Sheikh Javed vs Smt. Wahida Sheikh & Ors.

The present appeal has been filed by the plaintiff against the judgment and decree dated 29.11.2010 passed in Civil Suit No. 11A/2008 whereby although all the issues except issues no. 5 and 6 have been decided in favour of the appellant/plaintiff, still the relief of specific performance of agreement to sale was denied.

The facts of the case are that the appellant/plaintiff filed a suit for specific performance against the respondents no. 1 to 3/defendants. It was stated in the plaint that a two storey house is situated in Balwantganj, Khargone having a total area of 1092 sq. ft. Late Ramzan Sheikh i.e. husband of the defendant No.1 and father of defendants No. 2 and 3 had executed an agreement to sale in favour of appellant/plaintiff on 08.01.2005 for a total consideration of Rs. 5,50,000/- out of which an amount of Rs. 4,50,000/-was paid in cash on the date of execution of agreement to sale and the remaining amount was to be paid by 10.05.2005 and the registered sale deed was to be executed accordingly. It was also averred in para 2 of the plaint that formal possession of the house was given to the plaintiff however, the bank was in possession of the said house as a tenant.

In para 3 of the plaint, it was stated that the appellant/plaintiff always remained willing to pay the remaining amount of Rs. 1,00,000/- on or before 10.05.2005 and for execution of registered sale deed and is still willing. However, despite request to late Ramzan for execution of registered sale deed, even though he agreed to execute the same however, because of his sudden demise the sale deed could not be executed. It is further averred that the plaintiff requested the defendants for execution of sale deed by receiving the remaining amount of Rs. 1,00,000/- and when there was no response, a notice was sent on 19.05.2006 through Advocate for execution of sale deed. However, the notice returned unserved as the defendants went outside the village. Again on 06.03.2007, a registered notice was sent which was replied by the defendants on 14.03.2007 and resultantly, the suit for specific performance was filed.

The respondents No. 1, 2 and 3 filed their separate written statement in denial of the pleadings in the plaint. The defendants denied execution of any agreement. It was stated in the written statement that the suit property was not of the ownership and title of late Ramzan and in the knowledge of the defendants, late Ramzan never executed any agreement for sale of the suit house. It was further stated in para 7 of the written statement that actual value of the suit property is Rs. 21,04,000/-. In the special statement in para 1 it is stated that the stamp on the agreement to sale are not sufficient and also in terms of para 6 it was stated that the suit property has been rented out to the bank and defendant No.1 had mortgaged the suit property in favour of the District Cooperative Central Bank Ltd., Khargone for availing housing loan in the year 2001. Thus, the decree for specific performance cannot be granted for the suit house. The written statement of defendant No.3 was more or less on the same lines. The defendant No.3 also denied execution of agreement to sale.

The trial Court based on the pleadings of the rival parties framed as many as 06 issues. The issues no. 1 and 2 were with respect to execution of agreement to sale and payment of Rs. 4,50,000/- pursuant to the same and issue no. 3 was in respect of the readiness and willingness of the appellant/plaintiff. Issue no. 4 was regarding valuation and issues no. 5 and 6 were relating to mortgage of the suit property to the bank and the relief which can be granted.

The trial Court after recording evidence concluded that the execution of agreement to sale was found proved. It was also found proved that the plaintiff paid Rs. 4,50,000/- to late Ramzan. Willingness and readiness was also found proved. However, in view of the mortgage of the suit property, the Court found that relief of specific performance cannot be granted. Thus, the alternate relief of refund of amount with interest was granted. As such, though the suit was decreed vide judgment and decree dated 29.11.2010 but only for alternate relief. Being aggrieved by the same, present appeal has been filed by the appellant/plaintiff.

