Madras High Court
James Paul vs Shashikumar on 30 November, 2018
Author: R. Subbiah
Bench: R. Subbiah, C. Saravanan
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 03.07.2018
Pronounced on : 30-11-2018
CORAM:
THE HONOURABLE MR. JUSTICE R. SUBBIAH
and
THE HONOURABLE MR. JUSTICE C. SARAVANAN
A.S. No. 114 of 2017
and
C.M.P. No. 5046 of 2017
---
James Paul .. Appellant
Versus
1. Shashikumar
2. G. Vasantha
3. Simrija Sarath Chandrakumar .. Respondents
Appeal filed under Section 96 read with Order 41 Rule 1 of the Code of
Civil Procedure against the Judgment and Decree dated 26.09.2016 passed in
O.S. No. 102 of 2007 on the file of III Additional District and Sessions Judge,
Coimbatore.
For Appellant : Mr. Kabir, Senior Advocate
for Mr. T.V. Vineeth Kumar
For Respondents : Mr. N. Sridhar
for Mr. R. Bharath Kumar for R1
No appearance for RR2 and 3
JUDGMENT
R. SUBBIAH, J The appellant is the third defendant in O.S.No.102 of 2017 on the file of the learned III Additional District and Sessions Judge, Coimbatore. He has filed the http://www.judis.nic.in present appeal challenging the decree for specific performance granted by 2 the trial Court in O.S.No.102 of 2017 dated 26.09.2016. The said suit was filed by the first respondent herein, as plaintiff, as against the defendants 1 and 2, who are the respondents 2 and 3 herein and as against the third defendant, who is the appellant herein.
2. At the outset, it is pertinent to point out that originally the suit in O.S. No. 102 of 2007 was filed by the first respondent/plaintiff only as against the second respondent/first defendant herein, who was the owner of the suit property. During the pendency of the suit, the plaintiff came to know that the suit property was sold by the second respondent/first defendant herein in favour of the second defendant, who, in turn, sold to the third defendant and hence, he had taken out an application in I.A. No. 2 of 2011 to implead the defendants 2 and 3 also as parties to the suit. The said application was allowed by the trial Court on 01.07.2011. Thereafter, the first respondent/ plaintiff has also filed I.A. No. 194 of 2011 to carry out necessary amendments in the plaint and it was also allowed by the trial Court on 20.11.2011. Thus, during the pendency of the suit filed by the first respondent/plaintiff, the defendants 2 and 3 came to be impleaded in the suit.
3. For the sake of convenience, the parties to this appeal shall be referred to as per their litigative status in the suit as plaintiff and defendants.
4. The averments in the plaint filed by the plaintiff, in brief, are as follows:-
(i) The first defendant is the owner of the agricultural land measuring http://www.judis.nic.in 3 an extent of 11.86 acres, together with a building with an extent of 400 square feet in Mavuthampatti Village, Navakkarai. The plaintiff approached the first defendant to purchase the aforesaid property, which is the subject matter of the suit. After deliberations, the plaintiff and the first defendant have entered into an agreement of sale dated 01.08.2006, whereby the first defendant agreed to sell the suit property to the plaintiff for a total sale consideration of Rs.1,54,18,000/-.
On the date of execution of the agreement, the plaintiff paid a sum of Rs.30 lakhs as advance which was also acknowledged by the first defendant in the agreement dated 01.08.2006. As per the terms and conditions incorporated in the agreement of sale dated 01.08.2006, the plaintiff has to pay a sum of Rs.24,18,000/- as further advance on or before 31.10.2006, provided all the formalities, which are required by the plaintiff's advocate, are complied with by the first defendant. The further condition included in the agreement of sale dated 01.08.2006 is that the plaintiff has to pay the balance sale consideration of Rs.1 Crore on or before 31.01.2007 and to get the sale deed executed in his favour.
(ii) According to the plaintiff, he is in possession of sufficient money to honour the terms and conditions incorporated in the agreement of sale dated 01.08.2006 and therefore, he was always ready and willing to perform his part of the obligations embodied under the agreement of sale dated 01.08.2006. Therefore, the plaintiff was periodically contacting the first defendant to receive the sum of Rs.24,18,000/- before 31.10.2006, as has been incorporated in the agreement of sale dated 01.08.2006. However, as per the contract, it was the defendant who has to furnish the title deeds to the property namely patta, chitta, adangal etc., for scrutiny by his lawyer. This is more so that at the time of http://www.judis.nic.in 4 entering into the agreement of sale dated 01.08.2006, it was represented by the first defendant that the original sale deed dated 21.01.1980 in the name of her husband late. Mr. E.K. Uthaman was misplaced and therefore, the plaintiff insisted the first defendant to furnish certain details such as the date on which the document was lost, whether any police complaint was given or paper publication has been caused. According to the plaintiff, the aforesaid particulars are very much necessary to ensure that the first defendant has clear title to effectively convey the property to him. Further, the first defendant has an obligation to do so as per clause 4 of the agreement of sale dated 01.08.2006. According to the plaintiff, he was regularly contacting the first defendant to furnish the documents and also to accept the further advance of Rs.24,18,000/- as per the conditions incorporated in the agreement of sale. It is his contention that even on 31.10.2006, the plaintiff tendered a cheque for Rs.24,18,000/- to the first defendant, however, the first defendant did not receive it by saying that she would receive it after sometime.
(iii) It is the further contention of the plaintiff that during October and November 2006, he received three postal covers sent by one Deepak Anand Masih and on opening the registered postal covers, he could see only blank papers contained in the postal covers and nothing more. The Plaintiff also could not recollect or remember as to who is Deepak Anand Masih and what is the need for him to send blank papers in the postal cover. There was nothing to corroborate the said Deepak Anand Masih with the first defendant. Thereafter, the plaintiff kept contacting the first defendant, but he has given evasive reply. On the other hand, since the first defendant did not comply with the formalities as http://www.judis.nic.in 5 required in the agreement of sale dated 01.08.2006 and also refused to receive the sum of Rs.24,18,000/- tendered by him, he wrote a letter dated 25.11.2006 enclosing a cheque for Rs.24,18,000/- and also called upon the first defendant to produce the documents of title for scrutiny by his lawyer. However, the first defendant refused to receive the letter dated 25.11.2006 sent by the plaintiff and the postal cover was returned on 13.12.2006 with an endorsement "intimation delivered" to the addressee on 01.12.2006 and 04.12.2006. While so, on 05.12.2006, the first defendant had sent a notice through her lawyer Deepak Anand Masih contending as if the plaintiff had committed breach of the terms of the agreement of sale dated 01.08.2006, particularly in not paying the sum of Rs.24,18,000/- as required under the agreement of sale and therefore, the first defendant cancelled the agreement of sale dated 01.08.2006 and called upon the plaintiff to explain as to why the advance of Rs.30 lakhs paid by him be not forfeited. According to the plaintiff, only on receipt of the notice dated 05.12.2006 sent by the first defendant through her lawyer Mr. Deepak Anand Masih, he came to understand the deceitful attitude of the first defendant in sending three postal covers which contained blank papers. In fact, three postal covers which were received by the plaintiff containing blank papers did not contain the word "Advocate" before the name of Mr.Deepak Anand Masih, but only in the notice dated 05.12.2006, the name of Mr.Deepak Anand Masih is prominently found with the prefix "Advocate". According to the plaintiff, the notice dated 05.12.2006 sent by the first defendant through her lawyer contains untenable averments. There is no justification on the part of the first defendant to cancel the agreement of sale dated 01.08.2006. In fact, after sending the notice dated 05.12.2006, the first http://www.judis.nic.in 6 defendant also filed Caveat petitions before the District Court, Coimbatore as well as the High Court, Chennai, which reflected the intention of the first defendant to evade and avoid her part of the obligations under the agreement of sale dated 01.08.2006. It was the first defendant who is guilty of breach of the terms and conditions of the agreement of sale dated 01.08.2006 by not receiving the part of the sale consideration of Rs.24,18,000/- when tendered by the plaintiff. Even otherwise, as per the agreement of sale dated 01.08.2006, the plaintiff has to perform his part of the contract on or before 31.01.2007, however, by alleging that the plaintiff did not pay the part of the sale consideration of Rs.24,18,000/- on or before 31.10.2006, the first defendant rescinded the contract. In such circumstances, the plaintiff had sent a reply notice dated 26.12.2006 to the first defendant contending that he was always ready to perform his part of the contract and it was the first defendant who evaded and avoided to perform her obligations incorporated in the agreement of sale dated 01.08.2006.
(iv) According to the plaintiff, the first defendant had purportedly breached the terms and conditions of the agreement of sale, dated 01.08.2006 which could be evident from the deceitful manner, in which, three registered postal covers containing blank papers were sent. The sudden and unilateral cancellation of the agreement of sale dated 01.08.2006 through the notice dated 05.12.2006 sent on behalf of the first defendant would explicitly make it clear that the first defendant had attempted to deceive the plaintiff and deprive his legitimate expectation to get the sale deed executed in his favour in respect of the suit property. It was further contended by the plaintiff that the first defendant is taking hectic steps to alienate and/or encumber the suit property to the third party http://www.judis.nic.in 7 and therefore, he filed the suit.
5. The first defendant, against whom the plaintiff had originally instituted the suit, filed a written statement contending inter alia that as per clause 4 of the agreement of sale dated 01.08.2006, the plaintiff is bound to pay a sum of Rs.24,18,000/- on or before 31.10.2006, which he failed to pay. That apart, as per clause 8 of the agreement of sale, "if the party of the first part (first defendant) fails to execute the sale deed in favour of the party of the second part (plaintiff) or his nominee/s after receiving the entire sale consideration, the party of the second part (plaintiff) is only entitled to specific performance of this agreement." As the plaintiff committed breach of terms of the agreement of sale dated 01.08.2006, it is open to the first defendant to sell the suit property to any third party, as she may wish. According to the first defendant, the agreement of sale dated 01.08.2006, which she had entered into with the plaintiff, stands cancelled for non-adherence of terms and conditions by the plaintiff and therefore, there is no embargo for her to alienate or encumber the suit property to any third person. Above all, it was contended that the plaintiff was not ready and willing to perform his part of the contract and therefore, he is not entitled for the relief of specific performance. It is also stated by the first defendant that she had already transferred the suit property to an individual and therefore also, the plaintiff is not entitled for the relief of specific performance.
