Purushottam S/O Devidas Bhoyar vs Sau.Sheelabai W/O Kishor ...
2015 Latest Caselaw 313 Bom

    Judgment

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     IN THE HIGH COURT OF JUDICATURE AT BOMBAY,




                                                                                     
                NAGPUR BENCH, NAGPUR




                                                             
                           SECOND APPEAL NO.218 OF 2000

    Purushottam S/o Devidas Bhoyar,




                                                            
    Aged about 45 years,
    Occupation Agriculturist,
    R/o Udapur, Taluka Ner,
    District Yavatmal.                                         ..... Appellant




                                                 
               ::  VERSUS  ::      
    1.  Sau. Sheelabai W/o Kishor Shrungare,
         Aged about 30 years,
                                  
         Occupation Agriculturist,
         R/o Bhangaon, Taluka Ner,
         District Yavatmal.
      


    2.  Deleted vide order of Court
         dt.13.8.2014.                                             ..... Respondent
   



    ================================================================
              Shri Amol Mardikar, Counsel for the Appellant.
              Shri A.V. Bhide, Counsel for R-1.





    ================================================================


    CORAM : A. P. BHANGALE, J.  
    DATE OF RESERVING JUDGMENT :  August 20, 2015
    DATE OF PRONOUNCING JUDGMENT : September 10, 2015





    JUDGMENT

1. Heard learned counsel for the rival parties.

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2. By this second appeal, the appellant-plaintiff has sought

to challenge Judgment and Order dt.4.9.1999 passed by learned

District Judge, Yavatmal in Regular Civil Appeal No.112 of 1995

whereby the decree for specific performance of the suit agreement

passed in favour of the appellant-plaintiff by Judgment and Order

dt.30.6.1995 by learned Civil Judge (Sr.Dn.), Ner, District

Yavatmal in Regular Civil Suit No.57 of 1993 was modified by

refusing specific performance of the agreement to sell and granting

merely refund of the earnest money with interest.

3. The facts of the case stated, are thus :

On 23.2.2004, this Second Appeal was admitted on the

following substantial question of law :

Whether the First Appellate Court is wrong in

setting aside the findings of the trial Court on the readiness and willingness when the appellant- plaintiff was ready and willing to perform his part of the contract and there was specific pleading in the plaint?

The substantial question of law as stated above must be .....2/-

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answered in the affirmative for the following reasons :

4. The dispute between the parties relates to agricultural

land bearing Survey No.33, total admeasuring 3H 23 R, situated at

village Udapur, Taluka Ner, District Yavatmal. It is the case of the

appellant-plaintiff that respondent No.1-defendant and her

deceased husband had agreed to sell southern portion of the said

land admeasuring 1H 21R to the appellant/plaintiff by an

agreement to sell dt.7.4.1991 for valuable consideration of

Rs.15,000/-. The appellant-plaintiff had paid substantive part of

consideration in the form of earnest money in the sum of Rs.9,000/-

to respondents-defendants and balance amount of consideration in

the sum of Rs.6,000/- was payable on 18.1.1992 when the parties

had agreed to execute the registered sale deed. Thus, agreement to

sell was entered into (Exh.45). It is the case of the

appellant/plaintiff that he had gone to the Office of the Sub

Registrar, Ner, District Yavatmal on 19.1.1992. The appellant-

plaintiff had purchased the Stamp Paper (Exh.46) to show his

presence in the Office of Sub Registrar, Ner to execute the

registered sale deed as agreed between the parties, but the .....3/-

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respondents-defendants did not turn up in the Office of Sub

Registrar to execute the registered sale deed as agreed.

5. On the next day, the appellant-plaintiff went to the house

of respondents-defendants to question them about their absence for

execution of the registered sale deed as agreed. At that time, the

respondents-defendants assured that they would execute the

registered sale deed within 8 to 12 days. The appellant-plaintiff

waited and since there was no response from the respondents-

defendants, the appellant-plaintiff served notice dt.21.4.1993

(Exh.47) calling upon the respondents-defendants to appear in the

Office of the Sub Registrar on 30.4.1993 and to execute the

registered sale deed as agreed between the parties.

