P. Ramasubbamma vs V. Vijayalakshmi

P. Ramasubbamma ..Appellant (S)

Versus

V. Vijayalakshmi & Ors. ..Respondent (S)

JUDGMENT

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with impugned judgment

and order dated 20.07.2021 passed by the High Court of

Karnataka in Regular First Appeal No. 100200/2015, by

which the High Court has allowed the said appeal

preferred by respondent Nos. 3 and 4 herein – original

defendant Nos. 3 and 4 (hereinafter referred to as

defendant Nos. 3 and 4) and has set aside the judgment

and decree passed by the learned Trial Court granting Signature Not Verified Digitally signed by R Natarajan Date: 2022.04.11 decree for specific performance of agreement to sell dated 16:56:33 IST Reason: 1 12.04.2005, the appellant herein ­ original plaintiff has

preferred the present appeal.

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

under: ­

2.1 That the appellant herein – original plaintiff filed the suit

for specific performance of agreement to sell dated

12.04.2005. It was the case on behalf of the plaintiff that

she had entered into an agreement with respondent No. 1

herein ­ original defendant No. 1 to purchase the suit

schedule property for a sale consideration of Rs. 29 lakhs.

An advance amount of Rs. 20 lakhs was paid under the

said agreement. Defendant No. 1 had earlier executed a

general power of attorney in favour of respondent No. 2

herein ­ original defendant No. 2. However, defendant No.

2 was present when the plaintiff entered into an agreement

to sell with defendant No. 1. It was the case on behalf of

the plaintiff that thereafter, on 25.03.2008, defendant Nos.

1 and 2 approached the plaintiff and her husband and

sought payment of Rs. 6 lakhs. On 25.03.2008, the

plaintiff made further payment of Rs. 6 lakhs towards sale

2 consideration and an endorsement was made by defendant

No. 1 on the agreement, acknowledging the receipt of Rs. 6

lakhs. According to the plaintiff, thereafter, despite

repeated requests and demands, defendant No. 1 did not

execute the sale deed in favour of the plaintiff. They learnt

that defendant No. 2 by misusing the power of attorney

executed by defendant No. 1 in favour of defendant No. 2,

clandestinely executed two sale deeds in favour of

defendant Nos. 3 and 4 only to defraud the plaintiff. The

plaintiff got served a legal notice to the defendants on

17.06.2010 calling upon defendant No. 1 to execute the

sale deed in her favour by receiving balance sale

consideration of Rs. 3 lakhs. Further, thereafter defendant

No. 1 did not execute the sale deed, the plaintiff filed the

present suit for specific performance of the

contract/agreement to sell dated 12.04.2005.

2.2 That original defendant No. 1 filed written statement and

admitted the execution of agreement to sell and specifically

stated that she is ready and willing to perform her part of

contract. However, defendant Nos. 2 to 4 filed separate

3 written statements and took a common defence that

agreement to sell dated 12.04.2005 is a created document.

It was contended that power of attorney executed by

defendant No. 1 in favour of defendant No. 2 is a registered

document and without cancelling the registered power of

attorney and without the knowledge of defendant No. 2,

defendant No. 1 in collusion with the plaintiff had created

the agreement to sell. It was also contended by defendant

Nos. 2 to 4 that agreement to sell dated 12.04.2005 is a

bogus document and no sale consideration is paid by the

plaintiff.

2.3 The learned Trial Court framed the following issues: ­

“i) Whether the plaintiff proves that on 12.4.2005 defendant No. 1 has executed an agreement of sale agreeing to sell the suit property for a total consideration of Rs. 29 lakhs?

ii) Whether the plaintiff proves that part sale consideration of Rs. 26 lakhs has been paid to the defendant No. 1?

iii) Whether the plaintiff proves that she was always ready and willing to perform her part of duty towards the contract?

iv) Whether the plaintiff further proves that with malafide intention and to defeat her right accrued through the sale agreement dated 12.4.2005 defendant No. 2 had executed sale deeds dated 3.5.2010 in favour of defendant No.

4 3 and 4 and those sale deeds are nominal sale deeds?

v) Whether the defendant No. 2 to 4 prove that sale agreement dated 12.4.2005 is a created document and by virtue of the same no consideration had been passed?

vi) Whether the plaintiff is entitled for a decree of specific performance of contract?

vii) What order or decree?” 2.4 On behalf of the plaintiff, her husband was examined as

PW1 and two more witnesses were examined on behalf of

the plaintiff. The plaintiff produced nine documents as

documentary evidence as exhibit P1 to P9. Defendant No.

1 was examined as DW1 and defendant No. 2 was

examined as DW 2.

