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CASE NO.: Appeal (civil)  2583 of 2005

PETITIONER: Umabai & Anr.

RESPONDENT: Nilkanth Dhondiba Chavan (Dead) by Lrs. & Anr.

DATE OF JUDGMENT: 13/04/2005

BENCH: H.K. Sema & S.B. Sinha

JUDGMENT: J U D G M E N T

[Arising out of S.L.P. (Civil) No. 23864 of 2004]

S.B. SINHA, J :

       Leave granted.

       This appeal is directed against a  judgment and order dated  3.9.2004  passed by  the Bombay High Court in Letters Patent Appeal No.102 of 1990  whereby and whereunder the Appeal preferred against a judgment and order  dated 30.1.1990 passed by a learned Single Judge of the said Court in First  Appeal No.120 of 1984 affirming the judgment and decree dated 5.9.1983  passed by the Civil Judge, Sr. Division, Kolhapur in Special Suit No. 1 of  1979; was allowed. The basic fact of the matter is not in dispute.  The suit premises  measure about 346 sq. yds. of  land.  Structures consisting of ground and  first floor were built thereupon.  The Appellant No.2 was a tenant in the  ground floor of the said building.   

A decree at the instance of his creditor was said to have been passed  against the plaintiff-Respondents herein.  The First Respondent  with a view  to repay the said loan entered into an agreement of sale with the Appellants  on or about 30.12.1970.  In terms of the said agreement, the plaintiff- Respondents agreed to sell the said property for a consideration of  Rs.45,000/-, out of which a sum of Rs.3,434/- was paid by way of earnest  money and the rest being sum of Rs. 40,076/- was  to be disbursed to the  creditors.  Pursuant to or in furtherance of the said agreement, the plaintiff- Respondents executed a deed of sale in favour of the First Appellant herein.   An agreement of sale was also entered into by and between the parties on the  same day, in terms whereof the First Appellant agreed to reconvey the said  property in favour of the First Respondent on  receipt  of the said sum of  Rs.45,000/- between a period of seven years and nine years  from the said  date.  The Respondents treating  the said transaction to be one of mortgage  filed an application purported to be under Sections 4(e) and 7(f) before the  competent authority under the Maharashtra Debt Relief Act, inter alia, for a  declaration that he is a ’debtor’ thereunder and his debt should be  discharged.  While the said application was pending, a notice was sent by the  plaintiff-Respondents to the Appellants herein wherein the aforementioned  transaction was said to be a mortgage.  A plea was raised therein that the  said debt stood discharged under the provisions of the Maharashtra Debt  Relief Act.  It was contended that the First Appellant herein had already  received more than Rs.50,000/- out of the income from the said property by  way of  rent.    Despite the same, the Appellants asked for specific  performance of the said  agreement of re-conveyance.  In her reply, the First  Appellant offered to reconvey the property on receipt of a further sum of  Rs.4,646/-, which allegedly was spent by her towards repairs of the house.  

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Thereafter,  the suit was filed by the Respondents herein in the Court of  Civil Judge, Senior Division at Kolhapur on 30.12.1978 which was marked  as Civil Suit No.1 of 1979.  The Respondents in their plaint raised a plea that  the value of the suit property was about Rs.2 lacs but despite the same with a  view to discharge their dues they requested the Appellants to advance a loan  of Rs.50,000/- and to which the Appellants agreed for a sum of Rs.45,000/-;  whereupon the suit property was agreed to be mortgaged.  It was further  contended that as the Appellants did not possess a money lenders’ licence  and the period of repayment was large, the parties agreed that the  Respondents would execute a deed of mortgage by way of conditional sale;  but the said document was termed as a deed of sale wherein a clause of re- conveyance  was to be incorporated.  However,  such condition having  mistakenly been not mentioned in the deed of sale and which having been  noticed, the First Appellant entered into an agreement of re-conveyance of  the suit property in the name of the Respondents on the same day.  Both the  deeds were said to be part of the same transaction and in fact, it was  categorically averred that the "sale deed transaction"  is a "mortgage  transaction". As regard readiness and willingness on the part of the  Respondents, it was averred in the plaint:

       "Accordingly to the conditions in the agreement  Plaintiff was and is ready to pay the amount to defendant.   And also the Plaintiff is and was ready to bear the cost of  reconveyance deed.  According to the agreement Plaintiff  is and was ready to prepare the reconveyance deed\005"

       In the said suit, the plaintiff-Respondents  prayed for the following  reliefs :

"(a)    The defendant no.1 be ordered to prepare the sale  deed of the suit property and get it registered as per  the agreement.  The Plaintiff will pay the amount  when the order is passed.

