IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD FRIDAY, THE TWENTY SECOND (22ND) DAY OF JANUARY, TWO THOUSAND AND TEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY CCCA No.74 of 1992 Between: Dr. K.G.V. Bharat Rao (died) by his LRs … Appellants And: Jaikumar M.Patny & others … Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY C.C.C.A.No.74 of 1992 JUDGMENT: This appeal is directed against the judgment dated 31.12.1990 in OS No.1028 of 1990 on the file of the II Additional Judge, City Civil Courts, Hyderabad, wherein, the suit filed by the appellants herein for specific performance of the agreement of sale dated 23.06.1975 was decreed in part granting alternative relief of refund of Rs.48,800/- paid by first defendant with interest at 12% per annum from the date of the suit and the relief of specific performance was refused. 2. Heard the learned counsel for the appellants and respondents. Perused the record. 3. The first appellant herein filed suit for specific performance with the averments, which are in brief as follows: The first defendant is the owner of the premises flats bearing Nos.2-4-518 and 2-4-520 situated in Ramgopalpet, Secunderabad. The plaintiff is a tenant in occupation of one of the portions of the said flats. On 05.06.1975 one broker by name Mohanlal approached the plaintiff and informed that first defendant was intending to sell flat Nos.518 and 520. The plaintiff negotiated with first defendant for purchase of the same for a consideration of Rs.60,000/- and the plaintiff paid Rs.10,000/- to first defendant as advance by way of cheque dated 12.06.1975 drawn on State Bank of Hyderabad, Secunderabad for two flats and obtained a receipt. Subsequently, agreement of sale dated 26.03.1975 was entered into embodying the terms, which were earlier agreed upon on 12.06.1975. Subsequently, plaintiff paid Rs.10,000/- on 20.12.1975, Rs.10,000/- on 25.03.1976, Rs.2,500/- on 11.7.1977, Rs.5,200/- on 22.10.1977, Rs.3,500/- on 11.03.1978 and Rs.7,600/- on 14.03.1978. Thus the plaintiff paid a total sum of Rs.48,800/- to first defendant out of Rs.60,000/- and the balance payable was only Rs.11,200/-. The plaintiff is ready and willing to pay the balance amount. In July 1975 defendants 2 and 3 filed suit against first defendant claiming that on 13.06.1975 first defendant entered into oral agreement with them to sell the said property i.e., flat Nos.518 and 520 and the flat Nos.517 and 519 and that first defendant received part of the sale consideration. The first defendant specifically pleaded in that suit that he received Rs.10,000/- from the plaintiff herein on 12.06.1975 and further sums thereafter towards sale consideration and that he executed agreement of sale in favour of the plaintiff on 23.06.1975 relating to flat Nos.518 and 520 and the rear flat in the ground floor and the land appurtenant thereto. The first defendant also pleaded in that suit that a similar agreement was entered into with one Motichand Jain relating to flat Nos.517 and 519. The defendants 2 and 3 in this suit are aware of the existence of agreement between first defendant and the plaintiff and also first defendant and Motichand Jain relating to other flats. In spite of the said notice and knowledge, plaintiff herein and Motichand Jain were added as parties to the said suit. The plaintiff was examined as a witness for first defendant. The said suit OS No.364 of 1975 was ultimately decreed on 31.08.1977. The first defendant preferred an appeal in CCCA No.117 of 1977 and the said appeal was dismissed by this Court on 03.08.1979. Thus, the defendants 2 and 3 were granted specific performance in their favour in respect of flat Nos.2-4-517 to 2-4-520. As the plaintiff was not the party to the suit OS No.364 of 1975, the judgment and decree therein are not binding on him. The agreement of sale in favour of the plaintiff relating to flat Nos.2-4-518 and 2-4-520 being prior in point of time to the alleged oral agreement pleaded by the defendants 2 and 3 is of no avail. The alleged transaction between the defendants 1 and 3 and 3rd defendant in respect of flat Nos.518 and 520 is neither true nor binding on the plaintiffs. Pending suit OS No.364 of 1975 it was not possible for the first defendant to execute a sale deed in favour of plaintiff relating to flat Nos.518 and 520. The first defendant by his letter dated 21.12.1977 agreed to execute sale deed after disposal of the proceedings instituted by defendants 2 and 3 with the judgment of the High Court, the said proceedings have since been disposed of on 03.08.1979. The first defendant has not properly prosecuted the said suit. Hence, the plaintiff is entitled for filing the present suit for specific performance in his own right in respect of flat Nos.518 and 520. 