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Monday, September 1, 2014

Specific performance - sale agreement obtained from two brothers only not valid - The said agreement is not enforceable in law in view of Section 17 of the Specific Relief Act in view of right accrued in favour of defendant Nos. 3 to 6 under Section 8 of the Hindu Succession Act. The provisions of Section 17 of the Specific Relief Act in categorical term expressly state that a Contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor who does not have absolute title and right upon the party. Though, the defendants on merits have succeeded in this case for the reasons recorded by us on the substantial questions of law that have been framed by us on appreciation of facts and legal evidence on record, having regard to the peculiar facts and circumstances of the case particularly, the execution of Agreement of Sale, Ex. A-1 by defendant Nos. 1 and 2 on 3.5.1993, after receiving part consideration of Rs.15,000/-, and the submission made by the learned counsel for the defendants, it would be just and proper for this Court to award a sum of Rs.6,00,000/- by lump-sum amount of compensation to the plaintiffs within 3 months from the date of receipt of a copy of this judgment as provided under Section 22 of the Specific Relief Act.= CIVIL APPEAL NO. 7835 OF 2014 (Arising out of SLP(C) NO. 24653 OF 2012) PEMMADA PRABHAKAR & ORS. …APPELLANTS Vs. YOUNGMEN’S VYSYA ASSOCIATION & ORS. …RESPONDENTS = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41856

   Specific performance - sale agreement obtained from two brothers only not valid - The  said agreement is not enforceable in law in view of Section 17  of  the  Specific Relief Act in view of right accrued in favour  of  defendant  Nos.  3  to  6 under Section 8 of the Hindu Succession Act. The provisions  of  Section  17 of the Specific Relief Act  in  categorical  term  expressly  state  that  a Contract to sell or  let  any  immovable  property  cannot  be  specifically
enforced in favour of a vendor or lessor who does not  have  absolute  title and right upon the party. Though,  the  defendants  on merits have succeeded in this case for the reasons recorded  by  us  on  the substantial questions of law that have been framed by us on appreciation  of
facts and legal evidence on record, having regard to the peculiar facts  and circumstances of the case particularly, the execution of Agreement of  Sale, Ex. A-1 by defendant  Nos.  1  and  2  on  3.5.1993,  after  receiving  part consideration of  Rs.15,000/-,  and  the  submission  made  by  the  learned counsel for the defendants, it would be just and proper for  this  Court  to award a sum of Rs.6,00,000/- by  lump-sum  amount  of  compensation  to  the plaintiffs within 3 months from the date  of  receipt  of  a  copy  of  this judgment as provided under Section 22 of the Specific Relief Act.=

 the  suit  schedule  property  is  self
acquired property by  late           Pemmada  Venkateswara  Rao  as  he  had
purchased the      said property vide Sale-Deed  Document  No.5174  of  1970
dated 24.11.1970 from his vendors.
It is also an undisputed  fact  that  the
said property is intestate property. He is survived by his wife, 3 sons  and
3 daughters.
The said property devolved upon them in view of  Section  8  of
Chapter 2 of the Hindu Succession Act as the defendants are  class  I  legal
heirs in the suit schedule property.
Undisputedly, the  Agreement  of  Sale-
Ex.-A1 is executed only by defendant Nos. 1 and 2. 
The 3rd  son, mother  and
3  sisters  who have got equal shares in the property have not executed  the
Agreement of Sale.
In view of the matter, the Agreement of Sale executed  by
defendant Nos. 1 and 2 who have no absolute right to  property  in  question
cannot confer any right whatsoever upon the plaintiffs for grant  of  decree
of specific performance of Agreement of  Sale  in  their  favour.

 Whether the plaintiffs are entitled  for  the  decree  for  specific
performance  of the Agreement of Sale  (Ex.-A1)        
when  Agreement  of
Sale entered between the plaintiffs and defendant  Nos.  1  and  2
who do not have absolute title to the property?

Whether in the absence of execution of the Agreement of Sale-Ex.-A1  by  the
other defendants/co-sharers is it valid, even  assuming  that  Agreement  of
Sale is valid, there is breach of terms and conditions of  the  Contract  on
the part of the plaintiffs in not paying the sale  consideration  amount  of
Rs. 1,70,000/- within  10  days  from  the  day  of  vacating  the  tenants,
Rs.50,000/- on 30.11.1993 and  an  amount  of  Rs.1,50,000/-  on  or  before
30.3.1994 to the defendants  and  plaintiffs  are  entitled  for  decree  of
specific performance of the Agreement of Sale?

Whether the plaintiffs are entitled for  discretionary  relief  of  specific
performance under Section 20(2) of the Specific Relief Act when it  has  not
approached the court with clean hands?

What relief?

