THAKAMMA MATHEW Vs. M AZAMATHULLA KHAN

JUDGEMENT

(1.) This appeal is directed against the judgment dated July 18, 1990 of the High Court of Karnataka in Regular First Appeal No. 154 of 1985. It arises out of O.S. 9213 of 1980 filed by the appellant against M. Azmathulla Khan (hereinafter referred to as the 'defendant') for cancellation of an agreement to sell dated November 12, 1974 and for recovery of possession of the premises bearing No. 102, Wheeler Road, Gooxe Town, Bangalore, the said property was purchased by the appellant from one D. Ponnurangam under a registered sale deed dated June 29, 1972, by the agreement dated November 12, 1974, the appellant agreed to sell the said property to the defendant for a sum of Rs.90,000/-. The defendant paid a sum of Rs. 3,000/- as advance on the date of execution of the said agreement and paid a further sum of Rupees 15,000/- on November 25, 1974. Under the agreement the last date for finalisation of the transaction was January 11, 1975. It appears that Smt. Mohanambal, one of the sisters of Pounnurangam, had not joined in execution of the sale deed dated June 29, 1972 in favour of the appellant. In the agreement dated November 12, 1974, it was provided that the said Smt. Mohanambal had disclaimed any interest in the property and that the appellant would make available a declaration to that effect before the finalisation of the sale transaction and would also give necessary indemnity bond of either herself or of her husband giving security for indemnifying the possible damages or loss to the defendant to the extent of Rs. 5,000/- and the interest thereon from the date of the sale deed at 12% per annum in case the said Smt. Mohanambal or anybody through her puts him to such loss or damage or deprives him out of the property to the extent of her share. The case of the appellant is that about a fortnight after the execution of the said agreement dated November 12, 1974, the defendant obtained possession of the property above mentioned on the ground that it was needed temporarily in connection with a marriage. On January 7, 1975, the defendant gave a notice to the appellant to which the appellant sent a reply dated January 9, 1975.

(2.) The transaction of sale was not finalised within the period of two months prescribed in the agreement. On March 10, 1975, the appellant sent a notice that since the sale had not been completed within the period prescribed, the agreement had been cancelled and the advance of Rs. 18,000/- had been forfeited. By the said notice the defendant was called upon to deliver possession of the suit premises and pending delivery of possession to pay damages for use and occupation at the rate of Rs. 500/- per month. Thereafter on March 18, 1975, the appellant filed the suit giving rise to this appeal for a declaration that agreement dated November 12, 1975 stands cancelled and for recovery of possession of the suit premises and for Rs. 1,870/- towards damages. In the said suit, the case of the appellant was that the time was essence of the contract and since the defendant had failed to perform his part of the contract, the agreement had been cancelled and the advance amount of Rs. 18,000/- had been forfeited. The said suit was resisted by the defendant who pleaded that he was ready to perform his part of the contract and the appellant had defaulted. The defendant also pleaded that he has obtained possession of the property in part performance of the contract and the appellant was not entitled to claim possession or damages. He claimed that he had spent nearly Rs. 20,000/- on improvements in suit premises. The defendant also pleaded that he was ready and willing to take a regular sale deed provided appellant complied with the terms of the agreement as regards Smt. Mohanambal's share in the suit property.

(3.) The trial Court, i.e., tenth Additional City Civil Judge, Mayo Hall, Bangalore, by his judgment dated September 12, 1984, decreed that the agreement dated November 12, 1974 is cancelled and the appellant was directed to refund Rs. 18,000/- received by her as advance against the agreement to the defendant with the interest of 6% per annum. The defendant was directed to hand over back possession of the property and pay a sum of Rs. 215/- by way of past damage and future damage at the rate of Rs. 65/- per month. The trial Court was of the view that having regard to the fact that the agreement was in respect of sale of immovable property time was not the essence of the contract. It was further found that there was ample evidence to show that the appellant was prepared to receive the balance of sale consideration less Rs. 5,000/- as provided in the agreement for sale for indemnifying the share of Smt. Mohanambal and that the appellant had also established that she had deposited a sum of Rs. 6,000/- in the State Bank of Mysore Branch, Cook Town, towards the indemnity and in these circumstances, there was no justification for the defendant to insist on the appellant, as a condition precedent, to obtain a declaration from Smt. Mohanambal and in addition offer security in the form of indemnity bond in a sum of Rs. 5,000/-. It was further held that defendant had, by his conduct, made it impossible for the appellant to complete the transaction. As regards the defence of part performance set up by the defendant, the trial Court found that there was no document evidencing payment of Rs. 15,000/- or the circumstances under which the possession was delivered and that there was no reliable evidence on the side of the defendant to show that he came into possession in performance of the agreement to sell and therefore, Section 53 A of the Transfer of Property Act could not be invoked by the defendant in defence of the suit. The trial Court held that the appellant was ready to perform her part of the contract while the defendant was not and in the circumstances, the appellant was perfectly justified in terminating the contract by issuing the notice dated February 10, 1975 and she was entitled for cancellation of the agreement for sale and for recovery of possession for suit premises. The trial Court rejected the case of the defendant with regard to improvements which he claimed to have carried out in the property. The trial Court considered the question whether specific performance of the agreement for sale could be granted although the defendant had not sought for specific performance and after taking into consideration the facts and circumstances, it held that there was no justification for granting specific performance of the agreement or to allow the continuance of the present state of affairs to the detriment of the appellant. At the same time, it was held that the appellant was not entitled to forfeit the amount of Rs. 18,000/- received by her. In view of the findings aforesaid, the trial Court passed the decree as mentioned above.