Bombay High Court
Jayshri Rameshchandra Bhore vs Arvind Narayanrao Tarekar And ... on 21 January, 2022
Bench: S. M. Modak
1 SA-574-2004 (J).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
SECOND APPEAL NO. 574/2004
WITH
CIVIL APPLICATION NO. 266 OF 2010
Mrs. Jayshri w/o Rameshchandra Bhore,
age 67 years, occupation housewife,
resident of 145, Vivekanand Nagar,
Nagpur - 440015.
.....APPELLANT
(Ori. Plaintiff)
(On R.A.)
...V E R S U S...
1) Arvind s/o Narayanrao Tarekar,
occupation business, resident of Five
Star Housing Society, 17, Farmland
Layout, Behind Gurudwara,
Ramdaspeth, Nagpur.
(Deleted as dead, L.Rs. brought
on record as 1(a) to 1(e).
1(a). Smt. Anuradha wd/o Arvind Tarekar,
aged about 54 years,
occupation Household,
1(b). Shri Sanjay s/o Arvind Tarekar,
aged about 30 years,
occupation business,
1(c). Shri Avinash s/o Arvind Tarekar,
aged about 26 years,
occupation business,
1(d). Shri Vikas s/o Arvind Tarekar,
aged about 26 years,
occupation business,
1(e). Mrs. Archana w/o Madhukar Malokar,
aged about 32 years,
occupation Household,
resident of Dhantoli, Nagpur.
2 SA-574-2004 (J).doc
Nos.1(a) to 1(d) residents of 17, Farmland
Layout, Ramdaspeth, Nagpur.
2) Mrs. Vanmala w/o Manohar Kamdi,
aged major, occupation service,
resident of "Ashwaroop",
Plot No.2, Sneh Nagar, Nagpur.
...RESPONDENT
(Ori. Defendants)
(On R.A.)
-------------------------------------------------------------------------------------------
Shri H.D. Dangre, Advocate for the Appellant
Shri Amit Khare, Advocate for the Respondents.
-------------------------------------------------------------------------------------------
CORAM :- S.M. MODAK, J.
RESERVED ON :- 04 OCTOBER, 2021.
PRONOUNCED ON :- 21 JANUARY, 2022.
ORAL JUDGMENT
1. Plaintiff is vendor/owner of the suit property whereas
defendants are the purchasers. They are in possession of the suit
property. Plaintiff's suit for recovery of possession was decreed by
the trial court. There were the issue of defendants in possession
towards part performance and whether the agreement for sale had
become unenforceable (on account of non-complaicne of the
provisions of Income Tax Act from the side of vendor). The issue
of the part performance was answered in favour of the defendants.
But the suit was decreed by the trial court as the agreement for
sale has become non-enforceable. When the defendants preferred
first appeal, the findings on part peformance (in favour of
3 SA-574-2004 (J).doc
defendants) were confirmed. The first appellate court come
reversed the findings on "whether the agreement had become
non-enforcable" and hence, the suit cannot be dismissed. Now,
this second appeal is preferred by the plaintiff. It was admitted on
the following substantial questions of law :-
1 Whether the appellate Court was justified in extending
the protection of Section 53-A of the Transfer of Property
Act to the respondents when they never showed their
willingness and readiness to perform their part of the
contract?
2 Whether the judgment of the Appellate Court is
sustainable in view of the impossibility of perfecting title
to the suit plot in favour of the respondents?
2. The judgment dated 11th June, 2004 challenged
before this court is delivered by the Court of Ad-hoc Additional
District Judge, Nagpur. By the said judgment, the plaintiff is
aggrieved because the appeal filed by the defendants was allowed
by the first Appellate Court. The First Appellate Court reversed the
judgment of the trial Court and dismissed the suit of the plaintiff.
It be will be material to consider the facts discovered from the
pleadings and evidence.
FACTS
3. The said suit was filed for recovery of possession from
two defendants and for declaration that the termination of the
4 SA-574-2004 (J).doc
agreement for sale at the instance of plaintiff is legal. The plaintiff
is the owner of the suit land bearing Plot No.6 from Khasra
No.27/1 admeasuring 465 sq. mtrs. situated at Nagpur
(hereinafter referred to as the 'suit plot'). The said plot was owned
by Pragati Housing Cooperative Society Ltd. of which the plaintiff
is a member.
4. The dispute in between the parties is not about
execution of the said agreement, but the dispute pertains to
fulfillment of the terms and conditions of the said agreement. The
agreement was of the year 1982 but the suit was filed in 1994
inasmuch as 12 years afterwards.
5. Neither the plaintiff filed the suit containing similar
reliefs prior to 1994 nor the defendants filed the suit for specific
performance at all. The plaintiff's version is based upon breach of
terms of the agreement for sale by the defendants.
6. The breaches are as follows :-
a) Not paying full consideration of Rs.1,00,380/-
inspite of long period,
b) Not obtaining following NOC/permissions :-
(i) income tax clearance certificate,
5 SA-574-2004 (J).doc
(ii) NOC from Pragati Society and
(iii) clearance from U.L.C. authorities.
c) Erecting a structure (which is being used for
running school) without the permission of the
local authorities and without her own
permission.
Whereas, the defendants' version is--
a) payment of entire consideration of
Rs.1,00,380/-,
b) Responsibility to obtain above said
NOC/permission falls on the shoulder
of plaintiff and infact she has failed and
hence estopped from blaming the
defendants.
7. Other area of dispute is about "handing over
possession of the suit plot by the plaintiff to the defendants". The
plaintiff's claim is that the defendants took forcible possession.
Whereas, both the defendants' claim that possession was delivered
voluntarily by the plaintiff herself on the date of execution of
agreement i.e. 30th December, 1982. On this background in a suit
for possession at the instance of vendor, the defendants have
attempted to protect their possession over the suit plot and they
have taken recourse to the provisions of Section 53-A of the Said
Act.
6 SA-574-2004 (J).doc
8. When the defendants committed breach of agreement
on the ground mentioned above, the plaintiff cancelled the
agreement vide notice dated 25 April, 1993 and asked for
recovery of possession. Defendants have neither responded nor
complied with the suit notice. In fact after filing of a suit,
defendants replied on 20 March 1995 to the suit notice. The
defendants have claimed specific performance from the plaintiff.
Hence, plaintiff filed the suit containing two reliefs--
a) Declaration that termination of the agreement
at her instance is legal,
b) And for recovery of possession.
9. Both the parties have adduced oral and documentary
evidence before the trial Court. The evidence of the plaintiff
consist of following:
1) Oral Evidence given by her husband Rameshchandra Bhore-
Documentary Evidence
a. Exh.28 Power of Attorney.
b. Exh.29 Suit notice dated 25 November, 1993.
c. Exh.30 Unclaimed envelope.
Following documents were shown during cross-examination-
i Exh.38 Suit agreement.
7 SA-574-2004 (J).doc
ii. Exh.39 Receipt for Rs.10,000/- for cheque dated 17
August, 1983.
iii. Exh.41 Receipt for Rs.9,000/- dated 21 June, 1984.
iv. Exh.42 Receipt for Rs.12,000/- (Rs.2,000/- by cash and
Rs.10,000/- by cheque dated 14 November, 1983).
v. Exh.43 Notice dated 20 March, 1995 sent by the
defendants to plaintiff asking for execution of sale-
deed.
vi. Exh.44 Acknowledgment.
2) Oral evidence of Balasaheb Jadhav at Exh.49 - Manager of
Pragati Cooperative Housing Society.
i. Exh.50 NOC dated 7 June, 1993 given by Society for sale
of plot in favour of the plaintiff.
3) Oral evidence of Anil Bhivgade - Clerk from Sub-Registrar
office Exh.51.
i. Exh.45/2 Price index for stamp duty calculation.
The evidence of the defendants consist of following-
i. Evidence of defendant No.1-Arvind Narayanrao
Tarekar.
ii. Exh.60 Counterfoil for cheque drawn in favour of the
plaintiff dated 4th August, 1986 for Rs.5,000/-.
