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Judgment
Maruthamuthu, J.—The plaintiff has filed the suit for specific performance of the agreement of sale dated 21.3.1979 directing the defendant
to execute the sale deed in respect of the ground floor of premises No. 20, Errasappa Maistry Street (Rattan Bazaar), Madras-3, to deliver
possession of the property to the plaintiff and for costs. The averments in the plaint are:
(i) The plaintiff is carrying on business as watch dealers. The first defendant who is the owner of the building in New No. 12 (Old door No. 20),
Errasappa Maistry Street (Rattan Bazaar), Madras-3, agreed to sell the property for Rs. 1,65,000/- and the terms were finalised between the
parties. The first defendant represented to the plaintiff that by the sale of the entire property within the financial year ending 31.3.1979, he will
suffer huge capital gains tax and that, therefore, two separate agreements can be entered into and two separate sale deeds executed, one in respect
of the first and the second floor and another in respect of the ground floor. The first defendant expressly agreed not to sell the property to any one
else. Accordingly, on 21.3.1979, two separate agreements were executed. As per the first agreement, the first defendant executed a registered
sale deed in respect of the first and the second floor on 29.3.1979 for consideration of Rs. 55,000/-. The consideration for the sale of the ground
floor had been fixed at Rs. 1,10,000/- under the agreement. The first defendant received an advance of Rs. 5,000/- under each of the two
agreements. After the agreement of sale and the execution of the first sale deed in respect of the first and the second floor, the first defendant
became scarce as he went away to Pakistan. He had shifted his residence from Madras to Bangalore.
(ii) The first defendant did not obtain the income tax clearance certificate though a draft sale deed was handed over to him. Time for completion of
the sale in respect of the ground floor was fixed as three months, but it was not the essence of the agreement. As the first defendant agreed to
execute the sale deed in any event within the next accounting year, the first defendant assured the plaintiff to go over to Madras and complete the
sale. After his advocate''s notice dated 22.10.1979; the plaintiff suffered some calamities in his family in the middle of October, 1979. The plaintiff
informed the first defendant about his unexpected difficulties and asked the first defendant to complete the sale after some time. Meanwhile, the
first defendant sent a letter dated 15.11.1979 purporting to cancel the agreement. But the plaintiff had sent a telegram on 14.11.1979 itself stating
that he was willing to complete the sale. Thereafter, the plaintiff and his father met the first defendant personally at Bangalore and the first defendant
assured that he would go over to Madras in the first week of December and execute the sale deed. But, the first defendant did not do so. The
unilateral cancellation of the agreement by the first defendant is not valid. Then, on 3.1.1980, the first defendant informed the plaintiff by his letter
dated 6.12.1977 that the ground floor had been already sold to the tenant in occupation. The entire property including the ground floor should be
sold only to the plaintiff under the agreement and also in law and equity. The plaintiff later came to know that the sale deed executed by the first
defendant in favour of the second defendant had taken place on 29.11.1979 for Rs. 1,15,000/-. The alleged sale in favour of the second defendant
is neither valid nor binding on the plaintiff. The second defendant is not a bonafide purchaser .The plaintiff has always been ready and willing to pay
the balance of Rs. 1,05,000/- and complete the sale and he is entitled to the relief of specific performance of the agreement.
The first defendant filed his written statement contending as follows:
(i) It is not true for the plaintiff to allege that the first defendant represented about his suffering of huge capital gains tax if the sale of the entire
property is to be completed within one financial year and that it should be spread over for two financial years. Since the plaintiff stated that he was
not having enough cash to complete the transaction in a single sale deed, the sale was spread over two financial years. The first defendant did not
assure that he will not sell the property to anybody else. The allegation that the first defendant became scarce and went away to Pakistan after the
agreement, is not true. The first defendant has always been the resident of Bangalore and not a permanent resident of Madras. The draft sale deed
in respect of the suit property was not handed over to the first defendant by the plaintiff in spite of the first defendant''s requests and so the income
tax clearance certificate could not be obtained by the first defendant. The first defendant wrote letters dated 13.6.1979 and 20.6.1979 calling upon
the plaintiff to complete the sale by the end of June, 1979 and stating that the first defendant was ready to perform his part of the contract. Later,
the first defendant sent letters dated 20.8.1979 and 22.10.1979. The first defendant stated in his letter dated 22.10.1979 that a final opportunity to
complete the transaction was given to the plaintiff before 31.10.1979, failing which the contract would be treated as cancelled. Even then, the
plaintiff did not respond. The first defendant did not represent to the plaintiff that he will go over to Madras and execute the sale deed in the first
week of December, 1979.
(ii) The plaintiff sent a telegram dated 14.11.1979 purporting to cancel his letter dated 12.11.1979 calling upon the first defendant to complete the
sale on 15.11.1979. The plaintiff had mentioned about some calamities in his family in his letter dated 12 11.1979 and asked for postponement of
the execution of the sale deed. The first defendant reiterated his stand in his letter dated 22.10.1979 by stating that the agreement was cancelled by
31.10.1979 as already stated by him in his letter dated 22.10.1979. Since the plaintiff had committed breach of the contract, and did not complete
the transaction as per the agreement even after the extended period, the first defendant had to forfeit the advance and sell the ground floor to the
second defendant who has genuinely purchased the same. The plaintiff is not entitled to the relief of specific performance of the agreement against
the first defendant who ceased to be the owner.
