1. The decision of this appeal turns on the determination of the question whether the plaintiff-respondent was ready and willing to purchase the property from the defendants-appellants from the date of the contract between the parties till the date of the filing suit for specific Performance by the plaintiff respondent against the defendants appellants.
2. The suit for specific performance filed by the plaintiff-respondent against the defendants-appellants has been decreed by the trial Court. Hence this appeal by the defendants-appellants. The facts and circumstances on which the decision in the appeal would, be arrived at may be shortly stated.
3. The ground floor portion of the building in suit was leased by the defendants-appellants to the plaintiff-respondent in 1958. On 21-9-1961, the defendants appellants agreed to sell the building in suit to the plaintiff respondent. The conveyance of the Property, however did not take place and a fresh agreement to sell was executed by the defendant's appellants in favor of the plaintiff-respondent on 20-3-1962. The material clauses of the agreement to sell were as follows: -
(2) The sellers were to pay off the mortgage on the suit property in favor on one Kaushalya Rani arid deliver to the Purchaser the mortgage deed duly discharged at the time of the registration of sale deed.
(3) The sellers were to get the permission from the Ministry of Rehabilitation for the transfer of the lease deed of the land over which the said property was constructed before the execution and registration of the sale deed.
(4) The sellers were to produce satisfactory evidence as to the majority of Chandra Prakash and in case he was found to be a minor. Smt. Rai Rani Bhasin was to obtain the requisite Permission from the Court of the District Judge, Delhi, for the transfer of the share of the said Chandra Prakash in the suit -property.
(5), Subject to clause 9 the execution and registration of the sale deed was to be completed by the 8th of August 1962.
(9), In case the sellers failed to, get the sanction from the Ministry of Rehabilitation or to get the permission from the District Judge or to obtain the wealth tax certificate within the period stipulated for the transfer of the property the sale deed was to be executed and registered within one month from the grant of the sanction from the Ministry of Rehabilitation or from the grant of the permission by the District Judge or from the grant of the wealth tax certificate whichever would be the latest. The intimation regarding the receipt of sanctions and the certificate was to be given by the sellers to the purchaser by a registered acknowledgment due letter and the aforesaid period of one month was to be computed from the delivery of such letter to the purchaser or refusal by him to receive the said letter.
(16) The purchaser was to pay for the stamp duty, corporation tax, registration charges etc., necessary for the execution and registration of the sale deed.
4. The certificates regarding income-tax and wealth tax were received by the sellers during the period, from 11-7-1962 to 25-7-1962. The school certificate of Chandra Prakash showing his date of birth dated 10-5-1962 was in the possession of the sellers on or before 13th August 1962 inasmuch as a reference to it has been made by the sellers counsel in a letter of 13th August 1962 addressed to the purchaser's counsel, Last1v, the certificate from the Ministry of Rehabilitation dated 20th August 1956 was already with the sellers.
5. Let us now examine the conduct of the parties near about the 8th of August 1962 which was fixed as the date on which the sale deed was to be executed. On 1-8-1962 the purchaser's counsel wrote to the sellers requesting for the supply of the following documents, namely:- (1) original will left by the late Chanan Singh Bhasin, (2) Permission from the District judge. (3) permission from the Rehabilitation Ministry. (4) documents showing the discharge of mortgage of Kaushalva, Rani. (5) wealth tax clearance certificate. (6) receipts of the payment of ground rent and house rent etc., up-to-date. A perusal of the agreement would show that the purchaser was not entitled to have the original will of late Chanan Singh Bhasin. Similarly, the purchaser was not entitled to have the mortgage deed of Kaushalva Rani duly discharged prior to the date of the execution and registration of the sale deed. This was pointed out to the purchaser by the sellers in their letter of 3rd August 1962. In this letter it was also Pointed out that the date of sale was fixed as 8th August 1962 by a mistake under the impression that Chandra Prakash was to attain majority on that date. The said Chandra Prakash was actually to attain majority on 16-8-1962 instead of 8-8-1962. An application for permission had already been, made to the District Judge, If the District Judge were to grant the permission earlier than 16-8-1962, the sale deed would be executed and registered on such date otherwise the sale deed would be positively executed and registered on 16-8-1962. The sellers assured the purchaser that the permission of the Rehabilitation Ministry, the documents showing the discharge of the mortgage of Kaushalva Rani the wealth tax clearance certificate and the receipt of the house tax would be handed over to the purchaser at the time of the registration.
