Kerala High Court
K.Ali vs M.J.Cherian on 7 December, 2012
Author: P.Bhavadasan
Bench: P.Bhavadasan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.BHAVADASAN
MONDAY,THE 3RD DAY OF MARCH 2014/12TH PHALGUNA, 1935
RSA.No. 1116 of 2013
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AGAINST THE JUDGMENT IN AS 3/2010 of DISTRICT COURT, ,KALPETTA,
WAYANAD, DATED 07-12-2012
AGAINST THE JUDGMENT IN OS 72/2000 of SUB COURT,
SULTHAN BATHERY DATED 30-09-2009
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APPELLANT(S)/APPELLANT/PLAINTIFF:
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K.ALI, AGED 57 YEARS
S/O.KUNHIMOOSA HAJI, RESIDING AT KAVUNGAL HOUSE,
NOOLPUZHA AMSOM AND DESOM, SULTHAN BATHERY TALUK,
WAYANAD DISTRICT.
BY ADVS.SRI.V.M.KURIAN
SRI.SABU P.JOSEPH
RESPONDENT(S)/RESPONDENT/DEFENDANT:
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M.J.CHERIAN, AGED 66 YEARS,
S/O.JOSEPH, RESIDING AT KALPARA HOUSE,
CHERANGODE AMSOM AND DESOM, GUDALUR TALUK,
NILGIRIS DISTRICT, TAMILNADU-643270.
BY ADVS. SRI.P.B.KRISHNAN
SRI.N.AJITH
SRI.P.M.NEELAKANDAN
SRI.P.B.SUBRAMANYAN
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD
ON 03-03-2014, ALONG WITH RSA. 1137/2013, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
PJ
P.BHAVADASAN, J.
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Regular Second Appeal Nos.1116 &
1137 OF 2013
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Dated this the 3rd day of March, 2014.
J U D G M E N T
Two suits were instituted independently on the basis of Ext.A1 agreement for sale produced in O.S.No.18/1997 out of which R.S.A.No.1137/2013 arises. For easy reference, the facts in O.S.No.18/1997 shall be referred to.
2. The 2nd plaintiff entered into an agreement for sale namely, Ext.A1 with the sole defendant in the suit whereby the defendant undertook to assign 2.36 Acres of land for a total consideration of Rs.2,25,000/-. The agreement was dated 05.12.1994 and the transaction was to be completed on or before 31.05.1995. Rs.15,000/- was paid as advance on 05.12.1994 itself. Subsequently, at the instance of the 2nd plaintiff, two sale deeds namely, Exts.A2 and A3 for 6 cents and 54 cents respectively dated 01.03.1995 and 30.03.1995 were executed by the defendant in the suit in favour of two strangers for Rs.1,25,000/- and Rs.85,000/- respectively. A sum of R.S.A Nos.1116 & 1137/2013 2 Rs.10,000/- was paid on 30.01.1995 and another sum of Rs.1,000/- was paid on 01.03.1995. On 15.05.1995, the balance extent of 1 Acre and 76 cents was transferred by the defendant to the 1st plaintiff. According to the plaintiffs, Ext.A4 sale deed was executed receiving Rs.9,000/- in cash and a sum of Rs.65,000/- by way of cheque dated 15.05.1995 from the 1st plaintiff. According to the plaintiffs, with the execution of Ext.A4, title of the property passed on to the 1st plaintiff and possession was also given to him. Further case of the 1st plaintiff is that he accepted the request made by the defendant to continue to stay in the house for a few more months after which he agreed to vacate. As he did not do so, suit had to be instituted.
3. The defendant resisted the suit. The main contention was that the cheque which was given for Rs.65,000/- on presentation bounced and there was failure of consideration and therefore, sale in respect of Ext.A4 had not taken effect. On the failure of consideration, he had executed Ext.B1 cancellation deed on 10.08.1995 and therefore neither the title nor possession passed on to the 1st plaintiff and he had no right over the plaint R.S.A Nos.1116 & 1137/2013 3 schedule property. It was contended specifically that possession was to be handed over only on receipt of the entire sale consideration and as the sale consideration was not paid, possession was also not handed over. It was due to the failure on the part of the 1st plaintiff that the transaction had fallen through which necessitated cancellation deed to be executed retaining the title with the defendant. He therefore contended that the plaintiffs are not entitled to any relief in the suit.
4. The defendant in O.S.No.18/1997 instituted a suit which was transferred to the court where O.S.No.18/1997 was pending and it was re-numbered as O.S.No.72/2000. That was a suit for declaration that the assignment deed was not valid and cancellation deed had taken effect. That suit was resisted by the defendant who is the 1st plaintiff in O.S.No.18/1997. He took up contentions similar to the allegations in the plaint in O.S.No.18/1997.
