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AMICUS AI
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Attorney(S)
  • For the Appellant: C.V. Nagesh, Advocate.
  • For the Respondent: R5 (AE), Kumar & Kumar, C.S. Prasanna Kumar & Sridhar, Advocates.
Judges
  • Ram Mohan Reddy, J.
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Attorney(S)
  • For the Appellant: C.V. Nagesh, Advocate.
  • For the Respondent: R5 (AE), Kumar & Kumar, C.S. Prasanna Kumar & Sridhar, Advocates.
Judges
  • Ram Mohan Reddy, J.
Acts
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Smart Summary

Structured Summary of the Court's Opinion

Factual and Procedural Background

The appellant (plaintiff at trial) instituted O.S. No. 2012 of 1985 seeking specific performance of an agreement of sale dated 25-12-1983 (Ex. P.1) and a permanent injunction restraining the vendors (respondents 1–4) from disturbing his peaceful possession of a residential site in Bangalore. The appellant paid Rs. 5,000 as part consideration (out of Rs. 45,000) and was put in physical possession and handed original title deeds. The agreement required the vendors to secure permissions under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCR Act) and under the Income-tax Act, and to get change of katha; time for completion was to be five months (with a two-month extension for delays in obtaining permissions).

The appellant alleges compliance with obligations: erection of a cattle shed, payment of betterment charges (receipt Ex. P.7), obtaining change of katha (Ex. P.8), and payment of municipal taxes (Exs. P.4–P.6). The vendors allegedly issued a notice dated 6-3-1985 (Ex. P.11) demanding payment; the appellant replied (Ex. P.12) and requested execution of the conveyance on 23-5-1985 (Ex. P.14). The vendors purportedly sent a telegram dated 18-5-1985 (Ex. P.27) rescinding the agreement and asked for return of original documents.

At trial, defendants 1–4 were ex parte. A fifth party (respondent 5) was impleaded after claiming to have purchased the property by a sale deed dated 30-5-1985 (Ex. D.2) and resisted the suit. The Trial Court framed six issues, recorded evidence (plaintiff as P.W.1 and respondents' witnesses), and partly decreed the suit on 25-9-2000 by holding that respondent 5 was the owner under Ex. D.2 and entitled to possess the property. The appellant appealed under Section 96 CPC.

Legal Issues Presented

  1. Whether the Trial Court was justified in finding (Issue 3) that the 5th defendant purchased the property under the sale deed Ex. D.2?
  2. Whether the Trial Court was justified in finding that the 5th defendant was entitled to take possession of the suit schedule property in accordance with law?
  3. Whether the Trial Court was justified in finding (Issue 5) that the 5th defendant proved the plaintiff to be a defaulter, not ready and willing to perform his obligations?
  4. Whether the Trial Court was justified in finding (Issue 4) that the plaintiff was not ready and willing to perform his obligations?

Arguments of the Parties

Appellant's Arguments (as advanced by learned Senior Counsel)

  • The 5th respondent, having knowledge of the appellant's agreement of sale (Ex. P.1), was not entitled to resist the suit; only a bona fide purchaser for value without notice can resist such a claim — a principle drawn from M.M.S. Investments v. V. Veerappan (AIR 2007 SC 2663).
  • The Trial Court failed to consider material facts showing the appellant had complied with his obligations: payment of betterment charges and taxes, and securing change of katha, despite such duties being the vendors' obligations under Ex. P.1.
  • The vendors breached the agreement by not securing permissions (a condition precedent) required before the appellant had to pay the balance consideration.
  • The appellant was ready and willing to pay the balance consideration and had taken steps to have the sale deed executed on 23-5-1985; it was not necessary to carry cash at all times — capacity to pay suffices (relying on Sukhbir Singh v. Brij Pal Singh, 1997 2 SCC 200).
  • The subsequent sale (Ex. D.2) for Rs. 48,000 (Rs. 3,000 in excess of the agreed price) demonstrates vendors took advantage of the appellant's predicament to profit, indicating rescission by vendors rather than default by the appellant.

