# K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa Batil, Since Deceased by His Lrs and Other

- **Citation:** 2025 INSC 1298
- **Court:** Supreme Court of India
- **Decided:** 2025-11-10
- **Bench:** J.B. Pardiwala, R. Mahadevan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/k-s-manjunath-and-others-v-moorasavirappa-muttanna-chennappa-batil-since-38061
- **Pages:** 80

## Headnote

Whether the High Court committed any error in passing the
impugned judgment whereby it allowed the appeals filed by the
vendees and set aside the decree passed by the Trial Court, while
granting the relief of specific performance of Agreement to Sell
executed by the Original Vendors in favour of the Original Vendees
and holding the Appellants-Subsequent Purchasers not to be the
bona fide purchasers of the subject land for value without notice.
Headnotes†
Specific Relief Act, 1963 - Unilateral termination of the
agreement to sell by one party - Impermissible, except where
the agreement itself is determinable in nature in terms of s.14 -
Original vendors executed an unregistered Agreement to Sell
(ATS) in favour of the original vendees in respect of 354 Acres
of the Subject Land - However, later, they sent a Notice of
Termination to the original vendees thereby terminating the
ATS - Subsequently, original vendors sold the subject land to
the subsequent purchasers - Original vendees filed suit inter
alia seeking specific performance of the ATS against both the
original vendors and the subsequent purchasers - Trial Court
held that the original vendees failed to make good their case
for grant of relief of specific performance - In appeals by the
original vendees, High Court decreed the suit for specific
performance in their favour - Challenge to:
Held: Unilateral termination of the agreement to sell by one party
is impermissible in law except in cases where the agreement
itself is determinable in nature in terms of s.14 - If such unilateral
termination of a non-determinable agreement to sell is permitted
* Author
44
[2025] 12 S.C.R.
Supreme Court Reports
as a defence, then virtually every suit for specific performance
can be frustrated by the defendant by placing an unfair burden
on the plaintiff, who despite performing his part of the obligations
and having showcased readiness and willingness, would require
to also seek a separate declaration that the termination was bad in
law - In such cases, the burden cannot be casted upon the plaintiff
to challenge the alleged termination of agreement - If a contract
itself gives no right to unilaterally terminate the contract, or such
right has been waived, and a party still terminates the contract
unilaterally then that termination would amount to a breach by
repudiation, and the non-terminating party can directly seek specific
performance without first seeking a declaration - In the event it is
found that the termination of agreement to sell by the defendant was
not valid, then such an agreement to sell will remain subsisting and
executable - In the present case, ATS was devoid of any clause
enabling termination for convenience or otherwise empowering
either party to terminate unilaterally - ATS being non-determinable
in nature, no unilateral expression of termination could have lawfully
extinguished the obligations undertaken thereunder - Neither of
the grounds assigned in the notice of termination constituted a
valid basis for terminating the ATS - Grounds cited in the notice of
termination, namely, the subsistence of a status quo order and the
death of one of the original vendors cannot be said to be based on
any default or breach by the original vendees - Original vendees
performed their part by paying a substantial amount and were
also ready and willing to perform the terms of ATS - Termination
of ATS vide notice of termination was unilateral and also not
bona fide - Termination was invalid - ATS continues to remain
alive, subsisting, and executable - Once the alleged termination
of agreement in question is found to be not bona fide and being
done in a unilateral manner, no declaration challenging the alleged
termination is required. [Paras 43, 54, 55, 61, 66]
Specific Relief Act, 1963 - s.19(b) - Requisites to claim
protection under - Bona fides of the subsequent purchasers
in purchasing the subject land - If can claim protection/s.19(b):
Held: To claim protection u/s.19(b), the pur

## Text

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[2025] 12 S.C.R. 43 : 2025 INSC 1298
K.S. Manjunath and Others
v.
Moorasavirappa @ Muttanna Chennappa Batil,
Since Deceased by His Lrs and Other
(Civil Appeal No(s). 13507-13508 of 2025)
10 November 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]
Issue for Consideration
Whether the High Court committed any error in passing the
impugned judgment whereby it allowed the appeals filed by the
vendees and set aside the decree passed by the Trial Court, while
granting the relief of specific performance of Agreement to Sell
executed by the Original Vendors in favour of the Original Vendees
and holding the Appellants-Subsequent Purchasers not to be the
bona fide purchasers of the subject land for value without notice.
Headnotes†
Specific Relief Act, 1963 - Unilateral termination of the
agreement to sell by one party - Impermissible, except where
the agreement itself is determinable in nature in terms of s.14 -
Original vendors executed an unregistered Agreement to Sell
(ATS) in favour of the original vendees in respect of 354 Acres
of the Subject Land - However, later, they sent a Notice of
Termination to the original vendees thereby terminating the
ATS - Subsequently, original vendors sold the subject land to
the subsequent purchasers - Original vendees filed suit inter
alia seeking specific performance of the ATS against both the
original vendors and the subsequent purchasers - Trial Court
held that the original vendees failed to make good their case
for grant of relief of specific performance - In appeals by the
original vendees, High Court decreed the suit for specific
performance in their favour - Challenge to:
Held: Unilateral termination of the agreement to sell by one party
is impermissible in law except in cases where the agreement
itself is determinable in nature in terms of s.14 - If such unilateral
termination of a non-determinable agreement to sell is permitted
* Author
44
[2025] 12 S.C.R.