The second defendant filed her written statement stating that she is a bona fide purchaser of the ground floor of the building for Rs. 1,15,000/-
by virtue of the sale deed executed by the first defendant in her favour on 29.11.1979 without notice of the alleged agreement in favour on the
plaintiff. She contended that the agreement dated 21.3.1979 entered into between the plaintiff and the first- defendant had been cancelled as the
plaintiff himself had committed breach of the contract. In the written statement filed by the second defendant, she has incorporated almost all the
allegations mentioned in the written statement of the first defendant and contended that the plaintiff is not entitled to the relief of specific
performance.
The following issues were framed for trial:
Whether the plaintiff is not entitled to the relief of specific performance for the reasons stated in the written statement?
Whether the time is the essence of the contract?
Whether the plaintiff was ready and willing to perform his pan of the contract?
Whether the first defendant has got a right to cancel the contract unilaterally?
To what relief is the plaintiff entitled?
Additional issues framed on 13.6.1990):
Whether the sale by the first defendant in favour of the second defendant is valid?
Whether the second defendant is a bona fide purchaser for value?
Issues 1 to 4 and additional issues 1 and 2: It is not in dispute that the first defendant who has been the owner of the property bearing door No.
12 (old door No. 20), Irrasappa Maistry Street (now known as Rattan Bazaar), Madras-3, had offered to sell the same to the plaintiff and that in
pursuance thereof two agreements of sale nave been entered into between the plaintiff and the first defendant on 21.3.1979. The property is situate
on the land of about 494 sq.ft. and consists of ground floor, first floor and second floor. On 21.3 1979, when two agreements had taken place,
one agreement related to the ground floor and that is Ex.P-1 and another agreement related to the first floor and the second floor of the building an
that is Ex.P-2. The total sale consideration for the entire building covered by Exs.P-1 and P-2 has been agreed between the parties as Rs.
1,65,000/- and this has been split up and mentioned as Rs. 1,10,000/- in respect of the ground floor covered by Ex.P-1 and Rs. 55,000/- in
respect of the first and the second floor covered by Ex.P.2. This aspect of the fact relating to the consideration has been admitted by the first
defendant in his evidence and it is found to be quite consistent with the plaintiff''s claim. As regards the time for completion of the sale of the first
floor and the second floor, Ex.P-2 mentions the time as on or before 31.3.1979 in Ex.P-1 which relates to the sale of the ground floor, the time for
completion of the sale has been mentioned as three months, and it means that the sale should be completed on or before 20.6.1979.
The definite case of the plaintiff is that though two agreement (Exs.P-1 and P-2) have been entered into between him and the first defendant in
respect of one and the same building, of course, after splitting up the same into ground floor as one part and the first floor and the second floor as
another part, the entire building was agreed to be sold to the plaintiff and that the first defendant gave an undertaking not to sell any part of the
property to anybody else. Though this version of the plaintiff has been disputed by the first defendant in his written statement, the plaintiff''s version
is found to be true and acceptable. We find here that it was on one and the same day (21.3.1979), that both the agreements (Exs.P-1 and P-2)
have come into existence and one relates to the ground floor and the other relates to the first floor and the second floor of the building. What is
significant to note here is the description of the property offered for sale in Exs.P-1 and P-2. In Ex.P-1 which relates to the sale of the ground
floor, the property sought to be sold has been described as the ground floor and the site. But it is not so in the case of the sale of the first floor and
the second floor of the building. Ex.F-2 mentions that the property sought to be sold in pursuance thereof, is the first floor and the second floor of
the building. The schedule mentions ""I and II floor and; building erected and standing on premises bearing old No. 20 (new No. 12), Irrasappa
Maistry Street (Rattan Bazaar), George Town, Madras-3....."" It is obvious here that no mention has been made in Ex.P-2 about the land on which
the first floor and the second floor of the building stand, though this is conspicuously seen in Ex.P-1 which relates to the sale of the ground floor of
the building. It has not even been slightly indicated in Ex.P-2 as to whether the purchaser (plaintiff) would have any right whatsoever in respect of
the land of 494 sq.ft. on which the entire building stands. Normally, such a recital regarding the right of the purchaser of the first floor and the
second floor of the building would find a place in an agreement and because that is absent in the case of Ex.P-2, but at the same time it is
mentioned in Ex.P-1, we have to hold that the parties intended the sale of the entire property including the land and the superstructure of ground
floor, the first floor and the second floor and that they never thought of dividing the ground floor portion as one part and the first floor and the
second floor portion of the building as another part, when the sale was to be effected actually and possession of the property to be delivered to the
plaintiff. No contra intention is deducible in the circumstances of the case.
There are also other vital facts and circumstances to confirm this view. Undeniably, there is only one main entrance for the entire building and
that too in the ground floor leading from the street (bazaar) and the entrance (door ways) for the first floor and the second floor are inside the
building itself. If one has to go to the first floor, he has to climb the staircase situate in a corner of the ground floor. Similarly, if one has to reach the
second floor, he has to climb the staircase situate in a corner of the first floor of the building. The entire land of 494 sq.ft. has been covered with
the building and no vacant space has been left outside. It is, therefore, clear that the person who purchases the first floor and the second floor of
the building has to necessarily make use of the only entrance in the ground floor facing the street and use of the staircase situate within the ground
floor of the building and without the use of the said main entrance and the staircase, it is impossible to use the first floor and the second floor of the
building. The absence of provision in Ex.P.2 for the use of the entrance in the ground floor and the staircase within the ground floor by the plaintiff
who has agreed to purchase the first floor and the second floor, only denotes that the plaintiff and the first defendant had entered into an agreement
for the sale of the entire property though the agreement for sale had been split up into two, that the plaintiff as a purchaser should get the entire
property for himself, and not a part of it has been amply made clear in this case.