(containing signature of plaintiff's husband)
iii. Exh.61 Receipt for Rs.3,380/- dated 5th October, 1986.
8 SA-574-2004 (J).doc
Findings of the trial court
10. In nutshell, the trial Court concluded that-
a) Possession was not taken forcibly.
b) That payment was proved by the defendants.
(There was a dispute for payment of part
consideration of only Rs.8,380/-)
c) Granted protection to the defendants under
Section 53-A of the Transfer of Property Act.
d) The agreement was declared as null and void (as
contravening the provisions of Income Tax Act).
So, net result was "the suit was decreed".
FIRST APPEAL
11. Even though findings on some of the issues by the
Trial Court were in favour of the defendants, they have preferred a
first appeal because there was a possession decree against them. It
is predominantly on the basis of findings on the issue "whether the
agreement was void and unenforceable". At the same time the
plaintiff had chosen to prefer a cross objection because the
findings on following issues:- (a) about protection under Section
53-A of the Transfer of Property Act; (b) about payment of
Rs.8380/- was against her. On this background the First Appellate
Court framed certain points.
9 SA-574-2004 (J).doc
12. Findings of the Appellate Court
(a) the First Appellate Court held that payment of
Rs.8380/- was not proved by the defendants
(findings reversed);
(b) the First Appellate Court did not agree with the
plaintiffs' grievance that "defendants were not
entitled to protection of part performance" and;
(c) the same time the First Appellate Court agreed to
the submission of the defendants /appellants that
"agreement cannot be said to be void and
unenforceable";
(d) Accordingly, the findings of the Trial Court on that
issue were set aside.
(e) Ultimately, the appeal was allowed and the suit was
dismissed.
13. This judgment is challenged by the plaintiffs. On this
background, this Court has framed following substantial questions
of law on 24th February, 2005 and for the reasons narrated
hereinafter, our findings are as follows :-
No. Substantial Question of Law Finding
i. Whether the appellate Court was justified in In the
negative.
extending the protection of Section 53-A of
the Transfer of Property Act to the
respondents when they never showed their
10 SA-574-2004 (J).doc
willingness and readiness to perform their
part of the contract?
ii. Whether the judgment of the Appellate In the
affirmative.
Court is sustainable in view of the
But in view of
impossibility of perfecting title to the suit finding on
question no.1,
plot in favour of the respondents?
the judgement
is not
sustainable.
Discussion
14. I have heard learned Advocate Shri Dangre for the
appellant/plaintiff. Learned Advocate Shri Khare has chosen to file
written notes of arguments and has chosen not to argue orally. I
have perused them. So, prior to deciding above substantial
questions of law, it will be material to consider the findings
recorded by both the Courts below. For better understanding they
are summarized in a tabular form as follows:
Issue/points Findings by Trial Findings by First
Court Appellate Court
About taking forcible Issue no.1 & 3 Point no.1
possession by taking In the negative. In the negative.
disadvantage of urgent Plaintiff has not
need of plaintiff and proved it.
defendants being
trespassers.
Completion of structure Issue no.2 No separate point
on the suit land by In the affirmative. framed (but
defendants without Plaintiff has proved observations are
consent of plaintiff it. there)
Entitlement to Issue no.4
11 SA-574-2004 (J).doc
declaration as to In the affirmative in _____________
cancellation of the favour of plaintiff
agreement.
Entitlement to possession Issue no.5 Point no.7
In the affirmative in In the negative
favour of plaintiff
Damages and means Issue nos. 6 & 7 As suit was
profits In the affirmative dismissed no
direction.
Not paying balance Issue no.9 Point no.2
consideration of In the negative - In the affirmative.
Rs.8380/- by defendants defendants have Defendants have not
proved about said proved said
payment (wordings payment.
are not proper.
Agreement dated Issue no.10 Point no.3
30/12/1982 null, void In the affirmative In the negative
and unexecutable
Protection under Section Issue no.11 Point no.4
53-A of T.P. Act to In the affirmative. In the affirmative
defendant Defendants have
proved it.
Suit within limitation Issue no.12 Point no.6
In the affirmative In the affirmative
Frustration of contract No specific issue Point no.5
In the negative.
Plaintiff has not
proved it.
15. So, when the findings by both the Courts below are
perused simultaneously we may find that -
a. Possession taken forcibly
b. Defendants entitled to protection under Section 53-
A of the T.P. Act
16. There is consensus amongst both the Courts below.
Whereas, on the point of payment of part consideration of
Rs.8380/-, the Trial Court answered in favour of the defendants
12 SA-574-2004 (J).doc
whereas, the First Appellate Court answered against defendants.
Similar difference of opinion can be found out in respect of nature
of agreement as void. The Trial Court gave a finding in favour of
the plaintiffs whereas the First Appellate Court had given a finding
against the plaintiffs. That is how, as there is concurrent findings,
this Court has to decide whether the findings "as to entitlement to
protection of part performance" is perverse or not and is there any
scope open for this Court to interfere? So also, this Court has to
consider whether the First Appellate Court was right in reversing
the findings as to "agreement being null, void and unenforceable"
& reversing the findings "about payment of Rs.8,380".
ABOUT RETENTION OF POSSESSION UNDER SECTION
53-A OF THE TRANSFER OF PROPERTY ACT
17. It is necessary to consider the provisions of Section
53-A of the Said Act and the law laid down in the judgments
relied upon by the plaintiff and the evidence adduced by both the
parties.
PROVISIONS OF SECTION 53-A OF TRANSFER OF
PROPERTY ACT
18. In fact, the owner is entitled to ask the purchaser to
return the possession of immovable property. It is founded on the
principles laid down in Indian Contract Act. If possession is given
13 SA-574-2004 (J).doc
on the basis of assurance that the transferee will fulfill his set of
promises and in future if the transferee fails to perform his set of
promises, it is but natural that the transferor will expect the
transferee to deliver back the possession. However, in certain
contingencies, the transferee can retain the possession. It is based
on equitable principles. It is statutorily recognized by the
provisions of Section 53-A of the Said Act. It debars the transferor
to take back the possession. However this fetter on the rights of
transferor is not uncontrolled one. This protection will come into
play only when certain prerequisites are fulfilled at the instance of
transferee.
19. When the transferee has not filed a suit for specific
performance (either it is time barred or for any reason), whether
such transferee can take up a plea on the basis of the provisions of
Section 53-A of the Transfer of Property Act is answered by the
Hon'ble Supreme Court in the case of Shrimant Shamrao
Suryavanshi & Anr Vs. Pralhad Bhairoba Surywvanshi & Others 1.
It is observed that law of limitation is applicable to filing of
suits/other proceedings. It is observed that "Limitation Act does
not extinguish a defense but only bars the remedy." The
provisions of Section 53-A of Transfer of Property Act do certainly
1 (2002) 3 SCC 676
14 SA-574-2004 (J).doc
comes to the rescue of the defendants. At the same time, it will be
material to consider how those provisions are interpreted in the
judgments relied upon by the appellants.
20. Judgements relied upon by the Appellants
1 Ranchhoddas Chhaganlal Vs. Devaji Supdu Dorik & Others2.
There was oral agreement for sale of land for
Rs.17,000/-. Respondent was in possession and the suit was filed
for recovery of possession by the appellant for failure to pay
balance consideration. Respondent transferee could not perform
his part of the contract. Hence, decree for possession was passed
and it was confirmed by Hon'ble Supreme Court.
2 Mohan Lal (deceased) through his LRs. Vs. Mirza Abdul
Gaffar and Another3.
In this case, possession of land was obtained as per
the agreement. There was a suit for specific performance by the
purchaser against vendor was dismissed and it attained finality.
On this background, the vendor filed a suit for recovery of
possession. It was held that when purchaser lost the suit for
specific performance, it would be inconsistent and incompatible
with his right to remain in possession under the agreement. That
2(1997) 3 SCC 584
3(1996) 1 SCC 639
15 SA-574-2004 (J).doc
was a time when part performance was considered as only shield
and not as a sword (para 5). It was further held that transferee
must plead and prove his readiness and willingness to perform his
part of contract so as to unable him to retain his possession of
immovable property. Except vaguely denying that he is not ready
and willing to perform his part, he had not specifically pleaded it
(para 6). There was emphasis on ingredients of Section 16(c) of
the Specific Relief Act, 1963. It creates a personal bar to ask for
specific performance if he failed to prove readiness and
willingness.
