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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

APPELLATE SIDE CIVIL JURISDICTION

FIRST APPEAL NO.897 OF 2014

1) Pravin D. Thakker HUF

2) Vinod D. Thakker HUF

3) Praful D. Thakker HUF

Adult, Indian inhabitant of Bombay

Residing at 3, Gomati Bhavan,\

Chhaya Society, Sion Trombay Road,

Chembur, Mumbai-400 071

…Appellants

(orig. Defendant Nos.2 to 4)

Versus

1)Smt. Rita J. Shah

Adult, Indian inhabitant of Bombay

Residing at Dhoop Chaon, 1st floor

Saraswati Colony, Santacruz (w),

Mumbai 400 054.

2) M/s. Maryland Construction Co.

Pvt. Ltd.

A private Ltd. Company duly

incorporated under t he Provisions of

Companies Act, 1956, having their

registered office at Room No.3-A,

Karim Chambers, 1st floor, A.D.

Marg, Mumbai-400023.

…Respondent

(Orig. Plaintiff)

Respondent

(Original Defendant No.1)

…

Mr. Vishal Kanade i/b. M/s. Mahesh Menon and Co. for the Appellants.

Mr. Zain Mookhi with Mr. Chintan Shah and Mr.Dharmapal Dave i/b.

M/s. Naik Patil Salvi Associates for the Respondent No.1.

CORAM : SMT. ANUJA PRABHUDESSAI, J.

JUDGMENT DATED : 11

th

FEBRUARY, 2020.

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JUDGMENT:-

1. The Appellants have challenged the judgment and decree

dated 18/02/2014 whereby the learned Judge, City Civil Court,

Mumbai decreed the Civil Suit No.8509 of 1994 filed by the

Respondent No. 1 for Specific performance of Contract and other

consequential reliefs.

2. The Respondent No.1 was the Plaintiff whereas the

Respondent No.2 and Appellants were the Defendant Nos.1 to 4 in the

Suit and shall be hereinafter referred to as 'the Plaintiff' and 'the

Defendants' respectively. The subject matter of the suit for specific

performance is the Shop No.9 admeasuring 430 ft. situated at the

ground floor of the building proposed to be constructed by the

Defendant No.1 at Sanduwadi, Chembur. The said shop shall be

hereinafter referred to as the 'Suit shop'.

3 The case of the Plaintiff in brief is that by an oral

agreement entered in or about May, 1988, the Defendant No.1 agreed

to sell the suit shop for a total consideration of Rs.2,58,000/-. The

Defendant No.1 received a sum of Rs.10,000/-, towards booking

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amount and assured to hand over possession of the suit shop within

one year from the date of booking. The balance sale consideration of

Rs.2,48,000/- was to be paid at the time of handing over of the

possession of the suit shop.

5. The Plaintiff claims that the construction of the suit shop

was completed in the year 1990. The grievance of the Plaintiff is that

despite repeated requests, the Defendant No.1 refused to hand over

possession of the suit shop. Hence, by legal notice dated 07/06/1993

and 07/07/1993 Plaintiff called upon the Defendant No.1 to hand over

possession of the suit shop. The Plaintiff claims that though she was

ready and willing to pay the balance amount and perform her part of

the contract, the Defendant No.1 avoided and neglected to hand over

possession of the suit shop. The Plaintiff therefore filed a suit for

specific performance of the contract of sale of the suit shop.

6. In the affidavit-in-reply filed in the Notice of Motion, the

Defendant No.1 relied upon several letters to contend that despite

several requests the Plaintiff neither signed the Agreement nor paid the

installment. The Defendant No.1 disclosed that the suit shop was sold

to the Defendant Nos.2 to 4 for sale consideration of Rs.6,00,000/- and

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that the Defendant No.4 is in possession of the suit shop. The Plaintiff

therefore amended the plaint and claimed that the Defendant No.1 has

fabricated the said letters to defeat her claim. She further claimed that

the Defendant Nos.2 to 4 have entered into an Agreement with full

knowledge of the existence and subsistence of the Plaintiff's right and

claim in respect of the suit shop. The Plaintiff averred that the

Defendant Nos.2 to 4 are not bonafide purchasers and that the

Agreements are sham and fraudulent. Based on these pleadings, the

Plaintiff sought a declaration that the agreement for sale dated

21/07/1995 is sham, illegal and bogus.

