Smt. Khishna Devi and Others vs Shiv Dev Singh and Others

Rajeidra Nath Mittai, J.—This first appeal has been filed by defendants Nos. 2 to 4 against the judgment and decree of the Subordinate Judge 1st Class, Gurdaspur, dated 24th February, 1975.

Briefly, the facts are that Baldev Raj defendant No. 1 was the owner of the property in dispute. He entered into an agreement to sell it for a sum of Rs 50,000/- with the plaintiffs, vide agreement dated 26th January, 1973. An amount of Rs. 16,000/- was received in cash by him from the plaintiffs as earnest money, a sum of Rs. 28,000/- waj to be adjusted by the plaintiffs towards the mortgage amount and the balance amount of Rs. 6,000/- was to be received by him in cash at the time of registration of the sale deed The sale-deed was to be executed by the defendant on or before 15th Jeth 2030 B. K. (28th May, 1973). It is averred by the plaintiffs that they went before the Sub-Registrar, Gurdaspur, on 28th May, 1973, with the requisite amount of Rs. 6,000/ for getting the sale-deed executed and registered in their favour but the defendant did not turn up there Defendants Nos. 2 to 4, who purchased the land from him subsequently, were not bona fide purchasers for value without notice of the agreement in favour of the plaintiffs. The plaintiffs, it is averred, have always-been and are still ready and willing to perform their part of the agreement but defendant No 1 committed breach thereof. Consequently, they filed a suit for specific performance.

Defendant No. 1 did not appear and was proceeded against ex-parte. Defendants Nos. 2 to 4, the subsequent purchasers, contested the suit and controverted the allegations of the plaintiffs They inter-alia pleaded that defendant No. 1 agreed to sell the land to defendant No 2 vide agreement dated 9th April, 1973, for a consideration of Rs. 50,000/-. Subsequently, two sale-deeds were got executed for a consideration of Rs. 25,000/- each, one in favour of defendant No. 2 and the other in favour of defendants Nos. 3 and 4, minor sons of defendant No. 2. They pleaded that they were bona fide purchasers for consideration without notice of the agreement of sale in favour of the plaintiffs They also denied that the plaintiffs entered into any agreement with defendant No. 1 and that the plaintiffs were ready and willing to perform their part of the agreement.

The trial Court held that defendant No. 1 agreed to sell the land to the plaintiffs vide agreement dated 26th January, 1973, that the plaintiffs had always been and were still ready and willing to perform their part of the agreement and that defendants Nos. 2 to 4 did not act bona fide in purchasing the land. Consequently, it decreed the suit of the plaintiffs. Defendants Nos. 2 to 4 have come up in appeal to this Court.

The first contention of Mr Anand Swaroop is that the plaintiffs were not ready and willing to perform their part of the contract. He submits that they even did not pay the consideration of Rs. 16,000/- at the time of execution of the agreement dated 26th January. 1973, and they had not the balance amount with them on 28th May, 1973, the last date fixed for execution of the sale-deed.

I have given due consideration to the argument but regret my inability to accept it The plaintiffs, in order to prove the execution of the agreement and payment of the amount of Rs. 16,C00/- at the time of the agreement produced Khazan Singh P. W. 1, the attesting witness of the agreement. He proved the agreement and stated that Rs. 16.000/- were paid by the plaintiffs as earnest money to defendant No 1 at the time of its execution. Besides, Shivdev Singh plaintiff appeared as a witness and supported the statement of Khazare Singh. No evidence was produced by the defendants in rebuttal. There are no grounds to disbelieve the statements of Khazan Singh and the said plaintiff. In the agreement, Exhibit P. 1, also, it is mentioned that the sum of Rs. 16,000/- was paid by the plaintiffs to defendant No. 1 From the aforesaid evidence, the payment of Rs. 16,000/- by the plaintiffs to defendant No. 1 stands amply proved. Regarding the question as to whether the plaintiffs had the balance amount of Rs 6,000/- with them for payment before the Sub-Registrar at the tine of execution of the sale deed or not, there is the statement of Shivdev Singh plaintiff to the effect that he had with him tie requisite amount for payment to defendant No 1 and meeting the sale expenses, when he went to the office of the Sub-Registrar on 28th May, 1983, with an expectation that the vendor would come to complete the sale. He also made an application to the Sub-Registrar and got his presence recorded. This fact is indicative of the plaintiffs'' desire to perform their part of the agreement. No evidence has been led by the defendants that the plaintiffs had not with them the requisite amount. Therefore, I repel the contention of Mr. Anand Swaroop that the plaintiffs did not have the balance amount with them on 28th May, 1971.

