J Govindaraju Vs G R Visweswara Babu

THIS RSA IS FILED U/S 100 OF CPC AGAINST THE JUDGMENT & DECREE DATED 31.5.07 PASSED IN R.A.NO 128/04 ON THE FILE OF THE PRESIDING OFFICER, FAST TRACK COURT-III, KOLAR, DISMISSING THE APPEAL AND FILED AGAINST THE JUDGMENT AND DECREE DATED 15.7.04 PASSED IN OS 255/99 ON THE FILE OF THE PRL. CIVIL JUDGE (JR.DN), KOLAR.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 10.03.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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CORAM: HON'BLE MR JUSTICE RAVI V HOSMANI

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CAV JUDGMENT

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Challenging impugned judgment and decree dated 31.05.2007 passed in Presiding Officer, Fast Track Court-III, Kolar, and judgment and decree dated 15.07.2004 passed by Prl. Civil Judge (Jr.Dn.), Kolar, in O.S.no.255/1999, this appeal is filed.

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Appeal was by defendants in OS no.255/1999 filed for

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specific performance in respect of property bearing khata

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no.541, assessment no.209/13 of vacant site no.11, measuring East-West - 30ft. and North-South - 40ft. situated at Keelukote village, Kasaba hobli, Kolar (“Suit Property” for short).

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In plaint, it was stated defendant no.1 was absolute owner of suit property. For family necessity on 27.09.1997, he agreed to sell it to plaintiff by executing agreement of sale for total sale consideration of Rs.50,000/- by receiving Rs.45,000/from plaintiff as advance, handing over original title deeds and agreeing to receive Rs.5,000/- at time of execution of sale deed. When he approached defendant no.1 with balance amount, defendant no.1 postponed several times, without cogent reason. It was stated plaintiff was ever ready and willing to perform his part of contract and time was not essence of contract, defendant no.1 failed to execute sale deed by receiving balance amount.

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It was stated, during first week of November 1998, plaintiff came to know about defendant no.2 negotiating with defendant no.1 for purchase of suit property. Immediately plaintiff approached them along with Narayana Swamy and SR Nagaraj Gupta, and cautioned against entering into any

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transactions with regard to suit property. Both defendants assured him they would not transact with regard to suit property. Contrary to same and despite having knowledge of earlier agreement with plaintiff, defendant no.2 purchased suit property on 27.11.1998 for Rs.45,000/- with sole intention of causing injury or loss to plaintiff. Immediately, 15.04.1999, he got issued legal notice calling upon defendant no.1 for execution of sale deed in favour of plaintiff and defendant no.2 to join in same. But after receipt, defendant no.1 got issued untenable reply with evasive denial. Hence, suit was filed.

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On appearance, defendants filed separate written statements denying plaint averments and suit claim. In written statement filed by defendant no.1, ownership of suit property was admitted, but execution of agreement of sale on 27.09.1997 and receipt of advance sale consideration of Rs.45,000/-, plaintiff approaching him with balance amount, delivery of original records and allegations about default on terms of agreement etc. alleged in plaint were denied. He stated defendant no.2 had purchased suit property from him on 27.11.1997. It was stated suit was without cause of action.

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It was specifically stated, plaintiff and his father -

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Ramappa were money lenders and running chits in Kolar. And as customer, defendant no.1 had raised hand loans from plaintiff and timely repaid same with interest. It was stated plaintiff was charging interest at 60% per annum and even plaintiff's mother and brother were also into money lending. It was stated defendant no.1 had borrowed Rs.5000/- from plaintiff's mother and repaid it. Thereafter he borrowed Rs.30,000/- from plaintiff's younger brother, but paid only Rs.15,000/- and remaining amount was outstanding. It was stated at time of lending, plaintiff's brother had insisted on any property as security. Due to good relationship with plaintiff's family, he had put signatures on blank papers and handed over original title deeds of suit property. It was stated, he had repaid Rs.15,000/- through Ramappa - plaintiff's father in August 1988, apart from Rs.20,000/- to plaintiff's younger brother and Rs.10,000/to plaintiff, which totaled to Rs.45,000/-. It was stated, defendant no.1 was due Rs.5,000/and was ready to repay same.

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It was stated, in legal notice dated 15.04.1999,

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plaintiff admitted suit property was purchased for Rs.60,000/-

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and defendant no.1 had spent Rs.10,000/towards

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registration. After two years value of property had doubled to more than Rs.1,20,000/- and no prudent man would sell it for Rs.50,000/-. Therefore, there was no agreement of sale between plaintiff and defendants other than loan transaction. Taking advantage of signed blank papers, plaintiff was claiming interest over suit property. It was stated, defendant no.1 had already sold suit property to defendant no.2 for total sale consideration of Rs.1,50,000/- and delivered possession and sought for dismissal of suit.

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In his written statement, defendant no.2 denied alleged agreement of sale. He also denied defendant no.1 was owner of suit property as on date of suit. Even allegations about plaintiff approaching defendant no.2, informing about agreement of sale, payment of advance sale consideration were denied. It was stated suit was without cause of action. It was stated, on 27.11.1998, for legal necessity defendant no.1 sold suit property to defendant no.2 for total sale consideration of Rs.66,000/- and he was put in possession. Thus, defendant no.2 was bonafide purchaser. It was stated, alleged agreement of sale was unregistered, fabricated and not valid document. It

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was stated, even as per plaintiff, there was negotiation between plaintiff and defendant no.1 in November 1998. But suit was filed after 8 months, though plaintiff had knowledge of purchase of suit property by defendant no.2. Therefore plaintiff was not entitled for relief and sought dismissal of suit.

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Based on pleadings, trial Court framed following:

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ISSUES:

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Does the plaintiff proves that 1" defendant being the absolute owner in lawful possession and enjoyment of the suit schedule property, having family necessity had agreed to sell the suit property at his favour for the valuable consideration of Rs.50000/-, in part performance of contract on the receipt of part consideration of Rs.45,000/- and agreeing to receive the remaining consideration of Rs.5000/- at the time of execution of sale deed has executed an agreement of sale in favour of plaintiff on 27.9.97 and had inducted the plaintiff into the possession of the suit property in part performance of the contract?

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Does the plaintiff further proves that the time is not an essence of contract?

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Does the plaintiff further proves that ever since the date of suit agreement he is ever ready and willing to perform his part of contract, and defendant was refused to perform his part of contract?

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Does the plaintiff further proves that the 2nd defendant having notice of existence of the suit contract between himself and 1" defendant had purchased the suit schedule property?

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Does the 1 defendant proves that the suit agreement is a money lending transaction between himself and the plaintiff?

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Does the 1 defendant further proves that the 2^nd defendant is the owner in possession and enjoyment of the suit schedule property having been purchased for the consideration Rs. 1,50,000/-?

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Does the plaintiff further proves that he is entitled for the specific performance of suit contract?

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What decree or order?

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ADDITIONAL ISSUES:

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Whether defendant no.2 proves that suit is maintainable as contended in para one of his written statement?

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Whether defendant no.2 proves that plaintiff and first defendant have fabricated with active collusion as contended in para 4 & 6 of his written statement?

