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Dinesh Chandra Guha Vs. Satchidananda Mukherji and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 210 of 1968
Judge
Reported inAIR1972Ori235
ActsSpecific Relief Act, 1877 - Sections 27; Code of Civil Procedure (CPC) , 1908 - Sections 103; Registration Act, 1916 - Sections 58(1)
AppellantDinesh Chandra Guha
RespondentSatchidananda Mukherji and ors.
Appellant AdvocateR.N. Sinha, Adv.
Respondent AdvocateA. Mohanty, Adv.
DispositionAppeal dismissed
Cases Referred(Banshidhar Mohapatra v. Souri Samal
Excerpt:
.....to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - (2) plaintiff failed to perform his part of the contract of tendering rs. the position of law is well settled that in a suit for specific performance where a subsequent transferee wants to retain the benefits of the transfer in his favour, the onus rests on him to establish the circumstances mentioned in section 27(1)(b) of the specific relief act. 3:-it is next contended that the lower appellate court at the end of paragraph 10 of its judgment..........defendant no. 4 who was a bona fide purchaser for value without any notice or knowledge of the suit contract. defendant no. 4 in his written statement states that he had previously purchased some properties including the b schedule property from. kamalabala dasi. to avoid any possible future trouble, he purchased the said property from defendant nos. 1 to 3 for a consideration of rs. 1,500/- on 14-5-1960. he being a bona fide purchaser for value without notice of any previous contract between the plaintiff and defendant nos. 1 to 3, relieffor specific performance cannot be granted against him.4. the trial court disallowed the prayer for specific performance, but decreed the suit for rs. 800/- against defendant nos. 1 to 3 on the following findings. (1) the contract contained in ex. 3.....
Judgment:

A. Misra, J.

1. Plaintiff is the appellant against a confirming judgment in a suit for specific performance of contract for sale. Originally, plaintiff prayed for specific performance of contract in respect of the properties described in Schedules A and B of the plaint, both of which are situate in Puri town. In the trial court, the claim, so far it related to the A schedule property, was given up,and the plaintiff confirmed his claim to the B schedule. Necessarily the subject-matter of this appeal relates to the B schedule property only.

2. The case of the plaintiff, in brief is as follows: The disputed properties originally belonged to Umananda, Rhagendranath and others. In a partition suit of 1923, the A schedule land fell to the share of Khagendranath and his two brothers and the B schedule to Umananda. Thereafter, Umananda mortgaged the B schedule property to Nagendranath Mukherji, father of defendant Nos. 1 to 3. On 11-1-1935. Umananda sold a portion of the said land to one Kamalabala Dasi who in her turn sold the same to the original defendant No. 4 who died during the pendency of the appeal in the lower appellate court and was substituted by his legal representatives. The mortgagee filed Mortgage Suit No. 8 of 1940 on the file of the Subordinate Judge, Burdwan and obtained a preliminary decree which was made final. In execution of the said decree in Ex. Case No. 27 of 1949, the property was sold and purchased by the mortgagee-decree-holders on 7-5-1951 and 8-5-1951. Plaintiff-appellant, it is stated, was interested in bidding at the auction sale, but was dissuaded by defendant Nos. 1 to 3 from doing so on their assurance that they would sell the property to him. Accordingly, defendant Nos. 1 to 3 entered into an agreement with the plaintiff to sell the property for a consideration of Rs. 1,000/-. Out of the consideration, they received an advance of Rs. 800/- and promised to execute the sale deed on payment of the balance. As defendant Nos. 1 to 3 did not execute the sale deed even after tender of the balance consideration, the plaintiff filed T.S. No. 58 of 1957 in the court of the Munsif Puri for obtaining specific performance of the contract. On 10-3-1958, parties agreed to compromise the suit and entered into the agreement marked Ex. 3 which was executed by defendant No. 1 for self and as power-of-attorney holder of defendants Nos. 2 and 3. Under the terms of the compromise, it was agreed that the defendants will not proceed with the suit for partition of the properties which they had purchased in Ex. Case No. 27 of 1949 and the plaintiff would not proceed with the suit for specific performance which was pending in the court of the Munsif, Puri. Defendants Nos. 1 to 3 further agreed to sell the suit property for a consideration of Rs. 1,500/- to the plaintiff, adjust the amount of Rs. 800/-which they had received on 11-3-1954 and on plaintiff paying the balance of Rs. 700/- to defendant No. 1 or their advocate by 2-1-1959, they would execute and register the sale deed by coming to Puri at the plaintiff's cost whichwas assessed at Rs. 30/-. After this compromise containing the terms of the contract, defendant Nos. 1 to 3 did not turn up at Puri for recording the compromise till 8-1-1960, on which date, the compromise was recorded and the suit for specific performance was dismissed. It is alleged that both before and after 8-1-1960, plaintiff tendered the balance amount of Rs. 700/- to defendant No. 1 and called upon the defendants to execute and register the sale deed. Defendant No. 1 on some pretext or other avoided to comply and commenced negotiations with defendant No. 4 for sale of the B Schedule land. It is also stated that defendant No. 4 was looking after the limitation in T. S. No. 58 of 1957 and was fully aware of the contract. On these allegations, plaintiff sought specific performance against defendant Nos. 1 to 3 and also against defendant No. 4, in case it is found that he has taken a sale deed from the former.

