Telangana High Court

Ram Mohan Lal Desai, vs Prakash Chandrani, on 13 June, 2025

Author: Abhinand Kumar Shavili

Bench: Abhinand Kumar Shavili

     THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
                           AND
      THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA

          CITY CIVIL COURT APPEAL No.262 OF 2007

JUDGMENT:

(Per Hon'ble Smt. Justice Tirumala Devi Eada)

This is an appeal filed by the appellant being aggrieved by

the judgment and decree, dated 04.06.2007, passed in O.S.No.401

of 2005 by the learned III Additional Chief Judge, City Civil Court,

Hyderabad (for short "the trial Court").

2. The appellant herein is the defendant No.3, respondent No.1

is the plaintiff, respondent Nos.2 to 5 are the defendant Nos.1, 2, 4

and 5 before the trial Court and the parties herein are referred to

as they were arrayed in the suit before the trial Court for the sake

of convenience and clarity.

3. The case of the plaintiff before the trial Court is that the suit

schedule property bearing municipal Nos.10-2-317/5/1, 5/2 and

5/3, situated at Vijayanagar Colony, Hyderabad admeasuring 1000

Sq.yards was leased out by H.E.H., The Nizam, The Government to

Major Shankar Lal, by virtue of registered deed of Lease, dated

16.02.1953 and that the Government of Andhra Pradesh has

issued orders vide G.O.Ms.No.46 dated 02.07.2005, converting

leasehold rights to free hold on payment of amounts to the Andhra AKS,J & ETD,J CCCA No.262_2007

Pradesh Housing Board. It is further averred that the defendant

Nos.1 to 3 who are the sons of late Major Shankar Lal have

partitioned the said property among themselves which was reduced

into writing under a Memorandum of Family Arrangement Deed

dated 10.02.1996 and that the defendant Nos.1 to 3 agreed to sell

the mulgies in the suit schedule property which were allotted to

defendant Nos.1 to 3 bearing No.10-2-317/5/1, 10-2-317/5/2 &

10-2-317/5/1 and in addition to that the 3rd defendant had agreed

to sell the portion behind the Mulgi bearing No.10-2-317/5/1 i.e.

open land (totally admeasuring 357.88 Sq.yards allotted to 3rd

defendant), situated at Vijayanagar Colony, Hyderabad and thus,

defendant Nos.1 to 3 have entered into agreement of sale for a total

sale consideration of Rs.32,40,000/- @ Rs.3,60,000/- per mulgi

and the balance amount towards open land behind the mulgies, as

such, the agreement of sale was executed on 14.12.2004.

Pursuant to the agreement of sale, the plaintiff has paid the

advance sale consideration of Rs.12,10,000/- and that the receipts

were executed by them. He further submitted that as per the

terms of the agreement of sale they had to deliver vacant

possession of the property by evicting the tenants in the mulgies

but the defendants have been evading the plaintiff with a view to

gain illegally. It is his case that he is ready with the balance sale

consideration and has been always ready and willing to perform his AKS,J & ETD,J CCCA No.262_2007

part of contract. He further averred that defendant Nos.1 to 3 are

liable to pay amount to the Government as per the G.O.Ms.No.46

but in the event if they failed to pay the amount the plaintiff seeks

the leave of the Court to permit him to pay the amount to the

Housing Board to get the suit schedule property as free fold. Since

the defendants have not come forward to execute the registered

sale deed at their request which was finally made on 26.10.2005

he got issued a legal notice dated 05.11.2005 but in vain. Hence,

the suit.

4. The defendant Nos.1 and 2 have filed their written statement

admitting the execution of agreement of sale but stated that the

suit is premature and that the plaintiff was not ready and willing

for getting the sale deed registered in his favour. They further

submitted that they were ready and willing to execute the sale deed

in favour of the plaintiff and they further submitted that there is a

novation of contract and under the novated contract the plaintiff

had agreed to pay a sum of Rs.10 Lakhs more to defendant No.3.

