Rajat S/O Nemichand Maru Through Constituted General Power Of Attorney Shri Nemichand Maru & Ors. vs Kapil & Ors.

This is an appeal by the defendant Nos.4 and 5, who were ex-parte before the trial court challenging the judgment and decree dated 29.01.2024 passed in Regular Civil Suit-A 1180000/2014.

The respondent Nos.1 and 2 were plaintiffs and respondent Nos.3, 4 and 5 were the defendant Nos.1, 2 and 3 before the trial court. An agreement to sell was executed on 10.04.2006 by the respondent Nos. 3 to 5 (they shall be referred as defendant nos. 1 to 3 hereinafter) in favour of respondent Nos. 1 and 2 (who shall be referred as plaintiffs hereinafter) regarding plot No.20/2, Baikunth Dhaam Colony, Indore comprising survey No.761 and 762. The terms of the agreement were that for a total area of 10000 Sq.Fts., the plaintiffs would pay a total sale consideration of Rs.2,03,21,000/-. It was recorded in the agreement that advance payment of Rs.21.21 Lacs was received at the time of execution of the agreement and the first installment out of balance consideration to the tune of Rs.19 lacs was to be paid on or before 15.05.2006 and rest of the sale consideration of Rs.92 lacs was to be paid by 20.08.2006.

It was also mentioned in the agreement to sell (Ex.P-1) that the suit property was encumbered with a loan of Rs.70 lacs from SBI and it was an stipulation in the agreement that out of the above mentioned sale consideration, the defendant Nos.1 to 3 (owners of the property) shall repay the loan and get the property redeemed for completing the sale infavour of plaintiffs. It was also an stipulation in the agreement that plaintiffs could directly deposit the entire outstanding amount of Rs.70 lacs to the bank in order to facilitate the completion of sale.

Significantly, the plaintiffs and defendant Nos.1 to 3 agreed in terms of para 6 of the agreement that the procedure of due diligence of publication of a public notice is waived. In terms of para 12 of the agreement, it was mentioned that if the balance sale consideration is not paid as per scheduled time line by 15.05.2006 and 20.08.2006, the agreement to sell shall automatically stand cancelled and the advance would stand forfeited. The plaintiffs three days prior to the date of first installment of Rs.90 lacs issued a letter on 12.05.2006 to the defendant Nos.1 to 3 demanding a copy of the sale deed dated 03.11.2004 (Ex.P-5) and copy of resolution of Shri Ishar Alloys and Steel Limited showing the purpose of sale of the plot in four parts to four companies. This entailed a prolonged communication between the plaintiffs (prospective purchasers) and defendant Nos.1 to 3 (the sellers).

The defendant Nos.1 to 3 in their replies stated that all this demand of documents etc. is being raised only to avoid payment as the plaintiffs failed in arrangement of funds and are not able to make payment. The plaintiffs though denied this assertion of the defendant Nos.1 to 3, however, they did not offer payment.

Ultimately, on 21.11.2008, the suit was filed by the plaintiffs (respondent Nos.1 and 2) against the defendant Nos.1 to 3. The present appellants were not party to the suit originally. The appellants were not aware of the dispute between the plaintiffs and the defendants No.1 to 3.

The original owners i.e. defendant Nos.1 to 3 entered into an agreement to sell with the present appellants in the year of 2008 thereby agreeing for sale of the property situated at house No.20/2 Baikunth Dhaam Colony, Indore in survey No.761 and 762 admeasuring 10000 sq.fts. for sale consideration of Rs.2,27,000,00/-. The original owner never disclosed to the present appellants about the existence of any earlier agreement with the plaintiffs nor about pendency of the dispute before the Court. Pursuant to said agreement to sell, the original owners (defendant Nos.1 to 3) executed registered sale deed on 29.03.2010. The present appellants thereafter migrated to USA respectively w.e.f. 09.08.2011 and 01.09.2011.

The appellants were not aware about the pendency of civil suit, thus, they were in a bonafide belief that there is no dispute regarding property they have purchased, thus they migrated to USA.

However, in the suit filed by the respondent Nos.1 and 2/plaintiffs, out of original owners the defendant Nos.1 and 3 became ex-parte and defendant No.2 filed his written statement. As regards the present appellants, the plaintiffs filed an application under Order 1 Rule 10 of the Code of Civil Procedure for impleading the present appellants and also their lease holders to whom the suit property was leased out by the appellants as party respondents, however, the trial court dismissed the said application vide order dated 15.11.2021

The order dated 15.11.2021 of the trial court was challenged by the respondent Nos.1 and 2/plaintiffs before this Court by filing miscellaneous petition i.e. MP No.4409/2021. The said miscellaneous petition was allowed by this Court vide order dated 14.09.2023 and the appellants as well as their lessees were directed to be impleaded as defendants in the suit. Pursuant to the order passed by this Court, the present appellants and their lessees were added as defendant Nos. 4 to 7 in the civil suit, however, without any amendment in the pleadings.