  Answer to Point No. 1

29.   It is an undisputed fact that  the  suit  schedule  property  is  self
acquired property by  late           Pemmada  Venkateswara  Rao  as  he  had
purchased the      said property vide Sale-Deed  Document  No.5174  of  1970
dated 24.11.1970 from his vendors.
It is also an undisputed  fact  that  the
said property is intestate property. He is survived by his wife, 3 sons  and
3 daughters.
The said property devolved upon them in view of  Section  8  of
Chapter 2 of the Hindu Succession Act as the defendants are  class  I  legal
heirs in the suit schedule property.
Undisputedly, the  Agreement  of  Sale-
Ex.-A1 is executed only by defendant Nos. 1 and 2. 
The 3rd  son, mother  and
3  sisters  who have got equal shares in the property have not executed  the
Agreement of Sale.
In view of the matter, the Agreement of Sale executed  by
defendant Nos. 1 and 2 who have no absolute right to  property  in  question
cannot confer any right whatsoever upon the plaintiffs for grant  of  decree
of specific performance of Agreement of  Sale  in  their  favour.
The  said
agreement is not enforceable in law in view of Section 17  of  the  Specific
Relief Act in view of right accrued in favour  of  defendant  Nos.  3  to  6
under Section 8 of the Hindu Succession Act. The provisions  of  Section  17
of the Specific Relief Act  in  categorical  term  expressly  state  that  a
Contract to sell or  let  any  immovable  property  cannot  be  specifically
enforced in favour of a vendor or lessor who does not  have  absolute  title
and right upon the party.
It is worthwhile to  extract  Section  17  of  the
Specific Relief Act,1963 here :-
“17.-Contract to sell  or  let  property  by  one  who  has  no  title,  not
specifically enforceable.- A contract to sell or let any immovable  property
cannot be specifically enforced in favour of a vendor or lessor;

(a) who, knowing not to have any title to the property,  has  contracted  to
sell or let the property

(b) who, though he entered into the contract believing that he  had  a  good
title to the property, cannot at the time fixed by the  parties  or  by  the
court for the completion  of the sale or  letting,  give  the  purchaser  or
lessee a title free from reasonable doubt.”

In view of  the  aforesaid  provisions  of  the  Specific  Relief  Act,  the
Agreement of Sale entered between the plaintiffs and some of the  co-sharers
who do not have the absolute title to the  suit  schedule  property  is  not
enforceable in law.  This  aspect  of  the  matter  has  not  been  properly
appreciated and considered by both the First Appellate Court and the  Second
Appellate Court. Therefore, the impugned judgment is vitiated in law.

30.   Even assuming for the sake of argument that the  agreement  is  valid,
the names of three sons are mentioned in Agreement of Sale, out of whom  the
agreement is executed by defendant Nos. 1 and 2 and they assured  that  they
would get the signatures of the 3rd brother namely, Srinivasa Rao  and  also
the remaining 3  sisters.  At  the  time  of  execution  of  this  agreement
signatures were not obtained. Therefore, the agreement is  not  executed  by
all the co-sharers of the property which fact is evident from  the  recitals
of the document itself. Hence, the plaintiffs are not entitled for  specific
performance decree.
This vital factual and legal aspect has been ignored  by
both the First Appellate Court and the Second  Appellate  Court.
Therefore,
the impugned judgment is vitiated both on facts and  law.  Accordingly,  the
point No. 1 is answered in favour of the defendants.

Answer to Point No. 2

31.   The  second  point  is  also  required  to  be  answered  against  the
plaintiffs for the following reasons:-

As could be seen from the Agreement of Sale document marked  as  Ex.-A1  and
the pleadings of the parties payment of sale consideration was agreed to  be
paid to the defendant Nos. 1 and 2 as per following  terms of the  agreement
:-
“…
(i) an amount of Rs.1,70,000/- shall be paid by Vendee to Vendors  within
10 days from the day of vacating the tenants  in  the  property,
(ii)  Rs.
50,000/-  shall  be  paid  on  30.11.1993.,
 (iii)   the   remaining   sale
consideration of Rs.1,50,000/- shall be paid on or before 30.3.1994.”


32.   It is an  undisputed  fact  that  except  payment  of  Rs.5,000/-  and
Rs.10,000/- paid by the purchaser-plaintiff No.1 to  the  defendant  Nos.  1
and 2 according to the Agreement of Sale, the remaining installment i.e.  an
amount of Rs.1,70,000/- which was to be paid to the Vendors within  10  days
from the day of vacating the tenants in the  property  was  not  paid.
 Even
assuming that the amount could have been paid had the  tenants  vacated  the
schedule property then the remaining part of the sale  consideration  agreed
to be paid as notified  under  clauses  (ii)  and  (iii)  as  per  aforesaid
paragraph of the Agreement of Sale undisputedly not paid  to  the  defendant
Nos. 1 and 2.
Therefore, there is breach of contract  on  the  part  of  the
plaintiffs as could be  seen  from  the  agreement  of  sale  regarding  the
payment  of  part  sale  consideration  amount. 
 For  this   reason   itself
plaintiffs are not entitled for a decree of specific performance.

