Bombay High Court
Keshav Madhurao Dhumal vs Dnyandeo Shamro Rajput And Another on 21 February, 2025
2025:BHC-AUG:4995
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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
SECOND APPEAL NO. 438 OF 1994
Keshav s/o Madhavrao Dhumal
(Deceased through LRs)
1A Shri Madhav s/o Keshavrao Dhumal
age 41 years, occ. Agri.
1B Shri Shivaji Keshavrao Dhuman
age 39 years, occ. Agril.
1C Shri Sahebrao s/o Keshavrao Dhumal
age 33 years, occ. Agri.
1D Shri Bhagwan s/o Keshavrao Dhumal
age 30 years, occ. Agri.
1E Sau. Bharatibai w/o Jyotiram Kadam
(Deceased through LRs)
1E-1 Jyotiram s/o Deorao Kadam
age 75 years, occ. Retired.
1E-2 Digambar s/o Jyotiram Kadam
age 45 years, occ. Service.
1E-3 Audumbar s/o Jyotiram Kadam
age 35 years, occ. Service
1E-4 Suvidya w/o Pawan Patil
age 40 years, occ. Retired.
1E-5 Manisha w/o Digambar Kadam
age 40 years, occ. Retired.
1E-6 Suchita w/o Audumbar Kadam
age 32 years, occ. Retired
All r/o "Sangram Smruti"
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Mantri nagar, Sootmill Road,
Latur.
1F Sau. Manisha w/o Vidyadhar Shinde
age 28 years, occ. Household
All r/o Shedol, Tq. Nilenga
Dist. Latur. .. Appellants
versus
1. Dnyandeo s/o Shamrao Rajput
(Deceased through LRs)
1A Balalji s/o Dnyandeo Rajput (Parihar)
age 57 years, occ. Agri.
1B Sham s/o Dnyandeo Rajput (Parihar)
age 45 years, occ. Agri
Both r/o Chalburga, Tq. Ausa
Dist. Latur.
1C Kushabai w/o Laxman Taur
age 62 years, occ. Household
r/o Banegaon, Tq. Ausa, Dist. Latur
2. Nagorao s/o Madhavrao Rajput
(Deceased through LRs)
2A Laxmibai w/o Nagorao Rajput (Parihar)
age 75 years, occ. Household.
2B Babruvahan s/o Nagorao Rajput (Parihar)
age 55 years, occ. Agril.
2C Pratap s/o Nagorao Rajput (Parihar)
age 45 years, occ. Agri
2D Kaka s/o Nagorao Rajput (Parihar)
age 43 years, occ. Agri
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2E Lahubai w/o Dattatraya Chavan
age 57 years, occ. Household
All r/o Chalburga, Tq. Ausa
Dist. Latur.
2F Sushila w/o Balaji Kachhave
age 47 years, occ. Household
r/o Lanji, Tq. Ahmedpur, Dist. Latur. .. Respondents
Mr. A. S. Shelke, Advocate for the appellants.
Mr. P. D. Suryawanshi, Advocate holding for Mr. S. T. Jadhav,
Advocate for the Respondents.
CORAM : R. M. JOSHI, J.
RESERVED ON : 17th FEBRUARY, 2025.
PRONOUNCED ON : 21st FEBRUARY, 2025.
JUDGMENT :
1. Original Defendant in Regular Civil Suit No. 271/1977
has preferred this appeal under Section 100 of Code of Civil
Procedure taking exception to the judgment and decree of specific
performance of contract passed therein and confirmation thereof by
First Appellate Court in Regular Civil Appeal No. 158/1985 by order
dated 10.11.1981.
2. Parties are referred to as Plaintiffs and Defendant for the
sake of convenience.
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3. It is the case of the Plaintiffs that Defendant is the owner
of the land bearing Survey No. 52 (New Survey No. 46) situated at
Wagholi, Tq. Ausa. It is further averred that there was an agreement
of sale executed between Plaintiffs and Defendant on 13.03.1964
whereby Defendant had agreed to sell land admeasuring 18 Acres 10
R from Survey No. 52 on payment of total consideration of
Rs. 6,000/-. It is their further case that at the time of execution of
agreement to sale, a sum of Rs. 5,500/- was paid to Defendant as
earnest money. The balance consideration was to be paid at the
time of execution of the sale-deed. Since at the relevant time, there
was restriction for sale of the suit land without prior sanction from
the competent authority under Hyderabad Tenancy and Agricultural
Lands Act (for short 'HTAL Act'), a condition was included in the
agreement to sale that the sale-deed would be executed after
obtaining permission from the competent authority. It is the case of
the Plaintiffs that in the year 1965-1966, a condition of permission
before effecting sale of the suit land was removed and hence the
Plaintiffs time and again approached the Defendant with a request of
accept balance consideration of Rs. 500/- and to execute sale-deed.
