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JAGAN NATH V. JAGDISH RAI & ORS  RD-SC 253 (28 April 1998)
S.B. MAJMUDAR, M. JAGANNADHA RAO.
S.B. Majmudar, J.
This appeal on grant of special leave to appeal under Article 136 of the Constitution of India is moved by the original plaintiff whose suit for specific performance of the suit agreement came to be decreed by the Trial Court but got dismissed by a learned Single Judge of the High Court and which dismissal in turn was confirmed by a Letters Patent Bench of the High Court. We will refer to the appellant as plaintiff and the respondents concerned as defendants, for the sake of convenience, in the latter part of this judgment. We may also mention that pending this appeal original defendant no.2 has sold the suit property to one Yash Pal, son of Shri Hans Raj who is sought to be joined as party respondent no.4 by I.A. No. 3 moved by the plaintiff. Similar application is moved by the said purchaser being I.A. No.4. Both these I.As are granted.
Consequently the subsequent purchaser has become respondent no.4 in this appeal. He will be treated as defendant no.4.
A few relevant facts leading to this appeal are required to be noted at the outset with a view to appreciating the grievance of the plaintiff.
Background Facts The suit house consisting of 5 rooms, a verandah and courtyard measuring 7 marlas out of the entire property consisting of 14 marlas situated at Moga town earlier falling within the district of Faridkot and now included in the newly formed Moga District in the State of Punjab belonged to defendant no.1 Jagdish Rai. The said property was mortgaged by defendant no.1 in favour of one Rajinder Singh by a registered usufructuary mortgage deed Ex. D-3 dated 25th July 1973 for a sum of Rs. 5,000/-. Thereafter defendant no.1 entered into the suit agreement Ex.P-1 dated 28th September 1973 in favour of the plaintiff. As per the said suit agreement defendant no.1 agreed to sell his right, title and interest in the suit property for a sum of Rs.
60.000/-. In the said agreement it was provided that defendant no.1 will execute the registration deed by 30th December 1973 in favour of the plaintiff. The said agreement recited that defendant no.1 was the sole owner of the house which was in his exclusive possession and that it was free from all encumbrances of Government agreement dated 26th December 1973 defendant no.1 Jagdish Rai got the time for execution of the sale deed under the suit agreement extended upto 30th June 1974. The said extension agreement is Ex. P-
2. It was recited therein that under the agreement of 28th September 1973 the date of execution of the registration of the house was fixed upto 30th December 1973. But because he was unable to get the sale deed executed by 30th December 1973 the date of the execution of the sale deed was extended by mutual agreement upto 30th June 1974. Thereafter defendant no.1 Jagdish Rai entered into a sale deed for Rs.
20,000/- conveying his right, title and interest in one half of the suit property which in turn was a part of 14 marlas and which was joint with his brother, in favour of Jagir Singh, son of Kapur Singh. The said sale deed is at Ex. D-1 dated 23rd January 1974. The said sale deed recited that the entire house consisted of 14 marlas. It was joint with his brother and consequently one half share of defendant no.1 consisted of 7 marlas which was earlier mortgaged for Rs.
5,000/-= Out of that one half share of defendant no.1 further one half thereof, that is, 1/4th of the entire house to the extent of 3-1/2 marlas was being sold to Jagir Singh for a sum of Rs. 20,000/-. The document recited that out of Rs. 10,000/- earnest money of Rs. 5,000/- was received by defendant no.1 and the balance of Rs. 5,000/- was retained by the purchaser for paying off the mortgagee and the balance of Rs. 10,000/- would be received by defendant no.1 at the time of execution of the document before Sub- Registrar, Moga. Said Jagir Singh was joined as defendant no.3 in the suit from which the present proceedings arise.
Defendant no.3 Jagir Singh in turn sold the 1/4th share in the entire house of 14 marlas, which he had purchased from defendant no.1, by entering into sale deed in favour of defendant no.2 on 27th March 1974 for a sum of Rs. 21,000/-.
Said document is Ex. D-4. Thus by the said sale deed defendant no.2 purchased 1-1/2 marlas out of the suit property from defendant no.3. As noted earlier, the suit agreement is favour of the plaintiff covered 7 marlas being 1/2 share of defendant no.1 in the entire house originally consisting of 14 marlas. The remaining 3-1/2 marlas of the suit property was subsequently purchased by defendant no.2 from defendant no.1 by a registered sale deed dated 02nd April 1974 for a consideration of Rs. 30,000/-. Said document is Ex.D-2. It was thereafter that the plaintiff filed Civil Suit No. 211 of 1974 in the court of Sub Judge, 1st Class, Moga for specific performance of the suit agreement joining defendant no.1 Jagdish Rai the original owner of the property of 7 marlas being his 1/2 interest in the entire house. He joined defendant no.2 who had by then become the full owner of entire 7 marlas of defendant no.1's share in the suit house and which came to be conveyed to him by two documents Ex. D-4 and D-2 respectively. As noted earlier, the intermediate purchaser of 1/4th share of defendant no.1 admeasuring 3-1/2 marlas of the suit property was joined as defendant no.3 and the present purchaser of the entire right, title an d interest of defendant no.2 in the suit property pending this appeal and who is joined as respondent no.4 herein is to be treated as defendant no.4.
