Maroti S/O Bhiwaji Hatwar vs Dada S/O Dashrath Mangrulkar
2018 Latest Caselaw 1234 Bom

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                        NAGPUR BENCH, NAGPUR.

                       SECOND APPEAL (SA) NO. 363 OF 2017

Maroti s/o Bhiwaji Hatwar,
aged about 65 years, Occupation
Business, R/o Parsodi, Tah. 
Bhandara, District Bhandara.                                      ... APPELLANT

                                          VERSUS

Dada s/o Dashrath Mangrulkar,
aged about 65 years, Occupation 
Agriculturist, R/o Shastri Nagar, 
Plot No.328, Nagpur, Tah. and 
District Nagpur.                                                  ... RESPONDENT

                                      ....
Shri S.V. Sohoni, Advocate for the appellant.
Shri A.Z. Jibhkate, Advocate for the respondent.
                                      ....


                                        CORAM : MANISH PITALE, J.

DATE OF RESERVING THE JUDGMENT  : 06TH APRIL, 2018.

DATE OF PRONOUNCING THE JUDGMENT : 19TH APRIL, 2018.


JUDGMENT : 

Heard. Admit. Heard finally with the consent of the learned

Counsel appearing on behalf of the respective parties.

2. The appellant is the original defendant, who has suffered a

decree of specific performance concurrently granted by the two Courts

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below and his principal contention is that even if such decree stood

granted against him, he is not liable to handover possession of the suit

property to the respondent-purchaser, because the agreement to sell does

not contain a specific stipulation that upon execution of sale deed, the

appellant (seller) shall handover possession of the suit property to the

respondent/decree holder.

3. The respondent (original plaintiff) filed Special Civil Suit No. 16

of 2000 against the appellant (original defendant) seeking specific

performance of agreement dated 12.03.1997 executed between the parties.

The subject matter of the aforesaid agreement to sell was land at Gat No.

41/2 in village Parsodi, Tahsil and District Bhandara admeasuring 0.70

hectare owned by the appellant. The said agreement dated 12.03.1997

recorded that out of total consideration of Rs. 2,18,750/-, a sum of

Rs.1,55,000/- had been paid by the respondent to the appellant and that

the balance amount of Rs.63,750/- was to be paid by the respondent at the

time of registration of the sale deed. It was agreed that the sale deed would

be executed by 31.03.1998. It was the case of the respondent that while he

was ready and willing to perform his part of the said contract, the appellant

avoided to do so, compelling him to file the aforesaid suit for specific

performance.

4. The appellant filed his written statement and denied the said

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agreement, claiming that it was nothing but a document of security

executed by him in favour of the respondent as they were having business

transactions pertaining to purchase of cement and iron from the shop of

the respondent. On the basis of the pleadings and the evidence led by the

parties, by judgment and order dated 22.04.2003, the trial Court decreed

the suit and directed the appellant to execute sale deed in terms of the

aforesaid agreement upon receiving balance amount and to deliver

possession of the suit land to the respondent.

5. Aggrieved by the same, the appellant filed Regular Civil Appeal

No. 47 of 2012 before the appellate Court. By the impugned judgment and

order, the appellate Court has confirmed the findings of facts rendered by

the trial Court to the effect that the agreement was found to be valid and

that the respondent was ready and willing to perform his part of contract

and that he was entitled to decree of specific performance granted by the

trial Court. The appellate Court differed with the trial Court only on one

aspect, which was regarding the amount of balance consideration to be

paid by the respondent to the appellant. While the trial Court had held

that the respondent was required to pay balance amount of only

Rs.28,989/- as some amounts had been already given to the credit of the

appellant, the appellate Court held that the respondent was liable to pay

the entire balance amount of Rs.63,750/- to the appellant, as reflected in

the aforesaid agreement dated 12.03.1997. Therefore, while the appellate

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Court partly allowed the appeal in favour of the appellant to the aforesaid

extent, the decree for specific performance granted by the trial Court

directing the appellant to execute sale deed in favour of the respondent

and to deliver possession of the suit property, was confirmed.

6. Aggrieved by the impugned judgment and order passed by the

appellate Court, the appellant has filed this appeal. Only one aspect in this

case was argued on behalf of the appellant and on that basis, on 03 rd July,

2017, this Court issued notice on the following Substantial Question of

Law:-

"What is the effect of absence of any recital in the Agreement of Sale (Exh.28) that possession of Gat No. 41/2 was to be delivered after completion of the transaction ?"

