ORDER
V.V.S. Rao, J.
1. This appeal is preferred by the sixth defendant in O.S.No. 1436 of 1981 on the file of the Court of I Additional Judge, City Civil Court, Hyderabad. By judgment and decree impugned in the appeal, the Trial Court directed Respondents 2 to 4 herein and appellant herein to execute and register sale deed in respect of plaint schedule property in favour of the first respondent herein. The appellant is a subsequent purchaser of the property under registered sale deed from Ramesh Chand Khanna, the predecessor of Respondents 2 to 4. In this appeal for the sake of convenience, the parties shall be referred to as they are arrayed in the suit.
2. The plaintiff filed the suit for specific performance of the agreement of sale, dated 4.12.1978 in respect of property bearing Municipal No. 4-1-1 admeasuring 220 square yards situated at King Koti, Hyderabad. Her allegations in the plaint in brief are as follows. The first defendant Ramesh Chand Khanna represented in December 1978 that he purchased the suit schedule plot with a room under registered sale deed from Private Estate of His Exalted Highness the Nizam VII and wanted to dispose of the same. Accordingly he executed suit agreement of sale in favour of the plaintiff agreeing to sell the property at Rs. 325 per square yard. The plaintiff paid advance amount of Rs. 30,000/- (Rupees thirty thousand only) through a cheque drawn on Allahabad Bank, Hyderabad branch and the first defendant acknowledged the amount under a separate receipt. The vendor promised to get the - sale deed executed and registered in favour of the plaintiff but he dodged the issue on one pretext or the other. The plaintiff has been offering the balance sale consideration of Rs. 41,500/- (Rupees forty one thousand five hundred only) for execution of the sale deed and he has been ready and willing to perform her part of the contract. The plaintiff later learnt that permission from Urban Land Ceiling authorities is not required, that the first defendant was desperately in need of money and therefore he executed sale agreement, but after taking money refused to sell the property. Having come to know this, the plaintiff got issued a telegraphic legal notice through her lawyer. The plaintiff is ready to deposit balance consideration and further amount towards stamps and registration charges to fulfil her part of the obligation and formalities under the sale agreement. Hence, she prayed for specific performance of agreement of sale and for a direction to the first defendant to execute the sale deed.
3. The suit was filed against the vendor Ramesh Chand Khanna. He filed a written statement admitting the execution of agreement of sale and receipt of an amount of Rs. 30,000/- (Rupees thirty thousand only) towards sale money. He, however, opposed the suit alleging that the plaintiff purchased the property knowing fully well that there was litigation in relation to the property agreed to be purchased and therefore she developed cold feet and was not agreeable to purchase the plot subject to litigation and that the plaintiff was not always ready and willing to perform her part of the contract. The plaintiff's representative was informed that he should either complete the transaction or terminate the agreement and receive the advance amount paid, for which the plaintiffs representative agreed to terminate the contract by mutual consent and receive back the amount advanced by the plaintiff. Subsequently, the vendor sold the land to third party and informed the plaintiff's representative to take back the amount of Rs. 30,000/-. However, on coming to know of the increase in price, the plaintiff developed second thoughts with a mala fide intention and therefore refused to accept repayment of Rs. 30,000/-. The telegraphic notice was not followed by confirmatory notice and during the period from the date of agreement, the plaintiff never demanded for the completion of the contract and she was not ready to pay the balance sale consideration. Hence, the plaintiff is not entitled for the relief as prayed for.
4. During the pendency of the suit, Ramesh Chand Khanna died and his wife, son and daughter (Respondents 2 to 4 herein) were brought on record in 1983. They did not file any separate written statements. Be that as it is, the plaintiff filed I.A.No. 1031 of 1985 for impleading Defendants 5 to 7, which was ordered on 17.11.1987. The subsequent purchaser of the property was impleaded as Defendant No. 6 and her husband was impleaded as Defendant No. 5.
5. In the written statement, Defendants 5 and 6 alleged that sixth defendant purchased the suit schedule property from deceased Ramesh Chand Khanna for valuable consideration under registered sale deed dated 31.10.1981, that the purchaser had no knowledge about the agreement of sale between the plaintiff and the deceased first defendant, and that since the date of purchase they are in exclusive possession of the suit schedule property. They further alleged that the total area purchased by the sixth defendant is 217 square yards, that sale agreement in favour of the plaintiff is invalid and unenforceable, that the suit is barred by limitation and that the plaintiff is not entitled for the relief of specific performance of agreement. They also further alleged that there was a longstanding dispute regarding the title and ownership of the suit schedule property pending in the Civil Courts, that the suit schedule property was subject-matter of O.S.No. 216 of 1973 on the file of the Court of HI Assistant Judge, City Civil Court, Hyderabad, filed by deceased Ramesh Chand Khanna against Bahadur Hussain. When the said suit was decreed, Bahadur Hussain preferred an appeal being A.S. No. 151 of 1977 on the file of the Court of the Additional Chief Judge, Hyderabad, which was allowed on 30.12.1978. It was also alleged that though the suit filed by Ramesh Chand Khanna was dismissed by the Appellate Court, sixth defendant intervened and settled the disputes and thereafter the property was sold to sixth defendant for valuable sale consideration.
6. The plaintiff filed a lengthy rejoinder denying the averments made in the written statement of first defendant as well as the written statement filed by the Defendants 5 and 6 alleging that Ramesh Chand Khanna conspired with sixth respondent and her husband as well as Bahadur Hussain and on a single day two sale transactions were brought into existence so as to deprive the plaintiff of her right for specific performance of suit contract of sale. In the rejoinder, the improbabilities of sixth defendant purchasing the property without notice of prior agreement with plaintiff, were pointed out elaborately. The allegations that plaintiff terminated the agreement, that the sixth defendant purchased the property in good faith and that she is a bona fide purchaser and that the plaintiff has no interest to purchase the property are denied in the rejoinder.
