LAWS(MPH)-1960-7-32

MANAKLAL BHAGCHAND SAHU Vs. BHAGWNDAS HIRALAL CHAURASI

Decided On July 08, 1960
MANAKLAL BHAGCHAND SAHU OF AMARWARA Appellant
V/S
BHAGWNDAS HIRALAL CHAURASIAHAURASIA OF AMARWARA Respondents

JUDGEMENT

(1.) THIS second appeal arises from a suit for specific performance on foot of a bond dated 1-8-1960 (Exh. P -l), under which the respondent took a loan of Rs. 2,500 from the appellant with the stipulation that if he did not repay the loan within one year from that date, he would be liable to sell his house and badi, described therein, in favour of the creditor. As the defendant did not repay the loan within the time fixed in the bond, the creditor sued for specific performance of the contract for sale. The suit was resisted by the defendant, contending, inter alia, that he could not be forced to sell the immovable property just because he could not repay the loan within the stipulated time. The trial Court passed a decree for specific performance, but the first appellate Court modifiod it and, rejecting the first prayer in the plaint, allowed the alternative relief of a decree for Rs. 2,500. It also allowed interest on Rs. 2,500 at 4 per cent per annum from the date of the suit to the date of realisation. The plaintiff is aggrieved by this modification in the trial Court's decree and, in this second appeal, prays that a decree for specific performance be passed.

(2.) SHRI Pandit, learned counsel for the appellant, contends that the first appellate Court was not right in refusing specific performance on the ground that the sale of the property was barred under section 165 (4) of the M. P. Land Revenue Code, 1959. Learned counsel points out that in order to get benefit under section 165 (4) of the Code, it was necessary for the defendant to allege how much land he had. Moreover, the property, which the debtor undertook to sell, is not agricultural land inasmuch as it consists of a house and a badi. Similarly, the first appellate Court was not justified in raising a new plea of undue influence, which was not contained in the written statement. SHRI R. S. Dabir, learned counsel for the respondent, concedes these points. He supports the decree of the first appellate Court merely on the ground that the stipulation to sell the immovable property, in case of default of payment of loan within the time fixed, was penal and the Court was entitled to relieve the debtor under section 74 of the Contract Act.

(3.) IT is an argument that where the value of such immovable property is equal to the amount due or somewhere about that, the stipulation should not be considered" as penal; such a stipulation should be held to be penal only where the value of the property is disproportionate to the amount payable by the debtor. Shri Pandit says that the value of the house in the present case is not more than Rs. 2,500, while, according to Shri Dabir, its value is about Rs. 5,000. In my opinion, the argument cannot be accepted. Apart from his own assessment of the value of a house, its owner may have certain sentiments attached to it. Moreover, if the value of the house is not, in the eyes of the debtor, higher than the amount payable by him, he would not claim relief from the penalty clause.