6. The reply of the purchaser dated 7th August 1962 stated that the purchaser did not understand where from the sellers had taken the date 16-8-1962. He argued that a perusal of the agreement would show that either the date was 8th of August or it was one month from the date when the sellers had given intimation to the purchaser regarding the permission of the District judge having been obtained. The purchaser also asked for the other documents as he wanted to be in possession of them before the sale deed was typed on stamped payer and drafted. The purchaser stated that the last para of the letter dated 3rd August 1962 in which the sellers had told the purchaser that the sale deed would be positively executed and registered on 16th August 1962 had no meaning. The purchaser refused to appreciate that Chandra Prakash was to become major on 16-8-1962 instead of 8-8-1962 and in that event the sale deed would be executed 16-8-1962 without the permission of Vie District Judge.
7. The crucial letter was written by the sellers to the purchaser on 13-8-1962 in which it was definitely stated that it was discovered from the school certificate that the date of birth of Chandra Prakash was 16-8-1944 and not 8-8-1944. It would appear, thereforee that by the 13th of August 1962 the sellers had informed the purchaser of their having acquired all the necessary documents stipulated in the agreement dated 20-3-1962. Thereafter no obstruction remained in the wav of the execution of the sale deed. Under Section 55 of the Transfer of property Act and Section 29 of the Stamp Act as also according to the agreement of 20th March 1962 the obligation was on the purchaser to purchase a stamp paper and tender the sale deed to the sellers for their execution. The initiative for getting the sale deed executed had thus to be taken thereafter by the purchaser. Unfortunately, the purchaser did not show his willingness to by the property even thereafter. On 18-8-1962 he wrote to the sellers and insisted that there was no, question of there being and mistake about the date. He also asked the sellers to produce the certificate of the District Judge. In view of this conduct, the sellers wrote to the purchaser on 30th August 1962 that the certificate of the District Judge had become unnecessary as Chandra Prakash had become major, that the necessary documents had already been shown to the purchaser that a copy of the school certificate showing the date of birth of Chandra Prakash was annexed to the letter and that the sellers were prepared to show to the purchaser or his counsel all the documents on any working day up to 5th September 1962 between 10 a. m. to 4 P. m. at their place. 1696. Mohan Building, Chandni Chowk, Delhi. The purchaser was also informed that the application made to the District Judge had become infructuous and was, thereforee Dismissed on 21-8-1962 inasmuch as Chandra Prakash had already attained majority on 16-8-1962. If the -purchaser was really willing to by the property he had to do nothing except to inspect the documents and tender a sale deed for the execution by the sellers. But on 4-91962 he again wrote to the sellers stating that the sellers had not supplied to him a copy of the order Passed by the District judge on 21-8-1962. The purchaser's counsel also denied that the documents have been shown to his client. He call upon the sellers to supply to him with a copy of the sale deed relating to the, and to enable him prepare a draft of the sale deed. He said that in the absence of the said sale deed of the land, a fresh conveyance deed in favor of the purchaser could not be drafted. The demand for the sale deed of the land was contrary to the agreement of the 20th March 1962. Similarly, the purchaser did not give any reply to the categorical offer made by the sellers that the documents could be inspected at their place. On 20th September 1962 Shri B. M. Gupta. counsel for the purchaser made a statement before the Additional Rent Controller admitting that Chandra Parkash had , attained majority and withdrew an objection to his being a minor and yet on 4th October 1962 he described Chandra Parkash as a minor represented by his mother. On 22-9-1962 the purchaser asked the sellers to supply to him with a Plan of the house. He repeated this demand on 4-10-1962. He averred that he had given a cheque for Rs. 12.600/- on 28-9-1962 to the son of Smt. Raj Rani for the purchase of stamp paper for drafting a sale deed. But according to the letter of 9-10-1962 written by the Agent of the Bank, the payment of the cheque had already been stopped by the purchaser by the letter dated 3-10-1962. It is not known whether the cheque was issued at all. But even if it had been issued, the payment of it had already been stopped by the letter of 3-10-1962. It was thus a false averment by the purchaser that he had given a cheque for the purchase of the Stamp paper to the sellers. The purchaser stated in the letter that the sellers had agreed to purchase the stamp paper. This averment was also false because on his own admission the purchaser had withdrawn the cheque alleged to have been given to the sellers for this purpose. Again in the letter of 4-10-1962 the purchaser was insisting on the supply of the documents by the sellers. This insistence wag completely unjustified inasmuch as the purchaser had failed to avail himself of the offer made by the sellers on the 30th August 1962 that the documents which had already been shown to the purchaser would again be shown to him and that the purchaser should inspect those documents at the office of the sellers.