The plaintiff has also proved here that there was a motive for the execution of two agreements (Exs.P-1 and P-2) when both the parties had
intended that the entire property should be conveyed to the plaintiff. The plaintiff would state that the first defendant made representation to the
plaintiff that the first defendant would get the benefit of reduction in the capital gains tax if the sale of the building is split up into two and spread
over to two financial years and that, therefore, the time for completion of the sale in respect of the first floor and the second floor of the building
was mentioned as ""on or before 31.3.1979"" while the time for completion of the sale for the ground floor of the building was fixed after 31.3.1979.
The plaintiff would state that he agreed to the suggestion made by the first defendant in this regard and that, therefore, Exs.P-1 and P-2 were
executed as two separate agreements to be followed by two separate sale deeds. This aspect of the plaintiff''s version finds ample support in Ex.P-
4 which is a letter written by the first defendant''s counsel to the plaintiff on 21.3.1979. Emphasis has been made in Ex.P-4 that the, the first
defendant would get the benefit of the capital gains tax and that if the plaintiff would fail to do so and if on that account the first defendant had to
pay any extra capital gains tax, the plaintiff would be liable for reimbursing the same to the first defendant. In fact, this has been clearly averred by
the plaintiff in his plaint and spoken in the evidence of P.W.1, the father of the plaintiff.
The first defendant cannot deny this fact as the reason for entering into two agreements. If the first defendant would attempt to depose during
trial that the object for execution of two sale agreements is not that the first defendant should get reduction in the capital gains tax, but that the
plaintiff had no sufficient funds to have the sale of the entire property at one time under one agreement, it cannot be taken as true. Such an
allegation has not been made by the first defendant in Ex.P-4 at the earliest point of time or immediately thereafter. It is only on 3.1.1980 when the
counsel for the first defendant sent the letter (Ex.P-9) to the counsel for the plaintiff, it has been alleged on behalf of the first defendant that the
arrangement to enter into the transaction by the two sale deeds spread over to two financial years was made because of the plaintiffs expression of
his inability to have the entire sum to complete the transaction. Of course, the first defendant would add therein that the first defendant would also
be benefited if the transaction was spread over to two financial years. The reason that the first defendant was to be benefited by the sale if split into
two and the transaction spread over to two financial years, has been disowned by the first defendant in his evidence. The fact that the plaintiff did
not possess the necessary funds for the purchase of the entire property under one agreement and one sale deed has been made belatedly as an
after thought by the first defendant to support his contention that the plaintiff was not ready to complete sale in time. Nowhere in the letter sent by
or on behalf of the first defendant has it been stated that the plaintiff did not possess the requisite funds for the purchase of the suit property in one
transaction and that, therefore, the transaction was split into two under two agreements. We also find in the instant case that the plaintiff had
completed the sale in respect of the first floor and the second floor of the building covered by Ex.P-2 well two days prior to 31.3.1979, the last
date of the financial year 1978-79. The plaintiff has kept up his agreement and has satisfied the first defendant in his purchase of the first floor and
the second floor of the building. Ex.P-3 is the sale deed executed by the first defendant in favour of the plaintiff on 21.3.1979 in respect of the first
floor and the second floor of the building. This circumstance would also lend support to the view that the transaction was split into two so as to
spread ''over the same for two financial years in order that the first defendant would get the benefit of reduction in the capital gains tax and that,
however, the parties had the intention of covering the ale of the entire property.
Dispute has arisen only after the sale of the first floor and the second floor to the plaintiff under Ex.P-3. As regards the sale in respect of the
ground floor, the sale was not completed by the plaintiff within three moths from 21.3.1979 as stipulated in Ex.P-1 or immediately thereafter,
though the first defendant has written a letter dated 13.6.1979 (Ex.P-16) and another letter dated 20.6.1979 and also a letter dated
20.8.1979(Ex.D-1) asking the plaintiff to send the draft sale deed so as to enable the first defendant to get income tax clearance certificate and
complete the sale. It is also a fact that the first defendant sent a letter (Ex.P-6) dated 22.10.1979 to the plaintiff asking the plaintiff to complete the
sale on or before 31.10.1979 and stating that in default, the agreement under Ex.P-1, should be treated as cancelled and the advance paid by the
plaintiff already shall be forfeited. The plaintiff''s explanation was that the first defendant who was a resident in Madras at the time of Ex.P-1, P-2
and P-3 had shifted his residence to Bangalore and made his presence scarce in Madras. It is also stated by the plaintiff that he tried to contact the
first defendant on phone at his Bangalore address, but that the plaintiff was informed that the first defendant had gone to Pakistan and was not
available in Bangalore. P.W.1 would say that this was the reply he got from Akthar, the manager of the first defendant''s business at Bangalore and
also the relations of the first defendant in Madras. P.W.1, the father of the plaintiff, would also state that he contacted Mr. Ramachandran, counsel
for the first defendant, who sent the letters Exs.P-4, P-5 and P-6 stating that the plaintiff was ready and willing to complete the sale, but that he
could not meet the first defendant.
It is further stated by P.W.1 that the sale could not be completed on or before 31.10.1979 as suggested by the first defendant in Ex.P-6 for
the reason that some calamities in the death of P.W.1''s brother and sister had taken place within the interval of two days in October, 1979.
