HONOURABLE SRI JUSTICE P.NAVEEN RAO
AND
HONOURABLE SRI JUSTICE SAMBASIVA RAO NAIDU
A.S.NO.1060 of 2016
JUDGMENT : (Per the Hon'ble Sri Justice SambasivaRao Naidu)
This appeal has been preferred by defendants No.1 to 4 in
O.S.No.794 of 2006 on the file of Principal District Judge, Ranga
Reddy District, against the Judgment and Decree passed by the
trial Court by which the suit of the respondent/plaintiff was
decreed directing the appellants herein to execute registered sale deed in respect of Ac.24-1/2 gts of land shown in the plaint schedule in favour of the respondent/plaintiff and the respondent/plaintiff was directed to deposit the balance sale consideration in two months from the date of decree.
2. The parties are referred to as they are arrayed in the plaint filed before the trial court. O.S.No.794 of 2006 has been filed by the plaintiff for specific performance of contract directing the defendants to execute a registered sale deed in respect of Ac.25-00 gts of land forming part of Sy.Nos.148, 149/A1, 149/A2, 149/B, 151/A1, 151/A2, 152/A2, 153/A3 and 152/A4 of Athvelli Village which herein after will be referred as suit schedule property. According to the plaint averments, the plaintiff is a 2 PNR,J & SSRN,J A.S.No.1060 of 2016 registered real estate company and it had entered an oral agreement with defendants to purchase suit schedule property @ Rs.17 Lakhs per acre, for a total sum of Rs. 4.25 Crores. Defendants No.1 to 6 have got joint ownership and possession over the suit schedule property. Originally one Smt. Shantha Rao who was examined as PW.2 before the trial Court entered into a contract with the defendants in respect of Ac.12.00 gts of land and paid Rs.1 Crore in four instalments from 18-12-2003 to 08-01-2004. Subsequently, the plaintiff company entered into the picture, agreed to purchase total land held by the defendants to an extent of Ac.25.00 gts and made payments on different dates. The plaintiff furnished the details of payments in a tabular form in the plaint and further pleaded that they have obtained receipts from the defendants.
3. The plaintiff further pleaded that it was always ready and willing to perform its part of contract provided the defendants procure the income tax clearance certificate and complete the other legal formalities. A draft agreement was prepared by the plaintiff on 14-02-2004 and was sent to the defendants for their signatures. The defendants initially agreed that the same will be signed by D1 and D3 but subsequently the draft agreement was 3 PNR,J & SSRN,J A.S.No.1060 of 2016 returned unsigned by the defendants. Therefore, the plaintiff addressed a letter to the defendants on 23-09-2005 for which defendant No.1 sent a reply on 25-09-2005 with baseless allegations. The plaintiff further pleaded that when they addressed another letter to the defendants on 29-10-2005 for which D1 sent a reply on 17-12-2005 raising a new question of fact that the sale consideration was Rs.33.00 Lakhs per acre but not Rs.17.00 Lakhs as alleged by the plaintiff. Therefore the plaintiff filed the suit stating that they have already paid 80% of the agreed sale consideration and that they are ready and willing to perform their part of contract and sought for a decree for specific performance of contract.
4. All the defendants appeared before the trial Court. D1 to D4 filed common written statement. D5 filed a separate written statement which was adopted by D6. D1 to D4 have claimed that there was no such oral agreement of sale as alleged by the plaintiff. According to them, there was no such transaction by PW.2 as alleged in the plaint but the Chairman and Managing Director of the plaintiff company who was examined as PW.1 before the trail court, met D1 and D2, expressed his intention to purchase the suit schedule property @ Rs.33 Lakhs per acre. At 4 PNR,J & SSRN,J A.S.No.1060 of 2016 that time, D5 and D6 were not present, thereby, the contract was not concluded. As per the discussion between the parties it was agreed in principle that the entire sale consideration shall be paid within 6 months i.e, by 18-06-2004 and all the terms should be reduced to writing. Even though the terms were not reduced to writing, PW.1 has opted to make payments in installments at his convenience. The first 4 payments of Rs.25 Lakhs each were made by him in the name of his wife. According to these defendants, they agreed to sell the property @ Rs.8,31,60,000/-.
5. They have also pleaded that after the expiry of six months period, PW.1 sought to make payments voluntarily, therefore they have received the amounts. While admitting the receipt of Rs. 4 crores from the plaintiff, these defendants have pleaded that the plaintiff committed default in payment of remaining amount. These defendants have stated that the plaintiff informed them that they want to obtain bank loan and for that purpose they would display a board at the land that he was going to purchase the land because the bank officials will inspect the landed property. According to these defendants, they agreed to sell the property @ Rs.33.00 Lakhs per acre but in view of the failure of the plaintiff, the contract could not have been completed.
