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KASHMIRA SINGH. versus ATMA SINGH & ORS.

High Court of Punjab and Haryana, Chandigarh

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Kashmira Singh. v. Atma Singh & Ors. - RSA-52-2003 [2007] RD-P&H 831 (24 January 2007)

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

R.S.A. No. 52 of 2003

Date of Decision: 22.12.2006

Kashmira Singh.

.............. Appellant

Versus

Atma Singh and others.

........... Respondents

CORAM: Hon'ble Mr.Justice Mahesh Grover
....

Present: Shri D.S.Brar, Advocate for the appellant.

Shri S.S.Swaich, Advocate for respondent no.1.

....

Mahesh Grover,J.

This Regular Second Appeal is directed against judgment and decree dated 10.9.2002 of the Additional District Judge, Ludhiana (hereinafter described as `the lower Appellate Court').

The plaintiff-respondent no.1, Atma Singh, filed a suit for joint possession of the land in dispute by way of specific performance of the agreement to sell dated 16.7.1990 in respect of land measuring 4 kanals situated in the revenue estate of Punian, Tehsil Samrala, District Ludhiana upon payment of balance sale consideration of Rs.12750/- after adjusting R.S.A.No.52 of 2003

...

the earnest money of Rs.10,000/- or in the alternative, for recovery of Rs.10,000/- on account of earnest money and Rs.10,000/- as damages and interest. A declaration was also sought to the effect that the decree dated 14.9.1991 passed in civil suit no.42 of 31.1.1991 in favour of the appellant (arrayed as defendant no.3 in the suit), Kashmira Singh be declared null and void and along with this, a prayer for permanent injunction was also made seeking to restrain the defendants from alienating the suit property.

It was pleaded that Malkiat Singh, defendant- respondent no.2 was the owner of the suit land and he had executed an agreement dated 16.7.1990 to sell the same in favour of respondent no.1 at the rate of Rs.45,500/- per killa and agreed to execute and get registered the sale deed up to 15.6.1991. The earnest money of Rs.10,000/- from the sale consideration was paid at that time. In the event of the failure of the vendor, it was agreed that the sale deed could be executed through the intervention of the Court and in the alternative, the vendee would be entitled to recover a sum of Rs.20,000/-. Malkiat Singh failed to perform his part of agreement and rather, started making attempts to alienate the suit land in favour of some third party which resulted in a suit for permanent injunction having been filed by respondent no.1 on 28.8.1990. Malkiat Singh was restrained from alienating the suit land in favour of any other person vide stay order dated 29.11.1990 till the date of execution of the sale deed according to the agreement dated 16.7.1990, i.e. 15.6.1991 as per the stipulation contained therein. On the said date i.e. 15.6.1991, the suit for permanent injunction became infructuous. The balance sale consideration was tendered to Malkiat Singh on 13.6.1991 and respondent no.1 remained present in the office of R.S.A.No.52 of 2003

...

Sub Registrar, Samrala on 14.6.1991 because 15.6.1991 was a gazetted holiday. On 17.6.1991, respondent no.1 again remained present in the office of Sub Registrar, Samrala, but Malkiat Singh did not turn up.

On the strength of the above pleadings, it was contended that respondent no.1 had always been ready to perform his part of agreement, but the vendor had defaulted in performing his part of agreement. The sale deed executed on 12.11.1991 in favour of appellant was sought to be declared as false and fictitious document.

The suit was contested by Gurdev Singh, who was arrayed as defendant no.2, the general power of attorney of Malkiat Singh, vendor (arrayed as defendant no.1). The execution of the agreement dated 16.7.1990 in favour of respondent no.1 was denied and it was pleaded that the said document is forged, fictitious and without any consideration. It was pleaded that civil suit no. 42 of 31.1.1991 had been decreed and the sale deed had been validly executed in favour of the appellant, who has become owner in possession of the suit land. It was further pleaded on the strength of the aforesaid contentions that the suit be dismissed with costs.

Appellant-Kashmira Singh (arrayed as defendant no.3 in the suit) also filed written statement controverting the averments of respondent no.1. He pleaded that Malkiat Singh had no right to execute any agreement to sell in favour of respondent no.1 because he had already executed an agreement dated 26.12.1989 to sell the suit land in his favour. The decree dated 14.9.1991 was passed in his favour and against Malkiat Singh and sale deed dated 12.11.1991 has already been executed in his favour on the basis of agreement dated 26.12.1989. That apart, it was also contended that R.S.A.No.52 of 2003

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the principle of lis pendens was not applicable to the sale deed dated 12.11.1991 because it had been executed in compliance of a valid decree dated 14.9.1991 by Gurdev Singh, the general power of attorney of Malkiat Singh.

