Smt. Panyam Neelavathi Nelamma vs Gantem Jagadeesh Kumar
2023 Latest Caselaw 2730 AP

      THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

               SECOND APPEAL No.712 of 2018

JUDGMENT:

Defendant before the trial Court filed the Second Appeal

under Section 100 CPC questioning the judgment and decree of

specific performance of an agreement for sale that was granted

by the first appellate Court.

2. O.S.No.589 of 2012 was a suit for specific performance of

an agreement for sale with a further prayer for perpetual

injunction. Respondent herein was the plaintiff and he filed that

suit against the defendant who is the appellant here. After due

trial, learned Principal Junior Civil Judge, Kakinada by a

judgment dated 04.07.2016 dismissed the suit. However, as the

defendant in that suit volunteered to redeposit the sale

consideration she received, the same was permitted and the

plaintiff in the suit was permitted to withdraw the suit amount.

3. Having failed to secure the relief of specific performance,

the plaintiff preferred A.S.No.73 of 2016 before learned IV

Additional District Judge, Kakinada. On considering the

material on record by a judgment dated 13.03.2018 and on

hearing both sides, it allowed the appeal and set aside the

judgment of the trial Court. Learned IV Additional District

Dr. VRKS, J S.A.No.712 of 2018

Judge, Kakinada directed the defendant to execute the

registered sale deed within a time of 60 days with a further

direction to the defendant to put the plaintiff in possession of

the property.

4. Challenging the judgment of the appellate Court, the

defendant preferred this Second Appeal.

5. On 03.06.2019, a learned Judge of this Court admitted

this appeal on the following substantial questions of law:

1) Whether the order of the Frist Appellate Court is perverse, incorrect and ignored the settled law on the subject as it has not considered the entire oral and documentary evidence introduced in the case?

2) Whether there are delays and latches on the part of the plaintiff, which would disentitle him to claim specific performance?

3) Whether the plaintiff has proved his continuous readiness and willingness to perform the contract?

4) Whether the purchasers of the property are also necessary and proper parties to the suit?

5) Whether a simple suit for specific performance alone is maintainable when the plaintiff is aware of the alienation of the property prior to the suit and the defendant has gone on record prior to the suit stating that the third party is the true owner of the property?

6) Whether the interpretation based on the terms of Ex.Al agreement are perverse and not as per the law?

Dr. VRKS, J S.A.No.712 of 2018

7) Whether the frame of the suit is correct as the initial legal notice-Ex.A.2 issued on date 24.09.2012 was addressed to two parties but ultimately the suit was filed against one defendant only?

6. Learned counsel on both sides argued this appeal at

length and learned counsel for respondent cited legal

authorities.

7. To appreciate the contentions on both sides, a few facts

are to be noticed.

8. An agreement dated 26.01.2006 between the parties is

the basis of controversy between the parties. The said document

is Ex.A.1. It is an unregistered possessory agreement for sale. It

refers to AC.0.02 cents of vacant site in Survey.No.13/1 of

Akkayapalli Village within the limits of Kadapa Municipal

Corporation of Kadapa District. Recitals in this document

indicate that the defendant holds full title and complete and

peaceful possession and enjoyment of this property and it is

unencumbered and she intended to sell it to meet her family

needs. Total sale consideration is fixed at Rs.80,000/- and the

document further shows that plaintiff/vendee paid the entire

sale consideration and that was acknowledged by the defendant.

Defendant/vendor delivered the possession of property to the

Dr. VRKS, J S.A.No.712 of 2018

plaintiff on the date of that agreement itself. No further time

limits are prescribed and it is agreed between the parties that as

and when plaintiff demands and property could be registered, a

regular registered sale deed could be executed by the defendant

at the expenses of the plaintiff.

9. It is based on that agreement for sale, plaintiff laid the

suit. Prior to the institution of the suit, plaintiff got issued

Ex.A2 notice dated 24.09.2012 and the defendant received it

and issued a reply notice dated 10.08.2009 as per Ex.A.3. In

her written statement, defendant admitted receipt of full sale

consideration of Rs.80,000/- with reference to the sale of

property but stated that she did not know the contents of

Ex.A.1 agreement for sale but she affixed her thumb mark on it.

She claims to be illiterate. The main plank of the defendant is

that she did not own the property and the property is owned by

Kadapa Diocese Society and that society executed a registered

sale deed in favour of two minor children of this very defendant.

Since defendant does not have title, the suit is not

maintainable.

