Parties Must File Encumbrance Certificate Along With Plaint To Avoid Multiplicity Of Proceedings: Andhra Pradesh HC In Property Dispute
The Andhra Pradesh High Court emphasised that the parties in a property dispute must file encumbrance certificate along with the Plaint to avoid multiplicity of the proceedings.
The Court emphasised thus in a Civil Revision Petition preferred against the Order of the Family Court relating to a suit seeking specific performance of agreement of sale.
A Single Bench of Justice Subba Reddy Satti observed, “The decided cases show that in a suit for partition even at the stage of the final decree, innocent purchasers, after coming to know about the preliminary decree, are filing petitions seeking impleadment. The same is the situation even in suits for declaration and perpetual injunctions. To avoid the multiplicity of the proceedings, the parties should file the encumbrance certificate along with the plaint, which will ease future litigation. Even the Courts at the numbering stage, in a given case, direct the parties to file encumbrance certificates, of course, it is always in the interest of parties as discussed supra.”
The Bench remarked that the litigants and Advocates should not forget that in the administration of justice, Judges and lawyers play equal roles and like Judges, lawyers also must ensure that truth triumphs in the administration of justice.
Advocate Aravala Ramarao appeared on behalf of the Petitioner while none appeared on behalf of the Respondents.
In this case, an agreement of sale was entered into between the Plaintiff and Defendant for a sale consideration of Rs. 19,30,000/-. At the time of the agreement of sale, the Plaintiff paid an amount of Rs. 2,00,000/- as advance and the balance sale consideration was to be paid on or before December 2015. The Defendant approached the Plaintiff and requested to arrange some sale consideration amount and the Plaintiff paid Rs. 2,50,000/- through her husband and the Defendant passed on a receipt, which was scribed by her husband.
Thereafter, the Defendant received an amount of Rs. 1,50,000/- from the Plaintiff’s husband and passed a receipt in the presence of witnesses. The said receipt was scribed by the Defendant’s husband and thus, the Defendant received a total amount of Rs. 6,00,000/-. She failed to perform her part of the contract and hence, the Plaintiff issued a legal notice. Accordingly, the Suit was filed. As the Application was dismissed, the Revision was filed before the High Court.
The High Court after hearing both the sides, noted, “Normally in a suit for the specific performance of a contract, the contracting parties alone are proper and necessary. The Court will not adjudicate third-party rights. However, in cases of the one on hand, even the purchaser of the property from the same vendor is a necessary party. By arranging the purchaser, after the agreement of sale, valuable judicial time can be saved. In fact, such a step is not difficult if one verifies the encumbrance certificate, which will reflect all the registered transactions. The importance of arranging the subsequent purchaser as a party defendant is discussed infra.”
The Court added that, if proper parties are shown, the time spent in interlocutory applications can be avoided be it pending the suit or after the decree and this procedure may also inspire confidence in the general public.
“Let the litigant not miss faith in the system”, it further remarked.
“In P. Ramasubbamma Vs. V. Vijayalakshmi, the Hon’ble Apex Court held that in a suit for specific performance, the agreement holder doesn't need to seek cancellation of the sale deed executed in favour of a subsequent purchaser. It is sufficient to implead subsequent purchaser in the suit and seek relief of specific performance against the original owner and also a direction to the subsequent purchaser to join in the execution of the sale deed to completely convey title to the agreement holder”, it also noted.
The Court said that the subsequent purchasers of the suit schedule property, before filing the Suit are also necessary parties for proper adjudication of the Suit and since the Plaintiff procrastinated filing of application, it is appropriate to impose costs in the interests of justice and equity.
“The trial Court failed to exercise the jurisdiction vested with it and hence the order under revision is liable to be set aside. … Given the above discussion, this Civil Revision Petition is allowed on payment of costs Rs.25,000/- (Rupees twenty five thousand only), payable by the plaintiff to the District Legal Services Authority, Srikakulam, within three weeks from the date of receipt of a copy of this order. If the plaintiff fails to pay the amount within the stipulated time, the order passed by this Court stands rescinded without reference to any further order”, it ordered.
Accordingly, the High Court allowed the Civil Revision Petition and set aside the impugned Order.
Cause Title- Golivi Ramanamma v. Challa Lakshmi & Ors.
