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Suraj Singh and anr. Vs. Sohan Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 1138 of 1973
Judge
Reported inAIR1981All330
ActsSpecific Relief Act, 1963 - Sections 16; Code of Civil Procedure (CPC) , 1908 - Order 20, Rule 4 - Order 41, Rule 31
AppellantSuraj Singh and anr.
RespondentSohan Lal and ors.
Appellant AdvocateNaek Ram Pandey and ;N.C. Rajwansh, Advs.
Respondent AdvocateRajeshwari Prasad and ;T.P. Singh, Advs.
DispositionAppeal allowed
Excerpt:
.....court is presumed to have agreed with trial court - decision of lower appellate court affirming decree of trial court is bad in law as it did not examine the matter in accordance with law. - - the present appellants being residents of the same village as the first defendant and the plaintiffs were clearly in a position to know about the agreement of the plaintiffs with the first defendant. the present appellants, according to the trial judge, had failed to show that they were bona fide purchasers without notice of the earlier agreement. 6. the lower appellate court affirmed the conclusion arrived at by the trial judge that the transaction of sale entered into subsequently between the present appellants and the first defendant was not bona fide and according to it the trial court..........law on the question as to whether the present appellants had notice of the earlier agreement of sale in favour of the 'plaintiffs in respect of the suit property. the submission is that in the absence of these two essential elements having been found in favour of the plaintiffs, the decree passed in the case for specific performance of the contract of sale could not be upheld. sri rajesh-wari prasad, learned counsel for the plaintiff-respondent, has countered these submissions.8. section 16 of the specific relief act, 1963, in so far as it is material, reads thus:'16. specific terms of a contract cannot be enforced in favour of a person :(a) & (b) .....(c) ..... who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the.....
Judgment:

V.K. Mehrotra, J.

1. This second appeal has been preferred by Suraj Singh and his son Rameshwar Dayal who were defendants Nos. 2 and 3 in a suit for specific performance of an agreement dated January 17, 1967 for the sale of some agricultural plots situate in village Khajuri-Al-liyarpur in Tahsil Mawara, District Meerut said to have been executed in favour of the plaintiffs by one Awan Singh who was impleaded as defendant No. 1 in the suit but is a respondent in this appeal. The IIIrd Additional Civil Judge, Meerut, who tried the suit, granted a decree as prayed for by the plaintiffs. The Additional District Judge, Meerut before whom that decree was challenged in appeal by the present appellants affirmed the decree of the trial Judge. Under the decree, the sale deed was to be executed by the defendants in favour of the two plaintiffs and the present appellants, who were in possession of the land, were required to transfer it to the plaintiffs. Feeling aggrieved, these two defendants have come to this Court.

2. The plaintiff alleged that through an agreement dated January 17, 1967, the first defendant contracted to convey the plots in question to them for a consideration of Rs. 10368.75 out of which a sum of Rs. 4,000/- was paid by the plaintiffs as earnest money that very day. The remaining amount was to be paid by the plaintiffs at the time of the execution of the sale-deed before the Sub-Registrar and the sale-deed was to be executed by the first defendant by February 5, 1967. The first defendant, however, did not execute the deed of sale in their favour in spite of the fact that the plaintiffs required him to do so by a notice and also in spite of the fact that the plaintiff appeared before the Sub-Registrar on the date on which the sale-deed was to be executed. It has been averred in the plaint that with a view to deprive the plaintiffs of the rights which they had to the property under that agreement, the first defendant, namely, the vendor in collusion with the present appellants, who were his close relations, surreptitiously executed a sale-deed of the sale property in favour of the present appellants for a higher consideration. The plaintiffs, according to the averment contained in the plaint, were always ready and willing to get the same executed in their favour from after January 17, 1967 till the date of the suit.

3. The defence of the present appellants, in the main, was that they had purchased the property in question for a consideration higher than that for which it was to be purchased by the two plaintiffs and further that they had no notice of the agreement of sale alleged by the plaintiffs to have been executed in their favour by the first defendant. The first defendant had, according to them, entered into an earlier agreement, for the sale of the property to them. Some other pleas were also raised in defence.

4. The trial Judge framed several issues in the case. The first issue was as to whether the first defendant and the plaintiffs had entered into an agreement for the sale of the plots in dispute and was an agreement executed for the same on January 17, 1967. This issue was answered in favour of the plaintiffs by the trial court which did not accept the case of the defendants that no such agreement had been executed. The finding of the trial Judge in regard to this issue was upheld by the lower appellate Court.

