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Supreme Court of India

RATHNAVATHI & ANOTHERversusKAVITA GANASHAMDAS

Citation
2014 INSC 751
Decided
29 October 2014
Disposal
Disposed off

Holding

The Supreme Court held that the bar under Order II Rule 2 does not apply because the two suits arise from different causes of action, and the specific performance suit was filed within the limitation period, thereby upholding the High Court’s decree for specific performance and the ancillary directions.

Summary

The plaintiff entered into a 1989 agreement to purchase a house from defendant No.2, paid the full consideration, but the seller failed to execute the sale deed. The plaintiff filed two suits: one for permanent injunction to prevent dispossession by defendant No.1 and No.2, and another for specific performance of the sale agreement. The trial court dismissed both suits, but the Karnataka High Court reversed that decision, granting specific performance, ordering joint execution of the deed, and directing the plaintiff to pay an additional Rs.4 lakh while ordering defendant No.2 to refund the same amount to defendant No.1. On appeal, the Supreme Court held that the bar under Order II Rule 2 of the CPC does not apply because the suits are based on distinct causes of action, and that the specific performance suit was filed within the three‑year limitation period as per Article 54 of the Limitation Act. The Court also affirmed that time was not the essence of the contract, justifying specific performance, and upheld the High Court’s directions, including the refund order under Article 142 of the Constitution.

Issues considered

  • The applicability of the bar under Order II Rule 2 of the CPC to the plaintiff's suit for specific performance after filing a suit for permanent injunction.
  • Whether the suit for specific performance is barred by the limitation period prescribed in Article 54 of the Limitation Act, 1963.
  • Whether time was of the essence of the 1989 sale agreement.
  • Whether the High Court was justified in granting specific performance and directing joint execution of the sale deed.
  • Whether the contract between the original owner and the subsequent purchaser is frustrated, requiring a refund of consideration.

Legislation cited

Subjects

Specific performancePermanent injunctionOrder II Rule 2 CPCLimitation ActTime not essenceSale of immovable propertyFrustrated contractRefund of considerationArticle 142 ConstitutionCivil appeals

Judgment

                        [2014] 13 S.C.R.120


A                   RATHNAVATHI &ANOTHER
                                  V.

                     KAVITA GANASHAMDAS
               (Civil Appeal Nos. 9949-9950 of 2014)
B
                         OCTOBER 29, 2014
       [FAKKIR MOHAMED IBRAHIM KALIFULLAAND
                  ABHAY MANOHAR SAPRE, JJ.]
        Specific Performance - Suit for specific performance
C and suit for permanent injunction- Sale agreement of house
  by defendant no. 2-original owner in favour of plaintiff -
  Payment of consideration amount as also balance amount
  by plaintiff, however, non-execution of sale deed by defendant
  no. 2 - Thereafter, attempt by defendant no. 2 along with
D defendant no. 1 to dispossess plaintiff from the house - Suit
  for permanent injunction by plaintiff against defendants -
  Subsequently, cancellation of sale agreement by defendant
  no. 2 and house sold to defendant no. 1-subsequent
E purchaser for consideration - Suit for specific performance
  of agreement by plaintiff - Both suits set aside by the trial
  court - However, suits decreed against the defendants by
  the High Court with the direction to the defendants to execute
  the sale deed in favour of the plaintiff and the plaintiff to pay
F additional sum of Rs. 4 lacs to defendant no. 2- On appeal,
  held: Bar contained in Or. II, r. 2 not attracted so as to non-
  suit the plaintiff from filing the suit for specific performance
  of the agreement because of the different cause of action to
  claim the respective reliefs as also ingredients for claiming
G the reliefs, thus, could be filed simultaneously - Time was
  not essence of agreement for its performance - Suit filed by
  plaintiff for specific performance of the agreement was within
  limitation of three years prescribed u!Art. 54 which began when
  the plaintiff noticed that the defendant refused the
H
                                   120
        RATHNAVATHI v. KAVITAGANASHAMDAS                       121


 performance of the agreement- On facts, High Court justified A
 in granting specific performance of agreement in plaintiff's
 favour- Direction issued by the High Court upheld- However,
 on account of frustration of contract between defendant no. 2
 and defendant no. 1, defendant no. 2 directed to refund Rs.
 4 lacs to defendant no. 1, to do substantial justice to all the B
·parties - Code of Civil Procedure, 1908 - Or. II, r. 2 -
 Limitation Act, 1963 -Art. 54.
      Disposing of the appeals, the Court
       HELD: 1.1 In the instant case, the bar contained in C
Or. II, r. 2 CPC is not attracted because of the distinction
-in the cause of action for filing the two suits. The suit for
 permanent injunction was based on a threat given to the
 plaintiff by the defendants to dispossess her from the
 suit house. The suit for specific performance of D
 agreement was based on non-performance of agreement
 by defendant no.2 in plaintiff's favour despite giving
 legal notice to defendant no.2 to perform her part.
 Therefore, both the suits were founded on different
 causes of action and thus, could be filed simultaneously. E
 [Paras 29, 30][135-C-F]
      1.2 Even the ingredients to .file the .suit for
permanent injunction are different than that ohhe suit
for specific performance of agreement. In case of former, F
plaintiff is required to make out-the existence of prima
facie case, balance of convenience and irreparable loss
likely to be suffered by the plaintiff on facts with reference
to the suit property as provided in Section 38 of the
Specific Relief Act, 1963 read with Order 39 Rule 1 & 2 G
CPC. Whereas, in case of the later, plaintiff is required to
plead and prove her continua.us readiness and
willingness to perform her part of agreement and to
further prove that defendant failed to perform her part of
                                                               H
122        SUPREME COURT REPORTS              [2014] 13 S.C.R.


