Case Note & Summary
The dispute arose from an agreement to sell dated 12.03.1997 for agricultural land. The respondent-plaintiff filed a suit for specific performance alleging that despite paying earnest money, the appellant-seller avoided executing the sale deed. The trial court decreed the suit, directing execution of the sale deed and delivery of possession. The first appellate court confirmed the decree for specific performance and delivery but increased the balance consideration. In second appeal, the appellant raised a narrow legal issue: whether the decree could include delivery of possession when the agreement did not expressly stipulate it. The court framed the substantial question of law regarding the effect of absence of such a recital. After hearing arguments, the High Court held that under Section 55(1)(f) of the Transfer of Property Act, a seller is bound to give possession upon execution of sale, and this duty is integral to the contract of sale unless excluded by contract. The agreement here did not exclude it, thus the direction for possession was proper. The court rejected the reliance on Adcon Electronics as misplaced because that case dealt with a different scenario. The appeal was dismissed, and the decree for specific performance with possession was upheld.
Headnote
A) Specific Performance - Agreement to Sell - Delivery of Possession - Transfer of Property Act, 1882, Sections 54, 55(1)(f) - In a suit for specific performance of an agreement to sell immovable property, the seller contended that the decree could not include a direction for delivery of possession because the agreement did not expressly stipulate such delivery. The Court rejected this argument, holding that under Section 55(1)(f) of the Transfer of Property Act, the seller is bound to give possession on being so required, and this obligation is inherent in every agreement of sale unless a contract to the contrary exists. As the agreement in question contained no such contrary provision, the decree for specific performance validly included a direction to deliver possession. Held that accepting the seller's argument would lead to a travesty and multiplicity of litigation, which cannot be countenanced. (Paras 9-14)
Issue of Consideration
What is the effect of absence of any recital in the Agreement of Sale (Exh.28) that possession of Gat No. 41/2 was to be delivered after completion of the transaction?
Final Decision
The High Court dismissed the second appeal. It held that under Section 55(1)(f) of the Transfer of Property Act, a seller is bound to deliver possession on being required, and this obligation is inherent in every agreement to sell unless specifically excluded. The absence of an express stipulation in the agreement does not bar a direction for delivery of possession in a decree for specific performance. The decree of the appellate court, directing execution of the sale deed and delivery of possession upon payment of Rs.63,750, was upheld. No order as to costs.
Law Points
- Obligation of seller to deliver possession is inherent in agreement of sale under Section 55(1)(f) of Transfer of Property Act
- specific performance decree can include direction for delivery of possession even without express contractual stipulation
- avoiding multiplicity of litigation
- absence of contrary agreement implies seller's duty to give possession
Case Details
2018 LawText (BOM) (04) 165
Second Appeal (SA) No. 363 of 2017
Shri S.V. Sohoni, Shri A.Z. Jibhkate
Maroti s/o Bhiwaji Hatwar
Dada s/o Dashrath Mangrulkar
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Nature of Litigation
Civil suit for specific performance of an agreement to sell immovable property and for delivery of possession.
Remedy Sought
The respondent-plaintiff sought specific performance of the agreement dated 12.03.1997, execution of the sale deed, and delivery of possession of the suit land.
Filing Reason
The plaintiff claimed that despite being ready and willing to perform his part, the appellant-seller avoided executing the sale deed, leading to the suit. The defendant denied the agreement, contending it was a document of security for business transactions.
Previous Decisions
The trial court decreed the suit, directing the appellant to execute the sale deed and deliver possession upon payment of the balance amount determined as Rs.28,989. The first appellate court confirmed the decree for specific performance and delivery but modified the balance consideration to Rs.63,750, the full amount specified in the agreement.
Issues
What is the effect of absence of any recital in the Agreement of Sale (Exh.28) that possession of Gat No. 41/2 was to be delivered after completion of the transaction?
Submissions/Arguments
Appellant argued that the agreement to sell did not contain an express stipulation for delivery of possession, and therefore the decree for specific performance could not include a direction to deliver possession. Relied on Adcon Electronics Pvt. Ltd. v. Daulat and another.
Respondent argued that delivery of possession is an integral part of the sale process under the Transfer of Property Act, and even without an express clause, the seller is legally bound to hand over possession. Relied on Sundara Ramanujam Naidu v. Sivalingam Pillai and another and Sm. Dhiraj Bala Karia v. Jethia Estate Pvt. Ltd.
Ratio Decidendi
When parties enter into an agreement for sale of immovable property, the seller's obligation to deliver possession upon execution of the sale deed is inherent and implicit under Section 55(1)(f) of the Transfer of Property Act, 1882, unless there is a contract to the contrary. A decree for specific performance of such an agreement can validly include a direction for delivery of possession even if the agreement does not contain an express stipulation to that effect.
Judgment Excerpts
A perusal of the said agreement to sell shows that it nowhere stipulates that upon execution of sale deed, the appellant was required to handover possession of the suit property to the respondent.
The term 'sale' is defined in Section 54 of the aforesaid Act...
Thus, when parties enter into an agreement to sale, delivery of the immovable property which is subject matter of the agreement is built in and it is an integral part of an obligation of a seller who is party to such agreement.
If the contention raised on behalf of the appellant is accepted then upon such decree being granted in favour of the respondent, it would stand satisfied and executed only by execution of a document in the form of sale deed and that for delivery of possession, the respondent/decree holder would have to initiate further proceedings... This would be a travesty and it would lead to multiplicity of litigation, which cannot be countenanced.
Procedural History
The respondent-plaintiff filed Special Civil Suit No. 16 of 2000 before the trial court. By judgment and order dated 22.04.2003, the trial court decreed the suit, directing the appellant to execute the sale deed and deliver possession upon payment of balance Rs.28,989. The appellant filed Regular Civil Appeal No. 47 of 2012, and the appellate court confirmed the decree for specific performance and delivery but partly modified it by enhancing the balance consideration to Rs.63,750. Aggrieved, the appellant filed Second Appeal No. 363 of 2017 before the High Court.
Acts & Sections
- Transfer of Property Act, 1882: Section 54, Section 55(1)(f)
