Harbhajan Singh and Ors. Vs Beant Singh and Ors.

This Regular Second Appeal is directed against the judgment and decree dated 20.09.2000 passed by the learned trial Court, whereby the suit filed by the plain/ffs for possession by way of specific performance of an agreement to sell dated 22.04.1987 was decreed; and the judgment and decree dated 22.10.2001, whereby learned first Appellate Court, affirmed the findings, thus dismissing the appeals of the defendants.

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The Legal representa/ves of Hazara Singh - subsequent purchaser (defendants No. 2 to 10), have approached this Court in present second appeal.

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For convenience, par/es herein are referred to by their status before the trial Court. Trial Court Record (available on DMS) has been perused.

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4.1 Factual Background : The subject ma?er of dispute is land measuring 14 kanal 14 marla situated in village Khanna Majra, District Ambala, detailed

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in head-note of the plaint. Defendant No.1 Devinder Singh (respondent N: 3 herein) being owner of the said land, executed an agreement to sell dated 22.04.1987 (Ex.P2) in favour of the plain/ffs ( (respondent N: 1 & 2 herein) for ₹31,500/- per acre, and received ₹10,000/- as earnest money. The sale deed was to be executed on or before 30.11.1987.

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4.2 Apprehending that defendant No.1 intended to alienate the land elsewhere, plain/ff No.2 filed a suit for permanent injunc/on and secured an interim restraint order on 28.04.1987. On the assurance of defendant No.1 that the sale deed would be executed in their favour, the said suit was got dismissed in default on 07.09.1987.

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4.3 The plain/ffs asserted that on the s/pulated date of 30.11.1987, they appeared before the Sub-Registrar with the balance sale considera/on and requisite expenses and marked their presence vide applica/on Ex.P1. However, defendant N: 1 did not turn up. Subsequently, they discovered that defendant No.1 had sold the suit land in favour of Defendant N: 2 Hazara Singh [Later on his death, replaced his legal representa�ves as defendants N: 2 to 10 – appellants herein] for considera/on of ₹49,000/-. Alleging the sale to be collusive & sham transac/on and seeking specific performance of the prior agreement, the present suit was filed on 03.02.1988.

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Defendant No.1 did not file any wri?en statement.

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Defendants No.2 to 10 (LRs of Hazara Singh – appellants) contested the suit asser/ng themselves to be bona fide purchasers for valuable considera/on without no/ce of any prior agreement, by virtue of sale deed dated 05.01.1988 (Ex.D-1). They also raised the plea of estoppel and contended that the plain/ffs were aware of the sale and prayed for dismissal of the suit.

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Necessary issues were framed. Evidence led by the par/es was taken on record. Trial court decreed the suit on 20.09.2000 and the first Appellate Court, in the separate appeals filed by defendant No.1 - owner as well as by

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defendants No.2 to 10 i.e. the LRs of the subsequent purchaser, affirmed the findings by dismissing both the appeals.

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8.1 Appellants’ Conten�ons : Assailing the concurrent findings of the Courts below, Learned senior counsel for the appellants contends that the original agreement to sell was not produced and only a photocopy was relied upon. It is urged that non-produc/on of the original agreement to sell raises a presump/on of cancella/on.

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8.2 It is next argued that the plain/ffs were neither ready nor willing to perform their part of contract and had no financial capacity. Reliance is placed on Ram Awadh (Dead) by LRs v. Achhaibar Dubey , (2000) 2 SCC 428 , to submit that readiness and willingness can be examined even from the standpoint of subsequent purchasers.

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8.3 Learned senior counsel supports the above submission by contending that the sale deed dated 05.01.1988 executed in favour of Hazara Singh, the predecessor of the appellants, was effected with the plain/ffs’ full knowledge and consent. It is argued that the plain/ffs themselves delivered possession of the suit land to Hazara Singh immediately aJer the execu/on of the said sale deed, a fact admi?ed by PW-1 during cross-examina/on. Ld. Counsel submits that if a prior agreement to sell in favour of the plain/ffs had genuinely subsisted, and par/cularly when the plain/ffs were in possession as tenants on the suit land before the alleged agreement, they would not have voluntarily parted with possession nor remained silent; instead, they would have protested or taken legal recourse. Significantly, the plaint contains no averment that possession was taken from them forcibly by Hazara Singh. According to learned counsel, these circumstances clearly demonstrate that the sale in favour of Hazara Singh was with the plain/ffs’ acquiescence, thereby estopping them from seeking enforcement of the agreement to sell dated 22.04.1987. It is submi?ed that the plain/ffs voluntarily handed over possession to Hazara Singh upon execu/on of sale deed Ex.D1, thereby demonstra/ng acquiescence. The plea that posses-

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sion was forcibly taken is an aJerthought unsupported by pleadings or complaint.

