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2024 DIGILAW 83 (BOM)

Vijay Madhavrao Budhale v. Bhagoji Ganu Kamble

2024-01-10

SANDEEP V.MARNE

body2024
JUDGMENT : A. THE CHALLENGE 1. The Second Appeal is filed challenging the Judgment and Decree passed by the District Judge-4, Kolhapur on 24 November 2022 allowing Regular Civil Appeal No. 54 of 2022 and reversing the Decree dated 2 March 2022 passed by the Civil Judge Senior Division, Kolhapur in Regular Civil Suit No. 505 of 2019. B. SUBSTANTIAL QUESTIONS OF LAW 2. The Second Appeal is admitted on following substantial questions of law : (i) Whether limitation under Article 54 of the Limitation Act would begin from the date of oral refusal to perform a contract before occurrence of the contingency, on which performance of contract depends? (ii) Whether co-owners of property who are confirming parties to agreement for sale are necessary parties in a suit for specific performance of that agreement? (iii) Whether Plaintiff is entitled to protection of possession under Section 53-A of the Transfer of Property Act, 1882? (iv) Whether discretionary relief of specific performance can be granted in Plaintiffs favour? (v) Whether alternate relief of refund of earnest money with interest can be granted in favour of Plaintiff? 3. The learned counsel have placed on record compilation of relevant documents. Considering the narrow controversy involved in the appeal and with the consent of the learned counsel appearing for parties, who have extensively canvassed their submissions before me, the Second Appeal is taken up for final hearing. C. FACTS 4. Narration of brief factual background of the case would be necessary for better understanding of formulation of the above questions of law and for answering them. Suit property bearing Gat No.54 Hissa No.2A admeasuring 2 Hectares 7 Ares was owned and possessed by the Defendant. A registered Agreement for Sale dated 14 March 2011 came to be executed, by which the Defendant agreed to sell the suit property to the Plaintiff for consideration of Rs.2,00,000/. Out of the said agreed amount of consideration, Plaintiff paid to the Defendant, amount of Rs.1,75,000/- and agreed to pay the balance consideration of Rs.25,000/- at the time of execution of the Sale-Deed. The Agreement for Sale contained a stipulation that prior permission of the Government Authorities was needed for sale transaction and that the Defendant was to procure such permission and give a written intimation to the Plaintiff and after one month of receipt of intimation, the Sale-Deed was to be executed. The Agreement for Sale contained a stipulation that prior permission of the Government Authorities was needed for sale transaction and that the Defendant was to procure such permission and give a written intimation to the Plaintiff and after one month of receipt of intimation, the Sale-Deed was to be executed. It is Plaintiffs case that since 80% of the consideration was paid at the time of execution of Agreement for Sale, Defendant handed over possession of the suit property to the Plaintiff by executing a separate possession receipt executed on 14 March 2011. 5. Since the Defendant failed to execute the Sale-Deed in favour of the Plaintiff, Notice dated 29 December 2018 was issued to the Defendant at the behest of the Plaintiff calling upon the Defendant to execute the Sale-Deed by accepting the balance amount of consideration. As the Defendant failed to act as per the Notice, Plaintiff instituted Regular Civil Suit No. 505 of 2019 in the Court of Civil Judge Senior Division, Kolhapur seeking specific performance of Agreement for Sale dated 14 March 2011 and for regularization of possession. An alternate prayer was made for refund of consideration of Rs.1,75,000/- alongwith interest @ 18% per annum in the event of the Court not granting specific performance for any technical reason. The Defendant resisted the suit by filing Written Statement. 6. It appears that during pendency of the suit, by Sale-deed dated 23 December 2021, the Defendant sold the suit property to Shri. Praveen Laxman Kesarkar for consideration of Rs.3,50,000/-. 7. The Trial Court proceeded to decree the suit by its Judgment and Order dated 2 March 2022 directing the Defendant to execute the Sale-deed of the suit property by accepting the balance consideration of Rs.25,000/- within one month by making application seeking permission for Sale. It was directed that in the event of the Defendant failing to make such application within one month, the Plaintiff was held entitled to seek such permission from the competent Government authority. It was further directed that in the event of refusal by the Government authorities to grant permission, Plaintiff is entitled to refund of earnest money with interest @ 6% p.a. from the date of such refusal till complete realization. Plaintiff was directed to deposit the balance amount of consideration of Rs.25,000/- in Court within one month. It was further directed that in the event of refusal by the Government authorities to grant permission, Plaintiff is entitled to refund of earnest money with interest @ 6% p.a. from the date of such refusal till complete realization. Plaintiff was directed to deposit the balance amount of consideration of Rs.25,000/- in Court within one month. The Defendant was restrained from alienating the suit property by creating third party interests over it. 8. Aggrieved by the Decree passed by the Trial Court, the Defendant instituted Regular Civil Appeal No. 54 of 2022 in the Court of District Judge-4, Kolhapur. The First Appellate Court by Judgment and Order dated 24 November 2022, has proceeded to allow the Appeal of the Defendant and has reversed the decree passed by the Trial Court by dismissing Regular Civil Suit No. 505 of 2009. The Appellate Court has held that the Plaintiff is not entitled to even alternate relief of refund of earnest amount. It has further permitted the Plaintiff to withdraw the amount of Rs.25,000/- deposited in the Trial Court. Aggrieved by the decision of the First Appellate Court, the Appellant has filed the present appeal. Since the suit property is shown to have been sold to Shri. Praveen Laxman Kesarkar, the Appellant has filed Interim Application No. 7762 of 2023 for impleadment of Shri. Praveen Laxman Kesarkar as party Respondent to the present Appeal. D. SUBMISSIONS 9. Mr. Kulkarni, the learned counsel appearing for the Appellant would submit that the first Appellate Court has committed a gross error in reversing the decree of the Trial Court. Taking me through the various finding s recorded by the first Appellate Court, Mr. Kulkarni would submit that almost all the issues are answered in favour of the Appellant/Plaintiff by the