On the pleadings of the parties, the following issues were framed:-

1. Whether the defendant Malkiat Singh entered into an agreement dt. 16.7.90 to sell the suit land in favour of the plaintiff and received a sum of Rs.10,000/- as earnest money?OPP

2. Whether the plaintiff has always beenready and willing to perform his part of agreement?OPP

3. Whether the plaintiff is entitled to the joint possession of the suit land by way of specific performance of the agreement of sale dt. 16.7.90?OPP

4. If issue no.3 is not proved, whether the plaintiff is entitled to recovery of Rs.20,000/- from the defendant as alternative relief?OPP

5. Whether defendant no.1 executed an agreement of sale dt. 26.12.1989 in favour of defendant no.3, if so, its effect?OPD

6. Whether the judgment and decree dated 14.9.91 passed in civil suit no.42 of 31.1.91 by Sub Judge Ist Class, Samrala is wrong, illegal, collusive and void, and has no effect o the rights of the plaintiff regarding the suit land created by agreement of sale dt. 16.7.90?OPP

R.S.A.No.52 of 2003

...

7. Whether the sale deed dated 12.11.1991 (Wasika no.2538) is wrong, collusive, without consideration and void and the same is liable to be cancelled?OPD

8. If issue no.1 proved, whether the agreement of sale dated 16.7.1990 is the outcome of fraud and

misrepresentation?OPD

9. Whether defendant no.1 was not competent to execute the agreement of sale dt. 16.7.1990 in view of prior agreement dated 26.1.1989 (sic-26.12.1989)?OPD3

Respondent no.1, in order to prove his case, had examined himself as PW1; PW2-Ram Gopal, Deed Writer; PW3-Sadhu Singh, Numberdar; PW4- Pritam Singh, Clerk to Shri P.S.Gill, Advocate; PW5- Netar Singh, Registration Clerk, Tehsil Office, Samrala; PW6- Dalbir Singh, Clerk of the office of S.D.M., Samrala. The documentary evidence in the shape of agreement to sell dated 16.7.1990 (Exhibit P1), Endorsement thereon (Exhibit P1/A), affidavit dated 14.6.1991 (Exhibit P2), copy of stay order dated 29.11.1990 (Exhibit P3) and certified copy of the plaint in civil suit no.750 of 29.8.1990 (Exhibit P4/A) has also been led to substantiate the case of respondent no.1.

The appellant examined himself as DW1 and also examined Gurdev Singh as DW2. The evidence of Finger Print Expert along with other witnesses has also been led. Agreement dated 26.12.1989 (Exhibit D2), entry in the register of PW2 ( Exhibit D1), judgment and decree in the previous suit (Exhibits D4 and D5), registered notice sent to Malkiat Singh and postal receipt (Exhibits D6 and D7), photocopy of the general power of R.S.A.No.52 of 2003

...

attorney of Malkiat Singh in favour of Gurdev Singh (Exhibit D8) were the primary documents relied upon by the appellant, apart from various other documents.

After appraisal of the entire evidence on record and hearing the learned counsel for the parties, the Civil Judge (Junior Division), Samrala (hereinafter referred to as `the trial Court'), vide her judgment and decree dated 27.4.1999, granted the alternative relief of recovery of Rs.20,000/- to respondent no.1.

Dis-satisfied with the above judgment and decree of the trial Court, respondent no.1 went in appeal before the learned lower Appellate Court, who accepted the appeal and decreed his suit for primary relief of joint possession by way of specific performance of agreement to sell dated 16.7.1990 vide its judgment and decree dated 10.9.2002.

Feeling aggrieved by the decision of the lower Appellate Court, the appellant has filed the Regular Second Appeal.

Shri D.S.Brar, learned counsel for the appellant contended that the agreement to sell in favour of the appellant was prior in time having been executed on 26.12.1989. The power of attorney in favour of Gurdev Singh, who had executed the agreement in favour of the appellant, was also admitted by vendor-Malkiat Singh. The sale deed had also been executed in pursuance to the agreement to sell. These factors taken together lent credibility to the action of the vendor in favour of the appellant and the findings of the learned lower Appellate Court are perverse and based on conjectures. Once a valid sale deed had been executed, then the learned lower Appellate Court was wrong in declaring the same as null and void and R.S.A.No.52 of 2003

...

that the trial Court was perfectly right in exercising its discretion under Section 20 of the Specific Relief Act,1963 (for short, `the Act').

Learned counsel for respondent no.1, on the other hand, contended that both the Courts below had recorded concurrent findings of fact regarding the validity of the agreement to sell in favour of respondent no.1 and these cannot be interfered with in a Regular Second Appeal.

Besides, no substantial question of law has been shown to have arisen. It was further contended that the sale deed was hit by the principle of lis pendens.

I have heard learned counsel for the parties and have also perused the record.

There is absolutely no doubt that the agreements to sell in favour of the appellant and in favour of respondent no.1 were validly executed documents, but the question that is to be determined is as to whether an agreement executed prior in time in favour of the appellant could be defeated by the vendor by executing another agreement or that even if it had been executed, whether the sale deed in favour of the appellant validly executed could be set aside without exploring the possibility of grant of an alternative relief as is contemplated under the provisions of the Act.

Concededly, the learned counsel for respondent no.1 could not show any thing which could persuade this Court to form an opinion that the agreement to sell in favour of the appellant was not an valid agreement.

