R.S.A. No. 168 of 1992 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 168 of 1992 (O&M) Date of decision: 16.04.2009 Smt. Harjit Grewal and others ....appellants versus Dr. Vinod Kumar Batra and others ....respondents CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. M.L. Sarin, Sr. Advocate, with Ms. Seema Jagpal, Advocate, for appellant No. 1. Mr. Puneet Jindal, Advocate, for respondent No. 1. Mr. Arun Palli, Sr. Advocate, with Mr. Divanshu Jain, Advocate, for appellants No. 2 and 3. *** VINOD K. SHARMA, J. This regular second appeal is directed against the judgments and decree passed by the learned Courts below vide which the suit filed by the plaintiff/respondents for possession by way of specific performance of agreement dated 13.4.1978 of plot measuring 5 kanals 8 marlas, as detailed in the plaint, has been ordered to be decreed. The plaintiff/respondents brought a suit on the pleadings that R.S.A. No. 168 of 1992 (O&M) -2- the defendant/appellants entered into an agreement to sell their plot detailed in the head note of the plaint on 13.4.1978. The price of the plot was fixed at Rs.3,000/- per marla, and amount of Rs.12,000/- was paid as earnest money. The balance of Rs.3,11, 900/- was to be received by the defendants from the plaintiffs at the time of registration of the sale deed. The sale deed was agreed to be executed in favour of the plaintiffs in equal shares. The defendants agreed to apply for permission of the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 and the sale deed was to be registered within one month from the intimation of permission by the defendants, which was to be sent to the plaintiffs. It was also stipulated in the agreement to sell that if the plaintiffs failed to get the sale deed registered after the permission was obtained, the amount advanced would stand forfeited, and in case the defendants failed to perform their part of agreement, the plaintiffs would be entitled to refund earnest money and another amount of Rs.12,100/- by way of damages. The expenses for purchase of stamp papers for getting the sale deed executed was to be incurred by the plaintiffs, whereas registration charges were to be borne by the defendants. The defendant/appellants did not apply for taking permission from the competent authority in spite of best efforts made by the plaintiff/respondents in this connection. Registered notice was also served on the defendants, but to no effect. It was also pleaded by the plaintiff/respondents that defendant/appellants were approached 15 days prior to the filing of the present suit for getting the sale deed executed, but they refused to do so, as they wanted to enhance the price from the plaintiffs to which they did not agree. The plaintiffs pleaded that they R.S.A. No. 168 of 1992 (O&M) -3- were always and still ready and willing to perform their part of contract and, thus, relief of specific performance or in the alternative for refund of amount advanced with damages was prayed for. The suit was contested wherein preliminary objection was raised that the property in dispute is part of tenancy under Dr. Harbhajan Singh Grewal prior to agreement in dispute. Dr. Harbhajan Singh Grewal was said to be running a hospital in the name and style of Raja Hospital, and had constructed latrine etc. in the property in dispute. There were number of rooms which were used by hospital employees and patients. The answering defendants claimed not to be in possession of the property in dispute. Dr. H.S. Grewal was said to be necessary party to the suit. The plan and boundaries filed by the plaintiffs were said to be wrong. The agreement was said to be vague, ambiguous and unenforceable. It was also pleaded that the scribe of the agreement was relation of the plaintiffs and in collusion with the plaintiffs, deed writer did not mention the value of construction made in the property in dispute in the agreement in question. It was claimed that this fact was deliberately kept concealed. The agreement was not read over by the answering defendants and, thus, it was claimed that the fraud was practised upon them, who were made to sign the agreement without knowing the contents therein. The value of super-structure was claimed to be more than one lac. It was also claimed that the sale price alleged in the agreement did not mention the true picture. The plaintiffs had also agreed to purchase the super-structure at Rs. 1 lac and omission in this regard was deliberately made. All expenses for execution of sale deed were to be borne by the plaintiffs, but surprisingly the scribe has also to R.S.A. No. 168 of 1992 (O&M) -4- the contrary wrongly referred to it otherwise to the detriment of the defendants. Expenses for purchase of stamp papers as well as registration etc. were to be borne by the plaintiffs which is the usual custom in such cases. The plaintiffs have played a fraud and got incorporated that the stamp expenses were to be borne by the defendants. It was also claimed that the answering defendants never agreed to apply for sanction to the competent authority in the instant case. The case set up was that under the Land Ceiling Act the said sanction was not required at all, and the clause was got scribed without the knowledge of answering defendants. The case set up was that the clause was got incorporated by the plaintiffs to gain time for making arrangement for payment to be made. It was the case of the defendant/appellants that the plaintiffs were not financially sound to make payment at the time of agreement so executed. The sale deed was to be completed within one month of the agreement, but in collusion with the scribe, the plaintiffs got the above condition manipulated. Plea of estoppel was raised against the plaintiffs. It was also claimed that the agreement