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Kantilal C. Shah Vs. A.G. Devarajulu Reddiar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1977)2MLJ484
AppellantKantilal C. Shah
RespondentA.G. Devarajulu Reddiar
Cases ReferredFrlanger v. New Sombrero Phosphate Co.
Excerpt:
.....only in june, 1967 for reasons better known to the plaintiff, he sought for the completion of the sale as per the recitals in exhibit a-1 and this, according to the defendant, was because the prices of the lands, which are the subject matter of the suit, had gone up considerably by then. 9,000 and the matter drifted like that. on the other hand, the defendant would say in his evidence that the plaintiff gave up his idea to purchase the land even in 1963. this he reiterated in the written statement as well. in the case under review there has not been that demonstrative exhibition of good faith or a conscious desire to respect obligations and above all there has not even been an indication that the plaintiff was reasonably diligent in seeking for his remedies. (3) the power of the court..........per arnum. we do not think that he is entitled to it for the reason that he did not seek for such an alternative remedy even in the first instance oratary reasonable time thereafter. while therefore, reversing the judgment and decree of the court below, we direct the defendant to pay the sum of rs. 12,000 only which was the amount admittedly paid as advance on the date of the agreement of sale exhibit a-1. in passing we may say that we agree with the finding of the court below that no other amount was paid by the plaintiff to the defendant nor is there any proof that the defendant has suffered the damage of rs. 3,000 as alleged by him. the plaintiff on payment of the sum of rs. 1,2,000 shall return the documents of title received by him in pursuance of the contract of sale.13. the.....
Judgment:

T. Ramaprasada Rao, J.

1. The plaintiff, who lost his suit for specific performance of a contra of sale in O.S. No. 107 of 1968 on the filt of the Court of the Subordinate Judge Chingleput, is the appellant. Unde, Exhibit A-1 dated 28th May, 1962 which was a registered agreement of sale, there plaintiff contracted to purchase 5 acres and 68 cents of land belonging to the defendant for a sum and consideration of Rs. 52,000. He paid a sum of Rs. 12,000 advance thereunder. Contemporaneously, it would appear that the plaintiff's wife and his sister entered into two other agreements to purchase similar lands belonging to the defendant under two independent contracts with which we are not very much concerned in this case, excepting to refer to it at appropriate places in so far as it has an impact on the facts and circumstances of this case. The plaintiff's case is that apart from the sum of Rs. 12,000 he paid a sum of Ps. 4,000 and a further sum of Rs. 1,000 on 25th August, 1964 and 21st January, 1965 respectively and notwithstanding the payment of Rs. 17,000 as above and in spite of his demands made for the due performance of the contract on the part of the defendant and although he was ready and willing to pay the balance of consideration and get the sale deed executed by the defendant, the defendant was evading performance. He has sought for possession as well if he succeeds in his claim for specific performance. The defendant in the written statement would refer to the two other agreements contemporaneously entered into between him and the plaintiff's sister and wife and would have that soon after the date when the agreements of sale as a foresaid were entered into, there was a notification issued by the State Government under Section 4(1) of the Land Acquisition Act setting the compulsory process in motion to acquire 2 acres and 40 cents out of the four acres agreed to be sold by the plaintiff's wife and sister. According to the defendant, it was the plaintiff, who brought about the agreements as between his relatives and himself and as a result of the notification for the compulsory acquisition of a portion of the land, the plaintiff was not inclined to complete the transaction, but on the other hand was anxious to receive back the amounts paid by him as advances. He would refer to the recitals in the agreement and would contend that the plaintiff at the time when he entered into the contract required the lands agreed to be purchased by him for purposes of erecting a chemical factory and he was, therefore, anxious to complete the transaction as early as possible. That such was the intention between the parties is undoubtedly clear from Exhibit A-1, the contract of sale. The defendant would allege that the land acquisition process went on as regards the other properties agreed to be sold by the plaintiff's wife and sister and during the course of such proceedings, the plaintiff gave the impression that he was not anxious to pursue his own contract for the purchase of the suit land under Exhibit A-1. According to be defendant, the plaintiff went away to north India and for more than three years, he did not return, nor did he claim the advance paid by him. Only in June, 1967 for reasons better known to the plaintiff, he sought for the completion of the sale as per the recitals in Exhibit A-1 and this, according to the defendant, was because the prices of the lands, which are the subject matter of the suit, had gone up considerably by then. He also alleges that there were certain negotiations in the matter of the return of the deposit and the defendant made it clear that by reason of the inordinate delay and due to the intervening land acquisition Process, he had to spend about Rs. 3,000 and that the said sum of Rs. 3,000 was deductible by him from the advance given by the plaintiff. The plaintiff Would not agree to the return of the sum of Rs. 9,000 and the matter drifted like that. In these circumstances, the case of the defendant is that it was the plaintiff, who was admittedly avoiding the performance of the contract and was postponing the same deliberately and did not want the land and indeed agreed to take back the advance; The plea as to the bar of the suit by the law of limitation is also taken. It is common ground that the present suit was instituted on 31st of October, 1968 and in that context the plea is that the suit is barred by limitation. In any event the plaintiff ought to have demanded the performance of the contract within a reasonable time and having regard to the circumstances of the case, the inference is, that the plaintiff has abandoned his relief for specific performance and in this context also the defendant would say that the plaintiff is not entitled to the decree as prayed for. The plaintiff filed a reply statement reiterating his original stand and denied that he ever sought for the refund of the advance amount and stressed his intention to obtain specific performance of the contract in accordance with the to nor of Exhibit A-1. The plaintiff denies that the suit is barred by limitation.

