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2003 DIGILAW 461 (ALL)

Krishna Gopal Pandey v. Bans Bahadur Singh

2003-02-28

JANARDAN SAHAI

body2003
JUDGMENT : Janardan Sahai, J. Bans Bahadur Singh and Vikrama Singh, Respondents in this appeal filed a suit for specific performance of a contract of sale dated 20.2.1985 executed by the first Defendant, the Appellant Krishna Gopal Pandey. Alternatively, refund of advance money together with interest was also sought. 2. Before the contract of sale dated 20.2.1985, the subject matter of this appeal, Krishna Gopal Pandey had executed a contract of sale dated 26.11.1984 in respect of a different plot in favour of the Plaintiffs. It is not disputed that the second Defendant Smt. Damyanti Devi is the wife of the first Defendant Krishna Gopal Pandey who had executed a sale deed dated 27.11.1984 in her favour in respect of the land which was the subject-matter of the contracts of sale dated 26.11.1984 and 20.2.1985. In this suit, the first Defendant Krishna Gopal Pandey admitted his signatures on the agreement to sell and also admitted having received a sum of Rs. 40,000 from the Plaintiff but his case was that the document dated 20.2.1985 was obtained from him by practising fraud in that he had merely taken a loan from the Plaintiff and intended to execute a mortgage deed in security but the Plaintiff fraudulently obtained his signatures on the agreement to sell. 3. The case of the second Defendant who as stated above is none other than the wife of the first Defendant was that a sum of Rs. one lac was due to her from her husband as she had advanced certain amounts to him which she had received from her parents and that the sale deed dated 27.11.1984 was executed by him in her favour in consideration of that loan. 4. Both the courts below have repelled the case of fraud set up by Defendant No. 1 and it has been held that the sale deed in favour of the second Defendant was a sham transaction and was void. The courts below have decred the suit for specific performance. 5. I have heard Shri V.K.S. Chaudhary, learned senior counsel for the Appellants and Shri Ravi Kiran Jain, learned senior counsel for the Respondents. 6. The contract of sale dated 20.2.1985 bears the signatures of the first Defendant (hereinafter referred to as the 'vendor') but it does not bear the signature of the Plaintiffs in whose favour it was executed. 5. I have heard Shri V.K.S. Chaudhary, learned senior counsel for the Appellants and Shri Ravi Kiran Jain, learned senior counsel for the Respondents. 6. The contract of sale dated 20.2.1985 bears the signatures of the first Defendant (hereinafter referred to as the 'vendor') but it does not bear the signature of the Plaintiffs in whose favour it was executed. It was contended by Sri V.K.S. Chaudhary that u/s 54 of the Transfer of Property Act as amended in Uttar Pradesh, a contract of sale must be registered - a requirement which implies that it must be in writing and when it is stipulated that the contract is to be in writing, the entire contract which is a bilateral transaction consisting of incidents of proposal and acceptance must be in writing and that a unilateral deed such as the one executed in the present case does not meet the requirement of Section 54 of the Transfer of Property Act. 7. It is not in dispute that the contract of sale dated 20.2.1985 is a registered document. The copy of the contract has been filed along with the stay application as Annexure - 7. It bears the recital that the vendor has agreed with the vendees (an expression loosely being used for the party proposing to purchase) to sell to them for a sum of Rs. 48,000, the land described in the agreement and that a sum of Rs. 40,000 has been paid by the vendees as advance and that the sale deed would be executed within a period of six months on payment by the vendees of the balance consideration of Rs. 8,000. This agreement, therefore, does contain the element of mutuality of obligations. It contains also the admission by the vendor of having received from the vendee Rs. 40,000 as advance. The recitals, if proved, constitute a complete contract. If the document had been signed by the vendees, the acceptance by token of the signature would be deemed to be incorporated in the document itself but it is submitted by the learned Counsel for the Appellant that in the absence of such signatures by the vendees, the incidence of acceptance is not contained in the document and as such, the document does not fulfil the requirement of a written contract of sale impliedly stipulated u/s 54 of the Transfer of Property Act. 8. 