# 6 S.C.R. 456 SYSCON CONSULTANTS P. LTD v. M/S. PRIMELLA SANITARY PROD. P. LTD. AND OTHERS

- **Citation:** [2016] 6 S.C.R. 456
- **Court:** Supreme Court of India
- **Decided:** 2016-09-19
- **Case number:** Civil Appeal No. 2910 of2013
- **Bench:** Kurian Joseph, R.F. Nariman
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/6-s-c-r-456-syscon-consultants-p-ltd-v-m-s-primella-sanitary-prod-p-ltd-and-31540
- **Pages:** 32

## Headnote

Specific Performance - Sale agreement - By defendant Nos.
1 to 6 with the plaintiff - Claiming to be absolute owners of the
property in question and concealing the fact that the property was
mortgaged with Bank and there was another heir (their sister) -
However, the defendants 1 to 6 had agreed to give clear title to the
plaintiff - Advance paid by the plaintiff - Thereafter defendants 1
to 6 communicated to the plaintiff their inability to sell the property
as their sister claimed pre-emptive rights - Plaint(ff filed suit (suit
No. 8811987) for specific performance of the contract - The sister
and her husband also filed suit for declaration and injunction (Suit
No. 10511987) in respect of suit property as well as other properties,
against defendant Nos. 1 to 6 and the plaintiff - In recovery
proceedings by the mortgagee Bank, the distress sale of the suit
property was averted on plaintiff repaying the loan amount on the
request of defendant Nos. 1 to 6 - Mortgage was redeemed - The
sister initiated inventory proceedings for division of the property
including suit property - Jn the inventory proceeding the court was
not informed about the pending suit, nor the plaintiff was informed
about the same - In the inventory proceedings sister and her husband
obtained suit property - Writ petition by the sister challenging the
proceedings of the Asstt. Registrar culminating in redemption of
mortgage - Petition disposed of by High Court giving liberty to
pursue their rights as per law - Plaintiff thereafter amended the
suit (8811987) impleading sister and her husband as additional
defendants (as defendant Nos. 7 and 8), also challenging inventory
proceedings and sought compensation - Defendant Nos. 7 and 8
sold their property to defendant No. 9 - Trial court dismissed the
suit of plaintiff and upheld the rights of defendant Nos. 7 and 8 -
High Court decreed the suit to the extent of the share of defendant
Nos. 1 to 6 - Appeal by the plaintiff, by the defendant Nos. 1 to 8
456
SYSCON CONSULTANTS P. LTD. v. M/S. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS
and also by the purchaser of the property i.e. defendant No. 9 -
Held: In view of the conduct of the parties, it is not a fit case to
exercise discretionwy jurisdiction u/Art. 136 of Constitution - The
plaintiff had throughout .been readft;and willing to perform its
obligations under the agreement to sell - In view of the nature of
the property, monetary compensation would not be an adequate
alternative to specific performance - The plaintiff went to the extent
of discharging the mortgage by paying a sum which was almost
three times the amount of sale consideration - Defendant Nos. I to
8 had already given up on their rights in the suit property by not
taking steps to avoid the distress sale at the instance of the Bank -
Defendant Nos. 1 to 6 also failed to ·complete the sale even after
clear title was made out, i.e. when the obstacle of mortgage was
removed - The agreement became enforceable after clear title was
made out - Even if undivided share of one of the other heirs of the
property cannot be transferred, the remaining share of other heirs
can be transferred - Art. 2177 of Portuguese Civil Code, 1867
does not prohibit alienation of undivided interest - No injustice is
caused to defendant No. 9 eithe1~ as he purchased the property
under litigation being fully aware of the same - Portuguese Civil
Code, I867 -Art. 2177 - Constitution of India -Art. 136.
Dismissing tbe appeals, the Court
HELD: l. The suit property, no doubt is jointly owned by
Defendants 1 to 8. But the agreement for sale was only by the
Defendants 1 to 6. They not only excluded the sister and her
husband but made two deliberate and wrong representations: that
Defendants 1, 3 and 5 are the only children and that the suit
property was the only estate left by their parents. [Para 40) [477B-C)
'·
2. Fully conscious of the fact that there was another heir
namely the sister and that the property had already been
mortgaged

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[2016) 6 S.C.R. 456
SYSCON CONSULTANTS P. LTD.
v.
M/S. PRIMELLA SANITARY PROD. P. LTD. AND OTHERS
(Civil Appeal No. 2910 of2013)
SEPTEMBER 19, 2016
[KURIAN JOSEPH AND R.F. NARIMAN, JJ.]
Specific Performance - Sale agreement - By defendant Nos.
