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Judgment
P. Shanmugam, J.—The unsuccessful plaintiff in a suit for specific performance is the appellant. The brief facts of the case are stated
hereunder. The parties are referred to as per their rankings before the Sub-court.
The plaintiff filed a suit for specific performance of the agreement of sale dated 27.10.1987 directing the defendants to execute the sale deed in
respect of the suit property bearing Door No.30, Sungam Pallivasal Street, Madurai measuring an extent of 49-1/2'' x 100'' for Rs.46,000/- as
agreed between the plaintiff. The case as put forward in the plaint is that the first defendant, after adjusting the balance consideration of
Rs.25,000/-, failed to execute the sale deed inspite of her readiness; the suit property is owned by one Mohammed Hussain; he had mortgaged the
suit property for a sum of Rs.3,000/- in favour of one Mohammed Abdul Khader under Ex.B.2 on 8.6.1960; the plaintiff got an assignment of the
said mortgage deed from the legal representatives of Mohammed Abdul Khader with possession (made over) under Ex.B.3 on 17.5.1967; the
original owner Mohammed Hussain created a second mortgage for Rs.4,000/- in favour of the plaintiff by Ex.B.4 in reference to the same property
dated 24.5.1967; thereafter, the first defendant Muthu Mohammed purchased the suit property for a sum of Rs.35,000/- from Mohammed
Hussain subject to mortgage through Ex.B.1 dated 17.10.1977; the plaintiff entered into a sale agreement on 27.10.1977 under Ex.A.1 (Ex.B.5)
with the subsequent purchaser, viz. Muthu Mohammed for a sum of Rs.46,000/-. As per this document, the following amounts -
(a) Advance amount paid - Rs. 2,000/-
(b) Mortgage amount - Rs. 7,000/-
(c) Amount on Promissory Note - Rs. 7,000/-
(d) Payment of Taxes Rs. 4,000/-
(e) Amount spent for development - Rs. 5,000/-
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Total - Rs. 25,000/-
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were to be adjusted from the sale price of Rs.46,000/- and the balance of Rs.21,000/- was to be paid at the time of registration of the document;
there were exchanges of notices between the plaintiff and the first defendant Muthu Mohammed; however, the first defendant executed a
settlement deed in respect of the suit property in favour of the second defendant under Ex.A.10 (Ex.B.6) dated 22.6.1981 in spite of the plaintiff''s
objection before the Sub Registrar. The plaintiff, after issuing the suit notice, had filed the suit O.S. No.525 of 1981 on 17.10.1981; in the
meanwhile, the second defendant filed the suit O.S. No.70 of 1983 for redemption of mortgage on 21.9.1981. The suit filed by the plaintiff was
dismissed, but the suit filed by the second defendant was decreed. The appeal A.S. No.129 of 1987 is preferred against the judgment and decree
in O.S. No.525 of 1981 refusing to grant the decree for specific performance. Transfer A.S. No.1119 of 2001 is preferred against the decree
granting the redemption of mortgage.
Learned counsel Mr. Sitharanjan Das appearing on behalf of the appellant/plaintiff submitted that there is a total misdirection of the issues and
the points involved in the case by the Sub-court. He submits that the court below having accepted the agreement for sale, Ex.A.1, committed grave
error in requiring proof for the amounts acknowledged thereunder by independent documentary evidence in respect of the advance amount,
payment of tax, improvements, etc., the same having been acknowledged by the first defendant in his legal notice dated 1.12.1979, Ex.A.4.
