Munnalal Thru. Lrs. Smt. Pushpabai vs Nilesh on 20 December, 2024

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Madhya Pradesh High Court

Munnalal Thru. Lrs. Smt. Pushpabai vs Nilesh on 20 December, 2024

          NEUTRAL CITATION NO. 2024:MPHC-IND:36673




                                                                                1                                                   FA-504-2014
                             IN        THE           HIGH COURT OF MADHYA PRADESH
                                                            AT INDORE
                                                                BEFORE
                                                 HON'BLE SHRI JUSTICE GAJENDRA SINGH


                                                             FIRST APPEAL No. 504 of 2014
                                    MUNNALAL THRU. LRS. SMT. PUSHPABAI AND OTHERS
                                                        Versus
                                                NILESH AND OTHERS
                           Appearance:
                                     Shri Ajay Bagadia - Senior Counsel with Shri Rishi Shrivastava -
                           Advocate for the petitioners No. 1 and 3.
                                     Shri D.S. Kale - Advocate for the respondents.

                                                                   Reserved on :- 30.09.2024
                                                                   Posted on :- 20.12.2024
                           ..............................................................................................................................................
                                                                         JUDGMENT

This first appeal under Section 96 of the Code of Civil Procedure is
preferred being aggrieved by the judgment and decree dated 14.02.2014 in
Civil Suit No. 6-A/2011 by Additional District Judge, Manawar, District

Dhar, whereby a decree of Specific Performance of Contract of Sale
(Exhibit-P-41) has been passed in favour of the respondent Nirmal
Bai/plaintiff and sale deed executed by Munnalal/defendant No.1 in favour
of appellant No.2/defendant No.3 is declared void and not binding on the
plaintiff/respondent No.1 and defendants/appellants have been ordered to
deliver the possession of the suit land.

2. In this case execution of contract of sale by defendant

Signature Not Verified
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PRASHANT
Signing time: 20-12-2024
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No.1/Munnalal (who later died on 28.12.2011)/father of the present
appellants dated 30.06.2010 (Exhibit-P-41) for sale of 1/3rd share in
agricultural land of Survey No. 174 area 0.125 hectare, Survey No. 178 area
0.157 hectare and Survey No. 179 area 3.104 hectare total area 3.386 hectare
situated at Manawar Tehsil Manawar, District Dhar, Madhya Pradesh for a
consideration of Rs. 18 lacs in favour of respondent No.1/plaintiff is not
disputed.

3. On 01.04.2011 the suit was filed by respondent No.1 against
Munnalal as defendant No.1 and State of Madhya Pradesh as defendant No.2
seeking specific performance of contract (Annexure-P-41), recovery of
possession and permanent injunction with averment that it was orally agreed

that after making a partition of joint property the Munnalal will execute the
sale deed that will fall in his share and it was also orally told that Munnalal
has initiated a proceedings for partition and as soon as his share is separated
then he will execute the sale deed. When the plaintiff/respondent No.1 asked
for execution of the same, it was told that partition proceedings are pending
and his brother has raised the objection and assured the plaintiff/respondent
No.1 that as soon as the property is partitioned, he will execute the sale
deed. He has arranged the necessary funds and was ready to perform his part
and execute the sale deed, but plaintiff/respondent No.1 came to know that
defendant No.1 Munnalal is trying to sell his 1/3rd share to some other
person. Plaintiff/respondent No.1 contacted Munnalal, but he did not reply
satisfactorily. He send a notice (Exhibit P-34) to defendant
Munnalal/respondent No. through registered post (Exhibit-P-35) and also

