Piroji vs Nandkumar and Others

B.V. Nagarathna, J.—1. Defendant No. 3 in O.S. No. 75/2006 has preferred this second appeal, assailing judgment and decree passed in R.A. No. 68/2009 dated 06.01.2014 by I Additional District and Sessions Judge, Dharwad sitting at Hubli, confirming judgment and decree dated 27.02.2009 passed in O.S. No. 75/2006 by Prl. Civil Judge (Sr. Dn.), Hubli.

For the sake of convenience, parties shall be referred to, in terms of their status before the trial Court.

First respondent - plaintiff instituted O.S. No. 75/2006 for specific performance of an agreement to sell dated 05.08.2003 in respect of suit schedule property. According to plaintiff, suit schedule property is an agricultural land bearing Block No. 163/3 measuring 2 acres 26 guntas situated at Devara Gudihal village, Hubli. Defendant No. 1 had agreed to sell the property to plaintiff for a valuable consideration of Rs. 3,00,000/- and had accepted advance sale consideration of Rs. 2,00,000/-. The balance sale consideration of Rs. 1,00,000/- was to be paid at the time of registration of sale deed. That the entire transaction was to be completed within a period of six months from 05.08.2003. Plaintiff, thereafter, requested defendant on several occasions to execute a regular sale deed by accepting balance sale consideration. He contended that he was ready and willing to perform his part of contract. But, to the shock and surprise of plaintiff, defendant No. 1 suppressing certain facts to plaintiff, had executed a sale deed dated 28.02.2005 (for a sum of Rs. 1,79,000/-) in favour of defendant No. 2. This fact came to the knowledge of plaintiff in February 2006. After obtaining copy of sale deed executed by defendant No. 1 in favour of defendant No. 2, plaintiff instituted suit for specific performance of agreement to sell dated 05.08.2003.

Plaintiff contended that defendant No. 2 is not a bona fide purchaser for consideration without notice as the agreement to sell dated 05.08.2003 was a registered document, registered in the office of Sub-Registrar, Hubli, and that defendant No. 2 at his own risk and consequences had purchased property from defendant No. 1 under a registered sale deed on 28.02.2005. According to plaintiffs, both defendants No. 1 and 2 had to be directed to execute a sale deed in favour of plaintiff by accepting balance sale consideration of Rs. 1,00,000/-. Subsequently, defendant No. 3 was impleaded by plaintiff as defendant No. 1 had also entered into an agreement to sell the suit land in favour of defendant No. 3 for a consideration of Rs. 2,55,000/-.

Defendants appeared and defendant No. 1 filed written statement, but defendants No. 2 and 3 did not file any written statement.

Defendant No. 1 denied that he had offered his property for sale and that the plaintiff had agreed to purchase it for a sum of Rs. 3,00,000/- and that a registered instrument of sale was executed in favour of the plaintiff before the Sub-Registrar, Hubli, on 5.8.2003 and that he had received a sum of Rs. 2,00,000/- as advance sale consideration and a regular sale deed was to be registered within a period of six months from 05.08.2003 on receiving balance sale consideration. It is further denied that the plaintiff had made repeated requests for execution of the sale deed or that there was any suppression of sale made by defendant No. 1 in favour of defendant No. 2 vis-�-vis very same suit properties. It was contended that the 2nd defendant was a bona fide purchaser for consideration without notice of the earlier agreement to sell dated 05.08.2003 executed by defendant No. 1 in favour of the plaintiff. Defendant No. 1 further contended that he had not accepted the terms of agreement of sale dated 05.08.2003 and that there was no cause of action for filing suit. It was also contended that the suit property was joint family property and the suit was not maintainable without impleading the father of defendant No. 1 who had a share in the suit property as defendant in the suit. Contending that the plaintiff was not entitled to any relief, the first defendant sought for dismissal of the suit. It was also contended that the 2nd defendant had purchased the suit property for a valuable consideration of Rs. 1,79,000/- under registered sale deed executed by defendant No. 1 in favour of the 2nd defendant on 28.02.2005 and that the 2nd defendant was in possession and enjoyment of the suit property.

On the basis of the aforesaid pleading the trial court framed the following issues for its consideration:

Whether the plaintiff proves that the first defendant agreed to sell suit property for a sum of Rs. 3,00,000/- and received Rs. 2,00,000/- in the presence of Sub-Registrar, Hubli, and executed and registered an agreement dated 05.08.2003 as contended in the plaint?

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

Is the plaintiff entitled for specific performance of the agreement of sale and in the alternative entitled for return of sale consideration of Rs. 2,00,000/- along with interest at 18% per annum from the defendants?

