PUDI LAZARUS Vs. REV JOHNSON EDWARD

JUDGEMENT

(1.) The plaintiff in O.S. No. 53 of 1968 on the file of the Court of the District Judge, East Godavari a suit for specific performance which was dismissed is the appellant herein.

(2.) Under an agreement dated 5-10-1966 the 1st respondent herein agreed to sell the appellant herein certain premises in which a High School and an Elementary School were being run for a sum of Rs.48,000. On the date of the agreement an advance of Rs.5,000 was paid. The agreement recited that the sale was being effected for the purpose of discharging the debts incurred by the 1st respondent. The purchase was asked to discharge a mortgage debt of Rs. 12,000 owing to one Merapala Rama Rao, and the purchaser should also discharge sundry debts owing to several creditors. After discharging those debts, the balance amount of sale consideration shall be paid to the vendor at the time of the registration of the sale deed. The site together with sheds and the High School known as Bharatiya Evangilical Mission High School together with the right of management thereof was delivered possession of to the purchaser on the date of the agreement. It was however, provided that the Elementary School should continue to be run by the vendor under his own management and he would vacate the same after the period of two years and shift the school to some other place. In regard to the High School, one Prasada Raju, who was working as the Correspondent of the School, should transfer the correspondentship in favour of the purchaser and the purchaser alone should manage all the responsibilities of the school from that day. It was also agreed that a regular sale deed shall be executed and registered within 2 months from the date of the agreement i.e. on or before 5-12-1966. If the purchaser failed to get the sale deed registered, he would be liable for the debts of the vendor together with interest. He would further have to forego the advance paid by him. On the other hand, if the vendor failed to carry out his part of the contract he was bound to return the advance amount of Rs. 5,000 and further to pay a sum of Rs.5,000 as compensation for the loss incurred by the purchaser. The case of the plaintiff was that he sent a sum of Rs. 7,000 at the end of October 1966 through one Angeswara Rao for discharging some of the sundry debts, but the 1st defendant evaded bringing his creditors. The 1st defendant was also requested to give a list of the creditors, but he evaded and dragged on the matter. On the other hand though on the date of the agreement the 1st defendant addressed a letter to the Educational Authorities to transfer the management of the High School to the plaintiff, later the 1st defendant changed his mind and addressed another letter in the last week of November, 1966 not to transfer the management to the plaintiff. At the same time he wrote to the plaintiff to cancel the agreement. Though initially the plaintiff replied that he would consider he however, positively informed the 1st defendant through mediators that the 1st has to perform the agreement. The plaintiff has always been ready and willing to perform his part of the contract but he came to know in or about the 1st week of February 1968 that the 1st defendant has executed an agreement of sale in favour of the 2nd defendant. He immediately got issued a registered notice to the 1st defendant and sent a copy to the second defendant demanding the 1st defendant to execute the sale deed according to the agreement in favour of the 2nd defendant. The 1st defendant gave a reply with false and untenable allegations. Thereafter he executed the sale deed dated 20-4-1968 in favour of the second defendant. The 2nd defendant was throughout aware of the prior agreement in favour of the plaintiff and was not therefore bona fide purchaser for the value without notice of the agreement. The plaintiff therefore filed the suit for specific performance of the agreement of sale in his favour. Subsequently the 1st and the 4th defendants were added as parties, as it was stated that a portion of the property had been gifted by the 2nd defendant to the 3rd defendant and the 2nd defendant had also mortgaged the suit property to the 4th defendant on 22-4-1968.

(3.) The 1st defendant denied that he plaintiff had ever performed his part of the contract viz., discharging debts owing to the several creditors and that he was also not ready and willing to do so. Time was of the essence of the contract and the plaintiff had to discharge his debts before 5-12-1966. The 1st defendant caused a notice to be issued to the plaintiff on 17-7-1967 demanding the plaintiff to pay the balance of the sale consideration and get the sale deed executed and registered within 15 days and in case of default, he stated that the agreement of sale would stand cancelled and that he would sell way the property to others. The 1st defendant also contended that the plaintiff knew about the contents of the notice but he wilfully refused to receive it. In fact the 1st defendant informed the plaintiff about the said cancellation through mediators. As the plaintiff did not perform his part of the contract even in spite of the notice the 1st defendant was entitled to sell away the property to the 2nd defendant.