Calcutta High Court (Appellete Side)
Sona Majumdar vs Kishorilal Agarwal & Anr on 31 March, 2023
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
BEFORE:
The Hon'ble Justice Soumen Sen
and
The Hon'ble Justice Uday Kumar
FA 344 of 2014
with
I.A No. CAN 7 of 2023
Sona Majumdar
Vs.
Kishorilal Agarwal & Anr.
For the Appellants : Mr. Jayanta Kumar Mitra, Sr. Adv
Mr. Debnath Ghosh, Adv.
Mr. Ritzu Ghosal, Adv.
Mr. Arnab Chakraborty, Adv.
Mr. Sukalyan Chakraborty, Adv.
Mr. Santanu Chatterjee, Adv.
Mr. Biswaroop Mukherjee, Adv.
For the Respondent No.1 : Mr. Malay Ghosh, Sr. Adv
Mr. Sakya Sen, Adv.
Mr. Rajib Mullick, Adv.
Ms. Sormi Dutta, Adv.
Mr. Rakesh Sarkar, Adv.
For the Respondent No.2 : Mr. Rupak Ghosh, Adv.
Mr. Shounak Mitra, Adv.
Mr. Zulfiqar Ali Al Quaderi, Adv.
Hearing concluded on : 28th February, 2023
Judgment dated : 31st March, 2023
Soumen Sen, J: The appeal is arising out of a judgment and decree
dated 30th July, 2014 passed by the Civil Judge (Sr. Div.), Siliguri in a suit
for Specific performance of contract.
The appellant claims to be the purchaser of the property in question.
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The grievance of the appellant is that the impugned decree was
passed disregarding her claim of a prior agreement for sale culminated in a
registered deed of conveyance along with delivery of possession of the suit
property in her favour. In any event she is a bona fide purchaser for value
without notice.
The respondent no.1 is the decree holder.
The respondent no.2 is the vendor.
Briefly stated, the plaintiff Kishorilal Agarwal (hereinafter referred to
as 'Kishorilal') alleged to have entered into an oral agreement for sale with
Homco Engineering Works Private Limited (hereinafter referred to as
'Homco') on 21st December, 2002 for purchasing the suit property at a sum
of Rs.1.25 crores.
In the said transaction one Shri Kamal Kumar Baid and Pulak
Chowdhury acted as brokers. Before the agreement the property was
jointly inspected and verified by Kishorilal and Partha Dey one of the
directors of Homco. Kishorilal alleged to have paid a sum of Rs.10 lacs to
Homco towards earnest money. It was mutually agreed that a draft copy of
the agreement would be sent to Homco in order to enable it to verify and
finalise it and thereafter to forward the said agreement to the plaintiff to
facilitate and prepare the final deed of conveyance for execution. The
plaintiff in pursuance of such alleged oral agreement forwarded a draft
copy of the agreement along with a sum of Rs.2 lacs followed by a further
sum of Rs.3 lacs. On receipt of the said sum of Rs.3 lacs Homco forwarded
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the draft copy of the agreement which was finalized and settled at the
chamber of Mr. S. Ganguly, Advocate at Kolkata in presence of Mr. Partha
Dey of Homco, Kishorilal and the two brokers mentioned above. One Shri
Ram Prasad Thakur was also present at the time of finalisation of the draft
in the Chamber of Mr. S. Ganguly. Thereafter, Kishorilal sent the final
copy of the said agreement and requested Homco to indicate the mode,
manner and time of payment of the balance consideration amount. Homco
accepted the aforesaid sums paid since 21st December, 2002 without any
objection. It was alleged that in terms of the agreement the plaintiff was
supposed to hand over the actual physical possession of the property in
question upon payment of part consideration amount as mutually agreed
between the parties, however, Homco was not responding to various
requests and demands for execution of the final deed of conveyance.
Kishorilal made enquiries and came to learn that Homco had taken
advance from market and one M/s. Maonil Estate Private Limited (in short,
Maonil) had filed a suit against Homco and others being Title Suit no. 49 of
2002 before the learned Civil Judge (Sr. Div.) Siliguri concerning the
property in question. Plaintiff could further ascertain that Homco was
habituated in taking advance from the market against properties. On a
representation made by Partha allegedly in the morning of 21st February,
2003 that Maonil had agreed to settle the suit upon payment of Rs.10 lacs
out of which Homco could arrange Rs.8 lacs and in order to bail out
Homco, Kisorilal arranged for the balance amount of Rs.2 lacs and paid
such amount in cash on 21st February, 2003 to Partha in presence of Ram
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Prasad. Subsequently Kishorilal paid a sum of Rs.2.44 lacs by cheque in
the name of Homco, however, the cheque was dishonoured on 7th February,
2003 for insufficient fund. On the basis of the assurance that Homco would
sell the property in favour of the plaintiff, Kishorilal immediately paid a
sum of Rs.2.44 lacs in cash on 10th February, 2003 in presence of Pulak
and Ram Prasad and a further sum of Rs.6000/- to Shri P.D. Dalmia
Advocate on the advice of Partha for preparation of the application for
settlement to be filed in the suit filed by Maonil. The agreement for sale was
prepared and handed over to Partha on 9th March, 2003 along with a
further sum of Rs.5 lacs. The said amount was received by Partha from
Sudip, the son of the plaintiff in presence of Shri Thakur a representative of
the plaintiff. The plaintiff claims that in the aforesaid manner a sum of
Rs.10 lacs was paid to Homco between 21st February, 2002 and 9th March,
2003 partly by cheque and partly by cash. On 4th April, 2003 the plaintiff
came to know that Homco sold and transferred the property in favour of
Smt. Sona Muzumdar (hereinafter referred to as 'Sona') the appellant
herein at a consideration of Rs.76 lacs by a deed of conveyance being no.
349 dated 24th February, 2003. The said document was presented in the
office of Additional District Sub-Registrar, Siliguri on 24th February, 2003.
During enquiry Kishorilal came to know that Partha had signed on the
deed of conveyance on behalf of the Homco. In view of such subsequent
transfer Sona was made party in the suit. The plaintiff alleged that the
cause of action of the suit arose on 21st December, 2002 when the
agreement was executed and on dates when part considerations were paid,
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that is, 24th January, 2003 and 21st February, 2003 respectively. In view of
refusal by Homco to execute the sale deed in favour of Kishorilal, the
plaintiff filed a suit for specific performance of contract being T.S. No.17 of
2003. In the suit the plaintiff, inter alia, had prayed for a decree for
permanent injunction restraining Homco from transferring and/or
completing the said deed. The plaintiff also prayed for other consequential
reliefs.
Homco and Sona entered appearance and filed their respective
written statement.
Homco in its written statement has denied existence of any
agreement for sale between the plaintiff and defendant no.1 in relation to
the property in question. Homco denied receipt of any amount towards sale
consideration and alleged that the amounts alleged to have been paid and
mentioned in the written statement were wholly unconnected with the sale
transactions.
Sona in her written statement has stated that she is a bona fide
purchaser of the suit property and denied existence of any agreement
between Kishorilal and Homco. It is stated that on the basis of the
agreement entire consideration amount was paid and Homco had put her
in possession of the suit property.
In the additional written statement, she has stated that from the
"Receipt and Memo of Consideration" of the sale deed it would appear that
on 29th April, 2002, the defendant no.1 had agreed to sell the suit property
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to the defendant no. 2 at a Rs.76 lacs only and received a sum of Rs.15
lacs by a demand draft no. 076440 dated 29th April, 2002 as earnest
money. Thereafter, the balance consideration amount was received between
30th May, 2002 and 19th February, 2003 by demand drafts as clearly
mentioned in the Memo of Consideration.
Consequent upon payment of the entire consideration amount the
suit property was physically delivered on 3rd June, 2002 to Sona. It was
further stated that prior to payment of the earnest money Sona had made
enquiries about marketability of the property in question and being
satisfied she agreed to purchase the suit property and paid the earnest
money of Rs.15 lacs on 29th April, 2002. It was further stated that she had
knowledge about the pending title suit being no. 49 of 2002 of Maonil
instituted on 26th July, 2002 and her representative took part in the
meeting held for settlement of the disputes between Maonil and the
defendant No.1 and the settled amount of Rs.10 lacs was paid to the said
Maonil directly by Soma on 21st February, 2003 vide demand draft no.
001465 dated 19.02.2003 drawn on Standard Chartered Bank. The
compromise petition was filed in court on 23rd February, 2003 by Maonil
and Homco in the said title suit no. 49 of 2002 and the suit was finally
disposed of on 29th May, 2003.
On payment of the entire consideration amount to the defendant
no.1 on 21st February, 2003 the defendant no. 1 executed and presented
the sale deed for registration at Siliguri on commission before the
Additional District Sub-Registrar, Siliguri and the registration was
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completed on 29th June, 2005 after depositing deficit stamp duty. The
Registration was duly recorded in Book no. I, Volume No. 31 at page 359 to
380 being no. 1061 for the year 2005.
Sona had denied existence of any agreement between Kishorilal and
Homco at any point of time concerning the property in question.
On the basis of the pleadings the court framed four issues.
Kishorilal exhibited sixteen documents that were marked as Exhibits
1 to 16.
The defendants have produced five documents that were marked as
Exhibits A to E.
The evidence of affidavit filed by Kishorilal is almost the replica of the
plaint. Kishorilal during his cross examination has stated that there is no
commercial transaction between the plaintiff and the defendant no.1 and
he reiterated that there was an agreement in writing between the parties
and a copy of the said agreement was sent to Homco for execution.
Brokers were also produced as witness on behalf of Kishorilal to prove
negotiation that had culminated in the alleged agreement. Partha in his
evidence has denied existence of any agreement between Homco and
Kishorilal and had stated that whatever money Homco had received was
unconnected with the sale. Partha however, admitted the transaction
between Homco and Sona and payment of Rs. 10 lacs directly to Maonil
towards settlement of its dues.
8
The evidence on affidavit on behalf of Sona was filed by her husband
Bhabesh.
Mr. Jayanta Kumar Mitra the learned Sr. Advocate appearing on
behalf of the appellant has submitted that the learned Trial court has failed
to appreciate that Kisorilal has failed to prove the agreement of which
specific performance was ultimately granted. Mr. Mitra referred to various
paragraphs of the plaint to demonstrate that the draft agreement which
has been relied upon in the plaint could not have been prepared on 21st
December, 2021.
