Safiya Malik

The High Court of Jharkhand at Ranchi has dismissed a second appeal in a property dispute concerning the specific performance of a contract of sale. The Bench, of  Justice Anubha Rawat Choudhary, upheld the findings of the first appellate court, affirming that the suit property was the exclusive ownership of the original defendant and was validly subject to the sale agreement. The court further determined that there was no requirement for the plaintiff to seek cancellation of a subsequent sale deed, as the defendants were not bona fide purchasers without notice of the prior agreement.

The dispute revolved around an agreement for the sale of an immovable property. The plaintiff sought the enforcement of a registered sale agreement dated September 6, 2005, against the original defendant, who later executed a sale deed in favor of another party on May 29, 2006. The suit was initially dismissed by the trial court, which stated that the property was jointly owned by several co-parceners, and therefore, could not be sold by a single party without the consent of others. The plaintiff, however, argued that the suit property had already been partitioned and that the defendant had an absolute right to sell it.

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According to the plaintiff, the property had been partitioned on February 17, 1995, through a written family settlement, following which individual shares were allotted, and the defendant became the exclusive owner of the disputed property. The plaintiff further claimed that a registered sale agreement was executed between him and the defendant on September 6, 2005, for a consideration of Rs. 14,11,000/-, out of which Rs. 8,00,000/- was already paid. The remaining balance was to be paid at the time of the execution of the sale deed. The plaintiff contended that the defendant refused to execute the final sale deed despite having received the major portion of the consideration.

The defendant, however, denied these claims, asserting that the suit property was joint family property and that he was not authorized to sell it without the consent of other co-owners. The defendant also claimed that he had previously entered into an unregistered sale agreement with another party on May 6, 2005, for a lower consideration amount of Rs. 9,00,000/-, and that the subsequent sale deed executed in favor of the appellant’s party was based on this earlier agreement. The defendant maintained that the plaintiff had no legal basis to demand specific performance of the later agreement.

The first appellate court set aside the trial court’s decision, stating that the property was the defendant’s exclusive share, as evidenced by the family partition document dated February 17, 1995. The court concluded that the plaintiff was entitled to specific performance of the agreement executed on September 6, 2005.

The High Court examined the evidence and agreed with the first appellate court’s findings, holding that the suit property was not part of a joint family estate but had already been divided among the co-owners. The court stated:

"From perusal of the evidence, it transpires that in fact, the suit property had been partitioned by the co-sharers by an amicable family settlement between the coparceners of the family on 17/02/1995 duly signed by all the coparceners. Further, each co-sharer has assumed its own part and has been paying rent on their respective shares and partition stands admitted."

The court further recorded that the defendant's argument regarding the earlier sale agreement dated May 6, 2005, was not supported by sufficient evidence. It observed:

"The first appellate Court has rightly held that the agreement of sale dated 06.09.2005 (Exhibit-1) which was entered into by defendant no. 1 with the plaintiff is a valid document. The ratio of the judgment passed by this Court in Bharat Singh vs. Aklu Hazam does not help the appellants in any manner."

Regarding the necessity of seeking cancellation of the subsequent sale deed, the court cited Supreme Court precedents, stating that a specific performance decree could be granted without such cancellation if the subsequent purchaser was not a bona fide transferee. The court stated:

"The law has now been settled that in a suit for specific performance of contract when there is a sale of the property after the suit agreement and such purchaser has bought the property in good faith and without notice of the suit agreement, there is no need to challenge the sale-deed and the court can direct the subsequent purchaser to join in for the execution of sale-deed in favour of the plaintiff."

It was further observed that the defendant had failed to establish that the subsequent purchaser had no knowledge of the earlier agreement. The court noted that the plaintiff had published a public notice regarding his agreement on March 2, 2006, well before the subsequent sale was executed.

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The High Court also examined the financial transactions between the parties and found that the defendant had accepted significant payments from the plaintiff. The evidence indicated that the defendant had received and acknowledged payments of Rs. 2,00,000/- as an advance and an additional Rs. 6,00,000/- before refusing to complete the sale. The court observed that this conduct demonstrated the plaintiff’s willingness to fulfill his part of the contract, further justifying the decree for specific performance.

The High Court dismissed the second appeal, upholding the appellate court’s order directing the legal heirs of the original defendant to execute the sale deed in favor of the plaintiff. The court observed:

"Accordingly, the first substantial question of law is hereby answered against the appellants and in favour of the respondent no.1 (plaintiff), and it is held that the learned first appellate Court committed no perversity while decreeing the suit of the plaintiff even though the plaintiff did not pray for cancellation of the aforesaid sale-deed dated 29.05.2006."

It was noted that execution proceedings had already been completed, and the sale deed was registered in favor of the plaintiff. As a result, the execution proceedings were closed as fully satisfied.

Advocates Representing the Parties

• For the Appellants: Mr. Sudarshan Shrivastava, Mr. Amit Kr. Verma
• For the Respondent: Mr. Himanshu Kumar Mehta, Mrs. Manjusri Patra, Mr. Rishav Raj

Case Title: Rubi Devi & Ors. vs. Ritesh Kumar Gupta & Ors.
Case Number: Second Appeal No. 5 of 2023
Bench: Justice Anubha Rawat Choudhary

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