Specific performance of a prior sale agreement was contested by a subsequent purchaser. The Court upheld the agreement's validity, rejected the purchaser's bona fide purchaser defence, and dismissed the second appeal with costs, confirming the decree for specific performance.
Decree for specific performance confirmed with costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 16.12.2019
Date of Verdict : 03.01.2020
CORAM
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
S.A.No.2050 of 2001 and C.M.P.No.3444 of 2007
M.K.Kanniappan ...Appellant/3rd defendant/
Vs. 3rd defendant
Ganesa Mudaliar (died)
1. Valliammal
2. G.Gangadaran
3. G.Umapathi(died)
4. G.Subramani
5. D.Lakshmi
6. Chella Muthu
7. C.Krishnan
(RR5 to 7 instead of RR5, 7 & 8
vide order of this Court dated
20.09.2019 made in S.A.No.
2050 of 2001 as per memo
dated 20.09.2019 are recorded)...6th & 7th Respondent/
1st & 2nd defendants/
1 & 2nd Defendants
8. Meenakshi
9. Minor Dahush
10. Minor Sakthi
Minors rep. by their mother
Natural guardian Meenakshi
(RR 8 to 10 brought on record
as legal heirs of the deceased
R3 viz., G.Umapathi vide Court
Order dated 01.11.2018 made
in C.M.P.No.6363 to 6395/2018
in S.A.No.2050 of 2001) ...Respondents 1 to 5/
Appellants/Plaintiffs
Prayer :- This Second Appeal is filed under Section 100 of Civil Procedure Code against the judgment and decree dated 23.11.2000 made in A.S.No.53 of 1994 on the file of the Sub Court, Ranipet, Vellore District, reversing the judgment and decree dated
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25.02.1994 made in O.S.No.397 of 1986 on the file of the District Munsif Court, Arakkonam.
For Appellant : Mr.G.Jeremiah
For Respondents For R1, R2, R4, R5 & R8 to R10 : Mr.A.Muthukumar R3 : Died R6 : Exparte vide Court Order dated 05.11.2019
R7 : Notice served
JUDGMENT
This appeal is directed as against the judgment and decree dated 23.11.2000 made in A.S.No.53 of 1994 on the file of the Sub Court, Ranipet, Vellore District, reversing the judgment and decree dated 25.02.1994 made in O.S.No.397 of 1986 on the file of the District Munsif Court, Arakkonam.
3.1. The suit is filed for specific performance. The suit schedule property belongs to the defendants 1 & 2 viz., Chellamuthu and Krishnan and they agreed to sell the suit property to the plaintiff for the sale consideration of Rs.11,000/- and received a sum of Rs.7,000/- as advance from the plaintiff on 12.07.1984 and also executed unregistered agreement in favour of the plaintiff. As per the agreement on receipt of balance sale consideration of Rs.4,000/-, they have to register the sale deed and there is no time fixed for registration of sale deed. The third defendant viz., M.K.Kanniappan is also residing in the same street in Melaulampudur Village and he is fully aware of the sale agreement between the plaintiff and the defendants 1 & 2.
3.2. After the agreement, the plaintiff approached the defendants 1 & 2 on several occasions for execution of sale deed in respect of the suit schedule property on receiving the balance sale consideration of Rs.4,000/-. But the defendants 1 & 2 were refused to register the sale deed for one and other reasons. When the plaintiff was always ready and willing to perform his part of the contract, the defendants 1 & 2, were dodging and postponing the execution of sale deed. While being so, the plaintiff came to understand that the defendants 1 & 2
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sold the schedule property to the third defendant viz., M.K.Kanniappan. Thereafter, the plaintiff obtained the certified copy of the sale deed and found that the first defendant alone sold out 15 cents of the suit property in favour of the third defendant. Therefore, the plaintiff caused legal notice on 06.08.1984 to the defendants calling upon them to execute sale deed as per the sale agreement by receiving the balance sale consideration of Rs.4,000/-. The defendants 1 & 2 duly received the notice and failed to execute any sale deed and also not replied so far. Hence, the plaintiff filed the suit for specific performance, directing the defendants 1 & 2 to execute the sale deed on receipt of balance sale consideration of Rs.4,000/- and also deliver the possession of the suit property to the plaintiff.
