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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Ramakant Sharma
  • R.L.Sud
Judges
  • R.L Khurana, J.
Acts
  • S. 20 of the Specific Relief Act, 1963 (for short the Act). Under Section 20,
  • Section 16(c) of the Specific Relief Act, 1963
  • 27-2-1992.15. Article 54, Limitation Act, 1963,
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Ramakant Sharma
  • R.L.Sud
Judges
  • R.L Khurana, J.
Acts
  • S. 20 of the Specific Relief Act, 1963 (for short the Act). Under Section 20,
  • Section 16(c) of the Specific Relief Act, 1963
  • 27-2-1992.15. Article 54, Limitation Act, 1963,
See more information ...
Smart Summary

Structured Summary of the Opinion (Second Appeal — Specific Performance)

Factual and Procedural Background

The defendant (owner) agreed by an agreement dated 16-7-1991 to sell 6 bighas out of his land (8 bighas 3 biswas) to the plaintiffs for Rs. 54,000 (Rs. 9,000 per bigha). Rs. 25,000 was paid as earnest money. The agreement stipulated execution and registration of the sale deed on or before 15-7-1992. On 4-10-1991 an endorsement on the original agreement purportedly added a further 2 bighas 3 biswas for sale on the same terms for which an additional Rs. 5,000 was paid. On 21-3-1992 a subsequent agreement recorded that Rs. 30,000 had been received as advance and provided that the sale deed would be executed only after the decision of Civil Suit No. 308/1 of 1991, which had been filed against the defendant by his brother and sister concerning the same land.

The suit between the brother and sister and the defendant was decided in the defendant's favour on 26-8-1996 and the appeal was dismissed on 18-8-1998. According to the plaintiffs, the defendant did not inform them of that decision until 13-3-1997 and then promised to execute the sale deed by 31-3-1997; subsequently he refused to perform on 4-4-1997. The plaintiffs filed a suit for specific performance and permanent injunction on 5-4-1997.

The defendant admitted the first agreement and receipt of Rs. 25,000 but denied the endorsement of 4-10-1991 and the second agreement dated 21-3-1992, alleging that the Rs. 5,000 related to a mortgage which had been redeemed. He pleaded that the sale deed was not executed within the stipulated date (15-7-1992) and that the earnest money stood forfeited; he also raised defences of limitation, lack of readiness and willingness by the plaintiffs and maintainability issues.

The trial Court found issues No.1 to 3 (existence of agreements, readiness and willingness, entitlement to specific performance) in favour of the plaintiffs and issues No.4 to 6 (limitation, maintainability, cause of action) against the defendant, and decreed specific performance based on the 21-3-1992 agreement (Ex. PW-2.B). The defendant's first appeal was dismissed by the Additional District Judge on 25-11-2000, affirming the trial Court's findings. The defendant's second appeal was admitted on 22-3-2001 on three substantial questions of law concerning (1) whether time was essence and whether suit was barred by time; (2) whether plaintiff had to prove sufficiency/availability of funds to show readiness and willingness; and (3) whether specific performance could be refused in view of the alternative relief of refund of earnest money.

Legal Issues Presented

  1. Whether time was the essence of the contract and whether the suit as laid is barred by limitation.
  2. Whether the plaintiff is required necessarily to prove the sufficiency and availability of funds to establish readiness and willingness to perform the agreement.
  3. Whether specific performance of the agreement can be refused in view of the alternative relief of recovery (refund) of earnest money, particularly in light of rise in property prices over time.

Arguments of the Parties

Defendant's (Appellant's) Arguments

  • Admitted the initial agreement dated 16-7-1991 and receipt of Rs. 25,000, but denied the endorsement of 4-10-1991 and the second agreement dated 21-3-1992.
  • Alleged that the endorsement of 4-10-1991 related to a mortgage transaction of 2 bighas 3 biswas for Rs. 5,000 which was later redeemed; asserted collusion between plaintiffs, scribe and witnesses to create the endorsement as an agreement to sell.
  • Pleaded that the plaintiffs failed to get the sale deed executed by the stipulated date (15-7-1992) so the earnest money stood forfeited, and plaintiffs were not ready and willing to perform; contended plaintiffs lacked sufficient funds to pay the balance consideration.
  • Raised objections that the suit was barred by limitation, lacked cause of action, and was not maintainable.
  • Contended that plaintiffs should have deposited the balance sale consideration (or proved availability of funds), especially since Ex. PW-2.B purportedly required deposit before specific enforcement.
  • Argued that in view of the passage of more than ten years and a substantial rise in property prices, specific performance would be inequitable and the remedy of refund of earnest money with interest should be adequate relief.

