AND v. TIIE HON'BLE SRI JUSTICE VAKITI RAMAKRISHNA R-EDDY

Judgment

(Per Hon',ble sri Justice vakiti Ramaltishna Reddy) This Appeal Suit is filed by the appetlant/ptaintiff against the Judgment and Decree dated 25.07.2012 in O.S. No. 8 of 2008 on the file of I Additiona[ District Judge, Khammam, wherein the suit filed by the ptaintiff against the defendant for specific performance was dismissed 2 For the sake of convenience the parties will be referred as per their status before the trial Court' I. BRIEF F

3. The sole ptaintiff instituted o.S. No. 8 of 2008 against the sole defendant seeking Specific Performance of an Agreement of sale in respect of agricultural land admeasuring Ac-2-08 guntas in sy'No'9 of Raghunadhapalern Viltage, Khammam Urban Mandal' Khammam District (hereinafter referred to as "the suit schedule property")' lt is the case of the plaintiff that the def,endant, having purchased the suit schedule property through a 'sada-binama' (unregistered agreement) 2 from the original owners namely one Katragadda Sreeramulu and Nelapatla .lagannadham, subsequently offered to sell the same to the plaintiff at the rate of {7,65,000/- per acre. Accordingly, an agneement of sale war; executed by the defendant on I I.OZ.ZOOS in favour of the plaintiff and the plaintiff had paid :rn amounr of Rs.4,00,000/- on the date of exr.cution of the Agreement of Sale to the defendant towards advance sale consideration. The plaintiff also paid a further sum of Rs.20,000/- to the defendant on 13.02.2005 which was endorsed on the back side of the agreement and thar the plaintiff agreed ro pay the balance corsideration ofRs.12,63,000/- on or before l,'October 2005, subject to condition that the defendant obtains NOC, carries out measurement of the suit land, apart from obtaining a registered sale deed from the original owners. Despite the plaintifls readiness and repeated detnands, including a panchayat held in December, 2007 and also sending, atelegraphic notice dated 10.02.2008, the defendant failed to perform his part of the contract, compelling the plaintiff to institute the above suit seeking specific performance or in the altemative, for refund of Rs.4 ,20,0001- with interest at the rare of 24o/o per annum.

In reply to the plaint averrnents, the defendant filed his written statement i,nter-alia mainly contending that the document of 3 AKS,J & VRKR,J AS-12A-2014 Agreement of Sale dated t I .02.2005 is not admissible in law apart from being barred by time. It was further contended that the Agreement of sale itself speaks that the suit property was not transferred or conveyed fully in favour of the defendant and as such no person can transfer a better title than what he possesses and when the defendant himsetf is not the owner, question of selling the property to the plaintiffdoes not arise. II. Y

5. Basing on the above pleadings, the trial Court framed the following issues for trial: l. Whether the agreement of sale dated 11.02.2005 is true, valid and binding on the defendant or is it unenforceable or voidable document as pleaded by the defendant?

2. Whether the plaintif,f has been ready and witting to perform his part of contract?

3. Whether the defendant procreated to perform his part of contract?

4. Whether the suit is bad for non-joinder of any necessary party?

5. Whether there was no delivery of possession?

6. Whether the suit is in time? 7. Whether the plaintiff is entitled to the relief of specific performance as prayed for? 4 AS l2a 20t4

8. To u'hat relief? III. VID

6. During the course of trial, the plaintiff himself was examined as PWI and PWs 2 and 3 were examined while Exs.Al to A,3 were marked on his behalf. On the other hand, the defendant himself was examined as DWI and got marked Ex.Bl on his behalf. IV. FINDINGS O THE COURT:

7. After considering the rival contentions, the Trial Court dismissed the suit on25.07.20r2. The trial court considered the issue Nos. l to 5 which are ancillary to issue No.7 together, whereas the issue No.6, which is with regard to the limitation was considered separately while recording the findings thereon separately. The rrial Court specit'ically recorded the findings against the plaintiffon issue Nos.t to 5 and 7 by specifically holding that the plaintiff is not entitled fbr the relief ot specific perfi>rmance of agreement of sale dated I1.02.2005, as the def-endant hirnself was not the owner of suit property, further the suit was bad for rvant of issuance ofprior notice and for non _ joinder of necessary patties. However, issue No.6, which is with regard to limitation, the trial Court held in favour of the plaintiffholding that rhe suit was filed within the limitation prescribed. 5 AKSJ A VRK&J AS-12A_2014

8. Aggrieved by the dismissal of his suit for specific performance, the ptaintiff filed the present Appeal Suit to set aside the impugned judgment and decree. V. STIBMISSIONS OF THE P RTIES: A) Submissions on behalf of the Plaintiff (Aopellant)

