Regular Second Appeal No. 334 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Regular Second Appeal No. 334 of 2009. (O&M) Date of Decision: 21.4.2009 *** Hatti Singh & Anr. .. Appellants VS. Rakesh Kumar & Ors. .. Respondents. CORAM: HON'BLE MR. JUSTICE ARVIND KUMAR, Present:- Mr. Mahavir Sandhu, Advocate for the appellants. Mr. Mahesh Goel, Advocate for the caveators. *** ARVIND KUMAR, J. The instant regular second appeal has been preferred by the defendants-subsequent purchasers against the judgment and decree passed by the first appellate Court below by dint of which the judgment and decree passed by the learned trial court granting alternative relief of recovery of Rs.4 lacs along with interest to the plaintiff-respondent No.1, has been modified to the extent that the plaintiff is held entitled to the relief of specific performance of agreement to sell dated 22.9.1993 and the appellants have been directed to join hands with respondents No.2 and 3 to execute the sale deed in favour of plaintiff-respondent No.1. Having heard learned counsel for the appellants, this Court is of the considered view that there is no merit in the instant appeal. It emerges out that the plaintiff by producing over-whleming evidence on record, proved the due execution of agreement to sell dated 22.9.1993 in respect of H. No. 637-P, Sector 2 Panchkula by respondent No.3 Arvind Kumar being the general attorney of respondent No.2 Dinesh Kumar and received Rs.4 lacs against full and final payment of the same. Admittedly, the sale deed Regular Second Appeal No. 334 of 2009 2 was to be executed on 22.12.1993, but prior thereto respondents No.2 and 3 sold the suit property to the present appellants for an amount of Rs.1.95 lacs vide sale deed dated 8.11.1993. That apart, there is no specific denial as to the execution of agreement to sell dated 22.9.1993 in favour of plaintiff as also the registration of sale deed in favour of the appellants, by respondents No.2 and 3. The plea of the appellants of bonafide purchasers for valuable consideration and without notice of the agreement dated 22.9.1993 though was believed by the learned trial court, which, in turn granted the alternative relief of recovery of amount of Rs.4 lacs along with interest @ 6% per annum to the plaintiff from respondents No.2 and 3 from the filing of suit till the realization of decreetal amount, but not find any favour of the learned First Appellate Court below, which reversed the findings of the learned trial court to that extent. The sole basis for holding the appellants as bonafide purchaser was the letter dated 6.10.1993 vide which the Estate Officer granted permission to transfer the suit property in favour of the present appellants, which was done vide registered sale deed dated 8.11.1993. However, the learned trial court failed to take notice of the fact that the act and conduct of the appellants was such that they admittedly(as admitted by appellant Hatti Singh himself) had not made any enquiry regarding the title of the suit property prior to the registration of the sale deed in their favour. Admittedly, prior to the said sale-deed, no agreement to sell was entered into between the parties and straightway sale-deed was executed in favour of the appellants; the sale deed in favour of the appellants was for less than half of the amount, for which it was agreed to sell to the plaintiff; no transfer fee was deposited while seeking transfer of the suit property in favour of the appellants while it was done while seeking transfer in favour of the plaintiff, which was made prior in time on 30.3.1993. The above-said findings, elaborately discussed while applying the law, are discernible from paras No.12 to 17 of the judgment passed by the learned Appellate Court, which are reproduced below:- “12. DW1 Hatti Singh admitted during his cross examination that he was 13/14 standard pass. Thus obviously he was a literate person. DW1 Hatti Singh admitted that from April, 1993 to November, 1993, he Regular Second Appeal No. 334 of 2009 3 had not inspected the record in the office the HUDA either himself or through any advocate regarding title verification of defendant No.1 regarding any application for permission to sell. DW1 Hatti Singh added that he did not do so because permission was to be obtained