IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.65 of 2007 ..... Date of Decision:28.01.2008 Kishore Chand ......Appellant Vs. Harinder Singh .....Respondent Present: Mr. Aksh Deep Mahajan,Advocate for the appellant. Mr. Ashwani Chopra, Senior Advocate with Ms. Shaibya Sood, Advocate for the respondent. *** S.S. Saron, J. This appeal has been filed by the defendant-appellant against the judgment and decree dated 28.8.2006 passed by the learned District Judge, Gurdaspur, whereby the appeal filed by the plaintiff against the judgment and decree dated 24.4.2002 passed by the learned trial Court, has been accepted. The plaintiff-respondent filed a suit for specific performance of the agreement to sell dated 12.2.1991 executed by Tirath Ram (since deceased) and now represented by his legal representative Kishore Chand. In terms of the agreement dated 12.2.1991(Ex.P8) it was agreed that the building constructed in Khasra No.443/2 in the revenue estate of village Bhumbli, Tehsil and District Gurdaspur had been agreed to be sold by Tirath Ram to the plaintiff for a consideration of Rs. 2.25 lacs. A sum RSA No.65 of 2007 -2- of Rs. 1 lac was given as earnest money and five years time i.e. up to 12.2.1996 was fixed for execution and registration of the sale deed. Thereafter another agreement dated 15.7.1994 was executed and a sum of Rs. 20,000/- was paid by the plaintiff to Tirath Ram. This was followed by another agreement dated 8.11.1994 and another sum of Rs. 12,000/- was paid. In this manner a sum of Rs. 1, 32, 000/-has been paid and Rs. 93,000/- remains to be paid. The plaintiff on 11.1.1996 served a legal notice on Tirath Ram for execution of the sale deed as per agreement. Admittedly, both the parties were present before the Sub Registrar on the date fixed for registration of sale deed. On the said date it transpired that the property was under mortgage with the Union Bank of India and that a sum of Rs. 80,000/- was due to the Union Bank of India for clearing the mortgage. Therefore, another agreement was executed on 12.2.1996 for execution of the sale deed by 13.5.1996 so as to enable the defendant to clear the mortgage. The learned trial Court vide its judgment and order dated 24.4.2002 although held that the agreement which was entered into between the parties stood proved, however, dismissed the suit of the plaintiff by observing that the agreement dated 12.2.1991 renewed on 15.7.1994 and 8.11.1994 could not have been executed by way of specific performance of the sale as the suit property had been pledged with a bank and the encumbrance had not been discharged. Therefore, it was observed that the bank had first claim over the property in dispute with which it had been pledged. Accordingly, it was held that the plaintiff could not claim specific performance of the aforesaid agreement and he only had the right to recover the consideration paid by him to the defendant by paying the proper court fee and proceedings in due course of law from the defendant. In RSA No.65 of 2007 -3- appeal filed by the plaintiff, learned first appellate Court accepted the plea and held the agreement to have been validly executed, decreed the suit of the plaintiff. Mr. Aksh Deep Mahajan, Advocate, learned counsel appearing for the defendant-appellant, has vehemently contended that the agreement dated 12.2.1991 was not executed between the parties. In any case ,it is submitted that the same was only for the purpose of securing the loan that had been taken by defendant Tirath Ram from the father of plaintiff namely Brig. Udham Singh. It is submitted that the son of defendant Tirath Ram namely Kishore Chand i.e. the present defendant, had been kidnapped by the terrorists on 27.1.1991. Tirath Ram, in order to arrange funds in view of imminent threat of the terrorists, had taken a loan of Rs. 1 lac against his land. Therefore, it is submitted that the agreement dated 12.2.1991 could not have been got specifically enforced by the plaintiff. It is further contended that in fact, a sum of Rs. 68,000/- already stands paid towards the loan which is evident from the statement of accounts (Ex. D1) of the defendant and the subsequent deposit of the said amount in the account of the plaintiff (Ex.D2). It is also contended that there has been a complete misreading of evidence by the learned lower appellate Court which has resulted in grave prejudice to the appellant. Misreading of evidence, it is submitted, is a question of law which would require consideration of this Court in Regular Second Appeal. It is also contended that suit for specific performance of the contract was not liable to be enforced after lapse of number of years and payment of amount would meet the ends of justice. In support of his contention learned counsel cites the case of Mohinder Singh V. Harjit Singh, 2001(4) R.C.R.(Civil) 175(P&H). A reference has also RSA No.65 of 2007 -4- been made to the case of A.C. Arulappan V. Smt. Ahalya Naik, 2001(4) R.C.R.