It is alleged by the Plaintiffs that Defendant did not accept the
balance consideration and failed to execute sale-deed. The suit came
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to be filed as Defendant finally refused to accept balance
consideration and infact issued notice dated 17.11.1977 to the
Plaintiffs revoking agreement to sale. In the plaint, it is claimed that
notice of termination of issued by Defendant is not valid.
4. Defendant, by filing written statement, though accepted
execution of agreement to sale however, it is denied that he has
received amount of Rs. 5,500/- as alleged by Plaintiffs by way of
earnest money. It is his specific case that he received only Rs.
2,500/- at the time of execution of the agreement. He further
contends that affidavit was obtained by Plaintiffs from Defendant for
submission to the competent authority for seeking permission for
sale of the suit land. It is denied by Defendant that Plaintiffs have
ever approached him with a request to accept balance consideration
and on the contrary it is alleged that Defendant was time and again
approached the Plaintiffs for payment of consideration, which they
failed to concede. It is claimed that the agreement to sale is
repudiated by notice dated 17.11.1977 and as such Plaintiffs are not
entitled for any relief of specific performance. Counter claim is filed
by the Defendant for seeking possession of the suit land.
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5. Learned Trial Court framed issues at Exhibit 28.
Plaintiffs and defendants led oral as well as documentary evidence.
Learned Trial Court accepted the contention of Plaintiffs and decreed
the suit by holding that the suit is filed within limitation so also the
notice of termination of agreement to sale issued by Defendant is not
valid. Being aggrieved by said judgment and decree, Defendant filed
appeal being Regular Civil Appeal No. 158/1985 unsuccessfully.
Hence, this appeal.
6. Learned counsel for Defendant submits that though
technically it can be said that the suit is filed within the period of
limitation, both the Courts below were under obligation to decide
whether there is delay and laches on the part of Plaintiffs in filing the
suit. It is his contention that mere filing of the suit within limitation
will not entitled the Plaintiffs to relief of specific performance of
contract. It is submitted that the agreement to sale is executed in
the year 1964 whereas the suit came to be filed in the year 1977.
Thus, according to him, when the suit is filed after 14 years of the
execution of agreement to sale, it cannot be said that the Plaintiffs
are entitled for decree of specific performance of contract. To support
his submission, he placed reliance on judgments of Hon'ble Supreme
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Court in case of Mrs. Saradmani Kandappan vs. Mrs. S. Rajlakshmi
and others, 2011 AIR SCW 4092 and P. Daivasigamani vs. S.
Sambandan, 2022 DGLS (SC) 1353. It is his next contention that
there is termination of agreement by the Defendant and unless the
said termination is challenged and set aside, Plaintiffs are not
entitled to maintain the suit for specific performance of contract. It
is his submission that there is no prayer in the plaint for setting side
termination of agreement and in absence thereof, the suit must fail
and it be dismissed. To support his submission, he placed reliance
on judgments in case of I. S. Sikandar (D) by LRs vs. K. Subramani,
2013 DGLS (SC) 696, Mohinder Kaur vs. Sant Paul Singh, 2019
DGLS (SC) 1291 and R. Kandasamy (D) and others vs. T. R. K.
Sarawathy and another, 2024 DGLS (SC) 1158.
