Shashikant Shrikant Buchade And ... vs Sanjay Jingonda Patil And Ors
2021 Latest Caselaw 6460 Bom

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           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                   CIVIL APPELLATE JURISDICTION

                     SECOND APPEAL (ST) NO. 905 OF 2020

 Shashikant Shrikant Buchade & Ors.             ..Appellants
      V/s.

 Sanjay Jingoda Patil & Ors.                    ..Respondents
                                   ----
 Mr. Vivek Patil a/w Mr. Amit Singh, Mr. Mithun Khaire i/b M/s.Vivek
 Patil & Associates for the Appellants.
 Mr. Tejpal Ingale for the Respondent No.1.
                                   ----
                                    CORAM : C.V. BHADANG, J.

                           RESERVED ON   : 29th JANUARY, 2021
                           PRONOUNCED ON : 19th APRIL, 2021

 :JUDGMENT :

. The challenge in this appeal, is to the judgment and decree

dated 20 December 2019 passed by the learned District Judge at

Ichalkaranji in RCA No. 78/2012. By the impugned judgment, the

appeal filed by the first respondent (Original plaintiff) has been

allowed and Special Civil Suit No. 355/2005 filed by the first

respondent, for specific performance, has been decreed.

2. The appellants herein are the original defendant nos. 3, 5 and

6. The respondent nos. 2 and 3 are respectively the defendant nos. 1

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and 4. The first Respondent is the original plaintiff. The parties are

referred to in their original capacity for the sake of convenience.

3. The plaintiff filed the said suit for specific performance of a

contract of sale. The property in dispute is land CTS No. 16729

admeasuring 79.6 meters having a constructed house thereon with

open space which is more specifically described in plaint para No. 1

and 1A.

4. The plaintiff is a resident of Ichalkaranji and is engaged in the

business of manufacture of gold and silver jwellery. The plaintiff was

desirous of purchasing a property and was looking for prospective

sellers. The predecessor in title of the defendant Nos. 2 to 5 Mr.

Shrikant Buchade, who was known to the plaintiff, had offered to

sale the suit property to the plaintiff for a consideration of Rs.

6,01,000/-. Accordingly an agreement was executed between the

plaintiff and Mr Shrikant Buchade and the defendant No.1 on 13

August 2003 after the plaintiff paid an earnest of Rs. 2,01,000/-.

5. The plaintiff issued a Public notice on 9 November 2003

inviting objections, if any, from the public, for completion of the sale

transaction. In pursuance thereof Shivaji Raje Urban cooperative

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credit society ( 'Credit Society' for short) conveyed its objection as

the property was mortgaged to it, as a security for a loan, obtained

by Shrikant in the year 2002. However, Mr. Shrikant Buchade and

the defendant no 1 assured the plaintiff that they will complete the

transaction, after removal of the objection. In the meantime, the

defendant No. 3 Mr. Shashikant Shrikant Buchade filed Suit No.

332/2003 for partition of the property in which the plaintiff was

arrayed as a defendant. The plaintiff filed his written statement in

the said suit. Inspite of the defendant No. 3 filing the suit the

defendant No. 1 and Mr. Shrikant Buchade represented to the

plaintiff that they will sort out the dispute as it is a family matter

and assured the plaintiff to complete the transaction. The plaintiff

issued a notice dated 13 January 2004 to Mr. Shrikant Buchade and

the defendant No. 1 expressing his readiness and willingness to

complete the transaction. The notice did not evoke any reply.

6. On 21 January 2004, Mr. Shrikant Buchade, informed the

plaintiff his inability to complete the transaction, on account of the

loan of the society and the family dispute. He offered to refund the

earnest with interest. Accordingly, an agreement was executed on 21

April 2004 and Mr. Buchade passed cheques of Rs.2,00,000/- and

Rs.22,000/- in favour of the plaintiff. It may mentioned that the

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agreement dated 21 April 2004 was also signed by the son of Mr.

