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IN THE HIGH COURT OF ALLAHABAD
SARAL SRIVASTAVA, J.
Dinesh Chandra - Appellant
Versus
Santosh Kumar Alias Hari Prakash And Others - Respondents
Second Appeal No. 350 of 2024
Decided On : 08-05-2024
SPECIFIC PERFORMANCE - CONTRACT LAW - Transfer of Property Act, 1882; Specific Relief Act - The court discussed the provisions of the Transfer of Property Act, particularly Section 3 regarding notice, and Section 19(b) of the Specific Relief Act concerning bona fide purchasers for value. The court interpreted that for a party to claim notice of an agreement, certain conditions regarding registration must be met. The court concluded that the defendant 2nd set were bona fide purchasers without notice of the agreements, thus denying the plaintiff's claim for specific performance.
Fact of the Case:
The plaintiff filed a suit for specific performance of three agreements to sell against the defendant 1st set, claiming they failed to perform their part of the contract. The defendant 2nd set, who purchased the property, contended they were bona fide purchasers without knowledge of the agreements.
Finding of the Court:
The Trial Court found that the agreements were validly executed but ruled that the defendant 2nd set were bona fide purchasers for value without notice of the agreements, thus denying the specific performance claim but granting a refund of earnest money. The First Appellate Court affirmed these findings.
Issues: Whether the defendant 2nd set had knowledge of the agreements to sell and whether they were entitled to the protection under Section 19(b) of the Specific Relief Act.
Ratio Decidendi: The court emphasized that for a party to claim notice of a registered agreement, the conditions outlined in the Transfer of Property Act must be satisfied. The absence of evidence showing that the defendant 2nd set had knowledge of the agreements led to the conclusion that they were bona fide purchasers.
Final Decision: The appeal was dismissed as the findings of the lower courts were based on sound legal principles and no substantial question of law arose.
JUDGMENT :
(Saral Srivastava, J.) :
1. Heard learned counsel for the appellant and the learned counsel for the respondents.
2. The plaintiff/appellant has preferred the present Second Appeal challenging the judgement and decree dated 12.02.1986 passed by the Additional Civil Judge, Shahjahanpur in Original Suit No.130 of 1984 and judgement and decree dated 03.04.2024 passed by the Additional District Judge, Court No.43, Shahjahanpur dismissing the appeal of the plaintiff/appellant.
3. Brief facts of the case are that the plaintiff instituted a suit for specific performance of contract with regard to three agreements to sell dated 24.08.1983, 14.12.1983 & 06.01.1984 in respect to the suit property described in the plaint against the respondent nos.1 & 2 (defendant nos. 1 & 2) and respondent nos. 3 to 7 (defendants no. 3 to 7). For convenience, the plaintiff/appellant is referred to as 'plaintiff' and respondents no.1 & 2 are referred to as 'defendant 1st set' and respondents no.3 to 7 are referred to as 'defendant 2nd set'.
4. The plaintiff instituted the suit on the ground that three agreements to sell dated 24.08.1983, 14.12.1983 & 06.01.1984 executed between him and defendant 1st set were duly registered in the office of Sub-Registrar, Shahjahanpur. The plaintiff pleaded that he was ready and willing to perform his part of the contract, but the defendant 1st set failed to perform their part of contract. It is further pleaded that the defendant 1st set illegally executed the sale deed dated 06.01.1984 in favour of the defendant 2nd set in respect to the suit property, which gave the plaintiff cause of action to institute the suit for the above relief.
5. The suit was contested by the defendant 1st set by filing a written statement denying the allegations made in the plaint. The defendant 2nd set also filed a written statement denying the averments in the plaint. The defendant 2nd set further pleaded that they are bonafide purchasers of the suit property for value and they had no knowledge about the execution of any agreement to sell, therefore, the suit for specific performance against them deserves to be dismissed.
6. The Trial Court framed as many as nine issues. However, the Trial Court on the issue of "whether the agreement to sell was validly executed" held that the three agreements to sell were duly executed by the defendant 1st set in favour of the plaintiff. The Trial Court framed issue no.8 "whether the defendant 2nd set had any knowledge about the three agreements to sell and the defendant 2nd set are bonafide purchasers”.
7. The Trial Court in detail considered the testimony of PW1(Dinesh Chandra), PW2 (Puttu Lal) & PW3 (Rajendra Prasad) and recorded a finding that though PW1 had stated that the defendant 2nd set had knowledge about the agreement to sell, however, PW2 and PW3 stated that they don't know whether any information about agreements to sell was given to the defendant 2nd set. The Trial Court further considered the testimony of DW2 (Siya Ram) who categorically deposed that the defendant 2nd set did not know of the execution of the agreement to sell. The Trial Court further noted that no documentary evidence was filed on record which could establish that the defendant 2nd set had knowledge about the execution of agreements to sell between the plaintiff and defendant 1st set.
8. The Trial Court further noted the argument of the learned counsel for the defendant 2nd set and stated that since the sale deed was executed by the defendant 1st set in their favour within one month from the date of execution of the agreement to sell, and it takes about a month in making relevant entries in the registration office regarding the execution of any agreement to sell in respect of any property or creation of any charge over the property, and since no entry showing execution of any agreement to sell in respect of said property was recorded in the records of the Registrar Office as contemplated under law, therefore, the defe
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