Supreme Court Reports
as a defence, then virtually every suit for specific performance
can be frustrated by the defendant by placing an unfair burden
on the plaintiff, who despite performing his part of the obligations
and having showcased readiness and willingness, would require
to also seek a separate declaration that the termination was bad in
law - In such cases, the burden cannot be casted upon the plaintiff
to challenge the alleged termination of agreement - If a contract
itself gives no right to unilaterally terminate the contract, or such
right has been waived, and a party still terminates the contract
unilaterally then that termination would amount to a breach by
repudiation, and the non-terminating party can directly seek specific
performance without first seeking a declaration - In the event it is
found that the termination of agreement to sell by the defendant was
not valid, then such an agreement to sell will remain subsisting and
executable - In the present case, ATS was devoid of any clause
enabling termination for convenience or otherwise empowering
either party to terminate unilaterally - ATS being non-determinable
in nature, no unilateral expression of termination could have lawfully
extinguished the obligations undertaken thereunder - Neither of
the grounds assigned in the notice of termination constituted a
valid basis for terminating the ATS - Grounds cited in the notice of
termination, namely, the subsistence of a status quo order and the
death of one of the original vendors cannot be said to be based on
any default or breach by the original vendees - Original vendees
performed their part by paying a substantial amount and were
also ready and willing to perform the terms of ATS - Termination
of ATS vide notice of termination was unilateral and also not
bona fide - Termination was invalid - ATS continues to remain
alive, subsisting, and executable - Once the alleged termination
of agreement in question is found to be not bona fide and being
done in a unilateral manner, no declaration challenging the alleged
termination is required. [Paras 43, 54, 55, 61, 66]
Specific Relief Act, 1963 - s.19(b) - Requisites to claim
protection under - Bona fides of the subsequent purchasers
in purchasing the subject land - If can claim protection/s.19(b):
Held: To claim protection u/s.19(b), the purchaser must show
three things: (a) purchase for value, (b) payment in good faith,
and (c) absence of notice of the earlier contract - Subsequent
purchasers cannot take shelter u/s.19(b) - They had sufficient notice
of the facts that an ATS dated 28.04.2000 existed; the names and
[2025] 12 S.C.R.
45
K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
addresses of the original vendees; that an earnest money amounting
to Rs.2,00,000/- had been paid by the original vendees to the
original vendors; that the original vendors had sought to terminate
the ATS due to their inability to execute the sale deed in favour
of the original vendees on account of a status quo order; that the
date of actual termination could not have coincided with the date of
notice; and that deemed termination would have arose only if the
original vendees had failed to claim the earnest money within one
month; and that despite the issuance of the notice of termination in
2003, the original vendees continued to contest the impleadment
application in the Original Suit No. 30 of 2001 until 2005 - These
circumstances should have reasonably aroused suspicion or at
the very least prompted further inquiry by any prudent bona fide
purchaser - Yet the subsequent purchasers despite having ample
opportunity to become aware of these facts abstained from making
any such inquiries - A subsequent purchaser who relies merely
on the assertions of the vendor or who chooses to remain content
with his own limited knowledge while consciously abstaining from
making further inquiry into the subsisting interests in the property
cannot escape the consequences of deemed notice - Thus, a
purchaser who has before him a document which on its very face
shows the termination to be unilateral and rooted in the vendors'
inconvenience cannot by shutting his eyes claim the benefit of
"good faith" - s.2(11) of the BNS. - s.3(22) of General Clauses
Act, 1897. [Paras 78, 81]
Specific Relief Act, 1963 - Unilateral termination of the
agreement to sell (ATS) by original vendors - If there was a
requirement of seeking a declaration from the court as regards
the legality and validity of the purported termination of the ATS
by the notice of termination issued by the original vendors:
Held: Once the alleged termination of a non-determinable
agreement in question is found to be not for bona fide reasons
and being done in a unilateral manner on part of the defendant,
it cannot be said that any declaration challenging the alleged
termination was required on part of plaintiff - In the present case,
the termination of ATS vide notice of termination was unilateral
and also not bona fide - Neither of the reasons assigned in the
notice of termination constituted a valid basis for terminating the
ATS - Termination was invalid - ATS continues to remain alive,
subsisting, and executable. [Paras 43, 54, 61]
46
[2025] 12 S.C.R.
