N. Sumangala Devi vs D. Basavarajaiah and Others

N. Kumar, J.—This Regular First Appeal is preferred by the third defendant challenging the Judgment and Decree passed by the trial Court which has allowed the suit of the plaintiff for specific performance of agreement of sale dated 15.7.2005.

For the purpose of convenience, the parties are referred to as they are referred to in the original suit.

The subject matter of the suit is, all that piece and parcel of an immovable property-residential building bearing No. 1391 (Municipal No. 1391/2 and P.I.D. No. 36-57-2) which is situated at 1st Main, Govindarajanagar (Thimmenahalli), Bangalore 560 079 which is more fully described in Schedule-A to the plaint and hereinafter referred to as schedule property.

The case of the plaintiff is, the first and second defendants are the wife and husband respectively. The first defendant represented to the plaintiff that she is the absolute owner of the schedule property having purchased the same under a registered sale deed dated 17.7.2004 from one Renukaiah. The first defendant approached the plaintiff over the sale of schedule property for a total consideration of Rs. 34,50,000/-. Plaintiff agreed to purchase the same. Accordingly, on 8.7.2005, the plaintiff issued three cheques amounting to Rs. 7,25,000/- as advance. The particulars of which are mentioned in para. 3 of the plaint. Thereafter, on 15.7.2005, the first defendant executed an agreement of sale agreeing to execute a registered sale deed within three months from the date of agreement. She further received an additional sum of Rs. 6,75,000/- as advance through cheques. The plaintiff also paid a sum of Rs. 1 lakh by way of cheque on behalf of first defendant to one Sri Renukaiah to clear the dues by the first defendant to him. The said Renukaiah attested the agreement of sale as a witness. It was agreed that the said amount of Rs. 1 lakh paid to Renukaiah constitutes part of sale consideration. Thus, on the date of agreement dated 15.7.2005, plaintiff had paid Rs. 15 lakhs to the first defendant which was duly acknowledged and remaining consideration of Rs. 19,50,000/- had to be paid within three months. In the meantime, the first defendant agreed to hand over all the original documents pertaining to the schedule property and also to clear the subsisting loan and also to get the tenants evicted. Further, the first defendant had also agreed to pay all the taxes, electricity and water charges to the concerned authorities. In fact, the 1st defendant had agreed to return the advance amount of Rs. 15 lakhs in the event of first defendant failing to execute the sale deed together with the additional sum of Rs. 15 lakhs by way of damages.

However, during the first week of August, 2005 the 1st defendant, in order to meet certain urgent needs and in order to pay the taxes and to get the tenants evicted, requested the plaintiff to pay a further sum of Rs. 2 lakhs to her husband - the 2nd defendant. She had agreed that it would be a part of the sale consideration. Trusting her words, the plaintiff paid a sum of Rs. 2 lakhs as per the cheque dated 12.8.2005. The plaintiff informed the first defendant that he is prepared to pay the remaining balance sale consideration amount and get the absolute sale deed duly registered and requested the first defendant to produce the original documents for scrutiny. At this stage, the first defendant disclosed that she has mortgaged the plaint schedule property in favour of Sri Subramanyeshwara Co-operative Bank Ltd., Vijayanagar, Bangalore as security for borrowing loan and she is in fact due in a sum of Rs. 15,50,000/- to the said Bank. In that context, the first defendant requested the plaintiff to pay a sum of Rs. 11,50,000/-. After due deliberations, the plaintiff agreed to pay the said sum of Rs. 11,50,000/- directly to the said Bank and the 1st defendant also undertook to pay the remaining balance amount of Rs. 4 lakhs and to clear the loan in order to get the mortgage discharged and to secure the original title deeds. Accordingly, the plaintiff deposited a sum of Rs. 11,50,000/- to the loan account of the first defendant with the said Bank on 24.8.2005 and the first defendant was required to pay the remaining loan amount of Rs. 4 lakhs to the Bank on the ground that she was trying for one-time-settlement and also to seek reduction in interest. The first defendant has made an endorsement acknowledging receipt of Rs. 2 lakhs plus Rs. 11,50,000/- in all amounting to Rs. 13,50,000/-. Thus, total amount paid towards sale consideration is Rs. 28,50,000/- as on 24.8.2005.

