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Kantamani Seeta Ramachandra Rao and Others Vs. Meesana Mohana Rao and Others - Court Judgment

LegalCrystal Citation
SubjectProperty ;Contract;Limitation
CourtAndhra Pradesh High Court
Decided On
Case NumberSA No. 460 of 1989
Judge
Reported in1999(1)ALD177; 1999(1)ALT154
ActsAndhra Pradesh Vacant Land in Urban Areas (Prohibition of Alienation) Act, 1972 - Sections 4(1 and 2), 5 and 10; Indian Contract Act, 1872 - Sections 56; Limitation Act, 1963 - Sections 6 - Schedule - Article 54; Code of Civil Procedure (CPC), 1908 - Sections 100; Registration Act, 1908
AppellantKantamani Seeta Ramachandra Rao and Others
RespondentMeesana Mohana Rao and Others
Appellant Advocate Mr. N.V. Subrahmanya Murthy, Adv.
Respondent Advocate Mr. P. Radhakrishna for M.S.K. Sastry, Adv.
Excerpt:
.....is not bad of multifariousness and that the plaintiff is entitled for specific performance of the suit agreement with respect to item no. al dated 11-1-1972, that there was an understanding between the parties as incorporated in the agreement that the purchaser should pay the balance consideration within three months from the date of the agreement and obtain registered sale-deed and as the purchaser failed to comply with the said stipulation, there is default on the part of the purchaser in complying with the said understanding hence the plaintiff is not entitled for specific performance of the contract and the suit is liable to be dismissed on that count. there is much force in this contention of the learned counsel for the respondent-plaintiff admittedly, this aspect has been dealt..........following issues for trial:1. whether the plaintiff is entitled for specific performance of the suit agreement of sale; 2. whether suit is bad for multifariousness; and 3. whether the suit is barred by time. the plaintiff got himself examined as pw1 and got marked exs.al to a7. the 1st defendant got himself examined as dw1 and exs.b1 to b3 were marked on behalf of the defendants. on a consideration of the oral and documentary evidence on record the trial court held that the suit is not barred by time, that the suit is not bad of multifariousness and that the plaintiff is entitled for specific performance of the suit agreement with respect to item no.1 only. the trial court held that the time is not the essence of the contract. the trial court further held that the contesting.....
Judgment:

1. This appeal is directed against the judgment and decree dated 20-4-1989 passed by the learned Subordinate Judge at Kowur in AS No.53 of 1982 on his file confirming the judgment and decree dated 31-3-1982 passed in OS No.726 of 1978 on the file of the Principal District Munsif at Kowur, West Godavari district.

2. The appellants herein are defendants 1, 2, 5 to 8 and the respondent No.l is the plaintiff and respondents 2 and 3 herein arc the defendants 3 and 4 in that suit OS No.726 of 1978. This appeal against R2 and R3 was dismissed for default by the order dated 23-4-1993. The parties are being referred as they are arrayed in the suit for the sake of convenience.

