1. This appeal is brought by the plaintiff in OS No.9 of 1984 on the the of the Principal Subordinate Judge, Srikakulam. The suit is for specific performance of the agreement dated 8-8-1980 in respect of an agricultural land of an extent of Ac.3.24 cents in S.No.192/5 of Suryaraopeta, Kakinada or in the alternative to refund the advance of Rs.80,000/- along with interest. The Court below partly decreed the suit directing refund of the advance and rejected the relief for specific performance.
2. Defendants 2 to 5 are the sons of Dl and all of them constitute Hindu Joint Family. The defendants agreed to sell the property at the rate of Rs.70,000/- per acre and the agreement of sale was executed and an advance of Rs.30,000/- was paid on the date of execution. It was agreed that the appellant should pay an amount of Rs.50,000/-by 25-9-1980. Thereafter the property should be measured and on the actual extent to be ascertained, the balance of the sale consideration to be paid by 25-11-1980. On measurement the extent came to Ac.3.24 cents. Though the extent was measured twice in the Revenue records it was only Ac.2.97 cents, the appellant agreed to take the sale-deed for Ac.3.24 cents provided the respondents gave warranty of title and indemnity for the excess land. As the respondent did not agree, the matter was referred to the arbitrators. The arbitration, however, did not fructify. Notices were exchanged between the parties but the respondents refused to give any warranty. The appellant also came to know about the Notification regarding land acquisition prior to the agreement of sale. The respondents delayed the performance of their duty and ultimately were not prepared to execute the sale-deed. The appellant therefore filed the suit for specific performance of the contract or alternatively for refund of the advance paid.
3. In the written statement filed by Dl, it is his case that the defendants were enjoying their shares separately. The execution of the sale-deed on payment Rs.80,000/- was admitted. The agreement came into existence only after the parties discussed the extent of land, presence of koradies on cilher side and the fact of the respondent being in possession of the land within the koradies. It was therefore agreed that whatever the area was within the boundaries which would be ascertained after measurements, for that area the sale consideration should be paid. Hence, it is the case of the respondent that the appellant should pay for the extent of Ac.3.24 cents which was found on measurement. As the appellant did not turn up, the first respondent contacted him on 21-11-1980 and 23-11-1980 and at the request of the appellant who was finding it difficult to raise funds to pay the sale consideration, Dl thought of granting some more time for paying the remaining sale consideration and for execution of sale-deed. He therefore issued a notice dated 29-11-1980 asking him to complete the transaction within 10 days. In reply to the notice, the appellant raised the questions as to the extent of the land and the title of the respondent to the entire property. The respondent was also prepared to execute the sale-deed for Ac.2.97 cents for which the appellant admitted the title of the respondent provided the appellant leaves the remaining area of Ac.0.27 cents abutting the road on the west. But the appellant was not prepared to take the sale-deed even for the agreed extent of land which forced the respondent to give a reply dated 12-4-1981 cancellingthe agreement. The appellant has not made any grievance of the cancellation of the agreement and he kept quiet. The respondent after a very long time thereafter in order to avoid the litigation approached a common friend to settle the matter amicably. But as the respondents had heard that the land is under acquisition proceedings, though no notice was served on the respondent by the Government nor any notification was published, he thought that it was his duty to inform the mediators. Accordingly, they were informed about his rumour of land acquisition. He was therefore prepared to sell the land subject to the condition that the appellant should take the consequences of the acquisition without any responsibility on the respondents. As it was later found that there were no acquisition proceedings and as the appellant was not prepared to take the sale-deed and he was not performing his part of the contract, the respondent stated that he was not liable to execute the sale-deed under the agreement. The conduct of the appellant disentitled him to obtain the sale-deed from him. He was also not entitled to seek the equitable relief for specific performance or for refund of the amount. It was also averred that the suit was bad for non-joinder of the parties.
