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Specific performance – sale agreement obtained from two brothers only not valid – The said agreement is not enforceable in law in view of Section 17 of the Specific Relief Act in view of right accrued in favour of defendant Nos. 3 to 6 under Section 8 of the Hindu Succession Act. The provisions of Section 17 of the Specific Relief Act in categorical term expressly state that a Contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor who does not have absolute title and right upon the party. Though, the defendants on merits have succeeded in this case for the reasons recorded by us on the substantial questions of law that have been framed by us on appreciation of facts and legal evidence on record, having regard to the peculiar facts and circumstances of the case particularly, the execution of Agreement of Sale, Ex. A-1 by defendant Nos. 1 and 2 on 3.5.1993, after receiving part consideration of Rs.15,000/-, and the submission made by the learned counsel for the defendants, it would be just and proper for this Court to award a sum of Rs.6,00,000/- by lump-sum amount of compensation to the plaintiffs within 3 months from the date of receipt of a copy of this judgment as provided under Section 22 of the Specific Relief Act.= CIVIL APPEAL NO. 7835 OF 2014 (Arising out of SLP(C) NO. 24653 OF 2012) PEMMADA PRABHAKAR & ORS. …APPELLANTS Vs. YOUNGMEN’S VYSYA ASSOCIATION & ORS. …RESPONDENTS = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41856

   Specific performance – sale agreement obtained from two brothers only not valid – The  said agreement is not enforceable in law in view of Section 17  of  the  Specific Relief Act in view of right accrued in favour  of  defendant  Nos.  3  to  6 under Section 8 of the Hindu Succession Act. The provisions  of  Section  17 of the Specific Relief Act  in  categorical  term  expressly  state  that  a Contract to sell or  let  any  immovable  property  cannot  be  specifically

enforced in favour of a vendor or lessor who does not  have  absolute  title and right upon the party. Though,  the  defendants  on merits have succeeded in this case for the reasons recorded  by  us  on  the substantial questions of law that have been framed by us on appreciation  of

facts and legal evidence on record, having regard to the peculiar facts  and circumstances of the case particularly, the execution of Agreement of  Sale, Ex. A-1 by defendant  Nos.  1  and  2  on  3.5.1993,  after  receiving  part consideration of  Rs.15,000/-,  and  the  submission  made  by  the  learned counsel for the defendants, it would be just and proper for  this  Court  to award a sum of Rs.6,00,000/- by  lump-sum  amount  of  compensation  to  the plaintiffs within 3 months from the date  of  receipt  of  a  copy  of  this judgment as provided under Section 22 of the Specific Relief Act.=

 the  suit  schedule  property  is  self

acquired property by  late           Pemmada  Venkateswara  Rao  as  he  had

purchased the      said property vide Sale-Deed  Document  No.5174  of  1970

dated 24.11.1970 from his vendors. 

It is also an undisputed  fact  that  the

said property is intestate property. He is survived by his wife, 3 sons  and

3 daughters. 

The said property devolved upon them in view of  Section  8  of

Chapter 2 of the Hindu Succession Act as the defendants are  class  I  legal

heirs in the suit schedule property. 

Undisputedly, the  Agreement  of  Sale-

Ex.-A1 is executed only by defendant Nos. 1 and 2. 

The 3rd  son, mother  and

3  sisters  who have got equal shares in the property have not executed  the

Agreement of Sale. 

In view of the matter, the Agreement of Sale executed  by

defendant Nos. 1 and 2 who have no absolute right to  property  in  question

cannot confer any right whatsoever upon the plaintiffs for grant  of  decree

of specific performance of Agreement of  Sale  in  their  favour.  

 Whether the plaintiffs are entitled  for  the  decree  for  specific

performance  of the Agreement of Sale  (Ex.-A1)          

when  Agreement  of

Sale entered between the plaintiffs and defendant  Nos.  1  and  2

who do not have absolute title to the property?

Whether in the absence of execution of the Agreement of Sale-Ex.-A1  by  the

other defendants/co-sharers is it valid, even  assuming  that  Agreement  of

Sale is valid, there is breach of terms and conditions of  the  Contract  on

the part of the plaintiffs in not paying the sale  consideration  amount  of

Rs. 1,70,000/- within  10  days  from  the  day  of  vacating  the  tenants,

Rs.50,000/- on 30.11.1993 and  an  amount  of  Rs.1,50,000/-  on  or  before

30.3.1994 to the defendants  and  plaintiffs  are  entitled  for  decree  of

specific performance of the Agreement of Sale?

Whether the plaintiffs are entitled for  discretionary  relief  of  specific

performance under Section 20(2) of the Specific Relief Act when it  has  not

approached the court with clean hands?

What relief?