They denied to have agreed to get the tenants evicted from the

premises. They stated that they have agreed to sell the property in

as is whereis condition. They further denied that the father of the

plaintiff has approached them on 26.10.2005 for execution of sale

deed. They have admitted the legal notice issued by the plaintiff, AKS,J & ETD,J CCCA No.262_2007

but they submitted that they have immediately called the plaintiff

and discussed with him and that the plaintiff has agreed to pay

Rs.10 Lakhs extra over and above the agreed sale consideration to

the 3rd defendant. They further submitted that they are ready to

refund the amount paid by the plaintiff in the event the plaintiff

does not agree for the novated contract.

5. Defendant No.3 has filed written statement denying the

agreement of sale itself. He has admitted that the property is a

leasehold property existing still in the name of their father and he

has also admitted that G.O.Ms.No.46 has been issued by the

Government. He has denied the partition among the legal heirs.

He further stated that he raised tin sheds in the open area of the

suit schedule property to conduct and carry on his profession of

taking tuitions. He has also denied the alleged sale consideration

and the payment of advance amount. He alleged that the

agreement of sale is a false, fabricated and created document in

collusion with defendant Nos.1 and 2 and in order to cause loss to

the defendant No.3 who is not in good terms with his brothers due

to long standing family disputes. Thus, he denied the very

execution of agreement of sale dated 14.12.2014 in favour of the

plaintiff. He further denied to have executed any receipt in favour

of the plaintiff. He further denied to have agreed to get the tenants AKS,J & ETD,J CCCA No.262_2007

evicted from the suit schedule property and he denied the issuance

of legal notice in his favour. Thus, prayed to dismiss the suit.

6. The defendant Nos.4 and 5 are the tenants of the suit

schedule property. Their written statement is to the effect that

they have been paying monthly rents to the landlords having

obtained the property for rent from Major Shankerlal and his sons

and that as on date there is no amount due by them towards the

payment of rents and that they are unnecessarily impleaded in the

suit as no relief is claimed against them.

7. Based on the above pleadings, the trial Court framed the

following issues for trial:

"1) Whether the suit is bad for joinder of causes of action relating to both parties under separate contracts of sale?

2) Whether defendants 1 and 2 agreed to get tenants vacated from the property?

3) Whether the plaintiff is ready and willing to perform his part of contract relating to defendants 1 and 2?

4) Whether the plaintiff agreed to pay additional sum of Rs.10 Lakhs to D3?

5) Whether 3rd defendant along with defendants 1 and 2 entered into contract of sale with plaintiff for sale of property?

6) Whether the plaintiff is entitled to specific performance and incidental reliefs as prayed for?

      7)     To what relief?"
                                                                         AKS,J & ETD,J
                                                                   CCCA No.262_2007

8. At the time of trial, PWs 1 and 2 were examined and Exs.A1

to A18 were marked on behalf of the plaintiffs. On behalf of the

defendants, DWs 1 and 2 were examined and Exs.B1 & B2 were

marked. Based on the evidence on record, the trial Court has

decreed the suit as follows:

"1. That a decree of specific performance of contract of sale dt 14.12.2004 is granted directing the defendants 1 to 3 to execute a registered sale deed in favour of plaintiff.

2. Clause-1 alone is subject to the condition of plaintiff depositing the balance of sale consideration of Rs.23,30,000/- into court to the account of the suit; and the defendants 1 to 3 or the plaintiff himself, shall approach the government with market value, for getting the land converted to freehold within a period of six months.

3. If the plaintiff opts for obtaining sale deed, even without government converting the land into freehold he can obtain the sale deed from the court or from the defendants 1 to 3, on depositing of requisite stamp and registration charges in a period of 45 days after expiry of six months.

4. If he did not opt for clause-(c) he is at liberty to withdraw the amount deposited by him and in that case, the decree remains unexecutable.

5. That the defendants 1 to 3 shall pay costs of the suit to the plaintiff besides bearing their own costs.

6. The suit against defendants 4 to 5 is dismissed as unnecessary and without costs."

9. Aggrieved by the said judgment and decree, the present

appeal is preferred by defendant No.3.

