Recently, the Supreme Court examined a long-standing dispute revolving around the grant of specific performance of an agreement to sell and the impact of subsequent transfers made during pending litigation, bringing into focus principles under the Transfer of Property Act, 1882 and the Code of Civil Procedure, 1908.
Brief Facts:
The case arose from a suit for specific performance of an agreement, whereby agricultural land was agreed to be sold for a fixed consideration. The Respondent alleged that a substantial portion of the sale consideration had already been paid partly through cheques and partly in cash, and that he remained ready and willing to perform his obligations by appearing before the Sub-Registrar on the stipulated date. However, the Appellants failed to execute the sale deed. Consequently, a civil suit was instituted seeking specific performance. While the trial court denied specific performance and granted only a refund of the admitted amount, the first appellate court reversed this finding and granted specific performance, which was later affirmed by the High Court.
Contentions of the Appellant :
The counsel for the Appellants contended that the relief of specific performance is discretionary and equitable in nature, and given the significant passage of time and escalation in property value, granting such relief had become inequitable. They further argued that the plaintiff failed to prove continuous readiness and willingness, a mandatory requirement under Section 16(c) of the Specific Relief Act, 1963 and that the alleged cash payments were unreliable as they were made to an unauthorised person. It was also submitted that the plaintiff’s failure to step into the witness box should attract an adverse inference. Additionally, they challenged the High Court’s refusal to interfere under Section 100 CPC, arguing that material factual inconsistencies warranted reconsideration.
Contentions of the Respondent:
On the other hand, the Respondents argued that the agreement to sell was admitted and duly proved, including the extension of time and payments made. The counsel emphasised that readiness and willingness were demonstrated through documentary evidence, including notices and presence before the Sub-Registrar. They further contended that the testimony of the plaintiff’s manager sufficiently established the case, thereby rebutting any adverse inference. Importantly, they invoked the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882, asserting that any transfers made during the pendency of litigation would be subject to the final outcome and cannot defeat their rights.
Observation of the Court :
The Supreme Court strongly reaffirmed the limited scope of interference in second appeals under Section 100 of the Code of Civil Procedure, 1908, observing that “It is settled in law that the findings of fact howsoever erroneous, cannot be reopened and disturbed in second appeal…”
The Court upheld the factual findings of the first appellate court on readiness and willingness, noting that the plaintiff had duly established his case through notices and conduct that “The plaintiff… had attended the office of the Sub-Registrar… prepared and ready with the balance sale consideration…”
Addressing the objection regarding non-appearance in the witness box, the Court clarified that “The adverse presumption… stands rebutted by the other cogent evidence on record… the non-appearance… would not be fatal in this case.”
On transfers made during litigation, invoking Section 52 of the Transfer of Property Act, 1882, the Court categorically held that “The transfers made during the pendency of the litigation… would be governed by the principle of lis pendens…”
and further concluded that “The sale deeds executed by the defendants during the pendency of the litigation are… non est.”
Decision of the Court :
The Supreme Court found no merit in the appeal and upheld the decree of specific performance. The appeal was dismissed, and the sale deeds executed during the pendency of litigation were declared non est, with rights of the plaintiff affirmed.
Case Title: Russi Fisheries Pvt. Ltd. & Anr. v. Bhavna Seth & Ors.
Case No.: Civil Appeal No. 109 of 2010
Coram: Hon’ble Mr. Justice Pankaj Mithal and Hon’ble Mr. Justice Prasanna B. Varale
Advocate for the Appellant: Sr. Adv. K. Parameshwar (argued by), Adv. Nina Nariman, Adv. Manish Gandhi, AOR Dhiraj Abraham Philip, Adv. Febin Mathew Varghese, Adv. Prasad Hegde, Adv. Veda Singh, Adv. Lija Merin John, Adv. N. Sai Kaushal, Adv. Soyarchon Khangrah.
Advocate for the Respondent: Sr. Adv. Pawanjit Singh Bindra (argued by), AOR Sriharsh Nahush Bundela, Adv. Ketan Madan, Adv. Gurmehar Sistani, Adv. Naveen Kumar Yadav, Adv. Utkarsh Singh.
Read Judgment @Latestlaws.com
Picture Source :