7. The Trial Court framed the following issues and additional issues for trial.
(1) Whether the plaintiff is entitled for specific performance of agreement in respect of suit schedule property?
(2) Whether the suit is barred by limitation?
(3) To what relief?
Additional Issues:
(1) Whether the Defendant No. 6 is a bona fide purchaser of the suit property for value without notice of suit agreement of sale in favour of the plaintiff?
(2) Whether the suit agreement of sale is not binding on the defendant including the Defendant Nos. 5 and 6?
8. The plaintiff examined her husband as P.W.1 and two attesters of the agreement of sale as P.Ws.2 and 3. Ex.A.1 to A.12 were marked on her behalf. Ex.A.1 is agreement of sale dated 4.12.1978 and Ex.A.2 is the receipt given by deceased first defendant acknowledging Rs. 30,000/-Exs.A.6 and A.12 are copies of the sale deeds in favour of sixth defendant executed by Bahadur Hussain and deceased first defendant respectively. On behalf of sixth defendant, her husband, fifth defendant was examined as D.W.1 and marked Ex.B.1 sale deed dated 31.10.1981 executed by Ramesh Chand Khanna in favour of sixth defendant. The Trial Court decreed the suit directing the legal representatives of Ramesh Chand Khanna - Defendants 2 to 4; and sixth defendant to execute registered sale deed in favour of the plaintiff and put her in possession of the property within six weeks from the date of the judgment after receiving balance sale consideration, failing which, the plaintiff was given liberty to get the sale deed registered through the Court and obtain delivery of possession.
9. The findings of the Trial Court are as follows: (1) The suit agreement of sale is true, valid and binding on first defendant and his legal representatives and also on sixth defendant; (2) The case of the plaintiff that she has been always ready and willing to perform her part of the contract is proved and the case of the defendants that plaintiff terminated the contract and she was not ready and willing to perform her part of the contract is improbable. For this conclusion, the Trial Court believed the evidence of P.W.1 as well as Exs.A.1 to A.3 as corroborated by P.Ws.2 and 3; (3) The purchase by the sixth defendant subsequently is not a bona fide and that she is not a purchaser in good faith. The sale deeds i.e., Exs.A.12 and B.1 are brought into existence by collusion among Ramesh Chand Khanna, Bahadur Hussain and the husband of sixth defendant. The sale deed by Ramesh Chand Khanna in favour of the sixth defendant for a sum of Rs. 48,000/- and sale deed Ex.A.12 by Bahadur Hussain in favour of the sixth defendant for a sum of Rs. 45,000/- would lead to an inference that there is collusion between first defendant and D.W.1; and (4) the fourth defendant has not properly discharged the burden of proof to show that she is a bona fide purchaser for a valuable consideration and she subsequently purchased the suit schedule property without knowledge of the prior agreement by the first defendant in favour of the plaintiff.
10. In this appeal, Sri Vedula Venkata Ramana, learned Counsel for the appellant/ sixth defendant made elaborate submissions on questions of fact as well as questions of law in support of the appeal. The summary of his submissions is as follows. Ex.A.1 is not signed by the plaintiff and therefore it is not a valid agreement as per Section 54 of the Transfer of Property Act, 1882. The fact that plaintiff is not a signatory to Ex.A.1 signifies non-compliance with the requirement of Section 16(c) of the Specific Relief Act, 1963 (the Act, for brevity) with regard to the readiness and willingness of plaintiff. In the absence of any concluded contract as per Sections 7, 8 and 9 of the Indian Contract Act, 1872 (for short, the Contract Act), the plaintiff is not entitled to seek specific performance of the contract of sale. Till the issue of Ex.A.3 notice, just before expiry of three years, which is the first time demand, there is no evidence about plaintiff being ready and willing to perform her part of contract and therefore Section 16(c) of the Act is not complied with. The non-examination of the plaintiff on the sole ground that she is pardanashin lady cannot satisfy the requirements in a suit for specific performance with regard to Section 16(c) of the Act. Even if Ex.A.1 is lawful, the relief being within the discretion of the Court, the Court below erred in not considering Section 20 of the Act. The finding of the lower Court that sixth defendant/appellant is not a bona fide purchaser is not correct. Burden of establishing notice of prior sale is on the plaintiff and not on the subsequent purchaser. There is no pleading or rebuttal evidence lead by the plaintiff that sixth defendant is not a bona fide purchaser. The plaintiff failed to discharge the burden and therefore under Section 19(b) of the Act, the Court ought to have refused to enforce specific performance of Ex.A.1 in the absence of any assertion by the plaintiff in the amended pleadings that sixth defendant is not a bona fide purchaser. In support of these submissions, the learned Counsel placed reliance on Kirtarath Rai v. Sripat Rai, AIR 1928 All. 307, Bagiriti v. Laxmibai, AIR 1953 Hyd. 121, Veeramalai v. Thadikara, : AIR1968Mad383 , Vomisetti Papa Rao v. J. Venkataramana, 1970 (2) An.WR 280, Durga Prasad v. Lilawati, : AIR1972All396 , D.V. Seshaiah v D. Venkayya, : AIR1974AP193 , K. Subbayyamma v. S. Chimpirayya, 1976 (1) An.WR 438, Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son, 1987 Supp. SCC 340, N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, : AIR1996SC116 , K.S. Vidyanadam v. Vairavan, : AIR1997SC1751 , Jagan Nath v. Jagdish Rai, : AIR1998SC2028 , Sardar Amarjeet Singh v. Nandu Bai, : 1998(5)ALD697 (DB), Ram Awadh v. Achhaibar Dubey, 2000 (1) Supreme 319, Ram Niwas v. Bano, : AIR2000SC2921 , M.A. Jabbar v. L.I.C. House Building Employees Society, : 2000(2)ALD2 , Veerayee Ammal v. Seeni Ammal, : AIR2001SC2920 , Zorawar Singh v. Sarwan Singh, : AIR2002SC1711 , Nirmala Anand v. Advent Corporation (P) Ltd., : [2002]SUPP2SCR706 and Manjunath Anandappa v. Tammanasa, : [2003]2SCR1068 .
