Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.2714 OF 2008

Mrs. A. Kanthamani ….Appellant(s)

VERSUS

Mrs. Nasreen Ahmed …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1)This appeal is filed by the defendant against

the judgment and final order dated 27.10.2006

passed by the High Court of Judicature at Madras

in A.S. No. 127 of 2000 by which the High Court

dismissed the appeal filed by the appellant herein

with costs confirming the decree and judgment

dated 30.10.1998 passed in O.S. No. 6420 of 1996

by the VIII Additional Judge, City Civil Court,

Chennai, which decreed the respondent’s suit for

1

Page 2 specific performance of the agreement against the

appellant.

2)We herein set out the facts, in brief, to

appreciate the issue involved in this appeal.

3)The appellant-defendant is the owner of the

property situated at No.191, Lloyds Road,

Chennai-86. She entered into an agreement for sale

with the respondent-plaintiff on 05.03.1989 in

respect of a part of ground floor of the said property

described in Schedule ‘B’ to the plaint together with

1/3

rd

undivided share in the property described in

Schedule ‘A’ for a total sale consideration of

Rs.3,43,200/-. On the same day, a sum of

Rs.1,30,000/- was paid by the respondent as

advance money to the appellant. Thereafter, the

respondent paid Rs. 20,000/- towards sale

consideration to the appellant on 03.04.1989, Rs.

10,000/- on 04.05.1989, Rs. 15,000 on 03.07.1989,

Rs. 15,000/- on 06.07.1989 and Rs. 16,000/- on

16.08.1989. So far as the balance amount was

2

Page 3 concerned, the respondent agreed to pay the same

on or before 31.12.1989 to the appellant. It was

alleged that the appellant also orally agreed to sell

to the respondent an additional area of 132.25 sq.ft.

at the ground floor and 4 of undivided share and for

that additional property, the respondent paid a sum

of Rs.46,000/- as an advance money.

4)On 10.11.1989, the respondent sent a draft

sale deed to the appellant for an area measuring

847.25 sq.ft. and one 1/2 undivided share. The

appellant though agreed to sell the additional extent

of land orally, she refused to do so and returned the

draft sale deed on 04.12.1989 for approval of the

respondent by treating the sum of Rs.46,000/- paid

by her for additional extent as further advance for

the earlier written agreement.

5)Thereafter on 15.12.1989, the appellant sent

another draft sale deed for approval of the

respondent by removing clauses 18 and 27 and with

minor changes. Since these deleted clauses referred

3

Page 4 to clauses 17 and 24 of the agreement of sale, the

respondent approved the first draft which contained

these clauses.

6)On 27.12.1989, the appellant wrote a letter to

the respondent insisting upon her to approve her

second draft on or before 31.12.1989.

7)The respondent approved the second draft sale

deed and sent it to the appellant on 28.12.1989 by

speed post and also enclosed a letter from the LIC

sanctioning loan of Rs.1 lakh in her favour. The

respondent further informed that she is willing to

bring the balance of sale consideration at the time

of registration of the sale deed.

8)On 30.12.1989, the respondent sent a legal

notice through her advocate calling upon the

appellant to execute and register the sale deed on or

before 10.01.1990 in her favour.

9)By letter dated 03.01.1990 through her

advocate, the appellant refused to sell the property

to the respondent and cancelled the agreement.

4

Page 5 10)The respondent then filed a suit against the

appellant on 10.01.1990 seeking specific

performance of the agreement. The plaint contained

aforementioned pleadings. It was alleged that the

respondent was and is ready and willing to perform

her part of the agreement and has, in fact, so

performed. It was alleged that it was the appellant

who failed to perform her part without any

justification and hence committed breach of the

agreement thereby entitling the respondent to claim

specific performance of the agreement in relation to

suit house. The appellant filed written statement.

11)Considering the plaint and written statement,

the trial Court framed five issues and one additional

issue which are as under:

1)Whether it is true that the defendant

agreed to sell the schedule property

and an extent of 132.25 sq.ft. along

with ½ undivided share to the

plaintiff?

2)Whether it is true that the time is

the essence of the contract?

3)Whether it is true that the plaintiff

was ready to perform her part of

contract in the agreement?

5

Page 6 4)Whether the plaintiff is entitled for

the relief of specific performance?

5)What is the relief, the plaintiff

entitled for?

Additional issue framed on 31.07.1998:

1) Whether the plaintiff acted in a manner

contradictory and in violation of

agreement?

12)After considering the documentary evidence

led in by both the parties, the Trial Court, vide

judgment and decree dated 30.10.1998 in O.S.

