Lakshmi Ammal vs Tulkarinai Alias Slkkandar Rowther

Krishnasami Nayudu, J.—The plaintiff-appellant''s suit for specific performance of an agreement of sale of the suit property was decreed by the trial Court, which decree was set aside in appeal by the Subordinate Judge of Indigo. The suit property consists of a house and site, the building being supported on a wall belonging to one Narayana'' swami Reddiar and the building itself was built by Ibrahim Rowther, whose representatives are the defendants. Under an agreement of Bale, Ex. A. 1. dated 9th April 1918 bra himself Rowther agreed to convey the building put up by him to Narayana swami Reddiar for a sum of Rs, 1250 whenever Narayanaswami Reddiar required the same after a period of seven years from the date of the agreement the sum of Rs. 1250 being fixed as the price of the building. On 30th November 1921 under Ex. A. 3, Narayanaswami Reddiar sold all his properties including his rights under the agreement, Ex. A. I to the plaintiff''s husband Raghava Reddi for a sum of Rs. 10,000. A sum of Rs, 1250 is stated to have been received by Narayanaswami Reddiar being part of the consideration of Rs. 10,000, for the sale under Ex, A. 3. Notices were sent by the plaintiff on 25th July 1947 to the 5th and 6th defendants, who are daughters of Ibrahimsa Rowther, calling upon them to execute a sale deed and he then instituted the present suit for specific performance. The defense was among others that the agreement was brought about by fraud and was devoid of consideration and that in any event the plaintiff by reason of the long delay and latches was not entitled to the discretionary remedy of specific performance. Both the Courts however repelled the plea as to the document having been obtained by fraud and undue influence. On the question as to the exercise of discretion by the Court granting specific performance in this case, the two Courts took different views, the appellate Court holding that the plaintiff, not having come within a reasonable time after the expiry of the period of seven year prescribed in the agreement, was not entitled to any relief. In support of his conclusion, the learned Subordinate Judge places reliance on the Privy Council decisions in 67 Ind. Cas. 569 (Privy Council) , and Bindu Prasad v. Kishori Saran A. I. B. 1929 P.C. 195=30 L.W. 34.. where it was pointed out that

Where a party claims specific performance of an agreement, and no time is fixed, it must be taken that the party must claim the relief within a reasonable time.

In the present case the 7 years'' period having expired in 1925, the view of the learned Subordinate Judge was that the plaintiff must have come to Court at least within three years from the expiry of the period ''fixed in the agreement. He was also of opinion that the property had appreciated in value and that on the date of the suit the value of the property would not have been less than Rs. 3000. On the question of valuation, however, the trial Court examined the contention of the defendants that the building which was in existence on the date of the agreement in 1918 was demolished and a new building was put up and found against him, and on the evidence held that no improvements to the property had been made and there was no reliable evidence to Support the plea that the building had appreciated in value. The opinion of the learned Subordinate Judge as to the increase in value is not based on evidence but on the supposition that house properties must have appreciated in value after this long lapse of nearly 30 years.

On behalf of the appellant reliance is placed on the recent Bench decision of our High Court reported in Sankaralinga v. Ratnaswami I. L. R. 1952 Mad. 508=65 L.W. 25., where it was held that in a suit for specific performance, the adequacy of the consideration for the contract must be decided as on the date of the contract, and the subsequent rise in prices will not be a relevant ground for refusing specific performance, that when once the contract is found to be valid, it is for the defendant to establish legal grounds for refusing specific performance under the discretionary power recognized by S. 22 of the Specific Relief Act, that the term "hardship on the defendant" in S. 22 is used in the sense of some collateral hardship and not merely to mean the diminution of the purchase money and that waiver or abandonment of the right to specific performance cannot be inferred merely from latches or delay in the institution of the suit. In that case, the agreement was dated 20.h March 1943, the final demand for the execution of the sale deed was made on 21st January 1946, and the suit was instituted on 20th February 1946. It was found that specific performance could not be refused under S. 22 (2) of the Specific Relief Act.

S. 22 (2) provides that where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance, would involve no such hardship on the plaintiff, the Court may properly exercise a discretion not to decree specific performance.