A the agreement as contained in Section 16 of the Act.
  [Paras 30, 31][135-F-H; 136-A-B]
            1.3 The basic requirement in relation to same cause
      of action is not made out as also the ingredients for
      claiming the reliefs is different, the defendants
8
      (appellants) are not entitled to raise a plea of bar·
      contained in Order II Rule 2 of CPC to successfully non-
      suit the plaintiff from prosecuting her suit for specific
      performance of the agreement against the defendants.
c     [Para 33][136-C-D]
        2.1 Mere reading of Article 54 of the Limitation Act
  would show that if the date is fixed for performance of
  the agreement, then non-compliance of the agreement
  on the date would give a cause of action to file suit for
D specific performance within three years from the date
  so fixed. However, when no such date is fixed, limitation
  of three years to file a suit for specific performance would
  begin when the plaintiff has noticed that the defendant
  has refused the performance of the agreement. [Para 49]
E [143-D-E]
         2.2 Reading the clauses of the agreement together,
  it is clear that the time was not the essence of agreement
  for its performance and the parties too did not intend
F that it should be so be~ause even after making balance
  payment after the expiry of lease period, which was to
  expire in 1995, defendant no. 2 as owner had to make
  efforts to transfer the land in the name of plaintiff. That
  apart, there was no specific clause in the agreement,
G which provided for completion of its execution on or
  before any specific date. [Para 46][142-E-F]
       2.3 The instant case does not fall in the first
  category of Article 54 of the Limitation Act because no
H date was fixed· in the agreement for its performance. The
        RATHNAVATHI v. KAVITA GANAS HAM DAS                  123


case would thus, be governed by the second category A
viz., when plaintiff has a notice tfiat performance is
refused. The findings of the High Court are upheld. On
facts, the suit filed by the plaintiff for specific performance
of the agreement was within limitation prescribed under
Article 54 of the Limitation Act. [Paras 50, 52][143-F; B
144-B-C]
      3.1 Th.e High Court properly appreciated the
evidence for recording findings in plaintiff's favour that
she was ready and willing to perform her part of the         c
agreement and in fact did perform her part, firstly, by
paying Rs. 50,000/- as advance and then paid balance
of Rs. 3,00,000/-towards sale consideration to defendant
no.2; that plaintiff was placed in possession of the suit
house by defendant no. 2 pursuant to agreement; an.d,        o
lastly defendant no. 2 did not perform her part of the
agreement. [Para 58][145-E-F]_.
     3.2 The High Court while passing the decree
directed both the defendants i.e. owner of the suit house
(vendor) defendant no.2 and subsequent purchaser E
(defendant no. 1) to execute the sale deed of the suit
house jointly in favour of the plaintiff' to avoid any legal
complications, provided the plaintiff pays Rs. 4 lacs over
and above Rs. 3,50,000/- to the owner of suit house F
(defendant no. 2). The direction issued by the High Court
for execution of the sale deed is upheld.[Paras 62, 64]
[146-D-E; 147-B]
     3.3 The effect of execution of sale deed in plaintiff's
favour by the defendants in terms of decree would G
obviously result in cancellation of contract of sale of the
suit house between the owner-defendant no. 2 and
subsequent purchaser-defendant no. 1 because
defendant no.2 would not be in a position to sell the suit
house to defendant ·no.1 though she received Rs.4 lacs H
124      SUPREME COURT REPORTS             [2014] 13 S.O.R.


A from defendant no.1 for such sale of suit house in her
  favour. Thus, defendant no.2 is liable to refund Rs.4 lacs
  to defendant no.1 and is directed accordingly invoking
  power under Article 142 of the Constitution. [Paras 66,
  68, 69][147-D; G-H; 149·8-C)
B
       Virgo Industries (Eng.) P. Ltd. v. Venturetech
       Solutions P. Ltd. 2012 (7) SCR 933 : (2013) 1
       sec 625 - relied on.
        Gurbux Singh v. Bhooralal 1964 SCR 831 : AIR
c       1964 SC 1810; Gomathinayagam Pillai and Ors.
        v. Pallaniswami Nadar 1967 SCR 227 : AIR 1967
        SC 868; Govind Prasad Chaturvedi v. Hari Dutt
        Shastri andAnr. 1977 (2) SCR S77: (1977) 2 SCC
        539; Smt. Chand Rani v. Smt. Kamal Rani 1992
 D      (3) Suppl. SCR 798: (1993) 1 sec 519; K.S.
        Vidyanadam and Ors. v. Vairavan 1997 (1)
        SCR 993 : (1997) 3 SCC 1; K. Narendra v.
        Riviera Apartments (P) Ltd. 1999 (3) SCR 777:
        (1999) 5 SCC 77; Lala Durga Prasad and Anr. v.
 E      Lala Deep Chand and Ors. 1954 SCR 360: AIR
        1954 SC 75- referred to.
                        Case Law Reference:
         1964 SCR 831               referred to   Para 27
 F
         2012 (7) SCR 933           relied on     Para 28
         1967 SCR 227               referred to   Para 41
         1977 (2) SCR 877           referred to   Para 42
 G       1992 (3) Suppl. SCR 798 referred to      Para 43
         1997 (1) SCR 993           referred to   Para 43
         1999 (3) SCR 777           referred to   Para 43
         1954 SCR 360               referred to   Para 63
 H
         RATHNAVATHI v. KAVITA GANAS HAM DAS                        125


      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. A
· 9949-9950 of 2009.
      From the Judgment and Order dated 08-09-2011 of the
 High Court of Karnataka at Bangalore in RFA No. 1092/2009
 C/W. RFA No. 1094 of 2009.
                                                                    B
      Ms. Nalini Chidambaram, Sr. Adv., P.R. Ramasesh, H.S.
 Prashanth for the Appellants.
      P, Vishwanatha Shetty, Sr. Adv., Dr. Sushil Balwada,
 Sharan Thakur, Anirudh Deshmukh, Vijay Kumar Paradeshi, C
 Mahesh Thakur, Ms. Fara for the Respondent.
      The Judgment of the Court was delivered by
      ABHAY MANOHAR SAPRE, J. 1. Leave granted.
        ·2. The plaintiff filed two suits, one for specific D
 performance of agreement and other for grant of permanent
 injunction in relation to the suit house. The trial court vide
 common judgment and decree dated 16.10.2001 dismissed
 both the suits. The first appellate court, i.e., the High Court, in
 appeal, by impugned judgment and decree dated 08.09.2011 E
 reversed the judgment and decree of the trial court and decreed
 both the suits in appeal, against the defendants. Being
 aggrieved by the judgment and .decree. of the High Court,
 Defendants 1 and 3 have approached this Court in the instant
 civil appeals. -                                                    F
       3. The question arises for consideration in these appeals
 is whether the High Court was justified in allowing the first
 appeals preferred by the plaintiff, resulting in decreeing the
 two civil suits against defendants in relation to suit house?
                                                                    G
        4. In order to appreciate the controversy involved in the
 civil suits, and now in these appeals, it is necessary to state
 the relevant facts.