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Whether the defendant no.2 proves that he is the bonafide purchaser as contended in para 6 of his written statement?

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What order or decree?

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In trial plaintiff examined himself and three others as PWs.1 to 4 and got marked Exs.P1 to P13. In rebuttal, defendants no.1 and 2 and another were examined as DWs.1 to 3 and got marked Exs.D1 to D4.

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On consideration, it answered issues no.1 to 4, 7 in affirmative; issues no.5, 6, addl. issues no.1 to 3 in negative; issue no.8 and addl. issue no.4 by decreeing suit and directing

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defendants no.1 and 2 to execute registered sale deed on receipt of balance sale consideration of Rs.5,000/- from plaintiff. However, liberty was given to plaintiff to deposit Rs.5,000/- before this Court and get execution of registered

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sale deed through Court at cost of plaintiff in case defendants failed to execute registered sale deed.

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Aggrieved thereby, defendant no.2 filed RA

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no.128/2004 on various grounds. Based on same, first appellate Court framed following:

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POINTS:

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1. Whether the second defendant is a bonafide purchaser?

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1. Whether the plaintiff proves that second defendant had notice of agreement of sale in his favour by the first defendant?

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1. Whether the second defendant proves that the sale agreement has been concocted by the plaintiff and first defendant?

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1. Whether the judgment and decree of the lower court is sustainable?

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1. What order?

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On consideration, it answered points no.1 and 3 in negative; points no.2 and 4 in affirmative and point no.5 by dismissing appeal.

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Sri K Shrihari, learned counsel for defendant no.2 submitted, appeal was against concurrent findings in suit for specific performance of agreement of sale. It was submitted, plaintiff’s claim was based on agreement of sale in respect of suit property, executed on 27.09.1997 after receiving Rs.45,000/- as advance amount out of total sale consideration of Rs.50,000/-. It was submitted, showing Rs.5,000/- only as balance amount, without any obligation placed on defendant no.1 in recitals of agreement, indicated there was no intention to sell. Besides, issuance of legal notice on 25.04.1999 after delay of eight months established lack of readiness and willingness of plaintiff. On other hand, defendant no.2 was bonafide purchaser for total sale consideration of Rs.66,000/and in possession of suit property. Therefore, trial Court erred in decreeing suit in toto.

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It was submitted, though plaintiff claimed to have informed defendant no.2 against purchase, no evidence was led to substantiate same. In cross-examination, plaintiff admitted he was aware of negotiation between defendants no.1 and 2. Failure to forthwith issue notice would falsify plaintiff’s

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contention about purchaser’s knowledge of agreement of sale prior to purchase. Same would disentitle plaintiff for specific performance. It was submitted, plaintiff also admitted, he was unaware of denomination of currency notes given to defendant no.1 as advance sale consideration, which would cast serious doubt about sale agreement. It was submitted, plaintiff admitted, he did not have sufficient source of income at time of entering into agreement of sale with defendant no.1. He failed to produce any document to substantiate income as on date of alleged agreement or capacity to pay balance amount. It was contended, entire plaint pleadings were mere assertions without supporting documents. Thus, plaintiff’s claim was without basis. It was submitted while passing impugned judgment and decree, both Courts failed to appreciate above.

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It was submitted, trial Court erroneously held plaintiff had proved Ex.P1 - agreement of sale and plaintiff was ready and willing to perform his part of contract. It failed note that plaintiff had knowledge of transactions between defendants no.1 and 2, but failed to take action, disentitling for discretionary relief. Further, defendants established failure by

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plaintiff to prove readiness and willingness. Therefore, suit ought to have been dismissed.

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In appeal, without re-appreciation, first appellate Court concurred with findings of trial Court. Appeal was dismissed mainly on ground that at time of purchase, defendant no.2 failed enquire about original title deeds from defendant no.1 and holding defendant no.2 was not bonafide purchaser. Highlighting fact that plaintiff had not sought for cancellation of sale in favour of defendant no.2 even though sale was prior to filing of suit, by relying on decision of Hon'ble Supreme Court in case of B. Vijaya Bharathi v. P. Savithri & Ors, reported in (2018) 11 SCC 761, for proposition that failure of plaintiff to seek cancellation of subsequent transactions which would affect contract would indicate lack of willingness.

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Relying on decision of Hon'ble Supreme Court in case of Dheeraj Developers Pvt. Ltd., v. Om Prakash Gupta, reported in (2016) 12 SCC 397, it was submitted, burden lies on plaintiff to demonstrate readiness and willingness continuously from date of contract. When balance amount was

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only Rs.5000/-, failure to pay same and get sale deed executed as early as possible by itself disprove readiness and willingness. Reliance was also placed on decision of Hon'ble Supreme Court in case of U.N. Krishnamurthy (since deceased) Thr. Lrs.

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v. A.M. Krishnamurthy, reported in (2023) 11 SCC 775, to contend, in case plaintiff fails to prove or substantiate financial capacity to perform his part of contract, same would disentitle relief of specific performance.

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Learned counsel further relied on decision of Hon'ble Supreme Court in case of P. Daivasigamani v. S. Sambandan, reported in (2022) 14 SCC 793, to contend Section 16 (c) of Specific Relief Act, mandated plaintiff seeking relief of specific performance to prove both ‘readiness’ and ‘willingness’ on his part. On above grounds sought for answering substantial question of law and allow appeal.

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On other hand, Smt.Rakshitha V.N., learned counsel appearing for Sri K Raghavendra Rao, Advocate for plaintiff submitted, appeal was against concurrent findings leaving no scope for interference. It was submitted as per Ex.P1, defendant no.1 entered into agreement of sale in respect of suit

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property for a total consideration of Rs.50,000/- and receiving Rs.45,000/- as advance. It was submitted, as per recital in Ex.P1, time was not essence of contract. Thus, cause of action arose only on denial by defendant no.1 to execute sale deed. It was submitted, plaintiff specifically pleaded that before purchase of suit property by defendant no.2, he along with PW.4 had informed him about Ex.P1. Same was established by oral evidence. Therefore, purchase of suit property by defendant no.2 under Ex.D5 was with knowledge of prior transaction. Consequently, defendant no.2 was not bonafide purchaser.

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It was submitted, main contention of defendant no.2 was that plaintiff failed to establish readiness and willingness. But, plaintiff had specifically asserted in Ex.P5 - legal notice and also in plaint that he was ever ready and willing to pay balance sale consideration. Taking note of same and failure on part of defendants to disprove admissions, both Courts had rightly decreed suit. It was submitted, contention about readiness and willingness was elaborately discussed by both Courts. Therefore, same could not be interfered by this Court. It was submitted, admittedly defendant no.2 had not disputed

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readiness and willingness of plaintiff. Even on this count, said contention was liable for rejection. It was submitted, when plaintiff pleaded about knowledge of transaction and informing defendant no.2, same was not disproved in cross-examination. Hence, claim of bonafide purchaser would not arise.