Plaintiffs' (Respondents') Arguments

  • Asserted the agreements (16-7-1991 and 21-3-1992) were valid and that Rs. 30,000 was received in advance (including Rs.25,000 earnest and additional Rs.5,000); maintained they were always ready and willing to perform and to pay the balance sale consideration.
  • Pointed out that the second agreement (21-3-1992) explicitly made performance contingent on the decision of the pending civil suit and did not fix a new time for performance; therefore the initial time stipulation (15-7-1992) was replaced.
  • Asserted they filed for specific performance promptly after they learned of the defendant's non-performance (plaintiffs claimed notice of refusal on 31-3-1997 and filed suit immediately thereafter).
  • Denied any obligation to deposit the balance sale consideration in court unless ordered by the trial Court; plaintiffs relied on their unchallenged testimony (PW-1) that they were ready and willing.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chand Rani v. Kamal Rani, (1993) 1 SCC 519 : AIR 1993 SC 1742 Principle that time is not the essence of a contract of sale of immovable property unless expressly provided. Used to support the proposition that mere fixation of a date does not make time of the essence for specific performance.
K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 : AIR 1997 SC 1751 Recognised that rise in price may be a relevant factor in refusing specific performance in certain circumstances. Distinguished: the Court held KS Vidyanadam does not apply to upset a decree already passed and affirmed by two courts; rise in price was not a ground to deny specific performance here because delay was attributable to defendant.
Smt. Raj Rani Bhasin v. S. Kartar Singh Mehta, AIR 1975 Delhi 137 (followed in Partap Singh Chauhan) Mere stipulation of a date and stipulation for forfeiture of earnest money do not necessarily make time the essence of the contract; sellers may make time essential by specific notice on purchaser. Applied to conclude that the mere stipulation of 15-7-1992 and forfeiture clause did not make time of the essence, especially since the second agreement replaced the date.
Partap Singh Chauhan v. Baldev Singh (Civil Suit No.56/1996, decided 14-3-2001) Followed Raj Rani Bhasin on the non-essence of time absent specific notice. Referenced as precedent supporting the same legal position regarding time not being essence absent notice.
N.P. Thirugnanam by LRs. v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115 Availability of the consideration amount, conduct of the plaintiff and surrounding circumstances are relevant when adjudging readiness and willingness. Relied upon by defendant; Court distinguished the present facts because the plaintiffs were never directed by the trial Court to deposit funds nor put to the test in court proceedings.
V. Pechimuthu v. Gowrammal, (2001) 7 SCC 617 : AIR 2001 SC 2446 Explanation (i) to Section 16(c) permits the plaintiff to wait for a Court order to deposit balance consideration; deposit is required only when directed by the Court. Relied on to support that plaintiffs were not obliged to deposit balance consideration unless directed; therefore failure to deposit did not negative readiness/willingness.
R.C. Chandiok v. Chuni Lal Sabharwal, (1970) 3 SCC 140 : AIR 1971 SC 1238 Readiness and willingness must be judged from the entirety of facts and circumstances and is not a "strait jacket" formula; absence of material showing lack of funds supports readiness. Applied to support that, absent material showing plaintiffs lacked necessary funds, they were entitled to specific performance.
Syed Dastagir v. T.R. Gopalakrishna Setty, (1999) 6 SCC 337 : AIR 1999 SC 3029 Three-judge Bench following R.C. Chandiok on readiness and willingness principles. Followed as an authority reinforcing the approach to assess readiness and willingness on facts.
Motilal Jain v. Ramdasi Devi, (2000) 6 SCC 420 : AIR 2000 SC 2408 Reiterated principles on readiness/willingness and equitable discretion in specific performance. Referred to as part of the body of authorities supporting the Court's assessment of readiness/willingness.
Veerayee Ammal v. Seeni Ammal, JT 2001 (9) SC 145 : AIR 2001 SC 2920 Concurrent findings of fact by trial and first appellate courts on readiness and willingness are factual and not to be treated as substantial questions of law for interference in second appeal. Applied to hold that this Court could not disturb the concurrent factual findings of the two courts below on readiness and willingness.
S.V.R. Mudaliar (dead) by LRs. v. Mrs. Rajabu F. Buhari (dead) by LRs., AIR 1995 SC 1607 Specific performance cannot be denied merely because of a considerable rise in prices during litigation. Relied on to support denial of defendant's contention that rise in land prices renders specific performance inequitable in this case.

Court's Reasoning and Analysis

The court addressed the three substantial questions of law sequentially and analysed the facts in light of settled legal principles and authorities.

