Mangabhai Jadavbhai Makwana vs Tekchand Chhaganlal Shah & on 10

October, 2013
Equivalent citations: AIR 2014 GUJARAT 12

Author: S.H.Vora

Bench: S.H.Vora

MANGABHAI JADAVBHAI MAKWANA....Appellant(s)V/STEKCHAND CHHAGANLAL SHAH

C/AO/442/2012

CAV JUDGEMNT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM

ORDER NO.

442 of 2012 With CIVIL APPLICATION NO.

12466 of 2012 In APPEAL FROM ORDER NO.

442 of 2012 With APPEAL FROM ORDER NO.

470 of 2012 With CIVIL APPLICATION NO.

12927 of 2012 In APPEAL FROM ORDER NO.

470 of 2012 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE S.H.VORA

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=== Whether Reporters of Local Papers may be allowed to see the judgment ?
To be referred to the Reporter or not ?
Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as to the interpretation of the
Constitution of India, 1950 or any order made thereunder ?
Whether it is to be circulated to the civil judge ?
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=== MANGABHAI JADAVBHAI MAKWANA....Appellant(s) Versus TEKCHAND
CHHAGANLAL SHAH &
3....Respondent(s)
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=== Appearance:
MRS KETTY A MEHTA, ADVOCATE with MS ARCHANA R ACHARYA,
ADVOCATE for the MR RS SANJANWALA, SENIOR COUNSEL with MR DILIP
L KANOJIYA, ADVOCATE for MR DHAVAL DAVE, SENIOR COUNSEL with
MR JIGAR M PATEL, ADVOCATE for
the ==========================================================
====== CORAM:
HONOURABLE MR.JUSTICE S.H.VORA Date : 10/10/2013 CAV JUDGEMNT
1. Challenge in both these appeal from order preferred under Order 43 Rule 1(r) read
with section 114 of the Code of Civil Procedure, 1908 is the order dated 24.9.2012
passed in Civil Suit Nos.79/2011 and 80/2011 respectively passed below Exh-5,
whereby the learned trial Judge rejected injunction application pending the suit for
restraining the defendants, their servants, agents from transferring, selling, gifting,
renting or creating third party right or handing over physical possession to anyone
over the suit land, more particularly, described in the plaint situated at village
Sarbhod, Tal: Bardoli, Dist: Surat admeasuring 7487 sq mtr and 15783 sq mtr
respectively.
2. Since the dispute relates to the sale agreement dated 12.12.2009 entered into
between the purchaser and seller of the suit land stipulates identical terms and
conditions governing sale transaction except price of the suit land, they are hereby
disposed of by this common judgment so as to avoid repetition of facts and findings.
The parties to the proceedings would be referred to as per their original status in the
plaint.
3. According to the plaintiff, the owner of suit land entered into agreement to sell on
12.12.2009 and total sale price was fixed at Rs.47,76,920/-.

