A.A.DAVE - (1.) [ His Lordship after discussing facts of the case held that: If pursuant to the order passed by the competent court the receiver negotiated with the tenants including the present plaintiffs and entered into an agreement of sale no subsequent order by the same court can be passed which may prejudicially affect the rights of the tenants who under the bona fide belief had entered into the contract. ] ... .. .. .. . ... .. ... His Lordship further observed:
(2.) 18 Lastly it was contended on behalf of respondent No. 3 in all the appeals who were original defendants No. 3 in the suits that they being the bona fide purchasers for value without notice the sales .executed in their favour by the receivers cannot be affected even if it was held that the receivers had committed a breach of the contract. Reliance was placed on sec. 28(b) of the Specific Relief Act 1877 wherein it is stated that Except as otherwise provided by this chapter specific performance of a contract may be enforced against (a) either party thereto; (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; It was urged on behalf of respondents No. 3 that they being the transferees for value who had paid money in good faith and without notice of the original contract their rights cannot be affected. On behalf of the appellants Mr. V. J. Desai urged that in order to seek protection under clause (b) of sec. 27 of the Specific Relief Act subsequent transferees have to prove that they had purchased the same bona fide and without notice of the previous contract. He submitted that the burden of proof lay on the subsequent transferees and this burden is not discharged by a bare statement that they were bona fide purchasers for value without notice. He urged that in the instant case the present plaintiffs were in actual possession of the rooms as tenants and if the subsequent purchasers had inquired from the plaintiffs regarding the nature of their possession they could have come to know about the existence of the agreement of sale which the receivers had entered with them. He urged that the very fact that the vendor viz. the owner of the property was not in possession and some other persons were in possession of the rooms should have put subsequent purchasers on their alert and before entering into any contract they should have made proper inquiry regarding the nature of possession of the tenants. If they had done so they could have found the existence of the contract. If they failed to make any inquiry they have to thank themselves and they will be imputed with a notice. In sec. 3 of the Transfer of Property Act it is stated A person is said to have notice of a fact when he actually knows that fact or when but for willful abstention from an inquiry or search which he ought to have made or gross negligence he would have known it. Thus in the instant case if the subsequent purchasers had not willfully abstained from making inquiry regarding the nature of possession of the present plaintiffs they could have come to know about the existence of the previous contract. Thus they could he imputed with notice of the fact of the previous contract. Explanation 2 says Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title if any of any person who is for the time being in actual possession thereof. Relying on this explanation the learned advocate for the respondents urged that at the most the present respondents if they had made any inquiry they would have come to know that the plaintiffs were in possession of the property as tenants but from such inquiry they would not necessarily come to know about the existence of the previous contract. In my opinion the explanation (II) appended to this section must be read with the first part of the definition as to when a person is said to have a notice of a fact. It is an admitted fact that the original owner was not in possession of the rooms. The present plaintiffs were in possession thereof as tenants. If the respondents had approached the tenants and made inquiries regarding the nature of their possession and if they had informed them of their intention to purchase the said rooms they would have immediately learnt from the tenants that a previous contract had already been made between them and the receivers about the sale of those rooms. Thus if they had made such an inquiry they could have known about the existence of the previous contract. If they failed to make any inquiry or willfully abstained from making such an inquiry they are deemed to have a notice of the fact of the previous contract and they cannot escape their liability by a bare statement that they were bona fide purchasers for value without notice. In this connection Mr. Desai has referred to several authorities to which I will presently refer. In the case of Bhup Narain Singh v. Gokul Chanda Mahton 36 B. L. R. 421 the Privy Council had made the following observations : That although under sec. 54 of the Transfer of Property Act 1882 the plaintiffs agreement for sale did not of itself create any interest in or charge on the property he was entitled under sec. 27(b) of the Specific Relief Act 1877 to enforce the agreement against defendant No. 4 the subsequent transferee of the property; (2) that under sec. 27(b) of the Specific Relief Act (read with secs. 103 and 106 of the Indian Evidence Act) the burden of proof primarily lay on defendant No. 4 later transferee to bring himself within the exception in sec. 27(b) and to establish (a) payment of his money (b) his good faith and (c) absence of notice to him of the original contract; (3) that there being no sufficient evidence either on the question of payment or on the question of notice the onus had not been discharged by defendant No. 4; (4) that consequently the plaintiff was entitled to enforce specific performance of his agreement against defendant No. 4 the subsequent transferee.
(3.) In the case of Faki Ibrahim v. Faki Gulam Mohidin A.I.R. 1921 Bombay 459 the Bombay High Court held that A having knowledge of Ps being in possession and having made no inquiry why he was in possession must be taken to have constructive notice of all the equities in favour of P. In that case the facts were as under: D mortgaged his property with possession to P and agreed to sell the property to him. Subsequently D executed a registered sale deed of the property to A who though he knew that P was in possession made no inquiry as to the circumstances under which P was in possession. Under the circumstances the Bombay High Court held that even though the subsequent purchaser knew about the possession of a party other then the vendor if he failed to make any inquiry regarding the nature of his possession he must be deemed to have constructive notice of all the equities in favour of P. In this case P was in possession as a mortgagee and therefore if the arguments of the learned advocate for the respondents No. 3 were accepted subsequent purchaser could only be imputed with the notice that he was a mortgagee and therefore there will be no constructive notice on the part of the subsequent purchaser that there was a previous agreement between the owner and the mortgagee regarding purchase of the property. On the contrary the case lays down that if a person other than the vendor is in possession this fact would put the subsequent buyer on his guard and if he failed to make inquiry he would be imputed with a constructive notice of the previous agreement. As a prudent man he is supposed to make inquiry from the person in possession regarding the nature of his possession. If he makes such an inquiry naturally he would come to know about the existence of the previous contract between him and the vendor. Thus I do not agree with the learned advocate for the respondent No. 3 that at the most the subsequent purchaser could be imputed with a constructive notice that the person in possession was a mortgagee or a tenant and that he could not be imputed with a constructive notice about the existence of the previous agreement. ;