IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. R.S.A. No.390 of 2005 Date of Decision:20.9.2010 Gurbax Kaur. ....... Appellant through Shri Sumeet Mahajan, Senior Advocate with Shri Sham Lal Bhalla, Advocate. Versus Smt. Santosh Kumari and another. ....... Respondent no.1 through Shri Arun Jain, Senior Advocate with Shri Amit Jain,Advocate. CORAM: HON'BLE MR.JUSTICE MAHESH GROVER .... 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? .... Mahesh Grover,J. This Regular Second Appeal is directed against judgment and decree dated 11.11.2004 passed by the Additional District Judge, Chandigarh (hereinafter described as `the first appellate Court') whereby the appeal of the plaintiff-respondent no.1 preferred against judgment & decree dated 8.3.2002 of the Civil Judge (Junior Division), Chandigarh (referred to hereinafter as `the trial Court') was accepted and her suit for specific performance was decreed against defendant-appellant with costs. Initially, the plaintiff had sought a decree of permanent R.S.A.No.390 of 2005 -2- .... injunction seeking to restrain the defendants from transferring or alienating in any manner House No.182, Sector 20-A, Chandigarh (called hereinafter as `the suit property') to any other person except her. Later on, she amended the plaint and the suit was converted into that for possession through specific performance of agreement to sell dated 2.7.1994 executed by defendant no.1-Smt.Gurbax Kaur in favour of defendant no.2-Amarjit Singh and agreement to sell dated 10.8.1994 executed by defendant no.2 in her favour. It was pleaded that by the said agreement to sell in favour of the plaintiff, the suit property was agreed to be sold for a total consideration of Rs.9,60,000/- out of which a sum of Rs.1,25,000/- was paid as earnest money and prior to that, the sale price agreed to be paid by defendant no.2 was Rs.8, 85,000/-. In the case of defendant no.2, the sale deed was to be executed on or before 30.10.1994, whereas in the case of the plaintiff, it was to be done by 20.10.1994. It was specifically mentioned in the agreement to sell in favour of defendant no.2 that the purchaser had a right to get the sale effected in his own name or in the name of his nominee and he could have entered into an agreement to sell with any person at any price and the seller could not have any objection to that. Similar stipulation was made in the agreement to sell executed by defendant no.2 in favour of the plaintiff. A `no objection certificate' was obtained by defendant no.1 from the Estate Officer, U.T., Chandigarh to sell the suit property in favour of the plaintiff and the sale deed was to be got registered by 15.11.1994. It was averred that the plaintiff along with the balance sale consideration attended the office of the Sub Registrar, Chandigarh on 20.10.1994, but the defendants R.S.A.No.390 of 2005 -3- .... did not come present. It was further averred that she also contacted the mediator through whom the deal was finalised, but to no effect and the legal notice served by her also did not yield any result. It was pleaded that the plaintiff always remained ready and willing to perform her part of contract, whereas the defendants backed out. Upon notice, the defendants appeared, but only defendant no.1 filed written statement contesting the suit, whereas defendant no.2 did file any reply. A number of preliminary objections were raised by defendant no.1 and the suit was stated to be barred under Order 2 Rule 2 of the CPC. It was pleaded that there was no privity of contract inter se between the plaintiff and defendant no.1 and the suit for specific performance was not maintainable in law. It was denied that defendant no.2 was authorised to sell the suit property under condition no.8 of the agreement to sell executed in his favour. It was further denied that no objection certificate from the Estate Office was obtained for the plaintiff. Defendant no.1 pleaded that she did not deal with the plaintiff at any time in respect of agreement to sell dated 10.8.1994 and the transaction, if any, entered into at the behest of mediator- Shri Manohar Singh Gulati was not at her instance. It was averred that the legal notice was received on behalf of the plaintiff, but it was validly and legally ignored. The parties went to trial on the following issues:- 1. Whether the plaintiff is entitled for possession of the suit property through specific performance of agreement of sale R.S.A.No.390 of 2005 -4- .... dt. 2.7.94 as alleged in the head note of the plaint?OPP 2. Relief. After appraisal of the evidence on record, the trial Court dismissed the suit qua defendant no.1, but decreed her suit against defendant no.2 and held her entitled to recover a sum of Rs.1,25,000/- paid as earnest money to him along with interest at the rate of 12% per annum. Feeling dis-satisfied, the plaintiff filed an appeal which was accepted by the first appellate Court and her suit for specific performance was