1 to 6 with the plaintiff - Claiming to be absolute owners of the
property in question and concealing the fact that the property was
mortgaged with Bank and there was another heir (their sister) -
However, the defendants 1 to 6 had agreed to give clear title to the
plaintiff - Advance paid by the plaintiff - Thereafter defendants 1
to 6 communicated to the plaintiff their inability to sell the property
as their sister claimed pre-emptive rights - Plaint(ff filed suit (suit
No. 8811987) for specific performance of the contract - The sister
and her husband also filed suit for declaration and injunction (Suit
No. 10511987) in respect of suit property as well as other properties,
against defendant Nos. 1 to 6 and the plaintiff - In recovery
proceedings by the mortgagee Bank, the distress sale of the suit
property was averted on plaintiff repaying the loan amount on the
request of defendant Nos. 1 to 6 - Mortgage was redeemed - The
sister initiated inventory proceedings for division of the property
including suit property - Jn the inventory proceeding the court was
not informed about the pending suit, nor the plaintiff was informed
about the same - In the inventory proceedings sister and her husband
obtained suit property - Writ petition by the sister challenging the
proceedings of the Asstt. Registrar culminating in redemption of
mortgage - Petition disposed of by High Court giving liberty to
pursue their rights as per law - Plaintiff thereafter amended the
suit (8811987) impleading sister and her husband as additional
defendants (as defendant Nos. 7 and 8), also challenging inventory
proceedings and sought compensation - Defendant Nos. 7 and 8
sold their property to defendant No. 9 - Trial court dismissed the
suit of plaintiff and upheld the rights of defendant Nos. 7 and 8 -
High Court decreed the suit to the extent of the share of defendant
Nos. 1 to 6 - Appeal by the plaintiff, by the defendant Nos. 1 to 8
456
SYSCON CONSULTANTS P. LTD. v. M/S. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS
and also by the purchaser of the property i.e. defendant No. 9 -
Held: In view of the conduct of the parties, it is not a fit case to
exercise discretionwy jurisdiction u/Art. 136 of Constitution - The
plaintiff had throughout .been readft;and willing to perform its
obligations under the agreement to sell - In view of the nature of
the property, monetary compensation would not be an adequate
alternative to specific performance - The plaintiff went to the extent
of discharging the mortgage by paying a sum which was almost
three times the amount of sale consideration - Defendant Nos. I to
8 had already given up on their rights in the suit property by not
taking steps to avoid the distress sale at the instance of the Bank -
Defendant Nos. 1 to 6 also failed to ·complete the sale even after
clear title was made out, i.e. when the obstacle of mortgage was
removed - The agreement became enforceable after clear title was
made out - Even if undivided share of one of the other heirs of the
property cannot be transferred, the remaining share of other heirs
can be transferred - Art. 2177 of Portuguese Civil Code, 1867
does not prohibit alienation of undivided interest - No injustice is
caused to defendant No. 9 eithe1~ as he purchased the property
under litigation being fully aware of the same - Portuguese Civil
Code, I867 -Art. 2177 - Constitution of India -Art. 136.
Dismissing tbe appeals, the Court
HELD: l. The suit property, no doubt is jointly owned by
Defendants 1 to 8. But the agreement for sale was only by the
Defendants 1 to 6. They not only excluded the sister and her
husband but made two deliberate and wrong representations: that
Defendants 1, 3 and 5 are the only children and that the suit
property was the only estate left by their parents. [Para 40) [477B-C)
'·
2. Fully conscious of the fact that there was another heir
namely the sister and that the property had already been
mortgaged to the Cooperative Bank, a very significant clause
was incorporated in the agreement to the effect that the vendors
could execute a proper conveyance in favour of the purchasers
and in that regard, the vendors would make any other person or
persons to join them so as to convey an absolute title to the
purchaser or to redeem any charge or encumbrance. This clause
clearly shows that the Defendants 1 to 6, had still genuinely
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[2016] 6 S.C.R.
intended to execute the sale covering both the eventualities
namely, joining the sister and her husband and redeeming the
mortgage. [Para 40) [477-D-E]
3. At one stage, Defendants 1 to 8 apparently were sailing
together, faced with the distress sale of the suit property by the
bank. It was in that context that the Defendants l to 6 made a
request to the Plaintiff (by letter dated 14.11.91 Exbt PW l/F)
that in case the Plaintiff cleared the loan liability, they would get
in the sister also for the conveyance of the property and settle
the whole dispute. Thereafter, Defendants 1 to 6 left the Plaintiff
and consequently wanted the agreement to get frustrated. [Para
41) [477-F-G; 478-D]
4. As far as Defendants 7 and 8 are concerned, they not
only went back on their undertaking in Court to pay the dues to
the bank so as to avert the auction sale, they have not pursued
their claim if any, to the title to the property as per the liberty
granted to them by judgment dated 10'" October, 1994 of the
High Court in Writ Petition No. 277 of 1994. The High Court
apparently was clear in its mind, that if at all, Defendants 7 and 8
, wanted to save the situation by exercising their right to preemption under the Portuguese Laws, they could still do that within
six months. Yet, nothing was done. In any case, more than six
months after the judgment dated 10.10.1994, they sold the suit
property on 14.11.1995 when as a matter of fact, Defendants 1 to
8 had by their conduct forfeited all rights and interests in respect
of the suit property. Thus, there is no question of right of preemption available to Defendants 7 and 8. [Para 42) [478-D-F)
5. The Defendants 7 and 8 chose, with the assent of
