1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD SECOND APPEAL NO.297 OF 1989 Ramdas Sakharam Sonawane died L.Rs. 1-a) Smt.Janabai Ramdas Sonawane Age: 75 Yrs., occu. Household 1-b) Bhika Ramdas Sonawane Age: 55 Yrs., occu.Agril. 1-c) Tukaram Ramdas Sonawane Age:45 Yrs., occu. Agril. 1-d) Bhagwat Ramdas Sonawane Age:43 Yrs., occu.Service. 1-e) Prabhakar Ramdas Sonawane Age: 41 Yrs., occu. Service. 1-f) Devidas Ramdas Sonawane Age: 39 Yrs., occu.Service All r/o Rameshwar Colony, Mehrun, Jalgaon. ..APPELLANTS VERSUS 1) Pundlik Ananda Ladvanjari 2) Kashinath Ananda Ladvanjai (died through L.Rs.) 2-a) Smt.Kamlabai Kashinath Ladvanjari, Age: 58 Yrs., occu. Agril. & Household, 2-b) Sopan Kashinath Ladvanjari Age: 18 Yrs., occ. Agril. Both r/o Mehrun, Tq. And District Jalgaon. ..RESPONDENTS 2 --- Mr.S.V.Gangapurwala, Advocate h/for Mr.SP Tiwari, Advocate for the appellants. Mr.V.T.Choudhari, Adv., for Respondents. AND SECOND APPEAL NO.298 of 1989 Ramdas Sakharam Sonawane died L.Rs. 1-a) Smt.Janabai Ramdas Sonawane Age: 75 Yrs., occu. Household 1-b) Bhika Ramdas Sonawane Age: 55 Yrs., occu.Agril. 1-c) Tukaram Ramdas Sonawane Age:45 Yrs., occu. Agril. 1-d) Bhagwat Ramdas Sonawane Age:43 Yrs., occu.Service. 1-e) Prabhakar Ramdas Sonawane Age: 41 Yrs., occu. Service. 1-f) Devidas Ramdas Sonawane Age: 39 Yrs., occu.Service All r/o Rameshwar Colony, Mehrun, Jalgaon. 1-g) Sow.Yamunabai Baburao Kharche Age: 51 Yrs., occu. Household, r/o Behind Old Post Office, Yawal, District Jalgaon. 1-h) Sow. Narmada Shanphadu Wagh Age: 48 Yrs., occu. Household, r/o at and post Kirhal, Tq. Pachora. .. APPELLANTS VERSUS 1) Pundlik Ananda Ladvanjari 3 2) Kashinath Ananda Ladvanjai (died through L.Rs.) 2-a) Smt.Kamlabai Kashinath Ladvanjari, Age: 58 Yrs., occu. Agril. & Household, 2-b) Sopan Kashinath Ladvanjari Age: 18 Yrs., occ. Agril. Both r/o Mehrun, Tq. And District Jalgaon. ..RESPONDENTS --- Mr.S.V.Gangapurwala, Advocate h/for Mr.SP Tiwari, & S.A.Kulkarni, Advocates for the appellants. Mr.V.T.Choudhari, Adv., for Respondents. --- CORAM : K.U.CHANDIWAL, J. DATE : 15th June, 2009 *** JUDGMENT : 1) RCS No. 544/1979 was moved by Pundlik Ladwanjari and Kashinath Ladwanjari, against Ramdas Sakharam Sonawane, seeking possession of the property. The suit was decreed. RCA No. 141/1982 moved by the purchaser-Ramdas to the learned Additional District Judge, Jalgaon came to be rejected and the judgment in RCS No. 544/1979 was confirmed. Hence, the Second Appeal No.297/1989. 2) RCS No.496/1979 was preferred by Ramdas 4 Sakharam Sonawane against Pundlik Kashinath Ladvanjari and Kashinath Ananda Ladvanjari, seeking specific performance of agreement of sale dated 28th May, 1970 and 4th October, 1971 concerning agricultural property, Gut No. 308/2/1 of village Kusumbe. The said suit was decreed to the extent of refund of earnest money received by the defendants/sellers with interest. Ramdas, the plaintiff filed RCA No. 142/1982 on the file of Additional District Judge at Jalgaon, who confirmed the decree of the Court of first instance and dismissed the appeal. The said judgment is assailed by the plaintiff – Ramdas. 3) While admitting the appeal no. 297/1989 on 13.10.1989, it was admitted on ground nos. 5,6, and 7, which reads as under : “(5) The finding of the learned lower Appellate Court that the suit agreement was nominal and was executed by way of security of loan is absolutely perverse and based on no evidence. (6) It was absolutely erroneous to hold that there was no Agreement of Sale dated 20th May, 5 1970 and that the lost of that is not proved by the Appellant particularly when the possession receipt dated 20th May, 1970 is admitted by the Respondents and it makes a reference of Agreement of Sale dated 20th May, 1970. (7) The lower appellate Court travelled beyond the pleadings of the Respondents to the effect that the possession receipt dated 20th May, 1970 and the agreement of sale dated 4th October, 1971 is signed by the Respondent no.2 more particularly when both the Respondents in their plaint admit the execution of these two documents in positive terms and also when there is no evidence disputing the signatures.” 4) The other appeal being Second Appeal No. 298/1989 was admitted on the same date on the same above referred grounds. 