Chattisgarh High Court
Lalan Singh vs Balram Kerketta on 21 October, 2022
1
AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Judgement delivered on : 21/10/2022
FA No. 26 of 2018
Lalan Singh S/o Parmeshwar Singh, at present aged About 36
Years, R/o Village Shivnandanpur, P.S. And P.O. Bishrampur,
District Surajpur, Chhattisgarh
---- Appellant
Versus
1. Balram Kerketta S/o Late Manglu Kerketta, Aged About 48
Years, ...............Defendant No.1(a)
2. Tiwari Kerketta S/o Manglu Kerketta, Aged About 46
Years ...............Defendant No.1(b)
3. Nehru Kerketta S/o Late Manglu Kerketta, Aged About 44
Years, ...............Defendant No.1(c)
4. Nanki Kerketta S/o Late Manglu Kerketta, Aged About 42
Years, ...............Defendant No.1(d)
5. Madan Kerketta S/o Late Manglu Kerketta, Aged About 40
Years, ...............Defendant No.1(e)
6. Mohna Kerketta S/o Late Manglu Kerketta, Aged About 37 Years,
.............Defendant No.1(f)
Res. no.1 to 6 are R/o Village Khairbar Mohalla, Karaundha, P.S. And P.O.
Ambikapur, District Surguja, Chhattisgarh
Manglu S/o Ladi (died)----Def. No.1
7. Sujit Singh S/o Somaru Singh, Aged About 28 Years R/o
Mominpura, Near Harsagar Pond, Ambikapur, P.S. And P.O.
Ambikapur, District Surguja, Chhattisgarh ..............Defendant No.2,
8. State Of Chhattisgarh, Through Collector Surguja, Ambikapur,
District Surguja, Chhattisgarh .............Defendant No.3
---Respondents
For appellant - Ms. Priyanka Mehta, Advocate.
None for respondents No.1 to 6 despite service of notice.
For respondent No.7 - Shri Sunil Tripathi and Shri Apoorv Tripathi,
Advocates.
For State/respondent No.8 - Shri Neeraj Pradhan, PL.
2
Hon'ble Shri Justice Goutam Bhaduri &
Hon'ble Shri Justice Radhakishan Agrawal
CAV Judgment
Per Goutam Bhaduri, J.
Heard.
1. This appeal is against the judgement and decree dated 7 th October,
2017 passed by the Court of District Judge, Ambikapur in Civil Suit No.
A/14/2011 wherein suit filed by the appellant/plaintiff seeking specific
performance of contract as also for cancellation of sale deed made in
favour of Sujit Singh (defendant No.2)respondent No.7 herein be declared
null and void and agreement for sale dated 23/08/2010 be executed for
enforcement of sale deed in his favour.
2. The brief facts of this case as pleaded is that the plaintiff Lalan
Singh entered in to an agreement with late Manglu for purchase of land
bearing khasra No.273, 289, 290, 287 & 288 admeasuring 0.121, 0.299,
0.166, 0.214 & 0.146 respectively total five plots, total area 0.946 hectare
for a consideration of Rs.16 lakhs. The agreement Ex.P-1 was executed
on 23rd August, 2010. The agreement was registered with Sub Registrar
office. The plaintiff contended that out of sale consideration of Rs.16
lakhs, Rs.5 lakhs was paid as earnest money. The plaintiff contented that
16 point form was required to be submitted as per the norms of the State
Government to get the sale deed registered, the same seller was required
to obtain. The seller further agreed that in case of death of anyone, the
legal heir would be bound to execute the sale deed and whenever the sale
is required, the sale would be made in favour of the plaintiff. The plaintiff
contended that 16 point form was not supplied to the plaintiff for
registration of the sale deed and when he enquired from the respective
Patwari, the same was said to have been already obtained by the seller.
The plaintiff contended that on different dates i.e. on 26/05/2011,
6/06/2011 and 28/06/2011 the plaintiff wanted to get the sale deed
registered and contacted the respondent but the respondent was not found
at his home, eventually the sale deed could not be registered. It was
stated that the defendant was avoiding the execution of sale deed, had at
the same time obtained the 16 point form and sold it in favour of defendant
No.2 Sujit Singh for a consideration of Rs.16 lakhs on 29/04/2011. Plaintiff
therefore contended that since earlier agreement was existing and the
plaintiff was ready and willing to perform his part of contract, the sale deed
executed in favour of defendant No.2 be declared as null and void and
without any effect and prayer was made that sale be executed in favour of
the plaintiff as per the agreement.
