Andhra HC (Pre-Telangana)
D. Sarala vs P. Pratap Reddy on 7 September, 2006
Equivalent citations: 2007(1)ALD830, 2007(2)ALT225
JUDGMENT G. Bhavani Prasad, J.
1. The common judgment of District Judge, Ranga Reddy District, dated 30-3-1994 in Original Suit Nos. 20 of 1993, 91 of 1993 and 92 of 1993 led to these appeals.
2. The parties are referred to herein as the vendor, vendor's husband, vendee and subsequent purchaser respectively.
3. The facts leading to the appeal are that the vendor purchased 300 square yards of land in Survey No. 262 of Hayathnagar Village and Taluk, Ranga Reddy District from D. Tanesha under a registered sale deed dated 19-8-1982, registered on 20-8-1982. The vendor entered into an agreement of sale with the vendee on 21-3-1984 agreeing to sell the said 300 square yards for Rs. 75,000/-, receiving an earnest money of Rs. 40,000/-. The vendor further received Rs. 5,000/- from the vendee on 1-4-1984 under a receipt and the balance consideration as per the agreement of sale had to be paid within 45 days from 21-3-1984.
4. The vendee claimed that she approached the vendor and her husband on 30-4-1984 requesting to receive the balance sale consideration and register the document and on the request of the vendor and her husband, the vendee obtained a bank draft for Rs. 30,000/- on 4-5-1984. When the vendor and her husband were postponing the matter, the vendee issued legal notices on 29-5-1984 and 12-6-1984. The vendor and her husband gave a reply stating that they entered into an oral agreement of sale for 100 square yards out of 300 square yards with the subsequent purchaser on 30-8-1982 and that the vendee's agreement was subject to clearance of the earlier transaction with the subsequent purchaser. The vendee gave a reply on 28-6-1984 and issued a telegraphic notice on 13-7-1984. As there was no response, the vendee filed O.S. No. 20 of 1993 (O.S. No. 222 of 1984) for specific performance against the vendor and her husband. The subsequent purchaser was impleaded as a party to the suit without seeking any relief against him in pursuance of the order in I.A. No. 44 of 1989, dated 5-4-1989. The vendor and her husband denied delivering possession of 300 square yards to the vendee under the agreement. They also claimed that the original document of title and other documents were stolen from their house on 21-6-1984, on which a police complaint was given. But the vendee's reply notice dated 28-6-1994 mentioned the document to be with her.
5. The subsequent purchaser filed O.S. No. 91 of 1993 (O.S. No. 190 of 1985 = O.S. No. 700 of 1991) against the vendee claiming that he purchased 100 square yards in Survey No. 262 under a registered sale deed dated 25-5-1984 from the vendor and was in possession and enjoyment since the date of purchase, with which the vendee tired to interfere. He filed the suit originally for a permanent injunction against the vendee and subsequently amended the same as per orders in I.A. No. 1063 of 1986 dated 31-3-1987 claiming that under the guise of orders in I.A. No. 401 of 1985 he was dispossessed by the vendee on 8-8-1986. Hence, he sought for declaration of his title to 100 square yards and possession evicting the vendee therefrom.
6. The vendee filed O.S. No. 92 of 1993 (O.S. No. 401 of 1985 = O.S. No. 702 of 1991) against the subsequent purchaser and vendor's husband to declare the registered sale deed dated 29-5-1984 (25-5-1984) executed by the vendor in favour of the subsequent purchaser as null and void claiming that after she was put in possession of 300 square yards in pursuance o the agreement of sale by the vendor in her favour, she constructed one room after levelling the land and also laid fencing with stone pillars and barbed wire. After she filed the suit for specific performance, ex parte injunction orders were passed in her favour in I.A. No. 764 of 1984 and I.A. No. 765 of 1984, which were later made absolute. The vendor's husband and the subsequent purchaser, who is the cousin brother of the vendor, colluded and brought into existence the forged document dated 29-5-1984 (25-5-1984) in respect of 100 square yards. The document was as though possession of 100 square yards was delivered to the subsequent purchaser, while the vendee was in actual possession.
7. The vendor, her husband and the subsequent purchaser claimed that the vendor entered into an oral agreement with the subsequent purchaser on 30-8-1982 in respect of 100 square yards out of 300 square yards for a consideration of Rs. 3,000/- and after receiving Rs. 2,500/- on that day, they delivered possession to the subsequent purchaser on 20-1-1984 after receiving the balance of sale consideration of Rs. 500/- and executing an agreement of sale. This was followed by the registered sale deed dated 25-5-1984. The subsequent purchaser, with the earlier agreement of sale and earlier possession, fixed stones kadis and fenced with barbed wire the said 100 square yards. The suit in O.S. No. 92 of 1993 was bad for misjoinder and non-joinder of a necessary party, the vendor.
8. On such pleadings, the trial Court framed the following issues:
O.S. No. 20 of 1993:
1. Whether the plaintiff was put in possession of the suit plot admeasuring 300 square yards ?
2. Whether the suit agreement of sale was subject to the clearance of any agreement of sale of 100 square yards out of the suit plot in favour of one Sri P. Pratapreddy ?
3. Whether the sale of 100 square yards out of the suit plot to Sri P. Pratapreddy is true and binding on the plaintiff ?
4. Whether the suit is bad for nonjoinder of necessary parties ?
5. Whether the defendants committed breach of contract of sale ?
6. Whether plaintiff is entitled to the specific performance of the suit agreement of sale ?
7. To what relief ?
Additional Issue: Whether 3rd defendant is a bona fide purchaser for value from defendant No. 1 without the knowledge of the plaintiff?
