Bombay High Court
Sambhaji Laxmanrao Pawar vs Abdul Wahed S/O. Rahmatullah on 7 June, 1994
Equivalent citations: 1995(1)BOMCR608
JUDGMENT G.R. Majithia, J.
1. First Appeal No. 180 of 1986, Sambhaji s/o Laxmanrao Pawar v. Abdul Wahed s/o Rahmatulla, is directed against the judgment and decree dated August 28, 1986 passed by Civil Judge, Senior Division, Nanded in Special Suit No. 44 of 1984 decreeing the suit of the plaintiff-respondent for specific performance of agreement to sell dated November 28, 1981, as modified on March 31, 1982 in respect of shop bearing Gram Panchayat No. 398, situated at Naigaon Bazar, District - Nanded.
2. Abdul Wahed Rahmatullah - plaintiff respondent (hereafter referred to as the Vendee) filed a suit for specific performance of agreement to sell dated November 28, 1981 in respect of shop bearing Gram Panchayat No. 398, situated at Naigaon Bazar, District - Nanded against Sambhaji s/o Laxmanrao Pawar - defendant appellant (hereafter referred to as the Vendor) inter alia pleading that the vendor agreed to sell the shop for a consideration of Rs. 1,00,051/-; the sale price was to be paid in two instalments; Rs. 50,000/- was to be paid till January 15, 1982 and the remaining was to be paid at the time of registration of the sale deed, which was to be executed in May, 1982. Rs. 5,000/- was paid as earnest money. The shop was in possession of the tenant M/s. Vasundhara Seeds and it was to be got vacated. A writing dated March 30, 1982 was executed by the vendor stating that he would be paid an additional amount of Rs. 10,000 in case he failed to deliver vacant possession and the vendee would be entitled to recover damages in the sum of Rs. 10,000 if he failed to execute the sale deed. On the suggestion of the vendor, the vendee agreed to get the sale deed registered for a consideration of Rs. 49,000/-and the remaining sale price was to be paid otherwise. Cheque bearing No. AD/2 095443 drawn on State Bank of Hyderabad, Branch at Naigaon Bazar was drawn by the vendee in favour of the vendor. A stamp paper was purchased on April 12, 1982 and was given to the deed writer for drafting the sale deed. The sale deed was presented before the Sub-Registrar for registration but the vendor scored out his signature and left the Sub-Registrar's office. A notice was sent to the vendor and in response thereto, the vendor informed the vendee's counsel that he was ready and willing to perform his part of the contract. The vendee informed the vendor's counsel that he will be available at the Sub-Registrar's office on October 2, 1982 for getting the sale deed registered but the vendor did not turn up.
3. The vendor in the written statement, did not deny the execution of the agreement but inter alia pleaded that a binding contract had not come into existence between the parties and that the terms of the contract dated March 30, 1982 were vague and uncertain. The conduct of the vendee disentitles him to the equitable relief of specific performance. He also pleaded that he had made improvements on the suit property.
4. On the pleadings of the parties, the following issues were framed :
(1) Does plaintiff prove that the defendant agreed on 28th November, 1981 to sell the suit house for the consideration of Rs. 1,00,051/- to the plaintiff?
(2) Does he prove that firstly Rs. 50,000/- was to be paid until 15th January, 1982 and the remaining amount of Rs. 50,000/- was to be paid by the end of May 1982 at the time of registration of the sale deed?
(3) Does he prove that, that time the defendant was to vacate the tenant Vasundhara Seeds from the suit premises?
(4) Does he prove that he paid Rs. 5,000/- as earnest money at the time of agreement?
(5) Does he prove that defendant had changed his mind and got increased by Rs. 10,000/- on 30th March, 1982?
(6) Does he prove that thereafter the defendant had suggested to execute the sale deed in the name of somebody else?
(7) Does he prove that defendant further suggested that the consideration of Rs. 49,000/- only should be mentioned in the sale deed?
(8) Does he prove that the defendant had appeared in the Sub Registrar's office on 1st April, 1982 he signed the sale deed in execution thereof and thereafter he scratched his signature there only?
