Laxman Haraklal @ Uttam vs Ukhaji Zinga Mahajan
2010 Latest Caselaw 261 Bom

                            1    F.A.No.355/10 with F.A.No.365/10


                             REPORTED




                                                              
            IN THE HIGH COURT OF JUDICATURE




                                      
                          AT

                             BOMBAY

                      BENCH AT AURANGABAD.




                                     
              FIRST    APPEAL NO.355 OF 2010.




                          
     1. Laxman Haraklal @ Uttam
     Dorik, Age Adult, Occ.Agri.
             
     2. Dnyaneshwar Haraklal @
     Uttam Dorik, Age Adult,
            
     Occ.Agril.

     3. Amrut Haraklal @ Uttam Dorik,
     Age Adult, Occ.Agri.
      

     4. Rameshwar Haraklal @ Uttam
     Dorik, Age Adult, Occ. Agri.,
   



     All R/o New Bhampur, Taluka
     Shripur, Dist.Dhule.              ... Appellants.





              Versus

     Ukhaji Zinga Mahajan,
     Age 41 years, Occ.Agril.





     R/o Shirpur, Dist.Dhule.          ... Respondent.


                                ...

                           WITH
               FIRST APPEAL NO.365 OF 2010.

     1. Laxman Haraklal @ Uttam
     Dorik, Age Adult, Occ.Agri.




                                      ::: Downloaded on - 09/06/2013 16:40:44 :::
                                 2    F.A.No.355/10 with F.A.No.365/10


     2. Dnyaneshwar Haraklal @




                                                                   
     Uttam Dorik, Age Adult,
     Occ.Agril.




                                           
     3. Amrut Haraklal @ Uttam Dorik,
     Age Adult, Occ.Agri.

     4. Rameshwar Haraklal @ Uttam




                                          
     Dorik, Age Adult, Occ. Agri.,

     All R/o New Bhampur, Taluka
     Shripur, Dist.Dhule.                   ... Appellants.




                              
                       Versus

     Ramesh Ukhaji Mahajan,
                
     Age 41 years, Occ.Agril.
     R/o Shirpur, Dist.Dhule.               ... Respondent.
               
                                     ...


     Mr.Nandode, advocate holding for Mr.Amol
     S.Sawant, advocate for the appellants.
      

     Mr.S.P.Brahme, advocate for the Respondents.
   



                                     ...


                        CORAM : S.V.GANGAPURWALA,J.





                        Date    : 07.12.2010.



     JUDGMENT

1. Both the appeals involve common

question of law and as such are decided together.

The Respondents in both these appeals had

instituted suit for specific performance of

contract or in alternative for refund of the

amount paid pursuant to agreement of sale. The

Respondents in their respective suits have

contended that the appellants herein had entered

into two separate agreement for sale dated

11.4.2002, thereby agreeing to sell their

separate lands to the Respondents herein. The

price fixed was Rs.35,000/- (Rupees thirty five

thousand) ig per acre. It is the case of the

Respondents that on the date of the execution of

the agreement, the Respondents paid a sum of Rs.

5,00,000/- (Rupees five lacs) as earnest money to

the appellants. The Respondents further

contended that as the names of the female members

of the family of the appellants were appearing in

the revenue record, the appellants agreed to

remove those names before execution of the sale

deed. As according to the appellants, the female

members of the family have relinquished their

share in the suit lands. The Respondents further

contended that if for any reason, the decree for

specific performance can not be passed in their

favour then the earnest amount of Rs.5,00,000/-

(Rupees five lacs) be refunded along with

compensation and interest thereon.

2. The present appellants in their written

statement in each suit contended that they had

taken hand loan of Rs.2,00,000/- (Rupees two

lacs) from the present Respondents to clear up

their debts and the said agreement was executed

as a security for the loan. The price of the

land in

the said locality was more than Rs.

1,00,000/- (Rupees one lac) per acre but since it

was a transaction of loan, the price of the suit

lands was stated as Rs.35,000/- (Rupees thirty

five thousand) per acre in the agreement. The

amount of Rs.5,00,000/- (Rupees five lacs)

mentioned in the agreement is inclusive of the

principal sum of Rs.2,00,000/- (Rupees two lacs)

received by them along with interest to be paid

in future.