Again in the month of December 2005, the first defendant requested the plaintiff to pay a sum of Rs. 2,50,000/- to the 2nd defendant and the said amount was paid by way of cheque dated 13.12.2005. Again first defendant demanded another sum of Rs. 1 lakh in the month of January 2006 in order to evict the tenants. Accordingly, the plaintiff paid a sum of Rs. 1 lakh in cash which has been duly acknowledged by the first defendant and she agreed to execute the absolute sale deed on or before 1.6.2006. Thus, the time was never the essence of the contract between the plaintiff and the first defendant. Out of agreed sale consideration of Rs. 34,50,000/-, the plaintiff had paid Rs. 32,00,000/- to the first defendant the receipt of which amount has been duly acknowledged by her. Having paid the said amount, the plaintiff was ever ready and willing to get the absolute sale deed registered in his favour. However, the first defendant on one pretext or the other, evaded to execute the sale deed.

Strangely, instead of executing the sale deed, the first defendant chose to issue a legal notice dated 04.04.2006 stating that the plaintiff has failed to complete the sale transaction within the stipulated time of three months i.e. 15.10.2005. The first defendant also called upon the plaintiff to return the cheques issued to the second defendant suppressing the facts of receiving further amounts even subsequent to 15.10.2005 and also the endorsement made by her agreeing to execute the absolute sale deed on or before 01.06.2006. The plaintiff issued a reply notice dated 05.12.2006 reiterating the contentions taken up in the earlier legal notice dated 22.5.2006 clearly stating what has transpired between the date of agreement and the date of the legal notice and the reply and asserted that he has paid Rs. 32 lakhs and he is ready with the balance sale consideration. He called upon the plaintiff to clear the loan due to Sri Subramanyashwara Co-operative Bank to get the mortgage discharged and receive the original documents and to receive the balance sale consideration of Rs. 2,50,000/- and execute the sale deed. Instead of complying with the said demand, on verification, the plaintiff found out that the first defendant has clandestinely sold the suit schedule property in favour of 3rd defendant for a paltry sale consideration of Rs. 14,20,000/- as per sale deed dated 29.12.2006. The second defendant is a witness to the said sale deed along with Renukaiah. This clearly shows the defendant has played fraud on the plaintiff. The very fact that the plaint schedule ''A'' property worth Rs. 34,50,000/-, is sold for a paltry sale consideration of Rs. 14,20,000/- in favour of 3rd defendant speaks for itself that the absolute sale deed was only a sham transaction/nominal one. And the sale transaction is not bona fide. Third defendant though is aware of the agreement of sale subsisting between the plaintiff and the first defendant, with a mala fide intention has purchased the same in collusion with the first and second defendants. Therefore, the plaintiff filed this suit for specific performance of agreement of sale.

After service of summons, the defendants 1 and 2 filed a common written statement traversing all the allegations in the plaint. They did not dispute the execution of agreement dated 15.7.2005. They also admitted that they had mortgaged the property in favour of Sri Subramanyashwara Co-operative Bank as security for borrowing loans and she is due in a sum of Rs. 15,50,000/- to the said Bank. When the plaintiff repeatedly demanded the 1st defendant to clear the mortgage debt and secure the original title deeds, first defendant requested the plaintiff to pay further sum of Rs. 11,50,000/-, after due deliberations, plaintiff paid the said amount. They also contended that they were ready and willing to execute the sale deed in favour of plaintiff. There is fixation of time as stated in the plaint. Since plaintiffs did not come forward to fulfill the terms and conditions of the agreement of sale, they were constrained to issue legal notice dated 4.4.2005 by forfeiting the advance amount of Rs. 28,50,000/-. They denied that the time was fixed to execute the sale deed dated 1.6.2006, no efforts were made by the plaintiff in this regard. They denied the allegations in the plaint that plaintiff was always ready and willing to perform his part of the contract.