(9) Does plaintiff prove that he was always ready and willing to perform his part of contract?
(10) Does defendant prove that he has made development worth Rs. 30,000/- in the suit house and this Court is not entitled to the relief of specific performance?
(11) Does defendant prove that plaintiff had failed to perform his part of the contract and so the plaintiff is not entitled to the equitable relief?
(12) Is plaintiff entitled to the specific performance of the contract?
(13) In the alternative, is he entitled to recover Rs. 17,095/- from the defendant?
(14) What order and decree?
5. Issue No. 1 was answered in favour of the vendee and it was held that the vendor agreed to sell the suit property for us Rs. 1,00,051/- to the vendee. Issue No. 2 was answered in favour of the vendee and it was held that Rs. 50,000/- was to be paid on or before January 15, 1982 and the remaining amount was to be paid at the time of registration of the sale deed. Issue No. 3 was answered in favour of the vendee and it was held that the vendor was to get the suit property vacated from the tenant M/s. Vasundhara Seeds. Under Issue No. 4, it was held that Rs. 5,000/- was paid as earnest money. Under Issue No. 5, it was held that the sale consideration was increased by Rs. 10,000/- on March 3, 1982. Under Issue No. 6, it was held that the vendor had suggested to get the sale deed executed in favour of some other person other than the vendee. Under Issue No. 7, it was held that the vendor suggested that Rs. 49,000/- should be mentioned as sale consideration in the sale deed. Under Issue No. 8, it was held that the vendor signed the draft sale deed on April 1, 1982 and thereafter scored his signature. Under Issue No. 9, it was held that the vendee was ready and willing to perform his part of contract. Under Issue No. 10, it was held that the vendor had failed to prove that he had made any improvement on the suit property. Under Issue No. 11, it was held that the vendor had failed to prove that the vendee was not willing to perform his part of the contract. Under Issue No. 12, it was held that the vendee was entitled to the specific performance of the agreement to sell. Under Issue No. 13, it was held that this issue did not survive in view of the finding under Issue No. 12. On ultimate analysis, the suit for specific performance of the agreement to sell was decreed.
6. Indisputably, the following facts stand proved on record:
The vendor executed an agreement to sell dated November 28, 1981 in respect of shop bearing Gram Panchayat No. 398, situated at Naigaon Bazar, District - Nanded in favour of the vendee for a sale consideration of Rs. 1,00,051/- to be paid in two instalments;
Rs. 50,000/- was to be paid till January 15, 1982 and the remaining amount in May 1982 when the sale deed was to be registered;
Rs. 5,000/- was paid as earnest money at the time of execution of the agreement; vacant possession of the shop was to be delivered at the time of execution of the sale deed; on March 30, 1982 the vendor executed a document stating that in case he delivered vacant possession to the vendee, he would charge Rs. 10,000/- over and above the sale price already fixed in the agreement of sale and in case, he failed to execute the sale deed, the vendor would be entitled to claim Rs. 10,000/- as damages; the vendor wrote a better to one Hanmantrao to prepare a draft sale deed in respect of the disputed shop for Rs. 50,000/-; on April 12, 1982, a draft sale deed was prepared; it recites that the consideration of Rs. 49,000/- was paid through cheque bearing No. AD/2095443 drawn on State Bank of Hyderabad, branch at Naigaon Bazar in favour of the vendor; a notice dated July 9, 1982 was served by the vendee through his counsel Shri B.S. Bilolikar on the vendor calling upon to execute the sale deed in terms of the agreement to sell; in reply thereto, by registered notice dated September 20, 1982, the vendor through his counsel Shri S.N. Hake, informed the vendee's counsel that he had executed two sale deeds in favour of the vendee and signed the draft sale deed dated April 12, 1982 in routine manner and asked the vendor to produce the second sale deed but he was told that the suit property was sold under one sale deed and the question of second sale deed did not arise and at this juncture, he scored out his signature on the draft sale deed. But he failed to prove this assertion. The notice further recites that:
the vendor was still ready and willing to execute the sale deed in favour of the vendee in terms of the agreement to sell but at a sale proceeds of Rs. 1,05,051/-;
on receipt of the notice dated September 20, 1982, the vendee through his counsel Shri B.S. Bilolikar, informed the vendor through his counsel Shri S.N. Hake to execute the sale deed at Biloli in the office of the Sub Registrar, Biloli on October 2, 1982;
the vendor did not execute the sale deed. The vendee has been ready and willing to perform his part of the agreement and agreed to comply with certain additional conditions suggested by the vendor.
