Bombay High Court
Jayshri Rameshchandra Bhore vs Arvind Narayanrao Tarekar And Others on 21 January, 2022
Author: S.M. Modak
Bench: S.M. Modak
1 SA-574-2004 (J).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
SECOND APPEAL NO. 574/2004
WITH
CIVIL APPLICATION NO. 266 OF 2010
Mrs. Jayshri w/o Rameshchandra Bhore,
age 67 years, occupation housewife,
resident of 145, Vivekanand Nagar,
Nagpur - 440015.
.....APPELLANT
(Ori. Plaintiff)
(On R.A.)
...V E R S U S...
1) Arvind s/o Narayanrao Tarekar,
occupation business, resident of Five
Star Housing Society, 17, Farmland
Layout, Behind Gurudwara,
Ramdaspeth, Nagpur.
(Deleted as dead, L.Rs. brought
on record as 1(a) to 1(e).
1(a). Smt. Anuradha wd/o Arvind Tarekar,
aged about 54 years,
occupation Household,
1(b). Shri Sanjay s/o Arvind Tarekar,
aged about 30 years,
occupation business,
1(c). Shri Avinash s/o Arvind Tarekar,
aged about 26 years,
occupation business,
1(d). Shri Vikas s/o Arvind Tarekar,
aged about 26 years,
occupation business,
1(e). Mrs. Archana w/o Madhukar Malokar,
aged about 32 years,
occupation Household,
resident of Dhantoli, Nagpur.
2 SA-574-2004 (J).doc
Nos.1(a) to 1(d) residents of 17, Farmland
Layout, Ramdaspeth, Nagpur.
2) Mrs. Vanmala w/o Manohar Kamdi,
aged major, occupation service,
resident of "Ashwaroop",
Plot No.2, Sneh Nagar, Nagpur.
...RESPONDENT
(Ori. Defendants)
(On R.A.)
-------------------------------------------------------------------------------------------
Shri H.D. Dangre, Advocate for the Appellant
Shri Amit Khare, Advocate for the Respondents.
-------------------------------------------------------------------------------------------
CORAM :- S.M. MODAK, J.
RESERVED ON :- 04 OCTOBER, 2021.
PRONOUNCED ON :- 21 JANUARY, 2022.
ORAL JUDGMENT
1. Plaintiff is vendor/owner of the suit property whereas defendants are the purchasers. They are in possession of the suit property. Plaintiff's suit for recovery of possession was decreed by the trial court. There were the issue of defendants in possession towards part performance and whether the agreement for sale had become unenforceable (on account of non-complaicne of the provisions of Income Tax Act from the side of vendor). The issue of the part performance was answered in favour of the defendants. But the suit was decreed by the trial court as the agreement for sale has become non-enforceable. When the defendants preferred first appeal, the findings on part peformance (in favour of 3 SA-574-2004 (J).doc defendants) were confirmed. The first appellate court come reversed the findings on "whether the agreement had become non-enforcable" and hence, the suit cannot be dismissed. Now, this second appeal is preferred by the plaintiff. It was admitted on the following substantial questions of law :-
1 Whether the appellate Court was justified in extending the protection of Section 53-A of the Transfer of Property Act to the respondents when they never showed their willingness and readiness to perform their part of the contract?
2 Whether the judgment of the Appellate Court is sustainable in view of the impossibility of perfecting title to the suit plot in favour of the respondents?
2. The judgment dated 11th June, 2004 challenged before this court is delivered by the Court of Ad-hoc Additional District Judge, Nagpur. By the said judgment, the plaintiff is aggrieved because the appeal filed by the defendants was allowed by the first Appellate Court. The First Appellate Court reversed the judgment of the trial Court and dismissed the suit of the plaintiff.
It be will be material to consider the facts discovered from the pleadings and evidence.
FACTS
3. The said suit was filed for recovery of possession from two defendants and for declaration that the termination of the 4 SA-574-2004 (J).doc agreement for sale at the instance of plaintiff is legal. The plaintiff is the owner of the suit land bearing Plot No.6 from Khasra No.27/1 admeasuring 465 sq. mtrs. situated at Nagpur (hereinafter referred to as the 'suit plot'). The said plot was owned by Pragati Housing Cooperative Society Ltd. of which the plaintiff is a member.
4. The dispute in between the parties is not about execution of the said agreement, but the dispute pertains to fulfillment of the terms and conditions of the said agreement. The agreement was of the year 1982 but the suit was filed in 1994 inasmuch as 12 years afterwards.
5. Neither the plaintiff filed the suit containing similar reliefs prior to 1994 nor the defendants filed the suit for specific performance at all. The plaintiff's version is based upon breach of terms of the agreement for sale by the defendants.
6. The breaches are as follows :-
a) Not paying full consideration of Rs.1,00,380/-
inspite of long period,
b) Not obtaining following NOC/permissions :-
(i) income tax clearance certificate,
5 SA-574-2004 (J).doc
(ii) NOC from Pragati Society and
(iii) clearance from U.L.C. authorities.
c) Erecting a structure (which is being used for running school) without the permission of the local authorities and without her own permission.
Whereas, the defendants' version is--
a) payment of entire consideration of
Rs.1,00,380/-,
b) Responsibility to obtain above said
NOC/permission falls on the shoulder
of plaintiff and infact she has failed and hence estopped from blaming the defendants.
7. Other area of dispute is about "handing over possession of the suit plot by the plaintiff to the defendants". The plaintiff's claim is that the defendants took forcible possession. Whereas, both the defendants' claim that possession was delivered voluntarily by the plaintiff herself on the date of execution of agreement i.e. 30th December, 1982. On this background in a suit for possession at the instance of vendor, the defendants have attempted to protect their possession over the suit plot and they have taken recourse to the provisions of Section 53-A of the Said Act.
6 SA-574-2004 (J).doc
8. When the defendants committed breach of agreement on the ground mentioned above, the plaintiff cancelled the agreement vide notice dated 25 April, 1993 and asked for recovery of possession. Defendants have neither responded nor complied with the suit notice. In fact after filing of a suit, defendants replied on 20 March 1995 to the suit notice. The defendants have claimed specific performance from the plaintiff. Hence, plaintiff filed the suit containing two reliefs--
a) Declaration that termination of the agreement
at her instance is legal,
b) And for recovery of possession.
9. Both the parties have adduced oral and documentary evidence before the trial Court. The evidence of the plaintiff consist of following:
1) Oral Evidence given by her husband Rameshchandra Bhore-
Documentary Evidence a. Exh.28 Power of Attorney.
b. Exh.29 Suit notice dated 25 November, 1993.
c. Exh.30 Unclaimed envelope.
Following documents were shown during cross-examination-
i Exh.38 Suit agreement.
7 SA-574-2004 (J).doc
ii. Exh.39 Receipt for Rs.10,000/- for cheque dated 17
August, 1983.
iii. Exh.41 Receipt for Rs.9,000/- dated 21 June, 1984.
iv. Exh.42 Receipt for Rs.12,000/- (Rs.2,000/- by cash and
Rs.10,000/- by cheque dated 14 November, 1983). v. Exh.43 Notice dated 20 March, 1995 sent by the defendants to plaintiff asking for execution of sale- deed.
vi. Exh.44 Acknowledgment.
2) Oral evidence of Balasaheb Jadhav at Exh.49 - Manager of Pragati Cooperative Housing Society.
i. Exh.50 NOC dated 7 June, 1993 given by Society for sale of plot in favour of the plaintiff.
