Rakesh Sharma S/o Shri Om Pal v. Bhushan Lal S/o Shri Rulia Ram
2022-03-08
JYOTSNA REWAL DUA, MOHAMMAD RAFIQ
body2022
DigiLaw.ai
ORDER : 1. These matters have been laid before the Division Bench upon a reference made by a learned Single Judge of this Court vide his order, dated 26th December, 2017, for answering the following questions: (i) Could the learned Court below decree the suit despite the plaintiff having not specifically assailed the sale-deed and sought its cancellation? (ii) Whether the judgment of this Court in Rajinder Singh vs. Sushil Kumar and Others, 2006 (2) Shim. L.C. 326, having been impliedly overruled or whittled down by the subsequent judgment of the Hon'ble Supreme Court in B. Vijaya Bharathi vs. P. Savitri and Others, AIR 2017 SC 3934 , can be said to have laid down the correct law? 2. We have heard Mr. K.D. Sood, learned Senior Counsel, Mr. Arsh Rattan, Mr. Tara Singh Chauhan and Mr. Rishab Chandel, Advocates, appearing for the respective parties. 3. Facts of the case in brief are that the plaintiff (respondent No. 1) filed a suit for possession by way of specific performance of the agreement to sell, dated 19th December, 1997, executed in his favour by defendant No. 1 (appellant in RFA No. 276 of 2003), who agreed to sell his half share in the suit land to plaintiff (respondent No. 1) for a consideration of Rs. 2,50,000/-. A sum of Rs. 10,000/- was paid as an earnest money and rest of the amount was agreed to be paid at the time of execution of the sale-deed. The plaintiff averred that he was ready and willing to perform his part of obligation stipulated in the agreement and cooperate for the execution and registration of the sale-deed, but defendant No. 1 was not inclined to fulfill his part of the obligation and he, in fact, left Kangra for his village without executing the sale-deed. Not only this, defendant No. 1 in collusion with defendants No. 2 to 5 (appellants in RFA No. 272 of 2003 and proforma respondent No. 3), with an intention to defraud the plaintiff, executed the sale-deed dated 23rd December, 1997 in favour of minor defendants No. 2 and 3. 4. In the course of arguments before the learned Single Judge, the question arose as to whether in the absence of specific challenge to the aforementioned sale-deed dated 23rd December, 1997, the learned trial Court could have decreed the suit of the plaintiff.
4. In the course of arguments before the learned Single Judge, the question arose as to whether in the absence of specific challenge to the aforementioned sale-deed dated 23rd December, 1997, the learned trial Court could have decreed the suit of the plaintiff. Reliance was placed on the decision of the Supreme Court in B. Vijaya Bharathi's case (supra). 5. In B. Vijaya Bharathi's case (supra), an agreement to sell was entered into between plaintiffB. Vijaya Bharathi and defendant No. 1-P. Savitri. Defendant No. 1-P. Savitri, instead of executing the sale-deed in favour of the plaintiff, sold the property to defendant No. 2, who, in turn, sold the same to defendant No. 3, both by registered conveyances. The plaintiff served notice on defendant No. 1 expressing her readiness and willingness to perform her part of the obligation and pay the balance amount of sale consideration. Defendant No. 1 in reply thereto stated that the agreement was no longer valid. The plaintiff then filed a suit for specific performance. The trial Court decreed the suit with the finding that the agreement in favour of the plaintiff was prior in point of time to both the registered sale-deeds. Defendant No. 3 filed appeal before the High Court challenging the decree passed by the trial Court. The High Court set aside the decree of the trial Court holding that the plaintiff was not ready and willing throughout, as required in terms of Section 16(c) of the Specific Relief Act, 1963 and the suit was filed more than two years after the repudiation of the agreement. One of the arguments raised by the respondent before the Supreme Court was that despite the fact that it came to the plaintiff's knowledge that there were two registered conveyances prior to the filing of the suit, the plaintiff did not amend the suit to ask for a decree of cancellation of the sale-deeds. Apart from others, the Supreme Court upheld the said argument by holding that though aware of two conveyances of the property in question, the plaintiff did not ask for their cancellation. So, this would stand in the way of a decree of specific performance for unless the sale made by defendant No. 1 to defendant No. 2 and thereafter by defendant No. 2 to defendant No. 3 are set aside, no decree for specific performance could possibly follow.
