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CASE NO.: Appeal (civil)  3465 of 2000

PETITIONER: Mst. Sugani                                                      

RESPONDENT: Rameshwar Das & Anr.                                     

DATE OF JUDGMENT: 25/04/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.

Challenge in this appeal is to the judgment rendered by a  learned Single Judge of the Allahabad High Court allowing a  Second Appeal filed under Section 100 of the Code of Civil  Procedure, 1908 (in short the ’CPC’), by reversing the  judgment and decree passed by the trial court as affirmed by  the Appellate Court.

The factual background, as projected by the appellant in  a nutshell is as follows:

An agreement to sell was executed between the appellant,  herein and Mahadeo defendant No.1 in the suit (since  deceased) in respect of the suit property for a sum of  Rs.7,000/- on 13.12.1975.  Out of the said sum Rs.5,000/-  was paid as earnest money on the date of agreement and the  balance was payable on the date  of the sale .  Registration of  the sale could not be done as admittedly there was a  prohibition on sale of urban property at the relevant point of  time. The agreement to sell was made on 13.12.1975.   Defendant No.1 Mahadeo executed a sale deed in favour of  respondents 1 & 2 (defendant Nos. 2&3 in the suit) for a sum  of Rs.6,000/- allegedly on the basis of and agreement to sell  dated 13.12.1975. On 3.7.1978 a notice was sent by  respondent Nos. 1 & 2 demanding arrears of rent from the  appellant.  On 3.1.1979 appellant filed the suit for specific  performance of the agreement dated 13.12.1975.  It was inter  alia indicated that the defendant No.1 put off the registration  of the sale deed on one pretext or other, on 3.7.1978 she came  to know that Mahadeo had executed a sale deed in favour of  respondent nos. 1 & 2 and, therefore, suit was filed on  3.1.1979. Further the respondent nos. 1 & 2 had full  knowledge of agreement to sale executed by Mahadeo in favour  of the appellant, and in spite of that respondent Nos. 1& 2 got  the sale deed executed.  It was specifically stated in the plaint  that she was throughout ready and willing to get the sale deed  executed.  Written Statement of Mahadeo and the respondents  1 & 2 i.e. defendants 2 & 3 was to the fact that Mahadeo had  not entered into any agreement to sell the suit property on  13.12.1975.  On the other hand, Mahadeo had entered into an  agreement to sell the property dated 18.12.1973 with  respondents 1 & 2 which culminated in the sale deed dated  18.4.1977.  Mahadeo further alleged that the agreement to sell  was a forged document and it did not bear either the signature

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or L.T.I. of Mahadeo and the defendant Nos.2 & 3 i.e.  respondents 1 & 2 herein, had no knowledge of the agreement  to sell purported to have been executed on 13.12.1975.   Respondents 1 & 2 further took the stand that the sale deed  dated 18.4.1977 was executed by Mahadeo and with the full  knowledge of the plaintiff appellant who was the tenant.   Mahadeo never signed in Hindi and used to sign in Mahajani.  

Following issues were framed by the trial court:

1.(A)   Whether defendant No.1 Mahadeo executed an  agreement deed on 13.12.1975 for the sale of the house  detailed at the foot of the plaint for Rs.7,000/- in favour of the  plaintiff? (B)     Whether defendant Mahadeo accepted Rs.5,000/-  as earnest money on that date and thereafter executed an  agreement deed? 2.      Whether the sale deed dated 18.4.1977 regarding  the disputed house executed by Mahadeo in favour of  Rameshwar Das and Jamuna Prasad is null and void? 3.      Whether defendants No. 2& 3 are bonafide purchase  for value and without notice? 4A      Whether the suit is under valued?  B      Whether court fee paid is insufficient? 5.      Whether the suit is barred by the principle of  mutality? 6.      Whether the plaintiff is in possession of the disputed  house as a tenant or in part performance of the said agreement  deed? 7.      To what relief if any is the plaintiff entitled?

Both the trial court and the First appellant court  answered all the questions in favour of the plaintiff.  

