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CASE NO.:

Appeal (civil) 2583 of 2005

PETITIONER:

Umabai & Anr.

RESPONDENT:

Nilkanth Dhondiba Chavan (Dead) by Lrs. & Anr.

DATE OF JUDGMENT: 13/04/2005

BENCH:

H.K. Sema & S.B. Sinha

JUDGMENT:

J U D G M E N T

[Arising out of S.L.P. (Civil) No. 23864 of 2004]

S.B. SINHA, J :

Leave granted.

This appeal is directed against a judgment and order dated 3.9.2004

passed by the Bombay High Court in Letters Patent Appeal No.102 of 1990

whereby and whereunder the Appeal preferred against a judgment and order

dated 30.1.1990 passed by a learned Single Judge of the said Court in First

Appeal No.120 of 1984 affirming the judgment and decree dated 5.9.1983

passed by the Civil Judge, Sr. Division, Kolhapur in Special Suit No. 1 of

1979; was allowed.

The basic fact of the matter is not in dispute. The suit premises

measure about 346 sq. yds. of land. Structures consisting of ground and

first floor were built thereupon. The Appellant No.2 was a tenant in the

ground floor of the said building.

A decree at the instance of his creditor was said to have been passed

against the plaintiff-Respondents herein. The First Respondent with a view

to repay the said loan entered into an agreement of sale with the Appellants

on or about 30.12.1970. In terms of the said agreement, the plaintiff-

Respondents agreed to sell the said property for a consideration of

Rs.45,000/-, out of which a sum of Rs.3,434/- was paid by way of earnest

money and the rest being sum of Rs. 40,076/- was to be disbursed to the

creditors. Pursuant to or in furtherance of the said agreement, the plaintiff-

Respondents executed a deed of sale in favour of the First Appellant herein.

An agreement of sale was also entered into by and between the parties on the

same day, in terms whereof the First Appellant agreed to reconvey the said

property in favour of the First Respondent on receipt of the said sum of

Rs.45,000/- between a period of seven years and nine years from the said

date. The Respondents treating the said transaction to be one of mortgage

filed an application purported to be under Sections 4(e) and 7(f) before the

competent authority under the Maharashtra Debt Relief Act, inter alia, for a

declaration that he is a 'debtor' thereunder and his debt should be

discharged. While the said application was pending, a notice was sent by the

plaintiff-Respondents to the Appellants herein wherein the aforementioned

transaction was said to be a mortgage. A plea was raised therein that the

said debt stood discharged under the provisions of the Maharashtra Debt

Relief Act. It was contended that the First Appellant herein had already

received more than Rs.50,000/- out of the income from the said property by

way of rent. Despite the same, the Appellants asked for specific

performance of the said agreement of re-conveyance. In her reply, the First

Appellant offered to reconvey the property on receipt of a further sum of

Rs.4,646/-, which allegedly was spent by her towards repairs of the house.

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Thereafter, the suit was filed by the Respondents herein in the Court of

Civil Judge, Senior Division at Kolhapur on 30.12.1978 which was marked

as Civil Suit No.1 of 1979. The Respondents in their plaint raised a plea that

the value of the suit property was about Rs.2 lacs but despite the same with a

view to discharge their dues they requested the Appellants to advance a loan

of Rs.50,000/- and to which the Appellants agreed for a sum of Rs.45,000/-;

whereupon the suit property was agreed to be mortgaged. It was further

contended that as the Appellants did not possess a money lenders' licence

and the period of repayment was large, the parties agreed that the

Respondents would execute a deed of mortgage by way of conditional sale;

but the said document was termed as a deed of sale wherein a clause of re-

conveyance was to be incorporated. However, such condition having

mistakenly been not mentioned in the deed of sale and which having been

noticed, the First Appellant entered into an agreement of re-conveyance of

the suit property in the name of the Respondents on the same day. Both the

deeds were said to be part of the same transaction and in fact, it was

categorically averred that the "sale deed transaction" is a "mortgage

transaction". As regard readiness and willingness on the part of the

Respondents, it was averred in the plaint:

"Accordingly to the conditions in the agreement

Plaintiff was and is ready to pay the amount to defendant.

