Punjab-Haryana High Court
Ram Dass And Anr. vs Shisha Singh And Ors. on 12 July, 2007
Equivalent citations: AIR2007P&H200, (2008)149PLR370, AIR 2007 PUNJAB AND HARYANA 200, 2008 (1) AJHAR (NOC) 126 (P&H), 2008 AIHC NOC 42, 2008 HRR 1 173, (2008) 1 PUN LR 370, (2008) 1 ICC 174, (2008) 1 CIVILCOURTC 635, 2008 (1) ABR (NOC) 86 (P. & H.) = AIR 2007 PUNJAB AND HARYANA 200, 2008 (1) AKAR (NOC) 67 (P.&H.), 2008 (1) AJHAR (NOC) 126 (P. & H.) = AIR 2007 PUNJAB AND HARYANA 200, 2008 AIHC (NOC) 42 (P. & H.) = AIR 2007 PUNJAB AND HARYANA 200
ORDER Permod Kohli, J.
1. This Regular Second Appeal was decided vide judgment and decree dated 5-4-2001 passed by this Court. The aforesaid judgment, however, came to be set aside by the Hon'ble Supreme Court vide its order dated 16-1-2004 passed in Civil Appeal No. 405 of 2004 on the ground that no substantial question of law has been framed as mandated by Section 100 of the Code of Civil Procedure, 1908 (as amended by Act No. 104 of 1976) CPC. Case was accordingly remanded to this Court to decide afresh, after framing substantial question of law.
2. On consideration of the judgments of the Courts below and other material on record and with the assistance of learned Counsel for the parties, I am of the opinion that following substantial question of law is involved in the present appeal:
Whether agreement to sell can be specifically enforced against the co-sharers (respondent Nos. 2 and 3) who are not. parties to the agreement?
3. I have heard the learned Counsel for the parties on the above framed substantial question of law.
4. It may be useful to notice relevant facts emerging from the record. Respondent Nos. 1 to 3 herein were the co-sharers of land measuring 88 kanals and 5 marlas. Respondent No. 1 was in possession of the land measuring 16 kanals comprised in Killa No. 111/ 15 (8-0) and 111/16 (8-0) as recorded in the Jamabandi for the years 1972-73. He had mortgaged the same in favour of Ram Kalan son of Sukh Ram, father of the appellants for a sum of Rs. 5,000/- on 18-6-1968 vide mortgage deed Ex. PW 9/A. He had created additional mortgage on the aforesaid land on 20-6-1972 against a sum of Rs. 3,000/-. While the mortgage was in force, respondent No. 1 entered into an agreement to sell (Ex. PI) in respect of the mortgaged land with the appellants for a sum of Rs. 12,000/-, At the time of entering into an agreement to sell, respondent No. 1 received Rs. 1000/-as earnest money and agreed to execute the sale deed by 25-6-1974. It was also agreed to adjust the mortgage money received by him from the deceased-father of the appellants i.e. Rs. 5000/- + Rs. 3000/- received from the appellants and the balance amount of Rs. 3000 was agreed to be paid at the time of the execution of the sale deed. The agreement to sell further contained stipulation that the vendor will pay Rs. 3000/- over and above Rs. 9,000/- paid /adjusted in the event he is unable to execute the sale deed. Respondent No. 1, instead of executing the sale deed in favour of the appellants sold the land measuring 16 kanals, subject-matter of agreement to sell and other land along with respondent Nos. 2 and 3 to respondent Nos. 4 to 10, by two sale deeds. Vide a sale deed dated 4-6-1974, land measuring 47 kanals and 6 marlas out of 88 kanals and 9 marlas was sold in favour of respondent Nos. 6 to 10 whereas vide another sale deed dated 6-6-1974 land measuring 24 kanals was sold to respondent Nos. 4 and 5. After the expiry of time for execution of the sale deed as stipulated in the agreement to sell dated 7-1-1974, appellants filed suit seeking specific performance of agreement in respect of land measuring 16 kanals. The suit was instituted against respondent Nos. 1 to 3, vendors and respondent Nos. 4 to 10, the vendees of the land.
5. The suit was resisted by the defendants-respondents on variety of grounds. Respondent No. 1 denied the execution of the agreement to sell whereas respondent Nos. 2 and 3 chose not to contest. Respondent Nos. 4 to 10 claimed themselves to be the bona fide purchasers of the suit land and disputed the right of the appellants to seek specific performance. The trial Court framed as many as 17 issues. After the conclusion of the trial, the suit filed by the appellants was decreed with costs and a direction was issued to defendant Nos. l and 4 to 10. Defendant No. 1 was asked to execute and get the sale deed registered in respect to the suit land in favour of the appellants-plaintiffs. A further direction was issued to defendant Nos. 4 to 10 to join defendant No. 1 in the execution and registration of the conveyance deed.
