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2007 DIGILAW 887 (ALL)

PRAKASH CHANDRA GUPTA v. SADHO SINGH

2007-04-06

S.N.SRIVASTAVA

body2007
JUDGMENT Hon’ble S.N. Srivastava, J.—This Second appeal has been preferred against the judgment and decree dated 19.5.1981, passed by 2nd Additional District Judge, Shahjahanpur allowing Civil Appeal No. 123 of 1980, Sadho Singh v. Prakash Chandra Gupta and others dismissing suit, by reversing the judgment and decree dated 24th May, 1980 passed in original Suit No. 137 of 1978, Prakash Chandra v. Smt. Loungsri for specific performance of agreement to sell dated 11.2.76. 2. Plaintiff filed a suit for specific performance of contract dated 11.2.76 of the house in suit situated in Mohalla Tarin Bahadurganj, Shahjahanpur on the ground inter-alia that for the house in suit situated on plot No. 470 area (12 x 8) 96 sq yards, that an agreement to sell was entered into on 11.2.1976 by defendant No. 1 Loungsri for consideration of Rs. 7,500/-, that out of which Rs. 5,000/- was paid as earnest money, that in spite of the effort and plaintiffs readiness and willingness to purchase the property, the sale-deed was not executed and defendant No. 2 with full knowledge of agreement to sell got executed a sale-deed dated 19.8.77 which was a paper transaction registered on 28.9.77 for alleged consideration of Rs. 10,000/-, that the defendants are bound by the agreement to execute a sale-deed. Accordingly relief was sought to pass a decree of specific performance of the contract dated 11.2.76 of the house in suit against defendants to execute sale-deed after taking Rs. 2,500/-. 3. A Written Statement was filed by defendant No. 2 denying the plaint allegations and also execution of agreement to sell. In alternative, it was pleaded that defendant No. 2 was a bona fide purchaser for value without notice and, as such, suit for specific performance could not be decreed against him. Various other pleadings were also made in written statement including bar of limitation. Defendant No. 1 Laungsri also filed her written statement. She denied plaint allegation and also pleaded that plaintiff was never in possession of the house in suit. On pleadings of parties, following issues were framed : (1) Whether there was any agreement to sell between plaintiff and defendant. (2) Whether plaintiff is in actual possession of the house in suit. (3) Whether defendant No. 2 is bona fide purchaser. (4) Whether any other relief which plaintiff is entitled to. Issue No. 1 was decided in favour of plaintiff by Trial Court. (2) Whether plaintiff is in actual possession of the house in suit. (3) Whether defendant No. 2 is bona fide purchaser. (4) Whether any other relief which plaintiff is entitled to. Issue No. 1 was decided in favour of plaintiff by Trial Court. It was found that an agreement to sell between plaintiff and defendant No. 1 was entered into and Rs. 5,000/- was also paid at the time of agreement to sell. So far as Issue No. 2 is concerned, plaintiffs possession was found from before to execution of agreement to sell. So far as Issue No. 3 is concerned, it was held that defendant No. 2 was not a bona-fide purchaser for value. 4. With above findings, suit was decreed on 24.5.1980 for specific performance of contract directing defendant No. 1-Loungsri and defendant No. 2 Sadho Singh to execute sale-deed after receiving balance amount of Rs. 2500/- failing which, the sale-deed will be executed in accordance with law by the Court. 5. An appeal preferred by defendant No. 2 (subsequent purchaser) was allowed and suit was dismissed, though Appellate Court affirmed the finding on Issue No. 1 that Smt. Loungsri defendant No. 1 executed agreement to sell dated 11.2.76. Appellate Court held that Loungsri executed sale-deed of the house in suit in favour of defendant-appellant on 19.8.77 after receiving of Rs. 10,000/- as sale consideration and defendant No. 2 was a bona fide purchaser for value without notice, so the agreement to sell is unenforceable against defendant No. 2. 6. Second Appeal was admitted on following substantial question of law : (1) Whether the finding of the lower appellate Court that the first defendant respondent was a bona fide transferee for a valuable consideration without notice of the agreement of sale, is vitiated in law ? 7. Heard learned Counsel for the parties at great length. 8. Learned Counsel for the appellant urged that defendant respondent No. 2 Sadho Singh was not a transferee for value without notice and finding of the Lower Appellate Court to the effect is perverse and is liable to be set aside. 7. Heard learned Counsel for the parties at great length. 8. Learned Counsel for the appellant urged that defendant respondent No. 2 Sadho Singh was not a transferee for value without notice and finding of the Lower Appellate Court to the effect is perverse and is liable to be set aside. He further urged that defendant No. 2 pleaded him a bona fide purchaser for value and burden of proof was on the defendant No. 2 to prove it, which he did not discharge and lower appellate Court erred in law in placing burden of proof on plaintiff to disprove pleading of defendant No. 2. The lower Appellate Court erred in law setting aside the decree of Trial Court by which defendant Sadho Singh was also directed to join in execution of sale-deed. Concurrent finding of fact was rightly recorded by both the Courts below that the agreement to sell was executed by Loungsri in favour of plaintiff on 11.2.76. As defendant Sadho Singh could not prove that he was a bona fide purchaser for value without notice the judgment and decree of Lower Appellate Court is vitiated in law and is liable to be set aside and Trial Court decree is liable to be restored. 