10. Heard the submissions of Sri P.S.Rajasekhar, learned

counsel for appellant, Sri Dharmesh D.K.Jaiswal, learned counsel

representing Sri V.Ramachander Goud, learned counsel for

respondent No.1, Sri M.A.Basith, learned counsel for respondent AKS,J & ETD,J CCCA No.262_2007

Nos.4 and 5, Sri R.M.Vishwa Karma, learned counsel for

respondent Nos.6 to 8.

11. The learned appellant counsel has submitted that the

judgment and decree of the trial Court is contrary to law and

weight of evidence and that the Court below has made an error in

decreeing the suit. He further submitted that the trial Court has

wrongly appreciated the capacity of the appellant and his brothers

to enter into any contract for sale of the suit schedule property. He

further argued that the lease given to Major Shankerlal is a

conditional lease and that the lessees cannot sell the property and

that the agreement of sale goes against the terms of the lease deed,

which is not tenable in the eye of law. He further submitted that

the trial Court failed to appreciate the said facts and also has

ignored the legal position that no one can pass on a better title

than what he had. He submitted that when the defendants do not

have a perfect title, the question of conveying the same in favour of

the plaintiff does not arise and thus, the agreement of sale is a

nullity in the eye of law. The counsel has further argued that the

trial Court has passed a contingent decree which is unknown to

law. That the trial Court has visualized certain conditions to be

fulfilled and has passed the decree in such a way that even if the

said condition is not fulfilled, the plaintiff can get the sale deed AKS,J & ETD,J CCCA No.262_2007

executed, thus, the judgment is contrary to the legal principles and

is liable to be set aside. He therefore, prayed to allow the appeal by

setting aside the impugned judgment and decree.

12. The learned respondents counsel, on the other hand, has

submitted that the trial Court has given a reasoned judgment and

that the contingent contracts are valid and the agreement of sale in

the present case is one such a contingent contract and that the

trial Court has appreciated the said fact in a proper perspective.

He further submitted that in terms of G.O.Ms.No.46, the defendant

can sell the property after getting the freehold rights from the

Government and thus, they have executed the agreement of sale.

The trial Court decree speaks about the said conditions mentioned

in the agreement of sale and that it is tenable in the eye of law. He

further submitted that the plaintiff has already paid an advance

amount of Rs.12,10,000/- to the defendant Nos.1 to 3 and has

always been ready and willing to perform his part of contract but

the defendants failed to comply with the terms of the agreement.

He further submitted that the defendants have agreed to get the

tenants evicted from the suit schedule property but have not

initiated any steps in that regard and thus, failed to perform their

part of contract. He therefore, submitted that the trial Court has AKS,J & ETD,J CCCA No.262_2007

appreciated the evidence on record and has passed a reasoned

judgment and thus, prayed to uphold the same.

13. Based on the above rival submissions, this Court frames the

following points for consideration:

1) Whether the agreement of sale dated 14.12.2004 is true, valid and binding on the defendants?

2) Whether the plaintiff is entitled to a decree of specific performance?

3) Whether the judgment and decree of the trial Court is sustainable in law and under the facts?

      4)    To what relief?


14.    POINT NOs.1 AND 2:

a)     The contention of the appellant herein is that he has never

entered into an agreement of sale dated 14.12.2004 and that the

defendant Nos.1 and 2, in collusion with the plaintiff have filed the

suit on false grounds. The admitted facts in the present case are

that the suit schedule property is a leasehold property given by the

H.E.H., The Nizam in favour of Major Shankerlal and that

defendant Nos.1 to 3 are the sons of Major Shankerlal. The said

lease deed is under Ex.A16. A perusal of the said lease deed

reveals that it is executed by the Government in favour of Major

Shankerlal and there are certain covenants and under clause-7 it

is mentioned as follows:

AKS,J & ETD,J CCCA No.262_2007

"7. Not to assign, transfer or sub-let the premises hereby demised without first obtaining in writing the permission of the Superintending Engineer, City Improvement Board. Permission to sell the lease-hold rights in the premises hereby demised will be communicated only on pre-payment of the total market value of the premises demised either by the lessee or by the prospective purchaser"

b) Though the family arrangement was denied by defendant

No.3 in his written statement, he has admitted the same in his

cross examination. He has deposed that the house bearing

municipal No.10-2-317/5/1 belongs to him and it consists of a tin

shed and he is giving tuitions in that shed and he further stated

that the portion of defendant No.1 bears municipal No.10-2-

317/5/A and defendant No.2 was also allotted share in the same

portion. Thus, it proves that there was some family arrangement

among the family members of defendants but that does not have

any impact on the validity of the agreement of sale. The lease deed

itself clarifies that the lessee is not supposed to lease out, sell or

alienate the property in any manner without the prior permission

from the Government.

