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K. Sambasiva Rao Vs. P. Bangaru Raju - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtAndhra Pradesh High Court
Decided On
Case NumberSecond Appeal No. 148 of 1984
Judge
Reported inAIR1985AP393
ActsLimitation Act, 1963 - Schedule - Article 54; Specific Relief Act, 1963 - Sections 16 and 20
AppellantK. Sambasiva Rao
RespondentP. Bangaru Raju
Appellant AdvocateS. Dasarath Rami Reddy, Adv.
Respondent AdvocateP. Ramachandra Reddy, Adv.
Excerpt:
contract - specific performance - article 54 of limitation act, 1963 and sections 16 and 20 of specific relief act, 1963 - appellant promised to sell suit property to respondent for some consideration - subsiquently appellant declined from his promise - suit filed by respondent for specific performance of contract - trial court decreed suit in favour of respondent - appeal filed by appellant against such order - agreement found valid - respondent found always been ready and willing to perform his term of contract - appeal dismissed accordingly. - maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first.....1. defendant in o.s. no. 703 of 1981 on the file of the iii assistant judge, city civil court, hyderabad, is the appellant herein. the respondent plaintiff filed the suit bearing o.s. no. 703 of 1981 for specific performance of the agreement entered into between the appellant and the respondent on 30-9-65 and for permanent injunction restraining the appellant and his men from interfering in any manner with one acre, out of the 13 acres of the plaint schedule land, which was the subject-matter of the agreement for sale by the appellant to the respondent, under the above referred agreement. the trial court decreed the suit filed by he respondent and directed the appellant to execute a regular deed of conveyance in favour of the respondent in respect of one acre out of the 13 acres of the.....
Judgment:

1. Defendant in O.S. No. 703 of 1981 on the file of the III Assistant Judge, City Civil Court, Hyderabad, is the appellant herein. The respondent plaintiff filed the suit bearing O.S. No. 703 of 1981 for specific performance of the agreement entered into between the appellant and the respondent on 30-9-65 and for permanent injunction restraining the appellant and his men from interfering in any manner with one acre, out of the 13 acres of the plaint schedule land, which was the subject-matter of the agreement for sale by the appellant to the respondent, under the above referred agreement. The trial Court decreed the suit filed by he respondent and directed the appellant to execute a regular deed of conveyance in favour of the respondent in respect of one acre out of the 13 acres of the plaint schedule property, as per the said agreement dt. 30-9-65 within two months and also directed division of the plaint schedule land and delivery of one acre out of the 13 acres to he respondent. In other words, the respondent's prayer for directing the specific performance of the agreement dt. 30-9-65 was allowed by the trial Court. The appellant filed an appeal, A.S. No. 302 of 1982, in the Court of he Chief Judge, City civil Court Hyderabad, challenging the decision of the trial Court. The first appellate Court confirmed the judgment and decree of he trial Court and dismissed the appeal.

2. It is necessary to state the relevant facts An agreement (Ex. A-1) was entered into between the appellant and the respondent or 30-9-65, according to which, the appellant agreed to sell to the respondent one acre out of the 13 acres of land in S. No. 194/8 in Begumpt, Secunderabad. The appellant purchased the 13 acres of land under a registered sale deed dt. 3-9-65. Out of these 13 acres of land, one acre was agreed to be sold by the appellant to the respondent for consideration of Rs.500/-. Cl. 1 of the agreement is relevant and it is quoted below:

'The 2nd among us (respondent herein Sic will select 1 acre on one side of 13 acres plot described in the schedule within six months from this date and 2nd among us will get the same measured and partitioned immediately after the selection by the 2nd among us and the 2nd among us shall be put in physical possession of the same.'