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The remaining defendants also made the same averments. On the basis of the above pleadings, the Court below framed the following 6 issues:
1. Whether there is no privity of contract between the plaintiff and defendants 5 & 6?
2. Whether the schedule property was agreed to be purchased @ Rs. 17-00 lakhs per acre as contended by the plaintiff?
3. Whether the plaintiff is entitled for specific performance of the contract of sale as prayed for?
4. What is the extent of property agreed to be sold? At what rate? Among whom?
5. Whether the plaintiff is entitled to the refund of the amount claimed with interest?
6. To what relief?
6. During the trial, two witnesses are examined by the plaintiff apart from marking Exs.A1 to A29. On behalf of the defendants 1 to 8 they have examined DWs.1 to 3 but did not mark any documents on their behalf. The trial Court came to a conclusion that the plaintiff was able to prove its claim against D1 to D4 and passed a decree directing the plaintiff to deposit the balance consideration @ Rs.17.00 Lakhs per acre within two months from the date of judgment and further directed the defendants 1 to 4 to execute sale deed within one month after the plaintiff deposited the balance consideration.
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A.S.No.1060 of 2016
7. Therefore, the appellants i.e., D1 to D4 have filed the present appeal on the ground that the trail court failed to appreciate that there was no whisper about the consideration to be paid for the land in the letter which is marked as Ex.A18, and there was no concluded contract between the parties as the terms of the contract were not reduced to writing. The trail court failed to consider that in all the correspondence by the defendants they have categorically stated the price for the land as Rs.33 lakhs per acre. They find fault with the findings of the trail court on Exs.A7 and A8 for concluding the price as Rs.17 lakhs per acre. The defendants have claimed that the trial court should have seen that except in Ex.A7, Ex.A8 none of the other receipt contain the recital "out of total consideration of Rs.4,25,00,000/-" and there was no explanation from the plaintiffs as to why for the first time the said sentence was incorporated in Exs.A7 and A8 without mentioning the same either in the prior receipts or in the subsequent receipts. The defendants have claimed that the trail court ignored their plea that the above stated sentence was incorporated only to create evidence just before filing of the suit as an afterthought. While disputing the recitals of Exs.A7 and A8, the defendants have 7 PNR,J & SSRN,J A.S.No.1060 of 2016 claimed that the trail court committed error in discarding their plea.
8. According to the defendants the trail court should have seen that though the part payment of Rs. 25,00,000/- was written in words, the total consideration of Rs.4,25,00,000/- was not written in words, and it would substantiate the intention of the parties herein that the consideration is Rs.33 lakhs per acre but not Rs.17 lakhs per acre. They have also claimed that the plaintiff did not come to the court with clean hands, the court below did not accept the case of plaintiff about its alleged contract with D5 and D6 for purchase of Ac. 0-39 ½ gts, and in such a way it should have rejected the case of plaintiff against the other defendants. According to the defendants the court below ignored the positive statements and admissions of PW.1 and failed to consider that there was no concluded contract between plaintiff and defendants, thereby sought for setting aside the Judgment and Decree of the trail court.
9. The suit has been filed seeking specific performance in respect of Ac.25.00 gts of land, but the Court below did not accept the claim of the plaintiff about the agreement with D5 and D6 for purchase of Ac.0.39 ½ gts and dismissed the suit to that extent.
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A.S.No.1060 of 2016
The plaintiff did not file any appeal against the said finding as such, it has become final. As per the pleadings and evidence through PW.1 and PW.2, it is the specific case of plaintiff that there was an oral agreement between the parties to purchase the land of defendants in Sy.Nos.148, 149/A1, 149/A2, 149/B, 151/A1, 151/A2, 152/A2, 153/A3 and 152/A4 of Athvelli village. The plaintiff has pleaded that in the first instance, PW.2 approached D1 to D4 through one Rama Jyothi and there was an oral agreement to buy their land and in pursuance of the said agreement, she paid Rs.One Crore under four different receipts from 18-06-2003 to 08-01-2004. Thereafter the plaintiff entered and PW.1 being an authorized representative of Plaintiff Company negotiated with defendants and in pursuance of oral agreement between them, he made part payments on different occasions. It is the further case of plaintiff that they agreed to purchase the land of Ac.25.00 gts @ Rs.17,00,000/- per acre and they paid Rs.4,25,00,000/- under Exs.P3 to P17.
