Bombay High Court
Vinayak Nagorao Kullarwar Thr. ... vs Sudhir S/O Vishnupant Kullarwar ... on 29 September, 2017
Bench: A.S. Chandurkar
SA159.17.odt 1/13
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
SECOND APPEAL NO.159 OF 2017
APPELLANTS: 1. Vinayak Nagorao Kullarwar (Dead)
Through Legal Representatives:
(Ori. Defendant)
a) Vijay S/o Vinayakrao Kullarwar, aged
about 64 years, R/o 12, Sitla Darshan,
Opp. Sitladevi Temple, Lady Jamshetji
Road, Mahim, Mumbai-16.
b)
Anil S/o Vinayakrao Kullarwar, aged
about 62 years, R/o B-902,
Priyadarshani, 62, Bhawani Shankar
Road, Dadar West, Mumbai-28.
-VERSUS-
RESPONDENTS: 1. Sudhir S/o Vishnupant Kullarwar, Aged
(Ori. Plaintiffs) about 61 years, Occ. Service,
2. Sampada W/o Sudhira Kullarwar, Aged
about 52 years, Occupation-Service,
Both R/o Flat No.B, 1st Floor, Ashirwad,
73, Ramnagar, Nagpur-440 010.
Shri B. B. Mehadia, Advocate for the appellant.
Shri M. G. Bhangde Senior Advocate with Shri Jayant Mokadam,
Advocate for the respondent Nos.1 and 2.
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SA159.17.odt 2/13
CORAM: A.S. CHANDURKAR, J.
DATED: SEPTEMBER 29, 2017.
ORAL JUDGMENT :
1. The unsuccessful defendant against whom decree for
specific performance of agreement dated 5-5-1997 has been passed
has filed this second appeal.
2. The respondents claim that on 5-5-1997 they had
entered into an agreement to purchase three flats for a total
consideration of Rs.11,00,000/- from the appellant - defendant.
As per the terms of the agreement, Rs.4,00,000/- were paid as
earnest amount by Demand Draft and the balance amount of
Rs.7,00,000/- was to be paid when the sale deed was to be
executed within a period of six months from the date of the
agreement. According to the plaintiffs, they had applied for a loan
of Rs.7,00,000/- from a financial institute and a cheque dated
22-7-1997 payable to the defendant was issued. It is the case of
the plaintiffs that despite their readiness and willingness to
complete the transaction, the defendant avoided to execute the
sale deed on false pretext. The defendant despite being called
upon to execute the sale deed refused to do so and hence, after
issuing a legal notice suit for specific performance of the
agreement came to be filed.
SA159.17.odt 3/13
3. According to the defendant, the agreement dated
5-5-1997 was not enforceable inasmuch as the same was
terminated on 17-2-2000. It was pleaded that the plaintiffs were
not ready and willing to complete their part of the transaction and
necessary documents that were essential for executing the sale
deed were not got prepared by the plaintiffs.
4. After the parties led evidence, the trial Court held that
the plaintiffs were ready and willing to perform their part of the
agreement and that it had not been terminated by the defendant.
After holding the agreement to be subsisting the trial Court
decreed the suit. The first appellate Court confirmed this decree.
Being aggrieved this second appeal has been filed.
5. Shri B.B. Mehadia, learned Counsel for the appellant in
support of the appeal made following submissions:
(a) The suit for specific performance was not maintainable
in view of the fact that the defendant had already
terminated the agreement on 17-2-2000. This action of
the defendant was not challenged in the suit and as
the termination of the agreement remained
unchallenged, no relief of specific performance could
be granted to the plaintiffs. In this regard, he placed
reliance on the decisions in I. S. Sikandar (D) by Lrs.
SA159.17.odt 4/13
vs. K. Subramani & Ors. 2013(15) SCC 27 and C.
Padmawati Naidu and others vs. Friends Cooperative
Hsg. Society Ltd Nagpur and others 2016 (4) Mh.L.J.
(b) Without prejudice, it was submitted that the plaintiffs
were not ready and willing to perform their part of the
contract. The time was in fact essence of the
agreement and despite notices dated 23-11-1998 and
13-7-1999 issued by the defendant, the plaintiffs did
not appear to be ready and willing to complete the
transaction. The balance payment which was required
to be made as per the decree passed by the trial Court
within a period of three months was also not made. As
the plaintiffs were at fault in not having all the
necessary documents being kept ready, they were not
entitled for the relief of specific performance. In that
regard, the learned Counsel placed reliance on the
decisions in Gomathinayagam Pillai and Ors vs.
