P. Ramasubbamma vs V. Vijayalakshmi & Ors.
P. Ramasubbamma vs V. Vijayalakshmi & Ors. - Supreme Court Case / Judgment 2022
Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2095 OF 2022
P. Ramasubbamma ..Appellant (S)
Versus
V. Vijayalakshmi & Ors. ..Respondent (S)
J U D G M E N T
M. R. Shah, J.
1. Feeling aggrieved and dissatisfied with impugned judgment
and order dated 20.07.2021 passed by the High Court of
Karnataka in Regular First Appeal No. 100200/2015, by
which the High Court has allowed the said appeal
preferred by respondent Nos. 3 and 4 herein – original
defendant Nos. 3 and 4 (hereinafter referred to as
defendant Nos. 3 and 4) and has set aside the judgment
and decree passed by the learned Trial Court granting
decree for specific performance of agreement to sell dated
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12.04.2005, the appellant herein original plaintiff has
preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as
under:
2.1 That the appellant herein – original plaintiff filed the suit
for specific performance of agreement to sell dated
12.04.2005. It was the case on behalf of the plaintiff that
she had entered into an agreement with respondent No. 1
herein original defendant No. 1 to purchase the suit
schedule property for a sale consideration of Rs. 29 lakhs.
An advance amount of Rs. 20 lakhs was paid under the
said agreement. Defendant No. 1 had earlier executed a
general power of attorney in favour of respondent No. 2
herein original defendant No. 2. However, defendant No.
2 was present when the plaintiff entered into an agreement
to sell with defendant No. 1. It was the case on behalf of
the plaintiff that thereafter, on 25.03.2008, defendant Nos.
1 and 2 approached the plaintiff and her husband and
sought payment of Rs. 6 lakhs. On 25.03.2008, the
plaintiff made further payment of Rs. 6 lakhs towards sale
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consideration and an endorsement was made by defendant
No. 1 on the agreement, acknowledging the receipt of Rs. 6
lakhs. According to the plaintiff, thereafter, despite
repeated requests and demands, defendant No. 1 did not
execute the sale deed in favour of the plaintiff. They learnt
that defendant No. 2 by misusing the power of attorney
executed by defendant No. 1 in favour of defendant No. 2,
clandestinely executed two sale deeds in favour of
defendant Nos. 3 and 4 only to defraud the plaintiff. The
plaintiff got served a legal notice to the defendants on
17.06.2010 calling upon defendant No. 1 to execute the
sale deed in her favour by receiving balance sale
consideration of Rs. 3 lakhs. Further, thereafter defendant
No. 1 did not execute the sale deed, the plaintiff filed the
present suit for specific performance of the
contract/agreement to sell dated 12.04.2005.
2.2 That original defendant No. 1 filed written statement and
admitted the execution of agreement to sell and specifically
stated that she is ready and willing to perform her part of
contract. However, defendant Nos. 2 to 4 filed separate
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written statements and took a common defence that
agreement to sell dated 12.04.2005 is a created document.
It was contended that power of attorney executed by
defendant No. 1 in favour of defendant No. 2 is a registered
document and without cancelling the registered power of
attorney and without the knowledge of defendant No. 2,
defendant No. 1 in collusion with the plaintiff had created
the agreement to sell. It was also contended by defendant
Nos. 2 to 4 that agreement to sell dated 12.04.2005 is a
bogus document and no sale consideration is paid by the
plaintiff.
2.3 The learned Trial Court framed the following issues:
“i) Whether the plaintiff proves that on 12.4.2005
defendant No. 1 has executed an agreement of
sale agreeing to sell the suit property for a total
consideration of Rs. 29 lakhs?
ii) Whether the plaintiff proves that part sale
consideration of Rs. 26 lakhs has been paid to
the defendant No. 1?
iii) Whether the plaintiff proves that she was always
ready and willing to perform her part of duty
towards the contract?
iv) Whether the plaintiff further proves that with
malafide intention and to defeat her right
accrued through the sale agreement dated
12.4.2005 defendant No. 2 had executed sale
deeds dated 3.5.2010 in favour of defendant No.
4
3 and 4 and those sale deeds are nominal sale
deeds?
v) Whether the defendant No. 2 to 4 prove that sale
agreement dated 12.4.2005 is a created
document and by virtue of the same no
consideration had been passed?
vi) Whether the plaintiff is entitled for a decree of
specific performance of contract?
vii) What order or decree?”
2.4 On behalf of the plaintiff, her husband was examined as
PW1 and two more witnesses were examined on behalf of
the plaintiff. The plaintiff produced nine documents as
documentary evidence as exhibit P1 to P9. Defendant No.
1 was examined as DW1 and defendant No. 2 was
examined as DW 2.