No.6420 of 1996, decreed the respondent’s suit and

passed the decree for specific performance of the

agreement against the appellant. It was held that

the time was not the essence of the contract. It was

further held that the Plaintiff (Respondent) was

always ready and willing to perform the agreement

and, in fact, performed her part while it was the

defendant (appellant) who tried to scuttle away from

the agreement. It was further held that the

respondent is entitled to a decree for specific

performance of contract on the basis of sale

6

Page 7 agreement dated 05.03.1989 in respect of the plaint

schedule property and accordingly the appellant

was given two months’ time to execute the sale deed

and the respondent was given one month’s time to

deposit the balance sale consideration of

Rs.1,47,200/-.

13)Aggrieved by the aforesaid judgment, the

defendant filed an appeal to the High Court. By

impugned judgment dated 27.10.2006, the High

Court dismissed the appeal and confirmed the

decree and judgment dated 30.10.1998 passed by

the trial Court in O.S. No. 6420 of 1996.

14)Against the said judgment, the

appellant(defendant) has filed this appeal by way of

special leave petition before this Court.

15)Heard Mr. Mohan Parasaran, learned senior

counsel for the appellant and Mr. R.

Balasubramanian, learned senior counsel for the

respondent.

7

Page 8 16)Mr. Mohan Parasaran, learned senior counsel

for the appellant while assailing the legality and

correctness of the impugned judgment essentially

argued three points.

17)In the first place, learned counsel submitted

that since the respondent (plaintiff) did not seek a

declaration that the termination of agreement is bad

in law, mere suit for specific performance of the

agreement was not maintainable in law and was,

therefore, liable to be dismissed on this short

ground. In other words, the submission was that it

was obligatory upon the respondent (plaintiff) to

have sought a declaration in the suit that the

termination of the agreement made by the appellant

(defendant) vide his notice dated 03.01.1989 is bad

and along with such relief, the respondent(plaintiff)

should also have claimed a relief of specific

performance of the agreement to make the suit

maintainable. It was urged that since such relief

was not claimed by the plaintiff, the suit for specific

8

Page 9 performance of the agreement simpliciter was not

maintainable. In support of this submission,

learned counsel placed reliance on the decision of

this Court in I.S. Sikander (Dead) by LRs. Vs. K.

Subramani & Ors., (2013) 15 SCC 27.

18)In the second place, learned counsel attacked

the findings on merits. He took us to the evidence of

the parties and made an attempt to point out that

both the Courts below committed error in holding

that the plaintiff was ready and willing to perform

her part of the agreement. Learned counsel

contended that from the evidence, it is clear that the

plaintiff was neither ready nor willing to perform her

part of the agreement and nor she had money with

her to pay towards balance consideration to the

defendant to get the sale deed executed in her

favour in terms of the agreement. It was urged that

the plaintiff did not come to the Court with clean

hands inasmuch as she insisted upon the terms,

9

Page 10 which were neither agreed upon and nor they were

part of the agreement.

19)In the third place, learned counsel contended

that since two Courts below did not properly

appreciate the evidence and that too in a case where

the plaintiff had come to the Court with unclean

hands, the discretionary relief of grant of specific

performance of agreement ought not to have been

granted to such plaintiff and instead the suit

merited dismissal.

20)In reply, learned counsel for the respondent

(plaintiff) while opposing the appeal contended that

no case for any interference in the impugned

judgment is made out. It was his submission that

both the Courts below rightly held that the plaintiff

was able to make out a case of breach of agreement

committed by the defendant; and secondly, she had

performed her part of the agreement thereby rightly

held to have fulfilled the twin requirement of

"readiness and willingness" as provided under

10

Page 11 Section 16 (c) of the Specific Relief Act, 1963.

Learned counsel urged that since the issue relating

to the maintainability of suit was neither raised in

the written statement nor in the appeal before the

High Court and nor even in this appeal but was

raised for the first time in submission, hence the

same could not be allowed to be raised for the first

time in this Court. Lastly, learned counsel

submitted that since the two Courts below

answered all the issues on facts in favour of the

plaintiff by properly appreciating the evidence, such

findings being concurrent in nature, are binding on

this Court. It was more so when the findings did not

suffer from any perversity, much less extreme

perversity or illegality or arbitrariness, requiring any

interference by this Court.

21)Having heard learned counsel for the parties

and on perusal of the record of the case, we find no

force in any of the submissions of the learned

counsel for the appellant (defendant).