6. The judgment and decree dated 15-6-1978 passed by the trial Court became subject-matter of challenge before the Additional District Judge, Sangrur. The First Appellate Court set aside the judgment and decree of the trial court insofar as it directs the specific performance of the agreement. However, the decree for recovery of Rs. 7000/- i.e. the refund of the advance money along with costs incurred was passed vide judgment and decree dated 13-11-1980. It is this judgment which has been challenged in the present Regular Second Appeal.
7. As observed above, this Regular Second Appeal was decided by judgment and decree dated 15-4-2001 by this Court whereby the judgment and decree of the First Appellate Court was set aside and the judgment of the trial Court was restored. This Court, accordingly, directed the respondents to get the sale deed executed and registered in favour of the appellants within one month, failing which the appellants shall be at liberty to get the same executed and registered through Court. This judgment having been set aside by the Hon'ble Supreme Court in the aforesaid SLP, the matter has been heard afresh and the substantial question of law has been formulated here in above.
8. Aart from the above substantial question of law, learned Counsel for the respondents has also made submissions on the questions regarding the claim of respondent Nos. 4 to 10 that they are the bona fide purchasers and they had no knowledge of the agreement to sell earlier executed by respondent No. 1 in favour of the appellants.
9. I have heard the learned Counsel for the parties at length and perused the record of the case carefully.
It is relevant to note that the learned Additional District Judge, Sangrur set aside the judgment and decree of the trial Court only on one ground that the property being joint between respondent Nos. 1 to 3, agreement to sell was executed only by one of the co-sharers i.e. respondent No. l Shisha Singh, without concurrence of other co-sharers, hence the agreement to sell cannot be enforced against the co-sharers who are not parties to the agreement. This is the sole ground for setting aside the judgment of the Court.
10. Before I dwell upon the substantial question of law, I would like to refer to the submissions of Mrs. Lisa Gill, learned Counsel for the respondents regarding the absence of knowledge of vendees of earlier agreement. The trial Court, while deciding the issue Nos. 3 and 11-A, returned specific findings that the two sets of purchasers, defendant Nos. 4 and 5 and 6 to 10 were aware of the agreement to sell having been executed by Shisha Singh, in favour of the plaintiffs. With a view to arrive at this finding, the trial Court placed reliance upon statements of Harnek Singh who was a marginal witness to the sale deeds executed in favour of the defendant Nos. 4 and 5 and also the statement of Dalip Singh DW-9 who stated that Ram Dass-plaintiff had informed Joginder Singh and Sukhwant Singh, defendant Nos. 4 and 5, respectively of the agreement to sell in favour of the plaintiffs and impressed them not to purchase this land. The trial Court also observed that parties to the suit being residents of the same village, it is unbelievable that they had no knowledge of the earlier agreement. The trial Court further observed that both the sale deeds contained averments regarding the mortgage of the part of the land in favour of the father of the plaintiffs and one Hukum Singh. The possession of the land which is the subject-matter of the dispute in the suit, was with the plaintiffs. Under these circumstances, the vendees were supposed to make necessary enquiries as regards the nature of possession and other relevant facts and if the vendees had made no enquiry, they cannot derive any benefit. Otherwise on facts also, the trial Court has ruled that the vendees had the knowledge of earlier agreement to sell in favour of the plaintiffs, This finding of fact has not been upset by the First Appellate Court. It may be relevant to note the observations of the appellate Court. After referring to the submissions of the plaintiffs that the defendants-purchasers had the knowledge of the prior agreement to sell in favour of the plaintiffs, the First Appellate Court observed "without going into the merits of these submissions and assuming that the defendants/appellants were not bona fide purchasers of the land in dispute, I think plaintiffs are not entitled to specific performance of the agreement to sell". Thus, without upsetting the findings regarding the prior knowledge of the vendees of the agreement to sell, the First Appellate Court proceeded to non-suit the plaintiffs on the ground that the agreement to sell cannot be enforced as all the co-sharers were not parties to the same. At the first place, the findings on the above question recorded by the trial Court were neither challenged before the First Appellate Court nor before this Court. Secondly, the findings recorded by the trial Court have not been set aside by the First Appellate Court, though there is no specific concurrence to these findings, but the Court has proceeded to decide the appeal on other issues assuming these findings to be correct. Thus, the findings of fact having not been deviated by the First Apellate Court, I do not feel there is any scope for interference by this Court, particularly when the view expressed by the trial Court seems to be reasonable and one of the possible views emerging from evidence. I am unable to accept the argument of Mrs. Lisa Gill, learned Counsel for the respondents, on this account.