8. Before examining the cases which have been relied upon by the learned Counsel for the Appellant, reference may be made to a decision of the Apex Court cited by the learned Counsel for the Respondent which appears to be the nearest on the point in issue. In Rajendra Pratap Singh Vs. Rameshwar Prasad, AIR 1999 SC 37 , a lease for a term exceeding one year was signed by only one of the parties. Section 107 of the Transfer of Property Act provides that such a lease for more than a year is required to be made by a registered instrument. The third paragraph of that provision, which though not applicable in U.P., provides for execution by both parties. The question before the Apex Court was whether the document could be said to have been executed in the absence of signature of both the parties. The Apex Court stated the law in paragraph 11 of the judgment as follows : 11. The word “execute” is given the meaning in Black's Law Dictionary as “to complete; to make; to sign; to perform; to do; to follow out; to carry out according to its terms; to fulfil the command or purpose of.” In “Words and Phrases” (Permanent Edition) the word “execute” is given the meaning as “to complete as a legal instrument; to perform what is required to give validity to.” An instrument is usually executed through multifarious steps of different sequences. At the first instance, the parties might deliberate upon the terms and reach an agreement. Next the terms so agreed upon would be reduced to writing. Some times one party alone would affix the signature on it and deliver it to the other party. Some times both parties would affix their signature on the instrument. If the document is required by law to be registered, both parties can be involved in the process without perhaps obtaining the signatures of one of them. In all such instances the instrument can be said to have been executed by both parties thereto. If the instrument is signed by both parties it is presumptive of the fact that both of them have executed it, of course it is only rebutable presumption. Similarly if an instrument is signed by only one party it does not mean that both parties have not executed it together. If the instrument is signed by both parties it is presumptive of the fact that both of them have executed it, of course it is only rebutable presumption. Similarly if an instrument is signed by only one party it does not mean that both parties have not executed it together. Whether both parties have executed the instrument will be a question of fact to be determined on evidence if such a determination is warranted from the pleadings of the particular suit. Merely because the document shows only the signature of one of the parties, it is not enough to conclude that the non-signing party has not joined in the execution of the instrument. 9. Shri V.K.S. Chaudhary sought to distinguish the decision of the Apex Court on the ground that the ruling relates to lease of a shop which being a transfer can be unilateral whereas a contract is bilateral and consists of reciprocity. He gave the analogy of a deed of gift which being a transfer, the acceptance need not be incorporated in the document itself. It was also submitted that the third paragraph of Section 107 of the Transfer of Property Act has been repealed in U.P. and the ruling is not applicable to U.P. and further that the lease of property can be oral and is complete when the transferor lets it out and that it is only a lease for a term exceeding one year that has to be made by registered instrument. These grounds for distinguishing the decision of the Supreme Court are not real grounds of distinction. The Apex Court has laid down the law relating to execution of documents by two parties and has held that it is not necessary for due execution of such document that it must be signed by both the parties and that it was a matter of evidence in case the execution of the document was denied. 10. The cases cited by the learned Counsel for the Appellant though not direct on the point may now be referred to for what they hold. In Bhagwandas Goverdhandas Kedia Vs. Girdharilal Parshottamdas and Co. and Others, AIR 1966 SC 543 , it was held that acceptance of offer and its intimation by external manifestation is necessary for a contract. In Sohan Lal v. Raghubir Sahai and Anr. In Bhagwandas Goverdhandas Kedia Vs. Girdharilal Parshottamdas and Co. and Others, AIR 1966 SC 543 , it was held that acceptance of offer and its intimation by external manifestation is necessary for a contract. In Sohan Lal v. Raghubir Sahai and Anr. 1928 ALJ 324, it was held that it is not every agreement that is binding on a party to it, simply because he agreed to it and where the law requires that a contract to be effective, should be executed in a particular way such as it be registered and attested, the mere registration may make the document admissible in evidence but in the absence of attestation would not create a binding transaction. 