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1987 Supreme(All) 29
HIGH COURT OF ALLAHABAD
V.P. MATHUR, J.
Kadam Singh - Appellant
Versus
Santosh Kumar - Respondent
First Appeal No. 74 of 1974
Decided on : Jan 22, 1987
R.N. Bhalla, Dhan Prakash
A subsequent purchaser is a bonafide purchaser for value without notice if he has paid value for the property and had no notice of any prior agreement to sell.
Headnote:
SPECIFIC PERFORMANCE - AGREEMENT TO SELL - BURDEN OF PROOF - BONAFIDE PURCHASER FOR VALUE WITHOUT NOTICE - CIRCUMSTANCES PUTTING PURCHASER ON GUARD - DUTY TO MAKE ENQUIRY - NOTICE OF EARLIER TRANSACTION.
Fact of the Case:
Plaintiff filed a suit for specific performance of an agreement to sell property against the vendees and the heirs of the vendor. The plaintiff claimed that he had entered into an agreement with the vendor to purchase the property for Rs. 50,000 and had paid Rs. 25,000 as earnest money. The vendees claimed that they were bonafide purchasers for value without notice of the agreement.
Finding of the Court:
The court found that the plaintiff had established the existence of the agreement to sell and that the vendees had paid value for the property. However, the court also found that the vendees had no notice of the agreement to sell and that there were no circumstances that would have put them on guard to make further inquiries.
Issues: 1. Whether the plaintiff had established the existence of the agreement to sell? 2. Whether the vendees were bonafide purchasers for value without notice of the agreement to sell?
Ratio Decidendi: The court held that the burden of proving that a subsequent purchaser is a bonafide purchaser for value without notice lies on the purchaser. However, the court also held that the onus is negative in nature and that very little evidence, and in certain circumstances the mere denial regarding want of knowledge of the earlier contract would discharge the onus and shift it to the plaintiff.
Final Decision: The court dismissed the plaintiff's suit for specific performance, holding that the vendees were bonafide purchasers for value without notice of the agreement to sell.
V. P. Mathur, J.
1. This appeal is directed against the judgment and decree passed on 14-2-74 by Mr. Manphool Singh, 1st Additional Civil Judge, Meerut in suit no. 206 of 1973.
2. Briefly stated, the suit had been filed by Kadam Singh against Santosh Kumar and Bhagmal, the two vendees from Kharkoo, and also against Peetam Singh and others, defendants nos. 3 to 7, who were vendees from defendants nos. 1 and 2. Smt. Parshandi, wife of late Bhullan, was defendant no. 8 and she was the heir of Kharkoo in respect of the property in dispute. The prayer was that all the defendants should be called upon to execute the sale deed of the disputed property in favour of the plaintiff and in case they failed to comply, the court may execute the sale deed in plaintiff's favour on their behalf. In the alternative, refund of Rs. 25000/- was also claimed against the estate of Kharkoo in the hands of defendant no. 8.
The allegations were that Kharkoo executed a deed of agreement on 10-2-70 (Ext. 2) in favour of the plaintiff in respect of the agricultural land and one residential house in village Daha in the district of Meerut for a sum of Rs. 50,000/-. Kharkoo had delivered possession of the disputed property to the plaintiff and received Rs. 25000/- by way of earnest money. It was agreed that Kharkoo shall execute the sale deed of the property in dispute within one month of the decision of the partition suit, which was pending at the time of execution of the agreement. There was also stipulation that the balance amount of Rs. 25000/- was to be paid to Kharkoo at the time of registration of the sale deed before the Sub-Registrar and Kharkoo had taken obligation upon himself to inform the plaintiff about conclusion of the partition suit and the plaintiff had a right either to purchase the property in his name or in the name of his nominees. Kharkoo died on 20-1-73 in village Barwala in the district of Muzaffarnagar and the plaintiff came to know that defendants nos. 1 and 2 had obtained a fictitious sale deed for a sum of Rs. 42000/- from Kharkoo on 17-1-73 vide Ext-A 11. It appears that the sale deed was void and the defendants nos. 1 and 2 had conveyed knowledge about the existence of the earlier agreement dated 10-2-70 in favour of the plaintiff. So far as the sale deed Ext-A 11 is concerned, it was further alleged that Kharkoo did not receive the consideration at all and never agreed to transfer the land in favour of defendants nos. 1 and 2, and this deed was only executed with a view to defeat the plaintiff's right and to illegally possess the property although defendants nos. 1 and 2 never came into possession in consequence of the sale-deed. These defendants nos. 1 and 2 had already transferred a substantial portion of the disputed property, after having received fancy price, to different persons. In para 9 of the plaint the details of these transfers were furnished. Lastly, it was contended that defendant no. 8 is legal heir of deceased Kharkoo, being his brother's wife, and she has been impleaded in order to avoid further complications.
3. Only defendants nos. 1 and 2 contested the suit. They pleaded that they were bonafide purchasers of the disputed property for value without any notice of the alleged agreement in plaintiff's favour. They contended that Kharkoo had received Rs. 42000/- from them by way of consideration of the sale deed and the deed was executed on 17-1-72 validly and rightly. According to them, Kharkoo died on 29-1-73 and not on 20-1-73 and had delivered possession of the property to defendants nos. 1 and 2 and had acknowledged receipt of the entire sale consideration of Rs. 42000/- before the Sub-Registrar. The defendants challenged the existence of the alleged agreement Ext 2 at the time of execution of sale deed Ex-A 1 and contended that Kharkoo neither executed the agreement nor put his thumb impression on it. They also pleaded that they had no information of the existence of this deed of agreement, if at al