In the aforesaid suit the plaintiff contended that he was ready and willing to perform his part of the suit agreement and, therefore, defendant no.1 was bound to convey all 7 marlas of the suit property covered by the agreement in favour of the plaintiff by executing appropriate sale deed and by putting the plaintiff in possession of the suit property. It was also contended that defendant no.2 and defendant no.3 were not bonafide purchasers for value without notice and, therefore, appropriate decree for specific performance was required to be passed also against them, especially against defendant no.2 who was by the time of the suit representing the entire interest of defendant no.1 in the suit property which was passed on to him pursuant to the aforesaid intermediate transactions of sale prior to the suit. It was alternatively prayed that a decree for Rs. 10,000/- as damages be passed in favour of the plaintiff and against the defendant.
The suit was contested by the defendants. Defendant no.2 being a minor was represented by his guardian Kishan Chand, his father who contested the suit on his behalf. The learned Trial Judge after framing issues and recording evidence came to the conclusion that defendant no.1 had agreed to sell the house in dispute to the plaintiff on the terms given in the agreement Ex.P-1, that the plaintiff was ready and willing to perform his part of the agreement and that defendant no.2 was not a bona fide purchaser of the suit property for value without notice and that the plaintiff was entitled to specific performance of the agreement. The learned Trial Judge, therefore, decreed the plaintiff's suit for specific performance of the agreement against defendant nos.1 and 2. In addition to the aforesaid decree for specific performance defendant no.1 was also called upon to pay to the plaintiff Rs. 10,000/- as damages as stipulated in the agreement Ex. P-1, as according to the learned Trial Judge defendant no.1 had gone back upon the agreement and had not executed the sale deed according to the terms of the agreement. Defendant no.1 was also asked to bear the cost of the suit.
The aforesaid decree passed by the Trial Court in favour of the plaintiff on 21st October 1976 resulted in two appeals before the High Court of Punjab and Haryana at Chandigarh. One appeal was moved by defendant no.1 while another companion appeal was moved by defendant no.2. The learned Single Judge of the High Court noted in paragraph 3 of his judgment that the main controversy between the parties in these appeals was as to whether Lalit Mohan, defendant no.2, was a bona fide purchaser without notice or not and whether the plaintiff was entitled to the relief for specific performance of the agreement to sell or not. The findings of the Trial Court on other issues in favour of the plaintiff were not challenged by the appellants in the High Court. So far as the aforesaid point for determination was concerned the learned Single Judge of the High Court came to the conclusion on re-appreciation of the evidence that defendant no.2 was a bona fide purchaser for value without notice and hence specific performance could not be granted against him. However, the decree for damages of Rs. 10,000/- as passed by the Trial Court against defendant no.1 was required to be confirmed. Accordingly both the appeals were allowed. Judgment and decree of the Trial Court were set aside and the plaintiff's suit was decreed against defendant no.1 Jadgish Rai for recovery of Rs. 10,000/- as damages only. Interest was awarded to the plaintiff on the aforesaid amount at 6% p.a. from the date of the decree of the Trial Court till its realisation. The aforesaid decision was rendered by the learned Single Judge of the High Court on 31st October 1985. The plaintiff carried the matter in Letters Patent Appeal before a Division Bench of the High Court. The Division Bench of the High Court by its order dated 03rd April 1986 held that no case for interference was made out by the plaintiff and hence appeal was dismissed.
That is how the dissatisfied plaintiff has filed the present appeal on grant of special leave by this Court.
Rival Contentions Learned senior counsel Shri Rajinder Sachar appearing for the plaintiff vehemently contended that the burden of proof was very heavy on defendant no.2 for showing that he was a bona fide purchaser for value without notice and that burden was not legally discharged by him. That the evidence on record clearly indicated that with a view to frustrate the plaintiff's agreement and in full know thereof defendant no.2 had entered into the transactions of sale in his favour and, therefore, the solitary contention canvassed in appeal by these contesting defendants should have been answered by the learned Single Judge against the defendants and in favour of the plaintiff and the decree passed by the Trial Court ought to have been confirmed. In support of his contentions Shri Sachar took us through the relevant documentary and oral evidence on record of this case to which we will make a reference hereinafter. He also invited out attention to one decision of this Court and two decisions of Privy Council to which also we will make a reference at an appropriate stage in the latter part of this judgement.
Refuting these contentions Shri M.L. Verma, learned senior counsel appearing for the newly added respondent defendant no.4, who in substance is the only contesting party at the present stage as he is the owner of the suit property having purchased the same pending these proceedings, submitted that his predecessor-interest defendant no.2 was rightly held as bona fide purchaser for value without notice by the learned Single Judge of the High Court and that finding was rightly upheld by the Division Bench of the High Court. That the finding is based on pure appreciation of evidence and is not perverse or uncalled for and hence in exercise of our powers under Article 136 of the Constitution of India we may not interfere with the said pure finding of fact. He further submitted that he has purchased this property pending this appeal when there was no injunction against the original defendants especially defendant no.2 restraining him from dealing with his property or disposing it off. He, however, fairly stated that as the transaction is pending this appeal on the principle of 1st penance he would be liable to answer the claim of the plaintiff and to satisfy the claim of the plaintiff if ultimately plaintiff succeeds on merits.
