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Friday, September 20, 2019

suit for specific performance - unfair to enforce such a conditional agreement= when we consider the stipulations in the agreement, it appears that the plaintiffs/respondents were not having the money to purchase the property as such this stipulation was mentioned in the agreement that Rs.5000/- would be paid after one year of the execution of the sale deed. Such stipulations cannot be said to be for making out and out transaction of sale. Apart from that it would be unfair to enforce such a conditional agreement. The aforesaid stipulations also has the adverse effect on the readiness and willingness which is required to be proved by the plaintiff/respondents to purchase the property and due arrangement of money from the date of agreement till the decree is passed.In the circumstances, the decisions of the Courts below of directing specific performance of such an agreement cannot be said to be proper and in accordance with law. The Courts below have ignored and overlooked the nature of the agreement and the stipulations mentioned therein. It would be unfair, unjust, inequitable and not in accordance with law to grant specific performance of such an agreement.

IN THE SUPREME COURT OF INDIA
                   CIVIL APPELLATE JURISDICTION
CIVIL APPEAL  NO(S).  7533/2008
GAJANAN WAMAN CHIKHALE AND ORS.  APPELLANT(S)
                          
       VERSUS
RAMDAS BAKARAM THOMBRE AND ANR.                  RESPONDENT(S)
        O R D E R
1. Heard learned counsel for the parties.
2.  The   appellants   are   the   legal   representatives   of   the
defendant   and   the   respondents   are   the   plaintiffs.     The
original   defendant/Wamanrao,   died   during   the   pendency   of   the
appeal before the Courts below and the respondents herein were
brought   on   record   as   his   legal   heirs.   The
plaintiff(s)/respondents contracted to purchase the suit house
from   the   defendant/Wamanrao   for   a   consideration   of
Rs.25,000/-,   on   25.10.1976.     As   the   defendant//Wamanrao   was
indebted on account of loans of agricultural property etc. he
wanted   to   sell   the   suit   house   in   order   to   pay   off   the   debts.
In   pursuance   of   the   agreement   dated   25.10.1976,   the
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plaintiffs/respondents   paid   Rs.5,000/-   to   defendant/Wamanrao
as   earnest   money.     As   per   agreement   between   them,   the   amount
of   Rs.15,000/-   was   to   be   paid   at   the   time   of   execution   and
registration   of   the   sale   deed   before   the   Sub   Registrar.     It
was   further   agreed   between   them   that   defendant/Wamanrao   would
receive   the   balance   amount   of   Rs.5,000/-   within   a   year   after
the   date   of   execution   of   the   sale   deed.     It   was   agreed   to   be
executed on 31.03.1977.   It was also agreed between them that
in   case   any   of   the   party   to   the   contract   resiles   from   the
terms of the contract, then the party resiling will be liable
to pay Rs.10,000/- to the other side as penalty for breach of
contract.     Defendant/Wamanrao   had   agreed   to   deliver   the
possession   of   the   suit   house   before   the   sale   deed.     The
agreement   dated   25.10.1976   was   thus   executed   by
defendant/Wamanrao   in   the   presence   of   attesting   witnesses.
The   plaintiffs/respondents   immediately   thereafter   paid
Rs.5,000/-   to   him.     The   plaintiffs/respondents   gave   a   public
notice   in   the   newspaper,   in   order   to   ascertain   any   kind   of
encumbrance.     According   to   the   plaintiffs/respondents,   they
were   always   ready   and   willing   to   perform   their   part   of   the
contract   and   on   30.03.1977   they   contacted   the
defendant/Wamanrao.     The   defendant/Wamanrao   requested   them   to
grant   further   time   in   order   to   find   any   rented   house   or
accommodation for him and to deliver vacant possession of the
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suit   house.     It   was   then   agreed   between   them   that
defendant/Wamanrao   would   give   vacant   possession   of   the   suit
house and thereafter the sale deed of the suit house was to be
executed.      On  27.04.1977,  the  plaintiffs/respondents  went  to
the   house   of   the   defendant/Wamanrao   but   he   was   not   there   and
they   were   told   by   the   inmates   that   he   had   gone   out.     The
plaintiffs/respondents then served a notice on him on the same
days   i.e.   on   27.04.1977.   On   30.04.1977   defendant/Wamanrao
orally   informed   the   plaintiffs/respondents   that   he   was   not
ready   to   execute   the   sale   deed.   The   plaintiffs/respondents
then filed the suit for specific performance of the contract.
3.  The Trial Court decreed the suit for specific performance
of   the   contract.     Aggrieved   by   the   said   order,   the
defendant(s)/appellants   filed   appeal   before   the   Appellate
Court.     The   appellate   Court   affirmed   the   order   of   the   Trial
