Case Note & Summary
The appellant (defendant in the suit) challenged the judgment and order dated 16/07/2022 passed by the learned District Judge No. 18, Nagpur in Regular Civil Appeal No. 110/2021, which allowed the respondent's appeal and decreed specific performance of an agreement to sell. The respondent (plaintiff) had filed Special Civil Suit No. 329/2021 for specific performance of an agreement dated 31/10/2004, claiming that the appellant agreed to sell suit property originally owned by the Khadse family. The appellant had earlier entered into agreements with the Khadse family (dated 24/03/2003 and 31/03/2004) to purchase the property. The respondent alleged that the appellant and one Vikas Kawale proposed that the respondent purchase the property, and an agreement was executed between the respondent and appellant on 31/10/2004 for a consideration of Rs. 65,10,000/-. However, the Khadse family was not a party to this agreement. The trial court dismissed the suit, but the lower appellate court reversed the decision and decreed specific performance. The appellant filed a second appeal. The High Court framed a substantial question of law: whether an agreement to sell executed between the plaintiff and defendant, without the vendor being a party, is enforceable. The court held that since the Khadse family (original owners) were not parties to the agreement, the defendant had no title to convey, and the agreement was not enforceable. The court allowed the appeal, set aside the lower appellate court's judgment, and restored the trial court's dismissal of the suit.
Headnote
A) Contract Law - Specific Performance - Agreement to Sell - Vendor Not Party - Transfer of Property Act, 1882, Section 54 - The suit was for specific performance of an agreement to sell executed between the plaintiff and the defendant, but the original owner (Khadse family) was not a party to the agreement. The court held that such an agreement is not enforceable as the defendant had no title to convey. The appeal was allowed, setting aside the lower appellate court's decree. (Paras 1-10)
B) Civil Procedure - Second Appeal - Substantial Question of Law - Code of Civil Procedure, 1908, Section 100 - The court framed a substantial question of law regarding the enforceability of an agreement to sell where the vendor is not a party. It held that the lower appellate court erred in decreeing specific performance without the vendor's consent. (Paras 1-10)
Issue of Consideration
Whether an agreement to sell executed between the plaintiff and the defendant, without the vendor (original owner) being a party, is enforceable for specific performance.
Final Decision
The High Court allowed the second appeal, set aside the judgment and decree of the lower appellate court, and restored the trial court's dismissal of the suit.
Law Points
- Specific Performance
- Agreement to Sell
- Vendor Not Party
- Enforceability
- Section 54 Transfer of Property Act
- 1882
Case Details
2023 LawText (BOM) (03) 127
SECOND APPEAL NO. 408/2022
Shri S.P. Dharmadhikari, Sr. Adv a/b Shri K.N. Shukul, Adv & Shri R.R. Chougule, Adv for the Appellant(s); Shri N.S. Deshpande, Adv & Shri A.M. Balpande, Adv for the Respondent
Shri Dilip S/o Shantilal Chhaged
Kisan (Ratan) Chintaman Likhar
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Nature of Litigation
Civil suit for specific performance of contract
Remedy Sought
The respondent (plaintiff) sought specific performance of an agreement to sell dated 31/10/2004, directing the appellant (defendant) to execute a sale deed in respect of the suit property.
Filing Reason
The respondent claimed that the appellant agreed to sell the suit property to him, but the appellant failed to execute the sale deed.
Previous Decisions
The trial court dismissed the suit. The lower appellate court allowed the appeal and decreed specific performance. The appellant then filed the present second appeal.
Issues
Whether an agreement to sell executed between the plaintiff and defendant, without the vendor (original owner) being a party, is enforceable for specific performance.
Submissions/Arguments
The appellant argued that the agreement to sell dated 31/10/2004 was not enforceable because the Khadse family (original owners) were not parties to it, and the appellant had no title to convey.
The respondent argued that the appellant had agreed to sell the property and was bound by the agreement.
Ratio Decidendi
An agreement to sell is not enforceable for specific performance if the vendor (original owner) is not a party to the agreement, as the defendant has no title to convey. The court held that the lower appellate court erred in decreeing specific performance without the vendor's consent.
Judgment Excerpts
The brief facts for deciding the present Second Appeal are as under:-
The Respondent herein filed the Suit bearing Special Civil Suit No. 329/2021 for Specific Performance of Contract.
It was the contention of the Respondent – Plaintiff in the Suit that the Suit Property was earlier owned by Khadse family.
One Vikas Kawale was having very good terms with the Plaintiff who brought the Defendant in the house of the Plaintiff.
It is informed by the said Vikas Kawale that the Defendant entered into an Agreement to purchase the Suit Property from Khadse family vide Written Agreement to Sell dated 24/03/2003 and Supplementary Agreement dated 31/03/2004 for total valuable consideration of Rs. 44,77,500/-.
It is further contended that the Defendant and Vikas Kawale proposed the Plaintiff to purchase the Suit Property and the Defendant had dropped the idea of retaining the Suit Property.
It was also informed that said Khadse family already agreed to sell the property to nominee of the Defendant on inspection and necessary enquiry and after due deliberation and negotiations, the consideration of sale was fixed as Rs. 65,10,000/-.
Accordingly, the Agreement to Sell came to be executed between the Plaintiff and the Defendant on 31/10/2004 in presence of Vikas Kawale and other witnesses.
Members of Khadse family did not sign the said Agreement and it was informed that they were not parties.
The court held that the agreement is not enforceable as the vendor was not a party.
Procedural History
The respondent filed Special Civil Suit No. 329/2021 for specific performance. The trial court dismissed the suit. The respondent appealed to the District Court, which allowed the appeal in Regular Civil Appeal No. 110/2021. The appellant then filed the present second appeal before the High Court.
Acts & Sections
- Transfer of Property Act, 1882: Section 54
- Code of Civil Procedure, 1908: Section 100