4. D2 to D4 filed written statements adopting the written statement of D1. D5 filed separate written statement alleging that as the defendants are divided members, the first respondent Dl had no right to enter into the agreement on behalf of D5 who was a minor. Hence, the suit with regard to 1/5 share has to fail. He also stated that there was no legal necessity to sell the share of the minor without the permission of the Court. Upon the above pleadings the Court framed the following issues and additional issues:
(1) Whether the plaintiff is entitled to the specific performance of the agreement dated 8-8-1980 or in the alternative for recovery of Rs.l,12,173-00 being the amount paid towards advance together with subsequent interest at 12-1/2 % per annum together with damages of Rs.30,000/-?
(2) To what relief?
(1) Whether the plaintiff is entitled to claim specific performance of the suit agreement with the condition that the defendants should bear the consequences of the acquisition proposals in respect of part of the suit land?
(2) Whether the plaintiff is entitled to claim only for a portion of the suit land not under acquisition proposals?
(3) Whether the defendants are divided?
(4) Whether the suit agreement relied upon by the plaintiff is valid and binding on the 5th defendant and whether it can be enforced against the 5th defendant?
(5) Whether the plaintiff is entitled to thedamages claimed?
5. The appellant examined himself as PW1 besides the scribe of the agreement PW2. Al is the agreement of sale. Exs.A2 to A6 were also filed. The first respondent was examined as DW1. Exs.B1 to B22 were marked on behalf of the defendants. On a consideration of the oral and documentary evidence on record, the Court below partly decreed the suit as stated supra.
6. The only point that arises for consideration in this appeal is 'Whether the appellant is entitled to the relief of specific performance of the agreement in respect of the suit schedule property or in the alternative for recovery of the advance amount with interest as prayed for?'
7. The following facts are undisputed:
An extent of Ac.5.32 cents of land in Sy. No.192/5 of Suryaraopeta village,Kakinada, was purchased by respondent No.1's father under Ex.B6 dated 16-1-1928 registered sale-deed. Out of that some land was sold away by D1 and some land was acquired by the Government for laying road. According to the defendants, the remaining land was Ac.3-24 cents. The respondents executed Ex.A1, D1 acting as the guardian for the minor respondent No.5, agreeing to sell the property at Rs.70,000/- per acre. Rs.30,000/- was paid initially and the remaining Rs.50,000/- was paid on 25-9-1980 as agreed upon. It is also admitted that the land is to be measured and the sale consideration should be paid, as per the extent arrived at, by 25-11-1980. The land was measured and the extent was found to be Ac.3.24 cents. Respondent No. 1 first gave a notice dated 29-11-1980 Ex.A6, calling upon the appellant to pay the remaining balance of sale consideration and obtain the sale-deed within 10 days, failing which the agreement would be cancelled and automatically the amounts paid would be forfeited. The appellant gave a reply under Ex.B1 dated 3-12-1980 disputing the title of the respondent to the property and that permission of the Court was necessary to execute the sale-deed as respondent No.5 was a minor. The reply given by the respondents is Ex.B2 dated 22-1-1981 and subsequent notices that were exchanged between the parties are Exs.D2 to D5. Exs.B2 to B5 were also marked in the evidence and there is no dispute with regard to the same. Ex.A3, the telelgraphic notice given by the appellant, Ex.A4 reply notice given by the respondent and Ex.A5 the reply notice given by the appellant are also not in dispute. The arbitration by the common friends of the parties is also not disputed. D1 also docs not dispute about the information he has given to the arbitrators with regard to the land acquisition proceedings. However, there is no evidence to show about the land acquisition proceedings and it is also not disputed that there are no land acquisition proceedings in the case.
8. PW1 and DW1 have spoken with regard to the notices in their evidence. The learned Counsel for the appellant seriously contends that the evidence of the witnesses was not properly appreciated and that the lower Court has committed an error in holding that time was the essence of the contract. It is also contended that the appellant could not be expected to take the sale-deed for the entire extent of Ac.3.24 cents of land unless a clear warranty was given to the respondents' title to it and the respondents were asking the appellant to take the sale-deed for the entire extent of Ac.3.24 cents of land without insisting upon the title to the property which was wholly unjustified. Further, as the respondent himself gave the information with regard to the land acquisition proceedings, he should have come out with the true facts regarding the land acquisition and then only the appellant should be asked to take the sale-deed. In view of the subsequent conduct of the respondent, the time could not be held as the essence of the contract.
