2005 (4) TMI 615 - SC - Indian Laws

Suit for specific performance of contract - Agreement of sale - Whether the plaintiff-Respondents were all along and still are ready and willing to perform their part of contract as is mandatorily required u/s 16(c) of the Specific Relief Act - HELD THAT - In the instant case, the First Respondent herein, however, raised a specific plea that he was a debtor and that the deed of mortgage was executed only because the Appellants were not licensed money lenders. He not only approached the competent authority under the Maharashtra Debt Relief Act for a declaration that he was a debtor and stood discharged from his debt, but also in the plaint he sought for a decree for possesion of the suit land on the premise that the provisions of the Maharashtra Debt Relief Act were attracted. He even asked for a decree of accounting. Reading the plaint as a whole, it becomes evident that the First Respondent principally raised a contention that the transaction was of mortgage and the sale stood redeemed and he was discharged from the debt. He moreover prayed for a decree for accounting, but contended that only in the event, such prayer is not granted, he was ready to pay the defendants the said sum of ₹ 45,000/- The averments made in the pleadings must be construed reasonably and so read the statement made as regard purported readiness and willingness to pay the stipulated amount to the defendants according to the conditions mentioned in the agreement cannot be read in isolation. It is now well-settled that the conduct of the parties, with a view to arrive at a finding as to whether the plaintiff-Respondents were all along and still are ready and willing to perform their part of contract as is mandatorily required u/s 16(c) of the Specific Relief Act must be determined having regard to the entire attending circumstances. A bare averment in the plaint or a statement made in the examination-in-chief would not suffice. The conduct of the plaintiff-Respondents must be judged having regard to the entirety of the pleadings as also the evidences brought on records. Power of the Appellate Court in intra court appeal is not exactly the same as contained in Section 100 of the Code of Civil Procedure but it is also well-known that entertainment of a Letters Patent Appeal is discretionary and normally the Division Bench would not, unless there exist cogent reasons, differ from a finding of fact arrived at by the learned Single Judge. Even as noticed hereinbefore, a court of first appeal which is the final court of appeal on fact may have to exercise some amount of restraint. Thus, the impugned judgment cannot be sustained which is set aside accordingly. The appeal is allowed.

Issues Involved:
1. Nature of the transaction (sale vs. mortgage)
2. Readiness and willingness of the plaintiff-Respondents to perform their part of the contract
3. Valuation of the suit property
4. Jurisdiction and discretion of the appellate court in interfering with concurrent findings of fact

Detailed Analysis:

1. Nature of the Transaction (Sale vs. Mortgage):
The primary issue was whether the transaction was a sale with a condition of repurchase or a mortgage by way of conditional sale. The Trial Court and the learned Single Judge held that the transaction was a sale, not a mortgage. The Division Bench of the High Court, however, reversed this finding, considering the transaction to be more than a mere deed of conveyance due to the absence of interest and the provision for payment after 7 to 9 years. The Supreme Court emphasized the distinction between a mortgage by conditional sale and a sale with a condition of repurchase, citing Section 58(c) of the Transfer of Property Act and relevant case law, concluding that the transaction was not a mortgage by way of conditional sale.

2. Readiness and Willingness of the Plaintiff-Respondents:
The Trial Court found that the plaintiffs were not ready and willing to perform their part of the contract. The Division Bench of the High Court disagreed, holding that the plaintiff-Respondents had pleaded and proved their readiness and willingness. The Supreme Court, however, noted inconsistencies in the plaintiffs' pleadings and evidence, particularly their claim of debt discharge under the Maharashtra Debt Relief Act, which was irreconcilable with the plea of readiness and willingness. The Court stressed that mere averments in the plaint or statements in examination-in-chief are insufficient; the conduct of the plaintiffs must be judged in totality. The Supreme Court held that the plaintiffs' conditional offer and inconsistent pleas did not satisfy the requirements of Section 16(c) of the Specific Relief Act.

3. Valuation of the Suit Property:
The Trial Court held that the suit property was not undervalued, and the consideration of Rs. 45,000 was adequate. The Division Bench of the High Court differed, noting that the provision for payment after 7 to 9 years without interest indicated undervaluation. The Supreme Court found that the Division Bench erred in considering irrelevant facts and interfering with the concurrent findings of fact by the lower courts.

4. Jurisdiction and Discretion of the Appellate Court:
The Division Bench of the High Court exercised its jurisdiction to entertain the Letters Patent Appeal, considering both questions of fact and law. The Supreme Court acknowledged that while the appellate court has broad jurisdiction, it should exercise restraint and not interfere with concurrent findings of fact unless there are cogent reasons. The Supreme Court concluded that the Division Bench misdirected itself by posing the wrong questions and not adequately considering the plaintiffs' statements and conduct.

Conclusion:
The Supreme Court set aside the judgment of the Division Bench of the High Court, reinstating the findings of the Trial Court and the learned Single Judge. The appeal was allowed, and no costs were awarded. The Supreme Court emphasized the importance of consistent pleadings, the totality of circumstances, and the need for appellate courts to exercise restraint in interfering with concurrent findings of fact.

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