The suit filed by the plaintiff was for specific performance of the agreement of reconveyance dated 23.04.1975. Alternatively, he had also sought for a declaration that the sale deed dated 23.04.1975 was null and void and not binding on the plaintiff. whether the sale deed dated 23.04.1975 executed by the plaintiff in favour of the defendants is a nominal sale deed obtained as security for the loan advanced by the defendants.?The deed of re-conveyance, contains a clause for payment of interest on the consideration amount of Rs.35,000/-. However, the plaintiff has pleaded that there is no agreement to pay the interest. This shows that the plaintiff was not ready to perform his part of the obligation as per the agreement. Further, the plaintiff had mortgaged the property with the bank and the bank had obtained an award against the plaintiff. When the suit property was put up for auction, the defendants paid the entire amount to the bank which was payable by the plaintiff under this award. This aspect also indicates the conduct of the plaintiff.Taking an overall view of the matter, the trial court has rightly held that the plaintiff was not ready and willing to perform his part of the contract. The High Court, in our view, was not justified in reversing the well-reasoned judgment of the trial court. In the result, this appeal succeeds and it is accordingly allowed. The judgment of the High Court in R.F.A. No.626 of 2001 dated 21.08.2006 is set aside and the judgment and decree passed by the trial court in O.S. No.3308 of 1988 dated 12.04.2001 is restored.

The suit filed by the plaintiff was for specific performance of the agreement of reconveyance dated 23.04.1975. Alternatively, he had also sought for a declaration that the sale deed dated 23.04.1975 was null and void and not binding on the plaintiff.
whether the sale deed dated 23.04.1975 executed by the plaintiff in favour of the defendants is a nominal sale deed obtained as security for the loan advanced by the defendants.?The deed of re-conveyance, contains a clause for payment of interest on the consideration amount of Rs.35,000/-. However, the plaintiff has pleaded that there is no agreement to pay the interest. This shows that the plaintiff was not ready to perform his part of the obligation as per the agreement. Further, the plaintiff had mortgaged the property with the bank and the bank had obtained an award against the plaintiff. When the suit property was put up for auction, the defendants paid the entire amount to the bank which was payable by the plaintiff under this award. This aspect also indicates the conduct of the plaintiff.Taking an overall view of the matter, the trial court has rightly held that the plaintiff was not ready and willing to perform his part of the contract. The High Court, in our view, was not justified in reversing the well-reasoned judgment of the trial court. In the result, this appeal succeeds and it is accordingly allowed. The judgment of the High Court in R.F.A. No.626 of 2001 dated 21.08.2006 is set aside and the judgment and decree passed by the trial court in O.S. No.3308 of 1988 dated 12.04.2001 is restored.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8425 OF 2009
C.S. VENKATESH … APPELLANT
VERSUS
A.S.C. MURTHY (D) BY
LRS. & ORS. … RESPONDENTS
J U D G M E N T
S. ABDUL NAZEER, J.
1. This appeal is directed against the judgment and decree in RFA No.626 of
2001 dated 21.08.2006 passed by the High Court of Karnataka at Bangalore,
whereby the High Court has allowed the appeal and set aside the judgment and
decree in O.S. No. 3308 of 1988 passed by the Civil Judge, Bangalore City.
2. A.S.C. Murthy was the plaintiff in the suit. He died during the pendency
of the suit. Therefore, his wife Smt. Jayashree was brought on record as his
legal representative. She is the first respondent in this appeal. C.S. Venkatesh,
the appellant herein, was defendant No.2 in the suit. C. Sethurama Rao, was the
defendant No.1 in the suit. He also died during the pendency of the suit,
1
therefore, his wife Smt. C.S. Lalithamma was brought on record as his legal
representative. She is arrayed as respondent No. 2A in this appeal. Defendant
Nos. 3 and 4 are respondent Nos. 3 and 4 in this appeal. The parties are
hereinafter referred to in their respective capacities before the trial court.
3. The subject matter of the suit was the property situated at Site No. 522,
17th Main Banashankari, I Stage, First Block, Srinagar, Bangalore – 560 050
(hereinafter referred to as ‘the schedule property’).
4. A.S.C. Murthy had filed the above suit against defendants for specific
performance of the agreement of reconveyance dated 23.04.1975 in respect of
the schedule property and alternatively to declare that the sale deed dated
23.04.1975 executed by him in favour of the defendants is null and void. It was
alleged in the plaint that the City Improvement Trust Board, Bangalore (for
short ‘CITB’) had allotted the site in question in favour of the plaintiff.
Thereafter, he commenced construction of the building on the said site. Since
he did not have sufficient funds, he approached the defendants for certain
financial assistance. Accordingly, the defendants advanced a sum of Rs.2,000/-
as loan. Subsequently, a further sum of Rs.10,000/- was advanced on the
condition of payment of interest at the rate of 18% p.a. However, the plaintiff
failed to pay the interest on the said sum as agreed, except for a period of two
months. Since the defendants were in need of accommodation, the plaintiff put
them in possession of the schedule property by executing a deed of mortgage
dated 11.10.1973. According to the plaintiff, the defendants have advanced, in
all, a sum of Rs.29,000/-. As the plaintiff could not pay the interest regularly,
2
the defendants asked the plaintiff to execute a nominal sale deed in order to
ensure prompt payment of interest. Accordingly, the plaintiff executed a deed
of sale dated 23.04.1975 in favour of the defendants for a sale consideration of
Rs.35,000/- by receiving Rs.6000/-, the difference in the sale price. It was
alleged that the sale deed was executed as a security for the amount advanced
by the defendants. It was contended that the defendants executed an agreement
of reconveyance in respect of the schedule property dated 23.04.1975 in favour
of the plaintiff. It was also agreed that the defendants were put in possession of
the schedule property on the understanding that they need not pay rent and the
plaintiff need not pay interest on the amount advanced by them to the plaintiff.
After the expiry of five years and the defendants having received the sum of
Rs.35,000/- advanced by them, the plaintiff demanded that the defendants
execute a reconveyance deed in terms of the agreement of reconveyance dated
23.04.1975. However, the defendants have failed to execute sale deed.
5. The second defendant filed the written statement admitting the execution
of the mortgage deed dated 11.10.1973 and borrowing of a sum of Rs.29,000/-
by the plaintiff. It was contended that the defendants agreed to reconvey the
property and executed the reconveyance agreement prior to the execution of the
sale deed. However, the plaintiff did not agree for reconveyance. The plaintiff
gave up his demand for reconveyance and executed the sale deed. It was
contended that even otherwise the reconveyance agreement was not to be acted
upon. It was further contended that the plaintiff had borrowed the loan from the
3
bank on different occasions by mortgaging the title deeds of the property. As the
plaintiff failed to discharge his debt to the bank, the defendants paid the said
dues in order to save the schedule property from auction. It was also contended
that there was no plea or proof regarding readiness and willingness to perform
the plaintiff’s part of the contract as required under Section 16(c) of the Specific
Relief Act, 1963 (for short ‘the Act’). It was denied that the sale deed dated
23.04.1975 was nominal and was executed for the purpose of security for the
loan advanced by the defendants.
6. On the basis of the pleadings of the parties, the trial court framed the
relevant issues. In support of the suit claim, wife of the deceased plaintiff was
examined as PW-1 and exhibited documents P-1 to P-19 in her evidence. The
second defendant was examined as DW-1 and exhibits D-1 to D-15 were marked
in his evidence. On consideration of the evidence of the parties and materials on
record, the trial court came to a conclusion that the plaintiff has established the
execution of agreement of reconveyance. The Court also came to a conclusion
that the sale deed dated 23.04.1975 was not a nominal one, as contended by the
plaintiff. The Court recorded a finding that the plaintiff has averred in the plaint
that there was sufficient plea in relation to readiness and willingness of the
plaintiff to perform his part of the contract. However, it was held that the
plaintiff had failed to prove that he was ready and willing to perform the
contract. Consequently, the trial court dismissed the suit.
7. The plaintiff filed R.F.A. No. 626 of 2001, challenging the judgment and
decree of trial court. The High Court on consideration of the rival contentions
4
of the parties held that the sale deed executed by the plaintiff in favour of the
defendants was security for the loan advanced by the defendants. Consequently,
the High Court allowed the appeal. The defendants were directed to execute a
deed of reconveyance in respect of the schedule property in favour of the
plaintiff.
8. Appearing for the appellant/defendant No.2, Shri S.N. Bhat, learned
counsel submits that the suit filed by the plaintiff was for specific performance
of an agreement to reconvey. Therefore, he has to plead and prove his readiness
and willingness to pay the consideration amount to the defendants. In this case,
the plaintiff has failed to plead and prove his readiness and willingness. He had
no financial capacity to pay the consideration amount. He did not discharge the
earlier debt owed by him to Sri Thyagaraja Co-operative Bank and the
defendants had to pay off the debt in order to save the property. He had no
capacity to pay the consideration amount. It is further argued that the sale deed
dated 23.04.1975 was not a nominal sale deed, as contended. The High Court
instead of upholding the well-reasoned judgment of the trial court has set aside
the said judgment and decreed the suit.
9. On the other hand, Ms. Sanya Kumar, learned advocate appearing for the
respondent-plaintiff has sought to justify the impugned judgment and decree of
the High Court.
10. We have carefully considered the submissions of the learned counsel
made at the Bar.
11. The suit filed by the plaintiff was for specific performance of the
agreement of reconveyance dated 23.04.1975. Alternatively, he had also sought
5
for a declaration that the sale deed dated 23.04.1975 was null and void and not
binding on the plaintiff. On appreciation of the materials on record, the trial
court has held that the plaintiff has proved the existence and execution of
agreement of reconveyance. It has negatived the plaintiff’s claim that the sale
deed was a nominal one. However, the High Court has held that the plaintiff
had executed the sale deed in favour of the defendants as security for the loan
advanced by the defendants and that it cannot be considered a sale. Further, the
High Court has directed specific performance of the agreement of
reconveyance. Therefore, the first question for consideration is whether the sale
deed dated 23.04.1975 executed by the plaintiff in favour of the defendants is a
nominal sale deed obtained as security for the loan advanced by the defendants.
12. Execution of the sale deed and the deed of reconveyance are not in
dispute. According to the plaintiff, he could not pay the interest except for two
months after the execution of the sale deed and that the understanding between
the parties was that the defendants need not pay any rent and plaintiff need not
pay the interest on the amount advanced by them to the plaintiff. It was
contended that sale deed was executed to ensure prompt payment of the
amounts. But a reading of the sale deed marked at Exhibit P-8, along with
other surrounding circumstances, would clearly indicate that it is an outright
sale.
13. It is settled that the real character of the transaction has to be ascertained
from the provisions of the documents viewed in the light of surrounding
circumstances. Since two documents were executed on the same day, the
6
transaction cannot be a mortgage by way of conditional sale in view of the
express provisions contained in Section 58(c) of the Transfer of Property Act,
1882. A perusal of the recitals contained in the sale deed at Exhibit P-8 shows
that the property was agreed to be sold absolutely for a total consideration of
Rs.35,000/-. The plaintiff has also stated that since possession has already been
delivered earlier under a deed of mortgage, delivery of possession under this
document does not arise. It was further stated that henceforth neither himself
nor his heirs have any right, title or interest in the property and that the plaintiff
is entitled to water, air, right of easement, etc. concerning the property together
with all rights, title and interest and right of disposal of the property. The
defendant, his son and grandson, etc. unto posterity are entitled to enjoy the
property without any obstruction or trouble either by the plaintiff or from
anyone claiming under him. He has delivered the possession certificate issued
by the CITB and Khata certificate for transfer of Khata from Bangalore City
Corporation. Thus, the language employed in this document is plain and
unambiguous and the intention of the parties is also very clear from its recitals.
Even the evidence led by the parties does not indicate to the contrary. Thus, a
careful perusal of all the clauses of the sale deed and the evidence on record
would clearly show that the intention of the parties was to make the transaction
a sale. We are also of the view that since the execution of the reconveyance
deed has already been established, question of holding the sale deed to be
nominal cannot be accepted.
7
14. The next question for consideration is in relation to compliance of
Section 16(c) of the Act by the plaintiff. Though a question was raised before
the trial court that there are no pleadings as regards the plaintiff’s readiness and
willingness to perform the contract, the trial court has rightly held that there is
sufficient compliance of Section 16(c) of the Act to the extent of pleadings.
Therefore, the question to be considered is whether the plaintiff was ready and
willing to perform his part of the contract.
15. The words ‘ready and willing’ imply that the plaintiff was prepared to
carry out those parts of the contract to their logical end so far as they depend
upon his performance. The continuous readiness and willingness on the part of
the plaintiff is a condition precedent to grant the relief of performance. 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 contract, the court must
take into consideration the conduct of the plaintiff prior, and subsequent to the
filing of the suit along with other attending circumstances. The amount which
he has to pay the defendant must be of necessity to be proved to be available.
Right from the date of the execution of the contract till the date of decree, he
must prove that he is ready and willing to perform his part of the contract. The
court may infer from the facts and circumstances whether the plaintiff was
ready and was always ready to perform his contract.
8
16. In N.P. Thirugnanam (Dead) by LRs. v. Dr. R. Jagan Mohan Rao and
Others1
, it was held that continuous readiness and willingness on the part of the
plaintiff is a condition precedent to grant of 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 to and subsequent to the filing of
the suit along with other attending circumstances. The amount of consideration
which he has to pay to the defendant must necessarily be proved to be available.
17. In Pushparani S. Sundaram and Others v. Pauline Manomani James
(deceased) and Others2
, this Court has held that inference of readiness and
willingness could be drawn from the conduct of the plaintiff and the totality of
circumstances in a particular case. It was held thus:
“So far these being a plea that they were ready and willing
to perform their part of the contract is there in the pleading,
we have no hesitation to conclude, that this by itself is not
sufficient to hold that the appellants were ready and willing
in terms of Section 16(c) of the Specific Relief Act. This
requires not only such plea but also proof of the same. Now
examining the first of the two circumstances, how could
mere filing of this suit, after exemption was granted be a
circumstance about willingness or readiness of the plaintiff.
This at the most could be the desire of the plaintiff to have
this property. It may be for such a desire this suit was filed
raising such a plea. But Section 16(c) of the said Act makes
it clear that mere plea is not sufficient, it has to be proved.”
1 1995 (5) SCC 115
2 2002 (9) SCC 582
9