Defendants 1 to 6 in the inventory proceedings, the suit property,
fully knowing that the property was disputed. Normally, one would
avoid a disputed property or leave a disputed property to the
authors of the dispute, i.e., the brothers in this case. None of the
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Defendants 1-8 told the District Judge in the inventory
proceedings that the property was already in dispute, and that
two civil suits were pending in which case the District Judge
would have certainly taken note of the litigation. [Para 43] [478G-H; 479-A)
H
SYSCON CONSULTANTS P. LTD. v. M/S. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS
6. It cannot be said that it was not necessary to give notice
of inventory proceedings to anybody other than the m~·mbers of
the family who are entitled to succeed to the estate or disclose
any charge on the property. So long as there is no bar for
transferring the undivided interest in the estate by any -of the -
legal heirs, any c_harge or liability to the estate was also to be
disclosed in the inventory proceedings so that the estate could
be partitioned taking note of such charges, and in case of litigation,
the proceedings would have awaited the outcome thereof. [Para
45) [479-C-D]
7. Thus, Defendants 7 and 8 had full knowledge of the suit
for specific performance and also the liability to the Cooperative
Bank when they chose the disputed property as the\r ·share in
the inventory proceedings and yet, they were not prepared to
even clear the liability to the Cooperative Bank. It was the Plaintiff
who paid the money and averted the auction sale and redeemed
the property. Had the Plaintiff not cleared the dues to the Bank,
the property would have been auctioned, divesting Defendants 7
and 8 of their rights and interests in the property. [Para 46] [ 479F-G)
8. In view of the conduct of the parties, this is not a fit case
to exercise discretionary jurisdiction under Article 136 of the
Constitution of India. On reading the correspondence between
the parties, it is clear that the Plaintiff has throughout been ready
and willing to perforin its obligations under the Agreement to
Sell. The other unique feature of this case is that the suit property
is an island off the coast of Goa which is not readily capable of
valuation. This fact also shows that monetary compensation would
not suffice and be an adequate alternative to specific performance.
The third unique feature of this case is that, the Plaintiff went to
the extent of discharging the mortgage with the Bank by paying
a sum of Rs. 17 lakhs which was almost three times the amount
of the consideration mentioned in the agreement, i.e., Rs.
6,50,000/-. [Paras 48 and 49] [480-E-H)
-
9. It is clear that Defendants 1 to 6 failed or neglected to
complete the sale even after clear title was made out when the
obstacle of the mortgage was removed. Clause 9 of the sale
agreement specifically states that if after the title is made out,
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the vendor fails and neglects to complete the sale, and/or to carry
out any of the obligations on his part as contained in the
Agreement, the purchaser shall be at liberty to enforce specific
performance of the Agreement or recover the earnest money
with interest at 21 per cent per annum at their option. Having
clearly opted throughout to enforce specific performance, justice
of the case requires that Clause 9 of_the agreement must be
applied in favour of the Plaintiff. After inducing the plaintiff as
per PW-1/F letter to pay Rs.17 lakhs to the co-operative bank to
clear the dues on the clear understanding that the defendants 1
to 8 would thereafter execute the sale deed, they cannot go back.
The clear title stood made out at that stage and the agreement
was enforceable thereafter. [Para 50) [481-B-E]
10. Even if the undivided share of one of the other heirs of
the property cannot be transferred, the remaining share of the
other heirs certainly can be transferred. [Para 51) [481-E-F]
Kartar Singh v. Harjinder Singh and Ors. (1990) 3 SCC
517; Sardar Singh v. Krishna Devi (Smt) and Anr. (1994)
4 SCC 18; A. Abdul Rashid Khan (Dead) and Ors. v.
P.A.K.A. Shahul Hamid and Ors. (2000) 10 SCC 636;
Surinder Singh v. Kapoor Singh (Dead) Through Lrs.
and Ors, (2005) 5 SCC 142 : 2005 (3) SCR1084;
Gajara Vishnu Gosavi v. Prakash Nanasaheb Kamble
and Ors. (2009) 10 SCC 654 : 2009 (14) SCR 569 -
relied on .
. 11. It is not correct fo say that under Article 2177 of the
Portuguese Civil Code, 1867, there was an absolute bar for
transfer of any portion of the estate or a specific item of the estate.
Article 2177 does not prohibit alienation of undivided interest,
which is in tune with the principle underlying Section 44 of the
Transfer of Property Act, 1882. Defendants 1-8 had already given
up on their right in the suit property by not taking steps to avoid
the distress sale at the instance of the Bank. Despite specifically
getting reserved a liberty to proceed further after the redemption
of the property by the Plaintiff, nothing was done by Defendants
7 and 8. They also did not exercise their right of pre-emption
available under the Portuguese Law. Conspicuously, none of the
defendants entered the witness box despite the voluminous and
SYSCON CONSULTANTS P. LTD. v. MIS. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS
clinching evidence tendered by the Plaintiff, obviously to avoid
inconvenient questions, particularly, based on PW-1/F. [Paras
57 and 58] [486-C-D; F-H)
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12. No substantial or grave injustice is caused to th·e
Defendants, in particular, Defendant No. 9, who, with open eyes,
purchased litigation. On the contrary, the justice of the case, on
facts, is in favour of the Plaintiff, and therefore, no interference
under Article 136 of the Constitution is required. Once, it is found
that justice of the case on facts does not _require interference,
this Court, even at the appellate stage, is well within its discretion
to stay its hands off. [Paras 59 and 60] [487-A-C]
Taherakhatoon (D) by Lrs. v. Salambin Mohammad
(1999) 2 sec 635 : 1999 (1) SCR 901 - relied on.
