R.N Mittal, J.:— This first appeal is directed against the judgment and decree of the Subordinate Judge First Class, Pathankot, dated November 7, 1973, dismissing the suit of the plaintiff.
2. Briefly the facts are that Capt. Kohar Singh, defendant No. 1, who was the owner of the land in dispute, agreed to sell it to the plaintiff as per agreement dated June 24, 1969, for a consideration of Rs. 45,000/-. An amount of Rs. 18,000/- was paid in cash as earnest money by the plaintiff to the said defendant at the time of execution of the agreement and the balance was to be paid by her at the time of registration of the sale deed. It was agreed that the sale deed would be executed by defendant No. 1, after the suit between defendant No. 1 and Ranjit Singh, defendant No. 2, regarding recovery of rent, pending in the Court of S.D.O (Civil) cum Assistant Collector First Grade, Pathankot, was decided. It was further agreed that if the breach of the agreement was committed by the plaintiff, she would forfeit her earnest money and in case it was committed by defendant No. 1, the plaintiff would be entitled to Rs. 18,000/- by way of damages in addition to refund of Rs. 18,000/- paid by her as earnest money. The plaintiff further pleaded that defendant No. 2 instituted a suit on July 4, 1969, against defendant No. 1 for declaration that he was the real owner of the property. The suit was dismissed by the lower Court and defendant No. 2 went up in appeal against that order. During the pendency of the appeal, defendant No. 1 colluded with defendant No. 2 and entered into a compromise with him by which he gave to defendant No. 2, 20 Kanals and 19 Marlas of land out of the land in dispute. The plaintiff has challenged the decree on the ground that it was entered into fraudulently and collusively with a Page: 775view to deprive her of rights in the property. The plaintiff instituted a suit stating that as defendant No. 1 had failed to perform his part of the agreement, she was entitled to its specific performance. In the alternative she prayed that a decree for the recovery of Rs. 36000/-, by way of refund of earnest money and damages be passed in her favour.
3. The suit was contested by the defendants. Defendant No. 1 inter alia pleaded that he had been paid Rs. 3000/- and not Rs. 18000/- as earnest money and that he was always ready and willing to perform his part of the agreement, but the plaintiff failed to perform her part. He further pleaded that the plaintiff wrongly insisted upon the delivery of actual possession as a precondition of sale. In the circumstances he prayed that the suit be dismissed Defendant No. 2 pleaded that there was no privity of contract between him and the plaintiff and consequently the suit was liable to be dismissed on this ground alone. He further pleaded that he was the real owner of the property and defendant No. 1 was a Benamidar and, therefore, the compromise arrived at between the defendants was not collusive. He also prayed for the dismissal of the plaintiff's suit.
4. On the pleadings of the parties, the following issues were framed:—
1. What are the terms and conditions of the agreement dated 24th June, 1969?
2. Whether the plaintiff was and is ready and willing to per form her part of contract?
3. Whether defendant No. 1 has committed breach of agreement in question?
4. Whether defendant No. 1 was and is ready and willing to perform his part of contract?
5. Whether the plaintiff or defendant No. 1 committed breach of contract?
6. Whether defendant No. 1 had rightly forfeited the earnest money?
7. Whether compromise deed arrived at between defendant No. 1 and No. 2 regarding part of suit land is fraudulent, collusive and was effected to injure the interest of the plaintiff. If so, its effect?
8. Whether plaintiff is entitled to specific performance of the contract in question?
9. Whether the plaintiff is entitled to any damages. If so, to what amount?
10. Whether the plaintiff is estopped from filing this suit by his act and conduct?
11. Relief.
5. The trial Court held that the plaintiff had interpolated a condition in the agreement that defendant No. 1 would deliver possession of the land in dispute at the time of execution of the sale deed, that the other conditions of sale were the same as had been entered into the agreement dated June 24, 1969, that defendant No. 1 was ready and willing to perform his part of the agreement and the plaintiff committed a breach thereof, that the compromise between defendant No. 1 and defendant No. 2 was not fraudulent or collusive and that the plaintiff was not entitled to either specific performance of the contract or damages. Page: 776Consequently it dismissed the suit of the plaintiff. He has come up in appeal against the judgment and decree of the trial Court to this Court.