7.The Defendant No.1 filed their written statement inter alia

claiming that the Plaintiff had approached them for purchase of the

suit shop for total consideration of Rs.3,51,000/-. The Plaintiff paid

sum of Rs.10,000/- towards the booking amount. The Defendant No.1

has alleged that there was no concluded contract and despite several

letters, the Plaintiff did not pay the earnest money and sign the

agreement. The Defendant No.1 claimed that since the Plaintiff was

not ready and willing to sign an agreement and pay the balance

amount, they sold the suit shop to the Defendant Nos.2 to 4 for a total

sale consideration of Rs.6,00,000/-. The Defendant No.1 has stated

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that they have received full consideration and have put the Defendants

in possession of the suit shop.

8. The Defendant Nos.2 to 4 have filed their written statement

contending that they were not aware of any previous transaction

between the Plaintiff and Defendant No.1. These Defendants claim

that they have purchased the suit shop for total sale consideration of

Rs.6,00,000/-. It is averred that they are bonafide purchasers for value

without notice and being the owners in possession of the suit shop, the

Plaintiff cannot seek any relief against them.

9. Based on the aforesaid pleadings, the Trial Court framed

the following issues:-

1(a) Does the Plaintiff prove that defendant No.1 had agreed

to sell suit shop No.9, admeasuring 430 sq.ft at Sandu

Wadi, Chembur for total consideration of Rs.2,58,000/-?

1(b) Does the Defendant No.1 prove that there was no valid

and subsisting contract between the Plaintiff and

Defendants?

2. Does the Plaintiff prove that she was always ready and

willing to perform her part of agreement?

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3. Does the Plaintiff prove that the agreement dtd.21.07.1995

entered into between Defendant No.1 and Defendant No.2

to 4 in respect of suit shop is sham and bogus and illegal?

4. Does the Plaintiff prove that he is entitled for specific

performance of the agreement of sale of said suit shop?

5. What order and decree?

10.The learned trial Judge held that the pleadings in paragraphs 4

and 6 of the written statement filed by the Defendant No.1 clearly

indicate that the Defendant No.1 had agreed to sell the suit shop to the

Plaintiff and had accepted Rs.10,000/- as booking price. The learned

Judge therefore held that there was a concluded contract between the

Plaintiff and the Defendant No.1 in respect of the suit shop. The

learned Judge has further held that despite letters dated 7/6/1993 and

7/7/1993 (exhs.9 and 10) the Defendant No.1 did not transfer the suit

shop in favour of the plaintiff, who was ready and willing to perform

her part of the contract. The learned Judge further observed that the

Defendant No.1 has sold the suit shop to the Defendant Nos.2 to 4

during pendency of the suit, after service of notice in the Notice of

Motion in the suit. It is further held that the Defendant Nos.2 to 4

have failed to adduce any evidence to prove that they are bonafide

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purchasers for value without notice. The learned Judge has observed

that the transaction between the Defendant No.1 and the Defendant

Nos.2 to 4, which is hit by principle of lis pendens is not valid and

legal. Based on the aforesaid findings the learned Judge has decreed

the suit as under:-

1. The suit is decreed with costs.

2. It is hereby declared that the impugned agreement

dtd.21.07.1995 executed between Defendant No.1 and

Defendant No.2 to 4 in respect of suit shop is sham, bogus

and illegal and is hereby cancelled.

3. The Plaintiff is entitled for specific performance of the

contract in respect of the suit shop between himself and

Defendant No.1 and the Defendants shall execute Sale

Deed of suit shop No.9 at Sanduwadi, Chembur, Mumabi

in favour of the Plaintiff and the remaining amount of

consideration be paid to Defendant No.1.

4. The Plaintiff shall deposit the remaining amount of

consideration of Rs.2,48,000 in Court within a period of

four weeks and the same shall be paid over to Defendant

No.1 after the execution of Sale Deed as directed above.

5. The Defendants No.1 to 4 shall deliver vacant and peaceful

possession of the suit shop to the Plaintiff immediately,

after the execution of Sale Deed.

6. The Defendant nos.2, 3 and 4 shall not create any type of

third party interest in respect of the suit shop before

handing over the possession of the suit shop to the

Plaintiff.

7. The enquiry into mesne profit is hereby directed to be

made in respect of the suit shop for the period from the

date of institution of suit till the date of actual delivery of

the possession against the Defendant No.1 only.

