Stephen Noel D'Souza & Anr. v. Sadashiv Rakhmaji Bodake & Ors.

1. Heard Ms. Sonawane, learned Advocate for Appellants and Mr. Shinde, learned Advocate for Respondent Nos. 1A to 1D.

2. By consent of the parties, present Second Appeal is taken up for final hearing.

3. Present Second Appeal assails concurrent Judgments passed by the learned Trial Court in Special Civil Suit No. 363 of 2010 dated 31.07.2012 which is upheld by the learned Appellate Court in Civil Appeal No. 532 of 2012 by judgment dated 05.05.2017. Both these judgments are appended to the present Second Appeal. Separate Appeal Paperbook containing the evidence recorded is also filed. 1 of 18

4. For the sake of convenience, Appellants shall be referred to as "Plaintiffs" and Respondents as "Defendants".

5. Original Suit is filed for specific performance of agreement dated 30.07.2007 by Plaintiffs. Defendant No. 1 is the owner of the Suit property. Defendant No. 2 is Dena Bank. It is a proforma party. Original Defendant No. 1 expired during the interregnum and proceedings are defended by his legal heirs namely Defendant Nos. 1A to 1D. Relevant facts in brief are as under:-

5.1. Suit property admeasure land having area of 0H 40R out of 50% of the ancestral property coming to the half share of original Defendant No. 1 (i.e. 1H 2.5R) in Gat No. 137 nomenclatured as Part 1/2. Original Defendant No. 1 borrowed loan from Dena Bank and was unable to repay the same due to which in the Other Rights Column Bank’s charge was registered qua and to the extent of 0H 40R out of the property coming to the share of original Defendant No. 1. Since interest was mounting original Defendant No. 1 was desirous of raising some money to pay off the bank loan and discharge the bank. Hence on the meditation of three intermediaries - Ms. Phelomena Cosmos Goviya, Mr. Daulat Punja Bodake and Mr. Vasant Ambu Bodake, he executed Agreement to Sale dated 30.07.2007 for sale of suit property with Plaintiffs. Prior to execution of agreement to sale Defendant No. 1 received Rs. 1100/- as token amount whereas on the 2 of 18 date of execution, he received demand draft of Rs. 1,50,000/- out of total agreed consideration of Rs. 7,61,000/- as stated in the agreement. It was specifically stated that the balance amount would be paid by Plaintiffs to Defendants at the time of execution of sale deed. No time frame was stipulated for execution of the sale deed in the agreement. However the agreement to sale was subject to certain conditions / obligations by the parties.

6. Ms. Sonawane, learned Advocate for Plaintiffs would submit that pursuant to execution of agreement to sale and upto the execution of sale deed, Defendant No. 1 was required to obtain subdivision order of the suit property since it was jointly held in conjunction with his brother as ancestral property. She would submit that Defendant No. 1 was also to remit the outstanding arrears of bank loan to Dena Bank and remove the encumbrance and charge registered in the Other Rights Column of the 7/12 extract of the suit property and thereafter give a public notice calling for claims to ensure that there was no other encumbrance in respect of the suit property. She would submit that Defendant No. 1 agreed to execute the sale deed either in the name of Plaintiffs or their nominees. She would submit that pursuant to above as a matter of abundant caution Plaintiffs gave public notice in two local newspapers on 05.08.2007 and 07.08.2007 inviting claims with regard to the suit property since Plaintiffs had 3 of 18 executed the agreement to sale and parted with a substantive amount out of the total consideration agreed to be paid. She would submit that thereafter Plaintiffs repeatedly kept on reminding Defendant NO. 1 that he should comply with his obligations as stated in the Agreement to Sale which Defendant No. 1 failed to do so. She would submit that Plaintiffs repeatedly visited the house of Defendant No. 1 and made oral requests to him but he did not take any steps whatsoever to comply with his obligations. She would submit that Plaintiffs were always ready and willing to pay the balance amount to Defendant No. 1 and execute the sale deed. She would submit that as Defendant No.1 repeatedly kept stalling the requests made by Plaintiffs, Plaintiffs had no option than to issue legal notice dated 24.06.2009 despite which Defendant No. 1 did not take any steps.

