Madras High Court
Suriyanarayanan Potti (Died) vs Nirmala on 7 March, 2013
Author: B.Rajendran
Bench: B.Rajendran
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 07/03/2013 CORAM THE HONOURABLE MR.JUSTICE B.RAJENDRAN S.A.No.1628 of 1998 and C.M.P.No.16428 of 1998 1.Suriyanarayanan Potti (Died) 2.M.Rajammal 3.L.Nagaveni 4.S.Ramachandra Rao 5.Rajeswari Sivaraman 6.Vijayalakshmi Shridhar 7.Lalitha Ravish 8.Jayanthi Jayaraman ... Appellants (Appellants 2 to 8 were brought on record as Legal Representatives of the deceased sole appellant as per order of Court dated 21.06.2007 made in M.P.No.2 of 2007) Versus Nirmala ... Respondent Prayer Second Appeal is filed under Section 100 of the Code of Civil Procedure, 1908, against the judgment and decree dated 31.07.1998 made in A.S.No.83 of 1997 on the file of the Principal District Judge, Kanyakumari at Nagercoil, reversing the judgment and decree dated 31.03.1997 in O.S.No.20 of 1995 on the file of the Principal Subordinate Judge, Nagercoil. !For Appellants ... Mr.S.Subbiah for M/s.J.Anandhavalli ^For Respondent ... Mr.K.Sreekumaran Nair :JUDGMENT
The second appeal has been filed by the defendant against the judgment and decree dated 31.07.1998 made in A.S. No. 83 of 1997 on the file of the Principal District Judge, Kanyakumari at Nagercoil, reversing the judgment and decree dated 31.03.1997 in O.S.No.20 of 1995 on the file of the Principal Subordinate Judge, Nagercoil.
2. The plaintiff/respondent herein filed a suit in O.S.No.20 of 1995 on the file of the learned Principal Subordinate Judge, Nagercoil praying for a declaration and for consequential recovery of possession of the suit property. In the plaint, the description given to the suit property is a land measuring 7 cents with a building thereof. The suit property belonged to one Krishna Iyer who executed a mortgage deed on 28th Thai 1105 in favour of Aathimamunivar Samuthaya Vakai Trust. As per the terms of lease deed, Krishna Iyer was empowered to construct a building thereon and also to plant trees and after the end of the lease period, the Trustees of the Aathimamunivar Samuthaya Vakai Trust are under an obligation to return back the vacant possession of the land to Mr. Krishna Iyer after paying the value of the building and trees to the lessee. On 10.10.1957 the said Krishna Iyer executed a registered transfer deed in favour of Ramachandran Potti conveying the enjoyment right over the plaint schedule property and also the remaining 13 cents of land on the Eastern side of the plaint schedule property. Subsequently, on 31.10.1976, Ramachandran Potti's sons Suriyanarayanan Potti and Subramoniyan Potti and one Rajammal have entered into a registered partition deed partitioning their possessory right over the plaint schedule property and remaining properties. As per the partition deed, Western 10 3/4 cents out of 20 cents was allotted to Suriyanarayanan Potti and Suriyanarayanan Potti enjoyed the property. In the partition deed, 'A' schedule property is consisted of 10 3/4 cents of land which comprises of house in N.M.C. 27/4 (New Number N.M.C. 22/7). Even as per the earlier partition deed, the said Suryanarayanan Potti was not having any saleable or alienable interest. Subsequently, on 23.09.1994, the Trustees of the Aathimamunivar Samuthaya Vakai Trust had executed a registered sale deed conveying the plaint schedule property in favour of the plaintiff for valid sale consideration of Rs.49,000/- and according to the plaintiff, she has been in possession from then onwards in her own right and the sale deed also would bind on the defendant who is the tenant. On 24.09.1994, the defendant Suriyanarayanan Potti had received a sum of Rs.58,000/- from the plaintiff and surrendered possession to the plaintiff and executed a release deed Ex.A3 ratifying the sale in favour of the plaintiff. Therefore, the plaintiff derived title and possession over the plaint schedule property based on the sale deed dated 23.09.1994 and as per the document executed by defendant. After surrendering the above said property, again on 18.01.1995, the defendant had trespassed into the plaint schedule property breaking open the lock of the plaintiff's house and is in illegal possession and enjoyment of the plaint schedule property. At the time of trespass, the plaintiff had kept the house for repairs. Immediately, on 19.01.1995, the plaintiff gave a police complaint in Kottar Police Station and obtained a receipt. Since the matter has not been settled and the complaint was returned as the dispute is civil in nature, she has filed the present suit for declaring the title of the plaintiff over the plaint schedule property and recovery of possession of the same. In fact, the recovery was sought for after the amendment made in the year 1996.
