Mohan Singh And Another v. Kulwinder Singh .

R.L Anand, J.:— S/Shri Mohan Singh and Harminder Singh sons of Shri Kartar Singh, who were defendants in the trial Court, have filed the present appeal and it has been directed against the judgment and decree dated 8.2.1997 passed by Civil Judge (Senior Division), Jalandhar, who granted a decree for joint possession of the suit property by way of specific performance of the agreement dated 26.8.1989 with costs and called upon the defendants/appellants to execute the sale deed in favour of the plaintiff/respondent on receipt of balance amount of Rs. 18,50,000/- within two months, failing which the plaintiff/respondent shall be entitled to get the sale deed executed by execution of the decree.

2. The brief facts of the case are that a suit for joint possession by way of specific performance of the agreement to sell dated 26.8.1989 was filed by Kulwinder Singh alleging that the defendants/appellants executed the agreement to sell dated 26.8.1989 with regard to ⅔rd share in the house for consideration of Rs. 23,50,000/- and they received a sum of Rs. 4,00,000/- by way of earnest money. It was agreed upon between the parties that Rs. 1,00,000/- shall be paid to the vendors on or before 16.9.1989 and the remaining amount at the time of registration of the sale deed which was to be executed by 25.3.1990 The plaintiff was always ready and willing to perform his part of contract Rs. 1,00,000/- were paid to the defendants on 16.9.1989 against a receipt. Further, the date of performance was extended by mutual consent by the parties firstly upto 31.7.1990 and, thereafter upto 1.10.1990 because the defendants could not get clearance certificate from the income-tax authorities. It was alleged by the plaintiff that after the extension of time he was always ready and willing to perform his part of contract. However, the defendants after 31.7.1990 threatened to sell the property to some other person, as a result of that the plaintiff had to file a suit for injunction against the defendants praying that the defendants should not alienate the suit property to any person. Thereafter, withdrawing the previous suit with the permission of the Court, he filed the present suit for joint possession by way of specific performance on the plea that the defendants are not inclined to discharge their obligation under the contract.

3. The suit was contested by the defendants. They admitted the execution of the agreement of sale as well as the sale consideration of the suit property. However, they submitted that on 26.8.1989 only Rs. 1,00,000/- were paid and not Rs. 4,00,000/- as alleged by the plaintiff. Thereafter, another amount of Rs. 1,00,000/- was paid to them. According to the defendants, thus only Rs. 2,00,000/- were paid to them by way of earnest money, but the plaintiff by misrepresentation and in collusion with the deed-writer got mentioned Rs. 4,00,000/- as earnest money. Further, it is alleged that second extension from 31.7.1990 to 1.10.1990 was made by Mohan Singh defendant alone and not by Harminder Singh, defendant No. 2. Therefore, the plaintiff is not entitled to the specific performance. The plaintiff was not ready and willing to perform his part of contract as he had no money with him the defendants also alleged that on 31.7.1990 and 1.10.1990 they appeared before the Sub-Registrar to execute the sale deed but the plaintiff did not turn up. In these circumstances, the plaintiff is not entitled to the decree of specific performance.

4. The plaintiff filed a re-joinder to the written statement in which he reiterated the allegations made in the plaint by denying those of the written statement and from the pleadings of the parties the learned trial Court framed the following issues:

1. Whether the defendants executed an agreement of sale dated 26.8.1989 in favour of the plaintiff? OPP

2. Whether the plaintiff has always been ready and willing and is still ready and willing to perform his part of the agreement? OPP

3. Whether the plaintiff is entitled to the decree for specific performance or in the alternative for recovery? OPP

4. Whether the agreement dated 29.8.1989 is without complete consideration as alleged in para 3 of the written statement, filed by defendant No. 1, if so, its effect? OPD

5. Whether time is essence of the agreement and the plaintiff is guilty of the delay? If so, its effect? OPD

6. Whether the plaint is not in accordance with form 87 and 88, prescribed under the law? If so, its effect? OPD

7. Whether the suit is barred under Order 2 Rule 2 CPC? OPD

8. Whether the plaintiff is estopped by his own acts and conduct to file the present suit? OPD

9. Relief.

5. In order to prove his case the plaintiff examined Krishan Lal, deed-writer as PW1, Charanjit Singh as PW2, and he himself stepped into the witness-box as PW3. He produced original agreement Ex. P1, endorsement regarding receipt of Rs. 1,00,000/- Ex. P2, endorsement regarding extension of time up to 31.7.1990 Ex. P3 and endorsement regarding extension of time upto 1.10.1990 Ex. P4 on record. In rebuttal, defendant Harminder Singh appeared as DW1 and he also examined Inder Mohan, Tax Assistant as DW2.