In the second appeal following questions were raised by  the present respondents who were the appellants before the  High Court:

1.      Whether there was no evidence to suggest that the  thumb impressions on the agreement relied upon by  the plaintiff was that of Mahadeo? 2.      Whether the suit was barred by time? 3.      Whether the appellants are the bonafide purchasers  for value without notice? 4.      Whether the sale deed was validly executed by  Mahadeo in favour of the appellant? The High Court held that the pleadings in the plaint do  not satisfy the requirement of Section 16 (c) of the Specific  Relief Act, 1963 (in short the ’Act’) read with Form Nos. 47 &  48 of the Appendix A of the First Schedule of the CPC.  It was  held that the defendants 2 & 3 were bonafide purchasers for  value without notice.  The reasons given by the courts below to  hold that the defendant Nos. 2 & 3 had knowledge of the  plaintiff’s agreement were imaginary reasons and they were  not acceptable.  The plaintiff cannot get a decree for specific  performance of the contract as the legal heirs were not  brought on record in place of deceased defendant No.1. The  trial court while dealing with issue No.7 as noted above  recorded as follows:

       "In issue Nos. 1 and 2 the plaintiff has  corroborated her statement that she want to  get the sale deed executed in her favour by all  the defendants.  The defendant No. 1 Mahadeo  had died having no successor and on this

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basis no sale deed can be executed by him.  So  far as the defendants No. 2 and 3 are  concerned, the sale deed executed by Mahadeo  was found null of void.  Hence they also can  not execute sale deed.  In such circumstances  after receiving remaining Rs.2000/- only Court  can order to execute the sale deed."

       The above conclusions of the trial court as affirmed by  the first appellate court have not been considered by the High  Court, and the appeal was accordingly allowed.

       Learned counsel for the appellant submitted that in the  plaint specific averments were made about the readiness and  willingness.  Answering issue No.6 the trial court had noted  that the execution of the alleged agreement dated 18.12.1973  was not proved. The defendant no.1 had categorically admitted  about the ban on registration. In the written statement  Mahadeo, defendant no. 1 also admitted about the ban and  had at paragraph 6 stated about the sale deed dated  19.7.1977.  The first appellate court noted that there was no  dispute that during the concerned period there was  prohibition on registration of sale deed. As there was a  prohibition on registration, the agreement to sale was  executed.  The High Court came to hold that the suit was  barred by time, in answering the question No. 3 formulated by  it.  It is to be noticed that no such issue was framed in the  suit.  In any event, bare perusal of Article 54 of the Limitation  Act, 1963 (in short ’the Limitation Act’) shows that the suit  was within time. There was no issue framed regarding  readiness and willingness in terms of Section 16(c) of the Act.   In any event in the plaint categorical statements were made  and evidence was also specifically led in this regard. The High  Court came to hold that the decree was not executable even if  granted as defendant No.1 had died and no legal  representative was brought on record. The findings of fact  recorded by the trial court as endorsed by the First appellate  court the defendant Nos. 2 & 3 were not bonafide purchasers  were set aside by the High Court in a Second Appeal which is  clearly impermissible.  The trial court and first appellate Court  clearly recorded a finding about collusion which has been set  aside without any material.  

In reply it was stated by learned counsel for the  respondents that the conclusions of the trial court and the  first appellate court were clearly erroneous and, therefore, the  High Court rightly interfered in the matter.

It has to be seen that the High Court had formulated  questions for determination in respect of issues which were  not even decided by the trial court.  No issue as to whether the  suit was barred by time was framed by the trial court.  Even  otherwise in terms of Article 54 the starting point of limitation  is three years from the date when a date is fixed and in the  instance case no date was fixed and on the contrary the  execution of the agreement was denied.  The High Court  proceeded as if the period of limitation started from the alleged  date of agreement dated 3.12.1975. The notice about  execution of Sale deed in favour of defendant Nos. 2 and 3 was  received in July, 1978 and the suit was filed on 3.1.1979.   Article 54 reads as follows:

Description of suit

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Period of Limitation Time from which  period begins to  run For specific  performance  of a  contract Three years  The date fixed for  the performance,  or, if no such date  is fixed, when the  plaintiff has notice  that performance  is refused.

