P L D 1969 Lahore 762 (PLP)

A. R. SHEIKH, J.

‑The dispute in this Second Appeal relates: to a piece of land measuring 8 marlas bearing Khasra No. 2403/1 situate in Ihata Bibi, Misri Shah, Lahore. According to the averments in the plaint, the plaintiffs‑appellants entered into an agreement of sale with Mirza Almas Ali Beg, the first respondent, for purchase of the said parcel of land for a sum of Rs. 2,500 on the 24th April 1957, when Rs. 500 were paid as earnest money. The first respondent deliberately delayed the completion of the sale, with the result that the consideration was enhanced to Rs. 3,500 on the 18th of December 1957, when a fresh agreement of sale (Exh. P. 4) was executed between the parties. The first res pondent again defaulted and the appellants on coming to know of the sale of the said land to Muhammad Hussain Shah, the second respondent (since died) filed a suit for specific performance of the agreement of sale. The suit was resisted on various grounds by both the vendor and the subsequent vendee, and the following issues were flamed, which fully reflect the pleadings of the parties "(1) Whether the plaintiff was ready and willing to perform his part of contract of the sale dated 18th December 1957? (2) Whether defendant No. 1 was ready and willing to perform his part of the contract referred to above? (3) What are the conditions of the contract dated 18th December 1957? (4) Whether the plaintiffs are estopped on account of laches from filing this suit for specific performance? (5) Whether defendant No. 1 is entitled to forfeit the earnest money? (6) Whether defendant No. 2 is a vendee without notice and transferee for valuable consideration? If so its effect? (7) Whether defendant No. 2 has effected any improvement in the land? If so, whether he is entitled to any compensation? If so, to what extent? (8) Relief." Before evidence could be recorded in the case, Muhammad Mussain Shah died and his legal representatives (Mst. Khair‑un- Nisa and six others) were brought on the record. On the evidence adduced by the parties in support of their respective cases, the trial Court finding that the subsequent transferees had not purchased the property in good faith without notice, decreed the suit with costs on payment of the balance amount of Rs. 3,000 after deducting costs of the suit. The defendants appealed and the learned Additional District Judge, while affirming the findings of the trial Court on issues Nos. a, 2 and 4, observed that issue No. 5 was redundant. While considering issue No. 6 as the `Life blood of the case' he has reversed the finding of the trial Court on this point and dismissed the suit against the legal representatives of the subsequent vendee can the ground that "the anus of claiming exemption from enforcement of a previous contract although heavily lying on the subsequent transferee can, however, be satisfactorily discharged by him with a bare denial of notice of the previous contract . . . . It has all along been consistent view of all the High Courts that assertion of want of notice of previous contract can be proved by mere denial on oath by the subsequent vendee. The discussion on this question can be well ended with the remark that onus of a negative issue can be discharged by a denial and negative evidence. Arshad Husain D. W. 8 has said specifically that he never knew of the previous agreement between the vendor and the plaintiff respondents . . . . . The defendant‑appellants have also produced some oral evidence to establish their plea which, however, I need not discuss as in such cases direct evidence is not generally available and we have to rely on circumstances alone . . . . . The plaintiff‑respondents have also produced some witnesses to prove that they had notified the previous agreement in their favour to Muhammad Hussain Shah deceased. This evidence is discarded precisely on the same reasons on which I have not deemed it proper to evalue the similar evidence on behalf of the defendants appellants . . . . . ." The plaintiffs have come up in second appeal to this Court.

2. Learned counsel for the appellants has mainly addressed the Court on the question of onus of the issue of absence of notice in cases falling under section 27(b)of the Specific Relief Act, which provision may be reproduced with advantage :‑ "

27. Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against‑ (a) (b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract. (c) (d) . (e) .. Learned counsel has argued that keeping in view sections 103 and 106 of the Evidence Act, the fact of absence of notice being within the special knowledge of the subsequent vendee it is for him not only to deny the absence of notice in the pleadings but also to prove by affirmative evidence that he had no notice of the previous transaction to claim relief in equity. He maintains that in view of absence of any proof on the re lord that the subsequent vendee had no notice of the previous agreement, the lower Appellate Court has fallen into an error in holding that bare denial in the written statement is sufficient to discharge the onus in support of this contention of his he has relied on Bhup Narain Singh v. Gokul Chand Mahdon and others (A I R1934 PC 68), Shankaalal Varayandas Mandade v. The nvew Mofussil Co. Ltd. and others (A I R 1946 PC 97) and Varden Seth Sam v. Luckpathy Royjee Lallah (9 M I A 307). He has further tried to distinguish Haji Abdullah Khan and others v. Nisar 1guhammad Khan and others (P L D 1959 Pesh. 81) relied on by the trial Court, wherein while discussing the question of onus in a plea of bon fide transferee for value without notice of previous transfer, it has been held : .The onus, therefore, that a person whose title arises subsequent to the contract to sell is a transferee for value who has paid his money in good faith and without notice of the original contract lies very heavily upon him . . . . And, later : " . . . The negative is easier to prove than positive. There is an authority for the view that the subsequent transferees can effectively discharge the onus placed upon them by section 27 of the Specific Relief Act, by just appearing in Court and stating on solemn affirmation that they had no knowledge of the previous contract. The onus would then shift on to the plaintiffs to show that they had such a knowledge . . . . ."