And also the Plaintiff is and was ready to bear the cost of

reconveyance deed. According to the agreement Plaintiff

is and was ready to prepare the reconveyance deed\005"

In the said suit, the plaintiff-Respondents prayed for the following

reliefs :

"(a) The defendant no.1 be ordered to prepare the sale

deed of the suit property and get it registered as per

the agreement. The Plaintiff will pay the amount

when the order is passed.

(b) The sale deed be prepared in the plaintiff's name

through the Honourable Court if the defendant

no.1 denies the same.

(c) According to the mortgage document at sr. no.7

dated 2.11.1971, the suit property be mortgaged

Relief and be given in the possession of the

Plaintiff.

(d) The declaration be passed under the provision of

Mumbai Debt Relief Act that the Plaintiff has been

debt released and the possession of the debt

released suit property be given to the plaintiff.

(e) If not done as mentioned above, then the

accounting of mortgage be done and whatever

amount remains be given to the Plaintiff or else

Plaintiff be ordered to pay the amount to defendant

no.1 and the reconveyance deed for the mortgage

relief be made in the name of the plaintiff by the

defendant on denial it should be done through the

court and possession of suit property be given to

the plaintiff.

(f) The Plaintiff be allowed to amend or alter the

plaint, if necessary."

The Appellants, however, in their written statement denied and

disputed the contentions raised in the Plaint. It was averred that the

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transaction was for a sale with an agreement of reconveyance. The

Appellants denied and disputed that the First Respondent was 'ready to act

as per the agreement'. It was contended that he never offered any amount to

the Appellants. It was further contended :

"\005But plaintiff did not take any steps to reconvey the

sale deed as per the notice of the plaintiff. But the

plaintiff did nothing. So the Plaintiff has committed a

breach of agreement and on that count suit may kindly be

dismissed. On the contrary Plaintiff had taken a stand

that the suit transaction is mortgaged and from rent

received the amount has been satisfied such a wrong and

false stand was taken by the Plaintiff. Also before the

Tahsildar proceeding was initiated saying that the

property is redeemed (Property is released from the debt)

from the total behaviour of plaintiff it cannot be said that

Plaintiff was ready to fulfill the terms of agreement."

The Trial Court dismissed the said suit holding (i) the suit property

was not undervalued; (ii) consideration of Rs.45,000/- mentioned in the

document was not inadequate; (iii) the transaction was one of sale and not of

mortgage; (iv) the suit property was not self-redeemed under the

Maharashtra Debt Relief Act; (v) the plaintiffs were not ready and willing to

perform their part of contract; and (vi) the defendants had spent a sum of

Rs.4,646/- over the repairs of the suit property.

Before the High Court, the First Respondent herein gave up the plea

that he was a debtor in terms of the Maharashtra Debt Relief Act. The

learned Single Judge of the High Court while holding that the transaction

was that of sale and not mortgage proceeded also to consider as to whether

the transaction was a mortgage or not. As regard the plea of purported

readiness and willingness on the part of the Respondents, it was opined :

