GADDIPATI DIVIJA & ANR. versus PATHURI SAMRAJYAM & ORS. on 18 April 2023

802

SUPREME COURT REPORTS

[2023] 3 S.C.R.

GADDIPATI DIVIJA & ANR.

A

v.

PATHURI SAMRAJYAM & ORS.

(Civil Appeal No. 4206-4207 of 2011)

BAPRIL 18, 2023

[KRISHNA MURARI AND SANJAY KAROL, JJ.]

Specific Relief Act, 1963 – s. 16 – 2018 amendment – SpecificPerformance – Father of appellants executed an agreement of salewith respondent no. 1-plaintiff, whereby he agreed to sell the suitCschedule property measuring Ac. 0.90 cents to respondent no. 1 fora sale consideration of Rs. 11,88,000/- out of which respondent no.1 paid an amount of Rs. 4,00,000/- as advance – Under the saidagreement, father of appellants agreed to execute the sale deed infavour of respondent no. 1 after demarcating the land and receivingDthe balance sale consideration within three months – Father ofappellants and after his death, appellants also failed to measureand demarcate the land – Respondent no.1 filed suit againstappellants and sought specific performance of contract – Trial Courtheld that respondent no.1 failed to prove entitlement for specificperformance of contract, however, entitled plaintiff to recoverEadvance amount of Rs.4,00,000/- – However, the High Courtdirected appellants to execute sale deed in favour of respondentno.1 after receiving balance consideration – On appeal, held:Respondent had established that she was always ready and willingto perform her part of contract by paying the balance saleFconsideration which is the primary requirement as per Section 16(c) of the Act – Part of evidence with regard to the respondent’sreadiness and willingness was not challenged – It can be deducedthat unless the vendor (deceased father of the appellants) got thesubject land measured and demarcated within three months as peragreement, it would be impossible for the purchaser (respondent)Gto get a sale deed executed, and as such, the question of paying thebalance sale consideration does not arise – It is clear that vendorfailed to perform his part of obligation by getting property measuredand demarcated – Findings of the High Court upheld.

H

Dismissing the appeals, the Court

HELD: 1. It is clear from the facts of the case at hand thatthe Plaintiff (Respondent No. 1 herein) was ever ready and willingto pay the balance sale consideration. In the sale agreement, itwas clearly mentioned that within three months the deceasedfather of the appellants will get the suit schedule propertymeasured and demarcated and the Plaintiff (Respondent No. 1herein) shall pay the balance sale consideration. It appears that,at first, the deceased father of the appellants while agreeing tosell 90 cents of land, concealed that he is the owner of only 50cents of the land. Subsequently, he failed to measure anddemarcate the land. On the other hand, the Plaintiff (RespondentNo. 1 herein), from the outset, has been clear and blemishless inhis conduct. She had paid the advance sale consideration ofRs. 4,00,000/-. When the deceased father of the appellants failedto measure and demarcate the land, the question of the Plaintiff(Respondent No. 1 herein) paying the balance sale considerationdoes not arise. However, even then the averments of the Plaintiff,her conduct and the testimony of her husband show that thePlaintiff, since the signing of the sale agreement, was ever readyand willing to pay the balance consideration. [Para 30][816-A-D]

2. However, what is to be seen in the present case, is thatthe sale agreement dated 14.08.2002 stipulated that the vendor(deceased father of the appellants) was required to get the landmeasured and demarcated within three months, following which,the purchaser (Respondent No. 1 herein /Plaintiff) was requiredto pay the balance sale consideration. So, it can be clearlyobserved that the performance of the purchaser’s obligation topay the balance sale consideration within three months isdependent upon the fulfilment of the vendor’s obligation to getthe land measured and demarcated within three months. [Para34][818-G-H; 819-A]

3. Therefore, it can be deduced that unless the vendor gotthe subject land measured and demarcated within three months,it would be impossible for the purchaser (Respondent No. 1herein/Plaintiff) to get a sale deed executed, and as such, thequestion of paying the balance sale consideration does not arise.

A

BC

D

EF

G

H

AThis was also observed by the High Court while placing relianceon the recitals in the sale agreement coupled with the evidenceof PW1 and PW2. Moreover, as has been held above, it is clearthat the vendor (deceased father of the appellants) failed toperform his part of the obligations by getting the subject landmeasured and demarcated, while the purchaser (Respondent No.B1 herein/Plaintiff) was ever ready and willing to pay the balanceconsideration. As such, when specific performance of the termsof the contract has not been done, the question of time being theessence does not arise. [Para 35][819-B-D]

Syed Dastagir v. T.R. Gopalakrishna Setty (1999) 6 SCCC337 : [1999] 1 Suppl. SCR 351; Aniglase Yohannan v.Ramlatha & Ors. (2005) 7 SCC 534 : [2005] 3 Suppl.SCR 440 – relied on.

