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High Court Of Madhya Pradesh
P. V. Dixit, J.
GHASIRAM - Appellant
Versus
SHANKARLAL - Respondents
Second Appeal 325 Of 1952
Decided On : 07/23/1958
SPECIFIC PERFORMANCE - ORAL CONTRACT TO SELL - MORTGAGES CREATED BY VENDORS AFTER CONTRACT - NOTICE TO MORTGAGEE - EFFECT - SECTION 27 (B) OF THE SPECIFIC RELIEF ACT - SECTION 48 OF THE REGISTRATION ACT - APPLICABILITY.
Fact of the Case:
Plaintiffs purchased a house in pursuance of a decree for specific performance of an oral contract to sell the house, concluded between them and the owners of the house. The owners had created mortgages on the house in favor of the appellant after the contract to sell. The plaintiffs filed a suit for possession of the house from the appellant on payment to him of Rs. 2400/- in respect of the mortgages of 1913 and 1918. The appellant claimed that the plaintiffs were not entitled to obtain possession of the property without redeeming the mortgages of 1938 and 1943.
Finding of the Court:
The lower court found that the appellant had knowledge of the contract for the sale of the house concluded between the plaintiffs and the owners in 1927 when he took the two mortgages in 1938 and 1943.
Issues: Whether the plaintiffs are under a liability to redeem the mortgages of 1938 and 1943 effected on the property by the owners subsequent to the oral agreement for the sale of the property concluded by them with the plaintiffs and whether the plaintiffs are entitled to possession of the property without redeeming these mortgages.
Ratio Decidendi: Section 27 (b) of the Specific Relief Act provides that specific performance of a contract may be enforced against any person claiming under the contracting party by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract. The appellant had notice of the oral agreement to sell when he took the mortgages in 1938 and 1943, therefore, under Section 27 (b) of the Specific Relief Act, the registered mortgages of 1938 and 1943 cannot prevail as against the plaintiffs and they are not bound by those mortgages.
Final Decision: The appeal was dismissed with costs.
( 2 ) THE material facts are that on 27th December 1927 Bondar and Chheetar entered into an agreement with Shankarlal and Ramkishan for the sale of the house to them for Rs. 3500/ -. It was agreed between (he parties that out of this consideration Rs. 1100/- would be paid immediately and the remaining amount of Rs. 2400/- would be paid by the purchaser directly to Nathuji, Bhagirath and Ghasiram who had taken earlier two mortgages of the property, one of them executed by Mulchand the father of Bondar and Cheetar, on 24th November 1913 for Rs. 2000/- and the other executed by Bondar and Cheetar on 23rd December 1918 for Rs. 400/ -. After the aforesaid agreement to sell was concluded, proceedings were initiated in the Court of the Munsiff of Dhar by Bondar and Cheetar under the prevailing law in the former Dhar State for registration of a sale-deed in favour of Shankarlal and Ramkishan. These proceedings proved to be abortive as for some reason or another Bondar and Cheetar declined to perform, the contract they had concluded with Shankarlal and Ramkishan. In these proceedings for the registration of a sale-deed in favour of Shankarlal and Ramkishan, the mortgagees Nathuji, Bhagirath and Ghansiram lodged an objection on 18th February 1928 stating that the prospective vendees were not entitled to obtain possession of the properly without redeeming the two mortgages executed by the vendors in their favour in 1913 and 1918. The registration proceedings were, however, dismissed on 19th February 1941. In the meantime on 4th February 1938 Bondar and Cheetar effected another mortgage on the house in favour of Nathuji, Bhagiram and Ghasiram for Rs. 1922-8-0 and on 14th June 1943 Cheetar alone (Bondar having died in the meantime) made yet another mortgage on the house for Rs. 6422-8-0. In 1944 Shankarlal and Ramkishan instituted a suit against Cheetar in the court of the Munsiff of Dhar for specific performance of the contract of sale dated 27th December 1927 and obtained on 21st June 1944 a decree in their favour. The decree directed that Shankarlal and Ramkishan should pay Rs. 2400/- to discharge the mortgages in favour of Ghasiram, Nathuji and Bhagirath and obtain possession of the house and Cheetar should execute and register a sale-deed of the house in favour of Shankarlal and Ramkishan. It must be noted that in that suit Ghasiram had made an application on 3rd January 1944 for being made a party to the suit. The application was opposed by Shankarlal and Ramkishan and was rejected by the Court. After the execution of a sale-deed in their favour by Cheetar, Shankarlal and Ramkishan filed a suit against Cheetar and Ghasiram, out of which this appeal arises, for possession of the house from Ghasiram on payment to him of Rs. 2400/-in respect of the mortgages of 1913 and 1918. At the time of the institution of the suit, Nathuji, Bhagirath and Bondar were dead. Cheetar did not appear and contest the suit and it proceeded ex parte against him. Ghasiram resisted the plaintiffs' claim on variousgrounds one of them being that the plaintiffs Ramkishan and Shankarlal were not entitled to obtain possession of the property without redeeming in addition to the two mortgages of 1913 and 1918, the other two mortgages of 1938 and 1943. The suit was dismissed by the Munsiff of Dhar. Thereupon Shankarlal and Ramkishan appealed to the Court of the District Judge of Dhar. The learned District Judge gave to the plaintiffs a decree for possession of the property on payment to Ghasi
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