Madhya Pradesh High Court
Kanhaiyalal Nankani vs Smt. Triveni Awasthi on 25 July, 2023
Author: Arun Kumar Sharma
Bench: Arun Kumar Sharma
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE ARUN KUMAR SHARMA
FIRST APPEAL No. 168 of 2017
BETWEEN:-
KANHAIYALAL NANKANI S/O. JETHANAND NANKANI,
AGED ABOUT 65 YEARS, R/O. 784/1, NAPIER TOWN,
SWAMI DAYANAND WARD, JABALPUR (MADHYA
PRADESH)
.....APPELLANT
(BY SHRI ROHIT TANEJA- ADVOCATE)
AND
1. SMT. TRIVENI AWASTHI W/O. BENI PRASAD AWASTHI.
2. SMT. MUKTA CHOURASIYA W/O. ASHISH
CHOURASIYA. BOTH ARE RESIDENT OF INDRAPURI
COLONY, GWARIGHAT ROAD, JABALPUR (MADHYA
PRADESH).
3. SANJAY SHRIVASTAVA S/O. LATE LAXMIKANT
SHRIVASTAVA, MANAGING DIRECTOR, OM SAI
PRAKASH CONSTRUCTION, R/O. PLOT NO. 5,
SANJEEVANI NAGAR, JABALPUR (MADHYA PRADESH).
.....RESPONDENTS
(SHRI SANJAY K. AGRAWAL - ADVOCATE FOR RESPONDENTS NO. 1 AND 2)
------------------------------------------------------------------------------------------------
Reserved on : 17-07-2023
Pronounced on : 25-07-2023
Signature Not Verified
Signed by: JITENDRA
KUMAR PAROUHA
Signing time: 7/25/2023
6:14:36 PM
2
------------------------------------------------------------------------------------------------
This appeal having been heard and reserved for order, coming on for
pronouncement this day, the court pronounced the following:
JUDGMENT
This appeal under Section 96 of the Civil Procedure Code has been preferred by the appellant / plaintiff being aggrieved and dissatisfied with the impugned judgment and decree dated 29.09.2016 passed by Eleventh District Judge, Jabalpur in Regular Civil Suit No.102-A/2015, whereby though the suit has been decreed but a decree for specific performance of contract has been declined.
2. Briefly stated facts of the case as projected in the plaint by the plaintiff are that on 26.07.2007 the appellant and the respondents entered into a sale agreement in writing in respect of House No.369 part of old and part of new House No.341 admeasuring 3848 Sq. ft. and part of old House No. 369 and part of new House No.341/1B and 341/1D admeasuring 4096 Sq. ft., total area being 7944 Sq. ft. @ Rs.2175/- per sq. ft. and on the same date, Rs.16 Lac was paid to the respondents in cash; Rs.2 Lac through account payee cheque No.2149 and Rs.2 Lac through Account Payee Cheque No.213807, thus Rs. 20 Lac was paid to the respondents on the date of agreement and further on 31.08.2007, 04.10.2007 and 26.10.2007 Rs.10 Lac, Rs.5 Lac and Rs. 5 Lac respectively were paid and further between October 2007 to 2008 Rs.2 Lac was paid in parts to the respondents, thus Rs.42 Lac have been paid to the respondents in lieu of the agreement. It was agreed between the parties that as an area of 4000 sq. ft. of the land to be sold was under an encroachment and as per the clause 2 of the said agreement the respondents were duly bound to remove the entire encroachment within 6 months, but the respondents failed to do the same and on Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 3 15.01.2008 the respondents in writing acknowledged the continuation of the said agreement, despite they failing to encroachment and further agreed to get the encroachment removed from the suit land.
