SHA PEERCHAND Vs. J V SUBRAMANYA JYOSYULU

JUDGEMENT

(1.) Plaintiff is the appellant in this appeal. Defendants 2 and 3 are minors and first defendant is the father of defendants 2 and 3. The suit is filed for specific performance of an agreement to sell, Ex.A-1, dated 19-9-1976. The agreed total consideration was Rs.40,000/-. The property sought to be purchased is mentioned in plaint 'A' schedule and specified in Ex.A-2, plan, attached to the sale agreement, Ex.A-1. Plaint 'B' schedule property was given as security for due performance of the sale' agreement. The suit property consists of two shops with open space the total area being 150 square yards. Under the agreement, an amount of Rs.1,000/- was paid as advance. Plaintiff lent money to defendants 1 to 3 on different occasions under the promissory notes, viz., Ex.A-3 dated 14-2-1976 for Rs.22,000/- and Ex.A-4 dated 6-3-1976 for Rs.10,000/-, repayable with compound interest at 24% per annum. Plaintiff also claims that the agreement, Ex.A-1, was executed in discharge of the amounts due under the two promissory notes, Exs.A-3 and A-4, and the balance, if any, payable by the plaintiff should be paid at the time of registration of the sale deed, and the sale deed should be executed and registered by defendants 1 to 3 in favour of the plaintiff or his nominee whenever the plaintiff requires them to do so. In spite of several demands made by the plaintiff, the defendants 1 to 3 failed to execute the sale deed in terms of the agreement and the plaintiff was always ready and willing to perform his part of the contract. Defendants 4 and 5 entered into an agreement to purchase the very same property from defendants 1 to 3 with notice of prior contract of sale in favour of plaintiff. Plaint 'B' schedule property, which had been given as security under Ex.A-1, was also given as security to defendants 4 and 5, by defendants 1 to 3 for performance of the alleged agreement. Defendants 1 to 3 are making preparations to execute the sale deed in favour of defendants 4 and 5, in pursuance of the subsequent agreement. Coming to know about the same, plaintiff informed defendants 4 and 5, by telegrams Exs.A-5 and A-6,.dated 27-9-1978, about the agreement to sell, dated 19-9-1976, Ex.A-1, and asking them to desist from purchasing the property in question. Eventhough they received the above telegrams, no reply was given. Plaintiff claims that the agreement in favour of D-4 and D-5 will not bind him. Plaintiff also sought for interim injunction restraining defendants 1 to 3 from getting the sale deed executed and registered in favour of defendants 4 and 5.

(2.) A common written statement is filed on behalf of defendants 1 to 3, alleging that the suit is not maintainable, as the promissory notes relied upon by the plaintiff stand in the name of an unregistered firm; the promissory notes alleged to have been executed by the 1st defendant are not bidning on the minor defendants 2 and 3, and they are not enforceable against them. They also denied the execution of Ex.A-1, agreement of sale in favour of plaintiff. It is stated that the promissory notes, Exs.A-3 and A-4, are typical marwadi transactions and are illegal and opposed to public policy; an amount of Rs.10,000/- and an amount of Rs.4,500/- were only paid under the two promissory notes respectively, dated 14-3-1976 and 6-3-1976; the agreement of sale is devoid of consideration; the property is much more valuable than the amount of Rs.40,000/-, covered by the promissory notes and the agreement of sale is intended only as a security for the payment of the amounts due under the promissory notes, standing in the name of the unregistered firm; the suit transaction is not for the legal necessities of the minor defendants 2 and 3; the interest payable under the promissory notes is usurious; M/s. Chemanji Bhurmal in whose favour the promissory notes were executed, is not a registered firm and the amounts due under the promissory notes are not discharged by plaintiff; the suit is barred by limitation that after receipt of the telegraphic notices, plaintiff himself started negotiations through one Raghunathmal Poonamchand for payment of the amounts due under the promissory notes; even before the negotiations are concluded in settling the disputes, the present suit is filed by the plaintiff; and that the defendants are agriculturists, entitled to the benefit of scaling down the interest due under the promissory notes.

(3.) Defendants 4 and 5, in addition to the averments made in the written statement filed by defendants 1 to 3, filed a separate written statement claiming that they are bona fide purchasers for value without the knowledge of the sale agreement, Ex.A-l, executed by defendants 1 to 3 in favour of the plaintiff. They claimed that they are in possession of the property and they have made alterations incurring heavy expenditure. They also claimed that they have deposited the amounts due to the plaintiff from defendants 1 to 3.