3. The trial Court did not grant the

relief of specific performance to the plaintiffs

i.e. the present Respondents. The trial Court

came to the conclusion that the appellants have

received Rs.5,00,000/- (Rupees five lacs) but the

same was not as an earnest amount but as a hand

loan and the agreement of sale in favour of the

Respondents was only as a security for loan.

The trial Court vide its judgment and decree

dated 8.5.2009, directed the present

appellants/original defendants to pay the present

Respondents a sum of Rs.5,00,000/- (Rupees five

lacs) with interest at the rate of Rs.6% p.a.

from the date of suit till realisation of the

decretal amount.

4. The defendants in the said suit/present

appellants being aggrieved by the said judgment

and decree have assailed the same in the present

appeals.

5. Mr.Nandode, learned counsel holding for

Mr.Amol Sawant, advocate for the appellants

strenuously put forth following propositions :

(i) The trial Court erroneously disbelieved

the case of the appellants that in fact, the

appellants had received only Rs.2,00,000/-

(Rupees two lacs). The witnesses to the

agreement have also substantiated the case of the

appellants. There was no reason to discard their

testimony.

(ii) The Respondents have not proved the

payment of Rs.5,00,000/- (Rupees five lacs) by

any cogent evidence nor their witnesses have been

believed by the Court. In such circumstances the

case of the appellants that only Rs.2,00,000/-

(Rupees two lacs were paid should have been

relied.

(iii) The suit was for specific performance

of contract or in alternate the refund of the

earnest amount. Once the Court has come to the

conclusion that the said agreement was not an

agreement to sell the immovable property and the

same was as a security of loan advanced by the

Respondents then in such a suit the Court could

not have passed an order of refund of the amount.

The plaintiffs are required to file a separate

suit for recovery of the hand loan amount.

(iv) Section 22 of the Specific Relief Act,

would not be applicable to grant the relief to

the plaintiffs/Respondents inasmuch as Section 22

of the Specific Relief Act, can be applied only

if the Court comes to the conclusion that the

agreement in question is an agreement of sale

then only U/s 22(b) of the Specific Relief Act,

relief for refund of earnest money can be

granted. In such circumstances, the decree

impugned could not have been passed.

6. Mr.S.P.Brahme, learned counsel for the

Respondents/original plaintiffs submitted that :

(i) The Court has rightly come to the

conclusion that an amount of Rs.5,00,000/-

(Rupees five lacs) was paid by the Respondents to

the appellants. The agreement in question

contains the said recital. Even the plaintiffs

and defendants are close relatives. If the said

amount would not have been paid, the same would

not have been mentioned in the agreement. The

Courts have properly appreciated the evidence and

has rightly come to the conclusion that Rs.

5,00,000/- (Rupees five lacs) was paid.

(ii) Section 22 of the Specific Relief Act,

can not be interpreted in a narrow compass. It

would be within the powers of the Court to grant

refund of the amount. Even if the agreement is

void or the contract voidable, still, the

plaintiffs are entitled for refund of the amount.

To buttress his submission, he relied on the

judgments of the Apex Court in a case of "Tarsem

Singh Vs. Sri Sukhminder Singh" AIR 1998 Supreme

Court 1400, in a case of "Ganesh Shet Vs.

Dr.C.S.G.K.Setty and others" AIR 1998 Supreme

Court 2216. The learned counsel also relied on

the judgment of the learned Single Judge of this

Court in a case of "Maroti Shroba Sonder Vs.

Balaprasad Govardhandas and others" decided on

10.7.1981. The learned counsel laid much stress

on the judgment of the Apex Court in a case of

"Firm Sriniwas Ram Kumar Vs. Mahabir Prasad and

others" AIR 1951 Supreme Court 177. The Courts

can grant the relief for refund of the amount

even U/o 7 Rule 7 of the C.P.C.

7. With the assistance of the learned

counsels for the respective parties, I have gone

through the judgments, the pleadings and the

evidence on record. Before I proceed to deal

with the arguments and the legal propositions

canvassed by them, it would be appropriate to

refer to the relevant provisions :

Section 22 of the Specific Relief Act -

             "22.         Power       to     grant        relief       for

             possession,           partition,             refund         of
              
             earnest            money,          etc.          -        (1)

             Notwithstanding                 anything          to      the
      

             contrary       contained           in    the      Code      of
   

Civil Procedure, 1908 (5 of 1908),

any person suing for the specific

performance of a contract for the

transfer of immovable property may,

in an appropriate case, ask for -

             (a)            possession,              or      partition





             and        separate         possession,           of      the

             property,          in        addition           to       such

             performance; or

             (b)            any other relief to which

             he    may     be    entitled,           including         the








       refund     of    any           earnest      money        or




                                                                  

deposit paid or (made by) him, in

case his claim for specific

performance is refused.