11. Aggrieved by the impugned judgment and decree the

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Defendant Nos.2 to 4 have preferred this appeal under Section 96 of

the Civil Procedure Code. Shri Vishal Kanade, the learned counsel for

the Defendants contends that the learned trial Judge has recorded a

finding that these Defendants are not bonafide purchasers without

framing issue in that regard. He further submitted that the Plaintiff

has not challenged the registered deed of confirmation dated

26/08/1996 executed by the Defendant No.1 in favour of these

Defendants. He contends that the Plaintiff has failed to prove that she

was ready and willing to perform her part of the contract. He submits

that the subsequent purchasers can also raise the plea that the Suit is

barred under Section 16 (c) of the Specific Reliefs Act, 1963. In

support he has relied upon the decisions of the Apex Court in Ram

Avadh and Ors. vs. Achhaibar Dubey and Anr. (2000) 2 SCC 428 and

Ritu Saxena vs. J.S. Grover (Civil Appeal No.7268-7269 of 2019)

12. Mr. Vishal Kanade, the learned counsel for the Defendants

further submits that in terms of Section 54 of the Limitation Act, the

suit ought to have been filed within three years from the date fixed for

performance or from the date performance was refused. Referring to

the averments in the plaint, he contends that the Defendant No.1 was

required to hand over possession of the suit shop within one year from

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the date of the agreement, which is alleged to be of the year 1988. The

plaintiff did not take any steps to perform her part of contract though

the building was constructed in the year 1990. Relying on the decision

of the Apex Court in Ramzan Vs/ Hussaini (1990) 1 SCC 104 he

contends that the suit is ex facie barred by law of limitation.

13. Mr. Zain Mookhi, the learned counsel for the Plaintiff

submits that the Defendant No.1, who was the vendor, has accepted

the Decree. He submits that the Defendant Nos.2 to 4 have purchased

the suit shop during the pendency of the suit. Relying upon the

decision of the Apex Court in M.M.S. Investments, Madurai and ORs.

Vs. V. Veerappan and Ors. (2007) 9 SCC 660 he contends that these

Defendants cannot raise the defence of readiness and willingness as

provided under Section 16(c) of the Specific Reliefs Act. He has also

relied upon the decision in B. Vijaya Bharti vs. P. Savitri and Ors.

(2018) 11 SCC 761. He submits that after execution of a conveyance,

the only question to be adjudicated is whether the subsequent

purchaser was bonafide purchaser for value without notice. It is urged

that the Defendants No. 2 to 4 have failed to prove that they are

bonafide purchasers. The learned counsel for the Plaintiff refutes that

the suit is barred by limitation. He contends that by letters dated

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7/6/1993 and7/7/1993 the Plaintiff had called upon the Defendant

No.1 to hand over possession of the suit shop. He contends that cause

of action to file the suit accrued on failure by the Defendant No.1 to

hand over possession of the suit shop in response to the said letters

and hence the suit is within limitation.

14. I have perused the records and considered the submissions

advanced by the learned counsel for the respective parties. It is not in

dispute that the Defendant No.1- the Original Owner has transferred

the suit shop in favour of the Defendant Nos.2 to 4 during the

pendency of the suit. The sale in favour of the Defendant Nos.2 to 4 is

therefore subject to the doctrine of lis pendense under Section 52 of

Transfer of Property Act which makes transfer pendent lite subservient

to the rights of the parties. Keeping these principles in mind, I propose

to decide the following questions:

i) Whether there was a concluded contract between the

Plaintiff and the Defendant No.1.

ii) Whether the Plaintiff was ready and willing to perform

her part of the contract as required under section 16 (c) of

the Specific Relief Act 1963 .

iii) Whether the suit is within the prescribed period of

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limitation.

iv) Whether the Plaintiff is entitled for discretionary relief?

15. The claim of the plaintiff is based on an oral agreement. It

is well settled that in a suit for specific performance of oral agreement,

the Plaintiff has to expressly plead the essential terms and conditions

of the agreement. In Brij Mohan And Ors vs Smt. Sugra Begum And

Ors (1990) 4 SCC 147 , the Apex Court has observed that:

“there is no requirement of law that an agreement

or contract of sale of immovable property should

only be in writing. However, in a case where the

Plaintiffs come forward to seek a decree for specific

performance of contract of sale of immovable

property on the basis of an oral agreement alone,

heavy burden lies on the Plaintiffs to prove that

there was consensus ad-idem between the parties for

a concluded oral agreement for sale of “there is no

requirement of law that an agreement or contract of

sale of immovable property should only be in

writing. However, in a case where the Plaintiffs come

forward to seek a decree for specific performance of

contract of sale of immovable property on the basis

of an oral agreement alone, heavy burden lies on the

Plaintiffs to prove that there was consensus ad-idem

between th immovable property. Whether there was

such a concluded oral contract or not would be a

question of fact to be determined in the facts and

circumstances of each individual case. It has to be

established by the Plaintiffs that vital and

fundamental terms for sale of immovable property

were concluded between the parties orally and a

written agreement if any to be executed

subsequently would only be a formal agreement

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incorporating such terms which had already been

settled and concluded in the oral agreement. "

16. In the instant case, the Plaintiff has vaguely stated that the

agreement was entered sometime in the year 1988. The relevant

averments in the plaint are that the Defendant no.1 had agreed to sell

the suit shop for price of Rs.2,58,000/- and accepted Rs.10,000/- as

booking amount. It is also averred that the balance sale consideration

was agreed to be paid on the date of handing over of possession of the

suit shop, which was to be within one year from the date of the

agreement. These are the only averments on which the contract

allegedly stood confirmed.

17. The plaint lacks other material particulars as to the nature

of title of the Defendant No.1, details of the plan, license and location

of the suit shop, amenities to be provided, payment of earnest money,

mode of and time frame of payment of sale consideration, liability of

each party to pay probable cost of conveyance/registration charges or

stamp duty, consequences of nonpayment of consideration or breach of

terms and conditions of the agreement etc. The pleadings also do not

spell out whether the alleged oral agreement was preceded by

negotiations or whether the terms and conditions of the agreement

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were finalized in presence of any witness. The averments in the plaint

are vague, ambiguous and do not contain material particulars.

18. The trial Court has not adverted to these discrepancies but

has drawn an inference of concluded contract mainly on the basis of

the averments in paragraph 3, 4 and 6 of the Written Statement. It is

to be noted that in paragraph 3 of the written statement the Defendant

No.1 has averred that there is no valid contract for purchase of suit

shop as alleged. It is averred that the Plaintiff had approached them to

purchase the suit shop and offered to pay the booking amount of

Rs.10,000/-. The Defendant No.1 has admitted having received the

booking amount of Rs.10,000/-. The Defendant No.1 had stated that

the receipt of booking amount does not constitute a valid contract. In

paragraph 4 of the Written Statement, the Defendant No.1 had averred

that it was obligatory for the Plaintiff to pay the entire earnest money

aggregating to 15% of the total consideration for the said shop and

only thereafter, there could be a valid contract or agreement. The

Defendant No.1 has further averred that vide several letters, they had

called upon the Plaintiff to sign the agreement and pay the earnest

money despite which the Plaintiff did not come forward to sign the

agreement. Hence, no agreement was signed in respect of the suit

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shop. It is averred that the Plaintiff did not evince any interest in

entering into an agreement and hence the they were entitled to forfeit

the booking amount. In paragraph 6 of the written statement, the

Defendant No.1 has averred that the total agreed consideration was

Rs.3.51 lakhs and not Rs.2.58 lakhs as asserted in the plaint. It is

further reiterated that there was no contract/agreement between the

parties.

19. A holistic reading of the written statement reveals that the

Plaintiff had agreed to purchase the suit for Rs.3,51,000/-, and paid

advance of Rs.10,000/-. The averments in the written statement

indicate that the terms of the agreement could not be settled and

finalized for want of payment of earnest money equivalent to 15% of

the sale consideration, which was a pre-requisite of binding and

enforceable contract. The pleadings read as a whole do not contain

any admission of a concluded contract, on the contrary, there is a

specific denial of an oral agreement as pleaded by the Plaintiff. It is but

evident that the trial judge has read the pleadings out of context and

in isolation and treated the disputed question of fact as having been

admitted. To say the least, the approach is totally erroneous.

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20. The Defendant having disputed the factum of oral

agreement, the burden was on the Plaintiff to prove her case by

adducing cogent and convincing evidence. Apart from the affidavit in

evidence, which is nothing but a reproduction of the averments in the

plaint, the Plaintiff has not adduced any independent evidence in

support of her claim. The trial court has laid much emphasis on the

fact that the Defendants had not cross-examined the Plaintiff and not

adduced any evidence in support of their case. Suffice it to say, the

question whether there was an enforceable contract or not had to be

established by the Plaintiff on the strength of her own case rather than

the weaknesses or deficiency in the case set up by the Defendants. A

decree for specific performance cannot be granted merely because the

Defendants hves failed to controvert the evidence of the Plaintiff. The

essential question to be addressed by the court is proof of a valid and

enforceable contract, the breach of the terms and conditions of the

agreement, readiness and willingness on the part of the Plaintiff to

perform her part of the contract and whether the Plaintiff is entitled

for discretionary relief.

