RAVI SETIAversusMADAN LAL AND OTHERS

938                      [2019]REPORTS
               SUPREME COURT    13 S.C.R. 938                [2019] 13 S.C.R.


A                                 RAVI SETIA
                                        v.
                         MADAN LAL AND OTHERS
                        (Civil Appeal No(s). 2837 of 2011)
B                             OCTOBER 04, 2019
              [NAVIN SINHA AND INDIRA BANERJEE, JJ.]
            Specific Relief Act, 1963: s.16(1)(c) – Suit for specific
      performance of contract – Readiness and willingness of plaintiff
      to perform his part of contract – Defendants 1 to 3 agreed to sell
C
      land in question to plaintiff – The sale deed was to be executed on
      30.04.1990 – Case of plaintiff was that the defendant no.1 and 2
      did not appear before the Registrar for execution on 30.04.1990 –
      Trial Court and First Appellate Court arrived at the finding of
      readiness and willingness on part of the plaintiff solely on basis of
D     a certificate produced by him from the Sub-Registrar confirming
      his presence before him on 30.04.1990 for execution – Held: Apart
      from the said certificate, no further evidence was led by the plaintiff
      to demonstrate readiness and willingness including the continuous
      capacity for discharge of the balance consideration – In the
      circumstances the certificate from the office of Sub-Registrar cannot
E
      be construed as conclusive evidence to non-suit defendants 1 and
      2 – The findings to that effect therefore held to be unsustainable.
              Specific Relief Act, 1963: s.16(1)(c) – Suit for specific
      performance of contract – Readiness and willingness of plaintiff
      to perform his part of contract – Trial Court decreed the suit on
F
      01.06.1994 and granted time to the plaintiff for deposit of the
      balance consideration within two months – Plaintiff offered no
      explanation whatsoever for the failure to comply the direction –
      After expiry of the time granted for deposit, plaintiff filed an
      application before the Trial Court that in view of the pendency of
G     the First Appeal preferred by defendants, the time for deposit may
      be extended as otherwise the amount would lie in the bank without
      interest – Time for deposit was extended till disposal of the First
      Appeal – Held: The failure of the plaintiff to offer any explanation
      why the balance consideration was not deposited within the time
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                                       938
          RAVI SETIA v. MADAN LAL AND OTHERS                              939


granted, the filing of the application for extension of time after        A
expiry of the prescribed period coupled with the frivolousness of
the grounds taken in the application for extension that the money
would lie in the bank without earning interest, were all but evidence
of incapacity on part of the plaintiff to perform his obligations under
the agreement and reflective of lack of readiness and willingness –
                                                                          B
The grant of relief for specific performance under s.16(1)(c) of the
Act is a discretionary and equitable relief – The plea that the amount
would lie in the bank without interest is unfounded and contrary to
normal banking practice – This is sufficient evidence of the
incapacity or lack of readiness and willingness on part of the
plaintiff to perform his obligations – Undoubtedly, the time for          C
deposit could be extended under s.28 of the Act – But the mere
extension of time for deposit does not absolve the plaintiff of his
obligation to demonstrate readiness and willingness coupled with
special circumstances beyond his control to seek such extension –
The pendency of an appeal by the defendant did not preclude the
                                                                          D
plaintiff from depositing the amount in proof of his readiness and
willingness – High Court has rightly observed that there was no
stay by the Appellate Court of the decree under appeal to justify
non-deposit during the pendency of the appeal – There was no
infirmity in the order of the High Court concluding that the plaintiff
in the facts and circumstances was not ready and willing to perform       E
his obligations.
      Dismissing the appeal, the Court
      HELD: 1. Defendant nos. 1 and 2 by registered notices
dated 28.05.1990 and 12.06.1990 required the plaintiff to get the
sale deed executed by 25.06.1990. The plaintiff does not dispute          F
that the communication was properly addressed and sent through
registered acknowledgement due. If it was returned back with
the endorsement that the plaintiff was not available at his home,
defendants 1 and 2 were not required to do anything further. If
the plaintiff was of the opinion that the endorsement was wrong,          G
it was for him to have contended so and led necessary evidence
in this regard. The Trial Court rightly did not disbelieve
defendants 1 and 2, but without returning any finding in that regard
preferred to rely on the unsubstantiated claim of the plaintiff of
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940            SUPREME COURT REPORTS                     [2019] 13 S.C.R.


