RSA No.1634 of 1990 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.1634 of 1990 Date of Decision: 23.03.2010 Harbans Singh (Dead) through LRs. ..Appellant Vs. Rajinder Singh alias Kartar Singh & Ors. ..Respondent Coram: Hon'ble Mr. Justice Vinod K.Sharma Present: Mr.Sanjay Majithia, Sr. Advocate, with Mr.Shailendra Sharma, Advocate, for the appellant. Mr.Arun Jain, Sr. Advocate, with Mr.Sandeep Punchhi & Mr.J.S.Chandail, Advocate, for respondent No.1. Mr.Sanjeev Gupta, Advocate, for respondents No.2 & 3.. --- 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 Digest? --- Vinod K.Sharma,J. This is defendants' regular second appeal against the judgment and decree dated 7.5.1990, passed by the learned District Judge, Faridkot, RSA No.1634 of 1990 2 decreeing the suit filed by the plaintiff/respondent for possession by way of specific performance of agreement to sell dated 10.6.1977. Plaintiff Rajinder Singh alias Kartar Singh filed a suit for possession by specific performance of agreement to sell dated 10.6.1977 for sale of land measuring 74 kanals situated at village Langiana Nawan Tehsil Moga. The property in dispute was under the ownership of Jiwan son of Badan Singh. On his death property was succeeded by Smt. Gurdev Kaur and Smt. Kartar Kaur defendants who were his daughters. One Pritam Singh and Malkiat Singh set up a Will claiming inheritance of Jiwan Singh. Said litigation ended in favour of defendants No.1 and 2 Smt. Gurdev Kaur and Smt. Kartar Kaur. The case of the plaintiff was that defendants No.1 and 2 agreed to sell suit land to the plaintiff at the rate of Rs.6000/- (Rupees six thousand only) per acre. Sale deed was agreed to be executed after one year of the decision of civil and revenue litigation regarding suit land. Sale expenses were agreed to be borne by the plaintiff. Plaintiff claimed that a sum of Rs.15,500/- (Rupees fifteen thousand and five hundred only) was paid to defendants No.1 and 2 as earnest money. There was stipulation in the agreement that in case of default by the plaintiff, the earnest money would be forfeited and in case of default by the vendor, the plaintiff would be entitled to specific performance of the agreement. It was also pleaded case of the plaintiff that the defendants were also liable to refund the earnest money and pay damages to the tune of Rs.15,500/- (Rupees fifteen thousand and five hundred only). The case of the plaintiff/respondent was that defendants No.1 and 2 took RSA No.1634 of 1990 3 proprietary possession from Malkiat Singh and Pritam Singh under the orders of the court. However, they could not get actual possession of the land as the learned court was pleased to hold that Niranjan Singh, father of Pritam Singh and Malkiat Singh was in possession as a tenant. As the date of agreement was to expire, therefore, on 8.6.1980 defendants No.1 and 2 received another sum of Rs.7000/- (Rupees seven thousand only) and extended the time for execution of the sale deed. It was stipulated therein that after getting possession from Niranjan Singh, defendants No.1 and 2 would execute the sale deed. Ejectment application moved by the defendants No.1 and 2 against Niranjan Singh was allowed and possession was given to defendants No.1 and 2 in February, 1983. The plaintiff/respondent claimed that he was always ready and willing and still ready and willing to perform his part of contract. It was also the case of the plaintiff that defendant No.3 had filed a suit for specific performance of agreement regarding the land in suit on the basis of forged agreement of sale. Plaintiff denied the legality and validity of the agreement in favour of defendant No.3. The case of the plaintiff, therefore, was that as the defendants No.1 and 2 refused to accept his request to execute the sale deed, the suit was filed. In the alternative it was prayed that the plaintiff was entitled to refund of earnest money along with damages. In the written statement defendants No.1 and 2 admitted the averments made by the plaintiff. They showed their intention to execute the RSA No.1634 of 1990 4 sale deed but showed their inability in view of the restraint order passed by the court of Shri M.M.Bhalla, Additional Senior Sub Judge, Moga, in a suit filed by the appellant/defendant No.3. Appellant/defendant No.3 filed separate written statement by pleading therein that defendants No.1 and 2 had entered into an agreement of sale dated 1.1.1979. On 1.1.1979 defendants No.1 and 2 appointed one Malkiat Singh as their Mukhtiar-i-am, wherein it was admitted that an agreement was executed in favour of appellant/defendant No.3. Litigation of defendants No.1 and 2 with Niranjan Singh was also mentioned. It was pleaded by appellant/defendant No.3 that tenant was evicted vide order dated 22.12.1980 