8. Shri R. M. Lal, learned counsel for the plaintiff-respondent has relied on the finding of the trial Court that the plaintiff was ready to -perform his part of the contract inasmuch as he had the financial ability to pay the money there under. He has referred to the letters written by the plaintiff-respondent on 9-10-1962 and 6-11-1962 and the statement of his account with the Swastika Financial Corporation private Ltd., showing that he had the balance to his credit from which the purchase price could have been paid by him
9. It is in the context of these facts that we have to consider the question whether the plaintiff was willing to perform his part of the contract It is true that the agreement of 20th March 1962 was governed by the Specific Relief Act of 1877 which did not specifically require that the purchaser must aver and prove that he was ready and willing to purchase the property from the date of the agreement till the date of the suit. Nevertheless it was held by the Privy Council in Ardeshir H. Mama v. Flora Sassoon, 2nd 52 Bom 597 = AIR 1928 Pc 208 that this was the law in England and that the requirements of the Indian and English Law in this matter were the same. The Law Commission, thereforee, recommended that the new Specific Relief Act should specifically include this requirement to be fulfillled by the plaintiff suing for specific performance. Section 16(c) of the specific Relief Act. 1963 thereforee enacts that it would be a personal bar to the relief of specific performance in favor of a plaintiff 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 hag been prevented or waived by the defendant.
10. A distinction may be drawn between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract. This includes his financial ability to pay the purchase price. We will assume for the sake of argument that the plaintiff respondent could have raised the money to pay the purchase price if he wanted to do so. But the more important question is whether he was willing to perform his part of the contract even if 'he had the financial capacity to do so. It is here that the plaintiff's conduct has to be properly scrutinised. In our view, the trial Court has not done so. It has merely concentrated its attention on the financial ability of the plaintiff to raise the money to pay the purchase price but has not noticed the unwillingness of the plaintiff to perform his part of the contract and to present a sale deed on stamp paper for the execution of the defendants and to pay the purchase price from 16-8-1962 to 16-9-1962. The trial Court was under the misapprehension that the defendants complied with the terms of the agreement only on 8-9-1962 when the documents were handed over to the plaintiff respondent as per Exhibit D-38. It failed to notice that the agreement did not require the defendants to hand over any documents as such to the plaintiff. The permission of the Rehabilitation Ministry was with the defendants from 1956 onwards. The certificate of the Wealth Tax Officer was also obtained in good time and the plaintiff did not raise any dispute about it at any time during August September 1962. The plaintiff however, persisted in asking for a copy of the certificate from the District Judge. This was the only document the demand for which could be rested by the plaintiff on the agreement. The trial Court has found that the defendants were not bound to give the certificate from the District Judge to the plaintiff inasmuch as the application for the certificate was dismissed by the District Judge on 21-8-1962 as Chandra Prakash had attained majority on 16-8-1962. The trial Court, however thought that either a registered notice in terms of the agreement or a Personal delivery of the copies of the certificates would amount to compliance with the agreement. The trial Court failed to see that the registered letter of 13-8-1962 complied with the terms of the agreement. For it referred to the school certificate which the trial Court hag rightly held to be a satisfactory evidence of the age of Chandra Parkash. The defendants had already informed the plaintiff that the other two documents namely, the permission of the Rehabilitation Ministry and the certificate of the Wealth Tax Officer had been already obtained by the defendants. The defendants had informed the plaintiff that Chandra Parkash wag to attain majority on 16-8-1962. The plaintiff was not justified in either insisting that the date of the performance of the agreement could not be changed from 8-8-1962 to 16-8-1962 or that the certificate of the District Judge must be obtained even though Chandra Parkash was to become major on 16-8-1962. For, under Section 8 of the Hindu Majority and Guardianship Act, 1956 the question of grant of the certificate by the District Judge could not arise after Chandra Parkash had obtained majority. It is only because the intimation regarding the school certificate was given to the Plaintiff by the registered letter dated 13-81962 that we have to hold that a literal compliance with clause 9 of the agreement was fully made by the defendants on 13-8-1962. Otherwise the substance compliance was made even prior to that date inasmuch as the defendants bad communicated