Bombay High Court
Bhagwan S/O Vithuji Lonare vs Damodhar S/O Jairam Sao on 26 March, 2026
2026:BHC-NAG:5045
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
SECOND APPEAL NO. 07 OF 2016
Bhagwan S/o Vithuji Lonare (died)
Aged about 81 years, Occ : Retired,
R/o Opposite Sheetal Mangal
Karyalaya, Bachelor Road, Manas
Mandir Ward, Wardha,
Tah. & Distt. Wardha
Legal heirs of appellant :-
1) Vilas Bhagwan Lonare,
Aged about 62 years,
Occupation : Medical Practitioner, .. Appellant
R/o Near Jijamata High School, (Original Defendant)
Nalwadi, Wardha
2) Anil Bhagwan Lonare,
Aged about 57 years,
Occupation : Medical Practitioner,
R/o Near Priyadarshani College,
Rajnagar, New State Bank Colony,
Wardha
3) Madhuri Bhagwan Lonare,
Aged about 57 years,
Occupation : Service,
R/o Near Manas Mandir,
Batchelor road, Wardha
Versus
Damodhar S/o Jairam Sao,
Aged about 60 years, Occu : Retired,
R/o Plot No.82, Jaidurga Housing .. Respondent
Society Layout No.3, Manishnagar,
Somalwada, Nagpur
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Mr. Abhijeet Khare, Advocate for appellants.
Mr. Kotwal, Advocate for respondent.
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CORAM : ROHIT W. JOSHI, J.
RESERVED ON : 05.01.2026
PRONOUNCED ON : 26.03.2026
JUDGMENT
(1) Heard finally with the consent of the learned counsel
appearing for the parties.
(2) The present Second Appeal is filed by the original
defendant being aggrieved by concurrent decrees for specific
performance of contract passed against him. The suit property is a
piece of land bearing Plot No.41 (old Plot No.36) admeasuring 2400
sq.ft. in Survey No.14/2 Rajendra Nagar Layout, Village Jaitala, Tahsil
and District Nagpur. The defendant had entered into an agreement of
sale dated 24/10/2000 with respect to the suit property with the
plaintiff inter alia agreeing to sell the same for a consideration of
Rs.2,64,000/-. Out of the sale consideration, the plaintiff has paid an
amount of Rs.25,000/- to the defendant towards the earnest money on
the date of agreement vide Cheque drawn on Central Bank of India. It
was agreed between the parties that the balance sale consideration of
Rs.2,39,000/- was to be paid on the date of execution of the sale deed.
It was also agreed that the sale deed of the suit property would be
executed and registered on or before 31/01/2001. Execution of the
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agreement, receipt of earnest money of Rs.25000/- and other terms
and conditions of the agreement are not in dispute. The agreement of
sale dated 24/10/2000 is duly proved and marked as Exh.33. English
translation of three clauses which are relevant for the controversy
involved in the present appeal are reproduced herein below.
In the event, the purchaser does not get the sale deed
executed before 31/01/2001, this agreement shall be
deemed to be cancelled and the purchaser will not have
right to claim refund of earnest money.
The responsibility of making payment of Nazul Tax,
Corporation Tax and any other loan or tax with respect to
the aforesaid property will be on the vendor till date of sale
and thereafter the said responsibility will be of the
purchaser.
In the event it is not possible either for the seller or
purchaser to complete the sale transaction due to any
technical difficulty that may arise, the seller shall extend
the time for execution of the sale deed in writing.
(3) It is the case of the plaintiff that although he was ready
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and willing to complete the sale transaction before the stipulated date,
the defendant did not perform his part of contract, due to which the
sale transaction could not be completed. The plaintiff contends that he
had been to the office of concerned Sub Registrar at Nagpur for
registration of the sale deed dated 31/01/2001, however, the defendant
did not turn up.
(4) It will be pertinent to mention here that initially the
plaintiff had filed complaint before the District Consumer Forum
invoking the provisions of Consumer Protection Act, 1986, on
06/05/2001. The said complaint was allowed vide order dated
22/01/2002. The defendant challenged the said order by filing an
appeal which was allowed vide order dated 01/12/2005. The complaint
was dismissed on the issue of maintainability.
(5) Thereafter, the plaintiff filed a suit for specific
performance of contract against the defendant bearing Special Civil
Suit No.358/2006, which was renumbered as Regular Civil Suit
No.977/2012. The learned trial Court passed a decree for specific
performance of contract in favour of the plaintiff vide judgment and
decree dated 28/04/2014.
(6) Being aggrieved by the said decree for specific
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performance of contract, the defendant preferred an appeal being
Regular Civil Appeal No.255/2014. The appeal came to be dismissed
vide judgment and decree dated 02/09/2015. It will be pertinent to
mention here that the learned trial Court passed decree for specific
performance of contract thereby directing the plaintiff to pay an
amount of Rs.2,15,550/- to the defendant out of the outstanding sale
consideration of Rs.2,39,000/- on the ground that the plaintiff had
proved payment of sum of Rs.23,450/-, in addition to earnest amount,
Rs.11,000/- towards property tax, Rs.5250/- towards electricity
infrastructure charges and Rs.7200/- towards development charges.
The learned first appellate Court held that the payment of aforesaid
amount was not proved by the plaintiff and therefore, he was liable to
pay balance sale consideration of Rs.2,39,000/- for execution of sale
deed in his favour.
(7) Being aggrieved by these concurrent decrees, the present
Second Appeal is filed by the original defendant. The parties will be
referred as plaintiff and defendant in this judgment.
(8) Vide order dated 27/03/2019 the appeal came to be
admitted on following substantial questions of law :-
1. In the absence of relief seeking declaration that the
termination of the suit agreement is illegal, was the suit forPAGE 5 OF 55
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specific performance maintainable ?
2. Whether the courts below have applied the correct principle
of law in considering the prayer for specific performance ?
3. Whether the finding concurrently recorded that the plaintiff
was ready with consideration is based on “no evidence” ?
4. Whether the plaintiff was enitled to the benefit of Section 14
of the Indian Limitation Act ?
5. Whether the complaint preferred before the Consumer
Forum was a civil proceeding pending in a court ?
(9) At the outset it needs to be recorded that the learned
counsel for the appellant did not press the substantial questions of law
at Sr.No.4 and 5 which pertain to Section 14 of the Limitation Act, 1963
and the nature of the dispute before the Consumer Forum.
(10) Mr. Abhijeet Khare, learned counsel for the appellant
contends that the plaintiff had miserably failed to establish that he was
ready to perform his part of contract. He contends that whereas the
word willingness in Section 16(c) of the Specific Relief Act implies
desire, the word readiness refers to capacity of the plaintiff to perform
his part of contract. He contends that in order to establish readiness,
the plaintiff must essentially establish his financial capacity to make
payment of the sale consideration in terms of the agreement by
producing relevant documentary evidence. Mr.Khare, contends that
admittedly no documentary evidence in the form of bank account
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statement/ passbook or other record is produced to demonstrate
availability of funds as on 31/01/2001 i.e. date stipulated for execution
and registration of the sale deed.
(11) Mr. Khare, learned counsel for the appellant contends
that the learned Courts have committed manifest error of law in
answering the issue of readiness and willingness in favour of the
plaintiff merely by recording finding that the defendant had committed
breach of agreement. He contends that even if defendant is found to
be guilty of breach of agreement, decree for specific performance of
contract cannot be granted unless readiness and willingness is duly
established by the plaintiff. He has placed reliance in support of his
contention on the judgment of the Hon’ble Supreme Court in the case
of U.N.Krishnamurthy (since deceased) through LRs vs.
A.M.Krishnamurthy, reported in (2023) 11 SCC 775.
(12) He further placed reliance on judgment of the Hon’ble
Supreme Court in Subhash Agrawal vs. Mahendra reported in
2026 SCC OnLine SC 1 where the Hon’ble Supreme Court found that
although the defendant had failed to fulfill his contractual obligation
relating to mutation and conversion of land, the plaintiff had also failed
to prove readiness and willingness and in view of failure on the part of
plaintiff to prove readiness and willingness, relief of specific
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performance was denied.