Supreme Court Reports
Specific Relief Act, 1963 - s.16 (c) - Readiness and willingness
of the Original Vendees to perform the Agreement to Sell (ATS):
Held: s.16(c) requires that a plaintiff must both plead and prove that
he has either performed, or has always been ready and willing to
perform, the essential terms of the contract incumbent upon him -
A party seeking enforcement of a contract must establish that all
conditions precedent have been satisfied, and that he has either
discharged or stood prepared and willing to discharge his obligations
under the contract - Original vendees had performed their part
of the contract to the extent required, and had consistently been
ready and willing to perform their remaining obligations under the
ATS - Appellants directed to execute a sale deed in respect of the
subject land in favour of the Respondent Nos. 15 to 22, respectively
& the Respondent Nos. 1 to 5, respectively, and also hand over
vacant and peaceful possession of the subject land to them within
six months from the date of this judgment, subject to the fulfilment
of directions issued - Further directions issued. [Paras 82, 86, 90]
Specific Relief Act, 1963 - Law on unilateral termination visà-vis determinable contracts, discussed. [Paras 45-51]
Specific Relief Act, 1963 - Failure to challenge the legality
and validity of termination of ATS in the suit - Subsequent
purchasers argued that the Suit filed by the original vendees
inter alia seeking specific performance of ATS was not
maintainable because the original vendees failed to also seek
a declaration from the court in respect of whether the notice
of termination of the ATS was bad in law or invalid:
Held: The same would not preclude this Court to determine if the
suit for specific performance filed by the original vendees was not
maintainable for want of such declaration - Views adopted by the
High Courts on failure to seek declaration, discussed - Principles
of law enumerated. [Paras 30, 43]
Case Law Cited
I.S. Sikandar (Dead) by LRs v K. Subramani & Ors. [2013] 17
SCR 24 : 2013 (15) SCC 27; Sangita Sinha v. Bhawana Bhardwaj
[2025] 4 SCR 551 : 2025 SCC OnLine SC 723 - distinguished.
R. Kandasamy (since dead) & Ors. v T.R.K. Sarawathy & Anr.,
2024 SCC OnLine SC 3377; Annamalai v. Vasanthi, 2025 SCC
OnLine SC 2300; Indian Oil Corporation v. Amritsar Gas Service
[2025] 12 S.C.R.
47
K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
and Ors. [1990] Supp. 3 SCR 196 : (1991) 1 SCC 533; Ram
Niwas v. Bano [2000] Supp. 2 SCR 39 : (2000) 6 SCC 685; JP
Builders v. A. Ramadas Rao [2010] 15 SCR 538 : (2011) 1 SCC
429; Satya Jain v. Anis Ahmed Rushdie [2013] 3 SCR 319 : (2013)
8 SCC 131; Manjit Singh v. Darshana Devi, 2024 SCC OnLine
3431 - referred to.
Brahm Dutt v. Sarabjit Singh, 2017 SCC OnLine P&H 5489; Brahm
Dutt v. Sarabjit Singh, 2018 SCC Online SC 3961; Balwinder
Sarpal v. Ram Kumar Bansal, 2022 SCC OnLine P&H 440; S.K.
Ravichandran v. M. Thanapathy, 2022 SCC OnLine Mad 9094;
S.K. Ravichandran v. M. Thanapathy, 2022 SCC Online SC 2369;
Rajesh Sethi S.C. v. P.C. Sethi, 2023 SCC OnLine Del 7010; Kavi
Ghei v. Rohit Vaid, 2024 SCC OnLine Del 6118; A. Kanthudu v.
S. Venkat Narayana, Appeal No. 678/2007; Ajay Narain v. Arti
Singh, (2025) 316 DLT 425; A Murugan and Others v Rainbow
Foundation Ltd. and Ors., 2019 SCC OnLine Mad 37961; Narendra
Hirawat & Co. v. Sholay Media Entertainment Pvt. Ltd., 2020 SCC
OnLine Bom 391; DLF Home Developers Limited v. Shipra Estate
Limited, 2021 SCC OnLine Del 4902; Affordable Infrastructure &
Housing Projects (P) Ltd. v. Segrow Bio Technics India (P) Ltd.,
2022 SCC OnLine Del 4436; Kheoni Ventures (P) Ltd. v. Rozeus
Airport Retail Ltd., 2024 SCC OnLine Bom 773; Durg Singh v.
Mahesh Singh, 2004 SCC OnLine MP 9; Jammula Rama Rao v.
Merla Krishnaveni, 2002 SCC OnLine AP 646 - referred to.
Jones v. Smith (1841) 1 Hare 43 - referred to.
Books and Periodicals Cited
Pollock & Mulla (17th Edition) - referred to.
List of Acts
Specific Relief Act, 1963; General Clauses Act, 1897; Bhartiya
Nyaya Sanhita, 2023.