11. The learned Counsel for plaintiff/ first respondent submits that non-execution of Ex.A.1 agreement of sale by the plaintiff is of no consequence as the deceased first defendant in his written statement admitted the existence of agreement of sale between the plaintiff and the first defendant and therefore there is a concluded contract for sale of immovable property under Section 54 of the Transfer of Property Act read with Sections 7, 8 and 9 of the Contract Act. Further the agreement of sale executed by the first defendant in favour of the plaintiff, even if it does not contain the signature, which is a curable mistake and plaintiff being in custody of Ex.A.1 could have always subscribed her signature but as there is no dispute with regard to execution of Ex.A.1 by Ramesh Chand Khanna, there was no such necessity. Either in the pleadings or in the evidence, no such objection was ever raised and therefore it would be impermissible for the appellant to raise the ground before this Court. Secondly, the plaintiff pleaded and proved that she was always ready and willing to perform her part of the contract and that the evidence of P.W.1 is supported and corroborated by Ex.A.3, written statement of deceased first defendant as well as the conduct of the plaintiff, who took prompt steps to amend the plaint to direct the legal representatives of first defendant and sixth defendant to execute the sale deed. He brought to the notice of this Court that to that effect plaint was amended by reason of the orders of the Trial Court in I.A. No. 1048 of 1990 dated 19.11.1990. Nextly, he would submit that sixth defendant has not produced any evidence to show that she is a subsequent bona fide purchaser of the suit schedule property under Ex.B.1. The learned Counsel would point out that there are circumstances to show that sixth defendant had notice of the earlier sale by first defendant to plaintiff. The learned Counsel would point out that in Ex.A.1, sale consideration for 220 square yards is mentioned as Rs. 71,500/- but the sale consideration in Ex.B1, sale deed, for 217 square yards is shown as Rs. 48,000/-. There is no reason as to why the first defendant had to sell the same property to a lesser amount. This would show that sixth defendant was aware of the prior agreement between the plaintiff and first defendant and therefore a lesser price was negotiated. When Ex.A.4, notice, was published in newspapers, sixth defendant failed to immediately get impleaded in the suit and that in the written statement and in her evidence, there is no attempt to show that sixth defendant made enquiries before purchasing the property under Ex.B.1.
12. In the background of pleadings, the oral and documentary evidence, that was led and brought on record during the trial and the rival submissions before this Court would give raise to the following points for consideration.
(1) Whether plaintiff is entitled to seek enforcement of specific performance of Ex.A.1, agreement of sale?
(2) Whether sixth defendant is bona fide purchaser of the suit schedule property having paid her consideration in good faith and without notice of the original contract? and
(3) Whether the discretion of this Court out not to be exercised in favour of the plaintiff for specific performance of Ex.A.1.
The first point for consideration
13. In every suit for specific performance of agreement of sale of immovable property - needless to point out; the Court has to essentially considered two questions: (i) Whether the suit agreement of sale alleged is true and valid and binding between the vendor and vendee; and (ii) Whether the plaintiff/vendor as has complied with the provisions of Section 16(c) of the Act by pleading and proving that the vendee has performed or has always been ready and willing to perform his part of the contract. These two questions would be considered in seriatum.
14. The plaintiffs case is simple. Ramesh Chand Khanna impressed upon her that he purchased suit schedule property from the Secretary of HEH Nizam, that he executed Ex.A.1, agreement of sale, on 4.12.1978 for a sale consideration at Rs. 325/-per square yard and that she paid an amount of Rs. 30,000/- by way of cheque. When she came to know that the vendor is avoiding the execution of the sale on the ground that permission of authorities under Urban Land (Ceiling and Regulation) Act, 1976 is required, she got issued Ex.A.3, telegraphic notice expressing her willingness to perform her contract and demanding execution of sale deed in vain and therefore the suit. The plaint's case was proved by the oral evidence of P.W.1 as well as Exs.A.1, A.2 and A.3. That deceased first defendant executed agreement of sale in favour of plaintiff was also proved by P.Ws.2 and 3, who are the attestors of Ex.A.1. Further, in the written statement filed by Ramesh Chand Khanna, the execution of the agreement is admitted without any demur though the relief claimed by the plaintiff was opposed. In that view of the matter, the question under consideration need not detain this Court further, notwithstanding the feeble submission of the learned Counsel for the appellant that the agreement of sale is forged and not true. Indeed as rightly contended by the learned Counsel for the plaintiff/first respondent either in the written statement of the first defendant or the written statement of the sixth defendant, the plea of forgery was not raised nor any evidence was let in by the defendants. A suggestion was not even made to P.W.1, the husband of the plaintiff, who deposed on her behalf by reason of special Power of Attorney, Ex.A.8. In the absence of any specific plea of forgery, no amount of evidence is useful and submission of the learned Counsel for the appellant cannot be countenanced. Therefore, this Court holds execution of the agreement by the deceased Ramesh Chand Khanna in the presence of P.Ws.2 and 3 and the receipt of amount of Rs. 30,000/- by way of cheque is duly proved by plaintiff.