3 Patel Natwarlal Rupji Vs. Kondh Group Kheti Vishayak &
Another4.
The transferee in possession on the basis of
unregistered agreement for sale filed a suit for declaration that
land is not liable to attachment and sale for recovery of debt due
from his landlord. The prayer was not allowed on two grounds.
One section 53-A cannot be invoked to seek such declaration and
on facts, the agreement was not considered as a genuine
transaction, but was considered as sham and fraudulent document
to defeat the rights. The transferee was a privy to the fraud. There
was emphasis on the principle that a person who seeks equity
must come with clean hands.
4(1996) 7 SCC 690
16 SA-574-2004 (J).doc
4 Ram Kumar Agrawal & Another Vs. Thawar Das (Dead)
through L.Rs.5.
There was emphasis on not pleading and proving
readiness and willingness and it was one of the ground which is
considered as a personal bar to relief under Section 16(c) of the
Specific Relief Act. Except the performance of those terms which
were prevented or waived by the defendant, the plaintiff must
aver and prove about his readiness and willingness. The plea as to
payment was not raised bonafidely or was not abandoned. A
person who falsely claims to have paid Rs.2,000/- and attempts to
prove his willingness to pay Rs.7,000/- cannot take the benefit of
Section 53-A of the Transfer of Property Act.
5. Mool chand Bakhru & Another Vs. Rohan & Others6.
In order to take benefit of Section 53-A, there must be
meeting of mind discernible from the terms of the agreement
written contract. Agreement must come into existence before
possession given to proposed vendee. The letter suggests oral
agreement and it cannot be said to be a written agreement.
Accordingly, on the basis of oral agreement, protection under
Section 53-A was denied.
5(1999) 7 SCC 303
6(2002) 2 SCC 612
17 SA-574-2004 (J).doc
6. D.S. Parvathamma Vs. A. Srinivasan7.
There were two versions. One is landlord and second
is vendor purchaser. Following were considered as the essential
features of equitable doctrine of part performance--
a. Transferee taken in possession.
b. Part performance not available against the transferee
for consideration who had no notice of the contract or part
performance thereof (only available to first transferee)
(para 6).
c. Either transferee has performed or willing to perform
his part of the contract.
7. Rambhau Namdeo Gajre Vs. narayan Bapuji Dhotra (Dead)
through L.Rs.8.
Benefit under Section 53-A can be taken only by
transferee and cannot be taken against the 3 rd person with whom
there is no previty of contract.
7(2003) 4 SCC 705
8(2004) 8 SCC 614
18 SA-574-2004 (J).doc
Plaintiff purchased the land from the respondent.
plaintiff has paid entire consideration and he was put in
possession. Furthermore, plaintiff executed an agreement for sale
in favour of the appellant and he has accepted entire
consideration and appellant was put into possession. Respondent
filed a suit for possession of land from the appellant. There was no
previty of contract between the appellant and the respondent and
hence no plea of part performance is available to appellant.
8. A Lewis & Another Vs. M.T. Ramamurthy & Others9
There was unregistered agreement for sale dated 4 October,
1982 and there was registered sale-deed dated 23 rd December,
1982. Plaintiff filed a suit on the basis of registered sale-deed.
Plaintiff was not having notice of agreement for sale dated 4 th
October, 1982. The appellant was denied benefit of part
performance. For the reason that he has kept quiet and remained
passive without taking steps.
9. FGP Limited Vs. Salesh Hooseini Doctor & Another10.
There were two agreements on 16 July, 1981. One is
for tenancy and second is for selling the flat for Rs.5 lakhs. The
9(2007) 14 SCC 87
10(2009) 10 SCC 223
19 SA-574-2004 (J).doc
transferee/tenant company filed a suit for specific performance,
whereas the landlord filed a suit for eviction. Appellant company
was denied benefit of Section 53-A of the Transfer of Property Act
as they have remained silent for 10 years and failed to show when
he came into possession of the property. The suit for specific
performance was filed after suit for eviction was filed. It was held
that benefit under Section 53-A cannot be upheld.
10. Vasanthi Vs. Venugopal (Dead) through L.Rs.11.
Plea under Section 53-A was held available even
though transferee has not filed suit for specific performance within
limitation. Still transferee has to prove essential prerequisites to
avail of the benefit of Section 53-A of Transfer of Property Act.
The following were held to be essential prerequisites -- (a)
written contract for consideration and its terms are clearly
ascertainable with certainty, (b) taking possession by transferee in
part performance and (c) doing some act in furtherance of the
contract and readiness and willingness.
11. Shyam Narayan Prasad Vs. Krishna Prasad & Others12.
Plea of part performance was not raised in a written
statement. The importance of pleading to give intimation of the
112017 4 SCC 723
12(2018) 7 SCC 646
20 SA-574-2004 (J).doc
case to other side was emphasized so as to enable the court to
determine what is really an issue. Relief was not granted to the
party without pleading. Plea of Section 53-A can succeed only
when it is pleaded that he has taken possession in part
performance of the contract (para 23).
12. Seshasayee Steels Private Limited Vs. Assistant
Commissioner of Income Tax Company Circle VI(2). Chennai13.
As per the agreement, vendor gave permission to
purchaser to start construction on the land. Licence was given to
another to develop the land. It was held that such licensee cannot
be said to be in possession within the meaning of Section 53-A of
the Transfer of Property Act. It denotes control over the land and
not merely annual physical possession. Juridical possession is
required and no licensory occupation is recognized.
13. Harish Kashinath Mane Vs. Haribhau Adkoji Sapate14.
Necessary conditions for invocation of Section 53-A of the Transfer
of Property Act were laid down. They are--
a) There must be contract.
13(2020) 14 SCC 774
142010 (4) Mh.L.J. 817
21 SA-574-2004 (J).doc
b) It must be in writing.
c) Terms necessary to constitute, the transfer can be
ascertained with certainty (para 11).
d) Transferee must be in possession in part
performance.
e) Transferee must have done some act in furtherance
of the contract.
f) He must have performed and willing to perform.
14. Shivram Kisan Gunjal died, through L.Rs. Radhesham s/o
Shivram Gunjal & Others Vs. Ramesh Vishwanath gunjal &
Others15.
There was a clause of failure, forfeiture of earlier payment if
remaining amount of Rs.9,000/- was not paid within three
months. There was no evidence about payment of remaining
amount within three months. Failure to prove performance of part
of the contract was considered as a factor to deny benefit of part
performance (para 23).
152015(5) Mh.L.J. 623
22 SA-574-2004 (J).doc
15. Yuvrani Hansa Devi Vs. Zafar Farooq Vohra & Another
reported16.
There was an emphasis on transferee to show willingness to
perform and he has undertaken some action in part performance.
They were not proved.
16. Deorao s/o Balaji Bhoyar (D) through L.Rs. Vs. Ganpat s/o
Punaji Bawne (D) through L.Rs.17.
Defendant transferee was held not entitled to retain
possession. He was denied equitable relief of specific performance
due to failure to prove continuous readiness and willingness.
17. Shobha Janardhan Masram Vs. Ganpat Gulabrao Thakre18.
There were concurrent findings about default on the
part of petitioner to perform her part of contract. Hence, benefit
was denied (para 18).
162012(1) Mh.L.J.302
172014(4) Mh.L.J. 820
182015(5) Mh.L.J.271
23 SA-574-2004 (J).doc
18. Navinchand Khushalcand Mutha Vs. Banaji Damu Sonde
(since deceased) per L.Rs. Anjani Bhausahed Gagre & Others19.
Following ingredients were held necessary--
a) Written contract.
b) Taking of possession.
c) Doing some act in furtherance.
d) Readiness and willingness.