On the date of execution of the agreement, the plaintiff paid Rs.3 lac to the defendant
Nos.1 to 3 (hereinafter referred to as the owners ) as per clause 2 of the sale
agreement. It is the case of the plaintiff that the balance amount was to be paid at the
time of execution of the registered sale deed and vide clause No.3 of the agreement to
sell, time limit to execute the sale deed is for four months, but subject to extension of
time of execution of sale deed after mutual consultation. It is specific case of the
plaintiff that as per clause 10 of the agreement to sell, the owners had agreed to give
the suit land with clear and marketable title and if any defect in the title of the suit
land is found, then the owners were required to get the title clear at their cost and the
owners had also further agreed to give proof of clear and marketable title of the suit
land as per various clauses of the sale agreement, more particularly, clause 5,6,12 and
13. It is further the case of the plaintiff that clause 15 of the agreement specifically
provides that owners would be responsible to hand over peaceful possession of the
suit land after taking the possession of the land from one Mr. Devilal Shah i.e.
defendant No.4, who is cultivating the suit land. According to the plaintiff's case,
during the period from March to September, 2010, the plaintiff approached the owners
personally and demanded the proof regarding clear and marketable title of the suit
land as per sale agreement and also shown readiness and willingness to pay the
remaining balance amount and requested to execute the sale deed. It is the case of the
plaintiff that in the month of March, 2010, when the plaintiff obtained relevant entries
of the suit land from the revenue records, the plaintiff shocked to find that on
20.9.2010, provisional entry No.6936 was mutated in the revenue records in the name
of one Mr. Devilal Shah - the defendant No.4 in pursuance to family settlement.
Thereafter, the plaintiff appraised the said facts to the owners and tried to know true
facts and at that time, the owners assured the plaintiff that they would obtain physical
possession of the suit land from said Devilal Shah and will execute sale deed in favour
of the plaintiff. It is the case of the plaintiff that the owners have filed appeal before
the Deputy Collector against said Devilal Shah challenging Entry No.6936. Vide order
dated 20.10.2011, the Deputy Collector was pleased to cancel the said entry and
against the said order, Mr. Devilal Shah filed Revision Application No.324 of 2011
before the District Collector, Surat and said proceedings are pending as on this date. It
is further the case of the plaintiff that in January, 2011, the plaintiff again requested
the owners to accept the remaining consideration and provide the proof regarding
clear and marketable title of the suit land and execute the registered sale deed in
favour of the plaintiff. However, the owners gave false excuses and did not perform
their part of the contract as per sale agreement and therefore, the plaintiff had
compelled to file the suit for specific performance of sale agreement and along with
the suit, the plaintiff filed application for interim relief at Exh.5 to restrain the
defendants from transferring, selling, gifting, mortgaging, renting, leasing the suit land
in any manner whatsoever to the third party and also from erecting any construction
developing the suit land till final disposal of the suit.

4. While denying each and every averments made by the plaintiff in the suit, the
owners have contended that the suit is hit by provisions of section 16(c) of the
Specific Performance Act while admitting receipt of part payment as per sale
agreement. It is contended by the owners that title of the suit land was clear right from
the very beginning and they have agreed to sell the suit land to the plaintiff as it is
where it is. It is further contended by the owners that there is no charge over the suit
land. It is further contended that as per clause 15 of the sale agreement, the plaintiff
purchased the suit land with open eyes, inasmuch as the plaintiff was required to
obtain possession of the suit land from said Mr. Devilal. It is contended that clause 4
specifically stipulates that the plaintiff was required to pay balance consideration
before obtaining possession and such payment was to be made within four months
from the date of sale agreement. In sum and substance, it is contended that the
plaintiff was required to pay balance consideration within four months and if at all, if
the owners have committed any breach within four months of the sale agreement, then
there is no explanation for the delay of around 20 months caused in filing the suit. So,
on account of delay and laches, injunction application deserves to be rejected. It is
further contended that the meeting took place between the plaintiff and the owners for
execution of sale deed, but as the plaintiff did not have balance consideration, the
plaintiff came out with a case that the owners have committed breach of agreement
and therefore, urged to dismiss the injunction application.

5. I have heard the submissions of learned advocate Mr.Ketty Mehta for the appellant,
learned Senior Counsel Mr. R.S. Sanjanwala with learned advocate Mr. Dilip
Kanojiya for respondent Nos.1 to 3 and learned Senior Counsel Mr. D.C. Dave with
learned advocate Mr. Jigar M. Patel.

6. Before the submissions made by the parties are considered, it is relevant to produce
translated English version of the relevant terms of the agreement to find out as to who
is at breach of the agreement.

(2) Said lands have been decided to be sold to the the Party of the First Part by the
Party of the Second Part at the lump sum price of Rs.47,76,920/- ( in words rupees
forty seven lacs and seventy six thousand and nine hundred twenty rupees
only).Therefore, the Party of the First Part has paid the amount of Rs.300,000/- ( in
words rupees three laces only) to the Party of the Second Party as per the following
details.

Sr. Details Date Check No. Amount.

Cash 28/11/2009

--
50,000/-

Dena Bank, Nana Varachha Road Branch, Surat. 395006 15/12/2009 35691 50,000/-

-As above-

15/12/2009 35682 1,00,000/-

-As above-

15/12/2009 35693 1,00,000/-

3,00,000/-

Aforesaid amount has been received by the Party of the Second Part from the Party of
the First Part, its receipt is hereby admitted by the Party of the Second Part and the
remaining amount of sale consideration of Rs.44,74,080/- is to be paid by the Party of
the First Part to the Second Part at the time of executing Sale Deed. And now there is
no dispute about consideration of the land between the parties.

