suit for specific performance – unfair to enforce such a conditional agreement= 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.In the circumstances, the decisions of the Courts below of directing specific performance of such an agreement cannot 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.

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
    1

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
2

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.
  2. 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
    3

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
    4

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.
  2. 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.
    5
  3. There shall be no order as to costs.
  4. Pending application(s), if any, shall stand disposed of.
    ………………………J.
    [ARUN MISHRA]
    ………………………J.
    [NAVIN SINHA]
    NEW DELHI;
    MARCH 07, 2019.
    6

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)
7