IMPORTANT POINT
The first-respondent-plaintiff is entitled to a decree of specific performance against appellants subject to redemption of mortgage as indicated in this judgment.

Headnote:Constitution of India-Article 136-Appeal by Special Leave against suit for specific performance-Deep Chand (1st Respondent) entered into an agreement of sale with Kare (2nd Respondent)-Paid Rs. 8,000/- as advance-Balance payable Rs. 106,170/- on sale deed-Kare committed breach and fraud-Kare in order to defeat Respondent 1 s claim, executed family settlement in favour of his children (Respondents 3 to 6) who on that basis got a collusive decree and executed sale deeds in favour of appellants-Whether Kare (Respondent 1) had any previous agreement with appellants? (No)-Appeals of appellants whether sustainable? (No)-Whether amount of Rs. 60,000/- paid by appellants to mortgagee (Mohan Lal) be paid by first respondent out of sale consideration? (Yes)-Appeal dismissed accordingly.
       Held : It has been found by all the courts that the agreement entered into by the first respondent with Kare was a true and genuine document and the first respondent had paid Rs. 8,000/- as advance. It was also proved that Kare had committed a breach of the contract and failed to execute the sale-deed in favour of the first respondent. (Para 7)
       The execution of the Family Settlement Deed and subsequent suit for declaration of title followed by execution of the sale-deeds on the basis of the decree obtained by them are clearly collusive transactions intended to defeat the interest of the first respondent. (Para 8)
       Held, therefore, the two courts have rightly held that the family Settlement, the decree passed by the civil court and the various sale deeds executed by defendants 2 to 4 in favour of the appellants are collusive transactions brought about to defeat the interest of the first respondent. The respondents 2 to 4 had no previous agreement with the appellants for sale of this property, even then they readily executed the sale deeds in their favour. In view of these factual circumstances, we do not find any merit in this appeal. (Paras 9 and 10)
       However, held, in the result, we direct the first respondent-plaintiff to deposit the balance consideration of Rs. 1,06,170/- before the executing Court and the appellants herein are directed to execute a sale-deed in favour of the first respondent-plaintiff, Deep Chand, within a period of two weeks thereafter. On their failure to execute the sale-deed, the first respondent-plaintiff would be at liberty to get the sale deed executed through court. The sale consideration to be deposited by the plaintiff shall be disbursed to these appellants as directed in the judgment and decree of the first Appellate Court. If these appellants produce a registered release-deed in respect of the mortgage in favour of Mohan Lal, entire sale consideration be disbursed to the appellants. If the appellants fail to produce a release deed within a period of 2 weeks of the date of the deposit of the amount by plaintiff, Deep chand, he would be allowed to get refund of Rs. 60,000/- and would be at liberty to redeem the mortgage. (Para 12)
       Held finally, the appeal stands disposed of. The cost of this appeal shall be borne by the parties. (Para 13)

JUDGMENT

K.G. Balakrishnan, J.-Defendants 5 to 8 in a suit for specific performance are the appellants herein. The first respondent-plaintiff, Deep Chand filed a suit for specific performance against the second respondent, Kare, who was the owner of the suit property measuring 26 Kanals and 2 Marlas situated in Village Prithla of Faridabad District. The first respondent agreed to purchase the land from Kare for a consideration of Rs. 35,000/- per acre and an agreement was entered into between these two parties on 8.12.1986. The first respondent paid an amount of Rs.8,000/- to Kare on the date of the agreement and Kare had to execute the sale-deed by 25th May, 1987, but this date was further extended upto 15th June, 1987. However, Kare did not execute the sale-deed as promised by him. Therefore, the first respondent was constrained to file a suit for specific performance.

2. The second respondent, Kare, who was the sole defendant in the suit, filed a written statement contending that he was not the real owner of the property and that it belonged to his children. He also alleged that he had mortgaged the property in favour of one Gopal. The first respondent-plaintiff, thereupon impleaded the children of Kare as defendants 2 to 4 in the suit and they are respondents 3 to 5 herein. The first respondent-plaintiff later came to know that the children of Kare had effected certain alienation in favour of the appellants herein. Therefore, the appellants were impleaded as defendants 5 to 8 in the suit.

3. The first defendant Kare, though admitted the agreement, alleged that he never intended to execute a sale-deed in favour of the first respondent-plaintiff, but only a mortgage. He denied the thumb impression found on the agreement for sale. Defendants 2 to 4, who are the children of Kare, also filed a written statement alleging that there was a Family Settlement whereby the properties were given to them and that after the Family Settlement, they had filed a suit for declaration of title in respect of the suit property and a decree was passed in their favour on 1.10.1987. They admitted having executed subsequently four sale deeds in favour of defendants 5 to 8 in respect of a portion of the suit property.

4. The appellants, who were defendants 5 to 8 in the suit, claimed title over the property. They alleged that on 20.10.1986 they had entered into an agreement with Kare for the sale of the property for Rs. 32,000/- per acre. Kare, however, did not execute the sale deed, but transferred the property in favour of his children and when the appellants insisted for enforcement of the said agreement, the children of Kare honoured the same by executing the four sale deeds and handed over the possession of the property. The appellants contended that the first respondent was not entitled to the decree for specific relief. The trial Court dismissed the suit on the ground that by virtue of the decree dated 1.10.1987 passed in favour of defendants 2 to 4, they had become the owners of the property and so long as that decree was not challenged by the first respondent-plaintiff in any proceedings, he was not entitled to seek specific relief of the contract entered into by him with Kare. However, the trial Court allowed the recovery of the advance amount paid by the first respondent. Thereafter, the first respondent filed an appeal against the decree and judgment of the trial Court. The appellate court reversed the decree and held that the agreement entered into by the first respondent with Kare was a true and genuine document; that the Family Settlement as also the decree passed by the civil court in favour of defendants 2 to 4 were collusive transactions; and that defendants 2 to 4 had no right to alienate the property. It was further held that such alienation in favour of defendants 5 to 8 had been made after the filing of the suit by the first respondent-plaintiff and they are hit by the doctrine of lis pendens. Aggrieved by the judgment of the appe

Click Here to Read the rest of this document

2001 Supreme(SC) 360

IMPORTANT POINTThe first-respondent-plaintiff is entitled to a decree of specific performance against appellants subject to redemption of mortgage as indicated in this judgment.

IMPORTANT POINT
The first-respondent-plaintiff is entitled to a decree of specific performance against appellants subject to redemption of mortgage as indicated in this judgment.