SILVEY & ORS. versus ARUN VARGHESE & ANR.

[DR. AR.IJIT PASAYAT,

p. 445

Dr. ARIJIT PASAYAT, J. 1. the judgment of a Division Bench allowing the appeal filed by the plaintiffs in a suit for specific performance sell immovable properties.

p. 445, margin A

The plaintiffs in a suit for agreement to sell immovable properties The defendants, four in number sale of the respective portions held dated 23.2.1986. Thereunder, they plaintiffs an extent of 10 acres of them at a price of Rs. 19,750/advance of Rs. 50,000/-. The agreement deed was to be executed by 17.4.1986. to furnish the plaintiffs with all documents and power and also furnish tax date, the registration book for registration with the rubber Board and the licence get the properties measured by expense of the vendors-defendants plaintiffs-purchasers or their agents. the defendants were never ready for executing the sale deed in repeated demands by the plaintiffs did not meet with the proper response ultimately to send a notice through demanding performance and the respond to that notice, the suit was specific performance of the agreement pleaded that they were and they willing to perform their part of the a written statement contending that The plaintiffs never demanded performance The defendants, therefore, were plaintiffs have abandoned the agreement. therefore, effected improvements A of the property has increased. It was, therefore, not a fit case where a decree for specific performance should be granted to the plaintiffs. It was pleaded that the plaintiffs were never ready and willing to perform their part of the contract.

pp. 445–446, margin B

The trial Court held on the materials that time was not of essence of the contract and that the plaintiffs had the requisite capacity to raise funds for the purchase of the property covered by Exhibit Al. But, the trial Court held that plaintiffs had not taken prompt steps for enforcement of the obligations under Exhibit A 1 agreement for sale. But, it did find that the defendants had not yet obtained the certificates of registration from the Rubber Board as envisaged by the agreement for sale and they had not even obtained possession certificates, since obviously there was considerable dispute about the properties covered in the survey number, of which the plaintiff schedule properties formed a part. The trial Court stating that in view of the delay in the plaintiffs approaching the Court, the plaintiffs have not shown • themselves to be ready and willing to perform their part of the contract and in the matter of exercise of discretion, specific performance should be refused to the plaintiffs since the defendants have, on the basis that the plaintiffs were not any more interested purchasing the property, expended amounts for improvement of the property. Thus stating that the discretion has to be exercised against the plaintiffs, the trial court dismissed the suit for specific performance. But the trial court granted a decree for recovery of the advance of Rs.50,000/- paid by the plaintiffs to the defendants at the time of entering into Exh. A 1 agreement along with interest at the rate of 6% per annum thereon from the date of suit till date of realization. It is feeling aggrieved by the refusal to grant the plaintiffs a decree for specific performance that the plaintiffs have filed appeal before the High Court.

p. 446

In appeal, the High Court reversed the judgment and decree of the trial court and held that the suit was to be decreed in favour of the plaintiffs for specific performance as prayed for.

p. 446, margin G

Learned counsel for the appellants submitted that A though time may not be the essence of an agreement but circumstances can show that it was really so. Though extension was granted, that was not for very long period. Though originally it was stipulated in the agreement that the sale was to be completed before off set of monsoon, the last extension granted B was for a short period thereafter. There was no extension after 17.4.1986. For long time no demand was made by the plaintiffs. The plaintiffs were really not interested for executing the sale deed as they were waiting to see whether the intended purchases of the neighbouring land would be completed. There was no material to show that at all relevant points of time, the plaintiffs were ready and willing to perform their part of the agreement. Reference is made to the evidence of PW 1 to show that the purchase of the agreed land depended upon acquisition of the neighbouring land.

p. 447

It is submitted that there must be material to show about the readiness and willingness throughout, even though a person may have funds or is capable of raising funds. These aspects have been lost sight of by the High Court.

p. 447

Learned counsel for the respondents on the other hand submitted that though in a given case even in respect of an agreement for sale of immovable property, time may be the essence of agreement yet it would depend upon several factors. If the circumstances show that the time was the essence of the agreement that fact can also be taken note of. In the instant F case, it is submitted that the defendants themselves have accepted that the time was extended and the agreement was to be given effect to before monsoon set in. But the period extended itself to a period which was admittedly after monsoon had set in. A false plea was taken by the defendants about the G plaintiffs having told them to have abandoned the agreement. This conduct itself disentitled the defendants from opposing the suit for specific performance of contract.

