Sri Suresh Bhatia vs Smt K Manjula
2025 Latest Caselaw 10674 Kant

16. Learned counsel appearing for the legal

representatives of defendant No.7 stated that during the

pendency of the suit itself, defendant No.7 died on

09.01.2010 and the suit was dismissed on 21.11.2011. His

contention is that therefore the suit has been decreed

against a dead person. He further states that defendant

No.7 and by extension, his legal representatives are

bonafide purchasers of the suit schedule property and

therefore the suit was correctly dismissed.

17. The plaintiff/appellant submitted his

examination-in-chief by way of an evidence affidavit dated

31.01.2011 and was also called for the purposes of his

examination-in-chief in Court and his depositions were

recorded on 28.03.2011 and on 17.09.2011.

18. The PW.2, who is a witness to the Aide

Memorie, also submitted his evidence by way of an

affidavit dated 21.06.2011 and was also called to testify in

his examination-in-chief before the Court on 21.07.2011.

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19. The Aide Memorie dated 23.07.2004 was proved

by the PW.1 and marked as Ex.P1. He also proved and

marked Ex.P2, which were the four unserved envelopes

(pertaining to notice). Ex.P3 is the statement of the over

draft account of the plaintiff/appellant, in his account

maintained at the ABN-AMRO Bank showing the

description, deposit, withdrawal and balance amounts

therein. Ex.P4 is the paper publications. Ex.P5 which is the

sale deed dated 08.12.2004 executed by the defendant

No.1-Manjula in favour of the Defendant Nos. 5, 6, 7 & 8

transferring the disputed property for a sale consideration

of Rs.47.00 Lakhs. This was proved by the PW.1 on

17.09.2011. Yet another sale deed dated 04.11.2004 was

marked as Ex.P6 by the PW.1, which is the sale deed

entered into between the Defendant Nos.2, 3 & 4 as

'vendors', in their personal capacity as well as in their

capacity as GPA holders for,- (a) Smt.Subbamma; (b)Smt.

Chikkammaiah @ Hanumakka; (c) Smt. R. Shakuntala;

and (d) Smt. R. Vishalakshi, in favour of the Defendant

Nos. 5, 6, 7 & 8 being the remaining part of the disputed

property for a sale consideration of Rs.47.00 Lakhs.

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20. The points for determination that would arise in

the instant case are:-

i) Whether the Aide Memorie dated 23.07.2004 executed by the defendant Nos. 1 to 4 (Ex.P1) is an agreement to sell and is capable of being enforced?

ii) Was time not the essence of the contract?

iii) Whether the plaintiff/appellants are entitled to a decree of specific performance?

21. The points for determination are taken up for

consideration together.

22. In the written statement of the defendants No.1

to 4, the area of Sy.No.78/3 being 32 guntas and Kharab

land of 6 guntas which is described in the schedule of the

plaint is not denied. It is also not denied that the

defendants No.1 to 4 are the owners of the disputed

property.

23. In their written statement, the defendants No.1

to 4 have denied entering into an agreement to sell the

disputed land on 23.07.2004. It is also denied that an

Aide Memorie had been executed and the plaintiff is ready

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and willing to pay duty and penalty on that document as it

is insufficiently stamped and that out of the total extent of

land 19 guntas was agreed to be registered after legal

clearance and paper publication to be issued within 20

days, and that the balance land to be registered within two

months.

24. However, what the defendants No.1 to 4 have

not denied is that the Ex.P1, which is the Aide Memorie,

does bear their signatures. The Aide Memorie bears

signatures of the four 'sellers' over the names of the

defendants No.1 to 4 and 'purchaser' who is the plaintiff,

and is attested by two witnesses on 23.07.2004. The

signatures of the defendants No.1 to 4 in their written

statement tallies with the signatures of the 'sellers' in

Ex.P1, the Aide Memorie. Therefore, it is held that the

Ex.P1, the Aide Memorie was signed and executed by the

defendants No.1 to 4.

