Assumptions :-
Any finding given on assumption is liable to be set aside
when he had no knowledge of agreement entered into between the defendant No.1 and defendant No.2, that aspect required appropriate consideration.
However, the Courts below have on the contrary concluded that the defendants No.1 and 2 being of the same village, the defendant No.2 would have knowledge of the agreement entered into by the defendant No.1 in favour of the plaintiff.
Such conclusion is only an assumption and there is no evidence with regard to the knowledge of defendant No.2 even if he was from the same village.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 760 OF 2020
(Arising out of SLP (Civil) No.10949 of 2019)
Sukhwinder Singh .…Appellant(s)
Versus
Jagroop Singh & Anr. …. Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
Leave granted.
2. The appellant herein was the defendant No.2 in Case
No.915 of 16.11.2004/17.04.2015. The respondent No.1
herein was the plaintiff in the suit. The respondent No.2
herein was the defendant No.1 therein. The parties will
be referred to in the rank assigned to them in the suit for
the purpose of convenience and clarity. The plaintiff
instituted the suit seeking for decree of possession by
way of specific performance of the Agreement of Sale
Page 1 of 17
dated 03.01.2004 executed by defendant No.1 in favour
of the plaintiff agreeing to sell the land measuring 3
Kanals 4 Marlas comprised of Khewat No.36/35
Khatauni No.91, Rect. No.63 Killa No.2/2 (34), situated
in village Dulla Singh Wala, Tehsil and District Ferozpur.
3. The case of the plaintiff was that the property was
agreed to be sold for the total consideration of
Rs.1,40,000/. Towards the said amount the plaintiff
had paid the sum of Rs.69,500/ as earnest money. The
plaintiff had further prayed in the suit to set aside the
Sale Deed dated 11.06.2004 executed by the defendant
No.1 in favour of the defendant No.2 since according to
the plaintiff the same was null and void and did not bind
the plaintiff. In the alternative, the plaintiff had sought
for a decree to recover a sum of Rs.1,40,000/ of which
Rs.69,500/ had been paid as earnest money while the
remaining sum of Rs.70,500/ was sought as damages.
The defendants at the first instance had failed to appear
and contest the suit. Accordingly, the Trial Court by its
judgment dated 14.06.2007 had decreed the suit.
Page 2 of 17
4. Though the defendant No.1 did not make out any
grievance thereafter, the defendant No.2 who was the
purchaser of the property filed a petition under Order 9
Rule 13 of the Civil Procedure Code in Misc. Application
No.46 of 23.02.2011 seeking that the ex parte decree be
set aside and the suit be restored for consideration.
Since the said petition was filed with delay, an
application under Section 5 of the Limitation Act was
filed seeking condonation of delay. The Trial Court
having considered the same through its decision dated
07.08.2012 dismissed the application seeking
condonation of delay, consequently the petition under
Order 9 Rule 13 of Civil Procedure Code was also
dismissed as barred by Limitation. The defendant No.2
claiming to be aggrieved preferred Civil Revision
No.5332/2012 (O&M) before the High Court of Punjab
and Haryana at Chandigarh. In the said Revision
Petition filed under Section 115 of Civil Procedure Code
read with Article 227 of the Constitution of India, the
High Court had concurred with the decision of the Trial
Court and dismissed the Revision Petition through its
Page 3 of 17
decision dated 12.09.2012. The defendant No.2 had
carried the same before this Court in Civil Appeal
No.1406/2015. This Court on taking into consideration
that the defendant No.2 who was the appellant in the
said Civil Appeal is to be provided an opportunity to
contest the suit, had allowed the appeal by order dated
02.02.2015 subject to payment of Rs.1,50,000/ as cost.
Leave to file the written statement in the suit was also
granted. Pursuant thereto the defendant No.2 having
paid the cost, filed the written statement and the suit was
proceeded in accordance with law. Pursuant thereto the
impugned judgments are passed which are assailed
herein.
