2013 Supreme(Kar) 644

KARNATAKA HIGH COURT
N. Kumar and V. Suri Appa Rao, JJ.
Smt. Padmini Raghavan - Appellant
Versus
Mr. H. A. Sonnappa since dead by his LRs and Others - Respondents
Regular First Appeal No. 1242 of 2003 and Miscellaneous Civil No. 13365 of 2010 connected with Regular First Appeal No. 1312 of 2003
Decided On: 11.10.2013

Headnote:CODE OF CIVIL PROCEDURE, 1908 - Order 41, Rule 27: [N. Kumar & Suri Appa Rao, JJ] Production of additional documents by defendant - Xerox copy of cancellation deed and reply notice not marked during Trial -- Originals of said documents were kept in safe custody by Trial Court - As the Court had arrived at a finding that suit was liable to the dismissed on various grounds, no prejudice is caused by not allowing the said documents.

       KARNATAKA LAND REVENUE ACT, 1964 - Section 132: [N. Kumar & Suri Appa Rao, JJ] Suit relating to agricultural land - The plaintiff has to annex a certified copy of the record of rights or register of mutation relevant to lands as they stood prior to the date of suit, to the Plaint, failing which the plaint shall be rejected

       LIMITATION ACT, 1963 - Article 54: [N. Kumar & Suri Appa Rao, JJ] Suit for specific performance - Limitation - Held, Article 54 of the Act 1963 prescribes three years as the period within which as suit for specific performance can be filed. The period of three years is to be calculated from the date specified in the agreement for performance or in the absence of any such stipulation, within three years from the date the performance was refused. On facts, held as the plaintiff has not exercised due care and attention and this act is not in good faith, the plaintiff is not entitled to the benefit of the proviso to Section 21(1) of the Limitation Act, 1963.

       TRANSFER OF PROPERTY ACT, 1882 - Section 3: [N. Kumar & Suri Appa Rao, JJ] Section 3 was amended by the Amendment Act of 1929 in relation to definition of ’notice’. The definition has been amended and supplemented by three explanations, which settle the law in several matters of great importance. Explanation-II states that actual possession is notice of the title of the person in possession.

        Hence with reference to subsequent purchaser, it is essential that he should make an inquiry as to title or interest of the person in actual possession as on the date when sale transaction was made in his favour. The actual possession of a person itself is deemed or constructive notice of the title if any, of a person who is for the time being in actual possession thereof. A subsequent purchaser has to make inquiry as to further interest, nature of possession and title under which the person was continuing in possession on the date of purchase of the property. When a person purchases a property from the owner knowing that it is in the possession, and, in the absence of such inquiry or knowledge of title under which possession is held, the same should be attributed to the purchaser. Where there is a tenant in possession under a lease and an agreement of sale in his favour, a person purchasing part of the estate must be bound to inquire on what terms that person is in possession. A tenant being in possession under a lease, with an agreement in his pocket to become the purchaser, those circumstances altogether give him an equity repelling the claim of a subsequent purchaser who made no inquiry as to the nature of his possession. It is the duty of the subsequent purchaser to inquire from the persons in possession as to the precise character in which they were in possession at the time when subsequent sale transaction was entered into. If there be a tenant in possession of land a purchaser is bound by all the equities which the tenant could enforce against the vendor and such equity extends not only to the interest connected with the tenancy, but also to interests under the actual agreement.

       TRANSFER OF PROPERTY ACT, 1882 - Section 8: [N. Kumar & Suri Appa Rao, JJ] Agreement of sale - Unattested alterations in date and consideration - Held, It amounts to material alterations. Once the evidence on record shows that a material alteration is made in a deed, after its execution, without the consent of the party liable under it, the deed is rendered void from the time of the alteration so as to prevent the person who has made or authorized the alteration from putting the deed in suit to enforce against a party bound by it, who did not consent to the alteration, any obligation, covenant, or promise thereby undertaken or made because the material alteration varies the rights, liabilities and legal position of the parties as ascertained by the deed in its original state. It varies the legal effect of the instrument as originally expressed. It prejudices the party bound by the deed as originally executed. The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed.

       TRANSFER OF PROPERTY ACT, 1882 - Section 53-A: [N. Kumar & Suri Appa Rao, JJ] Part performance of agreement of sale - Before a transferee can claim the benefit of Section 53A, the contract should have been in writing signed by the transferor, the transferee should have got possession of the immovable property covered by the contract, the transferee should have done some act in furtherance of the contact and lastly the transferee has either performed his part of the contract or is willing to perform his part of the contract. Section 53-A makes it clear by employing the word "then" after laying down the pre-requisites that a transferee can seek refuge under it only after satisfying the above pre-requisites. In other words, the bar envisaged in the section against enforcement of the transferor’s right can be exercised only on compliance with the postulates. Willingness to perform the roles ascribed to a party in a contract is primarily a mental disposition. However, such willingness in the context of Section 53-A of the Transfer of Property Act must be absolute and unconditional. If willingness is studded with a condition, it is in fact no more than an offer and cannot be termed as willingness. Therefore, the sine qua non for basing a claim on Section 53A is the complete performance or complete willingness and not performance in part or conditional willingness or even willingness in part. It is only when the transferee has either performed his part of the contract or is willing to perform his part of the contract, he is entitled to the benefit of Section 53-A of the Transfer of Property Act. Proviso to Section 53A makes it clear that nothing in Section 53A shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. Therefore, Section 53A has no application in so far as the rights of the transferee for consideration who had no notice of the contract or of the part performance thereof. It is in this background that we have to appreciate the facts of this case.

