(1) SA. 282.1989 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD SECOND APPEAL NO. 282 OF 1989 Sopan Sambhaji Bochare died through LRs. 1] Rajkumar Sopan Bochare Age : 35 years, Occu.: Service 2] Vitthal Sopan Bochare, Age : 30 years, Occu.: Service 3] Mathurabai Sopan Bochare, Age : 60 years, Occu.: Household All R/o Village Devkuruli, Tq. Tuljapur 4] Sunita Satling Shetgar Age : 38 years, Occu.: Service, R/o A-43, Abhisekh Nagar, Pune Naka, Solapur .. Appellants VERSUS Mahadeo Maruti Jadhav .. Respondent Mr. K.K. Kulkarni, Advocate for the appellants Mr. H.K. Munde, Advocate for the reepondent CORAM : A.V. NIRGUDE, J. DATED : 29TH JANUARY, 2010 ORAL JUDGMENT:- 1] This second appeal essentially challenges the judgment and decree passed by the learned IInd Additional District Judge, Osmanabad in Regular (2) SA. 282.1989 Civil Appeal no. 135 of 1982. The appellant was the plaintiff. He filed the suit for specific performance of an agreement of sale which was admittedly executed in his favour by the respondent- defendant. 2] The case of the appellant was as under:- . The respondent-defendant was owner of land survey no.227/E admeasuring 6A 36 guntha of village Devkuruli, Tq. Tuljapur, Dist. Osmanabad. On 13.12.1973, he agreed to sell this land to the appellant for a sum of Rs.10,000/-. At the time of execution of the registered agreement for sale the respondent received Rs.2000/- as earnest and put the appellant-defendant in possession of the land. It was agreed between the parties that within next 11 months, the respondent-plaintiff would clear the encumbrances on the land utilising the remaining consideration of Rs.8000/-. It was further contemplated that after the removal of the encumbrances on the land, the remaining consideration, if any, would be paid to the respondent and he would execute the registered sale deed. As said above, all these steps were expected to be completed within 11 months from the date of the agreement. It is the case of the appellant that soon after the agreement, he tried to persuade the respondent to perform his part of the contract but in vein. He said the respondent avoided his part of the contract. So, the appellant issued notice on (3) SA. 282.1989 17.8.1976, to the respondent demanding the specific performance of the contract. The respondent failed to do so and so the suit was filed on 21.12.1976. The respondent took a peculiar defence. He said he never agreed to sell the land, but he said that the appellant was doing unauthorised money-lending business and as he was in need of money, he approached him for loan of Rs.500/-. He said after the loan of Rs.500/- was given, the appellant obtained from him the registered agreement. He said the agreement was the security for the loan. He even denied having delivered the possession of land to the appellant. The trial Court held that the appellant had proved not only the execution of the agreement but also proved that he was put in possession of the said land pursuant to the agreement and that he was ready and willing to perform his part of the contract. He dis-believed the case of the respondent and decreed the suit. The respondent went in appeal and the learned IInd Additional District Judge, Osmanabad partly set aside the decree for specific performance and directed the respondent to refund the earnest of Rs. 2000/- only. He refused specific performance to the appellant. The appellant has challenged this judgment in this appeal. 3] Following Substantial questions of law were noticed when the appeal was admitted in 1989:- (4) SA. 282.1989 Ground no.(2) : That, the learned IInd Additional District Judge, Osmanabad has committed an error in holding that, the provisions of Section 48(d) of Maharashtra Co-operative Societies Act, 1960 operate as a bar for the execution of an Isar Pawati in favour of this Appellant-Plaintiff. Ground no.(3) : That, the learned Additional District Judge, has also committed an error in holding that this Appellate ought to have cleared of all the arrears of Co-operative Society and Land Development Bank before filing the suit by him in the year 1976. This finding of the learned District Judge, is not supported by any provision of law. Ground no.(4) : That, the learned Additional District Judge has also committed an error in wrongly interpreting the provisions of Section 48(d) of Maharashtra Co-operative Societies Act, 1960 and section 20 of Specific Relief Act, and applying the same to the present case. Ground no.