Prl. Civil Judge (Jr.Dn.), Kolar, in O.S.no.255/1999, this appeal
2. Appeal was by defendants in OS no.255/1999 filed for
East-West - 30ft. and North-South - 40ft. situated at Keelukote
village, Kasaba hobli, Kolar ("Suit Property" for short).
3. In plaint, it was stated defendant no.1 was absolute
owner of suit property. For family necessity on 27.09.1997, he
deed. When he approached defendant no.1 with balance
cogent reason. It was stated plaintiff was ever ready and willing
4. It was stated, during first week of November 1998,
defendant no.1 for purchase of suit property. Immediately
transactions with regard to suit property. Both defendants
property. Contrary to same and despite having knowledge of
causing injury or loss to plaintiff. Immediately, 15.04.1999, he
to join in same. But after receipt, defendant no.1 got issued
untenable reply with evasive denial. Hence, suit was filed.
5. On appearance, defendants filed separate written
statements denying plaint averments and suit claim. In written
terms of agreement etc. alleged in plaint were denied. He
27.11.1997. It was stated suit was without cause of action.
6. It was specifically stated, plaintiff and his father -
Ramappa were money lenders and running chits in Kolar. And
plaintiff and timely repaid same with interest. It was stated
plaintiff's mother and brother were also into money lending. It
plaintiff's mother and repaid it. Thereafter he borrowed
Rs.15,000/- and remaining amount was outstanding. It was
property as security. Due to good relationship with plaintiff's
original title deeds of suit property. It was stated, he had
Rs.45,000/-. It was stated, defendant no.1 was due Rs.5,000/-
7. It was stated, in legal notice dated 15.04.1999,
registration. After two years value of property had doubled to
Rs.50,000/-. Therefore, there was no agreement of sale
between plaintiff and defendants other than loan transaction.
interest over suit property. It was stated, defendant no.1 had
8. In his written statement, defendant no.2 denied
alleged agreement of sale. He also denied defendant no.1 was
owner of suit property as on date of suit. Even allegations
denied. It was stated suit was without cause of action. It was
Rs.66,000/- and he was put in possession. Thus, defendant
no.2 was bonafide purchaser. It was stated, alleged agreement
of sale was unregistered, fabricated and not valid document. It
between plaintiff and defendant no.1 in November 1998. But
purchase of suit property by defendant no.2. Therefore plaintiff
was not entitled for relief and sought dismissal of suit.
9. Based on pleadings, trial Court framed following:
5. Does the 1 defendant proves that the suit
agreement is a money lending transaction between
himself and the plaintiff?
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6. Does the 1 defendant further proves that the 2nd
defendant is the owner in possession and
enjoyment of the suit schedule property having
been purchased for the consideration Rs.
1,50,000/-?
7. Does the plaintiff further proves that he is entitled
for the specific performance of suit contract?
8. What decree or order?
ADDITIONAL ISSUES:
1. Whether defendant no.2 proves that suit is
maintainable as contended in para one of his
written statement?
2. Whether defendant no.2 proves that plaintiff and
first defendant have fabricated with active collusion
as contended in para 4 & 6 of his written
statement?
3. Whether the defendant no.2 proves that he is the
bonafide purchaser as contended in para 6 of his
written statement?
4. What order or decree?
10. In trial plaintiff examined himself and three others as
PWs.1 to 4 and got marked Exs.P1 to P13. In rebuttal,
defendants no.1 and 2 and another were examined as DWs.1 to
3 and got marked Exs.D1 to D4.
11. On consideration, it answered issues no.1 to 4, 7 in
affirmative; issues no.5, 6, addl. issues no.1 to 3 in negative;
issue no.8 and addl. issue no.4 by decreeing suit and directing
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defendants no.1 and 2 to execute registered sale deed on
receipt of balance sale consideration of Rs.5,000/- from
plaintiff. However, liberty was given to plaintiff to deposit
Rs.5,000/- before this Court and get execution of registered
sale deed through Court at cost of plaintiff in case defendants
failed to execute registered sale deed.
12. Aggrieved thereby, defendant no.2 filed RA
no.128/2004 on various grounds. Based on same, first
appellate Court framed following:
POINTS:
1) Whether the second defendant is a bonafide
purchaser?
2) Whether the plaintiff proves that second defendant
had notice of agreement of sale in his favour by the
first defendant?
3) Whether the second defendant proves that the sale
agreement has been concocted by the plaintiff and
first defendant?
4) Whether the judgment and decree of the lower
court is sustainable?
5) What order?
13. On consideration, it answered points no.1 and 3 in
negative; points no.2 and 4 in affirmative and point no.5 by
dismissing appeal.
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14. Sri K Shrihari, learned counsel for defendant no.2
submitted, appeal was against concurrent findings in suit for
specific performance of agreement of sale. It was submitted,
plaintiff's claim was based on agreement of sale in respect of
suit property, executed on 27.09.1997 after receiving
Rs.45,000/- as advance amount out of total sale consideration
of Rs.50,000/-. It was submitted, showing Rs.5,000/- only as
balance amount, without any obligation placed on defendant
no.1 in recitals of agreement, indicated there was no intention
to sell. Besides, issuance of legal notice on 25.04.1999 after
delay of eight months established lack of readiness and
willingness of plaintiff. On other hand, defendant no.2 was
bonafide purchaser for total sale consideration of Rs.66,000/-
and in possession of suit property. Therefore, trial Court erred
in decreeing suit in toto.
15. It was submitted, though plaintiff claimed to have
informed defendant no.2 against purchase, no evidence was led
to substantiate same. In cross-examination, plaintiff admitted
he was aware of negotiation between defendants no.1 and 2.
Failure to forthwith issue notice would falsify plaintiff's
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contention about purchaser's knowledge of agreement of sale
prior to purchase. Same would disentitle plaintiff for specific
performance. It was submitted, plaintiff also admitted, he was
unaware of denomination of currency notes given to defendant
no.1 as advance sale consideration, which would cast serious
doubt about sale agreement. It was submitted, plaintiff
admitted, he did not have sufficient source of income at time of
entering into agreement of sale with defendant no.1. He failed
to produce any document to substantiate income as on date of
alleged agreement or capacity to pay balance amount. It was
contended, entire plaint pleadings were mere assertions
without supporting documents. Thus, plaintiff's claim was
without basis. It was submitted while passing impugned
judgment and decree, both Courts failed to appreciate above.
16. It was submitted, trial Court erroneously held plaintiff
had proved Ex.P1 - agreement of sale and plaintiff was ready
and willing to perform his part of contract. It failed note that
plaintiff had knowledge of transactions between defendants
no.1 and 2, but failed to take action, disentitling for
discretionary relief. Further, defendants established failure by
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plaintiff to prove readiness and willingness. Therefore, suit
ought to have been dismissed.