Case Law Reference
(1990) 3 sec 517
relied on
Para 52
(1994) 4 sec 18
relied on
Para 53
(2000) 10 sec 636 ·
relied on
Para 54
2005 (3) SCR 1084
relied on
Para 55
2009 (14) SCR 569
relied on
Para 56
1999_(1) SCR 901
relied on
Para59
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2910
of2013.
From the Judgment and Order dated 05.08.20 I 0 of the High Court
of Judicature at Bembay, Panaji Bench, Goa in First Appeal No. 179 of
2003.
WITH
C.A. Nos. 2909, 291Iand2912 of2013
Conmt. Pet. (C) No. 89 of2016 in C. A. No. 2910 of20l3 .
. J.P. Cama, Amit Sibal, Sr. Advs., Ajay Veer Singh Jain, R. K.
Verma, U. R. Bokadia, Atul Agarwal, Ms. Divya Garg, Mohd. Irshad
Hanif, Ms. Shobha, Ms. Akanksha Kaushik, Yashraj Singh Deora,
. Ms.Priyadarshinee Singh, Ms. Ashmita Singh, Ms .. Shalini Sati Prasad,
Vivek Raja, Tahir Ashraf Siddiqui, Amitesh Chandra Mishra, Nishant
Awana, Ms. Rini·Badoni, Azmat H. Amanullah, Ms. Vishakha. Jha,
Debdatta Ray Choudhary, Mis. Karanjawala & Co., Balaji Srinivasan,
Advs. with themforthe appearing)larties.
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[2016) 6 S.C.R.
The Judgment of the Court was delivered by
KURIAN, J.: 1. These appeals essentially deal with a dispute on
the validity and executability of an agreement for sale and once that
issue is tackled, the rest are practically not of much significance. The
parties are described as they are in the suit for specific performance
No. 88/1987 on the file of the Civil Judge Senior Division at Margao.
The Plaintiff is the first respondent herein. The Plaintiff had sought for
specific performance of the agreement dated 04.09.1985 made with
Defendants I to 6 for conveyance of the suit property known as Conco
situated at village Palolem in Canacona Taluka in the State of Goa. The
7•h Defendant was the Bank where the Defendants had mortgaged the
suit property.
2. In the agreement dated 04.09.1985, the Defendants I to 6
claimed that they were the absolute owners of the suit property and that
the property was free from all attaclur.ents, charges, etc. The agreed
consideration was Rs.6.5 lakhs and, on the date of agreement, Rs.SO,
000 was given as advance. The relevant portions of the agreement for
sale dated 04.09.1985, are extracted below:
"3.The Vendor hereby declares that the said land agreed
to be sold is free from any encumbrance, attachment, charge
or other claims. rights and demands, and is not affected by
any notice or scheme of acquisition or requisition and that
the Vendors have among themselves the full QQ_wer and
absolute authority to sell and deal with the said land. The
Vendor shall at his own expense effectually indemnify and
keep indemnified the purchasers from and against all claims.
demands. losses. damages, cost and expenses. if any and
whatsoever, sustained, incurred or suffer by the Purchaser,
on account of any defect in the title of the_ Vendor or any
change or encumbrance or any scheme of acquisition or
requisition affecting the land hereby contracted to be sold.
4. The Purchaser has this day paid to the Vendor the
sum ofRs.50,000/-(Rupees fifty thousand only) as and by
way of earnest money (the payment and receipt whereof
the Vendor does hereby admit and acknowledges) and the
balance of the purchase money amounting to Rs.6 lacs
(Rupees six lacs only) shall be paid at the time of the
SYSCON CONSULTANTS P. LTD. v. MIS. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
completion of the sale. Simultaneously with the execution
of this agreement the Vendor shall at his own cost furnish
to the Purchasers an abstract of all title deeds and other
papers and writings including copies or extracts from records .
of the Talati or Circle Inspector relating to the said land.
The sale shall be completed within one month from the date
of establishment of a good and marketable title of the
Vendor."
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"6. The Vendor hereby agrees to answer all reasonable
requisitions and satisfy all objections on title to be 1nade by
the Purchasers or their Solicitor or Representatives. If a
good and marketable title is made out and the said land is
found to be free from all encumbrance, attachments and
charges and other rights, demands and claims and not
effected by any notice or scheme of acquisition or requisition
AND permission and no objection from any Authority or
Authorities, if any, is obtained by the Vendor, the Vendor
will execute a proper conveyance or conveyance in favour
of the Purchasers or their nominee 01· nominees or assigns
in which the Vendor shall makethe other person or persons,
if any. join, if nece;;sary. to pass and convey an absolute
title unto the Purchaser or his nominee or nominees or
assigns or to redeem any charge or encumbrances. The
Vendor shall bear and pay all outgoings, expenses and
liabilities in respect of the said land upto and inclusive of
the day of the completion of the sale. The Vendor shall
hand over vacant and peaceful possession to the Purchaser
of the said land at the time of completion of the sale."
