/2022 INSC 0276/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2095 OF 2022
P. Ramasubbamma           ..Appellant (S)
Versus
V. Vijayalakshmi & Ors.                   ..Respondent (S)
J U D G M E N T 
M. R. Shah, J.
1. Feeling aggrieved and dissatisfied with impugned judgment
and   order   dated   20.07.2021   passed   by   the   High   Court   of
Karnataka   in   Regular   First   Appeal   No.   100200/2015,   by
which   the   High   Court   has   allowed   the   said   appeal
preferred   by   respondent   Nos.   3   and   4   herein   –   original
defendant   Nos.   3   and   4   (hereinafter   referred   to   as
defendant   Nos.   3   and   4)   and   has   set   aside   the   judgment
and   decree   passed   by   the   learned   Trial   Court   granting
decree   for   specific   performance   of   agreement   to   sell   dated
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12.04.2005,   the   appellant   herein   ­   original   plaintiff   has
preferred the present appeal. 
2. The facts leading to the present appeal in a nutshell are as
under: ­
2.1 That   the   appellant   herein   –   original   plaintiff   filed   the   suit
for   specific   performance   of   agreement   to   sell   dated
12.04.2005.   It   was   the   case   on   behalf   of   the   plaintiff   that
she had entered into an agreement with respondent No. 1
herein   ­   original   defendant   No.   1   to   purchase   the   suit
schedule property for a sale consideration of Rs. 29 lakhs.
An   advance   amount   of   Rs.   20   lakhs   was   paid   under   the
said   agreement.   Defendant   No.   1   had   earlier   executed   a
general   power   of   attorney   in   favour   of   respondent   No.   2
herein  ­  original  defendant  No.  2. However,  defendant  No.
2 was present when the plaintiff entered into an agreement
to   sell   with   defendant   No.   1.   It   was   the   case   on   behalf   of
the plaintiff that thereafter, on 25.03.2008, defendant Nos.
1   and   2   approached   the   plaintiff   and   her   husband   and
sought   payment   of   Rs.   6   lakhs.   On   25.03.2008,   the
plaintiff made further payment of Rs. 6 lakhs towards sale
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consideration and an endorsement was made by defendant
No. 1 on the agreement, acknowledging the receipt of Rs. 6
lakhs.   According   to   the   plaintiff,   thereafter,   despite
repeated   requests   and   demands,   defendant   No.   1   did   not
execute the sale deed in favour of the plaintiff. They learnt
that   defendant   No.   2   by   misusing   the   power   of   attorney
executed by defendant No. 1 in favour of defendant No. 2,
clandestinely   executed   two   sale   deeds   in   favour   of
defendant   Nos.   3   and   4   only   to   defraud   the   plaintiff.   The
plaintiff   got   served   a   legal   notice   to   the   defendants   on
17.06.2010   calling   upon   defendant   No.   1   to   execute   the
sale   deed   in   her   favour   by   receiving   balance   sale
consideration of Rs. 3 lakhs. Further, thereafter defendant
No.   1   did   not   execute   the   sale   deed,   the   plaintiff   filed   the
present   suit   for   specific   performance   of   the
contract/agreement to sell dated 12.04.2005. 
2.2 That   original   defendant   No.   1   filed   written   statement   and
admitted the execution of agreement to sell and specifically
stated that she is ready and willing to perform her part of
contract.   However,   defendant   Nos.   2   to   4   filed   separate
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written   statements   and   took   a   common   defence   that
agreement to sell dated 12.04.2005 is a created document.
It   was   contended   that   power   of   attorney   executed   by
defendant No. 1 in favour of defendant No. 2 is a registered
document   and   without   cancelling   the   registered   power   of
attorney   and   without   the   knowledge   of   defendant   No.   2,
defendant No. 1 in collusion with the plaintiff had created
the  agreement  to  sell. It was also contended by  defendant
Nos.   2   to   4   that   agreement   to   sell   dated   12.04.2005   is   a
bogus   document   and   no   sale   consideration   is   paid   by   the
plaintiff. 