and appeal against the said order was dismissed on 20.5.1981. Revision was also dismissed on 3.11.1982. It was pleaded that in pursuance to the agreement dated 1.1.1979 sale deed could not be executed on account of above mentioned litigation. However, with the consent of the parties another agreement of sale dated 6.1.1981 was executed between the parties, which was followed by another agreement of sale on 27.11.1981. This was for the reason that defendants No.1 and 2 were not able to get possession from the tenant. Appellant/defendant No.3, therefore, filed a suit for possession to enforce the agreement dated 27.11.1981. Said suit was said to be pending in court. It was the case of the appellant/defendant No.3, that the present suit was filed at the instance of defendants No.1 and 2 and was collusive suit between the parties. It was pleaded case of the appellant that the suit has been filed to defeat the claim of the defendant under the agreement RSA No.1634 of 1990 5 dated 10.6.1977. Agreement to sell in favour of the plaintiff/respondent was said to be bogus, fabricated and collusive to defeat the claim of appellant/defendant No.3. On the pleadings of the parties learned trial court framed the following issues:- 1. Whether defendants No.1 and 2 agreed to sell the suit land to the plaintiff? If so, when & on what terms? OPP 2. Whether defendant No.1 & 2 agreed to sell the suit land to defendant No.3? If so when & on what terms? OPD 3. Whether the suit of the plaintiff is collusive with defendant No.1 & 2? OPD 4. Whether the present suit is liable to be stayed? OPD 5. Relief. On appreciation of evidence, learned trial court held, that defendants No.1 and 2 agreed to sell, the suit land to the plaintiff vide agreement to sell Ex.P.1, as its execution was admitted by defendant Nos.1 and 2 in their written statement. The learned trial court also took note of the fact that besides admission of defendants No.1 and 2, plaintiff/ respondent had appeared in the witness box to prove the agreement and also examined Harjit Singh PW 3 and Shashi Puri PW 4. The witnesses examined also proved the payment of Rs.15,500/- (Rupees fifteen thousand and five hundred only) at the time of execution of the agreement and Rs.7000/- (Rupees seven thousand only) on 8.6.1980. Agreement was held to be neither fabricated nor forged document, RSA No.1634 of 1990 6 nor such presumption could be drawn merely on the basis of relationship, between the parties. The learned trial court also held that the agreement could not be said to have been executed to defeat the right of defendant No.3. Issue No.1, therefore, was decided in favour of the plaintiff and against defendants. Issues No.2 and 3 were taken up together. On issues No.2 and 3, learned trial court held that the agreement dated 27.11.1981 i.e. Ex.D.5 also stood duly proved, as the suit on the basis of said agreement stood already decreed, in favour of the appellant/defendant No.3. Question, therefore, considered was whether the agreement dated 10.6.1977 executed in favour of the plaintiff/respondent, could be given priority to the subsequent agreement of sale and sale deed, in favour of defendant No.3. This question was answered in negative against the plaintiff. Reason for coming to this conclusion was that, learned trial court, held that the plaintiff/respondent was not keen to get the sale deed executed, as he failed to show, his readiness and willingness to get the sale deed executed from Smt.Kartar Kaur and Smt.Gurdev Kaur. Whereas, on the contrary the appellant had filed a suit for specific performance. The learned trial court did not rule out the possibility of the plaintiff, having filed the present suit in collusion with Smt. Kartar Kaur defendant who was his relative. The learned trial court also did not believe the version of the plaintiff/respondent, that he was not aware of the agreement in favour of RSA No.1634 of 1990 7 defendant No.3. The learned trial court also held that if defendants No.1 and 2 were ready to execute the sale deed, in favour of the plaintiff/respondent there was no necessity to file the present suit, as he could get the sale deed executed through defendants No.1 and 2. The learned trial court by taking into consideration other evidence on record, decided issues No.2 and 3 against the plaintiff, and held that defendants No.1 and 2 had agreed to sell the suit land to defendant No.3, and that the suit filed by the plaintiff was collusive. Issue No.4 was not pressed, but in view of the admission of defendants No.1 and 2, a decree for refund of Rs.22500/- (Rupees twenty two thousand and five hundred only), with proportionate costs along with interest at the rate of 6 per cent per annum, was passed in favour of the plaintiff. Plaintiff filed appeal, against