Tek Chand
& Ors Vs. Deep Chand & Ors [2001] Insc 106 (23 February 2001)
U.C.
Banerjee & K.G. Balakrishnan K.G. Balakrishnan, J.
L.T.J
Defendants
5 to 8 in a suit for specific performance are the appellants herein. The first
respondent-plaintiff, Deep Chand filed a suit for specific performance against
the second respondent, Kare, who was the owner of the suit property measuring
26 Kanals and 2 Marlas situated in Village Prithla of Faridabad District. The
first respondent agreed to purchase the land from Kare for a consideration of Rs.
35,000/- per acre and an agreement was entered into between these two parties
on 8.12.1986. The first respondent paid an amount of Rs.8,000/- to Kare on the
date of the agreement and Kare had to execute the sale-deed by 25th May 1987, but this date was further extended
upto 15th June, 1987. However, Kare did not execute the
sale-deed as promised by him. Therefore, the first respondent was constrained
to file a suit for specific performance.
The
second respondent, Kare, who was the sole defendant in the suit, filed a
written statement contending that he was not the real owner of the property and
that it belonged to his children. He also alleged that he had mortgaged the
property in favour of one Gopal. The first respondent- plaintiff, thereupon impleaded
the children of Kare as defendants 2 to 4 in the suit and they are respondents
3 to 5 herein. The first respondent- plaintiff later came to know that the
children of Kare had effected certain alienation in favour of the appellants
herein. Therefore, the appellants were impleaded as defendants 5 to 8 in the
suit.
The
first defendant-Kare, though admitted the agreement, alleged that he never
intended to execute a sale-deed in favour of the first respondent-plaintiff,
but only a mortgage. He denied the thumb impression found on the agreement for
sale. Defendants 2 to 4, who are the children of Kare, also filed a written
statement alleging that there was a Family Settlement whereby the properties
were given to them and that after the Family Settlement, they had filed a suit
for declaration of title in respect of the suit property and a decree was
passed in their favour on 1.10.1987. They admitted having executed subsequently
four sale deeds in favour of defendants 5 to 8 in respect of a portion of the
suit property.
The
appellants, who were defendants 5 to 8 in the suit, claimed title over the
property. They alleged that on 20.10.1986 they had entered into an agreement
with Kare for the sale of the property for Rs.32,000/- per acre. Kare, however,
did not execute the sale deed, but transferred the property in favour of his
children and when the appellants insisted for enforcement of the said agreement,
the children of Kare honoured the same by executing the four sale deeds and
handed over the possession of the property. The appellants contended that the
first respondent was not entitled to the decree for specific relief. The trial
court dismissed the suit on the ground that by virtue of the decree dated
1.10.1987 passed in favour of defendants 2 to 4, they had become the owners of
the property and so long as that decree was not challenged by the first
respondent- plaintiff in any proceedings, he was not entitled to seek specific
relief of the contract entered into by him with Kare. However, the trial court
allowed the recovery of the advance amount paid by the first respondent.
Thereafter, the first respondent filed an appeal against the decree and
judgment of the trial court. The appellate court reversed the decree and held
that the agreement entered into by the first respondent with Kare was a true
and genuine document;
that
the Family Settlement as also the decree passed by the civil court in favour of
defendants 2 to 4 were collusive transactions; and that defendants 2 to 4 had
no right to alienate the property. It was further held that such alienation in favour
of defendants 5 to 8 had been made after the filing of the suit by the first
respondent-plaintiff and they are hit by the doctrine of lis pendens. Aggrieved
by the judgment of the appellate court, the present appellants filed a Second
Appeal, which was dismissed by the High Court of Punjab & Haryana at Chandigarh. It is against that judgment of the
High Court, the present appeal is filed.
We
heard learned counsel for the appellants, Mrs. Madhu Tewatia and learned senior
counsel for the first respondent, Shri M.L. Verma. Counsel for the appellants
contended that the agreement entered into by the first respondent-Plaintiff
with Kare was on 8.12.1986 and this was subsequent to the agreement entered
into by the appellants with Kare, which was on 20.10.1986. Therefore, it was
contended by the counsel for the appellants that Kare had executed the
subsequent agreement with the first respondent-plaintiff with a view to defeat
the interest of the appellants. It was urged that Kare had executed the Family
Settlement Deed in favour of his children to see that the appellants did not
get the benefit of the agreement entered into by them with Kare. The counsel
for the appellants contended that when defendants 2 to 4 executed the sale-
deeds in favour of the appellants, they acquired a valid title over the
property on the basis of the decree passed by the civil court on 1.10.1987 and,
therefore, all the alienations are valid and the appellants are bonafide
purchasers for value.