A     having been present before the Sub-Registrar on 30.04.1990.
      The said finding is also held to be unsustainable. [Para 6][943-H;
      944-A-C]
             2. The Trial Court decreed the suit on 01.06.1994 and
      granted time to the plaintif f for deposit of the balance
B     consideration within two months from 01.06.1994, i.e. by
      31.07.1994. The plaintiff offered no explanation whatsoever for
      the failure to comply the direction. After expiry of the time granted
      for deposit, on 02.08.1994 the plaintiff filed an application before
      the Trial Court that in view of the pendency of the First Appeal
C     preferred by defendants, the time for deposit may be extended
      as otherwise the amount would lie in the bank without interest.
      On 02.08.1994 itself, the time for deposit was extended till
      disposal of the First Appeal. The defendants’ challenge to the
      ex-parte order was unsuccessful on technical grounds. [Para
      8][944-F-G]
D
            3. The grant of relief for specific performance under Section
      16 (1)(c) of the Act is a discretionary and equitable relief. Under
      Section 16 (1)(c), the plaintiff has to demonstrate readiness and
      willingness throughout to perform his obligations under the
      contract. The plea that the amount would lie in the bank without
E     interest is unfounded and contrary to normal banking practice.
      This is sufficient evidence of the incapacity or lack of readiness
      and willingness on part of the plaintiff to perform his obligations.
      Undoubtedly, the time for deposit could be extended under
      Section 28 of the Act. But the mere extension of time for deposit
F     does not absolve the plaintiff of his obligation to demonstrate
      readiness and willingness coupled with special circumstances
      beyond his control to seek such extension. The plaintiff did not
      aver in the application that he was ready and willing to perform
      his obligations and was prevented from any special circumstances
      from doing so. The pendency of an appeal by the defendant did
G
      not preclude the plaintiff from depositing the amount in proof of
      his readiness and willingness. [Para 10][945-C-F]
            4. According to normal human prudence, land price
      escalates over time. Unless it be a situation of a distress sale, no
      land owner will sell his land for a lesser price than what may have
H
      been recorded in an agreement for sale. The fact that the
          RAVI SETIA v. MADAN LAL AND OTHERS                           941


defendants nos.1 and 2 subsequently sold the land on 16.01.1991        A
to defendants nos.4 to 7 at a lesser price, due to personal
necessity, also mitigates against the plea of the plaintiff that he
was ready and willing to perform his part of the obligations under
the contract. [Para 14][947-B-C]
       5. The plaintiff failed to prove readiness and willingness to   B
perform its obligations under the agreement for sale. However,
in the peculiar facts and circumstances of the case, the respondent
is not entitled to retain the earnest money and it shall be refunded
to the appellant without interest within a period of one month
failing which it shall carry interest at the rate of 7 per cent.       C
[Para 16][947-H; 948-A-B]
      V. S. Palanichamy Chettiar Firm v. C. Alagappan, (1999)
      4 SCC 702 : [1999] 1 SCR 349; Ramankutty Guptan v.
      Avara, (1994) 2 SCC 642 : [1994] 1 SCR 542; Umabai
      and Another v. Nilkanth Dhondiba Chavan (Dead) by                D
      Lrs. and Another, (2005) 6 SCC 243 : [2005] 3 SCR
      521; Dilbagrai Punjabi v. Sharad Chandra, 1988 Supp
      SCC 710 : [1988] Suppl. SCR 276 – relied on.
                      Case Law Reference
[1999] 1 SCR 349               relied on               Para 11         E
[1994] 1 SCR 542               relied on               Para 12
[2005] 3 SCR 521               relied on               Para 13
[1988] Suppl. SCR 276          relied on              Para 15
                                                                       F
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2837
of 2011.
      From the Judgment and Order dated 13.01.2009 of the High Court
of Punjab and Haryana at Chandigarh in Civil Regular Second Appeal
No. 2443 of 1999.
                                                                       G
       Amit Anand Tiwari, Ms. Mary Mitzy, Ms. Harshal Gupta, Advs.
for the Appellant.
     Ranjit Thomas, Sr. Adv., Ms. Shashi Juneja, V. N. Raghupathy,
Mohit Singh, Advs. for the Respondents.
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942             SUPREME COURT REPORTS                          [2019] 13 S.C.R.