Observations in AIR 1982 SC 989 were reproduced--
Acts preliminary to contract would be hardly of any assistance - in
ascertaining whether they were in furtherance of the contract -
anything done in furtherance of the contract - postulates pre-
existing contract and acts done in furtherance thereof - acts
anterior to contract or merely incidental to contract would hardly
provide any evidence of part performance.
19. Ajabrao marotrao Radake Vs. Bhalchandra Vitthalrao
Deshpance20.
192016(5) Mh.L.J. 682
202017(3) Mh.L.J. 850
24 SA-574-2004 (J).doc
Defendant could not discharge the burden of proving of readiness
and willingness by making payment of balance amount of agreed
date and hence, benefit of part performance was denied.
20. Ghanshyam Deoram Gaikwad Vs. Samshon John Gaikwad &
Another reported21.
The impugned agreement to sell was not on sufficient stamp paper
and not registered agreement to sell executed and by separate
document possession handed over. In the written statement, no
specific plea of benefit under Section 53-A was taken. The
provisions of Section 53-A were amended on 24 September, 2001.
Further condition that agreement must be registered one was
omitted. Objection that documents were on insufficient stamp
paper while exhibiting it was not raised. In view of Section 35 of
Bombay Stamp Act, plaintiff in appeal cannot take that plea (para
15). By amendment "contract though required to be registered has
not been registered" has been omitted. Corresponding amendment
in Section 17 of the Indian Registration Act "agreement to sell
with handing over possession compulsorily registerable" was
made. Both Exhs. 30 & 31 have come into existence after
amendment to Section 53-A of the Transfer of Property Act and
Section 17 of the Registration Act. Therefore, it was mandatory to
212020(2) Mh.L.J. 451
25 SA-574-2004 (J).doc
register them. No explanation was offered. Hence, plea under
Section 53-A was held not available (para 15).
21. After reading above judgments, the following
principles are culled out--
a) Transferee before asking for the benefit must fulfill
his part of the contract.
b) Readiness and willingness must be pleaded and
proved.
c) It is equitable relief and it cannot be granted to
person who comes with unclean hands.
d) Even if the transferee falsely claims that he has paid
some of money, but failed to prove at the trial stage,
he cannot be said to be ever ready and willing.
e) Oral agreement to sell cannot be termed as an
agreement - reduced into writing which is
prerequisite.
f) There has to be privity of contract between a person
against whom right is claimed and the person who is
claiming such right.
g) Keeping quiet and passive by transferee without
taking effective steps disentitles for protection.
h) Even though suit for specific performance to be filed
by transferee is time barred, still such transferee is
entitled to avail of benefit of protection.
26 SA-574-2004 (J).doc
i) The possession of transferee must be as per the
agreement and not otherwise.
j) Juridical possession is contemplated for Section 53-A
and not licensory possession.
k) The transferee has to prove payment of entire
consideration before availing of the benefit. Without
proof of readiness and willingness, protection cannot
be granted. (It depends upon terms of the
agreement)
l) Possession handed over on the basis of unregistered
agreement. Protection not available. This is after the
amendment of 2001.
22. Above principles were laid down on the basis of the
facts of that case. Now, it will be material to consider how both
the Courts below have appreciated the evidence and whether
there is any perversity in the said findings.
Submission of Appellant
23. According to learned Advocate Shri Dangre, when the
question of readiness and willingness to perform the promises by
the transferee arises, the law does not differentiate in between
payment of entire consideration and not paying a meager
consideration. He submitted that though the first Appellate Court
has reversed the findings of the trial Court about the payment of
Rs.8,380/- by the defendants, while giving a final finding the first
27 SA-574-2004 (J).doc
Appellate Court committed wrong. According to him, there are
two areas in respect of which the defendants have not complied
with the terms of the agreement and hence they cannot be said to
be ready and willing. Those areas are -
a) failure to prove payment of remaining
consideration of Rs.8380/-. According to him,
once the defendants have pleaded about payment
of that amount, it is their responsibility to prove it
by adducing reliable evidence.
b) Failure to comply -
i) the various provisions of Income Tax Act.
ii) to obtain NOC from competent authority
under Urban Land Ceiling Act.
iii) to obtain permission from Pragati Co-
operative Housing Society.
24. Further he submitted that by stretch of interpretation
of the terms of the agreement, it can be said that the
defendants/transferee get uncontrolled right to use the suit plot as
per their own sweet will. According to him title is not transferred
and till then the defendants atleast are not entitled to construct a
building and using it for school purpose and that too by the
Sanstha with whom admittedly there is no agreement. He
emphasized that this act of defendants (allowing Sanstha) dis-
28 SA-574-2004 (J).doc
entitles them to seek equitable reliefs based on the provision of
Section 53-A of the Transfer of Property Act. He also emphasized
on the approach of the first appellate court in not considering an
important facet of Section 53A of the Transfer of Property Act.
25. "The transferee has performed or willing to perform"
is one of the most important prerequisite of Section 53-A of
Transfer of Property Act. However, this obligation is added by the
phrase "his part of contract". So it must be obligation on the
transferee as per the contract. It is for the transferor to show that
(promises of which she is complaining of breach) the acts are part
of contract. For this reason the evidence need to be looked into.
Failure to prove payment of remaining consideration and failure
to obtain NOC/permission
26. The total consideration as per the agreement is
Rs.1,00,380/-. There is no dispute that plaintiff has received
Rs.92,000/-. The dispute pertains only to the payment of
Rs.8380/-. The Trial Court believed the defendants case about
payment of the said amount. Amongst the two defendants,
defendant no.1 Arvind only entered into witness box. He relied
upon following documentary evidence. -
a) Exhibit 60- counterfoil for receipt of a cheque for Rs.5000/-
29 SA-574-2004 (J).doc
b) Exhibit 61- receipt for Rs.3380/-.
27. According to the trial Court, these documents are
sufficient. Whereas, the First Appellate Court considered these
documents as insufficient. In order to ascertain whether there is a
perversity in the finding, this Court has perused the reasoning.
They are as follows:-
a) On exhibit 60, the husband of the plaintiff has
signed as a token for receipt of a cheque. The
date of the cheque was 04th August, 1986.
Whereas the date of the receipt is 04 th July,
1986. The First Appellate Court observed that
"there was no case put up by defendants about
issuance of post dated cheque".
b) There was a certificate issued by the banker
certifying issuance of the cheque in favour of
the plaintiff. It was filed as per the list at
Exhibit 90. The first Appellate court observed
"necessary witness has not been examined by
the defendants".
c) Any entry in the passbook showing that the
money has been debited to the account of the
defendants is not produced.
d) About Exhibit 61, it was observed that, it was
produced after completion of evidence of
plaintiff. Plaintiff attempted to disprove this
receipt by making request to the Court to
recall her husband, so also an application for
appointment of an expert went in vain,
because, plaintiff was not allowed to do those
things. Even her attempt of challenging the
order before this court by filing revision was
unsuccessful.
30 SA-574-2004 (J).doc
28. If these reasons are perused, we can certainly say that
the conclusion is drawn on sound reasoning, by applying the
settled principles of law about appreciation of evidence and hence
it appeals to the conscious of any prudent man. This Court does
not find any perversity in those findings. This court confirms the
findings that "defendants have failed to prove payment of
consideration of Rs.8380/-".
29. There is an argument on behalf of defendants that
those findings against them does not make their case weak
because - time to pay those amounts have not come as per the
agreement. So it will be material to consider the relevant clauses
of the agreement.
Clause 2 about payment of consideration reads as follows :-
(a) Rs.50,000/- to be paid on the date of agreement;
(b) Rs.50,380/- to be paid on the date of sale deed.
Clause No.8 of the agreement lays down the following period for
execution of sale deed-
(a) On or before 30th June, 1983
OR
(b) within one month from procuring necessary
Income Tax certificate. Wherever may be later.
