2002 (4) TMI 992 - SC - Indian Laws

Supreme Court overturns Division Bench decision, restores Single Judge's ruling based on crucial evidence

The Supreme Court held that the Division Bench erred in overturning the Single Judge's decision, which considered crucial evidence of a prior agreement ... - Issues Involved:1. Specific performance of the agreement of sale.2. Bona fide purchaser for value without notice.3. Validity of the application before the Sub-Registrar.4. Prior agreement between the defendant and vendee.Issue-wise Detailed Analysis:1. Specific Performance of the Agreement of Sale:The plaintiff, Sarwan Singh, claimed that he entered into an agreement to sell with Kankar Singh on 3.3.1971 for land measuring 110 Kanal, 13 marlas for a consideration of Rs. 1,98,312/-, and paid Rs. 61,100/- as advance. Despite this, Kankar Singh sold the land to Zorawar Singh on 17.3.1971. Sarwan Singh sought a decree for specific performance of the agreement or, alternatively, damages of Rs. 1,22,200/-.2. Bona Fide Purchaser for Value Without Notice:Defendants Zorawar Singh and Devinder Singh claimed they were bona fide purchasers for value without notice of the prior agreement. They argued that Zorawar Singh was already in possession of the land as a tenant and had entered into an agreement with Kankar Singh on 31.12.1970, paying Rs. 38,000/- as earnest money. The trial court decreed the suit in favor of Sarwan Singh, but the High Court's Single Judge dismissed it, granting a decree for refund of the earnest amount. The Division Bench later restored the trial court's decree, but the Supreme Court remanded the matter back to the Division Bench, which again decreed in favor of Sarwan Singh.3. Validity of the Application Before the Sub-Registrar:Sarwan Singh claimed he filed an application before the Sub-Registrar on 17.3.1971, informing about his prior agreement. The Sub-Registrar allegedly endorsed this application, but the defendants disputed its validity, arguing it was not produced in a timely manner and lacked corroborative witnesses like the deed writer. The Single Judge found the application suspicious due to its late production and lack of official record. The Division Bench, however, disagreed, leading to the Supreme Court's involvement.4. Prior Agreement Between the Defendant and Vendee:Zorawar Singh presented an agreement dated 31.12.1970, predating Sarwan Singh's agreement. This agreement was supported by a receipt and witness testimony, suggesting a bona fide purchase. The Division Bench failed to consider this document, which the Supreme Court found crucial in supporting Zorawar Singh's claim of being a bona fide purchaser.Conclusion:The Supreme Court found the Division Bench erred in setting aside the Single Judge's findings, which were based on a thorough appreciation of evidence, including the prior agreement dated 31.12.1970. The alleged application before the Sub-Registrar was deemed unreliable due to its late production and lack of corroboration. Consequently, the Supreme Court restored the Single Judge's judgment, dismissing Sarwan Singh's claim for specific performance and recognizing the defendants as bona fide purchasers. The appeal was allowed, and the Division Bench's order was set aside.