6 Accordingly, on the date appointed, the appellant-

plaintiff though attended the Office of the Sub-Registrar again on

30.4.1993 and also purchased Stamp Paper to show his presence in

the Office of the Sub Registrar to get the registered sale deed

executed as agreed between the parties, but the respondents-

defendants did not turn up even on that extended date. Thus, .....4/-

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ultimately, with no other alternative left for the appellant-plaintiff,

he was constrained to file the suit for specific performance of

contract to insist upon execution of the registered sale deed as

agreed or in the alternative, refund of the earnest money along

with interest accrued thereupon.

7. Regular Civil Suit No.57 of 1993 was instituted on

1.10.1993 after the respondents-defendants by their reply (Exh.57)

dt.31.5.1993, acknowledged on 3.6.1993 by the appellant-plaintiff,

refused to execute the registered sale deed as agreed between the

parties. Regular Civil Suit No.57 of 1993 instituted in the Court of

learned Civil Judge (Jr.Dn.), Ner, District Yavatmal was decided by

Judgment and Order, dt.30.6.1995. Learned Judge of the trial

Court found that the respondents-defendants had entered into the

agreement to sell dt.7.4.1991 in respect of the aforesaid agricultural

land admeasuring 1H, 21R out of agricultural land bearing Survey

No.33, total admeasuring 3H, 23 R, situated at village Udapur,

Taluka Ner, District Yavatmal. Learned Judge of the trial Court

further found that the appellant-plaintiff had proved payment of

earnest money in the sum of Rs.9,000/- pursuant to the agreement .....5/-

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to sell dt.7.4.1991 and that the appellant-plaintiff was ready and

willing to perform his part of the contract in the said agreement to

execute the registered sale deed.

8. The defence put up by the respondents-defendants was

that the suit transaction is in the nature of security for loan and

that the appellant-plaintiff does a money lending business and

furthermore that the respondents-defendants have the only source

of income from the agricultural land. After recording the evidence

led by the parties and hearing the parties, findings in favour of the

appellant-plaintiff were recorded and the suit was decreed with

costs. In the result, the respondents-defendants were directed to

execute the registered sale deed of the suit property admeasuring

1H, 21R in favour of the appellant-plaintiff within three months

from the date of the decree at the costs of the appellant-plaintiff.

The appellant-plaintiff was directed to deposit remaining amount of

Rs.6,000/- of consideration agreed within three months from the

date of order in the Court and the amount was directed to paid to

the respondents-defendants upon execution of the registered sale

deed. The trial Court also directed that if the respondents-

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defendants fail to execute the registered sale deed, the appellant-

plaintiff is entitled to get it executed through the Court.

9. Shri Amol Mardikar, learned counsel for the appellant-

plaintiff, submits that the unsuccessful respondents-defendants

preferred First Appeal before the learned District Judge, Yavatmal

being Regular Civil Appeal No.112 of 1995. Learned Appellate

Judge too found that the respondents-defendants had agreed to sell

the suit property and that the appellant-plaintiff had paid earnest

money in the sum of Rs.9,000/- to the respondents-defendants

pursuant to agreement to sale dt.7.4.1991. Learned Appellate

Judge, however, held that the appellant-plaintiff was not always

ready and willing to perform his part of the contract. In the result,

therefore, the decree for specific performance of contract granted by

the trial Court was set aside and instead, order was made merely

for the refund of the earnest money with interest at the rate of 15%

per annum by way of damages to the appellant-plaintiff since

7.4.1991 till realization of the entire amount.

10. Learned Counsel for the appellant-plaintiff vehemently .....7/-

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submits that learned Appellate Judge failed to exercise judicial

discretion in favour of the appellant-plaintiff, though, according to

him, the agreement to sell was proved and established by the

appellant-plaintiff and also he was and is always ready and willing

to perform his part of the contract.

