REPORTABLE  

  IN THE SUPREME COURT OF INDIA

  CIVIL APPELLATE JURISDICTION

  CIVIL APPEAL NO.       760      OF 2020    (Arising out of SLP (Civil) No.10949 of 2019)

Sukhwinder Singh                 .…Appellant(s)

Versus

Jagroop Singh & Anr.           ….  Respondent(s)

J U D G M E N T

A.S. Bopanna,J.          

      Leave granted.      

2.   The appellant herein was the defendant No.2 in Case

No.915 of 16.11.2004/17.04.2015.  The respondent No.1

herein was the plaintiff in the suit.  The respondent No.2

herein was the defendant No.1 therein.   The parties will

be referred to in the rank assigned to them in the suit for

the purpose of convenience and clarity.   The plaintiff

instituted the  suit  seeking for  decree  of  possession by

way of specific performance of the Agreement of Sale

 Page 1 of 17

dated 03.01.2004 executed by defendant No.1 in favour

of the plaintiff agreeing to sell the land measuring 3

Kanals 4 Marlas comprised of Khewat No.36/35

Khatauni No.91, Rect. No.63 Killa No.2/2 (3­4), situated

in village Dulla Singh Wala, Tehsil and District Ferozpur.

3. The case of the plaintiff was that the property was

agreed to be sold for the total consideration of

Rs.1,40,000/­.  Towards the said amount the  plaintiff

had paid the sum of Rs.69,500/­ as earnest money.  The

plaintiff had further prayed in the suit to set aside the

Sale Deed dated 11.06.2004 executed by the defendant

No.1 in favour of the defendant No.2 since according to

the plaintiff the same was null and void and did not bind

the plaintiff.   In the alternative, the plaintiff had sought

for a decree to recover a sum of Rs.1,40,000/­ of which

Rs.69,500/­ had been paid as earnest money while the

remaining sum of Rs.70,500/­ was sought as damages.

The defendants at the first instance had failed to appear

and contest the suit.   Accordingly, the Trial Court by its

judgment dated 14.06.2007 had decreed the suit.    

 Page 2 of 17

4. Though the defendant No.1 did not make out any

grievance thereafter, the defendant No.2 who was the

purchaser of the property filed a petition under Order 9

Rule 13 of the Civil Procedure Code in Misc. Application

No.46 of 23.02.2011 seeking that the ex parte decree be

set aside and the suit be restored for consideration.

Since the said petition was filed with delay, an

application  under  Section  5 of the  Limitation  Act  was

filed seeking condonation of delay.   The Trial Court

having considered the same through its decision dated

07.08.2012 dismissed the application seeking

condonation of delay, consequently the petition under

Order 9 Rule 13 of Civil Procedure Code was also

dismissed as barred by Limitation.   The defendant No.2

claiming to be aggrieved preferred Civil Revision

No.5332/2012  (O&M) before the  High Court  of  Punjab

and Haryana at Chandigarh.   In the said Revision

Petition filed under Section 115 of Civil Procedure Code

read with Article  227 of the  Constitution of India, the

High Court had concurred with the decision of the Trial

Court and  dismissed the  Revision  Petition through its   

Page 3 of 17

decision  dated  12.09.2012.    The  defendant  No.2  had

carried the same before this Court in Civil Appeal

No.1406/2015.   This Court on taking into consideration

that the defendant  No.2 who was the  appellant in the

said Civil Appeal is to be provided an opportunity to

contest the suit, had allowed the appeal by order dated

02.02.2015 subject to payment of Rs.1,50,000/­ as cost.

Leave to file the written statement in the suit was also

granted.   Pursuant thereto the  defendant  No.2  having

paid the cost, filed the written statement and the suit was

proceeded in accordance with law. Pursuant thereto the

impugned judgments are passed which are assailed

herein.

5.  Mr. Rahul Gupta, the learned counsel for the

appellant contends that the defendant No.2 is the

bonafide purchaser without notice of the alleged

agreement between the plaintiff and defendant No.1.  He

contends that the entire transaction was entered into in a

bonafide manner and the Sale Deed having been

registered, the defendant No.2 was put in possession of

 Page 4 of 17

the suit schedule property as far back as on 11.06.2004.