Answer to the Point Nos. 3

33.   Point No. 3 is also answered in  favour  of  the  defendants  for  the
following reasons:-
It is an undisputed fact that the plaintiffs have not approached  the  Trial
Court with clean hands.
 It is evident from the pleadings  of  the  Agreement
of Sale which is  produced  for  the  decree  for  specific  performance  of
Agreement of Sale as the plaintiffs did not obtain  the  signatures  of  all
the co-sharers of the property namely, the mother  of  the  defendants,  the
third brother and 3 sisters.
Therefore, the agreement is not enforceable  in
law as the persons who have  executed  the  sale  deed,  did  not  have  the
absolute title of the property.
Apart from the said legal lacuna, the  terms
and conditions of the Agreement of Sale for payment  of  sale  consideration
agreed to be paid by the first plaintiff in installments within  the  period
stipulated as indicated above were not paid.
The First Appellate  Court  and
the High Court have not exercised their power under  Section  20(2)  of  the
Specific Relief Act which by itself  is  the  substantial  question  of  law
which fell for consideration before the High Court as  the  First  Appellate
Court failed to consider this important aspect of the matter  and  exercised
its power while determining the rights of the party,  particularly,  in  the
light of the unenforceable  contract  between  the  plaintiffs  against  the
defendants as all of them are not parties to the Agreement of Sale  document
 (Ex.-A1) and the executants viz. defendant Nos. 1 and 2 have  not  acquired
absolute  title  to  the  property  in  question.  Therefore,  the  impugned
judgment is vitiated and liable to be set aside.

Answer to Point No. 4

34.   Though we have answered the questions of law framed in this appeal  in
favour of the defendants, the learned counsel for the defendants during  the
course of arguments, has offered some monetary  compensation  in  favour  of
the plaintiffs if this Court set aside the impugned judgment and  decree  of
specific performance granted in their  favour.  Though,  the  defendants  on
merits have succeeded in this case for the reasons recorded  by  us  on  the
substantial questions of law that have been framed by us on appreciation  of
facts and legal evidence on record, having regard to the peculiar facts  and
circumstances of the case particularly, the execution of Agreement of  Sale,
Ex. A-1 by defendant  Nos.  1  and  2  on  3.5.1993,  after  receiving  part
consideration of  Rs.15,000/-,  and  the  submission  made  by  the  learned
counsel for the defendants, it would be just and proper for  this  Court  to
award a sum of Rs.6,00,000/- by  lump-sum  amount  of  compensation  to  the
plaintiffs within 3 months from the date  of  receipt  of  a  copy  of  this
judgment as provided under Section 22 of the Specific Relief Act.

35.   Since, we have answered point Nos. 1 to 4 in favour of the  defendants
and against the plaintiffs, the  appeal  of  the  defendants  must  succeed.
Accordingly, the impugned judgment and decree passed by the  High  Court  in
affirming the judgment and decree of  the  First  Appellate  Court,  is  set
aside. The  judgment  and  decree  of  the  Trial  Court  is  restored  with
modification that the defendants shall pay a sum  of  Rs.6,00,000/-  to  the
plaintiffs as lump-sum  compensation  within  3  months  from  the  date  of
receipt of copy of this order. The appeal  is  allowed  in  the  above  said
terms. No costs.
  

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41856


                                                         REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 7835 OF 2014
                  (Arising out of SLP(C) NO. 24653 OF 2012)


 PEMMADA PRABHAKAR & ORS.               …APPELLANTS

                                     Vs.

             YOUNGMEN’S VYSYA ASSOCIATION & ORS.    …RESPONDENTS





                               J U D G M E N T



V.GOPALA GOWDA, J.

Leave granted.

2.    This appeal has been filed against the judgment and final order  dated
04.11.2011 passed in the Second Appeal No. 815 of 2011 by the High Court  of
Judicature of Andhra Pradesh  at  Hyderabad,  whereby  the  High  Court  has
dismissed the Second Appeal.

3.    Certain relevant facts are stated for the purpose of appreciating  the
rival legal contentions urged on behalf  of  the  parties  with  a  view  to
examine the correctness of the findings and reasons  recorded  by  the  High
Court in the impugned judgment.

For the sake of brevity and convenience, the parties  are  referred  to   in
this judgment as per  the  rank  assigned  to  them  in  the  original  suit
proceedings.

4.    The property bearing Door No. 20/42-1-9 with land measuring about 657-
1/3rd sq. yards situated to the  west  of  Vallabhai  Street,  Cinema  Road,
Kakinada (hereinafter, referred to as the ‘suit schedule property’) was  the
self acquired property of one Pemmada Venkateswara Rao.  He  died  intestate
and survived by wife Syama Sundari, three  sons  and  three  daughters  (the
defendant Nos. 1 to 6).

5.     The  plaintiffs-the  Youngmen’s  Vyasa  Association  (who   are   the
respondents  herein),  instituted  O.S.No.267  of  1995  for  the   specific
performance of Agreement of Sale dated  03.05.1993  against  the  defendants
(the appellants herein). The plaintiffs alleged that the  defendant  Nos.  1
and 2, who are managing the suit schedule property, agreed to sell the  same
to plaintiff No. 1.