by the vendors. DW1 Hatti Singh could not tell as to what for Ex.PW4/2, Ex.PW4/3 and Ex.PW4/4 were meant. Then he hastened to add that probably these doucments related to permission for transfer in his favour. DW1 Hatti Singh could not contradict the fact that these documents were regarding deposit of fees for transfer of house in favour of Rakesh Kumar, plaintiff. It is, thus, found that vendee defendant No.3 Hatti Singh had not taken the trouble of inspecting the HUDA record either himself or through any advocate or any other person to verify title of defendant No.1 or grant of permission to transfer the house in question. It was incumbent upon defendants No.3 and 4 to verify saleability of the disputed property as also competency of owner Dinesh Kumar defendant No.1 to sell the said property. In the case on hand, DW1 Hatti Singh admitted in unequivocal terms that he had not made enquiry either himself or through any advocate from records of the HUDa. In this case, a sum of Rs.100/- was paid on 28.4.1993 by defendant No.2 Arvind Kumar for obtaining permission to transfer the property in favour of Rakesh Kumar, plaintiff. Had defendants No.3 and 4 taken the trouble of inspecting the HUDA records, they would have certainly come to know of the previous agreement to sale in favour of the plaintiff. 13. Where no enquiry is made at the time of sale, subsequent purchaser cannot be said to be bonafide purchaser in good faith for value without notice of the contract. This has been so ruled by the Hon'ble Apex Court in R.K. Mohammed Ubaidullah and others Vs. Regular Second Appeal No. 334 of 2009 4 Hajee C. Abdul Wahab (D) by L.Rs and others AIR 2000 Supreme Court 1658. Other authorities on this point are Arjan Singh and other Vs. Thakar Singh and others, 2006(3) All India Laws Reporter 499(P&H); Joginder singh Vs. Surinder Pal Singh and others 2001)(2) PLR 504(P&H); Jagsir Singh and another Vs. Punjab Kaur and others 1989 Civil Court Cases 347(P&H); Joginder singh Vs. Nidhan singh 1996(3) RCR (Civil) 710(P&H). 14. The plaintiff had agreed to purchase the suit property for Rs.4.00 lacs and had paid the entire amount whereas defendant No.1 sold the suit property to defendants No.3 and 4 for Rs.1.95 lacs which was less than 50% of the price agreed to be paid by the plaintiff. In Rajinder Kumar Vs. Ram Sarup & Anr. 2006(4) Civil Court Cases 215 (P&H), the suit property earlier agreed to be sold for Rs.1,75,000/- but was actually sold for Rs.27,500/- only and reason for selling the suit property for a meager amount was not explained. Similarly in Sri Brahadambal Agency and Partnership Firm Vs. Ramasamy and others AIR 2002 Madras 352, the suit property earlier agreed to be sold for Rs.3,50,000/- was sold to the subsequent purchaser for Rs.61,000/- only. The sales were held by our own Hon'ble High Court and the Hon'ble Madras High Court to be not bonafide. For these reasons, defendants No.3 and 4 cannot be allowed to claim themselves to be bonafide purchasers without notice of the disputed house. 15. there was no agreement between Dinesh Kumar defendant No.1 on one hand and Hatti Singh and Jagtar Singh, defendants No.3 and 4 on the other hand. An agreement of sale was executed between the plaintiff and defendant No.1 through defendant No.2. In Devinder Singh alias Dalvinder Singh and others Vs. Mansha singh and others AIR 2003 Punjab and Haryana 166, no agreement to sell the land was executed and it showed Regular Second Appeal No. 334 of 2009 5 that the suit land was purchase in haste and the purchaser did not have intention to make any verification regarding encumbrance that the subsequent purchaser had notice of the previous agreement to sale. 16. No transfer fee was deposited by defendant no.1 with the HUDA for transfer of house to defendants No.3 and 4. As a matter of fact, fee deposited for transfer of the house to the plaintiff was wrongly shown as fee deposited for transfer of the said house to defendants No.3 and 4. These circumstances clearly show hanky panky between the defendants. This application for trasnfer of house in favour of Hatti Singh and others was made by Dinesh Kumar through Arvind Kumar without payment of any transfer fees. Defendants Hatti Singh and Jagtar Singh claim to have taken this property on rent from Janki Devi but no document