(Per the Hon'ble Sri Justice A. Gopal Reddy)

1. This is an appeal filed by the plaintiff against the judgment and decree passed by the Additional Judge, City Small Causes Court-cum-VI Senior Civil Judge, City Civil Court, Hyderabad in O.S.No.399 of 1996 dated 04.03.2003 whereby the suit filed by the plaintiff for specific performance of agreement of sale dated 11.08.1995 in respect of the suit schedule property was dismissed.

2. For the sake of convenience, the parties are referred to as arrayed in the Court below.

3. The plaintiff instituted the above suit seeking specific performance of agreement of sale dated 11.08.1995 executed by the defendant in his favour, agreeing to sell the premises to an extent of 200 sq.yds. bearing No.10-3- 16/4/3, Humayunnagar, Asifnagar, Golkonda main road, Hyderabad for a total sale consideration of Rs.10,50,000/-; out of which the plaintiff paid an amount of Rs.5,00,000/- on the said date i.e., 11.08.1995 and Rs.50,000/- on 12.08.1995 being the advance sale consideration. The defendant agreed to receive the balance sale consideration within 11/2 months from the date of the agreement/at the time of delivery of possession, and on delivery of such possession the plaintiff shall obtain the registered sale deed. With the amount paid by the plaintiff the defendant could settle all his matters in dispute including 26 sq.yds abutting the area agreed to be sold with neighbours. The plaintiff was ready and willing to purchase the said extra land at a reasonable price upon proper demarcation of the land to be sold with proper compound wall. But, as the demand of the defendant for extra 26 sq.yds of land was exorbitant and unreasonable, the plaintiff wanted a proper demarcation of the land covered by the agreement of sale for 200 sq.yds with a proper front wall at its original place before registration of the sale deed and was under the impression that the defendant will take steps for the proper conveyance of the property and would obtain necessary sanction from the concerned authorities before the sale deed is registered and a conveyance is made in his favour. Plaintiff having advanced huge amount for a small piece of land and having ready to purchase extra 26 sq.yds on proper terms and bear all the charges of registration was always ready and willing to pay the balance sale consideration and kept the amount ready for the said purpose. But, he was surprised to receive an unsigned registered letter dated 06.03.1996-Ex.A6 from the defendant with all false allegations, in spite of receiving huge timely advances to mend his fences with his neighbours from a longstanding litigation. The plaintiff sent a reply on 09.03.1996 under Ex.A3 and filed the above suit for specific performance of agreement of sale and in the alternative for a sum of Rs.10,50,000/- by way of damages for breach of contract.

4. The defendant contested the suit by filing a written statement, iner alia, contending that the plaintiff lost his right to enforce the agreement, as he failed to fulfil the mandatory conditions embodied in the agreement of sale dated 11.08.1995. Therefore, the defendant himself got issued notice on 06.03.1996 specifically asserting that since the plaintiff failed to pay the balance sale consideration within the stipulated period, the suit agreement automatically stood cancelled. As per condition No.3 of the sale agreement, time is agreed to be the essence of the contract including the payment of balance of amount within 45 days, and the consequences which flow on failure to pay the balance of sale consideration, the agreement automatically stands cancelled by forfeiting Rs.1,00,000/- for breach of the agreement. Accordingly, he got issued the notice on 06.03.1996 forfeiting Rs.1,00,000/- calling upon the plaintiff to receive the balance amount by specifying the bank account number, so that the defendant could arrange for refund of the amount. On receipt of letter covered under Ex.A.3 dated 09.03.1996, as