5. Issue No. 5 framed by the trial Judge was to the effect whether the present appellants were bona fide purchasers for value without notice of the agreement dated January 17, 1967 in favour of the plaintiff. The trial Judge answered this issue against the present appellants. He took the view that the first defendant was related to the present appellants and that the evidence of the defendants to show that the subsequent sale deed in their favour was a bona fide transaction was not acceptable. He also took the view that the plaintiffs' evidence that the present appellants had knowledge of the agreement entered into by them with the first defendant was independent and believable. The present appellants being residents of the same village as the first defendant and the plaintiffs were clearly in a position to know about the agreement of the plaintiffs with the first defendant. The present appellants, according to the trial Judge, had failed to show that they were bona fide purchasers without notice of the earlier agreement. In this view of the matter, the suit was decreed for specific performance as noticed above.

6. The lower appellate court affirmed the conclusion arrived at by the trial Judge that the transaction of sale entered into subsequently between the present appellants and the first defendant was not bona fide and according to it the trial Court had accepted the plaintiffs' case that the first defendant was in collusion with the present appellants and sold away the disputed land to them for higher consideration 'for good reasons'. The plaintiffs' case, according to the lower appellate court, that the earlier agreement of sale pleaded by the defendants was only an effort on their part to defeat the plain tiffs' claim for specific performance of the agreement in their favour was correct and that the conclusion to that effect arrived at by the trial Judge was founded upon good reasons. With these conclusions, the decree of the trial Court was, as mentioned earlier, upheld by the lower appellate Court.

7. Appearing on behalf of the appellants, their learned counsel Sri S. S. Bhatnagar has raised two contentions, in the main, before me. The first of these is that the suit for specific performance could not have been decreed, as has been done in the present case, without a finding that the plaintiffs had always been ready and willing to perform the essential terms of the contract which were to be performed by them. The second contention is that the courts below and particularly the lower appellate court, had not gone into nor recorded a finding in accordance with law on the question as to whether the present appellants had notice of the earlier agreement of sale in favour of the 'plaintiffs in respect of the suit property. The submission is that in the absence of these two essential elements having been found in favour of the plaintiffs, the decree passed in the case for specific performance of the contract of sale could not be upheld. Sri Rajesh-wari Prasad, learned counsel for the plaintiff-respondent, has countered these submissions.

8. Section 16 of the Specific Relief Act, 1963, in so far as it is material, reads thus:

'16. Specific terms of a contract cannot be enforced in favour of a person :

(a) & (b) .....

(c) ..... who fails 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 terms the performance of which has been prevented or waived by the defendant.

9. In the present case, there is a clear averment in paragraph 9 of the plaint that 'the plaintiffs have been and still are ready to purchase the land in dispute for Rs. 16,368.75 according to the contract dated 17th January, 1967.' The present appellants, who filed a common written statement, stated in reply to the aforesaid paragraph that 'paragraph 9 of the plaint is incorrect and is not admitted. No contract was entered into with the plaintiffs on 17-1-1967. No question about their purchasing the land in dispute arises.' The first defendant, in his written statement, stated that paragraph 9 of the plaint was not admitted.

10. On the aforesaid pleading, it is obvious that the plaintiff made a clear averment that he was ready and willing to perform the essential terms of the contract which he had to perform. In fact, there is no dispute between the parties that the plaint contained the necessary averment in terms of Section 16 of the Specific Relief Act. The parties are, however, at issue about the question whether the later part of Clause (c) of Section 16 stands satisfied in the present case.

11. The requirement as to averment and proof of the plaintiffs' readiness and willingness to perform his part of the contract is clearly a mandatory one. The language in which Section 16 of the Specific Relief Act, 1963 is couched makes it abundantly clear that unless the plaintiff establishes to the satisfaction of the court that he has fulfilled the requirements of Clause (c) of Section 16, the court will not be able to grant a decree for specific performance of the contract in his favour. The absence of any plea on the part of the party resisting the plaintiffs' claim to a decree for specific performance of the contract will not matter at all and the plaintiff is bound in law to establish compliance with the requirement of Clause (c) aforesaid (See Mahomad Khan v. Ayub Khan (AIR 1978 All 463)).

12. It has been noticed above that the defendants, including the present appellants, did not leave the pleading contained in paragraph 9 of the plaint unchallenged. The court which tried the suit did not, however, focus its attention to this aspect of the matter at all. The issues which were framed by it were as follows :

(1) Did the defendant No. 1 and the plaintiffs enter into an agreement for the sale of the plots in dispute and was an agreement executed for the same on 17-1-1967?