4. The first defendant remained ex-parte. The defendants 2 and 3 filed written statement contending in brief as follows: The decision in CCCA No.117 of 1977 on the file of the High Court constitutes res judicata between the parties. The alleged agreement of sale dated 12.06.1975 by first defendant in favour of plaintiff is not true, valid and binding. Even otherwise, the alleged agreement of sale dated 02.03.1975 being subsequent in point of time to the agreement of sale dated 03.06.1075 executed by first defendant in favour of defendants 2 and 3, the same is not valid and enforceable. The defendants 2 and 3 have not impleaded the plaintiff or Motichand Jain as parties to the suit OS No.364 of 1975 as they had knowledge of the alleged transaction between them and the first defendant. The defendants 2 and 3 notified about the agreement of sale in their favour in newspaper on 12.07.1975 by way of public notice. The plaintiff does not raise any objection. The plaintiff and his son were attending the trial of the suit OS No.364 of 1975 and watching its progress. In fact, plaintiff and Motichand Jain were contesting the suit on behalf of first defendant, but they did not choose to get themselves impleaded, though the plaintiff herein gave evidence in that suit and filed documents. Even in CCCA No.117 of 1977 the plaintiff’s son Ashok Kumar Pawar filed certain documents along with affidavit in CMP No.1172 of 1978 on behalf of first defendant seeking permission to file them as additional evidence and the said petition was rejected by this Court. Thus the plaintiff was fully aware of the proceedings in OS No.364 of 1975 and CCCA No.117 of 1977 as he participated in those proceedings on behalf of first defendant by deposing as a witness and also filing documents. The trial Court and also this Court held in OS No.364 of 1975 that it appears that the agreement in favour of Motichand Jain and the plaintiff herein were executed subsequent to 13.06.1975, but they have not come forward to get impleaded as parties. The above finding constitutes res judicata on the general principles. The plaintiff is estopped to raise the same plea in the suit, which he ought to have raised by impleading himself as a party in the earlier suit. The alleged agreement of sale by first defendant in favour of the plaintiff and the alleged payment made by plaintiff to first defendant are false. The alleged letter dated 21.12.1987 is created for the purpose of this suit by plaintiff and first defendant. The 2nd defendant was a tenant since 1961 and 3rd defendant was a tenant since 1948 in the flats bearing Nos.517, 518 and 520. The first defendant entered into an agreement of sale on 13.06.1975 with the defendants 2 and 3 offering to sell the flats bearing Nos.517 to 520 for Rs.1,00,000/-. The defendants 2 and 3 paid Rs.10,000/- each towards advance by way of two demand drafts dated 19.06.1975 in favour of first defendant as agreed. The transaction was negotiated and settled through one M.E. Naidu, a real estate consultant. To their surprise, defendants 2 and 3 received letter from first defendant on 09.07.1975 returning the demand drafts informing that first defendant has not decided to sell the flats. Immediately, defendants 2 and 3 questioned first defendant as to how he can back out from the agreement after informing the defendants through M.E. Naidu to get ready with the balance sale price. The first defendant informed that he has since received higher offers and asked the defendants to enhance the sale price by Rs.10,000/- Defendants 2 and 3 did not agree for the same. As the defendants 2 and 3 were informed by real estate consultant and agent M.E.Naidu that first defendant told him that he is having offer from Motichand Jain and therefore could not fulfill the agreement, the defendants 2 and 3 were constrained to file suit OS No.364 of 1975 before the III Additional Judge, Secunderabad for specific performance and the said suit was decreed. In the said suit, the plaintiff herein was examined as DW.1 putting forward a false case of prior agreement of sale in his favour with a view to get over the agreement in favour of defendants 2 and 3 herein. The trial Court disbelieved the evidence of plaintiff herein and held that he has not paid any amount to first defendant in pursuance of the said alleged agreement. Thus the plaintiff herein was well aware about all details of the earlier case, as the plaintiff himself was conducting the said suit on behalf of first defendant herein, but the plaintiff has not chosen to implead himself as a party to the said suit. The first defendant herein filed CCCA No.117 