Kirpal Kaur vs Ritesh

Kirpal Kaur and another …Appellants

Versus

Ritesh and others …Respondents

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 11.09.2017 passed by the High Court of Punjab &

Haryana at Chandigarh in R.S.A. No. 2891 of 2010, by which the High

Court has dismissed the said second appeal and has confirmed the

judgment and decree passed by the first appellate Court, granting the

relief of specific performance of the agreement to sell dated 11.02.2004, Signature Not Verified Digitally signed by R Natarajan Date: 2022.03.22 17:36:57 IST Reason: the original defendants have preferred the present appeal.

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2. The facts leading to the present appeal in a nutshell are as under:

That one Gurmeet Singh, predecessor-in-interest of the

defendants (husband of defendant no.1 and father of defendant no.2 to

4) was the owner and in possession of land admeasuring 8 kanals

situated in village Nilokheri, District Karnal. That the said Gurmeet Singh

executed an agreement to sell dated 11.02.2004 in favour of one Jai

Parkash, predecessor-in-interest of the plaintiffs for a sale consideration

of Rupees Four Lakhs. That a sum of Rupees Three Lakhs and Fifty

Thousand was paid as an earnest money to the said Gurmeet Singh.

The target date for execution of the sale deed in favour of the vendee or

his assignee was fixed as 10.02.2005, on payment of balance sale

consideration. In the agreement, it was also stated that if the vendor

fails to perform his part of the agreement, then the vendee would be

entitled to double the earnest money or in the alternative, to get the sale

deed executed and registered through the Court.

2.1 According to the plaintiffs, during his life time, the vendee Jai

Parkash was willing to perform his part of the agreement and after his

death, the plaintiffs, as his legal representatives had to perform.

According to the plaintiffs, they approached the defendants to perform

their part of the agreement, in terms of agreement to sell dated

11.02.2004, however, the defendants kept on deferring the matter.

2 Therefore, the plaintiffs served a legal notice dated 14.01.2005 asking

the defendants to appear in the office of Sub Registrar, Nilokheri on

10.02.2005 for execution of the sale deed, which was the target date

fixed in the agreement. According to the plaintiffs, they reached the

office of Sub Registrar, Nilokheri on 10.02.2005 with the balance sale

consideration and the money required for purchase of stamp papers and

other expenses. However, the defendants did not turn up at the Sub

Registrar’s office. The plaintiffs got their presence marked by moving

an application before the Sub Registrar, Nilokheri, who made an

endorsement thereon and returned the application, along with the

affidavit of the plaintiffs, which were attested by Sub Registrar.

Thereafter the plaintiffs again served registered legal notice on

18.02.2005. In reply to the said notice, the defendants totally denied the

execution of the agreement to sell dated 11.02.2004 by Gurmeet Singh.

They also denied having received an amount of Rs.3,50,000/- mentioned

in the agreement to sell. Hence, the plaintiffs instituted the suit, being

Civil Suit No. 681 of 2005 in the Court of Additional Civil Judge (Senior

Division), Karnal for specific performance and for possession along with

consequential relief of permanent injunction.

2.2 The suit was resisted by the defendants by filing their written

statement. In the written statement, the original defendants denied

3 execution of the agreement to sell dated 11.02.2004. It was the case on

behalf of the defendants that Gurmeet Singh was an illiterate person,

addicted to vices and his thumb impressions were obtained on blank

papers by Jai Parkash, who was a cloth shop owner in Nilokheri. The

defendants also denied receipt of Rs.3.50,000/- by Gurmeet Singh from

the plaintiffs. Both the parties led their evidence.

2.3 On appreciation of the evidence on record and on hearing the

parties, the learned trial Court, though held that the agreement was

validly executed between Gurmeet Singh and Jai Parkash, for a sale

consideration and though held that Rs.3,50,000/- was indeed paid by Jai

Prakash to Gurmeet Singh, nevertheless denied the relief of specific

performance by observing that the agreement, Ex. P2, may have been

executed as a security document for repayment of a loan. Therefore,

instead of granting the relief of specific performance, the learned trial

Court passed a decree for return of earnest money along with interest at

the rate of 6% per annum by way of an alternative relief.