3. There were continuous communication between the parties in respect of the execution of the sale deed and removal of the encroachment, but suddenly on 10.07.2008 respondents No.1 and 2 sent a legal notice to the appellant on the false pretext that the term of the agreement has expired in January 2008 and terminated the agreement calling upon the appellant to take back the 50% of the earnest money Rs.40 Lac which they acknowledged as received. They also threatened that now they are free to sale the suit property as per their wishes. In response to the said notice the appellant replied to them bringing about the true facts of the respondents not abiding the terms of the agreement and their written acknowledgment dated 15.01.2008 of the continuation of the agreement. In counter to the said reply the respondents sent a counter reply that as they are not able to abide to the term of removing the encroachment, hence the appellant be ready to purchase the suit land on "as is where is" basis within 7 days of the receipt of the reply. The appellant therefore, intimated the respondents through the reply, that it is not the agreed terms between the parties to sale the property with the encroachment, but submitted that as that time due to rainy season it was not possible to commence the removal of encroachment but the appellant is ready to get the encroachment remove within the period of 3 months and whatever expenses would be incurred towards the removal of the encroachment would be jointly borne/remitted by the balance amount of the sale deed.
4. In response to the appellant's proposal, the respondents for the first time forwarded a plea of the agreement of sale to be a "Contingent Contract" and falsely alleged that the appellant has refused to accept their officer and the agreement stands terminated. At the last the appellant sent a legal notice through his counsel to the respondents on 26.07.2010 calling upon them to get the sale Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 4 deed executed and registered in respect of the suit property within 15 days of the receipt of the notice. The same was received by them but vide reply dated 27.08.2010 the respondent declined to execute the sale deed. The appellant thereafter filed the suit.
5. In turn, after service of summon, the respondents appeared and filed their joint written statements denying the plaint averments on 23.08.2011.
6. The trial Court on the basis of the pleadings of the parties framed as many as five issues and recorded the evidence. On the basis of the material came on record, though the trial court decreed the suit of the plaintiff but declined a decree for specific performance of contract.
7. Before this Court it has been contended by learned counsel for the appellant / plaintiff that the judgment and decree passed by the trail Court is grossly erroneous and against the provisions of law as contained in Indian Contract Act and Specific Relief Act. The trial Court failed to consider that in a suit for specific performance of contract the granting of decree is a rule and refund or compensation is exception. Relying on Section 20 of the Specific Relief Act, the trial Court has held in para 18 of the judgment that granting the decree of specific performance is discretionary in nature but failed to appreciate that such discretion should not be arbitrary but sound and reasonable guided by the Judicial Principal. The trial Court failed to consider the sub section 4 of Section 20 of the Specific Relief Act, which clearly stipulates that the Court shall not refuse to any party specific performance of contract merely on the ground that the contract is not enforceable at the instance of the party, whereas in para 13 of the impugned judgment the trial Court has held that the respondents have themselves denied to abide by the terms of the agreement, hence refusing to grant the decree of specific performance the trial Court has committed illegality. The learned trial Court has heavily relied on Section 30 of Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 5 the Indian Contract Act, in declining to grant the decree of specific performance, but has not considered that the provision of Section 39 in its entirety which clearly says that when a party to the contract has refused to perform or disable himself from performing his promises in its entirety, the promisee "may" (emphasis supplied) put an end to the contract unless he has signified by words or conduct his acquiescence in its continuance. In this particular case the appellant has not put an end to the contract but has shown his readiness and willingness to get the sale deed executed, which fact has also been held by the trial Court clearly in its judgment in spite that has declined to grant specific performance.