According to P.W.1, his brother Ghulam died on 21.10.1979 and his sister Kathun Bi died on 23.10.1979. The death register extract (Ex.P-7)
has also been produced on the side of the plaintiff in evidence of the death of Ghulam on 21.10.1979. The death register extract for Kathun Bi has
not been produced. The evidence adduced on the side of the plaintiff through P.W.1 and a perusal of the letter sent by the plaintiff to the first
defendant on 13.11.1979 (Ex.P-10) shows that the death of P.W.1''s brother and sister must be true. The said two deceased persons must be
related to the plaintiff as uncle and aunt. It is therefore, possible to presume that these calamities had stood in the way of the plaintiff completing the
sale before 31.10.1979. P.W.1 would state in his evidence that he and the deceased persons being Muslims had to perform the ceremony for 40
days and that, therefore, the first defendant was requested in Ex.P-10 to have the execution of the sale deed some time after the 40th day
ceremony was over. But, it is stated by him that after the performance of important ceremonies for three days and without waiting up to the 40th
day, he felt that the sale deed could be executed and that, therefore, he sent a telex message as per Ex.P-11 on 14.11.1979, that is, the next day
after Ex.P-10, cancelling what he had stated in Ex.P-10 earlier and conveying his readiness and willingness to complete the registration of the sale
deed on the next day (15.11.1979) itself. The further evidence of P.W.1 is that in addition to the telex message (Ex.P-11) sent to the first
defendant on 14.11.1979 expressing his readiness and willingness to complete the sale, P.W.1, his wife and the plaintiff met the first defendant in
Bangalore subsequent to ExP-11 in the month of November, 1979 itself and explained to him about the calamities that took place in his family and
stated that the sale could be completed in the first week of December, 1979. The first defendant is also said to have assured the plaintiff, his father
(P.W.1) and mother that the first defendant would go to Madras in the first week of December, 1979 and execute the sale deed in favour of the
plaintiff. This meeting of the plaintiff and his parents with the first defendant at Bangalore subsequent to Ex.P-11 in November , 1979 has been
virtually admitted by the first defendant in his evidence. The first defendant would only seek to allege here that he did not promise to go to Madras
in the first week of December and execute the sale deed in favour of the plaintiff as requested by the plaintiff and his parents. The first defendant is
said to have told them that he could not oblige them for the reason that the agreement (Ex.P-1) was already cancelled by him. These circumstances
have been stated on behalf of the plaintiff to show that the plaintiff was ready and willing to perform his part of the contract and complete the sale
and that the plaintiff never had the intention of waiving or rescinding the contract. But, it appears that the first defendant had stood by what he had
stated already in Ex.P-6 dated 22.6.1979 and refused to oblige the plaintiff to execute the sale deed later.
There can be no dispute at all on the point that the burden of proof that the plaintiff was always ready and willing to perform his part of the
agreement as per its terms, has been greatly on him. The citations made by the learned counsel for the first defendant in this regard are
Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, Smt. Sandhya Rani Sarkar Vs. Smt. Sudha Rani Debi and Others, , D. Palei v.
P.C.Das AIR 1978 Orissa. 5 and Bishwanath Mahto Vs. Srimati Janki Devi, . We find in the present case that the plaintiff has been ready and
willing to complete the sale and that he has not abandoned his right whatsoever. It is, however, seen in the instant case that the first defendant did
not come forward to execute the sale deed in the first week of December, 1979 as requested by the plaintiff and that he had, on 29.11.1979 itself
executed the sale deed (Ex.D-3) in favour of the second defendant. It may be noted here that the sale under Ex.D-3 has come into existence just
after the telex message sent by the plaintiff on 14.11.1979 and after meeting of the first defendant by the plaintiff and his parents at Bangalore. The
first defendant could have waited till the first week of December, 1979 and executed the sale deed in favour of the plaintiff as per Ex.P.1 and he
need not have committed a breach of the agreement in this regard. What has to be pointed out in this context is that not withstanding the fact that
plaintiff was ready and willing to get the sale completed in the first week of December, 1979, the first defendant did not wait and he had sought to
convey the property (subject-matter in Ex.P-1) in favour of the second defendant on 29.11.1979. Probably, the first defendant was pressurised to
do so by the second defendant and her husband who were already tenants in respect of the same property for some time past, on the second
defendant offering a higher price than what the plaintiff had agreed to pay under Ex.P-1.
It cannot be contended for a moment on the side of the first defendant that the plaintiff had no sufficient resources to purchase the property and
complete the sale as per Ex.P-1. The plaintiff has produced the passbook (Ex.P-18) issued by the Syndicate Bank, Mylapore Branch, showing
that on 19.2.1990 he had a sum of Rs. 1,00,100/- to his credit. Ex.P-19 is the certificate issued by the said bank in this regard. P.W.1, father of
the plaintiff, has produced a statement of account (Ex.P-20) relating to his watch company of which he is the proprietor from 1960, showing that
from 14.11.1979 he has got a term loan account with Lakshmi Vilas Bank, 133, T.C. Street, Madras- 1. This statement of account shows that on
14.11.1979 P.W.1 had a sum of Rs. 1,40,000/- to his credit and that it was Rs. 1,15,152-85 on 21.10.1982. P.W. 1�s evidence is that the
watch company is run by him as a proprietary concern from 1960 and that the plaintiff is running a separate watch company in another shop in the
same Rattan Bazaar for ten years. P.W.1 has stated that apart from the watch company named as Jalal Watch Company he is running a wall-
clock factory at Alandur which is worth Rupees ten to fifteen lakhs. It is also stated by him that P.W.1''s wife who is also the mother of the plaintiff
is owning a palatial house in Door No. 109, Kodambakkam High Road, Madras worth Rupees thirty to forty lakhs and that a portion of it is
fetching a rent of Rs. 7,000/- per month. The evidence of P.W.1 is that it was he who negotiated for the sale of the suit property from the first
defendant and that he was in possession of the requisite funds and that, therefore, he or the plaintiff cannot be said to have lacked the necessary
funds for the purchase of the suit property. It cannot be imagined that P.W.1 who offered to purchase the suit property in the name of the plaintiff
and who had paid an advance of Rs. 5,000/- and who had already purchased the first floor and the second floor of the same building under Ex.P-
3 from the first defendant, did not have the necessary funds for the purchase of the suit property. The moneys of the plaintiff and his parents might
to put in use when the question of purchase of the property would come.
