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IN THE HIGH COURT OF BOMBAY
S.M. Daud M.G. Chaudhari, JJ.
Sureshkumar Sakharchand Shah... Appellant.
Versus
Edna Sushila samuel... Respondent.
First Appeal No. 249 with F.A. No. 285 of 1985, decided on 16/19-10-1992.
Advocates appeared :
P.V. Sathe, for the appellant.
K.Y. Mandlik, for the respondent.
See Specific Relief Act, 1963, Section 10.
Section to-Specific performance-Refusal or reluctance on part of defendant-Ground-Acceptance of project required from competent authority under Ceiling Act.
Held, that was a matter to be decided by competent authority. In case defendant was sincere in performing his part of contract viz. for completion of transaction, she should have refrained from raising uncalled for objections.
Section 13-Sale of land and structure-Contract for-Specific performance of-Prospective purchaser placed in possession even without conclusion of contract-Liability of purchaser.
Held, Prospective purchaser was liable to pay monthly amount described as rent. Argument that transaction was not capable of being specifically enforced for it was covered by Rent Act. Such an argument could not be accepted. Tenancy is a matter of agreement between parties and does not come in existence by laxity in the choice of words by parties in expressing themselves. Here the word rent is misnomer. Rent Act did not apply to the transaction where under plaintiff had come to possess superstructure.
Section 20-Urban Land (Ceiling and Regulation) Act, 1976, Section 20-Agreement by plaintiff to purchase suit land from defendant-Plaintiff under said agreement agreeing to pay Rs. 1000/- per month to defendant till execution of sale deed-Possession of land and shed given to him--Non-performance of agreement to sell suit land by defendant-Contract not impossible with coming into force of Ceiling Act as power to exempt under Section 20 exists-Plaintiff not tenant protected under Bombay Rent Act-Plaintiff entitled to specific performance of contract.
On 18-9-1980, the defendant while seeking permission of competent authority by defendant for exemption under Section 20 of the Urban Land Ceiling Act, he did not submit application in the prescribed form and per. mission suffered from several omissions. The defendant did not apply to the Collector for permission for conversion of land into non agricultural one nor had furnished a demarcation certificate from D.I.L.R. The defendant for no justified grounds, refused to sign various applications and forms sent by plaintiff to defendant for seeking exemption under Section 20. The plaintiff therefore filed suit for specific performance of contract. It was contended in defence that contract had become impossible due to enforcement of Ceiling Act as suit land itself exceeded permissible limits which a landholder was entitled to retain or acquire. As there was an agreement to pay Rs. 1,000 per month to defendant till execution of sale deed. The plaintiff set up a defence of being tenant on land and being protected by the Rent Act. In view of the stand of the plaintiff, the defendant counterclaimed for relief of possession of structure. The trial Court held that the plaintiff was not ready and willing to perform his obligation under contract and agreement stood frustrated in view of provisions of Ceiling Act. The trial Court further held in relation to counterclaim that plaintiff could not be ejected as his occupation in respect of structure on land was protected under the Bombay Rent Act.
Held, the judgment of the trial Court was liable to be set aside as the plaintiff was ever ready and willing to perform his part of the contract and was entitled to specific performance of contract. It was the defendant who chose to be unreasonable which led to non-performance of contract. The coming into force and Ceiling Act did not nullify the contract incorporated under agreement of sale. The power to exempt under Section 20 was there. The trial Court erred in holding that the possession of the superstructure was in his capacity as tenant protected under Bombay Rent Act. The amount of Rs. 1,000 p.m. was in nature of reimbursement by plaintiff for erosion of real value of agreed consideration. It represented interest payable on major portion of balance of price. In a sense it was compensation to assuage defendants grievance about loss of income consequent to the delay in performance of the agreement. The mere fact that the payment was described as rent, would not create tenancy between the parties.
Section 20
See Specific Relief Act, 1963, Section 20.
2. The appellant in First Appeal No. 285 of 1985, hereinafter referred to as defendant as the owner of the suit land. The appellant in First Appeal No. 249 of 1985, hereinafter referred to as the plaintiff is a businessman based at the Pune. Defendant's husband and the plaintiff were clubmates, both being the members of the Pune club. Plaintiff entered into an agreement to purchase the suit land from the defendant and the said agreement was reduced to writing on 19-7-1971 at Exh. 55. Broadly speaking, the plaintiff paid earnest money of Rs. 10,000/- from out of the agreed price of Rs. 1,22,000/-, was to pay the balance within a period of nine months and in return the defendant was to pass a sale deed in plaintiff's favour. The defendant on her part undertook to do various things such as produce documents of title to satisfy PIFF of her right to transfer the land free of encumbrances, acquire and furnish to the plaintiff a demarcation certificate from the District Inspector of Land Records, secure permission from the Collector to convert the land which was agricultural into non-agricultural (NA) etc. The period for execution of the sale deed was extended from time to time. The extensions being granted on 21-3-1972, 16-2-1973, 18-4-1976 and 12-2-1979. the second extension endorsement, had, amongst others, the following recital :
"In pursuance of the agreement of sale I am herewith, delivering vacant possession of the shed as per plan attached".
The land had a shed and the said shed had been previously let out to the Maharashtra State Warehousing Corporation on rent by the defendant. Plaintiff was placed in possession of the shed a from 1-11-1973. The last extension endorsement effected an important variation in the agreement. Plaintiff agreed to an enhancement of the price by 28,000/- which sum was to be paid along with the balance of the price of Rs. 1,12,000/- at the time of the execution of the sale deed. Secondly, until the agreement was performed i.e. the sale deed executed, plaintiff would pay the defendant a sum of Rs. 1,000/- per month. This payment was described as "rent". Thirdly, defendant gave a specific commitment to extend full co-operation so as to further the transaction vis-a-vis any application to be made to the Government or any other authority. Lastly, time for the performance of the agreement was extended upto 11-2-1980. Plaintiff gave a public notice in certain newspapers of Pune about his intention to purchase the suit land and this was done with a view to elicit objections from those claiming to or having an interest in the property. Certain objections were raised by various persons through their advocates and this was in August 1971. The plaintiff on 18-8-1971 addressed a notice to the defendant at Exhibit 91 calling upon her to deal with the claims raised by the persons aforementioned. Defendant replied on 6-9-1971 through Exhibit 66 disclaiming the objector's claim vis-a-vis the suit land. Plaintiff seems to have been satisfied with the clarification given by the defendants, because it was only after the receipt of Exh. 66, that the extensions of time were given for the performance of the agreement. After February 1980 there was an exchange of several missives between the parties. The first was Exh. P-88 dated 24-4-1980 sent on behalf of the defendant to the plaintiff. The notice recited various events. Paragraphs 8 and 9 of Exh. P-88 spoke of defendant having furnished a return in the prescribed form - form prescribed under section 6 of the Urban Land (Ceiling and Regulation) Act 1976, hereinafter referred to as the 'Ceiling' Act. Defendant mentioned that she had in her return described that sui
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