17. In appeal, without re-appreciation, first appellate
Court concurred with findings of trial Court. Appeal was
dismissed mainly on ground that at time of purchase,
defendant no.2 failed enquire about original title deeds from
defendant no.1 and holding defendant no.2 was not bonafide
purchaser. Highlighting fact that plaintiff had not sought for
cancellation of sale in favour of defendant no.2 even though
sale was prior to filing of suit, by relying on decision of Hon'ble
Supreme Court in case of B. Vijaya Bharathi v. P. Savithri &
Ors, reported in (2018) 11 SCC 761, for proposition that
failure of plaintiff to seek cancellation of subsequent
transactions which would affect contract would indicate lack of
willingness.
18. Relying on decision of Hon'ble Supreme Court in case
of Dheeraj Developers Pvt. Ltd., v. Om Prakash Gupta,
reported in (2016) 12 SCC 397, it was submitted, burden lies
on plaintiff to demonstrate readiness and willingness
continuously from date of contract. When balance amount was
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only Rs.5000/-, failure to pay same and get sale deed executed
as early as possible by itself disprove readiness and willingness.
Reliance was also placed on decision of Hon'ble Supreme Court
in case of U.N. Krishnamurthy (since deceased) Thr. Lrs.
v. A.M. Krishnamurthy, reported in (2023) 11 SCC 775, to
contend, in case plaintiff fails to prove or substantiate financial
capacity to perform his part of contract, same would disentitle
relief of specific performance.
19. Learned counsel further relied on decision of Hon'ble
Supreme Court in case of P. Daivasigamani v. S.
Sambandan, reported in (2022) 14 SCC 793, to contend
Section 16 (c) of Specific Relief Act, mandated plaintiff seeking
relief of specific performance to prove both 'readiness' and
'willingness' on his part. On above grounds sought for
answering substantial question of law and allow appeal.
20. On other hand, Smt.Rakshitha V.N., learned counsel
appearing for Sri K Raghavendra Rao, Advocate for plaintiff
submitted, appeal was against concurrent findings leaving no
scope for interference. It was submitted as per Ex.P1,
defendant no.1 entered into agreement of sale in respect of suit
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property for a total consideration of Rs.50,000/- and receiving
Rs.45,000/- as advance. It was submitted, as per recital in
Ex.P1, time was not essence of contract. Thus, cause of action
arose only on denial by defendant no.1 to execute sale deed. It
was submitted, plaintiff specifically pleaded that before
purchase of suit property by defendant no.2, he along with
PW.4 had informed him about Ex.P1. Same was established by
oral evidence. Therefore, purchase of suit property by
defendant no.2 under Ex.D5 was with knowledge of prior
transaction. Consequently, defendant no.2 was not bonafide
purchaser.
21. It was submitted, main contention of defendant no.2
was that plaintiff failed to establish readiness and willingness.
But, plaintiff had specifically asserted in Ex.P5 - legal notice
and also in plaint that he was ever ready and willing to pay
balance sale consideration. Taking note of same and failure on
part of defendants to disprove admissions, both Courts had
rightly decreed suit. It was submitted, contention about
readiness and willingness was elaborately discussed by both
Courts. Therefore, same could not be interfered by this Court.
It was submitted, admittedly defendant no.2 had not disputed
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readiness and willingness of plaintiff. Even on this count, said
contention was liable for rejection. It was submitted, when
plaintiff pleaded about knowledge of transaction and informing
defendant no.2, same was not disproved in cross-examination.
Hence, claim of bonafide purchaser would not arise.
22. It was submitted, even contention about delay in
issuing legal notice was without any basis as plaintiff had
specifically pleaded about his readiness and informing
defendant no.2 about earlier transactions. It was submitted,
issuance of legal notice, in any case was within period of
limitation.
23. It was submitted, in cross-examination suggestion
was made about failure to give notice, but PW.1 specifically
stated that he had approached defendants and informed same
and he was accompanied by PW.4, who corroborated same.
Nothing was elicited to disprove said assertion.
24. It was submitted, in cross-examination DW.2 (witness
of Ex.D5 sale deed) deposed about payment of amount to
plaintiff, in cross-examination he failed to disclose particulars
such as day, month or year of payment. DW.2 also admitted
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that at time of purchase of suit property defendant no.2 was
aware of transaction between plaintiff and defendant no.1 and
he had supervised sale.
25. It was submitted, defendant no.2 (examined as DW.3)
admitted in cross-examination that he enquired and confirmed
defendant no.1 was owner of suit property, but had not seen
original title deeds and further admitted, except tax paid
receipts, defendant no.1 had not given original title documents
at time of execution of Ex.D5. Hence, both Courts after due
appreciation of evidence rightly held defendant no.2 failed to
establish that he was bonafide purchaser.
26. It was further submitted, production of original title
deeds would establish genuineness of Ex.P1. If plaintiff was in
unlawful possession of title documents, defendant no.1 ought
to have taken appropriate steps in law for return. It was
submitted, despite contest by defendant no.1 before trial Court,
failure to file appeal against judgment and decree of trial Court
or against judgment and decree of first appellate Court,
amounting to decree attaining finality against defendant no.1.
Relying on decision of Hon'ble Supreme Court in case of Manjit
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Singh & Anr. v. Darshana Devi and Ors., reported in 2024
SCC OnLine SC 3431, it was contended onus to establish
bonafide purchaser would be on purchaser.
27. She also relied on decision of High Court of Madras, in
case of Arunachala Thevar v. Govindarajan Chettiar,
reported in 1976 SCC OnLine Mad 257, to contend that
purchaser would deemed to be in notice of anything which he
failed to discover either because he did not enquire or
investigate title of property. On above grounds sought dismissal
of appeal.
28. Heard learned counsel, perused impugned judgment
and decree and records.
29. This appeal was admitted on 14.11.2011 to consider
following substantial questions of law:
a) Whether first appellate Court was justified in
holding that 2nd defendant was aware of previous
transaction between 1st defendant and plaintiff in
absence of any written notice. Particularly, when
plaintiff had knowledge of negotiation of sale
between 1st defendant and 2nd defendant admitted
in cross examination dated 06.01.2004?
b) Whether Courts below have kept in mind Section 20
of Specific Relief Act, while decreeing suit?
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30. This appeal is by purchaser (defendant no.2) against
concurrent findings in suit for specific performance of
agreement of sale. Suit claim was based on assertion that
defendant no.1 was owner of suit property, due to legal
necessities had agreed to sell it to plaintiff for total sale
consideration of Rs.50,000/- and executed Ex.P1 - agreement
of sale on 27.09.1997 by receiving Rs.45,000/- as advance and
agreeing to execute registered sale deed by receiving balance
amount of Rs.5,000/-. In plaint, it was further asserted that
plaintiff was ever ready and willing to perform his part of
contract and had called upon defendant no.1 for execution of
sale deed several times, but postponed by defendant no.1. It is
also asserted when plaintiff got information about defendant
no.1 attempting to sell suit property to defendant no.2
disregarding Ex.P1 agreement of sale, he cautioned defendant
no.2 against sale transaction and also got issued Ex.P5 - legal
notice. Despite same, suit property was purchased by
defendant no.2 under Ex.D5 sale deed. Therefore, plaintiff filed
suit praying for specific performance of Ex.P1 and for defendant
no.2 to join in execution of sale deed. Plaintiff examined
himself, attestor and scribe of Ex.P1 and person who
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accompanied plaintiff at time of cautioning defendant no.2, as
PWs.1 to 4. Documents relied upon were agreement of sale
dated 27.09.1997, Sale deed dated 03.07.1997, agreement of
sale dated 22.02.1997, sale deed dated 27.11.1998, legal
notice dated 15.04.1999 and acknowledgment, reply notice
dated 22.04.1999, demand register extract, assessment
register extract, tax paid receipts, affidavit, deposition of PW.1
in Misc.no.11/2002 and Voters list extract as Exs.P1 to P13.
