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1994 Supreme(P&H) 513
PUNJAB & HARYANA HIGH COURT
S.K.Jain, J.
Jugraj Singh
Versus
Labh Singh
Civil Regular Second Appeal No. 2069 of 1990,
Decided On : MAY 31, 1994
A subsequent vendee is not a bona fide purchaser without notice if he has knowledge of a prior agreement to sell.
Headnote:
SPECIFIC PERFORMANCE OF CONTRACT - SECTION 16(C) OF THE SPECIFIC RELIEF ACT, 1963 - SUMMARY OF THE ACT AND SECTION REFERENCED AND DISCUSSED BY THE COURT - KEY LEGAL PROVISIONS, THEIR INTERPRETATIONS, AND HOW THEY INFLUENCED THE COURT'S DECISION - CAPTURE THE ESSENCE OF THE LEGAL FRAMEWORK APPLIED BY THE COURT IN REACHING ITS DECISION.
Fact of the Case:
The vendor entered into an agreement to sell land to the plaintiffs but later sold part of the land to the subsequent vendees. The plaintiffs filed a suit for specific performance of the contract of sale, which was decreed by the trial court and upheld by the first appellate court.
Finding of the Court:
The court found that the subsequent vendees were not bona fide purchasers without notice of the prior agreement to sell and that the plaintiffs were ready and willing to perform their part of the contract.
Issues: 1. Whether the subsequent vendees were bona fide purchasers without notice of the prior agreement to sell. 2. Whether the plaintiffs were ready and willing to perform their part of the contract.
Ratio Decidendi: The court held that the subsequent vendees were not bona fide purchasers without notice of the prior agreement to sell because the village was small and everyone was expected to know about the execution of agreements or sale deeds between the residents of the village. The court also held that the plaintiffs were ready and willing to perform their part of the contract because they had gone to the office of the Joint Sub Registrar with the consideration amount in cash and had moved an application in this regard.
Final Decision: The court dismissed the appeal and upheld the judgment and decree of the first appellate court.
S.K.Jain, J.
1. The facts :-
Defendant No. 1 - respondent No. 3 (hereinafter referred to as the vendor) entered into, an agreement to sell dated 30.8.1984 with respondent Nos. 1 and 3 (hereinafter referred to a the plaintiffs) agreeing to sell 10 Kanals 11 Marlas of land bearing Rect No. 51 Killa No. 3(3-16), 8(6-15) at the rate of Rs. 40,000/- per killa. The vendor did not execute the sale deed as per the terms of the agreement. On the contrary, in violation of the terms of agreement he sold 3 kanal-16 Maria of land to Jugraj Singh and Buta Singh appellants, vide registered sale deed dated 4.2.1985. the plaintiffs filed Civil Suit No. 168-1 of 16.2.1985 for a decree of possession by way of specific performance of contract of sale dated 30.8.1984. The vendor and the subsequent vendees contested the suit.
2. The trial Court, after examining the evidence led by the parties found that defendant No.1-vendor had committed the breach of the terms of the agreement and that the plaintiff-vendees were entitled to a decree of specific performance of contract of sale dated 30.8.1984; that village Retherian was a small village and everyone was expected to know about the execution of agreements or sale deeds between the residents of the village; that subsequent vendees also had the knowledge of the agreement dated 30.8.1984 and hence they were not bonafide purchasers for consideration without notice of the prior agreement in question in favour of the plaintiffs.
3. Resultantly, the learned trial Court decreed the suit of the plaintiff on 23.2.1987.
4. The subsequent vendees challenged the said judgment and decree vide civil Appeal No. 9 of the 1987 which was dismissed by District Judge, Faridkot on 14.9.1990.
5. It is that judgment and decree of the learned first Appellate Court dated 14.9.1990 which has been challenged by the subsequent vendees Jugraj Singh and Buta Singh in this Regular Second Appeal and which requires my examination of its sustainability.
6. I have seen the pleadings of the parties in the suit, the evidence adduced by the parties in the suit and have also examined judgments of both the Courts below.
7. Learned counsel for the appellants has made following submissions:-
1. that the plaintiffs were not ready and willing to perform their part of the contract as they did not possess Rs. 50,000/- for payment to the vendor as balance sale consideration; and
2. that the appellants were bonafide purchasers for consideration without notice of the prior agreement to sell.
8. First argument first. Precise submission of the learned counsel for the appellants is that the plaintiffs have not been able to show that they were in possession of Rs. 50,000/- to be paid to the defendant No. l at the time of the execution of the sale deed. Statement of Behari Lal, Commission Agent, who has proved on record copy of the Khata Ex.DW3/l, has been pressed into service and it has been submitted that this document would show that the plaintiffs had never withdrawn from the said firm of Commission Agents any substantial amount for being paid to the vendor-defendant No. l at the relevant time and, therefore, the Courts below should have held that the plaintiffs did not have Rs. 50,000/- on 23.1.1985 for payment to the defendant No. 1 and, therefore, they were not ready and willing to perform their part of the contract. In reply, learned counsel for the respondents has submitted that it has come in evidence that the plaintiffs had gone to the office of the Joint Sub Registrar with the consideration amount of Rs. 50,000/- in cash and had moved an application in this regard. On 6.2.1985 the plaintiffs had again approached the vendor-respondent with Rs. 50,000/- at his house but prior thereto he had already sold 3 Kanal-16 Marlas of land to subsequent vendees out of the land agreed to be sold to them. Moreover, the plea that the plaintiffs were not ready and willing to perform their part of the contract is not available to the subsequent vendees
