Clarifying that deferred payments after notice of a prior agreement defeat good faith under Section 19(b) and that uncontroverted readiness and willingness suffices under Section 16(c); upholds the trial decree and reverses the first appellate decision, binding on Jharkhand’s subordinate courts and persuasive elsewhere.
Summary
| Category | Data |
|---|---|
| Case Name | SA/78/1999 of SOBHAGMALL JAIN Vs UDAY LALSAHU And ORS. |
| CNR | JHHC010085471999 |
| Date of Registration | 15-09-1999 |
| Decision Date | 25-08-2025 |
| Disposal Nature | Allowed |
| Judgment Author | HON’BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY |
| Court | High Court of Jharkhand at Ranchi |
| Bench | Single Judge |
| Precedent Value | Binding authority for subordinate courts in Jharkhand |
| Overrules / Affirms | Affirms trial court decree; overrules first appellate judgment dated 31-07-1999 |
| Type of Law | Civil – Specific Performance / Specific Relief Act |
| Questions of Law |
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| Ratio Decidendi |
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| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon |
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| Facts as Summarised by the Court |
|
| Citations | 2025 JHHC 25223 |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Jharkhand |
| Persuasive For | Other High Courts in India |
| Overrules | Judgment of the 1st Appellate Court in T.A. No. 27/88 dated 31-07-1999 |
| Distinguishes | Cases denying constructive notice solely because vendor remained in major possession (e.g., AIR 1987 Pat 5) |
| Follows | Patna HC decisions in 1968 BLJR 28 and AIR 1987 Pat 5 regarding constructive notice |
What’s New / What Lawyers Should Note
- Clarifies that part payment made after notice of a prior sale agreement cannot qualify as “good faith” under Section 19(b).
- Holds that deliberate concealment of purchase and failure to inquire imputes constructive notice.
- Reaffirms that uncontroverted pleadings and evidence of readiness and willingness under Section 16(c) suffice, even if funds are deposited only after a court directive.
- Emphasizes that deposit of balance consideration in execution of a decree complies with Explanation 2(c) of Section 16.
- Warns practitioners to scrutinize the timing of payments and inquiries in specific-performance proceedings.
Summary of Legal Reasoning
- Interpreted Section 19(b): exemption unavailable if purchaser pays full consideration only after learning of prior agreement.
- Assessed constructive notice: concealment by defendant 2 & 3 and vendor’s own admissions in prior litigation demonstrate knowledge.
- Applied Section 16(c): readiness and willingness need only be averred, remain uncontroverted, and be backed by notice and conduct.
- Distinguished Patna HC precedents: vendor’s continuing possession does not absolve a purchaser of inquiry obligations.
- Confirmed that full payment timing is critical for “good faith” in specific performance cases.
- Restored trial court’s decree, reversing the first appellate decision.
Arguments by the Parties
Petitioner (Plaintiff)
- Defendants 2 & 3 had actual and constructive notice of the August 1979 agreement.
- Written statement in prior suit (July 1980) confirmed vendor’s admission of the sale agreement.
- Part payments made in 1981 demonstrate lack of good faith under Section 19(b).
- Plaintiff’s readiness and willingness was uncontroverted: shown by legal notice and continuous efforts; deposit of ₹39,000 ordered and made.
Respondents (Defendants 2 & 3)
- Registered sale deeds and delivery suffice to transfer title; deferred payments valid under Transfer of Property Act.
- Balance payments made in good faith, after vendor vacated premises; no actual notice of prior agreement.
- Vendor’s possession excused further inquiry; readiness and willingness issue immaterial once sale deed executed.
- No denial of readiness and willingness in pleadings; first appeal validly refused to consider it.
Factual Background
In August 1979 the plaintiff and vendor agreed to sell plot 597 for ₹40,000 (₹1,000 paid; vendor granted possession of a small portion). On January 25 1980 the vendor executed registered sale deeds in favor of defendants 2 & 3 for ₹45,000 (₹10,000 paid each). The plaintiff gave a registered notice on June 27 1980 and filed TS No. 43/1981 for specific performance. The trial court decreed performance; the first appellate court reversed; the High Court’s second appeal restored the decree.
Statutory Analysis
- Section 16(c) SRA requires that a plaintiff aver and prove performance or continuous readiness and willingness; Explanation 2(c) allows deposit of money upon court direction instead of tender.
- Section 19(b) SRA bars enforcement against a transferee for value who has paid full consideration in good faith and without notice; “good faith” is defeated by payments made after notice of the original contract.
Alert Indicators
- 🚨 Breaking Precedent – Tightens Section 19(b) “good faith” test to require full payment before notice.
- ✔ Precedent Followed – Patna HC’s rules on constructive notice (1968 BLJR 28; AIR 1987 Pat 5).
- 📅 Time-Sensitive – Emphasizes timing of payments under Specific Relief Act.