A           The Judgment of the Court was delivered by
            NAVIN SINHA, J.
             1. The plaintiff assails correctness of the order allowing the second
      appeal of the defendants. By the impugned order, the High Court set
B     aside the concurrent orders of the courts below decreeing the plaintiff’s
      suit for specific performance.
             2. The plaintiff filed a suit for specific performance of agreement
      for sale dated 10.11.1989 with regard to 2/3rd of the lands owned by
      defendants 1 and 2 as Defendant No. 3 declined to sign the agreement.
C     Rs. 50,000/- was paid as earnest money and the balance consideration
      of Rs.3,10,490/- was to be paid at the time of execution. The agreement
      provided for execution of the sale deed on or before 30.04.1990. The
      Trial Court decreed the suit holding that the plaintiff had remained present
      in the office of the Sub-Registrar for registration of the sale documents
      on 30.04.1990, but defendant nos. 1 and 2 did not appear for execution.
D     During the pendency of the proceedings, defendant nos. 1 and 2 sold the
      lands to defendant nos. 4 to 7 by three separate sale deeds dated
      16.01.1991. The first appeal by the defendants was dismissed holding
      that defendant nos. 4 to 7 were not bonafide purchasers. Thus, the present
      appeal.
E
              3. Shri Amit Anand Tiwari, learned counsel for the appellant-
      plaintiff, submitted that the High Court in a second appeal ought not to
      have interfered with a concurrent finding of fact that the plaintiff was
      ready and willing to perform his part of the obligations under the
      agreement. Defendant nos. 1 and 2 had failed to appear before the Sub-
F     Registrar for execution on 30.04.1990. The plaintiff never received the
      purported notices from defendant nos.1 and 2 dated 28.05.1990 and
      12.06.1990 requiring the plaintiff to execute the sale deed on 25.06.1990.
      The subsequent sale to defendants 4 to 7 has been held to be not bonafide,
      but a sham transaction. The plaintiff had been granted extension of time
      for deposit of the balance consideration by the Trial Court till the disposal
G
      of the first appeal. The balance consideration was deposited after decision
      in the First Appeal. In the alternative, a submission was made that if the
      appeal is not to be allowed, defendants 1 and 2 may be directed to pay
      the sum of Rs.1,00,000/- to the plaintiff comprising the earnest money
      plus damages as claimed in the suit.
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           RAVI SETIA v. MADAN LAL AND OTHERS                                943
                     [NAVIN SINHA, J.]

       4. Shri Ranjit Thomas, learned senior counsel appearing for the       A
defendants-respondents, submitted that the plaintiff had failed to prove
readiness and willingness to perform its obligations under the agreement.
The defendants were not put on notice for appearance before the Sub-
Registrar on 30.04.1990. The notices dated 28.05.1990 and 12.06.1990
were sent by defendants 1 and 2 through registered post at the correct
                                                                             B
residential address of the plaintiff. The plaintiff did not respond to the
same because he did not have the capacity to perform his obligations
under the agreement and failed to deposit the balance consideration within
the two months’ time granted by the Trial Court on 01.06.1994. The
application for extension of time made after expiry of the time prescribed
is sufficient evidence for the incapacity of the plaintiff to perform his    C
obligations demonstrating readiness and willingness. The High Court in
second appeal was empowered to set aside concurrent findings of facts
if they were perverse.
       5. We have considered the submissions on behalf of the parties
and have also been taken through the orders under appeal. Defendants         D
nos. 1 to 3 owned 61 karnals 17 marlas of lands in Village Gumjal, Tehsil
Abohar, District Ferozpur. Defendant no.3 having refused to sign the
agreement for sale dated 10.11.1989, the plaintiff instituted a suit for
enforcement of the agreement with regard to the 2/3rd share of defendants
1 and 2. The sale deed was to be executed on or before 30.04.1990.
The Trial Court and the First Appellate Court arrived at the finding of      E
readiness and willingness on part of the plaintiff solely on basis of a
certificate produced by them from the Sub-Registrar confirming their
presence before him on 30.04.1990 for execution. Apart from the same,
no further evidence was led by the plaintiff to demonstrate readiness
and willingness including the continuous capacity for discharge of the       F
balance consideration. The plaintiff in its application before the Sub-
Registrar stated that he had required defendants 1 and 2 to be present
for registration on 25.06.1990. No evidence whatsoever has been led by
the plaintiff in support of the same. We are of the considered opinion
that in the circumstances the certificate from the office of the Sub-
Registrar cannot be construed as conclusive evidence to non-suit             G
defendants 1 and 2. The findings to that effect are therefore held to be
unsustainable.
      6. Defendant nos. 1 and 2 by registered notices dated 28.05.1990
and 12.06.1990 required the plaintiff to get the sale deed executed by
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944             SUPREME COURT REPORTS                          [2019] 13 S.C.R.


