Are you looking for a legal research tool ?
Get Started
Do check other products like LIBIL, a legal due diligence tool to get a litigation check report and Case Management tool to monitor and collaborate on cases.

Udaychand And Ors v. Smt.premwati Bai

Udaychand And Ors v. Smt.premwati Bai

(High Court Of Madhya Pradesh)

SECOND APPEAL No. 651 of 2005 | 01-04-2023

1. The lawyers were on strike and the Appellant No. 1(3) appeared in person and requested that the matter has already been adjourned on various occasions, therefore, the same may be heard on any early date. He also expressed his readiness to argue the matter. Accordingly, he was heard at length.

2. This Second Appeal under Section 100 of CPC has been filed against the Judgment and Decree dated 10-12-2004 passed by 12th Additional District Judge (Fast Track Court), Jabalpur in R.C.A. No. 19A/2004 arising out of Judgment and Decree dated 28-2-2004 passed by 3rd Civil Judge Class 1, Jabalpur in C.S. No. 126-A/2003.

3. The facts necessary for disposal of present appeal in short are that the plaintiff/respondent instituted a suit against original defendant Udaichand for specific performance of contract pleading inter alia that the defendant is the owner of house number 382, 383/1 standing on block 36, plot 94, situated at Bhantalaiya ward, Jabalpur. On 23-3-1979, the defendant had agreed to alienate house no. 382, Bhantalaiya Ward, Jabalpur admeasuring about 12 ½ x 31 feets for a total consideration amount of Rs. 13,500/-and delivered the possession of the house in question to the plaintiff. The plaintiff also paid Rs. 12,500/- towards the part payment of consideration of house. Accordingly on 18-6-1980, the defendant also executed an agreement to sell. The defendant had also agreed to get the mortgaged redeemed as the property in question was already mortgaged. The plaintiff had also agreed to sell the suit house with clear title free from all encumbrances. The defendant also agreed to get a water tap connection in the house no. 382 at his cost and also to pay the electricity bill for the period upto 23-3-1979. However, inspite of repeated requests, the sale deed was not executed. In the month of December 1989, the defendant made a further request to the plaintiff to purchase the remaining part of the house bearing no. 383 and 383/1. It was represented by the defendant that from the amount which he will receive from the sale of remaining part of house, he would pay all the dues to Collector, Mandla, and then would execute the sale deed. The plaintiff also agreed to purchase the remaining part of the house for a consideration of Rs. 25,000/-. An amount of Rs. 10,000/- was paid towards advance. In addition to Rs. 10,000/-, an additional amount of Rs. 5,000/- was paid towards registration charges through his Advocate Shri N.D. Agrawal, who also drafted the agreement on 30-1-1990. The plaintiff reserves his right to file a second suit for enforcement of second agreement. It was the case of the plaintiff that till today, the defendant has not executed the sale deed whereas the plaintiff was always ready and willing to perform her part of contract. In the month of December, 1981, the defendant took a further loan of Rs. 8,000/- and handed over the possession of house no. 383,383/1 by way of guarantee of repayment of loan of Rs. 8,000/-. Since, the defendant had failed to execute the sale deed, therefore, the plaintiff served him a notice on 3-8-1990 requiring the defendant to execute the sale deed within a period of fortnight from the date of receipt of notice. It was pleaded that the plaintiff is ready and willing to pay the outstanding amount of Rs. 1,000/-. It appears that the defendant amended his pleadings, therefore, by way of consequential amendment, it was denied that the husband of the plaintiff was inducted as a tenant. It was denied that the house was vacated in the year 1984. The possession of the defendant was also denied. It was denied that the house was purchased from the funds of Joint Hindu Family Property.

4. The defendant denied the plaint averments and it was denied that the defendant has ever agreed to alienate the house in question. The possession of the plaintiff was denied. The agreement to sell dated 18-6-1980 was also denied. It was alleged that the plaintiff has manufactured false documents. It was pleaded that the husband of the plaintiff was the tenant at the rate of Rs. 100/- per month. The rent was paid regularly till November, 1989. Thereafter, he refused to pay the rent. It was claimed that house no. 382,383,383/1 is a double storied house and it is not possible to separate the same. The husband of the plaintiff was doing the business of utensils. By way of amendment, it was pleaded that the house in question was let out to the husband of the plaintiff in the year 1978 which was vacated by him in the year 1984. Thereafter, it was given to Gajraj Singh. After some time, it was vacated by Gajraj Singh and it was again let out to the husband of the plaintiff. It was further pleaded that the house in question was purchased from the funds of Joint Hindu Family property and all the co-sharers have not been impleaded as defendants and therefore, the suit is not maintainable due to non-joinder of necessary parties.