7. Learned counsel for Plaintiffs, on the other hand,
supported the impugned judgments and decree with the contention
that there are concurrent findings recorded by both the Courts below
and it is not permissible for this Court while entertaining second
appeal to cause any interference therein. It is his submission that
the Plaintiff in the plaint has specifically taken exception to the
validity of the notice of termination issued by Defendant and the
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learned Trial Court had also framed issue to that effect. It is his
submission that on the basis of evidence on record, it is held that the
said notice of termination is not valid. Thus, according to him, once
it is held that termination of agreement to sale is not valid, there is
no impediment for the Plaintiffs to seek relief of specific performance
of contract. It is his further submission that the suit for specific
performance cannot be dismissed solely on the ground of delay and
laches and the Court is required to take into consideration the overall
facts and circumstances of the case. To support his submission, he
placed reliance on judgment of Hon'ble Supreme Court in case of
Mrs. A. Kanthamani vs. Mrs. Nasreen Ahmed, 2017(2) MLJ 632.
8. This appeal came to be admitted on 13.03.1995 on the
substantial question of law regarding discretion exercised by the
Courts below under Section 20 of Specific Relief Act.
9. There is no dispute about the fact that Defendant is the
owner of the suit property and that he agreed to sell the same to
Plaintiffs and accordingly agreement to sale came to be executed on
13.03.1964. The said transaction was settled at total consideration
of Rs. 6,000/-. It is the case of the Plaintiffs that amount of Rs.
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5,500/- was paid to the Defendant at the time of execution of
agreement to sale and earnest money receipt is also obtained from
him. Agreement to sale (Exhibit 34) and earnest money receipt
(Exhibit 35) indicate that out of total consideration of Rs. 6,000/-, a
sum of Rs. 5,500/- was paid to the Defendant by Plaintiffs. Though
Defendant has sought to contend that only sum of Rs. 2,500/- was
received at that time, however, evidence on record indicates that he
had received amount of Rs. 5,500/-. There is further corroborative
evidence in form of affidavit executed by Defendant to confirm said
fact. Thus, findings of fact are recorded by the Courts below to the
effect that there was execution of agreement to sale by Defendant and
out of total consideration of Rs. 6,000/- a sum of Rs. 5,500/- was
received by him from Plaintiffs.
10. There cannot be any two opinions with regard to the
settled position of law that as far as contract of sale of immovable
property is concerned, time is not essence of contract unless it is so
agreed by the parties in the agreement to sale or even by their
conduct it can be assumed so.
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11. In the instant case, admittedly, termination of agreement
to sale was effected by Defendant by notice dated 17.11.1977. Article
113 of the Limitation Act prescribes period of three years of limitation
after the vendor refuses to perform his part of the contract. Thus, it
cannot be said that the suit is filed beyond period of limitation. Now,
question arises as to whether Plaintiffs would be entitled to relief of
specific performance only for the reason that suit is within period of
limitation. At this stage, it would be relevant to consider the
judgment of Hon'ble Supreme Court in case of Mrs. Saradmani
(supra) whereby by relying upon the earlier decision of Hon'ble
Supreme Court it is held thus :-
19. The legal position is clear from the decision of a
Constitution Bench of this court in Chand Rani v. Kamal
Rani [1993 (1) SCC 519], wherein this court outlined the
principle thus:
"It is a well-accepted principle that in the case of sale
of immovable property, time is never regarded as the
essence of the contract. In fact, there is a presumption
against time being the essence of the contract. This
principle is not in any way different from that obtainable in
England. Under the law of equity which governs the rights
of the parties in the case of specific performance of contract
to sell real estate, law looks not at the letter but at the
substance of the agreement. It has to be ascertained
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whether under the terms of the contract the parties named
a specific time within which completion was to take place,
really and in substance it was intended that it should be
completed within a reasonable time. An intention to make
time the essence of the contract must be expressed in
unequivocal language."
Relying upon the earlier decisions of this court in
Gomathinayagam Pillai v. Pallaniswami Nadar [1967 (1)
SCR 227] and Govind Prasad Chaturvedi v. Hari Dutt
Shastri [1977 (2) SCC 539], this Court further held that
fixation of the period within which the contract has to be
performed does not make the stipulation as to time the
essence of the contract. Where the contract relates to sale of
immovable property, it will normally be presumed that the
time is not the essence of the contract.
Thereafter this court held that even if time is not the
essence of the contract, the Court may infer that it is to be
performed in a reasonable time : (i) from the express terms
of the contract; (ii) from the nature of the property and (iii)
from the surrounding circumstances as for example, the
object of making the contract. The intention to treat time as
the essence of the contract may however be evidenced by
circumstances which are sufficiently strong to displace the
normal presumption that time is not the essence in contract
for sale of land. In Chand Rani, clause (1) of the agreement
of sale required the balance consideration to be paid as
under:
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"Rs.98,000/- will be paid by the second party to the
first party within a period of ten days only and the balance
Rs.50,000 at the time of registration of the sale deed....".