  Answer to Point No. 1

29.   It is an undisputed fact that  the  suit  schedule  property  is  self

acquired property by  late           Pemmada  Venkateswara  Rao  as  he  had

purchased the      said property vide Sale-Deed  Document  No.5174  of  1970

dated 24.11.1970 from his vendors. 

It is also an undisputed  fact  that  the

said property is intestate property. He is survived by his wife, 3 sons  and

3 daughters. 

The said property devolved upon them in view of  Section  8  of

Chapter 2 of the Hindu Succession Act as the defendants are  class  I  legal

heirs in the suit schedule property. 

Undisputedly, the  Agreement  of  Sale-

Ex.-A1 is executed only by defendant Nos. 1 and 2. 

The 3rd  son, mother  and

3  sisters  who have got equal shares in the property have not executed  the

Agreement of Sale. 

In view of the matter, the Agreement of Sale executed  by

defendant Nos. 1 and 2 who have no absolute right to  property  in  question

cannot confer any right whatsoever upon the plaintiffs for grant  of  decree

of specific performance of Agreement of  Sale  in  their  favour.  

The  said

agreement is not enforceable in law in view of Section 17  of  the  Specific

Relief Act in view of right accrued in favour  of  defendant  Nos.  3  to  6

under Section 8 of the Hindu Succession Act. The provisions  of  Section  17

of the Specific Relief Act  in  categorical  term  expressly  state  that  a

Contract to sell or  let  any  immovable  property  cannot  be  specifically

enforced in favour of a vendor or lessor who does not  have  absolute  title

and right upon the party

It is worthwhile to  extract  Section  17  of  the

Specific Relief Act,1963 here :-

“17.-Contract to sell  or  let  property  by  one  who  has  no  title,  not

specifically enforceable.- A contract to sell or let any immovable  property

cannot be specifically enforced in favour of a vendor or lessor;

(a) who, knowing not to have any title to the property,  has  contracted  to

sell or let the property

(b) who, though he entered into the contract believing that he  had  a  good

title to the property, cannot at the time fixed by the  parties  or  by  the

court for the completion  of the sale or  letting,  give  the  purchaser  or

lessee a title free from reasonable doubt.”

In view of  the  aforesaid  provisions  of  the  Specific  Relief  Act,  the

Agreement of Sale entered between the plaintiffs and some of the  co-sharers

who do not have the absolute title to the  suit  schedule  property  is  not

enforceable in law.  This  aspect  of  the  matter  has  not  been  properly

appreciated and considered by both the First Appellate Court and the  Second

Appellate Court. Therefore, the impugned judgment is vitiated in law.

30.   Even assuming for the sake of argument that the  agreement  is  valid,

the names of three sons are mentioned in Agreement of Sale, out of whom  the

agreement is executed by defendant Nos. 1 and 2 and they assured  that  they

would get the signatures of the 3rd brother namely, Srinivasa Rao  and  also

the remaining 3  sisters.  At  the  time  of  execution  of  this  agreement

signatures were not obtained. Therefore, the agreement is  not  executed  by

all the co-sharers of the property which fact is evident from  the  recitals

of the document itself. Hence, the plaintiffs are not entitled for  specific

performance decree. 

This vital factual and legal aspect has been ignored  by

both the First Appellate Court and the Second  Appellate  Court.  

Therefore,

the impugned judgment is vitiated both on facts and  law.  Accordingly,  the

point No. 1 is answered in favour of the defendants.

Answer to Point No. 2

31.   The  second  point  is  also  required  to  be  answered  against  the

plaintiffs for the following reasons:-

As could be seen from the Agreement of Sale document marked  as  Ex.-A1  and

the pleadings of the parties payment of sale consideration was agreed to  be

paid to the defendant Nos. 1 and 2 as per following  terms of the  agreement

:-

“… 

(i) an amount of Rs.1,70,000/- shall be paid by Vendee to Vendors  within

10 days from the day of vacating the tenants  in  the  property,   

(ii)  Rs.

50,000/-  shall  be  paid  on  30.11.1993.,  

 (iii)   the   remaining   sale

consideration of Rs.1,50,000/- shall be paid on or before 30.3.1994.”

32.   It is an  undisputed  fact  that  except  payment  of  Rs.5,000/-  and

Rs.10,000/- paid by the purchaser-plaintiff No.1 to  the  defendant  Nos.  1

and 2 according to the Agreement of Sale, the remaining installment i.e.  an

amount of Rs.1,70,000/- which was to be paid to the Vendors within  10  days

from the day of vacating the tenants in the  property  was  not  paid. 

 Even

assuming that the amount could have been paid had the  tenants  vacated  the

schedule property then the remaining part of the sale  consideration  agreed

to be paid as notified  under  clauses  (ii)  and  (iii)  as  per  aforesaid

paragraph of the Agreement of Sale undisputedly not paid  to  the  defendant

Nos. 1 and 2. 