List of Keywords
Suit for specific performance; Agreement to Sell (ATS); Notice of
termination; Unilateral termination of the agreement to sell by one
party; Unilateral termination of a non-determinable agreement to
sell; Subsequent Purchasers not to be the bona fide purchasers
of the subject land for value without notice; Termination of ATS
unilateral and not bona fide; Termination was invalid; Section 19 (b),
48
[2025] 12 S.C.R.
Supreme Court Reports
Specific Relief Act, 1963; Section 16 (c), Specific Relief Act, 1963;
Readiness and willingness to perform the Agreement; Original
Vendors; Original Vendees; Subsequent Purchasers.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
13507-13508 of 2025
From the Judgment and Order dated 22.03.2017 of the High Court
of Karnataka Circuit Bench at Dharwad in RFA Nos. 4187 of 2013
and 4160 of 2012
Appearances for Parties
Advs. for the Appellants:
Dr. Aditya Sondhi, Dr. Joseph Aristotle S., Sr. Advs., Mr. Naveen
Nagarjuna, Ms. Priya Aristotle, Maeen Mavara M, Anubhav Kumar,
Ms. B. Lekshmi, Ms. Priya Aristotle.
Advs. for the Respondents:
Devadatt Kamat, Ms. Supreeta Sharanagouda, Sharanagouda
Patil, Mrs. Supreeta Sharanagouda, Yash S Tiwari, Nishanth
Patil, Rajesh Inamdar, Harsh Pandey, Arijit Dey, Abhishek Gupta,
Awanish Gupta, Ms. Bhumi Agrawal, Ms. Supreeta Sharanagouda.
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the
following parts:-
INDEX*
A. FACTUAL MATRIX ..................................................................
2
B. SUBMISSIONS OF THE PARTIES .........................................
14
(i).
Submissions on behalf of the Appellants / Subsequent
Purchasers ......................................................................
14
* Ed. Note: Pagination as per the original Judgment.
[2025] 12 S.C.R.
49
K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
(ii). Submissions on behalf of the Respondents / Original
Vendees ..........................................................................
17
C. ANALYSIS .................................................................................
19
(I).
Failure to challenge the legality and validity of
termination of ATS in the suit ........................................
19
(a)
Views adopted by the High Courts on failure to seek
declaration ................................................................
28
(b)
Whether the ATS dated 28.04.2000 was in nature
determinable? ..........................................................
53
(II). Bona fides of the subsequent purchasers in purchasing
the subject land ...............................................................
73
(III). Readiness and willingness of the Original Vendees to
perform the ATS ................................................................
87
D. CONCLUSION ...........................................................................
95
1.
Leave Granted.
2.
Since the issues raised in both the captioned appeals are the same,
the parties are same, and the challenge is also to the self-same,
judgment and order passed by the High Court, those were taken up
for hearing analogously and are being disposed of by this common
judgment and order.
3.
These appeals arise from the common judgment and order passed
by the High Court of Karnataka in the Regular First Appeal Nos.
4187 of 2013 and 4160 of 2012 respectively by which the High
Court allowed the two appeals filed by the vendees and thereby, set
aside the judgment and decree dated 21.07.2012 passed by the 2nd
Additional Senior Civil Judge at Haveri, Karnataka ("Trial Court")
in Original Suit No. 36 of 2007, while granting the relief of specific
performance of Agreement to Sell dated 28.04.2000 ("ATS") executed
by the Respondent Nos. 6 to 13 ("Original Vendors") in favour of the
Respondent Nos. 15 to 22 respectively & the Respondent Nos. 1 to 5
respectively ("Original Vendees") and holding the Appellants herein
50
[2025] 12 S.C.R.
Supreme Court Reports
("Subsequent Purchasers") not to be the bona fide purchasers of
the subject land (as defined below) for value without notice.
A.
FACTUAL MATRIX
4.
For the sake of convenience, the respective positions of the contesting
parties to the present lis before the various courts leading upto this
Court is tabularly illustrated herein below:
Before This
Court
Before The
High Court
Before The
Trial Court
Particulars
Appellants
Respondent
Nos. 8 to 15
Defendant
Nos. 9 to 16
Subsequent Purchasers
of subject land
Respondent
Nos. 1 to 5
(Legal Heirs
of Defendant
No. 7 on
record)
Appellants
Defendant
No. 7
One of the Original
Vendees of the subject
land, however, he was
arrayed as a defendant in
the suit. This defendant
supported the case of
plaintiffs.
Respondent
Nos. 6 to 13
(Legal Heirs
of Defendant
Nos. 4 and 6
on record)
Respondent
Nos. 1 to 6
Defendant
Nos. 1 to 6
Original Vendors of the
subject land
Respondent
No. 14
Respondent
No. 7
Defendant
No. 8
One of the Original
Vendees of the subject
land, however, he was
arrayed as a defendant in
the suit. This defendant
was proceeded ex-parte
by the Trial Court
Respondent
Nos. 15 to 22
Appellants
Plaintiffs
Original Vendees of the
subject land
Respondent Nos. 15 to 22, Respondent Nos. 1 to 5, and Respondent
No. 14 being the original purchasers of subject land are also collectively
being referred to as "Original Vendees" in the present matter.