18. Similar view has been taken by this Court in Manjunath Anandappa
URF Shivappa Hanasi v. Tammanasa and Others3
and Pukhraj D. Jain and
Others v. G. Gopalakrishna4
.
19. The judgment of this Court in Umabai and Anr. v. Nilkanth Dhondiba
Chavan (Dead) by LRs. and Anr.,
5
 is almost similar to the case at hand where
the plaintiff had filed a suit for specific performance of the agreement to reconvey property. The plea of the plaintiff was that the transaction was one of
mortgage and the sale stood redeemed and the plaintiff was discharged from the
debt and he was ready to pay the defendant the amount for the property only in
the alternative that the plea of mortgage was not accepted by the Court, would
show that his readiness was conditional. The plaintiff did not have any income
and could not raise the amount required for re-purchase of the property. In the
totality of the circumstances, it was held that the plaintiff was not ready and
willing to perform the contract. The conditions laid for the specific performance
of the contract are in para 30, which is as under:
“30. It is now well settled that the conduct of the parties,
with a view to arrive at a finding as to whether the plaintiffrespondents were all along and still are ready and willing to
perform their part of contract as is mandatorily required
under Section 16(c) of the Specific Relief Act must be
determined having regard to the entire attending
circumstances. A bare averment in the plaint or a statement
made in the examination-in-chief would not suffice. The
conduct of the plaintiff-respondents must be judged having
3 2003 (10) SCC 390
4 2004 (7) SCC 251
5
(2005) 6 SCC 243
10
regard to the entirety of the pleadings as also the evidences
brought on records”.
20. In the instant case, the plaintiff has alleged that he was ready to pay
Rs.35,000/- to the defendants and called upon them to execute the reconveyance deed. However, in para 11 of the plaint it is pleaded that the
plaintiff was running contract business wherein he suffered heavy loss and as
such he gave up the business. It is also pleaded that at present the plaintiff has
no business or profession and has no source of income. He has no property,
either movable or immovable. Mere plea that he is ready to pay the
consideration, without any material to substantiate this plea, cannot be accepted.
It is not necessary for the plaintiff to produce ready money, but it is mandatory
on his part to prove that he has the means to generate the consideration amount.
Except the statement of PW-1, there is absolutely no evidence to show that the
plaintiff has the means to make arrangements for payment of consideration
under the reconveyance agreement.
21. It is relevant to state here that before filing the suit, the plaintiff had filed
an application before the competent authority under the Karnataka Debt Relief
Act seeking extinguishment of the debt and delivery of the property back to him.
No doubt, the application was dismissed by the authority. But the fact remains
that the intention of the plaintiff was not to pay the amount as per the reconveyance agreement.
22. The deed of re-conveyance, contains a clause for payment of interest on
the consideration amount of Rs.35,000/-. However, the plaintiff has pleaded that
11
there is no agreement to pay the interest. This shows that the plaintiff was not
ready to perform his part of the obligation as per the agreement. Further, the
plaintiff had mortgaged the property with the bank and the bank had obtained an
award against the plaintiff. When the suit property was put up for auction, the
defendants paid the entire amount to the bank which was payable by the plaintiff
under this award. This aspect also indicates the conduct of the plaintiff.
23. Taking an overall view of the matter, the trial court has rightly held that
the plaintiff was not ready and willing to perform his part of the contract. The
High Court, in our view, was not justified in reversing the well-reasoned
judgment of the trial court.
24. In the result, this appeal succeeds and it is accordingly allowed. The
judgment of the High Court in R.F.A. No.626 of 2001 dated 21.08.2006 is set
aside and the judgment and decree passed by the trial court in O.S. No.3308 of
1988 dated 12.04.2001 is restored.
25. There will be no order as to costs.

