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Thursday, April 20, 2017

In the suit filed by Kanti (predecessor in interest of the appellant), his main reliefs were to declare agreement to sell as void and for possession-cum-mesne profit. Insofar as the first relief is concerned, this result stands achieved on the dismissal of the suit filed by Jitender for specific performance and in view of the findings of the courts below that Jitender failed to fulfill his obligations under the said agreement and could not establish that he was ready and willing to perform his part of the contract. The only question is as to whether the relief of possession could have been decreed. While setting aside the order of remand in Civil Suit No. 4104 of 1982 passed by the High Court, the High Court shall deal with the appeal of the respondents against the decree of the Civil Court in Civil Suit No. 4104 of 1982 on the limited question of possession which was sought by the appellant in the said suit.


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 3912 OF 2017

|PATEL KANTILAL PARSHOTTAMDAS (D) & ORS.    |                            |
|                                           |.....APPELLANT(S)           |
|VERSUS                                     |                            |
|                                           |                            |
|JITENDRAKUMAR NANJIBHAI MISTRY (D) THROUGH |                            |
|LRS & ORS.                                 |.....RESPONDENT(S)          |

                               J U D G M E N T


            First, the facts and events in chronological order,  as  reading
of these facts will facilitate proper understanding of the issues that  have
cropped up in the instant appeal of the dispute between the parties.
            One Jeevandas was the owner of a part of property  bearing  plot
Nos. 109 to 112, which was demarcated and known as  sub-plot  No.10  of  the
said plot.  This sub-plot measures 828 square yards and is situated  outside
Shanpur Darwaza, Mahendi Kuva Road, Ahmedabad.  Jeevandas  executed  a  sale
deed in  respect  of  this  plot  (hereinafter  referred  to  as  the  ‘suit
property’) in favour of one Kantibhai (for short ‘Kanti’) on 16.04.1959  for
99 years, of which yearly rent fixed was Rs.1860/-.  This  lease  deed  also
provided an option to the lessee to purchase the suit property.  The  lessee
(Kanti) executed an Agreement of Sell dated 15.07.1974  in  respect  of  the
suit  property  in  favour  of  one  Jitenderkumar  Nanjibhai   (for   short
‘Jitender’) at a total consideration of Rs.1,85,001/-.  The  purchaser  paid
earnest money of Rs.25,000/- at the time of execution of the said  Agreement
to Sell.  This agreement further  provided  that  the  sale  deed  would  be
executed within a period of five months from the date of  execution  of  the
agreement.  Sale deed was, however, not executed within the said period  and
by mutual agreement this period was extended  by  another  five  months.   A
further sum of Rs. 20,000/- was paid by Jitender to  Kanti.   However,  even
during the extended period, no sale deed could be executed.

2)    According to Jitender (purchaser), the period  for  execution  of  the
sale deed was further extended by two years,  though  Kanti  disputed  this.
Kanti  gave  notice  dated  06.05.1981  to  Jitender  for  cancellation   of
Agreement to Sell putting blame on Jitender in not performing  his  part  of
the contract.  Jitender replied to the said notice taking the position  that
the period for execution of sale deed had been further extended.

3)    As this led to dispute between the two, Kanti filed two suits  against
Jitender:  for cancellation of Agreement to  Sell  and  for  possession  and
mesne profits.  After sometime, Jitender also filed suit against  Kanti  for
specific performance of Agreement dated 15.07.1974.  All  these  suits  were
clubbed together.  The trial court decreed the suit filed  by  Kanti.   Suit
of Jitender for specific performance was dismissed barred by  limitation  as
well.  The trial  court  also  returned  the  finding  to  the  effect  that
Jitender could not establish that he was ready and willing  to  perform  the
contract.  He, in fact, did not even enter the witness  box  in  support  of
his case.  The trial court, therefore, accepted the case put up by Kanti  to
the effect that even when Kanti was in a position to handover  complete  and
vacant possession of the suit property, Jitender did not  perform  his  part
of the contract within stipulated period.