O.S. No. 91 of 1993:
1. Whether the plaintiff is entitled to perpetual injunction as prayed for ?
2. To what relief ?
Additional issue framed in the judgment of the trial Court:
Whether the plaintiff is entitled to the declaration and possession sought ?
O.S. No. 92 of 1993:
1. Whether the suit is bad for nonjoinder of parties ?
2. Whether the plaintiff is entitled to declaration as prayed for ?
3. Whether the defendants are entitled to exemplary costs of Rs. 3,000/- ?
4. To what relief ?
9. The suits instituted in different Courts were ultimately tried and disposed of together in the Court of District Judge, Ranga Reddy District. In O.S. No. 20 of 1993, P.Ws.1 to 4, D.Ws.1 and 2 and C.W.1 were examined and Exs.A.1 to A.16, B.1 to B.13, X.1 and X.2 were marked. In O.S. No. 92 of 1993, P.Ws.1 and 2 were examined and Exs.A.1 to A.8 and Ex.B.1 were marked. In O.S. No. 91 of 1993, no evidence was adduced.
10. In pursuance of the orders of the High Court in C.R.P. No. 2589 of 1992, dated 8-10-1993, all the three suits were clubbed and disposed of through a common judgment at the request of the learned Counsel for both parties.
11. The trial Court noted in the impugned judgment that the agreement of sale in favour of the vendee by the vendor on 21-3-1984 and further payment of Rs. 5,000/- by the vendee to the vendor were admitted. The trial Court observed that the question whether the oral agreement dated 30-8-1982 in favour of the subsequent purchaser was true or not, is not very relevant, as Ex.B.11 written agreement dated 20-1-1984 in his favour was also earlier to Ex.A.1 agreement in favour of the vendee. The trial Court further noted that the vendor, her husband and subsequent purchaser are closely related to one another and that the claim of delivery of possession of 100 square yards to the subsequent purchaser on 30-8-1982 stood belied by the recital in Ex.B. 11 about delivery of possession on the date of that agreement. It further observed that non-examination of the vendor leads to an adverse inference and the absence of any reference to any earlier agreement in favour of the subsequent purchaser in Ex.A.1 agreement in favour of the vendee was another adverse circumstance. Apart from the recital in Ex.A.1 about the delivery of possession of 300 square yards, selling 100 square yards for Rs. 3,000/- on 30-8-1982 within 11 days of purchase of 300 square yards by the vendor on 19-8-1982 for Rs. 5,000/- is ex facie improbable and absurd. No reasons were assigned for the same and the attestors to Ex.B.11 were not examined. The tax receipts and pahanies were subsequent to the suit and hence, the trial Court concluded that the vendee was put in possession of 300 square yards under Ex.A.1 and that Ex.A.1 was not subject to clearance of any earlier agreement. Ex.B.11 was held to be not true and genuine document and the subsequent purchaser was held to be not a bona fide purchaser. The readiness and willingness of the vendee to perform her part of the contract were accepted due to the draft taken for the balance sale consideration and the notices issued by the vendee. The trial Court observed that the subsequent purchaser with a registered sale deed in his favour in respect of 100 square yards is a necessary party though not in possession, but he was made a party to the suit only as per the orders in I.A. No. 44 of 1989, which was filed on 25-1-1989 and allowed on 5-4-1989. The vendee who filed the suit for specific performance on 18-7-1984 had to be imputed with the knowledge and notice of the sale deed in favour of the subsequent purchaser registered prior to the suit in view of Section 3 of the Transfer of Property Act. The trial Court also noted that in O.S. No. 91 of 1993 the subsequent purchaser filed I.A. Nos. 401 of 1985 in which the vendee filed a caveat through her Counsel on 15-6-1985. I.A. No. 401 of 1985 was dismissed on 16-7-1985. As such, the trial Court concluded that even if the vendee had no knowledge of registered sale deed in favour of the subsequent purchaser earlier, she definitely had knowledge since the receipt of notice in I.A. No. 401 of 1985. But the vendee did not take steps to implead the subsequent purchaser as a party to the suit for specific performance either within three years from the execution and registration of the sale deed on 25-5-1984 or within three years from 15-6-1985 when the vendee appeared through her Counsel in I.A. No. 401 of 1985. The trial Court referred to Section 22 (sic. 21) of the Limitation Act, 1963 under which a newly added party would be deemed to be a party to the suit only from the date when he is added and cannot be deemed to be a party from the date of institution of the suit, unless the Court makes a specific order to that effect. The vendee did not seek any such leave and did not state any reasons in the affidavit in support of I.A. No. 44 of 1989 for not impleading the subsequent purchaser earlier. Consequently, the trial Court held that the vendee is not entitled to specific performance in respect of 100 square yards covered by the sale deed dated 25-5-1984, which became binding on the vendee due to the bar of limitation against the subsequent purchaser. But she is entitled to specific performance in respect of the remaining 200 square yards only. Calculating the balance sale consideration at Rs. 250/- per square yard for 200 square yards, the trial Court directed the vendee to deposit Rs. 5,000/- on or before 15-4-1994, upon which the vendor has to execute sale deed, and dismissed the suit against the vendor's husband and subsequent purchaser. The trial Court further found that as the suit in O.S. No. 92 of 1993 filed by the vendee for cancellation of the document did not implead the vendor, the executant of the document, who is a necessary party, the suit is bad for non-joinder of necessary party. The trial Court concluded that the sale deed in favour of the subsequent purchaser is not, ipso facto, null and void and hence, the vendee is not entitled to the declaration sought for in O.S. No. 92 of 1993 and dismissed the suit without costs. The trial Court further concluded that as the subsequent purchaser has a registered sale deed in his favour, which was not questioned in the suit for specific performance and as the suit for declaring the document as null and void in O.S. No. 92 of 1993 was also dismissed, the subsequent purchaser is entitled to declaration of his ownership and recovery of possession of 100 square yards purchased under the sale deed dated 25-5-1984 and hence, decreed O.S. No. 91 of 1993 without costs.