Pallaniswami Nadar AIR 1967 SC 868 and
Padmakumari and others vs. Dasayyan and others
(2015)8 SCC 695.
(c) The plaintiffs had offered the balance payment by way
SA159.17.odt 5/13
of a bankers cheque and such offer indicated
conditional payment of the balance amount. It was
submitted that payment by cheque was conditional
payment while the payment by draft would result in
absolute payment. It was not expected of the
defendant to execute the sale deed merely on the basis
of conditional payment that was being offered by the
plaintiffs and therefore it was rightly insisted by the
defendant that such payment should be made by
Demand Draft. Similarly, for the purposes of seeking
income tax clearance for executing the sale deed, it
was necessary that the draft sale deed ought to have
been submitted and not a copy of the agreement. The
plaintiffs had admitted that only the agreement had
been submitted for obtaining the income tax clearance.
Due to this such clearance could not be obtained
within time. He also referred to the communication
issued by the defendant in that regard.
(d) The aspect of hardship had not been considered by
both the Courts despite the fact that there was
evidence led by the defendant in that regard.
Executing the sale deed in favour of the plaintiffs
SA159.17.odt 6/13
would result in undue hardship to the defendant and
on that count also no relief of specific performance
could have been granted in favour of the plaintiffs.
In view of aforesaid, it was submitted that both the
Courts committed an error in decreeing the suit for specific
performance. Moreover, the relevant material had either not been
considered and irrelevant aspects had been taken into
consideration by both the Courts. These aspects gave rise to
substantial questions of law.
6. In reply, Shri M. G. Bhangde, learned Senior Counsel
made the following submissions:
(a) It was not necessary to challenge the termination of
the contract in view of the fact that this termination
had taken place subsequent to the filing of the suit.
The agreement having been terminated on 17-2-2000
and the suit having been filed much prior thereto on
29-10-1998, it was not necessary to challenge the
termination of the agreement. Moreover, no plea in
that regard was raised in the written statement.
Reliance in this regard was placed on the decision in
A. Kanthamani vs. Nasreen Ahmed (2017) 4 SCC 654.
(b) The plaintiffs were always ready and willing to
SA159.17.odt 7/13
perform their part of the agreement. This was clear
from the conduct of the plaintiffs and the fact that the
balance amount had been kept ready by them after
obtaining loan from a financial institution. It was only
because of the insistence of the defendant that the
balance payment should be made by demand draft that
the plea was being raised that the time was essence of
the contract.
(c) The balance payment having been offered pursuant to
the loan obtained by the plaintiffs, the grievance
sought to be raised that the payment being made by
cheque was conditional payment had no substance.
The claim made in that regard by the defendant was
unfounded.
(d) In so far as obtaining of clearance from the Income Tax
Department is concerned, the same was required to be
done by the defendant. The evidence on record
indicated that the same could not be obtained due to
the conduct of the defendant.
(e) Both the Courts having held that the plaintiffs were
ready and willing to perform their part of the
agreement and there being no pleadings as to
SA159.17.odt 8/13
hardship that was likely to be caused to the defendant,
the said aspect did not arise for consideration. The
findings recorded by both the Courts were based on
evidence available on record and hence, no substantial
question of law arose for consideration.
7. I have heard the learned Counsel for the parties at
length and I have given due consideration to their respective
submissions. The agreement dated 5-5-1997 and its terms are not
in dispute. As per this agreement, the defendant agreed to sell
three flats to the plaintiffs for consideration of Rs.11,00,000/-. The
amount of Rs.4,00,000/- was paid by demand draft on the date of
the agreement itself and the balance amount was to be paid within
a period of six months from the date of the agreement. In the
agreement itself, it was stated that the plaintiffs would be
obtaining loan from a financial institution to make the balance
payment. The requisite permissions were to be obtained by the
defendant and the sale deed was to be executed within a period of
six months. The evidence on record indicates that after the
agreement was entered into, the plaintiffs obtained financial
assistance so as to arrange for the balance payment and cheque
dated 23-7-1997 for Rs.7,00,000/- was received by them.
Similarly, the requisite stamps were purchased and the registration
SA159.17.odt 9/13
charges were also deposited by the plaintiffs.