6.1. She would submit that Plaintiffs were therefore compelled to file Special Civil Suit No. 363 of 2010 seeking specific performance of the Agreement to Sale. She would submit that both the Courts below refused to grant decree for specific performance in favour of Plaintiffs in the light of evidence which was brought on record. She would submit that Plaintiffs led the evidence of Plaintiff No. 1 and one of the intermediaries who played an active role in fructifying the Agreement to Sale namely Ms. Phelomena Cosmos Goviya. She would fairly submit that on behalf of Defendant No. 1 though Defendant No.1 had 4 of 18 initially filed his affidavit of evidence, he expired in the interregnum and hence his evidence was discarded. She would submit that evidence on behalf of Defendants was thereafter led by Defendant NO. 1C i.e. son of original Defendant No. 1. She would submit that learned Trial Court failed to consider the fact that there was no promise given by Plaintiffs to Defendant No.1 for payment of the outstanding loan amount either to Dena Bank and also the Nazrana amount to the Collector for effecting sub-division or grant of sale permission, which has been held against the Plaintiffs by the learned Trial Court. She would submit that terms and conditions of the Agreement to Sale were explicitly clear inasmuch as after execution of the agreement, it was the primary obligation of Defendant No. 1 to pay the entire outstanding balance loan amount to Dena Bank and remove the charge of Dena Bank from the 7/12 extract and effect subdivision from the Office of the Collector and only pursuant to which Plaintiffs were liable to pay the balance consideration amount to Defendant No. 1. She would submit that original Defendant No. 1 misled the Plaintiffs about he being entitled to 50% share out of the total larger area of Gat No. 137 Part 1/2 which was his ancestral property. She would submit that when Written Statement was filed by Defendant No.1 it was stated therein for the first time that Defendant No. 1's three sons - Chetan, Jagan and Rahul were also having their undivided share in the 5 of 18 suit property as coparcenors. She would submit that original Defendant No. 1 falsely represented to the Plaintiffs that he had availed a borrowing only from Dena Bank because when Plaintiffs gave public notice they received a claim from Nashik Merchants Cooperative Bank Ltd, Nashik against the suit property qua Defendant No. 1. She would submit that Defendant did not lead evidence to support the contention that Nazrana amount of Rs. 1,50,000/- which was received on execution of agreement for sale which was to be paid to the Collector to obtain necessary permission for sale of the suit property. She would submit that Plaintiffs were at all times ready and willing to fulfill their part of the contract and ready and willing to pay the balance consideration amount to Defendant No. 1 on he having complied with his obligations. She would submit that Defendant No. 1 did not comply with his obligations and therefore Plaintiffs are entitled to a decree of specific performance of the Agreement to Sale dated 30.07.2007.

6.2. She would submit that learned Trial Court failed to consider that Defendant No. 1 attempted execution of sale deed but it is incorrectly held that Plaintiffs did not take any steps to fulfill the terms and conditions of the Agreement despite there being no obligations caste upon the Plaintiffs to do any positive act apart from being ready and willing to pay the balance consideration. She would submit that 6 of 18 learned Trial Court incorrectly held that since Plaintiffs were aware about the outstanding loan and charge of Dena Bank as also the subdivision charges and Nazrana amount to be paid to the Collector, it was the duty of Plaintiffs to pay the said amounts out of the total balance consideration which was withheld by them to show their intention to comply with the transaction. She would submit that reasoning given by the Courts below is invalid since as per terms and conditions of the agreement, no obligation was casted on the Plaintiffs save and except to pay the balance consideration and nothing more. In that view of the matter, she would submit that payment of outstanding loan amount of Dena Bank was the responsibility of Defendant No. 1 solely and after discharging the same Defendant No.1 had to remove the charge from the Other Rights Column, obtain subdivision order from the Collector and and only thereafter he would be entitled to the balance amount of sale consideration from the Plaintiffs. Hence she would persuade the Court to allow the Second Appeal and quash and set aside the concurrent orders of the Courts below.

