IN THE HIGH COURT OF CHHATTISGARH
Prashant Kumar Mishra, Rajani Dubey, JJ.
Bhagirathi Dewangan - Appellants
Vs.
Jhaduram - Respondent
FA No. 202 of 2016
Decided On : 18-01-2021
Specific Performance - Sale of Land - Agreement - 25-7-2002 - Refund of Amount - Rs. 14,25,000/- - Interest - 6% per annum - Failure to Execute Sale Deed - Loan Transaction - Judicial Discretion - Decree for Specific Performance - Refund Decree
Fact of the Case:
The appeals arose from a judgment and decree partly allowing a civil suit for the sale of land and refund of Rs. 14,25,000/- with interest at 6% per annum. The plaintiff sought a decree for specific performance, while the defendants sought to challenge the refund decree.
Finding of the Court:
The trial Court denied the decree for specific performance, considering the agreement as primarily a security for a loan transaction, and not a simple agreement for sale of land. The Court found that the agreement was for the advancement of a loan, and thus, exercised judicial discretion to deny the decree for specific performance. However, the Court passed a decree for the refund of the loan amount with interest against the defendants.
Issues: The issues involved the nature of the agreement, the intent of the parties, and the exercise of judicial discretion in granting specific performance.
Ratio Decidendi: The Court held that a decree for specific performance cannot be granted merely because the execution of the agreement is proved. The real intent of the parties at the time of execution of the agreement must be considered. If the agreement is found to be for a purpose other than the sale of land, the Court may exercise judicial discretion to deny the decree for specific performance. However, if the agreement is for a loan transaction and the borrower fails to repay, the Court may pass a refund decree.
Final Decision: Both the appeals were dismissed, and no costs were awarded.
JUDGMENT :
Prashant Kumar Mishra, J.
1. Since both the appeals are arising out of same impugned judgment and decree, they are being considered and decided by this common judgment.
2. These two first appeals are arising out of the same judgment and decree dated 30-4-2016 passed by the 9th Additional District Judge, Raipur, in civil suit No. 77-A/12 (Bhagirathi Dewangan v. Jhaduram and Others) partly allowing the suit preferred by the plaintiff - Bhagirathi Dewangan (henceforth 'the plaintiff'). The trial Court, while refusing to pass a decree for specific performance has directed for refund of amount to the tune of Rs. 14,25,000/- [along with interest at the rate of 6% per annum from the date of filing of suit i.e. 27-2-2003 till the date of actual payment] paid by the plaintiff to the defendants Nos. 1 and 2 namely; Jhaduram and Kheda Bai, respectively (henceforth 'the defendants Nos. 1 and 2') at the time of agreement.
3. While the plaintiff has preferred FA No. 202 of 2016 praying for a decree for specific performance, the defendants Nos. 1 and 2 have preferred FA No. 260 of 2016 against the trial Court's judgment and decree for refund of Rs. 14,25,000/- along with interest at the rate of 6% per annum from the date of filing of suit i.e. 27-2-2003 till the date of actual payment.
4. The parties entered into an agreement dated 25-7-2002 for sale of land admeasuring 0.841 hectares bearing khasra No. 491 at village Gogaon for a sum of Rs. 14,25,000/-. It was stipulated in the agreement that the defendant Nos. 1 and 2 shall return the amount to the plaintiff by 31-12-2002 failing which the plaintiff shall be entitled to get the sale deed registered on or before 31-1-2003 with further stipulation that if the sale deed is not executed by the said date the agreement shall fail. According to the plaintiff he paid Rs. 14,25,000/- to the defendant Nos. 1 and 2 and obtained physical possession of the land, but the defendant Nos. 1 and 2 neither repaid the amount nor executed the sale deed, therefore, the suit was filed. It was also pleaded that the plaintiff purchased the requisite stamp papers on 24-1-2003 and the draft sale deed was typed, but the defendant Nos. 1 and 2 appeared before the Sub Registrar to refuse execution of sale deed.
5. The plea of defendant Nos. 1 and 2 is that the plaintiff has a tailoring shop and is also engaged in money lending. The defendant No. 1 was in need of funds for marriage of his daughter, therefore, he had obtained loan of Rs. 70,000 - 80,000/- in installments from the plaintiff. Being in a dominating position the plaintiff obtained signatures of the defendant Nos. 1 and 2 on blank stamp papers for purchase of the suit land for Rs. 14,25,000/- albeit the market value of the suit land was about Rs. 22.00 - 24.00 lacs on the date of agreement. They also denied that possession of the suit land was delivered to the plaintiff.
6. Initially the trial Court framed 9 issues for determination and after regular trial dismissed the suit bearing civil suit No. 16-A/2004 vide judgment and decree dated 29-3-2005 rendered by the 12 Additional District Judge, FTC, Raipur. Challenging the said judgment and decree the plaintiff preferred FANo. 89 of 2005, which was allowed by this Court by judgment dated 3-7-2012 and the matter was remitted back to the trial Court after framing issues on the question of readiness and willingness, breaches committed by the parties, grant of alternative relief, etc. The present impugned judgment and decree has been passed after trial on the basis of remand order passed by this Court.
7. Mr. B.P. Sharma, learned counsel appearing for the plaintiff, would submit that the agreement having been proved and the trial Court haying found that the plaintiff has already paid Rs. 14,25,000/-, the entire suit should have been decreed. According to him, the trial Court's denial to pass a decree for specific performance is contrary to the settled principles governing specific performance. The plaintiff has
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