KIRPAL KAUR AND ANOTHER versus RITESH AND OTHERS on 22 March 2022

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 11.09.2017 passed by the High Court of Punjab &Haryana at Chandigarh in R.S.A. No. 2891 of 2010, by which the HighCourt has dismissed the said second appeal and has confirmed thejudgment and decree passed by the first appellate Court, granting theErelief of specific performance of the agreement to sell dated 11.02.2004,the original defendants have preferred the present appeal.2. The facts leading to the present appeal in a nutshell are asunder:

That one Gurmeet Singh, predecessor-in-interest of the defendantsF(husband of defendant no.1 and father of defendant no.2 to 4) was theowner and in possession of land admeasuring 8 kanals situated in villageNilokheri, District Karnal. That the said Gurmeet Singh executed anagreement to sell dated 11.02.2004 in favour of one Jai Parkash,predecessor-in-interest of the plaintiffs for a sale consideration of RupeesGFour Lakhs. That a sum of Rupees Three Lakhs and Fifty Thousandwas paid as an earnest money to the said Gurmeet Singh. The targetdate for execution of the sale deed in favour of the vendee or his assigneewas fixed as 10.02.2005, on payment of balance sale consideration. Inthe agreement, it was also stated that if the vendor fails to perform hispart of the agreement, then the vendee would be entitled to double theH

earnest money or in the alternative, to get the sale deed executed andregistered through the Court.

2.1 According to the plaintiffs, during his life time, the vendee JaiParkash was willing to perform his part of the agreement and after hisdeath, the plaintiffs, as his legal representatives had to perform. Accordingto the plaintiffs, they approached the defendants to perform their part ofthe agreement, in terms of agreement to sell dated 11.02.2004, however,the defendants kept on deferring the matter. Therefore, the plaintiffsserved a legal notice dated 14.01.2005 asking the defendants to appearin the office of Sub Registrar, Nilokheri on 10.02.2005 for execution ofthe sale deed, which was the target date fixed in the agreement. Accordingto the plaintiffs, they reached the office of Sub Registrar, Nilokheri on10.02.2005 with the balance sale consideration and the money requiredfor purchase of stamp papers and other expenses. However, thedefendants did not turn up at the Sub Registrar’s office. The plaintiffsgot their presence marked by moving an application before the SubRegistrar, Nilokheri, who made an endorsement thereon and returnedthe application, along with the affidavit of the plaintiffs, which wereattested by Sub Registrar. Thereafter the plaintiffs again served registeredlegal notice on 18.02.2005. In reply to the said notice, the defendantstotally denied the execution of the agreement to sell dated 11.02.2004 byGurmeet Singh. They also denied having received an amount ofRs.3,50,000/- mentioned in the agreement to sell. Hence, the plaintiffsinstituted the suit, being Civil Suit No. 681 of 2005 in the Court ofAdditional Civil Judge (Senior Division), Karnal for specific performanceand for possession along with consequential relief of permanent injunction.

2.2 The suit was resisted by the defendants by filing their writtenstatement. In the written statement, the original defendants deniedexecution of the agreement to sell dated 11.02.2004. It was the case onbehalf of the defendants that Gurmeet Singh was an illiterate person,addicted to vices and his thumb impressions were obtained on blankpapers by Jai Parkash, who was a cloth shop owner in Nilokheri. Thedefendants also denied receipt of Rs.3.50,000/- by Gurmeet Singh fromthe plaintiffs. Both the parties led their evidence.

2.3 On appreciation of the evidence on record and on hearing theparties, the learned trial Court, though held that the agreement was validlyexecuted between Gurmeet Singh and Jai Parkash, for a sale considerationand though held that Rs.3,50,000/- was indeed paid by Jai Prakash to AB

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AGurmeet Singh, nevertheless denied the relief of specific performanceby observing that the agreement, Ex. P2, may have been executed as asecurity document for repayment of a loan. Therefore, instead of grantingthe relief of specific performance, the learned trial Court passed a decreefor return of earnest money along with interest at the rate of 6% perannum by way of an alternative relief.B

2.4 Feeling aggrieved and dissatisfied with the judgment and decreepassed by the learned trial Court, refusing to grant the relief of specificperformance, the original plaintiffs preferred an appeal before the firstappellate Court. The first appellate Court allowed the appeal and setaside the judgment and decree passed by the learned trial Court refusingCto pass a decree for specific performance by categorically observingthat the agreement to sell dated 11.02.2004 cannot be said to be a loanagreement and/or security document for repayment of a loan.