A     25.06.1990. The plaintiff does not dispute that the communication was
      properly addressed and sent through registered acknowledgement due.
      If it was returned back with the endorsement that the plaintiff was not
      available at his home, defendants 1 and 2 were not required to do anything
      further. If the plaintiff was of the opinion that the endorsement was
B     wrong, it was for him to have contended so and led necessary evidence
      in this regard. The Trial Court rightly did not disbelieve defendants 1 and
      2, but without returning any finding in that regard preferred to rely on the
      unsubstantiated claim of the plaintiff of having been present before the
      Sub-Registrar on 30.04.1990. The said finding is also held to be
      unsustainable.
C
             7. Under Section 16 of the Specific Relief Act, 1963 (for short
      “the Act”), there are certain grounds which bar the relief of specific
      performance of the contract. This section, insofar it is relevant, is as
      under:

D           “16. Personal bars to relief.—Specific performance of a contract
            cannot be enforced in favour of a person—
                   (a)-(b)      *        *       *
                  (c) who fails to aver and prove that he has performed or
            has always been ready and willing to perform the essential terms
E           of the contract which are to be performed by him, other than
            terms the performance of which has been prevented or waived
            by the defendant.”
             8. The Trial Court decreed the suit on 01.06.1994 and granted
      time to the plaintiff for deposit of the balance consideration within two
F     months from 01.06.1994, i.e. by 31.07.1994. The plaintiff offered no
      explanation whatsoever for the failure to comply the direction. After
      expiry of the time granted for deposit, on 02.08.1994 the plaintiff filed an
      application before the Trial Court that in view of the pendency of the
      First Appeal preferred by defendants, the time for deposit may be
G     extended as otherwise the amount would lie in the bank without interest.
      On 02.08.1994 itself, the time for deposit was extended till disposal of
      the First Appeal. The defendants’ challenge to the ex-parte order was
      unsuccessful on technical grounds.
            9. There can be no straight jacket formula with regard to readiness
H     and willingness. It will have to be construed in the facts and circumstances
            RAVI SETIA v. MADAN LAL AND OTHERS                                   945
                      [NAVIN SINHA, J.]

of each case in the light of all attending facts and circumstances. We           A
are of the considered opinion, that in the facts and circumstances of the
present case, the failure of the plaintiff to offer any explanation why the
balance consideration was not deposited within the time granted, the
filing of the application for extension of time after expiry of the prescribed
period coupled with the frivolousness of the grounds taken in the
                                                                                 B
application for extension that the money would lie in the bank without
earning interest, are all but evidence of incapacity on part of the plaintiff
to perform his obligations under the agreement and reflective of lack of
readiness and willingness. He preferred to wait and abide by the gamble
of a favourable decision in the first appeal.
       10. The grant of relief for specific performance under Section 16         C
(1)(c) of the Act is a discretionary and equitable relief. Under Section
16 (1)(c), the plaintiff has to demonstrate readiness and willingness
throughout to perform his obligations under the contract. The plea that
the amount would liein the bank without interest is unfounded and contrary
to normal banking practice. To our mind, this is sufficient evidence of          D
the incapacity or lack of readiness and willingness on part of the plaintiff
to perform his obligations. Undoubtedly, the time for deposit could be
extended under Section 28 of the Act. But the mere extension of time
for deposit does not absolve the plaintiff of his obligation to demonstrate
readiness and willingness coupled with special circumstances beyond
his control to seek such extension. The plaintiff did not aver in the            E
application that he was ready and willing to perform his obligations and
was prevented from any special circumstances from doing so. The
pendency of an appeal by the defendant did not preclude the plaintiff
from depositing the amount in proof of his readiness and willingness.
Readiness has been interpreted as capacity for discharge of obligations          F
with regard to payment. The High Court has rightly observed that there
was no stay by the Appellate Court of the decree under appeal to justify
non-deposit during the pendency of the appeal. The grant of extension
of time cannot ipso facto be construed as otherwise demonstrating
readiness and willingness on part of the plaintiff. The plaintiff was required
to plead sufficient, substantial and cogent grounds to seek extension of         G
time for deposit because otherwise it becomes a question of his conduct
along with all other attendant surrounding circumstances in the facts of
the case. We therefore find no infirmity in the order of the High Court
concluding that the plaintiff in the facts and circumstances was not ready
and willing to perform his obligations.                                          H
946            SUPREME COURT REPORTS                         [2019] 13 S.C.R.