                                                                    H
126          SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A          5. For the sake of convenience, description of parties
      herein is taken from Original Suit No.223/2000.
       6. Defendant no.2 is the original owner of the suit house
  and defendant no: 1 is the subsequent purchaser of the suit
B house from defendant no.2.
           7. The dispute relates to a dwelling house bearing no.
      351 Block no.11, Matadahalli Extension, now known as R.T.
      Nagar Bangalore (hereinafter referred to as "the suit house").
       8. The suit house was purchased by defendant no. 2 from
C Bangalore Development Authority (in short "BOA") in a scheme.
  On 15.02.1989, Defendant no. 2 entered into an agreement
  (Annexure-P-1) with plaintiff for sale of suit house at a total
  consideration of Rs. 3,50,000/-. In terms of clause 2 of the
0 agreement, the plaintiff paid a sum of Rs. 50,000/- as advance
  towards sale consideration. These facts are not in dispute.
             9. On 07 .01.2000, the plaintiff filed a civil suit beiny OS
      No. 223/2000, initially against 3 defendants for seeking
      permanent injunction restraining the defendants jointly and
E     severally from interfering in plaintiffs possession over the suit
      house. In substance, case of the plaintiff was that she entered
      into an agreement on 15.02.1989 with defendant no. 2 to
      purchase the suit house for Rs. 3,50,000/- and paid a sum of
      Rs. 50,000/- to defendant no. 2 by way of advance towards
F     the sale consideration. Later, the plaintiff further paid the
      balance consideration of Rs. 3 Lacs towards the sale price
      and obtained receipts acknowledging the paymentso made.
      It was alleged that the plaintiff was accordingly placed in actual
G     physical possession of the suit house and since then she has
      been in possession of the suit house. It was alleged that she
      also made some improvements therein by spending money
      and is paying electricity and water charges etc. It was further
      alleged that the plaintiff was and has always been ready and
H     willing to perform her part of the agreement to get the sale
        RATHNAVATHI v. KAVITA GANAS HAM DAS                       127
            [ABHAY MANOHAR SAPRE, J.]

deed executed in her favour after having performed her part of A
the contract. However, defendant no. 2, forthe reasons best
known to her, did not execute the sale deed despite having
received the full sale consideration from the plaintiff. It was
alleged that defendant no. 1, who is a total stranger to the suit
house and having no right, title and interest in the suit house, B
on 2.1.2000 visited the suit house along with defendant no. 2
and some other unwanted elements and threatened the plaintiff
to dispossess her from the suit house. It was also alleged that
on 8.1.2000, defendant nos. 1 and 2 again visited and
attempted to assault the plaintiff and unsuccessfully attempted C
to commit trespass in the suit house.
       10. On seeing the hostile attitude of defendant nos. 1
and 2 and their associates, the plaintiff immediately lodged a
complaint in the concerned police station. Since police D
authorities did not take any action, which was required of, the
plaintiff filed the aforesaid civil suit for permanent injunction
restraining the defendants from interfering in her peaceful
possession over the suit house. It was submitted that the plaintiff
has a prima facie case, so also the balance of convenience E
and irreparable loss in her favour, which entitles her to claim
permanent injunctior'l against the defendar:its in relation to the
suit house. The plaintiff also averred that she reserved her right
to file a suit for specific performance cif agreement against
the defendants.                                                     F
      11. The aforesaid. suit was contested by defendant nos.
1 and 2. While admitting the ownership of defendant no. 2
over the suit house and the fact of entering into an agreement
with the plaintiff for its sale to the plaintiff and further while G
admitting the receipt of advance payment of Rs 50, 000/- from
the plaintiff, the defendants denied all material allegations made
in the plaint. It was alleged that the plaintiff did not pay the
balance consideration as alleged. It was also alleged that
                                                                   H
128         SUPREME COURT REPORTS                 [2014] 13 S.C.R.


A defendant no. 2 on 25.10.1995 cancelled the agreement dt
  15.02.1989 by sending legal notice to the plaintiff and then
  sold the suit house to defendant no. 1 on 09.02.1998 for Rs. 4
  lacs and placed her in its possession.
           12. On 31.03.2000, the plaintiff filed another civil suit
8
      being OS No. 2334 of 2000 in the Court of City Civil Judge
      Bangalore against the defendants for specific performance of
      agreement dated 15.02.1989 in relation to the suit house.
        13. After pleading the same facts, which are set out
C above, the plaintiff further alleged that she has performed her
  part of the agreement by paying entire sale consideration of
  Rs. 3,50,000/- and has been in possession of the suit house.
  It was alleged that on the one hand, defendant no. 2, despite
  having received full sale consideration, did not perform her
D part of the agreement by not getting the suit house transferred
  in plaintiff's favour as per clause 3 of the agreement and by
  doing the acts which she was expected to do in terms of
  agreement, and on the other hand, tried to interfere in plaintiff's
  lawful possession over the suit house.
E
         14. T.his led the plaintiff to serve upon defendant no.2 a
  legal notice dated 6.3.2000 thereby calling upon defendant
  no.2 to execute the sale deed in relation to suit property in
  plaintiff's favour. Since despite service of legal notice,
F defendant no. 2 failed to execute the same, suit for specific
  performance was also filed. The plaintiff then by way of
  amendment also sought to add one prayer for cancellation of
   sale deed alleged to have been executed by defendant no. 2
  in favour of defendant no. 1. This amendment was allowed.
 G       15. The defendants contested the civil suit. While
   admitting the execution of agreement dated 15.02.1989 with
   the plaintiff for sale of suit house for Rs. 3,50,000/-and also
   admitting payment of Rs. 50,000/- by the plaintiff to defendant
 H no. 2, the defendants denied all other material allegations and
         RATHNAVATHI v. KAVITAGANASHAMDAS                           129
             [ABHAY MANOHAR SAPRE, J.]

inter alia alleged that since the plaintiff failed to pay the balance A
sale consideration of Rs. 3 lacs to defendant no. 2 in terms of
the agreement, defendant no. 2 on 25.10.1995 sent a legal
notice to the plaintiff cancelling the agreement dated 15.2.1989
and sold the suit house to defendant no. 1 on 09.02.1998 for
consideration and placed her in possession of the suit house. B
The defendants also alleged that defendant no. 1 was the bona
fide purchaser for value and hence her title canno~ be
questioned in the suit.
       16. The defendants also contested the suit on two legal c
grounds. Firstly, it was contended that the: suit was not
maintainable, as the bar contained in Order 11 Rule 2 of Code
of Civil Procedure, 1908 (hereinafter referred to as 'CPC')
did not permit the plaintiff to file the suit for specific performance
of agreement in question against the defendants. It was alleged o
that relief to claim specific performance of agreement was
available to the plaintiff when she filed the first suit (OS No.
223/2000) for permanent injunction against the defendants.
Yet, the plaintiff failed to claim the relief in the first suit,
consequently, the second suit filed to claim specific E
performance of agreement in question is hit by rigor containe·d
in Order II Rule 2 of CPC. It is now barred and hence liable to
be dismissed as not maintainable. Secondly, it was contended
that the suit is otherwise barred by limitation having been filed·
beyond the period of three years from the date of accrual of F
cause of action as provided in Article 54 of the Limitation Act,
1963. It was, therefore, contended that the suit is liable to be
dismissed as being barred by limitation, as well.
       17. The trial court consolidated both the suits for trial. G
Issues were framed. Parties adduced evidence. The trial court
vide judgment/decree dated 25.8.2009 though answered
some issues in plaintiff's favour but eventually dismissed the
civil suits. It was held that the agreement dated 15.02.1989
was executed between the plaintiff and defendant no. 2 for H
130        SUPREME COURT REPORTS                    [2014] 13 S.C.R.


