Pydi Ramana @ Ramulu vs Davarasetty Manmadha Rao

2024 INSC 507 Non-reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.434 OF 2013

PYDI RAMANA @ RAMULU …APPELLANT(S)

VERSUS

DAVARASETY MANMADHA RAO …RESPONDENT(S)

JUDGEMENT

Aravind Kumar, J.

1. The appellant who is the original defendant before the trial Court

has preferred this appeal questioning the correctness and legality of the

judgment dated 07.06.2011 whereunder the second appeal filed by him in

S.A No.1282 of 2008 came to be partly allowed, confirming the order of Signature Not Verified Digitally signed by SWETA BALODI the appellate court passed in A.S. No.39 of 2004 which granted the relief Date: 2024.07.10 16:40:47 IST Reason:

of specific performance in favour of the plaintiff and directed the

1 respondent-plaintiff to pay additional sale consideration namely twice the

sale consideration.

2. We have heard the arguments of Shri B. Adinarayana Rao, learned

Senior Counsel appearing for appellant and Shri D. Bharat Kumar, learned

Counsel appearing for the respondent perused the records.

Brief Background

3. The respondent herein who was the plaintiff filed a suit for specific

performance of the agreement dated 07.06.1993 by contending inter alia

that appellant-defendant had agreed to sell the property measuring Ac.1.38

cents for a total consideration of Rs.705/- per cent as per the terms reduced

by way of an agreement executed on the same day whereunder plaintiff

claimed to have paid an advance amount of Rs.2,005/- and defendant

agreed to execute sale deed in favour of the plaintiff within one year after

getting the suit property surveyed. Further sum of Rs.17,000/- was paid by

the plaintiff to the defendant on 23.06.1993. It is the case of the plaintiff

that despite demand, the defendant postponed the execution of the sale

deed and as such plaintiff got issued a legal notice on 30.05.1996 to the

defendant for which no reply was received and as such suit for specific

performance of the agreement of sale dated 07.06.1993 or in the alternate

for the refund of the advance money paid with interest came to be filed.

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4. Upon service of suit summons defendant appeared and filed his

written statement and denied the averments made in the plaint in toto and

further contended that the legal notice was duly replied. There was a total

denial of sale transaction and it was also contended that one

Varahanarsimhan @ Varam had taken signature of the defendants on blank

stamp papers and plaintiff being closely related to the said person, had

created an agreement of sale of suit schedule property in order to get illegal

benefits. Hence, he prayed for dismissal of the suit.

5. The trial court on the basis of the pleadings of the parties framed

four issues and after examining the pleadings and evaluating the oral and

documentary evidence tendered by the parties, rejected the claim for

specific performance and granted the alternate relief namely ordered for

refund of the amount of Rs.37,436.80 with 24% interest per annum on the

said amount from the date of suit filed to till date of realisation. Being

aggrieved by the judgment and decree of the trial court namely refusal to

decree for specific performance, the unsuccessful plaintiff filed an appeal

against A.S. No.39 of 2004. The appellate court on reappreciation of

pleadings and evidence reversed the findings of the trial court and decreed

the suit in toto namely the relief of specific performance was granted in

favour of plaintiff.

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6. The defendant being aggrieved by the same filed second appeal

S.A No.1282 of 2008 which came to be allowed by judgment dated

07.06.20211 in part namely the plaintiff was directed to pay additional sale

consideration namely twice the sale consideration stipulated under the

agreement of sale.

7. It is the contention of the learned Senior Counsel appearing for the

appellant that trial court had rightly rejected the prayer for specific

performance on appreciation of evidence which finding did not suffer from

any infirmity whatsoever and as such the appellate court ought not to have

interfered with the findings of the trial court. It is further contended that

plaintiff had failed to lead any evidence or produce or tender proof that he

was ready and willing to perform his part of the contract continuously.

7.1 It is also submitted that the plaintiff having kept quiet for a period

of 2 years had got issued notice on 30.05.1996 i.e. after a period of 2 years

from the date of expiry period i.e. 06.06.1994 and no explanation has been

offered by the plaintiff.

7.2 It is the further submission of the learned Senior Counsel for the

appellant that plaintiff had not called upon the defendant to conduct survey

4 or measurement of the land and no fault could have been laid at the doors

of the defendant for not conducting survey of the suit land. It is further

submitted that agreement had stood cancelled for non-payment of balance

sale consideration within the stipulated time specified in the agreement and

time was the essence of the contract as could be clearly inferred from the

terms of the agreement dated 07.06.1993. Hence, the learned Senior

Counsel for the appellant sought for appeal being allowed and suit being

dismissed.