6.    According to the plaintiffs, the defendant Nos. 1 and 2  executed  the
Agreement of Sale dated 03.05.1993 in favour of plaintiff No. 1 agreeing  to
sell the suit schedule property at the rate of Rs.575/- per  sq.  yard,  the
total consideration of which was to be fixed later after taking  the  actual
measurement. Later on, the total land value was fixed at  Rs.3,77,967/-  for
657-1/3 sq. yards. The defendant Nos. 1 and 2  received  advance  amount  of
Rs.5000/- and Rs.10,000/- also. Under the  Agreement  the  plaintiff  No.  1
agreed to pay Rs.1,70,000/- to the defendants within 10 days  from  the  day
of vacating the tenants from the suit schedule property. Rs.50,000/- was  to
be paid on 30.11.1993 and that the balance amount of  Rs.1,50,000/-  was  to
be paid by 30.3.1994. The defendant Nos. 1 and  2  agreed  that  they  would
obtain the signatures of their  3rd  brother-the  defendant       No.  3  by
9.05.1993. Defendant Nos. 7 and 8 are the tenants in the sheds  situated  in
the suit schedule property. The  defendant  Nos.1  &  2  stated  that  their
sisters were married long ago therefore, they had no interest  in  the  suit
schedule property, and that they would also get the sisters’  signatures  on
the agreement.

7.    The 2nd Addl. Senior Civil Judge, Kakinada (the Trial  Court)  by  his
judgment dated 12.7.2006 dismissed O.S. No 267/95, in so  far  as  the  main
relief for the specific performance of sale is concerned.  The  Trial  Court
has directed the defendants to refund Rs.5000/- with interest  at  the  rate
of 12% p.a. from 5.03.1993 till the  date  of  realization  and  Rs.10,000/-
with the interest  rate  at  12%  p.a.  from  6.08.1993  till  the  date  of
realization.

8.    The Trial Court after considering the oral  and  documentary  evidence
on record, observed that as the suit schedule property is  adjacent  to  the
plaintiff’s property, taking advantage  of  the  financial  difficulties  of
defendant Nos. 1 and 2, the plaintiffs attempted to grab the  suit  schedule
property and dragged the defendants to the court of law.

9.    The Trial Court further held that the Agreement of Sale was not  valid
as the defendant Nos.3 to 6 and their mother did not give  consent  to  sell
the suit schedule property to the plaintiffs. Accordingly, the  main  relief
for specific performance was rejected and the defendants  were  directed  to
refund the amount of advance  sale  consideration  to  the  plaintiffs  with
interest at the rate of 12% p.a.

10.   Being aggrieved by the judgment and  decree  dated  12.7.2006  of  the
Trial Court, the plaintiffs filed an appeal  being  A.S.  No.  269  of  2006
before the Court of 3rd  Additional  District  Judge,  Kakinada,  the  First
Appellate Court.

11.   On 28.04.2010 the First Appellate Court  allowed  the  appeal  partly,
directing the defendant Nos. 1, 2, 4 and 5 to execute  the  registered  sale
deed in favour of the plaintiff’s Association  in  respect  of  their  1/6th
share each i.e. 4/6th share by receiving  their  respective  shares  of  the
balance sale consideration from the plaintiffs and modified the  decree  for
specific performance of Agreement of Sale.

12.   The First Appellate Court vide its order  dated  28.4.2010  held  that
the transaction between the parties is real sale transaction  and  not  mere
money transaction and the sale agreement is valid and  binding  between  the
parties and the plaintiffs  are  entitled  for  the  first  main  relief  of
specific performance and directed defendant Nos. 1, 2, 4 and  5  to  execute
sale deed in respect of their 4 shares of the suit schedule  property  after
receiving proportionate sale price.

13.   Being aggrieved by the judgment and decree  dated  28.04.2010  of  the
First Appellate Court, the defendants preferred  Second  Appeal  being  S.A.
No. 815 of 2011 before the High Court of Judicature  of  Andhra  Pradesh  at
Hyderabad  whereby the High Court vide order dated 4.11.2011  dismissed  the
Second Appeal which is impugned in this appeal.

14.   The High Court held that the approach of the First Appellate Court  in
granting the relief of specific performance directing  defendants  1,  2,  4
and 5 to execute sale deed in respect of their shares, i.e. 4/6th  share  of
the suit schedule property in favour of the plaintiffs on receipt  of  their
respective balance consideration which stood deposited in the court,  cannot
be faulted with.

15.   It was further  held  by  the  High  Court  that  the  mother  of  the
defendants was alive when the suit was instituted in 1995 and  she  died  on
29.09.2005. She had one share and after her death,  the  property  would  be
divided into 6  shares  and  the  agreement  was  held  as  binding  on  the
defendants 1, 2, 4 and 5. Therefore, the High Court upheld the  decision  of
the First Appellate Court and moulded the relief in the  above  terms  while
granting decree  of  specific  performance  of  the  Agreement  of  Sale  by
executing the sale deed of their share in the  property  in  favour  of  the
plaintiffs.

16.   The following submissions were made by the learned  counsel  for  both
the parties in support of their claim and counter claim.

17.   On behalf of the defendant Nos.1 &  2,  it  is  contended  that  their
father Pemmada Venkateswara Rao was engaged in lathe  works  which  incurred
heavy loss  and  he  was  allegedly  indebted  to  various  creditors.  They
approached one Murali Krishna (who had acquaintance with them) who  was  the
Secretary  of  the  plaintiff  Association  to  borrow  some  money.  Taking
advantage of their  situation,  the  Secretary  and  the  President  of  the
Plaintiff Association obtained the signatures of defendant Nos. 1 and  2  on
a blank sheet of paper and gave Rs.5000/- on  3.5.1993  and  Rs.10,000/-  on
6.8.1993 to them.