According to him, the court below had committed an error in holding that time is the essence of the contract when the sale agreement itself stated
that the sale deed should be executed within a period of approximately six months. He further submits that the signature in the agreement Ex.A.5
dated 19.10.1980 extending the period is admitted by the first defendant in his evidence and hence, it ought to have been accepted by the court
below. According to the learned counsel, the plaintiff was admittedly in possession of the property as per Ex.B.3 from as early as on 19.5.1967
and the first defendant had purchased the property subject to the mortgage and thereafter entered into an agreement of sale and therefore, the
plaintiff is entitled to invoke the provisions of Section 53-A of the Transfer of Property Act. According to him, in the light of Ex.A.1, the court
below ought to have held that the mortgage stood discharged and the relationship of debtor and creditor was no longer subsisting. He also submits
that the subsequent settlement executed by the first defendant under Ex.A.10 dated 22.6.1981 is a nominal, gratuitous transfer and hence not valid
and that the second defendant is not a bonafide transferee for value without notice. According to him, the learned Sub Judge erroneously held that
the suit was barred by limitation without considering that in terms of Article 54 of the Limitation Act, there is no specific date fixed for filing a suit
for specific performance and the suit filed was well within the time from Ex.A.4 notice dated 1.12.1979 and in terms of Section 18 of the
Limitation Act. The learned counsel therefore submits that the decree as prayed for has to be granted in this case.
Learned counsel appearing on behalf of the respondents submitted that time is the essence of the contract and that the plaintiff had not filed the
suit within six months from Ex.A.1 agreement and therefore, the suit is clearly barred by limitation. According to the learned counsel, the plaintiff
was not ready and willing to perform her part of the contract within the period of limitation prescribed under Ex.A.1 and the alleged adjustment is
not supported by any documentary evidence. It is submitted that the suit agreement, though admitted, was not in force when the suit was filed and
that the suit is hopelessly barred by limitation. It is further submitted that the learned Subordinate Judge, in a detailed consideration, has correctly
framed the issues and found that the plaintiff was not ready and willing to perform her part of the contract and that the plaintiff had miserably failed
to establish her right to get the sale deed executed and hence, the judgment of the court below does not call for any interference. The second
defendant, viz. S. Sahul Hameed is rightly entitled to have the mortgage discharged and hence, the decree in O.S. No.70 of 1983 is valid and has
to be confirmed.
We have heard the counsel, gone through the records and evidence and considered the matter carefully.
The facts that are not in dispute are :-
(1) The plaintiff has got an assignment of the first mortgage with possession by Ex.B.3 dated 17.5.1967.
(2) The plaintiff has also obtained a second mortgage from the owner of the property by Ex.B.4.
(3) The first defendant had purchased the property subject to the mortgage.
(4) An agreement of sale dated 27.10.1977 was executed between the plaintiff and Muthu Mohammed, the first defendant.
(5) The first defendant, by his notice dated 1.12.1979, had admitted the discharge of the liability to the tune of Rs.24,000/- when he demanded
possession expressing his willingness to repay the amount of Rs.24,000/-.
In the light of the above admitted position, the only point that arises for consideration is whether time was the essence of the contract and if so,
whether the suit is therefore barred by limitation.
The suit agreement Ex.A.1 (Ex.B.5) dated 27.10.1977 recites the following :
(a) Total Consideration - Rs. 46,000
(b) Acknowledgment of advance - Rs. 2,000
(c) Adjustments towards -
i) Payment of mortgage amount - Rs. 7,000
ii) Payment of debt on Pro-Note - Rs. 7,000
iii) Improvement of the property - Rs. 5,000
iv) Payment of House Tax - Rs. 4,000
---------
Total - Rs. 25,000
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(d) Balance consideration of Rs.21,000/- to be paid before the Sub Registrar at the time of registration of the document.
(e) For the remaining amount of Rs.21,000/-, interest at the rate of 12% was to be paid continuously.
The expression, "",d;W Kjy; Rkhh; 6 khj tha;jhtpy; xd;dhtJ eghpd; brytpy; fpuag;gj;jpuk; th'';fp vGjp"" and the payment of interest on the balance
consideration of Rs.21,000/- would clearly show that time is not the essence of the contract. The six months'' period is not definite. It is stated,
From today, the plaintiff should get the sale deed executed at his expense within a period of about or approximately six months. The word,
about"" or ""approximately six months"" would clearly indicate that the six months'' period is not a definite condition of the agreement. The plaintiff
was admittedly in possession of the property by virtue of the assignment of the first mortgage under Ex.B.3 and the recital in Ex.A.1 that on the
failure of the plaintiff, the first defendant shall obtain vacant possession of the mortgaged house clearly shows that the plaintiff is in possession of the
property and is entitled to invoke the provisions of Section 53-A of the Transfer of Property Act since her possession was in part performance of
the agreement of sale, Ex.A.1.