Therefore, there is breach of contract  on  the  part  of  the

plaintiffs as could be  seen  from  the  agreement  of  sale  regarding  the

payment  of  part  sale  consideration  amount. 

 For  this   reason   itself

plaintiffs are not entitled for a decree of specific performance.

Answer to the Point Nos. 3

33.   Point No. 3 is also answered in  favour  of  the  defendants  for  the

following reasons:-

It is an undisputed fact that the plaintiffs have not approached  the  Trial

Court with clean hands.

 It is evident from the pleadings  of  the  Agreement

of Sale which is  produced  for  the  decree  for  specific  performance  of

Agreement of Sale as the plaintiffs did not obtain  the  signatures  of  all

the co-sharers of the property namely, the mother  of  the  defendants,  the

third brother and 3 sisters. 

Therefore, the agreement is not enforceable  in

law as the persons who have  executed  the  sale  deed,  did  not  have  the

absolute title of the property. 

Apart from the said legal lacuna, the  terms

and conditions of the Agreement of Sale for payment  of  sale  consideration

agreed to be paid by the first plaintiff in installments within  the  period

stipulated as indicated above were not paid. 

The First Appellate  Court  and

the High Court have not exercised their power under  Section  20(2)  of  the

Specific Relief Act which by itself  is  the  substantial  question  of  law

which fell for consideration before the High Court as  the  First  Appellate

Court failed to consider this important aspect of the matter  and  exercised

its power while determining the rights of the party,  particularly,  in  the

light of the unenforceable  contract  between  the  plaintiffs  against  the

defendants as all of them are not parties to the Agreement of Sale  document

 (Ex.-A1) and the executants viz. defendant Nos. 1 and 2 have  not  acquired

absolute  title  to  the  property  in  question.  Therefore,  the  impugned

judgment is vitiated and liable to be set aside.

Answer to Point No. 4

34.   Though we have answered the questions of law framed in this appeal  in

favour of the defendants, the learned counsel for the defendants during  the

course of arguments, has offered some monetary  compensation  in  favour  of

the plaintiffs if this Court set aside the impugned judgment and  decree  of

specific performance granted in their  favour.  Though,  the  defendants  on

merits have succeeded in this case for the reasons recorded  by  us  on  the

substantial questions of law that have been framed by us on appreciation  of

facts and legal evidence on record, having regard to the peculiar facts  and

circumstances of the case particularly, the execution of Agreement of  Sale,

Ex. A-1 by defendant  Nos.  1  and  2  on  3.5.1993,  after  receiving  part

consideration of  Rs.15,000/-,  and  the  submission  made  by  the  learned

counsel for the defendants, it would be just and proper for  this  Court  to

award a sum of Rs.6,00,000/- by  lump-sum  amount  of  compensation  to  the

plaintiffs within 3 months from the date  of  receipt  of  a  copy  of  this

judgment as provided under Section 22 of the Specific Relief Act.

35.   Since, we have answered point Nos. 1 to 4 in favour of the  defendants

and against the plaintiffs, the  appeal  of  the  defendants  must  succeed.

Accordingly, the impugned judgment and decree passed by the  High  Court  in

affirming the judgment and decree of  the  First  Appellate  Court,  is  set

aside. The  judgment  and  decree  of  the  Trial  Court  is  restored  with

modification that the defendants shall pay a sum  of  Rs.6,00,000/-  to  the

plaintiffs as lump-sum  compensation  within  3  months  from  the  date  of

receipt of copy of this order. The appeal  is  allowed  in  the  above  said

terms. No costs.

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41856

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7835 OF 2014
(Arising out of SLP(C) NO. 24653 OF 2012)

PEMMADA PRABHAKAR & ORS. …APPELLANTS

Vs.

YOUNGMEN’S VYSYA ASSOCIATION & ORS. …RESPONDENTS

J U D G M E N T

V.GOPALA GOWDA, J.

Leave granted.

2. This appeal has been filed against the judgment and final order dated
04.11.2011 passed in the Second Appeal No. 815 of 2011 by the High Court of
Judicature of Andhra Pradesh at Hyderabad, whereby the High Court has
dismissed the Second Appeal.

3. Certain relevant facts are stated for the purpose of appreciating the
rival legal contentions urged on behalf of the parties with a view to
examine the correctness of the findings and reasons recorded by the High
Court in the impugned judgment.

For the sake of brevity and convenience, the parties are referred to in
this judgment as per the rank assigned to them in the original suit
proceedings.