They denied the sale deed executed by them in favour of the third defendant as a sham transaction, they contend that the plaintiff has violated the terms and conditions of the agreement and therefore, they cancelled the agreement. There was no collusion between defendant Nos. 1 and 2 and third defendant as alleged. The first defendant has cancelled the agreement dated 15.7.2005 by issuing a notice dated 04.04.2006 and has forfeited the advance amount as the plaintiff has violated the terms and conditions of the sale agreement. There is no intention to cheat the plaintiff. They being duty bound citizens, agreed to return the 50% of the advance amount as per the notice dated 5.12.2006 to the plaintiff which shows the bona fide intention of the respondents. They have incurred heavy loss and mental harassment as the plaintiff has filed several false criminal cases against these defendants and the police have also arrested these defendants. Though these defendants have sold the schedule property to third defendant with the bona fide intention that too for meager amount as the plaintiff has refused to purchase the suit schedule property and violated the terms and conditions of the agreement dated 15.7.2005 and demanded more money from these defendants.

The third defendant has also filed a detailed written statement denying all the allegations in the plaint. The third defendant has pleaded complete ignorance about the execution of the agreement dated 15.7.2005 between the plaintiff and the defendants 1 and 2. The third defendant contended that she is not a party to the agreement and she is not aware of the same. Unless the sale in her favour is declared as null and void, specific performance is not permissible and such prayer is not sought for and therefore, the suit of the plaintiff is not maintainable.

The third defendant further stated that she is a bona fide purchaser and she has paid a total sum of Rs. 14,20,000/- for purchasing the schedule property. She has also collected Nil Encumbrance Certificate on the schedule property as on the date of purchasing the schedule property and all the other original documents before registering the schedule property. The sale deed takes away all the other unregistered agreements, therefore, the suit of the plaintiff based on the unregistered agreement dated 15.7.2005 is not maintainable.

Further, the third defendant has stated, the suit is filed after a considerable delay, that too after coming to know that the defendants 1 and 2 are not the present owners and are incapable of performing their part of the act, if at all the agreement dated 15.7.2005 had been entered into amongst themselves when an act cannot be performed, suit for specific performance has to be rejected. It is the plaintiff who has to show how the agreement dated 15.7.2005 or subsequent acts are within the knowledge of the third defendant. The plaintiff has also failed to prove as to why he has not collected the original documents from defendant Nos. 1 and 2 and when the plaintiff claims that he has paid such a huge amount. It is stated that plaintiff has not paid even a single paise to third defendant therefore, plaintiff cannot have any claim against third defendant. Third defendant has invested her money and she has no other house to live. Hence, she is a bona fide purchaser and therefore, she sought for dismissal of the suit.

On the aforesaid pleadings, the trial Court has framed the following issues which are as under:

"1. Whether the plaintiff proves that the defendants have entered into an agreement of sale on 15.7.2005 for a total sale consideration of Rs. 34,50,000/- and executed a written agreement?

Whether the plaintiff proves that he has issued three cheques amounting to a total sum of Rs. 7,25,000/- in favour of the defendant No. 2 at the instance of the defendant No. 1 on 08.01.2005?

Whether the plaintiff also proves that the defendant No. 1 has received a total sum of Rs. 32-00 lakhs on various dates as the advance sale consideration form him?

Whether the plaintiff proves that he was and is always ready and willing to perform his part of the contract?

Whether the plaintiff proves that on 29.12.2006 the defendants No. 1 and 2 have illegally executed a registered sale deed in favour of the defendant No. 3?

Whether the defendant No. 3 proves that she is a bona fide purchaser of the schedule property for value and without notice of the earlier sale agreement in favour of the plaintiff?

Whether the plaintiff is entitled for the relief of specific performance of the sale agreement dated 15.7.2005 against the defendants?

Whether the plaintiff proves that the sale deed dated 29.12.2006 in favour of the defendant No. 3 is null and void and not binding on the plaintiff?

Whether the plaintiff is entitled to evict the defendant No. 3 from the schedule "A" property?

In the alternative, whether the plaintiff is entitled for the advance sale consideration of Rs. 32,00,000/- together with the interest at the rat of 18% per annum from the date of the suit?

What decree or order?"

