Regular Second Appeal No. 570 of 2004 1 In the High Court of Punjab and Haryana, at Chandigarh. Regular Second Appeal No. 570 of 2004 Date of Decision: 19.12.2008 Tarsem Lal and Another …Appellants Versus Devi Dial …Respondent CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA. Present: Mr. Ashok Singla, Advocate for the appellants. Mr. Arun Palli, Senior Advocate with Mr. Parminder Singh, Advocate for the respondent. Kanwaljit Singh Ahluwalia, J. Tarsem Lal son of Rattan Lal and Ashok Kumar son of Shiv Lal, both residents of Jaiton Mandi, District Faridkot, had instituted a suit for recovery of Rs.2,70,000/- on the ground that Devi Dial, respondent/defendant, on 19.8.1995 entered into an agreement to sell of vacant plot measuring 33’ X 165’, details of which were given in the head note of the plaint situated in Jaiton Mandi, for a sum of Rs.8,92,000/-. It was further pleaded that Rs.2,00,000/- was paid as earnest money by appellants/plaintiffs to the respondent/defendant. It was further agreed that Rs.4,92,000/- will be paid to the respondent/defendant on or before 18.11.1995 and the balance was to be paid at the time of execution of sale deed for which the date fixed was on or before 31.3.1996. It was further stated that at the time of Regular Second Appeal No. 570 of 2004 2 agreement to sell, an assurance was given by respondent/defendant that he was exclusive owner in possession of the plot and the same is free from all encumbrances. It has been further stated in the plaint that in November 1995, when payment of Rs.4,92,000/- was due, the appellant/plaintiffs requested the respondent/defendant to show the document of title regarding the plot in dispute upon which time was sought by the respondent/defendant and as such amount was not paid and received. According to appellants/plaintiffs, the respondent/defendant was neither exclusive owner nor in possession of the plot in dispute. It was further stated that respondent/defendant was co-sharer to the extent of 1/10th share of the land measuring 13 kanals 19 marlas and his share was only to the extent of 2 kanals. Out of two kanals, he had already sold 17 marlas of land to Gurdit Singh and Lachhman Singh and 13.1/3rd marlas to Nazar Singh vide sale deeds dated 28.7.1993 and 29.4.1993, respectively. In this way he sold the land measuring 30.1/3rd marlas. Therefore, the respondent/defendant was not owner of 1 kanal of land. The appellants/plaintiffs further claimed that the respondent/defendant was co-sharer and his khatta being joint was not partitioned. It was further stated that on 27.3.1996, the date of execution of agreement to sell was extended upto 8.4.1996 and till then the respondent/defendant had not satisfied the appellants/plaintiffs regarding his title over the suit property. Notice was served upon the appellants/plaintiffs through Mr. B.D .Kumar, Advocate, on 27.1.1997 and another notice was also served upon them on 19.4.1997, which were replied by the appellants/plaintiffs on 2.5.1997. In response to the reply filed by the appellants/plaintiffs, the Regular Second Appeal No. 570 of 2004 3 respondent/defendant also filed reply on 21.5.1997 in which he stated that he had purchased the property and mutation had been sanctioned regarding the plot in dispute. It was further stated therein that copy of the sale deed and mutation had already been shown to the appellants/plaintiffs but this fact had been denied in the plaint by the appellants/plaintiffs. The respondent/defendant in his response had already sent a copy of Jamabandi in which a reference of one mutation No. 9591 on the basis of sale deed executed by Rajinder Parshad in favour of respondent/defendant was made. The appellants/plaintiffs submitted in the plaint that they came to know later that mutation was rejected on 30.3.1997 as a few co-sharers were partners of M/s Dashmesh Paper Mills, Jaiton and title deed of the property was deposited by them with the State Bank of Patiala by way of collateral security due to loan has been raised by M/s Dashmesh Paper Mills, Jaiton was sanctioned and the original title deed was with the bank. It was further stated that the land has not been partitioned. The respondent/defendant had already sold the best part of the land out of the joint holding and there was litigation between Rajinder Parshad and Kulwant Rai and, therefore, due to litigation, principle of lis pendence is to operate and, therefore, terms of the agreement to sell have been violated by the respondent/defendant. Therefore, the appellants/plaintiffs were entitled to a refund of Rs.2,00,000/- along with interest at the rate of 18% per annum. Notice of the suit was issued. The respondent/defendant caused appearance; filed written statement taking a preliminary objection that suit for specific Regular Second Appeal No. 570 of 2004 4 