Azhar Sultana Vs. B.
Rajamani & Ors  INSC 343 (17 February 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1077 OF 2009 (Arising out
of SLP (C) No.6949 of 2005) Azhar Sultana ... Appellant Versus B. Rajamani
& Ors. ... Respondents
S.B. Sinha, J.
purchasers who were arrayed at a later stage in a suit for Specific Performance
of Contract are before us aggrieved by and dissatisfied with a judgment and
order dated 21.12.2004 passed by a learned Single Judge of the High Court of
Andhra Pradesh at Hyderabad allowing the appeal from a judgment and order dated
21.7.1993 passed by the First 2 Additional Judge, City Civil Court, Hyderabad
in OS No.1436 of 1981 dismissing the suit of the plaintiff--appellant herein.
factual matrix involved herein is as under :
The property in
question admittedly belonged to one Ramesh Chand Khanna, the original
defendant. An agreement of sale was entered into by and between the appellant
and the said Ramesh Chand Khanna in terms whereof the suit land was agreed to
be sold at the rate of Rs.325/- per sq. yd.
A sum of Rs.30,000/-
was paid by way of advance.
now stands admitted that on or about 7.12.1981, an application was filed in
terms of Section 27 of the Urban Land Ceiling and (Regulation) Act, 1970. The
said application was rejected.
It is also not in
dispute that a suit was filed by one Bahadur Hussain against the original
defendant. The said suit was decreed in favour of the said Shri Bahadur
Nos. 5 and 6 entered into a deed of sale dated 31.10.1981 with the said Ramesh
Chand Khanna (since deceased) for a land measuring 217 sq. yds. for a
consideration calculated at the rate of Rs.48,000/- per bigha wherefor
negotiation had to be entered into for settlement of the dispute by and between
Ramesh Chand Khanna and the said Bahadur 3 Hussain. Only after execution of
the deed of sale, a notice was issued by the appellant asking Shri Khanna to
execute a deed of sale in his favour.
The suit for specific
performance was filed on or about 7.12.1981.
hereinbefore, in the original suit the defendant Nos.5 and 6 were not impleaded
as parties. A written statement was filed by Shri Khanna on or about 30.8.1983
wherein he disclosed the factum of execution of the deed of sale dated
31.10.1981. The said defendants were impleaded as parties. One of the
contentions raised by the said impleaded defendants was that they were
subsequent purchasers for value and without notice to the original agreement
for sale entered into by and between the appellants and the said Shri Khanna.
view of the pleadings of the parties, the learned Trial Judge framed the
following issues :
"1) Whether the
plaintiff is entitled for specific performance of agreement in respect of suit
schedule property? 2) Whether the suit is barred by limitation? 3) To what
relief? Additional issues were also framed, viz. :
1) Whether the
defendant No.6 is a bona fide purchaser of the suit property for value 4
without notice of the suit agreement of sale in favour of the plaintiff? 2)
Whether the suit agreement of sale is not binding on the defendants including
the defendant Nos.5 and 6?"
The learned trial
Judge decreed the suit, inter alia, opining that defendant Nos.5 and 6 had
knowledge about the agreement of sale entered into by and between the plaintiff
and Khanna and, thus, the provision of Section 19(b) of the Specific Relief Act
was not attracted.
the learned Trial Judge, the plaintiff-appellant did not examine herself. On
her behalf, her husband who was also the holder of a General Power of Attorney
The learned Trial
Judge held the agreement dated 4.12.1978 to be enforceable. It was furthermore
held that the suit was not barred by limitation. It was observed that although
grant of a decree for specific performance of a contract is discretionary in
nature but as the plaintiff had paid a substantial amount, she should be held
to be entitled thereto.