A sale o.f suit house; that the plaintiff was not placed in possession
  of suit house pursuant to agreement in question; that the plaintiff
  was not ready and willing to perform her part of the agreement;
  that suit is barred by limitation; that the plaintiff was not entitled
  to claim the relief for specific performance of agreement; that
B the plaintiff was not entitled to claim the relief for grant of
  permanent injunction; that defendant no. 1 is a bona fide
  purchaser of the suit house for value; that the plaintiff was not
  entitled to challenge the sale deed dt. 9.2.1998, that the suit
  was hit.by the bar contained in Order II Rule 2 of CPC because
C the plaintiff did not obtain leave to file second suit for specific
  performance while filing the first suit for grant of permanent
  injunction against the defendants in relation to the suit house.
         18. Feeling aggrieved, the plaintiff filed two regular first
o appeals being R.F.A. Nos. 1092 of 2009 and 1094 of·2009
  before the High Court~ By common impugned judgmenU
  decree, the High Court allowed both the appeals, reversed
  the judgmenUdecree of the trial court and decreed both the
  civil suits by passing a decree for specific performance of
E agreement against the defendants in relation to suit house and
  also issued permanent injunction as claimed by the plaintiff.
  The High Court answered all the aforementioned issues in
  plaintiffs favour and against the defendants.
 F       19. The High Court in its judgment held that the plaintiff
   was in possession of suit house; that the plaintiff performed
   her part of the agreement; that the plaintiff paid the entire sale
   consideration of Rs. 3,50,000/- to defendant no. 2; that the
   plaintiff was ready and willing to perform her part of agreement;
 G that defendant no. 2 failed to perform her part of the agreement
   thereby rendering her liable to perform her part of agreement;
   and that subsequent sale even if made by defendant no. 2 in
   favour of defendant no. 1 was not binding on the plaintiff
   because it was not bona fide.
 H
         RATHNAVATHI v. KAVITAGANASHAMDAS                             131 ·
             [ABHAY MANOHAR SAPRE, J.]

      20. The High Court, however, after deciding the issues A
in favour of the plaintiff, directed that in order to weigh the
equities between the parties and keeping in view the price
escalation, which is unavoidable in present days, the plaintiff
will pay an additional sum of Rs. 4 lacs over and above Rs.
3,50,000/- to defendant no. 2 for obtaining sale deed in her B
favour.
      21. It is against this judgmenUdecree of the High Court,
the defendants have filed the present appeals by way of special
leave petitions.                                                      c
       22. Mrs. NaHni Chidambaram, learned Senior Counsel
appearing for the appellants (defendants) while assailing the
legality and correctness of the impugned judgment urged
various submissions. Firstly, she argued that the High Court
erred in allowing plaintiff's first appeals, as according to her,     D
both the appeals were liable to be dismissed by upholding the
judgment /decree of the trial court which had rightly dismissed
the suits. Secondly, she argued that second suit filed for
claiming specific performance of the agreement for sale of
suit house to the plaintiff was hit by bar contained in Order II      E
Rule 2 of. CPC for the reason that the plaintiff failed to secure
leave in her first suit and hence the second suit filed by the
plaintiff for grant of specific performance was not maintainable.
Thirdly, she argued that assuming the second suit was held            F
maintainable, even then it was barred by limitation prescribed
in Article 54 of the Limitation Act. It was pointed out that cause
of action to file suit for specific performance of contract against
the defendants arose in the year 1989 itself no sooner 60 days
period expired from the date of agreement as provided in              G
clause 2 of the agreement, whereas, the suit in question
seeking specific performance was filed in year 2000 and
hence, it was hopelessly barred applying the limitation
prescribed in Article 54. Fourthly, it was argued that in any
                                                                      H
132        SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A case, there was no case made out on evidence by the plaintiff
  for reversal of the findings relating to grant of specific
  performance of agreement because the plaintiff was neither
  ready nor willing to perform her part of the agreement and nor
  there was any evidence to hold in her favour on this material
B issue. Fifthly, she argued that there was no evidence to hold
  that the plaintiff was in possession of the suit house; rather
  there was enough evidence to hold that after sale of suit house
  by defendant no.2 to defendant no.1, it was defendant no.1,
  who was in possession. Therefore, it should have been held
C that the plaintiff was not in possession of th_e suit house, as
  was rightlYheld by the trial court.And, /ast/yshe argued that it
  should have been held with the aid of evidence that defendant
  no. 1 was bona fide purchaser of the suit house for value, as
  she purchased it afterthe owner i.e. defendant no. 2 cancelled
0
  the agreement dt 15.2.1989 and then sold the suit house to
  defendant no. 1.
         23. After arguing at length with reference to documents
   on record, learned counsel for the appellants contended that
 E impugned judgment/decree deserves to be set aside and that
   of the trial court be restored by dismissing both the S\,lits filed
   by the plaintiff. Learned counsel also relied upon certain
   decisions, which we shall refer later.
 F        24. Mr. P. Vishwanatha Shetty, learned senior counsel
   for the respondent (plaintiff) supported the impugned judgment
   /decree and contended that it does not call for any interference.
   According to learned senior counsel, all the findings recorded
   by the High Court, though of reversal, deserve to be upheld
 G because the High Court, in exercise of its first appellate powers
   under Section 96 of CPC, rightly appreciated the evidence
   and came to its independent conclusion which it could legally
   do and which it rightly did while allowing the two first appeals.
   Learned senior counsel urged that this Court while hearing
 H
         RATHNAVATHI v. KAVITA GANASHAMDAS                         133
             [ABHAY MANOHAR.SAPRE, J.]

