Partly allowed

Ganpat Laxman Chandole v. Venkatesh Gangadharrao Kakde

Bombay HC18 Jul 2009FA/679/2009

Case brief

AI extract

What is this about?

The High Court affirmed the decree for specific performance but modified the order to direct the respondent-purchaser to deposit an additional amount of Rs.8,06,250/- as fresh consideration due to abnormal price escalation, failing which the decree stands set aside.

What did the court decide?

The respondent-purchaser was to deposit an additional Rs.8,06,250/-; upon such deposit, the appellant-seller was directed to execute the sale deed within two months. Failure to deposit would result in

Ganpat Laxman Chandole Vs Venkatesh Gangadharrao Kakde — Specific Performance | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD

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FIRST APPEAL No.679/2009

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 (With CA/4048/2009)

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Ganpat s/o Laxman Chandole,
Age: 70 years, Occupation:
Agriculture, resident of
Chaitanya colony, Vithalwada,
Simhagad Road, Pune.

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...APPELLANT

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(ORIGINAL Defendant)

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VERSUS

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Venkatesh s/o Gangadharrao Kakde,
Age: 27 years, Occupation:
Agriculture & Business,
Resident of Plot No.42,
N-3, CIDCO,Aurangabad.

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...RESPONDENT

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(ORIGINAL Plaintiff)

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Mr. D.V.Soman, Advocate, for the appellant.
Mr. G.K.Thigale, Advocate, h/f Mr. Swapnil
S.Patankar, Adv., h/f Mr. D.L.Vakil, Adv., for
Respondent.

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---
CORAM : K.U.CHANDIWAL, J.
 DATE : 18/7/2009

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***

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P.C. :

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1.The appellant, being owner and possessor
of piece of land from Gat No.6 admeasuring 30.18
Gunthas, situated at Nakshatrawadi, taluka and
district Aurangabad, executed an agreement for
sale on 11.11.2003/4.11.2003, for consideration

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of Rs.8,06,250/-. The respondent paid Rs.
20,000/- as earnest. The sale transaction was
to be completed within six months, however, the
appellant was to get the land measured and
demarcated before execution of the sale deed
through T.I.L.R. ( Taluka Inspector of Land
Records). The appellant, within three months
from the agreement, accepted to obtain all
necessary permissions for transfer of the said
property, if required and, also, to get the land
measured and demarcated through T.I.L.R. and,
thereafter, to execute the sale deed in favour of
the purchaser/respondent, at the cost of
vendor/appellant, or his nominee.

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2.The non compliance of the terms by
seller, resulted in the purchaser issuing notice
dt.27.7.2006, which was returned unserved. By
the subsequent notice dt.24.7.2007, through
Advocate, specific performance of the contract
was sought. The defendant replied the same
through his Advocate dt.1st August, 2007,
enclosing cheque of Rs.20,000/- in favour of the
respondent purchaser, indicating termination of
the agreement. Based on such correspondence,
plaintiff filed a suit for specific performance
of contract against the defendant-appellant,
seeking execution of the sale deed.

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3.The learned Judge, on evaluating the
evidence, interpreting the agreement, by order
dt.30th Jan.,2009, decreed the suit, in following
terms:

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"The suit is decreed as follows:-

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(A)The plaintiff shall deposit the
balance consideration amount in the
court within three months from the date
of this order. The defendant on
receiving the balance consideration
amount shall execute registered sale
deed of suit property in favour of
plaintiff.

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(B)If the defendant failed to execute
the sale deed in favour of plaintiff
then plaintiff is at liberty to get the
sale deed executed through the machinery
of Court.

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(D)The defendant do pay costs of the
suit and shall bear his own.

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(E)Decree be drawn up accordingly. "

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The decree and judgment dt.30th Jan.,2009, is
subject of challenge at the instance of the
defendant/appellant/seller.

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4.The parties are referred by their status
in the original proceedings as plaintiff and
defendant, for convenience.

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5.Mr. D.V.Soman, learned Counsel for the

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defendant/appellant would argue:

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(a)Plaintiff is not a genuine buyer as
there was speculation in his purchase.

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(b)Land is urban land, near city, with
high potentiality.

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(c)Defendant is now a paralytic patient,
cannot move from bed, he has no other
property in Aurangabad.

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(d)The suit is barred by limitation as six
months period commenced from 5.11.2003 in
the light of Art.54 of the Limitation Act.

