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Madhya Pradesh High Court · body

2006 DIGILAW 573 (MP)

MALAM SINGH v. RAM PRASAD DESHWALI

2006-04-20

S.L.JAIN

body2006
Judgment ( 1. ) INVOKING appellate jurisdiction of this Court under Section 96 of the Code of Civil Procedure, 1908, the appellant-plaintiff has filed this appeal calling in question the legality, validity, propriety and correctness of judgment and decree dated 23-12-84, passed by Vth Additional District Judge, Bhopal in Civil Suit no. 36-A/89. ( 2. ) THE brief facts shorn of gratuitous and unnecessary details may be narrated thus:- ( 3. ) THE appellant-plaintiff filed a suit against the defendants for specific performance of the contract for sale of agricultural land alleged to have been executed by deceased Ram Prasad (now represented through his legal representatives) stating that initially the land in dispute was owned by Kaniram deswalia, the son-in-law of deceased Ram Prasad and father of Om Prakash (since deceased and represented by respondents Munni Bai, Ramshri, ramnarayan and Prem Narayan ). Deceased Kaniram on 28-5-71 executed a sale deed in favour of deceased Ram Prasad. Thereafter, proceedings under Section 145 of the Cr. PC were initiated with regard to the suit land. During the pendency of these proceedings, on 17-9-74, deceased Ram Prasad Daswalia entered into an agreement with the plaintiff to sell the suit property for a consideration of rs. 30,000/- and received a sum of Rs. 20,000/ -. Deceased Ram Prasad agreed to execute the sale deed in favour of the plaintiff after receiving the remaining consideration of Rs. 15,000/ -. A document Exh. P-1 was executed by deceased ram Prasad in favour of the plaintiff on 17-9-74 itself. Deceased Ram Prasad also agreed to deliver possession of the suit land to the plaintiff after termination of the proceedings under Section 145 of the Cr. PC. ( 4. ) THE plaintiff pleaded that after termination of the proceedings under Section 145, Cr. PC, the receiver handed over the possession of the suit land to deceased Ram Prasad in the month of August, 1975 and in turn Ram prasad handed over possession of the suit land to the plaintiff. Despite repeated requests by the plaintiff, deceased Ram Prasad did not execute sale deed in his favour. Therefore, he served a notice on deceased Ram Prasad for execution of the sale deed after taking the remaining amount of consideration. In reply to this notice deceased Ram Prasad denied the execution of the agreement and receipt of part consideration of Rs. 20,000/ -. ( 5. Therefore, he served a notice on deceased Ram Prasad for execution of the sale deed after taking the remaining amount of consideration. In reply to this notice deceased Ram Prasad denied the execution of the agreement and receipt of part consideration of Rs. 20,000/ -. ( 5. ) THE plaintiff also pleaded that subsequently, in the month of august of the year 1977, the plaintiff received a notice from the Court at Bhopal, whereby he learnt that deceased Ram Prasad has sold the suit property on 8-7-77 to the sons of Kaniram namely Om Prakash (since deceased), Ram Narayan, respondent No. 3 and Prem Narayan respondent No. 4. The plaintiff averred that after the execution of the agreement to sell in his favour, Ram Prasad had no authority to sell the suit property in favour of said Om Prakash, Ram Narayan and Prem Narayan. The said Om Prakash and others had the knowledge of the agreement in question, therefore, they cannot be said to be the bonafide purchasers of the suit land without the knowledge of the agreement. Thus, they are also bound by the agreement. ( 6. ) THE plaintiff further pleaded that he had always been willing to pay rs. 10,000/- and get the sale deed executed in his favour. He had always been willing and still willing to perform his part of contract. The plaintiff prayed for specific performance of the contract and in the alternative for refund of the amount of Rs. 20,000/- paid by way of advance along with interest @ 12% per annum. The appellant also prayed that respondent be restrained from interfering with his possession over the suit land. ( 7. ) DECEASED Ram Prasad Deswalia filed his written statement and pleaded that he never purchased suit land from Kaniram nor the possession was delivered to him. In fact, Kaniram borrowed a sum of Rs. 6,000/- from him and for security of that loan executed a nominal sale deed Exh. D-1 in his favour without any intention to act upon. Kaniram and his sons defendant Nos. 2,3 and 4, through their mother remained in possession of the suit land. Defendant Ram prasad also denied the execution of the agreement for sale of the suit property for a consideration of Rs. 30,000/- and the receipt of Rs. 20,000/- by way of earnest money. He also denied execution of the agreement Exh. D-1. 