IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6056 OF 2009 (Arising out of S.L.P. (C) No.9791 of 2007)

Radhakrishna Dharmartha Pvt. Trust & Ors.     ...Appellant(s)

Versus

Parmanand Soni (Dead) By L.Rs.               ...Respondent(s)

O  R  D  E  R

Leave granted.

The  appellant-Trust  through  its  Managing  Trustee,  

Shri R.P. Sinha entered into an agreement with respondent  

Parmanand  Soni,  who  is  now  represented  by  his  legal  

representatives for sale of 1200 Sq. ft. of land and house  

constructed  over  it.   In  terms  of  the  agreement,  the  

respondent-purchaser deposited Rs.20,000/- as earnest money  

and promised to deposit the balance within 6 months from the  

date of agreement and get the sale deed registered at his  

cost with a stipulation that in case he fails to do so, the  

earnest money shall stand forfeited and the vendor will have  

all rights to sell the property to any party without any  

further notice to the purchaser and the purchaser shall have  

no right or claim whatsoever in his behalf.

...2/-

- 2 -  

After two years and four months, the respondent filed  

suit  for  specific  performance  of  agreement  dated  12th  

November, 1990.  The respondent pleaded that even though he  

was  always  ready  and  willing  to  perform  his  part  of  the  

contract, the defendants No.1 to 3 avoided receipt of the  

balance amount and execution of the sale deed and they sold  

the  property  to  defendant  Nos.4  and  5.   The  trial  Court  

dismissed the suit vide judgment dated 3.12.1997.  It held  

that the plaintiff has not been able to prove the payment of  

balance price within the period of 6 months.  The trial Court  

did not accept the plaintiff’s version that he had paid the  

balance amount of Rs.30,000/- to Deohar Ram Manohar Sinha,  

who  was  a  trustee  but  the  same  was  returned  without  any  

tangible reason.  On appeal, the High Court reversed the  

judgment and decree of the trial Court and decreed the suit.  

Hence, this appeal by special leave.

We have heard learned counsel for the parties and  

perused the record.  Paragraph (1) of the agreement dated 12th  

November, 1990 entered into by the parties, which was sought  

to be enforced by Parmanand Soni by filing suit reads thus:

“This agreement is made between Shri Radha Krishna  Dharmarth  Private  Trust,  Shatia  Kua,  Jabalpur  through Managing Trustee Beohar R.P. sinha of the  one part hereinafter called the Vendor and Shri  Parmanad  soni  son  of  Shri  Jankiprasad  Soni,  resident  of  house  No.891,  Sathia  Kua,  Jabalpur  hereinafter called as Purchaser of the other part;  whereas the  Purchaser has agreed  to purchase all  that  property  including  house  No.891  which  is  occupied  by  him  as  a  tenant  of  the  Vendor  at  Rs.110/-  (Rupees  One  Hundred  Ten  only)  monthly  rent, and the open house No.905 occupied by Shri  Nerkar  as tenant  at Rs.45/- per  month measuring

...3/-

- 3 -  

approximately 1200 sq.ft., less the area of drain  two ft. wide and running through the sold property  North  to  South,  the  actual  measurement  whereof  will be ascertained at the time of preparing the  Map of the house; at the rate of Rs.50/- (Rupees  Fifty only) per sq. ft. out of which the purchaser  has  deposited  today  Rs.20,000/-  (Rupees  Twenty  Thousand Only) as earnest money and had promised  to  deposit  the  balance  within  six  months  from  today  and  get  the  sale  deed  registered  at  his  costs  failing  which  the  earnest  money  of  Rs.20,000/-  (Rupees  Twenty  Thousand  Only)  shall  stand  forfeited  and  the  vendor  will  have  all  rights to sell this property to any party without  any  further  notice  to  the  purchaser  and  the  purchaser shall have no right or claim whatsoever  in this behalf.”

From a bare perusal of the aforesaid agreement, it is  

clear that the appellant through its Managing Trustee, Shri  

R.P.  Sinha  agreed  to  sell  the  suit  land  at  the  rate  of  

Rs.50/-  per  sq.  ft.  to  Parmanand  Soni,  who  deposited  

Rs.20,000/- by way of earnest money.  The balance amount was  

to be deposited by the purchaser within 6 months from the  

date of agreement and he was to get the sale deed registered  

at his own cost with the rider that if he fails to do so, the  

earnest money shall stand forfeited and the vendor will have  

all rights to sell the property to any party without any  

further notice to the purchaser.   

Undisputedly,  the  period  of  6  months  specified  in  

agreement dated 12th November, 1990 for payment of the balance  

amount ended on 11.5.1991 and the said amount was not paid by  

that date.  It is also not in dispute that after expiry of  

the period of 6 months, the purchaser is said to have given  

the  balance  amount  to  Deohar  Ram  Manohar  Sinha,  who,  as  

mentioned above, was a trustee of the appellant-Trust.  He  

returned the  amount to  the purchaser  because  the Managing

..4/-

- 4 -  

Trustee did not agree to accept the same.  It is neither the  

pleaded case of the respondent nor any evidence was produced  

before the trial Court to show that Shri Deohar Ram Manohar  

Sinha  was  empowered  or  authorised  to  accept  the  balance  

amount  offered  by  the  respondent  and  that  too  after  the  

expiry of the period specified in the agreement.  Therefore,  

the  trial  Court  was  fully  justified  in  holding  that  the  

plaintiff  is  not  entitled  to  specific  performance  of  the  

agreement  and  the  High  Court  committed  serious  error  in  

reversing  the  judgment  and  decree  of  the  trial  Court  by  

presuming  that  Deohar  Ram  Manohar  Sinha  was  entitled  to  

receive the balance amount or any portion thereof on behalf  

of the appellant-Trust and that too after 11.5.1991.   

Accordingly,  the  appeal  is  allowed,  impugned  order  

passed by the High Court is set aside and the judgment and  

decree of the trial Court are restored.  As a sequel to this,  

the suit filed by the purchaser shall stand dismissed.

......................J.               [B.N. AGRAWAL]

......................J.               [G.S. SINGHVI]

New Delhi, September 04, 2009.