first Appellate Court. That execution of registered Agreement for Sale dated 14 March 2011 is proved. That payment of consideration of Rs.1,75,000/- is proved. That readiness and willingness on the part of the Plaintiff to execute the Sale-deed is proved. He would therefore submit that once execution of the Agreement and readiness and willingness on the part of the Plaintiff is proved, the first Appellate Court ought to have dismissed the Appeal filed by the Defendant/Respondent. Mr. Kulkarni would further submit that the first Appellate Court has committed an error in holding that the suit filed by the Plaintiff is bad for non-joinder of necessary parties. Mr. Kulkarni would further submit that the first Appellate Court has committed an error in holding that the suit filed by the Plaintiff is bad for non-joinder of necessary parties. That such objection was never raised by the Defendant nor was the said issue framed by the Trial Court. He would submit that the Defendant alone is expected to execute Sale-deed in favour of the Plaintiff and therefore joining of confirming parties to the suit was not at all necessary. That such confirming parties cannot be treated as necessary parties, in whose absence the suit cannot be dismissed on the ground of non-joinder of confirming parties to the Agreement. 10. Mr. Kulkarni would submit that the first Appellate Court has erred in holding that the suit filed by the Plaintiff was not within limitation. He would submit that the first Appellate Court has misread the provisions of Article 54 of the Limitation Act. According to Mr. Kulkarni, the contract for Sale is contingent upon the Defendant obtaining permission for sale of the suit property. That in such circumstances, the Defendant cannot be permitted to take benefit of his own wrong and frustrate the claim of Plaintiff for specific performance of Agreement after accepting 80% of the consideration amount. He would submit that in the present case, time for performance of contract is ascertainable. That the time for performance of the contract was fixed as the date of procurement of permission for Sale of the suit property. That since such permission was not obtained till filing of the suit, the period of limitation did not start to run. Relying upon the judgment of the Apex Court in Ramzan, [Ramzan Vs. Hussaini (1990) 1 SCC 104 ], Mr. Kulkarni would submit that the fact situation before the Apex Court was somewhat similar to the present case and that as per the ratio of the judgment, when the time of event is capable of being ascertained, the period of limitation will begin from the occurrence of the event. Mr. Kulkarni would submit that the lower Appellate Court has misdirected itself by relying upon stray admission given by the Plaintiff in the cross-examination about refusal by Defendant to execute Sale-deed in September 2011. That such oral refusal is inconsequential for determining the period of limitation. Mr. Kulkarni would submit that the lower Appellate Court has misdirected itself by relying upon stray admission given by the Plaintiff in the cross-examination about refusal by Defendant to execute Sale-deed in September 2011. That such oral refusal is inconsequential for determining the period of limitation. That the Defendant was yet to procure permission for sale of the suit property and therefore the alleged refusal given by him in September 2011 is not a relevant factor for determining the period of limitation. Mr. Kulkarni would also rely upon the judgment of the Apex Court in Panchanan Dhara, [Panchanan Dhara and Others Vs. Monmatha Nath Maithy (Dead) Through LRS. And another (2006) 5 SCC 340 ] and A. Valliammai, [A. Valliammai Vs. K.P. Murali, AIR 2023 SC (CIVIL) 2522]. 11. Mr. Kulkarni, would further submit that the first Appellate Court ought to have appreciated that the Defendant has indulged in unjust enrichment by selling the same property twice. That he accepted 80% of the consideration from Plaintiff in the year 2011 and deliberately did not procure Government permission. That he took benefit of his own wrong and sold the suit property in favour of Praveen Kesarkar for additional consideration in the year 2020-21. That the first Appellate Court ought to have appreciated such conduct on the part of the Defendant and ought to have dismissed his Appeal. 12. Mr. Kulkarni would further submit that the first Appellate Court has erred in holding that possession of the suit property was not handed over to the Plaintiff. That handing over possession is documented by execution of Possession Receipt dated 14 March 2011. That the said document would constitute sufficient evidence of handing over of possession of the suit property. That the first Appellate Court has erred in holding that no evidence is produced to suggest that Plaintiff obtained actual physical possession of the suit property at any time. He would submit that separate possession receipt is required to be executed as the factum of handing over of possession could not be recorded in the registered Agreement for Sale on account of requirement of obtaining prior permission of sale from government authorities. That payment of 80% consideration is sufficient indication to suggest that handing over of possession of the property was logical. That payment of 80% consideration is sufficient indication to suggest that handing over of possession of the property was logical. That since possession is handed over towards part performance of contract and since readiness and willingness of Plaintiff is proved, Plaintiff must be given protection under Section 53-A of the Transfer of Property Act, 1882. 13. Lastly, Mr. Kulkarni would submit that even if the relief of specific performance is to be denied, the first Appellate Court ought to have directed atleast refund of earnest money of Rs.1,75,000/- alongwith 18% interest as prayer for in the suit. 14. Per-contra, Mr. Chothani, the learned counsel appearing for the Respondent would oppose the Appeal and support the Order passed by the first Appellate Court. He would submit that the suit filed by the Plaintiff was clearly barred by limitation. That the Plaintiff acquired knowledge of refusal on the part of the Defendant to execute Sale-deed in September 2011 itself and therefore he ought to have filed the suit for specific performance within three years from the date of such refusal. He would invite my attention to admission given by the Plaintiff in his cross-examination about such refusal by the Defendant in September 2011. He would submit that the first Appellate Court has held in favour of the Plaintiff. That no specific time limit was agreed in the agreement and that under the provisions of Article 54 of the Limitation Act, the limitation can be