After impleadment of the present appellants, notices were issued and as the appellants were settled in USA, the notice was deemed to be served on his father in the month of October, 2023.

The case was then listed before the trial court on 27.10.2023, on which date one counsel Mr. B.M. Bishnoi appeared for the appellants on memo of appearance and prayed for time to file Vakaalatnaama and written statement, thus, the case was listed on 03.11.2023. On 03.11.2023, the said counsel again appeared and again sought time for the same reason. Thus, the case was adjourned for 06.11.2023 and on 06.11.2023, the said counsel did not appear. Thus, the court proceeded ex-parte against the present appellants and defendant Nos.6 and 7. The next date was accordingly fixed for 23.11.2023 for final arguments.

As the proceedings would reflect, out of 7 defendants, defendant No.1, 3 and 4 to 7 were proceeded ex-parte and only respondent No.1 filed his written statement.

On 23.11.2023, the plaintiffs (respondent Nos.1 and 2) instead of advancing their final arguments filed an application under Order 6 Rule 17 of CPC thereby not only amending pleadings but also adding reliefs of declaration of sale deed executed in favour of appellants to be declared null and void and consequently, lease deed executed by the appellants in favour of respondent Nos.6 and 7 also as null and void.

The trial court vide order dated 23.11.2023 allowed the above said amendment in plaint, however, no notice of this amendment was issued to any of the six ex-parte defendants in the proceedings and after allowing the amendment final arguments were heard and on 29.01.2024, ex-parte judgment and decree was passed thereby sale deed executed in favour of the present appellants by the defendant Nos.1 to 3 (respondent Nos.3 to 5 herein) was declared as null and void and the said defendants were directed to execute sale deed in favour of the plaintiffs.

The appellants in the present appeal have pleaded that the father of the appellant No.1 and father-in-law of appellant No.2 namely Nemichand Maru received a WhatsApp message from defendant Rajkumar Madan on 01.02.2024 thereby informing him about the judgment passed in the civil suit thereafter on 05/06-02-2026 their father Nemichand Maru made a WhatsApp call to the appellant No.1 thereby informing him about the impugned judgment decree.

As the appellants live permanently in USA as permanent residents, they executed power-of-attorney on 05.02.2024 at San Diego, CA, USA thereby appointing Nemichand Maru, father of appellant No.1 as general power of attorney, the same was received by him on 11.02.2024 through courier. On 12.02.2024 on the instructions of Nemichand Maru, the entire record of the civil suit was obtained by Advocate, Shri Athar Ali and certified copy of the impugned judgment and decree was obtained on 16.02.2024, thus, this appeal came to be filed.

The contention of the learned senior counsel for the appellants is that they are being bonafide purchasers can raise all defences which were available to the original defendants under the law. He submits that the trial court committed an error in holding that plaintiffs were ready and willing to perform their part of contract without appreciating that the plaintiffs sent a letter on 12.05.2006 (Ex.P-8) just 3 days before the deadline of 15.06.2006 for the payment of first installment. It has further been stated that the correspondence between the plaintiffs and the original defendants would show that in fact the plaintiffs were not having readiness to perform their part of contract. It has further been argued that the sale-deed dated 29.03.2010 executed in favour of the appellants was never brought on record, however, trial court declared the same as void under Section 52 of the Transfer of Property Act contrary to Sections 32 and 34 of The Specific Relief Act, 1963.

It has further been contended that the trial court erred in considering the amended Section 16 of the Specific Relief Act in para 18 of the judgment which is not retrospective as the amendment was effected in the year 2018 and the transaction in the present case related to year 2006 onwards. It has also been argued that the trial court committed error in law in decreeing the suit for specific performance in spite of holding in para 14 to 17 of the judgment that there is a defect in title of the suit property to the extent of 2000 Sq. Fts. without appreciating Section 17 of the Specific Relief Act, which in fact, renders the contract unenforceable in case of defect in title.

The counsel for the appellant further argued that the trial court erred in proceeding ex-parte against the appellants even after extensive substantive amendment carried out by the plaintiffs/respondent Nos.1 and 2 in para 6 (a) and 7(c) to 7(e), 11(c),(d),(e) in the plaint thereby specifically adding pleadings and substantive reliefs against the present appellants. He submits that first of all the present appellants were proceeded ex-parte before carrying out amendment and second of all the very order of proceeding ex-parte against the appellant is not sustainable in the eyes of law.

