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        REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.2714 OF 2008

Mrs. A. Kanthamani             ….Appellant(s)

VERSUS

Mrs. Nasreen Ahmed           …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) This appeal  is filed by the defendant against

the  judgment  and  final  order  dated  27.10.2006

passed by the High Court of Judicature at Madras

in A.S. No. 127 of 2000 by which the High Court

dismissed the appeal filed by the appellant herein

with  costs  confirming  the  decree  and  judgment

dated 30.10.1998 passed in O.S. No. 6420 of 1996

by  the  VIII  Additional  Judge,  City  Civil  Court,

Chennai,  which  decreed  the  respondent’s  suit  for

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specific  performance of  the agreement against  the

appellant.

2) We  herein  set  out  the  facts,  in  brief,  to

appreciate the issue involved in this appeal.

3) The  appellant-defendant  is  the  owner  of  the

property  situated  at  No.191,  Lloyds  Road,

Chennai-86.  She entered into an agreement for sale

with  the  respondent-plaintiff  on  05.03.1989  in

respect of a part of ground floor of the said property

described in Schedule ‘B’ to the plaint together with

1/3rd undivided share in the property described in

Schedule  ‘A’   for  a  total  sale  consideration  of

Rs.3,43,200/-.   On  the  same  day,  a  sum  of

Rs.1,30,000/-  was  paid  by  the  respondent  as

advance  money  to  the  appellant.  Thereafter,  the

respondent  paid  Rs.  20,000/-  towards  sale

consideration to the appellant  on 03.04.1989, Rs.

10,000/- on 04.05.1989, Rs. 15,000 on 03.07.1989,

Rs.  15,000/- on 06.07.1989 and Rs.  16,000/- on

16.08.1989.  So  far  as  the  balance   amount  was

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concerned, the respondent agreed to pay the same

on  or  before  31.12.1989  to  the  appellant.  It  was

alleged that the appellant also orally agreed to sell

to the respondent an additional area of 132.25 sq.ft.

at the ground floor and 4 of undivided share and for

that additional property, the respondent paid a sum

of Rs.46,000/- as an advance money.   

4) On  10.11.1989,  the  respondent  sent  a  draft

sale  deed to  the  appellant  for  an area  measuring

847.25  sq.ft.  and  one  1/2 undivided  share.   The

appellant though agreed to sell the additional extent

of land orally, she refused to do so and returned the

draft  sale deed on 04.12.1989 for  approval  of  the

respondent by treating the sum of Rs.46,000/- paid

by her for additional extent as further advance for

the earlier written agreement.  

5) Thereafter  on 15.12.1989,  the  appellant  sent

another  draft  sale  deed  for  approval  of  the

respondent by removing clauses 18 and 27 and with

minor changes.  Since these deleted clauses referred

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to clauses 17 and 24 of the agreement of sale, the

respondent approved the first draft which contained

these clauses.

6) On 27.12.1989, the appellant wrote a letter to

the respondent  insisting upon her to approve her

second draft on or before 31.12.1989.

7) The respondent approved the second draft sale

deed and sent it to the appellant on 28.12.1989 by

speed post and also enclosed a letter from the LIC

sanctioning loan of  Rs.1 lakh in her favour.   The

respondent further informed that she is  willing to

bring the balance of sale consideration at the time

of registration of the sale deed.   

8) On  30.12.1989,  the  respondent  sent  a  legal

notice  through  her  advocate  calling  upon  the

appellant to execute and register the sale deed on or

before 10.01.1990 in her favour.

9) By  letter  dated  03.01.1990  through  her

advocate, the appellant refused to sell the property

to the respondent and cancelled the agreement.