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It was submitted, even contention about delay in issuing legal notice was without any basis as plaintiff had specifically pleaded about his readiness and informing defendant no.2 about earlier transactions. It was submitted, issuance of legal notice, in any case was within period of limitation.

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It was submitted, in cross-examination suggestion was made about failure to give notice, but PW.1 specifically stated that he had approached defendants and informed same and he was accompanied by PW.4, who corroborated same. Nothing was elicited to disprove said assertion.

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It was submitted, in cross-examination DW.2 (witness of Ex.D5 sale deed) deposed about payment of amount to plaintiff, in cross-examination he failed to disclose particulars such as day, month or year of payment. DW.2 also admitted

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that at time of purchase of suit property defendant no.2 was aware of transaction between plaintiff and defendant no.1 and he had supervised sale.

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It was submitted, defendant no.2 (examined as DW.3) admitted in cross-examination that he enquired and confirmed defendant no.1 was owner of suit property, but had not seen original title deeds and further admitted, except tax paid receipts, defendant no.1 had not given original title documents at time of execution of Ex.D5. Hence, both Courts after due appreciation of evidence rightly held defendant no.2 failed to establish that he was bonafide purchaser.

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It was further submitted, production of original title deeds would establish genuineness of Ex.P1. If plaintiff was in unlawful possession of title documents, defendant no.1 ought to have taken appropriate steps in law for return. It was submitted, despite contest by defendant no.1 before trial Court, failure to file appeal against judgment and decree of trial Court or against judgment and decree of first appellate Court, amounting to decree attaining finality against defendant no.1. Relying on decision of Hon'ble Supreme Court in case of Manjit

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Singh & Anr. v. Darshana Devi and Ors., reported in 2024

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SCC OnLine SC 3431, it was contended onus to establish bonafide purchaser would be on purchaser.

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She also relied on decision of High Court of Madras, in case of Arunachala Thevar v. Govindarajan Chettiar, reported in 1976 SCC OnLine Mad 257, to contend that purchaser would deemed to be in notice of anything which he failed to discover either because he did not enquire or investigate title of property. On above grounds sought dismissal of appeal.

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Heard learned counsel, perused impugned judgment and decree and records.

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This appeal was admitted on 14.11.2011 to consider

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following substantial questions of law:

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a) Whether first appellate Court was justified in holding that 2^nd defendant was aware of previous transaction between 1^st defendant and plaintiff in absence of any written notice. Particularly, when plaintiff had knowledge of negotiation of sale between 1^st defendant and 2^nd defendant admitted in cross examination dated 06.01.2004?

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b) Whether Courts below have kept in mind Section 20 of Specific Relief Act, while decreeing suit?

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This appeal is by purchaser (defendant no.2) against concurrent findings in suit for specific performance of agreement of sale. Suit claim was based on assertion that defendant no.1 was owner of suit property, due to legal necessities had agreed to sell it to plaintiff for total sale consideration of Rs.50,000/- and executed Ex.P1 - agreement of sale on 27.09.1997 by receiving Rs.45,000/- as advance and agreeing to execute registered sale deed by receiving balance amount of Rs.5,000/-. In plaint, it was further asserted that plaintiff was ever ready and willing to perform his part of contract and had called upon defendant no.1 for execution of sale deed several times, but postponed by defendant no.1. It is also asserted when plaintiff got information about defendant no.1 attempting to sell suit property to defendant no.2 disregarding Ex.P1 agreement of sale, he cautioned defendant no.2 against sale transaction and also got issued Ex.P5 - legal notice. Despite same, suit property was purchased by defendant no.2 under Ex.D5 sale deed. Therefore, plaintiff filed suit praying for specific performance of Ex.P1 and for defendant no.2 to join in execution of sale deed. Plaintiff examined himself, attestor and scribe of Ex.P1 and person who

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accompanied plaintiff at time of cautioning defendant no.2, as

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PWs.1 to 4. Documents relied upon were agreement of sale dated 27.09.1997, Sale deed dated 03.07.1997, agreement of sale dated 22.02.1997, sale deed dated 27.11.1998, legal notice dated 15.04.1999 and acknowledgment, reply notice dated 22.04.1999, demand register extract, assessment register extract, tax paid receipts, affidavit, deposition of PW.1 in Misc.no.11/2002 and Voters list extract as Exs.P1 to P13.

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On other hand, defendant no.1 denied execution of Ex.P1, asserted lack of any intention to sell suit property and on other hand claimed there was only loan transaction with plaintiff’s father, of which there was part repayment but, due amount was Rs.15,000/-, which he was ready to pay. While, defendant no.2 denied Ex.P1 and about he having knowledge of it prior to Ex.D5 sale deed in his favour. He claimed to be bonafide purchaser. To establish same, defendant no.1, attestor of Ex.D5 and defendant no.2 deposed as DWs.1 to 3. Documents relied by defendants were particulars of stamp paper used to draw Ex.P1, Small dairy books, sale deed dated 27.11.1999, endorsement by Sub-Registrar, Form no.15,

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Assessment Register Extracts and Tax Paid Receipts as Exs.D1 to D10.

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While passing impugned judgment and decree, trial Court took note of rival pleadings and evidence led by parties. It observed there was no dispute about defendant no.1 being owner of suit property and there was no material to substantiate plaintiff being put in possession. It observed deposition of PW.1 coupled with deposition of PWs.2 to 4 was in tune with plaintiff’s case. It noted suggestions about manner of payment of advance amount would not further contention of defendants. Referring to testimony of PWs.2 and 3 - attestor and scribe, who admitted their signatures on Ex.P1, presence of defendant no.1 at time of it’s execution and payment of sale consideration to hold Ex.P1 as proved.

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It noted deposition of PW.4, person who accompanied plaintiff when he approached defendants and apprised defendant no.2 of earlier agreement of sale in his favour, to conclude plaintiff had established knowledge of Ex.P1 by defendant no.2 prior to execution of Ex.D5.

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Insofar as contention of defendant no.1 about existence of loan transaction with plaintiff’s family members, signing on some blank papers and misuse of same for drawing agreement of sale and Ex.P1 being fabricated, trial Court observed failure to produce any material to substantiate loan transaction and admission about not obtaining receipt on repayment, to conclude failure to establish existence of loan transaction.

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Trial Court rejected allegation of Ex.P1 being drawn on blank signed papers by noting that stamp paper was issued by Treasury on 26.09.1997 and drawing of agreement of sale on 27.09.1997. Insofar as contention that value of suit property was more than Rs.1,20,000/- and therefore, grant of specific performance would be inequitable, it noted suit for specific performance could not be opposed merely on ground of inadequacy of sale consideration unless it was an unconscionable contract.

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Thereafter, it adverted to contention of defendant no.2 being bonafide purchaser on ground that there was no disclosure by defendant no.1 about earlier agreement of sale

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with plaintiff. It observed, though defendant no.2 took specific

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plea and also deposed about being unaware of earlier agreement of sale in favour of plaintiff and nothing material was elicited in cross-examination, it noted that plaintiff examined PW.4, who had accompanied him when he met defendants and urged defendant no.2 not to enter into transaction in respect of suit property. It also noted, even defendant no.1 had examined DW.2, father-in-law of defendant no.2, who admitted he was aware of transaction between plaintiff and defendant no.1 but claimed that he had not informed defendant no.2 about same. It observed, it would be unnatural for a father-in-law not to mention about any defect or complication in respect of suit property, when he knew about defendant no.2 intending to purchase same. On said reasoning, it held failure on part of defendant no.2 to establish that he was bonafide purchaser.