 …………………………J.
 (S. ABDUL NAZEER)
 .…………………………J.
 (DEEPAK GUPTA)
New Delhi;
February 07, 2020.                                12             13

Corporate Laws :- Sales Tax -Sales Tax Holidays = whether the Government Order No.CI 30 SPC 96 dated 15th March, 1996, namely, the Industrial Policy merely provides for sales tax concession and incentives and nothing more.? The core issue raised in these appeals, in our opinion, is no more res integra. It has been answered in the decision of this Court in “Malnad Areca Processing and Marketing Limited vs. Deputy Commissioner of Commercial Taxes (Assessment) and Others”, reported in (2008) 11 SCC 536. This very Industrial Policy, 1996 was considered by the Court. The Court opined that the same provides for exemption only in respect of sales tax and not for purchase tax as such. As observed in the case of Malnad (supra), the State can levy tax both at the sale point and/or at the purchase point. That distinction being clear, the question of assuming that the purchase tax was also part of the industrial policy under consideration cannot be countenanced. As a result, we find no reason to deviate from the view taken by the High Court in following the principle expounded in the decision of Malnad (supra).

Corporate Laws :- Sales Tax -Sales Tax Holidays =
 whether the Government Order No.CI 30 SPC 96 dated 15th March, 1996, namely, the Industrial Policy merely provides for sales tax concession and incentives and nothing more.? 
The core issue raised in these appeals, in our opinion, is no more res integra. It has been answered in the decision of this Court in “Malnad Areca Processing and Marketing Limited vs. Deputy Commissioner of Commercial Taxes (Assessment) and Others”, reported in (2008) 11 SCC 536.
This very Industrial Policy, 1996 was considered by the Court. The Court opined that
the same provides for exemption only in respect of sales tax and not for purchase tax as such. 

As observed in the case of Malnad (supra), the State can levy tax both at the sale point and/or at the purchase point. That distinction being clear, the question of assuming that the purchase tax was also part of the industrial policy under consideration cannot be countenanced. As a result, we find no reason to deviate from the view taken by the High Court in following the principle expounded in the decision of Malnad (supra).

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).10680-10683 OF 2011
M/S HIGH RANGE COFFEE CURING PVT.LTD. APPELLANT(S)
 VERSUS
THE STATE OF KARNATAKA & ORS.ETC. RESPONDENT(S)
WITH
CIVIL APPEAL NO.10684 OF 2011
O R D E R
1. Heard counsel for the parties.
2. The opening ground urged by the
appellant is that the High Court ought not to
have entertained the appeals on merits without
condoning the delay in filing of appeals. This
argument though attractive at the first blush,
does not take the matter any further as we find
the delay was only of 71 and 283 days
respectively and sufficient explanation has been
offered by the respondent(s) which could be
condoned in the interest of justice and we order
accordingly.
2
3. The core issue raised in these appeals,
in our opinion, is no more res integra. It has
been answered in the decision of this Court in
“Malnad Areca Processing and Marketing Limited
vs. Deputy Commissioner of Commercial Taxes
(Assessment) and Others”, reported in (2008) 11
SCC 536.
4. This very Industrial Policy, 1996 was
considered by the Court. The Court opined that
the same provides for exemption only in respect
of sales tax and not for purchase tax as such.
The relevant discussion in this behalf can be
discerned from paragraph Nos.15 to 19 of the
said decision, which read thus:
“15. In the government order what is
provided to new industrial units is
the sales tax exemption or deferral
of sales tax under the Act and the
Central Sales Tax Act, 1956 (in short
“the CST Act”).
16. Clause 5 of the Government
Order dated 15-3-1996 of the
Industrial Policy, 1996-2001 provides
for sales tax concession and
incentives. The said clause provides
for an option to industrial
investments in the tiny/SSI/medium
3
and large-scale sectors to claim
either sales tax exemption or sales
tax deferral.
17. A sale and a purchase are two
different aspects of the same
transaction. Whether sale or
purchase, it will have same
ingredients, both in common law and
also under the Sale of Goods Act. As
stated by this Curt in Devi Das Gopal
Krishnan v. State of Punjab1, the
transaction, which the sales tax laws
are concerned with, is a transfer of
property in goods for price, inter
vivos, both in the case of sale as
well as purchase.
18. In the government order, what
is provided to the new industrial
units, is an option to claim sales
tax exemption or deferment of sales
tax both under the Act and the CST
Act. In the field of taxation, it is
recognized that the power to classify
the objects or persons to be taxed or
exempted from levy is with the
legislature. It also enjoys the power
to select persons or transactions. A
law of the State, could therefore,
levy tax both at the sale point and
at the purchase point.
1 AIR 1967 SC 1895 = (1967) 3 SCR 557
4
19. Under the government order, the
policy of the Government as spelt out
is, that tiny and small-scale
industries and medium-and large-scale
industries may exercise their option
either for sales tax exemption or
sales tax deferment for number of
years prescribed in the government
order itself. In the context in which
these expressions are used, they only
mean “sales tax holiday” or exemption
from payment of sales tax for number
of years specified, depending on
where the tiny or small-scale
industry is located. “Sales tax”
refers to any tax which includes
within its scope all “business of
sale of goods” specified in the
Schedule. Similarly, “sales tax
deferral” only means the aforesaid
industries are entitled to collect
tax but they need not pay sales tax
collected immediately to the State.
If understood in this manner and
thereafter the New Industrial Policy
of the State Government for the years
1993-1998 and the exemption
notification is looked into, the only
conclusion that can be drawn is, what
is exempted under the notification
issued by the State Government is tax
5
leviable under Section 5 of the Act
on the goods manufactured and sold by
an industrial unit. Therefore, the
notification is in no way in variance
or contrary to the industrial policy
for the years 1993-1998. the above
position has been rightly highlighted
by the High Court.”
5. We are in agreement with the opinion as
recorded in the aforesaid decision, that the
Government Order No.CI 30 SPC 96 dated 15th
March, 1996, namely, the Industrial Policy
merely provides for sales tax concession and
incentives and nothing more.
6. Counsel for the appellant was at pains
to distinguish the judgment on the argument that
it has only considered the situation covered
under Section 6 of the Karnataka Sales Tax Act,
1957, whereas Section 5 of the Act deals with
both sale as well as purchase, and purchase
being the part of the same sale, the benefit
under the policy concerned must be extended also
for purchase, especially, because of the
amendment to the policy by inserting the
industry of the appellant in Appendix-IV. We are
6
not impressed by this submission.
7. The fact that the appellant/assessee’s
industry has been included or added in AppendixIV does not mean that the substance of the
policy has undergone any change. The purport of
amendment is only to include more industries
which were left out in the first notification of
15th March, 1996.
8. Counsel for the appellant had also
placed reliance on the Constitution Bench
decision of this Court in Devi Das Gopal
Krishnan (supra), in particular, paragraph 24,
which reads as under:
"Bearing that in mind let us look at
clause (ff) in Section 2 of the
Principal Act in which the said
clause was inserted. The ingredients
of the definition of "purchase" are
as follows : (i) there shall be
acquisition of goods; (ii) the
acquisition shall be for cash or
deferred payment or other valuable
consideration; (ii) the said valuable
consideration shall not be other than
under a mortgage, hypothecation,
charge or pledge. Clause (h) of
Section 2 defines thus :
7
"sale" means any transfer of
property in goods other than
goods specified in Schedule C
for cash or deferred payment or
other valuable consideration
but does not include a
mortgage, hypothecation, charge
or pledge.”
If we turn to the Sale of Goods Act,
Section 4 thereof define contract of
sale of goods. It reads :
"Contract of sale of goods is a
contract whereby the seller
transfers or agrees to transfer
the property in goods to the
buyer for a price...“
The essential requisite of sale are
(i) there shall be a transfer of
property or agreement to transfer
property by one party to another; and
(ii) it shall be for consideration of
money payment or promise thereof by
the buyer. A sale and a purchase are
different aspects of the same
transaction. If we look at it from
the standpoint of a purchaser it is
purchase and if we look at it from
the standpoint of the seller it is a
sale. Whether purchase or sale it
shall have the said ingredients both
in common law and under the Indian
8
Contract Act. 'Price' has been
defined in the Sale of Goods Act to
mean money consideration for the sale
of goods : see Section 2(10) of the
Indian Sale of Goods Act. It will,
therefore, be seen that the
definition of “purchase” in the Act
prima facie appears to be wider in
scope than “sale”. While transfer of
goods from one person to another is
the ingredient of “sale” in general
law, acquisition of goods, which may
in its comprehensive sense take in
voluntary as well as involuntary
transfers, is an ingredient of
“purchase” in clause (ff). While
“price”, i.e., money consideration,
is the ingredient of “sale”, cash,
deferred payment or any valuable
consideration is an ingredient of
'purchase’. But a closer scrutiny
compels us to give a restricted
meaning to the expression
"acquisition" and "price".
Acquisition is the act by which a
person acquires property in a thing.
"Acquire" is to become the owner of
the property. One can, therefore,
acquire a property either by
voluntary or involuntary transfer.
But the Sales Tax Act applies only to
9
"sale" as defined in the Act. Under
clause (ff) of Section 2 of the Act
it is defied as a transfer of
property. As purchase is only a
different, aspect of sale, looked at
from the stand point of the
purchaser, and as the Act imposes tax
at different points in respect of
sales, having regard to the purpose
of the sale, it is unreasonable to
assume that the Legislature
contemplated different categories of
transactions when the taxable event
is at the purchase point. Whether it
is sale or purchase the transaction
is the same. If it was a transfer
inter vivos, in the case of a sale,
it must equally be so in the case of
a purchase. Context, consistency and
avoidance of anomaly demand a
restricted meaning. That it must only
mean transfer is also made clear by
the nature of the transactions
excluded from the acquisition,
namely, mortgage, hypothecation,
charge or pledge-all of them belong
to the species of transfer. We must,
therefore, hold that the expression
"acquisition" in clause (ff) of
Section 2 of the Act means only
"transfer".
10
9. The exposition in paragraph 24 of the
stated decision extracted above itself
recognizes the distinction between sale and
purchase as different aspects of the same
transaction. As observed in the case of Malnad
(supra), the State can levy tax both at the sale
point and/or at the purchase point. That
distinction being clear, the question of
assuming that the purchase tax was also part of
the industrial policy under consideration cannot
be countenanced. As a result, we find no reason
to deviate from the view taken by the High Court
in following the principle expounded in the
decision of Malnad (supra).
10. The companion appeal, Civil Appeal
No.10684 of 2011, again raises a technical plea
regarding justness of exercise of jurisdiction
by the High Court in recalling the entire
decision dated 9th March, 2004 at the instance of
the appellant, who had merely moved an
application for recall/clarification of one
sentence occurring in the said decision. The
fact remains that the appellant, after recall of
11
the entire decision, participated in the appeal
proceedings before the Division Bench and argued
the matter on merits. As a result, this
technical plea cannot be the basis to undo the
entire judgment which otherwise is in conformity
with the legal principle stated in the case of
Malnad (supra).
11. Hence, these appeals must fail and the
same are dismissed accordingly. All pending
applications are also disposed of.
..................,J.
 (A.M. KHANWILKAR)
..................,J.
 (DINESH MAHESHWARI)
 NEW DELHI
FEBRUARY 05, 2020
12
ITEM NO.101 COURT NO.7 SECTION IV-A
 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(s). 10680-10683/2011
M/S HIGH RANGE COFFEE CURING PVT.LTD. Appellant(s)
 VERSUS
THE STATE OF KARNATAKA & ORS. Respondent(s)
WITH
C.A. No. 10684/2011 (IV-A)
Date : 05-02-2020 These appeals were called on for hearing today.
CORAM :
 HON'BLE MR. JUSTICE A.M. KHANWILKAR
 HON'BLE MR. JUSTICE DINESH MAHESHWARI
For Appellant(s) Mr. Yashraj Singh Deora, Adv.
Ms. Shivangi Sud, Adv.
Ms. Sonal Mashankar, Adv.
 For M/S. Mitter & Mitter Co., AOR

