S. Abdul Khader vs Abdul Wajid (D) By Lrs. & Ors

the respondent to execute a sale deed in his 2

favour and to deliver vacant possession of

the suit land.

2. The case made out by the petitioner is that

in view of the Agreement for Sale dated 21st

February, 1995, executed by the respondent

No.1 in his favour for a total consideration

of Rs.4,30,000/-, he paid Rs.1,00,000/- in

cash to the respondent No.1 as an advance

towards the sale price when the said

agreement was executed. Thereafter, several

amounts were paid by the plaintiff to the

respondent No.1 amounting to Rs.2,05,000/- in

total. It was also mentioned in the plaint

that the respondent No.1 had projected

himself to be the owner of the suit property,

being site No.18, in Survey No.51/3A situated

at Byrasandra 35th Division of Bangalore,

having purchased the same from one Prasanth

M. Kumar, who is now the respondent No.2 in

the present Special Leave Petition. The 3

respondent No.1 assured the plaintiff that

the suit property was free from all

encumbrances and that the original sale deed

executed by the respondent No.2 was with the

Deputy Commissioner on account of under

valuation. The respondent No.1 also assured

the plaintiff that he would produce the

original sale deed at the time of

registration, together with the records from

the Corporation after assessment to register

the property, since registration could not be

done without the said records.

3. According to the plaintiff, he believed and

trusted the respondent No.1 and waited till

the end of October 1995, by which date the

respondent No.1 had assured the plaintiff

that he would complete the sale transaction.

The respondent No.1, however, did not make

any effort to complete the sale transaction 4

inspite of repeated requests made to him by

the petitioner to that effect, though the

petitioner was always ready and willing to

perform his part of the contract regarding

payment of the balance of the sale price

after deduction of the amount already

advanced by him.

4. It is also the plaintiff's case that only

when he found that a compound wall was being

constructed that he became suspicious of the

motive of the respondent No.1 who, however,

continued to assure him that the compound

wall was being constructed only for the

purpose of payment of tax and issuance of

katha endorsement. The respondent No.1 once

again assured the petitioner that he would

complete the sale as soon as he was able to

get the relevant record from the Corporation

and the original sale deed executed in his 5

favour from the Deputy Commissioner for Under

Valuation.

5. However, the petitioner was surprised when he

was served with a legal notice dated 17th

November, 1995, indicating that the respondent

No.1 had cancelled the Agreement for Sale which

had been executed in his favour on 21st

February, 1995. The petitioner, thereupon

filed the suit for specific performance of the

contract and for delivery of possession of the

suit land to him, which was disposed of by

granting the alternate relief of reimbursement

of the monies advanced, together with interest

at the rate of 9% per annum. The Trial Court,

however, declined to order the execution of the

said agreement in respect of the property on

the ground that third party rights had

intervened, as the respondent No.3 purchased

the suit property without knowledge or notice 6

of the prior sale agreement and was thus a bona

fide purchaser for value without notice and was

not affected by the provisions of Section 52 of

the Transfer of Property Act, 1882, and the

doctrine of lis pendens.

6. The matter was carried to the High Court by way

of RSA No.781 of 2004, wherein the submissions

advanced before the Trial Court were

reiterated. Agreeing with the findings of the

Trial Court, the High Court came to the finding

that the Agreement for Sale between the

respondent No.1 and the petitioner was not

binding on the respondent No.3 since the

respondent No.1 had no marketable title to the

suit property for the sale thereof in favour of

the petitioner. The agreements entered into on

21st February, 1995 and on 18th May, 1995, could

not be enforced as he was not the owner of the

property and was not empowered to execute any 7

Agreement for Sale in respect thereof and the

petitioner had not also sought the relief for

specific performance against the other

respondents. The High Court also held that the

Trial Court had rightly found that the

petitioner had allegedly made payment in favour

of the Respondent No.1 without making any

enquiry or verifying the records, and that he

had done so at his own risk, as the said

respondent had no authority to execute the sale

agreement dated 18th May, 1995.