The learned Senior Counsel has specifically referred to paragraph 1
to 4 of the plaint and submits that in paragraph 1 of the plaint the plaintiff
alleged that "after inspection, verification and after considering the latest
market valuation of the said property, as mentioned in the schedule
hereinbelow, Kishorilal ascertained the valuation of the property at a sum
of Rs.1,25,00,000/- and agreed to pay to Homco, the said sum on the basis
of terms mutually agreed between the parties on 21st December, 2002."
The plaintiff in furtherance of such mutually agreed terms prepared a
draft agreement to be sent to the defendant no.1 for finalization and return.
The plaintiff claimed to have send draft copy of the agreement with
Rs.2 lacs, and then sent further sum of Rs.3 lacs. According to the plaint,
this draft copy of the agreement was finally settled in the chamber of Mr. S.
Ganguly, Advocate, Kolkata.
9
In the examination in chief by way of affidavit evidence the plaintiff
has reiterated his averments in the plaint and in support thereof tendered
the alleged draft agreement marked as Exbt.1 and a copy of forwarding
letter dated 21st February, 2002 marked as Exbt.2.
Mr. Mitra has submitted that from the tenor of the said letter, it
would appear that the copy of the agreement sent along with the said letter
was merely a draft agreement for sale, which defendant no. 1 was
requested "to accept and settle the agreement for sale". In other words, the
said alleged draft agreement required the approval of the defendant no. 1 to
be finally settled at his end.
Significantly, the said letter dated 21st December, 2002 contained a
promise and an assurance of the plaintiff that out of the total consideration
of Rs.1.25 crores, Rs.50 lacs would be paid in the name of Howrah Motors
and Another Rs.10 lacs would be paid in the name of the defendant no.1
and upon Xerox copies of the drafts of the above sums being made over to
Partha Dey to defendant no. 1, he would hand over possession of the
property in Siliguri.
However, the said letter is silent about the balance amount. This
letter was followed by letter dated 24th January, 2003 wherefrom it would
appear that a cheque dated 27th January, 2003 for a sum of Rs.3 lacs
drawn on Corporation bank was sent to Homco towards part payment with
a request to handover the agreement of 25th January, 2003 with an
assurance that Kishorilal would pay the balance amount as per payment
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schedule of the agreement. Mr. Mitra submits that the agreement annexed
to the plaint refers to various payments that were made subsequent to 25th
January, 2003 and accordingly the said agreement could not have been the
agreement forwarded to Homco for finalization.
Mr. Mitra submits that even it is assumed that there is an agreement
for sale between the plaintiff and the defendant no.1 the consideration
amount of Rs.1.25 crores as recorded in the alleged agreement was
predicated upon the fact that the plaintiff would buy the property free from
encumbrances, charges, claims and liabilities. The failure to get the
property free from the said security would disentitle the plaintiff from
claiming specific performance.
Mr. Mitra submits that the pleading and the evidence of Kisorilal and
other witnesses supporting Kishorilal would show there are three
agreements. It is argued that if it is assumed that on 21st December, 2002
an oral agreement was entered into between the plaintiff and defendant
no.1 followed by a draft agreement then the agreement relied upon by the
plaintiff in the suit for specific performance could not be the final draft
agreement. However, if it is contended that the said agreement is the final
agreement then the draft agreement has not been produced during the
trial.
Mr. Mitra has drawn our attention to the undated agreement alleged
to have been forwarded by Kishorilal on 21st December, 2002 being Exbt.1
and the letter dated 24th January, 2003 being Exbt.2 to show that the said
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agreement could not have been forwarded by the letter dated 21st
December, 2002.
Mr. Mitra submits that in paragraph 3 and 4 of the plaint the
plaintiff has alleged that in terms of the "aforesaid agreement" the plaintiff
has sent final copy of the agreement and asked the defendant no. 1 to
inform the plaintiff as to when and how the rest amount of consideration
was to be remitted. The plaintiff alleged that the defendant no.1 did not
respond to the draft copy of the agreement for sale even though the plaintiff
was "keenly interested and willing to proceed" with the sale.
Mr. Mitra submits that even assuming this averment to be correct,
the most relevant question arises as to where is this so-called final copy of
the agreement, which has neither been disclosed in this proceedings, nor
tendered in evidence. If there existed any such final copy of the agreement,
it should have contained details of payment schedule and the obligation of
the plaintiff to make payment in terms thereof. Significantly, nothing was
brought on record, and the so called "final copy of the agreement" remained
undisclosed to the Court.
It is submitted that by his own averment in the plaint and the
evidence led by the plaintiff, Kishorilal has himself admitted that no final
agreement for sale between the plaintiff and the defendant no. 1 came into
existence at all. If the plaintiff's case as stated in paragraph 4 were taken
to be correct, then the question arises of which agreement was the plaintiff
asking for specific performance. According to the plaintiff the draft
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agreement, being Exbt. 1 is not the agreement of which specific
performance is being sought for, and the oral agreement pleaded in
paragraph 4 cannot be the agreement since by the plaintiff's own showing
the defendant no. 1 neither approved of it nor had shown any interest to
approve and send the final draft copy. Partha on behalf of Homco has
denied the existence of the said agreement. Even if it is assumed that
Kishorilal had an agreement with Homco but his conduct would not show
that he was ready and willing to perform his obligation under the
agreement. It is submitted that Kishorilal had failed to explain as to
whether Exbt.1 is a draft agreement of the final agreement. However, on
the basis of the pleading it can be safely assumed that Exbt.1 is the
agreement to which reference was made in the plaint and is clearly
discernible from the letter dated 21st December, 2002 and 24th January,
2003 respectively.
The plaintiff did not lead any evidence to show its readiness and
willingness to perform his obligation and on the contrary the plaintiff has
alleged that the defendant no.1 did not show any interest in approving and
sending the draft copy of the agreement to the plaintiff and/or to its
advocate nor the defendant no.1 has advised the mode of further
agreement.
Mr. Mitra has referred to Clause 9 of the agreement which recorded
that a total sum of Rs.9.50 lacs have been paid to Homco between 21st
December, 2002 and 21st February, 2003 and Clause 10 of the said
agreement refers to a further sum of Rs.10 lacs to be paid to Howrah
13
Motors Company Ltd. by a cheque no.027307 dated 8th March, 2003 under
the advice of Homco and from the total consideration amount Rs.50,000/-
has been paid to the vendor on 8th March, 2003. Mr. Mitra submits that if
the recitals truly reflected the transactions, then the draft agreement could
not have been sent before 8th March, 2003 as the said amount was
allegedly paid in cash on that date i.e. 8th March, 2003.
It is submitted that the said agreement in any event, is incomplete as
it states in paragraphs 12 and 13 that a further sum of Rs.5 lakhs would
be paid by KishorlLal to Howrah Motors or to its nominee M/s. golden
Trust Financial Services Pvt. Ltd. as may be advised by the vendor and
upon payment of a total sum of Rs.81 lakhs Homco would handover vacant
possession of the property to Kishorilal. The agreement does not mention
payment of the balance consideration amount or the period within which
the said amount is to be paid.
Mr. Mitra refers to the evidence of Kishorilal and submits that
according to KishorlLal original copy of the draft agreement of sale was
forwarded by the letter dated 21st December, 2002. In cross-examination,
Kishorilal has stated that the draft agreement was handed over to the
defendant no.1 after payment of 2 lacs on 21st December, 2002 and the
agreement filed along with the plaint is not that agreement.
The plaint does not refer to any other agreement other than Exbt.1
and according to the evidence of the plaintiff that Exbt.1 is the agreement
forwarded under the cover of the letter dated 21st December, 2002.
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Mr. Mitra submits that the draft copy of the agreement alleged to
have been finalized in the chamber of Mr. S. Ganguly was not produced.
Mr. Mitra submits that if Exbt. 1 is the draft agreement for sale sent along
with the letter dated 21st December, 2002 then the plaintiff has come with
a false case as the said so called agreement could not have been settled in
the chamber of Mr. S. Ganguly, Advocate as the said alleged agreement
record payments subsequent to 21st December, 2003. It is thus clear that
the plaintiff has come to court claiming equitable relief of specific
performance with unclean hands and a false case. Mr. Mitra submits that
it is trite law that he who claims equity must come with clean hands. Mr.
Mitra submits that a plaintiff seeking equitable relief of Specific
performance with unclean hands has no legitimate right to seek the
equitable remedy as held in Lourdu Mari David and Ors. v. Louis
Chinnaya Arogiaswamy & Ors., reported in 1996 (5) SCC
589(paragraphs 1 to 3)and Lalit Kumar Jain & Ors. v. Jaipur Traders
Corporation Pvt. Ltd., reported in 2002 (5) SCC 383 (paragraph 14)
Mr. Mitra has submitted that the recital of the alleged draft
agreement being Exbt.1 in the internal page 4 at page 294 of the Paper
Book has referred to an alleged agreement for sale of the property at
Rs.1.25 crores "free from all encumbrances, charges, claims and liabilities
and with vacant possession". Clause 1(b) of the said agreement at page
296 of the Paper Book records an encumbrance on the said property by
way of mortgage for a sum of Rs.9,15,019.99 towards principal and interest
that was due and payable by Homco to one Prafulla Nalini Seva Sangha.
15
Under Clause 1(n) the vendor was obliged to produce a certified copy of the
return showing satisfaction of mortgage duly filed with the Registrar of
Companies and also to produce receipt of payment of the dues of the said
creditor for verification. Mr. Mitra submits that there is no evidence on
record that the plaintiff did make any payment of the aforesaid sums to
redeem the mortgage in order to make the property free from
encumbrances. Mr. Mitra has submitted that one of the obligations of the
vendor would be to provide funds to meet the various liabilities of Homco
and the recitals in the agreement has clearly stated that Homco was in
need of funds to meet its various liabilities and in order to discharge such
liabilities had decided to sell and transfer the said property after obtaining
vacant possession from Howrah Motor Company Private Limited and it was
upon such negotiation the parties mutually arrived at Rs.1.25 crores as the
consideration amount. Mr. Mitra submits that the plaintiff was unable to
prove that he has paid any amount to discharge the mortgage or enable the
defendant no.1 to pay off its debt to Maonil. Mr. Mitra submits that the sale
is conditional upon the property being made free from all encumbrance and
all liabilities discharged.