9. Dr.(Smt.) Madhu Tandon, learned Counsel appearing on behalf of defendant-respondent Sadho Singh urged that defendant respondent Sadho Singh proved the payment of Rs. 10,000/- as sale consideration and for sale-deed executed through a registered instrument. Sadho Singh had no notice of unregistered agreement to sell dated 11.2.76. Learned Counsel for the respondent further urged that the finding of fact of Lower Appellate Court on the question of notice of agreement to sell and bona fide purchaser with value is a finding of fact and could not be interfered with in the Second Appeal and no substantial question of law arises in the present Second Appeal to interfere with the findings of fact recorded on appraisal of entire evidence on record. 10. Considering the arguments of learned Counsel for the parties and carefully gone through the evidence on record. 11. In view of the finding of fact recorded by both the Courts below that agreement to sell dated 11.2.76 was executed by Loungsri in favour of plaintiff, this Court is also of the view that agreement to sell dated 11.2.76 was enforceable against defendant No. 1 Smt. Loungsri. 11. In view of the finding of fact recorded by both the Courts below that agreement to sell dated 11.2.76 was executed by Loungsri in favour of plaintiff, this Court is also of the view that agreement to sell dated 11.2.76 was enforceable against defendant No. 1 Smt. Loungsri. Defendant No. 2 did not challenge this finding in agreement. Now questions arise to be considered is that agreement to sell dated 11.2.76 was enforceable against defendant No. 2, who was subsequent purchaser and whether he was entitled to get benefit of Section 19 of Specific Relief Act (hereinafter referred to as the Act). 12. In order to consider these questions whether defendant No. 2 was entitled to get benefit of Section 19 of the Act, it is necessary to consider requirement of Section 19 of Specific Relief Act, which is quoted as follows : "19. Relief against parties and persons claiming under them by subsequent title.—Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against— (a) either party thereto; (b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;" 13. Any Agreement to sell is enforceable against any person who claims subsequent transferee to the contract unless it comes within the exceptions to Section 19 of the Act. Sadho Singh, Defendant No. 2 purchased the house in suit through sale-deed dated 19.8.77 from Loungsri who had already executed agreement to sell on 11.2.76 in favour of plaintiff. Thus Sadho Singh is claiming title through Loungsri. 14. Question is whether agreement to sell is enforceable by a decree of specific performance against subsequent transferee. There was only two exceptions, i.e. (1) Transferee for value in good faith, and (2) without notice to original contract. Both are exceptions to General Rule and are required to be pleaded and proved by a party who claims such exception being a subsequent transferee. This Court is also of the view that a subsequent transferee, who pleads exception to Section 19 of the Act has to prove the exception to General Rule. Lower Appellate Court erred in placing the burden of proof on plaintiff to prove the exceptions. My view is supported by a case law of the Privy Council. 15. This Court is also of the view that a subsequent transferee, who pleads exception to Section 19 of the Act has to prove the exception to General Rule. Lower Appellate Court erred in placing the burden of proof on plaintiff to prove the exceptions. My view is supported by a case law of the Privy Council. 15. Privy Council laid down law on this point in Bhup Narain Singh v. Gokul Chand Mahton and others, AIR 1934 PC 68 : Relevant paragraphs are quoted below : “In their Lordship’s opinion, the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships opinion it is clearly for the transferee to establish the circumstances which, will allow him to retain the benefit of transfer which prima facie, he had no right to get. Further the subsequent transferee is the person within whose knowledge the facts as to whether he has paid and whether he had notice of the original contract lien, and the provisions of Sections 103 and 106, Evidence Act, 1872, have a bearing on the question. The plaintiff does not necessarily have knowledge of either matter. In a case in 1862 before this Board, Varden Seth Sam v. Luckpathy Reyje Lallah (1), an equitable lien by deposit of title deeds was enforced against a subsequent transferee of the property." Privy Council also relied upon number of cases in the judgment aforementioned. ‘This view under the Specific Relief Act, has been taken in a number of cases in India, of which it is sufficient to refer to Himatlal v. Vasudev, (1912) 36 Bom 446 : 16 IC 680, Baburam Bag v. Madhab Chandra, (1913) 40 Cat 565 : 19 I C 9; Tiruvenkatachariar v. Venkata Chariar, AIR 1914 Mad 634; Naubat Rai v. Dhaunkal Singh, 1916 38 All 184; Muhammad Sadik Khan v. Masihan Bibi, AIR 1930 Pat 452.