7. The learned Counsel for the appellant did not assail the correctness of these facts. He submitted thus :
The original agreement to sell dated November 28, 1981 stood superseded by the second agreement dated March 30, 1982. The second agreement provided that in case the vendor failed to execute the sale deed, the vendee would be entitled to liquidated damages in the sum of Rs. 10,000; thus the vendee could not ask for specific performance of the agreement to sell.
In support of his submission, he relied upon M.L. Devender Singh v. Syed Khaja, .
8. The first point which arises for determination is whether the agreement dated November 28, 1981 was substituted by the second agreement dated March 30, 1982. The vendee in para No. 5 of the plaint stated thus :
"That thereafter the defendant changed his mind and suggested that the plaintiff should pay Rs. 10,000/- on the ground that the vacant possession of the shop was not possible to him and gave a writing again, stating that either the plaintiff should pay Rs. 10,000/- more than the agreed price of Rs. 1,00,051/- or the defendant would pay Rs. 10,000/- as damages. Accordingly a writing in that behalf was again given on 30-3-1982 by defendant in favour of the plaintiff. Actually, such addition to the original price was contrary to contract dated 28-11-1981, even then the plaintiff accepted the same and showed his readiness to pay the amount of Rs. 1,05,051/-"
The vendor in the corresponding paragraph of the written statement replied as under :
"That, para 5 of the plaint conceals on own admission of the plaintiff, original contract because of variance being asserted by him. Writing of date 30-3-1982 also does not create contractual relationship or rights under it against each other. So called theory of new substituted contract dated 30-3-1982 being vague, uncertain on Terms and Conditions of settlement, is not enforceable and valid. Assuring correctness of the same, the plaintiff can claim only damages as compensation as said term was agreed and is a adequate relief to him. It was alternately conceded by the plaintiff and as the situation stands contract as alleged though disputed being impossible to implement, he should have claimed damages and specific performance right is not available to the plaintiff."
9. The specific allegation was made in para No. 5 of the plaint that the vendor asked for an additional sum of Rs. 10,000/- over and above the sale price fixed in the agreement. It was also stated that if the vendor failed to execute the sale deed, the vendee would be entitled to damages in the sum of Rs. 10,000/- and that the vendee had agreed to the increase in price and in these circumstances, the document dated March 30, 1982 was executed by the vendor. These specific averments made in the plaint were not contraverted in the written statement. Rules 3, 4 and 5 of Order 8 of C.P.C. form an integrated Code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non-compliance. The written statement must deal specifically with each allegation of fact in the plaint and when the defendant denies any such fact, he must not do so evasively but answer the point of substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary. Apart from this, a reading of the document dated March 30, 1982 in unequivocal terms, suggests that it was not executed in substitution of the earlier agreement. Only a stipulation regarding the increase in the price was incorporated in this document. The submission of the learned Counsel that the earlier agreement dated November 28, 1981 was substituted by the agreement dated March 30, 1982, is thus devoid of merit.
10. Section 10 of the Specific Reliefs Act, 1963, (for short, the Act) reads thus :
"10. Cases in which specific performance of contract enforceable---Except as otherwise provided in this chapter, the specific performance of any contract may, in the discretion of the Court, be enforced -
(a) when there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done; or
(b) when the Act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation---Unless and until the contrary is proved, the Court shall presume -
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases :
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff."
