Madhya Pradesh High Court
Khemchand Sahu vs Chhingelal Rai on 31 August, 2007
Equivalent citations: 2008(2)MPHT184
Author: Arun Mishra
Bench: Arun Mishra, K.S. Chauhan
JUDGMENT Arun Mishra, J.
1. This appeal has been preferred by the defendant aggrieved by judgment and decree dated 29-4-02 passed in CS No. 13-A/2000 by Addl. District Judge, Narsinghpur for specific performance of agreement to sale the suit house to the plaintiff for a consideration of Rs. 3,05,000.
2. Plaintiff/respondent averred in the plaint that he entered into the agreement for sale of suit house for a sum of Rs. 3,05,000 on 7-6-97, earnest money of Rs. 1,50,000 was paid, sale deed was to be executed by 30th June, 1997, the agreement was reduced in writing. The plaintiff made arrangement for payment of balance consideration and stamp, he was present in the Office of Deputy Registrar, Registration, Narsinghpur on 30th June, 1997, however, defendant did not turn up to execute a sale deed, consequently, plaintiff obtained a certification from Deputy Registrar as to his presence in the office, consequently a notice was served by the plaintiff on defendant on 2-7-97, reply was sent by the defendant on 10-7-97 denying the specific performance, thereafter when plaintiff contacted the defendant, he was assured that defendant would execute the sale deed after some time. The plaintiff relied upon the defendant, till January, 2000, sale deed was not executed, consequently, yet another registered notice was served through Counsel on defendant on 15-2-2000, an incorrect reply was sent by the defendant on 23-2-2000, last notice was given on 3-3-2000, in spite of that sale deed had not been executed by defendant. Plaintiff had been ready and willing to purchase the property as per agreement, however, defendant did not execute the sale deed, consequently the suit for specific performance was filed on 8-5-2000.
3. The defendant in his written statement contended that he did not enter into agreement to sell the property, plaintiff was not present before the Deputy Registrar, Registration on 30th June, 1997. Other averments were also denied. In the special plea, it was contended that plaintiff was occupying the suit premises, but was not paying the rent. Defendant had filed a suit on the basis of bonafide personal requirement. The suit was pending in the Court of Civil Judge, Class II, Narsinghpur. In fact defendant required a loan, consequently had obtained a sum of Rs. 1,50,000 as a collateral security thereof, fraudulently the agreement was got executed, value of the house was Rs. 6 lacs, no out and out agreement for sale was entered into nor it was intended to be acted upon. Defendant has repaid the amount of loan to plaintiff, however, he has not vacated the house which he was occupying as a tenant. His intention was to usurp the property.
4. The Trial Court has decreed the suit and found that an agreement dated 7-6-97 was entered into for sale of disputed property for a sum of Rs. 3,05,000 and the earnest money of Rs. 1,50,000 was paid. Plaintiff had been and was ready and willing to purchase the property, agreement was not a collateral security for the amount of loan, amount of Rs. 1,50,000 had not been refunded to the plaintiff. Trial Court has decreed the suit as per judgment and decree dated 29-4-02.
5. It was submitted by Shri N.K. Patel, learned Senior Counsel appearing with Shri S.B. Patel, that it has come in the evidence of plaintiff that house was an ancestral house, thus, the defendant alone had no right to sell it without consulting other coparceners his sons in that regard. They have applied for becoming intervenor and they have indicated their unwillingness by making intervention, they have opposed the alienation of the property by defendant as such decree for specific performance be declined. In that regard, he has relied upon a decision of Apex Court in Balmukand v. Kamla Wati and Ors. . It was further submitted that there would be multiplicity of suits in case sons of defendants are directed to file independent suit, thus, needful can be done by declining the decree for specific performance on this ground in the instant case. It was also submitted by him that the value of the house was Rs. 6 lacs, at the time when agreement was entered into, and suit was filed belatedly after about 3 years of the agreement, though it was within limitation, but the delay comes in the way of plaintiff in seeking equitable relief of specific performance. The Court can take judicial notice of escalation in the prices of the house, thus, decree for specific performance be declined. He has also offered that instead of decree for specific performance, as a sum of Rs. 1,50,000 has been found to have been paid by way of earnest money and case of refund set up by defendant/appellant has been disbelieved, he has offered to pay a sum of Rs. 5 lacs to the plaintiff in lieu of decree for specific performance. He has placed reliance on decision of Apex Court in Nirmala Anand v. Advent Corporation Pvt. Ltd. and Ors. , decided on 10-5-2002 and yet another decision between the same parties Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. , decided on 30-9-2002.
