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TMI Blog1990 (10) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The plaintiff has further stated in the plaint that it had been repeatedly requesting the defendant to accept the further sum of ₹ 3,40,000 in terms of the Agreement dated 16th October, 1985 and deliver possession of the plot but the defendant had been avoiding the same on one pretext or the other. The plaintiff states that ultimately on 16th November, 1985 it got a draft for ₹ 3.40.000 prepared in favor of the defendant and a telegraphic information regarding tills was sent to the defendant, requesting him lo accept the said payment and to complete the formalities regarding the agreement. In spite of this, the defendant was not willing to accept the said payment. In response to the said telegram, the defendant telegraphically informed the plaintiff that there was no agreement dated 16th October, 1985 and the defendant was not willing to accept the payment offered by the plaintiff. The defendant also made a reference to a notice dated 10th November, 1985 in the said telegram which was issued by counsel for defendant to the plaintiff repudiating the agreement dated 16th October, 1985. It is the case of the plaintiff that the contents of the notice show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific performance of agreement dated 16th October, 1985 ? If so, on what terms ? (4) Relief." (6) I have heard the learned counsel for the parties in support of their respective cases. The counsel for the parties have also taken me through the relevant portions of the pleadings, the evidence end the documents on record. At the outset, I note that in the issues framed on 2nd August, 1988 in the presence of counsel for both the parties, no issue was claimed regarding the controversy now raised before me during the course of the hearing as to "whether the document dated 16th October, 1985 amounts to a contract or it is a mere receipt which cannot be specifically enforced". Since no issue was framed on this aspect of the case, it may be reasonable to say that the defendant was not serous about this plea and therefore, did not want any adjudication thereon. However, since the counsel for the parties hive addressed arguments before me on this question. I propose to deal with the same and record my findings thereon. (7) The original of the document dated 16th October, 1985 is Ex P-l on the record. The same is titled as 'RECHIPT'. A perusal of the said document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is reduced to writing. Further, where all the specific terms have been agreed upon and reduced into writing, the mere fact that it is stated that a formal contract will be executed, does not render the writing, in the first instance, to be of no avail. These are certain general principles regarding formation of contracts. (9) Now coming to the "receipt", Ex. P.1, as already noticed above the essential/substantial terms have been agreed upon and reduced into writing therein. It does not contain any mention that a formal Agreement Safe will be executed. Therefore, it is not possible to hold that the same does not amount to a contrail. Looting at it from a different angle one may ask as to when the stage for payment of earnest money or token money arises ? The answer is that the occasion for payment of earnest money arises only in pursuance of an agreement, i.e., when the essential tern's-and conditions are finalised The fact that the vendee parts with a substantial amount in favor of the vendor shows that the parties have reached a consensus on the various terms of the arrangement between them meaning there- by that a contract has been arrived at. It is also worth no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des :-- "THE jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so, but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal." Thus the relief of specific performance is a discretionary (Mayawanti Vs. Kaushalya Devi . The discretion is, however, to be exercised in a judicial manner and cannot be arbitrary. Fry in his Specific Performance (6th edn. p. 19) said : "THERE is an observation made with regard to the jurisdiction in specific performance, which remains to be noticed. It is said to be in the discretion of the court. The meaning of this proposition is not that the court may arbitrarily or capriciously perform one contract and refuse to perform another, but that the court has regard to the conduct of the plaintiff and to circumstances outside the contract itself, and that the mere fact of the existence of a valid contract is not conclusive in the plaintiff's favor. If the defendant, said Plumer V. C. can show any circumstances dehors, independent of the writing, mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is paid, the vendor will not be entitled to make any construction on the land subject matter of the agreement. Therefore, on facts, the argument of the counsel for the defendant does not appear to be sound. Apart from this. Sec. 20 Sub-Sec. (4) of the Specific Relief Act, specifically provides that the court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party. This statutory provision to my mind takes care of such an argument as has .been advanced in the present case. In view of this I do not find any substance in the. argument based on Jack of mutuality advanced on behalf of the defendant. The same is rejected. (15) Now coming to the third point as to whether time was of the essence of the contract and whether the plaintiff has failed to perform its obligations under the contract, certain sequence of the events that have taken place has to be noted. (16) In this behalf the first stage is of the execution of the agreement on 16th October, 1985. A sum of rupees one lac was admittedly received by the defendant from the plaintiff en the said date. A further sum of ₹ 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. On behalf of the plaintiff it has been stated in