2019 (10) TMI 1095 - SC - Indian Laws

Suit for specific performance of an agreement of sale - plea of estoppel - share in the property - Time limitation - HELD THAT - It is clear that there was no possibility of erroneous beliefs in the mind of the plaintiffs as to title position in the property. No doubt about it that defendant No.1 has acted as a power of attorney, but at the same time, did not act in his capacity as the owner of the property. The ownership of K.B. Ramchandra Raj Urs was known to the plaintiffs. In spite of that the plaintiffs have not set up the case to bind the share of K.B. Ramchandra Raj Urs. They have not pleaded in the plaint that K.B Ramchandra Raj Urs owned the property. There is no whisper as to the title of K.B. Ramchandra Raj Urs in the plaint. They needed to plead the facts to attract the plea of estoppel. That has not been done. Thus, the agreement which had been executed was not concerning share of defendant No.1, but of late K. Basavaraja Urs as his power of attorney. It would be appropriate to modify the decree passed by the courts below to the extent of 50 per cent of the shares of the deceased late K. Basavaraja Urs and to set it aside with respect to the remaining share of K.B. Ramchandra Raj Urs (defendant No.1) in the property, since the property devolved under section 15 of the Hindu Succession Act. The plaintiffs to be entitled only to the extent of share in the suit property. The decree to the remaining extent is set aside. The plaintiffs would not be entitled to refund of any consideration as by now the worth of property has increased manifold - appeal allowed in part.

Summary

Issues Involved:
1. Specific performance of an agreement of sale.
2. Validity of the agreement and receipt of sale consideration.
3. Limitation period for filing the suit.
4. Estoppel and fiduciary relationship.
5. Division of property and entitlement of shares.

Detailed Analysis:

1. Specific Performance of an Agreement of Sale:
The appeals were preferred against the judgment of the High Court affirming the trial court's decree for specific performance of an agreement of sale. The plaintiffs sought specific performance concerning the suit property, which was inherited by Princess Leelavathi and subsequently devolved on late K. Basavaraja Urs and defendant No.1.

2. Validity of the Agreement and Receipt of Sale Consideration:
The agreement to sell was executed on 24.4.1979, with an initial consideration of ?1,00,000 paid on the same day and the balance of ?50,000 paid on 1.6.1993. The defendant No.1 contended that the agreement was fabricated and that he had signed blank papers. However, both the trial court and the High Court disbelieved this defense, noting that the defendant No.1 had admitted his signatures on the agreement and the receipt, and the plaintiffs had produced the original stamped receipt dated 1.6.1983 (Exhibit P19).

3. Limitation Period for Filing the Suit:
The defendants argued that the suit was barred by limitation. However, the courts found that the plaintiffs were in continuous possession of the property in part performance of the agreement and that the suit was filed within the permissible period after the defendant No.1 failed to execute the sale deed despite receiving the full consideration.

4. Estoppel and Fiduciary Relationship:
The defendants claimed that the 2nd plaintiff, who was a close relative and legal advisor to late K. Basavaraja Urs, misused his position to create the agreement. However, the courts found that there was no fiduciary relationship at the time of the agreement as the 2nd plaintiff had become a Judge of the High Court by then. The plea of estoppel was not accepted as the plaintiffs were aware of the property’s title and the agreement was executed by K.B. Ramchandra Raj Urs as a power of attorney for his father, not in his individual capacity.

5. Division of Property and Entitlement of Shares:
The High Court held that the property devolved on late K. Basavaraja Urs and defendant No.1 under section 15 of the Hindu Succession Act, 1956. The Supreme Court found that the agreement was executed only concerning the share of late K. Basavaraja Urs, not the share of defendant No.1. The plaintiffs were aware of the equal shares of K. Basavaraja Urs and K. B. Ramchandra Raj Urs in the property. Consequently, the Supreme Court modified the decree to entitle the plaintiffs to only 50% of the property, corresponding to the share of late K. Basavaraja Urs, and set aside the decree concerning the remaining 50% share of K.B. Ramchandra Raj Urs.

Conclusion:
The Supreme Court directed the trial court to divide the property into two equal proportions, granting the plaintiffs entitlement to half of the property and setting aside the decree for the remaining half. The appeals were allowed to the extent of modifying the decree, with no costs awarded.