31 SA-574-2004 (J).doc
30. On reading all the terms reproduced above, we may
find that payment of consideration is in two installments. First
installment is on the date of execution of sale deed. There is
dispute about payment of Rs.8,380/- towards consideration (total
consideration is Rs.1,00,380/-). The undisputed/proved payment
of consideration received is as follows :-
a) Rs.50,000/- on the date of agreement in question
b) Rs.42,000/- thereafter from time to time.
--------------
Rs.92,000/- Total
Rs. 8,380/- disputed.
Obtaining NOC/Permissions :
31. It is also clear that remaining consideration has to be
paid at the time of execution of sale deed. It is also clear that sale
deed is made time bound and also correlated to obtaining
NOC/permission and amongst them which is later. Now evidence
on that aspect needs to be looked into.
32. The terms above referred are not in dispute. It is also
true that the date of execution of sale-deed i.e. 30 th June, 1983
have expired long back. It is very well true that none of the parties
have pleaded that the compliance for obtaining certificate, NOC
has been done by either of the party. Both the parties are pointing
32 SA-574-2004 (J).doc
out blame against each other for its non-compliance. Plaintiff
contend that it was the responsibility of the defendants whereas
defendants contend that it was the responsibility of the plaintiff.
On this background when we have read the relevant clauses of the
agreement, we may find that it was the responsibility of the
vendor/ the plaintiff. The relevant clauses are as follows:
(a) Clause no.9: obtaining income Tax clearance
Certificate
(b) Clause no.10- obtaining permission from Pragati
Society for transfer of plot.
(c) Clause no.13- giving notice under Section 29 of
ULC Act to competent authority.
33. All these clauses succinctly lay down that it is the
responsibility of the vendor to do necessary compliance. She has
not pleaded that she has done that. In fact, she puts a blame on
the defendants. There is no basis for that.
34. Failure to comply with various provisions of Income
Tax Act is also the ground taken by the plaintiff in order to rely
upon the doctrine of frustration. There is a reliance on the
following provisions of Income Tax Act-
33 SA-574-2004 (J).doc
Provisions of Income Tax Act
a) Section 230 -A - It prohibits the sub registrar from
registering the document(which requires compulsory
registration) unless certificate from assessing Officer
is obtained.
b) Section 269 AB - It says about reducing into writing
by way of statement- of every transaction wherein
possession of immovable property is taken as
referred to in Section 53-A of T.P. Act. (Rule 48 DD of
Income Tax Rules, 1962 lays down the format of the
statement and it should be in form No.37 - EE).
c) Section 269 P- It prohibits the sub registrar from
registering a document of transfer unless a statement
containing particulars is verified.
d) Section 269 UC- It mandates about executing an
agreement within four months prior to intended date
of transfer wherein value of the property exceeds
Rs.5,00,000/-
e) Section 269 UD- It empowers the appropriate
authority to purchase the property by the Central
Government in respect of which statement is filed
under Section 269 UC of the TP Act.
f) Section 269 UE- It says about vesting of property in
Central Governmetn when an order is made under
Section 269 UD of the T.P. Act.
g) Section 269 UF & 269 UG- it says about manner of
payment of consideration by the Central
Government.
h) Section 269 UH- It says about re-vesting of property
in the transferor when Central Government fails to
deposit the amount of consideration.
34 SA-574-2004 (J).doc
i) Section 269 UL- It prohibits the Sub registrar from
registering the document of transfer of immovable
property exceeding Rs.5,00,000/- unless appropriate
authority has given no objection.
j) Section 276- It lays down punishment for fraudulent
removal of the property.
Finding by the Courts below
35. The trial Court has observed that the provisions of
Income Tax Act are special in nature and they will override the
general provisions of Transfer of Property Act. According to the
trial Court as defendants have not complied with the obligations
laid down in above mentioned Sections, the agreement has
become void and unenforceable. Whereas, the First Appellate
Court has reversed those findings and given wheightage to the
terms of the agreement and responsibility on the vendor/the
plaintiff. According to First Appellate Court, if the plaintiff has
failed to comply with those requirements, certainly she is at fault
and hence cannot make grievance about frustration of the
agreement. The trial court has declared the agreement as "void
and unenforceable". It is the on account of non-compliance of the
provisions of Income Tax Act, whereas the first appellate court
reversed those findings and also that relief. This court feels that
the appellate court is right.
35 SA-574-2004 (J).doc
36. When we saw the reliefs in the plaint, we may find (a)
relief of declaration that termination of the agreement is legal and
(b) for possession - are sought. Relief of declaration as to
termination is founded on "non-compliance of the terms of the
agreement". It is based on certain provisions of the Indian
Contract Act. Whereas, the relief based on frustration of contract
does also finds place in Indian Contract Act. But it stands on
different footing. At the same time, it is true that the plaintiff has
not asked for the relief of frustration of contract. Plaintiff has not
sought for declaration "that the agreement has become non-
executable". So the first appellate court has properly denied that
relief and corrected the mistake committed by the trial court. I
will give reasons for endorsing that view.
Doctrine of Frustration
37. The First Appellate Court has also framed a point
No.5 as to "whether there is frustration of the agreement". It is
true that Section 56 of the Indian Contract Act lays down the
contingencies wherein the agreement can be said to be void.
The first category is an agreement to do an impossible act.
Second category comes into play wherein contract becomes
impossible to perform or unlawful to perform - such contract
becomes void.
36 SA-574-2004 (J).doc
38. The First Appellate Court has rightly refused this
grievance and overturned findings given by the Trial Court in that
behalf. This Court agrees with the reasoning given by the First
Appellate Court for arriving of that conclusion. There are two
reasons for that. One is the terms of the agreement are very clear
and unambiguous. Those terms cast an obligation on the vendor
to do the necessary compliance. Secondly, the provisions quoted
above from the Income Tax Act lays down how the agreement in
the form of a statement is to be entered into. Even, the format of
that statement is given as per the Rules. No doubt, both of the
parties have not furnished that statement containing necessary
particulars before the Income Tax Authorities. Statement simply by
the transferee is not sufficient. It has to be filed in by both the
transferor and transferee. There is no freedom to give the
information in a manner other than the form prescribed. Whereas,
there is no form prescribed for entering into a sale-deed or
agreement for sale as contemplated under Section 54 of the T.P.
Act.
39. These provisions of the Income Tax Act are included
under the Chapter XX-C dealing with purchase by Central
Government of immovable property in certain cases of transfer.
The intention is to safe guard the economic interest of the State.
37 SA-574-2004 (J).doc
There is no intention to regulate transfer of immovable properties
under general law.
40. The issue about correctness of the order passed by the
appropriate authority under the Income Tax Act thereby, treating
the form as defective was challenged before the High Court of
Delhi in case of Ansal properties and Industries Ltd. Vs.
Appropriate authority and others 1999 Indian Law Reports
Vol.236 page 793. It was observed that :-
"the provisions of Chapter XX-C of the Income Tax Act can
make an inroad into the general law relating to the
Transfer of Property and Contract Act only to the extent
specifically provided for and not beyond. The only
penalty which the parties to private agreement suffer by
not complying with the provisions of Chapter XX-C where
its applicability is that deed of transfer pursuant to the
agreement should not be registered. However, the rights
and obligation incurred by the parties to a private
agreement do not fall to the ground and are not avoided"
(page no.809)."
41. This view has been affirmed by the Hon'ble Supreme
Court in case of DLF Universal Ltd. Vs. Appropriate authority and
another 2000 Indian Law Reports Vol.243 page 730 . The
agreement which parties enter mutually is described as a private
agreement. Whereas the agreement in the form of statement as
38 SA-574-2004 (J).doc
per Income Tax Act is described as proforma agreement. In
nutshell, it means just because there is non-compliance of the
provisions of Income Tax by either of the side, still the relationship
between the parties will be governed by the provisions of private
agreement and of general law. So when the transferor/plaintiff
has failed to fulfill her contractual obligations, she cannot get rid
of the contract by contending that the mandatory provisions of
Income Tax Act were not followed.
