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Andhra Pradesh High Court
Judges : A.GOPAL RAO, CHENNAKESAVA REDDY
Damacharla Venkata Seshaiah - Appellant
Versus
Damacharla Venkayya - Respondent
Decided On : 02-07-73
SPECIFIC PERFORMANCE - CONTRACT FOR SALE OF IMMOVABLE PROPERTY - DISCRETION OF COURT - DELAY - LACHES OR WAIVER - CONDUCT OF PLAINTIFF - CHANGE IN CIRCUMSTANCES - BONA FIDE PURCHASERS - SECTION 20(2)(B) OF THE SPECIFIC RELIEF ACT, 1963.
Fact of the Case:
The plaintiff-appellant instituted a suit for specific performance of an agreement to sell executed on 7-4-1961. The defendants, including the 1st defendant who had entered into the agreement with the plaintiff, and the 2nd and 3rd defendants who had purchased portions of the property from the 1st defendant, contested the suit. The trial court found that the agreement to sell and the endorsement thereon were genuine and binding on the 1st defendant, but that the subsequent agreements and sale deeds executed by the 1st defendant in favor of the 2nd and 3rd defendants were not valid. The trial court also found that the plaintiff was not entitled to specific performance due to his delay in pursuing his claim, and granted him a decree for compensation instead. The plaintiff appealed, and the 2nd and 3rd defendants filed cross-objections.
Finding of the Court:
The High Court held that the trial court erred in refusing to grant specific performance to the plaintiff. The court noted that the plaintiff had not been guilty of laches or waiver, and that the defendants had not been induced to carry on the constructions on the property by any conduct of the plaintiff. The court also found that the 2nd and 3rd defendants were not bona fide purchasers without notice of the plaintiff's agreement to sell. The court further held that the trial court erred in exercising its discretion under Section 20(2)(b) of the Specific Relief Act, 1963, in favor of the defendants, as the hardship caused to the defendants by the performance of the contract was self-inflicted and not unforeseen.
Issues: 1. Whether the plaintiff was entitled to specific performance of the agreement to sell. 2. Whether the defendants were bona fide purchasers without notice of the plaintiff's agreement to sell. 3. Whether the trial court erred in exercising its discretion under Section 20(2)(b) of the Specific Relief Act, 1963, in favor of the defendants.
Ratio Decidendi: 1. The court held that the plaintiff was entitled to specific performance of the agreement to sell because he had not been guilty of laches or waiver, and the defendants had not been induced to carry on the constructions on the property by any conduct of the plaintiff. 2. The court held that the 2nd and 3rd defendants were not bona fide purchasers without notice of the plaintiff's agreement to sell because they had knowledge of the agreement and had not made any inquiries to ascertain its validity. 3. The court held that the trial court erred in exercising its discretion under Section 20(2)(b) of the Specific Relief Act, 1963, in favor of the defendants because the hardship caused to the defendants by the performance of the contract was self-inflicted and not unforeseen.
Final Decision: The High Court allowed the appeal, set aside the judgment of the trial court, and decreed the plaintiff's suit for specific performance. The plaintiff was awarded costs throughout.
( 1 ) THIS appeal is from the judgment of our learned brother M. Krishna Rao, J. given in Appeal Nos. 368 and 443 of 1968 and Memorandum of Cross Objections and 26-3-1971.
( 2 ) THE plaintiff-appellant instituted O. S. No. 71 of 1961 for specific performance of an agreement to sell executed on 7-4-1961. The averments were that originally S. No. 16/1 situate in East Naidupalem belonged to the deity kodandaramaswami, whose temple is at Ongole. There was litigation between the trustees of the temple and the Ist defendant who was claiming occupancy rights. The litigation, however, ended in negating the claim set up by the Ist defendant. The Ist defendant, however, continued in possession. The trustees of the Temple and the Ist defendant on approval of the Government entered into a sale deed executed by the trustees in favour of the Ist defendant on 7-4-1961.
( 3 ) THE Ist defendant borrowed Rs. 2,000. 00 from the planitff in order to meet his requirements regarding payment of consideration to the trustees. The amount later on was paid to the plaintiff.
( 4 ) THE Ist defendant entered into a contract for sale which the plaintiff on 7-4-1961 agreeing to sell 10 kuntas of the said property at the rate of Rs. 1100. 00 per kunta (Exhibit A-1 ). The sale deed was agreed to be executed within one week of the agreement.
( 5 ) SINCE the Ist defendant had some difficulties in executing the sale deed, he endorsed the agreement Exhibit A-2 on 14-4-1961 extending the time to two months.
( 6 ) A counterpart of the agreement was executed by the plaintiff and was left with the Ist defendant.
( 7 ) THE plaintiff was always willing and ready to perform his part of contract, but the Ist defendant put it off on some pretext.
( 8 ) THE plaintiff, however, came to know one month before the suit that the Ist defendant has entered into contracts for sale in respect of some portions of the land. He therefore insisted on the Ist defendant to complete the sale deed. It is then that Ist defendant disclosed that he sold 4 kuntas of the suit property to the 2nd defendant on 12-7-1959 (Ex. B-9 ).
( 9 ) HE also came to know thereafter that the Ist defendant has entered into an agreement to sell 6 kuntas of suit property in favour of 3rd defendant on 17-4-1961 (Exhibit B-13 ).
( 10 ) ON 19-10-1961 the plaintiff therefore gave notice Exhibit A-3 to the Ist and 2nd defendants asking for specific performance of the contract.
( 11 ) THE Ist defendants by Exhibit A-6 dated 10-11-1961 gave reply. He denied the execution of contract of sale in favour of the plaintiff or any endorsement on such agreement. The 2nd defendant also gave reply by Exhibit A-7 on 19-11-1961 on somewhat the same lines as Ist defendant.
( 12 ) THE plaintiff as a result instituted the present suit against the three defendants on 5-12-1961.
( 13 ) THE principal defense set up by the defendants was that the Ist defendant was that the Ist defendant had not entered into any agreement to sell the land to the plaintiff. Exhibits A-1 and A-2 were not executed by the 1st defendant. They are rank forgeries, 1st defendant further stated that he has sold 4 kuntas to 2nd defendant and agreed to sell 6 kuntas to 3rd defendant. It was further alleged that the 1st defendant had executed an agreement (Exhibit B-9) in favour of 2nd defendant as long back as 12-7-1959 and in pursuance of the same the sale deed was executed on 17-4-1961 (Exhibit B-10 ). Possession was already given to defendants 2 and 3 on the dates of their agreements.
( 14 ) IT was alleged by the 2nd defendant that he put a barbed wire and fenced the whole compound. He also constructed a pucca godown. He thus spent Rs. 20,000. 00 to Rs. 25,000. 00 on the improvement of property.
( 15 ) LIKEWISE the 3rd defendant also alleged that he constructed a barn and improved the property by spending about Rs. 6,000. 00.
( 16 ) ON these pleadings the trial Court framed in all seven issues.
( 17 ) THE plaintiff examined seven witnesses
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