(3) The time limit of the said Satakhat i.e. the Contract of Sale has been fixed for
4(four) months. However, the parties shall be entitled to making change in the time
limit on mutual understanding.

(4) During now, the actual possession of the said land on the spot has been continued
in the name of the Party of the Second Part and as it has been decided between the
parties, the possession of the said land shall be required to be handed over to the Party
of the First Part. After the payment is paid, the possession shall be handed over.

(7) The Party of the First Part shall have to bear the entire expenses in respect of the
sale deed of the said lands like as Stamp-Duty, Registration Fee, Legal charge etc and
even if there arises any need of signature, consent of the interested members of the
family of the Party of the Second Part in sale deed or in any other necessary write ups/
contracts, it has to be done or got done by the Party of the Second Part. And sale deed
of the said land shall be registered or got registered by the Party of the Second Part in
the name or names more than one as said by the Party of the First Part. And if any
sale, transfer or contracts in respect of said lands has been executed prior to this by the
Party of the Second Part, or they are found so, in this regard the Party of the Second
Part shall be wholly responsible and the Party of the Second Part shall have to remove
them by way of settlement on his cost. And Just as the amount of consideration is paid
up, the party of the Second Part shall have to register the sale deed of the land in the
name of the party of the First Part or get it registered in the name or names as stated
by the Party of the First Part.

(10) The Party of the Second Part has decided to sell Said lands to the party of the
First Party with assurance that prior to this, said lands have not been sold, mortgaged,
gifted to any other or in doing so no write ups like contract, Satakhat, Power Of
Attorney have been executed with any other and no document of transfer has been
registered and not created interest of anyone. No seizure or attachment or stay by the
Court is there on the said lands. And it has not been given against surety or in
equitable mortgage. No chapters are pending for acquisition of the said lands. And
said lands are not in reservation or in acquisition. And nobody's rights of alimony or
tenancy are there on the said lands and nobody's any kinds of easement rights are there
. The titles of the said lands are clear and marketable. And if any fault is found in the
title, it has to be cleared up by the Party of the Second Part on his cost and now
onwards, the party of the Second Part shall have not to execute any kinds of write ups
in respect of sale or transfer of the said lands or not to get anybody to do so.

(11) If there is any body's objection, disagreement, involvement- dispute or right,

hissa or person's claim in respect of the said lands, the Party of the Second Part shall
be wholly responsible for all this. And the Party of the Second Part shall have to get
all these involvement-dispute, objection, disagreement cleared up before executing the
sale deed. And the party of the First Part has to be made sure about the fact that the
title of the said lands are clear and marketable by the party of the Second Part. And
despite this, there remains any body's hissa, claim, the party of the Second Part shall
be responsible for all this. And the party of the Second Part has given permission of
paper out for sale of the said lands to the party of the First Part. And the party of the
Second Part shall be wholly responsible, if there arises any kinds of objection,
disagreement or dispute in respect of said paper out.

(15) Devilal cultivates in the scheduled lands and the party of the Second Part has not
executed any kinds of write ups or contracts with him and Devilal does not have any
right- interest on the said lands and the Party of the Second Part shall have to say to
vacate the possession of the said land to Devilal in presence of the party of the First
Part and the Party of the First Part shall have to take over the possession of the said
lands from Devilal.

(17) The parties can make special implementation of this contract. If any party
commits breach of this Satakhat or its conditions, the other party can get the special
implementation of this contract done by taking legal actions against the party
defaulting.

7. The subject matter of land of appeal from order No.442 of 2012 is the land bearing
old Block No.215 of revenue survey No.183 and Block No.216 of revenue survey
No.182/2 situated at village Sarbhod, Tal:

Bardoli, Dist: Surat belonged to defendant Nos.1 to 3, whereas subject matter of land
of appeal from order No.470/2012 is the land bearing survey No.182/1 and survey
Nos.181/1 and 181/2 situated at village Sarbhod, Tal: Bardoli, Dist: Surat belonged to
defendant Nos.1 to 7, whereas the defendant Nos.4 and 8 in both the appeal from
order is one Mr. Devilal Shah, who is in possession of the suit land.