Shrikant Buchade. It was agreed between the parties that in the

event, the cheques are not honored, the plaintiff had a choice to

enforce the original agreement dated 13 August 2003. The said

cheques got dishonored on presentation. The plaintiff issued a

notice after which the defendant No. 4 and Mr. Shrikant Buchade

again assured to abide by the original agreement stating that on

account of certain family disputes and financial difficulties they

could not do so.

7. As the plaintiff was not sure about the assurance of Mr.

Shrikaant Buchade, a meeting was organised with help of certain

common friends in which two rooms from the northern side were

given in possession of the plaintiff by executing a deed on plain

paper. Even thereafter the plaintiff was asking for execution of the

sale deed, which was being avoided on some pretext or the other. In

the meantime, Mr. Shrikant Buchade died in March 2005. The

defendant nos. 2 to 5 are his legal heirs. In May 2005, the plaintiff

again requested the defendant nos. 1, 3 and 4 for execution of the

sale deed, when he was assured that the sale deed will be executed

within a month. However the plaintiff learnt that the suit property

was being shown to some persons through certain property dealers.

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The plaintiff again requested for execution of the sale deed which

the defendant Nos. 1, 3 and 4 avoided to execute. It is in these

circumstances that the plaintiff filed the suit for specific

performance of the contract of sale and certain consequential reliefs

and for alternate relief of refund of consideration.

8. The defendant Nos. 1, 5 and 6 failed to contest the suit and

they were proceeded ex-parte.

9. The defendant Nos. 2 to 4 resisted the suit on the ground that

the plaintiff was engaged in illegal money lending business. It was

contended that Shrikant Buchade was addicted to vices and had

borrowed Rs 50,000/- from the plaintiff after obtaining signature of

Shrikant and defendant no. 4 on two blank Stamp papers of Rs. 50/-

each. It was contended that Shrikant tried to repay the loan.

However, the plaintiff claimed interest at the exorbitant rate of 5%

per month. All other adverse allegations including about receipt of

the earnest of Rs.2,01,000/- passing of the cheques for

Rs.2,22,000/- and handing over of the two rooms were denied. It

was contended that the entire property is in possession of the

defendants, in which they are residing and the defendant no. 3 is

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conducting a grocery shop while the defendant no. 4 is conducting

the business under the name and style as 'Chandramilan Tobacco'.

10. On the basis of the rival pleadings, the learned trial court

framed as many as nine issues.

11. The plaintiff examined himself (PW-1) alongwith Bharamu

Nanaso Murgunde(PW-2), Sunil Appasaheb Chanvire (PW-3), Ashok

Shrenik Boundate(PW-4), Sambhaji Vishnu Dhatunde (PW-5),

Sadashiv Annappa Buddhe (PW-6). Defendant No.3 Shashikant

Shrikant Buchade examined himself alongwith Satish Raghunath

Tanekar (DW-2) and Kapil Annadrao Musale (DW-3)

12. The learned trial court held the agreement of sale to be

proved and also found that the plaintiff had paid the earnest of

Rs.2,01,000/- on 13 August 2003. The plaintiff had deposited the

remaining consideration in the court. However the trial court found

that the suit property was of 'B tenure' and the defendant no. 1

Vishnu and Mr. Shrikant Buchade had no right to execute the

agreement of sale. The trial court also found that by virtue of the

subsequent agreement dated 21 January 2004, the parties had

agreed to cancel the agreement dated 13 August 2003. Thus, the

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trial court found that the plaintiff is entitled to the alternate prayer

of refund of earnest. The learned trial court partly decreed the suit

vide Judgment & decree dated 30 November 2010, directing the

defendant nos. 1 to 6 to refund the amount of Rs. 2,01,000/- with

interest @ 9% per annum.

13. Feeling aggrieved, the plaintiff challenged the same in RCA

no. 78/2012. The defendant nos. 2, 3 and 6 filed cross objection

feeling aggrieved by the finding against issue nos. 1, 2, 3, 5, 6, 7 and

8.

