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SUPREME COURT OF INDIA
KURIAN JOSEPH, ROHINTON FALI NARIMAN, JJ.
Syscon Consultants P. Ltd. – Appellant
Versus
M/s Primella Sanitary Prod. P. Ltd. & Others – Respondents
Civil Appeal Nos. 2910, 2909, 2911 & 2912 of 2013 & Contempt Petition (Civil) No. 89 of 2016 In Civil Appeal No. 2910 of 2013
Decided On : 19-09-2016
(b) Property law – Inventory proceedings – Any charge or liability to the estate – Required to be disclosed in inventory proceedings – So that such charges could be taken note of in partitioning the estate – In case of litigation, the proceedings would be required to await the outcome thereof – Instantly suit for declaration and injunction sought by Defendants 7 and 8 and other suits pending at the time of inventory proceedings – The proceedings would have been subject to the result of the suits. (Para 45, 47)
(c) Property law – Specific performance – Suit property not readily capable of valuation – Therefore monetary compensation would not suffice and be an adequate alternative to specific performance – plaintiff always ready to perform its obligations under the Agreement to Sell – Plaintiff even discharging mortgage with the Bank – Paying almost three times the amount of the consideration – Clear title made out on Defendants 1 to 8 upon discharging mortgage – Agreement was enforceable thereafter – Article 2177 of the Portuguese Civil Code, 1867 and Section 44 of the Transfer of Property Act, 1882 – Do not prohibit alienation of undivided interest – High Court rightly granting decree to plaintiff – No interference warranted. (Para 48, 50, 60)
(1990) 3 SCC 517; (1994) 4 SCC 18; (2000) 10 SCC 636; (2005) 5 SCC 142; (2009) 10 SCC 654; (1999) 2 SCC 635 – Relied upon
Facts of the case:
The Plaintiff had sought for specific performance of the agreement dated 04.09.1985 made with Defendants 1 to 6 for conveyance of the suit property known as Conco situated at village Palolem in Canacona Taluka in the State of Goa. The 7th Defendant was the Bank where the Defendants had mortgaged the suit property.
In the agreement dated 04.09.1985, the Defendants 1 to 6 claimed that they were the absolute owners of the suit property and that the property was free from all attachments, charges, etc. The agreed consideration was Rs.6.5 lakhs and, on the date of agreement, Rs.50,000 was given as advance.
The sale was to be completed within one month from the date of establishment of a good and marketable title of the vendor and, if the title was not made out or in case the said land was found to be subject to any encumbrance or charges or attachments or other claims, rights or demands, the Plaintiff was at liberty to rescind the agreement and, in that event, the Defendants 1 to 6 would refund the earnest money with interest @ 21 per cent per annum. It was also agreed between the parties that in case the Defendants 1 to 6 fail to complete the sale after a good and marketable title is made out, the Plaintiff was at liberty to enforce the specific performance of the agreement or recover the earnest money with interest @ 21 per cent per annum. The Defendants 1 to 6 had agreed to give a clear title to the property, if necessary by joining any other person or persons or even to redeem any charge or encumbrance.
In the Special Civil Suit No. 88/87/A filed by the Plaintiff in the court of Civil Judge Senior Division, Margao, the Plaintiff claimed that the agreement was enforceable at the option of the Plaintiff-purchaser.
Defendants 1 to 6 wanted the suit to be dismissed in view of the objection of Smt. Kishori Nayak.
In the inventory proceedings, the auction took place on 01.12.1990. The suit property was auctioned by the 7th Defendant-Smt. Kishori Nayak and the remaining estate was also divided amongst the other heirs and the final orders in the inventory proceedings was passed by the Civil Judge Senior Division, Margao on 30.01.1991.
The Plaintiff, thereafter, filed Civil Suit No. 329/1992 seeking a declaration that inventory proceedings were vitiated by fraud to the extent of allocation of suit property to the 7th Defendant Smt. Kishori Nayak and her husband and for setting aside the inventory proceedings.
The Plaintiff cleared the entire liability on payment of Rs. 17 lakh on 12.05.1993. Thus, the distress sale was averted, the mortgage was redeemed and the charge on the property was released.
The Defendants 7 and 8 filed a writ petition before the High Court challenging the proceedings of the Assistant Registrar culminating in redemption of mortgage.