4. The property bearing Door No. 20/42-1-9 with land measuring about 657-
1/3rd sq. yards situated to the west of Vallabhai Street, Cinema Road,
Kakinada (hereinafter, referred to as the ‘suit schedule property’) was the
self acquired property of one Pemmada Venkateswara Rao. He died intestate
and survived by wife Syama Sundari, three sons and three daughters (the
defendant Nos. 1 to 6).

5. The plaintiffs-the Youngmen’s Vyasa Association (who are the
respondents herein), instituted O.S.No.267 of 1995 for the specific
performance of Agreement of Sale dated 03.05.1993 against the defendants
(the appellants herein). The plaintiffs alleged that the defendant Nos. 1
and 2, who are managing the suit schedule property, agreed to sell the same
to plaintiff No. 1.

6. According to the plaintiffs, the defendant Nos. 1 and 2 executed the
Agreement of Sale dated 03.05.1993 in favour of plaintiff No. 1 agreeing to
sell the suit schedule property at the rate of Rs.575/- per sq. yard, the
total consideration of which was to be fixed later after taking the actual
measurement. Later on, the total land value was fixed at Rs.3,77,967/- for
657-1/3 sq. yards. The defendant Nos. 1 and 2 received advance amount of
Rs.5000/- and Rs.10,000/- also. Under the Agreement the plaintiff No. 1
agreed to pay Rs.1,70,000/- to the defendants within 10 days from the day
of vacating the tenants from the suit schedule property. Rs.50,000/- was to
be paid on 30.11.1993 and that the balance amount of Rs.1,50,000/- was to
be paid by 30.3.1994. The defendant Nos. 1 and 2 agreed that they would
obtain the signatures of their 3rd brother-the defendant No. 3 by
9.05.1993. Defendant Nos. 7 and 8 are the tenants in the sheds situated in
the suit schedule property. The defendant Nos.1 & 2 stated that their
sisters were married long ago therefore, they had no interest in the suit
schedule property, and that they would also get the sisters’ signatures on
the agreement.

7. The 2nd Addl. Senior Civil Judge, Kakinada (the Trial Court) by his
judgment dated 12.7.2006 dismissed O.S. No 267/95, in so far as the main
relief for the specific performance of sale is concerned. The Trial Court
has directed the defendants to refund Rs.5000/- with interest at the rate
of 12% p.a. from 5.03.1993 till the date of realization and Rs.10,000/-
with the interest rate at 12% p.a. from 6.08.1993 till the date of
realization.

8. The Trial Court after considering the oral and documentary evidence
on record, observed that as the suit schedule property is adjacent to the
plaintiff’s property, taking advantage of the financial difficulties of
defendant Nos. 1 and 2, the plaintiffs attempted to grab the suit schedule
property and dragged the defendants to the court of law.

9. The Trial Court further held that the Agreement of Sale was not valid
as the defendant Nos.3 to 6 and their mother did not give consent to sell
the suit schedule property to the plaintiffs. Accordingly, the main relief
for specific performance was rejected and the defendants were directed to
refund the amount of advance sale consideration to the plaintiffs with
interest at the rate of 12% p.a.

10. Being aggrieved by the judgment and decree dated 12.7.2006 of the
Trial Court, the plaintiffs filed an appeal being A.S. No. 269 of 2006
before the Court of 3rd Additional District Judge, Kakinada, the First
Appellate Court.

11. On 28.04.2010 the First Appellate Court allowed the appeal partly,
directing the defendant Nos. 1, 2, 4 and 5 to execute the registered sale
deed in favour of the plaintiff’s Association in respect of their 1/6th
share each i.e. 4/6th share by receiving their respective shares of the
balance sale consideration from the plaintiffs and modified the decree for
specific performance of Agreement of Sale.

12. The First Appellate Court vide its order dated 28.4.2010 held that
the transaction between the parties is real sale transaction and not mere
money transaction and the sale agreement is valid and binding between the
parties and the plaintiffs are entitled for the first main relief of
specific performance and directed defendant Nos. 1, 2, 4 and 5 to execute
sale deed in respect of their 4 shares of the suit schedule property after
receiving proportionate sale price.

13. Being aggrieved by the judgment and decree dated 28.04.2010 of the
First Appellate Court, the defendants preferred Second Appeal being S.A.
No. 815 of 2011 before the High Court of Judicature of Andhra Pradesh at
Hyderabad whereby the High Court vide order dated 4.11.2011 dismissed the
Second Appeal which is impugned in this appeal.

14. The High Court held that the approach of the First Appellate Court in
granting the relief of specific performance directing defendants 1, 2, 4
and 5 to execute sale deed in respect of their shares, i.e. 4/6th share of
the suit schedule property in favour of the plaintiffs on receipt of their
respective balance consideration which stood deposited in the court, cannot
be faulted with.