21. The trial court has also relied upon the admission of the

Defendant No.,1 that the agreed sale price was Rs.3,51,000/- and that

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he had received booking amount of Rs. 10,000/ which was to be

adjusted towards sale consideration. There is absolutely no material on

record to indicate that the said amount was paid and received as a

security for due performance of the contract and that the same was

intended to be forfeited for breach of terms and conditions of the

agreement. Thus the advance amount, which was to be adjusted

towards sale consideration without any intention to bind the contract,

cannot be construed as earnest money. The evidence adduced by the

Plaintiff may at the most prove that there were talks between the

parties in respect of sale of the suit shop. According to the Plaintiff the

agreed sale consideration was Rs.2,58,000/-. She had admittedly paid

an advance amount of Rs.10,000/- which was to be adjusted against

the sale consideration to be paid at the time of handing over of the

possession. It need not be emphasized that settlement of price is only

one of the terms of the contract and the agreement cannot be

considered as enforceable contract unless all the other essential terms

and conditions are concluded between the parties. As stated earlier,

the Plaintiff has failed to prove the terms and conditions of a

concluded contract. Apart from the bare statement, the Plaintiff has

not adduced any independent evidence to prove that there was

consensus ad idem between the parties for a concluded contract.

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Hence, the fact that the Defendant no.1 had received token amount

Rs.10,000/-, as advance of sale consideration would not per se be a

constituent of a concluded contract. The Plaintiff having failed to prove

existence of a valid and enforceable contract is not entitled for an

order of specific relief.

22. The next question is whether the Plaintiff has satisfied the

statutory requirement of the Section 16(c) of the Specific Relief Act, as

it stood prior to 2018 amendment. This Section envisages that in a

suit for specific performance, the Plaintiff must plead and prove that

he has always been ready and willing to perform his part of the

contract. The factum of readiness and willingness is to be adjudged

with reference to the conduct of the party and the attending

circumstances. In Ram Avadh (supra) a three Judge Bench of the Apex

Court has held that :-

" The obligation imposed by Section 16 is upon the Court

not to grant specific performance to a Plaintiff, who has

not made the requirements of clauses (a), (b) and (c)

thereof. A court may not, therefore, grant to a Plaintiff,

who has failed to aver and to prove that he has

performed or has always been ready and willing to

perform his part of the agreement, the specific

performance whereof he seeks. There is, therefore, no

question of the plea being available to one Defendant and

not to another. It is open to any Defendant to contend

and establish that the mandatory requirement of Section

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16(c) has not been complied with and it is for the Court

to determine whether it has or has not been complied

with and, depending upon its conclusion, decree or

decline to decree the suit."

23. The scope and ambit of Section 16( c) has been considered and

explained by the Apex Court in A Kanthimani vs. Nasrin Ahmed

(2017) SCC 654 as under:-

“24. The expression "readiness and willingness" has

been the subject matter of interpretation in many

cases even prior to its insertion in Section 16 (c) of

the Specific Relief Act, 1963. While examining the

question as to how and in what manner, the plaintiff

is required to prove his financial readiness so as to

enable him to claim specific performance of the

contract/agreement, the Privy Council in a leading

case which arose from the Indian Courts (Bombay)

in Bank of India Limited & Ors. Vs. Jamsetji A.H.

Chinoy and Chinoy and Company, AIR 1950 PC 90,

approved the view taken by Chagla A.C.J., and held

inter alia that " it is not necessary for the plaintiff to

produce the money or vouch a concluded scheme for

financing the transaction to prove his readiness and

willingness.”