For Respondent(s) Mr. Basava prabhu S. Patil, Sr. Adv.
 Mr. V. N. Raghupathy, AOR
Mr. Manendra Pal Gupta, Adv.
Ms. Rachitha Hirenath, Adv.
Ms. Rudrali Patil, Adv.
 Mr. Joseph Aristotle S., AOR
 Ms. Radha Rangaswamy, AOR

 UPON hearing the counsel the Court made the following
 O R D E R
The appeals are dismissed and all pending
applications are also disposed of in terms of
the signed reportable order.
(NEETU KHAJURIA)
COURT MASTER
(VIDYA NEGI)
COURT MASTER
(Signed reportable order is placed on the file.)

whether the service rendered by the petitioners in the Supreme Court Legal Aid Committee and Supreme Court Legal Services Committee prior to the promulgation of the Supreme Court Legal Services Committee Rules, 2000 is to be counted while calculating their qualifying service for determination of pension. ? The Union of India has raised a two­fold submission. It is first submitted that the service of the petitioners rendered prior to 03.07.2000 cannot be taken into consideration while quantifying the qualifying service or determining their retiral benefits. It is secondly contended that this plea could have been taken in the earlier writ petition and, in fact, such a plea was raised but finally the Court did not grant this relief and, therefore, they cannot file the second petition. From the facts narrated above, it is apparent that the Supreme Court Legal Aid Committee was created under administrative instructions of the Government. Thereafter, the Legal Services Authorities Act, 1987 came into force. The services of the officers and employees were governed by Rule 3A and after 2000, they are governed by the Supreme Court Legal Services Committee Regulations, 2000. They have been rendering service uninterruptedly as employees of the Supreme Court Legal Services Committee and no distinction can be made between the service prior to 03.07.2000 and the service rendered thereafter. The petitioners have been regular employees of the Supreme Court Legal Services Committee and their entire service must be counted for determining their pension and other retiral benefits. This entire service is to be treated as their qualifying service in accordance with the Rules. As far as the second submission made on behalf of the Union of India is concerned, we have carefully gone through the earlier order and the writ petition. Though it is correct that in the writ petition there was a general claim to grant all the benefits under Rule 6 which would include retiral benefits but it appears that the Court did not go into the same. There is no rejection of the plea and as such we are of the considered view that this petition is maintainable and cannot be rejected on this hyper­technical ground. In relation to applicability of Order II Rule 2 of the Civil Procedure Code, 1908 this Court has held in Devendra Pratap Narain Rai Sharma v. State of Uttar Pradesh and Others1 as follows: 1 AIR 1962 SC 1334 7 “12. …The bar of O.2 R. 2 of the Civil Procedure Code on which the High Court apparently relied may not apply to a petition for a high prerogative writ under Art. 226 of the Constitution, but the High Court having disallowed the claim of the appellant for salary prior to the date of the suit, we do not think that we would be justified in interfering with the exercise of its discretion by the High Court.” Placing reliance on the case of Devendra Pratap Narain Rai Sharma (supra), this Court in Gulabchand Chhotalal Parikh v. State of Gujarat2 in relation to Order II Rule 2 held as follows: “23. …By its very language, these provisions do not apply to the contents of a writ petition and consequently do not apply to the contents of a subsequent suit…” In view of the above, we allow the petition and direct that the entire service rendered by the petitioners in the Supreme Court Legal Aid Committee and the Supreme Court Legal Services Committee shall be treated as qualifying service for the purpose of pension and shall be taken into consideration for calculating their retiral benefits. Pending application(s), if any, stand(s) disposed of.

whether the service rendered   by   the   petitioners   in   the   Supreme   Court   Legal   Aid Committee and Supreme Court Legal Services Committee prior to the promulgation of the Supreme Court Legal Services Committee Rules, 2000 is to be counted while calculating their qualifying service for determination of pension.  ?

