1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD SECOND APPEAL NO. 32 OF 1988 Mohammadkhan alias Babamiya s/o Nurkhan,(since deceased) through legal heirs as under: (1) Nafizkhan s/o Mohammad Khan age 50 years,occup.business, r/of Sharif Colony,Kiradpura, Aurangabad. (2) Nashirkhan s/o Mohammad Khan, age 35 years, occup.business, r/of Sharif Colony,Kiradpura, Aurangabad. (3) Amzadkhan s/o Mohammad Khan, age 33 years, occup.business, r/of Sharif Colony, Kiradpura, Aurangabad. ..Appellants/ defendants. versus 1. Haji Shaikhlal s/o Shaikh Ahmed, age major, occup. business, 2. Shaikh Rehman s/o Sk.Ahmed, age major, 3. Sk. Osman s/o Sk. Ahmed, age major, 4. Abdul Majid s/o Babu Minya, age major, 5. Bashir Ahmed s/o Babaminya, age major occup. business, (since deceased), through legal heirs as under:- 2 5-A. Mrs.Badrunissabegum w/o Bashir Ahmed, age 38 years, occup. household, r/of Dalalwadi, Aurangabad. 5-B. Rafiq Ahmed s/o Bashir Ahmed, age 22 years, occup. driver, r/of Dalalwadi, Aurangabad. 5-C. Amir Ruzwana w/of Samad Khan age 20 years,occup.household, r/of Mujib Colony,Roshan Gate, Aurangabad. 5-D. Shaeen Ruzwana w/o Afsar, age 19 years, occup.household, r/of Baijipura, Aurangabad. 5-E. Shabana Ruzwana d/o Bashir Ahmed, age 17 years, minor, u/g of R.5-A above. 5-F. Miss Shaeen Erphana d/o Bashir Ahmed, age 15 years, minor u/g of R.No.5-A. 5-G. Shafeeq Ahmed s/o Bashir Ahmed, age 13 yrs.minor, u/g of R.5-A. 5-H. Afeekh Ahmed s/o Bashir Ahmed, age 11 years, minor, under g/of R.No.5-A. 6. Shaikh Hyder s/o Shaikh Ahmed, Respondents/ age major, occup,business. ori.pltffs. Respondent Nos. 1 to 6 r/of Dalalwadi, Aurangabad. Resp.No.4 presently at Bombay and Resp.No.6 presently at Murshidabad. -------------------------------------------------- Shri N.K. Kakade, Advocate for the appellants. None for Respondent Nos.1 to 5. Shri P.G. Godhamgaonkar, Advocate for Respondent No.5-A to 5-H and Resp.No. 6. ------------------------------------------------------ 3 Coram : P.R. Borkar, J. Date : July 13, 2010. ORAL JUDGMENT 01. This appeal is preferred by original defendant who is represented by his legal heirs being aggrieved by the judgment and decree for specific performance of agreement for sale passed by the learned Joint Civil Judge, Senior Division, Aurangabad, in Special Civil Suit No.95 of 1983 decided on 30.9.1985, which judgment and decree with some modification was confirmed by the learned Joint District Judge, Aurangabad, in Regular Civil Appeal No.238 of 1985 decided on 24.12.1987. 02. Briefly stated, the facts giving rise to this second appeal are as under; Agreement for sale was executed on 19.6.1978 vide Exhibit 29 by appellant-defendant in favour of the respondents-plaintiffs. By the 4 said agreement for sale, the appellant-defendant agreed to sell 250 ft. x 250 ft. area out of C.T.S. No.11632, sheet No.239 (old S.No.42) situated at Jaswwantpura, Aurangabad for total consideration of Rs.33,500/= out of which, amount of Rs.13,000/= was paid to him by the plaintiffs as earnest money on the same day for which separate receipt Exhibit 30 was also executed. Balance amount of Rs.20,500/= was to be paid at the time of the sale deed that was to be executed within two years from 19.6.1978. In paragraph 3 of the agreement, it is specifically stated that in case CIDCO or any other government authority acquired the land agreed to be sold or portion thereof, the vendor-original defendant Mohammad Khan would give and hand over to the plaintiffs another proportionate land out of said C.T.S. number. Plaintiffs were ready and willing to perform their part of the contract, but the defendant avoided and, therefore, on 22.5.1980, plaintiffs issued notice to the defendant to complete the transaction. However, the defendant refused to execute the sale deed and, therefore, 5 suit for specific performance of contract was filed on 27.2.1983. 03. The appellant-defendant resisted the suit by filing written statement at Exhibit 19. He denied execution of any agreement for sale by him in favour of the plaintiffs or or even receipt Exh.30 by him for having received earnest amount of Rs.13,000/=. According to appellant-defendant, his father Noorkhan was the protected tenant of S. No.42 admeasuring 2 acres 32 gunthas of village Jaswantpura, Aurangabad and was cultivating the same. According to defendant the said land was belonging to one Raichotelal. It is the case of the defendant that his father Noorkhan was declared as owner of the said land under Section 38-E of the Hyderabad Tenancy and Agricultural Lands Act and thus he had become statutory owner of the same and, therefore, without permission of the Collector under Section 50-B of the said Act, there cannot be sale of the said property. According to appellant-defendant only Rs.5000/= were lent to him by plaintiffs to him and the 6 document was executed as security for the said loan. In the circumstances, defendant prayed for dismissal of the suit. 04. The trial court framed necessary issues and held that the defendant failed to prove his case of transaction being of loan. It is held that the transaction was in the nature of agreement for sale. Amount of Rs.13,000/= was paid as part of total consideration amount of Rs.33,500/=. Plaintiffs were entitled to specific performance of contract on payment of balance amount of Rs. 20,500/=. 