Regular Second Appeal No. 570 of 2004 1
In the High Court of Punjab and Haryana, at Chandigarh.
Regular Second Appeal No. 570 of 2004
Date of Decision: 19.12.2008
Tarsem Lal and Another
...Appellants
Versus
Devi Dial
...Respondent
CORAM: HON'BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA.
Present: Mr. Ashok Singla, Advocate
for the appellants.
Mr. Arun Palli, Senior Advocate
with Mr. Parminder Singh, Advocate
for the respondent.
Kanwaljit Singh Ahluwalia, J.
Tarsem Lal son of Rattan Lal and Ashok Kumar son of Shiv
Lal, both residents of Jaiton Mandi, District Faridkot, had instituted a
suit for recovery of Rs.2,70,000/- on the ground that Devi Dial,
respondent/defendant, on 19.8.1995 entered into an agreement to sell
of vacant plot measuring 33′ X 165′, details of which were given in the
head note of the plaint situated in Jaiton Mandi, for a sum of
Rs.8,92,000/-. It was further pleaded that Rs.2,00,000/- was paid as
earnest money by appellants/plaintiffs to the respondent/defendant. It
was further agreed that Rs.4,92,000/- will be paid to the
respondent/defendant on or before 18.11.1995 and the balance was to
be paid at the time of execution of sale deed for which the date fixed
was on or before 31.3.1996. It was further stated that at the time of
Regular Second Appeal No. 570 of 2004 2
agreement to sell, an assurance was given by respondent/defendant
that he was exclusive owner in possession of the plot and the same is
free from all encumbrances. It has been further stated in the plaint that
in November 1995, when payment of Rs.4,92,000/- was due, the
appellant/plaintiffs requested the respondent/defendant to show the
document of title regarding the plot in dispute upon which time was
sought by the respondent/defendant and as such amount was not paid
and received. According to appellants/plaintiffs, the
respondent/defendant was neither exclusive owner nor in possession of
the plot in dispute. It was further stated that respondent/defendant was
co-sharer to the extent of 1/10th share of the land measuring 13 kanals
19 marlas and his share was only to the extent of 2 kanals. Out of two
kanals, he had already sold 17 marlas of land to Gurdit Singh and
Lachhman Singh and 13.1/3rd marlas to Nazar Singh vide sale deeds
dated 28.7.1993 and 29.4.1993, respectively. In this way he sold the
land measuring 30.1/3rd marlas. Therefore, the respondent/defendant
was not owner of 1 kanal of land. The appellants/plaintiffs further
claimed that the respondent/defendant was co-sharer and his khatta
being joint was not partitioned. It was further stated that on 27.3.1996,
the date of execution of agreement to sell was extended upto 8.4.1996
and till then the respondent/defendant had not satisfied the
appellants/plaintiffs regarding his title over the suit property. Notice was
served upon the appellants/plaintiffs through Mr. B.D .Kumar,
Advocate, on 27.1.1997 and another notice was also served upon them
on 19.4.1997, which were replied by the appellants/plaintiffs on
2.5.1997. In response to the reply filed by the appellants/plaintiffs, the
Regular Second Appeal No. 570 of 2004 3
respondent/defendant also filed reply on 21.5.1997 in which he stated
that he had purchased the property and mutation had been sanctioned
regarding the plot in dispute. It was further stated therein that copy of the
sale deed and mutation had already been shown to the
appellants/plaintiffs but this fact had been denied in the plaint by the
appellants/plaintiffs. The respondent/defendant in his response had
already sent a copy of Jamabandi in which a reference of one mutation
No. 9591 on the basis of sale deed executed by Rajinder Parshad in
favour of respondent/defendant was made. The appellants/plaintiffs
submitted in the plaint that they came to know later that mutation was
rejected on 30.3.1997 as a few co-sharers were partners of M/s
Dashmesh Paper Mills, Jaiton and title deed of the property was
deposited by them with the State Bank of Patiala by way of collateral
security due to loan has been raised by M/s Dashmesh Paper Mills,
Jaiton was sanctioned and the original title deed was with the bank. It
was further stated that the land has not been partitioned. The
respondent/defendant had already sold the best part of the land out of
the joint holding and there was litigation between Rajinder Parshad and
Kulwant Rai and, therefore, due to litigation, principle of lis pendence is
to operate and, therefore, terms of the agreement to sell have been
violated by the respondent/defendant. Therefore, the appellants/plaintiffs
were entitled to a refund of Rs.2,00,000/- along with interest at the rate
of 18% per annum.
