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1995 Supreme(P&H) 1087

PUNJAB & HARYANA HIGH COURT
N.K.Kapoor, J.
Chanan Singh
Versus
Salwant Kaur
Regular Second Appeal No. 2111 of 1985,
Decided On : SEPTEMBER 21, 1995

A person claiming to be a bona fide purchaser for value without notice must prove that they made all reasonable enquiries to ascertain the powers of the transferor to make the transfer and that they acted in good faith.

Headnote:

TRANSFER OF PROPERTY ACT, 1882 - SECTION 41 - BONA FIDE PURCHASER - ESSENTIALS - BURDEN OF PROOF - NOTICE OF DEFECT IN TITLE - DUTY OF ENQUIRY - REVERSIONARY RIGHT - EFFECT ON BONA FIDE PURCHASER.

Fact of the Case:

Plaintiff filed a suit for possession of land, claiming a share based on a declaratory decree obtained in 1958. The defendants, who purchased the land from the plaintiff's sister, claimed to be bona fide purchasers for value without notice. The trial court decreed the suit, but the appellate court modified the decree, holding that the defendants were bona fide purchasers of the land not covered by a specific sale deed.

Finding of the Court:

The High Court held that the defendants failed to prove that they were bona fide purchasers for value without notice. The court noted that the plaintiff had a reversionary right to the land, which was upheld by the declaratory decree, and that the defendants had not made reasonable enquiries to ascertain the powers of the transferor to make the transfer.

Issues: 1. Whether the defendants are bona fide purchasers for value without notice? 2. Whether the plaintiff's reversionary right affects the rights of the defendants as bona fide purchasers?

Ratio Decidendi: The court held that a person claiming to be a bona fide purchaser for value without notice must prove that they made all reasonable enquiries to ascertain the powers of the transferor to make the transfer and that they acted in good faith. In this case, the defendants failed to prove that they made any such enquiries or cared to ascertain the power of the vendor to dispose of the property and to what effect.

Final Decision: The High Court allowed the appeal, set aside the judgment and decree of the lower appellate court, and restored the judgment and decree of the trial court decreeing the suit of the plaintiff as prayed for.

Judgment

N.K.Kapoor, J.

1. This is plaintiffs regular second appeal against the judgment and decree of the Additional District Judge whereby the judgment and decree of the trial Court was modified to the extent that plaintiff will be entitled to the possession of the land which is not covered under the sale Exhibit D-3 to D-4.

2. Chanan Singh (since dead) filed a suit for possession of 183/556 the share of land as detailed in the heading of the plaint. As per case of the plaintiff, Sh. Nihal Singh, his grand-father, had two sons, namely, Maya Singh and Assa Singh. Maya Singh had three sons, namely, Chanan Singh, Buta Singh and Jawala Singh alias Santa Singh. Jawala Singh died on 13.6.1977. Salwant Kaur Respondent, is the daughter of Buta Singh, the other brother of the plaintiff. Jawala Singh alias Santa Singh executed a gift deed in respect of land measuring 50 Kanals 7 Marias in favour of Salwant Kaur on 15.4.1957. This gift deed was challenged by the plaintiff on the ground that it was in respect of the ancestral property and Jawala Singh alias Santa Singh was not competent to execute the gift deed. The suit was decree vide judgment and decree dated 21.8.1958 and it was held that the gift deed in favour of Salwant Kaur shall not affect the reversionary rights of the plaintiff in one half share of 37 Kanals 16 Marias. It has further been alleged that Salwant Kaur exchanged certain land with other persons and so the plaintiff has filed the suit in respect of the land which fell to the share of Salwant Kaur in exchange. It has further been alleged that Salwant Kaur has made further alienation in favour of defendants No.2 to 12.

3. Defendants filed written statement resisting the claim of the plaintiff on the ground that they are bona fide purchasers without notice.

4. On the pleadings of the parties, following issues were framed :-

1) Whether the plaintiffs are entitled to 183/556th share on the basis of declaratory decree dated 21.8.1958 as alleged ? OPP.

2) If issue No.l is proved, whether defendants No. 2 to 12 are the bona fide purchasers for value and without notice ? OPD 2 to 12.

3) Whether Jawala Singh deceased had executed a valid will in favour of defendant 14? If so, its effect ? OPD No. 1.

4) Whether the suit in the present form is not maintainable ? OPD.

5) Whether the suit is within limitation ? OPP.

6) Whether the suit is vague and cannot proceed as alleged ? OPD-2 to 12.

7) Whether the present suit is barred under the principles of resjudication ? OPD 2 to 12.

8) Whether the plaintiffs are barred from filing the present suit by their own act and conduct ? OPD-2 to 12.

9) Relief.

5. Issue No. 1 was decided in favour of the plaintiff holding that he is entitled to 183/556th share on the basis of declaratory decree dated 21.8.1958. Under issue No. 2, the Court came to the conclusion that the defendants have failed to prove that they did not have notice of right of the plaintiff and so this issue was decided against the defendants No. 2 to 12. Under issue No. 3, it was held that defendant :No. 14 failed to prove that Santa Singh deceased executed a valid will in his favour, Issue No. 4 was also decided in favour of the plaintiff. Under issue No. 5, it was held that the suit is within limitation. Under issues No. 6, 7 and 8 it was held that the defendant have failed to prove these issues. Resultantly, the suit of the plaintiff was decreed.

6. Before the appellate Court, it was argued that the trial Court erred in law in holding that defendants are, not bona fide purchasers for value without notice. In fact, the defendants made bona fide enquiry in this regard and it is thereafter that a suit land was purchased by them in good faith and for consideration. The lower appellate Court found substance in this plea of the appellant-defendants and so accepted the appeal qua the shares purchased by them vide sale deed Exhibit D-3 and D-4.

7. It is this finding of the Court below which is being challanged by the learned counsel






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