3. Manglu the original seller filed his written statement and denied the
execution of agreement and all the plaint averments were also denied.
Since execution of the agreement was denied, consequently receipt of
earnest money of Rs.5 lakhs was also denied. In the additional pleading,
defendant No.1 contended that the agreement was outcome of fraud and
defendant Manglu being an illiterate and at the instance of one Raj Thakur
he was told that he was to stand as a witness in a transaction, therefore he
went to the Sub Registrar Office and taking advantage of it, the signature
were obtained on the agreement of sale. It was further contended that the
defendant Manglu had not received any amount by way of earnest money
and the agreement was outcome of fraud. It was further contended that
despite the fact the agreement though was outcome of fraud, the
execution was not carried out within the stipulated time, therefore the
agreement had lost its efficacy. Averments were made that the sale deed
as sought to be executed was at instance of Sanjay Agrawal who was
dealing in the business of sale and purchase of the land therefore
presence of Raj Thakur, a broker of land was recorded therefore the
execution of the agreement is doubtful.
4. Defendant No.2 the purchaser contended that he had no knowledge
about existence of earlier agreement of sale and he first time came to
know of such fact when he received the summons from the court. It was
further contended that after the terms of sale were settled, the said
purchase was made by him, the defendant No.2, so he was a bona fide
purchaser. It was further contended that the sale deed was not executed
within the stipulated period of time, as such the earlier agreement had lost
its efficacy as the plaintiff did not show any willingness to get the sale deed
executed. Consequently, the defendant No.2 was the purchaser who
purchased the land for a valuable consideration.
5. On the basis of the pleading, the learned trial court framed 9 issues.
Primarily issue No.1 and 2 were with respect to whether the agreement of
sale was executed in respect of subject land on 23/08/2010 for a sale
consideration of Rs.16 lakhs and whether Rs.5 lakhs whether was paid as
earnest money. The Court gave its finding in negative. With respect to the
issue of readiness and willingness, the court held that it is not been
proved. For the subsequent sale deed dated 29/04/2011 in respect of
issue No.5 and 6, the Court held that the sale deed dated 29/04/2011
cannot be said to be nullity and it was found that the defendant No.2 was
found to be bona fide purchaser of the property in concern. Further the
court at issue No.8 held that whether the plaintiff taking the advantage of
defendant's illiteracy, got the forged agreement dated 23/08/2010
executed, it held in negative and eventually the suit was dismissed.
Therefore, present appeal by the plaintiff.
6. Learned counsel for the appellant would submit that Ex.P-1
agreement dated 23/08/2010 was a registered agreement and sale
consideration was fixed to Rs.16 lakhs and out of it Rs.5 lakhs was paid as
earnest money. She would submit that though the agreement has been
said to be outcome of fraud and the defendant No.1 signed it as a witness
but such contention was contradicted by submission of the defendant No.1
Manglu itself. It is stated that if at one point of time it is stated that
agreement was fraud, then alternately the defence raised that the time
was essence of the contract simultaneously, cannot be entertained. It is
stated no averments have been made to deny the readiness and
willingness of the plaintiff. She further submits that written statement of
DW-2 Sujit Kumar the subsequent purchaser, similar contradictory
statement have been made that at one point of time it is said that he was
not aware of earlier existing agreement dated 23/08/2010 but in the
examination and cross-examination it would reflect that the agreement
was very well within his knowledge i.e. defendant No.2. Therefore it is
stated the subsequent purchaser was aware of the fact that earlier
agreement was existing in respect of the same property.