2.5 On appreciation of evidence on record, the learned Trial
Court decreed the suit and passed a decree of specific
performance. The learned Trial Court found that
defendant No. 1 being the absolute owner of the suit
schedule property has admitted the execution of
agreement to sell in favour of the plaintiff and has also
admitted receipt of substantial amount as part of the sale
consideration. The learned Trial Court also proceeded to
hold that the sale deed executed by defendant No. 2 in
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favour of defendant Nos. 3 and 4 are not binding on
defendant No. 1 as well as the plaintiff and therefore, the
plaintiff was entitled to the relief of specific performance
of contract and to get the vacant possession of the suit
schedule property.
2.6 Feeling aggrieved and dissatisfied with the judgment and
decree passed by the learned Trial Court, the original
defendant Nos. 3 and 4 only preferred an appeal before
the High Court. By the impugned judgment and order,
the High Court has allowed the said appeal and has
quashed and set aside the decree passed by the learned
Trial Court mainly relying upon and considering Section
20 of the Specific Relief Act. The High Court has also
observed that as there was no prayer or a particular relief
to declare that the sale deed in favour of defendant Nos. 3
and 4 is null and void and not binding on the plaintiff
and defendant No. 1, such a relief could not have been
granted by the learned Trial Court.
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2.7 Feeling aggrieved and dissatisfied with the impugned
judgment and order passed by the High Court, the
plaintiff preferred the present appeal.
3. Shri S.N. Bhat, learned Senior Advocate appearing on
behalf of the original plaintiff has vehemently submitted
that in the facts and circumstances of the case, the High
Court has committed a grave error in quashing and
setting aside the decree passed by the learned Trial Court
for specific performance of agreement to sell dated
12.04.2005.
3.1 It is further submitted that when the original defendant
No. 1 – original owner admitted the execution of the
agreement and even admitted the payment of substantial
amount under the agreement, the learned Trial Court
rightly passed the decree of the specific performance of
the said agreement.
3.2 It is further submitted that even the High Court ought to
have appreciated that apart from the fact that original
defendant No. 1 admitted the execution of the agreement
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and receipt of payment of substantial advance amount,
original defendant Nos. 3 and 4 did not even enter into
the witness box. It is further submitted that the High
Court has not properly appreciated and considered the
fact that the original of power of attorney dated
28.01.1997 executed by defendant No. 1 in favour of
defendant No. 2, was handed over to the plaintiff at the
time of execution of agreement to sell, which was
produced by the plaintiff in the present suit as exhibit P6.
3.3 It is further submitted that the High Court has also erred
in holding that it was necessary for the plaintiff to seek
cancellation of sale deeds dated 03.05.2010 executed by
defendant No. 2 in favour of defendant Nos. 3 and 4,
respectively. It is submitted that in a suit for specific
performance it is not necessary for the agreement holder
to seek cancellation of sale deed executed in favour of a
subsequent purchaser and it is sufficient to implead the
subsequent purchaser in the suit and seek relief of
specific performance against original owner and also seek
direction to the subsequent purchaser to join in the
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execution of the sale deed in order to completely convey
title to the agreement holder. Reliance is placed upon the
decisions of this Court in the cases of Lala Durga Parsad
and Anr. Vs. Lala Deep Chand and Ors., 1954 SCR
360: AIR 1954 SC 75, Soni Lalji Jetha & Ors. Vs. Soni
Kalidas Devchand & Ors., (1967) 1 SCR 873: AIR 1967
SC 978, R.C. Chandiok & Anr. Vs. Chuni Lal
Sabharwal & Ors. (1970) 3 SCC 140: AIR 1971 SC
1238, Dwarka Prasad Singh & Ors. Vs. Harikant
Prasad Singh & Ors., (1973) 1 SCC 179 and
Rathnavathi & Anr. Vs. Kavitha Ganashamdas, (2015)
5 SCC 223.
3.4 It is further submitted that the High Court has also not
properly appreciated the fact that the transactions
between defendant No.2 and defendant Nos. 3 to 4 were
sham transactions, which were by defendant No. 2 in
favour of his own sistersinlaw. It is submitted that even
the sale consideration in the transaction between
defendant No. 2 and defendant Nos. 3 to 4 was alleged to
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have been paid by cash and that too, a huge sum of Rs.
26 lakhs was alleged to have been paid by cash. It is
submitted that in any case defendant Nos. 3 and 4 never
stepped into the witness box.
3.5 It is submitted that therefore when the sale deed
executed in favour of defendant Nos. 3 and 4 by
defendant No. 2 was sham in order to defeat the right of
the plaintiff pursuant to agreement to sell dated
12.04.2005 and the same was executed after the
agreement to sell in favour of the plaintiff and the plaintiff
had paid a substantial advance amount, the High Court
has erred in applying Section 20 of the Specific Relief Act.
