P.S. RANAKRISHNA REDDY versus M.K. BHAGYALAKSHMI AND ANR.

Citation: [2007] 2 S.C.R. 876 · Decided: 20-02-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
P.S. RANAKRJSHNA REDDY 
v. 
M.K. BHAGY ALAKSHMI AND ANR. 
FEBRUARY 20, 2007 
B 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
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Specific Relief Act, 1963-Section 20-Specific performance-Landord 
took loan from tenant, Thereafter parties entering into sale agreement and_ 
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loan amount taken as advance amount-Suit for specific prformance of sale 
agreement-Document to be construed as agreement for sale or agreement 
for loan-Held: From the agreement it cannot be gathered that the agreement 
for sale was not meant to be acted upon-In case of any breach by the buyer-
tenant, seller-landlord could forfeit advance amount-As such parties intended 
to lay down their rights and obligations under the contract explicitly-Thus 
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agre~ment was an agreement for sale-Deeds and documents-Interpretation 
of 
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Appellant owned a residential house. Respondent was in possession of 
the property as tenant. Appellant took loan from respondent no. 1 from time 
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to time. Thereafter, appellant and respondent entered into a sale agreement. 
Sum paid as loan was treated as advance amount out of total consideration 
amount. Respondent paid further sum and issued notice to the appellant 
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alleging that he was trying to sell the property to the third party. He then 
called upon the appellant to execute sale deed on reciept of the balance amount. 
Since the appellant did not agree, respondent filed suit for specific 
F performance of sale agreement Trial Court decreed the suit. Appellant filed 
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first appeal. High Court dismissed the same. Hence the present appeal. 
Appellant contended that the trial court as also High Court erred in 
construing the documents as an agreement for sale instead and place of an 
agreement for loan; that the purported agreement for sale was not meant to 
G l>e acted upon; that in view of the default clauses contained in the agreement, 
the same could not have been construed to be an agreement for sale; and th.at 
it is not a fit case where the Courts below should have exercised their 
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discretionery jurisdiction under s. 20 of the Specific Relief Act, 1963. 
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876 
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P.S. RANAKRISHNA REDDY v. M.K. BHAGYALAKSHMI 
877 
Dismissing the appeal, the Court 
HELD: Original relationship of the parties as landlord and tenant is 
not in dispute and also the fact that the appellant intended to convey his right, 
title and interest in respect of the said property. Appellant entered into more 
than one agreement in respect of the self-same property and took advances in 
respect thereof from more tJ!an one person. [Para 10) [881-C-DJ 
1.2. The agreement in question had been described as an agreement for 
sale. Appellant admittedly was owner of the property. The agreement shows 
that there had been negotiations between the parties as a result where of the 
respondent had offered to buy and the appellant had agreed to sell the said 
property for a sum of Rs. 45,000/- The terms and conditions stipulated therein 
were arrived at as a result of the negotiations between the parties. [Para 11 I 
1.3. No Part of the agreement supports the submission of the appellant 
that the same was not meant to be acted upon. It was signed by the parties. 
Two witnesses who had attested the signature of the parties to the agreement 
were examined before the Trial Court It may be that despite the said agreement, 
Respondent No. 1 was allowed to continue to remain in possession of the 
premises in question as a tenant and not in part performance of the said 
agreement for sale, but it was not necessary for the parties to adopt the latter 
course only. [Para 12) [881-E-F) 
1.4. A document, as is well Known, must be read in its entirety. The 
intention of the parties must be gathered from the document itself. All parts 
of the deed must be read in their entirety so as to ascertain the nature thereof . 
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. The parties, on a plain reading of the agreement, apparently intended to 
continue their relationship as landlord and tenant till a regular deed of sale F 
was executed. [Paras 12 and 13) [881-G-H] 
1.5. In the event of commission of any breach on the part of respondent, 
the appellant was entitled to forfeit the entire amount. The very fact that the 
parties intentionally incorporated such default clause deary goes to show that 
they intended to lay down their rights and obligations under the contract 
explicity. Therefore, they knew the terms thereof. They understood the same. 

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