2. On these pleadings, the fallowing issues were framed, by the trial Judge.

(1) Whether the sum's of Rs. 4,000 and Rs. 1,000 were paid towards the suit agreement?

(2) Whether the defendant committed breach of contract?

(3) Whether the agreement was not a complete one?

(4) Whether the suit is barred by limitation?

(5) Whether the plaintiff is entitled to the specific performance asked for?

3. The trial Judge held that the plaintiff was not entitled to the discretionary relief of specific performance in that there was inordinate delay in its performance and would accept the defendant's case that the plaintiff made it appear by his own conduct that he was not interested in the sale. He held that he was convinced that the plaintiff gave up the enforcement of the contract. He also found that the suit agreement was not a complete one and the plaintiff has com up at a belated stage for the relief of specific performance, since he wanted to take advantage of the increase in prices to the suit land by the march of time. The lower Court also found that apart from the sum of Rs. 12,000 paid under the agreement, no further sums such as the sum of Rs. 5,000 claimed by the plaintiff in the plaint was paid by him to the defendant. In the result, the suit was dismissed with costs. The plaintiff appeals.

4. Mr. N.S. Raghavan, learned Counsel for the appellant-plaintiff stresses on the fact that though there was delay in the matter of the plaintiff's claim for specific performance, yet the circumstances of the case do not warrant the inference that the plaintiff gave up or abandoned his rights under the contract. He would hesitantly urge that a further sum of Rs. 5000 was paid to the defendant by the plaintiff and that the lower Court was wrong in having found that no such sum was paid by him. In the end, hr world say that in he absence of any breach in the matter of the acceptance of a deed of sale as per the contract of sale, the Court should not refuse to exercise its jurisdiction to grant the relief for specific performance of the contract. In the 'alternative, however, Mr. Raghavan finding that his client was more or loss in troubled waters, filed a petition before us C.M.P. No. 6715 of 1976 praying that if this Court finds that the equitable relief of specific performance could not be granted for some reason or other, the plaintiff may be at last given a decree in the sum of Rs. 12,000 admittedly paid as advance on the date of agreement, together with interest thereon at 6 per cent, per annum from the date of the agreement.

