K.S. Ramamurthi, J.
1. The first plaintiff, since dead and represented by his heirs, plaintiffs 2 to 6, (hereinafter referred to as the plaintiff) entered into an agreement with the 1st defendant for the purchase of a house and site in Mayuram, under an agreement, Exhibit A-1 dated 19th March, 1960 executed by the first defendant for a price of Rs. 1,000. On 9th September, 1961, the first defendant sold the property to the second defendant for a sum of Rs. 1,900. Notices passed between the parties in which the plaintiff's claim was denied and the plaintiff filed the present suit for specific performance of the agreement, Exhibit A-1.
2. The first defendant resisted the suit on the ground inter alia that the agreement of sale is vague, that there was no consensus ad idem between the parties as to the exact extent to be sold, that subsequent to the agreement of sale, the plaintiff gave up his rights and that only thereafter the property was sold to the second defendant. The latter, while adopting the pleas raised by the first defendant raised the further plea that he is a bond fide purchaser for value and in good faith without knowledge of the prior agreement of sale.
3. The trial Court negatived all the contentions of the defendants and decreed the suit as prayed for, but on appeal, the lower appellate Court, on a process of reasoning wholly unintelligible and perverse in the extreme, reversed the decision of the trial Court and dismissed the plaintiff's suit. The judgment of the learned Subordinate Judge betrays utter lack of grasp of elementary principles of law of contract and specific performance.
4. The plaintiff's agreement of sale provides that out of the total consideration of Rs. 1,000, an advance of Rs. 100 was paid, that within two weeks from the date of the agreement, the sale transaction should be completed, and that in case the vendor committed default, he should return the sum of Rs. 100 advance paid and also pay the vendee a further sum of Rs. 200. The case of the plaintiff as set out in the prior notices which passed between the parties, in the plaint, and as spoken to in the oral evidence, is that he was always ready to complete the transaction, having purchased stamp papers, that when he pursued the first defendant, the latter was evading. The lower appellate Court dismissed the plaintiff's suit on the following grounds; (1) that there has been an abandonment and waiver on the part of the plaintiff, (2) the contract is vague and uncertain and cannot be specifically enforced and (3) that the second defendant is a transferee for value who has paid his money in good faith and without notice of the plaintiff's agreement and so the plaintiff cannot, in any event, claim any rights as against the second defendant.
5. Before I proceed further, it is necessary to refer to Exhibit A-2, the notice issued on behalf of the plaintiff dated 7th July 1960 and the reply sent on behalf of the first defendant, Exhibit A-3 dated 25th July, 1960. Exhibit A-2 is a simple notice sent by the plaintiff expressing readiness and willingness on his part to complete the transaction and charging the first defendant with evasive conduct. In the reply notice Exhibit A-3, it was stated that the first defendant was throughout willing to complete the transaction as per the contract, but that the plaintiff told the first defendant on 3rd April, 1960 that the former had some inconvenience in purchasing the property, that the first defendant therefore was at liberty to sell the property to any third party and return the advance of Rs. 100 to the plaintiff but that the first defendant refused to return the sum of Rs. 100 as he was always ready and willing to complete the transaction, the default was on the part of the plaintiff, that the plaintiff thereupon agreed to forfeit the advance sum of Rs. 100, and that the plaintiff was not therefore entitled to claim specific performance thereafter. It is significant to mention here, that the reply notice, Exhibit A-3, sent on behalf of the first defendant is a brief and cryptic one and does not mention any other fact or detail. In this reply notice there is no reference to the mother of the plaintiff having played any part-in the transaction and to any vagueness, uncertainty or discrepancy about the actual extent to be sold, aspects which were only developed in the later stage.
6. I shall take up the question of the plaintiff's abandonment or waiver on which the plaintiff was non-suited. It is simply amazing how on the established and uncontroversial facts of the case, the learned Subordinate Judge upheld the plea of abandonment and waiver.
[After discussing the evidence his Lordship continued : ]
7. From the foregoing reasons, the inference is irresistible that far from there being the slightest evidence of waiver and abandonment, the plaintiff had been very vigilant and insisting upon his rights.
8. Equally worthless and absurd is the reasoning and finding of the learned Subordinate Judge that the contract is not specifically enforceable because of its. vagueness or uncertainty. The agreement of sale is quite clear and unambiguous.
[After giving his reasons for this view His Lordship proceeded] : . It only remains to consider the question whether the second defendant can claim to be a transferee for value who has paid his money in good faith and without notice of the prior agreement within the meaning of Section 27 (b) of the Specific Relief Act. It is this portion of the judgment which completely betrays lack of grasp of fundamental principles, on the part of the learned Subordinate Judge. I cannot understand how the lower appellate Court ignored the important circumstances and admissions of the second defendant to which pointed reference. was made in the judgment of the trial Court.
(a) Admittedly, the second defendant did not make any enquiry;
(b) Admittedly he did not apply either for encumbrance certificate or for the municipal extract for the suit property;
(c) The title deeds were with the mortgagee, the mother of the plaintiff and the second defendant did not make any effort to inspect the title deeds even though admittedly he was aware that the title deeds were with the mortgagee;
(d) Admittedly he did not even ascertain the amount due under this, mortgage.
