K.S. Balachandra vs A.V. Anuradha

APHC010070862019 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3397] (Special Original Jurisdiction)

TUESDAY ,THE SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA KRISHNA RAO

SECOND APPEAL NO: 776/2019

Between:

K.s. Balachandra ...APPELLANT

AND

A V Anuradha ...RESPONDENT

Counsel for the Appellant:

1. PILLIX LAW FIRM

Counsel for the Respondent:

1. S LAKSHMINARAYANA REDDY

The Court made the following:

VENUTHURUMALLI GOPALA KRISHNA RAO,J THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO SECOND APPEAL No.776 OF 2019 Judgment:

This second appeal under Section 100 of the Code of Civil Procedure ("C.P.C." for short) is filed aggrieved against the Judgment and decree, dated 11.10.2018 in A.S.No.124 of 2016, on the file of the II Additional District Judge, Hindupur, reversing the Judgment and decree, dated 21.01.2016 in O.S.No.180 of 2011, on the file of Senior Civil Judge, Hindupur.

2. The appellant herein is the Plaintiff and the respondent herein is the defendant in O.S.No.180 of 2011, on the file of Senior Civil Judge, Hindupur.

3. The plaintiff initiated action in O.S.No.180 of 2011, on the file of Senior Civil Judge, Hindupur, with a prayer for specific performance of agreement of sale, dated 13.07.2009 executed by the defendant in favour of the plaintiff.

4. The learned Senior Civil Judge, Hindupur, decreed the suit with costs. Felt aggrieved of the same, the unsuccessful defendant in the above said suit filed A.S.No.124 of 2016, on the file of the II Additional District Judge, Hindupur. The learned II Additional District Judge, Hindupur, allowed the appeal by setting aside the decree and judgment passed by the learned Senior Civil Judge, Hindupur. Aggrieved thereby, the unsuccessful plaintiff approached this Court by way of second appeal.

5. For the sake of convenience, both parties in the appeal will be referred to as they are arrayed in the original suit.

6. The case of the plaintiff, in brief, as set out in the plaint averments in O.S.No.180 of 2011, is as follows:

The defendant is the absolute owner of the suit schedule property, who intended to sell the same to the plaintiff for a total sale consideration of Rs.7,50,000/- and executed an agreement of sale in favour of the plaintiff on 13.07.2009, after receiving an advance of Rs.1,50,000/-. The plaintiff agreed to pay the balance of sale consideration within four months. The defendant agreed to produce link documents and encumbrance certificate. The plaintiff also agreed to obtain „No Objection Certificate" from the concerned authorities with his own expenses. The plaintiff is always ready and willing to obtain registered sale deed. The District Collector, Ananthapuram issued „No Objection Certificate" on 08.06.2011. The plaintiff issued notice, dated 01.12.2011, demanding the defendant to execute registered sale deed. The defendant did not come forward and execute registered sale deed. Hence the suit.

7. The defendant filed written statement before the trial Court by denying the averments in the plaint. The brief averments in the written statement are as follows:

The plaintiff did not pay the balance of sale consideration within stipulated four months time. The plaintiff did not issue any legal notice to the defendant as required under law. In the month of July, 2011 one Tirupataiah and Aswarthappa approached the defendant at Kurnool and they informed that the plaintiff was not willing to perform his part of the contract and requested to enter into fresh agreement of sale and offered to pay Rs.2,50,000/-. The plaintiff expressed his unwillingness to perform the part of the contract to the husband of the defendant over phone. Then the defendant executed fresh agreement of sale in favour of Tirupataiah and Ramakrishnamma by receiving advance amount of Rs.2,50,000/-. They promised to get the agreement of sale from the plaintiff. They agreed to pay the balance of sale consideration of Rs.3,50,000/- within three months. The plaintiff, Tirupataiah and Ramakrishnamma failed to pay the balance of sale consideration under the new agreement of sale, dated 09.07.2011. The said agreement is stands cancelled. The plaintiff was never ready and willing to obtain registered sale deed. Therefore, the defendant requested to dismiss the suit with costs.

8. On the basis of above pleadings, the learned Senior Civil Judge, Hindupur, framed the following issues for trial:

(1) Whether the plaintiff is entitled for specific performance of contract against the defendant as prayed for?

(2) To what relief?

9. During the course of trial in the trial Court, on behalf of the plaintiff, P.W.1 was examined and Exs.A.1 to A.6 were marked. On behalf of the defendant, D.W.1 to D.W.3 were examined and Ex.B.1 to Ex.B.3 were marked.