(b)     The sale deed be prepared in the plaintiff’s name  through the Honourable Court if the defendant  no.1 denies the same.

(c)     According to the  mortgage document at sr. no.7  dated 2.11.1971, the suit property be mortgaged  Relief and be given in the possession of the  Plaintiff.

(d)     The declaration be passed under the provision of  Mumbai Debt Relief Act that the Plaintiff has been  debt released and the possession of the debt  released suit property be given to the plaintiff.

(e)     If not done as mentioned above, then the  accounting of mortgage be done and whatever  amount remains be given to the Plaintiff or else  Plaintiff be ordered to pay the amount to defendant  no.1 and the reconveyance deed for the mortgage  relief be made in the name of the plaintiff by the  defendant on denial it should be done through the  court and possession of suit property be given to  the plaintiff.  

(f)     The Plaintiff be allowed to amend or alter the  plaint, if necessary."

The Appellants, however, in their written statement denied and  disputed the contentions raised in the Plaint.  It was averred that the

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transaction was for a sale with an agreement of reconveyance.  The  Appellants denied and disputed that the  First Respondent  was  ’ready to act  as per the agreement’.  It was contended that he never offered any amount to  the Appellants.  It was further contended :          "\005But plaintiff did not take any steps to reconvey the  sale deed as per the notice of the plaintiff.  But the  plaintiff did nothing.  So the Plaintiff has committed a  breach of agreement and on that count suit may kindly be  dismissed.  On the contrary Plaintiff had taken a stand  that the suit transaction is mortgaged and from rent  received the amount has been satisfied such a wrong and  false stand was taken by the Plaintiff.  Also before the  Tahsildar proceeding was initiated saying that the  property is redeemed (Property is released from the debt)  from the total behaviour of plaintiff it cannot be said that  Plaintiff was ready to fulfill the terms of agreement."

       The Trial Court dismissed the said suit holding  (i) the suit property  was not undervalued; (ii) consideration of Rs.45,000/- mentioned in the  document was not inadequate; (iii) the transaction was one of sale and not of  mortgage; (iv) the suit property was not self-redeemed under the  Maharashtra Debt Relief Act; (v) the plaintiffs were not ready and willing to  perform their part of contract; and (vi) the defendants had spent a sum of  Rs.4,646/- over the repairs of the suit property.

       Before the High Court, the First Respondent herein gave up the plea  that he was a debtor in terms of the Maharashtra Debt Relief Act.  The  learned Single Judge of the High Court while holding that the transaction  was that of sale and not mortgage proceeded also to consider as to whether  the transaction was a mortgage or not.  As regard the plea of purported  readiness and willingness on the part of the Respondents, it was opined :

"\005It will not be open to the plaintiff to put his own  construction on the terms but he would be bound by the  terms as determined by the Court.  It will not be open to  the plaintiff to vary the terms according to his  interpretation and yet claim specific performance.  In the  present case the plaintiffs set up a plea under the  Maharashtra Debt Relief Act.  In other words, the  plaintiffs sought to contend that their debt under the suit  transaction was discharged under the Maharashtra Debt  Relief Act.  They were, therefore, not liable to pay and  yet claim reconveyance.  This is not the conduct of a  party who is expected to perform his part of the terms  and conditions of the contract of repayment of  Rs.45,000/-.  The first plaintiff had applied under the  aforesaid Act to the Mamlatdar for a declaration that he  was a debtor and that the debt had been discharged.  He  had engaged an Advocate in those proceedings.  When  the present suit was filed, the plea about the aforesaid  proceedings was set up in the forefront and a conditional  offer to pay was made subject to the result of those  proceedings.  In the alternative, the plaintiffs set up a  case of a mortgage which case I have found as not proved   both on facts as also in law.  The plaintiffs averred that  the entire mortgage debt had been paid up from out of the  income of the property.  They offered to pay if any  amount was found due on taking accounts.  In my  judgment, the aforesaid rival pleas set up by the plaintiffs  disentitle them to a decree for specific performance.  By  setting up these rival pleas they have exhibited their  unwillingness to make an unconditional offer to pay  which was a pre-requisite condition in the agreement of