Dr. VRKS, J S.A.No.712 of 2018

10. It is also pleaded that by Ex.A.3 reply notice and even

earlier to that defendant has been informing the plaintiff that

she had no title and would not execute a sale deed and was

prepared to refund the sale consideration she had received from

the plaintiff. However, plaintiff had sued her unnecessarily and

therefore, the suit shall be dismissed.

11. On these rival pleadings, learned trial Court settled the

issues for trial as mentioned below:

1.Whether the agreement of sale dated 26.01.2006 is true, valid and binding on the defendant?

2.Whether the defendant can be directed to execute regular sale deed in favour of the plaintiff in respect of suit schedule property as prayed for?

3.To what relief?

12. In support of their respective claims, plaintiff testified as

PW.1 and got examined and independent witness as PW.2 and

got marked Exs.A1 to A4. Defendant testified as DW.1 and got

marked Ex.B.1.

13. After considering the evidence on record and the

arguments on both sides, the learned trial Court recorded that

Ex.A1 agreement for sale dated 26.01.2006 is genuine and is

proved. Though Ex.A.1 discloses that defendant delivered

Dr. VRKS, J S.A.No.712 of 2018

physical possession of the property to the plaintiff under that

document itself, the learned trial Court on considering the

evidence of PW.2 held that possession of the property was not

with the plaintiff but the possession of the property was with

the defendant by the date of suit.

14. It refused to grant specific performance despite the fact

that Ex.A1 is proved as in its view there is cloud over the title of

the suit schedule property and plaintiff failed to clear that cloud

and as per Exs.A2 and A3 notices exchanged between the

parties, it is clear that even before filing the suit, plaintiff had

knowledge about third party's claim over this property and the

Kadapa Diocese Society executed the sale deed in favour of the

minor children of this defendant and since the plaintiff did not

make Kadapa Diocese Society and the minor children of the

defendant as parties to the suit, the learned trial Court felt that

it could not grant specific relief and therefore it dismissed the

suit. Though it dismissed the suit, it made a record stating that

defendant filed an application expressing willingness to deposit

Rs.80,000/-, she had received from the plaintiff under Ex.A1

and therefore defendant was permitted to deposit that amount

in the Court and plaintiff was permitted to withdraw the same.

Dr. VRKS, J S.A.No.712 of 2018

15. When the matter was carried to the first appellate Court,

the learned first appellate Court emphatically recorded its

disapproval of the trial court's judgment stating that the law as

enunciated by the superior Courts hold that in a suit for specific

performance filed by a vendee as against a vendor, the vendor is

prohibited from pleading defect in title and in the case at hand,

the trial Court failed to comprehend this principle properly and

therefore it set aside the trial Court's judgment. Accordingly, it

granted the relief of specific performance to the plaintiff.

16. Learned counsel for appellant very fervently argued that

the prohibition for a vendor is only about defect in title but not

about absence of title. Learned counsel submits that the law

prohibits a vendor from pleading defect in title in a suit for

specific performance, but there is no principle prohibiting the

vendor from pleading total absence of title and in the case at

hand it is, according to the learned counsel, total absence of

title. It is on this dimension of the argument, the learned

counsel seeks to set aside the judgment of the learned first

appellate Court. As against this the learned counsel for

respondent/plaintiff argued that appellant has no legal basis to

distinguish absence of title and defect of title and the defect in

Dr. VRKS, J S.A.No.712 of 2018

title may be in part or may be in full and therefore there is no

distinction between defect in title and absence of title. Learned

counsel further states that only when vendor sues for specific

performance, the vendee can put forward the defence of defect

of title or absence of title in the vendor and therefore his refusal

to purchase the property. On the other hand, in a suit filed by

vendee as against the vendor seeking for specific performance,

the vendor is precluded by law from pleading defect of tile or

absence of title. It is in this regard, learned counsel for

appellant cited precedent.

17. In the case of Abdul Hakeem khan v. Abdul mannan

kadhar1 Hon'ble Division Bench of this Court while dealing

with a suit for specific performance, recorded the principle of

law stating that if a person executes an agreement to sell the

property, the vendor is not entitled to put forward, in a suit for

specific performance by the purchaser the defence that the

vendor had no title. It is open to the purchaser to set up a

defence that the vendor had no title or has defective title in a

suit for specific performance by the vendor. But the vendor

AIR 1972 AP 178(DB) 1

Dr. VRKS, J S.A.No.712 of 2018

cannot setup defect in his own title as the defendant in a suit

for specific performance filed by the purchaser.