15. Whether Ex.A.1 is unlawful and illegal not binding on the parties for non-execution of the same by plaintiff is an incidental question raised for the first time before this Court by the appellant. To appreciate this, it is necessary to extract Sections 7, 8 and 9 of the Contract Act as well as Section 54 of the Transfer of Property Act, 1882, which read as under:
Contract Act
7, Acceptance must be absolute
In order to convert a proposal into a promise the acceptance must-
(1) be absolute and unqualified.
(2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance.
8. Acceptance by performing conditions, or receiving consideration Performance of the conditions of a proposal, for the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
9. Promises, express and implied
Insofar as the proposal or acceptance of any promise is made in words, the promise is said to be express. Insofar as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.
Transfer of Property Act
54. 'Sale' defined: 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made: Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale: A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.
16. Sections 7 and 8 of the Contract Act deal with acceptance of the proposal by one party to the contract made by the other party. An acceptance must be absolute and unqualified and must be express or implied. If one party to the contract accepts the proposal and performs reciprocal promise, the acceptance is complete. For instance, in the case of sale of immovable property, the vendor will propose the sale of certain extent of land or house for a consideration subject to certain conditions. If the purchaser accepts the proposals and performs the reciprocal promise of paying consideration or part of the consideration, the acceptance is absolute and it cannot be said that the purchaser has not accepted the proposal. Further Section 9 of the Contract Act postulates that promises by either of the party that is promise and reciprocal promise can be either express or implied. However, the law does not require the proposal or acceptance always to be in writing. If it is in writing it is certainly said to be express. If the proposal for acceptance is otherwise than in writing, the existence of binding contract cannot be ruled out. Therefore, a contract to come into existence does not require that party should reduce the terms of the contract into writing and accept reciprocal promise by signing the contract in writing.
17. Section 54 of the Transfer of Property Act defines sale as transfer of ownership in exchange for price paid or promised or part paid or part promised. A contract for sale of immovable property is a contract that a sale shall take place on terms settled between the parties. It is no doubt true that for a contract of sale to come into existence necessarily there should be seller and buyer and such parties should agree and settle terms of the contract. Though the buyer and seller are required to settle the terms of the contract, there is no necessity that in the event of the contract being reduced to writing, seller (reciprocal promisor) should execute the document or subscribe his/her signature in execution of the document. The question whether the terms of the contract of sale of immovable property are binding on the parties or not is a matter of evidence. In a given case, the execution by the buyer and seller, as the case may be, is itself presumed to be the proof of acceptance of terms of the contract unless and otherwise is proved. Similarly, even in the absence of buyer's or seller's signature to the contract of sale of immovable property, if both the parties agree that such contract was in existence subject to the terms agreed, no further evidence would be required nor the law facilitates rejection of the prayer for enforcement of such contract. It is always the matter of interpretation of the covenants of the contract when a dispute arises as to whether such terms are binding on the contracting parties. The very definition of sale, if the agreement is for a sale of immovable property for consideration, the law presumes the existence of the contract and indeed a binding contract can always be presumed from the contemporaneous needs and circumstances at or about the time of coming into existence of contract. Therefore, the submission of the learned Counsel for the appellant that there is no concluded contract between the plaintiff and the first defendant is misconceived. Of course, it is always a different question whether by reason of non-execution of Ex.A.1 by the plaintiff herself, she can be said to be always ready and willing to perform her part of the contract and such question has to be considered independently.
18. Whether the plaintiff properly pleaded and proved that she is always ready and willing to perform her part of the contract? Section 16 of the Act is to the effect that specific performance of a contract cannot be enforced, inter alia, in favour of a person who fails to aver and prove that he/she has performed or has always been ready and willing to perform the essential terms of the contract, which are to be performed other than the terms of the performance of which has been prevented or waived by the defendant. As per the explanation to Section 16(c) of the Act for the purpose of said provision, it shall be not essential for the plaintiff to actually tender to the when so directed by Court. This provision has been the subject-matter of interpretation in a number of cases arising under the Specific Relief Act, 1877 as well as the present Act. It has been consistently held that mere assertion in the plaint that plaintiff is ready and willing to perform the contract is not sufficient. The plaintiff must not only aver and also prove that he/she has been always ready and willing to perform part of the contract. Mere use of the words in a mechanical manner would not be sufficient. There must be acceptable cogent and convincing evidence before the Court, before compliance with the provision is recorded in favour of the plaintiff.
19. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao (supra), the Supreme Court laid down as under:
Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the Court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.
20. In Sardar Amarjeet Singh v. Nandu Bai (supra), a Division Bench of this Court concluded that the averment that the plaintiff is ready and willing to perform his part of the contract must be supported by satisfactory evidence and that at all material times plaintiff should be ready to perform the contract. The relevant observations are as follows.
As already noticed, there is no iota of explanation coming from the side of the appellant-plaintiff as to why he kept quiet without taking any steps or without making known his readiness and willingness to the other party. Mere averment in the plaint or pre-suit notice that he was at all material times ready and willing to perform his part of the contract is not sufficient. But such averment should be supported by satisfactory evidence. That is utterly lacking in this case. As indicated by the Supreme Court, though time may not be the essence in a contract of sale of immovable property, the performance of obligations cannot be postponed for an unreasonably long length of time unless there is a satisfactory explanation for such delay.