Though the learned Subordinate Judge has accepted Ex.A.1 agreement, has chosen to reject it on the ground that there is no independent
documentary evidence referrable to the various adjustments. However, he has failed to consider properly Ex.A.4, the legal notice issued on behalf
of the first defendant. In the registered notice dated 1.12.1979, Ex.A.4 issued on behalf of the first defendant, it is stated as follows :
It is true that there was a sale agreement dated 27.10.1987 entered into between our client and your client.
Again, in paragraph 2 of the notice, it is stated as follows:
As per the terms of the sale agreement dated 27.10.1977, your client has to get the sale deed executed by our client within six months from the
date of the agreement by paying the balance of Rs.21,000/- (Rupees twenty one thousand only), failing which your client is entitled to get only a
sum of Rs.24,000/- (Rupees twenty four thousand only) from our client and hand over vacant possession of the building without any let or
hindrance to our client. .....
Our client is willing to pay the sum of Rs.24,000/- as per the sale agreement dated 27.10.1977 to your client and hereby, your client is called
upon to receive Rs.24,000/- from our client and surrender vacant possession of the building to our client without any let or hindrance within a
week from the date of receipt of this notice.
It is pertinent to note that the first defendant had suppressed the existence of the sale agreement itself when he gave Ex.A.2 notice dated
19.9.1979. In the said notice issued on behalf of first defendant A. Muthu Mohammed, it is stated that the suit property had been mortgage under
a usufructuary mortgage and assigned to the plaintiff on 17.5.1967 (Ex.B.3) and the notice further acknowledged that the suit property had been
mortgaged to the plaintiff on 24.5.1967 for an additional sum of Rs.4,000/- and admits that the plaintiff was in possession and enjoyment of the
property as Othidar and the total mortgage amount due to the plaintiff is Rs.7,000/- and by which notice he called upon the plaintiff to intimate her
willingness to receive the mortgage amount of Rs.7,000/- and surrender vacant possession. This notice did not refer to the existence of the sale
agreement with the first defendant. Therefore, immediately the plaintiff issued Ex.A.3 notice dated 16.10.1979 pointing out the suppression of the
written agreement of sale dated 27.10.1977 and the stipulation that the mortgage amount mentioned had been completely superseded and there is
nothing outstanding rights or obligations arising out of the mortgage document. It was clearly pointed out that the sale agreement was in force and
the parties had to work out their respective rights only as per that agreement. It is only thereafter Ex.A.4 notice was issued on behalf of the first
defendant calling upon the plaintiff to receive Rs.24,000/- and surrender vacant possession.
From the above, it is crystal clear that the first defendant has admitted and acknowledged the various amounts amounting to Rs.25,000/- in no
uncertain terms. The first defendant is estopped as per the record and conduct to disown the receipt and liability. The court below has miserably
failed to consider this aspect while holding that the amount referred to in Ex.A.1 has not been substantiated. The adjustments set out in Ex.A.1 are
acknowledged by the signature of the first defendant in Ex.A.1 itself, coupled with the legal notice, Ex.A.4. Apart from the above, D.W.2, the son