The defendant Nos.5
and 6 preferred an appeal there against. By reason of the impugned judgment, as
noticed hereinbefore, the High Court allowed the said appeal. The High Court
formulated the following points for its consideration in terms of Order 41 Rule
31 of the Code of Civil Procedure, which are as under:
plaintiff is entitled to seek enforcement of specific performance of Ex.A1,
agreement of sale? 2) Whether sixth defendant is bona fide purchaser of the
suit schedule property having paid her consideration in good faith and without
notice of the original contract? And 3) Whether the discretion of this Court
ought not to be exercised in favour of the plaintiff for specific performance
Court in a suit for specific performance of contract is required to pose unto
itself the following questions, namely:
(1) Whether the
agreement of sale is valid and binding on both the vendor and the vendee; and
(2) Whether the plaintiff has all along been and still is ready and willing to
perform his part of the contract as envisaged under Section 16(c) of the
Specific Relief Act, 1963 (hereinafter referred to for the sake brevity as `the
was, however, held that readiness and willingness on the part of the plaintiff
to perform her part of contract having been conveyed in a telegraphic notice
(Exhibit A3); it was obligatory on the part of the plaintiff --appellant to
examine herself in the suit and as she did not examine herself, the legal
requirements envisaged under Section 16(c) of the Act cannot be said to have
been complied with. It was furthermore held that as no evidence was adduced to
establish that the amount of consideration which was required to be paid to the
defendant was available with the plaintiff, she was not ready and willing to
perform her part of contract. It was observed that for the aforementioned
purpose, contents of the legal notice dated 16/20.11.1981 (Ex.A3) would not be
decisive. Noticing that despite the fact that Section 27 of 1976 Act was
declared ultra vires by this Court in Maharao Sahib Shri Bhim Singhji;
Anantalakshmi Pathabi Ramasharma Yeturi & Ors.; Jodhan Real Estate
Development Co. (P) Ltd. & Anr.; Rajendra Garg Etc.; Shamshul Islam etc. v.
Union of India & Anr. [AIR 1981 SC 234] it was opined that as the said
provision was very much on statute book at the relevant time, the deed of sale
could not have been executed without obtaining such permission and even on that
score, the plaintiff appellant cannot derive any advantage to establish that
she had been ready and willing to perform her part of the contract.
The learned Judge was
of the opinion that as no leave was obtained by the plaintiff--appellant in
terms of Order VIII Rule 9 of the Code of Civil Procedure to file subsequent
written statement wherein, inter alia, it was alleged that defendant Nos.5 and
6 were subsequent purchasers with notice of the earlier agreement, no
cognizance thereof should have been taken and, thus, the trial court must be
said to have committed an error in considering the same. It was furthermore
opined that the trial Court committed an error in concluding that there had
been a collusion between the first defendant, 6th defendant and Bahadur Hussain
as would appear from the fact that neither PW1 nor PW3 who examined themselves
to support the case of the plaintiff made any statement in that behalf nor was
there any pleading in the plaint to that effect.
It was furthermore
opined that as the said defendants were in possession of the property which
would amount to a notice within the meaning of Section 3 of the Transfer of
Property Act, the plaintiff would be deemed to have knowledge thereabout.
regards the second point, the High Court opined that having regard to Section
19(b) of the Act, the plaintiff could not be granted specific performance of
the contract as against the said respondent who was a subsequent bona fide
purchaser for value and without notice in as much as DW1 categorically stated
that defendant No.1 had no knowledge of the said agreement for sale.
So far as the third
point which fell for determination of the learned Judge of the High Court is
concerned, it was held that as the 6th defendant had purchased the property as
far back as on 31.10.1981 and had been in possession enjoyment thereof for more
than 30 years, it was not a case where the discretionary jurisdiction in terms
of Section 20 of the Act should be exercised in her favour.
Uday .U. Lalit, learned senior counsel appearing on behalf of the appellant, in
support of this appeal would urge :
1) It was not
necessary for the plaintiff to examine herself as her husband who was her
General Power of Attorney holder was examined and particularly having regard to
Section 120 of the Indian Evidence Act.
2) For the purpose of
establishing the plea of readiness and willingness on the part of the vendee,
it was not necessary to prove that she had enough liquid cash in her hand
inasmuch as for the said purpose it would be sufficient to show that she could
arrange such an amount for payment of consideration at the appropriate stage.
3) Collusion by and
between Shri Khanna and Defendant Nos.5 and 6 is evident from the fact that the
deed of sale was executed three years after the execution of the agreement for
sale only for a sum of Rs.48,000/- although the amount of consideration on the
basis of the agreement for sale dated 4.12.1978 would have come to Rs.65,000/-
and out of which a sum of Rs.35,000/- had already been paid.
4) Defendant Nos.5
and 6 prior to their purchase of the lands in suit having not made any enquiry
nor having issued any public notice, the onus of proof that they were bona fide
purchasers for value and without notice, was on them.
5) The approach to
the entire case on the part of the High Court was wrong as would appear from
the fact that although the subsequent pleadings were held to be irrelevant, the
statements made in paragraph 9 thereof were relied upon by the High Court for
the purpose of showing that the statements made in paragraphs 5 and 6 of the
written statement had not been adverted to and, thus, would be deemed to have
been admitted, which even otherwise would amount to misreading and
misinterpretation of para nine of the rejoinder.
