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Indal Kumar Kushwaha & Another v. Rajesh Kumar Gupta & Others - SECOND APPEAL No. - 20 of 1996  RD-AH 15135 (7 September 2007)
HIGH COURT OF JUDICATURE AT ALLAHABAD
SECOND APPEAL NO. 20 OF 1996
Indal Kumar Kushwaha & another ..........Defendants/Appellants
Rajesh Kumar Gupta & others ........... Plaintiffs/Respondents
Hon'ble Pankaj Mithal, J.
This second appeal has been preferred by the defendants of Original No. 210 of 1984 (Achchey Lal Gupta and others Vs. Indra Kumar Kushwaha and others) after the suit for specific performance of the agreement to sell had been decreed against them by the two Courts below.
The defendants Indra Kumar Kushwaha and Raja Ram Kushwaha were undisputedly the Bhoomidhars with transferable rights in possession of the following plots of land situate in Tafsil Jail Waka Mauja Banakteechak, Tappa Kasba, Pargana Haweli, Tehsil Sadar, District Gorakhpur :
Arazi No. Rakba
Total 90 Desimal
In the suit instituted by plaintiffs it is said that the aforesaid two defendants were in need of money and, therefore, they executed an agreement to sell the aforesaid land on 7.7.1973 in favour of the Shiv Poojan and Achche Lal Gupta for a total sale consideration of Rs. 70,000/-, out of which Rs. 10,000/- was paid in advance and the balance of Rs. 60,000/- was payable at the time of the execution of the sale deed. The sale deed could not be executed as there was a ban on the registration of the sale deeds in U.P. at the relevant time and, therefore, it was stipulated that the sale deed would be executed within three months of the lifting of the ban. The aforesaid Shiv Poojan Gupta died sometime in July 1976. Thereafter, his successors and Achche Lal Gupta by a registered notice dated 13/14/2/1984 called upon the defendants to execute the sale deed in pursuance of the agreement. The said notice was served upon the two defendants on 15.2.1984 and 17.2.1984 respectively. The plaintiffs-respondents after the aforesaid notice approached the defendants-appellants in the first week of March 1984 along with the balance sale consideration for the execution of the sale deed but the defendants-appellants paid no heed. The plaintiffs-respondents as well as their predecessor in the interest were always ready and willing to perform their part of the contract but the defendants-appellants failed to execute the sale deed. Therefore, the suit for specific performance.
The defendants-appellants contested the suit by filing a joint written statement accepting the execution of the agreement to sell dated 7.7.1973 and having received a sum of Rs. 10,000/- as earnest money but rest of the plaint allegations were denied. In the additional pleas it was stated as the Government was contemplating to bring out a legislation providing for the ceiling and regulation of urban land, a ban on the registration of the sale deeds was imposed. Therefore, on account of the said ban it was agreed that the sale deed would be got executed within three months of the lifting of the ban. The ban was only up to 31.12.1975 and it ceased to operate thereafter. However, the plaintiffs-respondents or their predecessor in interest never came forward to perform their part of the contract and to get the sale deed executed as per the agreement. Accordingly, after three months of the lifting of the ban from 31.12.1975 the agreement lapsed and the defendants-appellants were set at liberty to transfer the land in favour of third party. There was no stipulation under the agreement that the defendants-appellants would have to take permission for the sale from any Government department. The suit for specific performance after expiry of more than 11 years of the agreement is not only barred by time but also inequitable and as such no decree of specific performance of the agreement is liable to be passed.
The parties adduced evidence. The suit was decreed vide judgment and order dated 12.12.1989 and the appeal was dismissed on 16.11.1995. Aggrieved by the decree of the specific performance so passed by the courts below, the defendants-appellants have preferred this second appeal.
At the admission stage, the following substantial questions of law were formulated :
1.Whether the suit was barred by time ?;
2.Whether the suit was barred by Section 16(c) of the Specific Relief Act ?; and
3.Whether the courts below erred in granting the relief of specific performance ignoring the provisions of Section 20 of the Specific Relief Act ?
During the pendency of this appeal the defendant-appellant No. 1 Indra Kumar Kushwaha died and his heirs and legal representatives were substituted vide courts' order dated 18.6.2006.
I have heard Sri H.N. Singh, assisted by Sri M.K. Nigam and Sri A.K. Singh, learned counsel appearing on behalf of the appellants and Sri T.P. Singh, Senior Advocate, assisted by Sri Siddharth Singh for the respondents.