9. The plaintifPs primary submissions before this Court may be summarized as follows: a. Excculion and wledgment: Ex.At is a valid agreement of sale executed by the defendant on 1,1.02.2005. The document records receipt of Rs. 4,00,000/- as advance sale consideration and an endorsement dated L3.02.2005 records further payment of Rs. 20,000/-. The plaintiff produced Ex.Al in original and examined one of the attesting wibresses (PW2) who confirmed execution of Ex.Al in his presence. b. Performance Conditions: The plaintiff was ready and willing to pay the balance consideration and to perform his obligations, subject to the defendant obtaining NOC, rneasurement and registration from the original owner. The plaintiff complied with the contractual conditions 6 AKS,J & VRI(R, J AS-t 28_2014 within the time fixed and issued telegraphic notice (Ex.A2) and held a panchayat in December 2007. He, therefore, was entitled to specific performanoe or, failing that, to altemative relief in the form of refund of the adva.nce amount. c Corroborative Evidence: The plaintiff relied on the depositions of PWs 2 z:.lrrd 3, who corroborated receipt of payments in the presence of witnessr:s. Once an acknowledgment of payment is produced in the agreement. the burden shifts to the defendant to disprove it. d. Limtitation: The plaintiffcontended that the suit was filed within the period prescribed for specific performance (balance consideration fixed tbr Crctober 2005; suit filed in February 2008, wlthin rhree years Itom the date when performance was refused). e Relief Soueht: Specific performance of Ex.Al; in altemative, refund of [i.s. 4,)0,0001- together with interest (the plaint seeks interest at 24o/o p.a. ) and costs B. Submissions on behalf of the Defe nda nt (Resp o n d e n tl :

10. The defendant's main submissions are summarized as fbllows: 7 AKS,J & [/RKR,J AS 128 2014 a. No Title/Asreement-holder: The defendant contended that he was not the owner of the suit schedule property but only an agreement holder from K. Sriramulu and N. Jagannadham (who, in turn, are not the original owners).No registered sale deed in favour of the defendant or his predecessors was placed on record. As such, the defendant cannot transfer a better title than he possesses and Ex.A[ cannot be enforced to obtain a registered satre deed. b. Forsery/Interoolations: The defendant denied having executed Ex.Al and alleged the document was forged. He produced Ex.Bl (a xerox copy) to show interpolations and contended that PW2's evidence was not retiable. DWI denied execution of Ex.Al and asserted that the plaintiff s claims are fabricated. c. Povment Not Proved / Credibilitv Issue: The defendant denied receipt of the advance consideration and submitted that the plaintiff failed to produce separate stamped receipts to show payment; that the atleged payments were in cash and improbable; and that the plaintiff failed to prove his financial capacity to make the balance payment. d. No Lesal Noticdlimitation: The defendaRttenied that any prior legal notice was issued before the suit and contended that the 8 AKSJ& VRI(R, J AS_124_20t4 telegraphic receipt (Ex.A2) is not sufficient to establish legal notice. He also pleadr:d that the suit was barred by limitation. e. Non-ioinder/Relief: The defendant argued that original owner Banoth Tavuriya and subsequent agreement-holders were necessary parties for adjudication of a prayer for specific performance and that the suit wls thus vulnerable for non-joinder. The defendant urged to confirm thrl dismissal of the suit and contended that the Trial Court was right in rej,:cting the plaintiffs claim for specific performance. vI. UES FOR CONSIDERATI I l. [n the light of the pleadings, evidence and the contentions advanced in this appeal, we find that following key issues arise tbr consideration I ) Whether the Agreement of Sale dated I 1.02.2005 has been duly proved and validly executed? 2) Whether the plaintiff can seek enforcement of &gre€rneot of sale dated 11.02.2005 against the deferdant who himself is an agreement holder from anotrer set of agreement holders from the original owo€tS? 9 AKS,J A!/RKR,J AS_l2A-2014 3) Whether the ptaintiff established his continuous readiness and willingness to perform his part of the contract? 4) Whether the suit was bad for non-joinder of necessary parties? 5) Whether the plaintiffhad proved the payment of advance sale consideration, if so, whether the plaintiff is entitled for grant of alternative relief of refund of advance sale consideration? 6) Whether the plaintiff is entitled to the equitable relief of specific performance or whether refusal thereof by the trial Court was proper? VII. ANALYSIS & DISCUSSION: tFs I

12. [t is contended by the learned counsel for the defendant that Ex.A I Agreement of Sale date d 11.02.2005 was llever executed by the det-endant in favour of the ptaintiff in-as-much as the defendant specifrrcally contended in the written statement as well as in his deposition that the subject agreement of Sale (Ex.A I ) was forged by the plaintiff. Further, the defendant also contends that since the defendant is not the owner of the property, suit itself is not maintainable particutarly it cannot be enforced under law. 10 l,rXKR. J AS_t2A 20t4 ^Ks,J&

13. It is to be seen that the plaintiff has produced original of the agreement of sale under Ex.Al and also examined one of the attesting witnesses of Ex.A I i.e., PW2 to prove the execution of the same. On the other hand, the defendant produced a true copy of Ex.Al which was marked as l3x.B I to prove some interpolations or corrections in Ex.Al.