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8.4 With these submissions, learned counsel has prayed for seLng aside the judgments and decrees passed by the Courts below and to dismiss their suit by accep/ng this appeal.

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9.1 Respondents’ Conten�ons : Per Contra, Learned counsel for the respondents supports the concurrent findings and submits that both courts have categorically held that the agreement to sell dated 22.04.1987 (Ex.P2) stands duly proved. It is explained that the original agreement was lost in the floods of 1988, which had also damaged the plain/ffs’ house. However, a photocopy earlier supplied to their counsel was produced in secondary evidence. Permission to lead such evidence was granted on 05.10.1999, and that order was never challenged. Further, the deed writer and an a?es/ng witness have proved the execu/on of the agreement, while defendant No.1 Devinder Singh neither filed a wri?en statement nor entered the witness box to deny it.

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9.2 It is next contended that the plain/ffs’ readiness and willingness have been rightly affirmed by the courts below. When defendant No.1 a?empted to sell the land elsewhere, the plain/ffs promptly sought and obtained an injunc/on. On the defendant’s assurance, the suit was got dismissed in default. On the s/pulated date of performance, both plain/ffs appeared before the SubRegistrar with the balance considera/on and necessary expenses, and recorded their presence (Ex.P1). Immediately aJer learning of the sale deed dated 05.01.1988 in favour of Hazara Singh, they filed the present suit on 03.02.1988, and upon decree of the suit, they promptly deposited the balance sale considera/on on 11.12.2000.

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9.3 It is further argued that the sale deed dated 05.01.1988 is a sham, as it reflects a considera/on of only ₹49,000/–, which is significantly lower than the price agreed between the plain/ffs and defendant No.1.

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9.4 The allega/on that the plain/ffs voluntarily handed over possession to Hazara Singh is specifically denied, by contending that this plea is being raised for the first /me. Ld. counsel submits that plain/ffs were in cul/va/ng possession of suit land on batai, and possession was taken from the plain/ffs about ten days aJer execu/on of Ex.D1, when defendant No.1 and the subsequent purchasers asked them to vacate. As the plain/ffs had no stay order and wished to avoid confronta/on, they vacated the land but immediately ins/tuted the present suit.

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9.5 On these grounds, learned counsel seeks dismissal of the appeal. 10. This Court has considered submissions of both the sides and has appraised the record carefully.

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11. Points for Determina�on : The following ques/on arises for adjudica/on:

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Whether, despite proof of the agreement to sell, and readiness & willingness of the plain/ffs, the relief of specific performance is barred on account of the plain/ffs’ conduct giving rise to equitable estoppel in favour of the subsequent purchasers?

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12.1 Analysis and Findings : Execu�on of Agreement to sell & Secondary Evidence : The execu/on of the agreement to sell dated 22.04.1987 stands proved through PW-1 Beant Singh, a?es/ng witness PW-2 Gurdev Singh, and deed-writer PW-3 Dharampal. Defendant No.1 did not deny execu/on either through pleadings or by entering the witness box. Adverse inference under Sec/on 114 (g) of the Evidence Act must therefore operate.

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12.2 The order permiLng secondary evidence dated 05.10.1999 was never challenged. Once a photocopy was admi?ed in evidence and execu/on of agreement is duly proved, the argument of cancella/on, or suppression has no force. So, the concurrent findings on execu/on of agreement call for no interference.

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Readiness and Willingness : The plain/ffs’ conduct in obtaining injunc/on; geLng the earlier suit dismissed in default on assurance; appearing before the Sub-Registrar on target date of 30.11.1987 with funds, evidenced by Ex.P1; and promptly filing the present suit, establishes their ini/al readiness and willingness, as required under Sec/on 16(c) of the Specific Relief Act, 1963. The explana/on regarding arrangement of funds, as tes/fied by PW1 appears credible and remains unshaken. The conclusion of the courts below on this aspect is, therefore, affirmed.

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Estoppel and Conduct of Plain�ffs vis-à-vis Subsequent Purchasers: The cri/cal ques/on pertains to the plain/ffs’ conduct aJer the execu/on of sale deed dated 05.01.1988 in favour of Hazara Singh.