5. Issues were raised in both the suits and they were independently tried. The evidence in O.S.No.18/1997 consists of the testimony of PWs 1 and 2 and the documents marked as R.S.A Nos.1116 & 1137/2013 4 Exts.A1 to A27 on the side of the plaintiffs. The defendant had DW1 examined and Exts.B1 to B5 marked. Exts.C1 and C2 are commission report and sketch.
6. On appreciation of the evidence in the case, the trial court came to the conclusion that there was failure of consideration and the suit filed by the plaintiff was dismissed. The disappointed plaintiffs carried the matter in appeal as A.S.No.5/2009 before the District Court, Kalpetta.
7. In the other suit namely, O.S.No.72/2000, though the trial court found the title in favour of the plaintiff, the relief of possession was declined. In O.S.No.72/2000, evidence consisted of the testimony of PW1 and the documents marked as Exts.A1 to A8 from the side of the plaintiff. The defendant had himself examined as DW1. On appreciation of the evidence in the case, the trial court non suited the plaintiff. The matter was taken up in appeal as A.S.No.3/2010.
8. The lower appellate court in A.S.No.5/2009 which arose from O.S.No.18/1997 allowed the appeal and granted a decree as prayed for by the plaintiffs in the suit. Further the lower R.S.A Nos.1116 & 1137/2013 5 appellate court confirmed the judgment and decree of trial court dismissing the suit in A.S.No.3/2010 which arose out of O.S.No.72/2000.
9. R.S.A.No.1137/2013 is directed against A.S.No.5/2009 while R.S.A.No.1116/2013 is directed against A.S.No.3/2010. The following substantial questions of law are seen formulated in the appeals for consideration.
(i) Is it not a fraud within the meaning of Section 17 of the Indian Contract Act to make the seller of the immovable property to believe that the cheque issued towards the purchase price of the property will be honored on presentation and thus getting the sale deed executed but such promise subsequently turned out to be false as the cheque issued towards the consideration of the sale deed got dishonoured for the reason funds insufficient in the account of the buyer and the buyer did not make the payment even on subsequent demand?
(ii) Whether the courts below are justified in holding that the remedy of the seller is to sue for unpaid purchase price if the sale deed is got executed by playing fraud on the seller?
R.S.A Nos.1116 & 1137/2013 6
(iii) Whether the courts below went perversely wrong in dismissing the prayers sought for by the plaintiff in the suit?
10. For the purpose of disposing of these matters, the parties, facts and documents as they are available in R.S.A.No.1137/2013 shall be referred to.
11. Learned counsel for the appellant contended that the lower appellate court was not justified in reversing the finding of the trial court dismissing the suit. Learned counsel went on to point out that even though sale deed namely, Ext.A4 recited that sale consideration was received and possession was given, actual intention was that the title should pass only when the entire sale consideration is paid and possession was yet to be given. According to the learned counsel, when the cheque bounced on presentation, there was failure of consideration and therefore title did not pass nor possession was given. When it is intended that the title should pass only on payment of the entire consideration, on failure to pay consideration, the title did not pass. For the above proposition, learned counsel relied on the decision in R.S.A Nos.1116 & 1137/2013 7 Anathula Sudhakar vs. P. Buchi Reddy (dead) by lrs. and others [(2008) 4 Supreme Court Cases 594]. Even if the document of assignment mentions about the payment of consideration, it can be shown that there was failure of consideration and possession was not given. Sections 91 and 92 of the Evidence Act do not stand in the way of adducing oral evidence to prove non payment of sale consideration. For the above proposition, learned counsel relied on the decision in Suresh vs. Tobin (2013 (1) KLT 293).
12. In the case on hand, according to the learned counsel for the appellant, by the mere handing over of a cheque, it cannot be said that the entire sale consideration has been paid. Unless and until the cheque has been encashed, it could not be said that the plaintiffs in the suit had complied with the terms of the document. When the cheque bounced, there was failure of consideration and it was under those circumstance cancellation deed was executed. Once cancellation deed is executed, the 1st plaintiff has no title to the property and his suit ought to have been dismissed on that ground. At any rate, according to the R.S.A Nos.1116 & 1137/2013 8 learned counsel, the claim made by the 1st plaintiff that the defendant in the suit was in permissive occupation of the house cannot be accepted. First of all, according to the learned counsel, there was no allegation in the plaint that the defendant occupied the house on permissive basis and in fact in the agreement for sale it would appear that possession of a mill was given to the proposed vendee. But the plaint specifically says that mill is in possession of defendant and that falsifies the recital in sale deed that mill was handed over. It is therefore contended that the understanding therefore was that when the entire sale consideration is paid and satisfied, the tile and possession should pass. This vital aspect has been omitted to be noticed by the lower appellate court and therefore it is contended that the judgment and decree of the lower appellate court cannot survive.