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Taking note of absence of any specific clause stipulating time limit for execution of sale deed, in Ex.P1, trial Court held time was not essence of contract. Referring to specific pleading in plaint about readiness and willingness to perform his part of contract, its reiteration in deposition of

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PW.1 as well as said plea being mentioned in Ex.P5 legal notice, whereas defendants totally denied Ex.P1, held plaintiff had established said issue as well as default committed by defendant no.1. On above conclusions, trial Court decreed suit.

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In Appeal, first appellate Court noted that defendant no.1 had not filed appeal and appeal was only by defendant no.2 on limited grounds that finding about Ex.P1 being proved, time not being essence of contract, readiness and willingness on part of plaintiff and default committed by defendant no.1, had attained finality. After taking note of pleadings and material placed on record by both sides, it held defendant no.2 failed to establish himself as bonafide purchaser on ground that he had failed to verify reason for non-availability of original title deeds with defendant no.1 and handing over of same at time of purchase of suit property by defendant no.2 and same was corroborated by deposition of DW.2. It observed, any person buying immovable property would normally ask for and verify existence of all title deeds and contention of defendant no.2 that he believed defendant no.1 etc., would not dispel duty to verify and held failure of defendant no.2 to establish himself as bonafide purchaser.

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Further, on ground that defendant no.2 had not pleaded about Ex.P1 being concocted nor made such suggestion in cross-examination of PW.1 as well as noting that stamp paper on which agreement of sale was drawn was purchased on same day, it held failure to establish Ex.P1 was concocted. Finally observing that trial Court had rightly appreciated evidence and passed judgment and decree, dismissed appeal.

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Main grounds urged in this appeal are, as per plaintiff, total sale consideration for agreement of sale was Rs.50,000/-, with advance of Rs.45,000/- was paid leaving balance amount of Rs.5,000/-, without any obligation on seller or fixing any period of time. There was no explanation for such omission. It was further contended that Ex.P1 was allegedly executed on 27.09.1997, issuance of legal notice on 15.04.1999 at Ex.P5, but, filing of suit was on 16.07.1999, which was after more than eight months from date of sale – Ex.D5 dated 27.11.1998 in favour of defendant no.2. Despite having knowledge of negotiation between defendants no.1 and 2, failure to take

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steps immediately would disentitle plaintiff to relief of specific

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performance.

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Unlike, specifically contended plaintiff failed to substantiate his claim approaching defendant no.2 and asking him to forebear from entering into transaction in respect of suit property. On contrary contentions that plaintiff admitted of having knowledge of negotiation between defendants and failure to take timely action would disentitle plaintiff from discretionary relief of specific performance. It was further contended since sale in favour of defendant no.2 prior to suit, plaintiff ought to have sought for cancellation of sale deed as per ratio in of B. Vijaya Bharathi’s case (supra). Relying on decisions in Dheeraj Developers Pvt. Ltd. and U.N. Krishnamurthy’s cases (supra), it was contended readiness and willingness has to be demonstrated continuously from date of agreement. Further, relying on decision in P. Daivasigamani’s case (supra), it was contended plaintiff failed to prove readiness and willingness.

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Defendant no.2 also contends, despite asserting prior knowledge by defendant no.2 about Ex.P1, plaintiff did not lead

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evidence to substantiate same. Therefore, defendant no.2 was bonafide purchaser and both Courts concurrently erred in holding otherwise.

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Insofar as contention about readiness and willingness, it is seen against judgment and decree passed by trial Court, appeal was filed only by defendant no.2 and decree attained finality insofar as defendant no.1. In view of above, challenge by defendant no.2 would require to be confined only to finding about his being bonafide purchaser. In fact, substantial question of law framed is about whether finding about defendant no.2 was not bonafide purchaser is perverse, when plaintiff had knowledge of negotiation for sale between defendants no.1 and 2 and whether grant of specific performance was contrary to Section 20 of SRA?

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Under very similar circumstances, High Court of Gujarat in case of Bharatbhai Parshotambhai Gohel v. Niravkumar Jitendrabhai Jethva, reported in 2018 SCC OnLine Guj 2340, held as follows:

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37. In the aforesaid context, I may refer to and rely upon a three-Judge Bench decision of the Bombay High Court in the case of Bhup Narain Singh v. Gokhul Chanda Mahton, [(1934) 36 BOMLR

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421]. In the said case, the Bombay High Court was dealing with a matter arising under the Specific Relief Act, 1877. The Court had the occasion to consider Section 27(b) of the Specific Relief Act, 1877 (old Act) now Section 19(b) of the 1963 Act. I may quote the relevant observations:

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“11. It will be convenient to state the material portions of the section, which are as follows:

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“27. Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against

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(a) either party thereto;

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(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.”

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12. In their Lordships' opinion, the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships' opinion, it is clearly for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which, prima facie, he had no right to get. Further, the subsequent transferee is the person within whose knowledge the facts as to whether he has paid and whether he had notice of the original contract lie, and the provisions of Sections 103 and 106 of the Indian Evidence Act, 1872, have a bearing on the question. The plaintiff does not necessarily have knowledge of either matter. In a case in 1862 before this Board, Varden Seth Sam v. Luckpathy Royjee Lallah (1862) 2 M.I.A. 303, an equitable lien by deposit of title-deeds was enforced against a subsequent transferee of the property. In delivering the judgment of this Board, Lord Kingsdown stated (p. 319):

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Though both the third and the last Defendants pleaded, in effect, that they were bona fide purchasers for value, without notice, yet they did not prove that defence, though the Plaintiff charged notice and collusion with the first Defendant.

¶207

And, later (p. 322):

¶208

The question to be considered is, whether the third and sixth Defendants respectively possessed the land free from that lien, whatever its nature. As one who owns property subject to a charge can, in general, convey no title higher or more free than his own, it lies always on a succeeding owner to make out a case to defeat such prior charge. Let it be conceded that a purchaser for value, bona fide, and without notice of this charge, whether legal or equitable, would have had in these Courts an equity superior to that of the Plaintiff, still such innocent purchase must be, not merely asserted, but proved in the cause, and this case furnishes no such proof.

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14. Although under Section 54 of the Transfer of Property Act, 1882, the appellant's agreement for sale does not of itself create any interest in or charge on the property, their Lordships are of opinion that the rule of procedure stated by Lord Kingsdown is applicable to the present case under Section 27(b) of the Specific Relief Act. This view under the Specific Relief Act has been taken in a number of cases in India, of which it is sufficient to refer to Himatlal v. Vasudev Ganesh (1912) I.L.R. 36 Bom. 446 S.C. : 14 Bom. L.R. 634, Baburam Bag v. Madhb Chandra Pollay (1913) I.L.R. 40 Cal. 565, Tiruvenkatachariar v. Venkatachariar, Naubat Rai v. Dhaunkal Singh (1916) I.L.R. 38 All. 184 and Muhammad Sadik Khan v. Masihan Bibi (1930) I.L.R. 9 Pat. 417.