2,3 and 4, through their mother remained in possession of the suit land. Defendant Ram prasad also denied the execution of the agreement for sale of the suit property for a consideration of Rs. 30,000/- and the receipt of Rs. 20,000/- by way of earnest money. He also denied execution of the agreement Exh. D-1. He averred that he was never in possession of the suit land and never delivered the possession thereof. He also denied receipt of the notice and reply to it alleged to have been given by him through his Counsel Shri S. C. Dwivedi. ( 8. ) RAM Prasad also pleaded that after disappearance of Kaniram his l. Rs. returned a sum of Rs. 6,000/- which were borrowed by Kaniram from him, therefore, he executed a sale deed Exh. D-2 in favour of defendant Nos. 2,3 and 4 who were already in possession of the suit land. It was also his case that the agreement Exh. P-1 is a forged document. He has also denied his liability to refund a sum of Rs. 20,000/ -. ( 9. ) DEFENDANT Nos. 2,3 and 4 filed separate written statement denying the claim of the plaintiff and pleaded that their father Kaniram did not sell the suit property to Ram Prasad. In fact, their father borrowed Rs. 6,000/- from Ram prasad and as a security for the loan amount executed a nominal sale deed but the possession of the suit land remained with him. Ram Prasad was never in possession of the suit land. They also pleaded that the document Exh. P-l is a forged and fabricated document. After the refund of amount borrowed from ram Prasad he executed sale deed Exh. D-2 in their favour. ( 10. ) THE Trial Court framed as many as 7 issues and recorded the finding that it could not be proved that deceased Ram Prasad was the owner and in possession of the suit land. The defendant No. 1 (since deceased) did not execute any agreement to sell in favour of the plaintiff after accepting a sum of rs. 20,000/- and did not agree to execute the sale deed. The Trial Court also recorded a finding that defendant No. 1 was only an ostensible owner of the suit land. In fact the property belonged to Kaniram and after his disappearance to his sons and dismissed the plaintiffs suit. ( 11. 20,000/- and did not agree to execute the sale deed. The Trial Court also recorded a finding that defendant No. 1 was only an ostensible owner of the suit land. In fact the property belonged to Kaniram and after his disappearance to his sons and dismissed the plaintiffs suit. ( 11. ) IT is against this judgment of the Trial Court that the plaintiffs have come up in appeal. ( 12. ) DURING the pendency of the appeal a notice was issued to the receiver to remain present in the Court and explain how he delivered possession of the property to the respondents. In compliance of the notice, receiver Jagdish parmar, Advocate appeared through his Counsel Shri Amit Verma and submitted his reply. In reply, he stated that on 23-12-84 the suit filed by the appellant was finally dismissed by the Trial Court and he was directed to hand over possession of the suit land to defendant Nos. 2, 3 and 4. Accordingly, the possession was delivered to defendant Nos. 2,3 and 4. ( 13. ) ON perusal of the material on record the reply of the receiver, advocate Shri Parmar, appears to be satisfactory, therefore, no further action in the matter is required. ( 14. ) REGARDING the merits of the appeal, I have heard Shri K. N. Agrawal, learned Counsel appearing for the appellant. None appeared for the respondents at the time of final hearing of the appeal. ( 15. ) THE main thrust of the contention of Shri Agrawal is that the Trial court committed grave error in recording a finding that the plaintiff has failed to prove that the defendant No. 1 entered into an agreement to sell the suit land for a consideration of Rs. 30,000/-, received part consideration of Rs. 20,000/- and executed the agreement dated 17-9-74. ( 16. ) MALAM Singh (P. W. 1) has stated that the defendant No. 1 agreed to sell the suit land to him for a consideration of Rs. 30,000/-, received earnest money of Rs. 20,000/- and executed the agreement Exh. P-l on 17-9-74. The possession of the suit land was delivered to him in the year 1975. His name was also mutated in the revenue records. Sitaram (P. W. 2) has also supported the evidence of Malam Singh (P. W. 1 ). He has stated that an agreement, Exh. P-1, took place between the parties. P-l on 17-9-74. The possession of the suit