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PETITIONER: SURJIT KAUR

       Vs.

RESPONDENT: NAURATA SINGH & ANR.

DATE OF JUDGMENT:       13/09/2000

BENCH: V. N. Khare J. & S. N. Variava j.

JUDGMENT:

S. N. VARIAVA, J. L....T.......T.......T.......T.......T.......T.......T.......J

This Appeal is against a Judgment dated 15th December, 1992 by which  the  Second Appeal filed by the Appellant (herein)  has been  dismissed.  Briefly stated the facts are as follows:  On 10th  September, 1980 the Appellant entered into an  Agreement to  Sell,  to Respondent No., 1 her 1/2 share in 212K  13M  of land at the rate of Rs.  30,250/- per killa.  The Agreement to Sell  provided  that the Sale Deed was to be executed by  30th June,  1981.  It also provided that by that date the Appellant was  to  get her name muted into the record of rights and  she was  also to give possession of land to the 1st Respondent.  A sum  of  Rs.20,000/-  was  paid to the Appellant  at  time  of execution  of  the Agreement.  Respondent No.  2 filed a  suit against   the  Appellant  and   the  1st  Respondent  claiming@@                                           JJJJJJJJJJJJJJJJJJJJ ownership  and possession of land.  Respondent No.  2  claimed@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ ownership  to the suit land under an alleged will made in  his favour  by  the  mother  of the Appellant.  In  that  suit  an interim  order was passed preventing alienation of the land by the Appellant.  However, that suit was ultimately dismissed on 7th  October, 1982.  In the meantime the 1st Respondent sent a notice dated 22nd June, 1981 to the Appellant calling upon her to execute the Sale Deed as per the terms of the Agreement and informing  her  to  remain  present  in  the  Office  of   the Sub-Registrar  on 30th June, 1981.  On 30th June, 1981 the 1st Respondent  remained present before the Registrar.  He gave an Application  to  the  Registrar  which,  interalia,  reads  as follows:

"2.   That  agreement  deed  aforesaid was  for  the  sale  of aforesaid  land.   In favour of Naurata Singh son of S.   Sham Singh  resident of village Nasrali, Sub Tehsil Amloh  District Patiala.   That  a  sum of Rs.  20,000/- in cash was  paid  to Surjit  Kaur with the condition that before the execution  and registration  of sale deed before 30.6.1981 the possession  of the  land mentioned in the agreement deed will be delivered to the  applicant (Naurata Singh).  Today is 29th June, 1981, but uptill  now Smt.  Surjit Kaur has not taken action for  giving possession of the land in question.

It  is  therefore,  requested that my presence may  kindly  be marked  in your office, to enable the undersigned to go to the civil  court  to  get  the conditions of  the  agreement  deed

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implemented therein."

The  Appellant also remained present before the Sub-Registrar. She  also  gave an Application stating that she was not  in  a position to deliver possession as a suit has been filed by the 2nd  Respondent.   She stated that she was willing to  execute the  Sale  Deed and have the same registered but that the  1st Respondent was not willing to get the same executed.

On  the Application of the 1st Respondent the Registrar passed the following Order:

"  The applicant has presented this application.  Surjit  Kaur d/o Kalu was called.  Surjit Kaur stated that she was ready to execute  the  sale  deed but Norata Singh stated that  as  per written agreement there is a condition precedent and therefore he  was  ready  to  get sale deed executed  after  deliver  of possession of land.

In  these  circumstances  no  action  can  be  taken  on  this application.   Applicant  is  directed to seek his  remedy  in Civil Court.  Application is filed 30.6.81."

On  the Application of the Appellant the Registrar passed  the following Order:

"Today application was presented by Surjit Kaur.  Norata Singh is also present.  Norata Singh stated that he was ready to get the  execution of sale deed but possession of the land has  to be  delivered  before  execution as per  terms  of  agreement. Surjit  Kaur stated that she could not deliver possession  but was ready to execute the sale deed.  In these circumstances no action  is  necessary.   Application  is  filed  parties   are directed to go to the Civil Court."

