ZIYAUDDIN ABDUL HAMID SHEIKH Vs. DINAZ BEJAN ANKLESHWARIYA

JUDGEMENT

(1.) The appellant challenges order dated 16/5/2014 passed by learned Principal Senior Civil Judge, Ankleshwar below exh. 5 in Special Civil Suit No. 52/2013, whereby an application under Order 39 Rule 1 and 2 of the Code of Civil Procedure, 1908 preferred by the appellant came to be dismissed.

(2.) The appeal was admitted on 9/7/2014. On the same day, the following order was passed in Civil Application No. 7471/2014, which the appellant has preferred for restraining the respondent from alienating the suit property. The following order was passed on Civil Application : - "Rule returnable on 9.9.2014. 1. Learned Advocate Mr. Kariel for the applicant - original plaintiff states at bar that the applicant - plaintiff is not in possession of the suit land and further, the plaintiff is ready and willing to deposit balance consideration of Rs.219 lac with the trial Court, as the plaintiff has already paid a sum of Rs.218 lac to the respondent - defendant. Under the circumstances, parties to the suit are directed to maintain status quo position qua suit land as existing today. Upon deposit of Rs.219 lac by the plaintiff within two months with the trial Court, the leaned Judge shall deposit the said amount in the name of the plaintiff in any nationalized bank initially for a period of six months in cumulative FDR and it shall be renewed from time to time till further order passed by this Court in appeal from order. The original FDR shall be kept with the Registry of the trial Court. 2. It is clarified that order to maintain status quo position qua suit land is granted subject to deposit of balance consideration by the plaintiff with the trial Court. In case of default, the interim relief granted by this Court shall stand vacated without any further order. It is further clarified that no extension will be granted to deposit the amount. In case of difficulty, parties are at liberty to apply for early hearing." Para 3 to 5 XXX XXX XXX 6.The short fact giving rise to the present appeal are that the respondent executed sale deed dated 8/12/2011 and 9/12/2011 in respect of two plot bearing survey/block No. 193/1 situated at Bharuch District, sub­district - Ankleshwar moje village Diva for consideration of Rs.4.37 Crores. The appellant paid sum of Rs.2.18 Crores to the respondent at the time of execution of sale deed. The respondent also precluded one irrevocable power of attorney in respect of the suit land property in favour of the appellant. The said power of attorney was irrevocable, still, however, respondent by public notice dated 14/11/2012 inserted in vernacular daily "Sandesh" cancelled the power of attorney. The respondents were required to execute the sale deed in respect of the suit premises after getting the title clear and therefore, the appellant filed suit in the Court of learned Senior Civil, (Judge) Ankleshwar for specific performance of the agreement to sell or in the alternative for compensation from the respondent to the tune of Rs.4.36 Crores with 24% interest. In the suit, the appellant also preferred an application exh. 5 under Order 39 rule 1 and 2 of the Code restraining the respondent from alienating the suit property in any manner. The learned trial Judge by the impugned order dismissed the application and therefore, the present appeal. Para 7 XXX XXX XXX 8. Mr. Kariel, learned Advocate submits that pursuant to order of this Court passed on 9/9/2014, the appellant has deposited sum of Rs. 2.19 Crores in the trial Court and further contends that the respondents have revoked the power of attorney by a public notice but the power attorney was irrevocable. It is his further contention that the appellant has made substantial payment towards the sale consideration, which is agreed between the parties. According to the knowledge of the appellant, an ONGC pipeline was passing through the situated land and therefore, schedule of payment as mentioned in the sale deed was not adhered to by the appellant. He further submits that by depositing the balance amount of the sale consideration in the trial Court, the appellant has shown his readiness and willingness to perform his part of agreement. He, therefore, submits that the learned trial Judge has committed serious error in dismissing exh. 5 application. 