ATMA RAM versus CHARANJIT SINGH

[2020] 3 S.C.R. 697

ATMA RAM

CHARANJIT SINGH

(Special Leave Petition (C) No. 27598 of 2016)

FEBRUARY 10, 2020

[N. V. RAMANA AND V. RAMASUBRAMANIAN, JJ.]

Code of Civil Procedure, 1908 – s.149; Or. VI, r.17 –Respondent agreed to sell immovable property to petitioner underan agreement entered in 1994 – Earnest money was paid – Petitionerissued legal notice in 1996 claiming that when the date fixed forspecific performance (07.10.96) arrived, the respondent disclosedabout the pendency of some civil litigation with third party, as animpediment for execution of sale deed – Petitioner filed suit in 1999for mandatory injunction – Respondent sought its dismissal on theground that said suit was not maintainable for enforcing specificperformance of an agreement of sale – Trial Court directed thepetitioner to pay requisite court fee to overcome said technicalobjection – Petitioner paid deficit court fee – Trial court decreedthe suit – Upset by First Appellate Court – Confirmed by High Court– Held: If the suit was actually one for specific performance, thepetitioner ought to have at least valued the suit on the basis of saleconsideration mentioned in the agreement – But he did not – If thesuit was only for mandatory injunction (which it actually was), onlyrecourse open to the petitioner was to seek an amendment u/Or. VI,r.17 – If such an application had been filed, it would have eitherbeen dismissed on limitation or even if allowed, the prayer forspecific performance, inserted by amendment, would not have been,as matter of course, taken as relating back to the date of theplaint – Thus, short-cut was found by the petitioner to retain theplaint as such, but to seek permission to pay deficit court fee, asthough what was filed in the first instance was actually suit forspecific performance – Such dubious approach should not beallowed especially in suit for specific performance, as the reliefof specific performance is discretionary u/s.20, 1963 Act – TrialCourt, by convoluted logic, chose to treat the suit as one for specificperformance and permitted the petitioner to pay deficit court fee –High Court’s approach in non suiting the petitioner on ground of

CDEF

Alimitation, despite the original defect having been cured and thesame having attained finality, may be faulty – But the petitionershould not be allowed to take its advantage by taking shelter u/s.149 especially when he filed the suit (after more than three yearsof the date fixed under the agreement) only as one for mandatoryinjunction, valued the same as such and paid court fee accordingly,Bbut chose to pay proper court fee after being confronted with anapplication for the dismissal of the suit – First Appellate Court rightlyreversed the decree of specific performance granted by Trial Court– High Court right in upholding the same – Specific Relief Act,1963 – ss.16(c), 20.C

Dismissing the Special Leave Petition, the Court

HELD: 1.1 It is true that Section 149 CPC confers adiscretion upon the Court to allow person, at any stage, to paythe whole or part of the court fee actually payable on the document,but which has not been paid. Once the Court exercises such aDdiscretion and payment of court fee is made in accordance withthe said decision, the document, under Section 149, shall havethe same force and effect as if such fee had been paid in the firstinstance. But in this case, the question was not merely one oflimitation. The relief sought in the plaint as it was originallyEpresented, was for mandatory injunction to direct the respondentto receive the balance sale consideration and to get documentof transfer effected in favour of the petitioner. The petitioner/plaintiff was obviously conscious of the nature of the relief prayedfor by him. This is why he valued the relief claimed in the suit atRs. 250/- and paid fixed court fee of Rs. 25/-. Instead ofFaddressing the issue as to whether the petitioner could indirectlyseek specific performance of an agreement of sale, by couchingthe relief as one for mandatory injunction and paying fixed courtfee as payable in suit for mandatory injunction, the Trial Court,by convoluted logic, chose to treat the suit as one for specificGperformance and permitted the petitioner to pay deficit court fee.As matter of fact, if the suit was actually one for specificperformance, the petitioner ought to have at least valued thesuit on the basis of the sale consideration mentioned in theagreement. But he did not. If the suit was only for mandatoryinjunction (which it actually was), the only recourse open to theH

petitioner was to seek an amendment under Order VI, Rule 17CPC. If such an application had been filed, it would have eitherbeen dismissed on the ground of limitation or even if allowed,the prayer for specific performance, inserted by way ofamendment, would not have been, as matter of course, takenas relating back to the date of the plaint. Therefore, short-cutwas found by the petitioner/plaintiff to retain the plaint as such,but to seek permission to pay deficit court fee, as though whatwas filed in the first instance was actually suit for specificperformance. Such dubious approach should not be allowedespecially in suit for specific performance, as the relief of specificperformance is discretionary under Section 20 of the SpecificRelief Act, 1963. [Paras 5-7][703 G-H; 704 A-H; 705 A-C]

K.Raheja Constructions Ltd. v. Alliance Ministries(1995) Suppl. 3 SCC 17 : [1995] 3 SCR 960; TarlokSingh v. Vijay Kumar (1996) 8 SCC 367 : [1996] 3SCR 879; Van Vibhag Karamchari Griha NirmanSahkari Sanstha Maryadit v. Ramesh Chander (2010)14 SCC 596 : [2010] 12 SCR 1045 – referred to.