2.4 Feeling aggrieved and dissatisfied with the judgment and decree

passed by the learned trial Court, refusing to grant the relief of specific

performance, the original plaintiffs preferred an appeal before the first

appellate Court. The first appellate Court allowed the appeal and set

aside the judgment and decree passed by the learned trial Court

4 refusing to pass a decree for specific performance by categorically

observing that the agreement to sell dated 11.02.2004 cannot be said to

be a loan agreement and/or security document for repayment of a loan.

2.5 Feeling aggrieved and dissatisfied with the judgment and order

passed by the first appellate Court granting relief of specific performance

of the agreement to sell dated 11.02.2004, the appellants – defendants

preferred regular second appeal before the High Court. By the

impugned judgment and order, the High Court has dismissed the said

second appeal, which has given rise to the present appeal.

3. Shri Tarun Gupta, learned counsel appearing on behalf of the

appellants – original defendants has vehemently submitted that in the

facts and circumstances of the case, both, the first appellate Court as

well as the High Court have committed a grave error in holding that the

agreement to sell dated 11.02.2004 is not a security document/loan

agreement.

3.1 Shri Tarun Gupta, learned counsel for the appellants has taken us

to the agreement dated 11.02.2004. It is submitted that in the

agreement itself, it has been specifically mentioned that as there was a

marriage of the daughter of Gurmeet Singh, the amount was required

and therefore Rs. 3,50,000/- was taken as a loan towards the expenses

5 of his daughter’s marriage. It is submitted therefore that, as such,

agreement dated 11.02.2004 was a loan agreement/security document.

3.2 It is further submitted by learned counsel appearing on behalf of

the appellants – original defendants that against the sale consideration

of Rs. 4,00,000/- mentioned in the agreement, Rs. 3,50,000/- was

alleged to have been paid by Jai Parkash, vendee. It is submitted that

therefore when the substantial amount was alleged to have been paid

without any possession, the agreement be treated as a security

document/loan agreement.

3.3 It is further contended by learned counsel appearing on behalf of

the appellants – original defendants that though in the agreement, it was

stated that the possession is handed over to the vendee, the defendants

continued to be in possession and the possession was never handed

over to the vendee and/or his legal heirs. It is submitted that all the

aforesaid circumstances would go to show that the agreement dated

11.02.2004 was a loan agreement/security document.

3.4 It is urged by the learned counsel appearing on behalf of the

appellants – original defendants that the suit land is an agricultural land

and the only source of income of the defendants and their family

members and therefore considering Section 20 of the Specific Relief Act

and when the grant of specific performance is a discretionary relief, the

6 said discretion may be exercised in favour of the defendants. It is

submitted that the valuable property has been sought to be purchased

by the plaintiffs for a meagre sum of Rs. 4,00,000/- only.

3.5 Making the above submissions, it is prayed to allow the present

appeal and restore the judgment and decree passed by the learned trial

Court.

4. The present appeal is vehemently opposed by Shri Tathagat Harsh

Vardhan, learned counsel appearing on behalf of the original plaintiffs.

4.1 It is submitted that as such there are concurrent findings of facts

recorded by all the courts below on the execution of the agreement

executed by Gurmeet Singh in favour of Jai Parkash. It is submitted that

all the courts below have also believed the payment of sale

consideration by the vendee to the vendor. It is contended that the said

findings of facts recorded by all the courts below are not required to be

interfered with by this Court, in exercise of powers under Article 136 of

the Constitution of India.

4.2 It is further contended that, as such, it was never the case on

behalf of the defendants before the trial Court that agreement dated

11.02.2004 was a loan agreement/security document. It is submitted

that before the trial Court, the defendants totally denied the execution of

the agreement dated 11.02.2004 by Gurmeet Singh and receipt of

7 Rs.3,50,000/-. That for the first time before the first appellate Court, it

was the case on behalf of the defendants that agreement dated

11.02.2004 was a loan agreement/security document.

4.3 It is further submitted by learned counsel appearing on behalf of

the respondents – original plaintiffs that even the trial Court also held

that the agreement was validly executed between Gurmeet Singh and

Jai Parkash for a valuable consideration. However, the trial Court

refused to pass a decree for specific performance solely on the ground

that the agreement might have been executed as a security document

for repayment of a loan. Therefore, the trial Court, instead of granting

the relief of specific performance, passed a decree for return of earnest

money. It is contended that the defendants did not prefer any appeal

before the first appellate Court against the findings recorded by the trial

Court on the execution of the agreement dated 11.02.2004 between

Gurmeet Singh and Jai Parkash and on the payment of Rs. 3,50,000/-

paid by vendee to the vendor. That, in fact, the original plaintiffs

preferred the appeal before the first appellate Court against refusal of

the decree for specific performance.

