H MOHAMMED IQUBAL Vs. SULTHAN MARICAR

JUDGEMENT

(1.) THIS appeal has been directed against the judgment in O.S.No.16 of 1995 on the file of the Additional District Judge, Pondicherry at Karaikal. The unsuccessful plaintiff is the appellant herein. 2.The short facts of the plaint in brief are as follows:- The first defendant is the owner of the property schedule to the plaint. He had purchased the same under the sale deed dated 16.3.1976 under Document No.82/76 of Neravy Sub-Registrar's Officer at T.R. Pattinam. On 28.2.1992 the plaintiff agreed to purchase the property for a sale consideration of Rs.2,75,000/-. Accordingly, a sale agreement was entered into between the plaintiff and the second defendant, power of attorney agent of the first defendant. On the date of sale agreement itself the plaintiff had paid Rs.50,000/-. The said amount was deposited in the Savings Bank account of the defendant with Indian Overseas Bank, Karaikal. Time for performance of the sale was initially set at six months from the date of agreement. Soon after the agreement the first defendant left for Singapore, without informing the plaintiff of the probable date of his return. However, he had appointed the second defendant, his brother-in-law, as his general power of attorney to receive the balance of sale consideration before the plaintiff. As per the contract of sale, the defendants should execute the sale deed in favour of the plaintiff or in the name of his nominee. There was no stipulation that the sale deed should be executed by the power agent of the first defendant. The period stipulated ie., six months for executing the sale deed has come to an end and the first defendant was out of India, the plaintiff agreed to release another payment of Rs.50,000/- in addition to Rs.50,000/- paid on the date of agreement. THIS offer was made to show that he was ready to have the sale concluded and that the sale cannot be concluded in the absence of the 1st defendant himself. The plaintiff paid Rs.50,000/- on 21.8.1994 in cash and the second defendant as power agent has received it. The first defendant had not returned to India even by 15.10.1994. The power agent demanded from the plaintiff another sum of Rs.50,000/- as further part payment towards sale consideration. The said sum of Rs.50,000/- was also paid by the plaintiff to the second defendant, who is the power of attorney of D1. The said amount was received by D2 to be invested in the account of D1 to be kept in Pondichery State Co-operative Bank Ltd. As there was no definite information of the 1st defendant returning to India, the plaintiff also went abroad. After the plaintiff left for France, the 1st defendant arrived India and he became tempted as there was higher offers for his property he became suddenly sentimental and went about telling the plaintiff's relatives that he did not want to sell away his only property. The notice issued by the first defendant was returned since at that time the plaintiff was in abroad. The plaintiff came to India to attend the marriage of his cousin and a notice dated 9.12.1994 was received by the plaintiff from the first defendant. Even in the notice the first defendant had admitted that he had received through his power of attorney agent (D2) two part payments of Rs.50,000/- each, but he would allege that his power of attorney agent (D2) has not behaved well. The first defendant had offered to return a sum of Rs.1,00,000/- and would state that the remaining Rs.50,000/- the plaintiff has to forego. The plaintiff immediately replied stating that he is always ready and willing to get the sale deed executed. As there was no response from the defendants, the plaintiff left India to France in January-1995. The first defendant did not return to India till December-1995. The second defendant has failed to authorize D1 to execute the sale deed in respect of the property scheduled to the agreement of sale entered into between the plaintiff and D1 on behalf of D2. The plaintiff is having means to pay the balance of sale consideration. The delay in filing the suit is only due to the absence of the 1st defendant in India and the plaintiff was also away in abroad during the relevant period. The time originally fixed was only formal and it was not intended to be essence of the contract. Now the first defendant is attempting to sell the property to third parties. The plaintiff was always ready and willing to perform his part of the contract. Hence, the suit. 3. The first defendant in his written statement would contend that the agreement