Nearly 16 years have passed by and the defendant No.2

has carried out considerable improvement to the property

and is residing in the house constructed therein.  In that

view, at this juncture if the specific performance as

sought by the plaintiff is ordered, greater hardship will be

caused to the defendant No.2.  It is pointed out that the

plaintiff had made the alternate prayer for refund of the

earnest money and damages which if considered would

serve the ends of justice.   The learned counsel contends

that even to secure leave to file the written statement and

defend the suit the defendant No.2 has already parted

with the  sum of  Rs.1,50,000/­ in  addition to the  sale

consideration that was paid to defendant No.1.   In that

circumstance, the compensation if any, is a matter to be

considered by this Court as the grant of specific

performance is not a rule and this Court has the

discretion to decline specific performance in view of the

provisions contained under Section 20 of the Specific

Relief Act.   It is also his contention that though the

defendant No.1 has not contested the suit, there was an   

Page 5 of 17

obligation on the plaintiff to establish his case which has

not been effectively done by proving the readiness and

willingness.   The learned counsel would contend that

though all the three Courts have held against the

defendants, the  non­consideration of the relevant facts

would amount to a concurrent error committed by  the

Courts.  It is, therefore, contended that the judgment and

decree be set aside and the right accrued to the

defendant No.2 under the Sale Deed dated 11.06.2004 be

protected.

6.   Shri Mahendra Kumar, learned counsel for the

plaintiff/respondent No.1 would seek to sustain the

judgment passed by the Courts below.   It  is contended

that all the three Courts have concurrently held against

the defendants and the reversal of the same is not

warranted.   It is his case that the plaintiff had entered

into an agreement of sale and had also paid the part sale

consideration of Rs.69,500/­.   The suit at the first

instance was decreed on 14.06.2007 and the plaintiff had

pursuant to the decree deposited the balance sale

 Page 6 of 17

consideration of Rs.70,500/­ on 03.08.2007.  The learned

counsel contends that though the date for execution of

the  Sale  Deed  was  stipulated  as  15.06.2004, the  Sale

Deed was executed by the defendant No.1  in  favour of

defendant No.2 on 11.06.2004 so as to defeat the right of

the plaintiff.   It is contended that the defendant had

connived with each other in that regard and, therefore,

the same cannot be considered as a bonafide transaction.

The learned counsel further contends that though an

alternate prayer was made in the suit for the payment of

damages as indicated therein, the property in question is

highly valuable and as such the plaintiff should have the

benefit of the appreciation as well.   It is, therefore,

contended that the appeal is liable to be dismissed.

7. In the above background, it is seen that the

contention of the plaintiff in the suit was that the

defendant No.1 had agreed to sell the suit schedule

property  through the Agreement dated 03.01.2004 and

the plaintiff had paid a sum of Rs.50,000/­ on the said

date and a further sum of Rs.19,500/­ on 29.02.2004.

 Page 7 of 17

Thus, in all a sum of Rs.69,500/­ was paid as earnest

money. The date for execution of the Sale Deed was

stipulated as 15.06.2004 on which date the balance sale

consideration of Rs.70,500/­ was to be paid.  The plaintiff

contended that he was ready and willing to complete the

transaction and as such on 15.06.2004 i.e. the stipulated

date, the plaintiff appeared in the office of Sub­Registrar

with the balance sale consideration and other expenses.

According to the plaintiff the defendant did not turn up

but the plaintiff got his presence marked by moving an

application.  It is only subsequently the plaintiff came to

know that the defendant No.1 had executed a Sale Deed

dated 11.06.2004 in favour of the defendant No.2 in

respect of the very suit property.   It is in that light the

plaintiff had sought further relief as noted above.   

8.  The defendant No.2 who had availed the

opportunity granted by this Court and filed written

statement on payment of cost had denied the execution of

the agreement to sell and the receipt of earnest money.

The defendant No.2 relying on the Sale Deed dated

 Page 8 of 17

11.06.2004 contended that having purchased the

property he is in possession and enjoyment of the same.