6. Shri Anurag Tiwari, learned Counsel appearing for intervenors has submitted that decree for specific performance be denied in the facts of the instant case.
7. Shri Siddharth Oulati, learned Counsel appearing for respondent has submitted that this plea has not been raised in the written statement that the consent of other coparcener was not obtained, in the suit for specific performance sons of the defendant could not be said to be necessary parties, in the absence of plea this question could not be gone into in the instant case. The plaintiff has paid earnest money of Rs. 1,50,000, he was present before Deputy Registrar, Registration on 30th June, 97 and had served three notices before filing of the suit, he had remained ready and willing to purchase the property at all the time and to make payment of balance consideration, thus, decree for specific performance has rightly been passed, plea of refund taken by defendant has been rightly disbelieved by the Court below. Execution of agreement has been established, ordinarily suit for specific performance has to be decreed, hence, no case for interference in the discretion exercised by Trial Court was made out.
8. First question for consideration is whether inlervenors or defendants can be allowed to raise the question in this appeal that intervenors were not consulted by the defendant before entering into the agreement for sale of property with the plaintiff.
Shri N.K. Patel, learned Sr. Counsel has relied upon decision of Apex Court in Balmukund v. Kamla Wad and Ors. (supra), and has submitted that when Manager agreed to sell the property of a joint family, all adult members must be consulted, in the circumstances of the said case, it was held that transaction was not for benefit of family. In the instant case, intervenors were not parties and they could not be allowed to enlarge the scope of the suit or that of appeal by raising the aforesaid plea in the instant case, ordinarily in a suit for specific performance of contract for sale person claiming independent title or want to challenge an agreement for one or the other reason, cannot enlarge the scope of suit. Ordinarily in a suit for specific performance of contract for sale, Us between the purchaser and seller shall only be gone into and it could not be said to be open to the Court to decide whether a third party had acquired any title as that would not be germane for decision of the suit. In the instant case as defendant has not taken such a plea and intervenors were not parties, we decline to entertain the submission within the scope of present suit. The concept of intervenors is also not germane in a civil suit or a regular first appeal since they are not a party to the Us, we decline to entertain the aforesaid submission.
9. Coming to the question that there was delay on the part of plaintiff in filing the suit, though suit was filed within limitation, however, it appears that on 7th June, 1997 the agreement in question was entered into, sale deed was to be executed by 30th June, 97, notice was served on 2-7-97 by plaintiff and thereafter he had served notice in the month of February, 2000 and suit was filed in May, 2000 after 2 years 11 months from the date of agreement, in the facts and circumstances as a sum of Rs. 1,50,000 was paid, that was a considerable amount, we are not inclined to entertain the submission that there was inordinate delay in filing the suit, though plaintiff has waited for considerable period in order to file the suit in view of refusal made in the year 1997 itself, plaintiff could have filed the suit earlier, but considering the facts of the instant case that the plea of refund raised by defendant had not been found to be established and rightly so by the Trial Court. Evidence of defendant and Savitri Bai had been rightly disbelieved that amount of Rs. 1,50,000 was refunded, we are not inclined to deny the specific performance on the ground of delay in filing of the suit. However, the effect of filing of the suit after about 2 years 11 months, we have to consider while considering submission of Shri Patel that defendant has offered to pay a sum of Rs. 5 lacs as compensation to the plaintiff.
10. Shri Patel has relied upon a decision of Division Bench of this Court in Silaram Madanlal Saraogi v. Hemchand Bhagwandas Jain 1998(1) MPLJ 561, in which due to delay of 9 months in filing of suit specific performance was declined, the delay and advantage are within the realm of consideration to be made by Court while decreeing or refusing specific performance and it depends upon each and every case whether on the ground of delay alone, specific performance has to be declined, in the facts of this case, we are not inclined to accept the submission that merely on the basis of delay though the suit was within limitation, specific performance has to be declined.