3.6 Making the above submissions and also relying upon the
decisions of this Court in the case of Vasantha
Viswanathan Vs. V.K. Elayalwar, (2001) 8 SCC 133
(para 13) and in the case of Rathnavathi (supra), it is
prayed to allow the present appeal and quash and set
aside the impugned judgment and order passed by the
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High Court and consequently to restore the decree passed
by the learned Trial Court.
4. Though served nobody has entered appearance on behalf
of defendant Nos. 2 to 4. Even respondent No. 3 –
defendant No. 3 is served by substituted service, namely,
by way of publication in two daily newspapers. In that
view of the matter, this Court has no other alternative
but to proceed further with the appeal exparte.
5. We have gone through the judgment and decree and the
findings recorded by the learned Trial Court as well as
the judgment and order passed by the High Court.
5.1 The learned Trial Court framed the following issues:
“i) Whether the plaintiff proves that on 12.4.2005
defendant No. 1 has executed an agreement of
sale agreeing to sell the suit property for a total
consideration of Rs. 29 lakhs?
ii) Whether the plaintiff proves that part sale
consideration of Rs. 26 lakhs has been paid to
the defendant No. 1?
iii) Whether the plaintiff proves that she was always
ready and willing to perform her part of duty
towards the contract?
iv) Whether the plaintiff further proves that with
malafide intention and to defeat her right
accrued through the sale agreement dated
12.4.2005 defendant No. 2 had executed sale
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deeds dated 3.5.2010 in favour of defendant No.
3 and 4 and those sale deeds are nominal sale
deeds?
v) Whether the defendant No. 2 to 4 prove that sale
agreement dated 12.4.2005 is a created
document and by virtue of the same no
consideration had been passed?
vi) Whether the plaintiff is entitled for a decree of
specific performance of contract?
vii) What order or decree?”
5.2 Considering the fact that original defendant No. 1 –
vendor – original owner admitted the execution of
agreement to sell dated 12.04.2005 and even admitted
the receipt of substantial advance sale consideration, the
learned Trial Court decreed the suit for specific
performance of agreement to sell dated 12.04.2005.
Once the execution of agreement to sell and the
payment/receipt of advance substantial sale
consideration was admitted by the vendor, thereafter
nothing further was required to be proved by the plaintiff
– vendee. Therefore, as such the learned Trial Court
rightly decreed the suit for specific performance of
agreement to sell. The High Court, was not required to go
into the aspect of the execution of the agreement to sell
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and the payment/receipt of substantial advance sale
consideration, once the vendor had specifically admitted
the execution of the agreement to sell and receipt of the
advance sale consideration; thereafter no further
evidence and/or proof was required.
5.3 Now, so far as the sale deeds executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4 and
the decree passed by the learned Trial Court that the
sale deeds executed by original defendant No. 2 in favour
of defendant Nos. 3 and 4 are not binding on defendant
No. 1 as well as on the plaintiff is concerned, at the
outset, it is required to be noted that issue Nos. 4 and 5,
reproduced hereinabove, were in respect of the sale
deeds executed by original defendant No. 2 in favour of
defendant Nos. 3 and 4 dated 03.05.2010. Therefore,
specific issues were framed on sale deeds dated
03.05.2010 executed by original defendant No. 2 in
favour of defendant Nos. 3 and 4. In that view of the
matter, the High Court has erred in setting aside the
decree passed by the learned Trial Court by observing
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that as there was no specific relief/prayer of cancellation
of sale deeds dated 03.05.2010 executed by original
defendant No. 2 in favour of defendant Nos. 3 and 4,
therefore, the learned Trial Court could not have passed
the decree that the said sale deeds are not binding on
defendant No. 1 and the plaintiff. The High Court has
not noted the specific issue Nos. 4 and 5 framed by the
learned Trial Court, which were with respect to sale
deeds dated 03.05.2010. Therefore, as such, there was a
lis between the parties in respect to sale deeds dated
03.05.2005 executed by original defendant No. 2 in
favour of defendant Nos. 3 and 4 and even specific
issues were framed, which on appreciation of evidence
were held against defendant Nos. 2 to 4. Therefore, the
High Court is not justified in quashing and setting aside
the judgment and decree passed by the learned Trial
Court declaring that sale deeds dated 03.05.2010 are not
binding on defendant No. 1 and the plaintiff.
5.4 It is also required to be noted that on appreciation of
evidence, the learned Trial Court has specifically given
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the finding that the alleged sale consideration paid by
defendant Nos. 3 and 4 to original defendant No. 2 for
executing sale deeds dated 03.05.2010 have not been
established and proved by defendant Nos. 2 to 4.
