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2006 Supreme(AP) 1012
2007 (2) ALT 225
IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
G. BHAVANI PRASAD,J.
D. Sarala
Versus
P. Pratap Reddy and others
Appeal Nos. 892 of 1994 and Batch
Decided on 7-9-2006.
Advocate appeared
M/s. Vilas V. Afzulpurkar and Deepak Deshpande, Advocate for the Appellant.
Mr. Abdul Rasheed for Smt. Anusha Mahmood, Advocate for the Respondent.
Headnote:
Transfer of Property Act – Section 3 – Sale in Dispute – Whether the agreements of sale and the sale deed in favour of the subsequent purchaser in respect of 100 square yards are true, valid and binding on the vendee – Whether the vendee is entitled to specific performance – Whether the vendee is not entitled to cancellation of the sale deed in favour of the subsequent purchaser and specific performance in respect of the said 100 square yards due to not impleading the vendor in O.S. and not impleading the subsequent purchaser within the period of limitation in O.S. – Held, Findings of fact arrived at by the trial Court are in tune with the evidence and broad human probabilities and if so, the oral agreement cannot be considered to be true and the written agreement cannot be considered to be bona fide and genuine and the purchase by the subsequent purchaser under the sale deed cannot be considered to disclose a bona fide purchase for value – But for the lapse of the vendee in not impleading the subsequent purchaser within time and the vendor for seeking cancellation of sale deed in favour of the subsequent purchaser, she would have been well within her rights to ignore the transactions between the vendor and the subsequent purchaser in respect of 100 square yards – In respect of 100 square yards covered by the sale deed in favour of the subsequent purchaser, such relief of specific performance becomes unavailable due to not making the subsequent purchaser a party to the suit in O.S. within the period of limitation – Balance of sale consideration was rightly directed to be deposited – Technical and procedural constraints may not ordinarily defeat valuable rights of a party but equally, if not more, valuable rights accrued to the subsequent purchaser by his Court not being impleaded in suit for specific performance within the period of limitation Court and the vendor by her not being made a party to the suit for declaring the sale deed in favour of the subsequent purchaser as void, cannot also be lightly interfered with – Any inherent power of the Civil Court also cannot be invoked in the face of specific provisions and principles of law and the vendee, therefore, has to be deprived of the property sold by the vendor to the subsequent purchaser – Trial Court exercised its judicial discretion in not awarding costs to either party in any of the three suits – Vendor, vendors husband and the subsequent purchaser were not able to show any justification to differ with the findings of fact arrived at by the trial Court – Appeals Dismissed
Based on the provided legal document, the key points are as follows:
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The court examined the validity and authenticity of agreements of sale and sale deeds, especially concerning the sale of 100 square yards to a subsequent purchaser. It found that the oral agreement and written agreement in favor of the subsequent purchaser were not genuine or bona fide, and the subsequent sale deed was not considered a true or valid transfer of title (!) (!) .
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The primary agreement of sale in favor of the vendee, along with the receipt of part of the sale consideration and the vendee's continued readiness to perform her contractual obligations, supported the vendee’s claim for specific performance of the sale of the entire property, i.e., 300 square yards. However, the vendee's claim for specific performance regarding the 100 square yards sold to the subsequent purchaser was barred due to non-joinder of the subsequent purchaser within the prescribed limitation period (!) (!) .
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The court held that the subsequent purchaser, who obtained a registered sale deed, is a necessary party in a suit for specific performance. Their absence from the proceedings, especially when the sale is not declared null and void, affects the rights of the vendee and the validity of the proceedings (!) (!) .
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The procedural lapse of not impleading the subsequent purchaser within the statutory limitation period rendered the claim for specific performance of the sale deed in respect of the 100 square yards inadmissible. Consequently, the court directed deposit of the balance consideration for the remaining property and dismissed the suit concerning the 100 square yards sold to the subsequent purchaser (!) (!) .
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The court also observed that the suit for cancellation of the sale deed in favor of the subsequent purchaser, without including the vendor as a party, was not sustainable. Such a suit is ineffective unless the vendor is made a party, as the vendor's rights and interests are directly affected by such proceedings (!) (!) .
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It was emphasized that the absence of the vendor as a necessary party in proceedings to declare a sale deed null and void or to set aside a sale on grounds like fraud violates principles of natural justice and procedural law. Proper parties must be involved to ensure a fair adjudication, especially when the sale is challenged on legal or factual grounds (!) (!) .