Question 1: Whether time was the essence / limitation

  1. The court began with the settled principle that time is not the essence of a contract for sale of immovable property unless expressly made so. It cited Chand Rani v. Kamal Rani and K.S. Vidyanadam v. Vairavan to state this proposition.
  2. The court noted the first agreement (Ex. PW-1.A) fixed 15-7-1992 as the date for execution of the sale deed, but emphasised that this agreement was subsequently substituted by the second agreement (Ex. PW-2.B), which made performance contingent upon the decision of a pending civil suit and expressly refrained from fixing any period for performance thereafter.
  3. Because Ex. PW-2.B removed the fixed date and specified that the sale deed would be executed only after the decision of the suit, and given that there was a restraint order preventing execution during the pendency of that suit, the court held time could not be treated as the essence.
  4. On limitation (Article 54, Limitation Act, 1963), the court observed that where no date for performance is fixed, limitation runs from the date the plaintiff has notice that performance is refused. The court accepted the plaintiffs' account that they had notice of refusal on 31-3-1997 and that the suit filed immediately thereafter was within the three-year limitation period.

Question 2: Whether plaintiffs had to prove sufficiency/availability of funds

  1. The defendant relied on N.P. Thirugnanam to argue that the plaintiffs must prove availability of funds to show readiness and willingness. The court acknowledged the principle that availability of consideration and conduct are relevant in adjudging readiness and willingness, and that specific performance is equitable under Section 20 and Section 16(c) of the Specific Relief Act.
  2. The court distinguished the present facts: at no stage was the trial Court required to direct the plaintiffs to deposit the balance sale consideration; no court order required deposit and the plaintiffs were not called upon to make such a deposit during trial.
  3. The court invoked Explanation (i) to Section 16(c) which states that where a contract involves payment of money it is not essential for the plaintiff actually to tender money or deposit in court except when so directed by the Court. On that basis the court held plaintiffs' failure to deposit cannot lead to an adverse inference.
  4. The court relied on V. Pechimuthu (and R.C. Chandiok) to affirm that readiness and willingness must be gauged from the whole of circumstances and that a plaintiff can wait for a court order before depositing funds. Further, PW-1's testimony that plaintiffs were ready and willing was not challenged in cross-examination, which the court treated as an admission of that aspect.
  5. Because the two courts below had concurrently found on facts that the plaintiffs were ready and willing, and those findings are factual, this Court declined to disturb them (citing Veerayee Ammal as authority that such concurrent findings are not open in second appeal).

Question 3: Whether specific performance should be denied because of rise in price / alternative relief

  1. The defendant argued that after more than a decade, land prices had risen significantly and that specific performance would be inequitable; he urged refund of earnest money instead (relying on K.S. Vidyanadam).
  2. The court examined causation of delay and found the plaintiffs were not at fault: the second agreement expressly postponed performance until after the determination of the pending suit; the defendant had not informed plaintiffs of the favourable decision and himself was the cause of delay.
  3. The court observed that the precedent in K.S. Vidyanadam is distinguishable because there the plaintiff had been inactive and guilty of laches; here the defendant's own inaction caused the delay. The court also relied on S.V.R. Mudaliar to hold that rising prices during litigation do not automatically bar specific performance.
  4. Further, where a decree for specific performance has been passed by trial and affirmed by the first appellate court, the court indicated (citing V. Pechimuthu) that a second appeal should not ordinarily overturn that relief merely on the ground of price rise.
  5. Therefore, the court concluded that the discretionary relief of specific performance was properly granted by the courts below and should not be denied for rise in price in these circumstances.

Holding and Implications

Holding: The second appeal is DISMISSED. The concurrent judgments and decree of the trial Court and the Additional District Judge decreeing specific performance of the agreement dated 21-3-1992 (Ex. PW-2.B) in favour of the plaintiffs and against the defendant are upheld. The appeal is dismissed with costs.

Implications:

  • Direct effect: The decree for specific performance in favour of the plaintiffs, as passed by the trial Court and affirmed on first appeal, stands. The defendant remains bound to execute the sale deed in accordance with Ex. PW-2.B (subject to the terms and conditions of that decree and any subsidiary directions in the courts below).
  • On limitation and time-as-essence: The decision reinforces that a subsequent agreement which removes a previously fixed date (and makes performance contingent on the decision of a suit) prevents the earlier date from making time the essence and limits the running of limitation to the date of notice of refusal.
  • On readiness and willingness: The judgment affirms that a plaintiff is not required to deposit balance consideration in court unless directed; readiness and willingness are to be assessed from the whole of facts and circumstances and concurrent factual findings on that issue are not to be disturbed in second appeal.
  • On discretionary denial because of price rise: The court confirms that rise in property prices during litigation is not, by itself, a sufficient ground to deny specific performance when the delay is attributable to the defendant and the decree for specific performance has already been passed and affirmed by lower courts.
  • Broader precedent: The opinion applies existing authorities to the facts; it does not purport to lay down a new general principle beyond the authorities cited and their application to these facts.
Appeal dismissed.
Show full summary ...

