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2006 DIGILAW 1394 (MP)

RATAN KUMAR SAVNANI v. LAKHANLAL AGRAWAL

2006-12-06

ABHAY M.NAIK

body2006
JUDGMENT Abhay M. Naik, J. This judgment decides F.A. No. 315/1994 and F.A. No. 286/1994. Short facts involved in both the appeals are that Lakhanlal Agrawal (Respondent No. 1 herein) entered into an agreement to purchase the suit property comprised in Survey No. 33A in area 0.95 acres situated in Tahsil Raghurajnagar, Distt. Satna from Badri Singh (Respondent No. 2 herein) for a consideration of Rs. 53,000/- . The said suit property was adjacent to another property of Lakhanlal Agrawal, so he was anxious to purchase the same for a consideration of Rs, 53,000/- . The agreement was reduced into writing on 24-4-1988 and the entire consideration was paid by Lakhanlal to Badri Singh in cash. Pursuant thereto the possession of the suit property was delivered to Lakhanlal. Badri Singh did not execute the sale deed and instead executed a registered sale deed in favour of Ratan Kumar Savnani (present Appellant) on 12-4-1989 for a sum of Rs.40,000/- . On 17-4-1989, the present Appellant instituted Civil Suit No. 5-A/89 in the Court of 1st Addl. District Judge, Satna for declaration of title and perpetual injunction in respect of suit property against Badri Singh and Lakhanlal whereby the Respondent No. 1 came to know that the Respondent No. 2 (Badri Singh) has sold the suit property to the Appellant vide registered sale deed dated 12-4-1989. Thereafter, the Respondent No. 1 instituted a suit (Civil Suit No. 10-A/89) for specific performance of an agreement to sell dated 24-4-1988 with the averments that he has been in possession of the suit property in part performance of the agreement and that the present Appellant was aware of the said agreement of sale at the time of purchase. It has been further pleaded that he was ready and willing throughout to perform his part under the contract and the Appellant being not a bona fide purchaser for value, is bound by the agreement of sale. Further it is contended that the Defendant Badri Singh was not competent to execute sale deed after having received the entire consideration and having delivered the possession of the suit property in part performance of the agreement. Accordingly, a prayer has been made that registered sale deed dated 12-4-1989 may be declared illegal and void. It has been pleaded by Lakhanlal that he submitted an application for seeking permission for construction of house and boundary wall. Accordingly, a prayer has been made that registered sale deed dated 12-4-1989 may be declared illegal and void. It has been pleaded by Lakhanlal that he submitted an application for seeking permission for construction of house and boundary wall. An inspection was made by the members of Panchayat and the permission was duly granted for construction. It has been averred in the plaint that at the time of purchase the foundation was already led on the part of the disputed property and the walls were erected for two rooms. Lakhanlal paid Rs. 1500/- to Md. Hasim Ansari for construction of ceiling and doors on contract basis which was completed by him with the aid of his own money. He also constructed 24 pillars of stone on all the four sides to protect the suit property. A prayer for a decree for perpetual injunction has also been sought restraining the present Appellant from transferring the suit property in addition to a prayer for specific performance. Present Appellant and Respondent No. 1, Badri Singh submitted a joint written statement in Civil Suit No. 10-A/89 denying the claim of the Plaintiff. The alleged agreement dated 24-4-1988 was refuted as a forged document without consideration. The readiness and willingness on the part of Lakhanlal has also been denied. On the other hand, it has been contended that the suit property was sold and transferred by Badri Singh to Ratan Kumar Savnani (present Appellant) for a consideration of Rs. 40,000/- vide registered sale deed dated 12-4-1989 and possession of the suit property was also delivered at the time of sale. It is averred that the construction existing on the site was made by the present Appellant. It has been further pleaded that the Appellant was dispossessed from the suit property by Lakhanlal before hearing on the application for temporary injunction. The possession of the Plaintiff has been thus admitted, though, as of encroacher. After renumbering both the Civil Suits No. 45A/89 and 10A/89 as Civil Suit No. 43A/91 and Civil Suit No. 46A/91, learned Trial Judge vide his judgment and decree dated 30th June, 1994 