7. The High Court held further that the Respondent

No. 3 had prior to purchase of the said

property made enquiries and ascertained that

one Rafi Ahmed the lawful Power of Attorney

holder of the 2nd respondent possessed the legal

competence to sell the suit property in her

favour. The High Court endorsed the view of

the Trial Court that the respondent No.3 was a 8

bona fide purchaser for value without notice

after due enquiries made by her.

8.On the basis of the above, the High Court held

that the Trial Court had rightly granted the

alternative relief of repayment of the sums

advanced while denying the substantial relief

for execution and registration of a sale deed

in respect of the suit land in favour of the

respondent. The High Court, however, was not

unmindful of the steep rise in the price of

immovable properties in urban areas, and,

accordingly, enhanced the rate of interest from

9% granted by the Trial Court to 18% upon the

amount decreed in favour of the petitioner.

The appeal was partly allowed to the above

extent.

9.The said judgment and order of the High Court

has been challenged in these proceedings. 9

10. On behalf of the petitioner, it has been

contended that the transaction between the

respondent No.2 and the respondent No.3 was hit

by Section 52 of the Transfer of Property Act,

1882, and the doctrine of lis pendens. It was

urged that both the Trial Court as well as the

High Court had erred in law in disallowing the

petitioner's prayer for a direction upon the

respondent No.1 to execute the sale deed in

respect of the suit land and to make over

possession thereof to the petitioner. It was

also contended that both the courts below

appear to have also lost sight of the

provisions of Section 19(b) of the Specific

Relief Act, 1963 which provides as follows:-

"19. Relief against parties and persons claiming under them by subsequent title. - Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against-

(a) either party thereto;

10 (b) 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;

(c) ....................

(d) ....................

(e) ....................."

11. In this regard Ms. Kiran Suri, learned

advocate, who appeared for the petitioner,

firstly referred to the decision of this Court

in Nivarti Govind Ingale and Ors. Vs.

Revanagouda Bhimanagouda Patil, [1997 (1) SCC

475], wherein this Court had expressed the view

that when the father of the respondent had

obtained the sale deed in the name of the

minor, he was also bound by the agreement of

reconveyance. Having received the money, he

had not executed the sale deed. Necessarily,

the plaintiff was entitled to seek specific

performance and any subsequent sale would be 11

barred by the doctrine of lis pendens.

Therefore, the subsequent purchaser was bound

by the decree of specific performance and was

liable to reconvey the property to the

plaintiff.

12.Ms. Suri also referred to the decision of this

Court in Hardev Singh vs. Gurmail Singh (dead)

by LRs., [2007 (2) SCC 404], wherein this Court

dealt with the scope of Sections 41, 43 and 52

of the Transfer of Property Act, 1882. On

examining the said provisions, this Court held

that the requirement of Section 41 and the

proviso thereto was not a requirement for the

applicability of Section 43 and hence even if a

subsequent purchaser was aware of the pending

litigation at the time of purchase of the suit

property, it would disentitle him to the

benefit of Section 43. It was further held

that Section 52 did not operate to render a 12

sale deed executed during the pendency of the

suit void, as the said transaction was not hit

either by Section 52 of the Transfer of

Property Act or Section 23 of the Contract Act,

1872.

13.In effect, the case made out on behalf of the

petitioner is that the subsequent purchaser

steps into the shoes of the judgment-debtor and

is thus bound by any decree passed against the

judgment-debtor.

14. The petitioner also appears to have relied on

an affidavit affirmed by the respondent No.1,

Abdul Wajid, since deceased, which has been

referred to as a "consent agreement" which

indicates that the General Power of Attorney

earlier notarized in favour of the respondent

No.1 on 3rd April, 1995, stood cancelled with

consent and a fresh agreement had been entered 13

into by the respondent No.2 in favour of Rafi

Ahmed who, in his capacity as the holder of the

second Power of Attorney executed by the

respondent No.2 in his favour on 18th June,

1995, had sold the suit property in favour of

the petitioner. It was also the case of the

petitioner that since the aforesaid document

had been disclosed for the first time in the

written statement filed by the respondent No.3,

Sufia Bi, on 28th October, 2003, the same did

not inspire confidence and the courts below

erred in dismissing the plaintiff's claim for

specific performance of the agreement on the

erroneous finding that the petitioner was not

ready and willing to conclude the sale.