14. The evidence adduced on behalf of DWI throws some light on the executi,rn of Ex.Al aparr from producing Ex.Bl on behalf of DWl. PWI categorically stated that Ex.Ar was executed in the presence of two attesting u,itnesses and one of them is pW2, who had spoken and confirmed :hat Ex.Al was executed and that he was present at the time of executicn of rhe same. PW2 also stated that plaintiff had paid an amount of Rs.4,00.000/- to the defendant at the time of execution of Ex.Al. Hrtwever, PW2 stated that he was not aware of schedule of property and also rhe conrenrs ofEx.Al which has been pointed out by the trial C.urt while gi'ing tindings against the plaintiff and thereby holding th€,t the evidence ol pW2 is not helpful nor can improve the case of the plaintilt/PWl

15. However, it is revealed from the documents, particularly Ex.Al as well as Ex.l] I that DW l had in fact entered into the agreement of sale dated I 1.02.:005 with the plaintiff. Further, the very claim made 11 AKS,J & VRKR, J AS_128.-2014 by the defendant that the plaintiff forged Ex.Al document and that he had produced Ex.Bl (true copy of Ex.Al) to show that the plaintiff had interpolated the contents of Ex.Al, would by itself establish that the defendant had in fact, executed the agreement of sale under Ex.Al in favour of the plaintiff.

16. [t is also to be noted that despite taking a specific stand by way of written statement by the defendant that Ex.Al agreement of sale was forged by the plaintiff and that he never signed or executed the said document, he did not explain the reason for not taking any steps for sending the said document for its examination to the forensic science laboratory for obtaining an expert opinion.

17. Thereflore, it is clear that the defendant intended to take advantage of the legal enforceability of Ex.Al and thereby purposefully denied execution of Ex.Al. In fact, DWt during the course oI cross - examination, admifted both t]re material facts namely that he did not execute the Ex.Al, agreement of sale and at the same time, asserted that the said Agreement cannot be enforced. These two statements being inconsistent with each other are mutually destructive and inherently contradictory. Such self-contradictory testimony of t2 AKS,J&VRKR,J AS_12A_2014 DWl materially weakens his credibility and renders his version wholly unreliable. Thus, issue No.l can be answered in favour of the plaintiff. On issue No.2 (Reeardins enforceability of Ex.Al)

18. The plaintiff filed the suit seeking specific performance of agreement of sale dated 11.02.2005 (Ex.Al) in respect of the suit schedule property but the crucial question is whether the said document under Ex.A.l can be entbrced under law. The reason for analyzing this question is that the defendant specif,rcally stated in his written statement that the agreement of sale cannot be enforced under law for the specific reason that the recitals as incorporated under the agreement of sale under Ex.Al itself prove that the defendant himself is not the owner of the suit schedule property, rvhich is recorded in the said agreement of sale itself as it is stated therein that the defendant himself had obtained an agreernent of sale dated I1.10.2004 from K. Srirarnulu and N. Jagrlnnadharn, who had in turn also obtained agreement of sale dated 16.0J).2004 frorn the original owner of the suit schedule properly namely, Banoth Touriya. Thus, it is clear that neither the defendant nor his vendonl are the owners of, the property to deal with the same in order to offer the same to any third pamy, in the present case, to the plaintiff. 13 AKS,J& VRKR, J AS_r28_20r4

19. It is settled law that agreement of sale in respect of any immovable property does not convey title in favour of the purchaser under the agreement. [n view of Section 54 of the Transfer of Propemy Act, 1882, an agreement of sale does not create interest in the property. The only mode by which an immovable property worth more than Rs.100/- can be sold is by a sale deed duly registered in accordance with the Indian Registration Act, 1908. Section 54 of the Transfer of Property Act, 1882 categorically provides that a contract for sale of immovable property does not by itself create any interest or charge on such property.