Mr. Mitra has submitted that specific performance cannot be granted
in favour of a person who fails to aver and prove that he has performed or
has always been ready and willing to perform of essential terms of contract
which has to be performed by him. The very fact that the plaintiff has
failed to provide necessary fund to pay off the loan amount to make the
property free from encumbrances is a clear evidence of Kishorlal's lack of
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readiness and willingness to perform his part of the contract. It is
submitted that if Kishorilal had inspected the properties as claimed then he
must be aware of the existing encumbrances and liabilities and the
existence of the suit filed by Maonil.
It is submitted that one of the essential features of an agreement of
sale is the consideration amount. There are serious discrepancies with
regard to the agreed amount as the agreement that was alleged to have
been forwarded to Partha mentions agreed consideration of Rs.81 lacs
whereas in the plaint it is mentioned that Rs.1.25 crores. Mr. Mitra has
referred to the draft alleged agreement for sale and has submitted that from
Clauses 11 to 14 it can be easily seen that the respondent no. 1 was not
ready and willing to perform its obligation.
Mr. Mitra submits that there is sufficient evidence on record to hold
that the respondent no.1 had failed to perform its obligation and in
Telikicherla Sesibhushn (Dead) by Legal representatives v. Kalli Raja
Rao (Dead) by Legal Representatives & Ors., reported in 2014(15) SCC
743 paragraphs 7 and 8 has recognized the principle that any person
seeking benefit of the specific performance of contract must manifest that
his conduct has been blemishless throughout entitling him to the specific
relief. Mr. Mitra submits that since the pleadings manifest that the
conduct of the plaintiff is not unblemished hence no decree could have
been passed in favour of the plaintiff.
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Mr. Mitra submits that the pleadings and the evidence if read
together would clearly show that there is no concluded contract between
the parties and it lacks mutuality.
It is submitted that the plaintiff has also failed to aver and prove that
he was ready and willing to perform his obligation. In fact, save and except
payment of a sum of Rs. 10 lakhs allegedly made between 21st December,
2002 and February 21, 2003 the plaintiff has not been able to demonstrate
any other payment in terms of the alleged agreement save and except
payment of a meager sum of Rs.50,000/- as claimed on 8th March, 2003.
The plaintiff is required to demonstrate continuous readiness and
willingness. In fact the plaintiff was impecunious as it would appear from
the evidence that the cheque drawn by the plaintiff on 4th February, 2003
was returned by the bank with the remark "insufficient fund". All the
payments would not show that it was paid to the respondent no.1 as it
appears from the evidence that some payments were allegedly made to
Howrah Motors at the instruction of Partha on behalf of the defendant no.1
which however Partha has denied.
Mr. Mitra submits that in any event and in any view of the matter the
relief for specific performance in terms of Section 20 of the un-amended
Specific Relief Act, 1963 is discretionary and the court is not bound to
grant such relief merely because it is lawful to do so.
It is submitted that on consideration of the entirety of the pleadings,
the plaintiff could not prove with certainty as to whether the so-called
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contract of sale between the plaintiff and defendant no.1 was a
concluded contract. The alleged oral agreement is uncertain and cannot be
made certain, for which it cannot be specifically enforced in a court of law.
Mr. Mitra in this regard has relied upon Fry on Specific Performance
6th Edn.: Para 380 at Page 179.
The plaintiff having failed to prove the alleged contract between him
and the defendant no.1, it is immaterial to examine the legality and validity
of the sale of the suit property by the defendant no.1 to the defendant no.2
by the registered deed of sale dated 21st February, 2003.
The plaintiff in the instant case has failed to prove the agreement of
which he is seeking specific performance. An oral agreement for sale,
without anything more, is invisible in nature. The evidence of the Plaintiff
in the instant case is sketchy and contradictory. The witnesses who have
sought to support the Plaintiff's story have not been able to identify the so-
called agreement. The plaintiff admittedly has not been in possession of the
suit property at any point of time. The Division Bench of this Hon'ble Court
in Sukumar Samanta & Ors. Vs. Sibdas Roy & Ors., reported at
2008(4) CHN 704 [paragraphs 17 and 18] has taken note of similar facts
to negate the claim of the Plaintiff for specific performance of an agreement
for sale.
Mr. Mitra submits that the subject property was a clean property at
the time the appellant/defendant no.2 had entered into the agreement for
purchase with the defendant no.1. The appellant is a bona fide purchaser
19
for value and such fact would be corroborated by the cross
examination of the defendant no. 2 where the witness has averred that he
was not aware of any purported agreement between the plaintiff and
defendant no. 1 regarding sale of the suit property at a consideration of
Rs.1,25,00,000/- prior to 29th April, 2002. There is no further cross
examination based on this question which implies that the plaintiff had
admitted and accepted the same.
Mr. Mitra submits that findings of the trial court on the issue with
regard to validity of the so-called agreement between the plaintiff and the
defendant no.1 and thereby negating the registered agreement between the
appellant and the defendant no.1 is on a complete mis-appreciation of
evidence and contrary to law.
Mr. Mitra submits that the averments made in the plaint would show
that no case has been made out in the plaint or in the evidence of the
plaintiff with regard to declaration that the deed of conveyance dated 21st
February, 2003 was null and void. The learned trial Judge has failed to
appreciate that the evidence led by the plaintiff was not in consonance with
the pleadings and could not have relied upon or looked into such evidence
at all in deciding the matter. The learned trial Judge did not frame any
issue relating to a declaration that the deed of conveyance dated 21st
February, 2003 is null and void. The learned trial Judge completely
overlooked that the statement of accounts as well as the bank
reconciliation statement of the appellant dated 29th April, 2003 which
clearly shows the debit of Rs.15,00,000/- on 29th April, 2002 from the
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account of the appellant in favour of the defendant no.1 It also clearly
shows that the said payment was made in furtherance of a deed of sale.
Mr. Mitra submits that the learned trial Judge has failed to take into
consideration that the appellant is not a signatory to a purported draft
agreement allegedly executed between Homco and Kishorilal. The said
agreement has not been signed by Homco, the main vendor in the
agreement and is an unexecuted agreement. The reference to Golden Trust
in the said unexecuted agreement could not have been construed by the
learned Single Judge against the appellant. The appellant had knowledge
of the purported agreement being a partner of Golden Trust. The plaintiff
has deliberately not prayed for cancellation of the said deed dated 21st
February, 2003 and neither any issue in relation to cancellation of the sale
deed executed between the defendant no.1 and the defendant no.2 (the
appellant) had been framed by the learned Single Judge. The suit is clearly
barred under Section 22 of the Specific Relief Act.
The plaint does nowhere speak of the invalidity of the sale on the
ground that such alienation in favour of the appellant was void because of
the principles of the lis pendence under Section 52 of the Transfer of
Property Act.
On such consideration it is submitted that the decision of the trial
court declaring that the sale deed executed between Homco and Sona is
null and void is without jurisdiction. Mr. Mitra in this regard has relied
upon the decision of the Hon'ble Supreme Court in Shivaji Balaram
21
Haibatti v. Avinash Maruthi Pawar: 2018 (11) SCC 652, paragraph 26
and Jharkhand State Electricity Board v. Anirudh Sahu: 2018(18)
SCC 330 paragraph 6.
Mr. Mitra submits that the court could not have travelled beyond the
pleadings and the evidence adduced and granted relief to the decree holder
by declaring that the sale deed executed between the defendant no.1 and
defendant no.2 is null and void. Mr. Mitra submits that no decree can be
passed in favour of the plaintiff. It is the fundamental rule in civil suit that
relief can only be granted with respect to the prayers in the pleadings. No
amount of evidence on a plea that is not based on the pleadings can be
looked into by way of evidence.
The Deed of Sale of the suit property in favour of Defendant no.2 was
registered, and the registration was completed on June 29, 2005. It is
submitted that in terms of Section 54 of the Transfer of Property Act, 1882,
sale is a transfer of ownership in exchange for a price paid or promised or
part paid and part promised. Under Section 47 of the Registration Act, once
registration is effected, the title under the sale deed relates back to the date
of its execution. Hence, though the registration in the instant case was
completed on June 29, 2005, the Transferee's title under the said deed
related back to the date of its execution i.e. February, 21, 2003 as clearly
held in Hamda Ammal Vs. Avadiappa Pathar & Ors., reported in
1991(1) SCC 715 @ 721 paragraphs 9 and 12) and Principal Secretary,
Government of Karnataka & Ors., Vs. Ragini Narayan & Ors., reported
in 2016(10) SCC 424 @ 429-430 paragraphs 13 to 15).
22
Mr. Mitra submits that the plaintiff having failed to prove the alleged
agreement for sale is not entitled to a decree for specific performance and
accordingly the decree is liable to be set aside.
Per contra Mr. Maloy Ghosh the learned Advocate representing the
decree holder has submitted that the plaintiff has filed the suit for specific
performance on the basis of an oral agreement duly recorded in the letter
dated 21st December, 2002 which mentions the following agreed terms:
i) Consideration for sale was Rs.1.25 crores.
ii) Out of the total consideration of Rs.1.25 crores a draft
amounting to Rs. 10 lacs would be issued in the name of Homco
Engineering Works (Pvt.) Ltd. (Defendant No.1) and another draft
of Rs.50 lacs would be issued in the name of Howrah Motors
Company.
iii) After receiving Rs.60 lacs the defendant no.1 would hand over
possession of the suit property.
iv) The balance consideration amount would be paid in cash or
cheque at the time of registration of the sale deed.
v) The proof of oral agreement was duly recorded in the letter
dated 21st December, 2002 was duly briefed by the plaintiff to the
appellant defendant.1.
Mr. Ghosh submits that Kishorilal in his evidence has clearly stated
the circumstances in which the oral agreement came into existence. Mr.
Ghosh has referred to paragraph 2, 4, 7, 8 and 9 of the affidavit of evidence
of Kishorilal in this regard.
23
Kishorilal during his cross-examination has duly controverted that
no oral agreement was entered into and in proof of such oral agreement
had produced two witnesses namely Mr. Baid and Pulak who were present
at the time of negotiation and in whose presence the parties had agreed on
the terms mentioned above.
