Arjan Singh v. Gurbachan Singh & Ors.

1. The Plaintiffs have filed the present suit for Declaration for declaring the Sale Deed dated 22.02.2017 executed by defendant No. 1 in favour of defendant No. 2 as null and void being in violation of the Samjhauta Patra/Compromise Deed dated 17.01.1985with consequential relief of Specific Performance. Brief Facts:

2. Four brothers i.e. Shri Gurbachan Singh, Avtar Singh, and Digitally Pritam Singh and Shri Kartar Singh, all sons of Shri Mehar Singh purchased a plot of property bearing No.19/42, Punjabi Bagh, New Delhi measuring approximately 544.44 sq. yards (hereinafter referred to as suit property) by registered Sale Deed dated 10.03.1969,each brothers having one-fourth part each in the suit Plot. On March 29, 1974, Shri Pritam Singh, one of the co-owners, surrendered his 1/4 share in the land to the other three co-owners, Shri Gurbachan Singh, Shri Avtar Singh, and Shri Kartar Singh, by virtue of a Sale Deed, whereby each of the three co-owners became owners of one-third share each in the suit plot.

3. The three co-owners built a one-and-a-half-story building on the land and shared the House so constructed on the suit plot. Shri Avtar Singh was assigned the first floor, while Shri Gurbachan Singh and Shri Kartar Singh were assigned the Western and Eastern halves, respectively on the ground floor. The servant quarter on the garage belonged to Shri Gurbachan Singh, while the terrace on the second floor was jointly held by Shri Avtar Singh and Shri Kartar Singh. The three brothers shared the main door for entry into the house. They tentatively agreed on the scope and bounds of their respective parts.

4. Shri Kartar Singh agreed to sell his Western portion of suit property including a drawing room, two bedrooms, a bathroom, a latrine, a kitchen, a store, a verandah, an open lawn on the back and front sides, and roof on the first floor, to the fifth brother Shri Arjan Singh, the plaintiff no. 1 by an Agreement dated 15.12.1984. The possession of the property was delivered to the plaintiff. Digitally

5. On 16.01.1985, Shri Gurbachan Singh defendant no. 1 requested Shri Arjan Singh, plaintiff no. 1 to give him the bedroom temporarily for a few months because he was not coming to live in his portion, to which he agreed and handed over the room to defendant No.l Shri Gurbachan Singh, while locking the other rooms.

6. That on the same day i.e. 16.01.1985, Shri Arjan Singh, plaintiff no. 1, Shri Gurbachan Singh, defendant no. 1, and Shri Avtar Singh, the third brother, with an intent to further clarify their portions of the suit property, through the good offices of their relations Shri Sujan Singh, and Shri Satnam Singh, entered into a compromise deed/Samjhauta Patra detailing their respective portions and their mutual rights and obligations.

7. However, when Shri Kartar Singh was about to execute the Sale Deed in favour of plaintiff No. 1, Shri Gurbachan Singh defendant No. 1 approached the Mediators in terms of the Samjhauta Patra, but the parties could not come to an agreement. The Mediators thus, decided to sell the whole property to one M.L. Bansal on 03.02.1986. An Agreement was entered into between Sh. Gurbachan Singh, Sh. Avtar Singh, and Sh. Kartar Singh (because he was a co-sharer at that time) and Sh. M.L. Bansal. This attempt of selling the entire property, is a clear indication of the intention of the parties that the property should either remain within the family or be sold outside the family as a single unit. However, the deal could not go through and was cancelled on 18.02.1987.

8. Sh. Kartar Singh, then on the asking of plaintiff No. 1, Digitally executed Sale deed of his portion in the name of his wife Smt. Surinderjit Kaur /plaintiff No. 2, i.e. a nominee of plaintiff No. 1in terms of the Agreement to Sell dated 15/12/1984, whichwas registered on 11.05.1987.