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10) The respondent  then filed  a  suit  against  the

appellant  on  10.01.1990  seeking  specific

performance of the agreement. The plaint contained

aforementioned  pleadings.  It  was  alleged  that  the

respondent was and is ready and willing to perform

her  part  of  the  agreement  and  has,  in  fact,  so

performed. It was alleged that it was the appellant

who  failed  to  perform  her  part  without  any

justification  and  hence  committed  breach  of  the

agreement thereby entitling the respondent to claim

specific performance of the agreement in relation to

suit house. The appellant filed written statement.

11) Considering the plaint and written statement,

the trial Court framed five issues and one additional

issue which are as under:

1) Whether it is true that the defendant agreed to sell the schedule property and an extent of 132.25 sq.ft. along with  ½  undivided  share  to  the plaintiff?

2) Whether it  is  true that the time is the essence of the contract?

3) Whether it is true that the plaintiff was  ready  to  perform  her  part  of contract in the agreement?

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4) Whether the plaintiff  is entitled for the relief of specific performance?

5) What  is  the  relief,  the  plaintiff entitled for?

Additional issue framed on 31.07.1998:

1) Whether the plaintiff acted in a manner contradictory  and  in  violation  of agreement?

12) After  considering  the  documentary  evidence

led  in  by  both  the  parties,  the  Trial  Court,  vide

judgment  and  decree  dated  30.10.1998  in  O.S.

No.6420 of 1996, decreed the respondent’s suit and

passed  the  decree  for  specific  performance  of  the

agreement against  the  appellant.  It  was held that

the time was not the essence of the contract.  It was

further  held  that  the  Plaintiff  (Respondent)  was

always ready and willing to perform the agreement

and,  in  fact,  performed her  part  while  it  was the

defendant (appellant) who tried to scuttle away from

the  agreement.   It  was  further  held  that  the

respondent  is  entitled  to  a  decree  for  specific

performance  of  contract  on  the  basis  of  sale

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agreement dated 05.03.1989 in respect of the plaint

schedule  property  and  accordingly  the  appellant

was given two months’ time to execute the sale deed

and the respondent was given one month’s time to

deposit  the  balance  sale  consideration  of

Rs.1,47,200/-.   

13) Aggrieved  by  the  aforesaid  judgment,  the

defendant  filed an appeal  to  the  High Court.   By

impugned  judgment  dated  27.10.2006,  the  High

Court  dismissed  the  appeal  and  confirmed  the

decree and judgment dated 30.10.1998 passed by

the trial Court in O.S. No. 6420 of 1996.

14) Against  the  said  judgment,  the

appellant(defendant) has filed this appeal by way of

special leave petition before this Court.

15) Heard  Mr.  Mohan  Parasaran,  learned  senior

counsel  for  the  appellant  and  Mr.  R.

Balasubramanian,  learned  senior  counsel  for  the

respondent.

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16) Mr. Mohan Parasaran, learned senior counsel

for  the  appellant  while  assailing  the  legality  and

correctness  of  the  impugned  judgment  essentially

argued three points.  

17) In the  first  place,  learned counsel  submitted

that since the respondent (plaintiff)  did not seek a

declaration that the termination of agreement is bad

in  law,  mere  suit  for  specific  performance  of  the

agreement  was not  maintainable  in  law and was,

therefore,   liable  to  be  dismissed  on  this  short

ground. In other words, the submission was that it

was  obligatory  upon  the  respondent  (plaintiff)  to

have  sought  a  declaration  in  the  suit  that  the

termination of the agreement made by the appellant

(defendant) vide his notice dated 03.01.1989 is bad

and along with such relief, the respondent(plaintiff)

should  also  have  claimed  a  relief  of  specific

performance  of  the  agreement  to  make  the  suit

maintainable.   It  was urged that since such relief

was not claimed by the plaintiff, the suit for specific

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performance of  the  agreement  simpliciter  was not

maintainable.  In  support  of  this  submission,

learned counsel placed reliance on the decision of

this Court in  I.S. Sikander (Dead) by LRs. Vs. K.

Subramani & Ors., (2013) 15 SCC 27.

