Plaintiff had made frequent demand for performance of the contract by the defendant, however the defendant went on postponing. Plaintiff on 31.8.1995 through a telegraphic communication requested the defendant to fulfil his obligation under the contract and further informing that the plaintiff is ready and willing to perform her part of contract. The defendant who was in receipt of the telegraphic communication called upon the plaintiff over phone and informed that he would obtain the requisite sanction needed for finalising the sale transaction and he would also place into the hands of the plaintiff the original documents of title and possession, establishing the fact of good and marketable title in favour of the defendant. On 6.9.1995 the defendant had called upon the plaintiff, inter alia informing that he would furnish all the details. It is also alleged by the plaintiff that the plaintiff had kept ready a demand draft drawn in favour of the defendant on 6.9.19995, from Vysya Bank, St. Marks Road, Bangalore for a sum of Rs. 10,60,000/- and had kept a sum of Rs.7,00,000/- cash as desired by the defendant. Though 6.9.1995 date was fixed for execution of the sale deed, defendant did not turn up at all as promised by him earlier. As such plaintiff got the demand draft cancelled on 11.9.1995. The defendant at that point of time, while deeply regretting for the inconvenience caused to the plaintiff, on 16.9.1995 agreed and undertake to complete the sale transaction during the first week of December 1995. However the defendant during the beginning of first week of November 1995 wanted the plaintiff to pay the price calculated @ Rs. 20,00,000/- per acre as against the sale price of Rs. 16 lakhs per acre. Feeling that the said demand is illegal the plaintiff did not agree to the same. Taking advantage of this, to the utter shock, surprise and dismal to the plaintiff, the defendant issued a notice of terminating the contract by making false, frivolous and baseless allegations. Thus the plaintiff filed the present suit.
4. The defendant resisted the suit by filing a written statement, inter alia admitting that he had entered into an agreement of sale dated 31.3.1995 for consideration of Rs. 16 lakhs per acre and has received Rs.5 lakhs 60 thousand on the date of the agreement. He also admitted that further a sum of Rs.5 lakhs was paid by the plaintiff on 10.6.1995 and in all a sum of Rs. 10 lakhs 60 thousand has been received by him. He also admitted that one Kupparaju the son of the plaintiff was present and assured the defendant, that the contract of sale would be completed with in the time stipulate under the contract. Defendant denied that, he was required to bring the clearance certificate from the appropriate authority and stated that it was the duty of the plaintiff to furnish a copy of the draft sale deed so as to enable the defendant to bring clearance certificate from the appropriate authority and stated that it was the duty of the plaintiff to furnish a copy of the draft sale deed so as to enable the defendant to bring clearance certificate. It is also alleged by the defendant that subsequent to 10.6.1995 neither the plaintiff nor his agent made any contact and enquired nor have made any Page 0106 enquiry even after the receipt of the legal notice. It is also alleged that the plaintiff after satisfying regarding the title of the defendant had entered into an agreement of sale. The defendant categorically denied the telephonic call and the telegraphic communication from the plaintiff and alleged that it is a false story created by the plaintiff. The defendant also denied that he was required to bring the original document on 6.9.1995 to satisfy the plaintiff and alleged that the plaintiff only after seeing the original document has paid the advance amount and had retained the xerox copy. It is further alleged by the defendant that, as per the terms of the contract in Clause 5 (c) and (a), the original documents were required to be handed over only at the time of registration of the sale deed. The defendant also denied the alleged readiness and willingness on the part of the plaintiff, he further alleged that the plaintiff was having a sum of rupees 7 lakhs on 6.9.1995 is misleading and stated that the plaintiff was never ready and willing to perform her part of contract. Defendant also denied the allegation, that he had made a demand of Rs. 20 lakhs per acre and alleged that the plaintiff having failed to comply with the terms of the agreement and to pay the balance of sale consideration in time, has now come up with a false story. He also alleged that the conduct of the plaintiff clearly shows that she did not come forward to get the sale deed registered due to lack of fund and also reasons best known to her. On these and other allegations, the defendant resisted the suit.
5. The trial Court based on these pleadings framed the following issues:-
1. Whether the plaintiff proves that he is ready and willing to perform his part of the contract under the agreement of sale dated 31.3.1995 but the defendant refused to execute regular sale deed as alleged in the plaint?
2. Whether the defendant proved that the plaintiff has failed to comply the terms of the agreement and failed to pay balance sale consideration amount in-time and committed default and thereby the agreement dated 31.3.1995 came to be void and enforceable as alleged in the written statement?
3. What relief the plaintiff is entitled?
4. What order and decree?
6. Before the trial Court on behalf of the plaintiff one Kupparaju, who is son of the plaintiff, was examined by P.W. 1 and Exs. P. 1 and P.2 were marked in his evidence. The defendant got himself examined as D.W.I and got marked Exs. D. 1 to 4.
7. The trial Court on appreciation of the evidence held that the plaintiff has failed to prove her readiness and willingness to perform her part of contract. It further held that the defendant failed to prove that the agreement dated 31.3.1995 became void and unenforceable as alleged in the written statement. On these findings, the trial Court partly decreed the suit by ordering refund of earnest money deposit of Rs. 10 lakhs 60 thousand within 3 months with interest at the rate of 6%.
8. It is this judgment and decree, which is called in question by the plaintiff. On behalf of the plaintiff, the learned Counsel Sri R.L. Patil, submitted that Page 0107 there is no dispute as regards to the execution of the agreement by the defendant. Referring to Ex.P.2, the agreement of sale, the learned Counsel submitted that even though the agreement is dated 31.3.1995 the advance amount was paid on 7.4.1995. He farther submitted that the fact that the advance amount of Rs.5 lakhs 60 thousand was paid on 7.4.1995, clearly shows that the time was not essence of the contract. Referring to Clause (3) of the agreement, he submitted that the plaintiff was only required to pay the balance of sale consideration, at the time of the registration of the sale deed and handing over the possession of the suit schedule property. Referring to this clause the learned Counsel submitted that there is no obligation on the part of the plaintiff except paying the balance of sale consideration at the time of the registration of the sale deed, however without there being any obligation on the part of the plaintiff to pay the part of sale consideration still plaintiff paid another sum of Rs. 5 lakhs on 10.6.1995 only to ensure his readiness and willingness to perform her part of contract.