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15. Their Lordships' attention was drawn to only one decision to a contrary effect, viz., Peerkha v. Bapu, but their Lordships prefer the earlier Bombay decision in Himatlal's case.

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16. Counsel for defendant No. 4 prayed in aid certain decisions on the somewhat analogous provisions of the insolvency statutes. The first of these was Official Assignee v. Khoo Saw Cheow [1931] AC. 67, a case under Section 50(1) of the Bankruptcy Ordinance of the Straits Settlements, which, so far as material, provides:

¶215

Any settlement of property, not being…a settlement made in favour of a purchaser. in good faith and for valuable consideration,…shall, if the settlor becomes bankrupt within two years after the date of the settlement, be absolutely void as against the official assignee.

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17 It was held by this Board, upon construction of the section, that the onus is upon the Official Assignee to prove that a conveyance which he is seeking to set aside thereunder was not made in good faith and for valuable consideration. In their Lordships' opinion, that section is not in pari casu with the section of the Specific Relief Act in several respects. In the first place, the structure of that section is different, in that it does not provide a general rule with a permitted exception, but defines the area of voidance, and the prior settlements that are outside that area are expressly excluded from invalidation by Section 52 of the Ordinance. In the second place, the operation of the section is the opposite of the operation of Section 27 of the Specific Relief Act, in that it renders void an earlier right in favour of a later one. That decision was followed in Official Receiver v. P.L.K.M.R.M. Chettyar Firm (1930) L.R. 58 I.A. 115 S.C. : 33 Bom. L.R. 867, which arose under Section 53 of the Provincial Insolvency Act, 1920, and in Pope v. Official Assignee (1933) L/R. 60 I.A. 362 S.C. : 36 Bom. L.R. 137, which arose under Section 55 of the Presidency-towns Insolvency Act, 1909. The provisions of these two Acts are similar to those of the Straits Settlements Ordinance. It may further be observed that, before deciding to file a suit, the Official Assignee or receiver has available any information to be

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obtained from the insolvent, and, in the case of the Straits Settlements Ordinance (Section 31) and of the Presidency-towns Insolvency Act (Section 36), he has the power, through the Court, of obtaining full information.

¶220

18. Their Lordships accordingly agree with the view of the Subordinate Judge that the onus is upon defendant No. 4 to bring himself within the exception in Section 27 of the Specific Relief Act, and, as already indicated, their Lordships agree with the learned Judges of the High Court that there is no sufficient evidence either on the question of payment or on the question of notice. The appellant is, therefore, entitled to the relief sought by him.”

¶221

38. Let me also refer to and rely upon a decision of this Court in the case of Ghanshyambhai Dhirubhai Barvaliya v. Rasikbhai Dhirubhai Ambaliya [Appeal from Order No. 457 of 2016 decided on 10^th January 2017]. The relevant observations are as under:

¶222

“14. Now, this takes the Court to decide whether one of the subsequent purchasers i.e. the appellant herein is a bona fide purchaser of the subject land or not. In order to examine this aspect, it is necessary to consider the conduct of the subsequent purchasers before execution of sale deed dated 03.09.2014. It is settled principle of law under Section 19(b) of the Specific Relief Act that specific performance of contract may be enforced against any other person claiming under him by a title arising subsequently to the contract. If a person, as an owner of the property, has entered into an agreement to sale, he cannot, thereafter, convey the same property to any other person, as after prior agreement to sale, he cannot be said to be free owner of the

¶223

property. If the owner alienates the property, he can alienate it only subject to the rights created under the prior agreement to sale. It is the case of the appellant i.e. subsequent purchaser that he has no knowledge about execution of sale agreement inter se between

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plaintiff and defendant No. 1 and, therefore, they have bonafide entered into the registered sale deed dated 03.09.2014 without notice of prior sale agreements and paid full value in good faith. Upon re-appreciation of the events, which occurred before and after registered sale deed dated 03.09.2014, it shows that the defendants with unusual haste, carried out the sale deed. The obvious reason is such that the sale deed executed and registered on 03.09.2014 discloses that the appellant was aware of pending proceedings being Special Civil Suit No. 405 of 2008 between defendant No. 1 and his predecessor in title. Admittedly, the dispute came to be resolved between the parties to the said suit on 12.09.2014 and prior to it, the sale deed was executed and registered. The said sale deed indicates that the appellant and respondent No. 3 herein have paid amount of consideration by way of various cheques of the date 01.09.2014 to 04.09.2014. Admittedly, the amounts of cheques were withdrawn by defendant No. 1 on 16.09.2014 and 17.09.2014 as per the statement of account annexed with the affidavit produced before this Court during the course of hearing. It is a matter of fact that though the dispute has been resolved on 12.09.2014, the suit was disposed of only on 02.10.2014. Normally, there is no reason to consider about withdrawal of the amounts on the part of the original owner defendant No. 1 but, in view of the peculiar facts of this case, conduct of the defendants goes to suggest that before the issue is resolved in a pending suit between defendant No. 1 and his predecessor in title, the sale deed was executed and registered and meanwhile, the amounts of consideration were withdrawn in cash by the original owner i.e. defendant No. 1 and thereafter, the Court has passed the order of disposal of the suit on 02.10.2014. This speaks a lot about conduct of the defendants, who in collusion, joined hands to frustrate the sale agreements in question. It requires to be considered here that the

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defendants with unusual haste, carried out the sale deed, where such transactions, as a rule, are carried out with appropriate inquiry and, more particularly, after obtaining title clearance certificate and also by publishing notice in newspaper before purchase. Admittedly, no such steps have been taken by the subsequent purchasers i.e. the appellant and respondent No. 3 herein. Not only that, they have not bothered to inquire about the whereabouts of the original title deeds. One more significant aspect of the case required to be considered is such that defendant No. 1 agreed to sale the subject land to the plaintiff for consideration of Rs. 51 lacs which was fixed in the year 2008 whereas, the defendants inter se fixed the sale price of the subject land of Rs. 17,50,000/in the year 2014. Meaning thereby, from 2008 to 2014, price of the subject land has been reduced to about 66% which can never be believed by any prudent man dealing in the transaction of the immovable property and further, the Court cannot overlook or ignore the existing scenario in the market about the prices of the land during the period in question.

¶232

15. The plain language of Sub-Section (b) of Section 19 of the Specific Relief Act shows that subsequent transferee can retain the benefit of transfer by purchase, which prima facie, he had right to get, only after satisfying two conditions i.e. (1) he must have paid the full value for which, he purchased the property and; (2) he must have paid it in good faith and without notice of prior contract. The burden of proof is upon the subsequent purchaser to establish existence of these two conditions in order to see that his right prevails over the prior agreement of sale. In the case on hand, the conduct of the defendants themselves indicates that the appellant herein is not a bona fide purchaser because, the sale deed came to be executed and registered with unusual rapidity. Normal procedure for sale/purchase of

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immovable property as a rule is not such which is adopted in the present case. Hence, required ingredients of Section 19(b) of the Specific Relief Act are missing in this case and hence, protection of Section 19(b) is not available to the subsequent purchaser i.e. appellant herein.”

