IN THE COURT OF THE I ADDITIONAL DISTRICT JUDGE AT
NIZAMABAD
Wednesday this the 18th day of January, 2012.
Present: Sri M. LAXMAN, B.Sc., LL.M, I Addl. District Judge, Nizamabad
O.S. No. 8 of 2003
Between:
1. K. G. Bhagwan Reddy S/o K. Ram Reddy, aged 32 years, Occ: Business R/o. H.No. 3-1-39/1, Teachers’ colony, Armoor, Dist., Nizamabad.
2. L. Sudhakar S/o Poshetty, aged 39 years, occ: Business R/o. H.No. 3-1-1/1/8, Mahalaxmi road, Armoor, Dist., Nizamabad. …Plaintiffs
And
Smt. Noorjahan Begum W/o M.A. Haleem, aged 60 years, Occ: Household, R/o H.No. 9-11-40/A, Ahmedpura colony, Nizamabad.
.. Defendant
This Original Suit coming on 1-12-2011 for final hearing before me in the presence of M/s M. Ganga Reddy & T. Vinod Kumar, Advocates for plaintiffs, and Sri A. Sangameshwar Rao, Advocate for defendant and having stood over for consideration till this day, the Court delivered the following:- -:: J U D G M E N T ::-
1. The present suit has been filed under Sec. 26 Order VII Rules 1 & 2 C.P.C. for specific performance of contract of sale dt.22-10-2001 by receiving balance sale price and to restrain the defendants from alienating the suit schedule property pending suit.
I-Plaintiffs’ pleadings:
2.(i) The plaintiffs have contracted with defendant for purchase of open land in Sy.No.408 and 409, admeasuring Ac.1-17 1/3 guntas or 0-57 1/3 guntas, situated at Armoor village, Nizamabad District ( hereinafter called “ suit property”). The total sale price agreed by the parties was Rs.12,25,000/- and out of said amount, on 4-10-2001 a sum of Rs.50,000/- was paid towards advance amount to the husband 28-03 of defendant. The balance sum of Rs.4 lakhs agreed to be paid on 23- 1-2001, a sum of Rs.7,75,000/- in the month of December,2001 and
January,2002. The above terms were put into writing through written contract of sale dt.22-10-2001.
(ii) In compliance of terms of agreement of sale, on 23—10-2001 the plaintiffs have paid a sum of Rs.4 lakhs to the defendant and it was acknowledged and issued receipt. Consequently, the defendant handed over the possession of suit lands to the plaintiffs for the purpose of development.
(iii) Subsequently, the plaintiffs discovered that defendant concealed material fact of mortgage of suit property with State Bank of
Hyderabad, Armoor Branch as security to the loan transaction of M/s
Bakram Beedi Works, Armoor seeing the paper publication issued on 3-10-1999 by the Chief Manager of SBH giving details of properties under mortgage including suit property with SBH for the above loan transaction.
(iv) The terms of contract of sale further make out that the defendant declared suit property is free from all encumbrances and also agreed to clear off any encumbrance found in future. While so, the plaintiffs went to the defendant and asked her to clear off the dues with bank and release the suit property but the defendant had been dragging matter without proper reasons. Later, plaintiffs’ own enquiry revealed that other property mortgaged with loan transaction would meet the dues of the bank without subjecting suit property for auction for recovery of loan. Then, on 1-12-2002 the plaintiffs have issued paper publication inviting objections from general public for proposed 38-03 sale transaction between the parties hereto but within the time stipulated no objections were received.
(v) When the defendant refused to come forward to execute the registered sale deed, the plaintiffs issued legal notice seeking execution of registered sale deed by receiving balance sale price. The defendant managed to re-direct notice avoiding its receipt and refused to perform her part of obligation. The plaintiffs’ learnt that defendant is trying to alienate suit property to third parties suppressing agreement, which compelled them to take present legal course.
Hence, the present suit.
II-Defendant’s pleadings:
3(i) The defendant filed written statement denying the allegations made by the plaintiffs in the plaint. The defendant admitted contract of sale between plaintiffs and him for purchase of suit lands and receipt of advance amount of Rs.50,000/- and execution of agreement of sale on 22-10-2001 and receipt of Rs.4 lakhs on 23-10-2001 but pleaded fabrication of page no.1 to 5 of agreement of sale filed with suit. The defendant is also admitted total sale price and mode of payment of sale price pleaded by plaintiffs but denied handing over of possession of suit lands to the plaintiffs for development.
