Appreciation of Evidence - in a suit for specific performance - while finding the capacity of plaintiff to pay the balance amount - his statment that he got gold and also purchased other properties too is enough in the absence of serious dispute about the existence of gold - Non production of bills for the gold is not fatal.-
Apex court held that In regard to the statement by the plaintiff that gold ornaments worth about Rs.24 lakhs were held by him and family members and there was cash of about Rs. 8 lakhs, the plaintiff is not cross-examined as such. At any rate, there is no serious dispute raised when he was cross-examined in this regard. There is no question raised about the family members not making available the gold ornaments or that it was not available with them. The non-availability of bills relating to the gold jewellery to prove ownership as such may not be in the facts of this case fatal to the plaintiff.-we are of the view that the High Court erred in interfering with the decree passed by the Trial Court.
1
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3336 OF 2019
(Arising out of S.L.P.(C) No.1701 of 2016)
BHAVYANATH REPRESENTED BY
POWER OF ATTORNEY HOLDER … APPELLANT(S)
VERSUS
K.V. BALAN (DEAD) THROUGH LRS. … RESPONDENT(S)
J U D G M E N T
K.M. JOSEPH, J.
1. The appeal by Special Leave is directed against
the judgment passed by the High Court of Kerala at
Ernakulam dated 08.10.2015 in RFA No.869 of 2013. The
appellant is the plaintiff in a suit for specific
performance which has been decreed by the trial Court
but on appeal by the defendant dismissed by the
impugned judgment of the High Court. For the sake of
convenience, the parties would be referred hereinafter
as per their status shown in the plaint before the
trial Court.
2
THE AGREEMENT
2. There is no dispute that the plaintiff and the
defendant have indeed entered into an agreement on
25.04.2007. The agreement (marked as A1), inter alia,
provided as follows; The property, which was agreed,
to be sold was mentioned as 75 ¾ cents held by the
defendant as per assignment deed No.1405 of 1975. The
property agreed to be sold included all improvements
thereon including an incomplete RCC house building,
Well, motor shed etc. Payment of Rs.2,00,000/- as
advance was recorded. Towards balance consideration the
plaintiff was to pay the minimum amount of
Rs.3,00,000/- within four months from 25.04.2007. It
is further recited that on such payment, the defendant
will assign land equivalent to Rs.3,00,000/- in favour
of the person nominated by the plaintiff for the
portion agreed by both the parties. The consideration
was fixed at Rs.34,000/- per cent of property to be
found on actual measurement. The time limit was fixed
as "till the 24th day of March, 2008". Time limit was
expressly mentioned as an essential part of the
agreement. The assignment was to be executed either in
3
favour of the plaintiff or any other person nominated
by him in writing. Before the execution of the
assignment deed, the contract further provided that the
plaintiff shall be convinced of the title of the
property and other connected things.
DEVELOPMENTS AFTER THE AGREEMENT
3. It is not in the region of dispute that the
plaintiff paid Rs.3,00,000/- by cheque on 25.08.2007
and it is also endorsed in the agreement. Thereafter,
on 25.01.2008 the defendant sent a lawyers notice to
the plaintiff. Therein it is stated that the defendant
holds 75 ¾ cents as per the assignment deed, already
referred to, which property was agreed to be sold for
Rs.34,000/- in terms of the agreement and the last date
of the agreement was fixed as 24.03.2008. It is further
stated that the plaintiff was to give balance
consideration by deducting the advance within the
stipulated time for which the defendant is ready and
he called upon the plaintiff to get ready for the same
by that time. It is further stated that the plaintiff
had orally offered to the defendant in the presence of
witnesses that he will take assignment of the property
4
even before the stipulated date for which the defendant
is ready.
4. The plaintiff caused a reply notice to be sent to
the aforesaid lawyers notice. The reply notice sent was
dated 18.03.2008. Therein it is relevant to notice
certain statements. After referring to Ext.A1
agreement, it is stated that the lawyers notice was
sent by the defendant without getting the property
measured or producing and convincing the plaintiff
about the original title deed No.1405/1975 as well as
prior documents. It is stated that the plaintiff was
and is continuously ready and willing to perform his
part of the agreement right from the beginning till
then and in future. The statement in the notice, sent
by the defendant, is denied that the plaintiff will
take the assignment before the agreed date and it was
agreed so in the presence of witnesses. It is alleged
that defendant sent the notice with ulterior motive
concealing that property had not been measured and
without producing the original title deed. The
plaintiff pointed out that the defendant consented to
measure the property only three days before that date
5
i.e. on 16.03.2008 (it may be noticed that reply notice
is dated 18.03.2008 and it was sent only later). It was
further stated that the defendant told the plaintiff
that the total extent of property, as per the document,
found on measurement was only 70.950 cents. The case
sought to be set up further is that, according to the
plaintiff, 1 ½ cents of property was not in the
possession or ownership of the defendant. Out of the
70.950 cents of property one cent on the southern
boundary was alleged to belong to one Kochammu and
another ½ cent of property on the northern boundary
belonged to some one else. This information was got by
plaintiff from reliable source. The plaintiff complains
in the reply notice that the defendant was insisting
that he will assign the property only if the
consideration in full for the said 70.950 cents was
paid. Objection was taken to the same by the plaintiff.