Therefore, the suit was clearly within time.  

Further no issue was framed as regards the alleged non- fulfillment of the requirement of Section 16 (c) of the Act. Strangely  the High Court upset the factual findings recorded by the trial court  and the first appellate Court holding that the requirements of  Section 16(c) of the Act were not fulfilled.

Section 16(c) needs to be quoted along with the  Explanations. The same reads as follows:

"16. Personal bars to relief: (a)     ......... (b)     ......... (c)     who fails to 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, other than terms of the performance  of which has been prevented or waived by  the defendant.

Explanation- For the purpose of clause (c)- (i)     where a contract involves the  payment of money, it is not essential  for the plaintiff to actually tender to  the defendant or to deposit in Court  any money except  when so directed  by the Court;

(ii)    the plaintiff must aver performance  of, or readiness and willingness to  perform, the contract accordingly to  its true construction."    

             In Ardeshir H. Mama v. Flora Sassoon (AIR 1928 PC  208), the Privy Council observed that where the injured party  sued at law for a breach, going to the root of the contract, he  thereby elected to treat the contract as at an end himself and  as discharged from the obligations. No further performance by  him was either contemplated or had to be tendered.  In a suit  for specific performance on the other hand, he treated and was  required by the Court to treat the contract as still subsisting.   He had in that suit to allege, and if the fact was traversed, he  was required to prove a continuous readiness and willingness  from the date of the contract to the time of the hearing, to  perform the contract on his part. Failure to make good that  averment brings with it and leads to the inevitable dismissal of

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the suit. The observations were cited with approval in Prem  Raj v. The D.L.F. Housing and Construction (Private) Ltd. and  Anr. (AIR 1968 SC 1355).

        The requirements to be fulfilled for bringing in  compliance with Section 16(c) of the Act have been delineated  by this Court in several judgments.  Before dealing with the  various judgments it is necessary to set out the factual  position.  The agreement for sale was executed on 15.2.1978  and the period during which the sale was to be completed was  indicated to be six months.  Undisputedly, immediately after  the expiry of the six months period lawyer’s notice was given  calling upon the present appellant to execute the sale deed.  It  is also averred in the plaint that the plaintiff met the  defendant several times and requested him to execute the sale  deed. On finding inaction in his part, the suit was filed in  September, 1978.  This factual position has been highlighted  in the plaint itself.  Learned Single Judge after noticing the  factual position as reflected in the averments in the plaint  came to hold that the plaint contains essential facts which  lead to inference to plaintiff’s readiness and willingness.  Para  3 of the plaint indicates that the plaintiff was always ready to  get the sale deed prepared after paying necessary  consideration.  In para 4 of the plaint reference has been made  to the lawyer’s notice calling upon the defendant to execute  the sale deed. In the said paragraph it has also been described  as to how after the lawyer’s notice was issued plaintiff met the  defendant. In para 5 it is averred that defendant is bound to  execute the sale deed on receiving the balance amount and the  plaintiff was entitled to get the document executed by the  defendant.  It is also not in dispute that the balance amount of  the agreed consideration was deposited in Court  simultaneously to the filing of the suit.  While examining the  requirement of Section 16(c) this Court in Syed Dastagir v.  T.R. Gopalakrishna Settty (1999 (6) SCC 337) noted as follows:  

"So the whole gamut of the issue raised is, how  to construe a plea specially with reference to  Section 16(c) and what are the obligations  which the plaintiff has to comply with in  reference to his plea and whether the plea of  the plaintiff could not be construed to conform  to the requirement of the aforesaid section, or  does this section require specific words to be  pleaded that he has performed or has always  been ready and is willing to perform his part of  the contract. In construing a plea in any  pleading, courts must keep in mind that a plea  is not an expression of art and science but an  expression through words to place fact and law  of one’s case for a relief. Such an expression  may be pointed, precise, sometimes vague but  still it could be gathered what he wants to  convey through only by reading the whole  pleading, depending on the person drafting a  plea. In India most of the pleas are drafted by  counsel hence the aforesaid difference of pleas  which inevitably differ from one to the other.  Thus, to gather true spirit behind a plea it  should be read as a whole. This does not  distract one from performing his obligations as  required under a statute. But to test whether  he has performed his obligations, one has to  see the pith and substance of a plea. Where a  statute requires any fact to be pleaded then

