2024:BHC-NAG:88
sa 91-2020.odt 1/24
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
SECOND APPEAL NO. 91/2020
1. Ganesh s/o Vithobaji Ninawe,
Aged 41 years, occu: Agriculturist,
R/o Wakodi, Tahsil Saoner,
District Nagpur
2. Laxman s/o Laluji Badhe,
Aged 52 years, occu: Agriculturist,
R/o Ward No.10, Kalmeshwar,
Tah. Kalmeshwar, District Nagpur ... APPELLANTS
...VERSUS…
1. Smt. Sumitra Balkrishna Bobde
(Now deceased without leaving
legal heir)
2. Ravindra s/o Ramaji Shripad
Aged about Major, Occu: Business,
R/o Ward No.2, near Post Office,
Kalmeshwar, Tah. Kalmeshwar,
Dist. Nagpur.
...RESPONDENTS
-----------------------------------------------------------------------------------------
Shri Anil D. Sonak, Advocate for appellants
Shri Nandesh S. Deshpande, Advocate for LR’s for respondents
-----------------------------------------------------------------------------------------
CORAM : SMT. M. S. JAWALKAR, J.
DATE OF RESERVING THE JUDGMENT 01/12/2023
DATE OF PRONOUNCING THE JUDGMENT 03/01/2024
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JUDGMENT
Heard.
2. The present second appeal is filed being
aggrieved by the judgment and decree dated 26/11/2019
passed in Regular Civil Appeal No.566 of 2012 by learned
Ad-hoc District Judge-1, Nagpur arising out of Special
Civil Suit No.968 of 1996 dated 30/11/2009 passed by the
learned Joint Civil Judge, Senior Division, Nagpur.
3. This Court vide order dated 02/03/2020 while
issuance of notice framed following substantial question
of law:
“While reversing the judgment and decree of
the Trial Court, decreeing the suit for Specific
Performance in favour of the appellants,
whether the learned Lower Appellate Court is
right in holding that the agreement for sale is
inadmissible?”
4. By consent of both the parties, the additional
substantial question of law is framed, which is as under:-
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“whether the learned lower Appellate Court was
right in holding that the plaintiffs were not ready
and willing to perform their part of contract ?”
5. The facts of the plaintiff’s case are as under:-
The plaintiff No.1 is an agriculturist and
having agricultural land. Defendant No.1 is the owner of
portion of land of Survey No.151(old) No.22 (new),
admeasuring 0.59H/AAR which is situated at Mouza
Kalmeshwar, Patwari Halka No.27, Tahsil Kalmeshwar,
District Nagpur. Defendant No.1 entered into an
agreement to sell the said land to the plaintiffs by virtue
of agreement dated 07/07/1994. Defendant No.1 received
Rs.50,000/- as an earnest money. In view of the terms of
the agreement the plaintiffs came in the possession of
land and they were permitted to demarcate the land for
layout to convert it into non-agricultural use. They were
also allowed to enter into an agreement to sell the plots of
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the said land to their customers. It was agreed that the
remaining amount will be paid at the time of execution of
sale deed.
6. In the agreement dated 07/07/1994, defendant
No.1 agreed to convert the land into non-agricultural land
and also agreed to make available 20 feet road from the
field of Daulat and Namdeo Bobde to enter into his field
before registration of sale deed. Defendant No.1 issued
notice to plaintiffs on 04/08/1995 to which plaintiffs
replied on 31/08/1995 and 02/09/1995. Both the
plaintiffs stated that they are ready to execute sale deed
after fulfillment of conditions of agreement dated
07/07/1994. Defendant No.1 instead of fulfilling the
conditions filed the suit for declaration and injunction in
Civil Judge Junior Division, Saoner against the plaintiffs.
The said suit was withdrawn by defendant No.1. Again
on 23/03/1996, defendant No.1 send another notice to
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plaintiffs. In the said notice, it was stated by defendant
No.1 that the agreement dated 07/07/1994 stands
cancelled and the earnest money stands forfeited.
