RSA No.2453 of 2000 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.2453 of 2000 (O&M) Date of decision: 17.05.2010 Som Nath and others ....Appellants Versus Mohd. Illias and another ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. O.P. Goyal, Sr. Advocate, with Ms. Kanwaljit Kaur, Advocate, for the appellants. Mr. C.B. Goel, Advocate, with Mr. Sanjiv Gupta, Advocate, for the respondents. VINOD K. SHARMA, J.(ORAL) Defendants by way of this regular second appeal have challenged the judgment and decree dated 28.4.2000, passed by the learned lower appellate Court, vide which the suit for possession by way of specific performance of agreement to sell dated 3.9.1988, was decreed. The plaintiff filed a suit for specific performance by pleading, that defendants No.1 and 2 for themselves and defendant No.1 as general power of attorney of defendants No.3 to 10, had agreed to sell the suit land for a consideration of Rs.1,40,000/- (Rupees one lac and forty thousand only). The agreement to sell, was reduced into writing on 3.9.1988 through Gordhan Dass, petition writer, and entry in this regard was also made in the register of the deed writer. The agreement was thumb marked by the plaintiff, whereas it was signed by defendants No.1 RSA No.2453 of 2000 (O&M) -2- and 2. The sale deed was to be executed and registered upto 31.3.1989. The case of the plaintiff further was, that a sum of Rs.50,000/- (Rupees fifty thousand only) was agreed to be paid at the time of registration of agreement before the Sub Registrar and remaining sale consideration was to be paid at the time of registration of sale deed before the Sub Registrar. The plaintiff also pleaded that a sum of Rs.5,000/- (Rupees five thousand only) was paid by the plaintiff to defendant No.1, as token money in presence of Ram Chander Kalra at Gurgaon. The agreement was also signed by Dilbagh Rai Lakhani as attesting witness. The signatures of Ram Chander, could not be affixed as he left the place due to some urgent work. The original agreement was handed over to defendant No.1, as he was to get it registered on 5.9.1988. On the date fixed, the defendant did not come present for registration of the agreement, whereas plaintiff went to the office of the Sub Registrar and waited there till evening. The plaintiff thereafter filed a suit for permanent injunction, restraining the defendants from selling the suit land to anybody else except the plaintiff. In the suit, injunction was granted. The said suit was subsequently withdrawn after filing of the suit for specific performance. The plaintiff also pleaded, that he was always and was still willing to get the sale deed registered, on payment of sale consideration of Rs.1,40,000/- (Rupees one lac and forty thousand only). The suit was contested by the defendants, by raising preliminary objections, that the suit was not maintainable. The suit was said to be barred under Order 2 Rule 2 of the Code of Civil Procedure, as the plaintiff had, on earlier occasion, filed a suit for injunction, which RSA No.2453 of 2000 (O&M) -3- was withdrawn, without liberty to file a suit for specific performance. The locus standi of the plaintiff to file the suit was also challenged. It was also pleaded, that the conduct of the plaintiff dis-entitled him from filing the suit. It was also pleaded that plaintiff was not entitled to any relief muchless discretionary relief. On merits, it was pleaded, that the suit land was owned by Bawa Raghbir Dass, who was murdered by the plaintiff in the month of May, 1971, and case under Sections 302/32/419/471 IPC, was registered against the plaintiff and his co-accused. The plaintiff had also forged a sale deed relating to the suit land on 7.5.1971. The plaintiff and his co- accused were convicted by the learned trial Court, but in appeal they were acquitted by giving benefit of doubt. A suit for declaration and possession was filed by one Khem Chand against the plaintiff. The suit was ultimately decreed against the plaintiff on 16.5.1971. On merits, it was also pleaded by the defendant/appellants, that the plaintiff had approached the defendants in August, 1980 to purchase the suit land on payment of Rs.1,50,000/- (Rupees one lac and fifty thousand only). It was on account of this, that defendant No.1 got power of attorney from other defendants. Defendants No.1 and 2 came present at the request of the plaintiff at Gurgaon, for executing the agreement to sell, but the plaintiff backed out from his promise of paying Rs.1,50,000/- (Rupees one lac and fifty thousand only). He ultimately agreed, that the suit land be sold at Rs.1,40,000/- (Rupees one lac and forty thousand only). The terms of the agreement were got