Conditional agreement is not enforceable when it is not out and out sale = was mentioned in the agreement that Rs.5000/- would be paid after one year of the execution of the sale deed. Such stipulations cannot be said to be for making out and out transaction of sale. Apart from that it would be unfair to enforce such a conditional agreement. The aforesaid stipulations also has the adverse effect on the readiness and willingness which is required to be proved by the plaintiff/respondents to purchase the property and due arrangement of money from the date of agreement till the decree is passed.

IN THE SUPREME COURT OF INDIA

               CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 7533/2008

GAJANAN WAMAN CHIKHALE AND ORS. APPELLANT(S)

   VERSUS

RAMDAS BAKARAM THOMBRE AND ANR. RESPONDENT(S)

    O R D E R
  1. Heard learned counsel for the parties.
  2. The appellants are the legal representatives of the

defendant and the respondents are the plaintiffs. The

original defendant/Wamanrao, died during the pendency of the

appeal before the Courts below and the respondents herein were

brought on record as his legal heirs. The

plaintiff(s)/respondents contracted to purchase the suit house

from the defendant/Wamanrao for a consideration of

Rs.25,000/-, on 25.10.1976. As the defendant//Wamanrao was

indebted on account of loans of agricultural property etc. he

wanted to sell the suit house in order to pay off the debts.

In pursuance of the agreement dated 25.10.1976, the

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plaintiffs/respondents paid Rs.5,000/- to defendant/Wamanrao

as earnest money. As per agreement between them, the amount

of Rs.15,000/- was to be paid at the time of execution and

registration of the sale deed before the Sub Registrar. It

was further agreed between them that defendant/Wamanrao would

receive the balance amount of Rs.5,000/- within a year after

the date of execution of the sale deed. It was agreed to be

executed on 31.03.1977. It was also agreed between them that

in case any of the party to the contract resiles from the

terms of the contract, then the party resiling will be liable

to pay Rs.10,000/- to the other side as penalty for breach of

contract. Defendant/Wamanrao had agreed to deliver the

possession of the suit house before the sale deed. The

agreement dated 25.10.1976 was thus executed by

defendant/Wamanrao in the presence of attesting witnesses.

The plaintiffs/respondents immediately thereafter paid

Rs.5,000/- to him. The plaintiffs/respondents gave a public

notice in the newspaper, in order to ascertain any kind of

encumbrance. According to the plaintiffs/respondents, they

were always ready and willing to perform their part of the

contract and on 30.03.1977 they contacted the

defendant/Wamanrao. The defendant/Wamanrao requested them to

grant further time in order to find any rented house or

accommodation for him and to deliver vacant possession of the

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suit house. It was then agreed between them that

defendant/Wamanrao would give vacant possession of the suit

house and thereafter the sale deed of the suit house was to be

executed. On 27.04.1977, the plaintiffs/respondents went to

the house of the defendant/Wamanrao but he was not there and

they were told by the inmates that he had gone out. The

plaintiffs/respondents then served a notice on him on the same

days i.e. on 27.04.1977. On 30.04.1977 defendant/Wamanrao

orally informed the plaintiffs/respondents that he was not

ready to execute the sale deed. The plaintiffs/respondents

then filed the suit for specific performance of the contract.

  1. The Trial Court decreed the suit for specific performance

of the contract. Aggrieved by the said order, the

defendant(s)/appellants filed appeal before the Appellate

Court. The appellate Court affirmed the order of the Trial

Court and dismissed the appeal. Against the said order, the

defendant(s)/appellant(s) filed second appeal before the High

Court, which was also dismissed. Hence the present appeal is

filed by the defendant/appellants.

  1. After hearing learned counsel for the parties, we are of

the opinion that the Courts below committed grave error of law

while decreeing the suit. The form in which the agreement was

couched itself indicated that it was intended for securing the

loan. The parties had agreed to obtain the amount of

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compensation, in case the sale deed was not to be executed at

Rs.10,000/-. The agreement had been entered into for sale of

5000 sq. ft. of land for a sum of Rs.25,000/-. Rs.5,000/- was

paid by way of earnest money and Rs.15,000/- was to be paid at

the time of execution of the sale deed and the remaining sum

of Rs.5000/- was agreed to be paid after one year of the

execution of the sale deed. The reading of the entire

agreement leaves no doubt that the plaintiffs have prima facie

obtained the loan and as such there was stipulation of payment

of compensation of Rs.10,000/-. Apart from that, when we

consider the stipulations in the agreement, it appears that

the plaintiffs/respondents were not having the money to

purchase the property as such this stipulation was mentioned

in the agreement that Rs.5000/- would be paid after one year

of the execution of the sale deed. Such stipulations cannot

be said to be for making out and out transaction of sale.

Apart from that it would be unfair to enforce such a

conditional agreement. The aforesaid stipulations also has

the adverse effect on the readiness and willingness which is

required to be proved by the plaintiff/respondents to purchase

the property and due arrangement of money from the date of

agreement till the decree is passed.

  1. In the circumstances, the decisions of the Courts below

of directing specific performance of such an agreement cannot

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be said to be proper and in accordance with law. The Courts

below have ignored and overlooked the nature of the agreement

and the stipulations mentioned therein. It would be unfair,

unjust, inequitable and not in accordance with law to grant

specific performance of such an agreement.

  1. In the circumstances, we set aside the judgment and

decree passed by the Courts below decreeing the suit of the

plaintiffs and directing specific performance of the agreement

to sell the property in question. However, at the same time

when we come to the adjustment of the equities, it was fairly

offered by the learned counsel appearing on behalf of the

appellants that since an amount of Rs.5000/- was paid way back

in the year 1976 and by now 43 years have passed, it would be

appropriate to refund an amount of Rs.1,00,000/- instead of

Rs.5,000/- in order to do complete justice between the parties

as a sum of Rs.5000/- had been received by the appellants from

the plaintiffs. We direct them to make the payment of

Rs.1,00,000/- to plaintiffs/respondents, within a period of

three months from today.

  1. The judgment and decree passed by the Courts below are

modified accordingly. The specific performance of the

agreement is declined. The appeal is, accordingly, disposed

of.

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  1. There shall be no order as to costs.
  2. Pending application(s), if any, shall stand disposed of.

………………………J.

[ARUN MISHRA]

………………………J.

[NAVIN SINHA]

NEW DELHI;

MARCH 07, 2019.

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ITEM NO.105 COURT NO.4 SECTION IX

           S U P R E M E  C O U R T  O F  I N D I A

                   RECORD OF PROCEEDINGS

CIVIL APPEAL NO(S). 7533/2008

GAJANAN WAMAN CHIKHALE AND ORS. APPELLANT(S)

                            VERSUS

RAMDAS BAKARAM THOMBRE AND ANR. RESPONDENT(S)

Date : 07-03-2019 This appeal was called on for hearing today.

CORAM :

     HON'BLE MR. JUSTICE ARUN MISHRA

     HON'BLE MR. JUSTICE NAVIN SINHA

For Appellant(s) Mr. Kishore Lambat,Adv.

               For M/s. Lambat And Associates

For Respondent(s) Mr. Satyajit A. Desai,Adv.

Ms. Priyanka Goel,Adv.

               Ms. Anagha S. Desai, AOR



      UPON hearing the counsel the Court made the following

                         O R D E R

The appeal is disposed of in terms of the signed order.

(NARENDRA PRASAD) (JAGDISH CHANDER)

COURT MASTER COURT MASTER

(Signed order is placed on the file)

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