4.1. The third defendant further submitted that the defendants 1 & 2 none other than own cousin brothers of the plaintiff, as such they colluded together and created false sale agreement and set up the plaintiff to file false and vexatious suit with an intention to grab more money from the third defendant. The third defendant is a bonafide purchaser and the suit property was purchased for full and valid sale consideration without the knowledge of the alleged agreement between the plaintiff and the defendants 1 & 2. Therefore, he prayed for dismissal of the suit filed by the plaintiff for specific performance.
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plaintiff filed an appeal suit in A.S.No.53 of 1994 and the first appellate Court allowed the appeal and decreed the suit filed by the plaintiff. Aggrieved over the same, the third defendant preferred this second appeal.
"1. Whether the grounds on which the appellate Court has rejected the objection to the validity of Ex.A.1 are sustainable?
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7.1. Further the learned counsel appearing for the appellant/third respondent submitted that evidence of P.W.1 to P.W.3 are quite inconsistence as such the trial Court rightly rejected the case of the plaintiff. Since the third defendant is a bonafide purchaser for valuable sale consideration and quite unaware of the alleged sale agreement between the plaintiff and the defendants 1 & 2. In fact, in the alleged sale agreement, no time was fixed to perform their contract. To support of his arguments, the learned counsel appearing for the appellant/third defendant relied upon the following judgments :-
8.1. The learned counsel appearing for the respondents/plaintiff further submitted that there is inconsistence stand taken by the third defendant through out the entire proceedings. The third defendant filed written statement and also deposed as D.W.1. The entire stand taken by the third defendant is contrary to the written statement and whatever stand taken in the written statement is contrary to his
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evidence. On the one hand, he had taken a stand that no sale agreement entered between the third defendant and the defendants 1 & 2, in respect of the purchases and on the other hand his father already paid advance amount and he was put in possession of 15 cents of the suit schedule property. To prove his possession and enjoyment of the property, the third defendant did not produce any chitta, patta or adangal in respect of the suit schedule property.
8.2. He further submitted that according to the third defendant (D.W.1), his father was put in possession of the suit schedule property for the loan borrowed by the defendants 1 & 2. Thereafter from the year 1973 onwards, the third defendant is in possession and enjoyment of the suit property. The defendants 1 & 2 informed him that after the partition suit decreed ,they will register the property. Further the third defendant deposed that in the year 1983, he installed pipe line to the suit schedule property. Whereas in the written statement, the third defendant categorically stated that he already entered into an agreement very long back to purchase the suit property with the defendants 1 & 2. In pursuant to the same the third defendant purchased the land to an extend of 15 cents from the first defendant by the sale deed dated 25.07.1984. Therefore, there are contrary statement in the written statement. The specific case of the third defendant that he entered into agreement and purchased the suit property. Contrary to the said plea, he filed written statement before the Court as if his father lent money to the defendants 1 & 2, for which he was put in possession of the suit property
8.3. He further submitted that entire suit property belongs to the defendants 1 & 2 and admittedly they are brothers. Without even partition of the suit schedule property between them, the first defendant alone can't sell the property to the third defendant that too without the knowledge and consent of the second defendant. In fact, already a suit in O.S.No.331 of 1993 was filed for partition and it was dismissed for default between the defendants 1 & 2. That apart, according to the third defendant his father entered into an agreement for sale with defendants 1 & 2 and in the year 1973, there was an oral agreement between the defendants 1 & 2 with the third defendant to sell the property. Accordingly, they fixed the sale consideration for a sum of Rs.4,800/- in which, one month before the date of sale, a sum of Rs.2,000/- was paid as advance. Whereas in the sale deed dated 25.07.1984, which is marked as Ex.A.2 & Ex.B.3, did not contain any recital to that effect that sum of Rs.2,000/- paid as advance and remaining sale consideration was paid on the date of registration of sale deed.
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Therefore, considering the above contradiction, the first appellate Court rightly reversed the judgment and decree of the trial Court and decreed the suit in favour of the plaintiff and prayed for dismissal of the present second appeal.