       (2)         No relief under clause (a)

       or    clause     (b)       of    sub-section           (1)

shall be granted by the Court unless

it has been specifically claimed :

ig Provided that where the

plaintiff has not claimed any such

relief in the plaint, the Court

shall, at any stage of the

proceeding, allow him to amend the

plaint on such terms as may be just

for including a claim for such

relief.

       (3)         The power of the Court to

       grant    relief        under       clause        (b)     of

       sub-section          (1)       shall     be      without





       prejudice       to     its      powers        to    award

compensation under Section 21."

Order VII Rule 7.

Rule 7. Relief to be specifically

stated.-Every plaint shall state

specifically the relief which the

plaintiff claims either simply or in

the alternative, and it shall not be

necessary to ask for general or

other relief which may always be

given as the Court may think just to

the same extent as if it had been

asked for. And the same rule shall

apply to any relief claimed by the

defendant in his written statement."

8. The finding that the appellants

pursuant to the agreement of sale in question

did not intend to sell the property and the said

document was in fact, as a security for the loan

advanced by the Respondents to the appellants has

not been assailed by the present Respondents

either by filing a cross-objection nor any

arguments on that count have been advanced. The

limited controversy to be adjudicated in the

present appeal is :

"(i) Whether the appellants have

received Rs.5,00,000/- (Rupees five

lacs) pursuant to the agreement or

only Rs.2,00,000/- (Rupees two lacs)?

             (ii) Once        having            come          to        the

             conclusion       that           the     agreement           in




                                  

question was as a security for the

amount advanced by the Respondents

to the appellants then whether in a

suit for specific performance of

contract, refund of the said amount

can be awarded.?"

9. Regarding the finding of the trial

Court that defendants have received Rs.5,00,000/-

(Rupees five lacs) pursuant to the agreement is

concerned, the trial Court has given reasons for

the same. The parties are in near relations to

each other. The defendants had also issued a

cheque for Rs.5,00,000/- (Rupees five lacs) as

per Section 118 of the Negotiable Instruments

Act, carries with a presumption about the

consideration. There is no reason to disbelieve

the recital in the agreement to be incorrect. The

Court below has properly appreciated the oral

and documentary evidence in that regard and has

arrived at a possible and plausible conclusion

that the defendant has received Rs.5,00,000/-

(Rupees five lacs).

10. This leads to the main controversy

regarding the powers of the Court to grant the

refund of the amount after having come to the

conclusion that the transaction in question was

not an agreement of sale but as security for the

amount of loan advanced.

11. Once it is proved that the defendant is

the recipient of the amount of Rs.5,00,000/-

(Rupees five lacs) pursuant to the said agreement

then even on the basis of the principle of unjust

enrichment, the defendants would be under

obligation to pay back the said amount to the

plaintiffs. The doctrine of unjust enrichment is

an equitable doctrine. The Apex Court in a case

of "Firm Sriniwas Ram Kumar Vs. Mahabir Prasad

and others" referred supra has held thus :

"9. As regards the other point,

however, we are of the opinion that

the decision of the trial Ct. was

right and that the H.C. took an

undoubtedly rigid and technical view

in reversing this part of the decree

at the Subordinate Judge. It is true

that it was no part of the plaintiff's

case as made in the plaint that the

sum of Rs.30,000/- was advanced by way

of loan to the defts. second party.

But it was certainly open to the plff.

to make an alternative case to that

effect and make a prayer in the

alternative for a decree for money

even if the allegations of the money

being paid in pursuance of a contract

of sale could not be established by

evidence. The fact that such a prayer

would have been inconsistent with the

other prayer is not really material.

A plff. may rely upon different rights

alternatively and there is nothing in

the Civil P.C. to prevent a party from

making two or more inconsistent sets

of allegations and claiming relief

thereunder in the alternative. The

question, however, arises whether, in

the absence of any such alternative

case in the plaint it is open to the

Ct. to give him relief on that basis.