5th Respondent's Arguments

  • Conceded that, in general, a purchaser who had knowledge of prior agreement (when vendors were ex parte) could not rely on the vendor's pleas, but nevertheless urged the Trial Court's findings be sustained denying specific performance.
  • Relied on the appellant's reply notice (Ex. P.12) and other conduct to argue the appellant was not continuously ready and willing to perform — the reply expressed regret for delay and was said to show avoidance to execute the sale deed.
  • Asserted the oral testimony failed to show readiness and willingness to pay the expenses needed to secure permissions under ULCR Act and Income-tax Act; pointed to the legal notice (Ex. P.11) demanding execution by 18-3-1985 as evidence of default.
  • Argued that time was the essence of the contract because the sale arose from the vendors' dire necessity (as stated in Ex. P.1), and the purchaser’s delay disadvantaged the vendors.
  • Relied on earlier case law (Saraswathi Ammal, Manjunath Anandappa, His Holiness Acharya Swami Ganesh Dassji) to support a view that specific performance should be denied where purchaser’s conduct or delay merits refusal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
M.M.S. Investments, Madurai v. V. Veerappan (AIR 2007 SC 2663) Purchaser claiming under a vendor steps into vendor's shoes only if he proves he is a bona fide purchaser for value without notice; such purchaser cannot press the vendor's plea of the original purchaser's want of readiness and willingness. The Court relied on this authority to hold that respondent 5, who had knowledge of Ex. P.1, could not sustain a plea that the appellant was not ready and willing; respondent 5 was not a bona fide purchaser for value without notice, hence could not avail itself of issue 5.
Sukhbir Singh v. Brij Pal Singh (1997 2 SCC 200) To prove readiness and willingness, it is not necessary to carry ready cash at all times; proof of capacity to pay and acts showing attendance at Sub-Registrar's office are sufficient. The Court applied this principle to conclude the appellant's presence and steps to have the deed executed demonstrated capacity and bona fide readiness to pay the balance consideration; the Trial Court erred in finding lack of readiness.
Smt. Chand Rani (dead) by L.Rs v. Smt. Kamal Rani (dead) by L.Rs (AIR 1993 SC 1742) In sale of immovable property, there is a presumption that time is not of the essence; whether time is of essence depends on express terms, nature of property, and surrounding circumstances. The Court used this five-judge bench authority to observe that time is ordinarily not of the essence and to assess whether, on the facts, time should be treated as essence — concluding it was not shown to be so here.
Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son (AIR 1987 SC 2328) Court should examine facts and circumstances carefully and not allow specific performance to be used oppressively; implied consent and waiver can disentitle an initial agreement holder or his assignee. Cited to underscore that courts must balance equities and not grant specific performance as an instrument of oppression; used as general guidance on equitable discretion (no direct factual parity asserted).
Nirmala Anand v. Advent Corporation Pvt. Ltd. (AIR 2002 SC 2290) Specific performance is equitable; court must strike a balance of equities and consider lapses by each party; plaintiff may not reap entire benefit if other circumstances require sharing burden. Referenced to emphasize that specific performance depends on justice, equity and good conscience, and the Court must weigh conduct of parties before granting relief.
Jawahar Lal Wadhwa v. Haripada Chakroberty (AIR 1989 SC 606) Where one party repudiates, the other may not be automatically absolved from proving readiness and willingness; tender may not be required where defendant has repudiated, but readiness must be shown. Used to explain the doctrine that readiness and willingness remains essential to seek specific performance; supports requirement that appellant must show he was ready and willing (which this Court found he did).
International Contractors Ltd. v. Prasanta Kumar Sur (AIR 1962 SC 77) Illustrative authority cited in the context of readiness/willingness principle and remedial options when a party repudiates. Quoted within another precedent (Jawahar Lal) and indirectly relied upon for the legal backdrop on remedies and readiness/willingness; no independent factual application.
A. Maria Angelena (dead) by L.Rs v. A.G. Balkis Bee (AIR 2002 SC 2385) Plea that specific performance would cause serious hardship to vendor/subsequent purchaser and that plaintiff should instead be compensated must be taken at the earliest stage and be an issue framed and decided. The Court applied this to hold that respondent 5's plea of hardship/time being essence should have been raised and decided earlier; it could not be advanced for the first time on appeal.
Manjunath Anandappa Urf Shivappa Hansi v. Tammanasa (AIR 2003 SC 1391) Fact-specific authority where failure to ask for deed/tender for long period disentitled purchaser; illustrates strict application of Section 16(c) facts. Court distinguished that authority on facts: there purchaser made no efforts for years; hence the Court found Manjunath inapplicable to the present facts where appellant had positively acted.
His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar (AIR 1996 SC 2095) Time held to be essence where vendor had dire necessity (marriage); purchaser lacked funds and therefore specific performance was denied. Court held the facts of that case distinguishable — here there was no comparable factual demonstration that time was of essence or that the appellant lacked funds.
Saraswathi Ammal v. V.C. Lingam (1993 1 Kar. L.J 196 DB) Courts should consider purchaser's conduct and delay; if purchaser procrastinates for advantage while in possession, court may refuse specific performance. Cited by respondent 5; the Court held it not applicable on the facts because the appellant's conduct did not demonstrate procrastination to his advantage and respondents 1–4 had failed to secure required permissions.

Court's Reasoning and Analysis

The Court proceeded by identifying the statutory and equitable framework governing specific performance: Section 16(c) of the Specific Relief Act, 1963 (requiring a plaintiff to aver and prove performance or readiness and willingness except where prevented or waived by the defendant), the explanations to that provision, and Section 20(1) (discretion of the Court to decree specific performance guided by sound judicial principles).

The Court analyzed authority from the Apex Court (notably the five-judge bench in Smt. Chand Rani) confirming that, in sale of immovable property, time is ordinarily not of the essence; whether it is must be determined from express terms, nature of property, and surrounding circumstances. The Court also emphasized equitable balancing from cases such as Parakunnan, Nirmala Anand and Jawahar Lal.