"\005It will not be open to the plaintiff to put his own

construction on the terms but he would be bound by the

terms as determined by the Court. It will not be open to

the plaintiff to vary the terms according to his

interpretation and yet claim specific performance. In the

present case the plaintiffs set up a plea under the

Maharashtra Debt Relief Act. In other words, the

plaintiffs sought to contend that their debt under the suit

transaction was discharged under the Maharashtra Debt

Relief Act. They were, therefore, not liable to pay and

yet claim reconveyance. This is not the conduct of a

party who is expected to perform his part of the terms

and conditions of the contract of repayment of

Rs.45,000/-. The first plaintiff had applied under the

aforesaid Act to the Mamlatdar for a declaration that he

was a debtor and that the debt had been discharged. He

had engaged an Advocate in those proceedings. When

the present suit was filed, the plea about the aforesaid

proceedings was set up in the forefront and a conditional

offer to pay was made subject to the result of those

proceedings. In the alternative, the plaintiffs set up a

case of a mortgage which case I have found as not proved

both on facts as also in law. The plaintiffs averred that

the entire mortgage debt had been paid up from out of the

income of the property. They offered to pay if any

amount was found due on taking accounts. In my

judgment, the aforesaid rival pleas set up by the plaintiffs

disentitle them to a decree for specific performance. By

setting up these rival pleas they have exhibited their

unwillingness to make an unconditional offer to pay

which was a pre-requisite condition in the agreement of

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reconveyance where it was provided that, if after the

period of 7 years and within the period of 9 years, the

plaintiff paid the amount of Rs.45,000/- along with

incidental charges of the sale deed, the defendants would

reconvey the property\005"

The Division Bench of the High Court, however, by reason of the

impugned judgment reversed the said findings holding that although

evidences were led to show that the amount of Rs.45,000/- paid by the

Appellants to the Respondents was a loan but having regard to Section 58(c)

of the Transfer of Property Act, the document could not be construed to be a

deed of mortgage.

The Division Bench differed from the learned Single Judge and the

learned Trial Judge on their finding as regard valuation of the property

holding that the Respondents had proved that the sale-deed was under-

valued, observing :

"\005From the fact that the agreement for reconveyance

provided for the payment of Rs.45,000/- after 7 years and

before nine years by itself would indicate that the

transaction was much more than a mere deed of

conveyance. No interest was provided for. It is in these

circumstances that the court must consider whether the

discretion should be exercised in favour of the Plaintiff."

As regard readiness and willingness on the part of the Respondents to

perform their part of contract in terms of the said agreement of reconveyance

dated 1.1.1971, the Division Bench came to the conclusion that the plaintiff-

Respondents had pleaded and proved the said fact.

Mr. Ajit S. Bhasme, learned counsel appearing on behalf of the

Appellants, in support of the appeal would urge that the Division Bench of

the High Court clearly erred in holding that the Respondents were ready and

willing to perform their part of contract. According to the learned counsel,

the plea taken by the Respondents that the amount of debt stood satisfied

from the income therefrom by way of rent and, thus, the debt stood

discharged was wholly inconsistent with a plea of readiness and willingness.

Totality of circumstances, the learned counsel would contend, vis-`-vis the

conduct of the parties would be relevant for determining as to whether the

plaintiff-Respondents have been able to satisfy the court as regard

fulfillment of the conditions laid down under Section 16(c) of the Special

Relief Act, 1963.

Mr. Bhasme would submit that a manifest error had been committed

by the Division Bench of the High Court in arriving at the finding that the

plaintiff-Respondents pleaded and proved that they had all along been ready

and willing to perform their part of contract; without taking into

consideration that they initiated proceedings before the competent authority

under the Maharashtra Debt Relief Act and raised insufficient plea in that

behalf in the notice dated 9.6.1978 and furthermore made clear averments in

the plaint that they were debtors and their debt stood discharged.

The learned counsel would contend that from a perusal of the plaint, it

would appear that the plaintiffs made a conditional offer which does not

satisfy the requirement of Section 16(c) of the Specific Relief Act. In

support of the said contention, the learned counsel would relied upon Prem

Raj vs. D.L.F. Housing & Construction Pvt. Ltd. & Another [(1968) 3 SCR

648], Mahabir Prasad Jain vs. Ganga Singh [(1999) 8 SCC 274], Pushparani

S. Sundaram and Others vs. Pauline Manomani James (Deceased) and

Others ([(2002) 9 SCC 582], Manjunath Anandappa Urf Shivappa Hanasi

vs. Tammanasa and Others [(2003) 10 SCC 390] and Pukhraj D. Jain and

Others vs. G. Gopalakrishna [(2004) 7 SCC 251].

