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2020 DIGILAW 618 (KAR)

Jainabu v. Anitha Rego And Others

2020-03-03

JOHN MICHAEL CUNHA

body2020
JUDGMENT John Michael Cunha, J. - This appeal is filed by the second defendant in O.S. No. 88/2008. 2. Respondent Nos. 1 and 2 herein as plaintiffs in O.S. No. 88/2008 filed a suit for specific performance of the sale agreement dated 09.08.2007 executed in their favour by respondent No. 3 herein (defendant No. 1 in the original suit). Under the said agreement, the original defendant No. 1 agreed to sell a total extent of 4 acres of land comprised in Sy. Nos. 12/13, 12/20, 12/21, 12/20, 12/8, 12/23, 12/19 of Amblamogaru village, Mangaluru Taluk, Dakshina Kannada to the plaintiffs for a total consideration of Rs. 13.00 lakhs at the rate of Rs. 3,250/- per cent. Clause 4 of the aforesaid agreement stipulated that the vendor viz., defendant No. 1 shall make out marketable title to the satisfaction of the purchasers including the vendor by producing all relevant documents such as, legal scrutiny report from Advocate Sri. M.V. Shankar Bhat, Mangaluru, Release letter from the bank in which the schedule property was mortgaged, R.T.C., death certificate of Narayana Shetty and his wife, survival certificate of Avanthi Shetty, Narayana Shetty etc., all at his cost before registration. The time for registration and execution of the sale deed was fixed within three months from the date of the aforesaid agreement. 3. The case of the plaintiffs is that they were always ready and willing to perform their part of the contract by paying balance sale consideration, as agreed. However, defendant No. 1 in order to avoid execution and registration of the sale deed, unnecessarily delayed execution of the sale deed. On coming to know that defendant No. 1 was attempting to alienate the suit schedule property clandestinely in favour of third parties, plaintiffs issued a public notice dated 12.06.2008 in Udayavani Kannada Daily Newspaper and also lodged a complaint against defendant No. 1 before the police on 14.06.2008. 4. On service of summons, defendant No. 1 filed a written statement denying the suit agreement as well as his liability to execute the sale deed. In the said written statement, he contended that the suit itself was not maintainable for non-joinder of necessary parties without arraying one Mrs. Jainabu as party to the suit. 4. On service of summons, defendant No. 1 filed a written statement denying the suit agreement as well as his liability to execute the sale deed. In the said written statement, he contended that the suit itself was not maintainable for non-joinder of necessary parties without arraying one Mrs. Jainabu as party to the suit. In view of the said contention, on ascertaining that before the expiry of time prescribed for execution of the sale deed, defendant No. 1 having alienated the suit schedule property in favour of aforesaid Jainabu, she was impleaded in the suit as defendant No. 2. Defendant No. 2 in her written statement took up a plea that she was a bonafide purchaser of the suit schedule property without prior knowledge of the agreement alleged to have been entered into between the plaintiffs and defendant No. 1. 5. Based on these pleadings, trial court framed the following issues:- Issues: 1) Whether the plaintiffs prove that the defendant has entered into an agreement to sell suit schedule properties for consideration of Rs. 13,00,000/- and executed agreement of sale dated: 09-08-2007? 2) Whether the plaintiffs further prove that they have paid Rs. 3,05,000/- to the defendant by way of advance sale consideration of Rs. 9,95,000/- was agreed to be paid within three months as averred in the plaint Para No. 3(b)? 3) Whether the plaintiffs prove that they have been and they are still ready and willing to perform their part of the agreement by paying the balance consideration as agreed by them? 4) Whether there was no cause of action for the suit institution of the suit as pleaded? 5) Whether the suit of the plaintiffs is barred by limitation? 6) Whether the defendant proves that the plaintiffs requested him to repay the advance amount paid under the alleged agreement and as such he was forced to sell the suit schedule property in favour of one Mrs. Jainabi, W/o Abdul Lathief with the consent of the plaintiffs as contended in the written statement? 7) Whether the defendant proves that the suit of the plaintiffs is bad for non-joinder of necessary party without impleading Mrs. Jainabi as party to the suit as contended in Para No. 18 of the written statement? 8) Whether the plaintiffs prove that they are entitled for the relief of specific performance of the agreement as sought for? 9) What order or Decree? Jainabi as party to the suit as contended in Para No. 18 of the written statement? 