6. On conclusion of the proceedings, the trial Court dealt issues No. 1 and 4 together and decided the same in favour of the plaintiff and against the defendants. Similarly, issues No. 2, 3, 5, 7 and 8 were decided in favour of the plaintiff and against the defendants. Issue No. 6 was decided against the defendants as this issue was not pressed. Resultantly, the trial Court passed a decree for joint possession by way of specific performance as stated in the earlier portion of this judgment and aggrieved by the judgment and decree of the trial Court, the present first appeal in the High Court because the jurisdiction value of the suit was more than Rs. 10,00,000/-.

7. I have heard Mr. J.R Mittal, Sr. Advocate, assisted by Mr. K.K Garg, Advocate, for the appellants, Mr. Kanwaljit Singh, Advocate for the respondent and with their assistance have gone through the records of the case.

8. The learned senior counsel appearing on behalf of the appellants attempted to highlight certain facts and he finally submitted that the cumulative effect of the points raised by him will prima facie show that a case for specific performance is not made out. At the most, the plaintiff is entitled to the damages or for the return of the earnest money. The various factors highlighted by the learned senior counsel were that the original agreement was executed by Mohan Singh and Harminder Singh defendants but the extension was always given by Mohan Singh alone and not by Harminder Singh and in the agreement it is written that in the event of the non-performance of the agreement, the plaintiff will be entitled to the damages or for specific performance. He wanted to say that the primary intention of the parties was that in case of default on the part of the present appellants, the plaintiff-respondent will be entitled to the damages or return of the amount. He further submitted that present suit was a device because the plaintiff was not ready and willing to perform his part of contract. He had no money. There is nothing to suggest on the record that the plaintiff at any time was ready and willing to perform his part of contract. Rather, the defendants appeared before the Sub-Registrar on 31.7.1990 and 1.10.1990 to show that they were ready and willing to perform their part of contract and hence the decree for joint possession by way of specific performance should not have been granted. The learned senior counsel further submitted that the present suit for joint possession by way of specific performance is not legally maintainable and is barred under Order 2 Rule 2 of the Code of Civil Procedure because earlier the suit for injunction filed by the plaintiff was got dismissed and at that time he could also file a suit for joint possession by way of specific performance.

9. On the contrary, the learned counsel for the respondent submitted that execution of the agreement in question is proved. The defendants had taken a false plea before the trial Court that at the time of the execution of the agreement, only Rs. 1,00,000/- were given, but, in fact, Rs. 4,00,000/- were given. The intention of the defendants became bad and they wanted to sell the property to some other persons, therefore, the plaintiff had to file a suit for injunction after 31.7.1990 and prior to 1.10.1990 The defendants were restrained from alienating the suit property. The plaintiff was always ready and willing to perform his part of contract. The plaintiff did not lose any time and he filed the present suit in the month of November, 1990. The cause of action for specific performance had not ripped (ripened?) for the benefit of the plaintiff when the suit for injunction was filed. At no point of time the defendants took the stand that they were ready to execute the sale deed in favour of the plaintiff. The defendants could easily say to the Court in November, 1990 that they were ready and willing to execute the sale deed. The plaintiff at that time would have shown the actual money to the defendants. In fact, the defendants did not obtain the essential no encumbrance certificate from the income-tax authorities. Mohan Singh, the co-vendor of Harminder Singh was always inclined to sell the property. He signed the extensions. The time was not the essence of the contract. Therefore, the suit has been rightly decreed by the Court below.

10. Both the parties have also produced certain case law before me which shall also be considered by me in the subsequent portion of this judgment, but at this juncture I must say that this appeal is totally devoid of any merit and deserves to be dismissed with costs.