31. On other hand, defendant no.1 denied execution of
Ex.P1, asserted lack of any intention to sell suit property and
on other hand claimed there was only loan transaction with
plaintiff's father, of which there was part repayment but, due
amount was Rs.15,000/-, which he was ready to pay. While,
defendant no.2 denied Ex.P1 and about he having knowledge of
it prior to Ex.D5 sale deed in his favour. He claimed to be
bonafide purchaser. To establish same, defendant no.1,
attestor of Ex.D5 and defendant no.2 deposed as DWs.1 to 3.
Documents relied by defendants were particulars of stamp
paper used to draw Ex.P1, Small dairy books, sale deed dated
27.11.1999, endorsement by Sub-Registrar, Form no.15,
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Assessment Register Extracts and Tax Paid Receipts as Exs.D1
to D10.
32. While passing impugned judgment and decree, trial
Court took note of rival pleadings and evidence led by parties.
It observed there was no dispute about defendant no.1 being
owner of suit property and there was no material to
substantiate plaintiff being put in possession. It observed
deposition of PW.1 coupled with deposition of PWs.2 to 4 was in
tune with plaintiff's case. It noted suggestions about manner of
payment of advance amount would not further contention of
defendants. Referring to testimony of PWs.2 and 3 - attestor
and scribe, who admitted their signatures on Ex.P1, presence of
defendant no.1 at time of it's execution and payment of sale
consideration to hold Ex.P1 as proved.
33. It noted deposition of PW.4, person who accompanied
plaintiff when he approached defendants and apprised
defendant no.2 of earlier agreement of sale in his favour, to
conclude plaintiff had established knowledge of Ex.P1 by
defendant no.2 prior to execution of Ex.D5.
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34. Insofar as contention of defendant no.1 about
existence of loan transaction with plaintiff's family members,
signing on some blank papers and misuse of same for drawing
agreement of sale and Ex.P1 being fabricated, trial Court
observed failure to produce any material to substantiate loan
transaction and admission about not obtaining receipt on
repayment, to conclude failure to establish existence of loan
transaction.
35. Trial Court rejected allegation of Ex.P1 being drawn on
blank signed papers by noting that stamp paper was issued by
Treasury on 26.09.1997 and drawing of agreement of sale on
27.09.1997. Insofar as contention that value of suit property
was more than Rs.1,20,000/- and therefore, grant of specific
performance would be inequitable, it noted suit for specific
performance could not be opposed merely on ground of
inadequacy of sale consideration unless it was an
unconscionable contract.
36. Thereafter, it adverted to contention of defendant
no.2 being bonafide purchaser on ground that there was no
disclosure by defendant no.1 about earlier agreement of sale
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with plaintiff. It observed, though defendant no.2 took specific
plea and also deposed about being unaware of earlier
agreement of sale in favour of plaintiff and nothing material
was elicited in cross-examination, it noted that plaintiff
examined PW.4, who had accompanied him when he met
defendants and urged defendant no.2 not to enter into
transaction in respect of suit property. It also noted, even
defendant no.1 had examined DW.2, father-in-law of defendant
no.2, who admitted he was aware of transaction between
plaintiff and defendant no.1 but claimed that he had not
informed defendant no.2 about same. It observed, it would be
unnatural for a father-in-law not to mention about any defect
or complication in respect of suit property, when he knew about
defendant no.2 intending to purchase same. On said reasoning,
it held failure on part of defendant no.2 to establish that he was
bonafide purchaser.
37. Taking note of absence of any specific clause
stipulating time limit for execution of sale deed, in Ex.P1, trial
Court held time was not essence of contract. Referring to
specific pleading in plaint about readiness and willingness to
perform his part of contract, its reiteration in deposition of
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PW.1 as well as said plea being mentioned in Ex.P5 legal notice,
whereas defendants totally denied Ex.P1, held plaintiff had
established said issue as well as default committed by
defendant no.1. On above conclusions, trial Court decreed suit.
38. In Appeal, first appellate Court noted that defendant
no.1 had not filed appeal and appeal was only by defendant
no.2 on limited grounds that finding about Ex.P1 being proved,
time not being essence of contract, readiness and willingness
on part of plaintiff and default committed by defendant no.1,
had attained finality. After taking note of pleadings and
material placed on record by both sides, it held defendant no.2
failed to establish himself as bonafide purchaser on ground that
he had failed to verify reason for non-availability of original title
deeds with defendant no.1 and handing over of same at time of
purchase of suit property by defendant no.2 and same was
corroborated by deposition of DW.2. It observed, any person
buying immovable property would normally ask for and verify
existence of all title deeds and contention of defendant no.2
that he believed defendant no.1 etc., would not dispel duty to
verify and held failure of defendant no.2 to establish himself as
bonafide purchaser.
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39. Further, on ground that defendant no.2 had not
pleaded about Ex.P1 being concocted nor made such
suggestion in cross-examination of PW.1 as well as noting that
stamp paper on which agreement of sale was drawn was
purchased on same day, it held failure to establish Ex.P1 was
concocted. Finally observing that trial Court had rightly
appreciated evidence and passed judgment and decree,
dismissed appeal.
40. Main grounds urged in this appeal are, as per plaintiff,
total sale consideration for agreement of sale was Rs.50,000/-,
with advance of Rs.45,000/- was paid leaving balance amount
of Rs.5,000/-, without any obligation on seller or fixing any
period of time. There was no explanation for such omission. It
was further contended that Ex.P1 was allegedly executed on
27.09.1997, issuance of legal notice on 15.04.1999 at Ex.P5,
but, filing of suit was on 16.07.1999, which was after more
than eight months from date of sale - Ex.D5 dated 27.11.1998
in favour of defendant no.2. Despite having knowledge of
negotiation between defendants no.1 and 2, failure to take
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steps immediately would disentitle plaintiff to relief of specific
performance.
41. Unlike, specifically contended plaintiff failed to
substantiate his claim approaching defendant no.2 and asking
him to forebear from entering into transaction in respect of suit
property. On contrary contentions that plaintiff admitted of
having knowledge of negotiation between defendants and
failure to take timely action would disentitle plaintiff from
discretionary relief of specific performance. It was further
contended since sale in favour of defendant no.2 prior to suit,
plaintiff ought to have sought for cancellation of sale deed as
per ratio in of B. Vijaya Bharathi's case (supra). Relying on
decisions in Dheeraj Developers Pvt. Ltd. and U.N.