of the first defendant has stated that he had instructed the counsel for issuing Ex.A.2 and Ex.A.4 and has further stated as follows :
vd; je;ijf;fhf ehd; jhd; nfR elj;Jfpnwd;/ V2. V4 Mfpatw;wpy; ehd; jhd; tpgu'';fs; brhd;ndd;/
D.W.2 has further stated in the cross-examination that they have agreed to receive Rs.2,4000/- and that he has not stated that the period has
expired in Ex.A.4. What he has stated is as follows :
U:/24.000j;ij eh'';fs; bfhLj;J V4y; xg;g[f;bfhz;nlhk;/ MW khjj;jpw;Fs; gzj;ij brYj;jp fpiuaj;ij Kof;fhjjhy; fhyhtjp Mfptpl;ljhf V4y; brhy;ytpy;iy/
The acknowledgment of the liability under Ex.A.4 was specifically pleaded in paragraphs 11 and 12 of the plaint. However, in the light of the
rejoinder dated 1.12.1979, the first defendant knew very well that the period of six months mentioned in the contract was not the essence of the
contract and that the first defendant did not pursue the matter as claimed in Ex.A.4 notice, for which there is no reply in the written statement. The
defendant had conveniently omitted to deal with the same except by saying that on 1.12.1979, the defendant had issued a notice. The special plea
is taken only at the stage of argument, which was erroneously accepted by the learned Subordinate Judge that there must be independent
documentary evidence to sustain the liability of the defendant in respect of debts, value of improvement, payment of tax, etc., overlooking the
documentary and oral evidence. D.W.2 has stated in his evidence as follows :
V1I vGjpagpd; goj;Jf; fhz;gpj;jhh;/ bjhpe;J bfhz;l gpd;dh; jhd; ifbahg;gk; nghl;nlhk;/ U:/2000 ml;thd;!; th'';fg;gl;lJ/ fpiua bjhif U:/46000f;F
U:/23000j;ij xj;jpf;fhft[k; g[nuhnehl;Lf;fhft[k; thp brYj;jpajw;fhft[k; kuhkj;J bryt[ bra;jjw;Fk; bry; fpiua gj;jpuk; vGjpf; bfhLf;Fk; nghJ bry; vGjpf;
bfhLf;fg;gl;lJ/ bry; vGjpajhf ""hgfkpy;iy/ V/1 gpufhuk; V/1d; njjpapy; U:/23000 bry;yhfptpl;ljh vd;why; rhpapy;iy/ me;j U:/U:/23000f;F tt[r;rh;
bfhLf;Fk;go eh'';fs; nfl;ftpy;iy/ me;j gj;jpu'';fis bry; itf;fg;gl;L hpf;fhh;Lfis 1k; gpujpthjpaplk; bfhLf;fg;gl;ljhft[k; mth; mtw;iw Kfk;kJ cirdplk; bfhLj;J
tpl;ljhft[k; TwtJ rhpay;y/ U:21000$ nehpnyh rhh;gjpthsh; Kd;dpiyapnyh bfhLf;f xg;g[f; bfhz;L vt;tpj Ml;nrgizapd;wp fpiuak; gjpe;J bfhLg;gljhf V1y;
xg;g[f;bfhz;nlhk;/ fpiuag; gj;jpuj;ij gjpt[ bra;a bfhLj;j gpd;dh; jhd; U:21000 thjpaplk; ,Ue;J eh'';fs; th'';fpf; bfhs;s ntz;Lk; vd;W brhy;tJ rhpay;y/ me;j
khjphp vGjp ,Ue;jhy; ""hgfkpy;iy/ me;j bjhifia thjp 1k; vjph;thjpf;F bfhLf;fhtpoy; mjw;F U:/1 tl;o tPjk; bfhLf;f xg;g[f;bfhz;L V1y; vGjg;gl;ljhf TwtJ
rhpay;y/ me;j &uj;J mt;thW nfhl;oUe;jhy; ""hgfkpy;iy/
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rg; otp&d; Mftpy;iy vd;Wk; thpkhw;wk; Mftpy;iy vd;Wk; eh'';fs; brhy;ypf; bfhz;nl te;jjhf TwtJ rhpay;y/ tU&k; Mf Mf brhj;jpd; kjpg;g[ cah;e;J
bfhz;nl nghdJ/ fpiuaj;ij thjpf;F Koj;Jf; bfhLf;ff;TlhJ vd;W bgha; fhuzk; fhl;o ehl;flj;jp te;jjhf TwtJ rhpay;y/
The above evidence of D.W.2 clearly shows that Ex.A.1 was written after having been read over and after acknowledging the amounts mentioned
thereunder and that they have not insisted vouchers for those amounts. He has conveniently stated that he does not remember to have written to
receive interest for the balance amount. Though he has denied the suggestion for the failure to sub-divide the property because of the increase in
the value of the property, the first defendant had been prolonging the execution of the sale deed on false grounds.