Thereafter, it is, inter alia, stated that the
plaintiff is ready and willing to take the assignment
of the entire property available as per the original
document No.1405/1975. The insistence on the part of
the defendant in withholding the original document is
stated to be ill-motivated. The plaintiff thereafter
6
states that he wished to construct residential house
building for his own occupation adjacent to the
property as per agreement which is very close to his
proposed residence. Plaintiff is alleged to have made
solid arrangement for the same. It was specifically,
inter alia, stated that the plaintiff had arranged
balance consideration and he was continuously ready and
willing to take the assignment right from the date of
the agreement i.e. on 24.03.2007 and thereafter in
future as well.
We further notice that on 24.03.2008, which as per
Ext.A1 agreement, was to be the "last date" under the
agreement, the plaintiff and the defendant claimed that
they were present at the office of the Sub Registrar.
According to the plaintiff, the defendant was elusive
and could not be contacted over the phone and he was
unavailable. The plaintiff filed a complaint before the
police on 24.03.2008 in the evening. He also followed
it up with a petition before the Sub Registrar on
25.03.2008. Within three days from 24.03.2008, that is
on 27.03.2008, the present suit came to be instituted,
claiming specific performance. In the plaint, after
referring to the agreement, the plaintiff has alleged
7
that he was always ready and willing to perform his
obligations. The blame was put at the doorstep of the
defendant for breaching the contract. The defendant in
his written statement on the other hand blamed the
plaintiff for breach and it was his case that plaintiff
was not ready and willing and he was not ready with the
funds.
PROCEEDINGS BEFORE THE TRIAL COURT
5. The trial Court struck the following issues; (1)
whether the plaintiff was ready and willing to perform
his part of the contract, (2) whether the defendant
committed breach and (3) whether the plaintiff is
entitled to get a decree for specific performance. The
trial Court, inter alia, found as follows.
"8. It is true that plaintiff has not
produced any document to show that he was
having ready cash covering the balance
consideration, payable by him under Ext.A1,
at the relevant time. Of course, certain
documents are produced to show that presently
he is having some ready cash in the form of
fixed deposits and in the form of share
certificates etc. I do not think that any of
these documents are much relevant in this
case for the reason that in the nature of the
dispute the plaintiff has to prove his
capacity to pay the balance consideration
within the period shown in Ext.A1. Production
of these documents which are admittedly after
8
the suit may not have much evidentiary
value."
6. The trial Court further holds that it is not the
requirement of law that a vendor in a contract for sale
has to carry the balance consideration with him always
till the expiry of the agreement. It is sufficient that
he has enough source to raise the funds as and when
required. Rejecting the contention of the defendant,
that plaintiff did not have money even when he entered
Ext.A1 agreement, it was noticed that admittedly on the
date of agreement Rs.2,00,000/- was paid and
subsequently Rs.3,00,000/- was paid. The explanation
of plaintiff as to why he did not take the proportionate
extent on payment of Rs.3,00,000/-, as provided in the
agreement, was accepted. It was found that the extent
was not found sufficient on the advise of the engineer
to start the construction. The case of the plaintiff,
in fact, is that the idea to purchase the plaint
schedule property was to start a tuition center by
making a partnership between himself and his family
members. Thereafter, it is found as follows in
paragraph 12:
9
"12. Plaintiff has given clear evidence to
the effect that he had sufficient money with
him for completing his part. As already
stated by him, he did not carry the ready
cash with him through out the period of the
agreement. The total amount o f consideration
comes to Rs.25,67,000/-, even if the extent
is taken as 75 3/4 cents. It is contended
that plaintiff was only a student at the time
of Ext.A1. He is so described in Ext.A1 also.
PW1 says that even at that time he was
employed. True, one cannot expect that from
his employment alone he could have mobilized
the balance consideration. The income tax
returns filed by him show his salary and
prove the above fact. But there is ample
evidence to show that his father was actively
involved in the transaction. PW1 has deposed
that his family members were possessing gold
ornaments worth Rs.25,00,000/- and he was
having cash amount of Rs.8,00,000/- at the
relevant time. The defendant has no case that
the plaintiff was not supported by his
father. In fact, the active involvement of
his father in the transaction is rather
admitted by defendant himself. Plaintiff has
produced several documents to show that his
parents are having sufficient properties and
gold ornaments. Of course, most of them are
after suit documents. But there is an
admission made by DW1 that after Ext.A1, the
plaintiff has purchased an adjacent plot
measuring 10 cents. Considering the totality
of the evidence available, I am inclined to
hold that the plaintiff was having capacity
to raise the balance consideration had the
necessity arisen. Therefore, I am inclined to
accept the evidence of PW1 that he was ready
with the balance consideration or at least he
was capable of raising the balance
consideration as and when required."