Whether the first defendant proves that he is not the only owner of the suit property, whereas his father is the owner of the suit property and he has not received sum of Rs. 2,00,000/- as part of sale consideration in furtherance of the agreement of sale dated 5.8.2003 and hence he is not liable to execute the sale deed in favour of the Plaintiff as contended in para 11 of the written statement?

Whether the defendant No. 1 proves that the suit valued is not proper, Court fee paid is insufficient?

Is the suit barred by law of Limitation?

To whom the comparative hardship will be more in case of granting or refusing the decree for specific performance of the sale agreement?

To what order or decree the parties are entitled to?

In support of his case, plaintiff examined himself as PW. 1 and two other witnesses as PWs. 2 and 3. Plaintiff produced six documents which were marked as Ex. P. 1 to P. 6, while defendant No. 1 examined himself as D.W. 1. He produced three documents which were marked as Ex. D. 1 to D. 3.

On the basis of the said evidence, Trial Court answered Issue Nos. 1 to 3 in affirmative and issue Nos. 4 to 6 in negative and held on issue No. 7 that plaintiff would be put to greater hardship if decree of specific performance of sale agreement was not granted and accordingly decreed the suit, directing defendants-1 and 2 to execute registered sale deed in favour of the plaintiff by receiving balance sale consideration of Rs. 1,00,000/- and to hand-over actual and physical possession of the suit property to him, stating that in the event of such denial to execute the sale deed in favour of the plaintiff, latter was at liberty to get the sale deed executed through Court Commissioner.

Being aggrieved by the judgment and decree of the Trial Court dated 27.02.2009 defendant No. 3 filed R.A. No. 68/2009 before First Appellate Court. At this stage itself it could be observed, that defendants 1 and 2 against whom decree was passed did not assail the same in any further proceedings filed by them. First Appellate Court, after hearing the respective parties framed the following points for its consideration:

Whether the plaintiff proves that defendant No. 1 has agreed to sell the suit property by executing the registered agreement dated 5.8.2003 on receiving Rs. 2,00,000/- as advance amount and he has agreed to execute the sale deed on receiving balance amount?

Does he prove that he has been always ready and willing to perform his part of contract?

Is he entitled for decree for specific performance as prayed in the suit?

Does appellant proves that the impugned judgment and decree is illegal and perverse one and the same is liable to be set aside by this Court sitting in appeal?

What order?

It answered Point Nos. 1 to 3 in the affirmative and Point No. 4 in the negative and dismissed the appeal filed by defendant No. 3 and confirmed the judgment and decree dated 27.02.2009 passed by the trial court.

Being aggrieved by the judgment and decree of the First Appellate Court, defendant No. 3 has preferred this Second Appeal.

I have heard learned Counsel for the appellant and learned Counsel for the Caveator/respondent-1 and perused the material on record.

It is contended on behalf of the appellant, that the courts below were not justified in decreeing the suit as against defendants 1 and 2. No doubt, they did not prefer any appeal assailing the judgment of the Trial Court. But defendant No. 3 had filed the appeal assailing the judgment and decree of the trial court. Before the First Appellate Court, an application under Order XLI Rule 27 of CPC was filed by appellant herein, seeking to let-in additional evidence. But the First Appellate Court did not pass any order on the said application and simply dismissed the appeal. He contended that although no decree was passed as against the appellant by the trial court, before the First Appellate Court the appellant herein had filed an application under Order XLI Rule 27 CPC and the First Appellate Court ought to have allowed the said application by considering the same favourably. Hence, in the absence of any order being passed on the said application the appeal having been dismissed, prejudice has been caused to the appellant herein. He further submitted that the judgments of the courts below are not in accordance with law and that substantial questions of law would arise in this appeal which require a detailed consideration of the matter on admission of the same.

Per contra, learned Counsel for the respondent, contended that the judgments of the courts below would not call for any interference especially at the hands of the appellant herein who was defendant No. 3 in the trial court. He did not file any written statement and he did not take any steps to cross-examine the plaintiff, No evidence could have been let in by appellant during the trial, No decree was passed against him and hence, he had no right to assail the judgment of the trial court. However, defendant No. 3 chose to file the Regular Appeal before the first appellate court which has rightly dismissed the appeal. He contended that when the appeal itself was not maintainable at the hands of the defendant No. 3, no grievance could be made with regard to non-consideration of application filed under Order XLI Rule 27 CPC. He further contends that there is no merit in the appeal and the same may be dismissed.

