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2010 DIGILAW 54 (BOM)

Hemant M. Deshmukh v. Diwakar Dadaji Michkin

2010-01-12

F.M.REIS

body2010
JUDGMENT:- This is an appeal preferred by the appellant challenging the judgment and decree dated 27/10/1994 passed by the learned 2nd Joint Civil Judge, Senior Division, Nagpur in Special Civil Suit No.486 of 1991 whereby the suit filed by the appellant for specific performance of the agreement came to be dismissed. 2. The brief facts of the case are as follows: The appellants have filed the suit on the ground that by an agreement of sale dated 21/ 12/1990 executed between the appellants and the respondent, a property admeasuring 6 1/2 acres of Mouza Borkhedi, Kh. No.I80, P. H. No.74, Taluka & District Nagpur was agreed to be sold to the appellants. It is further their case that pursuant to the said agreement the appellants paid to the respondent a sum of Rs.50.000/- towards earnest money and thereafter paid a sum of Rs.75.000/- in terms of the conditions stipulated in the said agreement. It is further their case that the appellants had performed their part of the agreement by paying a sum of Rs.1.25,000/• towards the earnest money. The total amount payable by the appellants to the respondent was to the tune of Rs.5,85,000/- towards the purchase of the said area of 6 1/2 acres of land. It is further the contention of the appellants that as per the terms and conditions incorporated in the agreement, the deed of sale was to be executed within a period of six months from the date of the agreement executed on 20/61 1991 provided that both the parties perform their respective parts of the contract. It is further their contention that as per Clause-7 of the agreement, the respondent was suppose to assist the appellants in all possible manner so as to get the permission from the Sub-Divisional Officer which is a mandatory requirement before the land can be transferred. Despite of seeking such assistance to obtain the requisite permission from the Sub-Divisional Officer, the respondent did not assist the appellants in obtaining such permission. It is further their contention that as per Clause-8 of the agreement, the respondent was suppose to assist the appellants in obtaining No Objection Certificate from the Government department and in spite of repeated requests, no such No Objection Certificate was obtained by the respondent. It is further their contention that as per Clause-8 of the agreement, the respondent was suppose to assist the appellants in obtaining No Objection Certificate from the Government department and in spite of repeated requests, no such No Objection Certificate was obtained by the respondent. It was also the case of the appellants that as per Clause-9 of the said agreement, the area agreed to be purchased was 6 1/2 acres and that the said area had to be confirmed by appointing a Government Surveyor to perform the function of measuring the actual area of the said property. But, however, the appellants had sought assistance of an Architect, who certified that the area was not 6 1/2 acres but the same admeasured only 5 1/2 acres. It is further the case of the appellants that by letter dated 18/6/1991, the respondent communicated to the appellant to remain present before the Sub Registrar, Nagpur on 20/6/1991 for the purpose of executing the sale deed. But, however, the respondent on 22/6/1991 addressed a notice to the appellant to the effect that Clauses 7. 8 and 9 of the agreement had not been complied with and as such the question of executing the sale deed would not arise at all. It is further contended by the appellants that the respondent is in the habit of executing such type of agreement and thereafter making default in complying with the terms of the agreement. In view of the facts stated herein above, the appellants filed the suit for declaration that agreement dated 21/12/1990 is still subsisting and that the respondent had no right to terminate the said agreement by virtue of the said letter dated 18/6/1991. It was further contended by the appellants that though time was essence of the contract, in view of the default committed by the respondent, the respondent had no right to forfeit the earnest money amounting to Rs.1,25,000/- and accordingly the above suit was filed seeking specific performance of the said agreement, order to pay damages to the tune of Rs.5,85.000/- and alternatively for refund of earnest money of Rs.1,25 ,000/-together with interest @ 6% per annum and for other ancillary reliefs. 3. The respondent filed his written statement and disputed the contentions raised by the appellants. 3. The respondent filed his written statement and disputed the contentions raised by the appellants. It was the case of the respondent that the conditions stipulated in the said agreement were not complied with by the appellants and as time was the essence of the contract, he called upon the appellants to execute the sale deed which the appellants had defaulted. The respondent did not dispute that the appellants had paid a sum of Rs.l,25,000/-towards the earnest money. It was further the case of the respondent that it was specifically agreed that a sum of Rs.1,00.000/- would be paid within the time specified in the agreement which the appellants had defaulted by paying only a sum of Rs.75,000/-. The contention of the respondent that he had defaulted in complying with the stipulation in the agreement was expressly denied. It was further the contention of the respondent that the obligation to perform the said conditions were upon the appellants. It was further the contention of the respondent that the appellants were non agriculturists and it was incumbent upon them to take permission from the Collector, Nagpur to purchase an agricultural land as per the provisions of Section 89 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. But, until 20/6/1991, the appellants did not move the said Authority for grant of such permission. It is further the case of the respondent that the appellants never approached the Sub-Divisional Officer for getting permission for the