However, Shri Verma submitted that defendant no.4 has purchased the property by parting with hard earned money of Rs. 1,20,00/- and odd in 1993. That according to him situation in Punjab at that time was very uncertain due to terrorism. That defendant no.4 had purchased the property in question after making inquiries from the present appellant who agreed that he had no interest in the property as the litigation had already taken 20 years. This submission was made on the basis of the averments made in paragraph 6 of I.A. No.4 moved by him for being joined as party in this appeal invoking provisions of O. XXII R.10. Code of Civil Procedure. Shri Verma submitted that though the copy of this I.A. was served on the learned counsel for the appellant no counter has been filed. He next submitted, placing reliance on relevant aspects of t he evidence both documentary and oral to which eh invited our attention, that in any case defendant no.4's predecessor-in-interest defendant no.2 was clearly shown to be a bona fide purchaser for value without notice of the plaintiff's agreement. That the learned Single Judge of the High Court had held on appreciation of evidence that defendant no.2's father was a sitting tenant and as he had purchased t he suit property in two instalments there was no occasion for him to enter into this transaction if he had known about the suit agreement. He lastly contended that in any case this being equity jurisdiction the plaintiff who is in a very affluent condition as seen from the evidence and having number of immovable properties in the town while defendant no.4 is having the only suit house for his residential purposes which he is occupying since more than five years, this Court may not exercise powers under Article 136 of the Constitution of India for upsetting the decision of the High Court in favour of his predecessor-in-interest defendant no.2. Shri Sachar, learned senior counsel for the plaintiff in rejoinder reiterated his contentions in support of the appeal.
Points for determination In the light of the aforesaid rival contentions the following points arise for our consideration :
1. Whether the decision of the learned Single Judge of the High Court as confirmed by its Division Bench in Letters Patent Appeal to the effect that defendant no.2 was a bona fide purchaser for value without notice, is erroneous and liable to be set aside.
2. Even if the finding on Point No. 1 is against the contesting defendants whether the plaintiff is entitled to a decree for specific performance in the facts and circumstances of the case.
3. What final order ? We shall deal with these points seriatim.
Point No. 1 The aforesaid resume of facts makes it very clear that the real question in controversy between the parties which now survives for consideration is whether defendant no.4's predecessor-in-interest defendant no.2 was a bona fide purchaser for value without notice of the suit agreement. If the answer to this question is in the affirmative nothing further would survive in this appeal.
In order to appreciate the rival contentions centering round this limited controversy it is necessary to note the well settled legal position governing the same. Section 19 of the Specific Relief Act, 1963 lays down that, `except as otherwise provided by this Chapter, specific performance of a contract may be enforced against - (a) either party thereto; (b) any other person claiming under him by a title arising subsequently to the contract, except a transfer for value who has paid his money in good faith and without notice of the original contract;'. We are not concerned with other sub-clauses of Section 19. It is not in dispute between the contesting parties that defendant no.2 was partly claiming through defendant no.1 who is a party to the suit agreement and was partly through defendant no.3 who in his turn was claiming through defendant no.1 who was admittedly party to the suit agreement. As ultimately the entire suit property came to be vested in defendant no.2 prior to the date of the suit, the moot question examined by the Trial Court as well as by the Appellate Court as to whether defendant no.2 was a transferee for value without notice of the original contract requires resolution in the light of the evidence on record. It is well settled that the initial burden to show that the subsequent purchaser of suit property covered by earlier suit agreement was a bona fide purchaser for value without notice of the suit agreement squarely rests on the shoulders of such subsequent transferee. In the case of Bhup Narain Singh v. Gokul Chand Mahraj and Others [Air 1934 PC 68] the Privy Council relying upon earlier Section 27 of the Specific Relief Act of 1877 which is in Pari Materia with Section 19(1)(b) of the present Act, made the following pertinent observations at page 70 of the Report in this connection ;
"Section 27 lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, bu to the transferee, and therefore it is for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which prima facie, he h ad no right to get :" However, it has to be kept in view that once evidence is led by both the sides the question of initial onus of proof pales into insignificance and t he Court will have do decide the question in controversy in the light of the evidence on record. Even this aspect of the matter is well settled by a decision of Privy Council in the case of Mohammad Aslam Khan and Others v. Neraze Shah [AIR 1932 PC 228] wherein it was observed with reference to the very same question arising under Section 27(b) of the earlier Specific Relief Act of 1877 that `it is not necessary to enter upon a discussion in the case is before the Court and it has no difficulty arriving at a conclusion in respect thereof.
Where a transferee has knowledge of such facts which would put him on inquiry which if prosecuted would have disclosed a previous agreement, such transferee is not a transferee without notice of the original contract within the meaning or the exception in Section 27(b).' Under these circumstances, therefore, it becomes necessary for us to quickly glance through the relevant evidence on record both oral and documentary, which was considered by the Trial Court in the first instance and which was re-considered by the first Appellate Court of learned Single Judge of the High Court subsequently in the appeals moved by the contesting defendants. We have already noted the sequence of events reflated by the relevant documents on record dealing with the suit property from time to time. We have to keep in view the salient fact that defendant no.1's one half interest in the suit property consisting of 7 marlas was already subjected to a usufructuary mortgage in favour of Rajinder Singh as per Ex.
D-3 dared 26th July 1973. When this registered usufructurary mortgage deed was executed by defendant no.1 in favour of the mortgagee the suit agreement had not seen the light of the day. The said mortgage document clearly recites that defendant no.1 had mortgaged one half share in the entire suit house of 14 marlas, meaning thereby, entire 7 marlas which subsequently got covered by the suit agreement in favour of the plaintiff. The usufructuary mortgage was for a consideration of Rs. 5,000/-/. It is interesting to note that though the suit property was subjected to usufructuary mortgage and it was clearly recited in the mortgage deed that possession was handed over to the mortgagee from the date of the document, when we turn to the suit agreement Ex.