(13) He contends that the findings on readiness and
willingness by the learned Courts are recorded in the absence of any
evidence and therefore, warrant interference having regard to the
limited scope of appeal under Section 100 of Code of Civil Procedure.
He contends that the learned Court should have drawn adverse
inference against plaintiff for not filing documentary evidence to
establish availability of funds.
(14) Mr. Khare further contends that the learned Court erred
in exercising discretion in granting relief of specific performance of the
contract, inasmuch as the sale transaction was to be completed on
31.01.2001 and the suit was filed in the year 2005 by which time, the
rates of property had increased tremendously and as such it was not
equitable to grant relief of specific performance to the plaintiff. Mr.
Khare, contends that the learned first appellate Court has erroneously
rejected the contention by holding that rise in price of the properties is
not factor to refuse relief of specific performance. To question the said
finding learned counsel placed reliance on the judgment of the Hon’ble
Supreme Court in the case of K.S. Vidyanandam and others vs.
Vairavan reported in 1997 (3) SCC 1.
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(15) He submits that the fact that a short time limit of three
months was stipulated for the execution and registration of the sale
deed would clearly imply that time was essence of the contract. His
contention is that the learned Courts have erred in law in granting
discretionary relief of specific performance although the suit was filed
after an inordinately long period of around 5 years and 3 months from
the date of stipulated for completing the sale transaction.
(16) He further contends that plaintiff could not make
payment for balance consideration and complete the sale transaction
before the stipulated date on 31/01/2001. According to him, the
consequence of failure is provided under the agreement itself and
accordingly notice of termination of contract was issued by the
defendant to the plaintiff.
(17) Placing reliance on the judgment of the Hon’ble Supreme
Court in the case of I.S.Sikandar (Dead) by LRs vs. K.Subramani
& others reported in 2013 (15) SCC 27 and R. Kundasamy (since
dead) & others vs. T.R.K.Sarawathy & another reported in 2024
SCC OnLine SC 3377, the learned counsel contended that the suit
itself was not maintainable in the absence of any challenge to the
notice for termination of agreement.
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(18) He further contends that plaintiff created false record
regarding the issuance of letter dated 08/02/2001, and 07/04/2001.
He contends that both these letters were allegedly issued Under Posting
Certificate. His contention is that certificate of posting is doubted by
the Hon’ble Supreme Court in the case of Shivkumar Vs. State of
Haryana, reported in (1994) 4 SCC 445 and Gadakh Yashwantrao
Kankarrao Vs. Balasaheb Vikhe Patil, reported in AIR 1994 SC
678 and ratio of the said judgments is misinterpreted by the learned
First Appellate Court.
(19) Per contra, Mr. Kotwal, the learned Advocate for the
respondent/plaintiff counters the contention arguing that issue of
readiness and willingness is a question of fact and not question of law.
He contends that this issue is answered by both the learned Courts on
appreciation of evidence on record. He contends that re-appreciation
of evidence is not permissible in a second appeal. His argument is that
in order to establish readiness and willingness it is not necessary that
plaintiff must all the while show that he was equipped with funds and
that it is sufficient that the plaintiff establishes that he is a man of
means who is financially capable to honor his financial commitment as
per the agreement. He submits that over all conduct of the plaintiff is
required to be seen in order to determine as to whether he was ready
and willing to perform his part of contract.
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(20) Mr. Kotwal states that the plaintiff was present in the
office of concerned Sub-registrar on the date stipulated for execution
and registration of sale deed alongwith requisite funds which is
sufficient to establish his readiness and willingness. He argues that the
fact of employment of plaintiff in a medical college is not in dispute. He
draws attention to letter dated 08.02.2001 issued by plaintiff in view of
the fact that defendant did not remain present for execution of sale
deed on the stipulated date i.e. 31.01.2001. He refers to legal notice
dated 28.03.2001 issued for specific performance. He also sates that
immediately upon receipt of termination notice the plaintiff had issued
letter dated 07.04.2001 disputing defendant’s contention which again is
a circumstance which indicates his readiness and willingness. Mr.
Kotwal also asserts that complaint under Consumer Act was filed
alsmost immediately in view of refusal which is a very strong
circumstance to infer readiness and willingness.
(21) As regards escalation, Mr. Kotwal argues that increase n
prices of land is not a relevant consideration to refuse specific
performance.
(22) As regards maintainability of the suit in the absence of
prayer to challenge the termination notice, the contention is of two
fold. Firstly he contends that the notice dated 29/03/2001 is not a
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notice for termination of contract. Referring to the notice, learned
counsel for the defendant contends that, according to the defendant,
the agreement stood terminated by virtue of the contents of the
agreement and alleged breach on the part of the plaintiff to purchase
property on or before 31/01/2001. He argues that even according to
the defendant he did not cancel or terminate the agreement. Rather
the case of the defendant is that the agreement stood canceled ipso
facto on 31.01.2001 which was the last date for completion of sale
transaction. In the light of aforesaid, Mr. Kotwal contends that the issue
involved is with respect to interpretation of agreement i.e. whether it
gets terminated as on 31.01.2001 as per clause 2 or still subsists as
per clause 7 since defendant had not completed formalities required for
registration of sale deed. Second contention is that since the
agreement is not terminable, at the instance of defendant alone, it
cannot be said that the agreement is determinable in nature as per
Section 14(d) of the Specific Relief Act, 1963 and therefore, it is not
necessary to challenge the termination notice.
(23) The learned counsel has placed reliance of the Hon’ble
Supreme Court in the cases of Mrs. A. Kanthamani Vs. Mrs.
Nasreen Ahmed, reported in AIR 2017 SC 1236, K.S.Manjunath
vs. Moorasavirappa Muttanna Chennappa Batil, since deceased
by his LRs and others reported in 2025 INSC 1298.
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(24) In order to answer the substantial questions of law, it will
be appropriate to refer to the respective pleadings. The plaintiff has
initially averred about the agreement of sale dated 24/10/2000 and the
terms and conditions enumerated therein. The plaintiff states that he
was all the while ready and willing to perform his part of contract in
order to complete the sale transaction. The plaintiff has contended
that he had issued public notice on 06/12/2000 after execution of the
agreement and for due diligence and that he had paid an amount of
Rs.23,450/- to the defendant towards property tax, electricity
infrastructure charges and development charges and was ready and
willing to pay balance sale transaction of Rs.2,15,550/- before the date
stipulated for completing the sale transaction. The plaintiff has stated
that the requisite amount was available with him and was lying in his
bank account with Central Bank of India from where it was transferred
to his account with a Credit Co-operative Society. The plaintiff has
further stated he had been to the office of Sub Registrar at Nagpur on
31/01/2001 i.e. the date stipulated for execution and registration of the
sale deed and waited there throughout the office working hours,
however, the defendant did not turn up before the Sub Registrar. He
has also stated that telephonic calls were made to the defendant asking
him to come to the office of sub-registrar, however, the defendant
avoided to talk. The plaintiff has stated that on 08.02.2001 he had
issued a letter to the defendant in this regard and asked the defendant
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to honour the agreement and had also issued notice dated 28.01.2001
seeking enforcement of agreement. The plaint averments indicate that
the plaintiff had received notice dated 29/03/2001 from the defendant
regarding termination of contract. Plaintiff has also averred that he
had issued a communication dated 09/04/2001 in response to the said
notice. According to the plaintiff, the sale deed could not be executed
since the defendant did not obtain No Objection Certificate (NOC) from
the concerned departments before 31/01/2001. Perusal of para 15 of
the plaint will indicate that according to the plaintiff, the defendant did
not obtain NOC from Nagpur Improvement Trust (NIT), which was
essential for registration of the sale deed. Thereafter, in paragraph 19
the plaintiff has stated that defendant deliberately avoided to obtain
NOC from NIT, NMC and Janhit Grihnirman Sanstha, Nagpur and also
did not update entries in the property card(akhiv patrika) intentionally
and therefore, defendant did not attend the office of Sub Registrar,
Nagpur on 31/01/2001.