(ii) The defendant pleaded that she has not concealed mortgage of suit property with banker, since she herself unaware of such mortgage made by her vendor and the Sale Deed Doc.1588/1996 under which defendant acquired title, clearly, shows declaration of her vendor that suit property is free from any encumbrance. The defendant purchased suit property, in good faith believing the words of her vendors and she 48-03 is unaware of publication of list of mortgage property by SBH bank showing suit property as one of the mortgaged property.
(iii) On being called by the plaintiff, the defendant, her husband and son went to house of Mr.I.Gopal Sharma, Advocate, Nizamabad on 21- 1-2002 and the plaintiffs and I.Gopal Sharma advocate insisted for cancellation of sale agreement in view of mortgage of suit property with bank. Till, then defendant is unaware of mortgage of suit property with SBH, Armoor Branch. Acceding to plaintiffs’ demand, the defendant agreed to cancel the sale agreement and accordingly, on 21-1-2002 both the parties mutually cancelled the sale agreement and further agreed that defendant was to repay a sum of Rs.1 lakh by 31- 1-2002 and Rs.2 lakhs by 5-2-2002 and the balance amount was to be paid on 10-2-2002.
(iv) Because of cancellation of agreement, on 31-2-2002 the defendant paid a sum of Rs.1 lakh to the plaintiffs, which was acknowledged by 1st plaintiff in the presence of I.G.Sharma, Advocate and M.A.Mannan. On 5-2-2002, the defendant sought to pay balance amount to the plaintiffs but they refused to receive
(v) The defendant denied pleadings of plaintiffs that they approached her to clear off the loan and to execute the registered sale deed and she postponed the performance of her part of obligation under contract of sale. In view of cancellation of agreement, there is no meaning in pleading satisfaction of the banker to recover loan amount through auction of other property of mortgagor excluding the suit property. The plaintiffs are not entitled to maintain the suit for specific performance in view of cancellation of agreement of sale but plaintiffs are entitled to refund of balance amount of Rs.3,50,000/- and prayed to dismiss the suit 58-03
V-ISSUES FRAMED:
4. Basing on the pleadings of both parties, this court initially framed the following issues:
i) Whether the plaintiffs received Rs. 1,00,000/- for cancellation of agreement and agreed to receive the balance of Rs.
3,50,000/- on 5-2-2002.
ii) Whether the plaintiffs are entitled for refund of only Rs.
3,50,000/- as contended by the defendant.
iii) Whether the plaintiffs are entitled for the relief of specific performance of contract.
iv) To what relief?
VI-Evidence on record:
5. The plaintiffs to support their case examined K.G.Bhagwan
Reddy (Pw-1), the first plaintiff and V.Ganga Reddy (PW-2), the witness to agreement of sale and relied upon Ex. A-1 to A-6. The defendant examined Mohd.Abdul Haleem (DW-1) her husband and
Mr.I.Gopal Sharma, advocate (Dw-2) and relied upon Ex. B1 & B2.
6. The oral testimony of PW-1 the 1st plaintiff is consistence with the pleadings. In addition to the pleadings, he deposed that on seeing the paper publication, they approached the defendant and her husband and asked them to clear off the mortgage, and refused to pay the balance sale prices, since the title of defendant was under cloud. Pw-1 further said that on 3-1-2002 a meeting was held in the house
P.Rajeshwar Reddy, Advocate, which was attended by him and
I.G.Sharma, Adv., Mr.Mannan, V.Ganga Reddy(Pw-2) and defendant’s husband ( Dw-1). In the said meeting, it was decided that defendant shall pay 1 lakh as compensation for her faulting and agreed to pay 1 lakh on 10-2-2002 to get the title cleared from Banker. Pw-1 further said that Ex.B-1 receipt was scribed by Pw-2 and attested by Dw-2 68-03 and Mr.Mannan. The plaintiffs after consulting with bankers approached the defendant with balance amount, which was not received by the defendants.
