Andhra HC (Pre-Telangana)
Sonthi Babu Rao And Others vs S. Sivananda Rao And Another on 9 September, 1999
Equivalent citations: 2000(1)ALD152, 2000(1)ALT660
Author: B.S. Raikote
Bench: B.S. Raikote
ORDER
1. This appeal is preferred by the defendants being aggrieved by the judgment and decree dated 6-7-1988 passed in AS No.141 of 1982 on the file of the Subordinate Judge, Kakinada. By the impugned judgment and decree the appellate Court has reversed the judgment and decree of the 1st Addl. Munsif, Kakinada dated 16-8-1982 passed on his filed OS No.673 of 1978. In other words, the trial Court has dismissed the plaintiffs suit and the appellate Court has decreed it. Therefore, the defendant has come up to this Court by way of this second appeal.
2. The learned Counsel appearing for the appellants-defendants strenuously contended that the judgment and decree of the appellate Court is wholly illegal and contrary to the pleadings and evidence on record. He further submitted that under Sections 54 and 55 of the Transfer of Property Act once the properties purchased in the name of the appellant/plaintiff to the extent of half share each, the title of the defendant cannot be divested and at the most the plaintiff may claim for the contribution of the sale consideration with interest, but the plaintiff cannot be declared as the owner of the property purchased by the defendant. He relied upon the judgment of the Supreme Court rendered in Vidyadhar v. Mankikrao, . On the other hand, the learned Counsel appearing for the respondent-plaintiff strenuously supported the impugned judgment and decree.
3. In order to appreciate the rival contentions, I think it appropriate to note few facts of this case. The plaintiff filed a suit for declaration that he may be declared as the owner and for a consequential injunction restraining the defendants from claiming any right in the suit schedule property. It is the case of the plaintiff that the first defendant is his own brother and second defendant is the son of the first defendant. The plaintiff purchased 0.20 cents of vacant site on the basis of registered sale deed dated 13-6-1964 and subsequently constructed Manglore tiled house after obtaining the loan of Rs.7,000-from the bank. He further submitted that at the time of purchase of the site the sale deed was taken in the joint name of himself and the first defendant and accordingly even in the municipal records the name of the plaintiff and the first defendant are entered as the owners of the entire property. He further alleged that the first defendant promised to contribute half of the cost of the site and half of the cost of the construction, but he has failed to do so, and the defendants are residing in a portion of the house as tenants with the plaintiff on a monthly rent of Rs.10/-. He further averred that defendant executed an agreement on 25-4-1975 vide Ex.A1 in favour of the plaintiff admitting the exclusive title and possession of the plaintiff and by the same document the defendant also had agreed to execute a relinquishment deed in favour of the plaintiff giving-up their half share in the property. The plaintiff demanded specific performance of the agreement from the defendants, but the defendants are evading it. In those circumstances, lie issued a notice to the defendants vide ExA2 dated 24-4-1978, but the defendant did not reply. Hence, he filed the present suit. The first defendant filed a written statement denying the case of the plaintiff and the same was adopted by the second defendant by filing the separate memo. It is the case of the defendants that the house site was purchased by the plaintiff and defendant jointly vide registered sale deed dated 13-6-1994. Plaintiff and defendant No.1 both passed the consideration and both of them constructed the house sharing the expenses. He further stated that the defendant No.1 never promised to contribute Rs.1,800/- and Rs.2,500/- towards his share in cost of the site and cost of construction respectively and the taxes of the house are being paid jointly. They denied the case of the plaintiff that the defendants are residing in a part of the suit premises as tenants on a monthly rent of Rs.10/-. The defendants vehemently denied the alleged agreement dated 25-4-1975 vide Ex.A1, First defendant further contended that he was under suspension and as such he was mentally depressed therefore he could not issue any reply to the notice issued by the plaintiff. He consequently prayed for the dismissal of the suit.
4. On behalf of the plaintiff, plaintiff himself examined as PW1 and other witnesses as PWs.2 to 6. He also got marked certain documents vide Exs.A1 to A10. On the side of the defendants, defendant No.1 was examined as DW1 and they also examined another witness DW2. No documents were marked on the side of the defendants.
5. The trial Court by holding that at the most the plaintiff may sue for specific performance of the contract vide Ex.A1 or he may seek contribution from the defendants, but his suit cannot be decreed for declaration of title to the property in possession of the defendants, consequently dismissed the suit. But the appellate Court on reappreciation of the evidence decreed the suit of the plaintiff by holding that on the basis of Ex.A1 agreement the title of the plaintiff is proved therefore he was entitled to decree for declaration and injunction regarding the portion of the house in the occupation of the defendants. Therefore, the defendants have preferred this appeal.