(Civil) 109(SC). Besides, to case of V. Muthusami(dead) by Lrs. V. Angammal, AIR 2002 SC 1279. Still further reference has been made to the case of B.R. Mulani V. Dr. A.B. Aswathanarayan and others, AIR 1993 Karnataka 257. In response, Mr. Ashwani Chopra, learned Senior Advocate appearing with Ms, Shaibya Sood, Advocate, has submitted that the contentions as raised by the learned counsel for the appellant are purely factual and no question of law is shown to be involved. It is submitted that the agreement dated 12.2.1991 and the subsequent extension thereof in terms of the agreements dated 15.7.1994 and 8.11.1994 have been held to be proved by both the Court below concurrently. Therefore, no issue of law arises. It is submitted that the plaintiff was non-suited by the learned trial Court only on point of the fact that the property in question was under hypothecation with the Union Bank of India. Therefore, it is submitted that merely because the property was under hypothecation would not debar the plaintiff to seek specific performance of the agreement. It is submitted that it could be a defence for the plaintiff not to execute the sale deed because of the hypothecation. However, the defendant cannot claim such a plea. In support of his contention, learned Senior counsel cites Rattan Pal Singh V. Kunwar Pal Singh and another. 2001(3) Civil Court Cases 475 (Allahabad). I have given my thoughtful consideration to the contentions of the learned counsel for the parties and perused the judgments of the Courts below. It is not in dispute that the learned trial Court has dismissed RSA No.65 of 2007 -5- the suit of the plaintiff. However, admittedly the agreement dated 12.2.1991 (Ex.P8) and the subsequent agreements dated 15.7.1994 and 8.11.1994 were held to be duly proved. It was observed that the said agreements had been signed by Tirath Ram (since deceased) and these agreements have been proved by the plaintiff by placing the originals thereof on record as well as by the oral statements of the witnesses. The defendant was unable to refute the evidence in this regard led by the plaintiff, by leading cogent evidence. It was categorically held that it cannot be concluded that the defendant had borrowed Rs.1 lakh. The plaintiff was non-suited only on the ground that the property in question was pledged with the Union Bank of India which had first charge over the same. In this regard it may be noticed that the Allahabad High Court in Rattan Pal Singh's case (supra) has observed that in assuming that the property in question was hypothecated or mortgaged with the UCO Bank in lieu of loan, the title of property in question was not transferred to the bank and it remained with the defendant. The hypothecation of agreement, it was observed, simply created a charge over the property and its effect was that the UCO Bank had the first charge over the property for the release of debt and nothing more that it. Besides, the hypothecation mortgage in any way did not create any bar in execution of the agreement to sell or transfer of the property by the defendant. In any case, in appeal, the judgment of the trial Court, has been reversed. Insofar as the question that the defendant had to arrange a sum of Rs. 1 lac on account of the imminent threat because of the kidnapping of his son Kishore Chand, has also been considered by the lower appellate Court. It was observed that the case set up by Tirath Ram is that his son Kishore Chand was kidnapped by terrorists who were demanding RSA No.65 of 2007 -6- Rs. 2 lacs and in these circumstances a sum of Rs.1 lakh was borrowed from the father of the respondent namely Udham Singh for the release of his son. Tirath Ram had stated that his signatures were obtained on blank papers and he executed an agreement with the plaintiff for Rs.1 lac which has been returned in two instalments and nothing is due by him to the respondent. The letter that was received as threat, has not been exhibited but placed on record as mark 'X'. It was considered that son of Tirath Ram namely Kishore Chand had been released by the terrorists four days before the payment was made. It was noticed that when Kishore Chand was kidnapped on 27.7.1991 then there was no necessity to arrange funds for his release. It was also considered that the case set up was that Kishore Chand was released on 31.2.1991. There is no such date in the calendar as 31.2.1991. In any case it may be noticed that if Kishore Chand was released on 31.1.1991, the purpose for which the loan was taken, was not necessary and in case he was released beyond the date of agreement dated 12.2.1991, then his signatures could not have been on the agreement, as on that day he would have been in the custody of kidnappers. As regards the contention that Rs.1600/- were deposited in the bank account of the plaintiff, it may be noticed that Rs.1600/- was the rent which was deposited in the bank account of defendant Tirath Ram. The said amount, it is accepted by learned counsel for the appellant, was paid as rent by the Union Bank in the account of the defendant who, according to the learned counsel, paid the amount to the plaintiff towards discharge of the loan. However, it may be noticed that in terms of the agreement dated 12.2.1991 the possession of the plot of the building had been given to the plaintiff but since the rent was being paid to the defendant, therefore, the same was paid by defendant Tirath Ram to the RSA No.65 of 2007 -7- plaintiff as the latter was in possession. In such a situation, it cannot be said that the amount of Rs. 1600/- was paid towards discharge of the loan which was allegedly taken. It may be noticed that defendant Tirath Ram has taken a somewhat inconsistent stand. It is stated that no agreement dated 12.2.1991 was entered into with him but at the same time it is also stated that the same was for the purpose of rasing a loan. No doubt defendant can take inconsistent pleas but the present pleas are so inconsistent that he, at one point does not accept the execution of the agreement