11. In Ram Kumar Das Vs. Jagadish Chandra Deb Dhabal Deb and Another, AIR 1952 SC 23 a Kabuliyat for 10 years was executed. The Apex Court held that the Kabuliyat though a registered instrument but ex concessis is not an operative document at all and cannot consequently fulfil the requirements of Section 107 of the Transfer of Property Act. The law in respect of Kabuliyat has been considered by the Apex Court in the case of Rajendra Pratap Singh v. Rameshwar Prasad (supra) and a reference was made to a previous decision of Apex Court in Asa Ram and Another Vs. Mst. Ram Kali and Another, AIR 1958 SC 183 . In that case, a Kabuliyat was executed by the lessee in favour of their lessors, but the latter did not execute any instrument in favour of the lessees. It was contended that the lessees could not claim the status of tenants solely on the strength of the Kabuliyat, which was only a unilateral undertaking. But the evidence showed that the lessors had accepted the Kabuliyat and received rent as prescribed therein. On these facts, the Apex Court overruled the contention that the lessees could not claim the status of tenant. 12. In the present case, the plea taken is that the contract of sale was obtained by fraud. There was no plea in the written statement that the document was not a valid document, as it was not executed by both the vendor and vendee. 12. In the present case, the plea taken is that the contract of sale was obtained by fraud. There was no plea in the written statement that the document was not a valid document, as it was not executed by both the vendor and vendee. In the case of Rajendra Pratap Singh v. Rameshwar Prasad (supra), where the position was similar as in this case, it was held that the Defendant having not disputed in the written statement the fact that the lease was validly made, it was not open to him to raise a contention later that the instrument was not executed by both the lessor and lessee. 13. The decision in Kumar Gohul Chandra Law Vs. Haji Mohammad Din, AIR 1938 Cal 136, relied upon by the Appellants in which it was held that if there is a proposal in writing and also acceptance in writing, the proposal and acceptance constitute a contract in writing; but if the proposal is in writing but the acceptance is not in writing, the entire agreement not being in writing, it cannot be said that the contract to lease is in writing, does not help the Appellant as Section 27A of the Specific Relief Act applicable in that case provided for a contract to lease immovable property made in writing signed by the parties thereto. The statute itself thus postulated a written agreement 'signed' by the parties which is not the requirement u/s 54 of the Transfer of Property Act. 14. In Egged Co - operative Society Ltd. v. Levi Geffen AIR 1947 (34) PC 32 the observation to the effect that a document signed only by one of the parties to it is not, therefore, a written agreement does not help the Appellant as that observation was rendered in connection with the right of a party to lead oral evidence disputing the fact mentioned in the document. So also the decision in Mohd. Tahir v. Mst. So also the decision in Mohd. Tahir v. Mst. Sardar Bano AIR 1952 All 782 , in which while interpreting Section 91 of the Evidence Act it was held that the word 'document' must be taken to be one executed by a party and therefore, signed by him in token of execution also is not directly on the point and is on a different context of facts and cannot be construed to mean that if a document is not signed by both the parties it cannot be a document executed. The contention of the learned Counsel for the Appellant that the contract for sale does not conform to the requirement of Section 54 of the Transfer of Property Act is, therefore, repelled. A contract of sale, if registered, need not bear the signatures of both the executants to make it a valid one within the meaning of Section 54 of the Transfer of Property Act. 15. Apart from this, Section 20(4) of the Specific Relief Act goes against the Appellant's contention. It reads as follows : 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. 16. It was next contended that the contract of sale dated 20.2.1985 cannot be enforced against the second Defendant-Appellant Smt. Damyanti Devi to whom the plot was transferred earlier on 27.11.1984 by a registered deed as Section 19, Clause (b) of the Specific Relief Act can be enforced only against a subsequent transferee and not against a prior transferee. 