11. The first point for determination in this case is whether the defendants executed the agreement of sale dated 26.8.1989 in favour of the plaintiff or not. In this regard there is an overwhelming evidence led by the plaintiff when he examined Krishan Lal, deed-writer as PW1 and Charanjit Singh son of Gurmukh Singh as PW2. Apart from that, the plaintiff appeared as his own witness as PW3. All the three witnesses have deposed in one voice that the defendants executed the agreement to sell dated 26.8.1989 and received Rs. 4,00,000/- by way of earnest money at the time of the agreement and it was agreed upon that the plaintiff will pay an additional amount of Rs. 1,00,000/- on or before 16.9.1989 It is the common case of the parties that Rs. 1,00,000/- were paid subsequently. Had the defendants received Rs. 1,00,000/- on 26.8.1989, they would not have extended the limitation by receiving Rs. 1,00,000/- on 16.9.1989 This clearly indicates that on 26.8.1989 the defendants received Rs. 4,00,000/- as alleged by the plaintiff and executed the agreement to sell. Since the consideration of the sale deed was more, therefore, it was obligatory on the part of the defendants to obtain no encumbrance certificate from the income-tax authorities and they could not procure it and that was the reason that time was extended as the last date of performance of sale deed was 1.10.1990 Two extensions given by Mohan Singh defendant clearly establish that time was never the essence of the contract. At no point of time defendant Harminder Singh ever gave a notice to the plaintiff that he was not bound by the agreement or that he had repudiated the agreement to the disadvantage of the plaintiff. We all know that in a case relating to immovable property time is not invariably the essence unless it is made so. Neither Mohan Singh nor Harminder Singh ever gave notice to the plaintiff calling upon him that they were ready to execute the sale deed or that the plaintiff should tender the stamp charges and the will execute the sale deed. Rather, the intention of the defendants was bad right from the very beginning, as a result of that the plaintiff had to file a suit for injunction. Even in that suit the defendants did not offer that they will execute the sale deed. The plaintiff in this case did not lose any time. The suit was instituted on 20.11.1990 The extended period was upto 1.10.1990 Just after 50 days the suit had been instituted. The earlier suit which was filed by the plaintiff was for injunction and that was filed prior to 1.10.1990 That was withdrawn with the permission of the Court. The order was not challenged by the defendants. Even otherwise, the cause of action for specific performance did not mature in favour of the plaintiff till 1.10.1990 When the defendants had already shown their bad intention that they were not ready and willing to perform their part of contract, in such situation it was not obligatory on the part of the plaintiff to personally go to the Court of Sub Registrar on 1.10.1990 and to give an affidavit that he was ready and willing to purchase the property. This practice of appearing before the Registrar on stipulated date is not the requirement of the Registration Act, but this is only a circumstance of evidence. The very institution of the suit by the plaintiff on 20.11.1990 would show that he was always ready and willing to perform his part of the contract. If the intention of the defendants was clear and sincere, they could tell the Court somewhere in the month of November and December, 1990 that they were ready to execute the sale deed in favour of the plaintiff and if the plaintiff at that time was not inclined to get the sale deed executed in his favour or that he was not ready with money, then some inference could be drawn in favour of the defendants that plaintiff had filed the suit with some ulterior object in order to get gain out of the property agreed to be purchased by him. In the absence of such evidence, I am not in a position to accept any of the contentions raised by the learned counsel for the appellants.

12. No doubt, the relief of specific performance is a discretionary one, but discretion has to be exercised judiciously and not arbitrarily. In such like suits this Court is of the opinion that once agreement is proved; consideration is proved; the plaintiff was always ready and willing to perform his part of contract at the time of the institution of the suit and at all material opportunities, this relief should not be declined to him. Otherwise, the very object of the suit for specific performance would frustrate. Of course, the specific performance can be declined to a plaintiff if he has taken undue advantage of the situation, or if he has acted with fraud, or the circumstances of the case are such that the sale deed should not be ordered to be executed, then in that eventuality alone the decree for specific performance may not be given. But in the present case all the circumstances are in favour of plaintiff Kulwinder Singh.