3. In the written statement, the defendant mainly contended that the sale deed claimed is a collusive and fraudulent one which has been registered only at Parassala in Kerala without any jurisdiction as the property is situated in Kanyakumari, Tamil Nadu. The plaintiff has also suppressed the earlier agreement of sale entered into with the defendant on 15.06.1994 under which the plaintiff agreed to purchase the property from the defendant for Rs.7,25,000/- out of which Rs.50,000/- was originally advanced and later paid a sum of Rs.50,000/- to the defendant. Subsequently, at a later point of time, the defendant withdrew from the agreement and returned Rs.95,000/- out of Rs.1,00,000/-. When there is admittedly a dispute between both the plaintiff and the defendant from 1994 onwards, the theory that Ex.A3 was executed by the defendant surrendering possession of the suit property after receipt of Rs.58,000/- is incorrect. The signature of the defendant in Ex.A3 was denied and that he never executed the document. The value of the property as shown in Ex.A2 sale deed is very meager and the sale deed has not been executed in accordance with law. The trustees have no right to sell the property as they have not obtained the permission from the Court before alienating the same. Further, it is contended that only to deprive the claim of the defendant, the very document itself was created as if he has never surrendered possession, hence, the suit itself is not maintainable. The lower Court taking into account the above position, dismissed the suit and as against the dismissal, the plaintiff had preferred an appeal and the appeal was allowed by the Appellate Court. Aggrieved against the same, the defendant has come forward with the present Second Appeal.
4. Before the trial court, on behalf of the plaintiff, one Sukumaran was examined as PW1 and Exs. A1 to A7 have been marked. On behalf of the defendant, the defendant examined himself as DW1 and Exs. B1 to B6 have been marked. The trial court, on appreciation of the oral and documentary evidence dismissed the suit, which was reversed by the first appellate Court, hence, the present second appeal.
5. Heard both parties. At the time of admission, the following questions of law were framed:
(i) Whether the judgment of the lower appellate upholding the validity of Ex.A2 sale deed is sustainable in law having regard to the fact that it amounts to fraud on registration on the facts and in the circumstances under which the sale deed happened to be executed and registered in the Office of the Sub-
Registrar, Parassala in the State of Kerala, while the property conveyed under the document is situate in Kanyakumari District which is in Tamil Nadu?
(ii) Whether the learned District Judge erred in law in holding that the plaintiff has right to terminate the lease and obtain possession of the superstructure put up by the tenant having regard to the fact that such a case is not supported either by pleadings or evidence both oral and documentary on record?
6. Pending second appeal, the sole defendant/appellant died and his legal heirs have been brought on record as appellants 2 to 8.
7. The learned counsel for the appellants would contend that Ex.A2-Sale Deed is not sustainable as it has been registered fraudulently at Parassala in the State of Kerala when the property is situated in Kanyakumari District, Tamil Nadu. The main argument putforth by the counsel for the appellant is that before executing the sale deed Ex.A2 in favour of the plaintiff, the plaintiff herself earlier entered into an agreement of sale with the defendant/appellant herein agreeing to purchase the property at the rate of Rs.7,25,000/- towards which she advanced a sum of Rs.50,000/-, later on paid a further amount of Rs.50,000/- thus totalling a sum of Rs.1,00,000/-. After some time, the defendant has cancelled the sale agreement and returned a sum of Rs.95,000/- in lieu of Rs.1,00,000/-. The plaintiff, having known that the value of the property is at least worth about Rs.7,25,000/-, has now produced a document Ex.A2 sale deed executed by the Trustees in her favour only for Rs.49,000/-. Such sale deed was registered by the plaintiff knowing fully well that the property is worth much more than that and that is why the appellant had specifically pleaded that fraud has been committed by her in collusion with the Trustees of the temple. The plaintiff also knew very well that the defendant/appellant herein was the tenant and in respect of the superstructure, both parties duly accepted that the land only belonged to temple and the superstructure belongs to defendant. If at all the temple agreed to execute the sale deed, it can only be in respect of vacant site and not in respect of superstructure. Even according to the plaintiff, the sale deed Ex.A2 is in respect of entire property inclusive of the superstructure and that is the reason why the plaintiff wantonly chosen to register the document Ex.A2-Sale Deed at Parassala, State of Kerala, behind the back of the defendant when he is the owner of the superstructure. It is not only to cheat the defendant from getting over the agreement of sale but also to evade payment of stamp duty. The sale deed is created to throw the defendant, who is a tenant, out of the suit property, without following the procedure known to law.