7. Referring to the suggestion given to the witness, counsel would
submit that many admissions were made and though it was tried to be
suggested that the transaction was benami but no pleading to this effect is
on record. She further relies on (2015) 3 SCC 138 in between Vinod
Kumar Vs. State of Haryana to submit that payment of Rs.5 lakhs which
was statement made in chief was never challenged in the cross-
examination and in absence of any cross-examination the submission
would be admissible. It is further stated that the defendant No.1 who died
during the pendency of the suit but subsequently his legal heirs did not
enter in the witness box, so adverse inference is required to be drawn as
per the law down in (2021) 2 SCC 718 in between Iqbal Basith & others
Vs. N. Subbalakshmi & others. She further would submit that neither the
financial capacity nor readiness and willingness to perform his part of
contract were challenged and only some traces in the cross-examination
were tried to be shown which cannot be taken to be full proof fact that the
plaintiff was not ready and willing to fulfill his part of contract. It is further
submitted that until 16 point form is obtained, the sale deed could not have
been registered. It is stated this form was not obtained by vendor Manglu
so initially he did not perform his part of contract. It is contended therefore
the specific word in the agreement existed as and when the sale deed
would be executed was dependent on obtaining the 16 point form would
mean to show that the time was not the essence of contract.
8. Referring to certain suggestion made to the PW-2, it is contended
that amount of Rs.5 lakhs was paid to one Raj Thakur would mean to
show the existence of contract. Referring to the statement of defence, it is
stated that defendant No.2 though claimed to be bona fide purchaser at
one time however he has raised a defence that the time was essence of
contract so such plea could not have been developed unless and until the
defendant No.2, the subsequent purchaser was in know of the fact of
existence of earlier agreement in respect of the same subject property
with the plaintiff. Referring to subsequent sale deed Ex.D-1 it is further
submitted that 16 point form while was issued, the original seller was
aware of the fact and information was sought for about sale consideration
and the said form was obtained wherein Manish Kumar is a witness and
he was witness to the subsequent sale deed too, therefore the defendant
No.2 cannot claim that he was not aware of the fact that earlier agreement
existed. She therefore would submit that the finding arrived at by the
learned court below therefore is completely perverse and is liable to be
set aside.
9. Per contra, learned counsel for respondent No.7 would submit that
the Ex.P-1 which is an agreement on which the plaintiff/appellant claim his
right is doubtful. It is stated there is no averment in the plaint is made
about role played by one Raj Thakur though he is a party to agreement
and the contents would read to show that it was executed on 23/08/2010.
It is stated six months time as agreed in agreement came to an end on
23/02/2011. It is stated therefore the sale deed in favour of defendant No.2
after 6 months of time was executed and since he had no knowledge of
agreement it would mean that status of purchaser was bona fide, as the
sale to respondent No.7 was on 29/04/2011. The counsel would submit
that there is no allegations against respondent No.7 (defendant No.2) that
knowing full well that earlier agreement is existing, he purchased the land.
It is stated as per averments of the plaint itself, the respondent No.7
(defendant No.2) was a bona fide purchaser. The counsel would further
submit that the plaint averments further do not show that respondent No.7
(defendant No.2) was in know of the fact about any existence of
agreement for sale. Referring to the statement of PW-1 he would submit
that he admitted the fact that the defendant is the sole owner and he is in
possession which the defendant No.2 had purchased and in absence of
any pleading that the defendant No.2 was in know of the earlier existence
of contract, the evidence cannot be looked into. He placed his reliance
(2011) 12 SCC 695 in between National Textile Corporation Limited
Vs. Naresh Kumar Badrikumar Jagad & ors. and (2012) 8 SCC 148 in
between Union of India Vs. Ibrahim Uddin and another to submit that
particular pleading would be necessary and the parties cannot be allowed
to travel beyond their pleading.
10. He would further submit that respondent No.7 (defendant No.2) was
bona fide purchaser and since the plaintiff failed to comply his part of
contract within the stipulated time as such the purchase made by the
defendant No.2 after expiration of the period would be saved under
Section 19(b) of the Specific Relief Act, 1963 (hereinafter referred to as
'the Act of 1963') He refers to (2015) 8 SCC 695 in between
Padmakumari & ors. Vs Dasayyan & ors. He further submits that
perusal of the 16 point form which is enclosed in the subsequent sale
deed, no date is shown and if it is seen alongwith the Ex.P-1 the
agreement, the agreement did not disclose the condition that after
obtaining the permission of 16 point form sale deed would be executed.