computed from the date of refusal to perform the Agreement by the Defendant. That in the present case, the date of refusal cannot be linked to the Notice dated 29 December 2018 but to the refusal by Defendant to execute Sale deed in September 2011 as per specific admission by the Plaintiff in the cross-examination. He would submit that the Plaintiff was never interested in getting the Sale-deed executed in his favour and maintained silence for over seven long years. That the first communication made by him with the Defendant was in the year 2018 by addressing a notice, before which Plaintiff made no efforts for getting the Sale-deed executed in his favour. That the Appellate Court has correctly held the suit to be barred by limitation. Mr. Chotani would rely upon the Judgment of the Apex Court in Ahmmadsahab Abdul Mulla, [Ahmmadsahab Abdul Mulla (Dead) by proposed Lrs. Vs. Bibijan and Ors. (2009) 5 SCR 476 ]. That the Appellate Court has correctly held the suit to be barred by limitation. Mr. Chotani would rely upon the Judgment of the Apex Court in Ahmmadsahab Abdul Mulla, [Ahmmadsahab Abdul Mulla (Dead) by proposed Lrs. Vs. Bibijan and Ors. (2009) 5 SCR 476 ]. 15. Mr. Chotani would further submit that the co-owners of the land were made confirming parties to the Agreement for Sale who became necessary parties to the suit. That the Sale-deed could not have been executed without consent of the confirming parties. That therefore the suit filed against the Defendant alone could not have resulted in execution of the Sale-deed in favour of the Plaintiff. That even in the subsequent Sale-deed executed in favour of Praveen Laxman Kesarkar, consent of other co-owners has been obtained. Mr. Chotani would further submit that since the suit is held to be barred by limitation, as well as for non-joinder of necessary parties, there is no question of Plaintiff being granted the relief of refund of earnest money deposit. He would pray for dismissal of the Appeal. 16. I have also heard Ms. Parasnis the learned counsel appearing for the proposed Respondent-Praveen Laxman Kesarkar who is sought to be added as party Respondent by way of Interim Application No. 7762 of 2023. She would seek dismissal of the Appeal contending that her client is already the owner and possessor of the suit property, being a bona fide purchaser. E. REASONS AND ANALYSIS 17. Plaintiff has filed suit for specific performance of the Agreement for Sale dated 14 March 2011. Execution of the Agreement is proved both before the Trial Court and the first Appellate Court. Payment of consideration of Rs.1,75,000/- out of agreed amount of Rs.2,00,000/- is also proved in both the Courts. Plaintiffs readiness and willingness to perform his agreement is also proved before both the Courts. The suit is dismissed by the first Appellate Court essentially on the grounds of limitation and non-joinder of necessary parties. The relief of regularisation of possession is declined by holding that the Plaintiff has failed to prove that he was put in actual physical possession of the suit property. E.1 LIMITATION 18. Thus, the first issue that arises for consideration, which is also the first substantial question of law, is about limitation. The relief of regularisation of possession is declined by holding that the Plaintiff has failed to prove that he was put in actual physical possession of the suit property. E.1 LIMITATION 18. Thus, the first issue that arises for consideration, which is also the first substantial question of law, is about limitation. The Agreement dated 14 March 2011 does not fix any specific time by which the contract was to be performed. The contract was contingent on Defendant procuring prior permission of the State Government for execution of the Sale-deed. Para-10 of the Agreement reads thus : 19. Thus, under the Agreement, the Defendant agreed to procure permission of the Government Authorities and to give written intimation of such procurement to the Plaintiff and within one month of receipt of such intimation, the transaction of sale was to be completed. It is an admitted position that the Defendant did not apply for permission of Government Authorities for completion of the sale transaction. It is Mr. Kulkarni's case that since the permission is not obtained, the time fixed for performance did not arrive and therefore the period of limitation under Article 54 did not begin. Article 54 of the Limitation Act reads thus : Description of suit Period of Limitation Time from which period begins to run 54. For specific performance of a contract. Three years The date is fixed for the performance, or, if no such date is fixed, when the Plaintiff has notice that performance is refused. 20. Thus under Article 54, for specific performance of contract, period of limitation of three years is prescribed, which is to be computed either from the date fixed for performance and/or if no date is fixed, from the date of notice of refusal of performance. According to Mr. Kulkarni, the date for performance in the present case is ascertainable, such date being the date of procurement of permission from Government Authorities. He would submit that the period of limitation would thus be computable from the date from which the permission is issued by the Government Authorities. He has relied upon the Judgment of the Apex Court in Ramzan (supra). In that case, the house agreed to be sold was under mortgage and therefore the contract of sale was to be performed after redemption of the house. He has relied upon the Judgment of the Apex Court in Ramzan (supra). In that case, the house agreed to be sold was under mortgage and therefore the contract of sale was to be performed after redemption of the house. In the light of these facts, the Apex Court held that it is not necessary that a particular date from the calendar is required to be specified and even if the date can be ascertained from covenants in contract, such date becomes the date fixed in the contract for performance thereof. The Apex Court held in para-6 as under : “6. The relevant provisions in the alleged agreement of sale as quoted in the judgment of the trial court reads as follows: This house is under mortgage with Jethmal Bastimal for Rs.1000. When you will get this house, the description of which is given below, redeemed from M/s. Jethmal Bastimal and take the papers of the registry in your possession, on that day I will have the sale deed of the said house, written, executed and registered in your favour.” The question is whether a date was 'fixed' for the performance of the agreement and in our view the answer is in the affirmative. It is true that a particular date was not ascertainable originally, but as soon as the Plaintiff redeemed the mortgage, it became an ascertained date. If the Plaintiff had, immediately after the redemption, filed the suit, could it be thrown out on the ground that she was not entitled to the specific performance asked for? We do not think so. She would have been within her rights to assert that she had performed her part of the contract and was entitled to insist that her brother should complete his part. The agreement is a typical illustration of a contingent contract within the meaning of Section 31 of the Indian Contract Act, 1872 and became enforceable as soon as the event of redemption (by the Plaintiff herself) happened…..” 