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that has to be pleaded may be in any form. The  same plea may be stated by different persons  through different words; then how could it be  constricted to be only in any particular  nomenclature or word. Unless a statute  specifically requires a plea to be in any  particular form, it can be in any form. No  specific phraseology or language is required to  take such a plea. The language in Section 16(c)  does not require any specific phraseology but  only that the plaintiff must aver that he has  performed or has always been and is willing to  perform his part of the contract. So the  compliance of "readiness and willingness" has  to be in spirit and substance and not in letter  and form. So to insist for a mechanical  production of the exact words of a statute is to  insist for the form rather than the essence. So  the absence of form cannot dissolve an essence  if already pleaded."    

       Again in Motilal Jain v. Ramdasi Devi (Smt.) and Ors.  (2000 (6) SCC 420) it was noted as follows:         The other contention which found favour  with the High Court, is that plaint averments  do not show that the plaintiff was ready and  willing to perform his part of the contract and  at any rate there is no evidence on record to  prove it. Mr. Choudhary developed that  contention placing reliance on the decision in  Varghese case ((1969) 2 SCC 539). In that  case, the plaintiff pleaded an oral contract for  sale of the suit property. The defendant denied  the alleged oral agreement and pleaded a  different agreement in regard to which the  plaintiff neither amended his plaint nor filed  subsequent pleading and it was in that context  that this Court pointed out that the pleading  in specific performance should conform to  Forms 47 and 48 of the First Schedule of the  Code of Civil Procedure. That view was  followed in Abdul Khader case ((1989) 4 SCC  313).  However, a different note was struck by this  Court in Chandiok case ((1970) 3 SCC 140). In  that case ’A’ agreed to purchase from ’R’ a  leasehold plot. ’R’ was not having lease of the  land in his favour from the Government nor  was he in possession of the same. ’R’, however,  received earnest money pursuant to the  agreement for sale which provided that the  balance of consideration would be paid within  a month at the time of the execution of the  registered sale deed. Under the agreement ’R’  was under obligation to obtain permission and  sanction from the Government before the  transfer of leasehold plot. ’R’ did not take any  steps to apply for the sanction from the  Government. ’A’ filed the suit for specific  performance of the contract for sale. One of the  contentions of ’R’ was that ’A’ was not ready  and willing to perform his part of the contract.  This Court observed that readiness and  willingness could not be treated as a  straitjacket formula and that had to be

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determined from the entirety of facts and  circumstances relevant to the intention and  conduct of the party concerned. It was held  that in the absence of any material to show  that ’A’ at any stage was not ready and willing  to perform his part of the contract or that he  did not have the necessary funds for payment  when the sale deed would be executed after the  sanction was obtained, ’A’ was entitled to a  decree for specific performance of contract.  That decision was relied upon by a three- Judge Bench of this Court in Syed Dastagir  case ((1999) 6 SCC 337) wherein it was held  that in construing a plea in any pleading,  courts must keep in mind that a plea is not an  expression of art and science but an  expression through words to place fact and law  of one’s case for a relief. It is pointed out that  in India most of the pleas are drafted by  counsel and hence they inevitably differ from  one to the other; thus, to gather the true spirit  behind a plea it should be read as a whole and  to test whether the plaintiff has performed his  obligations, one has to see the pith and  substance of the plea. It was observed: "Unless a statute specifically  requires a plea to be in any  particular form, it can be in any  form. No specific phraseology or  language is required to take such a  plea. The language in Section 16(c)  of the Specific Relief Act, 1963 does  not require any specific phraseology  but only that the plaintiff must aver  that he has performed or has always  been and is willing to perform his  part of the contract. So the  compliance of ’readiness and  willingness’ has to be in spirit and  substance and not in letter and  form."  It is thus clear that an averment of readiness  and willingness in the plaint is not a  mathematical formula which should only be in  specific words. If the averments in the plaint  as a whole do clearly indicate the readiness  and willingness of the plaintiff to fulfil his part  of the obligations under the contract which is  the subject-matter of the suit, the fact that  they are differently worded will not militate  against the readiness and willingness of the  plaintiff in a suit for specific performance of  contract for sale."