7. PER CONTRA, Mr. Shinde, learned Advocate for Defendant Nos. 1A to 1D would submit that the issue of readiness and willingness would depend upon the overall conduct of the Plaintiffs. He would submit that after execution of the agreement, Plaintiffs never showed 7 of 18 readiness and willingness to complete the said transaction. He would submit that at the time of execution of agreement for sale, the quantum of amount required to be paid to the Collector towards Nazrana was not quantified neither stated in the Agreement. He would submit that later on it was discovered that this Nazaran amount was Rs. 1,50,000/- which was to be paid to the Collector for obtaining if permission to sell the land to a non-agriculturist (Plaintiffs) which was required to be obtained by Plaintiff. He would submit that in such a situation it was impossible for the original Defendant No. 1 to pay the Nazrana amount of Rs. 1,50,000/- to the Collector for seeking permission for sale and also simultaneously pay the outstanding loan amount to Dena Bank for clearing the charge out of the initial amount of Rs.1,50,000/- received by him under the Agreement to Sale. He would submit that the Agreement to Sale if read as a whole prima facie reveals that Plaintiffs were fully aware of the fact that Defendant No. 1 needed money to clear the outstanding loan amount of Dena Bank as also permission was required to be obtained from the Office of the Collector for sale of the Suit property to the Plaintiffs who were non-agriculturists. He would submit that despite the market value of the suit property being in the range of Rs. 12,00,000/-, the amount of Rs. 7,61,000/- was stated as total consideration in the Agreement to Sale. He would submit that if at all Defendant No. 1 had approached 8 of 18 the Collector for seeking permission in any event on this ground alone the application for permission would have been rejected. He would submit that the entire agreement is absolutely silent in respect of obtaining permission from the Collector's office and payment of Nazrana amount that would be required to be paid to the Collector for seeking such permission.

7.1. He would next submit that amount of Rs. 1,50,000/which was given on execution of Agreement to Sale was therefore not adequate enough which were clearly to the knowledge of the Plaintiffs despite which they did not pay the balance consideration amount for fulfilling the obligations which were casted upon Defendant No. 1. He would submit that learned Trial Court has after going through the evidence on record has returned a finding on the conduct of the Plaintiffs and has concluded that it was obligatory on the part of the Plaintiffs to make periodical payment of the unpaid consideration amount for discharging the encumbrances in order to enable Defendant No.1 to execute the Sale deed. He would submit that the said encumbrances were such that from the amount of Rs. 1,50,000/given to Defendant No.1 under the Agreement, the encumbrances could not be satisfied fully. Thus, the stoic silence of Plaintiffs from the date of execution of agreement until filing of the Suit proceedings and not being ready and willing to pay any amount to Defendant No.1 to 9 of 18 remove the encumbrances and take steps to fulfill the obligations despite very well knowing about the obligation for executing the sale deed has been held against the Plaintiffs. He would therefore persuade the Court that both the impugned judgments which are passed after due consideration of the facts and circumstances of the present case do not call for any interference whatsoever. He would urge the Court to dismiss the Second Appeal and uphold the concurrent judgments passed by the learned Trial Court and learned Appellate Court.

8. I have heard the learned Advocates appearing for the respective parties and with their able assistance perused the record of the case. Submissions made by the learned Advocates for the respective parties have received due consideration of the Court.

9. In the present case it is seen that Agreement to Sale of the suit land is executed on 30.07.2007 between the parties. Said agreement has six important clauses and conditions as stated therein. Firstly total consideration agreed by parties is Rs. 7,61,000/-. Secondly Defendant No. 1 has received amount of Rs. 1,51,100/- from Plaintiffs on execution of Agreement on 30.07.2007. Thirdly since the suit land was held as ancestral joint property and in indivisible condition, original Defendant No. 1 was to obtain subdivision order to sell part of the larger ancestral land out of the part coming to his share from the 10 of 18 Office of the Collector, Nashik. Fourthly Defendant No. 1 was to clear the entire outstanding debt of Dena Bank, Dhakambe Branch, Taluka Dindori and pursuant thereto remove the encumbrance / charge / name of Dena Bank from the Other Rights Column in the 7/12 extract of the Suit property. Fifthly pursuant to the above, Defendant No. 1 was required to give public notice for seeking verification of claims in respect of the Suit land to have a clear title. Sixthly it was decided between the parties that as and when Defendant No. 1 will get permission of Collector then within ten days thereafter Sale Deed will be executed and all charges cum expenditure for the Sale Deed will be borne by Plaintiffs.