The rule undoubtedly is that the Ct.

cannot grant relief to the plff. on a

case for which there was no foundation

in the pleading and which the other

side was not called upon or had an

opportunity to meet. But when the

alternative case, which the plff.

could have made, was not only admitted

by the deft. in his written statement

but was expressly put forward as an

answer to the claim which the plff.

made in the suit, there would be

nothing improper in giving the plff. a

decree upon the case which the deft.

himself makes. A demand of the plff.

based on the deft's own plea cannot

possibly be regarded with surprise by

the latter and no question of adducing

evidence on these facts would arise

when they were expressly admitted by

the deft. in his pleadings. In such

circumstances when no injustice can

possibly result to the deft., it may

not be proper to drive the plff to

file a separate suit."

12. In the present case the defendants by

way of answer to the case of the plaintiffs

themselves have stated the said agreement as a

security document for the loan advanced and have

admitted of having received some amount under the

said agreement. It is held that

defendant/appellant has received Rs.5,00,000/-

(Rupees five lacs) under the agreement. In such

circumstances, it would be inappropriate to drive

the plaintiffs to file a separate suit.

13. Section 22 of the Specific Relief Act,

read as it is, implies that the Court can grant

the relief including the relief of refund of an

earnest money or deposit. There is nothing in

the Section which prohibits the Court from not

granting the relief of refund of the amount. The

plaintiff had filed the suit for specific

performance and in the said suit had asked for

the alternate relief for refund of the amount

paid pursuant to the agreement of sale. Simply

because the plaintiff has failed to prove that

the said agreement is an agreement to sell and

the defendant has proved that by the said

agreement the defendant never intended to sell

the property but the said agreement was as a

security for the amount of loan received by him

would not take away the case outside the ambit

and purview of clause (b) of Section 22 of the

Specific Relief Act. The phraseology of the said

Section would show that in addition to the relief

of specific performance, the plaintiffs can claim

the other reliefs. Just because the words loan

is not used that would not be sufficient to non-

suit the plaintiffs for recovery of the amount.

Section 22 gives right to party to claim various

relief so also lays down the power of the Court

to grant suitable reliefs. Clause (b) of

Section 22 of the said Act gives power to the

Court to grant relief of refund of earnest money,

deposit.

Clause (b) of Section 22 (1) of the Specific

Relief Act, 1963 is an enabling provision. It is

not restricted to relief of refund of earnest

amount or deposit but also gives power to grant

"any other relief". There is subtle distinction

between loan and deposit. The terms "Loan" and

"Deposit" are not mutually exclusive terms.

There are common features between the two. In a

sense a deposit is also a loan. Both are debts

repayable. But when the repayment is to be made

furnishes the real point of distinction between

the two concepts.

14. Moreover, clause (b) of Section 22(1)

of the Act of 1963, empowers the Court to "grant

any other relief to which he may be entitled".

This phrase "grant any other relief" has wider

connotation and import. It will take into its

fold the relief of return of the amount received

by the defendants from the plaintiffs.

15. The matter can be viewed from other

perspective. The rule of equity and justice

requires that if in fact, money has been paid by

the plaintiffs to the defendants under an

agreement, not otherwise unlawful, the defendants

should pay back the amount to the plaintiffs even

if for some reason the contract as such is not

enforceable. The law safeguards against any

unlawful enrichment at the cost of a party and

provides for restitution in all such cases.

16. "Unjust enrichment" occurs when a

person retains money or benefits which in

justice, equity and good conscience belongs to

some one else. The doctrine of "unjust

enrichment" therefore, is that no person can be

allowed to enrich himself inequitably at the

expense of another. The principle of "unjust

enrichment" proceeds on the basis that it would

be unjust to allow one person to retain a benefit

received at the expense of another person. It

provides the theoretical foundation of the law

governing restitution. A right of recovery under

the doctrine of "unjust enrichment" arises where

retention of benefit is considered contrary to

justice or against equity.

17. The principle of Restitutio in integrum

will have to be applied in such cases i.e. the

principle of restitution of the benefit.

18. Thus even on basis of the doctrine of

unjust enrichment the plaintiff would be entitled

for refund of the amount.

19. In the result, the First Appeals are

dismissed. However, there shall be no order as

to costs.

(S.V.GANGAPURWALA,J.)

asp/office/fa35510