In the High Court of Punjab and Haryana, at Chandigarh

Regular Second Appeal No. 6947 of 2016 (O&M)

Date of Decision: 28.07.2022

Reserved On : 22.07.2022

Baldev Singh and Another

... Appellant(s)

Versus

Mohan Singh and Another

... Respondent(s)

CORAM: Hon'ble Mr. Justice Anil Kshetarpal.

Present:

Mr. Vijay Lath, Advocate

for the appellant(s).

Mr. Sandeep Jain, Advocate

for the respondent No.2.

Anil Kshetarpal, J.

1.

The plaintiffs assail the correctness of the findings arrived at by

the learned First Appellate Court, which has accepted their appeal, however,

with a rider that the lien of defendant No.2 (State Bank of Patiala,

Mukandpur Branch, District Shaheed Bhagat Singh Nagar) would remain a

first charge on the suit property and the defendant No.2-Bank, if the

situation so arises, would be able to enforce all its rights against the suit

property even if its ownership changes hands.

2.

In these circumstances, the question which arises for

consideration is “if a prior agreement to sell is proved, then whether

subsequent mortgage of the property in favour of bank shall not affect the

rights of the agreement holder in a case where the suit for specific

performance of the agreement to sell has been decreed?”

3.

Some peculiar facts are required to be noticed. Sh.Mohan Singh

DEEPAK KUMAR BHARDWAJ

2022.08.10 15:27

I attest to the accuracy and

integrity of this document

Regular Second Appeal No. 6947 of 2016 (O&M)

2

was the owner of the land measuring 13 kanals and 7 marlas. He, through

his attorneys, is stated to have entered into an agreement to sell of the

aforesaid property with the plaintiffs for 01.03.2009 for a total sale

consideration of 20,00,000/-. A sum of 10,00,000/- was paid as earnest

₹

₹

money. The sale deed was agreed to be executed and registered on

02.05.2009 which was extended twice, upto 15.01.2010. The respondent-

Bank claims that Sh.Mohan Singh mortgaged the property in its favour

against a term loan of 20,00,000/- and a cash credit limit to the tune of

₹

3,75,000/- borrowed by Sh.Jaswinder Singh (his son) and executed a

₹

registered mortgage deed dated 17.04.2009.

4.

The trial Court refused to grant the relief of specific

performance as it was found that the suit has been instituted after an

unexplained delay of 2½ years, whereas, the First Appellate Court has

decreed the suit for specific performance with a rider giving precedence to

the rights of the bank. It is relevant to note that though the defendant No.2

(Sh.Mohan Singh) filed a written statement, but never appeared in evidence.

Only the bank (defendant No.2) contested the suit.

5.

Heard the learned counsel representing the parties and with

their able assistance, perused the paper-book.

6.

The learned counsel representing the appellant contends that the

plaintiffs (appellants) have prior contract in their favour and such contract

may not create right in the property, but nonetheless it creates an obligation

attached to the ownership of the property. He contends that subsequent

charge created on account of mortgage cannot override the rights of the

plaintiffs. In support of his arguments, he relies upon the judgments passed

by the Supreme Court in Vannarakkal Kallalathil Sreedharan v.

DEEPAK KUMAR BHARDWAJ

2022.08.10 15:27

I attest to the accuracy and

integrity of this document

Regular Second Appeal No. 6947 of 2016 (O&M)

3

Chandramaath Balakrishnan (1990)3 SCC 291, Rajender Singh v.

Ramdhar Singh and Others (2001)6 SCC 213 and Jagroop Singh and

Others v. Boria Khan (Dead) through LRs and others 2009(1) RCR

(Civil) 697.

7.

On the other hand, the learned counsel representing the Bank

contends that the agreement to sell between the plaintiffs and defendant

No.1 (Sh.Mohan Singh) in an antedated agreement, which is fabricated in

order to defeat the rights of the bank.

8.

Keeping in view the facts of the case, it becomes