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2008 Supreme(Mad) 3918

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. KANNAN
K.R. Venugopal
Versus
K.R. Srinivasan & Others
Appeal Suit No.907 of 1989
Decided On : 30-10-2008

Advocates Appeared:
For the Petitioner:R. Subramanian, Senior Counsel, S. Hemalatha, Advocate.
For the Respondents:R1 & R2, B. Ullasa Velan, R5, Anand Jain, Advocate.

The judgment underscores the importance of proving readiness and willingness in specific performance cases and highlights the legal parameters for assessing the bona fides of subsequent purchasers.

Headnote:

specific performance - property dispute - Specific Relief Act - Section 16, Section 19 - AIR 1968 Madras 383, AIR 2001 SC 1658

Fact of the Case:

Plaintiff filed a suit for specific performance based on an agreement of sale with the 1st defendant. The 5th defendant, a subsequent purchaser, was alleged to have knowledge of the plaintiff's agreement. The trial court found that the plaintiff had not proved the sale agreement and was not ready and willing to purchase the property within the stipulated time, leading to the dismissal of the case.

Finding of the Court:

The court found that the plaintiff failed to prove the sale agreement and readiness to purchase the property within the stipulated time. The subsequent purchaser was deemed a bona fide purchaser for value without notice of the agreement in favor of the plaintiff, leading to the dismissal of the case.

Issues: The key issues revolved around the validity of the plaintiff's sale agreement, his readiness and willingness to purchase the property, and the bona fides of the subsequent purchaser.

Ratio Decidendi: The court emphasized the peremptory nature of Section 16(c) of the Specific Relief Act, which mandates strict scrutiny of the plaintiff's readiness and willingness to perform the contract. The court also relied on legal precedents to assess the bona fides of the subsequent purchaser.

Final Decision: The trial court's decision was confirmed, and the appeal suit was dismissed.

Judgment :-

I. Facts in brief - Basis of plaintiffs claim:

Plaintiff in the suit for specific performance is the appellant. The owner of the property, who is the brother of the plaintiff, is arrayed as the 1st defendant. Defendants 2 to 4 are the sons of the 1st defendant. The 5th defendant is the subsequent purchaser. The suit is filed on an agreement of sale alleged to have been executed by the 1st defendant in favour of the plaintiff under Ex.A-1 dated 19.03.1983. The terms of the agreement spell out that the consideration had been fixed as Rs.47,000/-and on the date of the agreement, an advance of Rs.5,100/-was paid and the balance of sale consideration was to be paid within a period of two months. According to the plaintiff, after the execution of the agreement, he learnt that there had been a mortgage, which was still outstanding with Shantha Devi and he paid Rs.20,000/-on 12.05.1983 and obtained a receipt under Ex.A-2. Yet another encumbrance was to a person, by name, Mythili and a portion of the debt was discharged by him by payment of Rs.9,790/-. Corporation tax had not been paid and arrears to the tune of Rs.4,947.19 was paid by the plaintiff to the account of the 1st defendant. Electricity charges to the tune of Rs.1,667/- has also not been paid by the 1st defendant and the plaintiff had paid the said sum also. According to him, in all, he had paid Rs.41904.19 and the balance of Rs.5,095.81 was the only amount that remained payable and he was always ready and willing to pay the said amount. According to the plaintiff, without executing the sale deed, the 1st defendant had executed a sale in favour of the 5th defendant and the 5th defendant is not a bona fide purchaser and she had known all along that the plaintiff had an agreement in his favour. The contention, therefore, of the plaintiff was that the 5th defendant was bound to join with the 1st defendant in execution of the sale deed.

II. The pleas in defence:

2. The 1st defendant, who wasthe original owner of the property, had remained ex parte. Defendants 2 to 4 filed a written statement and participated in the trial and their case has been that the property being ancestral, it had been purported to be sold without valid necessity and hence, not binding on them. The 5th defendant has filed a statement and she is the principal contesting defendant. She has given the details of her purchase and contends that she is a bona fide purchaser for value without notice of the alleged agreement. The plaintiff has examined himself as P.W.1 and the 5th defendants husband was examined as D.W.1.

III. Disposition at the trial court:

3. On the basis of the evidence adduced, both oral and documentary, the trial court found that the plaintiffs sale agreement had not been proved and that the plaintiff had not been ready and willing to purchase the property within the time stipulated and further that the document itself has been brought up only in collusion between the plaintiff and the defendants 1 to 4 in order to create trouble to the 5th defendant, who had purchased the property. The court found that the 5th defendants purchase was true and in that any event, she was a bona fide purchaser for value without notice of agreement in favour of the plaintiff. On such finding, the case came to be dismissed.

IV. Principal grounds of challenge in appeal:

4. The appellant contended that the court below has erred in dismissing the suit and finding that the purchase by the 5th defendant was valid. He had at least four reasons to give for stating that the reasoning of the court below was not correct. According to him,

(i) the title deed had not been taken from the 1st defendant although the 5th defendant had purported to have purchased the property;

(ii) no enquiry with reference to the encumbrances had been made prior to the purchase of the property for the want of bona fide;

(iii) admittedly, the vendor was not in possession of whole of the property and the purchaser had not made any enquir
























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