Defendant No.1 on 05/12/2000 sold the suit land to
defendant No.2 vide registered sale deed. Thereafter,
defendant No.2 was put in possession who is trying to
transfer the suit land to other person. As there was no
fencing to the suit land, the possession was given behind
back to plaintiff No.1.Hence plaintiff filed a suit for
specific performance of contract, Possession, Declaration
and Permanent Injunction.
7. Defendant no. 1 appeared, contested the
matter by filing his written statement. He had submitted
that possession of the land was never delivered to the
plaintiffs. Possession of the said land is with him only. It
was agreed that land was to be converted into non-
agricultural land. Plaintiff had to initiated proceeding for
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the same and defendant no. 1 has to sign only requisite
papers. Plaintiff never had an intention to purchase the
property and therefore intentionally tried to avoid the
execution of the sale deed and further prayed for the
dismissal of the suit.
8. Defendant no. 2 appeared and resisted the
claim of the plaintiff by filling its written statement. He
has submitted that defendant no. 1 was in dire need of
money due to old age and illiteracy, there was no income
source except the land therefore he decided to sell the suit
property.
9. After considering the matter before it and
evidence placed on record by both the parties, the learned
Trial Court decreed the suit and directed the plaintiff to
pay or deposit the amount of balance consideration to
defendant No.1 within one month. The learned Trial
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Court also directed the defendant No.1 to execute sale
deed in favour of plaintiff with respect to suit property
within one month from the date of receipt of deposit of
balance consideration and also directed that defendant
No.1 was permanently restrained from creating third
party interest.
10. Being aggrieved by the same defendant
preferred Regular Civil Appeal No.566/2012 before
learned District Court, Nagpur. The learned Appellate
Court allowed the appeal to the extend of relief of return
of the earnest consideration amount Rs.50,000/- with
interest at the rate of 6% p.a. to the plaintiffs/respondents
by the defendant No.2/appellant No.2 from the date of
filing of suit till the realization of entire amount. The
aforesaid judgment is the subject matter of challenge in
the present appeal.
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11. Learned Counsel for appellants contended that
the learned appellate court erred in holding that
unregistered agreement to sale at Exhibit-57 is
inadmissible in evidence by virtue of section 17(b) of
Registration Act and section 33 of the Stamp Act being
insufficiently stamped. The agreement of sale at Exhibit
57 is dated 07/07/1994 i.e. prior to the coming into force
of amendment to Registration Act. Further if the learned
1st Appellate Court was of the opinion that the agreement
of sale at Exhibit 57 was insufficiently stamped, it should
have sent it for impounding and would have granted
opportunity to the appellant to pay deficit stamp. That
having being not done the findings of the 1st Appellate
Court in this regard are unsustainable in the eyes of law.
12. It is further contended that the learned 1 st
appellate Court erred in holding that the appellants were
not willing and ready to perform his part of contract,
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inspite of issuing notice by the appellants dated
02/09/1995 (Ex-58) asking the original defendant
deceased Balkrishna to comply the condition in the
agreement of sale. It is further contended that the findings
of the learned 1st Appellate Court regarding non-
production of evidence regarding financial capacity of the
purchaser is contrary to the settle law in this regard
which requires that it is not necessary to produce money
or vouch to prove readiness and willingness.
13. The learned Counsel for appellants relied on
following citations:-
1) T. Mohan Vs. Kannammal and another
reported in (2002) 10 SCC 82
2) Shyamal Kumar Roy Vs. Sushil Kumar
Agrawal in Civil Appeal No.4609 of 2006 (Arising out of
S.L.P. (C) No.13426 of 2006)
3) Basavaraj Vs. Padmavathi and another
reported in 2023 SCC OnLine SC 10
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4) Tousif Ahmed s/o Abdul Aaheman Vs.
