Hon’ble S.N. Srivastava, J.—This Second appeal has been preferred against the judgment and decree dated 19.5.1981, passed by 2nd Additional District Judge, Shahjahanpur allowing Civil Appeal No. 123 of 1980, Sadho Singh v. Prakash Chandra Gupta and others dismissing suit, by reversing the judgment and decree dated 24th May, 1980 passed in original Suit No. 137 of 1978, Prakash Chandra v. Smt. Loungsri for specific performance of agreement to sell dated 11.2.76.

2. Plaintiff filed a suit for specific performance of contract dated 11.2.76 of the house in suit situated in Mohalla Tarin Bahadurganj, Shahjahanpur on the ground inter-alia that for the house in suit situated on plot No. 470 area (12 x 8) 96 sq yards, that an agreement to sell was entered into on 11.2.1976 by defendant No. 1 Loungsri for consideration of Rs. 7,500/-, that out of which Rs. 5,000/- was paid as earnest money, that in spite of the effort and plaintiffs readiness and willingness to purchase the property, the sale-deed was not executed and defendant No. 2 with full knowledge of agreement to sell got executed a sale-deed dated 19.8.77 which was a paper transaction registered on 28.9.77 for alleged consideration of Rs. 10,000/-, that the defendants are bound by the agreement to execute a sale-deed. Accordingly relief was sought to pass a decree of specific performance of the contract dated 11.2.76 of the house in suit against defendants to execute sale-deed after taking Rs. 2,500/-.

3. A Written Statement was filed by defendant No. 2 denying the plaint allegations and also execution of agreement to sell. In alternative, it was pleaded that defendant No. 2 was a bona fide purchaser for value without notice and, as such, suit for specific performance could not be decreed against him. Various other pleadings were also made in written statement including bar of limitation. Defendant No. 1 Laungsri also filed her written statement. She denied plaint allegation and also pleaded that plaintiff was never in possession of the house in suit. On pleadings of parties, following issues were framed :

(1) Whether there was any agreement to sell between plaintiff and defendant.

(2) Whether plaintiff is in actual possession of the house in suit.

(3) Whether defendant No. 2 is bona fide purchaser.

(4) Whether any other relief which plaintiff is entitled to.

Issue No. 1 was decided in favour of plaintiff by Trial Court. It was found that an agreement to sell between plaintiff and defendant No. 1 was entered into and Rs. 5,000/- was also paid at the time of agreement to sell. So far as Issue No. 2 is concerned, plaintiffs possession was found from before to execution of agreement to sell. So far as Issue No. 3 is concerned, it was held that defendant No. 2 was not a bona-fide purchaser for value.

4. With above findings, suit was decreed on 24.5.1980 for specific performance of contract directing defendant No. 1-Loungsri and defendant No. 2 Sadho Singh to execute sale-deed after receiving balance amount of Rs. 2500/- failing which, the sale-deed will be executed in accordance with law by the Court.

5. An appeal preferred by defendant No. 2 (subsequent purchaser) was allowed and suit was dismissed, though Appellate Court affirmed the finding on Issue No. 1 that Smt. Loungsri defendant No. 1 executed agreement to sell dated 11.2.76. Appellate Court held that Loungsri executed sale-deed of the house in suit in favour of defendant-appellant on 19.8.77 after receiving of Rs. 10,000/- as sale consideration and defendant No. 2 was a bona fide purchaser for value without notice, so the agreement to sell is unenforceable against defendant No. 2.

6. Second Appeal was admitted on following substantial question of law :

(1) Whether the finding of the lower appellate Court that the first defendant respondent was a bona fide transferee for a valuable consideration without notice of the agreement of sale, is vitiated in law ?

7. Heard learned Counsel for the parties at great length.

8. Learned Cou