P-1 we find that the very same mortgagor Jagdish Rai, defendant no.1 while entering into the suit agreement in favour of the plaintiff and agreeing to sell his right, title and interest in the suit property for Rs. 60,000/-, had the cheek to mention that the house was free from all encumbrances and mortgages and he was the sole owner of the house which was in his exclusive possession. It is, therefore, clear that in order to lure the plaintiff to agree to purchase the house for a consideration of Rs.
60,000/- defendant no.1 made a wrong statement in the said agreement. Shri Sachar, learned senior counsel for the plaintiff was right in his submission that the suit agreement never informed the plaintiff that the suit house was already burdened by way of usufructuary mortgage in favour of Rajinder Singh only two months back. He was also right when he contended that a recital was made therein that defendant no.1 was in exclusive possession thereof, meaning thereby, the fact that the very same suit property was under usufructuary mortgage with the mortgagee Rajinder Singh was suppressed from the plaintiff by defendant no.1. Be that as it may, Shri Sachar submitted that he does not dispute the burden of said mortgage on the suit property and was prepared to stand by the suit agreement even subject to the burden of the said mortgage. However, that will not be the end of the matter. It becomes almost at once clear that recital in the agreement to sell to the effect that defendant no.1 was in exclusive possession at the time of the suit agreement in favour of the plaintiff was clearly a false recital. So far as the plaintiff is concerned he also cannot get away from the fact that on the very same suit property which was agreed to be sold to him under the suit agreement there was a burden of usufructuary mortgage as per Ex. D-3 which was a registered document and which would obviously visit the plaintiff with the notice of such encumbrances. It is this agreement which came to be extended by mutual consent because defendant no.1 was not in a position to execute the sale deed by 30th December 1973 and consequently the time for execution of the sale deed was extended upto 30th June 1974 as seen from Ex. P-2.
It is in the light of the aforesaid events that we have to see as to what happened after Ex.P-2 was executed. The documentary evidence shows that defendant no.1 who had got time upto 30th June 1974 to execute the sale deed and get the balance of money from the plaintiff pursuant to the suit agreement appeared to be in great financial need and wanted early money. That resulted in his entering into two transactions by which he sold the very same suit property of 7 marlas in two instalments. Firstly he sold 3-1/2 marlas for Rs. 20,000/- by Ex. D-1 in favour of defendant no.3 Jagir Singh. This defendant no.3 by earning a profit of Rs.
1,000/- sold the very same 3-1/2 marlas purchased by him from defendant no.1 to defendant no.2 on 27th March 1974, as seen from Ex. D-4. Defendant no.1 on his part sold the remaining 3-1/2 marlas consisting of the other 1/4th interest in the suit property, which had remained with him, to defendant no.2 by sale deed Ex. D-2 for Rs. 30,000/- on 02nd April 1974. Thus it appears that before the time limit of 30th June 1974 for executing the sale deed as per the suit agreement Ex. P-1 read with Ex. P-2 expired defendant no.1 who appeared to be in great need of money sold off in two instalments the very same suit property for a total amount of Rs. 50,000/- thus, suffering a loss of Rs.
10,000/- in the bargain. The learned Single Judge of the High Court rightly placed strong reliance on this circumstance to show that as defendant no.1 had sold the property in two instalments which ultimately came in the hands of defendant no.2 as the full owner who had parted with the total consideration of Rs. 51,000/-. In the process defendant no.1 suffered a loss of Rs. 10,000/-. Had defendant no.1 stood by the suit agreement he would have got Rs. 50,000/-, instead he sold the property earlier in two instalments getting only Rs. 50,000/-. Learned senior counsel Shri Sachar for the plaintiff submitted that it is easy to visualise that the sale price mentioned in the document may not reflect the real amount and there may be some under-hand dealing between the parties. It is difficult to appreciate this contention for the simple reason that to none of the witnesses examined in the case was such a case put up. Even that apart, such contention was never canvassed before any of the courts below. Therefore, such a contention based on pure imagination or supposition of the learned senior counsel not backed up by any evidence on record cannot be countenanced. We must, therefore, proceed on the basis that defendant no.1 after having entered into suit agreement in favour of the plaintiff in September 1973 and having got the time for execution of the sale deed thereunder extended upto 3-th June 1974 was in such a great need of money that he had tp part with the suit property in two instalments by selling it off having suffered a loss of Rs. 10,000/- in the bargain. When such was the dire necessity and need of defendant no.1 it is obvious that he would see to it that no whisper about the suit agreement would eve be made to the prospective purchaser-parties to Ex. D-2w and D-1. It become at once probable to visualise that if defendant no.1 had ever whispered about the suit agreement the prospective purchasers would have backed out being scared of the future litigation which they would have been required to undergo.
Therefore on the broad test of probabilities in the light of the aforesaid events duly reflected by the relevant documents on record it becomes clear that the first purchased from defendant no.1, namely, Jagir Singh defendant no.3 as per Ex. D-1 and also defendant no.2 who purchased the other half of the suit property from defendant no.1 as per Ex. D-2 entered into these sale transaction with defendant no.1 without knowing that the suit property which they were purchasing was subject to any subsisting prior agreement to sell in favour of the plaintiff. The conclusion to which the learned Single Judge of the High Court reached as aforesaid remain well sustained on the touchstone of probabilities on the record of the case and calls for no interference in the present proceedings.