Ferozkhan s/o Sarfarzkhan and another reported in
2018(6) ALL MR 800
14. The learned counsel for the Respondent
supported the judgment and decree passed by the learned
appellate court and submitted that the learned appellate
court has rightly taken into consideration that the
defendant no. 1 sold the suit property to the defendant
no. 2 by registered sale deed and his name is entered on
the record of right. Similarly, the agreement to sale was
an unregistered document. It is also contended that
plaintiff failed to prove that he was ready and willing to
perform his part of contract.
15. Learned Counsel for respondents relied on
following citations:-
1) Sheshrao Bhikaji Kale Vs. Damodar Pandhare
reported in 2004(3) Mh.L.J.
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2) I.S. Sikandar (dead) by LR’s Vs. K.
Subramamni and others reported in 2013 (15) SCC 27
3) Mrs. Navjyot Singh w/o Inderpal Singh Vs.
Sayyad Irshad Ali s/o Vijid Ali and another in CRA
No.122/2018 passed by this Court.
4) Shenbagam and others Vs. K.K. Rathinavel, in
Civil Appeal No.150/2022
16. The learned counsel for the appellants
vehemently submitted that the agreement is of dated
07/07/1994 whereas the amendment to Section 17 came
into effect on 24/09/2001, of compulsory registration. As
such, the amended provision was not applicable to the
transaction entered into on 07/07/1994. Section 17(1A) of
the Registration Act which reads as under:-
“[17(1A) The documents containing contracts to transfer
for consideration, any immovable property for the purpose
of section 53A of the Transfer of Property Act, 1882 (4 of
1882) shall be registered if they have been executed on or
after the commencement of the Registration and Other
Related laws (Amendment) Act, 2001 (48 of 2001) and if
such documents are not registered on or after such
commencement, then, they shall have no effect for the
purposes of the said section 53A.]”
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17. In view of this specific Section, it is applicable
to the document executed on or after the amended
provision came into effect. As such, in my considered
opinion, the document i.e. agreement to sell executed on
07/07/1994 definitely admissible in evidence even if it is
not registered. Section 17 (1)(b) of Registration Act
provides that the document which creates right, title or
interest in immovable property, the registration is
compulsory where the value is more than Rs. 100/-. In
the present matter, it is claimed by the plaintiffs that the
possession was handed over. However, the transaction
took place in the year 1994 when Section 17(1A) was not
in effect. The learned lower Appellate Court held that
unregistered sale deed is neither admissible in evidence
for suit for specific performance nor for recovery of
consideration for any collateral purpose.
18. The learned counsel for the respondents relied
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on Sheshrao Bhikaji Kale (supra), however, the facts
involved in the said matter are distinguishable. In the
present matter, the agreement is executed in the year 1994
whereas the amendment to Section 17 came into effect on
24/09/2001.
19. The learned counsel for the appellants relied
on Shyamal Kumar Roy (supra), wherein the Hon’ble
Apex Court held that,
“an instrument insufficiently stamped, admitted
in evidence and marked as exhibit without
objection by opposite party - Party cannot
subsequently raise objection with regard to
admissibility of instrument in evidence of ground
of insufficiency of stamp duty.”
In the said case, the Hon’ble Apex Court
referred the citation in the case of Mujibar Rahman
Mondal v. Md. Abdulla Molla and Ors., [2005(1) CLJ
(Cal.) 249] wherein it is held that,
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"...The Court has to judicially determine the matter as
soon as the document is tendered in evidence and before
it is marked as an `exhibit' in the case. Once a document
has been marked as an "exhibit" in the case and has been
used by the parties in examination and cross-
examination of their witnesses, Section 36 comes into
operation. Once a document has been admitted in
evidence, it is not open either to the trial Court itself or
to a Court of Appeal or revision to go behind that order.
In the case on hand, the document in question was
marked exhibit with objection which leads to show that
the objection as to admissibility on the ground that the
instrument is not duly stamped has not been judicially
determined but it was merely postponed with tentatively
marking it as an "exhibit". In such circumstance, the
said provision of Section 36, in my view is not
attracted..."