Explanation (i) to Section 16 of the Specific Relief Act, 1963 says that if the contract involves payment of money, the purchaser need not
actually tender the money, to the vendor or deposit the same in Court. The consideration money need not be tendered or deposited as a condition
precedent by a party seeking specific performance of the contract of sale. It is also not necessary that the plaintiff should have command over
necessary finance throughout the life of the contract. It would be enough if the plaintiff has shown that he was ready and willing to purchase the
property and complete the sale. It is significant to note in this case that nowhere has the first defendant alleged that the plaintiff did not possess the
necessary funds for the purchase of the suit property and that, therefore, he could not complete the sale. The resources of the plaintiff have not
been questioned at all by the first defendant in the entire case.
This is certainly not a case in which we should construe time as the essence of the contract and that on the failure of the plaintiff to complete the
sale before the expiry of three months from 21.3.1979, the first defendant was free to convey the property to anyone as he would like. Even the
delay on the part of the plaintiff in the completion of the contract will not stand in the way of the plaintiff asking the first defendant to specifically
perform his part of the contract and complete the sale. The decision reported in Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Another,
says:
It is settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of
the contract. When a contract relates to sale of immovable property, it will normally be presumed that the time is not the essence of the Contract
(vide Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, It may also be mentioned that the language used in the agreement is not such as
to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be
evidence by circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is
not the essence of the contract.
The same principle has been stated in Kamal Rani Vs. Chand Rani and Another, Raj Rani Bhasin v. S. Kartar Singh 1975 Del 137 AIR and
Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, But, the decision in Rai Rani Bhasin v. S. Kartar Singh 1975 Del 137 AIR and
Gomathinayagam Pillai and Others Vs. Pallaniswami Nadar, would state as an exception that the seller is entitled to make the time the essence of
the contract by specifically giving a notice to the purchaser, if the purchaser was found to be delaying the performance of the contract. The first
defendant would seek to rely upon these two decisions in support of his contention that he had made the date 31.10.1979 as the essence of the
contract in Ex.P-6 and that because the plaintiff had failed to comply with the condition and to complete the sale by that date, the plaintiff is not
entitled to ask for specific performance of the agreement.
We have to consider certain facts and circumstances peculiar to the present case in applying the above principle. We have already seen that
though two agreements (Exs. P-1 and P-2) have come into existence in respect of parts of one and the same property, both are composite and
indivisible and that they relate to the sale of the entire property in favour of the plaintiff and that the first defendant has been under obligation to
convey the entire suit property in favour of the plaintiff. We have also found that it is neither feasible nor desirable that the ground floor portion of
the property should be conveyed to one person while the first and the second floors of the building should be conveyed to another person and that
unless all the portions including the land on which the building is situate are conveyed to one and the same person, it will not be a sale worth the
name. The plaintiff in the present case who has obtained two agreements in respect of two portions of one and the same property, has already on
29.3.1970 purchased the first and the second floors, and unless the ground floor with the land is conveyed to him as per Ex.P-1, the possession
and enjoyment of the first floor and the second floor of the building will become an impossibility. Similar will be the position if the plaintiff had
obtained a sale of the ground floor with land and had failed to purchase the first and second floors of the building and if the first and the second
floors of the building are purchased by a third party.
The above points will have to be taken into consideration along with the general principle that time is not of the essence of the contract in the
case of immovable property. Further, it is not made clear in Ex.P-1 that time of three months from 21.3.1979 is the essence of the contract.
Because the parties did not think that time is of the essence of the contract in Ex.P-1, the first defendant had written the letter Ex.P-6 dated 22-10-
1979 to the plaintiff stating that the sale could be completed by the plaintiff before 31-10-1979. The time 20-6-1979 fixed for completion of the
sale under Ex.P-1 already has not been kept up by the parties and it has been extended by the first defendant unilaterally till 31.10.1979. The mere
fact that the first defendant had mentioned the date 31.10.1979 as the last date for completion of the sale cannot be deemed to be the essence of
the contract. The time limit of 31.10.1979 as the last date for completion of the sale cannot be deemed to be the essence of the contract. The time
limit of 31.10.1979 fixed by the first defendant for completion of the sale was naturally too short for which the plaintiff has not agreed. The fixation
of the short time by the first defendant as such seems to be motivated. The first defendant did not like that the plaintiff should get a longer time as
otherwise the plaintiff might complete the sale. It looks probable that by the time when the first defendant sent Ex.P-6 to the plaintiff, the second
defendant had intervened and pressurised the first defendant to sell the ground floor of the building to the second defendant. Otherwise, the first
defendant would not have suddenly sent Ex.P-6 giving a very short time to complete the sale. The evidence of D.W.2., son of the second
defendant that negotiation for the sale was started with the first defendant only after 31.10.1979 cannot be true. The fact that the first defendant
had extended the time for completion of the contract up to 31.10.79 is itself an indication that time is not the essence of the contract in this case.