10. The defendants having admitted the receipt of the above amount, took a specific stand that PW.2 never approached them, PW.1 himself negotiated with D1 to D4 and agreed to purchase their land @ Rs.33 Lakhs per acre and it is their case, 9 PNR,J & SSRN,J A.S.No.1060 of 2016 there was an understanding between the parties for purchasing the land @ Rs.33 Lakhs per acre and entire sale consideration should be paid in six months from 18-12-2003, and the terms can be reduced to writing.
11. In support of their respective contentions, the plaintiff has examined PW.1 and PW.2 and marked Exs.A1 to A29. The defendants have examined DWs.1 to 3 but no documents are marked on their behalf. As already stated, the trial Court accepted the case of plaintiff to the extent of oral agreement between plaintiff and D1 to D4 and also about the sale consideration as Rs.17 Lakhs per acre and passed a decree directing the plaintiff to deposit the balance consideration and defendants to execute the sale deed.
12. The defendants have filed the present appeal on the ground that there was no concluded contract between plaintiff and D1 to D4. They have terminated the understanding in view of the failure of plaintiff in making payment of balance consideration within time and as per the agreed price i.e. @ Rs.33 Lakhs per acre but the Court below came to a wrong conclusion and passed the decree against their favour. The learned counsel for the defendants has submitted that the trail court did not appreciate 10 PNR,J & SSRN,J A.S.No.1060 of 2016 the evidence on record and by fixing the responsibility of proving the case on the defendants, the court below came to a wrong conclusion and ignored the fact that the plaintiff was not able to prove its claim.
13. The learned counsel for the respondent/plaintiff has submitted that the Court below having discussed the entire evidence on record and after perusing the documents came to a correct conclusion thereby, there is no necessity to interfere with the findings and sought for dismissal of the appeal.
14. In view of the above, the following points arose for consideration in this appeal:
1. Whether the findings of trial Court about the oral agreement between the parties and about the price of the land as Rs.17 Lakhs per acre and about the failure of D1 to D4 to perform their part of contract are in correct?
2. Whether there was an oral agreement of sale between plaintiff and defendants?
3. Whether the claim of D1 to D4 that there was no concluded contract between parties is correct?
4. Whether the judgment and decree of the trial Court are liable to be set aside?
5. Whether the plaintiff is entitled to the relief of specific performance?
15. There is no requirement of law that an agreement or contract of sale of immovable property should be in writing.
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A.S.No.1060 of 2016
However, in a case based on oral agreement of sale of immovable property, burden lies on the plaintiff and whether there was a concluded oral contract or not is a question of fact to be determined on the basis of oral and documentary evidence produced by the parties. Therefore, the plaintiff has to prove that there was an understanding between the parties about the extent of land, price per acre and that have they paid the consideration in pursuance of the said understanding and that there was failure on the part of defendants in performing their part of contract.
16. In order to prove the said oral agreement for sale of immovable property, the plaintiff is relying on the evidence of PWs.1 and 2 and documents marked as Exs.A1 to A29. The defendants who have admitted the receipt of Rs.4.25 Crores and Exs.A.3 to A.17 have claimed that there was no concluded contract and as plaintiff failed to pay the agreed consideration within the stipulated time the oral agreement of sale was terminated. To prove their contention, the defendant relied on the evidence of DWs.1 and 2. They did not mark any documents but relied on the letters/reply letters exchanged between the plaintiff and the defendants vide Exs.A18 to A28.
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17. D1 to D4 in their common written statement pleaded that PW.2 was never in the picture, she never paid any amount and PW.1 though there was no concluded contract opted to pay the consideration by way of installments. PW.1 himself paid Rs.One Crore in 4 installments in the name of his wife, and he made adhoc payment of Rs.4 Crores including the above said Rs.1 Crore. In support of its contention, the plaintiff has examined PW.2, who filed her evidence by way of affidavit, deposed that she negotiated with D1 to D4 through one Rama Jyoti. There was an understanding between them for purchase of their land and that D1 to D4 insisted for payment of Rs.One Crore out of the total sale consideration in cash. The plaintiff company used to conduct all the transactions through Bank transfer, therefore the Plaintiff company transferred the said amount to the account of PW.2, and she in turn paid the amount to the defendants under four receipts. PW.2 categorically deposed that she and her husband who is examined as PW.1 deliberated with the defendants and she marked the receipts under which she paid Rs.One Crore to defendants as Exs.A3 to A6. The defendants did not choose to cross-examine PW.2 and reported no cross-examination thereby, it shall be presumed that what all deposed by PW.2 is correct and D1 13 PNR,J & SSRN,J A.S.No.1060 of 2016 to D4 have accepted the evidence including the payment of Rs.1.00 Crore by PW.2 by way of cash and the defendants offered to sell their land @ Rs.17.00 Lakhs per acre. No suggestion was given to PW.2 that the defendants never agreed to sell that land as deposed by PW.2.