The Union of India has raised a two­fold submission.  It is first submitted that the service of the petitioners rendered prior to   03.07.2000   cannot   be   taken   into   consideration   while
quantifying   the   qualifying   service   or   determining   their   retiral benefits.  It is secondly contended that this plea could have been taken in the earlier writ petition and, in fact, such a plea was
raised   but   finally   the   Court   did   not   grant   this   relief   and, therefore, they cannot file the second petition.   From   the   facts   narrated   above,   it   is   apparent   that   the
Supreme   Court   Legal   Aid   Committee   was   created   under administrative instructions of the Government.   Thereafter, the Legal   Services   Authorities   Act,   1987   came   into   force.     The
services of the officers and employees were governed by Rule 3A and after 2000, they are governed by the Supreme Court Legal Services   Committee   Regulations,   2000.     They   have   been
rendering service uninterruptedly as employees of the Supreme Court Legal Services Committee and no distinction can be made between the service prior to 03.07.2000 and the service rendered
thereafter.   The petitioners have been regular employees of the Supreme Court Legal Services Committee and their entire service must be counted for determining their pension and other retiral
benefits.  This entire service is to be treated as their qualifying service in accordance with the Rules.  
 As far as the second submission made on behalf of the Union of India is concerned, we have carefully gone through the earlier order and the writ petition.  Though it is correct that in
the   writ   petition   there   was   a   general   claim   to   grant   all   the benefits under Rule 6 which would include retiral benefits but it appears that the Court did not go into the same.   There is no
rejection of the plea and as such we are of the considered view that this petition is maintainable and cannot be rejected on this hyper­technical ground.   In relation to applicability of Order II Rule 2 of the Civil Procedure Code, 1908 this Court has held in Devendra   Pratap   Narain   Rai   Sharma v. State   of   Uttar Pradesh and Others1  as follows: 1 AIR 1962 SC 1334 
7
“12. …The bar of O.2 R. 2 of the Civil Procedure Code on
which the High Court apparently relied may not apply to
a petition for a high prerogative writ under Art. 226 of the
Constitution, but the High Court having disallowed the
claim of the appellant for salary prior to the date of the
suit,   we   do   not   think   that   we   would   be   justified   in
interfering with the exercise of its discretion by the High
Court.”
Placing reliance on the case of  Devendra  Pratap  Narain
Rai   Sharma  (supra),   this   Court   in  Gulabchand   Chhotalal
Parikh v. State of Gujarat2
 in relation to Order II Rule 2 held as
follows:
“23. …By its very language, these provisions do not apply
to the contents of a writ petition and consequently do not
apply to the contents of a subsequent suit…”
 In view of the above, we allow the petition and direct that the entire service rendered by the petitioners in the Supreme Court   Legal   Aid   Committee   and   the   Supreme   Court   Legal Services Committee shall be treated as qualifying service for the purpose of pension and shall be taken into consideration for calculating their retiral benefits.   Pending application(s), if any,
stand(s)          disposed of.


NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO. 59 OF 2019
BRAHMA SINGH AND OTHERS  …PETITIONER(S)
Versus
UNION OF INDIA AND OTHERS       …RESPONDENT(S)
J U D G M E N T
DEEPAK GUPTA, J.
The short issue involved in this case is whether the service
rendered   by   the   petitioners   in   the   Supreme   Court   Legal   Aid
Committee and Supreme Court Legal Services Committee prior to
the promulgation of the Supreme Court Legal Services Committee
Rules, 2000 is to be counted while calculating their qualifying
service for determination of pension.  
2. The petitioners are serving and retired employees of the
Supreme Court Legal Services Committee in various capacities.
They claim that the entire service rendered by them should be
1
treated as qualifying service for the purpose of fixing the retiral
benefits.  The respondent no.1­Union of India has rejected their
claim on 11.09.2017 and 08.12.2017, leading to the filing of this
petition.  The case of the petitioners is that their claim is squarely
covered by the judgment already rendered in their favour in Writ
Petition (Civil) No.267 of 2008 wherein considering the effect of
the Rules which are now under consideration, their entire service
was taken into consideration for fixing the pay and allowances
and they were given complete benefit of Rule 6 of The Supreme
Court Legal Services Committee Rules,2000.   According to the
Union of India, the benefit can be given only from the date of
promulgation of the Rules and not prior to that.   Some of the
petitioners joined in the Supreme Court Legal Aid Committee as
far back as in 1981 and the service not taken into consideration
is more than 18 years and 8 months.
3. The Supreme Court Legal Aid Committee was constituted by
the Ministry of Law & Justice under executive instructions on
10.07.1981.   Para 7 of the said instructions provides that the
Supreme Court Legal Aid Committee shall be entitled to make
necessary arrangements for staff and other facilities necessary for
2
the discharge of its functions.   These instructions were issued
with the concurrence of the Ministry of Finance, Department of
Expenditure.  Therefore, the posts were sanctioned posts though
no rules were framed for filling up the same.  Pursuant to these
instructions,   the   petitioners   were   appointed   in   different
capacities in the Supreme Court Legal Aid Committee.  In 1987,
the Parliament enacted the Legal Services Authorities Act, 1987.
The   National   Legal   Services   Authority   was   constituted   under
Section 3.  Sub­section (5) and (6) of Section 3 provide that the
Central Authority can appoint officers and other employees.  The
appointment of such employees and their pay and allowances are
to be prescribed by the Central Government in consultation with
the  Chief Justice of  India.   Section  3A of  the Legal Services
Authorities   Act   provides   for   the   constitution   of   the   Supreme
Court Legal Services Committee and sub­section (5) and (6) are
identical to sub­section (5) and (6) of Section 3.  Rule 9 of The
National Legal Services Authority Rules, 1995 provides that the
conditions of service and salary and allowances of officers and
other employees of the Central Authority shall be at par with the
Central Government employees holding equivalent posts and it
further provides that in all matters like age of retirement, pay
3
and   allowances,  the  rules  applicable  to  the   employees  of  the
Central Government shall also apply to the employees of the
Central Authority.   The Central Authority framed the Supreme
Court   Legal   Services   Committee   Regulations,   1996   and
Regulations 3(1) and 3(2) thereof read as follows;
“3. General effect of vesting. – On and from the date of
commencement of these regulations, ­
(1)All the assets, liabilities, rights, title and interest of the
erstwhile   Supreme   Court   Legal   Aid   Committee   stand
transferred to, and vest in, Supreme Court Legal Services
Committee; 
3(2) The   staff,   who   have   been   serving   under   the
erstwhile Supreme Court Legal Aid Committee shall be
deemed   to   be   working   for   the   Supreme   Court   Legal
Services Committee;
xxx xxx xxx”
4. The Supreme Court Legal Services Committee Rules, 2000
were framed by the Central Government in consultation with the
Chief Justice of India and came into effect on 03.07.2000.  Rule 6
is relevant for our purpose and reads as follows:
“6.  The   conditions   of   service   and   the   salary   and
allowances  payable  to  the  officers  and  employees  of
the  Supreme  Court  Legal  Services  Committee  under
sub­section (6) of section 3A.­(1) The officers and other
employees   of   the   Supreme   Court   Legal   Services
Committee shall be entitled to draw pay and allowances
in the scale of pay indicated against each post in the
Schedule   to   these   rules   or   at   par   with   the   Central
Government employees holding equivalent posts.
4
(2)In   all   matters   like   age   of   retirement,   pay   and
allowances,   benefits   and   entitlements   and   disciplinary
matters, the officers and employees of the Supreme Court
Legal   Services   Committee   shall   be   governed   by   the
Central Government rules as are applicable to persons
holding equivalent posts.
(3)The officers and other employees of the Supreme Court
Legal Services Committee shall be entitled to such other
facilities and benefits as may be notified by the Central
Government from time to time.
Explanation.  –   The   words   “benefits”,   “allowances”,
“entitlements”, “facilities” occurring in these rules shall
be   deemed   to   include,   the   entitlement   to   gratuity,
provident fund, housing, medical benefits, pension, group
insurance,   and   all   other   benefits   as   are   available   to
employees of the Central Government holding equivalent
posts.”
Sub­rule (2) of Rule 6 of the Supreme Court Legal Services
Committee Rules clearly states that in all matters like age of
retirement, pay and allowances and benefits on retirement the
officers   and   employees   of   the   Supreme   Court   Legal   Services
Committee shall be governed by the Central Government rules. 
5. Earlier, the petitioners had approached this Court by filing
Writ Petition (Civil) No. 267 of 2008 whereby they had claimed
that they were entitled to pay and allowances and other benefits
under Rule 6 quoted hereinabove.  That writ petition was allowed
and the respondents were directed to give full benefit of Rule 6 of
the Supreme Court Legal Services Committee Rules by fixing the
pay and allowances of the petitioners and other similarly situated
5
employees in the pay scales specified in the Schedule appended
to the Rules or at par with the Central Government employees
holding equivalent posts.  They were also directed to pay arrears
from the date of promulgation of the Rules i.e. 03.07.2000. 
6. The Union of India has raised a two­fold submission.  It is
first submitted that the service of the petitioners rendered prior
to   03.07.2000   cannot   be   taken   into   consideration   while
quantifying   the   qualifying   service   or   determining   their   retiral
benefits.  It is secondly contended that this plea could have been
taken in the earlier writ petition and, in fact, such a plea was
raised   but   finally   the   Court   did   not   grant   this   relief   and,
therefore, they cannot file the second petition.  
7. From   the   facts   narrated   above,   it   is   apparent   that   the
Supreme   Court   Legal   Aid   Committee   was   created   under
administrative instructions of the Government.   Thereafter, the
Legal   Services   Authorities   Act,   1987   came   into   force.     The
services of the officers and employees were governed by Rule 3A
and after 2000, they are governed by the Supreme Court Legal
Services   Committee   Regulations,   2000.     They   have   been
rendering service uninterruptedly as employees of the Supreme
6
Court Legal Services Committee and no distinction can be made
between the service prior to 03.07.2000 and the service rendered
thereafter.   The petitioners have been regular employees of the
Supreme Court Legal Services Committee and their entire service
must be counted for determining their pension and other retiral
benefits.  This entire service is to be treated as their qualifying
service in accordance with the Rules.  
8. As far as the second submission made on behalf of the
Union of India is concerned, we have carefully gone through the
earlier order and the writ petition.  Though it is correct that in
the   writ   petition   there   was   a   general   claim   to   grant   all   the
benefits under Rule 6 which would include retiral benefits but it
appears that the Court did not go into the same.   There is no
rejection of the plea and as such we are of the considered view
that this petition is maintainable and cannot be rejected on this
hyper­technical ground.   In relation to applicability of Order II
Rule 2 of the Civil Procedure Code, 1908 this Court has held in
Devendra   Pratap   Narain   Rai   Sharma v. State   of   Uttar
Pradesh and Others1
 as follows:
1 AIR 1962 SC 1334 
7
“12. …The bar of O.2 R. 2 of the Civil Procedure Code on
which the High Court apparently relied may not apply to
a petition for a high prerogative writ under Art. 226 of the
Constitution, but the High Court having disallowed the
claim of the appellant for salary prior to the date of the
suit,   we   do   not   think   that   we   would   be   justified   in
interfering with the exercise of its discretion by the High
Court.”
Placing reliance on the case of  Devendra  Pratap  Narain
Rai   Sharma  (supra),   this   Court   in  Gulabchand   Chhotalal
Parikh v. State of Gujarat2
 in relation to Order II Rule 2 held as
follows:
“23. …By its very language, these provisions do not apply
to the contents of a writ petition and consequently do not
apply to the contents of a subsequent suit…”
9. In view of the above, we allow the petition and direct that
the entire service rendered by the petitioners in the Supreme
Court   Legal   Aid   Committee   and   the   Supreme   Court   Legal
Services Committee shall be treated as qualifying service for the
purpose of pension and shall be taken into consideration for
calculating their retiral benefits.   Pending application(s), if any,
stand(s)          disposed of.
………………………………..J.
(L. Nageswara Rao)
2 AIR 1965 SC 1153
8
…………………………………J.
(Deepak Gupta)
New Delhi
February 05, 2020
9

