High Court
Legal Reasoning
1 sa 135.21IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADSECOND APPEAL NO. 135 OF 2021Shridhar S/o Baburao RitheDied through his L.Rs.1/1Shantabai W/o Shridhar Ritheand others.. AppellantsVersusVilas S/o Vishwanathappa Kherudkar.. RespondentShri H. I. Pathan, Advocate for the Appellants.Shri Milind M. Patil (Beedkar), Advocate for the Respondent.CORAM :SHAILESH P. BRAHME, J. DATE :19TH SEPTEMBER, 2025.FINAL ORDER :.Heard both sides.2.Appellants – original defendants are questioningconcurrent findings of facts recorded in decreeing suit for specificperformance of contract.3.The respondent had filed Spl.C.S. No. 61 of 2009 on thebasis agreement to sale dated 09.11.2006 at Exhibit 21 andfurther agreement dated 17.01.2007 at Exhibit 22. Appellants –original defendants proposed to sell suit house to the respondentfor consideration of Rs. 29,60,000/-. Both the agreements wereexecuted by appellant No. 1 – Shridhar. The suit house was
Legal Reasoning
2 sa 135.21allotted to appellant No. 2 – Kisanrao, but it was shown in therecord of rights in the name of appellant No. 1 – Shridhar. Afternecessary compliance, sale deed was to be executed on or before15.01.2007, which was extended by agreement Exhibit 22.4.Appellants contested the suit on the ground that appellantNo. 2 – Kishanrao was not the signatory to the agreements andthose would not bind him. It is contended that agreements arenot enforceable. It is further pleaded that time was the essenceof contract and suit was barred by limitation.5.Respondent adduced evidence of three witnesses and theappellants adduced evidence of two witnesses. The Trial Courtdecreed the Spl. C. S. No. 61 of 2009 vide judgment dated19.12.2013. Being aggrieved, appellant preferred R.C.A. No. 78of 2017, which was dismissed vide judgment dated 16.01.2020.6.Learned counsel for the appellants Mr. H. I. Pathanformulates his submissions on substantial questions of lawincorporated as A to G in the memo of the second appeal. Hesubmits that agreements in question are not enforceable asappellant No. 2 - Kishanrao did not sign. There was no consenton the part of the appellant No. 2 and the suit should have beendismissed. It is submitted that time was the essence of contractand respondent failed to perform his part of contract. Both theCourts below ought to have dismissed the suit. It is furthersubmitted that respondent was not ready and willing to perform 3 sa 135.21his part of contract and the findings in that regard are perverse.It is submitted that after receiving notice dated 29.11.2007Exhibit 23, respondent did not pay balance amount and no stepswere taken within eight days for getting the sale deed executed.7.Learned counsel Mr. H. I. Pathan adverted my attention tothe depositions of P.W. Nos. 1, 2 and 3 on the point of readinessand willingness. It is vehemently submitted that the prices areescalating. Agreement was executed in 2006 for consideration ofRs. 29,60,000/-, out of that only Rs. 3,00,000/- was paid as anearnest amount. Today’s market price is much more than whatwas fixed between the parties. Considering the hardshipdiscretion should not have been exercised in favour of therespondents.8.Per contra, learned counsel Mr. Milind M. Patil (Beedkar)for the respondent adverts my attention to the recitals ofagreements Exhibit Nos. 21 and 22 to canvass that it was agreedbetween the parties that suit house was allotted to appellant No.2, but name of the appellant No. 1 is appearing in the record ofright and with that understanding the agreements wereexecuted. It is submitted that considering the written statementat Exhibit 13 and the agreements, the appellants are estoppedfrom contending that agreements are not enforceable for want ofsignature of the appellant No. 2. It is further submitted thatcross examination of D.W. No. 1 – Kishanrao supports case of theplaintiff. It is submitted that time can be said to be essence of 4 sa 135.21contract vide agreement at Exhibit 21, but by subsequentagreement Exhibit 22, no time limit was prescribed for executingsale deed. It is submitted that both the Courts below haveconcurrently recorded finding of facts of readiness andwillingness, which would not be interfered with. It is submittedthat the escalating prices of the properties cannot be the defenceto deny relief of specific performance of contract.9.With the assistance of learned counsels, I have gonethrough the record and proceedings. I have also consideredrelevant depositions of the witnesses.10.Having considered rival submissions of the parties,undisputedly, agreement at Exhibit 21 was executed on09.11.2006 prescribing cut of date of 15.01.2007 for execution ofsale deed. The Time was extended by further agreement dated17.01.2007 Exhibit 22, which does not prescribe a cut off date,but only recites to execute sale deed within eight days fromcompliance made by the parties.11.Considering the recitals of both the agreements and thedepositions of the witnesses, appellants were obliged to clear thetaxes, get corrected P.R. card and keep the relevant documentsready for the sale deed. It was their bounden duty to complyabove formalities and intimate the respondent about thecompliance so that he would pay the balance amount. 5 sa 135.2112.Appellant No. 2 – Kishanrao did not sign either of theagreements. His son Deepak was the attesting witness to bothagreements Exhibit 21 and 22. The written statement filed byboth the appellants at Exhibit 13, unequivocally shows that itwas understanding between the parties that suit house wasallotted to the appellant No. 2 – Kishanrao, but the record ofrights was disclosing name of appellant No. 1 – Shridhar. Therewas no specific defence by the appellant No. 2 that behind hisback the suit house was proposed to be sold by the appellant No.1. The circumstances do not show that the appellant No. 2 wasunaware of any transaction of selling the suit house. In allprobabilities presuming that the appellants were co-owners, theywere made defendants in the suit. It is impermissible for them tocontend that agreements are not enforceable as against theappellant No. 2.13.The above aspect is specifically dealt with by both theCourts below. After demise of appellant No. 1 his heirs filedwritten statement, but did not step into witness box. It is notpermissible to contend that appellant No. 1 had no right toexecute the sale