8) Whether the plaintiffs prove that they are entitled for the relief of specific performance of the agreement as sought for? 9) What order or Decree? Additional Issues: 1) Whether the defendant No. 2 proves that she is the bonafide purchaser for valid consideration of property under the four registered sale deed dated: 19.09.2007 as contended at para No. 4 of the written statement? Plaintiff No. 1 examined herself as PW-1 and produced in evidence 22 documents marked as Exs-P1 to P22. Defendant No. 1 examined himself as DW-1 and power of attorney holder of defendant No. 2 viz., her husband was examined as DW-2. On behalf of defendants, certified copies of the sale deeds executed in favour of second defendant were marked as Exs-D1 to D5. The caveat petition entered into by the first defendant was marked as Ex-C1. 6. Considering the above material, the trial court answered the above issues as under:- Issue Nos. 1 to 3 and 8 as affirmative. Issue Nos. 4 to 6 in the negative Additional Issue was answered in negative and consequently, the suit was decreed directing defendant Nos. 1 and 2 to execute regular sale deed in favour of plaintiffs after receiving balance consideration of Rs. 9,95,000/- within two months from the date of the said decree. 7. Defendant No. 1 has not preferred any appeal challenging the findings recorded in the impugned judgment. Defendant No. 2 has preferred this appeal contending that the findings recorded by the trial court insofar as additional issue is concerned, is not in accordance with the evidence produced before the trial court. 8. Learned counsel appearing for the appellant Sri. M. Vishwajith Rai contended that the material on record clearly indicates that appellant/defendant No. 2 had no prior knowledge of execution of the agreement between plaintiffs and defendant No. 1. She was a bonafide purchaser. The trial court has answered additional issue in the negative solely on the basis of comparison of the registered sale deed at Ex-P17 with Exs. D2-D5. This sale deed has no nexus whatsoever with the sale deeds obtained by the plaintiff at Exs-D2-D5. She was a bonafide purchaser. The trial court has answered additional issue in the negative solely on the basis of comparison of the registered sale deed at Ex-P17 with Exs. D2-D5. This sale deed has no nexus whatsoever with the sale deeds obtained by the plaintiff at Exs-D2-D5. Further, the evidence adduced by DW-2 clearly indicates that prior to registration and purchase of the said properties, the second defendant had taken all necessary precautions and on ascertaining the marketable title of the vendor and that no encumbrance was subsisting on the said property, she entered into the sale transaction. The circumstances brought out in the evidence indicate that the second defendant had acted in good faith and under the said circumstances, the finding recorded by the trial court on this issue being contrary to the material on record is liable to be set-aside. 9. Learned counsel appearing for plaintiffs/respondent Nos. 1 and 2 however argued in support of the impugned judgment contending that the circumstances discussed by the trial court clearly establish that the sale deeds obtained by defendant No. 2 were nominal sale deeds, which indicate that the appellant/defendant No. 2 was aware of the prior agreement of sale. Therefore, there is no ground to interfere with the impugned judgment. I have bestowed my careful thought to the submissions made at the Bar and have meticulously scrutinized the material on record. 10. The only issue that calls for my consideration is:- 'Whether the material on record establishes that the appellant/defendant No. 2 was a bonafide purchaser of the suit schedule property for valuable consideration? 11. It is proved in evidence that defendant No. 1 had entered into an agreement of sale with the plaintiffs as per Ex-P1. Under the said agreement, defendant No. 1 had agreed to sell the schedule property to the plaintiffs for a total consideration of Rs. 13.00 lakhs and had received Rs. 3,05,000/- which is acknowledged in the agreement. Further, he agreed to execute the sale deed within three months from the date of the agreement and undertook to convey marketable title to the satisfaction of the purchasers by producing all relevant documents such as legal scrutiny report from Advocate Sri. M.V. Shankar Bhat, Mangaluru, Release letter from the bank in which the schedule property was mortgaged, RTCs, death certificate of Narayana Shetty and his wife, survival certificate of Avanthi Shetty, Narayana Shetty etc., 12. M.V. Shankar Bhat, Mangaluru, Release letter from the bank in which the schedule property was mortgaged, RTCs, death certificate of Narayana Shetty and his wife, survival certificate of Avanthi Shetty, Narayana Shetty etc., 12. The above recitals make it evident that before executing the sale deed, defendant No. 1 was required to clear the encumbrance subsisting on the said properties and assure marketable title to the plaintiffs. It is not the case of defendant No. 1 that he had taken any steps in this regard and had obtained the legal scrutiny report from the concerned or had discharged the loan subsisting on the said properties within a period of three months, as agreed. On the other hand, it is established in evidence that before expiry of the aforesaid period, defendant No. 1 executed four sale deeds in favour of defendant No. 2. It is in this background, the contention urged by the appellant/defendant No. 2 is required to be considered. 