Katta Sujatha Reddy v. Siddamsetty Infra Projects (P)Ltd. & Ors. (2023) 1 SCC 355 – distinguished.DN. P. Thirugnanam v. Dr. R. Jagan Mohan Rao & Ors.(1995) 5 SCC 115 : [1995] 2 Suppl. SCR 53;U. N. Krishnamurthy (since deceased) Thr. Lrs. v. A. M.Krishnamurthy 2022 SCC OnLine SC 840; Nanjappanv. Ramasamy & Anr. (2015) 14 SCC 341 : [2015] 2ESCR 606; Jaswinder Kaur v. Gurmeet Singh & Ors.(2017) 12 SCC 810 : [2017] 5 SCR 430; Chand Raniv. Kamal Rani (1993) 1 SCC 519 : [1992] 3 Suppl.SCR 798 – referred to.

Ardeshir H. Mama v. Flora Sassoon AIR 1928 PC 208;FGomathinayagam Pillai & Ors. v. Palaniswami Nadar(1967) 1 SCR 227; Bank of India Limited v. Jamsetji A.H. Chinoy and Chinoy and Company (1949) LR 77 IA76 – referred to.

H

B

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4206-4207 of 2011.

From the Judgment and Order dated 05.10.2010 of the High Courtof A.P. at Hyderabad in ASMP No.2292 of 2010 in AS No. 45 of 2008.

A. Sirajuddin, Sr. Adv., Venkateswara Rao Anumolu, SunnyKumar, Puneet Aggarwal, Advs. for the Appellants.

C

C. Mohan Rao, Sr. Adv., R. Santhanakrishnan, Lokesh KumarSharma, Krishna Kumar Singh, Advs. for the Respondents.

The Judgment of the Court was delivered by D

KRISHNA MURARI, J.

These two appeals are directed against the judgment and finalorder dated 05.10.2010 passed by the High Court of Andhra Pradesh atHyderabad (hereinafter referred to as ‘High Court’) in Appeal SuitNo. 45 of 2008 filed by Respondent No. 1 herein against the judgmentand decree dated 22.08.2007 passed by the Additional Senior Civil Judge,Ongole (hereinafter referred to as ‘Trial Court’) in O.S. No. 142 of2004; and order dated 10.12.2010 in ASMP No. 2292 of 2010 filed bythe Appellants herein, seeking to recall the aforementioned judgmentdated 05.10.2010 passed in Appeal Suit No. 45 of 2008.

E

F

2. The High Court allowed Appeal Suit No. 45 of 2008 filed byRespondent No. 1 and set aside the judgment and decree dated22.08.2007 passed by the Trial Court in O.S. No. 142 of 2004, therebydirecting the Appellants herein to execute sale deed in favour ofRespondent No. 1 herein after receiving balance sale consideration. Thesubsequent ASMP No. 2292 of 2010 filed by the Appellant herein wasdismissed.

G

BRIEF FACTS:

3. The Appellants in the present case (represented by theirmaternal grandmother) are the minor children of one G. VenugopalaRao, who died on 13.05.2003, leaving behind his wife and the Appelants H

Aherein. The brief facts giving rise to the present appeals are that duringhis lifetime G. Venugopala Rao purchased the suit schedule propertymeasuring Ac. 0.90 cents from one B. Alivelu Mangamma under aregistered sale deed and obtained possession of the same. Subsequently,on 14.08.2002, G. Venugopala Rao executed an agreement of sale withRespondent No. 1 herein, whereby he agreed to sell the aforementionedBsuit schedule property measuring Ac. 0.90 cents to Respondent No. 1herein for a sale consideration of Rs. 11,88,000/- (@ Rs. 2,200/- perannum) out of which Respondent No. 1 herein paid an amount ofRs. 4,00,000/- as advance. Under the said agreement, G. VenugopalaRao agreed to execute the sale deed in favour of Respondent No. 1Cafter demarcating the land and receiving the balance sale considerationwithin three months.

4. Upon expiry of three months, G. Venugopala Rao issued a noticedated 02.01.2003 to Respondent No. 1 herein, demanding the balanceconsideration of Rs. 7,88,000/-, failing which, the sale agreement dateD14.08.2002 would stand cancelled and the advance amount of Rs.4,00,000/- would be confiscated.