25. Now coming to the contents of the Aide

Memorie:-

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25.1. The 1st page discloses the names and address

of the owners, that is the defendant Nos. 1 to 4. The

name of the purchaser that is the plaintiff is also

mentioned on page-2 are the description and extent of the

property (including the Survey No., area, location and

boundaries), the rate agreed, the terms of advance

payment (which reflects cheque of Rs.6.00 Lakhs in favour

of the defendant No.2 and a cheque of Rs.5.00 Lakhs in

favour of defendant No.1).

25.2. The aforesaid terms of payment and

advance, continue on page 3 of the Aide Memorie, which

also reflect that both cheques were dated 08.07.2004.

Moreover, 16 guntas + 03 guntas kharab land is to be

registered after legal clearances and paper publication

within 20 days of the above and balance area within two

months of earlier registration. On page 3 itself, against the

heading of 'other terms', it is mentioned that all legal heirs

of the above mentioned vendors to sign at the time of

registration and further agreement if any. Thereafter, on

page 3, the following covenants are mentioned:

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"The Vendors undertakes with the Purchaser that they have not signed any agreement with any third parties and they further undertakes with the purchaser that they will not encumber the aforesaid property by way of Sale, Lease, Mortgage etc., during the subsistence of the Agreement of Sale and till the Sale Deed is registered in favour of the purchaser or in favour of the nominee/s. Further, it is hereby agreed that absolute sale of the Scheduled property shall be completed and vacant position shall be delivered against payment of the balance sale consideration before the Sub-Registrar and the sale is subject to marketability of title and free from all encumbrances and the cost of Stamp paper and registration fees to be met by the Purchaser and all the title deeds will be produced to the satisfaction of the Purchaser's advocate and on failure the sellers will return the amount on demand and till then the purchaser will have the claim on the property and can also enforce this contract at the sellers cost and in case variation in the area in the property is found on joint survey, proportionate variation will be made in the sale price."

25.3. Lastly, on page 4 the following recitals appear:-

"The Scheduled property is free of all encumbrances and the seller/s are the absolute owners and sole signatories for the sale of property."

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"The contents of this agreement has been read over and explained to the sellers in their native language by the witnesses to this agreement."

26. In the written statement filed by the

defendants Nos. 1 to 4 it is stated that the relief as

claimed in the suit is incapable of being granted as insofar

as 19 guntas, that is half portion of the suit schedule

property is concerned, the time for performance of the

contract was fixed to be 20 days from the alleged

agreement and the time thus fixed has expired and the

alleged agreement is incapable of being enforced.

However, the 20 days referred to in the writ petition finds

mention in the 'terms of payment and advance' in the Aide

Memorie which states that 16 guntas + 03 guntas Kharab

to be registered after legal clearances and paper

publication within 20 days of the above (i.e., 08.07.2004,

being the date mentioned in both the cheques) and

balance area within two months of earlier registration.

That is to say, the period of 20 days would be upto

28.07.2004, within which the said 19 guntas land was

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required to be registered after legal clearances and paper

publication. Thus the aforesaid terms and details

mentioned in the 'Aide Memorie' reflect that it is an

agreement to sell the disputed land. Given the provision of

Article 54 of the Limitation Act, 1963, a period of three

years is the limitation for filing a suit for specific

performance. The aforesaid suit was filed on 09.11.2005.

It is pertinent to mention here that mere title of a deed

should not be seen to determine the real nature of the

document, but the intention is to be gathered from the

recitals in the deed, the conduct of the parties and the

evidence on record10. As noted above, neither were the

PW1 and PW2 cross examined by any of the defendants,

nor did any of the defendants testify before the trial court.

27. Though the learned counsel for the defendants

nos. 1 to 4 has contended that the trial court was justified

in observing that the 'Aide Memorie' and the agreement to

sell were different deeds and therefore the suit must fail

due to non-production of the agreement to sell, however,

B.K. Muniraju v. State of Karnataka - (2008) 4 SCC 451

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we find that in the written statement of the defendant nos.