21. Keeping the principle laid down in the above two decisions, issue may be considered. P.W.1 is the lone witness on behalf of the plaintiff. P.W.1 is facilitator of Ex.A.1 but he is not a party. By reason of Ex.A.8 special Power of Attorney, he gave evidence on behalf of plaintiff. It is the plaintiff, who gave the cheque for an amount of Rs. 30,000/- drawn on Allahabad Bank, Hyderabad as per Ex.A.2 receipt. The first defendant agreed to sell the suit schedule property in favour of Azhar Sultana, wife of Ashif Ali Khan and as per the agreement is under obligation to pay the balance of consideration to the vendor. There is a privity of contract between the plaintiff and the first defendant. Readiness and willingness of P.W.1 is of no significance. In Paragraphs 3, 6 and 7, the plaintiff allege that she has always been ready to fulfil her part of obligation. P.W. 1 in evidence stated that he is always ready and willing to perform his part of the contract but never even whispered that his wife is ready and willing to perform her part of the contract. Be that as it is, no statement is made by P.W.1 that the balance amount has been kept ready or kept in deposit of any bank. No further corroboration is coming forth. Though in Ex.A.3, telegraphic notice, the plaintiff informed the first defendant that she is ready with balance consideration, she did not come to the box to depose in support of the same and in the absence of any proof that amount was kept under by plaintiff herself, as rightly contended by the learned Counsel for the appellant, the legal requirement under Section 16(c) of the Act must be held as not complied with. In that context, the non-execution of Ex.A.1 by the plaintiff assumes importance. Ex.A.1 is not signed by the plaintiff and this is certainly significant and therefore it is doubtful whether the plaintiff had been always ready and willing to perform her part of the contract. Except making an averment in the plaint and Ex.A.3 notice as well as deposition of P.W.1, no evidence is forthcoming. As held by the Supreme Court in N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao (supra), the amount of consideration which has to be paid to the defendant must of necessity be proved to be available. Such proof was not produced before the Court and therefore it must be held that the plaintiff was not always ready and willing to perform her part of the contract. The fact that Ex.A.3 notice issued long after Ex.A.1 on 19.11.1981 would not be of any substantial assistance to the plaintiff in this regard.
22. Insofar as the case of the defendants is concerned, as per the written statement of Ramesh Chand Khanna plaintiff purchased the property knowing fully well there is a litigation between himself and Bahadur Hussain; she developed cold feet due to litigation and did not evince any interest to complete the sale transaction by paying the balance of sale consideration. Therefore, she agreed to terminate the contract and take back the amount of Rs. 30,000/- paid under Ex.A.2. Though no witness deposed about these allegations and no documentary evidence is produced, there is an admission about those allegations in the rejoinder filed on behalf of the plaintiff on 1.8.1991. In Paragraph 9 of the rejoinder of the plaintiff, it is stated as under:
The averments in Para 4 of the plaint that there was a long standing dispute regarding the ownership of the plaint schedule property and was pending in Civil Courts in O.S. No. 216 of 1973 on the file of III Assistant Judge, City Civil Court, Hyderabad between the 1st defendant and one Mr. Bahadur Hussain, that there was an appeal A.S. No. 151 of 1977, that the appeal was allowed on 30.12.1978 are not at all germane and relevant to the present suit.
Neither the first defendant nor Defendants 5 and 6 (who by mistake in their written statement referred themselves as Defendants 4 and 5 respectively) have produced any records relating to alleged O.S. No. 216 of 1973 or that of A.S.No. 151 of 1977.
23. Defendants 5 and 6 in their written statement made the averments in relation to the suit and appeal between deceased first defendant and Bahadur Hussain, which was not specifically denied in the above paragraphs. Therefore, it is reasonable to draw an inference that by the date of Ex.A.1 dated 4.12.1978, a suit between first defendant and Bahadur Hussain in relation to same property was pending and it was only on 30.12.1978 that the matter was decided in favour of Bahadur Hussain by the Appellate Court and that is the reason why the plaintiff did not evince interest in completing the sale transaction by obtaining proper sale deed. Further, the submission of the learned Counsel for the plaintiff that the deceased first defendant already complied to urban land ceiling authorities under Section 27 would also prove that as on the date of agreement of sale, Section 27 of the Urban Land Ceiling Act was very much on the statute book but only subsequently by reason of the judgment of the Supreme Court in Shim Singh v. Union of India, : AIR1981SC234 , the same was declared ultra vires. The theory developed by the plaintiff that Ramesh Chand Khanna misled her with regard to opening permission under the Urban Land Ceiling Act and therefore the sale deed could not be obtained earlier has to be disbelieved. At the time of execution of notice, permission for sale of house or of vacant land within ceiling area was required and therefore the deceased first defendant acted correctly in informing the plaintiff and also incorporating covenant to that effect. On this score, plaintiff cannot gain any advantage to support her case that she has been ready and willing to perform her part of the contract. Therefore, this Court holds that the plaintiff was not ready and willing to perform her part of the contract and that she issued a notice Ex.A.3 belatedly by which time Ramesh Chand Khanna sold away the property to sixth defendant under Ex.B.1 sale deed. The plaintiff therefore is not entitled for enforcement of specific performance of contract of sale under Ex.A.1.