       Lord Campbell in Cork v. Ambergate etc. and Railway Co.  (1851) 117 ER 1229 observed that in common sense the  meaning of such an averment of readiness and willingness  must be that the non-completion of the contract was not the  fault of the plaintiffs, and that they were disposed and able to  complete it had it not been renounced by the defendant.

       The basic principle behind Section 16(c) read with  Explanation (ii) is that any person seeking benefit of the  specific performance of contract must manifest that his  conduct has been blemishless throughout entitling him to the

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specific relief. The provision imposes a personal bar.  The  Court is to grant relief on the basis of the conduct of the  person seeking relief.  If the pleadings manifest that the  conduct of the plaintiff entitles him to get the relief on perusal  of the plaint he should not be denied the relief.

       Section 16(c) of the Act mandates the plaintiff to aver in  the plaint and establish as the fact by evidence aliunde that he  has always been ready and willing to perform his part of the  contract.  On considering almost identical fact situation it was  held by this Court in Surya Narain Upadhyaya v. Ram Roop  Pandey and Ors. (AIR 1994 SC 105) that the plaintiff had  substantiated his plea.                                                                                  These aspects were highlighted in Aniglase Yohannan  v.  Ramlatha and others  (2005 (7) SCC 534).                                 

The trial court and the first appellate court recorded  categorical findings that there was prohibition on the  registration of the sale deed at the relevant point of time and,  therefore, only agreement of sale was executed.  Interestingly  the High Court found that the decree passed was not  executable as the defendant No. 1 had died and the legal heirs  were not brought on record. There was no issue framed in that  regard and even no question of law was formulated in the  second appeal.  The trial court and the first appellate court  recorded findings of fact that there was collusion between  defendant No.1 and defendant Nos. 2 & 3.  That being so  factual findings were recorded that the defendant Nos. 2 & 3  had knowledge about the agreement with the plaintiff.

 The first appellate court in great detail examined the  question as to whether the defendants 2 & 3 had knowledge.   It was noted that a plea that there was part payment by  defendants 2 & 3 were clearly contrary to the evidence of  defendant No.1.   Scope of interference with factual findings is  rather limited.  Unless the factual finding is perverse, contrary  to material on record, there is practically no scope for  interference.  Despite amendment by the amending Act 104 of 1976,  Section 100 CPC appears to have been liberally construed and  generously applied by some Judges of various High Courts  with the result that the drastic changes made in the law and  the object behind that appears to have been frustrated. The  amending Act was introduced on the basis of various Law  Commission Reports recommending for making appropriate  provisions in the CPC which were intended to minimise the  litigation, to give the litigant fair trial in accordance with the  accepted principles of natural justice, to expedite the disposal  of civil suits and proceedings so that justice is not delayed, to  avoid complicated procedure, to ensure fair deal to the poor  sections of the community and restrict the second appeals  only on such questions which are certified by the courts to be  substantial questions of law.   After the amendment a second appeal can be filed only if  a substantial question of law is involved in the case. The  memorandum of appeal must precisely state the substantial  question of law involved and the High Court is obliged to  satisfy itself regarding the existence of such a question. If  satisfied, the High Court has to formulate the substantial  question of law involved in the case. The appeal is required to  be heard on the question so formulated. However, the  respondent at the time of the hearing of the appeal has a right  to argue that the case in the court did not involve any  substantial question of law. The proviso to the section

