Gujarat High Court
Premsinh Dalotsinh Chavda vs Ashokbhai Ramniklal Tolat on 18 December, 2023
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2388 of 2017
With
R/CROSS OBJECTION NO. 66 of 2017
In
R/FIRST APPEAL NO. 2388 of 2017
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2017
In R/CROSS OBJECTION NO. 66 of 2017
In
R/FIRST APPEAL NO. 2388 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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PREMSINH DALOTSINH CHAVDA
Versus
ASHOKBHAI RAMNIKLAL TOLAT & 1 other(s)
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Appearance:
MR.PARTH CONTRACTOR(7150) for the Appellant(s) No. 1
for the Defendant(s) No. 2.1,2.2
DECEASED LITIGANT for the Defendant(s) No. 2
MR. JAIMIN R DAVE(7022) for the Defendant(s) No. 1
PRIYANK S DAVE(9465) for the Defendant(s) No. 1
SHIVAM D PARIKH(9477) for the Defendant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 18/12/2023
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. The First Appeal has been filed by the original plaintiff and the cross objections by the original defendant no.1. The appeal by the original plaintiff challenges the legality and validity of the judgement and decree dated 18.04.2017 passed by the learned Principal Senior Civil Judge, Ahmedabad (Rural) in Special Civil Suit No.201 of 2010, whereby, the said suit preferred by the appellant has been partly dismissed qua the relief seeking specific performance. However, the suit is partly decreed whereby the appellant is held entitled to recover an amount of Rs.13,83,040/- as compensation for breach of contract with interest @ 6% from the date of filing of the suit till its realization. The appellant Page 2 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined shall hereinafter be known as the plaintiff.
2. Cross-objections have been filed by the defendant no.1, whereby, the suit has been partly decreed and the objector - defendant no.1 has been directed to pay compensation as aforesaid. The cross-objector is the respondent no.1 in the First Appeal, hereinafter to be referred to as 'the defendant'.
3. The facts in brief are as under:
3.1 The plaintiff filed the Regular Civil Suit against the defendant stating that the plaintiff wanted to purchase ½ share of plot no.55 from defendant which the defendant wanted to sell.
Accordingly, the defendant requested the society to divide the plot into two parts so as to sell half the portion admeasuring 500 square yards of the Page 3 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined land with an old superstructure of bungalow no.509. It was the case of the plaintiff that negotiations and discussions went on for more than six months and ultimately, the contract was concluded orally on 26.01.2010, where, the defendant agreed to sell one half share of the plot for a total consideration of Rs.1.50 crores on certain terms and conditions. According to the plaintiff, he paid an amount of Rs.5 lakhs as earnest money to the defendant by way of cheque dated 26.01.2010 drawn on HDFC Bank Ltd.
3.2 It is the case of the plaintiff that on 30.01.2010, for the division of the plot, an application was made to the society by the defendant. The defendant had to make payment by way of maintenance charges of Rs.1,91,520/- and the cheque for such amount was issued by Page 4 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined the plaintiff which cheque was received by the society along with the letter dated 11.02.2010. 3.3 The case of the plaintiff further was that a form was issued by the society to be signed by both the parties to issue two separate share certificates. The form was filled up in the society's office itself and the cheque was prepared for an amount of Rs.2,50,000/- by the plaintiff. However, since the signature of the defendant no.2 was required in the form, the first defendant did not return the form and thereafter, telephoned the plaintiff that he is not interested in the deal as the price of land has gone up. The cheque was returned by the society as the form was not complete. Based on the documents and oral documents therefore, it was the case of the plaintiff that when an oral contract was entered into between the plaintiff and the defendant no.1 Page 5 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined and the plaintiff had paid Rs.5 lakhs by way of cheque towards earnest money and the defendant had applied for the split certificates with a cheque of Rs.1,91,520/- the cause of action has arisen to file the suit for specific performance. Accordingly, the plaintiff prayed for a decree of specific performance of the oral agreement dated 26.01.2010 and in the alternative, damages to the tune of Rs.10 lakhs together with the amount of Rs.6,91,520/- was already paid. In all therefore, alternatively claimed Rs.16,91,520/- with running interest @ 12%.