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"8. If a good and marketable title is not made out or the
said land is found to be subject to any encumbrances
charges or attachments or other claims, rights or demands
the Purchaser shall be at liberty to rescind this Agreement
and the Vendor shall in the event forthwith refund the said
earnest money with interest at 21 % per annum.
9. If the Vendor fails and or neglects to complete the
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[2016] 6 S.C.R.
sale after the title being made out as aforesaid or otherwise
to carry out any one or more of the obligations on his part
as herein contained or enjoyed upon by any law for the
time being in force the Purchaser shall be at liberty to enforce
specific performance of this Agreement or recover the
earnest money with interest at 21 % per annum."
(Emphasis supplied)
3. It may be relevant to note that the sale was to be c:ompleted
,within one month from the date of establishment ofa good and marketable
title of the vendor and, if the title was not made out or in case the said
land was found to be subject to any encumbrance or charges or
attachments or other claims, rights or demands, the Plaintiff was at liberty
to rescind the agreement and, in that event, the Defendants 1 to 6 would
refund the earnest money with interest@2 l per cent per annum, It was
also agreed between the parties that in case the Defendants 1 to 6 fail to
complete the sale after a good and marketable title is made out, the
Plaintiff was at liberty to enforce the specific performance of the
agreement or recover the earnest money with interest @ 21 per cent
per annum. It is also significant to note that the Defendants 1 to 6 had
clearly agreed to give a clear title to the property, if necessary by joining
any ·other person or persons or even to redeem any charge or
encumbrance.
4. Defendants I to 6 traced their authority to transfer the property
to ,a deed of declaration of succession executed by them on 03 .11.1981
before a Notary Public as provided under the Portuguese Law. It was
declared that Vishwanata Putshotam Sinai Gaitonde and his wife
Anandibai Viswanata Gaitonde died intestate ... "leaving'their sole and
only heirs their three children ... "and" ... there does not exist persons,
who, according to law, tnay have preferential right over the said legal
heirs or may concur with them to the estate." It was further declared
that their parents ... "left no movable pr(lperties but only an immovable
property situated at Palolem Canacona known iis Conco" (the suit
property).
5. On account of the Portuguese personal law applicable in Goa,
their wives also became heirs and thus the agreement for sale with the
· Plaintiff was executed by Defendants I to 6.
' J.O
6. While the steps for the sale were in progress, Smt. Kishori
SYSCON CONSULTANTS P. LTD. v. M/S. PRIMELLA
465
SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
Na yak daughter ofVishwanata Purshotam Sinai Gaitonde and Anandibai
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Viswanata Gaitonde, real sister of Defendants I, 3 and 5 raised an
objection that she was also entitled to succeed to the estate of her parents
and, in particular, she was interested in the suit property, and therefore,
they should not proceed with tbe sale.
7. Smt. Kishori Nayak was later impleaded as 7th Defendant fo
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the suit and her husband as the 8th. According to the 7th Defendant, she
had informed the Plaintiff of her objection. But in any case,·it has come
in the evidence of Plaintiff that the 1 ~Defendant- Shri Gurudas Gaitonde
had informed the Plaintiff af>out the objection, by his letter· dated
03.04.1987.
8. In the Special Civil Suit No. 88/87/A filed by the Plaintiff in
the court of Civil Judge Senior Division, Margao, the Plaintiff claimed
that the agreement was enforceable at the option of the Plaintiffpurchaser. To quote paragraph-7 of the plaint:
"7. The Plaiptiff submits that the said Agreement dated 4•h
September, 1985 is specifically enforceable at the option of
the plaintiff, and the plaintiff is entitled to purchase of the
suit property on the terms and conditions contained in the
said Agreement. In terms of the said Agreement, the
Defendants no. 1 to 6 are liable to make out a good and
marketable title of the suit property free from all
encumbrances, restrictions, charges, claims and demands
and execute a proper conveyance by joining other person
or persons thereto, ifnecessary, to convey an absolute title
thereof to the plaintiff."
9. At paragraph-14, the Plaintiff has acknowledged the receipt of
letter dated 03.04.1987 from Defendant 1, to treat the .agreement as
cancelled. Paragraph-14 reads as follows:
"14. In the meantime, the plaintiff received a demand draft
bearing No. OL/A/85 016341 dated 3-4-1987 drawn on
State Bank oflndia for a sum of Rs 20,000/~ the defendant
no. I alongwith a letter expressing the intention of the
defendants no. 1 to 6 to treat the agreement dated· 4•h
September, 1985 as cancelled."
I 0. Contextually, we may refer to the letter dated 03.04.1987 which
is Exhibit-PW l/C in the suit. To the extent relevant, the letter reads as
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SUPREME COURT REPORTS
[2016] 6 S.C.R.
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"Dear Shri Malhotra,
In my letter dated 5.3.87, I have informed regarding my
inability to sale of land at Canacona.
Mr. Bhatnagar called on to me last Thursday. I have to
explain also the position to him. He advised me to sell the
property and forget about the notice of my sister. He said
you are able to face any action from my sister's side, to be
frank I am helpless.
