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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 512 OF 2009

B. VIJAYA BHARATHI                             Appellant(s)                                 VERSUS P. SAVITRI & ORS.                          Respondent(s)

J U D G M E N T

R.F. NARIMAN, J. 1) The present appeal arises out of a judgment dated 26.10.2005, delivered by a single Judge of the Andhra Pradesh  High  Court,  by  which  an  appeal  filed  by  the original  Defendant  No.3  was  allowed  and  a  suit  for specific performance was dismissed. 2) The brief facts necessary for deciding this case are as follows: On  21.02.1992,  an  agreement  to  sell  was  entered  into between one Smt. P. Savitri, Respondent No.1 before us, and B. Vijaya Bharati, by which the schedule property was  agreed  to  be  sold  for  a  consideration  of  Rs. 1,80,000/-.   Rs.  1,30,000/-  had  already  been  paid  in advance.  The balance consideration of Rs. 50,000/- was to be paid later as and when the vendee gives notice

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that she is ready to get the property registered, and on intimation  from  the  vendor  to  pay  the  balance consideration.   3) Para 3 & 5 of the Agreement provided for necessary permissions  from  the  society  for  transfer  of  the membership in the name of the vendee, which was to be obtained by the vendor, and clearances required from the Income  Tax,  Urban  Land  Ceiling  Authorities  and  other Authorities were also to be obtained by the vendor.  The said Agreement, though it was an agreement to sell only, was registered by way of abundant caution. 4) On 13.03.1992, the first defendant appeared before the Registering Authority to execute a General Power of Attorney in favour of the husband of the plaintiff in order to obtain the permissions referred to above.  It has  been  concurrently  found  that  on  this  date,  she resiled from such execution of General Power of Attorney in  favour  of  the  plaintiff's  husband  and  left  the Sub-Registrar's office without registering the General Power of Attorney.  5) Thereafter, the property was sold by Defendant No.1 on 12.05.1992 to Defendant No.2 for a sale consideration of Rs. 1,20,000/-.  Defendant No.2, in turn, sold the property on 05.07.1993 to Defendant No.3 for a sum of

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Rs.  1,95,000/-.   Both  the  sales  were  by  registered conveyance.   6) The  plaintiff  issued  the  necessary  notice  stating that she was ready to pay the balance Rs.50,000/- on 18.02.1994.  Since the reply to the said notice was that the agreement was no longer valid, the plaintiff filed a suit for specific performance on 13.04.1994.  7) The trial Court decreed the said suit for specific performance,  finding  that  the  agreement  of  21.02.1992 was prior in point of time to both the registered sale deeds.   It  found,  as  a  matter  of  fact,  that  the purchasers of the property could not be said to be bona fide  purchasers  given  the  fact  that  no  encumbrance certificate was called for before any such purchase.  8) Defendant No.3 appealed to the High Court, and the High  Court  set  aside  the  decree  of  the  trial  Court stating  that  the  plaintiff  was  not  ready  and  willing through  out  as  was  required  by  Section  16(c)  of  the Specific Relief Act, 1963 and held that the suit was filed long after, in fact, more than two years after the repudiation on 13.03.1992.  A single Judge of the High Court held thus:

“Till Ex.A-2 notice was issued, the Plaintiff has not made any endeavour to pay the balance sale consideration, particularly, when the 1st

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Defendant  having  appeared  before  the registering  authority  to  execute  the  GPA  in favour  of  the  husband  of  the  Plaintiff  on 13-3-1992 and resiled from execution of such GPA in favour of the Plaintiff and left the Sub-Registrar's Office without registering the GPA.  Any  prudent  person,  who  obtained  the registered agreement of sale by paying 2/3rd of the sale consideration, will not keep quiet for a period of nearly one year eleven months after the vendor repudiated the contract and refused to  register  the  GPA  to  complete  the  sale transaction, which clearly discloses that the total inaction is on the part of the plaintiff. Even after such refusal, she has not issued any notice to the 1st Defendant to execute the sale deed by offering balance sale consideration and expressing  her  readiness  and  willingness  to complete the transaction. Thus, the plaintiff waived the right obtained under the agreement of sale and allowed the 1st Defendant to execute the sale deed in favour of the 2nd Defendant. Only  on  such  execution  of  the  sale  deed  in favour of the 2nd Defendant, the Plaintiff got issued the legal notice to the Defendants and the  same  was  suitably  replied  by  them  under Exs. A-3 and A-4. She has nowhere stated about her readiness and willingness to perform her part of the contract all along from the date of the  agreement  till  her  deposition  in  the Court.”

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9) Mr.  M.N.  Rao,  learned  Senior  Counsel  appearing  on behalf of the appellant, has argued before us that an appeal  at  the  behest  of  Defendant  No.3  was  allowed, Defendant  No.1  having  gone  out  of  the  picture altogether.   He  further  argued  before  us  that  it  is clear that Defendant Nos. 1 and 2 were in collusion with each other because the property which had been sold for Rs.1,80,000/- in February, 1992 could not possibly be sold in May, 1992 for a lesser amount of Rs.1,20,000/-. The fact that no encumbrance certificate was also taken was an important pointer to the fact that there was no bona fides in either Defendant Nos. 1 and 2 or Defendant No.3 and that therefore, the High Court was in error in stating  that  this  vital  requirement  is  of  secondary importance  once  the  requirement  of  readiness  and willingness  is  not  proved.   He  also  argued,  citing Madamsetty  Satyanarayana vs.  G.  Yellogi  Rao  and  two others, AIR 1965 SC 1405 = (1965) (2) SCR 221 in which Subba Rao, J. held that the English practice of coming to  the  Court  without  any  delay  for  the  relief  of specific performance cannot possibly apply to India when a period of limitation of three years is granted for approaching the Court.  That decision, therefore, held that mere delay by itself cannot be a bar to specific

