A) ABSTRACT / HEADNOTE

The case Maharaj Singh & Ors. v. Karan Singh (Dead) Thr. Lrs. & Ors., examined whether a decree of specific performance can be granted in light of subsequent sale deeds executed after the suit agreement and whether the defendants were bona fide purchasers without notice. The Supreme Court resolved several contentious issues, including the applicability of Sections 91 and 92 of the Indian Evidence Act, Section 19(b) of the Specific Relief Act, and the impact of the Zamindari Abolition Act on the enforceability of agreements involving agricultural lands. The Court upheld the concurrent findings of the lower courts that the agreement was not sham and that subsequent purchasers had constructive notice due to the agreement’s registration. However, the decree was limited to the undivided one-half share in the property, in favor of the plaintiff willing to seek performance. The decision also reiterated that the absence of a prayer for cancellation of subsequent sale deeds does not bar the grant of specific performance.

Keywords: Specific Performance, Constructive Notice, Bona Fide Purchasers, Section 19(b), Agricultural Land Sale.

B) CASE DETAILS

i) Judgement Cause Title
Maharaj Singh & Ors. v. Karan Singh (Dead) Thr. Lrs. & Ors.

ii) Case Number
Civil Appeal No. 6782 of 2013

iii) Judgement Date
09 July 2024

iv) Court
Supreme Court of India

v) Quorum
Justice Abhay S. Oka, Justice Sanjay Karol

vi) Author
Justice Abhay S. Oka

vii) Citation
[2024] 7 S.C.R. 396 : 2024 INSC 491

viii) Legal Provisions Involved

• Specific Relief Act, 1963, Section 19(b)
• Evidence Act, 1872, Sections 91 and 92
• Transfer of Property Act, 1882, Section 54
• Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, Section 154-B
• Registration Act, 1908, Section 17(2)

ix) Judgments overruled by the Case (if any)
N/A

x) Case is Related to
Civil Law, Specific Performance, Property Law, Agricultural Land Regulation.

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The appeal arose from a dispute concerning a sale agreement involving agricultural land and subsequent transactions that allegedly violated the rights of the original plaintiffs under the agreement. The plaintiffs sought specific performance of the agreement, while the defendants contended the agreement was sham and that they were bona fide purchasers without notice. The case also examined the procedural requirements under the Zamindari Abolition Act and the interplay of statutory provisions governing property transactions.

D) FACTS OF THE CASE

The suit property, measuring 2.90 acres, was subject to an agreement for sale dated December 7, 1981, executed by the first defendant in favor of the plaintiffs. While the agreement stipulated the execution of a sale deed within three years, portions of the land were sold to the second to fourth defendants through registered sale deeds in 1983. The plaintiffs filed a suit for specific performance, alleging collusion and asserting their rights under the agreement. The defendants contended that the agreement was fabricated, and the subsequent purchasers claimed bona fide status.

E) LEGAL ISSUES RAISED

i. Whether the agreement was sham or fictitious.
ii. Applicability of Sections 91 and 92 of the Evidence Act to prevent oral evidence regarding the nature of the agreement.
iii. Whether the subsequent purchasers were bona fide purchasers without notice.
iv. Whether a prayer for cancellation of subsequent sale deeds is mandatory for granting specific performance.
v. Effect of the Zamindari Abolition Act on the enforceability of the agreement.
vi. Whether the plaintiffs demonstrated readiness and willingness to perform the contract.

F) PETITIONER/APPELLANT’S ARGUMENTS

i. The appellants argued that the agreement was sham, intended to deter the defendant from selling the property rather than creating enforceable rights. They emphasized the oral evidence of the deceased defendant’s relatives, alleging his addictive behavior and collusion.
ii. They invoked Sections 91 and 92 of the Evidence Act, asserting that oral evidence could contradict the written terms to prove the sham nature of the agreement.
iii. The appellants relied on B. Vijaya Bharathi v. P. Savitri & Ors. to argue that the absence of a prayer for cancellation of subsequent sale deeds disentitled the plaintiffs from relief.
iv. They contended that the agreement was forged and no consideration was exchanged.
v. They argued that the plaintiffs failed to prove their readiness and willingness as mandated under Section 16(c) of the Specific Relief Act.

G) RESPONDENT’S ARGUMENTS

i. The respondents submitted that the agreement was genuine, supported by its registration, and the defendants failed to demonstrate it was sham.
ii. They argued that the constructive notice doctrine applied to the subsequent purchasers under Section 3 of the Transfer of Property Act, as the agreement was registered.
iii. The plaintiffs maintained that Section 19(b) of the Specific Relief Act entitled them to enforce specific performance against subsequent purchasers without bona fide status.
iv. They distinguished B. Vijaya Bharathi on the ground that it overlooked larger bench precedents.
v. The respondents demonstrated their readiness and willingness to perform, supported by timely notices and actions.

H) JUDGEMENT

a. Ratio Decidendi

i. A prayer for cancellation of subsequent sale deeds is not mandatory under Section 19(b) of the Specific Relief Act.
ii. Constructive notice due to registration binds subsequent purchasers, barring bona fide status.
iii. Oral evidence under Sections 91 and 92 of the Evidence Act cannot contradict written agreements unless the issue pertains to fraud or collusion.

b. Obiter Dicta

The Court remarked on the importance of registered documents in safeguarding contractual obligations and noted the procedural compliance necessary for agricultural land transactions under the Zamindari Abolition Act.

c. Guidelines

i. Registered agreements provide constructive notice to subsequent purchasers.
ii. The absence of a prayer for cancellation does not defeat specific performance if subsequent purchasers lack bona fide status.
iii. Courts may direct defendants to obtain statutory permissions for sale execution.

I) CONCLUSION & COMMENTS

The judgment underscores the balance between procedural safeguards for property transactions and equitable relief under the Specific Relief Act. It clarifies the limited scope of oral evidence in contract disputes and reiterates the obligations of subsequent purchasers under constructive notice principles.

J) REFERENCES

a. Important Cases Referred

• B. Vijaya Bharathi v. P. Savitri & Ors., [2017] 7 SCR 746.
• Lala Durga Prasad v. Lala Deep Chand, [1954] 1 SCR 360.
• Tyagaraja Mudaliyar v. Vedathanni, ILR (1936) 59 Mad 446.
• Rojasara Ramjibhai Dahyabhai v. Jani Narottamdas Lallubhai, [1986] 2 SCR 447.

b. Important Statutes Referred

• Specific Relief Act, 1963.
• Evidence Act, 1872.
• Transfer of Property Act, 1882.
• Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950.
• Registration Act, 1908.