to the plaintiff before that date that Chandra Parkash was to attain majority on 16-8-1962 and not 8-8-1962. As the attitude of the plaintiff even from before 13-8-1962 was dilatory, the defendants were justified in thinking that the plaintiff wag delaying, to pay the purchase Price in time and to buy the Priority. The question of delay on the Dart of the Plaintiff has to be considered in the background of two more pre-existing facts. Firstly the plaintiff was a tenant of the defendants occupying the around-floor of the building in suit. It is because the plaintiff represented to the defendants that he wanted to buy the property that the defendants had refrained from filing a petition for his eviction on the ground that the defendants wanted possession of the building in suit for their own bona fide occupation. The plaintiff had agreed to buy the property in 1961 but because he did not pay the purchase money the said agreement had fallen through and the new agreement of 20th March 1962 wag entered into. The facts regarding the procrastination by the plaintiff had been finally set out in the pleading made by he defendants and the evidence adduce them. They have not been rebutted by the plaintiff. The defendants were found justified in thinking that the plaintiff was interested merely in prolonging his tenancy as much as possible on the pretext that he wag buying the property and the defendants should not take steps to evict him. Later when the defendants took proceedings to evict him, the plaintiff the eviction proceedings staved on the ground that his suit for specific performance was pending. In this manner the plaintiff has managed to stay in the premises from 1961 onwards till now. Secondly, the Plaintiffs conduct shows that he only wanted to have a grip on the suit premises so that the defendants would not be able to transfer them to some other Person. Thereby the plaintiff could ensure the continuance of his stay in the premises. The business of the plaintiff was that of financing purchase of vehicles, etc. He was thus interested only in tying up the property in suit by a Purchase contract and indefinitely prolonging the performance of the same. In the above circumstances, we are of the view that the plaintiff was not willing to perform his part of the contract and this became apparent to the defendants by 13-8-1962.
11. Shri Lonial for the appellants argued that the willingness of the plaintiff to perform his part of the contract must be judged not by the mere assertions made by the plaintiff from time to time that he was always willing to buy the property but by considering whether the conduct of the plaintiff was in accordance with the contract. It is settled law that if plaintiff behaves contrary the contract and insists that the sale by the defendants should be on terms which are different from the terms of the contract then the plaintiff hag failed to show that he was willing to perform his part of the contract when the plaintiff insisted upon the defendants' furnishing him with a certificate of the District Judge even when he was told that Chandra Parkash was attaining majority on 16-8-1962 and even after Chandra Parkash had so attained majority he was acting contrary to the contract. Similarly, his insistence on seeing the will by late Shri Chanan Singh Bhasin or for the supply of the plan of the building was also contrary to the contract. He also failed to offer a stamped sale deed for its execution by the defendants and to pay the purchase price in time. Such conduct has been held, to be the evidence of the plaintiff's failure to prove his willingness to perform his part of the contract in Hawkins v. Maltby. (1867) 3 Ch A 188: Babu Bindeshri Parshad v. Mahant Jairam. Gir, (1886) 14 Ind App 173 and Md. Ziaul Haque v. Calcutta Vyaper Pratisthan., : AIR1966Cal605 , Der A. N. Ray, J. as he then was. As against this, Shri R. M. Lal for the plaintiff-respondent has argued that the insistence by the plaintiff on being furnished with certain documents which the defendants were not required to furnish according to the agreement did not by itself show that the plaintiff was not willing to perform his part of the contract. In our view the distinction between conduct which would disentitle the plaintiff from specific performance and conduct which would not so disentitle him is as follows. If the conduct of the plaintiff shows that he was really unwilling to buy the property then the plaintiff is disqualified from specific performance. If on the other hand, the plaintiff was always willing to buy the property but in doing so made a mistake in insisting on some thing which he was not entitled to get from the defendants then such a mistake would not disqualify him from specific performance if the mistake was corrected in time and the plaintiff had made it clear that he had withdrawn the mistaken demand and the mistake did not detract his essential willingness to purchase the property. The plaintiff in the present case did not withdraw the demand for the certificate of the District Judge or for the plan of the building or for the will of late Shri Chanan Singh Bhasin. He did not say that the demand for these documents was made by a mistake. He did not clarify that the demand of these documents was not a condition precedent to his performance of the contract. On the contrary, from his failure to tender a stamped sale deed and, to pay the purchase price could be understood that the supply of these documents was a condition precedent to his performance of the contract because he purported to wait for the supply of these documents. As observed by the Supreme Court in Gornathi , Pillai v. Pallaniswami Nadar. : 1SCR227 approving the observation of the trial Court:-
