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SUPREME COURT OF INDIA
Abhay S. Oka, Sanjay Karol, JJ.
Maharaj Singh & Ors. – Appellants
Versus
Karan Singh (Dead) Thr. Lrs. & Ors. – Respondents
Civil Appeal No. 6782 of 2013
Decided on : 09-07-2024
(A) Specific Relief Act, 1963 – Section 20 – Agreement to sell – Suit for Specific Performance – Non-execution of sale-deed by defendant – Legal representative of first defendant did not dispute that first defendant signed agreement – Suit agreement cannot be held as bogus or sham – When, in a given case, defendants who are subsequent purchasers, fail to prove that they entered into sale deed in good faith and without notice of suit agreement, in view of Section 19(b), decree for specific performance can be passed against such defendants – In such a case where Section 19(b) is applicable, under decree of specific performance, subsequent purchasers can be directed to execute sale deed along with original vendor – There is no necessity to pray for cancellation of subsequent sale deeds – There was no requirement to make prayer in plaint for cancellation or setting aside subsequent sale deeds – Decree enjoining defendants to obtain permission to sell suit property can be passed as it is their implied obligation to do so – Decree for specific performance can be passed contingent upon grant of permission – Suit was filed within limitation, and defendants did not raise plea of delay and laches – There are concurrent findings of three Courts on issue of readiness and willingness shown by first plaintiff – Impugned decree modified by directing legal representative of first defendant and second to fourth defendants to execute sale deed in favour of first plaintiff only to the extent of one half undivided share in suit property. (Paras 12, 15, 16, 18, 19 and 21)
(B) Zamindari Abolition Act, 1950 – Section 154-B – Transfer of Property Act, 1882 – Section 54 – Prohibition on sale of agricultural lands – What is prohibited is sale of agricultural land to a non-agriculturalist – In view of Section 54 of T.P. Act, an agreement for sale does not transfer property subject matter of agreement to purchaser – It does not create any interest in property subject matter of agreement – Embargo created by sub-section (1) of Section 154-B will apply only to execution of sale deed and not to execution of agreement for sale. (Para 17)
(C) Indian Evidence Act, 1872 – Sections 91 and 92 – Exclusion of oral evidence – Section 91 of Evidence Act excludes oral evidence of terms of written document by requiring those terms to be proved by document itself – Section 92 excludes oral evidence for contradicting, varying, adding to or subtracting to such terms – These two sections do not prevent parties from adducing evidence on issue of whether parties to documents had agreed to contract on terms set forth in document. (Para 11)
Facts of the case:
Questions for consideration are:
a) Can the contention that the suit agreement was sham and bogus and not intended to be acted upon be allowed to be raised notwithstanding Sections 91 and 92 of the Evidence Act?
b) Was the suit agreement sham and bogus and not intended to be acted upon?
c) Were the second to fourth defendants bona fide purchasers for value without notice of the suit agreement?
d) Whether, in view of the decision of this Court in the case of B. Vijaya Bharathi, the plaintiffs are not entitled to a decree of specific performance in the absence of any prayer for cancellation of the two subsequent sale deeds?
e) Do provisions of Zamindari Abolition Act create a bar on the execution of sale deed in terms of suit agreement?
f) Whether plaintiffs are entitled to a decree of specific performance?
Findings of Court:
As second plaintiff was not interested in getting specific performance, decree ought to have been restricted to undivided one-half share in the suit property in favour of only the first plaintiff.
Result : Appeal partly allowed with directions and observations.