2.3 The learned Trial Court framed the following issues: ­
“i)  Whether   the   plaintiff   proves   that   on   12.4.2005
defendant   No.   1   has   executed   an   agreement   of
sale  agreeing   to sell the suit  property  for  a  total
consideration of Rs. 29 lakhs?
ii)  Whether   the   plaintiff   proves   that   part   sale
consideration   of   Rs.   26   lakhs   has   been   paid   to
the defendant No. 1?
iii)  Whether the plaintiff proves that she was always
ready   and   willing   to   perform   her   part   of   duty
towards the contract? 
iv)  Whether   the   plaintiff   further   proves   that   with
malafide   intention   and   to   defeat   her   right
accrued   through   the   sale   agreement   dated
12.4.2005   defendant   No.   2   had   executed   sale
deeds dated 3.5.2010 in favour of defendant No.
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3   and   4   and   those   sale   deeds   are   nominal   sale
deeds? 
v)  Whether the defendant No. 2 to 4 prove that sale
agreement   dated   12.4.2005   is   a   created
document   and   by   virtue   of   the   same   no
consideration had been passed? 
vi)  Whether   the   plaintiff   is   entitled   for   a   decree   of
specific performance of contract?
vii)  What order or decree?”
2.4 On behalf of the plaintiff, her husband was examined as
PW1 and two more witnesses were examined on behalf of
the   plaintiff.   The   plaintiff   produced   nine   documents   as
documentary evidence as exhibit P1 to P9. Defendant No.
1   was   examined   as   DW1   and   defendant   No.   2   was
examined as DW 2. 
2.5 On   appreciation   of   evidence   on   record,   the   learned   Trial
Court   decreed   the   suit   and   passed   a   decree   of   specific
performance.   The   learned   Trial   Court   found   that
defendant   No.   1   being   the   absolute   owner   of   the   suit
schedule   property   has   admitted   the   execution   of
agreement   to   sell   in   favour   of   the   plaintiff   and   has   also
admitted receipt of substantial amount as part of the sale
consideration.   The   learned   Trial   Court   also   proceeded   to
hold   that   the   sale   deed   executed   by   defendant   No.   2   in
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favour   of   defendant   Nos.   3   and   4   are   not   binding   on
defendant No. 1 as well as the plaintiff and therefore, the
plaintiff   was   entitled   to   the   relief   of   specific   performance
of   contract   and   to   get   the   vacant   possession   of   the   suit
schedule property. 
2.6 Feeling aggrieved and dissatisfied with the judgment and
decree   passed   by   the   learned   Trial   Court,   the   original
defendant   Nos.   3   and   4   only   preferred   an   appeal   before
the   High   Court.   By   the   impugned   judgment   and   order,
the   High   Court   has   allowed   the   said   appeal   and   has
quashed   and   set   aside   the   decree   passed   by   the   learned
Trial   Court   mainly   relying   upon   and   considering   Section
20   of   the   Specific   Relief   Act.   The   High   Court   has   also
observed that as there was no prayer or a particular relief
to declare that the sale deed in favour of defendant Nos. 3
and   4   is   null   and   void   and   not   binding   on   the   plaintiff
and   defendant   No.   1,   such   a   relief   could   not   have   been
granted by the learned Trial Court. 
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2.7 Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   passed   by   the   High   Court,   the
plaintiff preferred the present appeal.    
3. Shri   S.N.   Bhat,   learned   Senior   Advocate   appearing   on
behalf   of   the   original   plaintiff   has   vehemently   submitted
that in the facts and circumstances of the case, the High
Court   has   committed   a   grave   error   in   quashing   and
setting aside the decree passed by the learned Trial Court
for   specific   performance   of   agreement   to   sell   dated
12.04.2005. 