of 1977 and the said appeal was dismissed by this Court upholding the finding of the trial Court that first defendant herein has earlier agreed to sell the property to defendants 2 and 3 herein and therefore, he would not have entered into agreement in favour of the plaintiff herein and Motichand Jain prior to 13.06.1975. The defendants 2 and 3 were never aware of any agreement between the first defendant and the plaintiff. The first defendant did not give particulars of the said agreement or names of the purchasers to defendants 2 and 3 in his reply notice while repudiating alleged agreement in favour of the plaintiff herein and Motichand Jain are brought into existence subsequent to 13.06.1975. The High Court directed defendants 2 and 3 in the said suit to deposit Rs.1,00,000/- before the trial Court within one month and directed first defendant to execute registered sale deed within two months. The defendants 2 and 3 have accordingly deposited sale consideration of Rs.1,00,000/- on 29.08.1979. The plaintiff in collusion with first defendant filed present suit with a mala fide intention to defeat the earlier judgment and decree in favour of defendants 2 and 3, which have become final. The said judgment and decree in OS No.364 of 1975 as confirmed by the High Court in CCCA No.117 of 1977 constitutes as res judicata under general principles. The plaintiff is not entitled for the relief of specific performance, which is a discretionary relief. The remedy, if any for the plaintiff is only to seek alternative relief of return of advance money alleged to have been paid. 5. The defendants 2 and 3 filed additional written statement contending that without asking for cancellation of sale deed, the plaintiff cannot ask the defendants 2 and 3 to join first defendant in execution of the sale deed. 6. On the strength of the pleadings, the following issues and additional issue were settled for trial. 1. Whether the suit agreement is true and valid and binding on the defendants? 2. Does the judgment in OS No.364 of 1975 on the file of the III Additional Judge, City Civil Court, Secunderabad, constitute res judicata between the parties under the general principles of res judicata? 3. Whether the plaintiff is estopped from contending that the suit agreement is true? 4. Whether the plaintiff is entitled to the relief of specific performance? 5. To what relief? Additional issue: 1. Whether the plaintiff in the alternative is entitled for refund of the money as prayed for? 7. During trial, PWs.1 to 3 were examined and Exs.A.1 to A.10 were marked on behalf of the plaintiff. DWs.1 and 2 were examined and Exs.B.1 to B.19 were marked on behalf of the defendants. 8. On a consideration of the evidence available on record, the trial Court held that the plaintiff failed to prove the alleged agreement in his favour and defendants 2 and 3 were bona fide purchasers for valid consideration without notice of the alleged agreement in favour of the plaintiff, that the earlier judgment and decree in OS No.364 of 1975 as confirmed in CCCA No.117 of 1977 operates as judicial precedent against the plaintiff and first defendant, though not as res judicata; that the plaintiff is not entitled for the relief of specific performance. The trial Court further held that the relief of specific performance is barred by limitation, as the suit was filed beyond three years from the date of the alleged agreement dated 23.06.1975. The trial Court, however, held that the plaintiff is entitled for alternative relief of refund of the advance amount of Rs.48,800/- paid by him to first defendant and the said payments were admitted by first defendant. The suit was accordingly decreed directing the first defendant to refund the amount of Rs.48,800/- with interest at 12% per annum from the date of the suit, till realization and the relief of specific performance of the suit agreement, was dismissed. 9. Aggrieved by the same, the plaintiff filed the present appeal. During pendency of the appeal, appellant/plaintiff died and his legal representatives were impleaded as appellants 2 to 8. The 3rd respondent-defendant also died and his legal representatives were brought on record as respondents 9 and 10. 10. Learned counsel for the appellants would contend that the judgment in earlier suit OS No.364 of 1975 as confirmed by the High Court in CCCA No.117 of 1977 does not operate as res judicata, as the plaintiff herein was not a party to the said suit and the same was in fact observed in the judgment in CCCA No.117 of 1977 and having noticed the same, the trial Court erred in holding that the earlier judgment operates as judicial precedent against the plaintiff, though not as res judicata. Learned counsel for the appellants would also contend that there being no pleading nor any issue, the trial Court erred in holding that the suit is barred by limitation. He would therefore contend that as the earlier judgment is not binding on the plaintiff, the trial Court ought to have decreed the suit for the main relief of specific performance, instead of granting alternative relief of refund of advance amount. 