8. The learned counsel for the appellant would also argue that one cent of land in Parassala, Kerala was conveyed along with Ex.A2-sale deed in respect of the suit property but that one cent of land itself has been purchased by means of another document, which itself was registered much after the sale deed which is said to have been registered in favour of the plaintiff under Ex.A2. Therefore, at the time when she conveyed the property, she had no title over the one cent of land. No doubt, a distinction was made that there was a property but the title alone was not conveyed. In any view of the matter, the fact remains that the plaintiff who had knowledge of everything inclusive of tenancy right of the defendant over the superstructure and she herself agreed to purchase the land at a huge price, therefore, she cannot now produce Ex.A2 which has no value at all.
9. The next important aspect which has been pointed out by the appellant was the theory put forward by the plaintiff that she has purchased the property under Ex.A2 dated 23.09.1994. The learned counsel for the defendant/ appellant would only contend that the defendant had voluntarily surrendered the possession and executed a document Ex.A3 under which he has received a consideration for surrendering the property and that consideration was Rs.58,000/-. Whereas, originally in the agreement of sale between the parties the defendant was supposed to get Rs.7,25,000/- under Ex.B1. Can any prudent person receive a consideration of Rs.58,000/- and surrender the possession and that too under an unregistered document? The document has been specifically denied by the appellant as none concerned with the document has been examined. The plaintiff has also not chosen to examine the two attesting witnesses under Ex.A3 namely V.Balan of Nagercoil and Nagendran nor any explanation has been offered for non-examinantion of the two persons. Further, there was no independent evidence that there was a surrender alleged to have been made under Ex.A3. It is also not the case of the plaintiff or the temple that the temple at any point of time terminated the tenancy in the manner known to law. Therefore, on the date when the plaintiff alleges that she has surrendered possession, the tenancy right was still in favour of the defendant. Therefore, nobody can accept the alleged surrender of tenancy right of the defendant/ appellant, that too when the subsequent purchaser, who had earlier held the agreement in his favour nor it is denied by the plaintiff that the defendant is not the tenant in respect of the land. Therefore, factually when the surrender or the subsequent occupation of the land has not been proved at all by the plaintiff, the plaintiff's case cannot be believed at all.
10. With this factual background, it is necessary for this Court to analyse the question of law involved in this case.
11. Learned Counsel for the appellant mainly relied upon the fact that the document Ex.A2 sale deed itself is invalid in law as it has not been registered in accordance with Section 28 of the Registration Act. As it has been registered in Parassala, it has no legal sanctity and it is executed by fraud, misrepresentation and with a view to cheat the authorities also. In this connection, he would rely upon the decision, which was also cited by the learned counsel for the respondent, reported in 2011-1-L.W. 806 (Gopi vs. H.David and another) wherein the learned Single Judge of this Court has held that merely because a document has been registered in Parassala before the cut off date is not invalid. But in the above said ruling itself this Court has stated as to when a document can be construed to have become invalid. This Court has categorically held that unless there is collusion or fraud practised by both parties to the documents for the purpose of getting a document registered in another place, the document cannot be declared as invalid document or void document, Even if one party alone has committed fraud or when there is no collusion between the parties to the document, it cannot be stated that the document is a void or invalid document. It was further held that a party to a fraud cannot take advantage of his wrong and claim that the property was not conveyed under the fraudulent transaction and he is entitled to claim right over the same. In that case, the property was registered in Parassala, and the seller comes up with the theory that the sale is invalid when he himself is a party to the document. But in the present case, the facts are totally different. Here both the Trustees as well as the purchaser/the plaintiff knew very well about two things viz., the respondent herein is the tenant in respect of the suit property and he is in possession as a tenant in respect of the suit property. The superstructure has been built up by the tenant is also admitted by both parties. The plaintiff's predecessor has already entered into an agreement of sale with the tenant/defendant for purchase of entire property including superstructure, which was later cancelled. Thereafter the defendant directly entered into a sale deed in favour of the landlord temple alone. Therefore, there is a clear collusion between the parties viz., the temple and the buyer especially when the temple does not even say at any point of time that they have terminated the tenancy before the sale or they have handed over the property inclusive of the right of the tenant. Similarly, the purchaser knowing fully about the right and having entered into the agreement has colluded with the temple to bye-pass the respondent/defendant and get over the property. She also wanted to register the sale in a place beyond the jurisdiction for registration and to evade stamp duty. Even as per the admission of the plaintiff, the property is worth about