R LAKSHMIKANTHAM versus DEVARAJI on 10 July 2019

1. In the present appeal, despite service of notice, nobody appearsfor the respondent. We have heard Dr. (Ms.) Pooja Jha, learned counselappearing for the appellant.

2. The High Court, in the present appeal, has, by the impugnedjudgment dated 03.02.2017, set aside the concurrent judgments of theCourts below, and allowed the appeal of the erstwhile defendant, who isthe respondent before us, and hence, set aside the decree for specificperformance that was passed in the plaintiff’s favour.

3. By an agreement to sell dated 22.09.2002, the suit-propertywas to be sold for a sum of Rs.3,65,000/-. Certain clauses of theagreement are important and are set out hereinbelow:

“1. The sale price of the property mentioned in the schedulehereunder shall be Rs.3,65,000/-(Rupees Three Lakhs and SixtyFive Thousand only).

2. The party of the second part has paid a sum of Rs.5,000/-(Rupees Five Thousand only) towards advance by cash andthe party of the first part hereby admit and acknowledge thereceipt of the same.

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A3. The balance sale consideration shall be paid by the party of thesecond part to the party of the first part within three monthsfrom today. The party of the first part agrees to execute saledeed on the day on which the balance sale consideration ispaid.

B4. The party of the second part agrees to pay part of the saleconsideration of Rs.60,000/-(Rupees Sixty Thousand only)to the party of the first on or before 10[th] day of October.

5. The party of the first part had handed over the original titledocuments to the mortgagee and the party of the second partCshall settle the loan, receive the documents from themortgagee and keep the same in his custody.

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D8. If there is no encumbrance to the schedule property and whenthe party of the second part is willing to pay the balance saleconsideration, the party of the first shall execute sale deed infavour of the party of the second part or her nominee. If theparty of the first part refuses to do so, the party of the secondpart is entitled to take legal action.”

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4. It is stated that at the time of the sale agreement, the suitproperty was worth roughly a sum of Rs.6 lakhs, but the parties finallyagreed and the defendant, in particular, agreed to sell the aforesaidproperty for Rs.3.65 lakhs. A perusal of the agreement to sell wouldshow that though clause 3 requires that the balance sale considerationFwill be paid within three months from the date of the agreement and thatthe seller will execute the sale deed on the date on which balance saleconsideration was paid yet, clauses 5 and 8 clearly show that the originaltitle deeds which are with the mortgagee had yet to be handed over andthe mortgage had yet to be redeemed. It is only when this is done thatclause 3 would kick in, showing that the time of three months is obviouslyGnot of essence.

5. Soon after the agreement, the plaintiff sent a registered letterdated 18.12.2002 to the present address of the defendant reminding thedefendant that Rs.5000/- had been received on the date of signing theagreement and Rs.60,000/- had been received on 14.10.2002. DespiteHthis, the original title documents were not obtained from the mortgagee and hence the mortgage could not be discharged. The letter then goeson to state that repeated calls were made and that the plaintiff is readywith the balance money, and that the defendant should come forwardimmediately to discharge the mortgage, get all documents from themortgagee, and register the sale deed. This registered A.D. letter wasreturned to the sender stating that the addressee did not receive thesame for the past one week. The same was the fate of another legalnotice on the very next date, i.e., 19.12.2002. Finally, on 07.07.2003,the plaintiff sent a legal notice referring to the earlier legal notice of19.12.2002 and called upon the defendant to immediately comply withthe terms of the agreement. To this notice, which was admittedly receivedby the defendant at the very same address, no reply was given.Thereafter, the present suit for specific performance was filed by theplaintiff in February, 2005.

6. Given these facts, the trial Court, by its judgment dated12.09.2008, held that the suit agreement was proved and that three noticessent by the plaintiff were also proved, it being clear that the defendantwas attempting to wriggle out of his obligations under the agreement.Though the suit was filed belatedly, the trial Court felt that as thedefendant did not furnish the address of his mortgagee or take steps toclear the mortgage, it was clear that the defendant was attempting towriggle out of the agreement. Further, the plaintiff’s readiness andwillingness was proved by the fact that he has necessary funds as onthe date of the agreement, and thereafter, as was stated by him in hisletter dated 18.12.2002. This being the case, the Court ordered specificperformance as the balance sale consideration had already been depositedinto the Court on the date of the filing of the Suit. The first appeal fromthe aforesaid judgment was dismissed on 20.12.2010 by the PrincipalDistrict Judge. The District Judge found concurrently for the plaintiffon all the points argued and hence dismissed the first appeal.