A           11. In V.S. Palanichamy Chettiar Firm vs. C. Alagappan,
      (1999) 4 SCC 702, it was observed as follows :
            “17. The agreement of sale was entered into as far back on
            16-2-1980, about 19 years ago. No explanation is forthcoming as
            to why the balance amount of consideration could not be deposited
B           within the time granted by the Court……Merely because a suit is
            filed within the prescribed period of limitation does not absolve
            the vendee-plaintiff from showing as to whether he was ready
            and willing to perform his part of the agreement and if there was
            non-performance, was that on account of any obstacle put by the
            vendor or otherwise. Provisions to grant specific performance of
C           an agreement are quite stringent. Equitable considerations come
            into play. The court has to see all the attendant circumstances
            including if the vendee has conducted himself in a reasonable
            manner under the contract of sale….. It is not the case of the
            respondent decree-holders that on account of any fault on the
D           part of the vendor judgment-debtor, the amount could not be
            deposited as per the decree……That apart, no explanation
            whatsoever is coming from the respondent decree-holders as to
            why they did not pay the balance amount of consideration…..
            Equity demands that discretion be not exercised in favour of the
            respondent decree-holders and no extension of time be granted to
E           them to comply with the decree.”
            12. In our opinion, had the plaintiff deposited the amount after
      expiry of the time but during the pendency of the appeal, as held in
      Ramankutty Guptan vs. Avara, (1994) 2 SCC 642, entirely different
      considerations may have arisen. The judgement in any event is based on
F     its own peculiar facts and circumstances.
             13. In Umabai and Another vs. Nilkanth Dhondiba Chavan
      (Dead) by Lrs. and Another, (2005) 6 SCC 243, it has been observed
      as follows :

G           “30. It is now well settled that the conduct of the parties, with a
            view to arrive at a finding as to whether the plaintiff-defendants
            were all along and still are ready and willing to perform their part
            of contract as is mandatorily required under Section 16(c) of the
            Specific Relief Act must be determined having regard to the entire
            attending circumstances. A bare averment in the plaint or a
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            RAVI SETIA v. MADAN LAL AND OTHERS                                   947
                      [NAVIN SINHA, J.]

       statement made in the examination-in-chief would not suffice.             A
       The conduct of the plaintiff-defendants must be judged having
       regard to the entirety of the pleadings as also the evidence brought
       on records.”
       14. According to normal human prudence, land price escalates
over time. Unless it be a situation of a distress sale, no land owner will       B
sell his land for a lesser price than what may have been recorded in an
agreement for sale. The fact that the defendants nos.1 and 2 subsequently
sold the land on 16.01.1991 to defendants nos.4 to 7 at a lesser price,
due to personal necessity, also mitigates against the plea of the plaintiff
that he was ready and willing to perform his part of the obligations under
the contract.                                                                    C

      15. There can be no quarrel with the well settled proposition of
law that in a second appeal, the High Court ought not to enter into
reappreciation of evidence to arrive at new findings, except on pure
questions of law. But if the findings are perverse, based on complete
misappreciation or erroneous consideration of evidence, and the failure          D
to consider relevant evidence, it becomes a question of law. In Dilbagrai
Punjabi vs. Sharad Chandra, 1988 Supp SCC 710,it was observed as
follows:
       “5…..The High Court was right in pointing out that the courts
       below had seriously erred in not considering the entire evidence          E
       on the record including the aforesaid documents. It is true that the
       High Court while hearing the appeal under Section 100 of the
       Code of Civil Procedure has no jurisdiction to reappraise the
       evidence and reverse the conclusion reached by the first appellate
       court, but at the same time its power to interfere with the finding       F
       cannot be denied if when the lower appellate court decides an
       issue of fact a substantial question of law arises. The court is
       under a duty to examine the entire relevant evidence on record
       and if it refuses to consider important evidence having direct
       bearing on the disputed issue and the error which arises is of a
       magnitude that it gives birth to a substantial question of law, the       G
       High Court is fully authorised to set aside the finding….”
       16. In view of the discussion, we arrive at the conclusion that the
plaintiff failed to prove readiness and willingness to perform its obligations
under the agreement for sale. We are of the considered opinion that
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948              SUPREME COURT REPORTS                      [2019] 13 S.C.R.


A     there is no merit in the present appeal. However, in the peculiar facts
      and circumstances of the case, we are of the considered opinion that the
      respondent is not entitled to retain the earnest money and it shall be
      refunded to the appellant without interest within a period of one month
      failing which it shall carry interest at the rate of 7 per cent.
B            17. The appeal is dismissed. There shall be no order as to costs.


      Devika Gujral                                            Appeal dismissed.



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