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reconveyance where it was provided that, if after the  period of 7 years and within the period of 9 years, the  plaintiff paid the amount of Rs.45,000/- along with  incidental charges of the sale deed, the defendants would  reconvey the property\005"

                The Division Bench of the High Court, however, by reason of the  impugned judgment reversed the said findings holding that although  evidences were led to show that the amount of Rs.45,000/- paid by the  Appellants to the Respondents was a loan but having regard to Section 58(c)  of the Transfer of Property Act, the document could not be construed to be a  deed of mortgage.

       The Division Bench differed from the learned Single Judge and the  learned Trial Judge on their finding as regard valuation of the property  holding that the Respondents had proved that the sale-deed was under- valued, observing :

"\005From the fact that the agreement for reconveyance  provided for the payment of Rs.45,000/- after 7 years and  before nine years by itself would indicate that the  transaction was much more than a mere deed of  conveyance.  No interest was provided for.  It is in these  circumstances that the court must consider whether the  discretion should be exercised in favour of the Plaintiff."

       As regard readiness and willingness on the part of the Respondents to  perform their part of contract in terms of the said agreement of reconveyance  dated 1.1.1971, the Division Bench came to the conclusion that the plaintiff- Respondents had pleaded and proved the said fact.   

       Mr. Ajit S. Bhasme, learned counsel appearing on behalf of the  Appellants, in support of the appeal would urge that the Division Bench of  the High Court clearly erred in holding that the Respondents were ready and  willing to perform their part of contract.  According to  the learned counsel,  the plea taken by the Respondents that the amount of debt stood satisfied  from the income therefrom by way of rent and, thus, the debt stood  discharged was wholly inconsistent with a plea of readiness and willingness.  Totality of circumstances, the learned counsel would contend, vis-‘-vis the  conduct of the parties would be relevant for determining as to whether the  plaintiff-Respondents have been able to satisfy the court as regard  fulfillment of the conditions laid down under Section 16(c) of the Special  Relief Act, 1963.   

       Mr. Bhasme would submit that a manifest error had been committed  by the Division Bench of the High Court in arriving at the finding that the  plaintiff-Respondents pleaded and proved that they had all along been ready  and willing to perform their part of contract; without taking into  consideration that they initiated proceedings before the competent authority  under the Maharashtra Debt Relief Act and raised insufficient plea in that  behalf in the notice dated 9.6.1978 and furthermore made clear averments in  the plaint that they were debtors and their debt stood discharged.

The learned counsel would contend that from a perusal of the plaint, it  would appear that the plaintiffs made a conditional offer which does not  satisfy the requirement of Section 16(c) of the Specific Relief Act.  In  support of the said contention, the learned counsel would relied upon Prem  Raj vs. D.L.F. Housing & Construction Pvt. Ltd. & Another [(1968) 3 SCR  648], Mahabir Prasad Jain vs. Ganga Singh [(1999) 8 SCC 274], Pushparani  S. Sundaram and Others vs. Pauline Manomani James (Deceased) and  Others ([(2002) 9 SCC 582], Manjunath Anandappa Urf Shivappa Hanasi  vs. Tammanasa and Others [(2003) 10 SCC 390] and Pukhraj D. Jain and  Others vs. G. Gopalakrishna [(2004) 7 SCC 251].

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       Mr. Bhasme would submit that the Division Bench had wrongly  interfered with the concurrent findings of fact arrived at by the two courts.  