20. This legal position has been laid down by the Honourable Supreme Court in Suraj Lamp and Industries Private Limited v. State of Haryana and othersl, wherein it was held that unregistered agreement o[ sale, even if coupled with possession do not convey title or create any interest in the immovable property. It was also further claril'ied that such documents are insufficient to complete the sale unless duly registered and followed by proper conveyance. The relevant paragraphs are extracted hereunder: r12012r I S('C 656 t4 AKS,J &WKR, J AS_l2E 2014 " 16. liection 54 of the TP Act makes it clear lhat a contract of sale, that is, an a,greemenl of sale does not, of itse$ create any interest in or charge on sw:h property. This Court in Narandas Karsondas v. S.A. Komtam [(1977) 3 SCt: 247] observed: (SCC pp. 254-55, paras 32-33 & 37) "32. A contract of sale does not of itself create any interest in, or charge on, the properly. This is expressly tleclared in Section 54 of the Trensfer of Property Act. (See Ram Baran Prasad v. Ram Mohit Hazra [AIR 1967 SC 744 : (1967) I SCR 293] .) The Jiduciary chorauer of the personal obligation created by a contract for sale is recogz,ised in Section 3 of the Specifc Relief Act, 1963, and in Sectton 9l of the Trusts Acl. The personal obligation crealed by a contract of sale is described in Section 40 o.f the Trttnsfer of Property Act os an obligation arising out of contract antl ctnncxad. to the ownership of properly, but not amounting to an interest or eascment lherein.

33. In India, the word 'transfer' is dc.fined with reference to the word 'convey'. -.. The word 'convevs' in,Seclion 5 of the Transfer of Properj; trg1 is used in the wider scnse of convcying ownership. *++

37. ... ;hat only on execution of conwyance. ownership passes from one pafiy to anolher .... "

17. In llambhau Nandeo Gajrc v. Naral,an llqtuii Dfuitra tQ004) S SCC 614l this r2ourt held: (SCC p. 619. paru t(t) " 10. Protection providetl uruler Secriott 53-.1 dthe Act to the proposed transfcree is a shield only uguinsl lhc transferor. It disentitles the lransferor .from clisturhing the possession of the proposed transferee who is put in posst:ssitttt itt pursuance to such an agreement. It has nothing tu do with thc ownership of the proposed transferor who remains.full ot,ner ql thc propertv titl it is legally conveye,l by executing u rceistcrcd sula tlcctl in fovour of the transfente. Such a right lo protect posscssion against the proposed vendor <annol be pressed inn sen,ict uguinst u lhird purty." 18. It is thus clear thctt a trunsf'cr of.intnux,able propcrty by way of sale can only be by a deed of cowclanct (sule tfuctlt. ln the ahsence of a deed of conveytnce (tluly stamped und regi.rlerctl us required hy law), no right, title or interest in dn immovahlc proltart). L.u,t h., transferrcd.

19. Any conlracl of sule (ugreenrcnt to sell) x,hich is not a registered deea of conveyunce (dawl oJ. sulel toultl .fitll short of the requirements of Sections 51 and.j54l the I P ,lat uul \.ill not conler any title nor transfer a4, interest in an imnnvahlc pr(tperh. (excepl b the limited right granted under Sectiott 53-A of-tha Tp ,lttt. .lcutrding b the Tp Act, an agreement of sale, whethet v,ilh rxtssessittn u. withoul ltossession, is not a 15 AKS,J & VRKR, J AS_128_2014 conveyance. Section 54 of the TP Act enacts tlat sale of immovable property can be made only by a registered instrument and an agreement.of sale does not create any interest or charge on its subject-matter."

21. There cannot be any dispute on the principle that agreement of sale is not a title and that title or ownership of immovable property can only be conveyed by way of registered sale deed. The Honourable Supreme Court in a recent judgment in Vinod Infra Developers Limited v. Mahaveer Lunia and others2 while referring to various judgments rendered by the Honourable Supreme particularly in Cosmos Cooperative Bank Limited v. Central Bank of India3, wherein it was held that the agreement of sale is not a conveyance and it is not a document of title or deed of transfer of properly and does not convey any ownership, right or title, reaffirms the fundamental legal principle that immovable property can only be transferred through a registered conveyance deed. The agreement of sale whether registered or unregistered even coupled with possession or the pow€r of attorney, cannot substitute the sale deed. Therefore, executing an agreement of sale is not sufficient to obtain ownership. The transaction must culminate into a registered sale deed to be legalty enforceable. A sale '!2025 SCC Onlinc SC I l0{l '2oz5 scc online 352 t6 ATS,J& gRKR. J AS t28-20t4 deed is the final legally binding instrument that effects the transfer of title. It must be duly executed, stamped and registered under the Registratior. Act, 1908. A registered sale deed is conclusive proof of title or ownership for all purposes. Moreover, in M.S Ananthamrrrthy v. J. Manjulaa, it was held by the Honourable Supreme Court that an unregistered agreement to sell does not and cannot by itself create or transfer any right, title, or interest immovable property.