Now, the question arises whether the plaintiffs were ready and willing to perform their part of the agreement It has already been noticed above that the plaintiffs had paid Rs 16,000/- at the time of the agreement and the balance of Rs. 6,000/- was with Shivdev Singh plaintiff, when he went to the office of the Sub Registrar for completion of the sale Shivdev Singh in his statement said that the plaintiffs were ready and willing to perform their part of the agreement. There are no grounds to disbelieve his statement He also got his presence recorded by the Sub-Registrar on 28th May, 1973, the last date for execution of the sale-deed, as is clear from Exhibit P. 5, the order of the Sub-Registrar on his application Even thereafter the plaintiffs waited for the vendor to come to the village and execute the sale deed in their favour Ultimately, they sent a registered notice to defendant No. I on 23rd November, 1973, asking him to perform his part of the agreement The notice could not be served upon him as he was a truck driver and was not available at the address mentioned in the notice. These facts go to show that the plaintiffs were anxious to get The sale deed executed in their favour. They even instituted the present suit in the first week of December, 1973. After taking into consideration all the above said circumstances, I am of the opinion that the plaintiffs were always and are still ready and willing to perform their part of the agreement.

Mr. Anand Swaroop has next argued that the defendants were bona fide purchasers for value and without notice of the agreement in favour of the plaintiffs He submits that the plaintiffs were in possession of the land as mortgagees about which they were informed by defendant No 1, and therefore no duty was cast upon them to make inquiry from the plaintiffs regarding the nature of their possession.

On the other hand, Mr. Puri, learned counsel for the respondents has streneously argued that it was the duty of the appellants to make inquiry from the plaintiffs regarding the nature of their possession in order to get the benefit of section 19(b) of the Specific Relief Act.

I have duly considered the arguments of the learned counsel for the parties Section 19(b) of the said Act provides that specific performance of a contract maybe enforced against any other person claiming under the vendor by a title arising subsequently to the contract except a transferee for value who has paid his money in good faith and without notice of the original contract. The section has been interpreted by various High Courts, including this High Court. In Faki Ibrahim v Faki Gulam Mohidin A.I.R 1921 Bom. 459, section 27 of the Specific Relief Act, 1877, was interpreted It was couched in the same language as section 19 ibid. The Bench observed there that the purchaser having. knowledge of the plaintiff''s being in possession as mortgagee and having made no inquiry as to why he was in possession must be taken to have constructive notice of all the equities in the plaintiff''s favour While coming to that conclusion, the learned Bench followed the following observations of a leading English case, Daniels v. Davison 10 R.R. 171:

Where there was a tenant in possession under a lease, or an agreement, a person, purchasing part of the estate, must be bound to inquire, on what terms that person was in possession that this tenant being in possession under a lease, with an agreement in his pocket to become the purchaser, those circumstances altogether gave him an equity repelling the claim of a subsequent purchaser, who made no inquiry as to the nature of his possession." This case was followed in Ramdeni Singh and Another Vs. Gumani Raut and Another, and Parvathathammal Vs. Sivasankara Bhattar and Others, . It was held in the former case that where the plaintiff claiming under prior contract was admittedly in possession it was the bounden duty of the subsequent transferees to inquire from the plaintiff as regards the nature of his possession before they can be held to be bona fide purchasers for value. Similar observations were made in the other case referred to above. It may be highlighted that in both the cases, the plaintiffs were in possession as mortgagees. Similar view was taken by a Division Bench of this Court in R. F. A. No. 95 of 1960 (Kishan Chand v. Mishan Lal etc. R.F.A. 95 of 1960, decided on 3rd February, 1969.

Learned counsel for the appellants made a reference to Dhadi Dalai Vs. Basudeb Satpathy and Others, Shankar Prasad v. Mt Mimeshwari etc. AIR 1969 Pat 04, and Rom Bilas Ojha and others v. Bishwa Muni (1979) I.S. C.C. 21. In Dhadi Dalai''s case, (supra), the plaintiff was not in possession of the property either as a mortgagee or as a tenant. In Shankar Prasad''s case (supra), the plaintiff as well as the subsequent purchaser was in possession of house as tenant. It was held that in the facts and circumstances of the case, the subsequent purchaser was already aware of the nature of possession of the plaintiff as a tenant. It is, therefore, evident that in both the cases the facts were different and Mr Anand Swaroop cannot derive any benefit from the observations made therein. In Ram Bilas Ojha''s case (supra), even the Supreme Court observed that the registered usufructuary mortgage should have put the subsequent purchasers in notice of the possession of the plaintiff-respondents.

Therefore, I am of the view that normally a, subsequent purchaser cannot be said to have acted in goodfaith if he does not make inquiry at the time of purchase of the property from the person who is in its possession, either as a mortgagee or a tenant, as to the nature of his possession. The subsequent purchaser is entitled to the benefit of section 19(b) ibid if he mades the inquiry from the person in possession.

There is evidence that the appellants knew that the plaintiff respondents were in possession of the land. It, therefore, became necessary for them to have made inquiry from the plaintiffs before purchasing it. It was sought to be contended by Mr. Anand Swaroop that the appellants were living in Pahewa from where they came two days prior to the execution of the sale deed. According to him, the fact of mortgage was to their knowledge and, therefore, it was net necessary for them to make an inquiry from the plaintiff-respondents. I do not find any substance in this submission. In case they were residing at a long distance from the place where the land was situated, it did not absolve them: from making an inquiry from the plaintiffs.

For the aforesaid reasons, I do not find any merit in the appeal and dismiss the same with costs.

Appeal dismissed.