3) Oral evidence of Anil Bhivgade - Clerk from Sub-Registrar office Exh.51.
i. Exh.45/2 Price index for stamp duty calculation. The evidence of the defendants consist of following- i. Evidence of defendant No.1-Arvind Narayanrao Tarekar.
ii. Exh.60 Counterfoil for cheque drawn in favour of the plaintiff dated 4th August, 1986 for Rs.5,000/-. (containing signature of plaintiff's husband) iii. Exh.61 Receipt for Rs.3,380/- dated 5th October, 1986.
8 SA-574-2004 (J).doc Findings of the trial court
10. In nutshell, the trial Court concluded that-
a) Possession was not taken forcibly.
b) That payment was proved by the defendants.
(There was a dispute for payment of part consideration of only Rs.8,380/-)
c) Granted protection to the defendants under Section 53-A of the Transfer of Property Act.
d) The agreement was declared as null and void (as contravening the provisions of Income Tax Act). So, net result was "the suit was decreed".
FIRST APPEAL
11. Even though findings on some of the issues by the Trial Court were in favour of the defendants, they have preferred a first appeal because there was a possession decree against them. It is predominantly on the basis of findings on the issue "whether the agreement was void and unenforceable". At the same time the plaintiff had chosen to prefer a cross objection because the findings on following issues:- (a) about protection under Section 53-A of the Transfer of Property Act; (b) about payment of Rs.8380/- was against her. On this background the First Appellate Court framed certain points.
9 SA-574-2004 (J).doc
12. Findings of the Appellate Court
(a) the First Appellate Court held that payment of Rs.8380/- was not proved by the defendants (findings reversed);
(b) the First Appellate Court did not agree with the plaintiffs' grievance that "defendants were not entitled to protection of part performance" and;
(c) the same time the First Appellate Court agreed to the submission of the defendants /appellants that "agreement cannot be said to be void and unenforceable";
(d) Accordingly, the findings of the Trial Court on that issue were set aside.
(e) Ultimately, the appeal was allowed and the suit was dismissed.
13. This judgment is challenged by the plaintiffs. On this background, this Court has framed following substantial questions of law on 24th February, 2005 and for the reasons narrated hereinafter, our findings are as follows :-
No. Substantial Question of Law Finding
i. Whether the appellate Court was justified in In the
negative.
extending the protection of Section 53-A of the Transfer of Property Act to the respondents when they never showed their 10 SA-574-2004 (J).doc willingness and readiness to perform their part of the contract?
ii. Whether the judgment of the Appellate In the affirmative.
Court is sustainable in view of the But in view of impossibility of perfecting title to the suit finding on question no.1, plot in favour of the respondents?
the judgement is not sustainable.
Discussion
14. I have heard learned Advocate Shri Dangre for the appellant/plaintiff. Learned Advocate Shri Khare has chosen to file written notes of arguments and has chosen not to argue orally. I have perused them. So, prior to deciding above substantial questions of law, it will be material to consider the findings recorded by both the Courts below. For better understanding they are summarized in a tabular form as follows:
Issue/points Findings by Trial Findings by First Court Appellate Court About taking forcible Issue no.1 & 3 Point no.1 possession by taking In the negative. In the negative.
disadvantage of urgent Plaintiff has not
need of plaintiff and proved it.
defendants being
trespassers.
Completion of structure Issue no.2 No separate point
on the suit land by In the affirmative. framed (but
defendants without Plaintiff has proved observations are
consent of plaintiff it. there)
Entitlement to Issue no.4
11 SA-574-2004 (J).doc
declaration as to In the affirmative in _____________
cancellation of the favour of plaintiff
agreement.
Entitlement to possession Issue no.5 Point no.7
In the affirmative in In the negative
favour of plaintiff
Damages and means Issue nos. 6 & 7 As suit was
profits In the affirmative dismissed no
direction.
Not paying balance Issue no.9 Point no.2
consideration of In the negative - In the affirmative.
Rs.8380/- by defendants defendants have Defendants have not
proved about said proved said
payment (wordings payment.
are not proper.
Agreement dated Issue no.10 Point no.3
30/12/1982 null, void In the affirmative In the negative
and unexecutable
Protection under Section Issue no.11 Point no.4
53-A of T.P. Act to In the affirmative. In the affirmative
defendant Defendants have
proved it.
Suit within limitation Issue no.12 Point no.6
In the affirmative In the affirmative
Frustration of contract No specific issue Point no.5
In the negative.
Plaintiff has not
proved it.
15. So, when the findings by both the Courts below are perused simultaneously we may find that -
a. Possession taken forcibly
b. Defendants entitled to protection under Section 53-
A of the T.P. Act
16. There is consensus amongst both the Courts below.
Whereas, on the point of payment of part consideration of Rs.8380/-, the Trial Court answered in favour of the defendants 12 SA-574-2004 (J).doc whereas, the First Appellate Court answered against defendants. Similar difference of opinion can be found out in respect of nature of agreement as void. The Trial Court gave a finding in favour of the plaintiffs whereas the First Appellate Court had given a finding against the plaintiffs. That is how, as there is concurrent findings, this Court has to decide whether the findings "as to entitlement to protection of part performance" is perverse or not and is there any scope open for this Court to interfere? So also, this Court has to consider whether the First Appellate Court was right in reversing the findings as to "agreement being null, void and unenforceable"
& reversing the findings "about payment of Rs.8,380".
ABOUT RETENTION OF POSSESSION UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT
17. It is necessary to consider the provisions of Section 53-A of the Said Act and the law laid down in the judgments relied upon by the plaintiff and the evidence adduced by both the parties.
PROVISIONS OF SECTION 53-A OF TRANSFER OF PROPERTY ACT
18. In fact, the owner is entitled to ask the purchaser to return the possession of immovable property. It is founded on the principles laid down in Indian Contract Act. If possession is given 13 SA-574-2004 (J).doc on the basis of assurance that the transferee will fulfill his set of promises and in future if the transferee fails to perform his set of promises, it is but natural that the transferor will expect the transferee to deliver back the possession. However, in certain contingencies, the transferee can retain the possession. It is based on equitable principles. It is statutorily recognized by the provisions of Section 53-A of the Said Act. It debars the transferor to take back the possession. However this fetter on the rights of transferor is not uncontrolled one. This protection will come into play only when certain prerequisites are fulfilled at the instance of transferee.
19. When the transferee has not filed a suit for specific performance (either it is time barred or for any reason), whether such transferee can take up a plea on the basis of the provisions of Section 53-A of the Transfer of Property Act is answered by the Hon'ble Supreme Court in the case of Shrimant Shamrao Suryavanshi & Anr Vs. Pralhad Bhairoba Surywvanshi & Others 1. It is observed that law of limitation is applicable to filing of suits/other proceedings. It is observed that "Limitation Act does not extinguish a defense but only bars the remedy." The provisions of Section 53-A of Transfer of Property Act do certainly 1 (2002) 3 SCC 676 14 SA-574-2004 (J).doc comes to the rescue of the defendants. At the same time, it will be material to consider how those provisions are interpreted in the judgments relied upon by the appellants.
20. Judgements relied upon by the Appellants 1 Ranchhoddas Chhaganlal Vs. Devaji Supdu Dorik & Others2.
There was oral agreement for sale of land for Rs.17,000/-. Respondent was in possession and the suit was filed for recovery of possession by the appellant for failure to pay balance consideration. Respondent transferee could not perform his part of the contract. Hence, decree for possession was passed and it was confirmed by Hon'ble Supreme Court. 2 Mohan Lal (deceased) through his LRs. Vs. Mirza Abdul Gaffar and Another3.
