Nand Kishore vs Rameshwar Dayal

D.V. Sehgal, J.

An agreement to sell the house in dispute to the plaintiffappellant was executed by Rameshwar Dayal, dependent respondent No. 1 on 28th April, 1980. As per its terms, respondent No. 1 received Rs. 1,500/ at the time of execution of the agreement. He was to receive the balance consideration of Rs. 8,000/ at the time of execution and registration of the sale deed. The house was owned in equal shares by the respondent No. 1 and his brother Devi Parshad. The former undertook that he would bring the later on the date of execution and registration of the sale deed or in the alternative, he would secure the power of attorney of Devi Parshad to execute the sale deed himself. The sale deed was to be executed on or before 28th April, 1981. The agreement to sell has been proved on the record as Exhibit P1/A. Its execution is not in dispute.

The appellant brought a suit for specific performance of the agreement, Exhibit P1/A alleging that he was ready and willing to perform his part of the contract. Respondent No. 1 and his brother Devi Parshad, in breach of the same, sold the house to Shrimati Lachho Devi, defendantrespondent No. 2 vide sale deeds dated 9th April, 1981 and 22nd May, 1981. The suit was, however, dismissed by the learned trial Court vide its judgment and decree dated 1st October, 1983. On an appeal filed by the appellant, the learned Additional District Judge, Karnal, vide judgment and decree dated 22nd May, 1985 held that Rameshwar Dayal, respondent No. 1 sold his 1/2 share in the house in dispute to respondent No. 2 vide sale deed dated 9th April, 1981, Exhibit P/29 and Devi Parshad, brother of respondent No. 1 sold the other 1/2 share owned by him in the house to respondent No. 2 vide sale deed dated 22nd May, 1981, Exhibit P/25. The agreement to sell, Exhibit P1/A in favor of the appellant was to be performed on or before 28th April, 1981. It is thus clear that respondent No. 1 by selling the house in dispute to respondent No. 2 repudiated the performance of the agreement, Exhibit P1/A. Therefore, the appellant was absolved from his duty to establish that he was ready and willing to perform his part of the contract. It was, however, held that respondent No. 2 is a bona fide purchaser for valuable consideration, her right is, therefore, protected. As such the appeal was dismissed.

Thus in the present appeal, the only question that survives for consideration is whether respondent No. 2 is a bonafide purchaser for consideration without notice of the agreement to sell, Exhibit P/1 in favour of the appellant. Reference to the evidence makes it clear that the finding of the courts below that respondent No. 2 had no notice of the agreement to sell, Exhibit P1/A and she purchased the house by payment of consideration of Rs. 2,000/ bonafide is unexceptional. No doubt the appellant while appearing as his own witness stated that two days before the agreement to sell, Exhibit P1/A was executed, he and respondent No. 1 went to respondent No. 2. Respondent No. 1 told Respondent No. 2 that he was selling the house to the appellant for Rs. 9,500/ and that in case she was prepared to pay Rs. 2,000/ more, respondent No. 1 was ready to sell the house in her favour. According to him, respondent No. 2 refused to purchase the house. This part of the statement of the appellant has, however, been rightly disbelieved by the Courts below for the reason that no averment to this effect has been made by him in his pleadings. This story appears to be an afterthought.

On the other hand, respondent No. 2 appearing as her own witness, has made a categoric statement that she was not aware of the agreement Exhibit P1/A entered into between the appellant and respondent No. 1. She further stated that on one of them ever told her about the said agreement. Even Rameshwar Dayal, respondent No. 1 admitted in the witness box that he never told respondent No. 2 about the agreement, Exhibit P1/A. No suggestion was put to respondent No. 2 in cross examination that she had knowledge of the agreement, Exhibit P1/A. In fact, she was not even cross examined on this aspect of the matter.

The law on this aspect is well established. The vendee who claims to be a bonafide purchaser for valuable consideration and without notice of the earlier agreement to sell, discharges the initial onus placed on him by leading a negative evidence which would consist of his own statement denying knowledge of the prior agreement to sell. The burden then shifts to the plaintiff to show that the vendee has the notice of the earlier agreement. It is clear that the respondent No. 2 did discharge the initial onus placed on her by making a categoric statement to which reference has been made above. The appellant, on the other hand, could into lead any cogent evidence to establish that she had notice of the agreement to sell, Exhibit P1/A. I have, therefore, no hesitation to affirm the concurrent findings recorded by the Courts below that respondent No. 2 was a bonafide purchaser of the house in dispute for valuable consideration without notice of the agreement to sell. Exhibit P1/A. In such a situation, her right of ownership is to be protected and the appellant cannot enforce the agreement to sell, Exhibit P1/A against her.

Learned counsel for the appellant has, however, rightly asserted that he is entitled to the decree for recovery of the earnest money from respondent No. 1. It is to be noted that according to the finding recorded, breach of the contract has been committed by respondent No. 1. He is, therefore, liable to refund the amount of Rs. 1,500/ which he had received from the appellant at the time of execution of the agreement, Exhibit P1/A. It is the just relief in the context of the circumstances of the case which the appellant should get.

I, therefore, partly allow this appeal and decree the suit of the plaintiff against respondent No. 1 only for recovery of Rs. 1,500/ with costs throughout.