c) A perusal of the agreement of sale filed under Ex.A1 reveals

that at Clause No.6 it is mentioned in the agreement of sale "That

the Purchaser shall in the event the Government direct payment of

market value in respect of schedule property, shall pay the amount AKS,J & ETD,J CCCA No.262_2007

in respect of property hereby agreed to be sold to get the property

converted to freehold" and further Clause No.8 reads as follows:

"8. That the Sale Deed will be executed within 6 months from this date, irrespective of the fact, whether the Government grants permission for freehold or not. However, both the parties are at liberty to extend the time by mutual consent. It is further agreed that if the Purchaser pay any further amounts the Vendors hereby take to pass valid receipts for the same".

d) Thus, it is clear from the terms of the agreement that the

defendants have agreed to the term that the purchaser i.e. the

plaintiff shall pay the amount in respect of the property to the

Government in case if the Government issues such direction. It

was further agreed upon that the sale deed will be executed within

a period of six months irrespective of the fact as to whether the

Government grants permission for freehold or not, which is

contrary to G.O.Ms.No.46 and the lease deed under Ex.A16.

G.O.Ms.No.46 is the policy decision taken by the Government to

make the leasehold lands into freehold on collecting certain

amounts fixed by the government within a period of one year.

Unless the conditions stipulated therein are fulfilled the land

cannot be converted into freehold and the lessee will not be entitled

to convey the title of the said land in favour of any other person.

When it is clearly mentioned that they have to obtain prior

permission to lease out or alienate the property, the question of

executing the sale deed irrespective of the land being declared as AKS,J & ETD,J CCCA No.262_2007

freehold goes against the lease deed itself. If a condition of such

nature is stipulated ignoring the terms laid down in Ex.A16 lease

deed and the G.O.Ms.No.46, then the agreement itself goes against

the public policy, which is not tenable in the eye of law. Any

agreement which is against the public policy is a void agreement.

e) It is pertinent to refer to Section 23 of the Contract Act with

regard to the unlawful agreement, which is extracted hereunder for

the sake of reference:

"23. What considerations and objects are lawful, and what not.--The consideration or object of an agreement is lawful, unless--

it is forbidden by law; or is of such a nature that if permitted, it would defeat the provisions of any law; or is fraudulent ; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."

f) Learned Counsel for respondent No.1 relied upon a judgment

of the Apex Court in Mrs.Chandnee Widya Vati Madden vs Dr. C.

L. Katiai, & Others 1. In the said case, the plaintiffs entered into a

contract of sale and the deed of agreement had a covenant that the

vendor shall obtain permission of the Chief Commissioner to the

1963 SCC OnLine SC 183 AKS,J & ETD,J CCCA No.262_2007

transaction of sale within two months of the agreement, and if the

said permission was not forthcoming within that time, it was open

to the purchasers to extend the date or to treat the agreement as

cancelled. The trial Court, first appellate Court and High Court

have granted alternative relief in the said case and when it reached

the Supreme Court, it was held that an agreement of sale is

executed but it cannot be specifically performed without

permission or sanction of any authority, then the suit can be

decreed and the decree for specific performance can be granted

subject to obtaining such permission from the competent

authority.

g) In the present case, there was a specific term laid down in

the agreement of sale stating that even if the defendants failed to

obtain the permission of the Government to convert it into freehold

property and if the purchaser is willing to buy the same, still the

sale deed can be executed. Thus, the facts in the aforesaid

decision defer with that of the present case because in the present

case there is condition stipulated which says that even if the

permission is not obtained by the defendant, the sale deed can be

executed at the will of purchaser. Thus, the cited decision is not

applicable to the case on hand.