11. Shri Amol Mardikar, learned Counsel for appellant-

plaintiff, took me through the evidence led before the trial Court

and submits that the appellant-plaintiff in his deposition (Exh.44)

deposed about the suit transaction of agreement to sell duly

executed by the respondents-defendants. The appellant-plaintiff,

pursuant to the agreement to sell had attended the Office of the

Sub-Registrar and also purchased Stamp Paper on two occasions as

deposed, but despite agreement to sell, the respondents-defendants

avoided to execute the registered sale deed in favour of the

appellant-plaintiff. The respondents-defendants were called upon

by notice dt.21.4.1993 (Exh.47) to execute the registered sale deed

in favour of the appellant-plaintiff, but despite their all earlier

assurances to execute the registered sale deed in favour of the

appellant-plaintiff, they continued to avoid their liability to perform .....8/-

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their part of the contract to execute the registered sale deed in

favour of the appellant-plaintiff.

12. Shri Amol Mardikar, learned Counsel for the appellant-

plaintiff, submits that there was no challenge by the respondents-

defendants to the evidence of continuous readiness and willingness

to perform his part of the contract by the plaintiff in order to get

the registered sale deed executed in respect of the suit property. It

is, therefore, submitted that the appellant-plaintiff was entitled to

insist upon specific performance of the contract with the

respondents-defendants pursuant to which substantial part of

consideration as agreed in the sum of Rs.9,000/- was already paid

to the respondents-defendants and the balance consideration in the

sum of Rs.6,000/- was to be paid on the date when the registered

sale deed was to be executed. Shri Mardikar, learned Counsel,

criticised the Judgment and Order passed by the learned Appellate

Judge on the ground that there was no justification for the learned

First Appellate Judge to refuse to exercise judicial discretion in

favour of the plaintiff; particularly when the respondents-

defendants despite pendency of the appeal had intended to defeat .....9/-

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the suit by attempting selling the suit property in favour of one

Ramnath Pandharinath Vidhate and others who sought to

interevene in the present appeal on the ground that they are

claiming under the respondents-defendants alleging that they are

subsequent purchasers from the respondents-defendants in respect

of the suit property. According to Shri Mardikar, learned Counsel,

in view of Section 52 of The Transfer of Property Act, 1882, the

intervenors claiming to be subsequent purchasers under the

respondents-defendants have no locus standi as such to

participate in the hearing of the Second Appeal upon substantial

question of law for want of any privity of the contract between the

intervenors and the appellant-plaintiff. Shri Mardikar, learned

Counsel, submits that the appellant-plaintiff is legally entitled to

insist upon execution of the registered sale deed pursuant to the

agreement to sell executed from the respondents-defendants.

Therefore, substantial question of law ought to be answered in

favour of the appellant-plaintiff as it was wrong on the part of the

learned Appellate Judge to set aside the findings recorded by

learned trial Judge based upon the evidence led by the parties and

the provisions of law under the Specific Relief Act, 1963.

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13. Shri Mardikar, learned Counsel, also refers to Sections

16(c) and 20 of the Specific Relief Act, 1963 in order to submit that

the appellant-plaintiff is entitled to the benefit of judicial discretion

to insist upon execution of the registered sale deed from the

respondents-defendants pursuant to specific performance of

agreement to sell.

14. Shri A.V. Bhide, learned counsel for respondent No.1-

defendant, opposes the submissions made by Shri Amol Mardikar,

learned Counsel for the appellant-plaintiff. Shri Bhide, learned

Counsel, submits that he also appears for the intervenors who

sought to intervene on the ground that they are subsequent

purchasers from respondents-defendants. According to him, the

appellant-plaintiff had failed to establish continuous readiness and

willingness to get the sale deed executed from the defendants.

