BALDEV SINGH Vs. MOHAN SINGH

JUDGEMENT

(1.) The plaintiffs assail the correctness of the findings arrived at by the learned First Appellate Court, which has accepted their appeal, however, with a rider that the lien of defendant No.2 (State Bank of Patiala, Mukandpur Branch, District Shaheed Bhagat Singh Nagar) would remain a first charge on the suit property and the defendant No.2-Bank, if the situation so arises, would be able to enforce all its rights against the suit property even if its ownership changes hands.

(2.) In these circumstances, the question which arises for consideration is 'if a prior agreement to sell is proved, then whether subsequent mortgage of the property in favour of bank shall not affect the rights of the agreement holder in a case where the suit for specific performance of the agreement to sell has been decreed?"

(3.) Some peculiar facts are required to be noticed. Sh.Mohan Singh was the owner of the land measuring 13 kanals and 7 marlas. He, through his attorneys, is stated to have entered into an agreement to sell of the aforesaid property with the plaintiffs for 1/3/2009 for a total sale consideration of Rs.20,00,000.00. A sum of Rs.10,00,000.00 was paid as earnest money. The sale deed was agreed to be executed and registered on 2/5/2009 which was extended twice, upto 15/1/2010. The respondent Bank claims that Sh. Mohan Singh mortgaged the property in its favour against a term loan of Rs.20,00,000.00 and a cash credit limit to the tune of Rs.3,75,000.00 borrowed by Sh. Jaswinder Singh (his son) and executed a registered mortgage deed dtd. 17/4/2009.