Rs.7,25,000/- but she has registered the sale deed only for Rs.49,000/-. Whereas, her further case is under Ex.A3 the document for alleged surrender, she has paid Rs.58,000/-. Therefore, definitely she has got intention to cheat, defraud not only the authorities but also the defendant. Further, even as per Ex.A2, the property registered in Parassala is shown to be a security property of one cent land which is shown as security worth only Rs.500/-. Even as per the document, whether a property which is worth only Rs.500/- could be stated to be a security for the property which even according to them valid at Rs.49,000/-. Therefore, it is a clear case of collusion and fraud between the parties. Therefore, as rightly pointed out by the learned Single Judge of this Court that when there is a fraud or collusion between the parties, then definitely the document can be set aside. In this case, Ex.A2 comes under that category. Therefore, even as per the ruling cited by the learned Counsel for the respondent the point of law is when there is a collusion or fraud in registering a document and if it is proved, definitely such document can be set aside.
12. The learned Counsel for the appellant relied upon a judgment of the Honourable Supreme Court reported in AIR 2012 SC 2858 (Badami (Deceased) by her L.R. v. Bhali) to drive home the point that it is settled proposition of law that a judgment or decree obtained by playing fraud on the Court is a nullity and non est in the eyes of law. Such a judgment/decree by the first Court or by the highest Court has to be treated as a nullity by every Court, whether superior or inferior. It can be challenged in any Court even in collateral proceedings. Further, it is held by the Honourable Supreme Court that fraud and collusion vitiate even the most solemn proceedings in any civilised system of jurisprudence. It has been defined as an act of trickery or deceit. In that judgment, the Honourable Supreme Court followed the earlier judgment reported in AIR 2006 SC 3028 (Hamza Haji v. State of Kerala and another) and in that case it has been held that no court will allow itself to be used as an instrument of fraud and no court, by way of rule of evidence and procedure, can allow its eyes to be closed to the fact it is being used as an instrument of fraud. The basic principle is that a party who secures the judgment by taking recourse to fraud should not be permitted to enjoy the fruits thereof. In this case, when the basis on which Ex.A2 came into existence, by resorting to fraud to cheat the defendant, Ex.A2 cannot have the force of law.
13. Learned Counsel for the appellants relied upon a Division Bench judgment of this Court reported in 1988 (1) MLJ 447 (M.Mohamed Kassim and others v. C.Rajaram and others) which arose in respect of a document which was registered at Parassala. The facts involved in that decision is squarely applies to the facts of the present case because in this case also, the sale under Ex.A2 was effected in the year 1994 at Parasalla. In the above judgment it has been held as follows:
"28. Point No.4:- One other important objection raised by the learned counsel for the first respondent/plaintiff is that the impugned sale deeds having not been registered before the Registrar having jurisdiction and on the other hand having been registered in Kerala including a fictitious property are void. It is the admitted case that a property to which the vendors are not entitled has been included in the sale deeds just for the purpose of registering it in Kerala. The reason given by them is that the registration fees in Kerala are cheaper and, therefore, they have chosen to register the case there. It is also in evidence that the vendors under these sale deeds had no semblance of title to the said property in Kerala and there is also no evidence to show that such properties exist in Kerala. It is a case where the parties had deliberately chosen to register the sale deeds in Kerala, with a view to defeat the provisions of law of this State. There is no difficulty if actually the vendors had any property in Kerala and it is included in the sale deeds, since in such a case the sale deeds can be registered in Kerala and they will be perfectly valid. In this connection, we have to note the relevant provisions in the Registration Act. The sale deeds are compulsorily registrable under Section 17 of the Indian Registration Act of 1877. Section 28 of the Act requires that every registrable document shall be presented for registration in the office of a Sub Registrar within whose sub-district the whole or some portion of the property to which such document relates is situate. Section 49 enacts that no registrable instrument shall affect any immovable property comprised therein unless it has been registered in accordance with the provisions of the Act. Section 65 provides for the transmission of copies to the office of other districts in which any of the property is situate. Therefore, the registration law is positive that a document should be registered only before the Sub Registrar within whose jurisdiction the property is situate with certain exception. It is also seen from the above provisions that a document not registered in accordance with the said provisions of Act has no effect on immovable property comprised therein. In order to show that the sale deeds have been validly registered, there must be evidence to show that the properties of Kerala included in the sale deeds really exist and that the vendors had any semblance of title or right over the same. It is the case of the plaintiff that the inclusion of a fictitious property in Kerala in the sale deeds just for the purpose of getting the documents registered in Kerala, is a fraudulent act, therefore, the documents should be held to be void.