Ranjit Kumar, learned senior counsel appearing on behalf of the respondent, on
the other hand, urged :
1) Keeping in view
the peculiar facts and circumstances of this case, it is not a fit case where
this Court should exercise its jurisdiction under Section 20 of the Specific
Relief Act and in particular the fact that the respondent had been living in
the premises since 1981.
2) Reasons for
payment of a lower amount of consideration in respect of the suit premises must
be considered as Shri Khanna had already lost his suit in respect of the
property to Bahadur Hussain and it was only because of the intervention of the
said respondents, Shri Khanna could execute the aforementioned deed of sale.
3) Since the
agreement for sale dated 4.12.1978 it stipulates that in the event any defect
in title is found, the vendee was only entitled to obtain refund of the entire
amount of consideration, a decree for specific performance of contract could
not have been granted to the appellant.
4) Readiness and
willingness on the part of a vendee must be judged from the entire backdrop of
events upon taking into consideration the fact that the plaintiff did not issue
any notice and/or filed any suit for 11 a a period of three years wherefrom it
would be evident that he was not at all material times ready and willing to
perform his part of contract.
of the agreement and/or genuineness thereof is not in question. Plaintiff
indisputably in view of Section 16(c) of the Specific Relief Act, 1963 was
required to make requisite averments that she had all along been and still is
ready and willing to perform her part of the contract and also establish the
same. Shri Khanna in his written statement took a specific defence that as the
property was in litigation, plaintiff developed cold feet and did not evince
any interest to complete the sale transaction by paying the balance of sale
consideration. Even after selling the property, allegedly, the plaintiff's
representative was asked to take back the amount of Rs.30,000/-.
would, at this stage, notice the averments made in the said agreement for sale
dated 4.12.1978 :
"(i) That after
obtaining the permission from Celing Officer, I shall execute registration in
favour of the Purchaser within 2 months.
It shall be my
responsibility to obtain the permission from the Ceiling Office.
(ii) That the sale
property is free of all private and public charges and dues. If any 12
detected, I shall be responsible to clear the same. If any defect in title is
found, the entire advance money shall be returned.
(iii) That at the
time of the registration, I shall hand over the possession of the entire
property to the purchaser. The expenses of the Registration shall be borne by
Khanna filed an application for grant of approval for sale of the premises in
question. It was necessary as only in 1981, the said provision was declared
ultra vires. In view of the fact that approval was required to be obtained from
the competent authority, the plaintiff could not have proceeded on the
assumption that the suit could be filed within a period of three years from the
date of refusal on the part of the original defendant to execute the said deed
of sale in terms of the agreement.
Nos.5 and 6 were in possession of the properties. The deed of sale was a
registered one. Plaintiff, therefore, must be deemed to have notice thereof in
terms of Section 3 of the Transfer of Property Act.
She, however, neither
in her notice nor in her plaint raised any question with regard to the bona
fide or otherwise of the transaction of sale entered into by and between Shri
Khanna and the respondent Nos.5 and 6. Prior to execution of the said deed of
sale dated 30.10.1981, the suit filed by Khanna 13 against Bahadur Hussain was
dismissed by the appellate court by a judgment and decree dated 30.11.1978.
There does not appear to be any reason as to why the plaintiff cannot be said
to have been not aware thereof.
It was, therefore,
expected that not only the subsequent purchasers but also Bahadur Hussain be
impleaded as parties in the suit. It is of some significance to notice that
replication to the said written statement was filed wherefor no leave was
again, although the written statement was filed by Shri Khanna on 30.8.1983,
defendant Nos.5 and 6 were impleaded as parties only in the year 1987. It is
for the first time in the replication, the plaintiff alleged that there had
been a collusion by and between Khanna and Bahadur Hussain. Bahadur Hussain,
however, was not impleaded as a party.
Replication was filed
in 1991. Such a contention has been raised only in 1991 which was impermissible
may be true that the name of the purchaser was not disclosed but then it was
open to the plaintiff to ask for other and better particulars of the said
statements. Why she had to wait for a period of more than three years for
impeading the subsequent purchasers as parties has not been explained.
Even an application
for injunction was filed only in September 1985.
According to her
husband, she came to learn about the sale of property in 14 the name of
defendant No.5 only on 29.9.1986. Why an inquiry was not made in the
Registration Office although the deed of sale was a registered one again defies
anybody's comprehension. Readiness and willingness on the part of the
plaintiff, therefore, is required to be considered from the aforementioned
backdrop of events.