But leaving aside this documentary evidence which has the aforesaid tell-tale effect let us new turn to the oral evidence with a view to finding out whether the appreciation there of by the learned Single Judge of the High Court and as confirmed by the Division Bench of the High Court in Letters Patent Appeal suffers from any gross error which requires to be rectified in the present proceedings. In order to prove the execution of the suit agreement plaintiff witness no.1 Nahur Chand, Advocate was examined by the plaintiff. As there is not dispute regarding the execution of the suit agreement the evidence of the said witness is not of much relevance so far as the present dispute is concerned. The second witness examined by the plaintiff was Amrit Lal son of Sadhu Ram, P.W.2. He was an attesting witness to the suit agreement. Evidence of this witness also falls in line with the evidence of P.W.1 and concerns the execution of the suit agreement. Therefore, it is equally irrelevant for deciding the present controversy. Bharat Mittal, P.W.3 is a witness for proving the extension of the period for execution of the sale deed as per Ex. P-2. In his cross-examination it has been brought about that there was a dispute between defendant no.1 and his brother regarding the property in dispute and as such the date for execution of the sale deed was extended. The evidence of this witness shows that defendant no.1 was not in a position to execute the sale deed in favour of the plaintiff pursuant to the suit agreement within the time limit. i.e., December 1973 because of the dispute with his brother as his brother was having 1/2 undivided share in the entire house of 14 marlas cut of which defendant no.1 was having ownership of 7 marlas which was covered by the suit agreement Ex. P-1. Evidence of this witness, therefore, justifies the subsequent conduct of defendant no.1 in trying to dispose off the suit property and get ready money as soon as possible so that he could dispose off his 1/2 undivided interest in the property and walk away with the cash consideration of at least Rs.
50,000/- even after suffering a loss of Rs. 10,000/- may not waiting to comply with the suit agreement till June 1974.
Subsisting dispute between defendant no.1 and his brother might have prompted defendant no.1 to hurriedly sell off his undivided interest in the suit property without waiting till 30th June 1974. P.W.4 Shri Jagan Nath, Advocate was an attesting witness to the extension document Ex. P-2. In cross-examination the witness stated t hat Kishan Chand, guardian of minor defendant no.2 was not present at the time of the execution of agreement Ex.P-2. He had no talk with Kishan Chand regarding the execution of agreement Ex. P-2.
This supports the case of defendant no.2's guarding Kishan Chand that he never knew about the suit agreement or its extension Ex.P-2. Plaintiff's next witness is Surinder Kumar P.W.5 who was scribe of suit agreement Ex.P-1. In his cross- examination he stated that he did not remember if Kishan Chand, guardian of minor defendant no.2 was present at the time of execution of agreement Ex. P-1. He could not say if h e had any talk regarding the execution of agreement Ex. P- 1 with Kishan Chand. The evidence of P.W.5 runs parallel to t he evidence of P.W.4 and clearly indicates that guardian of defendant no.2 was not in know of either the suit agreement Ex. P-1 or the extension agreement Ex. P-2.
Evidence of P.W.6 Prem Kishan does not throw any light on this moot question. Plaintiff himself was examined as P.W.7.
In his examination-in-chief he nowhere stated about defendant no.2 through his guardian having any knowledge about the suit agreement. Shri Sachar, learned senior counsel for the plaintiff in this connection submitted that as initial burden to prove this issue was on defendant no.2 plaintiff could lead only rebuttal evidence in this connection after defendant no.2's evidence was led on this aspect. We will refer to the rebuttal evidence later on.
Suffice it to say that when the plaintiff came to the witness box as P.W.7 in the first instance nowhere in his examination-in-chief he even whispered about the latter transactions by defendant no.1 in favour of defendant nos.2 and 3 to have been entered into by them with knowledge of plaintiff's agreement though he had joined defendant nos.2 and 4 in the suit on that basis. In this connection it is interesting to refer to paragraph 3 of the plaint which reads as under :
"8. Plaintiff has learnt that defendant No. 1 has transferred the house to Shri Lalit s/o Kishan Chand of Moga Mandi 1/2 share and one Jagir Singh 1/2 share. Then Jagir Singh transferred 1/2 share purchased by him in favour of Shri Lalit Mohan s/o Kishan Chand of Moga Mandi defendant No.2. These transactions have been effected without consideration with notice of the agreement of sale in favour of plaintiff. Moreover these transactions are fraudulent. Shri Lalit Mohan is minor, Kishan Chand father of Lalit Mohan was in the run for the purchase of the house in dispute but he failed and now defendants and Kishan Chand have conspired to harm the plaintiff." Despite this clear case put up by the plaintiff in his plaint when he entered the witness box as P.W.7 he did not think it fit even to whisper about the transaction of defendant nos.2 and 3 being entered into with knowledge of suit agreement to sell in favour of the plaintiff. In cross- examination plaintiff stated that the house was lying vacant at the time of the execution of the agreement and that defendant no.1. This statement of plaintiff in his cross- examination is patently false for the simple reason that defendant no.1 had already entered into a registered usufructuary mortgage deed two months prior to the suit agreement and consequently the house would never have been vacant at the time of the execution of the agreement to sell as it would have been in possession of either the usufructuary mortgagee or any tenant on his behalf. But in any case it would never be lying vacant at the time of the execution of the suit agreement. It must, therefore, be held that plaintiff tried to make a totally false case in his cross-examination on this aspect and did not appear to have any regard for truth. It is in that light that we have to appreciate what he stated in the last four lines of his cross-examination when he deposed that he did not even talk to anybody regarding the transaction in dispute. In December 1973 when he had a talk with Kishan Chand only two persons were present at that time. The said statement of his to say the least is totally laconic once having said that he did not remember if he had any talk with anyubody regarding the transaction in dispute, it is difficult to appreciate how in the next breath he could say that he had a talk