Having heard learned Counsel for the parties and on perusal of the material on record it is noted at the outset, that the plaintiff had filed a suit seeking specific performance of the agreement to sell the suit schedule property dated 05.08.2003. It is case of the plaintiff that the suit property was agreed to be sold to him by defendant No. 1 for a valuable consideration of Rs. 3 lakhs and that on the date the agreement was executed by the defendant No. 1, a sum of Rs. 2 lakhs was paid as advance sale consideration. That the sale transaction was to be completed within a period of six months from 05.08.2003 on receipt of balance sale consideration. In the suit filed by the plaintiff, it has also come in evidence that the very same suit properties were sold under registered sale deed by defendant No. 1 in favour of defendant No. 2 for consideration of Rs. 1,79,000/-, the sale deed having been registered on 28.02.2005. Therefore, it is established that the 1st defendant had sold the suit schedule property to the 2nd defendant after entering into an agreement to sell in favour of plaintiff. It was averred by defendant No. 1 in the written statement that the 2nd defendant was a bona fide purchaser without notice of earlier transaction entered into by defendant No. 1 in favour of plaintiff by execution of agreement to sell dated 05.08.2003. Such a contention was rightly not accepted by the trial court for the simple reason, that the agreement to sell dated 5.8.2003 was a registered instrument and therefore, the 2nd defendant had constructive notice of the said agreement.

As far as defendant No. 3 is concerned, his case is that he never filed any written statement. But the evidence on record states that defendant No. 1 had entered into an agreement to sell dated 10.2.2003 with defendant No. 3 for selling the very property for a sum of Rs. 2,55,000/-. It is in such a situation, defendant No. 3 was subsequently impleaded in the suit. The fact remains that defendant No. 3 did not file any written statement. He did not contest the suit. He did not choose to cross-examine the plaintiff. Taking note of these facts the trial court while decreeing the suit directed only defendant Nos. 1 and 2 to execute the sale deed in favour of plaintiff on acceptance of balance sale consideration. The reason being, registered sale deed in respect of the properties had already been executed in favour of defendant No. 2 by defendant No. 1 on 28.02.2005. Whereas defendant No. 3 was only an agreement holder who had now chosen to contest the suit. Therefore, no decree was passed as against defendant No. 3. Strangely, defendant Nos. 1 and 2 against whom decree was passed did not assail it before the I Appellate Court or before any forum. Thus they have accepted the decree against them. But, defendant No. 3 against whom no decree was passed, challenged the judgment and decree of the Trial Court in Appeal.

It is also noted that defendant No. 3 who assailed the trial court judgment had not even filed written statement before the Trial Court, but before the I Appellate Court he filed an application I.A.I. under Order XLI Rule 27 CPC in order to bring on record the fact that the 1st defendant had executed a sale deed in favour of defendant No. 3 on 25.08.2006 pursuant to agreement to sell entered into on 11.02.2003 for a consideration of Rs. 2,55,000/-. The grievance of the appellant herein is that the said application was not taken up for consideration and no orders were passed on that application. Having regard to the detailed narration of the facts and the manner in which the trial court has proceeded and non-participation of defendant No. 3 in the suit before trial court, strangely, defendant No. 3 wanted to let in additional evidence by contending that he was the title holder of the suit schedule properties. In my view, there was no reason to consider the application filed under Order XLI Rule 27 CPC by defendant No. 3 before the I Appellate Court for the simple reason that the appeal filed by defendant No. 3 was not maintainable for two reasons: firstly, because no decree was passed against him by the Trial Court and secondly, because defendant No. 3 had not contested the suit and there was no observation against defendant-3 in the judgment of the trial court. Assuming for a moment, that the appeal filed by defendant No. 3 was maintainable, it was not necessary to consider the application filed under Order XLI Rule 27 CPC for the purpose of passing orders therein for the simple reason that on 25.8.2006 on which date defendant No. 3 claimed to have purchased the suit schedule property from defendant No. 1, on that date defendant No. 1 had no right, title or interest to sell the suit property to him. Because even prior to that on 28.2.2005 defendant No. 1 had sold the suit schedule property in favour of defendant No. 2. Therefore, if at all defendant No. 3 has any grievance it is not against the plaintiff, it is against defendant No. 1 for having sold the suit properties to him without having right, title and interest therein. Possibly, it is on account of these facts that courts below have noted that there was collusion between defendants so as to ensure that the rights of the plaintiff vis-�-vis suit properties were defeated.

Both the trial court as well as the I appellate court have gone into questions which are relevant with regard to decreeing of the suit for specific performance of contract. Both the courts have held that the plaintiff was ready and willing to perform his part of contract. 2/3rd of sale consideration i.e. Rs. 2 lakhs was already accepted by the defendant No. 1 at the time of execution of agreement to sell to the plaintiff on 05.8.2003. Only balance sale consideration of Rs. 1 lakh had to be paid at the time of execution of the sale deed. The discretion exercised by the courts below in favour of plaintiff is sound and judicious which would not call for any interference by this court, which in Second Appeal cannot take a different view of the matter. In the circumstances, I find no lacunae in the judgments and decrees of the courts below.

No substantial questions of law arise in the appeal. The appeal is dismissed.

Parties to bear their respective costs.