5. A perusal of the agreement of sale makes it clear that the plaintiff was interested in acquiring this property by purchase at an early date and it is common ground that he negotiated for the purchase of this property so as to set up a chemical factory therein. We have already referred to the circumstances that along with Exhibit A-1, two other agreements of sale were entered into between the defendant on the one hand and the plaintiff's wife and sister on the other. As it is not necessary to refer to this agreement in detail, we are not traversing the recitals therein. We are however constrained to refer to them for the reason that all the parties were alerted by then by the notification issued by the State Government under Section 4(1) of the Land Acquisition Act by which some portion of the properties which the plaintiff wanted to. purchase from the relatives of the defend ant were sought to be acquired. When a compulsory process of land acquisition is set into motion under the extraordinary powers of the State Government and if it is made known to the persons affected thereby, then it is common knowledge that persons in and around the limits of such properties ought to be acquired are equally alerted and they either normally take such steps to preserve the properties for themselves or try to take advantage of the process of increasing the prices of their own lands. This is a human tendency which is universal. In the instant case, however, the impact of the land acquisition proceedings was otherwise. The plaintiff was not sure whether the lands which he agreed to purchase from the defendant would also be included in the acquisition. Obviously he felt nervous about it, Therefore, it is he, who attempted to drift and got himself involved more in the other lands, which were the subject-matter of the proposed acquisition rather than fulfil his obligations under the contract under Exhibit A-1 or make it appear to the defendant that he was interested in completing the transaction as per the recitals in Exhibit B-1 which says that both parties agreed to have the transaction implemented as early as possible. The plaintiff appears to be a person interested in commerce and when he adopted the expression 'as early as possible' he means what he says. In spite of it he, as seen hereafter, did not, for reasons known to him and for reasons which are obvious to us, try to approach the defendant either personally or through correspondence informing him of his anxiety and desire to complete the transaction and obtain the sale deed. On the other hand, the defendant would say in his evidence that the plaintiff gave up his idea to purchase the land even in 1963. This he reiterated in the written statement as well. This statement of fact by the defendant both in the witness box and in the pleading appears to us to be nearer the truth. That is so because no correspondence ensued as between the plaintiff and the defendant until we reach the year of grace 1967, when for the first time after the contractof sale was entered into the plaintiff purports to exhibit his so called anxiety to purchase the property. Till then he did not approach or write to the defendant about it. But the plaintiff would rely upon the evidence of P.W. 2 one of the Directors of his own company. P.W. 2 has been rightly disbelieved by the Court below. According to P.W. 2 he was contacting the defendant often and even wrote Exhibit A-9 for the purpose. The receipt of Exhibit A-9 is denied by the defendant. But, as pointed out by the learned trial Judge, P.W. 2 being very much interested in the plaintiff was echoing his master's voice when he swore that he, has been, contacting the defendant on many occasions. Nothing prevented either the plaintiff or P.W. 2 from writing a registered letter as the plaintiff did on a late r occasion calling upon the defendant to perform his part of the obligation. Eschewing, therefore, the testimony of P.W. 2 as was done by the trial Court, we have only the interested testimony of P.W. 1.

6. We have already referred to the fact that the plaintiff openly adopted an attitude of drift and would not even correspond with the defendant. A person interested in obtaining immovable property in exercise of his right under a contract of sale, would not be so silent and inactive for a period of five years. The first letter which the plaintiff wrote was Exhibit A-2 dated 10th June, 1967 in which he says that he just returned from a religious tour from the north and he was fasting for 14 months prior to the writing of the letter. According to the plaintiff he understood from P.W. 2 that several letters were addressed by P.W. 2 to the defendant. In these circumstances, he concludes by saying 'As I feel there is no point in delaying the registration of sale any further, would you kindly see that the sane is attended to as early as possible.' The plaintiff again alleges that he sent Exhibit A-3 dated 17th July, 1967 the receipt of which is denied by the defendant. The point however is that till 1967 this slumbering inactivity of the plaintiff is obviously demonstrative. Thereafter, he comes to Court and seeks for specific performance of the contract. What is therefore the reasonable inference that could be drawn from such open inactivity on the part of the plaintiff? According to the plaintiff, the delay was due to the acquisition process and his absence from Madras, but he was only absent in connection with the religious tour and a fast and nothing prevented him from writing a letter to the defendant early in 1963 or in 1964 or in 1965 or in 1966 seeking for the performance of the contract. Excepting for ushering in P.W. 2 to bridge the gap of silence, the plaintiff has no explanation for the delay and the unexplained inaction. It is no doubt true that me re delay in seeking for the relief of specific performance by itself cannot be a ground for the Court to refuse to exercise its judicial discretion to grant the equitable relief. But want delay and unexplained silence cannot be equated to mere delay and in such cases the burden is very heavy on the plaintiff to show that he had a purpose and not a design when he kept silent and aid not demand performance. It is by now established that the delay simplicitor without any breach caused to the defendant or which would not amount to abandonment or waiver does not empower the Court to refuse specific performance. But what then is abandonment? Proof of abandonment or waiver of right could be established by a course of conduct demonstrated in a given case or an attitude of wanton drift adopted by the plaintiff which by itself is an indicia of his unwilling ness to involve himself further in the bargain.