4.4 It is urged that, both, the first appellate Court as well as the High

Court have rightly observed and held that agreement dated 11.02.2004

cannot be said to be a loan agreement and/or security document.

8 Therefore, the first appellate Court rightly passed a decree of specific

performance which is rightly confirmed by the High Court.

4.5 Making the above submissions, it is prayed to dismiss the present

appeal.

5. We have heard learned counsel for the respective parties at

length.

At the outset, it is required to be noted that as such there are

concurrent findings of facts recorded by all the courts below on the

execution of the agreement dated 11.02.2004 by Gurmeet Singh in

favour of Jai Parkash. There are concurrent findings of fact recorded by

all the courts below on the payment of part sale consideration of

Rs.3,50,000/- by the vendee to the vendor. The trial Court refused to

grant the relief of specific performance solely on the ground that the

agreement might have been executed as a security document for

repayment of loan. However, as observed hereinabove, even the trial

Court also specifically held that the agreement was validly executed

between Gurmeet Singh and Jai Parkash for a sale consideration. The

plaintiffs preferred the appeal before the first appellate Court against

refusal to pass a decree for specific performance. The defendants did

not prefer any appeal before the first appellate Court against the findings

recorded by the trial Court on execution of the agreement and on

9 payment of part sale consideration. Therefore, the findings recorded by

the trial Court that the agreement was validly executed for a sale

consideration has attained finality.

6. On a careful consideration of the agreement dated 11.02.2004, the

first appellate Court and the High Court have observed and held that the

agreement dated 11.02.2004 cannot be said to be a loan agreement

and/or security document, as alleged by the defendants. We have also

gone through and considered the agreement dated 11.02.2004. On

reading the entire agreement, it cannot be said that the agreement dated

11.02.2004 can be said to be a loan agreement and/or security

document. Merely because in the document the purpose of sale of the

property was stated to be for the marriage expenses, the document

which otherwise can be said to be an agreement to sell, will not become

a loan agreement and/or security document. If the agreement as a

whole is read, we find that it is an agreement to sell. Both, the first

appellate Court and the High Court have rightly not accepted the case

on behalf of the defendants that the agreement is a loan agreement

and/or security document. At this stage, it is required to be noted that as

such it was never the case on behalf of the defendants before the trial

Court that the agreement is a loan agreement and/or security document.

Before the trial Court, the defendants denied totally the very execution of

10 the agreement and receipt of Rs.3,50,000/-, which has been rightly

disbelieved even by the trial Court. It appears that before the first

appellate Court, for the first time, the defendants came out with a case

that the agreement is a loan agreement and/or security document.

7. Once the execution of the agreement to sell for a sale

consideration has been believed and it has been found that Jai Parkash

and thereafter, the original plaintiffs were always ready and willing to

perform their part under the agreement and in fact they remained

present before the Sub Registrar, Nilokheri on 10.02.2005, which has

been established and proved, the decree for specific performance is

rightly passed by the first appellate Court, which is rightly confirmed by

the High Court. In the facts and circumstances, clauses (a) & (c) of

Section 20 of the Specific Relief Act shall not be applicable and/or

attracted. We are in complete agreement with the view taken by the first

appellate Court and the High Court. However, at the same time to do

the complete justice between the parties and in exercise of powers

under Article 142 of the Constitution of India, we direct the original

plaintiffs to pay additional Rs.3,50,000/- to the appellants - original

defendants, over and above the balance sale consideration of

Rs.50,000/- (Rs.50,000/- to be paid with 6% interest from the date of

execution of the Agreement to Sell i.e., 11.02.2004 to actual payment).

11 It is further directed that on such payment the original defendants –

appellants herein shall execute the sale deed in favour of respondents

herein – original plaintiffs.

8. In view of the above and for the reasons stated above, the present

appeal fails and deserves to be dismissed and is accordingly dismissed.

No order as to costs.

………………………………..J. [M.R. SHAH]

NEW DELHI; ………………………………..j. MARCH 22, 2022. [B.V. NAGARATHNA]

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