Mr. A.V. Sawant, the learned Senior Counsel appearing on behalf of  the Respondents, on the other hand, would contend that there is no limitation  as regard exercise of jurisdiction by a Division Bench of the High Court  while entertaining a Letters Patent Appeal as in such an appeal, the Court is  entitled to consider the questions of both fact and law.  Reliance, in this  behalf, has been placed on Smt. Asha Devi vs. Dukhi Sao and Another  [(1974) 2 SCC 492].

       Mr. Sawant would submit that the plea that a transaction is a mortgage  vis-‘-vis an ostensible sale cannot be said to be  fraudulent nor dishonest  which would debar the court from granting an equitable relief for specific  performance of contract.              The learned counsel would argue that the Trial Judge as also the  learned Single Judge of the High Court overlooked the pleadings of   Respondents in the plaint as also the evidence adduced in this behalf as  regard readiness and willingness on their part of contract and, thus, the  Division Bench of the High Court cannot be said to have committed any  error in interfering therewith.  Readiness and willingness to perform one’s  part of contract must be judged,  Mr. Sawant would submit, upon taking into  consideration all the attending circumstances as also the conduct of both the  parties and, therefore, it is not necessary to deposit the amount in court or to  be possessed of the requisite amount at all times.  Strong reliance, in this  behalf, has been placed on The Bank of India Ltd. and Others vs. Jamsetji  A.H. Chinoy and Messrs. Chinoy and Co. [AIR (37) 1950 PC 90], Nathulal  vs. Phoolchand [(1969) 3 SCC 120],  Smt. Indira Kaur and Others vs. Sheo  Lal Kapoor [(1988) 2 SCC 488], Tamboli Ramanlal Motilal (Dead) by Lrs.  vs. Ghanchi Chimanlal Keshavlal (Dead) by Lrs. And Another [(1993) Supp.  (1) SCC 295]; and  Mushir Mohammed Khan (Dead) by Lrs. Vs. Sajeda  Bano (Smt.) and Others [(2000) 3 SCC 536].          It may be true that level of a document is not decisive.  A true nature  of transaction must be determined having regard to the intention of the  parties as well as the circumstances attributing thereto as also the wordings  used in the document  in question.          In this case, admittedly, two documents were executed on the same  day.  In view of the express provisions contained in Section 58(c) of the  Transfer of Property Act, indisputably the transaction in question was not a  mortgage by way of conditional sale.          There exists a distinction between mortgage by conditional  sale and a  sale with a condition of repurchase.  In a mortgage, the debt subsists and a  right to redeem remains with the debtor; but a sale with a condition of  repurchase is not a lending and borrowing arrangement.  There does not  exist any debt and no right to redeem is reserved  thereby.  An agreement to  sell confers merely a personal right which can be enforced strictly according  to the terms of the deed and at the time agreed upon.   Proviso appended to  Section 58(c), however, states that if the  condition for re-transfer is not  embodied in the document which effects or purports to effect a sale,  the  transaction will not be  regarded as a mortgage.  [See Pandit Chunchun Jha  vs. Sheikh Ebadat Ali and Another  (1955) 1 SCR 174,  Shri Bhaskar  Waman Joshi and Others vs. Shri Narayan Rambilas Agarwal (deceased)  and Others (1960) 2 SCR 117],  K. Simrathmull vs. Nanjalingiah Gowder,  AIR 1963 SC 1182; Mushir Mohammed Khan (supra); and Tamboli  Ramanlal Motilal (supra)],            The plaintiff in a suit for specific performance of contract may raise  an alternative plea that the transaction is a mortgage by way of conditional  sale but he must be ready and willing either to repay the debt  or pay the  amount of consideration as agreed upon.  In the instant case, the First

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Respondent herein, however, raised a specific plea that he was a debtor and  that the deed of mortgage was executed only because the Appellants were  not licensed money lenders.  He not only approached the competent  authority under the Maharashtra Debt Relief Act for a declaration that he  was a debtor and  stood discharged from his debt, but also in the plaint he  sought for a decree for possesion of the suit land on the premise that the  provisions of  the Maharashtra Debt Relief Act were attracted.  He even  asked for a decree of  accounting.          It may be true that the plaintiff had made alternative prayers of  specific performance of the agreement of reconveyance and redemption of  mortgage but it appears that the plaints starts with the description of the  mortgage property.