The word "hardship" in S. 22 (2) of the Specific Relief Act has been given the same meaning as is given to it by Fry in his work on ''''Specific Performance" which is quoted with approval by our High Court in the said Bench decision in Sankaralinga v. Ratna Swami ILR 1952 Mad. 508=65 L.W. 25., and other decisions which are referred to in the judgment of the Bench. If the transaction is fair and just at the time it is entered into and not producing of hardship, even though it may become less beneficial to either party by subsequent events, that change of circumstances would not be a material consideration in holding that hardship might be caused by allowing specific performance. The question therefore of any increase in value would not deprive the plaintiff of his relief for specific performance and the only contention therefore that may urged with some force is whether in view of the long period of 22 years that has passed after the expiry of seven years mentioned in the agreement, the Court could properly exercise the discretion vested in it by granting specific performance. As regards the delay it is again pointed out that unless the delay is coupled with circumstances which show that from the conduct of the plaintiff a reasonable inference could be drawn that the plaintiff has waived or abandoned his right to specific performance, mere delay, however long the period may be, would not be a circumstance that could be urged against the plaintiff claiming specific performance.

In Arjuna Mudaliar v. Lakshmi Ammal (1948) 2 M.L.J.527 161 L.W. 601., specific performance of an agreement was sought to be enforced after 22 years. It was held that mere delay by itself would not preclude the plaintiff from obtaining specific performance if his suit was otherwise in time. In that case the agreement was on 9th January 1920 and the suit was instituted on 4th September 1942. The additional circumstance in that case was that there was a sale of the suit property by the plaintiff and his deceased brother and his son to the 2nd defendant for a sum of Rs. 300. On the same day the 2nd defendant and his wife the 1st defendant executed in favour of the vendors an agreement agreeing to recovery the erties on the vendors paying on any day the sale price of Rs. 300 together with interest at the rate of 12 per cent per annum. There was a contention raised that the plaintiff in that case had not abandoned his right and he was under the impression that the transaction of sale and the agreement to reconvey were in the nature of a mortgage by conditional sale and that it was a usufructuary mortgage and there was a period of 60 years to redeem the mortgage. Even apart from that peculiar circumstance, it was observed by the Bench as follows at page 272:

It is now well established that mere delay does not by itself preclude the plaintiff from obtaining specific performance if his suit is otherwise in time. The delay must be such that it may be properly inferred that the plaintiff has abandoned his right or on account of the delay there must have been such a change of circumstances that the grant of specific performance would prejudice the defendant.

The following observations of the Judicial Committee in Lindsey Petroleum Co, v. Hurd (1873) L.R. 5 P.C. 221 , 239, were relied upon by the Bench:

Where it would be practically unjust to give a remedy either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted; in either of these cases lapse of time and delay are most material.

The Bench proceeded to state:

With great respect to the learned Judge, we must say that we have not been referred to any authority in which it had been held that from long delay alone without anything further, an abandonment of rights could be presumed."

Mr. Srinivasagopalachari lays considerable emphasis on the above observations of the Judicial Committee in Lindsey Petroleum Co. v. Hurd (1873) L. R. 5 P. C. 221, 239 and urges that it was a case where both by conduct and neglect the plaintiff must be deemed to have waived the remedy and it will be unreasonable to grant specific performance especially when the jurisdiction to grant specific performance is discretionary and the Court is not bound to grant specific performance under S. 22 merely because it will be lawful to do so. The Court in such cases, it is urged, must have a wide discretion and should not grant specific performance merely because it will be unlawful to do so and the discretion in this case should be exercised against the plaintiff in the following circumstances. It is pointed out that Raghava Reddy who obtained the right under the agreement did not exercise it till his death in 1935 and his widow the plaintiff did not think of exercising the right for another 12 years and from this conduct it could reasonably be inferred that the defendants must have been made to believe that the plaintiff and her predecessor in title must have abandoned their rights under the agreement. By the mere fact of their not asking for specific performance it cannot be assumed that they have waived or abandoned the right. To support waiver or abandonment there must be some positive conduct on the part of those who are entitled to specific performance and not mere silence or inaction. Such conduct may be express or implied and nothing has been shown in this case about such conduct on the part of the plaintiff or her husband. This is therefore a case of mere delay and the law on this aspect must be con side red to have been well settled by the two Bench decisions of our Court referred to above which are based on principles deduced from English law and also on the authority furnished by the decisions of our High Court. The appeal is therefore allowed. There will be no order as to costs of this Court and the lower appellate Court. No leave.