1. Agreement for sale of land — Possession delivered as part performance — Seller's death — Suit for declaration of title and possession by legal heirs. (Para 3 , 4 , 5 , 6 , 7 )
Back
Next 
2017 Supreme(SC) 1151
SUPREME COURT OF INDIA
Abhay Manohar Sapre, Navin Sinha, JJ.
Revanasiddayya – Appellants
Versus
Gangamma @ Shashikala & Anr. – Respondents
Civil Appeal No. 5039 of 2009
Decided On : 05-12-2017
Advocates Appeared:
For the Appellants : Trideep Pais, N.K. Verma, Ms. Anjana Chandrashekar, Advs.
For the Respondents:- Ankolekar Gurudatta, Tomy Chacko, Shantha Kumar Mahale, Rajesh Mahale, Advs.
For the Appellants : Trideep Pais, N.K. Verma, Ms. Anjana Chandrashekar, Advs.
For the Respondents:- Ankolekar Gurudatta, Tomy Chacko, Shantha Kumar Mahale, Rajesh Mahale, Advs.
Important Points
IMPORTANT POINTS
On dismissal of suit for specific performance, protection under section 53-A of Transfer of Property Act, 1908 also extinguishes.
Once the bargain to sale/purchase of any land fails, the unsuccessful buyer becomes entitled in law to claim refund of earnest money from the seller under Section 22 of the Indian Specific Relief Act.
On dismissal of suit for specific performance, protection under section 53-A of Transfer of Property Act, 1908 also extinguishes.
Once the bargain to sale/purchase of any land fails, the unsuccessful buyer becomes entitled in law to claim refund of earnest money from the seller under Section 22 of the Indian Specific Relief Act.
Subject
Property Law - Specific Performance
Act Referred
Headnote
(a) Property law – Dismissal of suit for specific performance – Disentitles the beneficiary of agreement to sale from continuing possession – On such dismissal, protection under section 53-A of Transfer of Property Act, 1908 also extinguishes. (Para 18)
(b) Property law – Appellant put in possession by original owner after receiving earnest money as per agreement to sale – Sale deed not executed and vendor died – Appellant not invoking protection u/s 53-A, TP Act – Courts below rightly declaring respondents as owner and passing a decree for possession. (Para 20, 22)
(c) Indian Specific relief Act – Section 22 r/w Article 142, Constitution of India – Appellant paying earnest money of 100000 to respondents’ father who died without executing sale deed – Appellant’s suit for specific performance dismissed – Held entitled to refund of earnest money. (Para 25, 26)
Facts of the case:
The respondents' father - Veerabasayya was the original owner of the suit land. He entered into an agreement (Ex-P-1) on 06.11.1986 to sell the suit land to the appellant for a total consideration of Rs. 1,75,000/-. The appellant paid a sum of Rs. 1,00,000/- to Veerbasayya towards earnest money and was, accordingly, placed in possession of the suit land by him. The sale deed of the suit land was to be executed within 3 months. In the meantime, Veerbasayya died on 06.08.1988. The respondents being his legal representatives inherited the suit land and became its owners.
On 14.09.1993, the respondents herein filed a suit against the appellant (defendant No.1) for a declaration and possession in relation to the suit land.
The Trial Court dismissed the suit insofar as the relief of possession was concerned but decreed the suit by granting a declaratory decree in respondents' favour of their ownership over the suit land. Thus, the Trial Court held that the respondents are the owners of the suit land but are not entitled to claim possession of the suit land.
After the disposal of the respondents' suit, the appellant, in the year 2000, filed a suit against the respondents seeking specific performance of the agreement dated 06.11.1986 from the respondents in relation to the suit land. The appellant's suit for specific performance was dismissed in 2009 and the appeal filed by the appellant against the dismissal of his suit was also dismissed by the District & Sessions Judge.
The respondents filed first appeal in the High Court.
The High Court allowed the respondents' first appeal, modified the judgment/decree of the Trial Court and passed a decree for possession of the suit land against the appellant in relation to the suit land.
Finding of the Court:
Appellant is only entitled to refund of the earnest money.
Result: Appeal disposed of.
