Ramakrishna Pillai, J.@mdashThe plaintiffs are in appeal. The appellants approached the court below for a decree for specific performance of an agreement to sell the suit properties. By the impugned decree, the court below refused the relief of specific performance to the appellants and only a decree for return of advance amount with interest was granted. In this appeal, the appellants are challenging the correctness of the impugned judgment and decree. Now the plaint allegations in brief:
Plaint mentioned property belonging to the respondents was agreed to be sold to the appellants by virtue of an agreement dated 14-11-2005 which was prepared in counterparts. The sale consideration was fixed at the rate of Rs. 5 lakhs per cent out of which, Rs. 50 lakhs was paid on the date of agreement itself and Rs. 25 lakhs was paid on 2-2-2006, as agreed. Thereafter, the respondents demanded another sum of Rs. 4.5 lakhs urgently and the said amount was also paid by the appellants to the respondents through one Ramesh on 28-7-2006. Though the said payment was assured to be acknowledged, the respondents failed to do so. Eight months'' time was prescribed for performance of the agreement. It was agreed that, a sum of Rs. 15 lakhs would be deducted as compensation from the total sale consideration for evicting one Madhavan who was holding a portion of the plaint schedule property under a Karaima right. In order to compute the balance sale consideration, the respondents had to measure out the property and satisfy the appellants, the actual extent of land available for sale. The notary attested copies of title deeds, previous documents, possession certificates and other allied documents, including non-encumbrance certificate for 30 years were to be handed over to the appellants by the respondents. The respondents were aware of the aforesaid facts and were bound to satisfy the appellants that the respondents were having absolute title and possession of the plaint schedule property and then only, the appellants were required to prepare the sale deed. The respondents were also liable to effect paper publication regarding the documents of title lost and to furnish affidavit to the effect that the property has not been encumbered or alienated. But they failed to abide by the terms of the contract. However, the appellants were always ready and willing to perform their part and demanded performance repeatedly. The respondents did not execute the agreement under the lame excuse of inability of procuring other houses for shifting their residence and extended time on such excuses. Expending more than Rs. 15 lakhs, the appellants themselves had purchased the Karaima right over a portion of the plaint item from the aforesaid Madhavan under the belief that the respondents would perform their part. There was a ''Daivasankalpa'' in the property which had to be removed at the instance of the respondents. That also was not done by them. In order to cover up their laches, the respondents caused to issue a notice dated 26-8-2006 on the appellants making false averments and rescinding the contract for which the respondents had no right. Appellants in turn caused to send a reply notice asking for specific performance. The respondents were not ready to execute the sale deed as demanded and hence, the suit.
2. The first respondent resisted the suit, contending as follows:
The appellants were not ready and willing to perform their part within the stipulated time. The sale agreement was cancelled by a notice in September 2006. The appellants failed to produce documents to evidence the purchase of the Karaima right. The purchase of the Karaima right would only suggest that the appellants could delay the purchase by obstructing possible sale of properties by the respondents to others. The allegation regarding the non-removal of ''Daivasankalpa'' is false. The appellants had scrutinised the title deeds at the time of execution of the agreement itself. The allegation that the appellants had paid Rs. 79.5 lakhs is false. They have paid only Rs. 75 lakhs. The property was measured and a plan was prepared. The allegation that the property was not measured is not true. There was no request from the appellants to execute the sale deed. The appellants do not have the balance sale consideration and the respondents strongly believe that the appellants are searching for a buyer for the property to make profits by resale.
3. The second respondent also resisted the suit by filing a separate written statement, raising almost the same contentions. The said respondent also stoutly denied the allegation regarding the payment of the further amount of Rs. 4.5 lakhs through Ramesan. He further contended as follows:
The property was measured jointly by the appellants and the respondents with the assistance of two private surveyors on 8-12-2005 and 9-12-2005 and it was found that the extent available to be sold was 79.02 cents. This was accepted by both sides as actual extent. A computer print of the plan was prepared by the appellants and handed over to the respondents. The allegation that the respondents prolonged the execution seeking time to shift the residence is false. Respondents had already made suitable arrangements to shift their residence. Notarised copies of documents were handed over to the appellants in March 2006 itself and the appellants had entered into the contract on satisfaction of the title and possession of the respondents. ''Daivasankalpa'' in the property had been shifted even prior to the agreement under the belief that the appellants would perform their part within time. The respondents had entered into other deeds to purchase the property only when it was realised that the appellants were trying to delay the transaction for want of funds. The contract was rescinded as per notice dated 26-8-2006. The appellants were engaged in real estate business. The respondents entered into agreement with the appellants under the belief that they would pay the money and purchase the property within the stipulated time. But the appellants were in search of buyers to make profit out of resale. Now the land value has gone up. The appellants are not entitled to get specific performance as prayed for.