It may be mentioned that the entire extent of 13 acres of open land was one single plot and it was, therefore, provided in the agreement that the respondent shall select one acre on one side of the 13 acres plot within a period of six months from the date of the agreement and, after such selection by the respondent, the one acre shall be partitioned and the respondent shall be put in physical possession of the same and a proper deed of conveyance, executed by the appellant, in favour of the respondent. There is no information as to what happened subsequently. There appear to be a complete lull. On 7-7-75, the appellant wrote a letter to the respondent, which inter alia contained a reference to the Begumpet land, covered by the agreement. The appellant referred to the possibility of a law soon, taking effect putting a ceiling on holdings of urban land. The appellant mentioned that, before the law is enacted, ways and means must be found to dispose of the land. The appellant also mentioned that he needed Rs.5, 000/- immediately 'to sit at Hyderabad and get things done'. It was also mentioned in the letter that, on account of the ceiling on the holdings of agricultural lands, the appellant was unable to get any money and requested the respondent to come to his rescue. Ultimately, the appellant required the respondent to remit to him as much money, as he could before the 13th July, 1975. There was apparently no response to this letter from the respondent. There was another letter dt. 1-9-75, addressed by the appellant to the respondent, wherein it was pointed out that the last date for conversion of inam land into patta land was fixed as 26th Sept. 1975 and steps should, therefore, be taken to convert the 13 acres of in a land into patta land. The respondent was requested to engage a lawyer to start proceedings in the Taluk Officer. There was another letter dt. 10th Sept., 1975 from the appellant to the respondent wherein the appellant voiced a grievance that the respondent had been keeping silent in the matter, in spite of repeated letters from the appellant. The appellant again reminded the respondent that the last date for conversion of the inam land into patta land was the 26th Sept., 1975. It was pointed out by the appellant that the respondent had been keeping quite, without taking any action. The appellant finally concluded in the letter by saying 'I have done my duty. So I can forget about this'. There is again no information as to what happened subsequently. However, on 15-4-78, the respondent addressed a letter to the appellant, referring to various pending transactions to the settled between the appellant and the respondent. There was a particular reference to the conveyance of one acre of Beumpet land for monies paid by the respondent. The respondent required the appellant to settle all the pending matters, including the conveyance of one acre of Begumpet land and observed that he would be obliged to entrust these matters to his Advocate, if the matters were not settled. The appellant replied on 17-5-78 to the respondent mentioning inter alia in the letter that the respondent was aware of the circumstances, under which one acre of the Begumpt land was shown to have been sold to the respondent and the consideration was 'nominal and never intended to be legal consideration so as to give rise to a binding and legally enforceable agreement'. For the first time, therefore, an indication was given in the letter dt. 17-5-1978 that the appellant was likely to repudiate the agreement dt. 30-9-65, as not being legally enforceable. The appellant's letter dt. 17-5-78 was replied by the respondent in his letter dt. 5-7-78. The respondent threatened in his letter that, unless all the pending matters were amicably settled, within fifteen days of the receipt of the letter, he would have no option but to entrust the matters to his Advocate and request of the letter, he would have no option but to entrust the maters to his Advocate and request him to take suitable action. The appellant sent a reply dt. 12-7-78 to the respondent. It was mentioned therein.

'How do you consider that I have denied giving you any agreement regarding Uppuguda land, Begumpet land. There are agreements executed without any consideration....... The agreement I have given you regarding Begumpet land, though without any consideration, is in your hands. You can follow it up and get converted into patta land under inam also with Act of SS. I think I have advised you in this matter long back. You are at liberty to hand over your paper to whomsoever you like. I shall not stand in your way.'

Thereafter, on 1-8-78, the respondent's Advocate sent a notice to the appellant, calling upon him to sell one acre out of the 14 acres of land, which was the subject-matter of the agreement dt. 30-9-65. The appellant was told that, if proper conveyance was not arranged within fifteen days from the date of the notice, the respondent would be obliged to enforce the agreement in a Court of law. Finally, the appellant's Advocate sent a reply dt. 4-9-78 to the respondent's Advocate reiterating that the agreement dt. 30-9-65 was without consideration and could not be enforced in a Court of law. it was claimed that the respondent had done precious little to exercise his alleged rights under the agreement and after a lapse of more than a decade, the respondent could not enforce the agreement. It was further claimed that the agreement in question was void for vagueness and uncertainty and cannot be enforced in a Court of law. it was specifically mentioned that the respondent, by his own inaction, had neglected to pursue the matter which resulted in rendering the said agreement incapable of performance. It was mentioned that there was no intention at any time to enforce the agreement. This reply from the appellant's Advocate on 4-9-78 brought an end to the correspondence between the appellant and the respondent, concerning the agreement dt. 30-9-65. Eventually, the respondent filed the suit on 9-3-81 for the reliefs already referred above.

