IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RAJBIR SEHRAWAT, J.
Lokesh and others - Appellants
Versus
Rameshwar Tyagi - Respondent
RSA No. 1973 of 2013 (O&M)
Decided on : 11-12-2017
Specific Relief Act - Sale of Land - 13, 41(h) - Summary of Acts and Sections: The court discussed the provisions of the Specific Relief Act, particularly Sections 13 and 41(h), and their interpretation in the context of the plaintiff's claim for recovery of earnest money. The court emphasized the plaintiff's right to ask the vendor to clear the title if the vendor does not have the requisite title to pass on to the vendee, as per Section 13. The court also highlighted that the suit for recovery without seeking specific performance of the agreement is maintainable, contrary to the lower courts' findings based on Section 41(h).
Fact of the Case:
The plaintiff entered into an agreement to purchase land from the defendant, who failed to execute the sale deed due to lack of title. The plaintiff sought refund of the earnest money, but the defendant claimed the plaintiff was not entitled to recovery as he did not file a suit for specific performance.
Finding of the Court:
The court found that the defendant did not have the requisite title to pass on to the plaintiff, and the agreements claimed by the defendant in his favor were not proved. The court determined that the plaintiff had rightly terminated the agreement due to the defendant's failure to perform, and the suit for recovery was maintainable despite not filing a suit for specific performance.
Issues: The issues revolved around the defendant's lack of title, the plaintiff's right to seek recovery without filing a suit for specific performance, and the forfeiture of earnest money.
Ratio Decidendi: The court held that the plaintiff had the right to ask the vendor to clear the title as per Section 13 of the Specific Relief Act and that the suit for recovery was maintainable despite not seeking specific performance. The court also determined that the forfeiture of earnest money could only be a consequence of non-performance from the vendee's side and not the consequence of determination of the agreement by the vendee due to the default of the vendor.
Final Decision: The court set aside the judgments and decrees passed by the lower courts and ordered the suit filed by the plaintiff to be decreed with costs.
RAJBIR SEHRAWAT, J.
1. The present appeal has been filed, by the legal representatives of Satish Kumar, the plaintiff; against the concurrent judgment and decree passed by the Courts below; whereby the suit filed by the above said Satish Kumar for recovery of Rs. 10,00,000/- from the defendants, which was paid by him as earnest money in an agreement to sell, has been dismissed. For convenience the parties would be referred to herein as the plaintiff and the defendant as they were described in original suit.
2. The brief facts, as pleaded by plaintiff and mentioned in the judgment of the lower Appellate Court; are that on 03.04.2006, the defendant agreed to sell the land measuring 28 Kanals 11 Marlas, comprised in Khasra Nos. mentioned in the agreement, situated in Village Kheri Tagga, Tehsil Gannaur, District Sonepat, to the plaintiff for a sale consideration at the rate of Rs. 17,70,000/- per acre. He had received Rs. 10,00,000/- from the plaintiff. The target date for execution of the sale deed was fixed as 29.05.2006. It was not recorded in the agreement that the defendant was the absolute owner of the land. However, the agreement stipulated that the defendant had agreements in his favour from several persons, who were the co-sharers in the land, to purchase this land and those agreements contained stipulations that the defendant could get the sale deed executed in his favour or in favour of the somebody else. On the target date i.e. 29.05.2006, the sale deed could not be executed because the defendant could not arrange for NOC qua the suit land and could not bring all the abovesaid co-sharers to execute the sale deed in favour of the plaintiff. Since, the defendant kept postponing the matter; expressing his inability to execute the sale deed because of the lack of title, therefore, the plaintiff asked him either to refund the earnest money or to get a General Power of Attorney (GPA) from all his vendors, so as to execute the sale deed in favour of the plaintiff. However, instead of either returning Rs. 10,00,000/- to him or getting GPA from his vendors, the defendant hatched a conspiracy to usurp the amount of earnest money by hook or by crook. Hence, the defendant got the notice dated 09.06.2006 served upon the plaintiff through his Advocate. However, the plaintiff also replied to the notice through Advocate on 15.06.2006 and asked the defendant that he should acquire the title qua the land in question and inform the plaintiff about the date of executing the sale deed, otherwise the plaintiff would be entitled to the refund of Rs. 10,00,000/-, besides damages and interest at the rate of 18% per annum. However, instead of acquiring the title of the land to be sold by him to the plaintiff, the defendant again got served a notice dated 19.06.2006, by way of rejoinder to the reply of the plaintiff. Faced with the situation, the plaintiff again sent a final reply dated 04.07.2006 to the defendant. In this letter, it was stated that the plaintiff and his brother will obtain the equal share, each having half share in the land being purchased, and that they have got sufficient amount in their bank accounts. It was further stated in this letter that till date, the defendant was not having the title of the suit land to confer the same upon the plaintiff; by way of executing the sale deed in favour of the plaintiff. Therefore, it was called upon the defendant that he should either obtain the sale deed in his favour from all the original owners or he should, at least, obtain the GPA from all the original owners-with whom he claims to have agreement to purchase the suit land, so that he can execute the sale deed in favour of the plaintiff. It was further written in this communication that the defendant should inform the plaintiff about acquiring of the GPA in his favour upto 31.07.2006. Otherwise, the agreement shall stand cancelled and the plaintiff will be entitled for refund of the earnest money. By this communication, the
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