(25) The defendant has filed written statement opposing the
suit. The contention of the defendant is that NOC of the Co-operative
Society dated 05/12/1997 along with other documents such as layout
map, sale deed dated 10/06/1963, revised sale deed dated
06/05/1989, property card(aakhiv patrika) were verified by the plaintiff
at the time of execution of agreement and photo copies of the said
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documents were supplied to the plaintiff. As regards the NOC from NIT,
the defendant had stated that there was no need of obtaining NOC
from the NIT for completing the sale transaction. The contention of the
defendant is that the plaintiff avoided to complete the sale transaction.
The defendant also denied that the plaintiff was having sufficient
money to complete the sale transaction as per the agreement. The
defendant denied that the plaintiff was having the requisite amount in
his bank account at the relevant time. The defendant also contends
that he was present in the office of Sub Registrar on 31/01/2001. The
defendant had stated that on 31/01/2001 he had come to Nagpur from
Wardha and after making payment of NMC tax, he had remained
present in that office of Sub Registrar at Mahakalkar Bhavan, Nagpur
on 31/01/2001 during the office hours, however, since the plaintiff did
not turn up, the sale transaction could not be completed. The
defendant stated that NMC taxes, electricity infrastructure charges and
development charges were paid by him from his own pocket and denied
that plaintiff had paid the said amount to him.
(26) Based on the rival pleadings, the learned trial Court
framed issues, upon which the parties led their respective evidence.
The plaintiff examined himself and an attesting witness to the
agreement. As against this, the defendant examined himself and
closed his evidence.
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(27) The plaintiff reiterated the plaint averments in his
affidavit of examination in chief in paragraph 3 and stated that the
defendant did not make payment of dues and also did not obtain
requisite NOC. He has further stated that the defendant assured him
that he will obtain NOC from NIT. The plaintiff has stated in paragraph
5 of the affidavit that he has paid an amount of Rs.23,450/- to the
defendant at his residential house at Wardha and had requested him to
execute sale deed on 31/01/2001. He states that he had asked the
defendant to keep all the requisite documents including NOC from
Society ready for execution and registration of sale deed. The plaintiff
had reiterated his statement that requisite amount of Rs.2,15,550/-
was lying in his bank account and subsequently it was transferred to
his account with a Credit Co-operative Society. The plaintiff in
paragraph 6 of the affidavit asserted that he was present in the office
of concerned Sub Registrar along with balance consideration, as also an
amount of Rs.60,000/- for payment of stamp duty and registration
charges. The plaintiff has alleged that defendant did not turn up
despite repeated telephone calls at his residence at Wardha. The
plaintiff has further stated that he had issued a letter dated
08/02/2001 to the defendant by R.P.A.D. since the defendant did not
turn up for execution of sale deed. He has stated that he had further
issued a notice dated 28/03/2001 for specific performance of contract.
The plaintiff had admitted receipt of notice dated 29/03/2001 by the
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defendant whereby agreement was sought to be terminated. The
plaintiff has disputed the right of defendant to terminate the agreement
and forfeit the amount. He states that notice issued by the defendant
was supplied vide letter dated 07.04.2001. Thereafter, reference is
made to the proceeding before Consumer Forum.
(28) Perusal of further examination in chief will demonstrate
that letter dated 08/02/2001 (Exh.35) is not issued by registered post
but Under Posting Certificate (UPC) (at Exh.36). As regards letter
dated 07/04/2001, the said letter is at Exh.43. The postal receipt
regarding dispatch by registered post or certificate of posting with
respect to letter dated 07/04/2001 is not filed.
(29) In his cross-examination, questions were put disputing
payment of Rs.23,450/-, presence of plaintiff in the office of Sub
Registrar and availability of funds. The plaintiff denied the suggestion
that amount of Rs.23,450/- was not paid by him to the defendant
towards payment of NMC tax, electricity infrastructure charges and
development charges. He stated that with respect to the electricity
infrastructure charges and development charges the defendant had
issued receipts for payment of the said amount. As regards amount of
Rs.11,000/- alleged to be paid towards property tax, the plaintiff stated
that defendant had issued photo copy of the receipt to him and its
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original was with the defendant. He admitted that copy of receipt of
Rs.11,000/- was not filed on record. As regards his presence, although
the plaintiff deposed that he had purchased a stamp paper in the office
of Sub Registrar to show his presence in the said office on 31/01/2001,
he admitted that he did not file the stamp paper on record to show his
presence. Plaintiff stated that he was present in the office of Sub
Registrar on 31/01/2001 with a cheque of Rs.2,15,550/- and along with
cash amount in the sum of Rs.60,000/- for payment of stamp duty and
registration charges. He had stated that the cash amount was
withdrawn from his bank account and bank account of his wife and
some money was gathered in cash from other individuals. He admitted
that he did not file the bank account statement on record. He further
admitted that he did not produce any document regarding withdrawal
of Rs.60,000/- from the bank account. He further denied the
suggestion that he was not having requisite amount to make payment
of balance sale consideration. The plaintiff was unable to state the
address of the office of Sub Registrar and could not confirm as to
whether the office is located in Sakkardara area. He also stated that
he was not aware as to whether the defendant was present in the office
of Sub Registrar at Mahakalkar Bhavan, Nagpur.
(30) The other witness examined by the plaintiff is an
attesting witness to the agreement. His examination in chief is
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restricted to execution and attestation of an agreement. However, in
his cross-examination he had stated that the plaintiff was serving in
Medical College as Administrative Officer. This statement in the cross-
examination is relied upon by the learned Court to draw inference
regarding official capacity of plaintiff to perform his part of contract
relating to payment of balance sale consideration.
(31) The defendant entered the witness box and deposed on
the lines of written statement. He reiterated the statement that NOC
from NIT was not required for completing the sale transaction and
further stated that copies of sale deeds, NOC by Society, property card
and layout map were provided to the plaintiff after negotiation when
the parties arrived at agreement with respect to the sale transaction.
The defendant states that the documents were handed over to the
plaintiff on 02/10/2000, itself when the terms of the proposed sale
were finalized. The version of the defendant with respect to payment
of Corporation tax is that since he was resident of Wardha, he had
informed the plaintiff that he will come to Nagpur on 31/01/2001 and
make payment of NMC taxes and after making payment of the same,
he will come to the office of Sub Registrar for execution and
registration of the sale deed. He has stated that the taxes are paid by
him from his own pocket. He has also stated that dues of Society were
cleared on 26/12/2000 and 16/01/2001. He has further stated that the
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rates of plots in the area had increased by multiple times. He stated
that landline telephone connection was obtained by him on 06/12/2005
and its number was 255946. Thus, the defendant put blame squarely
on the shoulder of the plaintiff.
(32) In his cross-examination, he admitted that before
31/01/2001, he did not have the property card, NMC tax receipt and
NOC of NMC, however, he stated that mutation of his name was done in
the office of City Survey department before 31/01/2001 and that he
had provided its copy to the plaintiff before 31/01/2001. However, he
admitted that acknowledgment with respect to delivery of documents
was not taken. During his cross-examination telephone directory was
shown to him in which telephone No. 41468 was shown in the name of
his son Mr.A.B.Lonare. He admitted the said document which was
marked as Exh.70. He further admitted that telephone calls were
received at his residential house on the said number.