The learned senior counsel submits that for proceeding ex-parte against the present appellants it was reasoned that notice of the case was stated to be served on the appellants through their father on 21.10.2023. He submits that on 21.10.2023, the appellants were not in India as they had already settled permanently in USA in the year 2011 itself. Thus, in view of the provisions of Order 5 of the Code of Civil Procedure, service on the father of the appellants was not proper, as he was not residing with the appellants and also even if service found to be correct still after proceeding ex-parte extensive amendment was made in the pleadings and reliefs. Thus, the appellants were required to be issued a fresh notice after substantial amendment in the pleadings. He thus submits that on any count i.e. merits as well as on the ground of proceedings ex-parte in breach of provisions of law, the impugned judgment and decree are not sustainable.

Learned counsel for the appellant in support of his submissions has placed reliance on the judgments passed by the Hon'ble Apex Court in the following cases:-

The learned counsel for the respondent Nos.1 and 2/plaintiffs while controverting the submissions of the learned senior counsel for the appellants submits that the appellants are not the bonafide purchasers. The agreement to sell with plaintiffs was executed on 10.04.2006 and for its specific performance the suit was instituted on 21.11.2008 and sale-deed was executed in favour of the present appellants on 29.03.2010 i.e. during pendency of the civil suit, thus, they cannot be said to be the bonafide purchasers of the suit property, thus, they do not have any independent rights and they could have argued whatever was available to the original defendants. The trial court after considering the submissions of the original defendants have decided the suits on merits, thus, the absence of the appellant even if found improper then also it will not affect the impugned judgment and decree. Thus, he submits that the suit deserves to be dismissed.

He further submits that the present appeal has been filed by the appellants through their constituted general power of attorney - Shri Nemichand Maru. The notice of the suit was served upon him on 21.10.2023 and counsel appeared on their behalf on 27.10.2023 and 03.11.2023, however, he did not appear any further, thus the trial court has correctly proceeded ex-parte against them. In support of his submissions, he places reliance on the judgments of this Court in W.P. No.1469/2013 and W.P. No.6584/2013.

He further submits that the appellants being purchasers during pendency of the suit cannot be treated to be bonafide purchasers, thus, they have no independent rights and for this proposition, he has placed reliance on the judgment of the Hon'ble Apex Court passed in case of Alka Shrirang Chavan and another Vs. Hemchandra RAjaram Bhonsale and others, SLC (C) No.27660/2025, Maharajdeen Vs. President, Shri Ramkrishan Ashram and others, MANU/MP/1311/2017 (WP No.1469/2013) and Sachiv Krishi Upaj Mandi Samiti Sironj, Dist. Vidisha Vs. Ramkaran Singh Raghuvanshi, (WP No.6584/2013), order dated 29.04.2025 (M.P. High Court, Gwalior Benhch). He thus submits that the appeal being bereft of merits deserves to be dismissed.

The respondent Nos.6 and 7 have also appeared through counsel and have supported the appeal by repeating the submissions advanced by the learned counsel for the appellants.

Heard the learned counsel for the parties and perused the record.

There are essentially three issues involved in the present appeal, which are as under:-

The sale-deed in favour of the present appellant was executed by the original owners during pendency of the civil suit on 29.03.2010. In view of the same, the plaintiffs/respondent Nos.1 and 2 filed an application on 15.11.2021 under Order 1 Rule 10 of CPC for impleading them as defendants in the civil suit. Not only this, the appellants, in turn, had executed lease-deed in favour of respondent Nos.6 and 7, thus, they were also sought to be impleaded by way of same application by the plaintiffs, however, the trial court rejected the application vide its order dated 15.11.2021. Thus, the plaintiffs filed MP No.4409/2021 which was allowed by this Court vide order dated 14.09.2023. Consequently, on 10.10.2023, the present appellants were impleaded as defendant Nos.4 and 5 and the respondent Nos.6 and 7 were impleaded as defendant Nos.6 and 7. The trial court while impleading the above said defendants also directed the plaintiffs to pay process fees for issuance of notice to the newly impleaded defendants and the case was directed to be listed on 18.10.2023. On 18.10.2023, the Court recorded in its order that notice returned with a note that "पार्टी एड नहीं है". Thus, the Court directed for fresh process fees through SPS summons and the matter was fixed for 27.10.2023.

