Mr. Ram Chand Gupta, J.:-
Facts leading to the filing of present regular second appeal are as under:-
2. Gurdev Singh, Gurmail Singh, Gurmit Singh, Harbhajan Singh and Nasib Singh sons of Wattan Singh, jointly owned the land in dispute in equal shares. All of them agreed to sell the same to Sukhdev Kaur, appellant-plaintiff vide agreement to sell dated 24.1.1983. Agreement was executed by Gurdev Singh for himself as well as on behalf of his other brothers, namely, Gurmail Singh, Gurmit Singh, Harbhajan Singh and Nasib Singh. He received Rs.10,500/- as earnest money. It was agreed that the sale deed would be executed and registered on or before 21.4.1983.
3. The present suit has been instituted by Sukhdev Kaur, appellant-plaintiff for recovery of Rs.10,500/- which was paid as earnest money to Gurdev Singh, mainly on the ground that Central Government had drawn up a scheme for the establishment of Military Cantonment and as per that scheme, there was a proposal for acquisition of land situated at 16 villages including village Nasran within the revenue estate in which the land in dispute is located and the said fact was in the knowledge of respondentdefendant and, however, he intentionally did not disclose the same to appellant-plaintiff at the time of execution of the said agreement. Plea has also been taken that he was not having requisite power of attorney to sell the land on behalf of all other brothers and hence, the agreement was rendered void and a notice was served by her upon the defendant to refund a sum of Rs.10,500/-,which was taken as earnest money alongwith an equal amount of damages and on his failure to pay the said amount, the present suit has been filed.
4. Gurdev Singh, respondent-defendant contested the suit filed by appellant-plaintiff. Execution of the agreement in dispute has been admitted. However, it has been stated that he was having a valid power of attorney to sell the land on behalf of his brothers, namely, Gurmail Singh, Harbhajan Singh and Nasib Singh and that his 4th brother, namely, Gurmit Singh was ready and willing to join him in the execution of the sale deed and that he appended his signatures to the reply sent by him to the notice given by appellant-plaintiff. It is further pleaded that he was always ready and still willing to execute the sale deed according to the terms and conditions of the sale agreement. However, it is denied that there was any scheme for the establishment of the Military Cantonment in some villages including Village Nasran. Rather the plea has been taken that State Government as well as Central Government were working out on a scheme for development of Kandi area and that it was well known to the residents settled in that area and hence, it is contended that he was not guilty of suppression or concealment of material facts and that there was no defect whatsoever in the land agreed to be sold. Plea has also been taken that in the past as well, there has been various transactions of sale of land in those villages including Village Nasran. Specific plea has been taken that on 22.4.1983 and 26.4.1983, he and his brother Gurmit Singh attended the office of the Sub Registrar, Garshankar for execution/registration of the sale deed but plaintiff did not turn up and hence, appellant-plaintiff has committed breach of sale agreement and hence, she is not entitled for refund of earnest money.
5. On the pleadings of the parties, following issues were settled by learned trial Court:-
"1. Whether the defendant has committed fraud with the plaintiff by inducing her to execute the agreement in dispute? OPP"
2. Whether the plaintiff is entitled to the recovery of the suit amount from the defendant? OPP
3. Relief.”
6. Parties adduced evidence in support of their respective contentions before learned trial Court.
"7. While discussing issue no.1, learned trial Court has held that it is proved that the land in dispute has come under the scheme of establishment of Cantonment area and this fact was not disclosed by the defendant to the appellant-plaintiff and hence, the said issue was decided in favour of plaintiff and against the defendant."
8. Issue No.2 has also been decided in favour of the plaintiff and hence, suit filed by appellant-plaintiff for recovery of Rs.10,500/- was decreed with cost.
9. Aggrieved against the said judgment and decree, respondent-defendant filed appeal before learned Additional District Judge, Hoshiarpur, who vide impugned judgment and decree dated 5.5.1986 accepted the appeal by observing that defendant was having a valid power of attorney to execute the agreement to sell, in dispute, on behalf of three of his brothers and his other brother Gurmit Singh remained present in the office of Sub Registrar for getting the sale deed executed on the stipulated date and hence, it was held that it was plaintiff, who committed breach of terms and conditions of the agreement on the plea that there was some scheme of Central Government for establishment of cantonment area.
10. It has been averred that lower court findings that land in dispute has come under the scheme for establishment of cantonment area were recorded on the basis of no evidence, as no notice for acquisition of the disputed land situated within the revenue estate Nasran was published, when the agreement to sell was executed and rather no such notification was published till the date of decision of the suit. Hence, suit of appellant-plaintiff was ordered to be dismissed with cost.
11. Aggrieved against the said judgment and decree passed by learned first appellate Court, the present regular second appeal has been filed by appellant-plaintiff.
12. The present appeal filed by appellant-plaintiff was admitted by this Court on 12.8.1986 without framing substantial question of law, arising in this appeal.
13. A Full Bench of this Court in the case of Ghanpat v. Ram Devi AIR 1978 Punjab and Haryana 137 had taken a view that in view of Section 41 of the Punjab Courts Act, the amended provisions of Section 100 of the Code, as amended in 1976, were not applicable to the second appeals filed in this Court and accordingly, no substantial question of law was framed, nor the aforesaid regular second appeals were admitted on any such substantial question of law. However, the Hon'ble Apex Court in the case of Kulwant Kaur v. Gurdial Singh Mann (dead) by LRs (2001) 4 JT SC 158 : (AIR 2001 SC 1273) has held that after amendment of Code of Civil Procedure in the year 1976, thereby amending Section 100, Section 41 of the Punjab Courts Act had become redundant and repugnant to the Central Act, i.e., Code of Civil Procedure and therefore was to be ignored and therefore, the second appeal shall only lie to this court under Section 100 of the amended Code of Civil Procedure on a substantial question of law.
