� REPORTABLE�
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2420 OF 2018
R LAKSHMIKANTHAM Appellant(s)
VERSUS
DEVARAJI Respondent(s)
J U D G M E N T
R. F. NARIMAN, J.
In the present appeal, despite service of notice,
nobody appears for the respondent. We have heard Dr. (Ms.)
Pooja Jha, learned counsel appearing for the appellant.
The High Court, in the present appeal, has, by the
impugned judgment dated 03.02.2017, set aside the concurrent
judgments of the Courts below, and allowed the appeal of the
erstwhile defendant, who is the respondent before us, and
hence, set aside the decree for specific performance that
was passed in the plaintiff�s favour.
By an agreement to sell dated 22.09.2002, the suit-
property was to be sold for a sum of Rs.3,65,000/-. Certain
clauses of the agreement are important and are set out
hereinbelow:
�1. The sale price of the property mentioned in the
schedule hereunder shall be Rs.3,65,000/-(Rupees
Three Lakhs and Sixty Five Thousand only).
1
CIVIL APPEAL NO. 2420 OF 2018
2. The party of the second part has paid a sum of
Rs.5,000/-(Rupees Five Thousand only) towards
advance by cash and the party of the first part
hereby admit and acknowledge the receipt of the
same.
3. The balance sale consideration shall be paid by
the party of the second part to the party of the
first part within three months from today. The
party of the first part agrees to execute sale
deed on the day on which the balance sale
consideration is paid.
4. The party of the second part agrees to pay part of
the sale consideration of Rs.60,000/-(Rupees Sixty
Thousand only) to the party of the first on or
before 10 th
day of October.
5. The party of the first part had handed over the
original title documents to the mortgagee and the
party of the second part shall settle the loan,
receive the documents from the mortgagee and keep
the same in his custody.
��������������������������������
�������������������������������.
8. If there is no encumbrance to the schedule
property and when the party of the second part is
willing to pay the balance sale consideration, the
party of the first shall execute sale deed in
favour of the party of the second part or her
nominee. If the party of the first part refuses
to do so, the party of the second part is entitled
to take legal action.�
It is stated that at the time of the sale agreement,
the suit property was worth roughly a sum of Rs.6 lakhs, but
the parties finally agreed and the defendant, in particular,
agreed to sell the aforesaid property for Rs.3.65 lakhs. A
perusal of the agreement to sell would show that though
clause 3 requires that the balance sale consideration will
be paid within three months from the date of the agreement
2
CIVIL APPEAL NO. 2420 OF 2018
and that the seller will execute the sale deed on the date
on which balance sale consideration was paid yet, clauses 5
and 8 clearly show that the original title deeds which are
with the mortgagee had yet to be handed over and the
mortgage had yet to be redeemed. It is only when this is
done that clause 3 would kick in, showing that the time of
three months is obviously not of essence.
Soon after the agreement, the plaintiff sent a
registered letter dated 18.12.2002 to the present address of
the defendant reminding the defendant that Rs.5000/- had
been received on the date of signing the agreement and
Rs.60,000/- had been received on 14.10.2002. Despite this,
the original title documents were not obtained from the
mortgagee and hence the mortgage could not be discharged.
The letter then goes on to state that repeated calls were
made and that the plaintiff is ready with the balance money,
and that the defendant should come forward immediately to
discharge the mortgage, get all documents from the
mortgagee, and register the sale deed. This registered A.D.
letter was returned to the sender stating that the addressee
did not receive the same for the past one week. The same
was the fate of another legal notice on the very next date,
i.e., 19.12.2002. Finally, on 07.07.2003, the plaintiff
sent a legal notice referring to the earlier legal notice of
19.12.2002 and called upon the defendant to immediately
comply with the terms of the agreement. To this notice,
3
CIVIL APPEAL NO. 2420 OF 2018
which was admittedly received by the defendant at the very
same address, no reply was given. Thereafter, the present
suit for specific performance was filed by the plaintiff in
February, 2005.
Given these facts, the trial Court, by its judgment
dated 12.09.2008, held that the suit agreement was proved
and that three notices sent by the plaintiff were also
proved, it being clear that the defendant was attempting to
wriggle out of his obligations under the agreement. Though
the suit was filed belatedly, the trial Court felt that as
the defendant did not furnish the address of his mortgagee
or take steps to clear the mortgage, it was clear that the
defendant was attempting to wriggle out of the agreement.