in question and at the same time says that it was for the purpose of loan. Besides, it may be noticed that in case the agreement was not executed then there was no necessity for the defendant to be present before the Sub Registrar on 12.2.1991. In response to the same it is stated by the learned counsel for the appellant that a stand was taken that no agreement was executed, however, it was stated that in case the plaintiff appeared the defendant would also appear so as to apprise the Sub Registrar that no such agreement was executed. This aspect also, in my view, would show that the agreement had indeed been executed between the parties. During the course of hearing the only question of law according to the learned counsel which arises is that there has been misreading of evidence. However, in my view there has been no misreading of evidence and the learned lower appellate Court as also the trial Court have, on the basis of evidence and material on record, reached at the conclusion that the agreement dated 12.2.1991 and the extension thereof on 15.7.1994 and 8.11.1994 were validly executed. The appellant, in terms of Section 100(3) C.P.C. is to formulate substantial questions of law in the grounds of appeal. In para 17 the appellant has formulated six questions of law. A reading of the same, however, shows that none of them is a question RSA No.65 of 2007 -8- of law but are only at the most the matters in issue between the parties, which cannot amount to substantial questions of law which would require consideration of this Court. Insofar as the judgments cited by learned counsel for the appellant are concerned, it may be noticed that in Mohinder Singh V. Harjit Singh (supra), it was observed that relief of specific performance is discretionary and it cannot be claimed as a matter of right though discretion has to be used judiciously on sound reasons guided by principles and capable of correction by appellate Court. Besides, the Court is not bound to grant such relief merely because it is lawful to do so. In my view there is no dispute to the said proposition. In the said case it was observed that there was no equity in favour of the vendee so as to warrant a decree for specific performance that also after 28 years. It would create hardship to the vendor. Keeping in view the facts and circumstances of the present case that it was itself agreed between the parties to execute the sale deed in favour of the plaintiff five years after the agreement to sell dated 12.2.1991 i.e. on 12.2.1996 and thereafter extensions were also given on 15.7.1994, 8.11.1994 and then on 12.2.1996 followed by the plaintiff filing the suit in the trial Court on 15.5.1995, it cannot be said that there has been gross or inordinate delay which would warrant that a decree for specific performance should not be passed. Therefore, the ratio of the judgment in Mohinder Singh's case (supra), is inapplicable. In A.C. Arulappan V. Smt. Ahalya Naik's case (supra), the circumstances under which a Court shall exercise such a discretion, have been mentioned. These inter alia are as follows:- (i) If under terms of contract plaintiff gets an unfair RSA No.65 of 2007 -9- advantage over defendant, court may not exercise its discretion in favour of plaintiff. (ii) Specific Relief may not be granted if defendant could be put to undue hardship which he did not foresee at time of agreement. (iii) If it is inequitable to grant specific relief then also court could desist from granting decree to plaintiff. Learned counsel for the appellant has not been able to show as to under which category of cases does the present case fall. Therefore, the ratio of the said judgment is also inapplicable. Insofar as the judgment in V. Muthusami (dead) by Lrs. V. Angammal's case (supra) is concerned, it was held therein that where the relief is inequitable and causes hardship then a decree for specific performance is not to be passed. As has already been observed there is no dispute to the said proposition. However, a perusal of the judgment in V. Muthusami's case(supra) would show that the Court had proceeded on the basis that Angammal was a limited owner over the suit property and Dhanapal was the full owner and on that basis both the agreements for sale-Ex.B-1 and Ex.B-24 in the said case were executed. All the Courts held that Ex.B-1 executed by Angammal and Dhanapal in favour of the plaintiff was subsequent to the agreement of sale Ex.B-2 executed by Dhanapal in favour of defendants No. 3 to 6 therein. The Courts held that defendants No. 3 to 6 were bona fide purchasers for valuable consideration without notice of the agreement of sale Ex.B-1. The same is not even remotely in issue in the present case. In B.R. Mulani V. Dr. A.B. Aswathanarayana and others' case (supra), it was held that where prospective vendee fails to perform his part RSA No.65 of 2007 -10- of the agreement of sale of discharging mortgages executed by vendor and also fails to pay rental of portion of suit schedule property in his occupation, it was held that he was not entitled to decree for specific performance. In the present case the prospective vendee i.e. the plaintiff has been ready and willing to perform his part of the agreement which has been concurrently held by both the courts below. Therefore, the ratio of the said judgment is also inapplicable. In view of the foregoing discussion, there is no merit in this appeal and the same is accordingly dismissed with costs. (S.S. SARON) January 28, 2008. JUDGE sunita