In this case, possession of land was obtained as per the agreement. There was a suit for specific performance by the purchaser against vendor was dismissed and it attained finality. On this background, the vendor filed a suit for recovery of possession. It was held that when purchaser lost the suit for specific performance, it would be inconsistent and incompatible with his right to remain in possession under the agreement. That 2(1997) 3 SCC 584 3(1996) 1 SCC 639 15 SA-574-2004 (J).doc was a time when part performance was considered as only shield and not as a sword (para 5). It was further held that transferee must plead and prove his readiness and willingness to perform his part of contract so as to unable him to retain his possession of immovable property. Except vaguely denying that he is not ready and willing to perform his part, he had not specifically pleaded it (para 6). There was emphasis on ingredients of Section 16(c) of the Specific Relief Act, 1963. It creates a personal bar to ask for specific performance if he failed to prove readiness and willingness.
3 Patel Natwarlal Rupji Vs. Kondh Group Kheti Vishayak & Another4.
The transferee in possession on the basis of unregistered agreement for sale filed a suit for declaration that land is not liable to attachment and sale for recovery of debt due from his landlord. The prayer was not allowed on two grounds. One section 53-A cannot be invoked to seek such declaration and on facts, the agreement was not considered as a genuine transaction, but was considered as sham and fraudulent document to defeat the rights. The transferee was a privy to the fraud. There was emphasis on the principle that a person who seeks equity must come with clean hands.
4(1996) 7 SCC 690 16 SA-574-2004 (J).doc 4 Ram Kumar Agrawal & Another Vs. Thawar Das (Dead) through L.Rs.5.
There was emphasis on not pleading and proving readiness and willingness and it was one of the ground which is considered as a personal bar to relief under Section 16(c) of the Specific Relief Act. Except the performance of those terms which were prevented or waived by the defendant, the plaintiff must aver and prove about his readiness and willingness. The plea as to payment was not raised bonafidely or was not abandoned. A person who falsely claims to have paid Rs.2,000/- and attempts to prove his willingness to pay Rs.7,000/- cannot take the benefit of Section 53-A of the Transfer of Property Act.
5. Mool chand Bakhru & Another Vs. Rohan & Others6.
In order to take benefit of Section 53-A, there must be meeting of mind discernible from the terms of the agreement written contract. Agreement must come into existence before possession given to proposed vendee. The letter suggests oral agreement and it cannot be said to be a written agreement. Accordingly, on the basis of oral agreement, protection under Section 53-A was denied.
5(1999) 7 SCC 303 6(2002) 2 SCC 612 17 SA-574-2004 (J).doc
6. D.S. Parvathamma Vs. A. Srinivasan7.
There were two versions. One is landlord and second is vendor purchaser. Following were considered as the essential features of equitable doctrine of part performance--
a. Transferee taken in possession.
b. Part performance not available against the transferee
for consideration who had no notice of the contract or part performance thereof (only available to first transferee) (para 6).
c. Either transferee has performed or willing to perform his part of the contract.
7. Rambhau Namdeo Gajre Vs. narayan Bapuji Dhotra (Dead) through L.Rs.8.
Benefit under Section 53-A can be taken only by transferee and cannot be taken against the 3 rd person with whom there is no previty of contract.
7(2003) 4 SCC 705 8(2004) 8 SCC 614 18 SA-574-2004 (J).doc Plaintiff purchased the land from the respondent. plaintiff has paid entire consideration and he was put in possession. Furthermore, plaintiff executed an agreement for sale in favour of the appellant and he has accepted entire consideration and appellant was put into possession. Respondent filed a suit for possession of land from the appellant. There was no previty of contract between the appellant and the respondent and hence no plea of part performance is available to appellant.
8. A Lewis & Another Vs. M.T. Ramamurthy & Others9 There was unregistered agreement for sale dated 4 October, 1982 and there was registered sale-deed dated 23 rd December, 1982. Plaintiff filed a suit on the basis of registered sale-deed. Plaintiff was not having notice of agreement for sale dated 4 th October, 1982. The appellant was denied benefit of part performance. For the reason that he has kept quiet and remained passive without taking steps.
9. FGP Limited Vs. Salesh Hooseini Doctor & Another10.
There were two agreements on 16 July, 1981. One is for tenancy and second is for selling the flat for Rs.5 lakhs. The 9(2007) 14 SCC 87 10(2009) 10 SCC 223 19 SA-574-2004 (J).doc transferee/tenant company filed a suit for specific performance, whereas the landlord filed a suit for eviction. Appellant company was denied benefit of Section 53-A of the Transfer of Property Act as they have remained silent for 10 years and failed to show when he came into possession of the property. The suit for specific performance was filed after suit for eviction was filed. It was held that benefit under Section 53-A cannot be upheld.
10. Vasanthi Vs. Venugopal (Dead) through L.Rs.11.
Plea under Section 53-A was held available even though transferee has not filed suit for specific performance within limitation. Still transferee has to prove essential prerequisites to avail of the benefit of Section 53-A of Transfer of Property Act. The following were held to be essential prerequisites -- (a) written contract for consideration and its terms are clearly ascertainable with certainty, (b) taking possession by transferee in part performance and (c) doing some act in furtherance of the contract and readiness and willingness.
11. Shyam Narayan Prasad Vs. Krishna Prasad & Others12.
Plea of part performance was not raised in a written statement. The importance of pleading to give intimation of the 112017 4 SCC 723 12(2018) 7 SCC 646 20 SA-574-2004 (J).doc case to other side was emphasized so as to enable the court to determine what is really an issue. Relief was not granted to the party without pleading. Plea of Section 53-A can succeed only when it is pleaded that he has taken possession in part performance of the contract (para 23).
12. Seshasayee Steels Private Limited Vs. Assistant Commissioner of Income Tax Company Circle VI(2). Chennai13.
As per the agreement, vendor gave permission to purchaser to start construction on the land. Licence was given to another to develop the land. It was held that such licensee cannot be said to be in possession within the meaning of Section 53-A of the Transfer of Property Act. It denotes control over the land and not merely annual physical possession. Juridical possession is required and no licensory occupation is recognized.
13. Harish Kashinath Mane Vs. Haribhau Adkoji Sapate14. Necessary conditions for invocation of Section 53-A of the Transfer of Property Act were laid down. They are--
a) There must be contract.
13(2020) 14 SCC 774 142010 (4) Mh.L.J. 817 21 SA-574-2004 (J).doc
b) It must be in writing.
c) Terms necessary to constitute, the transfer can be ascertained with certainty (para 11).
d) Transferee must be in possession in part performance.
e) Transferee must have done some act in furtherance of the contract.
f) He must have performed and willing to perform.
14. Shivram Kisan Gunjal died, through L.Rs. Radhesham s/o Shivram Gunjal & Others Vs. Ramesh Vishwanath gunjal & Others15.
There was a clause of failure, forfeiture of earlier payment if remaining amount of Rs.9,000/- was not paid within three months. There was no evidence about payment of remaining amount within three months. Failure to prove performance of part of the contract was considered as a factor to deny benefit of part performance (para 23).
152015(5) Mh.L.J. 623 22 SA-574-2004 (J).doc
15. Yuvrani Hansa Devi Vs. Zafar Farooq Vohra & Another reported16.
There was an emphasis on transferee to show willingness to perform and he has undertaken some action in part performance. They were not proved.
16. Deorao s/o Balaji Bhoyar (D) through L.Rs. Vs. Ganpat s/o Punaji Bawne (D) through L.Rs.17.
Defendant transferee was held not entitled to retain possession. He was denied equitable relief of specific performance due to failure to prove continuous readiness and willingness.
17. Shobha Janardhan Masram Vs. Ganpat Gulabrao Thakre18.
There were concurrent findings about default on the part of petitioner to perform her part of contract. Hence, benefit was denied (para 18).
162012(1) Mh.L.J.302 172014(4) Mh.L.J. 820 182015(5) Mh.L.J.271 23 SA-574-2004 (J).doc
18. Navinchand Khushalcand Mutha Vs. Banaji Damu Sonde (since deceased) per L.Rs. Anjani Bhausahed Gagre & Others19.
Following ingredients were held necessary--
a) Written contract.
b) Taking of possession.
c) Doing some act in furtherance.
d) Readiness and willingness.
