Andhra HC (Pre-Telangana)
Ravada Krishna Rao (Died) Per L.Rs. vs Pasupureddy Ananda Rao And Ors. on 12 March, 1993
Equivalent citations: 1993(1)ALT562
ORDER P. Ramakrishnam Raju, J.
1. These two Civil Revision Petitions arise out of a common order disposing of E.A.No. 215/85 and E.A.No. 167/85, two applications filed by the petitioners and the first respondent respectively, claiming balance of sale consideration deposited by the plaintiff.
2. One Thota Sambamurthy (hereinafter called as the plaintiff) filed O.S.No. 18/77 on the file of the Subordinate Judge's Court, Parvatipuram for specific performance of an agreement of sale dated 2-11-1976 against Revada Krishna Rao, his wife Revada Adilakshmamma (hereinafter called as vendors) and one Pasupureddi Ananda Rao, first respondent in these Civil Revision Petitions (hereinafter called as the subsequent transferee). Pending the said suit, Adilakshmamma died and her son and daughter were brought on record as defendant Nos. 4 & 5 who are the respondent Nos. 3 & 4 in the C.R.Ps. The suit was decreed against the defendants directing them to execute a registered sale deed in favour of the plaintiff within two months from the date of the decree by receiving the remaining sale consideration from the plaintiff. Although the decree sounds that the balance of sale consideration should be received by the vendors, but no specific issue was framed and decided about the entitlement of this amount by working out equities between the vendors and the subsequent transferee. Be that as it may. Aggrieved by the said decree, the subsequent transferee filed A.S.No. 10/84 on the file of the District Judge's Court, Vizianagaram. The vendors remained ex parte. However, the subsequent transferee and the plaintiff entered into a compromise in I. A.462/84. As per the terms of the compromise decree, the subsequent transferee has agreed to give up his contentions as appellant in the appeal and deliver possession of the plaint schedule property to the plaintiff and the plaintiff agreed for withdrawal of the amount of Rs. 7,100/- deposited by him being the balance of sale consideration by the subsequent transferee in view of the fact that he had paid a sum of Rs. 6,000/- by way of sale consideration under the registered sale deed dated 13-4-1977 to the vendors. The vendors are not parties to this compromise.
3. After the said compromise was recorded, both the vendors as well as subsequent transferee filed E.A.167/85 and 215/85 respectively, before the trial Court for issuance of a cheque for Rs. 7,100/- in their favour being the balance of sale consideration claiming that they are alone entitled to. The trial Court by a common order dated 31-12-1985 allowed E.A.No. 215/85 filed by thesubsequent transferee and dismissed E.A.167/85 filed by the vendors. Aggrieved by the said common order, the first vendor (D-l) filed the above two revisions. He died pending revision petitions and therefore, petitioner Nos. 2 to 6 are brought on record as the legal representatives of the first petitioner.
4. Sri T. Gopalakrishna, learned Counsel for the petitioners, contended before me that inasmuch as the vendors are not parties to the compromise decree, the same is not binding on them and as such, the subsequent transferee cannot withdraw the amount in pursuance of the terms of the compromise decree as the balance of sale consideration was meant for the vendors under the decree of the trial Court. He further contended that the trial Court has categorically found that the subsequent transferee is not a bona fide purchaser for valuable consideration without notice of the suit agreement. Though the subsequent transferee as D.W.I stated that a sum of Rs. 2,000/- was paid in cash before the Sub-Registrar and the remaining consideration of Rs. 4,000/- went in discharge of the mortgage debt, the recitals in the sale deed, Ex.B-1 strike a different note as if the entire consideration of Rs. 6,000/- was paid even before the execution of the sale deed. There is also no proof that any amount was paid before the Sub-Registrar at the time of registration of the sale deed. Therefore, the learned Counsel contended that the document is a sham, nominal and collusive one and as such, the subsequent transferee cannot claim anything from out of the sale consideration meant for the vendors.
