R.S.A. No. 140 of 2010 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 140 of 2010 (O&M) Date of decision: 18.01.2010 Kartar Singh and another ....Appellants Versus Kuldeep Singh and another ....Respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. S.S. Salar, Advocate, for the appellants. VINOD K. SHARMA, J.(ORAL) This regular second appeal is directed against the judgment and decree dated 7.11.2009 passed by the learned lower appellate Court, vide which the suit filed by plaintiff/respondent No.1 for specific performance of agreement to sell, stands decreed. Plaintiff/respondent No.1 filed a suit for specific performance, to enforce the agreement to sell land measuring 122 kanals 2 marlas. The vendor received earnest money of Rs.3,00,000/- (Rupees three lac only), and conveyance deed was agreed to be executed on 14.12.2004. It was the case of plaintiff/respondent No.1, that he was always ready and willing to perform his part of the contract. In order to prove this assertion, had visited the office of Sub Registrar on 14.12.2004, where the vendor did not turn up. The plaintiff proved his presence by submitting an application. It was further the case of plaintiff/respondent No.1, that in order to defeat the rights of the plaintiff, defendant No.1 sold 8 kanals of land to defendants No.2 and 3, who are real brothers of R.S.A. No. 140 of 2010 (O&M) -2- defendant No.1. The said sale deed was said to be a sham transaction, as before filing the suit, notice was served on the defendant/appellants, also. The suit was contested by the defendant/vendor, by raising preliminary objection, that the agreement was a forged document. It was the case set up by the defendant/vendor, that on the date of agreement i.e. 26.12.2003, defendant No.1 in suit was not the owner of the property. Other averments were controverted. Specific plea taken by the defendants was, that defendant No.1 had became owner of the land only on 28.6.2004, i.e. after the execution of the agreement. On the pleadings of the parties, the learned trial Court framed the following issues: - “1. Whether the plaintiff is entitled to relief of specific performance? OPP 2. Whether the defendant entered into an agreement to sell the land measuring 8 kanals i.e. 16/244 share out of the total land measuring 122 kanals 2 marlas for consideration of Rs.4 lacs out of which the defendant received Rs.3 lacs as earnest money and had agreed to execute the sale deed well before 14.12.2004? OPD 3. Whether the plaintiff always remained ready and willing to perform his part of the contract? OPP 4. Whether the suit of the plaintiff is not maintainable in the present form? OPD 5. Whether the agreement in question is forged document? OPD 6. Relief?” R.S.A. No. 140 of 2010 (O&M) -3- Issues No. 1, 2, 3 and 5 were taken up together. The learned trial Court held, that the execution of agreement to sell by defendant No.1 stood proved. The learned trial Court also found, that plaintiff/respondent No.1 was always ready and willing to perform his part of the contract. The learned trial Court, however, held that the decree for specific performance could not be passed in favour of plaintiff/respondent No.1, as on the date of agreement, defendant No.1 was not the owner of the property and the agreement was uncertain and vague. The learned trial Court, therefore, held, that plaintiff/respondent No.1 was only entitled to refund of Rs.3,00,000/- (Rupees three lac only) from defendant No.1 along with interest. A decree for refund of Rs.3,00,000/- (Rupees three lac only) along with interest @ 12% from the date of execution of agreement till the date of passing of decree with future interest @ 6%, was passed. Plaintiff/respondent No.1 preferred an appeal. The learned lower appellate Court reversed the finding with regard to prayer of specific performance by recording as under: - “So, I am of the opinion that the ld. trial court has not properly appreciated the evidence on record and law point involved in this case and has wrongly decreed the suit of the plaintiff for alternative whereas in view of the facts and circumstances of the case discussed above, the suit of plaintiff-appellant should have been decreed for specific relief. Accordingly, the appeal is accepted and the impugned judgment and decree is modified to the extent that the appellant-plaintiff is entitled to the specific relief of the agreement dated 16.12.2003 to sell Ex.P7. Accordingly, the suit of the plaintiff is decreed with costs throughout for specific R.S.A. No. 140 of 2010 (O&M) -4- performance of the agreement to sell dated 16.12.2003 for execution of the sale deed regarding land measuring 8 kanals as fully detailed in the headof the plaint and the sale deed dated 18.8.2004 executed by defendant No.1 in favour of defendants No.2 and 3 Kartar Singh and Chaman Singh is set aside and the plaintiff is directed to deposit the remaining balance consideration within three months in the ld trial court from the date of receipt of the copy of this judgment and defendants Nos.1 to 3 are directed to execute the sale deed of the land in suit in favour of the plaintiff accordingly, failing which the plaintiff-appellant shall be entitled for execution of the sale deed through the agency of the ld trial court by depositing all the expenses as per the rules. Decree sheet be prepared. The file of the ld trial court alongwith copy of this judgment be returned immediately for information and necessary compliance. The appeal file be consigned to the record room.” This regular second appeal has been filed by subsequent vendees/defendants. It is pertinent to mention here, that though the appellants were impleaded as party to the suit, they did not raise plea of bona fide purchase, for the reason, that appellants are real brothers of defendant No.1, and the sale deed in their favour was executed after agreement to sell. In view of relationship the appellants were aware of agreement to sell executed in favour of plaintiff/respondent. Mr. S.S. Salar, learned counsel, appearing on behalf of the appellants, contends, that this appeal raises the following substantial questions of law: - R.S.A. No. 140 of 2010 (O&M) -5- “1. Whether the finding of the learned lower appellate Court, that the earnest money could not be recovered from plaintiff/respondent No.1 for want of any other land, is perverse? 