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CASE NO.: Appeal (civil) 4574  of  1998

PETITIONER: TEK  CHAND & ORS.

       Vs.

RESPONDENT: DEEP CHAND & ORS.

DATE OF JUDGMENT:       23/02/2001

BENCH: U.C. Banerjee & K.G. Balakrishnan

JUDGMENT:

L...I...T.......T.......T.......T.......T.......T.......T..J K.G. BALAKRISHNAN, J.

   Defendants 5 to 8 in a suit for specific performance are the appellants herein.  The first respondent-plaintiff, Deep Chand  filed  a  suit for specific performance  against  the second  respondent,  Kare,  who was the owner  of  the  suit property  measuring  26  Kanals  and 2  Marlas  situated  in Village Prithla of Faridabad District.  The first respondent agreed to purchase the land from Kare for a consideration of Rs.   35,000/-  per acre and an agreement was  entered  into between   these  two  parties  on  8.12.1986.    The   first respondent  paid an amount of Rs.8,000/- to Kare on the date of  the  agreement and Kare had to execute the sale-deed  by 25th  May 1987, but this date was further extended upto 15th June,  1987.  However, Kare did not execute the sale-deed as promised  by  him.   Therefore,  the  first  respondent  was constrained to file a suit for specific performance.

   The  second respondent, Kare, who was the sole defendant in  the  suit, filed a written statement contending that  he was  not the real owner of the property and that it belonged to  his children.  He also alleged that he had mortgaged the property  in  favour  of one Gopal.  The  first  respondent- plaintiff,  thereupon  impleaded  the children  of  Kare  as defendants  2 to 4 in the suit and they are respondents 3 to 5  herein.   The first respondent- plaintiff later  came  to know  that  the  children  of   Kare  had  effected  certain alienation  in favour of the appellants herein.   Therefore, the  appellants  were impleaded as defendants 5 to 8 in  the suit.

   The first defendant-Kare, though admitted the agreement, alleged  that  he never intended to execute a  sale-deed  in favour  of  the  first   respondent-plaintiff,  but  only  a mortgage.   He  denied  the thumb impression  found  on  the agreement for sale.  Defendants 2 to 4, who are the children of  Kare, also filed a written statement alleging that there was a Family Settlement whereby the properties were given to them  and that after the Family Settlement, they had filed a suit  for  declaration  of  title in  respect  of  the  suit property  and  a  decree  was  passed  in  their  favour  on

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1.10.1987.   They admitted having executed subsequently four sale  deeds  in favour of defendants 5 to 8 in respect of  a portion of the suit property.

   The  appellants, who were defendants 5 to 8 in the suit, claimed  title  over  the property.  They  alleged  that  on 20.10.1986  they had entered into an agreement with Kare for the  sale  of the property for Rs.32,000/- per acre.   Kare, however,  did not execute the sale deed, but transferred the property  in favour of his children and when the  appellants insisted for enforcement of the said agreement, the children of  Kare honoured the same by executing the four sale  deeds and  handed  over  the  possession  of  the  property.   The appellants  contended  that  the first  respondent  was  not entitled to the decree for specific relief.  The trial court dismissed  the  suit  on the ground that by  virtue  of  the decree  dated 1.10.1987 passed in favour of defendants 2  to 4, they had become the owners of the property and so long as that  decree  was  not challenged by the  first  respondent- plaintiff  in  any proceedings, he was not entitled to  seek specific  relief  of the contract entered into by  him  with Kare.   However, the trial court allowed the recovery of the advance  amount  paid by the first respondent.   Thereafter, the  first respondent filed an appeal against the decree and judgment  of the trial court.  The appellate court  reversed the  decree and held that the agreement entered into by  the first  respondent with Kare was a true and genuine document; that  the Family Settlement as also the decree passed by the civil  court  in favour of defendants 2 to 4 were  collusive transactions;   and  that defendants 2 to 4 had no right  to alienate  the  property.   It  was further  held  that  such alienation  in  favour  of defendants 5 to 8 had  been  made after    the   filing   of    the    suit   by   the   first respondent-plaintiff and they are hit by the doctrine of lis pendens.   Aggrieved by the judgment of the appellate court, the  present  appellants  filed a Second Appeal,  which  was dismissed  by  the  High  Court  of  Punjab  &  Haryana   at Chandigarh.   It is against that judgment of the High Court, the present appeal is filed.

   We heard learned counsel for the appellants, Mrs.  Madhu Tewatia and learned senior counsel for the first respondent, Shri M.L.  Verma.  Counsel for the appellants contended that the agreement entered into by the first respondent-Plaintiff with  Kare  was on 8.12.1986 and this was subsequent to  the agreement  entered  into by the appellants with Kare,  which was  on  20.10.1986.   Therefore, it was  contended  by  the counsel  for  the  appellants  that Kare  had  executed  the subsequent  agreement  with the  first  respondent-plaintiff with  a  view to defeat the interest of the appellants.   It was  urged that Kare had executed the Family Settlement Deed in favour of his children to see that the appellants did not get  the benefit of the agreement entered into by them  with Kare.   The  counsel for the appellants contended that  when defendants  2 to 4 executed the sale- deeds in favour of the appellants, they acquired a valid title over the property on the  basis  of  the  decree passed by  the  civil  court  on 1.10.1987  and, therefore, all the alienations are valid and the appellants are bonafide purchasers for value.