Therefore the agreement did not contain any clause of execution of sale
deed after the 16 point form is availed consequently obtaining such 16
point document was not a condition precedent. Referring to statement of
the defendant No.1 he would submit that the non-existence of the
agreement as has been held by the learned trial court is well merited qua
the reason that the defendant Manglu who was illiterate man was made to
sign the document but receipt of Rs.5 lakhs sale consideration by him has
not been proved as the witness PW-2 has stated that the amount was paid
before the Registrar but the Ex.P-1 do not support the same.
11. The counsel would further submit that the plaintiff when contended
that amount was paid, the burden would be on him to prove the same and
he relies on (2011) 12 SCC 220 in between Rangammal Vs.
Kuppuswami & anr. and (2004) 9 SCC 468 in between Krishna Mohan
Kul alias Nani Charan Kul & Another Vs. Pratima Maity & others. He
would submit that by whom the amount was given who has received it is
all ambiguous. Therefore, in the circumstances very existence of the
agreement though registered, payment of consideration is not proved, in a
result the order of the learned court below do not require any interference.
12. We have heard learned counsel appearing for the parties, perused
the record and the evidence.
13. As per the plaint allegation and the agreement Ex.P-1 a property
was agreed to be sold by the defendant Manglu in favour of Lalan Singh
bearing khasra Nos. 273, 287, 288, 289, 290 total admeasuring 0.946
hectare for a sale consideration of Rs.16 lakhs. The agreement purports
Rs.5 lakhs was received as an earnest money. The said agreement is
registered. The registration is proved by witness PW-3 Devendra Kumar
Sahu the person from office of Sub Registrar. The contents of the
agreement Ex.P-1 read with statement of Lalan Singh PW-1 would show
that amount of Rs.5 lakhs was paid out of total consideration of Rs.16
lakhs and Rs.11 lakhs was agreed to be paid at the time of execution of
the sale deed. The agreement contains presence of one Raj Thakur as a
consenting party who had given the consent to such sale.
14. The witness PW-1 in his statement averred that in the said
agreement dated 23/08/2010, before him Manglu had scribed his thumb
impression, thereafter Raj Thakur had signed the same. A specific
question was put to PW-1 that how Raj Thakur came to be a party to
Ex.P-1. Explaining the same it was stated that Manglu had brought Raj
Thakur with him for reason that over the subject land he was in
possession. Therefore to get his consent his signature were obtained on
agreement of sale. In the written statement of defendant No.1 the original
seller had denied the execution of the agreement Ex.P-1. In the additional
pleading it is stated that the agreement is outcome of fraud and actually no
agreement was executed. He stated that he was persuaded to go to
Registrar office to put his thumb impression as a witness in some
document but instead the said agreement was got signed. He further
stated that the said agreement has been scribed to take over the land of
defendant. At para 19 of the written statement further defendant No.1
(since dead) further stated that the time was essence of contract in such
sale agreement. The witness PW-1 to the agreement had proved the
signatures and would be a primary evidence. The signatures on document
were proved to have been scribed coupled with the fact it was registered
with Sub-Registrar. So mere defence to say no such agreement was
executed cannot be given a precedence over a registered document
unless proved otherwise by cogent evidence. Further the question comes
to fore if the agreement was said to be outcome of fraud, at the same time
how the plea can be entertained that the time was essence of contract.
15. PW-1/plaintiff in his statement para 22 stated that in order to solve
the dispute he got the signature of Raj Thakur as he was in possession
over the said land. This appears to be logical to infer in case of purchase,
the purchaser would like to purchase a land without any dispute. Therefore
nothing unusual appears to hold to draw any adverse inference only
because of signature of third party was taken on agreement for the reason
he was shown to be in possession on part of land.
16. It was also stated that plaintiff has sufficient means as he had a
business of utensils and would pay amount from the income generated
from ancestral land about 25 acres from which he had received the
amount. The cross-examination to PW-1 at para 20 the suggestion was
given that according to the agreement the registry was to be executed
within six months from 23/08/2010, therefore the inference would be that if
at the one hand defence is raised that agreement is out come of fraud,
then the suggestion in cross examination that the time was essence of
contract would show by implication the existence of agreement was
substantiated as both the plea were mutually destructive. Further the
suggestion was given that registry could not be done within 6 months. At
the same time it is stated because of fact Mangul could not get 16 point
document as such registry could not be made. Further the witness stated
after 16 point form was obtained Manglu was selling it to Sujit Singh. So
the evidence as has come would show Manglu could not execute the sale
for want of 16 point document shows that execution of sale was dependent
on obtaining the 16 point document to infer that time was not the essence
of contract. The affiliation with one Vinod Agrawal and Sanjay Agrawal
though was suggested but was denied by PW-1.