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Mr. Bhasme would submit that the Division Bench had wrongly

interfered with the concurrent findings of fact arrived at by the two courts.

Mr. A.V. Sawant, the learned Senior Counsel appearing on behalf of

the Respondents, on the other hand, would contend that there is no limitation

as regard exercise of jurisdiction by a Division Bench of the High Court

while entertaining a Letters Patent Appeal as in such an appeal, the Court is

entitled to consider the questions of both fact and law. Reliance, in this

behalf, has been placed on Smt. Asha Devi vs. Dukhi Sao and Another

[(1974) 2 SCC 492].

Mr. Sawant would submit that the plea that a transaction is a mortgage

vis-`-vis an ostensible sale cannot be said to be fraudulent nor dishonest

which would debar the court from granting an equitable relief for specific

performance of contract.

The learned counsel would argue that the Trial Judge as also the

learned Single Judge of the High Court overlooked the pleadings of

Respondents in the plaint as also the evidence adduced in this behalf as

regard readiness and willingness on their part of contract and, thus, the

Division Bench of the High Court cannot be said to have committed any

error in interfering therewith. Readiness and willingness to perform one's

part of contract must be judged, Mr. Sawant would submit, upon taking into

consideration all the attending circumstances as also the conduct of both the

parties and, therefore, it is not necessary to deposit the amount in court or to

be possessed of the requisite amount at all times. Strong reliance, in this

behalf, has been placed on The Bank of India Ltd. and Others vs. Jamsetji

A.H. Chinoy and Messrs. Chinoy and Co. [AIR (37) 1950 PC 90], Nathulal

vs. Phoolchand [(1969) 3 SCC 120], Smt. Indira Kaur and Others vs. Sheo

Lal Kapoor [(1988) 2 SCC 488], Tamboli Ramanlal Motilal (Dead) by Lrs.

vs. Ghanchi Chimanlal Keshavlal (Dead) by Lrs. And Another [(1993) Supp.

(1) SCC 295]; and Mushir Mohammed Khan (Dead) by Lrs. Vs. Sajeda

Bano (Smt.) and Others [(2000) 3 SCC 536].

It may be true that level of a document is not decisive. A true nature

of transaction must be determined having regard to the intention of the

parties as well as the circumstances attributing thereto as also the wordings

used in the document in question.

In this case, admittedly, two documents were executed on the same

day. In view of the express provisions contained in Section 58(c) of the

Transfer of Property Act, indisputably the transaction in question was not a

mortgage by way of conditional sale.

There exists a distinction between mortgage by conditional sale and a

sale with a condition of repurchase. In a mortgage, the debt subsists and a

right to redeem remains with the debtor; but a sale with a condition of

repurchase is not a lending and borrowing arrangement. There does not

exist any debt and no right to redeem is reserved thereby. An agreement to

sell confers merely a personal right which can be enforced strictly according

to the terms of the deed and at the time agreed upon. Proviso appended to

Section 58(c), however, states that if the condition for re-transfer is not

embodied in the document which effects or purports to effect a sale, the

transaction will not be regarded as a mortgage. [See Pandit Chunchun Jha

vs. Sheikh Ebadat Ali and Another (1955) 1 SCR 174, Shri Bhaskar

Waman Joshi and Others vs. Shri Narayan Rambilas Agarwal (deceased)

and Others (1960) 2 SCR 117], K. Simrathmull vs. Nanjalingiah Gowder,

AIR 1963 SC 1182; Mushir Mohammed Khan (supra); and Tamboli

Ramanlal Motilal (supra)],

The plaintiff in a suit for specific performance of contract may raise

an alternative plea that the transaction is a mortgage by way of conditional

sale but he must be ready and willing either to repay the debt or pay the

amount of consideration as agreed upon. In the instant case, the First

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Respondent herein, however, raised a specific plea that he was a debtor and

that the deed of mortgage was executed only because the Appellants were

not licensed money lenders. He not only approached the competent

authority under the Maharashtra Debt Relief Act for a declaration that he

was a debtor and stood discharged from his debt, but also in the plaint he

sought for a decree for possesion of the suit land on the premise that the

provisions of the Maharashtra Debt Relief Act were attracted. He even

asked for a decree of accounting.