14. It appears that during the hearing of the appeal the First

appellate Court framed an additional issue 3A as under:

"Does plaintiffs prove that inadvertently the suit

property is shown as B Tenure?"

The First appellate Court remitted the said issue to the trial

court to record the evidence of parties and to return a finding

thereon. After this the Plaintiff examined himself at Exh. 208 and

produced copy of the sale deed dated 27 April 1949 (Exh.208). The

defendants did not lead any oral evidence, but relied upon an

Enquiry report Exh. 237.

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15. The learned trial court by a judgment and order dated 31

August 2019 answered the issue No. 3A in the negative. Thus, the

trial court held that the suit property was a tenure B property and

the plaintiff had failed to show that the relevant entry in the

revenue record was taken inadvertently. After the finding was

returned, the first appellate court by the impugned judgment and

decree has allowed the appeal and decreed the suit directing the

defendants to execute the sale deed as prayed. Hence this appeal.

16. I have heard Mr. Patil the learned counsel for the appellant

and Mr. Ingale the learned counsel for the contesting respondent No.

1. Perused record.

17. It is submitted by the learned counsel for the appellant that

the trial court had rightly refused to grant the specific performance,

which is a discretionary relief on the ground that the suit property

was a B tenure land and the defendant no.1 and Shrikant Buchade

had no authority to execute the agreement or enter into the

transaction for sale of the property. It is submitted that the parties

had entered into the subsequent agreement dated 21 April 2004

(Exh.66) in novation of the contract/agreement Exh. 65. Thus the

agreement Exh. 65 was no longer available for being specifically

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performed. It is pointed out that the plaintiff had accepted

Rs.1,000/- on the same day and the cheques for Rs 2,22,000/-. It is

submitted that on the dishonor of the cheques, the plaintiff issued

notice dated 17 May 2004 demanding the amount. It is submitted

thus the plaintiff was all along ready and willing to abide by the

subsequent agreement dated 21 April 2004 and had filed a

complaint under section 138 of the negotiable Instruments Act. It is

submitted that the property was the ancestral property and the

appellant no. 1 had filed suit No. 332/2003 for partition even prior

to the suit for specific performance. It is submitted that the

appellants have preferential right to acquire and purchase the suit

property under section 22 of the Hindu Succession Act. It is

submitted that, these circumstances taken together, were sufficient

to refuse the discretionary relief of specific performance. It is

submitted that in the absence of the exercise of such discretion,

being shown to be arbitrary, the first appellate court was not

justified in reversing the decree passed by the learned trial court.

18. The leaned counsel for the first respondent has supported the

impugned judgment. It is submitted that the first appellate court has

rightly decreed the suit for specific performance. It is submitted that

the property is wrongly shown as 'B Tenure' land. It is submitted

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that the suit property has been wrongly held to be belonging to 'B

tenure' by the trial court.

19. The parties have referred to the Government Resolution (GR)

dated 20 January 2009, wherein the Government has accepted that

there is possibility of some properties being shown as of 'B tenure'

erroneously and has set out the procedure for correction of the

relevant entries in the revenue record.

20. It is next submitted that the subsequent agreement dated 21

January 2004 (Exh.66) cannot come in the way of the plaintiff from

claiming specific performance of the contract Exh. 65. It is submitted

that the agreement contemplated that in the event the cheques are

not encashed and the amount is not realised, the plaintiff had an

option to enforce the original agreement Exh. 65. It is submitted

that the cheques got dishonored and thus the plaintiff was perfectly

justified in seeking specific performance of the agreement Exh. 65. It

is submitted that the first appellate court after considering the

evidence on record has rightly granted the decree of specific

performance and the appeal does not involve any substantial

question of law.