“ 16. Lower Appellate Court while considering issue No. 2 considered the contention of plaintiff that sale-deed was a fictitious document and was allegedly executed by Loungsri in favour of defendant appellant without any consideration in order to defeat plaintiffs right. Lower Appellate Court while considering issue No. 2 considered the contention of plaintiff that sale-deed was a fictitious document and was allegedly executed by Loungsri in favour of defendant appellant without any consideration in order to defeat plaintiffs right. Lower Appellate Court did not accept the statement of plaintiff only on the ground that sale-deed was not executed in presence of plaintiff and plaintiff did not examine any attesting witness of sale-deed. Burden of proof was on the defendant No. 2 to prove the exception to General Rule under Section 19 of the Act. On consideration of evidence of plaintiff, Lower Appellate Court wrongly held that plaintiff did not prove the exception to Section 19 of the Act. On consideration of oral evidence of Loungsri, it is also borne out that she stated in cross-examination that defendant No. 2 did not pay any sale consideration to her for sale-deed of the house in suit. Lower Appellate Court did not accept on the ground of her alleged earlier statement in a suit instituted by one Waris Ali (not party to suit) as well as on the basis of recital of payment mentioned in the sale-deed. 17. It is also borne out from the record that copy of the statement of Loungsri allegedly made in the so-called previous suit is not part of record of this suit and she was never put for confrontation to her alleged statement as required under Section 145 of the Indian Evidence Act. Section 145 of the Indian Evidence Act is re-produced below for ready reference : "145. Cross-examination as to previous statement in writing.—A witness may be cross-examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without, such writing being shown to him, or being proved; but if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him." 18. Defendant No. 2 Sadho Singh was required under law to prove actual payment of sale consideration by producing evidence that sale-deed was for value and in order to prove whether actual payment of sale consideration was made to Loungsri, Defendant No. 2 was required to produce oral as well as documentary evidence but neither there was specific pleading as regards to actual payment of sale consideration i.e. date of actual payment/mode of payment/place of payment etc. and other relevant details in written statement nor any evidence was produced by Sadho Singh-defendant No. 2 to prove the actual payment to Smt. Loungsri of Rs. 9,000/- allegedly made prior to the date of registration of sale-deed, according to the recital, only Rs. 1,000/- was paid at the time of registration. If recital in sale-deed is taken as evidence of payment, the payment of only Rs. 1,000/- may be presumed to have been made at the time of registration to Smt. Loungsri. Smt. Loungsri denied any payment in her statement. The statement allegedly made by her in some previous suit not (inter-parties) was never put for confrontation. Thus it is established that as defendant No. 2 did not produce any evidence to prove that Rs. 9,000/- was actually paid prior to the registration. This Court is of the view that vague pleadings (in absence of specific pleading as regards to the payment, mode of payment, kind of payment, the date of payment etc.) coupled with non-production of oral or documentary evidence to prove the actual payment of entire amount of sale consideration clearly established that subsequent sale-deed was not for value. The Lower Appellate Court erred in law in holding that the sale-deed executed in favour of defendant No. 2 was for value. This finding of Lower Appellate Court is based on no evidence and unsustainable in law. Thus decree for specific performance of the agreement to sell dated 11.2.76 is executable against defendant No. 2 Sadho Singh also. The Trial Court rightly decreed the suit. Lower Appellate Court acted illegally in allowing the Civil appeal and dismissing the suit. 19. With the result, substantial question of law framed in the second appeal is decided in favour of plaintiff and against defendants as sale-deed was not executed for value in good faith. 20. Second Appeal is allowed. The judgment and decree dated 19.5.1981 passed by Lower Appellate Court is set aside. 19. With the result, substantial question of law framed in the second appeal is decided in favour of plaintiff and against defendants as sale-deed was not executed for value in good faith. 20. Second Appeal is allowed. The judgment and decree dated 19.5.1981 passed by Lower Appellate Court is set aside. The judgment and decree dated 24.5.1980 passed by Trial Court is restored. Suit is decreed in terms of decree passed by Trial Court. ————