10
7. The trial Court thereafter also rendered findings
on the issue as to whether the defendant had committed
breach. The contention of the plaintiff that the
lawyers notice dated 25.01.2008 sent by the defendant
was issued with ulterior motive was accepted. It was
found that under Ext.A1 agreement the property was to
be measured and the actual extent was to be
ascertained. Before sending lawyers notice, the
defendant had not got the property measured. It was for
the defendant to get the property measured. Referring
to the admissions made by the defendant, it was found
that he had not taken any step for measuring the
property. The admission that the defendant was aware
on the date of Ext.A1 agreement that the entire extent
of 75 ¾ cent was not available is referred to. The case
of the defendant that the property was measured by the
plaintiff on 16.05.2007 was found unacceptable. The
case of the plaintiff was that on 16.05.2007 he along
with engineer inspected the site to find out the
possibility of construction in the extent falling
proportionately to the amount of Rs.3,00,000/- was
explored. Defendant was to convince the plaintiff
regarding the title deed and the tax receipt. The
11
plaintiff had got marked Ext.A9 and A10, encumbrance
certificate. They revealed that mortgage was created
by the defendant over the property in the year 1983.
No entry regarding the clearance of the mortgage was
found. The case of the defendant that he had obtained
the release deed was found unacceptable by noting that
the release deed was neither produced nor there is any
evidence to prove that fact. Thus, the defendant had
breached his obligation under the contract. The
plaintiff got the property measured through the village
officials on 16.03.2008 in the presence of the
defendant. The trial Court relied on Ext.A42, the copy
of the counter, filed by the defendant to interlocutory
application, filed by the plaintiff, wherein the
defendant has averred that the plaintiff and his father
got convinced to the actual extent as 70.950 cents by
measuring the property. The trial Court found this to
be a case of the defendant accepting that the
measurement was done on 16.03.2008. The measurement on
16.03.2008 was arranged and paid for by the plaintiff.
It again, according to the trial Court, indicated the
readiness and willingness on the part of the plaintiff
and that the defendant was negligent in performing his
12
part. In Court, the property was got measured by the
Commissioner with the help of Taluk Surveyor. Ext.C2
is the report and Ext.C2(a) is the survey plan prepared
by Commissioner. They show that extent in possession
of the defendant on the strength of the title deed is
71.70 cents. 4.25 cents has been taken out from the
property of the defendant for road. Another extent of
0.375 cents was found to be in the possession of a
third party. These facts are found to be admitted by
defendant as DW1. Measurement in such circumstances was
found absolutely necessary for the completion of the
sale transaction. As regards both, the plaintiff and
defendant, asserting that they were before the Sub
Registrar on 24.03.2008, the trial Court found no
meaning in the same. Both sides were aware that without
measurement it would not have been possible to complete
the transaction. The plaintiff found on measurement
that only lesser extent is available. Appearance before
the Sub Registrar could not be considered as an act
showing the readiness and willingness, it was found
both for the plaintiff and the defendant. Dehors this
act, the trial Court found there were other
circumstances which proved readiness and willingness
13
of the plaintiff. No default on the part of the
plaintiff being found and breach being found on the
part of the defendant and still further finding no
undue hardship even being complained of by the
defendant, the trial Court decreed the suit by
directing specific relief against the defendant.
Defendant appealed.
FINDINGS OF THE HIGH COURT
8. The High Court, inter alia, has entered into the
following findings. It referred to para ‘8’ of the
judgment of the Trial court, which we have extracted.
In paragraphs 23 and 24, the High Court proceeded
to discuss the question whether the defendant was in
breach and this is what the Court proceeded to say:
"23. In so far as the condition requiring
measurement of the amount is concerned,
averments in the plaint itself show that on
16.3.2008, the land was measured. Although it
is case of the respondent that it was he who
got the land measured, the appellant
contended that it was at his instance, the
land was measured. Though evidence is lacking
to conclude this dispute either way, for the
purpose of this case, we do not think it
necessary to resolve this controversy for the
reason that irrespective of who got the land
measured, fact remains that the land was
measured and the parties are in agreement
that on measurement, the extent found was
14
only 71.750 cents. In other words, this shows
that as a result of teh measurement carried
out on 16.3.2008, one of the conditions for
performance of the agreement was satisfied.
24. In so far as the title of the appellant
is concerned, even the respondent plaintiff
has no case that the appellant did not have
title or that it was defective and the
question of handing over the title deds arise
only at the time of execution of the sale
deed. This, therefore, means that no fault
could have been attributed on the part of the
appellant and therefore, the court could have
granted a decree for specific performance of
the agreement only if the respondent had
satisfied the requirements of section 16(c)
of the Specific Relief Act. In so far as this
aspect of the matter is concerned, the
question is whether the respondent has proved
his readiness and willingness to perform the
agreement."