6. According to the first defendant, in her written statement, the plaintiff had maintained a mysterious silence all along, refused to answer any of the letter http://www.judis.nic.in 8 written to him and finally conveyed that he was not willing to purchase the property at all. Therefore, the institution of the present suit by the plaintiff is an after-thought. The first defendant also denied that she is not required to comply with any procedural formalities or there was any condition incorporated in the agreement of sale to that effect. It is further contended that the lawyer engaged by the first defendant had made numerous attempts and sent three letters to the plaintiff between October 2006 to November 2006 to ensure that the conditions stipulated in the agreement of sale dated 01.08.2006 are duly performed. Finally, a notice dated 05.12.2006 was sent to the plaintiff calling upon him to show cause as to why the sale advance paid by him be not forfeited. According to the first defendant, the plaintiff has never written any letter dated 25.11.2006, enclosing a cheque thereof, as alleged and she never received it. The first defendant had acted fairly and reasonably and it was the plaintiff who failed to adhere to the terms and conditions of the agreement of sale dated 01.08.2006 while so, he is not entitled for the equitable relief of specific performance of the agreement of sale dated 01.08.2006.
7. When the plaintiff came to know that the first defendant had alienated and encumbered the suit property to a third party, the plaintiff had taken out the application in I.A. No. 2 of 2011 to implead the defendants 2 and 3 also as parties to the suit. It is the contention of the plaintiff that the first defendant, with the sole intention to defeat the right of the plaintiff, created nominal sale deed dated 14.12.2006 in favour of the second defendant, who in turn executed a nominal sale deed dated 09.07.2008 in favour of the third defendant. The http://www.judis.nic.in 9 defendants 2 and 3 are fully aware of the agreement of sale, he had entered into with the first defendant, however, in order to defeat his right, the sale deeds dated 14.12.2006 and 09.07.2008 came into existence. It was stated that the alleged sale deed dated 14.12.2006 executed by the first defendant in favour of the second defendant and the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant will not bind him or create any right in their favour in respect of the suit property. The title in respect of the suit property still vests with the first defendant and the defendants 2 and 3 are bound by the agreement of sale in favour of the plaintiff. As the second defendant purchased the suit property on 14.12.2006 during the subsistence of the agreement of sale dated 01.08.2006; the plaintiff had entered into with the first defendant and the third defendant purchased the suit property by a sale deed dated 09.07.2008 during the pendency of the suit, they are proper and necessary parties to the lis and prayed for impleading the defendants 2 and 3 as party respondents to the suit.
8. The said application being I.A. No. 2 of 2011 was allowed by the trial Court on 01.07.2011. Thereafter, the first respondent/plaintiff has also filed I.A. No. 194 of 2011 to carry out necessary amendment in the plaint and it was also allowed by the trial Court on 20.11.2011. Thus, during the pendency of the suit filed by the first respondent/plaintiff, the defendants 2 and 3 came to be impleaded.
9. On notice in I.A. No. 194 of 2011, the third defendant, who http://www.judis.nic.in 10 purchased the suit property by means of a sale deed dated 09.07.2008 from the second defendant, has filed a written statement and contested the suit. According to the third defendant, when he purchased the suit property, it was in possession and enjoyment of the second defendant. After going through the validity of the title to the second defendant, with respect to the suit property, he purchased the suit property by means of a sale deed dated 09.07.2008, which was registered on 14.07.2008 as document No. 3700 of 2008 on the file of Sub- Registrar, Madukarai. It is his contention that he purchased the suit property from the second defendant for a valid sale consideration. The third defendant has no knowledge about the agreement of sale dated 01.08.2006 between the plaintiff and the first defendant. On the date of sale of the suit property in his favour on 09.07.2008 all the parent documents and revenue records were in possession of his vendor the second defendant. After being satisfied with the title to the suit property, he has purchased it from the second defendant. Since the third defendant is a bona fide purchaser, he is entitled to take all the defences which are available to the first defendant.
10. The third defendant also contends that the plaintiff was not ready and willing to purchase the suit property and that is the reason why, his vendor's vendor being the first defendant, had cancelled the agreement of sale dated 01.08.2006 and conveyed the suit property in favour of his vendor the second defendant. The third defendant also, by referring to clause 4 of the agreement of sale contends that the plaintiff failed to pay the sum of Rs.24,18,000/- on or before 31.10.2006 as per the agreement of sale dated 01.08.2006 and therefore, http://www.judis.nic.in 11 his vendor's vendor, being the first defendant, is wholly justified in cancelling the agreement of sale, she had entered into with the plaintiff. The third defendant therefore prayed for dismissal of the suit.
11. On the above pleadings, the trial court has framed the following issues for consideration and they are:-
(i) Whether the plaintiff was ready and willing to
perform his part of contract?
(ii) Whether time is the essence of the suit
agreement?
(iii) Whether the third defendant is a bonafide
purchaser for value without notice of the suit sale agreement (or) whether the third defendant is lis pendence purchaser as claimed by the plaintiff?
(iv) Whether protection against specific performance is available to the third defendant as a bonafide purchaser under Section 19 (b) of the Specific Relief Act, if he is considered to be a lis pendant purchaser?
(v) Whether the plaintiff is entitled for specific performance of suit sale agreement dated 01.08.2006?
(vi) For what other relief, parties are entitled to?
12. Before the trial Court, the first respondent/plaintiff examined himself as PW1 and Exs. A1 to A16 were marked. On behalf of the defendants, the appellant/third defendant examined himself as DW1 and Exs. B1 to B8 were marked. The trial court, after analysing the oral and documentary evidence adduced on behalf of both sides held that the third defendant, having purchased the suit property during the pendency of the suit, is a lis pendens purchaser and therefore, he is not entitled to the protection under Section 19 (b) of the Specific http://www.judis.nic.in 12 Relief Act. It was further held that as the third defendant stepped into the shoes of the first and second defendant, it is not necessary to examine as to whether the third defendant had notice of the suit sale agreement between the plaintiff and the first defendant and as to whether the sale in favour of the third defendant was supported by adequate consideration or not. The trial Court also concluded that the plaintiff, in order to perform his part of the contract, had tendered a cheque for Rs.24,18,000/- before 31.10.2006 but it was the first defendant who did not receive the same by assigning untenable reasons. Therefore, it was held that the plaintiff was always ready and willing to perform his part of the contract and it was the first defendant who failed and neglected to perform her part of the obligations. Resultantly, the trial Court granted a decree for specific performance as prayed for by the plaintiff with costs. Aggrieved by the judgment and decree dated 26.09.2016 passed in O.S. No. 102 of 2007 this appeal is preferred by the appellant/third defendant.
13. The learned Senior Counsel for the appellant/third defendant, at the outset, invited the attention of this Court to Section 52 of the Transfer of Property Act to contend that during the pendency of a lis in any Court, which is not collusive and in which any right to immovable property is directly and specifically in question, such property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party, except the authority of the court and on such terms as it may impose. By relying upon Section 52 of The Transfer of Property Act, the learned Senior Counsel would contend that Section 52 of the Transfer of Property Act presupposes the http://www.judis.nic.in 13 existence of a suit and the parties to such suit are forbidden from transferring an immovable property to a third party during the pendency of such suit without the authority of the Court. In the present case, the third defendant/appellant or his vender, the second defendant has no knowledge about the pendency of the suit instituted by the plaintiff against the first defendant. The second defendant had purchased the property from the first defendant on 14.12.2006 and the suit against the first defendant for enforcing the agreement dated 01.08.2006 was filed only on 19.02.2007. In such circumstances, the second defendant who is the vendor of the third defendant cannot be construed as a lis pendens purchaser. Further, the second defendant was also not a party to the suit when he transferred the property in favour of the third defendant. Therefore, the third defendant also cannot be construed as a lis pendens purchaser. Therefore, the finding of the trial Court that the appellant/third defendant is a lis pendens purchaser and hence, the third defendant is not entitled to adduce any evidence or be heard, is liable to be set aside.
14. The next fold of submission of the learned Senior Counsel for the appellant/ third defendant is that the agreement of sale dated 01.08.2006 was entered into between the plaintiff and the first defendant for a total sale consideration of Rs.1,54,18,000/-. As per clause 3 of the agreement of sale, a sum of Rs.30,00,000/- was paid as advance on the date of execution of the agreement of sale. Clause 4 imposes a condition that the plaintiff has to pay a further sum of Rs.24,18,000/- on or before 31.10.2006. Clause 5 of the agreement postulates that the balance sum of Rs.1 Crore has to be paid before http://www.judis.nic.in 14 31.01.2007 and on fulfilment of such conditions, the first defendant is bound to execute the sale deed in favour of the plaintiff. In the event of failure to fulfil the above conditions by the purchaser, being the plaintiff, the seller viz., the first defendant is empowered to alienate or sell the suit property to a third person, as she may wish. Further, according to the learned Senior Counsel for the third defendant, a joint reading of Clauses 4, 7 and 8 would indicate that the second payment of Rs.24,18,000/- is subject to the formalities which are required by the Advocate of the purchaser being complied with and that under Clause 7, the vendor had undertaken to hand over the parent deed, which is lost, if found and also to comply with all the formalities as required in this regard. Clause 8(i) mandates that the vendor has to produce all the original documents pertaining to the schedule mentioned property either to the purchaser or his advocate for investigating the title for a period of 30 years. A conjoint reading of the aforesaid Clauses reveals that the condition precedent for remittance of the second tranche is that the vendor has to satisfy the purchaser/advocate about the marketable title of the vendor. Under Clause 4, the aforesaid payment is subject to the said condition and under Clause 7, if the original documents are not found, the formalities required for notification of the same have to be complied with. These two Clauses clearly state that unless the formalities are complied with, the second tranche is not payable. Admittedly, the same has not been complied with by the first defendant. Therefore, the question of payment of Rs.24,18,000/- on or before 31.10.2006 by the plaintiff does not arise in this case. In such an event, the sale agreement entered into between the plaintiff and the first defendant shall automatically come to an end and thereafter, it is well open to the first defendant http://www.judis.nic.in 15 to alienate or encumber the suit property to whosoever she may wish. Thus, even as on 31.10.2006, owing to the default committed by the plaintiff, the agreement of sale dated 01.08.2006 came to an end and therefore, the sale deed 14.12.2006 executed by the first defendant in favour of the second defendant is valid. On the date of execution of the sale deed dated 14.12.2006 by the first defendant in favour of the second defendant, not only the agreement of sale dated 01.08.2006 entered into between the plaintiff and first defendant stood cancelled but there was no suit filed as on the date namely 14.12.2006. Similarly, the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant is equally valid as the second defendant has a valid, marketable and assertable title to convey and sell the suit property in favour of the third defendant as on the date of it's execution. Further, on the date of execution of the sale deed by the second defendant in favour of the third defendant, the second defendant was not impleaded as a party to the suit filed by the plaintiff.
