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2023 Supreme(AP) 835

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
T. MALLIKARJUNA RAO, J.
Mogarala Nageswara Rao - Petitioner
Versus
Bondilli Chandra Singh - Respondent
Appeal Suit No. 98 of 2010
Decided On : 16-06-2023

Advocates Appeared:
For the Petitioner: Sunkara Rajendra Prasad.
For the Respondent: T.C.D. Sekhar.

The involvement of legal processes in tenant eviction made it unfair to blame the parties for failing to fulfill their obligations within the agreed time frame.

Headnote:

Specific Performance - Sale Agreement - Code of Civil Procedure, 1908, Section 96 - Indian Contract Act, 1872, Section 51, Section 55 - Chunduru Padmavati Vs. Chunduru Narasimha Rao, 2000 (1) ALT 613 - Smt. Chand Rani (dead) by L.R.s. Vs. Smt. Kamal Rani (dead), (1993) 1 SCC 519 - The plaintiff sought specific performance of a sale agreement for a property. The defendant failed to evict tenants as per the agreement, and the plaintiff did not fulfill his obligation to evict a tenant on the first floor. The court held that both parties failed to fulfill their obligations within the agreed time frame, and the involvement of legal processes in tenant eviction made it unfair to blame the parties. The court denied the discretionary relief of specific performance of the agreement.

Fact of the Case:

The plaintiff sought specific performance of a sale agreement for a property. The defendant failed to evict tenants as per the agreement, and the plaintiff did not fulfill his obligation to evict a tenant on the first floor. The trial court decreed the suit without costs, directing the defendant to refund the advance amount of Rs.1,00,000/- to the plaintiff with interest at 18% per annum from the date of the sale agreement.

Finding of the Court:

The court found that both parties failed to fulfill their obligations within the agreed time frame, and the involvement of legal processes in tenant eviction made it unfair to blame the parties. The court denied the discretionary relief of specific performance of the agreement.

Issues: The issues were whether the plaintiff is entitled to specific performance of the sale agreement, delivery or possession of the property, and the relief the plaintiff is entitled to.

Ratio Decidendi: The court held that the grant of decree for specific performance is a discretionary relief, and both parties failed to fulfill their obligations within the agreed time frame. The court also considered the principles of law related to time as the essence of the contract and the consequences of failure to perform an executory contract at the stipulated time.

Final Decision: The court dismissed the appeal, finding no merits in it, and ordered no costs to be paid by either party.

JUDGMENT :

1. The appeal, under Section 96 of the Code of Civil Procedure, 1908, is filed by the appellant/plaintiff challenging the decree and judgment dated 04.11.2009 in O.S. No.16 of 2006 passed by the Additional District Judge-cum-Family Court, Nellore (for short, ‘trial court’).

2. The parties will hereinafter be referred to as arrayed before the trial court.

3. The plaintiff's claims in the plaint are summarized as follows :

(a) The defendant agreed to sell the schedule property for Rs.19,00,000/- to the plaintiff. An advance payment of Rs.1,00,000/- was made, and a sale agreement was executed on 04.03.2004. The terms of the agreement stipulated that the defendant would ensure the eviction of tenants from the ground floor shop rooms, while the plaintiff would be responsible for evicting the tenant on the first floor. After demolishing the entire house, the plaintiff was ready to pay the sale consideration of Rs.8,00,000/- to the defendant At the time of registration, agreed to pay the balance amount of Rs.10,00,000/-. However, the defendant failed to take any action to evict the three shop room tenants or vacate the portion of the house in their possession, hindering the execution of a registered sale deed in favor of the plaintiff. The first-floor tenant provided conflicting statements regarding her obligation to vacate the premises. In an abundance of caution, the plaintiff informed the defendant about this on 24.06.2004. In response, the defendant agreed to extend the time for executing the registered sale deed and handed over the title deeds. Consequently, an endorsement was made on the first and third pages of the agreement on the same date, extending the deadline until 20.07.2004.

(b) Despite the agreement, the defendant failed to appear for the execution of a registered sale deed. The plaintiff sent a notice urging the defendant to collect the remaining sale consideration and execute the deed, which the defendant received and responded to, stating that the sale agreement dated 04.03.2004 had been canceled due to the plaintiff's failure to fulfill his contractual obligations. Subsequently, the plaintiff sent another notice on 26.10.2005, demanding the defendant to fulfill his contractual obligations and execute a registered sale deed. In reply, the defendant reiterated their previous stance in a letter dated 16.11.2005. The plaintiff asserts his readiness and willingness to fulfill his part of the contract, while the defendant failed to fulfill his part of the contract.

4. In the written statement, the defendant refuted the allegations made in the plaint. He admitted to executing the sale agreement and receiving an advance sale consideration of Rs.1,00,000/- from the plaintiff. However, he contended that the plaintiff was not prepared and willing to fulfill his contractual obligations. According to the terms of the agreement, it was the plaintiff's responsibility to evict the first-floor tenant. Nonetheless, the plaintiff failed to take any action to remove the said tenant, impeding the registration of a regular sale deed in his favour. The defendant also informed the plaintiff about the first-floor tenant filing R.C.C. No.6/1988 with the Rent Controller, Gudur, before entering into the sale agreement and provided a copy of the court's order. The defendant urgently needed money to finance his daughter's wedding and, since the plaintiff failed to fulfill his contractual obligations, the defendant had to arrange funds through interest to perform the wedding. In May 2004, the defendant managed to evict the tenants occupying the ground floor. Despite making several demands for the payment of the remaining sale consideration and, the plaintiff did not respond positively. Due to the plaintiff's failure to fulfill his obligations, including securing the balance sale consideration and evicting the first-floor tenant on time, the defendant requested an extension of the deadline from 30.07.2004 to 20.07.2004 to receive the balanc

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