9. After referring to various decisions of this Court
and of the High Court, the High Court proceeded to find
that a finding of breach by the vendor in performing
his obligations would not be sufficient for a Court to
decree specific performance. The breach by the
defendant, in other words, would not absolve the
plaintiff to allege and prove his readiness and
willingness to perform his obligations under the
contract. "Readiness" relates to financial capacity to
pay consideration whereas "willingness relates to the
15
state of mind. Following are the findings which we may
refer to:
"25. While readiness indicates the fiscal
capacity of the respondent to perform the
agreement, willingness indicates his state of
mind. In so far as readiness is concerned,
the further question that is required to be
proved is whether readiness has been proved
on the evidence available. We have already
referred to paragraph 8 of the judgment and
the oral evidence of PW1 which, to our mind,
do not help the respondent plaintiff to prove
his case of readiness or his capacity to
perform the agreement. Turning to the
documents that are relied on, those documents
include Exts.A22 and A23 valuation
certificates of the gold allegedly possessed
by the respondent's mother and wife, which
were marked through PW4. Ext.A24 series and
A25 marked through PW8 are the certificates
issued about the properties allegedly owned
by them. These are documents which were
obtained after 24.3.2008 and are regarding
the assets owned by the father, mother and
wife of the respondent plaintiff. The owners
of these assets have not tendered any
evidence whether the actually possessed these
properties at the time when the agreement was
to be performed and even if they had
possessed these assets, whether they were
willing to part with it in order to enable
the respondent plaintiff to generate funds
out of it towards the sale consideration
payable under Ext.A1. There is also no
averment in the plaint to that effect.
26. In so far Exts.A11 to A16 are concerned,
these again are fixed deposit receipts issued
in the year 2012, which also cannot help the
respondent plaintiff to prove his capacity as
on 24.3.2008 or any time before that. Among
the other documents which were relied on by
the learned counsel for the respondent to
16
contend that the readiness was proved by him,
Exts.A17 and A20 show that his father had
sold certain shares on 3.11.2010. Similarly,
Ext.A18 shows that the respondent had sold
his shares on 31.8.2010. Ext.A19 is yet
another document which show that on
26.12.2011 his mother had sold certain
shares. Exts.A26 and 27 are certificates
issued by the Canara Bank and Union Bank
again in 2013 when the trial was pending,
which show that his father had certain funds
available with him. As in the case of
Exts.A11 to A16, A22, A23, A24 and A25, all
these documents would not show that funds
were available with either of the respondent
or his parents on 24.3.2008 or any time prior
thereto. Therefore, these documents also will
not help the respondent to contend that his
readiness and willingness were proved by him
to substantiate his prayer for specific
performance of Ext.A1 agreement."
10. On the above reasoning, High Court allowed the
appeal and decree of the trial Court was set aside.
11. We have heard Shri K.V. Viswanathan learned senior
counsel for the appellant/plaintiff besides Shri P.N.
Ravindran learned senior counsel for the
respondent/defendant.
12. Learned senior counsel for the plaintiff points
out that High Court committed error in interfering with
the judgment of the trial Court. The principles
17
relating to compliance with Section 16(c) which
enshrines the concept of readiness and willingness on
the part of the plaintiff has not been properly
appreciated. He submitted that plaintiff had sufficient
capacity which is what mattered. The law cannot be
disputed that in a suit for specific performance, the
plaintiff need not have the amount in cash. What is
crucial is whether he has the financial capacity to
perform his obligations. He drew our attention to the
fact that the plaintiff along with members of his
family, which consisted of his father, mother and his
wife, had enough resources. An amount of Rs.5,00,000/-
was already paid. Even the gold ornaments having regard
to their value (valued at Rs.24,00,000/-) besides about
Rs.8,00,000/- in cash held by the plaintiff himself
would suffice. The Court need not even go into the
aspect relating to landed properties and other assets
available. As regards the finding of the High Court
about the certificates relating to landed property,
being later in point of time, it is pointed out that
lands were very much with the members of the family as
on the date of the agreement and the date when the sale
was to be executed. The fact that the certificates were
18
of a later date did not take away the availability of
these assets. He pointed out that, in fact, the dispute
actually centered around the extent of property and the
financial capacity was not in dispute as such.
13. Per contra, Mr. P.N. Ravindran, learned senior
counsel drew our attention in paragraph 8 of the trial
Court which we have already referred to. He further
submitted that as regards the gold ornaments, the
plaintiff has not chosen to examine the members of his
family and without their testimony showing their
willingness to make available their valuables, apart
from the availability of the assets, it could not be
said that the High Court fell into error.
14. Before we advert to the facts it is appropriate to
discuss a few decisions of this Court. In Man Kaur
(Dead) by Lrs. v. Hartar Singh Sangha - (2010) 10 SCC
512, this Court dealt with the contention of the
purchaser in that case that the vendor had committed
the breach and there is no need for the plaintiff to
prove his readiness and willingness. This is what the
Court held in paragraph 40:
19
"40. This contention has no merit. There are
two distinct issues. The first issue is the
breach by the defendant - vendor which gives
a cause of action to the plaintiff to file a
suit for specific performance. The second
issue relates to the personal bar to
enforcement of a specific performance by
persons enumerated in section 16 of the Act.
A person 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 the terms the performance of
which has been prevented or waived by the
defendant) is barred from claiming specific
performance. Therefore, even assuming that
the defendant had committed breach, if the
plaintiff fails to aver in the plaint or
prove that he was always ready and willing to
perform the essential terms of contract which
are required to be performed by him (other
than the terms the performance of which has
been prevented or waived by the plaintiff),
there is a bar to specific performance in his
favour. Therefore, the assumption of the
respondent that readiness and willingness on
the part of plaintiff is something which need
not be proved, if the plaintiff is able to
establish that defendant refused to execute
the sale deed and thereby committed breach,
is not correct. Let us give an example. Take
a case where there is a contract for sale for
a consideration of Rs.10 lakhs and earnest
money of Rs.1 lakh was paid and the vendor
wrongly refuses to execute the sale deed
unless the purchaser is ready to pay Rs.15
lakhs. In such a case there is a clear breach
by defendant. But in that case, if plaintiff
did not have the balance Rs.9 lakhs (and the
money required for stamp duty and
registration) or the capacity to arrange and
pay such money, when the contract had to
beperformed, the plaintiff will not be
entitled to specific performance, even if he
proves breach by defendant, as he was not
20
"ready and willing" to perform his
obligations.”