3.4 In response to the plaint, a written statement was filed by the defendant, denying such an oral agreement. It was his case that there was no agreement for a transaction to sell half the share. The request for issuance of Page 6 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined splitting of share certificate was only with a view to protect the interest of his wife. That the amount of Rs.5 lakhs received by the defendant was not as earnest money towards oral agreement but as an interest free loan since the bungalow needed renovation. So also the amount of Rs.1,91,520/- was towards such loan. It was the case of the defendant that he had returned the amount of Rs.5 lakhs since the estimate of renovations was beyond reach by issuing a cheque dated 22.02.2010. No cheque of Rs.2,50,000/- was prepared and given to the society. The suit was therefore misconceived and ought to be dismissed.
3.5 The Trial Court vide judgement and decree dated 18.04.2017, held that the plaintiff was entitled for compensation for breach of agreement including amount of Rs.6,91,520/-, Page 7 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined already paid by the plaintiff of the amount to pay Rs.13,83,040/- as total compensation with interest @ 6%.
4. Mr.Parth Contractor learned advocate appearing for the appellant made the following submissions:
4.1 That the Trial Court ought to have exercised discretion in favour of the plaintiff in passing a decree of specific performance as prayed for as there was no impedement to grant such relief.
4.2 That on the basis of the negotiations held on 26.01.2010, by way of an oral agreement, the defendant no.1 had agreed to sell half portion of the plot for a total consideration of Rs.1,50,00,000/-. The agreement was on certain conditions. Earnest money of Rs.5 lakhs by way of a cheque for the amount was admittedly paid Page 8 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined to the defendant no.1 and the defendant no.1 had encashed the same. Before the Trial Court, the cheque was exhibited at Exh.56 and the statement of accounts at Mark-46/3 of the HDFC bank showed an entry of debiting of the plaintiff's account in favour of defendant no.1 on 01.02.2010.
4.3 In light of the averments made in the plaint, that necessary formalities would be undertaken with the society to split the plots on 30.01.2010, the defendant no.1 applied to the society for division of the plot. The applications so made were at Exh.64 and Exh.105 respectively.
4.4 On 06.02.2010, the plaintiff had addressed a letter to the society along with the cheque of Rs.1,91,520/- towards the payment of the maintenance charges of the bungalow. On Page 9 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 08.02.2010, a transfer form with respect to plot no.509A signed by the plaintiff without the signature of the defendant and a cheque of Rs.2,50,000/- was also sent across. These documents are at Exh.65 and 66 respectively.
The society subsequently returned the cheque as the letter was not signed by the defendant no.2. 4.5 Mr.Parth Contractor would rely on letters at Exh.79 and 106 respectively dated 11.02.2010 where the defendant no.1 made an application enclosing a cheque of maintenance requesting to expedite issue of two share certificates, which according to the learned counsel was proof enough to indicate the intention of the plaintiff to purchase the plot in question. On 22.10.2010, the son of the plaintiff wrote to the defendant no.1 that the plaintiff intended to pursue the deed to which the defendant no.1 by an SMS Page 10 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined responded that they may not. These documents are at Exhs.72 and 73 respectively. 4.6 It was further submitted by the learned counsel for the plaintiff-appellant that the plaintiff was ready and willing and had the ability to make payments, is evident from the income tax returns of the plaintiff from AYs 2009-10 to 2013-14 at Exhs.59 to 63 and from the plaintiff's cross-examination at Exh.51.
4.7 Mr.Contractor would further submit that once the sale consideration was agreed upon and earnest money and maintenance charges were deposited and all the issues were proved in favour of the plaintiff, discretion ought to have been exercised in favour of the plaintiff in granting the decree of specific performance. Page 11 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023
NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 4.8 Placing reliance on the provisions of the unamended section 20 of the Specific Relief Act, Mr.Contractor would submit that the exceptions carved out in sub-section (2) of Section 20 were not attracted so as to deny the discretion by the Court to grant the relief of specific performance. He would submit that sub-section (4) of Section 20 mandates that the Court shall not refuse specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.
4.9 That the impugned judgement is erroneous and contrary to Section 20 of the Specific Relief Act. In support of his submission, Mr.Contractor would rely on the following decisions as far as Section 20 is concerned:
I. K. Nanjappa (DEAD) BY LEGAL
REPRESENTATIVES versus R.A. HAMEED
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ALIAS AMEERSAB (DEAD) By Legal
Representatives and another reported in
(2016) 1 SCC 762
II. K. Prakash v. B.R. Sampath Kumar
reported in (2015) 1 SCC 597
III. Dhansukhlal Rambhai Patel and
Another v. Dhansukhlal Nagindas Kapadia rendered in Second Appeal No.42 of 1990 IV. Robert D' Silva v. Roshini Enterprises and another reported in 1986 SCC OnLine Kar 3 V. Silvey and others v. Arun Varghese and another reported in (2008) 11 SCC 45 VI. Beemaneni Maha Lakshmi v.