15. The learned Senior Counsel for the third defendant invited the attention of this Court to para No.4 of the plaint wherein it was contended that the first defendant did not furnish all the original documents pertaining to the suit property for perusal of the plaintiff's counsel. Further, it was contended by the plaintiff that the first defendant represented to him even at the time of agreement of sale that the original sale deed was misplaced, however, the plaintiff was asking the first defendant to furnish the date of loss of the sale deed, whether any complaint was given relating to the loss of the document or any paper publication was made etc.,. While so, in the cross-examination of the plaintiff, he admitted http://www.judis.nic.in 16 that he did not verify the encumbrance relating to the suit property before entering into the agreement of sale dated 01.08.2006. He has further admitted that he never caused any enquiry relating to the title of the first defendant to sell the suit property. At the same time, he admitted that his advocate has orally informed that he can proceed to purchase the suit property. On the one hand the plaintiff alleges that the first defendant did not furnish the title deeds etc., and on the other he admitted in his cross-examination that his advocate has stated that he can proceed to purchase the suit property.
16. The learned Senior Counsel for the third defendant would further contend that even as per the agreement of sale dated 01.08.2006, the property has to be measured through a person authorised by the government and the purchaser has to satisfy that the measurement mentioned in the agreement is correct. Thus, according to the learned Senior Counsel for the first defendant, as per clauses 4, 7 and 8 of the agreement, there are certain conditions to be fulfilled by the first defendant and the non-fulfilment of the conditions by the first defendant itself would make the agreement void, at the option of the plaintiff/purchaser. Similarly, if the amount is not paid within the time stipulated, the vendor/first defendant is entitled to invoke Clause 6 of the agreement and to rescind it. In the present case, the plaintiff failed to pay the sum of Rs.24,18,000/- on or before 31.10.2006 and therefore also, the agreement of sale dated 01.08.2006 would no longer survive. Thus, according to the learned Senior Counsel for the plaintiff, both in the pleadings and in the evidence, the plaintiff having treated the compliance of the formalities as a pre-condition, the contract http://www.judis.nic.in 17 assumed the character of a contingent agreement. In other words, owing to the non-fulfilment of the conditions, either by the purchaser or the buyer, the contract for sale will become void. Accordingly, owing to the non-fulfilment of certain conditions by the plaintiff/purchaser, the agreement of sale dated 01.08.2006 stood cancelled automatically and thereafter, the plaintiff cannot have any right over the suit property.
17. The next limb of argument advanced by the learned Senior Counsel for the third defendant is that the plaintiff was not ready and willing to perform his part of the contract and this had led to the cancellation of the agreement by the first defendant. It is his contention that except the allegation that the plaintiff had tendered a cheque prior to 31.10.2006 but it was not received by the first defendant, there is no other evidence to show that he was ready and willing to perform his part of the contract. Even according to the plaintiff, he had sent a letter dated 25.11.2006 enclosing the cheque for Rs.24,18,000/- but the first defendant refused to receive it. The fact remains that in the letter dated 25.11.2006 said to have been sent by the plaintiff, there is no whisper that the cheque was tendered prior to 31.10.2006 but it was not received by the first defendant. In this context, the learned Senior Counsel for the plaintiff invited the attention of this Court to the cross-examination of PW1 wherein he has stated that he does not know where the vendor/first defendant is residing. Therefore, according to the learned Senior Counsel for the third defendant, it is improbable that the plaintiff would have tendered the cheque to the first defendant prior to 31.10.2006, as alleged. The learned Senior Counsel has also invited the http://www.judis.nic.in 18 attention of this Court to the notice of termination dated 05.12.2006 sent by the first defendant wherein she had clearly stated that the plaintiff did not meet her from the beginning of October 2006 and that the photocopies of the land in question had been furnished to the plaintiff even at the time of agreement. This was also admitted by the plaintiff in his cross-examination to the effect that certain photocopies of the document were furnished to him at the time of execution of the agreement of sale dated 01.08.2006. Thus, the letter dated 05.12.2006 sent by the first defendant falsifies the plea of the plaintiff that he had tendered a cheque much before 31.10.2006 but it was the first defendant who refused to receive the cheque. In any event, there is no evidence to show as to where and when the plaintiff had met the first defendant and allegedly tendered the cheque to her. In the absence of any evidence thereof, it cannot be contended by the plaintiff that he had tendered a cheque but it was not received by the first defendant under some pretext or the other. Therefore, according to the learned Senior Counsel for the third defendant, it was the plaintiff who failed to discharge his burden that he was ready and willing to perform his part of the contract and that the first defendant evaded and avoided to discharge her obligations under the contract. In such circumstances the first defendant cannot be expected to execute the sale deed in favour of the plaintiff. In this context, the learned Senior Counsel for the third defendant relied on the decision of the Honourable Supreme Court in the case of (Smt. Chand Rani (dead) by LRs vs. Smt. Kamal Rani (dead) by LRs) reported in (AIR 1993 Supreme Court 1742 (1) wherein it was held that if the purchaser fails to pay the amount as per the agreement and did not fulfil the terms and conditions incorporated thereof, such a purchaser is not entitled for the http://www.judis.nic.in 19 relief of specific performance. For the very same proposition, reference was made to the decision of the Honourable Supreme Court in the case of (M/s. P.R. Deb and Associates vs. Sunanda Roy) reported in AIR 1996 Supreme Court 1504 wherein it was held that when the agreement holder fails to perform his part of the contract to make part payment within the time stipulated, he is not entitled for the relief of specific performance.
18. The learned Senior Counsel for the third defendant, by placing reliance on Section 19 (b) of the Specific Relief Act, would contend that the suit property was sold to the second defendant on 14.12.2006. The recitals in the sale deed dated 14.12.2006 clearly states that the suit property was originally purchased by the husband of the first defendant Uthaman on 21.01.1980 through Court auction and the husband of the first defendant passed away on 10.01.2005 and thereafter, by a registered deed of release dated 25.08.2005, the sons and daughter of the first defendant have relinquished their share in favour of their mother, the first defendant. Subsequently, the first defendant had sold the suit property in favour of the second defendant on 14.12.2006 and the parent documents have been handed over to the second defendant. While so, the suit was filed by the plaintiff on 19.02.2007, subsequent to the execution of the sale deed dated 14.12.2006. By that time, the second defendant became a bona fide purchaser with clear title in her favour. Though the first defendant filed her written statement in the suit on 04.10.2007 stating that the property has been sold in favour of the second defendant, no steps were taken by the plaintiff to implead the second defendant till he executed the sale deed dated 09.07.2008 in favour of http://www.judis.nic.in 20 the third defendant. In other words, after lapse of 3 years and 8 months, the defendants 2 and 3 were impleaded in the suit. Therefore, the learned Senior Counsel would contend that the third defendant is a bona fide purchaser of the suit property without notice of the suit and the agreement of sale dated 01.08.2006 entered into between the plaintiff and the first defendant.
19. The learned Senior Counsel for the third defendant contends that Section 19 (b) of the Specific Relief Act provides that specific performance of a contract may be enforced against any other person claiming under the vendor by a title arising subsequent to the contract, except a transferee for value, who has paid money in good faith and without notice of the original contract. In this case, the third defendant purchased the suit property for a valuable sale consideration and he came into possession of the suit property. The third defendant has also mutated the revenue records which is evident that the portion of the suit land measuring 2000 square meters was acquired by the Government through the Land Acquisition Tahsildar by invoking the Land Acquisition Act and the third defendant also handed over possession of a portion of the suit property pursuant to an order passed by the Competent Authority under the Land Acquisition Act on 30.06.2011. The very fact that the acquisition proceedings were initiated against the third defendant will stand testimony to the fact that his ownership was recognised by the competent authority under the Land Acquisition Act. In any event, prior to the third defendant being impleaded in the suit, he became absolute owner of the suit property and asserted a title to the same. Thus, the legal title to the suit property vests with the third defendant. http://www.judis.nic.in 21
20. It is the vehement contention of the learned Senior Counsel for the third defendant that Section 19 (b) of the Specific Relief Act cannot be given a restrictive meaning to cover only one person who has purchased the suit property from the original owner viz., the second defendant in this case. The words "any other person claiming under him by a title arising subsequently to the contract"
would take within its fold all persons who have purchased the property from the original owner subsequent to the contract.
21. The learned Senior Counsel for the third defendant would contend that Article 54 of the Limitation Act provides that the agreement holder has to institute a suit for specific performance within three years from the date of agreement or from the date of refusal to perform his or her part of the contract. In the event of failure on the part of the agreement holder to institute the suit within the period of limitation, as provided under Article 54 of the Limitation Act and in the meantime, If the property is transferred to different person by the subsequent purchaser (s), then all of them would have acquired a lawful legal title. Therefore, according to the learned Senior Counsel for the third defendant, Section 19 (b) confers protection not only to the subsequent purchaser from the owner of the property, which is the subject matter of the lis, but also to the purchaser of the property from the subsequent purchaser to whom the property was alienated. If the agreement holder fails to implead the subsequent purchaser in the suit within the period prescribed, then the subsequent purchaser will have a right to resist the suit on the strength of his legal title. Such a subsequent purchaser will also have a right to raise a defence in the execution proceedings by filing necessary http://www.judis.nic.in 22 application under Section 47 of The Code of Civil Procedure by contending that the decree is void and it will have an adverse impact on his legal title especially when he was not put on notice regarding the contract between the original owner and the agreement holder. If the subsequent purchaser is treated as an obstructer, then the provisions under Rules 97 to 103 of Order 21 of The Code of Civil Procedure will come into force. Further, such a subsequent purchaser will also have a right to institute a separate suit either to declare the judgment and decree in favour of the agreement holder as void by contending that such a decree has been obtained by suppression of material facts. Therefore, according to the learned Senior Counsel, the words "any other person" incorporated under Section 19 (b) of the Specific Relief Act will not mean and include only one person who purchased the suit property from the original owner, but also to the others to whom the property was alienated by the subsequent purchaser. Therefore, applying the above principle, the third defendant should be construed as a subsequent purchaser and he should be given the protection embodied under Section 19 (b) of the Specific Relief Act. This is more so that the defendants 2 and 3 were impleaded belatedly after three years and eight months from the date of institution of the suit. Further, the first defendant resides in Coimbatore, the second defendant resides in Mahe, Kerala and the third defendant is a resident of Erunakulam, State of Kerala. It is not the case of the plaintiff that the defendants are related to each other and they have colluded to defy the right of the plaintiff to get a decree for specific performance of the agreement of sale dated 01.08.2006. Above all, the plaintiff did not prove that the defendants 2 and 3 have knowledge of the suit agreement, which he had entered http://www.judis.nic.in 23 into with the first defendant on 01.08.2006. In this context, the learned Senior Counsel for the third defendant relied on the decision rendered in the case of (Ram Awadh (dead) by LRs and others vs. Achhalbar Dubey and another) reported in AIR 2000 SC 860 to contend that the relief of specific performance need not be granted to a plaintiff who fails to aver and prove his readiness and willingness to perform his part of the contract. Such a relief is also available both to the vendor and subsequent purchasers and even to the legal representatives of the subsequent purchaser.
