1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD SECOND APPEAL NO.949 OF 2009 Bharatbai w/o Srimant Gomsale, age: 46 years, Occ: Agriculture, R/o Jajnoor, Tq.Nilanga, District Latur. Appellant Versus 1 Bhimrao s/o Raghoba Gomsale, age: 76 years, Occ: Nil, R/o Jajnoor, Tq. Nilanga, District Latur. 2 Khanderao s/o Bhujangrao Babar, age: 42 years, Occ: Agril., R/o as above. 3 Dhondiram s/o Daulatrao Gomsale, age: 44 years, Occ & R/o as above. Respondents Mr.P.M.Yelnoorkar, advocate for the appellant. Mr.S.S.Choudhary, advocate for Respondent No.1. Mrs.M.D.Thube (Mhase), advocate for Respondents No.2 & 3. CORAM: R.M.BORDE, J. DATE : 08 th February, 2010. ORAL JUDGMENT: 1 This is an appeal by original plaintiff raising exception to the judgment and decree passed by District Judge-1, Nilanga on 05.09.2009 in Regular Civil Appeal No.20/2005, thereby allowing appeal presented by plaintiff partly. 2 Appellant is original plaintiff who has instituted Special Civil Suit 2 No.181/1998 claiming decree of specific performance of agreement alleged to have been entered into on 31.01.1996 with defendant no.1 in respect of land G.No.287 admeasuring 9 acres 13 gunthas and land G.No.297 admeasuring 7 acres 8 gunthas, situate at village Jajnoor; and or in the alternative, plaintiff claims refund of earnest amount of Rs.40,000/-. 3 According to plaintiff, suit land is owned by defendant no.1 and same was agreed to be purchased by plaintiff for consideration of Rs. 1,50,000/- by entering into an agreement on 31.01.1996. At the time of execution of agreement to sell, earnest amount of Rs.40,000/- was paid to defendant no.1 and balance amount of consideration was agreed to be paid on 30.06.1997, on which date sale deed was to be executed. Possession was agreed to be delivered on execution of sale deed. It is the contention of plaintiff that defendant no.1 has failed to perform his part of contract and has sold land G.No.287 to defendant no.2 for consideration of Rs.1,92,000/- and land G.No.297 has been alienated in favour of defendant no.3 for consideration of Rs.55,000/-. Plaintiff contends that both sale transactions are not binding on him. 4 Defendants appeared and resisted suit by filing written statement. Defendant no.1 has denied to have executed agreement to sell in favour of plaintiff, as contended by him. It is contended by defendants that on 30.12.1995, an agreement was executed in respect of sale of 85 ares’ land out of G.No.297 in favour of defendant no.3 for consideration of Rs. 55,000/- and further agreement in respect of land admeasuring 5 acres 4 gunthas out of G.No.297 along with land G.No.287 admeasuring 9 acres 13 gunthas was entered into with defendant and consideration amount was fixed at Rs.1,92,000/-. Defendant no.1 claims that he received an amount of 3 Rs.25,000/- and Rs.1,00,000/-, respectively, in pursuance to the agreements to sell executed in the year 1995. Defendant No.1, as such, prayed for dismissal of suit. 5 The trial Court, after receiving evidence led by parties, came to the conclusion that plaintiff has failed to establish agreement to sell alleged to have been executed by defendant no.1 in his favour as well as payment of earnest amount. That, so far as agreements, alleged to have been executed in favour of defendants no.2 and 3 by defendant no.1 on 30.12.1995 are concerned, the trial Court has recorded a finding in affirmative and further held that plaintiff has failed to establish his case and as such, dismissed suit by judgment and decree dated 08.02.2005. 6 The unsuccessful plaintiff raised challenge to the judgment and decree passed by trial Court by presenting Regular Civil Appeal No.20/2005, which was heard and disposed of by District Judge-1, Nilanga, who was pleased to allow same partly in view of judgment and decree dated 05.09.2009. The first appellate Court has recorded a finding that plaintiff has established alleged agreement to sell dated 31.01.1996 executed in his favour by defendant no.1, so also passing of earnest amount of Rs.40,000/- in favour of defendant no.1. The first appellate Court, however, did not deem it appropriate to exercise discretion in favour of plaintiff in passing decree of specific performance of agreement. The first appellate Court, however, granted alternate prayer made by plaintiff and directed refund of earnest amount along with interest at the rate of 6% p.a. 7 I have perused the judgment delivered by trial Court as well as first appellate Court. The only questions arises for consideration in the 4 appeal, which are of substantial nature, are: (1) Whether first appellate Court has erred in exercising discretion under Section 20 of the Specific Relief Act in refusing to grant specific performance of agreement and directing refund of consideration? (2) If the appellate Court was justified in exercising discretion in refusing to pass decree of specific performance in favour of plaintiff, whether rate of interest awarded while directing refund of consideration is proper and in consonance with provisions of Section 34 of the Code of Civil Procedure? Admit. By consent of learned Counsel for respective parties, appeal is heard finally forthwith. 8 It is to be noted that as per the contentions raised by plaintiff, defendant no.1 executed agreement to sell in his favour on 31.01.1996 and consideration amount agreed was Rs.1,50,000/-, out of which, amount of Rs. 40,000/- is said to have been advanced to defendant no.1. Defendants, however, have come with a case that there are agreements to sell executed in favour of defendants no.2 and 3 on 30.12.1995 and the property is agreed to be sold for consideration of Rs.1,92,000/- and Rs.55,000/-, respectively under the agreements. It is also stated that defendant no.1 has received earnest amount of Rs.1,00,000/- and Rs.25,000/- separately in respect of alleged transactions. Sale deeds are got executed in favour of defendants no.2 and 3 on 15.05.1997 and they are put in possession. Plaintiff thereafter instituted suit in the year 1998. Plaintiff has seriously disputed agreements dated 30.12.1995 alleged to have been executed by defendant no.1 in favour of defendants no.2 and 3. 