Narasimha Reddy, J.
1. In this appeal, the judgment and decree of the Court of the Principal Subordinate Judge, Vijayawada, in OS No. 247 of 1983 is in challenge. The defendants are the appellants. The parties are referred to as arrayed in the suit.
2. The respondent/plaintiff filed the suit for the relief of specific performance of the agreement of sale dated 15-5-1980 executed by the defendants herein and the father of the 1st defendant by name Koneru Venkata Narayana, offering to sell the suit schedule property. According to the plaint averments, the defendants offered to sell the suit schedule property for a consideration of Rs. 19,250/-, an amount of Rs. 5,000/- was paid as advance on the date of agreement, the balance of Rs. 14,250/-was to be paid after the defendants obtain the permission from the Urban Land Ceiling Authorities (for short 'ULC authorities') and intimate the same to the plaintiff. It was alleged that the defendants have not obtained the said permission and on account of their failure, the plaintiff got issued notices dated 22-1-1983 and 7-2-1983 calling upon the defendants to execute the sale deed after receiving the balance of consideration. Since there was no response, the suit was filed.
3. The appellants/defendants filed a written statement admitting execution of the agreement and receipt of Rs. 5000/-. However, it has been pleaded that the suit schedule property constituted 1/3rd share purchased by the father of the 1st defendant along with Koneru Venkatratnam and Koneru Nagabhushanam Rao, though the suit schedule property and another 9 1/2 cents fell to the share of the 1st defendant, later he exchanged the same with one Koneru Lingaiah long time ago. It was pleaded in the written statement that the 1st defendant was very old at the time of execution of the agreement and he did not inform the 2nd defendant about the exchange, and on enquiry, it emerged that the property was inpossession of one Lingaiah. It is also pleaded that the ULC authorities have rejected the request of the defendants for grant of permission stating that they have no title to the suit schedule property. The defendants further pleaded that they offered to refund the amount of Rs. 5000/- with 12% interest in view of their incapacity to sell the property.
4. On the basis of the pleadings, the trial Court framed the following issues:
'1. Whether the plaintiff is entitled to specific performance asked for inthe suit?
2. Whether the exchange pleaded by the 2nd defendant between Koneru Lingaiah and the 1 st defendant is true, valid and binding on the plaintiff?
3. To what relief?'
5. On behalf of the plaintiff, her husband Sri P. Veerahhadram, was examined as PW1 and the 2nd defendant examined as DW1. The plaintiff filed documents Ex.A1 to A6 and the defendants filed Exs.B1 to B5. PW1 has almost spoken to the consents of the plaint However, DW1, apart from reiterating the contents of the written statement, has also stated in his evidence that the plaintiff along with one P. Chitri Kasulu agreed to purchases 171/2 cents in Sy. No. 95/8 through agreement of sale dated 2-4-1980 marked as Ex.B2. Since it emerged that the defendants are not in possession of the same, the other co-purchaser Chitti Kasulu has taken back the advance paid by her by filing suit OS No. 261/84.
6. On appreciation of the oral and documentary evidence, the trial Court decreed the suit. The defendants challenged the same in this appeal.
7. Sri V. Parabrahma Shastri, learned Counsel for the appellants/defendants,submits that the defendants were not in possession of the suit schedule property and as such they have no right to execute the sale deed. It is also his contention that the ULC authorities have refused to accord permission to the defendants and in the absence of the same, they cannot be compelled to execute the sale deed, which would be contrary to the provisions of the Urban Land (Ceiling and Regulation) Act (for short 'the ULC Act'). He further submits that in respect of the neighbouring plot, the agreement holder having realised the inability and incapacity of the defendants had taken back the advance and the case of the plaintiff is in no way different.
8. Sri V.S.R. Anjaneyulu, learned Counsel for the plaintiff, on the other hand, submits that once the agreement is executed, the defendants cannot be permitted to escape their liability to execute the sale deed. He contends that the defendants, who offered to sell the property, cannot plead lack of title. So far as the ULC Act is concerned, he submits that the proceedings filed by the defendants i.e., Ex.B1, cannot be treated as rejection and the decree of the trial Court contemplates the steps for obtaining permission, and as such, no exception can be taken to the decree of the trial Court. He submits that the fact that one of the agreement holders has taken back the advance does not constitute a ground for rejection of the relief of specific performance.
9. The sequence of the events that emerged from the pleadings and evidence is as under:
10. The defendants executed an agreement of sale dated 2-4-1980 in favour of the plaintiff and another by name P. Chitti Kasulu. Under this agreement, they offered to sell 17 cents of land situated in Sy. No. 95/8 of Patamata village, Vijayawada taluq, Krishna District, for a consideration of Rs. 38,500. An amount of Rs. 10,000/-was paid under this agreement. Thisagreement is marked as Ex.B2. Subsequently, the defendants executed an agreement dated 15-5-1980 in favour of the plaintiff alone. This is marked as Ex.A1. The property agreed to be sold under this agreement is 9.19 cents. It recites that the total consideration is Rs. 19,250/- and an amount of Rs. 5,000/- is paid and the balance is Rs. 14,250/-. It contemplates obtaining of permission from the ULC authorities. It appears on the same day, in respect of balance of the land under Ex.B2, another agreement of sale was executed in favour of P. Chitti Kasulu, as is evident from the description in the boundaries, wherein it is stated that the western boundary is the land said to have been agreed to be sold to Chitti Kasulu on the same day. One aspect to be noticed is that both Exs. B2 and A1 were signed by the defendants alone and the plaintiff did not sign in any one of them.
