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2010 Supreme(Bom) 808

2010(5) ALL MR 139
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A. P. BHANGALE, J.
Shriram s/o. Tukaram Avatade – Appellant
Versus
Ramrao Udaji Khadase – Respondent
Second Appeal No.329 of 1998
Decided on : 18th June, 2010.

Advocates appeared:
Mr. D. P. JAISWAL, Advocate for Appellant.
Mr. A. P.TATHOD, Adv., for Respondent.

Headnote:Contract Act, 1872 - Section 40 - Specific performance of contract of sale - Defendant submitted that it was not true transaction of sales - He approached plaintiff to borrow to pay debt of bank - As per trial Court respondent failed to prove agreement to sell - Suit dismissed - Appellate Court set aside order - Now appeal - Specific plea that it is money ending transaction - No evidence to override legal effect - First appellate Court held it speaks of constitution of contract for sale between plaintiff respondent and defendant appellant - It is executed by defendant favouring plaintiff - Plaintiff agreed and willing to perform his part of contract - No interference warranted - First appellate Court right in its decision - Second appeal dismissed. - When the plaintiff had shown his readiness and willingness to perform his part of the contract, by attending office of the sub-registrar on 6.5.1991 even on a day when document was expected to be executed and registered. The first Appellate Court while appreciating the suit agreement (Exh. 25) held that it clearly speaks of constitution of contract for sale between the plaintiff and defendant. It is duly proved by the plaintiff as executed by the defendant in favour of the plaintiff. The trial Court’s approach was found faulty.

       It is settled legal position that ordinarily specific performance of an agreement to sell has to be granted unless it is unjust, inequitable and improper to grant specific relief under the circumstances. Interpretation of contract depends upon import of words used and not upon what parties have to say afterwards. Effect has to be given to clear and unambiguous words by ascertaining intention of the parties, surrounding circumstances and object of contract. [See Bank of India v. Mohandas, 2009 DGLS (soft) 414 : (2009) 5 SCC 313. Contract for specific performance involve an obligation which upon sufficient consideration is required to be discharged. A party against whom contractual obligation is not discharged, is entitled to insist upon specific performance of contract or, in the alternative if specific performance could not be granted to obtain adequate compensation for the non-performance of the contract on the principle of loss of contract. For all the reasons stated therefore, no ground is made out for interference with impugned judgment and order. The first Appellate Court thus recorded its finding upon proper appreciation of evidence using sound discretion in the case in accordance with law. Substantial questions of law are answered accordingly against appellant and, in the result, the appeal has to fail.

JUDGMENT:-

This Second Appeal is initiated at the instance of defendant against whom decree has been passed by learned Additional District Judge, Washim the first appellate Court, in Regular Civil Appeal No. 78/ 1997 decided on 14.7.1998. Parties shall hereinaf1er be referred as their original status as "plaintiff' and "defendant" in the suit, for the purpose of convenience.

2. Facts briefly mentioned are: the plaintiff had filed Regular Civil SuitNo.37/1994 in the Court of learned Civil Judge Jr. On. Risod for specific performance of the contract of sale, with alternative prayer for refund of consideration with damages. According to the plaintiff on or about 27.2.1991, the defendant had entered into an agreement to sell the suit land; field S. No.53/1 admeasuring 2 acres, 2 gunthas situated at Belkhed in Risod Taluqa in Washim District (Old Dist.-Akola) under an "Isaarchitthi" for earnest money of Rs.17,000/- paid to the defendant. It was agreed that balance consideration would be paid at the time of execution of sale deed on or before 6.5.1991. The plaintiff claimed that he was ready and willing to perform his part of contract, but the defendant on some pretext or the other, avoided to perform his part of contract. On 6.5.1991 the plaintiff was present in the office of Sub Registrar with all requirements in order to perform his contract, but the defendant remained absent and evaded to attend the office of Sub-Registrar. The plaintiff ad called upon defendant by notice dated 14.2.1991 to perform his part of the contract. Despite it the defendant has failed to perform his art of contract.

3. The suit was resisted on the ground that it was not a true transaction of sale but there was debt/encumbrance from the bank on the suit land therefore, the defendant had approached the plaintiff to borrow and that the plaintiff took disadvantage of the document to institute the false suit.

4. The trial Court had held that the plaintiff failed to prove the agreement to sell and dismissed the suit.

5. Feeling aggrieved and dissatisfied with the dismissal of the suit, the plaintiff had preferred Regular Civil Appeal No.78/1997 in the District Court, Washim. Learned Additional District Judge by judgment and order dated 14.07.1998 held that the agreement to sell suit land was proved and the plaintiff was ready and willing to perform his part of the contract and was entitled to the relief of specific performance of contract. Thus, the trial Court's judgment and order was set aside and the suit was decreed with costs whereby the first Appellate Court directed the defendant to execute the sale deed by accepting balance consideration.

6. The instant Second Appeal was admitted on the following substantial questions of law, which were raised as it is, on behalf of the appellant:

"(1) Whether the Appellate Court can set aside the judgment and decree passed by the trial Court in the suit for specific performance of the contract whereby the learned trial Court dismissed the suit of the plaintiff for specific performance of contract by giving valid reasons? In as much as it is now well established principle that granting or refusing the specific performance is discretion of the Trial Court and the same cannot be interfered by lower Appellate Court.

(2) Whether the lower Appellate Court committed error in holding Sections 91 and 92 of the Indian Evidence Act and the evidence which shows that the agreement of sale is nominal, bogus and never intended to be acted upon.

(6)That, the lower Appellate Court erroneously discarded the testimony of attesting witness, namely, Sadashiv who deposed that, the said transaction is the money lending transaction. Even though he was examined as witness of the plaintiff but was not cross-examined by the plaintiff after he admitted that the said transaction is the money lending transaction."

7. I have heard submissions at the Bar and perused the impugned judgment and order as also judgment and order which was delivered by the trial C













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