2. Whether the suit for specific performance could be decreed when at the time of agreement to sell, vendor was neither owner nor in possession of the suit land, and the agreement to sell was vague? 3. Whether the decree passed is in violation of Section 20 of the Specific Relief Act?” In support of the substantial questions of law, the learned counsel for the appellants vehemently contended, that there was no evidence to prove that defendant/respondent No.2 did not have sufficient fund to satisfy the decree passed by the learned trial Court. Merely because vendor was left with no land, could not be a ground to hold that decretal amount could not be recovered. This contention of learned counsel is mis-conceived, and not warranted, nor can be said to be a substantial question of law arising for consideration in this appeal. Every observation made by the learned Court while deciding a case does not constitute substantial question of law, specially when such observations are not the basis of the decision. The suit filed by plaintiff/respondent No.1, was decreed by the learned trial Court for recovery, as the plaintiff had successfully proved the execution of sale agreement as well as his willingness to perform his part of the contract. This finding of fact recorded by the learned trial Court was not challenged by the appellants or the vendor, before first appellate Court. R.S.A. No. 140 of 2010 (O&M) -6- The only ground for denial of the relief for specific performance by learned trial Court was, that the vendor was not the owner of the property on the date of agreement to sell as he acquired the title only subsequently, therefore, the agreement was not specifically enforceable. This finding of the learned trial Court was rightly set aside. The decree passed by the learned lower appellate Court is in consonance with Section 13(1)(a)of the Specific Relief Act, 1963, which reads as under: - “13. Rights of purchaser or lessee against person with no title or imperfect title. - (1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights, namely:- (a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;” The first substantial question of law, therefore, does not arise for consideration. For the reasons recorded above, the second substantial question of law is also answered against the appellants, as in view of Section 13(1)(a) of the Specific Relief Act, on acquisition of the title in the property subsequently, the vendee can enforce the contract of specific performance. The learned counsel for the appellants, on the third substantial question of law, contended, that the specific performance of contract was R.S.A. No. 140 of 2010 (O&M) -7- likely to cause hardship to the appellants, which they could not foresee. Whereas non-performance of the contract was not to cause any hardship to plaintiff/respondent No.1, as the learned trial Court had decreed the suit for recovery of earnest money along with interest. Therefore, the decree passed by the learned lower appellate Court, is violative of Section 20 of the Specific Relief Act. It was also contended by the learned counsel for the appellants, that the contract was inequitable. This plea of the learned counsel for the appellants again deserves to be noticed to be rejected. The appellants cannot be said to have suffered any hardship, as the sale deed in their favour was subsequent to agreement to sell in favour of plaintiff/respondent No.1. It cannot be said that the appellants could not foresee the hardship at that time, as admittedly they are the real brothers of the vendor. It cannot be said, that appellants had no knowledge of the agreement to sell. It is for this reason, that the plea of “bona fide purchaser” was not raised, either before the learned trial Court or the learned lower appellate Court, though specifically impleaded as party, with an averment that the transaction of sale in their favour was a sham transaction, to defeat the right of plaintiff/respondent. The third substantial question of law is, therefore, also answered against the appellants, as no ground to deny the specific performance in terms of Section 20 of the Specific Relief Act is made out in the case. The learned counsel for the appellants also contended, that in the present case, the plaintiff/respondent No.1 failed to rebut the R.S.A. No. 140 of 2010 (O&M) -8- evidence of the appellants, of bona fide purchasers in good faith without notice of earlier contract, as there was no averment in this regard, qua the knowledge of earlier contract. In support of this contention, the learned counsel for the appellants placed reliance on the judgment of the Hon'ble Supreme Court in B. Rajamani Vs. Mrs. Azhar Sultana & Ors., 2005(2) Civil Court Cases 696. This contention of the learned counsel for the appellants is totally mis-conceived. The specific stand taken by plaintiff/respondent No.1 was, that the transaction, of sale in favour of the appellants was sham transaction, to defeat the rights of the plaintiff. It was specifically pleaded, that the appellants are real brothers of the vendor and the sale deed in their favour could not affect the rights of the plaintiff to seek the relief of specific performance. The appellants even did not claim an issue of “bona fide purchasers” for consideration. It cannot be said, that appellants were bona fide purchasers for consideration without notice, as contended. All the substantial questions of law raised are answered against the appellants. Finding no merit in this appeal, it is ordered to be dismissed in limine. (Vinod K. Sharma) Judge January 18, 2010 R.S.