Observations in AIR 1982 SC 989 were reproduced-- Acts preliminary to contract would be hardly of any assistance - in ascertaining whether they were in furtherance of the contract - anything done in furtherance of the contract - postulates pre- existing contract and acts done in furtherance thereof - acts anterior to contract or merely incidental to contract would hardly provide any evidence of part performance.
19. Ajabrao marotrao Radake Vs. Bhalchandra Vitthalrao Deshpance20.
192016(5) Mh.L.J. 682 202017(3) Mh.L.J. 850 24 SA-574-2004 (J).doc Defendant could not discharge the burden of proving of readiness and willingness by making payment of balance amount of agreed date and hence, benefit of part performance was denied.
20. Ghanshyam Deoram Gaikwad Vs. Samshon John Gaikwad & Another reported21.
The impugned agreement to sell was not on sufficient stamp paper and not registered agreement to sell executed and by separate document possession handed over. In the written statement, no specific plea of benefit under Section 53-A was taken. The provisions of Section 53-A were amended on 24 September, 2001. Further condition that agreement must be registered one was omitted. Objection that documents were on insufficient stamp paper while exhibiting it was not raised. In view of Section 35 of Bombay Stamp Act, plaintiff in appeal cannot take that plea (para
15). By amendment "contract though required to be registered has not been registered" has been omitted. Corresponding amendment in Section 17 of the Indian Registration Act "agreement to sell with handing over possession compulsorily registerable" was made. Both Exhs. 30 & 31 have come into existence after amendment to Section 53-A of the Transfer of Property Act and Section 17 of the Registration Act. Therefore, it was mandatory to 212020(2) Mh.L.J. 451 25 SA-574-2004 (J).doc register them. No explanation was offered. Hence, plea under Section 53-A was held not available (para 15).
21. After reading above judgments, the following principles are culled out--
a) Transferee before asking for the benefit must fulfill his part of the contract.
b) Readiness and willingness must be pleaded and proved.
c) It is equitable relief and it cannot be granted to person who comes with unclean hands.
d) Even if the transferee falsely claims that he has paid some of money, but failed to prove at the trial stage, he cannot be said to be ever ready and willing.
e) Oral agreement to sell cannot be termed as an agreement - reduced into writing which is prerequisite.
f) There has to be privity of contract between a person against whom right is claimed and the person who is claiming such right.
g) Keeping quiet and passive by transferee without taking effective steps disentitles for protection.
h) Even though suit for specific performance to be filed by transferee is time barred, still such transferee is entitled to avail of benefit of protection.
26 SA-574-2004 (J).doc
i) The possession of transferee must be as per the agreement and not otherwise.
j) Juridical possession is contemplated for Section 53-A and not licensory possession.
k) The transferee has to prove payment of entire consideration before availing of the benefit. Without proof of readiness and willingness, protection cannot be granted. (It depends upon terms of the agreement)
l) Possession handed over on the basis of unregistered agreement. Protection not available. This is after the amendment of 2001.
22. Above principles were laid down on the basis of the facts of that case. Now, it will be material to consider how both the Courts below have appreciated the evidence and whether there is any perversity in the said findings.
Submission of Appellant
23. According to learned Advocate Shri Dangre, when the question of readiness and willingness to perform the promises by the transferee arises, the law does not differentiate in between payment of entire consideration and not paying a meager consideration. He submitted that though the first Appellate Court has reversed the findings of the trial Court about the payment of Rs.8,380/- by the defendants, while giving a final finding the first 27 SA-574-2004 (J).doc Appellate Court committed wrong. According to him, there are two areas in respect of which the defendants have not complied with the terms of the agreement and hence they cannot be said to be ready and willing. Those areas are -
a) failure to prove payment of remaining consideration of Rs.8380/-. According to him, once the defendants have pleaded about payment of that amount, it is their responsibility to prove it by adducing reliable evidence.
b) Failure to comply -
i) the various provisions of Income Tax Act.
ii) to obtain NOC from competent authority under Urban Land Ceiling Act.
iii) to obtain permission from Pragati Co-
operative Housing Society.
24. Further he submitted that by stretch of interpretation of the terms of the agreement, it can be said that the defendants/transferee get uncontrolled right to use the suit plot as per their own sweet will. According to him title is not transferred and till then the defendants atleast are not entitled to construct a building and using it for school purpose and that too by the Sanstha with whom admittedly there is no agreement. He emphasized that this act of defendants (allowing Sanstha) dis-
28 SA-574-2004 (J).doc entitles them to seek equitable reliefs based on the provision of Section 53-A of the Transfer of Property Act. He also emphasized on the approach of the first appellate court in not considering an important facet of Section 53A of the Transfer of Property Act.
25. "The transferee has performed or willing to perform"
is one of the most important prerequisite of Section 53-A of Transfer of Property Act. However, this obligation is added by the phrase "his part of contract". So it must be obligation on the transferee as per the contract. It is for the transferor to show that (promises of which she is complaining of breach) the acts are part of contract. For this reason the evidence need to be looked into.
Failure to prove payment of remaining consideration and failure to obtain NOC/permission
26. The total consideration as per the agreement is Rs.1,00,380/-. There is no dispute that plaintiff has received Rs.92,000/-. The dispute pertains only to the payment of Rs.8380/-. The Trial Court believed the defendants case about payment of the said amount. Amongst the two defendants, defendant no.1 Arvind only entered into witness box. He relied upon following documentary evidence. -
a) Exhibit 60- counterfoil for receipt of a cheque for Rs.5000/-
29 SA-574-2004 (J).doc
b) Exhibit 61- receipt for Rs.3380/-.
27. According to the trial Court, these documents are sufficient. Whereas, the First Appellate Court considered these documents as insufficient. In order to ascertain whether there is a perversity in the finding, this Court has perused the reasoning. They are as follows:-
a) On exhibit 60, the husband of the plaintiff has signed as a token for receipt of a cheque. The date of the cheque was 04th August, 1986.
Whereas the date of the receipt is 04 th July, 1986. The First Appellate Court observed that "there was no case put up by defendants about issuance of post dated cheque".
b) There was a certificate issued by the banker certifying issuance of the cheque in favour of the plaintiff. It was filed as per the list at Exhibit 90. The first Appellate court observed "necessary witness has not been examined by the defendants".
c) Any entry in the passbook showing that the money has been debited to the account of the defendants is not produced.
d) About Exhibit 61, it was observed that, it was produced after completion of evidence of plaintiff. Plaintiff attempted to disprove this receipt by making request to the Court to recall her husband, so also an application for appointment of an expert went in vain, because, plaintiff was not allowed to do those things. Even her attempt of challenging the order before this court by filing revision was unsuccessful.
30 SA-574-2004 (J).doc
28. If these reasons are perused, we can certainly say that the conclusion is drawn on sound reasoning, by applying the settled principles of law about appreciation of evidence and hence it appeals to the conscious of any prudent man. This Court does not find any perversity in those findings. This court confirms the findings that "defendants have failed to prove payment of consideration of Rs.8380/-".
29. There is an argument on behalf of defendants that those findings against them does not make their case weak because - time to pay those amounts have not come as per the agreement. So it will be material to consider the relevant clauses of the agreement.
Clause 2 about payment of consideration reads as follows :-
(a) Rs.50,000/- to be paid on the date of agreement;
(b) Rs.50,380/- to be paid on the date of sale deed.
Clause No.8 of the agreement lays down the following period for execution of sale deed-
(a) On or before 30th June, 1983
OR
(b) within one month from procuring necessary
Income Tax certificate. Wherever may be later.