It may be true that the plaintiff had made alternative prayers of

specific performance of the agreement of reconveyance and redemption of

mortgage but it appears that the plaints starts with the description of the

mortgage property.

In the plaint, the plaintiffs averred :

"2\005The sale deed and the agreement are two documents

of the same transaction. They are written in same

meeting and registered on same day. Sale deed

transaction is a mortgage transaction\005\005"

"3. The Plaintiff as agreed wrote a sale deed in the name

of defendant no.1 on 1.1.1971 as a security to the loan\005"

After reciting the relevant stipulations contained in the registered

deed of agreement of sale to the effect that the First Appellant would

reconvey the suit property in his name and got a document registered, it was

averred :

"Accordingly to the conditions in the agreement Plaintiff

was and is ready to pay the amount to defendant. And

also the Plaintiff is and was ready to bear the cost of

reconveyance deed. According to the agreement Plaintiff

is and was ready to prepare the reconveyance deed\005"

However, from paragraph 6 onwards, a plea as regard creation of a

mortgage was raised specifically contending :

"(7). Plaintiff is a debtor under Mumbai Debt

Relief Act. According to the Plaintiff the mortgage

amount in the said document has been shunked.

Therefore Plaintiff prays that accordingly it be decided.

(8) If not decided as above then the accounting

of the mortgage property shall be done under the

provisions of Mumbai Money Lending Act. The

defendant has earned a large amount by giving the

mortgage property on rental basis. After the accounting

whatever amount remains for paying or taking

accordingly the Plaintiff is ready to give and take."

It was further averred :

"The Plaintiff prays that if it is not done as

mentioned above then the amount of Rs.45,000/- which

the Plaintiff is ready to pay to the defendants be given to

the defendant and the Plaintiff be given the possession of

mortgage relief suit property with necessary documents."

Reading the plaint as a whole, it becomes evident that the First

Respondent principally raised a contention that the transaction was of

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mortgage and the sale stood redeemed and he was discharged from the debt.

He moreover prayed for a decree for accounting, but contended that only in

the event, such prayer is not granted, he was ready to pay the defendants the

said sum of Rs.45,000/- The averments made in the pleadings must be

construed reasonably and so read the statement made as regard purported

readiness and willingness to pay the stipulated amount to the defendants

according to the conditions mentioned in the agreement cannot be read in

isolation.

In his examination-in-chief although he stated :

"\005I am and I was ready to pay the consideration as per

the agreement. I am ready to pay the consideration

amount of Rs.45,000/-. I was also ready to pay the said

sum. I am also ready to pay the costs of the registration

of the sale deed".

but in his cross-examination, he admitted :

"I am not doing any business or work, since last 10

years. I have no source of income. I have no bank

account. I am not to receive any amounts from any one.

I have no amount with me. I am money less since last 10

years. At the time of giving notice (9.6.1978) I have no

my own accounts. It is not true to say that I was never

ready and willing to pay the sums of the defendants, for

the reconveyance of the suit house."

The learned trial Judge further noticed the following statement of te

plaintiffs in paragraph 18 of the cross-examination :

"It is my prayer in the suit that the suit property is

to redeemed without any amount being given, as the said

sum is already satisfied out of the income of rent,

received by the Defendant. It is also my prayer that

account of dues be taken and if necessary, I would pay if

any dues remained unsatisfied. It is also my say that the

suit transaction is of mortgage nature."