7. Shri S.V. Sohoni, learned Counsel appearing on behalf of the

appellant, contended that a perusal of the agreement dated 12.03.1997

shows that it nowhere stipulates that upon execution of sale deed, the

appellant was required to handover possession of the suit property to the

respondent. It was contended that in the absence of such stipulation in

the agreement to sell dated 12.03.1997, even if the Courts below had

granted the decree of specific performance, only a direction to execute the

sale-deed could have been given and the direction given by the Courts

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below to the appellant to deliver possession of the suit property to the

respondent upon execution of the sale deed was wholly unwarranted. It

was contended that if a stipulation pertaining to delivery of possession had

been stated in the aforesaid agreement dated 12.03.1997, the Courts below

could have granted the direction for delivery of possession. Reliance was

placed on the judgment of the Hon'ble Supreme Court in the case of

Adcon Electronics Pvt. Ltd. .v. Daulat and another (reported in AIR 2001

SC, 3712).

8. Per contra, Shri A.Z. Jibhkate, learned Counsel appearing on

behalf of the respondent submitted that there was no substance in the

contention raised on behalf of the appellant. It was contended that the

delivery of possession was part of the process of sale and that, therefore,

upon considering the provisions of the Transfer of Property Act, 1882, it

could not be said that merely because there was no express stipulation for

delivery of possession in the aforesaid agreement dated 12.03.1997, the

Courts below could not have given such a direction, having found that the

agreement was valid and that the respondent was entitled to the decree of

specific performance of contract. Reliance was placed on the judgment of

the Madras High Court in the case of Sundara Ramanujam Naidu .v.

Sivalingam Pillai and another (reported in AIR 1924 Madras 360) and

the judgment of Special Bench of the Calcutta High Court in the case of

Sm. Dhiraj Bala Karia .v. Jethia Estate Pvt. Ltd. (reported in AIR 1983

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Calcutta 166).

9. Having heard the learned Counsel appearing on behalf of the

respective parties and upon perusal of the record, with reference to the

aforesaid Substantial Question of Law framed by this Court, it is indeed an

interesting question raised on behalf of the appellant. It is contended that

even if the Court finds that the respondent is entitled for decree of specific

performance, it could be only in terms of the agreement dated 12.03.1997.

It is the contention of the appellant that since a specific term of stipulation

in the said agreement regarding delivery of possession is absent, even

while granting decree of specific performance, the Court could not have

given the direction for delivery of possession of the suit land to the

respondent. According to the appellant, giving such a direction would

amount to reading something more than what has stated in the agreement

and that a decree of specific performance including the direction for

delivery of possession in such circumstances was unsustainable.

10. Although at first blush the said contention appears to be

attractive, but upon being examined in detail, it becomes clear that such

contention is not sustainable. This is because the agreement dated

12.03.1997 executed between the parties in the present case is admittedly

an agreement of sale in respect of suit property, details of which have been

stated in the said agreement. It was also clearly stated in the said

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agreement that sale deed was to be executed by 31.03.1998 and details of

the total consideration and earnest amount received were also specified.

An agreement to sell would certainly mean "sale" as contemplated under

the provisions of the the Transfer of Property Act, 1882, which also

provides for the rights and liabilities of the buyers and sellers. Thus, an

agreement to sale in the nature of the agreement which is the subject

matter of the present case, would necessarily mean "sale" in terms of the

provisions of the said Act.

11. The term "sale" is defined in Section 54 of the aforesaid Act,

which reads as follows :-

"54. "Sale" defined. - "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part- promised.

Sale how made. - Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale. - A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.

                                          8                                                               sa363.17



                    It   does   not,   of   itself,   create   any   interest   in   or 
         charge on such property."

In this context, relevant portion of Section 55, which pertains to rights and

liabilities of buyer and seller is Section 55(1)(f) of the said Act. It reads as

follows :-

"55. Rights and liabilities of buyer and seller. - In the absence of a contract to the contrary, the buyer and the seller of immovable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following or such of them as are applicable to the property sold :-

(1) the seller is bound -

(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits."

12. Thus, when parties enter into an agreement to sale, delivery of

the immovable property which is subject matter of the agreement is built

in and it is an integral part of an obligation of a seller who is party to such

agreement. Thus, the seller, upon the buyer requiring him to give

possession of the property is bound to give delivery of such possession as

part of the act of sale of the property.