18. PW.1, the Chairman of Plaintiff Company who was duly authorized to deal with the sale transaction with the defendants deposed that they paid Rs.4.00 Crores including the cash payments made by PW.1 during the period from 18-12-2003 to 01-06-2005. He has also deposed that the defendants have acknowledged the receipt of above said amounts and that as per Exs.A7 and A8, the defendants have accepted the receipt of money under these receipts wherein, it was categorically stated that the amount was paid out of the total agreed consideration of Rs.4.25 Crores.
19. It is true, since the plaintiff is relying on oral agreement, the burden of proving such agreement with regard to sale of immovable property in terms of sale is heavily on the plaintiff. However since the defendants have accepted the negotiations with PW.1 and as they did not choose to challenge the evidence of PW.2, and admitted the receipt of Rs.4.00 Crores 14 PNR,J & SSRN,J A.S.No.1060 of 2016 under Ex.A3 to Ex.A17 the onus of proving their contention is shifted to the defendants. They have accepted the receipt of portion of sale consideration of Rs.4.00 Crores under Exs.A3 to A17 up to 01-06-2005. Another important circumstance is the defendants did not dispute the recitals of Exs.A7 and A8 till they filed their additional Written Statement about 9 years subsequent to the original written statement. The defendants took a specific stand that they have agreed to sell their land @ Rs.33.00 Lakhs per acre but they did not raise any objection when the plaintiff marked Exs.A7 and A8 wherein there is a clear recital to the effect that the amount paid under these receipts was out of the amount of Rs.4.25 Crores agreed to be paid for the entire property which means the defendants agreed to sell the land @ Rs.17 Lakhs per acre only. The trail court found the evidence of PW.1 and entries in these two receipts as true and can be relied. The defendants could not show any reason to discard the said finding and to come to a different conclusion.
20. The defendants have claimed that as per the negotiations with PW.1, there was an understanding between the parties for purchase of land @ 33.00 Lakhs per acre and plaintiff shall pay the total consideration before 18-06-2004 subject to 15 PNR,J & SSRN,J A.S.No.1060 of 2016 execution of a written agreement. As per the recitals of Exs.A3 and A17, which was not disputed by the defendants, the plaintiff has paid Rs.4.00 Crores. As could be seen from the recitals of Exs.A3 to A17, the plaintiff paid Rs.One Crore under Exs.A3 to A6 from 18-12-2003 to 08-01-2004, Rs.1,55,00,000/- under Exs.A7 to A12 on different dates from 13-02-2004 to 21-04-2004. They have also admitted the receipt of Rs.1,45,00,000/- under Exs.A13 to A17 from April, 2005 to June, 2005. Therefore as per the contention of the defendants they have received only half of the agreed sale consideration under different installments up to June 2005. But they did not try to issue any legal notice or letter to the plaintiff questioning the delay in making payments or informing the plaintiff that they have terminated the contract or they were not willing to sell the land to the plaintiff. If the contention of these defendants is accepted, there was failure on the part of the plaintiff in payment of agreed sale consideration within six months, but they did not raise any objection till the plaintiff addressed Ex.A18 calling upon them to conclude the transaction by obtaining necessary clearance from the Government Department. Furthermore, they have accepted the payment of Rs.2.5 Crores beyond the date of 18-06-2004. The defendants for the first time 16 PNR,J & SSRN,J A.S.No.1060 of 2016 addressed Exs.A19 on 25-09-2005 and stated that they agreed to sell land @ Rs.33.00 Crores per acre and they have also claimed that D5 and D6 also accepted to sell their AC.0.39 ½ gts of land to the plaintiff. As per Ex.A19, it was the case of defendants that plaintiff was due to pay huge amount but failed to pay the amount before 18-06-2004.
21. As per the said notice, it is very clear that the plaintiff was allowed to fix its company board, and that fencing was arranged around the suit schedule property. By the date of Ex.A19, the defendants have received Rs.4.00 Crores and even as per their own version, the property was agreed to be sold to the plaintiff thereby, there was no necessity for them to raise any fencing around the suit schedule property. Therefore, the contention of defendants that they have erected fencing to the suit property is nothing but false and it is quite clear that they allowed the plaintiff to construct fencing around the property and arrange a display board to the effect the plaintiff purchased the property.
