2017 (4) TMI 1395 - HC - Indian Laws

Suit for specific performance - decree of suit - contract existed or not? - Section 100 of the Code of Civil Procedure, 1908 - Held that - The appellant/defendant sought to argue that the subject agreement to sell is not a contract in the eyes of law, however, it is noticed that no such plea was raised in the trial court, no such issue framed and no such decision given by any of the two courts below, and therefore on a plea which is not raised a substantial question of law cannot be said to arise under Section 100 CPC - In any case, there is no dispute as to the identification of the suit property and the fact that receipt-cum-agreement to sell dated 22.1.2002 mentions the parties to a contract as also the entire sale consideration besides the mode and manner of payment with the balance payment liable to be made at the time of transfer of the title documents, and hence is a contract as required by law. No substantial question of law arises - appeal dismissed.

Summary

Issues involved:
1. Validity of the suit for specific performance based on a receipt-cum-agreement to sell.
2. Denial of execution of the agreement by the defendant.
3. Interpretation of the Registration Act regarding unregistered agreements.
4. Application of Section 49 of the Registration Act in suits for specific performance.
5. Consideration of the agreement as a valid contract in the absence of specific legal issues raised.

Issue 1: Validity of the suit for specific performance based on a receipt-cum-agreement to sell:
The judgment pertains to a suit for specific performance filed by the plaintiff seeking enforcement of a receipt-cum-agreement to sell a property. The suit was decreed by the Trial Court and the First Appellate Court, leading to the defendant filing a Regular Second Appeal under Section 100 of the CPC challenging the judgments of the lower courts. The defendant had received a partial payment under the agreement and failed to transfer the property title, resulting in the plaintiff seeking specific performance.

Issue 2: Denial of execution of the agreement by the defendant:
The defendant denied executing the receipt-cum-agreement to sell and claimed that the amount received was for a loan repayment, not as part of the property transaction. However, the defendant failed to provide evidence of the alleged loan transaction, including the repayment through a cheque mentioned in the agreement. The courts found the defendant's denial unsubstantiated, leading to the decree of specific performance in favor of the plaintiff.

Issue 3: Interpretation of the Registration Act regarding unregistered agreements:
An argument was raised regarding the registration status of the agreement to sell, contending that an unregistered agreement cannot be considered under Section 17(1)(a) of the Registration Act. However, the court clarified that while unregistered agreements cannot benefit from Section 53A of the Transfer of Property Act, they can form the basis for a suit for specific performance under Section 49 of the Registration Act.

Issue 4: Application of Section 49 of the Registration Act in suits for specific performance:
The court emphasized that an unregistered agreement to sell can be the foundation for a suit seeking specific performance, as per Section 49 of the Registration Act. The judgment distinguished between using such agreements for part performance benefits under Section 53A and utilizing them as the basis for specific performance, highlighting the validity of the latter approach.

Issue 5: Consideration of the agreement as a valid contract in the absence of specific legal issues raised:
The defendant's contention that the agreement was not a valid contract was dismissed since no such issue was raised or decided in the lower courts. The court noted that the agreement clearly identified the parties, the property, the consideration, and the payment terms, fulfilling the requirements of a contract under the law. Consequently, no substantial legal question was found to arise under Section 100 of the CPC, leading to the dismissal of the Regular Second Appeal.

The judgment provides a detailed analysis of the issues surrounding the validity of a suit for specific performance based on a receipt-cum-agreement to sell, emphasizing the importance of evidence, legal interpretations of the Registration Act, and the essential elements of a valid contract. The decision clarifies the legal principles governing such disputes and affirms the lower courts' decrees in favor of the plaintiff seeking enforcement of the property transaction.