Thus,  it is to be seen that both the parties understood  that 30th  June,  1981  was of the essence of  the  Contract.   The Appellant  was ready and willing to execute the Sale Deed  but the  1st  Respondent  was not willing to have  the  Sale  Deed executed  unless and until all conditions of the Agreement  to Sell,  viz.   transfer of mutation in favour of the  Appellant and  delivery of possession also took place.  In other  words, the  1st Respondent elected not to accept part performance  of the  Agreement to Sell.  It is obvious that the 1st Respondent elected  not to execute Sale Deed as he would have to pay  the consideration  for  the  whole  of the  Contract  without  any abatement and he was not willing to do so.  The 1st Respondent filed  the  present  suit  for  specific  performance  of  the Agreement to Sell.  In the alternative, he also claimed refund of  the  money paid with compensation.  In this suit  the  2nd Respondent  was also made a party Defendant.  The trial  Court framed  various Issues, including an Issue as to readiness and willingness  on  the  part of the 1st Respondent.   The  trial Court also framed an Issue as to whether the Agreement to Sell dated  10th  September, 1980 could be specifically  performed. The  trial  Court held that the 1st Respondent was  ready  and willing to perform the Agreement as per its terms, but that as delivery  of possession could not take place there could be no specific  performance of the Agreement.  Thus the trial  Court decreed  the  suit  by  directing refund  of  Rs.20,000/-  and payment  of  Rs.8800/- as compensation.  At this stage  to  be noted  that the refund of money and compensation was  directed as  even  at this stage 1st Respondent was insisting  on  full compliance  with  the terms of the Agreement, including  being put  in  possession.  This in spite of the fact that  the  1st

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Respondent  knew that all the terms of the Agreement were  not capable  of  being  implemented  as Appellant  was  not  in  a position to deliver possession.  The 1st Respondent then filed Civil  Appeal No.  242/79 of 1985.  At the time of hearing  of this  Appeal  counsel for the 1st Respondent made a  statement that  the  1st Respondent was now ready and willing to  accept the  offer of the Appellant and would not object to Sale  Deed being  executed  and  registered, even if possession  was  not given  by the Appellant.  The first Appellate Court held  that before  the  Registrar the Appellant had stated that  she  was willing  to get the Sale Deed executed and registered  without delivery  of  possession.   It  was   held  that  as  the  1st Respondent  was ready and willing to accept this offer and the clause regarding delivery of possession was for the benefit of the  1st Respondent he could always waive it.  On this  basis, the first Appellate Court allowed the Appeal and set aside the Judgment  of the trial Court and decreed the suit for specific performance.  The first Appellate Court made it clear that the Sale  Deed  would be executed without delivery of  possession. The  Appellant then filed Second Appeal No.  2500 of 1992.  By the  impugned  Judgment dated 15th December, 1992, the  Second Appeal  has  been  dismissed  in limine.   We  have  seen  the impugned  Judgment.   No  reasons  are  given.   The  impugned Judgment  merely  sets  out the Order of the  first  Appellate Court.  However, there appears to be some mistake in the final copy.   The final copy provides that the remaining sum was  to be  paid  only after getting possession.  Parties  are  agreed that this is a mistake and that it has been agreed even before the  High  Court that the Sale Deed would be executed  without delivery  of  possession.  The question which arises, in  this case, is whether the 1st Respondent is entitled to the benefit of  Section  12(3) of the Specific Relief Act.  Section 12  of the Specific Relief Act reads as follows:

"12.  Specific performance of part of contract.- (1) Except as otherwise hereinafter provided in this section the court shall not direct the specific performance of a part of a contract.

(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed by only a small proportion to the whole in value and admits of compensation  in  money, the court may, at the suit of  either party,  direct  the  specific performance of so  much  of  the contract  as can be performed, and award compensation in money for the deficiency.

(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either -

(a)  forms a considerable part of the whole, though  admitting of compensation in money;  or

(b)  does  not  admit  of compensation in money;   he  is  not entitled to obtain a decree for specific performance;  but the court  may,  at the suit of other party, direct the  party  in default  to  perform specifically so much of his part  of  the contract as he can perform, if the other party-

(i)  in a case falling under clause (a), pays or has paid  the agreed  consideration for the whole of the contract reduced by the  consideration for the part which must be left unperformed and in a case falling under clause (b), [pays or had paid] the consideration  for  the  whole  of the  contract  without  any abatement;   and (ii) in either case, relinquishes all  claims

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to  the performance of the remaining part of the contract  and all  right  to compensation, either for the deficiency or  for the loss or damage sustained by him through the default of the defendant.

(4)  When a part of a contract which, taken by itself, can and ought  to be specifically performed, stands on a separate  and independent  footing  from another part of the  same  contract which  cannot  or ought not to be specifically performed,  the court may direct specific performance of the former part."

