{"id":54395,"date":"1996-03-01T00:00:00","date_gmt":"1996-02-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-p-r-deb-and-associates-vs-sunanda-roy-on-1-march-1996"},"modified":"2016-02-22T18:26:40","modified_gmt":"2016-02-22T12:56:40","slug":"ms-p-r-deb-and-associates-vs-sunanda-roy-on-1-march-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-p-r-deb-and-associates-vs-sunanda-roy-on-1-march-1996","title":{"rendered":"M\/S.P.R. Deb And Associates vs Sunanda Roy on 1 March, 1996"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S.P.R. Deb And Associates vs Sunanda Roy on 1 March, 1996<\/div>\n
Equivalent citations: 1996 AIR 1504, \t\t 1996 SCC (4) 423<\/div>\n
Author: M S V.<\/div>\n
Bench: Manohar Sujata (J)<\/div>\n
           PETITIONER:\nM\/S.P.R. DEB AND ASSOCIATES\n\n\tVs.\n\nRESPONDENT:\nSUNANDA ROY\n\nDATE OF JUDGMENT:\t01\/03\/1996\n\nBENCH:\nMANOHAR SUJATA V. (J)\nBENCH:\nMANOHAR SUJATA V. (J)\nFAIZAN UDDIN (J)\n\nCITATION:\n 1996 AIR 1504\t\t  1996 SCC  (4) 423\n JT 1996 (2)   684\t  1996 SCALE  (2)551\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t\t    WITH
\n\t       CIVIL APPEAL NO. 4631A OF 1993
\nSunanda Roy
\nV.\n<\/p>\n
M\/s.P.R.Deb and Associates
\n\t\t      J U D G M E N T
\nMrs. Sujata V.Manohar. J.\n<\/p>\n
     Civil Appeal  No.4631A of 1993 is by original defendant
\nto the\tsuit challenging  the decree of specific performance
\nwhich has  been passed\tin  appeal  by\tthe  High  Court  of
\nCalcutta against  the appellant.  The judgment and decree of
\nthe High  Court in  appeal is dated 28th of August, 1991. By
\nthis judgment  and decree,  the judgment  and order  of\t the
\ntrial court  dismissing the  respondent’s suit\tfor specific
\nperformance was\t set aside.  The High  Court granted  to the
\nrespondent a decree for specific performance of the contract
\nin question  and directed  the appellant to execute the deed
\nof conveyance as set out therein on the respondent paying to
\nthe appellant  the  amounts  set  out  therein.\t The  decree
\nprovided that  the respondent shall make these payments with
\ninterest as  specified therein\twithin\ta  period  of  three
\nmonths from  the date of the judgment; and the appellant was
\ndirected  to  execute  the  documents  within  three  months
\nthereafter. The\t respondent, however,  did not\tmake payment
\nwithin specified  period which\texpired on  27th of November
\n1991.  The   respondent,   however,   ultimately   made\t  an
\napplication dated  3rd of  February, 1992  before  the\tHigh
\nCourt for  extension of\t time for  making payment  under the
\ndecree by  a further  period of\t three months. The appellant
\nopposed this  application. The High Court by its order dated
\n26th of\t May, 1993  has declined  to grant  any extension of
\ntime for  payment of  the said\tamounts holding, inter alia,
\nthat in\t the facts  and circumstances  of the  case it would
\ncause hardship, serious prejudice and injury to the opposite
\nparty if  any further extension of time is given thereby re-
\nopening the  decree. The  application of  the respondent for
\nextension of  time has been dismissed by the High Court thus
\nresulting in  the respondent’s suit for specific performance
\nstanding dismissed.\n<\/p>\n
     Civil  Appeal   No.  4631\tof  1993  is  filed  by\t the
\nrespondent from\t the judgment  and order  of the  High Court
\ndated 26th  of May,  1993. For\tthe sake  of convenience the
\nappellant in  Civil Appeal  No.4631A of 1993, that is to say
\nthe original  defendant, is  referred to  as  the  appellant
\nwhile the  respondent in Civil Appeal No.4631A of 1993, that
\nis to  say the\toriginal plaintiff,  is referred  to as\t the
\nrespondent.\n<\/p>\n
     The  appellant   is  the  owner  of  certain  immovable
\nproperty bearing  No.30, Gariahata  Road, South Calcutta. By
\nthe agreement  dated 24th  of October,\t1977 the  appellant-
\nagreed to sell to the respondent the said property for a sum
\nof Rs.9\t lakhs on  the terms  and conditions  set out in the
\nagreement of  sale dated  24th to  October, 1977.  Under the
\nterms of  this agreement a sum of Rs.25,000\/- was to be paid
\nat the\ttime of execution of the agreement. A further sum of
\nRs.4 lakhs  was to  be paid within five months from the date
\nof the\tagreement and  the balance  amount was to be paid at
\nthe time  of conclusion\t of the\t Purchase, time-being of the
\nessence of  the contract.  Under clause\t 4 of the agreement.
