The single judge bench of the Andhra Pradesh High Court held that constituting acquiescence or waiver must be established that though a party knows the material facts and is conscious of his legal rights in a given matter but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him.
Brief facts
The factual matrix of the case is that Defendant No. 1 acquired Schedule ‘A’ property through an auction conducted by the State Financial Corporation. The said property was leased out to the husband of the 1st plaintiff for a term of 5 years. Thereafter, Defendant no. 1 sold the undivided and unspecified share of the 'A' schedule property to the 1st Plaintiff through a registered sale deed. The transaction involved a sale consideration of Rs.9,75,000/-, received in the form of a cheque and Rs.25,000/- in cash, following which possession of the property was transferred to the Plaintiffs. Furthermore, during the time of the execution of the sale deed, the 1st Plaintiff committed to offering the remaining half of the 'A' schedule property, referred to as the 'B' schedule property, to the Plaintiffs whenever a sale was intended. However, Defendant No. 1 gifted the ‘B’ Schedule property to Defendant No. 2. Aggrieved by this, Plaintiff filed the suit seeking primary relief of Specific Performance of pre-emption condition incorporated in the registered sale deed with a request to direct the Defendants to execute a regularly registered sale deed regarding suit ‘B’ schedule property, after receiving the consideration amount. The learned trial court decreed the suit and directed Defendants 1 and 2 to execute a regular sale deed in favor of the 1st Plaintiff or her nominee in respect of 'B' schedule property, by receiving consideration of Rs.15,82,650/- with interest @ 7.5% p.a.
Therefore, the present appeal is filed by the Defendants under Section 96 of the Code of the Civil Procedure challenging the decree and judgment passed by the learned trial court.
Contentions of the Appellants/Defendants
The Appellants contended that without taking into account the Defendants' version, the decree of specific performance cannot be granted mechanically. It was furthermore contended that Plaintiff obtained a lease from Defendant No. 2 after the gift deed was made in favor of Defendant No. 2 by Defendant No. 1. Therefore, Plaintiff can’t question the validity of the gift deed.
Observations of the court
The Hon’ble Court observed that a party that has filed a suit against the defendants, claiming a right of pre-emption and contesting the execution of the gift deed, and that party has entered into a registered lease deed acknowledging the ownership of the first defendant, cannot reprobate or probate while the suit is pending. Notably, the Plaintiffs have not entered into a registered lease deed subject to the outcome of the present suit. The right of defendant No. 2 over the scheduled property was acknowledged by the plaintiffs during their suit, and they are not allowed to contest that right before this court.
It was furthermore observed that a legally enforceable right must be waived in a clear, unambiguous, and fully aware of the implications manner in order to be deemed legitimate. In order to prove waiver, it will have to be established that a party expressly or by its conduct acted in a manner inconsistent with its rights. In fact, a party's refusal to take the objection does not always and always imply waiver. Only until it has been demonstrated that the party was aware of the pertinent details and his entitlement to raise the objection in issue can the waiver be presumed.
The court relied upon the judgments titled Krishna Bahadur v. Purna Theatre, and Power Control Appliances v. Sumeet Machines (P) Ltd.
The court noted that no reason was given as to why they had entered the registered lease deed transaction during the pendency of the suit. Also, a waiver under duress, coercion, or undue influence would be considered invalid. It is not the Plaintiffs' case.
Based on these considerations, the court was of the view that the execution of the registered lease deed between Plaintiff and Defendant No. 2 can be considered a waiver as it is a voluntary and intentional relinquishment of rights.
The decision of the court
With the above direction, the court allowed the appeal in part.
Coram: Hon’ble Mr. Justice T. Mallikarjuna Rao
Case No.: APPEAL SUIT NO.325 OF 2010
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