29. .... Again, reliance was placed on the decision of this Court in A.S. No. 212 of 1979 Mytheen Beevi and Ors v. Podi Pillai and Anr. Judgment dated 18.6.1986 wherein a Bench of this Court had considered the question in a different context. In that case, the Bench found that the property shown in the document really existed in Kerala and, therefore, they held that it is not a case of a non-existing property having been shown to exist with a view to persuade the registering authorities to effect the registration of a document presented for registration. They further held that it was not a bogus property and that the vendor has got title to the same. They also held that both the parties intended that a security should be created over such a property in order to validate the document. The Bench also found that there was no collusion between the parties to the document. It was in those circumstances the Bench held that the impugned document in that case is valid. As a matter of fact, the said decision supports the case of the first respondent and not that of the appellants. Considering all these facts and the legal principles noticed above, we have no hesitation in holding that the impugned sale deeds are void and no title can pass under the documents. This point is answered accordingly."
14. In this case this Court has distinguished the earlier decision of the Division Bench of this Court whereby, the Division Bench upheld the execution of the sale deed in question inasmuch as there is a property available in Kerala. In that decision, the Division Bench categorically held that if the collusion or fraud between the parties to the document is proved, then such document will have no force of law. In this case, the evidence made available would clinchingly prove that the parties to Ex.A2 have resorted to fraud and collusion in executing the sale deed under Ex.A2. Therefore, following the decision of the Division Bench of this Court, I hold that Ex.A2 is unsustainable in law and it is invalid. In this connection, it is also proved that at the time of execution of sale deed Ex.A2 the plaintiff's title in respect of the property situate at Kerala measuring one cent was not even registered, and that she did not have title to the property of one cent. Therefore, when the vendor has no title, then the sale deed can also be set aside.
15. Learned Counsel for the appellants relied upon the judgment of this Court reported in 2003 (1) CTC 539 (M.Manoharadhas v. C.Arumughaperumal Pillai and another) wherein a similar question arose when the vendor did not possess or own strip of land situate in Kerala State as per the sale deed then the sale deed is invalid as it constitute fraud under the statute. The relevant portion of the judgment is as under:
"8. The suit property is situate in Kanyakumari District and in the jurisdiction Sub-Registrar of Nagercoil. However, the first defendant had executed the sale deed Ex.B-1 dated 26.6.1985 at Parasalai of Kerala State. To enable such a sale, the property at S. No. 80/1, Parasalai Village in Neyyartin Karai Taluk, is shown as a security. The first respondent/plaintiff has produced Ex.A.6 Certificate from the Tahsildar stating that Sri Rajavel (D1) has no possession or ownership of the property in S. No. 80/1, which was shown as security for the Ex.B-1 sale. If there is no such property in existence, it follows that Ex.B-1 sale deed cannot be a valid sale.
9. In Venkatarama Rao v. Appa Rao , A.I.R. 1936 PC 91, where a case dealing with a property sought to be transferred by a deed is situated in one district but a small strip of land situated in another district is included in the deed, without any intention on the part of the parties that it should pass under the deed but solely with a view to obtain registration in the latter district, it was held that it amounts to fraud on the law of registration.