The defendant in his cross-examination admitted that
the draft sale deed with corrections were sent to him by the
plaintiffs. He also admitted to have received the telegram dated
14-10-1998 by which the plaintiffs called upon the defendant to
remain present for having the sale deed executed. He further
admitted that the plaintiffs from time to time informed him that
HDFC Banker's Cheque of Rs.7,00,000/- was ready and that he
refused to accept the same as it was not a demand draft. He
however admitted that the cheque issued by the HDFC Bank was
as good as the demand draft. It was also admitted by him that it
was not agreed as a term of the contract that the payment should
be made only by demand draft.
8. The notice dated 05-10-1998 and telegram dated
14-10-1998 issued by the plaintiffs are admittedly received by the
defendant. The suit was filed on 29-10-1998. After the suit was
filed, the first notice issued by the defendant is dated 23-11-1998
at Exhibit-110. The next notice issued by the defendant is on
13-7-1999 at Exhibit-111 and ultimately the agreement was
terminated by the defendant on 17-2-2000 as per Exhibit-113. It is
thus clear that even before the agreement could be terminated the
suit has been filed for specific performance. In this backdrop
SA159.17.odt 10/13
therefore it was not necessary for the plaintiffs to seek a
declaration as to illegal termination of the agreement. The
decisions in I. S. Sikandar and others and C. Padmawati Naidu and
others (supra) are clearly distinguishable in view of the facts of the
present case which indicate that the agreement was sought to be
terminated after filing of the suit. In the aforesaid decisions the
suit had been filed after termination of the agreement and hence,
the ratio of those decisions do not support the case of the
defendant. In any event, the decision in I.S. Sikandar (supra) has
been distinguished by the Hon'ble Supreme Court in its subsequent
decision in A. Kanthamani (supra). This contention therefore
cannot be accepted.
9. The findings as regards readiness and willingness of
the plaintiffs and as to the time being the essence of the agreement
are findings of fact which have been answered in favour of the
plaintiffs. There is sufficient evidence on record to indicate that
after the agreement dated 5-5-1997 the plaintiffs obtained
financial assistance and thereafter an amount of Rs.7,00,000/- was
ready with them in the form of a bankers cheque. Its photocopy
was also sent to the defendant who thereafter started insisting for
payment by Demand Draft. His stand in that regard does not have
any substance in view of his admission that the bankers cheque
SA159.17.odt 11/13
issued by the HDFC Bank was as good as a demand draft. In any
event, it not being an agreed condition between the parties that
payment should be only by demand draft, the insistence of the
defendant in that regard was uncalled for. Similarly, considering
the admission of the defendant that the draft sale deed with
corrections was exchanged between the parties, it could not be
said that the plaintiffs had not taken any steps whatsoever to
complete the transaction. The no objection was also obtained by
the plaintiffs on behalf of the defendant. The defendant admitted
that the plaintiffs desired to execute the sale deed within six
months and hence they were contacting him from time to time. In
that view of the matter, the decisions in Gomathinayagam Pillai
and Padmakumari and others (supra) do not assist the case of the
defendant.
As regards hardship that was likely to be caused to the
defendant if the decree for specific performance was passed there
were no pleadings in that regard in the written statement. It is well
settled that if the defendant seeks to rely upon the plea of hardship
that is likely to be caused if the decree for specific performance is
passed, the said aspect has to be specifically pleaded and proved.
Perusal of the written statement indicates that there are no such
pleadings as to the probable hardship to the defendant.
SA159.17.odt 12/13
10. Though it was urged on behalf of the defendant that in
terms of the decree passed by the trial Court, the plaintiffs did not
deposit the balance consideration within a period of three months,
said submission also cannot be accepted. The decree as passed
directs the defendant to execute the sale deed after obtaining
requisite permission, clearances and no objections from various
competent authorities and thereafter execute the sale deed within
a period of three months from receiving the balance consideration.
It is not the case of the defendant that despite obtaining all such
necessary documents along with requisite permissions, clearances
and no objections, the plaintiffs had avoided to deposit the balance
consideration. The record indicates that after the decree was
passed, the defendant challenged the same by filing the appeal
immediately within the period of limitation. Hence, on this count
also the decree is not liable to be set aside.
11. I therefore find that both the Courts after considering
the entire evidence on record have rightly found the plaintiffs
ready and willing to perform their part of the agreement. The
defence as sought to be raised by the defendant has rightly not
found favour with both the Courts. The findings as to readiness
and willingness based on the conduct of the parties are the
findings of fact which do not require any interference. The second
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appeal does not give rise to any substantial question of law. It is
therefore dismissed with no order as to costs.
JUDGE
/MULEY/