3. Defendant Nos. 1 to 3 in theirwritten statement admit execution of the agreement (Ex. 3). In accordance with those terms, it is alleged that they withdrew the partition suit that was pending at Burdwan and ultimately the suit for specific performance which was pending in the Munsif's court was also dismissed. They, however, aver that the plaintiff never offered or tendered the balance consideration of Rs. 700/- in accordance with the terms of the contract contained in Ex. 3 on or before 1-1-1959, and as such he cannot claim specific performance or refund of Rs. 800/- which he had paid in 1954. According to them, defendant No.4 had purchased the B Schedule land from Kamalabala Dasi on her representation that defendant Nos. 1 to 3 had no subsisting interest in the land as she happened to be the lessee under the Puri Municipality. Nevertheless, with a view to avoid any future trouble, defendant No.4 wanted to purchase whatever rights defendant Nos. 1 to 3 possessed in the said property, and accordingly, they sold the B Schedule property to him under a registered sale deed dated 15-4-1960 for a consideration of Rs. 1,500/-. The plaintiff is not entitled to enforce specific performance against defendant No. 4 who was a bona fide purchaser for value without any notice or knowledge of the suit contract. Defendant No. 4 in his written statement states that he had previously purchased some properties including the B Schedule property from. Kamalabala Dasi. To avoid any possible future trouble, he purchased the said property from defendant Nos. 1 to 3 for a consideration of Rs. 1,500/- on 14-5-1960. He being a bona fide purchaser for value without notice of any previous contract between the plaintiff and defendant Nos. 1 to 3, relieffor specific performance cannot be granted against him.

4. The trial court disallowed the prayer for specific performance, but decreed the suit for Rs. 800/- against defendant Nos. 1 to 3 on the following findings. (1) The contract contained in Ex. 3 is genuine and valid; (2) plaintiff failed to perform his part of the contract of tendering Rs. 730/- to defendant Nos. 1 to 3 within the stipulated date, but he did not resile from the terms of the contract; (31 time for payment of the balance consideration was not the essence of the contract; (4) Ex. 3 does not amount to a novation of the previous contract; (5) defdt. Nos. 1 to 3 had subsisting right to enter into the contracts (6) defendant No. 4 is a bona fide purchaser without notice of the previous contract and (7) plaintiff is entitled to refund of Rs. 800/- from defendant Nos. 1 to 3. The lower appellate court agreed with the aforementioned findings of the trial court and held that defendant No. 4 is a bona fide purchaser for value without notice of the plaintiff's contract. Accordingly, it confirmed the judgment and decree of the trial court.

