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2024 Supreme(Online)(Bom) 5388
BOMBAY HIGH COURT
Sharmila U. Deshmukh, J
SHRI. VITTHAL KALYANRAO CHOUNDGUNDI AND ANR. – Appellant
Versus
SMT. SHUBHANGI RAJENDRA GURAV – Respondent
SA 259 / 2017
Adv. Rohan P. Surve for the Appellant. Adv. Sushant Prabhune (through V.C.) a/w Mamta Pandey for the Respondent.
Specific performance of a contract requires a valid and enforceable agreement, with clear terms agreed upon by both parties, and readiness to perform by the Plaintiff.
Headnote:(A) Specific Relief Act, 1963 - Section 10 - Specific performance of contract - The Plaintiff sought specific performance of an agreement of sale dated 7th November, 2008, for property owned by Defendants - The Defendants failed to clear encumbrances, preventing the Plaintiff from obtaining a loan to complete the sale - The Trial Court and Appellate Court found the Plaintiff ready and willing to perform her part of the contract, and the Defendants in breach of the agreement. (Paras 8, 9, 15, 26)
(B) Contract Law - Validity of contract - The court emphasized that a valid and enforceable contract must exist for specific performance to be ordered, and the terms must be clear and agreed upon by both parties. (Paras 15, 26)
Facts of the case:
The Plaintiff entered into an agreement for sale with the Defendants for Rs.10,00,000/- and paid Rs.2,25,000/- as part consideration. The Defendants failed to clear a loan encumbrance, which was a pre-condition for the sale. The Plaintiff issued a legal notice but received no response.
Findings of Court:
The courts found that the Defendants were in breach of the agreement as they did not clear the encumbrance, and the Plaintiff was ready and willing to perform her part of the contract. The agreement was valid and enforceable.
Issues: The main issue was whether the Defendants were required to specifically perform the agreements pertaining to the suit property in favor of the Plaintiff.
Ratio Decidendi: The court held that the Defendants had executed the agreement with full knowledge of its terms and failed to comply with their obligations, justifying the order for specific performance.
Result: Appeal dismissed.
JUDGMENT :
1. Second Appeal is at the instance of the original Defendant Nos. 1 and 2 suffering concurrent findings decreeing the Special Civil Suit No. 519 of 2010 filed by the Respondent-Plaintiff herein. For the sake of convenience, the parties are referred to their status before the Trial Court.
FACTUAL MATRIX :
Plaint :
2. Special Civil Suit No. 519 of 2010 was instituted seeking specific performance of agreement of sale dated 7th November, 2008 executed between the Plaintiff and the Defendants and registered in the ofÏce of Sub Registrar Haveli at Sr. No. 9255. The suit property is described as 2R land along with RCC construction admeasuring 975 sq. ft. Grampanchayat property No. 7 ward No. 6 Urulikanchan situated on part of Gat No. 187, District Pune, owned by Defendant No. 1. An agreement for sale was executed on 7th November, 2008 wherein the agreed consideration was shown as Rs.10,00,000/- and out of the total consideration of Rs.10,00,000/-, the Plaintiff paid Rs.25,000/- by way of cash and Rs.2,00,000/- was paid vide cheques dated 11th November, 2008 and 13th November, 2008 to the Defendants.
3. As per the terms of agreement for sale, the balance amount of Rs.7,75,000/- was to be paid after the Plaintiff obtains bank loan within period of two months. As per Clause 4(h) of the agreement for sale dated 7th November, 2008, the loan of Rs.1,50,000/- obtained by the Defendants from Hanuman Gramin Bigar Sheti Patsanstha Maryadit was to be repaid by the Defendants and clearance certificate to be handed over to the Plaintiff before the execution of sale deed.
4. The Plaintiff applied for loan to various banks and showed her willingness to execute the sale deed. However, the Defendant failed to clear the encumbrance of Hanuman Gramin Bigar Sheti Sahakari Pathsanstha Ltd (Hanuman Gramin) and to obtain clearance certificate without which the Plaintiff’s loan could not be sanctioned. The Defendants avoided to comply with their obligations of executing the sale deed and delivery of possession and thus legal notice was issued on 5th June, 2009 to which there was no response from the Defendants. As such, suit came to be filed seeking specific performance of the agreement for sale.
WRITTEN STATEMENT OF THE DEFENDANTS :
5. The case of the Defendants was that due to financial difÏculties by reason of the various loans as well as the financial burden of educational expenses of the children and the marriage of the daughter being fixed, the Defendants decided to sell their house. The Defendants informed the Plaintiff that there was a loan of Rs.1,00,000/- of one Mahatma Gramin Bigarsheti Sahakari Patsanstha Maryadit, loan of Rs.75,000/- of Gram Rajya Nagari Sahakari Patsanstha Maryadit and loan of Rs.1,50,000/- of Hanuman Gramin Viaks Bigarsheti Sahakari Patsanstha Maryadit. The Defendants were informed that the transaction would be cash transaction and amount of loan would be paid in lumpsum. The consideration agreed between the parties was of Rs.10,25,000/- out of which Rs.25,000/- was given on 29th August, 2008 and Visar Pavti/agreement of sale was notarized. The balance amount was to be paid within a period of 6 months from the date of execution of sale deed. On 7th November, 2008 the agreement for sale was registered with Sub Registrar Haveli. The document was handed over to the Defendants without being permitted to read the contents.
6. It was contended that as per the Visar Pavti dated 29th August, 2008, the consideration was Rs.10,25,000/- whereas in the agreement for sale dated 7th November 2008, the consideration is shown as Rs.10,00,000/- and the time for payment of balance consideration was within period of 6 months from 29th August, 2008 to 9th March, 2009. The Defendants were informed that for the purpose of assisting the Plaintiff for obtaining loan the document was required to be registered and the agreement dated 7th November, 2008 came to be registered. On 27th December, 2008 the Plaintiff came to the house of the Defendants a