7. In the cross examination Pw-1 admitted that Ex.B-1 does not recite that 1 lakh was paid as compensation and when Ex.B-1 was executed, still the plaintiffs have to pay- balance sale price of
Rs.7,75,000/-. However, Pw-1 denied the suggestion that 1 lakh was received after cancellation of agreement of sale. Further said that pw- 2 is not his partner in any of the venture. No documents were filed to show they carried out developmental activities over the suit land and delivery of possession of suit land but claimed that out of oral understanding possession of suit lands were given to the plaintiffs.
Suit property is still under mortgage. No evidence to show enquiry made by them with banker. It was the Dw-1 held talks on behalf of the defendant for sale of suit lands. Ex.A-2 is signed by Dw-1 on behalf of the defendant along with plaintiffs.
8. PW-2 V. Ganga Reddy, the witness to transaction between plaintiffs and defendant/her husband, who spoke about the contract of sale between plaintiffs and defendant for purchase of suit lands and total sale price agreed by the parties and various payments made by the plaintiffs and defendants. He also said that possession of suit land was given to the plaintiffs and plaintiffs approaching the defendant to clear off the loan. The balance sale price was not paid due to mortgage of suit lands. The amount paid under Ex.B-1 was towards compensation for development of land and delayed registration of land. In the cross he said that pw-1 and he jointly purchased some agricultural lands. The suit land was cleared and roads were laid. He 78-03 said that pw-1 asked the Dw-1 to clear the mortgage in the house of
I.G.Sharma (Dw-2), so that they can pay balance sale price.
9. Ex.A-1 is the receipt signed by Dw-1 the husband of defendant acknowledging receipt of Rs.50,000/- from Pw-1, the 1st plaintiff towards advance sale price. It also indicates total price agreed by the parties and mode and time of payment of balance sale price, which is not in dispute.
10. Ex.A-2 is the sale agreement dt. 22-10-2001 between the defendant and plaintiffs, which also indicated total sale price and schedule of payment of balance sale price, which is consistence with
Ex.A-1. The terms of agreement shows that defendant declared that subject land is free from encumbrance and also undertook to clear in future if anything detected defecting title (condition No.2). The terms of agreement also showed that time is essence of contract (condition no.4). Page no.1 to 4 of Ex.A-2 do not contain the signature of defendant. Ex.A-3 is the receipt dt.23—10-2001 for Rs.4 lakh issued by defendant.
11. Ex.A-4 is the paper publication dt.1-12—2002 issued by the plaintiffs inviting objections from the general public over the sale agreement between plaintiffs and defendant. Ex.A-5 is the legal notice issued by the plaintiffs to the defendant stating that they approached the defendant to pay the balance sale price on 11-12-2002 but the defendant refused to receive the amount and called upon the defendant to settle loan amount with SBH, Armoor and receive the balance sale price by executing registered sale deed. Ex.A-6 is the sealed cover of notice addressed to defendant and it was returned with a endorsement of addressee was absent.
88-03
12. The contents of chief examination of DW-1 are consistence with the defendant’s pleadings. In the cross examination, he denied the suggestion that when Ex.B-2 sale deed was executed the vendor informed mortgage of land with banker but which fact is not informed to plaintiffs. The draft sale agreement was prepared at I.G.Sharma advocate (Dw-2). On 22-10-2001, the second installment due date, he went to office of I.G.Sharma and informed existence of mortgage with bank, and then settlement was arrived to cancel the agreement.
Consequently, he repaid Rs.1 lakh under Ex.B-1, wherein sale agreement was cancelled. The witness admitted that Ex. B-1 did not contain cancellation clause.
13. Dw-2 I.Gopal Sharma, advocate testified that Pw-1 and 2 do real estate business and they approached to purchase suit land and he arranged negotiation talks between parties and the agreement was reached in his presence. He drafted the Ex.A-2 agreement and defendant signed at his office. On the next day of agreement, 4 lakh was paid to defendant & her husband at his office. The plaintiffs approached him and informed about mortgage of suit land to SBH and they wanted to cancel the agreement. Then, he called Dw-1, when enquired, he expressed ignorance of mortgage. He, the plaintiffs and
Pw-1 insisted for cancellation of agreement and parties mutually agreed to cancel the agreement with terms under Ex.B-1. D-1 informed him that when they went to repay the amount, the plaintiffs refused to receive 2 lakh. In the cross he said that Ex.B-1 was prepared to his dictation. Ex.B-1 does not contains any recital of cancellation.