18.   It was further contended by the learned counsel  that  the  defendants
never intended to sell the suit schedule property and the  transaction  with
the plaintiffs Association was only money transaction and  was  not  a  sale
transaction with it. A separate written  statement  was  filed  by  the  4th
defendant to the same effect.

19.   It was further contended by defendant Nos. 1 to 6  that  even  on  the
date of execution of Agreement of Sale their  mother  was  very  much  alive
and, therefore in the absence of execution of Agreement of Sale by  all  the
seven co-sharers of  the  suit  schedule  property  the  suit  for  specific
performance does not lie. The learned  counsel  for  the  defendants  placed
reliance on the decisions of Andhra Pradesh High Court  and  this  Court  in
the cases of Kommisetti Venkatasubbayya v. Karamestti  Venkateswarlu[1]  and
Lourdu Mari David & Ors. v. Louis Chinnaya Arogiaswamy & Ors.[2] in  support
of their claim.

20.   Further,  they  placed  reliance  upon  the  case  of  this  Court  in
Rameshwar & Ors. v. Jot Ram & Anr.[3]. In the said authority   it  has  been
held as follows:

“9…First, its bearing on the right of action, second, on the nature  of  the
relief and third, on its impotence to create or destroy substantive  rights.
Where the nature of the relief, as originally sought,  has  become  obsolete
or unserviceable or a new  form  of  relief  will  be  more  efficacious  on
account of developments subsequent to the suit or even during the  appellate
stage, it is but fair that the relief is moulded, varied or reshaped in  the
light  of  updated  facts.  Patterson  illustrates  this  position.  It   is
important that the party claiming the relief or change of relief  must  have
the same right from which either the first or the modified remedy may  flow.
Subsequent events in the course  of  the  case  cannot  be  constitutive  of
substantive rights enforceable in that very litigation except  in  a  narrow
category (later spelt out) but may influence the equitable  jurisdiction  to
mould reliefs. Conversely, where rights have  already  vested  in  a  party,
they cannot be nullified or negated by subsequent events  save  where  there
is a change in the law and it is made applicable at any  stage.  Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri falls in  this  category.  Courts  of
justice may, when the compelling equities  of  a  case  oblige  them,  shape
reliefs — cannot deny rights — to make them justly relevant in  the  updated
circumstances. Where the relief is discretionary, courts may  exercise  this
jurisdiction to avoid injustice. Likewise, where the  right  to  the  remedy
depends, under the statute itself, on the presence  or  absence  of  certain
basic facts at the time the relief is to be ultimately granted,  the  Court,
even in appeal, can take note of such  supervening  facts  with  fundamental
impact…”
                               (Emphasis supplied)


21.    The High court held that defendants pleaded falsehood at the time  of
execution of the  Agreement  of  Sale  by  stating  that  their  mother  had
predeceased their father. The agreement and the endorsement thereon made  by
defendant Nos.1 and 2 had swayed discretion of the High Court in  favour  of
the plaintiffs which is  an  Association  engaged  in  the  welfare  of  the
community.

22.   The High Court further held that the suit schedule  property  was  not
purchased for unlawful gain of an individual and that  the  First  Appellate
Court considered the entire evidence  on  record  and  exercised  its  sound
jurisdiction and modified the judgment of the  Trial  Court  by  granting  a
decree of specific performance as per the terms stipulated therein.

23.   The High Court dismissed the second appeal without  adverting  to  the
substantial questions of law that were framed  in the second appeal  at  the
admission stage itself stating  that there is  no  substantial  question  of
law  for  its  adjudication.  The  First  Appellate  Court  and  the  Second
Appellate Court committed serious error in law in not noticing the  relevant
important findings of fact recorded by the Trial Court  on  the  contentious
issues on proper appreciation of pleadings  and   evidence  on  record  with
reference to the legal submission made on behalf of the parties.  The  Trial
Court after proper appreciation of evidence on  record,  particularly,  Ex.-
A1, the Agreement of Sale, has held that it is not a valid agreement and  no
rights can flow from it in favour of the plaintiffs  in  the  light  of  the
fact that the signatures  of  defendant  Nos.  1  and  2  were  obtained  on
different dates on blank papers as they were in financial  crisis  and  that
fact is proved by producing Exs.-B1 to  B-8 to show that the  entire  family
(defendant Nos. 1 to 6) were in financial crisis and  they  were  forced  to
pay the debts to their creditors. Therefore, they were  in  urgent  need  of
money and they approached the PW-1 for  financial  help,  who  obtained  the
signatures of defendant Nos. 1 and  2  on  blank  paper  and  the  same  was
fabricated as a receipt. The said receipt was not signed by  defendant  Nos.
3 to 6. The mother of the defendant Nos. 1 and 2 is one  of  the  co-sharers
of the suit schedule property as a class-I legal heir  to  succeed   to  the
intestate property  of her deceased husband, which  was  his  self  acquired
property left by him, as he had purchased the same vide  Sale-Deed  document
No. 5174/1970 dated 24.11.1970  from  his  vendors.  In  fact,  there  is  a
reference made  in  this  regard  in  the  Agreement  of  Sale  executed  by
defendant Nos.  1  and  2  to  the  effect  that  after  demise  of  Pemmada
Venkateswara Rao, the father  of   defendant  Nos.  1  to  6,  the  property
devolved upon them jointly and they are enjoying with  absolute  rights.  As
per Section 8 of the  Hindu  Succession  Act,  1956  the  general  rules  of
succession  would  be  applicable   in  the  case  of  a  male  Hindu  dying
intestate, relevant portion of which reads as under :-