5) The parties are referred by their first names or as purchaser and seller at all relevant 6 places. The facts in both the matters are as under - 6) Pundlik and Kashinath, in the capacity as owners of the agricultural property, entered into agreement of sale dated 20th May, 1970 for a total consideration of Rs. 2,500/-. An amount of Rs.1200/- was received as earnest. Possession Receipt was also executed. Since the agreement of sale was lost, the defendants executed a fresh Saudapawati (agreement of sale) on 4th October, 1971 in favour of Ramdas and acknowledged receipt of Rs.1200/- including balance consideration time to time, making the total receipt Rs. 2,000/-. The balance of Rs. 500/- was left to be paid before the Sub Registar, Jalgaon at the time of execution of sale-deed. At the relevant time, for the sale of the agricultural property, permission from the competent revenue authorities was required. The expenses were to be borne by purchaser while necessary applications and statements were agreed to be made by the seller – Pundlik and Kashinath. If the sale permission was granted and the purchaser Ramdas fails to get 7 the sale-deed executed, then the earnest and balance consideration paid, to be treated as forfeited. The other condition was, seller getting permission for division of the suit agriculture property from the revenue authorities. 7) The seller/defendant no.1 Pundlik moved the concerned authorities for permission on 22nd June, 1970 and by such permission, division was accorded on 9th August, 1971. On 16th June, 1972, there was measurement and sub-division was effected. The application to get permission for sale transaction from the Collector, Jalgaon could not be made as the defendant/seller avoided to do so. It was lastly on 9th September, 1974, the seller moved application for permission, consequent upon which, the learned Tahsildar issued notices dated 25th September, 1976 to the purchaser and on 4th October, 1976 to the seller – Pundlik and his brother. Pundlik, the Seller made an application to the Tahsildar on 16th October, 1976 that he was not willing to sell the suit land and sought its restoration. The 8 revenue authorities on 2nd April, 1978, based on the law prevalent, recorded that the transaction was legal and consequently, mutation entry no. 2296 was made in the revenue register. 8) In the year 1977 there was an amendment to the law relating to Bombay Prevention of fragmentation (Consolidation on Holdings)Act, and condition of permission for sale of agriculture property from Collector, Jalgaon was withdrawn, in view of Section 31(3) thereof The plaintiff requested the defendant to execute sale deed in terms agreed, however, on 7th September, 1979 the defendant denied the agreement and sought restoration and consequently, the suit for specific performance of contract filed on 9th October, 1979. 9) The defendants/sellers disputed,they have parted possession to the plaintiff or they have executed any Saudapawti on 20th May, 1970 or any possession receipt on 20th May, 1970. The seller – Narayan did not dispute that permission from the Competent Authorities for division of the suit field was received on 9th August, 1971 9 and land was divided in two parts. The defendants/seller contended they were in financial crunch, plaintiff agreed to finance them, being a money lender, and as a security, the defendant/seller on 4th October, 1971 received advance of Rs.2,000/- and it was a nominal sale transaction by way of security of loan for a total consideration of Rs.2500/-. It was at the instance of plaintiff/purchaser, they effected possession receipt in favour of purchaser Ramdas, the plaintiff. 10) The seller accepted possession of Ramdas over the suit land. They desired to reimburse the amount of Rs.2,000/-. 11) The defendants/seller filed RCS No. 544/1979 for possession on 13.11.1979 subsequent to the suit for specific performance dated 9th October 1979. This betrays, seller’s conduct and indicative only to counter purchaser’s suit, they have initiated proceedings for possession. 