98-03
14. Ex.B-1 is the receipt dt. 31-1-2002 issued and signed by the Pw-
1. The recitals of the document show that Dw-1 repaid a sum of Rs. 1 lakh on the date of execution towards delay in land clearance. The dispute clearance was shouldered on vendor. They agreed to pay 2 lakh and balance of 1 lakh by 10—2-2002, which was attested by Dw- 2 and Md.Mannan. Ex.B-2 is the sale deed document no.1588/1996, under which defendant purchased suit from M/s Bakran Beedi Works,
Armoor. The sale deed contains term that the vendor declared that property conveyed free from encumbrance.
Issue No. 1:
15. There is no dispute between the plaintiffs and defendant regarding the existence of sale agreement in favour of plaintiffs for purchase of open land in Sy.No. 408 and 409 admeasuring Ac.1-17 1/3 gts. = 0.57 1/3 guntas situated at Armoor village, Nizamabad
District. The sale price agreed between the parties was Rs.
12,25,000/-. Advance sale price of Rs. 50,000/- was paid on 4-10- 2001 and such amount was paid by the first plaintiff and receipt was issued by the husband of the defendant. The terms of the agreement were reduced into writing on 22-10-2001 as in Ex. A2. It is also not in dispute that as per the terms of agreement of sale, the plaintiffs agreed to pay Rs. 4,00,000/- on 23-10-2001 and the balance amount of Rs. 7,75,000/- was agreed to pay in the month of December 2001 and January 2002. A sum of Rs. 4,00,000/- was paid on 23-10-2001.
16. According to the defendant, the plaintiffs refused to pay the balance sale consideration on finding that the suit lands were mortgaged to State Bank of Hyderabad by the vendor of the defendant, as such, both of them mutually agreed to cancel the agreement of sale between the parties and he has repaid Rs.
108-03 1,00,000/- on the date of execution of Ex. B1 receipt i.e. on 31-1- 2002 and a sum of Rs. 2,00,000/- was agreed to pay on 5-2-2002 and remaining balance was agreed to pay on 10-2-2002 and when the defendant went to pay said amount, the plaintiffs refused to receive said amount.
17. The pleadings of the plaintiffs are silent regarding the receipt of
Rs. 1,00,000/- on 31-1-2002 and execution of Ex. B1 receipt.
However, in the oral evidence, plaintiffs pleaded that they never intended to cancel the agreement, but Rs. 1,00,000/- was received for doing Pairavi to get the mortgage released from the bank on account of delay in concluding the land dealing. The oral evidence of PWs 1 & 2 shows that Ex. B1 was scribed by PW-2 at the house of Rajeswar
Reddy, Advocate, and not at the house of I. Gopal Sharma, Advocate, and Rs. 1,00,000/- was paid to get the mortgage released from the bank. The oral evidence of defendant shows that such amount was paid for cancelling the agreement for the reason that the plaintiffs expressed unwillingness to purchase the property since it was mortgaged with the bank by the vendor of the defendant.
18. The defendant examined DW-2 I. Gopal Sharma, Advocate,
before whom the parties agreed to cancel the agreement mutually and
Ex. B1 was executed after parties agreed to cancel the agreement of sale and defendant repaid Rs. 1,00,000/- out of the received amount and the balance was agreed to pay.
19. In the background of above evidence, the learned counsel for the plaintiffs has submitted that the oral testimony of DW-2 that Ex.
B1 scribed to his dictation and that the parties agreed mutually to cancel the agreement cannot be believed without seeing the contents 118-03 of the documents and a person like DW-2 having 20 years of practice would not prepare cancellation deed as in Ex. B1, more so, when he admitted that the recitals of Ex.B-1 do not contain the cancellation of the agreement of sale.
20. The learned counsel for plaintiffs also contended that when the agreement was executed by both the plaintiffs, the cancellation must also be done by both plaintiffs but not one of them. Admittedly, Ex.
B1 was signed by the first plaintiff only, as such, the alleged claim of defendant that the cancellation of agreement was done cannot be accepted.