the judgment and decree passed by the learned trial court, to challenge the findings on issues No.2 and 3. Learned lower appellate court, accepted the contention of the plaintiff/respondent, that the agreement in his favour being prior in time, which stood duly proved, therefore, plaintiff had the right to specific performance of the contract, in preference to appellant/defendant No.3, in whose favour the agreement to sell was of later date. Learned lower appellate court did not accept the contention of the learned counsel for appellant/defendant No.3 that agreements Ex.P.1 and P.2 were fictitious document. Learned lower appellate court observed RSA No.1634 of 1990 8 that appellant/defendant No.3, had not challenged the findings of learned trial court on issue No.1. However, learned lower appellate court, in view of provisions of Order 41 Rule 22 of the Code of Civil Procedure considered the contention raised by learned counsel for appellant/defendant No.3, to challenge the finding on issue No.1, with regard to the agreements Ex.P.1 and P.2. Learned lower appellate court did not agree with the contentions raised. Learned lower appellate court held that agreements Ex.P.1 and P.2, could not be said to be collusive between the parties. The contention of the learned counsel for the appellant before the learned lower appellate court, that the court while granting relief of specific performance was required to see the motive behind the litigation, was negatived, in view of findings of the learned lower appellate court holding that Ex.P.1 and P.2 were not fictitious documents. Learned lower appellate court also held that filing of suit by defendant No.3, prior in time was of no consequence. Learned lower appellate court also held, that the suit filed by defendant No.3, was defective as plaintiff/respondent was not made party in the suit, in spite of having come to know, that the suit had been filed by the plaintiff/respondent, for specific performance of agreement. In support of the findings that subsequent transferee is bound by the prior agreement, the learned lower appellate court relied upon RSA No.1634 of 1990 9 Section 19 of the Specific Relief Act. Learned lower appellate court also held that the appellant was aware of the agreement to sell, in favour of the plaintiff, as the suit was filed by the plaintiff/respondent on 8.6.1983, in which appellant defendant No.3 was joined as party. Sale deed in favour of Harbans Singh appellant was dated 21.7.1986 i.e. more than 3 years, after the institution of the suit. Learned lower appellate court further held that appellant/defendant No.3, had taken the plea of bona fide transferee without notice. Learned lower appellate court also held that merely because suit of subsequent vendee is decreed, first, is of no consequence, as the first vendee was still entitled to the decree of specific performance. Reliance in support of this finding was placed on the judgment of this court in the case of Balwant Singh Vs. Labh Chand 1988 PLJ 224. Learned lower appellate court, took note of the fact that defendants No.1 and 2 while appearing in the witness box, had categorically stated that they were willing to execute the sale deed in favour of the plaintiff/respondent who was also ready and willing to perform his part of contract. It was only on account of restraint order passed by the court, that the sale deed could not be executed. Learned lower appellate court held, that in fact, Smt. Gurdev Kaur had colluded with appellant/defendant No.3, in view of document RSA No.1634 of 1990 10 Ex.D.6, as he appeared as her witness in proceedings for correction of Khasra Girdawari. Defendants No.1 and 2 did not prefer any appeal against the judgment and decree passed in favour of the appellant/defendant No.3. Plea of appellant/defendant No.3, that the court should not interfere with the discretionary relief, granted by the trial court, was also rejected on the ground that the finding of the learned trial court was not based on any evidence. In view of the findings referred to above and by holding that the plaintiff/respondent, had right to get agreement specifically enforced by the learned court, being prior in time, allowed the appeal and modified the judgment and decree passed by the learned trial court, by ordering the specific performance of the contract. Mr.Sanjay Majithia, learned senior counsel appearing on behalf of the appellant, raised following substantial questions of law for consideration by this court:- 1. Whether learned lower appellate court was bound to meet the reasons given by the trial court before reversing the finding of the learned trial court 2. Whether the learned lower appellate court could interfere with the exercise of discretion by the learned trial court in granting alternative relief of recovery of earnest money? 