21. However, it appears that the issue about interpretation of the expression 'date fixed' was referred to three Judge Bench of the Apex Court, which answered the reference in Ahmmadsahab Abdul Mulla (supra) which is relied upon by Mr. Chothani. While answering the reference the Bench of three Judges took into consideration the view expressed by two Judge Bench in Ramzan (supra) and held as under : 10. Chothani. While answering the reference the Bench of three Judges took into consideration the view expressed by two Judge Bench in Ramzan (supra) and held as under : 10. “Fixed” in essence means having final or crystallised form or character not subject to change or fluctuation. 11. The inevitable conclusion is that the expression “date fixed for the performance” is a crystallised notion. This is clear from the fact that the second part “time from which period begins to run” refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on “when the Plaintiff has notice that performance is refused”. Here again, there is a definite point of time, when the Plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances. 12. Whether the date was fixed or not the Plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and evidence to be brought on record. The expression “date” used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. We answer the reference accordingly. The matter shall now be placed before the Division Bench for deciding the issue on merits. (emphasis supplied) 22. Thus as held by the larger Bench in Ahmmadsahab Abdul Mulla, the 'date fixed' in the present case cannot be treated as the date of procurement of sale permission by Defendant and the present case would fall in second part of Article 54 of Limitation Act. 23. In Panchanan Dhara (supra), the Apex Court has held that when performance is dependent upon grant of permission by statutory authority, the vendor cannot be permitted to take advantage of his own wrong in not procuring such permission. The Court has held thus : 27. Performance of a contract may be dependent upon several factors including grant of permission by the statutory authority in appropriate cases. If a certain statutory formality is required to be complied with or permission is required to be obtained, a deed of sale cannot be registered till the said requirements are complied with. The Court has held thus : 27. Performance of a contract may be dependent upon several factors including grant of permission by the statutory authority in appropriate cases. If a certain statutory formality is required to be complied with or permission is required to be obtained, a deed of sale cannot be registered till the said requirements are complied with. In a given situation, the vendor may not be permitted to take advantage of his own wrong in not taking steps for complying with the statutory provisions and then to raise a plea of limitation. 24. In A. Valliammai (supra), the Apex Court has held that when no specific time is fixed for performance, the Court will have to determine the date on which the Plaintiff had notice of refusal on part of the Defendant to perform the contract. The Court held thus : 23. It is an accepted position that Rs.1,00,000/- was paid at the time of execution of the agreement to sell (Exhibit A-1), and the balance consideration of Rs.31,45,000 was required to be paid by 26.05.1989. Time for payment of Rs.31,45,000/- and execution of the sale deed was extended till 26.11.1989 vide the endorsement (Exhibit A-3). If we take the date 26.11.1989 as the date for performance, the suit for specific performance filed on 27.09.1995, is barred by limitation. However, we agree with the submission raised on behalf of K.P. Murali and S.P. Duraisamy, that the aforesaid time, as fixed vide the agreement to sell and the endorsement (Exhibit A-1 and A-3), was not the essence of the contract and therefore, the first part of Article 54 will not be applicable. Instead, the second part of Article 54 will apply. On the interpretation of Article 54, this Court in Pachanan Dhara v. Monmatha Nath Maity, has held that for determining applicability of the first or the second part, the court will have to see whether any time was fixed for performance of the agreement to sell and if so fixed, whether the suit was filed beyond the prescribed period, unless a case for extension of time or performance was pleaded or established. However, when no time is fixed for performance, the court will have to determine the date on which the Plaintiff had notice of refusal on part of the defendant to perform the contract. However, when no time is fixed for performance, the court will have to determine the date on which the Plaintiff had notice of refusal on part of the defendant to perform the contract. Therefore, we have to examine whether K. Sriram or his assignees, K.P. Murali or S.P. Duraisamy, had notice that performance had been refused by A. Valliammai and, if so, from which date. (emphasis supplied) 25. Thus, even in A. Valliammai relied upon by Mr. Kulkarni, the Apex Court has held that when no time is fixed for performance, the date of refusal becomes the relevant date for time to begin running under Article 54 of the Limitation Act. 26. Having held that the date of refusal on the part of Defendant to perform the contract is the relevant date for determining the period of limitation, I now proceed to examine as to when the Defendant expressed such refusal. The averments in the plaint would lead credence to the finding that the date of refusal by Defendant to perform the contract became the cause of action for filing the suit. Plaintiff has pleaded in para-8 of the plaint that the cause of action arose for filing the suit on account of failure of the Defendant to act in accordance with and/or respond to Notice dated 29 December 2018. Thus, non-response to the Notice dated 29 December 2018 is treated as refusal by Plaintiff to perform the contract on the part of the Defendant. However, the first Appellate Court has held that the Defendant had refused to perform the contract in September 2011 itself and has therefore held the suit to be