21. Conversely, the learned counsel for defendant has contended that the testimony of DW-2 clearly shows that agreement was cancelled due to discovery of mortgage of the suit land in favour of
State Bank of Hyderabad, since the plaintiffs were unwilling to purchase the property. Accordingly, Ex. B1 was executed by repaying
Rs.1,00,000/- and agreeing to pay on 5-2-2002 and 10-2-2002 and the defendant tried to pay said amount but plaintiffs have not accepted.
22. The learned counsel for the defendant also contended that the oral evidence of PWs 1 & 2 shows their evidence is inconsistence regarding the purpose for which Rs. 1,00,000/- was paid. One time they say that the amount was paid for doing Pairavi and on other occasion, they plead that the amount was paid for development of land and settlement of disputes. Such contention cannot be accepted for the reason that PW-1 himself admitted that even after paying Rs.
4,50,000/-, the plaintiffs are still required to pay Rs. 7,75,000/- and if really, they were intended to be paid to do the development and 128-03 settlement of issues, the plaintiffs ought to have utilized the balance sale price with them so as to settle the issues.
23. The learned counsel for defendant lastly contended that the plaintiffs have not filed any re-joinder to the claim made by the defendant that the agreement was cancelled. In the absence of non- pleading either in the plaint or in the form of rejoinder, the plaintiffs are estopped from leading any evidence contrary to Ex. B1.
24. In order to decide the dispute on this issue, Ex. B1 itself is sufficient to clear the bone of contentions between the parties. Ex. B1 is the receipt which was executed on 31-1-2002. The recitals of the document reflect that DW-1 repaid Rs.1,00,000/- on the date of execution of Ex.B-1 for dealing the land clearance. Further, the clearance of dispute was shouldered on the vendors and further executant agreed to repay Rs. 2,00,000/- without giving exact date of repayment and balance amount of Rs. 1,00,000/- by 10-2-2002. The document was attested by DW-2 and one Mohd. Mannan and out of two plaintiffs, 1stplaintiff (Pw-1) alone was signatory.
25. Admittedly, Ex. A2 agreement of sale shows that there are two vendees who are plaintiffs before this Court and Ex. A1 receipt for payment of amount of Rs. 50,000/- issued by PW-1 alone. The contention of learned counsel for plaintiffs that Ex.B1 ought to have signed by both the plaintiffs cannot be accepted for the reason that the execution of Ex. A1 indicates that it was PW-1 who was actively participating in the sale transaction with DW-1 and 2nd plaintiff as well as the defendant, a dormant vendee and vendor respectively. Further 2nd plaintiff had not came into witness box to ventilate any grievance.
138-03
26. Undisputedly, the defendant received Rs. 4,50,000/-. Rs.
50,000/- was received on 4-10-2001 and Rs. 4,00,000/-on 23-10- 2001. Ex. B1 speaks about receipt of Rs. 4,00,000/- only and Ex. B1 is silent regarding the repayment of Rs. 50,000/-. The important recitals in the document (Ex.B-1) shows that the defendant’s husband repaid Rs. 1,00,000/- and further agreed to repay remaining Rs.
3,00,000/- in future dates. Still the burden was shouldered on the vendor to clear the land dispute. These recitals indicate that the parties still wanted to keep the agreement alive. At the same time, the plaintiffs expressed their unwillingness to purchase the land due discovery of mortgage of suit lands. What can be inferred from such recitals is that the plaintiffs wanted to take back only Rs.4,00,000/- which was paid on 23-10-2001. The parties intended to keep alive the agreement of sale of the property keeping the original advance sale price of Rs. 50,000/- with the defendant. The contention of the defendant that the parties intended to put an end to the contract under Ex. B1 cannot be accepted for the reason given herein above.
27. In addition to that the defendant claimed that Ex. B1 was scribed to the dictation of DW-2, the advocate. On glancing of Ex. B1 recitals, one can easily form an opinion that such document was not drafted by a person holding the legal knowledge like DW-2. The oral testimony of DW-2 shows that there is no recital in the Ex. B1 showing the cancellation of the agreement. There is some force in the contention of the learned counsel for the plaintiffs that Ex. B1 was not scribed to the dictation of DW-2 for the reason given above.
148-03
28. As per Sec. 91 of Indian Evidence Act, when the terms of contract are reduced into writing, no evidence can be let in contrary to the terms recorded. Ex. B1 clearly goes to show that what was intended by the parties and terms were reduced into writing under Ex.