(Emphasis supplied)

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 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.

In terms of Form Nos. 47 and 48 appended to Appendix A of the

Code of Civil Procedure, 'the plaintiff must plead that he has been and still

is ready and willing specifically to perform the agreement on his part of

which the defendant has had notice' or 'the plaintiff is still ready and willing

to pay the purchase-money of the said property to the defendant'. The offer

of the plaintiff in the instant case is a conditional one and, thus, does not

fulfill the requirements of law.

In Bank of India (supra), it was held :

"\005It is true that plaintiff 1 stated that he was buying for

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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\005"

The said decision was, thus, rendered on its own fact. Such a

conclusion was arrived at having regard to the fact that ample material had

been brought on records. There must, thus, be some evidence to show that

the plaintiff could arrange for the amount stipulated for payment to the

vendor as and when called upon to do so. In this case no such evidence was

disclosed.

In Nathulal (supra), the contract was required to be performed in

certain sequence. Therein it was found that certain arrangements had been

made by the Respondent therein for paying the amount due. It was held that

so long as Nathulal did not carry out his part of contract, Phoolchand could

not be called upon to pay the balance of the price and it was in that situation

held that latter at all relevant time was ready to perform his part of contract.

The said decision also has no application in the instant case.

In Smt. Indira Kaur (supra), this Court merely held that for

determining the question as regard readiness and willingness on the part of

the plaintiff to perform his part of contract, the Court must examine the

position of both the parties. This Court did not say, as was submitted by

Mr. Sawant, that the conduct of both the parties must be taken into

consideration. In that case, the defendant's contention that he had not

received the notice of the plaintiff was held to be incorrect, as despite his

alleged receipt of notice, he admitted to have visited the Sub-Registrar's

office on 16.8.1977. In that situation it was held that the defendant was not

ready and willing to perform his part of contract. It was held that as of fact

that the plaintiff had done what he could do. He went to the Sub-Registrar's

Office, he filed an application for recording his presence. The said decision,

therefore, has no application in the instant case.

On the other hand in Mahabir Prasad Jain (supra), it has been held :

"22. The way in which the respondent has been

instituting different proceedings in different fora within a

short time making inconsistent allegations shows that the

respondent has been abusing the process of court and not

come to court with clean hands. He is not entitled to get

any equitable relief under the Specific Relief Act."

In Pushparani S. Sundaram (supra), it was opined :

"\005Inference of readiness and willingness could be

drawn by the conduct of the plaintiff, the circumstances

in a particular case in other words to be gathered from the

totality of circumstances."

It was further held

"\005So far these being a plea that they were ready and

willing to perform their part of the contract is there in the

pleading, we have no hesitation to conclude, that this by

itself is not sufficient to hold that the appellants were

ready and willing in terms of Section 16(c) of the

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Specific Relief Act. This requires not only such plea but

also proof of the same. Now examining the first of the

two circumstances, how could mere filing of this suit,

after exemption was granted be a circumstance about

willingness or readiness of the plaintiff. This at the most

could be the desire of the plaintiff to have this property.

It may be for such a desire this suit was filed raising such

a plea. But Section 16(c) of the said Act makes it clear

that mere plea is not sufficient, it has to be proved."

In N.P. Thirugnanam (Dead) by Lrs. vs. Dr. R. Jagan Mohan Rao and

Others [(1995) 5 SCC 115], this Court held :

"\005The continuous readiness and willingness on the part

of the plaintiff is a condition precedent to grant the relief

of specific performance. This circumstance is material

and relevant and is required to be considered by the court

while granting or refusing to grant the relief. If the

plaintiff fails to either aver or prove the same, he must

fail. To adjudge whether the plaintiff is ready and willing

to perform his part of the contract, the court must take

into consideration the conduct of the plaintiff prior and

subsequent to the filing of the suit along with other

attending circumstances. The amount of consideration

which he has to pay to the defendant must of necessity be

proved to be available..."

