HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON'BLE SRI JUSTICE B.CHANDRA KUMAR L.P.A.Nos.209 of 2000 & 83_of 2001 DATED:25-08-2009 L.P.A.No.209 OF 2000 BETWEEN: C.Ramachander …Appellant AND Smt.Nukala Sayamma & 2 others. …Respondents L.P.A.No.83 OF 2001 BETWEEN: Y.Satyanarayana …Appellant AND Bhim Sain Gamji & 5 others. …Respondents This Court made the following: HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON'BLE SRI JUSTICE B.CHANDRA KUMAR L.P.A.Nos.209 OF 2000 & 83 OF 2001 COMMON JUDGMENT: (Per Hon’ble Sri Justice A.Gopal Reddy) These two appeals having been heard together as they arise out of a common judgment, interconnected and raise common issues are being disposed of by this common judgment. 2. L.P.A.No.209 of 2000 is filed against the judgment in C.C.C.A.No.72 of 1988 and L.P.A.No.83 of 2001 is filed against the judgment in Tr.C.C.C.A.No.22 of 1996. By common judgment dated 24.7.2000, learned single Judge of this Court dismissed C.C.C.A.No.72 of 1998 confirming the judgment and decree passed by IV Additional Judge, City Civil Court, Hyderabad in O.S.No.347 of 1982 decreeing the suit for declaration of title and recovery of possession; and partly allowed Tr.C.C.C.A.No.22 of 1996 by setting aside the judgment and decree passed by the same Court in O.S.No.510 of 1975 only to the extent of refund of earnest money while confirming the dismissal of suit for specific performance. 3. Facts in O.S.No.510 of 1975: Plaintiff instituted the suit in O.S.No.510 of 1975 for specific performance of agreement of sale dated 14.1.1972-Ex.A.2 executed by 1st defendant in respect of suit schedule property bearing door No.1-9-515 to 1-9-518, Adikmet, Hyderabad. In the plaint, it is alleged that 1st defendant, who is a member of the family of one Narasimha Rao Gamji, had entrusted the sale of some properties to “Good Luck Auctioneers” represented by one M.M.Jafferi. In the year 1971 the said auctioneer, on behalf of 1st defendant, auctioned some of the properties entrusted to them. The suit schedule property is a part of the huge property portions of which had been auctioned by the said auctioneer. Defendant No.4, brother of 1st defendant however, engaged one G.H.Naqvi as his agent to sell the suit schedule property. The said G.H.Naqvi offered on behalf of 1st defendant and allegedly, on the latter’s instructions, the suit schedule property for sale and the plaintiff agreed to purchase the same, and that after negotiations with 1st defendant, which were conducted in the presence of said Naqvi on 14.1.1972, agreement under Ex.A.2 was entered into between 1st defendant on one side and the plaintiff on the other for the sale of the suit schedule property for a sale consideration of Rs.11,999/-, and that the said agreement was reached after 1st defendant had represented and assured the plaintiff that he and 4th defendant had the right, title, interest and power to sell the property, and that before the execution and registration of the sale deed, 1st defendant would furnish the necessary proof of his right, title, interest and power of alienation and of the fact that the property was free from encumbrances of any kind whatsoever. It is averred that on the date of agreement i.e. 14.1.1972, plaintiff paid a sum of Rs.2,000/- by way of earnest money to 1st defendant, who acknowledged the receipt of the same under Ex.A.3 receipt. That apart, the plaintiff also paid a sum of Rs.600/- to the Agent- Naqvi as his commission. The plaintiff also paid a sum of Rs.1200/- to said Naqvi being the difference in the amount to be paid to 1st defendant for which, a receipt was passed on by the said auctioneer-Naqvi. It is averred that the plaintiff has also paid a further sum of Rs.1500/- at the instance of 1st defendant to said Naqvi as part of the earnest money, for which, a receipt was issued by Naqvi. According to plaintiff, the agreement stipulated that subject to the proof of the vendor’s title, the transaction would be completed by the execution and registration of the sale deed in respect of the suit schedule property, within one month from the date of the said agreement, after receiving the balance of consideration of Rs.9999/- in the presence of the Registrar. In failure to obtain the sale deed, the agreement further stipulated that the earnest money stands forfeited and in the event of failure of 1st defendant to furnish the necessary proof of title and to get the sale deed executed, he should refund the earnest amount of Rs.2,000/- and should also pay the sum of Rs.500/- by way of penalty for his default. Owing to the vicissitudes of the ceiling laws and other inherent procedural difficulties which 1st defendant had expressed, it was further stipulated that the parties in view of their respective