1 AO NO.193 OF 2011 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD APEAL FROM ORDER NO. 193 OF 2011 ,With CA/14099/2011 ,In AO/193/2011 1. Vinod s/o Jawaharlal Sankalecha, Age: 37 years, Occu: Agriculturist, 2. Deorao s/o Ramchandra Sajan, Age: 43 years, Occu: Agril., 3. Bapu s/o Pandurang Thakare, Age: 39 years, Occu: Agril. All r/o Shirdi, Tq. Kopargaon, Dist. Ahmednagar. ...APPELLANTS (Original Plaintiffs) VERSUS 1. Harshad s/o Prabhat Patil, Age: 22 years, Occu. Agril. 2. Vaibhav s/o Subhash Patil, Age: 24 years, Occu. Agril. Both r/o Nimgaon Kohale, Taluka Rahata, District Ahmednagar. ...RESPONDENTS (Original defendants) ... Mr. Shailesh Chapalgaonkar, Advocate for appellant. Mr.Milind Patil, Adv., for respondent nos. 1 and 2. ... 2 AO NO.193 OF 2011 CORAM : K.U. CHANDIWAL, J. Dated: November 25, 2011 ... PER COURT :- 1. Heard finally. The parties are referred to their original status as plaintiffs and defendants. 2. An agreement of sale was executed in respect of immovable property owned by the defendants in favour of the plaintiffs on 29.2.2011 for total consideration of Rs.2, 87,00,000/- ( Rs. two crores, eighty seven lacs). There seems to be no controversy on the stipulations incorporated in the agreement of sale. The plaintiffs, as a purchaser, having noticed that the defendant, as a seller, is dodging the transaction and avoiding to execute the sale deed in the letter and spirit. It was felt avoidance was due to the potentiality of the property being highly multiplied with increase in value, plaintiff served a notice, calling upon the defendants to execute the sale deed by accepting the balance consideration. The defendants gave reply which, apparently, was evasive and informed the plaintiff that he, indeed, is desirous to sell the property as he cannot wait as the prices have been increased. He asserted, time was essence of contract and it 3 AO NO.193 OF 2011 is not complied. The reply was wavering as to receiving the earnest or figure balance sale consideration. The subject Special Suit No. 150/2011 for specific performance of contract was filed before the learned Civil Judge, Senior Division, at Kopergaon, and an application below Exh.6 was moved. The learned Judge rejected the same on 20th Oct.,2011, by observing that the plaintiffs have, prima facie case, balance of convenience, however, the plaintiffs will not suffer irreparable loss if the property is alienated by the defendant. This order is questioned by the plaintiff. The substantial question of law that would arise are: (a) When the Court found a prima facie case and balance of convenience in favour of the plaintiff, was the learned Judge justified in rejecting the injunction on count of plaintiff not suffering irreparable loss ? (b) Whether the learned Judge was justified in getting influenced by operation of Section 52 of the Transfer of Property Act and, in particular, registration of lis by the plaintiff, getting it recorded in mutation entry No.4624 in the revenue record. 3. My answer to the above two points are in favour of the plaintiff and against the 4 AO NO.193 OF 2011 observation of the learned Judge for following reasons. 4. The basic document dealing with the transaction being agreement of sale dated 29th Jan.,2011, recites in un-equivocal terms in clause (3) that out of the sale consideration of Rs.2,87,000,00/- ( Rs. two crores, eighty seven lacs), the defendant, as a vendor has received Rs.5,00,000/- ( Rs. five lacs) on 25th Jan.,2011, and while executing agreement of sale dt.29th Jan.,2011, received an amount of Rs.95,00,000/- ( Rs.ninety five lacs), details whereof are provided in clause No.3. He thus acknowledged receipt of Rs.one crore on the date of agreement of sale. Clause (4) provides that the transaction is to be completed within four months which was a condition to be complied with. It also provided, if the transaction is not completed within the period of four months, whatever rights the plaintiff has accrued by virtue of agreement of sale, shall stand terminated. Said clause also incorporate, before getting sale deed executed, the plaintiff has to, at his cost, get a compound wall as the boundaries of the property was to be identified by the defendant, by effecting measurement as a seller. It was also agreed after measurement as per the available land, the proportionate price would be paid and adjusted. The compound 5 AO NO.193 OF 2011 wall from eastern side would be erected beyond drainage line or a brook. 5. At this stage of the matter, the legal position need not be obliterated, any recital in respect of time as essence of the contract of immovable property has to be read in tune with the document. Prima facie, I find, the obligation was on the part of the defendant, as a vendor, to demarcate his property to enable the plaintiff as a purchaser to erect compound wall and to pay appropriate sale price. No such endeavour surfaced on the part of the defendant as vendor to activate his role as contemplated in the agreement. This, consequently, informs that even if there is recital of time to be essence of the contract, has been deflated by his conduct. 