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This Court finds that the courts below failed to adequately consider the plea of estoppel raised by defendants No.2 to 10, the successors of Hazara Singh—the subsequent purchaser. Their specific case is that they had no knowledge of any prior agreement with the plain/ffs, whereas the plain/ffs were fully aware of the sale deed dated 05.01.1988 in favour of Hazara Singh for ₹49,000. This stand is supported by the evidence on record.

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Though the plain/ffs did not plead that they were earlier tenants on the land, but PW-1 Beant Singh (one of the plain/ffs) admi?ed this fact during his tes/mony. Crucially, he further acknowledged that he handed over possession to Hazara Singh on the execu/on of the sale deed. DW-1 Swarn Singh, son of Hazara Singh, corroborated this by tes/fying that possession was voluntarily delivered by the plain/ffs, and also stated that the bargain between Devinder (the owner) and Hazara was nego/ated with the involvement of plain/ff Beant Singh. This por/on of DW-1’s tes/mony went unchallenged, thereby reinforcing that the plain/ffs were aware of and consented to the sale dated 05.01.1988 (Ex.D1).

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The plain/ffs’ later claim that possession was forcibly taken is unsupported by pleadings or evidence. Even as per their own version (synopsis filed before this court) , possession was allegedly taken around 15 days aJer the sale deed i.e., about 20.01.1988. However, no pleadings to that effect were made, nor was any complaint lodged with the police or other authority. The absence of such founda/onal asser/ons further undermines the plea of forcible dispossession.

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Taken together, the admission of PW-1, the uncontroverted tes/mony of DW-1, the plain/ffs’ failure to plead or complain about forcible dispossession, and their conduct in handing over possession clearly show that the sale in favour of Hazara Singh occurred with their knowledge and acquiescence. These circumstances create an equitable estoppel, thereby barring the plain/ffs from seeking specific performance of the agreement to sell dated 22.04.1987.

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Hon’ble Supreme Court in Ram Awadh’s case (supra) recognised that readiness and willingness may also be tested from the perspec/ve of subsequent purchasers. Where the conduct of the promisee creates an impression inconsistent with a subsis/ng contract, the relief of specific performance may jus/fiably be refused.

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In the present case, the plain/ffs’ conduct amounts to acquiescence and generates an equitable estoppel. They cannot now assert a right contrary to their own acts, par/cularly to the detriment of purchasers, who acted on apparent authority and possession.

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Validity of Sale Deed dated 05.01.1988 Ex.D1 : The plea that sale deed Ex.D1 is a sham transac/on is unsubstan/al. The sale deed records payment of ₹49,000/- before the Sub-Registrar. DW-2, an a?es/ng witness, corroborates this fact. A lower price is not indica/ve of fraud, par/cularly in the absence of any reliable evidence. Thus, Ex.D1 is held to be a genuine transac/on.

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22. Conclusion : Although the agreement dated 22.04.1987 and ini/al readiness and willingness of plain/ffs are duly proved, but the plain/ffs’ own conduct dis-en/tles them to the equitable relief of specific performance. Their ac/ve par/cipa/on in the subsequent transac/on, delivery of possession, and absence of protest estop them from enforcing the prior agreement.

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Consequently, the concurrent judgments and decrees of the courts below cannot be sustained. The suit for specific performance deserves to be dismissed. However, since the plain/ffs paid earnest money of ₹10,000/- on 22.04.1987, and in view of the long passage of approximately 38 years, refund with appropriate compensa/on is warranted in exercise of the Court’s equitable jurisdic/on.

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Result & Direc�ons : The judgments and decrees dated 20.09.2000 and 22.10.2001 passed by the courts below are hereby set aside. The suit for specific performance filed by the plain/ffs is dismissed. However, since the contract is not being enforced on equitable considera/ons and not on account of any fault a?ributable to the plain/ffs in proving the agreement, the plain/ffs are en/tled to refund of the earnest money of ₹10,000/- paid on 22.04.1987 from defendant N: 1 Devinder Singh.

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The plain/ffs shall accordingly be en/tled to:

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Refund of earnest money ₹10,000/-, and

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Interest @ 7.5 % per annum on this amount of ₹ 10,000/- from the date of filing of the suit (03.02.1988) un/l the date of actual payment.

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Compensa/on of ₹ 2,00,000/-.

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The aforesaid amounts shall be deposited by defendant No.1 Devinder Singh before the trial Court within three months from today. In default, the amount of ₹ 10,000/- shall thereaJer carry enhanced interest @ 9%

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per annum un/l realisa/on, though for compensa/on amount of ₹ 2,00,000/-, interest will be 7.5 % per annum on expiry of 3 months /ll payment.

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