Smt. Maltidevi Goyal & another vs Smt. Anjana Agrawal

The appellants/plaintiffs have filed the present first appeal being aggrieved by the judgment and decree dated 8.5.2000 passed by Additional

District Judge, Indore (Special Judge) in Civil Suit No.30-B/1999 by which the suit for recovery of Rs.4,25,101/- has been partly decreed.

Facts of the case, in short, are as under. The plaintiff No.1 is mother of plaintiff No.2 and defendant No.1 is wife of defendant No.2, whose

name has been deleted from the cause-title of memo of appeal during pendency of this appeal. An agreement to sale dated 10.7.1992 (Ex. P/1)

was executed between the plaintiff No.2 and respondent No.1 for sale of Flat No.107, Rajani Building, Indore (hereinafter, for short, ""the

disputed flat""). On the same date, hand-written agreement was torn out by plaintiff No.2 and the agreement (Ex. P/1) was executed in total sale

consideration of Rs.4,51,000/-. According to the plaintiffs, they paid Rs.3,25,000/- by way of cheque to defendant No.2 on behalf of defendant

No.1.

Defendants served a legal notice dated 5.1.1993 to the plaintiffs that the balance amount of the sale consideration has not been paid within the

time stipulated as per condition No.5, therefore, the advance amount paid has been forfeited.

In response to the aforesaid legal notice, the plaintiffs served a legal notice on the defendants demanding execution of the sale-deed and

production of the original documents in respect of ownership of the disputed flat. Since the defendants did not produce the original documents and

did not take any steps for execution of the sale-deed, therefore, the plaintiffs fled the suit for recovery of Rs.4,51,101/- including interest amount.

Defendants filed their written statement. The defendant No.1 wanted to start the clinic for which he was in need of money, therefore, he

borrowed the amount from the plaintiffs as a loan. Other facts have been admitted by the defendants in respect of exchange of notices, replies, etc.

and prayed for dismissal of the plaint.

On the basis of pleadings, the trial Court framed as many as 7 issues for adjudication. The trial Court recorded finding on the issue No.1 in

favour of the plaintiffs that an agreement dated 10.7.1992 was executed between the plaintiffs and defendants for sale of disputed flat for a total

consideration of Rs.4,51,101/-. The trial Court also recorded the finding that plaintiff No.2 had paid an amount of Rs.3,25,000/- to the defendant

No.2 on behalf of defendant No.1. The learned trial Court also recorded the finding in respect of issue No.4 that the defendants were ready to

execute the sale-deed but the plaintiffs did not perform their part. The defendants are having right to forfeit the amount of Rs.2,00,000/- only and

vide judgment and decree dated 8.5.2000, the learned trial Court directed the defendants to refund the amount of Rs.1,25,000/- along with simple

interest @ 10% to the plaintiffs.

Being aggrieved by the aforesaid judgment and decree, the plaintiffs have filed the present appeal. After notice, defendants filed cross-appeal

against the impugned judgment and decree by which an amount of Rs.1,25,000/- has been directed to be refunded to the plaintiffs.

Shri M.L. Agrawal, learned senior counsel appearing for the plaintiffs, submitted that the defendant No.1 was not the owner of the disputed flat.

She claimed ownership on the basis of ""Agreement for Assignment of Rights"", therefore, the sale-deed could not be executed because the

defendants have failed to produce any document in respect of her title. That, u/s. 55 of the Transfer of Property Act, the seller is bound to produce

to the buyer all documents in respect of title relating to the property. He further submitted that the time was not the essence of contract u/s. 5 of the

Contract Act. Since the defendants did not produce any document relating to title despite demand made to them, an adverse inference is liable to

be drawn. There was no counter claim in respect of claim of damages, therefore, the same ought not to have been awarded to the defendants.

Even the damages cannot be awarded for mental agony without any evidence and material on record. The learned trial Court has wrongly

recorded the finding that the sale-deed could not be executed because the plaintiffs did not perform their part, whereas the fact remains that the

defendants were not having the title of the flat, which they agreed to sell to the plaintiffs. The plaintiffs were entitled for a decree of refund of entire

amount i.e. Rs.3,25,000/-, hence the impugned judgment and decree is liable to be set aside.

I have heard the learned senior counsel for the appellant and perused the record.

Since, no one has appeared on behalf of the defendants, therefore, the counter appeal is dismissed in default.

