SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NO.2770 OF 2006

S. Abdul Khader  ...Petitioner

Vs.   Abdul Wajid (D) by LRs. & Ors.  ...Respondents

J U D G M E N T  

ALTAMAS KABIR,J.

1. The special leave petition arises out of OS

No.8198  of  1995  filed  by  the  petitioner

herein  for  specific  performance  of  an

Agreement  for  Sale  dated  18th May,  1995,

executed by the respondent No.1 in respect of

the suit properties and for a direction upon

the respondent to execute a sale deed in his

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favour  and  to  deliver  vacant  possession  of

the suit land.   2. The case made out by the petitioner is that

in view of the Agreement for Sale dated 21st

February,  1995,  executed  by  the  respondent

No.1 in his favour for a total consideration

of  Rs.4,30,000/-,  he  paid  Rs.1,00,000/-  in

cash  to  the  respondent  No.1  as  an  advance

towards  the  sale  price   when  the  said

agreement was executed.  Thereafter, several

amounts  were  paid  by  the  plaintiff  to  the

respondent No.1 amounting to Rs.2,05,000/- in

total.  It was also mentioned in the plaint

that  the  respondent  No.1  had   projected

himself to be the owner of the suit property,

being site No.18, in Survey No.51/3A situated

at  Byrasandra  35th Division  of  Bangalore,

having purchased the same from one Prasanth

M. Kumar, who is now the respondent No.2 in

the  present  Special  Leave  Petition.   The

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respondent  No.1  assured  the  plaintiff  that

the  suit  property  was  free  from  all

encumbrances and that the original sale deed

executed by the respondent No.2 was with the

Deputy  Commissioner   on  account  of  under

valuation.  The respondent No.1 also assured

the  plaintiff  that  he  would  produce  the

original  sale  deed  at  the  time  of

registration, together with the records from

the Corporation after assessment to register

the property, since registration could not be

done without the said records.   

3. According to the plaintiff, he believed and

trusted the respondent No.1 and waited till

the end of October 1995, by which date the

respondent  No.1  had  assured  the  plaintiff

that he would complete the sale transaction.

The  respondent  No.1,  however,  did  not  make

any effort to complete the sale transaction

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inspite of repeated requests made to him by

the  petitioner  to  that  effect,  though  the

petitioner  was  always  ready  and  willing  to

perform  his  part  of  the  contract  regarding

payment  of  the  balance  of  the  sale  price

after  deduction  of  the  amount  already

advanced by him.

4. It  is  also  the  plaintiff’s  case  that  only

when he found that a compound wall was being

constructed that he became suspicious of the

motive of the respondent No.1 who, however,

continued  to  assure  him  that  the  compound

wall  was  being  constructed  only  for  the

purpose  of  payment  of  tax  and  issuance  of

katha endorsement.  The respondent No.1 once

again  assured  the  petitioner  that  he  would

complete the sale as soon as he was able to

get the relevant record from the Corporation

and the original sale deed executed in his

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favour from the Deputy Commissioner for Under

Valuation.   

5.  However, the petitioner was surprised when he

was  served  with  a  legal  notice  dated  17th

November, 1995, indicating that the respondent

No.1 had cancelled the Agreement for Sale which

had  been  executed  in  his  favour  on  21st

February,  1995.   The  petitioner,  thereupon

filed the suit for specific performance of the

contract and for delivery of possession of the

suit  land  to  him,  which  was  disposed  of  by

granting the alternate relief of reimbursement

of the monies advanced, together with interest

at the rate of 9% per annum.  The Trial Court,

however, declined to order the execution of the

said agreement in respect of the property on

the  ground  that  third  party  rights  had

intervened,  as  the  respondent  No.3  purchased

the suit property without knowledge or notice

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of the prior sale agreement and was thus a bona

fide purchaser for value without notice and was

not affected by the provisions of Section 52 of

the  Transfer  of  Property  Act,  1882,  and  the

doctrine of lis pendens.

6. The matter was carried to the High Court by way

of RSA No.781 of 2004, wherein the submissions

advanced  before  the  Trial  Court  were

reiterated.  Agreeing with the findings of the

Trial Court, the High Court came to the finding

that  the  Agreement  for  Sale  between  the

respondent  No.1  and  the  petitioner  was  not

binding  on  the  respondent  No.3  since  the

respondent No.1 had no marketable title to the

suit property for the sale thereof in favour of

the petitioner.  The agreements entered into on

21st February, 1995 and on 18th May, 1995, could

not be enforced as he was not the owner of the

property and was not empowered to execute any

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Agreement for Sale in respect thereof and the

petitioner had not also sought the relief for

specific  performance  against  the  other

respondents.  The High Court also held that the

Trial  Court  had  rightly  found  that  the

petitioner had allegedly made payment in favour

of  the  Respondent  No.1  without  making  any

enquiry or verifying the records, and that he

had  done  so  at  his  own  risk,  as  the  said

respondent had no authority to execute the sale

agreement dated 18th May, 1995.   

