P. RAMASUBBAMMA versus V. VIJAYALAKSHMI & OTHERS
[2022] 16 S.C.R. 1002, Supreme Court of India, 2022
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
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P. RAMASUBBAMMA
v.
V. VIJAYALAKSHMI & OTHERS
(Civil Appeal No. 2095 of 2022)
APRIL 11, 2022
[M.R. SHAH AND B.V. NAGARATHNA, JJ.]
Specific Relief Act, 1963 – s. 10 – Specific performance of
contract – Appellant (original plaintiff) filed a suit for specific
performance of agreement to sale – Respondent no. 1 (original
defendant no. 1) admitted the execution of agreement to sell and
specifically stated that she is ready and willing to perform her part
of contract – Respondent no. 2 holding power of attorney and other
respondents disputed the contention of respondent no. 1 on the
ground that the agreement was done without cancelling the registered
power of attorney and without the knowledge of respondent no. 1 –
Trial Court decreed the suit in favour of appellant – High Court set
aside the decree passed by the trial Court – On appeal, held: The
High Court, was not required to go into the aspect of the execution
of the agreement to sell and the payment/receipt of substantial
advance sale consideration, once the vendor had specifically
admitted the execution of the agreement to sell and receipt of the
advance sale consideration; thereafter no further evidence and/or
proof was required – High Court has committed a grave error in
reversing the judgment and decree passed by the trial Court by
ignoring the vital facts of the case which are either admitted or
proved in the instant case.
Allowing the appeal, the Court
HELD:
1.1 Considering the fact that original defendant No.
1 – vendor – original owner admitted the execution of agreement
to sell dated 12.04.2005 and even admitted the receipt of
substantial advance sale consideration, the Trial Court decreed
the suit for specific performance of agreement to sell dated
12.04.2005. Once the execution of agreement to sell and the
payment/receipt of advance substantial sale consideration was
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admitted by the vendor, thereafter nothing further was required
to be proved by the plaintiff – vendee. Therefore, as such the
Trial Court rightly decreed the suit for specific performance of
agreement to sell. The High Court, was not required to go into
the aspect of the execution of the agreement to sell and the
payment/receipt of substantial advance sale consideration, once
the vendor had specifically admitted the execution of the
agreement to sell and receipt of the advance sale consideration;
thereafter no further evidence and/or proof was required. [Para
5.2][1010-E-G]
1.2 So far as the sale deeds executed by original defendant
No. 2 in favour of defendant Nos. 3 and 4 and the decree passed
by the Trial Court that the sale deeds executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4 are not binding
on defendant No. 1. The High Court has erred in setting aside
the decree passed by the Trial Court by observing that as there
was no specific relief/prayer of cancellation of sale deeds dated
03.05.2010 executed by the original defendant No. 2 in favour of
defendant Nos. 3 and 4, therefore, the Trial Court could not have
passed the decree that the said sale deeds are not binding on
defendant No. 1 and the plaintiff. As such, there was a lis between
the parties in respect to sale deeds dated 03.05.2005 executed
by original defendant No. 2 in favour of defendant Nos. 3 and 4
and even specific issues were framed, which on appreciation of
evidence were held against defendant Nos. 2 to 4. Therefore,
the High Court is not justified in quashing and setting aside the
judgment and decree passed by the Trial Court declaring that
sale deeds dated 03.05.2010 are not binding on defendant No. 1
and the plaintiff. [Para 5.3][1010-G-H; 1011-B-E]
1.3 The High Court has set aside the judgment and decree
passed by the learned Trial Court on the ground that the relief
under Section 20 of the Specific Relief Act, is a discretionary
relief and therefore, in view of the fact that original defendant
No. 2 had executed sale deeds in favour of defendant Nos. 3 and
4, the learned Trial Court ought not to have exercised discretion
in favour of the plaintiff for passing the decree for specific
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performance. However, in the facts and circumstances of the case
narrated hereinabove and when the learned Trial Court specifically
gave the findings that defendant No. 1 – vendor specifically
admitted the execution of agreement to sell dated 12.04.2005 in
favour of the plaintiff by accepting a substantial advance
consideration. The High Court has committed a grave error in
reversing the judgment and decree passed by the Trial Court by
ignoring the vital facts of the case which are either admitted or
proved in the instant case. [Para 5.8][1013-C-D, F]
Lala Durga Parsad and Anr. Vs. Lala Deep Chand and
Ors. [1954] SCR 360; Soni Lalji Jetha & Ors. Vs. Soni
Kalidas Devchand & Ors., [1967] 1 SCR 873; R.C.