Further, the plaintiff�s readiness and willingness was
proved by the fact that he has necessary funds as on the
date of the agreement, and thereafter, as was stated by him
in his letter dated 18.12.2002. This being the case, the
Court ordered specific performance as the balance sale
consideration had already been deposited into the Court on
the date of the filing of the Suit. The first appeal from
the aforesaid judgment was dismissed on 20.12.2010 by the
Principal District Judge. The District Judge found
concurrently for the plaintiff on all the points argued and
hence dismissed the first appeal.
By the impugned judgment, the High Court reversed the
concurrent judgments and held, on a construction of the
4
CIVIL APPEAL NO. 2420 OF 2018
agreement, that since only three months were given to
complete the sale transaction, time was of essence. It also
went on to hold that the two letters dated 18.12.2002 and
19.12.2002 could not have been said to have been served on
the defendant and hence were not proved. The High court
recorded the defendant�s advocate�s statement that it was
not going into other aspects except that plaintiff was not
ready and willing throughout to perform the sale agreement.
Despite this, the High Court held that since the Suit itself
was filed belatedly, it would not be enough for the
plaintiff to show that he had the necessary funds. It would
also have been necessary for him to show that he was
otherwise ready and willing throughout, which cannot be said
to be correct considering that there was a long time gap
between 22.09.2002 and 07.07.2003 inasmuch as the
intermediate letters/notices were not proved. The High
Court also further stated that the property value was Rs.10
lakhs on the date of the sale agreement, though this was not
proved by the defendant, and then went on to state that
since readiness and willingness had to be held against the
Plaintiff, and since the Suit itself was belated, specific
performance cannot be granted on the facts of this case and,
as stated earlier, reversed the concurrent findings of the
Courts below.
We have heard learned counsel for the appellant.
The High Court has, in the second appeal, obviously
5
CIVIL APPEAL NO. 2420 OF 2018
gone wrong on a number of counts. First, to hold that time
was of essence in the agreement, is wholly incorrect.
Clause 3 has to be read along with clauses 5 and 8, which
clearly show that in the nature of reciprocal promises, the
promise made by the seller in clause 5 has to be performed
first, viz., that the title documents have to be obtained
from the mortgagee after the mortgage is cleared. It is
only then that the consideration above Rs.70,000/-, being
the balance consideration for the sale, has to be paid.
Secondly, the High court is wholly incorrect in stating that
the two letters of 18.12.2002 and 19.12.2002 cannot be said
to have been proved. Both the letters were registered
A.D. letters sent to the very address of the defendant,
which the defendant states is the address on which it
received the legal notice dated 07.07.2003. Further, the
moment the registered letter once sent is returned with the
remarks mentioned hereinabove, it shall be deemed to have
been served on the defendant on the address so stated,
unless the contrary is proved. The defendant did not come
forward with anything to show that this was not the proper
address. In fact, that this is the proper address is shown
by the fact that he acknowledged the receipt of the legal
notice dated 07.07.2003 on this very address.
The High Court order is not correct in stating that
readiness and willingness cannot be inferred because the
letters dated 18.12.2002 and 19.12.2002 had not been sent to
6
CIVIL APPEAL NO. 2420 OF 2018
the defendant. The High Court also erred in holding that
despite having the necessary funds, the plaintiff could not
be said to be ready and willing. In the aforesaid
circumstances, the High Court was also incorrect in putting
a short delay in filing the Suit against the plaintiff to
state that he was not ready and willing. In India, it is
well settled that the rule of equity that exists in England,
does not apply, and so long as a Suit for specific
performance is filed within the period of limitation, delay
cannot be put against the plaintiff � See Mademsetty
Satyanarayana v. G. Yelloji Rao and others AIR 1965 Supreme
Court 1405 (paragraph 7) which reads as under:
�(7) Mr. Lakshmaiah cited a long catena of
English decisoins to define the scope of a Court�s
discretion. Before referring to them, it is
necessary to know the fundamental differnece between
the two systems-English and Indian-qua the relief of
specific performance. In England the relief of
specific performance pertains to the domain of
equity; in India, to that of statutory law. In
England there is no period of limitation for
instituting a suit for the said relief and,
therefore, mere delay � the time lag depending upon
circumstances � may itself be sufficient to refuse
the relief; but, in India mere delay cannot be a
ground for refusing the said relief, for the statute
prescribes the period of limitation. If the suit is
in time, delay is sanctioned by law; if it is beyond
time, the suit will be dismissed as barred by time;
in either case, no question of equity arises.�
The High Court also went into error in stating that
the value of the property was Rs.10 lakhs at the time of the
sale agreement. PW-1 in his cross examination admitted that
it was Rs.10 lakhs on the date when PW1 was cross-examined.