Court   and   dismissed   the   appeal.     Against   the   said   order,   the
defendant(s)/appellant(s)   filed   second   appeal   before   the   High
Court, which was also dismissed.   Hence the present appeal is
filed by the defendant/appellants.
4. After   hearing   learned   counsel   for   the   parties,   we   are   of
the opinion that the Courts below committed grave error of law
while decreeing the suit.  The form in which the agreement was
couched itself indicated that it was intended for securing the
loan.     The   parties   had   agreed   to   obtain   the   amount   of
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compensation, in case the sale deed was not to be executed at
Rs.10,000/-.   The agreement had been entered into for sale of
5000 sq. ft.  of land for a sum of Rs.25,000/-.  Rs.5,000/- was
paid by way of earnest money and Rs.15,000/- was to be paid at
the   time   of   execution   of   the   sale   deed   and   the   remaining   sum
of   Rs.5000/-   was   agreed   to   be   paid   after   one   year   of   the
execution   of   the   sale   deed.     The   reading   of   the   entire
agreement leaves no doubt that the plaintiffs have prima facie
obtained the loan and as such there was stipulation of payment
of   compensation   of   Rs.10,000/-.       Apart   from   that,   when   we
consider   the   stipulations   in   the   agreement,   it   appears   that
the   plaintiffs/respondents   were   not   having   the   money   to
purchase   the   property   as   such   this   stipulation   was   mentioned
in   the   agreement   that   Rs.5000/-   would   be   paid   after   one   year
of   the   execution   of   the   sale   deed.     Such   stipulations   cannot
be   said   to   be   for   making   out   and   out   transaction   of   sale.
Apart   from   that   it   would   be   unfair   to   enforce   such   a
conditional   agreement.     The   aforesaid   stipulations   also   has
the   adverse   effect   on   the   readiness   and   willingness   which   is
required to be proved by the plaintiff/respondents to purchase
the   property   and   due   arrangement   of   money   from   the   date   of
agreement till the decree is passed.
5. In   the   circumstances,   the   decisions   of   the   Courts   below
of  directing  specific  performance  of  such  an  agreement  cannot
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be   said   to   be   proper   and   in   accordance   with   law.     The   Courts
below have ignored and overlooked the nature of the agreement
and   the   stipulations   mentioned   therein.     It   would   be   unfair,
unjust,   inequitable   and   not   in   accordance   with   law   to   grant
specific performance of such an agreement.  
6. In   the   circumstances,   we   set   aside   the   judgment   and
decree   passed   by   the   Courts   below   decreeing   the   suit   of   the
plaintiffs and directing specific performance of the agreement
to   sell   the   property   in   question.     However,   at   the   same   time
when we come to the adjustment of the equities, it was fairly
offered   by   the   learned   counsel   appearing   on   behalf   of   the
appellants that since an amount of Rs.5000/- was paid way back
in the year   1976   and by now 43 years have passed, it would be
appropriate   to   refund   an   amount   of   Rs.1,00,000/-   instead   of
Rs.5,000/- in order to do complete justice between the parties
as a  sum of Rs.5000/- had been received by the appellants from
the   plaintiffs.   We   direct   them   to   make   the   payment   of
Rs.1,00,000/-   to   plaintiffs/respondents,   within   a   period   of
three months from today.
7. The   judgment   and   decree   passed   by   the   Courts   below   are
modified   accordingly.   The   specific   performance   of   the
agreement   is   declined.   The   appeal   is,   accordingly,   disposed
of.
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8. There shall be no order as to costs.
9. Pending application(s), if any, shall stand disposed of.
...........................J.
[ARUN MISHRA]
...........................J.
[NAVIN SINHA]
NEW DELHI;
MARCH 07, 2019.
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ITEM NO.105               COURT NO.4               SECTION IX
               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS
CIVIL APPEAL  NO(S).  7533/2008
GAJANAN WAMAN CHIKHALE AND ORS.              APPELLANT(S)
                                VERSUS
RAMDAS BAKARAM THOMBRE AND ANR.                  RESPONDENT(S)

Date : 07-03-2019 This appeal was called on for hearing today.
CORAM : 
         HON'BLE MR. JUSTICE ARUN MISHRA
         HON'BLE MR. JUSTICE NAVIN SINHA
For Appellant(s) Mr. Kishore Lambat,Adv.
                   For M/s. Lambat And Associates
                   
For Respondent(s) Mr. Satyajit A. Desai,Adv.
Ms. Priyanka Goel,Adv.
                   Ms. Anagha S. Desai, AOR
                    
          UPON hearing the counsel the Court made the following
                             O R D E R
The appeal is disposed of in terms of the signed order.
(NARENDRA PRASAD)                        (JAGDISH CHANDER)
  COURT MASTER                                COURT MASTER  
(Signed order is placed on the file)