Signature Not Verified
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PRASHANT
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published the notice in Daily Newspaper ‘Choutha Sansar’ (Exhibit-P-37)
and also submitted a cheque of Rs. 17 lacs (Exhibit-P-36). Thereafter, he
impleaded appellant No.2, Rekha Jain as defendant No.3 with averment that
Munnalal has executed a sale deed in favour of Rekha Jain on 29.04.2011,
despite the injunction of trial Court and sought the relief of cancellation of
sale deed also and thereafter additional relief of demolition of the wall
constructed by defendant No.3/appellant No.2 was also added. Munnalal
filed a written statement and contested the case on the ground that
plaintiff/respondent No.1 never asked him to execute the sale deed.
Separation of a share through partition was not required for execution of the
sale deed. He never extended the time limit for execution of the sale deed
on 29.12.2010. There was no stipulation that sale deed shall be executed
after making a partition. Plaintiff never contacted him before filing the suit.
Time was the essence of the contract and the duration of the contract was
only upto 30.12.2010 and within this stipulated period plaintiff/respondent
did not cause execution of the sale deed and it presumes that plaintiff has
avoided the contract and he is not entitled to refund of earnest money.
Plaintiff/respondent No.1 has not approached with clean hands. He himself
is guilty. The agreement is not duly stamped and it is not registered. Due to
increase in the rates of the property this suit has been filed maliciously to
cause financial loss to Munnalal. Plaintiff/respondent No.1 is not entitled for
any relief. At the most a relief of refund of earnest money can be granted in
favour of respondent No.1.

4. Appellant No.2/defendant No.3 contested the case on the ground

Signature Not Verified
Signed by: RASHMI
PRASHANT
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4 FA-504-2014
that she has no notice of agreement between Munnalal and plaintiff. She is
bonafide purchaser. She is in possession of the suit property as owner. The
suit has been filed without impleading the necessary parties.

5. After the death of Munnalal, Lrs of Munnalal were substituted
and they also filed a written statement on the line of Munnalal.

6. Trial Court framed total seven issues and recorded the evidence of
plaintiff Nilesh Rawaka as PW-1, Vijay, witness of P-41 as PW-2, Parasmal
Rawaka as PW-3 and admitted the documents ExhibitP-1 to P-41 on behalf
of the plaintiff/respondent No.1.

7. Defendant No.1 Ram has been examined as DW-1 and defendant
No.3/appellant No.2 Rekha Jain examined herself as DW-2. Appellant
No.1/defendant No.1 adduced Exhibit-D-1.

8. Appreciating the evidence, the trial Court recorded the findings
that the Exhibit-P-41 is sufficiently stamped and there is no non-joinder of
necessary parties and the suit is properly valued. The plaintiff was ready and
willing to perform his part under the Contract (Exhibit-P-41) and passed a
decree in favour of the plaintiff/respondent No.1 as mentioned in Paragraph-
1 of the judgment.

The decree passed by the trial Court through Paragraph 19 is being
reproduced as below :-

“1. Decree of specific performance of contract is passed
in favour of the plaintiff. L.R of defendant No.1 Munnalal shall
execute sale deed in favour of plaintiff of the land survey No.

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
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174, 178, 179, area 1.128 hectare (1/3 of total area), situated in
village Manawar. Within two months. If defendants are failed,
plaintiff shall be liable to get registry done through Court.

2. Defendants shall deliver the possession of the alleged
land after sale of the land.

3. Sale deed done by defendant No.1 to defendant No.3 is
Smt RekhaJain is void and is not binding to the plaintiff.

4. Defendants shall bear the cost of plaintiff along with
themselves.”

9. Challenging the judgment and decree this first appeal has been
preferred on the ground that the trial Court committed a grave error of law
and facts both in not interpreting the provisions of Section 55 of the Contract
Act in right perspective in the facts and circumstances of the case. There is
no term or promise which the defendant No.1 has failed to complied with or
any condition which has to be complied with by the defendant No.1 before
execution of the registered instrument in favour of the plaintiff. Trial Court
committed error in ignoring the provisions of Section 17 of the Indian
Registration Act, 1908 and taking the Exhibit-P-41 as evidence and also
committed error in admitting the Exhibit-P-41 in evidence despite it was
insufficiently stamped. Trial Court also committed a grave error of law and
fact both in holding that there is no delay on account of the plaintiff in
getting the registered sale deed executed in his favour and recorded the
finding that whatever, delay is caused is on account of defendant No.1 as the
brother of the defendant No.1 filed a civil suit. Trial Court also committed a

Signature Not Verified
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PRASHANT
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grave error of law and fact both in holding that the plaintiff was always
ready and willing to perform his part of contract. Trial Court also failed to
appreciate that the time was essence of the due performance of the contract
and any unilateral alteration with regards to change in terms of the contract
with regard to the time period is material change and would prejudice the
terms of the contract. Trial Court also committed error in holding that the
addition of the term in the Agreement of sale does not amounts to any
fabrication of fact or harmful for performance of the contract. Trial Court
also committed error in holding that appellant No.2/defendant No.3 has full
knowledge about the earlier transaction between Munnalal and plaintiff.

