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Sr.No.119 (2 cases)

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By way of instant judgement, I intend to dispose off above-

captioned two regular second appeals. These two appeals arise out of the same

suit. The facts are being taken from RSA No. 1017 of 2019 for the sake of

convenience. The parties shall be referred to by their original status in the

suit, i.e., the appellant in RSA No. 1017 of 2019 shall be referred to as the

"plaintiff" and the respondents therein as the "defendants." Appeal bearing

RSA No.1017 of 2019 has been filed by plaintiff-Manoj Kumar to restore the

judgment and decree passed by the Court of First Instance and appeal bearing

RSA No.2839 of 2019 has been filed by defendant No.1-Ami Lal to modify

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the judgment and decree passed by Lower Appellate Court setting aside grant

of refund of earnest money to plaintiff.

2. Plaintiff is in appeal aggrieved of judgment and decree passed by

the Lower Appellate Court reversing the judgment and decree passed by the

Court of First Instance and dismissing the suit filed by plaintiff.

3. Plaintiff filed suit for possession by way of specific performance

of agreement to sell dated 29.01.2011. As per the plaintiff, defendants agreed

to sell the suit land measuring 33 Kanals in his favour for valuable

consideration of Rs.76,50,000/- per acre vide written agreement to sell dated

29.01.2011. Rs.10 lakhs was received by defendants on the date of execution

of agreement as earnest money. As per the agreed terms and conditions,

Rs.22 lakhs further was to be paid on or before 11.02.2011 and the remaining

sale consideration was to be paid at the time of registration of sale deed which

was to be executed on or before 11.05.2011. As per the plaintiff, defendants

agreed to handover possession of 3/4

th

front portion of the disputed land and

thereafter to execute sale deed in favour of plaintiff. Plaintiff performed his

part and paid a sum of Rs.22 lakhs to the defendants on 11.02.2011 as per the

agreement. A writing to the said effect was made on the reverse side of the

agreement to sell. Plaintiff claims that he always remained ready and willing

to perform his part and to get the sale deed executed. He remained present in

the office of the Sub-Registrar on 11.05.2011 after purchasing stamp of

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Rs.15,79,605/-. Defendants, however, failed to turn up, which led to

institution of present suit on 15.06.2011.

4. Defendants contested the suit. Execution of agreement to sell is

admitted. Receipt of earnest money and further payment of amount of Rs.22

lakhs on 11.02.2011 is not disputed. Defendants, however, claim that they

appeared before the Sub-Registrar on 11.05.2011, but the plaintiff failed to

turn up. As per the terms of agreement to sell, the same stands cancelled and

the earnest money stands forfeited. Defendants claim to have served legal

notice dated 26.05.2011 upon plaintiff through registered post, calling upon

him to come present and to get the sale deed executed on 02.06.2011. As per

the defendants, plaintiff still failed to appear on 02.06.2011 before the Sub-

Registrar. Another notice dated 03.06.2011 was served upon the plaintiff

calling upon him to get the sale deed executed on 13.06.2011. Plaintiff again

failed to appear. Finally, a public notice was published in the newspaper

“Punjab Kesri” on 22.06.2011. As per the defendants, they never assured

plaintiff to handover possession of 3/4

th

portion of front area of the suit land.

Defendants, thus, claim that plaintiff was himself neither ready nor willing to

perform his part of contract and the suit deserves to be dismissed.

5. Suit filed by the plaintiff was put to trial by the Court of First

Instance framing following issues:

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1. Whether the plaintiff was always ready and willing to perform

his part of contract while defendant Nos.1 & 2 failed to

execute the sale deed? OPP

2. Whether the plaintiff is entitled to relief of specific

performance of contract or in the alternative relief of recovery

of Rs.32 lakhs with interest @ 24% per annum? OPP

3. Whether the present suit is not maintainable in the present

form? OPD

4. Relief.

6. While deciding issue Nos.1 & 2, the Court of First Instance found

that the plaintiff proved his readiness and willingness by way of affidavit

dated 11.05.2011. In order to prove the same, he examined Raj Kumar

Numberdar as PW3 and Notary Public as PW4. The purchase of stamp paper

of Rs.15,79,605/- demonstrates the intent of plaintiff to get the sale deed

executed. The legal notices dated 26.05.2011 and 03.06.2011 claim to have

been served by defendants upon the plaintiff could not be proved. The prompt

filing of the present suit further shows readiness and willingness of the

plaintiff. The Court of First Instance accordingly decreed the suit filed by

plaintiff holding him entitled for the main relief of specific performance.