B1. When the Ex. B1 specifically put the burden on the vendor to clear off the dispute, which indicates that the parties never intended to end the contract but wanted to keep alive with the original advance of sale price i.e. Rs.50,000/- paid by the plaintiffs. In that view of the matter, the defendant cannot supplant terms under Ex. B1 with oral evidence in view of prohibition under Sec. 91 of Indian Evidence Act.
Accordingly, I hold that Ex. B1 was not canceling the agreement and the recitals therein indicate and prove that the agreement still alive between the parties. Accordingly, this issue is answered in favour of plaintiffs.
Issues No. 2 & 3:
29. The defendant has purchased the suit property from M/s Bakran
Beedi Works, Armoor, under sale deed document No. 1588/1996 and same property was agreed to sell to plaintiffs. As per Ex. A2 agreement of sale, the plaintiffs were required to pay balance sale price of Rs.7,75,000/- in the month of December 2001 and January 2002.
30. The pleadings and plaintiffs’ oral testimony shows that before the due date for balance sale price, they noticed a paper publication issued by the Chief Manager of State Bank of Hyderabad, Amoor branch, showing that the suit properties were mortgaged with the bank in the loan transaction of M/s Bakran Beedi Works, Armoor, as such, they went to the defendant and requested to clear off mortgage, 158-03 so that they can pay the balance price. In view of the existence of mortgage, they did not pay the balance sale price agreed to pay in the month of December 2001 and January 2002.
31. Subsequently, on verification with the bank officials, they were told that the other properties mortgaged by the Bakran Beedi Works for loan transaction were sufficient enough to realise the debt due by
Bakran Beedi Works to the State Bank of Hyderabad. On such clarification, they went to the defendant and requested to receive balance price which was rejected by the defendant. Hence, they issued a paper publication on 1-12-2002 inviting objections from general public for the proposed transaction and also issued a lawyer’s notice
dated 12-12-2002 calling upon the defendant to come forward for
execution of registered sale deed. The plaintiffs claimed that the defendant has suppressed the prior mortgage with the State Bank of
Hyderabad and entered into present transaction.
32. The defendant pleadings and the oral testimony shows that they are unaware of mortgaging of suit properties by M/s Bakran Beedi
Works, Armoor, the vendor of the defendant, for loan transaction to the State Bank of Hyderabad, Armoor. The clause under Ex. B1 sale deed clearly shows that the properties transferred were free from mortgage which indicate that the defendant’s vendor suppressed the mortgage of suit properties to the State Bank of Hyderabad. When the agreement was executed in favour of plaintiffs, the defendant was unaware of the mortgage of the suit land and they came to know only when the plaintiffs informed them about the mortgage on seeing the paper publication issued by the Chief Manager, State Bank of
Hyderabad dt. 3-10-1999. In this regard, a meeting was held in the office of I. Gopal Sharma, DW-2, wherein both the parties mutually 168-03 agreed to put to end the sale transaction in view of the mortgage of the properties to the State Bank of Hyderabad.
33. In the background of the above pleadings and testimony of both the parties, the question is whether the plaintiffs are ready and willing to perform their part of obligation so as to order for specific performance of the agreement of sale between the parties. Before deciding the issue, it is helpful to have a glance at the ratio laid down by the Hon’ble Supreme Court in 10) In N.P. Thirugnanam vs. Dr. R.
Jagan Mohan Rao & Ors., (1995) 5 SCC 115 at para 5, it was held:
".....Section 16(c) of the Act envisages that plaintiff must plead and prove that he had 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 those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract."
34. On perusal of the judgment of the Hon’ble Supreme Court, the readiness indicates the financial capacity of the party and willingness indicates the conduct of the party who seeks enforcement of contract of sale. The readiness and willingness must be continuous and the
Court must see the plaintiff’s readiness and willingness not only on the 178-03 date of entering into the agreement of sale but also after filing of the suit proceedings.
35. Keeping the above requirements, in order to order for specific performance let me examine the testimony of both the parties. The undisputed testimony of plaintiffs’ shows that the plaintiffs were required to pay Rs. 7,75,000/- in the month of December 2001 and
January 2002 and they claim that on noticing the paper publication
dated 3-10-1999 issued by Chief Manager, State Bank of Hyderabad
wherein the suit schedule properties were claimed to have been mortgaged to the Bank for the loan transaction by M/s Bakran Beedi
Works, Armoor. As such, they have not paid the balance and insisted the defendant to clear off the loan.
