1. The unsuccessful defendants are the appellants.
2. The first appellant after the filing of the appeal and, as such, appellants 4 to 13 were brought on record as the legal heirs of the deceased.
3. The case in brief is as follows: The plaintiff filed a suit for specific performance. The 1st defendant executed an agreement of sale for Rs. 6,740 on 17.10.1974, agreeing to sell his land, well, electric service connection etc., to the plaintiff. On the date of agreement, Rs. 5,540 was paid. It was agreed that the plaintiff should repay the balance of Rs. 1,200 within a period of three months. Possession was also handed over on the date of agreement itself. On 15.12.1975 the balance of Rs. 1,200 was paid by the plaintiff and the 1st defendant endorsed on the back of the document itself, undertaking to execute the sale deed whenever required. The plaintiff performed his part of the contract and is in possession of the property. On 9.1.1976 by mutual agreement, the plaintiff got executed by the first defendant, sale of item 4 of the property mentioned in the schedule and the document was registered on 12.1.1976. The remaining properties continued to be in the possession of the plaintiff. He demanded on 7.2.1984 from the 1st defendant execution of the sale deed in respect of items 1 to 3. The 1st defendant had executed a sale deed on 13.2.1984 in favour of the 2nd defendant in respect of item No. 1. The plaintiff was always ready and willing to prepare the sale deed at his cost and register it. The 3rd defendant is impleaded as he has been falsely set up by defendants 1 and 2 as tenant of item No. 1. Hence, the suit for specific performance and injunction.
4. The defendants registered the suit and contended that the agreement dated 17.10.1975 is not enforceable. The agreement is barred by time, after 9.1.1976, the plaintiff never claimed right in the property. He had given up his right in items 1 to 3. Originally four items were agreed to be sold under the agreement. After execution of the sale relating to item 4, the plaintiff gave up items 1 to 3. The 1st defendant has sold to the 2nd defendant item No. 1. The agreement cannot be split up and, as such, the suit is liable to be dismissed.
5. The trial court framed 2 issues and on behalf of the plaintiff, Exs.A-1 to A-13 were marked and P.Ws.1 and 2 were examined. On the side of the defendants, Exs.B-1 to B-5 were marked and D.Ws.1 to 3 were examined. The trial court dismissed the suit and aggrieved against this, the plaintiff has preferred A.S.No. 62 of 1985 on the file of Sub Court, Trivellore and the appeal was allowed and the judgment and decree of the trial court were set aside and specific performance was ordered relating to items 1 to 3 of the properties and also granted the relief of permanent injunction. Aggrieved against this, the defendants have come forward with the present appeal.
6. The defendants-appellants raised the following substantial questions of law:
(1) Whether the portion of the recitals in the agreement, quoted above, is enforceable in law as it contemplates that twice the advance amount has to be paid, by the first defendant?
(2) Whether the agreement, Exs.A-1 and A-2 are specifically enforceable in law in view of the above condition incorporated in the agreement?
(3) Is there ah enforceable contract at all that exists between the plaintiff and the defendants, as per the provisions of the Specific Relief Act, 1963?
(4) Is there any defence available for the defendants herein to put forward as per the provision of Section 17 of the Specific Relief Act?
(5) Is the law as contemplated under Section l7(l)(a) is distinguishable from the ratio in Haggard v. Scott (1830) 39 E.R. 113, especially in view of the fact as alleged that a long interval had taken place between the coming into existence of the suit contract and the tender of the consideration by the plaintiff to get the sale deed executed by the defendant which is an admitted fact in this case, as distinguishable from the readiness with which the plaintiff had got executed the sale deed from the defendants with respect to the right in taking water in a well?
7. The points that arise for consideration are: (1) whether the plaintiff is entitled to specific performance, (2) whether the plaintiff is entitled to the relief of permanent injunction, (3) Whether the suit claim is barred by time and enforceable? and (4) To what relief?
8. It is admitted that the 1st defendant is the owner of suit items 1 to 4. It is also not in dispute that the 1st defendant agreed to sell the items 1 to 4 the plaintiff for a sum of Rs. 6,740 and entered into an agreement with the plaintiff on 17.10.1975. On the same date, a sum of Rs. 5,540 was paid and the balance has to be paid within a period of three months. Possession was also delivered to the plaintiff on the date of Ex.A-1. The balance of Rs. 1,200 was paid by the plaintiff on 15.12.1975 under Ex.A-2. Subsequently, the plaintiff took a sale deed from the 1st defendant relating to item 4 of the property alone an 9.1.1976 under Ex.A-6. Now the plaintiff has filed the case for specific performance in respect of items 1 to 3 and also claimed the relief of permanent injunction. The records filed in the case clearly indicated that possession was given to the plaintiff on the date of Ex.A-1 and it continues to be with him.
9. The 1st defendant has sold item 1 of the property to the 2nd defendant on 13.2.1984 and only thereafter, the plaintiff expressed his willingness to get the sale deed relating to items 1 to 3 in pursuance of Ex.A-1. The defendants mainly contended that time is the essence of the contract and the period already expired. The agreement was entered into in 1975 and the plaintiff has expressed his intention to get the sale deed only in 1984 i.e., after the period of 9 years and, as such, the suit is also barred by time. However, it is necessary to state that the entire sale consideration has been paid on 15.12.1975. But, however, the plaintiff did hot take any step to get the document executed. Learned Counsel for the plaintiff mainly contended that time is not essence of the contract because there is recital under Ex.A-2 to the effect that the 1st defendant was always ready to execute the sale deed as and when the plaintiff comes forward with the document.