2.5 On appreciation of evidence on record, the learned Trial

Court decreed the suit and passed a decree of specific

performance. The learned Trial Court found that

defendant No. 1 being the absolute owner of the suit

schedule property has admitted the execution of

agreement to sell in favour of the plaintiff and has also

admitted receipt of substantial amount as part of the sale

consideration. The learned Trial Court also proceeded to

hold that the sale deed executed by defendant No. 2 in

5 favour of defendant Nos. 3 and 4 are not binding on

defendant No. 1 as well as the plaintiff and therefore, the

plaintiff was entitled to the relief of specific performance

of contract and to get the vacant possession of the suit

schedule property.

2.6 Feeling aggrieved and dissatisfied with the judgment and

decree passed by the learned Trial Court, the original

defendant Nos. 3 and 4 only preferred an appeal before

the High Court. By the impugned judgment and order,

the High Court has allowed the said appeal and has

quashed and set aside the decree passed by the learned

Trial Court mainly relying upon and considering Section

20 of the Specific Relief Act. The High Court has also

observed that as there was no prayer or a particular relief

to declare that the sale deed in favour of defendant Nos. 3

and 4 is null and void and not binding on the plaintiff

and defendant No. 1, such a relief could not have been

granted by the learned Trial Court.

6 2.7 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court, the

plaintiff preferred the present appeal.

3. Shri S.N. Bhat, learned Senior Advocate appearing on

behalf of the original plaintiff has vehemently submitted

that in the facts and circumstances of the case, the High

Court has committed a grave error in quashing and

setting aside the decree passed by the learned Trial Court

for specific performance of agreement to sell dated

12.04.2005.

3.1 It is further submitted that when the original defendant

No. 1 – original owner admitted the execution of the

agreement and even admitted the payment of substantial

amount under the agreement, the learned Trial Court

rightly passed the decree of the specific performance of

the said agreement.

3.2 It is further submitted that even the High Court ought to

have appreciated that apart from the fact that original

defendant No. 1 admitted the execution of the agreement

7 and receipt of payment of substantial advance amount,

original defendant Nos. 3 and 4 did not even enter into

the witness box. It is further submitted that the High

Court has not properly appreciated and considered the

fact that the original of power of attorney dated

28.01.1997 executed by defendant No. 1 in favour of

defendant No. 2, was handed over to the plaintiff at the

time of execution of agreement to sell, which was

produced by the plaintiff in the present suit as exhibit P6.

3.3 It is further submitted that the High Court has also erred

in holding that it was necessary for the plaintiff to seek

cancellation of sale deeds dated 03.05.2010 executed by

defendant No. 2 in favour of defendant Nos. 3 and 4,

respectively. It is submitted that in a suit for specific

performance it is not necessary for the agreement holder

to seek cancellation of sale deed executed in favour of a

subsequent purchaser and it is sufficient to implead the

subsequent purchaser in the suit and seek relief of

specific performance against original owner and also seek

direction to the subsequent purchaser to join in the

8 execution of the sale deed in order to completely convey

title to the agreement holder. Reliance is placed upon the

decisions of this Court in the cases of Lala Durga Parsad

and Anr. Vs. Lala Deep Chand and Ors., 1954 SCR

360: AIR 1954 SC 75, Soni Lalji Jetha & Ors. Vs. Soni

Kalidas Devchand & Ors., (1967) 1 SCR 873: AIR 1967

SC 978, R.C. Chandiok & Anr. Vs. Chuni Lal

Sabharwal & Ors. (1970) 3 SCC 140: AIR 1971 SC

1238, Dwarka Prasad Singh & Ors. Vs. Harikant

Prasad Singh & Ors., (1973) 1 SCC 179 and

Rathnavathi & Anr. Vs. Kavitha Ganashamdas, (2015)

5 SCC 223.

3.4 It is further submitted that the High Court has also not

properly appreciated the fact that the transactions

between defendant No.2 and defendant Nos. 3 to 4 were

sham transactions, which were by defendant No. 2 in

favour of his own sisters­in­law. It is submitted that even

the sale consideration in the transaction between

defendant No. 2 and defendant Nos. 3 to 4 was alleged to

9 have been paid by cash and that too, a huge sum of Rs.

26 lakhs was alleged to have been paid by cash. It is

submitted that in any case defendant Nos. 3 and 4 never

stepped into the witness box.

3.5 It is submitted that therefore when the sale deed

executed in favour of defendant Nos. 3 and 4 by

defendant No. 2 was sham in order to defeat the right of

the plaintiff pursuant to agreement to sell dated

12.04.2005 and the same was executed after the

agreement to sell in favour of the plaintiff and the plaintiff

had paid a substantial advance amount, the High Court

has erred in applying Section 20 of the Specific Relief Act.

