2002 (7) TMI 833 - SC - Indian Laws

Supreme Court sets aside High Court judgment, restores contract for sale - Appellants awarded costs

The Supreme Court allowed the appeals, setting aside the High Court's judgment and restoring the judgments of the First Additional District Judge, ... Recovery of possession - specific performance of the contract for sale - agricultural activities - ready and willing - Applicability of Section 41 of the Transfer of Property Act - Section 19 of the Specific Relief Act - Word 'material alteration' - HELD THAT:- After discussing the merit of the question of applicability of Section 41 of the Transfer of Property Act, the High Court observed ' On the findings of fact finally settled by the courts below, concedes Mr. Murlidhar also, vendees cannot invoke the provisions of Section 41 of the Transfer of Property Act. Protection of the said provision for saving the transfer of the land in suit in their favour therefore cannot be availed of by the vendees on the facts finally settled by the courts below Section 41 is not attracted.' Regarding Section 19 of the Specific Relief Act, the High Court observed that the said section has no application to the case at all. The resultant position after discussion of the substantial question of law framed was: 'the result of the above discussion therefore is that this appeal cannot succeed on the points raised in its support in the memo of appeal'. The observations of the first appellate Court quoted by the High Court in the impugned judgment were mere observations which, as the judgment shows, was not taken as a substantial matter against the credibility and acceptability of the case of the plaintiffs in Civil Suit No. 58 of 69. As noted earlier, the trial Court and the first appellate Court had concurrently accepted the case of the plaintiffs in C.S. No. 58 of 69 and had rejected the case of the plaintiffs in C.S. No. 58 of 71. The Courts in exercise of the discretionary jurisdiction vested in them under Section 20 of the Specific Relief Act had decreed the suit for specific performance of the agreement of sale. The High Court in the impugned judgment has not discussed any legality by the courts below in taking the decision. It appears that the High Court has decided the second appeal on a question neither taken in the memorandum of appeal nor taken in that form before the courts below and has upset the concurrent decisions of the courts on a finding recorded by it. The approach of the High Court in the second appeal was clearly against the law and spirit of Section 100 of the Code of Civil Procedure. Further, the view taken by the High Court that the interpolation said to have been made by the covenanters in the agreement of sale does not stand scrutiny under law. As observed earlier such alteration, assuming that it was made subsequently, did not bring about any change in the validity and enforceability of the agreement of sale. We are constrained to observe that the finding recorded by the High Court appears to be based on surmise. Therefore, the judgment is clearly unsustainable. Accordingly, the appeals are allowed with costs. Issues Involved:1. Specific performance of the contract for sale.2. Declaration of rights over the land.3. Material alteration in the agreement of sale.4. Applicability of Section 41 of the Transfer of Property Act.5. Applicability of Section 19 of the Specific Relief Act.Issue-wise Detailed Analysis:1. Specific Performance of the Contract for Sale:The appellants filed suit No. 58/1969 seeking specific performance of an agreement for sale dated 19.4.1969. They alleged that the defendants had agreed to sell the suit land for Rs. 14,000, of which Rs. 12,000 was paid upfront. Despite reminders, the defendants did not execute the sale deed. The trial court decreed the suit, directing the defendants to execute the sale deed upon receiving the balance amount of Rs. 2,000. This decision was upheld by the First Additional District Judge, Mathura.2. Declaration of Rights Over the Land:Respondents 1 and 2 filed suit No. 58/1971 seeking a declaration of their rights over the land, claiming they purchased it on 7.5.1969 for Rs. 15,000 and took possession immediately. They argued that the appellants' agreement was forged. The trial court dismissed this suit, a decision confirmed by the First Additional District Judge.3. Material Alteration in the Agreement of Sale:The High Court found that the agreement for sale (Ext. 12) had been materially altered by introducing new marginal witnesses, which was deemed a material alteration that voided the agreement. This finding was based on observations that the original witnesses' names were overwritten. The High Court concluded that this alteration prejudiced the vendors, rendering the agreement void ab initio.4. Applicability of Section 41 of the Transfer of Property Act:The High Court held that Section 41 of the Transfer of Property Act, which protects transfers made by an ostensible owner, did not apply to the case. The vendees could not invoke this provision because the facts did not support its applicability.5. Applicability of Section 19 of the Specific Relief Act:The High Court also found that Section 19 of the Specific Relief Act, which deals with specific performance of contracts involving third parties, was not applicable. The High Court concluded that the appeal could not succeed on this point.Conclusion:The Supreme Court found that the High Court erred in setting aside the concurrent findings of the lower courts. The alleged material alteration did not affect the validity and enforceability of the agreement. The High Court's decision was based on surmise and did not align with the principles of law. Consequently, the Supreme Court allowed the appeals, set aside the High Court's judgment, and restored the judgments of the First Additional District Judge, Mathura, thereby decreeing suit No. 58/1969 and dismissing suit No. 58/1971. The appellants were awarded costs and a hearing fee of Rs. 20,000.