8. For the sake of brevity, since the facts are common in both the appeal from order,
facts of Appeal from Order No.442 of 2012 are taken.
9. Learned advocate Ms. Ketty Mehta appearing with learned advocate Ms. Archana
Acharya for the appellant submits that the learned trial Judge failed to appreciate the
provisions contained in section 16(c) of the Specific Relief Act. It is submitted that the
facts averred in plaint para 3 and 4 clearly show that the plaintiff performed his part of
contract since the execution of the sale agreement and in order to establish financial
capacity, the plaintiff has made a specific statement in para 4 of the plaint that if Court
orders, the plaintiff is ready to deposit the balance consideration in the Court. It is also
stated by the plaintiff that the plaintiff is an agriculturist and doing business and
therefore, financially, he is sound and also is paying income tax. After relying upon
the decision rendered in case of Rajya Tulsibhai Patel Vs. Benar Enterprise and
others reported in AIR 1988 Gujarat 42, it is submitted by learned advocate Ms.
Mehta that averments made in plaint para Nos.3 and 4 amounts to sufficient
compliance with requirements of law and therefore, the learned trial Judge has
committed error in dismissing the injunction application on this count. It is also
submitted by Ms. Mehta that the learned trial Judge has not considered the relevant
conditions of the suit agreement and further failed to appreciate that though the
plaintiff approached the defendants on various occasions and held meeting with the
owners so as to execute the sale deed in his favour, but the owners failed to perform
their part of the agreement as the owners failed to provide clear and marketable title
and further failed to comply with condition No.15, inasmuch failed to direct said Mr.
Devilal to leave the possession of the suit land and thus, the owners failed to take over
the possession of the suit land from said Mr. Devilal. After relying upon decision in
case of Vidhyadhar Vs. Manikrao and another reported in AIR 1999 SC 1441, it is
submitted by Ms. Mehta that on reading of the agreement as a whole, the owners were
bound to execute sale deed first and upon such execution of the sale deed, the plaintiff
was required to part with the money. Lastly, learned advocate Ms. Mehta submitted
that the appeal may be allowed and the order passed by the learned trial Judge may be
set aside as the learned trial Judge has committed error both at law and facts in
dismissing the injunction application preferred by the plaintiff.

10. Per contra, learned Senior Counsel Mr. Sanjanwala appearing for the owners
submitted that the plaintiff was never ready to perform his part of the contract and
therefore, in the various meetings held with the plaintiff, the plaintiff disclosed/stated
that he has no balance consideration to pay and since it is not the case of the plaintiff
that time limit of four months is extended by mutual agreement, the plaintiff was
required to pay balance consideration within four months of the execution of the sale
agreement as per condition No.3. It is submitted by learned Senior Counsel Mr.
Sanjanwala that issue of possession over suit land was under cloud from the date of
sale agreement and therefore, the party to the sale agreement incorporated condition
No.15 in the sale agreement. According to him, both the plaintiff and the owner have
entered into an agreement with open eyes and also agreed to pay balance
consideration before handing over the possession. Such intention can be gathered on
bare perusal of condition Nos.4 and 15. According to him, since the plaintiff has no
balance consideration to pay or for any other reasons best known to him, the plaintiff
was not ready to part with the balance price so as to execute the sale deed in his
favour. In support of his submission, Mr. Sanjanwala has relied upon decision in case
of K.S. Vidyanandam and others Vs. Vairavan reported in AIR 1997 SC 1751.

11. Learned Senior Counsel Mr. Dhaval Dave appearing with Mr. Jigar M. Patel,
learned advocate for the respondent No.4 i.e. Devilal submitted that said Mr. Devilal
is not a party to the sale agreement and therefore, suit qua him is not maintainable in
view of provisions contained in section 19 of the Specific Relief Act. According to
Mr. Dave, privity of contract between the plaintiff and said Mr. Devilal is necessary
so as to maintain an action for specific performance of sale agreement. In support of
his submission, he has relied upon decision in case of L. Shiv Dayal Kapoor and
others Vs. Union of India, New Delhi and another reported in AIR 1963 Punjab 538
and in case of Church of Christ Charitable Trust and Educational Charitable Society
represented by its Chairman Vs. Ponniamman Educational Trust reported in (2012) 8
SCC 706..