This court held that time regarding payment of Rs.98,000
was the essence, on the following reasoning:
"The analysis of evidence would also point out that
the plaintiff was not willing to pay this amount unless
vacant delivery of possession of one room on the ground
floor was given. In cross-examination it was deposed that
since income-tax clearance certificate had not been
obtained the sum of Rs. 98,000 was not paid. Unless the
property was redeemed the payment would not be made. If
this was the attitude it is clear that the plaintiff was
insisting upon delivery of possession as a condition
precedent for making this payment. The income-tax
certificate was necessary only for completion of sale. We
are unable to see how these obligations on the part of the
defendant could be insisted upon for payment of Rs.
98,000. Therefore, we conclude that though as a general
proposition of law time is not the essence of the contract in
the case of a sale of immovable property yet the parties
intended to make time as the essence under Clause (1) of
the suit agreement."
The intention to make time stipulated for payment of
balance consideration will be considered to be essence of
the contract where such intention is evident from the
express terms or the circumstances necessitating the sale,
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set out in the agreement. If for example, the vendor
discloses in the agreement of sale, the reason for the sale
and the reason for stipulating that time prescribed for
payment to be the essence of the contract, that is, say,
need to repay a particular loan before a particular date, or
to meet an urgent time bound need (say medical or
educational expenses of a family member) time stipulated
for payment will be considered to be the essence. Even if
the urgent need for the money within the specified time is
not set out, if the words used clearly show an intention of
the parties to make time the essence of the contract, with
reference to payment, time will be held to be the essence of
the contract.
12. In case of P. Daivasingamani (supra) in paragraph No. 20,
it is held thus :-
"20. Time, it is stated, is not the essence of the contract in
the case of immovable properties, unless there are grounds
to hold to the contrary. This doctrine is applied, without
being unfarir and inequitable to the defendant/seller, as
the court should not ignore that a person sells the property
when he needs money, and, therefore, expects the money
in the stipulated or reasonable time, which would meet the
purpose of the sale. The purpose of sale can vary from the
need for liquid cash to be invested to earn interest, medical,
educational, child's marriage or purchasing another
property. To save capital gains, the seller has to purchae
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another immovable property, unless the proceeds are
exempt. There has been a steep rise in the prices of land
in the last quarter of the 20 th Centruy in India. With the
rise in property value, the value of money has fallen. At
times, delay in payment would defeat the
defendant/seller's purpose. Therefore, the offer of the
plaintiff/purchaser in writing and the time and occasion
when the offer to pay the balance amount to the
defendant/seller is an important factor which would
matter when the court examines the question of
discretion, that is, whether or not to grant a decree of
specific performance. While examining these aspects, the
quantum of money paid by the plaintiff/seller to the
defendant/purchaser may become a relevant fact that
merits due consideration. There is a distinction between
limitation and delay and laches. Limitation is a ground for
dismissing a suit even if the plaintiff is otherwise entitled
to specific performance, while delay operates to determine
the discretion and exercise under Section 20 of the
Specific Relief Act, even if the suit is not dismissed on
account of limitation. However, not one but several
aspects have to be considered when the court, in terms of
Section 20 of the Specific Relief Act, exercises discretion,
guided by judicial principles, sound and reasonable.
13. The position of law as settled by the Hon'ble Supreme
Court therefore clearly shows that in respect of sale of immovable
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property time is never regarded as essence of contract and infact
there is presumption against time being essence of contract.
Similarly, mere delay alone is not sufficient to refuse the decree of
specific performance and that all attending circumstances are
required to be taken into consideration by the Court for grant or
refusal thereof. In the instant case, perusal of agreement to sale
(Exhibit 34) does not indicate that time was essence of contract. It is
stated therein that the sale-deed would be executed after obtainment
of permission from the competent authority under the act.
Admittedly, in the year 1965-1966, the permission was no more
required for such transaction. It was within the knowledge of the
Plaintiffs that no such permission is required. In this backdrop, it is
the case of the Plaintiffs that time and again they were approaching
the Defendant with a request of accept balance consideration and
execute sale-deed and he used to give assurances in that regard. On
the other hand, it is the case of the Defendant that he was
approaching the Plaintiffs for seeking balance consideration and had
shown readiness to perform his part of the contract.