13. In the present case, it has been concurrently held by the two

Courts below that the aforesaid agreement to sale dated 12.03.1997 has

9 sa363.17

been duly proved and it has been found that the respondent is entitled to

the decree of specific performance of the said agreement, having satisfied

all parameters for grant of such decree. If the contention raised on behalf

of the appellant is accepted then upon such decree being granted in favour

of the respondent, it would stand satisfied and executed only by execution

of a document in the form of sale deed and that for delivery of possession,

the respondent/decree holder would have to initiate further proceedings

on the basis of having obtained a document of title in the form of the

aforesaid sale deed. This would be a travesty and it would lead to

multiplicity of litigation, which cannot be countenanced.

14. In any case, when parties enter into an agreement of sale of

immovable property, in the nature of an agreement as in the present case,

the obligation of the seller to deliver possession of the property subject

matter of the agreement, upon execution of sale deed is built in and it is

certainly part of the action of sale of the property in question. Thus,

merely because a specific express stipulation in the agreement that the

seller shall deliver possession of the property to the buyer upon execution

of sale deed, is absent, it could not be said that even when specific

performance of such an agreement is granted, the Court cannot give a

direction for delivery of possession of the property which is subject matter

of such an agreement. It would be a different matter where the agreement

would specifically record that the property in question is in possession of a

10 sa363.17

third party like a tenant, from whom the buyer would have to then take

possession in accordance with law. But, such are not the facts in the

present case. Therefore, unless the contrary appears, in agreement to sale

of the nature which is subject matter of the present appeal, it has to be

deemed that the seller has agreed to deliver possession of the property to

the purchaser upon execution of sale deed.

15. The reliance placed on behalf of the appellant on the judgment

of the Hon'ble Supreme Court in the case of Adcon Electronics Pvt. Ltd. .v.

Daulat and another (supra) is misplaced because in that case the question

was as to whether the Court in a suit for specific performance could grant

direction of delivery of possession when no such claim for possession of

land has been made in the suit filed by the plaintiff. Such are not the facts

in the present case. On the other hand, the reliance placed on behalf of the

respondent on the judgment of the Madras High Court in the case of

Sundara Ramanujam Naidu .v. Sivalingam Pillai and another (supra) is

appropriate. It has been held by the Madras High Court in the said

judgment as follows :-

"I am quite clear that the suit falls within section 7, clause (1)(a) of the Court Fees Act. The words used are "specific performance of a contract of sale." Specific performance does not exist merely of the execution of a sale-deed. A suit to obtain a sale-deed is not what is referred to in the said section; but it is

11 sa363.17

a suit for specific performance of a contract of sale. The execution of a conveyance is only a part of the specific performance. If the vendor agrees to execute a conveyance as well as to deliver possession, it cannot be said that specific performance of the contract does not comprise both the execution of the sale-deed and delivery of possession. In every contract of sale, unless the contrary appears, the vendor must be deemed to impliedly agree to give possession of the property to the purchaser. In a suit for specific performance, the purchaser seeks to enforce the terms of his contract. The seller as much agrees to put the purchaser in possession, as he agrees to execute a conveyance in his favour."

16. It has been observed in the judgment of the Special Bench of

the Calcutta High Court in the case of Sm. Dhiraj Bala Karia .v. Jethia

Estate Pvt. Ltd. (supra), as follows :-

"Mr. Bhabra himself did not seriously dispute that prior to the repeal of the Specific Relief Act, 1877, although there was some divergence of judicial views, there was preponderance of judicial authority that obligation to deliver possession was an integral part of a contract to sell or lease an immovable property. Such obligation of the vendor to put the vendee in possession flowed from the agreement to sell or to grant lease. Even in the absence of any express provision in the agreement, the vendor had such obligation under Section 55(1)

(f) and under Section 108(b) of the Transfer of Property Act, 1882."

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17. I agree with the said exposition of law by the Madras High

Court and Calcutta High Court. It is evident that the above quoted

provisions of Transfer of Property Act, 1882, demonstrate that once parties

entered into an agreement to sale of the kind which is subject matter of the

present appeal, unless the contrary is demonstrated, it must be deemed

that the seller has impliedly agreed to deliver the possession of the

property to the purchaser, upon execution of sale deed. Therefore, the

Substantial Question of Law framed by this Court is answered in favour of

the respondent and against the appellant.

18. Accordingly, this appeal is dismissed with no order as to costs.

JUDGE

*rrg.