31 SA-574-2004 (J).doc
30. On reading all the terms reproduced above, we may find that payment of consideration is in two installments. First installment is on the date of execution of sale deed. There is dispute about payment of Rs.8,380/- towards consideration (total consideration is Rs.1,00,380/-). The undisputed/proved payment of consideration received is as follows :-
a) Rs.50,000/- on the date of agreement in question
b) Rs.42,000/- thereafter from time to time.
--------------
Rs.92,000/- Total Rs. 8,380/- disputed.
Obtaining NOC/Permissions :
31. It is also clear that remaining consideration has to be paid at the time of execution of sale deed. It is also clear that sale deed is made time bound and also correlated to obtaining NOC/permission and amongst them which is later. Now evidence on that aspect needs to be looked into.
32. The terms above referred are not in dispute. It is also true that the date of execution of sale-deed i.e. 30 th June, 1983 have expired long back. It is very well true that none of the parties have pleaded that the compliance for obtaining certificate, NOC has been done by either of the party. Both the parties are pointing 32 SA-574-2004 (J).doc out blame against each other for its non-compliance. Plaintiff contend that it was the responsibility of the defendants whereas defendants contend that it was the responsibility of the plaintiff. On this background when we have read the relevant clauses of the agreement, we may find that it was the responsibility of the vendor/ the plaintiff. The relevant clauses are as follows:
(a) Clause no.9: obtaining income Tax clearance Certificate
(b) Clause no.10- obtaining permission from Pragati Society for transfer of plot.
(c) Clause no.13- giving notice under Section 29 of ULC Act to competent authority.
33. All these clauses succinctly lay down that it is the responsibility of the vendor to do necessary compliance. She has not pleaded that she has done that. In fact, she puts a blame on the defendants. There is no basis for that.
34. Failure to comply with various provisions of Income Tax Act is also the ground taken by the plaintiff in order to rely upon the doctrine of frustration. There is a reliance on the following provisions of Income Tax Act-
33 SA-574-2004 (J).doc Provisions of Income Tax Act
a) Section 230 -A - It prohibits the sub registrar from registering the document(which requires compulsory registration) unless certificate from assessing Officer is obtained.
b) Section 269 AB - It says about reducing into writing by way of statement- of every transaction wherein possession of immovable property is taken as referred to in Section 53-A of T.P. Act. (Rule 48 DD of Income Tax Rules, 1962 lays down the format of the statement and it should be in form No.37 - EE).
c) Section 269 P- It prohibits the sub registrar from registering a document of transfer unless a statement containing particulars is verified.
d) Section 269 UC- It mandates about executing an agreement within four months prior to intended date of transfer wherein value of the property exceeds Rs.5,00,000/-
e) Section 269 UD- It empowers the appropriate authority to purchase the property by the Central Government in respect of which statement is filed under Section 269 UC of the TP Act.
f) Section 269 UE- It says about vesting of property in Central Governmetn when an order is made under Section 269 UD of the T.P. Act.
g) Section 269 UF & 269 UG- it says about manner of payment of consideration by the Central Government.
h) Section 269 UH- It says about re-vesting of property in the transferor when Central Government fails to deposit the amount of consideration.
34 SA-574-2004 (J).doc
i) Section 269 UL- It prohibits the Sub registrar from registering the document of transfer of immovable property exceeding Rs.5,00,000/- unless appropriate authority has given no objection.
j) Section 276- It lays down punishment for fraudulent removal of the property.
Finding by the Courts below
35. The trial Court has observed that the provisions of Income Tax Act are special in nature and they will override the general provisions of Transfer of Property Act. According to the trial Court as defendants have not complied with the obligations laid down in above mentioned Sections, the agreement has become void and unenforceable. Whereas, the First Appellate Court has reversed those findings and given wheightage to the terms of the agreement and responsibility on the vendor/the plaintiff. According to First Appellate Court, if the plaintiff has failed to comply with those requirements, certainly she is at fault and hence cannot make grievance about frustration of the agreement. The trial court has declared the agreement as "void and unenforceable". It is the on account of non-compliance of the provisions of Income Tax Act, whereas the first appellate court reversed those findings and also that relief. This court feels that the appellate court is right.
35 SA-574-2004 (J).doc
36. When we saw the reliefs in the plaint, we may find (a) relief of declaration that termination of the agreement is legal and
(b) for possession - are sought. Relief of declaration as to termination is founded on "non-compliance of the terms of the agreement". It is based on certain provisions of the Indian Contract Act. Whereas, the relief based on frustration of contract does also finds place in Indian Contract Act. But it stands on different footing. At the same time, it is true that the plaintiff has not asked for the relief of frustration of contract. Plaintiff has not sought for declaration "that the agreement has become non- executable". So the first appellate court has properly denied that relief and corrected the mistake committed by the trial court. I will give reasons for endorsing that view.
Doctrine of Frustration
37. The First Appellate Court has also framed a point No.5 as to "whether there is frustration of the agreement". It is true that Section 56 of the Indian Contract Act lays down the contingencies wherein the agreement can be said to be void.
The first category is an agreement to do an impossible act. Second category comes into play wherein contract becomes impossible to perform or unlawful to perform - such contract becomes void.
36 SA-574-2004 (J).doc
38. The First Appellate Court has rightly refused this grievance and overturned findings given by the Trial Court in that behalf. This Court agrees with the reasoning given by the First Appellate Court for arriving of that conclusion. There are two reasons for that. One is the terms of the agreement are very clear and unambiguous. Those terms cast an obligation on the vendor to do the necessary compliance. Secondly, the provisions quoted above from the Income Tax Act lays down how the agreement in the form of a statement is to be entered into. Even, the format of that statement is given as per the Rules. No doubt, both of the parties have not furnished that statement containing necessary particulars before the Income Tax Authorities. Statement simply by the transferee is not sufficient. It has to be filed in by both the transferor and transferee. There is no freedom to give the information in a manner other than the form prescribed. Whereas, there is no form prescribed for entering into a sale-deed or agreement for sale as contemplated under Section 54 of the T.P. Act.
39. These provisions of the Income Tax Act are included under the Chapter XX-C dealing with purchase by Central Government of immovable property in certain cases of transfer. The intention is to safe guard the economic interest of the State.
37 SA-574-2004 (J).doc There is no intention to regulate transfer of immovable properties under general law.
40. The issue about correctness of the order passed by the appropriate authority under the Income Tax Act thereby, treating the form as defective was challenged before the High Court of Delhi in case of Ansal properties and Industries Ltd. Vs. Appropriate authority and others 1999 Indian Law Reports Vol.236 page 793. It was observed that :-
"the provisions of Chapter XX-C of the Income Tax Act can make an inroad into the general law relating to the Transfer of Property and Contract Act only to the extent specifically provided for and not beyond. The only penalty which the parties to private agreement suffer by not complying with the provisions of Chapter XX-C where its applicability is that deed of transfer pursuant to the agreement should not be registered. However, the rights and obligation incurred by the parties to a private agreement do not fall to the ground and are not avoided"
(page no.809)."
41. This view has been affirmed by the Hon'ble Supreme Court in case of DLF Universal Ltd. Vs. Appropriate authority and another 2000 Indian Law Reports Vol.243 page 730 . The agreement which parties enter mutually is described as a private agreement. Whereas the agreement in the form of statement as 38 SA-574-2004 (J).doc per Income Tax Act is described as proforma agreement. In nutshell, it means just because there is non-compliance of the provisions of Income Tax by either of the side, still the relationship between the parties will be governed by the provisions of private agreement and of general law. So when the transferor/plaintiff has failed to fulfill her contractual obligations, she cannot get rid of the contract by contending that the mandatory provisions of Income Tax Act were not followed.