1.2 It may be true that the approach of the High Court innon suiting the petitioner/plaintiff on the ground of limitation,despite the original defect having been cured and the same havingattained finality, may be faulty. But the petitioner would not beallowed to take advantage of the same by taking shelter underSection 149 CPC, especially when he filed the suit (after morethan three years of the date fixed under the agreement of sale)only as one for mandatory injunction, valued the same as suchand paid court fee accordingly, but chose to pay proper court feeafter being confronted with an application for the dismissal of thesuit. Clever ploys cannot always pay dividends. The fact that thepetitioner chose to issue legal notice dated 12.11.96 and thefact that the petitioner created an alibi in the form of an affidavitexecuted before the Sub-Registrar on 7.10.1996 (marked asExhibit P-2) to show that he was present before the Sub-Registrarfor the purpose of completion of the transaction, within the timestipulated for its performance, was not sufficient to conclude thatthe petitioner continued to be ready and willing even after threeyears, on 13.10.1999 when the plaint was presented. No

Aexplanation was forthcoming from the petitioner for the long delayof three years, in filing the suit (on 13.10.1999) after issuing alegal notice on 12.11.1996. The conduct of plaintiff is verycrucial in suit for specific performance. person who issues alegal notice on 12.11.1996 claiming readiness and willingness,but who institutes suit only on 13.10.1999 and that too onlyBwith prayer for mandatory injunction carrying fixed court feerelatable only to the said relief, will not be entitled to thediscretionary relief of specific performance. The first AppellateCourt rightly reversed the decree of specific performance grantedby the Trial Court and the High Court was right in upholding theCjudgment of the first Appellate Court. [Paras 8-10][705 A-H;706 A-C]

Case Law Reference

CIVIL APPELLATE JURISDICTION: Special Leave Petition(Civil) No. 27598 of 2016.

From the Judgment and Order dated 20.05.2016 of the High CourtEof Punjab and Haryana at Chandigarh in RSA No. 1244 of 2013.

Basant R., Sr. Adv., Samar Vijay Singh, Adv. for the Petitioner.

Soumen Talukdar, R.D. Rathore, Varinder Kumar Sharma, Advs.for the Respondent.FThe Judgment of the Court was delivered by

V. RAMASUBRAMANIAN, J.

1. The holder of an agreement for the purchase of an immovableproperty, whose suit for mandatory injunction (construed by the TrialGCourt as suit for specific performance) was decreed by the Trial Court,but which decree was upset by the First Appellate Court and confirmedon second appeal by the High Court, has come up with the presentSpecial Leave Petition.

2. We have heard Shri R Basant, learned senior counsel appearingfor the petitioner and Shri Soumen Talukdar, learned counsel appearingHfor the respondent.

3. The brief facts essential for the disposal of the special leavepetition are as follows;

(i)On 12.10.1994, an agreement was entered into by thepetitioner with the respondent. By this agreement, therespondent agreed to sell to the petitioner, the land and factorypremises at Plot No.90, Sector-21, Industrial Area, Bhiwani,Bwith the land measuring about 1250 sq. yards. The totalsale consideration fixed under the agreement wasRs. 4,38,000/-. An earnest money of Rs. 1,00,000/- was paidby the petitioner to the respondent at the time of execution ofthe agreement. The date for performance of the contractCwas fixed under the agreement as 07.10.1996.

(ii)The petitioner issued legal notice dated 12.11.1996 claimingthat when the date fixed for specific performance arrived,he approached the respondent for the completion of thetransaction, and that at that time, the respondent disclosedabout the pendency of some civil litigation with third party,as an impediment for the execution of the sale deed.Therefore, the petitioner claimed in the legal notice that therespondent should furnish the details of all the litigationpending in respect of the said property and that if no litigationwas pending, the respondent should come forward to executethe sale deed within 15 days.