42. The First Appellate Court has considered these
observations. The plaintiff has not relied upon any observation
contrary to the above observations. So, it will be difficult to digest
that plaintiff can succeed in seeking declaration that the
agreement is void and unexecutable on account of non-fulfillment
of the provisions of the Income Tax Act. So, this Court concur
with the findings recorded by the First Appellate court in that
behalf.
Failure to obtain NOC as per Urban Land Ceiling Act and Failure
to obtain NOC of Society
43. The First Appellate court has held the plaintiff
responsible for non-compliance of some of the terms of the
agreement. Two of them are Clause No.10 (obtain permission
from Pragati Society) and Clause No.12 (giving notice under
39 SA-574-2004 (J).doc
Section 26 of the ULC Act to the competent authority). Even
though, plaintiff through her husband has blamed the defendants
for non-compliance with those requirements, above two referred
clauses of the agreement bestows responsibility on the plaintiff-
vendor herself.
Evidence of witness
44. On the point of compliance of the procedure for
obtaining NOC from the society plaintiff has examined Balasaheb
Jadhav- Manager of the said Society. His evidence is relevant on
two aspects. One is about compliance of the procedure for
obtaining NOC of the society and secondly through him copy of
NOC granted by the society in respect of mutating the suit plot in
the name of the plaintiff (At Exhibit 50) was brought on record.
He has tried to explain the procedure which is to be followed
when new member is to be admitted and the amount of transfer
fee to be paid. It is true that none of the witness has said that any
application is made to the society either by the transferor by the
transferee but, the fact remains and it is that it is whose
responsibility? Ultimately, as per the agreement it is responsibility
of the transferor. Hence, she cannot blame the
defendants/transferees for not obtaining NOC of the society and
thereby disentitling them from pleading this ground in order to
damage the plea of readiness and willingness pleaded by the
40 SA-574-2004 (J).doc
defendants. The First Appellate Court (in paragraph no.29) has
reproduced those clauses and rightly rejected the grievance of the
plaintiff "to blame the defendants".
Evidence on the point of valuation
45. It was a grievance put-forth on behalf of the plaintiff
that valuation of the suit land has increased up to Rs.22,00,000/-
and she will be required to pay capital gain tax and as such the
agreement is incapable of execution. In order to prove the
valuation, the plaintiff has examined Anil Bhivgade- Clerk from
Sub Registrar Office. He has quoted the Government valuation
prevailing in the area in which suit land is situated. He has also
produced price index for the purpose of valuation for stamp duty.
The area of the plot is 465 sq. mtrs. and rate per sq. mtrs. is
Rs.4795/-. So, the total valuation comes to Rs.22,00,000/-
whereas according to the defendant no.1 Arvind, the valuation is
Rs.10,00,000/-. The Trial Court has referred to Section 269 UC
and Section 269 UL of the Income Tax Act (paragraph No.41). It
prescribes the limit of Rs.5,00,000/- and above. The plaintiff has
made a grievance that there is increase in valuation in order to
substantiate her ground that agreement has become impossible to
perform and as such void.
41 SA-574-2004 (J).doc
46. The Trial Court has accepted this as one of the ground
for declaring the agreement as unenforceable, whereas the First
Appellate Court has not accepted it. According the First Appellate
Court whatever may be valuation ultimately it was the
responsibility of the plaintiff to obtain NOC from Income Tax
authorities. The clause in the agreement is very well clear. It was
the responsibility of the plaintiff to obtain the NOC and no one has
prevented her from complying with her part of the obligation. As
she had not come with the case that her obligation has been
complied with, she cannot take the aid of provisions of Income Tax
Act. There is no perversity in the findings of the First Appellate
Court.
Not Exchanging draft of sale-deed by defendants -
47. At attempt is made by pointing out that the
defendants have not exchanged the draft of the sale-deed to the
plaintiff and it is required to be submitted before the appropriate
authorities under the Income Tax Act. This point is discussed by
the First Appellate Court in para no.31 at the end I am afraid that
this contention can be accepted. It is for the reason that there is
no communication brought on record on behalf of the plaintiff to
show that she had asked draft of sale-deed to be executed. If such
draft is required for submitting before Income Tax authorities and
42 SA-574-2004 (J).doc
when it is a responsibility of the plaintiff to make compliance as
per the provisions of the Income Tax Act, plaintiff cannot simply
blame the defendants about not submitting draft of sale-deed. She
ought to have taken positive steps in that direction. There is no
evidence to that effect and cannot be accepted.
CONCLUSION
48. For the above discussion, it can certainly be said that
the first appellate court was right in rejecting the grievance of the
plaintiff that, "defendants have failed to comply with the terms of
the agreement relating to obtaining NOC/permissions". If that is
so, the question of execution of sale deed will not come into
question. Corollary question of paying remaining consideration of
Rs.8,380 will also not come. Still learned Advocate for plaintiff
rest his argument from different perspective. If the defendants
take up a plea that they have paid full consideration, they have to
prove it and if not proved they have to suffer. This argument will
be answered in later part of judgment.
Grievance about carrying out construction without permission and
running a school
49. It is true that there are two contingencies mentioned
in the agreement about handing over possession. One is on the
43 SA-574-2004 (J).doc
date of execution of the agreement possession is to be handed
over and second is possession is to be handed over on the date of
execution of sale deed. Normally, any such agreement does not
contain such alternative clause. Learned Advocate Shri Dangre has
emphasized on such alternate contingencies of handing over
possession. He also made a grievance about taking forcible
possession. The grievance of forcible possession has been denied
by the both the Courts below. So also both the Courts below are
consensus on the point of handing over possession on the date of
agreement (not at the time of execution of sale deed). It is true
that from the agreement none of the clause is pointed out about
possible use of the land by the defendants once they are put in
possession. Here, the plaintiff has got two grievances -
a) carrying out construction without permission,
and running a school without permission
b) running a school without permission
c) and allowing third person to run a school with
whom there is no privity of contract with the
plaintiffs.
50. According to the learned Advocate Shri Dangre, these
are the two factors which dis-entitles the defendants from securing
equitable relief of part performance. To buttress his submission as
44 SA-574-2004 (J).doc
to who can get the benefit of part performance, he put emphasis
on following judgments.
a) Rambhau Namdeo Gajre Vs. Narayan Bapuji Dhotra
(Dead) through L.Rs., Reported in (2004) 8 SCC
614.
b) Seshasayee Steel Private Limited Vs. Assistant
Commissioner of Income Tax Company
circle VI (2) Chennai reported in (2020) 14 SCC
774.
It will relevant to consider findings given by both the Courts below
on this aspect.
Findings by the Trial Court
51. The Trial Court has framed an issue about "carrying
out construction without permission". It was answered in
affirmative. Though there is no issue about running of a school,
we may find observations in the judgement of the Trial Court
that construction was done without obtaining permission from
NMC and of the plaintiff. However, the Trial Court found out
different category of trespass and held that plaintiff had not
proved that defendants are trespassers (para no.24).
Findings by the First Appellate Court
52. There is no specific point framed about construction
being carried out without consent. However, we may find the
45 SA-574-2004 (J).doc
discussion in para no.19 and para no.35. There is finding in no
unclear terms that temporary shade admeasuring 600 sq. ft was
constructed without permission of the plaintiff and defendant no.1
commenced a primary school. The First appellate court had also
given a categorical finding that construction was carried out by
defendant no.1 without permission of NMC and of plaintiff. The
First Appellate Court went to the extent of observing that if the
construction is illegal the concerned authorities can take an
action. About carrying out the school, it has been observed that
defendant no.2 is a Secretary of Mahatma Bahuuddeshiya
Shikshan Sanstha (para 35) and it is not the contention of
anybody about capacity of said Sanstha that is lincesee or
permissive possession. There is emphasis on defendant no.2 being
party to the suit.
53. Learned Advocate Shri Dangre submitted that when
the construction is admittedly illegal and when school is being run
by an Institution with whom the plaintiff has never entered into
an agreement, such defendants cannot be granted equitable relief
of part performance. To buttress his submission he emphasized on
the principle laid down in case of Patel Nartwarlal Rupaji as
referred above. In the written notes of argument filed on behalf of
the defendants, there is also emphasis on the findings given by the
46 SA-574-2004 (J).doc
Courts on both these aspects and there is a submission that they
need not be interfered with in a second appeal involving limited
scope for interference.