3.1 It   is   further   submitted   that   when   the   original   defendant
No.   1   –   original   owner   admitted   the   execution   of   the
agreement and even admitted the payment of substantial
amount   under   the   agreement,   the   learned   Trial   Court
rightly   passed   the   decree   of   the   specific   performance   of
the said agreement. 
3.2 It is further submitted that even the High Court ought to
have   appreciated   that   apart   from   the   fact   that   original
defendant No. 1 admitted the execution of the agreement
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and   receipt   of   payment   of   substantial   advance   amount,
original   defendant   Nos.   3   and   4   did   not   even   enter   into
the   witness   box.   It   is   further   submitted   that   the   High
Court   has   not   properly   appreciated   and   considered   the
fact   that   the   original   of   power   of   attorney   dated
28.01.1997   executed   by   defendant   No.   1   in   favour   of
defendant   No.   2,   was   handed   over   to   the   plaintiff   at   the
time   of   execution   of   agreement   to   sell,   which   was
produced by the plaintiff in the present suit as exhibit P6.
3.3 It is further submitted that the High Court has also erred
in   holding   that   it   was   necessary   for   the   plaintiff   to   seek
cancellation   of   sale   deeds   dated   03.05.2010   executed   by
defendant   No.   2   in   favour   of   defendant   Nos.   3   and   4,
respectively.   It   is   submitted   that   in   a   suit   for   specific
performance it is not necessary for the agreement holder
to   seek   cancellation   of   sale   deed   executed   in   favour   of   a
subsequent   purchaser  and  it   is  sufficient   to   implead   the
subsequent   purchaser   in   the   suit   and   seek   relief   of
specific performance against original owner and also seek
direction   to   the   subsequent   purchaser   to   join   in   the
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execution   of   the   sale   deed   in   order   to   completely   convey
title to the agreement holder. Reliance is placed upon the
decisions of this Court in the cases of  Lala Durga Parsad
and   Anr.   Vs.   Lala   Deep   Chand   and   Ors.,   1954   SCR
360: AIR 1954 SC 75, Soni Lalji Jetha & Ors. Vs. Soni
Kalidas Devchand & Ors., (1967) 1 SCR 873: AIR 1967
SC   978,   R.C.   Chandiok   &   Anr.   Vs.   Chuni   Lal
Sabharwal   &   Ors.   (1970)   3   SCC   140:   AIR   1971   SC
1238,   Dwarka   Prasad   Singh   &   Ors.   Vs.   Harikant
Prasad   Singh   &   Ors.,   (1973)   1   SCC   179   and
Rathnavathi & Anr. Vs. Kavitha Ganashamdas, (2015)
5 SCC 223.            
3.4 It   is   further   submitted   that   the   High   Court   has   also   not
properly   appreciated   the   fact   that   the   transactions
between   defendant  No.2   and   defendant   Nos.   3  to   4   were
sham   transactions,   which   were   by   defendant   No.   2   in
favour of his own sisters­in­law. It is submitted that even
the   sale   consideration   in   the   transaction   between
defendant No. 2 and defendant Nos. 3 to 4 was alleged to
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have been paid by  cash and that too, a huge sum  of Rs.
26   lakhs   was   alleged   to   have   been   paid   by   cash.   It   is
submitted that in any case defendant Nos. 3 and 4 never
stepped into the witness box.       
3.5 It   is   submitted   that   therefore   when   the   sale   deed
executed   in   favour   of   defendant   Nos.   3   and   4   by
defendant No. 2 was sham in order to defeat the right of
the   plaintiff   pursuant   to   agreement   to   sell   dated
12.04.2005   and   the   same   was   executed   after   the
agreement to sell in favour of the plaintiff and the plaintiff
had   paid   a   substantial   advance   amount,   the   High   Court
has erred in applying Section 20 of the Specific Relief Act.
3.6 Making the above submissions and also relying upon the
decisions   of   this   Court   in   the   case   of   Vasantha
Viswanathan   Vs.   V.K.   Elayalwar,   (2001)   8   SCC   133
(para   13)   and   in   the   case   of   Rathnavathi   (supra),   it   is
prayed   to   allow   the   present   appeal   and   quash   and   set
aside   the   impugned   judgment   and   order   passed   by   the
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High Court and consequently to restore the decree passed
by the learned Trial Court.                    
