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High Court Of Calcutta
KUMAR JYOTI SEN GUPTA, M. N. ROY
HIRALAL AGARWALA - Appellant
Versus
BHAGIRATHI GORE - Respondent
AFAD 929 Of 1969
Decided On : 06/17/1975
TRANSFER OF PROPERTY ACT - SECTION 54 - SECTION 91 OF THE INDIAN TRUSTS ACT - SECTION 53-A OF TRANSFER OF PROPERTY ACT - BONA FIDE PURCHASER - NOTICE OF PRIOR CONTRACT - CONSTRUCTIVE NOTICE - POSSESSION AS NOTICE - COLLUSIVE AGREEMENT - MESNE PROFITS - LIMITATION - RATE OF MESNE PROFITS - COSTS. - [PLAINTIFF PURCHASED PROPERTY FROM DEFENDANT NO. 1 - DEFENDANT NO. 2 CLAIMED TITLE BASED ON PRIOR AGREEMENT WITH DEFENDANT NO. 1 - SUIT FOR EVICTION AND MESNE PROFITS - TRIAL COURT DECREED SUIT - LOWER APPELLATE COURT REVERSED - PLAINTIFF APPEALED] - [HELD, ALLOWING APPEAL IN PART: (1) AGREEMENT FOR SALE DOES NOT CREATE ANY INTEREST IN PROPERTY - (2) DECREE FOR SPECIFIC PERFORMANCE DOES NOT CREATE ANY INTEREST IN PROPERTY - (3) PLAINTIFF WAS NOT PARTY TO SUIT FOR SPECIFIC PERFORMANCE - DECREE NOT BINDING ON HIM - (4) DEFENDANT NO. 2 CANNOT RESIST PLAINTIFF'S CLAIM - (5) PLAINTIFF NOT PURCHASER WITH NOTICE OF PRIOR CONTRACT - (6) REGISTRATION OF AGREEMENT NOT SUFFICIENT NOTICE - (7) POSSESSION OF DEFENDANT NO. 2 NOT SUFFICIENT TO RAISE PRESUMPTION OF CONSTRUCTIVE NOTICE - (8) PLAINTIFF WAS BONA FIDE PURCHASER - (9) AGREEMENT BETWEEN DEFENDANTS COLLUSIVE - (10) MESNE PROFITS LIMITED TO THREE YEARS PRIOR TO SUIT - (11) RATE OF MESNE PROFITS REDUCED TO RS. 40.50 PER MONTH - (12) NO COSTS IN SECOND APPEAL - PROPORTIONATE COSTS IN LOWER COURTS TO PLAINTIFF.]
Fact of the Case:
Plaintiff purchased property from Defendant No. 1. Defendant No. 2 claimed title based on a prior agreement with Defendant No. 1. Plaintiff filed a suit for eviction and mesne profits. The trial court decreed the suit. The lower appellate court reversed the decision of the trial court. Plaintiff appealed to the High Court.
Finding of the Court:
1. An agreement for sale does not create any interest in the property. 2. A decree for specific performance does not create any interest in the property. 3. Plaintiff was not a party to the suit for specific performance. Therefore, the decree is not binding on him. 4. Defendant No. 2 cannot resist the plaintiff's claim. 5. Plaintiff was not a purchaser with notice of the prior contract. 6. Registration of the agreement is not sufficient notice. 7. Possession of Defendant No. 2 is not sufficient to raise a presumption of constructive notice. 8. Plaintiff was a bona fide purchaser. 9. The agreement between the defendants was collusive. 10. Mesne profits are limited to three years prior to the suit. 11. The rate of mesne profits is reduced to Rs. 40.50 per month. 12. No costs in the second appeal. Proportionate costs in the lower courts to the plaintiff.
Issues: 1. Whether the plaintiff was a bona fide purchaser for value without notice? 2. Whether the defendant No. 2 had an equitable right to avoid the plaintiff's sale deed? 3. Whether the plaintiff was entitled to khas possession of the suit premises? 4. Whether the plaintiff was entitled to mesne profits? If so, at what rate?