AKS,J & ETD,J CCCA No.262_2007

h) Learned counsel further relied on a decision of this High

Court in Mattapalli Venkata Rao v. Kotla Alivelu

Mangatayaramma 2. It was held by the High Court of Judicature

at Hyderabad that "in a suit for specific performance filed by the

purchaser, the vendor cannot put forward the plea that he had no

title or defective title, but if the suit is by the vendor, the purchaser

can plead that the vendor had no title or had defective title as a

defence. The present suit is one filed by the purchaser and the plea

now put forth by the appellant No.1 as to the defect in his title is

unavailable to the appellants and specific performance cannot on

that ground be denied". In the case on hand, the primary

contention of the defendant No.3 is that he never executed any

agreement of sale and that without obtaining the permission of the

competent authority the land cannot be alienated and further the

Clause in the agreement which specifies that the even if the

defendant fails to obtain permission from the competent authority,

if the purchaser wishes, the sale deed can be executed by the

defendants in favour of the purchaser. Thus, the plaintiff himself

is very well aware of the incompetency of the defendants in

executing the sale deed without the prior sanction of the competent

authority. Being very well aware of the status of the property, still

the agreement of sale was executed. Thus, in the present case, the

1997 (1) A.P.L.J. 427 (HC) AKS,J & ETD,J CCCA No.262_2007

defendant is not raising any new plea of defective title, therefore,

the cited decision is not applicable to the case on hand.

i) Clause No.8 of the agreement of sale under Ex.A1 invalidates

the agreement itself. When the agreement itself is invalid it cannot

be said to be true and binding on the defendants, thus it is held

that the agreement of sale is not true, valid and binding on the

defendants.

j) The execution of the agreement itself is denied by defendant

No.3 while defendant Nos.1 and 2 have admitted the execution but

they have only contended to the extent that the plaintiff was not

ready and willing to perform his part of contract. This probabilizes

the contention of defendant No.3 that defendant Nos.1 and 2 are

acting in collusion with the plaintiff.

k) The counsel for appellants has also relied upon a decision of

the Apex Court in P.Purushottam Reddy v. Pratap Steels Ltd. 3

In the said case, the permission of the Government was not

obtained within the stipulated time and the issue of readiness and

willingness was not dealt with by the trial Court. Therefore, the

High Court noted that there were three additional issues required

to be framed as to the maintainability of suit, the readiness and

(2002) 2 SCC 686 AKS,J & ETD,J CCCA No.262_2007

willingness of the parties and the entitlement of plaintiff to specific

performance. Thus, the High Court has set aside the judgment

and decree of the trial Court and remanded the case to the trial

Court giving liberty to the parties to adduce evidence on the

additional issues without amendment of pleadings. When the

matter reached the Apex Court it was held that there is no

necessity for remand in the said case. But as per the facts in the

present case, the permission of the Government was not obtained

and further there is also a condition stipulated in the contract that

it can be registered even without the permission. Further the

readiness and willingness aspect was also discussed by the trial

Court in the case on hand and the question of remanding the

matter does not arise. Therefore, the cited decision cannot be

applied to the facts and circumstances of the present case.

l) Learned counsel for respondent No.1/plaintiff relied upon a

decision of the Apex Court in R.C.Chandiok v. Chuni Lal

Sabharwal 4 to putforth a point that the time is not an essence of

contract with regard to immovable property. The said question did

not fall for consideration in the present case. Therefore, the same

is not discussed.

1970 (3) SCC 140 AKS,J & ETD,J CCCA No.262_2007

m) The contention of the defendant No.3 has always been that

he has not affixed his signature on agreement of sale and that it is

a forged document. But the plaintiff has not chosen to lead

evidence in this regard and he has not taken any steps to send the

document to handwriting expert. The plaintiff contends that the

defendants have to get the property registered on conversion to

freehold property and the terms of agreement of sale also reveals

that the parties are very much aware about the status of the

property being leasehold, it is mentioned in the contract that on

getting it into freehold property sale deed shall be executed. But in

his cross examination, the plaintiff (PW1) has feigned ignorance

stating that he does not know whether the suit schedule property

is a freehold or lease hold property as on date. He has admitted

that the A.P.Government is the owner of the property. The plaintiff

has stated that he has paid an amount of Rs.9,30,000/- to

defendant No.3 out of the sale consideration. But then it is elicited

through him that he does not have a separate document in proof of

the said payment to defendant No.3, except Ex.A6 which is a

receipt for an amount of Rs.1,30,000/-. Thus, payment of

Rs.9,30,000/- to defendant No.3 by the plaintiff is not proved.