3. Whether a party was entitled to decree without filing, an appeal or cross objection? RSA No.1634 of 1990 11 4. Whether the learned lower appellate court could decree the suit, merely on the ground that agreement in favour of the plaintiff/respondent, was prior in time without considering the question of bona fide purchase, without notice? In support of the first substantial question of law, learned senior counsel for the appellant, vehemently contended, that the learned trial court had declined to give priority to the plaintiff/respondent, over the sale deed executed in favour of the appellant, for the reason that the plaintiff/ respondent was not keen to get the sale deed executed in his favour as he had failed to show his readiness and willingness to get the sale deed executed, in his favour from defendants No. 1 and 2. Whereas, on the contrary appellant/defendant No.3, had filed a suit on 13.1.1983 which was decreed on 3.3.1986. The plaintiff/respondent on the other hand, had filed suit only on 7.6.1983 i.e. after filing of suit by defendant No.3. Therefore, in view of proved fact, the possibility of collusion was rightly presumed, by the learned trial court. The learned trial court, had not accepted the contention of the plaintiff/respondent, that the sale could not be specifically enforced, as possession could not be taken by defendants No.1 and 2, from the tenant. Learned trial court had also held, that it was not possible to believe, that the agreement to sell in favour of the appellant, was not in the knowledge of RSA No.1634 of 1990 12 the plaintiff/respondent, because of plaintiff's relationship with vendor. The contention of the learned senior counsel for the appellant, therefore, was that the finding of collusion, was reversed by the learned lower appellate court, without meeting with the reasons given by the learned trial court. It is contended, that in view of the law laid down by this court in Gurinderjit Singh Vs. Gurdip Singh & Ors., AIR 1972 Punjab & Haryana 322, first substantial question of law, deserves to be answered in favour of the appellant. On consideration, I find no force in this contention. The learned lower appellate court, while reversing the finding gave good reasons, by recording, that suit was filed by the appellant on 13.1.1983, whereas plaintiff/respondent filed suit on 8.6.1983. Merely by filing a suit earlier in time, the appellant did not get any preferential right than plaintiff/ respondent, nor presumption of collusion could be drawn as held by learned trial court. Learned lower appellate court placed reliance, on Section 19 of the Specific Relief Act, to reverse the finding of the learned trial court. Learned lower appellate court also took note of the fact, that even the appellant was impleaded as a party, but he failed to take plea of bona fide purchaser, for consideration without notice. It cannot be said that the learned lower appellate court, had not met with the reasons given by the learned trial court while reversing the findings, so as to decide the substantial question of law in favour of the appellant. RSA No.1634 of 1990 13 It may also be noticed that learned lower appellate court, also recorded a finding of fact, that the plaintiff/respondent was willing to perform his part of contract but the sale deed could not be executed, in spite of the consent of defendants No.1 & 2, as there was an order of injunction, against the execution of the sale deed. The first substantial question of law is answered against the appellant, by holding that the learned lower appellate court gave good reasons, to reverse the findings of the learned trial court. On the second substantial question of law, learned senior counsel, appearing on behalf of the appellant, contended that learned lower appellate court committed an error, in interfering with the discretion exercised by the learned trial court. The contention of the learned senior counsel for the appellant was, that once the learned trial court on the facts and circumstances of the case, had granted decree of refund of earnest money in favour of the plaintiff, there was no reason for the learned lower appellate court, to have interfered with the discretion exercised by the learned trial court. In support of this contention, that relief of specific performance is discretionary relief, learned senior counsel appearing on behalf of the appellant placed reliance on the judgment of Hon'ble Supreme Court in the case of Manjunath Anandappa Urf. Shivappa Hanasi Vs. Tammanasa & Ors., 2003 (2) RCR (Civil) 713, wherein Hon'ble Supreme Court, was pleased to lay down, that in the absence any materiel on record to show that the vendee had ever asked the vendor to