On 14.11.1995, the 7th and 8th Defendants, who had obtained the suit property in the inventory proceedings, sold the same to the 9th Defendant-Syscon Consultants Pvt. Ltd. Thereafter, the Plaintiff sought amendment for cancelling that sale also. The 9th Defendant purchased the suit property for a sum of Rs. 34,00,000/-knowing fully well that the said property was in litigation and the fate of some of the litigations.
By common judgment dated 31.12.2001, the Trial Court disposed of both suits upholding the right of 7th and 8th Defendants (the sister and her husband). The Defendants 1 to 6 were directed to refund the advance of Rs. 50 thousand with interest @ 21 per cent per annum from the date of institution of the suit to the Plaintiff and further Defendants 1 to 8 were directed to refund an amount of Rs.17 lakhs to the Plaintiff with interest @ 6 per cent per annum from 12.05.1993.
The High Court allowed the appeal in part, and partly reversed the trial court judgment therein. To the extent of the share of Defendants 1 to 6, in the suit property, the suit was decreed. Defendants 1 to 6 were permitted to withdraw the amount deposited in court after the decree was being fully satisfied.
Finding of the Court:
High Court rightly granting decree to plaintiff.
Result: Appeal dismissed.
JUDGMENT :
Kurian, J.
1. These appeals essentially deal with a dispute on the validity and executability of an agreement for sale and once that issue is tackled, the rest are practically not of much significance. The parties are described as they are in the suit for specific performance No. 88/1987 on the file of the Civil Judge Senior Division at Margao. The Plaintiff is the first respondent herein. The Plaintiff had sought for specific performance of the agreement dated 04.09.1985 made with Defendants 1 to 6 for conveyance of the suit property known as Conco situated at village Palolem in Canacona Taluka in the State of Goa. The 7th Defendant was the Bank where the Defendants had mortgaged the suit property.
2. In the agreement dated 04.09.1985, the Defendants 1 to 6 claimed that they were the absolute owners of the suit property and that the property was free from all attachments, charges, etc. The agreed consideration was Rs.6.5 lakhs and, on the date of agreement, Rs.50,000 was given as advance. The relevant portions of the agreement for sale dated 04.09.1985, are extracted below:-
“3. The Vendor hereby declares that the said land agreed to be sold is free from any encumbrance, attachment, charge or other claims, rights and demands, and is not affected by any notice or scheme of acquisition or requisition and that the Vendors have among themselves the full power and absolute authority to sell and deal with the said land. The Vendor shall at his own expense effectually indemnify and keep indemnified the purchasers from and against all claims, demands, losses, damages, cost and expenses, if any and whatsoever, sustained, incurred or suffer by the Purchaser, on account of any defect in the title of the Vendor or any change or encumbrance or any scheme of acquisition or requisition affecting the land hereby contracted to be sold.
4. The Purchaser has this day paid to the Vendor the sum of Rs.50,000/- (Rupees fifty thousand only) as and by way of earnest money (the payment and receipt whereof the Vendor does hereby admit and acknowledges) and the balance of the purchase money amounting to Rs.6 lacs (Rupees six lacs only) shall be paid at the time of the completion of the sale. Simultaneously with the execution of this agreement the Vendor shall at his own cost furnish to the Purchasers an abstract of all title deeds and other papers and writings including copies or extracts from records of the Talati or Circle Inspector relating to the said land. The sale shall be completed within one month from the date of establishment of a good and marketable title of the Vendor.”
xxx xxx xxx xxx
“6. The Vendor hereby agrees to answer all reasonable requisitions and satisfy all objections on title to be made by the Purchasers or their Solicitor or Representatives. If a good and marketable title is made out and the said land is found to be free from all encumbrance, attachments and charges and other rights, demands and claims and not effected by any notice or scheme of acquisition or requisition AND permission and no objection from any Authority or Authorities, if any, is obtained by the Vendor, the Vendor will execute a proper conveyance or conveyance in favour of the Purchasers or their nominee or nominees or assigns in which the Vendor shall make the other person or persons, if any, join, if necessary, to pass and convey an absolute title unto the Purchaser or his nominee or nominees or assigns or to redeem any charge or encumbrances. The Vendor shall bear and pay all outgoings, expenses and liabilities in respect of the said land upto and inclusive of the day of the completion of the sale. The Vendor shall hand over vacant and peaceful possession to the Purchaser of the said land at the time of completion of the sale.”
xxx xxx xxx xxx
“8. If a good and marketable title is not made out or the said land is found to be subject to any encumbran
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