9. The learned Counsel for the respondents met the arguments stating that as the extent of the land was not clear, the appellant inspected the land and the respondents' title to the said property and then only he entered into the agreement of sale to take whatever land that was shown within the boundaries mentioned in the agreement. There was no dispute as to the title when the said agreement was entered into. It was contended that the appellant was not at all ready and willing to perform his part of the contract and he was taking time and was raising untenable claims one after the another only to buy time as sufficient funds were not available in his hands to pay the remaining sale consideration.
10. To consider the rival contentions, it is necessary to look into the agreement of sale. The approximate extent of the land was shown as Ac.3.24 cents. The boundaries of the land are shown. It was also stated thatthe properly was the family property which fell to the shares of the respondents in the partition already affected. As the extent of land was not very clear at the time of Ex.A1, the parties appear to have agreed upon the sale price as the price at the rate of Rs.70,000/-per Acre. It was also stated in the agreement that after the payment of Rs.50,000/- by 25-9-1980, the land should be measured and on such measurement whatever the land that was ascertained, the appellant should pay the balance of sale consideration by 25-11-1980 and obtain the sale-deeds. These recitals disclose that the appellant having satisfied about the title of the respondents regarding the entire extent of land that was found within the boundaries, which may of approximately Ac.3.24 cents, agreed to pay the price for the entire extent. Accordingly, the appellant paid Rs.50,000/- as per Ex.A2, the endorsement and there is no dispute with regard to that. But the pleadings and the evidence adduced reveal that the appellant has been raising various objections, without coming forward to pay the sale consideration for the total extent of land that was found after measurement, as to the proof of the title to the suit land and was also demanding for giving of warranty and also raising untenable pleas as to the land acquisition proceedings alleged to have been taken prior to the agreement of sale. Alleging that the appellant had not compiled with his part of the contract, the 1st respondent cancelled the agreement. Even after it was cancelled, the respondents sought mediation through common friends. But on the ground that land acquisition proceedings are pending in respect of the land in question, the arbitration proceedings could not be fructified. Even thereafter, the appellant demanded giving of warranty by the respondents. In these circumstances, the agreement could not be enforced. Now surprisingly suit is filed for specific performance of the contract for the suit properly, which is Ac.3.24 cents, for which extent the appellant refused to pay the money as sale consideration. It therefore, appears that the reasons given by the appellant for not paying the entire sale consideration for Ac.3.24 cents, prima facie, not bona fide.
11. Let us now consider the evidence in this case. The plaintiff, PW1, is a registered contractor. He and the 1st defendant were members in a Club and they know each other since past several years prior to Ex.A1. The evidence in this case mainly is directed around the notices and the contents therein and the circumstances under which the notices were issued. It is, therefore, necessary to consider the notices. Ex.A6 dated 29-11-1980 is the first notice issued by the 1st respondent. It was stated therein that after the agreement Ex.A1 was executed the land was measured as per the conditions of the agreement on 9-11-1980 and the land was ascertained as Ac.3.24 cents. As per the agreemenJ, the balance of sale consideration should be paid by 25-11-1980. On that date the appellant did not turn up. When the 1 st respondent contacted him, the appellant stated that he was making preparations for proceeding with the registration. On 26-11-1980 the appellant said that he would bring the necessary draft for the sale-deed on the next day. As he did not turn up even after 26-11-1980, though time was the essence of the contract, the 1 st respondent has given ten days time to complete the transaction, failing which, it was clearly stated, the agreement will stand cancelled and the amount already paid will be forfeited. For this, the appellant gave reply Ex.B1 dated 3-12-1980. Though in Ex.A6 the koradies were referred in the context of the extent of the land that was lying within those koradies, the appellant did not refer to koradies and did not deny them. This notice was given on behalf of 9 persons including the appellant. In this notice the appellant raised objection to the title of the respondents for the entire extent of Ac.3.24 cents as it was found in the revenue records that he had title only to Ac.2.97 cents. The appellant therefore stated that unless the respondent satisfies the appellant with regard to the excess extent of 27 cents., the