Applying law to facts, the Court made the following key findings (based strictly on the record and pleadings):

  • The initial agreement Ex. P.1 and delivery of possession and title deeds to the appellant were admitted facts within the knowledge of respondent 5.
  • Respondents 1–4 (vendors) were obliged to secure permissions (including under the ULCR Act) as a condition precedent to registration; the sequence in Ex. P.1 required vendors to obtain the permissions first and then for the appellant to pay the balance before the Sub-Registrar.
  • The appellant had complied with his obligations: he paid betterment charges (Ex. P.7), obtained change of katha (Ex. P.8) though that was the vendors' obligation, and paid taxes (Exs. P.4–P.6).
  • The legal notice Ex. P.11 issued by vendors did not specify particulars of permissions or expenses incurred; respondents 1–4 did not secure the permissions within the stipulated time, which constituted breach of the vendors' obligations and prevented the appellant from being required to pay the balance before the Sub-Registrar.
  • Given respondent 5 had actual knowledge of the appellant's prior agreement and possession, the respondent 5 could not rely upon a plea that the appellant was not ready and willing unless respondent 5 proved he was a bona fide purchaser for value without notice — which he did not. The Court relied on M.M.S. Investments for this legal proposition.
  • The Trial Court erred both in framing Issue 5 (allowing respondent 5 to prove appellant a defaulter) and in recording a finding that respondent 5 was the owner under Ex. D.2; those findings were unjustified on the admitted facts.
  • Applying Sukhbir Singh, the Court found it unnecessary for the appellant to have carried ready cash; his conduct in requesting execution and being present at the Sub-Registrar's office on the proposed date was sufficient proof of capacity and readiness to perform.
  • The Court rejected respondent 5’s belated contentions raised on appeal that time was the essence or that vendor hardship justified refusal: those pleas were not raised and decided at trial, and A. Maria Angelena requires such pleas be raised as issues at an early stage.
  • Considering the overall equities, the nature of the property (residential site), delivery of possession and title deeds to the appellant, the vendors' breach of a condition precedent, and the appellant's demonstrated readiness and willingness, it was not inequitable to grant specific performance.

Based on the foregoing, the Court answered the principal questions (I to III) against the Trial Court's findings and in favour of the appellant, finding the Trial Court's direction allowing respondent 5 to take possession illegal and unsustainable.

Holding and Implications

Holding: The appeal is allowed and the impugned judgment and decree is modified: the suit for specific performance of the agreement of sale is decreed.

Consequences and practical effect:

  • The respondents (1–4 and their agents/servants) are permanently restrained from interfering with the appellant's peaceful possession and enjoyment of the suit schedule property and from alienating or creating any encumbrance thereon.
  • The Registry was directed to draw up a decree accordingly to give effect to the specific performance judgment.
  • There shall be no order as to costs.

The opinion applies established principles (statutory and equitable) to the facts and reverses the Trial Court's findings; the judgment does not purport to announce a new precedent beyond its application of existing authorities.

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    K. Subramani v. Zaheerunnisa Begum And Others

    JUDGMENT

    1. An unsuccessful plaintiff is before Court invoking Section 96 of the Code of Civil Procedure, 1908 calling in question the judgment and decree dated 25-9-2000 in O.S No. 2012 of 1985 of the 11th Additional City Civil Judge, Bangalore City, partly decreeing the suit, while rejecting the relief of specific performance of agreement of sale and restraining the defendants by way of permanent injunction from disturbing the plaintiff's peaceful possession and enjoyment of the suit schedule property until dispossessed, in accordance with law.

    2. Facts in brief are:

    (a) The appellant instituted O.S No. 2012 of 1985 for specific performance of the agreement of sale dated 25-12-1983 and permanent injunction restraining the defendants from interfering with the plaintiff's peaceful possession and enjoyment of the suit schedule property being a site measuring 54 ft. East to West and 42 ft. North to South, carved out of Sy. Nos. 18/2, 19, 20 and 21 of Agrahara Thimmasandra Village, known as C.K Chinnappa Garden, Bangalore North Taluk, within the territorial jurisdiction of the Bruhat Bangalore Mahanagara Palike. The plaintiff and respondents 1 to 4 entered into an agreement dated 25-12-1983 Ex. P. 1 for sale of the suit property. The plaintiff having paid Rs. 5,000/- towards part sale consideration of Rs. 45,000/-, the vendors delivered the original title deeds and put the plaintiff in physical possession of the suit property by way of part performance of the contract. The vendors specifically agreed to receive the balance sale consideration of Rs. 40,000/- at the time of registration of the sale deed, to be executed five months after securing the permissions of the authorities under the Urban Land (Ceiling and Regulation) Act, 1976 (for short, ‘ULCR Act’) and the Income-tax Act, 1961, as well as the change of katha of the property into their name from that of the deceased husband of the 1st vendor, at the cost of the purchaser. The purchaser's obligation was to pay the layout, conversion charges and bear the vendors cost for securing the permissions. Time for completion of the sale was agreed to be extended by two months in case of delay in securing the permissions which might in turn, cause delay in payment of the conversion charges.

    (b) It is the assertion of the plaintiff that on being put in possession of the suit property, erected a cattle shed to tether cattle, paid the betterment charges on 25-4-1985 acknowledged by receipt Ex. P. 7; secured a change of katha on 2-5-1984 by katha certificate-Ex. P. 8; paid the Corporation taxes for the period 1977 to 1983-1984 on 24-8-1984 by receipt-Ex. P. 6 and thereafter for the future years under receipts-Exs. P. 4 and P. 5.

    (c) It is the allegation of the plaintiff that the vendors issued notice dated 6-3-1985, Ex. P. 11 through their Counsel calling upon the plaintiff to comply with his part of the contract by paying the balance sale consideration on or before 18-3-1985, failing which legal action would follow, which was responded to by a written reply dated 16-3-1985 Ex. P. 12 calling upon the vendors to execute the conveyance deed and receive the balance sale consideration on 23-5-1985 by securing the draft sale deed five days prior thereto. By yet another letter dated 4-5-1985 Ex. P. 14, the plaintiff is said to have requested the vendors to go over the Sub-Registrar's. Office on 23-5-1985 and execute the deed of conveyance.