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(e)The plaintiff paid an amount of Rs.
25,000/- on 17.12.2003, however, it was
reimbursed to him, since the agreement was
treated as terminated.

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(f) There is no equity in the transaction.

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(g) Injunction application was not pressed.

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6. The Counsel for the plaintiff contended,

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(a)the injunction application was not
pressed in the light of statement made in
paragraph No.10 of affidavit-in-reply by the
defendant, where the defendant accepted, he
has not entered into any agreement nor he
has any such desire.

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(b)The plaintiff is not a builder; he

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is a dealer in Gas agency. There is no
evidence of in-equality in the matter.

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(c)The plaintiff did not desire
controversy;hewantedspecific

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identification of the property, in terms of
the agreement. The defendant was required
firstintimetoobtain

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permission/measurement under Section 85(3)
of the Maharashtra Land Revenue Code as mere
measurement by itself will not serve the
purpose.

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(d)There is no evidence of payment of
Rs.25,000/- by the plaintiff nor there is any
evidence of defendant reimbursing, as the
correspondence from both the sides is silent.

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(e)There were reciprocal obligations.
The plaintiff, by paying earnest money has
complied his part. The second obligation
was of the defendant to obtain permission,

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get the land measured and then the duty of
the purchaser will come in picture, to get
the sale deed by making payment.

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(f)The plaintiff/purchaser was always
ready to perform his part of contract for
which notice was issued upon the defendant
but, it was not acted upon by the defendant.

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7.In terms of the agreement, it was the
defendant who was required to move the learned
Tehsildar under Section 85(3) of Maharashtra Land
Revenue Code, for sub division of the property
and to get the land demarcated. Even if the
defendant, has applied to the T.I.L.R., for
carrying out measurement, which is carried on

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25.11.2003, however, there is no proof tendered
by the defendant that such measurement was
communicated to the plaintiff. That apart, the
transaction could not have been completed in its
letter and spirit though the 7/12 extract
indicate distinct name of the defendant but it is
obviously a joint possession with several others.
Consequently, it follows, since the agreement
provided for necessary approval from Government
for sub-division, the duty was cast on the
defendant to get in requisite permission within
stipulated period. The record illustrates, as
on today, there is no such permission of sub
division from the competent Revenue authorities.

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8.The defendant contended that, since
there was compliance from him, the plaintiff paid
an amount of Rs.25,000/- on 17.12.2003. However,
subsequently, plaintiff approached with Mr.
Prabhakar Khole and indicated his disinclination
to complete the transaction and, hence, the
amount of Rs.25,000/- was paid to the plaintiff
on 15th Jan.,2004. This stand of the defendant
is not supported from any circumstance barring
evidence of the attorney. It is not clear
whether attorney was present when so called
payment was reimbursed by his father on
15.1.2004. If, indeed, such payment was made,
and transaction was terminated, the implicit
result was, forfeiture of Rs.20,000/- received as

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earnest by cheque but, there is nothing to this
effect. That apart, there is no endorsement on
the agreement of sale about such case of
termination contemplated by the defendant. This
stand taken by defendant is naturally an
afterthhought as there is no reference thereof in
the reply notice sent through Mrs.Nirmala More,
Advocate, dt.1st August, 2007. It, thus,
indicates that the evidence relating to the
receipt of 7.12.2003, for Rs.25,000/- or, its
reimbursement dt.15.1.2004, are illusory in
nature, no such incident has taken place between
the parties litigating.

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9.It is in the evidence, even the

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agreement of sale refers that, apart from the
purchase of property from defendant, the
plaintiff had identical purchases from the same
block of land, from other owners, to the
knowledge of the defendant and, indeed, such sale
deeds of the different piece of land from three
such owners are completed by the plaintiff. It
was expected of both the sides to have tendered
the relevant sale deeds, to evince the date of
such transaction, whether it was armed with
permission of sub division under Section 85(3) of
Maharashtra Land Revenue Code or that there was
already a measurement from the T.I.L.R. In this
scenario of the matter, it will be a lame excuse
of the defendant, that on 17th Jan.,2004, the

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transaction was terminated, or it was a
speculative transaction.