(iii) As there was no response to the legal notice, the petitionerfiled civil suit in CS No. 240 of 1999 in the Court of theAdditional Civil Judge, Senior Division, Bhiwani. The prayermade in the suit was for mandatory injunction to direct therespondent to execute all documents of transfer of theproperty in question after receiving the balance saleconsideration. It is relevant to note here that since the suitwas filed only for the relief of mandatory injunction, thepetitioner valued the suit only at Rs. 250 and paid fixedcourt fee of Rs. 25.

(iv) The respondent filed written statement denying everythingincluding the execution of the agreement. He also questionedthe maintainability of the suit in the form in which it wasfiled. The respondent further claimed that the suit was barredby limitation.

702SUPREME COURT REPORTS

[2020] 3 S.C.R.

A(v) On the basis of the pleadings, the Trial Court framed eightissues for consideration on 12.10.2002. These issues wereas follows:

“(1)Whether the plaintiff agreed to purchase the suitproperty from the defendant for sum ofRs. 4,38,000/- and paid Rs.1,00,000/- as earnestmoney on 12.10.1994 as alleged? OPP

(2)Whether the plaintiff is entitled to relief of mandatoryinjunction as prayed for? OPP

(3)Whether the plaintiff has no locus-standi to file thesuit? OPD

(4)Whether the plaintiff has no cause of action to filethe suit? OPD

(5)Whether the suit is not maintainable in the presentform? OPD

(6)Whether the suit is bad for mis-joinder and non-joinderof necessary parties? OPD

(7)Whether the plaintiff is estopped by his own act andconduct from filing the suit? OPD

(8)Relief.”

(vi) After filing the written statement, the respondent also tookout an application for the dismissal of the suit on the groundthat suit for mandatory injunction was not maintainable forenforcing specific performance of an agreement of sale. TheFsaid application was disposed of by the Trial Court by verycurious order, dated 09.08.2003, holding that the suit was infact one for specific performance of an agreement of saleand that the technical objection regarding the maintainabilitycould be overcome by directing the petitioner/plaintiff to payGthe requisite court fee. Accordingly, Trial Court directed thepetitioner/plaintiff to make good the deficit court fee on orbefore 08.09.2003.

(vii) Unfortunately, the respondent did not challenge the aforesaidorder of the Trial Court dated 09.08.2003. As consequence,Hthe petitioner/plaintiff paid the deficit court fee and the trialcourt chose to treat the suit as one for specific performance.

(viii) After so overcoming major hurdle, the Trial Court decreedthe suit by judgment dated 03.02.2006, directing the petitionerto pay the balance of sale consideration within one monthand directing the respondent to get the suit property transferredin the name of the petitioner, directly from HUDA.

(ix) Aggrieved by the judgment and decree, the respondent fileda regular first appeal in Civil Appeal No. 181 of 2006, on thefile of Additional District Court, Bhiwani. By judgment dated02.01.2013, the District Court allowed the appeal and setaside the judgment of the Trial Court, thereby dismissing thesuit.

(x) Aggrieved by the judgment of the First Appellate Court, thepetitioner filed second appeal in RSA No.1244 of 2013 onthe file of the High Court of Punjab & Haryana at Chandigarh.The High Court dismissed the second appeal by judgmentdated 20.05.2016. It is against the said judgment and decreethat the plaintiff has come up with the above special leavepetition.

4. The main fulcrum of the argument of Shri R. Basant, learnedsenior counsel appearing for the petitioner is that by the order dated9.08.2003, the Trial Court chose to treat the suit for mandatory injunctionas one for specific performance and directed the petitioner/plaintiff topay the deficit court fee and that the petitioner also complied with thesaid order. Therefore, it is contended that by virtue of Section 149 of theCode of Civil Procedure, such payment would have the same force andeffect as if such fee had been paid in the first instance itself. But, theHigh Court held the suit as time barred. This, according to the learnedsenior counsel for the petitioner, is contrary to law in the teeth of section149 of the Code. It is his further contention that the effect of Section16(c) of the Specific Relief Act, 1963 was not considered in the properprospective by the High Court with particular reference to the facts ofthe case and that, therefore, the judgment of the High Court stood vitiated.

5. We have carefully considered the above contentions. It is truethat Section 149 CPC confers discretion upon the Court to allow aperson, at any stage, to pay the whole or part of the court fee actuallypayable on the document, but which has not been paid. Once the Courtexercises such discretion and payment of court fee is made inaccordance with the said decision, the document, under Section 149,

[2020] 3 S.C.R.

Ashall have the same force and effect as if such fee had been paid in thefirst instance.