5. Respondent No. 1 herein sent a reply dated 10.01.2003 to theaforementioned notice, denying the allegations of non-payment of balanceamount despite repeated demands. It was also stated that subsequent toEthe execution of sale agreement, Respondent No. 1 herein got to knowthat G. Venugopala Rao owed a debt of Rs. 1,69,017/- to one Ch.Subbayamma, who had filed a suit (being O.S. No. 188 of 2002) beforethe Senior Civil Judge, Ongole for recovery of the said amount, and theproperty in question had been attached in the said suit. By way of thesaid reply notice, G. Venugopala Rao was asked to get the propertyFmeasured, get its attachment removed, following which Respondent No.1 herein would pay the balance sale consideration and get the propertyregistered in her name.

6. G. Venugopala Rao sent a rejoinder notice dated 21.01.2003 tothe aforementioned reply notice, wherein he denied the allegation thatGthe land is not measured and stated that the same has been duly measuredby the surveyor and boundaries have been fixed. It was further statedthat Respondent No. 1 herein may deposit an amount of Rs. 1,69,017/-in the aforementioned O.S. No. 188 of 2002 from the balance saleconsideration and pay the remaining amount to G. Venugopala Rao, failingHwhich the sale agreement shall stand cancelled.

7. It appears that during his lifetime, G. Venugopala Rao borrowedamounts of Rs. 2,40,000/- and Rs. 2,00,000/- from Kalluri Kondaiah(Respondent No. 2 herein) and M. Koteswara Rao (husband ofRespondent No. 3 herein), respectively. After G. Venugopala Rao’s deathon 13.05.2003, Kalluri Kondaiah and M. Koteswara Rao herein filedO.S. No. 233 of 2004 and O.S. No. 235 of 2004, respectively, before theSenior Civil Judge, Ongole for recovery of the said amounts. Both thesuits were decreed.

8. On 29.03.2004, Respondent No. 1 sent another legal notice tothe legal heirs of the deceased G. Venugopala Rao, i.e., his wife andminor children (Appellants herein). In the notice, it was stated thatRespondent No. 1 has always been ready and willing to perform herpart of the contract by paying the balance sale consideration, and thatthe legal heirs of the deceased G. Venugopala Rao have been delayingthe execution of the sale deed. The legal heirs of the deceased werecalled upon to clear the attachment over the schedule property bydischarging the debt due in O.S. No. 188 of 2002, receive the balancesale consideration, and execute the sale deed in favour of RespondentNo. 1 herein; failing which the latter shall file a suit for specificperformance, and the legal heirs of the deceased will be liable to bearthe costs and consequences.

9. Subsequently, Respondent No. 1 herein filed a suit (being O.S.No. 142 of 2004) before the Senior Civil Judge, Ongole, seeking specificperformance of the agreement of sale dated 14.08.2002 by directing theDefendants to execute a sale deed in the Plaintiff’s favour. In the saidsuit, Defendant No. 1 was the wife of deceased G. Venugopala Rao,while Defendant No.s 2 and 3 (Appellants herein) were his minor children.Kalluri Kondaiah (Respondent No. 2 herein) and M. Koteswara Rao(husband of Respondent No. 3 herein) were Defendant No.s 4 and 5,respectively.

10. Based on the pleadings of the parties, the Trial Court framedthe following issues for consideration:

(a) Whether the Plaintiff is entitled for relief of specificperformance of sale agreement?

(b) To what relief?

11. After hearing the parties and appreciating the evidence onrecord, the Trial Court vide judgment and decree dated 22.08.2007, held AB

C

D

EF

G

H

Athat the Plaintiff failed to prove that he is entitled for specific performanceof the contract. Resultantly, the suit was partly decreed and partlydismissed by holding the Plaintiff to be entitled for recovery of theadvance amount of Rs. 4,00,000/- paid by her to the deceased G.Venugopala Rao towards sale consideration with future interest at 6%per annum from the date of suit till the date of realisation. Each partyBwas to bear its own costs.

12. Aggrieved by the judgment and decree of the Trial Court, thePlaintiff (Respondent No. 1 herein) filed Appeal Suit No. 45 of 2008before the High Court. Vide impugned judgment and final order dated05.10.2010, the appeal was allowed. The judgment of the Trial CourtCwas set aside and the Plaintiff’s suit was decreed. The Plaintiff wasdirected to pay the decretal amount in O.S. No. 233 of 2004 and O.S.No. 235 of 2004, respectively, before the Senior Civil Judge, Ongole,and subsequently, the balance amount was to be deposited in the Courtin the names of the minors, i.e., Defendant No.s 2 and 3 (AppellantsDherein). Thereafter, guardians of Defendant No.s 2 and 3 were directedto execute a sale deed by duly demarcating the suit schedule property,failing which, the Court would execute a sale deed.