The plaintiff in order to substantiate his claim has examined himself as P.W. 1 and got examined five more attesting witnesses to the shara i.e. Sri. K. Mahanthasetty, Sri. K.R. Renukayya, Sri. B.M. Girish and Sri. Prashanth I.S as P.Ws. 2 to 6 and got marked Ex. P1 to P25. On behalf of the defendants, the 2nd defendant was examined as D.W. 1, third defendant as D.W. 2 and they have produced 14 documents which were marked as Ex. D1 to D14.

The trial Court, on appreciation of aforesaid oral and documentary evidence on record held that the plaintiff has proved that defendants 1 and 2 have entered into agreement of sale on 15.7.2005 for a total sale consideration of Rs. 34,50,000/- to purchase the schedule property. Further the plaintiff has proved that he had issued three cheques amounting in all Rs. 7,25,000/- in favour of the second defendant at the instance of first defendant on 8.1.2005. Further defendant Nos. 1 and 2 in all have received a sum of Rs. 32 lakhs on various dates as the advance sale consideration from the plaintiff. The plaintiff has further proved that he was always ready and willing to perform his part of the contract. The plaintiff has also proved that defendant Nos. 1 and 2 have executed the registered sale deed in favour of defendant No. 3 on 29.12.2006. Defendant No. 3 has failed to prove that she is a bona fide purchaser for a value and without noticing the earlier sale agreement in favour of plaintiff and the sale transaction is a sham transaction. The plaintiff has proved that the sale deed in favour of third defendant dated 29.12.2006 is null and void and not binding on the plaintiff. The plaintiff is entitled to recovery of possession from the third defendant. Thus, it decreed the suit of the plaintiff for specific performance from defendant Nos. 1 to 3 and directed to execute the sale deed in favour of plaintiff. The plaintiff was directed to deposit Rs. 25,000/- into Court within two months from the date of decree.

Aggrieved by the said Judgment and Decree of the trial Court, the third defendant has preferred this appeal. Though defendants 1 and 2 have suffered this decree, have not chosen to challenge this Judgment and Decree.

Learned counsel for appellant-third defendant assailing the impugned Judgment and Decree contended, there is no plea as required under Order 6 Rule 4 CPC. Regarding the third defendant having knowledge of the agreement of sale Ex. P2 before purchasing the property vide Ex. P23, and the evidence adduced through witnesses PWs 5, 2, 6 cannot be looked into without a plea. The plaintiff has failed to prove that he was ready and willing to perform his part of the contract. He has not issued any legal notice calling upon the defendant Nos. 1 and 2 to execute the sale deed and even after the cancellation of the agreement by defendant Nos. 1 and 2, he has not filed the suit immediately and therefore there is delay and latches in approaching the Court which dis-entitles him for decree for specific performance. Though consideration mentioned in Ex. P2 is Rs. 34,50,000/- and in Ex. P23, the third defendant has paid only Rs. 14,20,000/- as the first defendant purchased the property two years back only for a sum of Rs. 14,00,000/-. The consideration paid by her under sale deed is valid consideration. Even otherwise, in the appeal she has filed an application under Order 41 Rule 27 CPC for additional evidence. It shows apart from the consideration mentioned in the sale deed, she has paid money towards discharge of loan and to the payments are made to the tenants to vacate the premises. Therefore, he contends that consideration would not be a consideration to decide whether the property is purchased for a valuable consideration. He further submits, after purchase of the property it has been improved and third defendant is living with her family members. Defendants 1 and 2 have left her in lurch. Therefore, third defendant contended that the learned trial Judge has erred in ordering for specific performance and also for eviction from the property in question. Thus, the learned counsel submits, the appeal be allowed by setting aside the Judgment and Decree of the Trial Court.

Per contra, learned counsel appearing for plaintiff-respondent submits, the impugned Judgment is passed in accordance with law and there is no error.

In the light of the aforesaid rival contentions, the points that arise for our consideration in this appeal are:

"1. Whether the finding of trial Court that the plaintiff was ready and willing to perform his part of contract is vitiated as contended by the learned counsel for the third defendant?

Whether the suit for specific performance is not maintainable on the ground of delay and latches as contended?