Mr. Ghosh submits that the essential terms of the agreement
mentioned in the letter dated 21st December, 2002 is proved by the plaintiff
and the two other witnesses namely Baid and Pulak. The said two
witnesses in their chief has deposed regarding the existence of an oral
agreement between the plaintiff and the defendant no.1 for sale of the
property in question and also the circumstances in which the oral
agreement has been entered into between the parties. The evidence of PW2
and PW3 would corroborate with the evidence of PW1 with regard to the
existence of the oral agreement. They have also during their cross-
examination indicated in detail their role in the negotiation and their
participation in the dealings leading to the contract for sale of the suit
property between the plaintiff and the defendant no.1.
Mr. Ghosh submits that the oral agreement as pleaded by the
plaintiff was acted upon by the parties which would be evident from the
payment schedule indicated below:
DATE MODE AMOUNT
21.12.2002 Cheque No. 32539 on Corporation 1,00,000
bank, Kolkata in favour of Defendant
24
no.1
21.12.2002 Cheque No.32592 on Corporation 1,00,000
Bank, Kolkata in favour of Howrah
Motor Co. Ltd.
2.2.2003 Cash 6000
8.2.2003 Cash 2,44,000
24.1.2003 Cheque no.52596 on Corporation 3,00,000
Bank
21.2.2003 Cash 2,00,000
9.3.2003 Cash 50,000
The said payments have not been disputed by the Homco. It would
thus, appear from the aforesaid schedule that as on 9th March, 2003 an
aggregate sum of Rs.10,00,000 was paid by the plaintiff to the defendant
no.1 on several dates as mentioned above.
The first draft of the agreement proposed to be entered into was
made over under cover of letter dated 21st December, 2002. The draft
agreement was marked as Exhibit 1 through PW1. The handing over of the
draft agreement to the defendant no.1 in the chamber of the Advocate in
presence of PW2 and PW3 was also confirmed in the cross examination by
PW1. Even PW2 and PW3 in their affidavit in chief duly confirmed the fact
of draft agreement being handed over. The same was also stated in cross
examination by PW2 and PW3.
The readiness and willingness on the part of the plaintiff is manifest
from the payment schedule. At regular intervals the plaintiff tendered
25
payment to the defendant no.1 in the mode agreed. The defendant no.1 has
never complained regarding any delay or breach on the part of the plaintiff
to make payment as promised. The readiness and willingness of the
plaintiff would further be confirmed from the fact that immediately upon
passing of the decree the plaintiff deposited the balance consideration
amount.
Mr. Ghosh submits that the materials on record would reveal that
the defendant no.1 committed breach of the oral agreement by purporting
to execute a deed of sale with the appellant on 21st February, 2003. It is
important to note that at the relevant time when the purported deed in
favour of the defendant no.2 was alleged to have been executed it had no
legal existence and/or validity in the eye of law as it was not registered
under the provisions of the Registration Act.
Mr. Ghosh submits that in view of Section 54 of the Transfer of
Property Act, 1882 sale of immovable property and value about Rs.100/-
can only be by a registered instrument and it becomes complete and
effective only when it stands registered and hence the fiction of relation
back of registered document to the date of its execution created by Section
47 of the Registration Act, 1948 would not be applicable to a deed of sale of
immovable property before its actual registration.
Mr. Ghosh submits that since the said agreement for sale is void ab
initio there is no requirement to file a suit for cancellation of the said
agreement.
26
Mr. Ghosh submits that in the written statement the appellant has
professed to be the bona fide purchaser of the property and has got
physical possession of the same. The appellant alleged to have paid a sum
of Rs.15,00,000/- on 29th April, 2002 and the last payment on 19th
February, 2003 and thereafter on the same date a sale deed was executed
between the appellant and the defendant no.1 and was presented for
registration on commission in Siliguri before the Additional Sub-Registrar
Siliguri. The registration was completed on 29th June, 2005 after depositing
the deficit stamp duty.
Mr. Ghosh submits that search report in respect of the property was
not produced by the advocate conducing search on the pretext that those
reports were misplaced.
Mr. Ghosh submits that the appellant has failed to prove that the
appellant is a bona fide purchaser within the meaning of Section 19 of the
Specific Relief Act, 1963. The said Section contemplates that the appellant
should be a transferee for value but has paid the consideration in good
faith and did not have notice of the prior agreement. The appellant in her
written statement did not make out any case of oral agreement or a written
agreement for sale preceding the deed of sale executed on 21st February,
2003.
The appellant alleged to have made payments between 29th April,
2002 and 21st February, 2003. The appellant however has failed to prove
such payment. The appellant relied upon the memo of consideration
27
of the deed executed in her favour to corroborate her case of part payment
which she claimed to have paid but during trial she could not produce the
books of account or any cogent evidence to show that actual payment was
made towards the consideration amount.
The appellant partnership firm was in possession of the suit
property carrying on business as a sub tenant.
The said partnership firm of the appellant, Golden Trust, was a
party to the Title suit No.49 of 2002 filed by the Maulin Estate against
Defendant No.1 for specific performance of the agreement entered into by
defendant no.1 with the said Maulin Estate and they were aware of an
order of injunction subsisting in respect of the said property passed in the
said title suit in favour of Maulin.
The appellant with the knowledge of such injunction subsisting
since 26.7.2002 has allegedly made part payments on several dates. Mr.
Ghosh has submitted that several significant incidents had happened on
21st February, 2003. On that day an alleged Memorandum of
Understanding (MOU) was entered into by and between Homco and Maulin
Estate for settlement of T.S. 49 of 2002 and cancellation of the agreement.
An amount of Rs.10,00,000/- alleged to have been paid by the appellant by
a demand draft to the defendant no.1. The alleged deed of sale between the
appellant and the defendant no.1 was executed and presented for
registration.
28
At the time when payments were made by the appellant and the
deed was executed and presented for registration Title Suit No.49 of 2002
was pending before the Court of Learned Civil Judge, Senior Division,
Siliguri to which the defendant the partnership firm of the appellant was a
party. The said Title Suit No.49 of 2002 was finally disposed of on
compromise on 27th May, 2003 after the deed was executed and presented
for registration by the appellant.
The suit property claimed to have been purchased by the appellant
as "bona fide purchaser" was the subject matter of not only an agreement
for sale entered into by and between the defendant no.1 and Maulin Estate
but a suit for enforcement of such agreement was pending before a Civil
Court being T.S. No.49 of 2002 in which an order of injunction was
subsisting. All such facts were within the knowledge of the appellant/
defendant no.2 as would appear from the compromise petition itself.
The defendant no.1 committed breach of the oral agreement by
purporting to execute a Deed of Sale with the appellant/defendant no.2 on
21st February, 2003.
The instant suit was filed by Kishorilal at a point of time when the
purported deed in favour of the defendant no.2 had no legal existence in
the eye of law not being registered under the provisions of the Registration
Act. Mr. Ghosh submits that the completion of registration of the Deed of
Sale on June 29, 2005 after institution of the instant suit is thus covered
by the principle of lis pendence envisaged under Section 52 of the Transfer
29
of Properties Act, 1882 in view of the decision in Har Narain (Dead) by
Lrs. v. Mam Chand (Dead) by Lrs. & Ors., reported in 2010(13) SCC
128wherein at paragraph 23 it has been held that:
"as sale stood completed during the pendency of the suit, the doctrine of lis
pendence is applicable in the facts and circumstances of the case and the
doctrine of relating back under Section 47 of the Registration Act would not
have any application".
The purported Deed of Sale [Exht.I] cannot be looked into as the
registration of Deed of Sale was completed on 29th June, 2005 during
subsistence of interim order of injunction dated 11th May, 2005 passed by
the Hon'ble High Court at Calcutta in CAN 4039 of 2005 in FMAT No.1308
of 2005 [arising out of the order dated February 10, 2005 (LCR)] wherein
the Hon'ble Court interalia held that-
"After hearing the Ld. Adv. For the parties and after going through the
materials we pass an order of status quo as regard the nature & character
of the property and restraining the respondents from transferring the
property."
Mr. Ghosh submits that any Deed executed in the teeth of the
injunction order is void, is well accepted and in this regard Mr. Ghosh has
relied upon the decision in Jehal Tanti & Ors. v. Nageshwar Singh
(Dead) through Lrs., reported in 2013(14) SCC 689 [paragraphs 5, 6, 10,
11, 13 and 14].
It is submitted that the provision of Section 47 of the Registration
Act, 1908 does not mean in the facts and circumstances of the present case
that the illegal registration would relate back to the date of execution of the
30
sale deed i.e. February 21, 2003. Accordingly, in the facts of the present
case, Sona Majumder, the appellant/defendant no.2 is not and should not
be held to be a purchaser or a bona fide purchaser for value in good faith
without notice of the suit property. As a result thereof, Sona Majumder, the
appellant/defendant no.2 cannot take benefit of Section 19(b) of the
Specific Relief Act, 1963.
Mr. Ghosh has also relied upon the decision in Avinash Kumar
Chauhan v. Vijay Krishna Mishra reported in 2009(2) SCC 532
[(paragraphs 14, 17, 24, 25 and 26)] in support of his contention that the
words 'for any purpose' in Section 35 of the Stamp Act, 1899 should be
given their natural meaning and effect and would include any collateral
purpose and that the insufficiently stamped Sale Deed (as on the date of
institution of the present suit) cannot be used to corroborate the oral
evidence of Partha (DW1) and Bhabesh (DW2).
Mr. Ghosh submits that there are also other suspicious
circumstances surrounding the deed of sale. They are:
i. The Declaration in the recital at page 3 of the deed claiming the
property to be free from all encumbrances is false and false to the
knowledge of the appellant.
ii. Documents purporting to be the sale deed relied upon by the
appellant does not bear the signature and the photograph of the
appellant/purchaser or the vendor as required by Section 32(A) of
the Registration Act.
iii. The property is still shown in the balance sheet of the defendant
no.1 company."
31
Mr. Ghosh submits that it is significant to note that the appellant/
defendant no.2 did not come forward as a witness proving her case. The
husband of the appellant gave evidence claiming that negotiations were
done by him. The Dw2 deposed that during 1996-1997 payments have
been made through Cheque and Demand Draft and he could not remember
whether any bank document was filed showing such payments. He stated
that no statements of accounts were filed before the Court showing that the
transaction was made from the account of his wife. DW2 could not
remember whether any documents were filed regarding agreement for sale
for the said property of Rs.76 lacs. DW2 said that he does not know
whether any inquiry was made before purchase of the suit property. He
also stated that neither he nor his wife made any inquiry before Registrar of
Companies whether the suit property is charged or not.