12. The vendee filed A.S. Nos. 892 of 1994, 893 of 1994 and 894 of 1994 challenging the dismissal of O.S. No. 20 of 1993 in respect of 100 square yards, the dismissal of O.S. No. 92 of 1993 for cancellation of the sale deed in favour of subsequent purchaser and the decree of O.S. No. 91 of 1993 granting declaration of title and possession in respect of 100 square yards to the subsequent purchaser. She contended that in view of the findings of fact of the trial Court, specific performance should have been decreed in respect of 100 square yards also. The claims of the subsequent purchaser can be ignored by the vendee, as he was not a bona fide purchaser for value under nominal and untrue transaction, even if the subsequent purchaser was not impleaded within the period of limitation. Procedural irregularities and technicalities should not have weighed and P. Govinda Reddy and Ors. v. Golla Obulamma 1971 (2) APLJ 231 (FB), has no application. The invalidity and nominal nature of the sale deed in favour of subsequent purchaser should not have lead to a decree of O.S. No. 91 of 1993. The vendee specifically contended that the sale deed was brought into existence and forged by the vendor's husband and subsequent purchaser and the vendor was not considered as a participant in the illegal transaction. The cancellation of document will affect only the subsequent purchaser and O.S. No. 92 of 1993 was not bad for non-joinder of the vendor who is not a necessary party. Hence the vendee sought for reversing the common judgment and the consequential decrees to the extent they went against her.
13. The vendor, her husband and the subsequent purchaser filed A.S. No. 1785 of 1994 to set aside the judgment and decree in O.S. No. 20 of 1993 contending that the vendee was never ready and willing to perform her part of the contract or to comply with the terms of the contract. She entered into the agreement of sale with the knowledge of subsisting agreement in favour of the subsequent purchaser and the evidence on record and the admissions of the vendee were ignored in coming to incorrect conclusions, which ought to be set aside.
14. Sri Vilas V. Afzulpurkar and Sri Deepak Desh Pande, learned Counsel for the vendee while supporting the findings of fact arrived at by the trial Court, contended that when the vendor had no subsisting interest in 100 square yards after executing registered sale deed in favour of subsequent purchaser, neither her presence is proper or necessary nor any comprehensive adjudication of the issues in controversy between the parties prejudiced by her absence in O.S. No. 92 of 1993. The learned Counsel argued that O.S. No. 92 of 1993 should have been, therefore, decreed and O.S. No. 91 of 1993 should have been consequentially dismissed. The learned Counsel further contended that when the sale in favour of the subsequent purchaser was found to be vitiated, his presence in the suit for specific performance within the period of limitation was not required. Even otherwise, when O.S. No. 92 of 1993 was filed within the period of limitation prescribed for cancelling the sale deed in favour of the subsequent purchaser, the same should have enured to the benefit of the vendee in O.S. No. 20 of 1993 also and in any view, specific performance should have been granted in respect of the entire 300 square yards.
15. Sri Abdul Rasheed, learned Counsel representing Smt. Anusha Mahmood, learned Counsel for the vendor, her husband and the subsequent purchaser contended that the absence of readiness and willingness of the vendee to perform her part of the contract was evident from the evidence on record and no relief of specific performance even in respect of 200 square yards should have been granted. The learned Counsel argued that the findings of fact of the trial Court about the agreements of sale and the sale deed in favour of the subsequent purchaser are not in tune with the probabilities arising out of the evidence on record and have to be set aside. The learned Counsel, therefore, sought for reversal of the judgment and decree in O.S. No. 20 of 1993 to the extent they favoured the vendee.
16. The learned Counsel for both parties cited a number of precedents, which will be referred to in due course.
The points that arise for consideration in these appeal are:
1. Whether the agreements of sale and the sale deed in favour of the subsequent purchaser in respect of 100 square yards are true, valid and binding on the vendee ?
2. Whether the vendee is entitled to specific performance ?
3. Whether the vendee is not entitled to cancellation of the sale deed in favour of the subsequent purchaser and specific performance in respect of the said 100 square yards due to not impleading the vendor in O.S. No. 92 of 1993 and not impleading the subsequent purchaser within the period of limitation in O.S. No. 20 of 1993 ?