Whether the finding of the trial Court that third defendant is not a bona fide purchaser for valuable consideration without noticing the agreement of sale calls for interference?

Whether a case is made out for allowing the application for additional evidence?"

Point No. 1:

It is not in dispute that the first defendant is the owner of the schedule property. She purchased the schedule property from one Renukaiah under a registered sale deed dated 17.7.2004 for a consideration of Rs. 14 lakhs. It is also not in dispute, first defendant had executed an agreement of sale as per Ex. P2 agreeing to sell the schedule property to the plaintiff for a consideration of Rs. 34,50,000/-. The recitals of the agreement and the admitted evidence on record demonstrate that at the time of agreement of sale, plaintiff had paid in all a sum of Rs. 7,25,000/- by way of three cheques to the second defendant on the instructions of the first defendant which was acknowledged as part of sale consideration under the agreement of sale Ex. P2. That apart, on the date of agreement of sale, further sum of Rs. 7,75,000/- was paid by way of cheque thus, the defendant Nos. 1 and 2 have acknowledged receipt of Rs. 15 lakhs under the agreement of sale. The period prescribed for completion of sale transaction was three months. The terms of the agreement make it clear, the balance sale consideration was to be paid by the plaintiff only after the defendants 1 and 2 make available the original documents of title after discharging the loans and get the tenants in the schedule property evicted and after paying the property tax, electricity and water bills.

If the time is the essence of the contract, the defendants 1 and 2 ought to have called up the plaintiff to pay the balance sale consideration and take the sale deed. On the contrary, the undisputed evidence on record shows, in order to meet the urgent needs and to pay tax and to get the tenants evicted, defendants 1 and 2 have requested the plaintiff to pay a sum of Rs. 2 lakhs as part of sale consideration which amount was paid by way of cheque on 12.8.2005. Even after payment of the said amount, taxes were not paid, the possession of the property from the tenant was not taken. When the plaintiff demanded the original title deeds then for the first time, defendant Nos. 1 and 2 disclose that the schedule property is mortgaged to Sri Subramanyeshwara Co-operative Bank, Vijayanagar as security for the loan borrowed by them from the Bank and a sum of Rs. 15,50,000/- is due from them to the Bank. The defendants 1 and 2 requested the plaintiff to pay Rs. 11,50,000/- to the said Bank on their behalf towards discharge of the loan so that, they would pay the balance amount of Rs. 4 lakhs to clear the loan and get the mortgage discharged and get the original title deeds. It is also not in dispute, as per the said request, an amount of Rs. 11,50,000/- was paid by cheque on 24.8.2005 to the Bank. The first defendant has acknowledged the aforesaid payment of Rs. 2 lakhs and Rs. 11,50,000/- in all an amount of Rs. 13,50,000/-. Thereafter, we find acknowledgement on the agreement of sale which shows pleading inability to execute the sale deed, it is the defendants 1 and 2 who have requested for two months time to execute a registered sale deed.

Subsequently, there is one more endorsement, where they agree to execute sale deed on or before 01.06.2006. Further, they assured by that payment they will evict the tenants from the schedule property. In the said endorsement they have acknowledged receipt of Rs. 32 lakhs. Said endorsement is also duly attested by the witnesses who have deposed before the court. This evidence on record clearly establishes that plaintiff had paid Rs. 32 lakhs out of Rs. 34,50,000/- and balance payable is hardly Rs. 2,50,000/-. Instead of receiving that amount and execute the sale deed, defendant No. 1 got issued the legal notice as per Ex. P15 admitting the execution of agreement of sale and informing the plaintiff of the time stipulated for completion of transaction was three months which has expired and he was already ready and willing to execute the sale deed by receiving the balance sale consideration within 15.10.2005 without extension of further time as the plaintiff did not come forward within the said period, the agreement of sale has been cancelled without any further notice by forfeiting the payment of advance amounting to Rs. 28,50,000/-. Thus, in the said legal notice the endorsement made for payment received after the period of three months in the agreement are all suppressed. On receipt of legal notice, the plaintiff got a reply notice sent as per Ex. P16, on 22.5.2006 contending time was not the essence of the contract, giving full particulars of the payments made by him prior to three months period and payments made subsequent to three months period which is received by defendants and that he was ready and willing to pay Rs. 2,50,000/- balance amount to which the defendant is entitled only after performing her part of the contract. Therefore, he called upon the defendants to clear the loan due to Sri Subramanyashwara Co-operative Bank to get the mortgage discharged and produce the original documents and to get the tenants evicted from the schedule property. Defendant had to receive the balance sale consideration on or before 1.6.2006. The date fixed for completion of the sale transaction is extended as per the endorsement.