\nafter the  title  of  the  appellant  was  accepted  by\t the
\nrespondent, the\t respondent was\t required  to  send  to\t the
\nappellant’s advocate  a draft  of the proposed conveyance in
\norder to  enable the  appellant to  apply for and obtain the
\nincome tax  clearance certificate  under Section 230A of the
\nIncome Tax Act and for permission of the competent authority
\nunder the  Urban Lana  (Ceiling and  Regulation) Act,  1976.
\nUnder clause  6 of  the agreement the appellant was required
\nto hand\t over vacant  possession of  the  said\tproperty  on
\ncompletion of  sale except for possession of four shop rooms
\nin the front portion. Clauses 11, 13 and 14 of the agreement
\nare as follows:\n<\/p>\n
     “11. And  it is further agreed that
\n     if ultimately  the Conveyance is to
\n     be\t executed   in\t favour\t  of   a
\n     Cooperative Housing  Society to  be
\n     initiated by  the said  P.R. Deb  &
\n     Associates\t nominee   of  the  said
\n     Purchaser\therein\t and  a\t further
\n     Agreement\tmay   be  entered   into
\n     between  the   Promoter   of   that
\n     Housing Society  and the Vendor and
\n     the said Agreement be registered at
\n     the   Office    of\t  the\tDistrict
\n     Registrar at  Alipore,  24-Parganas
\n     and the  Vendor shall  have to give
\n     necessary\tconsent\t letter\t to  the
\n     Cooperative Housing  Society to the
\n     effect that  she has agreed to sell
\n     the land  and the buildings thereon
\n     to the Cooperative Housing Society.\n<\/p><\/blockquote>\n
     13.  On the  Vendor’s making  out a
\n     marketable\t title\t to   the   said
\n     property free from all encumbrances
\n     whatsoever\t and  on  her  complying
\n     with  the\tobligations  under  this
\n     Agreement, if  the’ purchaser fails
\n     to complete the purchase within the
\n     time and in the manner hereinbefore
\n     mentioned,\t the   Vendor  thereupon
\n     shall  have   the\tfull   power  of
\n     rescinding this Agreement by giving
\n     notice in\twriting to the Purchaser
\n     or its  said Advocate  and the said
\n     earnest money  of Rs.25,000\/- shall
\n     in\t that\tevent  stand  absolutely
\n     forfeited by  the Vendor  as and by
\n     way of  liquidated damages\t and the
\n     Vendor shall have further rights to
\n     sue  the\tpurchaser  for\tspecific
\n     performance of  this Agreement  and
\n     for other reliefs.\n<\/p><\/blockquote>\n
     14.  It is\t clearly understood  and
\n     agreed  that   further  payment  of
\n     Rs.4,00,000\/- will\t not be\t treated
\n     as earnest\t money for the operation
\n     of\t this\tclause.\t In   case   the
\n     transaction falls\tthrough the said
\n     sum of  Rs. 4,00,000\/-  has  to  be
\n     refunded\t\t     forthwith.”<\/p><\/blockquote>\n
     Under the\tterms of  the said  agreement the respondent
\nwas required  to pay  Rs.4 lakhs within five months, that is
\nto say,\t on or before 23rd of March, 1978. As the respondent
\nfailed\tand   neglected\t to   pay  this\t amount\t within\t the
\nprescribed period, the appellant addressed to the respondent
\nher solicitor’s\t letter dated 12.4.1978. In this letters the
\nappellant pointed  out that  the part  payment of Rs.4 lakhs
\nhad not\t been made by the respondent to the appellant within
\nthe prescribed\tperiod under  the agreement.  It was further
\npointed out that the respondent was aware that the appellant
\nwas residing  in the said property. The appellant had agreed
\nto give\t vacant possession of this property on completion of
\nsale. The payment of Rs.4 lakhs was required under the terms
\nof the\tagreement to  enable  the  appellant  to  acquire  a
\nsuitable residence  by utilizing  this sum.  the letter also
\nrecords that in fact the appellant had inspected a number of
\nproperties and\tapproved two of them for purchase: but owing
\nto the\tdefault on  the part of the respondent in paying the
