Thursday 29 January 2015

Whether suit for specific performance of contract can be filed before expiry of period envisaged by agreement of sell?

As regards the launching of the original suit pre-mature, the law is settled in this regard. Lucknow Bench of Hon’ble Allahabad High Court in case of Harihar Prasad and Others v. Udaibir Singh & Another, 1978 AWC 79, relying on certain other judgments inasmuch as the Privy Council also, held that suit for specific performance of the contract under Section 9 of the Specific Relief Act could not have been filed before the expiry of period envisaged by agreement because the cause of action arises only after the time for performing the contract expires. So, in the instant controversy, the plaintiffs could have filed the suit only after 1.3.2007 and not before.
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
SECOND APPEAL NO. 10/2014
Mohd. Aslam ……… Defendant/Appellant
Versus
Rais & two Others ………. Plaintiffs/Respondents
Citation; AIR2015 9(NOC) 31 UTR
Read original judgment here; click here
Dated;September 24, 2014
Hon’ble Servesh Kumar Gupta, J.

Both the above-titled appeals have arisen out of the common impugned judgment dated 3.12.2013, so are being adjudicated together herein below.
Before coming to the real issues, it would be pertinent to remind the backdrop of the controversy between the parties which was arisen out of the execution of the registered agreement to sale without possession by the original owner Mohd. Aslam on 28.2.2005 in favour of the plaintiffs. The land was of Khata No. 131, Khasra No. 332, area 0.788 hectare situated in Village Mukkarabpur, Pargana Roorkee. The earnest money rupees one lakh was
2
paid by the purchasers/plaintiffs to Aslm and the total consideration was Rs. 1,30,000/-. Thus, remaining Rs. 30,000/- had to be paid at the time of execution of sale deed at any time within two years i.e. till 1.3.2007. The plaintiffs before the expiry of two years, as aforestated, issued a notice dated 15.11.2006 asking Mohd. Aslam to keep himself present in the concerned registry office on 30.11.2006 and to execute the sale deed. That notice was not even replied by Mohd. Aslam, much less putting his presence as asked. So, the prospective purchasers instituted the Original Suit No. 24/2007 on 3.2.2007 seeking specific performance of agreement in question.
The suit was resisted by Mohd. Aslam mainly on two grounds. The first ground was that the true nature of the agreement in question was not, in fact, to sell the property, but it was a mortgage deed and got executed by the plaintiffs from the defendant Aslam taking the advantage of his constraints of the dire need of money. Otherwise, there was no occasion to keep the execution of the sale deed postponed for two years just to pay the meagre rest of the consideration of Rs. 30,000/-. It was contended that even at the time of execution of agreement to sale, the actual price of the land concerned was more than rupees five lakhs a bigha. So, there was no question for Mohd. Aslam to make the agreement for selling his precious land at throwaway price. Further, the suit was pre-mature, as it could have launched only after the expiry of two years, but the same was instituted almost a month’s ago from the lapse of two years as the impugned covenant discloses.
The learned Trial Judge holding that the agreement, in question, was not in the shape of a mortgage deed, but its actual shape and spirit was an agreement to sale, yet the suit was dismissed on 17.11.2008 mainly on
3
the premise that the same was pre-mature as pleaded by the defendant. It was also the finding of the Trial Judge that the plaintiffs did not show their readiness and willingness in the span of two years for getting the sale deed executed in their favour.
Feeling aggrieved, the plaintiffs filed the First Appeal No. 30/2008 in December 2008 and during the pendency of this First Appeal, the plaintiffs moved an application on 20.4.2011 seeking permission of the appellate court for admitting additional evidence on the record and in this additional evidence, two notices were filed. One notice was dated 21.6.2006 allegedly issued by Aslam through his Advocate Mr. Sanjay Sen to the plaintiffs stating the nature of agreement to sale as a mortgage deed and his non-inclination to sell his land as per terms of that agreement. Another notice dated 24.7.2006 was in reply of the notice of Mr. Aslam issued by plaintiffs through their Advocate Mr. Gulzar Ahmad. After accepting these notices on the record, the appellate court framed the issue no. 8 on 28.5.2012 to the effect whether by sending notice dated 21.6.2006, defendant Aslam had refused to make specific performance of his part of the contract. Opportunity was rendered to adduce the evidence to either parties and this issue was decided by the first appellate court in favour of the plaintiffs. Thus, the finding of the Trial Judge that the suit was pre-mature, as contemplated under Serial No. 54 of the Limitation Act, was overturned. The suit was accepted within the time limitation of three years because Serial No. 54 of the Limitation Act envisages that if no particular date is fixed seeking specific performance of contract, then the time limitation of three years will run from the date when the plaintiff has noticed that the performance is refused by the owner of the land. The finding of the first appellate court