18) In the second place, learned counsel attacked

the findings on merits. He took us to the evidence of

the parties and made an attempt to point out that

both the Courts below committed error in holding

that the plaintiff was ready and willing to perform

her  part  of  the  agreement.  Learned  counsel

contended that from the evidence, it is clear that the

plaintiff was neither ready nor willing to perform her

part of the agreement and nor she had money with

her  to  pay  towards  balance  consideration  to  the

defendant  to  get  the  sale  deed  executed  in  her

favour in terms of the agreement. It was urged that

the plaintiff  did not come to the Court with clean

hands  inasmuch as  she insisted upon the  terms,

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which were neither agreed upon and nor they were

part of the agreement.  

19) In the third place, learned counsel contended

that  since  two  Courts  below  did  not  properly

appreciate the evidence and that too in a case where

the  plaintiff  had  come to  the  Court  with  unclean

hands,  the  discretionary  relief  of  grant  of  specific

performance of agreement ought not to have been

granted  to  such  plaintiff  and  instead  the  suit

merited dismissal.  

20) In  reply,  learned  counsel  for  the  respondent

(plaintiff) while opposing the appeal contended that

no  case  for  any  interference  in  the  impugned

judgment is made out. It was his submission that

both the Courts below rightly held that the plaintiff

was able to make out a case of breach of agreement

committed by the defendant; and secondly, she had

performed her part of the agreement thereby rightly

held  to  have  fulfilled  the  twin  requirement  of

"readiness  and  willingness"  as  provided  under

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Section  16  (c)  of  the  Specific  Relief  Act,  1963.

Learned counsel urged that since the issue relating

to the maintainability of suit was neither raised in

the written statement nor in the appeal before the

High Court  and nor  even in  this  appeal  but  was

raised for  the first  time in submission,  hence the

same could not be allowed to be raised for the first

time  in  this  Court.  Lastly,  learned  counsel

submitted  that  since  the  two  Courts  below

answered  all  the  issues  on  facts  in  favour  of  the

plaintiff by properly appreciating the evidence, such

findings being concurrent in nature, are binding on

this Court. It was more so when the findings did not

suffer  from  any  perversity,  much  less  extreme

perversity or illegality or arbitrariness, requiring any

interference by this Court.

21) Having heard learned counsel  for  the parties

and on perusal of the record of the case, we find no

force  in  any  of  the  submissions  of  the  learned

counsel for the appellant (defendant).

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22) Before  we  proceed  to  examine  the  issues

involved in the appeal, it is necessary to take note of

some of the relevant provisions of the Acts and the

decisions rendered by the Courts, which govern the

controversy.

23) The filing of the suit for specific performance of

an agreement/contract is governed by Section 16(c)

of the Specific Relief Act, 1963 read with Article 54

of the Schedule to the Limitation Act, 1963. Form

Nos.  47  and  48  of  Appendix‘A’  to  Code  of  Civil

Procedure, 1908 prescribe the format of the plaint

for such suit.

24) The  Specific  Relief  Act,  1877  which  stood

repealed  by  the  Act  of  1963  did  not  contain

provision  analogues  to  Section  16(c).  Yet  in  the

absence  of  any  such  provision,  its  requirements

used to be considered mandatory in the suits  for

specific performance by virtue of law laid down by

the Privy Counsel in a celebrated case of  Ardeshir

H. Mama vs Flora Sasoon,  AIR 1928 PC 208. It is

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in  this  Case  which  went  to  Privy  Council  from

Indian  Courts,  Their  Lordships  laid  down  the

following principle:

“In a suit for specific performance on the other hand, he treated and was required by  the  Court  to  treat  the  contract  as  still subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness, from the date of the contract to the time of the hearing, to perform the contract on his part.  Failure  to  make  good  that  averment brought with it the inevitable dismissal of his suit. Thus it was that the commencement of an action for damages being, on the principle of such cases as Clough v. London and North Western Railway Co. (1871) L.R. 7 Ex. 26 and Law  v.  Law (1905)  1  Ch.  140 a  definite election to treat the contract as at an end, no suit  for  specific,  performance,  whatever happened to the action, could thereafter be maintained by the aggrieved plaintiff. He had by his election precluded himself even from making the averment just referred to proof of which was essential to the success of his suit. The  effect  upon  an  action  for  damages  for breach  of  a  previous  suit  for  specific performance  will  be  apparent  after  the question  of  the  competence  of  the  Court itself  to  award  damages  in  such a  suit  has been touched upon.”