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10.The defendant, as seller of the
property, in terms of what was agreed between the
parties, was duty bound to get the land sub
divided and demarcated by obtaining requisite
orders from the Tehsildar under Section 85(3) of
the Maharashtra Land Revenue Code. It is not as
yet completed. In view of this impediment, the
time of six months, referred in clause (3) of the
agreement will not be operational as the initial
obligation cast on the defendant is not
discharged.

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11.The plaintiff canvassed that he issued
notice upon the defendant on 27.7.2006, it has
returned unserved for insufficient address.
Defendant disputed the same. However, on
perusal of the envelope, I find that, address was
short of Pin Code number of Pune, all the details
in the postal envelope are identical with the
subsequent notice dt.24.7.2007 and the suit
summons were served upon the defendant at same
address. It is, thus, indicative, the defendant
knowingly avoided the service of notice dt.
27.7.2006.

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12.It was subsequently, on 24.7.2007, the
plaintiff again issued notice urging the
defendant to complete the sale transaction in

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terms of the agreement and also apprised him
about the plaintiffs transaction with Prabhakar
Khole, Anand Govind Muley, Narayan Sadavarte,
legal heirs of Subhash Ganore. The reply through
Smt. More, Advocate, was in the nature of
evasiveness than accepting the fact of agreement
or the reasons for non compliance indicated
therein. This made the plaintiff to file the
suit on 3rd August, 2007. Taking these details
into consideration, it is difficult to to accept
that time was essence of the contract between the
parties, though there was stipulation to comply
the same within a period of six months. The
suit is not time barred.

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The Constitution Bench of the Hon'ble
Supreme Court in the matter of Smt.Chand Rani
(dead) by LRs., V. Smt. Kamal Rani (dead) by LRs.
( AIR 1993 SUPREME COURT 1742) have indicated
that fixation of the period within which the
contract has to be performed, does not make the
stipulation as to time the essence of the
contract and, ultimately, observed in paragraph
no.28,

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" ....Therefore, we conclude that though
as a general proposition of law time is
not the essence of the contract in the
case of sale of immoveable property yet
the parties intended to make time as the

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essence under clause (1) of the suit
agreement. ... .."

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13.Theevidence,coupledwiththe

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circumstances, shows that the plaintiff as
purchaser of the property has discharged his part
of obligation and he was and is ready and willing
to perform his part of the contract. There is
no obvious deviation or any bickering to create
rebel against the terms of agreement in such
attempt from the side of the plaintiff.

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14.The Counsel canvassed that the
defendant is a paralytic patient and he has the
only suit property. Though there is no medical
record to accept such physical condition of the
defendant, however, no importance can be given to
the same. The defendant has, openly agreed to
sell the property. He was conscious that, after
its disposal, he may not have property at
Aurangabad. It was his own decision and not
under compulsion. Consequently, his remaining
without any property after the sale will not be
to the detriment of the plaintiff as purchaser.

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15.The Hon'ble Supreme Court, in the matter
of M.P.Mathur & others V. D.T.C. and others ( AIR
2007 SUPREME COURT 414) have explained, in
paragraph no.15 the term "equity" as under:

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"The present suit is based on
equity. The term "equity" has
fourdifferentmeanings,
according to the context in which
it is used. Usually it means "an
equitable interest in property".
Sometimes, it means "a mere
equity", which is a procedural
right ancillary to some right of
property,forexample,an
equitable right to have a
conveyance rectified. Thirdly, it
may mean "floating equity", a
term which may be used to
describe the interest of a
beneficiaryunderawill.
Fourthly, "the right to obtain an
injunction or other equitable
remedy". In the present case, the
plaintiffs have sought a remedy
which is discretionary. They have
instituted the suit under Section
34 of the 1963 Act. The
discretion which the Court has to
exerciseisajudicial
discretion. That discretion has
to be exercised on well-settled
principles. Therefore, the Court
has to consider - the nature of
obligation in respect of which
performanceissought,
circumstances under which the
decision came to be made, the
conduct of the parties and the
effect of the of the Court
granting the decree. In such
cases, the Court has to look at
the contract. The Court has to
ascertain whether there exists an
element of mutuality in the
contract. If there is absence of

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mutuality the Court will not
exercise discretion in favour of
the plaintiffs. Even if, want of
mutualityisregardedas
discretionary and not as an
absolutebartospecific
performance, the Court has to
consider the entire conduct of
the parties in relation to the
subject-matter and in case of any
disqualifying circumstances the
Court will not grant the relief
prayed for [Snell's Equity, 31st
Edn., page366]. ... "

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On assessment of the evidence, I find that
there was mutuality in the contract. There
is no discrepancy or any ambiguity in the
agreement between the parties. The defendant,
as a seller, was conscious of his obligations
and its performance was naturally within his
realms.