17. Both the courts below have held that the sale deed dated 27.11.1984 was without consideration. The sale deed was executed by the first Defendant in favour of his wife only one day after the contract of sale dated 26.11.1984 though that was in respect of Plot No. 82 which was not the subject-matter of contract of sale dated 20.2.1985. The lower appellate court has held that the payment of consideration for the sale was not proved and in fact, it is stated in the document that the consideration was the service rendered by the second Defendant and that the sale deed dated 27.11.1984 was a sham document. This finding that there was no transfer of interest in favour of the second Defendant by that document which was sham is a finding of fact. This finding that there was no transfer of interest in favour of the second Defendant by that document which was sham is a finding of fact. Learned Counsel for the Appellant relied upon Kamala Devi Vs. Bachu Lal Gupta, AIR 1957 SC 434 and Smt. Gomtibai (dead) through LRs. and others Vs. Mattulal (dead) through LRs., AIR 1997 SC 127 , on the point that the transfer becomes complete on registration. These decisions do not apply to cases where the transaction was a sham one. The sale deed was being relied upon by the second Defendant on the ground that she was the owner of the property on the date the agreement to sell in favour of the Plaintiff was executed by the first Defendant. In these circumstances, it was open to the Plaintiff though they were not parties to the sale deed to allege that no interest was conveyed by the sale deed in favour of Defendant No. 2 and the Defendant No. 1 continued to be its owner on the date when the agreement to sell was executed. 18. It was then submitted by the learned Counsel for the Appellant that the first Defendant had only a half share in the property and the other half share belongs to his brother who is not a party to the agreement or in the suit and as such, specific performance in respect of the entire disputed property could not be enforced. The Khatauni entry showing only half share of the Appellant in the property is relied upon and it is submitted that u/s 44 of the U.P. Land Revenue Act, the Court was bound to raise a presumption of law that the first Defendant was only the owner of a half share. This contention which was raised before the Court below was turned down on the ground that there was no plea in the written statement of the first Defendant that he was owner of only a half share and that the other half belongs to his brother. This contention which was raised before the Court below was turned down on the ground that there was no plea in the written statement of the first Defendant that he was owner of only a half share and that the other half belongs to his brother. It has also relied upon the admission of the first Defendant that he was the owner in possession of the entire land and there was also admission in the sale deed dated 27.11.1984 executed by the first Defendant in favour of his wife that the first Defendant was the owner of the entire disputed property and was in possession thereof and that none other was the owner. Good reasons have been given by the lower appellate court to turn down the contention of the Appellant. The decision of the Apex Court in Sardar Singh Vs. Smt. Krishna Devi and another, AIR 1995 SC 491 , relied upon is on different facts. In that case, there was an unregistered award of the arbitrator that the Appellant in that case and his brother were entitled to a half share in a house and the agreement of sale of the entire house was entered into by the Appellant's brother and the Apex Court reversing the decision of the courts below held that the award required no registration and that the Courts had erred in exercising discretion of granting decree of the entire house. In that case the challenge made by the person claiming to be the owner who was a party in the suit was allowed by the Apex Court and not a challenge made by the executant of the agreement as the case here is. A person who has executed the agreement is bound by it. That apart in the present case a finding of fact has been recorded that the Appellant No. 1 was the owner of the entire property and as such the decision in the case of Sardar Singh (supra) does not help the Appellant. 19. It was urged that the transaction between the first Defendant and the Plaintiff was a fraud on the statute as the Plaintiff Vikrama was a money lender but does not maintain any register or documents required under the U.P. Regulation of Money Lending Act, 1976. 19. It was urged that the transaction between the first Defendant and the Plaintiff was a fraud on the statute as the Plaintiff Vikrama was a money lender but does not maintain any register or documents required under the U.P. Regulation of Money Lending Act, 1976. There is no pleading brought to my notice to the effect that the transaction was a fraud on the statute and in the courts below, no evidence was led to substantiate such a plea. The application for taking additional evidence filed in this appeal has been rejected. This ground is one of fact and never appears to have been raised in the courts below. In my opinion, it is not open to the Appellants to raise the question for the first time in this appeal. 