written on 3.9.1988, and plaintiff was to pay earnest money of Rs.50,000/- (Rupees RSA No.2453 of 2000 (O&M) -4- fifty thousand only). However, after the agreement was written, plaintiff showed his inability to pay the earnest money for want of funds. It was also pleaded that plaintiff declared that his aim was to grab the land, and he was not to pay any amount to the defendant/appellants. In the agreement to sell, the factum of non-payment of earnest money was duly recorded, but it was mentioned that the earnest money would be paid at the time of registration of the sale deed. It was the stand of defendant/appellants, that there was no agreement in eye of law, as it was without consideration, therefore, not binding. It was also pleaded that factum of non-payment of earnest money, and that the earnest money was to be paid at the time of registration of sale deed, was duly incorporated in the agreement to sell. The agreement was said to be without consideration, vague, indefinite, incomplete and void ab initio. It was also the case set up, that the plaintiff was planning to kill the defendants with an intention to grab the suit land. The suit was said to be false and frivolous, for the reasons stated above. In the replication, the averments made in the plaint were reiterated and those made in the written statement were denied. The learned trial Court, on the pleadings of the parties, framed the following issues: - “1. Whether the defendants agreed to sell the suit land in favour of the plaintiff on 3.9.88? OPP 2. Whether the plaintiff was ready and willing and is still ready to perform his part of contract? OPP 3. Whether the plaintiff has paid Rs.5000/- as alleged? OPP RSA No.2453 of 2000 (O&M) -5- 4. Whether the suit of the plaintiff is not maintainable in the present form? OPD 5. Whether the suit is barred by Order 2 Rule 2 CPC? OPD 6. Whether the plaintiff is estopped to file the present suit by his own act and conduct? OPD 7. Whether the plaintiff has no locus standi or cause of action to file the present suit? OPD 8. Whether the agreement dt. 3.9.88 is without any consideration, vague, incomplete and void abinitio? OPD 9. Relief.” The learned trial Court decided issues No.1, 3 and 8 together being interlinked. In order to prove his case, the plaintiff placed reliance on Ex.P3 i.e agreement, which was admittedly executed between the parties. The agreement was said to be scribed by Gordhan Dass, deed writer, which was also entered in his register at serial number 348 on 3.9.1988. The agreement was said to have been read over to the parties and thereafter signed. The agreement was witnessed by the attesting witness, namely DR Lakhani and Abdul Karim. It was the case of the plaintiff, that at the time of execution of the agreement, an amount of Rs.5,000/- (Rupees five thousand only) was paid by the plaintiff to the defendant as token money (this plea was raised to show the consideration for entering into agreement to sell). However, no receipt was obtained from the defendants qua receipt of this amount. Contention was also raised, that even oral agreement is valid and reliance in support thereof was placed on the judgment of the Hon'ble Supreme Court in Brij Mohan and others Vs. Smt. Sugra Begum and others, 1990 (2) All India Land RSA No.2453 of 2000 (O&M) -6- Laws Reporter 263. The learned trial Court considered evidence led and the judgment and held, that the Hon'ble Supreme Court laid down that oral agreement is valid, but heavy burden lies on the parties pressing for specific performance to prove the agreement. The stand of the defendant/appellants on the other hand was, that Ex.P3 was no agreement in the eye of law, as no consideration amount was paid, though it was mentioned that earnest money of Rs.50,000/- (Rupees fifty thousand only) was to be paid. It was also contended, that a sum of Rs.5,000/- (Rupees five thousand only) was not paid, as alleged by the plaintiff, as the evidence led in support of this was not only discrepant but also not admissible in evidence, in view of the law laid down by the Hon'ble Supreme Court in Suvenska Handelsbanken Vs. M/s Indian Charge Chrome and others, SLJ 364. In the judgment referred to above, it was held that the Courts are debarred from taking oral evidence to vary or alter the written contract. This is otherwise settled law in view of Section 91 and 92 of the Evidence Act, which debars the taking of oral evidence qua the written document. The learned trial Court also placed reliance on the judgment of this Court in Sheo Diyal and another Vs. Om Parkash alias Dhaulia and others, 1992 PLJ 249, wherein it has been laid down that agreement without consideration is void. As no