The defendant No.2, therefore, sought for dismissal of the

suit.  The Trial Court framed as many as seven issues for

its consideration based on the pleadings.   The plaintiff

examined himself as PW1 and also examined the

witnesses as PW2 to PW4.  The documents at Exhibits P1

to P9 were marked.   The defendant No.2 examined

himself as DW1 and examined two witnesses as DW2 and

DW3.  The Trial Court with reference to the said evidence

has decreed the suit.  The Lower Appellate Court has re­

appreciated the material  on record and concurred with

the Trial Court.   The High Court though was examining

the Second Appeal where limited scope for reappreciation

of the evidence is available, it is noticed that the High

Court has not even adverted to the basic requirements to

arrive at its conclusion.   Be that as it may, considering

that the  suit in  question was  filed  seeking for  specific

performance, the consideration to that effect as made by

the Trial Court and endorsed by the Lower Appellate

 Page 9 of 17

Court as  also the  High  Court  will  have to  be  noticed

cumulatively.    

9. The suit being the one for specific performance of

the contract on payment of the balance sale

consideration, the readiness and willingness was required

to be proved by the plaintiff and was to be considered by

the Courts below as a basic requirement if a decree for

specific performance is to be granted.  In the instant case

though the defendant No.2 had denied the agreement as

also the receipt of the earnest money, the same would not

be of consequence as the agreement claimed by the

plaintiff is with the defendant No.1 and the contention of

the defendant No.2 to deny the same is without personal

knowledge on that aspect.  However, even in the absence

of the  defence  put forth, the  plaintiff  was required to

prove his readiness and willingness and that  aspect of

the matter was to be considered by the Courts below.  In

the present case though the plaintiff examined himself as

PW1, as also PW2 and PW3, the document writer, and

the witness to the agreement who stated with regard to

 Page 10 of 17

the execution of the agreement, the evidence to prove the

readiness and willingness with regard to the resources to

pay the balance sale consideration is insufficient.  In the

absence of denial by the defendant No.1, even if the

payment of Rs.69,500/­ and the claim by the plaintiff of

having gone to the office of Sub­Registrar on 15.06.2004

is accepted,   the fact as to  whether the plaintiff had

notified the defendant No.1 about he being ready with the

balance sale consideration and calling upon the plaintiff

to appear before the Sub­Registrar and execute the Sale

Deed was required to be proved.   From among the

documents  produced and marked  as  Exhibit  P1  to  P9

there is no document to that effect, more particularly to

indicate the availability of the balance sale consideration

as on 15.06.2004 and as on the date of filing the suit.

Despite the same, merely based on the oral testimony of

PW1, the Courts below have accepted the case put forth

by the plaintiff  to be ready and willing to complete the

transaction.

 Page 11 of 17

10. Instead of arriving at an appropriate conclusion on

that aspect, the Trial Court while answering the issues

No.1 and 2 has concluded that the amount of sale

consideration has already been paid and the fact that the

Civil Suit has been filed by the plaintiff are sufficient to

establish that the plaintiff remained ready and willing to

perform his part of the contract.  On the other hand, it is

noticed that what had been paid as on the date of filing

the suit  was  only the  earnest  money  and the  balance

amount was deposited only on 03.08.2007 after the suit

was decreed at the first instance on 14.06.2007 and not

as on the date of filing the suit.   Hence the concurrent

conclusion reached by all the three Courts is an apparent

error, the correction of which is necessary.  It is no doubt

true that as on the date of decision for the second time

after restoration, the amount had been deposited which

is not the same as having deposited or paid prior to or at

the time of filing the suit. Even if the amount had been

deposited as on the date of filing the suit, the readiness

and willingness with possession of the sale consideration

as on 15.06.2004 was necessary to be proved, which has   

Page 12 of 17

not been done.   Hence, in our opinion the Courts below

have not appropriately considered this aspect of the

matter.   