10. On the basis of the aforesaid conditions, parties executed the agreement to sale. However, it is the case of Defendant No. 1 that the Plaintiffs got the Agreement to Sale executed unilaterally without adherence to the stipulated terms and conditions and without regard to the timelines prescribed therein or the alleged failure of Defendant No. 1 to comply with his obligations. It is seen that Plaintiff are non – agriculturists and hence to sell agricultural land Defendant was to procure not only subdivision order but prior thereto sale permission from the Collector to enable him to sell the Suit land to Plaintiff. This Sale permission could only be procured after payment of the Nazrana amount of Rs.1,50,000/- which has later on come in evidence. This 11 of 18 crucial condition was not mentioned in the Agreement to Sale and it was camouflaged with the subdivision order. Most importantly time was not made the essence of the contract between the parties. Thus it was practically impossible for the Defendant to fulfill his obligations under the Agreement to Sale from the initial consideration of Rs.1,51,100/- received by him since apart from the Nazrana amount the outstanding dues payable to Dena Bank was about Rs.4,14,669/which is borne out from the record. It is seen from the evidence that since Defendant No. 1 was in dire need of money for the purpose of education of his sons who were studying in school at that time and also to make repayment to Dena Bank of the outstanding loan amount, taking advantage of the vulnerability of Defendant No. 1, Plaintiffs executed the Agreement to Sale despite the prices of similarly situated properties being in the range of Rs. 12,00,000/- per Acre. Next it is seen that admittedly amount of Rs. 1,50,000/- was required to be paid towards Nazrana for obtaining Sale permission and subdivision permission from the Collector’s office for sale of the Suit land to Plaintiffs apart from the fact that there was outstanding loan amount payable to Dena Bank. Hence the amount of Rs. 1,50,000/- which was given to Defendant No. 1 on the date of execution of Agreement to Sale was on the face of record insufficient for meeting with the aforesaid twin obligations by Defendant No. 1. 12 of 18

11. Another aspect which is required to be considered is that entire agreement to sale is silent about the Nazrana amount required to be paid to the Collector for obtaining sale permission of the suit land since it was in indivisible condition and Plaintiffs were not agriculturists. Evidence clearly brings out the fact that had Defendant No. 1 known about the amount of Rs. 1,50,000/- required to be paid to the Collector, he would never have decided to sell the suit land for consideration of Rs. 7,61,000/- as agreed by him. This was because the entire Agreement is conspicuously silent about the Nazrana amount to be paid to the Collector. All that the Agreement speaks about is about obtaining subdivision permission from the Collector as it was held jointly as ancestral property by Defendant No.1 for sale of suit land. The son of Defendant No. 1 i.e. Defendant No. 1C deposed and examined himself below Exh. 66. His evidence states that admittedly Plaintiffs were given knowledge of the fact that original Defendant No. 1 had only undivided 1/4 share and not 1/2 share but the Plaintiffs did not pay heed to the same. He has deposed that taking advantage of the vulnerability of his father, Plaintiffs executed an unilateral agreement with original Defendant No. 1 despite having knowledge of the fact the land was held jointly as ancestral land and that prices of similarly situated lands in the vicinity of the suit land were in the range of Rs. 12,00,000/- per Acre at the then time. He has 13 of 18 also deposed that since Defendant No. 1 was unable to fulfill his obligations from the amount of Rs. 1,50,000/- which he received by him under the Agreement to Sale, Plaintiffs had assured him that they will release further amounts which they failed to release and therefore case of readiness and willingness of the Plaintiffs was not accepted by both the Courts below. Most clinching part of his evidence is the documentary evidence placed by him on record. He has filed the statement of account in respect of Account No. 159 of Dena Bank, Dhakambe Branch below Exh. 82 for the period from 22.09.2005 to 30.06.2012. Learned Trial Court as also the learned First Appellate Court has taken cognizance of the same and after going through the same noted that at the time of execution of the Agreement to Sale i.e. on 30.07.2007, the outstanding loan amount in Dena Bank’s account was Rs. 4,14,669/-. and in another account being Account No. 1224 held in Nashik Merchants Cooperative Bank account filed below Exhibit 83 for the period from 21.04.2005 to 11.08.2009 the outstanding loan amount of Rs. 39,597/- was shown as due and payable.