performance of the agreement to sell dated 19.8.1995 ought to have been filed. A further preliminary objection was taken that respondent/defendant was always ready and willing to perform his part of the contract and for that he appeared before the Sub Registrar, Jaiton, on 8.4.1996, date fixed for execution of sale deed. It was further submitted in the written statement that the respondent/defendant is the owner in possession of the plot in dispute at the relevant time and the fact that there was no encumbrance of any kind on the plot in question was specifically taken. It was further stated that the respondent/defendant had a transferable title as per terms & conditions of the agreement dated 19.8.1995. It was further stated therein that the date of execution of agreement to sell was extended from 27.3.1996 upto 8.4.1996. It was further stated that the date of execution of agreement to sell was extended because the respondent/defendant had purchased the suit property from Rajinder Parshad vide registered sale deed dated 22.3.1996. Therefore, he being the exclusive owner in possession of the plot could execute the sale deed. In the written statement, it was specifically stated that the mutation was sanctioned in favour of the respondent/defendant and the sale deed was executed on 22.3.1996. It was further submitted that no litigation of any kind was pending against him. Therefore, it was pleaded that there was breach on the part of the appellants/plaintiffs and they are not entitled to reimbursement of any kind. Replication to the written statement was filed by the appellants/plaintiffs in which submissions made in the plaint were reiterated. After the completion of pleadings, learned trial Court framed Regular Second Appeal No. 570 of 2004 5 the following issues:- 1. Whether the plaintiffs are entitled to recovery of Rs.2,70,000/-, as alleged from the defendant? OPP 2. Whether the suit in the present form is not maintainable, as alleged? OPD. 3. Whether the defendant remained ready and willing and is still ready and willing to perform his part of the contract, if so, its effect? OPD 4. Whether the defendant is owner of the disputed property, as alleged? OPD 5. Relief. Trial Court decreed the suit of the appellants/plaintiffs. Trial Court held that since execution of agreement to sell and payment of Rs.2,00,000/- is admitted by the parties and on the date of execution of the agreement to sell Ex.P1, the respondent/defendant was not owner in possession of the suit property, therefore, he could not execute agreement to sell and since the land was not joint, there was no partition and at the time of execution of agreement to sell, he was not holding any share to the extent of 1 kanal in his khata. Therefore, the appellants/plaintiffs are entitled to a refund of amount which has been misrepresentation on the part of the respondent/defendant. Trial Court further held that the fact that before the date of execution of the sale deed Ex.DW2/A, respondent/defendant became owner of the plot is of no consequence. Aggrieved against the same, respondent/defendant preferred an appeal and in the same, findings returned by learned trial Court were Regular Second Appeal No. 570 of 2004 6 reversed by learned District Judge, Faridkot. Learned lower Appellate Court held that agreement Ex.P1 executed on 19.8.1995, tally and marry with the boundaries of the plot as given in the sale deed Ex.DW2/A. It was further held that on 22.3.1996, respondent/defendant became owner in possession of the property, therefore, before the period fixed for execution of the sale deed, the plot was free from any encumbrance and the respondent/defendant had a transferable title in question. Learned lower Appellate Court further relied upon Ex.D2, reply given by the respondent/defendant through his counsel to the notice of the appellants/plaintiffs dated 2.5.1997, in which it was stated that he is ready and willing to execute the sale deed and, therefore, the appellants/plaintiffs should execute the sale deed within 15 days. Having held so, learned lower Appellate Court concluded that the plaintiffs were at fault for not getting the sale deed executed from the defendant as per terms of agreement and, therefore, suit is not maintainable and the plaintiffs should have filed the suit for specific performance of the agreement or in the alternative for the recovery of amount paid under the agreement for the fault in the title of the defendant regarding the plot in dispute as mentioned in the agreements Ex.P1 and Ex.P2. Findings of learned lower Appellate Court are being challenged by Mr. Ashok Singla, Advocate, appearing for the appellants/plaintiffs before me. It has been canvassed by Mr. Singla that from the day when the agreement to sell Ex.P1 was executed on 19.8.1995, Regular Second Appeal No. 570 