Thus  if  a party to the Contract is not able to  perform  the whole  of it and the part which must be left unperformed  does not  admit of compensation in money (in this case Appellant is not   in   a  position  to   deliver   possession   and   such non-performance  is not capable of compensation in money) then the other party (1st Respondent) could get Court to direct, in a  Suit  filed by him, that party to perform provided he:-  a) pays  or  has  paid  the consideration of  the  whole  of  the Contract  without any abatement and b) relinquishes all claims to  performance of the remaining part of the Contract and  all rights  to  compensation,  either for deficiency  or  loss  or damage.   Relying on Section 12(3) of the Specific Relief Act, Mr.   Gupta  submitted that a party can elect to  accept  part@@              JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ performance at any stage of the litigation.  He submitted that@@ JJJJJJJJJJJJJJJJJJ mere  filing  of  a  Suit  for  specific  performance  of  the Agreement  and  not  averring that the party  was  willing  to accept  performance  in  part does not preclude a  party  from subsequently  electing  to  accept performance  in  part.   He submitted  that such election can be made even at the stage of Appeal.   In support of his contention he had relied upon  the cases of Kalyanpur Lime Works Ltd.  vs.  State of Bihar & Anr. reported  in  (1954) S.C.R.  958, Dr.  Jiwan Lal &  Ors.   vs. Brij Mohan Mehra & Anr.  reported in (1972) 2 S.C.C.  757, Ram Niwas vs.  Smt.  Omkari & Anr.  reported in AIR 1983 Allahabad 310,  Smt.  T.K.  Santha & Ors.  vs.  Smt.  A.G.  Rathnam  and Ors.   reported  in  AIR  1990 Kerala  69,  Ramani  Ammal  vs. Susilammal  reported in AIR 1991 Madras 163, and Smt.  Purnima Rani  Dutta vs.  Smt.  Lakshmi Bala Dasi reported in AIR  1988 Calcutta  148.   There  can  be  no  dispute  with  the  broad proposition  of  law.   All  these  cases  support  the  broad@@                              JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ proposition.  Thus the facts of each case need not be set out.@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ It  must  be mentioned that in many of these cases the  option had  been  exercised at the Appellate stage.  An  exercise  of option  at  the Appellate stage has been upheld on the  ground that  a  party could elect to accept part performance  at  any stage  of the litigation.  However, it is to be noted that  in all  these  cases  the  party exercising the  option  had  not earlier  elected  not  to accept part performance.   Mr.   Rao could  not show to Court even a single case where a party  had elected  not to accept part performance;  had insisted on full performance and finding that the Courts were against him, then elected  to accept part performance.  Normally time is not  of the  essence of the Contract unless parties make it so.   From the  facts set out hereinabove, it is to be seen that both the parties  understood  that  the date for performance  was  30th June, 1981.  The 1st Respondent sent a notice dated 22nd June, 1981  calling upon the Appellant to remain present before  the Sub-  Registrar on 30th June, 1981.  Both the parties remained present  before  the  Sub-Registrar on 30th June,  1981.   The Appellant  clarified that she could not deliver possession but

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that  she  was  willing  to  execute  Sale  Deed  and  get  it registered.   The  Appellant  could   not  deliver  possession because  the  2nd Respondent had filed a suit and obtained  an injunction  in  that  suit.   To be remembered  that  the  1st Respondent  was also a party to that suit.  This was the  time when  the  1st Respondent had to elect either to  accept  part performance and/or to complete the sale by executing Sale Deed and  making  payment  of money.  By refusing  to  accept  part performance  the 1st Respondent has elected not to accept part performance.   To be seen that delivery of possession formed a considerable   part  of  the  whole   and  did  not  admit  of compensation  in  money.   The 1st Respondent had to  pay  the consideration  of the whole without any abatement.  He had  to pay this consideration on 30th June, 1981.  He appeared before the  Sub- Registrar.  He refused to execute the Sale Deed  and pay the consideration.  He refused to relinquish all claims to the  performance  of the remaining part of the  contract.   By refusing  to have Sale Deed executed he was in effect refusing to  pay  the  balance consideration.  Once he did that  he  no longer  became entitled to claim part performance.  This  fact was lost sight off by the first Appellate Court as well as the High  Court.  The first Appellate Court failed to notice  that in  this  case provisions of sub-clause (3) of Section 12  had not  been met inasmuch as the 1st Respondent had not paid  the consideration  for the whole of the contract without abatement and  he  had  elected  not to relinquish  all  claims  to  the performance  of  the  remaining part of the contract.   It  is settled  law  that in cases of part performance  of  contracts once  an  election is made then that party cannot at  a  later date  resile or get out of the election.  Once 1st  Respondent elected  not to accept part performance it was no longer  open to  him,  on  finding  that  he could  not  get  the  specific performance of the whole, to claim part performance at a later date.   If this was to be permitted then all vendees would not pay   the  consideration  amount  on   the  dates  fixed   for performance.   Whilst such dates may not be of the essence  of the Contract, they still have some meaning.  If this was to be permitted  then  vendees  would  withhold  payments  by  first refusing  to  accept part performance and then after years  of litigation  agree to accept part performance at the  Appellate stage.   If this was to be permitted then the sellers would be kept  out of their money for long periods of time by  vendees. In  our  view, both the first Appellate Court as well  as  the High  court have committed a serious error in law by  ignoring the  fact that the conditions of Section 12(3) were not met in this  case inasmuch as 1st Respondent had already elected  not to  accept  part performance.  Both these Courts  ignored  the fact that the 1st Respondent had elected not to relinquish all claims  to  performance of the remaining part of the  Contract and  had not paid the consideration.  Both the Courts erred in law and on facts in allowing the 1st Respondent to resile from his earlier election.  It must be clarified that this Court is not  saying that merely because in correspondance or orally  a party  has  insisted on performance of the whole  contract  he cannot thereafter elect to accept performance in part.  A mere assertion  that  contract must be performed in full or even  a filing  of  a  suit  for specific  performance  of  the  whole contract  without  averring that the Plaintiff is  willing  to accept  performance in part may not amount to electing not  to accept performance in part.  It is only in cases where a party has  categorically refused to accept performance in part  i.e. he  has  unambiguously elected not to accept part  performance that he will be precluded from subsequently turning around and electing  to accept performance in part.  Whether a party  has categorically  elected  or  not will depend on facts  of  each