\nsum of\tRs.4 lakhs the appellant was not able to proceed any
\nfurther.  On   account\tof  the\t default  committed  by\t the
\nrespondent the\tappellant had  the option  to terminate\t the
\nagreement. However  without  prejudice\tto  her\t rights\t she
\ncalled upon the respondent to pay the said sum of Rs.4 lakhs
\nwithin seven  days failing  which  the\tappellant  would  be
\ncompelled to  take further  steps against  the respondent as
\nshe may\t be advised.  Despite  this  notice  the  respondent
\nfailed and neglected to pay the sum of Rs.4 lakh .\n<\/p>\n
     The respondent  contends that  under clause  11 of\t the
\nsaid agreement.\t the appellant\twas required to enter into a
\nfurther agreement  with the  promoter of  a proposed housing
\nsociety being  formed by  the respondent and was required to
\ngive a consent letter to the co-operative housing society as
\nset out\t in clause 11. The respondent contends that although
\nmeetings were  held between  the solicitors of the appellant
\nand the\t respondent, the appellant did not give such consent
\nor enter  into arrangement  with the  proposed\tco-operative
\nhousing\t society   which  was  then  being  set\t up  by\t the
\nrespondent. It\tis the\trespondent’s case  that he could not
\nraise the  sum of  Rs.4 lakhs  since the  appellant did\t not
\nconsent to  and\/or execute  an argument\t in  favour  of\t the
\nproposed housing society in supersession of the agreement of
\n24th of\t October. 1977. In this connection, the respondent’s
\nsolicitors have\t addressed two\tletters to  the\t appellant’s
\nsolicitors. One is a letter dated 5th of June, 1978, written
\nlong after the expiry of the date for payment of Rs.4 lakhs,
\nin which  the respondent  has called  upon the\tappellant to
\napprove the draft agreement for sale between one M\/s.Anirban
\nCo-operative  Housing\tSociety\t Ltd.  which  was  not\tthen
\nregistered and the appellant in supersession of the existing
\nagreement along\t with a\t cheque\t for  Rs.25,000\/-  drawn  in
\nfavour of  the appellant  by the said proposed society. This
\ncheque has  not been  encased. The  second letter  from\t the
\nrespondent to  the  appellant’s\t solicitors  is\t dated\t25th
\nSeptember, 1980\t in which  it is,  inter alia, recorded that
\nunless the  agreement was  executed between the proposed co-
\noperative  society  and\t the  appellant,  it  would  not  be
\npossible for  the respondent to raise money and make payment
\nof Rs.4\t lakhs. The  letter also  records that the appellant
\nhad, during  the negotiations,\ttaken the  stand that unless
\nthe sum,  of Rs.4  lakhs was  paid the\tappellant would\t not
\nexecute the  fresh agreement  for  sale.  This\tletter\talso
\nrecords that  after the\t agreement between  the proposed co-
\noperative  society   and  the  appellant  is  completed\t the
\nrespondent will.  within a  month thereafter make payment of
\nRs.4 lakhs,  But unless\t the agreement\tis completed  it  is
\nimpossible to collect the money from the members of
\nthe proposed co-operative society.\n<\/p>\n
     On 10.11.1980, the respondent filed a suit for Specific
\nperformance  against  the  appellant  praying  for  specific
\nperformance of\tthe agreement  of 24th\tof October 1977. The
\ntrial court  by its  judgment  and  order  dated  24.12.1985
\ndismissed the suit holding that the respondent was not ready
\nand willing  to perform\t his part of the contract. In appeal
\nhowever the  High Court\t has granted specific performance as
\nprayed for  on terms  and condition which are set out in its
\njudgment and  decree  dated  28.8.1991.\t Hence\tthe  present
\nappeal has been filed by the appellant.\n<\/p>\n
     Under the\tagreement  of  sale  dated  24.10.1977,\t the
\nrespondent was\trequired to  make part payment of Rs.4 lakhs
\nwithin five  months of\tthe agreement of sale. The agreement
\nhas clearly  provided that  this payment  is not  by way  of