(Emphasis supplied)
15. Taking up the issue relating to measurement of the
property, let us examine the matter in some detail. In
Ext.A1 agreement the defendant had agreed to sell 75 ¾
cents acquired under document No.1405/1975. The price
was fixed as Rs.34,000/- per cent. The extent was no
doubt to be found on actual measurement. The trial
Court found that though it is not stipulated as to who
will carry measurement, but the defendant being in
possession he was, to undertake the measurement. The
defendant, when he was examined as DW1, has inter alia
stated as follows; For the purpose of determination of
sale consideration property had to be measured. He
further states that after one week of the date of
execution of the agreement Gopi brought a person and
measured the property. When he saw the measuring
activity, he went to the property and asked for a copy
of the measurement details, but was not given. We
proceed on the basis that the reference to Gopinath,
is none other than the father of the plaintiff. He
admits that these facts are not stated in the written
21
statement. He states that he did not know about the
measurement of the property on 16.03.2008. There was
no opportunity to get the plaint schedule property
measured before the same was to be assigned. He
specifically states that he has not convinced them the
actual measurement of the plaint schedule property. He
further states that no measurement of the plaint
schedule property was done before the expiry of the
agreement period. He further states that he has not got
measured the extent of property after execution of the
agreement. He states that he does not remember about
the statement in Ext.A42 about the extent of the
property being convinced of by the plaintiff and his
father to be 70.950 cents. He specifically states that
it is not right to say that the plaint schedule property
has been got measured on 16.03.2008. He states that he
was not present at that time. We would think that the
High Court was in error in holding that on measurement
being carried on 16.03.2008, one of the conditions for
the performance of agreement was satisfied if it is
meant to find that the defendant had carried out the
obligations under the contract. It is noticed from
paragraph 23 of the impugned judgment that contrary to
22
his deposition, which we have adverted to as DW1, it
was contended on behalf of the defendant that the
measurement on 16.03.2008 was at his instance. It is
noticed that under Ext.A1 agreement the extent was
stated to be 75 ¾ cents, under a particular assignment
deed. The consideration was undoubtedly fixed with
regard to the actual extent at the rate of Rs.34,000/-
per cent. It is clear that the measurement was
essential for executing the conveyance and the
performance of further mutual obligations. When the
lawyers notice was caused to be sent on 24.01.2008 by
the defendant, he adverts to 75 ¾ cents. There is no
reference of any measurement having been done on
16.05.2007. We are inclined to find that it was the
plaintiff who took the initiative and the property
indeed was measured on 16.03.2008. We are further
inclined to agree with the trial Court that the
plaintiff, it is who financed the measurement by making
payment as he claimed. Testimony of the witness
accepted by the trial Court, which has had opportunity
to watch the demeanour of the witness is not to be
likely shaken by the appellate court.
23
16. Still further the next finding by the High Court
is contained in paragraph 24 of its judgment. The Court
proceeds to hold that even the plaintiff has no case
that the defendant did not have title or that it was
defective and the question of handing over title deed
arises only on the execution of the sale deed and
therefore no fault could be attributed to the
defendant.
17. In this regard there are two aspects which we would
think has not been considered by the High Court. We
have adverted to the statements in the reply notice
sent dated 18.03.2008 by the plaintiff. The measurement
took place on 16.03.2008. On measurement it appears to
have been found that the extent available with the
defendant was 70.950 cents. However, plaintiff found
that one cent out of the 70.950 cents was not with the
defendant and instead was with one Kochammu and half
of cent was with somebody else in the northern side.
However, when this was brought to the notice of
defendant, according to plaintiff, he wanted payment
on the basis that he had the whole of 70.950 cents.
Therefore, the said question related to the title of
24
the defendant, a question relating to the exact extent
available for being conveyed. Secondly and far more
importantly, admittedly there was a mortgage over the
plaint schedule property created in 1983 by the
defendant. Encumbrance certificates produced by the
plaintiff has been relied upon by the trial Court to
find that the mortgage had not been cleared. The
defendant in his evidence as DW1 sets up the case that
the mortgage was cleared and release deed was available
with him. It is at his home. On the one hand, the
encumbrance certificates did disclose the mortgage and
they did not reveal the clearing of the mortgage. The
defendant on the other hand, though setting up the case
that the debt was paid of and mortgage was got released
but did not choose to produce the evidence which was
in his possession.