(5) : That, the learned Second Additional District Judge, Osmanabad has also committed an error in holding that this Appellant was not ready and willing to perform his part of contract. The reasoning given in this behalf is perverse and against the settled principles of law. 4] Before I deal with the above quoted substantial questions of law, I must narrate the reasons recorded by the learned Additional Sessions Judge, for refusing specific performance of the contract. The learned Judges concurrently held that the appellant could prove the agreement and delivery (5) SA. 282.1989 of possession. However, the learned Judge of the appellate Court, quite peculiarly blamed the appellant for not clearing the encumbrances on the land. He noticed that the appellant did not utter a single word in his deposition, as to whether he had taken any steps to clear the outstanding dues of the said land. He further noticed that the appellant did not plead that he made enquiry with the co- operative society and the Land Development Bank regarding the outstanding dues on the suit land. He held that in view of this failure on his part, he would hold that he was not all along ready and willing to perform his part of the contract. He further held that since the appellant did not send notice to the respondent immediately after the expiry of 11 months period, it was necessary to come to a conclusion that he was not ready and willing to perform his part of the contract. He further held that there was no convincing evidence coming from the appellant that he was ready and willing to perform his part of contract. Based on these reasons the learned Judge of the first appellate Court set aside the findings of the trial Court that the appellant was ready and willing to perform his part of the contract. 5] The learned Judge of the first appellate Court further noticed that the 7/12 extract of the suit land showed that the land was encumbered with a Co-operative society's dues and dues of the Land (6) SA. 282.1989 Development bank. He held that as per section 48[d] of the Maharashtra Co-operative Societies Act, 1960, the respondent was prohibited from transferring this land till he cleared the dues of the co-operative society. He held that bar of section 48[d] of the Act would prevent granting of the decree of specific performance in favour of the appellant. Recording these reasons as said above, the learned Judge of the lower appellate Court, denied the appellant the specific performance. The first substantial question of law is whether the provisions of section 48[d] would operate as bar for the execution of the agreement and further sale of the property. Section 48[d] reads as under:- 48[d] Change on immovable property of members borrowing from certain societies- . Notwithstanding anything contained in this Act or in any other law for the time being in force- ... ... ... [d] no member shall alienate the whole or any part of the land or interest therein, specified in the declaration made under clause (a) or (b) until the whole amount borrowed by the member together with interest thereon, is repaid in full: . Provided that, it shall be lawful to a member to execute a mortgage bond [in respect of such land or any part thereof in favour of [a Co-operative Agriculture and Rural (7) SA. 282.1989 Multipurpose Development Bank] or of the State Government] under the Bombay Canal Rules made under the Bombay Irrigation Act, 1879 or under any corresponding law for the time being in force for the supply of water from a canal to such land, or to any part thereof: . Provided further that, if a part of the amount borrowed by a member is paid [the society with the approval of the Central Bank to which it may be indebted] may, on an application from the member, release from the charge created under the declaration made under clause (a) or (b), such part of the movable or immovable property specified in the said declaration, as it may deem proper, with due regard to the security of the balance of the amount remaining outstanding from the member; . Having regard to the above quoted provisions the answer to this question, is certainly negative. On bare perusal of section 48[d], it is clear that in order to utilise the impediment of section 48, there has to be on record the evidence to show that the respondent had made a declaration as prescribed under clause (a) and (d) of section 48. This certainly was not the defence of the respondent. He never said in his written statement or in his deposition that he had made certain declaration and that the provisions of section 48 would prohibit him from executing the agreement etc. The learned Judge of the first appellate Court, should have realised by mere reading the provision of section 48, that his line of thinking was patently incorrect. The (8) SA. 282.1989 very fact that the provisions of section 48 are not quoted in the judgment of the lower appellate Court indicates that the learned Judge, most probably did not even read the provisions carefully. In absence of evidence of making of the declaration, the