13. Though appellant/defendant No. 2 contends that she was a bonafide purchaser without any notice of prior agreement entered between the plaintiffs and defendant No. 1, yet, the circumstances proved in evidence belie this contention. The facts proved in evidence indicate that as on the date of execution of the sale deeds in favour of second defendant, defendant No. 1 had no marketable title, in the sense that he was not in a position to convey marketable title to the second defendant and apparently for this reason, registration of the sale deeds were kept pending. This fact has been noted in the impugned judgment which has not been disputed by either of the parties. These circumstances, in my view, go against the contention of the appellant/defendant No. 2 that she was a bonafide purchaser. If the entire transaction was a clean transaction and she had ascertained the title of the property beforehand, she would not have agreed for keeping the registration pending. That apart, the consideration noted in Ex. D2 to D5 is another indication to show that the second defendant was also an equal party to the fraud played by defendant No. 1. As stated above, defendant No. 1 had agreed to sell the suit schedule property to the plaintiffs for a total consideration of Rs. That apart, the consideration noted in Ex. D2 to D5 is another indication to show that the second defendant was also an equal party to the fraud played by defendant No. 1. As stated above, defendant No. 1 had agreed to sell the suit schedule property to the plaintiffs for a total consideration of Rs. 13.00 lakhs and as per the terms of the agreement, the entire sale transaction was required to be completed within three months, which means that, if defendant No. 1 had performed his part of the contract within three months, a consideration of Rs. 13.00 lakh would have been received by him subject to his establishing marketable title to the schedule property. Under the said circumstances, it cannot be believed that defendant No. 1 would willingly sell the properties to Rs. 5,80,000/- to defendant No. 2 which is less than 50% of the consideration which he would have got if the sale was completed in all respects. This circumstance therefore go to show that with a view to defeat the suit agreement, he prevailed upon the second defendant to lend her name to the transaction and managed to register said property in her name, even though sale deed itself could not have been registered in accordance with Rules of registration. From these circumstances, it could be safely inferred that the second defendant was very much in the knowledge of the defect in the title. Under the said circumstances, the contention urged by the appellant/defendant No. 2 that she was a bonafide purchaser and was unaware of the agreement between defendant No. 1 and the plaintiffs cannot be accepted. 14. Another circumstance that weakens the defence set up by the appellant/defendant No. 2 is that, defendant No. 2 has kept herself out of the witness box and authorized her husband to depose on her behalf. The knowledge or lack of knowledge of the prior agreement is personal to the second defendant and the same could not have been deposed by her attorney. Her Attorney was not competent to depose the facts which were within her personal knowledge, eventhough he is related to her. Even otherwise, the circumstances discussed above, in my view, are sufficient to hold that the second defendant was merely a name lender to the bogus transaction and obtained sale deeds in her name only with a view to defeat the rights of the plaintiffs. Even otherwise, the circumstances discussed above, in my view, are sufficient to hold that the second defendant was merely a name lender to the bogus transaction and obtained sale deeds in her name only with a view to defeat the rights of the plaintiffs. 15. Viewed from another angle, if in fact the second defendant was an innocent purchaser as contended, no sooner she came to know the fraud played by defendant No. 1, she would have immediately proceeded against the first defendant for appropriate reliefs. There is nothing on record to show that even after coming to know of the alleged transaction, the second defendant has taken any action against the first defendant. On the other hand, the plaintiffs themselves have instituted criminal action against the second defendant, which indicates that the sale deeds obtained by the appellant/defendant No. 2 were shoddy and were intended to defeat the rights of the plaintiffs. The circumstances established in evidence lead to the inevitable conclusion that the entire transaction has taken place with the full knowledge of the second defendant. The trial court has considered each of these aspects in the impugned judgment in para 14 and 19 of the impugned judgment. The trial court has elaborately discussed the evidence of the plaintiffs as well as defendants. Even on reconsideration of the said material, I do not find any reason to differ with the view taken by the trial court. For the said reasons, I do not find any ground to interfere with the impugned judgment insofar as finding recorded by the trial court on additional issue No. 1. Consequently, the appeal fails and the same is dismissed.