KOLLI SATYANARAYANA (DEAD) BY LRS. VERSUS VALURIPALLI KESAVA RAO CHOWDARY (DEAD) THR. LRS. AND OTHERS

KOLLI SATYANARAYANA (DEAD) BY LRS.  VERSUS VALURIPALLI KESAVA RAO CHOWDARY (DEAD) THR. LRS. AND OTHERS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1013 OF 2014

KOLLI SATYANARAYANA (DEAD)

BY LRS. ...APPELLANT(S)

VERSUS

VALURIPALLI KESAVA RAO CHOWDARY (DEAD)

THR. LRS. AND OTHERS ...RESPONDENT(S)

J U D G M E N T

B.R. GAVAI, J.

1. This appeal challenges the judgment dated 17th

October 2008 passed by the learned Division Bench of the

High Court of Judicature, Andhra Pradesh at Hyderabad in

Letters Patent Appeal No. 26 of 1999, thereby partly allowing

the appeal filed by the present appellants.

2. Facts in brief giving rise to the present appeal are as

under:

The defendant is the owner of the suit property. The

defendant executed an agreement of sale in favour of the

plaintiff for sale of the suit property. The total consideration

was fixed at Rs.45,315/-. The plaintiff paid an amount of

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Rs.15,000/- by way of Demand Draft dated 7th July 1978 as

advance payment. The defendant addressed a letter to the

plaintiff on 13th October 1978 stating therein that, she was

ready to execute the sale deed and that she was coming to

Hyderabad the week thereafter for the said purpose. The

said communication was responded to by the plaintiff on 20th

October 1978, requesting to confirm whether the necessary

permission from the Competent Authority (hereinafter

referred to as the “ULC Authorities”) under the Urban Land

(Ceiling and Regulation) Act, 1976 (for short “ULC Act”) to

sell the suit property had been obtained or not. Immediately

thereafter, the plaintiff purchased stamp papers on 23rd

October 1978. On 8th December 1978, the defendant applied

to the Secretary to Government of Andhra Pradesh, Revenue

Department for granting exemption under Section 20 of the

ULC Act for selling the suit property. Another

communication was addressed by the plaintiff on 30th

December 1978, requesting the defendant to inform him as

soon as the requisite permission under the ULC Act has been

obtained. On 3rd March 1980, the defendant addressed a

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communication to the plaintiff stating therein that the

concerned official had promised her to do the needful.

3. On 12th April 1982, the defendant addressed a

communication to the plaintiff stating therein that the

requisite permission from the ULC Authorities could not be

obtained and therefore, she had cancelled the agreement of

sale dated 29th July 1978. The defendant had also enclosed

a Demand Draft of Rs. 15,000/- for the purpose of refund of

advance amount. The plaintiff replied to the defendant vide

communication dated 2nd May 1982 that, the contract was

binding and returned the said Demand Draft. He reiterated

that he was always ready to make the payment and execute

the sale deed. It was also contended by him that because of

the spiralling price rise, the defendant was going back on the

promise. The defendant, on 2nd June 1982 addressed a letter

to the plaintiff, stating therein that, she was forfeiting the

advance payment of Rs.15,000/- since the plaintiff had not

claimed the refund within 90 days from the date of the

agreement of sale. Thereafter, there were certain other

communications between the parties.

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4. The Government of Andhra Pradesh, vide G.O. Ms.

No. 161 dated 7th February 1984, granted exemption to the

defendant under the provisions of Section 20 of the ULC Act.

After coming to know about the same, on 19th February

1984, the plaintiff issued a legal notice to the defendant for

execution of the sale deed in pursuance of the agreement of

sale dated 27th July 1978. Since the defendant did not

respond, the plaintiff filed a suit bearing OS No. 139 of 1984

before the trial court seeking specific performance of the

agreement of sale dated 29th July 1978. The trial court, vide

judgment and decree dated 29th April 1988, decreed the suit

directing the defendant to execute the sale deed within 2

months from the date of the judgment and decree.

5. Being aggrieved thereby, the defendant (since

deceased) through legal representatives filed an appeal being

Appeal No. 1415 of 1998 before the High Court. The learned

Single Judge of the High Court, vide judgment dated 24th

September 1998, allowed the appeal and dismissed the suit

of the plaintiff. Being aggrieved thereby, the plaintiff filed an

appeal being LPA No.26 of 1999 before the Division Bench of

the High Court. The learned Division Bench of the High

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Court, vide impugned judgment dated 17th October 2008,

denied the relief to the plaintiff for specific performance.

However, it held that the plaintiff was entitled to get the

refund for the advance payment of Rs.15,000/- along with

the accrued interest or a sum of Rs.3,00,000/- in all. Being

aggrieved thereby, the plaintiff has approached this Court.

6. We have heard Shri C. Nageswara Rao, learned

Senior Counsel appearing on behalf of the appellants and

Shri Sridhar Potaraju, learned counsel appearing on behalf of

the respondents.