12. Normally, in the contract relating to immovable property, time cannot be essence
of the contract and time stipulated for performance even if expressly read and shown
to be essence requires to be read as not being essence of the contract and subsequently
the contract relating to immovable property does not become terminable by failure to
perform before specified time. In the case on hand, whether time was the essence of
the contract or not and to find out whether the time was essence of the contract, this
Court will have to examine the express terms set out in the agreement. The first
important condition is condition No.3. The said condition No.3 makes it clear that the
time limit of the Banakhat i.e. contract of sale was fixed for four months. Similarly,
condition No.4 makes it clear that the payment of sale price was not dependent on
handing over of the possession or the execution of the sale deed. On combined reading
of condition Nos.3 and 4 stipulates that while time would be the essence of the
contract in regard to the terms relating to the payment of balance price, but the time
was not the essence of contract in regard to the execution of the sale deed or handing
over of the possession. So, there is a clear intention making the time essence of the
contract for the payment of balance price. Condition No.15 stipulates that one Mr.
Devilal cultivates the suit land and further said Mr. Devilal has no right, title and
interest in the suit land and therefore, the owners were only obliged to say to said Mr.
Devilal to vacate the possession of the suit land and the plaintiff will take over the
possession of the suit land from said Mr. Devilal. So, this indicates that it was the
plaintiff, who was required to take possession of the suit land from said Mr. Devilal
and the owners were not under an obligation to get vacated the land from the
possession of said Mr. Devilal. In light of this specified conditions, if we examined
the averments made in plaint para No.7, then it transpires that the plaintiff has alleged
that the owners and said Mr. Devilal had colluded with each other and further stated
that the owners are under obligation to obtain the possession of the suit land from said
Mr. Devilal and only thereafter, the plaintiff was required to pay balance price. Such
averments made in the plaint are against the true spirit of the contract executed
between the plaintiff and the owners and therefore, the plaintiff is not justified in
insisting upon the owners to get the suit land vacated from said Mr. Devilal. On
reading of agreement as it is, nowhere the owners are under obligation to obtain the
possession of the suit land from said Mr. Devilal except owners were obliged to say
said Mr. Devilal to vacate the land. In other words, it is clear that the plaintiff on the
basis of whatever initial examination of the suit land, has unconditionally agreed to
pay the balance amount before handing over of possession takes place as per condition
No.15. Thus, it is categorically made clear in the agreement that time regarding
payment of balance price was not essence of the contract and such payment was not
dependent upon the owners in obtaining possession from said Mr. Devilal. On the
contrary, condition No.15 stipulates that the plaintiff shall have to take possession of
the suit land from one Mr. Devilal. It is relevant here to reproduce the observations
recorded in para 10 and 11 of decision of K.S. Vidyanandam (supra).