AKS,J & ETD,J CCCA No.262_2007

n) The plaintiff as PW1 has also admitted that he mentioned in

his plaint that the defendant Nos.1 to 3 are liable to pay the

amount to the Government under G.O.Ms.No.46. He further

admitted that Ex.A1 which is the agreement of sale does not

contain the above said clause. On the other hand, Ex.A1 contains

the Clause that the purchaser (plaintiff) shall pay the amount if

any required to be paid to the Government to get the land from

leasehold to freehold. He further admitted that the said statement

made by him in the plaint is false.

o) One Harivadan Lal was examined as PW2 by the plaintiff

who happens to be the uncle of defendants. The contention of the

plaintiff is that PW2 signed as a witness on the agreement of sale

under Ex.A1 and thus, the evidence of the attestor proves his

document. In the cross examination of PW2 it is elicited that

defendant Nos.1 to 3 used to approach him for any elderly advise.

He stated that he does not know the contents of the Family

Settlement deed but he has signed in it. He admitted that the

defendant Nos.1 to 3 have no right to sell the suit schedule

property as it is a leasehold property. Thus, the evidence of PW2 is

of no avail to the plaintiff to prove the validity of agreement of sale.

When the terms of the agreement/Ex.A1 itself are against law and AKS,J & ETD,J CCCA No.262_2007

against the terms laid down in the lease deed/Ex.A16, the evidence

of attestor does not validate the document under Ex.A1.

p) The learned respondent No.1/plaintiff counsel has relied

upon a decision of the Apex Court in M.L.Abdul Jabbar Sahib v.

M.V.Venkata Sastri & Sons 5 to putforth a point that the

evidence of an attestor is enough to prove the execution of a

document. It was held in the said case that "the essential

conditions of a valid attestation under Section 3 of the Transfer of

Property Act are that 1) two or more witnesses have seen the

executant sign the instrument or have received from him a

personal acknowledgment of his signature; 2) with a view to attest

or to bear witness to this fact each of them has signed the

instrument in the presence of the executant. It is essential that the

witness should have put his signature animo attestandi, that is, for

the purpose of attesting that he has seen the executant sign or has

received from him a personal acknowledgment of his signature. If

a person puts his signature on the document for some other

purpose, for example, to certify that he is a scribe or an identifier

or a registering officer, he is not an attesting witness".

q) PW2 stated that all the defendants have signed the

document, while defendant No.3 denied to have signed on the

(1969) 1 SCC 573 AKS,J & ETD,J CCCA No.262_2007

document. When the executant himself denied his signature on

the document, it is the duty of the plaintiff to take steps to send

the same for the opinion of an expert, which is not done in the

present case. Thus, the evidence of the attestor does not add any

strength to the plaintiff's case.

r) The contention of the respondent No.1/plaintiff counsel is

that in the present case PW2 was examined as an attesting witness

and the statement in his cross examination that he does not know

the contents of the document, would not invalidate the document.

s) Learned counsel for respondent No.1/plaintiff placed reliance

on the decision of the Apex Court in Hemkunwar Bai v.

Sumersingh 6 to prove his contention. In the said case the main

issue was whether one Ratankuwarbai, an illiterate lady suffering

from Cancer had executed a Sale deed and the Will. Two witnesses

who signed the document were examined in the said case. It was

contended that both the witnesses have stated that they were not

aware of the contents of the document, when they signed as

witnesses. It was held by the High Court that the witnesses need

not necessarily know what is contained in the document.