42. The First Appellate Court has considered these observations. The plaintiff has not relied upon any observation contrary to the above observations. So, it will be difficult to digest that plaintiff can succeed in seeking declaration that the agreement is void and unexecutable on account of non-fulfillment of the provisions of the Income Tax Act. So, this Court concur with the findings recorded by the First Appellate court in that behalf.
Failure to obtain NOC as per Urban Land Ceiling Act and Failure to obtain NOC of Society
43. The First Appellate court has held the plaintiff responsible for non-compliance of some of the terms of the agreement. Two of them are Clause No.10 (obtain permission from Pragati Society) and Clause No.12 (giving notice under 39 SA-574-2004 (J).doc Section 26 of the ULC Act to the competent authority). Even though, plaintiff through her husband has blamed the defendants for non-compliance with those requirements, above two referred clauses of the agreement bestows responsibility on the plaintiff- vendor herself.
Evidence of witness
44. On the point of compliance of the procedure for obtaining NOC from the society plaintiff has examined Balasaheb Jadhav- Manager of the said Society. His evidence is relevant on two aspects. One is about compliance of the procedure for obtaining NOC of the society and secondly through him copy of NOC granted by the society in respect of mutating the suit plot in the name of the plaintiff (At Exhibit 50) was brought on record. He has tried to explain the procedure which is to be followed when new member is to be admitted and the amount of transfer fee to be paid. It is true that none of the witness has said that any application is made to the society either by the transferor by the transferee but, the fact remains and it is that it is whose responsibility? Ultimately, as per the agreement it is responsibility of the transferor. Hence, she cannot blame the defendants/transferees for not obtaining NOC of the society and thereby disentitling them from pleading this ground in order to damage the plea of readiness and willingness pleaded by the 40 SA-574-2004 (J).doc defendants. The First Appellate Court (in paragraph no.29) has reproduced those clauses and rightly rejected the grievance of the plaintiff "to blame the defendants".
Evidence on the point of valuation
45. It was a grievance put-forth on behalf of the plaintiff that valuation of the suit land has increased up to Rs.22,00,000/- and she will be required to pay capital gain tax and as such the agreement is incapable of execution. In order to prove the valuation, the plaintiff has examined Anil Bhivgade- Clerk from Sub Registrar Office. He has quoted the Government valuation prevailing in the area in which suit land is situated. He has also produced price index for the purpose of valuation for stamp duty. The area of the plot is 465 sq. mtrs. and rate per sq. mtrs. is Rs.4795/-. So, the total valuation comes to Rs.22,00,000/- whereas according to the defendant no.1 Arvind, the valuation is Rs.10,00,000/-. The Trial Court has referred to Section 269 UC and Section 269 UL of the Income Tax Act (paragraph No.41). It prescribes the limit of Rs.5,00,000/- and above. The plaintiff has made a grievance that there is increase in valuation in order to substantiate her ground that agreement has become impossible to perform and as such void.
41 SA-574-2004 (J).doc
46. The Trial Court has accepted this as one of the ground for declaring the agreement as unenforceable, whereas the First Appellate Court has not accepted it. According the First Appellate Court whatever may be valuation ultimately it was the responsibility of the plaintiff to obtain NOC from Income Tax authorities. The clause in the agreement is very well clear. It was the responsibility of the plaintiff to obtain the NOC and no one has prevented her from complying with her part of the obligation. As she had not come with the case that her obligation has been complied with, she cannot take the aid of provisions of Income Tax Act. There is no perversity in the findings of the First Appellate Court.
Not Exchanging draft of sale-deed by defendants -
47. At attempt is made by pointing out that the defendants have not exchanged the draft of the sale-deed to the plaintiff and it is required to be submitted before the appropriate authorities under the Income Tax Act. This point is discussed by the First Appellate Court in para no.31 at the end I am afraid that this contention can be accepted. It is for the reason that there is no communication brought on record on behalf of the plaintiff to show that she had asked draft of sale-deed to be executed. If such draft is required for submitting before Income Tax authorities and 42 SA-574-2004 (J).doc when it is a responsibility of the plaintiff to make compliance as per the provisions of the Income Tax Act, plaintiff cannot simply blame the defendants about not submitting draft of sale-deed. She ought to have taken positive steps in that direction. There is no evidence to that effect and cannot be accepted.
CONCLUSION
48. For the above discussion, it can certainly be said that the first appellate court was right in rejecting the grievance of the plaintiff that, "defendants have failed to comply with the terms of the agreement relating to obtaining NOC/permissions". If that is so, the question of execution of sale deed will not come into question. Corollary question of paying remaining consideration of Rs.8,380 will also not come. Still learned Advocate for plaintiff rest his argument from different perspective. If the defendants take up a plea that they have paid full consideration, they have to prove it and if not proved they have to suffer. This argument will be answered in later part of judgment.
Grievance about carrying out construction without permission and running a school
49. It is true that there are two contingencies mentioned in the agreement about handing over possession. One is on the 43 SA-574-2004 (J).doc date of execution of the agreement possession is to be handed over and second is possession is to be handed over on the date of execution of sale deed. Normally, any such agreement does not contain such alternative clause. Learned Advocate Shri Dangre has emphasized on such alternate contingencies of handing over possession. He also made a grievance about taking forcible possession. The grievance of forcible possession has been denied by the both the Courts below. So also both the Courts below are consensus on the point of handing over possession on the date of agreement (not at the time of execution of sale deed). It is true that from the agreement none of the clause is pointed out about possible use of the land by the defendants once they are put in possession. Here, the plaintiff has got two grievances -
a) carrying out construction without permission,
and running a school without permission
b) running a school without permission
c) and allowing third person to run a school with
whom there is no privity of contract with the plaintiffs.
50. According to the learned Advocate Shri Dangre, these are the two factors which dis-entitles the defendants from securing equitable relief of part performance. To buttress his submission as 44 SA-574-2004 (J).doc to who can get the benefit of part performance, he put emphasis on following judgments.
a) Rambhau Namdeo Gajre Vs. Narayan Bapuji Dhotra (Dead) through L.Rs., Reported in (2004) 8 SCC
614.
b) Seshasayee Steel Private Limited Vs. Assistant
Commissioner of Income Tax Company
circle VI (2) Chennai reported in (2020) 14 SCC
774. It will relevant to consider findings given by both the Courts below on this aspect.
Findings by the Trial Court
51. The Trial Court has framed an issue about "carrying out construction without permission". It was answered in affirmative. Though there is no issue about running of a school, we may find observations in the judgement of the Trial Court that construction was done without obtaining permission from NMC and of the plaintiff. However, the Trial Court found out different category of trespass and held that plaintiff had not proved that defendants are trespassers (para no.24).
Findings by the First Appellate Court
52. There is no specific point framed about construction being carried out without consent. However, we may find the 45 SA-574-2004 (J).doc discussion in para no.19 and para no.35. There is finding in no unclear terms that temporary shade admeasuring 600 sq. ft was constructed without permission of the plaintiff and defendant no.1 commenced a primary school. The First appellate court had also given a categorical finding that construction was carried out by defendant no.1 without permission of NMC and of plaintiff. The First Appellate Court went to the extent of observing that if the construction is illegal the concerned authorities can take an action. About carrying out the school, it has been observed that defendant no.2 is a Secretary of Mahatma Bahuuddeshiya Shikshan Sanstha (para 35) and it is not the contention of anybody about capacity of said Sanstha that is lincesee or permissive possession. There is emphasis on defendant no.2 being party to the suit.