A perusal of the agreement to sell on record as paper No. 90-Ka makes it clear that the defendants-appellants had agreed to transfer the land on a total sale consideration of Rs.70,000/-. On account of the ban on the registration of the sale deeds a sum of Rs. 10,000/- only was paid in advance and the balance was agreed to be payable at the time of the execution/registration of the sale deed. It was specifically stipulated in the agreement that Shiv Poojan Gupta and Achchey Lal Gupta would get the sale deed executed within three months of the lifting of the ban on the registration of the sale deed otherwise the defendants-appellants would be at liberty to sell the land to any other person and the earnest money would stand forfeited. The relevant part of the agreement containing the above conditions is reproduced below:
"jftLV??h [kqyus ds rhu ekg ds vUnj Jh f'ko iwtu xqIrk o Jh vPNs yky xqIrk jftLV??h djk ysxsaA vU;Fkk ge viuh tehu fdlh vU; O;fDr ds gkFk cspus esa LorU= gksxsaA ,slh gkyr esa :i;k c;kuk okilh ds ftEesnkjh ge eqfdjku ij ugha gksxhA"
The agreement as such stipulated to get the sale deed executed within three months of the lifting of the ban. There was no condition for taking any permission from any department before the execution of the sale deed. Under the agreement no responsibility was fixed upon the defendants-appellants to take initiative to get the sale executed, once the ban was over. The intention was otherwise. The responsibility to act was upon the plaintiffs-respondents who wanted the sale deed.
Learned counsel for the appellant argued that the ban on the registration of the sale deed expired on 31.12.1975. The plaintiffs-respondents or their predecessor in interest took no steps and showed no initiative to perform their part of the contract so as to get the sale deed executed after that. Accordingly, as per the terms of the agreement the time stipulated for getting the sale expired on 31.3.1976 whereupon no right survived in favour of the plaintiff-respondents to get the sale deed executed. The silence on the part of the plaintiff respondents between 1.4.1976 till the date of notice i.e. 14.2.1984 itself establishes beyond any doubt that they were never ready and willing to perform their obligation under the contract and to get the sale deed executed. The courts below thus committed manifest error of law in decreeing the suit for specific performance and at the same time failed to exercise its discretion under Section 20 of the Specific Relief Act,1963. He also canvassed that the suit was patently barred by time and could not have been decreed.
In reply to the above argument Sri T.P. Singh, Senior Advocate submitted that the matter stands concluded by findings of fact, which have been concurrently recorded by the Courts below and therefore, neither the High Court has power to interfere in the second appeal nor the appeal has any substance.
All the substantial questions of law formulated at the time of admission of the appeal are interlinked and are dependent upon one another. Therefore, all of them are being dealt together.
The provisions of Section 16 and 20 of the Specific Relief Act,1963 (hereinafter referred to as an Act) are very relevant and material for adjudicating the above controversy. Section 16 of the Act in sub clause (c) provides that specific performance of the contract cannot be enforced in favour of the 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 according to the true construction of the agreement. At the same time Section 20 of the Act makes its discretionary upon the Court to grant or not to grant a decree for specific performance but the said discretion is exercisable on sound and reasonable judicial principles. Article 54 of the Limitation Act, 1963 which governs the filing of the suit for specific performance lays down the limitation for instituting such a suit to be three years from the date fixed for the performance or if no such date is fixed three years from the date when the performance of the agreement is refused.
The legal position that emerges from the above provisions is well settled. First, there has to be an averment and proof of continuous readiness and willingness on part of the plaintiff to perform his agreement. Secondly, the Court is not bound to decree every suit for specific performance even if there is an agreement and it is lawful to do so and the Court is vested with the power to exercise its discretion on equitable consideration for which conduct of the parties play an important role. Thirdly, the limitation for initiating a suit for specific performance is three years from the date fixed for the performance or where no such date is fixed from the date the performance was refuced.
The Supreme Court in JT 1995 (5) SC 553 N.P. Thirugnanam (D) by Lrs. Vs. Dr. R. Jagan Mohan Rao & Ors. laid down that relief of specific performance is discretionary in nature and continuous readiness and willingness is a condition precedent to grant such a relief. In other words, continuous readiness and willingness on the part of the plaintiff must be proved from the date of the agreement till the institution of the suit. In AIR 1987 SC 2328 Parakunnan Veetill Joseph's Son Mathew Vs. Nedumbara Kuruvila's Son and others, the Supreme Court has held that the Court is not bound to grant the relief of specific performance merely because it considers it lawful to do so but has to meticulously consider all the facts and circumstances and has to exercise discretion while granting or refusing the same. It is also the duty of the Court to see that the litigation should not be used as an instrument of oppression to have an unfair advantage. The same view has been expressed by the Supreme Court in JT 2002 (5) SC 357 Veluyudhan Sathyadas Vs. Govindan Dakshyani. It has been laid down that mere establishment of the agreement to sell is not sufficient to grant the relief for specific performance and the Court always has a discretion in this regard. In another case JT 1995 (3) SC 614 S.V.R. Mudaliar (dead) by Lrs. & Ors. Vs. Mrs. Rajabu F. Buhari (Dead) by Lrs. & Ors., the Supreme Court ruled that in exercising the discretionary power under Section 20 of the Act, the conduct of the parties is relevant and of utmost important.