Chandiok & Anr. Vs. Chuni Lal Sabharwal & Ors.
[1971] 2 SCR 573: AIR 1971 SC 1238; Dwarka
Prasad Singh & Ors. Vs. Harikant Prasad Singh & Ors.,
[1973] 2 SCR 1064 ; (1973) 1 SCC 179 ; Rathnavathi
& Anr. Vs. Kavitha Ganashamdas, [2014] 13 SCR 120
: (2015) 5 SCC 223 – referred to
Vasantha Viswanathan Vs. V.K. Elayalwar, (2001) 8
SCC 133 – referred to.
Case Law Reference
[1954] SCR 360
referred to
Para 3.3
[1967] 1 SCR 873
referred to
Para 3.3
[1971] 2 SCR 573
referred to
Para 3.3
[1973] 2 SCR 1064
referred to
Para 3.3
[2014] 13 SCR 120
referred to
Para 3.3
[2001] 8 SCC 133
referred to
Para 3.6
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2095
of 2022.
From the Judgment and Order dated 20.07.2021 of the High Court
of
Karnataka, Dharwad Bench in R.F.A. No.100200 of 2015 (SP).
S. N. Bhat, Sr. Adv., Tarun Kumar Thakur, D. P. Chaturvedi, Ms.
Parvati Bhat, Ms. Anuradha Mutatkar, Advs. for the Appellant.
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Arpit Rai, Aviral Kashyap, Advs. for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with impugned judgment and
order dated 20.07.2021 passed by the High Court of Karnataka in Regular
First Appeal No. 100200/2015, by which the High Court has allowed the
said appeal preferred by respondent Nos. 3 and 4 herein – original
defendant Nos. 3 and 4 (hereinafter referred to as defendant Nos. 3 and
4) and has set aside the judgment and decree passed by the learned Trial
Court granting decree for specific performance of agreement to sell
dated 12.04.2005, the appellant herein - original plaintiff has preferred
the present appeal.
2. The facts leading to the present appeal in a nutshell are as
under: -
2.1 That the appellant herein – original plaintiff filed the suit for
specific performance of agreement to sell dated 12.04.2005. It was the
case on behalf of the plaintiff that she had entered into an agreement
with respondent No. 1 herein - original defendant No. 1 to purchase the
suit schedule property for a sale consideration of Rs. 29 lakhs. An advance
amount of Rs. 20 lakhs was paid under the said agreement. Defendant
No. 1 had earlier executed a general power of attorney in favour of
respondent No. 2 herein - original defendant No. 2. However, defendant
No. 2 was present when the plaintiff entered into an agreement to sell
with defendant No. 1. It was the case on behalf of the plaintiff that
thereafter, on 25.03.2008, defendant Nos. 1 and 2 approached the plaintiff
and her husband and sought payment of Rs. 6 lakhs. On 25.03.2008, the
plaintiff made further payment of Rs. 6 lakhs towards sale consideration
and an endorsement was made by defendant No. 1 on the agreement,
acknowledging the receipt of Rs. 6 lakhs. According to the plaintiff,
thereafter, despite repeated requests and demands, defendant No. 1 did
not execute the sale deed in favour of the plaintiff. They learnt that
defendant No. 2 by misusing the power of attorney executed by defendant
No. 1 in favour of defendant No. 2, clandestinely executed two sale
deeds in favour of defendant Nos. 3 and 4 only to defraud the plaintiff.
The plaintiff got served a legal notice to the defendants on 17.06.2010
calling upon defendant No. 1 to execute the sale deed in her favour by
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receiving balance sale consideration of Rs. 3 lakhs. Further, thereafter
defendant No. 1 did not execute the sale deed, the plaintiff filed the
present suit for specific performance of the contract/agreement to sell
dated 12.04.2005.