54. Unfortunately I am unable to agree with the
submission made on behalf of the respondents as well as I am
unable to subscribe the view expressed by both the Courts below.
In fact, both the Courts below have not interpreted the provisions
of Section 53-A of the T.P. Act in a proper spirit.
55. It is true that agreement for sale does not create any
interest in the property sought to be purchased as contemplated
under Section 54 of the T.P. Act. Once the transferee becomes a
full owner on transfer of title, he has got full right to deal with the
property as he wants. Till the time title is transferred, there are
restrictions on the transferee to enjoy the property sought to be
purchased. Already there is a dispute about defendants being put
in possession of the suit land. However, this grievance is not
accepted by both the Courts below and this view has been
subscribed by this Court. The defendants have not pointed out any
clause from the agreement to the effect that what will be the use
of the land by the defendants once they are put into possession.
So, we have to go by the test of prudent man. It suggest that the
transferee (who was put in possession) will make minimum use of
47 SA-574-2004 (J).doc
the land put in his possession. Everyone knows that if the
construction has to be made which is going to be used for a school
requires permission from the local authority. So, we can certainly
attribute knowledge on the part of defendants about necessity of
permission from local authority as well as of the owner prior to
making any construction.
56. No doubt, it has come in evidence that plaintiff has
not objected to the construction made without permission except
by way of issuing suit notice dated 25/11/1993 at Exhibit 29. So,
inaction on the part of the plaintiff till sending of a notice whether
it can be said to be waiver on her part? From one point of view, it
can be said that plaintiff has not protested about the two
unsanctioned acts (of making construction and running a school)
but, from another point of view can we justify the act of carrying
construction without obtaining permission of NMC? The answer
will be certainly no. When the permission is required from NMC,
the act of carrying construction cannot be justified in the eyes of
law. At the same time it is very well true that both the courts have
concurrently held that "suit is filed within limitation". This court
does not find those findings perverse on any reason.
57. The approach of both the courts below is certainly
wrong. When the issue of illegal construction had come before the
48 SA-574-2004 (J).doc
Court (not at the instance of local authority) but at the instance of
plaintiff, it was wrong on the part of the Courts below to leave
that issue for the authorities to take action. This is more true when
the Court is dealing with grant of equitable relief of part
performance.
58. It will be material to consider the observations of the
Hon'ble Supreme Court in case of Patel Natwarlal (supra) as
referred above on the point of equitable doctrine of part
performance. It reads as follows :-
"Though the doctrine of part performance embodied in
Section 53-A of the Act is part of equitable doctrine in
English Law, Section 53-A gives statutory right which is
available to the transferee for consideration in
possession of the property held under the contract. In
terms of the section, so long as the transferee has done
and is willing to perform his part of the contract or, in
other words, is always ready to abide by the terms of the
Contract and has performed or is always ready and
willing to perform his part of the contract, the transferee
is entitled to avail of this statutory right to protect his
possession as a shield but not as a sword. The right to
retain possession of the property rests on the express
provisions of the Act and on his compliance thereof. A
person who pleads equity must come to the court with
clean hands and he alone is entitled to the benefit of his
section. The section does not create a right or title in the
49 SA-574-2004 (J).doc
defendant. It merely operates as a bar to the plaintiff to
assert his title. The transferor is barred from enforcing
his rights other than those expressly provided by the
contract. The section, therefore, imposes a bar on the
transferor, when the Conditions mentioned in the
section are fulfilled by the transferee, and section bars
the transferor to enforce his rights against such
transferee or person deriving right, title and interest
from such transferee."
59. There is one more angle. It has been held in case of
Rambhau Namdeo as referred above that there should be privity
of contract in between the transferor and the transferee who is
claiming the benefit of part performance. The subsequent
transferee in possession has claimed the protection of part
performance when there was no privity of contract in between
him and the original owner. The owner enters into an agreement
for sale with a purchaser with possession and the said purchaser
entered into an agreement for sale with the third
person/defendant. In a suit for possession the defendant was held
not entitled to claim benefit of part performance.
60. Whereas, in case of Seshasayee Steels Private Limited
as referred above there was emphasis on possession of the
transferee being juridical possession only. There was an agreement
50 SA-574-2004 (J).doc
to develop the property and permission was given to start
construction on the land. Whereas such person in turn permitted
another to undertake the construction. Such lincensee was held
not to be entitled to protection of part performance. What is
required, is control over the land and mere actual physical
possession is not sufficient. The relevant observations find place in
paragraph 14. It reads thus :
"The doctrine of part performance is rooted in equity and
provides a shield of protection to the proposed transferee
to remain in possession against the original owner who has
agreed to sell to the transferee if the proposed transferee
satisfies other conditions of Section 53-A. It operates as an
equitable estoppel against the original owner to seek
possession of the property which was given to the
proposed vendee in part-performance of the contract. The
appellant being a third party and not a privy to the
transaction on which the estoppel rests can take no
advantage of it."
61. If we apply above principles to the case before us we
may find that Mahatma Bahuuddeshiya Shikshan Sanstha is
running a school in the building constructed by defendant no.1. It
has come in the evidence that defendant no.2 is a Secretary of that
Sanstha. It is a matter of record that both the defendants are
prospective purchasers mentioned in the agreement. But, the First
51 SA-574-2004 (J).doc
Appellate Court observed that nothing has come on record about
the status of that Sanstha that is to say licensee or permissive
possessor. The First Appellate Court is right in the said
observation. At the same time, the First Appellate Court has
forgotten to consider the principles as to burden of prove. The
plaintiff has pleaded about running a school by the defendants.
She may not be aware as to in what capacity they are running the
school. It is a matter of record that defendant no.2 who claims to
be the Secretary of that Sanstha had chosen not to enter into
witness box. The defendant no.1 during cross-examination has
stated that he is not concerned with the said Sanstha and in fact
defendant no.2 is the Secretary of that Sanstha. Under these
circumstances, it was obligatory on the part of the defendant no.2
to give evidence and to clarify what is the nature of that Sanstha.
The Sanstha may be a public trust imparting education.
62. There is a separate civil application for issuing
directions to defendants to deposit certain sum of money (as they
are getting grants from the Government). The copy of the
agreement is also annexed. This has been denied by the
defendants. So if that Sanstha is a public trust, no doubt it is legal
entity separate from that of defendant no.2. There is a reason to
believe that defendant no.2 has concealed those material facts
52 SA-574-2004 (J).doc
from the Court. It is also true for defendant no.1 who allowed to
run a school by Sanstha of which defendant no.2 is a Secretary. He
has not clarified about the relationship in between him and that
Sanstha. It is but natural that he must have consented for running
of the school of that Sanstha.
63. For the above discussion, this Court holds that
Mahatma Bahuuddeshiya Shikshan Sanstha is in possession of the
school building and that Sanstha has not entered into an
agreement with the plaintiff. And whereas defendant no.1 has
allowed that Sanstha to use the construction on the said plot and
this conduct dis-entitled him from claiming equitable relief. The
defendant no.2 has also dis-entitled himself from claiming
equitable relief. These aspects were not considered by the First
Appellate Court. Said findings can certainly be said to be perverse
which were arrived at by overlooking the provisions of law. Both
the courts below have forgotten to consider that the defence of
part performance is based on equity. Transferor can be denied
relief only when the contenders of the theory of part performance
had come with the clean hands. Both the defendants have
committed above positive acts and disentitled themselves.
