Dinesh Chandra v. Santosh Kumar Alias Hari Prakash
2024-05-08
SARAL SRIVASTAVA
body2024
DigiLaw.ai
JUDGMENT : (Saral Srivastava, J.) : 1. Heard learned counsel for the appellant and the learned counsel for the respondents. 2. The plaintiff/appellant has preferred the present Second Appeal challenging the judgement and decree dated 12.02.1986 passed by the Additional Civil Judge, Shahjahanpur in Original Suit No.130 of 1984 and judgement and decree dated 03.04.2024 passed by the Additional District Judge, Court No.43, Shahjahanpur dismissing the appeal of the plaintiff/appellant. 3. Brief facts of the case are that the plaintiff instituted a suit for specific performance of contract with regard to three agreements to sell dated 24.08.1983, 14.12.1983 & 06.01.1984 in respect to the suit property described in the plaint against the respondent nos.1 & 2 (defendant nos. 1 & 2) and respondent nos. 3 to 7 (defendants no. 3 to 7). For convenience, the plaintiff/appellant is referred to as 'plaintiff' and respondents no.1 & 2 are referred to as 'defendant 1st set' and respondents no.3 to 7 are referred to as 'defendant 2nd set'. 4. The plaintiff instituted the suit on the ground that three agreements to sell dated 24.08.1983, 14.12.1983 & 06.01.1984 executed between him and defendant 1st set were duly registered in the office of Sub-Registrar, Shahjahanpur. The plaintiff pleaded that he was ready and willing to perform his part of the contract, but the defendant 1st set failed to perform their part of contract. It is further pleaded that the defendant 1st set illegally executed the sale deed dated 06.01.1984 in favour of the defendant 2nd set in respect to the suit property, which gave the plaintiff cause of action to institute the suit for the above relief. 5. The suit was contested by the defendant 1st set by filing a written statement denying the allegations made in the plaint. The defendant 2nd set also filed a written statement denying the averments in the plaint. The defendant 2nd set further pleaded that they are bonafide purchasers of the suit property for value and they had no knowledge about the execution of any agreement to sell, therefore, the suit for specific performance against them deserves to be dismissed. 6. The Trial Court framed as many as nine issues. However, the Trial Court on the issue of "whether the agreement to sell was validly executed" held that the three agreements to sell were duly executed by the defendant 1st set in favour of the plaintiff.
6. The Trial Court framed as many as nine issues. However, the Trial Court on the issue of "whether the agreement to sell was validly executed" held that the three agreements to sell were duly executed by the defendant 1st set in favour of the plaintiff. The Trial Court framed issue no.8 "whether the defendant 2nd set had any knowledge about the three agreements to sell and the defendant 2nd set are bonafide purchasers”. 7. The Trial Court in detail considered the testimony of PW1(Dinesh Chandra), PW2 (Puttu Lal) & PW3 (Rajendra Prasad) and recorded a finding that though PW1 had stated that the defendant 2nd set had knowledge about the agreement to sell, however, PW2 and PW3 stated that they don't know whether any information about agreements to sell was given to the defendant 2nd set. The Trial Court further considered the testimony of DW2 (Siya Ram) who categorically deposed that the defendant 2nd set did not know of the execution of the agreement to sell. The Trial Court further noted that no documentary evidence was filed on record which could establish that the defendant 2nd set had knowledge about the execution of agreements to sell between the plaintiff and defendant 1st set. 8. The Trial Court further noted the argument of the learned counsel for the defendant 2nd set and stated that since the sale deed was executed by the defendant 1st set in their favour within one month from the date of execution of the agreement to sell, and it takes about a month in making relevant entries in the registration office regarding the execution of any agreement to sell in respect of any property or creation of any charge over the property, and since no entry showing execution of any agreement to sell in respect of said property was recorded in the records of the Registrar Office as contemplated under law, therefore, the defendant 2nd set could not collect any document or information about the alleged agreement to sell from the Office of Registrar. 9. The Trial Court after noticing the above facts held that the defendant 2nd set are bonafide purchasers for value, and they had no knowledge about the execution of agreements to sell. Consequently, the Trial Court concluded that the relief of specific performance of contract cannot be granted in the facts of the present case.