respondents would not beentitled to sell the same. Though the measurements were made to 9-11-1980, until Ex.A6 was issued, the appellant has not taken the objection as to the title for the entire extent of Ac.3.24 cents. It was only when the appellant was asked to perform his part of the contract by paying the money, the appellant appears to have taken this objection. Ex.B2 is the rejoinder given by the 1st respondent. Denying the objection raised by the appellant, it was made clear by the 1st respondent that the appellant executed the agreement only after satisfying himself, examining the title deeds taken from the respondents, that the respondents were having title to the entire extent of land that was lying within the koradies and that was the land remaining out of the extent of Ac.5.32 cents, the family property, after some of the land was sold and also some land on the western side was acquired for the purpose of laying road, that the respondents were having title to the same. It was however averred that the respondents were ready to execute the sale-deed for Ac.2.97 cents of land, as the title to it was admitted, but he requested that as there was a road through the western side of Ac.3.24 cents, the extent of 0.27 cents, which the appellant wanted to exclude, should be left so as to abut the road on the West. As the appellant did not reply to this notice, Ex.B3 notice dated 19-3-1981 was given by the respondents giving one week to reply, failing which it was stated that the agreement stands cancelled. On 3-4-1981, the appellant gave the reply notice Ex.B4. Curiously again the appellant was not even prepared to take the sale-deed to the admitted extent of Ac.2.97 cents. He demanded the respondents to prove the title to the property, to which the respondents have title. He is now going back on his earlier admission regarding title of the respondents to the extent of Ac.2-97 cents, also. Stating that the question of proof does not arise as the title of the respondents was admitted with regard to Ac.2.97 cents, in Ex.Bl, dated 3-12-1980, the respondents made it clear that in view of the fact that the appellant was not ready and willing to perform his part of the agreement, the agreement was cancelled and the earnest money was forfeited. The appellant did not question either the cancellation or the forfeiture. Thus, Ex.A1 was put to an end. For a period of 1-1/2 years the appellant did not make any grievance. He neither issued a notice to the respondents nor questioned Ex.B5 in a Court of law. However, it may be due to their close association as members of the Club or due to the fact that the respondents have received Rs.80,000/- from a close associate, the 1 st respondent who was not happy, broached before certain common friends to act as arbitrators in the matter. The matter was referred to arbitrators on 7-11-1982 at the initiative of the 1 st respondent. At this stage, the respondent came to know about certain land acquisition proceedings in respect of the land. He promptly informed the same to the arbitrators. But for some lime the 1st respondent could not get any clear details as to the correctness or otherwise of the rumour regarding the Land Acquisition proceedings that was floated in the village. For some reason or the other, the arbitration proceedings did not fructify. On 6-8-1983 i.e.. more than 2 years after Ex.B5 whereby the agreement was cancelled, the appellant gave the telegraph notice Ex.A3. In this notice the appellant, referring to the agreement briefly, requested the 1st respondent to execute the sale-deed for the suit land. He has not insisted upon the respondents to prove their title to the entire extent of Ac.3.24 cents. The 1st respondent, in his reply notice Ex.A4, dated 8-8-1983, stated that he was willing to execute sale-deed for Ac.3.24 cents, on condition that he appellant pays the interest on the balance of sale price and if he was prepared to take the consequence of the alleged land acquisition. The respondents have, therefore, made a fresh offer with certain conditions, in Ex.A4. But the appellant again came with the old objection of warranty of title. He was also not agreeable to pay the interest as demanded by the respondents, nor to take the consequence of land acquisition proceedings. He demandedthat the respondent-1 himself should bear the consequences of land acquisition proceedings and reimburse the appellant the loss that may be caused on account of such acquisition proceedings. In view of this counter-offer, no agreement is reached between the parties in terms of Ex.A4. Thereafter the suit was filed seeking performance of the agreement agreeing to take the entire extent of Ac.3.24 cents, being the suit schedule land, at the rate of Rs.70,000/- per acre. These facts, to my mind, show that the appellant was not ready and willing to comply with his part of the contract from the beginning. He was, on every occasion, buying time either to pay the remaining sale consideration or for any other purpose. Obviously, however, he did not comply with the stipulations made in the agreement.