4. To what relief ?
Point No. 1:
17. The vendor and her husband in their reply notice dated 20-6-1984, Ex.B.2 in O.S. No. 20 of 1993, referred to the agreement of sale in favour of the subsequent purchaser orally on 30-8-1982 and in writing on 20-1-1984 and the subsequent sale deed on 25-5-1984. The vendor's husband as D.W.1 in O.S. No. 20 of 1993 reiterated that the vendee was informed and she promised to settle the matter with the subsequent purchaser, which she did not do. However, the vendor herself was not examined and her alleged unsoundness of mind is not corroborated by any evidence. The subsequent purchaser as D.W.2 in O.S. No. 20 of 1993 did not even remember whether he obtained any receipt for payments of Rs. 2,500/- and Rs. 500/- to the vendor and at the time of the alleged oral agreement on 30-8-1982 he claimed the presence of only himself and the vendor in the first instance and again claimed that the vendor's husband was also present. Ex.B.11 agreement dated 20-1-1984 did not refer to any earlier oral agreement. As observed by the trial Court, no reason was assigned as to why the vendor thought of selling 100 square yards within 11 days of her purchase of 300 square yards. Ex.A.1 agreement of sale made no reference to the earlier agreement in favour of the subsequent purchaser or any understanding between the parties in that regard. The vendor executed the agreement for the entire 300 square yards reciting delivery of possession of the same also, which would not have been accepted by the vendee if an earlier agreement and possession of 100 square yards with the subsequent purchaser were brought to her notice. The consideration under Ex.A.1 was fixed for entire 300 square yards and advance sale consideration to a tune of Rs. 45,000/- was also received on that premise. The original title deed of the vendor was with the vendee. The vendee as P.W.1 in O.S. No. 20 of 1983 and her husband as P.W.1 in O.S. No. 92 of 1993 denied the claims of the vendor and the subsequent purchaser, though the execution of sale deed dated 25-5-1984 in favour of the subsequent purchaser is admitted. The trial Court presumed the vendor, her husband and subsequent purchaser to be related on the strength of the pleadings in O.S. No. 92 of 1993. It also noted that the recital in Ex.B.11 about delivery of possession of 100 square yards on that date belies the claim of earlier delivery of possession under an oral agreement on 30-8-1982. The attestors or the scribe of Ex.B.11 agreement in favour of the subsequent purchaser were not examined and tax receipts and pahanies subsequent to suit are not relevant. The findings of fact arrived at by the trial Court are in tune with the evidence and broad human probabilities and if so, the oral agreement dated 30-8-1982 cannot be considered to be true and the written agreement dated 20-1-1984 cannot be considered to be bona fide and genuine and the purchase by the subsequent purchaser under the sale deed dated 25-5-1984 cannot be considered to disclose a bona fide purchase for value. But for the lapse of the vendee in not impleading the subsequent purchaser within time and the vendor for seeking cancellation of sale deed in favour of the subsequent purchaser, she would have been well within her rights to ignore the transactions between the vendor and the subsequent purchaser in respect of 100 sq.yards.
Point No. 2:
18. The vendee paying Rs. 45,000/- under Exs.A.2 and A.3 out of Rs. 75,000/- towards sale consideration under Ex.A.1 agreement of sale, is admitted and Ex.A.4 xerox copy of the draft for the balance of Rs. 30,000/- dated 4-5-1984 read with the notices issued by her shows that the vendee was continuously informing her readiness to perform her part of the contract by notices commencing from Ex.A.5 dated 29-5-1984. It was the vendor and her husband that brought in the alleged transaction in favour of the subsequent purchaser as blocking the due performance of the contract, for which there was no justification in the light of such transaction being found to be not true and genuine. The vendee and her husband reiterated their claims in their evidence. Though they admitted not knowing about the transactions of the vendor with subsequent purchaser, they were positive that they were never informed about the same and that they never promised to settle the matter with the subsequent purchaser. P.W.2, attestor of Exs.A.1 and A.2, corroborated their evidence and stated that he offered the balance of sale consideration to the vendor when the vendee brought the money to him. P.W.3, who attested Exs.A.1 and A.2, also supported the vendee's version in detail. P.W.4 claiming to be residing in a room in the suit plot since April, 1984, spoke about the vendee's possession and interference with it by the vendor's husband and others. The vendor's husband as D.W.1 claimed cancellation of the agreement due to non-payment of sale price, but admitted that the balance sale consideration had to be paid within 45 days from the date of Ex.A.1. His claim that possession was not given to the vendee as recited in Ex.A.1 and that no money was offered within time by the vendee, is improbablised by Exs.A.1 and A.4. His claim that P.Ws.2 and 3 were not present when Ex.A.1 was executed, was contrary to Ex.A.1 and his further claim that he agreed to sell at Rs. 375/- per square yard is also contrary to Ex.A.1. He attested Ex.A.2 receipt for Rs. 40,000/- and admitted that the subsequent purchaser is his distant relative. The subsequent purchaser as D.W.2 did not throw any light on this aspect. The other witnesses to Exs.A.1 to A.3 were not examined. In the light of the conduct of the vendor, her husband and the subsequent purchaser and withholding of the vendor from the witness box, the positive evidence adduced by the vendee needs to be preferred. If Ex.A.1 was not subject to any clearance of any earlier agreement and when the vendee offered the balance of sale consideration within time and was consistently expressing her readiness and willingness to perform her part of the contract through notices and otherwise, the vendee is entitled to the relief of specific performance. However, in respect of 100 square yards covered by the sale deed in favour of the subsequent purchaser, such relief of specific performance becomes unavailable due to not making the subsequent purchaser a party to the suit in O.S. No. 20 of 1993 within the period of limitation. Consequently, the balance of sale consideration was rightly directed to be deposited at Rs. 5,000/- only by the trial Court at the rate of Rs. 250/- per square yard.