5. Learned Counsel for appellantassails the judgment and decree of the courts below on the following three grounds; (1) the Courts below erred in placing the onus on the plaintiff to prove that defendant No.4 was a subsequent purchaser with notice of the previous contract; (2) the courts below have not considered the evidence or recorded a finding that defendant No. 4 paid the consideration for his purchase and (3) having held that time was not the essence of the contract, the suit should have been decreed for specific performance.

6. I will now proceed to deal with the merits of the aforementioned contentions in seriatim.

7. The first contention urged on behalf of the appellant is that in a suit for specific performance, where a person claims to be a purchaser for value without notice of the previous contract, the onus rests on him to prove that he fulfils that character. The trial court in paragraph 10 of its judgment has observed as follows:

'Admittedly the property in suit no more belongs to defendant Nos. 1 to 3 as it has been alienated by them in favour of defendant No. 4 by a registered deed of sale for Rs. 1,500/- on 14-5-1960 as per Ex. E subsequent to the contract in question. That being so the plaintiff is not entitled to the relief as claimed and prayed for by him unless he proves that defendant No. 4 is a subsequent purchaser with notice of the previous contract, especially when defendant No. 4 denied having any knowledgeregarding the existence of any such contract. But he has not been able to substantiate the same.'

These observations, no doubt, lend support to the contention that the trial court proceeded as if the burden lies on the plaintiff to prove that the subsequent purchaser had notice of the contract. The position of law is well settled that in a suit for specific performance where a subsequent transferee wants to retain the benefits of the transfer in his favour, the onus rests on him to establish the circumstances mentioned in Section 27(1)(b) of the Specific Relief Act. In the decision reported in AIR 1934 PC 68, Bhup Narain v. Gokul Ohand, while dealing with this question, the position of law was explained as follows:

'Section 27 (Specific Relief Act) lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule not to the transferor, but to the transferee, and therefore it is for the transferee to establish the circumstances which will allow him to retain the benefit of a transfer which prima facie he had no right to get.'

In the decision reported in AIR 1955 Mys 3 (Venkataravanappa v. Dasappa) while dealing with burden of proof, it was observed;

'Where a person claims to be a purchaser for value without notice of the original contract, the burden lies on him to prove that he fulfils that character.'

To the same effect are the observations in the decision reported in AIR 1968 Mad 383. (Veeramalai v. Thadikara) where it was held:

'The burden of proof is upon the subsequent purchaser to establish these conditions in order that his rights may prevail over the prior agreement of sale.'

Our High Court in the decision reported in AIR 1961 Orissa 129, (Dhadi Dalai v. Basudeb Satpathy) also expressed the same view. Thus, there can be no dispute about the legal position that in all such cases the initial onus rests on the subsequent transferee to prove the circumstances which will permit him to retain the benefit obtained under the sale. Though the trial court apparently has made an erroneous approach, the judgment of the lower appellate court while dealing with the evidence does not suffer from any such infirmity. In paragraph 11 of its judgment, the lower appellate court has discussed the evidence adduced on both sides and arrived at the finding that defendant No. 4 is a purchaser for value without notice of the plaintiff's contract. Therefore, it will not be correct to say that both the courts have wrongly thrown the onus on the plaintiff. Apart from it, when bothparties entered into evidence and a finding has been arrived at on a consideration of the entire evidence, the question of onus becomes purely academic. In these circumstances, the finding of the lower appellate court about defendant No. 4 being a purchaser without notice is not open to interference in second appeal.