In the light of the recitals in Ex.A.1 that the sale deed had to be executed within approximately six months and the plaintiff had to continue to
pay interest for the remaining amount of Rs.21,000/- and Ex.A.4, rejoinder notice of the first defendant, it is crystal clear that time is not the
essence of the contract. We are therefore clearly of the view that the learned Subordinate Judge has overlooked the legal presumption that time is
not the essence of the contract for sale of the immovable property both under the Contract Act and the Transfer of Property Act. None of the
terms of the agreement can be pointed out which make time as the essence of the contract on the date of execution of Exs.A.1 and A.4. D.W.2,
the son of the first defendant, has admitted that he does not know whether the property had been sub-divided and whether the property had been
separately assessed in the Municipality. D.Ws.1 and 2 have admitted that the plaintiff had improved the property by putting up a bathroom and a
lavatory, besides providing electricity and water connections. The learned Judge also admittedly failed to see that the first defendant had no clear
marketable title, besides the requirement of demarcation of the area and the extent of the property agreed to be sold and the failure to change the
assessment would establish that time is not the essence. The agreement to continue to receive interest for the balance consideration should clinch
the issue against the alleged stipulation of time being the essence of the contract. Further, P.W.1, in his evidence, has categorically stated that they
were always ready and willing to perform their part of the contract and were requesting the first defendant to execute the sale deed. The plaintiff
had established that during the relevant time, the plaintiff had agreed to sell by Ex.A.6, a valuable property at Thamizh Sangam Road for
Rs.60,000/- and received an advance of Rs.35,000/- on 1.6.1989. He has also stated that they have got sufficient means in movable and
immovable properties in order to fulfill her part of the contract.
In S.P. Narayaaswami Pillai Vs. Dhanakoti Ammal, a learned Judge of this Court, following the various decisions on the subject, held that in a
case of an agreement for sale of immovable property, the presumption is that time is not the essence of such agreement. As pointed out, in this
case, there are no special circumstances to warrant interference against the usual presumption that time is not the essence of the contract in an
agreement for sale of an immovable property. There is no sufficient evidence of putting the plaintiff on notice of any preemptory requirement. In
Eswari Amma and Another Vs. K.K. Korah and Others, a Division Bench of this Court has taken the view that it has been held in a series of
decisions that mere delay will not preclude the plaintiff from obtaining specific performance if his suit is otherwise in time. According to the Division
Bench, from the decisions, prima facie equity treats the importance of such time limit as being subordinate to the main purpose of the parties and it
will enjoin specific performance notwithstanding that from the point of view of a court of law, the contract has not been literally performed by the
plaintiff as regards the time limit specified. Hence, we hold that the plaintiff was always ready and willing to perform her part of the contract and
therefore, she is entitled for specific performance.
In the light of the specific admission of D.W.1 that the signature found in Ex.A.5 is that of his, the finding of the court below in reference to
Ex.A.5 that it is not a genuine document cannot be accepted. P.W.1, the alleged expert who has given evidence, is not a properly qualified and
trained expert in handwriting. In the absence of a specific issue as to the genuineness of Ex.A.5, and the admission of the signature by D.W.1
himself requires no further materials to reject Ex.A.5. In any event, in the light of our finding that time is not the essence of the contract and that the
plaintiff was always ready and willing to perform her part of the contract and that she was in possession of the suit property, the question
concerning Ex.A.5 is academic. We also hold that in the light of the admission of the receipt of the amount of mortgage in Ex.A.1, the relationship
of debtor and creditor between the plaintiff and the first defendant stood extinguished. In the light of the admissions, the facts and circumstances
and the close relationship between defendants 1 and 2, it is clear that the alleged settlement deed is nothing but a gratuitous transfer made in order
to avoid a decree. Admittedly, the transfer was not bonafide and was made without notice. D.W.2 has stated that he was satisfied that the sale
agreement was barred by limitation. Though he had denied the suggestion that the suit property was agreed to be transferred to him in view of the
marriage of the first defendant''s grand daughter, it is clear that he had agreed to take the property as gift after issuing Exs.A.2 to A.4. He had
admitted that he did not examine the implications of Ex.A.4 and that he had not verified the assessment in respect of the property.
The second defendant, as plaintiff in his suit O.S. No.70 of 1983 filed for redemption of mortgage, has stated in paragraph 5 of the plaint as
follows :
The plaintiff is the husband of the first defendant''s daughter''s daughter, namely Abeda Begum. By way of provision for his grand-daughter''s
family and post-nuptial settlement, the first defendant (Muthu Mohammed) settled the property on the plaintiff (S. Sahul Hameed) by a registered
settlement deed dated 22.6.1981.