6. From the pleadings and evidence on record and also from the arguments on both sides, I find that few facts are clearly admitted in this case. It is admitted that the site in question was purchased in the name of the plaintiff and defendant No.1 and accordingly house was also constructed on the said site. In the municipal records the entire house is shown under the ownership of both the plaintiff and defendant No.1. But, it is the case of the plaintiff that no doubt the site was purchased and the house was constructed in the name of the plaintiff and defendant No.1, but the defendant No.1 did not contribute his share not only for the purchase of the site but even for the construction of the house on that site also. It is further case that the defendant No.1 executed an agreement Ex.A1 dated 25-4-1975 by giving up his share in the suit schedule property and lie would continue in the suit schedule property as a tenant on a monthly rent of Rs.10/- until a relinquishment deed is executed. Both the Courts below, on appreciation of the entire evidence, particularly the evidence of PWs.3 to 5 and also experts opinion have held that Ex.A1 has been proved. Having regard to these circumstances, I have to consider the effect of Ex.A1 on the title of the defendant No.1. As I have already stated above, admittedly the house was purchased in the name of plaintiff and defendant No.1 and it was also constructed in the name of the plaintiff and defendant No.1 and in the municipal records the names of both the plaintiff and defendant No.1 are entered as owners and possessors of the property. If that is so, can it be said that Ex.A1 has the effect of destroying the title of defendant No.1 enabling the plaintiff for a declaration that he is the owner of the other portion purchased in the name of defendant No.1 also. It is not in dispute that the plaintiff is the owner regarding half of the property. The dispute is only regarding other half of the property in the possession of the defendants only. As I have stated, it is the case of the defendants that they are in possession of the respective share as owners, but not as tenants. In these circumstances, in order to understand the effect of Ex.A1 I have to extract relevant portion of English translation of Ex.A1 (original is in Telugu) which is as under:
"You are brother of 1st of us and uncle to 2nd of us. On 30th June, 1964, you purchased site belonging to M. Laxminarayana, S/o M. Papayya Sastrulu, resident of Gandhinagar, Kakinada, for Rs.3,600/-. While taking sale deed for the site, your name and name of 1st of us also included. The sale consideration was not paid to the said person. You also borrowed Rs.7,000/-from third parties and constructed a tiled house in the said site. At the same time of execution of sale deed and also construction of house, the 1st of us agreed to contribute half of the sale consideration for the site and half of Rs.7,000/- incurred for construction of house to you. The 1st of us agreed to pay Rs. 1,400/- after taking from mother-in-law and pay the same to you. But however, we have not paid to you. Thus we have not paid to you either toward sale consideration for site or towards construction of house. We do not have any right in respect of the below mentioned schedule house. We are staying on rent at the rate of Rs.10/- per month in one portion. You alone are paying the taxes due to the Kakinada Municipality. As the Schedule Property stands in the name of 1st of us also in the sale deed as well as in Municipal records, the 1st of us while relinquishing his right in the property and we hereby agree to execute a document on a proper stamp paper in accordance with the draft given by you and register the same. Till then we will pay rent to you for the portion we are in occupation. In the meantime if necessity arises if you sell the house to anybody, we shall vacate the portion now under our occupation within three months of the notice given by you and handover the same to you."
7. From the reading of Ex.A1 as extracted above, it is clear that the defendant admitted that he did not pay his share of the contribution towards the purchase of the site as well as for the construction of the house on it. Consequently defendants agreed that they do not have any rights over the property and as such they would execute a relinquishment deed and register the same in the name of the plaintiff.
8. The fact also remains that on the basis of Ex.A1 no relinquishment deed is executed by the defendants in favour of the plaintiff. In these circumstances, I have to see whether Ex.A1 as the effect of destroying the title of the defendant No. 1 regarding other half of the property purchased and constructed in the name of the defendant No.1
9. The learned Counsel for the appellant brought to my notice Sections 54 and 55 of the Transfer of Property Act. Under Section 54 of the Transfer of Property Act the sate is defined as a transfer of ownership in exchange of a price paid or promised or part paid or promised. Section 55(4)(a) and (b) reads as under:
(4) The seller is entitled-
(a) to the rents and profits of the property till the ownership thereof passes to the buyer;
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the nonpayment for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part from the date on which possession has been delivered."