2.2 That original defendant No. 1 filed written statement and
admitted the execution of agreement to sell and specifically stated that
she is ready and willing to perform her part of contract. However,
defendant Nos. 2 to 4 filed separate written statements and took a
common defence that agreement to sell dated 12.04.2005 is a created
document. It was contended that power of attorney executed by
defendant No. 1 in favour of defendant No. 2 is a registered document
and without cancelling the registered power of attorney and without the
knowledge of defendant No. 2, defendant No. 1 in collusion with the
plaintiff had created the agreement to sell. It was also contended by
defendant Nos. 2 to 4 that agreement to sell dated 12.04.2005 is a bogus
document and no sale consideration is paid by the plaintiff.
2.3 The learned Trial Court framed the following issues: -
“i)
Whether the plaintiff proves that on 12.4.2005
defendant No. 1 has executed an agreement of
sale agreeing to sell the suit property for a total
consideration of Rs. 29 lakhs?
ii)
Whether the plaintiff proves that part sale
consideration of Rs. 26 lakhs has been paid to
the defendant No. 1?
iii)
Whether the plaintiff proves that
she was
always ready and willing to perform her part of
duty towards the contract?
iv)
Whether the plaintiff further proves that with
malafide intention and to defeat her right
accrued through the sale agreement dated
12.4.2005 defendant No. 2 had executed sale
deeds dated 3.5.2010 in favour of defendant
No. 3 and 4 and those sale deeds are nominal
sale deeds?
v)
Whether the defendant No. 2 to 4 prove that
sale agreement dated 12.4.2005 is a created
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document and by virtue of the same no
consideration had been passed?
vi)
Whether the plaintiff is entitled for a decree of
specific performance of contract?
vii)
What order or decree?”
2.4 On behalf of the plaintiff, her husband was examined as PW1
and two more witnesses were examined on behalf of the plaintiff. The
plaintiff produced nine documents as documentary evidence as exhibit
P1 to P9. Defendant No. 1 was examined as DW1 and defendant No. 2
was examined as DW 2.
2.5 On appreciation of evidence on record, the learned Trial Court
decreed the suit and passed a decree of specific performance. The
learned Trial Court found that defendant No. 1 being the absolute owner
of the suit schedule property has admitted the execution of agreement to
sell in favour of the plaintiff and has also admitted receipt of substantial
amount as part of the sale consideration. The learned Trial Court also
proceeded to hold that the sale deed executed by defendant No. 2 in
favour of defendant Nos. 3 and 4 are not binding on defendant No. 1 as
well as the plaintiff and therefore, the plaintiff was entitled to the relief
of specific performance of contract and to get the vacant possession of
the suit schedule property.
2.6 Feeling aggrieved and dissatisfied with the judgment and decree
passed by the learned Trial Court, the original defendant Nos. 3 and 4
only preferred an appeal before the High Court. By the impugned
judgment and order, the High Court has allowed the said
appeal and has
quashed and set aside the decree passed by the learned Trial Court
mainly relying upon and considering Section 20 of the Specific Relief
Act. The High Court has also observed that as there was no prayer or a
particular relief to declare that the sale deed in favour of defendant Nos.
3 and 4 is null and void and not binding on the plaintiff and defendant No.
1, such a relief could not have been granted by the learned Trial Court.
2.7 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the plaintiff preferred the present
appeal.
3. Shri S.N. Bhat, learned Senior Advocate appearing on behalf
of the original plaintiff has vehemently submitted that in the facts and
P. RAMASUBBAMMA v. V. VIJAYALAKSHMI & OTHERS
[M. R. SHAH, J.]
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circumstances of the case, the High Court has committed a grave error
in quashing and setting aside the decree passed by the learned Trial
Court for specific performance of agreement to sell dated 12.04.2005.
3.1 It is further submitted that when the original defendant No. 1
– original owner admitted the execution of the agreement and even
admitted the payment of substantial amount under the agreement, the
learned Trial Court rightly passed the decree of the specific performance
of the said agreement.