15.Ms. Suri submitted that the findings of both

the trial court and the High Court regarding

the petitioner's readiness and willingness to

conclude the sale was contrary to the evidence 14

adduced and was, therefore, liable to be set

aside and the suit was liable to be decreed for

specific performance in respect of suit land.

16. On the other hand, Mr. S.N. Bhat, learned

advocate, submitted that the submissions

advanced on behalf of the petitioner was

without any foundation since the very basis of

the petitioner's suit, namely, the Agreement

for Sale executed in his favour by the

respondent No. 1 on 21st February, 1995, was

invalid since on that date the respondent No.1

had no power or authority to execute the said

Agreement in respect of the suit property. Mr.

Bhat submitted that the Power of Attorney,

which had been executed by respondent No.2 in

favour of the respondent No.1 on 3rd April,

1995, was revoked and hence the Agreement for

Sale executed in favour of the petitioner by

the respondent No.1 on 18th May, 1995 was

without any legal authority. Mr. Bhat 15

submitted that after revocation of the said

Power of Attorney in favour of the respondent

No.1, the respondent No.2 gave another General

Power of Attorney to Rafi Ahmed on 9th June,

1995 on the basis whereof the said Rafi Ahmed

executed the sale deed in favour of the

respondent No.3, who claimed that he came to

know about the Agreement for Sale which is

purported to have been executed by the

respondent No.1 in favour of the petitioner on

18th May, 1995.

17. Mr. Bhat urged that on both counts the

petitioner's suit had been rightly dismissed.

Firstly, that the respondent No.1 was neither

the owner nor the person authorized to enter

into an Agreement for Sale with the petitioner

on 21st February, 1995. The respondent No.3 had

been found to be a bonafide purchaser for the

value without notice, which did not affect his 16

title to the suit property in any way. Mr.

Bhat urged that whether the respondent No.3 had

knowledge of the earlier Agreement for Sale,

had been considered by the Trial Court as well

as the High Court and no fresh materials have

been shown before this Court, which would

warrant interference with such findings of

facts.

18.Mr. Bhat urged that since both the courts

below had on a detailed analysis of the

evidence on record found that the respondent

No.3 was a bonafide purchaser for value without

notice, the Special Leave Petition was liable

to be dismissed.

19.Having carefully considered the submissions

made on behalf of the parties, we are not

inclined to reappraise the evidence once again

in these proceedings. We shall, therefore, 17

confined ourselves only to the legal aspects of

the Special Leave Petition.

20. On the merits of the case of the parties, it is

clear that when the first Agreement for Sale

was executed by respondent No.1 in favour of

the petitioner, he did not possess any power to

enter into the agreement with the petitioner.

For a brief period such power was given to him

but was again withdrawn. Accordingly, on the

two dates which are relevant for our purpose,

namely, 21st February, 1995 and 18th May, 1995,

the respondent No. 1 had no legal right in

respect of the suit property. Consequently,

the agreement executed by the respondent No.1

in favour of the petitioner on 21st February,

1995, had no legal sanction and the suit for

specific performance on the basis thereof was

incompetent.

18

21. Moreover, as far as the respondent No.3 is

concerned, the Agreement for Sale entered into

with him by Rafi Ahmed on the strength of the

General Power of Attorney issued in his favour

by the respondent No.2 on 8th June, 1995 was

valid and protected by the provisions of

Section 19(b) of the Specific Relief Act, 1963.

22.Furthermore, it is well established that

granting relief of specific performance is

purely discretionary and is dependendent on the

provisions of Section 20 of the aforesaid Act

and the Court under Section 21 thereof has the

power to award compensation for breach of

contract instead of decreeing the suit for

specific performance, as has been done in the

present case and, in our view, quite rightly.

23.Since we are in agreement with both the trial

Court as well as the High Court that the 19

respondent No. 1 had no legal authority to

enter into an Agreement for Sale with the

petitioner when he was not vested with the

authority to do so, no interference is called

for with the judgment impugned in the Special

Leave Petition, which is accordingly dismissed.

24.There will, however, be no order as to costs.

...................................................J. (ALTAMAS KABIR)

...................................................J. (MARKANDEY KATJU)

New Delhi Dated:11.09.2008