11. Learned counsel for the respondents-defendants 2 and 3 on the other hand would contend that though the plaintiff was not a party to the earlier suit, he was very much aware of the pendency of the said suit, as he was virtually prosecuting the suit and also appeal on behalf of first defendant and the plaintiff himself gave evidence in that suit as DW.1 in support of first defendant. The trial Court and the appellate Court, however, disbelieved the evidence of plaintiff herein, who was examined as DW.1 in the earlier suit and granted decree in favour of defendants 2 and 3 herein for specific performance of the agreement dated 13.06.1975 executed in their favour by first defendant and the said judgment and decree have become final. He would further contend that it is only with a view to defeat the said judgment and decree, plaintiff and first defendant collusively brought the suit agreement of sale Ex.A.2 dated 23.06.1975 and filed present suit with a mala fide intention of depriving defendants 2 and 3 of the benefits of the earlier decree in their favour. Learned counsel for the respondents 2 and 3 would further contend that the suit is barred by limitation as it was filed on 07.10.1980 which is more than three years from the alleged agreement dated 23.06.1975 and the plea of limitation being a question of law can always be raised and considered by the Court at any stage, even if, no issue is framed in that regard. Learned counsel for the respondents-defendants 2 and 3 would further contend that the plaintiff is not entitled for discretionary relief of specific performance, as he has not come to the Court with clean hands and the suit is filed with a mala fide intention on the basis of the alleged agreement of sale Ex.A.2, which was brought into existence after dismissal of CCCA No.117 of 1977 only with a view to defeat the earlier judgment and decree in favour of defendants 2 and 3. 12. It is not disputed that first defendant was the original owner of flats bearing Nos.517 to 520 situated Ramgopalpet, Secunderabad. The defendants 2 and 3 filed suit OS No.364 of 1975 against first defendant for specific performance of an agreement of sale dated 13.06.1975 executed by first defendant in their favour in respect of the said flat Nos. 517 to 520. It is also not disputed that the plaintiff herein gave evidence in that suit as DW.1 and in support of first defendant herein. The plaintiff herein was, therefore, aware of the claim of defendants 2 and 3 herein based on the agreement of sale dated 13.06.1975. The plaintiff herein did not, however, get himself impleaded as a party to the earlier suit OS No.364 of 1975 in spite of having knowledge that the defendants 2 and 3 filed said suit in respect of all flat Nos. 517 to 520 claiming specific performance of an agreement of sale dated 13.06.1975 executed by first defendant in their favour. As rightly observed by the trial Court, the conduct of the plaintiff herein runs contra to natural course and human conduct as no prudent man placed in the position of plaintiff would keep quiet without taking any steps either to get impleaded in the earlier suit OS No.364 of 1975 or to enforce his alleged claim based on the suit agreement of sale Ex.A.2 dated 23.06.1975, if really, the said agreement were to be in existence at that time. On the other hand, the plaintiff curiously contends that he went on paying amounts towards sale price from time to time even after filing of suit OS No.364 of 1975 believing the words of first defendant that the agreement of sale dated 13.06.1975 put- forward by defendants 2 and 3 was not true and he was going to succeed in the suit. Ultimately, the trial Court in OS No.364 of 1975 upheld the truth and validity of the said agreement dated 13.06.1975 executed in favour of defendants 2 and 3 in respect of flat Nos.517 to 520 and rejected the contention of the first defendant and accordingly decreed the suit. The appeal preferred by D.1 in CCCA No.117 of 1977 was also dismissed on merits by this Court confirming the judgment and decree passed by the trial Court agreeing with the conclusion reached by the trial Court that the first defendant herein earlier agreed to sell the property to defendants 2 and 3 herein and therefore, he would not have entered into agreement