18. In the case of Kasthuri v. Iyyamperumal 2the question

that was involved before their lordships was:

Whether in a suit for specific performance of contract for sale instituted by a purchaser against the vendor, a strange or a third party to the contract, claiming to have an independent title is entitled to be added as a party defendant in the suit. Their lordships held that it is impermissible to add any such third party in a suit for specific performance existing between parties to the agreement. Their lordships further held that even if the purchaser had knowledge of claim of third parties about their own title, the purchaser is entitled to sue the vendor seeking for specific performance of the agreement for sale and it is his risk and non-addition of those others as parties to the suit has absolutely no bearing on the maintainability of the suit. The question that is to be decided in a suit for specific performance of the contract for sale is to the enforceability of the contract entered into between the parties to the contract. The scope of the suit cannot be enlarged by practically converting it into a suit for title.

19. As against these principles cited by the learned counsel

for respondent, no contrary legal authorities are cited by the

learned counsel for appellant. It is in the light of the existing

legal principles, now the judgments of the Courts below are to

[2005] 3 SCR 864 [FB],

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be examined for the substantial questions of law that were

framed by this Court.

20. The oral and documentary evidence adduced on both

sides and findings recorded by the both courts below, bring out

the following undisputed aspects of the matter.

In Ex.A1 agreement for sale, this appellant disclosed that

she has been the absolute title holder of the property and she

has been in absolute possession and enjoyment of the property

and she has also mentioned that title and possession are

undisputed and are unencumbered. It was this supposition with

which she convinced the respondent/plaintiff and received the

entire sale consideration of Rs.80,000/- from him and thereafter

as she did not execute the regular registered sale deed that

forced the plaintiff to sue her. This Ex.A1 does not indicate the

source of her title. It is this agreement for sale that was in

dispute before the Courts below. Evidence on record does

indicate that earlier to the institution of the suit itself

respondent/plaintiff gained the knowledge that the

defendant/appellant is disowning the title and contending that

title is vested with a third party. According to the trial Court

Dr. VRKS, J S.A.No.712 of 2018

when the title is vested with a third party, the suit for specific

performance for a purchaser against the vendor is not

maintainable. According to learned first appellate Court that is

incorrect approach and that in a suit for Specific performance,

the vendor is debarred from pleading and proving, defect in her

own title.

21. Section 19 of the Specific Relief Act,1963 provides relief

against parties and persons claiming under them by subsequent

title. As per this provision, suit for specific performance would

lie between the parties to the agreement or persons deriving

rights and interests from the parties. A contract constitutes a

right and regulates liabilities of the parties. A stranger to the

contract is not entitled to the rights and is not subjected to the

liabilities which arise out of the contract between others.

According to Ex.A3 reply notice of defendant/appellant and as

per her evidence as DW.1, she had no title in this property.

Thus, she pleaded she had no title in the property. In her

evidence she brought on record Ex.B1 which is a certified copy

of registered sale deed dated 06.08.2012 which came into

existence earlier to the institution of the suit (plaint was filed on

06.11.2012). This is not a document in which this

Dr. VRKS, J S.A.No.712 of 2018

appellant/defendant is a party. This is a document between

persons, who are not parties to Ex.A1 agreement for sale. Under

this Ex.B1 Kadapa Diocese Society seems to have executed the

conveyance in favour of two minor children. It seems the

present appellant is guardian mother of those minor children

and it is for that purpose a reference is made about her in the

document. Thus, the case of the defendant/appellant is total

absence of title in her. Despite the fact that she had no title at

all and knowing that she had no title, she executed Ex.A1

agreement for sale claiming full title in her and convinced the

respondent/plaintiff to pay her Rs.80,000 towards full

consideration and received such money from him and now when

she failed to register the regular sale deed and when the

respondent/plaintiff was demanding her, she started telling him

that she would not execute the sale deed as she was not the

owner of the property. When an agreement for sale has brought

into a dispute in a Court of law, one party to it as against the

other party to it, it is a suit on contract and nothing else. As the

findings of the Courts below and the evidence on record indicate

this Ex.A1 contract was validly executed the parties to it are

competent to execute and they executed this with all knowledge

Dr. VRKS, J S.A.No.712 of 2018

of it. It is only to carry out the intendment of the terms of this

contract, the suit for specific performance is made available as a

remedy. It is that remedy the respondent/plaintiff pursued. It is

in such cases where defect of title or absence of title is pleaded

by the vendor. The law has been laid down stating that absence

of title or defect of title are pleas that are not available for the

vendor. There has been no ambiguity in this principle. As seen

from the precedent recorded in the earlier paragraphs of this

judgment that a purchaser even if he is aware that the title is

under cloud between third parties to the agreement and the

vendor, he can ignore the same and take the risk of suing for

specific performance making vendor alone as party to the suit.

Be it noted, even according to Ex.B1 both parties to Ex.B1 have

never traced their title through this appellant/defendant.