land was delivered to him in the year 1975. His name was also mutated in the revenue records. Sitaram (P. W. 2) has also supported the evidence of Malam Singh (P. W. 1 ). He has stated that an agreement, Exh. P-1, took place between the parties. This document bears his signatures. The document was executed in his presence. Defendant Ram Prasad put his thumb impression on this document. Bhanwarlal was the scribe of this document. Ram prasad admitted before him that he had received the consideration. ( 17. ) KEWALRAM (P. W. 3) has also stated that Ram Prasad entered into an agreement to sell the land in favour of plaintiff for a consideration of Rs. 30,000/- in his presence and part consideration of Rs. 20,000/- was paid. The document exh. P-1 was executed in his presence. The document also bears his signature. Ram Prasad put his thumb mark on this document. Bhanwarlal (P. W. 4) who is the scribe of document, Exh. P-1, stated that the document Exh. P-1 was scribed by him on the instructions of Ram Prasad. Ram Prasad put his thumb mark on this document in his presence. The document Exh. P-1 was read over to Ram prasad. The witnesses also signed the document in his presence. ( 18. ) AS against this, defendant Ram Prasad, who has been examined as d. W. 6 has stated that the land in dispute belonged to Kaniram who borrowed a sum of Rs. 6,000/- from him. As a security for loan he executed a sale deed dated 28-5-71 marked as Exh. D-1 in his favour. The document was executed by way of mortgage. After some time Kaniram disappeared and could not be traced till the date of his evidence. His wife, Ramshri Bai returned the sum of Rs. 6,000/-, therefore, he re-conveyed the suit land in favour of the heirs of Kaniram. Regarding the execution of agreement, Exh. P-1, the witness has stated that he never entered into the agreement to sell the suit property to Malam Singh and possession was never delivered to him. ( 19. ) ON the perusal of the evidence of aforesaid witnesses, I find that the witnesses examined by the plaintiff inspire confidence. It is difficult to believe that Bhanwarlal (P. W. 4), who is the scribe of the document, Exh. ( 19. ) ON the perusal of the evidence of aforesaid witnesses, I find that the witnesses examined by the plaintiff inspire confidence. It is difficult to believe that Bhanwarlal (P. W. 4), who is the scribe of the document, Exh. P-1 will go to the extent of fabricating the document. Though the witness, Bhanwarlal has stated that Ram Prasad was not known to him, other attesting witnesses of the document, Exh. P-1 were knowing Ram Prasad who stated that Ram Prasad put his signature on the document, Exh. P-1. The Trial Court has rejected the evidence of the plaintiffs witnesses on flimsy grounds. In the Khasras of the year 1975-76 and 1976-77 name of Malam Singh has been recorded as the person in possession of the suit land. This also establishes that the agreement was entered into by the defendant and possession was delivered. Therefore, the finding of the Trial Court that the document, Exh. P-1 is a forged document is indefensible. ( 20. ) RAM Prasad (P. W. 6) has stated that initially the land in suit belonged to Kaniram. It was mortgaged by Kaniram in his favour in the year 1971 vide Exh. D-1 for a consideration of Rs. 6,000/ -. When the amount of Rs. 6,000/-was repaid to him he executed the sale deed, Exh. D-2 in favour of sons of kaniram. ( 21. ) THE document, Exh. D-1 reveals that in fact the sale deed was executed by Kaniram in favour of Ram Prasad. Therefore, it cannot be said that the property in suit was mortgaged by Kaniram in favour of Ram Prasad. There was no reason for Kaniram to write the sale deed of a valuable land only for borrowing a paltry sum of Rs. 6,000/ -. There is no evidence that Kaniram was in such a dire need of money that he agreed to execute the sale deed in favour of ram Prasad. On the face of the sale deed it cannot be said that the document, exh. D-1, was a sham transaction and was executed without any intention to act upon the same. Therefore, the finding of the Trial Court that the document, exh. D-1, was a sham transaction also is not acceptable. ( 22. ) EVEN if Exh. D-1 is considered to be the sale deed, the subsequent sale by Ram Prasad in favour of sons of deceased Kaniram vide Exh. Therefore, the finding of the Trial Court that the document, exh. D-1, was a sham transaction also is not acceptable. ( 22. ) EVEN if Exh. D-1 is considered to be the sale deed, the subsequent sale by Ram Prasad in favour of sons of deceased Kaniram vide Exh. D-2, cannot be doubted. Exh. D-2 reveals that