in favour of plaintiff herein and Motichand Jain prior to 13.06.1975. It was further observed that the defendants 2 and 3 herein were never aware of agreement entered by first defendant with other parties. Even in the reply notice issued by first defendant repudiating agreement in favour of defendants 2 and 3, he has not disclosed the names of the other purchasers nor furnished the details of those transactions. It was also observed that the agreement in favour of plaintiff herein and Motichand Jain were executed subsequent to 13.06.1975. The said judgment and decree in OS No.364 of 1975 as confirmed in CCCA No.117 of 1977 have since become final, as directed by the Court, the defendants 2 and 3 have deposited the sale consideration of Rs.1,00,000/- on 29.08.1979 and obtained sale deed through Court. No doubt, the said judgment and decree in the earlier suit may not operate as res judicata as against the plaintiff herein, as he was not a party to the said suit. The fact, however, remains that the plaintiff was very much aware of the proceedings in the earlier suit and rival claims and contentions of first defendant on one hand and defendants 2 and 3 herein on the other in respect of self-same property and the plaintiff himself gave evidence as DW.1 in support of first defendant in the earlier suit. The fact also remains that the plaintiff’s evidence as DW.1 in the earlier suit was not accepted by the Courts and the contention of first defendant herein in the earlier suit was rejected and the suit filed by defendants 2 and 3 was decreed for specific performance and the said decree was confirmed in the appeal by the High Court. It is, therefore, not a case where the plaintiff can plead total ignorance of the earlier suit. 13. The first defendant remained ex-parte in that suit. Simply because, first defendant, who is executant of Ex.A.2 agreement, has not questioned the truth of the execution of the said document by filing written statement, the plaintiff would not get entitled for relief of specific performance. The specific case of defendants 2 and 3 is that it is only subsequent to dismissal of suit OS No.364 of 1975 that plaintiff and first defendant have collusively brought Ex.A.2 into existence only to defeat the decree granted in their favour in the earlier suit. The observations made in the earlier suit touching upon the conduct of first defendant and holding that he would not have executed any agreement in favour of any other person prior to 13.06.1975 and defendants 2 and 3 herein were not aware of existence of any such agreement by first defendant in favour of others whose names and particulars were not disclosed by first defendant himself, are certainly relevant in the present suit, though they may not technically operate as res judicata. That apart, the trial Court in the impugned judgment has elaborately discussed the evidence on record and considered the conduct of the parties and the probabilities of the case in proper perspective and rightly held that the alleged agreement Ex.A.2 dated 23.06.1975 was brought into existence by plaintiff and first defendant collusively subsequent to dismissal of suit OS No.364 of 1975 and there was no possibility of any agreement by first defendant in favour of the plaintiff prior to 13.06.1975. As rightly observed by the trial Court, if first defendant entered into agreement with the plaintiff on 12.06.1975 after receiving Ex.B.3 letter dated 19.06.1975 from defendants 2 and 3, first defendant would have repudiated the agreement with defendants 2 and 3. But till Ex.B.6 dated 08.06.1975, he did not return the drafts and there is no explanation offered by him as to why he kept quiet till 08.06.1975. After receiving Ex.B.3 letter with the drafts, first defendant has not chosen to disclose that he entered into agreement of sale with the plaintiff on 12.06.1975 and that it was reduced into writing on 23.06.1975. Even in reply Ex.B.6, first defendant has not disclosed the names of the plaintiff as purchaser nor did he furnish the details of the agreement with the plaintiff but vaguely stated that he already negotiated for sale. The first defendant also did not bother to give any reply to Ex.B.2 letter dated 05.07.1975 addressed by 2nd defendant to M.E. Naidu, a real estate consultant and agent, to defendants 2 and 3 marking copy to first defendant. Similarly, first defendant did not respond to Ex.B.7 letter dated 12.07.1975 copy of which was also marked to him by defendants 2 and 3. As rightly observed by the trial Court if really, first defendant entered into agreement with plaintiff on 12.06.1975 and formally reduced the same into writing on 23.06.1975, he would have certainly given reply