05. As against the said judgment and decree of the trial court, defendant filed appeal before the District Court, but the learned District Judge came to the conclusion that since the property was declared in the name of Noorkhan under Sec. 38-E of the Hyderabad Tenancy and Agricultural Lands Act, there could not be transfer of the suit property without permission of the Collector and, therefore, he modified the decree of the trial 7 court and directed the defendant-appellant to move the Collector for obtaining necessary permission within a period of three months from the date of the judgment and in case of failure by defendant, the learned Judge permitted the plaintiffs defendant to apply for such permission to the Collector and on obtaining such permission, decree for specific performance was to be implemented. Nothing is mentioned by the learned District Judge as to what is to happen in case permission is not applied for or granted by the Collector. As against judgment of the District Court, this second appeal is filed. 06. This second appeal is admitted on 29.2.1988 on substantial questions law mentioned in ground Nos. 1 and 2 of the appeal memo, which read as follows; "1. That the lower Appellate Court has held that the subject-matter of the suit is agricultural land and has modified the decree passed by the Trial Court with directions to the Appellant-Defendant to 8 supply (apply) to the Collector under Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act, 1950 for necessary permission for sale of the property to the plaintiff within a period of three months or in case of failure on the part of the Defendant, that the plaintiff will be at liberty to apply for the permission. From this modification and direction, it is clear that the subject-matter of the agreement for sale was the agricultural property. If it were so, then under Section 47 of the Hyderabad Tenancy Act, there is a restriction for sale of agricultural property to a non-agriculturist, unless the prospective purchaser is an agriculturist. Whether in the facts and circumstances of this case, specific performance of an agreement for sale of an agricultural property could be directed by the Civil Court when both the lower Courts have not only not framed issues and points on the status of the Plaintiffs whether they are agriculturists or not. 2. Whether the lower Appellate Court has clearly come to the conclusion that the subject-matter of the agreement for 9 sale was the agricultural property, subject to the provisions of the Hyderabad Tenancy Act, whether specific performance of the agreement for sale can be granted without an enquiry in that connection as provided for under Section 47 of the Hyderabad Tenancy Act.?" 07. It is argued by Shri N.K.Kakade, learned Counsel for the appellant that not only permission for valid sale is required under Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act, but the document filed by him at Exh.P-1 along with Civil Application No.9459 of 2010 also needs to be considered inasmuch as pending the litigation, portion of said city survey No.11632 was acquired by the Government for road widening. As per the letter dated 19.8.1986 (Exh.P-1 to Civil Application) the Special Land Acquisition Officer has called upon the original defendant Mohammad Khan (appellant herein) to furnish certain information in connection with acquisition of said property. So, it is stated that identity of the suit property is no more same. It is also argued that in fact, the suit property having been 10 acquired by the Government, the same does not exist for transfer in favour of the plaintiffs- respondents. 08. Shri P.G.Godhamgaonkar, learned Advocate for the Respondents, submitted that though he received copy of the civil application along with its annexures, he could not get necessary instructions from his clients and, therefore, he would not be able to say anything about the development of acquisition etc. However, according to the learned counsel, since the property was already put to non agricultural use and given city survey number, the provisions of Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act would not be applicable to the facts of this case. 09. Shri N.K.Kakade, learned counsel for the appellant relied upon certain authorities. First authority is K. Narendra vs. Riviera Apartments (P) Ltd. AIR 1999 S.C. 2309. In the said case, purchasers had failed to perform their obligations 11 within reasonable time and the prices of the property increased many-fold and, therefore, the court declined to use discretion for allowing specific performance. In the reported case, part of the property was also rendered inalienable subsequently having been acquired by State and some part found to be