25) The  Act  of  1963  then  made  the  aforesaid

requirement a statutory one by enacting Section 16

(c), which reads as under: -  

“16.  Personal  bars  to  relief-  Specific performance of a contract cannot be enforced in favour of a person- (a)…………………..

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(b)………………….. (c)  who fails  to aver and prove that he has performed  or  has  always  been  ready  and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has  been  prevented  or  waived  by  the defendant.

Explanation – For the purposes of clause(c)- a) where a contract involves the payment

of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

b) the plaintiff must aver performance of, or  readiness  and  willingness  to  perform,  the contract according to its true construction.”

26) Therefore, the plaint which seeks the relief of

specific  performance  of  the  agreement/contract

must contain all requirements of Section 16 (c) read

with requirements contained in Form Nos. 47 and

48 of Appendix ‘A’ of C.P.C.   

27) Article  54  of  the  Limitation  Act  provides  a

period  of  3  year  for  filing  a  suit  for  specific

performance of  contract/agreement.  A period of  3

years is required to be counted from the date fixed

by the parties  for  the  performance,  or  if  no such

date is fixed, when the plaintiff has noticed that the

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performance  is  refused.  The  plaint  should,

therefore,  also  have  necessary  pleading  satisfying

the requirement of Article 54.  

28) The expression "readiness and willingness" has

been the subject matter of  interpretation in many

cases even prior to its insertion in Section 16 (c) of

the Specific Relief Act, 1963. While examining the

question  as  to  how  and  in  what  manner,  the

plaintiff is required to prove his financial readiness

so as to enable him to claim specific performance of

the  contract/agreement,  the  Privy  Council  in  a

leading  case  which  arose  from the  Indian  Courts

(Bombay)  in  Bank  of  India  Limited  &  Ors.  Vs.

Jamsetji A.H. Chinoy and Chinoy and Company,

AIR 1950 PC 90, approved the view taken by Chagla

A.C.J., and held inter alia that  " it is not necessary

for  the  plaintiff  to  produce  the  money  or  vouch  a

concluded  scheme  for  financing  the  transaction  to

prove his readiness and willingness.”  

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29) The following observations of the Privy Council

are apposite:   

“21…………..Their Lordships agree with this conclusion and the grounds on which it was  based.  It  is  true  that  the  plaintiff  1 stated that he was buying for himself, that he had not sufficient ready money to meet the price and that no definite arrangements had been  made  for  finding  it  at  the  time  of repudiation.  But  in  order  to  prove  himself ready  and  willing  a  purchaser  has  not necessarily to produce the money or to vouch a  concluded  scheme  for  financing  the transaction. The question is one of fact, and in the present case the Appellate Court had ample material on which to found the view it reached. Their  Lordships would only add in this connection that they fully concur with Chagla A.C.J. when he says:  

"In my opinion, on the evidence already  on  record  it  was sufficient for the court to come to the conclusion ' that plaintiff 1  was  ready  and  willing  to perform his part of the contract. It was not necessary for him to ' work  out  actual  figures  and satisfy  the  court  what  specific amount  a  bank  would  have advanced on the mortgage of his property and the pledge of these shares. I do not think that any jury--if  the  matter  was  left  to the jury in England--would have come  to  the  conclusion  that  a man, " in the position in which the plaintiff was, was not ready and willing to pay the purchase price of the shares which he had bought  from  defendants  1  and 2."