 “8. General rules of succession in the case of males.- The  property  of  a
male Hindu dying intestate shall devolve  according  to  the  provisions  of
this Chapter-

Firstly, upon the heirs, being the relatives specified in  class  I  of  the
Schedule;

XXX         XXX        XXX”

In the Schedule of the said Act, class I heirs  are  son,  daughter,  widow,
mother and others. In view of the enumeration of the class I  heirs  in  the
Schedule, the mother and sisters of the defendant Nos. 1 and 2 are also  co-
sharers   of  the  property  left  intestate   by   the   deceased   Pemmada
Venkateswara Rao. As  could  be  seen  from  the  Agreement  of  Sale-Ex.-A1
undisputedly, the third brother and 3 sisters, (defendant Nos. 3 to  6)  and
their mother have not executed the  Agreement  of  Sale  in  favour  of  the
plaintiffs. Therefore, the same is not enforceable under Section 17  of  the
Specific Relief Act, 1963.  The  mother  lived  upto  September,  2005,  the
aforesaid legal heirs of deceased Pemmada Venkateswara Rao got equal  shares
in the suit schedule property.

24.   It is further contended on behalf of the  defendants  that  the  First
Appellate Court and the High Court have failed in  not  applying  the  legal
principle laid down by this Court in the case of Lourdu Mari  David  &  Ors.
(supra), wherein this Court held that the party who seeks to  avail  of  the
equitable jurisdiction of a court  and  specific  performance  decree  being
equitable relief must come to the court with clean hands.  In  other  words,
the party who makes false allegations against the defendants does  not  come
with clean hands and therefore, it is not entitled to the  equitable  relief
of specific performance decree from the court.

25.    Another legal contention urged on behalf of the  defendants  is  that
the High Court has erroneously come to the conclusion on facts and  evidence
on record and it has affirmed the divergent findings  of  fact  recorded  by
the First Appellate Court without examining   and answering the  substantial
questions of law  framed  in  the  Second  Appeal  and  it  has  erroneously
dismissed the appeal  holding  that  the  suit  schedule  property  was  not
purchased by the plaintiffs for unlawful gain of  an  individual.  The  said
property is probably purchased by the plaintiffs to put it to  use  for  the
purpose of the community.  The High  Court  without  considering  the  legal
submissions urged on behalf of the defendants adjudicated the rights of  the
parties ignoring certain facts, evidence on  record  and  legal  contentions
urged.  It has erroneously held that the plaintiffs  are  entitled  for  the
relief  of  specific  performance  while  the  Agreement  of  Sale  is   not
enforceable under Section 17 of the Specific Relief Act, 1963,  in  view  of
the fact that all the legal heirs of the deceased Pemmada  Venkateswara  Rao
are not parties to the Agreement of Sale and the defendant Nos. 1 and  2  do
not have absolute title  and right upon the entire suit  schedule  property.
Even assuming for the sake of argument that the Agreement of Sale is  valid,
the same could  not  have  been  enforced  against  the  defendants  as  the
plaintiffs have committed breach of the contract as agreed upon by  them  as
per clause 2 of the penultimate paragraph Nos. 2 and 3 of the  Agreement  of
Sale. The plaintiffs gave a sum of Rs.5,000/- & Rs. 10,000/- as  an  advance
amount towards sale consideration  and  the  remaining  sale  consideration,
i.e.(i)an amount of Rs.1,70,000/- which was to be paid within 10  days  from
the day of vacating the tenants in the  property,  (ii)  Rs.50,000/-  to  be
paid on 30.11.1993 and the remaining sale consideration of Rs.1,50,000/-  to
be paid on or before 30.3.1994 was not paid to the defendant Nos. 1 and 2.

26.   It is also contended by the learned counsel that the  First  Appellate
Court and the Second Appellate Court have not exercised their  discretionary
powers as required under Section  20(2)  of  the  Specific  Relief  Act  for
decreeing the specific  performance   in  favour  of  the  plaintiffs,  even
though,  the defendants  have  made out a case before the Trial  Court  that
the plaintiffs are not entitled for the  decree  for  specific  performance.
Therefore,  the                   First  Appellate  Court  and  the   Second
Appellate Court have gravely erred in  not  exercising  their  discretionary
power under Section 20(2) of the Specific Relief Act at the time of  passing
decree for specific performance in favour of the plaintiffs,  which  is  not
only erroneous in law but also vitiated in law and therefore,  the  same  is
liable to be set aside.

