BANSHILAL SONI (DEAD) THROUGH LRS. versus KASTOOR CHAND BEGANI (DEAD) BY L.RS. & ORS.

Citation: [2007] 8 S.C.R. 323 · Decided: 12-07-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

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BANSHILAL SONI (DEAD) THROUGH LRS. 
A 
v. 
KASTOOR CHAND BEGANI (DEAD) BY L.RS. & ORS. 
JULY 12, 2007 
[DR. ARIJITPASAYAT AND LOKESHWARSINGHPANTA, JJ.] 
B 
Specific performance-Specific performance of contract-Entitlement 
for-Plaintiff's case that defendant agreed to sell house by execution of sale 
agreement-Plaintiff paying advance amount of Rs 50,0001-Non-execution C 
of sale deed-Suit for specific performance of contract-Defendant's case that 
plaintiff gave loan of Rs 50, 0001 on condition that defendants would execute 
sale agreement of house as collateral security for such loan and plaintiff 
voluntarily accepting return of Rs 25,0001 towards part of loan advanced by 
him-Return of amount was 7 days before the date fixed for execution of sale 
deed-High Court held that plaintiff not entitled to specific performance of b 
contract since he abandoned the right by accepting Rs. 25,000-0n appeal, 
held: Transaction was of loan and security and not of refund of earnest 
money as made out by High Court-However, order of High Court not set 
aside-Jn the interest of justice, defendant directed to pay Rs 7.5 lakhs to the 
plaintiff. 
E 
According to the plaintiff, the defendants agreed to sell a house to the 
plaintiff for Rs 5 lakhs by execution of sale agreement. Defendant took advance 
amount of Rs. 50,000/-. Sale deed was to be executed on 10.04.1991. 
Defendants did not execute the sale deed. Plaintiff issued notice to the 
defendants. Plaintiff then filed suit for specific performance of contract for F 
sale of house. Defendants contended that the plaintiffs gave a loan of 
Rs 50,000/- to them on the condition that the defendants would execute an 
agreement to sell the house as a collateral security for such loan; that they 
never agreed to hand over the possession of the house after execution of sale 
deed; that the plaintiff was not ready and willing to perform his part of the 
contract; that the plaintiff voluntarily accepted return of Rs 25,000/- towards G 
part of Joan advanced by him on 03.04.1991 and receipt was issued and as 
such abandoned his claim of'specific enfo.rcement of the contract; and that 
the time was essence of contract and the same was not compli,ed with. Trial 
Court held that the plaintiff was ready and willing to perform the contract, 
H 
324 
SUPREME COURT REPORTS 
[2007) 8 S.C.R. 
A the time was not essence of contract and that it was an agreement for sale 
'*' 
and not for loan amount. High Court held that the plaintiff abandoned his 
rights under the contract thus, was not entitled to specific performance of 
the contract. However, it directed the defendants to pay Rs 1 lakh to the 
plaintiff for wrong retention of Rs 25,000/- of the plaintiff. Hence the present 
B 
appeal 
Appellants-plaintiffs contended that the High Court made out a new case 
which is contrary to the evidence led in the matter and the evidence adduced. 
f 
,.. 
Disposing of the appeal, the Court 
c 
HELD: 1.1. When the evidence of the defendants is scanned with the 
specific stand there was no agreement to sale and the agreement of security 
of loan. In the evidence it was stated that Rs.25,000/- was paid by way of 
repayment. It was indicated to suggest that plaintiff had paid earnest money. 
The trial courrrecorded that stipulation for damages are unusual. The last 
..; 
D date for execution of sale deed was 10.4.1991. For a period of nearly 20 months 
nothing was done and about 7 days before the expiry of the 20 months period 
;. 
the receipt of Rs.25,000/- was issued. There was no notice or demand 
v 
indicating readiness and willingness. The notice was given three months after 
the date i.e. 10.4.1991, on 15.7.1991. There was no mention about the payment 
of Rs.25,000/- in the suit. Since the relief claimed is discretionary one, it 
E would not be proper to interfere with the conclusions of the High Court. 
!Para 811327-H; 328-A-BI 
1.2. A bare reading of the evidence of the defendants clearly shows that 
the specific case was one of loan and security and not a case regarding refund 
F 
of earnest money. That being so the High Court has made out a new case that 
the sum of Rs.25,000/- was by way of refund of earnest money. That was not 
... • 
the case of the defendants in the pleadings or in the evidence. Interestingly, 
the stands in the reply_ to the notice were at variance with the written statement. 
Therefore, normally the order of the High Court would have been set aside. 
But some factors w

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