The second defendant was fully aware of the subsisting agreement for sale which had wiped out the mortgage liability and other dues of the first
defendant and the plaintiff was in possession as that of a vendee under an agreement for sale as per the terms and conditions of Ex.A.1, agreement.
The plaintiff is also entitled to the benefit of Section 53-A of the Transfer of Property Act and the second defendant, as an Advocate, was fully
aware of the implications of law on the facts of the case. The defendant is also aware that the plaintiff had improved the property and that the
alleged settlement is gratuitous and that no actual transfer or possession or acceptance could have taken place. In any event, the settlement is
collusive and no title is passed on to the second defendant to seek for redemption. The plaintiff had sent a notice of protest of Ex.B.6 agreement
dated 22.6.1981 and the first defendant cannot deal with the property in derogation of his agreement for sale with the plaintiff. We have therefore
to hold that the second defendant has no locus standi to challenge the validity or enforceability of the agreement for sale or to question the right of
the plaintiff. Hence, the judgment and decree in O.S. No.525 of 1981 is liable to be set aside. The appellant/plaintiff is entitled to the decree as
prayed for.
Tr. A.S. No.1119 of 2001 is against the decree in O.S. No.70 of 1983. The appellant is the second defendant in the suit O.S. No.70 of 1983
and she is the plaintiff in O.S. No.525 of 1981. The suit is to receive a sum of Rs.7,000/- and discharge the mortgage under deeds dated 8.6.1960
(Ex.B.2) and 24.5.1967 (Ex.B.4) and deliver possession of the schedule property. The facts of the case and the substantial portions of the
submissions made and arguments advanced have already been dealt with. The said suit has been decreed by the learned Subordinate Judge in a
separate judgment. The learned Judge has framed the following issues :-
(1) Whether the plaintiff is entitled to have the mortgage discharged and have delivery of possession of the suit property to the plaintiff and first
defendant?
(2) Whether the plaintiff is entitled to have the 2nd defendant to render the accounts of the rents and profits from the date of deposit of the othi
amount till delivery of possession on redemption?
(3) Whether the claim is barred by limitation under Act 61(b) of the Limitation Act?
(4) Whether the agreement dated 26-10-1980 is true and valid?
(5) To what relief?
While answering issues 1, 3 and 4, the learned Judge has found that the plaintiff in the suit is entitled for redemption. The appeal is filed by the
plaintiff in O.S. No.70 of 1983 against this judgment and decree.
We have heard both the appeals together and considered the matter carefully.
We have already held that the sale agreement is valid and enforceable and that the agreement holder is in possession of part performance of
the sale. We have also found that time is not the essence of the contract for sale and that the plaintiff was always ready and willing to perform her
part of the contract while the first defendant was evading to perform the contract. The evidence taken in O.S. No.525 of 1981 was ordered to be
treated for both the cases. In Ex.A.11, notice issued on behalf of the plaintiff in O.S. No.525 of 1981, it is clearly stated as follows :
When my client was pressing No.1 of you to execute the sale deed and receive the balance of consideration viz. Rs.20,000/- (Rupees twenty
thousand only), No.1 of you was giving some excuse or other, however assured my client that he would execute the sale deed before the end of
June 1981. My client believed the representations made by No.1 of you. However, on the night of 19.6.1981, both of you came to the house with
some 4 others and No.2 of you wanted my client to receive Rs.30,000/- (Rupees thirty thousand only) and vacate the house and hand over
possession of the same to No.1 of you. My client and her son Sultan Mohideen who were in the house then refused. There was some alteration
over this affair. On 20.6.1981, one Mydeen, son of No.1 of you gave a complaint against my client''s son Sulthan Mohideen and others at B.1
Police Station and after due enquiry, No.1 of you was warned by the police.