10, From the reading of Section 54 with Section 55(4)(a) and (b) of the Transfer of Property Act, it is clear that the seller would be entitled to the rents and profits of the property till the ownership thereof passes to the buyer and if the ownership of property has already passed to the buyer before payment of the whole of the purchase money the seller would be entitled to charge upon the property in the hands of transferee, regarding the non-payment of the consideration amount along with interest thereon. The legal consequence would be that even if a sale is made by a seller in favour of the buyer without receiving the full consideration, the title passes but such seller would be entitled to the return of the purchase money along with interest, The further legal consequence would be that for non-payment of the consideration amount, or the balance of the consideration amount promised the title of the transferee would not be divested. In other words, the transferee continues to be the owner, notwithstanding non-payment of consideration promised, but the seller would be entitled to such consideration along with interest thereon. To the same effect also is the law declared by the Hon'ble Supreme Court in the recent decision reported in Vidhyadhar v. Mankikrao, (supra). By interpreting Section 54 of Transfer of Property Act, the Hon'ble Supreme Court observed as under:
"35. The definition indicates that in order to constitute a sale, there must be a transfer of ownership from one person to another, i.e., transfer of all rights and interests in the properties which are possessed by that person are transferred by him to another person. The transferor cannot retain any part of his interest or right in that property or else it would not be a sale. The definition further says that the transfer of ownership has to be for a 'price paid or promised or part-paid and part-promised'. Price thus constitutes an essential ingredient of the transaction of sale. The words 'price paid or promised or part-paid and part-promised' indicate that actual payment of whole of the price at the time of the execution of sale deed is not a sine qua non to the completion of the sale. Even if the whole of the price is not paid but the document is executed and thereafter registered, if the property is of the value of more than Rs.100/-, the sale would be complete."
From the above judgment it is clear that title passes even if the consideration was only promised, but not paid, provided there is an intention to transfer the title in favour of the transferee.
11. In the instant case, it is not in dispute that both the plaintiff and defendant No. 1 purchased the property from the original owner on the basis of a registered sale deed dated 13-6-1964 to the extent of half share each. The transferor has already transferred the title in favour of the plaintiff and defendant No.1. But on the basis of Ex.A1, which is held as proved by both the Courts below, it can be inferred that it is the plaintiff who alone paid the consideration for the entire property, including the property that was purchased in the name of defendant No.1 from Ex.A1 it can be held that plaintiff has advanced certain amounts to the defendant No.1, both for purchasing the site as well as for the construction of house. And if that is so, the plaintiff would be entitled to recover the same from the defendant No.1, as held by the trial Court. Taking Ex.A1 as an agreement, it was open to the plaintiff to sue the defendant No. 1 for specific performance of the contract or for recovery of money. That he has not done. Only because defendant No.1 has defaulted in paying the amount as promised, it cannot be said that defendant No.1 is divested of his title to the extent of half of the suit schedule property, in which he is in possession. The fact also remains on record that as per Ex.A1, the defendant No.1 was required to execute a relinquishment deed and such deed is not executed by defendant No.1 in favour of the plaintiff. Ex.A1 at the most can be taken as an agreement to execute the relinquishment deed. In the absence of relinquishment deed by defendant No.1 in favour of the plaintiff, the title of the defendant No.1 would not be effected. Therefore, the appellate Court is in error in not appreciating this legal aspect of the case, notwithstanding the fact that Ex.A1 is held as proved. Taking Ex.A1 as proved, the only consequence would be that the plaintiff could sue the defendant No.1 for specific performance of the contract or for payment of the contribution of the defendant No.1's share, and nothing more. Therefore, the appellate Court has erred in decreeing the plaintiffs suit for title by reversing the judgment and decree of the trial Court and accordingly, the same is liable to be set aside.
12. Before parting with the case, I feel that instead of driving the plaintiff for recovery of the amount from the defendant No.1, by a separate suit or proceedings, I think that it would be in the interest of justice and equity to grant a decree in favour of the plaintiff regarding the half of the consideration he has advanced on behalf of defendant No.1, both for the purchase of the site as well as for the construction of the house. According to the case of the plaintiff, he spent Rs.1,800/-towards the purchase of the site and Rs.3,500/- towards the construction of the house, for and on behalf of the defendant No.1 so far as defendant No.1's share is concerned. If that is so, the plaintiff would be entitled to a decree for that amount, and by exercising the jurisdiction of this Court vested under Section 36 of CPC, I propose to grant interest at the rate of 6 per cent per annum on this amount from the date of the execution of the alleged agreement i.e., 25-4-1975 vide Ex.A1 to the date of realisation. If the plaintiff were to get the relinquishment deed executed by defendant No.1, perhaps he would have been entitled to Rs. 10/- per month as rent from defendant No.1 and that he has not done. Therefore, the defendant No.1 being the owner, cannot be treated as a tenant in any sense of the term. However, in the circumstances of this case, If I create a charge in favour of the plaintiff in the suit property to the extent it is under the ownership of the defendant No.1 and that would meet the ends of justice. In this view of the matter, I pass the order as under:
The appeal is allowed. The impugned judgments and decrees of both the Courts below are hereby set aside and there shall be a decree in favour of the plaintiff for an amount of Rs.5,300/- (Rs. 1,800/- + Rs.3,500/-), with interest at the rate of 6 per cent per annum from 25-4-1975 vide Ex.A1, till the date of realisation. For the realisation of this amount, there shall be a charge in favour or the plaintiff, in the suit property to the extent it pertains to the share of defendant No. 1. In case of default, the plaintiff would be entitled to recover the same by seeking the sale by auction of other half of the suit property under the ownership and possession of defendant No.1. Having regard to the facts and circumstances of this case, the parties shall bear their own costs.