R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JULY, 2019 BEFORE THE HON’BLE MR. JUSTICE H.P.SANDESH RFA.No.987/2011 BETWEEN:
SRI. S ANANDA SHETTY S/O. SRI. M.V. SHETTY AGED ABOUT 54 YEARS R/AT NO.27, C.M.H. ROAD INDIRA NAGAR BENGALURU-560 038. ... APPELLANT (BY SRI. P. NARAYANAPPA, ADV.) AND:
1. SRI. MEHABOOB SHERIEFF S/O. SRI. HAYATH SHERIEFF AGED ABOUT 51 YEARS R/AT NO.747/767 H. RAHAMATH MANZIL POTTUMEDU, HILAL STREET BENGALURU-560 005.
2. SRI. R. RAVI SINCE DECEASED BY L.Rs.
2(A). SMT. RAVI MALATHI W/O. RAVI 2(B). SRI. CHANDRA SHEKAR S/O. RAVI 2(C). MISS. JAYAPRADHA D/O. RAVI 2(A) TO 2(C) ARE R/AT A-41 SECTION-4 HMT QUARTERS JALAHALLI BENGALURU-13.
3. BENGALURU DEVELOPMENT AUTHORITY KUMARA PARK WEST T. CHOWDAIAH ROAD BENGALURU-560 020. REPRESENTED BY ITS COMMISSIONER. ... RESPONDENTS (SRI. R.S. HEGDE, ADV. FOR C-R1 SRI. AMARESH A. ANGADI, ADV. FOR R2 (A TO C) SRI. M.N. RAMANJANEYA GOWDA, ADV. FOR R3) THIS RFA IS FILED UNDER SECTION 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 17.01.2011 PASSED IN O.S.NO.2666/2000 ON THE FILE OF THE XXVII ADDL. CITY CIVIL JUDGE, BENGALURU DECREEING THE SUIT FOR SPECIFIC PERFORMANCE AND PERMANENT INJUNCTION.
THIS RFA COMING ON FOR FURTHER ARGUMENTS AND HAVING BEEN RESERVED FOR JUDGMENT, THIS DAY THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T This appeal is filed by the 2nd defendant who is the subsequent agreement holder, challenging the judgment and decree passed in O.S. No.2666/2000 dated 17.01.2011 on the file of XXVII Additional City Civil Judge (CCH-9), Bengaluru granting the decree for specific performance in favour of the plaintiff.
2. The parties are referred in the original ranking for the convenience of the Court in order to avoid the confusion.
3. The brief facts of the case are that; defendant No.1 was allottee of the suit schedule property under Lease-cum-Sale Agreement executed by defendant No.3 dated 21.07.1989 under the registered document. Accordingly, defendant No.1 was put in possession of the suit schedule property on 21.07.1989 by issuing Possession Certificate. It is the case of the plaintiff that defendant No.1 negotiated with the plaintiff to sell the same and it was agreed to sell for sale consideration of Rs.1,60,000/-. The first defendant has received Rs.75,000/- in cash as advance sale consideration.
`Defendant No.1 had executed an agreement of sale on 15.07.1993 in favour of the plaintiff and he undertook to produce all the original documents and to register the sale deed in favour of the plaintiff. He also pleaded that he is in urgent need of money. The plaintiff also has executed Mortgage Deed dated 03.09.1993 through a registered document and delivered the possession and so also executed a General Power of Attorney in favour of the plaintiff on 03.05.1994. The plaintiff also moved office of the 3rd defendant and conditional sale deed was executed by 3rd defendant in favour of 1st defendant with the efforts of the plaintiff and plaintiff only has incurred all expenses. It is also contended that one K.Shanthamma filed a suit against defendant No.1 in the capacity of GPA holder of defendant No.1 and plaintiff contested the said suit in O.S.No.11029/1993. The said suit was concluded by virtue of Agreement of Settlement dated 08.12.1993. It is also the case of the plaintiff that defendant No.1 received Rs.20,000/- from the plaintiff on 22.04.1994 and executed another agreement of settlement on the same date. In the agreement of settlement, defendant No.1 confirmed that he has received the entire sale consideration and agreed to execute the sale deed.
4. Though the plaintiff was ever ready and willing to perform his part of contract to get execution of the sale deed, defendant No.1 went on postponing the same. Defendant No.1 has also executed Indemnity Bond on 28.04.1997 confirming the said transaction, even defendant No.1 requested to pay extra amount of Rs.25,000/- and the same was also paid. In that regard, document was also executed. The plaintiff already put in possession and he has been in possession and enjoyment of the schedule property. He has invested huge funds and constructed the structure therein. In spite of it, defendant No.1 did not come forward to execute the sale deed after expiry of lease period. When the plaintiff has obtained Encumbrance Certificate, found that defendant No.1 has executed registered sale agreement in favour of defendant No.2 on 28.10.1998 and the same was shocked. He gave the notice against them on 30.11.1999 calling upon the defendant No.1 to execute the sale deed. In spite of service of notice, they are not turned up and also not replied. Hence, without any other alternative, the plaintiff has filed the suit.
5. In pursuance of suit notice, defendant Nos.1 to 3 appeared before the trial Court. Defendant Nos.1 and 2 have filed written statement and defendant No.3 did not file any written statement.