9. Nextly he submitted that, under Clause (4) of the agreement, the time to complete the sale transaction is fixed as 5 months and within that time, he had telephoned to the vendor to make out his marketable title to the schedule property and take necessary clearance certificate from the Income Tax Authority under the Income Tax Act. Strongly relying on this clause, he submitted that the time is not an essence of the contract, fixation of time of 5 months for completing the sale transaction is subject to the defendant fulfilling his part of the contract by making out marketable title and also obtaining necessary No Objection Certificate from the Income Tax Authorities, In this regard, he referred to Section 230-A of the Income Tax Act and submitted that the defendant was required to obtain a necessary certificate from the Income Tax Authority. Under Section 230-A of the Income Tax Act, it is the vendor, who has to apply for the clearance certificate and not the plaintiff, and no draft sale deed was required to be furnished by the plaintiff for the purpose of getting the Income Tax Clearance. It was the obligation of the defendant to get the necessary certificate by making application along with draft sale deed. He also submitted that, Clause (4) of the agreement makes it clear that the defendant was required to obtain clearance from the Income Tax Authorities within the stipulated time and still he gets such a certificate, there was no obligation on the part of the plaintiff to perform her part of contract In this regard, the learned Counsel relied on the judgment in the matter of Shantha Bai Prabhu v. Shahul Hameed which is also referred to by the trial Court also. Relying on this judgment he submitted that Section 230-A of the Income Tax Act does not require the purchaser to furnish a draft sale deed to the vendor. It also does not preclude the vendor from drafting the sale deed and producing it before the authority for securing the income tax clearance certificate. He further submitted that the plaintiff had no role either to prepare the draft sale deed or to furnish it to the Income Tax Authority and even not furnishing of this draft sale deed did not preclude the defendant from obtaining the Income Page 0108 Tax Clearance, which is mandatory in terms of Clause (4) of the agreement.
10. Nextly, he referred to Clause (5) of the agreement and submitted that the defendant was under the obligation to make out the marketable title to the schedule property as stated in Clause (5) Sub-clause (c). He also relied on Clause (6) of the agreement and submitted that, in terms of tile contract, the defendant is under an obligation to make out a marketable title. Till such compliance is done by the defendant, the plaintiff was not required to perform her part of contract and the plaintiff was only required to pay the balance of sale consideration at the time of the registration of the sale deed and not before the said date.
11. Referring to these clauses, the learned Counsel submitted that, admittedly in this case, the defendant has failed to make out his marketable title to the schedule property and has also failed to produce the Income Tax Clearance Certificate under Section 230-A of the Income Tax Act In the absence of these documents, there is no obligation cast upon the plaintiff to perform her part of contract. Relying on these clauses, the learned Counsel further submitted that the defendant was under the obligation to get the certificate, and without there being a certificate, no sale transaction would have been completed in law. He further submitted that the defendant has failed to perform his part of contract and thereby, he cannot allege that the plaintiff was not ready and willing to perform her part of contract.
12. The learned Counsel further submitted that the plaintiff was always ready and willing to perform her part of contract and in this regard, the plaintiff not only paid a sum of Rs. 5 lakhs 60 thousand at the time of the agreement, but also paid further sum of Rs. 5 lakhs subsequent to the agreement and the payment of Rs. 10 lakhs 60 thousand clearly establishes the financial capacity of the plaintiff and her readiness to perform her part of contract. In support of this the learned Counsel referred to the cross examination of D.W. 1 at page 48 of the paper book and pointed out that the defendant has received a sum of Rs. 10 lakhs 60 thousand; before 31.8.1995 however the defendant had not shown that he was ready and willing to perform his part of contract. He also pointed out from the evidence of D.W. 1 that there was no requirement of plaintiff furnishing the draft sale deed. He further submitted that as per the terms of the contract, the defendant had not furnished the original title deeds to the plaintiff. He also pointed out from the cross examination of D.W.1 and submitted that D.W. 1 has admitted, that he is not aware as to whether the plaintiff was ready and willing to perform her part of contract. He further submitted that the defendant only pleads ignorance as to whether the plaintiff had obtained the D.D. for the balance of sale consideration. By relying on the cross examination of D.W.1, the learned Counsel for the appellant submitted that the defendant clearly admits, that he was required to comply with the terms of the contract by providing a marketable title of the suit schedule property, and further the defendant had not made any attempt to call upon the plaintiff before 31.8.1995. Relying on the evidence of D.W.1, the learned Counsel submitted that, unless the defendant furnished the Income Tax Clearance Certificate, the plaintiff could not have got the sale deed executed in her favour.