10. The learned Senior Civil Judge, Hindupur, after conclusion of trial, on hearing the arguments of both sides and on consideration of oral and documentary evidence on record, decreed the suit with costs. Felt aggrieved thereby, the unsuccessful defendant filed the appeal suit in A.S.No.124 of 2016, on the file of the II Additional District Judge, Hindupur, wherein, the following point came up for consideration:

Whether the decree and judgment passed by the learned Senior Civil Judge, Hindupur in O.S.No.180 of 2011, dated 21.01.2016 are liable to be set aside?

11. The learned II Additional District Judge, Hindupur i.e., the first appellate Judge, after hearing the arguments, answered the point, as above, against the plaintiff and allowed the appeal filed by the defendant by setting aside the decree and judgment passed by the trial Court. Felt aggrieved of the same, the unsuccessful plaintiff in O.S.No.180 of 2011 filed the present second appeal before this Court.

12. On hearing both side counsels at the time of admission of the appeal, on 06.12.2019, this Court framed the following substantial question of law:

Whether the lower appellate Court erred in reversing the decree of the trial Court and dismissed the suit, without considering the reciprocal promises under the suit agreement and their order of performance under Section 52 of the Indian Contract Act, 1872?

13. Heard Sri P. Aditya Harshavardhan, learned counsel appearing for the appellant and heard Sri S. Laxminarayana Reddy, learned counsel appearing for the respondent.

14. Learned counsel for the appellant would contend that the decree and judgment, dated 11.10.2018 passed by the learned 1st appellate Judge in reversing the decree and judgment of the trial Court is contrary to law. He would further contend that the 1st appellate Court ought to have considered the documentary evidence of the plaintiff i.e., Ex.A.1 to Ex.A.6 and ought to have rejected the documentary evidence of defendant i.e., Ex.B.1 to Ex.B.3, as being legally improper, inadmissible and unapproved. He would further contend that the 1st appellate Court ought to have considered the oral evidence of P.W.1 and admissions made by D.W.1 to D.W.3 in proper perspective manner. He would further contend that the 1st appellate Court grossly erred in observing that the plaintiff kept quiet for over two years from the date of Ex.A.1 and after two years the plaintiff has given Ex.A.2 legal notice. He would further contend that the decree and judgment passed by the 1st appellate Court is contrary to law and the same may be liable to be set aside by allowing the appeal.

15. Per contra, learned counsel for the respondent would contend that on re-appreciation of the entire evidence on record, the learned 1st appellate Judge rightly allowed the appeal by reversing the decree and judgment passed by the learned trial Judge and there is no need to interfere with the finding given by the learned 1st appellate Judge.

16. The suit is based on Ex.A.1 agreement of sale said to have been executed by the defendant. The plaintiff herein is claiming the relief of specific performance of agreement of sale, dated 13.07.2009, but the alternative relief of refund of amount is not sought by the plaintiff. The recitals in Ex.A.1 agreement of sale goes to show that the defendant agreed to sell the plaint schedule property to the plaintiff for Rs.7,50,000/- and the plaintiff paid an advance amount of Rs.1,50,000/- on the date of agreement itself and the defendant agreed to execute a registered sale deed in favour of the plaintiff. A specific condition was incorporated in Ex.A.1 agreement of sale in between both parties that four months time was fixed for performance of the contract. The specific recitals incorporated in Ex.A.1 agreement of sale is the plaintiff has to pay the remaining balance sale consideration of Rs.6,00,000/- within four months i.e., on or before 13.11.2009 and later obtain sale deed and the defendant has to handover the encumbrance certificate and link documents to the plaintiff. The main recital incorporated in Ex.A.1 agreement of sale is the plaintiff has to obtain „No Objection Certificate‟ from the competent authority with his own expenses. The crucial condition made by both parties in Ex.A.1 agreement of sale is if the plaintiff failed to pay the remaining balance sale consideration of Rs.6,00,000/- within four months from the date of Ex.A.1 agreement of sale, the advance amount paid by the plaintiff has to be forfeited.

17. The legal position in this regard is no more res-integra. The law is well settled that grant of relief of specific performance of agreement of sale is not an automatic and it is a discretionary relief, the same has to be required to be exercised judiciously, sound and reasonably. As stated supra, Ex.A.1 agreement of sale is a crucial document based on which the suit is filed. The execution of Ex.A.1 agreement of sale by the defendant is not in dispute. It is not in dispute that the defendant received an advance amount of Rs.1,50,000/- from the plaintiff under Ex.A.1 agreement of sale and four months time was fixed for performance of the contract of both parties and also the plaintiff has to pay the remaining balance sale consideration of Rs.6,00,000/- within four months, otherwise, the advance amount will be forfeited. The law is very clear that whether the time is essence of contract cannot be considered merely based on agreement for deciding the fixation of time limit.

