Ponnuru Krishnavenamma vs Banks Taviteswara Rao and another

This is an appeal by the first defendant Ponnuni Krishnavenamma against the reversing Judgement and decree dated 3-6-1996 of the III Additional District Judge, Krishna District at Vijayawada in AS No.31 of 1988.

The first respondent herein is the plaintiff and the second respondent herein is the second defendant in the suit OS No.4 of 1979 on the file of the I Additional Subordinate Judge, Vijayawada. The parties are being referred as they are arrayed in the said suit, for the sake of convenience.

The plaintiff filed the said suit for specific performance of the agreement of sale dated 8-1-1976 executed by the first defendant in his favour in respect of the suit property or in the alternative to direct the first defendant to refund the advance amount received by her. The suit property consists of a vacant house site admeasuring 1086 Sq.yards comprised in S.Nos.19/7 and 19/8 situated at Vidhyadharapuram at Vijayawada. The case of the plaintiff is that the first defendant is the owner of the suit plot and agreeing to sell the same for Rs.14,661/- to the plaintiff executed an agreement of sale (Ex.Al) on 8-1-1976; that the first defendant received an advance amount of Rs.3,000/- at the time of the execution of the agreement; that it was agreed between the parties that the first defendant should execute a sale-deed on or before 10-3-1976 after receiving the balance of sale consideration; that the first defendant had to tender the encumbrance certificate and tax receipts on respect of the suit property; that the first defendant had taken Rs.1,000/- on 2-3-1976 from the plaintiff towards the balance of sale consideration and made an endorsement on the reverse of the agreement (Ex.A2) to the effect that she will execute a registered sale-deed at will and pleasure of the plaintiff without., considering the terms of the agreement; and that subsequently in spite of several demands and exchange of notices the first defendant failed to execute the registered sale-deed and thus committed breach of contract. Hence, the plaintiff filed the said suit for specitlc performance of the agreement of sale.

Originally the suit was filed only against the first defendant who is the executant of the agreement of sale, but later on the second defendant got herself impleaded.

Both the defendants have resisted the claim of the plaintiff. The first defendant filed her written statement contending that it was the plaintiff that has committed breach of contract. She admitted the execution of agreement of sale (Ex.Al) and also the endorsement under Ex.A2 with respect to the receipt of Rs.1,000/- only. Site denied the other portion of the endorsement under Ex.A2 that she would execute a registered sale-deed at the will and pleasure of the plaintiff without considering the terms of the agreement of sale. She pleaded that the said endorsement is a forged one. She also admitted the receipt of the amount of Rs.3,000/- at the time of execution of Ex.A I. She pleads that the plaintiff was not having the money readily with him to pay the balance of sale consideration within the stipulated time of 10-3-1976. She also pleaded that in pursuance of the contract she obtained the encumbrance certificate 21-1-1976 itself and that she was having the tax receipts readily with her. She also pleaded that the time was the essence of the contract and that inspite of the notice issued by her the plaintiff failed to pay the balance of sale consideration and obtain the registered sale-deed.

The second defendant filed her written statement contending that the first defendant''s vendor Tetnma Raini Reddy himself had no right in the suit property and as such the first defendant gets no title to the suit property. According to D2 the suit property originally belonged to one Alia Venkatappa Reddy and he sold the same to the second defendant under two agreements of sale dated l''7-l-197I and 28-7-1976 and as the said Alia Venkatappa Reddy failed to execute the registered sale-deeds in pursuance of the said agreements of sale, D2 filed two suits OS No.34 of 1972 and 263 of 1975 for specific performance of-those agreements of sale and those suits were decreed and D2 obtained registered sale-deeds through Coun in execution of those decrees and that D2 has been in possession and enjoyment of the suit property and that now the matter is pending before the Supreme Court and that the Supreme Court also directed that the possession of the second defendant should not be disturbed; that the suit agreement of sale by DI in favour of the plaintiff does not bind the second defendant. It is also pleaded in the written statement of D2 that the suit agreement of sale was brought into existence in collusion between the first defendant and Raini Reddy and that the plaintiff also is in collusion with the first defendant and thus the plaintiffs suit is liable to be dismissed.

On consideration of the pleadings, the trial Court settled the relevant issues for trial. During the course of trial PWs.l and 2 were examined and Exs.AI to All were marked on behalf of the plaintiff. DWs.l and 2 were examined and Exs.131 to B15 were marked on behalf of the defendants. The plaintiff got himself examined as PWI and the scribe of the endorsement, Ex.A2, was examined as PW2. The first defendant got herself examined as DWI. The husband of the second defendant gave evidence as DW2.