   Learned  counsel for the first respondent, on the  other hand, contended that the agreement entered into by the first respondent  with  Kare was a true and genuine  document  and Kare  had  executed  the  Family Settlement  to  defeat  the

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interests of the first respondent.  It was further submitted that  the decree obtained by defendants 2 to 4 against  Kare was  a collusive decree.  The first respondent disputed  the genuineness  of the agreement entered into between Kare  and the present appellants.

   It  has been found by all the courts that the  agreement entered  into  by the first respondent with Kare was a  true and  genuine  document  and the first  respondent  had  paid Rs.8,000/-  as  advance.  It was also proved that  Kare  had committed a breach of the contract and failed to execute the sale-deed in favour of the first respondent.

   It  is  pertinent  to note that Kare executed  a  Family Settlement  in favour of his children, defendants 2 to 4 and immediately  thereafter, defendants 2 to 4 filed a suit  for declaration of the title over the property.  Kare, who was a defendant  in  the  suit, did not contest the suit  and  the decree  was  passed in favour of defendants 2 to 4.   It  is clearly  a  collusive decree obtained by defendants 2 to  4. In  respect  of  the  suit property,  four  sale-deeds  were executed  by  defendants 2 to 4.  7 Kanals and 4  Marlas  of property  was  sold  in  favour  of appellants  1  to  3  by defendants  2 and 3 and an extent of 15 Kanals and 6  Marlas was  transferred to appellants 1 to 3 by defendants 2 to  4. Both  these  documents were executed on the same  day,  i.e. 4.9.1989.   The  total  consideration   for  the  sale  deed executed in favour of appellants 1 to 3 was Rs.76,500/-, but an  amount  of  Rs.60,000/- was retained by the  vendees  as mortgage  amount  payable  to   the  mortgagee.   Two  other documents  were  also  executed by defendants 2 to  4.   One document  is  in  favour of the  fourth  appellant,  Jawahar Singh,  in  respect of 3 Kanals and 12 Marlas of land for  a sum of Rs.18,000/-.  The total purchase amount in respect of all  these sale deeds comes to Rs.1,32,300/-.  Out of  this, an  amount of Rs.60,000/- was retained as mortgage money and the  balance amount of Rs.72,311/- was paid to defendants  2 to  4.   The  execution of the Family  Settlement  Deed  and subsequent  suit  for  declaration  of  title  followed   by execution  of  the  sale-deeds on the basis  of  the  decree obtained by them are clearly collusive transactions intended to defeat the interest of the first respondent.

   The  counsel  for  the  appellants  contended  that  the appellants  had entered into an agreement with Kare as early as  on  20.10.1986  for  purchase of  suit  property  for  a consideration  of  Rs.32,000/- per acre, but Kare, in  turn, defeated  their interest and transferred the property to his children.   It is important to note that the appellants  had not taken any steps to enforce the agreement entered into by them with Kare and they did not adduce any evidence to prove that  they  had  taken  any steps  to  enforce  the  alleged agreement.  The two courts have rightly held that the family Settlement,  the  decree passed by the civil court  and  the various  sale deeds executed by defendants 2 to 4 in  favour of  the appellants are collusive transactions brought  about to  defeat  the  interest  of  the  first  respondent.   The respondents  2  to  4  had no previous  agreement  with  the appellants for sale of this property, even then they readily executed the sale deeds in their favour.

   In  view of these factual circumstances, we do not  find any  merit  in this appeal.  The counsel for the  appellants@@                JJJJJJJJJJJJ

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lastly  contended  that the appellants are in possession  of the  suit  property  and they had  discharged  the  mortgage executed  by Kare in favour of one Mohan Lal.  It was prayed that the amount of Rs.60,000/- paid by the appellants to the mortgagee   may  be  directed  to  be  paid  by  the   first respondent.

   In  the result, we direct the first respondent-plaintiff to  deposit  the  balance consideration of  Rs.   1,06,170/- before  the  executing Court and the appellants  herein  are directed  to  execute  a sale-deed in favour  of  the  first respondent-plaintiff,  Deep  Chand, within a period  of  two weeks   thereafter.   On  their   failure  to  execute   the sale-deed,  the  first  respondent- plaintiff  would  be  at liberty  to  get the sale deed executed through court.   The sale consideration to be deposited by the plaintiff shall be disbursed  to  these appellants as directed in the  judgment and  decree  of  the  first   Appellate  Court.   If   these appellants  produce a registered release-deed in respect  of the   mortgage  in  favour  of   Mohan  Lal,   entire   sale consideration  be  disbursed  to  the  appellants.   If  the appellants fail to produce a release deed within a period of 2  weeks  of  the  date  of the deposit  of  the  amount  by plaintiff,  Deep chand, he would be allowed to get refund of Rs.   60,000/-  and  would  be  at  liberty  to  redeem  the mortgage.

   The  appeal stands disposed of.  The cost of this appeal shall be borne by the parties.@@          JJJJJJJJJJJJJJJJJJJJJ

( U.C. Banerjee )

(K.G. Balakrishnan) @@ IIIIIIIIIIIIIIIIIIII

February 23, 2001