22. The learned Senior Counsel for the third defendant would also contend that the plaintiff had contended before the trial Court that U. Rajesh, power of attorney holder of the original owner first defendant was the power of attorney holder of the second defendant through whom the third defendant purchased the suit property. The fact remains that the third defendant, after obtaining encumbrance certificate and on scrutiny of the document of title, purchased the suit property. The encumbrance certificate obtained by him did not disclose any subsisting encumbrance except the sale in favour of his vendor, the second defendant. The third defendant had no knowledge about the relationship between the original owner and the power of attorney of his vendor, the second defendant. At the time of purchasing the suit property, as a purchaser, the third defendant is only bound to go through the title of the documents relating to the property sought to be purchased and not the relationship between the power of attorney holder and the original owner of the suit property. It is yet another contention of the plaintiff before the trial Court that the third defendant ought to http://www.judis.nic.in 24 have verified the encumbrance certificate which would have revealed that the second defendant intended to sell the property at Rs.4,00,00,000/- in favour of one Mr. Mohan, but the said property was sold to the third defendant by the second defendant only for a sum of Rs.38,05,000/- and therefore, it is apparently clear that the sale deed executed in favour of third defendant is only a collusive sale deed to deprive the right of the plaintiff. But, this case of the plaintiff before the trial Court was assailed by the third defendant stating that it is not the concern of the third defendant about the intended price at which the property was sought to be sold, but the guide line or market value of the property alone cane be taken into consideration. Further, the said agreement to sell the suit property for Rs.4 crores did not fructify and it was cancelled. As a prudent purchaser, the third defendant only scrutinised the documents relating to title of the suit property and he had exercised due diligence prior to paying the sale consideration.
23. Above all, the learned Senior Counsel for the third defendant would contend that the plaintiff is only an agreement holder. An agreement of sale by itself will not create any right or title. Further, if the agreement holder fails to perform his part of the contract and the property in question was subsequently sold in favour of a purchaser, who, without notice purchased it bona fide for a valuable sale consideration, such subsequent purchaser has to be conferred with the protection as contemplated under Section 19 (b) of the Specific Relief Act, In this context, the learned Senior for the third defendant relied on several decisions, one such decision was rendered in the case of (P. Ramaswamy vs. A. Raja and another) reported in 2008 (3) CTC Page No.1 wherein the Division Bench of this http://www.judis.nic.in 25 Court held that a subsequent purchaser is entitled to impeach an agreement of sale entered into between the plaintiff and original owner. The plea of subsequent purchaser that he is bona fide purchaser in good faith for value without notice or knowledge of original contract has to be accepted in the absence of any plea by the plaintiff in the plaint that subsequent purchaser had knowledge of original contract.
24. In effect, it is the submission of the learned Senior Counsel for the third defendant that the plaintiff failed to perform his part of the contract which gave rise to the first defendant to terminate the agreement and to execute the sale deed in favour of the second defendant, who in turn executed the sale deed in favour of the third defendant. The third defendant is a subsequent purchaser who purchased the suit property from the second defendant in good faith for a valuable sale consideration without any knowledge of the agreement of sale dated 01.08.2006 executed between his vendor's vendor being the first defendant on the one hand and the plaintiff on the other. Therefore, the third defendant is entitled to protection under Section 19 (b) of the Specific Relief Act. The trial Court without considering the above aspects has granted a decree for specific performance in favour of the plaintiff which had adversely affected the right, title and interest of the third defendant in the suit property. The learned Senior Counsel therefore prayed for allowing this appeal.
25. Countering the submissions of the learned Senior Counsel for the appellant/third defendant, the learned counsel for the first respondent/plaintiff http://www.judis.nic.in 26 fairly contended that since the first defendant had alienated the suit property by executing the sale deed dated 14.12.2006 in favour of the second defendant and the second defendant, in turn, alienated the said property in favour of the third defendant, even before the defendants 2 and 3 were added as defendants in the suit, they cannot be termed as lis pendens purchasers. However, the learned Counsel for the plaintiff submitted that they are not bona fide purchasers and as such, they are not entitled for protection under Section 19(b) of the Specific Relief Act. In this regard, the learned Counsel for the first respondent/plaintiff would vociferously contend that the plaintiff had entered into an agreement of sale dated 01.08.2006 with the first defendant, who was the owner of the suit property. Even on the date of execution of the agreement, the plaintiff paid Rs.30 lakhs out of Rs.1,54,18,000/- and the receipt of the sum of Rs.30 lakhs is recited in the agreement of sale itself. As per the agreement of sale, the plaintiff has to pay a sum of Rs.24,18,000/- on or before 31.10.2006 and the balance sum of Rs.1 Crore on or before 31.01.2007 to get the sale deed executed in his name. According to the plaintiff, even on the date of agreement itself, the first defendant represented that the original sale deed dated 21.01.1980 in the name of her deceased husband was misplaced. The plaintiff therefore required the first defendant to furnish the probable date on which the document was misplaced, whether any police complaint was given or any paper publication was caused. These details are absolutely necessary for the plaintiff to get the title deeds to the suit property verified through a lawyer. The first defendant also assured to furnish those details to the plaintiff, but she did not do so. Therefore, the plaintiff was repeatedly requesting the first defendant to furnish those details and also to http://www.judis.nic.in 27 receive the further advance amount of Rs.24,18,000/- even prior to the date on which it has to be paid. The plaintiff had in fact tendered a cheque for Rs.24,18,000/- to the plaintiff but she had asked the plaintiff to keep the cheque with him so that she could receive it at a later date. When the plaintiff is intending to pay the sum of Rs.24,18,000/- and also to get the details pertaining to the loss of title deed furnished by the first defendant, he received three postal covers during October to November 2006 and on opening the postal covers, he could only find blank papers. Those blank papers were sent by one Deepak Anand Masih. The plaintiff was keeping his fingers crossed as to who Deepak Anand Masih is, why he had sent those letters, purportedly with blank papers inserted therein. In the meantime, since the first defendant neither furnished the particulars relating to the lost sale deed nor received the cheque for Rs.24,18,000/-, the plaintiff sent a letter dated 25.11.2006 enclosing a cheque for Rs.24,18,000/- to perform his part of the contract. The letter dated 25.11.2006 was sent by registered post, but it was returned to the plaintiff on 13.12.2006 with an endorsement "intimation served" on 01.12.2006 and 04.12.2006. However, even before the plaintiff could receive the returned postal cover on 13.12.2006, the first defendant sent a legal notice dated 05.12.2006 alleging as though the plaintiff did not pay the sum of Rs.24,18,000/- as per the agreement, in time and therefore, the agreement of sale dated 01.08.2006 stands cancelled. This notice was also sent by the same Deepak Anand Masih, but this time, with a prefix "Advocate" before his name. Immediately, the plaintiff sent a reply dated 26.12.2006 denying that he did not breach the terms and conditions of the contract and sought for a clarification with respect to the three letters he received http://www.judis.nic.in 28 from one Deepak Anand Masih inter alia calling upon the first defendant to receive the sum of Rs.1,24,18,000/-, being the balance sale consideration and to execute the sale deed in his favour. This itself would stand testimony to the fact that even while sending the reply dated 26.12.2006, the plaintiff expressed his readiness and willingness to perform his part of the contract by paying the entire balance sale consideration and also expressly stated that he had not committed any breach of the terms and conditions of the agreement of sale dated 01.08.2006. In fact, even as per the agreement of sale dated 01.08.2006, the plaintiff has to perform his part of the contract by paying the entire sale consideration on or before 31.01.2007, however, even in the reply notice dated 26.12.2006, the plaintiff expressed his readiness and willingness to pay the entire sale consideration to the first defendant. Even before the trial Court, the plaintiff has produced a Certificate dated 29.01.2007 and 08.02.2007, Ex.A11 and A12 issued by Union Bank of India, Chennai to show that the plaintiff is having a sum of Rs.1,71,31,962/- in his bank account as on 02.12.2006 and Rs.1,24,90,164.46 as on 19.01.2007. Thus, the plaintiff was having ready money available with him to perform his part of the contract. As the conduct and attitude of the first defendant appears to be detrimental to the interest of the plaintiff in getting the sale deed executed in his favour, he has filed the suit for specific performance.
26. After the suit was filed, the first defendant entered appearance through an advocate and during the pendency of the suit, conducted search with the Registration Department and obtained encumbrance certificate and came to know about the sale deed dated 14.12.2006 the first defendant had executed in http://www.judis.nic.in 29 favour of the second defendant and the sale deed dated 09.07.2008 the second defendant had executed in favour of the third defendant. Immediately, the plaintiff had taken out an application for impleading the second and third defendants as parties to the suit. In spite of summons, the defendants 2 and 3 did not appear and they were called absent and set exparte. When the trial commenced, the first defendant, who filed written statement, did not participate in the trial. Therefore, the suit was decreed exparte on 07.12.2012. Pursuant to the decree dated 07.12.2012, the plaintiff deposited the balance sale consideration of Rs.1,24,18,000/- before the trial court. Thereafter, when the plaintiff filed Execution Petition in E.P. No. 19 of 2013, the third defendant filed an application to set aside the exparte decree with an application to condone the delay of 171 days in filing an application to set aside the exparte decree. Along with the application to set aside the exparte decree, the third defendant has also filed his written statement on 21.08.2015. In his written statement, the third defendant contended as though the plaintiff was not ready and willing to perform his part of the contract which he had entered into with his vendor's vendor, the first defendant and which led to the cancellation of the agreement of sale dated 01.08.2006 and after cancelling the agreement dated 01.08.2006, she had executed the sale deed in favour of his vendor, the second defendant. It was further contended that the third defendant innocently purchased the suit property from his vendor, the second defendant in good faith for a valuable sale consideration and therefore, he is entitled for the protection under Section 19 (b) of the Specific Relief Act.