Gangumalla Appa Rao (SINCE DEAD) BY LEGAL REPRESENTATIVES reported in (2019) 6 SCC 233 VII. Zarina Siddiqui v. A. Ramalingam ALIAS R. AMARNATHAN reported in (2015) 1 SCC Page 13 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 705 VIII. Premsinh Dalotsinh Chavda v. Ashokbhai R. Tolat & Ors. rendered in First Appeal No.2388 of 2017 4.10 As far as the finding of the Trial Court in respect of provisions of Section 14(1)(b) and 14(1)(c) of the Act is concerned, he would assail the findings of the Trial Court and submit that the contract is not dependent on personal qualifications or volition of the parties. He would rely on the decision in case of Robert D'Silva v. Roshini Enterprises reported in AIR 1987 KAR 57.
He would submit that in view of Explanation
(i) of Section 10, unless and until contrary is proved, the Court shall presume that the breach of a contract to transfer removable property Page 14 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined cannot be adequately relieved by compensation of money.
4.11 That an oral agreement can always be enforced as it is enforceable. Once a concluded contract is proved as was in the present case, specific performance must follow. He relied on the decision in case of K. Nanjappa (supra). 4.12 With regard to the conduct of the defendant, he would submit that the defendant had backed out and therefore, while weighing the question of exercise of discretion, such conduct could not be ignored.
5. Mr.Jaimin Dave learned advocate appearing with Mr.Priyank Dave and Mr.Shivam Parikh learned advocates appearing for the defendant no.1- cross-objector would make the following Page 15 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined submissions:
5.1 Relying on the relevant factors of the case, he would submit that the defendant is 97 years old today and resides with his wife and does not have any other residential accommodation.
5.2 The defendant obtains estimate for renovation of the house from one Thakkar and Associates and the estimate is of Rs.28 lakhs, and Exhs.113 to 116 prove that. The plaintiff offered an interest free loan of Rs.5 lakhs which the defendant accepted. It was true that an application was made for a split certificate on 30.01.2010 but Exh.64 produced by the plaintiff is interpolated whereas Exh.105 has been produced by the Secretary of the society.
5.3 Mr.Dave would submit that the whole story of signing of letters dated 06.02.2010 and Page 16 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 08.02.2010 to the society requesting for issuance of share certificates are not proved inasmuch as, for the period from 31.01.2010 to 11.02.2010, the defendant no.1 was traveling to Mumbai which fact is evident from the toll receipts brought on record from the suit at Exhs.118 to
132. He would submit that different versions came out from the versions made in the plaint inasmuch as, at one stage, it was the case of the plaintiff that the defendant backed out on 09.02.2010, whereas, in the other part of the plaint, it appears that the same has happened in March 2010.
5.4 Mr.Dave would submit that there was no concluded contract between the parties. Adding to this, he would submit that there is no dispute with the proposition that there can be an oral agreement to sell. However, a contract, an oral Page 17 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined particularly, can only be termed to be concluded when parties are ad-idem to the extent that all necessary and vital terms are agreed and written agreement is only a formality. He would submit that there is nothing on record to suggest that there was a concluded contract as no price was agreed upon.
5.5 In support of his submissions, Mr.Dave would rely on the following judgements:
(i) Brij Mohan v. Sugra Begum, (1990) 4 SCC 147
(ii) K. Nanjappa [Dead] by Legal Representative v. R.A. Hameed, (2016) 1 SCC 762
(iii) Patel Rameshbhai Dahyabhai v.