Further, we find in the present case that the sale of the ground floor covered by the agreement (Ex.P-1) should take place during the financial year
1979-80 and, therefore, it would matter little if the sale was completed by the plaintiff a few days after 31.10.1979. The financial year of 1979-80
would end by 31.3.1980. After all, the plaintiff had expressed his willingness to complete the sale about 15 days after 31.10.1979, the date fixed
by the first defendant in Ex.P-6, and the sale deed (Ex.D-3) has been executed by the first defendant in favour of the second defendant soon after
the plaintiff meeting the first defendant at Bangalore and assuring him of his readiness ad willingness to complete the sale by another one week or
ten days. P.W.1 is said to have explained to the first defendant at that time about the calamities that happened in his family in October and his
consequent inability to complete the sale before 31.10.1979.
The judgment of the Division Bench of the Madras High Court reported in Namazi, N.B. v. Central Chinmaya Mission Trust 100 L.W. 582 is
also in support of the point that time is not of the essence of the contract and that mere delay is not sufficiet to deny specific performance unless
there is waiver or abandonment. The decision says that when a major part of the consideration is paid, the purchaser cannot be said to be not
ready and willing, merely because of delay due to supervening circumstances. It is added therein that if there is nothing to suggest in the conduct of
the plaintiff who has come forward with a suit for specific performance of the agreement implying an abandonment, the contract will have to be
enforced. The decision reported in Dr. Jiwan Lal and Others Vs. Brij Mohan Mehra and Another, is indicative on the point that where the plaintiff
has been pursuing his claim under an agreement on the date of institution of the suit was not likely to cause any prejudice to the other party, the suit
cannot be dismissed on account of the delay. The ruling reported in Mahabir Mahto v. Sanjha AIR 1973 Patna 113 appearing in the brief head-
note is as follows:
A relief for specific performance is an equitable relief and if there are lapses on the part of the person suing for such a relief it may be refused to
him. But, lapses is not the same thing as mere delay. A claim for specific performance of contract, if filed within the period of limitation, cannot be
defeated on the mere ground of delay, unless the delay amounts in the circumstances of the particular case, to an abandonment of the plaintiffs
claim for specific performance of the contract or circumstances have so changed that the granting of the relief for specific performance could
prejudice the defendant.
Waiver, abandonment or acquiescence cannot be inferred merely from the period of delay.
The Court cannot arbitrarily apply a time-limit to non-suit a litigant who, under the statutory provisions is entitled to seek the relief within a
prescribed period.
If we consider the facts of the present case, we will certainly find that time is not of the essence of the contract and that mere delay on the part
of the plaintiff in completion of the sale will not disentitle the plaintiff from seeking the relief of specific performance of the agreement. Evidently;
there is no question of abandonment or waiver of the claim by the plaintiff, and on the other hand, he has been pursuing his claim for specific
performance of the agreement and he has been ready and willing to complete the sale. If there was delay on the part of the plaintiff in the
completion of the sale, it cannot be characterized as lapses on his part and it must be deemed as mere delay due to supervening circumstances.
The supervening circumstances in the present case are the implied covenant between the parties to convey the property in its entirety to the
plaintiff, though under two separate agreements, the impossibility of conveying the first and second, floors of the building to one person and the
ground floor with the land to another person, the purchase of the first floor and the second floor already by the plaintiff and the calamities that
occurred in the family of the plaintiff in October, 1979. No prejudice can be said to be caused to the first defendant if the first defendant is directed
to specifically perform the contract in Ex.P-1 and execute the sale deed in favour of the plaintiff in respect of the ground floor of the building with
the land. On the other hand, the first defendant must be said to be benefited by the advance of Rs. 5,000/- paid by the plaintiff on 21.3.1979 and
also the continued possession and enjoyment of the ground floor portion and collection of rent from the second defendant, If at all, it is only the
plaintiff who will be put to serious prejudice, if the first defendant would not convey the ground floor with the land in favour of the plaintiff.
A contract for sale of property in one lot is generally considered indivisible, the reason being that there will be obvious injustice in compelling
the purchaser of the entirety to take undivided parts or shares of the property. Where a vendor would agree to sell two parts or lots of one and the
same property at one and the same time for one sum, the contract may be construed as entire unless there is some express clause making it
separable from the other. If there are contracts more than one, we may assume that each contract may be separately and independently enforced
but if substantial and intimate connection shown between apparently distinct agreements, we have to take it that the parties intended the property
covered by both the agreements to be dealt with as a whole and not piecemeal. The enforcement of contracts rests in the sound discretion of the
Court- a discretion which is reasonable and guided by the judicial principle and, therefore, the Court may grant the relief of specific performance
according to the circumstances of each particular case. The fairness or otherwise of a contract is judged at the time it is entered into. Unless
hardship arises to a degree of inconvenience and absurdity so great that the Court can judicially say that such could not be the meaning of the
parties, it cannot influence its decision.
We find that the present case is one in which two contracts in respect of two parts of one and the same property, on one and the same date,
for a total sum of Rs. 1,65,000/- have been entered into and that both the contracts have substantially intimate connection between each other and
that, if at all, both the parts of the property must be sold as the entire property to the purchaser (plaintiff), as otherwise much absurdity will occur
and great prejudice will be caused to the plaintiff We can succinctly and reasonably state here that the present suit is One founded on part
performance of one of the two contracts which are intimately connected to each other and that the first defendant is really charged upon the equity
resulting from the act done in execution of the contract, and if such equities are excluded, injustice may follow. The part performance which we
mean here and which is relied upon by the plaintiff is the purchase of the first floor and the second floor of the building by the plaintiff in
performance of Ex.P-2 which is one of the two contracts. It is urged on the side of the plaintiff that in equity, the first defendant is bound to
perform the other contract (Ex.P-1) also and convey the ground floor with the land to the plaintiff, as otherwise, it will result in hardship and
injustice to the plaintiff.