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27. It is the vehement contention of the counsel for the first respondent/plaintiff that the defendants 2 and 3 are not bona fide purchasers. If really the second defendant purchased the suit property bona fidely from her vendor, the first defendant, the second defendant would have contested the suit to safeguard the interest of the person to whom she had sold the suit property namely the third defendant. The fact that the second defendant did not contest the suit is explicit that she was not a bona fide purchaser and consequently, the sale she made in favour of the third defendant is vitiated. Further, the sale deeds, Ex.A-13 dated 14.12.2006 executed by the first defendant in favour of the second defendant and the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant are nominal sale deeds which could be inferred from the value mentioned therein. The total sale consideration indicated in the agreement of sale, Ex.A-1 between the plaintiff and the first defendant was Rs.1,54,18,000/-. However, under Ex.A-13, sale deed in favour of the second defendant executed by the first defendant, the value of sale deed is mentioned as Rs.12,68,000/- i.e., one tenth of the value of the sale price indicated in Ex.A-1, agreement of sale. Further, within two months of execution of the sale deed, the second defendant executed a power of attorney deed dated 21.02.2007 (Ex.B2) in favour of the son of her vendor namely the first defendant, which would clearly reveal that the sale deed dated 14.12.2006, Ex.A-13 came into existence only to deprive the right of the plaintiff and it is a nominal and collusive sale deed. Further, after execution of the power of attorney deed dated 21.02.2007, the power of attorney agent enters into an alleged agreement of sale dated 18.06.2007 (Ex.A-15) with one B. Mohan in which the total sale consideration http://www.judis.nic.in 31 agreed upon has been mentioned as Rs.4,03,24,000/-. In other words, the second defendant purchased the suit property from her vendor, the first defendant on 14.12.2006 in which the value of the property was mentioned as Rs.12,68,000/-, but within a period of seven months, when the agreement of sale dated 18.06.2007 was entered into with the aforesaid Mohan, the value of the property was mentioned as Rs.4,03,24,000/-. On execution of the agreement of sale dated 18.06.2007 with the aforesaid Mr. Mohan, the power of attorney received a whooping sum of Rs.50 lakhs as sale advance. However, the agreement of sale dated 18.06.2007 was cancelled on 29.11.2009 purportedly for the non-compliance of the terms and conditions by the buyer namely the said Mohan. Even in the deed of cancellation dated 29.11.2009, there is no indication that the vendor, the second defendant had returned the sum of Rs.50 lakhs which she received from the purchaser Mr. Mohan. Surprisingly, after cancelling the agreement of sale dated 18.06.2007 with Mr. Mohan on 29.11.2009, the power agent, namely the son of the first defendant, sold the very same property by executing a sale deed dated 09.07.2008, Ex.A-14 = Ex.B1 in favour of the third defendant for a sum of Rs.38,05,000/-. The learned counsel for the first respondent/plaintiff would contend that it is not known as to how the value of the property could be drastically reduced within a period of a few months and this is amply clear that the sale deeds under Ex.A-13 dated 14.12.2006 executed by the first defendant in favour of the second defendant and the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant through the power of attorney are collusive sale deeds intended to deprive the right of the plaintiff as an agreement holder with the first defendant. In this http://www.judis.nic.in 32 context, the learned counsel for the plaintiff relied on the decision of the Honourable Supreme Court in the case of (Jawajee Naganatham vs. Revenue Divisional Officer) reported in 1994 AIR SCW 2852 and (U.P. Jal Nigam vs. Kairs Properties Private Limited) reported in AIR 1996 Supreme Court 1170 to contend that the basic valuation register prepared and maintained by the Registration Department is only for collection of stamp duty and it has no relevance to statutory base or force. It cannot form a foundation to determine the market value mentioned thereunder in instrument brought for registration.
28. The learned counsel for the plaintiff would further contend that at the time when Ex.A-1, agreement of sale dated 01.08.2006 was entered into between the plaintiff and the first defendant, the first defendant represented that she is not in possession of the original sale deed dated 21.01.1980 which stood in the name of her husband and this was also indicated in Clause 7 of the agreement dated 01.08.2006. However, in the sale deed dated 14.12.2006 executed by the first defendant in favour of the second defendant, it was recited that the title deeds to the property have been delivered. Thus, according to the plaintiff, the first defendant had entered into the agreement of sale dated 01.08.2006 with him with deceitful intention to cheat him. When the plaintiff has made various allegations relating to fraud and collision between the defendants, the first defendant ought to have participated in the trial, examined herself to disprove the case of the plaintiff. Further, the plaintiff in his plaint had contented that he received three letters from one Deepak Anand Masih under Exs. A2 to A4 and they only contain blank papers. This was also reiterated by the plaintiff in the pre-suit notice sent to the http://www.judis.nic.in 33 first defendant. However, in the written statement, the first defendant contended that by those letters sent by Deepak Anand Masih, the plaintiff was called upon to perform his part of the contract. However, the so-called letters said to have been sent by the first defendant have not been produced before the trial Court. Even though the the first defendant filed a written statement making various allegations, they were not substantiated by her during the course of trial. Therefore, the averments made by the first defendant in her written statement cannot be considered, rather, they have to be eschewed from being considered.
29. The learned counsel for the plaintiff would further contend that the third defendant has filed a written statement contending that as on the date of execution of the sale deed dated 09.07.2008, Ex.A-14, executed by the second defendant in his favour, the second defendant was in custody of the title deeds and was also in possession of the suit property. However, in the recitals of the sale deed dated 09.07.2008, Ex.A-14, it was stated that possession was with the power of attorney agent, who is the son of the first defendant. Therefore, the transaction between the defendants 1 to 3 is a collusive transaction intended to deprive the right of the plaintiff. In such event, it cannot be contended that the third defendant is a bona fide purchaser. The third defendant ought to have caused necessary enquiry with respect to the title of the property or the subsistence of any agreement to sell the property. In the absence of such an enquiry by the third defendant, the third defendant cannot feign innocence of having purchased the suit property without notice and in good faith. Section 19
(b) of the Specific Relief Act is intended only to protect the purchaser, who http://www.judis.nic.in 34 innocently purchased a property in good faith and it cannot be extended to the third defendant. The onus of proof of good faith is on the third defendant, who takes the plea that he is an innocent purchaser. However, in the present case, the third defendant miserably failed to prove that he is a bona fide purchaser for a valuable consideration without notice. In any event, the third defendant cannot be brought within the fold of subsequent purchaser, if at all, it is the second defendant, who can be termed as second purchaser. However, for the reasons best known, the first and second defendant did not contest the suit and therefore, it cannot be said that the third defendant had stepped into the shoes of either the first defendant or the second defendant to assert a claim that he is a subsequent purchaser. In fact, the third defendant admitted in para-5 of the written statement that he came to know that the plaintiff was not ready and willing to get the sale deed which led to the cancellation of the agreement of sale, Ex.A-1 dated 01.08.2006 by the first defendant. However, in his cross-examination, he admitted that he had neither met the first defendant nor seen the agreement of sale dated 01.08.2006 entered into between the plaintiff and the first defendant. While so, it is not known as to how the third defendant could have filed the written statement contending as though the plaintiff did not fulfil the terms and conditions of the contract, he has not paid the amount of Rs.24,18,000/- within the time stipulated, he was never ready and willing to perform his part of the contract and which led to the cancellation of the agreement of sale dated 01.08.206 by the first defendant. The third defendant failed to explain from whom he obtained the aforesaid factual details which he had averred in his written statement. http://www.judis.nic.in 35
30. The learned counsel for the plaintiff would contend that the plaintiff was always ready and willing to perform his part of the contract but it was the first defendant, through deceitful means, deprived him from getting the sale deed executed in his favour after receipt of the balance sale consideration. For proof of readiness and willingness, it is not necessary that the entire amount of sale consideration should be kept ready by the plaintiff. In this context, the learned counsel for the plaintiff relied on the decision of the Honourable Supreme Court in
(i) (Nathulal vs. Phoolchand) reported in AIR 1970 Supreme Court 546 (ii) (Ramesh Chandra Chandlok and another vs. Chuni Lal Sabharwal (dead) by his legal representatives and others) reported in AIR 1971 Supreme Court 1238 (iii) (Azhar Sultana vs. Rajamani and others) reported in AIR 2009 Supreme Court 2157 and (iv) (R. Aravindhan vs. K.R.S. Janakiraman and others) reported in 2015 (6) MLJ 665 (DB) to contend that it is well settled that it is not necessary for the plaintiff, in a suit for specific performance, to show that he is having sufficient money to perform his part of the contract. What is required is proof of wherewithal and capability to perform his part of the contract. In the present case, the plaintiff had sent a notice dated 25.11.2006 (Ex.A-5) in which he had enclosed a cheque for a sum of Rs.24,18,000/- but the first defendant did not receive it and returned the notice inspite of deliverance of intimation by the postal authorities.
31. The learned counsel for the plaintiff also would contend that the contention of the third defendant that after he purchased the suit property, a portion of the property measuring 2000 square feet was acquired by the http://www.judis.nic.in 36 Government by recognising him as owner of the property cannot be countenanced. The acquisition is only with respect to a portion of the land measuring 2000 square feet out of 11.86 acres. The acquisition of the land in any event, during the pendency of the suit filed by the plaintiff for specific performance will not be a bar for the plaintiff to maintain the suit. To buttress this submission, the learned counsel for the plaintiff relied on the decision of the Honourable Supreme Court in the case of (P.C. Vargheese vs. Devaki Amma Balambika Devi and others) reported in (AIR 2006 Supreme Court 145 wherein it was held that an application to sell a share of the minor during the pendency of the suit will not render the suit for specific performance invalid especially when the vendors, even after excluding the share of the minor, have got title to the property and when the purchaser relinquished his claim for getting a decree for specific performance including the share of the minor. Therefore, according to the learned counsel for the plaintiff, the acquisition of a portion of a land during the pendency of the suit filed by him for specific performance has no relevance for grant of a decree for specific performance in his favour.
32. The learned counsel for the plaintiff also contended that the third defendant has not taken any effort to examine his vendor, the second defendant or his vendor's vendor, the first defendant to safeguard his right over the suit property. There is no pleading in the written statement filed by the appellant/third defendant that there is a difference of opinion between him and his vendor or vendor's vendor or the power agent who sold the property to him on behalf of his vendor. Thus, the transactions which emanated between the defendants 1 to 3 http://www.judis.nic.in 37 are collusive transactions and in such event, the agreement of sale dated 01.08.2006, Ex.A-1 entered into between the plaintiff and the first defendant has to be construed as the one which is still subsisting. The termination of the contract by the first defendant had given rise to a cause of action for the plaintiff to institute the present suit for specific performance. In order to lend support to this contention, the learned counsel for the plaintiff relied on the decision of the Honourable Supreme Court in the case of (Durga Prasad and another vs. Deep Chand and others) reported in AIR 1954 Supreme Court 75 wherein it was held that a suit filed by an agreement holder for specific performance of the contract against the owner of the land or as against the subsequent purchaser is proper and maintainable. In the present case, the plaintiff sued only the first defendant but subsequently, on coming to know the sale made in favour of the second and third defendants, he impleaded them. In such view of the matter, the suit, as filed by the plaintiff is maintainable as against the defendants 1 to 3.