11. The factum of execution of the agreement under Ex.A1 is not disputed by the defendants. So also is the factum of receipt of advance of Rs. 5,000/-. Defendant No. 1 died during the pendency of the suit and even before the commencement of evidence. The plea of the 2nd defendant was that the 1 st defendant, who was an old man and looking after the affairs, suffered paralytic stroke, he did not inform him about the exchange in favour of one Mr. Lingaiah and he signed Ex.A1 on the instructions of the 1st defendant. He further stated that, on verification, he came to know that the suit schedule land was exchanged long back with one Mr. Lingaiah and it is the children of Lingaiah who are in possession of the suit schedule land since long. In support of his contention, he has filed Ex.B3 which is the adangal, to show that the defendants are not in possession of the suit schedule land. He has also stated in his evidence that they applied for grant of permission from the ULC authorities in respect of the suit schedule land and that application wasrejected through Ex.B1 on the ground that they did not have the title to the same. He further deposed that the agreement holder in respect of the neighbouring plot P. Chitti Kasulu got issued a notice and called upon the defendants to execute the sale deed and when these very facts were brought to her notice, she took back the amount of Rs. 5,000/- together with interest. On the strength of these facts, Sri Parabrahma Shastri, learned Counsel for the defendants, submits that the decree of the trial Court would have the effect of directing the defendants to transfer the property for which they do not have title or possession and also to violate the provisions of the ULC Act. In support of his contention, he places reliance upon the judgment of the Hon'ble Supreme Court in Boothalinga Agencies v. V.T.C Porlaswami, : [1969]1SCR65 , Gian Chand v. Gopala, : [1995]1SCR412 , and of the Madras High Court in Rajendmkumar v. Poosammal, : AIR1975Mad379 .
12. The learned Counsel for the plaintiff, on the other hand, submits that the plea that the defendants do not have the title or possession are invented only for the purpose of evading their liability and even if the said plea is true, it cannot constitute a ground to reject the relief of specific performance. He places reliance upon the judgment of this Court in M. Venkata Rao v. K.A. Mangatayaramma, 1997 (4) ALD 121. As regards ULC permission, he submits that the trial Court dealt with the same in a proper perspective and the directions issued by it are in consonance with the law laid down by this Court in Dr. M. Devakumar Reddy v. V.S. Gopal Rao, 1989 (2) ALT 403.
13. It is settled principle of law that a person cannot convey a better title than what he has. In any transaction of sale, the seller is under obligation to convey the property of a clear title to the purchaser.Any lapse of his part, which may occur on account of inadvertence or the random act or omission, would entail civil and sometimes even criminal consequences, at the instance of the purchaser. In most of the transactions, indemnity clauses are incorporated and even in the absence of such clauses, the Law of Contract ensures the same. If in fact the defendants did not have the marketable title, they cannot be compelled to convey a property in respect of which they do not have title or possession. The Division Bench of the Madras High Court in its decision in Rajender Kumar's case held as under:-
'Marketable title is one which both in the strict and reasonable sense means that the vendor would be in a position to force the property concerned on an unwilling purchaser under all circumstances. It should be shown to be free from and not afflicted by doubts. Such doubts, no doubt, ought not to be capricious or frivolous doubts but which a Court of law would be disposed to accept as serious or sufficient. If, therefore, the first defendant had no title or, in any event, had no marketable title or a title free from reasonable doubt, it follows that the plaintiff is not entitled to specific performance, as a matter of right.'
14. Now it needs to be seen as to whether the defendants have the marketable title in respect of the suit schedule properly.