15. It was further held by the High Court that the mother of the
defendants was alive when the suit was instituted in 1995 and she died on
29.09.2005. She had one share and after her death, the property would be
divided into 6 shares and the agreement was held as binding on the
defendants 1, 2, 4 and 5. Therefore, the High Court upheld the decision of
the First Appellate Court and moulded the relief in the above terms while
granting decree of specific performance of the Agreement of Sale by
executing the sale deed of their share in the property in favour of the
plaintiffs.

16. The following submissions were made by the learned counsel for both
the parties in support of their claim and counter claim.

17. On behalf of the defendant Nos.1 & 2, it is contended that their
father Pemmada Venkateswara Rao was engaged in lathe works which incurred
heavy loss and he was allegedly indebted to various creditors. They
approached one Murali Krishna (who had acquaintance with them) who was the
Secretary of the plaintiff Association to borrow some money. Taking
advantage of their situation, the Secretary and the President of the
Plaintiff Association obtained the signatures of defendant Nos. 1 and 2 on
a blank sheet of paper and gave Rs.5000/- on 3.5.1993 and Rs.10,000/- on
6.8.1993 to them.

18. It was further contended by the learned counsel that the defendants
never intended to sell the suit schedule property and the transaction with
the plaintiffs Association was only money transaction and was not a sale
transaction with it. A separate written statement was filed by the 4th
defendant to the same effect.

19. It was further contended by defendant Nos. 1 to 6 that even on the
date of execution of Agreement of Sale their mother was very much alive
and, therefore in the absence of execution of Agreement of Sale by all the
seven co-sharers of the suit schedule property the suit for specific
performance does not lie. The learned counsel for the defendants placed
reliance on the decisions of Andhra Pradesh High Court and this Court in
the cases of Kommisetti Venkatasubbayya v. Karamestti Venkateswarlu[1] and
Lourdu Mari David & Ors. v. Louis Chinnaya Arogiaswamy & Ors.[2] in support
of their claim.

20. Further, they placed reliance upon the case of this Court in
Rameshwar & Ors. v. Jot Ram & Anr.[3]. In the said authority it has been
held as follows:

“9…First, its bearing on the right of action, second, on the nature of the
relief and third, on its impotence to create or destroy substantive rights.
Where the nature of the relief, as originally sought, has become obsolete
or unserviceable or a new form of relief will be more efficacious on
account of developments subsequent to the suit or even during the appellate
stage, it is but fair that the relief is moulded, varied or reshaped in the
light of updated facts. Patterson illustrates this position. It is
important that the party claiming the relief or change of relief must have
the same right from which either the first or the modified remedy may flow.
Subsequent events in the course of the case cannot be constitutive of
substantive rights enforceable in that very litigation except in a narrow
category (later spelt out) but may influence the equitable jurisdiction to
mould reliefs. Conversely, where rights have already vested in a party,
they cannot be nullified or negated by subsequent events save where there
is a change in the law and it is made applicable at any stage. Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri falls in this category. Courts of
justice may, when the compelling equities of a case oblige them, shape
reliefs — cannot deny rights — to make them justly relevant in the updated
circumstances. Where the relief is discretionary, courts may exercise this
jurisdiction to avoid injustice. Likewise, where the right to the remedy
depends, under the statute itself, on the presence or absence of certain
basic facts at the time the relief is to be ultimately granted, the Court,
even in appeal, can take note of such supervening facts with fundamental
impact…”
(Emphasis supplied)

21. The High court held that defendants pleaded falsehood at the time of
execution of the Agreement of Sale by stating that their mother had
predeceased their father. The agreement and the endorsement thereon made by
defendant Nos.1 and 2 had swayed discretion of the High Court in favour of
the plaintiffs which is an Association engaged in the welfare of the
community.

22. The High Court further held that the suit schedule property was not
purchased for unlawful gain of an individual and that the First Appellate
Court considered the entire evidence on record and exercised its sound
jurisdiction and modified the judgment of the Trial Court by granting a
decree of specific performance as per the terms stipulated therein.