9. It is submitted that when the plaintiff No. 1 sought to shift in their portion, he found that defendant No. 1 Shri Gurbachan Singh not only failed to transfer possession, but had trespassed into other portion as well. A dispute arose between the parties and consequently defendant No. 1 filed a suit for Injunction against plaintiff No. 1 on 12.08.1987. Further, wife of defendant No. 1 filed a suit for Specific Performance against Sh. Kartar Singh on 23.11.1987,in which the plaintiffs were also made a party. Plaintiffs also filed a suit for Possession on 19.05.1989 against defendant NO. 1 and his wife for the portion they purchased from Late Sh. Kartar Singh.

10. The litigation between the parties came to an end on 19.10.2013 when the Ld. Civil Judge dismissed both the suits of defendant No. 1 and his wife and decreed the suit of the plaintiffs for possession. The defendant No. 1 filed a Regular First Appeal in all the three cases and the same were dismissed on 10.07.2015.They also filed Regular Second Appeals which were withdrawn on 11.12.2015. The possession of the portion of the plaintiffs, was finally given to them on 29.04.2016, through a court appointed bailiff.

11. It is submitted that defendant No. 1 had been negotiating for sale of his share to defendant No. 2 Mrs. Manju Gupta since Digitally 17.10.2015 and had received first payment by cheque, in violation of the Samjhauta Patra. Eventually, he sold his portion to her vide Sale Deed dated 22.02.2017, who has purchased it for investment purposes. The plaintiffs became aware of the factum of sale only when a Tata Capital Representative came to enquire about defendant No. 2.

12. The present suit has thus, been filed for Declaration for declaring the Sale Deed dated 22.02.2017 executed by defendant No. 1 in favour of defendant No. 2 as null and void being in violation of the Samjhauta Patra/Compromise Deed dated 17.01.1985with consequential relief of Specific Performance of Clause 4 of the Samjhauta Patra.

13. The defendant No. 1, Mr. Gurbachan Singh (now represented through his LRs), in his Written Statement, took preliminary objections that the Suit is based on Samjhauta Patra dated 17.01.1985, which is purported to have created a right of preemption over the Suit Property in favour of plaintiff No. 1. This document being unregistered is therefore, inadmissible.

14. It is further asserted that the plaintiff No. 2 Smt.Surinderjit Kaur is not a party to the Samjhauta Patra and there is no right, which she can claim under the said Document. Furthermore, it is non-binding and unenforceable as it is without consideration. Furthermore, it stands discharged as per the averments made in the Plaint and cannot be enforced.

15. It is asserted that subsequent to the execution of the Samjhauta Patra, the Sale Deed dated 15.04.1987 for the Western Digitally portion, was executed in favour of the plaintiff No. 2 and thus, plaintiff No. 1 is no longer a co-owner of any portion of plot in question. The plaintiff No. 1, therefore, has no locus standi and the Samjhauta Patra has come to an end.

16. Mr. Avtar Singh, the husband of the defendant No. 3 has died in March, 2017. After his demise, none of the executants i.e. the plaintiff No. 1, Mr. Avtar Singh or defendant No. 1, Mr. Gurbachan Singh, are left with any right in the property in question and the Suit is totally misconceived and liable to be dismissed. It is also claimed that subsequent to the execution of the Samjhauta Patra, Sale Deed for Western portion of the plot of the Suit Property, was executed in favour of plaintiff No. 2, wife of Mr. Arjan Singh, by late Mr.Kartar Singh, on 15.04.1987, without it being in the knowledge of the defendant No. 1, at the relevant time.