On a consideration of the oral and documentary evidence on record, the trial Court gave the following findings:

(i) The first defendant executed the suit agreement of sale, Ex.Ai, after taking an advance of Rs.3,000/- on 8-1-1976 " with respect to the suit property;

(ii) It was agreed between the parties that the trine is the essence of the contract and that the plaintiff should pay the balance of sale consideration and obtain registered sale-deed on or before 10-3-1976;

(iii) The first defendant received a sum of Rs. 1,000/- towards the balance of sale consideration on 2-3-1976 and made an endorsement to that effect on the '' reverse of the agreement under Ex.A2 but the other portion in the said endorsement Ex.A2 that the plaintiff can obtain the registered sale-deed at his will and pleasure was not made by the first defendant and that it is a forged one and it was not made with her consent;

(iv)The first defendant was ready and willing to perform her part of the contract;

(v) The plaintiff failed to pay the balance of sale consideration as agreed upon and as such he had committed breach of contract;

(vi) The first defendant had a doubtful title to the suit property; and

(vii) The plaintiff is not entitled for the specific performance of the agreement of sale. Thus, the trial Court while refusing the relief from specific performance of the contract alternatively directed the first defendant to refund the amount of Rs. 4,000/-received by her together with interest thereon at six per cent anum on that amount and passed the decree accordingly directing each party to bear its own costs.

Having aggrieved by that Judgment and decree of the trial Court for refusing the main relief or specific performance, the plaintiff preferred the appeal AS No.31 of 1988. The learned appellate Judge on reappraisal of the entire evidence on record set out the following points for consideration in the appeal:

(i) Whether the first respondent/first defendant committed breach of contract of safe admittedly executed by her on 8-1-1976 under Ex.Al?

(ii) Whether the appellant-plaintiff did not commit breach of contract and was always ready and willing to perform his part of the contract?

(iii) Whether the appellant-plaintiff is entitled for the relief of specific performance?

(iv) Whether the impugned judgment and decree dated 2-12-1987 of the 1 Additional Subordinate Judge, Vijayawada are not sustainable and liable to be set aside and the suit filed by the appellant-plaintiff for the main relief of specific performance of the contract of sale is liable to be decreed?

(v) To what relief?

During the pendency of the appeal, the appellant-plaintiff also filed 1A No.31 of 1995 under Order 41 Rule 27, CPC for receiving the documents enclosed to it as additional evidence. The lower appellate Court allowed that application and the documents filed therein were admitted as additional evidence and marked as Exs.A12 to A14 for the reason that they throw light on the title of the Dl''s vendor-Rami Reddy, On re-appraisal of the evidence on record, the lower appellant Court concurred with the findings of the trial Court that the first defendant executed the agreement of sale in favour of the plaintiff on 8-1-1976 after receiving the advance amount of Rs.3,000/- and it was agreed between the parties that the time was the essence of the contract but the lower appellate Court differed with the other findings of the trial Court. The lower appellate Court held that on 2-3-1976 when part payment of Rs. 1000/- was made by the plaintiff to the first defendant under., Ex.A2, the parties to the agreement had agreed that the time need not be considered as essence of the contract; that there was no breach of contract on the part of the plaintiff; that it was the first defendant that had committed breach of contract and that the plaintiff is entitled for specific performance of the agreement of sale. The lower appellate Court also concurred with the finding of the trial Court that the second defendant is in possession and enjoyment of the suit property and her possession should not be disturbed till the matter is disposed of by the Supreme" Court in the connected matter. Accordingly, the lower appellate Court allowed the appeal and modified the decree and judgment of the trial Court and granted the relief of the specific performance of the agreement of sale with certain conditions.

Challenging the findings of the lower appellate Court, the first defendant has come up with this second appeal.

Heard the learned Counsel on either side. The learned Counsel for the appellant took me through the entire evidence on record and also the impugned judgment of the lower appellate Court and that of the trial Court.

The learned Counsel for the appellant raised the following contentions :

(i) The lower appellate Court has not properly appreciated the evidence on record and came to a wrong conclusion;

(ii) The finding of the lower appel late Court that there is a waiver of the clause in the agreement of sale, Ex.A I, as to time is the essence of the contract is not based on any evidence and that portion in the endorsement, Ex.A2, is a forged one and made without the consent of Dl;

(iii) The granting of the relief of specific performance having found that the title of the first defendant is defective is unsustainable;

(iv) The finding of the lower appellate Court that the. first defendant committed breach of contract is contrary to the evidence on record;

(v) The finding of the lower appellate Court that the plaintiff was ready and willing to perform his part of the contract is perverse and not based on the evidence on record.