was not otherwise enforceable after the period of two years and six months since sale deed was to be completed within one month It was claimed that the copy of agreement was never given to defendants. The defendants also claimed that their request to provide them copy for enabling them to do the needful was not complied with. The suit was said to be not maintainable due to fraud, uncertainity and mis-representation. The plea was also raised that the plaint was not in accordance with the provisions of law and, therefore, deserved to be rejected. It was pleaded that in reply to notice dated 12.6.1991, from the competent authority under the Urban R.S.A. No. 168 of 1992 (O&M) -5- Land (Ceiling and Regulation) Act, 1976, return was filed and an application was also moved for exemption and for development of Raja Hospital, which was being run for the last 30 years. The exemption was granted by the Secretary to Government Punjab, and the defendants as such cannot by way of sale, gift or otherwise transfer the property in dispute. The order was said to be dated 21.2.1984. On merits, it was admitted that the defendants agreed to sell building to the plaintiffs, but the plan attached with the plaint was not admitted to be correct. The terms and conditions of the agreement, as given in the plaint, were not admitted in their entirety. It was asserted that Rs.1 lac was to be paid for super-structure existing at the spot. There was no necessity to obtain permission. The answering defendants showed their ignorance to the conditions of the agreement as they were said to have not been read by them. The objections as taken in preliminary objections were taken in reply also. It was, thus, prayed that the suit be dismissed. In replication, averments made in the plaint were re-asserted and those made in the written statement were denied. On the pleadings of the parties, the learned trial Court was pleased to frame the following issues: - "1. Whether the agreement dated 13.4.78 was result of fraud as alleged? OPD. 2. Whether the plaintiffs have been ready and willing to perform their part of the agreement? OPP 3. Whether the plaintiffs are estopped by their act and conduct to enforce the agreement? OPD 4. Whether Dr. H.S. Grewal is a necessary party? If so, to what effect? OPD. R.S.A. No. 168 of 1992 (O&M) -6- 5. Whether the agreement in question is not enforceable as alleged? OPD 6. Whether the site plan is not correct? OPD 7. Whether the suit is not maintainable? OPD 8. Whether plaint has not been drafted in accordance with the provisions of law? OPD 9. To what alternative relief the plaintiff is entitled? OPP 10. Whether the disputed property is part of a tenancy under Dr. H.S. Grewal prior to the agreement in dispute? If so, to what effect? OPD. On appreciation of evidence, the learned trial Court was pleased to hold that agreement dated 13.4.1978 was executed voluntarily and not in result of fraud or mis-representation, as alleged by the defendants. Issue No. 1 was decided in favour of the plaintiffs and against the defendants. The learned trial Court on issue No. 2 was pleased to hold that the very fact that the plaintiffs served a notice upon defendants calling upon them to execute the sale deed goes to show their readiness and willingness to perform their part of contract. The learned trial Court also on the basis of evidence led, decided issue No. 2 in favour of the plaintiffs, and held that the plaintiffs have been always and still ready and willing to perform their part of contract. The learned trial Court also decided issue No. 3 in favour of the plaintiffs and held that the plaintifs were not estopped by their act and conduct to enforce the agreement. Issue No. 4 was also decided against the defendants and it was R.S.A. No. 168 of 1992 (O&M) -7- held that Dr. H.S. Grewal was not necessary party being a doctor. Though the learned trial Court took note of the fact that in the suit filed by Dr. H.S. Grewal, the plaintiff/respondent had taken a stand that he would not be dispossessed except with due process of law. He was held to be not a necessary party. Even otherwise, in a suit for specific performance, the tenant cannot be said to be a necessary party. Issue No. 5 was also decided in favour of the plaintiffs and it was held that the agreement was enforceable as the stipulation was not result of fraud nor the same was vague. The learned trial Court held that perusal of the agreement showed that there was no ambiguity about the terms contained therein. The learned trial Court was also pleased to hold that the site plan attached with the plaint was correct and as per dimensions given in the suit, thus, issue No. 6 was decided against the defendants and in favour of the plaintiffs. On issue No. 7 again, the learned trial Court was pleased to hold that the agreement was enforceable and the plaintiffs were ready and willing to perform their part of contract. The learned trial Court, thus, held that the suit filed was maintainable. Issue No. 8 was not seriously pressed and, thus, decided against the defendants. On issue No. 9, the learned trial Court held that alternative relief of money was not adequate relief in case of sale of immovable property in view of settled law. Thus, this issue was decided against the defendants and in favour of the plaintiffs. On issue No. 10, Dr. H.S. Grewal was held to be tenant over R.S.A. No. 168 of 1992 (O&M) -8- the property in dispute. Plea of the appellant/defendants that agreement was not enforceable in view of order Ex.DW5/1 was not accepted. The learned trial Court noticed that Harjit Grewal during cross-examination admitted that the construction had been made by them on their exempted land, which falls in bastian. She also stated that the land in dispute was not part of excess