Ramjibhai Vishram Patel & another vs Arjun Karsan Patel & another

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1999 Supreme(Bom) 257

IN THE HIGH COURT OF BOMBAY
R.M. Lodha, J.
Ramjibhai Vishram Patel another .... Appellants.
Versus
Arjun Karsan Patel another.... Respondents.
First Appeal No. 934 of 1981, decided on 1-4-1999.
Advocates appeared :
R.S. Apte with B.G. Prabhu, for appellants.
R. D’Souza i/b. Manilal Kher Ambalal Co., for respondent No. 1.

Headnote:Agreement to Sell and Loan - Relevant consideration for deciding question-Suit for specific performance of agreement of sale of plot - Fact that time stated in agreement was extended from time to time indicates that agreement in question was agreement of sale and not agreement of security for money.- The original Defendant No.1 agreed on 7.9.1967 to sell a piece of land admeasuring 3300 sq.ft. from Plot No. 121 to the original plaintiff for a consideration of Rs. 10,000/-. An amount of Rs. 5,500/- which the original Defendant No. 1 owed to original plaintiff was treated as earnest money and the remaining amount of Rs. 4,500/ - was payable at the time of registration of sale deed. The sale deed was to be registered within six years i.e. before 31.8.1973. The said agreement was for the first time extended on 18.8.1973 by the original Defendant No.1 till 15.11.1973. Thereafter time was extended from time to time upto 15.1.1975. The fact that the time stated in the agreement was extended from time to time clearly indicated that the agreement in question was an agreement of sale and not an agreement of security for money as was sought to be alleged by the original defendant No. 1. Even did not dare to enter the witness box and therefore, the defence set forth by him in the written statement that the said agreement was not an agreement of sale, but an agreement of security was not at all proved. The trial Court therefore was not in error in holding that the agreement dated 7.9.1967 was an agreement of sale and not an agreement for security.
       Section 10 and Transfer of Property Act (4 of 1882), Section 3 - Suit for specific performance of agreement of sale of plot-Purchase of entire plot by defendant No.2 from original Defendant No. 1 despite agreement of sale executed by original Defendant No.1 in favour of plaintiff for piece of land of 3300 sq. ft.-Purchase held not bona fide and in good faith.-It is expected of a purchaser of an immovable property to make reasonable enquiries about the title of the vendors and whether the property suffered from any encumbrances or not. A reasonable and prudent purchaser in good faith would never purchase the property without making full enquiries particularly in the case like the present one, when the purchaser has been informed that there was an agreement of sale between the vendor and the original plaintiff though according to the vendor the said agreement was only nominal. In that event the least expected of the original Defendant No.2 was to find out the real nature of transaction with the plaintiff by original Defendant No. 1 before purchasing the property. The trial Court had considered this aspect and appreciated the evidence in right perspective.
       Transfer of Property Act. 1882
       Section 3.-See Specific Relief Act, Section 10.

JUDGMENT - R.M. LODHA, J.:---This first appeal is directed against judgment and decree passed by the 2nd Joint Civil Judge, Senior Division, Pune, on 28-8-1981 whereby the trial Court decreed the plaintiff's suit for specific performance of the agreement of sale 7-9-1967 and passed a consequential order including delivery of vacant possession of portion of plot admeasuring 1000 sq.ft. to the plaintiff.

2. Arjun Karsan Patel, respondent No. 1 herein is the original plaintiff in the suit filed before the Civil Judge, Senior Division, Pune. The suit was filed against Madhav Gangadhar Bapat, respondent No. 2 herein (original defendant No. 1), Ramjibhai Vishram Patel, appellant No. 1 herein (original defendant no. 2) and M/s. Geet Udhyog, appellant No. 2 herein (original defendant No. 3). The original plaintiff prayed for decree for specific performance of agreement of sale dated 7-9-1967 executed by original defendant No. 1 in respect of 3300 sq.ft. of the land from the plot No. 121 details of which were given in paragraph 1 of the plaint. The original plaintiff prayed that out of 3300 sq.ft. of land agreed to be sold by original defendant No. 1 to original plaintiff, the land admeasuring 2300 sq.ft. is in actual use and occupation of the original plaintiff and in addition to that land to be included in sale deed, the land admeasuring 1000 sq.ft. should also be included. The original defendant No. 1 as per the agreement dated 7-9-1967 agreed to sell 3300 sq.ft. of the land from plot No. 121 details of which have been given in paragraph 1 of the plaint and is also given in paragraph 1 of the agreement of sale for a consideration of Rs. 10,000/-. A sum of Rs. 5500/- which was due from the original defendant and payable to original plaintiff was adjusted as earnest money and the remaining amount of Rs. 4500/- was payable in presence of the sub-Registrar at the time of execution of the sale deed which was to be executed by the original defendants within six years i.e. before 31-8-1973. The agreement for sale further provided that original plaintiff who was already in use and occupation of portion of land admeasuring 2300 sq.ft. for storing his goods upon execution of sale deed would retain the said possession as portion of the land sold to him. The remaining 1000 sq.ft. adjacent to the portion of 2300 sq.ft. which was in occupation of Sanghavi Jethmal Kasturchand as tenant was to be given to the original plaintiff on execution of sale deed since the said tenant Sanghavi Jethmal Kasturchand had right to retain possession upto 1973 only. It was further provided in the agreement that the original defendant shall execute sale deed in favour of the original plaintiff within the period prescribed and get the sale deed registered and if he fails to do it, he might get the sale deed executed through courts and if original plaintiff refused the sale deed executed, the agreement shall stand cancelled. The period of the said agreement of sale which was to expire at the end of August 1973 was extended from time to time by original defendant No. 1 on 18-8-1973, 5-11-1973, 16-4-1974 and thereafter upto 15-1-1975. The original plaintiff averred in the plaint that he has paid the remaining amount of Rs. 4,500/- to the original defendant No. 1 when he got the period of agreement of sale extended. The original plaintiff further averred in the plaint that he had complied with all the terms which were required to be complied with by him. It is further averred in the plaint that the original defendant No. 1 colluded with defendant No. 2 and despite the agreement of sale executed by defendant No. 1 in favour of the plaintiff, had sold the property to original defendant No. 2. The original defendant No. 2 thus had not acquired any right and title. The original plaintiff further averred in the plaint that the portion which was in possession of original defendant No. 1 excluding the portion in possession of original plaintiff has been handed over to original

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