6. In the notices and affidavit in reply, divergent stands are taken by the defendant. This is legally not permissible and, particularly, in a suit for specific performance of contract where discretion has to be weighed in favour of the party expected to approach the Court with clean hands. In the affidavit tendered before this Court, in paragraph No.4, defendant submits that he has barely received Rs. 5,00,000/- ( Rs. five lacs) and nothing more is received by him. This stand, raised for the first time before this Court, is rebelling the 6 AO NO.193 OF 2011 recitals in the agreement of sale. There was no injunction operating against the defendant immediately to address a communication after 29th Jan.,2011, disowning the recitals in the agreement of receipt of Rs.95,00,000/- ( Rs. ninety five lacs). Even in the reply notice, the defendant went on evasive reply. 7. In the reply affidavit, opposing grant of injunction, before learned Judge, curious stand is projected. He says, in clause 5 of the plaint, the plaintiff has sought refund of Rs.one Crore, fourty five lacs with interest at the rate of 18 per cent. Consequently, according to him, there shall not be any loss to him ( plaintiff) which is required to be prevented by application for temporary injunction. In paragraph No.4 of the reply, the defendant avers as under: " That, the contents of Para No.4 of the petition are denied. The very pleading of the petition in Para No.2 to 4 regarding payment of the money of Rs.1,44,00,000/- ( in words Rs. One Crore Forty Four Lakhs) or Rs. 1,43,00,000/- ( In words Rs.One Crore Forty Three Lakhs) requires clarification and therefore, it finally proves that, the petitioners are not sure about their own payments to the respondents. The respondents has rightly submitted in the reply to the notice that, they are free to dispose off the property. It is denied that, during pendency of the suit if the property is burdened with any transaction the petitioners are likely to suffer irreparable 7 AO NO.193 OF 2011 loss and there shall be complication in the matter it is further denied that, there actions if any would not be fair one. It is respectfully submitted that, till disposal of the suit there is no need to grant temporary injunction against these respondents that they should not alienate by any mode the suit property and should not enter into for agreement for sale or should not encumber the property & thus there is no need to grant any specific temporary injunction against the respondents. " 8. In paragraph No.6, by way of additional say, the defendant referred as under: " Since the property of the respondents is now valued to the tune of Rs. 2,87,00,000/- ( In words Two Crores Eighty Seven Lakhs only) as per agreement for sale & as the property rates are increasing day by day and therefore, for pegging down the market value of the land the petitioner has unscrupulously filed the suit with intention that the respondent should not find the another seller and should not develop him by purchasing the other property and should not invest in on going projects in which he should face financial crunch. As per the estimation of the petitioner & the rate of interest claimed on the refund of earnest money these respondents are loosing Rs. 14153.42 PS. ( In words Rs. Fourteen Thousand One Hundred & Fifty Three & Forty Two Ps.) per day interest amount over the same. Even considering the deduction of Rs. 1,44,00,000/- (In words Rs.one Crore Forty Four Lakhs) out of Rs.2,87,00,000/- ( In Words Two Crores Eighty Seven Lakhs only) the amount of Rs.1,43,00,000/- ( In words Rs. One Crore Forty Three Lakhs) was remained to be unpaid to these respondents @ 18% p.a. over 8 AO NO.193 OF 2011 the same the respondents were at lost of Rs. 7052/- ( Rs. Seven Thousands & Fifty Two only) per day over the same & thus the intention of the petitioners are clear to dupe these respondents. The intentions are clear enough as on the date of filing of the suit the plaintiff has no right to file the suit and thus under the false garb of right of performance the present suit is filed by the petitioner and has sought temporary injunction in the matter and which is required to be vacated. " He informed, in unequivocal terms that he has a desire to alienate the property and there remained no right for any specific performance arising out of the terms of the contract dated 29.1.2011. 