land. The defendants owned less area than the area which was beyond Ceiling limit in case of property situated at Jalandhar. The learned trial Court further observed that the period for exemption was valid and was over. The learned Court thus, decided issue No. 11 in favour of the plaintiffs and against the defendants. The suit for specific performance was decreed by learned trial Court. The defendants preferred an appeal against the judgment and decree passed by the learned trial Court. It may be mentioned here that after the suit was decreed, the defendant/appellants amended their written statement and the case was remanded back. The suit was decreed for the second time on 6.12.1986. The written statement was again amended, and thereafter during the pendency of the appeal, the written statement was amended for the fourth time, under the order of this Court, wherein new plea was taken that even if the parties have entered into an agreement for sale, it was void ab initio, as the provisions of Section 5(3) and 42 of the Urban Land (Ceiling and Regulation) Act, 1976 were violated. While allowing the amendment of written statement, this Court was pleased to frame the following issue: - R.S.A. No. 168 of 1992 (O&M) -9- “Whether the agreement to sell is void and not enforceable in view of the provisions of Section 5(3) and 42 of the Urban Land (Ceiling and Regulation) Act, 1976?” The parties were, however, not allowed to lead any additional evidence, on the issue framed. In appeal, the contention raised by the appellant/defendants was that as per terms of the agreement Ex. P-1 permission of the competent authority was to be obtained, and thereafter within one month of notice, sale deed was to be got executed. Since no such permission was sought for, therefore, no cause of action could be presumed to have arisen for filing the suit. It was also contended that the contract being contingent contract was not enforceable in law without the contingency having been arisen. The learned lower appellate Court in view of the law laid down by the Hon'ble Supreme Court in Maha Rao Saheb Shri Bhim Singhji and others Vs. Union of India and others, 1981 Supreme Court 234 was pleased to hold that no permission of competent authority was required even if the land in occupation of defendant/appellants exceeded, the permissible area, as sub-section 1 of Section 27 of the Urban Land (Ceiling and Regulation) Act, 1976 was held to be invalid, in so far as it imposed a restriction on transfer of any urban or urbanisable land, with a building or portion only of building, which was within the Ceiling area. The learned lower appellate Court held that it was the case set up by the defendant/appellants themselves that there was construction worth Rs.1 lac standing on the plot in dispute, and that land agreed to be R.S.A. No. 168 of 1992 (O&M) -10- sold was vacant piece, which was part of Raja Hospital building, and comprised of several rooms in occupation of Dr. H.S. Grewal as tenant. The learned lower appellate Court held that in view of the judgment of the Hon'ble Supreme Court in Maha Rao Saheb Shri Bhim Singhji and others Vs. Union of India and others (supra), no permission was required for execution of sale deed. The learned lower appellate Court also held that it was in pursuance to the complaint made by somebody, that an application seeking exemption, though by asserting that applicants were not big landladies was moved. DW-5 examined by defendant/appellants also deposed that according to verifications made by the department, the declaration filed by the appellants was correct that they were not big landladies. It was also admitted that defendant/appellants were not having any surplus area, leaving no doubt that provisions of Ceiling Act were not applicable. The defendant/appellants placed on record Ex. C/1 i.e. certified copy of order passed by the competent authority according to which Smt. Pritam Kaur was having no surplus area. The learned lower appellate Court took note of Ex. DW-5/1 i.e. copy of order passed by the Secretary to Government of Punjab, Local Government, showing that exemption though on the basis of mis- calculations was granted to Smt. Harjit Kaur, also qua land on which the construction had been raised. The learned lower appellate Court was also pleased to hold R.S.A. No. 168 of 1992 (O&M) -11- that no question arose to obtain permission of the competent authority before effecting the sale in accordance with agreement Ex. P-1. The learned lower appellate Court held that no contingency was required to happen before executing the sale deed, thus, the specific performance of the contract was possible. The learned lower appellate Court also noticed that it was the stand of the defendant/appellants from the very beginning that no permission was required. The plea of the defendant/appellants that plaintiff/respondents failed to prove their willingness to perform their part of contract, was also rejected by recording a positive finding that no evidence was brought suggesting that the plaintiff/respondents evaded the execution of sale deed. The learned lower appellate Court further held that the burden to plead and prove that the plaintiffs were always and still willing and ready to perform their part of contract stood discharged. The learned lower appellate Court held that notice was served calling upon the defendant/appellants to execute the sale deed, but the defendants did not take any step in this regard. The learned lower appellate Court held that the defendants due to increase of price were evading to execute the sale deed. In view of the findings referred to above, the appeal was dismissed. The learned senior counsel appearing on behalf of the appellants raised the following substantial questions of law for consideration in this appeal: - "1. Whether the learned Courts below erred in law in R.S.A. No. 168 of 1992 (O&M) -12- decreeing the suit of the plaintiffs without giving a finding on the additional issue framed by the order of the Hon'ble High Court dated 9.5.1991? 