23. The High Court dismissed the second appeal without adverting to the
substantial questions of law that were framed in the second appeal at the
admission stage itself stating that there is no substantial question of
law for its adjudication. The First Appellate Court and the Second
Appellate Court committed serious error in law in not noticing the relevant
important findings of fact recorded by the Trial Court on the contentious
issues on proper appreciation of pleadings and evidence on record with
reference to the legal submission made on behalf of the parties. The Trial
Court after proper appreciation of evidence on record, particularly, Ex.-
A1, the Agreement of Sale, has held that it is not a valid agreement and no
rights can flow from it in favour of the plaintiffs in the light of the
fact that the signatures of defendant Nos. 1 and 2 were obtained on
different dates on blank papers as they were in financial crisis and that
fact is proved by producing Exs.-B1 to B-8 to show that the entire family
(defendant Nos. 1 to 6) were in financial crisis and they were forced to
pay the debts to their creditors. Therefore, they were in urgent need of
money and they approached the PW-1 for financial help, who obtained the
signatures of defendant Nos. 1 and 2 on blank paper and the same was
fabricated as a receipt. The said receipt was not signed by defendant Nos.
3 to 6. The mother of the defendant Nos. 1 and 2 is one of the co-sharers
of the suit schedule property as a class-I legal heir to succeed to the
intestate property of her deceased husband, which was his self acquired
property left by him, as he had purchased the same vide Sale-Deed document
No. 5174/1970 dated 24.11.1970 from his vendors. In fact, there is a
reference made in this regard in the Agreement of Sale executed by
defendant Nos. 1 and 2 to the effect that after demise of Pemmada
Venkateswara Rao, the father of defendant Nos. 1 to 6, the property
devolved upon them jointly and they are enjoying with absolute rights. As
per Section 8 of the Hindu Succession Act, 1956 the general rules of
succession would be applicable in the case of a male Hindu dying
intestate, relevant portion of which reads as under :-

“8. General rules of succession in the case of males.- The property of a
male Hindu dying intestate shall devolve according to the provisions of
this Chapter-

Firstly, upon the heirs, being the relatives specified in class I of the
Schedule;

XXX XXX XXX”

In the Schedule of the said Act, class I heirs are son, daughter, widow,
mother and others. In view of the enumeration of the class I heirs in the
Schedule, the mother and sisters of the defendant Nos. 1 and 2 are also co-
sharers of the property left intestate by the deceased Pemmada
Venkateswara Rao. As could be seen from the Agreement of Sale-Ex.-A1
undisputedly, the third brother and 3 sisters, (defendant Nos. 3 to 6) and
their mother have not executed the Agreement of Sale in favour of the
plaintiffs. Therefore, the same is not enforceable under Section 17 of the
Specific Relief Act, 1963. The mother lived upto September, 2005, the
aforesaid legal heirs of deceased Pemmada Venkateswara Rao got equal shares
in the suit schedule property.

24. It is further contended on behalf of the defendants that the First
Appellate Court and the High Court have failed in not applying the legal
principle laid down by this Court in the case of Lourdu Mari David & Ors.
(supra), wherein this Court held that the party who seeks to avail of the
equitable jurisdiction of a court and specific performance decree being
equitable relief must come to the court with clean hands. In other words,
the party who makes false allegations against the defendants does not come
with clean hands and therefore, it is not entitled to the equitable relief
of specific performance decree from the court.

25. Another legal contention urged on behalf of the defendants is that
the High Court has erroneously come to the conclusion on facts and evidence
on record and it has affirmed the divergent findings of fact recorded by
the First Appellate Court without examining and answering the substantial
questions of law framed in the Second Appeal and it has erroneously
dismissed the appeal holding that the suit schedule property was not
purchased by the plaintiffs for unlawful gain of an individual. The said
property is probably purchased by the plaintiffs to put it to use for the
purpose of the community. The High Court without considering the legal
submissions urged on behalf of the defendants adjudicated the rights of the
parties ignoring certain facts, evidence on record and legal contentions
urged. It has erroneously held that the plaintiffs are entitled for the
relief of specific performance while the Agreement of Sale is not
enforceable under Section 17 of the Specific Relief Act, 1963, in view of
the fact that all the legal heirs of the deceased Pemmada Venkateswara Rao
are not parties to the Agreement of Sale and the defendant Nos. 1 and 2 do
not have absolute title and right upon the entire suit schedule property.
Even assuming for the sake of argument that the Agreement of Sale is valid,
the same could not have been enforced against the defendants as the
plaintiffs have committed breach of the contract as agreed upon by them as
per clause 2 of the penultimate paragraph Nos. 2 and 3 of the Agreement of
Sale. The plaintiffs gave a sum of Rs.5,000/- & Rs. 10,000/- as an advance
amount towards sale consideration and the remaining sale consideration,
i.e.(i)an amount of Rs.1,70,000/- which was to be paid within 10 days from
the day of vacating the tenants in the property, (ii) Rs.50,000/- to be
paid on 30.11.1993 and the remaining sale consideration of Rs.1,50,000/- to
be paid on or before 30.3.1994 was not paid to the defendant Nos. 1 and 2.

26. It is also contended by the learned counsel that the First Appellate
Court and the Second Appellate Court have not exercised their discretionary
powers as required under Section 20(2) of the Specific Relief Act for
decreeing the specific performance in favour of the plaintiffs, even
though, the defendants have made out a case before the Trial Court that
the plaintiffs are not entitled for the decree for specific performance.
Therefore, the First Appellate Court and the Second
Appellate Court have gravely erred in not exercising their discretionary
power under Section 20(2) of the Specific Relief Act at the time of passing
decree for specific performance in favour of the plaintiffs, which is not
only erroneous in law but also vitiated in law and therefore, the same is
liable to be set aside.