6. Defendant No.1, in the written statement, admitted the execution of Lease-cum-Sale Agreement in respect of suit schedule property by the 3rd defendant. But, he denied the execution of sale agreement in favour of the plaintiff and receipt of entire sale consideration and denied all other documents. However, he was pleaded that he has executed the sale agreement in favour of defendant No.2 for sale consideration of Rs.1,50,000/- and denied the contention of plaintiff that he had solved the problems. He specifically contended that one by name Chalapathi, in order to solve the problems with BDA, defendant No.1 has signed the blank papers and those documents are misused by plaintiff. It is further contended that he is an illiterate and the plaintiff was promised to get all the documents from the BDA and innocently, defendant No.1 has signed the blank papers and the very case of the plaintiff is false, frivolous and concocted. He never executed any Power of Attorney in the name of plaintiff and the plaintiff never came forward to purchase the property. Only, defendant No.2 came forward to purchase the property and hence, he executed the sale agreement in favour of 2nd defendant.
7. Defendant No.2, in his written statement, would contend that he is the bonafide purchaser of the suit schedule property and defendant No.1 has received entire sale consideration of Rs.1,50,000/- and delivered the possession of the suit schedule property in his favour and defendant No.2 is in possession of the suit schedule property by virtue of agreement of sale. He also adopted the written statement of defendant No.1 to some extent and denied the case of the plaintiff.
8. The Court below based on the pleadings of both plaintiff and defendant Nos.1 and 2, framed the following issues.
1. Whether the plaintiff proves that the 1st defendant executed the agreement of sale dated 01.07.1993, agreeing to sell the suit schedule property to the plaintiff?
2. Whether the plaintiff proves that 1st defendant has received part consideration of Rs.75,000/- under the said Agreement of Sale dated 15.07.1993?
3. Whether the plaintiff proves that he was always ready and willing to perform his part of the contract under the Agreement dated 15.07.1993?
4. Whether the plaintiff proves that he was put in possession of the suit schedule property?
5. Whether the plaintiff proves that there was also a mortgage between him and the 1st defendant as averred in para-5 of the plaint?
6. Whether the plaintiff proves that inspite of the prior agreement in his favour, 1st defendant has executed another agreement of sale in favour of 2nd defendant?
7. Whether the plaintiff proves that the agreement of sale between 1st and 2nd defendants is collusive to defeat the right of the plaintiff?
8. Whether the 1st defendant proves that he was persuaded to sign blank papers in favour of the plaintiff as alleged in para 17 of his written statement?
9. Whether the 2nd defendant proves that he has got the suit schedule property from the 1st defendant by way of registered agreement of sale dated 28.10.1998?
10. Whether the plaintiff is entitled to a decree of Specific Performance as sought for?
11. Whether the plaintiff is entitled to a decree of Perpetual Injunction as sought for?
9. Plaintiff, in order to substantiate his case, he examined himself as P.W.1 and got marked Exs.P.1 to 26. On the other hand, defendant No.1 entered into witness box and examined himself as D.W.1 and not exhibited any documents. Defendant No.2 also entered into witness box and examined himself as D.W.2 and he got marked sale agreement as Ex.D.1.
10. The defendant No.1 has disputed his signature on the Agreement of Sale and other documents. Hence, admitted signatures and disputed signatures were sent to Forensic Science Laboratory, Bengaluru for examination. The Expert has been examined as C.W.1 and exhibits C.1 and C.1(a) to (e) are marked.
11. After completion of evidence, the Court below heard the respective counsel and the Court below answered issue Nos.1 to 7 as Affirmative in favour of plaintiff and answered issue Nos.8 and 9 as negative disbelieving the contention of defendant No.1 that signatures were taken on the blank papers and misused the said papers. The Court below decreed the suit in favour of plaintiff answering issue Nos.10 and 11 for the relief of specific performance and also for perpetual injunction.
12. Being aggrieved by judgment and decree, defendant No.2 who is the subsequent Agreement Holder, preferred this appeal. In the grounds of appeal, it is contended that the Court below failed to consider the evidence in a right perspective and only by relying upon the Forensic Science Laboratory Report has decreed the suit. The question as to whether there was a transaction or not in the light of the document forthcoming, which probabilises the contention of defendant No.2 that there is every scope for the document not being genuine. The Court below did not consider the evidence particularly with regard to payment of Rs.75,000/- on 15.07.1993 and executing the Mortgage Deed dated 03.09.1993, that is there any scope for execution of the Agreement. When in the agreement itself, it is stated that there is a litigation and on account of the litigation, question of handing over possession and execution of sale deed is postponed. When such being the averment in the document, the trial Judge ought not to have decreed the suit. If Usufrutuory Mortgage Deed has been executed, mortgagee has put in possession. The question of executing the Power of Attorney does not arise and the same demonstrated apparently that the plaintiff to enrich the relief has filed the false suit. The plaintiff also relies upon the Indemnity Bond said to have been executed and marked as Ex.P.6, which also confirms the contention of defendant No.2 and series of documents are created in favour of plaintiff. Mortgage Deed has been executed has not been redeemed and the same creates cloud on the case of plaintiff and in spite of it, the trial judge has committed an error in granting the relief of specific performance. The Court below failed to take note of the answers elicited from the mouth of the witnesses and erroneously comes to a wrong conclusion that the plaintiff is entitled for the relief of specific performance. The plaintiff also kept quite for a longer period and Court below has committed an error in not noticing that the letter dated 05.02.2001 cannot be considered as it is subsequent to suit and the same is nothing but cooked up. The trial Judge ought not to have considered the said letter, which has been allegedly subsequent to the suit and contrary to the recitals in the written statement. Hence, the judgment of trial Court is erroneous and requires to be set-aside.