    Dalip Singh v. Ram Nath And Another

    JUDGMENT

    1. This second appeal at the instance of the defendant against the judgment and decree dated 25-11-2000 passed in Civil Appeal No. 49-NL/13 of 2000 by the learned Additional District Judge. Solan Camp at Nalagarh, affirming the judgment and decree dated 12-5-2000 of the learned Sub-Judge 1st Class. Arki Camp at Nalagarh in Civil Suit No. 11/1 of 1997/99, was admitted for hearing on 22-3-2001 on the following substantial questions of law:—

    1. Whether the time was the essence of the contract and the suit as laid is barred by time?

    2. Whether the plaintiff has necessarily to prove the sufficiency and availability of funds in order to establish his readiness and willingness to perform his part of the agreement?

    3. Whether specific performance of the agreement cannot be ordered in view of the alternative relief of recovery of earnest money?

    2. Briefly stated, the facts of the case are these. Defendant is the owner of the land measuring 8 bighas 3 biswas comprising of khasra Nos. 14, 15 and 16 (as described in the jamabandi for the year 1994-1995) of village Chandpur, Pargana and Tehsil Nalagarh, District Solan. On 16-7-1991 he entered into an agreement with the plaintiffs agreeing to sell an area of 6 bighas out of the above said land for a consideration of Rs. 54,000/- that is, at the rate of 9,000/- per bigha. A sum of Rs. 25,000/- as earnest money was received by the defendant from the plaintiffs at the time of agreement. It was agreed between the parties that the requisite sale deed would be executed and registered on or before 15-7-1992. On 4-10-1991 vide an endorsement made on the original agreement dated 16-7-1991, the defendant further agreed to sell 2 bighas 3 biswas more land to the plaintiffs on the same terms and conditions as originally agreed upon. A further sum of Rs. 5,000/- was received by the defendant from the plaintiffs as part of the sale consideration.

    3. Again on 21-3-1992 the parties arrived at another agreement whereby the defendant admitted the earlier agreement dated 16-7-1991 and the receipt of Rs. 30,000/- as advance of the sale consideration. Under this agreement the defendant had agreed to execute the necessary sale deed in favour of the plaintiffs after the decision of Civil Suit No. 308/1 of 1991 which in the meanwhile had been filed against the defendant by his brother Joginder Singh and sister Harbans Kaur since the land agreed to be sold was also subject matter of such suit. Though the suit was dismissed on 26-8-1996, the defendant never informed the plaintiffs about the decision till 13-3-1997 when upon enquiry the plaintiffs were told by the defendant that the suit stood decreed in his favour and that he would execute the sale deed in favour of the plaintiffs by 31-3-1997. The defendant was repeatedly asked by the plaintiffs to execute the sale deed on receiving the balance sale consideration, but the defendant has been avoiding to do so on one pretext or the other and on 4-4-1997 had refused to perform his part of the agreement. Hence the plaintiff filed a suit for specific performance of the agreement and also for permanent injunction.

    4. The defendant while resisting the suit, has admitted the agreement dated 16-7-1991 (Ex. PW-1.A) whereby he had agreed to sell land measuring 6 kanals to the plaintiffs for Rs. 54,000/-. He has also admitted the receipt of the sum of Rs. 25,000/- as earnest money. The defendant has denied the endorsement dated 4-10-1991 (Ex. PW-2.A) on Ex. PW-1.A agreeing to sell a further area of 2 bighas 3 biswas of land to the plaintiffs and the receipt of a further sum of Rs. 5,000/- from the plaintiffs. It has been pleaded that in fact the defendant had mortgaged land measuring 2 bighas 3 biswas with the plaintiff No. 1 for Rs. 5,000/- and that the plaintiffs in connivance with the scribe and witnesses got the endorsement Ex. PW-2.A made as an agreement to sell. It was further pleaded that the amount of Rs. 5,000/- was repaid to plaintiff No. 1 and the mortgage was redeemed. The second agreement dated 21-3-1992 Ex. PW-2.B was also denied. The pendency of Civil Suit No. 308/1 of 1991 was admitted and it was pleaded that the plaintiffs were fully aware of the said suit. It was further pleaded that in terms of the agreement Ex. PW-1.A, the sale deed was to be executed and registered by 15-7-1992 and since the plaintiffs failed to get the sale deed executed by the stipulated date, the earnest money of Rs. 25,000/- stood forfeited and the plaintiffs are not entitled to specific performance of the said agreement. The plaintiffs were never ready and willing to perform their part of the agreement. The plaintiffs did not possess sufficient funds to pay the balance sale consideration. Objections as to the suit being not within time, absence of cause of action and the suit being not maintainable were further raised.