17. There has been long pending litigation between the parties for a long duration because of which there is no family peace inter se the parties. It is asserted that initially, the plaintiff agreed to sell the ground floor, Eastern portion and the Western portion, to third party for which the plaintiff No. 1 and defendant No. 1, met with few brokers in Punjabi Bagh with an intention to sell the entire ground floor. However, subsequently, plaintiff No. 1 informed that his wife/plaintiff No. 2 was not inclined to sell the Western portion. The plaintiffs thus, were indecisive about the intent to sell the Western portion. Plaintiff No. 1 categorically told defendant No. 1 that if he is so desirous, he may sell his portion. The plaintiff at that stage, never expressed any intention to purchase the Eastern portion. Digitally

18. Around the same time, the defendant No. 1 was approached by Mr. Shambhu Arora, the broker, who had a prospective buyer for the Eastern portion that belonged exclusively to defendant No. 1. The broker informed plaintiff No. 1 about the prospective buyer and the intention of defendant No. 1, to sell the Eastern portion. However, the plaintiff was not willing to sell the Western portion or to purchase the Eastern portion.

19. It is claimed that the defendant No. 1 thus, sold his Eastern portion to defendant No. 2, which was in due knowledge of the plaintiffs. It is claimed that the Sale was made with complete transparency with full knowledge of the plaintiffs. All the averments made in the Plaint, were denied.

20. The plaintiffs in their Replication have reaffirmed their assertions and have denied that they were ever informed about the Sale of the Eastern portion by defendant No.1 to defendant No.2.

21. The Defendant No. 2 Mrs. Manju Gupta, the subsequent buyer, has submitted that the relief of Specific Performance is sought only in favour of plaintiff No.1 and not in favour of plaintiff No. 2. Further, it is submitted that plaintiff No. 1 was left with no right, title or interest in the property when the Agreement to Sell dated 15.12.1984 did not culminate into the Sale deed, as admittedly no Sale Deed was executed by Sh. Kartar Singh in favour of the plaintiff No. 1, and the Sale Deed dated 15.04.1987 neither refers to the Agreement to Sell executed between the Plaintiff No. 1 and Sh. Kartar Singh, nor does it refer to the Settlement Deed dated 17.01.1985. Digitally

22. It is further submitted that plaintiff No. 1 does not have locus standi to seek specific performance of the Settlement Deed dated 17.01.1985. Further, plaintiff No. 2 has not sought relief of Specific Performance. It is also submitted that when there was no Sale Deed executed in favour of plaintiff No. 1 by Sh. Kartar Singh, there was no subsisting right left with plaintiff No. 1 in the suit property; consequently, the Samjhauta Patra dated 17.01.1985 lost its meaning and effect, especially when Plaintiff No.2 as well as Sh. Kartar Singh, from whom she derived her title in the suit property, were not a signatory to the Settlement deed. It is submitted that the Settlement Deed was not a family partition nor was it binding on all joint owners of the property and Clause 4 of Samjhauta Patra does not bind the owners of the property.

23. It is submitted that Clause 4merely provides that one brother who is desirous to sell his portion, cannot do so without the prior consent of the other two brothers. Thus, there was no right of preemption envisioned either in this Clause 4 or in the entire Agreement, in as much as it does not state that the property has to be offered to one brother before being sold to the person outside the family. Clause 4 of the Settlement Agreement gives right to the parties to sell their portion to anyone though only with the consent of other brothers and envisages no right to purchase. It is evident that it was neither the intention of the parties nor it is borne out from the Clause 4 that the property necessarily has to be sold to the brothers.

24. It is further submitted that Clause 4 is not a pre-emption Digitally clause, and in any case no suit based upon right of pre-emption would lie in Delhi as Punjab Pre-emption Act, 1913 has been repealed.

25. Furthermore, the Clause is not definite and does not create an absolute right in favour of the others and therefore, the same cannot be the subject matter of Specific Performance, by plaintiff No. 1.

26. Further, Clause 4 does not provide for any consequence and therefore, it is clear that the said Clause is determinable and is not capable of specific performance by virtue of section 14(c) of the Specific Relief Act. Even if this Court is to grant Specific Performance, then the same would be limited to seeking consent of plaintiff No. 1 and even if the same is denied, it would not create any obligation on defendant No. 1 to sell the property to plaintiff No. 1.