So, this would stand in the way of a decree of specific performance for unless the sale made by defendant No. 1 to defendant No. 2 and thereafter by defendant No. 2 to defendant No. 3 are set aside, no decree for specific performance could possibly follow. The Supreme Court held that the High Court was right in finding that the bar of Section 16(c) of the Specific Relief Act, 1963 was squarely attracted on the facts of the case and therefore, the fact that defendants No. 2 and 3 may not be bona fide purchasers, would not come in the way of stating that such suit must be dismissed at the threshold because of lack of readiness and willingness, which is a basic condition for grant of specific performance. 6. In Rajinder Singh's case (supra), the decree for specific performance was passed against the defendant, who filed appeal before the District Judge. After setting aside the decree, the case was remanded back to the trial Court for fresh adjudication. The trial Court again decreed the suit and passed decree for specific performance of the contract against the defendant which was affirmed by the First Appellate Court. The argument before the High Court was that such decree could not have been passed because no prayer for cancellation of the sale-deed was made in the plaint. The High Court noted that the matter has been dealt with by the First Appellate Court. Section 19(a) and (b) of the Specific Relief Act, 1963, provides that the specific performance of a contract may be enforced against either party thereto or 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. The aforesaid provision is clear. The appellant, being a transferee subsequent to the making of the agreement by the defendant with the plaintiffs, the decree for specific performance was executable against him without even seeking the cancellation of the sale made in his favour by the defendant. In the facts of the case, the High Court recorded that since the appellant did not even file written statement, he cannot be heard to say that he is transferee for value and has paid the money in good faith without notice of the agreement to sell between the plaintiffs and defendant.
In the facts of the case, the High Court recorded that since the appellant did not even file written statement, he cannot be heard to say that he is transferee for value and has paid the money in good faith without notice of the agreement to sell between the plaintiffs and defendant. Moreover, the defendant, while appearing in the witness box, stated that at the time of execution of the sale-deed in favour of the appellant, he had shown to the appellant the agreement to sell executed by him in favour of the plaintiffs. Therefore, the sale of the disputed property by the appellant could not be said to have been made in good faith without notice of the agreement to sell between the plaintiffs and the defendant. 7. The judgment of the Supreme Court in B. Vijaya Bharathi's case (supra) turned on its own facts. In that case, the finding recorded by the High Court, which was upheld by the Supreme Court, was to the effect that the plaintiff did not make any endeavour to pay the balance sale consideration when defendant No. 1 appeared before the Registering Authority to execute the General Power of Attorney in favour of the husband of the plaintiff and resiled from execution of such General Power of Attorney in favour of the plaintiff and left the office of Sub Registrar without registering the same. Any prudent person, who obtained the registered agreement of sale by paying two-third of the sale consideration, will not keep quiet for a period of nearly one year and eleven months after the vendor repudiated the contract and refused to register the General Power of Attorney to complete the sale transaction, which clearly discloses the total inaction on the part of the plaintiff. Even after such refusal, the plaintiff did not issue any notice to defendant No. 1 to execute the sale-deed by offering balance sale consideration and expressing her readiness and willingness to complete the transaction. Thus, the plaintiff waived the right obtained under the agreement of sale and allowed defendant No. 1 to execute the sale-deed in favour of defendant No. 2. It was only thereafter the plaintiff got the legal notice issued to the defendants, which was suitably replied by them.
