IN THE HIGH COURT OF BOMBAY
Bharati Dangre, J.
Girish Uttamrao Kohok - Appellant
Versus
Ratan Hiraji Deore - Respondent
Second Appeal No. 509 of 2020 with Interim Application No. 4151 of 2019
Decided On : 05-05-2022
SPECIFIC PERFORMANCE - AGREEMENT OF SALE - URBAN LAND CEILING ACT, SEC. 26 - The court discussed the principles of specific performance under contract law, emphasizing that specific performance should generally be granted unless strong equities are against the plaintiff. The court interpreted the Urban Land Ceiling Act, particularly Section 26, which allows for the execution of sale deeds contingent upon obtaining necessary permissions. The court found that the absence of a final layout sanction should not bar specific performance, as the plaintiff had proven the existence of the agreement and his readiness to perform.
Fact of the Case:
The plaintiff entered into an agreement to purchase a plot of land from the defendant, paying Rs. 5,51,000 as part consideration. The defendant later denied the existence of the agreement and sold the property to a third party. The plaintiff sought specific performance of the agreement, claiming he was ready and willing to complete the transaction.
Finding of the Court:
The trial court initially found in favor of the plaintiff, recognizing the agreement and the payment made. However, it denied specific performance on the grounds that the layout of the property had not been sanctioned. The appellate court upheld this decision, citing the need for the plaintiff to prove his financial capacity and the lack of necessary documentation.
Issues: 1. Whether the lower appellate court erred in denying specific performance despite the plaintiff's evidence of payment and readiness. 2. Whether the requirement for layout sanction constituted a valid ground for denying specific performance.
Ratio Decidendi: The court held that the existence of the agreement and the payment made by the plaintiff were sufficiently proven. It emphasized that the lack of a final layout sanction should not prevent the enforcement of the agreement, as the plaintiff had demonstrated readiness and willingness to perform his part of the contract.
Final Decision: The court set aside the appellate court's decision, granting specific performance in favor of the plaintiff, as the technical grounds for denial were found to be insufficient.
JUDGMENT/ORDER
1. Second Appeal deserve an admission on the following substantial questions of law :-
(M) Whether the Lower Appellate Court was perverse in holding that the Plaintiff must prove that he possessed Rs.5,51,000.00 in cash at the relevant time and he was having payment potential and capacity on the date of agreement to pay that amount to Defendant No.17?
(N) Whether the Lower Appellate Court was perverse in holding that the Plaintiff ought to have filed his bank statement or income tax record to prove his financial capacity? and whether the Lower Appellate Court was perverse in drawing adverse inference against the Appellant/Plaintiff for non-production of such record, so as to dismiss his suit for specific performance?
2. Admit.
3. By consent, Appeal is taken up for hearing finally since the parties have placed on record the private paper book/ compilation of documents.
4. The Second Appeal is filed by the original plaintiff, being aggrieved by the judgment of the District Judge-6, Nashik in Regular Civil Appeal No. 45 of 2017, thereby dismissing his First Appeal and allowing the cross objection filed by the original defendant, thereby declining a decree for specific performance in favour of the plaintiff as claimed by him in Special Civil Suit No.197 of 2007.
5. In order to appreciate the questions of law as formulated above, it would be necessary to refer to the necessary facts giving rise to the said question.
6. The Suit property was described in paragraph no.1 of the plaint of Special Civil Suit No.197 of 2007 instituted by the plaintiff, being plot no.7, admeasuring 496.64 sq.m in Survey No.28/2.
Plaintiff pleaded that the original owner of the suit property is one Sou Sanghamitra Khatua and her name was recorded in the land records as "owner ". She entered into a development agreement and also executed general Power of Attorney on 9/11/2001 in favour of one Ratan Hiraji Deore (defendant no.1) vide a document registered with Sub-Registrar of Assurance, Nashik. The said agreement as well as the general Power of Attorney authorize the defendant no.1 to enter into the agreement with any person and the defendant no.1 exercised this right, since he was desirous of developing his land at native place and therefore, wanted to sell the property.
The plaintiff expressed his intention to purchase the property and negotiations between the plaintiff and defendant no.1 resulted in execution of an agreement for sale on 6/10/2005 which is the focal point of the proceedings between the parties. The agreement of sale amongst other conditions included a condition for payment of consideration of Rs.6,51,000.00 for the property and the claim of the plaintiff is on the very date of execution of the agreement to sell, he parted with consideration of Rs.5,51,000.00 in cash as a part consideration/earnest money. The agreement contemplate a sale deed to be executed within a period of one month of obtaining the necessary permission under the Ceiling Act, the onus of which was cast upon the defendant no.1. Pleading that the plaintiff was always ready and willing to purchase the suit property, but since the defendant no.1 avoided the completion of the transaction and assured that it is a matter of time when the sale would be completed, the plaintiff issued a notice on 3/3/2007 to the defendant no.1 for completion of the transaction as per the agreement of sale, which was responded to, by the defendant by taking a stand of complete denial. The plaintiff also gained knowledge that the defendant no.1 had already executed a document on 15/12/2006 in favour of defendant no.2 and on obtaining the necessary documents entered into by the defendant no.1 with defendant no.2 in form of a development agr
Vishwa Nath Sharma Vs.Shyam Shanker Goela and Anr
Mrs. Chandnee Widya Wati Madden vs. C.L. Katial
Specific performance of a contract for the sale of immovable property can be granted even if the final layout has not been sanctioned, provided the plaintiff has proven the existence of the agreement....
The main legal point established in the judgment is that the plaintiff's readiness and willingness to perform his part of the contract, as well as the fulfillment of the terms of the agreement for sa....
The Court exercised its discretion under Sec. 20 of the Specific Relief Act to set aside the judgment and directed the defendant to return the advance amount with interest.
(1) Agreement to sell – Specific performance will not be ordered if contract itself suffers from some defect which makes contract invalid or unenforceable – Discretion of court will not be there even....
The court ruled that a sale agreement intended as security for a loan does not entitle the plaintiff to specific performance, emphasizing the necessity of proving readiness and willingness to perform....
The plaintiff must prove readiness and willingness to perform contractual obligations for specific performance; failure to do so results in dismissal of the suit.
Specific performance requires continual readiness and willingness to fulfill contractual obligations; consent from co-owners must be secured for the contract to be enforceable.
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