Learned counsel for the appellant/plaintiff at the outset submits that except the issue of mortgage and consequential denial of relief of specific performance, all the issues are decided in favour of the appellant/plaintiff and as there is no appeal by the defendants against the impugned judgment and decree, this Court is required to decided only the issue of denial of relief of specific performance in view of the mortgage of the suit property. The learned counsel while referring to the findings recorded by the trial Court in para 18 of the impugned judgment submits that a perusal of the findings recorded by the trial Court would show that the trial court recorded that the Exhibit P/10 is the equitable mortgage deed which has been placed on record by the plaintiff himself and according to the conditions of mortgage deed, the suit house could not have been sold elsewhere for which undertaking affidavit was furnished by late Ramzan in favour of the bank. As the loan was taken from the bank, thus while mortgage of the house, the agreement to sale could not have been executed. Learned counsel for the appellant stated that this finding of the trial Court is not sustainable for the reason that as per the provisions of Section 13(1)(c) of the Specific Relief Act, 1963 (hereinafter referred to as the 'Act of 1963'), the purchaser can compel the vender to redeem the mortgage and obtain a valid discharge, where necessary. He thus submits that even if the Court found that the suit property was mortgaged with the bank, still in view of the findings that the agreement was duly executed and the appellant/plaintiff was ready & willing to perform his part of contract, the Court should have directed for redemption of the mortgaged property and consequentially relief of specific performance to execute the registered sale deed have been granted. In support of his submissions, he has placed reliance on the judgment of the Hon’ble Apex Court passed in the case of J.P.Builders vs. A. Ramadas, 2011 (1) SCC 429.

Learned counsel for the appellant while criticizing the impugned judgment of the trial Court has further stated that it is settled position of law that ordinarily the specific performance of an agreement should not be denied and alternate relief of refund of amount should not be granted in normal course as held by the Hon’ble Apex Court in case of Prakash Chandra vs. Angadlal, AIR 1979 SC 1241 . The learned counsel further refers to the provisions of Section 19 of the Act of 1963 and submits that though, the original vendor has died however, the defendants have got their title through the deceased Ramzan. Thus, the agreement can be enforced against them. He further submits that in view of the provisions of Section 55(1)(g) of the Transfer of Property Act and on perusal of the mortgage deed (Exhibit P/11), it will be seen that no bar was created on the suit property. He thus submits that the findings of the trial Court in para 18 and consequential denial of relief of specific performance of contract is not sustainable in the eyes of law thus he prays for decreeing the suit by granting the relief of specific performance of agreement (Exhibit P/1).

Per contract, learned counsel for the respondents/defendants submits that even in absence of filing of any cross-objection or appeal against the impugned judgment and decree, the respondents/defendants can challenge the same in the proceedings of the present appeal. In support of his submission, the learned counsel for the respondents/defendants has placed reliance on the judgment of the Hon’ble Apex Court rendered in the case of Prabhakar Gones Prabhu Navelkar vs. SharadChandra Suria Prabhu Navelkar, (2020) 20 SCC 465 as well as in the case of Banarsi vs. Ram Phal, (2003) 9 SCC 606 . He submits that in view of the settled position of law, the present respondents can always challenge the findings recorded by the trial Court in impugned judgment and decree.

In view of the above stand taken by the learned counsel for the respondents, he submits on merits of the appeal that the agreement to sale (Exhibit P/1) was executed on 08.01.2005. As per this agreement, the last date for payment was 10.05.2005. The amount of Rs. 4,50,000/- was stated to be paid in cash on the date of execution of agreement and the remaining amount of Rs. 1,00,000/- was to be paid by the said date i.e. 10.05.2005. He submits that the first notice was issued, even according to the plaint averment, on 19.05.2006 i.e. after one year of the last date for payment and there is no explanation at all for this entire period i.e. from 10.05.2005 till 19.05.2006 as to what the plaintiff was doing. He submits that a bare reading of the plaint would show that though willingness has been averred in para 3 however, there is complete absence of showing any readiness and that readiness has not even been pleaded. By referring to para 3 of the plaint, learned counsel submits that the plaintiff has stated that he was willing to pay the remaining amount of Rs. 1,00,000/- and to get the registered sale deed executed. However, neither details of any steps nor availability of funds have been demonstrated in para 3 by pleading the same in any manner whatsoever. He further submits that not even a single evidence in this behalf has been lead before the trial Court. He thus submits that the trial Court has wrongly concluded that the appellant/plaintiff was ready and willing to pay the remaining sale consideration according to the purported agreement (Exhibit P/1). In support of his submission, he placed reliance on the judgment of the Hon’ble Apex Court in case of K. Nanjappa vs. R.A.Hameed @ Ameersab, (2016) 1 SCC 762; U.N.Krishnamurthy vs. A.M.Krishnamurthy, (2023) 11 SCC 775; K.S.Vidyanandam & Ors. vs. Vairavan, (1997) 3 SCC 1 and Pydi Ramana alias Ramulu vs. Davarasety Manmadha Rao, (2024) 7 SCC 515.