4)    Jitender filed three appeals against the aforesaid  judgment.   During
the pendency of these appeals, both  Kanti  and  Jitender  passed  away  and
their legal heirs were brought on record.  The High Court has decided  these
appeals by the common  judgment  dated  22.10.2013.    The  High  Court  has
maintained the decree of  dismissal  of  the  suit  filed  by  Jitender  for
specific performance.  Upholding the judgment of the trial court,  the  High
Court has held that Jitender is not entitled to the specific performance  of
the contract.  However, insofar as decree passed in favour of Kanti  in  the
suit filed by him is concerned, the  High  Court  has  set  aside  the  said
decree and remanded the case back  to  the  trial  court.   The  High  Court
discussed the nature of suit filed by Kanti and pointed out  that  his  suit
was for cancellation of agreement on the ground that there  was  failure  on
the part of Jitender to show readiness and willingness to execute  the  sale
deed, which plea was accepted by the trial court.  The High Court  has  held
that this is an erroneous approach inasmuch  as  under  Section  31  of  the
Specific Relief Act, 1963, the suit can be instituted  for  cancellation  of
written agreement when such written agreement is void  or  voidable.   Thus,
Kanti was  supposed  to  show  that  the  agreement  is  void  or  voidable.
Instead, plea taken was that the other  side  has  not  shown  readiness  or
willingness to execute the sale deed,  which  could  not  be  a  ground  for
cancellation of the agreement.

5)    The High Court pointed out that Kanti was  given  lease  of  the  said
property in question for a period of 99 years by Jeevandas  and,  therefore,
Kanti was only a lessee.  No doubt, the said lease deed gave right to  Kanti
to purchase the suit property from the original  owner.   However,  such  an
option to purchase the suit property given to Kanti  was  not  exercised  by
him during the period mentioned in the lease deed or during  the  life  time
of the original owner i.e. Jeevandas.  Thus, Agreement to Sell  executed  by
Kanti in favour of Jitender was in the nature of ‘contingent contract’  and,
therefore, Jitender could hardly acquire any right when  Kanti  himself  was
not the owner of the property.  It is further held that  Kanti  had  yet  to
become the owner.  As he had not acquired propriety  rights  over  the  suit
property, it was not possible for him to transfer such a right to  Jitender.
 Having held so, the matter has  been  remanded  back  under  the  following
      “… But the point is, what is nature of agreement – i.e.  agreement  to
sell, executed in the present case.  It is in nature of contingent  contract
and hence, voidable on that count.  The question that  what  is  the  nature
and strength of agreement to sell –  can  be  answered  satisfactorily  only
when plea based on  the  point  that  contract  is  in  nature  of  voidable
contract is raised and the same is defended  by  the  other  side.   Broadly
stated, status of ‘seller’ at the time of execution  of  agreement  to  sell
being status of ‘lessee’ only and acquiring of  proprietary  rights  by  the
purchaser depending on ‘owner’ executing the deed in  favour  of  purchaser,
places the agreement to sell in category of  ‘contingent  contract’.   Prima
facie, the agreement falls in realm of ‘contingent contract’.  Upon  hearing
the learned advocate for  the  parties  and  in  the  circumstances  of  the
present case, it appears to be just and proper to allow the  present  appeal
and remand Civil Suit No. 4104 of 1982 for its disposal in  accordance  with
law.  It would be open to the parties to  amend  the  pleadings  accordingly
and to lead the evidence – if the parties are so advised –  in  addition  to
the evidence already on record.  It is clarified that it would also be  open
for the parties and the trial court to refer to and rely upon  the  evidence
already on record.  Since the suit is very old, it is  expected  that  trial
court would dispose of the suit as expeditiously as possible.”

6)    It is this outcome which is unpalatable to the legal heirs  of  Kanti,
who have filed the special leave petition  which  has  been  converted  into
appeal after grant of leave therein.

7)    Before adverting to the arguments  of  the  learned  counsel  for  the
parties, we deem it appropriate to record that  insofar  as  suit  filed  by
Jitender for specific performance of the contract is concerned,  a  plea  of
part performance of the contract was  taken  in  the  said  suit  which  was
predicated on the averment that on an execution of the  Agreement  to  Sell,
possession of the suit property was  handed  over  to  the  purchaser.   The
trial court held that it  was  not  so  as  the  possession  was  not  given
consequent  upon  entering  upon  the  said  agreement  but  on  account  of
relationship between the parties.  The High Court  termed  this  finding  as
erroneous and held that parting with possession of  the  suit  property  was
pursuant to  the  Agreement  to  Sell  entered  into  between  the  parties.
However, appeal of Jitender against the judgment  of  the  trial  court  for
specific performance has been dismissed on the ground that even  if  such  a
possession was taken, it did not absolve the purchaser  for  his  obligation
to comply with the requirement of showing his readiness and  willingness  to
execute the sale deed and that Section 53A of the Transfer of Property  Act,
1882 could be used as a shield and not as a  sword.   The  High  Court  also
affirmed the finding of the trial court that the suit filed by Jitender,  in
any case, was barred by limitation and, therefore, Jitender could not  avoid
the inevitable result, merely by relying  on  Section  53A  of  Transfer  of
Property Act, 1882.
      The result is that suit for specific  performance  filed  by  Jitender
stands dismissed and the judgment of the High Court  has  attained  finality
as there is no appeal by the respondents (legal heirs of Jitender).