The said reply notice was duly acknowledged and the reply was sent. Though they have referred to police complaints and then on humanitarian grounds they were willing to forfeit 50% of the advance amount and called upon the plaintiff not to take any further step pursuant to the complaint, it is after the said reply it became clear that the defendants 1 and 2 are not willing to perform their part of the contract and they refused to execute the same and thus, the plaintiff brought the suit for specific performance on 22.2.2007.

The said sequence of events would clearly demonstrate that the plaintiff was ready and willing to perform his part of contract. Even though the balance sale consideration of Rs. 19,50,000/- has to be paid only after defendant No. 1 clears the amounts due to the Bank and tenants to be evicted and also all the tax dues should be paid, at their request, he has paid Rs. 17,00,000/- and thus the balance payable was only Rs. 2,50,000/-.

Having received the amount, extended period of completion of the sale transaction fixing the date as 1.6.2006, defendant No. 1 gets a legal notice issued canceling the agreement accusing plaintiff of not performing his part of contract. Undisputed oral and documentary evidence on record clearly demonstrates plaintiff, in fact, had performed substantially his part of contract and all that he had to pay is the balance sale consideration of Rs. 2,50,000/- and take the sale deed. It is on consideration of this evidence on record, the trial Court was justified in holding that the plaintiff was ready and willing to perform his part of contract and in decreeing the suit for specific performance. In that view of the matter, we do not see any merit in the contention of appellant-third defendant that the plaintiff has failed to prove his readiness and willingness.

Point No. 2:

In so far as delay and latches is concerned, the sequence of dates set out clearly show after paying Rs. 15 lakhs even though plaintiff was not expected to pay any consideration till the first defendant performed her part of contract, on the request of the defendants, a further amount of Rs. 17 lakhs was paid and the date for performance was fixed on 01.06.2006. Before that date, Ex. P16 was issued on 22.5.2006. A suitable reply was sent on 04.04.2006 Ex. (P15) where time was given to the first defendant to perform her part of contract as set out in the said notice which is a sina-qua-non for the plaintiff to pay the balance sale consideration and take the sale deed. Though said reply was acknowledged, the defendants neither completed the agreement of sale nor took steps to execute the sale deed, on the contrary 50% of the amount was forfeited, thereby making it very clear that she is not willing to execute the sale deed. Therefore, without any further delay there from, the suit is filed on 22.2.2007. Therefore, the argument that the suit for specific performance is not maintainable on the ground of delay and latches on the face of it is without any substance and merit. Point No. 2 is ordered accordingly.

Point No. 3:

The consideration agreed to be paid under the agreement of sale-Ex. P2 by the plaintiff to defendants 1 and 2 is Rs. 34,50,000/-. Out of the said consideration, Rs. 32,00,000/- has been paid. The date of agreement is 15.7.2005. In fact, the said property was purchased by defendant No. 1 under a registered sale deed dated 17.7.2004 from one Renukaiah for a consideration of Rs. 14,00,000/-. In fact, the evidence on record discloses that out of the total sale consideration the balance of Rs. 1,00,000/- had not been paid to him by the first defendant. It is the plaintiff who paid Rs. 1,00,000/- which is treated as a part of the sale consideration and that said Renukaiah is one of the attesting witnesses to Ex. P2.