DW2 specifically deposed that he was not present during
registration of the sale deed. He was unable to say whether his wife was
present during registration of sale deed.
It is submitted that mere payment of Rs.15,00,000/- on 29th April,
2022 purporting to evidence a prior agreement does not create a better
right in favour of the appellant in view of there being a subsisting order of
injunction in respect of the suit property as on that date to the knowledge
of the appellant whose partnership firm was a party to T.S. 49 of 2002. In
fact, this deed shows that the deal entered into by the defendant appellant
was not in good faith.
32
Bhabesh Majumder, the husband of Sona Majumder, was a mere
power of attorney holder of Sona Majumder and not competent to adduce
evidence on behalf of Sona Majumder. In this context, Mr. Ghosh has relied
upon the decision in Janki Vashdeo Bhojwani & Ors., v.Indusind Bank
Ltd. & Ors., reported in2005(2) SCC 217 [paragraphs 10, 11, 12, 13, 14,
17, 18, 19, 20, 21 and 22].
Mr. Ghosh has submitted that adverse inference is required to be
drawn against Homco as Partha could not prove that the money received by
Partha on behalf of Homco was unrelated to the sale of the property. It is
submitted that irrespective of such adverse inference it is well established
that the defendant no. 2 could not make a claim of a bona fide purchaser
for value in good faith and without notice. Mr. Ghosh has prayed for
dismissal of the appeal.
In the light of the submissions made on behalf of the parties the
pleadings and the evidence on record the merits of the appeal are to be
decided.
The first and foremost question that arises for determination is
whether the plaintiff Kishorilal was able to prove existence of an oral
agreement of which specific performance was granted.
In a suit for specific performance the plaintiff has to aver and prove
that there is a concluded agreement between the parties and the plaintiff
was ready and willing to perform his part of the contract and he has
33
performed or has always been ready and willing to perform the essential
terms of the contract which are to be performed by him.
The evidence with regard to the existence of the oral agreement for
sale of the property is unclear, unsubstantiated and uncertain. The
agreement pleaded in the plaint and the agreement alleged to have been
forwarded under cover of the letter dated 21st December, 2002 being Exbt.1
is not the agreement of which specific performance has been prayed for by
the plaintiff. The law as it stands is not an obstacle in allowing specific
performance of an oral agreement for sale of an immovable property. Mr.
Ghosh was unable to clear which of the several agreements were sent to
Partha for confirmation and acceptance as the draft agreement for sale
annexed to the plaint records certain transactions in the recitals which
could not have been forwarded on 21st December, 2002. The agreement or
the terms of the agreement duly settled in the chamber of Mr. Ganguly has
not been disclosed or surfaced.
Mr. Moloy Ghosh has strenuously argued that the oral agreement is
recorded in the letter dated 21st December, 2002. For the sake of
convenience the said letter is reproduced below:
M/s. Homco Engineering Works (P) Ltd. 21st Dec.2002
1/1 Shashekhar Bose Road,
Kolkata 700 021
Sub: Earnest Money Deposit against sale of your property at
Burdwan Road, Siliguri Rs.2,00,000/-
Dear Sir,
34
This has reference to the meeting held on 19th December, 2002 at
Calcutta Swimming Club with your Director Mr. Partha Dey, in presence of
Sri Pulak Chaudhury wherein it has been agreed that you will sell the above
property free from all encumbrances for a sum of Rs.1.25 crores on the
agreed following terms and conditions and accordingly two cheques of Rs.1
lac each are enclosed herewith along with draft agreement for sale for your
kind approval.
That out of the total consideration Rs.1.25 crores, one draft in the
name of M/s. Howrah Motor Co. Ltd. Of Rs.50 lacs and another of Rs.10 lacs
in the name of M/s. Homco Engineering Works (P) Ltd will be made and
Xerox copy of the same will be handed over to Sri Partha Dey so that he will
go to Siliguri and hand over the possession after obtaining two drafts of
Rs.60 lacs.
I will also arrange cash or draft to the tune of Rs.10 lacs to settle the
other liabilities if so required. Balance amount are payable at the time of
registration of Sale Deed.
You are requested to accept the draft and settle the "Agreement for
sale". (emphasis supplied)
Enclo: As above Yours faithfully.
Sd/- Kishorilal Agarwal
The letter dated 21st December, 2002 does not refer to an oral
agreement. It records a meeting of 19th December, 2002 at Calcutta
Swimming Club with Partha of Homco in presence of P. Chowdhury in
which it was agreed that the property would be sold free for all
encumbrances for a sum of Rs.1.25 crores on the agreed terms of
conditions and two cheques of Rs.1 lac each were enclosed along with draft
agreement for sale for approval. It also records that one draft in the name
of Howrah Motor Company Private Limited of Rs.50 lacs and another of
Rs.10 lacs in the name of M/s. Homco Engineering Works Private Limited
would be made and Xerox copy of the same would be handed over to Partha
so as to enable Partha to go to Siliguri and hand over the possession after
obtaining two drafts of Rs.60 lacs. This draft agreement has not seen the
35
light of the day. Moreover, Partha was requested to accept the draft and
settle the agreement for sale. This has not happened.
The said letter significantly refers to the existence of a draft
agreement and a request was made to Homco to accept and settle the
alleged agreement for sale. If it is assumed that the second paragraph of
the aforesaid letter contains the proposed terms and conditions then Exbt.
1 supposed to have been sent with the letter would have mentioned such
terms in the said draft agreement. However, significantly, the draft
agreement being Exbt.1 is different from what is stated in the second
paragraph of the said letter. Kishorilal could not produce any draft
agreement claimed to have been forwarded with the letter and he admitted
that Exbt.1 is not "the draft agreement". Then the question would arise
which agreement the plaintiff is seeking to enforce. This letter was followed
by a letter dated 24th January, 2003.
The said letter was written with reference to the letter dated 21st
December, 2002.
The said letter is reproduced below:
" M/s. Homco Engineering Works (P) Ltd. 24th January, 2003
1/1, Shashekhar Bose Road,
Kolkata - 700 021
Ref: My letter dated 21st December, 2002
Sub: Part Payment against above
Attention: Mr. Partha Dey
Dear Sirs,
36
Further to my above letter and your request for further payment I am
enclosing herewith a Cheque No.325396 dated 27.1.2003 for Rs.3.00 lakhs
(Rupees Three Lakhs) only of Corporation Bank, Dharamtolla Street Branch
in your favour being the part payment against the total consideration amount
as mentioned in the above letter for the whole property at Burdwan Road,
Siliguri. He agreed in presence of Mr. Raghunath Dey you are required to
handover the agreement by 25th evening and oblige and we will keep paying
you the balance amount as per payment schedule of the agreement.
(emphasis supplied)
Please acknowledge receipt of the above.
Thanking you,
Yours faithfully,
Sd/- Kishorilal Awarwal"
Enclo: As above
The aforesaid letter refers to a payment of Rs.3 lacs as part
consideration and a request for return of the agreement by 25th of January,
2003. It mentions the name of Mr. Raghunath Dey in whose presence such
handing over of the agreement was decided.
Kishorilal in his chief has stated that on 21st December, 2002 he
sent the draft copy of the agreement along with a sum of Rs.10 lacs as per
the concluded agreement to which the defendant no.1 that is Homco did
not respond. It is stated that Exbt. 1 is the copy of the draft agreement for
sale that was forwarded to Homco by a forwarding letter dated 21st
December, 2002. Thereafter Kishorilal has referred to carbon copy of
forwarding letter-cum- money receipt of Rs.3 lacs dated 27th January,
2003, original cheque of Rs.244,000/- dated 5th February, 2003, bank
voucher of Indian Overseas Bank and a money receipt dated 9th March,
2003 in his attempt to show that the oral agreement for sale was acted
upon and accepted by Homco. However, in the cross-examination he has
37
stated that he handed over a draft agreement to the defendant Homco after
paying him Rs.2 lacs on 21st December, 2002 and the agreement which he
had filed that is Exbt.1 is not that agreement. Apart from Exbt.1 there is
no other agreement produced by Kishorilal. The question that would
obviously arise then from which document or correspondence the essential
terms of and alleged oral agreement can be inferred. Kishorilal referred to
the letter of 21st December, 2002 in which according to Kishorilal the
parties have agreed to certain terms and conditions which would be
reflected from the draft agreement for sale and that was forwarded to
Partha for acceptance and returned.
Mr. Mitra has rightly remarked while placing the said letters that it is
like a Jigsaw Puzzle and reminds us of the famous oft quoted lines from
Alice in Worderland by Lewis Carol that it becomes "curiouser and
curiouser".
Mr Ghosh is unable to demonstrate any evidence or any
communication from Partha accepting any of the terms mentioned in the
letter dated 21st December, 2002 or acknowledging the draft agreement.
The subsequent letter of 24th January, 2003 also in any way assist the
appellant as the appellant has failed to prove any agreement that Partha of
Homco had agreed to sale the said property in presence of Mr. Raghunath
Dey and also agreed to hand over the agreement by 25h Januray, 2003.
The payment schedule in the letter of 24th January, 2003 is different from
the payment schedule mentioned in the letter dated 21st December, 2002.
However, in the meantime certain developments have taken place. The suit
38
filed by Maonil Estate Private Limited against Homco and others being Title
Suit no. 49 of 2002 for Specific Performance of contract and other reliefs
were in the process of settlement and Homco was receiving moneys in
tranches from the appellant not only to free the said property from
encumbrances but other encumbrances as well it would be clear from the
Exbt. 14 namely, the joint verified petition on 21st February, 2003 by
Maonil Estate and Homco regarding compromise. The learned Civil Judge
Senior Division Siliguri disposed of the suit on the basis of the terms and
conditions mentioned in paragraph 4 of the said petition. For the time
being we may refer to Clause 4(a) and 4(b) of the compromise petition
which reads:
"4. The following are the terms and conditions of Sulehanama
(compromise) which will be (sic) form a part of the judgment and decree of
this learned Court binding all the parties to act accordingly-
a) The defendant no.1 has paid to the plaintiff the sum of
Rs.10,00,000/- (ten lacs) vide no. 001465 in lump-sum towards
compensation and incidental charges, whatever name may be called by
bank draft/payment drawn in favour of 'Maonil Estates Private Ltd. payable
by any bank in Kolkata or Siliguri, in full and final settlement of the
plaintiff.
b) On payment of said sum of Rs.10,00,000/- by bank draft/
payment and on encashment of said payment, the agreement of sale dated
25.09.2001 shall come to an end the same shall be for all purposes be
39
treated as determined or cancelled having no force of law." (emphasis
supplied)
This money was admittedly paid by appellant to Homco which
would be evident from the "receipt of memo of consideration" in the deed of
sale dated 21st February, 2003 between of Homco and Sona in relation to
the said property.