9. On the other hand, Mr.Vimal Patel, learned Advocate submits that the time is essence of the contract between the parties but the appellant did not make the payment of the remaining sale consideration as per the schedule mentioned in the agreement to sell. He further contends that the appellant had never brought to the notice of the respondent about passing of the ONGC pipeline through the suit land. He also submits that the appellant never communicated his readiness and willingness to perform his part of the agreement to sell. He further submits that the appellant was called upon to perform his part of the publication vide termination notice dated 31/12/2012 but the appellant neither complied with notice nor replied to it. He further submits that this termination notice is not challenged in the suit and therefore, the suit itself is not maintainable. It is his further submission that thoughthe appellant is not in possession of the suit premises, he had made attempts to grab the land, for which, the criminal complaint was also filed against him. He has further urged that considering the conduct of the appellant, now the respondent do not intend to sell the suit land to him as he would be a nuisance. According to his submission, there is no perversity or illegality in the impugned order of learned Magistrate, therefore, it does not warrant any interference in this appeal. 10. He has relied upon the decision of the Supreme Court in case of Mohd. Mehtab Khan and Ors v. Khushnuma Ibrahim Khan and Ors (2013) 9 SCC 221 in support of his contention that interference in appeal is not permissible unless the exercise of the discretion by the trial Court is palpably incorrect or untenable. 11. In support of his submission that time was essence of the contract between the appellant and the respondent, he has relied upon the decision in case of Mangabhai Jadavbhai Makwana v. Tekchand Chhaganlal Shah, 2013 (0) GLHEL­HC ­230103. Para 12 to 13 XXX XXX XXX 14. It is an undisputed fact that two notarized agreements to sale have been executed between the appellant and the respondents. Pursuant to the execution of these two agreements and in compliance of the terms thereof, the appellant has made payment to the tune of Rs.2.18 Crore. Out of total sale consideration of Rs.4.37 Crore to the respondent. The agreement to sell contends Clause 3, whereby the appellant was required to make the payment of reminder of the sale consideration as per the schedule mentioned therein. The appellant committed default in adhering the schedule of payment as contained in the agreement to sell. His explanation for not making the payment as per the schedule as can be seen from the averments made in the suit. Hence, exh 5 application is that the respondents were required to make the title of the suit premises clear and according to him, an ONGC pipeline was passing through certain portion of the suit premises. In the meantime, the respondents gave a public notice on 14/12/2012 whereby the irrevocable power of attorney, which was executed in favour of the appellant came to be cancelled. This cancellation of the irrevocable power of attorney in respect of the suit property gave cause to the appellant to file the suit against the respondents for specific performance of the agreement to sell of the suit premises. 15. The contention of Mr. Patel, learned Advocate for the respondents that the time was essence of the contract between the parties is concerned, the clause 6 of the agreement to sell stipulates that schedule of payment as contained therein is the essence of the contract. If the the appellant fails to adhere to the schedule of the payment, the respondent would be at liberty, which entitle to termination of contract by giving fifteen days Registered AD termination notice to him. According to Mr. Patel, learned Advocate in view of this clause the termination notice dated 31/12/2012 was given to the appellant, and though this notice was received by him the same was neither replied nor balance of sale consideration was paid to the respondents and accordingly and therefore, the agreement to sell stands terminated. The contention of Mr. Patel is that the suit itself is not maintainable as the appellant has not challenged the termination notice by way of consequential relief in the suit is also not examined in detail and is left to be agitated before the trial Court at the time of the trial of the suit. So far as these contentions are concerned, they need to be tested at the time of trial of the suit. The said termination notice has to be read in conjunction with Clause '6' of the agreement to sell to determine whether the agreement to sell stands cancelled by the said notice or not can be decided only after the evidence is led in the suit and if any opinion is expressed on this issue, I am of the view that it is likely to affect either party in the trial of the suit and therefore, I do not propose to examine this contention of Mr. Patel, learned Advocate for the respondent in detail. 