22. In that view of the matter we are of the opinion that the plaintiff is not entitled to seek specific performance of agreement of sale under Ex.Al against the defendant particularly seeking to execute a registered sale deed in respect of suit schedule property as the defendant himself is an agreement holder of the suit schedule property fi.orn third parties narnely K. Sriramulu and N. Jagannadham, who are also not the owners ofthe propelty. Since the defendant cannot be treated as owner ofthe property, which is also evidenced by Ex.Al, the plaintiff cannot enforce the said agreement of sale as against the defbndant for execution of registered sale deed in respect o[ suit schedule property. r 2025 INSC 273 L7 On issue No.3 (Readiness & Willinsness):

23. It is one of the contentions of the defendant that plaintiff never expressed his readiness and wiltingness and that plaintiff was never ready and willing to perform his part of contract. On the otlrer hand, the learned counsel for the plaintiff contended that the plaintiff was always ready and wilting to perform his part of contract particularly to pay balance sale consideration and obtain registered sale deed. To prove his readiness and wiltingness, the plaintiff produced Ex'AZ telegraph receipt to express his intention of obtaining registered sale deed by paying balance sale consideration. The trial Court recorded a finding that Ex.A2 did not show as to for which purpose the notice was given and what are the contents therein and that rnere receipt of telegraph notice cannot be considered that there exists legal notice- Here we have to examine as to whether issuance of notice before filing suit is mandatory or not.

24. This Court in M. Rangaiah v. T.V. Satyanarayana Rao and anothers categorically held that the suit without issuing any legal notice demanding performance is not maintainable. Similarly in s 2009 (6) ALT 7069 18 P. Chiranjieeva Rao v. Busi Koteswar Rao6 it was hetd that issuance of a notice is a condition precedent for seeking specific performance. However, it is settled principle that for the purpose of having a valid cause of action and right to sue, notice, is a requirement which cautions the other side that in the event of his failure, the legal remedies will be sought for. But in certain circumstances, the non-issuance of notice may be not vital or fatal and the same would depend upon the facts and circumstanr:es of each case. tn the present case though PWt claimed that he had issued telegraphic notice under Ex.AZ,, during the course of cross examination he had categorically stated that no notice was issued before fiting of the suit. This nullifies the claim of the plaintiff in Ex.A2. 25 In C,S.Venkatesh v. A.S.C. MurthyT, the Honourable Supreme Court on consideration of various decisions culled out what is implied by the words "ready and willing". The relevant paragraph is extracted hereunder: "The words 'ready and willing' imply that the pluinti/l w.as prepa,ed lo carry out those parts of the contract to their logical entl so .far as they depend upon his performance. The continuous readiness and wtlltngness on the part of the plaintif/ is u condition precedent to grant the relief of performance. IJ'the pluintiff'Jhils to 'i 20 l r (61 ALT 2(i t ; (2O2Ol 3 SCC 230 19 AKS,J& IZRKR, J AS_t2A_2014 either aver or prove the same, he must fait. To adjudge whether the plainttlf is ready and willing to perform his part of contract, the court must take into consideration the conduct of the plaintiffprior, and subsequent to the filing of the suit along with other attending circumstances. The amount which he hos to pay the defendant must be of necessity to be proved to be available. Right from the date of the execution of the contract till the date of decree, he must prove that he is ready and willing to perform his part of the contrsct. The court may infer from the facts and circumstances whetlrcr the plaintiffwas ready andwas always ready to perform his contract." 26. It is to be noted that to succeed in a suit for specific performance, the requisite pleadings and proof that are required of a plaintiff to succeed in a suit for specific performance are succinctly captured in a recent decision of the Honourable Supreme Court in U.N. Krishnamurthy v. A.M. Krishnamurthy8. The relevant paragraph is extracted hereunder: "To aver and prove readiness and willingness to perform an obltgation to Wy money, in terms of u contract. the plaintiff would have to make speciJic statements in the plaint und adduce evidence to show availability offunds to make p(4:ment in terms oJ'the contract in time. In other words, the plaintiff'w'ould have to plead that the plaintiffhad suffictentfunds or v,es in a po.sition to raise funds in time to discharge his obligation under the contract. If'the plaintiff does not have sffictentfunds with him to discharge his obligations in terms of a contract, which requires payment o-f money. the plaintiffwould have to speciJically plead how the funds would he available to him. To cite an example, the platntiff may aver and prove. h.y udducing evidence, an arT angement wtth a financier .fttr dishursement of udequate frnds for timely compliance with the terms untl conditbns of a contract involving payment of money. "

27. What follows from the above noted decision, is that the plaintiff should not only always be ready and willing but also aver and prove the I l2023l 11 SCC 775 20 AKS,J& VRKR,J AS 124 2014 same in the pleadings. A perusal of the plaint proves that such readiness and willingness throughout, is absent. Therefore, we hold that the pl:rintiff failed to establish his readiness and willingness to perform his part of contract.

