This appeal and cross objection arise out of Judgment and Decree rendered by learned Civil Judge (S.D.), Amalner, in Special Civil Suit No.43 of 1989. The suit was for specific performance of agreement of sale or, alternatively, for refund of earnest amount along with damages. The trial Court rejected the main relief for specific performance but granted refund of Rs.16,000/- i.e. the earnest amount along with interest @ 12% per annum from the date of agreement till realisation of the entire amount.

2. Subject matter of the dispute is Southern portion comprising of 2 hectares and 2-Ares area out of land bearing Gut No.1613, admeasuring 4 hectares 66 Ares.

3. The suit land is within Municipal limits of the township of Chopda, a taluka place, and is undisputedly useful for non-agricultural purpose. It could be used for plotting so as to convert its use for residential purpose.

4. The plaintiffs' case before the trial Court was that they and original defendant No.2 - Vijaya agreed to purchase the suit land from the defendant No.1 for consideration at the rate of Rs. 1,30,000/- per acre. The defendant No.1 - Eknath executed an agreement of sale dated 22-12-1987 in their favour. It was agreed that Rs.16,000/- would be paid as earnest money at the time of execution of the agreement, an amount of Rs.1,00,000/- would be paid on or before 31-3-1988 and rest of the consideration would be paid at the time of execution of the registered sale deed. The parties agreed that the balance amount of consideration would be paid to defendant No.1 on or before 31-3-1989 and he would execute the' sale deed in their favour. It was also agreed that the defendant No.1 will obtain necessary permission for conversion of the suit land to non-agricultural use and thereafter would transfer the same as would be directed by them, The defendant No.1 accordingly executed a document, styled as “Soude-Chitthi” after receiving Rs.16,000/- as earnest amount.

5. The plaintiffs' case further is that they were ready and willing to pay the balance amount of consideration. They offered amount of Rs. l,00,000/- (Rs.One lac) to him on 31-3-1988 as per terms of the agreement. He avoided to accept that amount. They served a notice dated 10-3-1989 on him and called upon him to receive the remaining consideration and to comply with the terms of the agreement of sale.

The notice drew blank. Nor it was replied by the defendant No. 1.

6. The plaintiffs alleged that the market price of the suit land escalated and, therefore, the defendant No.1 avoided to execute the sale deed. Consequently, they sued for specific performance of the agreement of sale or alternatively, for refund of earnest amount along with compensation or damages to the tune of Rs. 3,00,000/-.

7. The defendant No.1 resisted the suit mainly on the ground that the transaction was of money lending. He denied truth into all the material averments made by the plaintiffs. He contended that plaintiff No.1-Bhaskar deals in money lending business without licence and had advanced amount of Rs. 8,000/- as hand loan to him. He further contended that the agreement of sale was obtained from him in lieu of security for repayment of the loan. He submitted that the plaintiffs have no right, whatsoever, to claim specific performance of the agreement in question because, there was no mutual agreement for alienation of the suit land. His further submission was that the suit land is his ancestral property and he owns only 1/3rd share therein. He submitted that the suit is bad for non-joinder of necessary parties inasmuch as his sons and wife are the co-sharers of the suit land. He contended that the suit is false and hence liable to be dismissed with costs.

8. Though original defendant No.2Vijaya did not join the plaintiffs, yet she did not contest the suit. She was set ex-parte.

9. On basis of above-mentioned pleadings, the trial Court framed certain issues at Exh.21. The parties adduced oral and documentary evidence in support of the