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Gurmukh Singh Vir Singh and ors. Vs. Sohan Singh Bela Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 1100 of 1962
Judge
Reported inAIR1963P& H470
ActsSpecific Relief Act, 1877 - Sections 27; Transfer of Property Act, 1882 - Sections 40
AppellantGurmukh Singh Vir Singh and ors.
RespondentSohan Singh Bela Singh and anr.
Appellant Advocate D.S. Nehra and P.S. Goel
Respondent Advocate Rajinder Nath and; D.N. Aggerwal, Advs.
DispositionAppeal dismissed
Cases Referred and Dhadi Dalai v. Brasdev Satpathy
Excerpt:
.....at the first stage, even when, the plaintiff mentions in his plaint the reason why be is making the subsequent purchaser, a party, and how he came to know that the person concerned was a subsequent purchaser, when the exception mentioned in clause (b) of section 27 clearly imputes a notice to the subsequent transferee of the prior contract of sale, it cannot be said, unless the plaintiff admits that the subsequent transferee had no notice, that the onus lies on the plaintiff to prove that the transfer in favour of the subsequent purchaser is without notice......that the trial court decided the case on the assumption that the onus to prove the want of notice to defendants 2 to 9 was on the plaintiff. the correct rule, now ever, is that in such cases the onus is on the defendant transferee to prove that he had no notice of the prior agreement to sell in favour of the plaintiff. the onus being on the defendant can only be discharged by evidence led in the case. in this connection reference may be made is two privy council decisions in bhup narain singh v. gokul chand, air 1934 p.c. 68 and shankarlal narayandas v. new mofussil co. ltd., air 1946 pc 97. in bhup narain singh's case, air 1934 pc 68, lord thankerton who spoke for the board while dealing with section 27 of the specific relief act at page 70 of the report observed as under:--'in.....
Judgment:

D.K. Mahajan, J.

1. This second appeal is directed against the judgment ana decree of Additional District Judge, Ferozepur, reversing on appeal the judgment and decree of Subordinate Judge IInd Class, Zira.

2. The facts giving rise to this appeal are that parbara Singh who owned 24 kanals and 7 marlas of land in villageNasir Wala, Tehsil Zira, District Ferozepur, entered into anagreement to sell the same to Sohan Singh plaintiff for asum of Rs. 2400/-. This, agreement was entered into on31st January 1961 and a sum of Rs. 850/- was paid byhim as earnest money to Darbara Singh. It was provided in the agreement that the sale deed was to be executed by 28th June, 1961 and in case of default the vendor was to pay a sum of Rs. 500/- as liquidated damages. In this agreement the field numbers of the land were not specified. Another agreement was entered into between Darbara Singhand Sohan Singh on 22nd March, 1961. Darbara Singh received another amount of Rs. 300/- and the field numbers of the land that had been agreed to be sold were specified. Both these agreements were executed at Dharamkote another village six miles away from the village in which the land is situate. These agreements were witnessed by Mangal Dass and Buta Singh, and Tarseem Singh and Maluk Chand respectively. None of those four witnesses belongs to the village in which the land in dispute is situate. On 29th May, 1961, Darbara Singh, however, sold the land in dispute, which he had agreed to sell to Sohan Singh, to Gurmukh Singh and others for a sum of Rs. 2500/- by a registeredsale deed. The present suit was filed on 19-6-61 by Sohan Singh for specific performance of the contract of sale entered into by Darbara Singh with him. The purchasers Gurmukh Singh and others were made parties to the suit. An alternative prayer was made that in case specific performance is not allowed a decree for Rs. 1650/- be passed in favour of the plaintiff against the defendants. This Rs. 1650/- is claimed on account of the amount received under the two agreements by Darbara Singh from Sohan Singh and Rs. 500/- liquidateddamages agreed to in the first agreement of a 1st January 1961. So far as Gurmukh Singh and other vendees are concerned their defence is that they are bona fide purchasers lor value without notice of the previous agreement to sen end as such are protected and the sale in their favour cannot be set aside and plaintiff's suit for specific performance of the agreement to sell cannot be decreed. Darbara Singh defendant No. 1 pleaded in defence that the plaintiff was not willing to purchase the land and he, therefore, entered into a contract of the sale with the defendants 2 to 9. The trial Court decreed the plaintiff's suit for a sum of Rs. 1650/- against defendant No. 1 with proportionate costs but dismissed the suit against defendants 2 to 9 we transferees. It held that defendants 2 to 9 had no notice of the agreement to sell and were bona fide transferees for value. It was further held that defendant No. 1 was never willing to perform his part of the contract and that he without any reason made a default in the agreement of the sale which he had entered into with the plaintiff.