8. Point No. 2 -- It is next urged by learned Counsel for appellant that neither of the courts below has considered the evidence nor recorded a finding that deft. No. 4 is a purchaser for value who actually paid consideration under Ext. E and without such a finding, the impugned judgments cannot be sustained. There can be no dispute that under Section 27(1)(b) of the Specific Relief Act, the circumstances which are required to be established by the subsequent transferee to successfully resist the claim of specific performance of a prior contract are firstly, the transfer is for value; secondly, the money has been paid; thirdly, the purchase was bona fide and lastly, the purchase including payment of money was without notice of the prior contract. The first two elements are positive, while the last two are negative and inferential. In the present case, the trial court while dealing with this question in paragraph 10 of its judgment, did not consider the evidence about actual payment of the consideration nor record a finding to that effect. The lower appellate court dealt with this aspect in paragraph 11 of its judgment. While recording a finding that defendant No. 4 is a bona fide purchaser for value without notice of the contract, it has not considered the evidence about the factum of actual payment of consideration In these circumstances, the attack levelled by learned Counsel for appellant cannot be considered totally unjustified. For respondents, on the other hand, it is contended that though such a lacuna does appear in the judgments of the courts below, as there is sufficient evidence on record to establish the actual payment of consideration. This Court in second appeal can decide the point without the necessity of remanding it for the purpose. Section 103. Civil P. C. as it stands empowers the High Court in second appeal to determine issues of fact firstly, where such issues have not been determined by the lower appellate court and secondly, where they have been wrongly determined provided the evidence on record is sufficient to enable the High Court to determine such issues. In case, the evidence on record is not sufficient, the proper course is to refer the issue for a finding under Order 41. Rule 25, Civil P.C. In a decision of our High Court reported in (1967) 33 Cut LT 601, (Banshidhar Mohapatra v. Souri Samal),relying on Section 103, Civil P. C. it was held that the High Court in second appeal may determine any issue of fact necessary for disposal of the appeal not determined by the lower appellate court, if the evidence on record is sufficient. Now, it is to be considered whether the evidence on record is sufficient to hold that consideration was actually paid under Ex. E. There is an endorsement by the Sub-Registrar on Ex. E that the sum of Rs. 1,500/- towards the consideration was paid in his presence at the time of registration. Under Section 58(1)(c) of the Registration Act, a sub-Registrar has to endorse on every document presented for registration the payment of money made in his presence in reference to such document. Under Section 60(2) of the Registration Act, there is a presumption that the facts mentioned in the endorsement referred in Section 59, i.e. all endorsements made under Sections 52 to 58, have occurred as therein mentioned. Thus, there is an initial presumption raised by this endorsement on the back of Ex. E about payment of Rupees 1,500/- as consideration of the document (vide AIR 1948 Nag 110). In addition to it defendant Nos. 1 to 3 in their written statement admit receipt of Rs. 1,500/- as consideration of the sale from defendant No. 4 and defendant No. 1 in his evidence categorically says that he received Rs. 1,500/- before the Sub-Registrar, Puri. Defdt. No. 4 examined as D.W. 2 in his evidence stated that consideration was paid under Ex. E before the Sub-Registrar. This statement has not been challenged in his cross-examination. As against this, no rebuttal evidence has been adduced on behalf of the plaintiff. Thus, there is overwhelming material, both oral and documentary, to come to a finding that Ex. E is for value and the entire consideration thereunder was paid by defendant No. 4 to defendant No. 1 in the presence of the Sub-Registrar at the time of registration of the document. Hence, the purchase by defendant No. 4 was for value and full consideration was paid to the vendor. It has been concurrently found that defendant No. 4 was a bona fide purchaser without notice of the previous contract. Therefore, as has been held by the courts below he is entitled to the protection available under Section 27(1)(b) of the Specific Relief Act.

9. Point No. 3:-- It is next contended that the lower appellate court at the end of paragraph 10 of its judgment was wrong in holding that the plaintiff failed to perform his part of the contract within the time stipulated by not tendering the balance consideration before 2-1-1959, and as such not entitled to get a decree for specific performance, in view of the other finding that time was notthe essence of the contract. Further,Ex. 2 has been referred to as proving the readiness on the part of the plaintiff to perform his part of the contract. As it has been found that defendant No. 4 is a bona fide purchaser for value who paid the entire consideration without notice of the prior contract, the question of plaintiff's readiness and willingness to perform his part of the contract is not very material. Therefore, I do not consider it necessary to deal with this aspect.

10. In the result, the appeal fails and is accordingly dismissed with costs.


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