12. Though the time is not the essence of the contract in relation to immoveable properties, the law is well settled that by putting stipulation in the contract as to the performance of the contract in a fixed time and also by subsequent notices, etc., the parties could be treated as intended to have made the time as the essence of the contract. The decision of the Division Bench in Tadepalli Kutumba Rama Sastry v. Seetepalli Dakshina Murthy, : AIR1960AP178 , is an authority to the proposition that even in immoveable properties the time could be made essence of the contract by issuing notice to pay the balance of the amount. It is, therefore, open to one of the parties to make time the essence of the contract by calling upon the other party who has been guilty of unreasonable delay to perform the contract within a stated time by giving him reasonable notice. A learned single Judge of this Court in Koyana Suryanarayana Reddy v. C. Chellayyamma, : AIR1989AP276 , held that mere extension of time even though time is made as essence of the contract, would not operate as waiver of essential condition as to time. In K.S. Vidyanadam v. Vairavan, : AIR1997SC1751 , considering the escalation in prices in urban immoveable properties, B.P. Jeevan Reddy, J., as he then was, observed that -
'..... we are inclined to think that therigor of the rule evolved by Courts that time is not of the essence of the contract in the case of immovable properties -involved in times when prices and values were stable and inflation was unknown -requires to be relaxed if not modified, particularly in the case of urban immovable properties. It is high time, we do so.....
The said time-limit may not amount to making lime the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as nonexistent? All this only means that while exercising its discretion, the Court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties).'
13. Thus a different view is struck, slightly modifying the rigor of the rule of time being not the essence of the contract in immovable properties. The Supreme Court clearly held that stipulation as to time cannot be altogether ignored. Now, seen in the light of the law laid down in the above pronouncements, I have no doubt in mind that the parties intended to make time as essence of the contract. It is clearly stated in Ex.A1 that by 25-9-1980 an amount of Rs.50,000/- was to be paid and thereafter the land has to be measured. The balance of sate consideration should be paid by 25-11-1980. It was also made clear that thesale-deed should be obtained without violating the above dates. It was clearly mentionedThis stipulation is very significant which goes to show that the parties were impressed upon the stipulation as to time. Admittedly, by 25-11-1980 the remaining sale consideration was not paid. Immediately the respondent No.1 contacted the appellant and even after that when the appellant did not come forward with the balance of sale consideration, he issued the notice Ex.A6. In Ex.A6 ten days time was stipulated, failing which, it was stated that the agreement would be cancelled. The appellant started his game by raising one objection or the other. In Ex.B1 it was stated that 5th defendant being minor, the 1st defendant could not have agreed to sell his share without the permission of the Court. As already stated supra, notices in close proximity are exchanged. The respondents were careful enough in not giving much time in any of the notices for compliance and for payment of the balance sale consideration. Finally, in Ex.B5 he cancelled the contract Ex.A1 and thus legally put an end for it. What happened thereafter is not relevant to consider the question of the time being the essence of the contract. The stipulations in the agreement when read in combination with the subsequent conduct of the parties, make it abundantly clear that the parties intended that time should be made essence of the contract.
14. In fact, in this case the question as to the time being the essence of the contract is of little significance. The crucial question that should be focussed upon is whether the appellant was ready and willing to perform his part of the contract.
15. As already discussed, the appellant failed to pay the amount before 25-11-1980. He has not given any reason for not doing so. It was only after 1st respondent's notice giving him 10 days time for compliance, he came forward with the objection that he would take the sale-deed only to the extent of Ac.2.97 cents. The 1 st respondent agreed to execute the sale-deed as desired by the appellant. Even then, curiously, the appellant had no intention to obtain the sale-deed. He has come forward with a new plea that 1st respondent has to prove his title to the entire extent of Ac.3.24 cents. He has given up the plea of taking the sale-deed to the undisputed extent of Ac.2.97 cents. It is indeed difficult to fathom the mind of the appellant, as he neither wanted to take the sale-deed for Ac.3.24 cents, nor for Ac.2.97 cents. The only reason that could be gathered is the appellant was not willing to take the sale-deed at all. It must be for the reason that he had no money. There can be no other reason. If he has not desired to go for sale deed, he could have stated so and requested the 1st respondent to return the advance. Being a friend of his, the 1 st respondent would have readily obliged.