    (d) It is the further allegation of the plaintiff that the vendors by a telegram dated 18-5-1985 Ex. P. 27 declined to accede to the request of the plaintiff and stated that the agreement of sale-Ex. P. 1 was rescinded on 6-3-1985 and 23-8-1985, while calling upon the plaintiff to return the original documents of the suit property.

    3. The purchaser instituted the suit for specific performance and permanent injunction, arraigning as defendants 1 to 4, the vendors, who, when served with notice of the suit, having remained absent and unrepresented, were placed ex parte. The interlocutory application filed by the 5th respondent to be impleaded as a necessary and proper party defendant, claiming to have purchased the suit schedule property under a sale deed dated 30-5-1985 Ex. D. 2 executed by defendants 1 to 4, when allowed was impleaded as party defendant 5 and resisted the suit by filing written statement dated 13-12-1989 inter alia admitting that defendants 1 to 4 were the owners of the suit schedule property, while denying the factum of plaintiff being in possession of the suit property and that the sale of the suit property in his favour, by the deed of conveyance Ex. D.2 was preceded by permission from the Competent Authority under the ULCR Act, by letter dated 25-5-1985 and that the reliefs in the suit filed on 26-6-1985 were rendered in fructuous. In addition a plea was advanced that the plaintiff's default, disentitled specific performance of the agreement of sale. The Trial Court in the premise of pleadings of the parties framed the following six issues:

    (1) Whether the plaintiff proves that defendants 1 to 4 have executed agreement to sell dated 25-12-1983 and delivered possession of the same?

    (2) Whether the plaintiff proves that he is in a lawful possession of the suit property?

    (3) Whether the 5th defendant proves that he purchased the property under sale deed dated 25-5-1985 and is in possession?

    (4) Whether plaintiff is always ready and willing to perform his part of obligation?

    (5) Whether the 5th defendant proves that plaintiff is the defaulter and not ready and willing to perform his part of obligation?

    (6) Whether the defendant proves that plaintiff put up construction after the completion of sale?

    4. The Trial Court recorded the depositions of the plaintiff as P.W 1, marked 27 documents as Exs. P. 1 to P. 27, while for the defendants, the 5th defendant was examined as D.W 1 and another witness by name K.N Prakash as D.W 2 and marked 4 documents as Exs. D.1 to D.4 The Trial Court having regard to the material on record, assessed the evidence both oral and documentary, recorded findings in the affirmative over the issues 1, 2 and 5; partly affirmative on issue 3, and negatived issues 4 and 6. The Trial Court observed that as the 5th defendant was the owner of the suit property pursuant to the sale deed-Ex. D.2, was entitled to take possession of the same from the plaintiff, in accordance with law and accordingly, partly decreed the suit by judgment and decree dated 25-9-2000.

    5. Sri C.V Nagesh, learned Senior Counsel for the appellant advances the following contentions:

    (I) The 5th respondent claiming to be the purchaser of the suit schedule property under the sale deed-Ex. D.2 executed by the respondents 1 to 4, having full knowledge of the appellant's claim to the property under the agreement of sale-Ex. P. 1 was disentitled, in law, to resist the suit. According to the learned Senior Counsel, a subsequent agreement holder to purchaser the suit property, is entitled in law, to advance all the pleas that the vendor is entitled to, having put himself in the shoe of the vendor, while a purchaser of the property under a deed of conveyance is entitled, in law, to prove that he is a bona fide purchaser, for value without notice of the initial agreement of sale. In support of the said contention reliance is placed upon the decision of the Apex Court in M.M.S Investments, Madurai v. V. Veerappan . AIR 2007 SC 2663.

    (II) The Trial Court while assessing the evidence both oral and documentary, unjustifiably eschewed considering the following relevant facts:

    (a) The appellant had folly complied with his obligation under the agreement-Ex. P. 1. Pointing out to the covenants in the said agreement, submits that the appellant's obligation was limited to payment of layout charges for the suit property, alongside, the expenses incurred by the respondents 1 to 4 to secure the permissions from the authorities under the ULCR Act and Income-tax Act for registration of the deed of conveyance. The appellant, it is contended, paid the betterment charges, and taxes, in addition to securing the change of katha, though an obligation of the respondents 1 to 4, within the time stipulated i.e, 25-4-1984;

    (b) The respondents 1 to 4, did not secure the permissions, being their obligation under the agreement-Ex. P. 1, and in the sequence of events, a condition precedent for the appellant to pay the balance sale consideration on execution of the sale deed, thereby committed breach of the agreement of sale;

    (c) Though the appellant was ready and willing at all material times and even as on 23-5-1985 to pay the balance sale consideration on execution of the deed of conveyance of the suit property, and lodging the same for registration, the respondents 1 to 4, without justification, issued the telegram dated 18-5-1985 Ex. P. 27 rescinding the contract;

    (d) The execution of the sale deed-Ex. D.2 in favour of the 5th respondent, on 30-5-1985 for a sale consideration of Rs. 48,000/- i.e, Rs. 3,000/- in excess of what was agreed upon with the appellant, demonstrates that it was respondents 1 to 4 took undue advantage and committed the breach of contract and took advantage;

    (e) The respondents 1 to 4 having secured permission under the ULCR Act to convey the suit property in favour of the 5th respondent, further demonstrates that without such a permission, registration of the deed of conveyance was impermissible, a serious breach of the obligation in terms of agreement-Ex. P. 1.