By referring to these judgments, learned counsel for the respondents also submits that the conduct of the plaintiff is very relevant for the purpose of decision on an action based on specific performance of an agreement and in the present case, the conduct in issuing first notice only on 19.05.2006 after more than one year of last date of payment i.e. 10.05.2005 and in not demonstrating readiness by pleading and leading evidence, the plaintiff has made himself dis-entitled for any relief for specific performance of agreement. The learned counsel further submits that even the execution of agreement to sale (Exhibit P/1) is not proved. He refers to the said document and points out that there are two witnesses to the same and when the defendants denied execution of the agreement, it was incumbent upon the plaintiffs to lead evidence by examining atleast one of those two attesting witnesses of the agreement. However, despite clear objection in the written statement, none of those witnesses were examined by the appellant/plaintiff. Thus, the preliminary burden of execution of agreement to sale has not been discharged by the plaintiff. He further submits that the plaintiff tried to prove the agreement by examining notary. However, the notary cannot be treated as an attesting witness. He submits that still if the testimony of notary (PW-2) is seen, then it will come to the fore that he has stated that one Sheikh Jamil had identified Ramzan (husband of the defendant No.1). However, he also stated that he does not know that who that Sheikh Jamil was. He stated that on the agreement, signature of the witnesses were there. Thus, he submits that witnesses to the agreement were not present before the notary however the agreement when reached to the notary, their signatures were already present which goes to show that this purported agreement was signed by Ramzan after the witnesses had already signed upon the same. As such, it cannot be said to be a proper attestation of the agreement. He then submits that in para 4 this statement of para 1 was contradicted by the said witness. He also points out that significantly the witness who asserts himself as notary did not bring his notary register for perusal of the Court. Thus, even the act of notarising the agreement is not proved. The learned counsel further submits that in the entire judgment fact of non-payment on 10.05.2005 was not considered. No finding on the issue of limitation was recorded when indisputably the suit was filed on 08.01.2008.

The learned counsel for the respondents/defendants lastly submits that in the written statement, issue regarding mortgage was specifically raised. He submits that the defendants in their written statement raised the plea of mortgage. It has been stated that the suit property was mortgaged with the bank. Even after this, the appellant/plaintiff did not amend his suit and no relief regarding mortgage was claimed. He thus submits that in absence of any pleading regarding mortgage, relief of specific performance could not have been granted. He thus, submits that not only the appeal deserves to be dismissed but also the entire suit by reversing the findings regarding readiness, willingness and execution of agreement also deserves to be dismissed.

In rejoinder submissions, the learned counsel for the appellant/plaintiff submits that reliance as placed by the learned counsel for respondents on the judgment of the Hon’ble Apex Court in the case of Prabhakar (supra) and Banarsi (supra) in fact goes against the defendants themselves for the reason that the ratio of the said judgment is partly in favour of the appellant and partly in favour of the respondents, therefore it is necessary for the respondents to file an appeal or take cross-objection against that part of the decree which is against him if they seek to get rid of the same. He thus submits that as the relief for refund of amount is based on proof of readiness and willingness as well as execution of agreement, the same cannot be agitated by the respondents/defendants in absence of their challenge to the impugned judgment and decree. In support of his submission, he has placed reliance on the judgment of the Hon’ble Apex Court in case of Shingara Singh vs. Daljit, 2024 (1) SCR 901. In order to demonstrate his readiness, learned counsel submits that an amount of Rs. 73,000/- has been paid as court fees and as per the agreement itself, 80% of the sale consideration was already paid and only an amount of Rs. 1,00,000/- was remaining. As regards the mortgage, he submits that original sale deed was placed on record by the plaintiff which goes to show that the plaintiff was not aware about the mortgage as the original sale deed could not have been made available in case of mortgage but the defendant provided the same to the plaintiff/appellant and he has bonafide executed the agreement to sale. He further refers to statement of Manohar (DW-3) who stated that the loan amount was being adjusted against the rent which was being paid by the bank to the defendants. He thus repeats his prayer for decree of specific performance.

Heard learned counsel for the parties. Perused the record.

