Madras High Court
K.Rajendran vs K.Chinnappa Gounder on 16 September, 2014
Author: A.Selvam
Bench: A.Selvam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 16.09.2014
CORAM
THE HONOURABLE MR.JUSTICE A.SELVAM
AS.No.857 of 2003
K.Rajendran .. Appellant/2nd Defendant
Vs.
1.K.Chinnappa Gounder .. Respondent/Plaintiff
2.G.K.Rajalakshmi .. Respondent/1st Defendant
Appeal Suit filed under section 96 of CPC against the Judgment and
decree dated 31.07.2003 passed in Original Suit No.33 of 2002 by the District
Court, Karur.
!For Appellant : Mr.S.Parthasarathy
Senior counsel
for Mr.K.Govindarajan
^For R ? 1 : M/s.N.Krishnaveni
For R ? 2 : Mr.G.R.Swaminathan
for Mr.R.Murali
:JUDGMENT
This Appeal Suit has been directed against the Judgment and decree dated 31.07.2003 passed in Original Suit No.33 of 2002 by the District Court, Karur.
2. The first respondent herein as plaintiff has instituted Original Suit No.33 of 2002 on the file of the trial Court praying to pass a decree of specific performance, wherein the second respondent and appellant herein have been shown as defendants.
3. The material averments made in the plaint are that the suit property is comprised in Survey No.2237, Andangovil Keelpaham Village, Karur District and the same is the absolute property of the first defendant by virtue of purchase dated 13.09.1985. On 06.01.2001 the first defendant has agreed to sell the suit property in favour of the plaintiff at the rate of Rs.18,500/- per cent and to that extent, the suit sale agreement dated 06.01.2001 has come into existence. On the date of suit sale agreement, the first defendant has received a sum of Rs.4,00,000/- by way of an advance and agreed to execute a sale deed in favour of the plaintiff on or before 15.04.2001. The first defendant has agreed to measure the suit property before 15.04.2001. The plaintiff has always been ready and willing to perform his part of the contract. But the first defendant has evaded to measure the suit property and execute a sale deed in favour of the plaintiff. Since the first defendant has failed to perform her part of the contract, the plaintiff has chosen to issue a legal notice dated 26.04.2001 to the first defendant. The first defendant has refused to receive the same. On 07.05.2001, the plaintiff has given a telegram to the first defendant on 16.05.2001. The plaintiff has issued another legal notice to the first defendant. After receipt of telegram dated 07.05.2001, the first defendant has given a reply notice dated 23.05.2001 and the same contains false allegations. In the counter filed by the first defendant in I.A.No.349 of 2001, it is stated that the first defendant has created a sham and nominal document in favour of the second defendant. Under the said circumstances, the present Suit has been instituted for the relief sought for in the plaint.
4. In the written statement filed on the side of the first defendant it is averred that both the plaintiff and first defendant have entered into the suit sale agreement dated 06.01.2001 and on the date of its execution, the first defendant has received a sum of Rs.4,00,000/-. Both the plaintiff and first defendant have agreed to create a sale deed registered on or before 15.04.2001. The date mentioned in the suit sale agreement shows that time is an essence of contract. The plaintiff has not shown his readiness and willingness to perform his part of the contract. It is false to aver in the plaint that the first defendant has failed to measure the suit property. In fact, the first defendant has measured the suit property to the satisfaction of the plaintiff. The first defendant has directed the plaintiff on several occasions to get a sale deed registered after paying balance of sale consideration. It is false to aver that the first defendant has not shown her readiness and willingness to perform his part of the contract and there is no merit in the suit and the same deserves to be dismissed.
5. In the written statement filed on the side of the second defendant, it is averred that the second defendant has purchased the suit property under a registered sale deed dated 20.04.2001 for good and valuable consideration from the first defendant. The second defendant has not known the suit sale agreement alleged to have been entered into in between the plaintiff and first defendant. Therefore, the second defendant is a bona fide purchaser for value without notice of earlier contract. Since the second defendant is a bona fide purchaser for value and without notice of earlier contract, his right should be protected and he is not entitled to execute a sale deed in favour of the plaintiff along with first defendant and therefore, the present suit deserves to be dismissed.