decreed against defendant no.1. This has resulted in the filing of the instant appeal by defendant no.1. Learned counsel for the appellant has contended that there was no privity of contract between the appellant and the plaintiff-respondent no.1 and only contract was with Amarjit Singh, defendant-respondent no.2, who did not file any suit for specific performance and in such an eventuality, the findings of the first appellate Court are erroneous as the suit has been decreed in favour of the plaintiff with whom no agreement was there by the appellant. It was further contended that the readiness and willingness on the part of respondent no.1 does not stand established in terms of Section 16 of the Specific Relief Act,1963 (for brevity, `the Act'). It was next argued that under Section 20 of the Act, the trial Court had exercised its discretion fairly which has wrongly been upset by the first appellate Court for no justifiable reasons. To support his contentions, learned counsel for the appellant placed reliance on Nirmala Anand Versus R.S.A.No.390 of 2005 -5- .... Advent Corporation (P) Ltd. and others, (2002) 8 S.C.C. 146; G.Jayashree and others Versus Bhagwandas S.Patel and others, (2009) 3 S.C.C. 141 and Inderchand Jain (dead) through L.Rs. Versus Motilal (dead) through L.Rs. , (2009) 14 S.C.C. 663. On the other hand, learned counsel for respondent no.1 has contended that clauses (7) and (8) of agreement to sell executed in favour of defendant-respondent no.2 clearly showed that the appellant, while executing the same, had also acquiesced to the suit property being sold to his nominee (assignee) and there was a specific stipulation that she would not have objection if the suit property was sold to any body else. He then contended that the word `nominee' having been incorporated in the said clauses of the agreement, was binding upon the appellant. To support his contention, he placed reliance on Shyam Singh Verksus Daryao Singh (dead) by L.Rs. and others, AIR 2004 S.C. 348 and Smt.Budda Adeyyamma Versus Kandregula Simhachalam & Ors., 2009(2) Civil Court Cases 0309 (A.P.). The next contention that was raised by learned counsel for respondent no.1 is that respondent no.1 had made a specific pleading to the effect that she was ready and willing to perform his part of agreement and that she had also produced in evidence the bank official, who had prepared the drafts of the requisite amount for carrying out the sale and his testimony was rightly appreciated by the first appellate Court. It was further contended that the readiness and willingness on the part of a person has necessarily to be inferred from the circumstances of the case and the fact of R.S.A.No.390 of 2005 -6- .... getting prepared the bank drafts coupled with the fact that the suit was promptly filed within days of refusal by the appellant to execute the sale deed, as also the fact that Manohar Singhh Gulati, the dealer, who had facilitated the agreement also testified that the information was duly given to the appellant regarding the date of execution of the sale deed and the another fact that the appellant herself had obtained a no objection certificate from the Estate Office in favour of the plaintiff-respondent no.1, clearly demonstrated that there was no default on the part of the plaintiff and it was the appellant, who had defaulted in executing the sale deed. To support his contention, he placed reliance on Ramakrishna Pillai & Anr. Versus Muhammed Kunju & Ors., 2008(2) Recent Civil Reports 260 (S.C.); Azhar Sultana Versus B.Rajamani & Ors., 2009(2) Recent Civil Reports 123 (S.C.); Gurbachan Singh & Anr. Versus Gurmit Singh, 2003(4) Recent Civil Reports 223 (P&H) and Iqbal Singh and another Versus Gurdev Kumar and another, 2004(2) P.L.R. 243 (P&H). Lastly, it was contended that the first appellate Court has done substantial justice in directing that the amount of Rs.8.35 lacs, i.e., the balance sale consideration, be tendered to the appellant within two months and the said amount has since been tendered and was lying with the Court and, therefore, the impugned judgment deserves to be upheld. I have thoughtfully considered the rival contentions and have gone through the whole record. The fore-most fact that has to be considered, is whether there was privity of contract between the appellant and respondent no.1. It is also R.S.A.No.390 of 2005 -7- .... to be noticed that at the time of motion hearing, the following questions of law were framed:- 1. Whether the suit for specific performance against the registered owner can be filed by a person who is not party to the agreement to sell inter se between the parties? 