13. The learned counsel appearing for appellant, in his argument, vehemently contended that defendant No.1 has executed a Sale Agreement, which is registered one in favour of defendant No.2 i.e., appellant in terms of Ex.D.1. It is further contended that admittedly, there is no any dispute that defendant No.1 was only having Lease-cum-Sale Agreement at the time of entering into Sale Agreement. The plaintiff, even though he is aware of the fact that there was a Sale Agreement in favour of defendant No.2, he created the Ex.P.1 – Sale Agreement and filed the present suit in order to knock off the property. The defendant No.2 is the bonafide purchaser. He entered into registered Sale Agreement and paid the entire sale consideration. The learned counsel also would contend that the very granting the relief in favour of plaintiff is contrary to law and the plaintiff is not entitled for the relief of specific performance. When the documents, which he has relied upon, are came into existence in a suspicious circumstance and misused the belief of defendant No.1 and created the documents and hence, not entitled for the relief.
14. The learned counsel appearing for defendant No.1 i.e., original Lease-cum-Sale Agreement Holder, he would contend that the alleged Sale Agreement came into existence in the year 1993 and no dispute that defendant No.1 was allotted the suit schedule property by 3rd defendant on 08.06.1989 executing the Lease- cum-Sale Agreement. The learned counsel brought to my notice the reference made in Ex.P.1- Sale Agreement as Lesser and Lessee. The learned counsel further would contend that Section 10 of Contract Act prevents to execution of any Sale Agreement, which is contrary to law. The learned counsel further contended that no witnesses are examined to prove the Sale Agreement. The document, which the plaintiff has relied upon, discloses only an amount of Rs.1,30,000/- is paid as per Exs.P.1, 2, 5 and 7. The signatures available on Exs.P.1 and 2 are not similar. The learned counsel would contend that under Rule 14 of BDA Allotment Rules, there is a bar not to alienate the said property during the lease period. The very proviso of Section 20 and 25, if any transaction is taken place under mistake of fact and without any sale consideration, the same is void. Section 68 of Evidence Act requires the same has to be proved by examining the witnesses and the same has not been done. The learned counsel also would contend that under Section 73 of the Evidence Act, Court can compare the signatures available on document, which has been relied upon by the plaintiff. The Court below applied the subsequent amendment of 1997 and the alleged Agreement came into existence in the year 1993. The learned counsel would contend that the Court below has committed an error in appreciating the evidence available on record.
15. In support of his contention, he relied upon the judgment reported in (1997) KLJ 264, referring this Judgment, he would contend that only Lease-cum-Sale Agreement was executed in favour of plaintiff and defendant No.1 was not having any right to execute the Sale Agreement and brought to my notice at paragraph Nos.20, 21 and 22 and contend that there is a total bar under Rule 14. The Agreement Holder cannot alienate the property and the very transaction was bad at the inception as the same was opposed to law.
16. The learned counsel also relied upon the judgment reported in AIR 2016 SC 737, in this judgment, the Apex Court also held that the plot in question is not transferable for a period of ten years – Agreement to sell is not an enforceable contract. The learned counsel also relied upon the judgment reported in (2016) 1 SCC 567, the learned counsel referring to Section 20 of the Specific Relief Act would contend that discretion is not to be exercised to grant decree of specific performance and it should be exercised by judicial principles, not to be exercised arbitrarily referring to para Nos.14 and 16 of the judgment. The learned counsel also relied upon the judgment reported in AIR 2017 SC 5431, the learned counsel referring this judgment brought to my notice at para No.8 of the judgment and would contend that there is no evidence on record to prove the title of defendant No.1 in respect of the suit land and there is no evidence to establish that defendant No.1 had ever authorized to enter into Agreement of Sale and referring this judgment, he would contend that in the case on hand also, defendant No.1 was not having any absolute right to execute the sale deed. The learned counsel also relied upon the judgment reported in 2019 SAR (Civil) 582 (SC), the learned counsel referring that judgment brought to my notice in para 8 of the judgment with regard to Section 16(c) and would contend that in terms of documents, which the plaintiff has relied upon, he has not paid the entire sale consideration and hence, the plaintiff is not entitled for the relief of specific performance. The learned counsel also relied upon the judgment reported in ILR 2017 KAR 5012 with regard to Section 43 of Transfer of Property Act and would contend that contract between transferor and transferee must be in subsistence during the time when the former acquires the interest. The learned counsel also relied upon the judgment reported in 2014 SAR (Civil) 964 referring to Section 43, he would contend that Section 43 of Transfer of Property Act will not come into operation when the transferor having no interest in the property transfers the same but subsequently acquires interest in the said property, the purchaser may claim the benefit of such subsequent acquisition of the property by the transferor.
17. Learned counsel appearing for the plaintiff in his argument would contend that counsel for the defendant No.1 has contended that the recital of Ex.P1 in the beginning, is referred as lessor and lessee and taking the advantage of typographical error, the counsel made an attempt that it is not sale agreement. It is specifically mentioned in the document that vendor and vendee, wherein the terms and conditions of the agreement is mentioned. Hence the typographical error cannot be relied upon. He contends that defendant No.1 counsel vehemently contended that he has not executed the documents, only under the helpless circumstances in order to get the documents from the BDA, certain signatures are obtained on the blank documents and the same are misused. The said contention cannot be accepted. The disputed documents and admitted documents are sent to the scientific expert and the scientific expert has given the opinion that all the signatures are one and the same. The counsel would also contend that Ex.P3 power of attorney which is registered has been executed and no explanation on the part of defendant No.1 as to why he has executed the same if there was no transaction and also no explanation with regard to the executing of registered mortgage deed. Defendant No.1 cannot blow hot and cold. In one breath, he contends that he has not executed the document and in another breath contends that the documents are obtained under helpless circumstances and he has not explained the said circumstances. This aspect has also been considered by the Court below. The counsel would contend that in Ex.P7 there was a reference to execution of mortgage deed and so also in Ex.P6 there was reference that apart from the sale consideration, defendant No.1 has received additional amount of Rs.25,000/-. Hence, the very contention of defendant No.1 cannot be accepted.