It is an admitted position that that land in dispute involved in the present case is a Bhumidhari land. It has been described by the plaintiff himself in the plaint as Bhumidhari land. It has also been recorded as Bhumidhari land which means agricultural land. There are no pleadings or material on record to show that the said land or any part thereof has been declared to be non agricultural in nature under Section 143 of the U.P.Z.A. & L.R. Act. It is settled position that an agricultural land would continue to an agricultural in nature unless officially notified to be non agricultural in nature under Section 143 of the U.P.Z.A. & L.R. Act. Therefore, even though part of it may have been put to Abadi use, it shall remain to be an agricultural land in the absence of a notification under Section 143 of the U.P.Z.A. & L.R. Act.
My aforesaid view finds support from a decision of this Court reported in 2000(3) AWC 2587 Anirudha Kumar and another Vs. Chief Controlling Revenue Authority, U.P., Allahabad and another wherein the Court held that an agricultural land cannot be treated to be a residential plot until there is a declaration under Section 143 of the UPZA & LR Act.
Section 26 of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as Ceiling Act) stipulates for giving notice to the competent authority before transferring any 'vacant land' within the ceiling limit whereupon the competent authority would have the first option to purchase the same on behalf of the State Government. In other words, this is the provision which has been relied upon for obtaining permission of the competent authority before making any transfer of the 'vacant land' on the enforcement of the Ceiling Act. 'Vacant land' has been defined in Section 2 (q) of the Ceiling Act, which says 'vacant land' means land, not being land mainly used for the purpose of agriculture. Therefore, land used for agricultural purpose cannot be a 'vacant land'. In 1982 AWC 709 State of U.P. Vs. Satyabir Singh and another, the High Court has held that the land used for the purpose of agriculture as per the revenue entries cannot be said to be an urban or vacant land and, therefore, no application is required to be moved under Section 26 before transferring the same.
In view of the above facts and circumstances, the land in dispute being Bhoomidhari land recorded as such would remain to be an agricultural land on which the provisions of Section 26 of the Ceiling Act would not be applicable, even though a small part of it may have been in use as an Abadi land. Accordingly, the conclusion is safe that after the expiry of the ban on registration of the sale deeds w.e.f. 31.12.1975 there remained no rider or any clog upon the plaintiffs to get sale deed executed in accordance with the agreement to sell.
Undisputedly the ban on registration of the sale deeds was only upto 31.12.1975. Thereafter Urban Land (Ceiling and Regulation) Act was enforced w.e.f. 17.2.1976. The said Act vide Section 26 provided for obtaining permission from the competent authority before executing any sale deed in respect of 'vacant land' within the ceiling limit. Thus, between 1.1.1976 to 16.2.1976, there has neither any ban on the execution and registration of the sale deeds nor there was any statutory requirement for taking the permission from any competent authority for executing the sale deeds. It is also evident from the oral evidence on record that the plaintiff-respondents never took initiative during the above period to get the sale deed executed.
The evidence on record further establishes that even on the ceasation of ban and on the enforcement of the Ceiling Act w.e.f. 17.2.1976, the plaintiffs-respondents took no steps to get the sale deed executed at least till 13/14.2.1984 when for the first time a notice in writing was given calling upon the defendants-appellants to execute the sale deed. No request was ever made by them during this period for obtaining permission for sale if necessary in view of Section 26 of the Ceiling Act. Thus, they were totally oblivious of the agreement to sell in their favour and impliedly waived and gave up their rights under the agreement by their inaction and conduct.
Thus, the plaintiffs-respondents neither come forwarded between 1.1.1976 to 16.2.1976 nor thereafter to get the sale deed executed. It was for the first time on 13/14.2.1984 that a notice was given to the defendants-appellants to execute the sale deed. Accordingly, there was complete inaction or silence on part of the plaintiffs- respondents to perform their part of the contract so as to get the sale deed executed. Therefore, they cannot be regarded as persons who were continuously ready and willing to perform their part of the obligation. Moreover, inordinate delay in the institution of the suit i.e. after 11 years of the agreement is also sufficient in itself to disentitle them to the discretionary relief of specific performance.