1 to 4 there is neither any averment nor indication that

the Aide Memorie and agreement to sell are separate

documents. As a matter of fact, in paragraph no.14 of the

written statement it is stated that the defendants nos.1 to

4 have never executed any agreement to sell.

28. On failure of the defendants No.1 to 4 to

execute the sale deed, legal notice on behalf of the

plaintiff was dispatched on 27.08.2004 by Registered Post

with Acknowledgement Due. However, the covers were

returned unserved. In the plaint, the plaintiff has stated

that he has been ready and willing to perform his

obligations and ready to pay the entire balance of

consideration and have the sale deed registered at his

cost. It was stated that, he has the necessary

wherewithal to pay the same. He owns immoveable

property in Bengaluru; that he requested the defendant to

receive the balance of consideration and have the sale

deed registered, but the defendants are postponing the

same on some pretext or the other. The plaintiff as PW1

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has stated that in his testimony that he has been ever

ready and willing to perform his obligations namely by

paying the balance of consideration and have the sale

deed registered at his cost and he has the wherewithal to

pay the same. The PW1 has not been cross-examined. The

suit was filed about one year and four months from the

date of the cheques dated 08.07.2004. Thus it is inferred

that the plaintiff was ever ready and willing to perform his

part of the contract.

29. As far as the plea in the written statement that

time was the essence of the contract, the terms in the

Aide Memorie that have been quoted above, reveal that

defendants nos.1 to 4 undertook that they have not signed

any agreement with any third parties and that they will

not encumber the aforesaid property by way of sale, lease,

mortgage etc., during the subsistence of the Agreement of

Sale and till the Sale Deed is registered in favour of the

purchaser or in favour of the nominee/s. Further, it was

agreed that absolute sale of the Scheduled property shall

be completed and vacant position shall be delivered

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against payment of the balance sale consideration before

the Sub-Registrar and the sale is subject to marketability

of title and free from all encumbrances. All title deeds

were required to be produced to the satisfaction of the

plaintiff's advocate and on failure the defendants would

return the amount on demand and till then the plaintiff

would have claim on the disputed property and could also

enforce this contract at the sellers cost and in case

variation in the area in the property is found on joint

survey, proportionate variation would be made in the sale

price. Thus the terms reflect that time was not the

essence of the contract, but that it should be reasonable

time. The law in this regard was iterated by the Supreme

Court in Gaddipati Divija and Another Vs. Pathuri

Samrajyam and others11. As already stated above, the

Aide Memorie though did prescribe a schedule specifying

certain time periods for execution of two sale deeds,

however the plaintiff has proceeded to seek its

enforcement well within time and without untoward delay.

2023 SCC Online SC 442

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As such the plaintiff cannot be non-suited on the ground

that time is the essence of contract.

30. As far as the averment made in the plaint that

the amounts of Rs.6.00Lakhs and Rs.5.00 Lakhs were paid

by cheques drawn in favour of the defendant Nos. 2 & 1

respectively and that both the cheques were encashed,

this is not denied by the defendants No.1 to 4.

Therefore, the consideration for the agreement which is

the Aide Memorie being the amount of money tendered by

the two cheques which were encashed by the defendants,

the contract stood concluded.

31. As noted aforesaid, neither the plaintiff was

cross-examined by any of the defendants and neither did

any of the defendants appear as witnesses to testify. As

such adverse inference is liable to be drawn against the

defendants. (ref: Muddasani Venkata Narasaiah Vs.

Muddasani Sarojana12 and Vidhyadhar v. Manikaroa &

(2016) 12 SCC 288

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Another.13) Therefore, we answer points No. (i), (ii) &

(iii) in the affirmative.

32. As far as the contention of the learned counsel

for the petitioner is concerned that the defendant no.7 had

died during the pendency of the suit but his legal

representatives were not brought on record, it is noted

that the legal representatives of the defendant no.7 have

already been substituted in the instant appeal after his

death was intimated before the Court.