  In the plaint, the plaintiffs averred :          "2\005The sale deed and the agreement are two documents  of the same transaction.  They are written in same  meeting and registered on same day.  Sale deed  transaction is a mortgage transaction\005\005"                  

"3.  The Plaintiff as agreed wrote a sale deed in the name  of defendant no.1 on 1.1.1971 as a security to the loan\005"                  

       After reciting the relevant stipulations contained in the registered   deed of agreement of sale to the effect that the First Appellant would  reconvey the suit property in his name and got a document registered, it was  averred :

"Accordingly to the conditions in the agreement Plaintiff  was and is ready to pay the amount to defendant.  And  also the Plaintiff is and was ready to bear the cost of  reconveyance deed.  According to the agreement Plaintiff  is and was ready to prepare  the reconveyance deed\005"

       However, from paragraph 6 onwards, a plea as regard creation of a  mortgage was raised specifically contending  :                  "(7).   Plaintiff is a debtor under Mumbai Debt  Relief Act.  According to the Plaintiff the mortgage  amount in the said document has been shunked.   Therefore Plaintiff prays that accordingly it be decided.

       (8)     If not decided as above then the accounting  of the mortgage property shall be done under the  provisions of Mumbai Money Lending Act.  The  defendant has earned a large amount by giving the  mortgage property on rental basis.  After the accounting  whatever amount remains for paying or taking  accordingly the Plaintiff is ready to give and take."

       It was further averred :

       "The Plaintiff prays that if it is not done as  mentioned above then the amount of Rs.45,000/- which  the Plaintiff is ready to pay to the defendants be given to  the defendant and the Plaintiff be given the possession of  mortgage relief suit property with necessary documents."

       Reading the plaint as a whole, it becomes evident that the First  Respondent principally raised a contention that the transaction was of

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mortgage and the sale stood redeemed and he was discharged from the debt.   He moreover prayed for a decree for accounting, but contended that only in  the event, such prayer is not granted, he was ready to pay the defendants the  said sum of Rs.45,000/-  The averments made in the pleadings must be  construed  reasonably and so read the statement made as regard  purported  readiness and willingness to pay the stipulated amount to the defendants  according to the conditions mentioned in the agreement cannot be read in  isolation.

       In his examination-in-chief although he stated  :

"\005I am and I was ready to pay the consideration as per  the agreement.  I am ready to pay the consideration  amount of Rs.45,000/-.  I was also ready to pay the said  sum.  I am also ready to pay the costs of the registration  of the sale deed".

       but in his cross-examination, he admitted :

       "I am not doing any business or work, since last 10  years.  I have no source of income.  I have no bank  account.  I am not to receive any amounts from any one.    I have no amount with me.  I am money less since last 10  years.  At the time of giving notice (9.6.1978) I have no  my own accounts.  It is not true to say that I was never  ready and willing to pay the sums of the defendants, for  the reconveyance of the suit house."

       The learned trial Judge further noticed the following statement of te  plaintiffs in paragraph 18 of the cross-examination :

       "It  is my prayer in the suit that the suit property is  to redeemed without any amount being given, as the said  sum is already satisfied out of the income of rent,  received by the Defendant.  It is also my prayer that  account of dues be taken and if necessary, I would pay if  any dues remained unsatisfied.  It is also my say that the  suit transaction is of mortgage nature."                                                                         (Emphasis supplied)                                                                It is now well-settled that the conduct of the parties, with a view to  arrive at a finding as to whether the plaintiff-Respondents were all along and  still are ready and willing to perform their part of contract as is mandatorily  required under Section 16(c) of the Specific Relief Act must be determined  having regard to the entire attending circumstances.  A bare averment in the  plaint or a statement made in the examination-in-chief would not suffice.   The conduct of the plaintiff-Respondents must be judged having regard to  the entirety of the pleadings as also the evidences brought on records.