Patel Pranav Kiritbhai, (2015) 2 GLR 1087
(iv) V.R. Sudhakara Rao v. T. V. Page 18 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined Kameshwari (2007) 6 SCC 650 5.6 Mr.Dave further submitted that even if there is a concluded contract, the contract could not have been specifically enforced in view of Sections 14(1)(a), (b) and (d). The plaintiff himself had asked for an alternative relief for a compensation in light of provisions of Section 14(1)(b) of the Act, since the contract would run into minute details and would require supervision, it could not be specifically enforced. Issuance of split certificate, division of plots, demotion of bungalow, would require continuous duty of the Court which it cannot supervise and therefore no specific performance was possible. 5.7 Mr.Dave would further submit that according to Section 20 of the Specific Relief Act, specific performance is discretionary and Court is not bound to grant such a relief. Provisions of Page 19 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined Section 20 would override provisions of Section 10 of the Act in light of the language of Section
10. The positive obligation under Explanation to Section 10 of the Specific Relief Act is subservient to Section 20 and the Court can refuse to pass a decree of specific performance. The present is such case. Reliance is placed on the decision in case of Shanker Singh v. Narinder Sing reported in (2014) 16 SCC 662. 5.8 He would therefore submit that the finding in the judgement where the contract is concluded is required to be quashed. 5.9 Reading paragraphs 29 and 30 of the judgement Mr.Dave would submit that even the judgement insofar as it awards damages, requires to be set aside. The defendant had offered the cheque which was deliberately not Page 20 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined encashed. He had even indicated his readiness and willingness to deposit the entire sum of Rs.6,91,520/- . These factors ought to have been taken into consideration.
5.10 Mr.Dave would submit that even otherwise the plaintiff himself had accepted compensation. He would therefore submit that the judgement and decree awarding compensation must be set aside.
6. In rejoinder to Mr.Dave's submission, Mr.Contractor would rely on the cross- examination of the defendant to submit that he had admitted that the letter dated 30.01.2010 was written for the purposes of sell. The ingredients of Section 10 of the Contract Act does not satisfy and the First Appeal therefore must be allowed and the cross-objections must Page 21 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined be dismissed.
7. Having considered the submissions of the respective advocates, this Court will have to consider whether the judgement and decree rendered by the Trial Court and the findings arrived by it are based on correct appreciation of evidence and the law.
7.1 As we have seen, the case of the plaintiff is for specific performance of an oral agreement dated 26.01.2010 for purchase of a half portion of the plot i.e. 500 sq. yards, of the total of 1000 sq. yards, from the defendant no.1 for a total consideration of Rs.1,50,00,000/-. As per the plaint, in the negotiations prefacing the oral agreement of 26.01.2010, it was agreed by and between the plaintiff to purchase, and the defendant no.1 to sell the plot with the bungalow Page 22 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined for the total consideration on the terms set out in the plaint as under:
(i) The defendant no.1 shall make an application to the society to divide plot no.55 into two sub-plots along with two separate share certificates.
(ii) Sale price of the half plot shall be Rs.1.50 crores.
(iii) The defendant agreed to submit all documents pertaining to suit property to the plaintiff.
(iv) After verification of the title clearance certificate, the sale deed was agreed to be extended in favour of the plaintiff by the defendant against payment of remaining consideration. It was agreed that it would be executed in March 2010.
(v) The plaintiff had to bear all expenses of the document.Page 23 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023
NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 7.2 In substantiating this set of events and the course of action i.e. backing out by the defendant no.1 from this agreement, oral and documentary evidence has been led by the plaintiff. The case of the defendant has been that no application was made for issuance of split certificates. That the earnest money that the plaintiff asserts as payment of Rs.5 lakhs, was an interest free loan which was repaid by way of a cheque, which the plaintiff did not deposit. That no application could have been made for splitting of plots on 06.02.2010 and 08.02.2010 as the defendant no.1 was in Mumbai from 30.01.2010 to 11.02.2010 for which toll receipts are produced. That Rs.1,91,520/- was also agreed to be returned. There was an intention to renovate the bungalow for which the loan was taken from the plaintiff which was sought to be returned as the estimate for renovation given by Thakkar Page 24 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined Associates was too expensive and beyond reach. 7.3 Appraisal of evidence on part of both sides has been considered by the Trial Court and issues have been framed.