18. Learned counsel further contends that the judgment quoted by the defendant in Y.R.Mahadev vs. K.Dayalan [1997(4) KLJ 264] is not applicable to the case on hand since suit was filed within the lease period. In the case on hand, the suit was filed after the lease period. No doubt, there is a non alienation clause and an agreement of sale was executed. If suit is filed within the period of non alienation clause, then there would have been force in the contention of defendant’s counsel. Learned counsel would further contend that the conduct of the owner is to be appreciated. The owner did not file any appeal before this Court and the owner is sailing with second agreement holder who is the appellant herein and the subsequent agreement holder also did not file any suit to enforce the agreement. Hence the appellant also not having any locus-standi to urge the grounds and his right is only to enforce the agreement which he is claiming the right. Hence this appeal cannot be entertained and prayed this Court to dismiss the appeal.
19. In support of his contentions, he has relied upon the following judgments:
i) In the case of Syed Zaheer and others vs.
C.V.Siddaveerappa (ILR 2010 Kar Page 765) wherein this Court has held that if non-alienation clause for a period was imposed, it is only after the lapse of the said period, the suit for specific performance was filed. Therefore, it cannot be said that there has been a breach of non-alienation clause.
ii) In the case of Smt. H. Lalithamma and another Vs. Venkateshulu (2015(2) KCCR 1210) wherein this Court referring to Section 20 of the Specific Performance Act held that agreement to sale in favour of vendee during subsistence of lease cum sale agreement, he was put in possession and future installments were paid by him. The vendee is entitled to have the relief under Specific Relief Act.
iii) In the case of Allabaksha and Others Vs.
Sayyad Javed Pasha and others (2017 (4) KCCR Page 3048) the Full Bench of this Court dealing with the issue whether specific performance can be granted in respect of agricultural land where purchaser is a non- agriculturist and also referring the Division Bench decisions neither framing any question of law nor distinguishing previous decisions, consistently held that relief can be granted, except stating that one Division bench has expressed contra opinion which is not acceptable to it. It is a procedural irregularity.
iv) In the case of Parvatagouda Ninganagouda Patil and others vs. Guddappa and another (2008 SCC online Kar 380) wherein the full bench regarding Specific performance is concerned held that agreement to sell agricultural land to non-agriculturist does not contravene the Karnataka Land Reforms Act. Further, it is held that there is no bar in the Act on entering into agreement to sell agricultural lands even in favour of a non-agriculturist.
v) In the case of Balawant Vithal Kadam Vs.
Sunil Baburao Kadam (AIR 2018 SC Page 49) wherein, in a case of suit for specific performance, agreement between the parties to sell the land, itself not creating any interest of buyer in land nor amounting to sale. Agreement to sale simply enabling buyer to claim specific performance of agreement on proving terms ‘Sale’, creating interest in land once accomplished, distinct from ‘agreement to sale’ - Sale agreement between parties cannot be treated as actual alienation or transfer of land.
vi) In the case of R. Gangadharappa vs. Kondla Nanjamma (LAWS (KAR) 2016 4 35) wherein it is held that when there is conflict between two decisions of the Supreme Court or High Court, with equal number of judges, then the later judgment will prevail over the earlier.
vii) In the case of Commissioner, Bangalore Development Authority Vs. S. Vasudeva and others (2000 (2) SCC 439) wherein Rule 5 of the Bangalore Development Authority (Allotment of Sites) (Amendment) Rules, 1997 has been amended to the effect that if there is any violation, the same can be regularized on the purchaser paying an amount equal to 25% of the sital value determined at the rates specified by the State Government from time to time.
viii) In the case of Special Officer and Competent Authority, Urban Land Ceilings, Hyderabad and Another Vs. P.S. Rao (2000 2 SCC 451) wherein notice was issued by BDA demanding 25% of the cital value. In its judgment the High Court held that it is for the petitioner to pay the amount as per Rule 14 of the Act which was interpreted by the Supreme Court and it is a concession given to the purchasers to pay 25% of the market value as the transfer was prohibited under Section 65 of the Act. Learned counsel referring to above judgments would contend that though the first defendant was only having Lease-cum-Sale Agreement and there was a prohibition of alienation of the said property, the recent judgment of the Apex Court in the case of Balawant Vithal Kadam (cited supra) is applicable to the case on hand. The sale agreement between the parties cannot be treated as actual alienation or transfer of land. Further the Apex Court in the aforesaid judgment held that sale agreement not executed in contravention of Section 48D of 1961 Act. It is further held that specific performance of agreement can be granted to buyer. In this case also, the suit is filed after the period of the lease-cum-sale agreement and the same was not filed prior to lease cum sale agreement. The plaintiff has substantiated his case by producing the documents which existed between the plaintiff and the first defendant. The Court below considered all these aspects into consideration and rightly decreed the suit. Hence learned counsel prayed this Court to dismiss the appeal.
20. Learned counsel for the defendants in his arguments would contend that amendment was made in the year 1997 and agreement was made in the year 1993 and the learned trial Judge has committed an error in taking note of the amendment of 1997 and the same is only subsequent to agreement and the first defendant was not having any right to alienate the property in executing the sale agreement. The transaction cannot be against the statute. In support of his contention, he relied upon the judgment in the case of A.V.M.Sales Corporation vs. Anuradha Chemicals Pvt. Ltd reported in (2012(2) SCC 315) wherein it is held that contract against the provisions of statute and the same is impermissible, the parties cannot contract against the statute. Any mutual agreement intending to restrict or extinguish right of a party from enforcing right under or in respect of a contract would be void to that extent. Hence the relief of specific performance cannot be granted and the learned trial Judge has committed an error in decreeing the suit and prayed this Court to set aside the judgment and decree and dismiss the suit.