Ratio Decidendi: 1. A contract for sale of immovable property does not create any interest in or charge on such property. 2. A decree for specific performance passed on the basis of a contract for sale of immovable property does not create any interest in the property in favor of the decree-holder. 3. Where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract. 4. A purchaser with notice of a prior contract cannot be said to be a bona fide purchaser. 5. Registration of an agreement for sale is not sufficient notice to a subsequent purchaser. 6. Possession of a property by a person other than the owner is not sufficient to raise a presumption of constructive notice to a subsequent purchaser. 7. A purchaser who has purchased a property at a price lower than the market value may still be a bona fide purchaser if there is no evidence of collusion or fraud. 8. A collusive agreement between the vendor and the purchaser to defeat the rights of a third party is void. 9. Mesne profits can be claimed for a period of three years prior to the institution of the suit. 10. The rate of mesne profits should be reasonable and should be based on the rental value of the property.
Final Decision: Appeal partly allowed. Decree for khas possession and mesne profits modified. No costs in the second appeal. Proportionate costs in the lower courts to the plaintiff.
( 1 ) THIS appeal is at the instance of the plaintiff who has challenged the judgment and decree passed by Sri P. Chatterjee, Addl. District Judge, 5th Court at Alipore in Title Appeal No. 1411 of 1967 reversing the decision of Shri L. K. Pal, Subordinate Judge. 9th Court at Alipore in Title Suit No. 78 of 1965.
( 2 ) THE plaintiff brought the suit in the Subordinate Judge's Court on the allegation that he purchased the suit property from defendant No. 1 by a registered kobala dated 18-11-55; on the some day defendant No. 1 executed a registered kabuliyat in favour of him and the defendant No. 1 became a tenant under the plaintiff at a monthly rental of Rs. 40-8-0 in respect of the suit premises.
( 3 ) THE plaintiff filed Title Suit No. 357 of 1956 in the 2nd Court of Munsif at Baraset for ejectment of defendant No 1 from the suit premises and for mesne profits. Defendant No. 1 contested the said suit and for the first time disclosed that he executed a registered deed of agreement on February 24, 1953 in favour of defendant No. 2 wherein it was stated that defendant No. 2 agreed to purchase the suit property at a sum of Rs. 4001 out of which the earnest money already paid was Rs. 3001. On coming to know about the said fact the plaintiff impleaded defendant No. 2 as a party in that suit. The said defendant No. 2 asserted that on the strength of the deed of agreement dated 24-2-53 he filed Title Suit No. 13 of 1956 in the 9th Court of Subordinate Judge at Alipore for specific performance of contract against defendant No. 1. That suit was decreed on 10th April, 1956. Defendant No. 2 got possession in the suit premises on 16th December, 1956 in Title Execution Case No 8 of 1956.
( 4 ) THE plaintiff got the decree for mesne profits against defendant No. 1 in Title Suit No. 357 of 1956 but his prayer for khas possession of the premises in suit was refused. In the second appeal against the judgment and decree passed in Title Suit No. 357 of 1956 all questions involved as between the plaintiff and defendant No, 2 in respect of the suit properties were left open.
( 5 ) THE plaintiff next filed Title Suit no. 78 of 1965 for evicting the defendants from the suit premises and for get-tins khas possession as well as mesne profits from them. Defendant No. 2 Bhagirathi Gore contested the claim of the plaintiff in this suit. According to him, the plaintiff was the purchaser of the suit property with notice of his agreement with defendant No. 1 for the purchase of the suit premises at a sum of Rs. 4001 dated 24th April, 1953; the plaintiff thus could not be said to be a bona fide purchaser for value without notice; he further contended that the sale in favour of the plaintiff by defendant No 1 was a collusive one which was created only to defeat and delay his claim in respect of the property in question. Other contentions which were raised in the said suit are not relevant for the purpose of consideration in this appeal. The contentions of defendant No. 2 were not accepted by the trial court who decreed the suit in favour of the plaintiff. Against the said decision defendant No. 2 preferred Title Appeal No. 1411 of 1967. The court of appeal below allowed the said appeal and dismissed the suit. Against the said judgment and decree this second appeal has been preferred by the plaintiff.
( 6 ) IT will be convenient to refer to the parties in their original characters of plaintiff and defendants, bearing in mind that the plaintiff is now the appellant and the defendants Nos. 1 and 2 are now respondents Nos. 2 and 1 respectively.
( 7 ) MR. Bhabesh Chandra Mitra, learned Advocate for the plaintiff-appellant has challenged: the said finding of the court of appeal below on the ground that on the materials on record the said finding was not justified and also 'bad' in law, Mr. Mitra went so far as to argue that even if all the averments of defendant No. 2 as made in his written statement be accepted still then as the plaintiff was
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