There can be no doubt that the jurisdiction of the Court to decree specific performance of an agreement is discretionary. At the same time,
S.20(1) of the Specific Relief Act says that the discretion of the Court should not be arbitrary, but must be sound and reasonable guided by judicial
principles and capable of correction by a court of appeal. S..20(3) says that ""the Court may properly exercise discretion to decree specific
performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific
performance"". The decisions reported in Ajit Prashad Jain v. N.K. Widhani AIR 1990 Del 42 A.M. Gandhisan v. Ayyasami 1979 I MLJ 270=92
L.W. 146. and Satyanarayana v. Yelloji Rao AIR 1975 S.C. 1405 are all on the same point. At the same time, the decision in Ajit Prashad Jain v.
N.K. Widhani AIR 1990 Delhi 42 adds that ""it is equally well settled that in cases of contracts for sale of immovable properties the grant of relief
of specific performance is a rule, and refusal an exception on valid and cogent grounds shown"". The observations in A.M. Gandhisan v. Ayyasami
1979 I MLJ 270=92 L.W. 146 may usefully be extracted here:
It is well known that the relief of specific performance is an equitable relief and it is in the discretion of the Court in the light of the facts and
circumstances of the case, either to refuse or grant the relief for specific performance. At the same time, it should not be lost sight of that the
discretion to be exercised by the Court should not be arbitrary but based on sound judicial principles .
The principle stated in Satyanarayana v. Yelloji Rao is that the cases of specific performance of the agreements providing for a guide to Courts to
exercise discretion one way or other are only illustrative; they are not intended to be exhaustive. It is also added therein that the discretion cannot
be defined and that Court should consider and decide this point in the light of the facts and circumstances of each case. We clearly find that in the
present case the Court has to necessarily exercise its jurisdiction to grant a decree for specific performance of the agreement (Ex.P-1) as it is fair,
just, equitable and not oppressive or prejudicial to the defendant.
I am not inclined to accept the contention raised on behalf of the first defendant that the Court should refuse to exercise its discretion to grant
the decree for specific performance. The allegation of the first defendant that the plaintiff was not ready and willing to perform his part of the
contract and complete the sale does not find favour with this Court. Even the other allegation that the plaintiff has not come forward with a true
case and that false statement have been made in the plaint and false evidence has been adduced by P.W.1 during trial, also is not acceptable. If the
plaintiff has averred in the plaint and if P.W.1 has also deposed in his evidence that after Ex.-1, the first defendant made his presence scarce in
Madras and he could not be contacted in Madras or Bangalore to which place he had shifted his residence and that the first defendant had gone to
Pakistan, it cannot be said to be wholly incorrect. Evidently, the first defendant was a resident of Madras at the time of Exs. P-1, P-2, P-3 as his
residential address has been mentioned as 51, Sembudoss Street, Madras-1. The first defendant has shifted his residence to Bangalore where he is
said to be running a business. P.W.1 would say that his efforts to see and contact the first defendant in Madras and to contact him on phone at
Bangalore from Madras had failed as the first defendant was not seen in Madras and the first defendant was said to be not available at Bangalore.
One Akthar who is the manager of the first defendant at Bangalore is said to have informed P.W.1, the father of the plaintiff that the first defendant
was not available at Bangalore. Further, the first defendant cannot be said to have never visited Pakistan. He is in possession of a passport (Ex.D-
2) and he says that he had been to Pakistan in January and February, 1979. Admittedly, he had lost his first wife and has married a second wife,
P.W.1''s evidence is that the first defendant had been to Pakistan to marry a second wife after the death of his first wife and that, therefore, he was
not available in Bangalore. Here also, it has to be pointed out that the demise of the first wife of the first defendant and his marrying a second wife
are true. But, the first defendant would say that the death of his first wife occurred in 1972 and his marriage of the second wife took place in 1974.
Probably, P.W.1 who was at. Madras was informed that the first defendant was not available in Bangalore for these reasons. Therefore, the
plaintiff or P.W.1 cannot be said to be wholly false in their statements.
The meeting of the first defendant by the plaintiff, P.W.1 and his wife at Bangalore in November, 1979 and the assurance given by the first
defendant to go to Madras in the first week of December to execute the sale deed cannot be said to be untrue. It is admitted by the first defendant
himself that P.W.1, his wife and the plaintiff met and talked to him at his residence in November, 1979. This meeting has obviously taken place
after 14.11.1979 when the plaintiff sent Ex.P-10 telegram asking the first defendant to go to Madras and execute the sale deed on 15.11.1979. It
is, therefore, possible to presume that the first defendant had promised to go to Madras in the first week of December, 1979 and execute the sale
deed in favour of the plaintiff.
Of course, the plaintiff has averred in his plaint that the draft sale deed relating to Ex.P-1 was sent to the first defendant. But, D.W.1 would
deny the same during the trial. Even if a draft sale deed was not sent by the plaintiff to the first defendant as a preliminary for the first defendant
obtaining income tax clearance certificate and the execution of the sale deed, it is of little consequence. Even the first defendant could have
prepared a draft sale deed in respect of the ground floor as it is only part of the property that remained after safe of the first floor and the second
floor to the plaintiff under Ex.P-3. The description of the property to be conveyed to the plaintiff in pursuance of Ex.P-1 may not be anything new
or different to the first defendant who is the owner of the property. It appears that he had already obtained income tax clearance certificate by
preparing a draft sale deed of his own in respect of the sale of the first floor and the second floor of the building. Even with regard to the sale of the
ground floor in favour of the second defendant under Ex.D-3 dated 29.11.1979, the first defendant must have prepared the draft sale deed for the
purpose or getting income tax clearance certificate. D.W.2, the son of the second defendant has stated that the second defendant did not give the
draft sale deed to the first defendant to get the income tax clearance certificate and that the first defendant himself got it. If that is so, there was no
impediment at all on the part of the first defendant to prepare a draft sale deed and obtain the income tax clearance certificate on that basis. Even
Ex.P-1 does not say that there was an obligation on the part of the plaintiff (purchaser) to prepare and send a draft sale deed to the first defendant.