18. The High Court has overlooked this aspect and came
to the conclusion that there was no dispute relating
to the title. Under Ext.A1 agreement, it was incumbent
upon the defendant to convince the plaintiff about the
title of the property and other connected things. No
doubt, the plaintiff had made a demand for the original
25
title deeds relating to the property, as he wanted to
use them for the purpose of taking a loan in connection
with his proposed construction. This we do not think
he was entitled under the contract and if the defendant
refused the title deeds we would not be in a position
to blame him. We are, therefore, of the view that the
High Court has fallen into an error in reversing the
finding that the defendant was in breach of his
obligations.
19. We have noticed the law to be that it does not
suffice for the plaintiff in a suit for specific
performance to establish that the defendant was in
breach to seek a decree for specific relief. The
plaintiff must further establish, if it is contested
that he was ready and willing from the date of the
contract to perform his obligations.
20. In a contract, a contract usually embodies mutual
obligations. The order of performance of obligations
by the parties to the contract would have an impact on
the aspect relating to readiness and willingness
undoubtedly. In fact, readiness and willingness on the
part of plaintiff makes its appearance right from the
26
time of the reply notice sent by the plaintiff and
continued in his pleadings. We are, however, concerned
in this case only with the aspect relating whether he
has proved despite what he might have established
against the defendant that he was ready to perform his
obligations. To begin with, the plaintiff has filed the
suit on 27.03.2008. It must be remembered that under
Ext.A1 agreement, the last date for executing the sale
deed was 24.03.2008. This means on the third day of the
date fixed under the contract on the allegation that
the defendant resiled from the promise to execute the
sale deed, the plaintiff has knocked at the doors of
the Court seeking specific relief.
21. The second thing which no doubt appears in favour
of the plaintiff is that on the date of the agreement,
which was 25.04.2007, admittedly an amount of
Rs.2,00,000/- was paid as advance within four months
of the agreement, again, indisputably a further sum of
Rs.3,00,000/- came to be paid by the plaintiff and
accepted by the defendant. The further question that
arises, however, is whether the High Court was right
in holding that the plaintiff was not in a position to
27
perform the financial obligations under the contract.
At this juncture, let us examine the state of the
evidence adduced by the parties.
22. The plaintiff has examined himself as PW1 and
further examined eight other witnesses. He has also
marked Ext.A1 to A42. The defendant has examined
himself as DW1. There are other Court exhibits which
are related to financial position of the plaintiff.
23. Not unnaturally, we must first look to what the
plaintiff has deposed before the Court. The plaintiff
says, inter alia, as follows in his cross-examination;
During the period of Ext.A1 agreement I was a student.
He added that he had a part time teaching job and
consultancy service. The plaintiff claimed that he was
a teacher in an academy. He produced income tax
returns. He was asked the following questions. At the
time of the filing of the suit, you have not produced
any document showing availability of money required for
taking assignment of the property. Whether there is any
specific reason for the same (Question)? There is no
specific reason for the same (Answer). Is there any
28
reason for not stating in the plaint in what way the
amount required was arranged (Question)? No special
reasons (Answer). How much amount was arranged by you
on 24.03.2008 to take assignment of plaint schedule
property (Question)? There was gold jewelry worth
Rs.24,00,000/- held by myself and my family members.
Besides, about Rs.8,00,000/- was arranged in cash also
(Answer). He states that he has understood that the
main dispute in this case is that he was not having the
capacity to raise the consideration as per Ext.A1
agreement. Another question which was put to the
plaintiff is as follows. Apart from producing certain
documents on 02.02.2013 showing availability of funds,
you have not produced any other document before that
to show funds (Question)? No (Answer).
24. We must notice that Shri K.V. Viswanathan, learned
senior counsel would submit that High Court has
appreciated aforesaid question and answer erroneously.
He pointed out that actually when the plaintiff
answered 'no', it should be understood the meaning was
that he was denying the suggestion that the plaintiff
had not produced any document to show funds. He would
29
submit that had the answer been yes, it could be
inferred that there was no document. The plaintiff
continues and states six documents being Ext.A11 to A16
are of the year 2012. The number of shares are not
mentioned in Ext.A17. The plaintiff has further
apparently, with reference to income tax returns Ext.35
and 36, stated that income has been shown as
Rs.1,18,000/- and Rs.1,32,000/- for the assessment
years 2007-08 and 2008-09 respectively. No doubt there
is no mention about his investments and shares in the
income tax returns. Plaintiff claimed that during the
year 2004-05 his income was about Rs.30,000/- and
during 2005 the same was around Rs.60,000/-. He joined
an academy as a teacher in the year 2006. He resigned
from the same during the year 2011. During the period
2006-08 he purchased and sold 22 cents of land.
Plaintiff does not remember the price at which the
property was purchased. He denied the suggestion that
he was not having the money to purchase the property
admeasuring 70.950 cents or as reduced by 1 ½ cents.
He was having required amount then and now and he was
ready and willing to take the property, he deposed.
30
25. PW2 is a Managing Director of financial company.
He has produced and marked Ext.A19 certificate relating
to shares held by the mother of the plaintiff.
26. PW3 is a Depository Participant of a broker. He
was examined to prove the shares held by his mother.
He states that he came to depose on being asked to do
so by Gopinathan (father of the plaintiff).