12) On assessing the evidence, learned CJJD, Jalgaon, answered the issues in favour of the purchaser, the plaintiff, observing that the 10 defendants/seller agreed to sell the agricultural property for a sum of Rs. 2,500/- by agreement of sale dated 4th October, 1971 as agreement dated 20th May, 1970 was lost and that the seller Pundlik and his brother received Rs.2,000/- towards sale consideration time to time. The plaintiff/purchaser was put in possession of the land in question. Plaintiff proved that he was and is ready and willing to perform his part of contract. Purchaser Ramdas could not establish that defendant Narayan had committed breach of contract. The defendant/seller failed to prove that the transaction is of a money lending and the agreement of sale executed was nominal with a view to give go-bye for license of money-lending. Under compelled circumstances, the agreement of sale came to be executed were also negatived. The Court found the seller did not reimburse the amount of Rs. 2,000/-. There was no breach of terms by the plaintiff, as purchaser. The learned Judge recorded that purchaser was entitled to claim specific performance. However, the learned Judge decreed the suit to the extent of refund of 11 Rs. 2,000/- with interest. 13) As indicated earlier, the matter was taken to the learned District Judge, the first fact finding court in appeal by the purchaser. The learned District Judge formulated following points/issues in RCA No.142/1982, - (1) Whether the defendants prove that the suit agreement was nominal one and was executed by way of security of the loan ? (2) Who committed breach of contract ? (3) Whether the suit was within limitation. (4) What order ? 14) The learned first Appellate Court recorded that the agreement in question was nominal and it was by way of security of loan. 15) The learned District Judge has mis- interpreted the possession receipt, observing that the revenue stamp there on is subsequently affixed though it is not the case propounded by the sellers. He should have considered joint pleadings of the defendants including the 12 evidence wherein, sellers agreed that such possession receipt, Exh.38 dated 20.5.1970, was singed by both of them. 16) The learned Judge, while dissecting the possession receipt, Exh.38 in paragraph 12 of the judgment, observed as under - “ the ink in which the word “Ananda Vanjari” is written and the word in which “ Kashinath Vanjari” is written, is the same and the hand-writing of both the signatories appear to be the same. The revenue stamp appears to have been pasted afterwards at Exh.38. The possession receipt and the word Pundlik appears to have been subsequently written on it as the word Kashinath was not written symmetrically below the word Pundlik, shrewdly informed the word Kashinath is not written below the word Pundlik below the stamp which is affixed at the end of the Possession Receipt, Exh.38. So from minute scrutiny of these two signatures and the manner in which they are written clearly reveals that Pundlik must have signed on behalf of Kashinath at the instance of plaintiff.” These observation of the learned Judge are not in tune with the pleadings or evidence of the defendant – Pundlik and his brother. To repeat, 13 the defendant as a seller did not dispute executing such possession receipt Exh.38, and plaintiff to be in possession of property. It was in this situation, I was also required to go through Exhibit-38 and I find that the observations of the learned Judge are in contrast to the document, Exh. 38 as the document was scribed by pen in black ink and in natural corollary signatures by the seller/defendant appear in blue ink. No foreign view could be incorporated in such exercise, as, to repeat, nobody disputes of executing the document, Exh. 38. The finding of the learned Appellate court that the possession receipt, Exh.38, was not executed by Kashinath, in the situation is uncalled for and such observation needs to be deprecated. 17) The assessment of evidence of PW2 – Kalidas about Exhibit-38, is misplaced as though the witness has stated having signed the possession receipt, Exh.38, but in fact he joined the parties to the field for ploughing and he was signatory of the agreement of sale (Exh.39), 14 could not have been ignored by the learned Appellate Judge. This is more so, as the situation was apparently accepted by the defendant without there being any suggestion to PW 2 – Kalidas, denying his assertion. The seller did not plead and prove that indeed he has received only Rs.1500/- from purchaser against which document incorporates receipt of Rs.2000. Pundlik (D.W.1) simply stated so in the evidence at paragraph 2 without getting it explored and expanded. 18) The Court of first instance accepted the transaction of purchase by the plaintiff/purchaser in its letter and spirit, but negatived the same for its performance on the ground that there was breach committed by the plaintiff and there was delay in getting the transaction completed. 