2. Whether a nominee of party can independently file suit in his own right? Having regard to the aforesaid, the facts of the case are to be referred to. The appellant has not disputed the agreement to sell the suit property in favour of Amarjit Singh -respondent no.2. A copy of the said agreement is on record as Exhibit-DA. Clauses 7 and 8 thereof authorised Amarjit Singh to enter into agreement with any person and the seller,i.e., the appellant would not have any objection thereto. These clauses are extracted below for ready reference:- “7. That the seller shall have no objection in case the purchaser desires to get the sale deed registered in the name of any other person or their nominee(s) or in his own name. 8. That the said purchaser can enter into agreement with any peson at any price and the seller will not have any objection at the later stage.” From the above clauses, it becomes abundantly clear that the appellant acknowledged and acquiesced to the transfer of the suit property in favour of nominee (assignee) of respondent no.2 and there was a R.S.A.No.390 of 2005 -8- .... categoric stipulation that she would not have any objection if the suit property is sold to any nominee for any amount. The receipt of earnest money from Amarjit Singh has also not been questioned by the appellant. Therefore, once she herself acknowledged the right of Amarjit Singh to alienate the suit property in favour of his assignee or any other person, it does not lie in her mouth now to turn around to say that there was no privity of contract between her and respondent no.1. The contention of the learned counsel for the appellant on this point is accordingly rejected because respondent no.1 is not a stranger to the arrangement and was entitled to enforce her right under the Act and which she has rightly done. In so far as the contention that respondent no.1 was not willing and ready to perform her part of agreement, is concerned, the same also deserves to be rejected. If the plaint is to be seen, then there is a categoric averment to that effect in paragraph 5 thereof. The appellant, in her written statement, merely denied the said averment without specifying anything. That apart, it is not a mere assertion or denial in the plaint and written statement which are to be considered to construe the readiness and willingness of the parties, but the attending circumstances are also to be taken into consideration for arriving at a just conclusion. In the instant case, the attending circumstances are strong indicator of the fact that respondent no.1 was ready and willing to perform her part of agreement. Respondent no.1 produced PW1-Rajneesh Kant Bajaj, Assistant, State Bank of India, Abohar, PW2-S.K.Kataria, Clerk, Syndicate R.S.A.No.390 of 2005 -9- .... Bank, Hauzkhas, New Delhi and PW4-Ashwani Sehgal, Clerk, Punjab National Bank, Sector 22-D, Chandigarh. PW1 stated that a demand draft dated 5.10.1994 in the sum of Rs.1,75,000/-, a photocopy of which is Exhibit P2, was issued by his bank in the name of Smt.Gurkash Kaur; PW2 testified that demand draft of Rs.50,000/- was issued by his bank in favour of Smt. Gurbax Kaur and PW4 deposed that on 14.10.1994, a pay order of Rs.1.25 lacs was got prepared by respondent no.1 in favour of the appellant which was, later on, got cancelled on 18.1.1995. While appearing as PW7, respondent no.1 deposed that on 20.10.1994, i.e., the last date for registration of the sale deed, she was present in the office of Sub Registrar along with three demand drafts of Rs.1,75,000/-, Rs.1,25,000/- and Rs.50,000/- respectively and five-six lacs in cash and waited there for the appellant but neither she nor Amarjit Singh turned up . She further stated that a telegram was sent to Amarjit Singh and the appellant on 24.10.1994 and also that a legal notice was served upon them, but no reply was received. It is also not in dispute that the appellant herself had obtained a no objection certificate from the Estate Office as while stepping into witness box as DW2, she stated to that effect. On the basis of the above overwhelming evidence, it is amply proved that respondent no.1 was ready and willing to perform her part of contract and the otherwise contention raised by the counsel for the appellant is repelled. The argument that the discretion under Section 20 of the Act R.S.A.No.390 of 2005 -10- .... was exercised judiciously by the trial Court which has wrongly been upset by the first appellate Court is also not tenable. If the facts of the case are to be seen, equity lies on the side of respondent no.1, who had got entire balance sale consideration ready and had even deposited the same pursuant to the direction of the first appellate Court. The appellant, for no ostensible and justifiable reasons, has chosen to back-track from the agreement which she had executed. As a sequel to above discussion, the appeal is held to be without any merit & is dismissed and the judgment & decree dated 11.11.2004 of the first appellate Court whereby the suit of the plaintiff- respondent no.1 for possession of the suit property by way of specific performance of agreement to sell dated 10.8.1994 was decreed, is upheld. The sale deed is directed to be executed within a period of three months. September 20,2010 ( Mahesh Grover ) “SCM” Judge