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13. The learned Counsel referred to Section 16 of the Specific Relief Act and pointed out that, it is not essential for the plaintiff to show money to the defendant or deposit the same in the Court unless she is so directed by the Court. The learned Counsel further submitted that, under the terms of the contract unless the defendant fulfilled his obligation, the question of the plaintiff performing her part of contract does not arise. In this regard, the learned Counsel for the appellant relying on the judgment in P.D. ‘Soijza v. Shondrilo Naidu therein, submitted, that unless the defendant gets necessary clearance from the Income Tax Department in terms of Clause (4) of the agreement, the question of plaintiff’s readiness and willingness to perform her part of the contract does not arise. He also relied on the judgment reported in E.S. Rajan v. R. Mohan { [Headnote-(B)]} and submitted that, to prove the readiness and willingness, it is not necessary for the plaintiff to produce the requisite funds, except showing her capacity to raise or her capacity to perform her part of contract by paying the balance of sale consideration. He also pointed out that, in terms of the agreement of sale, the time would not be the essence of the contract as the parties had not intended to fix the time as essence of contract and submitted that the same is clear from the terms of the agreement. He also submitted that in case of contract of sale of immovable property, time would not be essence of contract. Relying upon the judgment reported in Aniglase Yohannan v. Ramlatha he submitted that fixing of time in agreement does not by itself make the time as essence of the contract. Relying upon the judgment reported in Surya Narain Upadhyaya v. Ram Roop Pandey he further submitted that even in case of plaintiff not paying sufficient Court fee, same would not amount to plaintiff not ready and willing. Referring to this decision, the learned Counsel submitted that the Apex Court even in the case of plaintiff’s failure to pay sufficient Court fee has held that the same would not amount to plaintiff not ready and willing to perform his part of contract. He submitted that the readiness and willingness has to be appreciated based on the evidence on record. Though Section 16 of the Specific Relief Act mandates that the plaintiff is required to plead and prove her readiness and willingness to perform her part of contract, that does not mean that the plaintiff should produce the actual cash or deposit the same in Court to prove her readiness nor it requires the plaintiff to show that she has sufficient money. What is required under Section 16 of the Specific Relief Act is that the plaintiff should plead that she is ready and she has capacity to arrange the necessary amount and she has willingness to perform her part of contract. He also pointed out from the evidence of P.W. 1 that the plaintiff had made arrangements for the balance of sale consideration.
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14. Nextly he contended that during the pendency of the suit i.e., in the year 2005 the plaintiff had deposited the balance of sale consideration, only to show her readiness and willingness to perform her part of contract The learned Counsel in support of his contention referred to para-5 of the plaint, to show that the appellant has specifically pleaded that she is ready and willing to perform her part of contract and in support of the same she has led the evidence in proof of her case, that she is always ready and willing to perform her part of contract, P.W.1 has categorically stated that he had kept an amount of Rs. 17 lakhs 40 thousand during 10.6.1995 to 31.8.1995. With these contentions, the learned Counsel for the appellant submitted that the trial Court ought not to have refused the decree for specific performance.
15. Sri Jayakumar S. Patil, learned Senior Counsel appearing for the defendant, per contra submitted that the agreement in question is not in dispute. However in order to seek decree for specific performance of contract, the plaintiff must plead and prove that, she is always ready and willing to perform her part of contract. The learned Senior Counsel, submitted that the plaintiff has utterly failed to show her readiness and willing to perform her part of the contract and in support of this, he referred to the pleadings in the plaint at paragraph-5 wherein the plaintiff has stated that she had made a demand to the defendant to perform his part of contract under the agreement of sale within the stipulated time but the defendant was postponing the performance of his part of contract under the agreement. By referring to allegation in paragraph-5, the learned Senior Counsel submitted that though the plaintiff comes out with a specific plea that he had offered the payment of balance sale consideration in terms of the contract within the stipulated time, but has not produced any evidence in support of his plea.
16. Nextly, the learned Counsel for the appellant pointed out from the same para that the plaintiff has stated that she issued a telegraphic communication to the defendant and the defendant has received the same and had postponed the performance of the contract, though such a statement is made in the plaint, but plaintiff has not produced any evidence to show that she had issued the telegram or called upon the defendant to perform his part of contract. He also pointed out that as per the averments in paragraph-5 of the plaint, the plaintiff has alleged that he had purchased the demand draft for a sum of Rs. 10 lakhs and 40 thousand and had also kept a sum of Rs. 7 lakhs in cash ready. However in support of his pleadings, plaintiff has neither produced the demand draft nor any other evidence to prove the same. By referring to the pleadings, the learned Senior Counsel submitted that the plaintiff, who comes before the Court with a specific allegation that she has called upon the defendant to perform his part of contract in order to show her readiness and willingness, has failed to prove the same by leading evidence. He further submitted that except making statement in the plaint, plaintiff has not produced any evidence, Section 16 of the Specific Relief Act requires that plaintiff to plead and prove her readiness and willingness. He further submitted that plaintiff has neither produced proof of any telegram alleged to have been issued to this defendant nor the proof of any telephone call alleged to have been made to this defendant, in turn it is this defendant, Page 0111 issued the legal notice on 6.11.1995 to the plaintiff after the expiry of the stipulated period under the agreement, and even after receipt of the said notice also, plaintiff has not replied. He further submitted that the averment made in para 5 of the plaint is not supported by any evidence.
17. The learned Senior Counsel further submitted that under the agreement, the sale transaction is required to be completed within 5 months. However the plaintiff had not shown his willingness to get the sale transaction within 5 months. In this regard, he referred to the evidence of P.W. 1 and pointed out that plaintiff has not even called up the defendant either before the expiry of time stipulated under the agreement or even after the expiry of the time, in turn it is the defendant who had issued the legal notice on 6.11.1995 cancelling the contract, and it is only after the legal notice by the defendant, the suit is filed.
18. The learned Senior Counsel referred the pleadings in the written statement, and point out that the originals of the title deeds were shown to the plaintiff and it is only after the satisfaction, the plaintiff entered into an agreement and further pointed out from the written statement that the defendant had never made any demand of Rs. 20 lakhs per acre as against consideration as agreed under the agreement of sale.
19. As regard to the obtaining of clearance certificate under Section 230A of the Income Tax Act, he submitted that the plaintiff, who had agreed to prepare draft sale deed and give it to defendant had not furnished the same to the defendant and on account of plaintiffs failure the certificate could not be obtained. This is also admitted by the P.W.1 in his evidence. In this regard, the learned Senior Counsel referred to the admissions of P.W.1 and pointed out that the compliance of Clause (4) of the agreement was dependent upon the furnishing of the draft sale deed by the plaintiff herself. In this regard, he referred to the evidence of P.W. 1 at page 31 of the paper book to show that the plaintiff has admitted that
…it is true there was difference in the amount as mentioned in the sale agreement and to be shown in the sale deed.