(2) Did the plaintiffs pay Rs. 4,000/- as advance to the defendant No. 1 on the date of the agreement?

(3) Was the signature of the defendant No. 1 obtained on blank paper under the circumstances alleged in para 25 of his written statement? If so its effect?

(4) To what relief, if any, is the plaintiff entitled?

(5) Are the defendants 2 and 3 bona fide purchasers for value without notice of the agreement dated 17-1-1967?

13. None of these issues relates to the question of the compliance or otherwise of the requirement of Clause (c) of Section 16 of the Act. It is true that on the date when the first four issues were framed in the case, as also when the 5th issue was framed as an additional issue, the parties did not press for the framing of any other issue. Yet, the said fact could not be held sufficient to relieve the trial Court from necessity of framing an issue and going into the question as to whether the plaintiffs had satisfied the mandatory condition of law of proving that they were ready and willing to perform their part of the contract. The trial Court, however, did not advert to this aspect of the matter at all, nor did the lower appellate court.

14. It has been contended strenuously by Sri Rajeshwari Prasad on behalf of the plaintiffs that the present appellants themselves did not specifically plead that the plaintiffs were not ready or willing to perform their part of the contract nor did they join issue with the plaintiffs in that regard. As such, the absence of a finding by the courts below to the effect that the plaintiffs were so ready and willing should not be held to be enough to render the decree for specific performance passed in the case bad in law. In any case, proceeds the argument, the material on record was sufficient from which it could be inferred that the plaintiffs had established that they were ready and willing to perform their part of the contract.

15. As to the first part of the submission suffice it to say that the statutory requirement as contained in Section 16(c) of the Act in obliging the plaintiff to aver and prove that he was ready and willing to perform the essential terms of the contract which were to be performed by him before a decree for specific performance can be granted in his favour necessitates the examination by the court of the case from this view point and to record a finding about it. The fact that the plaintiff had complied with the mandatory requirement of Section 16(c) of the Act can only appear from a clear finding in that regard by the court in its judgment.

16. As to the second part of the aforesaid submission, it is to be noticed that 'readiness and willingness cannot be treated as a strait-jacket formula. These have to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned'. (See Ramesh Chandra v. Chunnilal, (AIR 1971 SC 1238)). Consequently, the Court of fact must focus its attention towards all the relevant facts and circumstances as to the intention and conduct of a plaintiff seeking a decree for specific performance and come to the conclusion that the plaintiff had proved his readiness and willingness for the performance of the essential terms of the contract which were to be performed by him. More appropriately, therefore, the matter should be gone into by a Court of fact in the first instance. The absence of a finding that the plaintiff was ready and willing to perform the essential terms of the contract required by him to be performed, would normally lead to a refusal of the decree for the specific performance of agreement in his favour. Where, therefore, in a case it is suggested that there is material on record from which it could be inferred that there was compliance on the part of the plaintiff of the mandatory requirement of Section 16(c) of the Act, the Court of fact should, in the first instance, be required to go into it. The appraisement of evidence by the second appellate Court in the first instance is likely to prejudice one party or the other to the cause.

17. Another grievance that is made by Sri Bhatnagar on behalf of the appellant, against the judgment of the lower appellate Court is that it did not deal with the question as to whether the defendant-appellants had notice of the earlier agreement of sale in favour of the plaintiff in accordance with law and that, in that view of the matter, it should be required to do so. The submission in this respect is founded mainly on the provision contained in Rule 31 of Order 41, C. P. C. which, in its material part, reads as follows :

'31. Contents, date and signature of judgment:--

The judgment of the Appellate Court shall be in writing and shall state--

(a) the points for determination;

(b) the decision thereon;

(c) the reasons for the decision; and

(d) where the decree appealed from is reversed, or varied, the relief to which the appellant is entitled; .....'

18. On the basis, in particular, of the aforesaid rule, it has been contended by Sri Bhatnagar that the Court below was under an obligation to deal with the question of the appellants having notice of the earlier agreement in favour of the plaintiff specifically and to record its reasons, albeit the same that appealed to the trial Court, and come to a categorical finding about it. The lower appellate Court, in the instant case, has not done so and that, on that account, its decision affirming the decree passed by the trial Court is vitiated in law.