16. The judgement of this Court in case of Mangabhai J. Makwana (supra) relied on by Mr. Patel, learned Advocate in para No. 12 reads as under : - "12. Normally, in the contract relating to immovable property, time cannot be essence of the contract and time stipulated for performance even if expressly read and shown to be essence requires to be read as not being essence of the contract and subsequently the contract relating to immovable property does not become terminable by failure to perform before specified time. In the case on hand, whether time was the essence of the contract or not and to find out whether the time was essence of the contract, this Court will have to examine the express terms set out in the agreement. The first important condition is condition No.3. The said condition No.3 makes it clear that the time limit of the Banakhat i.e. contract of sale was fixed for four months. Similarly, condition No.4 makes it clear that the payment of sale price was not dependent on handing over of the possession or the execution of the sale deed. On combined reading of condition Nos.3 and 4 stipulates that while time would be the essence of the contract in regard to the terms relating to the payment of balance price, but the time was not the essence of contract in regard to the execution of the sale deed or handing over of the possession. So, there is a clear intention making the time essence of the contract for the payment of balance price. Condition No.15 stipulates that one Mr. Devilal cultivates the suit land and further said Mr. Devilal has no right, title and interest in the suit land and therefore, the owners were only obliged to say to said Mr. Devilal to vacate the possession of the suit land and the plaintiff will take over the possession of the suit land from said Mr. Devilal. So, this indicates that it was the plaintiff, who was required to take possession of the suit land from said Mr. Devilal and the owners were not under an obligation to get vacated the land from the possession of said Mr. Devilal. In light of this specified conditions, if we examined the averments made in plaint para No.7, then it transpires that the plaintiff has alleged that the owners and said Mr. Devilal had colluded with each other and further stated that the owners are under obligation to obtain the possession of the suit land from said Mr. Devilal and only thereafter, the plaintiff was required to pay balance price. Such averments made in the plaint are against the true spirit of the contract executed between the plaintiff and the owners and therefore, the plaintiff is not justified in insisting upon the owners to get the suit land vacated from said Mr. Devilal. On reading of agreement as it is, nowhere the owners are under obligation to obtain the possession of the suit land from said Mr. Devilal except owners were obliged to say said Mr. Devilal to vacate the land. In other words, it is clear that the plaintiff on the basis of whatever initial examination of the suit land, has unconditionally agreed to pay the balance amount before handing over of possession takes place as per condition No.15. Thus, it is categorically made clear in the agreement that time regarding payment of balance price was not essence of the contract and such payment was not dependent upon the owners in obtaining possession from said Mr. Devilal. On the contrary, condition No.15 stipulates that the plaintiff shall have to take possession of the suit land from one Mr. Devilal. It is relevant here to reproduce the observations recorded in para 10 and 11 of decision of K.S. Vidyanandam (supra). "10. It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years.From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the timelimits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time limit(s) specified in the agreement have no relevance and can be ignored with impunity ? It would also mean denying the discretion vested in the Court by both Sections 10 and 20. As held by Constitution Bench of this Court in Chand Rani v. Kamal Rani. (1993) 1 SCC 519 : (1993 AIR SCW 1371), "it is clear that in the case of sale of immovable properly there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident ?) : (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract". In other words the Court should look at all the relevant circumstances including the timelimit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India it is wellknown that their prices have been going up sharply over the last few decades particularly after 1973*. In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months' period specified therein for completing the sale expired with 15th of June, 1979. The suit notice was issued by the plaintiff only on 1171981, i.e., more than two years after the expiry of six months' period. The question is what was the plaintiff doing in this interval of more than two years? The plaintiff says that he has been calling upon Defendants 1 to 3 to get the tenant vacated and execute the sale deed and that the defendants were postponing the same representing that the tenant is not vacating the building. The defendants have denied this story. According to them, the plaintiff never moved in the matter and never called upon them to execute the sale deed. The trial Court has accepted the defendants' story whereas the High Court has accepted the plaintiffs story. Let us first consider whose story is more probable and acceptable. For this purpose, we may first turn to the terms of the