"The Courts should bear in mind that when the parties prescribed certain time limit for taking steps by one party or the other party, it must have some significance and the said time limit cannot be ignored altogether."

18. The learned counsel for the appellant placed reliance of Gaddipati Divija and another vs. Pathuri Samrajyam and others 1 wherein the Apex Court held as follows:

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

"25. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the court may infer that it is to be performed in a reasonable time if the 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 : the object of making the contract." .....

73. From the above, we can safely conclude that the purchaser was not ready or willing to perform his part of the contract within the time stipulated and accordingly, specific performance cannot be granted for the entire contract. "

In the present case on hand, there was a specific recital that the plaintiff has to pay the remaining balance sale consideration of Rs.6,00,000/- from out of Rs.7,50,000/- within four months and the plaintiff has to obtain „No

1 2023 LiveLaw (SC) 327 Objection Certificate‟ within the stipulated period of contract and he has to obtain registered sale deed from the defendant. Admittedly, no steps have been taken by the plaintiff within four months from the date of Ex.A.1 agreement of sale. For the first time, after lapse of 2 ½ years from the date of Ex.A.1 agreement of sale, the plaintiff got issued Ex.A.2 legal notice. The contention of the defendant is that in the month of July, 2011 one Tirupataiah and Aswarthappa approached him at Kurnool and they informed that the plaintiff was not willing to perform his part of contract and requested him to enter into fresh agreement of sale and offer to pay Rs.2,50,000/-. It is further contention of the defendant that the plaintiff expressed his unwillingness to perform the part of the contract and informed the same to the husband of the defendant over phone. The defendant further specifically pleaded that the plaintiff, Tirupataiah and Ramakrishnamma failed to pay the balance of sale consideration under Ex.B.2 agreement of sale and that the said agreement of sale is also stands cancelled. As noticed supra, the suit is filed based on Ex.A.1 agreement of sale by the plaintiff alone, but not on the basis of Ex.B.2 said to have been executed by plaintiff, Tirupataiah and Ramakrishnamma. Ex.B.2 is said to have been executed in favour of K.S. Balachandra, Ramakrishnamma and Tirupataiah. The suit has not filed based on Ex.B.2. The suit is filed based on Ex.A.1 agreement of sale said to have been executed by the defendant in favour of the plaintiff. As stated supra, the execution of Ex.A.1 agreement of sale and receipt of advance amount of Rs.1,50,000/- from out of Rs.7,50,000/- under Ex.A.1 agreement of sale is not at all disputed by both parties.

19. The contention of the plaintiff is that the defendant has to obtain „No Objection Certificate‟ as per the recitals in Ex.A.1 agreement of sale. I have perused Ex.A.1 agreement of sale. The recitals in Ex.A.1 agreement of sale goes to show that the plaintiff has to obtain „No Objection Certificate‟ from the revenue authorities with his expenses. As per the plaint averments, the plaintiff obtained „No Objection Certificate‟ from the District Collector, Ananthapuram on 08.06.2011. The plaintiff also not issued any legal notice within four months from the date of receipt of „No Objection Certificate‟ by informing the defendant that he is ready and willing to pay the balance sale consideration. The fact remains that the legal notice was said to have been issued on 01.12.2011 nearly after six months from the date of receipt of „No Objection Certificate‟ from the revenue department. P.W.1 also admitted in his evidence in cross examination that after getting „No Objection Certificate‟, he did not issue any notice to the defendant requesting her to come and execute the registered sale deed in his favour in respect of the plaint schedule property.

20. The specific case of the plaintiff is that though he is ready to discharge his part of contract, the defendant did not come forward. In order to prove the same, except relying on sole testimony of plaintiff as P.W.1, no other evidence is adduced by the plaintiff.

21. The legal position in this regard is no more res-intergra and the same bas been well settled by the Apex Court in K.S. Vidyanadam and others vs. V.S. Vairavan2 that;

"the Court should bear in mind that when the parties prescribed certain time limit for taking steps by one party or the other party, it must have some significance and that the said time limit cannot be ignored altogether on the ground that the time has not been made the essence of the contract relating to immovable property."