The second point for consideration
24. The plan appended to Ex.A.12 sale deed, which is executed by Bahadur Hussain in favour of the sixth defendant and the plan appended to Ex.B.1 sale deed executed by Ramesh Chand Khanna in favour of sixth defendant would show that Bahadur Hussain and Ramesh Chand Khanna owned property admeasuring 195 square yards and 217 square yards respectively in King Koti, Hyderabad. Both the sale deeds were executed and registered on 31.10.1981. The property of Ramesh Chand Khanna bearing No. 3-5-783 (old No. 4-1-1) is situated towards north of the property of Bahadur Hussain bearing No. 3-5-783/24 (old No. 4-1-1). So to say, the northern boundary of the property demised under Ex.B.1 is a property demised Ex.A.12 and both the properties are adjacent to each other. Both were assigned the same assessment number as No. 4-1-1 and presumably due to the settlement between Bahadur Hussain and deceased first defendant, they got their respective shares in the property. It is in the evidence of D.W.1, that prior to execution of Ex.A.12 and Ex.B.1 by the respective vendors, he came to know about Bahadur Hussain that he settled the dispute between Bahadur Hussain and deceased first defendant and purchased the property. The sale consideration paid under Ex.A.12 is Rs. 45,000/- for 195 square yards whereas the consideration paid under Ex.B.1 is Rs. 48,000/- for 217 square yards. The value per square yard is almost same. In the rejoinder, a case was made out by the plaintiff that when the sale consideration under Ex.A.1 dated 4.12.1978 was about Rs. 71,500/-, deceased first defendant sold the property for a lesser sum of Rs. 48,000/-and therefore the sale is not bona fide and that Bahadur Hussain, first defendant and D.W.1 colluded to defeat the rights of the plaintiff. Indeed plaintiff did not take any steps to amend the plaint to that effect in spite of the fact that the plaintiff amended the plaint twice for the purpose of bringing legal representatives of the deceased first defendant as well as amending the relief after those legal representatives came on record. Plaint was also amended on 19.11.1990 as per orders in I.A. No. 1048 of 1990, but no steps were taken to amend the plaint with regard to allegations of collusion and sale of property for a lesser value.
25. Under Order VIII Rule 1, the defendant is required to file written statement after receipt of summons and produced all the documents upon which the defendant relies. The law requires defendant to specifically plead all new facts and when once the written statement is filed, ordinarily no pleadings of subsequent written statement are permissible. Order VIII Rule 9 is to the effect that no pleading subsequent written statement shall be presented except by leave of the Court and upon such terms as the Court feels fit. Curiously, in this case, though the Trial Court relied on the averments and allegations in the rejoinder, the plaintiff has not filed any application along with rejoinder seeking leave of the Court to file such rejoinder. Therefore, the Trial Court must be held to be in error relying on the allegations made in rejoinder and also was in error in drawing inferences from such allegations in the rejoinder. The Trial Court, as noticed earlier, came to the conclusion that there was a collusion between the first defendant, the sixth defendant and Bahadur Hussain though there was not even a whisper in the evidence of P.W.1 and P.W.3 to that effect nor there was any pleading in the plaint.
26. Section 19(b) read with Section 20 of the Act does not permit enforcement of specific performance of a contract against a transferee of the immovable property for value, who has paid money in good faith and without notice of the original contract. That is to say, if third party has purchased the suit schedule property subsequent to the date of original contract under bona fide impression and in good faith for value, in equity, the vendee would not be entitled for specific performance of the contract. When a third party comes to the Court with such a plea; on whom the burden lies. The law in this regard is well settled. A subsequent purchaser is required to come to the box and make a statement that he/she has purchased the property subsequently for a consideration and that he/she had no knowledge of the earlier contract That would be sufficient to discharge the burden and the burden to lead rebuttal evidence would shift to the plaintiff seeking specific performance of original agreement. The learned Counsel for the appellant cited various decisions of various Courts in support of this. It is appropriate to refer to a few of them only.
27. In Kirtarath Rai v. Sripat Rai (supra), a Division Bench of the Allahabad Court dealing with Section 27 of the Specific Relief Act, 1877, made the following observations:
There is, however, an exception in favour of a transferee for value who has paid his money in good faith and without notice of the plaintiffs contract. From the language of this section it is clear that any person who wishes to bring himself within the exception must in the first instance show that he is entitled to that exception. I expressed the same view in my dissenting judgment in First Appeal No. 183 of 1919, decided on 25th May, 1923, where I quoted cases of all the High Courts in support of that view. Out of these I may only refer to the case of Naubat Rai v. Dhaunkal Singh, (1916) 38 All. 184 - 32 IC 953 = 14 ALJ 111. Since then these rulings have been followed in several other cases. In this view of the matter it is correct to say that the burden of proving want of notice, in the first instance, lies on the defendant transferee. But this he can do by merely denying the fact on oath, and, therefore, the question of burden of proof loses much of its importance,
28. In Ramchander v. Bibi Asghari, AIR 1957 Patna 224, the Patna High Court held as under:
It is true that the plaintiff has to establish the contract of sale between him and the vendor; but as soon as the plaintiff establishes the prior contract, the onus of proof that a third party has subsequently purchased the property bona fide, and without notice, is on the party who claims to be such purchaser. The general rule, under the Indian Evidence Act, is that where a party claims exemption from a general provision of law, the onus lies upon him to prove that he comes within the exception. In view of this general rule, in a suit for specific performance of an agreement, for the sale of land as against the vendor and a subsequent purchaser from him, the burden, therefore, lies upon the latter to show that he is a transferee in good faith for valuable consideration, and without notice. ...It is not for the plaintiff to show that the subsequent purchaser had notice of the previous contract in favour of the plaintiff. The onus of such a negative issue of proving that the subsequent purchaser had no notice of a prior claim is ordinarily discharged by a denial and by a negative evidence. Very little evidence, and, in certain circumstances, a mere denial, regarding want of knowledge of the plaintiff's contract would discharge this onus and shift the onus on the plaintiff. But under no circumstance, the initial onus, which is on the subsequent transferee, shifts on the plaintiff at the first stage, even when, the plaintiff mentions in his plaint the reason why he is making the subsequent purchaser a party, and how he came to know that the person concerned was a subsequent purchaser.