7. The High Court held further that the Respondent

No.  3  had  prior  to  purchase  of  the  said

property  made  enquiries  and  ascertained  that

one  Rafi  Ahmed  the  lawful  Power  of  Attorney

holder of the 2nd respondent possessed the legal

competence  to  sell  the  suit  property  in  her

favour.   The High Court endorsed the view of

the Trial Court that the respondent No.3 was a

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bona  fide  purchaser  for  value  without  notice

after due enquiries made by her.   

8.On the basis of the above, the High Court held

that the Trial Court had rightly granted the

alternative  relief  of  repayment  of  the  sums

advanced while denying the substantial relief

for execution and registration of a sale deed

in respect of the suit land in favour of the

respondent.  The High Court, however, was not

unmindful  of  the  steep  rise  in  the  price  of

immovable  properties  in  urban  areas,  and,

accordingly, enhanced the rate of interest from

9% granted by the Trial Court to 18% upon the

amount  decreed  in  favour  of  the  petitioner.

The  appeal  was  partly  allowed  to  the  above

extent.

9.The said judgment and order of the High Court

has been challenged in these proceedings.

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10. On  behalf  of  the  petitioner,  it  has  been

contended  that  the  transaction  between  the

respondent No.2 and the respondent No.3 was hit

by Section 52 of the Transfer of Property Act,

1882, and the doctrine of lis pendens.  It was

urged that both the Trial Court as well as the

High Court had erred in law in disallowing the

petitioner’s  prayer  for  a  direction  upon  the

respondent  No.1  to  execute  the  sale  deed  in

respect  of  the  suit  land  and  to  make  over

possession thereof to the petitioner.  It was

also  contended  that  both  the  courts  below

appear  to  have  also  lost  sight  of  the

provisions  of  Section  19(b)  of  the  Specific

Relief Act, 1963 which provides as follows:- “19.  Relief  against  parties  and persons  claiming  under  them  by subsequent  title. –  Except  as otherwise provided by this Chapter, specific performance of a contract may be enforced against-  

(a) either party thereto;

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(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good  faith  and  without  notice  of the original contract;

(c) ………………..

(d) ………………..

(e) …………………”

11. In  this  regard  Ms.  Kiran  Suri,  learned

advocate,  who  appeared  for  the  petitioner,

firstly referred to the decision of this Court

in  Nivarti  Govind  Ingale  and  Ors.  Vs.

Revanagouda Bhimanagouda Patil, [1997 (1) SCC

475], wherein this Court had expressed the view

that  when  the  father  of  the  respondent  had

obtained  the  sale  deed  in  the  name  of  the

minor, he was also bound by the agreement of

reconveyance.   Having  received  the  money,  he

had not executed the sale deed.  Necessarily,

the  plaintiff  was  entitled  to  seek  specific

performance  and  any  subsequent  sale  would  be

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barred  by  the  doctrine  of  lis  pendens.

Therefore, the subsequent purchaser was bound

by the decree of specific performance and was

liable  to  reconvey  the  property  to  the

plaintiff.

12.Ms. Suri also referred to the decision of this

Court in Hardev Singh vs. Gurmail Singh (dead)

by LRs., [2007 (2) SCC 404], wherein this Court

dealt with the scope of Sections 41, 43 and 52

of  the  Transfer  of  Property  Act,  1882.   On

examining the said provisions, this Court held

that  the  requirement  of  Section  41  and  the

proviso thereto was not a requirement for the

applicability of Section 43 and hence even if a

subsequent purchaser was aware of the pending

litigation at the time of purchase of the suit

property,  it  would  disentitle  him  to  the

benefit  of  Section  43.   It  was  further  held

that  Section  52  did  not  operate  to  render  a

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sale deed executed during the pendency of the

suit void, as the said transaction was not hit

either  by  Section  52  of  the  Transfer  of

Property Act or Section 23 of the Contract Act,

1872.

13.In effect, the case made out on behalf of the

petitioner  is  that  the  subsequent  purchaser

steps into the shoes of the judgment-debtor and

is thus bound by any decree passed against the

judgment-debtor.   

14. The petitioner also appears to have relied on

an affidavit affirmed by the respondent No.1,

Abdul  Wajid,  since  deceased,  which  has  been

referred  to  as  a  “consent  agreement”  which

indicates  that  the  General  Power  of  Attorney

earlier notarized in favour of the respondent

No.1 on 3rd April, 1995, stood cancelled with

consent and a fresh agreement had been entered

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into by the respondent No.2 in favour of Rafi

Ahmed who, in his capacity as the holder of the

second  Power  of  Attorney  executed  by  the

respondent  No.2  in  his  favour  on  18th June,

1995, had sold the suit property in favour of

the  petitioner.  It  was  also  the  case  of  the

petitioner  that  since  the  aforesaid  document

had been disclosed for the first time in the

written statement filed by the respondent No.3,

Sufia Bi, on 28th October, 2003, the same did

not  inspire  confidence  and  the  courts  below

erred in dismissing the plaintiff’s claim for

specific  performance  of  the  agreement  on  the

erroneous finding that the petitioner was not

ready and willing to conclude the sale.