4
was that since Mohd. Aslam had issued a notice to the plaintiffs on 21.6.2006 through his Advocate Mr. Sanjay Sen refusing to execute the sale deed, so the time had started to run since 21.6.2006 and thus the suit launched on 3.2.2007 was well within the limitation as adumbrated above.
It was argued by the learned Counsel of Mohd. Aslam that, in fact, no notice of 21.6.2006 was ever issued to the plaintiffs and it was filed by Rais and his associates in order to bring their suit within the time limitation and this notice was fabricated. It was not got proved by examining the Advocate Sanjay Sen who allegedly sent this notice on behalf of Aslam.
Another development took place during pendency of first appeal. Mohd. Aslam, the original owner of the land, executed a sale deed of the same land in favour of Rao Sadaqat Husain and Mohd. Shoeb (real brothers) on 20.4.2013. When this fact came into the notice of the plaintiff/first appellant Rais and others, they moved an application under Order 1 Rule 10 of Civil Procedure Code on dated 16.7.2013, which was ultimately allowed by the first appellate court and after impleading the brothers duo, the learned first appellate court framed the fresh issues no. 9, 10, 11 to the effect whether the subsequent sale deed by Mohd. Aslam in favour of Rao Sadaqat Husain and his brother Mohd. Shoeb was barred by Section 52 of the Transfer of Property Act and whether the brothers duo were the bona fide purchasers? The matter was remanded back to the Trial Judge for rendering opportunity to the parties concerned to adduce evidence on these issues and the finding was sought thereupon. The learned Trial Judge decided these issues against the defendant and the subsequent purchasers and these findings were affirmed by the learned first appellate court in the impugned judgment
5
with the result now Rao Sadaqat Husain and Mohd. Shoeb are also before this Court in Second Appeal No. 52/2014.
At the time of admission of Second Appeal No. 10/2014, although certain specific questions, as suggested by the appellant, were framed by this Court, but having heard the learned Counsels of all concerned and understanding the controversy in question, I think the crucial points for determination are as under:
(1) Whether the suit was pre-mature and thus could not be entertained by the learned Trial Judge as provided under Serial No. 54 of the Limitation Act?
(2) Whether the nature of the deed (agreement to sale) dated 28.2.2005 was in the spirit of a mortgage deed?
(3) Whether the subsequent purchasers Rao Sadaqat Husain and Mohd. Shoeb were bona fide purchasers of the property in suit for due consideration and thus provisions of Section 52 of the Transfer of Property Act do not engross their transaction with Mohd. Aslam?
I have heard learned Counsels of all concerned and have perused the evidence adduced by all of them on the record.
As regards the launching of the original suit pre-mature, the law is settled in this regard. Lucknow Bench of Hon’ble Allahabad High Court in case of Harihar Prasad and Others v. Udaibir Singh & Another, 1978 AWC 79, relying on certain other judgments inasmuch as the Privy Council also, held that suit for specific performance of the contract under Section 9 of the Specific Relief Act could not have been filed before the expiry of period envisaged by agreement because the cause of action arises only after the time for performing the contract expires. So, in the instant controversy, the plaintiffs could have filed the suit only after 1.3.2007 and not before.
6
The contention of the learned Counsel of the plaintiffs is that by way of issuance of notice dated 21.6.2006, Mr. Aslam had expressed his intention for the cancellation of the agreement to sale dated 28.2.2005, thus giving rise to a cause of action immediately after receiving of such notice by the plaintiffs. This contention of the plaintiffs is not acceptable for the reason that no such notice was ever brought on the record by the plaintiffs neither at the stage of trial before the Court of Civil Judge nor such notice, which was filed after two and half years of presentation of the first appeal, was got proved by the plaintiffs. If they genuinely received such a notice from Mr. Aslam, then there was no reason restraining themselves to bring that notice on record during the first stage of hearing before the Court of Civil Judge. If it is accepted for a moment that they forgot to bring such notice on the record at the trial stage, then the delay of two and half years caused by them in filing the same at the appellate stage on 20.4.2011 has further not been explained. Moreover, it was the onus of the plaintiffs to prove the issuance of such a notice at the end of Aslam and that could have been done by calling Mr. Sanjay Sen, Advocate, in the witness box. The learned lower court has committed an error by shifting the burden of proof on Aslam that he had not given any such notice because a fact can be proved in its affirmation, not in negation.
That apart, simply by calling Mr. Gulzar Ahmad, Advocate, to prove the drafting of reply of such notice is not enough to infer the issuance of notice dated 21.6.2006 by Aslam giving rise to the cause of action to launch the civil suit earlier than its prescribed limit.