13. Subsequently, ASMP No. 2292 of 2010 was filed before theHigh Court on behalf of the minor Appellants herein by their maternalEgrandmother, seeking recall of the judgment dated 05.10.2010 in AppealSuit No. 45 of 2008 on the ground that the Appellants were not heard.The High Court noted that there was no representation on behalf of theAppellants despite being given multiple opportunities, following whichjudgment was delivered on merits. As such, the question of recalling thejudgment pronounced on merits does not arise under Section 151 of theFCode of Civil Procedure, 1908. Accordingly, the Miscellaneous Petitionwas dismissed.

14. It is against these two judgments of the High Court that theAppellants have preferred the present appeal.

G15. We have heard the learned counsel for the parties.

SUBMISSIONS:

16. Mr. A. Sirajuddin, learned Senior Counsel appearing on behalfof the Appellants contended that the High Court erred in allowing theappeal filed by Respondent No. 1 herein (Plaintiff) and decreeing theHsuit for specific performance.

17. The learned Senior Counsel relied on this Court’s judgment inN.P. Thirugnanam vs Dr. R. Jagan Mohan Rao & Ors,[1] to showthat the plaintiff must aver and prove that she was always ready andwilling to perform her part of the contract. However, in the presentcase, except the two-line pleading that the Plaintiff (Respondent No.1herein) was ever ready and willing to perform her part of the contract,there are no other details to show her readiness and willingness. Moreover,even in the chief examination, only the said two lines are available withoutfurther details. It was also contended that the Trial Court had observedthat the Plaintiff had not marked any document to show that she washaving necessary funds to pay the balance.

18. Reliance was also placed on this Court’s judgment in U.N.Krishnamurthy (since deceased) Thr. Lrs. vs A.M.Krishnamurthy,[2] wherein it was held that:- “42. It is, therefore, patently clear that the respondent plaintiffhas failed to prove his readiness to perform his part of contractfrom the date of execution of the agreement till date of decree,which is a condition precedent for grant of. relief of specificperformance. This court finds that the respondent plaintiffwas not entitled the relief of specific performance.”

19. It was argued that the deceased G. Venugopala Rao hadperformed his part of obligation, while Respondent No. 1 failed to performher part of the agreement with regard to the payment of balance saleconsideration within three months as stipulated by the agreement. Itwas submitted that the deceased G. Venugopala Rao sent the first noticeto Respondent No. 1 herein on 02.01.2003, i.e., after four months fromthe date of signing of the sale agreement. Respondent No. 1 sent a replynotice stating that the deceased G. Venugopala Rao had not got theproperty measured and demarcated, and the property was attached inO.S. No. 188 of 2002. In rejoinder to the said reply notice, the deceasedG. Venugopala Rao stated that the land been measured and further askedRespondent No. 1 herein to deposit the balance consideration in O.S.No. 188 of 2002. In his evidence, PW 1 admitted that the scheduleproperty was within specific boundaries bounded by survey stones.Following the deceased G. Venugopala Rao’s rejoinder notice, the Plaintiff(Respondent No. 1 herein) did not pay the balance sale consideration 1 1995 (5) SCC 115

2 2022 SCC OnLine SC 840

AB

C

D

E

F

G

H

Aand remained silent for 14 months, and when the price of the propertyhad increased substantially, she gave another legal notice to the deceasedG. Venugopala Rao’s legal heirs (including the Appellants herein), whichwas followed by the suit for specific performance. Now, the marketvalue property has gone up manifold and it is around Rs.1,50,000 pergadi. Therefore, directing the Appellants herein to execute the sale deedBfor the original price after 20 years would undue loss to the Appellantsherein. Reliance in this regard was placed on this Court’s judgment inNanjappan vs Ramasamy & Anr.[3]

20. The learned Senior Counsel further contended that the saleagreement was for 90 cents of land at the rate of Rs. 2,200 per Gadi.CBut, the suit was filed by the Plaintiff for with regard to land to theextent of 50 cents only. As per Section 12 (1) of the Specific Relief Act,the plaintiff cannot seek to enforce the contract for a lesser extent. Tosupport his contention, the learned Senior Counsel relied on this Court’sjudgment in Jaswinder Kaur vs Gurmeet Singh & Ors[4]. It was alsoDargued that the deceased G. Venugopala Rao’s mother (who was hisclass 1 legal heir and a necessary party having 1/4[th] share in the suitschedule property) was not impleaded in the suit. The Trial Court hadspecifically held that the suit cannot be decreed in the absence of anecessary party, but the High Court ignored this aspect. Lastly, it wasargued that the Appellants herein are minors, and, in the High Court, theEPlaintiff had shown them as being represented by their maternalgrandmother. But, when the appeal was taken up, there was norepresentation for the minors. When the guardian of the minors had noteffectively defended the cause of the minors, then, as per Order 32 Rule11 of the Code of Civil Procedure, 1908, the Court has to suo motu Fappoint a new guardian and proceed to adjudicate the appeal thereafter.In the present case, the High Court simply proceeded to dispose theappeal ex-parte which is not legally sustainable.

