Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Online)(Bom) 25798

2023:BHC-AUG:16385

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD

APPEAL FROM ORDER NO. 25 OF 2023

Smt. Manisha w/o. Balkrushna Kode,
Age: 70 years, Occ : Household
R/o. Plot No.18, Shivtirth, Ganesh Nagar,
Pipeline Road, Satpur,
Nashik, Maharashtra .. APPELLANT
[Orig. defendant]
VERSUS
Shri. Madanlal s/o. Uttamchand Desarda,
Age: 68 year, Occ : Agriculture & Business
R/o. Sarafa road, Aurangabad.
Through G.P.A.
Shri Anurag s/o. Devendra Desarda,
Age: 24 years, Occ : Business
R/o. Sarafa road, Aurangabad. .. RESPONDENT
[Original Plaintiff]

Mr.Mahesh S. Deshmukh, Advocate holding for Mr.Sanket S. Kulkarni, Advocate for the appellant.
Mr.A.P.Bhandari, Advocate for the respondent

CORAM : ARUN R. PEDNEKER, J.

Reserved on : 30.06.2023
Pronounced on : 02.08.2023

Advocates:
For the Appellants/Petitioners: Mahesh S. Deshmukh, Sanket S. Kulkarni
For the Respondents: A.P. Bhandari

An appellate court will not disturb a trial court's discretionary interlocutory injunction unless it is shown to be perverse. Furthermore, agreements to sell do not require stamp duty as conveyances or compulsory registration unless the possession of the subject property is expressly transferred to the purchaser.

Headnote:(A) Specific Relief Act, 1963 - Section 14 - Suit for specific performance - Maintainability of suit without declaration regarding earlier agreement cancellation - Whether unilateral cancellation is legal and whether time was essence of contract must be determined at trial stage. Determining the validity of rescission or revocation of an agreement requires adjudication by the court, as unilateral cancellation cannot be raised as an absolute defense at the interlocutory stage. (Paras 11, 22, 23, 26)

(B) Maharashtra Stamp Act - Article 25, Schedule-I - Agreement to sell - Possession of property - Requirement of stamp duty as conveyance - Stamp duty as conveyance is only applicable if possession of the property is transferred or agreed to be transferred at the time of or before the execution of the agreement; where possession is conditional upon the execution of a final deed, the initial instrument does not constitute a conveyance. (Paras 19, 24, 26)

(C) Registration Act, 1908 - Section 17(1A) - Compulsory registration - Agreement to sell - Contract for transfer of immovable property for part performance - Where possession is not transferred to the transferee, the document is not compulsorily registerable. (Paras 18, 26)

(D) Appellate practice - Scope of interference - The discretion of the trial court to grant temporary injunction should not be interfered with in appeal unless the decision is found to be arbitrary, perverse, or ignores settled legal principles. (Paras 25, 29, 30)

Facts of the case:
The appellant challenged an injunction order restraining the creation of third-party rights in a suit for specific performance of an agreement to sell. The appellant contended the agreement was unilaterally cancelled, was insufficiently stamped, required compulsory registration, and was unenforceable due to drafting errors. The trial court granted the injunction, leading to this appeal.

Findings of Court:
The court held that the suit was maintainable at the preliminary stage, as the legality of the purported termination required evidence to be led in trial. The agreement did not qualify as a conveyance requiring stamp duty because possession was not intended to be transferred until full payment was made. Similarly, registration was not compulsory as the criteria for part performance regarding transfer of possession were not met.

Issues: Whether the suit was maintainable without a formal declaration challenging the cancellation notice; whether the agreement required compulsory registration and higher stamp duty; and whether the appellate court was justified in interfering with the trial court's discretionary injunction.

Ratio Decidendi: Unilateral cancellation of an agreement cannot be accepted as a complete defense during interlocutory proceedings; the trial court must determine the essence of the contract and the validity of termination. Furthermore, documents that do not effect the transfer of possession do not trigger the legal requirements for registration or stamps applicable to conveyances. Appellate courts should respect discretionary trial orders unless they are proven to be perverse.

Result: Appeal disposed of; trial court directed to decide the suit expeditiously.

JUDGMENT :

1] By the present Appeal from Order, the appellant is challenging the order dated 24.01.2023 passed by the Civil Judge Senior Division, Aurangabad in Special Civil Suit No.1186 of 2022 in Exh.5 application, whereby the Civil Judge Senior Division clamped injunction against the present appellant – original defendant, directing the defendant not to create third party interest in the suit property during pendency of the Special Civil Suit No.1186 of 2022.

Facts giving rise to the filing the present Appeal from Order can be briefly summarized as under:

2] The respondent – plaintiff is an agriculturist and deals in real estate. The appellant – defendant is the lawful owner and possessor of the land to the extent of 1 Hector 21 R. land out of Gat No.114/1 situated at village Nakshatrawadi, Aurangabad. The appellant – defendant entered and executed agreement to sell in favour of the respondent – plaintiff on 17.06.2002. As the defendant allegedly failed to perform her part of contract, the plaintiff filed Regular Civil Suit No.113/2014 for specific performance of contract and the said suit came to be dismissed. Against the said dismissal, Regular Civil Appeal No.287 of 2016 is filed and the same is still pending before the Ad-hoc District Judge-2, Aurangabad.

3] It is the case of the plaintiff that during the pendency of the said Appeal, the defendant and her husband approached to the plaintiff and offered to compromise the matter on payment of higher consideration amount for the suit land and to settle the matter once for all. The plaintiff considering his own old age and that of the defendant too and with a view to settle the old litigation agreed for the same. The defendant thereby entered into a new agreement with plaintiff vide notary registered agreement dated 07.05.2022 in presence of witnesses including her husband, her then lawyers and grand-son of the plaintiff for sale of the suit land.

4] It is further the case of the respondent – plaintiff that in terms of the agreement, the plaintiff has paid the defendant Rs.10,00,000/- vide cheque No.479446 drawn on Axis Bank on the very date of the agreement out of the agreed total consideration amount of Rs.1,11,00,000/- [One Crore and Eleven Lakh rupees only]. The total consideration amount was agreed to be fixed at Rs.1,11,00,000/- for the total land of 3 Acre under the agreement and the remaining consideration amount of Rs.1,01,00,000/- was to be paid by the plaintiff at the time of execution of the sale deed in favour of the plaintiff by the defendant.

5] It is further the case of the plaintiff that the initial payment of Rs.10,00,000/- was received and acknowledged by the defendant and that the plaintiff was required to pay the remaining amount within the period of four months from the date of execution of the said agreement. Thereafter, the plaintiff got prepared demand drafts of the remaining consideration amount. Thereafter the plaintiff and his grand son approached and contacted the defendant many times, but the defendant tried to avoid talking or meeting the plaintiff but assured the plaintiff to execute the registered sale deed in his favour, but avoided on several grounds to execute the sale deed. It is further the case of the plaintiff that the plaintiff called upon the defendant by issuing legal notice through his advocate on 07.10.2022 to remain present on the given date before Sub Registrar Office and to perform her part of contract but the defendant failed to comply the notice duly served on the defendant so also the defendant did not reply to the said notice. The plaintiff had also registered lis pendence of the suit property vide deed No.1071/2014 dated 03.03.2014.

6] It is further the case of the plaintiff that the defendant with malafide intention and to deceive the lawful rights and interest of the plaintiff, transferred the odd amount of Rs.11,00,000/- in the account of the plaintiff’s daughter in law without his permission or consent. It is further

Click Here to Read the rest of this document

2023 Supreme(Online)(Bom) 25798

Cases Referred (5)