25)The following observations of the Privy

Council are apposite: “21…………..Their Lordships

agree with this conclusion and the grounds on

which it was based. It is true that the plaintiff 1

stated that he was buying for himself, that he had

not sufficient ready money to meet the price and

that no definite arrangements had been made for

finding it at the time of repudiation. But in order to

prove himself ready and willing a purchaser has not

necessarily to produce the money or to vouch a

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concluded scheme for financing the transaction. The

question is one of fact, and in the present case the

Appellate Court had ample material on which to

found the view it reached. Their Lordships would

only add in this connection that they fully concur

with Chagla A.C.J. when he says:

“In my opinion, on the evidence already on

record it was sufficient for the court to come to the

conclusion ' that plaintiff 1 was ready and willing to

perform his part of the contract. It was not

necessary for him to ' work out actual figures and

satisfy the court what specific amount a bank would

have advanced on the mortgage of his property and

the pledge of these shares. I do not think that any

jury--if the matter was left to the jury in England--

would have come to the conclusion that a man, " in

the position in which the plaintiff was, was not

ready and willing to pay the purchase price of the

shares which he had bought from defendants 1 and

2."

For the foregoing reasons, their Lordships answer

question(4) in the affirmative.” (Emphasis supplied)

30) This Court in Sukhbir Singh & Ors. Vs. Brij Pal

Singh & Ors., AIR 1996 SC 2510=(1997) 2 SCC

200 followed the aforesaid principle with these

words:

“5. 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 the

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

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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 the 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.”

24.In Mehboob-Ul-Rehman v/s. Ahsanul Ghani, Civil Appeal

No.8199 of 2009 the Apex Court has reiterated that :-

"15. Such a requirement, of necessary averment

in the plaint, that he has already performed or

has always been ready and willing to perform

the essential terms of the contract which are to

be performed by him being on the Plaintiff,

mere want of objection by the Defendant in the

written statement is hardly of any effect or

consequence. The essential question to be

addressed to by the Court in such a matter has

always been as to whether, by taking the

pleading and the evidence on record as a

whole, the Plaintiff has established that he has

performed his part of the contract or has always

been ready and willing to do so. In this regard,

suffice it would be to refer to the principles

enunciated by this Court in the case of Umabai

(supra) as under:-

"30. It is now well settled that the conduct of

the parties, with a view to arrive at a finding as

to whether the Plaintiff-respondents were all

along and still are ready and willing to perform

their part of contract as is mandatorily required

under Section 16(c) of the Specific Relief Act

must be determined having regard to the entire

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attending circumstances. A bare averment in

the plaint or a statement made in the

examination-in-chief would not suffice. The

conduct of the Plaintiff-respondents must be

judged having regard to the entirety of the

pleadings as also the evidences brought on

records.

*** *** ***

45. It was for the Plaintiff to prove his readiness

and willingness to pay the stipulated amount

and it was not for the appellants to raise such

question…"

25.The pleadings and the evidence, examined with reference to the

aforesaid principles, indicate that the alleged agreement was entered

into in the year 1988 whereunder possession of the suit shop was to be

given within one year of the agreement. The Plaintiff had paid a

nominal advance of Rs.10,000/- at the time of execution of the alleged

agreement and the balance sale consideration of Rs. 2,48,000/ was to

be paid on the date of execution of the sale deed. The records indicate

that the Plaintiff did not take any steps to give effect to the agreement

though she was aware that the construction of the building was

completed in the year 1990. It was for the first time in the year 1993,

by letters dated 7/6/1993 and 7/7/1993 that the Plaintiff called upon

the Defendant no.1 to hand over possession of the suit shop. The

unexplained prolonged silence during this interregnum period gives

rise to an inference that the Plaintiff was not willing to perform her

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part of the contract. Furthermore, in these two letters which are at

Exh.9 and 10 the Plaintiff has not expressed that she has been ready

and willing to pay the balance amount of Rs.2,48,000/-. Though the

Plaintiff is not expected to have ready cash in the pocket at all the

time, the onus is on the Plaintiff to prove her financial capacity to pay

the balance sale consideration. In the instant case, apart from the bald

assertion that she was ready and willing to perform her part of

contract, the Plaintiff has not adduced any evidence to prove that she

had financial capacity to pay the balance sale consideration of

Rs.2,48,000/-. She has neither given her source of income nor

produced bank account, income tax returns or any other document to

prove that she had financial capacity to go ahead with the alleged

transaction. In the absence of such supporting evidence regarding

availability of funds, the bald self-serving assertion of the Plaintiff

carries no weight. Thus, the Plaintiff has not only failed to prove a

concluded contract but she has also failed to discharge the onus of

proving that she has all along been ready and willing to perform her

part of the contract, which is a sine qua non for grant of relief of

specific performance.