3. Learned Counsel for the appellant, Sri S. Dasaratharama Reddy, raised the following contentions:

(i) The suit is barred by limitation under Art. 54 of the schedule to he Limitation Act;

(ii) There was unconscionable delay on the part of the respondent plaintiff in filing the suit and consequently discretion should not have been exercised to decree specific performance of the agreement dt. 30-9-65; and

(iii) The respondent failed to indicate that he was ready and willing to perform his part of the contract and there was no specific averment in the plaint of the respondent's readiness and willingness to perform his part of the contract. Consequently, the claim for specific performance of the agreement dt. 30-9-65 should not have been entertained.

4. Learned Counsel for the respondent Sri P. Ramachandra Reddy, raised a preliminary objection that the appellant should not be allowed to traverse grounds other than those specified at the time of the admission of the second appeal. Learned Counsel further urged that the suit filed by the respondent was within the time prescribed under Art. 54 of the Schedule to the Limitation Act. He also refuted the submissions of the learned counsel for the appellant that, in the facts and circumstances of the case, he discretion to decree specific performance of the agreement dt. 30-9-65 should not have been exercised.

5. As regards the first contention retarding limitation, it is relevant to Extract below Art. 54 of he Limitation Act:

'Description of suit Period of limitation Time from which period begins to run. 54. For specific per Three years. The date fixed for the performance, or, if noformance of a contract. Such date is fixed, when the plaintiff has noticed that performance is refused.'

Learned Counsel for the appellant submits that Art. 54 is in two parts prescribing separate time-limits. The first part is three years from the date fixed for the performance of the contract and the second part refers to the period of limitation as three years from the date when the plaintiff has notice that performance is refused and that part is applicable only in a case where the date is not fixed for the performance of the agreement in the agreement itself. In the present case, the learned counsel urged, the agreement dt. 30-9-65 itself prescribes that date of performance as six months from the date of the agreement (vide cl. 1 extracted in para 2 above) and that period of six months expired on 31-3-1966. The last date for filing the suit, therefore, expired on31-3-1969. Thus, under the first part of Art. 54 itself, the suit was barred by limitation. It is alternatively contended that, even if the agreement dt. 30-9-65 should be held to have not fixed the date for performance of the contract still the suit is barred by limitation, as the appellate refused to perform his part of the contract, as indicated in the latter dt. 10-9-75 addressed to the respondent. The period of limitation, therefore ended on 10-9-78 whereas the suit was filed on 9-3-81. It is, therefore, submitted that, in either view, the suit filed by the respondent for specific performance of the agreement dt. 30-9-65 is barred by limitation. The learned counsel relied on the decisions in Sumerchand v. Hukumchand, : AIR1965MP177 and Chekka Venkata Suryanarayana Urthy v. Appana Veerraju, : AIR1980AP32 and K. Kallaiah v. Ningegowda, : AIR1982Kant93 . K I am unable to accept the submissions of the learned counsel. In the first place, cl. 1 of the agreement, on which reliance is placed (extracted in para 2 at page 3 of this judgment) those not stipulate any date fixed for the performance of the contract. All that is stated there is that the respondent will selected one acre in one side of 13 acres plot described in the schedule within six months from the date of the agreement and the respondent will get the same measured and partitioned immediately after the selection and the respondent shall be put in physical possession of one acre so selected. The period of six months within which the respondent may select one acre of land cannot be considered to be the period stipulated for the performance of the contract by the appellant. Apart from the above provision in cl. 1, is not in dispute that the agreement dt. 30-9-65 did not as such provide or stipulate any date for the performance of the contract. The first part of Art. 54 has, therefore, no application. For the application of the second part, what is crucial is the date when the respondent has notice that performance is refused and it is from that date the period of three years limitation runs. I have already referred o the correspondence that passed between the respondent and the appellant in detail. I am unable to accept the contention of the learned counsel for the appellant that, in the letter dt. 10-9-75, the appellant put the respondent on notice about his refusal to perform the contract. In this letter, the appellant requested the respondent to take action for conversion of land into patta land and complained that the respondent was neglecting to take appropriate action. All that is stated in the letter, is to quote once again, 'I have done my duty. I can forget about this'. Learned counsel states that the above statements in the letter constituted a notice to the respondent, regarding the appellant's refusal to perform the contract. It is not possible to accept this submission, because the statement above referred did not have the slightest indication to put the respondent on notice regarding the refusal by the appellant to perform the contract. On the contract, in his letter dt. 12-7-78 addressed by the appellant to the respondent, the appellant specifically mentioned that he had never denied giving the respondent an agreement regarding the Beghumpet land. The respondent had been specifically requested by the appellant in that letter to follow up the matter regarding the conversion of inam land into patta land. Thus, even on 12-7-78, the appellant did not repudiate his obligation to perform the contract, but was only requiring the respondent to attend to the conversion of the inam land into patta land. Undoubtedly this is not an obligation resting on the respondent as per the agreement dt. 30-9-65. The first refusal to perform the contract was indicated by the appellant's Advocate in his letter dt. 4-9-78. This letter was addressed to the respondent's Advocate and for the first time it was stated that the appellant did not concede that the agreement dt. 30-9-65 was legally enforceable or that there was any intention to enforce the agreement. On the above facts, it must be held that the respondent was put on notice regarding the performance for the first time in the letter dt. 4-9-78 addressed by the appellant's Advocate to the respondent's Advocate. Consequently, the suit filed on 9-3-81 is within the limitation provided under the second part of Art. 54. The trial Court as well as the first appellate Court were justified in coming to the conclusion that the suit is not barred by limitation. The appellant's contention in this regard is accordingly rejected.