19) In fact, the delay on the part of the plaintiff is not attributable to purchaser. The document, Exhibit-39, incorporate certain terms and conditions. One of the conditions was after the permission from the Commissioner, an 15 application should have been made to the Competent authority within one month. The division of the land Gut No. 308 was permitted by order dated 9th August, 1971 as per Exhibit-20. The defendant, vide Exhibit-40 applied to the Collector for permission to sell the suit land; it was only on 16th September, 1974. The delay effected by the defendant/seller, is to be shared and blamed by him, it was an obligation cast on him, the plaintiff, as purchaser, had no role to play. The stipulation of one month in Exhibit-39 for effecting the sale-deed executed from the permission of the division of the suit field is by itself not sufficient, as the Collector was competent authority to allow to transact in terms of agreement and indeed such application was made by the defendant on 16th September, 1974. It has come in the plaintiff’s evidence, he has requested the defendant orally for compliance of obligation for applying to the Collector. This should be read in proper perspective, as the purchaser/plaintiff could not do in anything more than requesting the seller to apply to the 16 competent authority for the requisite formalities. He applied to Tahsildar, thereafter, it was on 16th October, 1976 (Exhibit-24) the defendant communicated his dis-inclination to sell the suit filed. The plaintiff learnt of the same subsequently and issued notice to the defendant and filed suit for specific performance of contract on 9th October, 1979. Even the date of refusal dated 16th October, 1976 is taken into consideration, the action by plaintiff is perfectly within parameters of three years, there will not be a bar of Article 54 of the Limitation Act to the plaintiffs seeking remedies. The plaintiff was under the circumstances compelled to wait as the proceedings were in progress. The plaintiff could not be expected to make application within one month of Exhibit-39 to the competent revenue authorities. The evidence indicate, there was no breach of terms by the plaintiff or there is no delay. 20) The plaintiffs assert, that the possession is based on the agreement of sale. The evidence illustrate that plaintiff was always 17 ready and willing to perform his part of contract, substantial amount of Rs.2,000/- was paid. Secondly, if the remedies for performance of contract fail, still in terms of Section 53-A of the Transfer of Property Act, the plaintiff is entitled to retain the possession and enjoy the same, may not be as a perfect title holder. 21) The protection of Section 53-A of the Transfer of Property Act is available to a purchaser even if his suit for specific performance of contract is failed or frustrated or has become time barred. The position of law is clarified in a Full Bench Judgment of this Court in the matter of Mahadeo Nathuji Patil Vs. Surjabai Khushalchand Lakkad and Ors., reported in 1994 Mah.L.J. 1145, which has set aside the earlier views of the learned Single Judge. Thus, law, as on today is, the protection under the doctrine of part performance is available to the plaintiff even if his suit for specific performance of contract fails. 22) The defendant, though has on 16th October, 1976 tried to indicate his 18 disinclination to sell the property, however, approached the Court only after the plaintiff filing the suit on 9th October, 1979 by his suit dated 13.11.1979. He did nothing against purchaser from 16th October, 1976. This also demonstrates the culture, which the defendant, as seller was nourishing, and desire to develop. He wanted to take advantage of the situation, however, warned due to the taking of action by plaintiff in RCS No.496/1979 on 9th October, 1979. 23) The construction of the agreement, Exh. 39, would in all the situations, indicate that it was a transaction for absolute sale and did not evince any intention of the parties to advance the amount as a loan. 24) The contention that there is escalation in the prices, cannot be disputed, but it will not be a ground to condone the relief as sought by the plaintiff. The monies are paid to the defendant dating from 20th May, 1970 (Rupees 1200); 28th August, 1970 ( Rupees 50); 27th November, 1970 (Rupees 100); 30th August, 1970 (Rupees 235) and 4th October, 1971 (Rupees 415). 