21. Having heard the arguments of respective counsel and also on perusal of material available on record, the points that arise for consideration of this Court are as follows;
1. Whether the Court below has committed an error in decreeing the suit answering issue Nos.1 to 7 as affirmative in favour of the plaintiff holding that the defendant No.1 having executed sale agreement, other documents and put the plaintiff in possession and also executed collusive sale agreement in favour of second defendant?
2. Whether the Court below has committed an error in answering issue Nos.8 and 9 as negative disbelieving the contention of the first and second defendant?
3. Whether the Court below has committed an error in decreeing the suit for specific performance and granting perpetual injunction answering issue Nos.10 and 11 as affirmative?
4. Whether the Court below has committed an error in decreeing the suit for specific performance when defendant No.1 was having only limited interest of lease-cum- sale agreement and bar in terms of the said lease agreement of non-alienation during the subsistence of lease-cum-sale agreement which opposes the contract act as contended?
Point No.4:
22. Firstly, I would like to take point No.4 for consideration and same involves the question of law. In order to proceed with regard to the other point for consideration, this Point has to be considered at the first instance, since there are rival contentions with regard to this point for consideration. Admittedly, there is no dispute with regard to the fact that defendant No.1 was allotted the suit schedule property by the BDA in the year 1989. There is no dispute that the BDA has executed the Lease-cum-Sale Agreement in favour of defendant No.1. The plaintiff claims that defendant No.1 has executed the sale agreement in terms of Ex.P.1 for sale consideration of Rs.1,60,000/- and out of that, he has paid advance amount of Rs.75,000/-. Defendant No.1 has disputed the very execution of sale agreement – Ex.P.1. The material discloses that the very defendant No.1 has executed registered sale agreement in favour of defendant No.2, who is the appellant herein in terms of Ex.P.9 and Exhibit D1. Defendant No.1 did not dispute the fact of execution of sale agreement in favour of defendant No.2. The plaintiff also pleads that when the Encumbrance Certificate was taken, he came to know the said transaction. The fact that both sale agreements are executed during the Lease-cum-Sale Agreement is also not in dispute. The BDA took the defence in the appeal though not filed written statement in the suit that the alienation made by defendant No.1 is within the lease period and the same violates Rule 14 of BDA allotment of sites rules and hence, the same is bad under law. The learned counsel appearing for defendant No.1 also would contend that there are restrictions to sell the property during the period of Lease-cum-Sale Agreement. Defendant No.1 cannot contend that there was a restriction. Because he only executed admittedly sale agreement in favour of defendant No.2 during subsistence of sale agreement in the year 1998. But, he denies the very execution of the sale agreement in terms of Ex.P.1 in favour of the plaintiff. It is further important to note that BDA did not file any written statement before the lower Court. Only defendant Nos.1 and 2 have filed the written statement. On perusal of the written statement both defendant Nos.1 and 2, they have not taken this contention before the lower Court. Before this Court, only have raised the objection that the very transaction is bad under law. Even though this contention was not taken and the same is not forbidden by law, since it is question of law. This Court in the first appeal has to consider both question of fact and question of law. Though plaintiff’s counsel contend that the plea cannot be entertained in the appeal, the Court should not venture to technicalities and the substantive justice ought to have been done.
23. Now, the question before this Court is, whether the sale agreement executed is bad under law.
The learned counsel appearing for defendant No.1, in his argument, he relied upon the judgment reported in (1997) 4 KLJ 264 regarding execution of sale agreement during the period of lease-cum-sale. The learned counsel appearing for plaintiff would contend that in the said judgment, it is discussed that suit was filed within the lease-cum-sale agreement period and in the present case on hand, suit was filed after expiry of lease-cum-sale agreement period. The learned counsel appearing for defendant No.1 also relied upon the judgment of Apex Court reported in AIR 2016 SC 737 and would contend that the plot in question is non- transferable for a period of 10 years – Agreement of sell is not an enforceable contract and held that in spite of noticing the said fact, the Apex Court held not proper.
24. On the other hand, learned counsel for plaintiff would contend that the Apex Court in the recent judgment reported in AIR 2018 SC 49 held that Agreement between parties to sell land, itself not creating any interest of buyer in land, nor amounting to sale – Agreement to sale simply enabling buyer to claim specific performance of agreement on proving terms – ‘Sale’, creating interest in land once accomplished, distinct from ‘agreement to sale’ – Sale agreement between parties cannot be treated as actual alienation or transfer of land.
25. Having considered the principles laid down in the recent judgment of the Supreme Court and subsequent judgments would prevail and hence, the very contention of defendant No.1 that there was a prohibition cannot be accepted. This Court has to take note of the recent judgment of the Apex Court and the recent judgments would prevail. Apart from that, this Hon’ble Court in the judgment reported in IRL 2010 KAR 765 in the case of Syed Zaheer and Others vs. C.V.Siddaveerappa that is in Division Bench held that;
it is to be noted that at the time of grant, non-alienation clause for a period of 15 years was imposed and it is only after the lapse of said period, the suit for Specific Performance was filed by the respondent. Therefore, it cannot be said that there has been a breach of the non-alienation clause or that the Specific Performance has been sought not prior to the expiry of the non- alienation clause. Further held, in the instant case and the agreement of sale specifically mentions that the sale deed would be executed after the period of non- alienation is completed. Therefore, the agreement in question cannot be held to be null and void or hit by Section 23 of the contract. The Trial Court was correct in holding that the respondent who had filed the suit for Specific Performance was ready and willing and had in fact performed his part of the contract and there was no reason as to why Specific Performance relief could not be granted to him. No doubt in the case on hand no averment in the agreement is made regarding sale deed would be completed after the period of non alienation but the conduct of the first defendant in executing the subsequent documents and delivering the possession confirms the same.