10. It has been consistently held by the Courts in India, following certain early English
decisions, that in the case of agreement of sale relating to immovable property, time is
not of the essence of the contract unless specifically provided to that effect. The
period of limitation prescribed by the Limitation Act for filing a suit is three
years.From these two circumstances, it does not follow that any and every suit for
specific performance of the agreement (which does not provide specifically that time
is of the essence of the contract) should be decreed provided it is filed within the
period of limitation notwithstanding the time limits stipulated in the agreement for
doing one or the other thing by one or the other party. That would amount to saying
that the time-limits prescribed by the parties in the agreement have no significance or
value and that they mean nothing.Would it be reasonable to say that because time is
not made the essence of the contract, the time-limit(s) specified in the agreement have
no relevance and can be ignored with impunity ? It would also mean denying the
discretion vested in the Court by both Sections 10 and 20. As held by Constitution
Bench of this Court in Chand Rani v. Kamal Rani. (1993) 1 SCC 519 : (1993 AIR
SCW 1371), "it is clear that in the case of sale of immovable properly there is no
presumption as to time being the essence of the contract. Even if it is not of the
essence of the contract, the Court may infer that it is to be performed in a reasonable
time if the conditions are (evident ?) : (1) from the express terms of the contract; (2)
from the nature of the property; and (3) from the surrounding circumstances, for
example, the object of making the contract". In other words 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. Now in the case of urban properties in India it is well-known that their
prices have been going up sharply over the last few decades - particularly after 1973*.
In this case, the suit property is the house property situated in Madurai, which is one
of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the
six months' period specified therein for completing the sale expired with 15th of June,
1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., more than
two years after the expiry of six months' period. The question is what was the plaintiff
doing in this interval of more than two years? The plaintiff says that he has been
calling upon Defendants 1 to 3 to get the tenant vacated and execute the sale deed and
that the defendants were postponing the same representing that the tenant is not
vacating the building. The defendants have denied this story. According to them, the
plaintiff never moved in the matter and never called upon them to execute the sale
deed. The Trial Court has accepted the defendants' story whereas the High Court has
accepted the plaintiffs story. Let us first consider whose story is more probable and
acceptable. For this purpose, we may first turn to the terms of the agreement. In the
agreement of sale, there is no reference to the existence of any tenant in the building.
What it says is that within the period of' six months. The plaintiff should purchase the
stamp papers and pay, the balance consideration whereupon the defendants will
execute the sale deed and that prior to the registration of the sale deed, the defendants
shall vacate and deliver possession of the suit house to the plaintiff. There is not a
single letter or notice from the plaintiff to the defendants calling upon them to get the
tenant vacated and get the sale deed executed until he issued the suit notice on 11-7-
1981. It is not the plaintiff's case that within six months', he purchased the stamp
papers and offered to pay the balance consideration. Defendants' case is that the tenant
is their own relation, that he is ready to vacate at any point of time and that the very
fact that the plaintiff has in his suit notice offered to purchase the house with the
tenant itself shows that the story put forward by him is false. The tenant has been
examined by the defendant as DW-2. He stated that soon after the agreement, he was
searching for a house but could not secure one. Meanwhile (i.e., on the expiry of six
months from the date of agreement), he stated, the defendants told him that since the
plaintiff has abandoned the agreement, he need not vacate. It is equally an admitted
fact that between December 15, 1978 and July 11,1981, the plaintiff has purchased
two other properties. The defendants' consistent refrain has been the prices of house
properties in Madurai have been rising fast, that within the said interval of 2 1/2 years,
the prices went up by three times and that only because of the said circumstance has
the plaintiff (who had earlier abandoned any idea of going forward with the purchase
of the suit property) turned round and demanded specific performance. Having regard
to the above circumstances and the oral evidence of the parties, we are inclined to
accept the case put forward by Defendants 1 to 3. We reject the story put forward by
the plaintiff that during the said period of 2 1/2 years, he has been repeatedly asking
the defendants to get the tenant vacated and execute the sale deed and that they were
asking for time on the ground that tenant was not vacating.The above binding means
that from 15-12-1978 till 11-7-1981, i.e., for a period of more than 2 1/2 years the
plaintiff was sitting quiet without taking any steps to perform his part of the contract
under the agreement though the agreement specified a period of six months within
which he was expected to purchase stamp papers, tender the balance amount and call
upon the defendants to execute the sale deed and deliver possession of the
property.We are inclined to accept the defendant's, case that the values of the house
property in Madurai town was rising fast and this must have induced the plaintiff to
wake up after 21/2 years and demand specific performance.