3.2 It is further submitted that even the High Court ought to have
appreciated that apart from the fact that original defendant No. 1 admitted
the execution of the agreement and receipt of payment of substantial
advance amount, original defendant Nos. 3 and 4 did not even enter into
the witness box. It is further submitted that the High Court has not properly
appreciated and considered the fact that the original of power of attorney
dated 28.01.1997 executed by defendant No. 1 in favour of defendant
No. 2, was handed over to the plaintiff at the time of execution of
agreement to sell, which was produced by the plaintiff in the present suit
as exhibit P6.
3.3 It is further submitted that the High Court has also erred in
holding that it was necessary for the plaintiff to seek cancellation of sale
deeds dated 03.05.2010 executed by defendant No. 2 in favour of
defendant Nos. 3 and 4, respectively. It is submitted that in
a suit for
specific performance it is not necessary for the agreement holder to
seek cancellation of sale deed executed in favour of a subsequent
purchaser and it is sufficient to implead the subsequent purchaser in the
suit and seek relief of specific performance against original owner and
also seek direction to the subsequent purchaser to join in the execution
of the sale deed in order to completely convey title to the agreement
holder. Reliance is placed upon the decisions of this Court in the cases
of Lala Durga Parsad and Anr. Vs. Lala Deep Chand and Ors.,
1954 SCR 360: AIR 1954 SC 75, Soni Lalji Jetha & Ors. Vs. Soni
Kalidas Devchand & Ors., (1967) 1 SCR 873: AIR 1967 SC 978,
R.C. Chandiok & Anr. Vs. Chuni Lal Sabharwal & Ors. (1970) 3
SCC 140: AIR 1971 SC 1238, Dwarka Prasad Singh & Ors. Vs.
Harikant Prasad Singh & Ors., (1973) 1 SCC 179 and Rathnavathi
& Anr. Vs. Kavitha Ganashamdas, (2015) 5 SCC 223.
3.4 It is further submitted that the High Court has also not properly
appreciated the fact that the transactions between defendant No.2 and
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defendant Nos. 3 to 4 were sham transactions, which were by defendant
No. 2 in favour of his own sisters-in-law. It is submitted that even the
sale consideration in the transaction between defendant No. 2 and
defendant Nos. 3 to 4 was alleged to have been paid by cash and that
too, a huge sum of Rs. 26 lakhs was alleged to have been paid by cash.
It is submitted that in any case defendant Nos. 3 and 4 never stepped
into the witness box.
3.5 It is submitted that therefore when the sale deed executed in
favour of defendant Nos. 3 and 4 by defendant No. 2 was sham in order
to defeat the right of the plaintiff pursuant to agreement to sell dated
12.04.2005 and the same was executed after the agreement to sell in
favour of the plaintiff and the plaintiff had paid a substantial advance
amount, the High Court has erred in applying Section 20 of the Specific
Relief Act.
3.6 Making the above submissions and also relying upon the
decisions of this Court in the case of Vasantha Viswanathan Vs. V.K.
Elayalwar, (2001) 8 SCC 133 (para 13) and in the case of Rathnavathi
(supra), it is prayed to allow the present appeal and quash and set aside
the impugned judgment and order passed by the High Court and
consequently to restore the decree passed by the learned Trial Court.
4. Though served nobody has entered appearance on behalf of
defendant Nos. 2 to 4. Even respondent No. 3 – defendant No. 3 is
served by substituted service, namely, by way of publication in two daily
newspapers. In that view of the matter, this Court has no other alternative
but to proceed further with the appeal ex-parte.
5. We have gone through the judgment and decree and the findings
recorded by the learned Trial Court as well as the judgment and order
passed by the High Court.
5.1 The learned Trial Court framed the following issues: -
“i)
Whether the plaintiff proves that on 12.4.2005
defendant No. 1 has executed an agreement of
sale agreeing to sell the suit property for a total
consideration of Rs. 29 lakhs?
ii)
Whether the plaintiff proves that part sale
consideration of Rs. 26 lakhs has been paid to
the defendant No. 1?