29. In Durga Prasad v. Lilawati (supra), the Patna High Court held that the initial burden is always on the vendee (subsequent purchaser) to show that he had no knowledge of the agreement, the vendee has only to discharge the burden by leading negative evidence and that such evidence can only consists of his own statement denying the fact that he had no knowledge of the same. It was further held that as soon as the vendee denies notice, the burden is discharged and then the burden shifts to plaintiff to prove that the vendee had notice of the earlier agreement.
30. In Vomisetti Papa Rao v. J. Venkataramana (supra), a Division Bench of this Court considered Section 27(b) of the Specific Relief Act, 1877, which came to be re-enacted as Section 19(2) of the present Act. This Court while reiterating that burden is on the transferee to show that he is a bona fide purchaser for value without notice made the following observations with regard to nature of proof..But he relied upon a decision of the Madras High Court in Marwadi Sumermal Tamatraj v. Thukkappa, (1944) 1 MLJ 376 = AIR 1944 Mad. 391, about which reference has already been made above to show that it is very difficult and at times may be impossible to prove a negative and in a case like this more attention has to be paid to the positive case of the plaintiff than to the bare denial made by the defendant. The 3rd defendant had denied in his evidence that he had notice of the prior agreement of sale. The Sub-Judge accepted his evidence. He should therefore be taken to have discharged his initial burden. It is not always possible to adduce positive evidence to prove a negative. In a case like this where the plaintiff adduced some evidence to prove the knowledge of the prior agreement of sale to the subsequent purchaser and it is not acceptable and that coupled with the denial of the subsequent purchaser goes a long way to establish his case about his ignorance of the prior agreement of sale. If there are some circumstances from which it can be said that the purchaser must have had knowledge of the prior agreement of sale, it may be for the purchaser to show that in spite of the existence of those circumstances in fact he was not aware of the prior agreement of sale.
31. In K. Subbayyamma v. S. Chimpirayya (supra), is a case in which the subsequent purchaser (appellant) sought recourse to Section 19(b) of the Specific Relief Act, 1963. While holding that such a purchaser must establish the absence of notice as well as payment of consideration without notice this Court explained the legal position thus:
'The law was and is both under Section 27 of the old Specific Relief Act and under Section 19 of the new Specific Relief Act that the onus is on the subsequent purchaser to prove that he is a bona fide purchaser for value without notice of the earlier contract. The defendant must establish both parts of plea viz., absence of notice and payment of consideration without notice. It may be that the onus is ordinarily discharged by the transferee denying on oath knowledge of the plaintiff's contract. But that does not affect the onus of proof. Needless to point out that each case will have to be considered on its own facts to see whether the onus has been discharged by the transferee for it is conceivable that by the transferee for it is conceivable that in some cases a mere denial may not be sufficient. Ordinarily in suits of this type the plaintiff-vendee should first adduce evidence regarding his contract. The defendant-vendor then adduces evidence in rebuttal. The subsequent purchaser can then lead evidence in support of his purchase. The initial onus is on him to prove that he is a purchaser for consideration and without notice of the earlier contract. After the subsequent purchaser has given such evidence, the plaintiff can adduce evidence in rebuttal It has been held that this would be the position that even if the plaintiff had stated in the plaint that the subsequent purchaser had notice of the earlier contract.
32. In Ram Niwas v. Bano (supra), the Supreme Court considered Section 19(b) of the Specific Relief Act, 1963. After referring to Snell's Equity (13th edition, p.48), ruled that a transferee for value who paid money in good faith and without notice of the original agreement, is excluded from enforcement of specific performance of a contract. The Apex Court also considered the purport of the term 'notice' appearing in Section 19(b) of the Act and laid down as under:
The word 'notice' should have been used in Issue 10 instead of 'knowledge' because Section 19(b) uses the word 'notice'. From the definition of the expression 'a person is said to have notice' in Section 3 of the Transfer of Property Act, it is plain that the word 'notice' is of wider import than the word 'knowledge'. A person may not have actual knowledge of a fact but he may have notice of it having regard to the aforementioned definition and Explanation II thereto. If the purchasers have relied upon the assertion of the vendor or on their own knowledge and abstained from making inquiry into the real nature of the possession of the tenant, they cannot escape from the consequences of the learned notice under Explanation II to Section 3 of the Transfer of Properly Act.
33. Keeping the settled legal position as above, can it be said that the plaintiff has proved that the sixth defendant had knowledge of Ex.A.1 before obtaining Ex.B.1 sale deed? After impleading Defendants 5 and 6 in 1987, the plaintiff did not take any steps to amend the plaint. A lengthy rejoinder was filed alleging that the sixth defendant had knowledge of Ex.A.1 and that deceased first defendant, Bahadur Hussain and D.W.1 in collusion, brought into existence Ex.B.1 sale deed. The payment of consideration by the sixth defendant was not denied but it was suggested that when the Ex.A.1 sale deed is for Rs. 71,500/-, in Ex.B.1 sale deed, the consideration amount was Rs. 48,000/-. The plaintiff wanted the Court to draw an inference that as Defendants 5 and 6 were aware of Ex.A.1, the price was drastically reduced to Rs. 48,000/- and therefore the sixth defendant had knowledge of the prior agreement. A similar submission is made before this Court by the learned Counsel for the plaintiffs Sri Koka Raghava Rao. The submission is misconceived for more than one reason.