13. The learned counsel for the appellants relied upon K. Raheja Constructions Ltd. v. Alliance Ministries, 1995 Supp (3) SCC 17 : AIR 1995 Supreme Court 1768 : 1995 (3) RRR 425 (SC). This judgment is snot applicable to the facts in hand. In this case the Hon'ble Supreme Court was dealing with the case whether the amendment under Order 6 Rule 17 of the Code of Civil Procedure ought to have been allowed or not. In spite of the knowledge that the defendant was not inclined to execute the sale deed, the plaintiff filed a suit for injunction. Later on, the plaintiff wanted to amend the plaint. In peculiar circumstances, the Hon'ble Supreme Court was pleased to hold that such an amendment should not be allowed. But in the present case there was extension of time upto 1.10.1990 There was no notice in writing by the defendants to the plaintiff that they were not inclined to execute the sale deed in his favour. In these circumstances, the cause of action did not arise to the plaintiff for filing a suit of possession by way of specific performance prior to 1.10.1990 Then the learned senior counsel relied upon Bakhtawar Singh v. Sada, Kuar, 1997 (1) PLR (SC) 678 : 1997 (1) RRR 51 (SC). In this case the Hon'ble Supreme Court held that if the suit does not indicate what was the formal defect, then in such eventuality the Court should not give permission for the withdrawal of the suit with permission to file fresh suit on the same cause of action. Here the facts are totally different. Earlier the plaintiff filed a suit for injunction after 31.7.1990 It was dismissed as withdrawn with the permission of the Court to file a fresh one as the plaintiff averred that he will file a suit for possession. Upto 1.10.1990 the plaintiff could always wait whether the defendants were ready to execute the sale deed or not. After 1.10.1990, when the defendants showed their teeth, the plaintiff rushed to the Court without wasting time and in these circumstances he was rightly granted the decree by the trial Court.

14. Mr. J.R Mittal, the learned senior counsel, further relied upon Dadarao v. Ramrao, 2000 (1) Civil Court Cases 199 (S.C). This judgment is not helpful to him. In our case the agreement is not vague, rather it gives two rights to the plaintiff. Further, reliance was placed upon Kanshi Ram v. Om Parkash Jawal, JT 1996 (4) S.C 733 and it was submitted that since the plaintiff has claimed alternative relief for damages, therefore, the Courts would have been justified in granting alternative decree for damages instead of ordering specific performance. In this case the Court has rather granted a decree for possession, therefore, the discretion which has been validly exercised in favour of the plaintiff should not be disturbed by the Appellate Court. Lastly, reliance was also placed on Bhag Ram v. Pala Singh, 1996 (1) RRR 468. This judgment, in my opinion, is again not helpful because the cause of action for specific performance had not matured in favour of the plaintiff when the suit for injunction was filed.

15. On the contrary, the learned counsel for the respondent relied upon Sawaran Singh… v. Pawan Kumar…., 1999 (1) PLJ, 437 : 1999 (2) RRR 560 (P&H), wherein it was held that when the period for execution of sale deed was extended with the payment of additional amount and later on further extended, in such cases it should be inferred that parties never intended to treat time as essence of the contract. In the present case also, time was extended always by Mohan Singh for the execution of the sale deed. As per agreement Rs. 1,00,000/- were paid on or before 16.9.1989 In Manzoor Ahmed Margray v. Gulam Hassan Aram, JT 1999 (8) SC 34 : 1999 (4) RRR 597 (SC) the Hon'ble Supreme Court held that if the agreement carries a penalty clause for violation of terms, whether in such a case decree for specific performance can be granted or not and the answer to the query was that there is no bar for granting a decree for specific performance. The reason is very simple. Agreement is an essence and soul of the contract. If every party is allowed to violate the obligations, the very sanctity of the transaction of sale will be jeopardised. Reliance was also placed on Syed Dastagir v. T.R Gopalakrishna Setty., 1999 (2) PLJ 312 : 1999 (3) RRR 643 (SC), where the Hon'ble Supreme Court was interpreting the phraseology of “readiness and willingness” and it was held that if the plaintiff avers that he was ready and willing to perform his part of contract, it is enough compliance of readiness and willingness. It was observed that one has to see the pith and substance of the plea. In this case the Court has never directed the plaintiff to produce the actual money. I have already stated above if the intention of the defendants was clear to execute the sale deed in favour of the plaintiff, they could have called upon the Court somewhere in November/December, 1990 itself that they are ready and willing to execute the sale deed and let the plaintiff should produce the money. Now it is too late for the defendants to say that since 10 years have elapsed, therefore, they should not have been asked to execute the sale deed. The defendants cannot take the advantage of their own wrongs. They have created a situation for themselves and under the created situation they cannot defeat the legitimate rights of the plaintiff. Therefore, I have considered this appeal both on the question of law and fact and am of the considered opinion that no interference is called for in the judgment and decree of the trial Court.

16. Resultantly, the appeal is hereby dismissed with costs. Counsel fee is assessed at Rs. 5,000/-. Decree-sheet the prepared accordingly.

Appeal dismissed.