It has, therefore, to be said in the circumstances that nothing will turn out on the failure of the plaintiff sending the draft sale deed to the first
defendant. The failure of the plaintiff to send the draft sale deed cannot be termed as a breach committed by the plaintiff which stood in the way of
performance of the contract and completion of the sale. Even otherwise, I find that the above statement and evidence on the side of the plaintiff will
not in any way alter the decision and influence the Court to refuse the decree for specific performance.
The decisions cited by the learned counsel for the first defendant in Vyapuri Gounder v. (Minor) Vijayan 1978 TLNJ 62, G. Rosaiah Vs. C.
Balarami Reddy and Another, are all, of course, on the point that the plaintiff who comes forward with the equitable relief of specific performance
of an agreement should come with clean hands and not with false averments unworthy of acceptance. There can be no quarrel over this principle.
But, the point here is how far the alleged false or incorrect statements made on the side of the plaintiff are likely to affect the truth of the plaintiffs
claim, If the plaintiff is criticised for making some statements or adducing some evidence which are characterised as false or incorrect, then the first
defendant will also be a person to be criticised. When evidently two agreements (Exs.P-1 and P-2) have been entered into between him and the
plaintiff for the sole object of the first defendant getting the benefit of reduction of capital gains tax, his evidence is that it is not so and he would say
that because the plaintiff did not have the sufficient funds for the purchase of the entire property at one time, two separate agreements (Exs.P-1 and
P-2) were entered into. This version of the first defendant is found to be all the more untrue.
The second defendant cannot be said, by any stretch of imagination, that she is a bonafide purchaser of the suit property. Once we find that the
first defendant is bound to convey the suit property (ground floor with the land) as per Ex.P-1 and that he ought not to have conveyed the same to
the second defendant, we have to hold that the sale by the first defendant to the second defendant under Ex.D-3 is not valid and that the second
defendant will not derive title to the suit property. Even otherwise, the evidence of D.W.2, son of the second defendant himself will unambiguously
show that the second defendant is not a bonafide purchaser of the suit property and that she has purchased the property with a view to complicate
the matter and harass the plaintiff. D.W.2 would state in his evidence that the sale of the suit property by the first defendant in favour of the second
defendant under Ex.D-3 has taken place on 29.11.1979 and that the negotiation for the sale took place from the first week of November, 1979.
Already, on 21.3.1979, two agreements (Exs. P-1 and P-2) between the plaintiff and the first defendant have come into existence in respect of
parts of the same property, and the sale of the first floor and the second floor of the building in favour of the plaintiff has taken place under a
registered deed as early as on 29.3.1979. The shop of the plaintiff is just ten shops away from the suit property where the second defendant is
doing textile business. D.W.2 says that he did not go to the plaintiff and verify whether the agreement (ExP-1) was cancelled and whether what
was stated by the first defendant to him was correct. If the second defendant was a bonafide purchaser she would not have ventured to purchase
the suit property as such. Further, D.W.2 says that he did not see any other documents except Exs.P-1 and P-2 and the correspondence that
passed on between the plaintiff and the first defendant before the execution of the sale deed (Ex.D-3).
It is admitted by D.W.2 that the purchaser of the first floor and the second floor of the building cannot possibly possess and enjoy that portion
of the property without his owning the ground floor in the building which is the subject-matter in Ex.P-1, as the main entrance for the entire building
is in the ground floor and the staircases leading to the first floor and the second floor are within the building itself. One simple question which may
be put to the second defendant in this context is whether she would have ventured to purchase the first and the second floors of the building in case
the plaintiff had already purchased the ground floor with the land. Certainly she would not do it. As already pointed out, the second defendant who
is already a tenant in the premises, has somehow won over the first defendant to her side and made him sell the ground floor with the land in her
favour without having regard to the legal consequences of Ex.P-1. It is strange that the second defendant would state in her written statement that
she is a bonafide purchaser of the suit property without notice of the agreement, when the sale deed (Ex.D-3) explicitly mentions about the
agreement (Ex.P-1) and its cancellation by the first defendant, and D.W.2 would also admit the knowledge of the agreement (Ex.P-1) prior to
execution of Ex.D-3. We cannot hold that the second defendant is a bonafide purchaser of the suit property.
I hold on the issue that the plaintiff was ready and willing to perform his part of the contract (Ex.P-1), that time is not of the essence of the
contract, that the first defendant has no right to cancel the contract unilaterally, that the sale by the first defendant in favour of the second defendant
under Ex.D-3 is not valid, that the second defendant is not a bonafide purchaser for value and that the plaintiff is entitled to the relief of specific
performance of the agreement (Ex.P-1). Issue No. 5: In the result, the suit is decreed for specific performance of the agreement of sale dated
21.3.1979 (Ex.P-1) directing the defendants to execute and register the sale deed in respect of the suit property and directing the defendant to
deliver vacant possession of the suit property to the plaintiff. The plaintiff shall deposit the balance of sale consideration in Court within two months
from the date of this decree. The defendants shall execute the sale deed in favour of the plaintiff within three months from the date of decree and
shall withdraw the amount deposited towards the sale price in Court. In default of the defendants executing the sale deed in favor of the plaintiff as
aforesaid, the sale shall be executed through Court. The defendants shall pay costs to the plaintiff.