[2025] 12 S.C.R.
51
K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
5.
On 28.04.2000, the original vendors executed an unregistered
ATS in favour of the original vendees in respect of 354 Acres of
Agricultural Watan Land bearing survey no. 12/2 part 12/2A situated
in village Basavanakoppa, Taluk Shiggaon, District Haveri, Karnataka
("Subject Land") for a total sale consideration of Rs. 26,95,501/- out
of which the original vendees paid an amount of Rs. 2,00,000/- as
earnest money to the original vendors. It was agreed that an additional
amount of Rs. 5,00,000/- would be paid by the original vendees to
the original vendors at the time of registration of the ATS and the
balance sale amount would be paid at the time of registration of
the sale deed. It was also agreed that the original vendees would
execute the sale deed within two months of the original vendors,
informing them about the change of subject land from new tenure
to old tenure in the record of rights, surveying, measuring, fixing the
boundaries of subject land and shifting 19 tenants residing on the
subject land to one particular place. Between the years 2000 and
2001, the original vendees paid some further amount to the original
vendors, in all aggregating to Rs. 8,12,500/-.
6.
On 24.03.2001, one Sunil Anand Rao Desai, nephew of the original
vendors, instituted the Original Suit No. 30 of 2001 in the court
of the Principal Senior Civil Judge at Haveri against the original
vendors herein inter alia seeking partition and possession of certain
properties including the subject land and revocation of a partition
deed dated 29.12.1996 (unrelated to the present case) to which
the original vendees were not parties. On 11.04.2001, an order of
status quo came to be passed by the Principal Senior Civil Judge.
When the original vendees came to know about the institution of the
Original Suit No. 30 of 2001, they took steps to enforce their rights
under the ATS and sought to implead themselves as parties in the
said suit by filing an impleadment application dated 27.08.2001.
The said application came to be rejected by the Principal Senior
Civil Judge vide its order dated 16.03.2005. Later, aggrieved by
rejection to impleadment application, the original vendees preferred
a Writ Petition being WP No. 17952 of 2005 before the High Court.
However, the same also came to be dismissed by the High Court
vide its order dated 18.07.2005.
7.
In the interregnum and during the pendency of the aforementioned
Original Suit No. 30 of 2001, the original vendees got the subject
land converted from new tenure to old tenure on behalf of the original
52
[2025] 12 S.C.R.
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vendors and also persuaded those 19 tenants who were residing on
the subject land to relocate themselves to some other portion of the
land. Meanwhile, one of the original vendees i.e. the Respondent
No. 14 herein entered into an agreement dated 28.12.2002 wherein
he released and relinquished his right under the ATS in favour of
the remaining original vendees.
8.
On 10.03.2003, the original vendors sent a Legal Notice ("Notice of
Termination") to the original vendees thereby terminating the ATS
and informing them of their inability to execute a sale deed inter alia
for two reasons - (i) Long pendency of the Original Suit No. 30 of
2001 and the status quo order in force therein, and (ii) The death of
one of the original vendors i.e., Smt. Godavari @ Mahalaxmi Kulkarni.
In the said notice of termination, the original vendors called upon
the original vendees to take back the earnest money paid by them
and treat the ATS as cancelled within one month from the date of
receipt of said notice, failing which the ATS would be "deemed to be
cancelled". The relevant portion of the said notice reads as under:
"In view of the pending litigation and death of Smt. Godavari
urf Mahalakshmi G. Kulkarni, my clients are not in a
position to go ahead with the transaction as per agreement
of sale deed dt. 28.04.2000. My clients cannot wait for
an indefinite period. Furthermore they cannot be definite
about their share in the land in view of the litigation and
it is also subject to the decision of the court.
Hence, my clients are unable to execute a sale deed
in respect of the land in question as per agreement dt.
28.04.2000. Under the circumstances, you are hereby
called upon to take back your earnest money and to treat
the agreement of sale dt. 28.04.2000 as cancelled within
a period of one month from the date of receipt of this
notice. Failing which the agreement of sale dt. 28.04.2000
is deemed to be cancelled and the legal effects and rights
of my clients will take their own course and my clients will
be at liberty to deal with the above said land in accordance
with law."
(Emphasis Supplied)
9.
To the aforesaid, the original vendees on 21.03.2003 gave a reply
stating as follows:
[2025] 12 S.C.R.
53
K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
(i).