7. We may at this stage refer to certain decided cases revolving upon the delay and laches which throw considerable light upon the main issue in this case. As pointed out by the Privy Council in Lindsey Petroleum Go. v. Hurd (1874) L.R. 5 P.C. 221 :

Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party, and cause a balance of justice or injustice in taking one course or the other, so far as relates to the remedy.

Again Lord Panzance said in Frlanger v. New Sombrero Phosphate Co. (1876) 3 A.C. 1218 :

Delay, as it seems to me, has two aspects. Lapse of time may so change the condition of the thing sold, or bring about such a state of things that justice cannot be done by rescinding the contract subject to any amount of allowances or compensation. This is one aspect of delay. But delay may also imply acquiescence. It conduces, I think, to clearness and to the exclusion of a certain vagueness which is apt to hang about this doctrine of delay as a bar to relief, to keep these two different aspects of it separate and distinct when the consequences of delay come to be considered in connection with the circumstances of an individual case.

The Supreme Court in Satyanarayana v. ralloji Rao : [1965]2SCR221 , observed:

While in England mere delay or laches may be a ground for refusing to give the relief of specific performances, in India mere delay with out such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waive r of a right is not a precondition necessary to disentitle the plaintiff to the said relief, for if abandonment or waiver is established, no question of discretion on the part of the Court would arise. We have used the expression 'waiver' in its legally accepted sense, namely, 'waiver' is contractual, and may constitute a cause of action.

8. It is an agreement to release or not to assert a right. The question is whether in the instant case, there is enough material for us to infer that the conduct of the plaintiff is equitable to abandonment or waiver of his right to claim specific performance of the contract of sale. No doubt abandonment is a matter which sometimes might be deduced by positive material and objective facts. But it is not uncommon for courts to find in give n casts that they could presume such abandonment by reason of a course of conduct adopted by a drifting litigant, who is deliberately silent about his rights and wakes up only at convenient times on which occasions, of course, he has an unfair advantage over, the other. We used the words 'unfair advantage' because the lands, which are the subject-matter of the contract of sale, were in and around the lands which were acquired for the public purpose of establishing a surgical factory. It would be normal to expect that the price of lands in the vicinity would have shot up by reason of such acquisition. It is this circumstance which is undoubtedly fortuitous was taken advantage of by the plaintiff when he resurrected this claim or performance of the contract five years after the time expired for its due performance. The plaintiff intended to obtain a sale as early as possible. The delay of five years which is unexplained cannot be said with any reasonableness to be a period after which the plaintiff could seek specific performance. This very attitude give s the impression that there was a design on the part of the plaintiff to avoid the contract if possible. He wanted the restoration of the status quo only in 1967 when it cam light that it would be advantag ous for him to acquire the property then, as the prices have gone up on the vicinity. That the prices have gone up in the vicinity has been assumed by us be cause we take judicial notice of such an unearned increase in price of lands which are near-by acquired lands and which acquisition is for a cause which is highly beneficial to the community at large, having regard to such circumstances as above we are of the view that though there is no objective proof of waiver or abandonment in this case, certainly it could be said that the plaintiff subjectively did not mind giving up the contract or abandoning it if possible. If, then fort, the plaintiff; according to us, is guilty of laches in the matter of the demand for performance of the contract, then it follows that he cannot sack for the equitable relief of specific performance. Ordinarily the grant of the relief of specific performance is within the judicial discretion of Courts. Being an equitable relief the party who seeks for it should do equity. The plaintiff, in our view, has not been equitable but on the other hand was highly inequitable. He kept quiet discretely for a long period of five years without giving any impression to the defendant that be wanted the land contracted to be purchased by him. Such an attitude on the part of the plaintiff does not compel us to excise our discretion in favour of the plaintiff. In the case under review there has not been that demonstrative exhibition of good faith or a conscious desire to respect obligations and above all there has not even been an indication that the plaintiff was reasonably diligent in seeking for his remedies.