14. It may be mentioned here that though question of law was not framed at the time of admission of present appeal, and however, it has been observed by Full Bench of this Court in Dayal Sarup v. Om Parkash (since deceased) through L.Rs and others [2010(2) LAW HERALD (P&H) 930] : (2010-4)160 PLR 1, that this Court can formulate question of law as contemplated under section 100 of the code at any point of time before hearing of the appeal, even without amending the grounds of appeal. It has also been held that it is the duty of the Court to formulate substantial question of law while hearing the appeal under Sections 100(4) and 100(5) of the Code and question of law can be permitted to be raised at any stage of proceedings.
15. Hence, in view of this legal proposition, learned counsel for the appellant-plaintiff was asked to file substantial questions of law, stated to be involved in this appeal.
16. Learned counsel for the appellant-plaintiff has argued that the following substantial questions of law are involved in this appeal:-
"1. Once the performance of agreement to sell becomes difficult due to acquisition of land by the Government for establishing cantonment, whether the person who has paid earnest money is entitled to recover the money paid by him u/s 33 of the Specific Relief Act and Section 65 of the Contract Act?"
"2. Whether the plaintiff is entitled to interest as per the provisions of Interest Act, 1978 on the amount paid as an earnest money and on demand the same has not been refunded although performance of contract is impossible due to acquisition of the land subject matter of the agreement to sell?"
17. I have heard learned counsel for the parties and have gone through the whole record carefully on the aforementioned substantial questions of law, stated to be arising in this appeal.
"18. It has been contended by learned counsel for the appellant-plaintiff that the land in dispute is part of the area proposed to establish cantonment area and that this fact has been deposed by an official from the concerned department that site plan has been prepared for acquiring land for cantonment and proved certified copy of the proposed site plan of the cantonment, which is Ex.PW5/A. Hence, it is contended that learned first appellate court has committed illegality in not considering the said evidence and in setting aside the well reasoned judgment passed by learned trial Court. It is further contended that as the said material fact, which was in the knowledge of respondent-defendant has been concealed from appellant-plaintiff and hence she is entitled for refund of the earnest money alongwith interest on the said amount. It has been contended that performance of the contract has become impossible due to acquisition of the land in dispute."
"19. On the other hand, it has been contended by learned counsel for the respondent-defendant that no notification for acquiring the land in dispute has been issued till today and that appellant-plaintiff failed to get the sale deed executed after making payment of the remaining sale consideration on the false plea that performance of agreement has become impossible."
20. The main point, which is to be decided is as to whether performance of agreement to sell entered between the parties had become impossible due to alleged proposal for acquisition of the land for establishment of the cantonment area. However, even if it is accepted that there was a proposal for acquiring the land of some villages including the land in dispute for establishment of cantonment area, it cannot be said that performance of agreement to sell had become impossible. Admittedly, no notification acquiring the land in dispute has been issued even till today. It has been rightly observed by learned first appellate Court that such a scheme, if any, which was under consideration of the Central and the State Governments could not be made public, unless it was finalised in the sense that action for acquisition of land was initiated. The scheme, which was still at the Government level and which has not been finalised so far, could not be in the knowledge of defendant-Gurdev Singh and hence, he was not bound to disclose any such scheme to the appellant-plaintiff at the time of execution of the sale agreement. Hence, it cannot be said that any fraud has been committed by respondent-defendant with appellant-plaintiff at the time of execution of the agreement to sell. Rather, it shows that appellant plaintiff refused to get the sale-deed executed after making payment of remaining sale consideration on false ground that performance of agreement to sell has become impossible, whereas no such ground existed.
21. It is relevant to reproduce Section 55 of the Transfer of Property Act, 1882, which reads as under:-
55.Rights and liabilities of buyer and seller-
- In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:
(1) The seller is bound-
(a) to disclose to the buyer any material defect in the property or in the seller's title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;
(b) to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller's possession or power;
(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;
(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;
(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;
(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;
(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all incumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.
(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:
Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby he is hindered from transferring it.
The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller's possession or power:
Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.
(4) The seller is entitled-
(a) to the rents and profits of the property till the ownership thereof passes to the buyer;
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the non-payment, for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part from the date on which possession has been delivered.
(5) The buyer is bound-
(a) to disclose to the seller any fact as to the nature or extent of the seller's interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest;
(b) to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs: provided that, where the property is sold free from encumbrances, the buyer may retain out of the purchasemoney the amount of any encumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;
(c) where the ownership of the property has passed to the buyer to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;
(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable-in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.
(6) The buyer is entitled-
(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;
(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.
An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a), and paragraph (5), clause (a), is fraudulent.
22. As already discussed above, notification for acquisition of land including the land in dispute, situated within the revenue estate of village Nasran for the purpose of establishment of military cantonment area was not issued when the agreement to sell was executed. Even if there was any proposal pending with the Government in this regard, respondent-defendant was not bound to disclose the same and the same cannot be said to be a material defect in the suit land giving right to appellant-plaintiff to rescind the contract. As appellant-plaintiff has resiled from the contract and refused to get the sale deed executed as per the agreement, learned first appellate Court has rightly held that as per terms and conditions of the agreement, earnest money of Rs.10,500/- paid by appellant-respondent stood forfeited and respondent-defendant is not liable to refund the same to appellant-plaintiff.
23. Accordingly, both the substantial questions of law, stated to be arising in this regular second appeal, are decided against the appellant-plaintiff and in favour of respondent-defendant.
24. As a sequel to my above discussion, there is no merit in the present Regular Second Appeal. The same is, hereby, dismissed with cost.
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