I discussed the issue with lawyer I am told that in any
case sale would invite serious litigation and I would not be
left out even if you take over this responsibility particularly
if my sister exercises her right of preemption.
As you know that I am not keeping well due to my heart
problem and family litigation will aggravate my health.
I have thought over this aspect seriously and only you
can relieve me from this agony.
As promised in my above letter 5.3.87 I am sending
with this letter a bank draft for Rs.20,000/-. The balance I
shall remit as early as possible kindly bear with me some
time .... "
The Plaintiff, however, did not accept the amount but insisted on
specific performance.
11. The suit originally maintained only the following reliefs:
"
(a) That Your Horiour may be pleased to pass a decree for
specific performance of contract dated 4•h September,
1985 made between the defendants no. I to 6 and the
plaintiff and direct the said defendants to execute a proper
deed of Conveyance of the suit property viz., the property
known as "CONCO" situated at Village Palolem in
Canacona Taluka, registered under No.J 4858 and 14859
of Book B-41, F 1. 64 (overleaf) in the Land Registration
Office at Margao, Goa surveyed under Survey No. 119,
SYSCON CONSULTANTS P. LTD. v. M/S. PRIMELLA
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SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
Sub-Division no. I ofNagarsem-Palolem Village and may
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further be pleased to direct the said defendants to do all
11cts, deeds and things for registration of the said Deed
of Conveyance;
(b) That Your Honour may be pleased to direct defendants
no. I to 6 to join the defendant no. 7 as a confirming
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party to the said Deed of Conveyance and arrange for
execution of the said deed by the defendant no. 7 as a
confirming party;
(c) For a decree of permanent injunction restraining the
defendants from selling, transferring and/or creating any
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encumbrance, interest, charge, restriction, claim or
dem11nd on the said property in favour of any person or
persons other than the plaintiff in any manner whatsoever;
(d) For interim injunction in terms of prayer (c);
(e) For such other further reliefs as Your Honour may deem
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fit and proper;
(t) For costs as Your Honour may deem fit and proper in
the circumstances of the case."
12. In the written statement filed on I 0.02.1988, Defendants 1 to
6 took the stand that the sale as per agreement could be performed only
"if a good and marketable title is made out" and if not, the agreement
was rescindable.
J 3, The objections on the part of the sister of Defendants 1, 3 and
5 and her buspand were also brought out in the written statement. To
quote:
\3. ''Sometime in the month of Feb. '87, sister of
defendant No. I, 3 & 5 and her husband set up a claim to
the ancestral property as a whole including the suit property.
On account of this the defendants.were in a tight corner on
the subject of sale of the suit property. Defendant No. I
accordingly wrote two letters one after the other to the
plaintiffs informing them of the defendants' inability to
convey title as per the agreement. A copy of the defendants
letter dated 05.03.87 is annexed hereto marked as Exhibit
5. Thereafter on 03.04.87 defendant No. I sent a Bank
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draft of Rs 20,000/- alongwith a covering letter which is
self explanatory. Annexed hereto and marked exhibit 6 is a
copy of the said letter.
Plaintiffs have suppressed these material facts and as
such are disentitled for equitable relief of specific
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performance. Plaintiffs have not approached this Court with
clean hands and this suit therefore has to be dismissed on
this ground alone."
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14. At paragraph-16 of the written statement, it was also disclosed
that the attempt on the part of the Defendants I, 3 and 5 to purchase
peace with their sister did not fructify and that she had filed a civil suit
for injunction. To quote paragraph-16:
"16. Defendants did write to the plaintiff's lawyer that
detailed reply would be sent as there was attempt from the
defendant's side to close the issue with the disputant sister
and her husband to enable the defendants to complete the
sale. But unfortunately, the sister Smt. Kishori P. Nayak
and her husband, Shri Prabhakant R. Nayak did not settle
the issue amicably and filed a civil suit in the court of the
Civil Judge Senior Division at Margao. The said suit is
registered as special civil suit no. 105/87/A and a civil
application filed in the same is registered as Misc.
Application No. 212/87/A. The Honourable Court has
passed a temporary injunction order restrainjng the
defendants from executing sale deed in respect of the suit
property in favour of the plaintiffs who are impleaded as
Defendant no. 7 in the said suit. The plaintiffs in the said
suit have inter alia challenged the enforceability and legality
of the agreement dated 4.09.85 which is the subject matter
of this suit also.
Defendants 1 to 6 herein state and submit that for proper
and effective adjudication of this suit Smt. Kishori
Prabhakant Nayak and Shri Prabhakant R. Nayak should
be added in this suit as defendants as they have leveled a
challenge to the enforceability of the agreement sought to
be specifically enforced in this suit by the plaintiff herein."
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15. In short, Defendants I to 6 wanted the suit to be dismissed in
SYSCON CONSULTANTS P. LTD. v. MIS. PRIMELLA
SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
view of the objection of Smt. Kishori Nayak.
16. It may be noted that Defendant 7 originally was the Cooperative
Bank with whom the suit property had been mortgaged; but it appears
on clearing the loan, the Bank was deleted and thereafter Smt. Kishori
Nayak was impleaded as Defendant 7 and her husband Shri Prabhakant
Ramrai Nayak as Defendant 8.