barred by limitation. The said finding is recorded by the first Appellate Court on the basis of deposition of Plaintiff in his cross examination, relevant part of which reads thus : 27. Thus, the statement made by Plaintiff in cross examination that ‘after end of the period, I approached the Defendant asking him to complete the sale deed, but Defendant refused to execute the sale deed' is taken by the first Appellate Court as refusal on the part of the Defendant to perform the contract. In my view careful reading of the above admission by Plaintiff in the context of pleadings and covenants of the agreement would indicate that September 2011 cannot be the starting point of limitation. In my view careful reading of the above admission by Plaintiff in the context of pleadings and covenants of the agreement would indicate that September 2011 cannot be the starting point of limitation. Plaintiffs statement in deposition that ‘after end of the period, I approached the Defendant asking him to complete the sale deed, but Defendant refused to execute the sale deed' is to be read with and has direct connection with his immediately preceding statement that ‘as per the alleged transaction between me and Defendant, Defendant agreed to execute the sale deed of suit property by 14/09/2011’. However, the Agreement nowhere stipulates that the Sale deed was to be executed before 14 September 2011. It is admitted position that by September 2011, Defendant had not procured, rather not even applied for, permission for sale of the suit property. Therefore, it is difficult to fathom as to how Plaintiff could approach Defendant in September 2011 and demand execution of the Sale deed. The right to claim specific performance flows from stipulations in the Agreement and not on the basis of conduct of parties. The Agreement in the present case has been executed on 14 March 2011 and in absence of any specific outer date for its performance, which was contingent on Defendant procuring sale permission, it is erroneous on the part of the first Appellate Court to assume that the period of limitation began running from September 2011. 28. Thus in the present case the date of refusal cannot be treated as September 2011 and will have to be linked with failure on part of Defendant to act as per or respond to the Notice dated 29 December 2018. Also as held by the Apex Court in Panchanan Dhara (supra), since performance was dependent upon grant of permission by statutory authority, Defendant cannot be permitted to take advantage of his own wrong in not procuring such permission and then raise the issue of limitation. The finding of the first Appellate Court on the issue of limitation is thus perverse and liable to be set aside. Thus it is held that Plaintiffs suit was within limitation. E. 2 NON-JOINDER OF NECESSARY PARTIES 29. The finding of the first Appellate Court on the issue of limitation is thus perverse and liable to be set aside. Thus it is held that Plaintiffs suit was within limitation. E. 2 NON-JOINDER OF NECESSARY PARTIES 29. So far as issue of non-joinder of necessary parties is concerned, it is seen from the Agreement that Yuvraj Bhagoji Kamble (Son) and Anandi Shyamrao Kamble and Kamlabai Dattu Kamble are added to the Agreement dated 14 March 2011 as consenting parties. Upon being inquired, Mr. Kulkarni fairly submits that the said consenting parties are the co-owners of the joint family properties. It appears that their consent is obtained for transaction possibly on account of the fact that the sale transaction could not be effected without their consent. If that is the case, their consent would be needed for execution of the Sale-deed as well. The decree passed by the Trial Court envisaged execution of Sale-deed by Defendant alone, without noticing that such Sale-deed could not be executed without the consent of the consenting parties. Even in the transaction effected in favour of the Intervener, Gojabai Bhagoji Kamble and Yuvraj Bhagoji Kamble are added as consenting parties. I do not wish to enter into the rights and entitlements of the other two consenting parties viz. Anandabai and Kamlabai as that is not the subject matter of the present Appeal. Suffice it to hold that the sale transaction could not be completed without obtaining consent alteast of Yuvraj Bhagoji Kamble, who is the son of the Defendant. 30. Mr. Kulkarni's contention is that the said consenting parties are necessary parties. It is settled principle that a necessary party is the one who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. In Moreshar Yadaovrao Mahajan, [Moreshar Yadaovrao Mahajan Vs. Vyankatesh Sitaram Bhedi, Civil Appeal Nos.5755-5756 of 2011 decided on 27 September 2022], the Apex Court has held as under : 17. This Court, in the case of Mumbai International Airport Private Limited (supra), has observed thus: “15. A “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. If a “necessary party” is not impleaded, the suit itself is liable to be dismissed. A “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. If a “necessary party” is not impleaded, the suit itself is liable to be dismissed. A “proper party” is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.” 18. It could thus be seen that a “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. It has been held that if a “necessary party” is not impleaded, the suit itself is liable to be dismissed. 31. In the present case, consent of the confirming parties is obtained possibly because they have some interest in the suit property. Without their consent, the Sale deed could not have been executed. Therefore, whether the Court could have directed execution of Sale deed in absence of consent of confirming parties becomes questionable. Therefore, it was necessary that the said confirming parties are impleaded as Defendants to the Suit. Mr. Kulkarni has contended that the issue of non-joinder was neither pleaded nor decided by the Trial Court. No doubt, it is well settled law that the objection of non-joinder must be raised at the earlier possible time. The objective being to enable the Plaintiff to remove the defect by impleading the necessary parties. Order I, Rule 13 of the Code of Civil Procedure, 1908 (the Code) provides thus : Objections as to non-joinder or misjoinder 9. No doubt, it is well settled law that the objection of non-joinder must be raised at the earlier possible time. The objective being to enable the Plaintiff to remove the defect by impleading the necessary parties. Order I, Rule 13 of the Code of Civil Procedure, 1908 (the Code) provides thus : Objections as to non-joinder or misjoinder 9. All objections on the ground of non-joinder or misjoinder of parties shall be taken at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement, unless the ground of objection has subsequently arisen, and any such objection not so taken shall be deemed to have been waived. 