SARGUNAM (D) BY LR. versus CHIDAMBARAM AND ANR.

Citation: [2004] SUPP. 5 S.C.R. 156 · Decided: 07-10-2004 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
B 
SARGUNAM (D) BY LR. 
v. 
CHIDAMBARAM AND ANR. 
OCTOBER 7, 2004 
[ASHOK BHAN AND S.H. KAPADIA, JJ.] 
Specific Relief Act, 1963-Sections 6 and 20(2)(b)-Agreement of sale 
of premises between vendor and vendee-Vendee 's case that vendor failed to 
C discharge his contractual obligations, and allegedly entered into agreement 
with purchaser with regard to same premises prior to sale agreement between 
vendor and vendee and thereafter, executed conveyance-Suit for specific 
performance by vendee-Vendor and purchaser pleading to the contrary--
Dismissal of suit by trial court however, set aside by High Court-Correctness 
of-Held: On facts proved that purchaser had notice of suit agreement when 
D she entered into conveyance, thus was not a bonafide purchaser for value 
without notice-Conveyance was sham, bogus and nominal sale entered into~ 
to defeat claim of vendee and also sale agreement between vendor and third 
party concocted document-Furthermore, it is not a case where purchaser 
could notforsee ensuing hardship, thus, secion 20(2)(b) not applicable-
£ 
Hence, findings of facts recorded by High Court calls for no interference. 
On 14.6.1979, defendant no.l - vendor by sale agreement agreed to 
sell a premises to plaintiff - vendee, respondent no. 1 for certain amouut 
and received part payment fQr the same. Under the agreement vendor 
agreed to complete the sale by 13.11.1979, sell the premises free from all 
F encumbrances and to deliver title deeds to plaintiff. However, vendor failed 
to carry out his obligations. Plaintiff then issued legal notices but the 
vendor failed to respond. Meanwhile, it is alleged that on .15.4.1978 
defendant no. 1 entered into an agreement with defendant no. 2 - appellant 
to purchase the same premises, and on 29.11.1979 defendant no. 1 executed 
conveyance in favour of defendant no. 2. Thereafter, plaintiff filed suit 
G for specific performance of the agreement on the ground that that he was 
always ready and willing to carry out his obligation under the agreement; 
that defendant no. 1 committed breach; the conveyance was sham and 
bogus; and that defendant no. 2 had notice of suit agreement. Trial Court 
held that the plaintiff had failed to complete the sale by 13.11.1979 which 
H 
156 
SARGUNAM v. CHIDAMBARAM 
157 
period was essence of the contract; that defendant no.1 was always ready A 
and willing to comply with his part of the contract and as such he had 
every right to sell the suit premises by conveyance to defendant no. 2; that 
conveyance was executed pursuant to the agreement dated 15.4.1978; that 
plaintiff had failed to prove that defendant no.2 had notice of the suit 
agreement and that conveyance was sham, bogus and nominal; and thus, B 
dismissed the suit. High Court on re-appreciation _r e Hence held that 
defendant no. 2 had notice of suit agreement at the time of executing 
conveyance; that agreement dated 15.4.1978 was concocted and was made 
to defeat the claim of plaintiff; that the signatures of the vendor on the 
agreement dated 15.4.1978 and on conveyance were different; and that 
defendant no.2 did not prove her signature on the agreement of 15.4.1978, C 
therefore, the conveyance was not protected and thus set aside the findings 
of trial court and decreed the plaintiff's suit. Hence the present appeal. 
Appellant-defendant no.2 contended that High Court should not have 
interfered with the findings of fact recorded by trial court; that prior to 
the suit agreement, defendant no.2 had agreed to purchase the suit D 
premises from defendant no.1on15.4.1978, therefore, defendant no.2 was 
the prior purchaser of the suit premises; that in pursuance of agreement 
dated 15.4.1978, defendant no.1 had executed conveyance in favour of 
defendant no.2 and defendant no.2 paid the balance consideration of 
Rs.11,500 to defendant no.I without the knowledge of the suit agreement; 
that agreement dated 15.4.1978 has been duly signed by defendant no. 1 E 
and defendant no. 2 and was duly attested, as such was not concocted; 
that the instant case falls under section 20(2)(b) of the Specific Relief Act, 
1963; and that defendant no.2 was in possession of the suit premises for 
last couple of years and as such decree for specific performance of suit 
agreement would cause greater hardship to defendant no, 2 as compared F 
to the plaintiff. 
Dismissing the appeal, the Court 
HELD 1.1. In the instant case, respondent no. 1 - plaintiff filed suit 
for specific perfor

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