between the plaintiff and the first defendant is admitted and under the agreement Rs.50,000/- was paid by the plaintiff to the first defendant. Both the parties agreed that the period of six months stipulated for the execution of sale deed was meant to be one of the important condition for agreement of sale. In other words the period of 6 months fixed for performance of the agreement for sale was treated as the essence of the agreement. Since the time was considered to be essence of the agreement the transaction should have been completed within the period of 6 months from the date of agreement. D1 had nominated D2 as his power of attorney agent by a registered power deed dated 28.2.1994. Under the said deed D1 had authorized D2 to take steps for completing the transaction of sale in pursuance of the agreement for sale. He was not given authority to take steps for completing the transaction of sale beyond the period of 6 months fixed in the agreement. As per the terms of the agreement in case of default D1 is liable to return Rs.50,000/- paid towards advance on the date of sale agreement. In addition to this, D1 was liable to pay additional sum of Rs.50,000/-. In case of failure on the part of the plaintiff he has to forego the advance amount of Rs.50,000/- paid to the second defendant. After the expiry of 6 months from the date of sale agreement both the parties are entitled only to enforce the default clause and not the agreement of sale. Hence, the suit is liable to be dismissed. Under the lawyer's notice dated 9.12.1994 D1 has also cancelled the agreement for sale and called upon the plaintiff to take back the sum of Rs.1,00,000/- and the plaintiff was also informed that he being the defaulting party would have to pay the sum of Rs.50,000/-. In the reply notice dated 11.01.1995 the plaintiff had insisted D1 to execute the sale deed in terms of the agreement. The plaintiff had won over the second defendant during the absence of the first defendant. THIS defendant has not authorized D1 to receive the balance of sale consideration piecemeal. The second defendant as power of attorney agent has the only authority to receive the balance of sale consideration from the plaintiff within the period of 6 months and to execute the sale deed in favour of the plaintiff. The two payments of Rs.50,000/- each had been made by the plaintiff on a single date i.e., on 15.10.1994 by way of depositing the said sum on that date in fixed deposits in Indian Bank, Neravy an Pondicherry State Co-operative Bank Ltd., Neravy. There was no payment made on 21.8.1994. The endorsement of payment of Rs.50,000/- on 21.8.1994 for the sale agreement is false and has been brought about by the plaintiff with the collusion of the second defendant. The endorsement of credit of Rs.50,000/- in the sale agreement on 21.8.1994 has been brought about to show falsely that this payment has been made within the period of 6 months that is before 28.8.1994. The payment on 15.10.1994 to the second defendant by the plaintiff was not authorized under the power. By bringing about the false credit endorsement of payment of Rs.50,000/- on 21.8.1994 with the collusion of the 2nd defendant, the plaintiff has not come to Court with clean hands and therefore, he is not entitled to the discretionary relief of specific performance of the agreement for sale. The fist defendant has rightly cancelled the agreement of sale under the notice issued by him. The first defendant is willing to deposit the sum of Rs.1,50,000/- into the Court and the first defendant would be entitled to payment of Rs.50,000/- from out of the deposit to be made as per the agreement for sale since the plaintiff is the defaulting party. Hence, the suit is liable to be dismissed. 4. In his additional written statement the first defendant has stated that the plaintiff is a French Citizen and that he cannot buy immovable property in India without the permission of Reserve Bank of India in view of the provisions contained in Section 31 of the Foreign Exchange Regulation Act and hence, the suit is liable to be dismissed on that ground too. 5. Before the Trail Court P.W.1 to P.W.3 were examined and Ex.A.1 to Ex.A.7 were marked on the side of the plaintiff. The first defendant has examined himself as D.W.1 and exhibited Ex.B.1 to Ex.B.3. On the basis of the oral and documentary evidence and also on due consideration of the submissions made by the learned counsel on both sides, the learned trial Judge came to the conclusion that the plaintiff is not entitled to any relief in the suit and accordingly, dismissed the suit, which necessitated the plaintiff to approach this Court by way of this appeal. 