7. In the appeal preferred by defendants No.1 & 2, the Lower

Appellate Court has reversed the findings recorded by the Court of First

Instance holding that the plaintiff failed to show his financial capacity to

perform his part on the agreed date i.e. 11.05.2011. The sale deeds, vide

which the plaintiff claims to have arranged funds by selling his properties, i.e.

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Ex.PW5/1 to Ex.PW5/13, were executed during the period from 03.11.2011

to 29.03.2013. Consequently, the said documents do not advance the

plaintiff's case. Mere purchase of stamp papers, by itself, cannot be held

sufficient to establish that the plaintiff was ready and willing to perform his

part of the contract.

8. The Lower Appellate Court accordingly altered the relief holding

the plaintiff entitled to recovery of Rs.32 lakhs along with interest @ 9% per

annum from the date of execution of agreement to sell till the date of actual

realization.

9. Counsel for the appellant/plaintiff has assailed the finding

recorded by the Lower Appellate Court to contend that the Lower Appellate

Court erred in ignoring the covenants contained in the agreement to sell,

whereby defendants agreed to handover 3/4

th

share of the front portion of land.

He refers to testimony of DW8-Ami Lal who admitted that 1/4

th

share of

Kishori Lal has not been separated from 3/4

th

share of the defendants from the

front portion of land and consent of Kishori Lal has not been obtained by

defendants till date. He submits that once the agreement to sell specifically

provided that the defendants shall handover 3/4

th

share out of the front portion

of land, it was their duty to get the same separated. In the absence of any such

separation in share, the defendants themselves were neither willing nor ready

to perform their part. The Lower Appellate Court ignored the aforesaid vital

fact and erred in denying the main relief of specific performance to the

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plaintiff despite the fact it stands proved that plaintiff purchased stamp duty

worth about Rs.16 lakhs on the date of execution of sale deed and the present

suit was instituted within one month of the agreed date of execution of sale

deed. To support his contentions, Mr. Sarin relies upon the judgment of

Coordinate Bench of this Court in the case of Tej Singh vs. Trilok Chand,

2025(2) RCR(Civil) 503.

10. Per contra, Mr. Ranjit Saini, counsel for respondent

No.1/defendant No.1, submits that plaintiff had no financial capacity to

honour his commitment on the agreed date. His specific case as pleaded and

proved on record is that finances were raised by way of sale deeds Ex.PW5/1

to Ex.PW5/13. There being no evidence on record to prove the financial

capacity of plaintiff, the Lower Appellate Court rightly returned finding qua

issue of readiness and willingness against the plaintiff and in favour of

defendants. He further submits that defendants have also preferred separate

appeal. Once plaintiff failed to prove his readiness and willingness to perform

his part of contract, he cannot be held entitled for grant of alternate relief of

specific performance.

11. I have heard counsel for the parties and have carefully gone

through records of the case.

12. Since the execution of agreement to sell is not in dispute and

receipt of earnest money is not denied by defendants, the only issue that arises

for consideration of this Court is of readiness and willingness.

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13. In order to appreciate the rival contentions of counsel for the

parties, it would be apt to peruse Section 16 of the Specific Relief Act, 1963

(hereinafter referred to as ‘1963 Act’), which reads as under:-

“16. Personal bars to relief.—Specific performance of a

contract cannot be enforced in favour of a person—

(a) who has obtained substituted performance of contract under

section 20; or

(b) who has become incapable of performing, or violates any

essential term of, the contract that on his part remains to be

performed, or acts in fraud of the contract, or wilfully acts at

variance with, or in subversion of, the relation intended to be

established by the contract; or

(c) who fails to 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 terms the

performance of which has been prevented or waived by the

defendant.

Explanation.—For the purposes of clause (c),—

(i) 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;

(ii) the plaintiff must prove performance of, or readiness and

willingness to perform, the contract according to its true

construction.”

14. As per the settled law, plaintiff seeking specific performance of

agreement to sell is required to clear the statutory bar as contemplated under

Section 16(c) of 1963 Act, dehors the defence raised by defendants. It is

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admitted case of the parties, that the agreed rate of land was Rs.76,50,000/-

per acre. The land measures 33 Kanals, therefore, the total sale consideration

would be Rs.3,15,56,250/-. Out of the aforesaid total sale consideration,

plaintiff paid Rs.10 lakhs to the defendants on the date of execution of

agreement to sell i.e.29.01.2011 and Rs.22 lakhs were paid on 11.02.2011.