decreed the suit in favour of Lakhanlal (present Respondent No. 1) for specific performance. The possession of the Plaintiff has been thus admitted, though, as of encroacher. After renumbering both the Civil Suits No. 45A/89 and 10A/89 as Civil Suit No. 43A/91 and Civil Suit No. 46A/91, learned Trial Judge vide his judgment and decree dated 30th June, 1994 decreed the suit in favour of Lakhanlal (present Respondent No. 1) for specific performance. Both the aforesaid Defendants, Ratan Kumar Savnani (present Appellant) and Badri Singh (Respondent No. 2 herein) have been directed by the learned Trial Judge to execute a registered sale deed jointly in favour of Lakhanlal for a consideration of Rs. 53,000/- . The sale deed executed by Badri Singh on 12-4-1989 in favour of the present Appellant has been declared illegal and void. The Appellant has also been injuncted from transferring the suit property in any manner, whatsoever. Civil Suit No. 46A/91 instituted by the present Appellant for perpetual injunction has been simultaneously dismissed by the same judgment and decree. Aggrieved by the aforesaid, the present appeals have been preferred by Ratan Kumar Savnani. Shri V.R. Rao, Learned Counsel for the Appellant and Shri Ravish Agrawal, learned senior counsel for the Respondents made their submissions which have been considered by this Court in the light of the material on record. Plaintiff/Respondent No. 1 has proved the agreement of sale contained in Annexure/P-1 by the testimonies of himself and two attesting witnesses namely Amarchand Jain (P.W. -2) and Yuvraj Pratap Singh (P.W. -5). Learned Trial Judge believing these testimonies has found while deciding issue No. 1 that the agreement of sale is proved to have been executed by Badri Singh in favour of Lakhanlal. It has been further found proved that the entire amount of consideration amounting to Rs. 53,000/- was received by Badri Singh who had handed over the possession to the Plaintiff/Respondent No. 1 at the time of agreement. Similarly, while deciding issue No. 6, it has been found proved by the learned Trial Judge that the Plaintiff/Respondent No. 1 has been ready and willing to perform his part under the sale agreement dated 24-4-1988. Shri V.R. Rao, Learned Counsel for the Appellant did not address this Court on the aforesaid issues. Similarly, while deciding issue No. 6, it has been found proved by the learned Trial Judge that the Plaintiff/Respondent No. 1 has been ready and willing to perform his part under the sale agreement dated 24-4-1988. Shri V.R. Rao, Learned Counsel for the Appellant did not address this Court on the aforesaid issues. His main attack for impugning the judgment and decree of the Trial Court is on the ground that the Plaintiff/Respondent No. 1 has failed to prove that the subsequent purchaser (present Appellant) had the knowledge of the prior agreement in favour of Respondent No. 1 at the time of purchase of the suit property vide registered sale deed dated 12-4-1989. As regards other issues, it may be seen that the findings on other issues are based on the correct appreciation of the entire evidence on record. The Apex Court in the case of Madhusudan Das Vs. Smt. Narayanibai (Deceased) by Lrs. and Others, has held: At this stage, it would be right to refer to the general principle that, in an appeal against a trial Court decree, when the appellate Court considers an issue turning on oral evidence it must bear in mind that it does not enjoy having the witnesses before it and of observing the manner in which they gave their testimony. When there is a conflict of oral evidence on any matter in issue and its resolution turns upon the credibility of the witnesses, the general rule is that the appellate Court should permit the findings of the fact rendered by the trial Court to prevail unless it clearly appears that some special feature about the evidence of a particular witness has escaped the notice of the trial Court or there is a sufficient balance of improbability to displace its opinion as to where the credibility lies. His Lordship Hon'ble Mr. Justice R.C. Lahoti, Judge, Supreme Court of India (as he then was) further clarified in the case of Santosh Hazari Vs. Purushottam Tiwai (Dead) by Lrs., that: the findings of fact based on conflicting evidence arrived at by the trial Court must weigh with the Appellate Court, more so when the findings are based on oral evidence recorded by the same Presiding Judge who authors the judgment. In the present case, the evidence of the parties was recorded by the Presiding Judge who delivered the judgment in the Trial Court. In the