consideration amount was paid at the time of execution of the agreement to sell, the agreement was not admissible in eye of law. In view of the findings referred to above, issue No.8 was RSA No.2453 of 2000 (O&M) -7- decided in favour of defendant No.8, holding that agreement dated 3.9.1988 was without consideration, incomplete, thus, void ab initio. Issue No.1 was held to be redundant, whereas issue No.3 on appreciation of evidence was decided against the plaintiff, holding that amount of Rs.5,000/- (Rupees five thousand only) was not paid as token money. On issue No.2, in view of the evidence, that the plaintiff had appeared before the Sub Registrar on 5.9.1988, which was proved by the plaintiff by Ex.P1, Ex.PW10/A and Ex. P2, the learned trial Court held that the plaintiff has shown his willingness to perform his part of the contract, as defendant/appellants had failed to appear, but the learned trial Court held that this was immaterial, as the agreement being void ab initio, the question of readiness and willingness was immaterial. On issue No.4, the learned trial Court returned the finding, that the suit filed by the plaintiff was not maintainable, as agreement Ex.P3 was void. However, on issue No.5, it was held, that the suit was not barred under Order 2 Rule 2 of the Code of Civil Procedure, as the suit for injunction was filed prior to the date fixed for execution of the sale deed. In view of the finding recorded by the learned trial Court holding, that the plaintiff had failed to prove the payment of Rs.50,000/- (Rupees fifty thousand only) as earnest money or Rs.5,000/- (Rupees five thousand only) as token money, he was estopped by his conduct to file the suit. Issue No.6 was decided against the plaintiff. RSA No.2453 of 2000 (O&M) -8- On issue No.7, the learned trial Court held, that as the plaintiff failed to pay the earnest money of Rs.50,000/- (Rupees fifty thousand only), as recorded in the agreement, and further that no token money was paid by him, this was held to be clear from the fact, that even in the plaint the plaintiff had sought execution of the sale deed on payment of Rs.1,40,000/- (Rupees one lac and forty thousand only) meaning thereby that there was an admission that Rs.5,000/- (Rupees five thousand only) was not paid. This issue was also decided against the plaintiff holding, that he had no locus standi to file the present suit. The suit was accordingly dismissed. The plaintiff preferred an appeal. The learned lower appellate Court, held that the main point for consideration in the appeal was the validity of agreement Ex.P3. The learned lower appellate Court held, that execution of Ex.P3 was not disputed by the parties. The learned lower appellate Court, therefore, held, that the plea raised by the defendants, that the agreement was result of fraud and mis-representation, was not supported by any evidence. The question to be decided is whether it could be enforced or not. The learned lower appellate Court, held, that from the agreement itself it was clear that no earnest money was paid at the time of execution of the agreement, as the earnest money was to be paid at the time of registration of the sale deed, but the agreement was not registered nor the plaintiff paid the earnest money. The learned lower appellate Court thereafter went on to hold, that an agreement can be presumed to be void if it is altogether without consideration i.e. that there is even no promise to pay any money. The RSA No.2453 of 2000 (O&M) -9- plaintiff, vide Ex.P3 had agreed to purchase the land for a sum of Rs.1,40,000/- (Rupees one lac and forty thousand only). The total money could be paid at the time of the execution and registration of the sale deed. The learned lower appellate Court interpreted the agreement by recording, that the mode of payment was bifurcated, by agreeing that some of the amount was to be paid at the time of registration of the agreement, even though registration was not required, but was agreed to between the parties, and rest on registration of sale deed. It was accordingly held, that defendants had agreed to execute the sale deed for consideration which was to be paid at two different stages. The learned lower appellate Court held, that evidence on record showed that both the parties acted on the agreement, as Som Nath defendant/appellant also deposed that he had gone to the office of the Sub Registrar to get the agreement registered, but the plaintiff did not turn up. The learned lower appellate Court held that the plea of defendant/appellants could not be accepted as the defendants could not be allowed to follow the policy of pick and choose. In the written statement the stand taken was that the