13. Learned counsel appearing for the respondents, on the other hand, pointed out that the definition of 'sale' contemplates consideration paid or promised to be paid or part-paid and part- promised. The question of passing of title depending upon the payment of consideration can arise only when there is promise to R.S.A Nos.1116 & 1137/2013 9 pay sale consideration in future. Even assuming that the possession of the house was not given as is now claimed, that does not mean that title has not passed with the execution of Ext.A4 document in their favour. According to the learned counsel, it is one thing to say that title has not passed and quite another thing to say possession has not been handed over. A reading of the written statement filed by the defendant in the suit would not indicate that title was not to pass unless cheque was encashed. The main contention was that possession was to be given on encashment of cheque.
14. Learned counsel for the respondents also pointed out that the case put forward by the 1st plaintiff that the defendant was allowed to occupy the house for a short period on permissive basis is strengthened by the fact that even though cheque for Rs.65,000/- was dated 15.05.1995, it was presented for encashment only on 07.08.1995. Even assuming, according to the learned counsel, that possession was not handed over, suit was a comprehensive one seeking recovery of possession and there is nothing defective in the suit and it cannot be said that R.S.A Nos.1116 & 1137/2013 10 the title has not passed. Learned counsel also drew inspiration from the fact that the suit filed by the appellant was dismissed which means that the title has passed and it cannot be said that the title continues to vest with him. True, in the decision in Janak Dulari Devi & Anr. vs. Kapildeo Rai & Anr. (AIR 2011 Supreme Court 2521), the Apex Court had occasion to hold that when it is discernible from the document or from the conduct that the title was entitled to be passed only on payment of entire sale consideration, the mere fact that the document of sale recites that title has passed may not have any consequence in passing of title. When there is clear indication that title has to pass from vendor to vendee only on payment of entire consideration and it is shown by the vendor that the sale consideration has not been fully paid, merely because document of assignment has mentioned that title has passed will not give any benefit to the vendee.
15. In the decision in Suresh vs. Tobin (2013 (1) KLT
293), the main issue considered was whether in spite of Sections 91 and 92 of the Evidence Act, is it possible for the R.S.A Nos.1116 & 1137/2013 11 vendor to contend that sale consideration has not been received and the title has not been passed even though there are recitals to that effect in the deed of assignment.
16. One of the questions that arises for consideration is whether the principles laid down in the above decision can have any application to the facts of the case. One may recollect the facts to understand the true scope of dispute. In this case, it is not in dispute that 2.36 Acres of land was agreed to be assigned for a total consideration of Rs.2,25,000/-. The evidence now on record shows that assignment was made by virtue of three deeds of assignment; one for six cents dated 01.03.1995, another for 54 cents dated 30.03.1995 and balance 1 Acre and 76cents by Ext.A4 dated 15.05.1995.
17. While executing the assignment deed dated 15.05.1995 in respect of 1.76 Acres in favour of the 1st plaintiff in O.S.No.18/1997, the evidence shows that cheque for Rs.65,000/- was handed over to the vendor as full and final payment of sale consideration. The balance amount had already been paid. The 1st plaintiff in O.S.No.18/1997 would have a case that even R.S.A Nos.1116 & 1137/2013 12 though sale deed was executed and possession was handed over, the defendant in the case wanted to stay in the house and he was allowed to do so on condition that he could encash the cheque when he surrenders the house to the 1st plaintiff. On the other hand, what the defendant would contend that being portion of sale consideration, unless and until cheque was encashed, title could not be deemed to have been passed on to the vendee and at the moment when the cheque was dishonoured, deed had fallen through and no title passed on to the 1st plaintiff.
18. As rightly pointed out by the learned counsel for the respondents, in the written statement in O.S.No.18/1997, the main case put forward by the defendant is that he was sceptical about the possibility of cheque being dishonoured and therefore he retained the possession of the property with him. Nowhere in the written statement, one could find a contention that the title to the document had not passed by virtue of Ext.A4. It is one thing to say that title has not passed and quite another thing to say possession was not handed over.