That they had fulfilled the terms of the ATS by getting the subject
land surveyed, measured, and boundaries fixed, and carrying
out the conversion of tenure of the subject land which otherwise
was the obligation of the original vendors under the ATS;
(ii). That they had time and again requested the original vendors to
perform their part of the obligation of executing the sale deed;
(iii). That they were always ready and willing to perform their part
of the contract;
(iv). That the further performance of the ATS had to be suspended
due to the order of status quo passed in the Original Suit No. 30
of 2001 and the same would not render the ATS unenforceable;
(v). That the original vendors were duty bound to execute the
sale deed in their favour after the disposal of the Original Suit
No. 30 of 2001;
(vi). That the death of one of the original vendors would not have
the effect of cancellation of the ATS because the legal heirs
would be bound to perform in that regard;
(vii). That for all the above grounds the question of taking back the
earnest money did not arise.
10. No further response was given by the original vendors to the aforesaid
reply to their notice of termination. On 10.02.2007, the plaintiff in
the Original Suit No. 30 of 2001 viz., Sunil Anand Rao Desai filed a
memo to withdraw the suit and get the status quo order vacated in
effect thereto. On the basis of the withdrawal memo, the Principal
Senior Civil Judge vide its order dated 14.02.2007 dismissed the
Original Suit No. 30 of 2001 as being withdrawn and thus, the status
quo order came to be vacated in effect thereto. Pursuant to the
withdrawal of the said suit, the original vendors executed the sale
deeds dated 20.02.2007 and 02.03.2007 respectively in favour of
the subsequent purchasers, selling the subject land for a total sale
consideration of Rs. 71,00,000/-.
11. Having obtained knowledge of the sale deeds executed in favour of
the subsequent purchasers, the original vendees instituted the Original
Suit No. 36 of 2007 in the Trial Court on 09.07.2007 inter alia the
relief of seeking specific performance of the ATS dated 28.04.2000
against both the original vendors and the subsequent purchasers.
54
[2025] 12 S.C.R.
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12. The original vendees prayed for the following reliefs:
"16. The plaintiffs pray: -
(a) That the defendants be specifically ordered to perform
the agreement dated 28.04.2000 and do all acts necessary
to put the plaintiffs in full possession of the suit property
as owners at the cost of the plaintiffs after receiving the
balance consideration from the plaintiffs;
(b) That the above acts be got done through Court
Commissioner in case defendant/s fail to execute and
register the sale deed;
(c) In case for any reason whatsoever the court comes
to the conclusion that the specific performance cannot be
ordered, then the court may be pleased to order refund
of amounts paid with damages and compensation which
is total sum of Rs. 26,95,501/-;
(d) Costs and such other reliefs as court deems fit and
proper."
13. Pursuant to the above, the Trial Court framed the following issues:
"1. Whether plaintiffs prove that, defendants No. 1, 2, 4
and 6 and two others have agreed to sell the suit land
RS No. 12/2 i.e. 12/2A measuring 354 acres of village
Basasvanakoppa for a sum of Rs: 26,95,501/- on 28.4.2000
and paid Rs. 2,00,000/- as earnest money?
2. Whether plaintiffs prove that, defendants No. 1, 2, 4 and
6 and others have agreed to execute the sale deed within
one month after completion of the work of sub division.
3. Whether plaintiffs prove that they have paid amount of
Rs. 9,45,000/- as shown in schedule B?
4. Whether plaintiffs prove that, they are ready, ever ready
and always ready to perform their part of contract?
5. Whether defendants No.1 to 4 and 9 to 16 prove that
suit of the plaintiffs is hopelessly barred by them?
6. Whether defendant No. 1 to 4 prove that the suit of
the plaintiffs is not maintainable without seeking relief of
cancellation of sale deed?
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
7. Whether deft. No. 10 proves that, deft. No. 9 to 16 are
bonafide purchase of suit lands for valid consideration?
8. Whether plaintiffs are entitled to the relief of specific
performance of contract of sale?
9. What order or decree?"
14. The Trial Court answered the issues as under:
(a) Issue Nos. 1, 2, 4 and 7 respectively were answered in the
affirmative and the Issue No. 3 was answered partly in the
affirmative -
(i).
That the original vendees successfully proved that the
original vendors had agreed to sell the subject land
for sale consideration of Rs. 26,95,501/- and had paid
Rs. 2,00,000/- as earnest money;
(ii). That the original vendees successfully proved that the
original vendors had agreed to register the sale deed
within one month after the completion of subdivision work;
(iii). That the original vendees claim to have paid Rs. 9,45,000/-
in overall to the original vendors yet the evidence indicates
that the original vendees had paid a total of Rs. 8,12,500/-
to the original vendors;
(iv). That the original vendees successfully proved that they
were always ready and willing to perform their part of the
contract;
(v). That the original vendees failed to prove that the
subsequent purchasers had prior knowledge of the ATS.
(vi). That the subsequent purchasers have proved that they
are bona fide purchasers of the subject land for valid
consideration without notice.
(b) Issue Nos. 5, 6, and 8 respectively were answered in the
negative -
(i).