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21. I have carefully considered the rival circumstances and the

submissions made. According to the appellants, the appeal involves

the following substantial questions of law:

"i) Whether the second agreement dated 21 January 2004

Exh.66 between Shrikant Buchade and the plaintiff is a novated

contract under section 62 of the Contract Act and the plaintiff has

acted upon the same and has proceeded for the recovery of the

earnest amount with interest?

ii) Whether the the first appellate court could have

invoked the doctrine of approbate and reprobate to negate the

claim of the defendants about the suit property being of 'B' tenure ?

iii) Whether the First appellate court could have granted

specific performance of the agreement, to which the some of the

legal heirs, were not the parties ?

iv) whether the First appellate court was justified in

interfering with the exercise of the discretion by the trial court

refusing to grant specific performance of the agreement, particularly

in the absence of the exercise of the said discretion, being shown to

be perverse or arbitrary?"

22. The parties were accordingly heard on the aforesaid grounds

and the appeal is being disposed of finally by consent of parties.

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23. At the outset it may be mentioned that the courts below have

concurrently found that the agreement Exh. 65 and the payment of

the earnest is proved. The courts have refused to uphold the defence

of the defendants about the plaintiff being engaged into illegal

money lending business and the subject agreement Exh.65 being

executed by way of security for loan allegedly obtained by Shrikant.

It is not necessary to revisit the said findings. Essentially, the trial

court had refused to grant the discretionary relief of specific

performance for certain reasons, which has been reversed by the

First appellate court. Thus what falls for determination in this

appeal is whether the first appellate court was justified in doing so.

The said question has to be decided in the context of the substantial

questions of law on which the parties have addressed the court.

24. Ground No.(i):

The issues/points framed by the trial court/First

appellate Court do not show that an issue about the agreement Exh.

65 being novated by the subsequent agreement Exh. 66 was framed

or considered by the courts below. Nonetheless, inasmuch as both

these agreements are on record and the question is based on the

interpretation of these documents, in the context of section 62 of the

Contract and the parties have addressed the court on the issue, I

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propose to consider the same. It is true that the agreement Exh. 66

was executed subsequent to the agreement Exh. 65 (of which

specific performance is sought for) as according to the plaintiff the

defendant no. 1 and Shrikant had expressed inability to execute the

sale deed and to complete the transaction on account of the claim of

the credit society and the family disputes. It is the case made out

that Shrikant had agreed to return the earnest with interest and

accordingly two cheques for Rs. 2,00,000/- and Rs. 22,000/- each

were passed. It is a matter of record that both the cheques got

dishonored and the plaintiff had filed Criminal Case no. 1052/2004

against Shrikant, under section 138 of the Negotiable instruments

Act, which has abated on account of death of Shrikant.

25. Section 62 of the Contract Act, provides for effect of novation,

rescission and alteration of the contract. It provides that where the

parties to a contract agree to substitute a new contract for it or to

rescind or alter it, the original contract need not be performed. The

question whether there is indeed a novation of the contract would

depend upon facts and circumstances of each case, in consonance

with the recitals in the agreements and the intention of the parties. I

have gone through the agreement Exh. 66 dated 21 January 2004.

clause 4 of the said agreement provides that, in the event the

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cheques are not honoured on the due date, there was an option

given to the plaintiff to either seek enforcement of the original

agreement Exh. 65 or the agreement Exh. 66. Thus, although the

agreement Exh. 66 was executed subsequent to the agreement Exh.

65 it cannot be said that it was executed in total substitution of the

agreement Exh. 65 inasmuch as the subsequent agreement gave

option to the plaintiff to enforce the earlier agreement, which must

be held to be kept alive. In other words, the agreement Exh.65 was

intended to be kept alive for enforcement, contingent on the

dishonour of the cheques and the consequent failure of the

agreement Exh.66. Thus, although the case of novation cannot be

accepted on facts, it is necessary to note the conduct of the plaintiff

in filing the complaint under the Negotiable Instruments Act. It can

safely be said that the plaintiff was trying to enforce the subsequent

agreement about refund of earnest with interest. It is true that the

complaint abated on account of the death of Shrikant. However, that

is besides the point and cannot change the conduct/intention of the

plaintiff in the matter. In any event, the plaintiff in terms of the

subsequent agreement Exh. 66 had an option to enforce the

agreement Exh.65 or to abide by the subsequent agreement about

refund of consideration with interest. Thus, although the case of

novation cannot strictly be accepted, the fact remains that the

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plaintiff had taken resort to the remedy for recovery of the earnest

with interest. This conduct of the plaintiff would be relevant while

deciding whether the plaintiffs is entitled for the discretionary relief

of specific performance. The point is answered accordingly.