5. Mr. Rahul Gupta, the learned counsel for the
appellant contends that the defendant No.2 is the
bonafide purchaser without notice of the alleged
agreement between the plaintiff and defendant No.1. He
contends that the entire transaction was entered into in a
bonafide manner and the Sale Deed having been
registered, the defendant No.2 was put in possession of
Page 4 of 17
the suit schedule property as far back as on 11.06.2004.
Nearly 16 years have passed by and the defendant No.2
has carried out considerable improvement to the property
and is residing in the house constructed therein. In that
view, at this juncture if the specific performance as
sought by the plaintiff is ordered, greater hardship will be
caused to the defendant No.2. It is pointed out that the
plaintiff had made the alternate prayer for refund of the
earnest money and damages which if considered would
serve the ends of justice. The learned counsel contends
that even to secure leave to file the written statement and
defend the suit the defendant No.2 has already parted
with the sum of Rs.1,50,000/ in addition to the sale
consideration that was paid to defendant No.1. In that
circumstance, the compensation if any, is a matter to be
considered by this Court as the grant of specific
performance is not a rule and this Court has the
discretion to decline specific performance in view of the
provisions contained under Section 20 of the Specific
Relief Act. It is also his contention that though the
defendant No.1 has not contested the suit, there was an
Page 5 of 17
obligation on the plaintiff to establish his case which has
not been effectively done by proving the readiness and
willingness. The learned counsel would contend that
though all the three Courts have held against the
defendants, the nonconsideration of the relevant facts
would amount to a concurrent error committed by the
Courts. It is, therefore, contended that the judgment and
decree be set aside and the right accrued to the
defendant No.2 under the Sale Deed dated 11.06.2004 be
protected.
6. Shri Mahendra Kumar, learned counsel for the
plaintiff/respondent No.1 would seek to sustain the
judgment passed by the Courts below. It is contended
that all the three Courts have concurrently held against
the defendants and the reversal of the same is not
warranted. It is his case that the plaintiff had entered
into an agreement of sale and had also paid the part sale
consideration of Rs.69,500/. The suit at the first
instance was decreed on 14.06.2007 and the plaintiff had
pursuant to the decree deposited the balance sale
Page 6 of 17
consideration of Rs.70,500/ on 03.08.2007. The learned
counsel contends that though the date for execution of
the Sale Deed was stipulated as 15.06.2004, the Sale
Deed was executed by the defendant No.1 in favour of
defendant No.2 on 11.06.2004 so as to defeat the right of
the plaintiff. It is contended that the defendant had
connived with each other in that regard and, therefore,
the same cannot be considered as a bonafide transaction.
The learned counsel further contends that though an
alternate prayer was made in the suit for the payment of
damages as indicated therein, the property in question is
highly valuable and as such the plaintiff should have the
benefit of the appreciation as well. It is, therefore,
contended that the appeal is liable to be dismissed.
7. In the above background, it is seen that the
contention of the plaintiff in the suit was that the
defendant No.1 had agreed to sell the suit schedule
property through the Agreement dated 03.01.2004 and
the plaintiff had paid a sum of Rs.50,000/ on the said
date and a further sum of Rs.19,500/ on 29.02.2004.
Page 7 of 17
Thus, in all a sum of Rs.69,500/ was paid as earnest
money. The date for execution of the Sale Deed was
stipulated as 15.06.2004 on which date the balance sale
consideration of Rs.70,500/ was to be paid. The plaintiff
contended that he was ready and willing to complete the
transaction and as such on 15.06.2004 i.e. the stipulated
date, the plaintiff appeared in the office of SubRegistrar
with the balance sale consideration and other expenses.
According to the plaintiff the defendant did not turn up
but the plaintiff got his presence marked by moving an
application. It is only subsequently the plaintiff came to
know that the defendant No.1 had executed a Sale Deed
dated 11.06.2004 in favour of the defendant No.2 in
respect of the very suit property. It is in that light the
plaintiff had sought further relief as noted above.
8. The defendant No.2 who had availed the
opportunity granted by this Court and filed written
statement on payment of cost had denied the execution of
the agreement to sell and the receipt of earnest money.