Assumption and Presumtions carries no value = where the defendant No.2 had contested the suit and had put forth the contention that he was a bonafide purchaser without notice and through his evidence had deposed that he had no knowledge of agreement entered into between the defendant No.1 and defendant No.2, that aspect required appropriate consideration. However, the Courts below have on the contrary concluded that the defendants No.1 and 2 being of the same village, the defendant No.2 would have knowledge of the agreement entered into by the defendant No.1 in favour of the plaintiff. Such conclusion is only an assumption and there is no evidence with regard to the knowledge of defendant No.2 even if he was from the same village. In addition, the Lower Appellate Court has concluded that since the defendant No.1 has not caused appearance in spite of notice having been issued and he not being examined as a witness it could be gathered that there is connivance amongst the defendants to defeat the rights of the plaintiff. Such assumption is also not justified since the defendant No.2 had purchased the property for a consideration under a registered document and the defendant No.2 was also put in possession of the property. In that circumstance the defendant No.1 who had lost interest in the property, if had not chosen to appear and defend the suit the same cannot be a presumption of connivance in the absence of evidence to that effect. Wrong Appreciation of Evidence - Readiness and Willingness must be plead and must be proved even in the absence of defence = In the absence of denial by the defendant No.1, even if the payment of Rs.69,500/­ and the claim by the plaintiff of having gone to the office of Sub­Registrar on 15.06.2004 is accepted, the fact as to whether the plaintiff had notified the defendant No.1 about he being ready with the balance sale consideration and calling upon the plaintiff to appear before the Sub­Registrar and execute the Sale Deed was required to be proved. From among the documents produced and marked as Exhibit P1 to P9 there is no document to that effect, more particularly to indicate the availability of the balance sale consideration as on 15.06.2004 and as on the date of filing the suit. Despite the same, merely based on the oral testimony of PW1, the Courts below have accepted the case put forth by the plaintiff to be ready and willing to complete the transaction. Instead of arriving at an appropriate conclusion on that aspect, the Trial Court while answering the issues No.1 and 2 has concluded that the amount of sale consideration has already been paid and the fact that the Civil Suit has been filed by the plaintiff are sufficient to establish that the plaintiff remained ready and willing to perform his part of the contract. On the other hand, it is noticed that what had been paid as on the date of filing the suit was only the earnest money and the balance amount was deposited only on 03.08.2007 after the suit was decreed at the first instance on 14.06.2007 and not as on the date of filing the suit. Hence the concurrent conclusion reached by all the three Courts is an apparent error, the correction of which is necessary. It is no doubt true that as on the date of decision for the second time after restoration, the amount had been deposited which is not the same as having deposited or paid prior to or at the time of filing the suit. Even if the amount had been deposited as on the date of filing the suit, the readiness and willingness with possession of the sale consideration as on 15.06.2004 was necessary to be proved, which has not been done. Hence, in our opinion the Courts below have not appropriately considered this aspect of the matter.

Assumption and Presumtions carries no value 
= 
where the defendant No.2   had   contested   the   suit   and   had   put   forth   the contention   that   he   was   a   bonafide   purchaser   without notice and   through his evidence had deposed that he had no knowledge of agreement entered into between the defendant No.1 and defendant No.2,  that aspect required appropriate consideration.  

However, the Courts below have on the contrary concluded that the defendants No.1 and 2 being of the same village, the defendant No.2 would have knowledge  of the  agreement  entered into by the defendant   No.1   in   favour   of   the   plaintiff.     Such conclusion   is   only   an   assumption   and   there   is   no evidence with regard to the knowledge of defendant No.2
even if he was from the same village. 

In addition, the Lower   Appellate   Court   has   concluded   that   
since   the defendant No.1 has not caused appearance in spite of notice having been issued and he not being examined as a witness it could be gathered that there is connivance amongst   the   defendants   to   defeat   the   rights   of   the plaintiff.  
Such assumption is also not justified since the defendant   No.2   had   purchased   the   property   for   a consideration   under   a   registered   document   and   the defendant   No.2   was   also   put   in   possession   of   the property. 

In that circumstance the defendant No.1 who had lost interest in the property, if had not chosen to appear   and   defend   the   suit   the   same   cannot   be   a presumption of connivance in the absence of evidence to that effect.

Wrong Appreciation of Evidence - Readiness and Willingness must be plead and must be proved even in the absence of defence 
=
In the absence   of   denial   by   the   defendant   No.1,   even   if   the payment of Rs.69,500/­ and the claim by the plaintiff of having gone to the office of Sub­Registrar on 15.06.2004 is accepted,   the  fact  as to  whether the plaintiff had notified the defendant No.1 about he being ready with the balance sale consideration and calling upon the plaintiff to appear before the Sub­Registrar and execute the Sale Deed   was   required   to   be   proved.     From   among   the documents produced and marked as Exhibit P1 to P9 there is no document to that effect, more particularly to indicate the availability of the balance sale consideration as on 15.06.2004 and as on the date of filing the suit.
Despite the same, merely based on the oral testimony of PW1, the Courts below have accepted the case put forth by the plaintiff to be ready and willing to complete the transaction.

Instead of arriving at an appropriate conclusion on that aspect, the Trial Court while answering the issues No.1   and   2   has   concluded   that   the   amount   of   sale consideration has already been paid and the fact that the Civil Suit has been filed by the plaintiff are sufficient to establish that the plaintiff remained ready and willing to perform his part of the contract.  
On the other hand, it is noticed that what had been paid as on the date of filing the suit was only the earnest money and the balance amount was deposited only on 03.08.2007 after the suit was decreed at the first instance on 14.06.2007 and not as on the date of filing the suit.   

Hence the concurrent conclusion reached by all the three Courts is an apparent error, the correction of which is necessary.  

It is no doubt true that as on the date of decision for the second time after restoration, the amount had been deposited which is not the same as having deposited or paid prior to or at the time of filing the suit. Even if the amount had been deposited as on the date of filing the suit, the readiness and willingness with possession of the sale consideration as on 15.06.2004 was necessary to be proved, which has not been done.  
Hence, in our opinion the Courts below have   not  appropriately  considered   this   aspect   of  the matter.  