7.4 On the issue whether the plaintiff proves that an oral concluded contract of sale of the suit property did exist, the trial court found that the defendant did receive an amount of Rs.5,00,000/- and the maintenance charges of Rs.1,91,520/- as an event of oral agreement and not as an interest free loan. Reading of the deposition of the plaintiff indicates that he confirms the narrative in the plaint by stating that as a precursor to arriving at an oral agreement to contract the sale on 26.01.2010, negotiations were under way for over past six months. That on applications and further execution of formalities with the society, Page 25 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined the contract would be final. The documentary evidence would indicate the following sequence of events:
(I) On record to support the stand of payment of earnest money of Rs.5,00,000/-
is a cheque dated 26.01.2010 at Exh.56 supported by a bank statement at Mark 46/3 showing that the amount has been paid to the defendant no.1. This amount by way of cheque of the date of the oral agreement as pleaded in light of subsequent evidences clearly indicate that the intention of the plaintiff to proceed further with the oral agreement. The readiness and willingness as well as ability to make relevant payments has been supported by the plaintiff through documentary evidence in the form of Income Tax Returns at Exh.59 to 63, coupled by his oral deposition at Exh.51 that his annual Page 26 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined income is more than Rs.2 crores. Mr.Dave's submission that there was no concluded contract as parties were not ad-idem to the extent that making of a written agreement was a formality, may be considered in light of this evidence. That there is nothing on record as per his submission on the agreement with respect to date of possession and price is also to be dealt with. In light of the obligations averred in the plaint, it has come on record that cheque of earnest money, application to get split certificates accompanied by a cheque of maintenance charges issued by the plaintiff and the cheques having been deposited with a clear assertion of undertaking the sale deed in March 2010 are pointers to parties being ad-idem. The letter under the signature of defendant no.1 of 11.02.2010 Page 27 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined and accompanied by a cheque of maintenance charges under the signature of plaintiff and issued by the plaintiff in the background of the defendant's depositing earnest money are signs and steps which led to a concluded conflict and the issue no.1 decided by the Trial Court was decided so, in our opinion, rightly so. The decisions relied upon by Shri Dave in the case of (I) Brij Mohan (supra), (ii) K. Nanjappa [Dead] (supra), (iii) Patel Rameshbhai Dahyabhai (supra) and (iv) V.R.Sudhakara Rao (supra) cannot be disputed but the facts do indicate that what can be seen from the evidence on record is that there was a valid and an enforceable contract and there was an obligation arising out of it for the defendant no.1.
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NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined (II) On 30.01.2010 i.e. within three days of the date of 26.01.2010, the date of oral agreement mentioned in the plaint and the deposition, a letter was addressed by the defendant no.1 to the society for division of plot into two sub-plots. The documents, both of even date and similar are on record at Exh.64 and Exh.105. The defendant has disputed the veracity of Exh.64 where according to him details of parties to the litigation are interpolated, however, the document identical without interpolation is produced by the society at Exh.105, a letter indicating the wish of the defendant no.1 to divide plots.
(III) There are letters dated 06.02.2010 and 08.02.2010, one addressed to the society by the plaintiff along with cheque of Page 29 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined Rs.1,91,520/- towards maintenance charges. The letter dated 06.02.2010 is not exhibited. The letter dated 08.02.2010 at Exh.65 does bear the plaintiff's signature but does not bear the signature of defendant no.1 and his broker defendant no.2 and the defendant has disputed the existence and the case of the plaintiff is that the defendant no.2 did not sign. Along with the letter of 08.02.2010 is a cheque of the plaintiff of Rs.2,50,000/- no.494840 towards transfer fee. Though the defendant no.1 has disputed the letters dated 06.02.2010 and 08.02.2010 which we may therefore not consider based on his version of being out of Ahmedabad to Mumbai and his return on 11.02.2010, what unmistakenly strikes to believe the version of the plaintiff that even the maintenance charges were borne by him Page 30 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined so as to enable to get split certificates is letter dated 11.02.2010 at Exh.79 and Exh.106 which under the signature of the defendant requests the society for issuance of a split certificate and what is enclosed is cheque no.494838 dated 06.02.2010 issued by the plaintiff. This cheque is at Mark 46/3. The version that both these amounts i.e. of Rs.5,00,000/- and Rs.1,91,520/- were towards interest free loan, though sought to be supported by documents of estimates of renovation given by Thakkar Associates at Exh.113 to 116 are not supported by any oral evidence and therefore in our opinion the issue that there was a concluded contract has rightly been decided by the Trial Court.
7.5 The issue Nos.2 and 3 whether the plaintiff Page 31 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined has proved that Rs.5,00,000/- was paid towards earnest money and that Rs.1,91,520/- towards maintenance dues is also proved by way of the documents, which we have discussed while deciding issue no.1. The cheque dated 26.01.2010 at Exh.56 is deposited in the defendant no.1's account. Cheque of Rs.1,91,520/- with the letter of 11.02.2010, the cheque dated 06.02.2010 is also accepted by the society. The Trial Court, as discussed above, has disbelieved these amounts to be towards interest free loans and hence in our opinion, issues nos.2 and 3 are also rightly decided.