9. The Trial Court after noticing the above facts held that the defendant 2nd set are bonafide purchasers for value, and they had no knowledge about the execution of agreements to sell. Consequently, the Trial Court concluded that the relief of specific performance of contract cannot be granted in the facts of the present case. After recording the above finding, the Trial Court denied the relief of the execution of the sale deed in pursuance of three agreements to sell. However, the Trial Court granted the relief of refund of earnest money paid by the plaintiff to the defendant 1st set under the agreements to sell. 10. The Trial Court further considered in detail the judgement of Original Suit No.429 of 1984 instituted by the defendant 2nd set against the defendant 1st set and the plaintiff, and also the fact that after the sale deed was executed in favour of the defendant 2nd set, the names of defendants 2nd set have been recorded in the rights of record. Consequently, it concluded that the defendant 1st set and plaintiff is not in possession of the suit property. 11. Feeling aggrieved by the judgement of the Trial Court, the plaintiff preferred Civil Appeal No.36 of 1986. The First Appellate Court affirmed the finding of the Trial Court on the issue that the agreements to sell executed between the plaintiff and defendant 1st set were valid. The First Appellate Court while considering the issue whether the defendant 2nd set are bonafide purchasers considered in detail the evidence on record and also the judgement of the Trial Court in Original Suit No.429 of 1984 instituted by the defendant 2nd set against the defendant 1st set and the plaintiff for mandatory injunction, which was decreed by the Trial Court, and has attained finality since it was neither assailed by the defendant 1st set nor by the plaintiff. 12. The First Appellate Court on appreciation of evidence on record found that the defendant 2nd set are bonafide purchasers for the value, and therefore, they are entitled to the benefit of Section 19 (b) of the Specific Relief Act. Consequently, it dismissed the appeal and affirmed the judgement of the Trial Court. 13.
12. The First Appellate Court on appreciation of evidence on record found that the defendant 2nd set are bonafide purchasers for the value, and therefore, they are entitled to the benefit of Section 19 (b) of the Specific Relief Act. Consequently, it dismissed the appeal and affirmed the judgement of the Trial Court. 13. Challenging the aforesaid judgment, learned counsel for the appellant has contended that the Subordinate Courts have erred in law in dismissing the suit inasmuch as once a finding has been recorded by the Subordinate Courts that the agreements to sell were validly executed, this implies that due notice of the agreement to sell is to everybody, and Subordinate Courts have failed to consider “Interpretation Clause” in Section 3 of the Transfer of Property Act, 1882 (hereinafter referred to as “Act, 1882”). The learned counsel for the appellant laid emphasis on “a person is said to have notice” in 'Interpretation Clause' to contend that in view of Explanation-I to the expression “a person is said to have notice”, it shall be deemed that after the registration of agreement to sell as per law, everyone has notice about execution of the agreement to sell and burden of proof was upon the defendant 2nd set to establish that they had no knowledge or information about the three agreements to sell. It is submitted that in the instant case, since the defendant 2nd set had failed to discharge their burden of proving that they had no knowledge or information about the agreement to sell, therefore, the Subordinate Courts have erred in law in dismissing the suit. In this respect, learned counsel for the appellant has placed reliance upon the judgement of the Apex Court in the case of Ram Niwas (Dead) through LRS. Vs. Bano (Smt.) and Others, (2000) 6 SCC 685 . 14. Per contra, learned counsel for the respondents would contend that defendant 2nd set are entitled to the benefit and protection of Section 19 (b) of the Specific Relief Act inasmuch as defendant 2nd set are bonafide purchasers for value.
Vs. Bano (Smt.) and Others, (2000) 6 SCC 685 . 14. Per contra, learned counsel for the respondents would contend that defendant 2nd set are entitled to the benefit and protection of Section 19 (b) of the Specific Relief Act inasmuch as defendant 2nd set are bonafide purchasers for value. It is submitted that the defendant 2nd set had proved by leading cogent evidence that they had no knowledge or information about the execution of the agreement to sell, and the Subordinate Courts have recorded categorical findings after appreciating the evidence on record that the defendant 2nd set had no knowledge about execution of the three agreements to sell, consequently, the Subordinate Courts returned a finding that the defendant 2nd set are bonafide purchasers having no knowledge or information about the execution of the three agreements to sell. It is contended that the finding returned by the Subordinate Courts on the aforesaid issue is a finding of fact. 15. It is further contended that the expression "a person is said to have notice" referred to in Section 3 of the Act, 1882 is not attracted in the instant case inasmuch as there is no pleading in the plaint that after execution of the agreement, the conditions enumerated in First Proviso to the Explanation-I to the expression "a person is said to have notice" had been complied with. Accordingly, he submits that the benefit of the expression "a person is said to have notice" in Section 3 of the Transfer of Property Act cannot be extended to the plaintiff. 16. He further placed reliance upon explanation II to the expression "a person is said to have notice" in Section 3 of the Act, 1882 and submits that in the instant case, it is proved on record that the plaintiff was not in possession over the suit property and defendant 2nd set are in possession of the suit property, and in such view of the fact, expression "a person is said to have notice" as quoted in Section 3 of the Act, 1882 is not attracted in the present case. Accordingly, he submits that the finding returned by both the Subordinate Courts are finding of fact and no substantial question of law arises in the present second appeal which calls for the invocation of the power of this Court under Section 100 of C.P.C. 17.