15. The term 'marketable title' is a compendious expression. It not only presupposes the existence of de jure title, but also de facto possession in the vendor. If the vendor has the legal possession, but has no physical possession either of himself or through any one under his authority, he cannot be said to have marketable title. It was the specific plea of the defendants that the suit schedule property was not in their possession. In support of their contention, they filed Ex.B3, which is an adangal for three consecutive fasli years from 1396 to 1398. In that, as regards the land inSy.No. 95/8, the pattedar as well as the person In possession is show as K. Lingaiah. In his cross-examination, PW1 stated that he does not know as to who is in actual possession of the suit land. He initially stated that it was in possession of D1. But when it was put to him as to whether Dl was alive, he pretends his ignorance. It was specifically suggested to him that the land was exchanged to Lingaiah and that he alone was paying the land revenue. Defendant No. 2, as DW1 categorically stated in his evidence that the property was exchanged with Lingaiah long back and he and his successors were not in possession and enjoyment of the same. Nothing was elicited from him to discredit his testimony. The plaintiff did not place any oral or documentary evidence before the Court to suggest that the defendants were in fact in possession and enjoyment of the property. When the evidence is so unequivocal that the defendants are not in possession and enjoyment of the suit land, to require them to transfer the said property would, in a way, make them to commit illegality. The learned Counsel for the plaintiff has cited the decision of this Court in M. Venkata Rao's case (supra) in support of his submission that the vendor cannot put forward the plea that he has no title or his title is defective. He relies upon Para 16 of the said judgment, which reads as under:
'It was contended that Defendant No. 1 at the time of execution of the agreement Ex.A1 had only a half share in the property and therefore specific performance for the whole agreement cannot be granted for want of title in Defendant No. 1. As already noticed, Defendant No. 1 became the owner of the other half share of the property on the death of his mother during the pendency of the suit. In a suit for specific performance filed by the purchaser, the vendor cannot put forward the plea that he had no title or defective title, but if the suit by the vendor, the purchaser can plead that the vendorhad no title or had defective title as defence. The present suit is one filed by the purchaser and the plea now put forth by the Appellant No. 1 as the defect in his title is unavailable to the appellants and specific performance cannot on that ground be denied.'
The present case is distinguishable from the judgment cited by the learned Counsel for the plaintiff on two counts. Firstly, a finding of fact was recorded by this Court in the said judgment that the defendant No. 1 in the said case became the owner of the other half share of the property on the death of his mother during the pendency of the suit, which is evident from the 2nd sentence in the paragraph extracted above. Secondly, the evidence on record in the present case establishes that the revenue records in the form of Ex.B3 indicate that it is Lingaiah and his successors that are in possession and that the defendants are not all in possession of the same. Therefore, the ratio of the decision relied upon by the leaned Counsel for the plaintiff does not apply to the facts of the present case.
16. The grant of relief of specific performance is discretionary as is evident from the provisions under Section 20(2)(b) and (c) of the Specific Relief Act. The discretion is, however, not arbitrary, but to be exercised on sound and reasonable and guided by judicial principles. Some of the circumstances which enable the Court to refuse the relief of specific performance are whether the performance of the contract would involve some hardship to the defendants which they did not foresee {2(b)J and whether it would be inequitable to enforce specific performance {2(c)}. As observed earlier, when the defendants categorically pleaded that they do not have the possession of the property and the plaintiff could not convince this Court to disbelieve the version of the defendants, grant of decree of specific performance would not only be a futile exercise vis-a-visthe defendants, but would expose the defendants for further action by the plaintiff as well as the proceedings from the 3rd parties who are in possession of the property. In my view, the provisions of Section 20(2)(b) & (c) of the Specific Relief Act get attracted to the facts of the case.
17. The 2nd aspect, which arises for consideration in this case, is as to whether the decree of the trial Court would constitute violation of provisions of the ULC Act. The catena of decisions relied upon by the trial Court on this aspect and the judgment of this Court in Deva Kumar Reddy's case (supra) indicate that even where the land agreed to be sold is attracted by the provisions of the ULC Act, it is competent for the Courts to direct specific performance, subject to obtaining of permission under the Act. In this case, when the defendants approached the ULC authorities seeking such permission, the same was rejected on the ground that they do not have title over the land. Ex.B1 is the letter issued by the ULC authorities. The contention of the plaintiff is that Ex.B1 does not relate to the issuance of permission. It was not the case of the plaintiff that the defendants did not apply for such permission at all. If they wanted to establish that Ex.B1 does not relate to the same, they could have taken the steps to summon the concerned records. They did not choose to do so. Therefore, though the principle applied by the trial Court on this aspect was correct, there is no factual basis for application of the same. When it is evident that the defendants have no marketable title in respect of the suit schedule property, the question of obtaining any permission for selling the same does not arise. If they are not competent to sell where no such permission is needed, the situation does not improve if they are required to obtain permission in law. It has come in evidence that the agreement holder of the neighbouring plot by name Chitti Kasulu has taken back the advancepaid by her. That fact by itself does not disentitle the plaintiff if she was otherwise entitled to.
18. It is not in dispute that the plaintiff paid an amount of Rs. 5,000/- towards advance and the defendants in fact offered to refund the same. Since the inability to execute the sale deed emerges on account of facts, which cannot be attributed either to the plaintiff or the defendants, no one should be put to loss. The plaintiff was entitled for the refund of the said amount with interest. However, there is a specific bar under Section 22(2) of the Specific Relief Act for the Court to pass a decree for refund of the earnest money or deposit unless it has been specifically claimed in the suit by the plaintiff. The prayer of the plaintiff in the suit was for specific performance alone and there is no specific prayer for refund of the earnest money. This Court would have readily granted such a decree, but for the prohibition contained in Section 22(2) of the Specific Relief Act and the absence of the prayer in the plaint. It shall be open to the plaintiff to take such steps as are open to her in law to seek refund of the earnest money.
19. In view of the foregoing discussion and in view of the findings recorded above, the decree of the trial Court cannot be sustained. The same is set aside and the appeal is accordingly allowed. There shall be no order as to costs.