with Kishan Chand. It is also pertinent to note that he had not courage to mention that the said talk pertained to the suit agreement. But even that apart in December, 1973 when the extension agreement Ex. P-2 was entered into defendant no.2's father was not present as clearly admitted by P.W.4 Jagan Nath in his cross-examination to which we have made a reference earlier. Thus the plaintiff's aforesaid version regarding the talk with Kishan Chand as revealed from the last lines of his cross-examination stands completely falsified by his own witness Jagan Nath P.W.4 and also by his own laconic statement aforesaid. It is also obvious that his version of the plaintiff does not stand the test of probability for the simple reason that if that were so defendant no.2 through his guardian would not have entered into two suit transactions piecemeal as reflected by the documents to which we have made a reference earlier especially when it was in the interest of defendant no.1 not to divulge about the suit agreement to these prospective purchasers as that would have sabotaged his efforts to sell off his property and to encash his interest in the suit property even by suffering a loss of Rs, 10,000/-, as noted earlier. Defendant no.1 was examined as D.W.1. In his cross- examination he stated that a partition suit was pending between him, his brother and his father and that was compromised on 2nd or 3rd January 1974. It appears that only thereafter that he sold off a part of the suit property to Jagir Singh and thereafter another part to defendant no.2 D.22.1 Vidya Prakash son of Dev Raj was an attesting witness to sale deed Ex. D-2 by which defendant no.1 sold his remaining 1/2 interest in the suit property to defendant no.2 for Rs. 30,000/-. Witness stated that at the time of the document Kishan Chand was in the possession of the house. Witness denied t he suggestion that he was tendering false evidence on account of his relationship with Kishan Chand. Witness Jagtar Singh D.2.W.2. was an attesting witness to Ex.D-1. As these transactions are not in dispute we need not dilate one evidence of these witnesses. Kishan Chand was examined as D.2.W.5. He is the guardian of defendant no.2. On the question about his knowledge of the suit agreement he stated in his examination-in-chief that he was not aware of any transaction between he plaintiff and defendant no.1. Jagan Nath, plaintiff or any person never talked to him about agreement of sale in favour of the plaintiff. This statement of his in his examination-in-chief is not at all challenged in the cross-examination on behalf of the plaintiff. He had stated in his examination-in-chief that he had taken the house in dispute before sale as a tenant. Earlier he took the house from defendant no.1 Jagdish Rai and later he stated paying rent to mortgagee Rajinder Singh. It has to be kept in view that Rajinder Singh was the mortgagee in possession under usufructuary mortgage Ex. D-3 as noted earlier. Therefore, his version that earlier he was a tenant of defendant no.1 and thereafter started paying rent to the mortgagee in possession Rajinder Singh stands well corroborated by the registered Mortgage Deed Ex. D-3. In this cross-examination it was brought out that no rent note was executed by him in favour of Jagdish Rai, Jagir Singh defendant no.3 or Rajinder Singh, the mortgage in possession. But he re- affirmed that he used to pay Rs. 500/- as rent, but the payment of rent was not entered in his account books.
Learned senior counsel Shri Sachar vehemently contended in the light of this evidence that this witness cannot be believed about his alleged tenancy of the suit property as he had nothing to show that he h ad paid rent of Rs. 60/- per month to any o f the aforesaid persons. There was no documentary evidence in this connection. It h as to b e kept in view that his house was said to be occupied by the witness Kishan Chand as a residential premises. He was not carrying on any business in the said premises. No such case is put up by even the plaintiff. Therefore, merely because he had not entered the payment of Rs. 50/- in his account books it would not be clinching circumstance for disproving defendant no.2's father's tenancy. On the contrary in his cross-examination he reiterated that he used to pay Rs. 50/- to Rajinder Singh as the house was under mortgage with him.
As noted earlier, this part of his statement is fully corroborated by the clinching documentary evidence of usufructuary mortgage Ex. D-2 in favour of Rajinder Singh which had seen the light of the day months prior to the suit agreement in favour of the plaintiff. Our attention was invited by Shri Sachar, learned senior counsel for the plaintiff, to the further evidence in cross-examination of witness Kishan Chand to the effect that it is correct that he was anxious to purchase the house prior tot he agreement but he did not know when the agreement was executed. It is difficult to appreciate how the said statement contra- indicates his theory of being a tenant of the suit house or that it visits him with the knowledge of the suit agreement.
When he h ad clearly stated that he did not know when that agreement tool place, his statement that he was anxious to purchase the house prior to the agreement only shows that he was anxious to purchase even prior to the date on which the suit agreement came to be executed. That has reference to the time of execution of such agreement and has nothing to do with the knowledge about the suit agreement with defendant no.2's guardian, as tried to be suggested by Shri Sachar for the plaintiff. In the light of this evidence, therefore, learned Single Judge was right in his view that defendant no.2's father was a sitting tenant of the suit houses and because he was anxious to purchase the house he purchased the same in two instalments, as seen earlier. Shri Sachar, learned senior counsel for the plaintiff in this connection submitted that if defendant no.2 was held to be a sitting tenant of the house it would be obvious, as held by the Trial Court, that he would come to know about the suit agreement as the plaintiff had stated that he had visited the suit house at the time of the execution of the suit agreement. It is difficult to appreciate this contention for t he simple reason that when the plaintiff stated in his deposition as P.W.7 that he had visited the house which was lying vacant at the time of the execution of the agreement, his said version is found to be a false one, as discussed earlier. It is well established on record that as the suit house was not vacant by the time suit agreement was executed as it was already under usufructuary mortgage of Rajinder Singh, plaintiff's version that when he visited the house it was vacant has to be held to be a concocted one.