Malkiat Singh, the vendor, had admitted in his statement that he had executed power of attorney in favour of Gurdev Singh, who had executed R.S.A.No.52 of 2003

...

the agreement to sell dated 26.2.1989 in favour of the appellant. Both the Courts below have recorded this finding. The sale deed was executed pursuant to decree dated 14.9.1991 passed in civil suit no. 42 of 31.1.1991.

The decree in the aforesaid suit clearly mentions that the sale deed shall be executed within a period of two months, failing which the appellant was entitled to get it executed and registered through Court. In so far as the injunctive suit was concerned, it was inter se between respondent no.1 and Malkiat Singh, vendor and the appellant was not a party to it and hence, not binding on him. In view of these peculiar facts, the learned lower Appellate Court was clearly in error by proceeding on conjectures to say that the agreement to sell in favour of the appellant was ante-dated and was the result of a collusion between vendor- Malkiat Singh and the appellant, who are said to be uterine brothers. There was no evidence to that effect and merely because the appellant and vendor-Malkiat Singh were related to each other, could not, in itself, be the basis of a presumption of collusion. The finding of the learned lower Appellate Court on this issue was clearly perverse. Once a valid sale deed had come into existence, then it became the duty of the Court to examine the evidence on record to see whether the sale deed was validly executed and was free from any blemish of fraud or misrepresentation and then evaluate as to whether the subsequent agreement in favour of respondent no.1 was worthy of being executed or that in the given circumstances, substantial justice could be done to the parties by exploring the possibility of alternative relief as stipulated under Section 20 of the Act, which reads as under:-

"20. Discretion as to decreeing specific performance.-(1) The R.S.A.No.52 of 2003

...

jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:- (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or

where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation 1.- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the R.S.A.No.52 of 2003

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meaning of clause (a) or hardship within the meaning of clause (b).

Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party." A reading of the above extracted provisions shows that Section 20 of the Act is primarily aimed at situations which render a particular agreement unenforceable in the given facts and circumstances of the case. A discretion has been vested in the Courts to examine the question of an alternative relief which power is to be exercised in order to do substantial justice between the parties. Whether a discretion can be exercised or whether it has been rightly exercised has been held to be a question of law by the Hon'ble Supreme Court of India in the judgments reported as AIR R.S.A.No.52 of 2003

...

1996 S.C. 2814-Lourdu Mari david and others Versus Louis Chinnaya Arogiaswamy and others and (2005) 7 S.C.C. 60 -Rajeshwari Versus Puran Indoria. In the first case, it was held as under:- "Under Section 20 of the Specific Relief act, the decree for specific performance is in the discretion of the Court but the discretion should not be refused arbitrarily. The discretion should be exercised on sound principles of law capable of correction by an appellate court."

In the second case, their Lordships of the Apex Court observed as under:-

"Normally, a suit for specific performance of an agreement for sale of immovable property involves the following questions: (1) whether the plaintiff was ready and willing to perform his part of the contract in terms of Section 16 of the Specific Relief Act,1963, (2) whether it was a case for exercise of discretion by the court to decree specific performance in terms of Section 20 of the Specific Relief Act, and (3) whether there were laches on the part of the plaintiff in approaching the court to enforce specific performance of the contract. In some cases, a question of limitation may also arise in the context of Article 54 of the Limitation Act,1963 on the terms of the agreement for sale.

Other questions like the genuineness of the agreement, abandoning of the right to specific performance, a novation and so on, may also arise in some cases. No doubt, a finding o the tree primary aspects indicated above would depend upon the R.S.A.No.52 of 2003

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appreciation of the pleadings and the evidence in the case in the light of the surrounding circumstances. These questions, by and large, may not be questions of law of general importance.

But they cannot also be considered to be pure questions of fact based on an appreciation of the evidence in the case. They are questions which have to be adjudicated upon, in the context of the relevant provisions of the Specific Relief Act and the Limitation Act (if the question of limitation is involved).

Though an order in exercise of discretion may not involve a substantial question of law, the question whether a court could, in law, exercise a discretion at all for decreeing specific performance, could be a question of law that substantially affects the rights of parties in that suit. Therefore, in the case on hand, the High Court was not justified in dismissing the second appeal in the manner in which it has done. (Emphasis supplied).

Examining this case in the afore-stated perspective, it is clear that in view of the fact that a valid agreement was subsisting in favour of the appellant which had fructified in to a valid sale deed pursuant to a decree dated 14.9.1991 of the Court, the agreement to sell in favour of respondent no.1 had been rendered inexecutable. The trial Court was, therefore, right in exercising its power under Section 20 of the Act by granting alternative relief to respondent no.1. There is, thus, no hesitation to set aside the judgment and decree dated 10.9.2002 passed by the learned lower Appellate Court and restore the judgment and decree dated 27.4.1999 of the trial R.S.A.No.52 of 2003

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Court.

In view of the above discussion, the appeal is allowed. The judgment and decree dated 10.9.2002 of the lower Appellate Court are set aside and those of the trial Court are restored.

December 22,2006 (Mahesh Grover )

"SCM" Judge


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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