5. The Trial Court after framing issues and recording evidence, dismissed the suit.

6. Being aggrieved by the Judgment and Decree passed by the Trial Court, the respondent, preferred an appeal which was allowed by the First Appellate Court and a decree for specific performance of Contract was passed.

7. This Appeal was admitted on the following Substantial Questions of Law :

(i) Whether the suit for specific performance instituted in the year 1990 on the basis of sale agreement dated 18-6-1980 Ex. P.1 is barred by Limitation Act

(ii) Whether a decree for specific performance by way of reversal may be passed by exercising powers under Section 73 of the Indian Evidence Act

8. Challenging the Judgment and Decree passed by the First Appellate Court, it is submitted by the Appellant Yogesh Rathore, that the plaintiff had prepared forged agreement and therefore, the Trial Court had rightly dismissed the suit.

9. Heard the Appellant. None appears for the respondent because the Lawyers are on strike.

Whether the suit for specific performance instituted in the year 1990 on the basis of sale agreement dated 18-6-1980 Ex. P.1 is barred by Limitation Act

10. The suit for specific performance of contract was filed on 29-8-1990 whereas according to the plaintiff, the agreement to sell was executed on 18-6-1980.

11. In the agreement, Ex. P.1, it is mentioned that the property in dispute is mortgaged. It was further mentioned that after getting the property redeemed from mortgage, the defendant would make it free from all encumbrances and thereafter, the defendant would execute the sale deed after obtaining permission from competent authority, Urban Land Ceiling. It was also mentioned in the agreement to sell, Ex. P.1, that possession of the house has been given on 23-3-1979 and only Rs. 1,000/- are outstanding. However, the defendant has denied the execution of such agreement and has also claimed that it does not bear his signatures.

12. Thus, the initial burden of proof was on the plaintiff to prove that the agreement to sell was executed. The Supreme Court in the case of Thiruvengadam Pillai v. Navaneethammal, reported in (2008) 4 SCC 530 [LQ/SC/2008/407] has held as under :

19. The trial court had analysed the evidence properly and had dismissed the suit by giving cogent reasons. The first appellate court reversed it by wrongly placing onus on the defendants. Its observation that when the execution of an unregistered document put forth by the plaintiff was denied by the defendants, it was for the defendants to establish that the document was forged or concocted, is not sound proposition. The first appellate court proceeded on the basis that it is for the party who asserts something to prove that thing; and as the defendants alleged that the agreement was forged, it was for them to prove it. But the first appellate court lost sight of the fact that the party who propounds the document will have to prove it. In this case the plaintiff came to court alleging that the first defendant had executed an agreement of sale in his favour. The first defendant having denied it, the burden was on the plaintiff to prove that the first defendant had executed the agreement and not on the first defendant to prove the negative. The issues also placed the burden on the plaintiff to prove the document to be true. No doubt, the plaintiff attempted to discharge his burden by examining himself as also scribe and one of the attesting witnesses. But the various circumstances enumerated by the trial court and the High Court referred to earlier, when taken together, rightly create a doubt about the genuineness of the agreement and dislodge the effect of the evidence of PWs 1 to 3. We are therefore of the view that the decision of the High Court, reversing the decision of the first appellate court, does not call for interference.

13. The Supreme Court in the case of Rangammal v. Kuppuswami, reported in(2011) 12 SCC 220 [LQ/SC/2011/737] has held as under :

21. Section 101 of the Evidence Act, 1872 defines "burden of proof" which clearly lays down that:

"101. Burden of proof.-Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person."

Thus, the Evidence Act has clearly laid down that the burden of proving a fact always lies upon the person who asserts it. Until such burden is discharged, the other party is not required to be called upon to prove his case. The court has to examine as to whether the person upon whom the burden lies has been able to discharge his burden. Until he arrives at such conclusion, he cannot proceed on the basis of weakness of the other party.

