Banshilal Soni (Dead) Through L.Rs vs Kastoor Chand Begani(Dead) By L.Rs. & ...

Background facts in a nutshell are as follows:

The defendants resisted the relief sought in the suit. According to them, the defendant No.2 had not signed the above agreement. In the year 1989, the defendant No.1 had suffered loss in his business and was in financial difficulty and, therefore, he approached the plaintiff for financial assistance. The plaintiff had advanced Rs.50,000/- as a loan on the condition, that the defendants shall execute an agreement to sell the suit house as a collateral security for such loan. It is the case of the defendants that the market value of the suit house was Rs.10 lakhs but the defendants were compelled to execute the agreement being in a precarious financial condition. It was also stated that they were not required to obtain any clearance certificate from the Income Tax Department and had never agreed to hand over the possession of the suit house after execution of sale deed. They disputed the plaintiff's readiness and willingness. It was also the case of the defendants before the Court below that the plaintiff had accepted Rs.25,000/- on 3.4.1991 towards a part of the loan advanced by him and granted a receipt thereof. It was also pleaded that the contract is not specifically enforceable as the agreement itself stipulates that the parties had agreed that the defendants shall pay Rs.2 lakhs to the plaintiff in case the contract was not completed. It was further set forth that in case the court thinks it fit, it may grant compensation to the plaintiff, instead of issuing a direction for execution of the sale deed. It was also put-forth by the defendants that the time was the essence of the contract and the same having not been given due compliance, the plaintiff was not entitled to any relief under the law. Lastly, it was contended by the defendants that the plaintiff having voluntarily accepted the return of Rs.25,000/- he had abandoned his claim of specific enforcement of the contract.

A bare reading of the evidence of the defendants clearly shows that the specific case was one of loan and security and not a case regarding refund of earnest money. That being so the High Court has made out a new case that the sum of Rs.25,000/- was by way of refund of earnest money. That was not the case of the defendants in the pleadings or in the evidence. Interestingly, the stands in the reply to the notice were at variance with the written statement. Therefore, normally we would have set aside the order of the High Court. But some factors which were relevant for the respondent need to be noted. It is stated that the house is only one which is possessed by the legal heirs of the original defendant though the learned counsel for the appellants stated that the statement is not fully correct. Both the plaintiff and the defendant No.1 have died. We feel in the peculiar circumstances of the case interest of justice would be best served if the respondents are directed to pay a sum of Rs.7.5 lakhs to the appellants. It is stated that a sum of rupees one lakh has been deposited pursuant to the order of the High Court. The same shall be permitted to be withdrawn by the appellants. Balance amount shall be paid within six months by the respondents to the appellants. If the payment is made, it shall be treated as if we have not interfered with the order of the High Court though the same is not sustainable. On the contrary, if the amount is not paid, the appeal shall be treated as allowed and the impugned order has to be treated to have been set aside.

The appeal is accordingly disposed of. There will be no order as to costs.