32. In the present case, the objection of non-joinder was not raised by the Defendant in his written statement. Therefore, no occasion arose for the Trial Court to decide the same. However the restriction of not reversing a decree on pleas of mis-joinder or non-joinder, does not apply for the defect of non-joinder of necessary parties under Section 99 of the Code, which reads thus : 99. No decree to be reversed or modified for error or irregularity not affecting merits or jurisdiction No decree shall be reversed or substantially varied, nor shall any case be remanded, in appeal on account of any mis-joinder [or non-joinder] of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court: Provided that nothing in this section shall apply to non-joinder of a necessary party. It would be relevant to add here that the Proviso to Section 99 has been added by way of amendment in the year 1977. 33. This Court (G. S. Patel, J.) has considered the position of waiver of objection of non-joinder of necessary party in the light of provisions of Order I Rule 13 and Section 99 and referred to the decision of Full Bench of Guwahati High Court in Chandra Mohan Saha, [Chandra Mohan Saha Vs. Union of India AIT 1953 Assam 196], rendered prior to the 1977 amendment and by Single Judge of this Court in Maria Tecla Goes Pereira, [Maria Tecla Goes Pereira v. Denzyl Lobo, (1993) 1 Bom CR 679], rendered after 1977 amendment, and has held as under : 18. Union of India AIT 1953 Assam 196], rendered prior to the 1977 amendment and by Single Judge of this Court in Maria Tecla Goes Pereira, [Maria Tecla Goes Pereira v. Denzyl Lobo, (1993) 1 Bom CR 679], rendered after 1977 amendment, and has held as under : 18. In any case, this may now be entirely academic following the 1977 amendment to the CPC. The provisos to Order 1 Rule 9 and Section 99 make it abundantly clear that no decree is to be reversed only on the ground of non-joinder of a party, unless that party is a necessary party. Therefore, in such a case, the non-joinder of a necessary party always defeats a suit. If that be so, then there is no question of a 'waiver' of such a plea of non-joinder of a necessary party at all. Moreover, there is no question any longer of a plea of non-joinder of a proper party never being taken, or of Order I, Rule 13 not applying to such a plea, or of it having application only to the plea of non-joinder of necessary party. If the view of Mr. Justice Vimadalal is to be applied even after the 1977 amendment, then those provisos are rendered meaningless : the view that a plea of non-joinder of a proper party ‘would never be raised because, in view of the provisions of Order I, Rule 9 it would not be fatal and the Court could always proceed with the suit in regard to the rights and interests of the parties actually before it' is a view that is negated by the introduction of those provisos. They contemplate the taking of such a plea of non-joinder of a proper party, but make it clear that the want of such a plea cannot defeat a suit or serve to reverse a decree. Indeed, the entire paradigm now stands inverted : Order I, Rule 13 only ever applies to a plea of non-joinder of a proper party. That is the only plea capable of being waived. A plea of non-joinder of a necessary party can never be waived, and can be raised at any time, subject of course to the essential requirement that there must be a supporting pre-existing averment in the pleadings. The Assam High Court's view, like the view in Chavan v. Parvatibai predates the 1977 amendment. A plea of non-joinder of a necessary party can never be waived, and can be raised at any time, subject of course to the essential requirement that there must be a supporting pre-existing averment in the pleadings. The Assam High Court's view, like the view in Chavan v. Parvatibai predates the 1977 amendment. However, while the Assam High Court's view survives the amendment, the view in Chavan v. Parvatibai does not. 19. This is also precisely the view taken several years after the 1977 CPC amendment by another learned single Judge of this Court at its Panaji seat. In Maria Tecla Goes Pereira v. Denzyl Lobo, Dr. Justice E.S. Da Silva had before him a second appeal in a suit for declaration, title and permanent injunction, one that was partly decreed by the Trial Court. The declaration sought was of a tenancy. Dr. Justice Da Silva said in terms that Order 1 Rule 13 of the CPC, i.e., the waiver of a plea of joinder, cannot prevent the dismissal of a suit for non-joinder of a necessary party. In that case, the necessary averments were all already in place. The issue of non-joinder, the Court held, relling inter alia on the Assam Full Bench view in Chandra Mohan goes to the ‘root of jurisdiction’, and is a plea that can be taken at anl stage. This, Mr. Khandeparkar submits, is clearly the correct position in law, and I believe he is right. (emphasis supplied) 34. I am therefore of the view that the Defendant was not precluded from taking the objection of non-joinder of necessary parties before the first Appellate Court. Plaintiffs prayer for specific performance of contract is thus bad for non-joinder of confirming parties to the Agreement, which were necessary parties. However this objection would not apply to the alternative prayer for refund of earnest deposit, which is solely paid to Defendant and which is discussed separately. I therefore do not see any error being committed by the first Appellate Court in holding that Plaintiffs suit was bad for non-joinder of necessary parties. This issue is answered accordingly. E. 3 PLAINTIFF’S ENTITLEMENT FOR SPECIFIC PERFORMANCE 35. Though the first Appellate Court has dismissed Plaintiffs suit for twin reasons of limitation and non-joinder, I have reversed its finding on limitation but has upheld the finding on non-joinder. This issue is answered accordingly. E. 3 PLAINTIFF’S ENTITLEMENT FOR SPECIFIC PERFORMANCE 35. Though the first Appellate Court has dismissed Plaintiffs suit for twin reasons of limitation and non-joinder, I have reversed its finding on limitation but has upheld the finding on non-joinder. Since Plaintiffs prayer for specific performance is held to be bad for nonjoinder, he cannot be awarded the relief of execution of Sale deed in his favour. Even independent of the objection of non-joinder, sale of the suit property in favour of proposed Respondent makes the prayer for specific performance difficult to grant. Here the transaction is of the year 2011, i.e. prior to the 2018 amendment to the Specific Relief Act, 1963. The amendment seeks to take