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1999 Supreme(All) 1081

IN THE HIGH COURT OF ALLAHABAD
P. K. Jain, J.
DEEPAK RAJ - Appellant
Versus
SMT.SARITA RANI - Respondents
Second Appeal 902 Of 1999
Decided On : 07/30/1999

Advocates Appeared:
B.D.Mandhyan, P.K.Jain

The provisions of Sections 19 (b) and 20 (2) (b) of the Specific Relief Act should be read together and harmoniously while granting a decree for specific performance of a contract.

Headnote:

SPECIFIC PERFORMANCE - SALE OF PROPERTY - BONA FIDE PURCHASER - BURDEN OF PROOF - SECTION 19 (B) AND SECTION 20 (2) (B) OF THE SPECIFIC RELIEF ACT, 1963 - INTERPRETATION AND APPLICATION.

Fact of the Case:

Plaintiff entered into an agreement to purchase a property from defendant No. 1. Defendant No. 2 purchased part of the property after the agreement to sell was executed. Plaintiff filed a suit for specific performance of the contract or, alternatively, for refund of the amount advanced.

Finding of the Court:

The trial court and the lower appellate court held that defendant No. 2 was not a bona fide purchaser for value without notice of the agreement to sell and decreed the suit in its entirety.

Issues: 1. Whether the provisions of Section 19 (b) and Section 20 (2) (b) of the Specific Relief Act should be read together and harmoniously while granting a decree for specific performance of the contract? 2. Whether non-consideration of the plaintiff's evidence on the question of defendant No. 2 not being a bona fide purchaser and having notice of the agreement to sell vitiated the finding on issue No. 6?

Ratio Decidendi: 1. The burden of proving that the subsequent purchaser was a bona fide purchaser for value without notice of the earlier agreement to sell lies on the subsequent purchaser. 2. The courts below erred in not considering the plaintiff's evidence on the question of defendant No. 2 not being a bona fide purchaser and having notice of the agreement to sell. 3. The provisions of Sections 19 (b) and 20 (2) (b) of the Specific Relief Act should be read together and harmoniously. In the present case, the court should have considered the hardship that would be caused to the defendant-appellant by granting a decree for specific performance and should have granted an alternative decree for damages instead.

Final Decision: The appeal was allowed. The judgment and decree of the lower appellate court were set aside, and the case was remanded for a fresh decision in light of the discussions made by the court.

P. K. JAIN, J.

( 1 ) THIS second appeal has been filed by one of the defendants who purchased part of the suit property after an agreement to sell was executed by defendant No. 1 Brahm Prakash who died during the pendency of the suit and respondent Nos. 2 to 4 were substituted as heir and legal representatives.

( 2 ) RESPONDENT No. 1. Smt. Sarita Rani in her suit alleged that she had agreed to purchase the suit property for a sum of Rs. 40,000 through registered agreement dated 26. 7. 1991 executed by brahm Prakash. A sum of Rs. 35,000 was advanced at the time of execution of the agreement and balance of Rs. 5,000 was to be paid at the time of registration of sale deed. The property consisted of 4 shops as described at the end of the plaint. She alleged that she was ready and willing to get the sale deed executed after performing her part of contract and was still ready and willing to get the sale deed executed. The defendant No. 1, however, one or the other pretext has been postponing the execution of the sale deed. She had served notice dated 17. 8. 1991 through a lawyer but the defendant No. 1 did not execute the sale deed. Another notice dated 27. 9. 1991 was served but without any result. Defendant No. 2 (the present appellant before this Court)having notice of the agreement to sell purchased part of the suit property. The sale deed executed in favour of defendant No. 2 was not intended to be acted upon and was a fictitious document. The prayer made by the plaintiff was that by a decree of specific performance ; the defendants be directed to execute the sale deed after obtaining balance of Rs. 5,000 within the time prescribed by the Court failing which the sale deed be got executed through the Court. In the alternative, the relief claimed was that in case the Court found that it was not possible to get the sale deed executed, a decree of Rs. 40,000 along with interest be passed against the defendants.

( 3 ) THE defendants contested the suit on various grounds. The main ground of defence of the appellant was that he was a bona fide purchaser for value without notice of agreement to sell.

( 4 ) ON the pleadings of the parties, the trial court framed several issues. Issue No. 6 was to the following effect : "whether defendant No. 2 was bona fide purchaser for value of the suit property".

( 5 ) THE trial court on this issue observed that the sale deed in favour of the defendant No. 2 was got registered on 12. 8. 1991 whereas the original agreement to sell was executed on 26. 7. 1991 which was much before execution of the sale deed and it does not appear to be correct that at the time of execution of the sale deed Brahm Prakash [defendant No. 1) had no notice that he had executed any agreement to sell in favour of Smt. Sarita Rani, part of which he was selling to defendant No. 2. It was further observed by the Court below that it can also not be believed that defendant No. 2 may not be knowing about the execution of agreement to sell. It has further been observed by the Court below that defendant No. 2 had not entered into the witness box. The finding of the trial court was that being a subsequent purchaser, defendant No. 2 cannot be held to be a bona fide purchaser for value. The trial court, therefore, decreed the suit in its entirety.

( 6 ) THE lower appellate court framed following three points for determination and disposal of the appeal : "1. Whether Brahm Prakash agreed to sell the property to the plaintiff for a consideration of Rs. 40,000 and executed an agreement to sell on 26. 7. 1991 and received Rs. 35,000 as earnest money? 2. Whether the plaintiff was ready and willing to perform her part of obligation? 3. Whether the defendant No. 2 appellant was a bona fide purchaser for valuable consideration and without notice?"

( 7 ) POINT No. 3 is relevant for the present appeal. Observations of the lower appellate court in regard to this point were that "in order to invoke the plea of the bona fide purchaser. It is obligato

















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