36. Ex. B1 shows that plaintiffs in fact intended to take back Rs.
4,00,000/- which was paid earlier as an earnest money to the defendant and he has received Rs. 1,00,000/- and the balance was agreed to repay by the defendant by the end of 10-2-2002. Ex. B1 categorically states that the condition No. 2 of the agreement of sale under Ex. A2 as well as the recitals under Ex. B1 clearly goes to show that in the event of any detection of encumbrance or legal disputes, the burden was shouldered on vendors to settle such legal disputes and Ex. B1 also show that they agreed to pay Rs. 2,00,000/- and balance of Rs. 1,00,000/- by 10-2-2002.
37. As seen from Ex. B2 sale deed under which the defendant purchased the property, there is a clause showing that the property under sale was free from encumbrance. These facts indicate that the defendant was also unaware of prior mortgage by her vendor in favour of State Bank of Hyderabad. Oral evidence of PW-1 shows that such mortgage is still in existence and the claim made by PW-1 shows that 188-03
Rs. 1,00,000/- received under Ex. B1 for doing Pairavi cannot be accepted for the reason that the burden to clear off the loan was shouldered on the defendant hence the question of plaintiffs’ taking said task does not arise.
38. The other contention of the learned counsel for the plaintiffs is that the amount was taken for development of the land. Admittedly, the defendant was not in concerned with the development of the land and further there are no recitals under Ex. A2 showing the delivery of possession to the plaintiffs but their claim that possession was delivered out of the oral understanding which cannot be accepted in view of Sec. 91 of Indian Evidence Act.
39. The conduct of the plaintiffs in agreeing to take back of Rs.
4,00,000/- paid to the defendant indicate that they wanted not to proceed with the transaction. Till December 2002 nothing has been brought on record showing his readiness and willingness to perform his part of obligation. This indicates that there is lack of continuous readiness and willingness on the part of plaintiffs to discharge their obligation under agreement of sale which is essentially required for ordering specific performance.
40. Further, plaintiffs have not placed any evidence or examined any bank officials to substantiate their claim that the other properties mortgaged by M/s Bakran Beedi Works, Armoor along with suit properties were sufficient enough to realise the loan amount due by it to the State Bank of Hyderabad. Admittedly, mortgage was not done by the defendant and such mortgage was done by her vendor. The defendant’s vendor suppressing such mortgage sold to suit property to her and the said mortgage is still in existence as on today. Further, clearing off loan is not in the hands of defendant. Apart from the suit 198-03 property there are other properties mortgaged. In view of those circumstances, asking the defendant to execute the sale transaction in favour of plaintiffs defeats the legitimate interest of the bank and also invites further trouble to the bank as well as defendant.
41. Apart from that, plaintiffs have suppressed the factum of execution of Ex. B1 document and receipt of Rs. 1,00,000/-. In Lourdu
Mari David and Ors. vs. Louis Chinnaya Arogiaswamy and Ors.( (1996) 5 SCC 589) the apex court observed:
"2. It is settled law that the party who seeks to avail of the equitable jurisdiction of a court and specific performance being equitable relief, must come to the court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief."
In the light of said ratio, one who comes to the Court seeking equitable relief of specific performance must come to the court with clean hands. The plaintiffs have suppressed Ex. B1 for the reason that they wanted to hide their unwillingness to proceed with the transaction which was manifested through the execution of Ex. B1. For the reason of plaintiffs’ lack of continuous willingness to discharge their part of obligation under contract and suppression certain facts which would manifest their unwillingness and also in view of existence of mortgage in favour of the Bank, it is undesirable to order for specific performance in favour of plaintiffs. Accordingly, issue No. 3 is answered in favour of defendant.
42. Coming to the payment of earnest money received by the defendant, the defendant still has to pay Rs. 3,50,000/-. Sec. 22 of
Specific Relief Act says that the parties in addition to praying relief of specific performance may also ask any other relief which they are entitled including the refund of earnest money or deposit made by him. Sub-section 2 of same section lays down that, no such relief 208-03 shall be granted by the court unless it has been specifically claimed.