He also pointed out from the evidence of P.W. 1 that in the year 1995 the market value fixed for registration of the suit property was less than Rs. 5 lakhs for the total extent. Referring to his evidence, the learned Senior Counsel submitted that the sale consideration as agreed under the agreement was not the consideration to be shown in the sale deed and it is for this reason plaintiff wanted to prepare the draft sale deed to be presented to income tax authorities and this is admitted by the P.W. 1. P.W. 1 in his evidence has admitted that the draft sale deed was prepared and was sent to the defendant In this regard, by referring to the evidence of P.W. 1, he submitted that P.W. 1 admits that he had sent the draft sale deed 15 days earlier to the closing of the date fixed under the agreement. Though the plaintiff admits that she had prepared the draft sale deed and sent the same to the defendant, but the plaintiff has neither produced the copy of the draft sale deed nor has proved that she has sent the draft sale deed to the defendant. Relying on this evidence, the learned Senior Counsel submitted that since the plaintiff wanted to show different sale consideration in the sale deed, the plaintiff Page 0112 was required to prepare the draft sale deed and send it to the defendant He further submitted that, the plaintiff admittedly has not sent the draft sale deed and defendant waiting till the expiry of the stipulated time, was forced to issue a legal notice dated 6.11.1995, cancelling the agreement as the plaintiff did not take any interest to comply with the terms of the contract He further submitted that it is only after the defendant issued the notice of the termination of the contract, the plaintiff filed the suit. From the evidence of P.W.I, the learned Senior Counsel also pointed out that the plaintiff has admitted that from the date of the agreement till the filing of the suit, she has not issued notice to the defendant calling upon to perform his part of contract.
20. The learned Senior Counsel further submitted that even assuming that the defendant was under the obligation to get the clearance certificate as required under Section 230-A of the Income Tax Act, that will not absolve the plaintiff from proving her case of readiness and willingness to perform her part of contract under Section 16 of the Specific Relief Act. In support of his contention, the learned Senior Counsel submitted that even if the defendant has failed to perform his part of contract within the stipulated time, it was the duty of the plaintiff to call upon the defendant to perform his part of contract. In this case, he pointed out that, admittedly the plaintiff has neither issued any notice nor has called upon the defendant to get the clearance certificate nor has taken any steps to get the sale transaction completed either within the stipulated time or even thereafter also.
21. Nextly, he contended that in the cross-examination of the P.W. 1, a suggestion has been made that the plaintiff is doing the real estate and is in the habit of keeping the sale agreement alive. As far as the contention of the plaintiff that she had kept the money ready, the learned Senior Counsel referring to Ex.D. 1 pointed out that even according to the bank statement, there was no money deposit as alleged by the plaintiff between 10.6.1995 to 30.1.1996 and further pointed out that during the period of five months from the date of agreement, there was no such deposit of amount as alleged.
22. In this regard he also pointed out from the evidence of P.W.1 wherein he has admitted that the defendant had made repeated demands for the payment of balance and to get the sale deed registered. By referring to this admission in the evidence of P.W.1, the learned Senior Counsel submitted that it clearly reveals that not only the plaintiff was not ready and willing to perform her part of contract but was only interested in keeping the agreement alive.
23. The learned Senior Counsel relied on the another circumstance to show that the plaintiff was not ready and willing to perform her part of contract by pointing out that this plaintiff had filed similar suit against the defendant’s wife, in respect of another agreement of sale executed by the wife of the defendant, wherein a decree was passed in favour of this plaintiff and the plaintiff despite of the decree, he did not choose to deposit the balance of the sale consideration and thereafter, it is the defendant’s wife, who was forced to file an application under Section 28 of the Specific Relief Act, for cancellation of the decree and the said decree was cancelled. He submitted that this clearly reveals that she had no sufficient resources to pay the Page 0113 balance of sale consideration. He also submitted that though the plaintiff in her pleadings has stated that she had kept a demand draft for sum of rupees ten lakhs and forty thousand ready and also had got cash of rupees seven lakhs in her hand. However, no such proof of demand draft or bank deposit or cash has been produced by the plaintiff. Thus the plaintiff who has pleaded that she is ready and willing to perform her part of contract by specifically mentioning that she had got demand draft and cash of Rs. 7 lakhs ready has not proved the same by producing necessary evidence. He further submitted that the case of the plaintiff that she has got sufficient funds is also not believable and she has utterly failed to prove the same.
24. The point that arises for consideration in this appeal is,
Whether the plaintiff has proved her readiness and willingness to perform her part of contract in terms of Section 16 of the Specific Relief Act?
25. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the Court, which discretion requires to be exercised according to settled principle of law in terms of the provisions of Section 20 of the Specific Relief Act 1963 (in short ‘Act). Section 16 Clause (c) of the Act envisages that the plaintiff must plead and prove that he had 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 those terms of the performance of which has been prevented or waived by the defendant.
26. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance, this is required to be considered by the Court: while granting or refusing to grant the relief. If the plaintiff fails to aver or to prove the same, he must fail. To adjudicate whether the plaintiff is always ready and willing to perform his part of contract, the Court must take into consideration, the conduct prior and subsequent to the filing of the suit along with the other attending circumstances.
27. It is also well settled law that readiness to perform the contract means the capacity of the plaintiff to perform the contract, which includes his financial position to pay the purchase amount. The willingness to perform the contract on the part of the plaintiff has to be determined on the basis of the conduct of the plaintiff on proper scrutiny. It is also well settled law that in a suit for specific performance, the burden of proving the readiness and willingness to perform his part of contract is entirely on the plaintiff and he cannot succeed in his claim for a decree of specific performance by establishing that the vendor – defendant was avoiding to perform the contract. Defendant’s failure to perform his part of contract is the cause for the suit, but to succeed in the suit, plaintiff has to prove his readiness and willingness.
28. Readiness required to be proved by the plaintiff, regarding his financial ability at relevant point of time. Mere desire does not amount to willingness to perform the contract, genuine willingness is required to be proved like any other fact. The circumstances may justify an inference that the assertion of the plaintiff as to his willingness is made verbal assertion and as a fact his conduct may disclose that he was really interested in procrastinious.
