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2021 (4) TMI 1327 - SC - Indian LawsDecree for specific performance - seeking direction to the Respondents to deliver vacant possession of the schedule property - decree of permanent injunction restraining the Respondents from alienating or encumbering the suit property - decree of permanent injunction restraining the Respondents from alienating or encumbering the suit property and a decree of mandatory injunction to deposit the title deeds with the Court - contention of the Appellants is that the agreements and the MOUs have to be read together - HELD THAT - There is no dispute about the agreements dated 20.03.1991 and the MOUs between the parties. It is also a fact that Income Tax Department wanted to compulsorily acquire the property, due to which Writ Petitions were filed which were disposed of on 11.09.1998. Writ Appeals filed by the Department were pending on the date of filing of the suit. The relevant clause in the MOU is that the Appellants shall pay the balance sale consideration at the time of registration of sale deeds immediately after the disposal of the Writ Petition. The Division Bench of the High Court in the impugned judgment held that the Appellants were not ready and willing to perform their part of the agreement by not depositing the balance sale consideration immediately after the disposal of the Writ Petition. The High Court lost sight of the words at the time of registration of sale in clause 3 of MOUs - there are force in the submission made on behalf of the Appellants that payment of balance consideration has to be done only at the time of the registration of the sale deeds. Admittedly, no steps were taken for the registration of the sale deeds. The finding of the Division Bench of the High Court that the Appellants were not ready and willing to perform their part of the contract by not paying the balance consideration immediately after disposal of the Writ Petition is erroneous. The High Court highlighted the conduct of the Appellants to deny relief. The failure of the Appellants in not pleading and proving how they were put in possession of a part of the property, the frivolous complaint about vacant possession not being given by the Respondents and the attempt made by the Appellants to take forcible possession of a part of the property were commented upon to hold that the Appellants were disentitled to equitable relief. There is not dispute that the Appellants were in possession of the first floor of the property. Details about the manner in which possession was given to the Appellants not being pleaded cannot be a ground to deny relief - The contention of the Appellants is that the Indian Bank was not a tenant in the ground floor but only a creditor of the Respondents. Admittedly, the Indian Bank sued the Respondents for recovery of the loan by the sale of the hypothecated goods stored in the ground floor. It was also contended on behalf of the Appellants that a police complaint was preferred by them against the Respondents for causing disturbance to their possession. The Appellants cannot be said to be disentitled for a relief of specific performance on the ground that their conduct on this count is blameworthy. A suit for specific performance cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where an immovable property is to be sold within a certain period, time being of the essence, and it is not found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the Court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour even at the appellate stage - the Respondents are not entitled for any additional amount as 90 per cent of the sale consideration was paid by the Appellants before 1994. Appeal allowed.
Issues Involved:
1. Specific performance of agreements of sale and Memoranda of Understanding (MOUs). 2. Time-barred nature of the suit. 3. Readiness and willingness of the Appellants to perform their part of the contract. 4. Interpretation of the MOUs and agreements. 5. Conduct of the Appellants affecting equitable relief. 6. Impact of delay and escalation of property prices on specific performance relief. Issue-wise Detailed Analysis: 1. Specific Performance of Agreements of Sale and MOUs: The Appellants filed four suits for specific performance of agreements of sale dated 20.03.1991 and MOUs dated 24.01.1994. They sought a decree for specific performance, vacant possession, permanent injunction, and mandatory injunction for deposit of title deeds. The agreements stipulated that the sale was to be concluded within four months, with the Respondents obtaining necessary certificates. Due to compulsory acquisition orders by the Income Tax authorities, the parties entered into MOUs in addition to the original agreements. The MOUs recorded partial payments and stipulated that the balance was to be paid at the time of registration of sale deeds after writ petition disposal. 2. Time-barred Nature of the Suit: The Respondents contended that the suit was time-barred, arguing that time was of the essence for the agreements. They claimed the Appellants delayed filing the suits until 2000, despite the writ petition being disposed of in 1998. The learned Single Judge held that the suit was filed within three years from the writ petition disposal, thus not barred by limitation. The Division Bench, however, found the delay of over two years indicative of the Appellants' lack of readiness and willingness. 3. Readiness and Willingness of the Appellants: The learned Single Judge concluded that the Appellants were ready and willing to perform their part of the contract, evidenced by their deposit of the balance sale consideration and prior payments. The Division Bench disagreed, emphasizing the Appellants' failure to deposit the balance immediately after the writ petition disposal and their inaction for over two years. The Supreme Court found the Division Bench's interpretation erroneous, noting that the balance was due at the time of registration, not immediately post-writ petition. 4. Interpretation of the MOUs and Agreements: The Appellants argued that the agreements and MOUs should be read together, with the balance consideration payable at registration after writ petition disposal. The Division Bench's emphasis on the word "immediately" was found misplaced by the Supreme Court, which highlighted the clause requiring payment at the time of registration. The Supreme Court agreed with the Appellants' interpretation, finding the Division Bench's conclusion based on a faulty reading of the MOUs. 5. Conduct of the Appellants Affecting Equitable Relief: The Division Bench denied relief based on the Appellants' conduct, including their possession of part of the property and attempts to disturb the Indian Bank's possession. The Supreme Court found these reasons insufficient to deny specific performance, noting that possession details and the Appellants' actions did not disentitle them to relief. The Appellants' possession of the first floor and their complaint about vacant possession were not grounds to deny relief. 6. Impact of Delay and Escalation of Property Prices on Specific Performance Relief: The Division Bench considered the delay and property price escalation as factors against granting specific performance. The Supreme Court clarified that delay due to court processes should not be held against the plaintiff and that price escalation alone is not a ground to deny relief. The Supreme Court noted that 90% of the sale consideration was paid before 1994, negating the need for additional amounts due to delay. Conclusion: The Supreme Court set aside the Division Bench's judgment, restoring the learned Single Judge's decree for specific performance. The Appeals were allowed, affirming the Appellants' readiness and willingness, proper interpretation of the MOUs, and entitlement to specific performance despite the delay and conduct issues raised by the Respondents.
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