3.6 Making the above submissions and also relying upon the

decisions of this Court in the case of Vasantha

Viswanathan Vs. V.K. Elayalwar, (2001) 8 SCC 133

(para 13) and in the case of Rathnavathi (supra), it is

prayed to allow the present appeal and quash and set

aside the impugned judgment and order passed by the

10 High Court and consequently to restore the decree passed

by the learned Trial Court.

4. Though served nobody has entered appearance on behalf

of defendant Nos. 2 to 4. Even respondent No. 3 –

defendant No. 3 is served by substituted service, namely,

by way of publication in two daily newspapers. In that

view of the matter, this Court has no other alternative

but to proceed further with the appeal ex­parte.

5. We have gone through the judgment and decree and the

findings recorded by the learned Trial Court as well as

the judgment and order passed by the High Court.

5.1 The learned Trial Court framed the following issues: ­

“i) Whether the plaintiff proves that on 12.4.2005 defendant No. 1 has executed an agreement of sale agreeing to sell the suit property for a total consideration of Rs. 29 lakhs?

ii) Whether the plaintiff proves that part sale consideration of Rs. 26 lakhs has been paid to the defendant No. 1?

iii) Whether the plaintiff proves that she was always ready and willing to perform her part of duty towards the contract?

iv) Whether the plaintiff further proves that with malafide intention and to defeat her right accrued through the sale agreement dated 12.4.2005 defendant No. 2 had executed sale

11 deeds dated 3.5.2010 in favour of defendant No. 3 and 4 and those sale deeds are nominal sale deeds?

v) Whether the defendant No. 2 to 4 prove that sale agreement dated 12.4.2005 is a created document and by virtue of the same no consideration had been passed?

vi) Whether the plaintiff is entitled for a decree of specific performance of contract?

vii) What order or decree?”

5.2 Considering the fact that original defendant No. 1 –

vendor – original owner admitted the execution of

agreement to sell dated 12.04.2005 and even admitted

the receipt of substantial advance sale consideration, the

learned Trial Court decreed the suit for specific

performance of agreement to sell dated 12.04.2005.

Once the execution of agreement to sell and the

payment/receipt of advance substantial sale

consideration was admitted by the vendor, thereafter

nothing further was required to be proved by the plaintiff

– vendee. Therefore, as such the learned Trial Court

rightly decreed the suit for specific performance of

agreement to sell. The High Court, was not required to go

into the aspect of the execution of the agreement to sell

12 and the payment/receipt of substantial advance sale

consideration, once the vendor had specifically admitted

the execution of the agreement to sell and receipt of the

advance sale consideration; thereafter no further

evidence and/or proof was required.

5.3 Now, so far as the sale deeds executed by original

defendant No. 2 in favour of defendant Nos. 3 and 4 and

the decree passed by the learned Trial Court that the

sale deeds executed by original defendant No. 2 in favour

of defendant Nos. 3 and 4 are not binding on defendant

No. 1 as well as on the plaintiff is concerned, at the

outset, it is required to be noted that issue Nos. 4 and 5,

reproduced hereinabove, were in respect of the sale

deeds executed by original defendant No. 2 in favour of

defendant Nos. 3 and 4 dated 03.05.2010. Therefore,

specific issues were framed on sale deeds dated

03.05.2010 executed by original defendant No. 2 in

favour of defendant Nos. 3 and 4. In that view of the

matter, the High Court has erred in setting aside the

decree passed by the learned Trial Court by observing

13 that as there was no specific relief/prayer of cancellation

of sale deeds dated 03.05.2010 executed by original

defendant No. 2 in favour of defendant Nos. 3 and 4,

therefore, the learned Trial Court could not have passed

the decree that the said sale deeds are not binding on

defendant No. 1 and the plaintiff. The High Court has

not noted the specific issue Nos. 4 and 5 framed by the

learned Trial Court, which were with respect to sale

deeds dated 03.05.2010. Therefore, as such, there was a

lis between the parties in respect to sale deeds dated

03.05.2005 executed by original defendant No. 2 in

favour of defendant Nos. 3 and 4 and even specific

issues were framed, which on appreciation of evidence

were held against defendant Nos. 2 to 4. Therefore, the

High Court is not justified in quashing and setting aside

the judgment and decree passed by the learned Trial

Court declaring that sale deeds dated 03.05.2010 are not

binding on defendant No. 1 and the plaintiff.

5.4 It is also required to be noted that on appreciation of

evidence, the learned Trial Court has specifically given

14 the finding that the alleged sale consideration paid by

defendant Nos. 3 and 4 to original defendant No. 2 for

executing sale deeds dated 03.05.2010 have not been

established and proved by defendant Nos. 2 to 4.