34. First, the plaint is silent as to whether the sixth defendant had knowledge of Ex.A.1. The rejoinder makes elaborate reference to this aspect but no order of the Trial Court is placed in the record to show that the Trial Court granted leave to plaintiff to file such a rejoinder. Any reference made by the Trial Court to rejoinder, therefore was not correct and on that score the judgment of the Trial Court suffers from error. Even in the evidence of P.W.1, husband of the plaintiff, there is not even a whisper on this aspect. In the cross-examination, on 22.3.1991, P.W.1 deposed that he does not know whether first defendant executed sale deed in respect of suit property and the does not know Defendants 5 and 6. He does not even adverts to various allegations in the rejoinder and therefore the pleadings in rejoinder remain unproven statements, which illegally found place in the record of the suit. All the inferences drawn by the Trial Court regarding the alleged collusion are mere surmises not supported by the legal pleadings and the evidence on record.
35. Secondly, as per Section 19(b) of the Act, as interpreted by various Courts, D.W.1 stated that sixth defendant had no knowledge of Ex.A.1 before obtaining Ex.B.1 sale deed from Ramesh Chand Khanna. That is sufficient compliance with law to prove a negative and by speaking thus Defendants 5 and 6 have discharged their initial burden and the onus that shifted to plaintiff remained undischarged. The plaintiff, failed to prove that the sixth defendant is not a transferee for value, who paid money in good faith and/or that the sixth defendant had notice of original contract In the absence of any evidence let in by plaintiff, the sixth defendant is entitled to seek relief under Section 19(b) of the Act. D.W.1 on behalf of the sixth defendant stated that he enquired the vendor as to whether anybody else has interest in the land and the first defendant informed that there are no claims nor he was informed about any litigation by the first defendant. He denied the suggestion that the first defendant informed the fifth defendant about the prior agreement existed between the plaintiff and the first defendant. In spite of such categorical statement, the plaintiff did not bring in any rebuttal evidence and therefore must not be held to have not discharged burden. The learned Counsel for the plaintiffs made strenuous attempt to point out certain inconsistencies in the evidence of D.W.1. A careful scrutiny of these would show that they are insignificant and the gravaman of the matter that the sixth defendant had no notice of prior agreement remains unimpeached.
36. Thirdly, as noticed hereinabove, under Ex.A.6 sale deed and Ex.B.1 sale deed, the sixth defendant purchased two items of property out of the old Premises No. 4-1-1 on the same day and merely because the sale consideration is less than the market rate or lesser than the sale consideration in Ex.A.1, it cannot be presumed that the sale in favour of the transferee is not bona fide. In the entire cross-examination of D.W.1, this subject-matter was never broached nor a suggestion was given to that effect. On the sale consideration mentioned in Ex.A.1, an inference cannot be drawn that the sale in favour of sixth defendant is not bona fide. Therefore, on Point No. 2, this Court holds that in view of Section 19(b) of the Act, the plaintiff cannot enforce the specific performance of contract as against the sixth defendant, who is a subsequent bona fide purchaser for value and without notice of Ex.A.1.
In Re Point No. 3
37. A Court is not bound to grant decree of specific performance merely because it is lawful to do so. The Court has to exercise discretion in a reasonable and unarbitrary manner guided by sound principles. The learned Counsel for the appellant contends that plaintiff chose to issue Ex.A.3 notice at or about the completion of three years of period from the date of Ex.A.1, that her entire case regarding willingness to perform her part of contract is in the realm of conjuncture and unproven allegation and therefore discretion ought not to be exercised. He would also plead that the agreement between the plaintiff and the first defendant was executed in December, 1978, whereas the sixth defendant purchased the property under Ex.B.1 on 31.10.1981 and has been in possession and enjoyment of the property for the last more than twenty years. He would therefore plead not to exercise discretion in favour of the plaintiff. He placed strong reliance on the judgment of the Supreme Court in Manjunath Anandappa v. Tammanasa (supra). In the said judgment, after referring to catena of earlier judgments of the Supreme Court made the following observations:
There is another aspect of the matter which cannot be lost sight of. The plaintiff filed the suit almost after six years from the date of entering into the agreement to sell. He did not bring any material on records to show that he had ever asked Defendant No. 1 the owner of the property, to execute a deed of sale. He filed a suit only after he came to know that the suit land had already been sold by her in favour of the appellant herein. Furthermore, it was obligatory on the part of the plaintiff for obtaining a discretionary relief having regard to Section 20 of the Act to approach the Court within a reasonable time. Having regard to his conduct, the plaintiff was not entitled to a discretionary relief.
38. In the sands of time more than quarter century has become past. The plaintiff, as found by this Court, issued Ex.A.3 notice almost after three years and also failed to implead the subsequent purchaser immediately after such an averment is made by the first defendant in the written statement. Defendants 5 and 6 were impleaded on 17.11.1987 alleging that the sixth defendant is a bona fide purchaser. Plaintiff did not adduce any evidence to disprove the case of the sixth defendant, nor there is an evidence to show that the plaintiff was always ready and willing to perform her part of the contract. Taking an overall view of the matter, this Court to countenances the submission of the learned Counsel for the appellant/sixth defendant that discretion under Section 20 of the Act ought not to be exercised in favour of the plaintiff. This issue is decided accordingly.
39. In the result, for the findings recorded on various points for consideration, the appeal succeeds and is accordingly allowed. However, in the facts and circumstances, the parties shall bear their own costs throughout.