33. The learned counsel for the plaintiff would also contend that the Court below analysed the entire evidence made available and came to a correct conclusion that the third defendant, who alone contested the suit, is not a bona fide purchaser for a valuable consideration without notice. By placing reliance on the price of the suit property mentioned in the agreement of sale, Ex.A-1 dated 01.08.2006 between the plaintiff and first defendant along with the sale price mentioned in the sale deed dated 14.12.2006, Ex.A-13 executed by the first defendant to second defendant and the sale deed dated 09.07.2008, Ex.A14=Ex.B1 between the second and third defendant, the trial court came to http://www.judis.nic.in 38 the correct conclusion that the sale transactions under Exs. A-13 and A-14 are collusive in nature intended to deprive the right of the plaintiff as an agreement holder to purchase the suit property. The trial court also found that the plaintiff was ready and willing to perform his part of the contract, throughout. According to the counsel for the plaintiff, such a conclusion arrived at by the trial court is wholly justified and it does not call for any interference by this Court. Therefore, the learned counsel for the plaintiff prayed for dismissal of this appeal.
34. We have given our thoughtful consideration to the rival submissions made and also perused the oral and documentary evidence, including the Judgment and decree passed by the trial Court. As we have dealt with the factual matrix of the case in great detail, we refrain ourself from making any further reference to the same in this appeal. However, for the sake of disposal of this appeal, certain facts which are absolutely germane and necessary are considered by us.
35. Since it was admitted by both sides that the defendants 2 and 3 cannot be construed as lis pendens purchasers, it is not necessary for this Court to deal with the finding rendered by the trial Court on the aspect of lis pendens purchasers. Therefore, in the light of the submissions made on behalf of the counsel for both sides, the following points emerge for our consideration in this appeal.
(i) Whether the third defendant will come within the scope and ambit of 'subsequent' purchaser and is entitled to the http://www.judis.nic.in protection under Section 19 (b) of the Specific Relief Act? 39
(ii) Whether the third defendant has purchased the suit property for a valuable consideration from his vendor the second defendant without notice to the agreement of sale, Ex.A-1 dated 01.08.2006 between the plaintiff and his vendor's vendor the first defendant herein?
(iii) Whether the third defendant had established that he is a bona fide purchaser for valuable consideration?
(iv) Whether the non-appearance of the defendants 1
and 2 is fatal to the case of the third defendant?
(v) Whether the plaintiff has proved that he was ready
and willing to perform his part of the contract under Ex.A-1, Agreement of sale dated 01.08.2006?
36. The points that arise for determination in this appeal are inter- related and inter-twined. The adjudication of one of the issues will have a bearing on the other. Therefore, all the points are taken up for a joint and collective decision in this appeal.
37. The plaintiff and the first defendant have entered into an agreement for sale of the suit property on 01.08.2006, Ex.A-1 and on execution of the same, the plaintiff paid a sum of Rs.30 lakhs out of the total sale consideration of Rs.1,54,18,000/-. This is not disputed by the first defendant. As per the agreement of sale, Ex.A-1, the plaintiff is duty bound to pay a further sum of Rs.24,18,000/- on or before 31.10.2006 and to pay the balance sum of Rs.1 Crore before 31.01.2007 as a condition precedent for getting the sale deed executed in his favour. According to the plaintiff, the first defendant, even at the time of execution of the agreement for sale, Ex.A-1 represented to him that the http://www.judis.nic.in 40 title deed dated 21.01.1980 had gone astray and it could not be traced, however, she had undertaken to comply with all the formalities to handover the same to the plaintiff. In this context, the plaintiff appeared to have demanded the first defendant to furnish certain details with respect to the loss of the parent document dated 21.01.1980 such as the date on which it was lost, whether any complaint has been given on coming to know about the loss of the document or any publication has been made intimating the loss of the document. However, according to the plaintiff, the first defendant postponed the furnishing of the aforesaid details by assigning one reason or the other. While so, as per the agreement, the plaintiff has to pay further amount of Rs.24,18,000/-, hence, prior to 31.10.2006, the date on which the amount has to be paid, he approached the first defendant and handed over a cheque, which she refused to receive by citing irrelevant reasons. In the meantime, the plaintiff received three letters during October to November 2006 from one Mr. Deepak Anand Masih, but on opening those covers, he could only see certain blank papers enclosed therein. The Plaintiff was keeping his fingers crossed as to who had sent those letters, but he was clueless. As the first defendant did not receive the cheque tendered by the plaintiff, he sent a letter dated 25.11.2006 enclosing a cheque for Rs.24,18,000/-. In the said letter, the plaintiff also expressed his intention to pay the entire sale consideration to get the sale deed executed in his favour. This letter was not received by the first defendant, rather, it was returned unserved with an endorsement "intimation served" to the addressee on 01.12.2006 and 04.12.2006. The returned postal cover was received by the plaintiff on 13.12.2006. Even before receipt of the unserved postal cover, the plaintiff http://www.judis.nic.in 41 received a legal notice dated 05.12.2006 sent on behalf of the first defendant alleging that the plaintiff did not fulfil the terms of contract by paying the sum of Rs.24,18,000/- before 31.10.2006 and therefore the agreement of sale, Ex.A-1 dated 01.08.2006 stands cancelled for breach of the terms and conditions therein. It was further stated that the plaintiff has to explain as to why the sale advance of Rs.30 lakhs paid by him be not forfeited. Curiously, this letter dated 05.12.2006 was sent by an Advocate by name Mr. Deepak Anand Masih and only on receipt of this letter dated 05.12.2006, the plaintiff came to know that the three letters with blank papers inserted therein were sent by Mr. Deepak Anand Masih on behalf of the first defendant. Immediately, the plaintiff sent a reply dated 26.12.2006 in which he made reference to the three letters received with blank papers from Mr. Deepak Anand Masih during October to November 2006. In fact, it was specifically stated that the word "Advocate" has not been indicated in the postal covers received by the plaintiff during October to November 2006, however, in the letter dated 05.12.2006 the name of Mr. Deepak Anand Masih is prominently mentioned with the prefix "Advocate". Further, in the reply dated 26.12.2006, the plaintiff made reference about his frequent demand to the first defendant to furnish encumbrance certificate and the original title deeds for scrutiny of his lawyer. Reference was also made to the fact that the plaintiff was always ready and willing to perform his part of the contract but the first defendant is making calculated design to deny the plaintiff's right to purchase the suit property after receiving Rs.30 lakhs as sale advance. In the reply notice dated 26.12.2006, further reference was made to the caveat applications filed by the first defendant before the District Court, Coimbatore and before this Court http://www.judis.nic.in 42 anticipating that the plaintiff may sue her and may obtain any orders behind her back with respect to the sale transaction. Admittedly, when the plaintiff had many averments against the conduct and attitude of the first defendant, including adopting deceitful means to deprive his right to get the sale deed executed in his favour, the first defendant ought to have sent a rejoinder, rather, she remained silent. Thereafter, the plaintiff has instituted the present suit for specific performance.
38. On notice, the first defendant entered appearance and filed her written statement contending inter alia that as per clause 4 of the agreement of sale dated 01.08.2006, the plaintiff is bound to pay a sum of Rs.24,18,000/- on or before 31.10.2006, but he did not pay it within the stipulated time. Further, as per clause 8 of the agreement of sale, if the first defendant fails to execute the sale deed in favour of the plaintiff after receiving the entire sale consideration, he is entitled only to file a suit for specific performance of this agreement and in such event, it is open to her to sell the suit property to any third party. According to the first defendant, she had duly cancelled the agreement of sale dated 01.08.2006, which she had entered into with the plaintiff and after such cancellation, she had alienated the suit property in favour of an independent third party. The first defendant also filed a written statement stating that the plaintiff was not ready and willing to perform his part of the contract and therefore, he is not entitled for the relief of specific performance. It is further contended that the lawyer engaged by the first defendant had made numerous attempts and sent three letters to the plaintiff between October 2006 to November 2006 to ensure that the conditions http://www.judis.nic.in 43 stipulated in the agreement of sale dated 01.08.2006 are duly performed, but the plaintiff did not comply with the conditions. Therefore, the notice dated 05.12.2006 was sent to the plaintiff rescinding the agreement of sale dated 01.08.2006 inter alia calling upon him to show cause as to why the sale advance paid by him be not forfeited. The first defendant also denied having received any letter dated 25.11.2006, enclosing a cheque thereof, from the plaintiff. Therefore, the first defendant prayed for dismissal of the suit. In this background, when the suit was pending, the plaintiff caused a search with the office of the concerned Sub-Registrar and came to know about the sale deed dated 14.12.2006 executed by the first defendant in favour of the second defendant and the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant. Immediately, the plaintiff impleaded the defendants 2 and 3 as parties to the suit. In the suit, notice was also sent to the defendants 2 and 3 but they did not appear before the trial court. Similarly, the first defendant, who filed her written statement, did not contest the suit. Therefore, the defendants 1 to 3 were called absent and they were set exparte and ultimately an exparte decree was passed on 07.12.2012. Thereafter, the plaintiff deposited the entire balance sale consideration of Rs.1,24,18,000/- to the credit of the suit. He has also filed E.P. No. 19 of 2013 for executing the exparte decree. At this stage, the third defendant has filed an application to set aside the exparte decree passed against him along with an application to condone the delay of 171 days in filing such an application. The trial court condoned the delay and restored the suit. The third defendant has thereafter filed his written statement on 21.08.2015. http://www.judis.nic.in 44
39. In the written statement of the third defendant, it was contended that the plaintiff failed to adhere to the terms and conditions of the agreement dated 01.08.2006. Further, the plaintiff was not ready and willing to perform his part of the contract which led to the cancellation of the agreement of sale dated 01.08.2006 by the first defendant. It was further contended that after cancelling the agreement of sale dated 01.08.2006, the first defendant sold the property to his vendor on 14.12.2006 and subsequently, on 09.07.2008, his vendor executed the sale deed in his favour.