16. As already discussed above, the objection as to the extent of the land and the insistence to prove the title with regard to the same, is wholly untenable. These objections are wholly alien to Ex.Al. A bare perusal of Ex.Al clearly indicates that the appellant had agreed to purchase whatever the extent of land which was found, on measurement, within the boundaries clearly specified in Ex.Al itself. The reason for this stipulation in Ex.AI was, as must have noticed by the appellant himself, that in revenue records, the respondents are shown to have title only to Ac.2.97 cents. The appellant must be raising this objection when he was unable to procure the funds for paying the balance of sale consideration.
17. The appellant's objection with regard to 1 st respondent's capacity to execute sale-deed on behalf of 5th respondent, a minor, appears to be again wholly untenable, lacking in bona fide. He knew very well that R5 was a minor at the time of entering into agreement, as they are close associates and that 1st respondent, as guardian to R5,executed the agreement and the sale was not to the detriment of 5th respondent. However, this objection was not insisted upon in the subsequent notices. Learned Counsel for the appellant has also fairly conceded that the absence of Court's permission would not be a hurdle for executing sale-deed on his behalf by 1st respondent. The conduct of the appellant shows that he was only trying to drag on to buy time to secure funds. The agreement was cancelled, as seen above, by the 1 st respondent in Ex.B5 dated 12-4-1981 as the appellant was not ready and willing to perform his part of contract. As stated above the cancellation has become final. The appellant has obviously accepted cancellation of the agreement and forfeiture of the amount. The agreement has thus become unenforceable and it no longer survived. The question of specific performance of this agreement in this suit will, therefore, not arise. The conduct of the appellant clearly supports the contention of the learned Counsel for the respondents that the appellant was at no point of time ready to perform his part of contract.
18. The subsequent proceedings as to arbitration/mediation and the alleged land acquisition has no bearing upon the question as to the readiness and willingness of the appellant to perform his part of the contract. The offer made by the respondent No.1 in Ex.A4 is a fresh offer whereby the respondent offered to sell the land on condition that the appellant takes the entire extent of Ac.3.24 cents; pays balance sale-consideration with interest from 25-11-1981 and also on condition that the appellant takes all the consequences of the alleged land acquisition. As stated above, there is no evidence as to the land acquisition. As seen from Ex.A5 the appellant was not prepared to accept the offer. He insisted upon warranty of title and also that the respondents should undertake consequences of land acquisition. Thereafter the suit was filed again for the entire extent of Ac.3.24 cents. Learned Counsel for the appellant submits that though the suit was filed for Ac.3.24 cents, which was disputed by the appellant in the initial stages as to the title of this extent in the respondents, a decree should be passed only to the extent of property to which the respondent has established his title. It must be remembered that this suit is for specific performance of the agreement to sell the suit property. The relief claimed in the plaint is to grant specific performance of Ex.A1 to execute sale-deed for the suit property, which is shown as Ac.3.24 cents. Hence, the question of declaration of title as to the actual extent in the suit property in favour of the respondent, cannot be decided in this case.
19. Considering the above evidence, Court below has taken the view that the appellant inspite of satisfying himself with the title, did not perform his part of contract by paying the remaining balance of sale consideration before the due date. Though the respondent has given maximum latitude to the appellant to perform his part of contract, the appellant has been raising one plea or the other dragging on the matter, stipulating conditions not warranted by Ex.A1. Hence, the appellant was not entitled to specific performance of the contract. I have no hesitation in agreeing with the reasoning and arriving at the above finding to hold that the appellant was not ready and willing to perform his part of contract and hence he is not entitled for the equitable relief of specific performance of agreement.
20. The learned Judge has found that the respondents were not entitled for forfeiture of the advance. Hence, the appellant was held to be entitled for recovery of the amount claimed, together with interest at 12% per annum. No appeal or cross-objections are filed against this finding. This finding is, therefore, confirmed.
21. In the result, the appeal is dismissed with costs. The judgment and decree of the Court below are confirmed.