10. Heard learned counsel for the parties.

11. Counsel for the respondent No.1/plaintiff supported the judgment
and decree of the trial Court and prayed for the dismissal of the appeal.

12. Perused the record.

13. Ground No.6 and 7 of the memo of appeal regarding non-
registration of the Agreement of Sale and insufficiency of stamps are not
sustainable because Exhibit-P-41 has been certified to be sufficiently stamp
by Collector of Stamp, District Dhar vide order dated 03.11.2012 and as per
the proviso of Section 49 of the Indian Registration Act, 1908 an un-
registered document affecting immovable property as required by this Act or
the Transfer of Property Act, 1882 to be registered may be received as

evidence of a contract in suit for a specific performance under Chapter-II of
the Specific Relief Act, 1963
. Now for disposal of this appeal following
questions arises :-

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PRASHANT
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“1. Whether the trial Court committed error in
granting the relief of specific performance of contract
(Exhibit-P-41) ignoring the fact that the period of six
months from 30.06.2010 was the essence of the
contract.

2. Whether the trial Court committed error in
recording the finding that plaintiff was ready and
willing to perform his part under the Contract
(Exhibit-P-41).

3. Whether the trial Court committed error in
recording the finding that equity is in favour of
plaintiff/respondent No.1 despite unilateral extension
of time in Exhibit-P-41.

4. Whether the trial Court committed error in
granting the relief of specific performance of the
contract despite default clause of return of earnest
money of Rs. 1 lac and damages of 5 lacs, to the
purchaser in Exhibit-P-41.

5. Whether trial Court committed error in
recording the findings that defendant No.3/appellant
No.2 is not a bonafide purchaser, and

6. Whether the trial Court committed error in
cancelling the sale deed in favour of defendant

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
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No.3/appellant No.3 dated 29.11.2011.”

QUESTION NOS. 1 TO 5

14. Before re-appreciating the evidence of both the parties we are
reproducing the important terms of the Contract Exhibit-P-41 as below:-

” इसिलए यह द तावेज इकरारनामा बाबत भूिम बकर बहक
े ता को िलखकर करार करता हूँ क अब उ भूिम को कसी अ य को
रहन बैय दान आ द के ारा ह तांतरण नह क ं गा तथा 6 माह म े ता
से बकर क मत का शेष पया 17,00,000/- स ह लाख पया ा कर
व भूिम का क जा े ता को दे कर े ता के हक म या े ता जसके नाम से
कहे गा उसके नाम से उ मेरे ह से क 1/3 भूिम क बकर प क
रज करवा दग
ंू ा। इसम कसी कार क कोई चुक नह ं क ं गा। य द
मेरे ारा कोई चुक क गई तो े ता को अिधकार होगा क वह मेरे व
यायलयीन कायवाह करके इस बकर सौदे क पूित करा लेवे इसमे
रोक उजर करने का मुझे या मेरे वा रसान को कोई हक व अिधकार नह
रहे गा।

बकर त भूिम के संबंध म सम त सरकार काय एवं कसी भी
कार का कोई ववाद क थित बनती है तो म व े ता े ता के साथ
जहां मेर आव यकता होगी वहा पर उप थत होकर पूरा-पूरा सहयोग
क ं गा।

                                                 इस बकर सौदे के संबंध म वशेष शत यह तय पाई है क य द
                                        े ता इस सौदे से बदले तो      े ता क द हुई बयाना रािश       पया
                                       1,00,000/- एक लाख      पया समा   हो जावेगी याने बयाना रािश े ता