The receipts and memo of consideration in the said deed is
mentioned hereinbelow:
Receipt and Memo of Consideration
Received from the within names purchaser the within mentioned
sum of Rs.76,00,000/- (seventy six lakhs) only towards the full final
payment of the consideration for sale of the said premises of the
SCHEDULE herein before in the following manner.
Sl. Banker's cheque no. Date Bank Amount
No.
1 D.D. No. 076440 29.04.2002 Standard 15,00,000/-
payable to Homco Chartered
Engineering works pvt.
Ltd.
2 Demand Draft no. 30.05.2002 Andhra Bank 32,59,223/-
618898-618996 Centurian
Bank 40,000/-
Cheque no.192643-44 03.06.2002 UTI
25,000/-
Cheque no.000075-77 03.06.2002
3 D.D. No.001466 19.02.2003 Standard 15,00,000/-
payable to Homco Chartered
Engineering Works Pvt.
Ltd.
4 D.D. No.001465 19.02.2003 Standard 10,00,000/-
40
payable to Maonil Chartered
Estates(P) Ltd.
5 Cash 2,75,777/-
Total 76,00,000/-
It would appear from the receipt and memo of consideration that
between 29th April, 2002 and 3rd June, 2002 appellant has paid a sum of
Rs.48,24,232/- out of the agreed consideration of Rs.76 lacs much prior to
Kishorilal's alleged oral agreement with Partha. Moreover the cheque
referred to in paragraph 4(b) of the Compromise petition is the cheque
issued by Sona in favour of Maonil enabling Homco to pay off the agreed
compensation. The evidence of Bhabesh would show that on 3rd June, 2002
physical possession of the said property was delivered by the defendant
no.1 to Sona during the pendency of the suit filed by Maonil Estate against
Homco and others. In the suit filed by Maonil an order was passed on 26th
July, 2002 in terms of which Maonil contended that Homco is likely to
transfer the suit property in breach of the existing agreement either to
Golden Trust Financial Services the partnership firm or to any third party
and the learned trial Court on 26th July, 2002 restrained the respondent
including Homco from transferring, alienating any portion of the suit
property either in favour of Homco or to a third party till disposal of the
injunction petition. The evidence of Bhabesh regarding prior agreement
and possession is established. If we rely on Exbt.1 it also records the name
of Golden to be in possession. Mr. Ghosh claimed that Sona is one of the
partners of the said partnership firm. It is immaterial in what capacity
Sona had purchased the said property but the transaction between Sona
41
and Homco is spread from 29th April, 2002 to 19th February, 2003. In fact,
the sale deed with Sona would show that the appellant had paid a sum of
Rs.10 lacs directly to Maonil Estates towards settlement of the dispute. The
compromise petition filed by Maonil and Homco record payment of the said
sum. The memo of consideration would show that the appellant has been
paying different sums at different times to Homco in order to enable Homco
to discharge its various liabilities and in furtherance of an agreement to
sale the property in her favour. As opposed to a definite pattern of
transaction that had culminated in an agreement for sale Kishorilal had
failed to prove and establish that Kishorilal had entered into any agreement
for sale with Homco and on the basis of such "mutual agreed terms"
Kishorilal had performed his obligations and was ready and willing to
perform the rest of the obligations. We find from evidence that even a
payment of Rs.2.44 lacs by cheque no. 325400 dated 04.03.2003 was
returned dishonoured on 7th February, 2003 with the remark "insufficient
fund" which really raises a serious doubt about financial capability and
capacity and willingness of Kishorilal to pay a sum of Rs.1.25 crores in
terms of the alleged oral agreement. Significantly, the said fact would
appear from the alleged draft agreement for sale being Exbt.1 which
according to Kishorilal was sent along with letter dated 21st December,
2002. The said agreement refers to payment made in 2003 by cheque or
cash and makes it "curiouser and curiouser" The said agreement obviously
was brought into existence by Kishorilal for the purpose of the suit.
42
Mr. Jayanta Kumar Mitra, leaned Senior Counsel has emphasised
that there are inconsistency in the pleadings with regard to the agreement
of which the plaintiff has claimed specific performance.
Mr. Ghosh possibly realizing that it would be difficult for Kishorilal if
not impossible to prove a concluded agreement between the parties on the
basis of the aforesaid two letters have made attempts to pin-prick the
loopholes in the agreement for sale between the appellant and the
respondent no.2. Mr. Ghosh has fairly submitted that apart from the said
letters and few receipts to show that moneys have been paid there is no
other evidence to prove the oral agreement for sale. However, he has
strenuously argued that the conduct of the parties following the
communications dated 21st December, 2002 is required to be taken into
consideration. It is submitted that Kishorilal has proved that between 21st
December, 2002 and 9th March, 2003 he has paid a sum of Rs.10 lacs in
aggregate. The said payments have not been disputed by Homco.
Significantly, there is no communication from the respondent no.1 in
response to the letter dated 21st December, 2002 accepting the terms.
Partha has denied to have received any draft agreement although he had
acknowledged receipt of few amounts and according to Partha it was not in
any way connected with any sale transaction. Kishorilal is a prudent
businessman. It was expected that when Kishorilal was entering into a
transaction of this magnitude he would have kept record of the
transactions and would insist for an acknowledgement of the agreed terms
in writing or at least a communication to that effect. It was alleged that
43
one Mr. Ganguli was the solicitor engaged to finalize the agreement. Mr.
Ganguli however was not produced as witness. There is no exchange of
any letter or correspondence between the parties wherefrom the court can
gather that the parties have agreed on the essential terms of contract. We
would have expected the essential terms to be reduced in writing with the
acknowledgement of both the parties and thereafter to demonstrate that
the plaintiff had performed his obligation and willing to perform the
essential terms of the contract or establish a course of conduct strongly
suggesting and justifying existence of an agreement.
Mr. Ghosh has clearly submitted that the plaintiff is not relying on
Exbt.1 but an oral agreement pleaded by the plaintiff and acted upon by
Homco which would appear from the payment schedule between 21st
December, 2002 and 9th March, 2003. The question would arise when
such oral agreement was entered into, between whom, before whom and in
what manner. If it is assumed that on 21st December, 2002 an oral
agreement was entered into followed by a draft agreement then the
agreement relied upon by the plaintiff in the suit for specific performance
could not be final draft agreement. There is also anomaly with regard to
the consideration amount. While the letter dated 21st December, 2002
mentions total consideration as Rs.1.25 crores but the draft agreement
being Exbt. 1 is incomplete on such essential element.
Our attention was drawn to Clause 9 of the draft agreement which
recorded that a total sum of Rs.9.50 lakhs has been paid to the purchaser
between 21st December, 2002 and 21st February, 2003. Clause 10 of the
44
said agreement refers to a further sum of Rs.10 lakhs to Howrah Motors by
a cheque dated 8th March, 2003 under the advice of Homco. If the recitals
were correct then the draft agreement could not have been sent before 8th
March, 2003 as the said amount was alleged to have been paid in cash on
that date i.e. 8th March, 2003.
It is also incomplete as it states in paragraph 12 and 13 of the said
agreement that a further sum of Rs.5 lakhs would be paid by Kishorilal to
Howrah Motors or to his nominee as per the advise of the vendor and upon
payment of a total sum of Rs.81 lakhs Homco would handover vacant
possession of the property to Kishorilal. The agreement does not say
anything about the payment of the balance consideration amount or the
period within which the said amount is to be paid. Apart from the aforesaid
the said draft agreement could not have been forwarded under cover of the
letter dated 21st December, 2002 being Exbt. 1.
It was in view of such insurmountable difficulties a story of an
alleged oral agreement was spun in a desperate attempt to nullify the
otherwise valid agreement for sale between the appellant and the defendant
no.1. We accept the submission of Mr. Mitra that the plaintiff was unable
to prove with certainty and with conviction as to what the so-called
contract of sale was and looked like. A contract which is uncertain cannot
be made certain in a suit for specific performance of contract. The court
cannot be asked to enforce specific terms which are uncertain. An oral
agreement for sale is invisible in nature and the evidence of the plaintiff in
the instant case is sketchy and contradictory.
45
Fry in his celebrated work "A treatise on the Specific Performance of
Contract" (6th Edition) paragraph 380 has elaborately discussed the
consequence of uncertainty of the contract. It states:
"....... Whilst in proceedings for specific performance it must appear not only
that the contract has not been performed, but what is the contract which is to
be performed. It is perhaps impossible to lay down any general rule as to
what is sufficient certainty in a contract; but it may be safely stated that the
certainty required must be a reasonable one, having regard to the subject
matter of the contract, and the circumstances under which and with regard to
which it was entered into......." (emphasis supplied)
The plaintiff does not say that the terms of the contract have been
originally uncertain, but the contract has been acted upon in such a
manner that at the end of the transaction it gives a shape of a concluded
contract. Moreover under the draft agreement of sale Kishorilal was
supposed to discharge various obligations and provide fund to Homco in
order to enable Homco to free the property from encumbrances and
thereafter to buy the property free from encumbrances. Kishorilal was
unable to prove that he discharged such obligations. It is elementary that
Specific Performance cannot be granted and allowed to be enforced at the
instance of a party who has failed to aver and prove that he has performed
or has always been ready and willing to perform the essential terms of the
contract which are to be performed by him other than the terms the
performance of which he has been prevented or waived by the defendant.
Any person seeking benefit of the specific performance of contract
must manifest that his conduct has been blemishless throughout entitling
46
him to the specific relief. The provision imposes a personal bar. The court
is to grant relief on the basis of the conduct of the person seeking relief. If
the pleadings manifest that the conduct of the plaintiff entitles him to get
the relief on perusal of the plaint he should not be denied the relief. [See.