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case.  It is also settled law that specific performance cannot be  granted  to a party who has not been ready and willing  at all  stages  to  perform  the contract.  Of  course,  the  1st Respondent  was  ready and willing to perform the contract  in its  entirety.   To that extent there would be  readiness  and willingness  on the part of the 1st Respondent.  But in  cases where  a  contract is not capable of being performed in  whole then  the  readiness  and willingness, at all stages,  is  the readiness  and  willingness to accept part performance.  If  a contract  is  not  capable of being performed in whole  and  a party  clearly indicates that he is not willing to accept part performance,  then  there is no readiness and willingness,  at all  stages,  to accept part performance.  In that case  there can  be no specific performance of a part of the contract at a later  stage.   None of the authorities cited by Mr.  Rao  lay down anything contrary.  In all those cases the party had been insisting on part performance and/or the time for election had not arrived.  In none of those cases an election not to accept part   performance  had  been  made.    It  is   under   those circumstances  that the Courts held that the party could elect to accept part performance at any stage of the litigation.  In those  cases it could not be said that there was no  readiness and  willingness  to accept part performance.  For  the  above reasons, we are of the view that the Order dated 19th October,@@                                                  JJJJJJJJJJJJJ 1992  passed by the first Appellate Court and the Order of the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ High  Court dated 15th December, 1992 cannot be sustained  and requires to be and are hereby set aside.  The decree passed by the  Trial  Court  on 27th February, 1985 is correct  on  this aspect  and the same is restored qua refusal to grant specific performance.   The trial Court has also directed refund of Rs. 20000/  -  (being  the  amount   admittedly  received  by  the Appellant)  with interest thereon at 12% p.a.  from 30th  June 1981  till decree.  The trial Court has also awarded a sum  of Rs.  8800 as damages.  The trial Court has directed payment of interest  at 6% p.a.  on Rs.  28800/- from date of decree till payment.   It  is  to be seen that the suit was  for  specific performance  or in the alternative for a sum of Rs.  40000/-as compensation.  The sum of Rs.  40000/- was claimed as the suit Agreement inter-alia provided as follows:  Due to any reason, if  I  dont get sale deed executed then purchaser can get  it done  through court of law or he can claim double the  advance amount paid to me.

No  reasons have been given by the trial Court as to why  this term  of the suit Agreement should not be given effect to.  No reasons  have  been given as to why compensation of  only  Rs. 8800/-  was awarded when what was to be returned, if Appellant could  not  get  Sale Deed executed, was  double  the  amount. Trial  Court  has held that the 1st Respondent was  ready  and willing  to  perform the whole of the Agreement.  Trial  Court has  noted that the Appellant could not perform the  Agreement in  its  entirety  in  as  much   as  she  could  not  deliver possession.   As  1st  Respondent had elected  not  to  accept performance  in  part the trial Court held that the  Agreement could  not be specifically enforced.  However in such an event trial  Court  should have directed payment of Rs.  40000/-  as provided  in  the Agreement.  We accordingly vary  the  decree granted  by  the trial Court to the extant that the  Appellant shall  repay  Rs.  20000/- with interest thereon at  12%  p.a. from  30th June 1981 till payment and also pay another sum  of Rs.   20000/- with interest thereon at 12% p.a.  from date  of decree   till  payment.   The   Appeal  stands  disposed   off accordingly.  In the circumstances of this case, there will be

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no order as to costs.