    (III) It is next contended that it is not necessary for the appellant to carry ready cash with him to prove that he had necessary funds to pass on consideration at the time of registration, suffice it to establish his capacity to pay the sale consideration. Reliance is placed on the reported opinion of the Apex Court in Sukhbir Singh v. Brij Pal Singh . 1997 2 SCC 200.

    (IV) Learned Senior Counsel points out to paragraph 24 of the impugned judgment and decree to contend that the Trial Court fell in error in recording a finding declaring the 5th defendant as the owner of the suit schedule property pursuant to the sale deed-Ex. D.2 although, he had knowledge of the agreement of sale Ex. P. 1.

    6. Per contra, Sri Kumar, learned Counsel for 5th respondent while not seriously controverting the contention that defendants 1 to 4 having been placed ex parte, the 5th respondent-purchaser of the suit schedule property with knowledge of the agreement of sale-Ex. P. 1 could not have resisted the claim of the appellant's readiness and willingness, in the light of the decision in M.M.S Investments case, nevertheless seeks to sustain the findings of the Trial Court in declining to decree the suit for specific performance.

    7. Learned Counsel advances the following contentions.—

    (a) In the reply notice dated 16-3-1985-Ex. P. 12, the appellant having regretted the delay and inconvenience caused to the vendors and being indebted to the vendors for waiting patiently and extending time for registration, was sufficient to establish that the appellant though called upon to execute the sale deed and pay the balance sale consideration, avoided the same on one pretext or the other leading to the only conclusion that he was not ready and willing to perform his part of the contract.

    (b) The oral testimony of P.W 1 does not disclose that the appellant was ready and willing at any point of time, to pay the expenses to secure the permission under the ULCR Act and the Income-tax Act for the vendors to execute the sale deed coupled with the fact that though respondents 1 to 4 made a demand by legal notice dated 6-3-1985 Ex. P. 11 to have the sale deed executed on or before 18-3-1985, failure on the part of the appellant demonstrated that he was not ready and willing to perform his part of the contract by paying the balance sale consideration.

    (c) Though respondents 1 to 4 did not resist the suit and were placed ex parte, nevertheless, keeping in mind the reason for the sale of the suit property, as disclosed in Ex. P. 1, being dire necessity, due to the death of the bread winner viz., the husband of the 1st defendant, time was the essence of the contract.

    8. Learned Counsel places reliance on the opinion of the Division Bench of this Court in the case of Saraswathi Ammal v. V.C Lingam* . 1993 1 Kar. L.J 196 DB; the decision of the Apex Court in Manjunath Anandappa Urf Shivappa Hansi v. Tammanasa . AIR 2003 SC 1391 and His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar. . AIR 1996 SC 2095.

    9. In reply learned Senior Counsel contends that the 5th respondent's pleas of time being the essence of the contract and hardship were neither advanced before the Trial Court nor issues framed and hence cannot be urged for the first time in this appeal.

    10. Having heard the learned Counsel for the parties, perused the pleadings, the evidence both oral and documentary and examined the judgment and decree impugned, the questions for decision making are:

    Whether in the facts and circumstances of the case, the Trial Court was, justified in recording a finding:

    (I) On issue 3 that the 5th defendant purchased the property under the sale deed-Ex. D.2?

    (II) That the 5th defendant was entitled to take possession of the suit schedule property in accordance with law?

    (III) On issue No. 5 that the 5th defendant proved the plaintiff a defaulter, not ready and willing to perform his part of the obligation?

    (IV) On issue 4 that the plaintiff was not ready and willing to perform his part of the obligation?

    11. Section 16(c) of the Specific Relief Act, 1963 provides that specific performance of a contract cannot be enforced in favour of a person who fails to aver and prove that he has 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 the terms the performance of which has been prevented or waived by the defendant. The first explanation for the purpose of clause (c) provides that where a contract involves 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; while second explanation states that the plaintiff must aver performance of, or readiness and willing to perform, the contract according to its true construction. Sub-section (1) of Section 20 invests in the Court a discretion to decree specific performance and is not commonly bound to grant such relief, if merely it is lawful to do so, but such discretion cannot be arbitrary but sound and reasonable, guided by judicial principles and capable of correction by the Court of appeal. Sub-section (2) is not exhaustive in relation to cases in which the Court may properly exercise discretion not to decree specific performance.

    12. For a better understanding of the law governing specific relief, in particular specific performance of an agreement of sale, it is useful to extract the observations of the five Judges Bench of the Apex Court in Smt. Chand Rani (dead) by L.Rs v. Smt. Kamal Rani (dead) by L.Rs . AIR 1993 SC 1742, which reads thus:

    “It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract, the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.

    Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of contract”.

    13. After having analysed the case-law on the point, their Lordships further observed thus:

    “From an analysis of the above case-law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:

    (1) from the express terms of the contract;

    (2) from the nature of the property; and

    (3) from the surrounding circumstances, for example: the object of making the contract”.

