1. Loan transaction — Sale deed with agreement of re-conveyance — Refusal to reconvey — Suit for specific performance. (Para 3 )
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1996 Supreme(SC) 1908
1996(8) Supreme 794
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
Nivarti Govind Ingale & Ors. -Appellants
versus
Revanagouda Bhimanagouda Patil -Respondent
Civil Appeal No. 15097 of 1996
(Arising out of SLP (C) No. 23533 of 1994)
Decided on 18-11-1996
Counsel for the Parties :
For the Appellants : Ms. Rajni K. Prasad, K.R. Nagaraja, Advocates.
For the Respondents : Manoj Arora, Ms. Nandini Mukherjee, H. Wahi, P.S. Narsimha, Advocates.
Important Points
IMPORTANT POINT
In a case of execution of sale deed with agreement of reconveyance when sale deed was got executed in the name of minor. Question that agreement was not for the benefit of minor did not apply to the facts.
In a case of execution of sale deed with agreement of reconveyance when sale deed was got executed in the name of minor. Question that agreement was not for the benefit of minor did not apply to the facts.
Subject
Contract Law - Specific Performance
Act Referred
Headnote
Specific Relief Act, 1963-Suit for specific performance-Appellant s mother obtained loan from respondent and executed sale deed with agreement of re-conveyance-Respondent had got sale deed executed in name of his minor son-Having received the money he was bound to execute reconveyance-Question that agreement was not for the benefit of minor could not be applied to the facts-Any subsequent sale by respondent was barred by doctrine of lis-pendes-Subsequent purchaser was bound by decree of specific performance and liable to reconvey the property to appellant. (Para 4)
Legal Category Hierarchy
Table of Contents
2. Whether an agreement of re-conveyance executed for a minor's benefit requires court leave to be enforceable for specific performance. (Para 4 )
3. Guardians obtaining property for minors are bound by re-conveyance agreements; subsequent transfers during litigation are subject to the doctrine of lis pendens. (Para 4 )
4. A guardian securing property for a minor is bound by the agreement of re-conveyance; subsequent purchasers are bound by the doctrine of lis pendens. (Para 4 )
5. Appeal allowed — Trial court decree for specific performance restored — High Court and first appellate court orders set aside. (Para 4 , 5 )
6. Is an agreement of re-conveyance enforceable if the property was transferred to a minor through a guardian?
Yes. When a guardian obtains a sale deed in the name of a minor, the guardian is bound by the agreement of re-conveyance associated with that transaction. (Para 4 )
7. What is the effect of the doctrine of lis pendens on a subsequent purchaser of property?
A subsequent purchaser of property, even without knowledge of a pending suit, is bound by the doctrine of lis pendens and any resulting decree of specific performance. (Para 4 )
ORDER
Delay condoned.
Substitution and impleadment allowed.
Leave granted.
2. We have heard learned counsel on both sides.
This appeal by special leave arises from the judgment and order of the Karnataka High Court, made on January 6, 1992 in RSA No.933/78.
3. The admitted position is that one Radhabai, mother of the appellants was the owner of 4 acres 38 gunthas of land in Paschayapur Village in Bijapur Taluka and District in Karnataka State. According to her, she, with a view to dig a well in R.S. No.299, namely, the same land, had obtained a loan in the year 1961 from the father of the respondent in the a sum of Rs.1,000/-. Since she was not in a position to complete the digging of the well, she approached again for a sum of Rs.2,000/- to complete the well. The respondent s father who is a Constable had advanced the money on the condition that she would execute the sale deed in favour of his minor son, i.e., the respondent. Accordingly, she executed the sale deed with an agreement of re-conveyance which was accordingly executed on August 31, 1961. She stated that she has paid from time to time a sum of Rs.7,000/- and she asked the respondent to execute the re-conveyance and the respondent had not executed the deed of re-conveyance. Consequently, she filed the suit for specific performance. The trial Judge decreed OS No.4//1966 on the file of the Additional Munsif, Bijapur on April 3, 1976. On appeal, the Additional Civil Judge allowed the appeal on November 7, 1977 and dismissed the suit. The second appeal was dismissed by the High Court. Thus, this appeal by special leave.
4. The High Court found that since the agreement of re-conveyance was not for the benefit of the minor, the decree for specific performance cannot be granted. The leave of the court was not obtained for entering into such an agreement and, therefore, the appellant is not entitled to the benefit of the specific performance. We find no force in the reasoning of the High Court in the facts and circumstances of this case. It is seen that appellant s mother is the owner of the property. She had obtained loan from the respondent and executed the sale deed with an agreement of re-conveyance. When the father of the respondent had obtained the sale deed in the name of the minor, obviously he is bound by the agreement of re-conveyance as well. Having received the money, he had not executed the sale deed. Necessarily, the appellants are entitled to seek the specific performance. Under these circumstances, the question that agreement was not for the benefit of the minor which is a legal proposition, cannot be applied to the facts. It is contended that subsequent purchaser from the father of the respondent of the self-same property, without knowledge of the pendency of the suit is bound by the agreement. We find no force in the contention. The appellants have been seeking the remedy in the civil suit; any subsequent sale will be barred by the doctrine of lis pends. Therefore, the subsequent purchaser is bound by the decree of specific performance and liable to reconvey the property to the appellants. The decree of the trial Judge is accordingly restored and that of the High Court and the Additional Civil Judge stand set aside. The remedy of recovery of the purchased money from the respondent may be sought in an appropriate action.
5. The appeal is accordingly allowed. No costs.
Appeal allowed.
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