inalienable under Urban Land Ceiling Regulation Act. In paragraph 36 of the said judgment, it is observed that the contract was frustrated under Section 56 of the Contract Act. 10. Second case relied upon by Advocate Shri Kakade is V. Muthusami vs. Angammal and ors. AIR 2002 S.C. 1279. It is observed in para 20 of the said case that the grant of specific performance is a discretionary relief. Reference to Section 20 of Specific Relief Act was made and it is held that the court is not bound to grant relief merely because it is lawful to do so and further that if performance of a contract involves some hardship on the defendant which he did not foresee, while non-performance involves no such hardship on the plaintiff, specific performance of agreement may 12 not be allowed. Learned counsel also drew my attention paras 22 and 23 of the said case. In the said case, property was purchased by a purchaser bonafide for value without notice. Under the circumstances, a the court was pleased to allow refund of earnest money. 11. Shri Kakade, learned counsel for appellant also relied upon the case of Mrs. Chandnee Widya Vati Madden vs. Dr. C.L. Katial AIR 1964 SC 978. In the said case, there was term that the vendor shall obtain necessary permission from the government before sale. The vendor had made such application, but had withdrawn the same subsequently. As paragraph 5 of the judgment in said case discloses, the court allowed specific performance. 12. Last case relied upon by Advocate Shri Kakade is Dnyanoba vs. Shrirang 1982 (2) Bom.C.R. 18. In the said case, there was necessity to obtain permission of the Collector under Section 50-B of the Hyderabad Tenancy and Agricultural 13 Lands Act as the land was purchased by tenant under Section 38-E. The question that was raised for consideration of the court was entirely different. The question was whether the defendant was entitled to protection of Section 53-A of the Transfer of Property Act, 1882. 13. Coming back to the facts of our case, the first appellate court has discussed evidence and facts in details in paras 9 and 10. It is observed that the plea was raised that the suit plot was earlier having survey No. 42 which was not allowed to be used for N.A. purposes and, therefore, permission of the Collector was required. However, at the same time, it is brought on record that old survey No.42 was included in the city survey and in the municipal limits of Municipal Corporation, Aurangabad and, therefore, renumbered as plots for residential purposes. In the circumstances, the trial court came to the conclusion that though survey No.42 was in existence, it is recorded as city survey number. So, argument advanced on behalf of the respondents 14 came to be accepted by the trial court, but the appellate court accepted the defence that since the property was not put to N.A. use, Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act was applicable. The appellate court came to the conclusion that permission of the Collector was required. there is no record regarding actual conversion of original agricultural land into non agricultural land. The agreement is of 1978 and it is not known if the property was under cultivation in 1978. So, observations by the District Court that the permission of the Collector would be required cannot be said to be illegal. 14. In this matter, the defendant-appellant has come with a case that already major chunk of the suit property has been acquired for the purpose of road widening and as such the identity of the property is not the same any more. To this case of the defendant, there is nothing in rebuttal. So, it appears that since long back i.e. year 1983 the suit property has undergone changes and as such lost its identity. In the 15 circumstances, it would be difficult to execute decree even if clause (3) of the original agreement speaks about giving alternate land, because it is not known whether the appellant or his legal heirs are owners in possession of any alternate land from same survey number to give the same to the respondents-plaintiffs in substitution of the land acquired by the Municipal Corporation. 15. Having regard to the totality of the facts and circumstances, in my opinion, it is preferable to allow this appeal partly. In stead of specific performance, it would be just and proper to direct refund of earnest amount with interest. Considering that litigation is pending since 1983, interest at 12 per cent per annum would be proper. 16. In the result, appeal is partly allowed. The decree for specific performance of agreement for sale passed by the trial court as confirmed by the district court is hereby set aside. It is directed that the appellants-defendants shall pay 16 back the amount of Rs.13,000/= to the plaintiffs along with interest at the rate of 12 per cent per annum from the date of the suit i.e. 27.2.1981 till actual payment. The appellants shall also pay proportionate costs to the respondents and bear their own. Appeal stands disposed of, accordingly. pnd/SA32.88 (P.R.BORKAR, J.) 17