17. Special Civil Suit No. 105/1987/ A was filed by Smt. Kishori
Nayak, re<>I sister of Defendants 1, 3 and 5 and her husband Shri
Prabhakant R. Nayak before the Civil Judge Senior Division, Margao
against Defendants 1 to 6 and the Plaintiff. It was a suit for declaration,
permanent and temporary injunction. It was stated in the plaint that apart
from the suit property of Civil Suit No. 88/1987, five other items of
property were also left intestate. It was averred that the agreement of
sale of any property without the sister and her husband is null and void.
To quote from paragraph-7:
"7. Plaintiffs state that the defendants no. 7 is a company
which has entered into an agreement to sell the suit property
with defendant nos. I to 6 on the 4"' of September, 1985,
which agreement is impugned herein, ignoring the legal rights
of the plaintiffs to the suit property, in collusion with one
another and are about to execute the deed of conveyance
and as such the plaintiffs are compelled to file the suit to
seek the assistance of this Hon 'ble Court by an appropriate
order of declaration and permanent injunction restraining
the defendant number 1 to 6 from in any manner alienating
and/or executing any deed of conveyance or any other
instrument of transfer of possession of the suit property to
the name of the defendant no. 7 in pursuance of the
impugned agreement to sell allegedly entered into on 4'"
September 1985 declaring that the said agreement is abinitio null and void ad hence unforceable specifically."
18. Again, at paragraph-9, it has been averred that:
"9. Plaintiffs state that they being co-sharers and co-owners
of the suit property as aforesaid the defendant nos. 1 to 6
had no authority in law to negotiate the said deal without
their consent and knowledge with defendant no. 7 and on
this count alone the alleged agreement to- sell and/or the
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alleged deed of sale dated 4th December 1985 is ab-initio
void and the plaintiff's are entitled in law for such a
declaration."
19. At paragraph-14, it was m<:rn:d t1..i1 tl1c entire properties, left
intestate being ancestral, the same arc robe divided only as per Portuguese
Law of Succession through invenwry proceedings. To quote from
paragraph-14:
·' 14. Plaintiffs state that their share in the ancestral suit
property is undivided and indivisible till the suit property as
well as other ancestral properties are auctioned in appropriate
inventory proceedings to be initiated under the Portuguese
Law of Succession and till the shares of the heirs are
ascertained and as such the suit properly or any part of the
same cannot be sold as contemplated under the agreement
of sale dated 4th September 1985 ia exclusion to them.
Plaintiffs state that even ifthe inventory proceedings are
initiated and the properties art: auctioned amongst the
members of the family, they are entitled to exercise their
right of preemption and under the prevailing law of
succession governing this land."
20. Though there had been several other developments in between,
it is not necessary to refer t0 those aspects. Suffice to note that in the
meantime, inventory proceedings were initiated before the same court
of Civil Judge Senior Division at Margao at the instance of Defendants
7 and 8 namely, Smt. Kishori P. Nayak and her husband Shri Prabhakant
R. Nayak. Paragraphs- I to 4 of the petition being relevant are extracted
herein:
"\.The applicants are the daughter and son-in-law of the
Late Visvonata Purxotoma Sinai Gaitondc and the late
Anandibai V. Gaitonde who died on 26.10.1966 and
25.06.1976 respectively. Hereto annexed are the death
certificates.
2. The deceased left behind their heirs, their three sons and
their daughter, the applicant no. I herein.
3. The estate of the deceased has nm yet been pa1titioned
and continues undivided.
SYSCON CONSULTANTS P. LTD. v. MIS. PRIMELLA
471
SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
4. The son of the deceased, Mr. Ratnakar Vishwanath
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Gaitonde, resident of Vishwanath Sunirti, Super Market,
Ponda, Goa is competent to be appointed as Cabeca de
casal, he being the eldest son of the deceased."
· .. - -·
21. In the invento1y proceedings, the auction took place on
01.12.1990. The suit property was auctioned by the 71h Defendant- Smt.
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Kishori Nayak and the remaining estate was also divided amongst the
other heir& and the final orders in the inventory proceedings was passed
by the Civil Judge Senior Division, Margao on 30.01.1991.
22. The Plaintiff, thereafter, filed Civil Suit No. 329/1992 seeking
a declaration that inventory proceedings were vitiated by fraud to the c
extent of allocation of suit property to the 71h Defendant Smt. Kishori
Nayak and her husband and for setting aside the inventory proceedings.
23. In the meantime, the Cooperative Bank initiated recovery
proceedings by putting the suit property to public auction. The Bank
obtained an award and published the proclamation for the sale of the suit
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property by pub I ic auction. On I 0.01.1989, the Defendants 7 and 8, hence,
filed a Regular Civil Suit No. 3/1989/B for injunction restraining the bank
from proceeding with the sale. That suit was decreed as compromised
on 23 .04.1992. The relevant paragraphs from the decree read as follows:
"5. In such circumstances, the plaintiff was though legally
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not bound, morally feels her obligation not to put in jeopardy
the interest of the Bank, therefore she guarantees the
payment of the debt to the Bank (defendant no. 2) reserving
her right to recover the amount from defendant no. I (Smt.
