REGULAR SECOND APPEAL No.4119 OF 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.4119 of 2010 DATE OF DECISION: FEBRUARY 14, 2011 Bhagwan Dass & others .... Appellants Versus Om Parkash & others .... Respondents CORAM :- HON'BLE MR. JUSTICE L. N. MITTAL. PRESENT: Mr. Sandeep Punchhi, Advocate for the appellants. * * * * L.N. MITTAL, J. (ORAL) This is second appeal by defendants No.2 and 6 to 8 after the defendants i.e. appellants and respondents No.4 to 7 remained unsuccessful in both the courts below. Suit was filed by Hans Raj plaintiff (since deceased and represented by respondents No.1 to 3 as his legal representatives) against defendant Prem Nath (respondent No.7) for specific performance of agreement dated 10.08.1978 regarding suit land measuring 117 Kanals 7 Marlas. Defendants 2 to 8 being purchasers pendente lite were impleaded later on as party to the suit. Plaintiff's case is that the defendant Prem Nath was old tenant over the suit land which came in surplus pool and was thereupon allotted to the said defendant. The defendant agreed to sell the suit land to the said plaintiff for Rs.21,500/- and received Rs.3,000/- as earnest money and executed the aforesaid agreement. Sale deed was to be executed after the defendant was to get ownership rights in the suit land. REGULAR SECOND APPEAL No.4119 OF 2010 -2- On 24.08.1979, there was amendment of the agreement by way of writing on its back. The defendant received the balance of sale consideration of Rs.18,500/- and agreed to execute the sale deed in favour of the plaintiff on getting proprietary rights within fifteen days after giving notice to the plaintiff. Mutation No.685 was sanctioned in favour of defendant on 17.03.1984 regarding ownership rights. However, defendant did not perform his part of the contract although the plaintiff always remained ready and willing to perform his part of the contract. Even notice dated 14.11.1984 served on defendant proved futile. Defendant No.1, who was sole defendant initially, resisted the suit and inter alia pleaded that the agreement in question was never executed by the defendant nor he received any consideration and the alleged agreement is not legal agreement. Defendant being not owner, could not agree to sell the suit in the year 1978. Defendant's suit for possession against the plaintiff stands decreed by District Judge, Sirsa vide judgment and decree dated 18.09.1986 and against the same RSA No.2844 of 1986 preferred by plaintiff herein was pending in this Court and, therefore, the instant subsequent suit regarding same subject matter could not proceed. The defendant was given ownership rights of the suit land under the Haryana Utilization of Surplus Areas Scheme (in short, the Scheme). Defendants No.2 to 8 also broadly took the same stand as that of defendant No.1. They also pleaded that defendant No.1 even offered double the amount of earnest money and, therefore, the instant suit for specific performance is not maintainable. Possession of the suit land is liable to restored to defendants No.2 to 8 who are bonafide REGULAR SECOND APPEAL No.4119 OF 2010 -3- purchasers of the suit land for consideration vide sale deeds dated 07.06.1995, 02.07.1998 and 21.02.1997. Earlier the suit land was sold by defendant No.1 to one Tej Ram who was also bonafide purchaser. Defendants No.2 to 8 have purchased the suit land from Tej Ram. Various other pleas were also raised. Learned Civil Judge (Senior Division), Sirsa vide judgment and decree dated 31.01.2007 decreed the plaintiff's suit. First appeal preferred by defendants has been dismissed by learned Additional District Judge, Fast Track Court, Sirsa vide judgment and decree dated 20.08.2010. Feeling aggrieved, instant second appeal has been filed by defendants No.2 and 6 to 8 only. I have heard learned counsel for the appellants and perused the case file. Learned counsel for the appellants vehemently contended that in view of Clause 12 of the Scheme, defendant No.1 had no right to transfer the suit land till payment of entire purchase price and, therefore, the impugned agreement is null and void. The contention cannot be accepted. During pendency of the instant suit, RSA No.2844 of 1986 arising out of the previous suit which had been instituted by defendant No.1 against the plaintiff, has been decided and the aforesaid agreement has been upheld by this Court vide judgment dated 13.01.2005 Exhibit P-3. Consequently, this contention now does not lie in the mouth of the appellants. Even otherwise, the agreement was to transfer the suit land to the plaintiff after defendant No.1 got ownership rights in the suit land i.e. after payment of the full price REGULAR SECOND APPEAL No.4119 OF 2010 -4- thereof. Consequently, Clause 12 of the scheme is not violated because transfer was to take place after payment of full purchase price by defendant No.1. Thus examined from any angle, the aforesaid contention cannot be accepted. Judgment in the case of Ramachandraiah versus Nagappa Naidu, 1995(2) RRR (599) cited by counsel for the appellants in support of this contention is not applicable because in that case, the vendor did not have perfect title to the suit property. In the instant case, however, the suit was filed by the plaintiff after defendant No.1 got full ownership rights in the suit land and there was no prohibition against defendant No.1 for transferring the suit land at that stage. Learned counsel for the appellants also contended that appellants are bonafide purchasers of the suit land. The contention is completely frivolous and meritless. The appellants and other purchasers purchased the suit land during the pendency of the suit and, therefore, they cannot be termed to be bonafide purchasers of the suit land. On the contrary, sale in their favour is hit by doctrine of lis pendens. It appears that purchase of property under litigation has become lucrative business to take advantage of the litigation by purchasing the property at throw away price. The appellants by no stretch can be said to be bonafide purchasers having purchased the suit land several years after the suit had been