6. On the basis of the divergent pleadings raised on either side, the trial Court has framed necessary issues and after evaluating both the oral and documentary evidence has decreed the Suit as prayed for. Against the Judgment and decree passed by the trial Court, the present Appeal Suit has been preferred by the second defendant as appellant.
7. Before contemplating the rival submissions made on either side, the Court has to narrate the following legal points involved in the present Appeal Suit, since the present suit has been instituted for the relief of specific performance.
(a) As per Section 16(c) of the Specific Relief Act, 1963 (47 of 1963), the concerned plaintiff has to plead and prove his/her readiness and willingness from inception of suit sale agreement.
(b) As per exception available in Section 19(b) of the said Act, a transferee for value who has paid his money in good faith and without notice of original contract, is not entitled to execute a sale deed in pursuance of original contract.
8. The suit sale agreement dated 06.01.2001 has been marked as Ex.A1. The sale deed dated 20.04.2001 alleged to have been executed by the first defendant in favour of the second defendant has been marked as Ex.B21 and its registration copy has been marked as Ex.A14.
9. In Ex.A1 it has been clearly recited that the plaintiff has agreed to purchase the suit property at the rate of Rs.18,500/- per cent and the first defendant has received a sum of Rs.4,00,000/- by way of an advance and the first defendant has agreed to execute a registered sale deed in favour of the plaintiff on or before 15.04.2001 and before the said date, the first defendant has to measure the suit property and she further agreed to give possession of the suit property to the plaintiff on the date of execution of sale deed.
10. The learned Senior Counsel appearing for the appellant/second defendant has valiantly contended that the suit sale agreement has come into existence on 06.01.2001, wherein it has been clearly stated that both parties should perform their respective obligation on or before 15.04.2001 and even though the first defendant has measured the suit property in the presence of the plaintiff, the plaintiff has not come forward to pay balance of sale consideration and get a sale deed registered from the first defendant and since the first defendant has been in a position of need of money, she sold the suit property in favour of the second defendant and therefore, the second defendant is a transferee for value who paid his money in good faith and without notice of original contract. Under the said circumstances, the second defendant cannot be directed to execute a sale deed in favour of the plaintiff. The trial Court without considering the available evidence on record has erroneously decreed the suit and therefore, the Judgment and decree passed by the trial Court are liable to be interfered with.
11. The learned counsel appearing for the first respondent/plaintiff has also equally contended that as per Ex.A1, before 15.04.2001 the first defendant has to measure the suit property in the presence of the plaintiff. But she has not done it. Under the said circumstances, the plaintiff is not in a position to get a sale deed registered after paying balance of sale consideration on or before 15.04.2001 and further the second defendant is not a bona fide purchaser for value in good faith and that too without notice of Ex.A1 and all the documents filed on the side of the defendants are not at all sufficient to show that only for discharging debts, the first defendant has sold the suit property in favour of the second defendant by virtue of sale deed dated 20.04.2001 and further the second defendant has no wherewithal to purchase the suit property and further the sale effected in favour of the second defendant is only for inadequate price and after considering the over all evidence available on record the trial Court has rightly decreed the suit after coming to a definite conclusion to the effect that the plaintiff has always been ready and willing to perform her part of the contract from inception of Ex.A1 and second defendant is not a bona fide purchaser for value in good faith and that too without notice of Ex.A1 and therefore, the Judgment and decree passed by the trial Court are not liable to be interfered with.
12. The learned counsel appearing for the second respondent/first defendant has sparingly contended that one Maruthai, land broker, has been examined as PW2 and his specific evidence is that the suit property is admeasuring 60 + cents and therefore, it is quite clear that already suit property has been measured in the presence of the plaintiff and the trial Court has failed to consider the evidence of PW2 and therefore, the Judgment and decree passed by the trial Court are liable to be set aside.