On the date of execution of sale deed i.e. 11.05.2011, the plaintiff was thus

required to pay an amount of Rs.2,83,56,250/-.

15. Even if the affidavit Ex.PW1/2 tendered by plaintiff is taken into

consideration, despite having been attested by a Public Notary and not by the

Sub-Registrar, and purchase of stamp duty is considered, the same may prove

and demonstrates his willingness to get the sale deed executed. In order to

prove his readiness to perform his part, the plaintiff was required to prove his

financial capacity to honour his commitment on 11.05.2011 i.e. the agreed

date to get the sale deed executed. In order to prove the same, the plaintiff

wants to rely upon sale deeds, whereby he along with his father and brother

sold various properties. He placed on record the sale deeds as Ex.PW5/1 to

Ex.PW5/13. The dates and the sale proceed relatable to the said sale deeds

are tabulated herein below:-

Sr. No. Exhibited

Documents

Amount Date of Execution

1. Ex.PW5/1 Rs.5,84,000/- 29.03.2013

2. Ex.PW5/2 Rs.11,00,000/- 14.11.2011

3. Ex.PW5/3 Rs.4,15,000/- 03.11.2011

4. Ex.PW5/4 Rs.12,20,000/- 14.12.2011

5. Ex.PW5/5 Rs.4,10,000/- 09.11.2011

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6. Ex.PW5/6 Rs.6,10,000/- 09.11.2011

7. Ex.PW5/7 Rs.6,20,000/- 30.12.2011

8. Ex.PW5/8 Rs.4,10,000/- 04.11.2011

9. Ex.PW5/9 Rs.3,80,000/- 04.11.2011

10. Ex.PW5/10 Rs.5,00,000/- 04.11.2011

11. Ex.PW5/11 Rs.7,29,000/- 04.11.2011

12. Ex.PW5/12 Rs.2,30,000/- 04.11.2011

13. Ex.PW5/13 Rs.7,25,000/- 10.02.2012

Rs.79,33,000/-

16. The aforesaid sale deeds do not advance the cause of the plaintiff.

They are neither before the agreed date nor the sale proceeds match up the

amount which was required to be paid by the plaintiff to get the sale deed

executed in his favour. In these circumstances, this Court finds that the

plaintiff was not ready to perform his part on 11.05.2011 as he had no financial

capacity to honour his contractual commitment.

17. The dispute does not end here. Defendants also cannot escape

from their incapacity to perform their part. The relevant covenants contained

in the agreement to sell read as under:-

तो जरे oाना वाला
\पया जg होगा और सौदा क
Sिसल माना जायेगा।

Translated version

“6. In the event that the purchaser fails to have the sale deed

for the aforementioned land drafted, executed, and registered by

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the stipulated date of 11.05.2011, the earnest money shall be

forfeited, and the transaction shall be deemed to be cancelled.

7. That the possession of the aforementioned land will be

given on the frontage of the 3/4 share, while the frontage of the

1/4 share of Kishori Lal will be left.”

18. Plaintiff in the plaint raised specific plea qua handing over of the

possession of front portion to the following effect:-

“3. That the defendants further agreed upon that they will give

the possession of 3/4 portion on the front regarding the disputed

land to the plaintiff at the time of sale deed.”

19. Defendants in the written statement responded as under:-

“3. िजमन नं.3 अरजी दावा िजस तरह से तहरीर िकया गया है, गलत

3/4 रकबा का कvा देने वायदा िकया हो। कहानी िजमन अरजी दावा

हजा बनावटी व् फ़ज़
N है।“

Translated version

“3. Paragraph No. 3 of the plaint, as has been stated, is incor-

rect and is not admitted. The assertion that a promise was made

to hand over possession of 3/4 of the land at the time of the agree-

ment, is absolutely incorrect. The story in the para of the plaint,

is fabricated and bogus.”

20. Counsel for the appellant relied upon Tej Singh (supra) to

submits that once defendants themselves were not in a position to perform

their part, the agreed date cannot be held to be sacrosanct. The question of

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determining availability of funds with the plaintiff would arise only after the

defendants have fulfilled their part of contract.

