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PETITIONER:

V.S. PALANICHAMY CHETTIAR FIRM

Vs.

RESPONDENT:

C. ALAGAPPAN & ANOTHER

DATE OF JUDGMENT: 03/02/1999

BENCH:

S.Saghir Ahmad, D.P.Wadhwa

JUDGMENT:

D.P. WADHWA, J.

Leave granted.

These are judgment- debtors two appeals against

common judgment dated December 24, 1997 of the Madras High

Court, passed in revision of the order of the executing

court dismissing execution applications filed by the

respondent decree-holders. The decrees are for specific

performance of two agreements of sale of certain immovable

properties.

The appellant, as owner of the property being two

plots of land, each measuring 60 x 40, entered into two

separate but similar agreements of sale dated February 16,

1980 with the respondent decree-holders. Since the

judgment-debtor failed to perform his part of the

agreements, decree-holders filed suits for specific

performance of the contract of sale in the court of the

District Munsif, Pudukottai. The suits were decreed in

favour of the respondents with a direction to them to

deposit the balance amount of consideration and with further

direction to the appellant to execute the sale-deeds. The

suits were decreed on January 31, 1983 and the balance

consideration amount was to be deposited on or before March

31, 1983. Against the judgment and order decreeing the

suits the appellant filed appeals in the High Court which

were dismissed on February 28, 1985. High Court while

dismissing the appeals of the judgment-debtor did not grant

any extension of time to the respondents for deposit of the

balance amount of consideration.

The respondent decree- holders filed applications for

execution of the decrees of specific performance of contract

after five years of the decrees by the trial court and three

years after dismissal of the appeals by the High Court. One

of the contentions raised by the appellant judgment-debtor

was that the respondent decree-holders had failed to deposit

the balance amount of consideration in terms of the decrees.

In one case the balance consideration amount was deposited

much after the period granted in the decree and in the other

case no amount of the balance consideration was at all

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deposited.

The executing court by order dated September 2, 1984

dismissed the execution applications of the respondent

decree- holders holding that they did not pay the amount of

balance consideration within the time stipulated under the

decrees.

Against this order two revisions were filed in the

High Court by the respondent decree-holders. It was not

disputed that there was delay in complying with the terms of

the decrees which were conditional. In the course of

proceedings before the High Court respondent decree-holders

filed separate applications seeking extension of time

granted under the decrees by the trial court to deposit the

amount. When the appellant judgment- debtor objected to the

filing of the application on the ground that these could not

be maintained in the High Court and no such application was

filed in the trial court, the High Court remitted the matter

to the executing court with a direction to treat the

applications as interlocutory applications in the execution

proceedings and to dispose them of in accordance with law.

At the same time High Court also said that in view of the

decision of this Court in Sardar Mohar Singh through Power

of Attorney Holder, Manjit Singh vs. Mangilal alias Mangtya

(1997 (2) M.L.J. 88 (SC) : 1997 (9) SCC 217), the Lower

Court has got power to extend the time.

Aggrieved the appellant judgment-debtor filed these

appeals.

Under Section 16 of the Specific Relief Act, 1963 (for

short the Act) there are certain grounds which bar the

relief of specific performance of the contract. This

Section, insofar it is relevant, is as under :-

16. Personal bars to relief.- Specific performance

of a contract cannot be enforced in favour of a person --

(a) .........

(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),-

(i) where a contract involves the payment of money, it

is not essential for the plaintiff to actually tender to the

defendant or to deposit in court any money except when so

directed by the court;

(ii) the plaintiff must aver performance of, or

readiness and willingness to perform, the contract according

to its true construction.

Under Section 28 of the Act after a decree for

specific performance of contract for the sale of immovable

property has been made and the purchaser decree-holder does

not, within the period allowed by the decree or such further

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period as the court may allow, pay the purchase money which

the court has ordered him to pay, the vendor judgment-debtor

may apply in the same suit in which decree is made, to have

the contract rescinded. Section 28 of the Act is as under

:-

28. Rescission in certain circumstances of contracts

for the sale or lease of immovable property, the specific

performance of which has been decreed. - - (1) Where in any

suit a decree for specific performance of a contract for the

sale or lease of immovable property has been made and

purchaser or lessee does not, within the period allowed by

the decree or such further period as the court may allow,

pay the purchase money or other sum which the court has

ordered him to pay, the vendor or lessor may apply in the

same suit in which the decree is made, to have the contract

rescinded and on such application the court may, by order,

rescind the contract either so far as regards the party in

default or altogether, as the justice of the case may

require.

(2) Where a contract is rescinded under sub-section

(1), the court --

(a) shall direct the purchaser or lessee, if he has

obtained possession of the property under the contract, to

restore such possession to the vendor or lessor, and

(b) may direct payment to the vendor or lessor of all

the rents and profits which have accrued in respect of the

property from the date on which possession was so obtained

by the purchaser or lessee until restoration of possession

to the vendor or lessor, and, if the justice of the case so

requires, the refund of any sum paid by the vendee or lessee

as earnest money or deposit in connection with the contract.