Point No. 3:
19. In O.S. No. 92 of 1993 filed by the vendee for declaring the document in favour of the subsequent purchaser as null and void, the vendor was not impleaded as a party and the vendor's husband and the subsequent purchaser were alone made parties, which was sought to be explained away as due to the transaction being the result of collusion between those two only. In O.S. No. 20 of 1993, the subsequent purchaser was made a party only on 5-4-1989 as per orders in I.A. No. 44 of 1989 filed on 25-1-1989. The finding of the trial Court that the vendee filed a caveat and appeared through her Counsel on 15-6-1985 in I.A. No. 401 of 1985 in O.S. No. 91 of 1993 filed by the subsequent purchaser against the vendee is borne out by record and even if no constructive notice by virtue of Section 3 of the Transfer of Property Act can be attributed to the vendee since the registered sale deed dated 25-5-1984 in favour of the subsequent purchaser, the vendee cannot deny or dispute her knowledge about the transactions claimed by the subsequent purchaser and the registered sale deed in his favour at least since her appearance in LA. No. 401 of 1985. I.A. No. 44 of 1989 to implead the subsequent purchaser in O.S. No. 20 of 1993 was patently not within three years either from the registered sale deed dated 25-5-1984 in favour of the subsequent purchaser or from 15-6-1985 when the vendee appeared in I.A. No. 401 of 1985 through her Counsel. The vendee neither sought for any leave of the Court to treat the subsequent purchaser as a party to the suit O.S. No. 20 of 1993 since the date of institution of the suit nor was any such leave expressly or impliedly granted by the Court. Therefore, by virtue of Section 21 of the Limitation Act, 1963, the subsequent purchaser can be deemed to be a party to the suit only from the date when he was impleaded or when the application for impleadment was filed, but not from any earlier date. If so, the suit for specific performance against the subsequent purchaser, whether any relief was sought for against him or not, was undoubtedly barred by limitation.
20. The only issue that remains is whether the suit for cancellation of sale deed in favour of the subsequent purchaser without impleading the vendor is sustainable in law and whether that suit enures to the benefit of the vendee even in respect of the suit for specific performance.
21. In Md. Noorul Hoda v. Bibi Raifimnisa and Ors. (1996) 7 SCC 767, it was held that Article 59 of the Limitation Act, 1963 would apply to set aside or cancel an instrument, a contract or a decree on the ground of fraud and the starting point of limitation is the date of knowledge of the alleged fraud. It was further observed that when the plaintiff seeks to establish his title to the property which cannot be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded. It was also stated that the word 'person' in Section 31 of the Specific Relief Act is wide enough to encompass the person seeking derivative title from his seller and therefore, if he seeks avoidance of the instrument, decree or contract and seeks a declaration to have the decree set aside or cancelled he is necessarily bound to lay the suit within three years from the date when the facts entitling the plaintiff to have the decree set aside, first became known to him. Thus, it is clear that the limitation starts to run from the date of knowledge of the facts entitling the vendee to have the sale deed set aside, which was much beyond three years prescribed by Article 59 of the Limitation Act, 1963. 'Person' in Section 31 of the Specific Relief Act encompassing the person seeking derivative title from his seller may encompass the subsequent purchaser, but the same is not suffice to construe that to seek avoidance of an instrument, the presence of the person seeking derivative title from his seller makes the presence of the seller superfluous and unnecessary.
22. In Bagal Tanti v. Ram Ranjan Laha , the suit was for declaration of title in respect of the tenanted land to which the landlords were not made parties. Repelling the contention that the suit is not maintainable in law in the absence of landlords, it was observed that the plaintiffs have no grievance against the landlords, who had not interfered with their possession in any way and their grievance was against the person who claimed to have taken the land under bhag system from such landlords or owners of the land. It was held that as the defendants were directly interfering with the plaintiffs' possession and disputing their title, the owners of the land are not necessary parties when the declaration desired only was against the defendants and also confirmation of possession or recovery of possession. This case is clearly distinguishable on facts as unlike the landlords in that case, who did not interfere with the possession of the plaintiffs therein in any way, the vendor herein specifically disputed the right of the vendee to have specific performance without clearing the earlier agreement of sale in favour of the subsequent purchaser. The vendor's pleas denying the right of the vendee for specific performance in entirety and supporting the subsequent purchaser by confirming the agreements of sale and sale deed in his favour, were made known to the vendee even by notices exchanged prior to the suit for specific performance, apart from the specific defence taken in the suit for specific performance much later to which the suit for declaring the sale deed in favour of the subsequent purchaser null and void was filed. The vendee cannot claim to be having no grievance against the vendor under such circumstances and her right to have specific performance for the entire 300 square yards against the vendor is subject to the validity or otherwise of the sale deed executed by the vendor in favour of the subsequent purchaser.
23. In Vyankatesh v. Kusum , the plea was that the State Government was a necessary party to the suit to set aside the auction sale held by the Revenue Authorities. It was held that the plaintiffs sought no relief against the Government and were not bound to seek any relief against the Government and if the auction sale of the suit land was ultra vires, illegal, unauthorized and void and hence, without jurisdiction, it is not necessary for anybody who objects to that order to apply to set aside the order which is a mere nullity. As such an order does not give any right, the plaintiffs were entitled to a complete and effective relief by obtaining possession of the land from the defendant. The principle was that where the plaintiffs can obtain complete and effective reliefs from the Court in respect of the subject-matter in dispute against a party, it is not necessary to join any other party, whether it is Government or others. This case also is distinguishable on facts as the agreements of sale and the sale deed in favour of the subsequent purchaser by the vendor are not ab-initio void per se but are only voidable by the vendee on proof of the required circumstances. Unlike an auction sale which was found to be a nullity in that case, the sale in favour of the subsequent purchaser binds the parties, unless it is invalidated through process of law. It cannot be ignored without being set aside and to set it aside the executant and the beneficiary of the document have to be heard before any adverse order is passed to satisfy the fundamental principle of Audi Alteram Partem.