(33) The learned trial Court has decreed the suit holding that
the plaintiff was all the while ready and willing to perform his part of
contract and that sale transaction could not be completed since the
defendant could not obtain NOC from the NMC. As regards the
availability of funds with the plaintiff in order to establish readiness to
complete the said transaction, the learned trial Court has observed that
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although the plaintiff could have filed relevant documents to show
availability of funds he failed to do so. However, issue of readiness was
answered in favour of plaintiff since he had pleaded that he was having
requisite amount with him as on 31/01/2001. The said statement was
accepted by the learned trial Court in view of issuance of public notice
on 06/12/2000 (Exh.45) coupled with evidence of PW-2 who had stated
in his cross-examination that plaintiff was in service as Administrative
Officer at Medical College, Sevagram.
(34) The learned trial Court has also found the plaintiff’s
version regarding payment of Rs.23,450/-to the defendant for clearing
the Corporation tax, electricity infrastructure charges and development
charges to be more probable.
(35) As regards the stand of the defendant that NOC from NIT
was not required, the learned trial Court has observed that the stand of
the defendant that NMC taxes were paid by the defendant on
31/01/2001, implies that NOC from NMC was not obtained till
31/01/2001. The learned trial Court has not recorded any finding with
respect to contention of defendant that No Objection Certificate (NOC)
from NMC or NIT was not required. The learned Trial Court also
recorded that the stand of defendant that he had obtained NOC from
society on 05.12.1997 and had paid NMC property tax on 31.01.2001
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indicated self contradiction. This finding does not appear to be proper
because the defendant has stated about payment of charges of co-
operative society which has no connection with NOC, if any, to be
issued by NIT or NMC.
(36) As stated above, the learned First Appellate Court has
confirmed the decree for specific performance of contract passed by the
learned trial Court with modification that instead of amount of
Rs.2,15,550/- the plaintiff was liable to pay an amount of
Rs.2,39,000/-. The learned First Appellate Court has held that payment
of Rs.23,450/- was not proved by plaintiff. Perusal of the findings
recorded by the learned first appellate Court will indicate that it has
accepted plaintiff’s version that he was present in the office of Sub
Registrar on 31/01/2001 and that the defendant was absent. The said
findings are recorded placing reliance on communication dated
08/02/2001 issued by the plaintiff (Exhibit 35) and UPC (Exhibit 36)
and cross-examination of the defendant relating to telephone number.
The learned first appellate Court also recorded that after 31/01/2001
the defendant issued notice seeking termination of the agreement for
the first time after a period of two months i.e. on 29/03/2001 and that
prior to this date, there was no communication from the defendant to
the plaintiff regarding failure on the part of plaintiff to complete
transaction. The learned first appellate Court has also referred to
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affidavit of secretary of the Co-operative Society which was filed before
the learned District Consumer Forum, wherein it was stated that NOC
was handed over to the defendant on 10/02/2001. The learned first
appellate Court has recorded that since the secretary has expired, he
could not be examined as a witness. Perusal of the findings by the
learned first appellate Court will demonstrate that findings with respect
to readiness and willingness are recorded on the basis of conduct of
parties. The learned First Appellate Court has held that the sale
transaction could not be completed since defendant did not obtain NOC
which was required for completion of the sale transaction.
As to substantial questions of law Nos.2 and 3 :-
2. Whether the courts below have applied the correct
principle of law in considering the prayer for specific
performance ?
3. Whether the finding concurrently recorded that the
plaintiff was ready with consideration is based on “no
evidence ?
(37) Before dealing with the substantial questions of law it will
be appropriate to refer to the judgments of the Hon’ble Supreme Court
and this Court dealing with Section 16 (c) of the Specific Relief Act.
Generally findings by Courts with respect to readiness and willingness
will be findings of facts which are immune from challenge in a Second
Appeal. However, in case, the findings are perverse or based on no
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evidence or inadmissible material, such findings can certainly be
interfered with while entertaining appeal under Section 100 of the CPC.
(38) In the case of N.P. Thirugnanam (D) By Lrs vs Dr. R.
Jagan Mohan Rao & Ors reported in (1995) 5 SCC 115, wherein the
Hon’ble Supreme Court has held that jurisdiction of a Civil Court to
grant decree for specific performance is subject to fulfillment of
mandate of Section 16(c) of the Specific Relief Act by the plaintiff. It is
held that plaintiff must necessarily prove availability of funds even if
defence in this regard is not raised by the defendant. The relevant
observations of the Hon’ble Supreme Court are reproduced herein
below:-
“5….The continuous readiness and willingness on the part
of the plaintiff is a condition precedent to grant the relief of
specific performance. This circumstance is material and
relevant and is required to be considered by the court while
granting or refusing to grant the relief. If the plaintiff fails
to either aver or prove the same, he must fail. To adjudge
whether the plaintiff is ready and willing to perform his part
of the contract, the court must take into consideration the
conduct of the plaintiff prior and subsequent to the filing of
the suit along with other attending circumstances. The
amount of consideration which he has to pay to the
defendant must of necessity be proved to be available.
Right from the date of the execution till date of the decree
he must prove that he is ready and has always been willingPAGE 24 OF 55
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to perform his part of the contract. As stated, the factum of
his readiness and willingness to perform his part of the
contract is to be adjudged with reference to the conduct of
the party and the attending circumstances. The court may
infer from the facts and circumstances whether the plaintiff
was ready and was always ready and willing to perform his
part of the contract.”
(39) Hon’ble Supreme Court has also in the case of Ritu
Saxena Vs. J. S. Grover, reported in (2019) 9 SCC 132 held that if
the plaintiff fails to prove availability of funds to discharge the financial
obligation under the contract, suit for specific performance of contract
must necessarily fail. The plaintiff had entered into an agreement of
sale to purchase the suit property for a sum of Rs.50,00,000/- and had
paid amount of Rs.1,00,000/- on the date of agreement. The wife
contended that annual income of plaintiff and her husband was around
Rs.80,00,000/-. She also contended loan of Rs.30,00,000/- was
sanctioned. The Hon’ble Supreme Court found that as against balance
sale consideration of Rs.49,00,000/-, the plaintiff could prove
availability of funds to the extent of Rs.30,00,000/- only. With respect
to the contention that the plaintiff and her husband were earning
Rs.80,00,000/- per anum approximately, the Hon’ble Supreme Court
observed that there was no documentary evidence to support the
contention regarding annual income of the plaintiff and her husband. It
is held that the said statement referring two annual income could not
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be accepted in the absence of any documentary evidence. Accordingly,
the Hon’ble Supreme Court held that burden of proving readiness was
not discharged by the plaintiff. Relevant observations of the Hon’ble
Supreme Court in paragraph 15 are reproduced for ready reference:-
“15. Coming to the facts of the present case, the sole
document relied upon by the appellant to prove her
readiness and willingness is the approval of loan on 30-7-
2004 by ICICI. Such approval was subject to two conditions
viz. furnishing of income tax documents of the appellant
and the property documents. M/s ICICI has sent an email
on 12-5-2005 to the husband of the appellant requiring an
agreement to sell on a stamp paper of Rs 50 to be executed
between the parties, as per the legal opinion sought from
the empanelled lawyer, without which ICICI will not be able
to disburse the loan. Admittedly, no agreement was
executed on stamp paper, therefore, the appellant could not
avail loan of Rs 50 lakhs from ICICI. Independent of such
loan, there is mere statement that the appellant and her
husband have income of Rs 80 lakhs per anum unsupported
by any documentary evidence. Such statement will be in the
nature of ipse dixit of the appellant and/or her husband and
is without any corroborating evidence. Such self-serving
statements without any proof of financial resources cannot
be relied upon to return a finding that the appellant was
ready and willing to perform her part of the contract. The
appellant has not produced any income tax record or the
bank statement in support of her plea of financial capacity
so as to be ready and willing to perform the contract.
