Ishwar vs Chander Bhan and Another

Satish Kumar Mittal, J.—Defendant No. 2, who is the subsequent purchaser of the suit land, has filed this Regular Second Appeal against the judgment and decree passed by both the courts below whereby the suit of the plaintiff for possession by way of specific performance of the agreement dated 7.11.1991, has been decreed.

The plaintiff filed the aforesaid suit on the allegations that defendant No. 1 entered into an agreement of sale with him regarding his agricultural land measuring 21 Kanals 1 Maria for a consideration of Rs. 60,000/-. In the said agreement, he received Rs. 20,000/- as earnest money and agreed to execute the sale deed on or before 5.6.1992. It was averred that the plaintiff was always ready and willing to perform his part of the agreement and had also appeared before the Sub Registrar on 5.6.1992 for execution and registration of the sale deed with the balance price, but defendant No. 1 did not turn up. It was further alleged that during the pendency of the previous instituted injunction suit, defendant No. 1 transferred the suit land in favour of defendant No. 2 (appellant herein) by registered sale deed dated 6.11.1992 for an amount of Rs. 65,000/-. Therefore, after serving the legal notice to defendant No. 1, the instant suit was filed by the plaintiff.

On notice, defendant No. 1 refused to accept the service. Hence, he was proceeded against exparte. Defendant No. 2 inter-alia contested the suit while taking various pleas, including that the alleged agreement is forged and fabricated document and defendant No. 2 is the bona fide purchaser of the suit land.

After considering the evidence led by both the parties, the trial court as well as the first Appellate Court have come to the conclusion that due execution of the agreement (Ex. P1) by defendant No. 1 has been proved because defendant No. 1 himself had filed the suit for declaring the agreement (Ex. P1) null and void, but the said suit was dismissed in default on 23.4.1996. It has been further held that defendant No. 1 was having the knowledge of the instant suit, but in spite of that he did not appear to defend the suit. On the basis of these facts, it has been held that the execution of the agreement (Ex. P1) was duly proved by the plaintiff. Regarding the plea of the appellant (defendant No. 2) that he was a bona fide purchaser of the suit land, it has been held that except his statement, the appellant did not lead any evidence which establishes his plea that he was a bona fide purchaser of the suit land. It has been held that mere denial on the part of the subsequent transferee is not sufficient to prove that he had no notice of the prior agreement. The initial onus lies on him to prove that he was the bona fide purchaser of the suit land.

Learned Counsel for the appellant argued that the findings recorded by both the courts below that the appellant was having knowledge of the agreement of sale is based on mere conjectures and surmises. He submitted that in a suit for specific performance against the subsequent purchaser, mere denial by him that he was having no notice of the prior agreement, is sufficient to discharge the negative burden placed on him, and in that situation it is for the plaintiff to prove that subsequent purchaser was not a bona fide purchaser. In support of his contention, learned Counsel for the appellant relied upon the decisions of the Patna High Court in Ramchander Singh v. Bibi Asghari Begam and Anr. A.I.R.1957 Pat 224 and Orissa High Court in Dhadi Dalai Vs. Basudeb Satpathy and Others, . Learned Counsel submitted that in this case, before purchasing the suit land, the defendant-appellant had seen the revenue record according to which defendant No. 1 was owner in possession of the suit land. Therefore, in view of his statement, it should be held that the defendant-appellant was a bona fide purchaser.

On the other hand, learned Counsel for respondent No. 1 submitted that the appellant and respondent No. 1 are the first cousins and residing in the same village. He further submitted that before filing of the instant suit, defendant No. 1 filed the suit against the plaintiff for declaring the agreement (Ex. P1) as null and void. Therefore, everybody in the village was knowing about the dispute between the plaintiff and defendant No. 1. He also submitted that the burden on the subsequent purchaser to prove that he is a bona fide purchaser, is not negative burden, but the subsequent purchaser of the suit land is required to prove by positive evidence that he is a bona fide purchaser without any notice of the prior agreement of sale in favour of the plaintiff. He submitted that this onus can be discharged only by the evidence led by him in the case. The mere denial by the subsequent transferee to the effect that he was having no notice of the previous contract for sale will not discharge the onus that rests on them. In support of his contention, learned Counsel for respondent No. 1 relied upon a decision of this Court in Joginder Singh and others Vs. Nidhan Singh and others, , wherein it has been held by this Court that in a suit for specific performance of the contract against the vendor, the onus is on the subsequent transferee to prove that he is a bona fide purchaser of the suit land and the said onus can be discharged only by the evidence led in the case. The mere denial by the transferee to the effect feat he had no notice of the previous contract for sale will not discharge the onus that rests on him.