Therefore, they are strangers claiming title independently. They

are not claiming title through appellant/defendant. Therefore,

whether it is the title of those strangers that is true and valid or

whether it is the title of this appellant/defendant that is valid

and true is a matter between them and at any rate that cannot

be a matter for decision when the suit is only on an agreement

for sale between the parties to the agreement and not others.

Dr. VRKS, J S.A.No.712 of 2018

Since parties under Ex.B1 have never derived their title

through this appellant, their non joinder in the suit or in

subsequent proceedings has no legal consequences. This

answers question numbers 4,5,6 and 7 which are framed in the

Second Appeal.

22. About the evidence available on record, there has been no

controversy. Finally, before both the Courts below entire dispute

revolved around maintainability of the suit in the context of title

dispute. It is that aspect of the matter on which learned first

appellate Court gave its reasons and reached to a decision.

One does not find very elaborate discussion of oral and documentary evidence as it turned out that on the proven facts on both sides, adjudication could be made.

One could not find fault with the approach adopted by the learned first appellate Court.

This answers question No.1 raised in the Second Appeal.

23. Ex.A1 agreement for sale dated 26.01.2006 in its terms do

not indicate any time lines fixed between the parties. It is proved

that the entire sale consideration agreed between the parties

was paid by the respondent/plaintiff to the

defendant/appellant. No other obligations remained with the

purchaser except expending money for stamps and registrations

Dr. VRKS, J S.A.No.712 of 2018

and obtaining registered sale deed from the vendor. Averments

in plaint, evidence of PW.1 indicate constant efforts were put by

plaintiff requesting the defendant to do the needful. It is never

the case of defendant that the vendor who paid the entire sale

consideration was unable to expend money towards stamp and

registration. Evidence also indicated that the vendor is a teacher

earning salary. The suit was filed soon after refusal of defendant

expressed through Ex.A3 reply notice. It was never the

contention of parties that the suit was barred by limitation.

There was no issue also on that. One argument sought to be

made by the vendor has been that while the agreement is of the

year 2006 the suit was filed in the year 2012 and therefore there

are laches on part of vendor. According to the vendor, she

herself is in possession of the property. Thus, looking from the

vendor's point of you/appellant's point of you, she held the

possession over the property. She received the entire sale

consideration. Thus, she had no hurriedness or anxiety. By her

own saying she has been telling the purchaser about the title in

others etc., and it is in that way she dodged the matter. It seems

despite best efforts, plaintiff was unable to convince her and

after waiting for some time, he issued Ex.A2 notice. The

Dr. VRKS, J S.A.No.712 of 2018

defendant had come up with her reply in Ex.A3. Throughout

those six years period between Ex.A1 and Ex.A2, the defendant

never issued any notice to plaintiff, cancelling the agreement for

sale and never handed over or tendered refund money except

telling him orally about all that. These facts do indicate, by her

words she was forcing the plaintiff to wait for some more time

and nothing else. One could not find any defence of

abandonment of rights on parts of the vendor and there was no

decision on it by both the Courts below. In the light of the

pleadings on both sides, one does not find any particular laches.

At any rate, there was no effort on part of this appellant during

the course of hearing of first appeal anything about laches. On

consideration of the total facts and circumstances this Court

does not find any unnecessary delays or laches on part of the

vendor in reaching the Court praying for a relief. Since it is seen

that even according to defendant by her pleadings and evidence,

she and the plaintiff have been in conversation with each other

about taking Ex.A1 to the next level or not and since there is

enough pleadings and evidence of PW.1 about readiness and

willingness on part of the plaintiff and translating the readiness

and willingness in the form of Ex.A2 notice and in the context

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of undisputed fact of financial capability for vendor to bare the

registration and stamp expenses, one cannot say that at any

point of time, the vendor was either not ready or not willing to

have Ex.A1 realised through a registered sale deed. All this

answers question Nos. 2 and 3 in the Second Appeal.

24. For the reasons mentioned above, it is recorded that the

judgment of the learned first appellate Court which is impugned

in the Second Appeal is right on facts of law. There is no merit

in the Second Appeal. All the questions are answered.

25. In the result, this Second Appeal is dismissed confirming

the judgment and decree dated 13.03.2018 of learned IV

Additional District Judge, Kadapa in A.S.No.73 of 2016. There

shall be no order as to costs.

26. As a sequel, miscellaneous applications pending, if any,

shall stand closed.

_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date:02.05.2023.

DVS

Dr. VRKS, J S.A.No.712 of 2018

THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

SECOND APPEAL No.712 of 2018

Date: 02.05.2023

DVS