7
CIVIL APPEAL NO. 2420 OF 2018
The value of the property on the date of the sale agreement
was only Rs.6 lakhs, and it was open for the parties to
negotiate the said price upwards or downwards, which was
what the parties did in the facts of the present case.
Nothing can, therefore, be derived from the erroneous
assumption that a valuable property had been sold at a
throwaway price.
For all these reasons, therefore, we allow the appeal
and set aside the judgment of the High Court and restore
that of the Courts below.
�����������������������., J.
[ R. F. NARIMAN ]
�����������������������., J.
[ SURYA KANT ]
New Delhi;
July 10, 2019.
8
CIVIL APPEAL NO. 2420 OF 2018
ITEM NO.3 COURT NO.5 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No. 2420/2018
R LAKSHMIKANTHAM Appellant(s)
VERSUS
DEVARAJI Respondent(s)
(With IA No.33080/2018-APPLICATION FOR EARLY HEARING)
Date : 10-07-2019 This matter was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN
HON'BLE MR. JUSTICE SURYA KANT
For Appellant(s)
Dr. Pooja Jha, Adv.
Dr. R. Prakash, Adv.
Ms. Nandita Jha, Adv.
Mr. Vishwa Pal Singh, AOR
For Respondent(s)
UPON hearing the counsel the Court made the following
O R D E R
The appeal is allowed in terms of the signed
reportable judgment.
Pending application stands disposed of.
(NIDHI AHUJA) (RENU DIWAN)
COURT MASTER (SH) ASSISTANT REGISTRAR
[Signed reportable judgment is placed on the file.]
9
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2420 OF 2018
R LAKSHMIKANTHAM Appellant(s)
VERSUS
DEVARAJI Respondent(s)
J U D G M E N T
R. F. NARIMAN, J.
In the present appeal, despite service of notice,
nobody appears for the respondent. We have heard Dr. (Ms.)
Pooja Jha, learned counsel appearing for the appellant.
The High Court, in the present appeal, has, by the
impugned judgment dated 03.02.2017, set aside the concurrent
judgments of the Courts below, and allowed the appeal of the
erstwhile defendant, who is the respondent before us, and
hence, set aside the decree for specific performance that
was passed in the plaintiff�s favour.
By an agreement to sell dated 22.09.2002, the suit-
property was to be sold for a sum of Rs.3,65,000/-. Certain
clauses of the agreement are important and are set out
hereinbelow:
�1. The sale price of the property mentioned in the
schedule hereunder shall be Rs.3,65,000/-(Rupees
Three Lakhs and Sixty Five Thousand only).
1
CIVIL APPEAL NO. 2420 OF 2018
2. The party of the second part has paid a sum of
Rs.5,000/-(Rupees Five Thousand only) towards
advance by cash and the party of the first part
hereby admit and acknowledge the receipt of the
same.
3. The balance sale consideration shall be paid by
the party of the second part to the party of the
first part within three months from today. The
party of the first part agrees to execute sale
deed on the day on which the balance sale
consideration is paid.
4. The party of the second part agrees to pay part of
the sale consideration of Rs.60,000/-(Rupees Sixty
Thousand only) to the party of the first on or
before 10 th
day of October.
5. The party of the first part had handed over the
original title documents to the mortgagee and the
party of the second part shall settle the loan,
receive the documents from the mortgagee and keep
the same in his custody.
��������������������������������
�������������������������������.
