2003 (2) TMI 493 - SC - Indian Laws

Summary

Issues Involved:
1. Specific performance of an agreement to sell.
2. Cancellation of the agreement on the grounds of loan nature.
3. Appellate Court's power to modify the decree without cross-appeal or cross-objection.
4. Scope of power under Order 41 Rule 33 of the CPC.

Summary:

1. Specific Performance of an Agreement to Sell:
The respondent filed a suit for specific performance of an agreement to sell dated 03.11.1988, later novated by an agreement dated 15.7.1991. The consideration for the sale was Rs. 2,90,000/-, with Rs. 2,40,000/- already received by the vendor, leaving a balance of Rs. 50,000/- to be paid at the time of execution and registration of the sale deed. The Trial Court, in its judgment dated 20.5.1994, directed the appellants to deposit Rs. 2,40,000/- with interest, failing which the respondent could execute the sale deed after depositing Rs. 50,000/-.

2. Cancellation of the Agreement on Grounds of Loan Nature:
The appellants filed a suit seeking cancellation of the agreement, claiming the transaction was a loan of Rs. 60,000/-, with added interest capitalized by the respondent. The Trial Court found the appellants were cultivating the land and would suffer hardship if the sale deed was executed. The Trial Court's decree included a conditional order for specific performance if the appellants failed to deposit the money.

3. Appellate Court's Power to Modify the Decree Without Cross-Appeal or Cross-Objection:
The appellants appealed, and the High Court stayed the execution of the decree subject to deposit conditions. The first Appellate Court dismissed the appeals but modified the decree to grant specific performance in favor of the respondent without any cross-appeal or cross-objection by the respondent. The High Court upheld this decision, stating the first Appellate Court committed no error under Order 41 Rule 33 of the CPC.

4. Scope of Power Under Order 41 Rule 33 of the CPC:
The Supreme Court examined whether the first Appellate Court could modify the decree to grant specific performance without a cross-appeal or cross-objection by the respondent. It was held that the first Appellate Court did not have jurisdiction to modify the decree in such a manner. The Court emphasized that a respondent must file a cross-objection to seek modification of the decree to their advantage. The Supreme Court restored the Trial Court's decree and accepted the appellants' offer to pay an additional Rs. 1,20,000/- as compensation to the respondent.

Conclusion:
The appeals were allowed, setting aside the first Appellate Court's judgment and restoring the Trial Court's decree. The appellants were relieved from specifically performing the agreement, and the deposited amount of Rs. 2,40,000/- along with interest was to be released to the respondent. An additional Rs. 1,20,000/- was to be deposited by the appellants within eight weeks. The costs were to be borne by the parties as incurred.