The learned Counsel for the plaintiff-respondent, on the other hand, submits that the findings of the lower appellate Court are findings of fact and it is not open to interfere by this Court exercising jurisdiction u/s 100 CPC as the said findings arc based on the evidence on record and on re-appreciation of such evidence and that the appellate Judge also had given cogent and convincing reasons in differing with the finding of the trial Court.

The dispute relates to the vacant site shown as items 1 and 2 in the plaint schedule. Item No.l comprises of 1086 Sq. yards situated in RS No.19/7 and 19/8 and Item No.2 comprises of a joint passage of 11 yards width and comprising 661 Sq. yards in the said survey numbers within specific boundaries. As revealed from the evidence on record, Alia Venkatappa Reddy got an extent of 94 cents out of total extent of Ac. 1.88 cents in the said survey numbers of 19/7 and 19/8 on the northern side under a compromise decree in the suits OS No.65 of 1965 filed by Alia Venkatappa Reddy and OS No.8 of 1959 filed by one Krishna Murihy which were tried together. In pursuance of that compromise decree M. Krishna Murthy executed a registered sale-deed with respect to that land of 94 cents in favour of Alia Venkatappa Reddy under document number 671/1967. Subsequently on 11-7-1967 Alia Venkatappa Reddy executed a registered relinquishment deed under the original of Ex.B7 with respect to the very same property in favour of Rami Reddy. Even after the execution of relinquishment deed under the original of Ex.B7 in favour of Rami Reddy, Alia Venkatappa Reddy sold that property in favour of the second defendant and executed two agreements of sale dated 17-1-1971 and 28-7-1975. As the said Venkatappa Reddy failed to execute the registered sale-deed in pursuance of the agreements of sale, two suits OS No.34 of 1972 and OS No.263 of 1975 were instituted by D2 for specific performance of the said agreements of sale relating to 3100 Sq. yards in the said survey numbers., Those two suits were decreed. As Alia Venkatappa Reddy failed to execute the registered sale-deed in pursuance of those decrees, the second defendant obtained the registered sale-deed through Court under Exs.BlO and B15. Later, under Ex.B9 rectification deed was also executed by the Court. The second defendant was also put in possession of the properties sold to her and she continues to be in possession of the same. The litigation between D2 and Alia Venkatappa Reddy is now pending before the Supreme Court. It is also admitted that there is a direction by the Supreme Court that the possession of D2 with respect to that properly should not be disturbed pending disposal of the matter by the Supreme Court. It is also admitted that T. Rami Reddy who has obtained the relinquishment deed under the original of Ex.B7 also dealt with the property. He executed a registered mortgage deed in favour of one Swarajya Lakshmi who in turn transferred the mortgage deed in favour of one Annavarapu Kamalingeswara Rao who in turn transferred the mortgage deed in favour of the first defendant under the registered document dated 21-10-1971. The first defendant also obtained a registered sale-deed from the said Rami Reddy on 24-11-1971 and the amount due under the mortgage debt by T. Rami Reddy was adjusted towards the sale consideration under the registered sale-deed dated 24-11-1971. Subsequently i.e., on 8-1-1976 tlie first defendant executed the present suit agreement of sale, Ex.Al, in favour of the plaintiff with respect to the suit property, the details of which were already referred supra. The first defendant agreed to sell the suit property describing herself as absolute owner. The second defendant, as earlier stated, got hersel f impleaded challenging the title of the first defendant to Ihe suit property contending that D1''s vendor Rami Reddy himself had no title or possession of the suit property as Alia Venkatappa Reddy himself sold the same to her. Tims, it is clear from the evidence on record that there are two sets of litigation with respect to the property which Alia Venkatappa Reddy got under the compromise decree. In view of this litigation and the decrees in favour of the second defendant and the fact that the second defendant is in possession and enjoyment of the suit property and that fact has been admitted by the Supreme Court by granting stay in favour of the second defendant, the trial Court observing that there is a defect in the title of the first defendant''s vendor refused to grant the relief of specific performance and directed the first defendant vendor to repay the advance amount received by her together with interest thereon. The trial Court, of course, also observed that the time is the essence of the contract and the first defendant did not waive the clause relating to that under Ex.A2. But on re-appraisal of the entire evidence on record, the lower appellate Court held that the defect in the title of the vendor is not a ground to refuse the specific performance of the contract. The lower appellate Court further held that though originally it was agreed between the parties that the time was the essence of the contract, later on when a sum of Rs.1000/- was paid to the first defendant by the plaintiff, it was agreed between the parties that such a condition is waived and an endorsement has been made to that effect under Ex.A2. The learned lower appellate Judge relying on the testimony of PWs.l and 2 held that the endorsement under Ex.A2 waiving such a condition in the agreement was made on the, consent of the first defendant and as such it is binding on her. The appellate Judge also observed that even if the first defendant is not in possession of the suit property, on execution of the registered sale-deed in pursuance of the decree under this suit, the plaintiff can as well recover possession of the suit property by filing a suit against the persons who are in possession of the same. The learned appellate Judge also observed thai as the present suit relates to the specific performance of the agreement of sale executed by D1 in favour of the plaintiff, the title with respect to the suit property of Alia Venkalappa Reddy and T. Rami Reddy inter se cannot be decided herein. The lower appellate Court relied on the decision of a Division Bench of this Court in Abdul Hakeem Khan Vs. Abdul Mannan Khadri, , wherein it is held that in a suit for specific performance by the purchaser, the vendor cannot put forward the defence that he has no litle but if the suit is by the vendor the purchaser can plead that the vendor has no title to the suit property. Relying on this decision, the lower appellate Court granted the relief of specific performance imposing certain conditions in favour of the plaintiff even though there is some doubt with respect to the title of the first defendant and that of her vendor Rami Reddy.