REPORTABLE
   IN THE SUPREME COURT OF INDIA
   CIVIL APPELLATE JURISDICTION
   CIVIL APPEAL NO.       760      OF 2020
   (Arising out of SLP (Civil) No.10949 of 2019)
Sukhwinder Singh                 .…Appellant(s)
Versus
Jagroop Singh & Anr.           ….  Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
       
       Leave granted.   
2.   The appellant herein was the defendant No.2 in Case
No.915 of 16.11.2004/17.04.2015.  The respondent No.1
herein was the plaintiff in the suit.  The respondent No.2
herein was the defendant No.1 therein.  The parties will
be referred to in the rank assigned to them in the suit for
the   purpose  of   convenience   and   clarity.    The  plaintiff
instituted the suit seeking for decree of possession by
way   of   specific   performance   of   the   Agreement   of   Sale
Page 1 of 17
dated 03.01.2004 executed by defendant No.1 in favour
of   the   plaintiff   agreeing   to   sell   the   land   measuring   3
Kanals   4   Marlas   comprised   of   Khewat   No.36/35
Khatauni No.91, Rect. No.63 Killa No.2/2 (3­4), situated
in village Dulla Singh Wala, Tehsil and District Ferozpur.
3. The case of the plaintiff was that the property was
agreed   to   be   sold   for   the   total   consideration   of
Rs.1,40,000/­.   Towards the said amount the plaintiff
had paid the sum of Rs.69,500/­ as earnest money.  The
plaintiff had further prayed in the suit to set aside the
Sale Deed dated 11.06.2004 executed by the defendant
No.1 in favour of the defendant No.2 since according to
the plaintiff the same was null and void and did not bind
the plaintiff.  In the alternative, the plaintiff had sought
for a decree to recover a sum of Rs.1,40,000/­ of which
Rs.69,500/­ had been paid as earnest money while the
remaining sum of Rs.70,500/­ was sought as damages.
The defendants at the first instance had failed to appear
and contest the suit.  Accordingly, the Trial Court by its
judgment dated 14.06.2007 had decreed the suit. 
Page 2 of 17
4. Though the defendant No.1 did not make out any
grievance   thereafter,   the   defendant   No.2   who   was   the
purchaser of the property filed a petition under Order 9
Rule 13 of the Civil Procedure Code in Misc. Application
No.46 of 23.02.2011 seeking that the ex parte decree be
set   aside   and   the   suit   be   restored   for   consideration.
Since   the   said   petition   was   filed   with   delay,   an
application under Section 5 of the Limitation Act was
filed   seeking   condonation   of   delay.     The   Trial   Court
having considered the same through its decision dated
07.08.2012   dismissed   the   application   seeking
condonation   of  delay,   consequently   the   petition   under
Order   9   Rule   13   of   Civil   Procedure   Code   was   also
dismissed as barred by Limitation.  The defendant No.2
claiming   to   be   aggrieved   preferred   Civil   Revision
No.5332/2012 (O&M) before the High Court of Punjab
and   Haryana   at   Chandigarh.     In   the   said   Revision
Petition filed under Section 115 of Civil Procedure Code
read with Article 227 of the Constitution of India, the
High Court had concurred with the decision of the Trial
Court and dismissed the Revision Petition through its
Page 3 of 17
decision dated 12.09.2012.     The defendant No.2 had
carried   the   same   before   this   Court   in   Civil   Appeal
No.1406/2015.  This Court on taking into consideration
that the defendant No.2 who was the appellant in the
said  Civil   Appeal   is  to   be  provided  an  opportunity  to
contest the suit, had allowed the appeal by order dated
02.02.2015 subject to payment of Rs.1,50,000/­ as cost.
Leave to file the written statement in the suit was also
granted.   Pursuant thereto the defendant No.2 having
paid the cost, filed the written statement and the suit was
proceeded in accordance with law. Pursuant thereto the
impugned   judgments   are   passed   which   are   assailed
herein.
5.  Mr.   Rahul   Gupta,   the   learned   counsel   for   the
appellant   contends   that   the   defendant   No.2   is   the
bonafide   purchaser   without   notice   of   the   alleged
agreement between the plaintiff and defendant No.1.  He
contends that the entire transaction was entered into in a
bonafide   manner   and   the   Sale   Deed   having   been
registered, the defendant No.2 was put in possession of
Page 4 of 17
the suit schedule property as far back as on 11.06.2004.
Nearly 16 years have passed by and the defendant No.2
has carried out considerable improvement to the property
and is residing in the house constructed therein.  In that
view,   at   this   juncture   if   the   specific   performance   as
sought by the plaintiff is ordered, greater hardship will be
caused to the defendant No.2.  It is pointed out that the
plaintiff had made the alternate prayer for refund of the
earnest money and damages which if considered would
serve the ends of justice.  The learned counsel contends
that even to secure leave to file the written statement and
defend the suit the defendant No.2 has already parted
with the sum of Rs.1,50,000/­ in addition to the sale
consideration that was paid to defendant No.1.  In that
circumstance, the compensation if any, is a matter to be
considered   by   this   Court   as   the   grant   of   specific
performance   is   not   a   rule   and   this   Court   has   the
discretion to decline specific performance in view of the
provisions   contained   under   Section   20   of   the   Specific
Relief   Act.     It   is   also   his   contention   that   though   the
defendant No.1 has not contested the suit, there was an
Page 5 of 17
obligation on the plaintiff to establish his case which has
not been effectively done by proving the readiness and
willingness.     The   learned   counsel   would   contend   that
though   all   the   three   Courts   have   held   against   the
defendants, the non­consideration of the relevant facts
would amount to a concurrent error committed by the
Courts.  It is, therefore, contended that the judgment and
decree   be   set   aside   and   the   right   accrued   to   the
defendant No.2 under the Sale Deed dated 11.06.2004 be
protected.
6.     Shri   Mahendra   Kumar,   learned   counsel   for   the
plaintiff/respondent   No.1   would   seek   to   sustain   the
judgment passed by the Courts below.   It is contended
that all the three Courts have concurrently held against
the   defendants   and   the   reversal   of   the   same   is   not
warranted.   It is his case that the plaintiff had entered
into an agreement of sale and had also paid the part sale
consideration   of   Rs.69,500/­.     The   suit   at   the   first
instance was decreed on 14.06.2007 and the plaintiff had
pursuant   to   the   decree   deposited   the   balance   sale
Page 6 of 17
consideration of Rs.70,500/­ on 03.08.2007.  The learned
counsel contends that though the date for execution of
the Sale Deed was stipulated as 15.06.2004, the Sale
Deed was executed by the defendant No.1 in favour of
defendant No.2 on 11.06.2004 so as to defeat the right of
the  plaintiff.     It is  contended that  the  defendant   had
connived with each other in that regard and, therefore,
the same cannot be considered as a bonafide transaction.
The   learned   counsel   further   contends   that   though   an
alternate prayer was made in the suit for the payment of
damages as indicated therein, the property in question is
highly valuable and as such the plaintiff should have the
benefit   of   the   appreciation   as   well.     It   is,   therefore,
contended that the appeal is liable to be dismissed.
7. In   the   above   background,   it   is   seen   that   the
contention   of   the   plaintiff   in   the   suit   was   that   the
defendant   No.1   had   agreed   to   sell   the   suit   schedule
property through the Agreement dated 03.01.2004 and
the plaintiff had paid a sum of Rs.50,000/­ on the said
date and a further sum of Rs.19,500/­ on 29.02.2004.
Page 7 of 17
Thus, in all a sum of Rs.69,500/­ was paid as earnest
money.   The   date   for   execution   of   the   Sale   Deed   was
stipulated as 15.06.2004 on which date the balance sale
consideration of Rs.70,500/­ was to be paid.  The plaintiff
contended that he was ready and willing to complete the
transaction and as such on 15.06.2004 i.e. the stipulated
date, the plaintiff appeared in the office of Sub­Registrar
with the balance sale consideration and other expenses.
According to the plaintiff the defendant did not turn up
but the plaintiff got his presence marked by moving an
application.  It is only subsequently the plaintiff came to
know that the defendant No.1 had executed a Sale Deed
dated   11.06.2004   in   favour   of   the   defendant   No.2   in
respect of the very suit property.  It is in that light the
plaintiff had sought further relief as noted above. 
8.  The   defendant   No.2   who   had   availed   the
opportunity   granted   by   this   Court   and   filed   written
statement on payment of cost had denied the execution of
the agreement to sell and the receipt of earnest money.
The   defendant   No.2   relying   on   the   Sale   Deed   dated
Page 8 of 17
11.06.2004   contended   that   having   purchased   the
property he is in possession and enjoyment of the same.
The defendant No.2, therefore, sought for dismissal of the
suit.  The Trial Court framed as many as seven issues for
its consideration based on the pleadings.   The plaintiff
examined   himself   as   PW1   and   also   examined   the
witnesses as PW2 to PW4.  The documents at Exhibits P1