In a case of Shenbagam and others vs. K.K. Rathinavel3, the Apex Court held as follows:

"True enough, generally speaking, time is not of the essence in an agreement for the sale of immoveable property. In deciding whether to grant the remedy of specific performance, specifically in suits relating

2 (1997) 3 SCC 1 3 2022 SCC OnLine SC 71 to sale of immovable property, the courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault."

In a case of Gaddipati Divija and another vs. Pathuri Samrajyam and others4, the Apex Court held as follows:

"Before parting with the judgment, we would like to clarify another aspect, i.e., with regard to whether time is of the essence in the sale agreement in the present case or not. In Katta Sujatha Reddy vs. Siddamsetty Infra Projects (P) Ltd., (2023) 1 SCC 355, this Court was dealing with a similar question with respect to a sale agreement for an immovable property, while referring to an earlier judgment in Chand Rani v. Kamal Rani, (1993) 1 SCC 519 it was reiterated that in sale of immovable property there is no presumption that time is the essence of the contract, however, the court may infer performance in a reasonable time if the conditions are evident from the express terms of the contract, from the nature of the property, and from the surrounding circumstances."

The law on the subject of specific performance of contract is quite clear in The Holiness Acharya Swami Ganesh Dassji vs. Sita Ram Thapar5, the Apex Court draw the attention between readiness to perform the contract and willingness to perform the contract. It was observed that by readiness may be meant the capacity of the plaintiff to perform the contract which was included his financial position to pay the purchase price. As far as the willingness to perform the contract is concerned, the conduct of the plaintiff has to be properly scrutinized along with the attendant circumstances.

4 2023 SCC OnLine SC 442 5 (1996) 4 SCC 526

22. It is also well settled that the plaintiff is required to prove that from the date of execution of Ex.A.1 agreement of sale till the date of decree, he was ready and willing to perform his part of the contract. In this case looking attendant facts and circumstances, the 1st appellate Court rightly came to a conclusion that the entire fault lies on the plaintiff and that the main relief of specific performance of agreement of sale is negatived by the 1 st appellate Court. The fact remains that though four months time has been stipulated in Ex.A.1 agreement of sale, the plaintiff failed to discharge his part of the contract and failed to come forward within four months from the date of Ex.A.1 agreement of sale to pay the remaining balance sale consideration of Rs.6,00,000/- from out of Rs.7,50,000/-. The fact remains a paltry amount of Rs.1,50,000/- has been paid on the date of agreement under Ex.A.1 and after 2 ½ years from the date of Ex.A.1 agreement of sale, the plaintiff has issued a legal notice under Ex.A.2 to the defendant. Therefore, there are so many latches on the part of the plaintiff, those cannot be thrown out. In Lourdu Mari David and others vs. Louis Chinnaya Arogiaswamy and others 6, it was held that a person who comes to Court with a false plea is not entitled to the relief of specific performance of agreement of sale.

It is also well settled that the remedy for specific performance is an equitable one, the said equitable discretion to grant or not to grant a relief for specific performance would depend upon the conduct of the parties and necessary ingredients have to be proved and established by the plaintiff so that discretion would be exercised judiciously.

It is also well settled that if the defendant does not come to the court with clean hands and suppress material facts and evidence or misleads the court then such discretion should not be exercised by refusing to grant specific performance.

6 (1996) 5 SCC 589

23. As stated supra, in a suit for specific performance the plaintiff should plead and prove that he was always ready and willing to perform his part of contract from the date of Ex.A.1 agreement of sale till the date of filing of the suit. Mere taking a plea in the plaint itself is not sufficient, the plaintiff would prove with cogent evidence of his readiness and willingness to perform his part of contract at all material point of time from the date of contract till the date of suit. Admittedly, in the case on hand, there is no evidence on record to show that the plaintiff has always ready and willing to perform his part of contract from the date of Ex.A.1 agreement of sale, though there was a stipulation of time of four months for performing the part of contract. The fact remains that the plaintiff did not move his little finger to obtain „No Objection Certificate‟ from the competent authority and to pay the balance sale consideration within four months to the defendant as stipulated in Ex.A.1 agreement of sale. The reasons offered by the plaintiff for the delay or omission on the part of the plaintiff to take any steps in the matter are obviously untrue and it is clear that he is throwing blame on the defendant and finding out some reasons or other to explain the delay or omission to take any sale deed. The fact remains from the date of Ex.A.1 agreement of sale, the plaintiff remain silent for a period of more than 2 ½ years. As per the recitals of contract from out of Rs.7,50,000/- a paltry amount of Rs.1,50,000/- is paid and remaining balance has to be paid within four months, but the plaintiff has not come forward to pay the remaining balance sale consideration within a prescribed time. As per the recitals in Ex.A.1 agreement of sale, the plaintiff has to obtain „No Objection Certificate‟ with his expenses and he has to pay the remaining balance sale consideration of Rs.6,00,000/- within four months. But no steps have been taken by the plaintiff within a stipulated time or within two years from the date of Ex.A.1 agreement of sale. Therefore, by virtue of the time stipulation in Ex.A.1 agreement of sale, the time is essence of contract.