11

Page 12 22)Before we proceed to examine the issues

involved in the appeal, it is necessary to take note of

some of the relevant provisions of the Acts and the

decisions rendered by the Courts, which govern the

controversy.

23)The filing of the suit for specific performance of

an agreement/contract is governed by Section 16(c)

of the Specific Relief Act, 1963 read with Article 54

of the Schedule to the Limitation Act, 1963. Form

Nos. 47 and 48 of Appendix‘A’ to Code of Civil

Procedure, 1908 prescribe the format of the plaint

for such suit.

24)The Specific Relief Act, 1877 which stood

repealed by the Act of 1963 did not contain

provision analogues to Section 16(c). Yet in the

absence of any such provision, its requirements

used to be considered mandatory in the suits for

specific performance by virtue of law laid down by

the Privy Counsel in a celebrated case of Ardeshir

H. Mama vs Flora Sasoon, AIR 1928 PC 208. It is

12

Page 13 in this Case which went to Privy Council from

Indian Courts, Their Lordships laid down the

following principle:

“In a suit for specific performance on

the other hand, he treated and was required

by the Court to treat the contract as still

subsisting. He had in that suit to allege, and

if the fact was traversed, he was required to

prove a continuous readiness and willingness,

from the date of the contract to the time of

the hearing, to perform the contract on his

part. Failure to make good that averment

brought with it the inevitable dismissal of his

suit. Thus it was that the commencement of

an action for damages being, on the principle

of such cases as Clough v. London and North

Western Railway Co. (1871) L.R. 7 Ex. 26 and

Law v. Law (1905) 1 Ch. 140 a definite

election to treat the contract as at an end, no

suit for specific, performance, whatever

happened to the action, could thereafter be

maintained by the aggrieved plaintiff. He had

by his election precluded himself even from

making the averment just referred to proof of

which was essential to the success of his suit.

The effect upon an action for damages for

breach of a previous suit for specific

performance will be apparent after the

question of the competence of the Court

itself to award damages in such a suit has

been touched upon.”

25)The Act of 1963 then made the aforesaid

requirement a statutory one by enacting Section 16

(c), which reads as under: -

“16. Personal bars to relief- Specific

performance of a contract cannot be enforced

in favour of a person-

(a)…………………..

13

Page 14 (b)…………………..

(c) 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 terms the performance of which

has been prevented or waived by the

defendant.

Explanation – For the purposes of clause(c)-

a) 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;

b) the plaintiff must aver performance of,

or readiness and willingness to perform, the

contract according to its true construction.”

26)Therefore, the plaint which seeks the relief of

specific performance of the agreement/contract

must contain all requirements of Section 16 (c) read

with requirements contained in Form Nos. 47 and

48 of Appendix ‘A’ of C.P.C.

27)Article 54 of the Limitation Act provides a

period of 3 year for filing a suit for specific

performance of contract/agreement. A period of 3

years is required to be counted from the date fixed

by the parties for the performance, or if no such

date is fixed, when the plaintiff has noticed that the

14

Page 15 performance is refused. The plaint should,

therefore, also have necessary pleading satisfying

the requirement of Article 54.

28)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.”

15

Page 16 29)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 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."

16

Page 17 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

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.”

31)Keeping these broad principles of law in mind,

which are now fairly well settled, let us examine the

facts of this case.

17

Page 18 32)At the outset, we may observe that this Court

is loath to undertake the task of appreciating the

evidence in an appeal filed under Article 136 of the

Constitution of India. It is more so when such

appeal arises out of the judgment, which has

recorded concurrent findings of fact.

33)However, since in this case, leave was granted

and at the time of hearing, learned counsel for the

parties took us through the evidence in support of

their submissions, we considered it proper to peruse

the evidence with a view to find out as to whether

impugned judgment suffers from any error on facts

or/and law?

34)Coming first to the submission of the learned

counsel for the appellant about the maintainability

of suit, in our considered view, it has no merit for

more than one reason.

35)First, as rightly argued by learned counsel for

the respondent, the objection regarding the

maintainability of the Suit was neither raised by the

18

Page 19 defendant in the written statement nor in first

appeal before the High Court and nor in grounds of

appeal in this Court.

36)Second, since no plea was raised in the written

statement, a fortiori, no issue was framed and, in

consequence, neither the Trial Court nor the High

Court could render any finding on the plea.

37)Third, it is a well-settled principle of law that

the plea regarding the maintainability of suit is

required to be raised in the first instance in the

pleading (written statement) then only such plea

can be adjudicated by the Trial Court on its merits

as a preliminary issue under Order 14 Rule 2 of the

CPC. Once a finding is rendered on the plea, the

same can then be examined by the first or/and

second appellate Court.