That the delay in filing the suit was caused due to the
pendency of the Original Suit No. 30 of 2001 and the original
vendees had filed the suit after the execution of the sale
deed by the original vendors in favour of the subsequent
purchasers. Thus, the suit filed by the original vendees
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was within limitation from the date of the disposal of the
Original Suit No. 30 of 2001 as well as the execution of
the sale deeds;
(ii). That the suit of the original vendees was maintainable
without seeking the relief of cancellation of the sale deeds.
This was because the original vendees were not party to
those sale deeds and they had filed the suit for specific
performance on the basis of ATS only;
(iii). That the original vendees failed to prove that they were
in actual possession of the subject land from the date of
execution of the ATS and that the subsequent purchasers
had bona fide purchased the subject land. Therefore, the
grant of relief of specific performance in favour of the
original vendees would cause hardship to the subsequent
purchasers.
(c)
Issue No. 9 followed with the following order and direction -
(i).
That the original vendees had failed to make good their
case for grant of relief of specific performance and that
in the alternative, the original vendees were entitled to
refund of an amount of Rs. 8,12,500/- alongwith damages
@9% p.a.
15. Aggrieved by the judgment and decree dated 21.07.2012 passed
by the Trial Court, the original vendees filed two separate appeals
i.e., the Regular First Appeal Nos. 4160 of 2012 and 4187 of 2013
respectively, before the High Court. As no cross objections were filed
by the subsequent purchasers, the High Court framed the following
point for its determination:
"1. Whether the defendant 9 to 16 had established that they
were bona fide purchasers for value of the suit property?"
16. The High Court allowed the two appeals by a common judgment
and order dated 22.03.2017. It was held that the subsequent
purchasers had been informed of the ATS by the original vendors
and a copy of the notice of termination of ATS was also shared
with the subsequent purchasers. This in High Court's opinion would
indicate that the subsequent execution of sale deeds in favour of the
subsequent purchasers was a deliberate act and in plain disregard to
[2025] 12 S.C.R.
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
the subsisting ATS in favour of the original vendees. The High Court
also observed that as the original vendors had not responded to the
reply of original vendees to the notice of termination, the termination
of ATS could never be said to have reached to its logical end, and
that the ATS was still alive and binding.
17. Thus, the High Court held that the subsequent purchasers were not
bona fide purchasers of the subject land for value without notice as
they were aware of the earlier ATS executed in favour of the original
vendees. The High Court directed the subsequent purchasers to
execute the sale deeds in favour of the original vendees and put
them in physical possession of the subject land. The original vendees,
in turn, were directed to pay the balance sale consideration to the
subsequent purchasers. The relevant portions of the impugned
judgment at Page Nos. 29 to 31 are as under:
"Apparently, there was no rejoinder to the reply notice. It is
also not shown that the defendants had offered to return
the advance amount received, nor was it claimed to have
been returned. The termination of the agreement was hence
not taken to its logical end. The unilateral termination could
not therefore said to be valid and binding on the plaintiffs.
Defendants no.1 to 6 were therefore aware of the
circumstance that the advance amount paid by the
plaintiffs was not refunded nor was it claimed to have
been forfeited on any alleged breach of contract on the
part of the plaintiffs. In the face of which, the circumstance
that close on the heels of, the plaintiff in the civil suit in
OS 30/2001 having withdrawn the suit, that was claimed
as an impediment for completion of the sale transaction,
defendants no. I to 6 having sold the property in favour
of Defendants no.9 to 16, who in turn were said to have
been informed of the agreement of sale and the same
having been terminated under the notice dated 10-32001 and a copy of the same also said to having been
furnished to the said defendants, would plainly indicate
that the sale transaction was carried out deliberately and
blatantly in the face of a subsisting agreement of sale in
favour of the plaintiffs, with a clear intention of defeating
the said agreement of sale in favour of the plaintiffs. Such
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a deliberate act on the part of Defendants no. I to 6 and
9 to 16 would not enable them to claim that as they have
achieved a fait accompli, though defendants may claim
to be innocent and bona fide purchasers for value, as it
is found that they were aware of the agreement of sale in
favour of the plaintiffs, it cannot be said that the contract is
no longer capable of ; performance as the property is now
in the hands of a third party. This may be true of genuinely
bona fide purchasers and not such third-party purchasers
who have brazenly entered into the transaction with eyes
wide open and with notice of the subsisting agreement.
The consequence would be that even defendants no. 9
to 16 would be obliged to complete the sale, as persons
claiming under Defendants no. 1 to 6 by the due execution
of a sale deed or sale deeds in favour of the plaintiffs and
to convey the suit property in favour of the plaintiffs.
Incidentally, it is our firm opinion that it would be unjust to
grant a lesser relief to the plaintiffs in directing the refund
of the earnest money or to embark upon an exercise of
determining any damages which the plaintiffs could very
well claim. Such an exercise would have been justified
if the defendants no. 9 to 16 had established their bona
fides, which they have not.