11. Sri Sivasubramanium cited the decision of the Madras High Court in S. V.
Sankaraninga Nadar v. P.T.S. Ratnaswamy Nadar. AIR 1952 Mad 389 holding that
mere rise in prices is no ground for denying the specific performance. With great
respect, we are unable to agree if the said decision is understood as saying that the
said factor is not at all to be taken into account while exercising the discretion vested
in the Court by law. We cannot be oblivious to the reality - and the reality is constant
and continuous rise in the values of urban properties - fuelled by larger scale
migration of people from rural areas to urban centres and by inflation. Take this very
case. The plaintiff had priced to pay the balance consideration, purchase the papers
and ask for the execution of sale deed and delivery of' possession within six months.
He did nothing of the sort. The agreement expressly provides that if the plaintiff fails
in performing his part of the contract, the defendants are entitled to forfeit the earnest
money of Rs. 5,000/- and that if the defendants fail to perform their part of the
contract, they are liable to pay double the said amount. Except paying the small
amount of Rs. 5,000/- (as against the total consideration of Rs. 60,000/-) the plaintiff
did nothing until he issued the suit notice 2 1/2 years after the agreement. Indeed, we
are inclined to think that the rigor of the rule evolved by Courts that time is not of the
essence of the contract in the case of immovable properties evolved in times when
prices and values were stable and inflation was unknown - requires to be relaxed, if
not modified, particularly in the case of urban immovable properties. It is high time,
we do so. Learned counsel for the plaintiff says that when the parties entered into the
contract, they knew that prices are rising ; hence, he says, rise in prices cannot be a
ground for denying specific performance. May be, the parties knew of the said
circumstance but they have also specified six months as the period within which the
transaction should be completed. The said time-limit may not amount to making time
the essence of the contract but it must yet have some meaning. Not for nothing could
such time-limit would have been prescribed. Can it be stated as a rule of law or rule of
prudence that where time is not made the essence of the contract, all stipulations of
time provided in the contract have no significance or meaning or that they are as good
as non-existent ? All this only means that while exercising its discretion, the Court
should also 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 altogether on the ground that time has not been made
the essence of the contract (relating to immovable properties).

13. So, in light of the specific terms stipulated in the agreement and observations of
the Hon'ble Supreme Court, it is found that time is the essence of the contract so far as
present agreement is concerned. The plaintiff failed to fulfill the obligation with
regard to payment of balance price as provided in condition Nos.3 and 4. There is no
substance in the submission made by learned advocate Ms. Mehta to the effect that as
the owners failed to obtain possession of the suit land from one Mr. Devilal, the
plaintiff is not obliged to pay balance price though it was readily available with the
plaintiff. In the instant case, from the date of agreement to till the date of suit, the
plaintiff sat quiet without taking any steps to perform his part of the contract under the
agreement though the agreement specified period of four months within which the
plaintiff was expected to purchase stamp paper, tender balance amount and call upon
the owners to execute the sale deed. So, delay has brought the situation, where it
would be inequitable to give relief of injunction to the plaintiff.

14. It is also required to be noted that as per the submission of learned advocate Ms.
Mehta that the plaintiff has balance price and also he was capable and ready to deposit
with the Court, if Court so orders. Needless to say that the readiness and willingness is
condition precedent to grant relief both at the final stage or even at the interlocutory
stage in order to succeed in the suit for specific performance. The plaintiff needs to
show that he has sufficient funds for payment in the event if he is called upon to pay
consideration of the suit agreement. The learned trial Judge has rightly found that the
plaintiff failed to meet with the requirement of section 16(c) of the Specific Relief
Act. So considering the true nature of transaction and the intention of the parties as
well as circumstances attended thereto and also express wording/expression used in
the suit agreement, it is quite clear that the owners were not obliged to evict Mr.
Devilal as insisted by the plaintiff in plaint para No.7 and therefore, such insistence on
the part of the plaintiff is not in consonance with the terms and conditions agreed by
and between the plaintiff and the owners. So, considering the intention of the parties
gathered from various conditions of the suit agreement reproduced herein above, it is
clear that time was essence of the contract and further, the plaintiff failed to establish
before the trial Court that he was ready and willing to perform his part of the suit
agreement. Thus, the plaintiff failed to satisfy the trial Court in regard to the existence
of ingredients of the interlocutory order of injunction, namely prima facie balance of
convenience and irreparable loss. So, in view of the peculiar facts and circumstances
of the case, the plaintiff was not required to prove that he is ready and willing to
deposit balance price with the Court so as to compliance of section 16(c) of the
Specific Relief Act, but the plaintiff was required to part with the money without
insisting the owners to get the possession of the suit land from Mr. Devilal vacated.
Therefore, principle laid down in case of Rajya Tulsi (supra) is not helpful to the
plaintiff.