14. The Supreme Court in the case of Joseph John Peter Sandy v. Veronica Thomas Rajkumar, reported in (2013) 3 SCC 801 [LQ/SC/2013/280] has held as under :

Onus of proof

21. In Thiruvengadam Pillai v. Navaneethammal this Court held that (SCC p. 540, para 19) when the execution of an unregistered document put forth by the plaintiff was denied by the defendants, the ruling that it was for the defendants to establish that the document was forged or concocted is not a sound proposition. The first appellate court proceeded on the basis that it is for the party who asserts something to prove that thing; and as the defendants alleged that the agreement was forged, it was for them to prove it. But the first appellate court lost sight of the fact that the party who propounds the document will have to prove it. It was the plaintiff who had come to the court alleging that the first defendant had executed an agreement of sale in his favour. The defendant having denied it, the burden was on the plaintiff to prove that the defendant had executed the agreement and not on the defendant to prove the negative.

15. The plaintiff has examined herself Premvati (P.W.1), Nandlal (P.W.2), Ram Swaroop Soni (P.W.3), Todar Prasad Agrawal (P.W.4), N.D. Agrawal (P.W.5), whereas the defendant examined himself Udaichand (D.W.1) and Harishchandra (D.W.2).

16. Premvati (P.W.1) has specifically stated that there was a verbal agreement for consideration of Rs. 13,500/- and accordingly, possession was given. Thereafter, an agreement to sell was written and an amount of Rs. 12,500/- was paid to the defendant. Her husband was present at the time of payment of Rs. 12,500/-. The agreement is Ex. P.1. The defendant Udaichand had signed at A to A on Ex. P.1. The house in question was mortgaged with Mandla Bank and accordingly, he had assured that he would execute the sale deed after getting it redeemed. An amount of Rs. 1000/- was to be paid before the registrar apart from registration charges. She had requested the defendant on various occasions, but every time, he assured that after getting the house redeemed, he would execute the sale deed. Thereafter, the defendant informed this witness that he does not have money to repay the mortgaged amount, therefore, he offered that She may purchase house no. 383 and accordingly, an agreement was executed in respect of house no. 383,383/1 for a consideration of Rs. 25,000/-. A written note was prepared by Shri N.D. Agrawal, Advocate and thereafter, the same was got typed by Shri N.D. Agrawal, Advocate and he also signed the same, Ex. P.2, but this agreement neither contains the signatures of Udaichand nor that of witnesses. Since, Udaichand was demanding an additional amount of Rs. 10,000/- therefore, the agreement was not signed. The copy of the notice which was given to the defendant for execution of sale deed is Ex. P.3. She had also deposited Nazul Penalty, Ex. P.4 and the original notice is Ex. P.5. The handwritten note of Shri N.D. Agrawal is Ex. P.6. In cross-examination, She has stated that after 1-2 months of execution of agreement, She had requested the defendant to execute the sale deed. Thereafter, She used to request the defendant after every 1-2 months, but every time he was avoiding by saying that he would execute the same and She is already residing in the said house. She had saved money by doing stitching work. Agreement was executed on 18-6-1980 and on the same day, money was paid. House no 382 is a double storied house and agreement was executed in respect of 30x12 ½ ft. The measurement of house was done prior to execution of agreement to sell. The amount was paid from the saving of this witness. An amount of Rs. 10,000/- was paid to the defendant and an amount of Rs. 5,000/- was paid to Shri N.D. Agrawal, Advocate for bearing registration charges. Shaligram was the tenant in House no. 343. Her signatures are at B to B on the plaint. The plaint was got prepared by her husband. She denied the suggestion for want of knowledge that the defendant had published a public notice in news paper that he is interested in selling house no. 382,383,383/1 and interested parties may contact him, Ex.D. 4. She denied that the property in dispute was purchased from the funds of Joint Hindu Family Property. She denied that no agreement to sell was executed.