to   P9   were   marked.     The   defendant   No.2   examined
himself as DW1 and examined two witnesses as DW2 and
DW3.  The Trial Court with reference to the said evidence
has decreed the suit.  The Lower Appellate Court has reappreciated the material on record and concurred with
the Trial Court.  The High Court though was examining
the Second Appeal where limited scope for reappreciation
of the evidence is available, it is noticed that the High
Court has not even adverted to the basic requirements to
arrive at its conclusion.  Be that as it may, considering
that the suit in question was filed seeking for specific
performance, the consideration to that effect as made by
the   Trial   Court   and   endorsed   by   the   Lower   Appellate
Page 9 of 17
Court as also the High Court will have to be noticed
cumulatively. 
9. The suit being the one for specific performance of
the   contract   on   payment   of   the   balance   sale
consideration, the readiness and willingness was required
to be proved by the plaintiff and was to be considered by
the Courts below as a basic requirement if a decree for
specific performance is to be granted.  In the instant case
though the defendant No.2 had denied the agreement as
also the receipt of the earnest money, the same would not
be   of   consequence   as   the   agreement   claimed   by   the
plaintiff is with the defendant No.1 and the contention of
the defendant No.2 to deny the same is without personal
knowledge on that aspect.  However, even in the absence
of the defence put forth, the plaintiff was required to
prove his readiness and willingness and that aspect of
the matter was to be considered by the Courts below.  In
the present case though the plaintiff examined himself as
PW1, as also PW2 and PW3, the document writer, and
the witness to the agreement who stated with regard to
Page 10 of 17
the execution of the agreement, the evidence to prove the
readiness and willingness with regard to the resources to
pay the balance sale consideration is insufficient.  In the
absence   of   denial   by   the   defendant   No.1,   even   if   the
payment of Rs.69,500/­ and the claim by the plaintiff of
having gone to the office of Sub­Registrar on 15.06.2004
is accepted,   the  fact  as to  whether the plaintiff had
notified the defendant No.1 about he being ready with the
balance sale consideration and calling upon the plaintiff
to appear before the Sub­Registrar and execute the Sale
Deed   was   required   to   be   proved.     From   among   the
documents produced and marked as Exhibit P1 to P9
there is no document to that effect, more particularly to
indicate the availability of the balance sale consideration
as on 15.06.2004 and as on the date of filing the suit.
Despite the same, merely based on the oral testimony of
PW1, the Courts below have accepted the case put forth
by the plaintiff to be ready and willing to complete the
transaction.
Page 11 of 17
10. Instead of arriving at an appropriate conclusion on
that aspect, the Trial Court while answering the issues
No.1   and   2   has   concluded   that   the   amount   of   sale
consideration has already been paid and the fact that the
Civil Suit has been filed by the plaintiff are sufficient to
establish that the plaintiff remained ready and willing to
perform his part of the contract.  On the other hand, it is
noticed that what had been paid as on the date of filing
the suit was only the earnest money and the balance
amount was deposited only on 03.08.2007 after the suit
was decreed at the first instance on 14.06.2007 and not
as on the date of filing the suit.   Hence the concurrent
conclusion reached by all the three Courts is an apparent
error, the correction of which is necessary.  It is no doubt
true that as on the date of decision for the second time
after restoration, the amount had been deposited which
is not the same as having deposited or paid prior to or at
the time of filing the suit. Even if the amount had been
deposited as on the date of filing the suit, the readiness
and willingness with possession of the sale consideration
as on 15.06.2004 was necessary to be proved, which has
Page 12 of 17
not been done.  Hence, in our opinion the Courts below
have   not  appropriately   considered   this   aspect   of   the
matter.  
11. Further,   in a circumstance where the defendant
No.2   had  contested   the   suit   and   had   put   forth   the
contention  that   he   was   a   bonafide   purchaser   without
notice and  through his evidence had deposed that he
had no knowledge of agreement entered into between the
defendant No.1 and defendant No.2,  that aspect required
appropriate consideration.   However, the Courts below
have on the contrary concluded that the defendants No.1
and 2 being of the same village, the defendant No.2 would
have knowledge  of the  agreement  entered into by the
defendant   No.1   in   favour   of   the   plaintiff.     Such
conclusion   is   only   an   assumption   and   there   is   no
evidence with regard to the knowledge of defendant No.2
even if he was from the same village.   In addition, the
Lower   Appellate   Court   has   concluded   that   since   the
defendant No.1 has not caused appearance in spite of
notice having been issued and he not being examined as
Page 13 of 17
a witness it could be gathered that there is connivance
amongst   the   defendants   to   defeat   the   rights   of   the
plaintiff.  Such assumption is also not justified since the
defendant   No.2   had   purchased   the   property   for   a
consideration   under   a   registered   document   and   the
defendant   No.2   was   also   put   in   possession   of   the
property.  In that circumstance the defendant No.1 who
had lost interest in the property, if had not chosen to
appear   and   defend   the   suit   the   same   cannot   be   a
presumption of connivance in the absence of evidence to
that effect.
12.  In the background of the above consideration, the
plaintiff in any event was not entitled to a decree for
specific   performance   and   possession   of   the   property
against the defendant  No.1.   In the  circumstance the
declaration of the Sale Deed dated 11.06.2004 executed
by the defendant No.1 in favour of the defendant No.2 to
term the same as null and void as claimed by the plaintiff
also did not arise.   Despite the said position what is
necessary to be taken note is that the sale in favour of
Page 14 of 17
the defendant No.2 was on 11.06.2004 i.e. subsequent to
the date of the suit agreement dated 03.01.2004.  Despite
holding that the defendant No.2 is a bonafide purchaser,
what cannot be lost sight is that the defendant No.1 had
received a sum of Rs.69,500/­ from the plaintiff as far
back as on 03.01.2004.  That apart if the transaction was
concluded at that stage the plaintiff would have been
entitled   to   the   benefit   of   the   land.     Even   as   per   the
ground at (Para x) raised by the defendant No.2 in this
appeal,   it   would   indicate   that   there   has   been
considerable appreciation in the market price.  Though in
the   normal   circumstance   the   return   of   the   advance
received and the compensation for denial of the property
was to  be paid by the  defendant  No.1, as  noted,  the
defendant No.1 having lost interest in the property has
not appeared in the instant proceedings nor is there any
material   to   indicate   that   he   has   benefited   from   the
appreciation   since   even   as   per   the   contention   of   the
plaintiff he has sold the property for a lesser price.   In
that situation the plaintiff cannot be left ‘high and dry’. If
that   be   the   position   the   defendant   No.2   who   has
Page 15 of 17
benefited   from   the   property   will   have   to   repay   the
advance   and   compensate   the   plaintiff   in   the   peculiar
facts   of   the   instant   case.   In   that   circumstance   the
defendant No.2 (the appellant herein) is required to be
directed to pay a sum of Rs.3,50,000/­ only which is
inclusive of the advance amount of Rs.69,500/­ to the
plaintiff (the respondent No.1 herein) in full quit of all
claims. The said amount is also to be directed to be paid
by the defendant No.2 to the plaintiff within a period of
three   months   failing   which   the   same   should   carry
interest at 12% per annum till payment. The plaintiff
should   also   be   entitled   to   withdraw   the   amount   of
Rs.70,500/­ stated to have been deposited by him before
the Trial Court.
13. In view of the above, the following order:
i) The appeal is allowed in part. The judgment
and decree dated 24.07.2015 passed in Case No.
915 of 16.11.2004/17.04.2015 and affirmed by the
Lower Appellate Court as also the High Court to
the   extent   of   granting   the   relief   of   specific
performance is set aside.
Page 16 of 17
ii) The judgment and decree dated 17.04.2015 in
Case   No.   915   shall   stand   modified,   and   the
appellant ­ defendant No. 2 is directed to pay a
sum of Rs.3,50,000/­ only to the plaintiff within
three months.
iii) If   the   amount   is   not   paid   within   the   time
stipulated the same shall carry interest at 12% per
annum thereafter.
iv) The plaintiff shall be entitled to withdraw the
amount of Rs.70,500/­ lying in deposit before the
Trial Court with the interest accrued, if any.
v)     In the facts and circumstances, the parties to
bear their own costs.
Pending application, if any, shall stand disposed of.
……………………….J.
(R. BANUMATHI)
……………………….J.
                                              (A.S. BOPANNA)
New Delhi,
January 28, 2020
Page 17 of 17