Notice of the suit was issued.
The respondent/defendant caused appearance; filed written
statement taking a preliminary objection that suit for specific
Regular Second Appeal No. 570 of 2004 4
performance of the agreement to sell dated 19.8.1995 ought to have
been filed. A further preliminary objection was taken that
respondent/defendant was always ready and willing to perform his part
of the contract and for that he appeared before the Sub Registrar,
Jaiton, on 8.4.1996, date fixed for execution of sale deed. It was further
submitted in the written statement that the respondent/defendant is the
owner in possession of the plot in dispute at the relevant time and the
fact that there was no encumbrance of any kind on the plot in question
was specifically taken. It was further stated that the
respondent/defendant had a transferable title as per terms & conditions
of the agreement dated 19.8.1995. It was further stated therein that the
date of execution of agreement to sell was extended from 27.3.1996
upto 8.4.1996. It was further stated that the date of execution of
agreement to sell was extended because the respondent/defendant had
purchased the suit property from Rajinder Parshad vide registered sale
deed dated 22.3.1996. Therefore, he being the exclusive owner in
possession of the plot could execute the sale deed. In the written
statement, it was specifically stated that the mutation was sanctioned in
favour of the respondent/defendant and the sale deed was executed on
22.3.1996. It was further submitted that no litigation of any kind was
pending against him. Therefore, it was pleaded that there was breach on
the part of the appellants/plaintiffs and they are not entitled to
reimbursement of any kind.
Replication to the written statement was filed by the
appellants/plaintiffs in which submissions made in the plaint were
reiterated. After the completion of pleadings, learned trial Court framed
Regular Second Appeal No. 570 of 2004 5
the following issues:-
1. Whether the plaintiffs are entitled to recovery of
Rs.2,70,000/-, as alleged from the defendant? OPP
2. Whether the suit in the present form is not maintainable, as
alleged? OPD.
3. Whether the defendant remained ready and willing and is
still ready and willing to perform his part of the contract, if
so, its effect? OPD
4. Whether the defendant is owner of the disputed property,
as alleged? OPD
5. Relief.
Trial Court decreed the suit of the appellants/plaintiffs. Trial
Court held that since execution of agreement to sell and payment of
Rs.2,00,000/- is admitted by the parties and on the date of execution of
the agreement to sell Ex.P1, the respondent/defendant was not owner in
possession of the suit property, therefore, he could not execute
agreement to sell and since the land was not joint, there was no
partition and at the time of execution of agreement to sell, he was not
holding any share to the extent of 1 kanal in his khata. Therefore, the
appellants/plaintiffs are entitled to a refund of amount which has been
misrepresentation on the part of the respondent/defendant. Trial Court
further held that the fact that before the date of execution of the sale
deed Ex.DW2/A, respondent/defendant became owner of the plot is of
no consequence.
Aggrieved against the same, respondent/defendant preferred
an appeal and in the same, findings returned by learned trial Court were
Regular Second Appeal No. 570 of 2004 6
reversed by learned District Judge, Faridkot.
Learned lower Appellate Court held that agreement Ex.P1
executed on 19.8.1995, tally and marry with the boundaries of the plot
as given in the sale deed Ex.DW2/A. It was further held that on
22.3.1996, respondent/defendant became owner in possession of the
property, therefore, before the period fixed for execution of the sale
deed, the plot was free from any encumbrance and the
respondent/defendant had a transferable title in question.
Learned lower Appellate Court further relied upon Ex.D2, reply
given by the respondent/defendant through his counsel to the notice of
the appellants/plaintiffs dated 2.5.1997, in which it was stated that he is
ready and willing to execute the sale deed and, therefore, the
appellants/plaintiffs should execute the sale deed within 15 days.
Having held so, learned lower Appellate Court concluded that the
plaintiffs were at fault for not getting the sale deed executed from the
defendant as per terms of agreement and, therefore, suit is not
maintainable and the plaintiffs should have filed the suit for specific
performance of the agreement or in the alternative for the recovery of
amount paid under the agreement for the fault in the title of the
defendant regarding the plot in dispute as mentioned in the agreements
Ex.P1 and Ex.P2.
Findings of learned lower Appellate Court are being
challenged by Mr. Ashok Singla, Advocate, appearing for the
appellants/plaintiffs before me.