    5. On the pleadings of the parties, following issues were framed by the learned trial Court:—

    1. Whether the defendant had entered into agreement dated 16-7-91 and 15-7-92 with the plaintiff to sell the suit land as alleged? OPP.

    2. Whether the plaintiff was and is ready and willing to perform his part of contract? OPP

    3. Whether the plaintiff is entitled for relief of specific performance of contract? OPP

    4. Whether this suit is not within limitation? OPD

    5. Whether this suit is not maintainable? OPD

    6. Whether the plaintiff has no cause of action? OPD

    7. Relief.

    6. The learned trial Court found issues Nos. 1 to 3 in favour of the plaintiffs and issues Nos. 4 to 6 against the defendant. Consequently the suit of the plaintiffs was decreed and a decree for specific performance of the agreement dated 21-3-1992, Ex. PW-2.B, was passed in favour of the plaintiffs and against the defendant.

    7. The appeal preferred by the defendant against the judgment and decree dated 12-5-2000 of the learned trial Court was dismissed by the learned Additional District Judge on 25-11-2000. While dismissing the appeal, the learned Additional District Judge upheld the findings of the learned trial Court on all the issues.

    8. Be it stated that the concurrent findings of the two courts below holding that the defendant had entered into the two agreements Exts. PW-1.A and PW-2.B and that the plaintiffs were and are ready and willing to perform their part of the agreement, being purely on questions of fact are not open to challenge before this Court in the present second appeal. The substantial questions arising in the present case have been enumerated above.

    9. I have heard the learned counsel for the parties and have also gone through the record of the case. My findings on the above substantial questions of law are as under:—

    Question No. 1.

    10. It is by now well settled that in case of agreement of sale relating to immovable property, time is not the essence of the contract unless specifically provided to that effect. (See Chand Rani v. Kamal Rani (1993) 1 SCC 519 : (AIR 1993 SC 1742) and K.S Vidyanadam v. Vairavan (1997) 3 SCC 1 : (AIR 1997 SC 1751).

    11. In Smt. Raj Rani Bhasin v. S. Kartar Singh Mehta, AIR 1975 Delhi 137 which was followed by this Court in Partap Singh Chauhan v. Baldev Singh Civil Suit No. 56 of 1996, decided on 14-3-2001, it has been held that a mere stipulation of a date before which the sale deed was to be executed and the stipulation that the earnest money would be forfeited if the date was not adhered to also would not necessarily make the time the essence of the contract. The sellers are entitled to make the time the essence of the contract by specifically giving a notice to the purchaser if the purchaser was found to be delaying the performance of the contract.

    12. The two courts below have concurrently held that the two agreements Exts. PW-1.A and PW-2.B were duly executed by the defendant. Though the first agreement Ex. PW-1.A contained a stipulation that the requisite sale deed was to be executed by 15-7-1992, such agreement stood substituted by the second agreement Ex. PW-2.B whereby the defendant agreed to execute the sale deed in favour of the plaintiffs only after the civil suit filed against him by his brother and sister was decided in his favour.

    13. Admittedly, the civil suit was decided in favour of the defendant on 26-8-1996. The appeal against the judgment and decree of the learned trial Court was dismissed on 18-8-1998. There is nothing on the record to suggest that the defendant had ever informed the plaintiffs about the decision in the civil suit and calling upon them to get the sale deed executed by giving out a stipulated date.

    14. On the facts of the case, it cannot be said that time was the essence of the contract. Agreement Ex. PW-2.B specifically stipulates that since a civil suit regarding the land agreed to be sold was pending, no period for the performance of the agreement was being fixed and that the parties have agreed that the sale deed would be executed after the decision of the civil suit. The agreement further stipulates that in case the decision of the civil suit was against the defendant, then he would transfer an equivalent area of land out of his land comprising of khasra Nos. 13, 18 and 19 in favour of the plaintiffs. Even otherwise, the defendant could not have executed the sale deed during the pendency of the suit in view of the restrained order passed against him, copy of which is Ex. P6 in the said civil suit on 27-2-1992.