मुझ व े ता से वापस पाने का अिधकार नह रहे गा। इसी कार य द म
व े ता इस सौदे से बदलु तो े ता को बयाना रािश पया 1,00,000/-
एक लाख तथा हरजाना रािश पया 5,00,000/- पांच लाख कुल पये
6,00,000/- छह लाख अदा क ं गा। यह शत हम दोन प को वीकार

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
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होने से इस अनुबंध प पर हम दोनो प ो ने अपने-अपने ह ता र कर
गवाहान क गवाह करवाई है ।

अत: यह द तावेज इकरार नामा बाबत बकर भूिम मने अपनी
राजी खुशी बद ु ती होश हवाश बहालत त द ु ती बहक े ता के िलख
दया क सनद रहे व आव य ा अनुसार काम आवे। इित दनांक
30.06.2010”

15. Counsel for the appellants have relied upon Parmal Singh (dead)
through LRs and others Vs. Ghanshyam and another reported in 2020 (2)
MPLJ 132 , T.D. Vivek Kumar and another Vs. Ranbir Chauhar reported in
2023 SCC Online SC 526, Radheshyam Vs. Bheru Singh, reported in 2024
(3) MPLJ618, C. Haridasan Vs. Anappath Parakkattu Vasudevakurup
reported in 2023 SCC Online SC 36 and Lakha Singh Vs. Balwinder Singh
and another reported in 2024 INSC 744.

16. Paragraph-11 of Paramal Singh (supra) relied by the appellant
has no bearing with the issue involved in this case because there is no case
that respondent No.1/Munnalal agreed to sale beyond the extent of his share
or agreed to alienate the specific piece of land. Now Paragraph-18 of the
T.D. Vivek Kumar (supra) is referred as below :-

“18. Thus, as per clause 2 of the sale agreement, if the
second party fails to pay the balance amount within
stipulated time, the advance will be forfeited and if the
seller fail or refuse to execute the sale deed and other
necessary document in favour of the purchaser/buyer
or in the name of his nominees within the stipulated
time, the seller will be responsible to pay double the
amount given as an advance. Therefore, on failure on
the part of the seller to execute the sale deed within the
stipulated time, the purchaser/buyer shall be entitled to
the double of the amount given as an advance. It

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
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cannot be disputed that the plaintiff being a party to the
agreement to sell is bound by the terms and conditions
stipulated in the sale agreement. Therefore, on true
interpretation of clause 2 of the sale agreement, the
learned Trial Court as well as the First Appellate Court
as such rightly refused to pass the decree for specific
performance of the sale agreement and rightly passed
the decree for recovery of Rs. 4 lakhs being double the
amount given as an advance which as such was in
consonance with the clause 2 of the sale agreement.”

17. Paragraph 37 of Radheshyam Vs. Bheru Singh (supra) is being
referred as below :-

“37. As per Conditions No.2 and 3 of the agreement, if the seller
fails to honour the agreement, then he would return the double
amount; and if the purchaser fails to make balance amount of sale
the advance would be forfeited and the agreement would be
cancelled. No right has been given to the plaintiff/purchaser to get
the sale deed executed through the Court. However, by way of
suit, he did not claim this alternative relief.”

18. Counsel for the plaintiff/respondent No.1 has relied on the Three
Judges Bench Full Bench judgment of the Apex Court in the case of Prakash
Chandra Vs Angadlal and others
r eported in (1979) 4 SCC 393 . Paragraph-
10 of the judgment is reproduced as under :-

“10. It is urged by learned counsel for the first and
second respondents that the contract for sale contains a
clause for payment of damages in case of breach of the
contract and that, therefore, damages should be
awarded instead of specific performance. A perusal of
the terms of the contract indicates that the stipulation
for damages was made only for the purpose of securing
performance of the contract and not for the purpose of
giving an option to Mohsinali and Qurban Hussain of
paying money in lieu of specific performance. Even if
a sum has been named in the contract for sale as the
amount to be paid in case of a breach the appellant is
entitled in law to the enforcement of the agreement.”

19. In Paragraph-37 of the Radheshyam Vs. Bheru Singh (supra) no

Signature Not Verified
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right was given to the plaintiff purchaser to get the sale deed executed
through the Court, but reference of contents of Exhibit-P-41 as reproduced
above transpires that such right has been mentioned in Exhibit-P-41.