¶237

39. In the aforesaid context, let me refer to and rely upon a decision of the Supreme Court in the case of Ram Niwas (dead) Lrs. v. Bano (smt.) [(2000) 6 SCC 685]. In the said case before the Supreme Court, the scope of Section 19(b) of the Specific Relief Act read with explanation II to Section 3 of the Transfer of Property Act and the provisions of Section 20(2) of the Specific Relief Act, 1963 fell for consideration. I may quote few relevant observations made in the judgment:

¶238

“3 Section 19 provides the categories of persons against whom specific performance of a contract may be enforced. Among them is included, under clause (b), any transferee claiming under the vendor by a title arising subsequently to the contract of which, specific performance is sought. However, a transferee for value, who has paid his money in good faith and without notice of the original contract, is excluded from the purview of the said clause. To fall within the excluded class, a transferee must show that:

¶239

(a) he has purchased for value the property (which is the subject-matter of the suit for specific performance of the contract);

¶240

(b) he has paid his money to the vendor in good faith; and

¶241

(c) he had no notice of the earlier contract for sale (specific performance of which is sought to be enforced against him).

¶242

4 The said provision is based on the principle of English law which fixes priority between a legal right and an equitable right. If A purchases any property from B and thereafter B sells the same to C, the sale in

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favour of A, being prior in time, prevails over the sale in favour of C as both A and C acquired legal rights. But where one is a legal right and the other is an equitable right

¶247

“a bona fide purchaser for valuable consideration who obtains a legal estate at the time of his purchase without notice of a prior equitable right is entitled to priority in equity as well as at law. [Snells Equity Thirtieth Edition p. 48].

¶248

This principle is embodied in Section 19(b) of the Specific Relief Act.

¶249

5 It may be noted here that notice may be (i) actual, (ii) constructive or (iii) imputed.

¶250

6 Section 3 of the Transfer of Property Act defines, inter alia,

¶251

“a person is said to have notice of a fact when he actually knows that fact, or when but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.”

¶252

And Explanation II appended to this definition clause says:

¶253

“Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.”

¶254

7 Thus, it is seen that a statutory presumption of notice arises against any person who acquires any immovable property or any share or interest therein of the title, if any, of the person who is for the time being in actual possession thereof

¶255

8 The principle of constructive notice of any title which a tenant in actual possession may have, was laid down by Lord Eldon in Daniels v. Davison [(1809) 16 Ves. 249 at P. 254]. The learned law Lord observed,

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“Upon one point in this cause there is considerable authority for the opinion I hold; that, where there is a tenant in possession under a lease or an agreement, a person, purchasing part of the estate, must be bound to inquire, on what terms that person is in possession.”

¶260

“18 Both the learned Single Judge as well as the learned Judges of the Division Bench of the High Court dealt with the question whether the purchasers had actual knowledge of Ext. 1, the earlier contract, and on evidence found that the purchasers did not have any knowledge of it. But they failed to notice the provisions of Explanation II to Section 3 of the Transfer of Property Act which is germane on the point of notice. Indeed, issue No. 10 was not properly framed. The word notice should have been used in issue No. 10 instead of knowledge because Section 19(b) uses the word notice. From the definition of the expression, a person is said to have notice in Section 3 of the Transfer of Property Act, it is plain that the word notice is of wider import than the word knowledge. A person may not have actual knowledge of a fact but he may have notice of it having regard to the aforementioned definition and Explanation II thereto. If the purchasers have relied upon the assertion of the vendor or on their own knowledge and abstained from making enquiry into the real nature of the possession of the tenant, they cannot escape from the consequences of the deemed notice under Explanation II to Section 3 of the Transfer of Property Act. On this point, in the light of the above discussion, we hold that the purchasers will be deemed to have notice of Ext. 1, should it be found to be true and valid.”

¶261

40. The mere fact that the appellant paid Rs. 4 Lac to the defendant No. 2 towards the sale consideration would be neither here nor there. By merely purporting to pay the amount towards the sale consideration, the appellant cannot say that equities are more in his favour. Again, a person claiming equities must come with clean hands. In

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the instant case, the appellant has not only tried to steal a march over the plaintiff by securing this sale in the circumstances, which I have discussed at considerable length, but he has gone to the length of raising false defences in the suit. In such circumstances, no question of equities in favour of the appellant could arise and I am in complete agreement with the findings of the Trial Court.

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41. I shall now look into the question whether the Trial Court committed any error in granting the relief of specific performance.

¶266

42. Section 20 of the Specific Relief Act, 1963, provides as follows:

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“20. Discretion as to decreeing specific performance-

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(1) The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.

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(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance-

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(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage, over the defendant; or

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(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;

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(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

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Explanation 1. — Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause (b).

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Explanation 2. — The question whether the performance of a contract would involve hardship on the defendant within the meaning of Clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

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(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

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(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.”

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43. The relief of specific performance having its roots in equity, the Specific Relief Act, 1963, has preserved the discretion of the Court not to grant the relief even though the agreement is specifically performable in law. The only fetters imposed by the statute on the exercise of the discretion are that the discretion must not be exercised arbitrarily but soundly and reasonably and guided by judicial principles. The phrase “capable of correction by a Court of appeals” has been inserted possibly to indicate the necessity for the trial Court to state the reasons for exercising its discretion in a particular way. The circumstances when specific performance mentioned in the Clauses (a), (b) and (c) of Subsection (2) of Section 20 cannot be granted are not expressly exhaustive. They indicate the situations in which the Court may properly exercise discretion not to decree specific performance. However, certain considerations have been excluded as

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relevant factors. These are contained in Explanations 1 and 2 to the Section as well as in Section 20(4). It is to be noticed that each of these exclusions are preceded by the word “mere”. The word “mere” in the context means “sole”. In other words, any one of those factors by itself would not justify the exercise of discretion against granting specific performance. The factors cumulatively or with other factors may form the basis of a decision not to grant specific performance.

¶283

44. Hardship of the defendant may be one of the grounds which may be taken into consideration for exercising its discretion by the Court in refusing to grant a decree for specific performance of contract.

¶284

45. Section 20 of the Specific Relief Act embodies a Common law that is grant of a decree for specific performance of a contract is a discretionary one. The Court may, in a given situation, take into consideration the subsequent events.

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46. Long years have been passed by in the case on hand and the trial Judge does not seem to have taken this fact into consideration while granting the decree for specific performance.

¶286

In Spry on Equitable Remedies, it is stated:—

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“On principle, indeed, Courts of equity must take account of all the circumstances known to exist at the time when an order is sought as well as of circumstances likely to occur subsequently, when they are called upon to decide whether the effect of ordering specific performance will be to cause such great hardship as to account to an injustice. There is no sufficient reason why a cause of hardship should be ignored merely because it did not exist at the time when the material contract was entered into. Certainly the fact that it has occurred subsequently may be a matter of weight, and if it appears that the parties contemplated that events might occur such as have in fact occurred the alleged causes of hardship will usually be of little importance indeed. But this is not to say that they

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are irrelevant or that sometimes they may not be decisive so as to incline the balance of justice against the grant of relief.