27.   On the contrary, the learned counsel for          the  plaintiffs  has
sought  to  justify  the  impugned  judgment  contending  that  the   Second
Appellate Court in exercise of its appellate  jurisdiction  after  examining
the facts and evidence on record has held that the substantial questions  of
law framed by  the  defendants  in  the  second  appeal,  on  the  divergent
findings of fact recorded by the First  Appellate  Court  would  not  arise.
Decreeing the suit by the First Appellate Court as prayed by the  plaintiffs
is correct as it has set aside the decree of the Trial Court. It is  further
urged that the High Court is right  in  dismissing  the  second  appeal  and
therefore, the same does not call for interference by this  Court  as  there
is no substantial question of  law  which  would  arise  for  consideration.
Therefore, the learned counsel  for  the  respondent-plaintiffs  prayed  for
dismissal of this civil appeal as the same is devoid of merit.

28.   With reference to the above  said  rival  contentions,  the  following
points would arise for our consideration :-
Whether the plaintiffs are entitled          for  the  decree  for  specific
performance  of the Agreement of Sale  (Ex.-A1)          when  Agreement  of
Sale entered between           the plaintiffs and defendant  Nos.  1  and  2
who do not have absolute title to the property?

Whether in the absence of execution of the Agreement of Sale-Ex.-A1  by  the
other defendants/co-sharers is it valid, even  assuming  that  Agreement  of
Sale is valid, there is breach of terms and conditions of  the  Contract  on
the part of the plaintiffs in not paying the sale  consideration  amount  of
Rs. 1,70,000/- within  10  days  from  the  day  of  vacating  the  tenants,
Rs.50,000/- on 30.11.1993 and  an  amount  of  Rs.1,50,000/-  on  or  before
30.3.1994 to the defendants  and  plaintiffs  are  entitled  for  decree  of
specific performance of the Agreement of Sale?

Whether the plaintiffs are entitled for  discretionary  relief  of  specific
performance under Section 20(2) of the Specific Relief Act when it  has  not
approached the court with clean hands?

What relief?

  Answer to Point No. 1

29.   It is an undisputed fact that  the  suit  schedule  property  is  self
acquired property by  late           Pemmada  Venkateswara  Rao  as  he  had
purchased the      said property vide Sale-Deed  Document  No.5174  of  1970
dated 24.11.1970 from his vendors. It is also an undisputed  fact  that  the
said property is intestate property. He is survived by his wife, 3 sons  and
3 daughters. The said property devolved upon them in view of  Section  8  of
Chapter 2 of the Hindu Succession Act as the defendants are  class  I  legal
heirs in the suit schedule property. Undisputedly, the  Agreement  of  Sale-
Ex.-A1 is executed only by defendant Nos. 1 and 2. The 3rd  son, mother  and
3  sisters  who have got equal shares in the property have not executed  the
Agreement of Sale. In view of the matter, the Agreement of Sale executed  by
defendant Nos. 1 and 2 who have no absolute right to  property  in  question
cannot confer any right whatsoever upon the plaintiffs for grant  of  decree
of specific performance of Agreement of  Sale  in  their  favour.  The  said
agreement is not enforceable in law in view of Section 17  of  the  Specific
Relief Act in view of right accrued in favour  of  defendant  Nos.  3  to  6
under Section 8 of the Hindu Succession Act. The provisions  of  Section  17
of the Specific Relief Act  in  categorical  term  expressly  state  that  a
Contract to sell or  let  any  immovable  property  cannot  be  specifically
enforced in favour of a vendor or lessor who does not  have  absolute  title
and right upon the party. It is worthwhile to  extract  Section  17  of  the
Specific Relief Act,1963 here :-
“17.-Contract to sell  or  let  property  by  one  who  has  no  title,  not
specifically enforceable.- A contract to sell or let any immovable  property
cannot be specifically enforced in favour of a vendor or lessor;

(a) who, knowing not to have any title to the property,  has  contracted  to
sell or let the property

(b) who, though he entered into the contract believing that he  had  a  good
title to the property, cannot at the time fixed by the  parties  or  by  the
court for the completion  of the sale or  letting,  give  the  purchaser  or
lessee a title free from reasonable doubt.”

In view of  the  aforesaid  provisions  of  the  Specific  Relief  Act,  the
Agreement of Sale entered between the plaintiffs and some of the  co-sharers
who do not have the absolute title to the  suit  schedule  property  is  not
enforceable in law.  This  aspect  of  the  matter  has  not  been  properly
appreciated and considered by both the First Appellate Court and the  Second
Appellate Court. Therefore, the impugned judgment is vitiated in law.

30.   Even assuming for the sake of argument that the  agreement  is  valid,
the names of three sons are mentioned in Agreement of Sale, out of whom  the
agreement is executed by defendant Nos. 1 and 2 and they assured  that  they
would get the signatures of the 3rd brother namely, Srinivasa Rao  and  also
the remaining 3  sisters.  At  the  time  of  execution  of  this  agreement
signatures were not obtained. Therefore, the agreement is  not  executed  by
all the co-sharers of the property which fact is evident from  the  recitals
of the document itself. Hence, the plaintiffs are not entitled for  specific
performance decree. This vital factual and legal aspect has been ignored  by
both the First Appellate Court and the Second  Appellate  Court.  Therefore,
the impugned judgment is vitiated both on facts and  law.  Accordingly,  the
point No. 1 is answered in favour of the defendants.