deed. In this regard the admissions of theappellant No. 2 in the cross examination are very speaking andcorroborates respondent’s case. Both the Courts below haverecorded concurrent findings of facts, which cannot be faulted.14.To appreciate the submissions as to whether the time wasessence of contract and whether the suit was barred by 6 sa 135.21limitation, I have carefully gone through the recitals ofagreement Exhibit Nos. 21 and 22. By first agreement it wasagreed that sale deed was to be executed by 15.01.2007 andfailure of which would result in forfeiture of the earnest amount.By subsequent agreement Exhibit 22 the time was extended byeight days from the date of compliances made by the appellants.There is no default clause incorporated showing for forfeiture ofearnest or repudiation of the contract. The Trial Court recordedthat time was essence of contract mainly relying upon agreementExhibit 21, which is rectified by the lower Appellate Courtholding it in negative. A reliance is placed on the judgment ofthe Supreme Court in the matter of Arosan Enterprises Ltd. Vs. Unionof India and another reported (1999) 9 SCC 449 which is squarelyapplicable to the facts of the case. In view of the agreementExhibit 22, it is rightly concluded that time was not essence ofcontract. I do not find any illegality or perversity in the findingsrecorded by the Appellate Court.15.The subsequent agreement was executed on 17.01.2007.There was exchange of notices between the parties. Thereaftersuit was filed on 17.07.2009. It is filed within a period of threeyears from the cause of action. There is no substance in thesubmission that suit is barred by limitation.16.I have carefully gone through the findings recorded by boththe Courts on the point of readiness and willingness. I havealready observed that it was the duty of the appellants to pay 7 sa 135.21taxes, to clear the dues, to rectify the record of rights andthereafter to apprise to the respondent. There is no evidence onrecord to show that after correcting the PR card any intimationwas given to the respondent. It is admitted by the defendant No.2 in his cross examination that no such intimation in writing wasgiven to the plaintiff. It is difficult to believe that orallyrespondent was informed after 01.08.2007. On 29.11.2007 anotice was issued to the respondent, however, it is not made clearas to whether the respondent was apprised of the clearance ofdues and payment of taxes at any point of time. The reply dated26.12.2007 given by the respondent to the notice was notresponded.17.With the assistance of learned counsels I have gonethrough the cross examination of D.W. No. 2 – Kishanrao. 18.Parties have agreed for the consideration of Rs. 29,60,000/-.Out of that Rs. 3,00,000/- were paid as earnest amount by therespondent. The possession was to be handed over at the time ofexecution of the sale deed. Both Courts below have recorded thatthe respondent was ready and willing to perform his part ofcontract. The agreements are found to be enforceable. Underthese circumstances merely because the consideration isinadequate or it’s only place of residence would be against Sec.20(2) of the Specific Relief Act. There is nothing on record toshow that agreements were fraudulently executed and there wasno intention to sell out the suit house. I do not find anysubstance in the submission of hardship pressed into service by 8 sa 135.21the appellants.19.The learned counsel for the respondent has relied on thejudgment of the Apex Court in the matter of Balasaheb DayandeoNaik (Dead) through Lrs and others Vs. Appasaheb Dattatraya Pawar reportedin [2008] 1 S.C.R. 1169. It is submitted that the recital inagreement Exhibit 21 regarding forfeiture of earnest amount onfailure to comply with the agreement would not be interpreted astime was the essence of contract. I have gone through para No.13 of the judgment, which can be reiterated as follows :“13) It is true that the defendant in his written statement has made abald claim that the time was the essence of contract. Even if weaccept the recital in the agreement of sale (Exh. 18) that the saledeed has to be executed within a period of six months, there is anexpress provision in the agreement itself that failure to adhere thetime, the earnest money will be forfeited. In such circumstancesand in view of recital pertaining to forfeiture of the earnest moneymakes it clear that time was never intended by the parties to be ofessence. The Constitution Bench decision in Chand Rani vs. KamalRani (supra) also makes it clear that mere fixation of time withinwhich contract is to be performed does not make the stipulation asto the time as the essence of contract. Further, we have alreadypointed out that the defendant has not bothered to prove his claimon oath before the Court to the effect that it was the plaintiffs whoavoided performing their part of contract. All the above-mentionedmaterial aspects were correctly appreciated by the trial Court andunfortunately the High Court failed to adhere to the well knownprinciples and the conduct of the defendant. When the third plaintiffdeposed before the Court explaining their case with reference to therecitals in the agreement of sale including the reference to the legalnotice to the defendant, in the absence of contra evidence on theside of the defendant, we are unable to agree with the conclusionarrived at by the High Court in non suiting the plaintiff. The High 9 sa 135.21Court commented the conduct of the plaintiffs in praying for refundof the earnest money, namely, Rs.20,000/- paid as advance. Asrightly pointed out, the claim for refund of earnest money is onlytheir alternative claim. It is not in dispute that in all suits forspecific performance, the plaintiff is entitled to seek alternativerelief in the event the decree for specific performance cannot begranted for any reason, hence there is no infirmity in the alternativeplea of refund.”Considering the above ratio even from the agreement Exhibit 21it cannot be inferred that time was essence of contract, muchlessthe subsequent agreement does not provide the said clause. 20.For the foregoing reasons I find that the substantialquestions of law which are pressed into service by the appellantsare ostensible only and without any merit. Second appeal standsdismissed. There shall be no order as to costs. [ SHAILESH P. BRAHME J. ] bsb/Sept. 25