26. Having taken note of the principles laid down in the judgment referred supra and in the case on hand also, though there was an agreement of sale during the period of lease-cum-sale, suit is filed after expiry of lease-cum-sale agreement and learned counsel also would contend that the suit is not filed within the period of lease-cum-sale agreement and the same is filed after expiry of Lease-cum-Sale Agreement. When such being the case, the very contention of the learned counsel appearing for defendant No.1 cannot be accepted.
27. The learned counsel also relied upon the judgment of Apex Court reported in (2016) 1 SCC 567, in so far as the principles that Agreement to Sell can only be granted when it is proved that person executing the Agreement as to right to transfer property and also other judgment of the Apex Court reported in 2019 SAR (Civil) 582 (SC) that is with regard to readiness. These two judgments are also not applicable to the case on hand for the reason that it is not the case of defendant No.1 that he was not having any right to execute the sale agreement only was having the agreement of Lease- cum-Sale Agreement and no dispute that he was not having right but only would contend that there is a bar under Section 14. If any contravention of Rule 14 of BDA rules, I have already pointed out, the BDA did not contest the matter and even after filing of the suit also, did not rescind the contract. Apart from that in view of the judgment of Apex Court, it creates only interest in respect of the property and it does not amount to any alienation and if any restrictions under the Rule and the said rule is with regard to prohibition of alienation. The Apex Court in the judgment in the case of Balawant Vithal Kadam Vs. Sunil Baburao Kadam reported in AIR 2018 SC 49 categorically held that sale agreement between parties cannot be treated as actual alienation or transfer of land and hence, the very contention that there was a prohibition of alienation cannot be accepted and in the case on hand, there was no any alienation taken place during the subsistence of Lease-cum-Sale Agreement and only entered sale agreement. Hence, the very contention of the respective counsel for defendant No.3 and also for defendant No.1 cannot be accepted. The Counsel appearing for 1st defendant also would contend that Section 43 of Transfer of Property Act not applicable to the case on hand. Hence, I would like to extract the Section 43 of Transfer of Property Act.
“43. Transfer by unauthorized person who subsequently acquired interest in property transferred. – Where a person (fraudulently or) erroneously represents that he is authorized to transfer certain immoveable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.
Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.”
28. On reading of Section 43, it is clear that if any transfer is made by unauthorized person who subsequently acquires interest in property, law of estoppel applies, if sale is made for consideration, the said section shall impair the right of transferees in good faith for consideration.
29. In the case on hand, no doubt first defendant was having limited interest based on lease cum sale agreement and not having absolute sale deed but represents that he is authorized to transfer, now he cannot contend that on the date of execution of the sale agreement not having absolute sale deed, but he has paid the sale consideration and only formalities of obtaining the sale deed was pending after the period of lease cum sale agreement. Hence, I am of the opinion that the first defendant is estopped from taking the said defence of Section 43 of Transfer of Property Act is also enure the benefits in favour of the plaintiff. The citations quoted on the point of Section 43 not comes to the aid of the first defendant and hence, I answer point No.4 as Negative.
Point Nos.1 to 3:
30. This Court would like to consider the point Nos.1 to 3 together since they are inter connected and the question involved is also with regard to whether the defendant No.1 has executed sale agreement and other documents as contended by the plaintiff. The other question involved in the matter particularly with regard to issue Nos.8 and 9 whether the plaintiff took his signature on the blank papers under the circumstances as explained in the written statement and so also, whether the plaintiff has misled the first defendant that he was persuaded to sign blank papers and whether the second defendant proves that he got the suit schedule property by sale agreement dated 28.10.1998.
31. Now this Court would like to discuss with regard to the evidence in respect of issue Nos.1 to 7 i.e., whether plaintiff proves that the first defendant has executed sale agreement dated 01.07.1993 and first defendant has received sale consideration of Rs.75,000/-. The plaintiff was always ready and willing to perform his part of contract and also he was put in possession of suit schedule property and there was also a mortgage between him and first defendant. In spite of prior agreement in his favour, the first defendant has executed another agreement in favour of the second defendant and the very second agreement between the first and second defendant is collusive to defeat the right of the plaintiff, since the Court has answered all these issues in the ‘affirmative’.
32. Having considered the material available on record, the plaintiff has relied upon Exs.P1 to P26. Admittedly, the plaintiff has examined only one witness i.e., plaintiff as P.W.1. He relied upon the documents of sale agreement and other consequential documents contending that the same are executed by first defendant in his favour in terms of Exs.P1 to P7. The plaintiff also relied upon Ex.P8-Encumbrance Certificate and so also the second sale agreement in favour of the second defendant as Ex.P9. The plaintiff also contend that he gave the complaint to police in terms of Ex.P10 and also caused legal notice in terms of Ex.P12 and postal acknowledgment for having served the same on the defendants. The plaintiff also produced letter issued by the H.M.T. that the notice was served on the first defendant through the H.M.T. The plaintiff also produced Exs.P17 and P18, photographs of suit schedule premises and bill as Ex.P19, the copy of the letters sent by the first defendant to the counsel of the plaintiff in terms of Ex.P22 and postal cover as Exs.P24 to P26. The plaintiff reiterated the averments of the plaint in his affidavit and he was subjected to cross- examination on behalf of defendant Nos.1 and 2 and so also on behalf of defendant No.3. He admits in the cross-examination that he has not obtained permission from the third defendant to purchase the suit site from the first defendant. It is also elicited that General Power of Attorney was executed by the first defendant in his favour in respect of suit schedule property. It is further suggested that no sale agreement dated 15.07.1993 was executed by the first defendant in his favour and that he has concocted the said agreement by making use of signatures of the first defendant which were obtained on blank papers and the said suggestion was denied. However, he admits that Ex.P1 is not a registered document. He further admits that he does not know the contents of the lease cum sale agreement entered into between the first defendant and Bengaluru Development Authority. He further admits, it is not mentioned in Ex.P7 that lease period was not expired and sale deed could be executed in future. The evidence of defendant No.1, who has been examined as D.W.1 reiterates denying the very execution of sale agreement and other documents by filing affidavit. In the cross-examination, in Para-4, he admits that Ex.P22-Mortgage deed dated 03.09.1993 was executed by him.