(3) If the purchaser of lessee pays the purchase money

or other sum which he is ordered to pay under the decree

within the period referred to in sub-section (1), the court

may, on application made in the same suit, award the

purchaser or lessee such further relief as he may be

entitled to, including in appropriate cases all or any of

the following reliefs, namely --

(a) the execution of a proper conveyance or lease by

the vendor or lessor;

(b) the delivery of possession, or partition and

separate possession, of the property on the execution of

such conveyance or lease.

(4) No separate suit in respect of any relief which

may be claimed under this section shall lie at the instance

of a vendor, purchaser, lessor or lessee, as the case may

be.

(5) The costs of any proceedings under this section

shall be in the discretion of the court.

In the present case no such application has been filed

by the respondent decree-holders before the trial court

seeking extension of time to deposit the balance amount

under the decrees. The applications which have been filed

in the High Court have been transmitted to the executing

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court with a direction to the executing court to dispose

them of by restoring the execution applications which had

been dismissed.

It was submitted by Mr. K.K. Mani, learned counsel

for the respondent decree- holders that this Court should

not interfere in the order of the High Court inasmuch as

matter has only been remanded to the executing court to

dispose of the applications for extension of time to deposit

the balance amount of consideration in terms of the decree

in accordance with law. Reliance was placed on the decision

of this Court in Sardar Mohan Singhs case (1997 (9) SCC

217). There cannot be any dispute with the proposition of

law laid in that judgment which states :-

From the language of sub-section (1) of Section 28,

it could be seen that the court does not lose its

jurisdiction after the grant of the decree for specific

performance nor it becomes functus officio. The very fact

that Section 28 itself gives power to grant order of

rescission of the decree would indicate that till the sale

deed is executed in execution of the decree, the trial court

retains its power and jurisdiction to deal with the decree

of specific performance. It would also be clear that the

court has power to enlarge the time in favour of the

judgment-debtor to pay the amount or to perform the

conditions mentioned in the decree for specific performance,

in spite of an application for rescission of the decree

having been filed by the judgment- debtor and rejected. In

other words, the court has the discretion to extend time for

compliance of the conditional decree as mentioned in the

decree for specific performance.

Again, while considering the provisions of Section 28

of the Act as applicable to the facts of the case before it

this Court in K. Kalpana Saraswathi vs. P.S.S.

Somasundaram Chettiar [AIR 1980 SC 512] said :

It is perfectly open to the court in control of a

suit for specific performance to extend the time for

deposit, and this court may do so even now to enable the

plaintiff to get the advantage of the agreement to sell in

her favour. The disentitling circumstances relied upon by

the defendant-respondent are off-set by the false pleas

raised in the course of the suit by him and rightly

negatived. Nor are we convinced that the application for

consideration and extension of time cannot be read, as in

substance it is, as a petition for more time to deposit.

Even so, specific performance is an equitable relief and he

who seeks equity can be put on terms to ensure that equity

is done to the opposite party even while granting the

relief. The final end of law is justice, and so the means

to it too should be informed by equity. That is why he who

seeks equity shall do equity.

In K.S. Vidyanadam & Ors. vs. Vairavan (1997 (3)

SCC 1) this Court referred to the circumstances to be

considered in exercising the discretionary power of the

Court to decree specific performance of agreement for the

sale of immovable property. The Court was of the view that

in spite of the fact that suit was filed within the period

of limitation as prescribed in Article 54 of the Limitation

Act, 1963, the Court can nevertheless see that even where

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time is not the essence of the contract, the plaintiff must

perform his part of the contract in reasonable time and by

looking at all the relevant circumstances including the

express terms of contract and nature of the property. The

case before the Supreme Court was an appeal by the

defendants-vendors who had suffered decree of specific

performance of agreement for sale of their immovable

property located in Madurai in the State of Tamil Nadu. The

Court noticed that in case of urban properties in India, it

is well-known that their prices have been going up sharply

over the last few decades. The Court then held as under :

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.

The Court relied upon the decision of the Constitution

Bench in Chand Rani vs. Kamal Rani [(1993) 1 SCC 519].

In N.P. Thirugnanam (Dead) By LRS. vs. Dr. R.

Jagan Mohan Rao & Ors. [(1995) 5 SCC 115] this Court

observed with reference to Sections 16[c] and 20 of the Act

that the continuous readiness and willingness on the part of

the plaintiff is a condition precedent to grant the relief

of specific performance and that this circumstance is

material and relevant and is required to be considered by

the Court while granting or refusing to grant the relief.

If 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 Court is not bound to grant

the relief which is discretionary merely because there was a

valid agreement of sale. It is equitable remedy and is in

the discretion of the Court which discretion, however, has

to be exercised according to the settled principles of law

and not arbitrarily.

In Ramankutty Guptan vs. Avara [(1994) 2 SCC 642] the

appellant was the judgment-debtor in a suit for specific

performance agreement for sale of immovable property. The

question before the Court was whether application under

Section 28 of the Act was maintainable on the execution side

in a decree passed in the same suit by the appellate court.