On examining the relief claimed by the plaintiffs, they did not seek alternative relief for refund of earnest money in the event of refusal of specific performance and any efforts were made to get the pleadings amended so that this Court can order for payment of earnest money or deposit withheld by the defendant. In view of above provisions this
Court cannot order refund of earnest money in the absence of any relief from the plaintiffs. However, this court hope that the defendant is under obligation to give back the sale price to the plaintiffs and expect to return the advance received by her. Accordingly, issue No.
2 is answered against the plaintiffs.
43. In the result, suit is dismissed with costs.
Dictated to P.A., transcribed by him, corrected and pronounced by me
in open court on this the 18 th day of January, 2012.
I Addl. District Judge, Nizamabad.
APPENDIX OF EVIDNECE
Witnesses Examined For Plaintiff For Defendant PW1 K.G. Bhagwan Reddy DW1 Md. Abdul Haleem PW2 V. Ganga Reddy DW2 I. Gopal Sharma
Exhibits marked Ex.Al: Receipt of Rs. 50,000/-
dt. 4-10-2001
Ex.A2: Agreement of sale Ex. B1 Receipt dt. 31-1-2002 for
dt. 22-10-2001 Rs. 1,00,000/-
Ex.A3: Paper publication in Deccan Ex. B2 C.C. of sale deed No. Chronicle 1588/1996 dt. 30-10-1996 Ex.A4: Office copy of legal notice
dt. 12-12-2002
Ex.A5: Postal receipt Ex.A6: Returned envelop
I Addl. District Judge, Nizamabad 218-03 228-03
DECREE
IN THE COURT OF THE I ADDITIONAL DISTRICT JUDGE AT
NIZAMABAD
Wednesday this the 18th day of January, 2012.
D/I: 25-3-2003
Present: Sri M. LAXMAN, B.Sc., LL.M, I Addl. District Judge, Nizamabad
O.S. No. 8 of 2003
Between:
1. K. G. Bhagwan Reddy S/o K. Ram Reddy, aged 32 years, Occ: Business R/o. H.No. 3-1-39/1, Teachers’ colony, Armoor, Dist., Nizamabad.
2. L. Sudhakar S/o Poshetty, aged 39 years, occ: Business R/o. H.No. 3-1-1/1/8, Mahalaxmi road, Armoor, Dist., Nizamabad. …Plaintiffs
And
Smt. Noorjahan Begum W/o M.A. Haleem, aged 60 years, Occ: Household, R/o H.No. 9-11-40/A, Ahmedpura colony, Nizamabad.
.. Defendant
Claim : Suit for specific performance of contract of sale dt.22-10-2001 by receiving balance sale price and to restrain the defendants from alienating the suit schedule property pending suit.
Valuation & Court Suit is valued Rs.12,25,000/- for relief of specific Performance on which court fee of Rs.14,726/- is fee: paid u/s 39 (A) of APCF & SV Act.
Cause of action: Cause of action arose on 4-10-2001 and finally on 12-12-2002.
This Original Suit coming on 1-12-2011 for final hearing before me in the presence of M/s M. Ganga Reddy & T. Vinod Kumar, Advocates for plaintiffs, and Sri A. Sangameshwar Rao, Advocate for defendant and having stood over for consideration till this day, the court doth order & decree as follows:
That the suit of the plaintiff be and the same is hereby dismissed with costs.
The Court further orders that the plaintiffs do pay a sum of Rs.1,22,554/- to the defendant towards the costs of the suit.
238-03
Particulars of the costs
For plaintiff For defendant (Cost memo filed) (Cost Memo filed)
Stamp on plaint Rs. 14,726-00 Stamp on Power Rs. 2-00 Stamp on Power Rs. 2-00 Advocate fee Rs. 1,22,500-00 Stamp on exhibits Rs. 6-00 Stamp on exhibits Rs. 2-00 Advocate fee Rs.15,000-00 Process fee Rs. 100-00 Misc. charges Rs 50-00 Misc. charges Rs 50-00
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Total: Rs. 29,884-00 Rs.1,22,554-00
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Given under my hand and seal of the court on this the 18th day of January, 2012.
I Addl. Dist. Judge, Nizamabad.