'Mere assertion in the plaint that he was ready and willingly to perform the contract was not sufficient and his readiness and willingness had to be judged from what he had done or from his conduct subsequent of the agreement The reasons set up by the respondent for the delay in taking steps in the matter were obviously untrue and that the respondent wag trying to put the blame on the appellants and inventing excuses to explain the omission in taking the sale deed.'
The finding of the trial Court that the plaintiff-respondent was unwilling to purchase the property was upheld by the Supreme Court and the appeal of the defendant appellant was allowed.
12. As against this the decisions cited by Shri R. M. Lal for the Plaintiff are distinguishable. In Ma So Bon v. Ma Da Twe, Air 1924 Pc 233 the departure of the promise from the contract was not complained of by the promisor. It was also not material for the performance of the contract. It did not thereforee bar the promise from specific performance. In the present case, the departure of the plaintiff from the terms of the contract was material because it delayed the performance of the contract by the plaintiff. In Jainarain v. Suraimull, , after the contract was concluded one of the parties started fresh negotiations with a view to introduce new terms. This was done under a mistake but had no effect in alter the conduct of the other party. If the subsequent negotiations failed the party which attempted to reopen the concluded contract could still specifically enforce it. In the Present case, on the other hand the attempt of the plaintiff to add fresh conditions to be performed by the defendants evoked a quick response from the defendants who told the plaintiff in no uncertain terms that he was departing from the contract and that he could not there by delay the performance of his part of the contract. By the registered notice dated 13-8-1962 which was received by the plaintiff on 14-8-1962 the defendants gave the plaintiff a little over 30 days time to perform his part of the contract and thereby complied with the contract which required that the plaintiff should have 30 days time to perform his part of the contract plaintiff these 30 days the plaintiff kept on insisting on the additional terms contrary to the contract. The defendants were thereforee justified in concluding that the plaintiff was not interested in performing his part of the contract which there by fell through by 16-9-1962. No question of performance of the contract thereafter could arise. In M. Venkavya v. M. Seshavva, Air 1954 AP 29, a mere dispute, regarding the form which the sale deed should take could not affect the completeness of the contract nor could it amount to repudiation of the contract because it was not persisted in and tile plaintiff later expressed his readiness and willingness to perform the contract agreed to. In the present case, on the other hand, the plaintiff persisted in the additional demands and did not express that he was willing to give up those demand and perform his part of the contract by 16-91962. In Durga Prasad v. Deep Chand, : 1SCR360 the vendees, insistence on the form of warranty to be inserted in the sale deed subsequent to the contract for sale could not affect the contract. It could in a given case disentitle him to specific performance. But that would depend upon whether his proposal regarding a form of warranty to which he was not entitled was a mere proposal regarding the form of the sale or was a refusal to perform without it. In the present case the plaintiff never said that he was willing to perform his part of the contract without the additional documents and the conditions on which he was insisting. Shri R. M. Lal argued that the plaintiff never said that the demand made by him were condition precedent to the performance of the contract by him. But in our view without saying so the conduct of the plaintiff amounted to it. He did not accept the offer of the defendants to inspect the documents: did not tender a stamped sale deed for the execution by the defendants and did not pay the purchase money. He thereforee, obviously made the additional conditions an excuse for his non-performance. As the excuse was untenable the only conclusion from his conduct was that he was not willing to perform his part of the contract,
13. It is our considered view thereforee, that in the background of the facts and circumstances of this case the conduct of the plaintiff clearly to an unwillingness to perform his part of the contract. On this finding alone the suit of the plaintiff was liable to be dismissed. No other issues arise. It is only to complete the discussion that we wild refer to them.