conveniences can extend the time of agreement beyond the stipulated period of one month. According to plaintiff, 1st defendant put the plaintiff in complete physical possession of the suit schedule property on the same day and accordingly he was in possession of the same. However, according to plaintiff, 1st defendant did not furnish necessary proof of title in respect of suit schedule property and in spite of demands/claims of plaintiff, he went on postponing the execution of sale deed. Meanwhile, the plaintiff fell ill and on return from the village after recovery, when he approached 1st defendant, he was still not ready nor produced any proof of title, but he went on making lame excuses such as impending ceiling legislation and orders in anticipation of the same. 1st defendant assured the plaintiff that since the latter was in possession of the property, he need not have any grievance. Thus 1st defendant failed to perform his part of contract, whereas the plaintiff was always ready and willing to perform his part of contract and therefore, he is entitled for specific performance of agreement of sale. He came to know that 1st defendant sold the suit schedule property to 2nd defendant in complete breach of the above agreement by playing fraud. Therefore, in the alternatively, it is prayed that 1st defendant is liable to refund the sum of Rs.2000/- received from him by way of earnest money and is also liable to pay penalty of Rs.500/- for the breach of the contract apart from Rs.600/- paid by the plaintiff to the commission agent-Naqvi. Thus, the 1st defendant is liable to reimburse the plaintiff total sum of Rs.3100/-. It was averred that the plaintiff is entitled to retain possession of the property in pursuance of the agreement and can continue in possession of the same till all the amounts are paid and thus he has a primary charge and lien on the property. It was also averred that the purchaser-2nd defendant had notice of the agreement between the plaintiff and 1st defendant and therefore, he is not entitled to dispossess the plaintiff and he is liable to be restrained from dispossessing the plaintiff until such time as the property is not free from the plaintiff’s charge thereon. With the above pleadings, he laid the suit for specific performance of agreement of sale by receiving the balance sale consideration or in the alternative, prayed for a decree against 1st and 3rd defendants for payment of Rs.4000/- with interest thereon from the date of suit till its realization. 4. Resisting the suit, defendants 1,4 and 5 filed a common written statement contending that 1st defendant and his brother 4th defendant became absolute owners of the suit schedule property consequent upon family partition and also admitting the execution of agreement of sale-Ex.A.2 and receiving the advance sale consideration. But it was stated that defendants 1 and 4 agreed to execute the sale deed on receipt of balance amount of sale consideration. According to them, it was further agreed that in the event of breach on their part, they would return the earnest amount received and that the plaintiff specifically agreed that in default on his part, the earnest amount would stand forfeited. Under the agreement, time was the essence of the contract for payment of balance consideration and as the plaintiff did not come forward to perform his part of agreement, they sent a legal notice dated 3.4.1972-Ex.B.3 intimating him that in spite of the time being the essence of contract, the same was extended twice at his request from 6.12.1971 to 27.12.1971 and from 27.12.1971 to 6.1.1972 and if the amount is not paid by 25.4.1972, the earnest money would be forfeited and it would be open to them to deal with third parties. In response to the notice, plaintiff sent a letter, dated 28.4.1972 seeking one month’s time. Thus, according to them, the plaintiff was never ready to perform his part of contract and went on committing default and committed breach of contract. The plaintiff was never in possession of the property, and that they never shirked from proving their title etc., as alleged by the plaintiff. To give one more opportunity to the plaintiff, they got issued a public notice on 2.5.1972 in daily newspaper ‘Siyasat’ finally extending time by one more week making it abundantly clear that the said notice was final and they would be free to deal with the third parties. In spite of the same, as the plaintiff did not pay the balance sale consideration, they forfeited the earnest money and sold the suit schedule property to 2nd defendant and therefore, they are not liable to return the earnest money much less the damages as claimed by the plaintiff. 5. 