33. This brings us to the question that what would

be the effect of the aforesaid findings and what relief can

be granted. As noted aforesaid, the disputed property has

been sold by means of two sale deeds dated 08.12.2004

and 04.11.2004 by the defendant Nos. 1 to 4 in favour of

the defendant Nos.5, 6, 7 & 8. A decree of specific

performance has been sought against all the defendants,

with an averment being made in Para-17 of the plaint that

defendant Nos. 5 to 8 are bound to join in execution of the

sale deed in favour of the plaintiff or his nominees along

(1999) 3 SCC 573

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with defendant Nos. 1 to 4. If the defendants No.5 to 8 do

not join, they would have to pass on their title to the

plaintiff.

34. The Supreme Court in the case of Maharaj

Singh and Others Vs. Karan Singh and others14

considered the question that whether in view of the

decision of this Court in B. Vijaya Bharathi Vs. P.

Savitri and Others15, the plaintiffs are not entitled to a

decree of specific performance in the absence of any

prayer for cancellation of the two subsequent sale deeds?

Referring to the judgment of a Bench of three Hon'ble

Judges of the Supreme Court in Durga Prasad Vs. Deep

Chand16 the Supreme Court observed as follows:-

20. Now, we deal with another argument that the plaintiffs ought to have prayed in the suit to cancel the subsequent sale deeds executed by the first defendant. On this aspect, the law has been laid down by a Bench of three Hon'ble Judges of this Court in Durga Prasad v. Deep Chand [Durga Prasad v. Deep Chand, (1953) 2 SCC 509] , paras 40 to 42 of the said decision read thus : (SCC p. 532)

(2024) 8 SCC 83

(2018) 11 SCC 761

(1953) 2 SCC 509

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"40. First, we reach the position that the title to the property has validly passed from the vendor and resides in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier "contractor". As the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to revest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him. We do not know of any case in which a reconveyance to the vendor was ordered but Sulaiman, C.J. adopted the other course in Kali Charan Singh v. Janak Deo Singh [Kali Charan Singh v. Janak Deo Singh, 1932 SCC OnLine All 154] . He directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the contract of sale of which the plaintiff sought specific performance. But though this sounds logical the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, we do not think that is a desirable solution.

41. We are not enamoured of the next alternative either, namely, conveyance by the subsequent purchaser alone to the plaintiff. It is true that would have the effect of vesting the title

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to the property in the plaintiff but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendor's agreement with the plaintiff to which he would never have agreed had he been a free agent; and if the original contract is varied by altering or omitting such terms the court will be remaking the contract, a thing it has no power to do; and in any case it will no longer be specifically enforcing the original contract but another and different one.

42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin [1930 SCC OnLine Cal 46] and appears to be the English practice. See Fry on Specific Performance, 6th Edn., p. 90, Para 207; alsoPotter v. Sanders [Potter v. Sanders, (1846) 6 Hare 1 : 67 ER 1057] . We direct accordingly."

21. Reliance is placed by the appellants on the decision of this Court in B. Vijaya Bharathi [B. Vijaya Bharathi v. P. Savitri, (2018) 11 SCC 761 : (2018) 5 SCC (Civ) 239] . In para 17 of the said decision, this Court held thus : (SCC pp. 767-68)

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"17. It must also be noted that though aware of two conveyances of the same property, the plaintiff did not ask for their cancellation. This again, would stand in the way of a decree of specific performance for unless the sale made by Defendant 1 to Defendant 2, and thereafter by Defendant 2 to Defendant 3 are set aside, no decree for specific performance could possibly follow. While Mr Rao may be right in stating that mere delay without more would not disentitle his client to the relief of specific performance, for the reasons stated above, we find that this is not such a case. The High Court was clearly right in finding that the bar of Section 16(c) was squarely attracted on the facts of the present case, and that therefore, the fact that Defendants 2 and 3 may not be bona fide purchasers would not come in the way of stating that such suit must be dismissed at the threshold because of lack of readiness and willingness, which is a basic condition for the grant of specific performance."