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16.It was contended, though time was
not essence of the contract, the plaintiff is
required to approach the Court within
reasonable time. However, as stated earlier,
no sooner there was denial to perform the
terms of agreement, plaintiff approached the
Court for seeking performance. Consequently,
there is no inordinate or any delay on the
part of the plaintiffs.

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17.The Counsel for the appellant
contended that, escalation of the prices in
the vicinity and of the particular land, due
to enormous delay, also needs consideration as
the relief of specific performance is
discretionary. There is no controversy that
grant of decree of specific performance lies
in the discretion of the Court. It is also
well settled, it is not always necessary to
grant specific performance for the reason it
is legal to do so. By now the law is well
settled, the Court in its discretion can
impose any reasonable condition, including
payment of additional amount, by one of the
party to the other while granting or refusing
decree of specific performance.

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18.In the matter of Nirmala Anand V.
Advent Corporation (P) Ltd. and others
( 2003(1) Mh.L.J.468, in an identically placed
situation, the Hon'ble Lordships have
observed,

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"... Phenomenal increase of price
duringthependencyofthe
litigation, as a general rule, cannot
be considered. While balancing the
equities, one of the considerations

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to be kept in view is as to who is
the defaulting party. It is also to
be borne in mind whether the party is
trying to take advantage over the
other as also the hardship that may
be caused to the defendant by
directing specific performance."

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19.The factual matrix illustrates, the
prices in the city of Aurangabad have
multiplied abnormally. The transaction is of
2003, as against payment of paltry sum of Rs.
20,000/-. The equities required to be
honoured, considering the high escalation and
the valuation of the money. If the amount
would have been paid in time, naturally, the
defendant, as a seller, could be beneficial
for its interest or other use. However, he
lost such opportunities. The defendant is
bound to face hardship if directed to comply
specific performance on same terms. Taking
survey of situation and circumstances
prevailing in this case, coupled with the
conduct of both the parties, I find that it
will not be prejudicial to the plaintiff, as
purchaser and, defendant, as a seller, if the
plaintiff is directed to pay additional amount
of Rs.8,06,250/- as sale price payable to the
defendant. These situations, have creeped in
in the present transaction as there is already

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a purchase of the plaintiff of other blocks
from the same land, he must be presumed to be
aware about such permission under Section
85(3) of Maharashtra Land Revenue Code for the
sub division by measurements. The

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plaintiff, on his part, did not issue notice
immediately in between the stipulated time of
six months, though plaintiff has stated having
contacted the defendant and defendant has
orally assured to comply. The apathy shown
by the defendant in getting the sub division,
added to the misery and for that the plaintiff
alone need not be blamed. The balance can be
striked, as indicated above.

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20.Hence, order.

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The appeal is partly allowed with
costs as under:

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(a)The Judgment and Decree under
challenge remain unaltered.

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(b)Inaddition,the
purchaser/RespondentVenkatesh

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Gangadharrao Kakde shall deposit an
amount of Rs.8,06,250/- (Rupees eight
lakhs six thousand and two hundred
fifty) as additional price of the
property,withlearnedCJSD,

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Aurangabad up to 18th September, 2009;

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(c)Failure to comply, the

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decree of specific performance shall
be treated as dismissed/set aside;

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(d)Upon the purchaser/Respondent
– Venkatesh Gangadharrao Kakde,
depositing the amount of Rs.
15,92,500/- (Rupees fifteen lakhs
ninety-two thousand and five hundred),
referred in the Judgment of learned
CJSD, and vide clause (b) above,
thereafter the seller/Appellant –
Ganpat Laxman Chandole shall execute
sale-deedinfavourof

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purchaser/Respondent as per terms of
agreement within two months, i.e. upto
18th November, 2009. Civil Application
disposed of.

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( K.U.CHANDIWAL)

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JUDGE

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agp/fa679-09

Ganpat Laxman Chandole v. Venkatesh Gangadharrao Kakde

Case brief

What is this about?

What did the court decide?

Ganpat Laxman Chandole v. Venkatesh Gangadharrao Kakde

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

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