Thus, the plaintiff waived the right obtained under the agreement of sale and allowed defendant No. 1 to execute the sale-deed in favour of defendant No. 2. It was only thereafter the plaintiff got the legal notice issued to the defendants, which was suitably replied by them. The plaintiff nowhere stated therein about her readiness and willingness to perform her part of the contract all along from the date of the agreement till her deposition in the Court. The Supreme Court in Para-17 of the judgment held as follows: “17. It must also be noted that though aware of two conveyances of the same property, the plaintiff did not ask for their cancellation. This again, would stand in the way of a decree of specific performance for unless the sale made by Defendant No. 1 to Defendant No. 2 and thereafter by Defendant No. 2 to Defendant No. 3 are set aside, no decree for specific performance could possibly follow. While Mr. Rao may be right in stating that mere delay without more would not disentitle his client to the relief of specific performance, for the reasons stated above, we find that this is not such a case. The High Court was clearly right in finding that the bar of Section 16(c) was squarely attracted on the facts of the present case, and that therefore, the fact that Defendant Nos. 2 and 3 may not be bona fide purchasers would not come in the way of stating that such suit must be dismissed at the threshold because of lack of readiness and willingness, which is a basic condition for the grant of specific performance.” 8.
2 and 3 may not be bona fide purchasers would not come in the way of stating that such suit must be dismissed at the threshold because of lack of readiness and willingness, which is a basic condition for the grant of specific performance.” 8. The finding of the Supreme Court in Para-17 of the judgment in B. Vijaya Bharathi's case (supra) was based on the satisfaction that bar of Section 16(c) of the Specific Relief Act would be attracted because the plaintiff failed to prove that she has performed or has always been ready and willing to perform, her part of the contract, which were waived by her and it was, therefore, that the Supreme Court concluded that though aware of two conveyances of the same property, the plaintiff did not ask for their cancellation which would stand in the way of decree of specific performance, for unless the sale made by defendant No. 1 to defendant No. 2 and thereafter by defendant No. 2 to defendant No. 3 are set aside, no decree for specific performance could possibly follow. 9. This Court in Rajinder Singh's case (supra) was dealing with an appeal filed at the instance of the subsequent buyer, who did not even file written statement before the trial Court and therefore, the Court concluded that he cannot be heard to say that he was transferee for value and had paid the money in good faith without notice of the agreement to sell between the plaintiffs and defendant, which was prerequisite condition as per Section 19(b) of the Specific Relief Act, 1963, to maintain a suit, which provides that specific performance of a contract may be enforced against any 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. Not only this, the defendant/vendor in the witness box stated that at the time of execution of the sale-deed in favour of the appellant, he had shown to him (appellant) the agreement to sell executed by him in favour of the plaintiffs. The judgment in Rajinder Singh's case (supra) thus has been correctly decided on the facts of the case and the findings recorded therein are eminently just and proper. 10.
The judgment in Rajinder Singh's case (supra) thus has been correctly decided on the facts of the case and the findings recorded therein are eminently just and proper. 10. The view taken by this Court in Rajinder Singh's case (supra) finds support from the ratio of the judgment of the Supreme Court in Ram Awadh (dead) by LRs. and Others vs. Achhaibar Dubey and Another, AIR 2000 SC 860 , wherein, in Para 16 of the judgment, the Supreme Court held that the decree of specific performance may not be granted to a plaintiff who has failed to aver and prove his willingness and readiness to perform his part of the agreement. The plea that the plaintiff is not ready and willing to perform his part of the agreement is available to both vendor/defendant and subsequent purchasers and even to legal representatives of subsequent purchasers. It is open to any defendant to contend and establish that the mandatory requirement of Section 16(c) of the Specific Relief Act has not been complied with and it is for the Court to determine whether it has or has not been complied with and depending upon its conclusion, decree or decline to decree the suit. 11. In view of the above, we are inclined to hold that in a suit for specific performance of an agreement to sell, it is not always obligatory for the plaintiff to seek cancellation of the sale-deed executed in favour of the subsequent buyer, however, the plaintiff can join such buyer as codefendant with the original vendor provided that the agreement to sell in favour of the plaintiff was executed prior to the execution of sale-deed in favour of the subsequent buyer. The only exception to sub-section (b) of Section 19 of the Specific Relief Act, 1963 is that specific performance of the contract may be enforced against any person claiming under either party thereto by a title arising subsequently except a transferee for value who has paid his money in good faith and without the notice of the original contract. In that case, the plaintiff has to seek declaration of cancellation of such sale-deed.