The defendant No.2 relying on the Sale Deed dated
Page 8 of 17
11.06.2004 contended that having purchased the
property he is in possession and enjoyment of the same.
The defendant No.2, therefore, sought for dismissal of the
suit. The Trial Court framed as many as seven issues for
its consideration based on the pleadings. The plaintiff
examined himself as PW1 and also examined the
witnesses as PW2 to PW4. The documents at Exhibits P1
to P9 were marked. The defendant No.2 examined
himself as DW1 and examined two witnesses as DW2 and
DW3. The Trial Court with reference to the said evidence
has decreed the suit. The Lower Appellate Court has reappreciated the material on record and concurred with
the Trial Court. The High Court though was examining
the Second Appeal where limited scope for reappreciation
of the evidence is available, it is noticed that the High
Court has not even adverted to the basic requirements to
arrive at its conclusion. Be that as it may, considering
that the suit in question was filed seeking for specific
performance, the consideration to that effect as made by
the Trial Court and endorsed by the Lower Appellate
Page 9 of 17
Court as also the High Court will have to be noticed
cumulatively.
9. The suit being the one for specific performance of
the contract on payment of the balance sale
consideration, the readiness and willingness was required
to be proved by the plaintiff and was to be considered by
the Courts below as a basic requirement if a decree for
specific performance is to be granted. In the instant case
though the defendant No.2 had denied the agreement as
also the receipt of the earnest money, the same would not
be of consequence as the agreement claimed by the
plaintiff is with the defendant No.1 and the contention of
the defendant No.2 to deny the same is without personal
knowledge on that aspect. However, even in the absence
of the defence put forth, the plaintiff was required to
prove his readiness and willingness and that aspect of
the matter was to be considered by the Courts below. In
the present case though the plaintiff examined himself as
PW1, as also PW2 and PW3, the document writer, and
the witness to the agreement who stated with regard to
Page 10 of 17
the execution of the agreement, the evidence to prove the
readiness and willingness with regard to the resources to
pay the balance sale consideration is insufficient. In the
absence of denial by the defendant No.1, even if the
payment of Rs.69,500/ and the claim by the plaintiff of
having gone to the office of SubRegistrar on 15.06.2004
is accepted, the fact as to whether the plaintiff had
notified the defendant No.1 about he being ready with the
balance sale consideration and calling upon the plaintiff
to appear before the SubRegistrar and execute the Sale
Deed was required to be proved. From among the
documents produced and marked as Exhibit P1 to P9
there is no document to that effect, more particularly to
indicate the availability of the balance sale consideration
as on 15.06.2004 and as on the date of filing the suit.
Despite the same, merely based on the oral testimony of
PW1, the Courts below have accepted the case put forth
by the plaintiff to be ready and willing to complete the
transaction.
Page 11 of 17
10. Instead of arriving at an appropriate conclusion on
that aspect, the Trial Court while answering the issues
No.1 and 2 has concluded that the amount of sale
consideration has already been paid and the fact that the
Civil Suit has been filed by the plaintiff are sufficient to
establish that the plaintiff remained ready and willing to
perform his part of the contract. On the other hand, it is
noticed that what had been paid as on the date of filing
the suit was only the earnest money and the balance
amount was deposited only on 03.08.2007 after the suit
was decreed at the first instance on 14.06.2007 and not
as on the date of filing the suit. Hence the concurrent
conclusion reached by all the three Courts is an apparent
error, the correction of which is necessary. It is no doubt
true that as on the date of decision for the second time
after restoration, the amount had been deposited which
is not the same as having deposited or paid prior to or at
the time of filing the suit. Even if the amount had been
deposited as on the date of filing the suit, the readiness
and willingness with possession of the sale consideration
as on 15.06.2004 was necessary to be proved, which has
Page 12 of 17
not been done. Hence, in our opinion the Courts below
have not appropriately considered this aspect of the
matter.