    (a) In the facts of that case, the terms of the contract invested in the purchaser an obligation to pay Rs. 98,000/- within 10 days from the date of execution of the contract failing which the contract would be vitiated.

    14. The Court, on facts held that there was no readiness and willingness on the part of the purchaser, disentitling him to decree for specific performance.

    15. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son . AIR 1987 SC 2328, the Apex Court observed that the Court should meticulously consider all facts and circumstances of the case before granting specific performance. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage:

    (a) The evidence in that case indicated that the subsequent sale deed and agreement were obtained from the owners of the estate after taking the earlier agreement holder into confidence and as there was an implied consent for executing the subsequent documents and the party having settled his rights under the initial agreement, is said to have waived his right to purchase the estate for himself. It is in this background the assignee of the initial agreement holder was held to have no better right to enforce the agreement and hence disentitled to a decree for specific performance.

    16. In Nirmala Anand v. Advent Corporation Private Limited . AIR 2002 SC 2290, it was held that specific performance is an equitable relief, Court has to strike a balance of equities between the parties having regard to the relevant aspects, including the lapses which occurred and the parties respectively responsible therefor though plaintiff-purchaser remained always ready and willing to perform her part of the contract-defendant (vendor) cannot held to be solely responsible for delay or default in performance of the contract in view of the other circumstances such as pendency of Court proceedings - plaintiff has to share a portion of the expenses to be incurred for renewal of the lease and revalidation of the building plan - on facts, entire benefit of the steep rise in the property cannot be allowed to be availed of by the plaintiff alone.

    17. Thus what emanates from the observations of the Apex Court in the aforesaid reported opinions, is that the foundation for decreeing a suit for specific performance must necessarily be based on justice, equity, good conscience and fairness to both parties.

    18. Section 53-A of the Transfer of Property Act, 1882, affords protection to a transferee on certain conditions, one of which is that transferee has performed or is willing to perform his part of the contract. The Apex Court in Jawahar Lal Wadhwa v. Haripada Chakroberty . AIR 1989 SC 606, held thus:

    “In certain circumstances once a party to a contract has repudiated a contract, it is not necessary for the other party to tender the amount payable under the contract in the manner provided in the contract in order to successfully claim the specific performance of the contract. This does not, however, mean that where one party to a contract repudiates the contract, the other party to the contract who claims specific performance of the contract is absolved from his obligation to show that he was ready and willing to perform the contract. It is settled in law that where a party to a contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance. The other option open to the other party, namely, the aggrieved party, is that he may choose to keep the contract alive till the time for performance and claim specific performance but, in that event, he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract. International Contractors Limited v. Prasanta Kumar Sur, AIR 1962 SC 77, explained and disting”.

    19. In A. Maria Angelena (dead) by L.Rs v. A.G Balkis Bee . AIR 2002 SC 2385, the Apex Court observed the plea that a decree for specific performance would result in serious hardship to the vendor, or the subsequent purchaser, and that the plaintiff should be compensated in terms of money must be taken at the earliest stage, an issue framed and decided.

    20. In the admitted facts of this case, the initial agreement of sale-Ex. P. 1 evidencing delivery of possession of the suit property and its title deeds, to the appellant by the respondents 1 to 4, was within the knowledge of the 5th respondent. The deed of conveyance-Ex. D.2 in favour of the 5th respondent, executed by respondents 1 to 4, raises a question whether he was a bona fide purchaser for value without notice of the initial agreement of sale-Ex. P. 1. The respondents 1 to 4 remained absent and unrepresented, hence placed ex parte, and therefore the plea that the appellant must always be ready and willing to perform his part of the contract, whether available to the purchaser-5th respondent, under a concluded contract-Ex. D.1 arises for consideration. In identical circumstances in M.M.S Investments case, the Apex Court held thus:

    “6. Learned Counsel for the appellants submitted that since the purchasers step into the shoes of the vendor, the question of readiness and willingness can be pressed into service. This plea is clearly without substance because the purchasers had to prove that they are bona fide purchasers for value without notice. The readiness and willingness aspect will not give any relief to them”.

    21. In that view of the matter, the 5th respondent, was not entitled to advance the plea of want of readiness and willingness of the appellant, and the Trial Court was not justified in framing issue 5 or recording a finding in the affirmative thereon, that the 5th respondent proved that the appellant was a defaulter and not ready and willing to perform his part of the obligation. In the admitted facts, the 5th respondent cannot be said to be a bona fide purchaser for value without notice, and therefore the Trial Court was not justified in recording a finding that the 5th respondent was the owner of the suit schedule property pursuant to the sale deed-Ex. D.2 As a consequence the direction entitling the respondent 5 to secure possession of the suit property from the appellant, in accordance with law, is illegal, perverse and unsustainable.

    22. Questions I to III are accordingly answered.

    23. The plaint averments discloses the plea of readiness and willingness to perform the appellant's part of the obligation at all material times. The appellant's obligation under the agreement-Ex. P. 1, is to pay the necessary layout and conversion charges to the concerned authorities. The other obligation of the appellant is to pay the balance sale consideration of Rs. 40,000/- to the respondents 1 to 4, before the Sub-Registrar, at the time of registration of the sale deed.

    24. The obligations of the respondents 1 to 4, are to obtain the katha in their name the cost for which is to be reimbursed by the appellant and to get the necessary permissions for registration from the Competent Authorities, within the period of five months to be extended by two months in case of delay in securing the permissions leading to delay in paying the layout charges.