away discretionary powers of a Court to grant specific performance of contract and make the same mandatory once all the ingredients are fulfilled. In Sughar Singh, [Sughar Singh v. Hari Singh, (2021) 17 SCC 705], a two Judge Bench of the Apex Court, while leaving open the issue of retrospective application of 2018 Amendment to prior transactions, held that the amended provision provides a guide. The Court held : 28. Now, so far as the finding recorded by the High Court and the observations made by the High Court on Section 20 of the Act and the observation that even if the agreement is found to be duly executed and the Plaintiff is found to be ready and willing to perform his part of the agreement, grant of decree of specific performance is not automatic and it is a discretionary relief is concerned, the same cannot be accepted and/or approved. In such a case, many a times it would be giving a premium to the dishonest conduct on the part of the defendant executant of the agreement to sell. Even the discretion under Section 20 of the Act is required to be exercised judiciously, soundly and reasonably. The Plaintiff cannot be punished by refusing the relief of specific performance despite the fact that the execution of the agreement to sell in his favour has been established and proved and that he is found to be always ready and willing to perform his part of the contract. The Plaintiff cannot be punished by refusing the relief of specific performance despite the fact that the execution of the agreement to sell in his favour has been established and proved and that he is found to be always ready and willing to perform his part of the contract. Not to grant the decree of specific performance despite the execution of the agreement to sell is proved; part sale consideration is proved and the Plaintiff is always ready and willing to perform his part of the contract would encourage the dishonesty. In such a situation, the balance should tilt in favour of the Plaintiff rather than in favour of the defendant executant of the agreement to sell, while exercising the discretion judiciously. 29. For the aforesaid, even amendment to the Specific Relief Act, 1963 by which Section 10(a) has been inserted, though may not be applicable retrospectively but can be a guide on the discretionary relief. Now the legislature has also thought it to insert Section 10(a) and now the specific performance is no longer a discretionary relief. As such the question whether the said provision would be applicable retrospectively or not and/or should be made applicable to all pending proceedings including appeals is kept open [Ed. : A three-Judge Bench has since answered this question in Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd., (2023) 1 SCC 355 , that the substituted Section 10 [as subs. by Act 18 of 2018 w.e.f. 1-10-2018] is prospectively applicable, it being substantive and mandatory in nature.]. However, at the same time, as observed hereinabove, the same can be a guide. 36. However, subsequently a three Judge Bench of the Apex Court in Katta Sujatha Reddy, [Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd., (2023) 1 SCC 355 ] has held that the 2018 amendment to the Specific Relief Act would not apply retrospectively to the prior transactions. The Court has held : 57. In the light of the aforesaid discussion, it is clear that ordinarily, the effect of amendment by substitution would be that the earlier provisions would be repealed, and amended provisions would be enacted in place of the earlier provisions from the date of inception of that enactment. The Court has held : 57. In the light of the aforesaid discussion, it is clear that ordinarily, the effect of amendment by substitution would be that the earlier provisions would be repealed, and amended provisions would be enacted in place of the earlier provisions from the date of inception of that enactment. However, if the substituted provisions contain any substantive provisions which create new rights, obligations, or take away any vested rights, then such substitution cannot automatically be assumed to have come into force retrospectively. In such cases, the legislature has to expressly provide as to whether such substitution is to be construed retrospectively or not. 58. In the case at hand, the Amendment Act contemplates that the said substituted provisions would come into force on such date as the Central Government may appoint, by notification in the Official Gazette, or different dates may be appointed for different provisions of the Act. It may be noted that 1-10-2018 was the appointed date on which the amended provisions would come into effect. 59. In view of the above discussion, we do not have any hesitation in holding that the 2018 Amendment to the Specific Relief Act is prospective and cannot apply to those transactions that took place prior to its coming into force. 37. Thus in the present case, even if the prayer for specific performance is not held to be bad for non-joinder of necessary parties, Plaintiff cannot be granted specific performance in the facts and circumstances of the case. Plaintiff has let the Defendant sell the suit property during pendency of the suit by not securing any restraint order against Defendant from doing so. Plaintiffs conduct in not entering into any correspondence with the Defendant from 2011 to 2018 for getting sale effected in his favour also assumes importance. In my view therefore Plaintiff cannot be granted the relief of specific performance of Agreement for Sale dated 14 March 2011. E.4 POSSESSION 38. The next issue is of possession and entitlement of Plaintiff to protect possession allegedly received by him upon execution of possession receipt under Section 53-A of the Transfer of Property Act. Plaintiffs claim of possession of suit property is premised on execution of separate possession receipt dated 14 March 2011 along with the registered Agreement for Sale executed on same day. 39. Plaintiffs claim of possession of suit property is premised on execution of separate possession receipt dated 14 March 2011 along with the registered Agreement for Sale executed on same day. 39. The first Appellate Court has recorded a finding of fact that possession of the suit property was not handed over to the Plaintiff at the time of execution of the Agreement for Sale. Detailed findings of facts are recorded by the first Appellate Court in that regard. Reliance of Mr. Kulkarni on Section 53-A of the Transfer of Property Act would not ensure the Plaintiff in the present case as the possession is not handed over by Agreement for Sale dated 14 March 2011. Clause-8 of the Agreement for Sale dated 14 March 2011 contains a specific covenant that the possession of the suit