GUJARAT HIGH COURT
S.H. Vora, J.
Ghanshyambhai Dhirubhai
Barvaliya —Appellant
versus
Rasikbhai Dhirubhai Ambaliya
and Ors. —Respondents
Appeal From Order No.457 of 2016 with Civil Application No.12575 of 2016 in Appeal From Order No.457 of 2016
Decided on 10.1.2017

IMPORTANT POINTS
1. If the right as a shield is available to the transferee as a defendant, there is no justification that it would be denied to the transferee even if by force of circumstances, he is compelled to approach the Court as a plaintiff to use that shield.
2. Appellate Court can interfere with the discretionary order passed by the trial Court only in exceptional circumstances and the Appellate Court cannot interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except, where the discretion has been shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions.

Headnote:(i) Transfer of Property Act, 1872—Section 53A—Part performance—Plaintiff-respondent No.1 claimed to have entered into agreement to sell with defendant No.1 for sale of suit land in 2008 and out of total sale consideration of Rs.51 lakhs, paid Rs.26 lakhs and defendant delivered original title deed of land to plaintiff with physical possession of land—Defendant No.1 had litigation with his predecessor in title which came to be settled in 2014 and defendant sold suit land by registered sale deed in favour of defendant No.3-appellant for Rs.17.5 lakhs in 2014—Plaintiff filed suit and filed injunction application—Court allowed injunction application—Appeal by defendant-subsequent buyer and plea that plaintiff could have prosecuted remedy under Section 53A of Transfer of Property Act as shield and was not entitled to file suit against transferor—If the right as a shield was available to transferee as a defendant, there was no justification that it would be denied to transferee even if by force of circumstances he was compelled to approach Court as plaintiff.

       Held: There is no doubt in the mind of this Court that the sale agreement by itself does not create any interest or charge in the immovable property. In the case of Suraj Lamp & Industries Pvt. Ltd. (supra), the Hon’ble Apex Court has held that the immovable property can be legally and lawfully transferred/conveyed only by registered deed of conveyance. While holding so, the Hon’ble Apex Court held that observations regarding SA/GPA/WILL transactions are not intended to apply to such bonafide/genuine transactions. Therefore, contention raised by learned advocate Mr. Purohit that doctrine of part performance incorporated in Section 53A of the Transfer of Property Act can be pressed into service only as a defence and the holder of agreement of contract cannot file a suit against the transferor in respect of the suit property for any purpose, cannot be accepted. Scrutiny of Section 53A of the Transfer of Property Act would indicate that when necessary conditions for application of the provisions are fulfilled, the transferor or any person claiming under him is debarred from enforcing against the transferee or any person claiming under him any right in respect of the property in question, even though, required to be registered, is not registered or where there is an instrument of transfer, the transfer is not legally complete. So, attempt on the part of learned advocate Mr. Purohit is to drive the Court to hold that the transferee can use the unregistered deed as shield only as a defendant and not as a plaintiff would defeat the very spirit of Section 53A for it will be possible for an over-powering transferor to forcibly dispossess the transferee even against the convenants in the contract and compel him to go to the court as a plaintiff. If the right as a shield is available to the transferee as a defendant, there is no justification that it would be denied to the transferee even if by force of circumstances, he is compelled to approach the Court as a plaintiff to use that shield. (Para 10)

       (ii) Registration Act—Section 17(aa) and 49—Suit on the basis of unregistered agreement to sell—Unregistered agreement could be used as evidence of collateral purpose—Suit could not be held not maintainable.

       Held: The first contention raised by learned advocate Mr. Vimal Purohit is that the suit agreement requires to be registered compulsorily in view of the provisions contained under Section 17(aa) of the Registration Act. Since, it is not registered, it cannot be admitted in evidence as provided under Section 49 of the Registration Act. It is true that the agreement to sale is required to be registered as per amended Section 17(aa) of the Registration Act. Since there is no corresponding amendment in Section 49 of the Registration Act, the suit of the plaintiff would not fail on the ground of non-registration of the agreement to sale. Even otherwise, document, required to be registered, if unregistered, can be admitted in evidence as evidence of contract in a suit for specific performance. Thus, unregistered agreement can be used as an evidence of collateral purpose as provided in proviso to Section 49 of the Registration Act. Therefore, it is neither appropriate nor necessary to consider the contention raised by learned advocate Mr. Vimal Purohit about maintainability of the suit as framed by the plaintiff. If any issue in that regard is settled by the learned trial Court, obviously, such issue would be decided in accordance with law. (Para 10)

       (iii) Specific Relief Act, 1963—Section 19(b)—Specific performance or contract may be enforced against any other person claiming under him by a title arising subsequent to the contract—Subsequent transferee can retain benefit of transfer by purchase only after satisfying two conditions; i.e. (i) he paid to full value for which he purchased the property; and (ii) he must have paid it in good faith and without notice of prior contract.