The second defendant has candidly admitted in cross-examination when pursued as to why he did not take these elementary precautions, to quote his own words,, thus:
To avoid competition, I rushed through and finished the sale. Further I was having cash on hand and I thought it would be spent for other purposes if the transaction is not completed.
In this significant answer, using the words ' to avoid competition,' the second defendant has blurted out the truth that he was purchasing the property hastily in competition which in the context meant, ' competition with the plaintiff. ' In this background of gross negligence and total absence of any enquiry whatsoever, it passes one's comprehension how the learned Subordinate Judge held that the second defendant is a bona fide, transferee in good faith within the meaning of Section 27 (b) of the Specific Relief Act.
9. Out of the total consideration of Rs. 1,900 the sale deed recites that Rs. 240 was paid to the first defendant on the date of the sale deed and for a sum of Rs. 400 the second defendant simply executed a promissory note in favour of the first defendant. We are not concerned with the other items of consideration. The sale deed was executed on 9th March, 1961, but was registered on 21st March, 1961. The first defendant has admitted in his evidence that the cash of Rs. 240 was paid to him, not on the date of the sale, but only on the date of the registration, but before that, the notice has been issued on behalf of the plaintiff on 17th March, 1961 to both the defendants with the result, that the cash of Rs. 240 was paid to the vendor only after the second defendant obtained the plaintiff's lawyer's notice. This aspect is pointedly referred to in the judgment of the trial Court. The learned Subordinate Judge gets over this on the ground that when the sale deed recites that cash was paid on the date of the execution of the sale deed this story cannot be accepted. He has overlooked that both the defendants arc making common cause and that the second defendant was examined after the first defendant. There was no cross-examination of the first defendant, nor did the second defendant in his evidence say that cash was paid on the date of the sale deed. A perusal of the reasoning of the lower appellate Court shows that the learned Subordinate Judge is of the view that in the face of the recital in the sale deed, any evidence that the money was actually paid on the later date would be inadmissible. From start to finish, every step in his reasoning is wrong. When he reversed the judgment of the trial Court it was his obvious duty to have considered the findings of the learned District Munsif who has adverted to all these aspects. On the admitted facts, it has to be held that cash of Rs. 240 was paid after the defendants received the notice issued on behalf of the plaintiff. When the second defendant did not pay the entire consideration and passed a promissory note for Rs. 400, it is settled Jaw, that he cannot claim to be a transferee ' who has paid his money ' within the meaning of Section 27 (b) of the Specific Relief Act. In a recent Bench Judgment reported in Veeramalai Vanniar v. Thadikara Vanniar : AIR1968Mad383 , of which I was a member, this identical point came up for discussion and on a consideration of the entire case-law it was held that a transferee, to claim the protection under Section 27 (b) of the Specific Relief Act, must have paid the entire consideration and if for any portion of the price, a security alone had been executed, the transferee cannot claim to be a transferee 'who has paid his money'. This principle was laid down in the leading decision in Himatlal Motilal v. Vasudev Ganesh I.L.R. (1912) 36 Bom. 446, and it has been uniformly followed in all the Courts. In every one of these decisions, it has been held that the words 'who has paid his money' in Section 27 (b) of the Specific Relief Act means a person who has paid ' the whole of the consideration ' and not a transferee who has paid only part of it and that the words ' who has paid his money ' are not equivalent to the words ' who has agreed to pay his money either in whole or in. part '. The learned Subordinate Judge relied upon a Bench decision of this Court in Mary Joseph v. Tayub Mahamed Hajee & Co. : AIR1959Mad86 , in support of his view that passing of a promissory note for a portion of the consideration would be sufficient. That case has no application to the instant case as in that case, a portion of the consideration was adjusted in respect of a debt as between the vendor and the purchaser and all that the Bench decided was that the words ' who has paid his money ' would mean ' either payment in cash or by adjustment of a pre-existing debt due by the vendor.' In the case of such an adjustment, there can be no doubt that the portion of the consideration covered by such adjustment must be deemed to-have been actually paid. It is as though the vendee pays that portion of the consideration into the hands of the vendor and the vendor returns back the same in discharge of his pre-existing debt. In view of the recent Bench Judgment referred to above, it is unnecessary to labour this point any further. The result is that the second defendant has not satisfied any of the conditions laid down in Section 27 (b) of the Specific Relief Act.
10. For all these reasons, the second appeal is allowed and the plaintiff's suit is decreed as prayed for. The plaintiffs will have their costs in all the Courts. There will be a decree for specific performance directing the defendants to execute a sale deed in favour of the plaintiffs within two months from the date of the receipt of the judgment and decree of this Court by the trial Court. The sale deed to-be executed shall be on the lines indicated in the decision of the Supreme Court in Durga Prasad v. Deep Chand : 1SCR360 . There shall be a decree directing the defendants to put the plaintiffs in possession of the property. Out of the balance of the purchase price payable by the plaintiffs, the plaintiffs will be entitled to adjust their costs in all the three Courts payable to them as per the decree of this Court. The plaintiffs will be entitled to future profits which shall be determined in a separate application.
11. Leave refused.