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2008 DIGILAW 928 (BOM)

Damodar Namdeo Sase (deceased through L. Rs. ) v. Namdeo Baburao Sase

2008-07-03

V.R.KINGAONKAR

body2008
JUDGMENT :- This Second Appeal arises out of Judgment rendered by learned 2nd Extra Assistant Judge, Ahmednagar, in Regular Civil Appeal No.462/1980, reversing decree rendered by learned Joint Civil Judge (S.D.), for rescission of an agreement of sale dated 11.4.1972 in suit (RCS No.568/74). 2. Original plaintiff - Damodar preferred this appeal. His legal representatives have continued the same. Respondent Namdeo was original defendant in the suit before the trial Court. For sake of convenience. 1 shall refer to the parties by their first names. 3. Indisputably, Damodar owned 1/3rd share out of field bearing S.No.1654/2A situated at village Sasewadi. Admittedly, by an agreement of sale dated 11.4.1973 he agreed t() alienate the undivided 1/3rd share owned by him to Namdeo for consideration of Rs.8,000/- (Rupees eight thousand). The terms of agreement were reduced into writing and the agreement was registered. He received amount of Rs.4.000/- (Rupees four thousand) from Namdeo towards earnest amount. At the relevant time consolidation work under provisions of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, \vas being implemented in the village. Therefore, sale permission was required for the transfer of the undivided share in the suit land. The parties agreed that necessary sale permission would be obtained from the competent Consolidation Officer. It was also agreed that Namdeo shall pay balance consideration amount within eight (8) days after receipt of the sale permission and the transaction shall be completed. It is an admitted fact that Namdeo was inducted into actual possession of the suit land in pursuance to the terms of the agreement. 4. Briefly stated, case of Damodar (plaintiff) in the trial Court was that Namdeo was to obtain the sale permission as per terms of the agreement. He did not obtain such permission. So, Damudar issued a notice dated 11.9.1974 (Exh.83) and called upon him (Namdeo) to comply with the terms of the agreement. The notice drew blank. Neither reply was given by Namdeo nor he delivered back possession of the suit land. It was agreed between the parties that if default would be committed by Namdeo then the earnest amount of Rs.4.000/- could be forfeited by Damodar. The agreement was rescinded as per terms of the contract and hence, Damodar sought declaration that Namdco has left no concern and fights with the suit land as per agreement of sale and was liable to deliver back possession thereof. The agreement was rescinded as per terms of the contract and hence, Damodar sought declaration that Namdco has left no concern and fights with the suit land as per agreement of sale and was liable to deliver back possession thereof. He sought further declaration that the earnest amount of Rs.4.000/- (Rupees four thousand) stands forfeited in his favour. He claimed restoration of possession in view of the decision of the contract. 5. By filing written statement (Exh.14) Namdeo resisted the suit. He denied that he was required to obtain sale permission. He contended that Damodar agreed to obtain the sale permission from competent authority and accordingly had filed an application for such permission. He further contended that he did not commit breach of the contract. He asserted that he was ready and willing to perform his part of the contract by paying remaining consideration of Rs.4,000/- within eight (8) days from the date of the receipt of sale permission. He asserted further that field S.No.1654I2A is a composite land in which Rukminibai Vishwanath Sase. Anusayabai W/o Kisan and he have l/3rd share each. He was in possession of 1/3rd share or Anusayabai as a tenant. Said Anusayabai alienated her undivided 1/3rd share to Damodar on 2.8.1971 without delivery of Khas possession. He asserted that said l/3rd share purchased by Damodar from Anusayabai is the subject matter or agreement of sale dated 11.4.1973 which Damodar agreed to alienate in his favour. He asserted that he is entitled to seek protection of possession U/s.53A of the Transfer of Property Act. He contended that the contract could not be terminated by Damodar when there was no default on his part. Consequently, he urged for dismissal of the suit. 6. Though, a counter claim was preferred by Namdeo for specific performance of the agreement dated 11.4.1972, yet. it was given up during the trial. Namdeo gave purshis (Exh.87) for withdrawal of the claim for speCifiC performance of agreement of sale and hence, the counter claim became ineffective in other words, Namdeo waived his right to get the contract specifically enforced. 7. The parties went to trial over certain issues struck below Exh.23. The learned trial Judge held that though Namdeo was no under obligation to obtain permission for transfer of the suit property, yet, the contract could be rescinded in view of the subsequent developments. 