3. Against this decision detendant 1 and the Plaintiff appealed. The lower appellate Court allowed the plaintiffs appeal and dismissed that of defendant No. 1. The finding of the trial Court that defendants 2 to 9 were bona fide transferees for value without notice was set aside and it was held that defendants 2 to 9 had notice of me prior agreement to sell executed by Darbara Singh in favour of Sohan Singh plaintiff. In this view of the matter the plaintiffs suit for specific performance has been decreed. Defendants 2 to 9 who were dissatisfied with this decisionhave come up in second appeal to this Court.

4. Mr. D.S. Nehra, learned counsel for the defendant-appellants argues that the lower appellate Court reversed the decision of the trial Court on three grounds, namely (1) that the agreements of sale were attested by as many as four witnesses, both the agreements were got executed from the same petition-writer, the witnesses to both the agreementsare not common and therefore there was no effort at concealment, (2) that Sohan Singh entered into possession of part of the land agreed to be sold and if the defendants 2 to 9 had made any enquiry they would have known that Sohan Singh was in possession by virtue of the agreement to sell and (3) that the sale in favour of defendants 2 to 9 was completed in haste. He maintained that none of these grounds is substantiated by evidence on the record, this contention is partially correct. So far as first ground is concerned the learned counsel conceded that no fault could be found with the same but with regard to the second and third grounds he maintained that they were unfounded, the contention of the learned counsel with regard to the second ground seems to be correct. The entries in the khasra girawari on the basis of which the decision on this ground is based are proved to be wrong inasmuch as in the report Exhibit P-3 lodged by the plaintiff to the police no mention to the effect that he was in possession of the land is made. So far as the third ground is concerned no serious fault can be found with the same. It may however be mentioned that the trial Court decided the case on the assumption that the onus to prove the want of notice to defendants 2 to 9 was on the plaintiff. The correct rule, now ever, is that in such cases the onus is on the defendant transferee to prove that he had no notice of the prior agreement to sell in favour of the plaintiff. The onus being on the defendant can only be discharged by evidence led in the case. In this connection reference may be made is two Privy Council decisions in Bhup Narain Singh v. Gokul Chand, AIR 1934 P.C. 68 and Shankarlal Narayandas v. New Mofussil Co. Ltd., AIR 1946 PC 97. In Bhup Narain Singh's case, AIR 1934 PC 68, Lord Thankerton who spoke for the Board while dealing with Section 27 of the specific Relief Act at page 70 of the Report observed as under:--

'In their Lordships' opinion, the section lays down a general rule that the original contract may be specitically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships' opinion, it is clearly for the transferee to establish the circumstances which will allow him to retain the benefit of transfer which prima facie he had no right to get. Further the subsequent transferee is the person within whose knowledge the facts as to whether he has paid and whether he had notice of the original contract lie, and the provisions of Sections 103 and 106, Evidence Act, 1872, have a bearing on the question. That plaintiff does not necessarily have knowledge of either matter, in a case in 1862 before this Board, Varden Seth Sam v. Luckpathy Royjee Lallah, Marsh 461 (PC) an equitable lien by deposit of title deed was enforced against a subsequent transferee of the property. In delivering the judgment of this Board, Lord Kingsdown stated:--

'Though both the third and the last defendants pleaded in effect, that they were bona fide purchasers for value without notice, yet they did not prove that defence, though the plaintiff charged notice and collusion with defendant 1. And, later:

'The question to be considered is, whether defendants 3 and 6 respectively possessed the land free from that lien whatever its nature. As one who owns property subject to a charge can, in general, convey no title higher or more free than his own, it lies always oh a succeeding owner to make out a case to defeat such prior charge. Let it be conceded that a purchaser for value, bona fide, and without notice of this charge, whether legal or equitable, would have had in these Courts an equity superior to that of the plaintiff, still such innocent purchase must be, notmerely asserted, but proved in the cause, and this case furnishes no such proof.' Although under Section 54, T,P. Act; 1882 the appellant's agreement for sale does not of itself create any interest in or charge on the property, their Lordships are of opinion that the rule of procedure stated by Lord Kingsdown is applicable to the present case under Section 27(1)(b), Specific Relief Act. This view under the Specific Relief Act has been taken in a number of cases in India.'