53. Learned Advocate Shri Dangre submitted that when the construction is admittedly illegal and when school is being run by an Institution with whom the plaintiff has never entered into an agreement, such defendants cannot be granted equitable relief of part performance. To buttress his submission he emphasized on the principle laid down in case of Patel Nartwarlal Rupaji as referred above. In the written notes of argument filed on behalf of the defendants, there is also emphasis on the findings given by the 46 SA-574-2004 (J).doc Courts on both these aspects and there is a submission that they need not be interfered with in a second appeal involving limited scope for interference.
54. Unfortunately I am unable to agree with the submission made on behalf of the respondents as well as I am unable to subscribe the view expressed by both the Courts below. In fact, both the Courts below have not interpreted the provisions of Section 53-A of the T.P. Act in a proper spirit.
55. It is true that agreement for sale does not create any interest in the property sought to be purchased as contemplated under Section 54 of the T.P. Act. Once the transferee becomes a full owner on transfer of title, he has got full right to deal with the property as he wants. Till the time title is transferred, there are restrictions on the transferee to enjoy the property sought to be purchased. Already there is a dispute about defendants being put in possession of the suit land. However, this grievance is not accepted by both the Courts below and this view has been subscribed by this Court. The defendants have not pointed out any clause from the agreement to the effect that what will be the use of the land by the defendants once they are put into possession. So, we have to go by the test of prudent man. It suggest that the transferee (who was put in possession) will make minimum use of 47 SA-574-2004 (J).doc the land put in his possession. Everyone knows that if the construction has to be made which is going to be used for a school requires permission from the local authority. So, we can certainly attribute knowledge on the part of defendants about necessity of permission from local authority as well as of the owner prior to making any construction.
56. No doubt, it has come in evidence that plaintiff has not objected to the construction made without permission except by way of issuing suit notice dated 25/11/1993 at Exhibit 29. So, inaction on the part of the plaintiff till sending of a notice whether it can be said to be waiver on her part? From one point of view, it can be said that plaintiff has not protested about the two unsanctioned acts (of making construction and running a school) but, from another point of view can we justify the act of carrying construction without obtaining permission of NMC? The answer will be certainly no. When the permission is required from NMC, the act of carrying construction cannot be justified in the eyes of law. At the same time it is very well true that both the courts have concurrently held that "suit is filed within limitation". This court does not find those findings perverse on any reason.
57. The approach of both the courts below is certainly wrong. When the issue of illegal construction had come before the 48 SA-574-2004 (J).doc Court (not at the instance of local authority) but at the instance of plaintiff, it was wrong on the part of the Courts below to leave that issue for the authorities to take action. This is more true when the Court is dealing with grant of equitable relief of part performance.
58. It will be material to consider the observations of the Hon'ble Supreme Court in case of Patel Natwarlal (supra) as referred above on the point of equitable doctrine of part performance. It reads as follows :-
"Though the doctrine of part performance embodied in Section 53-A of the Act is part of equitable doctrine in English Law, Section 53-A gives statutory right which is available to the transferee for consideration in possession of the property held under the contract. In terms of the section, so long as the transferee has done and is willing to perform his part of the contract or, in other words, is always ready to abide by the terms of the Contract and has performed or is always ready and willing to perform his part of the contract, the transferee is entitled to avail of this statutory right to protect his possession as a shield but not as a sword. The right to retain possession of the property rests on the express provisions of the Act and on his compliance thereof. A person who pleads equity must come to the court with clean hands and he alone is entitled to the benefit of his section. The section does not create a right or title in the 49 SA-574-2004 (J).doc defendant. It merely operates as a bar to the plaintiff to assert his title. The transferor is barred from enforcing his rights other than those expressly provided by the contract. The section, therefore, imposes a bar on the transferor, when the Conditions mentioned in the section are fulfilled by the transferee, and section bars the transferor to enforce his rights against such transferee or person deriving right, title and interest from such transferee."
59. There is one more angle. It has been held in case of Rambhau Namdeo as referred above that there should be privity of contract in between the transferor and the transferee who is claiming the benefit of part performance. The subsequent transferee in possession has claimed the protection of part performance when there was no privity of contract in between him and the original owner. The owner enters into an agreement for sale with a purchaser with possession and the said purchaser entered into an agreement for sale with the third person/defendant. In a suit for possession the defendant was held not entitled to claim benefit of part performance.
60. Whereas, in case of Seshasayee Steels Private Limited as referred above there was emphasis on possession of the transferee being juridical possession only. There was an agreement 50 SA-574-2004 (J).doc to develop the property and permission was given to start construction on the land. Whereas such person in turn permitted another to undertake the construction. Such lincensee was held not to be entitled to protection of part performance. What is required, is control over the land and mere actual physical possession is not sufficient. The relevant observations find place in paragraph 14. It reads thus :
"The doctrine of part performance is rooted in equity and provides a shield of protection to the proposed transferee to remain in possession against the original owner who has agreed to sell to the transferee if the proposed transferee satisfies other conditions of Section 53-A. It operates as an equitable estoppel against the original owner to seek possession of the property which was given to the proposed vendee in part-performance of the contract. The appellant being a third party and not a privy to the transaction on which the estoppel rests can take no advantage of it."
61. If we apply above principles to the case before us we may find that Mahatma Bahuuddeshiya Shikshan Sanstha is running a school in the building constructed by defendant no.1. It has come in the evidence that defendant no.2 is a Secretary of that Sanstha. It is a matter of record that both the defendants are prospective purchasers mentioned in the agreement. But, the First 51 SA-574-2004 (J).doc Appellate Court observed that nothing has come on record about the status of that Sanstha that is to say licensee or permissive possessor. The First Appellate Court is right in the said observation. At the same time, the First Appellate Court has forgotten to consider the principles as to burden of prove. The plaintiff has pleaded about running a school by the defendants. She may not be aware as to in what capacity they are running the school. It is a matter of record that defendant no.2 who claims to be the Secretary of that Sanstha had chosen not to enter into witness box. The defendant no.1 during cross-examination has stated that he is not concerned with the said Sanstha and in fact defendant no.2 is the Secretary of that Sanstha. Under these circumstances, it was obligatory on the part of the defendant no.2 to give evidence and to clarify what is the nature of that Sanstha. The Sanstha may be a public trust imparting education.
62. There is a separate civil application for issuing directions to defendants to deposit certain sum of money (as they are getting grants from the Government). The copy of the agreement is also annexed. This has been denied by the defendants. So if that Sanstha is a public trust, no doubt it is legal entity separate from that of defendant no.2. There is a reason to believe that defendant no.2 has concealed those material facts 52 SA-574-2004 (J).doc from the Court. It is also true for defendant no.1 who allowed to run a school by Sanstha of which defendant no.2 is a Secretary. He has not clarified about the relationship in between him and that Sanstha. It is but natural that he must have consented for running of the school of that Sanstha.
63. For the above discussion, this Court holds that Mahatma Bahuuddeshiya Shikshan Sanstha is in possession of the school building and that Sanstha has not entered into an agreement with the plaintiff. And whereas defendant no.1 has allowed that Sanstha to use the construction on the said plot and this conduct dis-entitled him from claiming equitable relief. The defendant no.2 has also dis-entitled himself from claiming equitable relief. These aspects were not considered by the First Appellate Court. Said findings can certainly be said to be perverse which were arrived at by overlooking the provisions of law. Both the courts below have forgotten to consider that the defence of part performance is based on equity. Transferor can be denied relief only when the contenders of the theory of part performance had come with the clean hands. Both the defendants have committed above positive acts and disentitled themselves.