4. Though served nobody has entered appearance on behalf
of   defendant   Nos.   2   to   4.   Even   respondent   No.   3   –
defendant No. 3 is served by substituted service, namely,
by   way   of   publication   in   two   daily   newspapers.   In   that
view   of   the   matter,   this   Court   has   no   other   alternative
but to proceed further with the appeal ex­parte. 
5. We have gone through the judgment and decree and the
findings   recorded   by   the   learned   Trial   Court   as   well   as
the judgment and order passed by the High Court.
5.1 The learned Trial Court framed the following issues: ­
“i)  Whether   the   plaintiff   proves   that   on   12.4.2005
defendant   No.   1   has   executed   an   agreement   of
sale  agreeing   to sell the suit  property  for  a  total
consideration of Rs. 29 lakhs?
ii)  Whether   the   plaintiff   proves   that   part   sale
consideration   of   Rs.   26   lakhs   has   been   paid   to
the defendant No. 1?
iii)  Whether the plaintiff proves that she was always
ready   and   willing   to   perform   her   part   of   duty
towards the contract? 
iv)  Whether   the   plaintiff   further   proves   that   with
malafide   intention   and   to   defeat   her   right
accrued   through   the   sale   agreement   dated
12.4.2005   defendant   No.   2   had   executed   sale
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deeds dated 3.5.2010 in favour of defendant No.
3   and   4   and   those   sale   deeds   are   nominal   sale
deeds? 
v)  Whether the defendant No. 2 to 4 prove that sale
agreement   dated   12.4.2005   is   a   created
document   and   by   virtue   of   the   same   no
consideration had been passed? 
vi)  Whether   the   plaintiff   is   entitled   for   a   decree   of
specific performance of contract?
vii)  What order or decree?”
5.2 Considering   the   fact   that   original   defendant   No.   1   –
vendor   –   original   owner   admitted   the   execution   of
agreement   to   sell   dated   12.04.2005   and   even   admitted
the receipt of substantial advance sale consideration, the
learned   Trial   Court   decreed   the   suit   for   specific
performance   of   agreement   to   sell   dated   12.04.2005.
Once   the   execution   of   agreement   to   sell   and   the
payment/receipt   of   advance   substantial   sale
consideration   was   admitted   by   the   vendor,   thereafter
nothing further was required to be proved by the plaintiff
–   vendee.   Therefore,   as   such   the   learned   Trial   Court
rightly   decreed   the   suit   for   specific   performance   of
agreement to sell. The High Court, was not required to go
into the aspect of the execution of the agreement to sell
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and   the   payment/receipt   of   substantial   advance   sale
consideration, once the vendor had specifically admitted
the execution of the agreement to sell and receipt of the
advance   sale   consideration;   thereafter   no   further
evidence and/or proof was required.