17. The plaintiff further at para 4 and 7 has contended that after the
agreement, in order to execute the sale deed, 16 point document was
required to be obtained for registration of sale-deed. In the examination-in-
chief, PW-1 at para 8 stated that though the agreement to execute the sale
deed was for six months but it was interdependent on the fact that on
receipt of 16 point document sale-deed could be executed. It was further
stated the 16 point document could not be obtained by seller as such sale
deed could not be executed. He further stated that thereafter he tried to
contact patwari on 10/05/2011 when he came to know that 16 point
document was already obtained, thereafter he served a notice to the
respondent Manglu on 19/05/2011. In the cross-examination at para 21 he
further stated that because of the fact 16 point document could not be
obtained by Manglu, therefore the Registry could not be done. Further
suggestion when was given to PW-1 that when the sale deed was not
executed within six months despite it he has not taken any steps, in
answer to it the witness volunteered that he had sent the notice. Therefore
the facts would show that sale deed was interdependent on obtaining the
16 point document at the behest of seller. There is no evidence on record
that the seller had sent the notice or intimation to the proposed purchaser
after he obtained document of 16 point. Therefore the evidence on record
suggests that vendor did not perform his part of contract as such the
vendee cannot be held responsible to say that he has not performed his
part of contract.
18. The Supreme Court in the matter of Balasaheb Dayandeo Naik
(dead) & ors. Vs. Appasaheb Dattatraya Pawar reported in (2008) 4
SCC 464 at para 11 has held under:-
11.It is clear that in the case of sale of immovable property, there is no
presumption as to time being the essence of the contract.
8....even where the parties have expressly provided that time is the
essence of the contract, such a stipulation will have to be read along with
other provisions of the contract....., for instance, if the contract were to
include clauses providing for extension of time in certain contingencies or
for payment of fine or penalty for every day or week, the work undertaken
remains unfinished on the expiry of the time provided in the contract, such
clauses would be construed as rendering ineffective the express provision
relating to the time being of the essence of contract."
In the instant case since 16 point document, was to be obtained by
seller and without which the sale-deed could not be registered, in absence
of any evidence that Manglu had informed the plaintiff when such
document was obtained, the period of six months for execution of sale-
deed cannot be treated as the time was the essence of contract.
Accordingly, we hold that the agreement was executed in between the
plaintiff and the erstwhile seller Manglu which is proved as Ex.P-1.
19. When PW-1 the purchaser was cross-examined by respondent
No.7 (the defendant No.2), suggestion was given at para 28 that money of
Rs.5 lakhs though was given to Manglu but no separate receipt was taken.
Thereafter the witness volunteered that he got the agreement registered.
Further suggestion was given that the signature of Raj Thakur was
obtained on the agreement for the reason that he would get the sale deed
executed, as such his signature was obtained. Further suggestion was
given that Raj Thakur is not the owner of land. Further the suggestion was
also made to the witness by the respondent No.7 (defendant No.2) that
after six months of the execution of the agreement despite the fact Manglu
refused to execute the sale deed but the purchaser did not serve any
notice. In answer to it witness volunteered that he had sent the notice but
the same could not be served. The nature of suggestion so given by the
defendants only points out that amount of Rs.5 lakhs was stated to be
given to Manglu. The presence of Raj Thakur is justified for the reason that
he was in possession over part of the land as explained by plaintiff.
Therefore if the existence of execution agreement itself was denied, then
the kind of suggestion would only destroy such defence of defendants to
draw adverse inference of same facts.
20. Apart from the contents of registered agreement Ex.P-1, wherein
payment of Rs.5 lakhs is shown, in the statement of purchaser PW-1
payment of Rs.5 lakhs as a earnest money was stated. However no cross-
examination has been made to challenge such payment of earnest money.
The Supreme Court in the matter of Vinod Kumar Vs. State of Haryana
reported in (2015) 3 SCC 138 has held that when there is no cross-
examination on a factual matrix and that remained unchallenged that
ought to be believed by the court. It further lays down that section 138 of
the Evidence Act confers a valuable right of cross-examining the witness
tendered in evidence by opposite party and the scope of that provision is
enlarged by section 146 of the Evidence Act by allowing a witness to be
questioned;
(1) to test his veracity.