7) On 22.6.1981, when my client came to know that at the instance of No.2 of you, No.1 among you executed a gift settlement deed in favour of
No.2 of you in respect of the house in my client''s possession and occupation and in respect of which No.1 of you was bound to execute a sale
deed, my client''s son Sulthan Moideen presented a petition before the Sub-Registrar protesting against the registration of the fraudulent Gift
Settlement deed in favour of No.2 of you, when No.2 of you was also present at the office of the Sub-Registrar, Madurai. The Sub-Registrar
received the objection Statement and issued a receipt on 22.6.1981; but passed an order that he should not refuse to register the document and
that the objector could take appropriate legal proceedings in a Court of law.
The notice alleged that the settlement deed was a collusive, fictitious and an invalid deed and that the settlement deed was not valid and binding and
that No.2 (plaintiff) could not get and was not given possession of the house property. Though the said notice was acknowledged, in a reply letter
dated 18.8.1981 by the counsel Ex.A.12, which was termed as an interim reply seeking for a copy of Ex.A.5. Beyond that, there was no reply at
all as to the specific allegations contained in Ex.A.11, notice. The second defendant has also admitted in his evidence that he did not take steps to
recover the mortgage amount. The alleged settlement Ex.B.6 was gratuitous and has not been proved as no attestor had been examined as
required u/s 68 of the Indian Evidence Act.
The learned Sub Judge did not consider the facts that Muthu Mohammed purchased the suit property subject to mortgage, that he had
acknowledged the receipt of the mortgage amount by Ex.A.1, that the plaintiff was in possession of the property from 17.5.1967 as per Ex.B.3,
assignment of mortgage, that she is, therefore, in possession of the suit property as an agreement vendor u/s 53(2) of the Transfer of Property Act
and that she had effected improvements and had been paying tax to the Corporation. Therefore, Sahul Hameed has no locus standi after the
mortgages having become discharged and in view of the agreement, Ex.A.1.
A Division Bench of this Court in Veeramalai Vanniar (Died) and Others Vs. Thadikara Vanniar and Others, has held that except where the
statute provides an exception to the rule as in Section 27(b) of the Specific Relief Act 1963, no person, as the owner of the property, who has
entered into an agreement to sell the property, shall thereafter convey the same property to any other person, as after the prior agreement of sale,
he cannot be said to be a free owner of the property. According to the Division Bench, the plain language of Sub-section (2) of Section 27 of the
Act shows that the subsequent transferee can retain the benefit of his transfer by purchase which, prima facie, he had a right to get only after
satisfying the two conditions concurrently, viz. - (1) he must have paid the full value for which he purchased the property; and (2) he must have
paid it in good faith and without notice of the prior contract. Further, the burden of proof is upon the subsequent purchaser to establish these
conditions in order that his right may prevail over the prior agreement of sale. It is the actual payment of money and not a mere agreement to pay
the money which alone confers a right so as to prevail over a prior agreement of sale. It is also the duty of the subsequent purchaser to inquire from
the person in possession as to the precise character in which he was in possession at the time when the subsequent sale transaction was entered
into. The above said judgment applies to the facts of the present case. Sahul Hameed was aware that the plaintiff is in possession of the property
as part performance of the contract, but even then he had failed to pay the full value for discharge of the mortgage and he also had notice of the
prior agreement.
In B. Murlidhar vs. Sowdagar AIR 1970 Mys 203, a learned Judge of the Mysore High Court has taken the view that when the requisite
conditions for attracting Section 53-A of the Transfer of Property Act existed and the mortgagor was bound by the contract, he had no right to
redeem the mortgage. In this case, Ex.A.1, agreement itself acknowledged that the plaintiff is in possession of the property and that she had been
paying taxes to the tune of Rs.4,000/-, which has been acknowledged in Ex.A.1, and on her failure to pay Rs.21,000/- she had to hand over
vacant possession. From this, it is clear that the plaintiff is in possession of the suit property and Sahul Hameed had no right to redeem the sale.
For all the above reasons, we hold that the judgment and decree in O.S. No.70 of 1983 is clearly erroneous and unsustainable. We therefore
hold that the plaintiff in O.S. No.525 of 1981 is entitled for a decree for specific performance as prayed for. Thus, the appeals are allowed,
however in the circumstances of the case, with costs. Consequently, the connected C.M.Ps. are closed.