    25. The appellant in compliance with his obligation, paid the betterment charge of Rs. 1,744.00 on 25-4-1984 acknowledged by the Corporation of the City of Bangalore, by receipt of even date, Ex. P. 7 in the name of the 2nd respondent. Though the respondents 1 to 4 were obliged to secure the transfer of katha, nevertheless the same was secured by the appellant, from the Corporation of City of Bangalore, as evident from the special notice dated 2-5-1984-Ex. P. 8 and paid the taxes for the years 1977 to 1984-1985 evident by the receipts-Exs. P. 4 to P. 6.

    26. The contents of the legal notice dated 6-3-1985 Ex. P. 11 are to the effect that the appellant did not pay the balance of the sale consideration in terms of the agreement within the time stipulated, though respondents 1 to 4 had completed all the formalities and expressed their readiness to execute the sale deed on number of occasions. What is patently not forthcoming from the notice is the relevant particulars of the permissions and the expenses incurred. Nevertheless, the respondents 1 to 4 called upon the appellant to secure the execution of the sale deed on or before 18th March, 1985 by paying the balance sale consideration. Thus the respondents 1 to 4 on their part did not secure the permissions for registration of the deed of conveyance so as to the enable the appellant to pay the balance sale consideration before the Sub-Registrar and the expenses for obtaining the said permission, as agreed upon. Had the respondents 1 to 4 secured the permissions, and claimed the expenses incurred, the appellant would have had to make good the said amounts.

    27. The sequence of events in the agreement-Ex. P. 1 require the respondents 1 to 4 to secure the permissions for registration of the deed of sale and thereafter for the appellant to pay the balance sale consideration before the Sub-Registrar. Respondents 1 to 4, committed breach of the terms of the agreement of sale, although the appellant had fulfilled his part of the obligation and therefore, in the absence of the required permissions for registration of the deed of conveyance, the appellant cannot be held to have committed breach of terms of the agreement-Ex. P. 1.

    28. That permission of the authority under the ULCR Act, is necessary for registration of the deed of conveyance is established both from the written statement of respondent 5 and the covenants in the sale deed-Ex. D.2, as such permission was obtained in favour of the 5th respondent. The obtaining of permission under the ULCR Act being a condition precedent for the registration of the deed of conveyance, the breach of which by the respondents 1 to 4, cannot by any stretch of imagination be treated as a disadvantage for specific performance of sale of the suit schedule property in favour of the appellant.

    29. The appellant's expressions of regret for the delay and inconvenience in the matter of registration of the sale deed in the reply notice-Ex. P. 12, is sought to be pressed into service as having committed a breach of the terms of the agreement and not being ready and willing to perform his obligation. The Trial Court accepted the said plea and held the appellant responsible for the delay and as a consequence not ready and willing.

    30. Viewed from the surrounding facts and circumstances, more particularly but for the default on the part of respondents 1 and 2, leading to the failure to execute the sale deed within five months and extended period of two months as set out in the agreement-Ex. P. 1, though the appellant complied with his obligation within the time frame, the expressions used in Ex. P. 12, reply notice, cannot but be with reference to the calamity in the appellant's family. In this country, it is customary that a sale or purchase of immovable property being an auspicious occasion, is commonly avoided when a calamity befalls a family of a person party to the contract. Such an inconvenience is sought to be taken advantage of to contend that the appellant was not ready and willing. It is in that context that the appellant expressed his gratitude to respondents 1 to 4 for having extended time.

    31. The second of the appellant's letter dated 4-5-1985 Ex. P. 14, throws light upon the outcome of the meeting with the 2nd respondent at the hospital, who advised securing registration and on the second visit to the hospital, to contact Mr. Hafeez, who when contacted by the appellant's emissary, though promised to contact the appellant on 20-4-1985, did not do so. The conduct of respondents 1 to 4 demonstrates that without complying with their obligation did rescind from the agreement-Ex. P. 1, taking advantage of the inconvenience due to the calamity in the appellant's family.

    32. Though the appellant called upon the respondents 1 to 4, by the reply notice-Ex. P. 12, to go over to the Sub-Registrar's Office on 23-5-1985, to execute the deed of conveyance and receive the balance sale consideration of Rs. 40,000/-, the conduct of the respondents 1 to 4 in securing the permission of the authority under the ULCR Act by order dated 25-5-1985, to convey the suit property to the 5th respondent followed by the execution and registration of the deed of sale-Ex. D.2 on 30-5-1985, for a sale consideration of Rs. 48,000/- i.e, Rs. 3,000/- in excess of the consideration agreed in Ex. P. 1 demonstrates that respondents 1 to 4, in order to make a profit took advantage of the appellant's predicament, and therefore rescind from the agreement.

    33. The Trial Court in my opinion misdirected itself by failing to reckon all relevant materials while recording a finding that the expressions of gratitude by the appellant was in the direction of establishing that the appellant was neither ready nor willing to perform his part of the contract at all material times.