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performance, and this was also pressed with some force by Mr. Rao. 10) Mr. A. Subba Rao, on the other hand, supported the judgment of the High Court and argued that not only was there delay in the present case, but it was coupled with the fact that there was no readiness and willingness, as is correctly held by the High Court.  Further, he also stated that the present suit in its present form would not be maintainable for the added reason that despite the fact that it came to the plaintiff's knowledge that there were two registered conveyances prior to the suit, the plaintiff did not amend the suit to ask for a decree of cancellation of the said sale deeds.  11) Having heard the learned counsel appearing for the parties, we are of the view that the High Court judgment is correct and does not require to be interfered with. 12) One crucial fact that stares us in the face is that on  13.03.1992  the  first  defendant  ran  away  from  the Registering Authority making it clear that she did not want to act in furtherance of the Agreement in executing a General Power of Attorney in favour of the plaintiff's husband.  The High Court was right in stating that no prudent person would stay quiet for a period of one year and eleven months after such an unequivocal repudiation

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of the agreement if they were really interested in going ahead with the sale transaction.  The only inference, therefore,  from  this  is  that  the  plaintiff  cannot possibly be said to be ready and willing throughout to perform their part of the agreement.  13) However, Mr. Rao has pressed into service a judgment of this Court in M.M.S. Investments, Madurai and Others vs.  V. Veerappan and Others, (2007) 9 SCC 660.  While stating  the  background  facts,  the  learned  Judges referred  to  a  suit  for  specific  performance  which resulted in a decree passed by the trial Court.  After the decree was passed, defendants through their Power of Attorney sold a large extent of properties, including the  subject-matter  of  the  suit,  in  favour  of  certain other persons, who happened to be the appellants before this Court.  In that case, the High Court held that there would be no bar for the appellant to raise any issue on merits of the appeal on the facts of that case except  the  defence  of  readiness  and  willingness  as provided under Section 16(c) of the Specific Relief Act. 14) This Court went on to distinguish a three-Judge Bench judgment  in  Ram  Awadh  (dead)  by  Lrs.  And  Others vs. Achhaibar Dubey and Another, (2000) 2 SCC 428 and held as follows:-

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“6.  Questioning  the  plea  of  readiness  and willingness  is  a  concept  relatable  to  an agreement.  After conveyance the question of readiness  and  willingness  is  really  not relevant.   Therefore,  the  provision  of  the Specific Relief Act, 1963 (in short “the Act”) is not applicable.  It is to be noted that the decision in Ram Awadh case relates to a case where there was only an agreement.  After the conveyance, the only question to be adjudicated is  whether  the  purchaser  was  a  bona  fide purchaser  for  value  without  notice.   In  the present  case  the  only  issue  that  can  be adjudicated is whether the appellants were bona fide purchasers for value without notice.  The question whether the appellants were ready and willing is really of no consequence.  In Ram Awadh  case  the  question  of  the  effect  of  a completed sale was not there.  Therefore, that decision cannot have any application so far as the present case is concerned.  Once there is a conveyance the concept would be different and the primary relief could be only cancellation.”

15) Ram Awadh (supra) is a judgment by three Judges of this Court overruling Jugraj Singh vs. Labh Singh, (1995) 2 SCC 31, in which it was held that the plea that the plaintiff  is  not  ready  and  willing  to  perform  the contract  is  personal  only  to  the  seller-defendant. Subsequent purchasers cannot take this plea.  This was stated to be an erroneous view of the law by the three

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Judge Bench, and the judgment in Jugrag Singh was set aside as follows:-

“6. 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 determine whether it has or has not been complied with and, depending upon its conclusion, decree or decline to decree the suit. We are of the view that the decision in Jugraj Singh Case is erroneous.”   

16)  In the facts of the M.M.S. Investments case, after the  Trial  Court  decreed  the  suit,  the  property  was conveyed to the plaintiff.  It is only thereafter that the appellants in that case purchased the property.  In the facts of the present case, the Defendants 2 and 3 purchased the property even before the suit for specific performance was filed.  In the present case there is no conveyance in favour of the plaintiff after which the

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Defendants 2 and 3 purchased the property.  The ratio of M.M.S. Investments would therefore be of no assistance to the appellant herein.  On the other hand, the three Judge Bench decision in Ram Awadh would apply on all fours. 17) It  must  also  be  noted  that  though  aware  of  two conveyances of the same property, the plaintiff did not ask for their cancellation.  This again, would stand in the way of a decree of specific performance for unless the sale made by Defendant No. 1 to Defendant No.2, and thereafter by Defendant No.2 to Defendant No.3 are set aside, no decree for specific performance could possibly follow.  While Mr. Rao may be right in stating that mere delay without more would not dis-entitle his client to the  relief  of  specific  performance,  for  the  reasons stated above, we find that this is not such a case. The High Court was clearly right in finding that the bar of Section 16(c) was squarely attracted on the facts of the present  case,  and  that  therefore,  the  fact  that Defendant Nos. 2 and 3 may not be bona fide purchasers would not come in the way of stating that such suit must be  dismissed  at  the  threshold  because  of  lack  of readiness and willingness, which is a basic condition for the grant of specific performance.

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18) The appeal accordingly, stands dismissed.

.......................... J.       (ROHINTON FALI NARIMAN)

.......................... J.           (SANJAY KISHAN KAUL)

New Delhi; August 10, 2017.