High Court

Legal Reasoning

1 AO 56.23+CA.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADAPPEAL FROM ORDER NO. 56 OF 2023WITHCIVIL APPLICATION NO. 10913 OF 2023 IN AO/56/2023Jitendra Namdev Patil,age 40 years, Occ. Agri and Business,R/o Plot No.16/B, Shahu Nagar,Nalwa Road, Nandurbar,Tq. & District Nandurbar.Appellant. (orig plaintiff.)VERSUSBhagwan Ramchandra Marathe,age 64 years, Occ. Agri and Business,R/o Plot no.39, Ramchandra Nagar,Near Jijamata College,Bypass road, Nandurbar, Tq & Dist. Nandurbar.Respondent. (orig. defendant.)...Advocate for appellant : Mr. R S WaniAdvocate for Respondent-sole : Mr. A.S. Abhyankar a/w Mr. N.S. Shah h/f Mr. S.V. Natu …CORAM : S. G. CHAPALGAONKAR, J.Reserved on : January 14, 2025Pronounced on : February 26, 2025....ORDER :-1.The appellant impugns the order dated 4.5.2023passed by the 2nd Joint Civil Judge Sr. Division, Nandrbar on an 2 AO 56.23+CA.odtapplication below Exhibit-5 in Special Civil Suit No.31 of 2023.(Parties hereinafter are referred to as per their original status).2.The appellant is original plaintiff filed Special CivilSuit no.31 of 2023, seeking relief of specific performance ofcontract on the basis of agreement to sale dated 11.7.2022executed by defendant. According to plaintiff, suit propertyplot no.1, Survey No.183/4, admeasuring 557.37 sq. meterssituated at Nandurbar is owned by defendant. He agreed tosale same to plaintiff for total consideration ofRs.2,11,00,000/- (Rs.Two Crore Eleven Lakh). Plaintiff paidRs.1,00,000/-(Rs. One Lakh) prior to execution of theagreement. Thereafter, paid Rs.4,00,000/- (Rs. Four lakh)through cheque dated 11.7.2022. It was agreed that balanceamount of Rs.1,94,00,000/- shall be paid as per Schedulestipulated in agreement and last installment of Rs.12,00,000/-(Rs. Twelve Lakh) was to be released at the time of executionof sale-deed. According to plaintiff, defendant had agreed toremove tin-shed standing over the suit property and pan shopadjacent to the suit property. It was also agreed that propertywould be measured through competent authority andpossession would be handed over to plaintiff before execution 3 AO 56.23+CA.odtof sale-deed. Plaintiff contends that as per agreement, he paidRs.15.00 Lakh on 11.7.2022 and Rs.10.00 Lakh on 22.7.2022.Defendant acknowledged receipt of said amount on agreementitself. As such, before 27.07.2022 total amount of Rs.30 Lakhhas been paid to defendant. On 01.11.2022 plaintiff offeredamount of Rs.45.00 Lakh to defendant, however, he avoided toaccept amount by giving personal reason. Lateron, plaintifftold that entire consideration amount be paid at the time ofexecution of the sale-deed. Such changed agreed terms wereacceptable to both parties.3.After some days, plaintiff made inquiry withdefendant as to measurement of the land, but defendant gaveevasive answers. Lastly, plaintiff requested defendant to acceptconsideration amount as per schedule of payment stipulated inthe original agreement, however, he denied to accept amountand complete the sale transaction. Plaintiff was forced to issuelegal notice in January, 2023 calling upon defendant tocomplete sale transaction. A cheque of Rs.45.00 Lakh was alsopassed on alongwith the notice. However, defendant falselyreplied alleging breach of agreement against plaintiffcontending that unless entire consideration amount is paid, he 4 AO 56.23+CA.odtis not bound to complete the transaction. Eventually, plaintifffiled present suit alongwith an application at Exhibit-5 seekingtemporary injunction to restrain the defendant from alienatingor creating third party interest over the suit property.4.Defendant filed written statement and refutedaverments in suit. Defendant specifically denies receipt of cashamount of Rs.15.00 Lakh and 10 Lakh so also signatureacknowledging those amounts. According to defendant,plaintiff breached terms of contract. Hence, prayed fordismissal of the suit.5.Trial Court, after considering rival submissions anddocumentary evidence tendered into service, opined that sincedefendant has denied signatures acknowledging receipt of cashamount of Rs.15.00 Lakh plus Rs.10.00 Lakh, prima facie,there is breach of the contract. As such, plaintiff could notmake out prima facie case entitling him for relief of temporaryinjunction, as prayed.6.Mr. Ruchir Wani, learned advocate appearing forthe appellant vehemently submits that there is no dispute asregards to execution of the agreement to sale dated 4.7.2022. 5 AO 56.23+CA.odtAmount of Rs.5.00 Lakh was paid prior to agreement of sale.Lateron, amount of Rs.25.00 Lakh was paid. Receipt of saidamount has been duly acknowledged by defendant onagreement to sale itself. He invites attention of this Court tothe Schedule of payment, which depicts signatures ofdefendant acknowledging receipt of Rs.15.00 Lakh andRs.10.00 Lakh on 11.7.2022 and 22.7.2022, respectively. Mr.Wani would further submit that, it was obligatory on the partof plaintiff to carry out measurement through Land RecordOffice, then execute sale-deed as per actual area found in suchmeasurement. Since defendant failed to carry measurement asagreed between parties, the parties have mutually decided tochange the schedule. Accordingly, plaintiff offered defendantan amount of Rs.45.00 Lakhs alongwith legal notice, butdefendant avoided to accept the same.7.Per contra, Mr.Abhyankar, learned advocateappearing for respondent vehemently submit that time was theessence of contract. Defendant wanted to sell his land forspecific purpose. Schedule of payment was specifically agreedby the parties. Plaintiff failed to adhere with schedule. Assuch, he lost right to seek specific performance of the contract. 