7. The parties went to trial over certain issues struck below Exh.23. The learned trial Judge held that though Namdeo was no under obligation to obtain permission for transfer of the suit property, yet, the contract could be rescinded in view of the subsequent developments. The learned Judge of the trial Court held that the earnest amount of Rs.4.000/ - could not be forfeited and that Damodar was entitled to decree for cancellation of the agreement of sale on refund of the earnest amount. It was held that Damodar would be entitled to reccive mesne profits from the date of the suit till restoration of the possession as may be found due as a result of inquiry. The suit came to be decreed. Aggrieved thereby. Namdco. preferred an appeal which is allowed under the impugned judgment. The first appellate Court held that when breach of the contract could not be attributed to Namdeo. as on date of filing of the suit, the subsequent events could not have been considered by the trial Court. The first appellate Court held that unless it is proved that Namdeo committed default in performance of his part of the contract, as on date of the suit. the decree for cancellation of the agreement of sale and restoration of the suit land to Damodar (plaintiff) was not called for. The first appellate Court reversed the findings and ordered dismissal of the suit holding that protection U/ s.53-A of the Transfer of Property Act, mayor may not be available to Namdeo, yet, the contract could not be rescinded by Damodar. 8. The Second Appeal was admitted by this Court on substantial questions of Jaw enumerated under grounds Nos.4 to 7 shown in the appeal memo. I deem it proper to redraft the substantial questions of law instead of reproducing the grounds. The same are as follows: "1. Whether In the facts and circumstances of the present case, the first appellate Court committed patent error while interpreting terms of the document (Exh.89) dated 11.4.1972 and misinterpreted relevant provisions of the Specific Relief Act and also Section 53-A of the Transfer of Property Act. which caused erroneous conclusions and findings under the impugned judgment.? 2. Whether In the facts and circumstances of the present case, the first appellate Court committed patent error while interpreting terms of the document (Exh.89) dated 11.4.1972 and misinterpreted relevant provisions of the Specific Relief Act and also Section 53-A of the Transfer of Property Act. which caused erroneous conclusions and findings under the impugned judgment.? 2. Whether in the facts and circumstances of the present case, the first appellate Court committed patent error while holding that subsequent notice (Exh.55 and Exh.59) and conduct of the Respondent - Namdeo disentitled him from claiming any equity and. therefore. Damodar was entitled to relief of cancellation of the agreement of sale.? 3. Whether in the facts and circumstances of the present case, it was an error to exclude oral evidence in respect of implied terms of the contract and that the first appellate Court misconstrued pleadings of the pal11es and thereby reached wrong findings.'?" 9. Mr. R. L. Kute. learned advocate holding for Mr. R. N. Dhorde. advocate would submit that the first appellate Court failed 10 appreciate relevant conduct of the parties during and after the agreement. He would submit that when Namdeo was admittedly called by the Consolidation Officer in the proceedings for grant of sale permission then his failure to attend the said Office by Itself indicated breach of the contract on his part. He could submit further that the subsequent conduct of Namdeo could not be brushed aside because the legal embargo regarding requirement of sale permission was declamped and, therefore, without such permission the transfer could not he completed. yet, Namdeo did not give any response to the subsequent demand notices (Exh.55, Exh.56 and Exh.59). He would submit that the subsequent events, which occurred before fina1 decision of the suit could not be ignored while considering grant of equitable relief and that the first appellate Court took dogmatic view by restricting itself to the question of breach of the agreement as on the date of the suit. He would submit that the impugned Judgment is contrary to the principles of equity and hence. liable to be interfered with. As against this, Mr. A. B. Gatne, learned advocate supports the impugned judgment. He would submit that the impugned Judgment is contrary to the principles of equity and hence. liable to be interfered with. As against this, Mr. A. B. Gatne, learned advocate supports the impugned judgment. He contended that finding that Namdeo did not commit breach of the contract is the concurrent findings of facts as rendered by both the Courts and was not challenged by Damodar, before the first appellate Court by filing any cross appeal or cross-objection and, therefore. it is not open for interference. He would submit that rescission of the contract cannot be permitted when the breach could not be attributed to Namdeo. He argued that even otherwise. Namdeo is entitled to seek protection Uls.53-A of the Transfer of Property Act. even though his remedy of seek specific performance has become time barred. Mr. Gatne. strenuously argued that subsequent notices issued by Damodar in 1977 onwards could not be considered as non-compliance thereof did not give cause of action to deceased Damodar (plaintiff) for filing of the suit. Hence, he urged for dismissal of the appeal. 