11. Further,  in a circumstance where the defendant

No.2 had contested the suit and had put forth the

contention that he was a bonafide purchaser without

notice and   through his evidence had deposed that  he

had no knowledge of agreement entered into between the

defendant No.1 and defendant No.2,  that aspect required

appropriate consideration.  However, the  Courts  below

have on the contrary concluded that the defendants No.1

and 2 being of the same village, the defendant No.2 would

have knowledge of the agreement entered into by the

defendant No.1 in favour of the plaintiff.   Such

conclusion is only an assumption and there is no

evidence with regard to the knowledge of defendant No.2

even if he was from the same village.   In addition, the

Lower Appellate Court has concluded that since the

defendant  No.1  has not  caused appearance  in spite  of

notice having been issued and he not being examined as

 Page 13 of 17

a witness it could be gathered that there is connivance

amongst the defendants to defeat the rights of the

plaintiff.  Such assumption is also not justified since the

defendant No.2 had purchased the property for a

consideration under a registered document and the

defendant No.2 was also put in possession of the

property.   In that circumstance the defendant No.1 who

had  lost interest in the property, if  had not  chosen to

appear and defend the suit the same cannot be a

presumption of connivance in the absence of evidence to

that effect.

12.  In the background of the above consideration, the

plaintiff in  any  event  was  not entitled to  a  decree for

specific performance and possession of the property

against the defendant  No.1.   In the circumstance the

declaration of the Sale Deed dated 11.06.2004 executed

by the defendant No.1 in favour of the defendant No.2 to

term the same as null and void as claimed by the plaintiff

also  did  not  arise.  Despite the said  position  what is

necessary to be taken note is that the sale in favour of

 Page 14 of 17

the defendant No.2 was on 11.06.2004 i.e. subsequent to

the date of the suit agreement dated 03.01.2004.  Despite

holding that the defendant No.2 is a bonafide purchaser,

what cannot be lost sight is that the defendant No.1 had

received a sum of Rs.69,500/­ from the plaintiff  as far

back as on 03.01.2004.  That apart if the transaction was

concluded  at that stage the  plaintiff  would  have  been

entitled to the benefit of the land.   Even as per the

ground at (Para x) raised by the defendant No.2 in this

appeal, it would indicate that there has been

considerable appreciation in the market price.  Though in

the normal circumstance the return of the advance

received and the compensation for denial of the property

was to be paid by the defendant No.1, as noted, the

defendant No.1 having lost interest in the property has

not appeared in the instant proceedings nor is there any

material to indicate that he has benefited from the

appreciation since even as per the contention of the

plaintiff he has sold the property for a lesser price.   In

that situation the plaintiff cannot be left ‘high and dry’. If

that be the position the defendant No.2 who has   

Page 15 of 17

benefited from the property will have to repay the

advance and compensate the plaintiff in the peculiar

facts of the instant case. In that circumstance the

defendant No.2 (the appellant herein) is  required to be

directed to  pay  a  sum of  Rs.3,50,000/­  only  which is

inclusive of the advance amount of  Rs.69,500/­ to the

plaintiff (the respondent No.1 herein) in  full  quit  of  all

claims. The said amount is also to be directed to be paid

by the defendant No.2 to the plaintiff within a period of

three months failing which the same should carry

interest at 12% per annum  till payment. The  plaintiff

should also be entitled to withdraw the amount of

Rs.70,500/­ stated to have been deposited by him before

the Trial Court.  

13. In view of the above, the following order:

i) The appeal is allowed in part. The judgment

and decree dated 24.07.2015 passed in Case No.

915 of 16.11.2004/17.04.2015 and affirmed by the

Lower Appellate Court as also the High Court to

the extent of granting the relief of specific

performance is set aside.  

 Page 16 of 17

ii) The judgment and decree dated 17.04.2015 in

Case No. 915 shall stand modified, and the

appellant ­  defendant  No.  2 is  directed to  pay  a

sum of  Rs.3,50,000/­ only to the plaintiff  within

three months.  

iii) If the amount is not paid within the time

stipulated the same shall carry interest at 12% per

annum thereafter.  

iv) The plaintiff shall be entitled to withdraw the

amount of Rs.70,500/­ lying in deposit before the

Trial Court with the interest accrued, if any.

v)     In the facts and circumstances, the parties to

bear their own costs.

Pending application, if any, shall stand disposed of.

……………………….J. (R. BANUMATHI)

……………………….J.                                               (A.S. BOPANNA)

New Delhi, January 28, 2020

 Page 17 of 17