21. Per contra, Mr. C. Mohan Rao, learned Senior Counselappearing on behalf of the Respondents argued that the present CivilGAppeal is liable to dismissed with costs in view of the detailed judgmentof the High Court, which was passed after minutely examining theevidence on record. The learned Senior Counsel contended that thedeceased G. Venugopala Rao entered into a sale agreement with 3 (2015) 14 SCC 341H4 2017 (12) SCC 810

Respondent No. 1 herein with regard to 90 cents of land. Out of the said90 cents, he was the owner of 50 cents which he had purchased fromone Smt. Balsa Allvelu Magamma. The deceased G. Venugopala Raoclaimed that he had an agreement with Smt. Balsa Allvelu Magamma inrespect of the remaining 40 Cents, and agreed to sell the entire 90 Centsof land to Respondent No. 1herein at the rate of Rs.2200/-per Gadi.Respondent No. 1 paid an advance amount of Rs.4,00,000/- towardssale consideration. The agreement specifically stipulated that the landshall be demarcated within 3 months from the date of agreement, withthe boundaries as indicated inthe agreement in respect of 90 cents land.However, the deceased G. Venugopala Rao did not carry out thedemarcation of land as stipulated in the agreement. Moreover, on18.11.2002, i.e., immediately after completion of three months of thesale agreement on 14.11.2002, the deceased G. Venugopala Rao executedtwo simple mortgages covering 25 cents each in favour of his closerelatives, who were Defendant No.s 4 and 5 in the suit. The deceasedG. Venugopala Rao concealed this fact from Respondent No. 1 hereinand issued a legal notice dated 02.01.2003 seeking payment of the balanceamount of Rs.7,88,000/-. Respondent No. 1 replied to the said noticeand pointed out that the balance consideration amount was to be paidafter the land is measured and boundaries are fixed in terms of theagreement. In her reply, Respondent No. 1 also mentioned that she cameto know that the property in question was attached in a money recoverysuit filed against the deceased G. Venugopala Rao by one Ch.Subbayamma. Respondent No. 1 called upon the deceased G. VenugopalaRao to remove the attachment and perform his part of contract andstated that she is ever ready to perform her part of contract by payingthe balance sale consideration. Meanwhile, Smt. Allvelu Magamma soldthe aforementioned 40 cents of land to some third party, and the deceasedG. Venugopala Rao could sell only 50 cents of land to Respondent No. 1herein. Under these circumstances, Respondent No. 1 filed a suit forspecific performance of the sale agreement regarding 50 cents of land.The learned Senior Counsel further stated that during trial of the suit, thehusband of Respondent No. 1 was examined as PW1 and he deposedthat he and his wife have sufficient means to pay the balance amountand they were ever ready to perform their part of the contract. It wasfurther pointed out by the learned Senior Counsel that the Trial Courterroneously held “....... Admittedly no such documents were filed intocourt to show as on the date of agreement of sale or as on date ofexpiry of three months time they were having Rs.11,88,000/-.”, AB

C

D

E

F

G

H

812SUPREME COURT REPORTS

AANALYSIS:

22. We have carefully considered the rival contentions of thelearned Senior Counsel appearing for the parties and perused the entirerecords. The only issue involved in the instant appeal before us is:- Whether the High Court was justified in allowing RespondentBNo. 1’s appeal and decreeing the suit for specificperformance, by holding that the deceased G. Venugopala Raoand his legal heirs (including the Appellants herein) failed toperform their obligation with regard to getting the propertymeasured and demarcated, while Respondent No. 1 hereinCwas always ready and willing to perform her part of contractby paying the balance sale consideration?