33. He further admits that the signatures found on each page of Ex.P.2 are his signatures. DW.1 further admits that under Ex.P.2, Rs.10,000/- was received by him from the plaintiff and that plaintiff was put in possession of the schedule property. He also admits the very execution of Ex.P.3 General Power of Attorney which bears the signature on each page. It is further suggested in the cross examination that besides Rs.20,000/- on the date of Ex.P.5, a sum of Rs.1,200/- was received by him in cash and also received two cheques, one for Rs.15,000/- and another for Rs.3,800/- from the plaintiff and such suggestion was denied. He admits that two years ago, he had been to suit schedule property where he found a car garage. He volunteers that it was established without his knowledge. He admits Ex.P.17 and 18 photographs of the garage which is on the suit site. He further admits that on 27.09.1999, a complaint was lodged to Jeevanbheemanagar police station. He further admits that the legal notice was served on him through his superiors through HMT and Ex.P.15(a) is his signature. He did not reply to Ex.P.15. It is suggested that he has encashed both the cheques mentioned in Ex.P.5 which is denied. He further denies the signature available on the vakalath and written statement.
34. In order to arrive at the conclusion with regard to the sale agreement as well as execution of other documents, though the plaintiff has denied his signature on the documents Ex.P1 to 6, he admits in the cross examination that Ex.P2 mortgage deed and Ex.P3 General Power of attorney are executed by him but his contention is that his signatures are taken on some blank papers. It is his case that he has executed some documents to plaintiff in order to get the documents from B.D.A. On perusal of the power of attorney which is marked as Ex.P3 there is no such averment in Ex.P3. It is specifically mentioned that plaintiff can enter into sale agreement in respect of sale of the schedule property. There are no such averments in the power of attorney that the same was executed to get the documents from the BDA. Further mentioned that a power is given to apply for sanction of plan either with the BDA or the Corporation of the City or to the village panchayat for construction of new structures. When defendant No.1 admits the very execution of the power of attorney and also Ex.P2 mortgage deed, he has to explain under what circumstances he has executed these two registered documents in favour of the plaintiff and what was the need to execute two registered document, the same has not been done except taking the defence that the plaintiff has obtained signature on the blank paper. What made him to sign the blank paper is not explained. It is further important to note that the first defendant denied the very execution of agreement to sell in terms of Ex.P1. When he denies the very execution and also the documents Exs.P4 to 6 i.e., affidavit, agreement of sale, indemnity bond and agreement of settlement, there is no explanation. It is important to note that on the date of very execution of power of attorney, he has executed the affidavit -
Exhibit P4. In the affidavit, he has specifically mentioned that he undertakes to register the said property as soon as the lease period is over. Apart from that Ex.P5 agreement of settlement. He categorically admits that he has already received the valuable consideration of Rs.1,60,000/- and further says no amount is due and payable by the plaintiff towards the sale consideration. The first defendant also confirms that the second party i.e., the plaintiff is in lawful possession and enjoyment of the schedule property having constructed the building by making investment. It is further pertinent to note that in terms of Ex.P2 he has admitted that possession was delivered. He has executed the mortgage deed subsequent to the sale agreement. The other document Ex.P6 indemnity bond was executed on 28.04.1997 admitting that he has received the full sale consideration of Rs.1,60,000/- and also taken an additional amount of Rs.25,000/- in terms of the same. On the very same day, he has executed agreement of settlement reiterating entering into the documents at Ex.P1 to 6 and also reference with regard to the mortgage deed and the amount paid under the mortgage deed need not be paid back to him.
35. Having taken note of all these documents which are disputed, I have already pointed out that Exs.2 and 3 are admitted and rest of the documents are denied. Hence the documents were sent to expert and expert gave the report with regard to the disputed signature and also admitted signature and in the report, he categorically says that those signatures belongs to the one person. The document of certification is also got marked as Ex.C1(e) so also his report. The expert examined as C.W.1 before the Court deposed in his evidence that he examined the disputed signatures and also admitted signatures and has given the report. In the cross examination, it is suggested that in the enlarged prints of questioned signatures and admitted signatures marked as Ex.P1(a) and (b) with reference to admitted signatures at S1 and S2 do not tally and the same is denied. He further says that according to him the questioned signatures at Ex.P1(c), P4(a) and P4(b) and the admitted signatures at S5 and S6 are tallying with each other with natural variations. He admits that the questioned signatures and admitted signatures found on written in Ex.C1(e) the letter P and R vary with each other but he volunteers that those are natural variations. In the cross examination, except these answers nothing is elicited from the mouth of C.W.1 to disbelieve his evidence. Hence, I do not find any reason to disbelieve the evidence of C.W.1. It is further noted that the first defendant denies all the signatures of Exs.P1 to 7. In the cross examination admitted the signature available on Exs.P2 and 3 since they are the registered documents and denied the other documents. Expert opinion is also obtained and confirms that the signatures are one and the same. The very contention of defendant counsel before this Court is that there are variations. No doubt this Court can compare the signatures under Section 73 of the Evidence Act and at the same time the Court cannot act as an expert. In the case on hand, when there is an expert opinion, it has to be accepted unless the contrary is proved. I have already pointed out that nothing is elicited in the cross examination of C.W.1 to disbelieve the evidence of C.W.1.