40. As mentioned above, the suit was originally instituted only as against the first defendant. The first defendant entered appearance and filed a written statement, but she did not participate in the trial. In other words, the allegations made in the written statement have not been proved by the first defendant by adducing evidence and by marking documentary evidence before the trial court. The averments made in the plaint, at the first blush, point out the evading nature of the first defendant to perform her part of the contract which she entered into with the plaintiff. The various allegations made in the plaint against the first defendant about her refusal to furnish the parent documents, refusal to receive the cheque for Rs.24,18,000/- when tendered by the plaintiff etc., has to be met only by the first defendant. In this case, the first defendant only filed a written statement but the contents of the written statement have not been substantiated by her, either by stepping into the witness box by herself or by examining any other witness to disprove the allegations made in the plaint. Therefore, we are of the view that the plaint averments in so far as they relate to the first defendant http://www.judis.nic.in 45 stands proved by the plaintiff. This is more so that the plaintiff examined himself as PW1 and marked Exs. A1 to A16. On reading of the plaint averments coupled with the oral testimony of the plaintiff and Exs. A1 to A6, it would clinchingly prove that the plaintiff has discharged his burden of proving his case as against the first defendant.
41. The suit was not contested by the first defendant, but only by the third defendant, who claims himself to be the subsequent purchaser of the suit property. At the outset, even assuming that the plaintiff failed to perform his part of the contract or he was not ready and willing to perform the contract, it has to be defended only by the first defendant, but she did not participate in the trial. The third defendant, who claims himself to be a subsequent purchaser, cannot bat for the first defendant to advance his cause. For the reasons best known, the first defendant, who is the owner of the suit property by then and who had entered into the agreement of sale dated 01.08.2006 with the plaintiff, did not contest the suit. It is also not the case of the plaintiff that the advance sum of Rs.30 lakhs, she had received from the plaintiff on 01.08.2006 was refunded. It is also to be pointed out that the plaintiff has to pay the entire sale consideration on or before 31.01.2007 and to get the sale deed executed in his favour, but even before 31.01.2007, on 05.12.2006, the first defendant sent a notice on 05.12.2006, under Ex.A-7 rescinding the agreement of sale dated 01.08.2006 for alleged breach of the terms and conditions incorporated therein by the plaintiff. Even in the notice dated 05.12.2006, the first defendant called upon the plaintiff to explain as to why the advance sum of Rs.30 lakhs paid by him be not forfeited. While so, http://www.judis.nic.in 46 when the plaintiff had sent a reply dated 26.12.2006, the first defendant ought to have atleast sent a rejoinder, repudiating the allegations made in the reply dated 26.12.2006 or to indicate whether she forfeits the advance money or returns it to the plaintiff. Even before this Court, the defendants 1 and 2 were served, but despite service of notice, they did not participate in this appeal proceedings. The first defendant was the best person to come before the Court and say as to whether the plaintiff portrayed his readiness and willingness to perform his part of the contract at the earliest point of time. It is for the first defendant to say as to whether she represented to the plaintiff that the original title deed has been lost and whether the plaintiff demanded to furnish the documents of title for verification by his lawyer as has been incorporated in clause 7 of the agreement of sale dated 01.08.2006. The first defendant also has to say whether the plaintiff, even before the date fixed for payment of Rs.24,18,000/- tendered a cheque but she refused. It is also for the plaintiff to prove whether at her instruction, her lawyer Mr. Deepak Anand Masih had sent three notices to the plaintiff, which according to the plaintiff did not contain any notice, rather only blank papers. The Plaintiff was also excepted to produce the three letters, which she allegedly sent to the plaintiff through Mr. Deepak Anand Masih so as to enable the plaintiff to know the contents of those letters. It is also for the first defendant to come before the Court and substantiate that due to the protracted silence on the part of the plaintiff in not adhering to the terms and conditions, she had sent the notice of termination on 05.12.2006. The first defendant also has to substantiate the refusal on her part to return the letter dated 25.11.2006 sent by the plaintiff by enclosing a cheque for Rs.24,18,000/-. While so, the third http://www.judis.nic.in 47 defendant, at any rate, cannot be heard to say that the plaintiff was not ready and willing to perform his part of the contract or he failed to fulfil the terms and conditions incorporated in the agreement of sale dated 01.08.2006. Even as admitted by the third defendant in his cross-examination, he never met the first defendant and he has no knowledge about the contract between the plaintiff and the first defendant. While so, the third defendant is not a proper party to contest the suit in so far as it relates to the understanding or agreement between the plaintiff and the first defendant. In such circumstances, the third defendant cannot be heard to say that the plaintiff did not adhere to the terms and conditions of the contract which he entered into with the first defendant and therefore the first defendant is justified in cancelling the agreement of sale dated 01.08.2006. Thus, the third defendant has no locus standi to contend that the plaintiff did not adhere to the terms and conditions of the agreement dated 01.08.2006 or he was not ready and willing to perform his part of the contract under Ex.A-1, agreement of sale dated 01.08.2006.
42. As per the conditions incorporated in the agreement of sale dated 01.08.2006, the plaintiff has to get the sale deed executed in his favour on or before 31.01.2007. In other words, an ultimatum was given to the plaintiff to perform his part of the obligations under Ex.A-1 to get the sale deed executed in his favour before 31.01.2007. Even as per clause 8 the agreement of sale, Ex.A-1, in the event of failure on the part of the first defendant/owner to execute the sale deed in favour of the purchaser/plaintiff, the plaintiff can resort to file a suit for specific performance. At the same time, the agreement of sale, Ex.A-1 is http://www.judis.nic.in 48 silent with regard to the consequences that may arise in the event of failure on the part of the first defendant to perform her part of the obligations and the recourse available to the plaintiff. Admittedly, even before the ultimatum given in the agreement of sale dated 01.08.2006 for the plaintiff to pay the entire sale consideration on or before 31.01.2007, the first defendant had unceremoniously resorted to cancel the agreement of sale through the notice dated 05.12.2006. It is necessary to point out that on the one hand, the first defendant unceremoniously rescinded the contract and on the other hand, she filed Caveat Petitions before the District Court, Coimbatore and before this Court anticipating that the plaintiff may sue her with a suit for specific performance. By ensuring that the plaintiff could not get any order adverse against her by filing such caveat applications, the first defendant had clandestinely executed the sale deed dated 14.12.2006 in favour of the second defendant. In the above facts and circumstance, we are of the view that the first defendant ought to have waited till 31.01.2007, as indicated in the agreement of sale dated 01.08.2006 for performance of the contract by the plaintiff and thereafter executed the sale deed in favour of a person of her choice. Therefore, we are of the view that the hasty manner in which the sale deed dated 14.12.2006 came to be executed by the first defendant in favour of the second defendant is nothing short of a deceitful and calculated design devised by the first defendant intended to deprive the right of the plaintiff as an agreement holder of the suit property.
43. The other circumstances which lend support to our above conclusion is that the non-participation of the first and second defendant in the http://www.judis.nic.in 49 trial of the suit. It is needless to mention that the first defendant, being the vendor of the second defendant and the second defendant, being the vendor of the third defendant ought to have participated in the trial to show that the sale deeds which they executed are valid inter alia repudiated the averments made by the plaintiff in the plaint. As the defendants 1 and 2 did not participate in the trial inspite of service of notice, it casts a doubt as to whether the sale deeds have emanated in the normal course or they were engineered at the instance of the defendants to deprive the right of the plaintiff. As mentioned above, the plaintiff was to perform his part of the contract under the agreement of sale, Ex.A-1 dated 01.08.2006 on or before 31.01.2007. In view of the fact that the first defendant acted detrimental to the interest of the plaintiff, which is explicit from the notice dated 05.12.2006 sent by her to the plaintiff through her lawyer, the plaintiff, after sending a reply on 26.12.2006 apparently waited for the first defendant to respond, particularly to send a re-joinder. Thereafter, the plaintiff filed the suit on 19.02.2007. Even before filing of the suit, the first defendant alienated the suit property in favour of the second defendant by executing a sale deed dated 14.12.2006. As rightly pointed out by the learned counsel for the plaintiff, the value of the sale consideration indicated in Ex.A-1 dated 01.08.2006 is Rs.1,54,18,000/-. However, the very same property was sold by the first defendant to the second defendant on 14.12.2006 for a throw away price of Rs.12,68,000/-. A prudent seller who intended to sell her property for Rs.1,54,18,000/- on 01.08.2006 cannot be expected to sell the very same property for a sum of Rs.12,68,000/- within one year. At best, such a prudent purchaser can sell the property for a price slightly over and above Rs.1,54,18,000/- and not for a lesser price. http://www.judis.nic.in 50 Similarly, within three months of the purchase, the second defendant executed a power of attorney deed dated 21.02.2007 in favour of the son of the first defendant. On the strength of the power of attorney deed dated 21.02.2007, the power agent entered into an agreement of sale dated 18.06.2007, Ex.A15 with one Mohan for a whooping sum of Rs.4,03,24,000/- and received a sale advance of Rs.50 lakhs as advance. However, the agreement of sale under Ex.A-15 was cancelled on 29.11.2009. After cancelling the agreement of sale under Ex.A-15, the power of attorney agent sold the suit property on behalf of the second defendant in favour of the third defendant by executing the sale deed dated 09.07.2008. In the sale deed dated 09.07.2008, the sale price was indicated as Rs.38,05,000/-. Thus, it is explicitly clear that the sale deeds dated 14.12.2006 executed by the first defendant in favour of the second defendant and the sale deed dated 09.07.2008 executed by the second defendant in favour of the third defendant are nothing but make-belief documents intended to deprive and defeat the legitimate right of the plaintiff to get the sale deed executed in his favour in respect of the suit property.
44. The learned Senior Counsel for the third defendant mainly contend that even before the institution of the suit, the first defendant had sold the suit property in favour of the second defendant on 14.12.2006. The second defendant had purchased the suit property for a bona fide sale consideration in good faith. After such purchase of the suit property by the second defendant, the suit was filed by the plaintiff on 19.02.2007. At the time when the suit was instituted by the plaintiff, the second defendant purchased the suit property by means of a http://www.judis.nic.in 51 registered sale deed dated 14.12.2006 and became entitled to assert a title to the suit property as a bona fide purchaser. Subsequently, the second defendant sold the suit property to the third defendant on 09.07.2008. According to the learned Senior Counsel for the third defendant, till the date of execution of the sale deed dated 09.07.2008, the third defendant was not aware of the pendency of the suit filed by the plaintiff against the first defendant. Further, as on the date when the sale deed dated 09.07.2008 was executed in favour of the third defendant, he was not impleaded as a party to the suit. Therefore, the learned Senior Counsel would contend that the third defendant is a bona fide purchaser of the suit property without notice of the suit ot the agreement of sale dated 01.08.2006 entered into between the plaintiff and the first defendant and he is entitled for protection under Section 19 (b) of the Specific Relief Act. The learned Senior Counsel for the third defendant would vehemently contend that specific performance of a contract may be enforced against any other person claiming under the vendor by a title arising subsequent to the contract, except a transferee for value, who has paid money in good faith and without notice of the original contract. In the present case, the third defendant purchased the suit property for a valuable sale consideration and is in possession of the suit property as an owner thereof. Therefore, by giving a restrictive meaning to Section 19 (b) of the Specific Relief Act, the right and title of the third defendant need not be curtailed. It is his contention that the protection given under Section 19 (b) of the Specific Relief Act cannot be restricted to cover only one person who has purchased the suit property from the original owner viz., the first defendant in this case. The words "any other person claiming under him by a title arising subsequently to the http://www.judis.nic.in 52 contract" would take within its fold all persons who have purchased the property from the original owner subsequent to the contract. Therefore, the learned Senior Counsel for the third defendant prayed to declare the third defendant as a subsequent purchaser and to protect his right and interest over the suit property as has been contemplated under Section 19 (b) of the Specific Relief Act.