Legal Category Hierarchy
Table of Contents
2. Plaintiff claims title by inheritance and possession due to expired agreement — Defendant claims lawful possession based on the agreement for sale. (Para 7 , 8 )
3. Possession under part performance becomes unauthorized once a suit for specific performance is dismissed, removing protection under Section 53-A of the Transfer of Property Act. (Para 17 , 18 , 21 , 22 )
4. Dismissal of a suit for specific performance terminates the protection of part performance under Section 53-A, Transfer of Property Act, rendering possession unauthorized. (Para 18 , 22 )
5. Decree for possession upheld — Respondents directed to refund earnest money — Appellant directed to restore vacant possession of the suit land. (Para 25 , 26 , 27 )
6. What is the effect of the dismissal of a suit for specific performance on a buyer's possession of the property?
Once a suit for specific performance is dismissed, the buyer is no longer entitled to retain possession. The protection available under Section 53-A of the Transfer of Property Act ceases, rendering the possession unauthorized and illegal, thereby entitling the owner to claim the property back. (Para 17 , 18 , 22 )
7. Is a buyer entitled to a refund of earnest money if the agreement for sale fails?
Yes, under Section 22 of the Specific Relief Act, if a bargain to sale or purchase land fails, the unsuccessful buyer becomes entitled in law to claim a refund of the earnest money from the seller. (Para 25 )
8. Can a party in possession under an agreement for sale defend possession against the true owner?
Yes, a party placed in possession pursuant to part performance of an agreement can defend their possession against the true owner by proving the requirements of Section 53-A of the Transfer of Property Act. (Para 18 , 21 )
JUDGMENT
Abhay Manohar Sapre, J.
This appeal is filed by defendant No.1 against the final judgment and order dated 25.10.2006 passed by the High Court of Karnataka at Bangalore in Regular First Appeal No.242 of 2004 whereby the High Court allowed the first appeal filed by respondent No.1(plaintiff) and modified the judgment/decree of the Trial Court dated 09.02.2000 passed by the IIIrd Additional Civil Judge, Dharwad in O.S. No. 151 of 1993 and accordingly passed a decree for possession of the suit land against the appellant in relation to the suit land.
2. In order to appreciate the issue involved in the appeal, which lie in a narrow compass, few relevant facts need mention herein below.
3. The appellant is defendant No.1 whereas respondent No.1 is the plaintiff and respondent No.2 is defendant No.2 in a suit out of which this appeal arises. Plaintiff and defendant No.2 are the legal representatives of Veerabasayya, who was the original owner of the suit land.
4. The dispute in this appeal relates to the land bearing R.S. No. 177/3A+3B admeasuring 7 acres 37 guntas, R.S. No.161/2A admeasuring 12 acres 36 guntas. Situated at Shirol Village, R.S. No.24/5, admeasuring 5 acres 02 guntas situated at Kallapur, R.S. No.35/1, admeasuring 1 acre 22 guntas and R.S. No.35/2 admeasuring 3 acres 10 guntas situated at Budihal (hereinafter referred to as "suit land").
5. The respondents' father - Veerabasayya was the original owner of the suit land. He entered into an agreement (Ex-P-1) on 06.11.1986 to sell the suit land to the appellant for a total consideration of Rs. 1,75,000/-. In terms of the agreement, the appellant paid a sum of Rs. 1,00,000/- to Veerbasayya towards earnest money and was, accordingly, placed in possession of the suit land by him. The sale deed of the suit land was to be executed within 3 months. In the meantime, Veerbasayya died on 06.08.1988. The respondents being his legal representatives inherited the suit land and became its owners.
6. On 14.09.1993, the respondents herein filed a suit against the appellant(defendant No.1) being O.S. No.151/1993 in the Court of IIIrd Additional Civil Judge, Dharwad for a declaration and possession in relation to the suit land.
7. According to the respondents, they, being the owner of the suit land by virtue of inheritance, are entitled to claim possession of the suit land from the appellant(defendant No.1). It was alleged that the agreement dated 06.11.1986 executed between the parties in relation to the suit land for its sale by the respondents' late father to the appellant expired long back by efflux of time inasmuch as the appellant too never took any steps to enforce the agreement while it was enforceable in law and continued to remain in possession of the suit land and enjoyed its usufructs to the detriment of the respondents' interest in the suit land. It is essentially on these averments, the respondents claimed declaration of their title over the suit land and possession from the appellant.
8. The appellant contested the suit by filing the written statement. According to the appellant (defendant No.1), he was in lawful possession of the suit land pursuant to the agreement dated 06.11.1986 and hence the respondents are not entitled to claim a relief of declaration of their title over the suit land or even possession of the suit land from the appellant.
9. Parties adduced evidence. The Trial Court, by judgment/decree 09.02.2000, dismissed the suit insofar as the relief of possession was concerned but decreed the suit by granting a declaratory decree in respondents' favour of their ownership over the suit land. In other words, the Trial Court held that the respondents are the owners of the suit land but are not entitled to claim possession of the suit land.
10. After the disposal of the respondents' suit, the appellant, in the year 2000, filed a suit against the respondents being O.S. No. 153/2000 seeking specific performance of the agreement dated 06.11.1986(Ex-P-1) from the responde