20. It is admitted fact that defendant no. 1 was
agreed to sell the suit land to the plaintiffs for the
consideration of Rs. 3,00,000/-. Out of this, Rs. 50,000/-
was paid by the plaintiffs to defendant no. 1 upto
07/07/1994. As per agreement, sale deed had to be
executed on or before 30/04/1995. By that time, limit was
fixed to execute sale deed, has come in the evidence of the
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witnesses. Defendant no. 1 being old person having no
child nor having any source of income, was intended to
sell the suit property. The agreement was executed on
07/07/1994 and sale deed had to be executed on or before
30/04/1995. In view of this background, the time was
essence of contract, is rightly held by the learned lower
Appellate Court. This fact is admitted by the witness of
the plaintiffs also. In view of the finding recorded by the
learned lower Appellate Court that the plaintiffs failed to
establish their readiness and willingness to perform their
part of contract, only refund is awarded. Though an
agreement to sell is admissible in evidence, Section 17(1A)
come into effect subsequent to the agreement. However,
the conditions mentioned in the agreement are not
enforceable by law. One of the conditions was that,
defendant no. 1 was agreed to make available 20 feet road
from the field of Daulat and Namdeo Bobde. This
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condition is not enforceable by law, nor permissible as the
defendant no. 1 who is having no control over the field of
Daulat and Namdeo, how will he get available 20 ft. road
from the land of said Daulat and Namdeo. Neither Daulat
nor Namdeo had consented for such road.
21. It can be seen from the documents that
defendant no. 1 himself had issued notice to the plaintiffs
on 04/08/1995 and thereby informed to the plaintiffs that
the plaintiffs have to intimate him (defendant no. 1) the
date of execution of sale deed, by registered post and
arrange it within one month from the date of receipt of
notice and get sale deed executed by making payment of
balance consideration amount. On failure of which, the
defendant no. 1 will be at liberty to cancel said agreement
and forfeit consideration amount. The plaintiffs replied to
the notice on 02/09/1995 and intimated that defendant
no. 1 has to comply the condition in the agreement dated
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07/07/1994 and thereafter, the plaintiffs are ready and
willing to perform their part of contract. Defendant no. 1
again issued notice to the plaintiffs and informed them
that they (plaintiffs) are avoiding to execute the sale deed
though the power of attorney is executed in their favour,
but they have done nothing till the issuance of notice. As
such, the agreement to sell and power of attorney were
stood cancelled and the amount of Rs. 50,000/- was
forfeited. The plaintiffs did not reply to that notice.
22. Considering an every minute defect, the
learned lower Appellate Court held that the plaintiffs
were not ready and willing to perform their part of
contract. The learned lower Appellate Court has also
taken into account the depositions of the parties. The
plaintiff no. 1 has admitted in his cross-examination that
he does not have documentary evidence to prove that he
was having an amount of Rs. 2,50,000/-. The plaintiffs’
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own witness one Takalkhede admitted that defendant no.
1 approached him saying that the plaintiffs are not ready
to get execute the sale deed. Defendant no. 1 told him that
the plaintiffs did not pay the remaining consideration,
therefore, he visited plaintiff no. 1 for 3-4 times and asked
the plaintiffs to pay remaining consideration amount and
to get the sale deed executed. From all these evidence, the
learned lower Appellate Court held that the plaintiffs
were not ready and willing to perform their part of
contract.
23. The learned counsel for the
appellants/plaintiffs relied on T. Mohan (supra) and
Tousif Ahmed s/o. Abdul Aaheman (supra) in support of
his contention that he was ready and willing to perform
his part of contract, however, the facts involved in Tousif
Ahmed s/o. Abdul Aaheman (supra) are distinguishable.
In the said matter (i.e. Tousif Ahmed), the plaintiff has
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satisfied the requirements of pleadings in the plaint and
that evidence has been placed on record in the form of
notice dated 20/02/2002. After giving notice, he waited in
the office of the Registrar with the amount for defendant
but he failed to appear.