53 SA-574-2004 (J).doc
64. Hence, this Court concludes that the plaintiff though
is not entitled to declaration that the agreement is void and
unenforceable, the plaintiff certainly succeeds in disentitling the
defendants from claiming protection of part performance. This
conclusion is drawn mainly for two reasons. One is- taking a false
plea about payment of consideration of Rs.8380/-. The
observations in case of Ram Kumar Agrawal are relevant :-
"No basic finding of fact recorded by the courts
below has been reversed much less any reason
assigned for taking a view to the contrary still the
finding on the question of readiness and willingness
to perform the contract which is a mixed question
of law and fact has been upset. Plea under Section
53A of the Transfer of Property Act which again
involves a mixed question of law and fact has been
allowed to be urged and upheld by the High Court
though there is no foundation for the same laid in
the pleadings of Thawar Das and though the plea
was not raised either before the Trial Court or
before the First Appellate Court even at the time of
hearing. Before us also at the time of hearing of the
appeals the learned counsel for the respondent
Thawar Das found it very difficult indeed to
demonstrate availability of material on record
whereon the findings as to readiness and
willingness for performance of his part of the
contract on the part of Thawar Das and as to his
possession being available to be protected under the
plea of part performance emanating from Section
53A of Transfer of Property Act could be sustained.
The suit for specific performance filed in the year
1969, i.e, nearly nine years after the expiry of four
years from 18.7.1956, the date of the agreement,
was hopelessly barred by delay and laches. We do
54 SA-574-2004 (J).doc
not propose to enter into the question of limitation
though the plea that the suit for specific
performance was barred by time was specifically
raised by Phool Chand before the Trial Court. It is
statutorily provided by Section 16(c) of the Specific
Relief Act, 1963 that to succeed in a suit for specific
performance of a contract the plaintiff shall aver
and prove that he has performed and has always
been ready and willing to perform the essential
terms of the contract which were to be performed
by him other than the terms the performance of
which has been prevented or waived by the
defendant. In the facts and circumstances of the
case raising of the plea by Thawar Das that on
19.9.1966 there was a fresh agreement between the
parties and he had paid Rs.2,000/- to Phool Chand
associated with positive finding arrived at by the
two courts below which finding has not been upset
by the High Court that the plea was false and was
sought to be substantiated by producing a false and
fabricated document makes the situation worse for
Thawar Das. A person who falsely alleges to have
paid Rs.2,000/- and also attempts at proving the
plea at the stage of the trial cannot be said to have
been ever ready and willing to pay Rs.7,000/-
which under the contract it was his obligation to
pay. The present one is not a case where a plea as
to payment was raised bonafide but abandoned at
or before the trial for inability to prove." (para-7)
65. In this case the defendants on their own have not taken any
steps for specific performance of the agreement. The two
documents relied upon by the defendants to show payment of
Rs.8380/- were produced belatedly. Even they were not referred
into the pleadings. No serious attempts were made to prove those
55 SA-574-2004 (J).doc
documents. So there is a reason to believe that defendants took a
false defence to suit their purpose. I find force in the arguments
of learned Advocate Shri Dangare. Defendants tried to misuse the
position by retaining possession, enjoying the fruits derived due to
use of the land on one hand and not taking steps in executing sale
deed by paying requisite stamp duty on the other hand.
66. Secondly allowing the Sanstha to run a school. For
the above discussion, substantial question of law No.1 has to be
answered in the negative. The First Appellate Court was not right
in extending the benefit of protection under Section 53-A of T.P.
Act to the defendants. So far as substantial question no.2 is
concerned, is to be answered in the affirmative. The First
Appellate Court was right in denying the benefit of declaration as
to nature of agreement as void and unenforceable. In fact, both
the Courts below have swayed away by the considerations and
have wrongly framed the issue. It ought to have been "whether
plaintiff succeeded in getting declaration that termination of the
agreement is legal or not". That relief can be granted to the
plaintiff. This Court has already held that defendants have allowed
the Sanstha to run a school in the building constructed on the suit
land without permission of the plaintiff and without their title
becoming perfect. The plaintiff was justified in terminating the
56 SA-574-2004 (J).doc
agreement. Hence for this reason, the judgement of the appellate
court is not sustainable and deserves to be setaside.
Damages and mesne profit
67. The Trial Court has not awarded any damages
specifically but ordered an inquiry for mesne profits under the
provisions of Order 20 Rule 12 of Code of Civil Procedure whereas
the First Appellate Court has set aside the judgment of the Trial
Court and hence the question of granting damages or ordering an
inquiry for mesne profits by the Appellate Court has not arisen.
Whereas as per Civil Application No.266/2009, direction to
defendants to deposit an amount of Rs.22,88,000/- is prayed. She
has relied upon a copy of rent agreement in between respondent
no.2 and Mahatma Bahuuddeshiya Shikshan Sanstha. The rent
payable for the building is Rs.13,000/- per month. The calculation
is given in paragraph no.10. The date of the rent agreement is
25/05/1995 and amount calculated at that rate is for 176 months.
This Court as per the order passed on 04/10/2013 was pleased to
direct to "hear this application at the time of final hearing of the
appeal". The prayer is opposed on behalf of the respondents on
various grounds including denial of such agreement.
68. It is very well true that if the decree for possession is
stayed, the decree holder is certainly entitled to get certain
57 SA-574-2004 (J).doc
amount from the judgment debtor as has been held in case of
Atmaram Properties (P) Ltd vs Federal Motors (P) Ltd. reported in
(2005)1 SCC 705. It was not brought to notice that such condition
was imposed by the First Appellate Court when decree was stayed
in an appeal filed by the defendants.
69. Admittedly, when second appeal is filed, there was no
decree for possession. At the same time, there is a dispute about
the agreement as referred above. As this Court has held that
defendants are not entitled to protection, certainly there
possession becomes illegal. It will be difficult for this Court to
quantify the amount at this stage considering the limited inquiry
contemplated. This could have been done during the pendency of
the present appeal. But certainly an inquiry as to mesne profits
can be ordered.
70. The plaintiff and defendants can adduce the evidence
in that inquiry. Pending that inquiry, this Court is of the opinion to
direct the defendants to deposit at least an amount of
Rs.5,00,000/- before the Trial Court. It can be adjusted once the
decision will be rendered in that mesne profits inquiry. The
amount is quantified on tentative assessment. The suit is filed in
58 SA-574-2004 (J).doc
the year 1994 (almost 26) years) and 26 years have elapsed
thereafter. The compensation at the rate of Rs.1500/- is
considered for a month and for 26 years it roughly comes to
Rs.5,00,000/- (Rs.1500/- per month of 12 months X 26 years). So
the respondents can be directed to deposit that amount before the
Trial Court within the period of two months from today. Hence the
following orders is passed.
ORDER
i) The appeal is allowed.
ii) The judgment dated 11 June 2004 passed by the
court of Ad-hoc District Judge, Nagpur in R.C.A.
No.1011/2000 is set aside.
iii) The suit filed by the plaintiff is decreed.
iv) It is declared that termination of the agreement
dated 30/12/1982 done vide suit notice dated
25/11/1993 is legal and proper.
v) The respondents-defendants are directed to hand
over vacant and peaceful possession of the suit
land by removing the construction carried out on
the suit plot bearing Plot No.6 from Khasra
No.27/1 admeasuring 465 sq. mtrs. situated at
Nagpur within the period of two months to the
appellant-plaintiff.
vi) The respondents-defendants are directed to
deposit an amount of Rs.5,00,000/- within 2
59 SA-574-2004 (J).doc
months from today before the Trial Court towards
tentative assessment of the mesne profits.
vii) This amount will be adjusted once the quantum
on mense profit is decided after inquiry.
viii) The Trial Court is directed to conduct an inquiry as
to mesne profit as contemplated under the
provisions of Order 20 Rule 12 of Code of Civil
Procedure.
ix) Trial Court to decide about disbursal of that
amount. In the meantime, the amount be
deposited as per Rules.
x) The executing Court is at liberty to adjust the
equities when the question of removal of
construction will arise.
xi) Civil Application (CAS) No.266 of 2010 is disposed
of in the light of above observations.
xii) Parties to bear their own costs.
71. In the light of the above, the Second Appeal is
disposed of.
Digitally signed
(S.M. MODAK, J.)
RAJESH by RAJESH R.S. Sahare
VASANT
VASANT CHITTEWAN
CHITTEWAN Date: 2022.01.21
16:46:39 +0530