2.5 Feeling aggrieved and dissatisfied with the judgment and orderpassed by the first appellate Court granting relief of specific performanceDof the agreement to sell dated 11.02.2004, the appellants – defendantspreferred regular second appeal before the High Court. By the impugnedjudgment and order, the High Court has dismissed the said second appeal,which has given rise to the present appeal.

3. Shri Tarun Gupta, learned counsel appearing on behalf of theEappellants – original defendants has vehemently submitted that in thefacts and circumstances of the case, both, the first appellate Court aswell as the High Court have committed a grave error in holding that theagreement to sell dated 11.02.2004 is not a security document/loanagreement.F3.1 Shri Tarun Gupta, learned counsel for the appellants has takenus to the agreement dated 11.02.2004. It is submitted that in the agreementitself, it has been specifically mentioned that as there was a marriage ofthe daughter of Gurmeet Singh, the amount was required and thereforeRs. 3,50,000/- was taken as a loan towards the expenses of his daughter’sGmarriage. It is submitted therefore that, as such, agreement dated11.02.2004 was a loan agreement/security document.

3.2 It is further submitted by learned counsel appearing on behalfof the appellants – original defendants that against the sale considerationof Rs. 4,00,000/- mentioned in the agreement, Rs. 3,50,000/- was allegedto have been paid by Jai Parkash, vendee. It is submitted that thereforeH

when the substantial amount was alleged to have been paid without anypossession, the agreement be treated as a security document/loanagreement.

3.3 It is further contended by learned counsel appearing on behalfof the appellants – original defendants that though in the agreement, itwas stated that the possession is handed over to the vendee, thedefendants continued to be in possession and the possession was neverhanded over to the vendee and/or his legal heirs. It is submitted that allthe aforesaid circumstances would go to show that the agreement dated11.02.2004 was a loan agreement/security document.

3.4 It is urged by the learned counsel appearing on behalf of theappellants – original defendants that the suit land is an agricultural landand the only source of income of the defendants and their familymembers and therefore considering Section 20 of the Specific ReliefAct and when the grant of specific performance is a discretionary relief,the said discretion may be exercised in favour of the defendants. It issubmitted that the valuable property has been sought to be purchased bythe plaintiffs for a meagre sum of Rs. 4,00,000/- only.

3.5 Making the above submissions, it is prayed to allow the presentappeal and restore the judgment and decree passed by the learned trialCourt.

4. The present appeal is vehemently opposed by Shri TathagatHarsh Vardhan, learned counsel appearing on behalf of the originalplaintiffs.

4.1 It is submitted that as such there are concurrent findings offacts recorded by all the courts below on the execution of the agreementexecuted by Gurmeet Singh in favour of Jai Parkash. It is submitted thatall the courts below have also believed the payment of sale considerationby the vendee to the vendor. It is contended that the said findings offacts recorded by all the courts below are not required to be interferedwith by this Court, in exercise of powers under Article 136 of theConstitution of India.

4.2 It is further contended that, as such, it was never the case onbehalf of the defendants before the trial Court that agreement dated11.02.2004 was a loan agreement/security document. It is submittedthat before the trial Court, the defendants totally denied the execution ofthe agreement dated 11.02.2004 by Gurmeet Singh and receipt of AB

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ARs.3,50,000/-. That for the first time before the first appellate Court, itwas the case on behalf of the defendants that agreement dated11.02.2004 was a loan agreement/security document.

4.3 It is further submitted by learned counsel appearing on behalfof the respondents – original plaintiffs that even the trial Court also heldBthat the agreement was validly executed between Gurmeet Singh andJai Parkash for a valuable consideration. However, the trial Court refusedto pass a decree for specific performance solely on the ground that theagreement might have been executed as a security document forrepayment of a loan. Therefore, the trial Court, instead of granting therelief of specific performance, passed a decree for return of earnestCmoney. It is contended that the defendants did not prefer any appealbefore the first appellate Court against the findings recorded by the trialCourt on the execution of the agreement dated 11.02.2004 betweenGurmeet Singh and Jai Parkash and on the payment of Rs. 3,50,000/-paid by vendee to the vendor. That, in fact, the original plaintiffs preferredDthe appeal before the first appellate Court against refusal of the decree for specific performance.