\nearnest but  it is  part payment  of the purchase price. The
\npurpose\t of   this  payment   is  clearly  set\tout  in\t the
\nappellant’s solicitor’s\t letter dated 12.4.1978 addressed to
\nthe respondent’s  solicitors. Early payment of the amount of
\nRs.4 lakhs  was required  as the  appellant had\t to purchase
\nalternative residential\t accommodation for  herself in order
\nto carry  out her  obligation under the agreement of sale to
\ndeliver vacant\tpossession of the property to the respondent
\nexcept for  the four shops set out in the said agreement. By
\nher solicitor’s\t letter of  12th April,\t 1578, the appellant
\nhad also  made it  clear that  she requires  payment of Rs.4
\nlakhs for  this purpose and gave notice to the respondent to
\npay this  amount within\t a week of the said letter since the
\ntime for  payment had  already expired.\t Clearly. payment of
\nRs.4 lakhs within a reasonable time was an essential term of
\nthe contract.  Because a  late payment\tof this\t amount\t may
\naffect the  appellant’s right to obtain suitable alternative
\nresidential accommodation property prices may increase, thus
\naffecting the  appellant’s  right  to  purchase\t a  suitable
\nresidential accommodation.  From the  reply which  has\tbeen
\nsent by\t the respondent’s  solicitors, especially  the reply
\ndated 25.9.1980,  it is\t quite clear that the respondent was
\nnot in a position to pay the sum of Rs.4 lakhs either within
\nthe time  specified in\tthe agreement  of sale\tor within  a
\nreasonable time. In fact. he has clearly set out in the said
\nletter that  unless he\tis able\t to enter  into\t a  suitable
\narrangement with  a cooperative housing society. he will not
\nbe able to pay Rs.4 lakhs to the appellant. He has insisted,
\ntherefore. on the appellant first entering into an agreement
\nwith a proposed housing society which. admittedly never came
\ninto existence.\t There\tis  nothing  in\t clause\t 11  of\t the
\nagreement of sale which requires the appellant to enter into
\nan agreement  with a proposed cooperative housing society as
\na condition  precedent to  receiving part payment of the sum
\nof Rs.4\t lakhs. Clause 11 is independent of the right of the
\nappellant to  receive a\t sum to\t Rs.4 lakhs.  The  agreement
\nspecifies the time within which the sum or Rs.4 lakhs was to
\nbe paid and the correspondence makes it quite clear that the
\nrespondent was\tnot in\ta position to pay this amount within
\nthe agreed  period or  within any reasonable time thereafter
\nbecause he  had, in  turn; to  collect this  amount from the
\nexpected  members   of\tthe  proposed  co-operative  housing
\nsociety. There\tis no  evidence in this case to show whether
\nthere were any members of this proposed co-operative housing
\nsociety and  whether the  respondent was  in a\tposition  to
\ncollect this amount of Rs. 4 lakhs. In fact, the evidence is
\nto the\tcontrary. The  proposed co-operative housing society
\nwas never registered and there is nothing to show that there
\nwere any  members  of  this  proposed  co-operative  housing
\nsociety. Although  the respondent  and\this  solicitor\thave
\ngiven evidence\tin the\tcase, they  have not stated that the
\nrespondent had the sum of Rs.4 lakhs at the material time or
\nthat the  respondent was  in a\tposition to  pay this amount
\nwithin a  reasonable time. There is nothing in the agreement
\nrequiring the  appellant to enter into an agreement with the
\nproposed co-operative housing society before the sum of Rs.4
\nlakhs is  released to  her. The\t trial court, therefore, had
\nrightly come to the conclusion that the respondent-plaintiff
\nwas not in a position to carry out the terms of agreement of
\nsale. The  plaintiff, in  a suit  for specific\tperformance,
\nmust be\t ready and  willing to\tcarry out  his part  of\t the
\nagreement at  all material times. Such is not the case here.