7.6 The issue no.4 on whether the plaintiff is ready and willing to perform his part is also embedded in the reasoning which we have advanced for issues 1, 2 and 3 and therefore no separate reasons be assigned thereof. Page 32 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023
NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 7.7 Issue no.6 pertains as to whether the defendant proved that he had obtained a loan for Rs.5,00,000/- for repairing. The Trial Court held against the defendant. That also as discussed above except for documents at Exh.113 to 116 being estimates of renovation, documentary evidence has not been supported by any other evidence of the Architect or professional to support such estimates and the Trial Court has therefore rightly held against the defendant no.1. 7.8 Extensive arguments based on these findings on issue nos.5 and 7 were made by both the respective counsels by taking us through the provisions of Sections 10, 14 and 20 of the Specific Relief Act.
7.9 Section 20 (pre-amended) of the Specific Relief Act deals with discretion to grant a decree Page 33 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined of specific performance. Cases are set out in sub-section (2) from (a) to (c) where the Court would not grant such a decree. Section 20(4) may mandate specific performance. 7.10 Mr.Dave would submit that Section 20 is subsequent to Section 10 and when circumstances exist, decree of Specific Performance can be refused. Section 14 deals with contracts which cannot be specifically enforced.
7.11 In the facts of the present case whether the Court has rightly exercised the discretion under Section 20 coupled with Section 14, has to be seen. As held in the case of K. Nagappa (supra) there can be no dispute that a decree of specific performance can be granted on the basis of an oral contract. The discretion of the Court is Page 34 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined guided by judicial principles of law. It has to be exercised keeping in view principles set out in Section 20. Can we, in the facts of this case, hold that while refusing to grant a decree of specific performance, the Trial Court has committed a manifest illegality ? Our answer has to be guided even based on the admitted alternative prayer made by the appellant-plaintiff in the suit itself where he has also claimed damages. The plaintiff-appellant once having made an alternative prayer for damages and compensation may have a weaker foundation to assail the discretion under Section 20 to mandate specific performance. Section 14(1) has been pressed into service by the counsel of the defendant to support refusal of specific performance. We would refrain from opinion on the issue whether the Trial Court's findings on denial to enforce specific performance was Page 35 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined justified invoking Section 14 was right because of the alternate finding that is answered on damages. This is on two counts; firstly, reading Section 21 of the Specific Relief Act deals with the power of the Court to award compensation in certain cases. The award of compensation too is assailed by the defendant on the ground of the defendant's readiness and willingness to return the amount paid by the plaintiff. Even as per Section 10 (unamended), a contract for specific performance in the discretion of the Court may be enforced where there exists no standard of ascertaining actual damage. This is not a case as such. On his own volition the plaintiff has made an alternative prayer. Moreover, we have affirmed the finding of the Trial Court in holding that there was a concluded contract. Even the decision of the Supreme Court in the case of V.R.Sudhakara Rao (supra) in paras 12 to 16 Page 36 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined has held as under:
"12. The High Court held that the evidence is not of a very clear proof. The payment of advance amounting to Rs.16,575/- was established. Therefore, the alternative relief in favour of plaintiff in OS No. 350 of 1982 i.e. refund of Rs.16,575/- with interest at the rate of 12% p.a. from the date of payment of the amount till the date of realization, was granted. It was directed that there shall be a charge over the plaint schedule for realization of the said amount. So far as the other suit is concerned, it was held that the suit OS No. 350 of 1982 for the relief of specific performance was to be decreed to that extent. The plaintiff in OS No.131 of 1982 was entitled to the decree of possession and ancillary reliefs. Appeal was accordingly disposed of.
13. In support of the appeals, learned counsel for the appellant submitted that the ordinary rule is that the prayer for specific performance of the agreement is to be granted and only on equitable considerations the same can be refused. Reliance is placed in this context on Prakash Chandra v. Angadlal and Others [1979(4) SCC 393]. Though there was no direct evidence, other evidence taken note of by the trial court should not have been lightly brushed aside by the High Court and therefore the alternative relief should not have been granted and the main relief prayed for should have been granted. The effect of the Section 53(A) of the Transfer of Page 37 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined Property Act, 1882 (in short the 'T.P. Act') has not been taken note of.