28. [n ecuity as well as in law, the contract constitutes rights and regulates liabilities of the parties. The other aspect involved in this case is that on the issue No.4 framed by the trial Court under the impugned j,.rdgment is that the suit is bad for non -joinder of necessary parties. While dealing with the said issue, the trial Coun held that since the de:fendant is not the owner of the suit schedule property, if at all plaintiff rvishes to seek specific performance, it is necessary on the part of the plaintiff to add the original owner namely, Banoth Tauriya and subse<;uent agreement holders to enforce the right. The non- joinder of these parties also makes the suit not maintainable.

29. The leamed counsel for the plaintiff submits that the finding of the trial court regarding non-joinder of necessary parties is unsustainable, as in a suit for specific performance it is sufficient to implead only the executants of the agreement, and neither the original 2t owner nor subsequent agreement holders are necessary parties. On the other hand, the learned counsel for the defendant contends that the suit is not maintainable on account of non-joinder of necessary parties i.e., the original owner Banoth Tauriya and agreement holders from the original owners (vendors of defendant).

30. In Kasturi v. Iyyamperumale the Honourable Supreme Court observed that in a suit for specific performance, only the parties to contract or any legal representative of a party to the contract or a transferee from a party to the contract are necessary parties. Further, the Honourable Supreme Court in Singh Bhatia v, Kiran Kant Robinson and othersl0, Baluram v. P.Chetlathangam and otherstr and Mumbai International Airport Pvt. Ltd v. Regency Convention Centre and Hotels and othersr2 has reaffirmed the ratio laid down in Kasturi's case (supra).

31. Even otherwise, there is no privity of contract between the plaintiff and the agreement holders namely K. Sriramulu and N. Jagannadham, who had in turn obtained agreement of, sale from the q (2oo5l 6 scc 733 'o AIR 2019 SC 3577 r r 1to 15) t3 SCC 579 rz llolo) 7 scc 417 22 original o\ryner Banoth Tauriya and with that of the original owner Banoth Tarrriya. Thus, the agreement of sale executed by the defendant in favour c,f the plaintiff is not binding on such third parties particularly the original owner and his agreement holders (who had in turn executed agreement in favour of defendant) who are no way concerned with transaction between the plaintiff and the defendant. Moreover, the defendant is not empowered in any manner under the agreement of sale dated t t . 10.2004 which was obtained by him from K. Sriramulu and N. Jagannadham to deal with the property or to execute or create third party rights over the suit schedule property. When it is the case of the defendant himself that he is not the owner of the suit schedule property, he could rrot have ventured to execute any such agreement of sale in favour of the plaintiff. In any case, in the absence of any such power or authorisation fiom the original owner and his subsequent purchasers in favour of the defendant, to deal with the property, the agreement of sale under Ex.r\1, which is between the plaintiffand defendant, cannot bind the third parties i.e., original owner and his agreement holders. On the other hanrl, it is to be seen that the conditions in agreement of sale under ExAl also specif,rcally obligates the defendant to obtain registered sale deed from the original owner namely Banoth Tauriya, in ,} 23 favour of the defendant before the defendant executes registered sale deed in favour of the plaintiff. In such circurnstances, we do not agtee with the findings recorded by the triat Court that the original owner and his subsequent agreement holders are to be added to the suit filed by the plaintiff and that the suit is bad for non-joinder of necessary parties' Thus, we feel that original owner and agreement holders are not the proper and necessary parties to the present suit'

32. As per Section lg of the Specific Relief Act, specif,rc performance of a contract may be enforced against any other person claiming under him by a title arising subsequently to the contract' except a transferee for value who has paid his money in good taith and without notice of the original contract.

33. [n view of the above discussion and considering the principle laid down in the above said decisions, it can be held that the previous vendors of the defendant are not proper and necessary parties in adjudicating the dispute between the ptaintiff and defendant so far as the relief of specific performance of the agreement of sale and execution of sale deed in respect of the suit schedule property is concerned. _--€d 24 o.5 Alternative

34. It is contended by the learned counsel for the plaintiff that the trial Court committed an error in not granting the alternate relief of refund as it. was found that the specific performance was not possible in view of the admitted fact that defendant himself had no title nor he could transfer the suit schedule property.

35. Section 22 of the Specif,rc Relief Act, 1963, empowers courts to grant addit:ional reliefs in suits for specific performance of contracts related to immovable property. Specifically, it allows a plaintiffto seek possession, partition, or a refund of earnest money if the claim for specific perfonnance is denied. This section is crucial as it broadens the scope of relief available to those seeking specific performance of contracts

