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2011 Supreme(Chh) 155

IN THE HIGH COURT OF CHHATTISGARH, BILASPUR
N.K. Agarwal, J.
Saduram
Vs.
Tikeshwar (Dead) through Legal Representatives and Ors.
Second Appeal No. 249 of 1988
Decided On: 29.04.2011

Headnote:

ostensible owner - specific performance of contract - Transfer of Property Act, 1882, Section 41

Fact of the Case:

Plaintiff filed a suit for specific performance of a land sale contract. Defendants refused to execute the sale deed, leading to the suit seeking relief of specific performance or refund of earnest money with interest. The trial court decreed the suit for refund of earnest money without interest. The first appellate court dismissed Plaintiff's appeal and allowed Defendants' appeal, granting relief of refund of earnest money with interest at 6% per annum.

Finding of the Court:

The court found that the Plaintiff failed to prove the Defendant as the ostensible owner of the suit property and did not discharge the burden to seek protection under Section 41 of the Transfer of Property Act. The Plaintiff was entitled to a refund of earnest money with interest at 6% per annum from the date of the agreement.

Issues: The issues revolved around the execution of the sale agreement, the ostensible ownership of the Defendant, and the entitlement to interest on the refund of earnest money.

Ratio Decidendi: The court held that to seek protection under Section 41 of the Transfer of Property Act, the Plaintiff must prove the Defendant as the ostensible owner with the consent of the real owner and act in good faith. The Plaintiff was entitled to interest on the refund of earnest money from the date of the agreement.

Final Decision: The Plaintiff's appeal for specific performance of the contract was dismissed, and the appeal was allowed in part for the refund of earnest money with interest at 6% per annum from the date of the agreement. Each party was to bear their own costs.

JUDGMENT

N.K. Agarwal, J.

1. Instant Plaintiffs second appeal arises against the judgment and decree dated 6-4-1988 passed by the 1st Additional District Judge to the Court of District Judge, Raigarh in Civil Appeal No. 89-A/ 1979.

2. Facts of the case in brief are as under:

i. Plaintiff filed a suit for specific performance of contract of sale of one acre of land out of Khasra No. 292/2 situated in village Lailunga. According to Plaintiff, he entered into agreement of sale with regard to suit land on 24-1-1972 with the Defendants for a consideration of Rs. 3100/-. He paid Rs. 1500/- as earnest money to Defendant No. 1 i.e. Karta of the family of Defendants, who executed agreement of sale in Plaintiff's favour with the consent of other Defendants. As per agreement, the balance consideration amount was payable at the time of execution of sale deed. Defendants agreed to execute sale deed in Plaintiffs favour within 2 days. Defendants were in need of money to meet their house hold expenses, for that necessity, the Defendant No. 1 has executed agreement of sale as a Karta of the family in presence and with the consent of other Defendants.

ii. On Defendants' refusal to execute sale deed, panchayat was convened. Before panchayat, Defendants did not appear. Therefore, Plaintiff was compelled to file the present suit seeking relief of specific performance of contract of sale and in the alternative, refund of earnest money with interest at the rate of 24% per annum from the date of agreement.

iii. The suit was hotly contested by the Defendants by filing separate written statement. Defendant No. 1 denied execution of sale deed and receipt of earnest money. Other Defendants denied existence of agreement as well as its execution in their presence, with their consent and for legal necessity of the joint Hindu family.

3. Learned trial Court decreed the suit finding inter alia: Defendant No. 1 executed agreement of sale for a consideration of Rs. 3100/- in Plaintiffs favour on 24-1-1972 after receiving Rs. 1500/- as earnest money in presence and with the consent of other Defendants, however observed, in case of failure of Defendants to execute sale deed, Plaintiff will be entitled only for refund of earnest money of Rs. 1500/- without interest and will not be entitled for getting sale deed, executed through court.

4. Plaintiff preferred first appeal for modification of the decree. Defendants have also preferred appeal. Earlier Defendants' appeal was dismissed as time barred. In second appeal, delay in filing first appeal was condoned and the matter was remitted to the first appellate court for decision on merit. Thereafter both the appeals have been heard. Learned first appellate court on re-appreciation of entire material and evidence on record dismissed Plaintiff's appeal, allowed Defendants' appeal holding the sale agreement was executed by Defendant No. 1 without any legal necessity, Plaintiff also failed to prove, Defendant No. 1 entered into agreement of sale as manager of the family. However, decreed Plaintiffs suit granting relief of refund of earnest money with interest at the rate of 6% per annum from the date of appellate decree.

5. Instant second appeal was admitted for hearing by this Court on 28-10-1988 on the following substantial questions of law:

i. Whether the Respondents were estopped from raising the plea of legal necessity in view of their consent to the execution of the agreement for sale of the land in suit to the Plaintiff/Appellant as held by the trial Court ?

ii. Whether in the event of decree for refund of the amount of consideration, the Plaintiff/Appellant is entitled for interest from the date of agreement and not from the date of decree of the lower appellate court ?

6. Shri Sanjay S. Agrawal, learned Counsel for the Plaintiff would submit, agreement of sale (Ex. P-l) has been executed by Defendant No. 1 as a Karta of joint Hindu family with the consent and in presence of other Defendants. The sale deed was to be executed























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