5.3 Now,   so   far   as   the   sale   deeds   executed   by   original
defendant No. 2 in favour of defendant Nos. 3 and 4 and
the   decree   passed   by   the   learned   Trial   Court   that   the
sale deeds executed by original defendant No. 2 in favour
of defendant Nos. 3 and 4 are not binding on defendant
No.   1   as   well   as   on   the   plaintiff   is   concerned,   at   the
outset, it is required to be noted that issue Nos. 4 and 5,
reproduced   hereinabove,   were   in   respect   of   the   sale
deeds   executed   by   original   defendant   No.   2   in   favour   of
defendant   Nos.   3   and   4   dated   03.05.2010.   Therefore,
specific   issues   were   framed   on   sale   deeds   dated
03.05.2010   executed   by   original   defendant   No.   2   in
favour   of   defendant   Nos.   3   and   4.   In   that   view   of   the
matter,   the   High   Court   has   erred   in   setting   aside   the
decree   passed   by   the   learned   Trial   Court   by   observing
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that as there was no specific relief/prayer of cancellation
of   sale   deeds   dated   03.05.2010   executed   by   original
defendant   No.   2   in   favour   of   defendant   Nos.   3   and   4,
therefore, the learned Trial Court could not have passed
the   decree   that   the   said   sale   deeds   are   not   binding   on
defendant   No.   1   and   the   plaintiff.   The   High   Court   has
not noted the specific issue Nos. 4 and 5 framed by  the
learned   Trial   Court,   which   were   with   respect   to   sale
deeds dated 03.05.2010. Therefore, as such, there was a
lis   between   the   parties   in   respect   to   sale   deeds   dated
03.05.2005   executed   by   original   defendant   No.   2   in
favour   of   defendant   Nos.   3   and   4   and   even   specific
issues   were   framed,   which   on   appreciation   of   evidence
were held against defendant Nos. 2 to 4.   Therefore, the
High Court is not justified in quashing and setting aside
the   judgment   and   decree   passed   by   the   learned   Trial
Court declaring that sale deeds dated 03.05.2010 are not
binding on defendant No. 1 and the plaintiff. 
5.4 It   is   also   required   to   be   noted   that   on   appreciation   of
evidence,   the   learned   Trial   Court   has   specifically   given
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the   finding   that   the   alleged   sale   consideration   paid   by
defendant   Nos.   3   and   4   to   original   defendant   No.   2   for
executing   sale   deeds   dated   03.05.2010   have   not   been
established   and   proved   by   defendant   Nos.   2   to   4.
Therefore,   there   was   a   specific   finding   given   by   the
learned Trial Court on appreciation of evidence that sale
deeds   dated   03.05.2010   were   nominal   sale   deeds.   The
High   Court   has   brushed   aside   the   same   on   the   ground
that   even   in   agreement   to   sell   dated   12.04.2005,   the
amount was alleged to have been paid by cash. However,
it   is   required   to   be   noted   that   so   far   as   receipt   of
substantial advance sale consideration mentioned in the
agreement to sell dated 12.04.2005 has been specifically
admitted   by   defendant   No.   1.   Therefore,   when   it   was
specifically   alleged   that   defendant   No.   2   executed   sale
deeds   in   favour   of   defendant   Nos.   3   and   4,   who   are   his
sisters­in­law,   with   a   view   to   defeat   the   rights   of   the
plaintiff   and   defendant   No.   1   and   when   it   was   alleged
that they were nominal sale deeds, thereafter, defendant
No.   2   was   required   to   prove   the   receipt   of   sale
consideration   mentioned   in   the   sale   deeds   dated
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03.05.2010,   which   defendant   Nos.   2   to   4   have   failed   to
do so. 
5.5 It   is   also   required   to   be   noted   that   on   appreciation   of
evidence, learned Trial Court has specifically found that
the stamp papers of agreement to sell dated 12.04.2005
was   purchased   in   the   name   of   defendant   No.   2   and
therefore   defendant   No.   2   was   aware   and   in   the
knowledge   of   agreement   to   sell   dated   12.04.2005.   It   is
also   required   to   be   noted   that   even   defendants   did   not
reply   to   the   legal   notice   served   by   the   plaintiff,   which
was issued before filing the suit. 
5.6 In light of the aforesaid factual aspects and the findings
recorded by  the  learned Trial Court, the decision of this
Court in the case of  Lala Durga Prasad & Ors.  (supra) is
required to be referred to. In paragraph 42, it is observed
and held as under: ­
“42.   In   our   opinion,   the   proper   form   of   decree   is   to
direct   specific   performance   of   the   contract   between
the   vendor   and   the   plaintiff   and   direct   the
subsequent transferee to join in the conveyance so as
to   pass   on   the   title   which   resides   in   him   to   the
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plaintiff.   He   does   not   join   in   any   special   covenants
made   between   the   plaintiff   and   his   vendor;   all   he
does   is   to   pass   on   his   title   to   the   plaintiff.   This   was
the   course   followed   by   the   Calcutta   High   Court
in   Kafiladdin   v.   Samiraddin   [AIR   1931   Cal   67]   and
appears   to   be   the   English   practice.   See   Fry   on
Specific   Performance ,   6th   Edn.,   p.   90,   para   207;
also   Potter   v.   Sanders   [67   ER   1057].   We   direct
accordingly.”