Krishnamurthy's cases (supra), it was contended readiness
and willingness has to be demonstrated continuously from date
of agreement. Further, relying on decision in P.
Daivasigamani's case (supra), it was contended plaintiff failed
to prove readiness and willingness.
42. Defendant no.2 also contends, despite asserting prior
knowledge by defendant no.2 about Ex.P1, plaintiff did not lead
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evidence to substantiate same. Therefore, defendant no.2 was
bonafide purchaser and both Courts concurrently erred in
holding otherwise.
43. Insofar as contention about readiness and willingness,
it is seen against judgment and decree passed by trial Court,
appeal was filed only by defendant no.2 and decree attained
finality insofar as defendant no.1. In view of above, challenge
by defendant no.2 would require to be confined only to finding
about his being bonafide purchaser. In fact, substantial
question of law framed is about whether finding about
defendant no.2 was not bonafide purchaser is perverse, when
plaintiff had knowledge of negotiation for sale between
defendants no.1 and 2 and whether grant of specific
performance was contrary to Section 20 of SRA?
44. Under very similar circumstances, High Court of
Gujarat in case of Bharatbhai Parshotambhai Gohel v.
Niravkumar Jitendrabhai Jethva, reported in 2018 SCC
OnLine Guj 2340, held as follows:
37. In the aforesaid context, I may refer to and rely
upon a three-Judge Bench decision of the Bombay
High Court in the case of Bhup Narain
Singh v. Gokhul Chanda Mahton, [(1934) 36 BOMLR
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421]. In the said case, the Bombay High Court was
dealing with a matter arising under the Specific
Relief Act, 1877. The Court had the occasion to
consider Section 27(b) of the Specific Relief Act,
1877 (old Act) now Section 19(b) of the 1963 Act. I
may quote the relevant observations:
"11. It will be convenient to state the material portions
of the section, which are as follows:
"27. Except as otherwise provided by this Chapter,
specific performance of a contract may be enforced
against
(a) either party thereto;
(b) any other person claiming under him by a title
arising subsequently to the contract, except a
transferee for value who has paid his money in
good faith and without notice of the original
contract."
12. In their Lordships' opinion, the section lays down a
general rule that the original contract may be
specifically enforced against a subsequent
transferee, but allows an exception to that general
rule, not to the transferor, but to the transferee,
and, in their Lordships' opinion, it is clearly for the
transferee to establish the circumstances which will
allow him to retain the benefit of a transfer which,
prima facie, he had no right to get. Further, the
subsequent transferee is the person within whose
knowledge the facts as to whether he has paid and
whether he had notice of the original contract lie,
and the provisions of Sections 103 and 106 of the
Indian Evidence Act, 1872, have a bearing on the
question. The plaintiff does not necessarily have
knowledge of either matter. In a case in 1862
before this Board, Varden Seth Sam v. Luckpathy
Royjee Lallah (1862) 2 M.I.A. 303, an equitable lien
by deposit of title-deeds was enforced against a
subsequent transferee of the property. In delivering
the judgment of this Board, Lord Kingsdown stated
(p. 319):
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Though both the third and the last Defendants pleaded,
in effect, that they were bona fide purchasers for
value, without notice, yet they did not prove that
defence, though the Plaintiff charged notice and
collusion with the first Defendant.
13. And, later (p. 322):
The question to be considered is, whether the third and
sixth Defendants respectively possessed the land
free from that lien, whatever its nature. As one who
owns property subject to a charge can, in general,
convey no title higher or more free than his own, it
lies always on a succeeding owner to make out a
case to defeat such prior charge. Let it be conceded
that a purchaser for value, bona fide, and without
notice of this charge, whether legal or equitable,
would have had in these Courts an equity superior
to that of the Plaintiff, still such innocent purchase
must be, not merely asserted, but proved in the
cause, and this case furnishes no such proof.
14. Although under Section 54 of the Transfer of
Property Act, 1882, the appellant's agreement for
sale does not of itself create any interest in or
charge on the property, their Lordships are of
opinion that the rule of procedure stated by Lord
Kingsdown is applicable to the present case under
Section 27(b) of the Specific Relief Act. This view
under the Specific Relief Act has been taken in a
number of cases in India, of which it is sufficient to
refer to Himatlal v. Vasudev Ganesh (1912) I.L.R.
36 Bom. 446 S.C. : 14 Bom. L.R. 634, Baburam
Bag v. Madhb Chandra Pollay (1913) I.L.R. 40 Cal.
565, Tiruvenkatachariar v. Venkatachariar, Naubat
Rai v. Dhaunkal Singh (1916) I.L.R. 38 All.
184 and Muhammad Sadik Khan v. Masihan
Bibi (1930) I.L.R. 9 Pat. 417.
15. Their Lordships' attention was drawn to only one
decision to a contrary effect, viz.,
Peerkha v. Bapu, but their Lordships prefer the
earlier Bombay decision in Himatlal's case.
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16. Counsel for defendant No. 4 prayed in aid certain
decisions on the somewhat analogous provisions of
the insolvency statutes. The first of these
was Official Assignee v. Khoo Saw Cheow [1931]
AC. 67, a case under Section 50(1) of the
Bankruptcy Ordinance of the Straits Settlements,
which, so far as material, provides:
Any settlement of property, not being...a settlement
made in favour of a purchaser. in good faith and for
valuable consideration,...shall, if the settlor becomes
bankrupt within two years after the date of the
settlement, be absolutely void as against the official
assignee.
17 It was held by this Board, upon construction of the
section, that the onus is upon the Official Assignee
to prove that a conveyance which he is seeking to
set aside thereunder was not made in good faith
and for valuable consideration. In their Lordships'
opinion, that section is not in pari casu with the
section of the Specific Relief Act in several respects.
In the first place, the structure of that section is
different, in that it does not provide a general rule
with a permitted exception, but defines the area of
voidance, and the prior settlements that are outside
that area are expressly excluded from invalidation
by Section 52 of the Ordinance. In the second
place, the operation of the section is the opposite of
the operation of Section 27 of the Specific Relief
Act, in that it renders void an earlier right in favour
of a later one. That decision was followed in Official
Receiver v. P.L.K.M.R.M. Chettyar Firm (1930) L.R.
58 I.A. 115 S.C. : 33 Bom. L.R. 867, which arose
under Section 53 of the Provincial Insolvency Act,
1920, and in Pope v. Official Assignee (1933) L/R.
60 I.A. 362 S.C. : 36 Bom. L.R. 137, which arose
under Section 55 of the Presidency-towns
Insolvency Act, 1909. The provisions of these two
Acts are similar to those of the Straits Settlements
Ordinance. It may further be observed that, before
deciding to file a suit, the Official Assignee or
receiver has available any information to be
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obtained from the insolvent, and, in the case of the
Straits Settlements Ordinance (Section 31) and of
the Presidency-towns Insolvency Act (Section 36),
he has the power, through the Court, of obtaining
full information.