The Supreme Court in AIR 1978 SC 537 Mrs. Sandhya Rani Sarkar Vs. Smt. Sudha Rani Debi, observed that in a suit for specific performance of contract for sale of immovable property it is incumbent upon the plaintiff to affirmatively establish that all throughout he/she was willing to perform his/her part of the contract and where there is in ordinate delay on part of the plaintiff to perform his/her part of the contract, the Courts would be perfectly justified in refusing the decree for specific performance. It means that even if the suit is within time, the relief of specific performance can be denied, if there is unexplained delay on part of the plaintiff in performing his part of the contract. In 1997 SC 1751 K. S. Vidyanadam and others Vs. Vairavan, the Supreme Court held that total inaction on part of the purchaser for two and half years amounted to delay which was sufficient enough to deny him the relief for specific performance. In this case the purchaser i.e. the plaintiff remained quiet from the date of the agreement till the date of issuing notice before instituting the suit and had not taken any steps to perform his part of the agreement. In the said situation, the Supreme Court held that even though time may not be the essence of the contract it would be inequitable to grant the relief of specific performance as delay has brought about a situation where it becomes inequitable to do so. In a similar situation, the Supreme Court in another case reported in AIR 1997 SC 2702 Tajram Vs. Patirambhan, refused to grant specific performance of an assessment in a suit instituted after a gap of 3 years of the agreement though the suit was brought within time on the last day of the limitation. In this case the plaintiff had remained passive for three years and did nothing for the completion of the contract.
The aforesaid authorities fully supports the case of the defendant-appellants. In the case at hand, the plaintiffs-respondents have remained dormant not only for two or three years but for more than 10 years. They have only advanced a meagre sum of Rs. 10,000/- as part of the sale consideration in the year 1973 and at least till March 1984 never cared to tender the balance amount of Rs. 60,000/-. The plaintiffs- respondents can not peg the value of land in this way and hold the defendants- respondents at ransom for the whole of the life from dealing with their land. Therefore, ex facie in the era of rising demand for land and increase in prices of immovable property it is highly inequitable to grant a decree of specific performance of the agreement of the year 1973 in a suit instituted in 1984.
Thus, in the light of the above discussions, I find that in the present case the plaintiffs-respondents have first of all failed to prove their continuous readiness and willingness to perform their part of the contract. They admittedly never come forward to get the sale deed executed immediately after lifting of the ban on 1.1.1976 till 16.2.1976 when the Urban Land (Ceiling & Regulation) Act, 1976 was enforced. Subsequently, there was a complete silence on their part to perform as per the agreement even thereafter i.e. from 17.2.1976 to 13/14.2.1984 as admittedly notice to execute the sale deed was given for the first time in 13/14.2.1984. During this period there was no positive step on their part. The plea that they waited for the defendants to obtain permission under section 26 of the Act and for the provision of permission being deleted is also not tenable. They had waited from February 1976 till February 1984 for the defendants-appellants to take permission i.e. for 8 years. There is no reason or explanation for such a long wait. The complete inaction on part of the plaintiffs-respondents to perform their part of the agreement during the above period of about 11 years alone is more than enough for refusing the relief of specific performance.
In view of the above discussion, the findings of the courts below on compliance of Section 16 (c ) of the Act are not only perverse and one sided but have been returned by applying incorrect principles of law. They are accordingly reversed. Both the Courts below while granting decree of specific performance have not adhered to the provisions of Section 20 of the Act. No reasons have been assigned for granting such a decree in such a belated instituted suit.
The submission that concurrent finding of fact cannot be disturbed in second appeal is not tenable under the facts and circumstances of the instant case. In JT 2001 (6) SC 591 Shri Hafazat Hussain Vs. Abdul Majeed, the Apex Court observed that it has been repeatedly pointed out by this Court that concurrent findings recorded by the trial court as well as the first appellate court on proper appreciation of the materials on record should not be disturbed by the High Court while exercising jurisdiction in second appeal, but at the same time, it is not an absolute rule to be applied universally and invariably since the exceptions to the same also were often indicated with equal importance by this Court. The instances are innumerable where despite such need and necessity warranting such interference, second appellate court mechanically declined to interfere, the matter has been relegated by this Court to the second appellate court to objectively deal with the claims of the parties keeping in view the parameters of consideration for interference under Section 100 C.P.C. In the instant appeal the courts below have overlooked the mandatory provision of Section 20 of the Act and at the same time misapplied the statutory provisions of the Ceiling Act. The findings on the issue of compliance of the Section 16(c) of the Act are also perverse. Therefore, the second appellate court is competent to interfere especially when the appeal raises substantial questions of law.
Since the substantial questions of law No. 2 and 3 as formulated at the admission of the appeal are sufficient to decide the appeal, I do not consider it necessary to dwell on the first substantial question of law with regard to suit being barred by time.
Accordingly the appeal is allowed. The judgment and orders passed by the Courts below dated 16.11.1995 passed in Civil Appeal No. 52 of 1992 (Indal Kumar and another Vs. Achchey Lal and others) and judgment and order dated 12.12.1989 passed in Original Suit No. 210 of 1984 (Achchey Lal Gupta and others Vs. Indal Kumar Kushwaha and others) and the consequential decree of specific performance of the agreement are set aside. The suit for specific performance is dismissed. No order as to costs.
Dt. 7th September 2007
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