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PUNJAB & HARYANA HIGH COURT
Jawahar Lal Gupta and R.L.Anand JJ.
Sardari Lal
Versus
Kartar Singh
Letter Patent Appeal No. 397 of 1987,
Decided On : DECEMBER 5, 1997
SPECIFIC PERFORMANCE - MORTGAGE AGREEMENT - EXECUTION AND CONSIDERATION - SUFFICIENCY OF EVIDENCE - PRESUMPTION UNDER SECTION 114 OF THE INDIAN EVIDENCE ACT - NON-APPEARANCE OF PARTY IN WITNESS BOX - INTERPRETATION OF AGREEMENTS - SOURCE OF MONEY - REASONABLE INFERENCE - RELIEF UNDER ORDER 7 RULE 7, CODE OF CIVIL PROCEDURE - MONEY DECREE WITH INTEREST.
Fact of the Case:
Plaintiff Sardari Lal filed a suit for specific performance of an agreement to mortgage agricultural land or, in the alternative, a money decree for Rs. 25,000/-. The defendants, Kartar Singh and Hazura Singh, executed an agreement in 1968 agreeing to mortgage the land for Rs. 16,000/-, of which Rs. 14,700/- was paid. In 1971, a new agreement was executed for Rs. 25,000/-, with an additional Rs. 10,000/- paid to the defendants. The defendants refused to execute the mortgage deed, and the plaintiff served registered notices upon them. The defendants suffered collusive decrees in favor of their wives and other transferees to defeat the plaintiff's claim.
Finding of the Court:
The trial court granted a decree for specific performance, but the High Court reversed the decision and dismissed the suit. The plaintiff appealed to the Supreme Court.
Issues: 1. Whether the defendants executed the agreements and received the consideration for the mortgage. 2. Whether the plaintiff was ready and willing to perform his part of the agreements. 3. Whether the decrees obtained by the defendants' wives and other transferees were collusive. 4. Whether the suit was barred by limitation. 5. Whether the plaintiff had locus standi to sue.
Ratio Decidendi: 1. The Supreme Court held that the plaintiff had sufficiently proved the due execution of the agreements and the passing of the consideration. The court relied on the testimony of independent witnesses, the endorsements on the agreements, and the presumption under Section 114 of the Indian Evidence Act arising from the defendants' non-appearance in the witness box. 2. The court rejected the defendants' argument that the plaintiff had not proved the source of the money used to pay for the agreements, finding that the plaintiff was a man of considerable means and that it was not difficult for him to raise the necessary funds. 3. The court also rejected the argument that the plaintiff should have taken steps to enforce the first agreement in 1968, finding that the execution of the second agreement in 1971 showed that the plaintiff was trying to secure his interest and that the defendants were not ready and willing to perform their part of the contract. 4. The court held that the decrees obtained by the defendants' wives and other transferees were collusive and intended to defeat the plaintiff's claim.
Final Decision: The Supreme Court reversed the High Court's decision and restored the trial court's decree for specific performance. However, the court modified the decree to grant a money decree for Rs. 24,700/- with interest at 6% per annum from the date of the suit until realization, instead of a decree for specific performance, considering the lapse of time since the agreements were executed.
R.L.Anand, J.
1. Unsuccessful plaintiff Sh. Sardari Lal has filed the present L.P.A. No. 397 of 1987, which has been directed against the judgment and decree dated May 20, 1987, passed by the learned Single Judge in R.F.A. No. 145 of 1978 vide which the learned Single Judge reversed the judgment and decree dated September 30, 1976 passed by the Court of Sub Judge, Ist Class, Rajpura, who granted a decree for specific performance of agreement of mortgage suit property in terms of agreement Exhibit PA against the defendants, who were ordered to execute a registered deed of mortgage with possession of the suit property in favour of the plaintiff on receipt of balance amount of Rs. 300/- on or before November 30, 1976. It was further directed by the trial Court that in case the defendants failed to comply with the aforesaid directions, it will be open for the plaintiff to deposit the balance amount of Rs. 300/- in the Court for payment to defendants No. 1 and 2 and after doing so the plaintiff could approach the court for getting the usufructuory mortgage deed in terms of Exhibit PA dated August 8, 1971, executed on and behalf of defendants No. 1 and 2 and the remaining defendants would join them in the execution of the mortgage deed.
2. The pleadings of the parties can be summarised in the following manner:-
3. Shri Sardari Lal appellant filed a suit for specific performance of agreement to mortgage dated August 8, 1971 regarding the agricultural land measuring 35 Bighas 14 Biswas, fully described in the head note of the plaint, as per Jamabandi for the year 1967-68 situated in village Ram Nagar, Tehsi Rajpura, and in the alternative for the grant of a money decree in the sum of Rs. 25,000/- i.e. Rs. 24,700/- given as advance to defendants No. 1 and 2, i.e. Kartar Singh and Hazura Singh and Rs. 300/- by way of damages. It was alleged by the plaintiff that Sarvshri Kartar Singh and Hazura Singh, defendants No. 1 and 2 executed an agreement dated August 15, 1968 (Exhibit PB) in his favour agreeing to mortgage with possession the suit land against a consideration of Rs. 16,000/-. Out of this amount, a sum of Rs. 14,700/- was paid to them by virtue of the said agreement. Subsequently, on August 8, 1971, these two defendants agreed that they would mortgage the suit land with the plaintiff for a consideration of Rs. 25,000/-. A new agreement (Exhibit PA) was executed by defendants No. 1 and 2 in favour of the plaintiff and through this agreement an additional sum of Rs. 10,000/- was paid to the said defendants. In this manner defendants No. 1 and 2 received a sum of Rs. 24,700/-. It was further agreed upon between the plaintiff and defendants No. 1 and that the balance consideration of Rs. 300/- would be paid to defendants No. 1 and 2 at the time of the registration of the mortgage deed, which was agreed to be executed and registered on or before September 7, 1971. The plaintiff requested the said defendants to discharge their obligations under the agreement Exhibit PA dated August 8, 1971, but to no effect. The plaintiff even served registered notices upon defendants No. 1 and 2 calling upon them to execute and register the mortgage deed but the defendants refused to accept the notices.
4. It is further alleged by the plaintiff that in order to defeat and delay the agreement Exhibits PA and PB, defendant No. 2, Hazura Singh suffered a collusive decree in favour of his wife Smt. Gurdev Kaur, defendant No. 3, with respect to a parcel of land measuring 25 bighas 4 biswas out of the suit land, while Kartar Singh, defendant No. 1 suffered a collusive decree in favour of defendants No. 4 to 7. These decrees were suffered after the issuance of the registered notices by the plaintiff, calling upon defendants No. 1 and 2 to perform their part of the contract as per agreements Exhibits PA and PB. It is further alleged by the plaintiff that defendants No. 1 and 2 also entered into a collusion with defendant No. 8 Shri Amrit Lal, who also
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