36. [t is the case of the plaintiff that under Ex.Al, the plaintiffhad paid Rs.4,l)0,000/- towards advance sale consideration on l1 .02.2005 and immecliately thereafter on l3 .02.2005 the plaintiffpaid further sum of Rs.20,000/- to the defendant in the presence of PW3 and another. The trial Coum found fault with the plaintiff that since the plaintiff did not obtain any separate stamp receipt in token of payment of such 25 amount of Rs.4,00,000/-, it creates doubt as to whether really amount was paid. PW2, who is one of the attesting witnesses of Ex.Al stated that the plaintiff had paid Rs.4,00,000/- to the defendant. Further PW3, who is also one of the attesting witnesses of the endorsement made by the defendant on Ex.Al for receiving Rs.20,000/- from the plaintiff towards further sale consideration, also specifically stated that the ptaintiff paid such an amount to the defendant in his presence' Even under Ex.At, the defendant acknowledged receipt of Rs.4,00,000/- towards advance sale consideration in-as-much as the d"fe.rdant also agreed to refund such amount in the event of failure to comply with the terms and conditions on his part i.e., if the defendant fails to obtain NOC, carries out measurement of land or obtains registered sale deed from the original owner, and the defendant agreed to refund the entire amount along with inte rest @ 24% per annum. It is clear from the conduct of the defendant throughout that the defendant has taken contradictory stands, so also the evidence let in by the defendant proves and establishes his conduct in denyrng the claim made by the plaintiff seeking altemative relief of refund. The trial Court after discussing on various issues also categorically found that entire endeavour of the 26 plaintiff clearly show that he has more interest in seeking refund of amount.

37. An acknowledgment of payment of advance under the Agreement of Sale constitutes valid and admissible evidence of the transaction and serves as legal proof of such payment. Once such acknowled;gment is produced, the burden shifts on the contesting party to disprov€: or rebut the same. [n the present case, nothing substantial has been eliicited from the cross-examination of PWs 2 and 3 to shake their testirnony or to create any dent in the Plaintiffs version particularll' with regard to payment of advance sale consideration by the plaintiff to the defendant. On the contrary, their depositions remain consistent and credible in that regard, thereby reinforcing the PlaintifPs case. The absence of any effective cross-examination on material aspects iri of considerable significance, as it renders the acknowled;gment and the ora[ evidence adduced by the plaintiff is unimpeached and reliable.

38. Thusr, the plaintiff has proved and established that he had paid advance sale consideration of Rs.4,20,000/- to the defendant to which he is entitled for refund along with interest. : 27 A,I(S,J& VRI(R, J AS-128_2014

39. [t is settled law that remedy for specific perforrnance is an equitable remedy and it is the discretion of the Court, which discretion requires exercise according to the settled principles of law and not arbitrarily as adumbrated under Section 20 of the Specific Relief Act,

1963. Under the said Section the court is not bound to grant relief merely because there is a valid agreement of sale. In Kamal Kumar v. Premlata Joshil3 the Honourable Supreme Court observed as under: "7. lt is a settled principle of law that the grant of relief of spectfic performance is a discretionary and equitable relief,, The material questions. which are required to be gone intofor grant of the reltef of spec{ic pe rJbrmance, are :

7.1. First, whether there exists a valid and concluded controct belween the parties Jbr sale/purchase of the suit property;

7.2. Second, v'hether the plainttff has been ready and willing to per/orm his part oJ'contract and whether he is still ready and willing to perjbrm his purt us menlioned in the contract;

7.3Third. whether the plaintiff has, tn fact, performed his part of the controct and, iJ-so. how and to what extent and inwhat manner he has performed and v,hether such performance was in conformity with the lerms ofthe contract:

7.4. Fourth. v,hether it will be equitable to grant the reltef of specific per-formance to the plainti//'against the defendant in relation to suit property or it will cuuse any kind of hardship to the defendant and, f so. how and in what manner and the extent if such relief is eventually granted to the plaintit/: and " (zotg) 3 scc 704 28 AKS,J & VRKR.J AS_128_2014

7.5- ,r-astly, whether the plaintiff is entitled for grant of any other altentattve relief, namely, refund of earnest money etc. and, if so, on what grounds.

8. In our opinton, the aforementioned questions ore port of the statutory requirements (See Sections 16 (c), 20, 21, 22, 23 of the Specific Relief Act, 1963 and the .forms 47/48 of Appendix A to C of the Code of Civtl Procedure). These requirements have to be properly pleaa'ed by the parttes tn their respective pleadings and proved with the aid of evidence in accordance with law. It is only then the Court is entitlzd to exercise its discretion and accordingly gront or refuse the relieJ'of specific performance depending upon lhe case made out by the parties onfacts."