(2) to discover who he is and what is his position in life or
(3) to shake his credit by injuring his character, although the answer
to such questions might tend directly or indirectly to incriminate him
or might expose or tend directly or indirectly to expose him to a
penalty or forfeiture.
21. The defendant No.1 the original seller at one point of time raised a
defence that the agreement is outcome of fraud at the same time raises a
defence that the time was the essence of contract. While the respondent
No.7 (defendant No.2) the purchaser had raised a defence that since
within six months of agreement the sale deed was not executed, and
stated that time was the essence of contract. Further more, suggestion
was made by respondent No.7 (defendant No.2) that the money of Rs.5
lakhs was given to one Raj Thakur would only fortify the existence of a
registered agreement Ex.P-1 and further would go to show transaction
took place in between the parties. It is obvious that when a document is
registered, then in order to shake the credibility of the document
admissible cogent evidence should be brought on record as otherwise the
presumptive value of correctness would follow with the registered
document.
22. Another defence which was raised by witness of purchaser i.e.
DW-1 is that the plaintiff was defacto face of Sanjay Agrawal who primarily
wanted to purchase the land and tried to show that it was a benami
transaction. No pleadings have been made to this effect by either of the
defendants. The witness on behalf of purchaser PW-2 Vinod Agrawal has
deposed about execution of agreement dated 23/08/2010 which was
registered. Narrating the execution process it is stated that first Lalan
Singh had put his thumb impression, thereafter Raj Thakur had signed and
subsequent thereto the Sub- Registrar asked Manglu whether he has
received Rs.5 lakhs and Manglu then admitted to have received Rs.5
lakhs. It is stated after such satisfaction the Sub Registrar had registered
the document. Registration of agreement is proved by the witness PW-3,
the person from the office of Sub Registrar. In a suggestion given by
defendant No.1 to plaintiff that Vinod Agrawal wanted to purchase the land
for himself, the plaintiff denied the same. Another suggestion was given
that Manglu had agreed to sell the land to Lalan, the plaintiff, at the rate of
Rs.5 lakhs, to such suggestion it was replied that it is wrong to say that
agreement to sale was for Rs. 5 lakhs and witness volunteered that it was
for Rs.16 lakhs. The suggestion of benami transaction though was
suggested to PW-2 at para 17 he denied the same. Further at para 22 this
witness further affirmed that on the date of agreement Lalan had paid
Manglu Rs.5 lakhs. Further suggestion was given to him at para 23 which
he denied that Vinod Agrawal and Sanjay Agrawal including Lalan Singh
paid amount of Rs.5 lakhs to Raj Thakur and got an agreement executed
in the name of Manglu. Therefore, if the suggestion is given that amount
was paid to Raj Thakur and Rs.5 lakhs was paid the question of denial of
agreement would be apposite plea which otherwise would prove the
existence of agreement.
23. No witness on behalf of the original seller or his legal heir entered
into witness box to prove his defence. Therefore when such position
arises, the Supreme Court in matter of Iqbal Basith & ors. Vs. N.
Subbalakshmi & ors. reported in (2021) 2 SCC 718 has occasion to deal
with such situation. It held that when the original defendant did not appear
in person to depose, then adverse inference is required to be drawn. At
para 10 of its order the Court held as under:-
"10.In Iswar Bhai C. Patel vs. Harihar Behera, (1999) 3 SCC 457 this
Court observed as follows: (SCC p. 462, para 17)
"17.....Having not entered into the witnes box and having not
presented himself for cross-examination, an adverse presumption
has to be drawn against him on the basis of the principles contained
in Illustration (g) of Section 114 of the Evidence Act, 1872."