24. There are so many latches on the part of the plaintiff for performing his part of the contract. In the case on hand, admittedly, no evidence is produced by the plaintiff to prove his readiness and willingness on the part of his contract. The plaintiff pointed out Ex.B2 agreement of sale. The suit is not filed based on Ex.B2 agreement of sale. Ex.B2 is said to have been executed in favour of plaintiff herein and two others. In the case on hand, the plaintiff alone filed the suit based on Ex.A.1 agreement of sale, but not based on Ex.B.2. The factum of readiness and willingness to perform the part of contract is to be adjudged with reference to the conduct of the parties. The facts of the present case particularly the conduct of the plaintiff would amply demonstrate the plaintiff was not ready nor has any intention to perform his part of contract. Therefore, the plaintiff is not entitled main relief of specific performance of agreement of sale, dated 13.07.2009.

25. Learned counsel for appellant would contend in second appellate Court that "the trial Court negatived the relief of specific performance of agreement of sale, but alternative relief of refund of advance amount is not at all ordered by the 1st appellate Court". Admittedly, in the case on hand, the plaintiff has not sought the alternative relief of refund of advance amount. The plea of refund of advance amount is neither pleaded in the plaint nor sought before both the Courts below and therefore, the same cannot be granted in view of specific bar under Section 21 (5) of the Specific Relief Act.

26. In a case of Universal Petro-Chemicals Ltd., vs. B.P. PLC.7, the Apex Court held as follows:

The scope of Section 21 (4) and (5) was examined by this Court in Shamsu Suhara Beevi v. G. Alex and Another (2004) 8 SCC 569. This Court referred to the Law Commission of India‟s recommendation that in no case the compensation should be decreed, unless it is claimed by a proper pleading. However, the Law Commission was of the opinion that

7 (2022) 6 SCC 157 it should be open to the plaintiff to seek an amendment to the plaint, at any stage of the proceedings in order to introduce a prayer for compensation, whether in lieu or in addition to specific performance. In the said case no claim for compensation for breach of agreement of sale was claimed either in addition to or in substitution of the performance of the agreement. Admittedly, there was no amendment to the plaint asking for compensation either in addition or in substitution of the performance of an agreement of sale. In such background, this Court held as follows.

"In our view, the High Court has clearly erred in granting the compensation under Section 21 in addition to the relief of specific performance in the absence of prayer made to that effect either in the plaint or by amending the same at any later stage of the proceedings to include the relief of compensation in addition to the relief of specific performance. Grant of such a relief is in the teeth of express provisions of the statute to the contrary is not permissible. On equitable consideration court cannot ignore or overlook the provisions of the statute. Equity must yield to law."

Admittedly, in the case on hand, the relief of refund of advance amount has not been sought in the plaint. The plaintiff also did not amend the plaint and ask for compensation either in addition to or in substitution of the performance of agreement of sale. Sub section 5 of Section 21 of the Specific Relief Act empathically provides that no compensation shall be awarded under Section 21(5) of the Act unless the relief for compensation has been claimed either in the plaint or included later on by amending the plaint at any stage of the proceedings. Therefore, the plaintiff is also not entitled the alternative relief of refund of advance amount. As stated supra, there are so many latches on the part of the plaintiff, those latches cannot be thrown out and the plaintiff is not also entitled the main relief of specific performance of agreement of sale. On re-appreciation of the entire evidence on record, the learned 1st appellate Judge rightly allowed the appeal filed by the defendant by reversing the decree and judgment passed by the trial Court.

27. In the result, the second appeal is dismissed confirming the decree and judgment, dated 11.10.2018 in A.S.No.124 of 2016, passed by the learned II Additional District Judge, Hindupur. Each party do bear their own costs in the appeal.

As a sequel, miscellaneous petitions, if any, pending in the appeal shall stand closed.

_________________________ V. GOPALA KRISHNA RAO, J Date: 07.01.2025 PGR