26.It is also pertinent to note that Section 20 of the Specific Relief

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Act, as it stood prior to 2018 amendment, provides that specific

performance is a discretionary remedy and the Court is not bound to

grant such relief merely because it is lawful to do so. Sub-Section 2 of

Section 20 stipulates that in the following cases the court may exercise

its discretion not to grant relief of specific performance:

20. Discretion as to decreeing specific

performance.—

(1) …

(2) The following are cases in which the court

may properly exercise discretion not to decree

specific performance:—

(a) where the terms of the contract or the

conduct of the parties at the time of entering into

the contract or the other circumstances under

which the contract was entered into are such that

the contract, though not voidable, gives the

plaintiff an unfair advantage over the defendant;

or

(b) where the performance of the contract would

involve some hardship on the defendant which he

did not foresee, whereas its non-performance

would involve no such hardship on the plaintiff;

or

(c) where the defendant entered into the contract

under circumstances which though not rendering

the contract voidable, makes it inequitable to

enforce specific performance. Explanation 1.—

Mere inadequacy of consideration, or the mere

fact that the contract is onerous to the defendant

or improvident in its nature, shall not be deemed

to constitute an unfair advantage within the

meaning of clause (a) or hardship within the

meaning of clause (b). Explanation 2.— The

question whether the performance of a contract

would involve hardship on the defendant within

the meaning of clause (b) shall, except in cases

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where the hardship has resulted from any act of

the plaintiff subsequent to the contract, be

determined with reference to the circumstances

existing at the time of the contract.

27.In K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, the Hon'ble

Supreme Court has held that in case of delay/inaction on the part of

the Plaintiff for two and a half years, it would be inequitable to give a

relief of specific performance to the Plaintiff. The Supreme Court has

observed thus::

"13. In the case before us, it is not mere delay. It is a

case of total inaction on the part of the Plaintiff for

2½ years in clear violation of the terms of agreement

which required him to pay the balance, purchase the

stamp papers and then ask for execution of sale deed

within six months. Further, the delay is coupled with

substantial rise in prices according to the defendants,

three times - between the date of agreement and the

date of suit notice. The delay has brought about a

situation where it would be inequitable to give the

relief of specific performance to the Plaintiff."

28.In Saradamani Kandappan vs. Mrs. S. Rajalakshmi, 2011 (12)

SCC 18 has considered the aspect of payment of a nominal advance

price by the Plaintiff and its effect on the discretion of the Court in

granting the discretionary relief of specific performance. Paras 37 and

43 of the judgment in the case of Saradamani Kandappan (supra) read

thus:

"37. The reality arising from this economic change

cannot continue to be ignored in deciding cases

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relating to specific performance. The steep

increase in prices is a circumstance which makes it

inequitable to grant the relief of specific

performance where the purchaser does not take

steps to complete the sale within the agreed

period, and the vendor has not been responsible

for any delay or non-performance. A purchaser

can no longer take shelter under the principle that

time is not of essence in performance of contracts

relating to immovable property, to cover his

delays, laches, breaches and "non-readiness". The

precedents from an era, when high inflation was

unknown, holding that time is not of the essence

of the contract in regard to immovable properties,

may no longer apply, not because the principle laid

down therein is unsound or erroneous, but the

circumstances that existed when the said principle

was evolved, no longer exist. In these days of

galloping increases in prices of immovable

properties, to hold that a vendor who took an

earnest money of say about 10% of the sale price

and agreed for three months or four months as the

period for performance, did not intend that time

should be the essence, will be a cruel joke on him,

and will result in injustice. Adding to the misery is

the delay in disposal of cases relating to specific

performance, as suits and appeals therefrom

routinely take two to three decades to attain

finality. As a result, an owner agreeing to sell a

property for rupees one lakh and received rupees

ten thousand as advance may be required to

execute a sale deed a quarter century later by

receiving the remaining rupees ninety thousand,

when the property value has risen to a crore of

rupees.

xxxxx xxxxx xxxxx

43. Till the issue is considered in an appropriate

case, we can only reiterate what has been

suggested in K.S. Vidyanandam.

(i) The courts, while exercising discretion in suits

for specific performance, should bear in mind that

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when the parties prescribe a time/period, for

taking certain steps or for completion of the

transaction, that must have some significance and

therefore time/period prescribed cannot be

ignored.

(ii) The courts will apply greater scrutiny and

strictness when considering whether the purchaser

was "ready and willing" to perform his part of the

contract.