Key Points: - The Court discusses whether the suit agreement can be considered sham/bogus and acted upon, despite Evidence Act sections 91 and 92. (!) (!) (!) - It analyzes the status of second to fourth defendants as bona fide purchasers for value without notice, given registration and notice implications under Registration Act and Transfer of Property Act. (!) (!) - It states that a decree for specific performance can be conditioned on obtaining permission to sell under Zamindari Abolition Act, including implied covenants to obtain such permission. (!) (!) (!) - The remedy framework for dealing with subsequent sale deeds in a specific performance context is discussed, including directing joint execution with the original vendor and potential cancellation considerations. (!) (!) (!) - It clarifies that an agreement for sale does not transfer title and that embargo under Zamindari Abolition Act applies to sale deeds, not to the agreement for sale. (!) - It addresses that the plaintiffs may be entitled to specific performance against subsequent purchasers unless they are bona fide purchasers without notice; otherwise, relief may be restricted. (!) (!) - The court modifies decree to limit relief to one-half undivided share in favor of the first plaintiff and directs permission application under Zamindari Abolition Act. (!) (!) (!)
JUDGMENT :
Abhay S. Oka, J.
This appeal is at the instance of the original third, second, and fourth defendants. The first and second respondents are the original plaintiffs. The third respondent is the mother of the deceased original first defendant. For convenience, we are referring to the parties according to their status in the suit.
FACTUAL ASPECT
2. Reference to a few factual aspects will be necessary. The first defendant executed a registered agreement for sale dated 7th December 1981 by which he agreed to sell his Bhumidhari land measuring 2.90 acres of Khasra no. 48 (for short, 'the suit property') at village-Jauniwala, Tehsil-Kashipur, District-Nainital in favour of the plaintiffs for the consideration of Rs. 20,300/-. There was a recital in the registered agreement dated 7th December 1981 (for short, 'the suit agreement') that the first defendant had received a sum of Rs. 7,000/- as advance and the balance consideration was payable at the time of execution of the sale deed. The first defendant agreed to execute the sale deed within three years from the date of the suit agreement. According to the plaintiffs' case, requests were made orally and by sending notices to the first defendant to execute the sale deed. It is pleaded in the plaint that the first defendant refused to accept notices.
3. On 6th September 1983, the first defendant sold 1.60 acres out of the suit property to the second and third defendants by a registered sale deed. By another sale deed dated 12th December 1983, the first defendant sold the remaining part of the suit property to the second to fourth defendants. We must note that the suit was filed on 17th December 1983, and the averments regarding the subsequent alienations were incorporated by the amendment made to the plaint in terms of the order dated 28th July 1984. The case made out in the plaint is that the subsequent sale deeds are collusive. The prayer in the suit was for specific performance of the suit agreement with a direction to the defendants to hand over possession of the suit property to the plaintiffs and to execute a sale deed in respect of the suit property in their favour.
4. The defendants, including the legal representative (Smt. Bhagwati Devi) of the original first defendant, filed separate written statements. In the written statement filed by the legal representative of the first defendant, it was contended that the suit agreement was fictitious. In the written statement filed by the second and third defendants, it was pleaded that the suit agreement is a forged document which was never to be acted upon. It is pointed out that the first plaintiff - Karan Singh, and the first defendant were relatives. The plaintiffs never paid any money to the first defendant.
5. The first plaintiff was examined as a witness. The second plaintiff, Murari Singh, did not support the first plaintiff. He deposed in favour of the defendants. He stated on oath that the suit agreement was made only to ensure that the first defendant did not alienate the suit land. He stated that the first defendant was his relative. He stated that the first plaintiff was related to him and was a well-known person. The first plaintiff's name was included as the purchaser in the suit agreement to deter the first defendant. He stated that he and the first plaintiff never demanded execution of the sale deed from the first defendant. The second plaintiff proceeded to state that he had not filed the suit, and the signature shown to him on the vakalatnama was of someone else. Subsequently, the second plaintiff filed an affidavit stating that the first defendant had several bad habits and, therefore, there was an apprehension that he would sell the suit property.
FINDINGS OF THE COURTS
6. The Trial Court held that the execution of the suit agreement was proved. Relying upon Section 92 of the Indian Evidence Act, 1872 (for short, 'the Evidence Act'), the learned Trial Judge held that evidence contrary to the contents of the suit agr
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