6. Learned counsel for the appellant contended that, on the facts of this case, it must be held that the respondent had notice that the appellant refused to perform the contract. Reference is made to the long silence on the part of the appellant which, it is contended, amounted to notice of rejection to perform the contract. It is first pointed out that, although the agreement was entered into on 30-9-65, there was absolutely no action taken to have the contract performed till July, 1975. Learned Counsel, therefore, submits that there is a period of ten years during which the appellant was totally silent, regarding the performance of the contract. It is further pointed out that, between Sept., 1975 and April 1978, there was again a total lull and the appellant was completely silent in regard to his obligation to perform the contract. It is submitted that these long spells of silence on the part of the appellant amounted to notice to the respondent of the appellant's intention not to perform the contract. Learned counsel invited my attention to the judgment of the Calcutta High Court in Manick Lal v. K.P. Choudhury, : AIR1976Cal115 . The contention of the learned Counsel for the appellant does not bear scrutiny. The first spell of silence for a period of ten years between k1965 and 1975 cannot be considered to be a notice by the appellant to the respondent of his inanition not to perform the contract. This is especially so in view of the total preparedness on the part of the appellant to perform his contract, as revealed in the post-1975 correspondence, to which reference has already been made by me. So far as the second spell of silence between 1975 and 1978 is concerned, that cannot be said to be a notice of refusal either. The last letter in the year 1975 was dt. 10-9-75, which was addressed by the appellant to the respondent. In that letter, far from giving any indication that the appellant would be unwilling to perform the contract, the respondent had been asked to take action for conversion of the inam land into patta land as the matter relating to conversion was entrusted by the appellant to the respondent. The appellant charitably observed that he 'can forget' about it. It is not possible to construe that the respondent had been put on notice even remotely that the appellant had no intention to perform the contract. The facts of the Calcutta case referred to by the learned counsel for the appellant are totally different and have no application to the facts of the present case.