2. Whether the judgment of the learned lower appellate Court is illegal as no issue-wise findings were given? 3. Whether the learned Courts below could have decreed the suit for specific performance in view of the exemption order dated 13.2.1984, Ex. DW5/1? 4. Whether the learned Courts below erred in law in decreeing the plaintiff's suit for specific performance in view of Section 5(3) and Section 42 of the Urban Land (C&R) Act 1976? 5. Whether the suit was premature and the learned Courts below committed an error in law in decreeing the same? 6. Whether the learned lower appellate Court committed an illegality by ignoring the surplus area order dated 27.2.1989 passed by the competent authority which was placed on record on 13.3.1990? 7. Whether the learned Courts below erred in law in decreeing the suit for specific performance when it is patent on the record that this would result in great hardship to the defendant – appellant herein? 8. Whether the learned Courts below should have decreed the suit for specific performance when no evidence as to the readiness and willingness of the plaintiff was placed on the record? 9. Whether the decrees and judgments of the learned Courts below are perverse? Mr. M.L. Sarin, learned senior counsel appearing on behalf of appellant No. 1 vehemently contended that the learned lower appellate R.S.A. No. 168 of 1992 (O&M) -13- Court committed an error in upholding the judgment of the learned trial Court without giving any finding on the additional issue framed by order of this Court dated 9.5.1991. In support of this contention, the learned senior counsel placed reliance on the judgment of the Hon'ble Supreme Court in Mrs. Vijaya Shrivastava v. M/s Mirahul Enterprises and others, JT 2006(6) SC 526, wherein the Hon'ble Supreme Court has been pleased to lay down that the learned lower appellate Court should give finding on all the issues framed. Reference was made to paras No. 5, 6 and 10 of the said judgment, which read as under: - "5. In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected. For example, in the suit, the plaintiff-appellant has alleged that there were two separate transactions one for sale of the flat and another for specific performance of the agreement under which interest-free loan was extended to the developers. Whether the loan amount was adjustable towards the price payable to the developers was an important issue which has a linkage with the agreement for sale of flats. We do not wish to express any opinion on any of the said issues. 6. In the circumstances, we are of the view that the division bench ought to have given findings on all the issues referred to hereinabove. 10. In the present case, it may also be noted that the plaintiffs have alleged that the sale deed dated 9.6.1987 is vitiated by collusion and, therefore, not binding on the plaintiffs. As stated above, this issue is decided against defendant No. 6 by the single judge. Decree has been passed against defendant No. 6. He has preferred RFA to R.S.A. No. 168 of 1992 (O&M) -14- the division bench, in which he has categorically stated that he was a resident of Madras; that, he had given power of attorney to the managing partner of M/s Mirahul Enterprises; and that, he was a bona fide purchaser for consideration and without notice. This issue is very relevant because even if in a given case, the contract is found to be concluded, still the court can refuse specific performance if the subsequent purchaser is found to be a bona fide purchaser for value without notice. On this point, we do not wish to express any opinion. We have only given reasons in respect of our conclusion that the division bench of the High Court should have decided all the above quoted issues which the single judge has decided while passing the decree in favour of the plaintiffs. In the circumstances, the following order is passed. The Registry is directed to place the above civil appeals for further hearing on 4.12.2006. In the meantime, we are directing the division bench of Delhi High Court to return to us the findings on all the above-quoted issues in RFA (OS) Nos. 29, 30, 41 and 42 of 1996." Reliance was also placed on the judgment of the Hon'ble Supreme Court in Madhukar and others Vs. Sangram and others, (2001) 4 SCC 756, where again it has been reiterated that learned lower appellate court should opine on all the issues. Paras No. 5 and 6 of the said judgment read as under: - "5. We have carefully perused the judgment and decree of the High Court in the first appeal. We find that substantial documentary evidence had been placed before the trial court including certified copies of certain public records besides copy of the judgment and decree of the earlier suit (OS Nos. 93 of 1971). Oral evidence had also R.S.A. No. 168 of 1992 (O&M) -15- been led by the parties before the trial court which was noticed and appreciated by the trial court. However, the impugned judgment in the first appeal is singularly silent of any discussion either of documentary evidence or oral evidence. Not only that, we find that though the trial court had dismissed the suit on the ground of limitation as also on the ground that the decision in the earlier suit (OS No. 93 of 1971) operated as res judicata against Defendant 1 only, the High Court has not even considered, much less discussed the correctness of either of the two grounds on which the trial court had dismissed the suit. Sitting as a court of first appeal, it was the duty of the High Court to deal with all the