After hearing the counsel for the parties and going through the impugned judgment and decree, I do not find any substance in the arguments raised by the learned Counsel for the appellant.

In a suit for specific performance of contract for sale, the plaintiff has to establish the contract of sale between him and the vendor and in case a third party claims to have purchased the suit property without any notice of the prior agreement, the burden lies on said party to prove that it was a bona fide purchaser of the suit property without any notice of the prior agreement. It is not for the plaintiff to show that the subsequent purchaser had notice of the previous contract in favour of the plaintiff. The onus of such issue of proving that the subsequent purchaser had no notice of the prior claim lies on the subsequent purchaser. It is the contention of the counsel for the appellant that such burden can be ordinarily discharged by denial. In support of his contention, he placed reliance on the decision of the Patna High Court in Ramchander Singh''s case (supra), wherein it has been held as under:

Very little evidence, and, in certain circumstances, a mere denial, regarding want of knowledge of the plaintiffs contract would discharge this onus and shift the onus on the plaintiff. But in no circumstance the initial onus, which is on the subsequent transferee, shifts on the plaintiff at the first stage, even when the plaintiff mentions in his plaint the reason why he is making the subsequent purchaser a party, and how he came to know that the person concerned was a subsequent purchaser.

(emphasis added)

In Joginder Singh''s case (supra), it has been observed by this Court as under:

...It has to be seen in this case as to whether there was sufficient evidence led by the defendant to prove that he had no prior notice of the execution of the agreement to sell Ex. PA by Puran Singh in favour of the plaintiff-appellants. The correct approach, according to me, is to find out as to whether the defendant in the instant case, has led evidence to show that he had no notice of the previous agreement to sell in favour of the plaintiff-appellants. The lower Appellate Court has not referred to any evidence led by the defendant-respondent Nidhan Singh to this effect. It merely came to the conclusion that the defendant had the notice of the agreement to sell Ex. PA without referring to any evidence on the file. I am fortified in my view by a Division Bench judgment of this Court in Gurmukhvir Singh v. Sohan Singh Bela Singh AIR 1963 PC 407 (sic), relying upon AIR 1934 68 (Privy Council) , wherein it has been held that where, on the land in respect of which agreement to sell had been entered into is being sold by the vendor to another person in breach of the contract of sale and a suit for specific performance of the contract against the vendor and the transferee is instituted, the onus is on the transferee to prove that he had no notice of the prior agreement to sell in favour of the plaintiff. The onus can only be discharged by the evidence led in the case. The mere denial by the transferee to the effect that they had no notice of the previous contract for sale will not discharge the onus that rests on them.

(emphasis added)

In my opinion, the shifting of burden in such cases depends upon the facts and circumstances of each case. No hard and fast rules can be laid down. In some cases, even mere denial by the subsequent purchaser and by leading negative evidence like inspection of the revenue record, the burden can be discharged, but "in certain circumstances" the subsequent purchaser is required to prove that aforesaid issue by leading cogent evidence. Everything depends upon the facts and circumstances of each case.

In the instant case, in my opinion, mere denial by the appellant that he was having no notice of the previous agreement of sale, is not sufficient for discharging the burden that rests on him to prove that he was a bona fide purchaser of the suit land. The appellant is not a stranger in the village. He is not stranger to both the parties. He is a resident of the village where both the parties are residing. Not only this, the appellant and respondent No. 1 are that first cousins. He has not denied the facts that the plaintiff was his cousin and residing in the same village. The reasoning given by the courts below that the plaintiff and defendant No. 2 are the close relatives and first cousins and it cannot be believed that defendant No. 2 was not aware of the previous agreement, particularly when there is no litigation between the plaintiff and defendant No. 2, cannot be said to be perverse. On the other hand, the plaintiff has categorically stated in his statement that defendant No. 2 was having knowledge of the agreement and in spite of that he had purchased the property. In these facts and circumstances, in my opinion, on the mere denial by the appellant, it cannot be held that he had discharged the burden to prove that he was a bona fide purchaser of the suit land. Since in this case except the statement of the appellant, no other evidence has been led by him, both the courts below have recorded the said finding of fact after appreciating the evidence available on the record. The said finding of fact does not require any interference in this appeal u/s 100 C.P.C. as has been held by the Supreme Court in Janki Narayan Bhoir Vs. Narayan Namdeo Kadam, ; Kulwant Kaur and Others Vs. Gurdial Singh Mann (dead) by Lrs. and Others etc., ; Bondar Singh and Others Vs. Nihal Singh and Others, and Kanhaiyalal and Others Vs. Anupkumar and Others, .

No substantial question of law is involved in this appeal.

Dismissed.