6. Firstly it is contended by the learned counsel for the appellant that the finding of the learned trial Court that a clause had been added in the agreement by the appellant that defendant No. 1 would deliver possession of the property in dispute to her after the execution of the sale deed, was not correct. He submits that the appellant produced three witnesses, namely, Hans Raj, P.W 1, the scrible, Kirpal Singh, P.W 2, the attesting witness and Gurbux Singh, P.W 3, the attorney of the appellant and all of them had stated that the clause was added at the time of the execution of the agreement. According to the counsel, there is no evidence in rebuttal worth the name. He further urges that the finding of trial Court is consequently liable to be set aside.
7. I have given a thoughtful consideration to the argument of the learned counsel, but regret my inability to accept it. It is no doubt true that the abovesaid witnesses deposed that the said condition was incorporated in the deed at the time of the execution of the agreement, but the circumstances and the statement of defendant No. 1 proves beyond a shadow of doubt that the clause which has been marked ‘A’ to ‘A’, was inserted subsequently. A bare perusal of the agreement, Exhibit P. 1, shows that the clause has been added in a different ink between the last line of the document and the words ‘Alabad’ and ‘Gwahan’. The writing of the document had been closed by giving the date of the document. Thereafter the names of the witnesses and the parties to the agreement were given and their signatures were obtained. The words “Neez barwaqat registry kabza arazi moqia par dila dunga. Maurkha 24th June, 1969,” were inserted in the space between the above lines. It is further evident that the word ‘ra’ of ‘registry’ has been written over the word ‘alabad’. It is also noteworthy that no intials or signatures of the parties to the agreement were obtained on this interpolation. Normally if any insertion is made in a document after the writing has been finished or any words have been scored out, initials are obtained by the petition wetter to show that the same was done at their instance. This was an important clause in the agreement and the parties knew that the land was in possession of Ranjit Singh, defendant No. 2, who had litigation with defendant No. 1, and the case was pending in the Court of Assistant Collector, First Grade, Pathankot (Sub-Divisional Officer, Civil). The sale deed was to be executed after the decision of that case. This clause should have found place along with other terms on which the plaintiff agreed to purchase the land. Defendant No. 1 in his statement categorically denied that the said clause was not incorporated in the agreement at time of its execution Hans Raj, scribe, could not give any plausible explanation as to why he did not obtain signatures of the parties over this writing. He could not say as to whether he was told about the term of the agreement given in portion ‘A’ to ‘A’ by the parties, before writing the same. The term also does not find place in his register.
8. Kirpal Singh, P.W 2, states that he did not know who was in possession of the land at the time of the agreement. He admits that Page: 777there was no talk between the parties as to who was in possession thereof. He even does not know as to what case was pending in the Court of Sub-Divisional Officer. It is thus evident that the witness does not know even salient terms of agreement. He was serving in the Life Insurance Corporation and was marked present in the office. It appears that he was not present when the document was being scribed but was called to attest it when it was completed. After taking into consideration the aforesaid circumstances I am of the view that no reliance can be placed on his statement, that, portion marked ‘A to A’ was inserted at the time when the agreement was executed.
9. Gurbax Singh, P.W 3, was the General Attorney of the appellant. He admitted that the land was in possession of defendant No. 2 at the time of the execution of the agreement between the appellant and defendant No. 1. It is common knowledge that the tenants do not ordinarily give up possession of the properties, Kohar Singh would have been the last person to include such a term in the agreement. The learned counsel for the appellant referred to V. Ramanathan Chettiar v. Muthukumaru A.I.R 1920 Mad. 974, wherein it was observed that any alteration or interpolation appearing on the face of a document is presumed, in the absence of evidence to the contrary, to have been made before the execution of the deed and this presumption is strengthened where there is no note of such interpolation by the Registrar. The facts of that case were different. There the document was a registered one. The observation were made in that context. The appellant cannot derive any benefit from the said observations. After taking into consideration all the circumstances I am of the view that the finding of the trial Court in this regard is correct and consequently I affirm the same.