36. Having considered the material on record and also considering the oral evidence of P.W.1 and also the evidence of DW.1 and also the evidence of C.W.1 expert, it is clear that the first defendant has executed the document Exs.P1 to P7 in favour of the plaintiff. The very content of each of the documents supports the case of the plaintiff that he has executed the sale agreement and other consequential documents. It is pertinent to note that before filing the suit also, the plaintiff had given complaint to the Police and the same is also admitted by defendant No.1. So also defendant No.2 in his evidence says that he was called to Police Station. Plaintiff denies the very handing over of the possession in favour of the plaintiff. In the cross examination, he categorically admits that possession has been handed over. He also admits that the plaintiff has been in possession of the premises and running the garage. When such being the case, if he has not executed the documents in favour of the plaintiff, what made him to deliver the possession has not been explained. Hence, it is clear that the plaintiff in order to overcome the very same transaction made in favour of the plaintiff, executed the sale agreement in favour of defendant No.2 as per Exhibit D1. Hence, I am of the opinion that the Court below has not committed any error in answering issue Nos.1 to 7 as affirmative.
37. There is no dispute with regard to the fact that sale agreement was executed in favour of defendant No.2 and first defendant also admits that he has executed the sale deed in favour of the second defendant. The only question is whether the said agreement of sale is executed is genuine transaction. In order to avoid the contract between the plaintiff and the first defendant, the second defendant also would contend that he is a bonafide purchaser and it has to be noted that in the cross examination of DW.2 i.e. second defendant, he categorically admits that prior to entering into sale agreement, he found the entries in Ex.P8 i.e., encumbrance certificate. He claims that he had enquired with defendant No.1 with regard to the said entry and at that time he told that he has executed the mortgage deed in favour of plaintiff and if the mortgage amount of Rs.10,000/- is returned, his name will be removed from the encumbrance certificate. Hence, it is clear that he had the knowledge of the mortgage deed.
He did not pursue for cancellation of the said mortgage deed or redemption of mortgage deed and nothing is produced to indicate that he made efforts to clear earlier transaction but entered with the sale agreement with the first defendant. It is further clear that notice was issued to defendant Nos.1 to 3 and the same was also served on them and postal acknowledgment is also produced. The second defendant admits that the address written on Ex.P13 with regard to his name and vendor name is correct. Both of them did not choose to give any reply. He also admits that BDA has not executed sale deed in favour of defendant No.1. The second defendant also cannot contend that the sale agreement is in violation of the Rules of the BDA. He also entered into sale agreement within the period of lease cum sale agreement in favour of both. He came to know about the Encumbrance Certificate produced by the plaintiff and that there was an entry with regard to execution of the document in favour of the plaintiff.
Hence, he cannot contend that he is a bonafide purchaser and hence, I am of the opinion that the Court has rightly answered issue Nos.8 and 9 as negative.
38. Now, the question before this Court is exercising of the discretionary power with regard to the sale transaction. This Court has already come to the conclusion that the first defendant has executed the sale agreement in favour of the plaintiff and also answered issue Nos.1 to 7 in the affirmative. It is also important to note that the first defendant categorically admitted the delivery of possession and plaintiff has already constructed the building and running the garage in pursuance of the sale agreement. No doubt, the sale agreement was executed by the first defendant during the period of lease cum sale agreement and this Court has already held that it is not an alienation and only creating of an interest in view of the judgment of the Apex Court and the question arises whether discretion has to be exercised in favour of the plaintiff by defendant.
39. In the case on hand, it has to be noted that in order to overcome the sale transaction, the first defendant had gone to the extent of executing second sale agreement in favour of the second defendant in spite of receiving the entire sale consideration. Though counsel contends that entire sale consideration has not been paid and he has only paid Rs.1,30,000/-, there is no answer or explanation with regard to the recitals of Exs.1 and 4 to 7. If he has not received the entire sale consideration, what made him to deliver the possession in favour of the plaintiff is not explained. While granting the specific performance decree, the Court has to examine whether any hardship is caused to the first defendant or to the plaintiff. In the case on hand, the entire sale consideration has been received and delivered possession. Hence, discretion cannot be exercised in favour of the first defendant. He cannot blow hot and cold. While exercising the discretion, it has to be exercised judiciously and not arbitrarily. If it is exercised in favour of the first defendant, it amounts to arbitrariness considering the material on record. Hence I am of the opinion that the Court below has not committed any error in decreeing the suit. Apart from that, the first defendant has not filed any appeal before this Court and he is agitating his rights in the appeal filed by the subsequent agreement holder. The subsequent agreement holder also does not have any locus standi to question the decree. He ought to have enforced the decree by filing a suit and the same has not been done. The terms of the agreement are also clear that balance should be payable within one year. Based on Ex.D1, he has not filed any suit. It is further important to note that the sale consideration in terms of sale agreement is paid only by cash and the balance at the time of registration. It is mentioned that Rs.1,00,000/- is paid as cash. He also claims that he has paid the balance amount in terms of Exhibit D1. The same is payable at the time of registration of the sale deed. He claims without the registration, he has paid the balance amount also without insisting for registration. He also claims that he was put in possession but the plaintiff has already been in possession and the same has been admitted in the cross examination of the defendant No.1. Hence, I do not find any error in granting the relief of specific performance and decree of perpetual injunction in favour of the plaintiff. Hence answered Point Nos.1 to 3 as negative.
40. Having considered the material on record both oral and documentary and also the reasoning assigned by the trial Court, I am of the opinion that there is no merit in the appeal to reverse the finding of the trial Court.
In view of the discussions made above, the appeal is dismissed.
Sd/- JUDGE NBM/ST/AKC