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High Court Of Calcutta
G. N. RAY, SANKARI PRASAD DAS GHOSH
SUNITY CHANDRA - Appellant
Versus
NIL RATAN - Respondent
A. F. O. D. 282 Of 1980
Decided On : 03/15/1985
SPECIFIC PERFORMANCE - CONTRACT FOR SALE OF PROPERTY - EXTENSION OF TIME FOR DEPOSIT OF BALANCE OF CONSIDERATION-MONEY - POWER OF COURT - SECTION 28 OF THE SPECIFIC RELIEF ACT, 1963.
Fact of the Case:
Plaintiff filed a suit for specific performance of a contract for sale of a property. The defendant agreed to release the property from the mortgage of the State of West Bengal and execute a sale deed in favor of the plaintiff within three months of the release of the property. The plaintiff paid Rs. 6001/- as earnest money and agreed to pay the balance of Rs. 38,000/-. The defendant released the property on 18-7-1973 and executed a deed of release. The plaintiff paid a further sum of Rs. 1000/- on 13-12-1973. The defendant did not execute the sale deed despite several extensions of time. The plaintiff filed a suit for specific performance of the contract, recovery of possession of the property, and other reliefs. The trial court passed a conditional decree for specific performance of the contract, directing the defendant to execute and register a deed of sale within 90 days of the decree, on payment of the balance of the consideration-money minus the arrears of taxes and rent due to the corporation and the landlord. The defendant appealed against the decree.
Finding of the Court:
The court held that the plaintiff was ready and willing to perform his part of the contract and that there was a continuous readiness on his part to pay the balance of the consideration-money. The court also held that the insistence on the part of the plaintiff to have an indemnity clause in the draft deed of sale, though there was no such agreement for indemnity clause between the parties, did not disentitle the plaintiff from having a decree for specific performance of the contract. The court further held that the decree for specific performance of the contract would not entail hardship on the defendant.
Issues: 1. Whether the plaintiff was ready and willing to perform his part of the contract? 2. Whether the insistence on the part of the plaintiff to have an indemnity clause in the draft deed of sale disentitled him from having a decree for specific performance of the contract? 3. Whether the decree for specific performance of the contract would entail hardship on the defendant? 4. Whether the court had the power to extend the time for deposit of the balance of the consideration-money?
Ratio Decidendi: 1. The court held that the plaintiff was ready and willing to perform his part of the contract on the basis of the evidences on record, including the plaintiff's Pass Books showing that he had sufficient funds in his accounts to purchase the property, and a letter from the Reserve Bank of India permitting him to withdraw Rs. 15,000/- from his Provident Fund balance for purchasing a readymade house. 2. The court held that the insistence on the part of the plaintiff to have an indemnity clause in the draft deed of sale did not disentitle him from having a decree for specific performance of the contract, as there was no such agreement for indemnity clause between the parties and the defendant did not object to the insertion of the clause. 3. The court held that the decree for specific performance of the contract would not entail hardship on the defendant, as the increase in valuation of the property should not weigh with the court in deciding whether specific performance of contract should be granted or not, and the defendant's financial difficulties were not a ground for defeating the decree. 4. The court held that the conditional decree passed in the suit was not a preliminary decree and that the court was without jurisdiction to extend the time for depositing the balance of the purchase-money, as the default clause in the decree stated that "the defendant shall not be liable to execute the deed of sale" in case of default.
Final Decision: The appeal was allowed, the judgment and decree of the trial court were set aside, and the case was remanded to the trial court for fresh disposal in accordance with law, after giving an opportunity to the plaintiff to amend the plaint for refund of the purchase-money paid by him and deposited in court.
( 1 ) THE suit, out of which this appeal arises, was for specific performance of a contract for sale of one brick-built one-storeyed house at premises No. 38/j/4 Maharaja Road, Dhakuria, now P. S. Jadavpur along with prayers for recovery of khas possession of the property and some other prayers. On 11-4-1973, there was an agreement between the plaintiff-respondent and the defendant-appellant for release of the suit-property by the plaintiff, within two months from the date of the execution of the agreement, from the State of West Bengal, to which the property was mortgaged. The terms of the agreement were that if the defendant-appellant had the property released from the State of West Bengal and had made over true copies of the relevant documents including the deed of release and had allowed inspection of the original documents to the plaintiff-respondent, when demanded, to show the marketable title of the defendant to the property, the deed of sale in respect of the property was to be executed by the defendant in favour of the plaintiff within three months of the release of the property and of making over of the true copies of the documents to the plaintiff. At the time of execution of the agreement, Ext. 1, and amount of Rs. 6001/- was paid as earnest money by the plaintiff to the defendant as the property was mortgaged with the State of West Bengal for that amount of Rs. 6001/ -. The terms were that the property would be sold for a sum of Rs. 38,000/ -.
( 2 ) THE case of the plaintiff-respondent was that though he was ready and willing to perform his part of the contract and had also given subsequently to the defendant through his Advocate a further sum of Rs. 1000/- on 13-12-1973, the defendant did not execute the Kobala in respect of the property in favour of the plaintiff, even though time for execution of the sale deed was extended at the request of the appellant by several letters. As such, the suit was filed for specific performance of the contract for sale, recovery of possession of the property and for some other reliefs.
( 3 ) THE case of the defendant-appellant was that on 18-7-1973, the property was released by the State of West Bengal and a deed of release was executed. In spite of his best attempt, the defendant could not get the deed of release earlier. The defendant was all along ready and willing to complete the transaction. On 19-7-1973, he made over to the plaintiff a copy of the deed of release and other documents. The plaintiff violated the terms and conditions of the agreement. Long after the time to complete the transaction, the plaintiff suggested a change in the deed of conveyance by a letter dated 29-12-1973. The plaintiff had never offered the balance of the consideration-money to the defendant. It was the plaintiff who deferred the completion of the transaction on flimsy grounds.
( 4 ) THE plaintiff examined himself as P. W. 1 The defendant examined himself as D. W. I. On a consideration of the evidences of these witnesses and the materials on record, the learned Subordinate Judge, 3rd Court, Alipore, passed a conditional decree for specific performance of the contract for sale on contest with costs. The defendant was directed to execute and register a deed of sale in respect of the property within 90 days of the decree, on payment of the balance of the consideration-money to the defendant by the plaintiff minus the arrears for taxes due to the corporation and arrears of rent due to the landlord for the property on the date of the decree. It was mentioned in the decree that in case of the failure on the part of the defendant to execute and register the deed of sale within 90 days of the decree, on receipt of the aforesaid balance of consideration by the defendant, the plaintiff was to deposit the amount in court within 120 days of the decree. If the plaintiff paid the balance of the consideration-money to the defendant or deposited the same in court, the defendant
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