2nd defendant filed a separate written statement stating that 1st defendant and plaintiff colluded with each other and got filed the suit to cause loss to her. She denied the delivery of possession of suit schedule property to the plaintiff pursuant to the agreement dated 14.1.1972. Defendants 1,4 and 5 are the brothers and they constitute a joint Hindu Family, and that there was a partition of the properties belonging to the joint Hindu Family, which was evidenced by a registered deed dated 3.9.1971, under which, the suit schedule property fell to the share of 4th defendant. In turn, 4th defendant under a registered sale deed dated 30.3.1973 sold the suit schedule property to this defendant for a valuable consideration of Rs.10,000/- and put her in continuous and uninterrupted possession and enjoyment of the same as absolute owner. The plaintiff was never in possession of any portion of the suit schedule property. 1st defendant being the eldest brother of 4th defendant settled the sale transaction of the suit schedule property in favour of this defendant only on behalf of 4th defendant, who is the owner of the property. According to her, there is no cause of action for the plaintiff to file the suit against her and the same is not maintainable and prayed for dismissal of the suit. 6. 6th defendant filed a separate written statement denying the allegations in the plaint that 1st defendant as a member of the family of Narasimha Rao Gamji had entrusted the sale of some properties to Goodluck Auctioneers represented by M.M.Jaffari. He denied that 1st defendant commissioned one G.H.Naqvi as his agent to sell the suit schedule property and the allegation that said Naqvi, on behalf of 1st defendant and on the instructions, offered the suit property for sale and that the plaintiff agreed to purchase the same. He also denied the negotiations between 1st defendant and plaintiff in the presence of Naqvi and the plaintiff’s payment of earnest money. He denied the truthfulness of the transaction between the plaintiff and 1st defendant. According to him, 1st defendant is not the Karta of the family nor he had any right to enter into an agreement with anyone to bind other members of the family. He has purchased vacant portion admeasuring 260 sq.yds. in premises bearing No.1-9-523 and 526 under registered sale deed No.751/74, dated 23.7.1973 and he has been in possession of the suit property since that day. He denied the possession of the plaintiff over the suit schedule property. It is alleged that the plaintiff filed the suit in collusion with other defendants. Therefore, the suit for specific performance or for refund of the money against him is not maintainable and prayed for dismissal of the same. 7. On the above pleadings, the trial Court framed as many as 13 issues for trial. 8. Facts in O.S.No.347 of 1982: The purchaser-2nd defendant in O.S.No.510 of 1975 instituted this suit along with her husband against the plaintiff therein and another for declaration of title that she is the owner of the property bearing No.1-9-522 consisting of 520 sq.yds. and dilapidated rooms thereon, situated at Adikmet, Hyderanad and for possession of the same by evicting the plaintiff in O.S.No.510 of 1975 and another alleging that they are in illegal and unauthorized possession of the same. In this suit, the plaintiff in O.S.No.510 of 1975 is arrayed as 1st defendant and one C.Ramachandar (appellant in L.P.A.No.209 of 2000) was arrayed as 2nd defendant. In the plaint, it is alleged that 1st plaintiff purchased the suit schedule property under a registered sale deed, dated 31.3.1973 vide document No.736 from Surender Gamji-4th defendant in O.S.No.510 of 1975. It is alleged that 1st defendant in his suit in O.S.No.510 of 1975 filed I.A.No.1093 of 1975 for temporary injunction, which was rejected and the said order was confirmed in C.M.A. and C.R.P. arising therefrom holding that he was not in possession of the property but she is in possession of the property. However, 2nd defendant in this suit, entered into the suit schedule property claiming to be the G.P.A. holder of 1st defendant and started a firewood stall business and auto workshop etc., illegally and is making wrongful gains. Hence, she should be declared as owner and possessor of the suit schedule property and entitled for recovery of possession. 