17. Nandlal (P.W.2) has stated that an agreement to sell was executed, but denied his signatures on Ex. P.1.

18. Ramswaroop Soni (P.W.3) is the husband of the plaintiff. He has stated that about 22 years back, an agreement to sell was executed and he is residing in the said house. Initially a verbal agreement was executed and 2-3 months thereafter, agreement to sell was executed and an amount of Rs. 12,500/- was given by his wife. The defendant had informed, that the house is under mortgage and he would execute the sale deed after seeking permission. This witness had requested the defendant to execute the sale deed, but every time he avoided by saying that he would execute the same after obtaining permission. The agreement to sell, Ex. P.1 was got typed by defendant. Todar and Sunder had also signed the document apart from the defendant. On various occasions, he had requested the defendant, but every time he was assuring. The defendant offered the adjoining house whose no. is 383. The defendant wanted to sell the said house for Rs. 25,000/-. They were ready to purchase the house and accordingly, the defendant went to purchase the stamp papers. Thereafter, the defendant and his counsel Shri N.D. Agrawal, Advocate came and Shri N.D. Agrawal, Advocate did the writing work. Initially a handwritten note was prepared thereafter, it was got typed. An amount of Rs. 10,000/- was given to the defendant. An amount of Rs. 5,000/- was given to Shri N.D. Agrawal, Advocate for registration charges. Even after taking an amount of Rs. 10,000/- the defendant did not sign the agreement and demanded further amount of Rs. 10,000/-. At that time, Shri N.D. Agrawal, Advocate assured the plaintiff, that she should not bother about the same and he is signing the agreement to sell and also assured that he would obtain the signatures of the defendant. In cross-examination, it is stated by this witness, that the defendant had purchased the house in the year 1975 from Haneef. He denied for want of knowledge that the house was purchased from the funds of Joint Hindu Family Property. The defendant had demanded Rs. 13,500/- for the house in question and the plaintiff had not negotiated on the price of the house and had agreed to purchase the same at the price which was demanded by the defendant. The first agreement was executed in the year 1980 and the second agreement was executed in the year 1990. His wife is running stitching classes. Notice was given in the year 1990 and prior to that only verbal requests were made.

19. Todar Prasad Agrawal (P.W.4) is an attesting witness of agreement, Ex. P.1 who has proved his signatures on agreement to sell, Ex. P.1.

20. Narsing Das Agrawal (P.W.5) has stated that about 10-15 years back, some representative of the defendant had visited him and informed that an agreement is to be executed. The conditions told by that person were noted down by him on the paper which is Ex. P.6. Thereafter, he prepared the draft, Ex. P.2, which contains his signatures. In cross-examination, he admitted that the defendant had not come to get the draft prepared. He also admitted that earlier he had filed the written statement on behalf of the defendant and had also given reply to the notice on behalf of the defendant. However, this witness has specifically stated that at the time of preparation of draft, Ex. P.2, neither plaintiff, nor her husband nor Udaichand (defendant) had come.

21. Thus, it is clear that the draft of agreement, Ex. P.2 does not contain the signatures of the defendant. N.D. Agrawal (P.W.5) has not stated that any money was paid to the defendant in front of him. He has also not stated that an amount of Rs. 5,000/- was paid to him by the plaintiff. On the contrary, he denies the presence of plaintiff, her husband and the defendant. Even this witness has claimed that the draft was prepared on the basis of instructions given by the representative of the defendant. But one thing is clear. The plaintiff in para 6 and 7 of the plaint had specifically pleaded that an amount of Rs. 5,000/- was paid to Shri N.D. Agrawal, Advocate, but still the written statement was signed and presented by Shri N.D Agrawal, Advocate. Thus, it was clear to the defendant, that the plaintiff has made certain averments against his Counsel, still Shri N.D. Agrawal, Advocate was retained and engaged by the defendant. Although, in the written statement, payment of money and execution of second agreement was denied, but still Shri N.D. Agrawal, Advocate decided to appear as a Counsel for the defendant, inspite of the fact that there were specific allegations against Shri N.D. Agrawal, Advocate in the plaint. Be that as it may. The fact that the defendant engaged Shri N.D. Agrawal, Advocate, clearly indicates, that N.D. Agrawal, Advocate was acting on behalf of the defendant. Therefore, his statement in cross-examination that defendant had not contacted him but his representative had contacted him for execution of second agreement, cannot be accepted specifically when the signatures of Shri N.D. Agrawal, Advocate on second agreement, Ex. P.2 is not in dispute and at the relevant time, Shri N.D. Agrawal was the counsel for the defendant.

22. Udaichand (D.W.1) has claimed that the agreement to sell, Ex. P.1 does not contain his signatures and they are forged. He further stated that the property in question was purchased from the funds of Joint Hindu Family, therefore, the property is joint and no partition has taken place. He further claimed that the property in dispute was purchased by his father, but admitted that he has not produced the said sale deed. He further stated that the property in dispute was let out to Ramswaroop Soni (P.W.3) but admitted that there is nothing in writing in this regard. This witness has also admitted that written statement was prepared by Shri N.D. Agrawal, Advocate, and prior to that he had already seen the agreement, Ex. P.2, but claimed that he had not seen the hand written draft, Ex. P.6 prepared by Shri N.D. Agrawal, Advocate. He admitted that one Saligram was the tenant at the time of purchase of property.