8. If there is no encumbrance to the schedule
property and when the party of the second part is
willing to pay the balance sale consideration, the
party of the first shall execute sale deed in
favour of the party of the second part or her
nominee. If the party of the first part refuses
to do so, the party of the second part is entitled
to take legal action.�
It is stated that at the time of the sale agreement,
the suit property was worth roughly a sum of Rs.6 lakhs, but
the parties finally agreed and the defendant, in particular,
agreed to sell the aforesaid property for Rs.3.65 lakhs. A
perusal of the agreement to sell would show that though
clause 3 requires that the balance sale consideration will
be paid within three months from the date of the agreement
2
CIVIL APPEAL NO. 2420 OF 2018
and that the seller will execute the sale deed on the date
on which balance sale consideration was paid yet, clauses 5
and 8 clearly show that the original title deeds which are
with the mortgagee had yet to be handed over and the
mortgage had yet to be redeemed. It is only when this is
done that clause 3 would kick in, showing that the time of
three months is obviously not of essence.
Soon after the agreement, the plaintiff sent a
registered letter dated 18.12.2002 to the present address of
the defendant reminding the defendant that Rs.5000/- had
been received on the date of signing the agreement and
Rs.60,000/- had been received on 14.10.2002. Despite this,
the original title documents were not obtained from the
mortgagee and hence the mortgage could not be discharged.
The letter then goes on to state that repeated calls were
made and that the plaintiff is ready with the balance money,
and that the defendant should come forward immediately to
discharge the mortgage, get all documents from the
mortgagee, and register the sale deed. This registered A.D.
letter was returned to the sender stating that the addressee
did not receive the same for the past one week. The same
was the fate of another legal notice on the very next date,
i.e., 19.12.2002. Finally, on 07.07.2003, the plaintiff
sent a legal notice referring to the earlier legal notice of
19.12.2002 and called upon the defendant to immediately
comply with the terms of the agreement. To this notice,
3
CIVIL APPEAL NO. 2420 OF 2018
which was admittedly received by the defendant at the very
same address, no reply was given. Thereafter, the present
suit for specific performance was filed by the plaintiff in
February, 2005.
Given these facts, the trial Court, by its judgment
dated 12.09.2008, held that the suit agreement was proved
and that three notices sent by the plaintiff were also
proved, it being clear that the defendant was attempting to
wriggle out of his obligations under the agreement. Though
the suit was filed belatedly, the trial Court felt that as
the defendant did not furnish the address of his mortgagee
or take steps to clear the mortgage, it was clear that the
defendant was attempting to wriggle out of the agreement.
Further, the plaintiff�s readiness and willingness was
proved by the fact that he has necessary funds as on the
date of the agreement, and thereafter, as was stated by him
in his letter dated 18.12.2002. This being the case, the
Court ordered specific performance as the balance sale
consideration had already been deposited into the Court on
the date of the filing of the Suit. The first appeal from
the aforesaid judgment was dismissed on 20.12.2010 by the
Principal District Judge. The District Judge found
concurrently for the plaintiff on all the points argued and
hence dismissed the first appeal.
By the impugned judgment, the High Court reversed the
concurrent judgments and held, on a construction of the
4
CIVIL APPEAL NO. 2420 OF 2018
agreement, that since only three months were given to
complete the sale transaction, time was of essence. It also
went on to hold that the two letters dated 18.12.2002 and
19.12.2002 could not have been said to have been served on
the defendant and hence were not proved. The High court
recorded the defendant�s advocate�s statement that it was
not going into other aspects except that plaintiff was not
ready and willing throughout to perform the sale agreement.
Despite this, the High Court held that since the Suit itself
was filed belatedly, it would not be enough for the
plaintiff to show that he had the necessary funds. It would
also have been necessary for him to show that he was
otherwise ready and willing throughout, which cannot be said
to be correct considering that there was a long time gap
between 22.09.2002 and 07.07.2003 inasmuch as the
intermediate letters/notices were not proved. The High
Court also further stated that the property value was Rs.10
lakhs on the date of the sale agreement, though this was not
proved by the defendant, and then went on to state that
since readiness and willingness had to be held against the
Plaintiff, and since the Suit itself was belated, specific
performance cannot be granted on the facts of this case and,
as stated earlier, reversed the concurrent findings of the
Courts below.
We have heard learned counsel for the appellant.
The High Court has, in the second appeal, obviously
5
CIVIL APPEAL NO. 2420 OF 2018
gone wrong on a number of counts. First, to hold that time
was of essence in the agreement, is wholly incorrect.