15. Shri Bhide, learned Counsel, has placed reliance on the

case of J.P. Builders and another ..vs.. A. Ramdas Rao and

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another, reported at (2001)1 SCC 429 in order to submit that the

appellant-plaintiff must plead and prove his continuous readiness

and willingness as condition precedent to insist upon the specific

performance of agreement to sell and failure to aver and prove such

continuous readiness and willingness on the part of the appellant-

plaintiff must result in the failure of the suit for specific

performance of the contract. According to Shri Bhide, learned

Counsel, the purchasers pendente lite are not bound by the

Judgment and Order by which the learned Appellate Judge had

refused to grant specific performance.

16. Having heard the rival submissions and the substantial

question of law formulated, Section 52 of The Transfer of Property

Act, 1882 cannot be ignored which runs thus :

52. Transfer of property suit relating thereto -

During the [pendency] in any Court having authority [ [within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by [the Central Government] {***] of [any] suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the

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property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to

affect the rights of any other party thereto under any decree or order which may be made therein,

except under the authority of the Court and on such terms as it may impose.

[Explanation. - For the purposes of this section, the

pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue

until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or

discharge of such decree or order has been obtained, or has become unobtainable by reason of

the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.

17. Thus, pending disposal of the suit or the proceedings,

right to immovable property is directly and specifically in question;

the suit property cannot transferred or disposed of so as to affect

the right of the other party under any decree or order. The

explanation to Section 52 of the Transfer of Property Act also

clarifies that pendency of the suit commences from the date of

presentation of the plaint or the institution of the proceeding in a

Court of competent jurisdiction and to continue until the suit or

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proceeding has been disposed of by a final decree or order and

complete satisfaction or discharge of such decree or order has been

obtained, or has become unobtainable by reason of the expiration of

any period of limitation prescribed for the execution thereof by any

law for the time being in force.

18. In my view, the respondents-defendants in the suit

cannot be allowed to create a situation whereby right of the

appellant-plaintiff in the suit is defeated due to transaction

between the alleged subsequent purchasers and the respondents-

defendants. The subsequent purchasers claiming under the

respondents-defendants may have their remedy as against the

respondents-defendants to claim damages for breach of agreement,

if any, with the respondents-defendants, but such subsequent

purchasers claiming under the respondents-defendants in the

absence of privity of contract with the appellant-plaintiff are not

entitled to defeat otherwise sustainable decree by seeking to

intervene and participate at the hearing of the second appeal. That

being so, Civil Application No.2848 of 2004 for grant of permission

to add the subsequent purchaser as respondent preferred by the .....14/-

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appellant must be rejected with costs.

19. Regarding agreement to sell which is executed and

proved between the appellant-plaintiff and the respondents-

defendants, in view of Section 16(c) read with Section 20 of the

Specific Relief Act, 1963, when the respondents-defendants have

denied their liability to execute the sale deed despite legal notice

issued from the appellant-plaintiff to them, it was clear that the

respondents-defendants were evasive to perform their part of the

contract to execute the registered sale deed, though the plaintiff

had attended the Office of the Sub Registrar on the appointed date,

defendants failed to perform their part of the contract. The

appellant-plaintiff had approached them again and the

respondents-defendants had assured the appellant-plaintiff to

execute the registered sale deed. Since the respondents-defendants

had failed to comply with the same, the appellant-plaintiff issued

legal notice calling upon the respondents-defendants to execute the

registered sale deed, but they avoided by alleging money lending

transaction on the part of the appellant-plaintiff without adducing

any evidence to prove it. The respondents-defendants dishonestly .....15/-

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tried to defeat the suit for specific performance by the appellant-

plaintiff. All these facts could not have been ignored by the learned

Appellate Judge who refused to confirm the decree for specific

performance of the contract in favour of the appellant-plaintiff

despite the clear findings recorded by learned trial Judge upon

evidence led before it. The decree passed by the trial Court could

not have been brushed aside lightly. The legal position cannot be

disputed that it is an ordinary rule that the specific performance of

contract ought to be granted when the appellant-plaintiff was ready

and willing to perform his part of the contract. The appellant-

plaintiff had parted with substantial payment of consideration

agreed by paying earnest money and was/is ready and willing to

perform his part of the suit agreement to sell.