23. At the outset, we would like to mention that Section 16 (c) ofthe Specific Relief Act, 1963 (along with its explanation) is the relevantprovision of law which is attracted in the present case, and as has alsoDbeen held by the High Court. The 2018 Amendment to the SpecificRelief Act made certain amendments to Section 16 as well. However, ithas been clarified in the recent 3-Judge Bench[5] judgment of this Courtin Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd. &Ors.[6], that the 2018 Amendment was not a mere procedural enactment,but it had substantive principles built into its working, and, as such, theEsaid Amendment is prospective in nature and cannot apply to thosetransactions that took place prior to its enforcement. Therefore, in thepresent case, Section 16, as it stood prior to the 2018 Amendment, wouldbe applicable, since the matter dates back to 2002. Section 16 (as it thenstood) is being reproduced hereunder:- F“16. Personal bars to relief.— Specific performance of acontract cannot be enforced in favour of a person—

(a) who would not be entitled to recover compensation for itsbreach; or (b) who has become incapable of performing, or violates anyGessential term of, the contract that on his part remains to beperformed, or acts in fraud of the contract, or wilfully acts at 5 Coram: CJI N.V. Ramana (as he then was), Krishna Murari (Author) and Hima Kohli,JJ.H6 (2023) 1 SCC 355

variance with, or in subversion of, the relation intended to beestablished by the contract; or

(c) who fails to aver and prove that he has performed or hasalways been ready and willing to perform the essential termsof the contract which are to be performed by him, other thanterms of the performance of which has been prevented orwaived by the defendant.

Explanation.— For the purposes of clause (c),—

(i) where a contract involves the payment of money, it is notessential for the plaintiff to actually tender to the defendantor to deposit in court any money except when so directedby the court;

(ii) the plaintiff must aver performance of, or readiness andwillingness to perform, the contract according to its trueconstruction.”

24. On a bare perusal of the aforementioned section, it becomesclear that prior to the 2018 Amendment, clause (c) of Section 16 laiddown that the plaintiff is entitled for a specific performance of contractif he avers and proves that he has performed or has always been readyand willing to perform his obligation under the contract. The explanationattached to clause (c) further clarified that in a contract involving thepayment of money, the plaintiff need not actually deposit the money tothe defendant, and that he must aver that he has performed, or is readyand willing to perform the contract according to its true construction.

25. Before delving further into the discussion of Section 16 (c) ofthe Act, we would like to trace a bit of history of the said provision. Theold Specific Relief Act of 1877 did not contain any express provisionregarding the averment of readiness and willingness as being necessaryin a suit for specific performance, but this was the law of the land. Asearly as 1928, Their Lordships of the Privy Council in Ardeshir H.Mama vs Flora Sassoon[7], while taking note of the fact that there wasan absence of an express provision in Indian law regarding readinessand willingness, held that the requirements of Indian and English law inthis matter are the same.

B

C

D

E

F

G

B

C

D

E

F

G

A26. In the present case, the High Court while discussing Section16 (c) of the Specific Relief Act, 1963 (hereinafter referred to as ‘Act’),observed that it is necessary for the Plaintiff to perform his part of thecontract from the date of contract till the date of hearing. The HighCourt also stated that it is fairly well settled that mere stipulation of timewould not make time the essence of the contract and in case of sale ofBimmovable property normally the time may not be essence of the contract.It was also stated that the explanation to Section 16 (c) of the Act providesthat there must be pleading by the Plaintiff that he was always readyand willing to perform his part of contract. The High Court then notedthat a specific plea was taken by the Plaintiff in her plaint that she wasCready and willing to perform her part of the contract. Moreover, PW1(Plaintiff’s husband who testified on her behalf) categorically stated thathe and the Plaintiff were ever ready to perform their part of contractwith regard to the payment of the balance sale consideration, but theDefendants failed to perform their part of the obligations. At this juncture,the High Court took note of a very crucial fact that the aforementionedDpart of the evidence (with regard to the Plaintiff’s readiness andwillingness) was not challenged by the counsel appearing for DefendantNo.s 1 to 3 in the Trial Court, and when a fact has been stated bywitness and the same has not been challenged, it can be said that such afact is admitted. PW2 (scribe of the sale agreement) categorically statedEthat it was agreed that the extent of land would be measured for thepurpose of calculation at the time of the execution of the sale deed.Therefore, it was observed that the recitals in the sale agreement coupledwith the evidence of PW1 and PW2 shows that the extent of land has tobe measured within three months, and unless the land is measured anddemarcated, it would be impossible for the Plaintiff to get a sale deedFexecuted, and as such, the question of paying the balance saleconsideration does not arise. The High Court was of the view that theobligation with regard to the demarcation of the property was notperformed by either the deceased G. Venugopala Rao or his legal heirs(Defendants in the suit, including the Appellants herein) thereafter, whileGthe Plaintiff had established that she was always ready and willing toperform her part of contract by paying the balance sale considerationwhich is the primary requirement as per Section 16 (c) of the Act. Itwas held that these aspects were not considered by the Trial Court andthere was no appreciation of evidence with reference to Section 16 (c)of the Act.H

27. In Syed Dastagir vs T.R. Gopalakrishna Setty[8], it washeld, “the language in Section 16 (c) does not require any specificphraseology but only that the plaintiff must aver that he hasperformed or has always been and is willing to perform his part ofthe contract. So, the compliance of “readiness and willingness”has to be in spirit and substance and not in letter and form.”