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29. Section 16(c) of the Act reads as under:
16. Personal bars to relief. – Specific Performance of a contract cannot be enforced in favour of a person –
(a)…
(b)…
(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
In order to prove the readiness and willingness to perform his part of contract, the plaintiff must aver and prove the same.
30. It is in this context, it is relevant to notice the pleading as regards to the readiness and willingness on the part of the plaintiff. Plaintiff in para-5 of his pleading has stated as under:
5. The plaintiff who has always been ready and willing to perform her part of the contract under the agreement of sale dated 31.3.1995 (Thirtyone-three-Nineteen ninety five) inasmuch as to pay to the defendant the balance of sale consideration due and payable by her and to obtain from the defendant a proper Deed of Conveyance in respect of the land which is the subject matter of the agreement of sale dated 31.3.1995 (Thirtyone-three-Nineteen ninety five), executed and registered in her favour, demanded of the defendant the performance of his part of the contract under the agreement of sale before the stipulated time. The defendant, however, went on postponing the performance of his part of the contract under the agreement of sale dated 31.3.1995 (Thirtyone-three-Nineteen ninety five) on some reason or the other.
On 31.8.1995 (Thirtyone-eight-Nineteen ninety five), the plaintiff, through a Telegraphic communication wanted the defendant to fulfil the left over obligations cast upon him under the agreement of sale dated 31.3.1995 (Thirtyone-three-Nineteen ninety five) and to complete the sale transaction as the plaintiff is ready and willing to perform her part of the contract under the agreement of sale dated 31.3.1995 (Thirtyone-three-Nineteen ninetyfive) inasmuch as to obtain from the defendant a proper Deed of Conveyance executed and registered in respect of the land in question by paying to the defendant the balance of sale consideration due and payable by her. The defendant who was in respect of the telegraphic communication, called the plaintiff over phone and kept the plaintiff informed to the effect that, he would obtain the requisite sanction needed for finalising the sale transaction and that he would also place into the hands of the plaintiff the original documents of title and possession, establishing the fact that, the defendant has a good and marketable title in respect of the land in question and that, on 6.9.1995 (six-nine-nineteen ninety five), the sale transaction could be completed and that the plaintiff has to pay to the defendant a sum of Rs. 10,40,000/- (Rupees Ten lakhs forty thousand) through a crossed Account payee D.D. drawn in his favour and the balance of sale consideration of Rs. 7,00,000/-(Rupees seven lakhs) has to be given to him by Page 0115 cash. The plaintiff, thereafter, on 6.9.1995, purchased the Demand Draft in the name of the defendant from the Vysya Bank, St. Mark’s Road Branch, Bangalore, for a sum of Rs. 10,40,000/-(Rupees Ten lakhs forty thousand), kept a sum of Rs. 7,00,000/- (Rupees Seven lakhs) cash ready as desired by the defendant, in all readiness to obtain from the defendant a proper Deed of Conveyance in respect of the land in question in her favour executed and registered in the jurisdictional Sub-Registrar’s office. However, for the reasons best known to him, the defendant did not turn up at all on 6.9.1995 (six-nine-Nineteen ninety five) as promised by him earlier. The efforts made by the plaintiff to contact the defendant not only on 6.9.1995 (six-nine-Nineteen ninety five) but also for the next few days, thereafter, were in vain. On 11.9.1995, the plaintiff got the D.D. obtained earlier in the name of the defendant cancelled on payment of the cancellation fee.
31. From the averments made in paragraphs-5, 6 and 7, it is clear that the specific case of the plaintiff is that, plaintiff demanded the defendant for performance of his part of contract under agreement of sale before the stipulated time. The defendant, however, went on postponing the performance of his part of contract under the agreement. She has also averred that she had issued a telegraphic communication asking the defendant to fulfil left over obligation cast upon him under the agreement. The plaintiff has further averred that defendant was in receipt of telegraphic communication and called upon the plaintiff over the phone and informed to the effect that, he would obtain the requisite sanction needed for finalising the sale transaction and that he would also place into the hands of the plaintiff the originals of the title deeds to make a good marketable title and stated that on 6.9.1995, the sale transaction would be completed. It is further averred that an amount of Rs. 10,40,000/- was kept ready by way of Demand Draft and Rs. 7,00,000/- was kept ready by way of cash. Further plaintiff has averred that the defendant had regretted for not completing the sale transaction on 6.9.1995 and agreed to complete the sale transaction by December 1995. In the light of these averments, it is necessary to look into the evidence of the plaintiff.
32. Though the plaintiff has not entered the witness box, her son namely, K.V. Kuppuraju is examined as PW-1, who is also the holder of General Power of Attorney. It has come in the evidence that PW-1 was present at the time of execution of the agreement and he has personal knowledge of the contract, even taking into account the evidence of PW-1, it is necessary to find out as to whether the plaintiff has proved her case as pleaded in the plaint by leading evidence.
33. In the examination-in-chief itself, PW-1 states that:
I submit that plaintiff demanded of the defendant to perform of his part of the contract under the Agreement of Sale before the stipulated time. However, the defendant went on postponing the performance of his part of the contract, on some reasons or the other.
From this evidence in the examination-in-chief, it is clear that the plaintiff’s specific case as pleaded and as per the evidence is that she demanded the Page 0116 performance of the contract on the part of the defendant before the stipulated time. Under Clause (4) of the agreement Ex.P2 dated 31.3.1995, the time was stipulated as five months. Thus, the plaintiff, who has pleaded and has stated in the evidence that she made a demand for performance of the contract on the part of the defendant, within stipulated time, was required to establish the same. But the plaintiff has not produced any document in proof of the said statement. Hence, this remain as a bare pleading and oral statement without any support or proof of the same.
34. In the pleading, the plaintiff has stated that on 31.8.1995, through telegraphic communication, she had asked the defendant to fulfil his left over obligation and it is also stated that telegraphic communication was received by the defendant. In support of the pleading, PW-1 also in his evidence at para-8 states as under:
8. I submit that on 31.8.1995, the plaintiff through a telegraphic communication, wanted the defendant to fulfil his left over obligation cast upon him and to complete the sale transaction, as the plaintiff is ready and willing to perform her part of the contract. The defendant, who was in response to the telegraphic communication, called the plaintiff over phone and kept the plaintiff informed to the effect that he would obtain the requisite sanction needed for finalisation of sale transaction . . . .