14. There is no appearance on behalf of the respondent though counter affidavit has been filed.
15. First it would be necessary to deal with the effect of Section 53(A) of the T.P. Act. It is fairly accepted that in the case of an oral agreement of sale the defence under Section 53(A) of the TP Act is not available to a party who alleges to be in possession of the property.
16. The High Court has rightly concluded that there is no clear proof relating to the other terms of condition. The relief of specific performance is discretionary relief and except the oral evidence, there is no clear evidence to prove several of the essential terms which have been taken note of by the High Court. The High Court, on analyzing the evidence, has come to hold that except Exhibit B-1 and the oral evidence of DW 1 and DW2, there is no other clear proof relating to the other terms and conditions of the contract which can be termed as essential conditions like delivery of possession and also the obtaining of permission from the Urban Land Ceiling Authorities and therefore, it cannot be said that all the essential terms and conditions of a well concluded contract had been established in the case at hand."Page 38 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023
NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined 7.12 Even in the discussion in dealing with Sections 14(1)(b) and 20, the Supreme Court in the case of Shanker Singh held as under:
"24. In this connection, we may refer to the relevant provisions of the Act. Section 12(3) of the Act permits a party to an agreement to relinquish a part of the agreement which is not enforceable. However, it should be possible to identify and demarcate that part of the agreement which is not to be enforced. We must also keep in mind the provision of Section 14 of the Act which deals with contracts which are not specifically enforceable, and Sub- Section 1
(b) thereof includes therein a contract which runs into minute and numerous details, as is seen in the present case.
25. In this connection, we must as well refer to Section 20 (1) of the Act which reads as follows:-
"Section 20. Discretion as to decreeing specific performance - (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal."Page 39 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023
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26. Damages and specific performance are both remedies available upon breach of obligations by a party to the contract. The former is considered to be a substantial remedy, whereas the latter is of course a specific remedy. It is true that explanation
(i) to Section 10 of the Act provides that unless and until the contrary is proved, the Court shall presume that breach of contract to transfer immovable property cannot be adequately relieved by compensation in money. However, this presumption is not an irrebuttable one. That apart, for a specific performance of a contract of sale of immovable property, there must be certainty with respect to the property to be sold.
27. As held by this Court in para 18 of Mayawanti Vs. Kaushalya Devi reported in 1990 (3) SCC 1 :-
"18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for Page 40 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined there was no contract at all............."
28. Mr. Vishwanathan, learned senior counsel for the respondents submitted that the relinquishment of a part of the agreement was permissible. As far as the propositions of law concerning relinquishment as canvassed by the respondents are concerned, there is no difficulty in accepting the same. However, the relinquishment has to be unambiguous.
29. As held by this Court in Surjit Kaur Vs. Naurata Singh reported in 2000 (7) SCC 379, the party seeking part performance must unambiguously relinquish all claims to performance of remaining part of the contract. In the present case the offer of relinquishment by the respondents cannot be said to be an unambiguous one, and it will be difficult to decide as to which portion of the land is to be segregated to be retained with the appellant, and which portion is to be sold. Firstly, this is because as rightly noted by the Additional District Judge, the agreement does not specifically mention the price of the land, and in the proposed relinquishment, the respondents have not stated as to which portion of land (admeasuring 1 Kanal and 19 Marlas) they were agreeable to retain with the appellant. Secondly, in the agreement there is also a mention of `a motor, bore, passage, fan and water pump fitted with engine and without engine along with the place for placing garbage including shamlat' amongst the properties which were being sold. It is not on record as to which parcel of land is Page 41 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined having all these features. A question will therefore arise as to with whom such a parcel of land is to be retained. Obviously, a segregation of the land in dispute into two portions will be difficult.
30. In the present case there is one more difficulty viz. with respect to the relinquishment concerning the house. The First Appellate Court had categorically observed in para 6 of its judgment as quoted above, that the brother of the appellant, Puran Singh appeared to be the owner of the other = share of the house, and the remaining = share was in the name of Pritam Kaur, and that Shanker Singh did not have any authority to sell it. The judgment of the High Court does not show that this finding had been challenged in the Second Appeal. Nor was any submission made in this behalf before this Court. What the respondents offered was to give up the claim for the share of Pritam Kaur, and also the claim for the excess land of 1 Kanal and 19 Marlas which was accepted by the High Court in its impugned judgment. The respondents, however, claimed to retain the alleged = share of Shanker Singh, as can be seen from the order dated 19.10.1983 which is passed at the time of admission.
