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PUNJAB AND HARYANA HIGH COURT
Harphul Singh, J.
Inder Singh - Appellant
Versus
Sucha Singh - Respondent
Regular First Appeal No. 358 of 1979.
Decided On : 6 September, 1996
SPECIFIC PERFORMANCE - AGREEMENT TO SELL - PRIORITY - BONA FIDE PURCHASER - NOTICE - SECTION 55(1)(B) OF THE TRANSFER OF PROPERTY ACT, 1882 - Where an agreement to sell is prior to the sale deed, the agreement to sell is valid and enforceable. A subsequent sale deed executed by the same vendor in favor of a third party is void. The third party cannot claim to be a bona fide purchaser for value without notice if he had notice of the prior agreement to sell.
Fact of the Case:
Plaintiff Sucha Singh filed a suit for specific performance of a contract requiring defendants Mohan Singh and Bhagat Singh to execute and register a sale deed in his favor in accordance with the agreement made on 1.1.1975. Defendant No. 3, Indar Singh, resisted the suit, claiming that he was a bona fide purchaser for value without notice of the agreement in favor of the plaintiff.
Finding of the Court:
The court found that the agreement to sell in favor of the plaintiff was prior to the sale deed in favor of defendant No. 3. The court also found that defendant No. 3 had notice of the prior agreement to sell and was not a bona fide purchaser for value without notice.
Issues: 1. Whether the agreement to sell in favor of the plaintiff was prior to the sale deed in favor of defendant No. 3? 2. Whether defendant No. 3 was a bona fide purchaser for value without notice of the agreement in favor of the plaintiff?
Ratio Decidendi: The court held that the agreement to sell in favor of the plaintiff was prior to the sale deed in favor of defendant No. 3 and that defendant No. 3 had notice of the prior agreement to sell. Therefore, defendant No. 3 was not a bona fide purchaser for value without notice and could not claim title to the property.
Final Decision: The court decreed the suit for specific performance of the agreement to sell in favor of the plaintiff and ordered defendants No. 1 and 2 to execute the sale deed in favor of the plaintiff.
Harphul Singh Brar, J. - Sucha Singh plaintiff has filed a suit for specific performance of contract requiring defendants No. 1. and 2, Mohan Singh and Bhagat Singh to execute and get registered sale deed in his favour in accordance with the agreement made by them with the plaintiff on 1.1.1975, and with a consequential relief of injunction restraining defendants No. 1 and 2 not to sell, mortgage or alienate in any manner or form 761/2434 share of 121 kanals 14 marlas of land bearing Khasra Nos. 82/7/2, 8/2,12,13,14, 19, 21, 22,23, 17, 24, 82/18, 84/3,4,13,9,17,24 situated in village Mandiala Tehsil and District Amritsar as entered in the Jamabandi for the year 1969-70 to defendant No. 3 or any other person other than the plaintiff and restraining defendant No. 3 to purchase the aforesaid land from defendants No.1 and 2.
2. It has been averred in the plaint that defendants No. 1 and 2, Mohan Singh and Bhagat Singh, agreed to sell 761/2434 share of land described above belonging to them to the plaintiff vide agreement dated 1.1.1975 for a consideration of Rs. 27,348/- . The defendants also received Rs. 6000/- as earnest money at the time of execution of the agreement to sell dated 1.1.1975. The sate-deed was agreed to be executed and registered up to 27.1.1975 on payment of balance of sale price. The plaintiff on 27.1.75 reached the office of the Sub Registrar but defendants No. 1 and 2 failed to reach there to execute the sale deed. The plaintiff then served a notice on the defendants calling upon them to execute the sale deed within a week of the receipt of the notice. Time was made the essence of the contract. Defendants No. 1 and 2 did not come forward to execute the sale deed. Defendant No. 3 Indar Singh along with defendants No. 1 and 2 were not ready to execute the sale deed in favour of the plaintiff. Defendant No. 3 Indar Singh took advantage of the situation and wanted to purchase the suit land himself. Defendant No. 3 took away defendants No. 1 and 2 in order to prevent them from executing the sale deed in favour of the plaintiff with an ulterior motive so that he may get the sale deed executed in his own name. Defendant No. 3 had no right to get the sale deed executed from defendants No. 1 and 2 as the agreement to sell in favour of the plaintiff still sustained. It is then pleaded that the plaintiff has always been ready and willing and was still ready and willing to purchase the land in dispute. As the defendants No. 1 and 2 committed the breach of contract of sale the plaintiff was obliged to file the suit.
3. The suit was resisted by defendant No. 3 Indar Singh alone. Defendant No. 1 was represented by his counsel Shri S.C. Sareen Advocate. Later on he stopped to appear in the proceedings and was proceeded ex parte. Defendant No. 2 Bhagat Singh died during the pendency of the suit. Notice were given to his legal representatives, Smt. Bawi and Smt. Viro (both daughters). They did not appear to contest the suit and were also proceeded ex parte.
4. Defendant No. 3 Indar Singh had raised few preliminary objections in his written statement. Firstly, that the plaintiff has no locus stand to file the suit. Secondly, that the suit is not properly valued for the purpose of court fee and jurisdiction. Thirdly, that the suit is collusive. Fourthly, that the suit is barred under Order 2 and Rule 2 CPC and Section 11 CPC.
5. It was pleaded on merits that prior to the alleged agreement to sell in favour of the plaintiff, defendants No.1 and 2 had agreed to sell the suit land to defendant No. 3. They had executed an agreement deed and had received Rs. 3,000/- and then in pursuance of that agreement deed they had executed a sale deed in favour of defendant No. 3. It was then averred in the reply the defendant No.3 had paid the entire sale price and thus, he was owner of the suit land. It was further pleaded that defendant No. 3 was never served with any notice by the plaintiff and he never knew of the alleged agreement
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