This statement clearly shows that the plaintiff has issued a telegraph on 31.8.1995. If this is the statement of the plaintiff, then there should have been an evidence in support of the same. No documentary evidence or any other evidence has been produced by the plaintiff to show that such a telegram has been issued by the plaintiff to the defendant and the defendant had agreed to complete the sale transaction by getting the requisite sanction. This statement also remained as bare statement without any proof.
35. PW-1 in the examination-in-chief itself has further stated that plaintiff had purchased a Demand Draft for Rs. 10,40,000/- and had kept a sum of Rs. 7,00,000/- ready. Though the said statement is pleaded and has also been stated in the examination-in-chief, but the same is not supported by any documentary evidence. No proof of alleged statement of purchase of DD for Rs. 10,40,000/- is produced nor proof in regard to the cash in hand to the extent of Rs. 7 lakhs was established. This also remained as a bare statement without any proof. The plaintiff has further averred and also stated in the examination-in-chief that the defendant had agreed to complete the sale transaction on 6.9.1995 and on 6.9.1995, on account of inconvenience, the defendant could not complete the sale transaction and further agreed to complete it before December 1995. Except this bare statement in the pleading and the evidence of PW-1, nothing in support of the same is produced or established. In turn, it is admitted in the examination-in-chief that the defendant had issued a notice terminating the contract.
36. Thus, from the pleading and the evidence in the examination-in-chief of PW-1, it is clear that the plaintiff though pleaded that she had shown her readiness and willingness by calling upon the defendant to complete the sale transaction before the stipulated time and also pleaded that she had Page 0117 ready cash, the said statement is not proved or established by any document or by any other evidence.
37. Thus, from the pleading and the evidence of PW-1, it is clear that the plaintiff has neither proved that she has made any demand before the stipulated time nor has proved that the amount stated in the pleading and the evidence was available with her nor has proved that the defendant had agreed to execute sale deed dated 6.9.1995.
38. Learned Counsel for the appellant strongly relied on Clause-4 of the agreement, which reads as under:
The parties have agreed to finalise the sale transaction within a period of FIVE MONTHS, subject to the vendor, making out her marketable title to the Schedule Property and taking necessary clearance from the Income Tax Authorities or “No Objection Certificate* from the appropriate authority under Income Tax Department.
Relying on this clause, learned Counsel had submitted that as long as the defendant does not get the necessary clearance from the Income Tax Authorities, there remains nothing for the plaintiff to perform the contract and the plaintiffs readiness and willingness would arise only after the defendant gets the clearance from the Income Tax Authorities. In order to test as to whether the plaintiffs readiness and willingness would arise only after the defendant obtains the clearance certificate from the Income Tax Authorities or not, it is necessary to notice the relevant evidence led on behalf of the plaintiff by examining PW-1. PW-1 in the cross-examination has stated as under:
…It is true there was a difference in the amount as mentioned in the sale agreement and to be shown in the sale deed. It is true in the years 1995 the market value fixed for registration purpose of the suit property was less than Rs. 5,00,000/- for the total extent. It is not true to say that in 1995 if the value of the property is less than Rs. 5,00,000/- income tax clearance was not required. I have got document to show that the income tax clearance was required for the property valuing more than Rs. 2.5 lakhs in 1995. I had sent draft sale deed to the defendant through my agent asking him to get the income tax clearance, but I have not issued any notice in writing. Now I do not remember the exact date of sending my agent with draft sale deed to the defendant, but it was 15 days earlier to closing of the date fixed in the said agreement. I have not produced that draft sale deed sent to the defendant. I had not replied to the defendant for having sent the draft sale deed for approval of the defendant, but I had told him orally. . . .
From the cross-examination of PW-1, it is clear that the amount mentioned in the agreement is not to be shown in the sale deed and it is also the specific case of the plaintiff that she had prepared a draft sale deed and had sent the said draft sale deed through her agent before 15 days of the expiry of the time stipulated under the agreement. Thus, from the evidence of PW-1, it is clear that it is the plaintiff had undertaken to prepare a draft sale deed. At the relevant time, clearance from Income Tax Authorities was required in terms of Section 230-A of the Income Tax Act.
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39. In this regard, learned Counsel for the appellant had relied on a decision reported in ILR 1990 Kar 4407 in the matter of Shantha Bai Prabhu v. Shahul Hameed and submitted that the permission required under Section 230-A does not warrant or require the purchaser to sign the form. There is no column pertaining to the purchaser nor is he required to sign the Form. The application is required to be filed only by the transferor and it is the responsibility of the transferor. The statute does not require that purchaser as a part of contract, should furnish the draft sale deed to the vendor. Failure on his part will not preclude the vendor from drafting the sale deed and producing it before the Income Tax Authorities to secure Income Tax Clearance Certificate.
40. By relying on this decision, learned Counsel for appellant had submitted that, it is purely the responsibility of the vendor to obtain a clearance certificate from Income Tax Authorities as has been agreed under Clause-4 of the agreement. He further submitted that non-sending of draft sale deed does not preclude the vendor from obtaining the necessary permission from the Income Tax Authorities. There is no doubt as to the principle laid down in the above referred decision and it is also not necessary for the purchaser to prepare a draft sale deed.
41. But in this case, it is necessary to find out whether the vendor was to prepare a draft sale deed or not and also to find out as to what is the understanding between the parties as regards to preparation of the draft sale deed. As noticed by us from the cross-examination of PW-1, plaintiff had not intended to mention the sale consideration in the draft sale deed as agreed under the agreement of sale. PW-1 has admitted that different price was to be shown in the draft sale deed. PW-1 has stated that plaintiff had prepared the draft sale deed and sent it to the defendant. This evidence of PW-1 clearly shows that though the responsibility of obtaining the requisite permission under Section 230-A of the Income Tax Act was on the defendant, but the plaintiff had undertaken to prepare a draft sale deed and send it to the defendant for approval to enable the defendant to obtain necessary permission. Though in the evidence of PW-1, it. is stated that he had sent the draft sale deed before expiry of the stipulated time, however, neither it is produced nor proved the same by leading any other evidence in proof of the same.