10. Before I proceed to embark upon scrutiny of evidence adduced by the parties. it is necessary to make it clear that when the parties entered into the agreement of sale dated 11.4.1972 (Exh.89), the scheme for consolidation of lands was being operated in the village. It appears that there was legal embargo on any transfer of holding in view of Section 27(B) of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947. The ban on transfer of land was during period of existence of the Consolidation Proceedings. There is no dispute about the fact that notice U/s.15-A of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947. was issued and, therefore. permission for transfer was necessary. That is why such a term is embodied in the agreement of sale (Exh.89). There is no dispute about the fact that subsequently. during pendency of the suit. the work of consolidation had been completed. Obviously. the requirement of sale permission was done away with. The parties could legally enforce the agreement of sale without any sale permission from the Consolidation Officer. Needless to say. Namdeo could have sought specific enforcement of the terms of the agreement of sale (Exh.89). 11. Damodar issued notice (Exh.83) dated 11.9.1974, notice (Exh.44/C) dated 19.10.1977 and notice (Exh.59/C) dated 6.12.1977. the requirement of sale permission was done away with. The parties could legally enforce the agreement of sale without any sale permission from the Consolidation Officer. Needless to say. Namdeo could have sought specific enforcement of the terms of the agreement of sale (Exh.89). 11. Damodar issued notice (Exh.83) dated 11.9.1974, notice (Exh.44/C) dated 19.10.1977 and notice (Exh.59/C) dated 6.12.1977. The exchanges of notices between the parties purport to show that when Damodar called upon Namdeo by notice dated 19.10.1977 to pay remaining consideration amount and get the transfer completed. In reply, it was informed by Namdeo that Within eight (8) days, the remaining amount could not be arranged, because festival of Diwali was In the offing. So, Namdeocalled upon Damodhar to fix a date after Diwali festival. Thereafter again Namdeo did not show bona fides to obtain the sale deed by making payment of remaining consideration. The subsequent events and the notice correspondence between the parties could not be Ignored by the learned Judge of the first appellate court. It cannot be over-emphasised that trial of a suit is not restricted to events which occurred before the suit or upto the date of the suit. The litigation remained alive and even subsequent events can be considered by the appellate Court inasmuch as the appeal IS continuation of the suit. In the present case, no particular time was fixed for completion of the transaction. The time was not essence of the contract. what was specifically agreed between the parties was that within eight (8) days of obtaining sale permission, the balance consideration amount was to be paid by Namdeo and the sale deed was to be executed by Darnodar. So, when Damodar repeatedly informed Namdeo that the sale permission was not required due to subsequent events, it was necessary for Namdeo to comply his part of the contract. 12. Coming to the oral evidence of the parties, it may be stated that there is oath against oath. P.W.1 Damodar, narrated as to how terms of the agreement of sale were settled between himself and the defendant Namdeo. He corroborated terms of the agreement dated 11.4.1972. His version reveals that he had purchased the suit land from Anusayabai Kisan Sase, who is the paternal aunt of the defendant. His version reveals that he was put in Khas possession of the suit land i.e. the 1/3rd share of Anusayabai. He corroborated terms of the agreement dated 11.4.1972. His version reveals that he had purchased the suit land from Anusayabai Kisan Sase, who is the paternal aunt of the defendant. His version reveals that he was put in Khas possession of the suit land i.e. the 1/3rd share of Anusayabai. His version reveals that defendant Namdeo urged to give him the suit land and. therefore. the agreement of sale was settled as per terms mutually agreed by them. His version reveals that he had filed an application for sale permission. He further deposed that he requested the defendant to sign a joint application which was not signed by the latter. He was called upon by the Sub-Divisional Officer. Ahmednagar, to comply with the requirements. He had complied with his part, yet, defendant Namdeo did not do anything to comply with the requirements of formalities needed to secure sale permission. His version shows that the defendant - Namdeo did not give any co-operation for obtaining of the sale permission. He referred to the subsequent notice correspondence. 