23. Harishchandra (D.W.2) was also examined to prove that the property in dispute is a Joint Hindu Family Property.

24. So far as the nature of property is concerned, the defendant had incorporated this pleading by amending the written statement and in the original written statement, there was no such averment. Furthermore, it is the case of the defendant that the property was purchased by his father, but has not filed the copy of the sale deed to prove the same. It is well established principle of law that if a party is in possession of best evidence, but fails to produce the same, then an adverse inference can be drawn. Further, the defendant had filed a suit against Saligram for eviction and in the said suit, he had claimed himself to be the owner and this fact was admitted by him in para 31 of his cross-examination and the judgment passed in Civil Appeal has also been filed as Ex. D.10. Further, the defendant has relied upon a public notice, Ex. D.4, in which the defendant had expressed his willingness to alienate the house in question. If the defendant was not the sole owner of the house in question, then there was no question of issuance of Public Notice, Ex. D.4. Thus, it is held that the defendant is the sole owner of the property in dispute and the disputed property was not a Joint Hindu Family Property and the defendant had right to enter into an agreement.

25. Since, the plaintiff is seeking enforcement of agreement to sell, Ex. P.1, then the initial burden of proof is on the plaintiff. The plaintiff apart from examining herself, has examined Todar Prasad Agrawal (P.W.4) as an attesting witness. The Court below has come to a conclusion that the agreement to sell was executed by the defendant. The defendant had claimed that the agreement to sell is a forged document and it doesn't contain his signatures. Once, the execution of agreement to sell was proved by the plaintiff, then burden had shifted onto the defendant to prove that the agreement to sell, Ex. P.1 was a forged document. No attempt was made by the defendant to get his signatures on agreement to sell, Ex. P.1, examined by a handwriting expert.

26. Thus, the execution of agreement to sell, Ex. P.1 was duly proved by the plaintiff, and no Substantial Question of Law has been framed thereby questioning the execution of agreement, Ex. P.1.

27. In the agreement itself, it was specifically mentioned that the property is mortgaged and sale deed shall be executed after getting the property redeemed from mortgage. Thus, the burden was on the defendant to get the property free from all encumbrances so that sale deed can be executed. Since, the property was under mortgage therefore, first charge was of the mortgagee and the defendant had no right to alienate the same without redemption of property. The Supreme Court in the case of PTC (India) Financial Services Ltd. v. Venkateswarlu Kari, reported in (2022) 9 SCC 704 has held as under :

28. Where money is advanced by way of the loan upon the security of goods, the transaction may take the form of a mortgage or pledge. The difference between a pledge and a mortgage of movable property is that while under a pledge there is only a bailment, whereas under a mortgage there is transfer of the right of the property by way of security.

29. The distinction is aptly brought out in the following passage in Halsbury's Laws of England :

"A mortgage of personal chattels is essentially different from a pledge or pawn under which money is advanced upon the security of chattels delivered into the possession of the lender, such delivery of possession being an essential element of the transaction. A mortgage conveys the whole legal interest in the chattels; a pledge or pawn conveys only a special property, leaving the general property in the pledger or pawnor; the pledgee or pawnee never has the absolute ownership of the goods, but has a special property in them coupled with a power of selling and transferring them to a purchaser on default of payment at the stipulated time, if any, or at a reasonable time after demand and non-payment if no time for payment is agreed upon."

30. Therefore, unlike a pledgee, a mortgagee acquires general rights in the things mortgaged subject to the right of redemption of a mortgagor. In other words, the legal estate in the goods mortgaged passes on to the mortgagee. In comparison, a pawnee has only the special right in the goods pledged, namely, the right of possession as security and in case of default, he can bring a suit against the pawnor as well as sell the goods after giving a reasonable notice. Whether a particular transaction is a mortgage of movable property or a pledge can only be determined by reference to the intention of the parties, and other surrounding circumstances.

Thus, the burden was on the defendant to get the property free from all encumbrances, but the same was not done by the defendant.