Answer to Point No. 2

31.   The  second  point  is  also  required  to  be  answered  against  the
plaintiffs for the following reasons:-

As could be seen from the Agreement of Sale document marked  as  Ex.-A1  and
the pleadings of the parties payment of sale consideration was agreed to  be
paid to the defendant Nos. 1 and 2 as per following  terms of the  agreement
:-
“… (i) an amount of Rs.1,70,000/- shall be paid by Vendee to Vendors  within
10 days from the day of vacating the tenants  in  the  property,   (ii)  Rs.
50,000/-  shall  be  paid  on  30.11.1993.,   (iii)   the   remaining   sale
consideration of Rs.1,50,000/- shall be paid on or before 30.3.1994.”


32.   It is an  undisputed  fact  that  except  payment  of  Rs.5,000/-  and
Rs.10,000/- paid by the purchaser-plaintiff No.1 to  the  defendant  Nos.  1
and 2 according to the Agreement of Sale, the remaining installment i.e.  an
amount of Rs.1,70,000/- which was to be paid to the Vendors within  10  days
from the day of vacating the tenants in the  property  was  not  paid.  Even
assuming that the amount could have been paid had the  tenants  vacated  the
schedule property then the remaining part of the sale  consideration  agreed
to be paid as notified  under  clauses  (ii)  and  (iii)  as  per  aforesaid
paragraph of the Agreement of Sale undisputedly not paid  to  the  defendant
Nos. 1 and 2. Therefore, there is breach of contract  on  the  part  of  the
plaintiffs as could be  seen  from  the  agreement  of  sale  regarding  the
payment  of  part  sale  consideration  amount.  For  this   reason   itself
plaintiffs are not entitled for a decree of specific performance.

Answer to the Point Nos. 3

33.   Point No. 3 is also answered in  favour  of  the  defendants  for  the
following reasons:-
It is an undisputed fact that the plaintiffs have not approached  the  Trial
Court with clean hands. It is evident from the pleadings  of  the  Agreement
of Sale which is  produced  for  the  decree  for  specific  performance  of
Agreement of Sale as the plaintiffs did not obtain  the  signatures  of  all
the co-sharers of the property namely, the mother  of  the  defendants,  the
third brother and 3 sisters. Therefore, the agreement is not enforceable  in
law as the persons who have  executed  the  sale  deed,  did  not  have  the
absolute title of the property. Apart from the said legal lacuna, the  terms
and conditions of the Agreement of Sale for payment  of  sale  consideration
agreed to be paid by the first plaintiff in installments within  the  period
stipulated as indicated above were not paid. The First Appellate  Court  and
the High Court have not exercised their power under  Section  20(2)  of  the
Specific Relief Act which by itself  is  the  substantial  question  of  law
which fell for consideration before the High Court as  the  First  Appellate
Court failed to consider this important aspect of the matter  and  exercised
its power while determining the rights of the party,  particularly,  in  the
light of the unenforceable  contract  between  the  plaintiffs  against  the
defendants as all of them are not parties to the Agreement of Sale  document
 (Ex.-A1) and the executants viz. defendant Nos. 1 and 2 have  not  acquired
absolute  title  to  the  property  in  question.  Therefore,  the  impugned
judgment is vitiated and liable to be set aside.

Answer to Point No. 4

34.   Though we have answered the questions of law framed in this appeal  in
favour of the defendants, the learned counsel for the defendants during  the
course of arguments, has offered some monetary  compensation  in  favour  of
the plaintiffs if this Court set aside the impugned judgment and  decree  of
specific performance granted in their  favour.  Though,  the  defendants  on
merits have succeeded in this case for the reasons recorded  by  us  on  the
substantial questions of law that have been framed by us on appreciation  of
facts and legal evidence on record, having regard to the peculiar facts  and
circumstances of the case particularly, the execution of Agreement of  Sale,
Ex. A-1 by defendant  Nos.  1  and  2  on  3.5.1993,  after  receiving  part
consideration of  Rs.15,000/-,  and  the  submission  made  by  the  learned
counsel for the defendants, it would be just and proper for  this  Court  to
award a sum of Rs.6,00,000/- by  lump-sum  amount  of  compensation  to  the
plaintiffs within 3 months from the date  of  receipt  of  a  copy  of  this
judgment as provided under Section 22 of the Specific Relief Act.

35.   Since, we have answered point Nos. 1 to 4 in favour of the  defendants
and against the plaintiffs, the  appeal  of  the  defendants  must  succeed.
Accordingly, the impugned judgment and decree passed by the  High  Court  in
affirming the judgment and decree of  the  First  Appellate  Court,  is  set
aside. The  judgment  and  decree  of  the  Trial  Court  is  restored  with
modification that the defendants shall pay a sum  of  Rs.6,00,000/-  to  the
plaintiffs as lump-sum  compensation  within  3  months  from  the  date  of
receipt of copy of this order. The appeal  is  allowed  in  the  above  said
terms. No costs.



                                                ……………………………………………………………………J.
                                      [DIPAK MISRA]



                                                ……………………………………………………………………J.
                           [V. GOPALA GOWDA]

New Delhi,
August 20,2014
-----------------------
[1]     A.I.R. 197?

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