From these undisputed facts it is clear that the property which is worth Rs. 14,00,000/- on 17.7.2004 was agreed to be sold to the plaintiffs for a consideration of Rs. 34,50,000/- on 15.7.2005. In fact, to be precise, on 8.7.2005 the parties agreed and a sum of Rs. 7,25,000/- was paid. Therefore, the schedule property was valued at Rs. 34,50,000/- as on 15.7.2005. After receiving Rs. 32,00,000/- from the plaintiff, defendant Nos. 1 and 2 agreed to sell the schedule property in favour of PW-5 Prashanth under an agreement of sale dated 20.9.2006 for a consideration of Rs. 45,60,000/-. Therefore, in a span of one year from the date of the suit agreement, the value of the property was increased by Rs. 10,00,000/-. The evidence of PW5-the purchaser under the said agreement which is marked as Ex. P24 shows the said agreement came to be cancelled on 1.12.2006 after the advance amount paid under the agreement was refunded by way of a cheque. However, the cheque was bounced. Therefore, PW5 was constrained to file the suit O.S. No. 4254/2006 for recovery of the said amount. It is in this background, we have to find out whether the sale deed executed by the first defendant in favour of the third defendant on 29.12.2006 for a consideration of Rs. 14,20,000/- could be construed as a purchase by a bona fide purchaser for a valuable consideration.

When the first and second defendants already received Rs. 32,00,000/- from the plaintiff and a sum of Rs. 5,00,000/- was received by them under a subsequent agreement from PW5 and if they are intending to sell the property to the third defendant for a sum of Rs. 14,20,000/- from the said amount they could not have repaid the amounts which are due to the plaintiff or to PW5. The defence is, as the plaintiff committed default, the token advance paid was forfeited. By a subsequent notice as per Ex. P17, 50% was agreed to be repaid. The sale consideration received under Ex. P23 would not be sufficient to repay even the 50% of the amount which they intended to repay as per Ex. P17. Therefore, from the said consideration mentioned in the sale deed, it is clear that the amount mentioned in the sale deed does not represent the real value of the property agreed to be sold. In fact, realizing this fact, now an attempt is made by the appellant to produce additional evidence in this appeal. In this regard he has filed an application. The additional evidence sought to be produced are, katha extract showing that Bangalore Mahanagara Palike has made out katha in his name and that he had paid monies towards discharge of the loans by him on behalf of the first defendant, i.e., a sum of Rs. 16,60,000/- was paid and also a payment of Rs. 22,500/- to the Karnataka State Co-operative Apex Bank Limited and the tax paid receipts. Therefore, it is clear even according to the third defendant, the amount reflected in the sale deed Ex. P23 does not represent a valuable consideration for the sale of the schedule property. Section 19 of the Specific Relief Act, 1963 states that, except as otherwise provided by this Chapter, specific performance of a contract may be enforced against any other person claiming title arising subsequently to the contract. The only exception carved out was such a purchaser who claims title is a transferee for value who paid his money in good faith and without notice of the earlier contract. Therefore, in order to get over the effect of Section 19 of the Act, the subsequent purchaser has to establish that he is a transferee for value in good faith and without notice of the earlier contract. If both these conditions are fulfilled, then notwithstanding the earlier contract, specific performance cannot be enforced. A person who has paid Rs. 14,20,000/- for a property which is worth Rs. 34,50,000/- in 2005 and Rs. 44,60,000/- in 2006 cannot said to be a bona fide purchaser for value. It cannot be said he has paid Rs. 14,20,000/- in good faith. Therefore, the first condition is not satisfied.