28. Further, time was not the essence of contract. Even otherwise, in case of an immovable property, the time cannot be treated as an essence. The Supreme Court in the case of Saradamani Kandappan v. S. Rajalakshmi, reported in (2011) 12 SCC 18 [LQ/SC/2011/821] has held as under :

36. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market values of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that grant of specific performance would not prejudice the vendor defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was comparatively very little inflation, in India. The third quarter of the twentieth century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.

37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and "non-readiness". The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.

38. It is now well settled that laws, which may be reasonable and valid when made, can, with passage of time and consequential change in circumstances, become arbitrary and unreasonable. In Rattan Arya v. State of T.N. this Court held: (SCC pp. 389-90, para 4)

"4. ... We must also observe here that whatever justification there may have been in 1973 when Section 30(ii) was amended by imposing a ceiling of Rs. 400 on rent payable by tenants of residential buildings to entitle them to seek the protection of the Act, the passage of time has made the ceiling utterly unreal. We are entitled to take judicial notice of the enormous multifold increase of rents throughout the country, particularly in urban areas. It is common knowledge today that the accommodation which one could have possibly got for Rs. 400 per month in 1973 will today cost at least five times more. In these days of universal, day-to-day escalation of rentals any ceiling such as that imposed by Section 30(ii) in 1973 can only be considered to be totally artificial and irrelevant today. As held by this Court in Motor General Traders v. State of A.P. a provision which was perfectly valid at the commencement of the Act could be challenged later on the ground of unconstitutionality and struck down on that basis. What was once a perfectly valid legislation, may in course of time, become discriminatory and liable to challenge on the ground of its being violative of Article 14."

39. In Malpe Vishwanath Acharya v. State of Maharashtra a three-Judge Bench of this Court considered the validity of determination of standard rent by freezing or pegging down the rent as on 1-9-1940 or as on the date of first letting, under Sections 5(10)(b), 7, 9(2)(b) and 12(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. This Court held that the said process of determination under the Act, which was reasonable when the law was made, became arbitrary and unreasonable in view of constant escalation of prices due to inflation and corresponding rise (sic fall) in money value with the passage of time. This Court held: (SCC pp. 22-23, paras 29 & 31)

"29. Insofar as social legislation, like the Rent Control Act is concerned, the law must strike a balance between rival interests and it should try to be just to all. The law ought not to be unjust to one and give a disproportionate benefit or protection to another section of the society. When there is shortage of accommodation it is desirable, nay, necessary that some protection should be given to the tenants in order to ensure that they are not exploited. At the same time such a law has to be revised periodically so as to ensure that a disproportionately larger benefit than the one which was intended is not given to the tenants. ...

* * *

31. Taking all the facts and circumstances into consideration we have no doubt that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable."

40. The principle underlying the said decisions with reference to statutes, would on the same logic, apply to decisions of courts also.

41. A correct perspective relating to the question whether time is not of the essence of the contract in contracts relating to immovable property, is given by this Court in K.S. Vidyanadam v. Vairavan (by Jeevan Reddy, J. who incidentally was a member of the Constitution Bench in Chand Rani). This Court observed: (SCC pp. 7 & 9, paras 10-11)

"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. ... 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. ...

11. ... We cannot be oblivious to the reality-and the reality is constant and continuous rise in the values of urban properties-fuelled by large-scale migration of people from rural areas to urban centres and by inflation. ... 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."

42. Therefore there is an urgent need to revisit the principle that time is not of the essence in contracts relating to immovable properties and also explain the current position of law with regard to contracts relating to immovable property made after 1975, in view of the changed circumstances arising from inflation and steep increase in prices. We do not propose to undertake that exercise in this case, nor referring the matter to a larger Bench as we have held on facts in this case that time is the essence of the contract, even with reference to the principles in Chand Rani and other cases. Be that as it may.

43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam:

(i) The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.

(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.

(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. The courts will also "frown" upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three-year period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part-performance, where equity shifts in favour of the purchaser.

29. The Supreme Court in the case of Chand Rani v. Kamal Rani, reported in (1993) 1 SCC 519 [LQ/SC/1992/916] has held as under :

25. From an analysis of the above case-law it is clear that in the case of sale of immovable property 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:

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.