In the result, the appeals are allowed and the judgment of
the trial court is set aside. The suit for specific performance
is decreed. Defendants 9 to 16 shall execute sale deeds
in favour of the plaintiffs in respect of such portions of
the suit property that they may have purchased from
Defendants no. 1 to 6, in favour of the plaintiffs and put
them in physical possession of the same. The plaintiffs
shall pay the balance sale price in consideration thereof,
proportionately. The sale transactions shall be completed
within a period of three months, if not earlier. In the event
of default on the part of the said defendants in this regard,
the plaintiffs shall be entitled to have the sale deeds
executed through the court below, in the manner as may
be directed by it."
(Emphasis Supplied)
[2025] 12 S.C.R.
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
18. In such circumstances referred to above, the subsequent purchasers
are here before us with the present appeals.
B.
SUBMISSIONS OF THE PARTIES
(i). Submissions on behalf of the Appellants / Subsequent
Purchasers
19. Dr. Aditya Sondhi, the learned senior counsel appearing for the
subsequent purchasers would submit that the courts below committed
a serios error in decreeing the suit for specific performance filed by
the original vendees in as much as the same was barred by limitation.
The learned counsel argued that as per Article 54 of the Limitation
Act, 1963, the period of the limitation to institute a suit for specific
performance is 3 years from the date when a plaintiff has notice of
refusal of performance. According to the learned counsel, the ATS
was terminated by the original vendors vide notice of termination
dated 10.03.2003 and thus, the limitation period could be said to
have expired on 10.03.2006. However, the original vendees filed
the Original Suit No. 36 of 2007 on 09.04.2007 i.e. after a delay of
total 11 months.
20. He further submitted that the original vendees' explanation as
regards delay in filing the Original Suit No. 36 of 2007 by relying on
the pendency of their impleadment application in the Original Suit
No. 30 of 2001 is misconceived in as much as: (a) the impleadment
application of the original vendees' in the Original Suit No. 30 of 2001
was filed much prior to the notice of termination and on the basis of
a wholly different cause of action and (b) the notice of termination
was issued by the original vendors on 10.03.2003 i.e. later in time
to the filing of the impleadment application, giving rise to a fresh
cause of action in respect of specific performance.
21. The learned senior counsel further submitted that the Original Suit No.
36 of 2007 filed for seeking specific performance was not maintainable
in law in the absence of there being any prayer seeking declaration
in respect of the legality and validity of the termination of the ATS.
For this, the learned counsel placed reliance on the decisions of
this Court in I.S. Sikandar (Dead) by LRs v K. Subramani & Ors.,
reported in 2013 (15) SCC 27 and R. Kandasamy (since dead) &
Ors. v T.R.K. Sarawathy & Anr., reported in 2024 SCC OnLine
SC 3377 respectively wherein this Court had held that a suit for
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specific performance is not maintainable in the absence of a prayer
for declaration that the notice of termination of agreement of sale
is bad in law.
22. The learned senior counsel further submitted that his clients are
bona fide purchasers of the subject land for value without notice
and that too after 4 years of the termination of the ATS. He would
submit that at the time of the sale of the subject land there was no
suit pending. According to the learned counsel, the ATS being an
unregistered document and the same being terminated by the original
vendors, they had no occasion to have notice to anything contrary.
The learned counsel submitted that the subsequent purchasers
made bona fide enquires about the title of the original vendors and
all other necessary particulars before purchasing the subject land.
The subsequent purchasers were made aware by the original vendors
about the termination of the ATS vide the notice of termination prior
to the purchase of the suit property. It was argued that the title and
possession of the subject land was with the original vendors at the
time of the sale.
23. In the last, the learned senior counsel submitted that the ATS was
executed in favour of six different individuals who were joint vendees
and that there was no division of each person's interest. Four of the
original vendees chose to file the Original Suit No. 36 of 2007 as
plaintiffs. Two of the original vendees i.e. the Respondent Nos. 1 to 5
herein and the Respondent No. 14 herein respectively, were arrayed
as the defendant no. 7 and defendant no. 8 respectively in the Original
Suit No. 36 of 2007, out of which the defendant no. 7 supported
the case of the original vendees, however, the defendant no. 8 was
proceeded ex-parte by the Trial Court. This defendant no. 8 chose
not to appear before the High Court. He has not appeared before
this Court as well. One of the original vendees i.e. defendant no. 7
never sought the relief of specific performance of the ATS. On such
premise, the learned counsel argued that the ATS being indivisible,
and in the absence of all the vendees seeking enforcement of the
same, the relief of specific performance is not enforceable in law.
(ii). Submissions on behalf of the Respondents / Original
Vendees
24. Mr. Devadatt Kamat, the learned senior counsel, appearing for the
original vendees vehemently submitted that no error not to speak of
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other
any error of law could be said to have been committed by the High
Court in passing the impugned judgement and order. On the point of
limitation, the learned counsel argued that the Trial Court after due
consideration of the facts of the present matter and the evidence on
record rightly held that the Original Suit No. 36 of 2007 filed by the
original vendees was not time barred.