Madras High Court
P. Jaswant Kumar vs M. Rajashekar on 5 August, 2013
Author: S. Palanivelu
Bench: S. Palanivelu
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05-08-2013 CORAM THE HONOURABLE MR. JUSTICE S. PALANIVELU S.A.No.969 of 2005 P. Jaswant Kumar ... Appellant/Appellant/2nd defendant vs. M. Rajashekar ... Respondent/Respondent/Plaintiff Second Appeal filed under Section 100 of CPC against the Judgment and Decree dated 03.03.2005 in A.S.No.24 of 2004 on the file of the District Court at Ooty, confirming the Judgment and decree dated 30.01.2004 made in O.S.No.128 of 2002 on the file of the Subordinate Court at Ooty. For Appellant : Mr. Srinath Sridevan For Respondent : Mr. U. Perarasu JUDGMENT
1. The brief averments found in the plaint is as follows:
1.(a) The first defendant is the owner of the suit property. He and the plaintiff entered into a registered sale agreement dated 21.4.1995, whereunder the 1st defendat agreed to sell the suit property to the plaintiff for a total consideration of Rs.1,50,000/- and received Rs.1,25,000/- on the same date as advance sale consideration and agreed to receive the balance within 4 months from the date of agreement. However, the time was not the essence of the contract. It is also agreed that on receipt of balance sale consideration, the 1st defendant shall execute the sale deed in favour of the plaintiff. Though the plaintiff was ever willing and ready to execute the sale deed, the 1st defendant was evading the same. Hence, he issued a legal notice on 19.8.1995. The 1st defendant did not reply, but, executed another agreement dated 16.2.1996 confirming the sale agreement dated 21.4.1995 and also received the entire balance sale price of Rs.25,000/- from the plaintiff on the same date and put the plaintiff in possession of the suit property in part-performance of the suit agreement. As the 1st defendant failed to execute the sale deed, another legal notice was sent on 10.2.1999 calling upon the 1st defendant to execute the sale deed. On receipt of the above notice, he sent a hand written reply dated 26.3.2002, promising to perform the exeuction of the sale deed.
1.(b) All of a sudden, the plaintiff came to know that the 1st defendant has sold the suit property to the 2nd defendant on 27.8.2001 itself in a surreptitious manner. Both the defendant are aware of the agreement in favour of the plaintiff. Under section 19 of the Sepcific Relief Act, the defendants are both liable to sell the suit property to the plaintiff. The 2nd defendant is not a bonafide purchaser for good faith. The plaintiff is still ready to perform his part of the sale agreement. Further the plaintiff claims alternative relief of return of money with interest at 18% p.a. Only to comply with the statutory requirement of law and on the failure to do so, for the Court to execute and register the sale deed and alternatively for directing the defendants jointly and severally to refund the sum of Rs.1,50,000/- to the plaintiff with interest at 18% p.a.
2. In the written statement filed by the 1st defendant, the following contentions have been raised:-
2.(a) The allegation that this defendant had entered into a sale agreement is admitted. But he denied that he is the owner of the property mentioned in the plaint schedule. Actually, this defendant borrowed a sum of Rs.90,000/- from the plaintiff and issued a cheque of Central Bank of India, kotagiri Branch dated 17.11.1993 in favour of the plaintiff. The above said cheque was dishonoured and the plaintiff filed a case under Section 138 of the Negotiable Instruments Act before the Judicial Magistrate Kotagiri. This defendant executed a registered sale agreement dated 21.4.95 in favour of the plaintiff for the amount borrowed in the year 1993. Thereafter the plaintiff did not proceed with the case. Therefore, the allegation that this defendant agreed to sell the suit property and received advance sale consideration from the plaintiff is denied. No sale consideration has been passed to this defendant for sale agreement dated 21.4.1995.
2.(b) This defendant never received any amount from the plaintiff as sale consideration and never put the plaintiff in possession of the suit property. The alleged agreements were never intended to be acted upon and the hand written reply dated 26.3.2002 was obtained by undue influence. The area of around 8.00 acres of Kotagiri Village orginally belonged to this defendant's grand father and subsequently devolved among the legal heirs of his grand father after his death. No partition had taken place at the time of execution of the alleged agreements in favour of the plaintiff. The suit is bad for non-joinder of parties and hence the same may be dismissed.
