JAYANT MANIKLAL LUNAWAT Vs. KAMAL ARJAN HINGORANI

JUDGEMENT

(1.) The present first appeal arises out of a decree of dismissal passed in a specific performance suit by Joint Civil Judge, Senior Division, Pune.

(2.) The short facts of the case may be stated as follows : Respondent Nos. 1 and 2 herein ("Defendants") are lesses in respect of a plot of land, bearing Plot No.265 at Village Aundh, Pune7, together with the structure constructed thereon ("suit property"). Sindh CoOperative Housing Society Ltd. ("Society") is the owner of the suit property. It has executed a lease deed dated 17 May 1999 in favour of the Defendants. By a Memorandum of Understanding dated 25 May 2005 ("first MOU"), executed between the Appellant ("Plaintiff") and Defendant No.1, the latter agreed to sell the suit property to the Plaintiff. A sum of Rs. 5 lakhs was paid by the Plaintiff towards this sale. In pursuance of the first MOU, a power of attorney was also executed authorising the Plaintiff to do various acts in respect of the suit property on behalf of the vendors. In the first week of June 2005, the Plaintiff was allowed to carry out certain work in the suit property, which included clearing of the plot for development. On 30 June 2005, Defendant No.1 revoked the power of attorney granted in favour of the Plaintiff. It appears that, thereafter, there were fresh negotiations between the parties and finally, on 22 June 2005, a second MOU was executed between the Defendants and the Plaintiff. By this MOU ("second MOU"), the Defendants agreed to sell the suit property to the Plaintiff for a lumpsum consideration of Rs.1.61 crores. The second MOU records that the sum of Rs. 5 lakhs, originally paid by the Plaintiff to the Defendants under the first MOU, shall be adjusted towards the sale price and the balance consideration shall be paid by the Plaintiff within a period of ten months from the date of execution of the second MOU, i.e. on or before 21 May 2006, and at the time of delivery of possession of the suit property to the Plaintiff or his nominee. On 7 November 2004, further payment of Rs. 15 lakhs was made by the Plaintiff to the Defendants by way of partpayment of the consideration by cheques of Rs.5 lakhs and Rs.10 lakhs. Between November 2005 and May 2006, there was correspondence between the parties, including the Society, concerning various aspects bearing on the transaction such as demarcation of the property, reactivation of a well contained therein and the Society's permission for transfer of the suit property by the Defendants in favour of the Plaintiff. The last of such documents was dated 18 May 2006. This was an undertaking given by the Plaintiff to the Society that a bungalow would be constructed within 24 months and that the well in the property would not be filledup. By this date the Defendants had in all received from the Plaintiff a sum of Rs.42 lakhs towards the sale of the suit property, leaving a balance of Rs.1.19 crores. On 26 May 2006, the Defendants cancelled the second MOU on the ground of nonpayment of the balance consideration. Simultaneously, the Defendants withdrew their application to the Society for its NOC for transfer of the suit property to the Plaintiff. On 12 June 2006, the Defendants executed an agreement for sale in favour of one Jyotin Gandhi and Payal Gandhi, who are arraigned as Respondent Nos. 3 and 4 ("Respondents") to the present appeal. The Respondents claim to have paid a sum of Rs.29.50 lakhs to the Defendants in pursuance of this agreement. After execution of this agreement, the Defendants attempted to refund the amount of Rs.42 lakhs received by them from the Plaintiff towards the sale of the suit property, requesting for a copy of duly cancelled MOU along with all originals. The Plaintiff refused to accept the refund. On 28 July 2006, the Plaintiff filed the present suit, Special Civil Suit No.1322 of 2006, in the Court of Civil Judge, Senior Division, Pune, for specific performance of the second MOU. On 1 December 2006, an interim injunction was granted by the learned Judge restraining the Defendants inter alia from creating any third party rights in respect of the suit property. On 23 November 2011, the learned Civil Judge dismissed the suit. In February 2012, the present first appeal was filed by the Plaintiff.

(3.) The learned Judge framed 14 issues in all. The issues can be broadly grouped under six heads, namely, (i) execution of the suit agreement for sale (Issue Nos.1 and 8); (ii) the Plaintiff's readiness and willingness to perform his part of the contract (Issue Nos. 2 and 7); (iii) the Defendants' failure to perform the suit agreement for sale (Issue No.5); (iv) time as essence of contract (Issue Nos. 3 and 4); (v) existence of reciprocal promises in the contract (Issue No.6); and (vi) nonjoinder of necessary parties (Issue No.9). The other issues were either incidental to these main issues or reflected on the relief to be granted in the suit (Issue Nos. 8A, 8B, 8C, 10 and 11).