8. It has been further argued that the learned trial Court in spite of holding all the issues in favour of the appellant has refused to grant decree only on the basis that the defendants have not fully performed their part as per condition No.6 with an intention to breach the contract, hence the contract in question has been frustrated, whereas it ought to have held that if the respondents committed a breach of one of the conditions of the contract and they have being at fault cannot profit by their default and merely awarding compensation to the appellant, the learned trial Court has given profit to the respondents. Learned trial Court relying on the Section 53 of the Indian Contract Act has held that as the respondents have declined to fulfill their promise and has prevented the appellant to perform his promise and as such the contract has become voidable at the option of the appellant. But failed to consider the essence of Section 53 that it speaks of an option to avoid the contract and a repudiation by one party cannot put an end to an obligation unless by the election the other party intends to treat it as cancelled and if the party so elects not to cancel the contract then he must be ready to get the contract executed and for that there should be his readiness and willingness and in this particular case the appellant was always ready and willing to perform his contract, which fact has also been held proven Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 6 by the learned trial Court, but in that condition also has declined to grant decree of specific performance of contract which is not sustainable in the eyes of law. Learned counsel further argued that learned trial Court has also not considered Section 54 of the Indian Contract in its correct perspective. The said section provides that the defaulting party must make compensation which other party may sustain by the non performance of the contract, but in the instant case the trial Court has compensated the respondents who are the default party. Placing reliance on P. Ramasubbamma v. V. Vijayalakshmi and Ors, AIR 2022 SC 1793; Sughar Singh vs. Hari Singh (dead) through LRs. And others, AIR Online 2021 SC 2607, prayed that the appeal be allowed.
9. Per contra, learned counsel for the respondents has opposed the aforesaid contentions and supported the judgment and decree passed by learned trial Court. Further contended that the time was of the essence of the contract as a specific period was mentioned for the deposit of the remaining sale consideration and in fact the consequences of the failure to deposit the remaining sale consideration have also been explicitly spelled out in the agreement to sale dated 26.07.2007. However, learned counsel for the respondents has supported the findings of the impugned judgment and decree and submitted that the learned trial court has not committed any illegality and perversity in passing the impugned judgment and decree which is based on proper appreciation of pleadings, documents and evidence available on record and submitted that the interference is not warranted in the well reasoned impugned judgment and decree. Further asserted that respondent no. 3 is the counsel of the respondents no. 1 and 2. The appellant has never paid an amount of Rs.42 lacs as advance while only Rs.4 lacs has been paid by him as advance and prayed that the appeal be dismissed.
Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 710. I have heard the learned counsel for the respective parties at great length and also perused the record and considered in depth the impugned judgment passed by the trial Court.
11. On perusal of the agreement as well as the record it is found that the agreement for sell was allegedly executed between the parties on 26.07.2007. The suit for Specific Performance of Contract was filed on 29.09.2010. The suit was thus apparently filed after the expiry of period of limitation. It is also apparent according to clause 2 of the agreement that there was a condition that encroachment shall be removed by sellers within six months from the date of agreement out of their own expenses and efforts and shall also hand over clear and peaceful possession to the purchaser. According to clause 6 of the agreement, sale deed to be executed within six months and seller will comply with all the conditions and execute the sale deed. According to clause 7 of the agreement, if the seller tries to linger on the sale deed then the purchaser may get the sale deed executed after completing all terms and conditions through Court. The defendant No. 1 Smt. Triveni Awasthi has candidly stated that she being woman could not get removed the encroachment from the property in question, because of which, the execution of the agreement was not possible. The suggestion given on behalf of defendant no.1 appears to be reasonable. Moreover, it was agreed between the parties that if seller fails to remove the encroachment then the purchaser will step forward in this regard. From the conduct of both the parties it is axiomatic that none of the parties was in a position to get the encroachment removed from the property in question and it is clear that both the parties were reluctant. Therefore, the learned trial Court has rightly declined to grant the decree of Specific Performance of Contract.
12. The Hon'ble Apex Court in the case of K.S. Vidyanadam Vs. Vairavan (1997) 3 SCC 1 has held that the decree for Specific Performance can be denied in case the suit is filed after the lapse of 2 -3 years but before limitation. The Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 8 same view has been recently followed by the Hon'ble Apex Court in the case of U.N. Krishnamurthy Vs. A.M. Krishnamurthy 2022 SCC Online SC 840. Since the suit was filed after the lapse of more than 3 years and 2 months from the date of agreement, the learned trial Court has rightly declined the decree for the Specific Performance and instead has directed for refund of amount along with interest @ 8%. The impugned judgment and decree is thus in consonance with settled principles for exercise of discretion under Section 20 of the Specific Relief Act, 1997.