4. The appellants later filed a replication with the permission of the court refuting the allegations in the written statements and asserting their willingness to perform their part.
5. The trial court, after raising proper issues for trial, permitted both sides to adduce their evidence. In the trial which followed, P.Ws. 1 and 2 as well as D.Ws. 1 and 2 were examined and Exts. A-1 to A-7, B-1 to B-24, and Exts. C-1 and C-2 were marked.
6. The trial court, after considering the evidence, found that the appellants have failed to perform their obligations under the agreement for sale and, therefore, refused to grant a decree for specific performance. The court also found that the appellants had paid a sum of Rs. 75 lakhs only towards advance and granted a decree in favour of the appellants to realise a sum of Rs. 75 lakhs paid towards sale consideration, with interest at the rate of 6% per annum from 26-8-2006 till realisation. Against this, the appellants have preferred this appeal.
7. We have heard Mr. T. Krishnanunni, the learned Senior Counsel appearing for the appellants and Mr. P.B. Krishnan, the learned counsel for the respondents quite in extenso. We have also perused the impugned judgment and other lower court records.
8. Ext. A-1 is the sale agreement, the execution of which is admitted by the respondents. Ext. A-1 is dated 14-11-2005. Eight months'' time was prescribed for the performance of the agreement. In Ext. A-1, the area of the plaint schedule property is described as 77.60 cents approximately ((sis) 77.60 cent). The sale consideration was fixed as Rs. 5 lakhs per cent. It is stated in Ext. A-1 that the respondents have to measure out the property and satisfy the appellants regarding the actual extent of the land available for sale. The further condition is that, the notary attested copies of the title deeds, previous documents, possession certificate and other allied documents, including non-encumbrance certificate for 30 years are to be handed over to the appellants by the respondents before execution of the sale deed.
9. It is also stated in Ext. A-1 that the appellants were made to believe that the ''Daivasankalpa'' in the plaint schedule property was removed at the instance of the respondents even before the execution of Ext. A-1. As per Ext. A-1, an implied duty was cast upon the appellants to evict one Madhavan who was holding the plaint schedule property under a Karaima right. We say this because, it was agreed in Ext. A-1 that a sum of Rs. 15 lakhs would be deducted as compensation to the appellants, for doing so.
10. While the appellants allege that none of the conditions made mention of above were performed by the respondents, the respondents would contend that they had performed their part and the appellants were not ready and willing to perform their part to execute the agreement. It is alleged by the respondents that the appellants were not having sufficient funds to get the sale deed executed in their name, within the time frame of eight months from the date of Ext. A-1.
11. The trial court accepted the contentions of the respondents and found that the appellants were not ready and willing to perform their part, as agreed, within the stipulated time-limit. Hence, though Ext. A-1 agreement was upheld, only the return of the advance sale consideration was decreed.
12. Now, let us examine whether the respondents had satisfied the conditions regarding the measurement as well as the handing over the documents within the time frame of eight months. Ext. A-2 is the copy of the notice caused to be served at the instance of the respondents on the appellants rescinding the contract alleging that the appellants had not performed their part. Ext. A-2 is not denied by the respondents. Ext. A-2 is dated 26-8-2006. There is a blunt statement in Ext. A-2 that the respondents had done whatever necessary to be done by them as per Ext. A-1. The relevant portion reads as follows:
(My clients state that though the 1st party after making arrangements as stated in the agreement demanded the IInd party to get the deed registered after paying the balance consideration you, the IInd party have not shown necessary interest to do so or to register the sale deed.)
13. It is relevant to note that there is no specific averment that the property was measured and the appellants were convinced about the actual extent of land available for sale. It is true that the lawyer''s notice need contain only the broad foundation of the case projected by the seller. However, the absence of a specific averment in Ext. A-2 notice regarding the measurement of the property assumes relevance in the context of considering whether the respondents had performed their part.
14. The specific case of the respondents is that a Surveyor by name Kamarudheen from the side of the appellants and another Surveyor by name Somanathan from the side of the respondents had effected the measurement of the property on 8-12-2005 and 9-12-2005 respectively.
15. When a specific question regarding this was put to the first appellant, who was examined as P.W. 1, he pleaded ignorance regarding such a measurement. The court below was of the view that as there was no specific denial, the same has to be reckoned as an admission by the appellants. The Surveyor said to have been engaged by the respondents was examined as D.W. 2. He would depose that the Surveyor deputed by the appellants had measured the property. According to D.W. 2, he had supervised the work. He would also say that the respondents were supplied with the site plan after measurement.
