2002 (8) TMI 877 - HC - Indian Laws

Summary

Issues Involved:
1. Specific performance of the contract for sale.
2. Readiness and willingness of the plaintiff.
3. Time as essence of the contract.
4. Discretionary power of the court under Section 20 of the Specific Relief Act (SR Act).
5. Admissibility of additional evidence under Order 41 Rule 27 CPC.
6. Rights of subsequent purchasers under Section 52 of the Transfer of Property Act.
7. Lis pendens.

Detailed Analysis:

1. Specific performance of the contract for sale:
The appeals challenge the judgment and decree dated 31st August 1999 by the Civil Judge, Senior Division, Alipore, ordering specific performance of a contract for the sale of 1/7th share of the defendant No. 1 in the suit property. The decree was contested by both the original vendor (defendant No. 1) and the subsequent purchaser (defendant No. 2).

2. Readiness and willingness of the plaintiff:
The plaintiff's readiness and willingness to perform the contract were scrutinized. The appellant argued that the plaintiff was not consistently ready and willing to perform the essential terms of the contract, particularly redeeming the property from a mortgage with LIC. The court emphasized that under Section 16 of the SR Act, the plaintiff must prove continuous readiness and willingness. The plaintiff's insistence on a marketable title free from encumbrances, contrary to the agreed terms, indicated a lack of readiness and willingness.

3. Time as essence of the contract:
The court examined whether time was the essence of the contract. Despite the general presumption against time being essence in immovable property contracts, the specific terms of the agreement and the surrounding circumstances indicated urgency. The contract stipulated a three-month period for completion, extendable to six months, beyond which the agreement would be void. The court concluded that time was indeed the essence of the contract, given the mounting interest on the mortgage and the pending confirmation of an auction sale.

4. Discretionary power of the court under Section 20 of the SR Act:
Section 20 of the SR Act grants the court discretionary power in decreeing specific performance. The court must consider whether such a decree would result in unfair advantage or hardship. The court found that enforcing specific performance would unfairly benefit the plaintiff and impose hardship on the defendants, especially since the defendant No. 2 had already redeemed the property from the mortgage and resolved related legal issues.

5. Admissibility of additional evidence under Order 41 Rule 27 CPC:
The defendant No. 2 sought to introduce additional evidence under Order 41 Rule 27 CPC, which included court orders and documents relevant to the mortgage and subsequent transactions. The court allowed this application, recognizing that the evidence was necessary for a comprehensive judgment and that the defendant was previously precluded from contesting certain issues due to the prevailing legal interpretation.

6. Rights of subsequent purchasers under Section 52 of the Transfer of Property Act:
The court addressed the rights of the subsequent purchaser (defendant No. 2), who bought the property during the pendency of the suit. The principle of lis pendens under Section 52 of the Transfer of Property Act applied, making the subsequent purchase subject to the outcome of the ongoing litigation. The court noted that the defendant No. 2 could contest the plaintiff's readiness and willingness due to the change in legal interpretation by the Supreme Court.

7. Lis pendens:
The court reiterated that the transfer to defendant No. 2 during the pendency of the suit was subject to the doctrine of lis pendens, which binds the subsequent purchaser to the results of the pending litigation. This doctrine aims to prevent the transfer of property rights that could affect the outcome of a legal dispute.

Conclusion:
The court concluded that the plaintiff was not ready and willing to perform the essential terms of the contract, time was the essence of the contract, and granting specific performance would be inequitable. The appeals were allowed, setting aside the decree for specific performance and instead awarding damages to the plaintiff. The defendant No. 1 was directed to refund the earnest money with additional damages, while the suit was dismissed against defendant No. 2.