Yet again in Manjunath Anandappa (supra), this Court held :

"27. The decisions of this Court, therefore, leave no

manner of doubt that a plaintiff in a suit for specific

performance of contract not only must raise a plea that he

had all along been and even on the date of filing of suit

was ready and willing to perform his part of contract, but

also prove the same. Only in certain exceptional situation

where although in letter and spirit, the exact words had

not been used but readiness and willingness can be culled

out from reading all the averments made by the plaintiff

as a whole coupled with the materials brought on record

at the trial of the suit, to the said effect, the statutory

requirement of Section 16(c) of the Specific Relief Act

may be held to have been complied with."

In Pukhraj D. Jain (supra), it was held :

"6. Section 16(c) of the Specific Relief Act lays

down 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 terms the

performance of which has been prevented or waived by

the defendant. Explanation (ii) to this sub-section

provides that the plaintiff must aver performance of, or

readiness and willingness to perform, the contract

according to its true construction. The requirement of this

provision is that the plaintiff must aver that he has always

been ready and willing to perform the essential terms of

the contract. Therefore, not only should there be such an

averment in the plaint but the surrounding circumstances

must also indicate that the readiness and willingness

continue from the date of the contract till the hearing of

the suit. It is well settled that equitable remedy of specific

performance cannot be had on the basis of pleadings

which do not contain averments of readiness and

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willingness of the plaintiff to perform his contract in

terms of Forms 47 and 48 CPC. Here Respondent 1

himself sent a legal notice rescinding the contract and

thereafter filed OS No. 801 of 1977 on 7-11-1977

claiming refund of the advance paid by him. In fact the

suit for recovery of the amount was decreed by the trial

court on 24-7-1985 but he himself preferred a revision

against the decree wherein an order of rejection of the

plaint was passed by the High Court. In such

circumstances, it is absolutely apparent that Respondent

1 was not ready and willing to perform his part of the

contract and in view of the mandate of Section 16 of the

Specific Relief Act, no decree for specific performance

could be passed in his favour. The trial court, therefore,

rightly held that the suit filed by Respondent 1 was not

maintainable."

Furthermore, the First Respondents had raised inconsistent plea in the

sense that he had categorically taken a standing that the debt stood

discharged. Such a plea was irreconcilable with the plea that he had all

along been ready and willing to perform his part of contract. It is in that

situation, the decision of this Court in Prem Raj (supra) is attracted wherein

it was held that although inconsistent reliefs by a party to the suit is

maintainable but it must be shown that each of such pleas is maintainable.

The plea of automatic redemption of mortgage and discharge from

debt raised on the part of the Respondents herein cannot stand with a plea of

readiness and willingness on his part to perform their part of contract.

The Division Bench of the High Court, thus, posed a wrong question

unto itself. It also failed to take into consideration the statement of the

plaintiff in his cross-examination and in particular paragraphs 12 and 19

thereof in their proper perspective. The statements made by the plaintiff

before the court, if read as a whole would clearly show that he was neither in

a position to raise any fund. He proceeded on the basis that he was not

required to pay any amount. The Division Bench furthermore misdirected

itself in holding :

"The test would be whether the Plaintiff was in a

position to pay the money on direction by the court and

not whether he had the money. No such question was

ever put to him to suggest that if he was called upon by

the Court to deposit the money, he had no means to

deposit the money or make it available for deposit.