21. Observations made by coordinate Bench in

Tej Singh (supra) is based upon ratio of law laid down by Supreme Court in

R. Lakshmikantham vs. Devaraji, (2019) 8 SCC 62. The Supreme Court

observed as under:-

“xxxx xxxx xxxx

10. The High Court has, in the second appeal, obviously gone

wrong on a number of counts. First, to hold that time was of

essence in the agreement, is wholly incorrect. Clause 3 has to be

read along with Clauses 5 and 8, which clearly show that in the

nature of reciprocal promises, the promise made by the seller in

Clause 5 has to be performed first viz. that the title documents

have to be obtained from the mortgagee after the mortgage is

cleared. It is only then that the consideration above Rs 70,000,

being the balance consideration for the sale, has to be paid.

Secondly, the High Court is wholly incorrect in stating that the

two letters of 18-12-2002 and 19-12-2002 cannot be said to have

been proved. Both the letters were registered AD letters sent to

the very address of the defendant, which the defendant states is

the address on which it received the legal notice dated 7-7-2003.

Further, the moment the registered letter once sent is returned

with the remarks mentioned hereinabove, it shall be deemed to

have been served on the defendant on the address so stated,

unless the contrary is proved. The defendant did not come

forward with anything to show that this was not the proper

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address. In fact, that this is the proper address is shown by the

fact that he acknowledged the receipt of the legal notice dated

7-7-2003 on this very address.

11. The High Court order is not correct in stating that readiness

and willingness cannot be inferred because the letters dated

18-12-2002 and 19-12-2002 had not been sent to the defendant.

The High Court also erred in holding that despite having the

necessary funds, the plaintiff could not be said to be ready and

willing. In the aforesaid circumstances, the High Court was also

incorrect in putting a short delay in filing the suit against the

plaintiff to state that he was not ready and willing. In India, it is

well settled that the rule of equity that exists in England, does not

apply, and so long as a suit for specific performance is filed

within the period of limitation, delay cannot be put against the

plaintiff — See Mademsetty Satyanarayana v. G. Yelloji Rao

[Mademsetty Satyanarayana v. G. Yelloji Rao, AIR 1965 SC

1405] (para 7) which reads as under: (AIR p. 1409)

“7. Mr Lakshmaiah cited a long catena of English

decisions to define the scope of a court's discretion. Before

referring to them, it is necessary to know the fundamental

difference between the two systems—English and Indian—

qua the relief of specific performance. In England the

relief of specific performance pertains to the domain of

equity; in India, to that of statutory law. In England there

is no period of limitation for instituting a suit for the said

relief and, therefore, mere delay — the time lag depending

upon circumstances — may itself be sufficient to refuse the

relief; but, in India mere delay cannot be a ground for

refusing the said relief, for the statute prescribes the

period of limitation. If the suit is in time, delay is

sanctioned by law; it is beyond time, the suit will be

dismissed as barred by time; in either case, no question of

equity arises.”

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12. The High Court also went into error in stating that the value

of the property was Rs 10 lakhs at the time of the sale agreement.

PW 1 in his cross-examination admitted that it was Rs 10 lakhs

on the date when PW 1 was cross-examined. The value of the

property on the date of the sale agreement was only Rs 6 lakhs,

and it was open for the parties to negotiate the said price

upwards or downwards, which was what the parties did in the

facts of the present case. Nothing can, therefore, be derived from

the erroneous assumption that a valuable property had been sold

at a throwaway price.

13. For all these reasons, therefore, we allow the appeal and set

aside the judgment of the High Court and restore that of the

courts below.”

22. The Supreme Court in R. Lakshmikantham’s case (supra) made

these observations noticing that plaintiff proved his continuous readiness and

willingness. The same is in sync with statutory mandate of Section 16(c) of

1963 Act. Unfortunately for the plaintiff, the same is missing in the present

case. His case of readiness on appointed date has rather fallen flat.

23. The plaintiff is required to prove his readiness and willingness,

dehors the conduct of defendants. The plaintiff is under statutory obligation

to clear the bar by proving his continuous readiness and willingness to claim

main relief of specific performance. Once the plaintiff fails to meet the test

as contemplated under Section 16 of 1963 Act, the main relief of specific

performance cannot be granted in his favour. However, keeping in view that

defendants also lacked readiness and willingness to perform their part on the

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agreed date i.e. 11.05.2011 being not in capacity to handover 3/4

th

share of

front portion of suit land to the plaintiff, the defendants cannot contest the

right of plaintiff to recover the part of sale consideration received by

defendants along with interest as awarded by the Lower Appellate Court.

24. In view of above, this Court finds no merits in the present

appeals. Both the appeals are dismissed.

Pending application(s), if any, shall also stand disposed off.

Whether speaking/reasoned : Yes/No

Whether reportable : Yes/No