Plaintiff-respondents suit for specific performance though

dismissed by the trial court was decreed by the appellate

court which granted one month time to deposit the balance

amount of consideration. The judgment-debtor filed second

appeal in the High Court against the decree which was

dismissed. The decree-holder deposited the amount after the

time fixed by the appellate Court but before the second

appeal was dismissed. Decree- holder applied for execution

of the decree. The judgment-debtor filed an application in

these very proceedings under Section 28 of the Act for

rescission of the contract which had resulted in passing of

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the decree on the ground that the balance consideration was

not deposited within one month of the decree by the trial

Court. the Executing Court dismissed the application on the

ground that deposit had been made within the time while

holding that the application was not maintainable on the

execution side. The High Court on revision also held that

the application was not maintainable in the executing court.

This led the judgment-debtor to come to this Court. This

Court observed that when the decree specifies the time for

performance of the conditions of the decree, on its failure

to deposit the money, Section 28(1) itself gives power to

the court to extend the time on such terms as the court may

allow to pay the purchase money or other sum which the court

has ordered him to pay. The Court held, after noticing the

conflict of decisions by the Bombay High Court and the

Andhra Pradesh High Court, that when the court which passed

the decree and the executing court is the same, application

under Section 28 can be filed in the executing court.

However, where decree is transferred for execution to a

transferee executing then certainly the transferee court is

not the original court and the executing court is not the

same court within the meaning of Section 28 of the Act.

But when an application has been made in the court in which

the original suit was filed and the execution is being

proceeded with, then certainly an application under Section

28 is maintainable in the same court. Then dealing with the

contention of the judgment-debtor that deposit was not

within the time allowed by the appellate Court, the Court

said :

The question then is whether it is a fit case for our

interference. It is seen that the decree for specific

performance became final. While the second appeal was

pending, the balance consideration was deposited and no

steps have been taken to bring it to the notice of the High

Court that the respondent had committed default in

compliance of the appellate decree depositing within the

given time the balance consideration. Moreover, the

respondent has been in possession of the land for a long

time. The execution is on midway. Under these

circumstances, the command of Article 136 of the

Constitution is to draw the curtain and allow the

application to lie in quietus where it was laid and dismiss

the appeal.

In view of the decision of this Court in Ramankutty

Guptans case (supra) when the trial court and the executing

court are same, executing court can entertain the

application for extension of time though the application is

to be treated as one filed in the main suit. On the same

analogy, the vendor judgment-holder can also seek rescission

of the contract of sale or take up this plea in defence to

bar the execution of decree. One of the grounds on which

the trial court dismissed the execution application was that

the decree holder did not pay the balance of consideration

as per the sale agreement and also did not pay within the

time stipulated by the court in the decree. High Court

could have certainly gone into this question when

applications for extension of time was filed before it.

However, on the objection by the judgment- debtor, it chose

to send back the matter to the executing court for decision

on these applications, which was perhaps, in the

circumstances, was not correct procedure to adopt. But

then, at the same time, the High Court put shackles on the

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discretion of the executing court by observing that vendor

might have felt that after the appeal filed by the vendor

judgment-holder against the decree for specific performance

was disposed of they can even then deposit the amount or at

the time of seeking the execution of the sale deed.

The agreement of sale was entered into as far back on

February 16, 1980, about 19 years ago. No explanation is

forthcoming as to why the balance amount of consideration

could not be deposited within time granted by the court and

why no application was made under Section 28 of the Act

seeking extension of time of this period. Under Article 54

of the Limitation Act, 3 years period is prescribed for

filing the suit for specific performance of contract of sale

from the date of the agreement or when the cause of action

arises. Merely because a suit is filed within the

prescribed period of limitation does not absolve the

vendee-plaintiff from showing as to whether he was ready and

willing to perform his part of agreement and if there was

non-performance was that on account of any obstacle put by

the vendor or otherwise. Provisions to grant specific

performance of an agreement are quite stringent. Equitable

considerations come into play. Court has to see all the

attendant circumstances including if the vendee has

conducted himself in a reasonable manner under the contract

of sale. That being the position of law for filing the suit

for specific performance, can the court as a matter of

course allow extension of time for making payment of balance

amount of consideration in terms of a decree after 5 years

of passing of the decree by the trial court and 3 years of

its confirmation by the appellate court? It is not the case

of the respondent- decree holder that on account of any

fault on the part of the vendor- judgment-debtor, the amount

could not be deposited as per the decree. That being the

position, if now time is granted, that would be going beyond

the period of limitation prescribed for filing of the suit

for specific performance of the agreement though this

provision may not be strictly applicable. It is

nevertheless an important circumstance to be considered by

the Court. That apart, no explanation whatsoever is coming

from the decree-holder- respondents as to why they did not

pay the balance amount of consideration as per the decree

except what the High Court itself thought fit to comment

which is certainly not borne out from the record. Equity

demands that discretion be not exercised in favour of the

decree holder-respondents and no extension of time be

granted to them to comply with the decree.

These appeals are, therefore, allowed with costs.

Judgment of the High Court is set aside and that of the

executing court confirmed.