2022 (9) TMI 1533 - SC - Indian Laws

Suit for specific performance - money lending transaction or not - denial of execution of the sale deed - HELD THAT - The plaintiff himself has admitted in the plaint that the suit property is jointly owned by the defendant, his wife and three sons. A specific objection was also taken by the defendant in his written statement with regard to non joinder of necessary parties. Since the suit property was jointly owned by the defendant along with his wife and three sons, an effective decree could not have been passed affecting the rights of the defendant s wife and three sons without impleading them. It can thus be seen that what has been held by this Court is that for being a necessary party, the twin test has to be satisfied. The first one is that there must be a right to some relief against such party in respect of the controversies involved in the proceedings. The second one is that no effective decree can be passed in the absence of such a party. In view of the plaintiff s own admission that the suit property was jointly owned by the defendant, his wife and three sons, no effective decree could have been passed in their absence. Thus, no error can be noticed in the judgment of the High Court. The appeals are therefore liable to be dismissed.

Summary

Issues Involved:
1. Specific performance of the agreement to sell.
2. Ownership and joint family property status.
3. Non-joinder of necessary parties.
4. Equitable relief and refund.

Issue-wise Detailed Analysis:

1. Specific Performance of the Agreement to Sell:
The plaintiff, a doctor, entered into an agreement to purchase a part of the house he was renting from the defendant for Rs.50,000/-, paying Rs.24,000/- upfront. The defendant later requested an additional Rs.6,000/-, which the plaintiff paid, and subsequently took possession of the property. The plaintiff claimed he was always ready and willing to perform his part of the agreement, but the defendant denied the execution of the sale deed, alleging it was a money lending transaction. The trial court decreed the suit for specific performance, directing the defendant to execute the sale deed, which was upheld by the Appellate Court. However, the High Court, in the second appeal, denied specific performance but ordered the refund of Rs.30,000/- with interest.

2. Ownership and Joint Family Property Status:
The plaintiff claimed the suit property exclusively belonged to the defendant. However, the High Court found that the property was jointly owned by the defendant, his wife, and three sons, contradicting the trial court's finding. The High Court's decision was based on the plaintiff's own admission in the plaint and the defendant's assertion that the property was joint family property.

3. Non-joinder of Necessary Parties:
The High Court held that the suit was not maintainable due to the non-joinder of the defendant's wife and sons, who were co-owners of the property. The plaintiff had admitted the joint ownership in the plaint but did not implead the other family members. The court emphasized that an effective decree could not be passed in their absence, citing the principle that a "necessary party" is one whose absence prevents an effective decree.

4. Equitable Relief and Refund:
Despite denying specific performance, the High Court balanced the equities by ordering the defendant to refund Rs.30,000/- with interest from the date of the suit's institution until realization. This decision was affirmed by the Supreme Court, which found no error in the High Court's judgment and dismissed the appeals.

Conclusion:
The Supreme Court upheld the High Court's judgment denying specific performance due to non-joinder of necessary parties and joint ownership status but affirmed the refund of Rs.30,000/- with interest to balance the equities. The appeals were dismissed, and no costs were awarded.