(emphasis supplied)

22. A Bench of two Hon'ble Judges has rendered this decision. Unfortunately, the attention of the Bench was not invited to binding precedent in the form of a decision of a larger Bench in Durga Prasad [Durga Prasad v. Deep Chand, (1953) 2 SCC 509] . Hence, the decision in B. Vijaya Bharathi [B. Vijaya Bharathi v. P. Savitri, (2018) 11 SCC 761 : (2018) 5 SCC (Civ) 239] is not a binding precedent. Therefore, there was no requirement to make a prayer in the

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plaint for cancellation or setting aside the subsequent sale deeds.

23. Clauses (a) to (c) of Section 19 of the Specific Relief Act read thus:

"19. Relief against parties and persons claiming under them by subsequent title.--

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;

(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;"

(emphasis supplied)

24. In view of clause (b) of Section 19, the defendants who are claiming under the sale deeds executed after the execution of the suit agreement can be subjected to a decree of specific performance as the suit agreement can be enforced specifically against such defendants unless they are bona fide purchasers without the notice of the original contract. When, in a given case, the defendants, who are subsequent purchasers, fail to prove that they entered into

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the sale deed in good faith and without notice of the suit agreement, in view of Section 19(b), a decree for specific performance can be passed against such defendants. Therefore, in such a case where Section 19(b) is applicable, under the decree of specific performance, the subsequent purchasers can be directed to execute the sale deed along with the original vendor. There is no necessity to pray for the cancellation of the subsequent sale deeds.

35. Further, in Maharaj Singh, another question

that was considered was "were the second to fourth

defendants bona fide purchasers for value without notice

of the suit agreement?" The Supreme Court answered this

question as follows:-

"19. The three courts concurrently found that under the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976, clause (v) of Section 17(2) of the Registration Act, 1908 was amended, which made an agreement for the sale of an immovable property, a compulsorily registerable document in the State. On this aspect, no arguments have been canvassed by the appellants. Therefore, in view of Explanation 1 to Section 3 of the TP Act, the second to fourth defendants shall be deemed to have knowledge of the suit agreement, which was duly registered. It cannot be said that the second to fourth defendants had no knowledge of the suit agreement in view of the constructive notice. It is not their case that they took a search in the office of the Sub-Registrar before getting the sale deeds in their favour.

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Hence, it cannot be said that they paid money in good faith to the first defendant. Therefore, the second to fourth defendants can never be held to be bona fide purchasers who have paid consideration in good faith without the notice of the suit agreement."

36. Further, the fact that the plaintiff had entered

into an agreement to purchase the disputed property was

published in Kannada and English newspapers of

30.07.2004 and 31.07.2004 intimating about the purchase

and calling for objections. In view of the aforesaid, it

cannot be said that the defendant Nos. 5 to 8 are bonafide

purchasers. Accordingly, the defendants No.5 to 8 shall

join the defendant Nos. 1 to 4 in execution of necessary

sale deeds in favour of the plaintiff.

37. For the reasons aforesaid we pass the following

order:-

 i)     The appeal is allowed.

 ii)    The defendants shall execute and register deeds of

sale in favour of the plaintiff or his nominee/s in respect of the suit schedule property after receiving the balance of consideration from the plaintiff and are directed to put the plaintiff in possession of the suit property within a period of three months. The

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entire stamp duty and registration fee/ expenses payable on the sale deeds will be borne by the plaintiff.

iii) The plaintiff shall make good all deficiency/penalty in respect of the Aide Memorie within a period one month from today.

iv) In case the defendants do not comply with the directions, it shall be open to the plaintiff to seek execution of the decree.

v) The plaintiff shall be entitled to costs.

Sd/-

(JAYANT BANERJI) JUDGE

Sd/-

(K. V. ARAVIND) JUDGE

BVK/KGR