after the execution of the agreement to sell, the property in dispute was sold to the children of Kaniram. Sons of Kaniram are bonafide purchasers. There is no evidence whatsoever that the sons of Kaniram who purchased the suit land vide Exh. D-2 had knowledge of the agreement, exh. P-1 proved to have been executed by Ram Prasad in favour of the plaintiff. ( 23. ) IT is true that when a person buying a property has notice that another has already contracted to buy it, the former stands in the position of the trustee for the later of the land purchased by him and he could not profit by the conveyance to him except to stand in the shoes of the vendor but where the vendee is the bonafide purchaser of the property in dispute for valuable consideration without notice of the earlier agreement, earlier agreement to sell cannot be enforceable against the vendee. The plaintiff has not given any evidence to the effect that sons of Kaniram had the notice of earlier agreement. ( 24. ) RAMSHRI Bai (D. W. 7), the mother of the minor purchasers has specifically stated that her father Ram Prasad did not execute any agreement of sale in favour of the plaintiffs. ( 25. ) IT is true that law imputes notice to subsequent transferee of prior contract of sale so as to prevent him from asserting any rights as against prior contractee, whose rights have been germinated in prior contract and it is also true that the burden to prove the absence of notice lies on the subsequent purchaser but if the parties have led evidence in the Trial Court, the burden of proof becomes immaterial and if the Appellate Court comes to the conclusion on the evidence that the defendant is bonafide transferee for value without notice of the prior agreement, it would refuse the grant of specific performance in exercise of its discretion. ( 26. ( 26. ) SECTION 19 (b) of the Specific Relief Act does not in terms prescribe any inquiry on the part of the transferee as Section 41 of the Transfer of property Act. The essence of good faith is the honesty of intention. The onus of proving that the subsequent purchaser had no notice of prior agreement is ordinarily discharged by denial. When Ramshri Bai has denied on oath knowledge of the plaintiffs contract and the plaintiff has not given any evidence whatsoever to prove that the purchaser had knowledge of the agreement, the evidence of Ramshri Bai that Ram Prasad did not enter into an agreement indicates that she had no knowledge of agreement. Burden to prove the absence of knowledge is light and in the circumstances of the present case denial by Ramshri Bai is the sufficient discharge of burden. ( 27. ) FROM the evidence on record, it is well established that the defendant Nos. 2,3 and 4 are the transferrers for value who had paid the money in good faith and without notice of the earlier contract, therefore, though it has been proved that the agreement was entered into by Ram Prasad to sell the suit property to Malam Singh after receiving consideration of Rs. 20,000/-, in the circumstances of the case decree of specific performance of the contract cannot be passed. ( 28. ) THE plaintiff has also prayed for the relief of refund of earnest money. Where the refund of earnest money or the compensation is claimed as alternative relief in express words the decree for it can be granted. The compensation normally should be the loss of interest suffered by the purchaser on the amount of earnest money. In the present case, where decree of specific performance cannot be given in favour of the plaintiff because of the fact that subsequent to the agreement the property has been purchased in good faith by respondent Nos. 2 to 4, it will be appropriate to direct refund of the amount paid by the plaintiff by way of earnest money with reasonable interest which can also be said to be the compensation. ( 29. ) FOR the aforesaid reasons, the appeal is partly allowed. The suit for specific performance of the contract is dismissed. However, the relief of refund of earnest money is granted in favour of the plaintiff/appellant. The respondent nos. ( 29. ) FOR the aforesaid reasons, the appeal is partly allowed. The suit for specific performance of the contract is dismissed. However, the relief of refund of earnest money is granted in favour of the plaintiff/appellant. The respondent nos. 1 (a) to 1 (f) will refund a sum of Rs. 20,000/- (Rupees Twenty thousand) to the plaintiff/appellant with interest at the rate of 6% (six per cent) per annum from the date of the suit till the date of realization. Parties shall bear their own costs. First Appeal partly allowed.