20. In the case of R.C. Chandiok and another ..vs.. Chuni

Lal Sabharwal and others, reported at 1970(3) SCC 140, the

Hon'ble Apex Court observed that the readiness and willingness

cannot be treated as a straight-jacket formula and issue has to be

decided keeping in view of the facts and circumstances relevant to

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the intention and conduct of the party concerned. This view was

also reiterated in the ruling of P.D'souza ..vs.. Shondrilo Naidu,

reported at (2004)6 SCC 649. It is true that continuous readiness

and willingness on the part of the appellant-plaintiff is a condition

precedent to grant the relief of specific performance. Now, the

material and relevant circumstances which are required to be

considered by the Court whereby the appellant-plaintiff led

evidence about his persistence of readiness and willingness to

perform his part of the contract, such evidence showing readiness

and willingness to perform his part of the contract cannot be

ignored. It was not the case of the respondents-defendants that the

appellant-plaintiff was not ready and willing to pay balance

amount of consideration which he was required to pay to the

respondents-defendants. The respondents-defendants wanted to

defeat the suit on the ground that the appellant-plaintiff is money

lender but they miserably failed to prove the allegations made

against the appellant-plaintiff. The evidence led by the appellant-

plaintiff in the facts and circumstances that he attended twice the

Office of the Sub Registrar, he had purchased stamp paper, he

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waited for the respondents-defendants, he had again approached

the respondents-defendants on next day, the respondents-

defendants had assured the appellant-plaintiff that they would

execute the sale deed, but they did not comply the same and

furthermore that the appellant-plaintiff was constrained to issue

legal notice and despite receipt of such legal notice, the

respondents-defendants by their persistent conduct of evasiveness

refused to perform their part of the contract was totally ignored by

the learned Appellate Judge. It is true that, under Section 20 of

the Specific Relief Act, 1963, it is the discretion of the Court to

grant decree for specific performance, but such discretion is a

judicial discretion. It cannot be arbitrary but must be sound and

reasonable guided by judicial principles. There cannot be

unreasonable denial of equitable relief.

21. It was the case where the appellant-plaintiff had averred

and established his readiness and willingness to perform his part of

the contract but the respondents-defendants continued to avoid to

execute the registered sale deed on some pretext or the other

pursuant to the suit agreement to sell. Therefore, the learned .....18/-

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Appellate Judge ought not to have refused remedy of specific

performance of agreement to sell, as prayed for by the appellant-

plaintiff. The averment of readiness and willingness is not a

mathematical formula. There was evidence that the appellant-

plaintiff was/is all along ready and willing to abide by his

contractual obligation while the respondents-defendants

continuously were avoiding to perform their respective part of the

contract. In my opinion, the appellant-plaintiff was entitled to

insist upon specific performance of the suit agreement to sell. The

discretionary relief ought to have been granted in favour of the

appellant-plaintiff in the facts and circumstances of the case.

22. Shri A.V. Bhide, learned Counsel, argues that there was

a delay on the part of the appellant-plaintiff to approach the Court

of learned Civil Judge (Jr.Dn.) within reasonable time. However, it

was not the case of the respondents-defendants in the trial Court

that time was essence of the contract to execute the registered sale

deed as agreed between the parties. The appellant-plaintiff was

ready and willing to perform his part of the contract within

reasonable time and looking to the circumstances including express .....19/-

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terms of the contract and the nature of the suit property, the

appellant-plaintiff had approached the Court with clean hands and

was/is entitled for the relief of specific performance of the contract.