24. In General Manager, South Central Railway, Secunderabad v. A.V.R. Siddhanti , the decisions of the Railway Board impugned in the writ petition contain administrative rules of general application, regulating absorption in permanent departments, fixation of seniority, pay etc., of the employees of the erstwhile Grain-Shop Departments. The validity of those policy decisions was impeached in the writ petition as being violative of Articles 14 and 16 of the Constitution of India. Hence, it was held that the proceedings were analogous to those in which the constitutionality of a statutory rule regulating seniority of Government Servant is assailed and in such proceedings the necessary parties to be impleaded are those against whom the relief is sought, and in whose absence no effective decision can be rendered by the Court. It was held that as the relief was claimed only against the Railway which has been impleaded through its representative and as no list or order fixing seniority of the petitioners vis-a-vis particular individuals, pursuant to the impugned decisions, is being challenged, non-joinder of the employees who were likely to be affected as a result of the re-adjustment of the petitioners' seniority in accordance with the principles laid down in the Board's decision of October 16, 1952, could not be fatal to the writ petition, as they were, at the most, proper parties and not necessary parties. It was, thus, clear that the challenge to the policy decisions of the Railway Board was analogous to assailing the constitutionality of a statutory rule, though incidentally a decision thereon may affect some individuals. The decision itself referred to an earlier decision of the Apex Court in Padam Singh Jhina's case CA No. 405 of 1967, dated 14-8-1967 (SC), in which the validity or vires of the Rules was not in question, but all the persons, whose placement in the seniority list was controverted, were not impleaded. As the persons likely to be affected were not impleaded and hence, had no opportunity of replying to the case set up by the petitioner and as it was not possible for the Court to adjudicate the matter in the absence of persons directly affected, the decision went against him. The present case is similar to Jhina's case (supra), where specific transaction by the vendor in favour of subsequent purchaser was sought to be impeached, but the vendor was not impleaded denying her an opportunity of replying to the case set up by the vendee and consequently, it was not possible for the Court to adjudicate the matter in the absence of the vendor who will be directly affected by any decision. The present dispute is not about any general policy but a specific sale of land, to adjudicate which the presence of the parties to the transaction is a necessary corollary.
25. The learned Counsel for the vendee also relied on Vidhyadhar v. Mankikrao , to contend that non-examination of the vendor should lead to an adverse inference. The Apex Court held in that decision that where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct. It was also incidentally held that a person in his capacity as a defendant can raise any legitimate plea available to him under law to defeat the suit of the plaintiff and the whole question would depend upon the pleadings of the parties, the nature of the suit, the nature of the deed, the evidence led by the parties in the suit and other attending circumstances. While, thus, it is clear that all legitimate pleas to defeat the suit of the vendee are available even to subsequent purchaser, it is to be noted that non-examination of the vendor already was taken adverse notice by the trial Court and her examination or non-examination is not a factor relevant to consider the maintainability of the suits in question.
26. In Gomi Bai and Ors. v. Uma Rastogi and Anr. , it was pointed out that it is now well settled that the plaintiff has to implead the subsequent purchaser as defendant to the suit and has to plead that subsequent purchaser is not bona fide purchaser for value, that such subsequent purchaser had notice of the contract of sale of immovable property in favour of plaintiff and also seek a decree directing the original vendors as well as subsequent purchaser to execute sale deed in favour of the plaintiff. It was further held that to that extent, initial burden is on the plaintiff to come and depose that the subsequent purchaser is not entitled for the benefit under Section 19(b) of the Specific Relief Act. It is then the onus shifts to the subsequent purchaser and to prove the negative. It was also noted that the plaintiff seeking specific performance did not make any allegation against the subsequent purchaser in the plaint after impleading the subsequent purchaser through an interlocutory application and that even in the prayer portion of the plaint, no direction was sought to the subsequent purchaser to execute sale deed in favour of the vendee along with the vendors. Consequently, it was held that the vendee did not plead as required under law to deny equities in favour of the subsequent purchaser. It was pointed out that as held by various Courts, in a case of this nature, the plaintiff has to necessarily take two important steps-(i) an averment has to be made in the plaint that the subsequent purchaser arrayed as defendant has notice of prior agreement and is not a bona fide purchaser for value; (ii) the plaintiff has to pray the trial Court to enforce specific performance of contract of sale by directing his/her vendors as well as subsequent purchaser to execute sale deed. In the present case, though the subsequent purchaser was impleaded as a party to the suit for specific performance much after the expiry of the period of limitation, no specific averments were incorporated and no prayer of any sort was made against him by way of any consequential amendment in the plaint. No direction was sought to have sale deed from the subsequent purchaser also along with the vendor. While it is, thus, clear that the subsequent purchaser is a necessary party to the suit for specific performance, O.S. No. 20 of 1993 should be considered to be deficient in pleading appropriately to deny any equities in favour of the subsequent purchaser.
27. In Vimala Ammal v. C. Suseela , it was held that the subsequent purchaser was a necessary party in the suit for specific performance and the decree should direct both the owner and the subsequent purchaser to execute conveyance in favour of the agreement holder. Earlier precedents were referred to wherein, it was held that the title resided in the subsequent purchaser and he had also to necessarily join in the conveyance and so, where the subsequent purchaser is a necessary party, unless he is impleaded and a decree is sought as indicated earlier, the title remained with the subsequent purchaser.
28. Similarly, in Ram Sworup Singh v. Mahabir , it was held that in view of Section 27 of the Specific Relief Act, a prior purchaser ought to implead a subsequent purchaser as a party to the suit for specific performance, because he is a necessary party inasmuch as by a decree in favour of the prior purchaser the subsequent purchaser's right in the property is affected since if the sale deed executed by the seller in favour of the prior purchaser is registered, it being of a prior date to the sale in favour of the subsequent purchaser, his title to the land will be immediately affected by it.