15. Admittedly, said Mr. Devilal is neither executant nor signatory to the sale
agreement executed between the plaintiff and the owners and thus, for want of privity
of contract, the plaintiff cannot claim any relief pending hearing of the suit for specific
performance of sale agreement against said Mr. Devilal. So considering the
principles laid down in the case cited by learned Senior Counsel Mr. Dhaval Dave
i.e. L. Shiv Dayal Kapoor (supra) and Church of Christ Charitable Trust (supra), the
learned trial Judge has rightly refused to grant any interim relief qua said Mr. Devilal.
Therefore, no case is made out to interfere with the findings recorded with regard to
want of privity of contract between the plaintiff and said Mr. Devilal.

16. Lastly, learned advocate Ms. Mehta relied on decision in case

of Vidhyadhar (supra) so as to submit that according to section 54 of the Transfer of
Property Act, sale could become complete when payment of whole price at the time of
execution of sale is made. According to her, the price constitutes an essential
ingredient of the transaction of the sale and thus, the real test is the intention of the
performance to be gathered from the various terms and conditions stipulated in the
sale agreement. There is no disagreement on the proposition of law laid down by the
Hon'ble Apex Court and the said decision cited by learned advocate Ms. Mehta is not
helpful to her for the simple reason, because while exercising discretion of the Court
in the matter of injunction application, the Court is required to bear in mind that
parties prescribed certain time limit for taking step by one or the other party, it must
have some significance and such time limit cannot be ignored altogether on the
ground that the payment of the balance price can only be made at the time of
execution of the sale deed. If the plaintiff has offered balance price to the owners
without insisting upon the owners to hand over the possession and in that eventuality,
if the owners refuse to execute sale deed, then the plaintiff is justified to say that sale
would become complete only on payment of whole price at the time of execution of
sale deed. On the contrary, it appears that the plaintiff wants to deviate from the
performance of the material terms of making balance payment on the ground that the
balance price can be made at the time of execution of the sale deed and therefore,
contention raised in light of decision of Vidhyadhar (supra) is not applicable to the
facts of the present case in light of the conduct of the plaintiff.

17. The present appeal is filed under the provisions of Order 43 Rule 1(r) of the Code
and challenge in this appeal is the discretionary order passed by the trial Court under
the provisions of Order 39 Rule 1 and 2 of the Code whereby, the learned trial Judge
dismissed the application Exh.5 for interim relief. If this Court elaborately deal with
the matter on its own merits, it is likely that same would prejudice the case of either
side. Therefore, it is also well settled law that the Court is not required to go into the
merits of the entire matter at this stage and what is required to be seen is whether the
appellant-original plaintiff has made out a prima facie case or not for grant of interim
injunction. It is well settled law that the Appellate Court may not interfere with the
exercise of discretion of the Court at first instance and substitute its own discretion
except when the discretion has been shown to have been exercised arbitrarily,
capriciously or perversely or when the Court has ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions. So, the Appellate Court cannot
reassess the material and reach a conclusion different from the one reached by the
Court. Keeping in mind the limited scope of present appeal, this Court is required to
see whether discretion exercised by the learned trial Judge is perverse, arbitrary,
capricious or against any settled principles of law or not? No such finding is shown so
as to interfere with in the appeal. No other contentions are raised by the learned
advocate appearing on behalf of the appellant.

18. While parting with the order, it is clarified that this Court has examined the
impugned order passed by the learned trial Judge within the limited scope of
provisions of Order 43 Rule 1(r) of the Code, whereas the main controversy involved
in the suit is at large before the trial Court to be adjudicated through full-fledge trial.
Therefore, the learned trial Judge shall not be influenced by any observations recorded
in the impugned order and observations recorded by this Court herein above while
deciding the suit at the end of trial. The findings recorded either by the trial Court or
by this Court at inter locutory stage of the suit are tentative in its nature and the
learned trial Judge shall decide the case on its merit and as per evidence that may be
led during the course of trial and decide the suit in accordance with law.

19. In the result, the appeal from order stand dismissed.

20. In view of disposal of appeal from order, civil applications do not survive and the
same stands disposed of accordingly.

(S.H.VORA, J.) shekhar Page of 21