Consequently it must be held that witness Kishan Chand was right when he contended that he was a sitting tenant of the house who was paying rent earlier to defendant no.1 and thereafter to the usufructuary mortgage Rajinder Singh and that the statement of the plaintiff that he visited the house at the time of suit agreement was not believable.
Consequently there was no occasion for defendant no.2's father to ever come in contact with the plaintiff prior to his sale transaction. On the contrary his version that he had no talk with the plaintiff regarding the said transaction not did he talk about the same prior to his purchase as deposed to in his examination-in-chief had remained unchallenged in his cross-examination and, therefore, this version of his was rightly accepted by the learned Appellate Judge. When we turn to the rebuttal evidence of plaintiff P.W.7 we find that he has tried to make out a new case which was not deposed to by him even earlier. In his rebuttal evidence he stated that the day he went to see the house in dispute it was Jagdish Rai who had the keys with him and had shown the house after opening the door. This version of his is completely falsified by the fact that the house was in possession of usufructuary mortgagee or his tenant defendant no.2 and the keys thereof could never have been with defendant no.1. It, therefore, becomes clear that the witness had no regard for truth. His further evidence in rebuttal that he talked three times with Kishan Chand about having entered into agreement with defendant no.1 regarding purchase of house is clearly falsified by the fact that earlier when he entered the box he never whispered about the same. Not only that but in cross-examination at the stage of rebuttal evidence he stated that he did not remember about his having talk with his in the plaint nor in his earlier deposition he had ever stated to that effect. It is difficult to appreciate how he missed to state this vital aspect of the matter to his advocate earlier when he got his plaint drafted and also at the stage of his earlier evidence on oath. It, therefore, becomes clear that at the stage of rebuttal he tried to make out a new case which was neither pleaded by him nor deposed to earlier and it was clearly an afterthought and a false version. In the light of the aforesaid oral evidence, therefore, the conclusion reached by the learned Single Judge of the High Court that defendant no.2 through his guardian was a bona fide purchaser for value without notice of the suit agreement, stands well established. The documentary as well as oral evidence leave no room for doubt that the aforesaid findings are well sustained on the record of the case and call for no interference in the present appeal.
Learned senior counsel Shri Sachar for the plaintiff, however, was right when he contended that the learned Single Judge of the High Court was in error when he took the view that because Kishan Chand was a sitting tenant he had a better right to purchase the property. Such a right of pre- emption obviously was not even pleaded by defendant no.2, nor was it supported by learned senior counsel Shri Verma for the contesting defendant, defendant no.4. Learned senior counsel Shri Sachar was also right when he contended that the learned Single Judge was in error when he took the view that because the time for execution of the sale deed had expired on 30th December 1973 there was nothing wrong in defendant no.1 selling off the property in January, 1974 onwards. Shri Verma, learned senior counsel for the respondents fairly stated that the said reasoning of the High Court cannot be sustained in the light of Ex. P-2 extending the time upto 30th June 1974. But the said errors demonstrated by learned senior counsel Shri Sachar for the plaintiff from the judgment of the learned Single Judge of the High Court cannot shake the main foundation of the finding reached by the learned. Appellate Judge, namely, that defendant no.2's father Kishan Chand was a bona fide purchaser of the suit house without notice of suit agreement.
Learned senior counsel for the appellant also invited out attention to the written statement of defendant no.1, especially para thereof, wherein it is stated that plaintiff had committed breach of contract, market h ad come down and due to the fact that there was an agreement between the plaintiff third persons were not willing to pay the market value. As a matter of fact defendant no.1 suffered a loss of Rs. 10,000/- on account of breach of contract on behalf of the plaintiff. Learned senior counsel for the appellant on the basis of these averments of defendant no.1 in his written statement, submitted that when defendant no.1 himself had come with a case that third parties were not willing to pay market value because of the agreement of defendant no.1 with the plaintiff it would be obvious that a third party like defendant no.2 must have knowledge about the agreement. It is difficult to appreciate this contention. Whatever defendant no.1 might have stated in the written statement, at the stage of his evidence before the court when defendant no.1 examined himself as D.W.1 no such case was put to him on behalf of the plaintiff. Not did he state to that effect in his evidence. Not only that similar case was not even put to defendant no.2's guardian Kishan Chand when he was examined as D.2.W.5. Therefore, the bald assertion of defendant no.1 in the written statement merely remained as such. It was next contended that when defendant no.1 sold a part of the suit property for Rs. 20,000/- to Jagir Singh as per Ex. D-1 on 23rd January 1974 it was most unnatural for Jagir Singh to sell the very same property within two months on 27th March 1974 as per Ex. D-4 to defendant no.2 by getting a profit only of Rs. 1,000/- and, therefore, all these documents appear to be a part of a common conspiracy to frustrate the plaintiff's agreement. We fail to appreciate how this contention can at all be advanced by learned senior counsel for the appellant to foist knowledge of plaintiff's agreement with defendant no.1 on defendant no.2. Whether Jagir Singh was justified in selling within two months the property purchased by him by getting profit only of Rs. 1,000/- or not, is a circumstance which has no bearing on this moot question. On the contrary it suggests that at the relevant time when defendant no.2 was a sitting tenant Jagir Singh might have been persuaded to sell off the property purchased by him by getting profit of only Rs. 1,000/-. That also indicates that the price of property might not have got higher escalation in those days and the real estate market appeared to have remained almost steady. To say the least it is an equivocal circumstance which cannot conclusively establish that defendant no.2 had knowledge of plaintiff's agreement when he entered into this transaction with Jagir Singh. It is of course true, as rightly pointed out by learned senior counsel for the appellant Shri Sachar, that the time limit for execution of the sale document as per plaintiff's agreement with defendant no.1 which was to expire on 30th December 1973 was extended at the request of the vendor defendant no.1 upto June 1974. But that would not necessarily show that when defendant no.1 entered into sale deed in favour of defendant no.2 as per document Ex. D-2 dated 02nd April 1974 defendant no.2 must have got knowledge about the plaintiff's agreement by that time. Nor would it show that defendant no.1 when he sold the half of its interest in the suit property to Jagir Singh as per Ex. D-1 on 23rd January 1974 he would have conveyed to Jagir Singh that there was already an agreement entered into by defendant no.1 with the plaintiff. On the contrary, as seen earlier, it is probable that he would never convey this fact either to Jagir Singh or to defendant no.2 as then they would get scared and would not like to enter into sale transactions and pay consideration money to defendant no.1 pursuant to those two sale documents.