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acknowledges the powers of the High Court to hear the appeal  on a substantial point of law, though not formulated by it with  the object of ensuring that no injustice in done to the litigant  where such a question was not formulated at the time of  admission either by mistake or by inadvertence.   It has been noticed time and again that without insisting  for the statement of such a substantial question of law in the  memorandum of appeal and formulating the same at the time  of admission, the High Courts have been issuing notices and  generally deciding the second appeals without adhering to the  procedure prescribed under Section 100 CPC. It has further  been found in a number of cases that no efforts are made to  distinguish between a question of law and a substantial  question of law. In exercise of the powers under this section  the findings of fact of the first appellate court are found to  have been disturbed. It has to be kept in mind that the right of  appeal is neither a natural nor an inherent right attached to  the litigation. Being a substantive statutory right, it has to be  regulated in accordance with law in force at the relevant time.  The conditions mentioned in the section must be strictly  fulfilled before a second appeal can be maintained and no  court has the power to add to or enlarge those grounds. The  second appeal cannot be decided on merely equitable grounds.  The concurrent findings of facts howsoever erroneous cannot  be disturbed by the High Court in exercise of the powers under  this section. The substantial question of law has to be  distinguished from a substantial question of fact. This Court  in Sir Chunilal v. Mehta and Sons Ltd. v. Century Spg. & Mfg.  Co. Ltd.  (1962 Supp (3) SCR 549) held that :  "The proper test for determining whether a  question of law raised in the case in  substantial would, in our opinion, be whether  it is of general public importance or whether it  directly and substantially affects the rights of  the parties and if so whether it is either an  open question in the sense that it is not finally  settled by this Court or by the Privy Council or  by the Federal Court or is not free from  difficulty or calls for discussion of alternative  views. If the question is settled by the highest  court or the general principles to be applied in  determining the question are well settled and  there is a mere question of applying those  principles or that the plea raised is palpably  absurd the question would not be a  substantial question of law."  

It is not within the domain of the High Court to  investigate the grounds on which the findings were arrived at,  by the last court of fact. It is true that the lower appellate  court should not ordinarily reject witness accepted by the trial  court in respect of credibility but even where it has rejected  the witnesses accepted by the trial court, the same is no  ground for interference in second appeal, when it is found that  the appellate court has given satisfactory reasons for doing so.  In a case where from a given set of circumstances two  inferences are possible. One drawn by the lower appellate  court is binding on the High Court in second appeal. Adopting  any other approach is not permissible. The High Court cannot  substitute its opinion for the opinion of the first appellate  court unless it is found that the conclusions drawn by the  lower appellate court were erroneous being contrary to the  mandatory provisions of law applicable or its settled position  on the basis of pronouncements made by the Apex Court, or  was based upon inadmissible evidence or arrived at without

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evidence.   If the question of law termed as a substantial question  stands already decided by a larger Bench of the High Court  concerned or by the Privy Council or by the Federal Court or  by the Supreme Court, its merely wrong application on the  facts of the case would not be termed to be a substantial  question of law. Where a point of law has not been pleaded or  is found to be arising between the parties in the absence of  any factual format, a litigant should not be allowed to raise  that question as a substantial question of law in second  appeal. The mere appreciation of the facts, the documentary  evidence or the meaning of entries and the contents of the  document cannot be held to be raising a substantial question  of law. But where it is found that the first appellate court has  assumed jurisdiction which did not vest in it, the same can be  adjudicated in the second appeal, treating it as a substantial  question of law. Where the first appellate court is shown to  have exercised its discretion in a judicial manner, it cannot be  termed to be an error either of law or of procedure requiring  interference in second appeal. This Court in Reserve Bank of  India v. Ramkrishna Govind Morey (1976 1 SCC 803)  held  that whether the trial court should not have exercised its  jurisdiction differently is not a question of law justifying  interference.  The above position was noted in Kondiba Dagadu Kadam  v. Savitribai Sopan Gujar & Ors  (1999 (3) SCC 722). Looked at from any angle the impugned order of the High  Court is indefensible and is set aside.  The appeal is allowed.   The judgment and the decree of the trial court as affirmed by  the first appellate court stand restored.  No Costs.