7. Shri Rao submitted that the learned Single Judge of

the High Court has erred in reversing the well-reasoned

judgment and decree passed by the trial court. He further

submitted that the Division Bench of the High Court also

erred in upholding the judgment passed by the learned

Single Judge denying specific relief. The learned Senior

Counsel submitted that the findings of the learned Single

Judge as well as the Division Bench of the High Court are

based upon misinterpretation of evidence. He submitted that

the learned Single Judge and the Division Bench have,

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through their own interpretation, imported a condition which

is not in existence.

8. Shri Sridhar, on the contrary, submitted that the

learned Single Judge as well as the Division Bench of the

High Court has concurrently held that the conduct of the

plaintiff was not such which entitled him for specific relief.

He further submitted that no interference is warranted in the

present appeal.

9. The learned Single Judge, while reversing the

judgment and decree passed by the trial court, has relied on

Clauses 3 and 5 of the agreement of sale dated 29th July

1978, which read thus:

“3. The sale deed shall be executed within

three months from the date of this agreement

or within one month from the date of receipt of

intimation from 'the vendor' stating that the

necessary permission from the concerned

authority under Urban Land Celling Act is

obtained or within such further period as

mutually agreed upon on payment of the

balance of consideration. If the balance of

consideration is not paid within the stipulated

period of agreed period rendering it difficult for

'the vendor' to execute the sale deed, this

agreement of sale shall stand cancelled.

4. ….

5. That 'the vendor' shall obtain permission for

alienation under Urban Land Ceiling Act or

any other Act as early as possible but not later

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than 75 days from the date of this agreement

and 'the vendor' shall be sole responsible for

obtaining the above permission, 'the

purchaser' shall be entitled to get back the

advance paid after 75 days from the date of the

agreement, but not later than 90 days under

any circumstances.”

10. Upon interpretation of the aforesaid clauses, the

learned Single Judge of the High Court came to a conclusion

that a reading of the said clauses made it clear that the

parties intended that that the permission should be obtained

by the defendant within 75 days. It held that in the event the

permission was not obtained by the defendant within the

stipulated time, the plaintiff was entitled to get back his

advance money. It has found that under the agreement of

sale, even for the said purpose, the limit of 90 days was fixed.

After the said period of 90 days, the plaintiff was not even

entitled to get back the advance money and the defendant

was entitled to forfeit the same.

11. The learned Single Judge further found that the

conduct of the parties to the contract was also significant. It

found that both the parties tried to get the exemption from

the Government of Andhra Pradesh under Section 20 of the

ULC Act for about a year after the agreement of sale dated

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29th July 1978. It is further to be noted that though the

defendant had communicated to the plaintiff on 12th April

1982 that, since the requisite permission from the ULC

Authorities could not be obtained and as such, she had

cancelled the agreement, the plaintiff did not file any

proceeding against the defendant. It was only after a period

of almost 2 years when the defendant obtained the

permission after cancellation of the earlier agreement, the

plaintiff chose to file the suit.

12. In the case of K.S. Vidyanadam and Others v.

Vairavan1, this Court has held that the court should look at

all the relevant circumstances including the time limit(s)

specified in the agreement and determine whether its

discretion to grant specific performance should be exercised.

It has been held that in case of urban properties, the prices

have been rising sharply. It has been held that while

exercising its discretion, the court should bear in mind that

when the parties prescribe certain time limit(s) for taking

steps by one or the other party, it must have some

significance and that the said time limit(s) cannot be ignored

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(1997) 3 SCC 1

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altogether on the ground that time is not the essence of the

contract.

13. Taking into consideration the fact that the

agreement of sale provided that in the event the permission

was not obtained within 75 days, the purchaser shall be

entitled to get back his advance money paid after 75 days but

not later than 90 days under any circumstances, the findings

of the learned Single Judge cannot be said to be erroneous.

After the defendant terminated the agreement on 12th April

1982 stating therein that since the permission from the ULC

Authorities could not be obtained, she had cancelled the

agreement of sale, the plaintiff did not take any step till 19th

February 1984. Only after the ULC permission was granted

on 7th February 1984, the plaintiff had issued a legal notice

to the defendant on 19th February 1984.

14. The Division Bench of the High Court, after

elaborately discussing the terms and conditions stipulated in

the agreement of sale, also agreed with the view taken by the

learned Single Judge.

15. Though, the Division Bench of the High Court denied

the relief for specific performance to the plaintiff, it has

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directed the respondents-defendants to refund the advance

amount of Rs.15,000/- along with accrued interest or a sum

of Rs.3,00,000/- in all.

16. We do not find any reason to differ with the

concurring judgments passed by the learned Single Judge as

well as the Division Bench of the High Court denying a

decree for specific performance. However, taking into

consideration the facts and circumstances and an

undisputed position that the defendant had, in fact, received

an amount of Rs.15,000/- as early as 1978, we direct the

respondents-defendants to pay an amount of Rs.15,00,000/-

to the appellants-plaintiffs. The said amount shall be paid

within a period of 3 months from the date of this judgment.

17. In the result, the appeal is allowed in the aforesaid

terms. Pending application(s), if any, shall stand disposed of

in the above terms. No order as to costs.

…..….......................J.

[B.R. GAVAI]

…….......................J.

[C.T. RAVIKUMAR]

NEW DELHI;

SEPTEMBER 27, 2022.