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TMI Blog1933 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... r himself and as guardian of his two minor sons, defendants 2 and 3, in favour of defendant 4 at the price of ₹ 15,000. 3. Defendant 1 did not appear to defend the suit, but defendants 2 and 3 put in a written statement by their guardin ad litem, denying the plaintiff's contract, and alternatively in the event of the contract being held proved, denying that defendant 1 was entitled to alienate their interests as the sale was not for family necessity or for their benefit. All the defences of defendants 2 and 3 were rejected by the Subordinate Judge, and no appeal was taken against that decision to the High Court. Accordingly, the issue now lies between the plaintiff-appellant and defendant 4 now respondent 1. At the trial defendant 4 sought to prove that he had concluded an oral agreement with defendant 1 for purchase of the property in suit at the price of ₹ 15,000 on 23rd November 1926, and the appellant sought to establish an even earlier agreement for their purchase at ₹ 13,000. Further defendant 4 sought to prove that the appellant's agreement of 26th November 1926 was not genuinely made on that date, but was concocted at a date subsequent to 22nd D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this view. It is moreover clear that the price agreed upon was the fair value of the whole. The second question arises under Section 27(b), Specific Belief Act. Three questions of fact arise in the case of the later transferee, namely, as to payment of his money, as to his good faith, and as to the absence of notice to him of the original contract. The Subordinate Judge did not accept the evidence of the appellant's two witnesses, who spoke to the knowledge of defendant 4 of the prior contract, and equally clearly he did not accept the latter's denial of such knowledge, for he states: Defendant 4 has not produced satisfactory evidence to show that he had no notice of the plaintiff's contract, neither has he established that he was a bona fide purchaser for consideration. 7. Defendant 4 had not adduced any other witness than himself on this point. On the question of payment of ₹ 10,500, which was to be paid in cash at the time of registration, defendant 4 was the only witness, and the learned Judge states: He (defendant 4) states that he paid ₹ 10,500 to Parshadi Singh at the time when he executed the kabala. Had that been so, defendant would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , except a transferee for value who has paid his money in good faith and without notice of the original contract. 10. In their Lordships' opinion, the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships opinion, it is clearly for the transferee to establish the circumstances which, will allow him to retain the benefit of transfer which prima facie he had no right to get. Further the subsequent transferee is the person within whose knowledge the facts as to whether he has paid and whether he had notice of the original contract lie, and the provisions of Sections 103 and 106, Evidence Act, 1872, have a bearing on the question. The plaintiff does not necessarily have knowledge of either matter. In a case in 1862 before this Board, Varden Seth Sam v. Luckpathy Royjee Lallah (1881) 9 M.I.A. 308, an equitable lien by deposit of title deeds was enforced against a subsequent transferee of the property. In delivering the judgment of this Board, Lord Kingsdown stated: Though both the third and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Official Assignee. 12. It was held by this Board, upon construction of the section, that the onus is upon the Official Assignee to prove that a conveyance which he is seeking to set aside thereunder was not made in good faith and for valuable consideration. In their Lordships' opinion, that section is not in pari causa with the section of the Specific Relief Act in several respects. In the first place, the structure of that section is different, in that it does not provide a general rule with a permitted exception, but defines the area of voidance, and the prior settlements that are outside that area are expressly excluded from invalidation by Section 52 of the Ordinance. In the second place, the operation of the section is the opposite of the operation of Section 27, Specific Relief Act, in that it renders void an earlier right in favour of a later one. That decision was followed in Official Receiver v. Chettyar Firm A.I.R. 1931 P.C. 75 which arose under Section 53, Provincial Insolvency Act, 1920 and in Pope v. Official Assignee A.I.R. 1934 P.C. 3, which arose under Section 55, Presidency-towns Insolvency Act, 1909. The provisions of these two Acts are similar to those of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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