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SUPREME COURT OF INDIA
ASHOK BHUSHAN, K.M. JOSEPH, JJ.
Tilak Raj Bakshi – Appellant
Versus
Avinash Chand Sharma (Dead) through LRs. and Others – Respondents
Civil Appeal Nos. 1524-1525 of 2019, SLP (C) Nos. 15576-15577 of 2015
Decided On : 20-08-2019
(a) Property law - Family settlement - Plaintiff pleading family settlement - Contesting defendant merely asserting the same to be forged and fabricated - Producing no evidence - Existence of family settlement established. (Para 17)
(b) Indian Contract Act, 1872 - Section 29 r/w section 93, Indian Evidence Act, 1872 - No plea that family settlement is vague and hence unenforceable and void - Held, such no pleading not a bar on appellate court looking into the contract - Court can declare the contract to be vague and unenforceable, if so found. (Para 21)
(c) Indian Contract Act, 1872 - Section 29 - Instantly family agreement providing that the property cannot be sold without concurrence of other two brothers - It further provides that if the three brothers concur that one brother can sell his share, first preference has to be given to the other two brothers - Held not vague - Interpretation of contract. (Para 22)
(d) Property law - Family settlement - Preference to other brothers while selling his share by any brother - First defendant offering to sell to plaintiff - Plaintiff agreeing to consideration amount - Failing to pay - First defendant selling his share to second defendant - No infirmity. (Para 32)
(e) Specific Relief Act, 1963 - Section 20 - Family settlement providing for any brother selling his share to give preference to other two brothers - First defendant offering to plaintiff and the selling his share to an outsider and his tenant, second defendant - Trial court, on finding that no offer was made by first defendant to plaintiff, holding that first defendant bound to make offer to the two brothers but was not bound to sell at the price he sold it to second defendant - Appellate court decreeing specific performance to plaintiff treating the family settlement as contract for sale of immovable property - Not correct - Appellate court further directing first defendant to hand over vacant possession to plaintiff - Not enforceable because second defendant being a tenant cannot be thrown out without eviction proceedings. (Para 37)
(f) Property law - Family settlement, right of preemption and right to purchase property under an agreement to sell - First respondent offering to sell his share first to plaintiff - Thereafter selling it to second respondent - Right of preemption is not right of re-purchase - First respondent cannot be directed to evict second respondent and sell it to plaintiff. (Para 44)
(g) Property law - Family settlement - One brother intending to sell his share - Settlement requiring concurrence of other two brothers - Thereafter the two brothers have to be given preference - Instantly although no written concurrence was obtained by first defendant, other brothers concurring by their conduct - First respondent offering to plaintiff, the other brother, third defendant being not interested - Plaintiff accepting the price as reasonable - Not taking any further steps - First defendant selling his share to second defendant, his tenant occupying the portion - Held, no contravention of terms of the settlement. (Para 53)
(h) Capital of Punjab (Development and Regulation) Act, 1952 - Section 3 r/w Rule 16, Chandigarh Sale of Sites and Building Rules, 1960 - First defendant selling his 1/3 share to second defendant - Property duly transferred and mutated in name of second defendant - Does not involve fragmentation. (Para 62, 63)
Facts of the case:
The suit scheduled property located in Chandigarh was owned by one Kirpa Ram Bakshi. He had executed a registered will on 04.09.1974 in favour of the plaintiff, the first defendant and another son who was the 3rd defendant in the suit in accordance whereof the disputed house was transferred in favour of the aforesaid three persons by the Estate Officer. The plaintiff filed the present suit alleging that the first defendant had sold the suit scheduled property to the second defendant in violation of their agreement on 31.03.1982. The suit was filed for declaring the sale deed in favour of the second defendant void and for specific performance directing first defendant to execute sale deed in respect of one-third share to the plaintiff.
The trial Court decreed the suit.
The first appeal of the second defendant was dismissed. The Appellate Court also allowed the cross appeal filed by the plaintiff and directed the second defendant to hand over possession to the plaintiff.
The high court allowed the second appeal.
Finding of the Court:
Appellant not entitled to relief of specific performamce.
Result: Appeals dismissed.
JUDGMENT :
K.M. JOSEPH, J.
1. These appeals arise out of special leave petitions and are directed against the impugned judgment of the High Court of Punjab and Haryana by which the second appeal filed by the second defendant in the suit has been allowed and the civil suit filed by the appellant herein has been dismissed. Parties will be referred to with reference to their position in the Trial Court.
2. The suit scheduled property located in Chandigarh was owned by one Kirpa Ram Bakshi. He had executed a registered will on 04.09.1974 in favour of the plaintiff, the first defendant and another son who was the 3rd defendant in the suit. Thereafter, the disputed house was transferred in favour of the aforesaid three persons by the Estate Officer. The plaintiff filed the present suit from which the appeal arises alleging that on 31.03.1982 there was an agreement entered into between the three brothers namely himself, the first defendant and the younger brother. Clause (5) of the agreement provides as follows:
“The individual portions of New Delhi and Chandigarh and agricultural land cannot be sold without concurrence of all three in writing and if it is sold on agreement of three, first preference to be given to both other brothers. Any special renovation after expiry of joint upkeep is done by any one of us and full accounts are maintained, then in the event of total sale of any unit, the extra amount spent on special renovation (subject to reasonable depreciation/appreciation) by individual will be payable to the individual over and above 1/3rd share of the sale proceeds.”
3. It was alleged that the said clause was violated by his brother, the first defendant and without getting his written concurrence for the same the first defendant sold the suit scheduled property to the second defendant. It was alleged that this will result in fragmenting the site which is prohibited and it was also alleged that the sale was void. The suit came to be filed for declaring the sale deed in favour of the second defendant void and for specific performance directing first defendant to execute sale deed in respect of one-third share to the plaintiff.
4. The second defendant contested the matter. It was inter alia contended that the family settlement was forged and fabricated. The plaintiff did not have any preferential right. The second defendant was a bona-fide purchaser. The plaintiff never intended to purchase the property. The share of the first defendant was transferred to the second defendant by the Estate Officer of Chandigarh on his application.
5. The trial Court found that the family arrangement was indeed executed. It is a genuine document and not forged or fabricated. The suit filed on 03.02.1998 challenging the sale deed dated 12.11.1997 was filed within time. The second defendant was found not to be a bona-fide purchaser. He was aware of giving preference by the first defendant to the appellant. It was further found that the plaintiff was never offered to purchase the share of the first defendant. The trial court found that the plaintiff was entitled to specific relief and declared the sale null and void. The plaintiff was entitled to specific performance as per the terms and conditions of the agreement dated 31.03.1982 to purchase the share of the first defendant.
6. The second defendant appealed against the judgment. The first Appellate Court found that the family arrangement was genuine. It referred to the correspondence between the plaintiff and the wife of the first defendant. He proceeded to find that the only controversy was whether the first defendant has offered to the plaintiff to purchase his one-third share or whether the plaintiff never came forward for the same. The first Appellate Court found that no document was produced to show that the first defendant himself offered. The court further goes on to find letters by the wife of the first defendant which reveals that offer was given to the plaintiff to purchase. As per clause (5)
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