present case, the evidence of the parties was recorded by the Presiding Judge who delivered the judgment in the Trial Court. Considering the same, the findings on the issues pertaining to execution of the agreement of sale dated 24-4-1988, readiness and willingness on the part of Plaintiff/Respondent No. 1 and the delivery of possession by Badri Singh to Plaintiff/Respondent No. 1 are hereby confirmed since they are neither seriously challenged nor it could be shown that any material contrary evidence has been ignored. Shri Rao, learned Advocate contended mainly that the Respondent No. 1 has failed to establish readiness and willingness on his part to perform his part under the agreement of purchase and is not entitled to a decree for part performance. He has further failed to plead about the knowledge of the agreement of sale in his favour at the time of purchase vide registered sale deed dated 12-4-1989. This apart the Appellant being a bona fide purchaser for value without notice of the alleged agreement in favour of the Respondent No. 1 cannot be directed to execute registered sale deed in favour of Respondent No. 1 by way of grant of decree for specific performance. Shri Rao, learned Advocate placed reliance on the decision of this Court in the case of Phulu Bai v. Kanwal, reported as 1985 MPWN 219 wherein it has been held that the burden is on the prospective vendee to prove that the subsequent purchaser was not a bona fide purchaser and had the knowledge of the agreement between the vendor and the prospective vendee. If this burden is not effectively discharged by cogent evidence, a suit for specific performance cannot legally succeed. Per contra, Shri Ravish Agrawal, learned senior counsel urged that the burden has been fully discharged and the learned Trial Judge has rightly found on the basis of the material on record that the Appellant was not a bona fide purchaser. Accordingly, the suit having been rightly decreed no interference is warranted in the appeals. Provisions about contract which can be specifically enforced are contained in Sections 10 to 13 of the Specific Relief Act, 1963. Further, provisions regarding the persons for or against whom contracts may be specifically enforced are contained in Section 15 to 19 of the said Act. Accordingly, the suit having been rightly decreed no interference is warranted in the appeals. Provisions about contract which can be specifically enforced are contained in Sections 10 to 13 of the Specific Relief Act, 1963. Further, provisions regarding the persons for or against whom contracts may be specifically enforced are contained in Section 15 to 19 of the said Act. Section 19(b) of the Act is relevant for the present purpose which is reproduced below: 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)... (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; In view of the aforesaid, it is obvious that the Plaintiff/Respondent No. 1, in view of the existing pleadings is obliged to prove that the subsequent purchaser (i.e. the Appellant) has not purchased the property in good faith and had the notice of the agreement of sale in favour of the Plaintiff at the time of purchase vide registered sale deed dated 12-4-1989. It is now required to be seen that whether the Plaintiff/Respondent No. 1 has succeeded in discharging his this burden or not on the basis of the material on record. It is a matter of common knowledge that it is not easy to establish by direct evidence that a subsequent purchaser had the notice of prior agreement at the time of purchase, since, such a purchaser takes extra care while making purchase. Shri Rao, Learned Counsel for the Appellant drew attention of this Court to the averments contained in the plaint that the Plaintiff came to know about the execution of the registered sale deed dated 12-4-1989 in favour of the Appellant only after he was served with the summons issued in the suit for perpetual injunction instituted by the Appellant. Further, the Plaintiff has nowhere stated in his statement that the Appellant had knowledge of the agreement dated 24-4-1988 in favour of the Plaintiff. Moreover, the initial agreement is stated by the Plaintiff himself in his examination to be oral and no date of such oral agreement has been specified in the plaint. Similarly, the payment of Rs. Further, the Plaintiff has nowhere stated in his statement that the Appellant had knowledge of the agreement dated 24-4-1988 in favour of the Plaintiff. Moreover, the initial agreement is stated by the Plaintiff himself in his examination to be oral and no date of such oral agreement has been specified in the