land nor the appellants sought any assistance from the respondent for obtaining such permission. Despite of reminders to obtain such permission, the appellants never moved the Authorities for obtaining said permission. With regard to the contention that No objection Certificate was to be obtained from the Income Tax Department, it is the case of the respondent that no such No Objection Certificate was required. It is further the case of the respondent that though the respondent was always ready and wiling to perform his part of the contract, the defaults in complying with the essential terms of agreement were squarely upon the appellants. It was further the case of the respondent that the land was to be measured at the instance of the appellants which the appellants unilaterally and arbitrarily get measured by the Architect. It was further the case of the respondent that the land was to be measured at the instance of the appellants which the appellants unilaterally and arbitrarily get measured by the Architect. It is further the contention of the respondent that despite of the notice served on the appellants dated 18/6/1991, the appellants refused to perform their part of the contract by falsely contending that Clauses 7, 8 and 9 had not been complied with by the respondent. It was further the contention of the respondent that the appellants had committed breach of the agreement and the appellants had committed the breaches of the terms of the agreement and were not prepared to get the sale deed executed by raising false contentions. The respondent further stated that the appellants are not entitled for any relief on account of default committed by the appellants and as such prayed that the suit deserves to be dismissed. 4. After the issues were framed and the evidence was adduced, the learned Civil Judge, Sr. Dn., Nagpur by the impugned judgment and decree dated 27/01/1994 dismissed the suit filed by the appellants. Being aggrieved by the said judgment and decree, the appellants have preferred the present appeal. 5. The learned Counsel for the appellants submitted before me that the learned Judge has committed an error in refusing to grant the specific performance as according to him the appellants were always ready and willing to perform their part of the contract. It was further submitted that the default was on the part of the respondent as the respondent did not take any steps for the purpose of obtaining permission from the revenue Authorities for permission to execute the sale deed. He further submitted that it was incumbent upon the respondent to get the area of the property measured by the Government Surveyor and the question of the appellants indulging in such exercise does not arise at all as the respondent was in possession of the land. It was further submitted that there was no default in the payment of earnest money as the respondent had accepted a sum of Rs.75,000/- towards part of the earnest money and as such they were estopped from now contending that there was default in the payment. It was further submitted that there was no default in the payment of earnest money as the respondent had accepted a sum of Rs.75,000/- towards part of the earnest money and as such they were estopped from now contending that there was default in the payment. The learned Counsel submitted that the respondent was not entitled to terminate the agreement by notice served upon the appellants as the default in complying with the terms of the contract was on the part of the respondent. The learned Counsel further submitted that in any event, the question of forfeiting earnest money of Rs.1,25,000/- does not arise at all, as admittedly, the respondent had failed to show that on account of alleged default on the part of the appellant, any loss had occasioned to the respondent. It is further submitted that without prejudice to the above contention, the appellants are entitled for refund of the earnest money of Rs.1,25,000/- together with interest thereon. 6. On the other hand, the learned Counsel appearing for the respondent submitted that the appellants were not ready and wiling to perform their part of the contract. It is further his contention that the law is well settled that for the purpose of obtaining specific performance of a contract, the party should be continuously ready and willing to perform their part of the contract and the present appellants, after effecting the initial payment, failed to discharge the obligation stipulated in the said agreement to the effect that the permissions from the Collector were not obtained and the measurement of the area was not taken as stipulated in the said agreement apart from the fact that there was default in payment of installment of Rs.l,00,000/-. It is further his contention that the appellants falsely contended that the area of the property was 5 1/2 acres when on the contrary the survey record conclusively establish that in fact the area of the property was 6 1/2 acres. The learned Counsel further submitted that in any event the respondent was prepared to refund the earnest money of Rs.l,25,000/- to the appellants with interest @ 6% per annum from the date of the filing of the suit. 7. The learned Counsel further submitted that in any event the respondent was prepared to refund the earnest money of Rs.l,25,000/- to the appellants with interest @ 6% per annum from the date of the filing of the suit. 7. After hearing the Counsel for the respective parties and on perusal of the record, I find that the following points for termination arise in the present appeal.: (1) Whether the appellants have proved that they were ready and willing to perform their part of contract as stipulated in agreement dated 21/12/1990? (2) Whether the appellants are, in an event, entitled for refund of Rs.l,25,000/- paid to the respondent as earnest money? 