9. Resisting the said suit, 1st defendant (plaintiff in O.S.No.510 of 1975) filed a written statement denying the allegations made in the plaint. It was stated that the suit is to be dismissed for non-joinder of necessary and proper parties in the suit, and that since the suit is for declaration and possession and as the vendor’s title itself is questioned, the vendor is a necessary and proper party to be added and therefore, the suit cannot be maintained in the absence of the vendor. It was further stated that he filed O.S.No.510 of 1975 for specific performance of agreement of sale against the alleged vendor Bhimsen Gamji and his two brothers in which the 1st plaintiff was arrayed as 2nd defendant, with respect to the suit property, mentioned in the agreement of sale executed in his favour by the vendor of these plaintiffs. It is pleaded that the sale deed alleged to have been executed and registered in favour of 1st plaintiff by Surender Gamji was with reference to H.No.1-9-522 and not concerned with his claim, which pertains to H.No.1-9-515 to 518 under the agreement of sale executed by Bhimsen Gamji. The alleged sale agreement in favour of 1st plaintiff was brought about maliciously and illegally in order to hoodwink the legally binding agreement of sale executed in favour of this defendant. It was stated that though his application in I.A.No.1093 of 1975 was dismissed and confirmed in C.M.A. and C.R.P., that does not mean that the plaintiffs herein are in possession of the suit schedule property. He is in continuous possession and enjoyment of the property bearing Nos.1-9-515 to 518, Adikmet, Hyderabad along with his family members and that 1st and 4th defendants (in O.S.No.510 of 1975) are never in possession of the suit schedule property nor there is any record to show that the suit schedule property belongs to them, with regard to their title and interest and on his enquiry, it revealed that the suit schedule property is in Sy.No.175, Adikmet, Hyderabad, which belongs to Government. The identity of the suit schedule property with its boundaries are quite different from that of the house property bearing Nos.1-9-515 to 518 claimed by him. Hence, prayed for dismissal of the suit. 10. 2nd defendant filed a written statement contending that there is no cause of action against him to file the suit and that the dates shown in the plaint as the cause of action are fictitious and unfounded. The alleged sale transaction is brought up illegally and with evil intention to get over the legally binding agreement entered into between 1st defendant and the vendor of 1st plaintiff and thereby illegally depriving the 1st defendant from enforcing his right over the suit schedule property and that the 2nd plaintiff is the brain behind the illegal transactions entered into between the 1st plaintiff and her vendor culminating in the present suit. This defendant is the brother-in-law of 1st defendant. Himself and his family members are living together in the property shown as H.No.1-9-515 to 518, and their father settled in the said property about 60 years ago and after remaining for 25 years, he died in the year 1952 and thereafter, they are continuously living in the said place along with their mother, by doing business in the said premises. While so, 1st defendant being relation of this defendant wanted to own the suit schedule property, and that this defendant informed the 1st defendant that one Bhimsen Gamji possessed of the title deeds for the suit schedule property and he wants to sell the same. Since 1st defendant happened to be the near relation to this defendant, this defendant felt that if there is such real title in vendor’s favour, the 1st defendant can enter into the deal with the vendor and so far as the possession is concerned, he would consent to the 1st defendant, and that on this assurance, 1st defendant entered into the sale agreement with the said Bhimsen Gamji from whom 1st defendant was demanding the title deeds to be shown so that he can get the necessary transfer deed. As the said Bhimsen Gamji was not having the title to the suit property, he conveniently avoided the 1st defendant and in collusion with the plaintiffs herein, had brought into existence a registered sale deed, as alleged in the plaint, in favour of 1st plaintiff. He stated that he is acting as attorney on behalf of 1st defendant by virtue of G.P.A. executed by 1st defendant dated 27.6.1979. It is alleged that the prayer of 1st plaintiff with respect to H.No.1-9-522 is unconcerned with the property bearing H.Nos.1-9-515 to 518 for which, the 1st defendant entered into agreement with Bhimsen Gamji. He denied about the trespassing into the suit schedule property as alleged by the plaintiffs. 11. After filing the above written statements disputing the identity of the suit schedule property in O.S.No.347 of 1982, the plaint therein was later amended carrying out the amendment with regard to the house number to the suit schedule property as H.Nos.1-9- 515 to 518 in place of 1-9-522. On such amendment being carried out, the suit schedule property became similar as that of the subject-matter of the suit in O.S.No.510 of 1975. However, additional written statement was also filed in view of amendment to the plaint. 