the examination-in-chief of Public Witness 1 that before the one month expired, the defendant sent a notice resiling from the contract. "However, I was ready to make the payment of ₹ 3,40,0001- and accordingly a demand draft was also made. A telegram was sent by the plaintiff to defendant on 16-11-85 to that effect. The telegram is Ex. D-2. Reply was received from the defendant which is Ex. D'-3 and the defendant stated that the defendant is not ready to accept the payment of ₹ 3,40,0001-" In the cross-examination, Public Witness -1 has stated as under :- "IT is true that 30 days expire on 15th November 1985. It is incorrect to suggest that till 15th November 1985 I did not offer to make the payment. I bed given a cheque which he refused to accept." It is true that telegram was sent on 15th November 1985" (should be 16th November J 985). The defendant has appeared as DW-1. This is all that he had to say in this context. "'The notice was sent because there was no security for the balance of ₹ 6,60,0001'-. We have heard about the reputation of the plaintiff that as, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact and the decision of this depends on the entire relevant facts on record of the case. The principles in this behalf are well-known and find expression in various judgments. Suffice to refer to Palanichami Vs. G. Pillai Air 1966 Madras 46(5) which was approved by the Hon'bic Supreme Court in Gomathinayagam Pillai Vs. Palaniswami Nadar. followed by Govind Prasad Vs. Hari Dutt, A Division Bench of our own High Court has also dwelled on this in Smt. Kamal Rani Vs. Smt. Chand Rani & Others, reported as I.L.R. 1978 Vol. Ii Del. 539. All the authorities lay down that the real test is the intention of the parties. Generally in the context of immovable properties time is not of the essence of the contract. But this general principle is subject to the exceptions as may arise en the facts of a given case herein the parties may make time of the essence of the contract even in cases relating to immovable property. In the present case the stipulation regarding payment of ₹ 3,40,000.00 contains the rider that the said amount was payable within 30 days of the date of execution of Ex. P-l. It is further stated that failure io comply with the condition would mean that the agreement wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. to go ahead with the 'agreement and in fact the agreement was repudiated vide said notice. As already held by me, the said notice was delivered to the plaintiff on 14th November 1985. In spite of this notice and the content thereof, is it possible to infer that time was of the essence of the contract meaning thereby that by 15th, i.e., the next date after the notice was received by the plaintiff, the plaintiff must pay a sum of ₹ 3,40,000'- to the defendant irrespective of the fact whether defendant delivers the possession of the plot to him or not. To my mind it cannot be said in these facts that time was the essence of the contract. Even in the telegram Ex. D-3. the emphasis of the defendant is on the contents of his notice Ex. D-l. All this leaves no doubt in my mind that time was -never intended to be of the essence by the parties, or at least it is not open to the defendant to say so. (22) Counsel for the defendant has submitted that there is no convincing evidence on record that payment of ₹ 3,40,000 was offered by the plaintiff to the defendant within 30 days. counsel further says that the plaintiff has not specifically said so in his examination-in-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very important consideration. Thus the performance of the plaintiff was linked up with the performance on the part of defendant. When the defendant was not willing to perform his part of the promise and had made his intention very clear in this behalf, where was the question of plaintiff paying a sum of ₹ 3,40,000 to the defendant. The counsel relies on Section 51 of the Contract to say that he is to be relieved of his obligation under the contract in view of the clear intention' of the defendant not to perform his part of the agreement. (26) The counsel for plaintiff has laid emphasis on the case of the defendant in his written statement as well as in the notice Ex. D-l which is one of repudiation of the agreement. On the plaintiff's plea of repudiation of the contract by the defendant, there is yet another argument from the defendant which needs lo be examined. The argument is that notwithstanding the repudiation of the contract by the defendant, the plaintiff was bound to perform its obligation under the agreement. The principle enunciated in this behalf is that the party which seeks to enforce the agreement and which does not accept repudiation, has to continue t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention to Section 16(c) of the Specific Relief Act where it is laid down as a statutory requirement that the plaintiff has to clearly 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. Reference had been made by counsel for the defendant in this behalf to Ardeshir Vs. Flora Sessoon. 1928 P.C. 208(13) and Smt. Raj Rani Bhasin Vs. S. Karta" Singh. .(14) Counsel for the defendant has further submitted with reference to the plaint in the suit that the same is totally vague on this point and fails to satisfy the requirements of this provision of the statute. (30) In answer to this argument, counsel for the plaintiff has drawn my attention to para 12 of the plaint. Apart from this the counsel has drawn my attention to the statement of Nanak Ram, Public Witness -1. The counsel urges that in this behalf an overall view has to be taken on the basis of totality of the facts and not on the basis of a statement here or there. Reference has also been made to para 22 of the plaint as well as para 13 of the replication at internal page 9. Counsel says that Hie necessary requirements of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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