 these appeals cannot and rather should not undertake the A
 exercise of appreciating the whole evidence again like that of
 the first appeal except to find out whether there is any apparent
 legal error in the impugned judgment so as to call for any
 interference by this Court~ Learned senior counsel submitted
 that no such error exists in the impugned judgment and hence B
 these appeals are liable to be dismissed.
       25. Having heard the learned counsel for the parties at
  length arid upon perusal of the record of the case, we find no
  merit in these appeals as in our considered opinion, the         c
  submissions urged by the learned senior counsel for the
. appellants, though argued ably, have no force.
        26. Coming first to the legal question as to whether bar
 contained in Order II Rule 2 of CPC is attracted so as to non-
 suit the plaintiff from filing the suit for specific performance of D
 the agreement, in our considered opinion, the bar is not
 attracted
       27. At the outset, we consider it apposite to take note of
 law laid down by the Constitution bench of this Court in Gurbux E
 Singh v. Bhooralal,AIR 1964SC1810, wherein this Court ·
 while explaining the true scope of Order II Rule 2 of CPC laid
 down the parameters as to how and in what circumstances, a
 plea should be invoked against the plaintiff. JusticeAyyangar
 speaking for the Bench held as under:                            F
       "In order that a plea of a bar under Order 2 Rule 2(3) of
      .the Civil
             .                                 .
                 Procedure Code should succeed the defendant
       who raises the plea m.ust make out (1) that the second
       suit was in respect of the same cause of action as that
       on which the previous suit was based; (2) that in respect G
       of that cause of action the plaintiff was entitled to more
       than one relief; (3)that being thus entitled to more than
       one relief the plaintiff, without leave obtained from the
       Court omitted to sue for the relief for which the second
                                                                  H.
134       SUPREME COURT REPORTS                    (2014] 13 S.C.R.


A        suit had been filed. From this analysis it would be seen
         that the defendant would have to establish primarily and
         to start with, the precise cause of action upon which the
         previous suit was filed, for unless there is identity between
         the cause of action on which the earlier suit was filed
B        and that on which the claim in the later suit is based there
         would be no scope forthe application of the bar ..... "
                                               (Emphasis su_pplied)

c         28. This Court has consistently followed the aforesaid
  . enunciation of law in later years and reference to only one of
    such recent decisions in Virgo Industries (Eng.) P. Ltd. Vs
    Venturetech Solutions P. Ltd., (2013) 1 SCC 625, would
    suffice, wherein this Court reiterated the principle of law in
0
    following words:
         'The cardinal requirement for application of the provisions
         contained in Order II Rules 2(2) and (3), therefore, is that
         the cause of action in the later suit must be the same as
E .      in the first suit. It will be wholly unnecessary to enter into
         any discourse on the true meaning of the said expression,
         i.e. cause of action, particularly, in view of the clear
         enunciation in a recent judgment of this Court in the
         Church of Christ Charitable Trust and Educational
F        Charitable Society, represented by its Chairman v.
         Ponniamman Educational Trust represented by its
         Chairperson/Managing Trustee JT 2012 (6) SC 149. The
         huge number of opinions rendered on the issue including
         the judicial pronouncements available does not
G        fundamentally detract from what is stated in Halsbury's
         Laws of England, (4th Edition). The following reference
         from the above work would, therefore, be apt for being
         extracted herein below:
H
         RATHNAVATHI v. KAVITAGANASHAMDAS                               135
             [ABHAY MANOHAR SAPRE, J.]

      "'Cause of Action' has been defined as meaning simply A
      a factual situation existence of which entitles one person
      to obtain from the Court a remedy against another person.
      The phrase has been held from the earliest time to include
      every fact which is material to be proved to entitle the
      Plaintiff to succeed, and every fact which a Defendant B
      would have a right to traverse. 'Cause of action' has also
      been taken to mean that particular action on the part of
      the Defendant which gives the Plaintiff his cause of
      complaint, or the subject-matter of grievance founding
      the action, not merely the technical cause of action."     C
       29. In the instant case when we apply the aforementioned
principle, we find that bar contained in Order II Rule 2 is not
attracted because of the distinction in the cause of action for
filing the two suits. So far as the suit for permanent injunction       o
is concerned; it was based on a threat given to the plaintiff by
the defendants to dispossess her from the suit house on
2.1.2000 and 9.1.2000. This would be clear from reading Para
17 of the plaint. So far as cause of action to file suit for specific
performance of agreement is concerned, the same was based               E
on non performance of agreement dated 15.2.1989 by
defendant no. 2 in plaintiffs favour despite giving legal notice
dated 6.3.2000 to defendant no. 2 to perform her part.
       30. In our considered opinion, both the suits were, F
therefore, founded on different causes of action and hence
could be filed simultaneously. Indeed even the ingredients to
file the suit for permanent injunction are different than that of
the suit for specific performance of agreement
      31. In case of former, plaintiff is required to make out the G
                              .
existence of prima facie case, balance of convenience and
irreparable loss.likely to be suffered by the plaintiff on facts
with reference to the suit property as provided in .Section 38 of
the Specific Relief Act, 1963 (in short "the Act") read with Order
                                                                   H
136         SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A 39 Rule 1 & 2 of CPC. Whereas, in case of the later, plaintiff is
  required to plead and prove her continuous readiness and
  willingness to perform her part of agreement and to further
  prove that defendant failed to perform her part of the agreement
  as contained in Section 16 of The Act.
B
            32. One of the basic requirements for successfully
      invoking the plea of Order II Rule 2 of CPC is that the defendant
      of the second suit must be able to show that the second suit
      was also in respect of the same cause of action as that on
c     which the previous suit was based.
         33. As mentioned supra, since in the case on hand, this
  basic requirement in relation to cause of action is not made
  out, the defendants (appellants herein) are not entitled to raise
  a plea of bar contained in Order II Rule 2 of CPC to successfully
D non suit the plaintiff from prosecuting her suit for specific
  performance of the agreement against the defendants.
         34. Indeed when the cause of action to claim the
  respective reliefs were different so also the ingredients for
E claiming the reliefs, we fail to appreciate as to how a plea of
  Order II Rule 2 could be allowed to be raised by the defendants
  and how it was sustainable on such facts.
         35. We cannot accept the submission of learned senior
  counsel for the appellants when she contended that since both
F the suits were based on identical pleadings and when cause
  of action to sue for relief of specific performance of agreement
  was available to the plaintiff prior to filing of the first suit, the
        .
  second suit was hit by bar contained in Order II Rule 2 of CPC .
G            36. The submission has a fallacy for two basic reasons.
      Firstly, as held above, cause of action in two suits being
      different, a suit for specific performance could not have been
      instituted on the basis of cause of action of the first suit.
      Secondly, merely because pleadings of both suits were similar
H
         RATHNAVATHI v. KAVITA GANAS HAM DAS                        137
             [ABHAYMANOHARSAPRE, J.] .