30. Thus, even if the time was not an essence of contract, but still the contract should be performed within a reasonable period. If the facts of the case are considered then it is clear that the property was already mortgaged and the mortgagee had first charge over the property in question. Therefore, there was a legal impediment before the Defendant. It is the case of the plaintiff that She was regularly requesting the defendant to execute the sale deed, but all the time he was assuring that the same will be done after redemption. It is the case of the plaintiff that the defendant claimed that he does not have money for redemption of the property in dispute therefore, the plaintiff may purchase the adjoining part and accordingly, agreement to sell adjoining house, Ex. P.2 was executed in the year 1990. Thus, it is clear that although the plaintiff was ready and willing to perform her part of contract, but it was the defendant who was avoiding on the pretext that the suit property is under mortgage and he would execute the sale deed after getting it redeemed. Therefore, period of Limitation had not started to run as per Article 54 of Limitation Act because the defendant was under legal disability and therefore, it cannot be said that the plaintiff had a notice that the defendant has refused to perform his part of contract. Therefore, the first Substantial Question of Law is answered in Negative.

Whether a decree for specific performance by way of reversal may be passed by exercising powers under Section 73 of the Indian Evidence Act

31. As already held the plaintiff has proved the execution of the agreement to sell, Ex. P.1.

32. The defence of the defendant was that agreement to sell, Ex. P/1 is a forged document and does not contain his signatures. It is not out of place to mention here that the defendant never moved an application for comparison of his signatures by a handwriting expert.

33. The Supreme Court in the case of K.S. Satyanarayana v. V.R. Narayana Rao, reported in (1999) 6 SCC 104 [LQ/SC/1999/648] has held as under :

7. A piquant situation had developed before the trial court when the 1st defendant denied his signatures on the written statement and the vakalatnama in favour of his counsel. The trial court should have immediately probed into the matter. It should have recorded the statement of the counsel for the 1st defendant to find out if the vakalatnama in his favour and the written statement were not signed by the 1st defendant whom he represented. It was apparent that the 1st defendant was trying to get out of the situation when confronted with his signatures on the vakalatnama and the written statement and his having earlier denied his signatures on Exh. P-1 and Exh. P-2 in order to defeat the claim of the plaintiff. Falsehood of the claim of the 1st defendant was writ large on the face of it. The trial court could have also compared the signatures of the 1st defendant as provided in Section 73 of the Indian Evidence Act. Section 73 is reproduced as under:

"73. Comparison of signature, writing or seal with others admitted or proved.-In order to ascertain whether a signature, writing, or seal is that of the person by whom it purports to have been written or made, any signature, writing or seal admitted or proved to the satisfaction of the court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing, or seal has not been produced or proved for any other purpose. The court may direct any person present in court to write any words or figures for the purpose of enabling the court to compare the words or figures so written with any words or figures alleged to have been written by such person. This section applies also, with any necessary modifications, to finger impressions."

34. The Supreme Court in the case of Ajay Kumar Parmar v. State of Rajasthan, reported in (2012) 12 SCC 406 [LQ/SC/2012/861] has held as under :

24. Evidence of identity of handwriting has been dealt with by three sections of the Evidence Act, 1872 (hereinafter referred to as "the Evidence Act") i.e. Sections 45, 47 and 73. Section 73 of the said Act provides for a comparison made by the court with a writing sample given in its presence, or admitted, or proved to be the writing of the person concerned. (Vide Ram Chandra v. State of U.P., Ishwari Prasad Misra v. Mohd. Isa, Shashi Kumar Banerjee v. Subodh Kumar Banerjee Fakhruddin v. State of M.P. and State of Maharashtra v. Sukhdev Singh.)

25. In Murari Lal v. State of M.P., this Court, while dealing with the said issue, held that, in case there is no expert opinion to assist the court in respect of handwriting available, the court should seek guidance from some authoritative textbook and the court's own experience and knowledge, however even in the absence of the same, it should discharge its duty with or without expert, with or without any other evidence.

26. In A. Neelalohithadasan Nadar v. George Mascrene, this Court considered a case involving an election dispute regarding whether certain voters had voted more than once. The comparison of their signatures on the counterfoil of the electoral rolls with their admitted signatures was in issue. This Court held that in election matters when there is a need of expeditious disposal of the case, the court takes upon itself the task of comparing the signatures, and thus it may not be necessary to send the said signatures for comparison to a handwriting expert. While taking such a decision, reliance was placed by the Court, on its earlier judgments in State (Delhi Admn.) v. Pali Ram and Ram Pyaralal Shrivastava v. State of Bihar.