The agreement (Ex. P/1) was executed between Smt. Anjana Agrawal (defendant No.1) and Smt. Maltidevi Goyal (plaintiff No.1) for sale of

the disputed flat. In the said agreement, it is mentioned that the seller is sole owner and in possession of the disputed flat and agree to sell the same

to the buyer for a total consideration of Rs.4,51,101/-. In the agreement, defendant No.1 had acknowledged the receipt of Rs.1,25,101/- and

agreed that the balance amount of Rs.3,25,000/- will be paid on different dates. As per condition No.5, if the buyer does not pay the amount on

due dates, the amount received will be forfeited by the seller. Various notices were exchanged between the parties, which both of them have

admitted before the trial Court. The plaintiffs by way of evidence successfully proved that the amount of Rs.3,25,000/- has been paid to the

defendants. The defendants disputed about the payment of Rs.1,00,000/- way of cheque, but the learned trial Court disbelieved the same and

recorded the finding that the amount of Rs.3,25,000/- was paid to the defendants, therefore, the finding of the learned trial Court in respect of

payment of the said amount has attained finality.

The sole issue before the Court was that, whether the plaintiffs are entitled to get the refund of Rs.32,5,000/- due to nonexecution of the sale-

deed by the defendants.

The learned trial Court held that the plaintiffs have failed to perform their part. It is settled law that the party should have clear title to sell the

property. The defendants claimed title by way of ""Agreement for Assignment of Right"" (Ex. D/2). Ex. D/2 was executed between Smt. Shobha

Rajhendra Mehta and Smt. Anjana Agrawal for sale of the disputed flat. By way of this agreement, only Rs.1,05,000/- was paid towards sale-

consideration of assignment of rights. The builder had agreed to execute the saledeed later on, but no such sale-deed is on record executed in

favour of the defendants, therefore, the said agreement for assignment of rights did not confer any title on defendant No.1 to further sell to plaintiffs.

Under the provisions of Transfer of Property Act, there is no such mode of transfer of title by way of an ""Agreement for Assignment of Rights"",

therefore, the defendants were not having clear title of the property in order to execute the sale-deed in favour of the plaintiffs. Despite not having

clear title, the defendants had entered into the agreement to sale and received the amount of Rs.3,25,000/-. The learned trial Court has wrongly

held that the sale through an assignment deed is permissible because earlier, the properties were use to sell under the said agreement. The finding

so recorded by the learned trial Court is absolutely unconscionable and perverse. The mode of sale which is not available under the law cannot be

upheld by the Court as the same would encourage the illegal and benami transactions. Therefore, the finding recorded by the learned trial Court to

the effect that the plaintiffs did not perform their part to get the sale-deed executed is hereby set aside.

The learned trial Court despite recording the finding that Rs.3,25,000/- has been paid as an advance had only granted the decree for refund of

only Rs.1,25,000/- and deducted the amount of Rs.2,00,000/- under the head of loss caused to the defendants and mental agony suffered by the

defendants. As held above, the defendants were responsible for non-execution of the sale-deed. The learned trial Court has held that legally, the

plaintiffs are entitled to get the amount of Rs.3,25,000/- but under the principle of equity and balance despite receipt of Rs.3,25,000/- and

possession of the disputed flat was with the defendants. The defendants could have rented the disputed flat by way of lease @ Rs.5,000/- per

month but because of this agreement, they suffered the loss of rent @ Rs. 5,000/- per month from 1992-1995, therefore, the trial Court has

deducted Rs.1,50,000/- as loss to the defendants. Since the defendants suffered mental agony and suffered litigation, therefore, Rs.50,000/- has

also been awarded to the defendants. The defendants did not claim the aforesaid amount by way of counter claim. No issues were framed in

respect of loss suffered by the defendants. The defendants got the money decree for the amount of Rs.3,25,000/- without any title over the

property. They enjoyed the amount as well as the property. The sale-deed could not be executed because the defendants were not owners of the

disputed flat. Without any material on record, the learned trial Court has believed that the property could be given on rent because of the litigation

and defendants suffered the loss of Rs.1,50,000/-, whereas, they themselves are responsible for the litigation & on the contrary, the plaintiffs

suffered mental agony and litigation. Therefore, the findings recorded by the learned trial Court in Para 41 and 42 of the impugned judgment are

hereby set aside.

In view of the foregoing discussion, this appeal deserves to be and is hereby allowed and the judgment and decree dated 8.5.2000 passed by

the learned Additional District Judge, Indore is hereby set aside and the suit filed by the plaintiffs is decreed to the extent indicated above. The

plaintiffs are are entitled for refund of the amount of Rs.3,25,000/- along with interest @ 10.5% per annum from the date of judgment dated

8.5.2000 till its recovery. The plaintiffs are also entitled to get Rs.50,000/- towards mental agony. A decree be drawn accordingly.