agreement. In the agreement of sale, there is no reference to the existence of any tenant in the building. What it says is that within the period of' six months. The plaintiff should purchase the stamp papers and pay, the balance consideration whereupon the defendants will execute the sale deed and that prior to the registration of the sale deed, the defendants shall vacate and deliver possession of the suit house to the plaintiff. There is not a single letter or notice from the plaintiff to the defendants calling upon them to get the tenant vacated and get the sale deed executed until he issued the suit notice on 1171981. It is not the plaintiff's case that within six months', he purchased the stamp papers and offered to pay the balance consideration. Defendants' case is that the tenant is their own relation, that he is ready to vacate at any point of time and that the very fact that the plaintiff has in his suit notice offered to purchase the house with the tenant itself shows that the story put forward by him is false. The tenant has been examined by the defendant as DW2. He stated that soon after the agreement, he was searching for a house but could not secure one. Meanwhile (i.e., on the expiry of six months from the date of agreement), he stated, the defendants told him that since the plaintiff has abandoned the agreement, he need not vacate. It is equally an admitted fact that between December 15, 1978 and July 11,1981, the plaintiff has purchased two other properties. The defendants' consistent refrain has been the prices of house properties in Madurai have been rising fast, that within the said interval of 2 1/2 years, the prices went up by three times and that only because of the said circumstance has the plaintiff (who had earlier abandoned any idea of going forward with the purchase of the suit property) turned round and demanded specific performance. Having regard to the above circumstances and the oral evidence of the parties, we are inclined to accept the case put forward by Defendants 1 to 3. We reject the story put forward by the plaintiff that during the said period of 2 1/2 years, he has been repeatedly asking the defendants to get the tenant vacated and execute the sale deed and that they were asking for time on the ground that tenant was not vacating.The above binding means that from 15121978 till 1171981, i.e., for a period of more than 2 1/2 years the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property.We are inclined to accept the defendant's, case that the values of the house property in Madurai town was rising fast and this must have induced the plaintiff to wake up after 21/2 years and demand specific performance. 11. Sri Sivasubramanium cited the decision of the Madras High Court in S. V. Sankaraninga Nadar v. P.T.S. Ratnaswamy Nadar. AIR 1952 Mad. 389 holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the Court by law. We cannot be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties fuelled by larger scale migration of people from rural areas to urban centres and by inflation. Take this very case. The plaintiff had priced to pay the balance consideration, purchase the papers and ask for the execution of sale deed and delivery of' possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs. 5,000/- and that if the defendants fail to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs. 5,000/- (as against the total consideration of Rs. 60,000/) the plaintiff did nothing until he issued the suit notice 2 1/2 years after the agreement. Indeed, we are inclined to think that the rigor of the rule evolved by Courts that time is not of the essence of the contract in the case of immovable properties evolved in times when prices and values were stable and inflation was unknown requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so. Learned Counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising ; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said timelimit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such timelimit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as nonexistent ? All this only means that while exercising its discretion, the Court should also bear in mind that when the parties prescribe certain timelimit(s) for taking steps by one or the other party it must have some significance and that the said timelimit(s)cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)." 17. The reading of the above observations of this Court makes it explicitly clear that normally in contract relating to immovable property, time is not essence of the contract unless there is a recital to that effect in the agreement to sell, wherein it is stipulated that time is the essence of the contract. Here, in the present case, it is true that clause 6 of the agreement to sell refers to term "essence of contract" but then again as I have stated hereinabove, it has to be considered in light of the facts of the case and in light of the evidence that may be produced by the party at the time of filing of suit, from which, it can be said that in fact no adherence to the schedule of payment of the remaining sale consideration amount to the essence of the contract. 