In so far as notice of earlier agreement is concerned, no doubt the suit agreement is not registered. The transferee under the suit agreement was not put in possession of the property. It was in the possession of the defendants. But, nonetheless the additional evidence sought to be produced by the third defendant shows the said property was mortgaged to the Apex Bank and a sum of Rs. 16,60,000/- is to be paid for discharge of the debt. The property was in the occupation of the tenants. In fact, the evidence on record shows that, though the plaintiff paid Rs. 11,50,000/- to the Subramanya Cooperative Bank and defendant No. 1 failed to pay Rs. 4,00,000/- and got the loan discharged. The rule is Caveat Emptor, purchaser must be aware. If only the third defendant had made enquiries in this regard diligently, at least he could have known the character of the person with whom he is dealing with. Here is a lady who does not even completely pay the vendor from whom the property is purchased, before the property could be transferred to her name, she enters into an agreement with the plaintiff, she receives Rs. 32,00,000/- out of Rs. 34,50,000/- - the total sale consideration, after canceling the said agreement, he enters into agreement with PW5 to sell the same property for a consideration of Rs. 44,60,000/-, probably that purchaser was alert and after knowing the background he sought for cancellation and return of Rs. 5,00,000/- which was paid by way of cheque which was dishonoured for which he had to file a suit to recover the amount. In this background, when the third defendant were to plead he is a bona fide purchaser, he approached the first defendant to purchase the property for valuable consideration, the facts in this case do not support that case. Having failed in his effort to make out his case before the trial Court, an attempt is made to persuade this Court to accept his contention by looking into the additional evidence sought to be produced. All that the additional evidence shows is, he has paid Rs. 16,60,000/- and another Rs. 22,500/- and paid taxes to the Corporation, got the katha transferred, all these documents are of no relevance in deciding whether the plaintiff is entitled to a decree for specific performance and certainly they cannot be looked into. This is the additional consideration to be paid apart from the consideration mentioned in the sale deed. It is on record that the third defendant is an income tax payee. She is not willing to pay the market price or the agreed price and purchase the property, deliberately they undervalued the property, the sub-registrar initiates the proceedings for under valuation and according to him the property is worth about Rs. 20,00,000/- and they have to pay an additional stamp duty of Rs. 62,000/- and odd. All these conduct shows not only the third defendant is not a bona fide purchaser she is also equally unclean as is the first defendant in dealing with the properties as well as authorities. In fact, the evidence of PW5 and 6 to be believed, when the first defendant cheated the plaintiff as she had given cheques worth Rs. 32,00,000/- as a conditional security and got bounced, he was forced to lodge a police complaint. The husband and wife were arrested. They were in police custody. The further evidence on record shows that the second defendant after closing his bank account has issued the cheques as security which they came to know only after the dishonour of the cheques. It is not the case of defendants 1 and 2 this Rs. 32,00,000/- was received by them as a loan and as a security either the property was given or the cheques were given. Their specific case is, they had entered into an agreement of sale, the consideration agreed upon was Rs. 34,00,000/-, Rs. 32,00,000/- is paid under the agreement which is duly cancelled and because the plaintiff did not perform his part of contract within the period of three months, as the time was the essence of the contract, they cancelled the agreement. The evidence on record shows even after three months though the plaintiff was not expected to pay any further amount, at the request of defendants 1 and 2 he has parted with Rs. 17,00,000/- and after receiving Rs. 17,00,000/- the agreement is cancelled on the ground that time being the essence of the contract. It is very difficult to believe that the third defendant is completely ignorant about this transaction. The evidence on record shows the third defendant is also a party to these transactions. Now, the defendants 1 and 2 having suffered a decree and having received money from the third defendant also they are not interested in contesting the matter. They have not challenged the judgment and decree. Even before this Court they conveniently left it to defendant No. 3 to contest the matter. In that view of the matter, we are satisfied with the finding recorded by the trial Court that the third defendant is not a bona fide purchaser for valuable consideration, without notice of the earlier agreement is correct and we affirm the said finding.

Point No. 4:

The additional documents sought to be produced in this appeal is relied upon to demonstrate that, in addition to the consideration mentioned in the sale deed, the appellant has paid the amounts mentioned towards discharge of loan and payments made to the tenants to vacate the premises. If these amounts are taken into consideration and added to Rs. 14,00,000/-, the consideration mentioned in the sale deed, it only shows a valuable consideration is paid for purchase of the property.

We do not find any substance in the said contention. In the suit the third defendant has not whispered about the aforesaid payments. Even otherwise, the Court cannot take note of the aforesaid payments made de hors the sale deed. In that view of the matter, we are of the view that the aforesaid documents could in no way help us in deciding the case on merits. As such, the application for additional evidence is dismissed.

Hence, we pass the following order:--

"Appeal is dismissed.

For the reasons stated above, we do not see any good reason or sufficient cause for allowing I.A. 1/2015 for production of additional documents.

Parties to bear their own costs."