       In terms of Form Nos. 47 and 48 appended to Appendix A of the  Code of Civil Procedure, ’the plaintiff must plead that he has been and still  is ready and willing specifically to perform the agreement on his part of  which the defendant has had notice’ or ’the plaintiff is still ready and willing  to pay the purchase-money of the said property to the defendant’.  The offer  of the plaintiff in the instant case is a conditional one and, thus, does not  fulfill the requirements of law.

       In Bank of India (supra),  it was held :        "\005It is true that plaintiff 1 stated that he was buying for

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himself, that he had not sufficient ready money to meet  the price and that no definite arrangements had been  made for finding it at the time of repudiation.  But in  order to prove himself ready and willing a purchaser has  not necessarily to produce the money or to vouch a  concluded scheme for financing the transaction.  The  question is one of fact and in the present case the  appellate Court had ample material on which to found the  view it reached\005"

       The said decision was, thus, rendered on its own fact.  Such a  conclusion was arrived at having regard to the fact that ample material had  been brought on records.  There must, thus,  be some evidence to show that  the plaintiff could arrange for the amount stipulated for payment to the  vendor as and when called upon to do so.  In this case no such evidence was  disclosed.   

       In Nathulal (supra), the contract was required to be performed in  certain sequence.  Therein it was found that certain arrangements had been  made by the Respondent therein for paying the amount due.  It was held that  so long as Nathulal did not carry out his part of contract, Phoolchand could  not be called upon to pay the balance of the price and it was in that situation  held that latter at all relevant time was ready to perform his part of contract.

       The said decision also has no application in the instant case.

        In Smt. Indira Kaur (supra), this Court merely held that for  determining the question as regard readiness and willingness on the part of  the plaintiff to perform his part of contract, the Court must examine the  position of both the parties.  This Court  did not say, as was submitted by  Mr. Sawant, that the conduct of both the parties must be taken into  consideration.  In that case, the defendant’s contention that he had not  received the notice of the plaintiff was held to be incorrect, as despite his  alleged receipt of notice, he admitted to have visited the Sub-Registrar’s  office on 16.8.1977.  In that situation it was held that the defendant was not  ready and willing to perform his part of contract.  It was held that as of fact  that the plaintiff had done what he could do.  He went to the Sub-Registrar’s  Office, he filed an application for recording his presence.  The said decision,  therefore, has no application in the instant case.

       On the other hand in Mahabir Prasad Jain (supra), it has been held :   "22. The way in which the respondent has been  instituting different proceedings in different fora within a  short time making inconsistent allegations shows that the  respondent has been abusing the process of court and not  come to court with clean hands. He is not entitled to get  any equitable relief under the Specific Relief Act."

       In Pushparani S. Sundaram (supra), it was opined :                   "\005Inference of readiness and willingness could be  drawn by the conduct of the plaintiff, the circumstances  in a particular case in other words to be gathered from the  totality of circumstances."

       It was further held                   "\005So far these being a plea that they were ready and  willing to perform their part of the contract is there in the  pleading, we have no hesitation to conclude, that this by  itself is not sufficient to hold that the appellants were  ready and willing in terms of Section 16(c) of the

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Specific Relief Act. This requires not only such plea but  also proof of the same. Now examining the first of the  two circumstances, how could mere filing of this suit,  after exemption was granted be a circumstance about  willingness or readiness of the plaintiff. This at the most  could be the desire of the plaintiff to have this property.  It may be for such a desire this suit was filed raising such  a plea. But Section 16(c) of the said Act makes it clear  that mere plea is not sufficient, it has to be proved."

       In N.P. Thirugnanam (Dead) by Lrs. vs. Dr. R. Jagan Mohan Rao and  Others [(1995) 5 SCC 115], this Court held :

"\005The continuous readiness and willingness on the part  of the plaintiff is a condition precedent to grant the relief  of specific performance. This circumstance is material  and relevant and is required to be considered by the court  while granting or refusing to grant the relief. If the  plaintiff fails to either aver or prove the same, he must  fail. To adjudge whether the plaintiff is ready and willing  to perform his part of the contract, the court must take  into consideration the conduct of the plaintiff prior and  subsequent to the filing of the suit along with other  attending circumstances. The amount of consideration  which he has to pay to the defendant must of necessity be  proved to be available..."