15.Ms. Suri submitted that the findings of both

the trial court and the High Court regarding

the petitioner’s readiness and willingness to

conclude the sale was contrary to the evidence

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adduced and was, therefore, liable to be set

aside and the suit was liable to be decreed for

specific performance in respect of suit land.

16. On  the  other  hand,  Mr.  S.N.  Bhat,  learned

advocate,  submitted  that  the  submissions

advanced  on  behalf  of  the  petitioner  was

without any foundation since the very basis of

the  petitioner’s  suit,  namely,  the  Agreement

for  Sale  executed  in  his  favour  by  the

respondent  No.  1  on  21st February,  1995,  was

invalid since on that date the respondent No.1

had no power or authority to execute the said

Agreement in respect of the suit property.  Mr.

Bhat  submitted  that  the  Power  of  Attorney,

which had been executed by respondent No.2 in

favour  of  the  respondent  No.1  on  3rd April,

1995, was revoked and hence the Agreement for

Sale executed in favour of the petitioner by

the  respondent  No.1  on  18th May,  1995  was

without  any  legal  authority.    Mr.  Bhat

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submitted  that  after  revocation  of  the  said

Power of Attorney in favour of the respondent

No.1, the respondent No.2 gave another General

Power of Attorney to Rafi Ahmed on 9th June,

1995 on the basis whereof the said Rafi Ahmed

executed  the  sale  deed  in  favour  of  the

respondent No.3, who claimed that he came to

know  about  the  Agreement  for  Sale  which  is

purported  to  have  been  executed  by  the

respondent No.1 in favour of the petitioner on

18th May, 1995.  

17. Mr.  Bhat  urged  that  on  both  counts  the

petitioner’s suit had been rightly dismissed.

Firstly, that the respondent No.1 was neither

the owner nor the person authorized to enter

into an Agreement for Sale with the petitioner

on 21st February, 1995.  The respondent No.3 had

been found to be a bonafide purchaser for the

value without notice, which did not affect his

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title to the suit property in any way.  Mr.

Bhat urged that whether the respondent No.3 had

knowledge  of  the  earlier  Agreement  for  Sale,

had been considered by the Trial Court as well

as the High Court and no fresh materials have

been  shown  before  this  Court,  which  would

warrant  interference  with  such  findings  of

facts.

18.Mr.  Bhat  urged  that  since  both  the  courts

below  had  on  a  detailed  analysis  of  the

evidence  on  record  found  that  the  respondent

No.3 was a bonafide purchaser for value without

notice, the Special Leave Petition was liable

to be dismissed.

19.Having  carefully  considered  the  submissions

made  on  behalf  of  the  parties,  we  are  not

inclined to reappraise the evidence once again

in  these  proceedings.   We  shall,  therefore,

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confined ourselves only to the legal aspects of

the Special Leave Petition.

20. On the merits of the case of the parties, it is

clear that when the first Agreement for Sale

was executed by respondent No.1 in favour of

the petitioner, he did not possess any power to

enter into the agreement with the petitioner.

For a brief period such power was given to him

but was again withdrawn.  Accordingly, on the

two dates which are relevant for our purpose,

namely, 21st February, 1995 and 18th May, 1995,

the  respondent  No.  1  had  no  legal  right  in

respect  of  the  suit  property.   Consequently,

the agreement executed by the respondent No.1

in favour of the petitioner on 21st February,

1995, had no legal sanction and the suit for

specific performance on the basis thereof was

incompetent.   

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21. Moreover,  as  far  as  the  respondent  No.3  is

concerned, the Agreement for Sale entered into

with him by Rafi Ahmed on the strength of the

General Power of Attorney issued in his favour

by the respondent No.2 on 8th June, 1995  was

valid  and  protected  by  the  provisions  of

Section 19(b) of the Specific Relief Act, 1963.

22.Furthermore,  it  is  well  established  that

granting  relief  of  specific  performance  is

purely discretionary and is dependendent on the

provisions of Section 20 of the aforesaid Act

and the Court under Section 21 thereof has the

power  to  award  compensation  for  breach  of

contract  instead  of  decreeing  the  suit  for

specific performance, as has been done in the

present case and, in our view, quite rightly.

23.Since we are in agreement with both the trial

Court  as  well  as  the  High  Court  that  the

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respondent  No.  1  had  no  legal  authority  to

enter  into  an  Agreement  for  Sale  with  the

petitioner  when  he  was  not  vested  with  the

authority to do so, no interference is called

for with the judgment impugned in the Special

Leave Petition, which is accordingly dismissed.

24.There will, however, be no order as to costs.

……………………………………………J. (ALTAMAS KABIR)

……………………………………………J. (MARKANDEY KATJU)

New Delhi Dated:11.09.2008

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