42. It is admitted by PW-1 that plaintiff had undertaken to prepare a draft sale deed, unless the plaintiff establishes that she had sent such a draft sale deed, the compliance of Clause-4 of the agreement by the defendant does not arise. If the plaintiff herself had not prepared the draft sale which she had undertaken, the question of defendant getting the requisite permission does not arise. For getting the requisite permission under Section 230-A of the Income Tax Act, a draft sale deed is required to be enclosed along with the form. Thus, the plaintiff admittedly has failed to prove that she had sent the draft sale deed to the defendant. Plaintiff cannot allege against the defendant of non-compliance of Clause-4 of the agreement.
43. In order to know as to whether the plaintiff is ready and willing to perform her part of contract, the conduct of the plaintiff is also required to be noticed. Page 0119 Throughout in the pleading and the evidence, though the plaintiff pleads that she had shown her readiness and willingness, but does not prove the same. The conduct of the plaintiff only shows that she had only verbal desire and really she had no genuine interest in performing her part of contract.
44. This is also evident from further admissions made by PW-1 inasmuch as PW-1 admits as under:
…It is true since the defendant had asked us number of times to pay him the balance consideration amount and to get registered sale deed and as we did not pay him, he got issued legal notice on 6-11-1995 canceling the agreement….
This clearly establishes that it is the defendant, who was insisting for completion of sale transaction and demanding the balance of consideration amount and plaintiff did not pay.
45. From the evidence, it is clear that after the agreement, the plaintiff had not issued any notice or claimed for performance of the contract on the part of the defendant and in turn, after the lapse of stipulated period, it is the defendant, who issued a notice on 6.11.1995 canceling the agreement. The plaintiff admits that from 31.3.1995 till 31.8.1995, plaintiff had not asked the defendant in writing to take the balance of sale consideration and to execute the registered sale deed.
46. PW-1 has stated that the draft sale deed was prepared by the plaintiff and was sent through an agent namely, Krishna Reddy. Nothing prevented the plaintiff from examining Krishna Reddy to prove the draft sale deed was sent to the defendant. In this context, the learned Counsel for the appellant – plaintiff, relied on the evidence of the DW-1 in the cross-examination to show that there is no clause, which requires the plaintiff to prepare a draft sale deed. It is true that agreement does not state as to who should prepare a draft sale deed, but it is clear from the evidence of PW-1 that it is the plaintiff, who was to prepare the draft sale deed stipulating the sale consideration different from one agreed under the agreement. It is also not in dispute, that in order to enable the defendant to obtain Clearance Certificate from the Income Tax Authorities, a draft sale deed is necessary and in the light of the different amount to be stated in the sale deed, it is the plaintiff, who admitted that she prepared the draft sale deed and sent the same to the defendant. If the parties have understood that the draft sale deed was to be prepared by the plaintiff alone and if it is not prepared and not sent to the defendant, alleging that the defendant did not get the permission from the Income Tax Authorities, is devoid of merit and not acceptable.
47. Learned Counsel for the appellant also referred to a decision in the matter of P.D’ Souza v. Shondrilo Naidu to support his contention, that unless the defendant has performed his part of the contract, the performance of contract by the plaintiff does not arise. It may be necessary to refer to the facts of the said decision. In the said decision, the plaintiff had not only paid the substantial sale consideration amount, but had also paid the amount towards the expenditure that may be incurred by the defendant in obtaining a certificate under Section 230A of the Income Tax Act and to this effect, the plaintiff in the said case has not only averred but has proved Page 0120 that he had made several attempts by demanding the defendant to get the permission from the Income Tax Authority and in this regard, he had even paid the expenditure required to be incurred by the defendant in obtaining the said permission. The plaintiff had also issued notice to the defendant on several occasions to complete the sale transaction and had insisted to get the Income Tax Clearance Certificate. However, the facts of this case are totally different and in this case, it is admitted by PW-1 that it is the defendant, who was making repeated requests. It is also admitted by PW-1 that till the defendant issued notice on 6.11.1995, the plaintiff had not called upon the defendant to execute the sale deed or even had not called upon the defendant to obtain Income Tax Clearance Certificate. It is also on record that from the date of agreement till the filing of the suit, the plaintiff had not at all demanded for the fulfillment or performance of the contract by the defendant and it is also in the evidence that, it is only the defendant, who issued the notice canceling the agreement waiting till the expiry of the time stipulated under the agreement.
The case referred to by the learned Counsel for the appellant is not applicable to the facts of this case.
48. As stated above, if at all the plaintiff was keen of performance of the contract on her part, she ought to have called upon the defendant to perform his part of contract before the expiry of the stipulated period under the agreement. In fact, in this case, plaintiff though avers that she had called upon the defendant to perform his part of contract, but has not proved the same.
49. Learned Counsel for the appellant had also relied on another decision in the matter of Sybd Dastagir v. T.R. Gopalakrishna Setty. In the said case, the Apex Court on consideration of the evidence and material on record had found that the plaintiff was ready and willing to perform his part of contract. The only contention that was raised in the said case was that the plaintiff, who had paid the deficit court fee, is not ready and willing to perform his part of the contract. It may be noticed that the deficit court fee referred to in the said case was of Rs. 120/- and the suit was dismissed only on the ground of non-payment of Rs. 120/-. The Apex Court found that the dismissal of the suit holding that the plaintiff has not proved his ready and willingness only on the ground of non-payment of deficit court fee was not justified. As far as readiness and willingness of the plaintiff in that case is concerned, the plaintiff had paid substantial amount and had also deposited the balance of sale consideration. As such, the said decision is also not applicable to the facts and circumstances of this case.