8. Dealing with the first point for determination, I find that on perusal of the record, that the terms and conditions stipulated in the agreement which is at exh.20 stipulate are as under: (1) The plaintiffs have to purchase the field of the defendant at the rate of Rs. 90,000/ - per acre and an amount of consideration be given to the defendant after measurement of the suit field. (2) Remaining consideration of the suit field was to be paid to the defendant within six months from the date of agreement of sale of the suit field. (3) The plaintiffs have to pay Rs.1,00,000/(One lac) after one to one and half month to the defendant from the date of agreement of sale. (4) If the plaintiffs fail to get execute the sale deed within stipulated period, then defendant is at liberty to sale the suit land to anybody. (5) If the plaintiffs fail to get execute the sale deed within stipulated date, the defendant is not bound to return an earnest money along with interest to the plaintiffs. (6) If any encumbrance of any kind is on the suit land, the defendant is responsible to satisfy the plaintiffs prior to the execution of sale deed of the suit land all responsibility of any kind in that connection will be on defendant. (7) If defendant avoided to execute a sale deed in favour of the plaintiffs, within stipulated period then plaintiffs are at liberty to get execute the sale deed through due process of law. (8) The defendant has to co-operate the plaintiffs in all respects. (7) If defendant avoided to execute a sale deed in favour of the plaintiffs, within stipulated period then plaintiffs are at liberty to get execute the sale deed through due process of law. (8) The defendant has to co-operate the plaintiffs in all respects. (9) Plaintiffs have to apply to S.D.O. for getting the permission for purchasing the suit land under Section 89 of Bombay Tenancy and Agricultural Lands (V.R.) Act, 1958 and the defendant has to cooperate them in that connection. (10) Plaintiffs have to obtain No Objection Certificate from concern departments if require, and the defendant has to cooperate them in that connection. (11) The suit field has to be measure by Government measure prior to the execution of the sale deed of the suit land. (12) The plaintiffs have to bear all the expenditure in connection, of the execution of the suit land. 9. Clause (3) of the said agreement stipulates that the appellants would pay a sum of Rs.1 ,00,000/- within one to one and half month from the date of said agreement of sale. Admittedly, the appellants have defaulted in the payment of the said amount as they paid only a sum of Rs.75,000/- and as such there was a default committed by the appellants in complying with Clause-3 of the said agreement. Clause-8 of the said agreement stipulates that the appellants had to apply to the Sub-Divisional Officer for getting permission to purchase the suit land under Section 89 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958 and the defendant had to cooperate with them to that effect. Clause-9 of the said agreement stipulates that the appellants have to obtain the No Objection Certificate from the concerned department, if required, and the respondent had to cooperate with them in that connection. Clause-l0 stipulates that the suit plot had to be measured by the Government Surveyor prior to the execution of the sale deed. It is an admitted fact that for the purpose of executing the sale deed, permission from the Sub-Divisional Officer had to be obtained to transfer the land as the same was an agricultural land in terms of the provisions of Section 89 of the Bombay Tenancy and Agricultural Lands (V. R.) Act, 1958. It is an admitted fact that for the purpose of executing the sale deed, permission from the Sub-Divisional Officer had to be obtained to transfer the land as the same was an agricultural land in terms of the provisions of Section 89 of the Bombay Tenancy and Agricultural Lands (V. R.) Act, 1958. The responsibility of obtaining such permission was admittedly on the part of the appellants and the record discloses that the appellants failed to take any steps towards such direction. The allegations of the appellants to the effect that they had asked the respondent to take necessary steps in that direction cannot be accepted. The terms of the contract clearly disclose that burden for obtaining such permission was on the appellants. In fact, the appellants being non agriculturist, permission had to be obtained at their instance. As no steps were taken in such direction from the date of signing of the agreement up to the period of six months within which the sale deed had to be executed, the conduct of the appellants discloses that the appellants were not ready and willing to perform their part of the contract. PW -1 Dr. Hemant Deshmukh in the cross-examination admitted that no notice was issued to the defendant for not complying with clause in respect of obtaining the permission from the Sub-Divisional Officer. Apart from that, with regard to measurement of area of the said land, on perusal of the record I find that the appellants have miserably failed to show that any steps were taken to measure the area of the suit land. The land might be in possession of the respondent, there was no impediment for the appellants to take necessary assistance of the Government Surveyor for the purpose of measuring the area of the said land. It is not the case of the appellants that they had at any point of time sought any assistance from the respondent for the purpose of measuring the said land. PW -1 has also admitted that he had not given any application to the Tahsildar for measurement of the suit land. This also discloses that the appellants were not ready and willing to perform their part of contract. 10. PW -1 has also admitted that he had not given any application to the Tahsildar for measurement of the suit land. This also discloses that the appellants were not ready and willing to perform their part of contract. 