plaint. Similarly, the payment of Rs. 53,000/- is not pleaded in the plaint to have been made in instalments. On the contrary, there is merely a mention of payment of Rs. 53,000/- in the plaint towards the consideration of sale. Accordingly, it is contended that a suit for specific performance cannot be legally decreed on the basis of such pleadings and evidence, moreso, against a subsequent purchaser. Shri Ravish Agrawal, learned senior counsel appearing for the Plaintiff/Respondent No. 1 contended that the oral agreement was reduced into writing on 24-4-1988 and the suit for specific performance has been rightly based on it. The Appellant having purchased the suit property on 12-4-1989 is obviously a subsequent purchaser. His bona fides are rightly negatived by the learned Trial Judge in the light of the evidence on record and the appeal being devoid of merits is liable to be dismissed. The Hon'ble Supreme Court of India in a case involving the relief of specific performance against a subsequent purchaser has held in the case of R. K. Mohammed Ubaidullah and Others Vs. Hajee C. Abdul Wahab (D) By Lrs. and Others, that it is to be considered: (1) Whether the subsequent purchaser is a bona fide purchaser of the suit property in good faith for value without notice of original contract; and (2) Whether the subsequent purchaser in the absence of necessary enquiry can be said to be a bona fide purchaser. It has been further held: Section 19(b) protects the bona fide purchaser in good faith for value without notice of the original contract. This protection is in the nature of exception to the general rule. Hence the onus of proof of good faith is on the purchaser who takes the plea that he is an innocent purchaser. Good faith is a question of fact to be considered and decided on the facts of each case. Section 52 of the Penal Code emphasises due care and attention in relation to good faith. In the General Clauses Act emphasis is laid on honesty. Good faith is a question of fact to be considered and decided on the facts of each case. Section 52 of the Penal Code emphasises due care and attention in relation to good faith. In the General Clauses Act emphasis is laid on honesty. Notice is defined in Section 3 of the Transfer of Property Act. It may be actual where the party has actual knowledge of the fact or constructive. "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. Explanation II of said Section 3 reads: Explanation II- 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. It has been further held: Hence with reference to subsequent purchaser it is essential that he should make an enquiry as to the title or interest of the person in actual possession as on the date when the sale transaction was made in his favour. The actual possession of a person itself is deemed or constructive notice of the title if any, of a person who is for the time being in actual possession thereof. A subsequent purchaser has to make inquiry as to further interest, nature of possession and title under which the person was continuing in possession on the date of purchase of the property. On the aforesaid parametres, now this Court is required to look into the evidence on record. As regards possession of the disputed property, it has been contended in the pleadings by the Defendants that the Plaintiff/Respondent No. 1 forcibly dispossessed the present Appellant during the pendency of the suit. Thus, the possession of the Respondent No. 1 is admitted to the Defendants though, as a forcible occupant. Learned Trial Judge after considering the evidence on record, has found in paragraph-29 and 30 of the impugned judgment that the Appellant is not found to have obtained possession at the time of execution of registered sale deed Ex. /D-1 in his favour and is further not found to have been forcibly dispossessed by the Respondent No. 1. Learned Trial Judge after considering the evidence on record, has found in paragraph-29 and 30 of the impugned judgment that the Appellant is not found to have obtained possession at the time of execution of registered sale deed Ex. /D-1 in his favour and is further not found to have been forcibly dispossessed by the Respondent No. 1. Learned Trial Judge has also further found on the basis of evidence on record vide paragraph-28 of the impugned judgment that the Plaintiff has obtained the possession of the suit property at the time of agreement of sale in his favour. Plaintiff, after the agreement in his favour obtained permission for construction from the Panchayat as revealed in Ex. /P-2 and P-3 which have been duly proved by the statement of Sarpanch