6. The points that arose for consideration in this appeal are as follows:- 1) Whether the parties to the agreement Ex.A.2 dated 28.2.1994 considered that the time is essence of the contract for executing the sale deed by D1 in favour of the plaintiff in terms of Ex.A.2-sale agreement" 2) Whether the plaintiff has performed his part of the contract in terms of Ex.A.2" 3) Whether the decree and judgment in O.S.No.16 of 1995 on the file of the Additional District Judge, Pondicherry at Karaikal, is liable to be set aside for the reasons stated in the memorandum of appeal" 7. Point Nos.1 & 2:- Heard the learned senior counsel Mr. G. Masilamani appearing for the appellant and the learned senior counsel Mr. K. Chandramouli appearing for the third respondent. According to the learned senior counsel Mr. G. Masilamani appearing for the appellant, parties to Ex.A.2-agreement viz. the plaintiff and D1 never considered that the sale deed in respect of the property scheduled to Ex.A.2 shall be executed by D1, owner of the property, in favour of the plaintiff within six months from the date of agreement of sale under Ex.A.2. The learned senior counsel for the appellant would contend that even though six months time has been stipulated for enforcing the contract under Ex.A.2, by the act of parties, D2 on behalf of D1 had received a sum of Rs.50,000/- on 21.8.1994 towards balance of sale consideration and also another sum of Rs.50,000/- on 15.10.1994 towards balance of sale consideration, apart from the advance amount of Rs.50,000/- paid by the plaintiff under Ex.A.2 on 28.2.1994. The six months period stipulated under Ex.A.2 expired as early as on 28.08.1994. Even though a sum of Rs.50,000/- was paid on 21.8.1994 ie., within the time stipulated under Ex.A.2, the payment of Rs.50,000/- made on 15.10.1994 was certainly beyond the 6 months period fixed under Ex.A.2 for enforcing the contract. The fact that D2 had received a sum of Rs.50,000/- on 15.10.1994 towards balance of sale consideration from the plaintiff itself will go to show that both the parties have not considered the time as the essence of contract. Under such circumstance, the ratio relied on by the learned senior counsel for the respondent in 1997(I) CTC 360 (Seeni Ammal Vs. Veerayee Ammal) as to the dictum that general principle that the time is not essence of the contract relating to immovable property is not applicable, will not applicable to the present facts of the case because both the parties to the contract by their own conduct have not considered the time as the essence of the contract. 8. The learned senior counsel for the appellant would contend that before the issuance of Ex.A.3 notice dated 9.12.1994, D1 has not issued any notice canceling the sale agreement or informing that the D1 was always ready and willing to perform his part of the contract in terms of Ex.A.2-sale agreement and that he has no locus standi to raise a contention that the plaintiff is not entitled to file a suit for specific performance of contract. But the fact remains that the plaintiff till Ex.A.3 - notice dated 9.12.1994 received from D1, has not sent any suit notice demanding D1 or D2 to execute the sale deed in terms of Ex.A.2-sale agreement informing that the plaintiff is always ready and willing to perform his part of the contract. It is pertinent to note that even with the plaint the plaintiff to show his bonafides has not deposited the balance of sale consideration. The plaint was presented on 3.4.1995. Only on the said date of presentation of the plaint, the first defendant has cancelled the deed of power of attorney agent in favour of D2 under Ex.B.2. Under Ex.B.1, D1 has given general power in favour of D2 empowering him to receive advance amount on the basis of the sale agreement, to encumber the properties belonging to D1 and also to sign in the sale deed executed on behalf of D1 and to collect rent etc., Under such circumstance, it is not open to the first defendant to contend that he has not authorized D2 to receive further advance in respect of balance of sale consideration on 15.10.1994, after expiry of 6 months period stipulated under Ex.A.2. 9. As per Section 16(c) of the Specific Relief Act, it is the bounden duty of the plaintiff to show that he was always ready and willing to perform his part of the contract in terms of Ex.A.2-sale agreement dated 28.2.1994. Section 16(c) of the Specific Relief Act runs as follows:-