5. On the other hand, Smt. Bhaskara Lakshmi, learned Counsel for the first respondent contended that the subsequent transferee has paid a sum of Rs. 6,000/ - and obtained the registered sale deed under Ex.B-1 and as such, the vendors who have induced him to part with lawful consideration for the property in dispute, cannot be permitted to withdraw the balance of sale consideration also under the original agreement of sale as it would amount to unlawful enrichment, and hence, the order passed by the lower Court permitting the first respondent to withdraw the said amount to adjust towards the amount paid by him under the sale deed, is just and proper in the circumstances of the case.
6. Therefore, the point for consideration is whether the subsequent transferee (first respondent) is entitled to withdraw the balance of sale consideration deposited by the plaintiff under equity, under the circumstances of the case?
7. In order to find out, whether the compromise decree is binding on the vendors, it is necessary to have a look at Rule 3 of Order 23 C.P.C. A plain reading of this rule, makes it clear that the Court will record a compromise or satisfaction if it is proved that a suit has been adjusted by a lawful agreement in writing and signed by parties. So, what is necessary for a lawful agreement or a compromise to be recorded by the Court is signature of the party or parties in the compromise petition.
8. In this case, the vendors are not parties to the compromise and they have not signed the compromise petition in token of their consent or willingness. Therefore, the terms of the compromise or the subsequent decree passed in terms of the compromise, are not binding on the vendors. By this, it cannot be concluded that the vendors alone are entitled to the balance of sale consideration.
9. So, the next question that falls for consideration is, who among the vendors and the subsequent transferee, is entitled for the balance of sale consideration. In all cases of registered sale deeds, though executed subsequent to the prior agreement of sale, title would pass. However, the sale will not be binding on the plaintiff who has a prior agreement of sale, if the subsequent transferee is not a bona fide purchaser for value and without notice of the prior contract. The sale in his favour is not void, but is only voidable at the option of the prior purchaser. Law does not permit the vendor to unilaterally terminate the prior agreement of sale or the plaintiff to suffer on this account for no fault of his. Nodoubt, there cannot be a uniform 'Rule' of invariable application that in every case, the balance should be paid to the subsequent purchaser up to the extent of the consideration paid by him under the sale deed. The normal rule is, the vendor alone is entitled to the balance of sale consideration, of-course, subject to the equities, if any in favour of the subsequent purchaser. This is in view of the fact that the subsequent purchaser will pass on the title that vests in him by virtue of the sale deed in his favour, to the plaintiff by virtue of the decree passed by the Court. There may be covenants in the registered sale deed obtained by the subsequent purchaser which would become enforceable in case of breach of warranty of title. So, it is always open to the subsequent purchaser to proceed against the vendor in case of breach of warranty or other covenants by way of a separate suit. If, however, the subsequent vendor desires to recover the amount parted with by him under the registered sale deed from out of the balance of sale consideration, he should set out relevant facts in his written statement, so that the trial Court can frame an appropriate issue and decide the same considering the relevant evidence. In these circumstances, the trial Court would do well if an issue, "whether the subsequent purchaser is entitled to any equities"? is framed and decided, so that in many cases further litigation relating to the same subject-matter can be avoided. It would also obviate the necessity of remanding the matter by the appellate Courts while considering the question of issuing directions for payment of the balance of sale consideration at the time of disposal of appeals, in the absence of finding by the trial Court in this regard. If the subsequent purchaser is not interested in claiming back his money by fighting out an issue relating to the payment of balance of sale consideration in the suit by giving necessary data in his written statement he shall not be permitted to simply file a cheque application after the trial is over and decree is passed. In such a case, the only course open to him would be to resort to a separate suit to work out his remedies under the terms and conditions of the sale deed.
10. As no issue was framed and decided in this suit on the lines indicated above, I would have directed the subsequent purchaser to work out his remedies by way of a separate suit, if so advised, but, as the suit is a very old one which is of the year 1977 and as this litigation has started more than 16 years ago, I feel it would be just and proper if the matter is remanded back to the trial Court for considering the question viz., 'whether the subsequent purchaser is entitled to any equities in this case'? While considering this question, the objection, whether it would amount to unjust enrichment by the vendors also would come up for consideration.
11. For all the above reasons, I allow both the Civil Revision Petitions, set aside the order of the lower Court and remand the matter back to the trial Court for fresh disposal, after giving an opportunity to both the parties to adduce evidence and decide the same afresh, according to law.