Case Note & Summary
The case involves a dispute over an agreement of sale for a flat. The plaintiff, Ranjana Rajendra Vadnere, entered into an agreement with the defendant, Mangala Dilip Davkhar, on 21st October 1995 for the sale of a flat in Madhushree Apartment, Nashik, for a total consideration of Rs.2 lakhs. The defendant paid Rs.1 lakh as advance (Rs.50,000 cash and Rs.50,000 by cheque) and was given possession. The balance of Rs.1 lakh was to be paid by a cheque dated 10th January 1996. The agreement contained a specific clause that if the cheque was dishonoured, the plaintiff would refund the Rs.1 lakh without interest and the defendant would hand over vacant possession. The cheque was dishonoured, and the defendant failed to pay the balance within the stipulated three months. The plaintiff filed a suit seeking declaration that the agreement was cancelled and for possession. The trial court decreed the suit, declaring the agreement cancelled and ordering the defendant to hand over possession upon refund of Rs.1 lakh. The defendant appealed. The High Court upheld the trial court's decision, holding that the defendant committed breach by issuing a dishonoured cheque and failing to pay the balance. The court found that the specific clause in the agreement was binding and that the plaintiff was entitled to cancellation and possession upon refund. The appeal was dismissed with no order as to costs.
Headnote
A) Contract Law - Agreement of Sale - Cancellation due to Cheque Dishonour - Specific Clause - The agreement contained a specific clause that if the cheque issued by the defendant for the balance consideration was dishonoured, the plaintiff would refund the advance and the defendant would hand over vacant possession. The court held that the defendant committed breach by issuing a cheque that was dishonoured, and the plaintiff was entitled to cancellation of the agreement and possession upon refund. (Paras 4-6) B) Contract Law - Breach of Contract - Failure to Pay Balance Consideration - The defendant failed to pay the balance consideration within the stipulated three months and also failed to get the cheque honoured. The court held that the defendant's conduct amounted to breach of the agreement, justifying its cancellation. (Paras 4-6) C) Property Law - Possession - Right to Possession upon Refund - The court held that upon refund of the advance amount of Rs.1 lakh, the defendant was liable to hand over vacant possession of the suit premises to the plaintiff. The trial court's decree was upheld. (Paras 6-7)
Issue of Consideration
Whether the agreement of sale dated 21st October, 1995 stood cancelled due to dishonour of the cheque issued by the defendant, and whether the defendant was liable to hand over vacant possession of the suit premises upon refund of the advance amount.
Final Decision
The appeal is dismissed. The judgment and decree dated 30th December 2008 passed by the learned Joint Civil Judge, Senior Division, Nasik in Special Civil Suit No.101 of 1997 is confirmed. No order as to costs.
Law Points
- Specific performance
- Agreement of sale
- Cheque dishonour
- Breach of contract
- Cancellation of agreement
- Possession
- Refund of advance