       Held: Now, this takes the Court to decide whether one of the subsequent purchasers i.e. the appellant herein is a bona fide purchaser of the subject land or not. In order to examine this aspect, it is necessary to consider the conduct of the subsequent purchasers before execution of sale deed dated 03.09.2014. It is settled principle of law under Section 19(b) of the Specific Relief Act that specific performance of contract may be enforced against any other person claiming under him by a title arising subsequently to the contract. If a person, as an owner of the property, has entered into an agreement to sale, he cannot, thereafter, convey the same property to any other person, as after prior agreement to sale, he cannot be said to be free owner of the property. If the owner alienates the property, he can alienate it only subject to the rights created under the prior agreement to sale. It is the case of the appellant i.e. subsequent purchaser that he has no knowledge about execution of sale agreement inter se between plaintiff and defendant No.1 and, therefore, they have bona fidely entered into the registered sale deed dated 03.09.2014 without notice of prior sale agreements and paid full value in good faith. Upon re-appreciation of the events, which occurred before and after registered sale deed dated 03.09.2014, it shows that the defendants with unusual haste, carried out the sale deed. The obvious reason is such that the sale deed executed and registered on 03.09.2014 discloses that the appellant was aware of pending proceedings being Special Civil Suit No.405 of 2008 between defendant No.1 and his predecessor in title. Admittedly, the dispute came to be resolved between the parties to the said suit on 12.09.2014 and prior to it, the sale deed was executed and registered. The said sale deed indicates that the appellant and respondent No.3 herein have paid amount of consideration by way of various cheques of the date 01.09.2014 to 04.09.2014. Admittedly, the amounts of cheques were withdrawn by defendant No.1 on 16.09.2014 and 17.09.2014 as per the statement of account annexed with the affidavit produced before this Court during the course of hearing. It is a matter of fact that though the dispute has been resolved on 12.09.2014, the suit was disposed of only on 02.10.2014. Normally, there is no reason to consider about withdrawal of the amounts on the part of the original owner - defendant No.1 but, in view of the peculiar facts of this case, conduct of the defendants goes to suggest that before the issue is resolved in a pending suit between defendant No.1 and his predecessor in title, the sale deed was executed and registered and meanwhile, the amounts of consideration were withdrawn in cash by the original owner i.e. defendant No.1 and thereafter, the Court has passed the order of disposal of the suit on 02.10.2014. This speaks a lot about conduct of the defendants, who in collusion, joined hands to frustrate the sale agreements in question. It requires to be considered here that the defendants with unusual haste, carried out the sale deed, where such transactions, as a rule, are carried out with appropriate inquiry and, more particularly, after obtaining title clearance certificate and also by publishing notice in newspaper before purchase. Admittedly, no such steps have been taken by the subsequent purchasers i.e. the appellant and respondent No.3 herein. Not only that, they have not bothered to inquire about the whereabouts of the original title deeds. One more significant aspect of the case required to be considered is such that defendant No.1 agreed to sale the subject land to the plaintiff for consideration of Rs.51 lacs which was fixed in the year 2008 whereas, the defendants inter se fixed the sale price of the subject land of Rs. 17,50,000/- in the year 2014. Meaning thereby, from 2008 to 2014, price of the subject land has been reduced to about 66% which can never be believed by any prudent man dealing in the transaction of the immovable property and further, the Court cannot overlook or ignore the existing scenario in the market about the prices of the land during the period in question.

       The plain language of Sub-Section (b) of Section 19 of the Specific Relief Act shows that subsequent transferee can retain the benefit of transfer by purchase, which prima facie, he had right to get, only after satisfying two conditions i.e. (1) he must have paid the full value for which, he purchased the property and; (2) he must have paid it in good faith and without notice of prior contract. The burden of proof is upon the subsequent purchaser to establish existence of these two conditions in order to see that his right prevails over the prior agreement of sale. In the case on hand, the conduct of the defendants themselves indicates that the appellant herein is not a bona fide purchaser because, the sale deed came to be executed and registered with unusual rapidity. Normal procedure for sale/purchase of immovable property as a rule is not such which is adopted in the present case. Hence, required ingredients of Section 19(b) of the Specific Relief Act are missing in this case and hence, protection of Section 19(b) is not available to the subsequent purchaser i.e. appellant herein. (Paras 14 and 15)

       (iv) Civil Procedure Code, 1908—Order 43 Rule 1(r)—Appeal from order—Appellate Court can interfere with discretionary order only in exceptional circumstances—Appellate Court cannot reassess entire evidence so as to come to its own conclusion contrary to one arrived at by trial court, if two view are possible.

       Held: So, in light of the limited powers of this Court, the Appellate Court can interfere with the discretionary order passed by the trial Court only in exceptional circumstances and the Appellate Court cannot interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except, where the discretion has been shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. In nutshell, an appeal against exercise of discretion is said to be an appeal on principle. To put it differently, the Appellate Court cannot reassess the entire evidence so as to come to its own conclusion contrary to the conclusion arrived at by the trial Court, if two views are possible. (Para 18)

       Result: Appeal dismissed.