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For  the  foregoing  reasons,  their Lordships  answer  question(4)  in  the affirmative.”

(Emphasis supplied)

30) This Court in  Sukhbir Singh & Ors. Vs. Brij

Pal Singh & Ors., AIR 1996 SC 2510=(1997) 2 SCC

200  followed  the  aforesaid  principle  with  these

words:

“5. Law is  not  in  doubt  and  it  is  not  a condition that the respondents should have ready  cash  with  them.  The  fact  that  they attended  the  Sub-Registrar’s  office  to  have the  sale  deed  executed  and  waited  for  the petitioners  to  attend  the  office  of  the Sub-Registrar is a positive fact to prove that they  had  necessary  funds  to  pass  on consideration and had with them the needed money with them for payment at the time of registration.  It  is  sufficient  for  the respondents  to  establish  that  they  had  the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of  the suit  till  the  date  of  the  decree.  It  would, therefore, be clear that the courts below have appropriately  exercised  their  discretion  for granting the relief of specific performance to the respondents on sound principles of law.”

31) Keeping these broad principles of law in mind,

which are now fairly well settled, let us examine the

facts of this case.  

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32) At the outset, we may observe that this Court

is loath to undertake the task of appreciating the

evidence in an appeal filed under Article 136 of the

Constitution  of  India.  It  is  more  so  when  such

appeal  arises  out  of  the  judgment,  which  has

recorded concurrent findings of fact.  

33) However, since in this case, leave was granted

and at the time of hearing, learned counsel for the

parties took us through the evidence in support of

their submissions, we considered it proper to peruse

the evidence with a view to find out as to whether

impugned judgment suffers from any error on facts

or/and law?

34) Coming first to the submission of the learned

counsel for the appellant about the maintainability

of suit, in our considered view, it has no merit for

more than one reason.

35) First, as rightly argued by learned counsel for

the  respondent,  the  objection  regarding  the

maintainability of the Suit was neither raised by the

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defendant  in  the  written  statement  nor  in  first

appeal before the High Court and nor in grounds of

appeal in this Court.

36) Second, since no plea was raised in the written

statement,  a fortiori,  no issue was framed and, in

consequence, neither the Trial Court nor the High

Court could render any finding on the plea.

37) Third, it is a well-settled principle of law that

the  plea  regarding  the  maintainability  of  suit  is

required  to  be  raised  in  the  first  instance  in  the

pleading  (written  statement)  then  only  such  plea

can be adjudicated by the Trial Court on its merits

as a preliminary issue under Order 14 Rule 2 of  the

CPC. Once a finding is  rendered on the plea,  the

same  can  then  be  examined  by  the  first  or/and

second appellate Court.  

38) It is only in appropriate cases, where the Court

prima  facie finds  by  mere  perusal  of  plaint

allegations that  the suit  is barred by any express

provision of law or is not legally maintainable due to

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any legal provision; a judicial notice can be taken to

avoid abuse of judicial process in prosecuting such

suit. Such is, however, not the case here.

39) Fourth, the decision relied on by the learned

counsel  for  the  appellant  in  the  case  of  I.S.

Sikander (supra) turns on the facts involved therein

and is thus distinguishable.

40) Lastly, the suit filed by the respondent seeking

specific  performance  of  the  agreement  dated

05.03.1989  was  maintainable  for  the  reason  that

the  cause  of  action  to  file  the  suit  arose  on  the

expiry  of  period  mentioned  in  the  agreement

(31.12.1989)  for  its  performance  as  provided  in

Article 54 of the Limitation Act and it  was rightly

filed immediately within 10 days on 10.01.1990.

41) For  the  aforementioned  reasons,  we  find  no

merit in the first submission of learned counsel for

the appellant, which is rejected.

42) Coming  now  to  the  second  and  third

submission of  learned counsel for the appellant, we

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are  of  the  considered opinion that  it  has  also  no

merit  and  hence  deserve  to  be  rejected  for  more

than one reason.  