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Therefore, mere fact that the bank has assessed the
financial capacity of the appellant while granting loan earlier
in respect of another property is not sufficient to discharge
of proof of financial capacity in the facts of the present case
to hold that the appellant was ready and willing to perform
her part of the contract. Such is the finding recorded by
both the courts below as well. ”
(40) The findings by the learned Courts in favour of the
plaintiffs are based merely on the alleged refusal on the part of
defendant to perform his part of the contract. Both the Courts have
put the blame for failure of the transaction at the footsteps of the
defendant. In view of law laid down by the Hon’ble Supreme Court in
the case of Man Kaur (Dead) vs. Hartar Singh Singha reported in
(2010) 10 SCC 512, non-compliance of agreement by defendant
cannot absolve the plaintiff from proving readiness and willingness. In
the said case also a contention was raised by the plaintiff that
defendant did not furnish NOC from relevant authorities for completion
of sale transaction and therefore, question of proving readiness and
willingness on the part of the plaintiff did not arise. The said
contention was expressly rejected by the Hon’ble Supreme Court.
Relevant observations in the said case are reproduced herein below for
ready reference :-
“40…..There are two distinct issues. The first issue is the
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breach by the defendant – vendor which gives a cause of
action to the plaintiff to file a suit for specific performance.
The second issue relates to the personal bar to enforcement
of a specific performance by persons enumerated in section
16 of the Act. A person who fails to aver and prove that he
has performed or has always been ready and willing to
perform the essential terms of the contract which are to be
performed by him (other than the terms the performance of
which has been prevented or waived by the defendant) is
barred from claiming specific performance. Therefore, even
assuming that the defendant had committed breach, if the
plaintiff fails to aver in the plaint or prove that he was always
ready and willing to perform the essential terms of contract
which are required to be performed by him (other than the
terms the performance of which has been prevented or
waived by the plaintiff), there is a bar to specific performance
in his favour. Therefore, the assumption of the respondent
that readiness and willingness on the part of plaintiff is
something which need not be proved, if the plaintiff is able to
establish that defendant refused to execute the sale deed
and thereby committed breach, is not correct. Let us give an
example. Take a case where there is a contract for sale for a
consideration of Rs. 10 lakhs and earnest money of Rs. 1
lakh was paid and the vendor wrongly refuses to execute the
sale deed unless the purchaser is ready to pay Rs. 15 lakhs.
In such a case there is a clear breach by defendant. But in
that case, if plaintiff did not have the balance Rs. 9 lakhs
(and the money required for stamp duty and registration) or
the capacity to arrange and pay such money, when the
contract had to be performed, the plaintiff will not be entitled
to specific performance, even if he proves breach by
defendant, as he was not ‘ready and willing’ to perform his
obligations.”
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(41) Similar view taken by this Court has in the case of
Girish Vinodchandra Dhruva and ors. Vs. Neena Paresh Shah
and anr. reported in (2023) SCC OnLine Bombay 1188. In this
case, the parties had entered into an agreement for sale of property for
an amount of Rs.41,75,000/-. Plaintiffs had paid amount of
Rs.2,51,000/- towards earnest money and balance amount payable
was Rs.39,24,000/-. This amount was to be paid by the
plaintiff/purchaser to the defendant/vendor on or before 31/10/2005.
In addition they were also required to pay stamp duty and registration
charges. The sale deed was to be executed upon payment of balance
sale consideration on or before 31.05.2005. The plaintiff had produced
documentary evidence in the form of bank passbook to prove
availability of sum of Rs.26,53,384/-. The plaintiffs contended that they
had obtained loan of Rs.15,00,000/- from City Bank. However,
documentary evidence was not produced with respect to sanction of
loan. This Court held that since no explanation was offered for not
producing the relevant documents with respect to the alleged loan on
record, plaintiff had failed to prove readiness inasmuch as they could
not establish availability of requisite funds to honour the agreement.
This Court referred to the settled legal position that the plaintiffs were
not required to carry the balance sale consideration all the while.
However, it is held that it was incumbent on the plaintiffs to prove that
they were equipped with sufficient funds to discharge their financial
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obligations under the contract. Following parameters for dealing with
aspect of readiness and willingness are laid down in the said
judgment:-
Paragraph 49:- Plaintiff must adduce evidence to show availability of
funds to make payment as per the agreement. If he does not have
sufficient funds with him he must lead evidence to show how funds
were to be generated.
Paragraph 53:- Pleading of readiness in the absence of any evidence
is not of any consequence. Bare assertion of income and resources is
not of any relevance in the absence of supporting evidence such as
bank records, bank statements, income certificate, appointment letter,
etc.
Paragraphs 54 to 58:- As against balance amount of Rs.39,24,000/-
and additional amount required for stamp duty and registration
charges, plaintiff could prove availability of funds to the extent of
Rs.26,53,384/- only. The plaintiff came with a case that loan of
Rs.15,00,000/- was sanctioned, which he failed to prove. In view of
aforesaid, it is held that plaintiff failed to establish readiness to perform
his part of contract.
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Paragraphs 60 and 61:- It is held that mere averment that plaintiff
was waiting with balance sale consideration in the office of Sub-
registrar is not sufficient to prove readiness and willingness unless
there is evidence to show plaintiff had taken steps for completion of
sale transaction such as preparing draft of sale deed, getting stamp
duty determined etc. Presence of plaintiff in the office of Sub-registrar
was disbelieved since evidence in the form of purchase of stamp paper
was not produced.
Paragraphs 62 and 63:- Failure on the part of defendant to perform
reciprocal obligation such as obtaining no objection certificate and no
dues certificate cannot be a ground for plaintiff to justify non payment
of balance consideration. Even in such case plaintiff will have to
establish readiness and willingness. Reliance is placed on paragraph 40
of the judgment of Supreme Court in the case of Man Kaur (supra).
It is held that plaintiff is required to demonstrate readiness and
willingness regardless of default by defendant.
(42) The learned advocate for the respondent/plaintiff has
placed reliance on the judgment of the Hon’ble Supreme Court in the
case of A. Kanthamani Vs. Nasreen Ahmed, reported in (2017) 4
SCC 654. In the said case, the agreement was entered into for an
amount of Rs.3,47,000/- out of which a sum of Rs.2,00,000/- was paid
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by the plaintiff to the defendant prior to execution of the agreement.
For balance of Rs.1,47,500/- loan was obtained from LIC. In such
circumstances, the Hon’ble Supreme Court has held that plaintiff had
established readiness and willingness. In such fact situation the
Hon’ble Supreme Court held that although it is necessary for plaintiff to
prove that he was ready and willing to perform his part of the contract
all throughout, it is not necessary for the plaintiff to establish that he
was equipped with ready cash all throughout. It is held that readiness
and willingness should be adjudged having regard to totality of
circumstances and that he must establish that he is a man of means.
In the said case also, the plaintiff had led positive evidence to establish
availability of funds by availing loan from LIC.
(43) A broad overview of the judgments on Section 16 of the
Specific Relief Act will indicate that there is unanimity of opinion that in
order to succeed in a suit for specific performance of contract, plaintiff
must necessarily prove readiness and willingness on his part all
throughout. Readiness implies capability to discharge financial
obligation and willingness means desire to purchase the property. As
regards readiness, depending on the facts of each case issue of
readiness and willingness is decided either insisting upon strict proof of
availability of fund or only by considering conduct of plaintiff and
having regard to other surrounding circumstances. Although it is held
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that plaintiff need not prove availability of funds all throughout, he
must establish ability to generate funds to honour the schedule of
payment in the agreement. It is clearly held that mere breach of
agreement on the part of defendant or proof of fact that defendant did
not abide by the agreement will not absolve, the plaintiff of this
responsibility to prove readiness and willingness. Based on the amount
paid viz-a-viz the total sale consideration, the Courts have generally
insisted upon strict evidence with respect to availability of funds or
have decided the issue of readiness and willingness broadly on the
basis of conduct of plaintiff.