Therefore, there was a specific finding given by the

learned Trial Court on appreciation of evidence that sale

deeds dated 03.05.2010 were nominal sale deeds. The

High Court has brushed aside the same on the ground

that even in agreement to sell dated 12.04.2005, the

amount was alleged to have been paid by cash. However,

it is required to be noted that so far as receipt of

substantial advance sale consideration mentioned in the

agreement to sell dated 12.04.2005 has been specifically

admitted by defendant No. 1. Therefore, when it was

specifically alleged that defendant No. 2 executed sale

deeds in favour of defendant Nos. 3 and 4, who are his

sisters­in­law, with a view to defeat the rights of the

plaintiff and defendant No. 1 and when it was alleged

that they were nominal sale deeds, thereafter, defendant

No. 2 was required to prove the receipt of sale

consideration mentioned in the sale deeds dated

15 03.05.2010, which defendant Nos. 2 to 4 have failed to

do so.

5.5 It is also required to be noted that on appreciation of

evidence, learned Trial Court has specifically found that

the stamp papers of agreement to sell dated 12.04.2005

was purchased in the name of defendant No. 2 and

therefore defendant No. 2 was aware and in the

knowledge of agreement to sell dated 12.04.2005. It is

also required to be noted that even defendants did not

reply to the legal notice served by the plaintiff, which

was issued before filing the suit.

5.6 In light of the aforesaid factual aspects and the findings

recorded by the learned Trial Court, the decision of this

Court in the case of Lala Durga Prasad & Ors. (supra) is

required to be referred to. In paragraph 42, it is observed

and held as under: ­

“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

16 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 v. Samiraddin [AIR 1931 Cal 67] and appears to be the English practice. See Fry on Specific Performance, 6th Edn., p. 90, para 207; also Potter v. Sanders [67 ER 1057]. We direct accordingly.”

The aforesaid decision has been subsequently

referred to and followed by this Court in the subsequent

decision in the case of Rathnavathi & Anr. (supra).

5.7 From the impugned judgment and order passed by the

High Court, it appears that the High Court has heavily

relied upon Section 34 of the Specific Relief Act.

However, considering the fact that specific issues were

framed with respect to sale deeds dated 03.05.2010

executed by original defendant No. 2 in favour of

defendant Nos. 3 and 4 and the parties led the evidence

also on the aforesaid issues and thereafter, when the

learned Trial Court had given findings on the said issues

and thereafter, had granted the declaration that the sale

deeds executed by original defendant No. 2 in favour of

defendant Nos. 3 and 4 are not binding on defendant No.

17 1 and the plaintiff and those sale deeds are nominal sale

deeds and that defendant Nos. 2 to 4 have failed to prove

that agreement to sell dated 12.04.2005 is a created

document and by virtue of the same no consideration

has been paid, Section 34 of the Specific Relief Act, upon

which the reliance has been placed by the High Court

will have no application.

5.8 The High Court has set aside the judgment and decree

passed by the learned Trial Court on the ground that the

relief under Section 20 of the Specific Relief Act, is a

discretionary relief and therefore, in view of the fact that

original defendant No. 2 had executed sale deeds in

favour of defendant Nos. 3 and 4, the learned Trial Court

ought not to have exercised discretion in favour of the

plaintiff for passing the decree for specific performance.

However, in the facts and circumstances of the case

narrated hereinabove and when the learned Trial Court

specifically gave the findings that defendant No. 1 –

vendor specifically admitted the execution of agreement

to sell dated 12.04.2005 in favour of the plaintiff by

18 accepting a substantial advance consideration and that

defendant No. 2 was in the knowledge of the agreement

to sell and despite the same, he sold the same in favour

of defendant Nos. 3 and 4, who are his sisters­in­law and

that too the sale deeds found to be nominal sale deeds,

the learned Trial Court as such rightly decreed the suit

for specific performance and also rightly declared that

sale deeds dated 03.05.2010 executed by original

defendant No. 2 in favour of defendants No. 3 and 4 are

not binding upon the plaintiff and defendant No. 1. The

High Court has committed a grave error in reversing the

judgment and decree passed by the learned Trial Court

by ignoring the vital facts of the case which are either

admitted or proved in the instant case.

6. In view of the above and for the reasons stated above,

the present appeal succeeds. The impugned judgment

and order passed by the High Court is hereby quashed

and set aside and the judgment and decree passed by

the learned Trial Court is restored. In the facts and

19 circumstances of the case, there shall be no order as to

costs.

…………………………………J. (M. R. SHAH)

…………………………………J. (B.V. NAGARATHNA) New Delhi, April, 11 2022.

20