Judicial Analysis Court Copy Headnote Facts Arguments Court observation

ALLAHABAD HIGH COURT
J.J. Munir, J.
Mahesh Chandra and Anr. —Appellants
versus
Avinash Kumar and Anr. —Respondents
Second Appeal No.1873 of 1985 with Second Appeal No.2315 of 1985
Decided on 5.5.2021

Counsel for the Parties:
Second Appeal No.1873/1985
For the Appellants:N.C. Rajvanshi and M.K. Rajvanshi, Advocates
For the Respondents:N.L. Agarwal, Mahtab Alam, N.L. Ganguly, Pradyumna Kumar Yadav and Rakesh Pratap Singh, Advocates
Second Appeal No.2315/1985
For the Appellants:Mahtab Alam, Advocate
For the Respondents:M.K. Rajvanshi, Manoj Kumar Rajvanshi, N.C. Rajvanshi and N.K. Rajvanshi, Advocates

IMPORTANT POINTS
(1) A right that accrues on expiry of a certain period of time is a deficiency, if time stipulated by a contract has not expired but, it would not lead to Court being totally or inherently without jurisdiction.
(2) Any alienation, assignment, transfer or encumbrance made by defendant pendente lite in favour of any third party, shall all be treated as void and of no consequence.
(3) Article 54 of Limitation Act, 1963 would be relevant for the purpose of reckoning limitation; not maturity of cause of action.

Headnote:
(A) Agreement to Sell – Suit for Specific Performance of Contract – Suit was most promptly instituted as soon as plaintiff became cognizant of fact that defendant disowned nature of suit agreement as a covenant to convey property – He pursued his part of contract by serving a notice of demand to perform through registered post, followed by institution of suit – There is nothing on record to show that plaintiff or defendant have, in any manner, contributed to delay – It is a delay, resulting from process of Court, which cannot be put against plaintiff to decline specific performance – At the same time, lapse of time is so long that it has altered all monetary values and placed parties in a position that they could not have imagined in day that they bargained contract – Demand of equity would require plaintiff to pay consideration for sale, that has some monetary relevance in present time – Plaintiff ought to pay consideration for suit property reckoned at 1/4th value of its current market worth – This reduced consideration, defendant must accept, to answer his old obligations that he has observed in utter breach – Current market worth of property on the date of decree, shall be assessed by Executing Court by requiring parties to produce exemplar sale deeds proximate in time, area and on other parameters known and relevant for the purpose of assessment of market value in determination of compensation of properties acquired by State – Plaintiff shall bear entire expenses of execution and registration of sale deed – Any alienation, assignment, transfer or encumbrance made by defendant pendente lite in favour of any third party, one, more or successive, shall all be treated as void and of no consequence – In event of default by defendant, plaintiff would be entitled to execution of sale deed in terms of this decree through process of Court. (Paras 34, 35 and 36)
(B) Limitation Act, 1963 – Article 54 – Agreement to Sell – Limitation – Article 54 of Act of 1963 would be relevant for the purpose of reckoning limitation; not maturity of cause of action – Where a date is fixed for the purpose of performance of a contract relating to sale of an immovable property, but vendor says that he never entered into that agreement or it is forged, or raises a plea of non est factum or still more, asserts that contract does not at all embody true intention of parties about a solemn promise to sell property, but one merely to serve as a security, breach occurs as soon as this stand is taken (by vendor) – Cause of action arises immediately – A right that accrues on expiry of a certain period of time is a deficiency, if time stipulated by a contract has not expired – But, it would not lead to Court being totally or inherently without jurisdiction – If that plea is promptly raised, Court may return plaint or dismiss suit with liberty to bring it afresh, on expiry of time when cause of action matures. (Paras 16 and 17)
Result: Second Appeals Partly allowed.

JUDGMENT

J.J. Munir, J.—These two second appeals have arisen from a suit for specific performance of contract. Second Appeal No. 1873 of 1985 has been preferred by the plaintiff, whereas Second Appeal No. 2315 of 1985 has been brought by the defendant. Both appeals have been heard together. Second Appeal No. 1873 of 1985 shall be treated to be the leading case.

2. The facts giving rise to the two appeals are these:

Original Suit No. 144 of 1982 for specific performance of contract was instituted by Mahesh Chand against one Rampal Singh, seeking specific performance of a registered agreement to sell dated 02.05.1980, executed in favour of Mahesh Chand by Rampal Singh. Mahesh Chand is hereinafter referred to as the ‘plaintiff’, which includes reference to his legal heirs and representatives, since substituted in his stead. Rampal Singh, who died pending appeal before the lower Appellate Court and was substituted there by his sole heir and legal representative, Avinash Kumar, is hereinafter referred to as the ‘defendant.’

3. The plaintiff’s case is that a registered agreement to sell dated 02.05.1980 was executed between him and the defendant, where the defendant covenanted to sell, for an agreed sale consideration of Rs. 15,000/-, his 1/5th share in the agricultural land of Khata no. 254, plot no. 545, admeasuring 24 bigha 10 biswa 11 biswansi, situate at Village Azimabad Machhua, Pargana and Tehsil Koil, District Aligarh. The said land is hereinafter referred to as the ‘‘suit property’. The registered agreement to sell dated 02.05.1980 shall be called the ‘suit agreement’.

4. It is the plaintiff’s case that antecedent to the execution of the suit agreement, the defendant received, by way of earnest, a sum of Rs. 1440/-. The defendant further received a sum of Rs. 2,000/- at the time of execution and registration of suit agreement before the Sub-Registrar. Thus, out of the total sale consideration, the defendant received in earnest a total sum of Rs. 3440/-. It was covenanted between parties that the defendant would execute a sale deed conveying the suit property in favour of the plaintiff within two years of the date of the suit agreement. It is the plaintiff’s case that he has been always ready and willing to perform his part of contract and is still ready and willing. The defendant has been elusive about the performance required of him in terms of the suit agreement and evaded his liabilities thereunder. The suit was instituted on 13.04.1982, alleging that the defendant, on 15.03.1982, refused to settle the matter amicably and out of Court.

5. The defendant contested the suit by filing a written statement dated 12.07.1982. The defendant denied the execution of the suit agreement. He pleaded that he never received a sum of Rs. 1,440/- by way of earnest. Rather, he received a loan from the plaintiff in the sum of Rs. 2,000/- agreeing to pay the plaintiff interest @ 3% per month. It was agreed inter partes that the loan, together with the accrued interest, would be repaid within a period of two years. The plaintiff, in order to evade the provisions of the of the Uttar Pradesh Regulation of Money-Lending Act, 1976 got the suit agreement executed, where Rs. 3,440/- were shown as earnest. The suit agreement was registered. The defendant has pleaded that for a fact, no agreement covenanting to transfer the suit property was in the parties’ contemplation. The defendant has also averred that he paid a sum of Rs. 2,920/- to the plaintiff in August, 1981, liquidating the entire outstanding due to the plaintiff, the principal and the interest included. The plaintiff discharged the suit agreement by endorsing on its reverse that he does not wish to secure a sale deed and had received back his earnest. It is further averred by the defendant that the plaintiff, however, did not return the suit agreement in original, where he made the l