7. By the impugned judgment, the High Court reversed theconcurrent judgments and held, on a construction of the agreement, thatsince only three months were given to complete the sale transaction,time was of essence. It also went on to hold that the two letters dated18.12.2002 and 19.12.2002 could not have been said to have been servedon the defendant and hence were not proved. The High court recordedthe defendant’s advocate’s statement that it was not going into otheraspects except that plaintiff was not ready and willing throughout to A

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Aperform the sale agreement. Despite this, the High Court held thatsince the Suit itself was filed belatedly, it would not be enough for theplaintiff to show that he had the necessary funds. It would also havebeen necessary for him to show that he was otherwise ready and willingthroughout, which cannot be said to be correct considering that therewas a long time gap between 22.09.2002 and 07.07.2003 inasmuch asBthe intermediate letters/notices were not proved. The High Court alsofurther stated that the property value was Rs.10 lakhs on the date of thesale agreement, though this was not proved by the defendant, and thenwent on to state that since readiness and willingness had to be heldagainst the Plaintiff, and since the Suit itself was belated, specificCperformance cannot be granted on the facts of this case and, as statedearlier, reversed the concurrent findings of the Courts below.

8. We have heard learned counsel for the appellant.

8. We have heard learned counsel for the appellant.

9. The High Court has, in the second appeal, obviously gonewrong on a number of counts. First, to hold that time was of essence inDthe agreement, is wholly incorrect. Clause 3 has to be read along withclauses 5 and 8, which clearly show that in the nature of reciprocalpromises, the promise made by the seller in clause 5 has to be performedfirst, viz., that the title documents have to be obtained from the mortgageeafter the mortgage is cleared. It is only then that the considerationEabove Rs.70,000/-, being the balance consideration for the sale, has tobe paid. Secondly, the High court is wholly incorrect in stating that thetwo letters of 18.12.2002 and 19.12.2002 cannot be said to have beenproved. Both the letters were registered A.D. letters sent to the veryaddress of the defendant, which the defendant states is the address onwhich it received the legal notice dated 07.07.2003. Further, the momentFthe registered letter once sent is returned with the remarks mentionedhereinabove, it shall be deemed to have been served on the defendanton the address so stated, unless the contrary is proved. The defendantdid not come forward with anything to show that this was not the properaddress. In fact, that this is the proper address is shown by the fact thatGhe acknowledged the receipt of the legal notice dated 07.07.2003 on thisvery address.

10. The High Court order is not correct in stating that readinessand willingness cannot be inferred because the letters dated 18.12.2002and 19.12.2002 had not been sent to the defendant. The High Court H

also erred in holding that despite having the necessary funds, the plaintiffcould not be said to be ready and willing. In the aforesaid circumstances,the High Court was also incorrect in putting a short delay in filing theSuit against the plaintiff to state that he was not ready and willing. InIndia, it is well settled that the rule of equity that exists in England, doesnot apply, and so long as a Suit for specific performance is filed withinthe period of limitation, delay cannot be put against the plaintiff – SeeMademsetty Satyanarayana v. G. Yelloji Rao and others AIR 1965Supreme Court 1405 (paragraph 7) which reads as under:

“(7) Mr. Lakshmaiah cited a long catena of English decisoins todefine the scope of a Court’s discretion. Before referring to them,it is necessary to know the fundamental differnece between thetwo systems-English and Indian-qua the relief of specificperformance. In England the relief of specific performancepertains to the domain of equity; in India, to that of statutory law.In England there is no period of limitation for instituting a suit forthe said relief and, therefore, mere delay – the time lag dependingupon circumstances – may itself be sufficient to refuse the relief;but, in India mere delay cannot be a ground for refusing the saidrelief, for the statute prescribes the period of limitation. If the suitis in time, delay is sanctioned by law; if it is beyond time, the suitwill be dismissed as barred by time; in either case, no question ofequity arises.”

11. The High Court also went into error in stating that the valueof the property was Rs.10 lakhs at the time of the sale agreement. PW-1 in his cross examination admitted that it was Rs.10 lakhs on the datewhen PW1 was cross-examined. The value of the property on the dateof the sale agreement was only Rs.6 lakhs, and it was open for theparties to negotiate the said price upwards or downwards, which waswhat the parties did in the facts of the present case. Nothing can,therefore, be derived from the erroneous assumption that a valuableproperty had been sold at a throwaway price.

12. For all these reasons, therefore, we allow the appeal and setaside the judgment of the High Court and restore that of the Courtsbelow.

Ankit Gyan

Appeal allowed.

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