The suit was brought on the basis of the notice dated 15.11.2006 issued by the plaintiffs to Mr. Aslam wherein the latter was asked to present himself in the
7
registry office on 30.11.2006, but surprisingly there is no mention of the notice dated 21.6.2006 in the notice dated 15.11.2006. Had Mr. Aslam issued the notice dated 21.6.2006, then there was no reason for the plaintiffs for not mentioning the receiving of such notice in the notice dated 15.11.2006 which was made the basis of launching the suit against Mr. Aslam. Had this notice dated 21.6.2006 been genuine then there was no reason for the plaintiffs to wait for next five months to launch the original suit. This delay of five months indicates the doubt in the genuineness of the notice dated 21.6.2006.
Argument of the learned Counsel of the plaintiffs that this notice dated 21.6.2006 bears the postal stamp does not have any bearing because the seal and particular date of the post office can be procured having connivance with the ministerial staff of the post office.
For the reasons stated hereinabove, this Court is of the view that the suit was the pre-mature and thus barred by the relevant provisions of the Limitation Act.
Now, as regards the nature of the deed is concerned, the Court feels that it was not strictly in the spirit of sale of the questioned property, though a registered agreement to sale without possession was executed which was the basis of the suit. The reason is that the land is almost 12 bighas. So, even in 2005, it was quite mysterious that postponing the payment of only Rs. 30,000/- for two years, the plaintiffs restrained themselves from getting their sale deed executed though paying the consideration of Rs. 1,00,000/- for the same at the time of agreement. The three plaintiffs who were capable to pay Rs. 1,00,000/- at the time of such an agreement, then it is quite difficult to understand that all the three could not pay Rs. 30,000/- in order to get the deed finally executed in their favour and kept the execution of the same pending for
8
as many as next two years. It indicates the strength in the version of Mohd. Aslam that the deed in question though apparently an agreement to sale deed, but in fact, it was in the spirit of a mortgage deed.
For the reasons as have been highlighted, this Court decides the issue in favour of defendant Aslam and against the plaintiff.
Now, the question arises whether the appellants Rao Sadaqat Husain and Mohd. Shoeb, the subsequent purchasers could secure any title over the land, in controversy, on the basis of sale deed dated 20.4.2013 executed by Mohd. Aslam in their favour. Undoubtedly, the property was under lis and any transaction relating thereto was barred by Section 52 of the Transfer of Property Act, but at the same time, this Court has to assess the truthfulness in the pleadings of these subsequent purchasers because they have averred that that they did not have any knowledge regarding the pendency of litigation over the property, in question, and purchased the same from its original owner for due consideration as a bona fide purchaser.
It was argued by their learned Counsel that in such circumstances the transaction in favour of Rao Sadaqat Husain and Mohd. Shoeb is protected under Section 19(b) of the Specific Relief Act, which provides that specific performance of a contract can be enforced even against any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.
The agreement, in question, between Mohd. Aslam and the plaintiffs was way back of 28.2.2005. More than seven years had elapsed since then and the time to execute the sale deed had also elapsed. Then it was quite
9
unjustified to assume that Rao Sadaqat Husain and his brother Mohd. Shoeb must necessarily have notice of the litigation on questioned property just on the basis that one of the plaintiffs is the resident of the same village from where Rao Sadaqat Husain comes. It is pertinent to mention that the land, in question, is situated around 8-9 kilometres away from the place of residence of the subsequent purchasers. So, it is not always necessary that Husain must have knowledge about the pending litigation of the questioned land. There was no stay order ever granted by the first appellate court restraining Mohd. Aslam from alienating the said land. Although the absence of any such stay order is not the protection from the bar which has been provided under Section 52 of the Transfer of Property Act, but at the same time, the rights of bona fide subsequent purchasers are protected under Section 19(b) of the Specific Relief Act.
In view of what has been stated above, the issue is decided accordingly in favour of Rao Sadaqat Husain and his brother Mohd. Shoeb.
All told, these appeals have force and thus allowed. Impugned judgment and order of the first appellate court dated 3.12.2013 is set aside. Lower Court records be sent back.
It may be added that although the back payment of earnest money rupees one lakh has been averred by Mohd. Aslam, but no credible proof is available on the record. Hence, it is hereby ordered that he will return this earnest money rupees one lakh along with nine per cent per annum simple interest calculating from the date of receiving the money till the date of actual payment.
(Servesh Kumar Gupta, J.)

Print Page

No comments:

Post a Comment