43) First,  the plaintiff  had pleaded the necessary

requirements of Section 16 (c) of the Specific Relief

Act, 1963 read with the requirement of Forms 47,

48 and Article 54 of the Limitation Act in the plaint;

Second, the defendant did not dispute the execution

of agreement with the plaintiff and, in fact, entered

in  correspondence  with  the  plaintiff  for

incorporation  of  some  clauses  therein;  Third,  the

plaintiff  proved  her  readiness  and  willingness  to

perform her part of agreement and also proved her

financial capacity to purchase the suit property by

adducing  adequate  evidence;  Fourth,  the  plaintiff

had paid more than Rs.2 lacs to the defendant prior

to  execution  of  sale  deed  in  terms  of  agreement

dated  05.03.1989  and  was,  therefore,  required  to

pay balance sum of Rs.1,47,200/- to the defendant;

Fifth, on admitted facts, therefore, the plaintiff had

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paid more than 50% of the sale consideration to the

defendant before the due date of execution of sale

deed;  Sixth, the plaintiff had also proved that she

had  the  requisite  financial  capacity  to  pay  the

balance  sale  consideration  to  the  defendant

inasmuch  as  she   had  arranged  the  funds  by

obtaining loan from the LIC;  Seventh, the plaintiff

filed the  suit  immediately  on expiry  of  the  period

within  10  days  to  show  her  readiness  and

willingness  to  purchase  the  property;  and Eighth,

once  it  was  held  that  the  defendant  committed

breach  in  avoiding  to  execute  the  agreement,

whereas  the  plaintiff  performed  her  part  of

agreement and was ready and willing to perform her

part, the Trial Court was justified in exercising its

discretion  in  favour  of  the  plaintiff  by  passing  a

decree for specific performance of agreement against

the defendant.

44) In our view, none of  these findings could be

assailed  as  being  either  perverse  or  de  hors the

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evidence  or  against  any  provision of  law and nor

these findings could be assailed on the ground that

no  judicial  man  could  ever  reach  to  such

conclusion.   

45) We  also  do  not  find  any  merit  in  the

submission of the learned counsel for the appellant

when he contended that the plaintiff did not come to

the Court with clean hands and hence the suit is

liable to be dismissed.

46) In  our  view,  both  the  Courts  below  rightly

rejected  this  submission.  There  is  no  evidence  to

sustain the submission.  On the other hand, we find

that it is the defendant, who despite accepting the

substantial  money  (more  than  50%)  towards  sale

consideration from the plaintiff,  avoided executing

the sale deed on one or other false pretext.

47) We  also  do  not  find  any  merit  in  the

submission of the learned counsel for the appellant

when  he  contended  that  since  the  plaintiff  was

insisting  for  execution  of  sale  deed  in  relation  to

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some more portions, which did not form part of the

agreement and hence it should have been held that

the plaintiff committed the breach of the agreement

and not the defendant.

48) In  our  view,  the  two  Courts  below  rightly

repelled this submission by holding that the plaintiff

did not claim any relief in relation to the property

which was not the subject matter of agreement and

confined his relief  only in relation to the property

which formed the subject matter of agreement dated

05.03.1989. We thus find no good ground to differ

with  this  finding of  the  two Courts  below.  It  was

rightly recorded.

49) In our considered view, the two Courts below,

therefore,  rightly  rendered  the  aforementioned

findings  in  favour  of  the  plaintiff  and we  find no

difficulty in concurring with the findings, which in

our  view  do  not  call  for  any  interference  by  this

Court.  

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50) In the light of foregoing discussion, we find no

merit in the appeal. It is accordingly dismissed with

cost  quantified  at  Rs.10,000/-  payable  by  the

appellant to the respondent.    

               ………...................................J.

[R.K. AGRAWAL]             

                       ….……..................................J.

        [ABHAY MANOHAR SAPRE] New Delhi; March 6, 2017  

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