26. Ground No. (ii):

As noticed earlier the trial court by judgment and order dated

31 August 2019 had held that the the property was of B tenure and

the plaintiff had failed to establish that the said entry in the revenue

record was taken inadvertently. After the said issue was remitted to

the trial court the plaintiff examined himself and produced the sale

deed dated 27 April 2019 (Exh. 210) between Yashwant Jamdar

and Gundu Naik in respect of property No. 8068 ( revised no.

16729), Death certificate of Smt. Sushila Shrikant Buchade (Exh.

211) Property card Extract (Exh. 212), copy of Mutation Entry Exh.

213, Copy of Rule card Exh. 214 and 215, Extract of property

register card Exh. 216 to 219 Extract of enquiry register Exh. 220

and 221 and Rule card Exh. 222.

27. The defendants did not enter into witness box on the said

issue and relied on the inquiry register Exh. 237. According to the

plaintiff, the property was purchased by the predecessor Yashwant

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Jamdar from the government in a public auction. The trial court has

found that except the sale of the year 1949, there is no documentary

evidence to show that the property was purchased by Yashwant

Jamdar in a public auction. However, the trial court had also noticed

that the sale deed mentioned payment of the ground rent. That

apart the agreement Exh.65 of which the plaintiff is seeking specific

performance also mentions about obtaining of permission. The

revenue record including the property card shows that the property

is of B tenure to which a presumption attaches under section 157 of

the Land Revenue Code.

28. The first appellate court has reversed the said finding taking

note of the sale deeds at Exh. 93 and 95 under which the share of

Chandrakant and Vishnu has been purchased by Shrikant. In the

opinion of the First appellate court the defendants were trying to

approbate and reprobate which is not permissible. Following are the

observations in para 32 of the judgment.

"32. Thus it goes to show that the defendants have adopted the theory of aprobate and reprobate it means for effecting sale-deed Exh.93 and 95 the property was not tenure but for execution of sale-deed as per agreement to sale Exh.65 the property is B Tenure. Thus, evidence on

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record goes to show that the suit property and other properties were already sold in the Govt. auction as mentioned in the sale-deed Exh.210 and inadvertently the suit property is shown as B tenure. But in view of the above transactions Exh.93 and 95 there is sale in respect of the suit property and other part of the C.T.S. No. 8068."

29. I do not find that the reasoning can be accepted. The principle

of estoppel or for the matter of that approbate and reprobate can

operate on facts and not against law. In other words, there is no

estoppel against law. Thus, if the law prohibits transfer of B tenure

property without permission, there cannot be any estoppel in

claiming so, inspite of the sale deeds Exh. 93 and 95. The revenue

record as indicated earlier shows that it is B tenure property.

Although the Government Resolution dated 20 January 2009

contemplates an enquiry by the collector where it is claimed that the

property has been erroneously recorded as of B tenure no such

enquiry is shown to be conducted in this case much less there is any

reasoned order (the GR requires such an order being passed)

showing the property being erroneously recorded as of B tenure. In

my considered view the First appellate court was not justified in

reversing the finding recorded by the learned trial court against

issue no. 3A. However, I would hasten to add that this may not have

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a serious bearing on the out come of this appeal inasmuch as, it is

contended on behalf of the first respondent (plaintiff) that in that

event, the specific performance may be granted subject to the

condition of obtaining of permission from the competent authority.

30. Ground (iii) and (iv):

It appears to be not in dispute that the suit property was the

ancestral property of Shrikant. Dattatray is the father of Shrikant.

Dattatray had two other sons namely Chandrakant and Vishnu.