11. Coming to submission raised by Shri Patel that defendant is ready to make payment of Rs. 5 lacs to the plaintiff as earnest money of Rs. 1,50,000 was paid, that may be ordered to be refunded alongwith interest and expenses etc. in total. He has offered to make payment of Rs. 5 lacs to the plaintiff in lieu of decree for specific performance.
Before adverting to the aforesaid submission raised by Shri Patel, we deem it appropriate to consider the decisions of Apex Court in this regard.
In Gobind Ram v. Gian Chand , the Apex Court has laid down that while decreeing specific performance, Court is guided by principles of justice, equity and good conscience. When the purchaser had paid the earnest money and there was failure on part of defendant to execute the sale deed, an effort was made to wriggle out of the contract between the parties in view of escalation in prices of real estate properties, the Apex Court has laid down that decree for specific performance and not compensation is the appropriate relief. However, Apex Court has in order to mitigate the hardship directed the purchaser to pay further amount to the defendant/appellant on his giving possession of the suit property. In Nirmala Anand v. Advent Corporation Pvt. Ltd. and Ors. (supra), decided on 10-5-2002, the Apex Court in view of escalation in real estate price in the interregnum period while decreeing the specific performance directed the purchaser to pay additional amount to builder as a condition for decreeing the specific performance. However, in the same report opining differently it was held that specific performance could not be made impossibility, while imposing onerous condition of payment of Rs. 40 lacs as that would/may amount to frustrate the agreement itself. In view of aforesaid cleavage of opinions, matter was heard by a Bench of three Judges in the Apex Court. The decision is reported as Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. (supra), decided on 30-9-2002. While deciding the difference, Apex Court has held that grant of decree for specific performance lies within the discretion of Court. Court while decreeing specific performance could impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether purchaser shall be directed to pay additional amount to the seller or converse would depend upon the facts and circumstances of the case:
6. It is true that grant of decree of specific performance lies in the discretion of the Court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the Court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the consideration to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing the specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.
As agreement was entered into for a sum of Rs. 60,000. The Apex Court held that condition of additional payment of Rs. 40 lacs would be too onerous and would almost amount to denial of specific performance, in the circumstances plaintiff was directed to pay to the builder a sum of Rs. 6,25,000.
12. When we consider the facts of instant case, a sum of Rs. 1,50,000 was paid out of Rs. 3,05,000, Rs. 1,55,000 remained to be paid to defendant. Suit was filed at the fag end of limitation in the year 2000, obviously suit was likely to take time in its decision and a sum of Rs. 1,55,000 has been retained by the plaintiff. It could not be disputed that there was rising trend of escalation of prices in the last ten years and judicial notice of it could also be taken. By now 10 years have passed and a balance sum of Rs. 1,55,000 has been retained by the plaintiff and decree for specific performance on proving agreement has not to be ordinarily declined as observed by Apex Court in Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. (supra).
13. We are not accepting the submission of Shri N.K. Patel, Senior Counsel that defendant should be asked to pay a sum of Rs. 5 lacs to the plaintiff instead of decree for specific performance, in our opinion that should be ordered in alternative we deem it appropriate that when the agreement was entered into, sum of Rs. 1,50,000/- was paid, and plaintiff had been occupying the accommodation as a tenant, he should be given right to purchase the property by settling the equities between the parties. We deem it appropriate to direct the plaintiff to pay the additional sum of Rs. 1,50,000, in addition to the amount due of Rs. 1,55,000 to the defendant and to get the sale deed executed, in our opinion, the balance amount of consideration would have doubled by now as per interest rates of bank, and the plaintiff has remained in occupation of the property it in the capacity of the tenant, thus, we deem it appropriate that plaintiff should urge out advantage of retaining the money of Rs. 1,55,000 to the defendant, on the basis of equity, justice and good conscience, we direct plaintiff to make payment of Rs. 3,05,000 as balance consideration and give an option to him to get the sale deed executed within a period of four months. In case he fails to get the sale deed executed by exercising his option in Executing Court within the aforesaid period, we accept in alternative as offered by defendant's Counsel Shri N.K. Patel on behalf of defendant to make payment of Rs. 5 lacs, defendant shall pay a sum of Rs. 5 lacs to the plaintiff, in case plaintiff exercises an option not to purchase the property as per the decree modified by this Court.
Thus, we affirm the decree passed by Trial Court with aforesaid modifications. However, we leave the parties to bear their own costs of the appeal.