3. The 1st respondent-plaintiff filed the said suit for specific performance of agreement of sale dated 11-1-1972 directing the defendants to execute a registered sale-deed in terms of the agreement and put the plaintiff in possession of the same and in default permit the plaintiff to take the sale-deed through Court. The plaintiffs case is that late Atchuta Rama Rao and defendants 1 to 6 who are his sons are the owners of the suit property. The 7th defendant is the widow and defendants 8 and 9 are the daughters of late Atchiita Rama Rao. The suit property consists of two items. The 1st item consists of 350 Sq.yards in RS No.645 within the specific boundaries and item No.2 consists of 126 Sq.yards in the same survey number within the specific boundaries adjoining item No.l. Late Atchuta Rama Rao and the defendants 1 to 6 agreed to sell item No. 1 to the plaintiff for Rs.4,025/- and after receiving a sum of Rs. 1,1007- the defendants executed the agreement of sale dated 11-1-1972 (Ex.A-1) in favour of the plaintiff. It was agreed that the balance of sale consideration of Rs.2,925/ - has to be paid by the plaintiff within three months from the dated of the agreement and to obtain the registered sale-deed at his expense. The plaintiff made a further payment of Rs.500/- on 12-2-1972 to late Atchuta Rama Rao who received on his behalf and on behalf of his sons and made endorsement on Ex.Al and the plaintiff was also directed to pay the balance of consideration to 3rd defendant. Accordingly, the plaintiff made the payments of Rs.1,400/- on 1-3-1972 and Rs. 1,025 on 6-2-1972 to the 3rd defendant who made endorsements Exs.A3 and A-4 on the agreement of sale Ex.Al. It is also the case of the plaintiff that the 3rd defendant received a further payment of Rs.1,000/- on 12^-1972 towards the sale consideration of item No.2 of the suit property and agreed to sell the same to the plaintiff. Thus the defendants received the entire sale consideration under the agreement of sale under Ex.Al, that in view of the ordinance prohibiting the alienation of properties the plaintiff could not enforce the contract of sale Ex.Al and after that ordinance has been repealed by Act 33 of 1976 on 17-2-1976 the plaintiff became entitled to obtain a registered sale-deed under that agreement of sale. Thereafter the plaintiff issued registered notice dated 14-4-1978 under Ex.A6 to the defendants. The defendants though received the notice failed to give any reply except D3, and D3 written a letter dated 18-5-1978 under Ex.A7 expressing his willingness and readiness to execute the sale-deed. Thus as the defendants, except D3, failed to perform their part of tire contract after receiving the entire sale consideration tire plaintiff has filed the suit for the reliefs as stated supra. The defendants 3 and 4 remained ex-parte,

4. Resisting the claim of the plaintiff the 1st defendant filed a written statement and the defendants 2, 5 to 9 adopted the same. The defendants admitted the execution of the agreement of sale Ex.Al in favour of the plaintiff. They also admitted the receipt of advance amount of Rs. 1,000/- but they pleaded that they were not aware of the receipt of Rs.500/- by late Atchuta Rama Rao and the endorsement made by him under Ex.A-2. It is their positive case that the time is the essence of the contract, that it was agreed between the parties, that the balance of the sale consideration of Rs.2,925/- should be paid within three months from the date of the agreement and obtain the registered sale-deed, that the plaintiff committed default in performing his part of the contract. The defendants also pleaded that they did not agree to sell item No.2 of the suit properties and they did not authorise the 3rd defendant to receive the balance of the sale consideration and to make endorsements under Exs.A3 to A5 and that tire 3rd defendant has colluded with the plaintiff in the suit and that the suit is barred by time.

5. The trial Court settled the following issues for trial:

1. Whether the plaintiff is entitled for specific performance of the suit agreement of sale;

2. Whether suit is bad for multifariousness; and

3. Whether the suit is barred by time.

The plaintiff got himself examined as PW1 and got marked Exs.Al to A7. The 1st defendant got himself examined as DW1 and Exs.B1 to B3 were marked on behalf of the defendants. On a consideration of the oral and documentary evidence on record the trial Court held that the suit is not barred by time, that the suit is not bad of multifariousness and that the plaintiff is entitled for specific performance of the suit agreement with respect to item No.1 only. The trial Court held that the time is not the essence of the contract. The trial Court further held that the contesting defendants had not authorised the 3rd defendant either to receive the balance consideration or to make the endorsements and that they have not authorised D3 to sell item No.2 on their behalf Consequently, the trial Court decreed the suit granting the relief of specific performance of agreement of sale with respect to item No.l only subject to the plaintiff depositing the balance consideration of Rs.2,955/- within three months. Aggrieved by the judgment and decree the defendants 1, 2, 5 to 9 preferred the appeal AS No.53 of 1982. The first appellate Court set out the point for determination as whether the time is the essence of contract of sale for item No.1 of the plaint schedule land, and if so whether the plaintiff is not entitled for specific performance of contract of sale. On a reappraisal of the entire evidence on record, the first appellate Court held on that point that time is not the essence of the contract and that and that the plaintiff is entitled for specific performance of the agreement of sale dated 11-1-1972 for item No. 1 of the plaint schedule property and consequently dismissed the appeal with costs and confirmed the judgment and decree of the trial Court. Challenging the said judgment and decree of the first appellate Court the defendants 1, 2, 5 to 9 have come up this this second appeal.