4.4 It is urged that, both, the first appellate Court as well as theHigh Court have rightly observed and held that agreement dated11.02.2004 cannot be said to be a loan agreement and/or securityEdocument. Therefore, the first appellate Court rightly passed a decreeof specific performance which is rightly confirmed by the High Court.

4.5 Making the above submissions, it is prayed to dismiss thepresent appeal.

5. We have heard learned counsel for the respective parties atFlength.

At the outset, it is required to be noted that as such there areconcurrent findings of facts recorded by all the courts below on theexecution of the agreement dated 11.02.2004 by Gurmeet Singh in favourof Jai Parkash. There are concurrent findings of fact recorded by all theGcourts below on the payment of part sale consideration of Rs.3,50,000/-by the vendee to the vendor. The trial Court refused to grant the relief ofspecific performance solely on the ground that the agreement mighthave been executed as a security document for repayment of loan.However, as observed hereinabove, even the trial Court also specificallyheld that the agreement was validly executed between Gurmeet SinghH

and Jai Parkash for a sale consideration. The plaintiffs preferred theappeal before the first appellate Court against refusal to pass a decreefor specific performance. The defendants did not prefer any appeal beforethe first appellate Court against the findings recorded by the trial Courton execution of the agreement and on payment of part sale consideration.Therefore, the findings recorded by the trial Court that the agreementwas validly executed for a sale consideration has attained finality.

6. On a careful consideration of the agreement dated 11.02.2004,the first appellate Court and the High Court have observed and held thatthe agreement dated 11.02.2004 cannot be said to be a loan agreementand/or security document, as alleged by the defendants. We have alsogone through and considered the agreement dated 11.02.2004. Onreading the entire agreement, it cannot be said that the agreement dated11.02.2004 can be said to be a loan agreement and/or security document.Merely because in the document the purpose of sale of the propertywas stated to be for the marriage expenses, the document which otherwisecan be said to be an agreement to sell, will not become a loan agreementand/or security document. If the agreement as a whole is read, we findthat it is an agreement to sell. Both, the first appellate Court and theHigh Court have rightly not accepted the case on behalf of the defendantsthat the agreement is a loan agreement and/or security document. Atthis stage, it is required to be noted that as such it was never the case onbehalf of the defendants before the trial Court that the agreement is aloan agreement and/or security document. Before the trial Court, thedefendants denied totally the very execution of the agreement and receiptof Rs.3,50,000/-, which has been rightly disbelieved even by the trialCourt. It appears that before the first appellate Court, for the first time,the defendants came out with a case that the agreement is a loanagreement and/or security document.

7. Once the execution of the agreement to sell for a saleconsideration has been believed and it has been found that Jai Parkashand thereafter, the original plaintiffs were always ready and willing toperform their part under the agreement and in fact they remained presentbefore the Sub Registrar, Nilokheri on 10.02.2005, which has beenestablished and proved, the decree for specific performance is rightlypassed by the first appellate Court, which is rightly confirmed by theHigh Court. In the facts and circumstances, clauses (a) & (c) of Section20 of the Specific Relief Act shall not be applicable and/or attracted. We AB

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Aare in complete agreement with the view taken by the first appellateCourt and the High Court. However, at the same time to do the completejustice between the parties and in exercise of powers under Article 142of the Constitution of India, we direct the original plaintiffs to payadditional Rs.3,50,000/- to the appellants - original defendants, over andabove the balance sale consideration of Rs.50,000/- (Rs.50,000/- to beBpaid with 6% interest from the date of execution of the Agreement toSell i.e., 11.02.2004 to actual payment). It is further directed that onsuch payment the original defendants – appellants herein shall executethe sale deed in favour of respondents herein – original plaintiffs.

8. In view of the above and for the reasons stated above, theCpresent appeal fails and deserves to be dismissed and is accordinglydismissed. No order as to costs.

D

Devika Gujral

Appeal dismissed.

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