Furthermore, when these witnesses state that the Sub-Registrar

has told the gist of the documents to the deceased then they

(2019) 4 RCR (Civ) 773 AKS,J & ETD,J CCCA No.262_2007

become aware of the nature of the documents at the time of

registration thereon and the view of the High Court was upheld by

the Apex Court. It is pertinent to note in this regard that when the

document is otherwise valid, the evidence of the attestor and the

question of his knowledge about its contents would be considered.

It is already discussed supra that the document itself is a void

document. Thus, the question of attestation and attestor knowing

its contents and deposing in that regard does not fall for

consideration in this case. Therefore, the cited decision is not

applicable to the case on hand.

t) Exs.B1 and B2 were marked with the consent of DW2. Ex.B1

is the photograph shown to him consisting of the existence of one

medical hall and the institute run by them and he stated that the

plaintiff runs his business in the name and style of Prince Medical

Hall, it is bearing municipal No.10-2-317/5/A, it is elicited from

him that the properties surrounding the suit schedule property are

leasehold property and he does not know whether some of the

properties were converted into freehold. Ex.B2 is the savings

account of DW2 i.e. defendant No.3, the said bank statement is

marked with his consent. The contention of the plaintiff is that the

defendant No.3 did not have much savings in his account but he

has deposited an amount of Rs.2,50,000/- by cash on 15.12.2004 AKS,J & ETD,J CCCA No.262_2007

and that the said amount is deposited just because the defendant

No.3 has received Rs.8,00,000/- advance from the plaintiff on

15.12.2004. DW2 has answered stating that he received the said

amount of Rs.2,50,000/- from his brother-in-law by name Takur

Chandra Singh and that he never received any amount from the

plaintiff. It is pertinent to mention in this context that PW1

admitted that he has not filed any proof to show that he paid an

advance amount of Rs.9,30,000/- to defendant No.3. No prudent

man would pay Rs.9,30,000/- without any receipt. Thus, the

contention of plaintiff in this regard appears to be far from truth.

u) DW2 admitted that the lease hold properties can be

converted into freehold properties as per G.O.Ms.No.46 and that if

the requisite amount is paid to the Government, the said

conversion can be made. But the said admission of DW2 does not

validate Ex.A1. His specific contention is that defendant Nos.1 and

2 might have agreed to sell the suit schedule property under Ex.A1

but he has never agreed. The defendant No.3 who is the appellant

herein has denied the agreement of sale in its entirety and has

further specifically denied to have received any amount under the

agreement of sale. Though the plaintiff contends that defendant

No.3 has received advance sale consideration, he has not filed any

proof. The plaintiff further contends that defendant No.3 has AKS,J & ETD,J CCCA No.262_2007

deposited some amount into his account on receiving the advance

sale consideration. The entry made in the account of defendant

No.3 under Ex.B2 cannot substantiate the contention of the

plaintiff. The said amount is deposited by cash, thus, the

contention of plaintiff is not proved.

v) Another contention raised by the plaintiff in his plaint is that

he was always ready and willing to perform his part of contract and

that he has deposited the balance sale consideration into his bank

account and that it reflects the same. In proof of his contention,

he has filed the accounts statement under Ex.A17. A perusal of

Ex.A17 reveals that it is in the name of his father Moolchand

Chandrani and during his cross examination he has stated that it

is a joint account pertaining to himself and his father but the

document does not reflect the said fact. It is elicited in his cross

examination that he is an income tax assessee for the past 10

years but he is not aware whether the payment made by him to the

defendants is reflected in the IT returns or not. He admitted that

he has not deposited the balance sale consideration in the bank

accounts held by him. Thus, the plaintiff could not prove that he

was ready with the balance sale consideration. However, when the

agreement of sale itself is held to be invalid the question of

readiness and willing does not fall for consideration at all.