11. Further, in a circumstance where the defendant
No.2 had contested the suit and had put forth the
contention that he was a bonafide purchaser without
notice and through his evidence had deposed that he
had no knowledge of agreement entered into between the
defendant No.1 and defendant No.2, that aspect required
appropriate consideration. However, the Courts below
have on the contrary concluded that the defendants No.1
and 2 being of the same village, the defendant No.2 would
have knowledge of the agreement entered into by the
defendant No.1 in favour of the plaintiff. Such
conclusion is only an assumption and there is no
evidence with regard to the knowledge of defendant No.2
even if he was from the same village. In addition, the
Lower Appellate Court has concluded that since the
defendant No.1 has not caused appearance in spite of
notice having been issued and he not being examined as
Page 13 of 17
a witness it could be gathered that there is connivance
amongst the defendants to defeat the rights of the
plaintiff. Such assumption is also not justified since the
defendant No.2 had purchased the property for a
consideration under a registered document and the
defendant No.2 was also put in possession of the
property. In that circumstance the defendant No.1 who
had lost interest in the property, if had not chosen to
appear and defend the suit the same cannot be a
presumption of connivance in the absence of evidence to
that effect.
12. In the background of the above consideration, the
plaintiff in any event was not entitled to a decree for
specific performance and possession of the property
against the defendant No.1. In the circumstance the
declaration of the Sale Deed dated 11.06.2004 executed
by the defendant No.1 in favour of the defendant No.2 to
term the same as null and void as claimed by the plaintiff
also did not arise. Despite the said position what is
necessary to be taken note is that the sale in favour of
Page 14 of 17
the defendant No.2 was on 11.06.2004 i.e. subsequent to
the date of the suit agreement dated 03.01.2004. Despite
holding that the defendant No.2 is a bonafide purchaser,
what cannot be lost sight is that the defendant No.1 had
received a sum of Rs.69,500/ from the plaintiff as far
back as on 03.01.2004. That apart if the transaction was
concluded at that stage the plaintiff would have been
entitled to the benefit of the land. Even as per the
ground at (Para x) raised by the defendant No.2 in this
appeal, it would indicate that there has been
considerable appreciation in the market price. Though in
the normal circumstance the return of the advance
received and the compensation for denial of the property
was to be paid by the defendant No.1, as noted, the
defendant No.1 having lost interest in the property has
not appeared in the instant proceedings nor is there any
material to indicate that he has benefited from the
appreciation since even as per the contention of the
plaintiff he has sold the property for a lesser price. In
that situation the plaintiff cannot be left ‘high and dry’. If
that be the position the defendant No.2 who has
Page 15 of 17
benefited from the property will have to repay the
advance and compensate the plaintiff in the peculiar
facts of the instant case. In that circumstance the
defendant No.2 (the appellant herein) is required to be
directed to pay a sum of Rs.3,50,000/ only which is
inclusive of the advance amount of Rs.69,500/ to the
plaintiff (the respondent No.1 herein) in full quit of all
claims. The said amount is also to be directed to be paid
by the defendant No.2 to the plaintiff within a period of
three months failing which the same should carry
interest at 12% per annum till payment. The plaintiff
should also be entitled to withdraw the amount of
Rs.70,500/ stated to have been deposited by him before
the Trial Court.
13. In view of the above, the following order:
i) The appeal is allowed in part. The judgment
and decree dated 24.07.2015 passed in Case No.
915 of 16.11.2004/17.04.2015 and affirmed by the
Lower Appellate Court as also the High Court to
the extent of granting the relief of specific
performance is set aside.
Page 16 of 17
ii) The judgment and decree dated 17.04.2015 in
Case No. 915 shall stand modified, and the
appellant defendant No. 2 is directed to pay a
sum of Rs.3,50,000/ only to the plaintiff within
three months.
iii) If the amount is not paid within the time
stipulated the same shall carry interest at 12% per
annum thereafter.
iv) The plaintiff shall be entitled to withdraw the
amount of Rs.70,500/ lying in deposit before the
Trial Court with the interest accrued, if any.
v) In the facts and circumstances, the parties to
bear their own costs.
Pending application, if any, shall stand disposed of.
……………………….J.
(R. BANUMATHI)
……………………….J.
(A.S. BOPANNA)
New Delhi,
January 28, 2020
Page 17 of 17