18. Their Lordships accordingly agree with the view of
the Subordinate Judge that the onus is upon
defendant No. 4 to bring himself within the
exception in Section 27 of the Specific Relief Act,
and, as already indicated, their Lordships agree
with the learned Judges of the High Court that there
is no sufficient evidence either on the question of
payment or on the question of notice. The appellant
is, therefore, entitled to the relief sought by him."
38. Let me also refer to and rely upon a decision of this
Court in the case of Ghanshyambhai Dhirubhai
Barvaliya v. Rasikbhai Dhirubhai Ambaliya [Appeal
from Order No. 457 of 2016 decided on
10th January 2017]. The relevant observations are
as under:
"14. Now, this takes the Court to decide whether one of
the subsequent purchasers i.e. the appellant herein
is a bona fide purchaser of the subject land or not.
In order to examine this aspect, it is necessary to
consider the conduct of the subsequent purchasers
before execution of sale deed dated 03.09.2014. It
is settled principle of law under Section 19(b) of the
Specific Relief Act that specific performance of
contract may be enforced against any other person
claiming under him by a title arising subsequently
to the contract. If a person, as an owner of the
property, has entered into an agreement to sale, he
cannot, thereafter, convey the same property to
any other person, as after prior agreement to sale,
he cannot be said to be free owner of the
property. If the owner alienates the property,
he can alienate it only subject to the rights
created under the prior agreement to sale. It
is the case of the appellant i.e. subsequent
purchaser that he has no knowledge about
execution of sale agreement inter se between
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plaintiff and defendant No. 1 and, therefore,
they have bonafide entered into the registered
sale deed dated 03.09.2014 without notice of
prior sale agreements and paid full value in
good faith. Upon re-appreciation of the events,
which occurred before and after registered sale
deed dated 03.09.2014, it shows that the
defendants with unusual haste, carried out the
sale deed. The obvious reason is such that the sale
deed executed and registered on 03.09.2014
discloses that the appellant was aware of pending
proceedings being Special Civil Suit No. 405 of 2008
between defendant No. 1 and his predecessor in
title. Admittedly, the dispute came to be resolved
between the parties to the said suit on 12.09.2014
and prior to it, the sale deed was executed and
registered. The said sale deed indicates that the
appellant and respondent No. 3 herein have paid
amount of consideration by way of various cheques
of the date 01.09.2014 to 04.09.2014. Admittedly,
the amounts of cheques were withdrawn by
defendant No. 1 on 16.09.2014 and 17.09.2014 as
per the statement of account annexed with the
affidavit produced before this Court during the
course of hearing. It is a matter of fact that though
the dispute has been resolved on 12.09.2014, the
suit was disposed of only on 02.10.2014. Normally,
there is no reason to consider about withdrawal of
the amounts on the part of the original owner
defendant No. 1 but, in view of the peculiar facts of
this case, conduct of the defendants goes to
suggest that before the issue is resolved in a
pending suit between defendant No. 1 and his
predecessor in title, the sale deed was executed
and registered and meanwhile, the amounts of
consideration were withdrawn in cash by the
original owner i.e. defendant No. 1 and thereafter,
the Court has passed the order of disposal of the
suit on 02.10.2014. This speaks a lot about conduct
of the defendants, who in collusion, joined hands to
frustrate the sale agreements in question. It
requires to be considered here that the
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defendants with unusual haste, carried out the
sale deed, where such transactions, as a rule,
are carried out with appropriate inquiry and,
more particularly, after obtaining title
clearance certificate and also by publishing
notice in newspaper before purchase.
Admittedly, no such steps have been taken by the
subsequent purchasers i.e. the appellant and
respondent No. 3 herein. Not only that, they have
not bothered to inquire about the whereabouts of
the original title deeds. One more significant aspect
of the case required to be considered is such that
defendant No. 1 agreed to sale the subject land to
the plaintiff for consideration of Rs. 51 lacs which
was fixed in the year 2008 whereas, the defendants
inter se fixed the sale price of the subject land of
Rs. 17,50,000/- in the year 2014. Meaning
thereby, from 2008 to 2014, price of the
subject land has been reduced to about 66%
which can never be believed by any prudent
man dealing in the transaction of the
immovable property and further, the Court
cannot overlook or ignore the existing
scenario in the market about the prices of the
land during the period in question.
15. The plain language of Sub-Section (b) of Section 19
of the Specific Relief Act shows that subsequent
transferee can retain the benefit of transfer by
purchase, which prima facie, he had right to get,
only after satisfying two conditions i.e. (1) he
must have paid the full value for which, he
purchased the property and; (2) he must have
paid it in good faith and without notice of prior
contract. The burden of proof is upon the
subsequent purchaser to establish existence of
these two conditions in order to see that his right
prevails over the prior agreement of sale. In the
case on hand, the conduct of the defendants
themselves indicates that the appellant herein is
not a bona fide purchaser because, the sale deed
came to be executed and registered with unusual
rapidity. Normal procedure for sale/purchase of
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immovable property as a rule is not such which is
adopted in the present case. Hence, required
ingredients of Section 19(b) of the Specific
Relief Act are missing in this case and hence,
protection of Section 19(b) is not available to
the subsequent purchaser i.e. appellant
herein."
39. In the aforesaid context, let me refer to and rely
upon a decision of the Supreme Court in the case
of Ram Niwas (dead) Lrs. v. Bano (smt.) [(2000) 6
SCC 685]. In the said case before the Supreme
Court, the scope of Section 19(b) of the Specific
Relief Act read with explanation II to Section 3 of
the Transfer of Property Act and the provisions of
Section 20(2) of the Specific Relief Act, 1963 fell for
consideration. I may quote few relevant
observations made in the judgment:
"3 Section 19 provides the categories of persons
against whom specific performance of a contract
may be enforced. Among them is included, under
clause (b), any transferee claiming under the
vendor by a title arising subsequently to the
contract of which, specific performance is sought.
However, a transferee for value, who has paid his
money in good faith and without notice of the
original contract, is excluded from the purview of
the said clause. To fall within the excluded class, a
transferee must show that:
(a) he has purchased for value the property (which is
the subject-matter of the suit for specific
performance of the contract);
(b) he has paid his money to the vendor in good faith;
and
(c) he had no notice of the earlier contract for sale
(specific performance of which is sought to be
enforced against him).
4 The said provision is based on the principle of English
law which fixes priority between a legal right and an
equitable right. If A purchases any property from B
and thereafter B sells the same to C, the sale in
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favour of A, being prior in time, prevails over the
sale in favour of C as both A and C acquired legal
rights. But where one is a legal right and the other
is an equitable right
"a bona fide purchaser for valuable consideration who
obtains a legal estate at the time of his purchase
without notice of a prior equitable right is entitled to
priority in equity as well as at law. [Snells Equity
Thirtieth Edition p. 48].
This principle is embodied in Section 19(b) of the
Specific Relief Act.
5 It may be noted here that notice may be (i) actual,
(ii) constructive or (iii) imputed.
6 Section 3 of the Transfer of Property Act defines,
inter alia,
"a person is said to have notice of a fact when he
actually knows that fact, or when but for wilful
abstention from an enquiry or search which he
ought to have made, or gross negligence, he would
have known it."
