IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. R.S.A. No.3647 of 2009 (O&M) Date of Decision: 22.2.2010 Rajinder Kumar Gupta. ....... Appellant. Versus Smt.Rampyari alias Shakuntla Kumari and another. ....... Respondents. CORAM: HON'BLE MR.JUSTICE MAHESH GROVER .... Present: Shri Shiv Kumar, Advocate for the appellant. .... 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. The plaintiff is in second appeal assailing the judgments and decrees dated 27.10.2007 and 28.1.2009 passed respectively by Civil Judge (Junior Division),Palwal (hereinafter described as `the trial Court') and the Additional District Judge, Faridabad (referred to hereinafter as `the first appellate Court'). A suit for specific performance of contract was filed by the plaintiff seeking enforcement of agreement dated 6.3.1996 executed between him and Rattan Lal, vendor and owner of the suit property through his general power of attorney. The sale consideration was fixed at R.S.A.No.3647 of 2009 (O&M) -2- .... Rs.1,50,000/- per acre, out of which a sum of Rs.25,000/- was received as earnest money by the attorney of the vendor on the date of execution of the agreement itself, whereas another sums of Rs.50,000/- and Rs.30,000/- were received by him on 15.7.1996 and 20.11.1996 against the duly executed receipts. No time limit was fixed for execution of the sale deed as the suit property was in possession of the mortgagees and tenants and it was agreed that the vendor would execute the sale deed after obtaining possession of the suit property. It was pleaded that the plaintiff was always ready and willing to perform his part of contract, but the vendor and his attorney failed to execute the sale deed. It was further pleaded that a part of the suit property was subsequently sold to one Sudhir Kumar (impleaded as defendant no.2 in the suit) vide registered sale deed dated 4.9.1998. This sale was alleged to be mala fide and the subsequent vendee was stated to be not a bona fide purchaser as he had knowledge of the agreement to sale in favour of the plaintiff. The vendor, upon notice, appeared and filed written statement admitting the execution of the agreement to sell in favour of the plaintiff and also admitted the receipt of earnest money on 6.3.1996, but denied the receipt of subsequent amounts and alleged that these receipts are forged. Regarding execution of the sale deed, it was pleaded that the plaintiff had failed to get the sale deed executed and the suit was filed merely to extract money. The sale of part of the suit property in favour of defendant no.2 was defended by the vendor. The written statement was amended by the vendor to admit the R.S.A.No.3647 of 2009 (O&M) -3- .... receipt of the earnest money on 6.3.1996 and subsequent two amounts as stated by the plaintiff. Defendant no.2, in his written statement, defended the sale deed in his favour and pleaded that he was a bona fide purchaser. On the pleadings of the parties, the following issues were framed:- 1. Whether defendant no.1 through his Attorney agreed to sell the suit land to the plaintiff at the rate of Rs.1,50,000/- per acre vide agreement dt.6.3.96 and received Rs.25,000/- as earnest money on the same date?OPP 2. Whether defendant no.1 through his attorney received Rs.50,000/- on 1.5.7.1996 and another Rs.30,000/- on 20.11.96 out of the remaining sale consideration vide separate receipts?OPP 3. Whether sale deed dated 4.9.1998 executed by defendant no.1 through his attorney in favour of the defendant no.2 regarding land detailed in paraNo.2-B of the plaint is null, illegal, and void and so is liable to be set aside?OPP 4. Whether plaintiff has always been ready and willing and is still ready and willing to perform his part of contract?OPP 5. Whether plaintiff is entitled to the decree of specific performance of contract?OPP 6. whether suit is collusive between plaintiff, defendantno.1 and his attorney?OPD2 R.S.A.No.3647 of 2009 (O&M) -4- .... 7. Whether defendantno.2 is bona fide purchaser of the suit land, detailed in para No.2B of the plaint for valuable consideration?OPD2 8. Whether suit is not maintainable?OPD 9. Whether suit is false and frivolous and defendant no.2 is entitled to special costs?OPD 10. Whether plaintiff has got no locus standi and cause of action to file the present suit?OPD 11. Whether plaintiff is estopped by his acts and conduct to bring the instant suit?OPD 12. Relief. The trial Court decided issue nos. 1, 2 and 4 in favour of the plaintiff, whereas issue nos. 3, 5 and 7 against were decided against him. It further decided issue nos. 6 and 8 to 11 against the defendants and consequently, dismissed the suit for specific performance,but passed a decree of recovery of Rs.1,05,000/- along with interest at the rate of 15% per annum. The appeal of the plaintiff was also dismissed by the first appellate Court, which found no scope for interference in the findings of the trial Court on issue nos. 1, 2 and 6 as the challenge was confined to the extent of only assailing the findings of the trial Court relating to holding of defendant no.2 to be a bona fide purchaser in respect of the part of the suit property. After a threadbare discussion, the first appellate Court concluded that defendant no.2 had purchased the land in good faith for valuable consideration and without notice of the agreement to sell dated 6.3.1996. R.S.A.No.3647 of 2009 (O&M) -5- .... Learned counsel for the appellant has contended that once the execution of the agreement to sell is admitted and receipt of earnest money was not denied, then there was no option but to execute the sale deed and defendant no.2 could not have been held to be a bona fide purchaser. I have thoughtfully considered the aforesaid contention and have perused the impugned judgments. The first appellate Court has given sufficient reasons to opine that defendant no.2 had no notice of the agreement to sell in favour of the plaintiff at the time of purchasing the part of the suit property vide sale deed dated 4.9.1998. The agreement to sell dated 6.3.1996 was an unregistered document and was not scribed by a regular scribe. In this view of the matter when defendant no.2 did not have any notice regarding the agreement to sell, his status as bona fide purchaser cannot be doubted. The validity of the agreement to sell in favour of the plaintiff stands established and has not been questioned by the defendants. The passing of part of the sale consideration has also been admitted. However, there is nothing on record to show as to whether the plaintiff had insisted upon the execution of the sale deed from the year 1996 to 1998 when the sale deed in respect of part of the suit property was executed in favour of defendant no.2. His plea that the sale deed was to be executed after the impediments of the mortgage and tenancy were removed could have been accepted if he had been able to show that there were some efforts made by him to get the sale deed executed. In any eventuality, defendant no.2 has been held to be a bona fide purchaser of the part of the suit property and, thus, the agreement to sell in R.S.A.No.3647 of 2009 (O&M) -6- .... favour of the plaintiff has been rendered inexecutable. In my opinion, the trial Court was right in resorting to the granting of a decree for recovery of the earnest money. The Supreme Court in Rajeshwari Versus Puran Indoria, (2005) 7 S.C.C. 60 has held that whether or not discretion under Section 20 of the Specific Relief Act,1963 (for short, `the Act') has been exercised, is a question of law. The relevant observations as are extracted under Head B of the aforesaid judgment, are reproduced below:- “....... Though an order in exercise of discretion may not involve a substantial question of law, the question whether a court could, in law, exercise a discretion at all for decreeing specific performance, could be a question of law that substantially affects the rights of parties in that suit.” Keeping in view the aforesaid observations and the fact that defendant no.2 was held to be the bona fide purchaser of the part of the suit property rendering the agreement to sell in favour of the plaintiff inexecutable, I am of the opinion that the discretion was rightly exercised by the trial Court under Section 20 of the Act, as affirmed by the first appellate Court. Accordingly, I do not find any ground to interfere with the impugned judgment & decrees and the appeal, being devoid of any merit, is dismissed. February 22,2010 ( Mahesh Grover ) “SCM” Judge