14. Undeniably, the period of 14 years has lapsed in between
agreement to sale and filing of the suit for specific performance of
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contract. There is no dispute about the fact that at the time of
agreement to sale, Defendant had received more than 90% of the
consideration amount from Plaintiffs. Plaintiffs were put into
possession of the suit property. Now there is word against word that
Plaintiffs claim that they approached the Defendant whereas
Defendant claims otherwise. The issue in question therefore required
to be decided from the other circumstances to accept the contention
of either side. The Plaintiffs have paid consideration of more than
90% and were put in possession of suit property. If Plaintiffs failed to
pay balance consideration, Defendant would not wait for 14 long
years to cancel the agreement. Pertinently, for the period of 14 years,
Defendant did not find it necessary to cancel the agreement to sale.
This conduct of the Defendants supports the case of Plaintiffs and
that there is reason to believe that the Plaintiffs requested him to
accept balance consideration and execute sale-deed and assurances
were given by him. Pertinently, immediately after actual refusal by
Defendant to execute sale-deed, suit came to be filed. Thus, the
attending circumstances as they appear from record so also from the
conduct of the parties, it can be said that time was never regarded as
essence of contract. This Court, therefore, finds no justification in
accepting contention of learned counsel for the Defendant that solely
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on the ground of delay in filing the suit, Plaintiffs are not entitled for
decree of specific performance.
15. The second contention raised by Defendant is failure on
the part of the Plaintiffs to challenge termination of agreement to
sale. Learned counsel for Defendant has relied upon judgments in
case of I.S. Sikandar (supra) and Mohinder Kaur (supra). In the said
judgment, the Hon'ble Supreme Court has not doubt held that the
Plaintiffs have to seek relief to declare that termination of agreement
to sale is bad in law. It is held that in absence of such prayer by
Plaintiffs in the original suit, the Trial Court cannot grant decree of
specific performance of contract.
16. Here in this case, Plaintiffs in the plaint have specifically
taken exception and challenged the validity of termination of contract
by raising specific plea that the notice is not binding upon him.
Defendant not only filed written statement but also filed counter
claim wherein it is averred that he has validly terminated agreement
to sale. Learned Trial Court, in view of these pleadings, has framed
additional issue in this regard. The additional issue framed on
17.08.1987 reads thus :-
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"Does Defendant prove cancellation of agreement as pleaded ?"
17. Now it is sought to be argued on behalf of the Defendant
that the Trial Court has wrongly placed burden on the Defendant to
prove validity of notice of termination whereas it was the duty and
responsibility of the Plaintiffs to challenge and prove the same. Issue
was framed by the Trial Court as recorded hereinabove and during
entire trial there was no objection raised by the Defendant to the said
issue and infact parties led evidence in this regard. In view of filing
of the counter claim and since Defendant's claim of relief of re-
possession of the property was dependent upon the said contention,
so also Plaintiffs claimed that the said notice does not bind them, the
Trial Court has rightly framed issue in this manner. Learned Trial
Court, after considering the evidence on record, has held that notice
of termination issued by the Defendant is not valid. Once said
finding of fact is recorded by the Trial Court, there remains no
impediment for the Plaintiffs to seek specific performance of contract.
There is material difference in the fact of the case cited supra and in
the instant case. Once it is held that the notice of termination of
agreement to sale issued by the Defendant is not valid, there remains
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no reason for denying the decree of specific performance of contract
to the Plaintiffs.
18. The Courts below have rightly appreciated the evidence
on record and findings of fact are recorded. This Court, in exercise of
jurisdiction under Section 100 of Code of Civil Procedure is not
inclined to cause interference in the concurrent findings recorded by
both Courts below. No perversity is seen in the said findings in order
to cause any interference therein. The Trial Court has rightly
exercised discretion under Section 20 of Specific Relief Act to grant
decree of specific performance of contract. Thus, substantial
question of law deserves to be answered accordingly. Appeal being
sans merit stands dismissed.
19. Pending application if any, does not survive and stands
disposed of.
( R. M. JOSHI)
Judge
dyb