11. Now coming to the substantial question of law framed and on which the parties made their submissions at length, it is pertinent to note that the land jointly held by respondent Nos. 1 to 3 measures 88 kanals 9 marlas. Share of Shisha Singh, respondent No. 1 comes to more than 29 kanals. It is established on record that Shisha Singh was in possession of 16 kanals of land, subject-matter of agreement to sell which he mortgaged with possession in favour of Ram Kalan, father of plaintiffs as back as on 18-6-1968. The mortgage continued in existence till the execution of sale deeds in favour of defendant Nos. 4 to 10. Mortgage deed clearly indicates that the land is within the share and possession of Shisha Singh. The factum of mortgage was known to not only the other co-sharers i.e. defendant Nos. 2 and 3, but also to the vendees, same having been reflected in the sale deeds. The mortgage being with possession, the vendees were not put in possession of this property. It is also not in dispute that the 88 kanals 9 marlas of land was a joint property, but Shisha Singh, one of the co-sharers entered into agreement to sell in respect of 16 kanals of land which was within his share and possession. The possession had already been delivered to the mortgagees, the prospective vendees prior to the execution of agreement to sell. No law prohibits a co-sharer from alienating his share in the joint property. Any alienation so made by a co-sharer is always subject to the partition and rights of other co-sharers. The vendees simply step into the shoes of the vendor-co-sharers and will acquire status of a co-sharer and all their rights to the extent of the land purchased will remain subject to the partition and rights of other co-sharers. Therefore, the agreement to sell cannot be said to be illegal or bad per se merely because the other co-sharers did not joint in the transaction of proposed sale.
12. Learned Counsel for respondents has relied upon a judgment of the Apex Court in the case of Jagan Nath v. Jagdish Rai . In this judgment, the Apex Court has ruled that when owner of the property enters into an agreement to sell for selling immovable property and during the subsistence of the agreement, he enters into a transaction of the sale with a third person, the third person cannot be deprived of the property in proceedings for specific performance of the agreement to sell, if it is established that the purchaser was a bona fide purchaser and had no knowledge of the existence of earlier agreement to sell. In such a suit, the relief of specific performance against the subsequent purchaser is not permissible. Learned Counsel has also placed reliance upon another judgment of the Apex Court in the case of Zorawar Singh and Anr. v. Sarwan Singh (Dead) by L. Rs. and Anr. . In this judgment, a suit was filed on the strength of an agreement to sell between the plaintiff and the defendant for specific performance of contract. The property had been sold to a third party during the currency of the agreement to sell. It was contended by the plaintiff that when the sale deed was sought to be made in favour of the third party, he made an application before the Sub-Registrar opposing the registration of the sale deed on the ground that vendor has already entered into an agreement for the sale of the property in favour of the plaintiff. Or the basis of the evidence on record, the Hon'ble Supreme Court found that the plea of the plaintiff that he made an application before the Sub-Registrar opposing the registration of sale deed has not been established in the absence of any endorsement of the Sub-Registrar on such an application. On facts, the Hon'ble Supreme Court further found that the third party who purchased the land during the subsistence of agreement to sell in favour of plaintiff had in fact entered into an agreement for sale of the property prior to the one in favour of the plaintiff. It was also held on facts that the purchaser had no knowledge of the existence of agreement to sell in favour of the plaintiff. Under these circumstances, the Apex Court held that the specific performance of contract cannot be enforced since the purchaser is not only a bona fide purchaser, but also has a preferential right to purchase the property.
13. There is no dispute with the aforesaid propositions of law. However, in the present case, there is a clear finding by the trial Court that the purchaser had knowledge of earlier agreement to sell in favour of the appellants. I fully endorse these findings of fact. Hence, the respondents cannot derive any benefit from the aforesaid two judgments of the Hon'ble Supreme Court. Under the present circumstances and the facts on record, it cannot be said that the agreement to sell cannot be enforced against respondent Nos. 2 and 3 who are not parties to the same. Respondent No. l having agreed to sell the land within his share, other co-sharers cannot object to the same, though the right of the plaintiffs shall be subject to partition. Section 19 of the Specific Relief Act further clarifies the position that even if the property, subject-matter of agreement to sell, is sold to third party, their rights are also subject to the enforcement of the agreement to sell. The only exception carved out in the Section is that the vendees have no knowledge of the agreement to sell. In the present case, as held by the trial Court and concurred by me, the vendees had the knowledge of the agreement to sell when they purchased the property. The agreement to sell is accordingly enforceable against them also.
14. In view of the above this Regular Second Appeal is allowed. The judgment and decree dated 13-11-1980 passed by the Additional District Judge, Sangrur is hereby set aside. Respondent Nos. 1 to 3 are directed to execute the sale deed in favour of plaintiffs with respect to 16 kanals of land, subject-matter of agreement to sell. Respondent Nos. 4 to 6 shall facilitate the execution and registration of the sale deed. However, they will be entitled to refund of the proportionate sale consideration from respondent Nos. 1 to 3. On failure of respondents to execute the sale deed and obtain its registration within two months, the plaintiffs /appellants shall be entitled to obtain the sale deed through-the process of the Court.