8. Per contra, learned Counsel appearing for the respondent would

support the impugned judgment by contending that time was not the

essence of the contract in the instant case and the very fact that the

defendant had received further advance amount on 23.06.1993 would belie

the claim of the defendant in this regard. He further contends that

defendant was under obligation to get the suit land surveyed and measured

which was never done and as such the obligation of the plaintiff to pay

balance sale consideration to the defendant did not arise till such survey

was conducted by the defendant. He would further submit that defendant

had never raised a plea with regard to the financial capacity of the plaintiff

and the denial of execution of the agreement has not been accepted by the

courts below and it is for this precise reason the rejection of the prayer for

specific performance by the trial court came to be reversed by the first

5 appellate court as the trial court having held that defendant had executed

the agreement in favour of the plaintiff it ought to have decreed the suit.

He would also submit that plaintiff has sufficiently proved his readiness

and willingness and at no point of time this was questioned by the

defendant. It is further submitted that reply to the legal notice was

furnished after 5 months after issuing of the legal notice by the plaintiff

and defendant had never cancelled the agreement and as such counsel for

the respondent-plaintiff sought for dismissal of this appeal.

POINTS FOR CONSIDERATION

9. Having heard the learned advocates appearing for the parties, we

are of the considered view that the following points would arise for our

consideration:

1. Whether the impugned order of the High Court requires to be affirmed or reversed?

2. What order?

RE: POINT NO.1

10. In order to answer the point No.1 formulated herein above, it

would be apt and appropriate to tabulate the list of dates and events which

are not in dispute and they are tabulated herein below:

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S. NO. EVENT DATE

1 Execution of Agreement to Sell 07/06/1993

2 Additional Rs. 17,000/- 23/06/1993 consideration was paid

3 Last date to get the sale deed 06/06/1994 registered according to Agreement to Sell

4 Issuance of Legal Notice 30/05/1996

5 Filing of Suit 09/06/1997

11. At the outset, it requires to be clarified and made clear that in

the instant case the amendment brought to the Specific Relief Act by

Act 18 of 2018 would be inapplicable. The amendment is prospective

in nature and cannot be applied to those transactions which took place

prior to amendment.1 In order to prove2 that the plaintiff is entitled to

the specific performance as per the law existing prior to amendment,

the plaintiff has to establish:

1

Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd & Ors (2023) 1 SCC 355] 2 Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 7 a. that a valid agreement of sale was entered into by the Defendant in his favour;

b. that the defendant committed breach of the agreement; and

c. that he was always ready and willing to perform his part of the obligations in terms of the agreement.

12. Section 16 of the Specific Relief Act provides certain bars to the

relief of specific performance.

“16. Personal bars to relief.- Specific performance of a contract cannot be enforced in favour of a person-

(a) who would not be entitled to recover compensation for its breach; or

(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

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

Explanation- For the purpose of clause (c),-

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.”

8 READINESS AND WILLINGNESS NOT PROVED

13. In order to obtain a decree for specific performance, the plaintiff

must aver and prove that he has performed his part of the contract and has

always been ready and willing to perform the terms of the contract which

are to be performed by him. Section 16(c) of the Specific Relief Act

mandates ‘readiness and willingness’ of the plaintiff to be averred and

proved and it is a condition precedent to obtain the relief of specific

performance.

14. There is a distinction between the terms ‘readiness’ and

‘willingness’.3 ‘Readiness’ is the capacity of the plaintiff to perform the

contract which includes his financial position to pay the sale consideration.

‘Willingness’ is the conduct of the party. In the instant case, even

according to the concurrent findings recorded by the courts below, it would

emerge that the plaintiff had been able to successfully prove the sale

agreement dated 07.06.1993 Ex.A1 on which date Rs.2,005/- was paid by

the plaintiff to the defendant. The evidence on record tendered by plaintiff

came to be accepted by all the courts and judgments of courts below would

also indicate that further amount towards sales consideration in a sum of

Rs.17,000/- was paid by plaintiff to defendant on 23.06.1993 and same was

endorsed by him. As per the recital in the agreements, the defendant was 3 His Holiness Acharya Swami Ganesh Dassji v Sit ram Thapar (1996) 4 SCC 526 9 required to get the suit land surveyed and as such the total consideration

was agreed to be settled after such survey. On the one hand, the plaintiff

contends that defendant never got surveyed the suit land. On the other hand

pleadings and evidence of plaintiff is silent on steps taken by the plaintiff

as expected of a reasonable person which has not been taken in the instant

case namely the plaintiff has not produced any evidence either oral or

documentary to establish that there was any demand made by him for the

land being surveyed by defendant. No witnesses have been examined on

behalf of the plaintiff to establish that at any point of time there has been

demand made by the plaintiff with the defendant by calling upon him to

get the suit land surveyed as agreed under the agreement of sale Ex.A1. It

is for the first time after a period of 3 years from the date of agreement

Ex.A.1 namely on 30.05.1996 legal notice (Ex.A3) was got issued or in

other words plaintiff was silent for a period of 3 years in enforcing of the

agreement of sale. It is for this specific reason the trial court while

rejecting the prayer for decree of specific performance has recorded a

categorical finding to the following effect:

21. The terms of the agreement xxx the period of one year.

The plaintiff got issued a legal notice on 30.05.1996 Ex.A.3 expressing his readiness to go ahead with the transaction and calling upon the vendors to execute the sale deed. That means nearly for two years after the expiry of one year period. The plaintiff vendee did nothing to act in furtherance of the agreement. Excepting a bald and vague assertion that he was contacting the vendors but they were dodging nothing more is brought on record to satisfy the court that the plaintiff was at all material times interested 10 in finalizing the deal and showing his readiness and willingness to perform the essential terms of the agreement. Though the suit was filed within the period of limitation, it is not sufficient. In assessing the question of readiness and willingness of the party to perform his part of the contract. It is highly essential to take into account the long unexplained silence and inaction on the part of the plaintiff.

22. Plaintiff must perform his part of the contract within reasonable time. There was total inaction on the part of the plaintiff for 2 ½ years which was not consistent with the terms of agreement. From 6.6.94 to 30.5.96 i.e., for a period of 23 months, plaintiff sat quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of one year, within which he was expected to urge the defendant- vendor to get measurements of land and fix the sale price and to tender the balance amount and call upon the defendants to execute sale deed and deliver possession of the property.

As rightly pointed out by the trial court, the respondent-plaintiff has not

produced any satisfactory evidence to prove his readiness and willingness.

As regards ‘willingness’ of the plaintiff to perform his part of the contract,

the conduct of the plaintiff warranting the performance has to be looked

into. The following conduct of the plaintiff warrants consideration:

a. Plaintiff got issued legal notice nearly after two years after the expiry of one year period as prescribed in the agreement.

b. Plaintiff has not brought anything on record to prove that he contacted the Defendant after the expiry of one year period and was interested in finalising the deed.

c. There was total inaction of the Plaintiff from 06/06/1994 (expiry of one year period) to 30/05/1996 (Date of issuance of legal notice)

11 d. Suit was filed on 09/06/1997 i.e. after a period of more than one year from the date of issuing of legal notice. Said delay has not been sufficiently explained by the Plaintiff.

The continuous readiness and willingness is a condition precedent to

grant the relief of specific performance.4 The trial Court has rightly held

that plaintiff has not sufficiently explained and proved that he was always

ready and willing to perform his part of the contract. As such the High

Court and the First Appellate Court had erred in holding that plaintiff had

proved his readiness and willingness.

15. The ratio of the above judgment in all force would be applicable to

the facts on hand in the instant case. The agreement of sale (Ex.A1) was

executed on 07.06.1993 and the date fixed for execution of the sale deed

was one year from the date of measurement of the suit schedule property.

Undisputedly no such measurement was carried out and plaintiff has not

raised his little finger in this regard from the date of execution of

agreement till he got issued legal notice dated 30.05.1996 that is almost for

a period of 3 years and suit came to be filed only on 09.06.1997 at the fag

end of the expiration of the limitation. The long unexplained delay in not

taking any reasonable steps as is expected from a reasonable person is

4 Vijay Kumar and Ors V. Om Parkash-Supreme Court Judgment (Civil Appeal No.10191 of 2018) 12 itself sufficient to disentitle the plaintiff to an equitable relief.5 It is no

doubt true that suit for specific performance can be filed even on the last

date of the limitation as prescribed under Article 54 of the Limitation Act.

However, the steps taken by the plaintiff during this period namely from

the date of agreement till date of filing of suit will have to be explained in

the plaint and proved in the evidence which is lacking in the instant case.

The long unexplained delay and silence on the part of the plaintiff in this

regard while in the witness box would not entitle the plaintiff to a decree of

specific performance and it is for this precise reason, the trial court as

noticed supra has refused to grant the equitable relief which has been

reversed by the appellate court without assigning proper and cogent reason

and the one assigned are at tangent or in other words contrary to the facts. The resultant effect of filing the suit for specific performance on the verge

of limitation coming to an end came to be examined by this Court in the

matter of Rajesh Kumar Vs. Anand Kumar and Ors6 and held that plaintiff

would not be entitled to the equitable relief (vide paragraph Nos.14, 15, 16,

17 and 18). Hence, the appellant would succeed in this appeal. Point No.1

is answered in favoured of appellant-defendant.

5 U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. versus A.M. KRISHNAMURTHY 6 2024 SCC Online SC 981

13 RE: Point No.2

16. For the reasons afore-stated, we are of the considered view that the

impugned judgment of the High Court and the First Appellate Court is

liable to be set aside and accordingly, it is set aside. Consequently, the

judgment of the trial Court dated 19.01.2002 passed in O.S. No.226 of

1998 is restored. The appeal stands allowed with no order as to costs.

……............………………….J. (Pamidighantam Sri Narasimha)

……............………………….J. (Aravind Kumar) New Delhi, July 10, 2024

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