10. Secondly it is contended by the learned counsel for the appellant that the appellant was always ready and willing to perform her part of the agreement and defendant No. 1 had failed to perform his part of the agreement. The learned counsel urges that in the circumstances, the appellant was entitled to a decree for specific performance and in the alternative, for return of Rs. 18000/- as earnest money.
11. I am also not impressed with this contention of the learned counsel. I have gone through the various notices which were exchanged between the parties, very carefully. Capt. Kohar Singh, defendant No. 1, on December 2, 1970, gave notice Exhibit D. 10 to the appellant that the case had been decided in his favour by the Sub Divisional officer (Civil)-cum-Assistant Collector and requested her to get the sale deed executed within a week of the notice on payment of Rs. 27000/-. The appellant sent a reply dated December 29, 1970, Exhibit D. 1 to the effect that she was not liable to implement the agreement unless Ranjit Singh, was ejected from the land and its possession was given to her. Again on January 11, 1971, she wrote to defendant No. 1 that she had not heard anything regarding ejectment of the tenant from the land. She also requested that the tenant be ejected at an early date and then the sale deed be executed in her favour. Several notices thereafter exchanged between the parties. The appellant persisted in her right to get possession of the property at the time of execution of the sale deed in her letters dated January 25, 19/1 (Exhibit Page: 778D. 4), January 29, 1971 (Exhibit D-3, and September 28, 1971 Exhibit D. 5). Even in the plaint the appellant putforth the same case. It was given in the plaint that defendant No. 1 had also agreed to deliver actual possession of the land in dispute to the appellant at the spot at the time of the registration of the sale deed. Gurbux Singh, P.W 3, attorney of the appellant, in his statement, also reiterated the same position. He admits that defendant No. 1 was ready to execute the sale deed without delivery of possession of the land but it was not acceptable to the appellant. From the aforesaid evidence it emerges that defendant No. 1 was ready and willing to execute his part of the agreement but the appellant was not agreeable to get the document executed and pay the remaining consideration on the ground that she should be given, possession of the property at the time of registration. I have already held above that the clause regarding delivery of possession was an interpolation made by the appellant subsequently. Therefore, it cannot be held that there was a condition between the parties that possession of the land would be delivered at the time of registration of the sale deed. If there was no such condition, the appellant could not insist on the delivery of the possession. As such, in my view, the breach of the agreement was committed by the appellant and not by defendant No. 1, who was always ready and willing to perform his part of the agreement. Consequently, the finding of the trial Court on these matters is also affirmed.
12. Thirdly, Mr. Mann argued that time was not the essence of the contract and the appellant could get the sale deed executed at any time. There is no dispute about the proposition that in the case of sale of immovable properties, time is not the essence of the contract unless there is an express stipulation or the circumstances are so strong to infer that time was the essence of the contract. See Gomthinayaqam Pillai v. Palaniswami Nadar A.I.R 1967 S.C 868. This question, however, does not arise in the present case as the appellant was insisting on delivery of possession which condition was incorporated subsequently in the agreement at the instance of the appellant only. She, till the date of the institution as stated above, insisted on delivery of possession. It is not her case that she was ready and willing to get the sale deed executed without possession of the property. In the circumstances the argument does not arise.
13. Fourthly, it is contended by Mr. Mann that defendant No. 1 is not entitled to forfeit the earnest money. He also contends that the appellant is entitled to damages amounting to Rs. 18000/-. I am not impressed with this contention of the learned counsel also. It is an established principle of law that earnest money is part of the purchase price if the transaction goes forward, it is to be forfeited when the transaction falls through on account of the fault of the vendee. See Chairanjit Singh v. Har Swarup A.I.R 1926 P.C 1. In the present case, as discussed above, the transaction fell through because the appellant failed to perform her first of the agreement. Therefore, respondent No. 1 was entitled to forfeit the earnest money. If the transaction fell on account of the appellant, she is also not entitled to recover damages.
14. No other argument was advanced by the counsel for the appellant. For the reasons recorded above, the appeal fails and the same is dismissed with no order as to costs.
15. Appeal dismissed.