BANSHILAL SONI Vs. KASTOOR CHAND BEGANI

JUDGEMENT

(1.) Challenge in this appeal is to the judgment rendered by a Division Bench of the Madhya Pradesh High Court at Jabalpur. By the impugned judgment, the High Court held that the Trial Court had erroneously accepted the explanation given by the appellant. It accepted the plea of the defendant-respondent that there was abandonment of rights under the contract by the plaintiff. The plaintiff was, therefore, held to be not entitled to claim for specific performance of the contract. However, directions were given for payment of rupees one lakh in view of the wrong retention of a sum of Rs.25,000/- of the plaintiff by the defendant. The original plaintiff Banshilal Soni is dead and his legal heirs are the appellants.

(2.) Background facts in a nutshell are as follows: The appellant-plaintiff instituted the Civil Suit No.8-A/92 for specific performance of contract for sale of house No.11/198 situated at Halwai Line, Raipur as per the agreement dated 10.10.1989. According to the plaintiff, the defendants had agreed to sell the suit house to the plaintiff, for a consideration of Rs.5 lakhs by execution of an agreement for sale of the same on 10.10.1989. In pursuance of the agreement dated 10.10.1989, the defendant No.1 had taken Rs.50,000/- as an advance/earnest money by cheque No.062037 dated 11.10.1989 drawn on Central Bank of India, Raipur. The defendants had undertaken to satisfy the plaintiff about their clear title to obtain No Objection Certificate from Income Tax Department and to complete all requisite formalities before the registration of the sale deed. The sale deed was to be executed on 10.4.1991 and physical possession of the house was to be given by that date. The defendants had conveyed that the suit house was free from all encumbrances. It was pleaded in the plaint that the plaintiff was and is still ready to perform his part of the contract to pay the balance consideration and get the sale deed executed and registered in his favour. The plaintiff had given a registered notice on 15.7.1991 through his Advocate requiring the defendants to execute the sale deed and get the same registered and to hand over physical possession of the suit house. However, the defendants, through their counsel, falsely alleged that the plaintiff had no sufficient fund and thus was responsible for breach of contract. It was put-forth that the defendants did not take any step to obtain a clearance certificate from the Income Tax Department and were taking steps to sell the suit house to some one else at a higher price. With the aforesaid averments, the plaintiff sought relief for issue of a direction to the defendants to execute the sale deed and get the same registered in favour of the plaintiff and to put the plaintiff in actual physical possession and on his failure to comply with the direction of the Court, for execution of the sale deed through Court. There was also a prayer for grant of any other relief in the circumstances of the case.

(3.) The defendants resisted the relief sought in the suit. According to them, the defendant No.2 had not signed the above agreement. In the year 1989, the defendant No.1 had suffered loss in his business and was in financial difficulty and, therefore, he approached the plaintiff for financial assistance. The plaintiff had advanced Rs.50,000/- as a loan on the condition, that the defendants shall execute an agreement to sell the suit house as a collateral security for such loan. It is the case of the defendants that the market value of the suit house was Rs.10 lakhs but the defendants were compelled to execute the agreement being in a precarious financial condition. It was also stated that they were not required to obtain any clearance certificate from the Income Tax Department and had never agreed to hand over the possession of the suit house after execution of sale deed. They disputed the plaintiffs readiness and willingness. It was also the case of the defendants before the Court below that the plaintiff had accepted Rs.25,000/- on 3.4.1991 towards a part of the loan advanced by him and granted a receipt thereof. It was also pleaded that the contract is not specifically enforceable as the agreement itself stipulates that the parties had agreed that the defendants shall pay Rs.2 lakhs to the plaintiff in case the contract was not completed. It was further set forth that in case the Court thinks it fit, it may grant compensation to the plaintiff, instead of issuing a direction for execution of the sale deed. It was also putforth by the defendants that the time was the essence of the contract and the same having not been given due compliance, the plaintiff was not entitled to any relief under the law. Lastly, it was contended by the defendants that the plaintiff having voluntarily accepted the return of Rs.25,000/- he had abandoned his claim of specific enforcement of the contract.