The   aforesaid   decision   has   been   subsequently
referred to and followed by this Court in the subsequent
decision in the case of  Rathnavathi & Anr.  (supra). 
5.7 From   the   impugned   judgment   and   order   passed   by   the
High   Court,   it   appears   that   the   High   Court   has   heavily
relied   upon   Section   34   of   the   Specific   Relief   Act.
However,   considering   the   fact   that   specific   issues   were
framed   with   respect   to   sale   deeds   dated   03.05.2010
executed   by   original   defendant   No.   2   in   favour   of
defendant Nos. 3 and 4 and the parties led the evidence
also   on   the   aforesaid   issues   and   thereafter,   when   the
learned Trial Court had given findings on the said issues
and thereafter, had granted the declaration that the sale
deeds   executed   by   original   defendant   No.   2   in   favour   of
defendant Nos. 3 and 4 are not binding on defendant No.
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1 and the plaintiff and those sale deeds are nominal sale
deeds and that defendant Nos. 2 to 4 have failed to prove
that   agreement   to   sell   dated   12.04.2005   is   a   created
document   and   by   virtue   of   the   same   no   consideration
has been paid, Section 34 of the Specific Relief Act, upon
which   the   reliance   has   been   placed   by   the   High   Court
will have no application.
5.8 The   High   Court   has   set   aside   the   judgment   and   decree
passed by the learned Trial Court on the ground that the
relief   under   Section   20   of   the   Specific   Relief   Act,   is   a
discretionary relief and therefore, in view of the fact that
original   defendant   No.   2   had   executed   sale   deeds   in
favour of defendant Nos. 3 and 4, the learned Trial Court
ought   not   to   have   exercised   discretion   in   favour   of   the
plaintiff   for   passing   the   decree   for   specific   performance.
However,   in   the   facts   and   circumstances   of   the   case
narrated   hereinabove   and   when   the   learned   Trial   Court
specifically   gave   the   findings   that   defendant   No.   1   –
vendor   specifically   admitted   the   execution   of   agreement
to   sell   dated   12.04.2005   in   favour   of   the   plaintiff   by
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accepting   a   substantial   advance   consideration   and   that
defendant   No.  2  was   in   the  knowledge   of  the   agreement
to sell and despite the same, he sold the same in favour
of defendant Nos. 3 and 4, who are his sisters­in­law and
that   too   the   sale   deeds  found  to   be  nominal   sale   deeds,
the   learned   Trial   Court   as   such   rightly   decreed   the   suit
for   specific   performance   and   also   rightly   declared   that
sale   deeds   dated   03.05.2010   executed   by   original
defendant No. 2 in favour of defendants No. 3 and 4 are
not binding  upon  the plaintiff and defendant  No. 1. The
High Court has committed a grave error in reversing the
judgment   and   decree   passed   by   the   learned   Trial   Court
by   ignoring   the   vital   facts   of   the   case   which   are   either
admitted or proved in the instant case.
6. In   view   of   the   above   and   for   the   reasons   stated   above,
the   present   appeal   succeeds.   The   impugned   judgment
and   order   passed   by   the   High   Court   is   hereby   quashed
and   set   aside   and   the   judgment   and   decree   passed   by
the   learned   Trial   Court   is   restored.   In   the   facts   and
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circumstances of the case, there shall be no order  as to
costs.     
…………………………………J.
                  (M. R. SHAH)
…………………………………J.
 (B.V. NAGARATHNA)
New Delhi, 
April, 11 2022.
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