50. The learned Counsel also relied on another decision reported in ILR 1995 Kar 492. The said case also on facts is distinguishable wherein defendant had issued a notice to the plaintiff even before the expiry of the stipulated time under the agreement and immediately, the plaintiff had informed Page 0121 that he is ready and willing to perform his part of contract and also had informed that he is ready with cash. Admittedly, the stipulated time under the agreement had not expired in the said case. As such, the decision referred to by the learned Counsel for the appellant, on facts, is not applicable to this case. He had also referred to another decision in the matter of Surya Narain Upadhyaya v. Ram Roop Pandey and Ors. This case also does not support the appellant.
51. Learned Counsel for the appellant had relied on another decision in the matter of K.R.C.S. Balakrishna Chetty and Sons & Co. v. The State of Madras in connection with the meaning of “subject to”. This case relates to grant of exemption subject, to obtaining of licence, on interpretation of the provisions of the relevant, statute, the said decision is rendered. Even assuming that the performance of the contract by the plaintiff was subject to obtaining of the permission by the defendant from the Income Tax Authority, as noticed above, in order to obtain a Clearance Certificate from the Income Tax Authority, what is required is a draft sale deed, though it was not necessary to be prepared by vendee, since it is admitted by the plaintiff that she was to prepare the draft sale deed and send it to the defendant and as the plaintiff has failed to prove the same, as noticed above, the obtaining of Clearance Certificate from the Income Tax Authority would arise only after the draft sale deed is given to the defendant.
52. There is yet another reason to hold that the plaintiff was not ready and willing to perform her part of contract is that, the plaintiff had entered into an agreement with the wife of the defendant in respect of purchase of another property and in this connection, the plaintiff had filed O.S.No. 1022/1995 and the suit was decreed. In the said suit, the trial court granted one month’s time to the plaintiff to deposit the sale consideration and get the sale deed registered in her favour. The plaintiff despite granting one month’s time did not deposit the sale consideration. The wife of this defendant was forced to file a Miscellaneous Application under Section 28(1) of the Specific Relief Act seeking cancellation of the decree and it is admitted by PW-1 that said decree was cancelled. This circumstance clearly establishes the conduct of plaintiff, that she was not interested in the performance of contract but was only interested to keep the contract alive.
53. Plaintiff has failed to prove her capacity to arrange the requisite fund same also evident from the evidence of PW-1, that though the plaintiff has pleaded that she had taken the Demand Draft for Rs. 10,40,000/-and had also kept Rs. 7,00,000/- in cash to pay the balance of sale consideration, no corresponding document or proof of the same has been produced by the plaintiff.
54. From the above circumstances, it is clear that:
1. From 31.3.1995 i.e., date of the agreement till filing of the suit i.e., on 22.12.1995, plaintiff had not called upon the defendant to perform his part of contract, even though the agreement stipulated five months’ time to complete the sale transaction;
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2. After the expiry of stipulated time under the agreement, it is the defendant himself issued notice on 6.11.1995 canceling the agreement;
3. Though the plaintiff stated in the pleading and the evidence that, she has ready cash of Rs. 7 lakhs and also she had kept D.D. ready for an amount of Rs. 10,40,000/-, however, no proof of the same is produced in the suit;
4. Plaintiff in another suit filed against the wife of the defendant for specific performance in O.S.No. 1022/1995 did not deposit the decretal amount to get the sale deed executed in her favour despite the trial court granting one month’s time for deposit and in turn, it is the wife of the defendant was to file an application under Section 28(1) of the Specific Relief Act seeking cancellation of the decree, and the decree was cancelled;
5. PW-1 admits that the defendant was repeatedly calling upon the plaintiff to pay the balance of sale consideration and get the sale deed registered;
6. PW-1 also admits that the sale consideration to be shown in the sale deed is different from one to be mentioned in the agreement;
7. PW 1 also admits that the plaintiff had prepared the draft sale deed and had sent the same to the defendant, 15 days earlier to the expiry of the time under the agreement. However, neither draft sale deed copy is produced nor the person through whom it was sent is examined; and
8. Plaintiffs case is that she had issued telegram to the defendant before the expiry of the time under the agreement. However, no such evidence is produced.
These circumstances clearly show that plaintiff never shown her readiness and willingness to perform her part of contract.
55. In the case of seeking decree for specific performance of the contract, one of the obligations is that the plaintiff must prove that she is always ready and willing to perform her part of contract and what is required to be noticed is, that the continuous readiness and willingness on the part of the plaintiff, which is a condition precedent for grant of decree for specific performance. It is settled law that not only the plaintiff must aver that she has performed or has always been and is willing to perform her part of contract, the readiness and willingness has to be in spirit and substance not in letter and form. In this case, not only the plaintiff has failed to show that she is always ready and willing to perform her part of contract, but from the attending circumstances and the conduct of the plaintiff, it is clear that the plaintiff was never ready and willing to perform her part of contract. In this context, it may be necessary to notice that in the evidence of PW-1, a suggestion has been made that, the plaintiff is in the habit of keeping the agreements alive searching for intending purchasers. Though this suggestion has been denied, but fact remains that the plaintiff in similar circumstances in O.S.No. 1022/1995 though the decree was granted in her favour, she did not execute the same and in turn the decree was cancelled.
56. Though it is argued by the appellant’s Counsel that, the agreement is dated 31.3.1995 and the suit is filed immediately on 23.12.1995, but this will not justify the readiness and willingness particularly when Page 0123 the time is stipulated as five months for completion of the transaction and plaintiff does not even call upon defendant to perform his part of contract and in turn the defendant, who issued the notice dated 6.11.1995 for cancellation of the agreement, it is only thereafter the plaintiff has filed the suit. Looking into the evidence from any angle, we do not find any error in the judgment and decree of the trial court. As far as advance amount is concerned, the trial court has ordered for return of the advance amount along with interest @ 6% to plaintiff.
Hence, we find no merit in the appeal and the same is dismissed. However, no order as to costs.