    15. Article 54, Limitation Act, 1963, prescribes a period of limitation of three years for a suit for specific performance of the contract. Such period is to be reckoned from the date fixed for performance of the contract, and in case no date for such performance is fixed, then from the date the plaintiff has notice that performance is refused.

    16. In the present case, though initially vide agreement Ex. PW-1.A date for performance of the agreement was fixed as 15-7-1992, such agreement was replaced and substituted by another agreement Ex. PW-2.B wherein no specific date for the execution of the sale deed was fixed. The sale was contingent upon the result of the suit which was filed against the defendant by his brother and sister. It is specifically stipulated in Ex. PW-2.B that the defendant would execute the sale deed in favour of the plaintiffs after the decision of the said suit. No time was fixed within which the sale deed was to be executed after the decision of the suit. According to the plaintiffs, they had notice of refusal of specific performance on 31-3-1997. The suit was filed immediately thereafter on 5-4-1987(?). The same is, as such, within time.

    Question No. 2:

    17. It has been contended on behalf of the defendant that the plaintiffs in order to succeed have necessarily to prove the sufficiency and availability of funds with them and in the present case the plaintiffs having failed to prove the same, are not entitled to specific performance of the agreement. In support, reliance was sought to be placed on the decision of the Hon'ble Supreme Court in N.P Thirugnanam by LRs. v. Dr. R. Jagan Mohan Rao ((1995) 5 SCC 115 : (1995 AIR SCW 3803)), wherein it has been held that availability of consideration amount, conduct of the plaintiff and attending circumstances have to be taken into account by the Court in adjudging readiness and willingness of the plaintiff.

    18. In the case before the Hon'ble Supreme Court, the plaintiff therein had agreed to purchase the property from the defendant for a total consideration of Rs. 2,30,000/-. A sum of Rs. 10,000/- was paid by him as advance. Till the date of execution of the sale deed, the plaintiff came into possession of the property as a tenant agreeing to pay a sum of Rs. 1650/- per month as rent. He laid a suit for specific performance on the averments that the defendants had evaded to execute the sale deed, the defendants pleaded that they were ready and willing to perform their part of the agreement and that the plaintiff failed to pay Rs. 20,000/- further advance as contracted by December 1979 to discharge the mortgage debt due to the Madras Corporation. The amount of advance with the consent of plaintiff was adjusted towards the rent payable. During the pendency of the suit, on an application filed by the defendants, the learned trial Judge directed the plaintiff by an order dated 12-11-1991 to deposit the amount of Rs. 2,00,000/- or furnish Bank guarantee by 11-3-1981. The plaintiff neither deposited the amount nor furnished the Bank guarantee. It was also noticed that the plaintiff was dabbling in real estate business. He had a house on hire-purchase agreement with the T.N Housing Board. He had paid only Rs. 7750/- up to 1980. A sum of Rs. 29,665/- was further payable. He had an agreement with one Annamma Philip for Rs. 49,500/- to sell the said house after purchase from the Board. He had obtained advance and sold the house of his vendee on 7-2-1980 after getting a sale deed executed in his favour. He entered into an agreement with the defendants on 9-4-1979 to purchase their house for Rs. 2,30,000/-. He was not able to pay the loans and he adjusted Rs. 20,000/- which was paid towards arrears of rent and paid only Rs. 1975/- towards sale consideration. He was unable to pay the rent to the defendants and had deposited huge amount towards arrears of rent pursuant to the orders of the Courts. The learned trial Judge took into consideration all these facts for concluding that the plaintiff was not ready and willing to perform his part of the agreement. The Division Bench in appeal agreed with the findings of the learned trial Judge. Agreeing with the reasonings and the conclusions of the two courts below, the Hon'ble Supreme Court held (at page 3804 of AIR SCW):—

    “It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the Court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under S. 20 of the Specific Relief Act, 1963 (for short “the Act”). Under Section 20, the Court is not bound to grant the relief just because there was a valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same he must fail………”

    19. The facts in the present case are distinguishable. At no time during the course of trial of the suit, the plaintiff was ever called upon to deposit the balance of the sale consideration so as to raise an inference whether he was possessed of sufficient means or not.

    20. A contention was raised by the learned counsel for the defendant that the agreement Ex. PW-2.B contains a stipulation, that the plaintiffs would be entitled to get the agreement specifically enforced on depositing the balance sale consideration in the Court. Therefore, the plaintiffs were required to deposit such balance sale consideration at the time of the suit and on their failure to do so, it will have to be inferred that they were not possessed of sufficient funds.

    21. There is no merit in the contention of the learned counsel for the defendant. Explanation (i) to Section 16(c) of the Specific Relief Act, 1963 provides:—

    “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.”

