BAPU APAJI POTDAR Vs. KASHINATH SADOBA GULMIRE

JUDGEMENT

(1.) The question for our determination is whether when the plaintiff being the owner of certain immoveable property seeks to recover possession of that property, it is a valid defence to the suit that the plaintiff has agreed to sell the property to the defendant the agreement being at the date of suit still capable of specific enforcement but there being no registered conveyance passing the property to the defendant. It is to be taken for the purposes of the case that possession has been taken by the defendant under the agreement for sale and that he is willing to perform his part of it with the plaintiff.

(2.) We must start with the propositions enunciated in Section 54 of the Transfer of Property Act that sale is a transfer of ownership in exchange for a price paid or promised or part paid or part promised, that such transfer in the case of immoveable property of the value of upwards of Rs. 100 can only be made by a registered instrument and that a contract for sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties; it does not, of itself, create any interest in or charge on such property.

(3.) Section 54 does not however exhaust the relations which flow from a contract for sale of immoveable property according to Indian statute law. This section cannot be read by itself and one finds in the same Act important provisions in Sections 40 and 55 the latter of which sections imposes many obligations on the vendor and gives corresponding rights to the purchaser with reference to the property contracted to be sold. In the last of the Sub-sections it is clearly recognized that relief by way of specific performance may in certain events be open to the purchaser. Then turning to the Specific Relief Act, Section 27(b) provides that specific performance may be enforced against either a party to a contract or any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract and by Section 12 of the same Act it is laid down that unless and until the contrary is proved, the Court shall presume that a breach of the contract to transfer immoveable property cannot be adequately relieved by compensation in money. Section 91 of the Indian Trusts Act in the Chapter describing certain obligations in the nature of trusts provides that where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which specific performance can be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract and Section 95 provides that a person holding property in accordance with that section must, so far as may be, perform the same duties and is subject, so far as may be, to the same liabilities and disabilities, as if he were a trustee of the property for the person for whose benefit he holds it. According to the Specific Relief Act, Section 3, obligation includes every duty enforceable by law and trust includes every species of constructive fiduciary ownership and trustee includes every person holding constructively a fiduciary character. Illustration (g) to that section enunciates in the following manner the same rule as Section 91 of the Indian Trusts Act: "A buys certain land with notice that B has already contracted to buy it. A is a trustee, within the meaning of this Act, for B, of the land so bought". In Section 40 of the Transfer of Property Act it is laid down that where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an. interest therein, such obligation can be enforced against a transferee with notice thereof. The illustration is substantially the same as illustration (g) to Section 3 of the Specific Relief Act above quoted.