agreement was not executable, therefore, there was no necessity to go to the office of the Sub Registrar. This was an admission that defendant/appellants had chosen not to appear before the Sub Registrar. The learned appellate Court recorded, that as the agreement to sell, can be oral, thus even if no amount is paid at the time of agreement, it can be enforced in view of the law laid down by the Hon'ble Supreme Court in Brij Mohan and others Vs. Smt. Sugra Begum and others RSA No.2453 of 2000 (O&M) -10- (supra). This judgment was considered by the learned trial Court also. The learned lower appellate Court also placed reliance on the judgment of the Hon'ble Supreme Court in Vidhyadhar Vs. Mankikrao and another, 1999 (2) Civil Court Cases 91, wherein it was held that form of transaction was not final test, as the true test was to see the intention of the parties. The reliance was thereafter placed on the judgment of the Hon'ble Supreme Court in Tarsem Singh Vs. Sukhminder Singh, 1998 (2) PLJ 62, wherein again it was held, that all contracts need not be in writing. The learned lower appellate Court came to the conclusion, that in the present case the total consideration was to be paid at the time of registration of sale deed. The learned lower appellate Court also held, that finding of the learned trial Court, that the plaintiff was always and still willing to perform his part of the contract, deserved to be affirmed. The finding that the suit was not barred under Order 2 Rule 2 of the Code of Civil Procedure, was also affirmed. The learned lower appellate Court did not accept the contention of the defendant/appellants that relief of specific performance being discretionary, could not be granted to the plaintiff, when alternative relief had been asked for. This contention was not accepted, in view of the settled law, that refusal to grant relief of specific performance should be only in exceptional cases i.e. when the plaintiff does not come to the Court with clean hands. The learned lower appellate Court reversed the finding, that on RSA No.2453 of 2000 (O&M) -11- account of failure to prove payment of Rs.50,000/- (Rupees fifty thousand only), the plaintiff was estopped from filing the suit by recording that plaintiff was willing to perform his part of the contract. The finding of learned trial Court was held to be not sustainable. The learned lower appellate Court reversed the findings of the learned trial Court and decreed the suit. Mr. O.P. Goyal, learned senior counsel, appearing on behalf of the appellants contends that this appeal raises the following substantial questions of law: - “1. Whether the agreement Ex.P3 was void, vague and not enforceable for want of consideration, and that the judgment passed by the learned lower appellate Court is outcome of mis-interpretation of agreement Ex.P3? 2. Whether the plaintiff, who does not come to the Court with clean hands, can seek discretionary relief of specific performance? 3. Whether in the facts and circumstances of the case, the discretion exercised by the learned lower appellate Court can be sustained in law?” In support of the substantial questions of law, the learned senior counsel for the appellants contended, that the judgment and decree passed by the learned lower appellate Court, reversing the well- reasoned judgment of the learned trial Court, is outcome of mis- interpretation of agreement Ex.P3. Reference was made to Ex.P3, wherein it was mentioned that the defendant/appellants had agreed to sell the suit land measuring 40 kanals 11 marlas for total sale consideration of Rs.1,40,000/- (Rupees RSA No.2453 of 2000 (O&M) -12- one lac and forty thousand only). It was recorded in the agreement that out of the amount, a sum of Rs.50,000/- (Rupees fifty thousand only) was paid to the vendor and the balance payment was to be paid at the time of execution of the conveyance deed. In the later part of the agreement, it was written that no amount of earnest money had been paid, but would be paid at the time of registration of the agreement to sell. However, no date of registration was mentioned. The contention of the learned senior counsel for the appellants, therefore, was that the learned lower appellate Court mis-interpreted the agreement to mean that the parties had agreed to pay the consideration at the time of execution of the sale deed. The contention of the learned senior counsel was, that on true interpretation of the agreement could be enforceable in law, only on payment of earnest money of Rs.50,000/- (Rupees fifty thousand only), as the consideration amount to execute the agreement to sell was earnest money, and not the sale consideration which was to be paid