(44) In the case at hand, undisputedly, agreed sale
consideration is Rs.2,64,000/-, as against which payment of earnest
amount of Rs.25,000/- was paid by the plaintiff on the date of
agreement. The said amount is less than 10% of the total sale
consideration. The balance amount which is more than 90% of the
agreed sale consideration was agreed to be paid on or before
31/01/2001. The entire transaction was agreed to be completed within
a period of three months and one week. The plaintiff as mentioned
above has stated that the requisite amount was lying in his bank
account and was transferred to his bank account with a Credit
Cooperative Society. The defendant has disputed the said statement in
the written statement. The defendant also stated in the written
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statement that plaintiff did not have money to make payment of
balance sale consideration. In this fact situation, in the considered
opinion of this Court that it was necessary for the plaintiff to lead
positive evidence with respect to availability of funds. This could be
done by producing account statement or passbook of his bank account
or account with Credit Co-operative Society. The plaintiff has not
contended that he was to arrange funds from another source. He came
with a positive case of availability of funds which were lying in the bank
account and/or account of credit society. Despite this he did not
produce the relevant documents on record. It will be pertinent to state
that plaintiff had stated that he was present in the office of the Sub
Registrar on 31/01/2001 with cheque in the sum of Rs.2,15,550/-
which according to him was the balance sale consideration. It was also
necessary for the plaintiff to produce bank account statement of his
wife on record since, according to him, amount of Rs.60,000/- for
payment of stamp duty, registration charges and other expenses was
withdrawn from the bank account of wife.
(45) It needs to be stated that the defendant had specifically
denied contention of plaintiff regarding availability of money in the
written statement and had further challenged financial capability of the
plaintiff in his cross-examination. The plaintiff was aware about the
stand taken by the defendant before entering the witness box and also
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before closing his evidence.
(46) Being aware about specific stand challenging availability
of funds which was taken by the defendant, it was necessary for
plaintiff to produce his bank account statement or statement of co-
operative society on record and also account statement of his wife
since amount for payment of stamp duty and registration charges etc.,
is stated to be withdrawn from the said account before allegedly
remaining present in the office of sub-registrar on 31.01.2001. The
learned Courts ought to have drawn adverse inference against the
plaintiff for not producing the said evidence on record.
(47) It will be appropriate to refer to the cross-examination of
the plaintiff.
“On 31.01.2001 I had not prepared draft of sale
deed or its franking.”
“I have not produced any document on record to
show that I withdraw some amount from my
saving account and saving account of my wife. I
have not filed cheque of Rs.2,15,550/- on record.
It is not true, on 31.01.2001 I had not withdrawn
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Rs.60,000/- cash and not accompanied the
cheque of Rs.2,15,550/- to get executed the
registered Sale Deed. It is not true, I have no
money for payment of balance consideration
amount and charges of stamp and registration
fees. It is not true, I never went to office of Sub-
registrar, Nagpur on 31.01.2001.”
“It is not true, as per agreement amount of
Rs.2,39,000/- was balance against me on
31.01.2001. It is not true that payment amount
of Rs.5,250/- on 16.12.2000, Rs.7,200/- on
16.01.2001 and Rs.11,297/- on 31.01.2001 paid
by defendant of his own amount. I have not
produced any document on record to show that I
made payment on 26.12.2000, 16.01.2001 and
31.01.2001 on behalf of defendant.”
“I had paid amount Rs.11,000/- to defendant on
17.01.01 for payment of corporation tax. To that
effect the defendant issued photocopy of the
receipt to me. Its original is with defendant. I
have not filed the receipt of payment of
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Rs.11,000/- on record. I had paid Rs.5,250/- and
Rs.7,200/- to the defendant on 16.12.2000. But,
the defendant did not issued the receipt of
payment of said amount to me.”
“It is not true, I had no money to pay balance
consideration amount of Rs.2,39,000/- to the
defendant.”
“It is not true, I am deposing false in my affidavit
regarding I was ready with balance consideration
amount of RS.2,15,115/- to pay the defendant
which was kept in my saving account no.11255
with the Central Bank of India, Branch
Sewagram, District Wardha.”
(48) The extracted portion of cross-examination of plaintiff
(supra) will clearly indicate that availability of fund was seriously
disputed by the defendant in the cross-examination of plaintiff. The
plaintiff also admitted that he had not produced any documentary
evidence regarding availability of funds. The plaintiff was fully aware
that he was required to produce documentary evidence on record to
establish availability of funds. However he failed to do so.
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(49) Perusal of the findings by the learned trial Court will
indicate that it has expressly held that the plaintiff could have filed
documentary evidence on record to prove that he was equipped with
amount of balance sale consideration to discharge his financial
obligation under the contract which the plaintiff failed to do so.
(50) Having held so, the learned trial Court held that plaintiff
had proved his readiness and willingness merely because he has issued
due diligence notice on 06/12/2000 in view of evidence of PW-2, who is
the attesting witness to the agreement, who has in cross-examination
stated that plaintiff was working as Administrative Officer in Medical
College. Apart from this, the learned trial Court has not recorded any
finding with respect to readiness i.e. financial capability to perform his
part of contract. It will be pertinent to state that although finding is
recorded with respect to employment of the plaintiff there is no
observation in the judgment with respect to quantum of his salary. The
evidence of plaintiff and PW-2 are also silent with respect to his
monthly salary.
(51) Similarly, the learned First Appellate court, has also not
recorded direct finding regarding availability of funds with the plaintiff.
while dealing with the aspect of readiness and willingness. The learned
first appellate Court has referred to the legal principles relating to
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readiness and willingness under Section 16(c) of the Specific Relief Act.
The learned first appellate Court while discussing the said aspect
recorded that the plaintiff was present in the office of Sub Registrar on
31/01/2001 for registration of the sale deed whereas the defendant
was absent. It is held that the defendant was unable to obtain NOC for
completing the sale transaction and therefore he did not remain
present in the office of Sub-registrar for registration of sale deed on
31/01/2001. Reference is also made to letter dated 08/02/2001 and
notice dated 28/03/2001 issued by the plaintiff to the defendant for
registration of the sale deed.
(52) Both the learned Courts have completely failed to take
into consideration the portion of cross-examination of plaintiff extracted
above. Both the learned Courts while appreciating the evidence have
missed out to take into consideration the aforesaid aspects which have
come on record during the cross-examination of the plaintiff. The
portion extracted above will indicate that availability of funds was
seriously disputed by the defendant and that the plaintiff was put to
sufficient notice about the need to produce documentary evidence
regarding availability of funds to prove his readiness. Despite this, the
plaintiff failed to produce relevant documents. Both the learned Courts
have erred in not drawing adverse inference against the plaintiff in this
regard.
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(53) In the facts of the present case, were less than 10% of
the total sale consideration was paid by the plaintiff, in my considered
opinion it was necessary for the plaintiff to lead positive evidence with
respect to availability of funds which he has failed to do.
(54) It must also be stated that one unexhibited document,
purporting to be a photocopy of two pages of passbook of the plaintiff
with MGINS Employees Co-operative Credit Society Ltd., was found in
the record. Although this document is not exhibited, attention of
learned advocates was drawn to this document. This document is filed
on record by the plaintiff as document No.15 with the list of documents
at Exhibit-4.
(55) Mr. Kotwal, the learned Advocate for the plaintiff argued
that the plaintiff had placed document on record to indicate his financial
capability. He states that the document clearly reveals availability of
funds to the extent of Rs.2,75,000/- in the account of plaintiff which is
sufficient to prove his financial capability to discharge financial
obligation of making payment to the defendant in terms of the
agreement of sale. Mr. Kotwal contends that unfortunately due to
mistake of the learned advocate appearing before the learned Trial
Court the document could not be exhibited by producing the original
thereof and proving the same during the course of trial. He contends
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that on such procedural aspects, litigants go by the advise of their
advocates. He argues that in the light of other available evidence on
record, this document should be taken into consideration, at least to
draw inference that plaintiff had bonafide produced document on record
to show his financial capability.