13. Coming to the version of D.W. 1 Namdeo. it appears that he did not make serious efforts to perform his part of the agreement. He admits that the sate transaction was to be completed within eight (8) days after receipt of the sale permission. He admits. unequivocally, that statements of purchaser and seller were required to be recorded by the competent Consolidation Officer for the purpose of granting sale permission. He further categorically admits that he had received the notice from the Government office for the purpose of giving such statement in the proceedings for sale permission. He admits, unequivocally, that he did not go to the office of the Competent Officer to give statement in that matter. These admissions of D.W. Namdeo ought to have been appreciated in proper 'perspective by the first appellate Court, These admissions would blow up his contention that he was ready and willing to ensure grant of sale permission by the Competent Authority. It is manifest that due to his inaction and non-cooperation, the sale permission could not be obtained by deceased plaintiff Damodar. 14. Considering the admissions of D,W, Namdeo, it would be amply clear that the contract was frustrated due to his defaults. The deceased plaintiff (Damodar) was, therefore, entitled to rescind the contract U/s.27 of the Specific Relief Act. It is manifest that due to his inaction and non-cooperation, the sale permission could not be obtained by deceased plaintiff Damodar. 14. Considering the admissions of D,W, Namdeo, it would be amply clear that the contract was frustrated due to his defaults. The deceased plaintiff (Damodar) was, therefore, entitled to rescind the contract U/s.27 of the Specific Relief Act. The first appellate Court committed patent error while reaching conclusion that the defendant had no obligation at all to secure sale permission. In fact it was the mutual obligation of both the parties to ensure that sale permission was obtained within a reasonable time frame. The defendant could not have protracted specific performance of the agreement on his part without there being serious defaults of the plaintiff. The defendant did not give any notice to deceased plaintiff for showing his bona fides. On the contrary, he avoided to attend the office of the Competent Authority when his presence was required in order to obtain the sale permission. For, he was required to give appropriate justification for the transfer in support of the application seeking sale permission. The first appellate Court, patently erred while holding that the condition to obtain sale permission was unilateral obligation of the plaintiff - Damodar. Though oral obligations could not be impliedly read in the terms of the documents, yet, when the procedural requirement made it obligatory on defendant Namdeo to attend the office of the Competent Authority for recording of his statement, then his failure to comply was germane to frustration of the contract. 15. As stated before, the subsequent events could be taken into account. The requirement to obtain sale permission was done away with during pendency of the suit. For, the scheme of Consolidation of the lands was completed and, therefore, subsequent notices were given by the plaintiff in 1977, calling upon the defendant to pay the balance amount and get the sale deed executed, The defendant sought extension of time on the ground that Diwali festival was in the of Ting and after Diwali he would be able to make the arrangements for remaining consideration. This conduct of defendant Namdeo smacks of his unwillingness and undue protraction to perform his part of the agreement. The subsequent events also ought to have been considered by the first appellate Court, [n "Hungerford Investment Trust Limited (In voluntary Liquidation) Vs. This conduct of defendant Namdeo smacks of his unwillingness and undue protraction to perform his part of the agreement. The subsequent events also ought to have been considered by the first appellate Court, [n "Hungerford Investment Trust Limited (In voluntary Liquidation) Vs. Haridas Mundlira and others" (1972)3 Supreme Court Cases 684, the Apex Court "24. As the Court retained control over the matter despite the decree, it was open to the Court, when it was alleged that the party moved against has positively refused to complete the contract to entertain the application and order rescission of the decree if the allegation was proved. We, therefore, think that the application of the appellant was competent." 