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Civil · Reportable judgment

Maharaj Singh & Ors. vs Karan Singh (Dead) Thr. Lrs. & Ors.

Court
Supreme Court of India
Date
9 July 2024
Case No.
Civil Appeal No. 6782 of 2013
Result
Partly allowed
Bench
Abhay S. Oka, Sanjay Karol
Citation
[2024] 7 S.C.R. 396 : 2024 INSC 491
Acts & Sections
Specific Relief Act, 1963 Uttaranchal (The Uttar Pradesh Zamindari… Evidence Act Uttar Pradesh Civil Laws (Reforms and… Registration Act, 1908 TP Act
Supreme Court Reports [2024] 7 S.C.R. 396 : 2024 INSC 491
Issue for consideration
Can the contention that the suit agreement was sham and bogus and not intended to be acted upon be allowed to be raised notwithstanding Sections 91 and 92 of the Evidence Act; Was the suit agreement sham and bogus and not intended to be acted upon; Were the second to fourth defendants bona fide purchasers for value without notice of the suit agreement; Whether, in view of the decision of Supreme Court in B. Vijaya Bharathi, the plaintiffs were not entitled to a decree of specific performance in the absence of any prayer for cancellation of the two subsequent sale deeds; Do the provisions of the Zamindari Abolition Act create a bar on the execution of the sale deed in terms of the suit agreement; Whether the plaintiffs were entitled to a decree of specific performance.
Headnote

Specific Relief Act, 1963 – s.19(b) – Relief against parties and persons claiming under them by subsequent title – Defendantssubsequent purchasers claimed under the sale deeds executed after the execution of the suit agreement, if can be subjected to decree of specific performance – Plea of the defendants that in view of the decision in B. Vijaya Bharathi case, plaintiffs not entitled to decree of specific performance in the absence of prayer for cancellation of the subsequent sale deeds: Held: In two Judges bench decision in B. Vijaya Bharathi, the attention of the Bench was not invited to binding precedent of larger bench in Lala Durga Prasad & Ors. – Hence, the decision in the case of B. Vijaya Bharathi is not a binding precedent and there was no requirement to make a prayer in the plaint for cancellation or setting aside the subsequent sale deeds – Furthermore, in view of s.19(b), the defendants claiming under the sale deeds executed after the execution of the suit agreement can be subjected to a decree of specific performance as the suit agreement can be enforced specifically against such defendants unless they are bona-fide purchasers without the notice of the original contract – When, the defendants-subsequent purchasers fail to prove that they entered into the sale deed in good faith and without notice of the suit agreement, in view of s.19(b), a decree for specific performance can be passed against such defendants – Therefore, in such a case where s.19(b) is applicable, under the decree of specific performance, the subsequent purchasers can be directed to execute the sale deed along with the original vendor – There is no necessity to pray for the cancellation of the subsequent sale deeds – There are concurrent findings of the three Courts on the issue of the readiness and willingness shown by the first plaintiff – No reason to disturb the said findings – However, as the second plaintiff was not interested in getting the specific performance, the decree ought to have been restricted to the undivided one-half share in the suit property in favour of only the first plaintiff – Impugned decree modified. [Paras 15, 16, 19-21]

Evidence Act, 1872 – ss.91, 92:

Read the full headnote (3 more paragraphs)

Held: s.91 excludes oral evidence of the terms of the written document by requiring those terms to be proved by the document itself – s.92 excludes oral evidence for contradicting, varying, adding to or subtracting to such terms – These sections do not prevent parties from adducing evidence on the issue of whether the parties to the documents had agreed to contract on the terms set forth in the document – In the present case, the contention that the deceasedfirst defendant was addicted to vices was never raised in the written statements and the same has come by way of an afterthought in the evidence of the mother of the first defendant – Moreover, the stand of the defendants in their written statement is that the suit agreement was forged – Therefore, on facts, the contention that the suit agreement was got executed from the first defendant with the object to deter him from selling the suit property to meet the demands of his bad lifestyle cannot be accepted – Hence, the suit agreement cannot be held as bogus or sham. [Para 12] Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976 – Registration Act, 1908 – s.17(2)(v) – Transfer of property Act, 1882 – s.3(1) – Defendants-subsequent purchasers claimed under the sale deeds executed after the execution of the suit agreement – Whether they were bona-fide purchasers who paid consideration in good faith without the notice of the suit agreement:

Held: No – Under the 1976 Amendment Act, clause (v) of S.17(2) of the Registration Act 1908 was amended making an agreement for the sale of immovable property, a compulsorily registerable document in the State – In view of explanation 1 to s.3 of the TP Act, the second to fourth defendants shall be deemed to have knowledge of the suit agreement, which was duly registered – It cannot be said that they had no knowledge of the suit agreement in view of the constructive notice or they paid money in good faith to the first Defendant – Therefore, the second to fourth defendants were not bona-fide purchasers who paid consideration in good faith without the notice of the suit agreement. [Para 13] Uttaranchal (The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950) (Adaption and Modification order, 2001) (Amendment) Ordinance, 2003 – s.154-B(1) – Transfer of property Act, 1882 – s.54 – s.154-B(1), if created a bar on the execution of the sale deed in terms of the suit agreement: Held: s.154-B(1) prohibits the sale or transfer of agricultural lands to a person who is not an agriculturalist – In view of s.54 of the TP Act, an agreement for sale does not transfer the property subject matter of the agreement to the purchaser – It does not create any interest in the property subject matter of the agreement – Therefore, the embargo created by sub-section (1) of s.154-B will apply only to the execution of the sale deed and not to the execution of the agreement for sale. [Para 17]

Uttaranchal (The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950) (Adaption and Modification order, 2001) (Amendment) Ordinance, 2003 – s.154-B(2)(h) – Whether the vendor and the persons claiming through him can be directed to apply for permission in accordance with s.154-B(2)(h) to sell and whether a decree for execution of the sale deed can be made contingent upon the grant of permission to sell: Held: s.154-B(2)(h) permits the sale of agricultural land to a nonagriculturalist with the permission of the State Government for the purposes specified in clause (i) to (v) of clause (h) – In the present case, defendants shall join the first plaintiff in applying to the State Government/Competent Authority for the grant of permission u/s.154-B(2)(h) to sell the one half-undivided share in the suit land to the first plaintiff – It shall be the obligation of the defendants to apply for the permission and to do all such things which are necessary to get the permission – Further directions issued. [Paras 17, 21]

Keywords: Specific performance · Suit for specific performance · Decree of specific performance · Suit agreement · Sale deed · Agreement for sale · Subsequent purchasers · Subsequent sale deeds · Absence of prayer for cancellation or setting aside of the subsequent sale deeds in the plaint · Bona-fide purchasers · Bona fide purchasers for value without notice of the suit agreement · Defendants not bonafide purchasers · Consideration not paid in good faith · Notice of the suit agreement · Knowledge of suit agreement

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment Abhay S. Oka, J. 1. This appeal is at the instance of the original third, second, and fourth defendants. The first and second respondents are the original plaintiffs. The third respondent is the mother of the deceased original first defendant. For convenience, we are referring to the parties according to their status in the suit. FACTUAL ASPECT 2. Reference to a few factual aspects will be necessary. The first defendant executed a registered agreement for sale dated 7th December 1981 by which he agreed to sell his Bhumidhari land measuring 2.90 acres of Khasra no. 48 (for short, ‘
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