27. On the contrary, the learned counsel for the plaintiffs has
sought to justify the impugned judgment contending that the Second
Appellate Court in exercise of its appellate jurisdiction after examining
the facts and evidence on record has held that the substantial questions of
law framed by the defendants in the second appeal, on the divergent
findings of fact recorded by the First Appellate Court would not arise.
Decreeing the suit by the First Appellate Court as prayed by the plaintiffs
is correct as it has set aside the decree of the Trial Court. It is further
urged that the High Court is right in dismissing the second appeal and
therefore, the same does not call for interference by this Court as there
is no substantial question of law which would arise for consideration.
Therefore, the learned counsel for the respondent-plaintiffs prayed for
dismissal of this civil appeal as the same is devoid of merit.

28. With reference to the above said rival contentions, the following
points would arise for our consideration :-
Whether the plaintiffs are entitled for the decree for specific
performance of the Agreement of Sale (Ex.-A1) when Agreement of
Sale entered between the plaintiffs and defendant Nos. 1 and 2
who do not have absolute title to the property?

Whether in the absence of execution of the Agreement of Sale-Ex.-A1 by the
other defendants/co-sharers is it valid, even assuming that Agreement of
Sale is valid, there is breach of terms and conditions of the Contract on
the part of the plaintiffs in not paying the sale consideration amount of
Rs. 1,70,000/- within 10 days from the day of vacating the tenants,
Rs.50,000/- on 30.11.1993 and an amount of Rs.1,50,000/- on or before
30.3.1994 to the defendants and plaintiffs are entitled for decree of
specific performance of the Agreement of Sale?

Whether the plaintiffs are entitled for discretionary relief of specific
performance under Section 20(2) of the Specific Relief Act when it has not
approached the court with clean hands?

What relief?

Answer to Point No. 1

29. It is an undisputed fact that the suit schedule property is self
acquired property by late Pemmada Venkateswara Rao as he had
purchased the said property vide Sale-Deed Document No.5174 of 1970
dated 24.11.1970 from his vendors. It is also an undisputed fact that the
said property is intestate property. He is survived by his wife, 3 sons and
3 daughters. The said property devolved upon them in view of Section 8 of
Chapter 2 of the Hindu Succession Act as the defendants are class I legal
heirs in the suit schedule property. Undisputedly, the Agreement of Sale-
Ex.-A1 is executed only by defendant Nos. 1 and 2. The 3rd son, mother and
3 sisters who have got equal shares in the property have not executed the
Agreement of Sale. In view of the matter, the Agreement of Sale executed by
defendant Nos. 1 and 2 who have no absolute right to property in question
cannot confer any right whatsoever upon the plaintiffs for grant of decree
of specific performance of Agreement of Sale in their favour. The said
agreement is not enforceable in law in view of Section 17 of the Specific
Relief Act in view of right accrued in favour of defendant Nos. 3 to 6
under Section 8 of the Hindu Succession Act. The provisions of Section 17
of the Specific Relief Act in categorical term expressly state that a
Contract to sell or let any immovable property cannot be specifically
enforced in favour of a vendor or lessor who does not have absolute title
and right upon the party. It is worthwhile to extract Section 17 of the
Specific Relief Act,1963 here :-
“17.-Contract to sell or let property by one who has no title, not
specifically enforceable.- A contract to sell or let any immovable property
cannot be specifically enforced in favour of a vendor or lessor;

(a) who, knowing not to have any title to the property, has contracted to
sell or let the property

(b) who, though he entered into the contract believing that he had a good
title to the property, cannot at the time fixed by the parties or by the
court for the completion of the sale or letting, give the purchaser or
lessee a title free from reasonable doubt.”

In view of the aforesaid provisions of the Specific Relief Act, the
Agreement of Sale entered between the plaintiffs and some of the co-sharers
who do not have the absolute title to the suit schedule property is not
enforceable in law. This aspect of the matter has not been properly
appreciated and considered by both the First Appellate Court and the Second
Appellate Court. Therefore, the impugned judgment is vitiated in law.

30. Even assuming for the sake of argument that the agreement is valid,
the names of three sons are mentioned in Agreement of Sale, out of whom the
agreement is executed by defendant Nos. 1 and 2 and they assured that they
would get the signatures of the 3rd brother namely, Srinivasa Rao and also
the remaining 3 sisters. At the time of execution of this agreement
signatures were not obtained. Therefore, the agreement is not executed by
all the co-sharers of the property which fact is evident from the recitals
of the document itself. Hence, the plaintiffs are not entitled for specific
performance decree. This vital factual and legal aspect has been ignored by
both the First Appellate Court and the Second Appellate Court. Therefore,
the impugned judgment is vitiated both on facts and law. Accordingly, the
point No. 1 is answered in favour of the defendants.