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. The Division Bench furthermore considered irrelevant facts in

holding that the plaintiff deposited the amount of Rs.60,000/- in the Court of

Appeal to arrive at the conclusion that the plaintiff-Appellant was ready and

willing to perform his part of contract. Deposit of any amount in court at the

appellate stage by the plaintiffs by itself would not establish their readiness

and willingness to perform their part of the contract within the meaning of

Section 16(c) of the Specific Relief Act. It further erred in holding that the

mere fact that he did not have money at the time of issuance of the notice,

the day when plaint was filed or at the time of his evidence was of no

consequence in total disregard of statutory mandate contained in Section

16(c) of the Specific Relief Act. Similarly, the finding of the Division

Bench that the prayer for grant of specific performance of contract and in

the alternative for redemption of mortgage or cancellation of debt cannot be

said to be pleas which could not be raised or be a bar for the court to

consider to grant the relief of specific performance, cannot be accepted, as

pleas of specific performance of contract and cancellation of debt and/or a

decree for accounting are inconsistent.

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As regard the question as to whether the transaction was undervalued,

the Appellate Court committed a manifest error in taking into consideration

the fact that payment of Rs.45,000/- was to be made after 7 years and before

9 years without any interest is a circumstance to hold that discretion should

be exercised in favour of the plaintiff-Respondents.

In Sargunam (Dead) by Lr. Vs. Chidambram and Another [(2005) 1

SCC 162], this Court observed :

"In the case of Mademsetty Satyanarayana v. G.

Yelloji Rao, it has been held that the jurisdiction to

decree specific performance is discretionary and the court

is not bound to grant such relief merely because it is

lawful to do so; that in cases where one of the three

circumstances mentioned in Section 20(2) is established,

no question of discretion arises\005"

[See also M.V. Shankar Bhat and Another vs. Claude Pinto since

(Deceased) by Lrs. And Others. \026 (2003) 4 SCC 86].

It is furthermore trite that normally a court of appeal would not

interfere with a concurrent finding of fact which is based on appreciation of

oral evidence.

In Bank of India (supra) whereupon Mr. Sawant placed reliance, the

Privy Council held :

"Their Lordships are not unmindful of the great

weight to be attached to the findings of fact of a Judge of

first instance who sees and hears the witnesses and is in a

position to assess their credibility from his own

observation. For this reason they would be reluctant to

differ from the learned Judge in this instance if his

conclusion on the issue under consideration had turned

on the impression made by Jamsetji in the witness-

box\005."

Yet in Manjunath Anandappa (supra), it was held :

"It is now also well settled that a court of appeal

should not ordinarily interfere with the discretion

exercised by the courts below."

The question also came up for consideration in Collector of Customs,

Bombay vs. Swastic Woollens (P) Ltd. and Others [(1988) Supp. SCC 796]

"\005An appeal has been provided to this Court to oversee

that the subordinate tribunals act within the law. Merely

because another view might be possible by a competent

court of law is no ground for interference under Section

130-E of the Act though in relation to the rate of duty of

customs or to the value of the goods for purposes of

assessment, the amplitude of appeal is unlimited. But

because the jurisdiction is unlimited, there is inherent

limitation imposed in such appeals. The Tribunal has not

deviated from the path of correct principle and has

considered all the relevant factors. If the Tribunal has

acted bona fide with the natural justice by a speaking

order, in our opinion, even if superior court feels that

another view is possible, that is no ground for

substitution of that view in exercise of power under

clause (b) of Section 130-E of the Act."

[See also West Bengal Electricity Regulatory Commission vs. CESC

Ltd. (2002) 8 SCC 715 and Commissioner of Customs, Chennai vs. Adani

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Exports Ltd. and another (2004) 4 SCC 367]

It may be, as has been held in Asha Devi (supra) that the power of the

Appellate Court in intra court appeal is not exactly the same as contained in

Section 100 of the Code of Civil Procedure but it is also well-known that

entertainment of a Letters Patent Appeal is discretionary and normally the

Division Bench would not, unless there exist cogent reasons, differ from a

finding of fact arrived at by the learned Single Judge. Even as noticed

hereinbefore, a court of first appeal which is the final court of appeal on fact

may have to exercise some amount of restraint.

For the reasons aforementioned, the impugned judgment cannot be

sustained which is set aside accordingly. The appeal is allowed. In the facts

and circumstances of the case, however, there shall be no order as to costs.