¶292

Fortunately, however, this matter does not depend solely on principle, for there may be “found various decisions where events occurring after the date of entry into the agreement in question have been treated as relevant. Furthermore, it will subsequently be seen that any hardship of the defendant, if specific performance were ordered, must be weighed against the inconvenience or hardship which would be caused to the plaintiff if specific performance were refused. And in determining how great any such hardship or inconvenience to the plaintiff will be once again events and probable events as known at the date of the hearing are taken into account and there is no arbitrary restriction or limitation to events taking place at the time of entry into the material agreement.

¶293

It must not be forgotten that as soon as it is shown that damages and other legal remedies are inadequate an applicant will be held prima facie entitled to specific performance of a valid and enforceable agreement. Specific performance will not be refused merely because inconvenience or even hardship to the defendant would be caused thereby. But if the hardship suffered by the defendant, if specific enforcement took place, would be so much greater than the detriment which would be suffered by the plaintiff if he were confined to his remedy at law that it would be unreasonable and oppressive to grant relief, specific enforcement will be denied.”

¶294

48. In S.G. Banerjee's Specific Relief Act, 10^th Edn. At page 357, it is stated:—-

¶295

“It is almost universally recognised that specific performance of a contract should not be granted, if in the circumstances of a case, it is inequitable to do so. The clause follows and gives statutory recognition to the universal rule. It enacts that

¶296

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where the defendant enters into the Contract under circumstances, which, though they do not render the contract voidable, yet make it inequitable to enforce specific performance, the Court may properly exercise discretion not to decree specific performance. What would or would not be inequitable would depend upon the facts and circumstances of the each case.”

¶299

49. In Om Prakash v. Amarjit Singh, reported in 1988 Supp SCC 780, the law is stated in the following terms:

¶300

“This is a suit for specific performance on an agreement to sell The grant of relief is discretionary. The Court after consideration of all relevant circumstances must be persuaded to exercise its equitable and discretionary jurisdiction in favour of specific enforcement. The jurisdiction is subject to all the conditions to which all discretionary jurisdictions are subject. There are certain personal bars to relief. Respondent 1, who was the plaintiff in the suit, did not enter the box and tender evidence. The subjectmatter of the suit is a small piece of property of 68 sq. yds. And is said to be the only worldly goods of the appellant.”

¶301

50. It is a settled principles of law that the provisions of Section 20 of the Specific Relief Act is not exhaustive. The same has to be considered and read with the Section 14 thereof. It is further well settled that the plaintiff does not have an absolute right to obtain a decree for specific performance of contract.

¶302

51. In Yohannan v. Harikrishnan Nair, reported in AIR 1992 Ker 49, it is stated:

¶303

“The cases in which the Court may properly exercise discretion not to decree specific performance has been enumerated in Sub-section (2). They are (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the

¶304

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contract, though not avoidable, gives the plaintiff an unfair advantage over the defendant, or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non performance would involve no such hardship on the plaintiff, (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.”

¶307

52. The discretion of the Court in the matter, thus, is not confined within the four corners of Section 20 of the Act.

¶308

53. In Dr. S.C. Banerjee's Specific Relief Act, 10^th Edn. At page 326, the law is stated in the following terms:

¶309

“The discretion is guided by judicial principles. The expression means that discretion is not to be arbitrarily exercised, but must be based on sound, reasonable and judicial principles, that is, the discretion must not be dependent upon the mere pleasure of the Judge but must be sound and reasonably guided by judicial principles. The Court must grant or withhold relief according to the circumstances of each particular case, when the general rules and principles do not furnish an exact measure of justice between the parties.”

¶310

54. In granting or withholding the relief, the Court should take the following circumstances, conditions and incidents into consideration:

¶311

“(1) The contract must be certain, unambiguous and upon a valuable consideration;

¶312

(2) The contract must be perfectly fair in all its parts;

¶313

(3) The contract must be free from any fraud misrepresentation, imposition or mistake;

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(4) The contract must not impose an unconscionable or hard bargain;

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(5) The performance of the contract must not impose any hardship on the defendant, such as he could not foresee;

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(6) The contract must be capable, of specific execution through a decree of the Court,”

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55. The appeal Court should not interfere with the judgment of the trial Court only because it is not right but when it is clearly wrong. Even in regular suits, the appeal courts are loathe to interfere with the findings of fact arrived at by the trial Court on the basis of oral evidence. (See Ratanlal Nahata v. Nandita Bose reported in 1997 (1) CHN 392).

¶321

56. There is no dispute that an order of specific performance is a discretionary one. In an appeal against such an order, the appellate Court generally does not interfere with the discretion exercised by the trial Judge unless it appears that while exercising such discretion the trial Judge has wrongly applied the principles for grant of such discretion or unless it is established that such discretion has been unreasonably or capriciously used. In this connection reference may be made to the decision of Supreme Court in Uttar Pradesh Cooperative Federation Ltd. v. Sunder Bros. of Delhi, reported in AIR 1967 249. In that decision the Supreme Court was dealing with an appeal against an order granting stay in exercise of power under Section 34 of the Arbitration Act, which is undoubtedly a discretionary power. While discussing the scope of the said appeal the Apex Court held that where the discretion vested in the Court has been exercised by the lower court, the appellate Court would be slow to interfere with the exercise of its discretion. In dealing with the matter raised before it at the appellate stage, the appellate Court would not be justified in interfering with the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it might have come to a contrary conclusion. If the discretion has been exercised by the trial Court

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reasonably and in a judicial, manner the fact that the appellate Court could have taken a different view may not justify such interference with the trial Court's exercise of discretion. If it appears to the appellate Court that in exercise of its discretion the trial Court had acted unreasonably or capriciously or has ignored the relevant fact, then it would be open to the appellate Court to interfere with the trial Court's exercise of discretion.

¶326

57. Having regard to the evidence on record, it cannot be said, by any stretch of imagination that in exercise of its discretion, the Trial Court acted unreasonably or capriciously or has ignored the relevant facts or any relevant piece of evidence.

¶327

58. Let me now deal with the last contention canvassed on behalf of the appellant. According to the learned counsel appearing for the appellant, the plaintiff was not ready and willing to perform his part of the contract. In other words, although it is not in dispute that the plaintiff paid Rs. 11 Lac to the defendant No. 2 out of the total amount of sale consideration of Rs. 15 Lac, yet there is nothing on record to indicate that the plaintiff was ready and willing to pay the balance amount of Rs. 4 Lac and get the sale sale deed executed. According to the learned counsel appearing for the appellant, the plaintiff seeking a decree of specific performance needs to show his readiness and willingness all through out. To this contention of the learned counsel appearing for the appellant, the reply of the learned counsel respondent No. 1 - original plaintiff is that a subsequent purchaser cannot take the plea that the plaintiff is not ready and willing to perform his part of contract, more particularly, when the defendant No. 2 did not deem fit to appear and oppose the suit of the plaintiff.