6. Heard the learned Counsel on either side. Learned Counsel for the appellants took me through the impugned judgment in AS No.53 of 1982 and also that of the trial Court and the evidence on record. Learned Counsel for the appellants mainly raised two contentions. Firstly, that the time is the essence of the contract under Ex.Al dated 11-1-1972, that there was an understanding between the parties as incorporated in the agreement that the purchaser should pay the balance consideration within three months from the date of the agreement and obtain registered sale-deed and as the purchaser failed to comply with the said stipulation, there is default on the part of the purchaser in complying with the said understanding hence the plaintiff is not entitled for specific performance of the contract and the suit is liable to be dismissed on that count. Learned Counsel for the respondent-plaintiff on the other hand, submits that both the Courts have concurrently held that time is not the essence of the contract and that there is no breach of contract on the part of the plaintiff. He further submits that the said finding is a finding of fact and this Court is barred from interfering with the said finding of fact while exercising jurisdiction under Section 100 CPC. There is much force in this contention of the learned Counsel for the respondent-plaintiff Admittedly, this aspect has been dealt with by the trial Court as well as the first appellate Court. The trial Court dealt with this aspect in Paras 11 and 12 of its judgment and held that the time is not the essence ofthe contract. The first appellate Court also set out the point for consideration as to whether the time is the essence of the contract of sale dated 11-1-1972 and it has discussed this aspect at length in Para 12 of its judgment and ultimately confirmed the finding of the trial Court. It is not disputed that the finding on whether time is the essence of the contract is a finding of fact and this Court is barred from exercising its jurisdiction under Section 100 CPC. to interfere with the said finding of fact. In Dudhnath Pandey (dead) by L.R.s v. Suresh Chandra Battasali (dead) by L.Rs., : AIR1986SC1509 , the Apex Court held that 'High Court cannot set aside the findings of fact of the first appellate Court and come to a different conclusion on a reapparisal of the evidence contrary to the findings recorded by the first appellate Court.' There are catene of decisions in support of this view. In K. Subramaniayam v. S. Nagappa, 1986 (I) ALT 32, it has been held that where the reasons given by the appellate Judge arc perverse and there is no consideration at all in the appeal it constitutes a substantial question of law within the meaning of Section 100 CPC. But when the 1st 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 on facts the same does not deserve to be interfered with by the High Court in second appeal. The High Court is justified in interfereing only when it is made out that the findings given by the lower appellate Court are vitiated by non consideration of the relevant evidence or failed to meet the points raised-by the trial Court in appreciating the evidence on record or the approach to decide the case is quite erroneous or where there is perversity in the finding of fact or where there is deliberate mistake or when it is the result of surmises and conjuctures.

7. In the instant case the appellate Court had considered the entire evidence on record and agreed with the finding of the trial Court that the time is not the essence of the contract in this case. This finding cannot be said to be perverse nor it can be said that it is vitiated due to non consideration of the relevant evidence on record-Therefore, this Court is not inclined to interfere with the said finding of fact.

8. The second contention raised by learned Counsel for the appellants is that the plaintiffs suit is barred by time. This plea was also taken by the 1st defendant in his written statement. This aspect has been considered by the trial Court as issue No.3 and it was held in favour of the plaintiff for the reason that the plaintiff was prevented from filing the suit in view of the promulgation of ordinance by the Government prohibiting alienations of vacant sites and this ordinance was later repealed by A.P. Vacant Lands in Urban Areas (Prohibition of Alienations) Act, 1972 (Act 12 of 1972) on 5-6-1972 and therefore the plaintiff was prevented by a statute in filing the suit for specific performance of the contract of sale. But as could be seen from the impugned judgment of the first appellate Court this plea of limitation was not raised before the first appellate Court. It is well settled that the point of limitation can be raised even in the second appeal. Hence the substantial question of law involved in this appeal is whether the plaintiffs suit is not barred by time.