And Explanation II appended to this definition clause
says:
"Any person acquiring any immovable property or any
share or interest in any such property shall be
deemed to have notice of the title, if any, of any
person who is for the time being in actual
possession thereof."
7 Thus, it is seen that a statutory presumption of notice
arises against any person who acquires any
immovable property or any share or interest therein
of the title, if any, of the person who is for the time
being in actual possession thereof
8 The principle of constructive notice of any title which
a tenant in actual possession may have, was laid
down by Lord Eldon in Daniels v. Davison [(1809)
16 Ves. 249 at P. 254]. The learned law Lord
observed,
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"Upon one point in this cause there is considerable
authority for the opinion I hold; that, where there is
a tenant in possession under a lease or an
agreement, a person, purchasing part of the estate,
must be bound to inquire, on what terms that
person is in possession."
"18 Both the learned Single Judge as well as the
learned Judges of the Division Bench of the High
Court dealt with the question whether the
purchasers had actual knowledge of Ext. 1, the
earlier contract, and on evidence found that the
purchasers did not have any knowledge of it. But
they failed to notice the provisions of Explanation II
to Section 3 of the Transfer of Property Act which is
germane on the point of notice. Indeed, issue No.
10 was not properly framed. The word notice should
have been used in issue No. 10 instead of
knowledge because Section 19(b) uses the word
notice. From the definition of the expression, a
person is said to have notice in Section 3 of the
Transfer of Property Act, it is plain that the word
notice is of wider import than the word knowledge.
A person may not have actual knowledge of a fact
but he may have notice of it having regard to the
aforementioned definition and Explanation II
thereto. If the purchasers have relied upon the
assertion of the vendor or on their own knowledge
and abstained from making enquiry into the real
nature of the possession of the tenant, they cannot
escape from the consequences of the deemed
notice under Explanation II to Section 3 of the
Transfer of Property Act. On this point, in the light
of the above discussion, we hold that the
purchasers will be deemed to have notice of Ext. 1,
should it be found to be true and valid."
40. The mere fact that the appellant paid Rs. 4 Lac to
the defendant No. 2 towards the sale consideration
would be neither here nor there. By merely
purporting to pay the amount towards the sale
consideration, the appellant cannot say that
equities are more in his favour. Again, a person
claiming equities must come with clean hands. In
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the instant case, the appellant has not only tried to
steal a march over the plaintiff by securing this sale
in the circumstances, which I have discussed at
considerable length, but he has gone to the length
of raising false defences in the suit. In such
circumstances, no question of equities in favour of
the appellant could arise and I am in complete
agreement with the findings of the Trial Court.
41. I shall now look into the question whether the Trial
Court committed any error in granting the relief of
specific performance.
42. Section 20 of the Specific Relief Act, 1963, provides
as follows:
"20. Discretion as to decreeing specific
performance-
(1) The jurisdiction to decree specific performance is
discretionary, and the Court is not bound to grant
such relief merely because it is lawful to do so; but
the discretion of the Court is not arbitrary but
sound and reasonable, guided by judicial principles
and capable of correction by a Court of appeal.
(2) The following are cases in which the Court may
properly exercise discretion not to decree specific
performance-
(a) where the terms of the contract or the conduct of
the parties at the time of entering into the contract
or the other circumstances under which the
contract was entered into are such that the
contract, though not voidable, gives the plaintiff an
unfair advantage, over the defendant; or
(b) where the performance of the contract would
involve some hardship on the defendant which he
did not foresee, whereas its non-performance would
involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract
under circumstances which though not rendering
the contract voidable, makes it inequitable to
enforce specific performance.
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Explanation 1. -- Mere inadequacy of consideration,
or the mere fact that the contract is onerous to the
defendant or improvident in its nature, shall not be
deemed to constitute an unfair advantage within
the meaning of Clause (a) or hardship within the
meaning of Clause (b).
Explanation 2. -- The question whether the
performance of a contract would involve hardship
on the defendant within the meaning of Clause (b)
shall, except in cases where the hardship has
resulted from any act of the plaintiff subsequent to
the contract, be determined with reference to the
circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to
decree specific performance in any case where the
plaintiff has done substantial acts or suffered losses
in consequence of a contract capable of specific
performance.
(4) The court shall not refuse to any party specific
performance of a contract merely on the ground
that the contract is not enforceable at the instance
of the other party."
43. The relief of specific performance having its roots in
equity, the Specific Relief Act, 1963, has preserved
the discretion of the Court not to grant the relief
even though the agreement is specifically
performable in law. The only fetters imposed by the
statute on the exercise of the discretion are that the
discretion must not be exercised arbitrarily but
soundly and reasonably and guided by judicial
principles. The phrase "capable of correction by a
Court of appeals" has been inserted possibly to
indicate the necessity for the trial Court to state the
reasons for exercising its discretion in a particular
way. The circumstances when specific performance
mentioned in the Clauses (a), (b) and (c) of Sub-
section (2) of Section 20 cannot be granted are not
expressly exhaustive. They indicate the situations in
which the Court may properly exercise discretion
not to decree specific performance. However,
certain considerations have been excluded as
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relevant factors. These are contained in
Explanations 1 and 2 to the Section as well as in
Section 20(4). It is to be noticed that each of these
exclusions are preceded by the word "mere". The
word "mere" in the context means "sole". In other
words, any one of those factors by itself would not
justify the exercise of discretion against granting
specific performance. The factors cumulatively or
with other factors may form the basis of a decision
not to grant specific performance.
44. Hardship of the defendant may be one of the
grounds which may be taken into consideration for
exercising its discretion by the Court in refusing to
grant a decree for specific performance of contract.
45. Section 20 of the Specific Relief Act embodies a
Common law that is grant of a decree for specific
performance of a contract is a discretionary one.
The Court may, in a given situation, take into
consideration the subsequent events.
46. Long years have been passed by in the case on
hand and the trial Judge does not seem to have
taken this fact into consideration while granting the
decree for specific performance.
47. In Spry on Equitable Remedies, it is stated:--
"On principle, indeed, Courts of equity must take
account of all the circumstances known to exist at
the time when an order is sought as well as of
circumstances likely to occur subsequently, when
they are called upon to decide whether the effect of
ordering specific performance will be to cause such
great hardship as to account to an injustice. There
is no sufficient reason why a cause of hardship
should be ignored merely because it did not exist at
the time when the material contract was entered
into. Certainly the fact that it has occurred
subsequently may be a matter of weight, and if it
appears that the parties contemplated that events
might occur such as have in fact occurred the
alleged causes of hardship will usually be of little
importance indeed. But this is not to say that they
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are irrelevant or that sometimes they may not be
decisive so as to incline the balance of justice
against the grant of relief.
Fortunately, however, this matter does not depend
solely on principle, for there may be "found various
decisions where events occurring after the date of
entry into the agreement in question have been
treated as relevant. Furthermore, it will
subsequently be seen that any hardship of the
defendant, if specific performance were ordered,
must be weighed against the inconvenience or
hardship which would be caused to the plaintiff if
specific performance were refused. And in
determining how great any such hardship or
inconvenience to the plaintiff will be once again
events and probable events as known at the date of
the hearing are taken into account and there is no
arbitrary restriction or limitation to events taking
place at the time of entry into the material
agreement.