Shrikant had purchased the share of Chandrakant and Vishnu under

the sale deeds Exh. 93 and 95. Admittedly ,the appellant no.1 being

the son of Shrikant had filed RCS No. 332/2003 for partition prior

to the suit for specific performance. The learned first appellate court

is therefore, not justified in holding that the said suit was filed by

the first appellant as a counter blast and in order to resist the

specific performance. It is true that the appellate court has found

that the said suit no 332/2003 was defended only by the plaintiff

herein. However, that is no sufficient to hold that the said suit was

filed by way of a counter blast. Be that as it may, it is not shown that

all the shares were parties to the agreement Exh. 65.

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31. It is now well settled that the relief of specific performance is

a discretionary relief. The discretion is albeit a judicial discretion

which is to be exercised in the facts and circumstances of each case

and the evidence on record. The trial court had framed issue no. 8

in this regard. The trial court refused to grant the relief of specific

performance inter alia on the ground that the property was of

tenure and the agreement Exh. 65 was 'cancelled' by the subsequent

agreement Exh.66. In so far as the issue of compensation is

concerned, the trial court has noticed that there are no pleadings or

evidence setting out the details thereof. In such circumstances, the

trial court has granted the alternate relief of refund of consideration

with interest.

32. I have carefully gone through the judgment of the First

appellate Court. The first appellate court appears to be swayed by

the alleged dishonesty on the part of Shrikant in not disclosing the

fact that the property was subject to mortgage Exh.94 dated 20

March 2002 with the credit society under which Shrikant had

obtained a loan. The first Appellate Court was swayed by the filing

of the suit for partition (which in fact was filed by the son of

Shrikant) the dishonor of the cheques Exh. 78 and 79 ( representing

refund of earnest and the interest) and the fact that Shrikant was

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trying to take advantage ( rather disadvantage ) of the wrong entry

of B tenure in refusing to complete the transaction.

33. The first appellate court in para 33 has observed thus:

"33. Considering the dishonesty on the part of Shrikant and the present defendants, I am of the view that for avoiding the execution of sale-deed on the basis of agreement of sale Exh.65, Shrikant mislead plaintiff by concealing the fact of execution of mortgage deed Exh.94. Secondly, to give the counter blast to agreement to sale Exh.65 Shashikant filed suit RCS No. 332/2003. Thirdly, cheques Exh.78 & 79 issued by Shrikant were dishonoured. Lastly, the defendants wants to take the advantage of the wording B tenure for dismissal of suit. Under such circumstances, if such type of transaction is going in the society then it is next to impossible to perform any part of contract. Under such circumstances, plaintiff will suffer great hardship if the decree for specific performance is not granted. By this judgment a lesson is to be given to the defendants and also the society at large regarding dishonesty. Thus, I find no hardship to the defendants if decree is granted for specific performance of contract. So far as possession is concerned there is no document on record to show that Shrikant handed over possession of two rooms to plaintiff. As such under the garb of any other relief plaintiff is entitled for the possession of suit property mentioned in agreement Exh.65."

(Emphasis supplied)

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34. In my considered view the reasoning as articulated cannot be

accepted or approved. It is necessary to note that even the first

appellate court has refused to accept the case of the plaintiff about

handing over of the possession of the two rooms.

35. Considering the overall circumstances and having regard to

the fact, of the conduct of the plaintiff, in trying to enforce the

payment towards the refund of earnest and interest, the nature of

the property, and the fact that it was mortgaged with the society

much prior to the execution of the agreement Exh. 65, the discretion

exercised by the trial court cannot be said to be perverse or arbitrary

so as to require interference. Further more as noticed earlier the first

appellate court has interfered with the said discretionary relief for

extraneous reasons or reasons which are not germane. The points

are answered accordingly. The appeal thus succeeds. The appeal is

allowed. The impugned judgment and decree passed by the First

appellate Court is hereby set aside. The judgment and decree of the

trial court is hereby restored. In the circumstances there shall be no

order as to costs. A decree be drawn accordingly

C.V. BHADANG, J.

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