Accordingly, he submits that the finding returned by both the Subordinate Courts are finding of fact and no substantial question of law arises in the present second appeal which calls for the invocation of the power of this Court under Section 100 of C.P.C. 17. I have considered the rival submissions advanced by the learned counsel for the parties. 18. So far as the question whether the three agreements to sell were duly executed or not, there is no dispute about the fact that three agreements to sell in favour of the plaintiff were duly executed by the defendant 1st set given the finding returned by the Trial Court as well as Appellate Court in this regard. 19. The sole question which invites the attention of this Court is whether the defendant 2nd set are the bonafide purchasers for value without knowledge to entitle them to protection provided under Section 19 (1) (b) of the Specific Performance Act. The Trial Court in this respect considered the testimony of PW1, and also the testimony of PW2 and PW3 and found that though PW1 had stated that defendant 2nd set knew about the execution of agreements to sell, however, PW2 and PW3 had stated that they did not give any information about the three agreements to sell to the defendant 2nd set. 20. The Trial Court further noticed that DW2 (Siya Ram) had stated in his testimony that he did not know of the execution of agreements to sell. The Trial Court further considered the fact that the sale deed had been executed in favour of the defendant 2nd set within one month from the date of execution of the agreements to sell, and since necessary entries were not made in the Office of Registrar, therefore, defendant 2nd set could not obtain any information or relevant document from the Office of Registrar about the execution of the agreements to sell in respect of the suit property. Consequently, it held that the defendant 2nd set are bonafide purchasers of the suit property and are entitled to the protection provided under Section 19 (1) (b) of the Specific Relief Act. 21.
Consequently, it held that the defendant 2nd set are bonafide purchasers of the suit property and are entitled to the protection provided under Section 19 (1) (b) of the Specific Relief Act. 21. The Appellate Court also considered in detail the testimony of the witnesses led by the plaintiff as well as defendants and also the judgement of the Trial Court in Original Suit No.429 of 1984 instituted by the defendant 2nd set against the plaintiff and defendant 1st set for mandatory injunction, which was decreed by the Trial Court in favour of the defendant 2nd set and has attained finality since no appeal was preferred against the judgement and decree of the Trial Court in Original Suit No. 429 of 1984 either by the plaintiff or by the defendant 1st set. After appreciating the aforesaid facts and evidence on record, the Appellate Court found that the plaintiff was not in possession of the suit property. 22. The Appellate Court also considered the fact that after the execution of the sale deed in favour of the defendant 2nd set, their names have been mutated in the rights of record and they are in possession of the suit property. The first Appellate Court held that the appellant could not demonstrate that the finding of the Trial Court with respect to the possession was perverse or against the record. 23. Now, before proceeding as to “whether the plaintiff is entitled to the benefit of expression “a person is said to have notice” referred in interpretation clause (3) of the Act, 1882, it would be apt to reproduce the same:- "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 I.—Where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of Section 30 of the Indian Registration Act, 1908 (XVI of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated: Provided that— (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (XVI of 1908) and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act. Explanation II-Any person acquiring any immoveable 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. Explanation III.—A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material: Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud." 24. Reading of the said expression in the "Interpretation Clause" reveals that a person is supposed to have notice of a fact when he actually knows the fact or though he ought to have known this fact, but because of his wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he could not acquire the knowledge of such fact.