38)It is only in appropriate cases, where the Court

prima facie finds by mere perusal of plaint

allegations that the suit is barred by any express

provision of law or is not legally maintainable due to

19

Page 20 any legal provision; a judicial notice can be taken to

avoid abuse of judicial process in prosecuting such

suit. Such is, however, not the case here.

39)Fourth, the decision relied on by the learned

counsel for the appellant in the case of I.S.

Sikander (supra) turns on the facts involved therein

and is thus distinguishable.

40)Lastly, the suit filed by the respondent seeking

specific performance of the agreement dated

05.03.1989 was maintainable for the reason that

the cause of action to file the suit arose on the

expiry of period mentioned in the agreement

(31.12.1989) for its performance as provided in

Article 54 of the Limitation Act and it was rightly

filed immediately within 10 days on 10.01.1990.

41)For the aforementioned reasons, we find no

merit in the first submission of learned counsel for

the appellant, which is rejected.

42)Coming now to the second and third

submission of learned counsel for the appellant, we

20

Page 21 are of the considered opinion that it has also no

merit and hence deserve to be rejected for more

than one reason.

43)First, the plaintiff had pleaded the necessary

requirements of Section 16 (c) of the Specific Relief

Act, 1963 read with the requirement of Forms 47,

48 and Article 54 of the Limitation Act in the plaint;

Second, the defendant did not dispute the execution

of agreement with the plaintiff and, in fact, entered

in correspondence with the plaintiff for

incorporation of some clauses therein; Third, the

plaintiff proved her readiness and willingness to

perform her part of agreement and also proved her

financial capacity to purchase the suit property by

adducing adequate evidence; Fourth, the plaintiff

had paid more than Rs.2 lacs to the defendant prior

to execution of sale deed in terms of agreement

dated 05.03.1989 and was, therefore, required to

pay balance sum of Rs.1,47,200/- to the defendant;

Fifth, on admitted facts, therefore, the plaintiff had

21

Page 22 paid more than 50% of the sale consideration to the

defendant before the due date of execution of sale

deed; Sixth, the plaintiff had also proved that she

had the requisite financial capacity to pay the

balance sale consideration to the defendant

inasmuch as she had arranged the funds by

obtaining loan from the LIC; Seventh, the plaintiff

filed the suit immediately on expiry of the period

within 10 days to show her readiness and

willingness to purchase the property; and Eighth,

once it was held that the defendant committed

breach in avoiding to execute the agreement,

whereas the plaintiff performed her part of

agreement and was ready and willing to perform her

part, the Trial Court was justified in exercising its

discretion in favour of the plaintiff by passing a

decree for specific performance of agreement against

the defendant.

44)In our view, none of these findings could be

assailed as being either perverse or de hors the

22

Page 23 evidence or against any provision of law and nor

these findings could be assailed on the ground that

no judicial man could ever reach to such

conclusion.

45)We also do not find any merit in the

submission of the learned counsel for the appellant

when he contended that the plaintiff did not come to

the Court with clean hands and hence the suit is

liable to be dismissed.

46)In our view, both the Courts below rightly

rejected this submission. There is no evidence to

sustain the submission. On the other hand, we find

that it is the defendant, who despite accepting the

substantial money (more than 50%) towards sale

consideration from the plaintiff, avoided executing

the sale deed on one or other false pretext.

47)We also do not find any merit in the

submission of the learned counsel for the appellant

when he contended that since the plaintiff was

insisting for execution of sale deed in relation to

23

Page 24 some more portions, which did not form part of the

agreement and hence it should have been held that

the plaintiff committed the breach of the agreement

and not the defendant.

48)In our view, the two Courts below rightly

repelled this submission by holding that the plaintiff

did not claim any relief in relation to the property

which was not the subject matter of agreement and

confined his relief only in relation to the property

which formed the subject matter of agreement dated

05.03.1989. We thus find no good ground to differ

with this finding of the two Courts below. It was

rightly recorded.

49)In our considered view, the two Courts below,

therefore, rightly rendered the aforementioned

findings in favour of the plaintiff and we find no

difficulty in concurring with the findings, which in

our view do not call for any interference by this

Court.

24

Page 25 50)In the light of foregoing discussion, we find no

merit in the appeal. It is accordingly dismissed with

cost quantified at Rs.10,000/- payable by the

appellant to the respondent.

………...................................J.

[R.K. AGRAWAL]

….……..................................J.

[ABHAY MANOHAR SAPRE]

New Delhi;

March 6, 2017

25