    34. It is no doubt true that Ex. P. 1 covenants the sale of the immovable property is due to “dire necessity”. The respondents 1 to 4 having remained absent and placed ex parte, there was no plea of hardship due to dire necessity nor an issue raised or findings recorded and in the circumstances, the learned Senior Counsel for the appellant is correct in his submission that the said contentions cannot be permitted to be advanced for the first time in this appeal by the learned Counsel for the respondent 5. So also the plea that time was the essence of the contract was neither advanced nor considered by the Trial Court and in that view of the matter too that plea cannot be put forth for the first time in this appeal in justification of the judgment and decree. Even otherwise, the legal notice-Ex. P. 11 issued to the Counsel for respondents 1 to 4 does not spell out the particulars of dire necessity or that time was the essence of the contract and if really such conditions did exist on the date of the execution of the agreement of sale-Ex. P. 1, it is not known as to why respondents 1 to 4 did not secure the permission from the authorities for the registration of the suit schedule property within the time stipulated. If there was dire necessity, respondents 1 to 4 would have been propelled to secure the permission within the time stipulated in the agreement. So also the sale in favour of the 5th respondent is not as a distress sale but for an enhanced sale consideration, and hence the contentions of the learned Counsel for 5th respondent are but specious pleas. In the light of the observations of the Apex Court in A. Maria Angelena's case, that plea of hardship to the vendor or subsequent purchaser must be raised at the earliest stage, issue framed and decided, applies to the facts and circumstances of this case.

    35. The plea of the learned Counsel for the 5th respondent that the appellant did not have ready cash with him is without merit. The plaint averments and the evidence of P.W 1 animates the fact that the appellant was and is ready and willing to perform his part of the obligation by paying the balance sale consideration before the Sub-Registrar on the execution of the conveyance deed by the respondents 1 to 4. In Sukhbir Singh's case, the Apex Court held thus:

    “Law is not in doubt and it is not a condition that the respondents should have ready cash with them. The fact that they attended Sub-Registrar's Office to have the sale deed executed and waited for the petitioners to attend the office of the Sub-Registrar is a positive fact to prove that they had necessary funds to pass on consideration and had with them the needed money with them for payment at the time of registration. It is sufficient for the respondents to establish that they had the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of the suit till date of the decree. It would, therefore, be clear that the Courts below have appropriately exercised their discretion for granting the relief of specific performance to the respondents on sound principles of law”.

    36. Applying the said observations to the facts of this case, indisputably the appellant having called upon the defendants 1 to 4 by the reply notice-Ex. P. 12, to go over to the Sub-Registrar's Office on 23-5-1985 on which date the appellant was present in the said office, not being disproved, is a positive fact to prove that the appellant had necessary funds to pass on consideration and had with him the money for payment at the time of registration. In my opinion, the Trial Court fell in error in declining to accept the appellant's plea of ready and willingness to perform his part of the contract so as to exercise discretion to grant the relief of specific performance.

    37. The appellant was put in possession of the suit schedule property in part performance of the agreement of sale-Ex. P. 1 and was handed over the original of the title deeds of the suit property. Having regard to the nature of the property being a residential site, and the surrounding circumstances referred to supra, coupled the express stipulation of the parties, notwithstanding the default of respondents 1 to 4 in carrying out their obligations within the time specified, I am of the opinion, it is not inequitable to grant the relief of specific performance. In the fact situation, it cannot be said that the appellant's readiness and willingness to perform his part of the contract is not a mere desire but is a genuine willingness proved by evidence both oral and documentary. There is also no material to establish that the appellant having been put in possession of the suit schedule property was not anxious to complete the contract either because he was not ready with cash or that he considered it expedient not to part with the money, so that he could have the benefit of keeping the balance sale consideration as well as enjoy the suit property.

    38. Question No. 1 is answered accordingly.

    39. The facts in Manjunath Anandappa's case are that the purchaser had not even asked the vendor to execute the deed of sale in his favour nor tendered the balance amount of consideration within a period of three years from the date of agreement. In this premise, it was held that mere making of a statement that the vendor did not execute the sale deed despite notice did not comply with the requirement of Section 16(c), more so, when the notice was served upon the power of attorney holder of the vendor which was already revoked and within the knowledge of the purchaser. The facts of the present case are different from that of the reported decision and therefore, has no application.

    40. In His Holiness Acharya Swami Ganesh Dassji's case, the fact was that the object of executing the agreement of sale was that the vendor was in dire need of amount to celebrate his daughter's marriage and hence time was the essence of contract. The purchaser not having enough funds to pay the consideration intended to bite for the time and in that context, negatived the relief for specific performance. This judgment too on facts does not apply to the present case.

    41. In Saraswathi Ammal's case, a Division Bench of this Court observed that Courts ought to consider the conduct of the purchaser, and when interested in procrastination since delay was to his advantage, being in possession of the property, may not be anxious at all to complete the contract either because he had no ready cash with him or expedient not to part with the money and continue to have the benefit of the money as well as the property ought not to decree specific performance.

    42. In the facts of this case, the condition precedent for registration of the sale deed was the securing of permissions from the Competent Authorities by respondents 1 to 4, the breach of which cannot be imputed to the appellant as not being anxious to complete the contract. That judgment too has no application to the facts of this case. In the result, the appeal is allowed. The impugned judgment and decree is modified. The suit of the appellant for specific performance of the agreement of sale is decreed. The respondents either in person or through their agents or servants are permanently restrained from interfering with the appellant's peaceful possession and enjoyment of the suit schedule property or from alienating or creating any encumbrance thereon. Registry to draw up a decree accordingly.

    43. There shall be no order as to costs.

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