9. Admittedly, the plaintiff fried the suit for specific performance of the agreement of sale dated 11-1-1972. The execution of this document and receipt of payment of advance amount Rs. 1,1001- on the date of agreement are not disputed. As could be seen from the agreement Ex.A1, it was agreed that the purchaser-plaintiff should pay the balance of consideration within three months and obtain the registered sale-deed. It is no doubt, that the plaintiff has pleaded that he made further payments with regard to the balance of sale consideration obtained endorsements of payments under Exs.A-2 to A-5, but these payments and endorsements have been disputed by the contesting defendants. The plaintiff presented the suit in the Court on 19-7-1978. The period of limitation as prescribed under the Limitation Act, 1963 for filing a suit for specific performance of any agreement of sale is three years. The period of limitation under this agreement is three years from the date of the agreement and the plaintiff is entitled to enforce the contract of sale within three years. Admittedly the present suit has been filed after a lapse of more than eight years from the date of execution of the agreement.

10. The explanation offered for the delay in filing the suit is that the ordinance prohibiting alienation of lands in urban areas came into force on 2-5-1972 and subsequently this was repealed by Act 12 of 1972 and ultimately the said Act was also repealed by Act 33 of 1976 on 17-2-1976 and that the period between 2-5-72 to 17-2-1976 has to be excluded in computing the period of limitation as the right to take action under the said agreement of sale remains suspended during that period. It is also pleaded that the plaintiff got issued registered notice dated 14-4-1978 under the original of Ex.A6 and as there was no response from the defendants the plaintiff filed the suit. Learned Counsel for the respondent-plaintiff vehemently contends that the period during which the ordinance was inforce till the date of its repeal by Act 33 of 1976 dated 17-2-1976 has to be excluded in computing the period of limitation and as such the suit is not barred by time. Learned Counsel for the appellants on the other hand submits that when once limitation starts it cannot stop and that the limitation period starts from 2-5-1972 but not from 17-2-1976 and that that period should not be excluded from computing. He further relied on a decision of Division Bench of this Court in the case C. Ramaiah v. Mohammadnnnisa Begum, : AIR1981AP38 . There is much force in this contention of learned Counsel for the appellants.

11. Admittedly, the suit has been brought for specific performance relating to an agreement of sale in respect of vacant lands entered into prior to the coming into force of the ordinance dated 2-5-1972 and the said ordinance was repealed by Act 12 of 1972 which was also repealed by Act 33 of 1976 on 17-2-1976. Learned Counsel for the respondent-plaintiff submits that the suit transaction which had taken place in January 1972 stands unaffected by the provisions of Act 12 of 1972 since the provisions of the Act have no restropective operation and therefore the transaction of sale under Ex.A1 is not frustrated and it can be enforced subsequent to the repeal of the said Act in 1976. It is therefore necessary to look into the relevant provisions of the Act 12 of 1972 which prohibited alienation of certain lands in urban areas in the State of Andhra Pradesh. Sections 4 and 5 of the said Act are relevant and they read as follows:

'Section 4. (1) No person who owns any vacant land shall on or after the commencement of this Act, alienate such land by way of sale; lease for a period exceeding six years, gift, exchange, usufructuary mortgage or otherwise, or effect a partition or create a trust of such land; and any alienation made, or partition effected, or trust created in contravention of this Section shall be null and void:

Provided that nothing in this sub-section shall apply to the alienation by any person of any one plot of vacant land owned by him not exceeding one thousand square metres in extent and not forming part of a compact block. (2) The provisions of sub-section (1) shall apply to any transaction of the nature referred to therein, in execution of a decree or order of a civil Court or of any award or order of any other authority,

Section 5. Notwithstanding anything contained in the Registration Act, 1908-

(a) no document relating to partition or creation of a trust of vacant land shall be registered on or after the commencement of this Act, by any registering officer appointed under the said Act;

(b) no document relating to alienation of a vacant land shall be registered by any registering officer appointed under the said Act, unless the person presenting the document furnishes a declaration by the transferor in the prescribed form which shall be subject to verification in the prescribed manner:

(i) that the plot of vacant land owned by him and intended to be alienated does not exceed one thousand squarer metres in extent;

(ii) that such vacant land docs not form part of a compact block; and

(iii) that no other plot of vacant land owned by him has been alienated on or after the commencement of this Act;

(c) a document relating to alienation or partition of any vacant land or the creation of any trust of any vacant land registered on or after the commencement of this Act shall for the purposes of Section 4, take effect and operate only from the time of such registration, notwithstanding that such document has not been registered within this State.'