16. The specific relief in the matters like present one is discretionary. The Court is required to consider equities. The first appellate Court ought not to have overlooked the fact that defendant Namdeo was put in possession of the suit land in pursuance to the agreement of sale. He had paid only half of the consideration amount and was in full enjoyment of the suit land. The deceased plaintiff could not be shown exit without there being serious defaults committed by him. The equity was in favour of deceased plaintiff Damodar and, therefore, the learned Judge of the trial Court was right in granting decree for cancellation of the agreement of sale and restoration of the possession on condition that the earnest amount be refunded by the plaintiff. 17. Mr. Gatne, learned advocate would submit that the finding of the trial court that the plaintiff failed to prove breach of the terms and conditions of agreement of sale by the defendant was not challenged before the first appellate Court by filing any cross appeal and hence, it should be regarded as a concurrent finding which is unassailable. I do not agree. The Apex Court in "K, Muthuswami Gounder Vs. N. Palaniappa Gounder" (1998)7 Supreme Court Cases 327, observed that power of the appellate Court U/o 41, Rule 33 is discretionary in nature. It is held that no rigid rule III this behalf can be laid down and it would depend upon facts of each case. The non-filing of the cross-objection would not deter the appellate Court from considering merits in respect of such a finding. The cross appeal or cross-objection is a procedural formality. It is held that no rigid rule III this behalf can be laid down and it would depend upon facts of each case. The non-filing of the cross-objection would not deter the appellate Court from considering merits in respect of such a finding. The cross appeal or cross-objection is a procedural formality. The powers of the appellate Court are not circumscribed by the procedural requirement. The argument of learned advocate Mr. Gatne, will have to be therefore, rejected, 18. So far as question of protection U/s.53-A of the Transfer of Property Act, IS concerned, though no such point was framed by the first appellate Court. yet. it was discussed in the course of judgment. The first appellate Court observed: When the ground mentioned in the plaint for avoiding the contract does not help the Plaintiff, the usual position would be that even if the Defendant fails to have the protection of Section 53-A of the Transfer of Property Act on the strength of a finding that he was not ready and Willing to perform his part of the contract due to subsequent conduct during the suit depicted by him, still it must be mentioned that if the Plaintiff fails to prove the breach of agreement by the Defendant on the ground specifically alleged against the Defendant, the Plaintiff must fail and it would not be proper to invoke equitable principles to take the panics to the same position as before the agreement." 19. The pleadings of the parties must be construed liberally. For, in Mofussil area the pleadings arc generally loosely worded and general meaning is required to be gathered. The Apex Court in "Des Raj and others Vs, Bhagat Ram (deceased by LRs,) & others" (2007 AIR SCW 1560) observed: "19. It may be true that in his plaint, the plaintiff did not specifically plead ouster but muffosil pleadings, as is well known, must be construed liberally. Pleadings must be construed as a whole." 20. The defendant (Namdeo) could not claim any protection U/s.53-A of the Transfer of Property Act, when the suit for cancellation of the agreement of sale was fried within limitation. The agreement itself was liable to be cancelled on account of its frustration due to the lapses committed by the defendant. The plea of protection U/s.53-A was not available during the period when the contractual obligations subsisted. 21. For the reasons afore stated. The agreement itself was liable to be cancelled on account of its frustration due to the lapses committed by the defendant. The plea of protection U/s.53-A was not available during the period when the contractual obligations subsisted. 21. For the reasons afore stated. I am of the opinion that the plaintiffs' suit for declaration that the agreement of sale was rescinded and consequential relief of possession was properly decreed by the trial Court. The first appellate Court committed patent error while reversing the judgment and decree of the trial Court. The Second Appeal, therefore, succeeds. The Second Appeal is. therefore, allowed. The impugned judgment is set aside. The judgment and decree of the trial Court are decree in the stead of the impugned judgment. The Respondent/defendant to pay costs of the appeal to the appellants and to bear his own. Appeal allowed.