16. Ext. B-1 is the site plan which is said to have been prepared accordingly. Ext. B-1 is a computer print showing the measurements of the boundaries as well as the structures available in the plaint schedule properly. As per Ext. B-1, the plaint item is having an extent of 79.20 cents. Ext. A-2 notice, which was issued on 26-8-2006, contains the description of the property, which is the subject-matter of sale. In Ext. A-2, the measurement is shown as 77.6 cents. It is here, the story put forward by the respondents through D.W. 2, that the property had been measured on 8-12-2005 and 9-12-2005 resulting in Ext. B-1, becomes unbelievable.
17. Had there been a measurement on 8-12-2005 and 9-12-2005 as alleged and the exact extent of property made mention of in Ext. B-1 (79.20 cents), was confirmed, necessarily the same would have found a place in Ext. A-2 notice. Here, the case put forward by the respondents that they have satisfied the appellants regarding the actual extent of land available for sale stands watered down. The court below proceeded on the assumption that the case put forward by the respondents is true for the sole reason that P.W. 1 during cross examination pleaded ignorance regarding measurement. The court below failed to take note of the crucial aspect that the measurement shown in Ext. B-1 (79.20 cents) which allegedly was arrived at after the measurement does not find a place in Ext. A-2 notice.
18. The trial court on the basis of Exts. B-2 and B-21 documents found that all the documents required to be made ready by the respondents other than non-encumbrance certificates for the periods before 1993, had already been with the respondents even at the time of creation of Ext. A-1. It was also found that since a substantial portion of the sale consideration had been parted with by the appellants, it cannot be said that the appellants were not satisfied regarding the genuineness of the deeds. Going by Ext. A-1, which is not at all disputed, it can be seen that on the date of the agreement the non-encumbrance certificates for a period of 30 years had to be handed over to the appellants. There is no acceptable legal evidence to show that this condition has been complied with by the respondents. Going by Ext. A-1, it can be seen that the respondents had to satisfy the aforesaid conditions. Then only, the appellants were duty bound to perform their part. The relevant portion of Ext. A-1 agreement reads as follows:
(As and when the 1st party identifies and demarcates the property to the satisfaction of the 2nd party, within 8(eight) months from today, in order to ascertain the balance amount of sale consideration after deducting the aforesaid advance amount, the 1st party shall register the sale deed/sale deeds in favour of the 2nd party with respect to the property described in the schedule given below as a whole or in parts at the cost of the 2nd party and shall give the possession thereof.)
(emphasis supplied)
19. The learned Senior Counsel appearing for the appellants invited our attention to the decision of the Apex Court in
20. The learned counsel for the respondents, per contra, inviting our attention to the decision of this Court in Muhammed v. Chandrika 2010 (3) KLT 306 would argue that the failure on the part of the plaintiff to prove his readiness and willingness would result in the dismissal of the suit for specific performance, notwithstanding the failure to perform a term of the contract by the defendant. In that case, it was observed that the contention raised by the defendant that the plaintiff failed to perform a particular term in the contract could be rejected by the court on a finding that the defendant committed breach in respect of that particular term in the contract. However, it was held that it does not mean that proof of breach of any of the terms of the contract by the defendant is proof of readiness and willingness on the part of the plaintiff, as provided in clause (c) of Section 1 of the Specific Relief Act. Therefore, it was held that the readiness and willingness on the part of the plaintiff has to be independently established to enable him to get a decree for specific performance.
21. The aforesaid observation becomes relevant where the contract contains two different streams of provisions of performance. Such a situation was considered by the Apex Court in
22. There may be instances, where the obligations imposed on the seller and the intending buyer are so arranged that performance by one is conditional on performance by the other. In the instant case which falls under the aforesaid category, clause (4) of Ext. A-1 agreement which is extracted above would clearly indicate that the appellants had to perform their part only on ascertainment of the actual extent of the land available for sale by a proper measurement. The obligation of the appellants to perform their part arises only when they are convinced of the exact extent of the suit property. Any attempt on the part of the respondents to enforce performance unilaterally in such a case would have the effect of varying the condition in the agreement, which they cannot do so. That means, where the performance of the intending buyer is conditional upon certain acts to be performed by the seller, the buyer need perform his part only after those acts are performed by the seller. Here, the appellants knew that the respondents are not willing to fulfill the promise only on getting Ext A-2 notice.
23. From the evidence discussed above, we come to the conclusion that the story of measurement sought to be proved through D.W. 2 does not inspire confidence. Therefore, the respondents cannot now turn around and contend that the time was the essence of the contract and the appellants were not ready and willing to perform their part of the contract within the stipulated time of eight months.
24. To hold that the appellants were not ready and willing to perform their part, the trial court relied upon the fact that the appellants have not produced sufficient documents to show that they were having the balance sale consideration. It is settled law that it is not necessary that the entire amount of consideration should be kept ready and the plaintiffs must file proof in respect thereof. [See the decision of the Apex Court in
25. In this case, the appellants, by necessary implication in Ext. A-1, were bound to do what was necessary for evicting one Madhavan, who was holding a portion of the plaint schedule property under a Karaima right It was agreed in Ext. A-1 agreement that a sum of Rs. 15 lakhs was to be deducted as compensation from the total consideration, for making the eviction.