Section 4 prohibits alienation of any vacant land by any person after the commencement of the Act by way of sale, gift, exchange etc., and it declares that any such alienation shall be null and void. Under the proviso, however, alienation of any one plot of vacant land not exceeding one thousand square metres by any person and not forming part of the compact block is exempted. Clause (b) of Section 5 specifically declares that no document relating to alienation of a vacant land shall be registered by any registering officer, unless the person presenting the document furnishes a declaration by the transferor in the prescribed form that the plot of vacant land owned by him and intended to be alienated docs not exceed one thousand square metres in extent and such vacant land does not form part of the compact block. Thus any alienation of vacant land which is not covered under the proviso to Section 4(1) of the Act by means of a registration made subsequent to the Act is hit by Section 4(1) of the Act and shall be null and void. In other words, any registration made after coming into operation of the Act, although in pursuance of the agreement of sale entered prior to coming into force of the Act, shall be null and void. Further under sub-section (2) of Section 4 even a registration made in pursuance of a decree or order of a civil Court after the coming into operation of the Act shall be null and void. Therefore, there cannot be any specific performance of such an agreement after the coming into force of the Act in respect of vacant land covered by the Act. Further, Section 10 of the Act gives an overriding effect to the provisions of the Act over any other law inconsistent therewith or any custom, usage or agreement or decree or order of a Court, Tribunal or other authority. Therefore the performance of the contract of sale has become impossible and as such there was frustration of agreement of sale. Under Section 56 of the Contract Act, the contract to do an Act which after the contract is made become impossible or by reason of some event which the promissor could not prevent unlawful, becomes void when the contract becomes impossible or unlawful. In the instant case, the agreement of sale, Ex.Al, became impossible because of the provisions of Sections 4 and 5 of the Act and as such it is void. This view finds support from the decision of the Division Bench of this Court, ( : AIR1981AP38 supra). In a decision rendered in the case of Satyabrata Ghose v, Mugneeram Bangur & Co. and Anr, : AIR1954SC44 , the Supreme Court held that in view of the ordinance and Act 12 of 1972 that the said agreement of sale has become impossible and therefore frustrated and void. These decisions of the Supreme Court and of this Court are binding on me. Hence, the agreement of sale, Ex,A-l, has become frustrated as it became impossible in view of the ordinance and Act 12 of 1972.

12. Further, as contended by the learned Counsel for the appellants the provisions of Act 12 of 1972 are not applicable to the instant case in view of the proviso to Section 4 of the Act. As earlier quoted the provisions under Section 4(1) do not apply to the alienation by any person of any one plot of vacant land owned by him not exceeding one thousand square metres in extent and not forming part of a compact block. Therefore, if the plot agreed to be sold is less than one thousand square metres there is no prohibition of alienation of such lands and for registration of that plot under Sections 4 and 5 of the Act. In the instant case, the agreement of sale Ex.Al relates to a vacant site the extent of which is less than one thousand square metres. Therefore the provisions of Section 4 and 5 of the Act are not applicable and as such there was no prohibition for execution of registered sale-deed with respect to the suit land. Both the Courts below failed to consider this aspect and committed error in holding that the plaintiff was prevented from obtaining a registered sale-deed as there is statutory prohibition in obtaining the registered sale-deed. Under these circumstances, it has to be held that the plaintiff's suit is barred by time and as such the appeal has to be allowed.

13. In the result, the appeal is allowed and the Judgment and decree of both the Courts below are set aside and the suit OS No.726 of 1978 is dismissed. The parties are directed to bear their own costs.


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