16(c) of the Specific Relief Act, 1963 postulates continuous readiness and
willingness on the part of the plaintiff. It is a condition precedent for
obtaining a relief of grant of specific performance of contract.
The court, keeping in
view the fact that it exercises a discretionary jurisdiction, would be entitled
to take into consideration as to whether the suit had been filed within a
reasonable time. What would be a reasonable time would, however, depend upon
the facts and circumstances of each case. No hard and fast law can be laid down
The conduct of the
parties in this behalf would also assume significance.
In Veerayee Ammal v.
Seeni Ammal [(2002) 1 SCC 134] it was observed :
concededly, the time was not of the essence of the contract, the
appellant-plaintiff was required to approach the court of law within a 15
reasonable time. A Constitution Bench of this Hon'ble Court in Chand Rani v.
Kamal Rani held that in case of sale of immovable property there is no
presumption as to time being of the essence of the contract. Even if it is not
of the essence of contract, the court may infer that it is to be performed in a
reasonable time if the conditions are (i) from the express terms of the
contract; (ii) from the nature of the property; and (iii) from the surrounding
circumstances, for example, the object of making the contract. For the purposes
of granting relief, the reasonable time has to be ascertained from all the
facts and circumstances of the case."
It was furthermore
"13. The word
"reasonable" has in law prima facie meaning of reasonable in regard
to those circumstances of which the person concerned is called upon to act
reasonably knows or ought to know as to what was reasonable. It may be
unreasonable to give an exact definition of the word "reasonable".
The reason varies in its conclusion according to idiosyncrasy of the individual
and the time and circumstances in which he thinks. The dictionary meaning of the
"reasonable time" is to be so much time as is necessary, under the
circumstances, to do conveniently what the contract or duty requires should be
done in a particular case. In other words it means, as soon as circumstances
permit. In P. Ramanatha Aiyar's The Law Lexicon it is defined to mean:
`A reasonable time,
looking at all the circumstances of the case; a reasonable time under ordinary
circumstances; as soon as 16 circumstances will permit; so much time as is
necessary under the circumstances, conveniently to do what the contract
requires should be done; some more protracted space than `directly'; such
length of time as may fairly, and properly, and reasonably be allowed or
required, having regard to the nature of the act or duty and to the attending
circumstances; all these convey more or less the same idea.' "
is also a well settled principle of law that not only the original vendor but
also a subsequent purchaser would be entitled to raise a contention that the
plaintiff was not ready and willing to perform his part of contract. [See Ram
Awadh (Dead) by LRs. & Ors. v. Achhaibar Dubey & Anr. [(2000) 2 SCC 428
are, however, in agreement with Mr. Lalit that for the aforementioned purpose
it was not necessary that the entire amount of consideration should be kept
ready and the plaintiff must file proof in respect thereof. It may also be
correct to contend that only because the plaintiff who is a Muslim lady, did
not examine herself and got examined on her behalf, her husband, the same by
itself would lead to a conclusion that she was not ready and willing to perform
her part of contract.
the plaintiff has failed to establish that she had all along been ready and
willing to perform her part of contract, in our opinion, it would not be
necessary to enter into the question as to whether the defendant Nos.5 and 6
were bona fide subsequent purchasers for value without notice or not.
grant of decree for specific performance of contract is discretionary. The
contesting respondents herein are living in the property since 1981 in their
own right. There is absolutely no reason as to why they should be forced to
vacate the said property at this juncture.
plaintiff herself has taken a positive plea that there had been a collusion
between Khanna and Bahadur Hussain. Such a case has neither been pleaded nor
proved. No issue in this behalf was framed. Even otherwise, the question of the
defendant's discharging the burden would arise provided the plaintiff is found
to be entitled to a decree for specific performance of contract.
however, agree with Mr. Lalit that the conduct of the respondent was not good
but, similarly, we cannot lose sight of the conduct of the appellants as well.
She had also not brought any evidence to show that she did not have the notice
of the said deed of sale.
We, therefore, are of
the opinion that interest of justice would be sub-served if this Court refuses
to exercise its discretionary jurisdiction in terms of Section 20 of the Act,
directing the defendant to pay a sum of Rs.60,000/- to the plaintiff which sum
would include the amount of advance paid by her.
appeal is disposed of. In the facts and circumstances of this case, however,
there shall be no order as to costs.