learned Judge of the lower appellate Court could not have referred to the provisions of section 48. It is thus clear that the learned Judge of the lower appellate Court had committed a serious error in holding that the provisions of section 48[d] would operate as bar for the execution of the suit agreement. Assuming that the declaration contemplated under clause (a) of section 48 is on record, yet the provisions will not prohibit the respondent to execute the agreement for sale. The provisions of section 48 would not debar him from making such agreement. Besides in this case, the parties have certainly agreed to take steps to clear the dues prior to the transfer of the land. The agreement for sale does not give ownership right to the purchaser and so, the parties rightly contemplated to clear the dues of the co-operative society prior to the execution of the sale deed. It seems, the learned Judge of the lower appellate Court on his own invented the legal bar under section 48[d] of the Act only to refuse specific performance to the appellant. 6] Ground no.[2] and [3]: . Appreciation of the learned Judge of the lower (9) SA. 282.1989 appellate Court, is grossly perverse when he expected the appellant to clear the dues of the co- operative housing society all by himself. This was never contemplated between the parties. The parties agreed that the respondent will clear the dues utilising part of the remaining consideration for the land. Had the respondent been keen to clear such dues, he would have certainly demanded adequate part of the consideration or entire consideration for the purpose of clearing the dues. If he did not take such steps, the Court can not blame the purchaser. In the facts and circumstances of this case, it was indeed necessary for the respondent to take steps for clearing the dues and getting the remaining consideration from the appellant. As said above after the agreement was executed, the respondent delivered possession of the land to the appellant. The land measured 6 Acre 36 guntha. This was quite a large piece of land. It is clear that the respondent lost control over a large piece of land. At the same time, he received only 1/5th of the consideration. In these circumstances, it would be natural for the respondent/vendor to get the remaining consideration recovered from the purchaser as soon as possible. On the other hand, in a situation like this, the appellant the purchaser who had taken possession of the land would not be eager to complete the sale transaction for he would enjoy the land paying only a fraction of the consideration. Between two parties, it was the (10) SA. 282.1989 respondent who should have been eager to get the transaction completed and to recover the remaining consideration. So, the appreciation of the evidence of the learned Judge of the lower appellate Court is nothing short of perversity. 7] Ground no. (IV) and (V): . As discussed above, the entire appreciation of evidence of the learned Judge of the first appellate Court was perverse, so much so, that as if he was bent on refusing the decree of specific performance to the appellant. The facts and the evidence in the case are so grossly against the respondent that the ignorance of such aspects of the case by the learned Judge of the lower appellate Court misled him to a conclusion that the appellant was not ready and willing to perform his part of the contract. As said above, in the facts of the case there was no question of the appellant's readiness and willingness to perform his part of the contract. He had taken possession of the land and was waiting for the respondent to take further steps to complete the sale transaction. So, the findings of the first appellate Court on this point were grossly erroneous. There is still a question as to whether the appellant has made out a case for specific performance. The defendant did not bring anything on record to show that the appellant at the time of the agreement had the upper hand in the bargain and (11) SA. 282.1989 so he could get the agreement executed in his favour. There is nothing on record to show that the agreement and the transaction of sale pursuant to it would put the respondent in inconvenience and hardship. In fact on this point the learned Judge of the first appellate Court clearly held that the respondent did not plead nor deposed about inconvenience and hardship to him if the specific performance was granted against him. 8] In view of this, the Second Appeal should succeed. The Second Appeal is allowed. The judgment and decree passed by the IInd Additional Sessions Judge, Osmanabad in Regular Civil Appeal no. 135 of 1982 is set aside and the judgment and decree passed by the trial Court is reinstated and the suit is decreed. Sd/- (A.V. NIRGUDE, J.) arp