The said expression explains that in case a transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property subsequently is supposed to have notice of such instrument from the date of its registration. 25. Learned counsel for the appellant has laid emphasis upon the Explanation-I to submit that in the instant case, the transaction of agreements to sell has been effected by the registered document, and therefore, the defendant 2nd set who acquired the said property is supposed to have notice of the three agreements to sell from the date of its registration. 26. It is pertinent to note that Explanation-I is attracted only when the conditions stipulated in First Proviso to the Explanation-I are complied with, which are:- (1) the instrument has been registered and its registration has been completed in the manner prescribed by the Indian Registration Act, 1908 and the rules made thereunder; (2) the instrument or memorandum has been duly entered or filed, as the case may be in books kept under Section 51 of that Act and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act. 27. In the present case, the first condition enumerated in the proviso i.e. registration of agreement to sell has been completed in the manner provided by the Registration Act and the Rules framed thereunder are complied with. Condition nos.2 and 3 enumerated in First Proviso are not fulfilled in the instant case as is evident from the perusal of the plaint since the Plaint reveals that the pleading in the plaint is silent in respect to the compliance of condition nos. 2 and 3 enumerated in the First Proviso to Explanation-I. Fulfilment of the above three conditions is necessary to seek the benefit of Explanation-I to the expression "a person is said to have notice". In other words, to seek the benefit of the expression "a person is said to have a notice", the plaintiff has to establish that the above three conditions enumerated in the proviso to Explanation-I have been fully complied with. 28.
In other words, to seek the benefit of the expression "a person is said to have a notice", the plaintiff has to establish that the above three conditions enumerated in the proviso to Explanation-I have been fully complied with. 28. There is no pleading in the plaint that the instrument or memorandum had been duly entered and filed in the books kept under Section 51 of the Registration Act, and particulars of the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of the Registration Act. Unless three conditions enumerated in the First proviso to Explanation-I are complied with and established on record that after the due registration of the instrument, the entries have been made as contemplated under Sections 51 and 55 of the Registration Act, no benefit of the expression "a person is said to have notice" in the interpretation clause defined in Section 3 of the Act 1882, in the opinion of the Court, can be extended to a party that on registration of an instrument, a person is supposed to have notice about such fact. Thus, for the aforesaid reason, the submission of the counsel for the appellant regarding Explanation -I to the expression "a person is said to have notice" is devoid of merits and is rejected. 29. At this stage, it would also be apposite to consider Explanation-II to the expression "a person is said to have notice" which states that any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice or title, if any, of a person who is for the time being in actual possession. 30. At this stage, it would be appropriate to consider the judgment of the Apex Court in the case of Ram Niwas (Supra) relied upon by the learned counsel for the appellant. Relevant Paragraphs No. 7 to 9 of the said judgement are reproduced below: “7. Thus, it is seen that a statutory presumption of “notice” arises against any person who acquires any immovable property or any share or interest therein of the title, if any, of the person who is for the time being in actual possession thereof. 8. The principle of constructive notice of any title which a tenant in actual possession may have, was laid down by Lord Eldon in Daniels Vs.
8. The principle of constructive notice of any title which a tenant in actual possession may have, was laid down by Lord Eldon in Daniels Vs. Davison (Ves at P.254). The learned Law Lord observed: “Upon one point in this cause there is considerable authority for the opinion I hold; that, where there is a tenant in possession under a lease or an agreement, a person, purchasing part of the estate, must be bound to inquire, on what terms that person is in possession.” 9. That principle has been followed by various High Courts in India. (See : Faki Ibrahim vs. Faki Gulam Mohidin, AIR 1921 Bombay 459; Mahadeo vs. S.B.Kesarkar, AIR 1972 Bombay 100; Tiloke Chand Surana vs. J.B.Beattie & Co., AIR 1926 Calcutta 204; Parthasarathy Aiyer vs. M. Subbaraya Gramany, AIR 1924 Madras 67 and Mummidi Reddi Papannagiri Yella Reddi vs. Salla Subbi Reddi, AIR 1954 A.P. 20 ).” 31. Since to claim the benefit of Explanation-II, the plaintiff has to demonstrate that he is in possession of the suit property whereas in the present case, the Subordinate Courts have returned the finding based upon the appreciation of evidence on record that the plaintiff is not in possession over the suit property and the counsel for the appellant could not demonstrate that finding on the issue of possession by the Subordinate courts is perverse or against the record, therefore, the plaintiff cannot claim the benefit of Explanation-II. In such view of the fact, the judgement of the Apex Court in the case of Ram Niwas (Supra) is not applicable in the facts of the present case. 32. Since, the Subordinate Courts have returned the finding that the defendant 2nd set are the bonafide purchasers for the value without knowledge and are in possession of the suit property, and the finding in this respect are finding of fact based upon proper appreciation of fact on record, therefore, this Court is of the view that the judgement and decree passed by the courts below are based upon sound principles of law and do not call for any interference by this Court. 33. Since no substantial question of law arises in the present appeal, therefore, the appeal lacks merit and is, accordingly dismissed with no order as to costs.