23. Section 10 the Specific Relief Act reads thus:-

10. Cases in which specific performance of contract enforceable.- Except as otherwise provided in this

Chapter, the specific performance of any contract may, in the discretion of the court, be enforced-

(a) when there exists no standard for ascertaining

the actual damage caused by the non- performance of

the act agreed to be done; or

(b) when the act agreed to be done is such that compensation in money for its non- performance

would not afford adequate relief. Explanation.- Unless and until the contrary is proved, the court shall presume-

(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and

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24. The provision clearly indicates that when an obligation

enforceable by law is created, the party under the obligation cannot

be allowed to escape from it on flimsy excuse especially in a

transaction wherein a promise is made to transfer valuable

immovable property.

25.

There must be proof of a proper explanation or

justification from the defendant to avoid the agreement or for the

delay that has occurred to execute the sale deed in favour of the

plaintiff. In the aforesaid manner, the burden lies on both the

parties to prove their respective contentions. True it is that, specific

performance of a contract is an equitable relief and equity of both

the sides has to be weighed. Prices of immovable property do

escalate. As a general rule, one cannot say that ordinarily the

plaintiff cannot be allowed to have, for him alone, the entire benefit

of phenomenal increase of the value of the suit property during the

pendency of the litigation. While balancing the equities, one of the

consideration to be kept in view is as to who is the defaulting party.

It is also to be borne in mind whether any party is trying to take .....21/-

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undue advantage over the other party as also the hardship that

may be caused to the defendant by directing the relief of specific

performance. There may be other circumstances upon which parties

may not have any control. Totality of the circumstances in the case

is required to be seen. Ordinarily, as of rule, the relief of specific

performance ought to be granted and only rarely the relief of

specific performance is to be denied. In the present case, the

defendants were the defaulting party for delay that has occurred to

get the sale deed executed as agreed and the defendant was

responsible for escalated cost of the registration, stamp duty and

increase to the current ready reckoner price at which the sale deed

is expected to be executed. The increased expenses will have to be

borne by the plaintiff as it is for the plaintiff to get the sale deed

executed at market price as applicable on the date of the sale deed.

In my opinion, if at all the remedy of specific performance of

contract cannot be availed of, then only, the sum of damages may be

considered as an alternative. But it must be ensured that the sum

must be sufficient and exemplary enough to discourage rampant

breach of obligation under the agreement to sell. In such cases,

damages may be awarded by way of grant of higher interest, if for .....22/-

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any reason specific relief of performance cannot be granted, then

only the trial Judge may grant alternative relief of appropriate

damages. I, therefore, reject the argument of the learned Counsel

for the defendant-respondent that specific performance cannot be

granted and at the most, only damages should be awarded. This

was the case where the respondents-defendants tried to raise false

defences in order to avoid execution of the registered sale deed and

by their conduct, the respondents-defendants attempted to create

third party interest intending to defeat the fruits of the decree for

appellant-plaintiff even while the proceedings remained pending for

final decision before the Court. These facts could not have been

ignored by the learned Appellate Judge. The evidence led on record

indicates that the appellant-plaintiff was not only ready but also

willing to perform his part of the contract in order to get the

registered sale deed executed in accordance with law. That being

so, the second appeal succeeds.

26. In view of above, the Second Appeal is allowed. The

Judgment and Order dt.4.9.1999 passed by learned District Judge,

Yavatmal in Regular Civil Appeal No.112 of 1995 is set aside. The .....23/-

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Judgment and Order dt.30.6.1995 passed by the learned Civil

Judge (Jr.Dn.), Ner, District Yavatmal in Regular Civil Suit No.57

of 1993 is restored accordingly with a direction that registered sale

deed shall be executed for consideration at current market ready

recknor price of the suit land as applicable on the date of the sale

deed. In the event the plaintiff fails to get the sale deed executed

accordingly, the alternative prayer shall stand as decreed in terms

of refund of earnest money with interest at the rate of Rs.15 % p.a.

from the date of the suit till full repayment.

Decree accordingly with costs of the suit.

JUDGE

!! BRW !!

.....24/-