29. Reference can also be made to the leading decision on this aspect in Durga Prasad v. Deep Chand . The Supreme Court noted that:
The practice of the Courts in India has not been uniform and three distinct lines of thought emerge. (We are of course confining our attention to a 'purchaser's' suit for specific performance). According to one point of view, the proper form of decree is to declare the subsequent purchase void as against the plaintiff and direct conveyance by the vendor alone. A second considers that both vendor and vendee should join, while a third would limit execution of the conveyance to the subsequent purchaser alone.
First, we reach the position that the title to the property has validly passed from the vendor and resides in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier "contractor". As the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him. We do not know of any case in which a reconveyance to the vendor was ordered but Sulaiman C.J., adopted the other course in-Kali Charan v. Janak Deo AIR 1932 All. 694 (B). He directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the contract of sale of which the plaintiff sought specific performance. But though this sounds logical the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, we do not think that is a desirable solution.
We are not enamoured of the next alternative either, namely conveyance by the subsequent purchaser alone to the plaintiff. It is true that would have the effect of vesting the title to the property in the plaintiff but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendor's agreement with the plaintiff to which he would never have agreed had he been a free agent; and if the original contract is varied by altering or omitting such terms the Court will be remaking the contract, a thing it has no power to do; and in any case it will no longer be specifically enforcing the original contract but another and different one.
In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in - 'Kafdaddin v. Samiraddin' AIR 1931 Cal. 67 (C) and appears to be the English practice. See Fry on Specific Performance, 6th Edn. Page 90, Paragraph 207; also - Potter v. Sanders (1846) 67 ER 1057 (D). We direct accordingly.
30. Hence, it is clear from the above that the title to the property validly passed from the vendor to the subsequent transferee, the sale in whose favour is not void but only voidable at the option of the earlier contractor. Unless the subsequent transferee is made a party to the suit for specific performance and he is also directed to join in the conveyance to pass on the title which resides in him to the vendee, title cannot pass to the vendee. The Apex Court in Durga Prasad 's case (supra), also noted that there may be equities between the vendor and the subsequent transferee and unless they fight the question out as between themselves and it is decided as an issue in the case, the normal rule should be to require that the money be paid to the vendor and not to the subsequent purchaser. This is indicative of the necessity to have the presence of both the vendor and the subsequent transferee for determination of the rights and equities between them in respect of either specific performance or cancellation of the subsequent sale.
31. In Jagan Nath v. Jagdish Rai , the Supreme Court pointed out that the initial burden to show that the subsequent purchaser of suit property covered by earlier suit agreement was a bona fide purchaser for value without notice of suit agreement squarely rests on the shoulders of such subsequent transferee and however, once evidence is led by both the sides, the question of initial onus of proof pales into significance and the Court will have to decide the question in controversy in the light of the evidence on record. Therefore, the appreciation of the questions in controversy by the Court should be obviously in the presence of and after an opportunity to the subsequent purchaser.
32. In Kasturi v. Iyyamperumal , the Supreme Court held that the second part of Order I Rule 10 sub-rule (2) of the Code of Civil Procedure would clearly show that the necessary parties in a suit for specific performance of a contract for sale are the parties to the contract or if they are dead, their legal representatives as also a person who had purchased the contracted property from the vendor. The Apex Court made it clear that in equity as well as in law, the contract constitutes rights and also regulates the liabilities of the parties and the purchaser is a necessary party as he would be affected if he had purchased with or without notice of the contract. The Apex Court reiterated the two tests to be satisfied for determining the question who is a necessary party-(1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (2) no effective decree can be passed in the absence of such party. The Supreme Court also pointed out that necessary parties are those persons in whose absence no decree can be passed by the Court or that there must be a right to some relief against some party in respect of the controversy involved in the proceedings. It further held that all the questions involved in the suit referred to in sub-rule (2) Order I Rule 10 of the Code of Civil Procedure make it abundantly clear that the Legislature clearly meant that the controversies raised as between the parties to the litigation must be gone into only, that is to say, controversies with regard to the right which is set up and the relief claimed on one side and denied on the other. It was held that any intervener must be directly and legally interested in the answers to the controversies involved in the suit. This decision by the Apex Court puts beyond doubt the necessity of the subsequent purchaser being made a party to the suit for specific performance. It also further indicates that a person directly and legally interested in the answers to the controversies involved in the suit regarding the rights set up and the relief claimed, will undoubtedly be a proper party and may also be a necessary party. If the vendor is not made a party to the suit to declare the sale deed executed by the vendor in favour of the subsequent purchaser as null and void, the vendor's rights and interests would be affected without notice to and without an opportunity of hearing for the vendor. Any grant of such declaration of nullity of sale deed is likely to make the vendor answerable for any claim by the subsequent purchaser for equities or the rights regarding the consideration paid by him or the damages or loss sustained by him or the compensation or reimbursement to which he may be entitled to. Though all rights of ownership in the property are conveyed and passed from the vendor to the subsequent purchaser under a registered conveyance, the absence of subsisting interest for the vendor in the property is only so long as that sale deed stands. If the sale deed were to be rendered legally ineffective in a judicial proceeding, the vendor will not only subject himself to any consequential claims from the subsequent purchaser due to the sale in his favour being nullified but also to the claims of the vendee to subject the vendor to specifically perform his contractual obligations in respect of the same property. In fact, it was held in Azhar Hasan and Ors. v. District Judge, Saharanpur and Ors. , that return of plaint by a civil Court was right, as the sale deed which has been questioned on the basis of fraud, was not executed by the plaintiffs but by others, and they were not parties thereto so as to allege the incidence of fraud. The decision clearly lays down the principle that when a sale deed is sought to be avoided on the basis of fraud, the executants of the sale deed must be made parties to the legal proceeding to avoid such sale. The principle has to as well extend to any suit or legal proceeding seeking to avoid the sale deed on any analogous ground. Cancellation of an instrument without impleading the executant thereof and without notice to and hearing him, is clearly opposed to the basic rules of natural justice and the fundamental principles of judicial procedure. The same principles and logic by which the subsequent purchaser is considered necessary in the suit for specific performance, would equally apply to the necessity of the executant of a sale deed being a party to any suit for cancellation or setting aside of such document or for declaration that it is null and void.
