The Appeal challenges the judgment dated 17th October 2008 passed by the High Court of Andhra Pradesh. The defendant is the owner of the suit property and effected an agreement of sale in favor of the plaintiff.
The total consideration is Rs.45,315/-. The plaintiff paid an amount of Rs.15,000/- in form of a Demand Draft dated 7th July 1978 as advance payment. The defendant addressed a letter to the plaintiff on 13th October 1978 stating therein that, she was ready to execute the sale deed.
The plaintiff responded to it by requesting to confirm whether the necessary permission from the Competent Authority (hereinafter referred to as the "ULC Authorities") under the Urban Land (Ceiling and Regulation) Act, 1976 to sell the suit property had been obtained or not. Further defendant on 8th December 1978, applied to the Secretary to Government of Andhra Pradesh, Revenue Department for granting exemption under Section 20 of the ULC Act for selling the suit property.
On 12th April 1982, the defendant addressed a communication to the plaintiff informing them the necessary permission from the ULC Authorities could not be obtained, and therefore, she cancelled the agreement of sale dated 29th July 1978.
The defendant enclosed a Demand Draft of Rs. 15,000/- to refund the advance amount. The plaintiff replied to the defendant the contract was binding and returned the said Demand Draft. It was also opposed to him that because of the price rise, the defendant was going back on the promise. The defendant, on 2nd June 1982 addressed a letter to the plaintiff, stating therein that, she was forfeiting the advance payment of Rs.15,000/- since the plaintiff had not claimed the refund within 90 days from the date of the agreement of sale.
The plaintiff filed a suit before the trial court seeking specific performance of the agreement of sale. The trial court came down to the conclusion directing the defendant to execute the sale deed within 2 months from the date of the judgment and decree. Being aggrieved the defendant filed an appeal.
The learned Single Judge of the High Court allowed the appeal and dismissed the suit of the plaintiff. Then the plaintiff filed another appeal the learned Division Bench denied the relief to the plaintiff for specific performance but held that the plaintiff was entitled to get the refund for the advance payment of Rs.15,000 along with the accrued interest or a sum of Rs.3,00,000 in all. The learned Single Judge while reversing the judgment and decree passed by the trial court relied on Clauses 3 and 5 of the agreement of sale dated 29th July 1978.
As per the interpretation of the aforesaid clauses, the Court concluded that a reading of the said clauses made it clear that the parties intended that the permission should be obtained by the defendant within 75 days. It held that the required permission wasn’t obtained by the defendant within the period. Thus, the plaintiff was entitled to get money. in the event the permission was not obtained by the defendant within the stipulated time, the plaintiff was entitled to get back his advance money.
As per the facts, the defendant terminated the agreement on 12th April 1982 stating that permission could not be obtained, sale agreement was cancelled. Only after the ULC permission was granted on 7th February 1984, the plaintiff issued a legal notice to the defendant on 19th February 1984.
The
agreement of sale provided that in the event the permission was not
obtained within 75 days, the purchaser shall be entitled to get back his
advance money paid after 75 days but not later than 90 days under any
circumstances. The Supreme Court agreed upon the view taken by
the learned single judge and division bench and directed that defendants
pay an amount of Rs.15,00,000 to the appellants. The said amount shall
be paid within a period of 3 months from the date of this judgment.
“The suit is liable to be dismissed if a necessary party is not impleaded”: Supreme court
MORESHAR YADAORAO MAHAJAN vs. VYANKATESH SITARAM BHEDI (D) THR. LRS. AND OTHERS: These appeals challenge the judgment dated 3rd July 2008 passed by the learned Single Judge of the High Court of Judicature at Bombay. The plaintiff was a doctor in government practice to start his private practice and took part in the defendant’s house the defendant was in financial need he suggested to the plaintiff that he should purchase the said part of the house which the plaintiff was occupying, together with an added portion. The plaintiff accepted the said suggestion and an agreement to sell was entered into on 24th July 1984. As per the terms of the said agreement to sell, the defendant agreed to sell and the plaintiff agreed to purchase the suit property for Rs.50,000/-. The plaintiff paid an amount of Rs.24,000/- on the date of the agreement and the defendant executed an earnest note in favor of the plaintiff.
As per the terms of the agreement to sell, the sale deed was to be executed before 31st March 1985. It is the case of the plaintiff that on 31st July 1984, the defendant again requested money and, on such request, the plaintiff paid him an amount of Rs.6,000/-. It is also the case of the plaintiff that under the aforesaid payment, he was put in possession of the suit property on 31st July 1984.
The plaintiff was always ready and willing to perform his part of the agreement and therefore, he informed the defendant by registered letter that he was willing to complete his part of the transaction before 31st March 1985. However, the defendant replied to the said notice by alleging that the transaction was of money lending and denied the execution of the sale deed. However, the defendant replied to the said notice by alleging that the transaction was of money lending and denied the execution of the sale deed. The plaintiff applied for a suit for specific performance before the trial court. The trial court directed the defendant to execute the sale deed by accepting the balance sale consideration as per the terms of the agreement to sell. if the defendant failed to execute the sale deed, the same should be executed through the court. Being aggrieved thereby, the defendant preferred an appeal before the Appellate Court.
It was directed that if the defendant failed to execute the sale deed, the same should be executed through the Court. Being aggrieved thereby, the defendant preferred an appeal before the Appellate Court which was also dismissed. The defendant thereafter preferred a second appeal before the High Court which came to be partly allowed vide the impugned judgment. It directed the defendant to refund the amount of Rs.30,000/- along with an interest at the rate of 9% per annum from the date of the institution of the suit till its realization. Thus, the present appeal is at the instance of the plaintiff.
The trial court framed the issue as to whether the suit was bad in law for non-joinder of necessary parties, that a “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. It has been established that the lawsuit itself may be dismissed if a "necessary party" is not impleaded. As already discussed hereinabove, the plaintiff himself has admitted in the plaint that the suit property is jointly owned by the defendant, his wife, and three sons.
It is clear from the preceding that this Court has held that to qualify as a necessary party, two requirements must be met:
(1) There must be a right to relief against the necessary party concerning the controversies involved in the proceedings; and
(2) No effective decree can be passed in the absence of the necessary party. Accordingly, the High Court's decision cannot be questioned.
The appeals are therefore likely to be rejected. In any case, the High Court partially decreed the suit to balance the interests and ordered the defendant to reimburse Rs. 30,000. With an interest at the rate of 9% per annum from the date of institution of the suit till its realization of the appeals is dismissed.
Cited: KOLLI SATYANARAYANA (DEAD) BY LRS. vs. VALURIPALLI KESAVA RAO CHOWDARY (DEAD) THR. LRS. AND OTHERS: Decided On, 17 October 2008
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