In view of the fact that there was not sufficient evidence led by the defendant to prove want of notice the plaintiff'ssuit for specific performance was decreed. In Shankerlal's case, AIR 1946 PC 97 their Lordships referring to their pri sious decision in Bhup Narain Singh's case, AIR 1934 PC 68 thought it unnecessary to consider the evidence whichwas produced on behalf of plaintiff to show that the defendants in fact had notice of the earlier contract. Therefore the correct approach is to find out whether the defendants in the instant case have led evidence to show that they had no notice of the previous agreements to sell in favour of the plaintiff. So far as the trial Court is concerned it merely examined the plaintiff's evidence. The lower appellate Court has not also referred to the evidence led by the defendants on this part of the case. It merely came to the conclusion that the defendants had notice from the circumstancesalready detailed by me in the earlier part of this judgment.We have been taken through the evidence led on this partof the case by the learned counsel for the appellants andin our opinion this evidence falls short of discharging theonus which rested on the defendants particularly in viewof the two circumstances out of the three on which thelower appellate Court placed reliance in finding in favour ofthe plaintiff.

5. The learned counsel for the appellants contends that the mere denial by the defendants to the effect that they have no notice of the previous contract of sale would discharge the onus that rests on them in view of the Privy Council decisions already referred, to in this connection reliance has been placed on Ramchander Singh v. Bibi Asghar Begam, AIR 1957 Pat 224 and Dhadi Dalai v. Brasdev Satpathy, AIR 1961 Orissa 129. So far as Ramchander Singh's ease, AIR 1957 Pat 224 is concerned the matter that was debated was as to on whom the onus rested in such a suit i.e., whether the onus was on the 'plaintiff or on the defendant. It was held that the onus was oh the defendant. In this decision the learned Judge made the following observations:--

'It is not for the plaintiff to show that the subsequent purchaser had notice of the previous contract in favour of the plaintiff. The onus of such a negative issue of proving that the subsequent purchaser had no notice of a prior claim is ordinarily discharged by a denial and bya negative evidence. Very little evidence, and, in certain circumstances, a men denial, regarding want of knowledge of the plaintiff's contract would discharge this onus and shift the onus on the plaintiff. But under no circumstance, the initial onus, which is on the subsequent trarsferee, shifts or As plaintiff at the first stage, even when, the plaintiff mentions in his plaint the reason why be is making the subsequent purchaser, a party, and how he came to know that the person concerned was a subsequent purchaser, when the exception mentioned in Clause (b) of Section 27 clearly imputes a notice to the subsequent transferee of the prior contract of sale, it cannot be said, unless the plaintiff admits that the subsequent transferee had no notice, that the onus lies on the plaintiff to prove that the transfer in favour of the subsequent purchaser is without notice.'

6. Therefore no benefit can be derived from this decision. Each case will have to be examined on its own factsto find out whether the onus which rests on the defendantin view of Section 27 of the Specific Relief Act is dischargedor not.

7. In' Dhadi Dalai's case, AIR 1961 Orissa 129 theaforesaid observations, of Raj Kishore Prasad J. In RamchanderSingh's case, AIR 1957 Pat 224 were relied upon by J. R.Misra J. and it was held that the onus which rested orthe, subsequent purchaser was, discharged. In the concludingportion of this decision, it is observed.

'In the present case, defendant No. 1 pledged his ows oath that he had no notice of the earlier agreement for sale, and no apparent justification has been indicated to disbelieve the said denial. If by any positive act be was to prove his honesty of intention, he has established that no made enquiries from the registration office about any existing encumbrance, and he further got the suit land identified by an amin, prior to the purchase. So the contention that the purchaser has not been able to discharge the onus has to be rejected.'

It will thus be obvious that in this case there was sufficient evidence on the basis of which it was held that We onus had been discharged.

8. But both of these decisions have no application to the facts of the present case. In the present case, the evidence led to discharge that onus has been disbelieved. That being so, it cannot be held that the onus that rested on the defendant has been discharged.

9. For the reasons given above, this appeal fails and is Dismissed but there will be no order as to costs.

Prem Chand Pandit, J.

10. I agree.


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