10. It is necessary to find out whether time is essence of the contract and moreover, whether the plaintiff is entitled to the relief of specific performance after lapse of 9 years. It is pertinent to state that on 9.1.1976, the plaintiff got the sale deed in respect of item 4 of the property. But, however, he has not taken steps to get the sale deed in respect of other items 1 to 3. No valid reason has been given by the plaintiff for not getting the document. It appears from the evidence that the plaintiff was not in a position to raise funds to meet the registration charges. It, therefore, follows that the plaintiff alone was not ready to perform his part of the contract nearly for a period of 9 years. Only on coming to know that the 1st defendant has sold item 1 of the property to the 2nd defendant, the plaintiff sent a notice, expressing his desire to get the sale deed. Moreover, the contract was entered into in respect of items 1 to 4 and it cannot be split up according to the convenience of the plaintiff. When he was in a position to get a sale deed in respect of item No. 4, why he has not taken the sale deed in respect of items 1 to 3 has not been convincingly explained by the plaintiff. Although the trial court dismissed the suit, the lower appellate court gave the decree for specific performance and also the relief of injunction and because of this only, the defendants were constrained to come forward with this appeal. The learned Counsel for the plaintiff mainly relied upon the recital in Ex.A-2 to the effect that as and when the plaintiff comes with the document the 1st defendant agreed to execute the sale deed. Ex.A-1 is the main agreement of sale entered into between the parties and it is specifically agreed that the balance of amount has to be paid within a period of three months and within a period of three months also, the balance of Rs. 1,200 was paid i.e. on 15.12.1975. Thereafter, the plaintiff alone has not taken any diligent step to get the sale deed executed relating to items 1 to 3.
11. The learned Counsel for the defendants mainly contended that the relief of specific performance is discretionary in nature and the plaintiff having come to court after period of 9 years, is not entitled to the relief of specific performance. The learned Counsel for the plaintiff relied upon a decision in Indira Kaur v. Sheo Lal Kapoor , in support of the proposition that whether the time is essence of contract in respect of sale of immovable property, it was held that the time is not the essence of the contract. It depends upon the facts and circumstances of each case and it cannot be uniformly applied to all the cases relating to specific performance. The intention of the parties has to be gathered from the recitals in the document and, as such, this decision has no application to the case on hand.
12. The defendants relied on Sriram Cotton Pressing Factory v. Narayanaswami , a Division Bench decision of this Court, wherein it is observed that,
"the suit filed by the plaintiff for enforcing specific performance of the agreement was resisted by the defendant on the ground that the time was the essence of the contract and the contract could not be performed on account of considerable delay and laches on the part of the plaintiff. Held, that there was palpable failure on the part of the plaintiff to carry out its part of the contract and from the considerable delay and laches on is part it could be inferred that there was waiver or abandonment of the contract, that the time was the essence of the contract and, in view of the events which have happened, the granting of the decree for specific performance would involve hardship and inequity on the defendant"
. This decision is applicable to the case on hand.
13. Reliance was also placed on a decision in Sathanarayana v. Yelloji Rao A.I.R. 1965 S.C. 1404 : (1965) 2 M.L.J. (S.C.) 145 : (1965) 2 An.W.R. (S.C.) 145 : (1965) 2 S.C.J. 678, wherein it is observed that under Section 22 of the Specific Relief act, relief of specific performance is discretionary but not arbitrary; discretion must be exercised in accordance with sound and reasonable judicial principles. Article 113 of the Limitation Act prescribes a period of 3 years from the date fixed thereunder for specific performance of a contract, it follows that mere delay without more extending upto the said period cannot possibly be a reason for a court to exercise its discretion against giving a relief of specific performance.
It is, therefore, clear that the time from which the period begins to run is the date fixed for the performance or when the plaintiff has noticed that the performance is refused. The same period is given under Section 54 of the new Limitation Act also.
14. It has also been held in Sandhya Rani v. Sudha Rani A.I.R. 1978 537 : (1978) 1 S.C.J. 464, that the question whether relief of specific performance of the contract for the purchase of immovable property should be granted or not always depends on the facts and circumstances of each case and the court would not grant such a relief if it gives the plaintiff an unfair advantage over the defendant: Much reliance is placed upon the decision in P.V. Joseph's son Mathew, v. N. Kuruvila's son , wherein it is observed, that,
"the court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff."
These decisions are also applicable to the case on hand.
15. The aforesaid decisions clearly indicate that the relief of specific performance is a discretionary one and the discretion has to be exercised judicially. In the present case, although the entire sate consideration was paid on 15.12.1975, the plaintiff has not taken any steps to get the sale deed executed nearly for a period of 9 years. Now, after lapse of 9 years only, the plaintiff has come forward with the suit, for specific performance and, as such, he is not entitled to claim the discretionary relief. Simply because possession of the property continued to remain with the plaintiff, he cannot automatically claim the relief. Further, more, there is a forfeiture clause in Ex.A-1, itself to the effect that if and when the plaintiff fails to complete his part of the contract, he has to forfeit the amount paid by way of advance. The trial court has rightly appreciated the contentions of the parties as well as the legal position, but unfortunately the lower appellate court granted the discretionary relief of specific performance even after the expiry of 9 years from the date of Ex.A-1. The finding given by the lower appellate court is based upon an erroneous application of law and, as such, the finding is perverse, calling for interference.
16. For the reasons stated above, the second appeal is allowed and the judgment and decree of the lower appellate court are set aside and the suit is dismissed. However, there will be no order as to costs.