        On facts held, though the execution of the agreement of sale is not in dispute, the agreement of sale is interpolated in so far as the material terms of the contract are concerned and therefore, it amounts to cancelling the agreement of sale. Even otherwise it is unenforceable in law. Further the plaintiff was not ready and willing to perform his part of the contract and therefore the agreement is not enforceable. For application of Section 53A mere acceptance of an agreement of sale and taking possession of the property agreed to be sold in part performance of the contract by itself is not sufficient. The transferee should perform or is willing to perform his part of the contract. It is only then Section 53-A is attracted. In view of the fact plaintiff has neither performed nor willing to perform his part of the contract, the plaintiff cannot take advantage of Section 53A. Therefore, it does not confer any right under the agreement so as to protect his alleged possession.

       SPECIFIC RELIEF ACT, 1963 - Section 19: [N. Kumar & Suri Appa Rao, JJ] Bona fide purchaser for valuable consideration without notice of previous agreement of sale - The plaintiff contended that, when the execution of the agreement of sale is not in dispute and the agreement of sale specifically contains a recital that the possession of the property is handed over to him on the day of the agreement of sale, the fact that he is in possession is established. Therefore, in so far as defendant No. 2 is concerned, she admits that she was aware of the existence of such an agreement and that she purchased the property because the said agreement had been cancelled. Therefore, she actually knows the fact that plaintiff was in possession of the property on the day she purchased the property. In so far as defendants 2 to 4 are concerned, they were also aware of the existence of the agreement of sale and therefore they were also knowing the fact that the plaintiff is in possession. Even otherwise, they did not make any enquiry which the ought to have made and therefore because of their gross negligence they are deemed to have had notice of the possession of the plaintiff over the schedule property. Therefore, they cannot plead that they purchased the property without notice of the said agreement of sale. The question is, on the day the defendants purchased the property, was he in possession of the property. The entire argument is based on the footing that the plaintiff has taken possession of the property in part performance of the agreement of sale and therefore Section 53-A of the Transfer of the Property Act is attracted.

       SPECIFIC RELIEF ACT, 1963 - Section 16(c): [N. Kumar & Suri Appa Rao, JJ] Specific performance of agreement of sale - Held, In a suit for specific performance, the plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his obligation under the contract in terms of the contract. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the Court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till the date of the decree, he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of contract…. Readiness and willingness refer to the state of mind and conduct of the purchaser, as also his capacity and preparedness on the other. One without the other is not sufficient. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. In so far as willingness is concerned, it reflects the mental attitude of the plaintiff to part with or pay the balance sale consideration agreed to be paid. If there are any reservations without any justification, or it is made conditional on the happening of any event which is not agreed upon, it show his unwillingness to perform his part of the contract. The obligation imposed by Section 16 is upon the Court not to grant specific performance to a plaintiff who has not met the requirements of clauses (a), (b) and (c) thereof. A Court may not, therefore, grant to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement the specific performance whereof he seeks. There is, therefore, no question of the plea being available to one defendant and not to another. It is open to any defendant to contend and establish that the mandatory requirement of Section 16(c) has not been complied with and it is for the Court to determined whether it has or has not been complied with.

        In the instant case the plaintiff except repeating these words that he was ready and willing to perform his part of the contract in the witness box, he has not placed any evidence on record to show that he was firstly ready with the balance sale consideration and secondly he was willing to part with the sale consideration to the first defendant. Except oral assertion was adduced regarding improvements made by him, there was no evidence as to his financial position to pay balance of sale consideration. Reasoning by Trial Court was very superficial. The evidence on record clearly demonstrates he was neither ready with the balance sale consideration nor he made any attempt to pay the balance sale consideration. On the contrary he has taken false pleas which are not substantiated by any evidence. Therefore, the finding recorded by the trial Court that the plaintiff has established his readiness and willingness is not based on any legal evidence and as such it is vitiated and requires to be set aside and accordingly it is set aside.

       SPECIFIC RELIEF ACT, 1963 - Section 16: [N. Kumar & Suri Appa Rao, JJ] Time as essence of contract - Delay and laches on the part of plaintiff - Agreement of sale - Plaintiff though had knowledge of sale of property, not filing suit immediately - filing of suit after making interpolations amounting to material alterations - delay in filing the suit has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff - Moreover, the plaintiff has not come to the Court with clean hands as he had interpolated the material terms of the agreement of sale - Held, Such conduct on the part of the plaintiff, disentitles the plaintiff from invoking the discretionary relief of specific performance at the hands of the Court.

       SPECIFIC RELIEF ACT, 1963 - Sections 10 & 16: [N. Kumar & Suri Appa Rao, JJ] Specific performance of agreement of sale - Unattested interpolations in agreement as to time for performance and amounts - No evidence as to who did it and when - Conduct of the party and evidence on record showing that they were done after issue of notice for specific performance and before filing of suit - Trial Judge failed to scrutinise suit document carefully and rendering a finding that interpolations were done before execution of document - Held, The alterations made amounts to material alterations and such alterations without the consent of the party bound, amounts to cancellation of document.

       SPECIFIC RELIEF ACT, 1963 - Sections 10 & 16: [N. Kumar & Suri Appa Rao, JJ] Suit for specific performance of agreement of sale - Interpolations as to material particulars in the agreement - Suppression of facts by plaintiff as to cancellation of deed and sale of properties as on date of suit - Held, The Plaintiff is not diligent. Due to interpolation agreement of sale has become void, unenforceable and having the effect of cancelling the document. Plaintiff was also found to be not ready and willing to perform his part of contract. Purchasers were bona fide purchasers for valuable consideration without notice of suit agreement. Suit was barred by limitation. Judgment and decree of Trial Court decreeing the suit was set aside and suit was dismissed with costs of appeal.