27. In O. Bharathan v. K. Sudhakaran, this Court considered a similar issue and held that the facts of a case will be relevant to decide where the court will exercise its power for comparing the signatures and where it will refer the matter to an expert. The observations of the Court are as follows : (SCC p. 713, para 18)

"18. The learned Judge in our view was not right ... taking upon himself the hazardous task of adjudicating upon the genuineness and authenticity of the signatures in question even without the assistance of a skilled and trained person whose services could have been easily availed of. Annulling the verdict of popular will is as much a serious matter of grave concern to the society as enforcement of laws pertaining to criminal offences, if not more. Though it is the province of the expert to act as Judge or jury after a scientific comparison of the disputed signatures with admitted signatures, the caution administered by this Court is to the course to be adopted in such situations could not have been ignored unmindful of the serious repercussions arising out of the decision to be ultimately rendered."

(See also Lalit Popli v. Canara Bank, Jagjit Singh v. State of Haryana, Thiruvengadam Pillai v. Navaneethammal and G. Someshwar Rao v. Samineni Nageshwar Rao.)

28. The opinion of a handwriting expert is fallible/liable to error like that of any other witness, and yet, it cannot be brushed aside as useless. There is no legal bar to prevent the court from comparing signatures or handwriting, by using its own eyes to compare the disputed writing with the admitted writing and then from applying its own observation to prove the said handwritings to be the same or different, as the case may be, but in doing so, the court cannot itself become an expert in this regard and must refrain from playing the role of an expert, for the simple reason that the opinion of the court may also not be conclusive. Therefore, when the court takes such a task upon itself, and findings are recorded solely on the basis of comparison of signatures or handwritings, the court must keep in mind the risk involved, as the opinion formed by the court may not be conclusive and is susceptible to error, especially when the exercise is conducted by one, not conversant with the subject. The court, therefore, as a matter of prudence and caution should hesitate or be slow to base its findings solely upon the comparison made by it. However, where there is an opinion whether of an expert, or of any witness, the court may then apply its own observation by comparing the signatures, or handwritings for providing a decisive weight or influence to its decision.

35. Thus, the Trial Court should be slow in giving findings on the basis of comparison made by it. However, that does not mean, that the Trial Court cannot compare the signatures in order to appreciate the other evidence available on record. In other words, the comparison done by the Court may not be a sole ground to accept or reject a document, but the comparison can always be done to appreciate the other evidence which is already on record.

36. In the present case, this Court has already come to a conclusion that the agreement to sell, Ex. P.1 was executed by the defendant and therefore, the burden to disprove the same had shifted onto the shoulders of defendant. The defence of the defendant was that the agreement to sell, Ex. P.1 is a forged document and does not contain his signatures. Even then, he did not move an application for comparison of his signatures on the disputed document by an expert. Under these circumstances, if the First Appellate Court in order to appreciate the agreement to sell, Ex. P.1 has made comparison of disputed signatures with admitted signatures, i.e., the ordersheets signed by the defendant, then it cannot be said that the First Appellate Court had committed any mistake by comparing the signatures under Section 75 of Evidence Act.

37. Thus, the Second Substantial Question of Law is also answered in Negative.

38. Ex consequenti, the Judgment and Decree dated 10-12-2004 passed by 12th Additional District Judge (Fast Track Court), Jabalpur in R.C.A. No. 19A/2004 is hereby affirmed.

39. The Appeal fails and is hereby Dismissed.

Advocate List
  • NONE

  • NONE

Bench
  • HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA
Eq Citations
  • LQ
  • LQ/MPHC/2023/513
Head Note

1. Limitation Act — Non-residents — Tax Deducted at Source (TDS) — Question of limitation if survived — TDS held to be deductible on foreign salary payment as a component of total salary paid to an expatriate working in India, in Eli case, (2009) 15 SCC 1 — Hence, held, question whether orders under Ss. 201(1) & (1-A) were beyond limitation purely academic in these circumstances as question would still be whether assessee(s) could be declared as assessee(s) in default under Section 192 read with Section 201 of the Income Tax Act, 1961.\n 4. Further, we are informed that the assessee(s) have paid the differential tax. They have paid the interest and they further undertake not to claim refund for the amounts paid. Before concluding, we may also state that, in Eli Lilly & Co. (India) (P) Ltd.1 vide para 21, this Court has clarified that the law laid down in the said case was only applicable to the provisions of Section 192 of the Income Tax Act, 1961.\n 5. Leaving the question of law open on limitation, these civil appeals filed by the Department are disposed of with no order as to costs.\n(Paras 3 and 5)\n