20. Specific performance is a discretionary relief. It is contended that the Plaintiff Vikrama Singh was a money lender and a decree for refund was the appropriate decree and the bargain is unconscionable and gives an unfair advantage to the Plaintiff and in the circumstances, specific performance should be refused u/s 20(2) of the Specific Relief Act. The appellate court has rejected the contention. The finding of the appellate court on this point is that the land covered by the contract of sale is 58 decimals. The sale deed relied upon by the Defendant for proving the value of the land in dispute was also considered by the lower appellate court and it was held that that sale deed was in respect of 25 x 65 ft. which was a very small piece of land about 1 katta whereas the disputed land was many times larger and that sale deed, therefore, could not be relied upon for the purpose of determining whether the consideration for the present transaction was adequate. The lower appellate court has relied upon the sale deed dated 27.11.1984 said to have been executed by the first Defendant himself whereby an area of 1.89 acres is alleged to have been transferred in favour of the second Defendant for a sum of rupees one lac and the market value of the land shown in that deed was Rs. 43,417. It has relied upon the Explanation 1 to Section 20(2) of the Specific Relief Act that mere inadequacy of consideration would not be a ground for inferring that unfair advantage has been obtained. 43,417. It has relied upon the Explanation 1 to Section 20(2) of the Specific Relief Act that mere inadequacy of consideration would not be a ground for inferring that unfair advantage has been obtained. The value of a piece of land depends upon various factors and the circle rate is not a decisive factor. The finding of the courts below on the question of adequacy of consideration is a finding of fact. 21. Learned Counsel for the Appellant relied upon S. Rangaraju Naidu Vs. S. Thiruvarakkarasu, AIR 1995 SC 1769 . In that case, the Apex Court held that the Court has discretion to grant specific performance and is not bound to do so. It was held on facts that although the Appellant in that case had agreed to sell the property to the Respondents, the predominant object thereby was for recovery of the dues with interest. In that case the Respondents were money lenders and they had sought to recover the amount due to them and since the Appellant was not in a position to pay the amount due on the promissory note, he entered into an agreement to sell the property. From the facts of the present case, it cannot be inferred that the agreement to sell was entered into predominantly with the object of recovery of dues with interest. Reliance was also placed upon Parakunnan Veetill Joseph's Vs. Nedumbara Kuruvila's and Ors, AIR 1987 SC 2328 , in which the Apex Court held that in a suit for specific performance the Court should see that the litigation is not used as instrument of oppression to have unfair advantage to the Plaintiff. The finding recorded in the present case by the lower appellate court is that the first Defendant was a literate person and was running a medical store and from his conduct it appeared that he was involved in several transactions in respect of land. The Appellant's case that consideration was not adequate has also not been accepted. 22. Another decision relied upon is A.C. Arulappan v. Smt. Ahalya Naik 2001 (3) AWC 2456 (SC), in which the Apex Court held that no decree for specific performance can be granted where the Plaintiff does not come with clean hands or where he can take unfair advantage over Defendant and in such a case, refund of money is the adequate relief. This case is not applicable to the facts of the present case. The plea that the bargain was unconscionable has been turned down. Ordinarily in the case of a contract of sale the relief of specific performance is to be granted. The courts below have exercised this discretion on good grounds. Learned Counsel for the Appellant also relied upon Gobind Ram Vs. Gian Chand, AIR 2000 SC 3106 . In that case an agreement to sell in respect of certain property in Lajpat Nagar, New Delhi was entered on 24.1.1973 for a consideration of Rs. 16,000. The suit for specific performance filed by the purchasers was decreed on 6.10.1976. The vendor preferred an appeal, which was dismissed by the High Court but it directed the Respondent vendee to pay a further sum of Rs. One lac which was raised by 3 lacs by the Apex Court. In that case there are two distinguishing features. Firstly the property was situate in Delhi where the real estate price had escalated and secondly out of the consideration Rs. 16,000 settled only Rs. 1,000 was paid at the time of the agreement to sell and the balance was to be paid later. In these circumstances, the vendee was called upon to pay an additional sum of Rs. 3 lacs. In the present case, there is no evidence to indicate that the prices had escalated. That apart, out of the total consideration of Rs. 48,000, Rs. 40,000 was paid as advance and only a small portion of Rs. 8,000 remained to be paid. 23. The appeal does not involve any substantial question of law. Dismissed.