31. Thus, the respondents made a statement at the admission stage that they were ready to pay the full consideration for the land as stipulated in the agreement, and for the share of Shanker Singh in the house. This order dated 19.10.1983 records that the respondents were ready to give up their Page 42 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined claim for = the share of the house owned by Pritam Kaur, but maintained the claim for the share of Shanker Singh in the house. As against that it appears from the judgment of the First Appellate Court, that Shanker Singh did not have any such share in the house. His wife had = share, and his brother Puran Singh had = share. In the teeth of this finding of the First Appellate Court, which is neither challenged nor reversed by the High Court, the proposed relinquishment cannot be said to be a correct and unambiguous one. It does not alter the scenario and the agreement continues to remain incapable of performance. In any case it is not clear as to how such an agreement could be acted upon.
32. Therefore, for the reasons stated above, we have to hold in the peculiar facts and circumstances of this case that inspite of the offer of relinquishment made by the respondents herein, the specific performance of the agreement cannot be granted, solely on the ground that it is incapable of being performed. We have also to hold that the High Court erred in applying the provisions of Sections 12, 14 and 20 of the Act to the facts of the present case and in exercising its discretion, since this was not a case for specific performance. We have therefore to allow this appeal and set-aside the order passed by the High Court in Regular Second Appeal No. 1338 of 1983. The suit filed by the respondents will have to be dismissed.
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33. We have however to note that the respondents had paid the earnest money of Rs. 28,000/- at the time of entering into the agreement way back on 12.1.1977 i.e. nearly 35 years ago. The respondents will therefore have to be compensated adequately.
34. On the question of the appropriate compensation, it was submitted by Mr. Venktaramani, the learned senior counsel for the appellant that the agreement was made at a difficult time in the social life of Punjab for a throw away price. However, no evidence is placed on record to that effect. He then pointed out that the appellant had contended in the lower courts that respondents were influential people. Even so, it cannot be ignored that inspite of the agreement, the land has remained with the appellant all through out in view of the orders passed by the courts from time to time, due to which he has benefited. The specific performance of the agreement is being denied basically because of the finding that the agreement was incapable of being performed inspite of the offer of relinquishment.
35. It is an adage that money doubles itself in ten years, and on that basis the amount of Rs. 28,000/- with an appropriate interest will come to at least Rs. 3,50,000/-. If the land was with the respondents, they would have earned much more. Having seen this position, Mr. Venktaramani has fairly left it to the Court to decide an adequate amount to be paid to the respondents by way of Page 44 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined compensation and in lieu of specific performance of the concerned agreement. Accordingly, having considered all the relevant aspects, we are of the view that to meet the ends of justice, the appellant should be directed to pay the respondents an amount of Rs. 5,00,000/- which will be inclusive of the earnest money with due return thereon, and compensation.
36. We, therefore, allow this appeal and set- aside the judgment and order dated 8.4.2003 passed by the High Court in Civil Regular Second Appeal No.1338/1983, as well as the one dated 20.2.1980 rendered by the Sub Judge at Sultanpur Lodhi in Suit No.21/1978. The suit shall stand dismissed. There will be no order as to costs. However, the appellant is hereby directed to pay an amount of Rs. 5,00,000/- to the respondents which amount shall be paid in any case by the end of March, 2012."
8. Having affirmed the findings on the issues raised by the Trial Court and also confirmed the findings on compensation, we see no reason to interfere with the findings of the Trial Court. The judgement and decree dated 18.04.2017 passed by the learned Principal Senior Civil Judge, Ahmedabad (Rural) in Special Civil Suit No.201 Page 45 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023 NEUTRAL CITATION C/FA/2388/2017 CAV JUDGMENT DATED: 18/12/2023 undefined of 2010, are upheld.
9. The First Appeal and Cross-objections are accordingly dismissed. In view of the dismissal of the cross-objections, connected Civil Application will also not survive and hence, the same shall also stand disposed of.
(BIREN VAISHNAV, J) (NISHA M. THAKORE,J) ANKIT SHAH Page 46 of 46 Downloaded on : Mon Dec 18 20:47:34 IST 2023