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executed. Further he deposed that at the time of execution of the sale agreement, there was no money transaction between the defendants 1 & 2 with the plaintiff. Whereas P.W.2 stated that on 12.07.1984, the agreement was written by D.W.3 and on the same day, the defendants 1 & 2 received a sum of Rs.7,000/- as advance, as part of the sale consideration. D.W.2 another witness deposed that Ex.A.1 was written by D.W.3 and he signed as witness to the document and on that day no amount was given by the plaintiff to the defendants 1 & 2. Further he deposed that the information about the advance amount was not informed to him. Therefore it is proved that Ex.A.1 was executed by the defendants 1 & 2 in favour of the plaintiff. As against the admitted document Ex.A.1, no one had deposed and it is a valid document as per Section 92 of Indian Evidence Act. Section 92 of Indian Evidence Act reads as follows :-
"92. Exclusion of evidence of oral agreement.—When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms: Proviso (1) .—Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, 1[want or failure] of consideration, or mistake in fact or law Proviso (2).—The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document: "
Therefore, though D.W.3 only deposed that the said agreement was not executed on 12.07.1984 and he did not have the knowledge of payment of advance by the plaintiff, it is a legal document and its execution is clearly admitted.
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O.S.No.331 of 1973 was marked as Ex.B.1. On perusal of Ex.B.1, the said suit was filed for partition, in which the second defendant and the father of the third defendant are parties and the same was dismissed for default. Therefore, the recital of the sale deed Ex.A.2 is false. Further there is no peace of evidence produced by the third defendant in respect of the sale agreement between the defendants 1 & 2 with the third defendant. When the third defendant claimed that he is a bonafide purchaser under Ex.A.2, he has to prove his case. Therefore, Ex.A.1 is not a created one and duly executed by the defendants 1 & 2 in favour of the plaintiff.
"14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not
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used as an instrument of oppression to have an unfair advantage to the plaintiff The High Court has failed to consider the motive with which Varghese instituted the suit. It was instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is the agreement for sale Ex A1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not entitled to a decree for specific performance. "
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knowledge of this agreement for sale or the telegram is a perverse finding which cannot be maintained in this appeal.
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persons who purchased the property in question had notice of the agreement for sale. If he is not able to prove this against one of the vendees, his suit would not succeed. In view of this finding. I am, therefore, of the opinion that the plaintiff's suit for the specific performance also fails."
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stated, the notice requiring specific performance was issued only on 13.11.2004, i.e. after the execution of the sale deed in favour of the defendants 4 and 5. The suit has been filed on 30.11.2004 within a week from the date of issuance of notice. It is also the case of the defendants 4 and 5 that the suit agreement has been prepared by the plaintiff in collusion with the 3rd defendant in order to defeat the rights of the defendants 4 and 5. In the absence of any evidence to impute knowledge of the earlier agreement to defendants 4 and 5, I am constrained to conclude that they are bona fide purchasers for value without notice of the prior agreement of sale, even assuming that the same has been validly entered into. Thus Point No. 4 is also answered against the plaintiff."
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that as it may. All the substantial questions of law, formulated by this Court in this Second Appeal, are answered in favour of the plaintiff and as against the third defendant.
-s/d-
Assistant Registrar
True Copy
Sub-Assistant Registrar
rts
To
1. The Sub Judge,
Ranipet, Vellore District,
2. The District Munsif Judge,
Arakkonam.
3. The Section Officer,
V.R.Section,
Madras High Court,
Chennai.
+1 cc to M/s.A.Muthukumar Advocate sr321
+1 cc to M/s.G.Jeremiah Advocate sr592
Judgment
in S.A.No.2050 of 2001
and C.M.P.No.3444 of 2007
rr(co)
aa16/12/2020
aa07/01/2021
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3 issues framed by the court
Was the prior sale agreement genuine and valid?
Could the subsequent purchaser challenge the agreement's truth and validity under Section 92 proviso (1) of the Evidence Act?
Was the subsequent purchaser a bona fide purchaser for value without notice of the prior sale agreement?
Colour shows how this judgement treated each authority
Mathew Vs. KuruvillaDistinguished¶69
1987 AIR (SC) 2328 - Mathew Vs. Kuruvilla · Who else cites this
Durga Prasad and another Vs. Lilawati and anotherDistinguished¶74
1972 AIR (Allahabad) 396 - Durga Prasad and another Vs. Lilawati and another · Who else cites this
P.Sampooranam and others Vs. L.R.Somasundaram and othersReferred¶40
2008(2) CTC 382 - P.Sampooranam and others Vs. L.R.Somasundaram and others.
Natarajan Vs. Marudhakkal and othersDistinguished¶86
2017 AIR (Madras) 118 · Who else cites this
2 provisions across 2 enactments
M.K.Kanniappan
Valliammal
G.Gangadaran
G.Umapathi
G.Subramani
D.Lakshmi
G.K.ILANTHIRAIYAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
