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
1
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.
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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
8
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
9
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
10
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
11
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
12
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
13
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
14
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
15
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
16
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.
17
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
19
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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