IMPORTANT POINT
Agreement to Sell – Vendor is not permitted to set up defect of title as a defence in a suit for specific performance.

JUDGMENT

This Appeal under Section 96 of the Code of Civil Procedure (C.P.C.) is filed against the judgment dated 11.11.2010 of learned Senior Civil Judge, Mangalagiri in O.S.No.71 of 2008. The said suit was for specific performance of an agreement for sale and in the alternative for compensation. The intending purchaser filed the said suit as against the vendors. After due trial, the suit was decreed in favour of the purchaser. Aggrieved defendants/vendors preferred this appeal. The plaintiff in the suit is the sole respondent in this appeal.

2. An unregistered, non-possessory agreement for sale dated 29.08.2003 fell in controversy. Smt. Shaik Mariyam Khatoon stated to have executed the said agreement for sale in favour of Smt. Yalamanchili Rajani. Ac.2.20 cents of agricultural land in Rayapudi Village of Thulluru Mandal, Guntur District in D.No.112/1 is the property that was agreed to be sold. The agreed sale consideration is Rs.8,91,000/-. Rs.2,00,000/- towards advance sale consideration was stated to have been paid and received on the date of agreement. The outer date for payment of the balance sale consideration of Rs.6,91,000/- was on or before 20.12.2003. After taking measurements the sale consideration would be adjusted. If the intending purchaser could not pay the balance sale consideration on or before the date fixed, she shall pay 12% interest over the balance sale consideration and obtain the registered sale deed from the vendor. Within the date fixed/20.12.2003 the balance sale consideration was not paid. On 09.01.2004 the intending purchaser issued notice to the vendor. On 19.01.2004 the vendor issued reply notice to the intending purchaser. Thereafter plaint was presented on 23.02.2004.

3. Before adverting to the facts on record, the following principles of law are required to be noticed:

Sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. A contract for the sale of immovable property is a contract that the sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property [Section 54 of the Transfer of Property Act].

Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force. [Section 7 of the Transfer of Property] What is to be noticed is it is not only the title holder who can transfer property but also one who is authorized by title holders is also entitled to transfer the property.

Every seller of immovable property is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover. [Section 55(1)(a) of the Transfer of Property Act] It is also to be noticed in a suit by a vendor for specific performance of an agreement for sale specific performance cannot granted if the vendor contracted to sell the property knowing that he/she does not have title to the property. [Section 17 of the Specific Relief Act, 1963] This principle is not applicable to purchasers of the property when they sue for specific performance. Law is that vendor is not permitted to set up defect of title as a defence in a suit for specific performance.

4. The disputed agreement for sale was exhibited as Ex.A.1 during trial. It is mentioned therein that the executant Smt. Shaik Mariyam Khatoon holds full and complete rights and possession over the property and that she intended to sell it to meet her family needs and Smt. Yalamanchili Rajani agreed to purchase it. It is also mentioned that since the intending purchaser requested the executant, she agreed to get her two