9. Mr.Patil, learned Counsel for the defendants submits, the scope of Section 52 of the Transfer of Property Act is to be read in tune with the provisions of Section 19 of Specific Relief Act which provides adequate remedy even to subsequent purchaser and, therefore, the plaintiff should not be ornamented with an injunction. He reiterates that it was only an amount of Rs.5,00,000/- ( Rs. five lacs) which the defendant has received and the property worth Crores of rupees should not be arrested by injunction. Learned Counsel submits that the vouchers annexed to the Appeal From Order are towards loan availed by the defendants from the Credit Cooperative Society and it is not balance 9 AO NO.193 OF 2011 sale price. He submits that the clamp of injunction will amount to squeezing the rights of the defendants as owner of the property for free flow of enjoyment and Court should not exercise discretion in such a case as such discretion has to be associated and attended to in tune with Sections 19 and Section 52 of the Transfer of Property Act. Mr Patil informs, as referred in reply notice dated 23rd August, 2011, that due to non payment of balance sale consideration in time by the plaintiffs, the construction activities of hotel initiated by the defendants are stalled. Prices of construction material have magnified and the plaintiff as a purchaser was branded to be responsible for such delay. The defendant had caused measurement and in presence of the plaintiff fixed the boundaries, asked the plaintiff to erect compound wall, however, since plaintiff failed to adhere, the compound wall was erected at the cost of the defendant. 10. Learned Counsel for the plaintiff reiterates that the plaintiff has, in unmistakable terms, indicated before the learned trial Judge to deposit the balance sale consideration and he is ready to deposit balance sale consideration in this Court and also to act expeditiously in disposal of the pending suit. 10 AO NO.193 OF 2011 11. In the light of the situation referred herein-above flowing in clauses 3 and 4 of the agreement of sale, to repeat, it would be a case of irreparable loss to the plaintiff as a purchaser. Mere registration of a lis in terms of Section 52 of the Transfer of Property Act and, more particularly, by virtue of amendment provided in the State of Maharashtra, by itself, will not be sufficient to protect rights of he plaintiff as a purchaser. The legal position has been explained by the Honourable Supreme Court in AIR 2005 SC 104 in the matter of Maharwal Khewaji Trust (Regd.) Faridkot Vs. Baldev Dass and in the recent judgment of T.G.Ashok Kumar Vs. Govindammal & Anr ( 2011(1) ALL MR 462 (S.C.). In these decisions, the Honourable Supreme Court has indicated that Section 52 of the Transfer of Property Act, 1882, does not declare a pendente lite transfer by a party to the suit as void or illegal, but only makes the pendente lite purchaser bound by the decision in the pending litigation. The Supreme Court has referred to the deficiencies in Section 52 of the Transfer of Property Act. The Hon'ble Supreme Court in T.G.Ashok Kumar Vs. Govindammal & Anr has observed in para 10 as under: 11 AO NO.193 OF 2011 "10. The principle underlying Section 52 is clear. If during the pendency of any suit in a court of competent jurisdiction which is not collusive, in which any right of an immovable property is directly and specifically in question, such property cannot be transferred by any party to the suit so as to affect the rights of any other party to the suit under any decree that may be made in such suit. If ultimately the title of the pendente lite transferor is upheld in regard to the transferred property, the transferee's title will not be affected. On the other hand, if the title of the pendente lite transferor is recognized or accepted only in regard to a part of the transferred property, then the transferee's title will be saved only in regard to that extent and the transfer in regard to the remaining portion of the transferred property to which the transferor is found not entitled, will be invalid and the transferee will not get any right, title or interest in that portion. If the property transferred pendente lite, is allotted in entirely to some other party or parties or if the transferor is held to have no right or title in that property, the transferee will not have any title to the property. Where a co-owner alienates a property or a portion of a property representing to be the absolute owner, equities can no doubt be adjusted while making the division during the final decree proceedings, if feasible and practical (that is without causing loss or hardship or inconvenience to other parties) by allotting the property or portion of the property transferred pendente lite, to the share of the transferor, so that the bonafide transferee's right and title are saved fully or partially." 