\nIn fact,  even after the decree of specific performance, the
\nrespondent was\tnot able to deposit the amounts specified by
\nthe High  Court within\tthe time  prescribed  Ultimately  he
\napplied for  extension of  time for  deposit of amount which
\napplication was rejected.\n<\/p>\n
     In the case of Chand Rani (Smt.) (Dead)by Lrs. v. kamal
\nRani (Smt.)  (Dead) by\tLrs, (1993  (1) SCC 519), a Bench of
\nFive Judges  of this  Court considered\ta similar situation,
\nwhere the  contract stipulated\tthat a\tsum  of\t Rs.98,000\/-
\nwould be paid by the purchaser to the vendor within a period
\nof ten\tdays only. Despite notices of the vendor, the vendee
\nwas not\t willing  to  pay  the\tsaid  amount  unless  vacant
\npossession of a part of the property was given by the vendor
\nto the\tvendee. The  Court said\t that in View of the express
\nterms of  the contract\tcoupled\t with  the  conduct  of\t the
\nvendee, it was clear that the time was of the essence of the
\ncontract and the Vendee was not ready and willing to perform
\nthe contract.  In these circumstances, this Court upheld the
\nrefusal of  the High  Court to\tgrant specific\tPerformance.
\nThis Court  has observed that although in the case of a sale
\nof immovable  property time  is not  of the  essence of\t the
\ncontract, it  has to  be ascertained whether under the terms
\nof the\tcontract, when\tthe parties  named a  specific\ttime
\nwithin with  completion was  to take  place, really  and  in
\nsubstance it was intended that it should be completed within
\na reasonable time. It observed that the specific performance
\nof a  contract will  ordinarily be  granted, notwithstanding
\ndefault in  carrying out  the contract\twithin the specified
\nperiod, if  having regard to the express stipulations of the
\nparties,  nature   of  the   property  and  the\t surrounding
\ncircumstances, it is not inequitable to grant the relief. If
\nthe contract relates to sale of immovable property, it would
\nnormally be presumed that the time was not of the essence of
\nthe contract.  But even\t if it\tis not of the essence of the
\ncontract, the  Court may infer that it is to be performed in
\na reasonable  time it  the conditions  of  the\tcontract  so
\nwarrant. These\tcan be\tinferred, (1) from the express terms
\nof the\tcontract; (2)  from the\t nature of the property and;
\n(3) from  the surrounding  circumstances. For  example,\t the
\nobject of  making the  contract may  make it  clear that the
\nagreement requires to be performed within a reasonable time.
\nThe  Court   said  that\t the  stipulation  in  the  contract
\nregarding payment of Rs.98,000\/- within a period of ten days
\nonly showed  that the  failure to  pay the amount within the
\nstipulated period would constitute a breach of contract.\n<\/p>\n
     The present  case is  similar. The\t clause relating  to
\npayment of  various amounts under the contract including the
\nsum of\tRs.4 lakhs  states that\t the time is of the essence.