It must not be forgotten that as soon as it is shown
that damages and other legal remedies are
inadequate an applicant will be held prima facie
entitled to specific performance of a valid and
enforceable agreement. Specific performance will
not be refused merely because inconvenience or
even hardship to the defendant would be caused
thereby. But if the hardship suffered by the
defendant, if specific enforcement took place, would
be so much greater than the detriment which would
be suffered by the plaintiff if he were confined to his
remedy at law that it would be unreasonable and
oppressive to grant relief, specific enforcement will
be denied."
48. In S.G. Banerjee's Specific Relief Act, 10th Edn.
At page 357, it is stated:---
"It is almost universally recognised that specific
performance of a contract should not be granted, if
in the circumstances of a case, it is inequitable to
do so. The clause follows and gives statutory
recognition to the universal rule. It enacts that
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where the defendant enters into the Contract under
circumstances, which, though they do not render
the contract voidable, yet make it inequitable to
enforce specific performance, the Court may
properly exercise discretion not to decree specific
performance. What would or would not be
inequitable would depend upon the facts and
circumstances of the each case."
49. In Om Prakash v. Amarjit Singh, reported in 1988
Supp SCC 780, the law is stated in the following
terms:
"This is a suit for specific performance on an agreement
to sell The grant of relief is discretionary. The Court
after consideration of all relevant circumstances
must be persuaded to exercise its equitable and
discretionary jurisdiction in favour of specific
enforcement. The jurisdiction is subject to all the
conditions to which all discretionary jurisdictions are
subject. There are certain personal bars to relief.
Respondent 1, who was the plaintiff in the suit, did
not enter the box and tender evidence. The subject-
matter of the suit is a small piece of property of 68
sq. yds. And is said to be the only worldly goods of
the appellant."
50. It is a settled principles of law that the provisions
of Section 20 of the Specific Relief Act is not
exhaustive. The same has to be considered and
read with the Section 14 thereof. It is further well
settled that the plaintiff does not have an absolute
right to obtain a decree for specific performance of
contract.
51. In Yohannan v. Harikrishnan Nair, reported in AIR
1992 Ker 49, it is stated:
"The cases in which the Court may properly exercise
discretion not to decree specific performance has
been enumerated in Sub-section (2). They are (a)
where the terms of the contract or the conduct of
the parties at the time of entering into the contract
or the other circumstances under which the
contract was entered into are such that the
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contract, though not avoidable, gives the plaintiff
an unfair advantage over the defendant, or (b)
where the performance of the contract would
involve some hardship on the defendant which he
did not foresee, whereas its non performance would
involve no such hardship on the plaintiff, (c) where
the defendant entered into the contract under
circumstances which though not rendering the
contract voidable, makes it inequitable to enforce
specific performance."
52. The discretion of the Court in the matter, thus, is
not confined within the four corners of Section 20 of
the Act.
53. In Dr. S.C. Banerjee's Specific Relief Act,
10th Edn. At page 326, the law is stated in the
following terms:
"The discretion is guided by judicial principles. The
expression means that discretion is not to be
arbitrarily exercised, but must be based on sound,
reasonable and judicial principles, that is, the
discretion must not be dependent upon the mere
pleasure of the Judge but must be sound and
reasonably guided by judicial principles. The Court
must grant or withhold relief according to the
circumstances of each particular case, when the
general rules and principles do not furnish an exact
measure of justice between the parties."
54. In granting or withholding the relief, the Court
should take the following circumstances, conditions
and incidents into consideration:
"(1) The contract must be certain, unambiguous and
upon a valuable consideration;
(2) The contract must be perfectly fair in all its parts;
(3) The contract must be free from any fraud
misrepresentation, imposition or mistake;
(4) The contract must not impose an unconscionable or
hard bargain;
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(5) The performance of the contract must not impose
any hardship on the defendant, such as he could
not foresee;
(6) The contract must be capable, of specific execution
through a decree of the Court,"
55. The appeal Court should not interfere with the
judgment of the trial Court only because it is
not right but when it is clearly wrong. Even in
regular suits, the appeal courts are loathe to
interfere with the findings of fact arrived at by
the trial Court on the basis of oral
evidence. (See Ratanlal Nahata v. Nandita Bose
reported in 1997 (1) CHN 392).
56. There is no dispute that an order of specific
performance is a discretionary one. In an appeal
against such an order, the appellate Court generally
does not interfere with the discretion exercised by
the trial Judge unless it appears that while
exercising such discretion the trial Judge has
wrongly applied the principles for grant of such
discretion or unless it is established that such
discretion has been unreasonably or capriciously
used. In this connection reference may be made to
the decision of Supreme Court in Uttar Pradesh Co-
operative Federation Ltd. v. Sunder Bros. of Delhi,
reported in AIR 1967 249. In that decision the
Supreme Court was dealing with an appeal against
an order granting stay in exercise of power under
Section 34 of the Arbitration Act, which is
undoubtedly a discretionary power. While
discussing the scope of the said appeal the Apex
Court held that where the discretion vested in the
Court has been exercised by the lower court, the
appellate Court would be slow to interfere with the
exercise of its discretion. In dealing with the matter
raised before it at the appellate stage, the appellate
Court would not be justified in interfering with the
discretion under appeal solely on the ground that if
it had considered the matter at the trial stage it
might have come to a contrary conclusion. If the
discretion has been exercised by the trial Court
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reasonably and in a judicial, manner the fact that
the appellate Court could have taken a different
view may not justify such interference with the trial
Court's exercise of discretion. If it appears to the
appellate Court that in exercise of its discretion the
trial Court had acted unreasonably or capriciously
or has ignored the relevant fact, then it would be
open to the appellate Court to interfere with the
trial Court's exercise of discretion.
57. Having regard to the evidence on record, it cannot
be said, by any stretch of imagination that in
exercise of its discretion, the Trial Court acted
unreasonably or capriciously or has ignored the
relevant facts or any relevant piece of evidence.
58. Let me now deal with the last contention canvassed
on behalf of the appellant. According to the learned
counsel appearing for the appellant, the plaintiff
was not ready and willing to perform his part of the
contract. In other words, although it is not in
dispute that the plaintiff paid Rs. 11 Lac to the
defendant No. 2 out of the total amount of sale
consideration of Rs. 15 Lac, yet there is nothing on
record to indicate that the plaintiff was ready and
willing to pay the balance amount of Rs. 4 Lac and
get the sale sale deed executed. According to the
learned counsel appearing for the appellant, the
plaintiff seeking a decree of specific performance
needs to show his readiness and willingness all
through out. To this contention of the learned
counsel appearing for the appellant, the reply of the
learned counsel respondent No. 1 - original plaintiff
is that a subsequent purchaser cannot take the plea
that the plaintiff is not ready and willing to perform
his part of contract, more particularly, when the
defendant No. 2 did not deem fit to appear and
oppose the suit of the plaintiff.