27. It is further submitted that since there is no right in favour of the plaintiffs, there is no cause of action accruing to them. In any case, the Settlement Deed is a compulsorily registerable document as it has the effect of transferring, creating an interest in the property and cannot be acted upon.

28. The plaintiffs in replication to the Written Statement of Defendant No.2have submitted that the defendant No. 2 is not a bona fide purchaser as to be a bona fide buyer of the said portion she has to prove that she was not aware of the Samjhauta Patra. However, defendant No. 1 in paragraph 13 of the Brief Facts of written submissions stated that he informed defendant No. 2 about the previous litigation between the parties. The Samjhauta Patra was Digitally the subject matter in previous litigation and was thus, in the knowledge of the Defendant No.2.

29. It is further asserted that the Agreement to Sell dated 15.12.1984, permitted plaintiff No. 1 to get the Sale deed executed either in his own favour and/or in the name of his nominee. Consequently, the Sale Deed got executed in the name of his wife/defendant No.2 in 1987.

30. The only implication of Clause 4 is that if any of the parties to the Samjhauta Patra intends to sell his share/property, then he shall give a first right to purchase to his other remaining two cosharers to the Suit property. Pertinently, earlier as well the sharers sold their share in the family itself.

31. Further, though there is no Clause in the Samjhauta Patra which permit any of the party to terminate it, but merely because consequences are not mentioned in the Patra for violation of its Clauses, does not mean that the party cannot enforce the same. The Samjhauta Patra has been upheld in the litigation as is evident from the judgement of the learned Civil Judge.

32. It is denied that Samjhauta Patra required Registration and/or payment of Stamp Duty as it does not create any new right but only recognises pre-existing rights of the parties, pursuant to the Oral Partition between them.

33. Issues on the pleadings, were framed vide order dated 13.05.2019, as under:-

(i) Whether in terms of clause 4 of the Samjhauta

Patra/Settlement Deed dated 17.01.1985, the plaintiffs Digitally are entitled to seek specific performance of the said Patra/settlement? OPP

(ii) If the answer to the above issue is in affirmative, whether the sale deed executed by defendant No.l in favour of defendantNo.2 dated 22.02.2017 is liable to be treated as void? OPP

(iii) Whether the plaintiffs have a right of the preemption in the property against defendant No.l? OPP

(iv) Relief.

34. The plaintiff has taken an objection to Issue No.1 being treated as a preliminary question since it asserted that the real object of the Clause 4 cannot be understood without trial. The defendant No. 1 has not denied the execution of the Samjhauta Patra dated 17.01.1985, and Clause 4 was included in the Patra with the intention of enforcement.

35. It is submitted that Specific Performance in respect of a Contract shall be enforced subject to provisions contained in section 11(2), Section 14, and Section 16 of Specific Relief Act. However, Section 11(2) Specific Relief Act does not apply as there is no trust; neither is the Samjhauta Patra executed by any Trustee nor are there any such averments. Similarly, there is no application of Section 14 Specific Relief Act because none of the conditions mentioned in the aforesaid provision arise in the present case.

36. In so far as Section 16 Specific Relief Act is concerned, again Digitally none of the conditions exist to deny performance of the Samjhauta Patra dated 17.01.1985 nor has the defendants pleaded that any of the condition exists for non-enforceability of the present Contract. Further reference is made to Section 15 and Section 19 Specific Relief Act to submit that the contract can be enforced against not only against the party to the Contract but also against the legal heirs of the person claiming under the contracting party.

37. It is submitted that the defendant No. 1 gave wrong description of his property and failed to mention the Samjhauta Patra dated 17.11.1985. Further, the defendant No. 1 continued to deny any oral partition but ended up selling his portion on the basis of an oral partition. It is claimed that because of this sale by the defendant No. 1 to defendant no.2 who is a stranger, he has been deprived of the enjoyment the common portions in her presence.

