The court ruled that specific performance cannot be enforced against property owners not a party in the agreement.

CAV JUDGMENT

(PER: THE HON'BLE MR.JUSTICE SACHIN SHANKAR MAGADUM)

The captioned appeal is by the plaintiff assailing the judgment and decree rendered by the trial Court in O.S.No.56/2011 wherein plaintiff's suit seeking relief of specific performance of contract based on an agreement of sale dated 10.06.2010 is partly allowed by the trial Court and suit is decreed ordering for refund of earnest money of Rs.80,00,000/- with interest at the rate of 10% per annum from the date of suit till realization. Plaintiff is therefore in an appeal.

2. For the sake of brevity, the parties are referred to as per their rank before the trial Court.

3. The facts leading to the case are as under:

Plaintiff has filed the present suit alleging that defendant Nos.1 and 2 being partners of defendant No.4/partnership firm offered to sell the suit schedule property in their favour for a sale consideration of Rs.1,16,00,000/- and accordingly, executed an agreement of sale on 10.06.2010 by receiving advance earnest money of Rs.80,00,000/-. Plaintiff further alleged that defendant Nos.1 and 2 agreed that they would complete the transaction within two years by receiving balance sale consideration of Rs.36,00,000/-. The plaintiff further contended that defendant Nos.1 and 2 had agreed that they will not alienate the suit schedule property and further undertook to discharge the encumbrance over the suit schedule property. The present suit is filed alleging that contrary to agreement of sale, defendant Nos.1 and 2 have sold the suit schedule property in favour of defendant No.3 under registered sale deed dated 09.09.2011 for a sale consideration of Rs.1,16,00,000/- in collusion with defendants only to defeat the plaintiff's right.

4. On receipt of summons, defendant Nos.1 and 2 and defendant No.4/firm engaged a counsel and filed a joint written statement. The said written statement is adopted by defendant No.4/firm by filing a memo on 17.10.2016. Defendant Nos.1 and 2 supported the plaintiff's case. Defendant Nos.1 and 2 who have sold the property to defendant No.3, however, alleged that they were coerced and threatened and the sale deed was obtained by defendant No.3 by threatening defendants 1 and 2 and hence, supported the plaintiff.

5. Defendant No.3, however, stoutly denied the entire averments made in the plaint and disputed the alleged agreement set up by the plaintiff and defendant Nos.1 and 2, Defendant No.3, on the contrary, claimed that defendant No.4/firm incurred heavy loans and this compelled defendant No.4/firm to sell the suit schedule property and therefore, defendant No.3 claimed that he is a bona fide purchaser for a valuable sale consideration without notice and hence, sought for dismissal of the suit.

6. Plaintiff and defendants to substantiate their respective claim have let in oral and documentary evidence.

7. Trial Court though answered issue No.1 in the affirmative and held that plaintiff has succeeded in proving the suit agreement and the payment of earnest money of Rs.80,00,000/-, however, answered issue No.4 in the affirmative and held that defendant No.3 has succeeded in proving that he is the bonafide purchaser of suit schedule property. Therefore, trial Court declined to grant larger relief of specific performance of contract and accordingly, ordered for refund of earnest money of Rs.80,00,000/- payable by defendant Nos.1 and 2.

8. Learned counsel appearing for the plaintiff reiterating the grounds has vehemently argued and contended that substantial sale consideration is paid by the plai