It has been canvassed by Mr. Singla that from the day when
the agreement to sell Ex.P1 was executed on 19.8.1995,
Regular Second Appeal No. 570 of 2004 7
respondent/defendant had no title over the property as he had already
sold the property to the extent of his share. Therefore, this material
aspect has been ignored by learned lower Appellate Court. He further
submitted that since the account (khata) of the land was joint and there
was no partition, therefore, respondent/defendant could not sell
identifiable plot in favour of the appellants/plaintiffs. Therefore, the
appellants/plaintiffs have rightly not pursued the agreement to sell and
their only remedy was to seek refund of the amount by filing of the
recovery suit.
It was further stated that since the title deed has been
deposited with the State Bank of Patiala and there was litigation pending
with the bank, therefore, there was no clear title of the
respondent/defendant.
I am not impressed by the contentions raised by learned
counsel for the appellants/plaintiffs as during the course of his
arguments for sake of convenience, important and vital dates, details
and their effect was skipped.
It is not disputed that an agreement to sell was executed on
19.8.1995, according to which last date for execution of agreement to
sell was 31.3.1996.
From perusal of evidence and pleadings, it is evident that the
respondent/defendant was not taking identifiable and valid title,
therefore, notices were being issued by the appellants/plaintiffs. What is
being missed and, therefore, it is noticed here that during the
subsistence of agreement to sell, on 22.3.1996 vide sale deed
Ex.DW2/A, the respondent/defendant in order to give effect to
Regular Second Appeal No. 570 of 2004 8
agreement to sell dated 19.8.1995, which was valid till 31.3.1996
acquired plot vide sale deed dated 22.3.1996 in his favour.
It is also not disputed that thereafter five days later vide a
writing dated 27.3.1996 Ex.P2 the date of execution of agreement to sell
was extended. It has been rightly stated by learned counsel for the
respondent that it was not mere extension of time vide Ex.P2, the terms
& conditions were also varied. As per Ex.P2, sale deed was to be
executed on or before 8.4.1996. When Ex.P2 was executed on
27.3.1996, it was expected, that the appellants/plaintiffs who were
making a grievance that the respondent/defendant had no title at the
time of extension of time on 27.3.1996, ought to have verified, asked
and satisfied themselves that the respondent/defendant has acquired
the title, therefore, sale deed in favour of the respondent/defendant vide
Ex.DW2/A on 22.3.1996 assume importance. Document Ex.P2 vide
which not only date was extended but terms were also varied was a
fresh composite agreement to sell. Therefore, it is natural, probable and
convincing that Ex.P2 was executed after the appellants/plaintiffs had
held a thorough enquiry and had satisfied themselves. Therefore, it has
been rightly held by learned lower Appellate Court that the remedy for
the appellants/plaintiffs was to institute a suit for specific performance.
In view of the subsequent writing Ex.P2 dated 27.3.1996 all
other arguments that the same was subject matter of litigation with the
bank will pale into insignificance. Reply to notice dated 2.5.1997 Ex.D2,
in which it was stated that the respondent/defendant is ready and willing
to perform his part of agreement. Dasti notice sent by
respondent/defendant was also accompanied by copy of sanctioned
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mutation.
Learned lower Appellate Court had rightly held that the
boundaries of the plot has been given in the sale deed Ex.DW2/A tally
and marry with the boundaries specified in agreement to sell Ex.P1. As
noticed by learned lower Appellate Court, PW.2 Tarsem Lal has
admitted that he had seen the plot purchased by the
respondent/defendant and the same was having foundations of the
boundary wall. Therefore, the argument that that khata was not
partitioned is also not available to the appellants/plaintiffs. I find no
infirmity in the findings returned by learned lower Appellate Court.
Therefore, an attempt of learned counsel for the appellants/plaintiffs to
formulate question of law at the time of execution of agreement to sell
Ex.P1, there was misrepresentation on the part of respondent/defendant
and, therefore, appellants/plaintiffs are unable to seek refund of earnest
money as discussed above is not made out as subsequent writing
dated 27.3.1996 Ex.P2 cannot be ignored taking into consideration sale
deed Ex.DW2/A dated 22.3.1996 in favour of respondent/defendant.
Therefore, on application of facts and circumstances of the
case, no substantial question of law can be formulated which require
consideration of this Court.
Therefore, I find no merit in the present appeal and the same
is dismissed upholding the findings returned by learned lower Appellate
Court.
(Kanwaljit Singh Ahluwalia)
Judge
December 19, 2008
“DK”