filed. Moreover, neither defendant No.1 nor Jai Ram (vendor of defendants 2 to 8) was in possession of the suit land and rather plaintiff was in possession thereof and for this reason also, defendants No.2 to 8 cannot be said to REGULAR SECOND APPEAL No.4119 OF 2010 -5- be bonafide purchasers of the suit land. Before purchasing the suit land, they had to enquire about the right or interest of plaintiff in the suit land being in possession thereof. Learned counsel for the appellants also vehemently contended that the agreement stipulated payment of double the earnest money in case of default by defendant No.1 and, therefore, plaintiff is not entitled to specific performance of the agreement, but is entitled to only double the earnest money as per stipulation in the agreement. Reliance in support of this contention has been placed on judgment of Hon'ble Supreme Court in the case of Dadarao and another versus Ramrao and others 2000(1) LJR (556). The contention although apparently attractive,cannot be accepted. As per latest pronouncements of Supreme Court and this Court, even if the agreement stipulates payment of liquidated damages or double the earnest money in the event of default by the vendor, even then prospective vandee is entitled to seek specific performance of the agreement. Reference in this regard may be made to judgments of Hon'ble Supreme Court in the cases of Man Kaur (dead) by Lrs. versus Hartar Singh Sangha, 2011(1) RCR (Civil) 189 and P.D'souza versus Shondrilo Naidu, (2004) 6 Supreme Court cases 649 and judgments of this Court in the cases of Smt. Mohini Kapoor versus Deepak Uppal, (2006-1) PLR 584; Gurmail Singh and others versus Amrit Singh and another, (1999-3) PLR 68 and Ram Singh versus Ram Sarup, (2010-3) PLR 450. In addition to it, in the instant case, original agreement dated 10.08.1978 was modified by subsequent writing dated 24.08.1979 and thereby defendant REGULAR SECOND APPEAL No.4119 OF 2010 -6- No.1 undertook to execute the sale deed in favour of the plaintiff without any stipulation of double the earnest money. In fact entire sale consideration was paid to defendant No.1 vide writing dated 24.08.1979 and, therefore, there was unequivocal undertaking by defendant No.1 to execute sale deed in favour of the plaintiff and the question of refund of double the earnest money (Rs.3,000/- paid by original agreement dated 10.08.1978) therefore, did not arise after the said agreement was modified vide writing dated 28.04.1979 and entire sale consideration was paid to defendant No.1 vendor who therefore, undertook to execute the sale deed in favour of the plaintiff in terms of the agreement without any other stipulation. Even in the case of Dadarao (supra), the Hon'ble Supreme Court observed that if there is no stipulation in the agreement as to what would happen in the event of default by the vendor, then the prospective vendee can seek specific performance of the agreement. In view of the said observation of Hon'ble Supreme Court also, plaintiff is entitled to specific performance of the agreement in view of the terms and conditions contained in writing dated 24.08.1979 which does not stipulate the payment of double the earnest money in the event of default by the vendor defendant No.1. Learned counsel for the appellants also submitted that the suit is time barred. This contention is also untenable. As per writing dated 24.08.1979, defendant No.1 was to give notice to the plaintiff on acquiring ownership rights in the suit land and was to execute the sale deed within fifteen days. However, admittedly defendant no.1 did not give any notice to the plaintiff regarding acquiring ownership rights in the suit land. On the contrary, mutation was sanctioned on 17.03.1984 and, REGULAR SECOND APPEAL No.4119 OF 2010 -7- therefore, the suit filed on 12.03.1987 within three years thereof cannot be said to be barred by limitation. Learned counsel for the appellants contended that first installment of the purchase price was deposited by the plaintiff on behalf of defendant No.1 on 31.08.1981 and, therefore, the suit filed on 12.03.1987 is barred by limitation. The contention is completely misconceived because according to contention of counsel for the appellants himself, defendant No.1 was not competent to transfer the suit land till payment of full purchase price. Consequently, merely on payment of first installment of the purchase price, the plaintiff could not seek specific performance of the agreement and defendant No.1 had no authority to transfer the suit land till payment of full purchase price. After payment of full purchase price, mutation was sanctioned in favour of defendant No.1 and only then, defendant No.1 became competent to sell the suit land and therefore, the suit filed within three years thereof cannot be said to be barred by limitation. The instant second appeal is not only meritless but is also completely frivolous. The appellants are subsequent purchasers of the suit land during pendency of the suit. Consequently, their conduct is completely dishonest. Defendant No.1 vendor has lost unto this Court in the previous litigation and, therefore there was no occasion for the defendants to have preferred first or second appeal. Such frivolous litigation has to be curbed with strong hands by imposing heaving cost. Concurrent finding in favour of plaintiff does not warrant interference in second appeal because the said finding is not shown to be perverse or REGULAR SECOND APPEAL No.4119 OF 2010 -8- illegal. On the contrary, the said finding is fully justified by the evidence on record and is supported by cogent reasons recorded in detail by the courts below. The said finding is not based on misreading or misappreciation of evidence. No question of law, much less substantial question of law, arises for determination in this second appeal. Accordingly, the appeal is dismissed in limine with exemplary cost of Rs.20,000/- to be deposited by the appellants with the Registry of this court within one month from today, failing which, the case shall be listed for this purpose. (L. N. MITTAL) JUDGE 14th February, 2011 'raj'