Telikicherla Sesibhushan (Dead) by Legal Representatives v. Kalli Raja
Rao (Dead) by Legal Representatives and Ors., reported in 2014(15)
SCC 743 [paragraphs 7 to 11] and Lalit Kumar Jain & Anr. v. Jaipur
Traders Corporation Pvt. Ltd. reported in 2002(5) SCC 383 Kishorilal's
evidence does not establish his readiness to perform his obligations even if
we accept existence of an oral agreement.
There cannot be any two opinions that an oral agreement can be
specifically enforced. Neither the Specific Relief Act nor any law requires
that for enforcement of the agreement for sale the said agreement must be
in writing and accordingly an oral agreement for sale is also specifically
enforceable. (See. K. Nanjappa v. R.A. Hameed & Ors., reported in
2016(1) SCC 762).
The identity of the parties and that they have consented to the terms
of the agreement arrived at between them is essential. It is not essential
that the contract must in writing. If the agreement propounded is oral the
evidence produced must be reliable, acceptable and cogent. The evidence
in support of the oral agreement must be consistent and provide a clear
indication that the intention of the parties was to enter into such an
agreement. Kishorilal significantly did not lay much emphasis on the draft
agreement being Exbt. 1 and he refers to an oral agreement which he could
47
not prove. He could not give any cogent and satisfactory evidence with
regard to the time and place of such oral agreement and the circumstances
under which such agreement was entered into. Kishorilal for obvious
reason did not lay any claim on the draft agreement, Exbt.1 as recitals in
the said draft agreement would nullify any claim that the said draft
agreement was forwarded under the letter dated 21st December, 2002. We
wonder why in the first place the draft agreement was produced when it
was never intended to be relied upon in the suit for specific performance.
The letter dated 21st December, 2002 at the highest is an offer and in
absence of acceptance of the terms mentioned in said letter by the
defendant no.1 there is no concluded contract between the parties.
In K. Nazappa (supra) the Hon'ble Supreme Court while recognizing
that a decree for specific performance can be granted on the basis of an
oral contract has observed:
"21. There is no dispute that even a decree for specific performance can be
granted on the basis of oral contract. Lord Du Parcq in a case (AIR 1946 Privy
Council) observed, while deciding a suit for specific performance, that an oral
contract is valid, binding and enforceable. A decree for specific performance
could be passed on the basis of oral agreement. This view of a Privy Council
was followed by this Court in the case of Koillipara Sriramulu v. T. Aswatha
Narayana : AIR 1968 SC 1028, and held that an oral agreement with a
reference to a future formal contract will not prevent a binding bargain
between the parties.
22. However, in a case where the Plaintiff come forward to seek a decree for
specific performance of contract of sale of immoveable property on the basis
of an oral agreement or a written contract, heavy burden lies on the Plaintiff
to prove that there was consensus ad idem between the parties for the
48
concluded agreement for sale of immoveable property. Whether there was
such a concluded contract or not would be a question of fact to be determined
in the facts and circumstances of each individual case. It has to be
established by the Plaintiffs that vital and fundamental terms for sale of
immoveable property were concluded between the parties." (emphasis
supplied)
There is no requirement of law that an agreement or contract of sale
of immovable property should only be in writing. However, in a case where
the plaintiff comes forward to seek a decree for specific performance of
contract of sale of immovable property on the basis of an oral agreement
alone, heavy burden lies on the plaintiffs to prove that there was consensus
ad idem between the parties for a concluded oral agreement for sale of
immovable property. Whether there was such a concluded oral contract or
not would be a question of fact to be determined in the facts and
circumstances of each individual case. It has to be established by the
plaintiffs that vital and fundamental terms for sale of immovable property
were concluded between the parties orally and a written agreement if any to
be executed subsequently would only be a formal agreement incorporating
such terms which had already been settled and concluded in the oral
agreement. (See. Brij Mohan & Ors. v. Sugra Begum & Ors., reported in
1990 (4) SCC 147)
In the present case the plaintiff has failed to prove that there was a
concluded oral agreement between the parties on 21st December, 2002 or
subsequently. It is clear from the evidence that nothing was settled on that
49
date. It is elementary that in case of an oral agreement for sale there is a
necessity to prove of a fully concluded contract and essential terms thereof.
No judge would like to decide a case on burden of proof if he can
legitimately avoid having to do so. However, owing to the unsatisfactory
state of evidence or otherwise the court may decide the issue on the burden
of proof as that could be the only just course for him to take. The
reasoning of the learned Trial Judge can only apply when all factors are
known, so that all possible explanations except a single extremely
improbable one, can properly be eliminated. The legal concept of proof of a
case on balance of probabilities must be applied with common sense. It
requires a judge in the first instance before he finds that a particular event
occurred, to be satisfied on the evidence that it is more likely to have
occurred than not. If such a judge concludes, on a whole series of cogent
grounds, that the occurrence of an event is extremely improbable, a finding
by him that it is nevertheless more likely to have occurred than not, does
not accord with common sense. This is especially so when it is open to the
judge to say simply that the evidence leaves him in doubt whether the
event occurred or not, and that the party on whom the burden of proving
that the event occurred lies has therefore failed to discharge such burden.
(See. Rhesa Shipping CO SA v Edmunds reported in [1985] 2 All ER 712
followed in Kanti Devi Bhutoria and Others v Srila Dutta & Ors.,
reported in MANU/WB/0884/2015).
The Court can only enforce specific performance contract if it is based
on a valid and enforceable contract. Where a valid and enforceable contract
50
has not been made, the Court would not pass an order for specific
performance. The specific performance of the contract stipulates the terms
for execution and the Courts direct the party in default to do the very thing
which he contracted to do and the acceptance must be observed
corresponding to the terms of the offer.
The story of an alleged oral concluded agreement was so inherently
improbable and inherently inconsistent that it is not possible for a court to
grant such equitable relief on such unreliable evidence.
A Civil suit is decided on the preponderance of probabilities. The
standard of proof in civil trial has been lucidly explained recently by the
Hon'ble Supreme Court in M. Siddiq (D) thr. L.Rs. v. Mahant Suresh Das
&Ors., reported in 2020(1) SCC 1paragraphs 720-725 which reads:
"720. The court in a civil trial applies a standard of proof governed by a
preponderance of probabilities. This standard is also described sometimes as
a balance of probability or the preponderance of the evidence. "Phipson on
Evidence" formulates the standard succinctly: If therefore, the evidence is
such that the court can say "we think it more probable than not", the burden
is discharged, but if the probabilities are equal, it is not.114 In Miller v.
Minister of Pensions (1947) 2 ALL ER 372, Lord Denning, J. (as the Master of
Rolls then was) defined the doctrine of the balance or preponderance of
probabilities in the following terms:
(1) ... It need not reach certainty, but it must carry a high degree of
probability. Proof beyond reasonable doubt does not mean proof
beyond the shadow of doubt. The law would fail to protect the
community if it admitted fanciful possibilities to deflect the course of
justice. If the evidence is so strong against a man as to leave only a
remote possibility in his favour which can be dismissed with the
sentence, "of course it is possible, but not in the least probable" the
51
case is proved beyond reasonable doubt, but nothing short of that will
suffice.
721. The law recognizes that within the standard of preponderance of
probabilities, there could be different degrees of probability. This was
succinctly summarized by Denning, LJ in Bater v. Bater [1951] P. 35, where
he formulated the principle thus:
So also in civil cases, the case must be proved by a preponderance of
probability, but there may be degrees of probability within that
standard. The degree depends on that subject matter.
722. The definition of the expression 'proved' in Section 3 of the Evidence Act
is in the following terms:
3. ..... "Proved". --A fact is said to be proved when, after considering
the matters before it, the Court either believes it to exist, or considers
its existence so probable that a prudent man ought, under the
circumstances of the particular case, to act upon the supposition that it
exists.
723. Proof of a fact depends upon the probability of its existence. The finding
of the court must be based on:
723.1. The test of a prudent person, who acts under the supposition that a
fact exists;
723.2. In the context and circumstances of a particular case.
724. Analysing this, Y V Chandrachud J (as the learned Chief Justice then
was) in Dr. N G Dastane v. S Dastane (1975) 2 SCC 326 held:
The belief regarding the existence of a fact may thus be founded on a
balance of probabilities. A prudent man faced with conflicting
probabilities concerning a fact-situation will act on the supposition that
the fact exists, if on weighing the various probabilities he finds that
the preponderance is in favour of the existence of the particular fact.
As a prudent man, so the court applies this test for finding whether a
fact in issue can be said to be proved. The first step in this process is
52
to fix the probabilities, the second to weigh them, though the two may
often intermingle. The impossible is weeded out at the first stage, the
improbable at the second. Within the wide range of probabilities the
court has often a difficult choice to make but it is this choice which
ultimately determines where the preponderance of probabilities lies.
Important issues like those which affect the status of parties demand
a closer scrutiny than those like the loan on a promissory note: "the
nature and gravity of an issue necessarily determines the manner of
attaining reasonable satisfaction of the truth of the issue [Per Dixon, J.
in Wright v. Wright, (1948) 77 CLR 191, 210] "; or as said by Lord Denning, "the degree of probability depends on the subject-matter. In proportion as the offence is grave, so ought the proof to be clear [Blyth v. Blyth, (1966) 1 AER 524, 536] ". But whether the issue is one of cruelty or of a loan on a promote, the test to apply is whether on a preponderance of probabilities the relevant fact is proved. In civil cases this, normally, is the standard of proof to apply for finding whether the burden of proof is discharged.