AKS,J & ETD,J CCCA No.262_2007

w) Learned counsel for respondent No.1/plaintiff relied upon

the decision of the Apex Court in Ram Lal v. Jarnail Singh 7. In

this case there was a delay of two years in filing the execution

petition and a delay of four years in depositing the balance sale

consideration. Then the Apex Court has held that the respondents

are entitled to simple interest @ 9% per annum from the date of

judgment and order passed by the Appellate Court till the date of

balance sale consideration is deposited. Thus, observing so they

have allowed the appeal setting aside the order of the High Court

and confirming the orders of executing Court to deposit the

balance sale consideration and to proceed with the specific

performance of suit. In the present case when the agreement itself

is held to be void agreement, the question of depositing the balance

sale consideration and proceeding with the specific performance

does not arise.

x) Learned counsel for respondent No.1/plaintiff relied upon

the decisions of the Apex Court in Kannappa Chettiar v. Abbas

Ali 8 and Mir Abdul Hakeem Khan v. Abdul Mannan Khadri 9.

The contention of the respondent No.1 counsel is that once an

agreement of sale has been entered into between the parties, the

defendant/vendor cannot turn around and take a plea of defective

2025 SCC OnLine SC 584

(1952) 2 SCC 124

(1971) SCC OnLine AP 137 AKS,J & ETD,J CCCA No.262_2007

title. In the present case, the factual matrix is in such a way that

the plaintiff also knows about the limited rights of the defendants

over the suit schedule property. Further, the defendant No.3 who

is the appellant herein has denied the execution of the agreement

itself. Admittedly, prior sanction of the Government is essential to

proceed with the registration or execution of sale deed. It is a case

where, the plaintiff is pretty well aware that the defendants do not

have a perfect title and that they cannot execute the sale deed

unless prior sanction is obtained from the Government and

further, but still a Clause was included in the agreement stating

that the sale deed can be executed even if the permission is not

obtained. It is reiterated at the cost of repetition that the said

Clause is against the condition stipulated in the lease deed and

against the policy decision made by the Government. Thus, the

agreement/Ex.A1 goes against the public policy and is an invalid

agreement. Therefore, the above cited decisions also are not

applicable to the present case.

y) In view of the foregoing discussion it is held that the

agreement of sale is not a valid document and is not binding on the

defendants. Thus, the plaintiff is not entitled to a decree of specific

performance in pursuance of the said agreement of sale. Point

Nos.1 and 2 are answered accordingly.

AKS,J & ETD,J CCCA No.262_2007

15. POINT NO.3:

Learned counsel for respondent No.1/plaintiff relied upon

the decisions of the Apex Court in Mysore State Road Transport

Corporation v. Mirja Khasim Ali Beg 10 and Manjunath

Anandappa Urf Shivappa Hanasi v. Tammanasa 11. In Mysore

State Road Transport Corporation's case, it was held that the relief

of declaration is discretionary. It is well settled that if only the

discretion is not exercised by the lower Court in the spirit of

statute or fairly or honestly or according to the roots of reason and

justice, the order of lower Court can be reversed by the Statutory

Court. In Manjunath Anandappa Urf Shivappa Hanasi's case,

it was held by the High Court that both the trial Court and the first

Appellate Court refused to exercise their discretionary jurisdictions

in favour of the plaintiff. It was held by the Apex Court that, the

High Court should not have interfered therewith without arriving at

a finding that the discretion has been exercised by the Courts

below on wrong legal principle. The respondent No.1/plaintiff

counsel has relied upon both these decisions in support of his

argument that unless discretion is exercised in a wrong manner by

the trial Court, the High Court cannot interfere with the same in a

normal course. In the case on hand, it is found that the trial Court

has passed a decree which is not only contingent in nature but

also is found to be against the legal principle. It is already held in

(1977) 2 SCC 457

(2003) 10 SCC 390 AKS,J & ETD,J CCCA No.262_2007

the discussion supra that the agreement itself is invalid, in view of

the clause specified therein, which stipulates that the sale deed

can be executed even without the sanction that has to be obtained

from the competent authority. The decree also specifies the said

clause which is not proper in the eye of law. Thus, it is opined that

there is a material irregularity committed by the trial Court in

exercising its discretion and thus, this Court is inclined to interfere

with the same and it is held that the judgment and decree passed

by the trial Court are not sustainable in law and under the facts

and circumstances of the case.

16. POINT NO.4:

In the result, the appeal is allowed setting aside the

judgment and decree, dated 04.06.2007, passed in O.S.No.401 of

2005 by the learned III Additional Chief Judge, City Civil Court,

Hyderabad. No costs.