22. Therefore, the contention of plaintiff, it has undertaken development activity in the property is also established. If really the plaintiff agreed to purchase the property @ Rs.33.00 Lakhs and failed to pay the remaining amount before 18-06-2004, the 17 PNR,J & SSRN,J A.S.No.1060 of 2016 defendants ought to have questioned the plaintiff about the balance of Rs.4.00 Crores and may not have kept quite till the plaintiff addressed Ex.A18 letter. They did not issue any notice calling to pay the plaintiff the balance amount. They did not inform the plaintiff that they have terminated the contract. It is only when the plaintiff asked the defendants through Ex.A18 letter to expedite the formalities and conclude the transaction, the defendants sent the reply raising a new plea that they agreed to sell the land @ Rs.33.00 Lakhs.
23. Soon after receiving Ex.A19 letter from D1, the plaintiff addressed Ex.A20 letter informing the defendants that earlier they sent a draft agreement to the defendants on 14-02- 2004, but the defendants returned the agreement without their signature and while sending the same agreement along with Ex.A20, the plaintiff asked the defendants to sign the documents and return it to the plaintiff. Ex.A20 was addressed on 29-10- 2005. The defendants kept quite till 17-12-2005 and addressed Ex.A21 letter denying the averments of Ex.A20 and informed the plaintiff that they did not receive any agreement on 14-02-2004. For the first time they have stated in this letter that and in view of the failure of plaintiff in payment of the balance consideration, 18 PNR,J & SSRN,J A.S.No.1060 of 2016 they are terminating the oral understanding. Admittedly, they have received the amount under Exs.A3 to A17 beyond that particular period up to June, 2005.
24. The contention of the defendants that they agreed to sell the land @ 33 Lakhs per acre and there was an understanding to pay the consideration before 18-06-2004 is not proved by any acceptable evidence. The fact that the defendants have accepted the payment of balance consideration by installments proves the claim of the plaintiff that the said payments were made in pursuance of the said oral agreement of sale. In view of the above stated circumstances the contention of the defendants that there was no concluded contract cannot be accepted.
25. As could be seen from the pleadings of both parties the above stated contract was agreed during the year 2003. The defendants have pleaded that they agreed to sell the land at the rate of Rs. 33 lakhs per acre. But as per the evidence placed before the Court, the market value of the land during 2002 was only Rs.5 Lakhs. The plaintiff has marked one sale deed executed on 20-06-2002 as Ex A.29. The said sale deed was executed about one year prior to the oral agreement between the plaintiff and D1 to D4. According to the said sale deed the value of the land in that 19 PNR,J & SSRN,J A.S.No.1060 of 2016 particular locality was Rs.5 lakhs during 2002. Even if it is accepted that there was price escalation from 2002 to 2004, it may not be 3 or 4 times and even if it is believed that Ex.A29 is executed by showing less value, the defendants could not produce any evidence in support of their claim as to the market value of the land in 2003 during which they entered the oral agreement with the plaintiff. There is no dispute about the nature of business of Plaintiff. The plaintiff being a company dealing with the purchase and sale of immovable land may not try to pay such a huge price in spite of the fact that they have got knowledge of Ex.A29 sale deed.
26. Therefore, the oral and documentary evidence placed before the Court clearly shows that there was an oral agreement between the parties. In the first instance, PW.1 made payments to the defendants. The defendants have received Rs.One Crore from PW.2 between 18-12-2003 to 08-01-2004. Subsequently, the plaintiff paid Rs.3.00 Crores under Exs.A7 to A.17. The defendants have acknowledged the payment and accepted the recitals of the documents wherein, there is a clear mention that the amount was paid out of the agreed total consideration of Rs.4.25 Crores. Therefore, all these circumstances would prove the contention of 20 PNR,J & SSRN,J A.S.No.1060 of 2016 the plaintiff. The evidence placed before the Court probobalize the contention of the plaintiff about the oral agreement of sale, about the understanding with regard to price per acre, the payment of Rs.4.00 Crores under different occasions and as to the failure of the defendants No.1 to 4 in execution of sale deed in spite of such a request from the plaintiff. Therefore, the plaintiff is able to prove its claim and as such, the plaintiff is entitled to decree of specific performance and the trial court rightly passed a decree in favour of the plaintiff. Therefore, there are no merits in the appeal. As such it is liable to be dismissed.
27. In the result, the appeal is dismissed with costs.
___________________ JUSTICE P.NAVEEN RAO __________________________ JUSTICE SAMBASIVA RAO NAIDU Date:26.08.2022 PLV