P&H HC Upholds Sale To Later Buyers Without Notice, Rejecting Specific Performance Of Earlier Deal For Undivided Land Share

The plaintiffs relied on an agreement to sell dated 2 August 1993 for 8⅔ marlas, representing an undivided two-thirds share in 13 marlas, for Rs. 40,000; Rs. 15,000 was paid as earnest money.

The agreement contained recitals concerning delivery of possession.

The vendor subsequently sold the property to defendants 2 and 3 by registered sale deed dated 23 November 1993.

The trial court granted specific performance, finding the subsequent purchasers had notice of the agreement; the First Appellate Court reversed, holding them bona fide purchasers without notice and awarding the plaintiffs recovery of earnest money with interest.

The plaintiffs appealed under Section 100 CPC.

The Court applied Section 100 CPC, under which a regular second appeal may be entertained only where a substantial question of law arises; a concurrent or appellate finding of fact based on proper appreciation of the evidence is not to be disturbed merely because another view is possible.

It also applied the principles that an agreement must be construed as a whole, and that a purchaser’s notice—including constructive notice inferred from possession—must be assessed in light of the property’s nature and the agreement’s terms.

The Court held that the agreement concerned an undivided share, not a specifically identified portion of the land.

Read as a whole, its recitals did not establish that exclusive physical possession of an identifiable portion had been delivered to the plaintiffs when the agreement was made; the terms instead indicated that possession was intended to pass on execution of the sale deed.

The purchasers denied knowledge of the agreement, and the plaintiffs’ evidence did not establish actual notice.

Because the alleged possession did not support an inference of constructive notice in these circumstances, the First Appellate Court’s finding that the purchasers lacked notice was supported by the record and was not perverse.

No substantial question of law arose to justify interference.

The regular second appeal was dismissed, the First Appellate Court’s judgment and decree were upheld, and any pending miscellaneous applications were disposed of.