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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3912 OF 2017

PATEL KANTILAL PARSHOTTAMDAS (D) & ORS. .....APPELLANT(S)

VERSUS

JITENDRAKUMAR  NANJIBHAI  MISTRY (D) THROUGH LRS & ORS. .....RESPONDENT(S)

J U D G M E N T

A.K. SIKRI, J.

First,  the facts and events in chronological  order, as reading of

these facts will facilitate proper understanding of the issues that have cropped

up in the instant appeal of the dispute between the parties.   

One Jeevandas was the owner of a part of property bearing plot

Nos. 109 to 112, which was demarcated and known as sub-plot No.10 of the

said plot.  This sub-plot measures 828 square yards and is situated outside

Shanpur Darwaza, Mahendi Kuva Road, Ahmedabad.  Jeevandas executed a

sale deed in respect of this plot (hereinafter referred to as the ‘suit property’) in

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favour of one Kantibhai (for short ‘Kanti’) on 16.04.1959 for 99 years, of which

yearly rent fixed was Rs.1860/-.  This lease deed also provided an option to

the lessee to purchase the suit  property.  The lessee (Kanti)  executed an

Agreement of Sell dated 15.07.1974 in respect of the suit property in favour of

one Jitenderkumar Nanjibhai (for short ‘Jitender’) at a total consideration of

Rs.1,85,001/-.  The purchaser paid earnest money of Rs.25,000/- at the time

of execution of the said Agreement to Sell.  This agreement further provided

that the sale deed would be executed within a period of five months from the

date of execution of the agreement.  Sale deed was, however, not executed

within the said period and by mutual agreement this period was extended by

another five months.  A further sum of Rs. 20,000/- was paid by Jitender to

Kanti.   However, even during the extended period,  no sale deed could be

executed.   

2) According to Jitender (purchaser), the period for execution of the sale deed

was further extended by two years, though Kanti disputed this.  Kanti gave

notice  dated  06.05.1981  to  Jitender  for  cancellation  of  Agreement  to  Sell

putting blame on Jitender in not performing his part of the contract.  Jitender

replied to the said notice taking the position that the period for execution of

sale deed had been further extended.

3) As this led to dispute between the two, Kanti filed two suits against Jitender:

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for cancellation of Agreement to Sell and for possession and mesne profits.

After sometime, Jitender also filed suit against Kanti for specific performance

of Agreement dated 15.07.1974. All these suits were clubbed together.  The

trial  court  decreed  the  suit  filed  by  Kanti.   Suit  of  Jitender  for  specific

performance was dismissed barred by limitation as well.  The trial court also

returned the finding to the effect that Jitender could not establish that he was

ready and willing to perform the contract.  He, in fact, did not even enter the

witness box in support of his case.  The trial court, therefore, accepted the

case put up by Kanti to the effect that even when Kanti was in a position to

handover complete and vacant possession of the suit property, Jitender did

not perform his part of the contract within stipulated period.     

4) Jitender  filed  three  appeals  against  the  aforesaid  judgment.   During  the

pendency of these appeals, both Kanti and Jitender passed away and their

legal  heirs  were  brought  on  record.   The  High  Court  has  decided  these

appeals by the common judgment dated 22.10.2013.   The High Court has

maintained the decree of  dismissal  of the suit  filed by Jitender for  specific

performance.  Upholding the judgment of the trial court, the High Court has

held that Jitender is not entitled to the specific performance of the contract.

However, insofar as decree passed in favour of Kanti in the suit filed by him is

concerned, the High Court has set aside the said decree and remanded the

case back to the trial court.  The High Court discussed the nature of suit filed

by Kanti and pointed out that his suit was for cancellation of agreement on the

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ground that there was failure on the part of Jitender to show readiness and

willingness to execute the sale deed, which plea was accepted by the trial

court.  The High Court has held that this is an erroneous approach inasmuch

as under Section 31 of the Specific Relief Act, 1963, the suit can be instituted

for cancellation of written agreement when such written agreement is void or

voidable.  Thus, Kanti was supposed to show that the agreement is void or

voidable.  Instead, plea taken was that the other side has not shown readiness

or  willingness to  execute  the sale  deed,  which could  not  be a  ground for

cancellation of the agreement.   

5) The High Court pointed out that Kanti was given lease of the said property in

question for a period of 99 years by Jeevandas and, therefore, Kanti was only

a lessee.  No doubt, the said lease deed gave right to Kanti to purchase the

suit property from the original owner.  However, such an option to purchase

the suit property given to Kanti was not exercised by him during the period

mentioned in the lease deed or during the life time of the original owner i.e.

Jeevandas.  Thus, Agreement to Sell executed by Kanti in favour of Jitender

was in the nature of ‘contingent contract’ and, therefore, Jitender could hardly

acquire any right when Kanti himself was not the owner of the property.  It is

further held that Kanti had yet to become the owner.  As he had not acquired

propriety rights over the suit property, it was not possible for him to transfer

such a right to Jitender.  Having held so, the matter has been remanded back

under the following circumstances:

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“… But the point is, what is nature of agreement – i.e. agreement to sell, executed in the present case.  It is in nature of contingent contract and hence, voidable on that count.  The question that what is the nature and strength of agreement to sell  – can be answered satisfactorily only when plea based on the point that contract is in nature of voidable contract is raised and the same is defended by the other side.  Broadly stated, status of ‘seller’ at the time of execution of agreement to sell being status of ‘lessee’ only  and  acquiring  of  proprietary  rights  by  the  purchaser depending on ‘owner’ executing the deed in favour of purchaser, places the agreement to sell in category of ‘contingent contract’. Prima facie, the agreement falls in realm of ‘contingent contract’. Upon hearing the learned advocate for  the parties  and in the circumstances  of  the  present  case,  it  appears  to  be  just  and proper  to  allow the present  appeal  and remand Civil  Suit  No. 4104 of 1982 for its disposal in accordance with law.  It would be open to the parties to amend the pleadings accordingly and to lead the evidence – if the parties are so advised – in addition to the evidence already on record.  It is clarified that it would also be open for the parties and the trial court to refer to and rely upon the evidence already on record.  Since the suit is very old, it is expected  that  trial  court  would  dispose  of  the  suit  as expeditiously as possible.”