24. The learned counsel for the appellants also
relied on Basavaraj (supra) wherein the Hon’ble Apex
Court held that,
“adverse inference could only have been drawn
against the plaintiffs/respondents if the appellant
had asked the court to order them to produce
accounts and they had failed to produce them after
admitting that Basekhi Singh used to keep
accounts. But no such prayer was made to the
court, and in the circumstances no adverse
inference could be drawn from the non-production
of accounts.”
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25. In the present matter, the plaintiffs failed to
produce any supporting document that he was ready and
willing to perform his part of contract. Not only this, he
has not issued any notice but defendant himself issued
notice. Thus, conduct of plaintiff is sufficient to hold that
he was neither ready nor willing to perform his part of
contract.
26. As against this, the learned counsel for the
respondents relied on Shenbagam and ors. (supra) in
which, the reliance was placed on His Holiness Acharya
Swami Ganesh Dassji V/s. Sita Ram Thapar [(1996) 4
SCC 526] wherein a two-judge Bench of the Hon’ble Apex
Court observed that ‘readiness’ means the capacity of the
plaintiff to perform the contract which would include the
financial position to pay the purchase price and to
ascertain ‘willingness’, the conduct of the plaintiff has to
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be properly scrutinised. Wherein the Court noted/held in
para 2 as under:
“2. There is a distinction between readiness to perform the
contract and willingness to perform the contract. By readiness
may be meant the capacity of the plaintiff to perform the
contract which includes his financial position to pay the
purchase price. For determining his willingness to perform his
part of the contract, the conduct has to be properly
scrutinised. […] The factum of readiness and willingness to
perform the plaintiff's part of the contract is to be adjudged
with reference to the conduct of the party and the attending
circumstances. The court may infer from the facts and
circumstances whether the plaintiff was ready and was always
ready and willing to perform his part of the contract. The facts
of this case would amply demonstrate that the
petitioner/plaintiff was not ready nor had the capacity to
perform his part of the contract as he had no financial capacity
to pay the consideration in cash as contracted and intended to
bide for the time which disentitles him as time is of the essence
of the contract.”
27. The learned counsel for the respondents
vehemently submitted that the plaintiffs have not sought
any declaration that the notice cancelling the agreement
was illegal, nor sought declaration for sale to subsequent
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purchaser is illegal. He relied on Mrs. Navjyot Singh
w/o. Inderpal Singh (supra) wherein this Court placed
reliance on I.S. Sikandar (dead) by LRs (supra) wherein,
the Hon’ble Apex Court considered the question of
maintainability of suit concerning reliefs sought on the
basis of an agreement, which had been cancelled and no
prayer concerning validity of such cancellation was made
on behalf of the plaintiff. Having considered the position
of law, the Hon’ble Supreme Court held that in the
absence of prayer to set aside cancellation of the
agreement, prayers for declaration, injunction and specific
performance made in respect of such an agreement could
not be considered by the Court at all and the said suit was
not maintainable.
28. As such, there is no perversity in the findings
recorded by the learned lower Appellate Court.
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Considering the over all factual aspects, the time was
essence of contract as the defendant no. 1 was in dire need
of money. It can also be seen that no notice was issued by
the plaintiffs. On the contrary, the notice was issued by
the defendant. Though I hold that for want of registration,
the document cannot be said to be inadmissible as the
amendment came into effect subsequent to the execution
of document. To that extent, the finding recorded by the
learned lower Appellate Court is not correct. However,
the plaintiffs failed to establish that they were ready and
willing to perform their part of contract. Accordingly,
substantial question of law No.1 in the negative and
substantial question of law No.2 in the affirmative. As
such, I proceed to pass the following order:-
ORDER
i) The appeal stands dismissed.
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ii) The judgment passed by the learned Ad-hoc District
Judge-1, Nagpur in Regular Civil Appeal No.566/2012 is
hereby confirmed.
iii) Decree be drawn up accordingly.
The appeal stands disposed of accordingly.
(Smt. M.S. Jawalkar, J.)
R.S. Sahare/B.T.Khapekar
TM
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