6. But in this case, the question was not merely one of limitation.As we have stated earlier, the suit agreement of sale was dated12.10.1994. According to the petitioner, the last date fixed for theBperformance of the obligations under the contract, was 7.10.1996. Alegal notice was issued by the petitioner on 12.11.1996. But the plaintitself was presented only on 13.10.1999, which was beyond three yearsof the date 7.10.1996, fixed under the agreement of sale for theperformance of the contract. (Though the petitioner has claimed beforeus that the plaint was presented on 3.10.1999, the copy of the judgmentCas well as the decree of the Trial Court indicate the date of presentationof the plaint as 13.10.1999). The relief sought in the plaint as it wasoriginally presented, was for mandatory injunction to direct therespondent to receive the balance sale consideration and to get documentof transfer effected in favour of the petitioner. The petitioner/plaintiffDwas obviously conscious of the nature of the relief prayed for by him.This is why he valued the relief claimed in the suit at Rs.250/- and paida fixed court fee of Rs.25/-. The respondent took an objection in hiswritten statement, to the maintainability of the suit, in the form in whichit was filed. Therefore, the Trial Court also framed an issue as to whetherthe suit was not maintainable in the present form, as issue No.5. It wasEonly after issues were framed on 12.10.2002 that the Trial Court took upthe application filed by the respondent for the dismissal of the suit. It isin that application that the Trial Court passed the order dated 09.08.2003permitting the petitioner/plaintiff to pay the deficit court fee by treating

the prayer made as one for specific performance. Instead of addressing

Fthe issue as to whether the petitioner could indirectly seek specificperformance of an agreement of sale, by couching the relief as one formandatory injunction and paying fixed court fee as payable in suit formandatory injunction, the Trial Court, by convoluted logic, chose totreat the suit as one for specific performance and permitted the petitionerto pay deficit court fee.G

7. As matter of fact, if the suit was actually one for specificperformance, the petitioner ought to have at least valued the suit on thebasis of the sale consideration mentioned in the agreement. But he didnot. If the suit was only for mandatory injunction (which it actually was),the only recourse open to the petitioner was to seek an amendmentH

under Order VI, Rule 17 CPC. If such an application had been filed, itwould have either been dismissed on the ground of limitation (K.RahejaConstructions Ltd., vs. Alliance Ministries[1]) or even if allowed, theprayer for specific performance, inserted by way of amendment, wouldnot have been, as matter of course, taken as relating back to the dateof the plaint (Tarlok Singh vs. Vijay Kumar[2], Van Vibhag KaramchariGriha Nirman Sahkari Sanstha Maryadit vs. Ramesh Chander[3]).Therefore, short-cut was found by the petitioner/plaintiff to retain theplaint as such, but to seek permission to pay deficit court fee, as thoughwhat was filed in the first instance was actually suit for specificperformance. Such dubious approach should not be allowed especiallyin suit for specific performance, as the relief of specific performanceis discretionary under Section 20 of the Specific Relief Act, 1963.

8. It may be true that the approach of the High Court in nonsuiting the petitioner/plaintiff on the ground of limitation, despite theoriginal defect having been cured and the same having attained finality,may be faulty. But we would not allow the petitioner to take advantageof the same by taking shelter under Section 149 CPC, especially whenhe filed the suit (after more than three years of the date fixed under theagreement of sale) only as one for mandatory injunction, valued thesame as such and paid court fee accordingly, but chose to pay propercourt fee after being confronted with an application for the dismissal ofthe suit. Clever ploys cannot always pay dividends.

9. Coming to the second aspect revolving around Section 16(c), alook at the judgment of the Trial Court would show that no issue wasframed on the question of readiness and willingness on the part of thepetitioner/plaintiff in terms of Section 16(c) of the Specific Relief Act,1963. The fact that the petitioner chose to issue legal notice dated12.11.1996 and the fact that the petitioner created an alibi in the form ofan affidavit executed before the Sub-Registrar on 7.10.1996 (markedas Exhibit P-2) to show that he was present before the Sub-Registrarfor the purpose of completion of the transaction, within the time stipulatedfor its performance, was not sufficient to conclude that the petitionercontinued to be ready and willing even after three years, on 13.10.1999when the plaint was presented. No explanation was forthcoming from

1 1995 Supp l. (3) SCC 17

2 1996 (8) SCC 367

3 2010 (14) SCC 596

Athe petitioner for the long delay of three years, in filing the suit (on13.10.1999) after issuing legal notice on 12.11.1996. The conduct of aplaintiff is very crucial in suit for specific performance. person whoissues legal notice on 12.11.1996 claiming readiness and willingness,but who institutes suit only on 13.10.1999 and that too only with aprayer for mandatory injunction carrying fixed court fee relatableBonly to the said relief, will not be entitled to the discretionary relief ofspecific performance.