execute the sale deed, no RSA No.1634 of 1990 14 discretionary relief of specific performance could be granted. This judgment, is of no help to the appellant, as in the present case it was admitted, by the vendor, that the plaintiff was always and still willing to perform his part of the contract, but the sale deed could not be executed, because of the restraint order passed by the learned court on the application of the appellant moved against defendants No.1 and 2. Learned senior counsel for the appellant, thereafter relied upon the judgment of Hon'ble Madras High Court in the case of Kabridass Vs. Vinothambal & Ors. 2002( 4) RCR (Civil) 684, to contend that the plaintiff was required to perform his part of the contract, within a reasonable time, and the court was bound to take into consideration the surrounding circumstances, while exercising the discretion. This judgment again is of no help to the appellant. As already discussed above, the parties had agreed to execute the sale deed, after getting the land vacated. Suit was filed by the plaintiff/respondent, within 6 months of taking of possession. It cannot be said, that there was any delay on the part of the plaintiff, rather delay, if any, in enforcement of the agreement was due to act of defendant/appellant, for which he can take no benefit. Learned senior counsel for the appellant, thereafter placed reliance on the judgment of Hon'ble Supreme Court in the case of V.Muthusami (dead) by LRs. Vs. Angammal 2002 (2) RCR (Civil) 329 to contend that the decree of specific performance, is discretionary, which is not required to be passed in every case. The court can refuse discretionary RSA No.1634 of 1990 15 relief by invoking provisions of Section 20 of the Specific Relief Act. The reliance on this judgment, is again misplaced, as the appellant could not be allowed to take benefit of a subsequent agreement of sale merely because he filed a suit earlier in time. Even otherwise, no plea under section 20 of the Specific Relief Act was pleaded or proved by the appellant. Learned senior counsel for the appellant, thereafter placed reliance on the judgment of this court in the case of Lala Ram & Anr. Vs. Gugan Singh & Anr. 1989 (1) Revenue Law Reporter 236, to contend that in order to succeed in suit for specific performance, the plaintiff was required to prove, that he was willing and still willing to perform his part of the contract, and in case learned trial court exercised the jurisdiction in a particular way, the learned lower appellate court should not interfere, in absence of proof, that discretion has been exercised perversely, arbitrarily or against judicial principles. This judgment is of no help to the appellant. The learned lower appellate court, rightly held that discretion exercised by the learned trial court, was perverse and based on presumption of collusion between the plaintiff and defendants No.1 & 2. The findings were based on no evidence, but merely on presumption. This could not be sustained. This judgment cannot, therefore, advance the case of the appellant. Learned senior counsel for the appellant, thereafter contended that the suit filed by the plaintiff, was time barred as the limitation was to start from the date of agreement. In support of this contention learned senior counsel placed RSA No.1634 of 1990 16 reliance on the judgment of Hon'ble Andhra Pradesh High court in the case of Thota Rambabu @ Ramu Vs. Cherukuri Venkateswara Rao @ Pedababu and Ors. 2005 (4) RCR (Civil) 700. This judgment is again not relevant. Firstly for the reason that there was no issue of limitation. Issue of limitation is a mixed question of law and facts, and cannot be raised unless the reading of plaint itself shows the suit to be time barred. Even otherwise, it is well settled law, that limitation starts from the date of cause of action. The agreement stipulated, that the sale deed would be executed after the possession, is taken by the vendor. The suit was filed well within a period of limitation. It cannot be said, that the suit was barred by limitation. Learned senior counsel for the appellant placed reliance on the judgment of Hon'ble Supreme Court in the case of Pukhraj D. Jain & Ors. Vs. G.Gopalakrishna 2004 (3) RCR (Civil) 171, wherein Hon'ble Supreme Court was pleased to lay down, that the plaintiff has to aver in the plaint, that he has always been ready and willing to perform essential terms of contract. This fact is further, to be supported by surrounding circumstances, which must also indicate, that the readiness and willingness, continued from the date of contract till the filing of the suit. As already mentioned above, in this case there was no dispute regarding readiness and willingness of the plaintiff/respondent, to execute the sale deed.