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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. GOVINDARAJAN
K.R. Manickam
Versus
P. Kumaravel and others
A.S.No. 843 of 1994
Decided On : 10-08-1999
SPECIFIC PERFORMANCE - SALE AGREEMENT - BONA FIDE PURCHASER - NOTICE OF PRIOR AGREEMENT - BURDEN OF PROOF - ENFORCEABILITY OF AGREEMENT - ADMISSION OF EXECUTION - INTENTION OF PARTIES - EVIDENCE - CROSS-EXAMINATION.
Fact of the Case:
Plaintiff and 1st defendant entered into an agreement of sale for the suit property on 9.1979. Plaintiff paid an advance of Rs. 4,501 and was to settle and discharge the loan amount on behalf of the 1st defendant, payable to M/s. Sudarsan Chits (India) Ltd. The 1st defendant was to execute a sale deed after receiving the sale price within a month in favor of the plaintiff. Plaintiff discharged the loan amount and requested the 1st defendant to execute the sale deed, but the 1st defendant evaded. Plaintiff caused a notice to the 1st defendant on 29.1979 asking him to execute the sale deed. Plaintiff went to M/s Sudarsan Chits (India) Ltd. and obtained a receipt dated 211.1980 for the full and final settlement of the loan amount. Plaintiff paid a total sum of Rs. 27,051 towards the sale consideration. Plaintiff and one Rajangam approached the 1st defendant and intimated the same to him and requested him to execute the sale deed after receipt of balance sale consideration of Rs. 21.949. The 1st defendant agreed to receive the balance amount and promised to execute the sale deed in favor of the plaintiff after verifying the discharge of the loan transaction, but he evaded and dodged to receive the balance consideration and execute the sale deed. Plaintiff caused a legal notice to the 1st defendant. Plaintiff received a legal notice from the defendants on 9.2 1981 stating that the 2nd defendant had purchased the suit property on 1.1981 and was entitled to collect the monthly rent from January 1981, from the plaintiff. Plaintiff filed a suit for enforcing the agreement dated 9.1979.
Finding of the Court:
The trial court found that Ex.A1 agreement in favor of the plaintiff is not a true and valid document and that Ex.A1 is not enforceable as against the 2nd defendant as he is the bonafide purchaser for value, without the knowledge about Ex.A1. The trial court dismissed the suit with costs.
Issues: 1. Whether the 2nd defendant is the bona fide purchaser for value, without having any knowledge about Ex.A1? 2. Whether Ex.A1 is valid, genuine and enforceable against the 2nd defendant.
Ratio Decidendi: 1. The plea that the plaintiff was not ready and willing to perform his part of the contract is specifically available only to the vendor/1st defendant. Such a defense is not available to the subsequent purchaser. 2. The subsequent purchaser can retain the benefit of his transfer by purchase only after satisfying the two conditions concurrently: (1) he must have paid the full value for which he purchased the property and he must have paid it in good faith and without notice of the original contract; (2) the burden of proof is upon the subsequent purchaser to establish these conditions in order that his rights may prevail over the prior agreement of sale. 3. The 2nd defendant failed to make enquiries about the plaintiff or about his right, which must be treated as wilful abstinence or gross negligence, and he cannot be deemed to have purchased the property in good faith. 4. The execution of Ex.A1 is admitted by the 1st defendant and he did not appear before the court to offer himself to be cross-examined by the plaintiff. Therefore, the plaintiff's case that Ex.A1 is true and valid has to be accepted.
Final Decision: The appeal is allowed with costs. The judgment and decree of the trial court are set aside. The plaintiff is entitled to a decree for specific performance as prayed for.
1. The unsuccessful plaintiff, in getting a decree for specific performance of the agreement, has filed the above Appeal.
2. The first defendant is the owner of the suit property and he negotiated a sale agreement with the plaintiff and they entered into an agreement of sale on 9. 1979, with respect to the suit property. The plaintiff has been in possession as a lessee of the same. The sale consideration agreed between the parties was Rs. 49, 000 and the plaintiff paid an advance of Rs. 4, 501 to the first defendant on 9. 1979. As per the terms and conditions of the agreement the plaintiff has to settle and discharge the loan amount on behalf of the 1St. defendant, payable to M/s. Sudarsan Chits (India) Ltd. The 1St. defendant has to execute a sale deed after receiving the sale price within a month in favour of the plaintiff at his expenses. Though the plaintiff was ready and willing to perform his part of the obligation and requested the 1st defendant to accompany him to M/s. Sudarsan Chit Company for the purpose of settling and discharging the loan transaction mentioned in the sale agreement, the 1st defendant was evading with an ulterior motive. So, the plaintiff caused a notice to the 1st defendant on 29. 1979 asking him to execute the sale deed. The plaintiff himself went to M/s Sudarsan Chits (India) Ltd. and after due verification he was able to find out that the 1st defendant owed a sum of Rs. 25, 000. He offered a sum of Rs. 22, 500 in full and final settlement of the loan amount and it was accepted by the Manager of the said Company and he passed on a receipt dated 211. 1980. After the discharge of the loan amount, the Manager of the said Company returned all the original documents to the plaintiff, which the 1st defendant had offered to them as collateral security. The plaintiff, thus, has paid a total sum of Rs. 27, 051 towards the sale consideration. According to the plaintiff, immediately after discharge of the said loan transaction, the plaintiff along with one Rajangam approached the 1st defendant and intimated the same to him and requested him to execute the sale deed after receipt of balance sale consideration of Rs. 21.949. Though the 1st defendant agreed to receive the balance amount and promised to execute the sale deed in favour of the plaintiff after verifying the discharge of the loan transaction, he was evading and dodging to receive the balance consideration and execute the sale deed. Thereafter also the plaintiff caused a legal notice to the 1st defendant. To his surprise the plaintiff received a legal notice from the defendants on 9.2 1981 stating that the 2nd defendant had purchased the suit property on 1. 1981 and so the is entitled to collect the monthly rent from January 1981, from the plaintiff. The plaintiff has specifically stated that the 2nd defendant, with full knowledge about the sale transaction entered into between the plaintiff and 1st defendant, had obtained the sale deed fraudulently. So the plaintiff has filed the above suit for enforcing the agreement dated 9. 1979.
3. The2nd defendant filed a written statement denying the genuineness of the agreement in favour of the plaintiff and also the passing of the consideration towards the said agreement. According to him, the plaintiff sent the notices long after the sale in favour of the 2nd defendant and after knowing about the sale in favour of the 2nd defendant. He has specifically stated that the 2nd defendant did not know about the agreement in favour of the plaintiff and the 2nd defendant is the bonafide purchaser for value. He denied the fact that the plaintiff is in possession and enjoyment of the suit property in pursuance of the agreement in favour of the plaintiff.
4. The1st defendant remained absent and was set ex parte.
5. The trial Court framed as many as five issues and found that Ex.A1 agreement in favour of the plaintiff is not a true and valid document and that Ex.A1 is not enforceable as against the 2nd
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