33. Though no direct judicial pronouncement is placed before this Court about the vendor being a necessary party to the suit for cancellation of a sale deed or for declaration that the sale deed is void, the same is inherent and evident from the various precedents referred to above.
34. O.S. No. 92 of 1993 was, in fact, filed for a declaration that the sale deed is null and void and under Section 34 of the Specific Relief Act, any person entitled to any right as to any property, may institute a suit against any person denying or interested to deny his title to such right and undoubtedly the vendor is denying the right of the vendee. Section 35 of the Specific Relief Act makes it clear that such a declaration is only binding on the parties to the suit and the persons claiming through them respectively, and when such a judgment is not in rent but in personam, any such declaration about the sale deed being a nullity without the presence of the executant of the sale deed appears to offend Sections 34 and 35 of the Specific Relief Act. The subsequent purchaser as a person claiming through the vendor cannot represent the vendor's interest in such a suit, as it is not a case of the vendor claiming through the subsequent purchaser. Even for adjudging the written instrument to be void or voidable against the vendee under Section 31 of the Specific Relief Act, the parties to the written instrument are naturally necessary parties. When the relief under Section 31 or Section 34 of the Specific Relief Act is well settled to be in judicial discretion of the Court, exercise of such judicial discretion without notice to and without hearing one of the parties to the document in question, will be illogical, irrational and unjust.
35. The trial Court rightly relied on P. Govind Reddy v. G Obulamma 1971 (2) ALT 97 (FB), wherein it was held that when necessary parties were not added within the period of limitation, the suit is not maintainable. On the admitted facts, therefore, not impleading the subsequent purchaser as a party to the suit for specific performance within the period of limitation makes the suit incompetent to the extent of the property covered by the registered sale deed in favour of the subsequent purchaser. As the properties the vendor sold to the subsequent purchaser and agreed to sell to the vendee are distinct and separable, negativing the suit to the extent it is not maintainable and allowing the relief to the extent the vendee's entitlement is proved, is but just.
36. The contention that the suit for declaring the sale deed in favour of the subsequent purchaser as void being within limitation and the grant of any such declaration will obviate the necessity of making the subsequent purchaser a party to the suit for specific performance, cannot be sustained firstly as even the suit for declaring the sale deed as void was imperfectly constituted in the absence of the executant of the document and secondly, no provision or principle has been brought to notice whereunder the presence of a party in one suit will constructively make him a party to the other suit. To construe the vendor to be a party to the suit for declaring the sale deed as void as the vendor is a party to the suit for specific performance and the subsequent purchaser as a party to the suit for specific performance as he is a party to the suit for declaring the sale deed as void, both the suits being respectively within the periods of limitation, appears to be seeking adoption of a procedure or interpretation not shown to have legal or judicial acceptance. The findings of fact in favour of the vendee as against the vendor and the subsequent purchaser, of course, became redundant and purposeless, but the vendee has to thank herself for not pursuing her legal remedies in accordance with law. Technical and procedural constraints may not ordinarily defeat valuable rights of a party but equally, if not more, valuable rights accrued to the subsequent purchaser by his not being impleaded in the suit for specific performance within the period of limitation and the vendor by her not being made a party to the suit for declaring the sale deed in favour of the subsequent purchaser as void, cannot also be lightly interfered with. Any inherent power of the Civil Court also cannot be invoked in the face of specific provisions and principles of law and the vendee, therefore, has to be deprived of the property sold by the vendor to the subsequent purchaser.
Point No. 4:
37. The trial Court, as already stated, has calculated the balance of consideration due at Rs. 250/- per square yard for 200 square yards in proportion to an agreed price of Rs. 75,000/- for 300 square yards in the absence of any proof for the claim that the agreed rate was Rs. 375/- per square yard for 200 square yards. The direction to the vendor to execute the sale deed for 200 square yards on such deposit of Rs. 5,000/- excluding the land sold to subsequent purchaser by the vendor from the suit land and further directing dismissal of the suit for default in the absence of such deposit in O.S. No. 20 of 1993, has to be confirmed including the dismissal of the suit against the vendor's husband and the subsequent purchaser. The dismissal of the suit in O.S. No. 92 of 1993 for declaring the sale deed to be void also has to be confirmed and in consequence, the title that passed to the subsequent purchaser from the vendor in respect of 100 square yards stood undisturbed. The decree of O.S. No. 91 of 1993 declaring the subsequent purchaser's title to 100 square yards and directing consequential delivery of possession to him also has to be confirmed. The trial Court exercised its judicial discretion in not awarding costs to either party in any of the three suits. The vendor, vendor's husband and the subsequent purchaser were not able to show any justification to differ with the findings of fact arrived at by the trial Court. The appeals have to, therefore, fail.
38. In the result, A.S. Nos. 892 of 1994, 893 of 1994, 894 of 1994 and 1785 of are dismissed without costs.