10. In Mohd. Kassim v. Rajaram , 1988 (I) M.L.J. 447, a Division Bench of this court has held that when a sale deed having not been registered before the Registrar having jurisdiction and on the other hand having been registered in Kerala including a fictitious property is void.
11. In P.C. Purushothama v. S. Perumal , AIR 1972 SC 608, it was held that an entry in any public record stating a fact in issue or relevant fact and made by a public servant in the discharge of his official duty is relevant evidence and that report made by public servant in discharge of his official duty is a relevant fact.
12. Ex. A-6 Certificate issued by the Tahsildar holding that the first defendant has no possession or ownership of the land in S. No. 80/1, is, therefore, rightly accepted by the Courts below and consequently, it follows that the registration of the sale is illegal and void."
16. Contra, the learned Counsel for the respondent relied upon a judgment of this Court reported in 2011-1-L.W. 806 (Gopi v. H.David and another) for the purpose of holding Ex.A2 as a valid document. It is stated that it must be proved that fraud was committed with the knowledge of the parties to the document in respect of prior transaction. The learned counsel for the respondent also relied upon the judgment reported in 60 MLJ 302 (Ramanathan Chetti and others v. Delhi Batcha Tevar alias Udayana Tevar and others) only for the proposition that when the property is included in a mortgage for which he has no title and the mortgagee was not aware of the want of title the registration of the said document in respect of other property cannot be set aside. The learned counsel for the respondent also relied on the judgment of this Court in 1989 TNLJ 242 (S.Joseph Nadar and another v. T.Dasammal Nadathi and two others) for the proposition that in a gift deed when one property has been included which is situate within the Sub Registrar of Kerala and when there is no collusion between the parties, it can be accepted inasmuch as they only wanted to reduce the stamp duty.
17. The facts in the above decisions will not be applicable to the facts in the present case. In this case, it is clearly proved that Ex.A2 came into existence by resorting to fraud, misrepresentation and to cheat others. There is a clear collusion between the parties to the document, Ex.A2. The facts in this case are totally different from the facts of the decisions mentioned supra. Therefore, from the analysis of the entire judgment, pleadings and evidences it is clearly proved beyond any reasonable doubt that Ex.A2 sale deed itself was created by the Trustees and the plaintiff to defraud the claim of the defendant. Further, it is unusual that a person who has entered into an agreement of sale and who created a dispute over the same could come to surrender the property on his own under Ex.A3 for a meager sum of Rs.58,000/-. Therefore, the Appellate Court's finding that the document Ex.A2 will only denote the vacant site and it will not be in respect of superstructure cannot be accepted. At the same time, the further finding that the plaintiff will be entitled to recover possession after payment of Rs.2,000/- as per the original lease deed cannot also be accepted. Hence, the document Ex.A2 as such goes because it is a fraudulent and collusive one. Therefore, the first question of law is answered holding that the sale under Ex.A2 is sustainable in law and this question of law is answered in favour of the appellant.
18. The second question of law is whether the plaintiff has right to terminate the lease and obtain possession of the superstructure put up by the defendant in the absence of any pleadings or evidence. It is an admitted fact that the trust never took any steps to evict defendant from the property in the manner known to law in respect of superstructure of which alone the appellant is owner. The finding of the lower Court that the plaintiff under Ex.A2 can take possession and terminate the tenancy by payment of Rs.2,000/- cannot be accepted. Hence, this question also answered in favour of the appellant.
19. While answering both the questions of law in favour of the appellant, it is necessary to mention that even if Ex.A2 sale deed is set aside, the fact remains that the appellant/defendant can at best claim ownership only in respect of the superstructure and his right of tenancy in respect of the land extinguishes as it is categorically admitted that the land belongs to the temple.
20. In the result, the appeal is allowed setting aside the judgment and decree dated 31.07.1998 made in A.S.No.83 of 1997 passed by the learned Principal District Judge, Kanyakumari and the judgment and decree dated 31.03.1997 made in O.S.No.20 of 1995 by the Principal Sub Judge, Nagercoil is confirmed. Consequently, connected miscellaneous petition is closed. No costs.
srm/rsh To
1. The Principal District Judge, Kanyakumari .
2. The Principal Sub Judge, Nagercoil .