Andhra Pradesh High Court
Judges : M.SESHACHALAPATI
Panem Venkanarayana Sastry - Appellant
Versus
Rajupalli Chinna Yella Reddy - Respondent
Decided On : 11-13-58
SPECIFIC PERFORMANCE - CONTRACT OF SALE - AGREEMENT SUBJECT TO APPROVAL OF TITLE BY PURCHASER'S LAWYER - WHETHER A CONDITION PRECEDENT OR SUBSEQUENT - INTERPRETATION - FULFILMENT OF CONDITION - BONA FIDE PURCHASERS FOR VALUE WITHOUT NOTICE - REQUIREMENTS.
Fact of the Case:
The plaintiffs filed three suits for specific performance of a contract of sale of immovable properties against the defendants. The defendants claimed that there was no concluded contract and that they were bona fide purchasers for value without notice.
Finding of the Court:
The court found that there was a concluded contract between the plaintiffs and the 1st defendant for the sale of the suit properties, and that the agreement was subject to the approval of the title by the plaintiffs' lawyer. The court also found that the condition was fulfilled and that the defendants were not bona fide purchasers for value without notice.
Issues: 1. Whether the agreement pleaded by the plaintiffs is true; 2. Whether that agreement, even if true, constitutes a concluded contract, such as could be enforced by a decree for specific performance; and 3. Whether defendants 2 and 3 are bona fide purchasers for value without notice of the rights of the plaintiff in respect of the sale of the suit properties.
Ratio Decidendi: 1. The court held that the agreement pleaded by the plaintiffs was true and that it constituted a concluded contract, enforceable by a decree for specific performance. The court relied on the evidence of the plaintiffs' witnesses, particularly the testimony of P.W. 3, who was the plaintiffs' lawyer. The court also held that the term providing for the approval by the lawyer was a condition of the contract, and that the contract could not be performed unless the condition was fulfilled. 2. The court held that the defendants were not bona fide purchasers for value without notice. The court relied on the evidence of the plaintiffs' witnesses, particularly the evidence of P.W. 1, who had lodged a protest with the sub-registrar on 2-8-1951, and on the fact that defendants 2 and 3 had not paid the entire consideration in cash.
Final Decision: The court dismissed the appeals filed by the defendants and upheld the decree for specific performance passed by the lower court.
( 1 ) THE defendants in the three suits O. S. Nos, 521 to 323 of 1951, on the file of the District Munsifs Court, Cuddapah, are the appellants before me. These suits were Instituted separately by the respondents in these second appeals for the specific performance of a contract of sale by directing the execution of proper conveyances by the defendants, of the suit properties. The 1st defendant in all the suits is the owner of the properties. Defendants 2 and 3 are the purchasers subsequent to the alleged agreement. The 3rd defendant died pending the suit and his legal representative was brought on record.
( 2 ) THE case of the plaintiff is that there was a binding and concluded contract entered into between the plaintiffs in the three suits and the 1st defendant whereunder the 1st defendant agreed to sell the suit properties to the three plaintiffs and that contrary to that agreement he sold the suit proper ties to defendants 2 and 3 who purchased them with the knowledge of the plaintiffs rights under the con-tract. It was also alleged that the sale deed in favour of defendants 2 and 3 was collusive and ante-dated document, and that defendants 2 and 3 were not bona fide purchasers for value.
( 3 ) THE case of the 1st defendant Is that there were only negotiations in respect of the purchase of the suit properties by the plaintiffs and that those negotiations had never become crystallized into a concluded and binding agreement, and that, therefore, he was free to sell and convey the properties to defendants 2 and 3. The case of the defendants 2 and 3 is that they were bona fide purchasers for value without notice of the alleged rights of the plaintiffs and that the plaintiffs were not entitled to the reliefs prayed for by them.
( 4 ) THE learned District Munsif found that the agreement of sale pleaded by the plaintiffs was not true; and, therefore, dismissed the suit for specific performance. The defts. claimed compensatory costs which, however, were disallowed. The plaintiffs filed three appeals (A. S. Nos. 144 to 146 of 1954) on the file of the Court of the Subordinate Judge, Cuddapah. The successful defendants filed cross-objections with respect to the disallowance of compensatory costs. The appeals and the cross-objections were heard together by the learned Subordinate Judge, who held that the agreement pleaded by the plaintiffs was true in fact and that in pursuance thereof the plaintiffs were entitled to a decree for specific performance. He also held that defendants 2 and 3 were not bona fide purchasers for value without notice of the rights of the plaintiffs. In the view he had taken on the main issues in. the case he reversed the decision of the learned District Munsif and passed an appropriate decree for the deposit of the purchase money by the plaintiffs and the execution of conveyances by defendants in favour of the three plaintiffs. The cross objections filed by the defendants were dismissed. Hence these three second appeals by the three defendants.
( 5 ) THE questions that fall to be determined by me in these second appeals are (i) whether the agreement pleaded by the plaintiffs is true; (ii) whether that agreement, even if true, constitutes a concluded contract, such as could be enforced by a decree for specific performance; and (iii) whether defendants 2 and 3 are bona fide purchasers for value without notice" of the rights of the plaintiff in respect of the sale of the suit properties.
( 6 ) THE agreement which is set up by the plaintiffs is not in writing. It is an oral agreement. Therefore, whether there was an agreement in feet, or not, and, if so, what its terms are, can only be established by the evidence on record. The case of the plaintiffs as sought to be proved by the evidence adduced on their behalf is as follows:
( 7 ) SURVEY Nos. 1 to 4 in the village of Ramanapalli. Cuddapab Taluq belonged to one Gangabai, and the 1st defendant in two equal shares. The plaintiff in O. S. 34 of 19
MARY JOSEPH V. MOHD. HAJEE MOOSA AND CO.
SUBAYYA CHOWDARY V. VEERAYYA, 1955 ANDHWR 502
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