7. As regards the second contention of the learned counsel for the appellant that there is unconscienable delay in disentitling the respondent to the exercise of discretion in his favour for the specific performance of the agreement dt. 30-9-65. I am again unable to accept it. Learned counsel relied on the decision of the Supreme Court in Satyanarayana v. Yellojirao, : [1965]2SCR221 . The following observations, occurring in para 6 of the above decision, answer the contention of the learned counsel for the appellant:

'Under S. 22 of the Specific Relief Act, relief of specific performance is discretionary but not arbitrary. Discretion must be exercised in accordance with sound and reasonable judicial principles. The cases providing for a guide to Courts to exercise discretion one way or other are only illustrative; they are not intended to be exhaustive. As Art. 113 of the Limitation Act prescribes a period of 3 years from the date fixed thereunder for specific performance of a contract, it follows that mere delay without more extending upto the said period cannot possibly be a reason for a Court to exercise its discretion against giving a relief of specific performance.'

8. I have already held that the suit filed on 9-3-81 is within the limitation prescribed under Art. 54 of the Limitation Act. K On the ground of delay, extending upto the period of limitation and not beyond, the Court cannot refuse to exercise its discretion for the relief of giving specific performance. It may be true that, in some cases, on account of delay in initiating action for specific performance, the party under an obligation to perform the contract has altered his position to his detriment in the honest belief that the contract has not to be specifically performed. If any such hardship or detriment is established, the Court may examine the circumstances in such cases, in order to arrive at a proper conclusion, whether discretion should be exercised in favour or against specific performance of the contract. There is absolutely no material in the present case that, during the long interval between 1965 and 1981, which constituted the entire period of delay, the appellant had altered his position to his detriment in the bona fide belief that the respondent was unlikely to ask for the performance of the contract. In the first place, the appellant had been put on notice by the respondent in 1975 that he should specifically perform the contract. The correspondence undoubtedly testified to this fact. Even between 1965 and 1975, the appellant did not alter his position to his detriment. Before the first appellate Court, it was contended that, thinking that the respondent would not ask for performance of the contract, the appellant had entered into some agreement in the year 1974 with Hashim Co-operative Housing Society and delivered possession of the entire extent of land to that society. It was, therefore, claimed that the third parties' ought to have intervened by 1974 and the appellant must, therefore, be held to have altered his position to his detriment. It was also pleaded before the first appellant Court that a decree for specific performance against the appellant would cause hardship because of the delivery of possession of the entire extent of land to the Hashim Co-operative Housing Society. This contention was abandoned before me by the learned counsel for the appellant, I think, very fairly. The first appellate Court rightly pointed out that the appellant's claim that he entered into an agreement with Hashim Co-operative Housing Society and delivered possession of the entire 13 acres of land to that society in 1974 was, for one thing, unproved and was found to be untrue for another. The first appellate Court pointed out that, in the correspondence that passed between the appellant and the respondent in the year 1975, the appellant required the respondent to take action for conversion of the land into patta land, so that the land could be sold away quickly, especially in view of the impending legislation on ceiling of urban lands (vide appellant's letter dated 7-7-75 addressed to the respondent). The appellant had also required the respondent to show one acre of land in the declaration which he might file before the Urban Ceiling Authorities. Taking these circumstances into account, the first appellate Court rightly came to the conclusion that, if the appellant had truly ent4ered into an agreement with has him Co-operative Housing Society and delivered possession of the entire extent of land in the year 1974 itself, then the letters in the year 1975 addressed by the appellant to the respondent would support the contrary position and render the claim regarding the alleged agreement with and delivery of possession to the Hashim Co-operative Housing Society untrue. Apart from this untruthful claim, regarding the agreement with Hashim Co-operative Housing Society, the appellant did not lead any evidence to indicate that, during the period, he altered his position to his detriment. I am unable, therefore, to accept the contention of the learned Counsel for the appellant that, in the facts and circumstances of this case, the discretion should not have been exercised to decree the suit filed by the respondent for specific performance of the contract, entered into by the appellant on 30-9-65. The appellant's contention is accordingly rejected.