13. Further, Clause 6 of the agreement specifically provided that the purchaser shall get the sale deed executed within 6 months. Time was thus essence of the contract. The appellant/plaintiff failed to get the sale deed executed within the stipulated time period of 6 months and therefore, also was not ready to perform his party of the contract as has been held by the Hon'ble Apex Court in the case of Azhar Sultana Vs. B. Rajamani (2009) 17 SCC 27. In the agreement dated 26.07.2007 it is nowhere mentioned that the land is under encroachment. Clause 2 of the agreement only provides that the vendor shall get the land vacated and deliver vacant possession to the vendee. The defendants were thus not required to take any steps for removal of encroachment and therefore, there was no breach of convenient on their part. The agreement was executed on a stamp paper of Rs.100 only and therefore, was not sufficiently stamped as provided under Section 35 of the Indian Stamp act, 1899 and therefore, was not executable.
14. The plaintiff in para 5.1 of the plaint as inserted by amendment claimed that advance possession of the land was handed over to him. As per Article 5 of the Schedule 1-A of the Indian Stamp Act, if possession of the property is delivered then same duty as a conveyance on the market value of the property is required to be paid on the agreement for sale. The alleged agreement to sale was thus not properly stamped and was required to be impounded under Section 33 Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 9 of the Act. It is the duty of the Court to impound instruments not duly stamped and therefore, even if no objection was taken by the defendants the learned trial Court ought to have impounded the document. The plaintiffs himself admitted that the alleged encroachment was removed and therefore, there was no breach of contract on the part of the appellant.
15. It is also evident from the affidavit dated 5.12.2014 filed by defendant no.1 Smt. Triveni Awasthi that dealing with regard to the property in question was done through brokers Sanjay Samaiya and Badkul and there was no meeting with the appellant and defendants. It has been specifically mentioned in the affidavit that she has not received Rs.42 lacs as alleged by the appellant. She only received Rs.4 lacs only. The agreement was terminated by the defendants vide notice dated 10.07.2008 and the suit was filed after lapse of more than 2 years and therefore, also the appellant is also not entitled for a decree of Specific Performance. The plaintiff in his plaint has not pleaded that he was having sufficient money to pay the balance sale consideration which itself shows that the plaintiff was not ready to get the sale deed executed and was only trying to buy time for arranging funds. The plaintiff himself admitted that the defendants have constructed house and are residing thereon. Since the defendants are using the property for their own residential purpose, therefore, it would be inequitable to grant the decree of Specific Performance. The plaintiff in his cross-examination has admitted that no amount was paid to vendors and the same was only paid to the middle man. The learned trial Court has thus rightly declined the decree of Specific Performance of agreement. In view of the aforesaid discussion and in the facts and circumstances of the case, so far as the reliance placed on the decisions by learned Advocate appearing on behalf of the appellant / plaintiff, are concerned, none of the decisions shall be applicable to the facts of the case on hand; and more particularly the findings recorded by the learned trial court, this court also confirms. Apart from above, it would be Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM 10 profitable to mention here that the plaintiff himself in the suit has not sought any alternative relief that if execution of agreement to sale is not possible due to any legal obstacle, then the respondents be directed to refund of the amount which was paid at the time of agreement to sale.
16. Ex consequenti, the first appeal fails and is hereby dismissed. The judgment and decree dated 29.09.2016 passed in R.C.S. No.102-A/15 by Eleventh District Judge, Jabalpur, is hereby confirmed. Needless to say that interim order, if any granted earlier, stands vacated. However, in the facts and circumstances of the case, there shall be no order as to costs. Decree be drawn accordingly.
17. A copy of this judgment along with records be sent back to the trial court for information and its compliance.
(ARUN KUMAR SHARMA) JUDGE JP/-
Signature Not Verified Signed by: JITENDRA KUMAR PAROUHA Signing time: 7/25/2023 6:14:36 PM