40. In the present case though it is proved that the defendant had executed agreement of sale in favour of the plaintiff, for the reasons enumeratecl above i.e., since the deftndant himself is not the owner of the properrly, the ptaintiff is not entitled to the equitable relief of specific pei:formance, particularly tbr execution of, registered sale deed in respect of suit schedule property. Therefore, the ref'usal of relief of specific performance by the trial court is proper and sustainable. V[I, CONCLUSTON:

41. For the reasons stated above: (a) The plaintiff is not entitled to the equitable relief of specific performance of the Agreement of Sale dated 11.02.2005 (Ex.Al), as the defen&urt himself is an agreement-holder without title and cannot 29 be required to execute a registered sale deed of which he cannot be the lawful transferor; (b) The ptaintiff failed to establish continuous readiness and witlingness to perform his part of the contract in the maruler required under the Specific Relief Act and relevant authorities; q t (c) The plaintiff has, however, proved payment of advance sale consideration amounting to Rs.4,20,000i- (Rs.4,00,000 + Rs-20,000) as evidenced by Ex.Al and corroborated by PWs 2 and 3' In view of Section 22 of the Specifrc Relief Act and the evidelrce on record, the plaintiffis entitled for re{irncl ot'the advance sale consideration. IX. RESU LT

42. In the result, \ /e pass thc lirllorving order: (i) The appeat is partly allowccl. -['[re decree of the Trial court dismissing the plaintil{-s suit {irr specitic performance is affirmed' (ii) The plaintil'f' sfuall recovcr tiorn thcr deflendant Rs'4,20,000/- (Rupees Four Lakhs ]-wenty -[-housan<l only') being the advance sale consideration, together tvitlr itrtercst aLgo pcr annum from 11,.02.2005 30 (the date of the Agreement) till the date of filing of the suit aod' 6%o from the dat,: of filing of the suit till realization. (iii) All other claims in this appeal are dismissed. (iu) There shall be no order as to costs. (u) Pending miscellaneous applications, ifany, stand closed. ,TTRUE COPY'T SD'- A.PRATHIMA DEPUTY REGISTRAR I SECTION OFFICER UMAR SHAVILI one Fair CoDv to the HON'BLE SRI JUSTICE ABHINAN - -' il'or His Lordship's kind Perusal) - -' (For His Lordship's kind Perusal) one Fair Coov to the HON'BLE SRI JUSTICE VAKITI RAMAKRISHNA REDOY To, r.' iJ. l.ThelAdditionalDistrictJudge,Khammam(withrecordsrfanyt 2 One CC to Sri V. Brahmaialr Chowdary' Advocate [OPUCi S One CC to Ms. R. Madhavi Latha, Advocate [OPUC] 4. 11 LR Copies 5. The Under Secretary, Union of lndia Ministry of Law Justrce and Company O ine Setretary' Telangana Advocates Association Lrbrary' Hrgh Court ior the 7 Two CD Copies State of Telarigana, Hign Court Buildings at Hyderabad Affairs, lrlew Delhi Kanr l)S[. HIGH COURT DATED:0T11012025 JUDGMEiNT+DECREE AS.No.1?-g ot 2014 t o(J 5rA 17 iqAH 202fi {..* * # ,? *{) PARTL}' ALLOWING THE APPEAL ft\2" (.r'l; I IN THE HIGH COURT FOR THE STATE OF TELANGAI{A AT TUESDAY, THE SEVENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HON'BLE SRI JUSTICE ABHINAND KUTIAR SHAVILI AND THE HON'BLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY Dodda Gandhi Prasad, S/o Dodda Narasimha Rao, Age:38 years, R/o Annarugudem, Thallada mandal, khammam District. ...Appellant D Siripurapu Sudharshana Rao, S/o Suraiah, Age:51 years, Occ: Business, R/o H.No.6-1-405, Khanapuram Haveli, Khammam Urban Mandal, kharnmam District. ...Respondent Appeal under Section 96 R/w order 41 Rule 1 of CPC against the Judgment and Decree daled 25-07-2O12 passed in O.S.No.8 of 2008 on the file of the Court of the I Additional Diskict Judge, Khammam. The appeal coming on for hearing, upon perusing the Memorandum of grounds filed in the Appeal, the Decree of the Lower Court and the record in the case and upon hearing the arguments of Sri V. Brahmaiah Chowdary, Advocate for the Appellant and of Ms. R. Madhavi Latha, Advocate for the Respondent This Court doth order and decree as follows: '1. That the appeal be and hereby is partly allowed; 2. That the decree of the Trial Court dismissing the plaintiffs suit for specific performance be and hereby is affirmed:

3. That the plaintiff shall recover from the defendant Rs.4,20,00O/- (Rupees Four Lakhs Twenty Thousand only) being the advance sale consideration, together with interest at 9% per annum from 11-02-2@6 (the date of the Agreement) till the date of filing of the suit and 60lo from the date of filing of the suit till realization;

4. That the cther claims be and hereby are dismissed in this appeal; and 5. That there shall be no order as to costs. SD'. A.PRATHIMA DEPUTY REGISTRAR //TRUE COPY// N OFFICER

1. The I Adcitional District Judge, Khammam. 2. Two CD Copies Kam/PSL HIGH COURT DATEDiATnUzO2S DECREE AS.No.128 of 2014 PARTL\/ ALLOWING THE APPEAL t",