20. A constitution Bench of the Apex Court in Chand Rani Vs.
Kamal Rani
(1993) 1 SCC 519 dealt on the question as to whether or not
time is the essence of the Contract in transactions of sale of immovable
properties. Paragraph-25 is being mentioned as below:-

“25. From an analysis of the above case-law it is clear
that in the case of sale of immovable property there is
no presumption as to time being the essence of the
contract. Even if it is not of the essence of the contract
the Court may infer that it is to be performed in a
reasonable time if the conditions are:

1. From the express terms of the contract;

2. from the nature of the property; and

3. from the surrounding circumstances, for example:
the object of making the contract.”

21. The circumstances surrounding the agreement dated 30.06.2010
are being illuminated below :-

“1). Munnalal filed an application (Exhibit-P-13) under Section
178 of Madhya Pradesh Land Revenue Code, 1959 for separation
of his share before the Court of Tehsildar, Manawar on
16.06.2010. The application was opposed by filing the reply on
13.12.2010 and raised the questions of title and proceedings was
stayed for a period of ninety days vide Exhibit-P-11 and brothers
of the Munnalal namely, Mohanlal and Sohanlal filed a civil suit
through plaint Exhibit-P-17 on 01.03.2011 before the Court of
Civil Judge, Class-I, Manawar claiming the ownership of total
land mentioned in Exhibit-P-41 and only right of maintenance of
Munnalal.

2). An application under Section 151 (Exhibit-

P-17) was also filed for stay of the proceedings of

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partition and the application Exibit-P-27 filed by the
brothers of Munnalal was rejected vide order dated
16.03.2011 (Exhibit-P-14) and thereafter 1/3rd share of
Munnalal was separated through partition vide order
dated 30.03.2011 by Tehsildar, Manawar.

3). Ram (DW-1), defendant No.1 himself has
admitted in Paragraph-25 of his evidence that
Munnalal never retracted the Agreement and he
himself has not retracted this agreement and never
returned the amount of consideration with five lacs
damages. It was also admitted that his father never
asked the Nilesh to complete the transaction dated
30.06.2016 within six months or after six months. In
paragraph-26 he admitted that plaintiff has sufficient
funds and also admitted in Paragraph-27 of his
statement that Nilesh has asked his father to execute
the sale deed within six months from the Agreement
dated 30.06.2010 and also admitted in Paragraph-34

that his father has apprised the appellant
No.2/defendant No.3 Smt Rekha Jain that a contract
Exhibit-P-41 has been entered with Nilesh.”

21. The other circumstance of the case are that after filing of the suit
on 01.04.2011, counsel for Munnalal marked appearance on 05.04.2011 and

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Munnalal was restrained not to alienate the suit property till the next date of
hearing and the interim protection was further extended vide order dated
15.04.2011, 18.04.2011, 19.04.2011, 25.04.2011 and plaintiff/ respondent
No.1 filed an objection before Sub-Registrar, Badnawar through Exhibit-P-
26 on 28.04.2011, but the sale deed (Exhibit-P-27) was got registered on
29.04.2011 before the Sub-Registrar, Manawar as Document No.103.
Accordingly, the findings of the trial Court that Rekha Jain has notice of the
Agreement Exhibit-P-41 and she is not a bonafide purchaser in terms of
Section 41 of the Transfer of Property Act does not call for interference
because taking reasonable care to ascertain that the transfer had power to
make the transfer has acted and has acted in good faith does not satisfy.

22. Now the construction of terms mentioned in ‘D’ to ‘D’ part in
Exhibit-P-41 is before us. This transpires further question whether this term
was inserted as a damages for the breach of Contract or it was inserted to
ensure the performance of the Contract. Prior to ‘D’ to ‘D’ part there is
stipulation in case of default that the plaintiff has a right to execute the sale
deed by initiating the proceedings before the Court and assurance of the
execution of the sale deed. Thereafter, there is a stipulation that in case any
dispute arises then seller will co-operate with purchaser to settle the dispute.
Interpreting this ‘D’ to ‘D’ part in the above factual position and the
admission of the Appellant No.1 that plaintiff/respondent No.1 has asked his
father to execute the sale deed and his father never repudiated the Contract,
the condition of ‘D’ to ‘D’ is nothing more than stipulation to ensure the
performance of Contract and does not dis-entitle the plaintiff/respondent

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No.1 for specific performance of Contract and trial Court did not committed
error in granting the relief of specific performance of contract Exhibit-P-41.
The reference of Unilateral insertion of extension of time is in consonance of
the proceedings between Munalal and his brothers and filed even prior to
the Agreement also does not affect the right of the plaintiff.