3. The averments contained in the written statement of the 2nd defendant in brief is as follows:
This defendant denies the entire allegations in paras 3 to 9 as myth and imaginary. He also denied the allegation that he has bought the suit property from the 1st defendant surreptitiously. This defendant has been a bonafide purchaser of the suit property together with other properties from the legal heirs of K.N.B.Ajja Gowder as per the sale agreement dated 8.5.1995 executed by the legal heirs of late Ajja Gowder. Subsequently, a memorandum of oral partition dated 1.7.2000 was effected between the legal heirs of late K.N.B.Ajja Gowder and the 1st defendant was allotted a half share in the above said Tea Field. Based on this, this defendant purchased around 3.50 acres form the 1st defendant on 27.8.2001 in the above said property. While this defendant questioned about the previous agreement with the plaintiff, the 1st defendant declared that the registered sale agreement was never intended to be acted upon. This defendant is innocent purchaser of good faith. Therefore, this defendant is not liable for specific performance of the suit agreement in favour of the plaintff. There is no cause of action to file the suit. The suit is bad for non-joinder of necessary parties and hence, the suit may be dismissed.
4. On the plaintiff's side Plaintiff was examined as P.W.1 and marked 7 documents and on the side of the defendant, 3 witnesses were examined and 7 documents were marked. After perused the oral testimony and documents of both sides, the trial Court has decreed the suit as prayed and directed the defendants 1 and 2 to execute the sale deed within two months. The judgment and decree was confirmed by the first appellate Court by dismissing the appeal preferred by the 2nd defendant in A.S.No.24 of 2004. Aggrieved against that order the 2nd defendant is before this Court.
5. The following substantial question of law has arisen for consideration in this Second Appeal:-
1.Whether the agreement of sale under Ex.A.1 would amount to constructive notice to its existence as putforth by the respondent, which according to the appellant is contrary to the specific wording of Section 3 of the Transfer of Property Act?
2.Whether the appellant, the purchaser under Ex.B.5 is not a bona-fide transferee for the value and without notice as envisaged under Section 19(b) of the Specific Relief Act?
6. The events with reference to the dates are essential so far as this case is concerned. The suit property belongs to 1st defendant. He agreed to sell the property for a sum of Rs.1,50,000/- to the plaintiff and executed an agreement of sale Ex.A.1 on 21.4.1995. It is a registered sale agreement. As per the recitals, the first defendant received a sum of Rs.1,25,000/- as advance and the plaintiff had to pay the balance sale consideration of Rs.25,000/- within 4 months from the date of agreement to the first defendant and to get the sale deed executed and if the first defendant after the receipt of the amount delayed or refused to execute the sale deed the plaintiff to proceed against him legally through court of law. On the verge of completion of 4 months from the date of sale agreement, the plaintiff issued a notice Ex.A.2 on 19.8.1995 to the first defendant through his lawyer, calling upon him to execute the sale within 7 days. By means of Ex.A.3 Postal acknowledgment card, the first defendant received the notice. There was no reply emanated from first defendant. Afterwards, the parties were keeping quiet for some time. On 16.2.1996, the first defendant entered into another agreement of sale with the plaintiff, furnishing the reasons for his inability to execute the sale deed in his favour of the plaintiff. On receipt of Rs.25,000/- the first defendant put the plaintiff in possession of the suit property. It is further stipulated in Ex.A.4 that in future if the plaintiff called upon the first defendant to execute sale deed in his favour, the first defendant could not refuse or delay to execute the sale deed.
7. After the execution of Ex.A.4, nothing transpired between the parties for quiet a long time Ex.A.5 legal notice came to existence on 10.2.99 by the plaintiff calling upon the first defendant to register sale deed in his favour within 7 days. It is worthwhile to mention that there was no reply on the part of the defendant. But the first defendant executed a sale deed in favour of the second defendant on 27.8.2001 with respect to the suit properties Ex.B.5 is the notorised xerox copy of sale deed. But the plaintiff has produced a document Ex.A.6 stated to be a letter given to the first defendant on 26.3.2002 in which the first defendant has reportedly stated that since the boundaries were wrongly mentioned in the sale agreement dated 21.4.1995, to rectify the same and to execute the sale deed the first defendant could not come due to his ill-health, that he would properly mention the boundaries and whenever he was called he would come to sub-registrar office and register the sale deed.