of Gram Panchayat, Mahadeva. Plaintiff had also made construction of boundary and have put slabs on the rooms. Plaintiff has submitted various receipts contained in Ex. /P-4 to P-10 which relate to the material of construction and labour charges with respect to the construction on the disputed property. These all have been believed by the learned Trial Judge who has concluded that the Plaintiff/Respondent No. 1 after having obtained the possession pursuant to the agreement of sale in his favour has made the construction. As regards the statement of Badri Singh, it may be seen that the learned Trial Judge in paragraph-43 of the impugned judgment has observed that he has deposed contrary to his own pleadings. Accordingly, learned Trial Judge has found that this witness was not trustworthy. As regards the evidence of the Appellant, it may be seen that the disputed property is situated at a walkable distance of hardly two minutes from the shoe factory owned by him. Thus, the Appellant will be presumed to have the knowledge of the construction which was made by the Plaintiff/Respondent No. 1 on the disputed property. Appellant has further admitted in paragraph-22 of his statement that there situates a land of the Plaintiff/Respondent No. 1 which is adjacent to the disputed property. Although, the Appellant has pleaded that the construction was made by him on the disputed property, he has expressed his inability to give particulars of the length and width of the room which has been constructed on the disputed land. Similarly, he has further expressed his inability to disclose the number of windows. Although, the Appellant has pleaded that the construction was made by him on the disputed property, he has expressed his inability to give particulars of the length and width of the room which has been constructed on the disputed land. Similarly, he has further expressed his inability to disclose the number of windows. He has further failed to make a statement about the direction towards which the window's get opened. Thus, the learned Trial Judge is found to have correctly observed that the Appellant appears to be aware of the fact that the disputed property is in possession of the Plaintiff/Respondent No. 1 and has not made any query about the nature of possession of Plaintiff/Respondent No. 1. Appellant being a subsequent purchaser, is obliged to prove that the purchase was made by him in good faith without notice of the interest of the Plaintiff/Respondent No. 1. If he has refrained himself from making any enquiry from occupant (Plaintiff/Respondent No. 1 in the present case), he is himself to be blamed for it and he cannot be held to be a bona fide purchaser within the meaning of Section 19(b) of the Specific Relief Act in the light of law laid down by the Apex Court in the case of R.K. Mohammed Ubaidullah (supra). In the result, learned Trial Judge is not found to have appreciated the evidence in an illegal or incorrect manner and the findings of the trial Court are, therefore, confirmed. Accordingly, both the appeals against the Respondent No. 1 are hereby dismissed. Since, the Respondent Badri Singh is found to have already received the entire consideration of the suit property from the Plaintiff/Respondent No. 1, he cannot be permitted to be enriched by retaining the amount of consideration received from the present Appellant vide Ex. /D-1. So, I feel it proper to exercise the powers under Order 41, Rule 33 of Code of Civil Procedure. Since, the Appellant is not found to be a bona fide purchaser but is found to have paid the consideration to Badri Singh, it is held that he is entitled to the refund of amount of consideration from Badri Singh. Accordingly, while maintaining the decree for specific performance in favour of Plaintiff/Respondent No. 1, it is directed that the Appellant shall be entitled to recover the amount of consideration of Rs. Accordingly, while maintaining the decree for specific performance in favour of Plaintiff/Respondent No. 1, it is directed that the Appellant shall be entitled to recover the amount of consideration of Rs. 40,000/- being consideration as mentioned in the registered sale deed dated 12-4-1989 contained in Ex. /D-1 from Badri Singh with simple interest @ 6% from the date of suit till the date of recovery. The Executing Court at the time of execution of the decree against Respondent No. 2 shall realize the Court fees from the Appellant on the amount which would be liable to be recovered through execution of the modified decree. Decree be modified accordingly. No order as to costs of these appeals. Final Result : Dismissed