13. In the plaint it has been specifically pleaded to the effect that both the plaintiff and first defendant have agreed to complete the transaction in pursuance of Ex.A1 on or before 15.04.2001. But before such date, the first defendant has to measure the suit property in the presence of the plaintiff, but the first defendant has failed to measure the same and therefore, the plaintiff is not in a position to get a sale deed registered from the first defendant after paying balance of sale consideration.
14. The reply notice dated 23.05.2001 given by the first defendant has been marked as Ex.A13, wherein it has been clinchingly stated that the suit property has already been measured in the presence of the plaintiff. But despite of repeated request made by her, the plaintiff has failed to perform his part of the contract.
15. The learned counsel appearing for the first respondent/plaintiff has strenuously contended that since the suit property has not been measured on or before 15.04.2001 as agreed by the first defendant, the plaintiff has not been able to perform his part of the contract in pursuance of Ex.A1. At this juncture, the Court has to look into the evidence given by PW2 and his specific evidence is that he is a land broker and he completed the sale transaction made in between the plaintiff and first defendant. Further he categorically stated in his evidence that he has gone to the suit property and its exact extent is 60+ cents. From the clear admission made by PW2, the Court can easily come to a conclusion that the suit property has already been measured. The specific defence put forth on the side of the first defendant is that prior to 15.04.2001, the suit property has been measured in the presence of the plaintiff and after taking measurement, the plaintiff has not come forward to get a sale deed registered from the first defendant by way of paying balance of sale consideration and to that extent, the first defendant has been examined as DW1 and her specific evidence is that in the presence of the plaintiff, the suit property has already been measured and that too prior to 15.04.2001. Therefore, it is quite clear that the defence put forth on the side of the plaintiff for not getting a sale deed registered from the first defendant on or before 15.04.2001 cannot be admitted. Even at the risk of repetition the Court would like to point out that the evidence given by PW2 has itself proved that the said contention urged on the side of the plaintiff is nothing but false.
16. As averted to earlier, Ex.A1 has come into existence on 06.01.2001. Ex.B21 has come into existence on 20.04.2001. The present suit has been instituted on 18.06.2001. The second defendant has been impleaded in the present suit on 18.11.2002.
17. The plaintiff has been examined as PW1 and his specific evidence during the course of cross examination is that the sale deed executed in favour of the second defendant by the first defendant has come to his knowledge after receipt of reply notice from the first defendant. Further, he has categorically admitted in his evidence that he does not know as to whether the second defendant knows about the existence of suit sale agreement.
18. The present suit has been instituted for the relief of specific performance not only against the first defendant, but also against second defendant, the subsequent purchaser. Under the said circumstances, it would be condign to discuss the nature/degree of burden of proof as per Section 19(b) of the Specific Relief Act, 1963 (47 of 1963).
19. In Ramachander Singh V. Asghari Begum [AIR 1957 Patna 224], it is held that ?very little evidence and in certain circumstances a mere denial, regarding want of knowledge of the plaintiff's contract would discharge the onus upon the subsequent transferee and shift the onus on the plaintiff.
20. In Kanshi Ram V. Ishwardas [AIR 1923 Lahore 108] it is held that ?where the consideration is paid in full and vendees are ignorant of the original contract, good faith must be presumed in the absence of evidence to the contrary.?
21. In P.Lakshmi Ammal Vs. S.Lakshmi Ammal and others [AIR 1991 Madras 137] this court has observed ?that the onus of proof lies upon the party speaking to defeat the prior contract, to adduce prima facie evidence that he is a bona fide purchaser for value and without notice. But the burden is light and he may discharge it by merely denying the factum of notice on oath. In any case, very little evidence is required on his part to prove this fact, which is negative. It cannot be said in the present case that the said initial burden has not been discharged by the third respondent. So, the burden has only shifted to the plaintiff/appellant, but, she cannot be said to have discharged that burden.?