24. The defence further has been raised by the original seller that since
16 point document was not obtained and the plaintiff did not show his
capacity of having fund the plaintiff was not ready and willing to perform
his part of contract. The Supreme Court in the matter of (2017) 4 SCC 654
in between A. Kanthamani Vs. Nasreen Ahmed has occasion to interpret
the expression readiness and willingness. It held that while examining the
question as to how and in what manner the plaintiff is required to prove his
financial readiness so as to enable him to claim specific performance of
the contract and the agreement. It is not required always to prove
possession of sufficient money or to vouch a concluded scheme for
financing transaction. The Court at para 24 and 25 held as under:-
"24.The expression "readiness and willingness" has been the subject
matter of interpretation in many cases even prior to its insertion in
Section 16 (c) of the Specific Relief Act, 1963. While examining the
question as to how and in what manner, the plaintiff is required to
prove his financial readiness so as to enable him to claim specific
performance of the contract/agreement, the Privy Council in a
leading case which arose from the Indian Courts (Bombay) in Bank
of India Ltd. Vs. Jamsetji A.H. Chinoy, AIR 1950 PC 90, approved the
view taken by Chagla A.C.J., and held inter alia that
" it is not necessary for the plaintiff to produce the money or vouch a
concluded scheme for financing the transaction to prove his
readiness and willingness."
25. The following observations of the Privy Council are apposite:
(Jamsetji case 1949 SCC On line PC 81
"21..............Their Lordships agree with this conclusion and the
grounds on which it was based. It is true that the plaintiff 1 stated that
he was buying for himself, that he had not sufficient ready money to
meet the price and that no definite arrangements had been made for
finding it at the time of repudiation. But in order to prove himself
ready and willing a purchaser has not necessarily to produce the
money or to vouch a concluded scheme for financing the transaction.
The question is one of fact, and in the present case the Appellate
Court had ample material on which to found the view it reached.
Their Lordships would only add in this connection that they fully
concur with Chagla A.C.J. when he says:
"In my opinion, on the evidence already on record it was sufficient for
the court to come to the conclusion ' that plaintiff 1 was ready and
willing to perform his part of the contract. It was not necessary for
him to ' work out actual figures and satisfy the court what specific
amount a bank would have advanced on the mortgage of his
property and the pledge of these shares. I do not think that any jury--
if the matter was left to the jury in England--would have come to the
conclusion that a man, " in the position in which the plaintiff was, was
not ready and willing to pay the purchase price of the shares which
he had bought from defendants 1 and 2."
For the foregoing reasons, their Lordships answer question(4) in the
affirmative." (Emphasis supplied)"
25. Now coming back to the statement of PW-1 at para 16 in chief he
has stated to have possessed with available fund with him from the
business of utensils and the income of his ancestral property about 25
acres. Further in the cross-examination at para 19 he stated that his father
has sold part of certain land to some one and the money is with him.
Further more when the existence of the agreement is denied by seller, the
defence cannot be entertained that the plaintiff is not ready and willing to
perform his part of contract.
26. The Supreme Court in 2021 SCC OnLine 365 Kadupugotla
Varalakshmi v. Vudagiri Venkata Rao held that when a defence is
raised in the written statement about the non-existence of the agreement,
the defence cannot be entertained that the plaintiff is not ready and willing
to perform his part of contract. Further in Silvey v. Arun Varghese
(2008) 11 SCC 45 the Court held that when a false plea has been taken by
the defendant about the non execution the agreement then the conduct of
the parties would be relevant to exercise the discretion for decreeing the
suit for specific performance. Again in Narinderjit Singh v. North Star
Estate Promoters Ltd (2012) 5 SCC 712, the Supreme Court held that
when a contract itself was denied the defendant could not have raised the
other plea that the plaintiff was not ready and willing to perform his part of
contract. Later, in A. Kanthamani v. Nasreen Ahmed (2017) 4 SCC 654
the Court held that it was not necessary to show that the plaintiff has
money in his account to purchase the property.
27. Further question falls for consideration as to whether the
subsequent purchaser who had purchased the same was bona fide
purchaser and would be protected under Section 19 (b) of Specific Relief
Act of 1963. The purchaser Sujit Singh contended that they had purchased
the property for the reason that the time limit period of contract of sale
executed earlier with the plaintiff had expired and the time was the
essence of contract. The defendant No.1 at para 7 of the written
statement has categorically pleaded that the agreement was outcome of
fraud and along with it defence is raised that the time was essence of
contract. The defendant No.2 Sujit Singh at para 13 has pleaded that the
suit was filed on the basis of the agreement but agreement contained a
clause that sale deed should have been executed within six months and
plaintiff himself has failed to abide by his obligation within a period of six
months to get the sale deed, therefore, the agreement has lost its value. It
is stated under these circumstances, the subsequent sale deed in his
favour was executed beyond the period of six months and claimed the
subsequent sale deed to be valid.