(56) However, Mr. Khare, learned advocate for defendant
argues that the said document cannot be looked into since it is not
proved and exhibited. He also argues that the document is a mere
photocopy and even original of the alleged passbook is not produced on
record. He further argues that the document, on the face of it does not
appear to be a genuine document. He refers to three entries regarding
accumulation of interest in the passbook and the corresponding entries
with respect to balance amount. The contention of Mr. Khare is that
although three credit entries of interest are recorded in the document,
the balance amount in the account is shown as Rs.2,75,000/- only. He
contends that there is a serous doubt with respect to veracity of the
document, in as much as, the balance amount must increase with
every credit entry regarding accumulation of interest. Mr. Khare
contends that therefore this document was not referred to the plaintiff
during the course of his examination-in-chief.
(57) I have perused the document, although it is not
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exhibited. I am in agreement with Mr. Khare that the document does
not inspire confidence. There are three credit entries of interest in the
passbook. However, there is no corresponding increase in the balance
amount in the account corresponding to these credit entries. It is also
true that the plaintiff did not file original of this document on record. It
will not be safe to rely on this document even for limited purpose as
contended by Mr. Kotwal. It will be pertinent to state that perusal of
judgment by the learned Consumer Forum also does not indicate that
this document was placed on record in the consumer case.
(58) It is also relevant to note that the evidence of plaintiff is
completely silent with respect to his monthly salary or income from
other sources. There is no evidence to ascertain his income. Merely
because he was working as Administrative Officer in a College that by
itself will not mean that he had the means to make payment of balance
sale consideration as per the agreement. The ratio in the case of
P.Daivasigamani Vs. S. Sambandan reported in (2022) 14 SCC
793, is squarely applicable to the facts of the present case. In the said
case, also merely on the basis of employment the contention was
raised that readiness and willingness was proved, however, the Hon’ble
Supreme Court rejected the contention since the documentary evidence
in that regard was not produced. It will be pertinent to state that in
the said case the plaintiffs had at least made averment about the
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annual income. In the case at hand, the plaint averments are
completely silent with respect to annual income/salary of the plaintiff.
A positive statement is made that funds were available in the account
and account statement is not produced despite the fact that financial
capability was specifically questioned in the written statement and also
in the cross-examination. This is a fit case where adverse inference
needs to be drawn against the plaintiff for nor producing documentary
evidence in support of contentions with respect to availability of funds.
The plaintiff has failed to prove his case of being ready to perform his
part of the contract. The learned Courts have clearly erred in recording
finding about the availability of funds i.e. readiness in favour of the
plaintiff merely on the basis of correspondence made by him with
respect to the sale transaction.
(59) The plaintiff’s case as noted above, is specific that
requisite amount was lying in the bank account from where it was
transferred to his society account. Bank account statement is not
produced on record. Photocopy of account of society is filed on record.
Its original is not filed on record. The said document was not placed on
record in the consumer case. The document as recorded above, is not
free from suspicion. Likewise, even cheque of Rs.2,15,550/-, which the
plaintiff was allegedly carrying to the office of sub-registrar is not filed.
The plaintiff has also not made any statement with respect to his
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monthly salary. Thus, the present case is one of no evidence to prove
readiness i.e., financial capability to perform his part of the contract by
the plaintiff.
(60) The plaintiff contended that he had paid amount of
Rs.23,450/- towards NMC taxes, electricity infrastructure charges and
development charges. The defendant has denied receipt of the same. It
is a case of word against word. In this context it must be stated that
the defendant cannot lead negative evidence to prove that he did not
receive the amount. It was for plaintiff to lead positive evidence that
he had paid the amount. Perusal of evidence of plaintiff will
demonstrate that according to him defendant did not issue receipt for
development charges and electricity infrastructure charges. This implies
that according to the plaintiff he paid this amount to the defendant who
in turn paid the same to the society. However, in the consumer case,
the plaintiff has filed affidavit of Secretary of society to contend that
the amount was directly paid by the plaintiff to the society. Thus, there
is an inherent contradiction in the case of plaintiff, in his evidence in
the civil suit and in the consumer case.
(61) It will also be appropriate to refer to pleadings in
paragraph 8 of the plaint. The plaintiff has stated that he has paid
amount of Rs.11,000/- to defendant at Wardha in cash for payment of
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NMC taxes. He has stated in paragraph 5 of his examination-in-chief
that amount of Rs.11,000/- was paid to defendant in cash at his
residential house at Wardha for making payment of NMC taxes. In this
regard it will be appropriate to refer to his cross-examination. The
plaintiff has stated in paragraph 7 of cross-examination that amount of
Rs.11,000/- was paid by him to defendant on 17.01.2001 and
photocopy of tax receipt was given by defendant to him. It must be
stated that undisputedly NMC tax was paid by defendant on
31.01.2001 i.e., the date stipulated for execution of sale deed.
Admittedly, the plaintiff and defendant did not meet on 31.01.2001. It
is also apparent that parties did not meet each other in person after
31.01.2001. Yet the plaintiff claims that photocopy of NMC tax receipt
was given to him by the defendant. The version of plaintiff regarding
payment of Rs.11,000/- to defendant for clearing NMC taxes is not
acceptable.
(62) Perusal of pleadings and evidence of plaintiff will
demonstrate that he had pleaded that he was ready and willing to pay
balance amount of Rs.2,15,550/- to the defendant in order to obtain
sale deed with respect to the suit property. The plaintiff claims that this
amount was paid by him to the defendant and that the same was
required to be deducted from the balance sale consideration of
Rs.2,39,000/-. The plaintiff has not stated that he would be ready to
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pay the said amount of Rs.24,450/-, if payment of the same is not
proved. The said amount is around 8.75% of the total agreed sale
consideration. This also is a relevant factor which will demonstrate that
the plaintiff has failed to make out a case of being ready and willing to
perform his part of contract.
(63) The learned First Appellate Court has rightly disbelieved
the evidence of plaintiff with respect to payment of Rs.24,450/-.
However, the learned First Appellate Court has erred in decree for
specific performance by directing the plaintiff to pay amount of
Rs.2,39,000/- instead of Rs.2,15,550/- as claimed by him. In this
regard, the learned First Appellate Court ought to have appreciated
that this is not a case where the plaintiff has merely failed to prove
payment of Rs.24,450/-. The material on record will rather indicate
inconsistent stands taken by the plaintiff with respect to payment of
said amount. This aspect should have been taken into consideration
while dealing with appeal arising out of suit for specific performance, in
the light of legal position that decree for specific performance is a
matter of discretion of the Court and not right of the plaintiff.
(64) The plaintiff contends that he was present in the office of
sub-registrar throughout the day on 31/01/2001 for registration of sale
deed. Perusal of plaint and examination in chief will demonstrate that
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he has not mentioned that he was present before which office of sub-
registrar. The plaintiff has all throughout used the word ‘concerned’
sub-registrar. It it also necessary to state that questions in this regard
were put to him in cross-examination where he could not specify the
address of the sub-registrar office where he was allegedly present. This
fact assumes significance since there were/are several offices of Sub-
registrars at Nagpur situated at different addresses. Relevant portion of
the cross-examination in this regard is extracted herein-below:-
“I do not know whether sub-registrar office is
situated in the area of Tajbag, Sakkardara, Nagpur. I
do not know whether defendant was present at
Mahakalkar Bhawant Sub-registrar office on
31.01.2001 during office hours or not. It is not true, I
never went in Sub-registrar office Nagpur because I
was not having balance consideration of amount to
get execute registered sale deed from defendant”
(65) All these aspects have completely skipped the attention
of both the learned Courts. However, both the learned Courts have
accepted the case of plaintiff that he was present in the office of Sub-
registrar on 31.01.2001 for execution and registration of sale deed.
The learned First Appellate Court ought to have appreciated that
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presence of plaintiff in the office of Sub-registrar on the relevant date
was doubtful since the plaintiff admittedly did not prepare draft of the
sale deed, did not state that parties had decided to remain present
before which sub-registrar for execution and registration of sale deed,
he could not state the address of sub-registrar office where he was
present to establish his presence in the office of sub-registrar on
31.01.2001 as alleged by him.