has been placed on file by them to show that Janki Devi was landlord and was entitlted to let out this house. Mere production of rent note Ex.DW8/1 did not in any way prove possession of Hatti Singh and his brother or ownership of Janki Devi aforesaid. This rent deed is not a registered document and is not even on a stamp paper. Since the said rent deed was for a period of 11 months only its registration was not compulsory. Ex.DW8/1 is copy of plaint of suit filed on 28.5.1990 by Hatti Singh against Dinesh Kumar, Vinod Kumar and Rakesh Kumar. Now Rakesh Kumar is plaintiff while Dinesh Kumar is defendant No.1 in the present suit. Filing of suit for injunction in May 1990 showed that Hatti Singh was aware of interest of Rakesh Kumar etc. in the suit property. In this plaint, Hatti Singh pleaded that this house was taken on rent on 26.8.1996 and was then purchased on 26.8.1989 by Jagtar Singh from Janki Devi. The stand set up by defendants Hatti Singh etc. is altogether inconsistent with their honesty. Regular Second Appeal No. 334 of 2009 6 17. There existed a registered lease deed in favour of the plaintiff from the owners. Defendants No.3 and 4 claimed lease deed from one Janki Devi but they have not been able to show that the said Janki Devi was owner of the house in question. Since the plaintiff was in possession of the house, defendants No.3 and 4 ought to have made enquiries from him (plaintiff) as to nature of his possession. The Hon'ble Apex court held in dilboo (Dead) by L.Rs and Ors. Vs. Dhanraji (Dead) & Ors. 2001(1) Apex Court Journal 8(SC) that whenever a document is registered, the date of registration becomes the date of deemed knowledge. Defendants No.3 and 4 would be deemed to have knowledge of the lease in favour of the plaintiff. In Ram Niwas (dead) through L.Rs Vs. Smt. Bano & Ors. 2000(2) Apex Court Journal 8 (SC), the Hon'ble Supreme Court held that subsequent purchaser must be deemed to have notice of sale agreement with tenant if he abstained from making enquiry into the real nature of the possession of the tenant and he cannot escape from the consequence of the deemed notice. In R.K. Mohammed Ubaidullah Vs. Hajee Abdul Sahab(D) by Lrs. 2000(3) RCR (Civil) 595, the Hon'ble Supreme Court observed that a person in possession is deemed to have some title or interest in the property and a prospective vendee is obliged to make a property enquiry of the status of a person in possession and any lease agreement or deed executed by the owner in his favour. If the subsequent purchaser does not make a proper enquiry, he will be deemed to have notice of the existing affairs and he cannot claim himself to be bonafide purchaser. As observed hereinabove, in R.K. Mohammed Ubaidullah and other's case (supra), the Hon'ble Apex Court observed that not making any inquiry from the tenant in possession at the time of purchase, the subsequent purchaser cannot be said to be Regular Second Appeal No. 334 of 2009 7 a bonafide transferee in good faith for value without notice of the contract. The aforesaid findings returned by the learned appellate Court lead to irresistible conclusion that there is no room for interference. The appellants cannot derive any benefit from the case laws referred to by the learned counsel for the appellants viz. Jopseph George Vs. Chacko thomas 1992 Civil Court Cases 140 (Kerala), Lourdu Mari David Vs. Louis Chinnaya Arogiaswamy 1997(1) RCR (Civil) 286; Sundaram Ammal Vs. Gowriammal and another 2002(4) RCR (Civil) 846; Veluyudhan Sathyadas Vs. Govindan Dakshyani 2002(2) PLJ 152; A.C. Arulappan Vs. Smt. Ahalya Naik 2001(4) RCR (Civil) 109; Harinderpal Singh Vs. Rani (since dead) through her LRs 2005 AIR (Punjab) 151 and Jagtar Singh Vs. Gurmit Singh and another 2006(1) PLR 58 because the act and conduct of the appellants, as referred to above, itself reflected that they were not the bonafide purchasers and what all was done by them in connivance with respondents No.2 and 3 to frustrate the rights of the plaintiff, which accrued in his favour by dint of agreement to sell dated 22.9.1993, the specific performance of which has rightly been ordered by the learned First Appellate Court below. In view of the above, the instant appeal being devoid of any merit is dismissed in limine. (ARVIND KUMAR) JUDGE April 21,2009 Jiten