Thus, the process server observed in his note that the defendants were not found on the given address and their father informed him that the noticees are in foreign country. This endorsement of the process server was treated by the trial court as proper service. Order 5 Rule 15 of the Code of Civil Procedure provides the circumstances under which service of notice can be effected on an adult member of the defendant's family. Order 5 Rule 15 of CPC reads as under:-

It is, thus, clear that the requirement of law is that when the notice is sought to be served at the residence of the defendants there must be no likelihood of his being found at the resident within a reasonable time and he has no agent empowered to accept service then the service may be effected on any adult member of the family whether male or female who is residing with him. Thus, the requirement is that the defendant should be living at the said address and with him the person upon him service is effected must also be residing. Here, in the present case, the endorsement itself says that the appellants were living abroad. The arguments of the learned counsel for the respondent Nos.1 and 2 that even present appeal is filed by their father, the same person upon whom notice was served is of no avail for the reason that even if it is seen that the father of appellant No.1 is power of attorney holder of both the appellants then also the date of service is very important. The service was effected on 21.10.2023 whereas the father of the appellant was constituted as general power of attorney on 05.02.2024 executed by the appellant in San Diego, CA, USA and the same was received by him on 11.02.2024, thus, on the date when summon was served upon the father of the appellant No.1 he was not a general power of attorney holder of the appellant.

This Court in the case of Sumitrabai (supra) has held in para 8 as under:-

Again in the case of Moh. Yaqoob (supra), this Court while considering the similar question has held in para 13 to 16 and 19 as under:-

It is thus clear that no proper notice was served upon the present appellants pursuant to their impleadment as defendants Nos.4 and 5 in the civil suit.

As regards the appearance of counsel on behalf of appellant, Mr. B.M. Bishnoi, para 2 of the application filed by the appellants under Order 9 Rule 13 of CPC (annexure A/8-A) would be relevant to see in which the appellants have stated before the trial court itself that they had never instructed the said counsel to appear and he has appeared without their knowledge. It is very suspicious that how a counsel appeared on two dates i.e. 27.10.2023 and 03.11.2023 (which is wrongly mentioned in the order-sheets as 03.10.2023) and on 06.11.2023 he did not turn up and thus, court proceeded ex-parte. Thus, within a span of 9 days the Court in a hurried manner proceeded ex-parte against the present appellant. The said counsel appeared on memo of appearance and never filed Vakaalatnaama on behalf of present appellants.

It is also significant to note at this stage that except defendant No.2, all other 6 respondents were proceeded ex-parte in the case before the trial court. In view of the above analysis, this Court is of the considered view that the trial court proceeded in a hasty manner without considering the fact that first of all notice has not been served upon the present appellants/defendant Nos.4 and 5 in accordance with the provisions of Order 5 Rule 15 of CPC in particular and secondly, the counsel who appeared on memo of appearance disappeared without filing Vakalatnama which should have raised an alarm in the mind of the trial court, however, trial court in a casual manner proceeded ex-parte in the matter.

Analysis on the question No.(ii) whether after amendment in the plaint, fresh notices were required to be issued even to those defendants against whom the court had earlier proceeded ex-parte:-

Whether after amendment in the plaint, defendants against whom the trial court had proceeded ex-parte were required to be served or not, it has to be seen in the light of the fact that what was the nature of the amendment in the plaint. The plaint was amended by the respondent No.1 and 2/plaintiffs so as to insert pleadings regarding sale-deeds executed by the original owners/defendant Nos.1 to 3 in favour of the present appellants and by the present appellants, lease deed in favour of the respondent Nos.6 and 7. Not only pleadings but relief of declaring those deeds as null and void was also inserted by way of amendment, as such, by no stretch of imagination it can be said to be a formal amendment it was a substantive amendment seeking relief directly against the present appellants. This has to be seen also in view of the fact that out of the three original defendants, two were already ex-parte and only Jagdish - the defendant No.2 had filed his written statement.

This Court in the case of Mahesh Singh (supra) while considering similar facts has held in para 9 as under:-

3 8 . As such, after permitting substantive amendment in the pleadings and substantive addition in relief against the defendants against whom court was proceeding ex-parte, it was incumbent upon the trial court to issue fresh notice even to those defendants against whom it had proceeded ex-parte. This Court in view of the judgment in the case of Mahesh Singh (supra) as well as judgments passed by the Hon'ble Apex Court and by the Division Bench of Patna High Court while considering this issue in the case of Chairman, M.S. Banga Hindustan Lever Ltd. v. Heera Agencies, 2018 (2) MPLJ, 43 : 2017 SCC OnLine MP 1966 has held in para 22 to 29 as under:-