22. From cumulative reading of the said decisions, it is made clear that as per section 19(b) of the Specific Relief Act, 1963 (47 of 1963) initial burden lies upon the subsequent purchaser and a mere denial would be sufficient to discharge the said burden. If subsequent purchaser has denied the factum of existence of earlier contract by giving an evidence on oath, and after discharging burden by subsequent purchaser, the burden heavily lies upon the plaintiff to prove that subsequent purchaser has purchased the property in question after knowing existence of earlier contract.
23. With these legal backdrops, the Court has to analyse the second legal aspect involved in the present case.
24. As pointed out earlier, the present suit has been instituted on 08.06.2001. The categorical admission made by the plaintiff in his evidence is that even after receipt of reply notice from the first defendant on 23.05.2001 he has come to know that the first defendant has executed the sale deed dated 20.04.2001 in favour of the second defendant. But the second defendant has not been impleaded in the present suit at the time of filing the same. But he has been impleaded on 18.11.2002 as per order passed in I.A.No.185 of 2002.
25. In paragraph-16 of the amended plaint it is stated like thus:
The plaintiff is always ready and willing to deposit the balance of sale price in the Court as and when directed by this Hon'ble Court. Subsequently to the counter filed by the 1st defendant in I.A.No.349 of 2001 filed by the plaintiff under Order 39 Rule 1 and 2 and Sec 151 CPC the plaintiff came to know that the 1st defendant has created a sham and nominal document in favour of the 2nd defendant relating to the suit property with a view to cause loss and hardship to the plaintiff. Hence the plaintiff has filed petition under order 1 Rule 10(2) of CPC in I.A.No.125/2002 to implead the 2nd defendant as 2nd defendant in the above suit to get a valid and binding decree and judgment and the same was allowed by this Hon'ble Court on 27.09.2002. Hence the 2nd defendant has been impleaded and amended as per order passed in I.A.No.185/2002 dated 18.11.2002.?
26. In the written statement filed on the side of the second defendant it has been specifically stated that he does not know about the existence of Ex.A1 and he has been examined as DW3 and adduced evidence to the effect mentioned in the written statement.
27. As per the decisions referred to supra, a very little burden lies upon the second defendant to prove that he does not know about existence of Ex.A1 and to that extent, necessary averments are found place in the written statement filed by the second defendant and in order to encrust the same, he has given proper evidence. Therefore, there is no incertitude in coming to a conclusion that the second defendant has discharged his burden. Since the second defendant has discharged his burden, the onus shifts upon the plaintiff to prove that the second defendant has purchased the suit property by virtue of Ex.B21 after knowing Ex.A1, suit sale agreement.
28. It has already been pointed out that at the time of filing the present suit, the second defendant has not been impleaded. But after a lapse of more than a year, he has been impleaded on 18.11.2002.
29. In paragraph ? 16 of the plaint, as adverted to earlier, no averment is found place to the effect that the second defendant has purchased the suit property after knowing existence of Ex.A1. In a case like this, the concerned plaintiff has to plead and prove that a subsequent purchaser has purchased the property involved in prior contract after knowing the same. But in the instant case, no specific averment is found place in the amended plaint to the effect that the second defendant has purchased the suit property after knowing Ex.A1. Therefore, in the amended plaint filed on the side of the plaintiff, necessary averments are completely lacking.
30. The learned Senior counsel appearing for the appellant/second defendant has befittingly drawn the attention of the Court to the following decisions:
(a) In Sanga Thevar V. Thanukodi Ammal and others [AIR 1954 Madras 116], this Court has specifically held that ?plaintiff must allege that transferee was not bona fide purchaser and had notice of plaintiff's contract with transferor and that plaintiff was willing to perform his part of the contract.