  to some extent did not give any right to the defendants to raise A
. the plea of bar contained in Order II Rule 2 of CPC. It is the
  cause of action which is .r:naterialto determine the applicability
  of bar under Order II Rule 2 and not merely the pleadings. For
  these reasons, it was not necessary for plaintiff to obtain any
  leave from the court as provided in Order II Rule 2 of CPC for B
  filing the second suit.
        37. Since the plea of Order II Rule 2, if upheld, results in
 depriving the plaintiff to file the second suit, it is necessary for ·
 the court to carefully examine the entire factual matrix of both c
 the suits, the cause of action on which the suits are founded,
 reliefs claimed in both the suits and lastly the legal provisions
 applicable for grant of reliefs in both the suits.
       38. In the light of foregoing discussion, we have no
 hesitation in upholding the finding of the High Court on this D
 issue. We, therefore, hold that second suit (OS No. 2334 of
 2000) filed by the plaintiff for specific performance of
 agreement was not barred by virtue of bar contained in Order
 II Rule 2 CPC.
                                                                 E
       39. This takes us to the next question as to whether suit
 for specific performance was barred by limitation prescribed
 under Article 54 of the Limitation Act?
        40. In order to examine this question, it is necessary to
 first see the law on the issue as to whether time can be the        F
 essence for performance of an agreement to sell the
 immovable property and if so whether plaintiff in this case
 performed her part within the time so stipulated in the
 agreement?
                                                                  .G
       41. The learned Judge J.C. Shah (as His Lordship then
 was), speaking for the Bench examined this issue in
 Gomathinayagam Pillai and Ors" Vs. Pallaniswami Nadar,
 AIR 1967 SC 868, in the light of English authorities and Section
 55 of the Contract Act and held as under:                         H
138   SUPREME COURT REPORTS                     [2014] 13 S.C.R.


A     "It is not merely because of specification of time at or
      before which the thing to be done under the contract is
      promised to be done and default in compliance therewith,
      that the other party may avoid the contract. Such an option
      arises only if it is intended by the parties that time is of
B     the essence of the contract. Intention to make time of the
      essence, if expressed in writing, must be in language
      which is unmistakable : it may also be inferred from the
      nature of the property agreed to be sold, conduct of the
      parties and the surrounding circumstances at or before
c     the contract. Specific performance of a contract will
      ordinarily be granted, notwithstanding default in carrying
      out the contract within the specified period, if having
      regard to the express stipulations of the parties, nature
      of the property and the surrounding circumstances, it is
D
      not inequitable to grant the relief. If the contract relates to
      sale of immovable property, it would normally be
      presumed that time was not of the essence of the contract.
      Mere incorporation in the written agreement of a clause
      imposing penalty in case of default does not by itself
E
      evidence an intention to make time of the essence. In
      Jamshed Khodaram Irani v. Burjorji Dhunjibhai I.LR. 40
      Born. 289 the Judicial Committee of the Privy Council
      observed that the principle underlying S. 55 of the
 F    Contract Act did not differ from those which obtained
      under the law of England as regards contracts for sale of
      land. The Judicial Committee obser\iect:
      "Under that law equity, which governs the rights of the
      parties in cases of specific performance of contracts to
 G    sell real estate, looks not at the letter but at the substance
      of the agreement in .order to ascertain whether the parties,
      notwithstanding that they named a specific time within
      which completion was to take place, really and in
      substance intended more than that it should take place
 H
       RATHNAVATHI v. KAVITA GANAS HAM DAS                       139
           [ABHAY MANOHAR SAPRE; J.]

     within a reasonable time .... Their Lordships are of opinion A
     that this is the doctrine which the section of the Indian
     Statute adopts and embodies in reference to sales of
     land. It may be stated concisely in the language used by
     Lord Cairns in Tilley v. Thomas I.LR. (1867) Ch. 61 :-
                                                                   B
     The construction.is, and must be, in equity the same as
     in a Court of law. A Court of equity will indeed relieve
     against, and enforce, specific performance,
     notwithstanding a failure to keep the dates assigned by
     the contract, either for completion, or for the steps towards c
     completion, if it can do justice between the parties, and
     if (as Lord Justice Turners<}id in Roberts v. Berry (1853)
     3. De G.M. G. 284, there is nothing in the 'express
     stipulations between the parties, the nature of ~e
      property, or the surrounding circumstances,' which would o
      make it inequ-itable to interfere with and modify the legal
      right. This is what is meant, and all that is meant, when it
      is said that in equity time is not of the essence of the
      contract. Of the three grounds ... mentioned by Lord
   , Justice Turner 'express stipulations' requires no E
      comment. The 'nature of the property' is illustrated by the
      case of reversions, mines, or trades. The 'surrounding
      circumstances' must depend on the facts of each
      particular case."
      42. In Govind Prasad Chaturvedi Vs. Hari Dutt Shastri       F
and Anr., (1977) 2 SCC 539, this Court placing reliance on
the law laid down in Gomathinayagam Pillai (supra),
reiterated the aforesaid principle. and held as under:
     " ....... It may also be mentioned that the language used G
     in the agreement is not such as to indicate in
     unmistakable terms that the time is of the essence of the
     contract. The intention to treat time as the essence of
     the contract may be evidenced by circumstances which
                                                               H
140       SUPREME COURT REPORTS                    [2014] 13 S.C.R.


A        are sufficiently strong to displace the normal presumption
         that in a contract of sale of land stipulation as to time is
         not the essence of the contract.
         Apart from the normal presumption that in the case of an
         agreement of sale of immovable properly time is not the
B
         essence of the contract and the fact that the terms of the
         agreement do not unmistakably state that the time was
         understood to be the essence of the contract neither in
         the pleadings nor during the trial the respondents
c        contended that time was of the essence of the contract."
          43. Again in the case reported in Smt. Chand Rani vs.
  Smt. Kamal Rani, (1993) 1 SCC 519, this Court placing
  reliance on law laid down in aforementioned two cases took
  t'tte same view. Similar view was taken with more elaboration
D on the issue in K.S. Vidyanadam and Ors. v. Vairavan,
  (1997) 3sec1, wherein it was held as under:
         "It has been consistently held by the courts in India,
         following certain early English decisions, that in the case
E        of agreement of sale relating to immovable property,
         time is not of the essence of the contract unless
         specifically provided to that effect. The period of limitation
         prescribed by the Limitation Act for filing a suit is three
         years. From these two circumstances, it does not follow
F        that any and every suit for specific performance of the
         agreement (which does not provide specifically that time
         is of the essence of the contract) should be decreed
         provided it is filed within the period of limitation
         notwithstanding the time-limits stipulated in the
G        agreement for doing one or the other thing by one or the
         other party. That would amount to saying that the time-
         limits prescribed by the parties in the agreement have
         no significance or value and that they mean nothing.
         Would it be reasonable to say that because time is not
H
        RATHNAVATHI v. KAVITA GANAS HAM DAS                             141
            [ABHAY MANOHAR SAPRE, J.]