45. We are afraid as to whether the such a submission made by the learned Senior Counsel for the third defendant could be accepted in the given facts and circumstances of the case. If the submission of the Senior Counsel for the third defendant is accepted, it will have severe ramification and consequences that could not be slightly adjudicated by Courts of law. It is true that Section 19
(b) of the Specific Relief Act confers certain protection to an innocent purchaser of the property in good faith without notice. Section 19 of the Specific Relief Act reads as under:-
19. Relief against parties and persons claiming under them by subsequent title.:- Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against-
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract
(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant
(d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out ofthe amalgamation
(e) when the promoters of a company have before its incorporation, entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation, the company http://www.judis.nic.in provided that the company has accepted the contract and 53 communicated such acceptance to the other party to the contract."
46. It is evident from Section 19 of the Specific Relief Act that the legislators have thought it fit to confer certain protection to an innocent purchaser who purchases a property by paying a valuable consideration in good faith without any knowledge about the existing right, title or interest of the property by any other person. At the same time, the term mentioned in Section 19 (b) of the Specific Relief Act that "any other person claiming under him by a title arising subsequently to the contract" cannot be given a wider meaning and in our opinion, it can be given only a restrictive meaning. If the argument of the learned Senior Counsel for the third defendant is accepted and the scope of Section 19
(b) of the Specific Relief Act is enlarged, it would only result in chaos and multiplicity of proceedings among the purchaser or subsequent purchaser (s). It will undoubtedly enlarge and protract the scope of the suit for specific performance and in such event, the plaintiff who sought such a relief will only be frustrated due to the protracted proceedings. If the scope of Section 19 (b) is expanded or extended to bring within it's fold a purchaser from a subsequent purchaser, for the purpose of conferring upon the protection, it would go against the spirit with which the enactment was framed. For example, if A, the owner of a land enters into an agreement for sale with X and during the subsistence of the agreement for sale, A sells the land to B without the knowledge of the agreement holder, X, then X can at the best sue A as the land owner and B as the subsequent purchaser to assert his right as an agreement holder to get a decree for specific performance. However, in order to ensure that nothing happens in the matter http://www.judis.nic.in of obtaining a decree against him, if B, the subsequent purchaser sells the 54 property to C and similarly C to D, E, F, there will not be an end to the tunnel. In such event, the purchaser of the property from the subsequent purchaser B, such as C, D, E etc., cannot be permitted to come forward and say that they have purchased suit property innocently without any notice of the lis between the original owner A and the agreement holder X and resultantly they have to be conferred with the protection under Section 19 (b) of the Specific Relief Act. If such a protection is conferred to a purchaser from a subsequent purchaser namely B, it will defeat the very avowed object with which the framers of our constitution have enacted the Specific Relief Act to give protection to a legitimate purchaser of a land in good faith. Further, if a purchaser of a subsequent purchaser is given protection by invoking Section 19 (b) of the Specific Relief Act, it will prolong and protract the litigation in adjudicating as to whom such protection could be conferred and whether the sale made in favour of a purchaser from the subsequent purchaser is valid and binding on the agreement holder. This will only result in the agreement holder to eternally wait for getting a relief of specific performance inter alia frustrate him. Therefore, such purchaser of a land from a subsequent purchaser cannot even be permitted to step into the shoes of the original owner to get the title of the ownership conferred on him. Therefore, we hold that the third defendant cannot be regarded or recognised as a subsequent purchaser and his purchase of the suit property from the second defendant will not be construed as a one in good faith or such purchaser by the third defendant will be a bar for the plaintiff to get a decree for specific performance. http://www.judis.nic.in 55
47. As regards the plea of the plaintiff that he was always ready and willing to perform his part of the contract, we find that even before expiry of the time stipulated in the agreement of sale, Ex.A-1 dated 01.08.2006, the plaintiff tendered the further sale advance of Rs.24,18,000/- by way of cheque, but it was not received by the first defendant. Further, on 25.11.2006, the plaintiff sent a letter enclosing a cheque for Rs.24,18,000/- to the first defendant through registered post, but it was not received by the first defendant. As per the endorsement made in the postal cover, intimation was delivered to the first defendant on 01.12.2006 and on 04.12.2006 regarding the letter addressed to her by the plaintiff and ultimately it was returned to the plaintiff on 13.12.2006 with endorsement. The letter dated 25.11.2006 was sent to the correct address of the first defendant but it was she, who refused to receive it. Further, in the suit, the plaintiff has filed Ex.A11, Certificate of balance dated 21.12.2006 issued by the Union Bank of India indicating that a sum of Rs.1,71,31,962/- is available in the bank account of the plaintiff. Yet another Certificate of balance dated 19.01.2007, Ex.A12 issued by the very same bank was filed indicating that a sum of Rs.1,24,90,164.46 is available in the bank account of the plaintiff. Above all, on 07.12.2012, the suit was decreed exparte as the defendants 1 to 3 did not contest the suit and immediately thereof, the plaintiff had deposited the entire sale consideration of Rs.1,24,18,000/- to the credit of the suit. After the plaintiff filed an Execution Petition to execute the exparte decree, the third defendant has filed an application and at his instance, the suit was restored. Even after restoration, the defendants 1 and 2 did not contest the suit rather it was only contested by the third defendant. Thus, even prior to the present decree and judgment passed by http://www.judis.nic.in 56 the trial court, the plaintiff had deposited the entire sale consideration on 07.12.2012. In any event, readiness and willingness has to be inferred from the pleadings and conduct of the parties to the agreement. If the plaint averments are ready as a whole, we could only come to an irresistible conclusion that the plaintiff has already exhibited his readiness and willingness to perform his part of the contract. In this context, several decisions have been relied on by the counsel for the plaintiff. In one of the decisions relied on by the learned counsel for the plaintiff, the Honourable Supreme Court, in the case of (Nathulal vs. Poolchand) reported in AIR 1970 Supreme Court 546 held in para No.6 as follows:-
"6. Phoolchand could be called upon to pay the balance of the price only after Nathulal performed his part of the contract. Poolchand had an outstanding arrangement with his banker to enable him to draw the amount needed by him for payment to Nathulal. To prove himself ready and willing to a purchaser is not necessarily to produce the money or to vouch a concluded scheme for financing the transaction. (Bank of India Limited vs. Jamsetji A.H. Chinoy and Messers Chinoy and Co., 77 Ind App 76 at p.91 = (AIR 1950 PC 90 at p.96).
48. The learned counsel for the plaintiff also relied on the the Division Bench decision of this Court in the case of (R. Aravindhan vs. K.R.S. Janakiraman and others) reported in 2015 (6) MLJ 665 (DB) wherein it was held in para No.53 as follows:-
"53. But, we are of the considered view that Exs. A-4 to A- 6 cannot really be pooh-poohed. These documents are issued respectively by a non-banking finance company and a banking company, even before the expiry of the period stipulated in the agreements. It is not the case of the appellant that these documents are fabricated. The law is well settled that it is not necessary for the plaintiff in a suit for specific performance to show jingling coins. All that he is required to show is the availability of sufficient resources to pay the balance of sale consideration. This requirement is fulfilled by Exs. A-4 to A-6 at least to the extent of http://www.judis.nic.in Rs.75,00,000/-. It is only when the sale deed is executed that 57 Sundaram Home Finance Limited and Standard Chartered Bank could been expected to issue cheques. As a matter of fact, the plaintiffs have paid a sum of Rs.55,000/- to Sundaram Home Finance Limited for processing their loan application, as seen from the third paragraph of Ex.A-4. The plaintiffs have similarly paid a processing fee of Rs.27,650/- as seen from column No.10 of Ex.A- 4 to the Standard Chartered Bank. Therefore, Exs. A-4 to A-6 cannot be belittled as being sham and nominal documents."
49. From the aforesaid decisions laid down by the Honourable Supreme Court and this Court, it can be concluded that a willing purchaser need not show that he is keeping money readily available or deposit the same in the Court, what is required, is that such a purchaser has to show that he is capable of performing his contract and he is financially resourceful enough to conclude the contract. In the present case, the plaintiff has filed Exs. A-11 and A-12, Certificates of balance issued by Union Bank of India indicating that a sum of Rs.1,71,31,962/- and Rs.1,24,90,164.46 respectively are available in his bank account. Above all, on 07.12.2012, when the suit was decreed exparte, the plaintiff had deposited the entire sale consideration to the credit of the suit and it is lying in the Court deposit even prior to the decree and judgment passed by the trial Court, which is the subject matter of this appeal. Therefore, it cannot be said that the plaintiff was not ready and willing to perform his part of the contract, rather, we hold that the plaintiff had exhibited that he was ready and willing to conclude the contract throughout by paying the balance sale consideration. The trial court also rightly considered the above facts and held that the plaintiff was always ready and willing to perform his part of the contract. We do not see any infirmity or perversity in such a conclusion arrived at by the trial Court. Accordingly, we answer all the questions framed for consideration in this appeal in favour of the first http://www.judis.nic.in 58 respondent/plaintiff and against the appellant/third defendant.
50. In the light of our above conclusion, we hereby confirm the Judgment and Decree dated 26.09.2016 passed in O.S. No. 102 of 2007 on the file of III Additional District and Sessions Judge, Coimbatore. Resultantly, the Appeal Suit fails and it is dismissed. No costs. Consequently, connected miscellaneous petition is closed.
(R.P.S.J.,) (C.S.N.J.,) 30-11-2018 rsh Index : Yes To The III Additional District and Sessions Judge Coimbatore http://www.judis.nic.in 59 R. SUBBIAH, J and C. SARAVANAN, J rsh Pre-delivery Judgment in A.S. No. 114 of 2017 30-11-2018 http://www.judis.nic.in