property was to be handed over at the time of execution of the Sale-Deed. A separate possession receipt is shown to have been executed in respect of possession. Thus, the right to possess the property does not flow out of the Agreement for Sale dated 14 March 2011. Since the possession is not obtained in part performance of Agreement for Sale dated 14 March 2011, provisions of Section 53A of the Transfer of Property Act would not apply to the facts of the present case. 40. The first Appellate Court has evaluated the evidence on record. It appears that the Plaintiff has admitted in the cross-examination that Plaintiff never entered upon land after execution of Agreement for Sale. Therefore, it cannot be said that the Plaintiff has proved taking over actual and physical possession of the suit property. The first Appellate Court has also doubted the genuineness of the possession receipt. Plaintiff could have produced atleast some evidence to show that he possessed the suit property during the gap of eight long years between the date of execution of the Agreement and the date of filing of the suit. I find no reason to interfere in the said finding of fact recorded by the first Appellate Court regarding the aspect of possession. The Trial Court framed Issue No.3 about possession of the suit property by Plaintiff. The presumption of possession is raised by the Trial Court only on the basis of the possession receipt. I find no reason to interfere in the said finding of fact recorded by the first Appellate Court regarding the aspect of possession. The Trial Court framed Issue No.3 about possession of the suit property by Plaintiff. The presumption of possession is raised by the Trial Court only on the basis of the possession receipt. The Trial Court has ignored a specific covenant in the Agreement for Sale which contemplated handing over of possession at the time of execution of the Sale-deed. It is difficult to believe that on the same day, the Defendant would agree in one document that possession will be given at the time of execution of the Sale-Deed and he would execute another document for handing over possession of the suit property. The discussion of the Trial Court on the aspect of possession in paras-82 and 84 of the Judgment is otherwise sketchy. The Trial Court has not gone through the evidence on record and has recorded a vague finding that the denial by the Defendant about execution of possession receipt cannot be accepted. 41. Possession of suit property is claimed by Plaintiff towards part performance of Agreement. The Agreement however specific ally provides that the possession would be handed over at the time of execution of Sale deed. Since protection of Section 53-A is claimed on the basis of Agreement for Sale dated 14 March 2011, the stipulations therein would prevail over the one in the separate unregistered document in the form of possession receipt. 42. In my view, therefore the First Appellate Court has rightly held that Plaintiff cannot be said to be in possession of the suit property. E. 5 ALTERNATE PRAYER FOR REFUND OF EARNEST DEPOSIT 43. Having held that Plaintiff is not entitled for specific performance of Agreement for Sale dated 14 March 2011, his alternate prayer for refund of earnest deposit of Rs.1,75,000/- needs to be considered. The first Appellate Court has declined the relief of refund of earnest money on account of dismissal of suit on the ground of limitation. As held above, the Suit is within limitation. Therefore, prayer for refund of earnest money needs to be considered on merits. 44. Defendant is accused of retaining 80% of the amount of consideration paid by Plaintiff and then, selling the suit property to a third party. As held above, the Suit is within limitation. Therefore, prayer for refund of earnest money needs to be considered on merits. 44. Defendant is accused of retaining 80% of the amount of consideration paid by Plaintiff and then, selling the suit property to a third party. No doubt Defendant had unjustly enriched himself by pocketing the consideration of Rs.1,75,000/- paid by Plaintiff and then again receiving another set of consideration of Rs.3,50,000/- from the proposed Respondent. During the course of hearing of the Appeal, a query was raised by this Court with Mr. Chothani as to whether Defendant is willing to refund the earnest amount of Rs.1,75,000/- with interest. Mr. Chothani, after taking instructions, has made a statement that the Defendant is willing to refund the earnest amount of Rs.1,75,000/-. He however expressed inability on the part of Defendant to pay interest. 45. The Trial Court had granted the relief of refund of earnest money in the event of Government authorities not granting permission for sale transaction alongwith interest at the rate of 6% p.a. In my view, considering the facts of the case, where the Defendant has sold the suit property to proposed Respondent for additional consideration, it is appropriate that Defendant refunds the earnest money of Rs.1,75,000/- with interest at the rate of 9% p.a. This will offer some solace to Plaintiff, who is not granted the relief of specific performance of contract despite proving readiness and willingness. Accordingly, Defendant needs to be directed to refund the amount of Rs.1,75,000/- to Plaintiff along with interest @ Rs. 9% p.a. from 14 March 2011 till the date of payment. To this extent the appeal deserves to be partly allowed. 46. Since Appellant/Plaintiff is declined the relief of specific performance and is instead granted the relief of refund of earnest money with interest, the rights of proposed Respondent are not affected in any manner and therefore the question of his impleadment has become academic. F. ORDER 47. The Appeal accordingly partly succeeds, and I proceed to pass the following order : (i) The Judgment and Order dated 24 November 2022 passed by District Judge-4, Kolhapur in Regular Civil Appeal No. 54 of 2022 is set aside. F. ORDER 47. The Appeal accordingly partly succeeds, and I proceed to pass the following order : (i) The Judgment and Order dated 24 November 2022 passed by District Judge-4, Kolhapur in Regular Civil Appeal No. 54 of 2022 is set aside. (ii) Regular Civil Suit No. 505 of 2019 is partly decreed by modifying the Decree dated 2 March 2022 passed by the Civil Judge Senior Division, Kolhapur in Regular Civil Suit No. 505 of 2019 to the extent that the Defendant shall pay to Plaintiff the earnest money of Rs.1,75,000/- alongwith interest at the rate of 9% p.a. from 14 March 2011 till the date of payment. 48. With the above directions, the Appeal is partly allowed and disposed of. There shall be no order as to costs. With disposal of the Appeal, all pending Interim Applications are also disposed of.