Clause 3 has to be read along with clauses 5 and 8, which
clearly show that in the nature of reciprocal promises, the
promise made by the seller in clause 5 has to be performed
first, viz., that the title documents have to be obtained
from the mortgagee after the mortgage is cleared. It is
only then that the consideration above Rs.70,000/-, being
the balance consideration for the sale, has to be paid.
Secondly, the High court is wholly incorrect in stating that
the two letters of 18.12.2002 and 19.12.2002 cannot be said
to have been proved. Both the letters were registered
A.D. letters sent to the very address of the defendant,
which the defendant states is the address on which it
received the legal notice dated 07.07.2003. Further, the
moment the registered letter once sent is returned with the
remarks mentioned hereinabove, it shall be deemed to have
been served on the defendant on the address so stated,
unless the contrary is proved. The defendant did not come
forward with anything to show that this was not the proper
address. In fact, that this is the proper address is shown
by the fact that he acknowledged the receipt of the legal
notice dated 07.07.2003 on this very address.
The High Court order is not correct in stating that
readiness and willingness cannot be inferred because the
letters dated 18.12.2002 and 19.12.2002 had not been sent to
6
CIVIL APPEAL NO. 2420 OF 2018
the defendant. The High Court also erred in holding that
despite having the necessary funds, the plaintiff could not
be said to be ready and willing. In the aforesaid
circumstances, the High Court was also incorrect in putting
a short delay in filing the Suit against the plaintiff to
state that he was not ready and willing. In India, it is
well settled that the rule of equity that exists in England,
does not apply, and so long as a Suit for specific
performance is filed within the period of limitation, delay
cannot be put against the plaintiff � See Mademsetty
Satyanarayana v. G. Yelloji Rao and others AIR 1965 Supreme
Court 1405 (paragraph 7) which reads as under:
�(7) Mr. Lakshmaiah cited a long catena of
English decisoins to define the scope of a Court�s
discretion. Before referring to them, it is
necessary to know the fundamental differnece between
the two systems-English and Indian-qua the relief of
specific performance. In England the relief of
specific performance pertains to the domain of
equity; in India, to that of statutory law. In
England there is no period of limitation for
instituting a suit for the said relief and,
therefore, mere delay � the time lag depending upon
circumstances � may itself be sufficient to refuse
the relief; but, in India mere delay cannot be a
ground for refusing the said relief, for the statute
prescribes the period of limitation. If the suit is
in time, delay is sanctioned by law; if it is beyond
time, the suit will be dismissed as barred by time;
in either case, no question of equity arises.�
The High Court also went into error in stating that
the value of the property was Rs.10 lakhs at the time of the
sale agreement. PW-1 in his cross examination admitted that
it was Rs.10 lakhs on the date when PW1 was cross-examined.
7
CIVIL APPEAL NO. 2420 OF 2018
The value of the property on the date of the sale agreement
was only Rs.6 lakhs, and it was open for the parties to
negotiate the said price upwards or downwards, which was
what the parties did in the facts of the present case.
Nothing can, therefore, be derived from the erroneous
assumption that a valuable property had been sold at a
throwaway price.
For all these reasons, therefore, we allow the appeal
and set aside the judgment of the High Court and restore
that of the Courts below.
�����������������������., J.
[ R. F. NARIMAN ]
�����������������������., J.
[ SURYA KANT ]
New Delhi;
July 10, 2019.
8
CIVIL APPEAL NO. 2420 OF 2018
ITEM NO.3 COURT NO.5 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No. 2420/2018
R LAKSHMIKANTHAM Appellant(s)
VERSUS
DEVARAJI Respondent(s)
(With IA No.33080/2018-APPLICATION FOR EARLY HEARING)
Date : 10-07-2019 This matter was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN
HON'BLE MR. JUSTICE SURYA KANT
For Appellant(s)
Dr. Pooja Jha, Adv.
Dr. R. Prakash, Adv.
Ms. Nandita Jha, Adv.
Mr. Vishwa Pal Singh, AOR
For Respondent(s)
UPON hearing the counsel the Court made the following
O R D E R
The appeal is allowed in terms of the signed
reportable judgment.
Pending application stands disposed of.
(NIDHI AHUJA) (RENU DIWAN)
COURT MASTER (SH) ASSISTANT REGISTRAR
[Signed reportable judgment is placed on the file.]
9