p. 447

The High Court has found that plaintiffs can be said to have been always ready and willing to perform their part of the contract from the inception of the contract to the date of the decree of the trial court, relying on the principles highlighted in Ardeshir H. Mama Flora Sassoon (AIR 1928 PC 208).

pp. 447–448

In Raineri v. Miles and Anr. (1980 (2) All ER 145 at page 155) it was held as follows: "In the instant case the date for completion was not expressed to be of the essence, and it has not been suggested (though I think it might possibly have been) that the surrounding circumstances nevertheless so rendered it. In that state of affairs the appellants submit that the law as it has stood ever since 1875 exculpated them from all liability for the foreseeable damage sustained by the respondents as a direct result of their failure to keep their word. My Lords, were this indeed right the respondents would suffer a substantial injustice. The fact that time had not been declared to be of the essence does not mean that the express date for completion could be supplanted by the court's treating it as a mere 'target' date and, in effect, enabling the defaulting party to insert into the contractual provision some such words as' ..... or within a reasonable time thereafter.'"

p. 448, margin A

As rightly noted by the High Court, the plaintiffs have pleaded in terms of Section 16 C of the Specific Relief Act, 1963 (in short the 'Act') that they have always been and are ready and willing to perform their part of the contract. Plaintiff No. 2 as PW 1 has also spoken about this fact. The case of the plaintiffs was that the defendants were not ready with the document as contemplated in clause 2 of Exh. A 1 which resulted in the delay in the performance of the contract and in the plaintiffs seeking the performance of the contract by the defendants. 11 The High Court has noticed that the agreement in respect of the adjacent land was entered into much before the agreement in question. It has also been noticed by the High Court that there was no impediment on the plaintiffs obtaining a sale deed in respect of adjacent land or that they apprehended it at any point of time that they were not going to get an assignment to that extent. The assignment in fact was obtained in respect of the adjacent land. The High Court also highlighted, in our opinion rightly, that the defendants had not performed their part of the contract under Exh. A 1 as they had not obtained requisite licence for planting rubber plant, except in case of defendant No. 3. None of the other defendants had obtained the registration book for registration as a rubber estate with the Rubber Board as envisaged by Clause 7 of the Agreement for sale.

pp. 448–449, margin E

DW1 accepted that possession certificates could not be obtained by the defendants in view of the nature of the property involved in the context of Kerala Land Reforms Act, and the Kerala Private Forest (Vesting and Assignment) Act. The defendants never responded to the letter - Exh, A2 issued by the plaintiffs seeking performance of the contract. No response was also sent to the letters Exh. A2 to A 10. Exh. A6 was a letter sent through registered post which was refused. The lawyer's notice Exh. A 11 was also not responded to.

p. 449, margin C

As regards the false plea of the defendants, the effect needs to be noted. It was pleaded that defendant No. 3 had gone to the house of plaintiff No. 2 in Alleppey prior to the receiving any letter from the plaintiffs and had spoken that they had told him that they were not keen in enforcing the obligation under Exh. A 1. But when examined as DW1, the said defendant No. 3 admitted that he had never met the plaintiff as pleaded in the written statement and that he or any other defendant had never gone to Alleppey to meet plaintiff No. 2 at his residence to speak about the performance of the contract. The plea stated in the written statement was abandoned in evidence. In Lourdu Mari David and Ors. Louis Chinnaya Arogiaswamy & Ors. (1996(5) sec 589), it was noted that the conduct of the defen~ant cannot be ignored while weighing the question of exercise of discretion for decreeing or denying a decree for A specific performance. The High Court has, after analyzing the factual position, come to the conclusion that the defendants were really not ready to perform their obligation in terms of the contract and had taken a false plea in the written statement.

pp. 449–450, margin E

The appeal is without merit, deserves dismissal, which we direct, but in the circumstance without any order as to costs. N.J. Appeal dismissed.

p. 450