(b) In P.Retnaswamy V. A.Raja & Another [2002] 3 MLJ 638/[2002] 3 CTC 1/[2009] 1 LW 368, the Division Bench of this Court in paragraph ? 34, has observed as follows:
?It cannot be lost sight of that the plea of the second respondent/second defendant is one of bona fide purchaser for value without notice or knowledge of the original contract. In fact, Section 19(b) of the Specific Relief Act, 1963 speaks of ?Relief against parties and persons claiming under them by subsequent title?. As a matter of fact, Section 19(b) protects the bona fide purchaser in good faith for value without notice or original contract, which is in the nature of exception to the general rule. Therefore, onus of proof of good faith is on the purchaser who takes the place that he is an innocent purchaser. Of course, good faith is a question of fact to be considered and decided on the facts on each case. In short, the initial burden of establishing the defence lies on the subsequent purchaser. Before that, it is to be noted that in the plaint the appellant/plaintiff has not whispered that the second respondent/second defendant had knowledge or notice of the prior sale agreement. To put it differently, there is absence of pleading to the above effect notwithstanding the fact that the appellant/plaintiff has known that the second respondent/second defendant has purchased the property.?
31. From the conjoint reading of the said decisions, it is made clear that in a case like this, the concerned plaintiff must necessarily plead and prove that subsequent transferee is not a bona fide purchaser and without notice of prior contract. Further, in subsequent transfer, inadequate consideration is not at all a question.
32. In the instant case, necessary averments are not found place in the amended plaint with regard to sale effected in favour of the second defendant by the first defendant on 20.04.2001. But the plaintiff has adduced evidence by way of attacking the sale deed dated 20.04.2001.
33. It is an archaic principle of law that without necessary pleadings, any amount of evidence /argument is useless. Therefore, viewing from any angle, the sale effected in favour of the second defendant by the first defendant after Ex.A1, has not been properly challenged on the side of the plaintiff and therefore, the Court can safely come to a conclusion that the second defendant is a bona fide purchaser for value in good faith and without notice of Ex.A1 and therefore, Ex.B21, sale deed dated 20.04.2001 is valid and genuine.
34. The learned counsel appearing for the first respondent/plaintiff has contended that in Ex.A1, sale consideration of one cent has been fixed at Rs.18,500/- and on the date of its execution, the first defendant has received a sum of Rs.4,00,000/- and the plaintiff has to pay a sum of Rs.7,19,250/-. But in Ex.B21 it has been mentioned to the effect that sale consideration is Rs.89,500/- and therefore, Ex.B21 has been created for inadequate consideration. Under the said circumstances, the Court can very well come to a conclusion that Ex.B21 is a sham and nominal document.
35. At this juncture, it would be apropos to look into Section 54 of the Transfer of Property Act and the same reads as follows:
?Sale? is a transfer of ownership in exchange for a price paid or promised or part-paid and part promised.
36. The ordinary meaning of the word ?sale? is a transaction entered into voluntarily between two parties, known as buyer and seller, by which buyer acquires property of seller for an agreed consideration, known as price.
37. The specific case of the first defendant is that only for discharging urgent debts, she intended to sell the suit property in favour of the plaintiff. But the plaintiff has failed to perform his part of the contract. Under the said circumstances, the first defendant has been driven in a position of selling the suit property to the second defendant for a sum of Rs.89,500/-. It has already been pointed out that a sale means, both buyer and seller have agreed to purchase/sell a particular property for an agreed consideration. In Section 54 of the Transfer of Property Act, no mention has been made with regard to quantum of consideration. Therefore, on the basis of consideration mentioned in Ex.B21, the Court cannot come to a conclusion that the second defendant is not a bona fide transferee in good faith and also with notice of Ex.A1.
38. The learned counsel appearing for the first respondent/plaintiff has also attacked the case of the first defendant on the basis of Exs.B3 to B20. Of course it is true that all those documents are subsequent to Ex.B21. Simply because those documents are subsequent to Ex.B21, the Court cannot belittle the evidence given by the first defendant to the extent that she sold the suit property in favour of the second defendant so as to discharge urgent debts.
39. The learned counsel appearing for the first respondent/plaintiff has also contended that the second defendant has no wherewithal to purchase the suit property under Ex.B21. On the side of the defendants Ex.B23 has been filed. Ex.B23 is a bank account which stands in the name of the second defendant. Further the second defendant (DW3) has given a clear evidence to the extent that he possessed of sufficient means to purchase the suit property on the date of execution of Ex.B21.