38. The defendants have made submissions on the lines of defence taken by them in their respective Written Statements.

39. Submissions heard. Issue No. 1 Whether in terms of clause 4 of the Samjhauta Patra/Settlement Deed dated 17.01.1985, the plaintiffs are entitled to seek specific performance of the said Patra/settlement? OPP

40. Issue No. 1 which has been taken as preliminary Issue.

41. Admittedly, Late Mr. Mehar Singh, father of the parties, had five sons, namely, Mr. Gurbachan Singh/defendant No. 1, Mr. Avtar Singh (since deceased), Mr. Pritam Singh, Mr. Arjan Singh/plaintiff No. 1 and Mr. Kartar Singh (since deceased). Singh and Mr. Kartar Digitally Singh, Mr. Gurbachan Singh, Mr. Avtar Singh and Mr. Pritam Singh and Mr. Kartar Singh, jointly purchased the property in question vide registered Sale Deed dated 10.03.1969. Mr. Pritam Singh sold his share to the other three brothers i.e. Mr. Gurbachan Singh, Mr. Avtar Singh and Mr. Kartar Singh, by virtue of a registered Sale Deed dated 29.03.1974, whereby the three brothers became the absolute owners of undivided 1/3rd share each.

42. The house was then constructed by the three brothers consisting of 1½ story building, which was orally partitioned amongst them in three equal shares. Mr. Avtar Singh was allotted the portion of first floor whereas the defendant No. 1, Mr. Gurbachan Singh got the Eastern portion while Mr. Kartar Singh got the Western portion of the ground floor.

43. Mr. Kartar Singh admittedly agreed to sell his portion to the plaintiff or his nominee and entered into an Agreement to Sell 15.12.1984 which subsequently got culminated into Sale Deed dated 15.04.1987 in favour of Plaintiff No.2 wife / nominee of the plaintiff no.1 and the vacant possession was handed over in the presence of defendant No. 1, Mr. Gurbachan Singh and his wife Ms. Yogesh Kaur.

44. It is not in dispute that after the execution of the Agreement to Sell dated 15.12.1984, the parties, i.e. Arjan Singh, Gurbachan Singh and Avtar Singh in order to avoid any misunderstanding disputes entered into a Samjhauta Patra /Settlement dated 17.01.1985 whereby the specific portions of each of the party along with the other terms and conditions as agreed between the parties, Digitally were specified. Subsequently, in the light of their disputes, Mr. Gurbachan Singh/defendant No. 1, sold his share i.e. the Eastern portion of the ground floor to defendant No. 2, Ms. Manju Gupta/third party which has become a bone of contention in the present Suit.

45. The moot question is whether in terms of Clause 4 of Samjhauta Patra dated 17.01.1985, the plaintiffs are entitled to seek Specific Performance for avoidance of the Sale Deed executed by Gurbachan Singh/defendant No. 1in favour of the Defendant No.2.

46. To understand the true import of the rival contentions, it would be pertinent to reproduce Clause 4 of Samjhauta Patra which reads as under:-

47. The perusal of this Clause 4 of Samjhauta Patra reflects that the parties had agreed that before selling their respective portions, the consent of the other co-owners, shall be taken. It is not in dispute that this Samjhauta Patra was signed by the three brothers, out of whom Mr. Avtar Singh has died before the institution of this Suit. Moreover, the dispute is confined essentially to the Eastern Portion of the Ground Floor portion of the Suit property which has been sold by defendant no.1 to defendant No.2, Smt. Manju Gupta.

48. The basic question which thus, arises is as to the true nature and import of Clause 4 of the Samjhauta Patra and whether it was Digitally intended to be binding on the family members including the family members of the three brothers.

49. Section 10 of the Transfer of Property Act (hereinafter ‘TPA’) deals with conditions restraining alienation.

50. It reads as under: “S.10:Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.”

51. S.10 TPA has the underlying public policy which promotes free circulation and disposition of property and provides that right of transfer is incidental to and inseparable from the beneficial ownership of property. There can be no absolute restriction on the right to sell the property.