(66) The learned Courts have placed reliance on letter dated
08.02.2001 (exhibit 35) issued by plaintiff to defendant. This letter
though stated to be dispatched through registered post, the plaintiff
has filed posting certificate (exhibit 36) on record with a view to prove
dispatch of the said letter. The said letter is not sent by registered post
although statement about letter being dispatched through registered
post is made in the examination in chief. As regards, this letter dated
08.02.2001 which is stated to be issued under certificate of posting,
although the certificate of posting is marked as Exhibit 36, the learned
First Appellate Court ought not have accepted the contention of plaintiff
regarding dispatch of the letter on 08.02.2001. The learned First
Appellate Court has not taken into consideration the law laid down by
the Hon’ble Supreme Court doubting veracity of certificates of posting
in the cases of Shivkumar and ors. Vs. State of Haryana reported
in (1994) 4 SCC 445 and Gadakhyashwantrao Kankarrao Vs.
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Balasaheb Vikhe Patil, reported in AIR 1994 SC 678 which were
cited by the defendant during the course of hearing of the appeal. Both
these judgments hold that it is not safe to rely on certificates of posting
as postal seal can easily be obtained by any person at any time. The
learned First Appellate Court has erred in law in disregarding the
contention of the defendant with respect to the certificate of posting on
the ground that it was an exhibited document. The learned Court failed
to appreciate that exhibiting a document and its evidentiary value are
two different aspects. Even if the certificate of posting is exhibited, the
reliability thereof ought to have been considered by the learned First
Appellate Court. It must however be stated that the plaintiff has also
stated about issuance of notice for specific performance dated
28.03.2001. It must also be stated that the version of defendant with
respect to telephonic calls is also not free from blemish. The defendant
tried to contend that he did not have any telephonic connection on
31.01.2001, although he admitted in cross examination that it was
then proved that the telephone connection was in the name of his son.
(67) It will also be appropriate to state the plaintiff had stated
that he had purchased a stamp paper from the office of sub-registrar
on 31.01.2001. This statement is made obviously to establish presence
in the office of sub-registrar on 31.01.2001 i.e., the scheduled date for
execution of sale deed. In the cross-examination he admitted that
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stamp paper was not filed on record. However, perusal of judgment of
consumer forum reveals that stamp paper was filed on record in the
consumer case. The version of plaintiff about purchasing stamp paper
can be accepted. However presence in the office of sub-registrar does
not by itself prove his readiness to perform his part of contract.
(68) It will again be appropriate to refer to judgment of this
Court in the case of Girish Vinodchandra Dhruva where it is held
that presence in the office of Sub-registrar cannot be held as a
circumstance to infer readiness and willingness unless the plaintiff
establishes that steps for completing the sale transaction such as
preparation of draft sale deed, getting stamp duty ascertained etc., is
done(paragraphs 60 and 61). The facts of the present case bear
striking similarity with the aforesaid case. It needs to be reemphasized
that in the case of Girish Dhruva as against balance consideration of
Rs.39,24,000/-, plaintiff had proved availability of funds to the extent
of Rs.26,53,384/-. The plaintiff in the said case failed to establish
sanction of bank loan for the balance amount. The High Court held that
readiness and willingness was not proved (paragraphs 54 to 58). In
the present case, there is no evidence at all with respect to availability
of any amount. The ratio of the said judgment will be applicable with
greater force in the facts of the present case.
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(69) Both the learned Courts have held that the defendant
failed to discharge his contractual obligations of obtaining NOCs from
NMC, NIT and the concerned co-operative society. However, positive
finding with respect to need of such NOC is not recorded by either
Court. Even otherwise in view of legal position as settled by Man kaur
and Girish Vinodchandra Dhruva, breach of agreement or failure to
discharge contractual obligations by the defendant will not absolve the
plaintiff to prove readiness and willingness which, in the present case
plaintiff has failed to do.
(70) It must be stated that the plaintiff had come up with a
case that he had issued letter dated 08.02.2001 to the defendant since
the defendant allegedly did not turn up for execution of sale deed in
terms of the agreement. He also issued notice for specific performance
on 28.03.2001. He filed consumer complaint in the year 2001 itself and
shortly after the appeal preferred by the defendant was allowed by the
learned State Commission, the plaintiff had filed the suit for specific
performance of contract. Whereas, all these facts indicate plaintiff’s
eagerness, this evidence, when tested in the light of law laid down in
the cases of Ritu Saxena, Man Kaur, P. Daivasigamani, Girish
Dhruva and several other decisions on the point, leads to conclusion
that plaintiff failed to prove readiness to perform his part of contract
since he did not produce any documentary evidence to prove
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availability of funds, despite a very clear and specific challenge by the
defendant with respect to availability of funds.
(71) In view of the aforesaid it needs to be held that findings
by both the learned Courts with respect to readiness, though
concurrent, are not supported by any evidence on record. The
substantial question of law No.3 with respect to readiness and
willingness deserves to be answered against the plaintiff/respondent
and in favour of the appellant/ defendant by holding that plaintiff has
failed to prove his readiness to perform his part of contract.
SUBSTANTIAL QUESTION OF LAW NO.1
1. In the absence of relief seeking declaration that the
termination of the suit agreement is illegal, was the suit
for specific performance maintainable ?
(72) The defendant claims that agreement dated 24.10.2000
is terminated by him vide notice dated 29.03.2001 and the suit is not
maintainable on the ground that this termination notice is not
challenged by the plaintiff. The three clauses in the agreement quoted
above will demonstrate that the agreement by itself does not authorize
any party to unilaterally terminate the same. Perusal of the notice
dated 29.03.2001 issued by the defendant will also demonstrate that
the defendant has not terminated the agreement, but has stated that
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the agreement stood terminated as per the terms and conditions
incorporated therein. Thus, the case involves interpretation of the
agreement. Since the defendant had not terminated the agreement the
question which arises for consideration is not with respect to
maintainability of the suit in the absence of challenge to termination.
The question that arises is with respect to interpretation of agreement.
Having regard to the clauses in the agreement and the contents of
notice dated 29.03.2001, this Court is in agreement with Mr. Kotwal
that the defendant has not terminated the agreement, but has provided
his interpretation with respect to terms and conditions of the
agreement to claim that, the same stood terminated on 31.01.2001.
The stand taken by the defendant in the reply notice dated 11.04.2001,
issued in response to plaintiff’s notice for specific performance of
contract is also the same. The substantial question of law, therefore
does not arise for consideration in the facts of the present case.
(73) Second Appeal is partly allowed in the following terms:-
I. Judgment and decree dated 02.09.2015
passed by the learned Ad-hoc District Judge 3
Nagpur in Regular Civil Appeal NO.255 of 2014 and
judgment and decree dated 28.04.2014 passed by
the learned 8th Joint Civil Judge, Junior Division,
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Nagpur in Regular Civil Suit No.977 of 2012 (old
Special Civil Suit No.358 of 2006) are quashed and
set aside.
II. Regular Civil Suit No.977 of 2012 (old
Special Civil Suit No.358 of 2006) decided by the
learned 8th Joint Civil Judge, Junior Division,
Nagpur is partly allowed by directing the
defendant/appellant herein to refund amount of
Rs.25,000/- to the plaintiff/respondent herein with
interest at the rate of 9% per anum from the date
of agreement i.e., 24.10.2000 till the date of
payment of the said amount.
III. Parties to bear their own costs. (74) At this stage, Mr. Kotwal, learned advocate for the
respondent states that the respondent intends to challenge this
judgment before the Hon’ble Supreme Court. He prays that for some
reasonable period the appellant/defendant should be restrained from
alienating the suit property. Although the prayer is opposed, in the
considered opinion of this Court, two concurrent decrees for specific
performance of contract are reversed in the present Second Appeal and
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as such it will be appropriate to direct the appellant/defendant not to
alienate the suit property and to maintain status-quo with respect to
possession of the same till 30.06.2026.
[ ROHIT W. JOSHI, J. ]
KOLHE/TANMAY
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