In that case, the plaintiff has to seek declaration of cancellation of such sale-deed. If, however, converse is shown that transferee in paying the money lacked in the good faith and purchased the subject property despite knowledge of the original contract, there is no need for the plaintiff to seek cancellation of the sale-deed in favour of the subsequent buyer. Good faith, bona-fide purchase and not having notice of earlier contract, are all questions of facts, which have to be decided on facts of each case, on the basis of evidence adduced by the parties. 12. The earliest judgment on this subject is that of the Supreme Court in Durga Prasad and Another vs. Deep Chand and Others, AIR 1954 SC 75 , wherein it was held that where there is a sale of the same property in favour of a prior and subsequent transferee and the subsequent transferee has, under the conveyance outstanding in his favour, paid the purchase money to the vendor, then in a suit for specific performance brought by the prior transferee, in case he succeeds, the question arises as to the proper form of decree in such a case. This question was answered by their Lordships in Para 37 and 42 of the judgment as under: “37. The practice of the courts in India has not been uniform and three distinct lines of thought emerge. We are of course confining our attention to a purchaser's suit for specific performance. According to one point of view, the proper form of decree is to declare the subsequent purchase void as against the plaintiff and direct conveyance by the vendor alone. A second considers that both vendor and vendee should join, while a third would limit execution of the conveyance to the subsequent purchase alone. xxx xxx xxx 42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin vs. Samiraddin, AIR 1931 Cal. 67 and appears to be the English practice.
He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin vs. Samiraddin, AIR 1931 Cal. 67 and appears to be the English practice. See Fry on Specific Performance, 6th Edn. Page 90, paragraph 207; also Potter vs. Sanders, (1846) 67 ER 1057. We direct accordingly.” 13. The aforesaid judgment was followed by the Supreme Court in R.C. Chandiok and Another vs. Chuni Lal Sabharwal and Others, (1970) 3 SCC 140 , wherein it was held that in case where subsequent to the agreement to sell in favour of the plaintiff, the vendor has sold the property to a specific purchaser, the proper form of decree would be to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him in favour of the plaintiff. 14. In view of the above, it must be held that the judgment of this Court in Rajidner Singh's case (supra) has been correctly decided on its own facts whereas the judgment of the Supreme Court in B. Vijaya Bharathi's case (supra) turned out in the context of an altogether different fact situation. We are, therefore, inclined to hold that ratio of the judgment of this Court in Rajinder Singh's case (supra) cannot be taken to have been impliedly overruled or whittled down by the judgment of the Supreme Court in B. Vijaya Bharathi's case (supra) and therefore, the conclusion to that effect recorded by the learned Single Judge in the referral order that “it is unequivocally manifest that the ratio laid down in Rajinder Singh's case (supra) has been impliedly overruled or whittled down by the subsequent judgment of the Hon'ble Supreme Court in B. Vijaya Bharathi's case (supra) and therefore, the judgment can no longer be said to be laying down the correct law” cannot be supported in law. 15.
15. Viewed thus, the questions referred to this Court by the learned Single Judge are answered as follows: (i) Whether or not a suit for specific performance could be decreed in the absence of challenge to the sale-deed seeking its cancellation, would depend on the facts of the case especially upon satisfaction of the ingredients of Section 16(c) read with Section 19(b) of the Specific Relief Act, 1963. (ii) The judgment of this Court in Rajinder Singh's case (supra) cannot be held to have been impliedly overruled or whittled down by the subsequent judgment of the Supreme Court in B. Vijaya Bharathi's case (supra). 16. The questions referred are answered accordingly. Let the matters be listed before the appropriate Single Bench for further proceedings.