Back
2018 Supreme(P&H) 4459
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Anil Kshetarpal, J.
Dharam Pal - Appellant
Versus
Karanvir - Respondent
RSA No.647 of 2012 (O&M), RSA No.1629 of 2012 (O&M) and RSA No.1084 of 2017 (O&M)
Decided On : 11-09-2018
Mr. Ramesh Malik, Advocate, for the Appellant; Mr.Kulvir Narwal, Advocate, for the Respondent
The court emphasized that the relief of specific performance of an agreement to sell is an equitable relief, and discretion vests with the court to grant or not to grant the relief based on the nature of the transaction.
Headnote:
specific performance - agreement to sell - - [Summary of the acts and sections referenced and discussed by the court]
Fact of the Case:
The plaintiff filed a suit for possession by way of specific performance of an agreement to sell a land. The defendant claimed it was a loan transaction, not a sale agreement.
Finding of the Court:
The court found that the agreement to sell was in fact a loan transaction, not a sale agreement, and the relief of specific performance should not have been granted.
Issues: The main issue was whether the agreement to sell was a loan transaction or a valid sale agreement.
Ratio Decidendi: The court held that the relief of specific performance of the agreement to sell is an equitable relief and discretion vests with the court to grant or not to grant the relief. The court found that the transaction was a loan, not a sale agreement, and the relief of specific performance should not have been granted.
Final Decision: The appeal for specific performance of the agreement to sell was partly allowed, and the plaintiff was held entitled only to the relief of refund of earnest money along with interest. The suits for injunction and challenging the relinquishment deed were also partly allowed.
JUDGMENT
Anil Kshetarpal, J.(Oral) - This judgment shall dispose of three appeals bearing RSA Nos.647 of 2012, 1629 of 2012 and 1084 of 2017 as parties are common and decision in one i.e. RSA No.647 of 2012 would govern the decision in remaining appeals.
2. The defendant-appellant is in the regular second appeal against the judgment passed by both the courts below, decreeing the suit for possession by way of specific performance of the agreement to sell dated 28.10.2003 with respect to land measuring 14K-9M which was already mortgaged with a P.A.R.D Bank, Jhajjar. As per the agreement to sell, the total sale consideration agreed between the parties was Rs. 3,20,000/- out of which 1,70,000/- is stated to have been paid as earnest money and the target date for execution and registration of the sale-deed was fixed after a period of one year i.e. 27.10.2004. The plaintiff has also pleaded that on the directions of the defendant, loan of Rs. 1,75,097/- was deposited in the bank and obtained clearance and the defendant had agreed to repay Rs. 25,097/-.
3. The second appeal is arising out of a suit filed for injunction by the plaintiff against the defendant, whereas in the third suit plaintiff has challenged transfer deed executed by the defendant in favour of his two sons.
4. The defendants took a stand that in fact, it was a loan transaction as he was in need of money and he had taken a loan of Rs. 1,40,000/- with interest @ 1% per month and the plaintiff got his thumb impressions. He further plead that his two sons are working as drivers with Amar Brick kiln Company on monthly salary of Rs. 7,000/- per month and both the sons had deposited the amount with the brick kiln owner and the amount which has been deposited in the bank, is in fact amount received from the aforesaid Brick kiln and defendant being uneducated took the plaintiff who has retired as Head Master from a School with him and plaintiff taking advantage of the aforesaid fact deposited the amount of loan while mentioning his own name as the person who is depositing the amount and now by taking benefit of his name on receipts, claims that he has deposited the amount from his own funds. The defendant further pleaded that family of the plaintiff-defendant belongs to same area and they are very well known to each other.
5. In evidence, both the marginal witnesses of the agreement to sell have appeared. DW-4, a marginal witness of the agreement to sell, has been examined by the defendant who has stated that it was the loan transaction, whereas Kartar Singh Numberdar has been examined as PW-6, who, in his cross-examination, has admitted that the defendant had taken loan at 1% per month rate of interest.
6. Both the courts mechanically decreed the suit without considering the fact that the relief of specific performance of the agreement to sell is an equitable relief and discretion vest with the court to grant or not to grant the relief of specific performance of the agreement to sell. Learned first appellate court, while dismissing the appeal, put entire onus on the defendants as if they were required to prove that agreement to sell was not a loan transaction. In fact, the defendants had already discharged their onus by examining Indraj, one of the marginal witness of the agreement to sell and in the crossexamination of Kartar Singh, Numberdar, other attesting witness of the agreement to sell, who has been examined by the plaintiff, extracting that in fact it was a loan transaction. In such circumstances, in the considered opinion of this Court, both the courts committed an error in granting specific performance of the agreement to sell.
7. In fact, both the courts below have failed to exercise discretion. Hence this Court is of the considered view that the discretion should not have been exercised in favour of the plaintiff for the following reasons, i.e. (i) both the ma