Learned
counsel for the first respondent, on the other hand, contended that the
agreement entered into by the first respondent with Kare was a true and genuine
document and Kare had executed the Family Settlement to defeat the interests of
the first respondent. It was further submitted that the decree obtained by
defendants 2 to 4 against Kare was a collusive decree. The first respondent
disputed the genuineness of the agreement entered into between Kare and the
present appellants.
It has
been found by all the courts that the agreement entered into by the first
respondent with Kare was a true and genuine document and the first respondent
had paid Rs.8,000/- as advance. It was also proved that Kare had committed a
breach of the contract and failed to execute the sale-deed in favour of the
first respondent.
It is
pertinent to note that Kare executed a Family Settlement in favour of his
children, defendants 2 to 4 and immediately thereafter, defendants 2 to 4 filed
a suit for declaration of the title over the property. Kare, who was a
defendant in the suit, did not contest the suit and the decree was passed in favour
of defendants 2 to 4. It is clearly a collusive decree obtained by defendants 2
to 4.
In
respect of the suit property, four sale-deeds were executed by defendants 2 to
4. 7 Kanals and 4 Marlas of property was sold in favour of appellants 1 to 3 by
defendants 2 and 3 and an extent of 15 Kanals and 6 Marlas was transferred to
appellants 1 to 3 by defendants 2 to 4.
Both
these documents were executed on the same day, i.e.4.9.1989. The total
consideration for the sale deed executed in favour of appellants 1 to 3 was
Rs.76,500/-, but an amount of Rs.60,000/- was retained by the vendees as
mortgage amount payable to the mortgagee. Two other documents were also
executed by defendants 2 to 4. One document is in favour of the fourth
appellant, Jawahar Singh, in respect of 3 Kanals and 12 Marlas of land for a
sum of Rs.18,000/-. The total purchase amount in respect of all these sale
deeds comes to Rs.1,32,300/-. Out of this, an amount of Rs.60,000/- was
retained as mortgage money and the balance amount of Rs.72,311/- was paid to
defendants 2 to 4. The execution of the Family Settlement Deed and subsequent
suit for declaration of title followed by execution of the sale-deeds on the
basis of the decree obtained by them are clearly collusive transactions
intended to defeat the interest of the first respondent.
The
counsel for the appellants contended that the appellants had entered into an
agreement with Kare as early as on 20.10.1986 for purchase of suit property for
a consideration of Rs.32,000/- per acre, but Kare, in turn, defeated their
interest and transferred the property to his children. It is important to note
that the appellants had not taken any steps to enforce the agreement entered
into by them with Kare and they did not adduce any evidence to prove that they
had taken any steps to enforce the alleged agreement. The two courts have
rightly held that the family Settlement, the decree passed by the civil court
and the various sale deeds executed by defendants 2 to 4 in favour of the
appellants are collusive transactions brought about to defeat the interest of
the first respondent. The respondents 2 to 4 had no previous agreement with the
appellants for sale of this property, even then they readily executed the sale
deeds in their favour.
In
view of these factual circumstances, we do not find any merit in this appeal.
The counsel for the appellants lastly contended that the appellants are in
possession of the suit property and they had discharged the mortgage executed
by Kare in favour of one Mohan Lal. It was prayed that the amount of
Rs.60,000/- paid by the appellants to the mortgagee may be directed to be paid
by the first respondent.
In the
result, we direct the first respondent-plaintiff to deposit the balance
consideration of Rs. 1,06,170/- before the executing Court and the appellants
herein are directed to execute a sale-deed in favour of the first
respondent-plaintiff, Deep Chand, within a period of two weeks thereafter. On
their failure to execute the sale-deed, the first respondent- plaintiff would
be at liberty to get the sale deed executed through court. The sale consideration
to be deposited by the plaintiff shall be disbursed to these appellants as
directed in the judgment and decree of the first Appellate Court. If these
appellants produce a registered release-deed in respect of the mortgage in favour
of Mohan Lal, entire sale consideration be disbursed to the appellants. If the
appellants fail to produce a release deed within a period of 2 weeks of the
date of the deposit of the amount by plaintiff, Deep chand, he would be allowed
to get refund of Rs. 60,000/- and would be at liberty to redeem the mortgage.
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