     made the essence of the contract, the time-limit (s) A
     specified in the agreement have no relevance and can
     be ignored with impunity? It would also mean denying
     the discretion vested in the court by both Sections 10
     and 20. As held by a Constitution Bench of this Court in
     Chand Rani vs. Kamal Rani (1993) 1 SCC 519:              B
     "... .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                c
     reasonable time if the conditions ar.~ (evident?): (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."
     In other words, the court should look at all the relevant D
     circumstances including the time-limit(s) specified in the
     agreement and determine whether its discretion to grant
     specific performance should be exercised. Now in the
     case of u.rban properties in India, it is well-known that E
     their prices have been going up sharply over the last few
     decages - particularly after 1973. .
     "...... 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 F
     in times when prices and values were stable ahd 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 ...... "
     The aforesaid view was upheld in K. Narendra vs. G
Riviera Apartments (P) Ltd. (1999) 5 SCC 77.
      44. Applying the aforesaid principle of law laid down by
this Court to the facts of the case at hand, we have no hesitation
                                                                        H
142        SUPREME COURT REPORTS                  [2014] 13 S.C.R.


A in holding· that the time was not the essence of agreement for
  its performance and the parties too did not intend that it should
  be so.
           45. Clauses 2 and 3ofthe agreement (Annexure P-1 ),
      which are relevant to decide this question reads as under:
8
           "2. The purchaser shall pay a sum of Rs.50,000/-(Rupees
           Fifty Thousand only) as advance to the seller at the time
           of signing this agreement, the receipt of which the seller
           hereby acknowledges and the balance sale
c          consideration amount shall be paid within 60 days from
           the date of exf)iry of lease period.
           3. The Seller covenants with the Purchaser that efforts
           will be made with the Bangalore Development Authority
           for the transfer of the schedule property in favour of the
D
           Purchaser after paying penalty. In case it is not possible
           then the time stipulated herein for the balance payment
           and completion of the sale transaction will be agreed
           mutually between the parties."
E       46. Reading both the clauses together, it is clear that
  time to perform t~e agreement was nbt made an essence of
  contract by the parties because even after making balance
  payment after the expiry of lease period, which was to expire
  in 1995, defendant no. 2 as owner had to make efforts to
F transfer .the land in the name of plaintiff. That apart, we do not
  find any specific clause in the agreement, which provided for
  completion of its execution on or before any specific date.
        47. Since it was the case of the plaintiff that she paid the
G entire sale consideration to defendant no. 2 and was
  accordingly placed in possession of the suit house, the threat
  of her dispossession in 2000 from the suit house coupled with
  the fact that she having come to know that defendant no. 2
  was trying to alienate the suit house, gave her a cause of action
H
         RATHNAVATHI v. KAVITAGANASHAMDAS                             143
             [ABHAY MANOHAR SAPRE, J.]

 to serve legal notice to defendant no. 2 on 6.3.2000 calling A
 upon defendant no. 2 to perform her part and convey the title
 in the suit house by executing the sale deed in her favour. Since
 defendant no. 2 failed to convey the title, the plaintiff filed a suit
·on 31.3.2000 for specific performance of the agreement.
                                                                      B
     48. Article 54 of the Limitation Act which prescribes the
period of limitation for filing suit for specific performance reads
as under:

 54. For specific     Three The date of fixed for the
     performance of a years perfoonance, or, if no such date is
                                                                      c
     contract.              fixed, when the plaintiff has notice
                            that performance is refused.

      49. Mere reading of Article 54 of the Limitation Act would o
show that if the date is fixed for performance of the agreement,
then non-compliance of the agreement on the date would give
a cause of action to file suit for speCific performance within
three years from the date so fixed. However, when no such
date is fixed, limitation of three years to file a suitfor specific E
performahce would begin when the plaintiff has noticed that
the defendant has refused the performance of the agreement.
       50. The case at hand admittedly does not fall in the first
 category of Article 54 of the Limitation Act because as
 observed supra, no date was fixed in the agreement for its F
 performance. The case would thus be governed by the second
 category viz., when plaintiff has a notice that performance is
 refused.
       51. As mentioned above, it was the case of the plaintiff G
 that she came to know on 02.01.2000 and 09.01.2000 that
 the owner of the suit house along with the so-called intending
 purchaser are trying to dispossess her from the suit house on
 the strength of their ownership over the suit house. This event
                                                                 H
144         SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A was, therefore, rightly taken as starting point of refusal to
  perform the agreement by defendant no.2, resulting in giving
  notice to defendant no.2 by the plaintiff on 6.3.2000 and then
  filing of suit on 31.3.2000.
             52. In the light of the foregoing discussion, we uphold the
8
      findings of the High Court and accordingly hold that the suit
      filed by the plaintiff for specific performance of the agreement
      was within limitation prescribed under Article 54 of the
      Limitation Act.
c            53. This takes us to the last question as to whether the
      High Court was justified in granting specific performance of
      agreement in plaintiff's favour by reversing the judgmenUdecree
      of the trial court which had dismissed the suit.
         54. We may observe that notice of SLP was issued
D
   essentially to examine the two legal issues arising in the case
 · as discussed above. These two issues have been dealt with
   and answered against the appellants. However, since learned
   senior counsel for the appellants also questioned the legality
E and correctness of the finding of the High Court on all other
   factual issues, we have, therefore, examined the other issues
   as well.
         55. Learned senior counsel for the appellants contended
  that the High Court was not justified in holding that defendant
F no. 1 was not a bona fide purchaser of the suit house for value.
  Another submission was that the plaintiff was not ready and
  willing to perform her part of the agreement; and lastly her
  submission was that the plaintiff was never in actual possession
  of the suit house despite executi.on of agreement and making
G part payment of Rs. 50,000/- to defendant no. 2. Learned senior
  counsel for the appellants urged these factual submissions with
  equal force like the two legal issues dealt with supra.


 H
        RATHNAVATHI v. KAVITAGANASHAMDAS                            145
            [ABHAY MANOHAR SAPRE, J.]