Yet again in Manjunath Anandappa (supra), this Court held :     "27. The decisions of this Court, therefore, leave no  manner of doubt that a plaintiff in a suit for specific  performance of contract not only must raise a plea that he  had all along been and even on the date of filing of suit  was ready and willing to perform his part of contract, but  also prove the same. Only in certain exceptional situation  where although in letter and spirit, the exact words had  not been used but readiness and willingness can be culled  out from reading all the averments made by the plaintiff  as a whole coupled with the materials brought on record  at the trial of the suit, to the said effect, the statutory  requirement of Section 16(c) of the Specific Relief Act  may be held to have been complied with."  

       In Pukhraj D. Jain (supra), it was held :

"6. Section 16(c) of the Specific Relief Act lays  down that specific performance of a contract cannot be  enforced in favour of a person 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 the  performance of which has been prevented or waived by  the defendant. Explanation (ii) to this sub-section  provides that the plaintiff must aver performance of, or  readiness and willingness to perform, the contract  according to its true construction. The requirement of this  provision is that the plaintiff must aver that he has always  been ready and willing to perform the essential terms of  the contract. Therefore, not only should there be such an  averment in the plaint but the surrounding circumstances  must also indicate that the readiness and willingness  continue from the date of the contract till the hearing of  the suit. It is well settled that equitable remedy of specific  performance cannot be had on the basis of pleadings  which do not contain averments of readiness and

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willingness of the plaintiff to perform his contract in  terms of Forms 47 and 48 CPC. Here Respondent 1  himself sent a legal notice rescinding the contract and  thereafter filed OS No. 801 of 1977 on 7-11-1977  claiming refund of the advance paid by him. In fact the  suit for recovery of the amount was decreed by the trial  court on 24-7-1985 but he himself preferred a revision  against the decree wherein an order of rejection of the  plaint was passed by the High Court. In such  circumstances, it is absolutely apparent that Respondent  1 was not ready and willing to perform his part of the  contract and in view of the mandate of Section 16 of the  Specific Relief Act, no decree for specific performance  could be passed in his favour. The trial court, therefore,  rightly held that the suit filed by Respondent 1 was not  maintainable."

       Furthermore, the First Respondents had raised inconsistent plea in the  sense that he  had categorically taken a standing that the debt stood  discharged.  Such a plea was irreconcilable with the plea that he had all  along been ready and willing to perform his part of contract.  It is in that  situation, the decision of this Court in Prem Raj (supra) is attracted wherein  it was held that although inconsistent reliefs by a party to the suit is  maintainable but it must be shown that each of such pleas is maintainable.   

The plea of automatic redemption of mortgage and discharge from  debt raised on the part of the Respondents herein cannot stand with a plea of  readiness and willingness on his part to perform their  part of contract.    The Division Bench of the High Court, thus,  posed a wrong question  unto itself.  It also failed to take into consideration the statement of the  plaintiff in his cross-examination and in particular paragraphs 12 and 19  thereof in their proper perspective.  The statements made by the plaintiff  before the court, if read as a whole would clearly show that he was neither in  a position to raise any fund.   He proceeded on the basis that he was not  required to pay any amount.  The Division Bench furthermore misdirected  itself in holding :

       "The test would be whether the Plaintiff was in a  position to pay the money on direction by the court and  not whether he had the money.  No such question was  ever put to him to suggest that if he was called upon by  the Court to deposit the money, he  had no means to  deposit the money or make it available for deposit.        It was for the plaintiff  to prove his readiness and willingness to pay  the stipulated amount and it was not for the Appellants to raise such  question.  The Division Bench furthermore considered irrelevant facts in  holding that the plaintiff deposited the amount of Rs.60,000/- in the Court of  Appeal to arrive at the conclusion that the plaintiff-Appellant was ready and  willing to perform his part of contract.  Deposit of any amount in court at the  appellate stage by the plaintiffs by itself would not establish their readiness  and willingness to perform their part of the contract within the meaning of  Section 16(c) of the Specific Relief Act.  It further erred in holding that the  mere fact that he did not have money at the time of issuance of the notice,  the day when plaint was filed or at the time of his evidence was of no  consequence in total disregard of statutory mandate contained in Section  16(c) of the Specific Relief Act.  Similarly, the finding of the Division  Bench that the prayer for grant of  specific performance of contract  and in  the alternative for redemption of mortgage or cancellation of debt cannot be  said to be pleas which could not be raised or be a bar for the court to  consider to grant the relief of specific performance, cannot be accepted, as  pleas of specific performance of contract and cancellation of debt and/or a  decree for accounting are inconsistent.