9 I have perused the findings recorded by Courts below in that 5 regard. It is observed by trial Court in paragraphs no.23 and 24 of the judgment that defendants no.2 and 3 have proved the documents i.e. agreements to sell dated 30.12.1995. Defendant no.1 has deposed in respect of execution of document in favour of other defendants. Not only this, but plaintiff himself has examined one Alim Shaikh, who was scribe of the documents i.e. Exhibits-143 and 144 alleged to have been executed in favour of defendants no.2 and 3 by defendant no.1 and the witness examined by plaintiff himself has deposed that the documents are written by him (i.e. the witness) on 30.12.1995 and writing of the documents and date of execution is also proved by said witness. In these circumstances, the Courts below were justified in placing reliance on the evidence in the form of agreements to sale at Exhibits-143 and 144 executed by defendant no.1 in favour of defendants no.2 and 3. In these circumstances, it goes without saying that the agreements executed in favour of defendants no.2 and 3 are prior in time and that defendant no.1 has also received earnest amount amounting to Rs. 1,00,000/- and Rs.25,000/- respectively. The sale deeds are also got executed in favour of defendants no.2 and 3 on 15.05.1997. 10 Although the first appellate Court has recorded a finding that plaintiff has established the document i.e. agreement to sell dated 31.01.1996, in the circumstances stated above, held him entitled to only refund of earnest amount. In these circumstances, it cannot be said that exercise of discretion by the first appellate Court is arbitrary or unreasonable. The discretion exercised by first appellate Court based on sound reasons, therefore, need not be interfered with while exercising powers under Section 100 of the Code of Civil Procedure. It is well established that grant of decree of specific performance is discretionary and Court is not bound to grant such relief merely because it is lawful. Here, in the instant matter, first appellate Court 6 has recorded reasons for his refusal to grant decree of specific performance in favour of plaintiff, which are found to be sound and reasonable. The discretion exercised by first appellate Court is, therefore, not liable to be interfered with by this Court. 11 Learned Counsel for appellant has placed reliance on the judgment in the matter of Sargunam (dead) by L.R. Vs. Chidambaram and another, reported in (2005) 1 SCC 162. There cannot be any dual opinion in respect of ratio laid down by the Apex Court in the said judgment. However, facts giving rise to the instant matter differ from the facts appearing in reported judgment. As such, analogy derived therefrom cannot be made applicable to the instant matter. 12 Learned Counsel appearing for appellant has also urged that first appellate Court has granted only 6% p.a. interest from the date of suit till realisation of amount and it ought to be some where near the rates prevailing in market in relation to banking transactions. Learned Counsel appearing for Respondent No.1 – original defendant no.1 has contended that rate of interest awarded by the first appellate Court is in consonance with provisions of Section 34 of the Code of Civil Procedure. Section 34 of Code of Civil Procedure vests with the Court discretion to grant interest at such rate as the Court may deem reasonable from the date of suit till date of decree, in addition to any interest adjudged on such principal sum for any period prior to institution of the suit. In the instant case, the first appellate Court has granted decree in respect of refund of consideration from the date of presentation of suit. The Court, in these circumstances, ought to have awarded payment of interest from the date of receipt of earnest amount by defendant no.1 till actual realisation of amount and at the rate nearer to the 7 market rate. In the instant matter, there is no question of distinguishing the amount as `principal sum adjudged’, as there was no provision in the contract in respect of payment of interest. Only principal carries interest from the date of advance. In these circumstances, the first appellate Court ought to have granted interest which would be nearer to the interest rate prevailing in the market in respect of banking transactions. The rate of interest awarded at the rate of 6% p.a. is quite low and far below prevailing market trends. The grievance made by Counsel for appellant, in that regard, appears to be justified. 13 Counsel for appellant has also prayed for award of damages on account of non fulfillment of promise by defendant no.1. However, there is no pleading or prayer in that regard in the plaint and in the absence of there being any pleading or prayer, it is not permissible for the Court dealing with Second Appeal to consider such request for the first time. 14 In these circumstances, therefore, appeal shall have to be allowed partly only so far as direction contained in para 2(ii) of operative portion of first appellate Court’s order dated 05.09.2009 is concerned. Original plaintiff-appellant herein shall be entitled to have refund of earnest amount of Rs.40,000/- with simple interest at the rate of 12% p.a. from the date of its advance till actual realisation of amount. Except this modification, rest of the decree passed by first appellate Court is maintained. In the facts and circumstances of this case, there shall be no order as to costs. (R.M.BORDE) JUDGE ******* adb/sa94909