As regards the reliance placed by the learned counsel for the respondents on the judgment in the case of Sachiv, Krushi Upaj Mandi (supra), the facts of the said case were different. In the said case, the court found that though stay on the proceedings under Section 33 (c)(2) of the Industrial Dispute Act was obtained by the petitioner, however, the petition was dismissed by a bi-party order after it was duly argued by the learned counsel for the petitioner. As such, petitioner was aware of the fact that his petition has been dismissed, thus, the interim order has also come to an end. In these facts, the Court found that fresh notice was not necessary, however, the facts of the present case are totally different. Similarly, in the case of Maharajudeen (supra), the court specifically held in para 23 as under:-

As such, cause of action was not changed, however, the cause of action in the case was regarding possession. In the present case, it is not about only cause of action but also the relief sought and the relief sought is of cancellation of sale-deed executed in favour of appellant by way of amendment. This is the relief sought directly against the present appellant as such the facts of the said case are also distinguishable.

In the considered view of this Court, the law as laid down by this Court in the case of Mahesh Singh (supra), would apply squarely. As such, once a substantive amendment in the pleading was made it is incumbent upon the trial court to issue fresh notices to all those defendants against whom it has earlier proceeded ex-parte.

Question No. (iii) whether the plaintiffs/respondent Nos.1 and 2 were able to demonstrate their readiness for performing their part of contract in view of the fact that the dispute relates to a period before the amendment in provisions of The Specific Reliefs Act and whether this question can be raised by the appellants:-

This issue has to be considered in view of the fact that first two issues have been decided against the respondent Nos.1 and 2/plaintiff. Consideration has also to be made in view of the fact that out of total 7 defendants, 6 were proceeded ex-parte. Now, the case of the defendants since beginning i.e. from the date of issuance of first notice on 12.05.2006 is that the said notice was issued by the plaintiffs so as to avoid payment of instalment of Rs.19 Lacs on 15.05.2006, thus, since beginning their case was that the plaintiffs were not ready to pay and it is not only willingness but also readiness which has to be demonstrate.

The trial court found that the readiness has to be shown only on demand by the court or by the defendants, however, it completely ignored the requirement under the law and the evidence which was brought on record which imputed that the respondent Nos.1 and 2/plaintiffs were never ready to perform their part of contract. The Trial Court has reproduced the amended section 16 of the Specific Relief Act however the said amended was carried out in the year of 2018 whereas the transaction is of the period before that. As such the case has to be looked into as per the unamended provisions of section 16 of the Specific Relief Act.

The reference made to the judgment of the Hon'ble Apex Court in the case of Bassavraj Vs. Padmadevi AIR 2023 SC 282, is also misplaced for the reason that in the said case the defendants never disputed the availability of funds, there was no cross examination on that point in the said case.

This is settled position of law that the court cannot grant specific performance to a plaintiff who has not met requirements of clause (a), (b) & (c) of section 16 of the Specific Relief Act. The Hon'ble Apex Court in the case of Ram Awadh (supra) has held in para 6 as under:-

As to the fact that whether present appellants can raise this issue. In the case of Azhar Sultana (supra), the Hon'ble Apex Court in para 30 has held as under:-

As such, it is not only the original vendor but also a subsequent purchaser who would be entitled to raise a contention that the plaintiff was not ready and willing to perform his part of contract. In the present case, even the original vendor in his reply to the notices sent by the plaintiff stated thus. As such, it is a case where the Court should have considered the aspect of readiness of the plaintiffs also which it has completely ignored. In view of the settled position of law even the subsequent purchaser is also entitled to raise all the pleas.

The parties have raised several other arguments on merits, however, this Court refrains from dwelling any further on those issues, including the issue of readiness, for the reason that in view of the decisions on first two issues, this Court is inclined to remand the case back to the trial court for fresh adjudication after permitting the appellants to file written statement and after recording their evidence thereon. As such the appeal stands allowed in terms of the above findings. The matter is remanded back to the trial court for fresh adjudication after granting an opportunity to the present appellants to file written statement and lead evidence, the plaintiffs can also lead evidence on the issues of bonafide purchaser and thereafter fresh judgment and decree be passed by the trial court.

Before parting with the case it is thought apposite to make it clear that in view of the remand of the matter as per above analysis, this court has not decided issues raised on merits of the suit in as much as whether the readiness was demonstrated or not and whether the present appellants were the bonafide purchaser or not and other similar issues. The trial court has to decide the same in accordance with law.

It is also taken note of that although an application under Order 9 Rule 13 has been filed by the present appellant but the same was pending consideration, thus, the issue regarding service has also been decided in the present appeal as in view of the settled position of law simultaneous proceedings of Order 9 Rule 13 and the first appeal under Section 96 can be maintained.