8. Ex.A.6 received scathing attack from the side of the second defendant. The learned counsel Mr.Srinath Sridevan appearing for the 2nd defendant would submit that inasmuch as Ex.A.6 came to existence at a latter point of time. After Ex.B.5 it has no effect at all, that a person who is having no right to the property on the date of execution of acknowledgment cannot convey any right in favour of another person. Since the first defendant already sold the property to the second defendant there remain nothing for first defendant in the suit property to give acknowledgment of liability or transfer of right in the property and that Ex.A.6 is non-est in the eye of law. In support of his contention he placed reliance upon a Full Bench decision of this Court reported in AIR 1940 Madras 470 [Pavayi and Ors. v. Palanivel Goundan and Ors.] wherein the learned Judges have held as follows:
"7. In certain of the cases to which I have referred the mortgagor retained an interest in part of the mortgaged properties sold, but I do not consider that this makes any difference in principle. The question is whether a mortgagor who has lost all interest in the mortgaged property, can by an acknowledgment within the meaning of Section 19 or by the payment of interest or principal within the meaning of Section 20, bind the person on whom his interest has devolved. If he cannot bind the purchaser of the equity of redemption when the purchase covers the whole of the mortgaged properties obviously he cannot bind the purchaser of part of the mortgaged properties."
9. Referring and following the above said judgment, in a subsequent decision by a Full Bench of this Court reported in AIR 1964 Madras 169 [Nallathambi Nadar Chellakannu Nadar v. Ammal Nadachi Chellathankom Nadachi and others] it is reiterated that acknowledgment by a person who is not liable at time of acknowledgment does not amount to acknowledgment in law. The operative portion of the judgment is as follows:
15. In Pavayi v. Palanivela (1940) 1 M.L.J. 766 : I.L.R. 1940 Mad. 872 (F.B.) a Full Bench of this Court held that a mortgagor who had lost all interest in the mortgaged property and who had ceased to be personally liable for the mortgage debt could not validly, by any acknowledgment within the meaning of Section 19, bind the person on whom his interest had devolved. That was no doubt a case where even at the time of the suit the mortgagor was not liable, but that, however, cannot make any real distinction. An acknowledgment of liability, we have indicated above, pre-supposes that the person acknowledging possesses some interest which can be bound by his statement. If he has no such interest, it will be a misnomer to call his statement, an acknowledgment of liability. No debtor, for example, can be held to be bound by a mere acknowledgment by a stranger. Again, it is a well-settled rule that an acknowledgment of liability must involve an admission of a subsisting jural relationship between the parties and a consciousness and an intention of continuing such a relationship until it is lawfully terminated."
In view of the settled propostion a person who is not having any right over the property has no right to acknowledge liability. In the case on hand Ex.A.6 remains as an invalid paper.
10. The learned counsel appearing for the plaintiff Mr.Ravi would submit that the events of the case have to be taken in consideration, that the plaintiff has paid fully the sale consideration, that the second defendant is not a bonafide purchaser, that only to hood-wink the plaintiff both the defendants are conniving together and had raised defence as if Ex.B-5 is a legally valid document. He placed strong reliance upon a decision of Honourable Supreme Court reported in 2005 AIR SCW 1365 [Devalsab v. Ibrahimsab F. Karajagi and another]. The relevant portion of the judgment containing essential facts and principles is as follows:
"7. Learned counsel for the plaintiff-appellant submitted that in fact exercise of discretionary relief in favour of Defendant No.2 is not correct as this kind of discretion if exercised in favour of Defendant No.2 then it is likely to lay down a bad precedent. This will give premium to unethical transaction and a bona fide purchaser will be left high and dry. Learned counsel for the defendants submitted that it is true that Section 20 of the Specific Relief Act is a discretionary remedy that is not always necessary to grant a decree for specific relief if it appears to be inequitable and causes hardship to the other side. But looking to the facts of the present case we are of opinion that it will be unfair and inequitable not to grant a decree for specific relief in favour of the plaintiff-appellant herein because he is a bona fide purchaser and he has done everything which is possible, that he has purchased the stamp paper and was ready and willing to perform his part of the contract, that he went along with Defendant No.1 to the Sub-Registrar's Office for registration but some how Defendant No.1 sneaked away from that place as he had already entered into another agreement to sell the present premises, so much so that a sham suit was got filed by Defendant No.2 against Defendant No.1 and on the same day a compromise decree was obtained. These facts go to show that there is not much equity left in favour of Defendant No.2 as it appears that the suit by Defendant No.2 was a pre-arranged affair with connivance with Defendant No.1. Otherwise the suit would not have been filed on the same day and a compromise decree would not have been obtained the very same day. This shows that there was a pre-conceived agreement between Defendant Nos.1 & 2 in order to cheat the plaintiff- appellant herein. Therefore, we are of opinion that the discretionary power exercised by learned Single Judge of the High Court was not correct. In fact, it appears that Defendant No.2 has purchased the litigation and therefore, there is no equity in his favour."