8)    In this hue, we now revert back to the decision of the High  Court  in
respect of suit filed by Kanti (predecessor of appellant) which is  remanded
back to the trial court as noted above.  We are  of  the  opinion  that  the
aforesaid course of action adopted by the High Court in  respect  of  relief
claimed by Kanti in a suit is not appropriate.  In the suit  filed  by  him,
Kanti had pleaded that  after  the  execution  of  the  agreement,  Jitender
failed to perform his  obligation  contained  therein  as  he  defaulted  in
making the payment of balance consideration within the time stipulated.   On
that basis, the prayer made in the suit  was  that  the  amount  of  earnest
money under the agreement stood forfeited as the agreement had  become  non-
effective, null and  void  and  consequently  possession  of  part  of  suit
property held by Jitender was illegal which should be  handed  over  to  the
plaintiff.  Mesne profit was also claimed.  Second suit filed by  Kanti  was
specifically for mesne profit and for possession.  No case  was  set  up  by
Kanti that agreement was void because of the  reason  that  he  was  only  a
lessee in the suit property which was given to him  by  the  original  owner
Jeevandas for a period of 99 years and  as  he  had  not  become  the  owner
thereof,  the  agreement  was  in  the  nature  of  ‘contingent   contract’.
Obviously, no evidence was led by any of the parties to this effect  in  the
absence of pleadings.  Therefore, High Court could not, of its own,  set  up
a new case which was not a case pleaded by any of the parties.  The  liberty
to amend the pleadings which is given is  in  the  nature  of  allowing  the
appellant to come out with altogether a new case not even pleaded or  argued
before the High Court.  Such an amendment could not have been  allowed  even
if an application under Order VI Rule 17 CPC  was  filed  for  amending  the
plaint.  In fact, the appellant  had  not  even  sought  this  remedy.   The
decree passed by the High Court on this ground and direction  to  the  trial
court to dispose  of  the  case  afresh  after  allowing  amendment  in  the
pleadings and leading further evidence on amended pleadings  is,  therefore,
clearly erroneous in law.  We, thus, set aside this direction.

9)     In  the  suit  filed  by  Kanti  (predecessor  in  interest  of   the
appellant), his main reliefs were to declare agreement to sell as  void  and
for possession-cum-mesne profit.  Insofar as the first relief is  concerned,
this result stands achieved on the dismissal of the suit filed  by  Jitender
for specific performance and in view of the findings  of  the  courts  below
that Jitender failed to fulfill his obligations  under  the  said  agreement
and could not establish that he was ready and willing to  perform  his  part
of the contract.   The  only  question  is  as  to  whether  the  relief  of
possession could have been decreed.  The trial court had  decreed  the  suit
to this effect.  Against this decree,  respondents  had  filed  the  appeal.
The High Court has not dealt with that aspect and instead remitted the  case
back for fresh consideration, which direction has been set aside by us.
            Though, this issue was argued before us, however, we are of  the
opinion that it may not be proper for this Court  to  consider  this  aspect
inasmuch as this issue had arisen in the appeal of the  respondents  in  the
High Court  and  respondents  are  not  in  appeal  before  us.   It  would,
therefore, be more appropriate if the aforesaid  issue  is  decided  by  the
High Court.

10)   The appeal which was filed  by  the  respondents  against  the  decree
passed in Civil Suit  No.  4104  of  1982  is  accordingly  allowed.   While
setting aside the order of remand in Civil Suit No. 4104 of 1982  passed  by
the  High  Court,  the  High  Court  shall  deal  with  the  appeal  of  the
respondents against the decree of the Civil Court in Civil Suit No. 4104  of
1982 on  the  limited  question  of  possession  which  was  sought  by  the
appellant in the said suit.
            No costs.
                                                               (A.K.  SIKRI)

                                                             (ASHOK BHUSHAN)

APRIL 13, 2017.

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