12. After settling necessary issues in both the suits, joint trial was conducted and common evidence was let in O.S.No.510 of 1975. 13. For the sake of convenience, the parties hereinafter will be referred to as they were arrayed in O.S.No.510 of 1975, against which, L.P.A.No.83 of 2001 is filed. 14. On behalf of the plaintiff, P.Ws.1 to 7 were examined and Exs.A.1 to A.48 were marked. On behalf of 2nd defendant (plaintiff in O.S.No.347 of 1982), 1st defendant was examined as D.W.1 and two more witnesses were examined as D.Ws.2 and 3 and Exs.B.1 to B.12 were marked. The letter of Tahsildar filed by P.W.6 was marked as Ex.X.1. The report of the Commissioner and the eight documents filed by him were marked as Exs.C.1 to C.8. 15. The trial Court after considering the issues 1 to 5,7 and 9 in O.S.No.510 of 1975 and considering the contents of Ex.A.2 sale agreement dated 14.1.1972 held that there is no whisper that possession was delivered to the plaintiff and note was seen to have been added later in Ex.A.2. The note appended to Ex.A.2 agreement of sale, according to the trial Court, appears to be as a result of interpolation seem to have been brought into existence subsequent to the execution of Ex.A.2. Regarding the possession of the plaintiff, the findings of the trial Court in the interlocutory application in I.A.No.1093 of 1975 were already affirmed by this Court in the appeal and in revision, but however, it was observed by the trial Court that though the findings in the interlocutory application may not operate as res judicata, even during the trial, the plaintiff has not placed any tangible evidence to prove his possession over the suit schedule property as on the date of filing of the suit. In this regard, it was observed that though the plaintiff relied on certain documents such as tax receipts, electoral rolls etc., most of those documents pertain to the period subsequent to 1981 and they were obtained and filed subsequent to the filing of the suit. In that view of the matter, it was held that the plaintiff failed to establish his possession over the suit schedule property. Considering the evidence, it was held that Ex.A.2 suit agreement is true, valid and binding on 4th defendant as he got issued a notice under Ex.B.3 demanding payment of the amount from the plaintiff and also got published the same in Siasat daily on 2.5.1972, and that since 2nd defendant has obtained a sale deed subsequently from 4th defendant, who is the owner of the suit schedule property, the agreement-Ex.A.2 does not bind on 2nd defendant nor it is binding on 5th and 6th defendants since they are no concerned with the suit schedule property and accordingly answered issue No.2 in favour of the plaintiff holding that the agreement-Ex.A.2 is binding on 4th defendant only. In view of the findings on issues 1 and 2, the trial Court answered the issue No.3 holding that the possession of suit schedule property was never delivered to the plaintiff on the date of Ex.A.2 and the plaintiff had no possession of the suit schedule property on the date of filing of the suit. Basing on those findings, on issue No.4, the trial Court held that it is the plaintiff who committed breach of suit agreement but not 1st defendant. So far as issue No.5 is concerned, it was held that though 1st defendant had no title over the suit schedule property, he himself executed Ex.A.2, however, Ex.A.2 seems to have been ratified by 4th defendant and in view of the findings that 4th defendant is also bound by Ex.A.2-agreement, 1st defendant is not bound to establish his title or possession over the suit schedule property. Thus, the 5 issues were answered against the plaintiff. For the conclusions reached on the above findings, on issue No.7 the trial Court held that the plaintiff was always not ready and willing to perform his part of contract for obtaining the sale deed, and that basing on these findings, the trial Court answered issue No.9 against the plaintiff holding that he is not entitled to specific performance of agreement of sale. 16. Under Ex.B.1 letter, dated 28.4.1972 addressed to 1st defendant, the plaintiff himself sought for extension of one month’s time for obtaining the sale deed. Under Ex.B.4 legal notice got issued by 4th defendant, dated 22.5.1972 and under Ex.A.46, the paper publication in Siasat Daily newspaper the plaintiff was asked to pay the balance sale consideration and obtain the sale deed failing which, the amount of Rs.2,000/- would be forfeited. Considering the said evidence, the trial Court observed that in spite of the notice, the plaintiff never shown his readiness and willingness to perform his part of the contract, and therefore, held that the plaintiff is not entitled to refund of the advance amount or damages with interest and