BHAGAWAN Vs. DWARAKANATH

JUDGEMENT

(1.) WHETHER a purchaser of property could be said to have deemed or constructive notice of the right of a person in possession of it or a portion of it and whether relief of specific performance be refused in such a case to that person claiming earlier right over the property, are the short points on which the result of this appeal depends.

(2.) BRIEF facts, giving rise to the present appeal, are: (a) The appellant-plaintiff (hereinafter referred as 'plaintiff) brought suit in O. S. No. 40 of 1990 before the Civil Judge, Hubli against respondents defendants (hereinafter referred as 'defendants') for specific performance of contract of sale by registered sale deed stating that, on 21-6-1989, the defendants 1 to 3 have entered into an agreement of sale in his favour after receiving Rs. 35,000/- out of consideration of Rs. 80,000/- with regard to suit property, portion of which shown as EFGH (in the plaint sketch filed with the plaint) is in his possession as a tenant, though defendants 4 to 6 had thrown out his belongings from the portion marked as ABCD (in the sketch) in his possession, when he was out of Hubli on 10-3-1990, after the suit property was purchased in the name of defendant 5 under registered sale deed from defendants 1 to 3-owners in spite of having had knowledge of said agreement of sale in his favour and as such he is entitled to declaration that the sale deed made in favour of defendant 5 is null and void and not binding on him and also for possession of ABCD and IJKL portions shown in the sketch along with specific performance by execution of registered sale deed by defendants. (b) According to defendants 1 to 3, they did not enter into any agreement of sale with plaintiff nor they received any amount from him, but he was collecting rent from other tenants. When he pleaded that those tenants are not giving rent and want power of attorney, having had confidence in the plaintiff, they signed blank stamp paper brought to Bombay, which has been later converted by him into an agreement of sale by misusing the confidence, and denied agreement of sale and also the alleged dispossession from ABCD portion by them. They admit execution of a registered sale deed in favour of defendant 5 after receiving Rs. 83,000 as sale consideration and plead defendant 5's possession over the suit property other than EFGH portion in occupation of the plaintiff as a tenant and consequently, prayed to dismiss the suit. (c) It is the case of defendants 4 to 6 that defendant 5 has purchased the suit property from defendants 1 to 3 for valuable consideration and he is in possession of the same except EFGH portion in possession of plaintiff, for which HRC proceedings have been initiated but, the plaintiff, with mala fide desire not to vacate said EFGH portion, has come forward with alleged agreement of sale, not executed by defendants 1 to 3. At any rate, according to them, as the defendant 5 is a bona fide purchaser for value without notice of the agreement of sale alleged, the plaintiff is not entitled to any relief claimed. Hence, they also requested to dismiss the suit of plaintiff. (d) The plaintiff examined himself and 4 witnesses in support of his case. None was examined for defendants 1 to 3. However, power of attorney holder/of defendant 5 was examined as D. W. 1 besides one more witness for defendants 4 to 6, After hearing and considering the evidence adduced, the Trial Court decided following Issue Nos. 5 to 11, additional Issue Nos. 1 and 2 in favour, Issue Nos. 2 and 3 against whereas, Issue Nos. 1 and 5 partly in favour and against the plaintiff and decreed the suit of the plaintiff: "1. Whether the plaintiff prove that he is tenant of the two premises marked by letters ABCD and EFGH? 2. Whether plaintiff proves his forceful dispossession from abcd portion on 10-3-1990, when he had allegdly gone to dandeli as contended in para 9 of the plaint? 3. Whether plaintiff proves that the possession of the defendants 4 to 6 over IJKL is illegal and unauthorised? 4. Whether plaintiff proves that sale agreement dated 21-6-1989 in respect of suit property allegedly executed by defendants 1 to 3 and payment of Rs. 35,000/- to them towards part payment and that he is a owner purchased of the suit property? 5. Whether the sale transaction and sale deed dated 24-2-1990 is not binding on plaintiff and that it is illegal? 6. Whether plaintiff is tenant in possession of EFGH portion in the hands of defendant 5? 7. Whether the plaintiff proves that he is always ready and willing to perform his part of the agreement, in getting the sale deed executed from defendants 1 to 3? 8. Whether defendants are entitled to compensatory costs as prayed? 9. Whether Court fee paid is not proper? 10. Whether plaintiff is entitled to the relief claimed? 11. What order or decree? additional Issue No. 1: 1. Whether the plaintiff is entitled for alternative relief of return of Rs. 35,000/- from the defendants? additional Issue No. 2: 2. Whether defendant 5 proves that the bona fide purchaser without notice for valuable consideration?" (e) Challenging the said judgment and decree of the Trial Court defendants 1 to 3 preferred R. A. No. 28 of 1996 whereas, defendants 4 to 6 filed R. A. No. 65 of 1995 before the Court of First Additional District judge, Dharwad, which had raised following points for determination: " (1) Whether plaintiff has proved that defendants 1 to 3 entered into an agreement of sale on 21-6-1989 in respect of the schedule property and he is entitled for its specific performance? (2) Whether defendants 4 to 6 have proved that defendant 5 has purchased the schedule property from defendants 1 to 3 for bona fide value and consideration and without notice of agreement of sale? (3) Alternatively, whether plaintiff is entitled for return of the earnest money Rs. 35,000/- with 24% interest? (4) Whether defendants 1 to 3 have proved that the plaintiff has taken the agreement of sale by playing fraud and misrepresentation?" (5) Whether the judgement and decree under appeals call for any interference?" (f) Though the Trial Court held that defendant 5 is not a bona fide purchaser without notice and the plaintiff is entitled to the relief of specific performance, the First Appellate Court, while considering the points raised by it, held the defendant 5 as a bona fide purchaser without notice and refused the relief of specific performance to the plaintiff but ordered for refund of the earnest money of Rs. 35,000 to plaintiff by defendants 1 to 3 jointly and severally with interest at Rs. 12% per annum from 21-6-1989 and accordingly, disposed of both the appeals. It is against the said judgment and decree passed by the First appellate Court, the plaintiff is before this Court.

(3.) HEARD both sides. It was vehemently argued for the plaintiff that the purchase of suit property by defendant 5 could be said to be with constructive notice of the plaintiffs earlier agreement of sale dated 21-6-1989 executed by defendants 1 to 3 and hence, the First Appellate court was wrong in holding otherwise and refusing specific performance granted by the Trial Court. On the other hand, the learned Counsel for defendants 4 and 5 has supported the impugned judgment and decree. Perused the record.