Therefore, there was a specific finding given by the
learned Trial Court on appreciation of evidence that sale
deeds dated 03.05.2010 were nominal sale deeds. The
High Court has brushed aside the same on the ground
that even in agreement to sell dated 12.04.2005, the
amount was alleged to have been paid by cash. However,
it is required to be noted that so far as receipt of
substantial advance sale consideration mentioned in the
agreement to sell dated 12.04.2005 has been specifically
admitted by defendant No. 1. Therefore, when it was
specifically alleged that defendant No. 2 executed sale
deeds in favour of defendant Nos. 3 and 4, who are his
sistersinlaw, with a view to defeat the rights of the
plaintiff and defendant No. 1 and when it was alleged
that they were nominal sale deeds, thereafter, defendant
No. 2 was required to prove the receipt of sale
consideration mentioned in the sale deeds dated
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03.05.2010, which defendant Nos. 2 to 4 have failed to
do so.
5.5 It is also required to be noted that on appreciation of
evidence, learned Trial Court has specifically found that
the stamp papers of agreement to sell dated 12.04.2005
was purchased in the name of defendant No. 2 and
therefore defendant No. 2 was aware and in the
knowledge of agreement to sell dated 12.04.2005. It is
also required to be noted that even defendants did not
reply to the legal notice served by the plaintiff, which
was issued before filing the suit.
5.6 In light of the aforesaid factual aspects and the findings
recorded by the learned Trial Court, the decision of this
Court in the case of Lala Durga Prasad & Ors. (supra) is
required to be referred to. In paragraph 42, it is observed
and held as under:
“42. In our opinion, the proper form of decree is to
direct specific performance of the contract between
the vendor and the plaintiff and direct the
subsequent transferee to join in the conveyance so as
to pass on the title which resides in him to the
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plaintiff. He does not join in any special covenants
made between the plaintiff and his vendor; all he
does is to pass on his title to the plaintiff. This was
the course followed by the Calcutta High Court
in Kafiladdin v. Samiraddin [AIR 1931 Cal 67] and
appears to be the English practice. See Fry on
Specific Performance, 6th Edn., p. 90, para 207;
also Potter v. Sanders [67 ER 1057]. We direct
accordingly.”
The aforesaid decision has been subsequently
referred to and followed by this Court in the subsequent
decision in the case of Rathnavathi & Anr. (supra).
5.7 From the impugned judgment and order passed by the
High Court, it appears that the High Court has heavily
relied upon Section 34 of the Specific Relief Act.
However, considering the fact that specific issues were
framed with respect to sale deeds dated 03.05.2010
executed by original defendant No. 2 in favour of
defendant Nos. 3 and 4 and the parties led the evidence
also on the aforesaid issues and thereafter, when the
learned Trial Court had given findings on the said issues
and thereafter, had granted the declaration that the sale
deeds executed by original defendant No. 2 in favour of
defendant Nos. 3 and 4 are not binding on defendant No.
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1 and the plaintiff and those sale deeds are nominal sale
deeds and that defendant Nos. 2 to 4 have failed to prove
that agreement to sell dated 12.04.2005 is a created
document and by virtue of the same no consideration
has been paid, Section 34 of the Specific Relief Act, upon
which the reliance has been placed by the High Court
will have no application.
5.8 The High Court has set aside the judgment and decree
passed by the learned Trial Court on the ground that the
relief under Section 20 of the Specific Relief Act, is a
discretionary relief and therefore, in view of the fact that
original defendant No. 2 had executed sale deeds in
favour of defendant Nos. 3 and 4, the learned Trial Court
ought not to have exercised discretion in favour of the
plaintiff for passing the decree for specific performance.
However, in the facts and circumstances of the case
narrated hereinabove and when the learned Trial Court
specifically gave the findings that defendant No. 1 –
vendor specifically admitted the execution of agreement
to sell dated 12.04.2005 in favour of the plaintiff by
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accepting a substantial advance consideration and that
defendant No. 2 was in the knowledge of the agreement
to sell and despite the same, he sold the same in favour
of defendant Nos. 3 and 4, who are his sistersinlaw and
that too the sale deeds found to be nominal sale deeds,
the learned Trial Court as such rightly decreed the suit
for specific performance and also rightly declared that
sale deeds dated 03.05.2010 executed by original
defendant No. 2 in favour of defendants No. 3 and 4 are
not binding upon the plaintiff and defendant No. 1. The
High Court has committed a grave error in reversing the
judgment and decree passed by the learned Trial Court
by ignoring the vital facts of the case which are either
admitted or proved in the instant case.
6. In view of the above and for the reasons stated above,
the present appeal succeeds. The impugned judgment
and order passed by the High Court is hereby quashed
and set aside and the judgment and decree passed by
the learned Trial Court is restored. In the facts and
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circumstances of the case, there shall be no order as to
costs.
…………………………………J.
(M. R. SHAH)
…………………………………J.
(B.V. NAGARATHNA)
New Delhi,
April, 11 2022.
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