4. To come under the exception to clause (b) of section 27 of the Specific Relief Act, a subsequent vendee has to show that he is a purchaser (1) bona fide, (2) for value and (3) without notice A of the previous agreement. The statement of law with regard to want of notice and burden of proof was enunciated by Lord Kingsdwon in the judgment of the Judicial Committee in Varden Seth Sam v. Luckpathy Royjee Lallah as "Though both the third and the last defendants pleaded, in effect, that they were bona fide purchasers for value, without notice, yet they did not prove that defence, though the plaintiff charged notice and collusion with defendant No. 1." "The question to be considered is, whether defendants 3 and 6 respectively possessed the land free from that lien, whatever its nature. As one who owns property subject to a charge can, in general, convey no title higher or more free than his own, it lies always on a succeeding owner to make out a case to defeat such prior charge. Let it be conceded that a purchaser for value, bona fide, and without notice of this charge, whether legal or equitable, would have had in these Courts an, enquiry superior to that of the plaintiff, still such innocent purchase must be, not merely asserted, but proved in the cause, and this case furnishes no such proof." In Bhup Narain Singh v. Gokul Chand Mahton and others the Subordinate Judge did not accept the evidence of the appellant's two witnesses, who spoke to the knowledge of defendant 4 of the prior contract, and equally clearly he did not accept the latter's denial of such knowledge. Their Lordships of the Judicial Committee held that the onus of proof under section 27 (b) is on the later transferee and while referring to the earlier decision of the Board observed :‑ "In their Lordship's opinion, the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships opinion it is clearly for the transferee to establish the circumstances which will allow him to retain the benefit of transfer which prima facie, he had no right to get. Further the subsequent transferee is the person within whose knowledge the facts as to whether he has paid and whether he In. had notice of the original contact lie, and the provisions of sections 103 and 106, Evidence Act, 1872, have a bearing on the question. The plaintiff does not necessarily have knowledge of either matter." Dealing with a similar question in Shankarlal Narayandas Mundade v. The New Mofussil Co. Ltd. and another, in which case the subsequent vendees had made no attempt at the trial to prove that they had paid the purchase money in good faith and without notice of the original notice, the following observation was made :‑ "Their Lordships have found it unnecessary to examine the evidence which was called on behalf of the plaintiff to show that these defendants in fact had notice of the earlier contract, since a decision of this Board is clear authority for the proposition that the burden of proving good faith and lack of notice lay upon the defendants‑61 I A 115". Bearing these principles in mind, we find that there is nothing on the record excepting the denial in the written statement of Muhammad Hussain Shah to show that he had no knowledge of the previous agreement. This fact is conceded by learned counsel appearing on behalf of the legal representatives of Muhammad Hussain Shah, learned counsel, however, attempted to argue that the written statement of the deceased defendant could be taken as evidence of absence of notice under section 32 of the Evidence Act, but when it was pointed out to him that the provisions of the said section do not cover the case, he did not press the argument further.

5. It was next contended by learned counsel that taking into consideration the circumstances of the case, which he enumerated as under, the initial onus on the subsequent vendee can be safely held to have been discharged :‑ (1) Muhammad Hussain Shah was a tenant of the property in dispute, but he had not been informed of the agreement by the plaintiffs ; (2) the plaintiffs are living in the same locality and knew the intention of the vendor to resile from the agreement and despite that they did not inform the occupant of the land in dispute ; and (3) the denial of Arshad Hussain (D. W. 8) and Alamdar Husain (D. W. 9), the sons of Muhammad Hussain Shah, about any notice of the previous transaction. We have given earnest consideration to this argument but we find that the circumstances recounted by learned counsel in no manner advance the case of the respondents that the subsequent vendee had no notice. The onus probandi of the issue was on the defendants and in the absence of any evidence the issuse remains unproved, with the result that the absence of notice part dis appears from the defence of the subsequent vendee. Once we come to that conclusion, one of the ingredients of claiming relief n equity being absent no exemption can be claimed under section 27(b) by the subsequent vendee.

6. Another objection has been raised by learned counsel for the respondents to the effect that the finding of the lower Appellate Court as to absence of notice being a finding of fact cannot be disturbed in second appeal. He has relied on Durga Chowdlarani v. Jewahir Singh Chaudhari (I L R 18 Cal. 23), Ramji Patel v. Rao Koshore Singh (A I R 1929 P C 190) and Keramat Ali and another v. Muhammad Yunus Haji and others (P L D 1963 S C 191). We are afraid the argument is ill -founded. The finding of the trial Court having been reversed on erroneous reasoning and on an incorrect exposition of law, especially when evidence on the point of either side has not been found by the lower Appellate Court worth considering, the; finding is not sacrosanct in second appeal.

7. The result is that the appeal succeeds and is allowed. 'The judgment and decree of the lower appellate Court is set aside and that of the trial Court restored. As a difficult question .of law was involved in the appeal, we leave the parties to bear their own costs. A. E.JK. B. A. Appeal allowed.