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As regard the question as to whether the transaction was undervalued,  the Appellate Court committed a manifest error in taking into consideration  the fact that  payment of Rs.45,000/- was to be made after 7 years and before  9 years without any interest is a circumstance to hold that discretion should  be exercised in favour of the plaintiff-Respondents.

In Sargunam (Dead) by Lr. Vs. Chidambram and Another [(2005) 1  SCC 162], this Court  observed :

"In the case of Mademsetty Satyanarayana v. G.  Yelloji Rao, it has been held that the jurisdiction to  decree specific performance is discretionary and the court  is not bound to grant such relief merely because it is  lawful to do so; that in cases where one of the three  circumstances mentioned in Section 20(2) is established,  no question of discretion arises\005"     

[See also M.V. Shankar Bhat and Another  vs. Claude Pinto since  (Deceased) by Lrs. And Others. \026 (2003) 4 SCC 86].  

It is furthermore trite that normally a court of appeal would not  interfere with a concurrent finding of fact which is based on appreciation of  oral evidence.

In Bank of India (supra) whereupon Mr. Sawant placed reliance, the  Privy Council held :

"Their Lordships are not unmindful of the great  weight to be attached to the findings of fact of a Judge of  first instance who sees and hears the witnesses and is in a  position to assess their credibility from his own  observation.  For this reason  they would be reluctant to  differ from the learned Judge in this instance if his  conclusion on the issue under consideration had turned  on the impression made by Jamsetji in the witness-  box\005."          Yet in Manjunath Anandappa (supra), it was held :

       "It is now also well settled that a court of appeal  should not ordinarily interfere with the discretion  exercised by the courts below."

       The question also came up for consideration in Collector of Customs,  Bombay  vs.  Swastic Woollens (P) Ltd. and Others [(1988) Supp. SCC 796]   "\005An appeal has been provided to this Court to oversee  that the subordinate tribunals act within the law.  Merely  because another view might be possible by a competent  court of law is no ground for interference under Section  130-E of the Act though in relation to the rate of duty of  customs or to the value of the goods for purposes of  assessment, the amplitude of appeal is unlimited.  But  because the jurisdiction is unlimited, there is inherent  limitation imposed in such appeals.  The Tribunal has not  deviated from the path of correct principle and has  considered all the relevant factors.  If the Tribunal has  acted bona fide with the natural justice by a speaking  order, in our opinion, even if superior court feels that  another view is possible, that is no ground for  substitution of that view in exercise of power under  clause (b) of Section 130-E of the Act."  

       [See also West Bengal Electricity Regulatory Commission vs. CESC  Ltd. (2002) 8 SCC 715 and Commissioner of Customs, Chennai vs. Adani

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Exports Ltd. and another (2004)  4 SCC 367]

       It may be, as has been held in Asha Devi (supra)  that the power of the  Appellate Court in intra court appeal is not exactly the same as contained in  Section 100 of the Code of Civil Procedure but it is also well-known that  entertainment of a Letters Patent Appeal is discretionary and normally the  Division Bench would not, unless there exist cogent reasons, differ from a  finding of fact arrived at by the learned Single Judge.  Even as noticed  hereinbefore, a court of first appeal which is the final court of appeal on fact  may have to exercise some amount of restraint.   

       For the reasons aforementioned, the impugned judgment cannot be  sustained which is set aside accordingly.  The appeal is allowed.  In the facts  and circumstances of the case, however, there shall be no order as to costs.