(iii) Every suit for specific performance need not

be decreed merely because it is filed within the

period of limitation by ignoring the time-limits

stipulated in the agreement. The courts will also

"frown" upon suits which are not filed immediately

after the breach/refusal. The fact that limitation is

three years does not mean that a purchaser can

wait for 1 or 2 years to file a suit and obtain

specific performance. The three-year period is

intended to assist the purchasers in special cases,

as for example, where the major part of the

consideration has been paid to the vendor and

possession has been delivered in part-

performance, where equity shifts in favour of the

purchaser."

29.It is thus well settled that general rule is against exercise of dis-

cretion in favour of a proposed purchaser, who has paid a nominal ad-

vance price inasmuch as by the lapse of time, the balance sale consider-

ation which is granted at a much later date, is not sufficient to enable

the proposed seller to buy an equivalent property which could have

been bought from the balance sale consideration if the same was paid

on the due date. In the instant case the Plaintiff had paid Rs.10,000/-

as advance of sale consideration. The said nominal amount, which is

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less than 5% of the alleged sale consideration, was paid in the year

1988 and the balance amount of Rs. 2,48,000/ was to be paid on the

date of execution of the sale deed. The averments in the plaint as well

as evidence on record indicate that the Plaintiff was aware that the suit

shop was available for sale in the year 1990 despite which the Plaintiff

did not offer to pay the balance amount or get possession of the suit

shop. The Plaintiff has sought to enforce the agreement in the year

1994 at the sale price allegedly agreed in the year 1988. It is to be

noted that even if time is not the essence of contract, it has to be per-

formed within a reasonable time to obviate unfair advantage to one

party or disadvantage to the other. In the facts of the case, prolonged

inaction and wanton delay on the part of the Plaintiff, escalating price

coupled with dwindling value of money, would prejudice and cause

hardship to the defendant no.1 as compared to the Plaintiff. Hence,

even if it is assumed that there was a valid contract, it is inequitable to

pass a decree of specific performance in favour of the Plaintiff.

30.The defendants have contended that the suit for specific

performance is filed beyond the prescribed period of limitation under

Article 54 the Limitation Act. Article 54 of the schedule to the

Limitation Act provides the period of limitation for specific

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performance of contract as three years from the date fixed for the

performance, if no such date is fixed, when the plaintiff has noticed

that performance is refused.

31.In Ramzan vs. Husseini (supra) the sale deed was to be executed

upon redemption of the mortgage. The Apex Court has observed that

the agreement was a contingent contract within the meaning of Indian

Contract Act and was enforceable as soon as the redemption

happened. Hence though a particular date was not mentioned in the

document and the date was not ascertainable originally, but as soon as

the plaintiff redeemed the mortgage, it became an ascertained date.

The period of limitation thus would run from the said date and the

case would be covered by the first part of Article 54.

32.In the instant case, the plaintiff has stated that the building/suit

shop was to be constructed within one year from the date of the

agreement and the sale deed was to be executed at the time of

handing over of the possession of the suit shop. These averments do

not indicate that any specific date was fixed for the performance of the

contract and the date on which the agreement was to be enforced was

not ascertainable. Hence, the suit would not be covered by the first

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part of Article 54. The plaintiff has stated that she learnt about the

refusal only after the defendant no.1 refused to enforce the agreement

even after receipt of the notice dated 7.6.1993 and 7.7.1993. The

plaintiff had filed the suit in the year 1994 that is within a period of

three years from the date of accrual of cause of action. Be that as it

may, in the absence of specific pleadings, issue and evidence in this

regard, the Defendants cannot be permitted to raise the issue of

limitation, which is otherwise a mixed question of law and fact.

33.Having regard to the findings on facts and the discussion supra,

the plaintiff has failed to prove a concluded contract, that she was

ready and willing to perform her part of the contract and she is not

entitled to the equitable relief. Hence, the Appeal is allowed with no

orders as to costs. The impugned judgment and decree dated

18/02/2014 passed by the learned Judge, City Civil Court, Mumbai in

Civil Suit No.8509 of 1994 is quashed and set aside. Consequently

the Civil Suit No. 8509 of 1994 stands dismissed.s

(SMT. ANUJA PRABHUDESSAI, J.)

At the request of the learned Counsel for the Plaintiff and in the

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interest of justice, the defendants are directed to maintain status quo

in respect of the suit flat for a period of six weeks from the date of

uploading of the order.

(SMT. ANUJA PRABHUDESSAI, J.)

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