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iii)
Whether the plaintiff proves that she was
always ready and willing to perform her part of
duty towards the contract?
iv)
Whether the plaintiff further proves that with
malafide intention and to defeat her right
accrued through the sale agreement dated
12.4.2005 defendant No. 2 had executed sale
deeds dated 3.5.2010 in favour of defendant
No. 3 and 4 and those sale deeds are nominal
sale deeds?
v)
Whether the defendant No. 2 to 4 prove that
sale agreement dated 12.4.2005 is a created
document and by virtue of the same no
consideration had been passed?
vi)
Whether the plaintiff is entitled for a decree of
specific performance of contract?
vii)
What order or decree?”
5.2 Considering the fact that original defendant No. 1 – vendor –
original owner admitted the execution of agreement to sell dated
12.04.2005 and even admitted the receipt of substantial advance sale
consideration, the learned Trial Court decreed the suit for specific
performance of agreement to sell dated 12.04.2005. Once the execution
of agreement to sell and the payment/receipt of advance substantial sale
consideration was admitted by the vendor, thereafter nothing further
was required to be proved by the plaintiff – vendee. Therefore, as such
the learned Trial Court rightly decreed the suit for specific performance
of agreement to sell. The High Court, was not required to go into the
aspect of the execution of the agreement to sell and the
payment/receipt
of substantial advance sale consideration, once the vendor had
specifically admitted the execution of the agreement to sell and receipt
of the advance sale consideration; thereafter no further evidence and/or
proof was required.
5.3 Now, so far as the sale deeds executed by original defendant
No. 2 in favour of defendant Nos. 3 and 4 and the decree passed by the
learned Trial Court that the sale deeds executed by original defendant
No. 2 in favour of defendant Nos. 3 and 4 are not binding on defendant
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No. 1 as well as on the plaintiff is concerned, at the outset, it is required
to be noted that issue Nos. 4 and 5, reproduced hereinabove, were in
respect of the sale deeds executed by original defendant No. 2 in favour
of defendant Nos. 3 and 4 dated 03.05.2010. Therefore, specific issues
were framed on sale deeds dated 03.05.2010 executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4. In that view of the
matter, the High Court has erred in setting aside the decree passed by
the learned Trial Court by observing that as there was no specific relief/
prayer of cancellation of sale deeds dated 03.05.2010 executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4, therefore, the
learned Trial Court could not have passed the decree that the said sale
deeds are not binding on defendant No. 1 and the plaintiff. The High
Court has not noted the specific issue Nos. 4 and 5 framed by the learned
Trial Court, which were with respect to sale deeds dated 03.05.2010.
Therefore, as such, there was a lis between the parties in respect to sale
deeds dated 03.05.2005 executed by original defendant No. 2 in favour
of defendant Nos. 3 and 4 and even specific issues were framed, which
on appreciation of evidence were held against defendant Nos. 2 to 4.
Therefore, the High Court is not justified in quashing and setting aside
the judgment and decree passed by the learned Trial Court declaring
that sale deeds dated 03.05.2010 are not binding on
defendant No. 1 and
the plaintiff.
5.4 It is also required to be noted that on appreciation of evidence,
the learned Trial Court has specifically given the finding that the alleged
sale consideration paid by defendant Nos. 3 and 4 to original defendant
No. 2 for executing sale deeds dated 03.05.2010 have not been established
and proved by defendant Nos. 2 to 4. Therefore, there was a specific
finding given by the learned Trial Court on appreciation of evidence that
sale deeds dated 03.05.2010 were nominal sale deeds. The High Court
has brushed aside the same on the ground that even in agreement to sell
dated 12.04.2005, the amount was alleged to have been paid by cash.
However, it is required to be noted that so far as receipt of substantial
advance sale consideration mentioned in the agreement to sell dated
12.04.2005 has been specifically admitted by defendant No. 1. Therefore,
when it was specifically alleged that defendant No. 2 executed sale
deeds in favour of defendant Nos. 3 and 4, who are his sisters-in-law,
with a view to defeat the rights of the plaintiff and defendant No. 1 and
when it was alleged that they were nominal sale deeds, thereafter,
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defendant No. 2 was required to prove the receipt of sale consideration
mentioned in the sale deeds dated 03.05.2010, which defendant Nos. 2
to 4 have failed to do so.