Consequently even on the touchstone of broad probabilities it is difficult to appreciate how it could be said that defendant no.2 must have got knowledge of the suit agreement when he purchased part of the suit property from defendant no.1 or that his vendor Jagir Singh had knowledge about the suit agreement when defendant no.1 sold his half interest in the suit property to said Jagir Singh.
Before parting with the discussion on this point, we may refer to a decision of this court in the case of Dr.
Govindas and another v. Smt. Shantibai and others [IAR 1972 SC 1520]. In paragraph 14 of the Report Sikri, CJ., while appreciating the evidence in the said case has made the following observations :
"It will be noticed that the evidence is contradictory and we have to decide whose version is more acceptable. The learned counsel for the appellants contended that the onus of proof was very light on the appellants and they had discharged it by entering t he witness box and stating that they had no knowledge.
We are unable to agree with him that in the circumstances of this case the onus was light on the appellants. The circumstances that tell heavily against the version of the appellants are these. First, all the parties are residents or have shops in the same vicinity and in places like this it is not probable that the appellants of the agreement (Souda Chitthhi) of the plaintiff. Secondly, the haste with which the sale deed in favour of the appellants was executed was unusual. It is more usual for an agreement to be executed in such cases rather than arrive at an oral agreement on one day an d have the sale deed executed the next day and registered the following day. For some reason the appellants were in a hurry to get the deed registered.
What was the reason? In view of all the circumstances we are inclined to accept the evidence of Ham Raj Chouhan, and corroborated by Hayat, that Goverdhandas knew of the execution of the agreement with the plaintiff on March 1, 1960." It is difficult to appreciate how the aforesaid observations of this Court can be of any avail to the learned senior counsel for the plaintiff in peculiar facts of this case to which were have made a detailed reference earlier. In the aforesaid case because the parties were residents and having shops in the same vicinity it was found not probable that the appellant could not come to know about the execution of the agreement. It was also observed that the appellant was in great hurry to sell without an agreement to sell. In the light of the said evidence before this Court the conclusion was reached that evidence of Hem Raj Chouhan and corroborated by Hayat that the appellant knew of the execution of the agreement had to be accepted.
This Court also placed reliance on the further evidence in that case as noted in paragraph 15 of the Report that the appellants were seen measuring that shops and the property in dispute and their denial that they did not measure the property in dispute was futile. It become at once clear that the aforesaid decision was rendered by this Court on its own peculiar facts and cannot be of any universal application.
As we have noted earlier the facts of this case are entirely different and the telltale circumstances emerging on record of this case clinchingly point out against the plaintiff and in favour of defendant no.2 so far as this point is concerned. Point No.1 is accordingly answered in the negative against the plaintiff appellant and in favour of the respondents, especially respondent no.4.
Point No.2 In view of our finding on Point No.1 against the plaintiff this point does not survive for consideration.
Point No. 3 Before parting with this appeal it may be mentioned that Shri Verma, learned senior counsel for defendant no.4 in order to buy peace and to put an end to this litigation fairly stated on behalf of defendant no.4 that even though plaintiff has been awarded damages of Rs. 10,000/- against defendant no.1 by the learned Single Judge and which decree has been confirmed by the Division Bench of the High Court, defendant no.4 would not mind in paying an amount of Rs.
1,00,000/- to the plaintiff to avoid heart-burning, if any, for the plaintiff. We appreciate this fair stand taken by learned senior counsel for defendant no.4 and accordingly while disposing of this appeal and confirming the judgement and order passed by the learned Single Judge and the Division Bench of the High Court, grant additional benefit to plaintiff-appellant by way of fair concession from defendant no.4 to the effect that defendant no.4 shall pay an amount of Rs. 1,00,000/- to the plaintiff towards full and final satisfaction of his claim for damages in the present case in lieu of decree for specific performance.
This will be in addition to the decree of Rs. 10,000/- of damages with interest already awarded to the plaintiff.
Appeal stands dismissed subject to the modification that the plaintiff's suit will also stand decreed to the extent of R s. 1,00,000/- against defendant no.4. Appeal disposed of accordingly. In the facts and circumstances of the case there will be no order as to costs.
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