It deals with the cases in which specific performance of the contract can be enforced. The presumption arising under Explanation, appended to the section, in case of contract for immovable property, always is that the damages are not adequate relief. This presumption is not rebutted merely by the fact that the parties had provided for recovering the damages by the buyer. A party to the contract may some time be entitled to damages not only in lieu of but in addition to the contract of specific performance. The effect of the presumption created by the Explanation is that in a suit to enforce a contract to transfer the property the Court will grant specific performance as a matter of course, provided of course, the vendee has been, upto the date of decree, ready and willing to perform his part of contract. The presumption arising under the Explanation, however, is not absolute but is rebuttable one and may be rebutted when it is found that the breach of contract can be adequately relieved by compensation in money. It would be noticed that in the Explanation, it is clearly mentioned that unless and until the contrary is established, the Court will presume that the breach of contract to transfer immovable property cannot be adequately relieved by compensation in money and that being so, decree for specific performance of the agreement is the only relief which can be granted where the vendor has not brought anything on record to show that the vendee can be suitably compensated by way of liquidated damages.
11. In the instant case, the vendor has failed to rebut the presumption, and in fact no such foundation was laid in the written statement or any proof at the trial. The vendee has been throughout willing to perform his part of the contract and in fact, agreed for the additional price demanded by the vendor to avoid breach of the agreement. The ratio of the decision rendered in M.L. Devender Singh's case (supra) does not help the vendor but it squarely covers the case of the vendee. In that case, the facts were as under :
Devender Singh - defendant appellant entered into an agreement of sale with Syed Khaja - respondent on September 27, 1962 and agreed to sell the property for Rs. 55,000/-. By a subsequent agreement dated October 9, 1962, he agreed to sell the property for a sale consideration of Rs. 60,000/-. After executing the agreement to sell dated 19-10-1962, he sold the property to others for a sale consideration of Rs. 70,000/-. Syed Khaja brought a suit for specific performance of the agreement of sale. The suit was decreed by the trial Judge as well as by the High Court. The High Court granted a certificate of fitness under Articles 132 and 133 of the Constitution of India and the matter was taken to the Apex Court. The Apex Court upheld the judgment and decree of the High Court. In the Apex Court, submission was made that the parties had stipulated damages in the event of breach of the agreement and the presumption under the Explanation to section 10 of the Act was rebutted and the vendee was not entitled to a decree for specific performance, of the agreement. The submission was repelled. While interpreting the provisions of sections 10, 20 and 22 of the Act, the Apex Court observed thus :
"A reference to section 22 of the old Act, (the corresponding provision is section 20 of the Act of 1963), would show that the jurisdiction of the Court to decree specific relief is discretionary and must be exercised on sound and reasonable grounds "guided by judicial principles and capable of correction by a Court of appeal". This jurisdiction can not be curtailed or taken away by merely fixing a sum even as liquidated damages. We think that this is made perfectly clear by the provisions of section 20 of the old Act (corresponding to section 23 of the Act of 1963) so that the Court has to determine, on the facts and circumstances of each case before it, whether specific performance of a contract to convey a property ought to be granted.
The fact that the parties themselves have provided a sum to be paid by the party breaking the contract does not, by itself, remove the strong presumption contemplated by the use of the word "unless and until the contrary is proved". The sufficiency or insufficiency of any evidence to remove such a presumption is a matter of evidence. The fact that the parties themselves specified a sum of money to be paid in the event of its breach is, no doubt, a piece of evidence to be considered in deciding whether the presumption has been repelled or not. But, in our opinion, it is nothing more than a piece of evidence. It is not conclusive or decisive."
12. Some observations made in the body of the judgment, while discussing the relevant provisions of the statute, can not be read out of context as suggested by the counsel. A decision is an authority for what it actually decides. A reference can be usefully made to the following observations of the Supreme Court in the case of State of Orissa v. Sudhansu Sekhar Misra, :
"A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. It is not a profitable task to extract a sentence here and there from a judgment and to build upon it."
13. For the reasons stated above, the appeal fails and is dismissed with no order as to costs in this Court.