19. There is considerable force in this submission. The Code of Civil Procedure lays down in sufficient detail the requirements which are to be fulfilled by the trial Court as well as the appellate Court in the matter of the judgment pronounced by them. Order XX, C. P. C. which lays down rules in regard to judgment and decree, provides in Rule 4 (2) that judgment of Court other than a Court of Small Causes shall contain a concise statement of the case, the points for determination, the decision thereon and the reasons for such decision. Rule 5 lays down that in suits in which issues have been framed, the Court shall state Its finding and decision with the reasons therefor upon each separate issue, unless the finding upon any one or more of the issues is sufficient for the decision of the suit. A perusal of the aforesaid rules indicates that the scheme of the Code contemplates the treatment of the point arising for determination and incorporation of the reason for the decision thereon in the judgment both of the trial as also of the first appellate Court. There is good reason for such a requirement because normally the findings on questions of fact recorded by the first appellate Court are accepted as binding upon the second appellate Court in Girjanandini v. Bijendra Narain Choudhary, (AIR 1967 SC 1124), it was observed by the Supreme Court that 'it is not the duty of the appellate Court when it agrees with the view of the trial Court on the evidence either to re-state the effect of the evidence or to reiterate the reasons given by the trial Court. Expression of the general agreement with reasons given by the Court decision of which is under appeal would ordinarily suffice.' These observations have to be read in the context in which they were made. The Supreme Court was dealing with the appellate judgment recorded by the High Court of Patna in a first Appeal from the decree of Subordinate Judge, Purnia. The High Court did not enter upon a reappraisal of the evidence but had generally approved the reasons adduced by the trial Court in support of its conclusion. The report does not indicate the nature of observations made by the High Court in the case on the question of the severance of plaintiff Bijendra Narain from his uncle Vidya Narain in regard to which the trial Court had come to the conclusion in the negative with which the High Court had agreed. The judgment of the Supreme Court, upon which reliance has been placed by Sri Rajeshwari Prasad, cannot be held to lay down that it is open to an appellate Court to affirm the findings recorded by the trial Court on a question of fact by a mere observation that the trial Court had arrived at that finding 'for good reasons' as has been done in the instant case by the lower appellate Court.

20. A perusal of the judgment of the lower appellate Court shows that the only two points which, according to it, arose for decision in the appeal were: (1) Whether defendant No. 1 Aman Singh and the plaintiffs entered into an agreement of sale on 17-1-1967 in respect of the land in dispute? and (2) whether there was a prior agreement of sale dated 6-11-1966 between the defendant No. 1 and defendants Nos. 2 and 3 in respect of the land in dispute? It is clear that the lower appellate Court did not direct its attention to the question as to whether defendant Nos. 2 and 3 in the suit, who are appellants in this Court, had prior notice of the agreement dated 17-1-1967. It did not discuss that aspect of the controversy in its judgment even though the trial Court had dealt with it and concluded under issue No. 5 that the present appellants had notice of the prior agreement of the plaintiff for the sale of the property in question in their favour. It is difficult to accept the submission of Sri Rajeshwari Prasad that, inasmuch as, the lower appellate Court has expressed the opinion that it agreed with the trial Court that the present appellants had colluded with the first defendant to deprive the plaintiffs of their rights under the agreement dated 17-1-1967, it should be accepted as amounting to the affirmance of the view of the trial Court that the present appellants had notice of the agreement dated 17-1-1967 when they purchased the property in question through the sale-deed dated February 3, 1967. The matter having not been gone into by the lower appellate Court in accordance with law, it is necessary that it be directed to do so.

21. The two contentions of Sri S. S. Bhatnagar noticed above deserve acceptance. As a consequence, the judgment and decree of the lower appellate Court are liable to be set aside and the matter is liable to be sent back to it for re-consideration in accordance with law. The appeal, therefore, succeeds and is allowed. The matter is remanded to the lower appellate Court for a fresh decision of the case in respect of the two questions, namely, whether the present appellants had notice of the earlier agreement dated 17-1-1967 of the plaintiffs with the first defendant for the sale of the property in question in their favour and whether the plaintiffs had proved, in terms of Section 16(c) of the Specific Relief Act, 1963 that they were ready and willing to perform the essential terms of the contract dated 17-1-1967 which were to be performed by them or not. Costs will abide the result. The appellants shall be entitled to a refund of the amount deposited by them in pursuance of the interim order passed in their favour by this court on January, 17, 1974 during the pendency of the present second appeal.


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