12 AO NO.193 OF 2011 12. The effect of Section 19 of the Specific Relief Act,1963, to which repeated reference was given by Mr. Patil, needs to be evaluated. Section 19 illustrate as under: "19. Relief against parties and persons claiming under them by subsequent title.- Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against- (a) either party thereto; (b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract; (c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant; (d) ... ..... (e) ... ....." The Section starts with a rider "Except as otherwise provided by this Chapter," specific performance of a contract may be enforced against and the terms therein. Necessarily, the other terms in the Statute are to be rigidly adhered to. To repeat, the relief of specific performance needs to be attended to with discretion of the Court which also flows, Court 13 AO NO.193 OF 2011 has power to award compensation in certain cases, as referred in Section 21 of the Specific Relief Act, 1963. Section 20 deals with discretion as to decreeing the specific performance. Explanation reads as under: "Explanation 1.- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract." The explanations are an eye opener in its nature. Clause (3) illustrate that Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. 13. The conduct of the plaintiff as a purchaser is demonstrated herein-before. He has prima facie seen, parted with Rs.1,45,000,00/- 14 AO NO.193 OF 2011 (Rs.one crore, fourty five lacs). He has shown inclination to remit balance amount, the part of performance in terms of the clauses of the agreement was definitely on the defendant to cause measurement and then enable erecting of compound wall. Consequently, Section 19 of the Specific Relief Act will not take away rights for clamping injunction which flowed in the Court. 14. The learned Judge, having reached to the conclusions that there existed a prima facie case and balance of convenience is certainly guided by the provisions enumerated and conceived in Order 39 Rules 1 and 2 of Code of Civil Procedure. which encompasses : "(a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that the defendant threatens, or intends, to remove or dispose of his property with a view to (defrauding) his creditors, [(c) that the defendant threatens to dispossess, the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the Court may be order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property 15 AO NO.193 OF 2011 [or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit] as the Court thinks fit, until the disposal of the suit or until further orders." Reading clauses (a) and (c) together and in juxtaposition, I find, reply assertion of the defendant and vehement submission before the learned Judge that he has, indeed, desire to alienate the property, will amount to causing injury to the rights of the plaintiffs and such alienation will be again adding to multiplicity in the litigation which is not scheme and theme of the Specific Relief Act. 15. The learned Judge has observed in paragraph No.8 as under: " As observed above almost all the facts in the case in hand are undisputed. So the question only remains is to be considered whether the time was essence of contract and if yet whether the defendants have waived the time as essence of contract. However, at this juncture it will be improper to make any comment on this aspect. So ultimate effect is that defendants agreed to sell the suit land to the plaintiffs and plaintiffs have approached the court to get execute the sell deed. Since the agreement to sell stands in favour of plaintiffs I think that plaintiffs have prima facie case and certainly balance of convenience lies in their favour. Disputed question about the time as essence of contract needs to be inquired into and it is bona fide dispute between the parties 16 AO NO.193 OF 2011 which is the basic of prima facie case. So I hold that plaintiffs have prima facie case and balance of convenience lies in their favour. Accordingly, I answer point Nos. 1 and 2 in the affirmative. " 16. In the light of the submissions advanced, to repeat, it was not open for defendant as an affiant before this Court, to refer in paragraph no.4 of the affidavit that he has received only Rs.5,00,000/- ( Rs. five lacs). Since the learned Judge has arrived at a conclusion of prima facie case, balance of convenience, everything in favour of the plaintiff, the resultant is the irreparable loss would be to the plaintiff as a purchaser and not to the defendant as a vendor/seller. Consequently, rejection of injunction below Exh.6 in Special Civil Suit No.150/2011 is set aside. The defendant is injuncted from alienating and/or creating third party rights in respect of the suit property till disposal of the suit. The observations are prima facie in nature. Appeal From Order and Civil Application disposed of in above terms. ( K.U. CHANDIWAL, J. ) ... agp/193-11ao