5.5 It is also required to be noted that on appreciation of evidence,
learned Trial Court has specifically found that the stamp papers of
agreement to sell dated 12.04.2005 was purchased in the name of
defendant No. 2 and therefore defendant No. 2 was aware and in the
knowledge of agreement to sell dated 12.04.2005. It is also required to
be noted that even defendants did not reply to the legal notice served by
the plaintiff, which was issued before filing the suit.
5.6 In light of the aforesaid factual aspects and the findings recorded
by the learned Trial Court, the decision of this Court in the case of Lala
Durga Prasad & Ors. (supra) is required to be referred to. In paragraph
42, it is observed and held as under: -
“42. In our opinion, the proper form of decree is to
direct specific performance of the contract between
the vendor and the plaintiff and direct the subsequent
transferee to join in the conveyance so as to pass on
the title which resides in him to the plaintiff. He does
not join in any special covenants made between the
plaintiff and his vendor; all he does is to pass on his
title to the plaintiff. This was the course followed by
the Calcutta High Court in Kafiladdin v. Samiraddin
[AIR 1931 Cal 67] and appears to be the English
practice. See Fry on Specific Performance, 6th Edn.,
p. 90, para 207; also Potter v. Sanders [67 ER 1057].
We direct accordingly.”
The aforesaid decision has been subsequently referred to and
followed by this Court in the subsequent decision in the case of
Rathnavathi & Anr. (supra).
5.7 From the impugned judgment and order passed by the High
Court, it appears that the High Court has heavily relied upon Section 34
of the Specific Relief Act. However, considering the fact that specific
issues were framed with respect to sale deeds dated 03.05.2010 executed
by original defendant No. 2 in favour of defendant Nos. 3 and 4 and the
parties led the evidence also on the aforesaid issues and thereafter, when
the learned Trial Court had given findings on the said issues and thereafter,
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had granted the declaration that the sale deeds executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4 are not binding on
defendant No. 1 and the plaintiff and those sale deeds are nominal sale
deeds and that defendant Nos. 2 to 4 have failed to prove that agreement
to sell dated 12.04.2005 is a created document and by virtue of the same
no consideration has been paid, Section 34 of the Specific Relief Act,
upon which the reliance has been placed by the High Court will have no
application.
5.8 The High Court has set aside the judgment and decree passed
by the learned Trial Court on the ground that the relief under Section 20
of the Specific Relief Act, is a discretionary relief and therefore, in view
of the fact that original defendant No. 2 had executed sale deeds in
favour of defendant Nos. 3 and 4, the learned Trial Court ought not to
have exercised discretion in favour of the plaintiff for passing the decree
for specific performance. However, in the facts and circumstances of
the case narrated hereinabove and when the learned Trial Court
specifically gave the findings that defendant No. 1 – vendor specifically
admitted the execution of agreement to sell dated 12.04.2005 in favour
of the plaintiff by accepting a substantial advance consideration and that
defendant No. 2 was in the knowledge of the agreement to sell and
despite the same, he sold the same in favour of defendant Nos. 3 and 4,
who are his sisters-in-law and that too the
sale deeds found to be nominal
sale deeds, the learned Trial Court as such rightly decreed the suit for
specific performance and also rightly declared that sale deeds dated
03.05.2010 executed by original defendant No. 2 in favour of defendants
No. 3 and 4 are not binding upon the plaintiff and defendant No. 1. The
High Court has committed a grave error in reversing the judgment and
decree passed by the learned Trial Court by ignoring the vital facts of
the case which are either admitted or proved in the instant case.
6. In view of the above and for the reasons stated above, the
present appeal succeeds. The impugned judgment and order passed by
the High Court is hereby quashed and set aside and the judgment and
decree passed by the learned Trial Court is restored. In the facts and
circumstances of the case, there shall be no order as to costs.
Ankit Gyan and Anurag Bhaskar
Appeal allowed.
(Assisted by : Vrinda Singh, LCRA)
P. RAMASUBBAMMA v. V. VIJAYALAKSHMI & OTHERS
[M. R. SHAH, J.]