9. Finally, the contention of the learned counsel for the appellant is that, unless that respondent had unequivocally indicated his readiness and willingness to perform his part of the contract and specifically averred so in the plaint and indicated the same during the course of the trial, he is not entitled to a decree for specific performance of the contract. It is urged that, under the agreement, the respondent was under an obligation to identify one acre of land which he wanted to be conveyed to him. Admittedly, the respondent did not identify the portion of one acre of land which he wanted to sell to him within the period of six months from the date of the agreement. This failure, according to the learned counsel for the appellant, amounted to the respondent not performing his part of the contract to enable the performance of the same by the appellant. Learned counsel relief on the decision of the Calcutta High Court in Manick Lal v. K.P. Choudary, : AIR1976Cal115 .

10. Section 16(c) of the Specific Relief Act provides that specific performance of an agreement cannot be enforced in favour of a person who has failed to aver and prove that he has performed, or has always been ready and willing to perform, the essential terms of the contract which are to be performed by him, other than the terms, the performance of which has been prevented or waiv3d by the defendant. The words 'ready' and 'willing' imply that the plaintiff was prepared to carry out those parts of the contract to their logical end so far as they depend upon his performance. The terms of a contract performable by the plaintiff may be of two kinds: (1) those that have to be performed before the other side can be called upon to fulfil his promise; and (2) others that may have to be subsequently performed. The actual performance of, or a readiness to perform, the former must be shown and an offer to perform the latter must be made. In the present case, it is not in dispute that the respondent had paid the entire sale consideration in respect of one acre of land, which was the subject-matter of the agreement dt. 30-9-65. All that is said is that the respondent failed to discharge his obligation to identify the one acre of land in order to enable the appellant to execute and register a sale deed. It is said that an expression of continuing willingness to perform this obligation has not been averred in the plaint filed. While it is true that the respondent did not identify the one acre of land, it cannot be said that, because of the respondent's unwillingness to perform this part of his obligation, the claim for specific performance of the contract is vitiated. The correspondence unmistakably showed that the respondent had been asking the appellant to perform his part of the contract and at no stage did the appellant raise any plea that his inability to perform the contract is because of the non-identification of the one acre of land by the respondent. If the appellant had informed the respondent that he was willing to execute the sale deed and register the same, the respondent would have identified the portion which he wanted to be conveyed to the respondent. In my opinion, it cannot be said that the respondent failed to aver and prove that he has always been ready and willing to perform this term of the contract, which has to be performed by him. I may also point out that, in the plaint filed by the respondent in the suit, there is an averment in para 1 of the plaint to the following effect:

'.......The plaintiff was always willing to perform his part of the contract on due intimation from the defendant.'

Apart from this specific averment in the plaint, the respondent was examined as P.W. 1, during the course of the trial. He stated in the course of his examination as under;

'I am ready and willing to perform my obligation under Ex. A1 (Agreement dt. 30-9-65).'

Learned counsel for the appellant points out that the averment in the plaint is to the effect that the respondent 'was willing' and did not indicate that the respondent 'is ready and willing' to perform his part of the contract. Learned Counsel submits that the declaration regarding readiness and willingness on the part of the respondent/plaintiff must be indicated in the present tense or present continuous tense and not in past tense. I am afraid this contention is too technical. At any rate, in this examination-in-chief, P.W.1 (the respondent) has clearly indicated that he is willing to perform the contract. The averment in the plaint extracted above does not, I my opinion, have effect of the respondent's claim for specific performance of the agreement dt. 30-9-65 being hit by the provisions contained in S. 16(c) of the Specific Relief Act.

11. A contention was also urged, I must say half-heartedly, that the one acre of land formed an indivisible part of 13 acres of land and, without asking for a partition of that land, the respondent could not ask for specific performance of the agreement dt. 30-9-65. Learned Counsel for the appellant did not specifically deal with this aspect and, at any rate, did not invite my attention to any provision of law which defeats the respondent's claim that the appellant should specifically perform the agreement dt. 30-9-65, unless the land is partitioned in the first instance.

12. As regards the plea of the learned counsel for the respondent that the appellant should not be permitted to traverse grounds other than those based on which this second appeal was specifically admitted. I do not think it necessary to go into this matter at length. In any event, I am satisfied that the above grounds raised by the appellant have essential bearing upon the questions based or which the second appeal has been admitted.

13. For the aforesaid reasons, the appeal it dismissed, but kin the circumstances without costs.

14. Appeal dismissed.


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