28. The defendant Sujit Singh, DW-1 who was the sole witness
examined in the case. In the examination-in-chief he has stated that
Manglu had not executed any agreement in favour of plaintiff or any third
person and he came to know about existence of the agreement after he
received the notice from court. He further averred at para 6 of the
examination-in-chief, the earlier agreement was outcome of fraud.
29. In the cross-examination of witness DW-1, at para 8 has averred
that before the written statement was filed he had not seen the document
i.e. the agreement filed by the plaintiff. He further averred that before the
written statement was filed he had not seen the agreement executed by
Manglu in favour of plaintiff. This statement if is considered with the
pleading in the written statement of the defendant, at para 7 it is
specifically pleaded that in the agreement executed in between plaintiff
and erstwhile seller Manglu, time was the essence of contract. So the
necessary inference could be drawn that the agreement executed in
between plaintiff and the seller Manglu (since deceased) was in
knowledge of subsequent purchaser therefore the nature of statement has
come in cross-examination. Further the document Ex. D-1 which is a
subsequent sale deed by Manglu in favour of Sujit Singh shows that the
copy of 16 point document was obtained and clause 14 of it shows that in
respect of the sale consideration parties were directed to obtain
information from the seller. In the said document of 16 point information
one Manish Kumar is the witness. The sale agreement dated 23 rd August,
2010 (Ex.P-1) executed in between Manglu and the plaintiff, which is a
registered one, also shows Manish Kumar was one of the witness.
30. Section 19 (b) of the Specific Relief Act of 1963 protects the bona
fide purchaser for a value who has paid his money in good faith and
without notice of the original contract. The respondent Sujit Singh raised a
defence under Section 19 (b) of the Act, 1963. At the same time defence is
raised in written statement that earlier agreement between Manglu and
plaintiff i.e. Ex.P-1 is out come of fraud.
31. The Supreme Court in the case of L.N. Gadodia and sons and
another Vs. Regional Provident Fund Commissioner {(2011) 13 SCC
517} at para 24 has held that when any fact is especially within the
knowledge of any person, the burden of proving that fact lies on him. This
rule (which is also embodied in section 106 of the Evidence Act) expects
such a party to produce the best evidence before the authority concerned,
failing which the necessary inference is required to be drawn. The
defendant tried to avoid the earlier agreement with the allegation of fraud
but at the same time raised the defence that the time was the essence of
the contract in the written statement. In the cross-examination specific
admission exists that before the written statement was filed he had not
seen the document Ex. P-1. So if the document Ex.P-1 was not seen
before filing of written statement then defence that the time was essence
of contract how could have been raised. The contradictory stand in written
statement and evidence only would negate the bona fide which is an
available defence under Section 19 (b) of the Act, 1963 to the defendant.
32. The Supreme Court in the matter of Padmakumari and others Vs.
Dasayyan and others {(2015) 8 SCC 695} at para 23 has dealt with such
situation and held that when the subsequent purchaser did not have the
knowledge and paid the amount in bona fide and good faith without notice
of original contract then protection can be granted. However, in the instant
case the existence of original contract Ex. P-1 appears to be was very
much in the knowledge of the defendant Sujit Singh. Consequently,
despite knowing this fact when he purchased the same, the defence of
Section 19 (b) of the Act of 1963 could not be availed by him and
consequences would follow.
33. In view of the foregoing discussions, we allow the appeal. The
judgement and decree of the Court below is set aside. The plaintiff is
entitled for the decree for specific performance of suit in accordance with
the Ex. P-1 dated 23 rd August, 2010 and the sale deed dated 29/04/2011
(Ex.D-1) is annulled.
34. A decree be drawn accordingly. The cost of the appeal shall also
be borne by the respondents.
Sd/- Sd/-
(Goutam Bhaduri) ( Radhakishan Agrawal)
Judge Judge
gouri/ashu
Head Note
FA No. 26 of 2018
Mere defence of non execution of agreement cannot be given
preference when the agreement is registered unless proved by
strong and cogent evidence.
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