28. In Aniglase Yohannan vs Ramlatha & Ors.[9], this Courtheld:- “11. Lord Campbell in Cort v. Ambergate, Nottingham andBoston and Eastern Junction Rly. Co. [(1851) 117 ER 1229 :17 QB 127] observed that in common sense the meaning ofsuch an averment of readiness and willingness must be thatthe non-completion of the contract was not the fault of theplaintiffs, and that they were disposed and able to completeit, had it not been renounced by the defendant.

12. The basic principle behind Section 16(c) read withExplanation (ii) is that any person seeking benefit of thespecific performance of contract must manifest that hisconduct has been blemishless throughout entitling him to thespecific relief. The provision imposes a personal bar. The Courtis to grant relief on the basis of the conduct of the personseeking relief. If the pleadings manifest that the conduct ofthe plaintiff entitles him to get the relief on perusal of theplaint he should not be denied the relief.”

29. In our view, the High Court has rightly held that the deceasedG. Venugopala Rao or his legal heirs (Defendants in the suit, includingthe Appellants herein) failed to perform their obligation with regard tothe demarcation of the property, while the Plaintiff had established thatshe was always ready and willing to perform her part of contract bypaying the balance sale consideration which is the primary requirementas per Section 16 (c) of the Act.

30. In light of the aforementioned Aniglase Yohannan judgment(supra), and as held by the High Court, the primary requirement to seekrelief under Section 16 (c) of the Act is that the Plaintiff was ever readyand willing to perform his part of the contract. It is clear from the facts 8 (1999) 6 SCC 3379 (2005) 7 SCC 534

AB

C

DE

F

G

H

Aof the case at hand that the Plaintiff (Respondent No. 1 herein) wasever ready and willing to pay the balance sale consideration. In the saleagreement, it was clearly mentioned that within three months the deceasedG. Venugopala Rao will get the suit schedule property measured anddemarcated and the Plaintiff (Respondent No. 1 herein) shall pay thebalance sale consideration. It appears that, at first, the deceased G.BVenugopala Rao while agreeing to sell 90 cents of land, concealed thathe is the owner of only 50 cents of the land. Subsequently, he failed tomeasure and demarcate the land. On the other hand, the Plaintiff(Respondent No. 1 herein), from the outset, has been clear andblemishless in his conduct. She had paid the advance sale considerationCof Rs. 4,00,000/-. When the deceased G. Venugopala Rao failed tomeasure and demarcate the land, the question of the Plaintiff (RespondentNo. 1 herein) paying the balance sale consideration does not arise.However, even then the averments of the Plaintiff, her conduct and thetestimony of her husband show that the Plaintiff, since the signing of the sale agreement, was ever ready and willing to pay the balanceDconsideration.

31. The Appellants have contended that Respondent No. 1(Plaintiff) was not having sufficient funds to pay the balance saleconsideration. On the other hand, as noted above, Respondent No. 1 hasbeen ever ready and willing to pay the balance sale consideration. InEGomathinayagam Pillai & Ors. vs Palaniswami Nadar[10], this Courtreferred to the judgment of Their Lordships of the Privy Council in Bankof India Limited vs Jamsetji A.H. Chinoy and Chinoy and Company[11].The relevant portion of the said judgment is reproduced as under:

“18. …….In Bank of India Limited v. Jamsetji A.H. ChinoyFand Chinoy and Company [(1949) LR 77 IA 76] the PrivyCouncil decreed specific performance of the contract to sellshares. On the question of readiness and willingness of thebuyer to perform the contract, Lord MacDermott observed atp. 91 of the Report:G“It is true that the first plaintiff stated that he was buying forhimself, that he had not sufficient ready money to meet theprice and that no definite arrangements had been made forfinding it at the time of repudiation. But to prove himself ready 10 (1967) 1 SCR 227H11 (1949) LR 77 IA 76

and willing a purchaser has not necessarily to produce themoney or to vouch a concluded scheme for financing thetransaction.””

Therefore, even if the aforementioned contention of the Appellantsherein was to be considered, the same does not have any substance, asthe Plaintiff has successfully established her readiness and willingnessto perform her part of the contract by paying the balance saleconsideration.