27. PW4 is a Government Gold Valuer of Income Tax
department and he has proved Ext.A22 valuation report
issued to the mother of the plaintiff after examining
her gold ornaments. He has also proved Ext.A23
valuation report, issued to the wife of the plaintiff,
after examining her gold ornaments. In crossexamination he would also state that he has not
received summons from the court, but was asked by
Gopinathan (father of the plaintiff). He states that
he has previous acquaintance with Gopinathan. He came
for valuation and thus he knew him. He states further
in cross-examination that the mother and wife of the
plaintiff came to him for valuation along with
Gopinathan. He further states that they neither
31
produced nor he demanded the bills or receipts relating
to the gold ornaments he valued that day. He further
states that they did not produce any document showing
ownership of the gold ornaments mentioned in Ext.A22
and A23 jewelery produced for valuation. In
reexamination, he points out that Gopinathan, who came
on the date of the gold valuation was sitting in the
Court.
28. PW5 is the Branch Manager of the Syndicate Bank.
He has marked Ext.A41. In cross-examination he states
that the loans were availed on 14.07.2012 and
22.03.2012. He further states that Syndicate Bank
advances loan at the rate of Rs.2100/- per gram of
gold. The two loans were given for agricultural
purposes.
29. PW6 is the Manager of Union Bank and he approved
Ext.A27. Again he is produced to prove gold loan which
is issued for agricultural purposes. The loan was
issued on 12.01.2013. The loan was given at the rate
of Rs.2000/- per gram of gold.
32
30. PW7 is the Chairman and Managing Director of
Financial Chits Company. He proved Ext.A17, 18, 20 and
21. In cross-examination he states he knows Gopinathan.
He states that he (Gopinathan) is practising as an
accountant and auditor in the next building. He states
that the shares held by him as per Ext.A20 was
transferred from his name on 03.11.2010. At present
Gopinathan and his son, the plaintiff, did not hold any
shares in the companies. The value of one share he
states is Rs.100/-. The plaintiff is not having any
share as per Ext.A17. He is holding only 250 shares.
31. PW8 has proved Ext.A24 and A25 reports. He claims
to be the valuer of property. He has valued as on 2008.
He denied the allegation that the present fair value
is less than the value shown in the report. When he was
asked what is the fair value of the properties, as
determined by the government, the answer was that he
has to verify. On similar lines was the answer in
respect of another piece of land. In answer to the
question whether he was ever verified the fair value
of the survey, the answer is in negative. Gopinathan
was known to him since last 12 years and he described
33
him as an auditor. He says that he is not acquainted
to his son (apparently the plaintiff).
32. PW-9 is the Manager of Canara Bank and he proved
Ext.A26 certificate. Apparently, it related to a gold
loan.
33. Coming to the evidence of defendant, we notice the
following inter alia; He was aware that as on the date
of agreement the extent of plaint schedule property did
not have an extent of 75 ¾ cents. He says that he knew
right from the date of the agreement that the plaintiff
is not having money to purchase the plaint schedule
property. When he was asked what was the reason for
sending the lawyers notice on 25.01.2008, his answer
was as follows: It was heard that plaintiff is trying
to resell the plaint schedule property to third parties
as he was not having money to purchase the same, hence,
the said notice was sent. He further states that he did
not know anything about the schedule of witnesses
submitted in the Court by him including the names of
witnesses as (1) Rajesh and (2) Muhammed. He says that
he does not remember the fact that in the counter to
the injunction petition, he had stated that the
34
plaintiff told Rajesh to find prospective buyers for
reselling the plaint schedule property on piecemeal
basis. He further states that anyhow Rajesh and
Muhammed were not examined as witnesses before the
Court. He denies that plaintiff was ready with the
money to purchase the plaint schedule property.
34. The plaintiff on the date of the suit in the year
2007 was 21 years. The agreement would show that the
witnesses to the agreement are one Manoharan, who is
none other than the son of the defendant and the other
witness is Gopinathan, the father of the plaintiff. The
trial Court has entered a finding that Gopinathan was
actively involved in the contract. We have eluded to
the fact that Gopinathan was a witness to the agreement
to safely conclude that the father of the plaintiff was
in the know of things and he was involved in the
transaction. We have referred to Gopinathan, figuring
in the deposition to arrive at the conclusion that the
plaintiff, though the actual party to the agreement,
the moving force and one who intended to support the
plaintiff was his father. The assets which are relied
on by the plaintiff to establish his financial capacity
35
would appear to belong to the close relatives of the
plaintiff, namely, his father, his mother and his wife.
We must recall that in his deposition PW1, when he was
asked as to on what basis he would claim that he had
the financial capacity on 24.03.2008, his answer was
that he had gold ornaments which were worth about
Rs.24,00,000/- and he had about Rs.8,00,000/- in cash
having regard to the payment of Rs.5,00,000/- by way
of advance and further payment to be made, after making
the advance, if Rs.24,00,000/- worth of gold being in
the possession of the plaintiff’s family members
besides Rs.8,00,000/- was there, certainly that would
suffice to establish the case of the plaintiff about
his financial capacity and readiness to perform the
contract. The law is certainly not that the purchaser
in a suit for specific relief must prove that he was
having cash with him from the date of the agreement
till the relevant date. What is important is that he
had the capacity to allow the deal to go through. If
gold was available, as claimed, we would think that on
a pragmatic view of the matter, it may be idle to
contend that it could not be converted into cash either
by immediate sale or by raising a loan.