9. For all the reasons as above agree with the Court below though not for the reasons stated by it that the plaintiff is not entitled to specific performance.

10. The next question is whether, the plaintiff is entitled to any relief at all. Section 22 of the Specific Relief Act, 1963, provides as follows:

22. Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908, any person suing for the specific performance of a contract for the transfer of immovable properly may, in an appropriate case, ask for -

(a) possession or partition and separate possession, of the property, in addition to such performance; or

(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused.

(2) No relief under Clause (a) or Clause (6) of Sub-section (1) shall be granted by the Court unless it has been specifically claimed provided that where the plaintiff has not claimed any such reliefs in the plaint. The Court shall at any stage of the preceding allow him to amend the plaint on such terms as may be just for including a claim for such relief.

(3) The power of the Court to grant relief under Clause (b) of Sub-section (1) shall be without prejudice to its powers to award compensation under Section 21.

11. This non obstante provision enables the plaintiff, who is not (sic) seeking for the appropriate relief at the appropriate time to ask for it even at a later stage provided the Court is satisfied that it is just and necessary to grant him the prayer. This is a case in which both the parties were award over since the inception of the contract that there was the land acquisition process hanging as a Damocles sword which prevented the plaintiff from surging forward towards the completion of the contract and equally prevented the defendant from pressing for the performance of it. Such a legal inconvenience which was sandwiched between the parties continued tell 1967 Therefor, ft is that the plaintiff as we already observed, did not take the risk of (sic) his rights. But the point is that when the plaintiff's claim is negatived on the ground that by reason of his overt acts he has abandoned or subjectively should be deemed to have waived his rights to secure the right for specific performance, then should be debarred from claiming the refund of his earnest money or deposit which he admittedly had made under the contract of sale. To negative this alternative relief sought for in G.M.P. No. 6715 of 1976 would be to unjustly enrich the defendant. As the doctrine of unjust enrichment is not encouraged by Courts administering equity and as this suit is mainly for grant of an equitable relief, we are satisfied that though this application has been filed at this stage, this ought to be allowed. C.M.P. No. 6715 of 1976, is therefore, allowed. But we may state that Mr. Venkataraman stoutly opposed the allow ance of this application at this stage. But as we said justice requires that the plaintiff, who has suffered enough by the relief of grant of specific performance being negatived, should not also be denied this just relief of getting back his deposit amount, as it would not only restore him to his original position but also would not allow the defendant to unjustly enrich himself by retaining it.

12. As we have allowed C.M.P. No. 6715 of 1976, it follows that the plaintiff would be entitled to a decree in his favour for the return of the sum of Rs. 12,000 paid as advance on the date of the agreement of sale. The plaintiff has asked for interest there on at the rate of 6 percent per arnum. We do not think that he is entitled to it for the reason that he did not seek for such an alternative remedy even in the first instance oratary reasonable time thereafter. While therefore, reversing the judgment and decree of the Court below, we direct the defendant to pay the sum of Rs. 12,000 only which was the amount admittedly paid as advance on the date of the agreement of sale Exhibit A-1. In passing we may say that we agree with the finding of the court below that no other amount was paid by the plaintiff to the defendant nor is there any proof that the defendant has suffered the damage of Rs. 3,000 as alleged by him. The plaintiff on payment of the sum of Rs. 1,2,000 shall return the documents of title received by him in pursuance of the contract of sale.

13. The appeal is accordingly allowed to the extent indicated above, but there will be no order as to costs.


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