    22. The law, therefore, does not enjoin the plaintiffs seeking specific performance of a contract to deposit the amount in court unless he is so directed by the Court. Admittedly, no such direction was given by the trial Court in the present case. Therefore, on the failure of the plaintiffs to deposit the balance sale consideration, no adverse inference can be drawn against them.

    23. In V. Pechimuthu v. Gowrammal ((2001) 7 SCC 617 : (AIR 2001 SC 2446)), it has been held (at page 2451 of AIR):—

    “As far as the deposit of balance consideration was concerned under Explanation (i) to Section 16(c) of the Specific Relief Act, 1963, the appellant could wait for an order of the Court to do so. That is what he did. Both the trial Court and the first appellate Court on a consideration of all the evidence, therefore, rightly came to the conclusion that the appellant was ready and willing to perform his obligations under the agreement and was entitled to specific performance of it.”

    24. In R.C Chandiok v. Chuni Lal Sabharwal ((1970) 3 SCC 140 : (AIR 1971 SC 1238)), ‘A’ on 18-7-1955 had agreed to purchase a leasehold plot from ‘R’. At that time ‘R’ was not having the lease of the land from the Government in his favour nor was he in possession of the same. ‘R’, however, received earnest money from ‘A’ pursuant to agreement for sale which provided that balance of consideration would be paid within a month at the time of execution of the registered sale deed. Under the agreement, ‘R’ was under obligation to obtain permission and sanction of the Government before the transfer of lease hold plot. The lease in respect of the land agreed to be sold was executed in favour of ‘R’ on 21-4-1956. ‘R’ did not take steps to apply for sanction from the Government. ‘A’ filed the suit for specific performance of the agreement for sale. One of the contentions of ‘R’ was that ‘A’ was not ready and willing to perform his part of the contract. The Hon'ble Supreme Court observed that readiness and willingness could not be treated as a strait jacket formula and had to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned. It was further held that in the absence of any material to show that ‘A’ at any stage was not ready and willing to perform his part of the contract or that he did not have necessary funds for payment when the deed would be executed after sanction was obtained. ‘A’ was entitled to a decree for specific performance of contract.

    25. The above ratio was followed by and relied upon by a three Judge Bench of the Hon'ble Supreme Court in Syed Dastagir v. T.R Gopalakrishna Setty (1999) 6 SCC 337 : (AIR 1999 SC 3029) as also in Motilal Jain v. Ramdasi Devi (Smt.) (2000) 6 SCC 420 : (AIR 2000 SC 2408).

    26. In the present case, the plaintiff Ram Nath while appearing as PW 1 has categorically stated that the plaintiffs have always been and are ready to perform their part of the agreement and to pay the balance sale consideration. He has not been cross-examined on this aspect nor it was suggested to him that the plaintiffs were not possessed of funds. It is well settled that if a party fails to cross-examine a witness on a particular aspect then it has to be presumed that such aspect stands admitted by such party.

    27. Besides, the fact that the plaintiff was possessed of sufficient funds is only for the purpose of proving his readiness and willingness to perform his part of the agreement. As stated above, the two Courts below, on the basis of evidence coming on record, have concurrently held that the plaintiffs were and have been ready to perform their part of the contract.

    28. In Veerayee Ammal v. Seeni Ammal., JT 2001 (9) SC 145 : (AIR 2001 SC 2920), the plaintiff therein had entered into an agreement to sell with the defendant on 5-1-1980 and subsequently on 16-3-1980 for the purchase of land measuring 27 cents for a price of Rs. 24,3000/-. A sum of Rs. 8,000 was paid to the defendant as ear-lest money on the day of agreement. As the defendant failed to execute the sale deed, the plaintiff filed a suit for specific performance of the contract. In her written statement, the defendant admitted the agreement and receipt of Rs. 8,000/-. It was, however, contended that as the plaintiff committed breach of the contract and failed to pay balance amount of consideration, her suit for specific performance was not maintainble. The trial Court and the first appellate Court while decreeing the suit concurrently held that the plaintiff was always ready and willing to perform her part of the contract. In second appeal, the High Court of Madras, formulated the following question of law considering it as substantial question of law:—

    “Whether in the circumstances of the case, the plaintiff has established that she has been ready and willing to perform her part of the contract.”