23. Now, Paragraph-85 of the C. Haridasan Vs. Annappath
Parakkattu Vasudevakurup
(supra) is reproduced below :-

“85. Further, regarding the factors that ought to guide the
Court’s decision in decreeing a suit for specific
performance, particularly when the agreement of sale has
not been given effect to within the time stipulated therein,
the following directions issued in an earlier decision
i n K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, were
reiterated:

(i) The courts, while exercising discretion in suits for
specific performance, should bear in mind
that when the parties prescribe a time/period, for
taking certain steps or for completion of the
transaction, that must have some significance and
therefore time/period prescribed cannot be ignored.

(ii) The courts will apply greater scrutiny and strictness
when considering whether the purchaser was “ready
and willing” to perform his part of the contract.

(iii) Every suit for specific performance need not be
decreed merely because it is filed within the period
of limitation by ignoring the time-limits stipulated
in the agreement. The courts will also “frown” upon
suits which are not filed immediately after the
breach/refusal. The fact that limitation is three years

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does not mean that a purchaser can wait for 1 or 2
years to file a suit and obtain specific performance.

The three-year period is intended to assist the
purchasers in special cases, as for example, where
the major part of the consideration has been paid to
the vendor and possession has been delivered in
part-performance, where equity shifts in favour of
the purchaser.”

24. Efforts of the plaintiff/respondent No.1 discloses that he has
satisfied all the parameters of readiness and willingness and findings of the
trial Court are based on proper appreciation of evidence.

25. Lakha Singh Vs. Balwinder Singh (supra) also does not help the
appellants/defendant No.1 and questions Nos. 1 to 5 are answered against the
appellant/defendants.

QUESTION NO.6

26. Now the question arises whether trial Court was justified in
declaring the nullity of sale deed executed by Munnalal in favour of
appellant No.2/defendant No.3. The proper course in such matters has been
suggested in Lala Durga Prasad Vs. Lala Deepchand reported in AIR 1954
SC 75. Relevant Paragraph is being mentioned below :-

“In a suit instituted by a purchaser against
the vendor and a subsequent purchaser for
specific performance of the contract of
sale, if the plaintiff succeeds, the proper
form of the decree to be passed 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

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
17:02:59
NEUTRAL CITATION NO. 2024:MPHC-IND:36673

16 FA-504-2014
which resides in him to the 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.”

27. In the above legal position, trial Court committed error in
setting aside the sale deed (Exhibit-P-27) executed by Munnalal in favour of
appellant No.2. The proper form of decree was to direct specific
performance of contract between the vendor and the plaintiff and direct the
subsequent transferee (appellant No.2/defendant No.3) to join in the
conveyance so as to pass on the title which resides in him to the
plaintiff/respondent No.1. Question No.6 is answered accordingly.

28. Accordingly, the relief 19(3) granted in the form of the sale deed
executed by defendant No.1 to defendant No.3 (Rekha Jain) is void and is
not binding on the plaintiff is set-aside and affirming the relief No.19.1 and
19.2 and 19.3 is modified to the effect that the appellant No.2/defendant
No.3 shall join the appellant No.1 in the conveyance.

29. Accordingly, the appeal challenging the relief No.19.1 and 19.2
of the decree is dismissed and relief No. 19.3 is modified.

The decree be drawn, accordingly.

The parties shall bear their own costs.

(GAJENDRA SINGH)
JUDGE

rashmi

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
17:02:59
NEUTRAL CITATION NO. 2024:MPHC-IND:36673

17 FA-504-2014

Signature Not Verified
Signed by: RASHMI
PRASHANT
Signing time: 20-12-2024
17:02:59

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