14. Shri R. M. Lal minted out that in their letter of 18-8-1962 the defendants illegally asserted that the plaintiff would be liable to pay interest the balance price of Rs. 1,55.0,00/- to the defendants. Firstly this point has no, been raised by the plaintiff either in the plaint or in the rejoinder. In the absence of any defendants could not have say up on it. Secondly, the de did not persist in this demand Thirdly the Plaintiff during the negotiate did not make it an excuse for not performing his part of the contract. No significance can, thereforee, be attached to it and it has no bearing on the decision of this case.
15. Shri R. M. Lal then said that even if it was assumed that the plaintiff unwilling to perform his part of the contract during August-September 1962 the time was not the essence of the contract and the plaintiff had subsequently stated that he was willing to perform his part of the contract but the defendants took up the stand that such willingness after 16-9-1962 was no avail to the plaintiff. Learned counsel contended that the defendants were not entitled to make the time the essence of the contract by the notice of 13-8-1962 and to insist that the sale deed must be completed by 16-9-1952. It is true that the presumption is that in a contract for sale of immovable property the time is not the essence of the contract. A mere stipulation of a date before which the sale deed was to be executed and the stipulation that the earnest money would be forfeited if the date was not adhered to also would not necessarily make the time the essence of the contract. But the sellers were entitled to make the time the essence of the contract by specifically giving a notice to the purchaser if the purchaser was found to be delaying the performance of the contract. In Gomathinayagam Pillai's case, the Supreme Court clearly recognized this right of the sellers. In that particular their Lordships observed that no such notice was given by the sellers and thereforee, time was not made the essence of the contract. But in the present case the notice the defendants making the time the essence of the contract specifically gave dated 13-8-1962. This decision of the Supreme Court is, thereforee sufficient to negative the contention of Shri R. M. Lal. Consequently, the proposition that ordinarily the time would not be the essence of the contract laid down in Jamshed Khodaram Irani v. Buriorii Dhuniibhai. Air 1915 Pc 83 does not help the plaintiff-resnondent.Shri R. M. Lal also referred to the decision of the Supreme Court in Ramesh Chandra v. Chuni Lal. : 2SCR573 . In that case, the sellers did not perform their part of the contract and could not insist on specific performance but in the present case the sellers did so and could insist on specific performance. The trial Court failed to notice that the compliance of their part of the contract by the defendants was complete when the registered notice of 13-8-1962 was sent .The period of 30 days had thereforee to be counted from 14-8-1962 when the said notice was received by the plaintiff and not from 8-9-1962 as the trial Court purported to do. It is this fact which has led the trial Court to conclude that the time for performing the contract has not expired on 16-9-1962. As we have come to the conclusion that it could so expire we are of the view that the failure of the plaintiff to show his willingness to perform his part of the contract up to 16-9-1962 disqualified him to specific performance and the defendants were not required thereafter to treat the contract as alive.
16. We, thereforee set aside the Judgment and decree of the trial Court and order that the suit of the plaintiff respondent shall stand dismissed with costs throughout. The costs of this appeal shall also be borne by the plaintiff respondent. We are gratified to note that the defendants-appellants have been more than fair inasmuch as they are said to have returned the earnest money of Rs. 25,000/- to the plaintiff respondent. We did not, their fore, have to consider the question if the said earnest money or a reasonable Dart thereof stood forfeited by the failure of the plaintiff perform his part of the contract.
17. In the result, the appeal is allowed in the above terms and the cross objections filed by the plaintiff respondent are dismissed.
18. Appeal allowed.