Sunita Gaitonde)"
xxx
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xxx
xxx
"9. The plaintiff further agrees that in the event the plaintiff
fails to pay the entire liability within a period of 15 (fifteen)
days, the defendant no. 2 is free to sell the suit property in
auction and realize from the proceeds of the auction sale
the amount of loans, interest and other charges with clear
understanding that the asset value shall not be less than the
amount of principal and interest and other charges."
(Emphasis supplied)
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24. The Defendants 7 and 8 did not make any payment to the
Bank so as to avert the distress sale of the suit property and neither did
Defendants 1 to 6. The Defendants 7 and 8 in the compromise decree
had gone to the extent of giving up all hopes by agreeing that in case,
they failed to pay the dues, the suit property could be sold but the only
condition was thatthe sale amount should cover the entire liability arising
out of the loan including interest and other charges meaning thereby that
they were worried only about saving other assets. It is at that juncture
that the Plaintiff cleared the entire liability on payment of Rs. 17 lakh on
12.05.1993. Thus, the distress sale was averted, the mortgage was
redeemed and the charge on the property was released
25. The Defendants 7 and 8 filed a writ petition before the High
Court challenging the proceedings of the Assistant Registrar culminating
in redemption of mortgage. The Writ Petition was disposed of by judgment
dated 10.10 1994, stating :
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"Respondents Nos. 4 to · 10 mortgaged a property to
respondent No.2, Bank and took certain loan. The amount
was not paid by them. Respondent No.2, Bank, obtained
the said certificate and started recovery proceedings in
which the property was put to sale. At the time of the sale,
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respondent no. I, claiming interest in the property on the
basis of some Agreement of Sale, allegedly executed by
respondents Nos. 4 to I 0 in their favour paid Rs. 17,00,000/
- to the Recovery Officer, as a result of which the Recovery
Officer stopped the sale and directed the redemption of the
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mortgage in favour of Respondent Nos. 4 to 10.
2. The present petitioners claimed some title to the property
under inventory proceedings in 53/90/ A. They were not
parties to the mortgage, nor they are members ofrespondent
Nos. 2 Bank. They challenged the order passed by the
Recovery Officer on the ground that the amount tendered
by the respondent No. I could not have been accepted by
the Recovery Officer for the purpose of passing an order
ofredemption in favour of the mortgagors. !fat all such an
order was wrongly passed by the Recovery Officer the
person to be prejudiced would have been the Bank. The
SYSCON CONSULTANTS P. LTD. v. MIS. PRIMELLA
473
SANITARY PROD. P. LTD. AND OTHERS [KURIAN, J.]
mo11gagors as well as the Bank did not have any grievance
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on the point.
3. Grievance is sought to be raised by a third party, who
has hardly any locus standi in a proceeding under Rule 104
because the petitioners had never offered to pay any amount,
nor had they ever paid anything, either to the Bank, or to
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the Recovery Officer. Under such circumstances, we do
not think that the impugned order is against justice, equity
and good conscience.
4. Needless to say that ifthe petitioners claiming mere title
to the property have some rights to the property in question.
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They would be at liberty to pursue their rights according to
law. Petition is therefore disposed of.''
(Emphasis supplied)
26. Meanwhile, the Plaintiff's suit was dismissed for default on
18.09.1990 and was ultimately restored only on 05.02.1994. Thereafter
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the suit was amended and Smt. Kishori Nayak and her husband were
impleaded as additional Defendants, in 1998.
27. Additional reliefs for compensation to the tune of
Rs.12,29,030.80 and Rs.2,68,29,038.80 were added. The challenge to
the inventory proceedings was also incorporated by way of the
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amendment.
28. On 14.11.1995, the 7
111 and 8
111 Defendants, viz., the sister
Smt. Kishori and her husband, who had obtained the suit property in the
inventory proceedings, sold the same to the 9111 Defendant-Syscon
Consultants Pvt. Ltd. Thereafter, the Plaintiff sought amendment for
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cancel I ing that sale also. It may be stated that the 9
111 Defendant purchased
the suit property for a sum of Rs. 34,00,000/- knowing fully well that the
said property was in litigation and the fate of some of the litigations.
29. Though, there were certain other factual aspects as well, it is
not necessary to refer to the same. Suffice it to note that Civil Suit Nos.
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88/1987 and 105/1987 were tried together as per orders of High Court
of Bombay dated 19.04.1990 in Appeal from Order No. 54/89 with Civil
Application No. 192/89.
30. By common judgment dated 31.12.200 I, the Trial Court
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disposed of both suits upholding the right of 71h and 81h Defendants (the
sister and her husband). The Defendants I to 6 were directed to refund
the advance of Rs. 50 thousand with interest @ 21 per cent per annum
from the date of institution of the suit to the Plaintiff and further
Defendants I to 8 were directed to refund an amount of Rs.17 lakhs to
the Plaintiff with interest @ 6 per cent per annum from 12.05 .1993.
31.Aggrieved, the Plaintiff filed First Appeal No. 179/2003 before
the High Court of Judicature at Bombay, Panaji Bench, Goa.