Answer to Point No. 2

31. The second point is also required to be answered against the
plaintiffs for the following reasons:-

As could be seen from the Agreement of Sale document marked as Ex.-A1 and
the pleadings of the parties payment of sale consideration was agreed to be
paid to the defendant Nos. 1 and 2 as per following terms of the agreement
:-
“… (i) an amount of Rs.1,70,000/- shall be paid by Vendee to Vendors within
10 days from the day of vacating the tenants in the property, (ii) Rs.
50,000/- shall be paid on 30.11.1993., (iii) the remaining sale
consideration of Rs.1,50,000/- shall be paid on or before 30.3.1994.”

32. It is an undisputed fact that except payment of Rs.5,000/- and
Rs.10,000/- paid by the purchaser-plaintiff No.1 to the defendant Nos. 1
and 2 according to the Agreement of Sale, the remaining installment i.e. an
amount of Rs.1,70,000/- which was to be paid to the Vendors within 10 days
from the day of vacating the tenants in the property was not paid. Even
assuming that the amount could have been paid had the tenants vacated the
schedule property then the remaining part of the sale consideration agreed
to be paid as notified under clauses (ii) and (iii) as per aforesaid
paragraph of the Agreement of Sale undisputedly not paid to the defendant
Nos. 1 and 2. Therefore, there is breach of contract on the part of the
plaintiffs as could be seen from the agreement of sale regarding the
payment of part sale consideration amount. For this reason itself
plaintiffs are not entitled for a decree of specific performance.

Answer to the Point Nos. 3

33. Point No. 3 is also answered in favour of the defendants for the
following reasons:-
It is an undisputed fact that the plaintiffs have not approached the Trial
Court with clean hands. It is evident from the pleadings of the Agreement
of Sale which is produced for the decree for specific performance of
Agreement of Sale as the plaintiffs did not obtain the signatures of all
the co-sharers of the property namely, the mother of the defendants, the
third brother and 3 sisters. Therefore, the agreement is not enforceable in
law as the persons who have executed the sale deed, did not have the
absolute title of the property. Apart from the said legal lacuna, the terms
and conditions of the Agreement of Sale for payment of sale consideration
agreed to be paid by the first plaintiff in installments within the period
stipulated as indicated above were not paid. The First Appellate Court and
the High Court have not exercised their power under Section 20(2) of the
Specific Relief Act which by itself is the substantial question of law
which fell for consideration before the High Court as the First Appellate
Court failed to consider this important aspect of the matter and exercised
its power while determining the rights of the party, particularly, in the
light of the unenforceable contract between the plaintiffs against the
defendants as all of them are not parties to the Agreement of Sale document
(Ex.-A1) and the executants viz. defendant Nos. 1 and 2 have not acquired
absolute title to the property in question. Therefore, the impugned
judgment is vitiated and liable to be set aside.

Answer to Point No. 4

34. Though we have answered the questions of law framed in this appeal in
favour of the defendants, the learned counsel for the defendants during the
course of arguments, has offered some monetary compensation in favour of
the plaintiffs if this Court set aside the impugned judgment and decree of
specific performance granted in their favour. Though, the defendants on
merits have succeeded in this case for the reasons recorded by us on the
substantial questions of law that have been framed by us on appreciation of
facts and legal evidence on record, having regard to the peculiar facts and
circumstances of the case particularly, the execution of Agreement of Sale,
Ex. A-1 by defendant Nos. 1 and 2 on 3.5.1993, after receiving part
consideration of Rs.15,000/-, and the submission made by the learned
counsel for the defendants, it would be just and proper for this Court to
award a sum of Rs.6,00,000/- by lump-sum amount of compensation to the
plaintiffs within 3 months from the date of receipt of a copy of this
judgment as provided under Section 22 of the Specific Relief Act.

35. Since, we have answered point Nos. 1 to 4 in favour of the defendants
and against the plaintiffs, the appeal of the defendants must succeed.
Accordingly, the impugned judgment and decree passed by the High Court in
affirming the judgment and decree of the First Appellate Court, is set
aside. The judgment and decree of the Trial Court is restored with
modification that the defendants shall pay a sum of Rs.6,00,000/- to the
plaintiffs as lump-sum compensation within 3 months from the date of
receipt of copy of this order. The appeal is allowed in the above said
terms. No costs.

……………………………………………………………………J.
[DIPAK MISRA]

……………………………………………………………………J.
[V. GOPALA GOWDA]

New Delhi,
August 20,2014
———————–
[1] A.I.R. 197?

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