at the time of conveyance deed. The plaintiff by filing the suit was seeking specific performance of agreement Ex.P3, which was without consideration as the agreed consideration of Rs.50,000/- (Rupees fifty thousand only) was not paid. It was also the contention of the learned senior counsel for the appellants, that the learned lower appellate Court wrongly reversed the finding of the learned trial Court, by mis-interpreting the agreement, by taking into consideration the oral evidence led by the parties, though the learned trial Court had rightly held that an oral evidence to vary the terms of the written contract was not admissible, in view of the RSA No.2453 of 2000 (O&M) -13- provisions of Sections 91 and 92 of the Evidence Act. It was contended, that the agreement being void and vague and without consideration, was not enforceable in law. The learned lower appellate Court mis-interpreted the terms thereof, to order the specific performance of agreement to sell. Mr. C.B. Goel, learned counsel, appearing on behalf of the respondents, however, contended that in view of the provisions of Section 54 of the Transfer of Property Act, the payment of whole of the sale consideration at the time of execution of sale deed, is not sine qua non to complete the sale, as under Section 54, sale is defined as transfer of ownership in exchange for a price paid or promised, or part paid and part promised. The only requirement is, that sale is to be by registered instrument. The contention of the learned counsel for the plaintiff/respondents, therefore, was that the learned appellate Court, was right in holding, that the agreement to sell could be enforced, as the sale consideration to be paid at the time of registration was mentioned, which itself amounted to consideration for agreement to sell. The learned counsel for the respondents placed reliance on the judgment of the Hon'ble Supreme Court in Alka Bose Vs. Parmatma Devi and others, 2009 (1) RCR (Civil) 450, wherein it has been held that the oral contract of sale of property is valid. In the said judgment, the matter for consideration was, whether an agreement to sell, which was not signed by the purchaser would be valid contract. In any case it cannot be disputed that oral agreement is valid, but in the case in hand the agreement was in writing but was found to be without consideration. RSA No.2453 of 2000 (O&M) -14- On consideration, I find force in the contentions raised by the learned senior counsel for the appellants. In this case, the provisions of Section 54 of the Transfer of Property Act are not applicable. The plaintiff was seeking to enforce an agreement to sell, which was proved to be without consideration. The learned lower appellate Court, paid importance to the fact that the plaintiff had appeared before the Sub Registrar for registration of agreement to sell, whereas the defendant/appellants had failed to appear before the Sub Registrar. This finding is on the face of it perverse and outcome of mis-reading of evidence. In the agreement dated 3.9.1988 though it was mentioned that a sum of Rs.50,000/- (Rupees fifty thousand only) would be paid at the time of registration of agreement to sell, but no date of registration was fixed. There was no evidence on record showing, that the plaintiff had issued any notice or had called the defendants to appear before the Sub Registrar for registration of the agreement to sell and to receive the earnest money. Rather, the plea taken was that amount of Rs.5,000/- (Rupees five thousand only) was paid towards consideration amount, which was found to be false. The learned Courts below have recorded a concurrent finding of fact that a sum of Rs.5,000/- (Rupees five thousand only) was not paid, as alleged by the plaintiff. The proposition, that oral agreement is enforceable in law, cannot be disputed, but the burden lies on the plaintiff to prove this beyond doubt. This issue was not involved, as admittedly the agreement was in writing, which was proved to be without consideration. Therefore, the finding by the learned lower appellate Court is held to be outcome of RSA No.2453 of 2000 (O&M) -15- mis-interpretation of sale deed Ex.P3. The agreement being without consideration and vague was not enforceable. The finding of the learned lower appellate Court, therefore, cannot be sustained and is accordingly reversed and that of learned trial Court is affirmed, by answering the first substantial question of law in favour of the defendant/appellants. On the second substantial question of law, the learned senior counsel for the appellants contended, that the plaintiff was not entitled to discretionary relief of specific performance, as he had not