725. The Court recognized that within the standard of preponderance of probabilities, the degree of probability is based on the subject matter involved.] (emphasis supplied) The plaintiff wants the existence of an oral agreement to be believed without clarifying the date on which such agreement was concluded and make us to believe that the draft agreement mentioned in the letter dated 21st December, 2002 is not the agreement mutually agreed. The plaintiff is completely silent about any other draft agreement which has reduced the fundamental and essential terms of the agreement intended to be executed. It is really becoming "curiouser and curiouser" and is getting increasingly confounding. The assertion of an oral agreement is to be proved by the plaintiff. For the court to give judgment in favour of the plaintiff as to his 53 legal right to claim execution of the deed of conveyance the existence of an oral agreement between the parties must be proved by Kishorilal as the burden of proof that there is an oral agreement and terms of such concluded legal agreement have been acted upon is on the plaintiff. The burden of proof on the pleadings never shifts and it remains constant. The initial burden of proving a prima facie case in his favour is cast on the plaintiff, when he gives such evidence as will support a prima facie case, the onus shifts on to the defendant to adduce evidence rebutting the case made out by the plaintiff. As the case continues to develop the onus may shift back to the plaintiff. It may not be easy in all cases to decide at what particular stage in the course of evidence the onus shifts from one side to the other. When after the entire evidence is adduced, the court feels it cannot make up its mind as to which of the versions is true, it will hold that the party on whom the burden lies has not discharged the burden. [See: K. Lakshmanna v T. Venkateswarlu reported at AIR 1949 PC 278].
Section 101 of the Evidence Act lays down the rule that "whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exits." In other words it is the same as saying that the burden of proof lies on the party who substantially asserts the affirmative of the issue and not on the party who denies it. The burden of proof in any particular case depends on the circumstances in which the claim arises. Burden of 54 proof would mean that a party has to prove an allegation before he is entitled to a judgment in his favour.
The tests that can conveniently be adopted for ascertaining on whom the burden of proof lies are first, to consider which party would succeed if no evidence were given on either side, and secondly to examine what would be the effect of striking out of the record the allegations to be proved; bearing in mind that the burden of proof must be on the party that would fail, if either of these steps were pursued.
Bowen, L.J., in the well-known case of Abrath v. N. E. Railway Co., 11 Q.B.D. 440 at 456, lays down the canons of this subject as follows: -
"Whenever litigation exists, somebody must go on with it; the plaintiff is the first to begin; if he does nothing he fails; if he makes a prima facie case, and nothing is done to answer it, the defendant fails. The test, therefore, as to the burden of proof or onus of proof, whichever term is used, is simply this; to ask oneself which party will be successful if no evidence is given, or if no more evidence is given than has been given at a particular point of the case, for it is obvious that, as the controversy involved in the litigation travels on, the parties from moment to moment may reach points at which the onus of proof shifts, and at which the tribunal will have to say that, if the case stops there, it must be decided in a particular manner. The test being such as I have stated, it is not a burden that goes on forever resting on the shoulders of the person upon whom it is first cast. As soon as he brings evidence which, until it is answered, rebuts the evidence against which he is contending, then the balance descends on the other side, and the burden rolls over until again there is evidence which once more turns the scale. That being so, the question of onus of proof is only a rule for deciding on whom the obligation of going further, if he wishes to win, rests. It is not a rule to enable the jury to 55 decide on the value of conflicting evidence. So soon as a conflict of evidence arises it ceases to be a question of onus of proof."
The burden of establishing a case is initially on the plaintiff but shifts as soon as a party adduces sufficient evidence to raise a presumption in its favour.
The plaintiff lost at the threshold of this test.
In a suit for specific performance of a contract the falsity of the defence story does not necessarily establish the truth of the plaintiff's story which must stand or fall on its own merits, independently of any inherent weakness in the defence case, per Justice Renupada Mukherjee in Nalini Nath Mitra & Anr. v. Bepin Behari Das reported in AIR 1956 Cal 525.
Plaintiff can only succeed on the strength of his own case. Kishorilal claimed that on April 4, 2003 he became aware of the sale in favour of Sona on February 24, 2003 and accordingly Sona was impleaded as defendant no. 2. Kishorilal did not pray for cancellation of the sale deed which in the fact and circumstances was necessary in view of considerations having passed in favour of Homco from Sona much before Kishorilal had entered into the so called oral agreement. In the plaint Kishorilal did not pray for cancellation of the deed and no issue was framed in that regard. Sona in the facts and circumstances cannot be said to be a transferee pendente lite. However the relief granted by the learned trial judge in effect results in cancellation of an agreement. It is trite law that relief not founded on pleadings cannot be granted. Any finding recorded on 56 an issue dehors the pleadings is without jurisdiction as held in Shivaji Balaram (supra) in paragraph 26. Moreover, decision on a premise that was not pleaded would be contrary to pleading and is patently illegal.
In Union of India (supra) it was held that:
"....... A decision of a case cannot be based on grounds outside the pleadings of the parties. No evidence is permissible to be taken on record in the absence of the pleadings in that respect. The Court cannot travel beyond the pleadings as no party can lead the evidence on an issue/point not raised in the pleadings and in case, such evidence has been adduced or a finding of fact has been recorded by the court, it is just to be ignored. Though it may be a different case where in spite of specific pleadings, a particular issue is not framed and parties having full knowledge of the issue in controversy lead the evidence and the court records a finding on it. (emphasis supplied) It is settled law that in a suit for specific performance a subsequent transferee is not required to be made a party and there may not be any need to seek for cancellation of the sale deed in favour of the subsequent purchaser as any such transfer would be hit by a doctrine of lis pendence. However, the effect of Section 52 is that the right of the successful party in the litigation in regard to that property would not be affected by the alienation, but it does not mean that as against the transferor the transaction is invalid. In Thomson Press (India) Ltd. v. Nanak Builders and Investors Private Limited reported in 2013(5) SCC 397, it was held the provision of Section 52 of the Transfer of Property Act, 1882, did not indeed annul the conveyance or the transfer otherwise, but to render it subservient to the rights of the parties to a litigation. There can be no doubt with respect to the position that the prohibition by application of the 57 principles of the said doctrine would take its effect with the institution of the suit. [See. Shivshankara & Anr. v. H.P. Vedavyasa Char in Civil Appeal No.10215 of 2011 decided on 29th March, 2023].
The property was free to be dealt with on or after 21st February, 2003 and by that time Sona had paid the entire agreed consideration amount of Rs.76 lacs as evident from the deed of sale executed on 21st February, 2003. The right of Sona to the property till such time was subsequent to Maulin.
In a fairly recent decision in P. Ramasubbamma v. V. Vijayalakshmi & Ors.: 2022(7) SCC 384 this principle has been reiterated. It was held that in a suit for specific performance it is not necessary for the buyer under a prior agreement to sell (the agreement holder) to seek cancellation of sale deed executed in favour of a subsequent purchaser. Rather, it is sufficient to implead the subsequent purchaser in the suit and seek relief of specific performance against the original owner and also seek direction to the subsequent purchaser to join in the execution of the sale deed in order to completely convey title to the agreement holder. [See. Paragraphs 5.3 and 16] In the said decision the Apex Court in paragraph 16 has quoted with approval the observation in Durga Prasad and Ors. v. Deep Chand & Ors., reported in AIR 1954 SC 75 with regard to the nature of the decree to be passed in the following words:58
"16. In light of the aforesaid factual aspects and the findings recorded by the learned trial court, the decision of this court in Durga Prasad (supra) is required to be referred to. In paragraph 42, it is observed and held as under:
42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor;all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin AIR 1931 Cal 67 and appears to be the English practice. See Fry on Specific Performance 6th Eds. P. 90 para 207. We direct accordingly.
The aforesaid decision has been subsequently referred to and followed by this court in the subsequent decision in Rathnavathi." The said decision has also clearly stated that the passing of consideration under a sale deed cannot be questioned by a third party.
In the instant case, even if it is assumed and accepted that there is a legally valid and enforceable oral agreement between Kishorilal and Homco the evidence on record strongly suggest a prior agreement for sale in favour of Sona and vis a vis the transaction between Sona and Homco, Kishorilal was a third party. Moreover, the execution of the sale deed by Homco in favour of Sona has not been disputed. In the aforesaid background there was a requirement for Kishorilal to impeach the sale deed and to pray for cancellation of the said agreement if he perceived any foul play or fraudulent dealings between Sona and Homco. This case has not been made out in the pleadings. In Siddik Mohamed Shah v. Mt. Saran reported in AIR 1930 PC 57, Viscount Dunedin expressed the view that no 59 amount of evidence could be looked into upon a plea which was never put forward.
Mr. Ghosh has laid much emphasis on the subsisting order of injunction and the effect of registration on the sale transaction between Sona and Homco. If the said argument is taken seriously then Kishorilal's oral agreement would fall foul of the same as on the date of such alleged agreement, assumed to have been entered into on 21st December, 2002 an order of injunction was subsisting in relation to the suit property in favour of Maulin in its pending suit for specific performance. This embargo was cleared when Maulin was fully paid off on 21st February, 2003 by Sona. This passing of consideration by Sona in favour of Homco is clearly borne out from the deed of sale and passing of this consideration cannot be questioned by Kishorilal. Moreover there is no pleading to the effect that the consideration did not pass in favour of Homco under the said deed of sale and it is a sham transaction.
Almost at the conclusion of the hearing of the appeal Mr. Raghunath Dey on behalf of Homco filed an application to bring on record certain documents to nullify the transactions between Homco and Sona and Homco and Kishorilal. Homco has not preferred any appeal. The said application is thoroughly misconceived. In fact, Partha on behalf of Homco filed written statement on behalf of Homco and was contesting the proceedings on behalf of Homco in the suit filed by Maulin and Kishorilal concerning the self-same property. Raghunath Dey could not explain as to why the documents that are now sought to be relied upon to nullify both 60 the transactions could not have been produced in the suit and in the appeal earlier. In fact Homco was not represented in the appeal for a long time in spite of service of notice and after several attempts being made and on being compelled to appear and tried to make out a completely different case not pleaded in the written statement. Significantly, Raghunath Dey did not support Kishorilal about him being a part of any discussion for sale of the said property. However, the same is not considered relevant as we have dealt with the matter in detail on merits. It is simply a ploy to set at naught the concluded transactions with an ulterior motive and after having received the consideration amount. The differences between Partha and Raghunath attempted to be raised cannot be considered now.
Under such circumstances the judgment and decree dated 30th July, 2014 is set aside.
The appeal is allowed.
The learned Registrar General is directed to return the amount of Rs.1,15,00,000/- (one crore fifteen lacs) deposited by Kishorilal on 28th April, 2015 along with accrued interest by a demand draft to be drawn in his name upon proper identification within two weeks from the date of communication of this order by either of the parties.
The said application, I.A. No. CAN 7 of 2023, stands dismissed.
I agree (Soumen Sen, J.)
(Uday Kumar, J.)