6) It is this outcome which is unpalatable to the legal heirs of Kanti, who have

filed the special  leave petition which has been converted into appeal after

grant of leave therein.   

7) Before adverting to the arguments of the learned counsel for the parties, we

deem it appropriate to record that insofar as suit filed by Jitender for specific

performance of the contract is concerned, a plea of part performance of the

contract was taken in the said suit which was predicated on the averment that

on an execution of the Agreement to Sell, possession of the suit property was

handed over to the purchaser.  The trial court held that it was not so as the

possession was not given consequent upon entering upon the said agreement

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but on account of relationship between the parties.  The High Court termed

this  finding as erroneous and held that  parting with possession of  the suit

property  was pursuant  to  the  Agreement  to  Sell  entered into  between the

parties.  However, appeal of Jitender against the judgment of the trial court for

specific performance has been dismissed on the ground that even if such a

possession was taken, it did not absolve the purchaser for his obligation to

comply  with  the  requirement  of  showing  his  readiness  and  willingness  to

execute the sale deed and that Section 53A of the Transfer of Property Act,

1882 could be used as a shield and not as a sword.  The High Court also

affirmed the finding of the trial court that the suit filed by Jitender, in any case,

was barred by limitation and, therefore, Jitender could not avoid the inevitable

result, merely by relying on Section 53A of Transfer of Property Act, 1882.   

The result is that suit for specific performance filed by Jitender stands

dismissed and the judgment of the High Court has attained finality as there is

no appeal by the respondents (legal heirs of Jitender).   

8) In this hue, we now revert back to the decision of the High Court in respect of

suit filed by Kanti (predecessor of appellant) which is remanded back to the

trial court as noted above.  We are of the opinion that the aforesaid course of

action adopted by the High Court in respect of relief claimed by Kanti in a suit

is not appropriate.  In the suit filed by him, Kanti had pleaded that after the

execution of the agreement, Jitender failed to perform his obligation contained

therein as he defaulted in making the payment of balance consideration within

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the time stipulated.  On that basis, the prayer made in the suit was that the

amount  of  earnest  money  under  the  agreement  stood  forfeited  as  the

agreement  had  become  non-effective,  null  and  void  and  consequently

possession of part of suit property held by Jitender was illegal which should be

handed over to the plaintiff.  Mesne profit was also claimed.  Second suit filed

by Kanti was specifically for mesne profit and for possession.  No case was

set up by Kanti that agreement was void because of the reason that he was

only a lessee in the suit property which was given to him by the original owner

Jeevandas for a period of 99 years and as he had not become the owner

thereof, the agreement was in the nature of ‘contingent contract’.  Obviously,

no evidence was led by any of the parties to this effect  in the absence of

pleadings.  Therefore, High Court could not, of its own, set up a new case

which was not a case pleaded by any of the parties.  The liberty to amend the

pleadings which is given is in the nature of allowing the appellant to come out

with altogether a new case not even pleaded or argued before the High Court.

Such an amendment could not have been allowed even if an application under

Order VI Rule 17 CPC was filed for amending the plaint.  In fact, the appellant

had not even sought this remedy.  The decree passed by the High Court on

this ground and direction to the trial court to dispose of the case afresh after

allowing  amendment  in  the  pleadings  and  leading  further  evidence  on

amended pleadings is, therefore, clearly erroneous in law.  We, thus, set aside

this direction.

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9) In the suit filed by Kanti (predecessor in interest of the appellant), his main

reliefs  were  to  declare  agreement  to  sell  as  void  and  for

possession-cum-mesne profit.   Insofar  as  the  first  relief  is  concerned,  this

result stands achieved on the dismissal of the suit filed by Jitender for specific

performance and in view of the findings of the courts below that Jitender failed

to fulfill his obligations under the said agreement and could not establish that

he was ready and willing to perform his part of the contract.  The only question

is as to whether the relief of possession could have been decreed.  The trial

court had decreed the suit to this effect.  Against this decree, respondents had

filed the appeal.  The High Court has not dealt with that aspect and instead

remitted the case back for fresh consideration, which direction has been set

aside by us.   

Though, this issue was argued before us, however, we are of the opinion

that it may not be proper for this Court to consider this aspect inasmuch as

this issue had arisen in the appeal of the respondents in the High Court and

respondents  are  not  in  appeal  before  us.   It  would,  therefore,  be  more

appropriate if the aforesaid issue is decided by the High Court.   

10) The appeal which was filed by the respondents against the decree passed in

Civil Suit No. 4104 of 1982 is accordingly allowed.  While setting aside the

order of remand in Civil Suit No. 4104 of 1982 passed by the High Court, the

High Court shall deal with the appeal of the respondents against the decree of

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the  Civil  Court  in  Civil  Suit  No.  4104  of  1982  on  the  limited  question  of

possession which was sought by the appellant in the said suit.

No costs.

…....................................J. (A.K.  SIKRI)

…....................................J. (ASHOK BHUSHAN)

NEW DELHI; APRIL 13, 2017.