53 SA-574-2004 (J).doc
64. Hence, this Court concludes that the plaintiff though is not entitled to declaration that the agreement is void and unenforceable, the plaintiff certainly succeeds in disentitling the defendants from claiming protection of part performance. This conclusion is drawn mainly for two reasons. One is- taking a false plea about payment of consideration of Rs.8380/-. The observations in case of Ram Kumar Agrawal are relevant :-
"No basic finding of fact recorded by the courts below has been reversed much less any reason assigned for taking a view to the contrary still the finding on the question of readiness and willingness to perform the contract which is a mixed question of law and fact has been upset. Plea under Section 53A of the Transfer of Property Act which again involves a mixed question of law and fact has been allowed to be urged and upheld by the High Court though there is no foundation for the same laid in the pleadings of Thawar Das and though the plea was not raised either before the Trial Court or before the First Appellate Court even at the time of hearing. Before us also at the time of hearing of the appeals the learned counsel for the respondent Thawar Das found it very difficult indeed to demonstrate availability of material on record whereon the findings as to readiness and willingness for performance of his part of the contract on the part of Thawar Das and as to his possession being available to be protected under the plea of part performance emanating from Section 53A of Transfer of Property Act could be sustained. The suit for specific performance filed in the year 1969, i.e, nearly nine years after the expiry of four years from 18.7.1956, the date of the agreement, was hopelessly barred by delay and laches. We do 54 SA-574-2004 (J).doc not propose to enter into the question of limitation though the plea that the suit for specific performance was barred by time was specifically raised by Phool Chand before the Trial Court. It is statutorily provided by Section 16(c) of the Specific Relief Act, 1963 that to succeed in a suit for specific performance of a contract the plaintiff shall aver and prove that he has performed and has always been ready and willing to perform the essential terms of the contract which were to be performed by him other than the terms the performance of which has been prevented or waived by the defendant. In the facts and circumstances of the case raising of the plea by Thawar Das that on 19.9.1966 there was a fresh agreement between the parties and he had paid Rs.2,000/- to Phool Chand associated with positive finding arrived at by the two courts below which finding has not been upset by the High Court that the plea was false and was sought to be substantiated by producing a false and fabricated document makes the situation worse for Thawar Das. A person who falsely alleges to have paid Rs.2,000/- and also attempts at proving the plea at the stage of the trial cannot be said to have been ever ready and willing to pay Rs.7,000/- which under the contract it was his obligation to pay. The present one is not a case where a plea as to payment was raised bonafide but abandoned at or before the trial for inability to prove." (para-7)
65. In this case the defendants on their own have not taken any steps for specific performance of the agreement. The two documents relied upon by the defendants to show payment of Rs.8380/- were produced belatedly. Even they were not referred into the pleadings. No serious attempts were made to prove those 55 SA-574-2004 (J).doc documents. So there is a reason to believe that defendants took a false defence to suit their purpose. I find force in the arguments of learned Advocate Shri Dangare. Defendants tried to misuse the position by retaining possession, enjoying the fruits derived due to use of the land on one hand and not taking steps in executing sale deed by paying requisite stamp duty on the other hand.
66. Secondly allowing the Sanstha to run a school. For the above discussion, substantial question of law No.1 has to be answered in the negative. The First Appellate Court was not right in extending the benefit of protection under Section 53-A of T.P. Act to the defendants. So far as substantial question no.2 is concerned, is to be answered in the affirmative. The First Appellate Court was right in denying the benefit of declaration as to nature of agreement as void and unenforceable. In fact, both the Courts below have swayed away by the considerations and have wrongly framed the issue. It ought to have been "whether plaintiff succeeded in getting declaration that termination of the agreement is legal or not". That relief can be granted to the plaintiff. This Court has already held that defendants have allowed the Sanstha to run a school in the building constructed on the suit land without permission of the plaintiff and without their title becoming perfect. The plaintiff was justified in terminating the 56 SA-574-2004 (J).doc agreement. Hence for this reason, the judgement of the appellate court is not sustainable and deserves to be setaside.
Damages and mesne profit
67. The Trial Court has not awarded any damages specifically but ordered an inquiry for mesne profits under the provisions of Order 20 Rule 12 of Code of Civil Procedure whereas the First Appellate Court has set aside the judgment of the Trial Court and hence the question of granting damages or ordering an inquiry for mesne profits by the Appellate Court has not arisen. Whereas as per Civil Application No.266/2009, direction to defendants to deposit an amount of Rs.22,88,000/- is prayed. She has relied upon a copy of rent agreement in between respondent no.2 and Mahatma Bahuuddeshiya Shikshan Sanstha. The rent payable for the building is Rs.13,000/- per month. The calculation is given in paragraph no.10. The date of the rent agreement is 25/05/1995 and amount calculated at that rate is for 176 months. This Court as per the order passed on 04/10/2013 was pleased to direct to "hear this application at the time of final hearing of the appeal". The prayer is opposed on behalf of the respondents on various grounds including denial of such agreement.
68. It is very well true that if the decree for possession is stayed, the decree holder is certainly entitled to get certain 57 SA-574-2004 (J).doc amount from the judgment debtor as has been held in case of Atmaram Properties (P) Ltd vs Federal Motors (P) Ltd. reported in (2005)1 SCC 705. It was not brought to notice that such condition was imposed by the First Appellate Court when decree was stayed in an appeal filed by the defendants.
69. Admittedly, when second appeal is filed, there was no decree for possession. At the same time, there is a dispute about the agreement as referred above. As this Court has held that defendants are not entitled to protection, certainly there possession becomes illegal. It will be difficult for this Court to quantify the amount at this stage considering the limited inquiry contemplated. This could have been done during the pendency of the present appeal. But certainly an inquiry as to mesne profits can be ordered.
70. The plaintiff and defendants can adduce the evidence in that inquiry. Pending that inquiry, this Court is of the opinion to direct the defendants to deposit at least an amount of Rs.5,00,000/- before the Trial Court. It can be adjusted once the decision will be rendered in that mesne profits inquiry. The amount is quantified on tentative assessment. The suit is filed in 58 SA-574-2004 (J).doc the year 1994 (almost 26) years) and 26 years have elapsed thereafter. The compensation at the rate of Rs.1500/- is considered for a month and for 26 years it roughly comes to Rs.5,00,000/- (Rs.1500/- per month of 12 months X 26 years). So the respondents can be directed to deposit that amount before the Trial Court within the period of two months from today. Hence the following orders is passed.
ORDER
i) The appeal is allowed.
ii) The judgment dated 11 June 2004 passed by the court of Ad-hoc District Judge, Nagpur in R.C.A. No.1011/2000 is set aside.
iii) The suit filed by the plaintiff is decreed.
iv) It is declared that termination of the agreement dated 30/12/1982 done vide suit notice dated 25/11/1993 is legal and proper.
v) The respondents-defendants are directed to hand over vacant and peaceful possession of the suit land by removing the construction carried out on the suit plot bearing Plot No.6 from Khasra No.27/1 admeasuring 465 sq. mtrs. situated at Nagpur within the period of two months to the appellant-plaintiff.
vi) The respondents-defendants are directed to deposit an amount of Rs.5,00,000/- within 2 59 SA-574-2004 (J).doc months from today before the Trial Court towards tentative assessment of the mesne profits.
vii) This amount will be adjusted once the quantum on mense profit is decided after inquiry.
viii) The Trial Court is directed to conduct an inquiry as to mesne profit as contemplated under the provisions of Order 20 Rule 12 of Code of Civil Procedure.
ix) Trial Court to decide about disbursal of that amount. In the meantime, the amount be deposited as per Rules.
x) The executing Court is at liberty to adjust the equities when the question of removal of construction will arise.
xi) Civil Application (CAS) No.266 of 2010 is disposed of in the light of above observations.
xii) Parties to bear their own costs.
71. In the light of the above, the Second Appeal is disposed of.
Digitally signed
(S.M. MODAK, J.)
RAJESH by RAJESH R.S. Sahare
VASANT
VASANT CHITTEWAN
CHITTEWAN Date: 2022.01.21
16:46:39 +0530