6 AO 56.23+CA.odtBy inviting attention to clause no.2 of the agreement to sale, hesubmits that the defendant had private debts and after clearingthe same, he wanted to purchase convenient plot. He wouldpoint out that defendant has specifically denied receipt of cashamount and signatures acknowledging the same. He wouldtherefore urge to confirm the order passed by the Trial Court.8.Having considered submissions advanced, it canbe observed that, there is no dispute between parties asregards to execution of agreement to sale dated 11.7.2022 asregards to the suit land. Defendant agreed to sell the suit landfor total consideration of Rs.2,11,00,000/- (Rs. Two CroresEleven Lakhs) in favour of the plaintiff. It is not disputed thaton 4.7.2022 amount of Rs.1.00 Lakh was paid by cash and on11.7.2022 amount of Rs.4.00 Lakh has been paid throughcheque. Therefore, initial receipt of Rs.5.00 Lakh in pursuanceto the agreement is not in dispute. Schedule of furtherpayment has been specified in the agreement to sell. Clauseno.4[C] stipulates payment terms in tabular form. Plaintiffspecifically alleges that on 11.7.2022 he paid cash installmentof Rs.15 Lakh and on 22.7.2022 next installment Rs.10 Lakh tothe defendant. However, defendant denied receipt of the 7 AO 56.23+CA.odtamount, so also his signature acknowledging such receipt.Plaintiff states that third installment of Rs.25.00 Lakh couldnot paid on scheduled date i.e. on 1.11.2022 since defendantrefused to accept cash amount under the pretext that he isgoing out of station. According to plaintiff, again he offeredpayment after eight days, but, defendant asked him to pay fullamount of consideration at the time of execution of the sale-deed. According to plaintiff, terms of contract were mutuallymodified and, therefore, further installment were not paid.The defendant failed to cause measurement of land and alsoaccepted balance amount of consideration. Lastly, legal noticewas served in the month of January, 2023.9.On the other hand, defendant's contention is that,plaintiff never paid cash amount as agreed in terms of theSchedule specified in the agreement. According to him,signatures appearing in agreement to sale acknowledgingreceipt of cash amount are fabricated. First time, on 7.1.2023plaintiff forwarded cheque of Rs.45.00 Lakh. In absence ofagreement to pay amount by way of cheque, there was noreason for defendant to accept said cheque. Plaintiff hasclearly defaulted in performance of his part of contract. 8 AO 56.23+CA.odt10.Minute reading of contents of the agreement tosale depicts that Schedule of payment was specified. Receipt ofcash amount was to be acknowledged and that was to beconsidered as earnest money and on payment of lastinstallment of Rs.12 Lakhs, sale deed was to be performed andpossession was to be handed over. However, agreement to salenowhere prescribes consequences of non-observance ofschedule of payment. Although, parties had fixed paymentschedule, date for execution of sale-deed was not specified.Defendant was put under obligation to remove a Panshopsituated on northern side of the plot before execution of thesale-deed. Consequences of cancellation of the agreement areprovided and plaintiff was entitled to receive the earnestmoney paid as per market rate.11.Aforesaid contents of the agreement to sale aresufficient to hold that parties have agreed to complete the saletransaction on transfer of the consideration amount of Rs.2crores as per payment schedule. However, in absence ofconsequence of non-adherence to the Schedule, agreement tosale would not automatically render invalid or un-executable. 9 AO 56.23+CA.odt12.It is true that, prima facie, plaintiff failed to followthe Schedule of payment. Whether such non- observanceamounts to breach of contract and whether time was essenceof the contract are the questions to be answered at the trial.Prima facie, plaintiff has proved execution of agreement tosale. In case, the defendant transfers property in favour ofthird person, purpose of suit would be frustrated. Plaintiff islikely to suffer irreparable loss/injury in case third party rightsare created. It is difficult to accept contention of Mr.Abhyankar that plaintiff would be entitled for refund of earnestmoney alongwith interest, but cannot seek specificperformance. Trial Court refused to grant injunction merely onthe ground that cash receipt of Rs.25.00 Lakh is denied by thedefendant. Even assuming that such payment was not made,agreement to sell subsists. Plaintiff has certainly proved primafacie case as to subsistence of agreement for sale. Breach ofcontract as alleged against the plaintiff needs to be provedduring the trial. Therefore, prima facie case exists in favour ofthe plaintiff. The plaintiff is likely to suffer irreparable loss orinjury. Interest of the parties can be protected by puttingcertain conditions. Hence, following order. 10 AO 56.23+CA.odtO R D E R i.Appeal From Order is allowed.ii.The impugned order dated 4.5.2023 passed bythe 2nd Joint Civil Judge Sr. Division,Nandurbar on application below Exhibit-5 inSpecial Civil Suit no.31 of 2023 is herebyquashed and set aside.iii.The respondent/defendant shall not alienate orcreate third party interest over suit property tillfinal disposal of the suit, subject to conditionthat plaintiff deposits undisputed considerationamount of Rs.1,70,00,000/- (Rs.One CroreSeventy Lakh) with the Trial Court within fourweeks from the date of this order. Non-depositof the amount shall entail vacation of theinterim relief.iv.Appeal From order stands disposed of.Pending civil application also stands disposedof. ( S. G. CHAPALGAONKAR ) Judge...aaa(f)