18. If the impugned order is considered, it appears that the learned trial Judge was impressed by the fact that the appellant did not make the payment as per the schedule mentioned in the agreement to sell. He has recorded the findings that even after receipt of the termination notice, the appellant has failed to make the payment of the balance amount within fifteen days as per the terms of the agreement to sell. Moreover, the revenue record in respect of the suit did not reveal that any ONGC pipeline was passing through the suit premises. Therefore, according to learned trial Judge, the appellant has failed to show that there was a defect in title of the respondent in respect of the suit land. Broadly, on these reasons, the learned trial Judge has recorded the finding that the appellant has failed to show that prime facie case exists in his favour. 19. Whether the non payment of the balance of the sale consideration can be said to be an essence of the contract can be decided only at the time of trial. Though as admittedly, there is a default on the part of the appellant in making of the payment of the remaining sale consideration on the basis of the termination notice, is required to be interpreted in light of the overall facts of the case and the evidence, which may be adduced at the time of trial. Learned trial Judge has straight way on the basis of this termination notice has concluded that the respondents have terminated an agreement to sell and that because the appellant has not made payment within fifteen days of receipt of termination notice. Therefore, he has no prima facie case and also balance of convenience is not in favour of the appellant cannot be said to be a correct appreciation of the over all facts of the case. The Supreme Court in case of Mohd. M. Khan (supra) relied upon by Mr. Patel, learned Advocate for respondent lays down the proposition of law that under Order 43 Rule 1 ® and Order 39 Rule 1 and 2 read with Section 151, the order of the trial Court cannot be interfered with the appellant unless it is found to be palpably incorrect or untenable and that impugned order of the learned trial Judge does not suffer from any perversity and illegality and does not warrant interference cannot be countenance because the only thing, which seems to have been made that learned trial Judge is non payment of the amount within stipulated time as prescribed in the agreement to sell couple with the failure of the appellant to make such payment within fifteen days of receipt of the termination notice but the learned trial Judge has not addressed himself to the fact of the appellant having paid substantial amount to the respondents as sale consideration and therefore, I am of the view that the learned trial Judge has committed error in refusing protection to the appellant. 20. So far as the submission of Mr. Patel, learned Advocate that the conduct of the appellant of tress passing on the land of the respondent in respect of which, criminal complaint is also filed cannot be a ground at this stage of deciding application under Order 39 Rule 1 and 2. The conduct of the appellant as per the standards of the respondents may amount nuisance and the respondent may not want the appellant in their vicinity but at this interim stage this cannot be a ground not to protect the appellant because in pendency of the suit, the respondent deal with the property, a very purpose of preferring suit would be frustrated and it would, therefore, resulted in the multiplicity of proceedings. 21. For the foregoing reasons, the appeal succeeds and is hereby allowed. The judgment and order dated 16/5/2014 passed by learned Principal Senior Civil Judge, Ankleshwar below exh 5 in Special Civil Suit No. 52/2013 is hereby quashed and set aside and the appellant original plaintiff and respondent original defendants are directed to maintain status quo position qua suit land as existing today in terms of order dated 9/7/2014 passed on civil application No. 7471 of 2014. Para 22 XXX XXX XXX 23. It is clarified that this Court has not gone into merits of the case either way and the trial Court shall decide the suit strictly on the merits of the case without being influenced by either this order or the order passed below exhibit 5 application. Parties are at liberty to move the trial Court for early disposal of the suit. Cases Referred : 1.Mohd. Mehtab Khan and Ors. v. Khushnuma Ibrahim Khan and Ors (2013) 9 SCC 221 (Para 10) Dissented from. 2.Mangabhai Jadavbhai Makwana v. Tekchand Chhaganlal Shah, 2013(0)GLHEL-HC-230103 (Para 11) Relied on. Appearance : Mr. Nikhil S. Kariel, Advocate for the Appellant No. 1, Mr. Vimal M. Patel, Advocate for the Respondents No. 1 - 2. (PJD) (Appeal allowed)