10. Coupled with the default committed by the appellants as enumerated herein above, I find that when the respondent had served notice on the appellants dated 18/6/1991 to execute the sale deed within the time as stipulated in the agreement for sale, the appellants instead of complying with such request, raised a false and frivolous contention that the area of the land was 5 1/2 acres. The survey record clearly disclose that the area of the said land is 6 1/2 acres. This fact has also been admitted by PW -1 in the cross-examination. The learned Judge, while passing the impugned judgment, has on the basis of survey record come to the conclusion that the area of the said land was 6 1/2 acres and the contention of the appellants to the effect that there was deficit in the area of the land cannot be accepted. The agreement contemplates that measurement of the area had to be done, by the Government Surveyor. On the contrary, the appellants had unilaterally sought services of the Architecture and obtained a certificate to the fact that the area of the land was 5 1/2 acres. Admittedly, such measurement was carried out by the appellants in absence of the respondent. The person who carried the said measurements at the instance of the Architect was PW-2 Sanjay, who deposed that he carried out the measurements as per the boundaries shown by the appellants and he was not qualified to take measurements of agricultural lands by the Government. This shows that the appellant could have very well carried such measurement if they so desire in terms of the said agreement by obtaining the services of the Government Surveyor. The possession of the land being with the respondent was not at all any impediment for the appellants to take necessary steps to engage the Government Surveyor for the purpose of measuring the area of the said land. The conduct of the appellants to that effect shows that the appellants were trying to create only executes to delay the execution of sale deed in terms of the said agreement. The conduct of the appellants to that effect shows that the appellants were trying to create only executes to delay the execution of sale deed in terms of the said agreement. There is no correspondence adduced by the appellants calling upon the respondent to comply with the said terms and conditions from the date of agreement up to the period of six months as contemplated in the said agreement. Inaction on the part of the appellants in not complying with the terms and conditions stipulated in the said agreement disentitle the appellants for any specific performance of the contract. 11. On perusal of the impugned judgment, the learned Judge has come to the conclusion that default in complying with the terms of the contract was on the part of the appellants. This finding is based on the evidence on record. I have perused the deposition of the witnesses and I find that the learned Trial Judge has rightly appreciated the evidence on record and come to the conclusion that the appellants were not ready and willing to comply with their terms of the contract and consequently the appellants were not entitled to the specific performance of the contract. Granting of specific performance is a discretionary relief and such discretion is to be exercised only if a party acts fairly. In the present case, the conduct of the appellants discloses that they were delaying the execution of the sale deed by taking flimsy excuses. This conduct of the appellants itself disentitle the appellants for any specific performance of the said contract. In 2002 (9) SCC 582 in the case of Pushparani S. Sundaram & others Vs. Pauline Manomani James (Deceased) & others, the Apex Court has held that the plaintiff must aver and prove that either he has actually performed or that he was always ready and willing to perform his essential obligations under the contract. Merely filing a suit for specific performance and taking such plea will not be sufficient compliance of Section 16 (c) of the Specific Relief Act, 1963. Merely filing a suit for specific performance and taking such plea will not be sufficient compliance of Section 16 (c) of the Specific Relief Act, 1963. When the plaintiff had not sent any communication or notice regarding his readiness and willingness, had paid an insufficient amount as advance, had not obtained permission from the ceiling authority, had not take any step in respect of the valuation of the structures on the land as required in the agreement for sale, did not lead evidence regarding his readiness, the High Court rightly upheld the dismissal of the suit of the plaintiff. Considering the said judgment of the Apex Court, the records reveal that the appellants were not ready and willing to perform their part of the agreement in view of the breaches committed by them as enumerated herein above. In view of the above, the first point for determination is answered accordingly. 12. Dealing with the second point for determination. admittedly, there is no evidence on record to show that the respondent has suffered any loss or damage on account of default committed by the appellants in not performing their part of the contract. Considering the submissions of the learned Counsel for the respondent to the effect that the respondent is willing to refund the sum of Rs.l.25,000/- together with interest @ 6% per annum from the date of filing of the suit, I find that the appellants, in the circumstances of the case, are entitled for the refund of the earnest money admittedly paid by the appellants to the respondent. The above finding of the learned Judge to the effect that the respondent is entitled to forfeit sum of Rs.1,25,000/- paid by the appellants to the respondent, cannot be sustained in the facts and circumstances of the case. In view of the above, the second point for determination is answered accordingly. 13. In the circumstances, the appeal is partly allowed. The impugned judgment and decree dated 27/01/1994 refusing to refund of earnest money of Rs.l,25,000/- is quashed and set aside. The respondent is directed to pay to the appellants a sum of Rs.1,25,000/- (rupees one lac twentyfive thousand only) together with interest thereon @ 6% per annum from the date of filing of the suit up to the actual payment. Rest of the prayers in the suit are rejected. There shall be no order as to the costs. 14. Decree accordingly. Rest of the prayers in the suit are rejected. There shall be no order as to the costs. 14. Decree accordingly. Appeal partly allowed.