On a careful consideration of the evidence on record and the submissions made by the learned Counsel on either side, 1 atn satisfied that there are no substantial questions of law involved in this matter and as such I am not inclined to interfere with Ihe findings of facts of the lower appellate Court. It is well settled that the jurisdiction of the High Court to entertain a Second Appeal u/s 100 CPC after the 1976 Amendment is confined only to such appeals as involved a substantial question of law. The existence of a substantial question of law and not a mere question of law is the sine qua non for the exercise of the jurisdiction u/s 100 CPC. In Kasi Bai v. Parvathi Bai, Judgments To-day 1995 (7) SC 48, their Lordships of the Supreme Court held thus:

"It has been the consistent view of this Court that there is no jurisdiction to entertain a second appeal on the ground of erroneous finding of fact based on appreciation of the relevant evidence. There is catena of decisions in support of this view."

In Dudh Nath Pandey (Dead) by Lrs Vs. Suresh Chandra Bhattasali (Dead) by Lrs, , the Supreme Court held that the High Courts in exercise of power u/s 100 CPC cannot make a fresh appraisal of the evidence and come to a different conclusion contrary to the finding recorded by the first appellate Court. There is catena of decisions in support of this view. Thus, where the lower appellate Court had considered the evidence on record by applying its mind independently and considered the reasoning of the trial Court and gave its findings of facts, interference with the said findings of facts, however erroneous, is not permissible. But, if the finding of fact has been recorded by the lower appellate Court without considering the entire evidence on record, the finding can be successfully challenged in second appeal u/s 100 CPC. The High Court is also justified in interfering when it is made out that the lower appellate Court failed to meet the points raised by the trial Court in appreciating the evidence on record and also where the approach of the lower appellate Court to decide the case is quite erroneous. This Court also can interfere when there is perversity in finding of fact or deliberate mistake either in collection or evaluation of evidence or when it is the result of surmises and conjectures.

In the instant case, having considered the entire evidence on record, I am satisfied that the lower appellate Court has considered the entire evidence on record and its findings are based on proper appreciation of the facts and circumstances in the case and the evidence on record. The findings of the lower appellate Court cannot be said to be perverse nor are they the result of the surmises and conjectures. The relief of specific performance of contract is a discretionary relief and while granting such a relief the Court should exercise such discretion judiciously considering the facts and circumstances of each case. Admittedly, though there was delay in filing the suit by the plaintiff, the interests of the third parties have not set in for the reason that the first defendant has ''not alienated, the suit property to any other person subsequent to the execution of Ex.Al. Thus, by granting the relief of specific performance, the interests of the third parties are not affected. On a consideration of the facts and circumstances, it cannot be said that the discretion exercised by the lower appellate Court in granting the relief of specific performance is not judicious. Hence, I do not find any reason to interfere with the findings of the lower appellate Court.

In the light of my above discussion, I do not find any merits in this appeal and the appeal is liable to be dismissed.

In the result, the appeal is dismissed with costs. The judgment and decree in AS No.31 of 1988 under appeal are confirmed.