36
35. We must, however, deal with certain other
contentions before we come to a conclusion in this
regard. The defendant has undoubtedly a case that the
gold ornaments though claimed to be that of the mother
and the wife of the plaintiff, without examining them
as witnesses and without their deposition showing that
they had those gold ornaments in their possession and
that they were willing to employ them for the purpose
of generating funds for the plaintiff, the Court cannot
conclude the matter in favour of the plaintiff. We
would think that it may be true that in a case of this
nature and in view of the context, it may have been
more appropriate that the relatives were examined.
Their non-examination, however, may not fatal to the
plaintiff. It must be realized that the relatives
involved are none other than the mother and the wife
of the plaintiff. Though subsequent their inclination
can be inferred from their going to the valuer PW4. In
such circumstances, we would think, it may be carrying
matters a little too far to decline specific relief,
particularly which was granted by the trial Court in
its discretion to contend that the mother and the wife
37
have not come forward to express their willingness to
make available ornaments for the purpose of the
plaintiff. In fact, no suggestion is seen put to the
plaintiff about the same.
36. The further question may, however, arise as on the
relevant date whether the gold ornaments having the
value of Rs.24,00,000/- was available with the mother
and the wife of the plaintiff. We have noticed the
deposition of PW4. He has stated that neither the bills
nor receipts relating to the gold ornaments were
produced. No documents relating to the ownership of the
gold ornaments were also produced. Could it be said,
therefore, that the gold ornaments never belonged to
the mother and the wife of the plaintiff and the
valuation report is therefore robbed of any value that
might otherwise be attached to it.
37. It is here we may notice that the family of the
plaintiff was possessed of considerable assets even
otherwise in terms of landed property. We further
notice that the plaintiff has proceeded to purchase
another 10 cents during the period when the contract
38
was in existence (relied upon by the trial Court to
establish the readiness and willingness in terms of
capacity apparently).
38. A1 contract is dated 25.04.2007. Plaintiff was, no
doubt, 21 years of age. His father Gopinathan was a
witness to A1. Knowing these facts, defendant entered
into the agreement, and what is more, received Rs.2
lakhs on the date of the agreement. Further, a sum of
Rs.3 lakhs was received under the agreement on
25.08.2007. The property is measured on 16.03.2008. On
the third day from 24.03.2008, which was the last day
for the execution of the sale deed, i.e., on
27.03.2008, the suit came to be filed. After the
advance paid by the plaintiff is deducted, the balance
amount including the stamp duty and expenses would not
exceed Rs.24 lakhs. There was the testimony of the
plaintiff as to how he intended to pay the
consideration on 24.03.2008. There was evidence of
plaintiff having gold ornaments with him and family
members worth about Rs.24 lakhs and cash of about Rs.8
lakhs. It also appeared that one of the family members
of the appellant had lands in her name. Even the
39
appellant purchased other land during the period of
contract. In regard to the statement by the plaintiff
that gold ornaments worth about Rs.24 lakhs were held
by him and family members and there was cash of about
Rs. 8 lakhs, the plaintiff is not cross-examined as
such. At any rate, there is no serious dispute raised
when he was cross-examined in this regard. There is no
question raised about the family members not making
available the gold ornaments or that it was not
available with them. The non-availability of bills
relating to the gold jewellery to prove ownership as
such may not be in the facts of this case fatal to the
plaintiff.
39. Having regard to the totality of the facts present,
we are of the view that the High Court erred in
interfering with the decree passed by the Trial Court.
We notice that the appellant has deposited the sum of
Rs.19,37,8000/- (balance amount) with the Government
Treasury immediately after judgment dated 10.06.2013.
While we are inclined to direct specific relief in
favour of the appellant, we are of the view that we
should also direct that interest at the rate of 6 per
40
cent on Rs.19,37,8000/- from 27.03.2008 (date of suit)
till date of deposit (in Government Treasury) should
be directed to be paid over and above the balance amount
to the respondents in exercise of our power under
Article 142 of the Constitution of India. Hence, we
allow the appeal, set aside the judgment of the high
Court and restore the decree passed by the Trial Court,
subject to the following modifications.
40. We further direct that appellant shall pay a sum
calculated at 6 per cent per annum on Rs.19,37,800/-
from 27.03.2008 till the date of deposit in Government
Treasury in 2013 also, apart with the balance to be
paid. The respondents can withdraw the balance payment
(i.e., Rs.19,37,800/-) as also amount calculated at 6
per cent on Rs.19,37,800/- as aforesaid. The balance,
if any, in the Government Treasury, can be withdrawn
by the appellant. If the amount in the Government
Treasury does not attract interest, the appellant shall
deposit the amount of interest as calculated within 10
weeks from today which can be withdrawn by the
respondents. It is only after payment of interest as
aforesaid, that the conveyance deed need be executed.
41
41. The parties shall bear their own costs.
.......................J.
(ASHOK BHUSHAN)
.......................J.
(K.M. JOSEPH)
New Delhi,
September 12, 2019.