    29. Answering the above question in the negative, the High Court set aside the concurrent findings of the two Courts below. On further appeal before the Hon'ble Supreme Court by the plaintiff, it was held (at page 2922 of AIR):

    “The question of law formulated as substantial question of law in the instant case cannot, in any way, be termed to be a question of law much less as substantial question of law. The question formulated in fact is a question of fact. Merely because of appreciation of evidence another view is also possible would not clothe the High Court to assume the jurisdiction by terming the question as substantial question of law. In this case issue No. 1, as framed by the trial Court, was, admittedly, an issue of fact which was concurrently held in favour of the appellant-plaintiff and did not justify the High Court to disturb the same by substituting its own finding for the findings of the Courts below, arrived at on appreciation of evidence.”

    30. In the present case also, the concurrent findings of the two Courts below holding that the plaintiffs have been ready and willing to perform their part of the contract, cannot be disturbed by this Court.

    Question No. 3.

    31. It has been contended on behalf of the defendant that the discretionary relief of specific performance ought not to have been granted in favour of the plaintiffs by the two Courts below keeping in view the rise in price of the immovable properties. According to the learned counsel for the defendant, the agreement was executed on 16-7-1991. More than ten years have since elapsed. In the mean-while, the prices of real estates have increased many fold and as such, it would be neither just nor equitable to grant specific performance of the agreement at this stage and that ends of justice would be met if the defendant is directed to pay back the amount of earnest money received by him along with interest. In support, the learned counsel placed reliance on the decision of the Hon'ble Supreme Court in K.S Vidyanandam v. Vairavan (1997) 3 SCC 1 : (AIR 1997 SC 1751).

    32. In the case before the Hon'ble Supreme Court, the specific performance of the agreement was refused by the learned trial Court on the ground that the plaintiff was not found ready and willing to perform his part of the agreement. The High Court in appeal granted specific performance. On further appeal, the Hon'ble Supreme Court found the plaintiff to be guilty of inaction for a period of 2½ years after initial payment of a small amount as earnest money and, therefore, taking note of rise in the price of real estates, especially, urban properties, specific performance was refused and the amount of earnest money was ordered to be refunded.

    33. In the present case, the plaintiffs are not to be blamed for the delay. The agreement Ex. PW-2.B which replaced and substituted the earlier agreement Ex. PW-1.A, specifically stipulates that the sale deed was to be executed by the defendant in favour of the plaintiffs only after the suit brought against him by his brother and sister was decided in his favour. Admittedly, such suit was decided in favour of the defendant on 26-8-1996. The defendant never informed the plaintiffs regarding the decision in the suit. The plaintiffs on coming to know of the decision, approached the defendant to execute the sale deed on receipt of the balance sale consideration. Since the defendant failed to perform his part of the agreement, the suit for specific performance was filed by the plaintiffs on 5-4-1997. The defendant himself was guilty of inaction and the delay in attributable to him. He, therefore, cannot be permitted to take advantage of his own inaction by pleading that the discretionary relief of specific performance should not be granted due to considerable rise in price.

    34. In S.V.R Mudaliar (dead) by LRs. v. Mrs. Rajabu F. Buhari (dead) by Lrs., AIR 1995 SC 1607, it has been held that specific performance of the agreement cannot be denied to the plaintiff merely on the ground that there has been considerable rise in prices of real estates during the period litigation remained pending between the parties.

    35. The two Courts below have concurrently granted the relief of specific performance of the agreement Ex. P.W 2.B. In the present second appeal, the rise in price of land agreed to be sold cannot be a relevant factor in denying the relief of specific performance by upsetting the relief granted in favour of the plaintiffs by the two Courts below.

    36. In V. Pechimuthu v. Gowrammal, (2001) 7 SCC 617 : (AIR 2001 SC 2446), where a decree for specific performance was passed by the learned trial Court and affirmed by the learned first appellate Court but reversed in second appeal by the High Court, the Hon'ble Supreme Court while reversing the judgment and decree of the High Court and restoring the judgments and decrees of the trial Court and the first appellate Court held at Page 2452:

    “Where the Court is considering whether or not to grant a decree for specific performance for the first time, the rise in the price of land agreed to be conveyed may be a relevant factor in denying the relief of specific performance. But in this case, the decree for specific performance has already been passed by the trial Court and affirmed by the first appellate Court. The only question before us is whether the High Court in second appeal was correct in reversing the decree. Consequently the principle enunciated in K.S Vidyanandam, (1997) 3 SCC 1 : (AIR 1997 SC 1751) will not apply.”

    37. The concurrent findings of the two Courts below granting specific performance of the agreement Ex. P.W 2.B in favour of the plaintiff, therefore, cannot be interfered with in the present appeal simply on the ground that there has been considerable rise in the price of land agreed to be sold due to passage of time since after the agreement.

    38. For the foregoing reasons, the present appeal fails and the same is dismissed with costs.

    Appeal dismissed.

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