of 2004 7 respondent/defendant had no title over the property as he had already sold the property to the extent of his share. Therefore, this material aspect has been ignored by learned lower Appellate Court. He further submitted that since the account (khata) of the land was joint and there was no partition, therefore, respondent/defendant could not sell identifiable plot in favour of the appellants/plaintiffs. Therefore, the appellants/plaintiffs have rightly not pursued the agreement to sell and their only remedy was to seek refund of the amount by filing of the recovery suit. It was further stated that since the title deed has been deposited with the State Bank of Patiala and there was litigation pending with the bank, therefore, there was no clear title of the respondent/defendant. I am not impressed by the contentions raised by learned counsel for the appellants/plaintiffs as during the course of his arguments for sake of convenience, important and vital dates, details and their effect was skipped. It is not disputed that an agreement to sell was executed on 19.8.1995, according to which last date for execution of agreement to sell was 31.3.1996. From perusal of evidence and pleadings, it is evident that the respondent/defendant was not taking identifiable and valid title, therefore, notices were being issued by the appellants/plaintiffs. What is being missed and, therefore, it is noticed here that during the subsistence of agreement to sell, on 22.3.1996 vide sale deed Ex.DW2/A, the respondent/defendant in order to give effect to Regular Second Appeal No. 570 of 2004 8 agreement to sell dated 19.8.1995, which was valid till 31.3.1996 acquired plot vide sale deed dated 22.3.1996 in his favour. It is also not disputed that thereafter five days later vide a writing dated 27.3.1996 Ex.P2 the date of execution of agreement to sell was extended. It has been rightly stated by learned counsel for the respondent that it was not mere extension of time vide Ex.P2, the terms & conditions were also varied. As per Ex.P2, sale deed was to be executed on or before 8.4.1996. When Ex.P2 was executed on 27.3.1996, it was expected, that the appellants/plaintiffs who were making a grievance that the respondent/defendant had no title at the time of extension of time on 27.3.1996, ought to have verified, asked and satisfied themselves that the respondent/defendant has acquired the title, therefore, sale deed in favour of the respondent/defendant vide Ex.DW2/A on 22.3.1996 assume importance. Document Ex.P2 vide which not only date was extended but terms were also varied was a fresh composite agreement to sell. Therefore, it is natural, probable and convincing that Ex.P2 was executed after the appellants/plaintiffs had held a thorough enquiry and had satisfied themselves. Therefore, it has been rightly held by learned lower Appellate Court that the remedy for the appellants/plaintiffs was to institute a suit for specific performance. In view of the subsequent writing Ex.P2 dated 27.3.1996 all other arguments that the same was subject matter of litigation with the bank will pale into insignificance. Reply to notice dated 2.5.1997 Ex.D2, in which it was stated that the respondent/defendant is ready and willing to perform his part of agreement. Dasti notice sent by respondent/defendant was also accompanied by copy of sanctioned Regular Second Appeal No. 570 of 2004 9 mutation. Learned lower Appellate Court had rightly held that the boundaries of the plot has been given in the sale deed Ex.DW2/A tally and marry with the boundaries specified in agreement to sell Ex.P1. As noticed by learned lower Appellate Court, PW.2 Tarsem Lal has admitted that he had seen the plot purchased by the respondent/defendant and the same was having foundations of the boundary wall. Therefore, the argument that that khata was not partitioned is also not available to the appellants/plaintiffs. I find no infirmity in the findings returned by learned lower Appellate Court. Therefore, an attempt of learned counsel for the appellants/plaintiffs to formulate question of law at the time of execution of agreement to sell Ex.P1, there was misrepresentation on the part of respondent/defendant and, therefore, appellants/plaintiffs are unable to seek refund of earnest money as discussed above is not made out as subsequent writing dated 27.3.1996 Ex.P2 cannot be ignored taking into consideration sale deed Ex.DW2/A dated 22.3.1996 in favour of respondent/defendant. Therefore, on application of facts and circumstances of the case, no substantial question of law can be formulated which require consideration of this Court. Therefore, I find no merit in the present appeal and the same is dismissed upholding the findings returned by learned lower Appellate Court. (Kanwaljit Singh Ahluwalia) Judge December 19, 2008 “DK”