59. So far as the position of law in this regard is
concerned, Mr. Thakkar, the learned counsel
appearing for the plaintiff is wrong.
60. In M.M.S. Investments, Madurai v. V.
Veerappan [(2007) 9 SCC 660], while stating the
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background facts, the learned Judges referred to a
suit for specific performance which resulted in a
decree passed by the trial Court. After the decree
was passed, the defendants through their Power of
Attorney sold a large extent of properties, including
the subject-matter of the suit, in favour of certain
other persons, who happened to be the appellants
before the Supreme Court. In that case, the High
Court had held that there would be no bar for the
appellant to raise any issue on merits of the appeal
on the facts of that case except the defence of
readiness and willingness as provided under Section
16(c) of the Specific Relief Act.
61. The Supreme Court went on to distinguish a three-
Judge Bench judgment in Ram Awadh (dead) by
Lrs. v. Achhaibar Dubey [(2000) 2 SCC 428] and
held as follows:
"6. Questioning the plea of readiness and willingness is
a concept relatable to an agreement. After
conveyance the question of readiness and
willingness is really not relevant. Therefore, the
provision of the Specific Relief Act, 1963 (in short
"the Act") is not applicable. It is to be noted that
the decision in Ram Awadh case relates to a case
where there was only an agreement. After the
conveyance, the only question to be adjudicated is
whether the purchaser was a bona fide purchaser
for value without notice. In the present case the
only issue that can be adjudicated is whether the
appellants were bona fide purchasers for value
without notice. The question whether the appellants
were ready and willing is really of no consequence.
In Ram Awadh case the question of the effect of a
completed sale was not there. Therefore, that
decision cannot have any application so far as the
present case is concerned. Once there is a
conveyance the concept would be different and the
primary relief could be only cancellation."
62. Ram Awadh (supra) is a judgment by three Judges
of the Supreme Court overruling Jugraj
Singh v. Labh Singh [(1995) 2 SCC 31], in which it
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was held that the plea that the plaintiff is not ready
and willing to perform the contract is personal only
to the seller-defendant. Subsequent purchasers
cannot take this plea. This was stated to be an
erroneous view of the law by the three Judge
Bench, and the judgment in Jugrag Singh was set
aside as follows:
"6. The obligation imposed by Section 16 is upon the
Court not to grant specific performance to a plaintiff
who has not met the requirements of clauses (a),
(b) and (c) thereof. A court may not, therefore,
grant to a plaintiff who has failed to aver and to
prove that he has performed or has always been
ready and willing to perform his part of the
agreement the specific performance whereof he
seeks. There is, therefore, no question of the plea
being available to one defendant and not to
another. It is open to any defendant to contend and
establish that the mandatory requirement of
Section 16(c) has not been complied with and it is
for the Court to determine whether it has or has not
been complied with and, depending upon its
conclusion, decree or decline to decree the suit. We
are of the view that the decision in Jugraj Singh
Case is erroneous."
63. However, on facts, I am at one with Mr.Thakkar
that there is nothing in the evidence led by the
appellant herein to indicate that the plaintiff was
not ready and willing to perform his part of the
contract. Having paid almost 90% of the sale
consideration, there was no good reason thereafter
for the plaintiff not to pay the balance amount of
Rs.4 Lac and get the sale deed executed in his
favour.
64. In such circumstances, the contention as regards
readiness and willingness on the part of the plaintiff
to perform his part of the contract, as raised by the
appellant, should fail.
65. In the overall view of the matter, I have reached to
the conclusion that I should not disturb the
judgment and decree passed by the Trial Court. In
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my view, once the Trial Court, on the basis of the
materials on record, has thought fit to exercise the
discretion in favour of the plaintiff for grant of
specific performance, then this Court sitting in
appeal should be loath to interfere with such a
discretionary relief and, more particularly, when the
appellant has failed to prove that he is a bona fide
purchaser in good faith of the suit property for
value without notice.
66. If the appellant herein is of the view that he has
been cheated by the defendant No. 2, then he
should initiate appropriate legal proceedings before
the appropriate forum in accordance with law
including one for the recovery of the sale
consideration paid by him to the defendant No. 2.
67. In view of the aforesaid discussion, this First
Appeal fails and is hereby dismissed."
45. As noted above, trial Court based its findings on
extensive reference to material on record and by assigning
reasons. Even appellate Court has re-appreciated same and
concurred with trial Court findings albeit in fewer words. It is
settled law that an appellate Court concurring with findings of
original Court need not traverse every observation, conclusion
and finding and assign detailed reasons.
46. First appellate Court took note of fact that defendant
no.2 admittedly did not receive original title deeds with regard
to suit property from defendant no.1 at time of execution of
Ex.D5 - sale deed and there was no proper explanation for
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same. It held, it would be normal for any person purchasing
immovable property to insist on original title deeds of demised
property. Apart from above, first appellate Court noted that
father-in-law of defendant no.2 was examined as DW.2. In his
deposition, DW.2 stated that he was aware of earlier
agreement of sale between plaintiff and defendant no.1.
Though he claimed not to have informed defendant no.2 about
same, Appellate Court concluded such assertion to be
unbelievable. On said reason, it concurred with trial Court
findings and dismissed Appeal.
47. Indeed, plaintiff (PW.1) deposed that defendant no.2
was aware of agreement of sale in his favour and admitted that
about 2-3 months prior to sale deed, plaintiff was aware of
negotiation between defendants no.1 and 2. It is also seen that
apart from plaintiff deposing to have informed defendant no.2
about prior agreement of sale in his favour, he also examined
PW.4, who had accompanied him when plaintiff met
defendants. Trial Court noted that deposition of PWs.1 and 4
withstood cross-examination.
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48. At same time, failure to enquire and verify about
original title deeds prior to purchase and statement of DW.2
(father-in-law of defendant no.2) that he was aware of
agreement of sale in favour of plaintiff prior to purchase by
defendant no.2 but had not informed defendant no.2 would
both appear unnatural and as such unacceptable. On effort for
verification deposed by defendant no.2 was enquiry with
defendant no.1 himself about title over suit property which was
assured to him and except tax paid receipts, no other
documents were given. It is also seen, defendant no.2 feigned
ignorance to suggestion whether he had enquired with
defendant no.1 about manner and mode of acquisition of title
over suit property.
49. When both Courts have considered above material
while arriving at conclusion about defendant no.2 not being
bonafide purchaser, same would dissuade this Court from
interference, especially in an Appeal under Section 100 of CPC.
Hence, substantial question of law no.1 is answered in
affirmative.
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50. Further, Hon'ble Supreme Court in UN K, that once
Courts arrive at conclusion that agreement of sale is duly
proved, specific performance should not be denied by taking
note of amendment to Section 20 of SRA and holding such
principle would guide even to agreements of sale executed prior
to said amendment. Consequently, substantial question of law
no.2 would also require to be answered in affirmative.
51. In view of above, following
ORDER
Appeal is dismissed with costs.
Sd/-
(RAVI V. HOSMANI)
JUDGE
psg/AV/GRD