\nMoreover, by  his letter  of  12th  April,  1978,  also\t the
\nappellant has  made payment of Rs.4 lakhs within a period of
\nseven days  from the  date of  notice, of the essence of the
\ncontract  pointing   out  the  circumstances  which  require
\npayment of  Rs. 4  lakhs within\t a reasonable  time. As\t the
\nrespondent did not Comply and was unwilling and\/or unable to
\ncomply with  this  term\t of  the  agreement,  he  cannot  be
\nconsidered as  ready and  willing to perform his part of the
\ncontract.\n<\/p>\n
     In the  case of Parakunnan Veetill Joseph’s  Son Mathew
\nv. Nedumbara  Kuruvila’s Son  & Ors.<\/a>  (1987 (Supp) SCC 340),
\nthis Court  has observed  that the court should meticulously
\nconsider  all\tfacts  and   circumstances  before  granting
\nspecific performance. The court should take care to see that
\nit is  not used\t as an\tinstrument of  oppression to have an
\nunfair advantage.\n<\/p>\n
     In the  present case,  the right  of the  appellant  to
\npurchase suitable  residential\taccommodation  is  seriously
\naffected by  non-payment of  Rs.4 lakhs\t within a reasonable
\ntime. The  respondent had  failed to comply with the term of
\nthe agreement  relating to  payment of this amount. In these
\ncircumstances,\tin   any  case,\t  a  decree   for   specific
\nperformance cannot  be granted\tas it  would be\t unfair\t and
\nunreasonable to\t do so.\t The High  Court, therefore, was not
\nright in  setting aside\t the judgment and order of the trial
\ncourt.\n<\/p>\n
     We therefore.  allow Civil\t Appeal No.4631A of 1993 and
\nrestore the  judgement and  order of  the trial\t court while
\nsetting aside the judgment and decree of the High Court.\n<\/p>\n
     In view of Civil Appeal No.4631A of 1993 being allowed,
\nas above,  nothing now\tsurvives in  Civil Appeal No.4631 of
\n1993 which  is Against\tthe refusal  of the  High  Court  to
\nextend time  for making\t payment of  the amounts  under\t the
\ndecree of  the High  Court which has now been set aside. The
\nHigh Court  passed a  conditional decree  whereby  the\tHigh
\nCourt has  ordered, inter  alia, that  in the  event of\t the
\nrespondent herein  committing default  in making the payment
\nto the appellant within the time as specified in the decree,
\nthe suit  for specific\t performance  of the contract “shall
\nand do\tstand dismissed”.  The respondent  contends that the
\nHigh Court  has the  power to extend time for making payment
\ndespite this provision in the decree. While the
\n appellant contends that the court having become functions
\nofficio on  passing of\tthe  above  conditional\t decree,  it
\ncannot further\textend time.  The High Court has declined to
\nextend time  in the  facts and circumstances of the case. We
\nneed not,  however, examine  the detailed contentions raised
\nby both\t the parties  in this  connection since this dispute
\nhas  now   become  redundant,\tthe  decree   for   specific
\nperformance having  been set  aside. Civil Appeal No.4631 of
\n1993 is,  therefore, dismissed.\t The respondent shall pay to
\nthe appellant costs of the appeals.\n<\/p>\n
     The respondent  will be  at  liberty  to  withdraw\t the
\namount deposited  pursuant to  the orders  of the Court with
\naccrued interest, if any.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S.P.R. Deb And Associates vs Sunanda Roy on 1 March, 1996 Equivalent citations: 1996 AIR 1504, 1996 SCC (4) 423 Author: M S V. Bench: Manohar Sujata (J) PETITIONER: M\/S.P.R. DEB AND ASSOCIATES Vs. RESPONDENT: SUNANDA ROY DATE OF JUDGMENT: 01\/03\/1996 BENCH: MANOHAR SUJATA V. (J) BENCH: MANOHAR SUJATA V. (J) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-54395","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S.P.R. 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