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IN THE HIGH COURT OF ALLAHABAD
N. N. MITHAL, G. D. DUBEY
BISHAMBHAR NATH AGARWAL - Appellant
Versus
KISHAN CHAND - Respondents
First Appeal 260 Of 1983
Decided On : 10/23/1989
SPECIFIC PERFORMANCE - COMPROMISE - MERGER INTO DECREE - EXECUTABILITY - TIME ESSENCE OF CONTRACT - READINESS AND WILLINGNESS - URBAN LAND CEILING AND REGULATION ACT, 1976 - APPLICABILITY TO COURT-DIRECTED TRANSFERS.
Fact of the Case:
Plaintiffs filed a suit for specific performance of a compromise agreement entered into in a previous suit, wherein the defendant agreed to execute a reconveyance deed in favor of the plaintiffs upon payment of a certain sum within a specified period. The plaintiffs claimed that they were ready and willing to perform their part of the contract but the defendant failed to execute the sale deed.
Finding of the Court:
The court held that the compromise agreement had merged into a decree and therefore, the suit for specific performance was not maintainable. The court further held that the plaintiffs had failed to prove that they were ready and willing to perform their part of the contract as they had not complied with the terms of the compromise agreement regarding the mode of payment.
Issues: 1. Whether the compromise agreement had merged into a decree and therefore, the suit for specific performance was maintainable? 2. Whether the plaintiffs had proved that they were ready and willing to perform their part of the contract?
Ratio Decidendi: 1. The court held that the compromise agreement had merged into a decree and therefore, the suit for specific performance was not maintainable. The court relied on the fact that the compromise agreement had been incorporated into the decree and that the decree was executable. The court also held that the plaintiffs could have executed the sale deed through the court in execution proceedings if the defendant had failed to do so. 2. The court held that the plaintiffs had failed to prove that they were ready and willing to perform their part of the contract. The court noted that the plaintiffs had not complied with the terms of the compromise agreement regarding the mode of payment. The court also held that the plaintiffs had not examined the financiers to show that they were ready and willing to hand over the money at the time of execution of the sale deed.
Final Decision: The court allowed the appeal, set aside the judgment and decree of the lower court, and dismissed the suit.
( 1 ) THIS appeal has been preferred against the judgment and decree passed by Fourth Additional District Judge, Agra. The lower Court has decreed the suit of the respondents for specific performance of the contract. The defendant No. 1 has been directed to execute a sale-deed within a period of three months after receiving the amount of sale consideration and rent up to 31st October, 1974-75 as is disclosed in the compromise entered into between the parties. The defendant No. 1 was further directed to obtain permission from the District Magistrate, if necessary. It was ordered that in case defendant No. 1 failed to comply the decree, then the sale-deed would be executed through Court at the cost of the appellant. It has also been declared that after 31st October, 1975, the plaintiffs and defendants 2 to 6 are not required to pay rent or interest to defendant No. 1.
( 2 ) IT is an admitted case between the parties that the house in dispute situated at Agra belonged to the plaintiffs. The sale-deed in respect of this property was-executed by the plaintiffs in favour of defendant No. 1 on 25-4-1968. The plaintiff-respondents, however, continued to reside in this house. They had agreed to pay rent. It was contended on behalf of the plaintiff-respondents that they had made improvements in the house. It was worth rupees two lacs in 1968. As they were in need of money, they had approached defendant No. 1. The defendant No. 1 had agreed to pay Rs. 20,000/ -. The defendant No. 1 is a shrewd lawyer. He got the sale-deed executed on 25-4-1968 and also as a security for his money advanced as a loan got a rent note executed. There was no transfer of possession and the plaintiff-respondents continued to be in possession. Later on the defendant no. 1 changed his mind and started asserting his ownership on the property in dispute. Consequently plaintiffs had to file suit No. 293 of 1973 Kishan Chand v. Bishambhar Nath Agarwal in the Court of Civil Judge, Agra. It is also worth mentioning that the defendant No. 1 also filed suit No. 30 of 1973 in the Court of District Judge, Agra for ejectment and realisation of rent against the plaintiff respondents.
( 3 ) IT is an admitted fact that a compromise had taken place between the parties of the above two suits. It was agreed by this compromise that the plaintiff-respondents would pay a sum of Rs. 1,02,120/- (Rupees one lac two thousand, one hundred twenty only) to the defendant within a period of two years starting from 1-11-1973 and latest up to 31st October, 1975. The plaintiffs-were also given liberty to pay it in instalments or in one lump sum at their convenience. The plaintiffs were to pay interest in the form of rent at the rate of Rs. 1,530/- per mensem. At such payment, it was agreed, the defendant No. 1 will execute the reconveyance deed in favour of the plaintiff of the property in dispute. It was contended on behalf of the plaintiff that on account of his difficulty the interest amount could not be paid. They could pay only a sum of Rs. 9,180/ -. However, they had made arrangement for the payment of entire sale consideration and the entire balance of interest in the form of loan and requested the defendant No. 1 to execute the sale deed in favour of the plaintiff-respondents by serving a notice on 23-10-1975. It had been urged that the defendant No. 1 neither obtained the permission to sell nor took any steps to obtain permission. Despite service of the notice the defendant No. 1 did not send any reply. The plaintiffs had also sent a telegram on 29-10-1975 requesting the defendant No. 1 to come with permission and execute the sale-deed as agreed upon. Ultimately the plaintiff No. 3 Mahesh Chandra, along with his sisters husband M. C. Agarwal and the husband of the daughter of the plaintiffs elder sister R. C. Agarwal and some other persons, approached the defendant No. 1 to execute the sale deed after obtaining the permission from District Magistrate but the defendant No
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