32. Before parting with the judgment, we would like to clarifyanother aspect, i.e., with regard to whether time is of the essence in thesale agreement in the present case or not. In Siddamsetty InfraProjects (P) Ltd. (supra), this Court was dealing with a similar questionwith respect to a sale agreement for an immovable property, whilereferring to an earlier judgment in Chand Rani v. Kamal Rani,[12] it wasreiterated that in sale of immovable property there is no presumptionthat time is the essence of the contract, however, the court may inferperformance in a reasonable time if the conditions are evident from theexpress terms of the contract, from the nature of the property, andfrom the surrounding circumstances.

33. However, the set of facts and circumstances in Siddamsetty(supra) were substantially different from the case at hand. The relevantportion of the said judgment is reproduced as under:

“33. At the outset, this Court has perused Clause 3 of theagreements, which is in two parts. The first part provides forthe purchaser’s obligation, while the second part details theobligation of the vendors to provide the requisite certificates.Although both the obligations were required to be completedwithin the stipulated period of three months, there is asubstantive difference between these two sets of obligations.The obligation upon the vendors concerned was productionof certain certificates, such as income tax exemption certificateand agriculture certificate. No consequences were spelt outfor non-performance of such obligations. Whereas theobligation on the purchaser, was to make the complete paymentof the sale consideration within three months. The clausefurther mandates forfeiture of the advance amount if the A

B

C

D

E

F

G

H

Apayment obligation is not met within the time period stipulatedtherein.

34. In this context, this Court in Chand Rani v. KamalRani [Chand Rani v. Kamal Rani, (1993) 1 SCC 519] , heldas under : (SCC p. 528, para 25)

B

“25. From an analysis of the above case law it is clearthat in the case of sale of immovable property there is nopresumption as to time being the essence of the contract.Even if it is not of the essence of the contract the courtmay infer that it is to be performed in a reasonable time ifCthe conditions are evident:

1. From the express terms of the contract;

2. From the nature of the property; and

3. From the surrounding circumstances, for example : theDobject of making the contract.”

…..

73. From the above, we can safely conclude that the purchaserwas not ready or willing to perform his part of the contractwithin the time stipulated and accordingly, specificEperformance cannot be granted for the entire contract. “

34. From a perusal of the above extracted portion of Siddamsetty(supra), it is clear that in the said case, the agreement stipulated thatboth the purchaser as well as the vendor were to fulfil their obligationwithin three months. But, in case of non-compliance of the vendor’sFobligations (of producing certain documents) within three months, noconsequences were mentioned; whereas, on the other hand, in case ofnon-compliance of the purchaser’s obligations (of paying the balancesale consideration) within three months, the advance amount would beforfeited. This Court while concluding that the purchaser was not readyor willing to perform his part of the contract within the stipulated timeGperiod, denied to grant specific performance for the entire contract.However, what is to be seen in the present case, is that the sale agreementdated 14.08.2002 stipulated that the vendor (deceased G. VenugopalaRao) was required to get the land measured and demarcated withinthree months, following which, the purchaser (Respondent No. 1 hereinH/Plaintiff) was required to pay the balance sale consideration. So, it can be clearly observed that the performance of the purchaser’s obligationto pay the balance sale consideration within three months is dependentupon the fulfilment of the vendor’s obligation to get the land measuredand demarcated within three months.

35. Therefore, it can be deduced that unless the vendor got thesubject land measured and demarcated within three months, it would beimpossible for the purchaser (Respondent No. 1 herein/Plaintiff) to geta sale deed executed, and as such, the question of paying the balancesale consideration does not arise. This was also observed by the HighCourt while placing reliance on the recitals in the sale agreement coupledwith the evidence of PW1 and PW2. Moreover, as has been held above,it is clear that the vendor (deceased G. Venugopala Rao) failed to performhis part of the obligations by getting the subject land measured anddemarcated, while the purchaser (Respondent No. 1 herein/Plaintiff)was ever ready and willing to pay the balance consideration. As such,when specific performance of the terms of the contract has not beendone, the question of time being the essence does not arise. In this way,the facts of the present case are distinguishable from that of Siddamsetty(supra), andthe Appellants herein cannot claim that time was of theessence of the contract.

36. In view of the above, we are of the considered opinion thatthe High Court was justified in allowing the appeal and decreeing thesuit for specific performance filed by Respondent No. 1 herein. Thefindings of the High Court are hereby upheld. The present appeals, inour view, have no merit and are liable to be dismissed.

37. Accordingly, both the appeals are dismissed, and the judgmentdated 05.10.2010 as well as order dated 10.12.2010, passed by the HighCourt are affirmed. However, in the facts and circumstances of thecase, we do not make any order as to costs.

Ankit Gyan(Assisted by : Mahendra Yadav, LCRA)

Appeals dismissed.

A

B

C

D

E

F

G

H