As far as the question of challenge to the findings of execution of agreement to sale (Exhibit P/1) and readiness & willingness of the appellant/plaintiff is concerned, this Court is of the considered view that the law as laid down by the Hon’ble Apex Court in the case of Banarsi (supra), Prabhakar (supra) and Shingara (supra) goes against the respondents/defendants. The Hon’ble Apex Court in the case of Banarsi (supra) has held in para 10 and 11 as under :

The Hon’ble Apex Court considering the ratio in the case of Banarsi (supra) reiterated this position in the case of Prabhakar (supra) and recently in the case of Shingara (supra) in identical circumstances, the Hon’ble Apex Court held that in case of partial decree in favour of the plaintiff, the defendants/respondents are required to challenge the same. Now, in the present case there is a decree in favour of the appellant for refund of Rs. 4,50,000/- along with interest at the rate of 6% per annum from the date of filing of suit i.e. 08.01.2008 till its refund. It is thus clear that if this Court reverses the findings regarding execution of agreement and readiness & willingness, then as a consequence this part of the decree has to be set aside, which is not permissible in view of the aforesaid law as laid down by the Hon’ble Apex Court. As such, it is hereby held that the respondents are not entitled to challenge the findings recorded by the trial Court with respect to execution of agreement and readiness & willingness of the appellant/plaintiff in absence of any challenge to the impugned judgment and decree which has partially been passed in favour of the appellant.

As this Court has held that the respondent is not entitled to challenge the impugned judgment and decree, it is not required to decide the issue of execution of agreement and readiness & willingness of the appellant/plaintiff. As such, the only issue which remains to be decided by this Court is whether after finding that the execution of agreement was proper and the plaintiff was ready and willing to perform his part of contract, the relief of specific performance could have been denied in view of the mortgage of the property with the bank.

In the considered view of this Court, once the defendants No. 1 and 2 have specifically averred in para 6 of special submission of their written statement that the suit property has been mortgaged with the District Cooperative Central Bank Ltd., Khargone and in view of the same the agreement to sale could not have been executed, it was incumbent upon the appellant/plaintiff to accordingly amend the plaint and seek relief for redemption of mortgage. However, despite the specific pleading made by the defendants, no such amendment was carried out in the plaint. The trial Court recorded findings in para 18 that there was restrain according to the mortgage deed in alienating the said house to any other person. The reliance as placed by the learned counsel for appellant on the case of J.P. Builders (supra) as well as Prakash Chandra (supra) is of no avail to the appellant for the reason that in the peculiar facts of the present case, the agreement was executed on 08.01.2005 and the last date for payment was 10.05.2005, Sheikh Ramzan died on 08.04.2005 and the property was undeniably mortgaged with the bank. Thus, when the suit was filed after around 3 years from the death of Ramzan with whom the agreement to sale was executed, i.e. on 08.01.2008 for the agreement which was executed on 08.01.2005 and when this fact came on record that the property is under mortgage, it was incumbent upon the plaintiff appellant to get the plaint amended and seek relief of redemption in terms of Section 13 of Specific Relief Act, 1963. In absence of the same, this Court is not able to determine the status of mortgage. It is settled position of law that, 'once a mortgage, always a mortgage' till its redemption or foreclosure.

Apart from above, it is also not clear that whether the property was later on foreclosed or redeemed and how much is the amount repaid by the defendants after the death of Ramzan. All these facts would show that there may be hardship to the respondents/defendants if at this point in time the execution of contract is directed. If it is to be assumed that the loan amount has been paid and the mortgage has been redeemed, then it is not clear that how much amount has been repaid by the defendants and if it is still under mortgage then also it is not clear as to what is the current status of the loan amount. The Hon'ble Apex Court in the case of Kanshi Ram v. Om Prakash Jawal, (1996) 4 SCC 593 at page 594 has held as under:

As such, in the considered view of this Court, present is not a case where ordinary rule of specific performance should be given effect to. In the peculiar facts of the present case, this Court does not find any infirmity in the conclusions drawn by the trial Court in decreeing the suit for alternative relief of refund of amount of Rs. 4,50,000/- paid by the appellant/plaintiff pursuant to the agreement (Exhibit P/1) with interest at the rate of 6% per annum from the date of filing of the civil suit before the trial Court till the date of its payment.

Considering the aforesaid, the impugned judgment and decree is hereby upheld. The appeal being bereft of merit is hereby dismissed.

Let a decree be drawn accordingly.

Record of the Courts below be sent back.