      56. In our consid.ered opinion, the High Court being the A
last Court of appeal on facts /law while hearing first appeal
under Section 96 of CPC was well within its powers to
appreciate the evidence and came to its own conclusion
independent to that of the trial court's decision. One can not
dispute the legal proposition that the grant/refusal of specific B
performance is a discretionary relief, and, therefore, once it is
granted by the appellate court on appreciation of evidence,
keeping in view the legal principle applicable for the grant then
further appellate court should be slow to interfere in such finding,
unless the finding is found to be either against the settled C
principle of law, or is arbitrary or perverse. ·
      57. This Court while hearing appeal under Article 136 is
not inclined to again appreciate the entire ocular/documentary
evidence like that of first appellate court unless the parameter~   o'
noticed above are successfully made out in the case. Such
does not appear to be a case of this nature.
      58. The High Court, in our considered opinion, properly
appreciated the evidence for recording findings in plaintiff's
favour that she was ready and willing t6 perform her part of the E
agreement and in fact did perform her part, firstly, by paying
Rs. 50,000/- as advance and then paid balance of Rs.
3,00,000/- towards sale consideration to defendant no.2; that
plaintiff was placed in possession of the suit house by F
defendant no. 2 pursuant to agreement; and, lastly defendant
no. 2 did not perform her part of the agreement.
       59. It is pertinent to mention that despite holding that the
plaintiff paid the entire sale consideration of Rs. 3,50,000/- to
defendant no 2, the High Court directed the plaintiff to pay an . G
additional sum of Rs 4 lacs-0ver and above Rs. 3,50,000/-to
defendant no. 2 towards sale consideration. Though no reasons
were assigned by the High Court while rendering this finding,
but it seems that it must have been done either to balance the
                                                                    H
146        SUPREME COURT REPORTS                   [2014] 13 S.C.R.


A equities between the parties and/or to compensate defendant
  no, 2 the loss caused to her due to escalation in prices of
  immoveable properties.
        60. Be that as it may, since the plaintiff has not challenged
B this fi~ding by filing any appeal or cross objection in these
  appeals, this Court refrains from going into its correctness in
  these appeals filed by the defendants.
          61. In the light of the foregoing discussion, we do not find
.., any merit in the submissions urged by the learned senior
 1v counsel for the appellants and accordingly we uphold the
    findings of the High Court on the issues relating to merits.
        62. Before concluding we consider apposite to take note
  of two more issues. The High Court while passing the decree
D directed both the defendants i.e. owner of the suit house
  (vendor) defendant no.2 and subsequent purchaser (defendant
  no. 1) to execute the sale deed of the suit house jointly in favour
  of the plaintiff' to avoid any legal complications, provided the
  plaintiff pays Rs. 4 lacs over and above Rs. 3;50,000/- to the
E owner of suit house (defendant no. 2).
        63. A direction of this nature is permissible. It was so
  held by this Court way back in the year 1954 in Lala Durga
  Prasad and Anr. Vs. Lala Deep Chand and Ors., Al R 1954
  SC 75, wherein the learned Judge Vivian Bose J. known for
F his subtle power of expression and distinctive style of writing
  while speaking for the bench held as under:
            "In our opinion, the proper form of decree is to direct
          specific performance of the contract between the vendor
G         and the plaintiff and direct the subsequent transferee to
          join in the conveyance so as to pass on the title which
          resides in him to the plaintiff. He does not join in any
          special covenants made between the plaintiff and his
          vendor; all he does is to pass on his title to the plaintiff.
H         This was the course t9llowed by the Calcutta High Court
            RATHNAVATHI v. KAVITAGANASHAMDAS                            147
                [ABHAY MANOHAR SAPRE, J.]

         in Kafiladdin v. Samiraddin AIR 1931 Cal67 and appears A
         to be the. English practice. See Fry on Specific
         Performance, 6th edition, page 90, paragraph 207; also
         Potterv. Sanders 67 E.R.1057. We direct accordingly."
         64. We respectfully follow these observations and
                                                                  B
    accordingly uphold the direction issued by the High Court for
    execution of the sale deed.
          65. There is, however, one more aspect of the case which
    needs to be taken note of and has arisen in the case as a
    result of passing of the impugned decree in plaintiffs favour       c
    by the High Court and upheld by this Court.
           66. The effect of execution of sale deed in plaintiff's favour
    by the defendants in terms of decree would obviously result in
    cancellation of contract of sale of the suit house between the
                                                                          D
    owner (defendant no. 2) and subsequent purchaser (defendant
    f!O. 1). The reason is not far to seek.
          67. In a contract for sale of immovable property for
•   consideration, if a seller fails to transfer the title to the
    purchaser, for any reason, on receipt of consideration towards E
    the sale price then a seller has no right to retain the sale
    consideration to himself and he has to refund the same to the
    purchaser. When the contract fails then parties to the contract
    must be restored to their respective original position which
    existed prior to execution of contract as far as possible F
    provided there is no specific term in the contract to the contrary.
          68. The contract between defendant no.2 and defendant
    no.1, i.e., owner and subsequent purchaser, stands frustrated
    due to impugned judgmenUdecree because now defendant G
    no.2 would not be in a position to sell the suit house to
    defendant no.1 th9ugh she has received Rs.4 lacs from
    defendant no.1 for such sale of suit house in her favour. It is for
    this reason, defendant no.2 is liable to refund Rs.4 lacs to
    defendant no.1.                                                     H
148          SUPREME COURT REPORTS                [2014] 13S.C.R.


A        69. Though this litigation is not between inter se owner
  and subsequent purchaser of the suit house yet in order to do
  substantial justice between the parties and to see the end of
  this long litigation and to prevent a fresh suit being instituted
  by defendant no.1 against defendant no.2 for refund of sale
B consideration which will again take years to decide and lastly
  when neither it involve any intricate adjudication of facts, nor it
  is going to cause any prejudice to the parties, we consider it
  just and proper to invoke our power under Article 142 of the
  Constitution of India in the peculiar facts and circumstances of
C the case as narrated above and accordingly direct defendant
  no. 2 (owner of the suit house)to refund Rs. 4 lacs to defendant
  no. 1 within three months after execution of sale deed by them
  in favour of plaintiff pursuant to the impugned judgment/decree.
o       70. We also direct that failure to refund the amount within
  three months, would carry interest at the rate of 9% payable
  on the unpaid amount from the date of this order till recovery
  and defendant no. 1, in the event of non-payment by defendant
  no. 2, would be entitled to levy execution against defendant
E no. 2 for realization of outstanding money alongwith interest
  as awarded treating this order to be a decree in appropriate
  executing court in accordance with law:
           71. We, however, make it clear that we have given this ·
 F . direction because this Court alone has power to pass such
     directions in an appropriate case and in our view, this is a
     case wherein we· consider it appropriate to do so, to do
     substantial justice to all parties.
       72. For the foregoing reasons and directions, these
 G appeals are accordingly disposed of. No costs.


      Nidhi Jain                                  Appeals disposed of.


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