11. In the case before the Apex Court the plaintiff was ready and willing to perform his part of contract. He has done everything which is possible, that he has purchased the stamp paper and was ready and willing to perform his part of contract, that he went along with the 1st defendant to Sub-Registrar office for registration but the 1st defendant somehow sneaked away from that place as he had already entered into another agreement to sell the same premises. So a sham suit was filed by defendant No.2 against 1st defendant and on the same day a compromise decree was obtained and hence the Supreme Court has recorded a finding granting decree for specific performance of the agreement to sell agaisnt the defendant No.1 and directed the plaintiff to take appropriate proceedings for eviction of Defendant No.2 and also directed the Defendant No.2 to file a suit against the 1st defendant to recover his money.
12. When this Court adverted to the conduct of the plaintiff, he used to issue notice to the first defendant on the verge of the time stipulated or on the expiry of limitation period. He issued Ex.A.2 Notice on 19.8.1995 i.e., at the end of four months stipulated in Ex.A.1. But afterwards he has not taken any steps to get the sale deed executed till he entered into another agreement Ex.A.5 on 16.2.1996. Even then, he did not evince any interest to get the sale deed executed. It is no doubt true, that the plaintiff had paid the entire sale consideration on the date of Ex.A.4. But he did not take any possible steps to get the sale executed from first defendant. Only on the date of filing of the suit on 19.6.2002 from 16.2.1996 for about 6 years he did not take any steps except issuing notice. Notice Ex.A.5 is dated 10.2.1999. Even after sending notice Ex.A.5 he had been keeping quiet for more than three years. The lethargic attitude on the part of the plaintiff would dis-entitle him to get the relief. For keeping quiet from the date of Ex.A.4 till the date of Ex.A.5 and Ex.A.5 to 19.6.2002 he has not funished any plausible or convincing reasons for keeping quiet. Such plaintiff could not get the equitable relief of specific performance of contract, in the considered view of this Court. Like the plaintiff in the case in Devalsab (supra) the plaintiff in this case did not take the first defendant to the Sub-Registrar's office with stamp papers. In the case on hand the plaintiff did not evince any interest to get the sale deed on various occasions. It is true that materials are available to show that the second defendant have got the knowledge of Exs.A.1 and A.4 have been entered into between the plaintiff and the first defendant. But he was waiting upto Ex.B.5 sale deed dated 27.8.2001 i.e., over 5 years after Ex.A.4 agreement. In the case of Devalsab before the Supreme Court, the suit was filed in time and the Supreme Court has recorded findings that the plaintiff was entitled for the relief. But in this case, no such finding could be recorded because of the laxity of the plaintiff. The facts in the present case are distinguishable. Further the suit has been filed long after Ex.A.4 agreement. The facts available in this case would indicate that since 4 years were over after Ex.A.4 and that the agreement would have been time barred and hence the second defendant could not be stated that he is not a bonafide purchaser.
13. In view of the above said discussion, this Court is of the considered view that the plaintiff could not get the relief of specific performance which is equitable relief. Even though he paid the full sale price, he failed to establish that he was ready and willing to get the sale deed executed from 1st defendant. In such view of the matter, the Original Suit is liable to be dismissed. The Judgments of the Courts below are also liable to be set aside and they are accordingly set aside. The second appeal deserves to be allowed. The substantial question of law is answered accordingly.
14. In fine, the Second Appeal is allowed. Original Suit is dismissed. No costs.
05.08.2013
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ggs
To
1. The District Judge,
Ooty.
2. The Subordinate Judge,
Ooty.
S. PALANIVELU,J.
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Judgment in:
S.A.No.969 of 2005
05-08-2013