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The court reaffirmed that the title to the property passes from the vendor to the subsequent purchaser through a registered sale deed, which is not void but only voidable. To annul or set aside such a transfer, the subsequent purchaser must also be made a party to the proceedings. Otherwise, the transfer remains valid and binding (!) (!) .
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The court concluded that procedural irregularities, such as not joining necessary parties within the limitation period, significantly affect the maintainability of the suit and the enforceability of the claims. As a result, the appeals were dismissed, and the decrees of the lower court were upheld (!) (!) .
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Overall, the decision underscores the importance of proper party joinder, adherence to limitation periods, and the necessity of establishing bona fide transactions for the enforcement of specific performance claims and the validity of sale deeds (!) (!) .
Please let me know if you need a detailed analysis or further clarification on any specific aspect.
The common judgment of District Judge, Ranga Reddy District, dated 30-3-1994 in Original Suit Nos.20 of 1993, 91 of 1993 and 92 of 1993 led to these appeals.
2. The parties are referred to herein as the vendor, vendors husband, vendee and subsequent purchaser respectively.
3. The facts leading to the appeals are that the vendor purchased 300 square yards of land in survey No.262 of Hayathnagar Village and Taluk, Ranga Reddy District from D. Tanesha under a registered sale deed dated 19-8-1982, registered on 20-8-1982. The vendor entered into an agreement of sale with the vendee on 21-3-1984 agreeing to sell the said 300 square yards for Rs.75,000/-, receiving an earnest money of Rs.40,000/-. The vendor further received Rs.5,000/- from the vendee on 1-4-1984 under a receipt and the balance consideration as per the agreement of sale had to be paid within 45 days from 21-3-1984.
4. The vendee claimed that she approached the vendor and her husband on 30-4-1984 requesting to receive the balance sale consideration and register the document and on the request of the vendor and her husband, the vendee obtained a bank draft for Rs.30,000/- on 4-5-1984. When the vendor and her husband were postponing the matter, the vendee issued legal notices on 29-5-1984 and 12-6-1984. The vendor and her husband gave a reply stating that they entered into an oral agreement of sale for 1 00 square yards out of 300 square yards with the subsequent purchaser on 30-8-1982 and that the vendees agreement was subject to clearance of the earlier transaction with the subsequent purchaser. The vendee gave a reply on 28-6-1984 and issued a telegraphic notice on 13-7-1984. As there was no response, the vendee filed O.S.No.20 of 1993 (O.S.No.222 of 1984) for specific performance against the vendor and her husband. The subsequent purchaser was impleaded as a party to the suit without seeking any relief against him in pursuance of the order in I.A.No.44 of 1989, dated 5-4-1989. The vendor and her husband denied delivering possession of 300 square yards to the vendee under the agreement. They also clamed that the original document of title and other documents were stolen from their house on 21-6-1984, on which a police complaint was given. But the vendees reply notice dated 28-6-1984 mentioned the document to be with her.
5. The subsequent purchaser filed 0.S.No.91 of 1993 (O.S.No.190 of 1985 = 0.S.No.700 of 1991) against the vendee claiming that he purchased 100 square yards in survey No.262 under a registered sale deed dated 25-5-1984 from the vendor and was in possession and enjoyment since the date of purchase, with which the vendee tried to interfere. He filed the suit originally for a permanent injunction against the vendee and subsequently amended the same as per orders in I.A.No.1063 of 1986 dated 31-3-1987 claiming that under the guise of orders in I.A.No.401 of 1985 he was dispossessed by the vendee on 8-8-1986. Hence, he sought for declaration of his title to 100 square yards and possession evicting the vendee there from.
6. The vendee filed O.S. NO.92 of 1993 (O.S. No. 401 of 1985 = O.S. NO.702 of 1991) against the subsequent purchaser and vendors husband to declare the registered sale deed dated 29-5-1984 (25-5-1984) executed by the vendor in favour of the subsequent purchaser as null and void claiming that after she was put in possession of 300 square yards in pursuance of the agreement of sale by the vendor in her favour, she constructed one room after levelling the land and also laid fencing with stone pillars and barbed wire. After she filed the suit for specific performance, ex parte injunction orders were passed in her favour in I.A.No.764 of 1984 and I.A.No.765 of 1984, which were later made absolute. The vendors husband and the subsequent purchaser, who is the cousin brother of the vendor, colluded and brought into existence the forged document dated 29-5-1984 (25-5-1984) in respect of 100 square yards. The document was as though possession of