¶328

59. So far as the position of law in this regard is concerned, Mr. Thakkar, the learned counsel appearing for the plaintiff is wrong.

¶329

60. In M.M.S. Investments, Madurai v. V. Veerappan [(2007) 9 SCC 660], while stating the

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background facts, the learned Judges referred to a suit for specific performance which resulted in a decree passed by the trial Court. After the decree was passed, the defendants through their Power of Attorney sold a large extent of properties, including the subject-matter of the suit, in favour of certain other persons, who happened to be the appellants before the Supreme Court. In that case, the High Court had held that there would be no bar for the appellant to raise any issue on merits of the appeal on the facts of that case except the defence of readiness and willingness as provided under Section 16(c) of the Specific Relief Act.

¶334

61. The Supreme Court went on to distinguish a threeJudge Bench judgment in Ram Awadh (dead) by Lrs. v. Achhaibar Dubey [(2000) 2 SCC 428] and held as follows:

¶335

“6. Questioning the plea of readiness and willingness is a concept relatable to an agreement. After conveyance the question of readiness and willingness is really not relevant. Therefore, the provision of the Specific Relief Act, 1963 (in short “the Act”) is not applicable. It is to be noted that the decision in Ram Awadh case relates to a case where there was only an agreement. After the conveyance, the only question to be adjudicated is whether the purchaser was a bona fide purchaser for value without notice. In the present case the only issue that can be adjudicated is whether the appellants were bona fide purchasers for value without notice. The question whether the appellants were ready and willing is really of no consequence. In Ram Awadh case the question of the effect of a completed sale was not there. Therefore, that decision cannot have any application so far as the present case is concerned. Once there is a conveyance the concept would be different and the primary relief could be only cancellation.”

¶336

62. Ram Awadh (supra) is a judgment by three Judges of the Supreme Court overruling Jugraj Singh v. Labh Singh [(1995) 2 SCC 31], in which it

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was held that the plea that the plaintiff is not ready and willing to perform the contract is personal only to the seller-defendant. Subsequent purchasers cannot take this plea. This was stated to be an erroneous view of the law by the three Judge Bench, and the judgment in Jugrag Singh was set aside as follows:

¶340

“6. The obligation imposed by Section 16 is upon the Court not to grant specific performance to a plaintiff who has not met the requirements of clauses (a), (b) and (c) thereof. A court may not, therefore, grant to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement the specific performance whereof he seeks. There is, therefore, no question of the plea being available to one defendant and not to another. It is open to any defendant to contend and establish that the mandatory requirement of Section 16(c) has not been complied with and it is for the Court to determine whether it has or has not been complied with and, depending upon its conclusion, decree or decline to decree the suit. We are of the view that the decision in Jugraj Singh Case is erroneous.”

¶341

63. However, on facts, I am at one with Mr.Thakkar that there is nothing in the evidence led by the appellant herein to indicate that the plaintiff was not ready and willing to perform his part of the contract. Having paid almost 90% of the sale consideration, there was no good reason thereafter for the plaintiff not to pay the balance amount of Rs.4 Lac and get the sale deed executed in his favour.

¶342

64. In such circumstances, the contention as regards readiness and willingness on the part of the plaintiff to perform his part of the contract, as raised by the appellant, should fail.

¶343

65. In the overall view of the matter, I have reached to the conclusion that I should not disturb the judgment and decree passed by the Trial Court. In

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my view, once the Trial Court, on the basis of the materials on record, has thought fit to exercise the discretion in favour of the plaintiff for grant of specific performance, then this Court sitting in appeal should be loath to interfere with such a discretionary relief and, more particularly, when the appellant has failed to prove that he is a bona fide purchaser in good faith of the suit property for value without notice.

¶347

66. If the appellant herein is of the view that he has been cheated by the defendant No. 2, then he should initiate appropriate legal proceedings before the appropriate forum in accordance with law including one for the recovery of the sale consideration paid by him to the defendant No. 2.

¶348

67. In view of the aforesaid discussion, this First Appeal fails and is hereby dismissed.”

¶349

As noted above, trial Court based its findings on extensive reference to material on record and by assigning reasons. Even appellate Court has re-appreciated same and concurred with trial Court findings albeit in fewer words. It is settled law that an appellate Court concurring with findings of original Court need not traverse every observation, conclusion and finding and assign detailed reasons.

¶350

First appellate Court took note of fact that defendant no.2 admittedly did not receive original title deeds with regard to suit property from defendant no.1 at time of execution of Ex.D5 – sale deed and there was no proper explanation for

¶351

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same. It held, it would be normal for any person purchasing immovable property to insist on original title deeds of demised property. Apart from above, first appellate Court noted that father-in-law of defendant no.2 was examined as DW.2. In his deposition, DW.2 stated that he was aware of earlier agreement of sale between plaintiff and defendant no.1. Though he claimed not to have informed defendant no.2 about same, Appellate Court concluded such assertion to be unbelievable. On said reason, it concurred with trial Court findings and dismissed Appeal.

¶355

Indeed, plaintiff (PW.1) deposed that defendant no.2 was aware of agreement of sale in his favour and admitted that about 2-3 months prior to sale deed, plaintiff was aware of negotiation between defendants no.1 and 2. It is also seen that apart from plaintiff deposing to have informed defendant no.2 about prior agreement of sale in his favour, he also examined PW.4, who had accompanied him when plaintiff met defendants. Trial Court noted that deposition of PWs.1 and 4 withstood cross-examination.

¶356

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At same time, failure to enquire and verify about original title deeds prior to purchase and statement of DW.2 (father-in-law of defendant no.2) that he was aware of agreement of sale in favour of plaintiff prior to purchase by defendant no.2 but had not informed defendant no.2 would both appear unnatural and as such unacceptable. On effort for verification deposed by defendant no.2 was enquiry with defendant no.1 himself about title over suit property which was assured to him and except tax paid receipts, no other documents were given. It is also seen, defendant no.2 feigned ignorance to suggestion whether he had enquired with defendant no.1 about manner and mode of acquisition of title over suit property.

¶359

When both Courts have considered above material while arriving at conclusion about defendant no.2 not being bonafide purchaser, same would dissuade this Court from interference, especially in an Appeal under Section 100 of CPC. Hence, substantial question of law no.1 is answered in affirmative.

¶360

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Further, Hon’ble Supreme Court in UN K, that once Courts arrive at conclusion that agreement of sale is duly proved, specific performance should not be denied by taking note of amendment to Section 20 of SRA and holding such principle would guide even to agreements of sale executed prior to said amendment. Consequently, substantial question of law no.2 would also require to be answered in affirmative.

¶364

In view of above, following

¶365

ORDER

¶366

Appeal is dismissed with costs.

¶367

Sd/(RAVI V. HOSMANI) JUDGE

¶368

psg/AV/GRD

J Govindaraju v. G R Visweswara Babu

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J Govindaraju v. G R Visweswara Babu

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