19 The phenomenal increase in the price of immovable properties, will have to be read in terms of the plaintiff parting the sale consideration in favour of the seller. The devaluation of rupee will have to be maintained in equilibrium. The analysis of evidence of Pundlik Ananda Ladvanjari is proved to be false in the light of his averments in RCS No. 544/1979 and also in the Written Statement in RCS No. 496/1979. 25) The evidence in all detailed particulars indicate that the plaintiff, as purchaser, was always ready to perform his part of contract. It was the defendant/seller, who had certain obligations to comply, of applying the revenue authorities; getting the division of the property. 26) It was not a pre-requisite that at the time of filing the suit the balance amount of Rs. 500/- should have been deposited in the Court. Provision of Section 16-C of the Specific Relief Act, does not mandate such deposit at the threshold of institution of a suit. 27) In the matter of M.P.Mathur VS. DTC and 20 Ors. , reported in AIR 2007 SC 414, the Hon’ble Lordship have dealt with the term “equity’ and in paragraph 15 has observed as under : The present suit is based on equity. The term "equity" has four different meanings, according to the context in which it is used. Usually it means "an equitable interest in property". Sometimes, it means "a mere equity", which is a procedural right ancillary to some right of property, for example, an equitable right to have a conveyance rectified. Thirdly, it may mean "floating equity", a term which may be used to describe the interest of a beneficiary under a will. Fourthly, "the right to obtain an injunction or other equitable remedy". In the present case, the plaintiffs have sought a remedy which is discretionary. They have instituted the suit under Section 34 of the 1963 Act. The discretion which the Court has to exercise is a judicial discretion. That discretion has to be exercised on well-settled principles. Therefore, the Court has to consider - the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the of the Court granting the decree. In such cases, the Court has to look at 21 the contract. The Court has to ascertain whether there exists an element of mutuality in the contract. If there is absence of mutuality the Court will not exercise discretion in favour of the plaintiffs. Even if, want of mutuality is regarded as discretionary and not as an absolute bar to specific performance, the Court has to consider the entire conduct of the parties in relation to the subject-matter and in case of any disqualifying circumstances the Court will not grant the relief prayed for [Snell's Equity, 31st Edn., page366]. In the present case, applying the above test, we do not find an iota of mutuality. There is no contract between DTC and the plaintiffs. There is no communication at any point of time between DTC and the plaintiffs. No sale- consideration was ever fixed. The plaintiffs were never called upon to make payment. The decision to allot remained tentative. In the circumstances, neither contract nor equity existed at any point of time so as to compel DTC to convey the tenements to the plaintiffs. 28) In the present case the equity is in favour of the plaintiff. He had the intention to purchase the property, he was after the seller to comply his part, of taking permission. 22 Substantial amount was paid, he was put in possession, if the possession is disturbed after the long period of nearly 35 years, it will be the purchaser,plaintiff, who will be at loss, as the fault or the delay cannot be attributed to the plaintiff. The equity favours the plaintiff. 29) The substantial questions of law formulated herein above are answered in favour of the appellant. Hence, order - (1) Second Appeal No.297/1989 arising out of RCA No. 141/1982 and RCS No. 544/1979 is allowed. The Judgment and Decree for possession is set aside. (2) Second Appeal No.298/1989 arising out of RCA No. 142/1982, and RCS No. 496/1979 is decreed as under : (i) The Defendants to execute sale deed within four months in favour of the plaintiff for the agricultural land admeasuring 1 hector and 91 R (4 Acres and 29 gunthas), bearing land Gut No. 308/2/1 of village Kusumbe (Kh.) Tq. And District Jalgaon. (ii) The plaintiff to deposit an amount of Rs.500/- before learned CJJD, Jalgaon within (2) two months. 23 (iii)Parties to bear their respective costs in both the appeals. sd/- ( K.U.CHANDIWAL) JUDGE bdv/sa297.89 Authenticate copy (BD VADNERE,PS)