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Writer's pictureSanya Agarwal

Ram Niwas (Dead) Through Lrs vs. Smt. Bano & Ors

Decided on-: 1st August, 2000


Bench: Justice Shrivaraj V Patil & Justice S.S.M. Quadri


FACTS

The appellant, a tenant, leased a shop from respondent No. 5, the owner, in Merta City. The appellant claims to have entered into an agreement on January 25, 1978, with the owner to purchase the shop for Rs. 9200, having paid Rs. 3200 and agreeing to pay the remaining Rs. 6000 upon the execution of the sale deed. Respondent Nos. 1 to 4 (referred to as the purchasers) bought the same shop from the owner on July 24, 1978, for Rs. 20,000 under a registered sale deed. The appellant filed a suit for specific performance of the agreement against the owner and the purchasers. The trial court decreed the suit in favour of the appellant. The purchasers appealed to the High Court, claiming they were bona fide purchasers for value without notice of the prior agreement.


ISSUES

  • Whether there existed a valid and genuine agreement (Ext.1) between the tenant (appellant) and the owner for the sale of the shop.

  • Whether the purchasers were bona fide purchasers for value without notice of the earlier agreement.

  • Whether the appellant is entitled to the discretionary relief of specific performance of the contract considering Section 20(2) of the Specific Relief Act.


RATIO DECIDENDI

The appellate court upheld the trial court's finding of a valid agreement between the tenant and owner. However, the High Court didn't consider the broader concept of notice as defined in Explanation II to Section 3 of the Transfer of Property Act. It mentioned that the purchasers might be deemed to have notice of the earlier agreement if proven valid and genuine. Consequently, the case was remanded to the Single Judge to reassess the agreement's validity and the appellant's entitlement to relief under Section 20(2) of the Specific Relief Act. The courts emphasized a need for a detailed reconsideration of these aspects in the lower court.


JUDGMENT

The court sent the case back to the Single Judge for a thorough reevaluation. It instructed the Judge to review the validity of the agreement (Ext.1) between the tenant and owner and assess if the tenant qualifies for relief under Section 20(2) of the Specific Relief Act, considering Ext.1. It suggested that subsequent purchasers might know about Ext.1 if proven valid, as per a broader notice concept. The court didn't give a clear opinion on specific performance relief, leaving it for the lower court's reassessment based on facts and legal provisions.

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