52. From the bare reading of Clause 4, it is evident that it is worded in an ambiguous manner and in order to understand its true import, the true intent of the parties needs to be ascertained. If a literal interpretation is given that consent be taken mandatorily of the other two brothers, before the Sale is made by any of the signatories to the Settlement, it would lead to an anomalous situation as in all practicality, all the parties may not be at consensus ad idem at the same time, making it a virtual impossibility to ever Digitally sell the property. Such interpretation would make this Clause 4 practically an absolute restriction on sale of the property and thus, would have to be held as void by virtue of S.19 TPA.

53. The next question which thus, arises is what is the true import of this Clause. It has been argued on behalf of the defendant No.1 that it is not in the nature of pre-emptive right as it nowhere stipulated that the property was first required to be offered to the other brothers before being sold to third party but merely provided for the consent to be taken prior to effecting the Sale.

54. This argument can be addressed by asking the question how would Clause 4 is to be made operational. If it merely contemplated prior consent, then a piquant situation may arise where one brother would be stuck with a situation of not being able to sell his property as other brother refuses to give consent. Such interpretation would in fact be contrary to Section 10 TPA which invalidates any covenant that prevents the saleability of the property which is its essential pre-requisite.

55. Moreover, as not disputed by any of the parties, the objective of the Samjhauta Patra was to maintain peace amongst the brothers and to maintain cordiality in future. It was never intended to be a condition precedent to any sale of property by any brother. Thus, the necessary corollary is that it only contemplated that the other brothers may be informed prior to sale to ensure that no easementary right is impinged and also to give an opportunity to them to purchase if they were so inclined.

56. It is also claimed by the plaintiff that this Clause 4 of Digitally Samjhauta Patra was in the nature of the pre-emptive right intended to maintain the unity of the family of the three brothers, who were occupying different portions of the same house. This is also evident from the circumstances that on previous occasions as well, the portions had been sold inter se the brothers. It is also evident from the fact that the ground floor of the suit property is divided into two portions and the first floor is with the third brother and the common areas are shared by them all. The property being one, its unity is bound to be impacted by the introduction of the third party.

57. Clause 4 of Samjhauta Patra is not a standalone Clause which can be interpreted separately from Issue No.3. It is pertinent to observe that alternative plea has been taken that this Clause is in the nature of a pre-emptive right whereby it was agreed that before selling their respective portions, the consent of the other two brothers, would be taken.

58. The Issue No. 3 in respect of the pre-emptive right has been specifically framed. Issue No.1 is essentially required to be considered along with the Issue No. 3, in a comprehensive manner and cannot be considered in disjunction with each other. Moreover, whether it give an independent right to seek the avoidance of the Sale Deed executed in favour of the defendant No. 2 or to step into her shoes on the terms on which she purchased the suit property, in exercise of Pre-emptive right, cannot be decided piecemeal and have to be considered together.

59. Moreover, the defendant No. 1 has taken a specific plea in the Written Statement that prior to selling this property to the defendant Digitally No. 2, Ms. Manju Gupta, the consent of the plaintiff had been taken as they both initially made joint efforts to sell the entire Ground floor and were in touch with the broker but later the Plaintiff No.2 was not inclined to sell her portion and since the broker had a ready buyer, he sold his portion. Though the plaintiffs have denied that they had any prior knowledge, but it can be determined only after the recording of evidence. It is a mixed question of fact in law and cannot be decided as a preliminary issue.

60. In view of this, it is held that the Issue No. 1, cannot be treated as a Preliminary Issue since it cannot be decided without recording of evidence as it involves mixed question of fact and law. It is held that Issue No.1 be decided along with other issues, after recording of evidence of the parties. CS(OS) 553/2017

61. The Suit be listed before the Roster Bench for further proceedings/recording of the evidence of the parties on 27.09.2024.

JUDGE AUGUST 30, 2024 Digitally