40. The learned counsel appearing for the first respondent/plaintiff has relied upon the following decisions:
(a) In (2000) 6 Supreme Court Cases 402 [R.K.Mohammed Ubaidullah and others Vs. Hajee C.Abdul Wahab (D) by LRs. and others] the Hon'ble Apex Court has held that ?good faith is a question of fact which must be considered and decided on the facts of each case. The Court must keep in view the circumstances before deciding which version is acceptable.?
(b) In (2008) 11 Supreme Court Cases 45 [Silvey and others Vs. Arun Varghese and another], it has been held that ?on facts, the plaintiff intended buyers have always ready and willing to perform the agreement. But the defendants intended sellers were not ready to perform their obligation in terms of the contract. Conduct of defendants in taking a false plea has to be taken into account while decreeing or denying decree for specific performance.
(c) In 2011 ? 1 ? L.W.940 [D.Kamalavathi Vs. P.Balasundaram (deceased) & Others], this Court has observed as follows:
?Section 19(b) of the Specific Relief Act is an exception from the general rule and the onus is on the subsequent purchaser to prove that he purchased the property in good faith and is also bona fide purchaser for value. When a person is in possession of the property, the purchaser ought to have made enquiries about the capacity of a person in possession, and if no enquiry is made, then it cannot be stated that he is a bona fide purchaser for value.
(d) In 2010 (2) CTC 751 [B.Nemi Chand Jain and another Vs. G.Ravindran and others], a Division Bench of this Court has held that ?definition of good faith under General Clauses Act is to be imported into Specific Relief Act while interpreting expression ?good faith?. Plaintiffs who had entered into contract for sale of immovable property claimed to be in possession of original title deeds as they were handed over to them at time entering into such agreement. Vendor did not dispute such handing over of title deeds.
Transferees under subsequent contract failed to verify original title deeds before purchasing property. Such transferees failed to give any explanation on omission to verify original title deeds and therefore, transferees cannot be considered that they have acted in good faith. Under the said circumstances, they are not bona fide purchasers.?
41. It is a settled principle of law that good faith is a question of fact and each case has to be decided on its factual situation and circumstance and further if a defendant has taken a false plea, he has to be thrown out at any stage. Further if subsequent transferee has not enquired about original sale deed, he cannot be considered as a subsequent transferee in good faith and purchased the property in question without notice of earlier contract.
42. In the instant case, the factual circumstance is entirely inverse. It is not the case of the plaintiff that on the date of execution of Ex.A1, document of title which stands in the name of the first defendant has been handed over to him. Further it is not the case of the plaintiff that on the date of execution of Ex.A1, possession of the suit property has been given to him. Under the said circumstances, the factual situations found in the decisions referred to supra are totally alien to the facts of the present case.
43. Even at the risk of repetition the Court would like to point out that the plaintiff has failed to perform his part of the contract on or before 15.04.2001, even though as per evidence given by PW2, the Court can unflinchingly come to a conclusion that the suit property has been measured even prior to the said date. Therefore, viewing from any angle, the plaintiff has failed to prove the following aspects:
(a) The plaintiff has failed to prove that he has always been ready and willing to perform his part of the contract as per section 16(c) of the Specific Relief Act, (47 of 1936).
(b) The plaintiff has failed to plead and prove that the second defendant is not a bona fide purchaser for value and without notice of Ex.A1.
44. The trial Court without considering the aforesaid rudimentary principles of law and also the evidence adduced on either side has erroneously come to the conclusion that the second defendant is not a bona fide purchaser for value and without notice of Ex.A1 and also erroneously granted discretionary relief of specific performance in favour of the plaintiff. In view of the foregoing elucidation of both the factual and legal premise, this Court has found considerable force in the contention urged on the side of the appellant/second defendant and the Judgment and decree passed by the trial Court are liable to be set aside.
45. In fine, this Appeal Suit is allowed without cost. The Judgment and decree passed in Original Suit No.33 of 2002 by the District Court, Karur are set aside and Original Suit No.33 of 2002 is dismissed without cost.
To The District Court, Karur