26. The respondents had admitted that the appellants had purchased the right of Karaima holder mentioned in Ext. A-1. But, the lower court was of the view that the appellants had not produced the documents to prove the purchase and that itself would expose the respondents'' mala fides. It was also observed that the mere fact that the appellants purchased the Karaima right would not in any way help them to hold that they were ready and willing to perform their obligation under Ext. A-1. It is too idle to believe that the appellants, who had parted with the major portion of the sale consideration, would expend another sum of Rs. 15 lakhs, for purchase of the Karaima rights unless they had the real intention to perform the contract.
27. The learned Senior Counsel for the appellants submitted that the property so obtained by the appellants from Madhavan lies somewhere in the middle of plaint schedule property and if the suit is not decreed, the appellants will not be able to enjoy that portion which is not having any access. The learned Senior Counsel, in the light of the decision of the Apex Court in
28. Here, we would like to observe that courts must not lose sight of the fact that parties have entered into a solemn agreement and chose to bind themselves to its terms. We are of the view that neither party be permitted to resile from his commitment simply because, he would now get a better deal elsewhere. If such a course were to be permitted then the sanctity of a binding contract would be thrown off. We say this, in the light of the statement made by the learned counsel for the respondents that the respondents had to suffer huge loss on account of the failure on the part of the appellants, as there is considerable increase in the price of suit land. But, we are of the view that even if it is true, it cannot be a ground to deny decree of specific performance.
29. It is well-settled that merely because the prices have risen during the pendency of the litigation, it cannot be a ground for denying the relief of specific performance. We also bear in mind the decision of the Apex Court in Faquir Chand and another v. Sudesh Kumari(7) which would indicate that suit for specific performance would be decreed by granting additional compensation to the defendants.
30. At this point, the learned counsel for the respondents inviting our attention to the decision of the Apex Court in
31. Of course, instances are there where compensation has been awarded to the vendee to make good the loss occurred to him due to lapse of time. But in the instant case, we cannot say that the respondents have suffered any such loss. Apart from enjoying the plaint schedule property, the respondents were keeping a portion of the sale consideration which is a large sum. It is common knowledge that any wise investment of the said sum would fetch interest atleast at the rate of 10% annually. We would hasten to add that there was laches on the part of the respondents in performing their part.
32. Though the trial court accepted the plea of the appellants, that they have paid a total sum of Rs. 75 lakhs to the respondents towards sale consideration, the trial court did not accept the plea that they have paid another sum of Rs. 4.5 lakhs on 28-7-2006. The lower court is justified in rejecting the plea of the subsequent payment of Rs. 4.5 lakhs as there is no documentary evidence in support of the same. The payment of Rs. 50 lakhs on the date of the agreement and the payment of Rs. 25 lakhs on 2-2-2006 is evidenced by Ext. A-1 agreement and the endorsement therein. Therefore, we uphold the finding of the trial court regarding the payment of sale consideration and hold that the amount of sale consideration so far paid by the appellants to the respondents is only Rs. 75 lakhs.
33. The appellants are entitled to deduct Rs. 15 lakhs from the sale consideration as they have evicted one Madhavan from the property who was holding a Karaima right. The same stands admitted and Ext. A-1 provides for such a deduction. On a totality of the entire facts and circumstances of the case, we are of the view that this is a fit case where a decree of specific performance has to be granted to the appellants as there is overwhelming evidence to show that the appellants are ready and willing to perform their part.
In the result, we allow the appeal as under:
(i) The impugned judgment and decree passed by the trial court are modified. In supersession of the judgment and decree the appellants are granted a decree of specific performance as prayed for.
(ii) Within one month from today the respondents shall fix a date for measuring out the plaint schedule property and satisfy the appellants regarding the exact extent of the plaint schedule property. Notice regarding the date of measurement shall be given to the appellants well in advance.
(iii) Within one week from the date of the measurement, the appellants shall deposit the balance sale consideration before the court below with notice to the respondents, as to the deposit.
(iv) Within one month from the date of receipt of the notice as to the deposit, the respondents shall execute the sale deed in respect of the plaint schedule property, showing the correct extent, in favour of the appellants, at appellants'' costs. Before executing the sale deed, the respondents shall satisfy the appellants that the property is free from encumbrances.
(v) After the execution of the sale deed, the respondents can withdraw the balance sale consideration deposited by the appellants before the court.
(vi) If the respondents fail to execute the sale deed as ordered above within the specified time limit, on the expiry of the same, the appellants can move the court to execute a sale deed in their name by the court on behalf of the respondents.
(vii) The appellants are entitled to recover their costs in the original suit as well as in the appeal