19. Going by the definition of sale as per Section 54 of the R.S.A Nos.1116 & 1137/2013 13 Transfer of Property Act, consideration may be paid or promised to be paid or part-paid and part-promised. One could at best say that the principle that title is intended to pass only on payment of consideration may apply to cases where consideration is to be paid on a future date. If in a case where the entire sale consideration is paid on the date of deed of assignment, it will be difficult to say that the title is not intended to pass. Ext.A4 clearly states that title has passed on to the vendee. The question is then the impact of dishonour of the cheque which was issued as part of the sale consideration. As rightly noticed, the defendant in the suit who is the appellant herein has no case that right over the property had not passed on to the 1st plaintiff. His only case is that he retained the possession until the entire sale consideration is received by him.
20. It is significant to notice that both the trial court as well as the lower appellate court found that Ext.A4 is a valid document and the title has passed on to the 1st plaintiff in the suit. The trial court declined to grant relief to the 1st plaintiff on the ground that cheque had bounced. Normally, when money R.S.A Nos.1116 & 1137/2013 14 remains unpaid, the only right of the vendor is to take recourse to Section 55(6)(b) of the Transfer of Property Act. His remedy is to enforce charge over the property for balance sale consideration as contemplated under Section 55(6) of the Transfer of Property Act. At any rate, there is nothing to indicate in the case on hand that there was no indication or intention on the part of the parties i.e. assignor and the assignee that title should pass only on encashment of the cheque. Even, as already noticed, in the written statement filed by the defendant in the suit, his only contention was that possession was not given to the 1st plaintiff since the assignor wants to ensure that cheque will be encashed before granting possession. Once it is found that Ext.A4 sale deed has taken effect, then cancellation deed executed by the defendant in O.S.No.18/1997 can have no legal consequence.
21. As rightly pointed out by the learned counsel for the respondents in these appeals, the suit filed by the defendant in O.S.No.18/1997 regarding the nullity of Ext.A4 executed by him stood dismissed and it is confirmed in appeal. The title has to R.S.A Nos.1116 & 1137/2013 15 vest in somebody. Once it is found that as per Ext.A4 document, vendor has lost title over the property, necessarily, title has to vest with the vendee. As already noticed, there is nothing to indicate that title as such was intended to be passed on a future date. Even going by the document, as on the date of execution of Ext.A4, title had vested with the assignee namely, 1st plaintiff in the suit.
22. It was very vehemently contended on behalf of the appellant that declaration of title was necessary in the case on hand since the 1st plaintiff did not derive title under Ext.A4. For the above proposition, learned counsel relied on the decision in Anathula Sudhakar vs. P. Buchi Reddy (dead) by lrs. and others [(2008) 4 Supreme Court Cases 594]. In the decision referred to by the learned counsel for the appellant, the circumstances under which various prayers will have to be made have been enumerated. It says in detail whether along with prayer for injunction, declaration of possession is necessary in view of the contentions taken by the defendant in the suit.
23. In the case on hand, it has been found that the title R.S.A Nos.1116 & 1137/2013 16 passed as soon as Ext.A4 was executed and suit filed by the appellant stood dismissed. Therefore, as far as the 1st plaintiff in O.S.No.18/1997 is concerned, it was not necessary for him to seek declaration of title because even as found by the court in both suits, title had passed on with the execution of Ext.A4.
24. What now remains to be considered is the question of possession. Even assuming that the contention raised by the appellant in the written statement is correct and possession was intended to be handed over only on entire consideration being paid, that cannot save the defendant in the suit for the simple reason that the relief sought for by the plaintiff is a comprehensive one including the prayer for recovery of possession and mandatory injunction.
25. Learned counsel for the appellant highlighted the fact that though the agreement for sale indicated that portion of mill was handed over, it was not so as could seen from the plaint in O.S.No.18/1997. In the said suit, relief in respect of the mill was also sought for. There is no case for the 1st plaintiff in O.S.No.18/1997 that the defendant in the suit was allowed to R.S.A Nos.1116 & 1137/2013 17 occupy the mill on permissive basis. Therefore, handing over of possession asserted earlier cannot be true.
26. Assuming it to be so, it does not help the defendant in the case at all. Here again, as far as mill is concerned, the prayer is comprehensive and the prayer is not limited to one for injunction. In case of both the house and the mill, recovery of possession has been sought for. Learned counsel for the appellant then contended that with respect to the property, the only relief sought for was injunction which is not sufficient since, according to the learned counsel, possession has not been given in respect of the property also. True, Commissioner in his report has stated that the defendant in O.S.No.18/1997 is the owner of the property. The duty of the Commissioner is only to report what is seen in the place and not to adjudicate.
27. Both the courts below have found that as regards the rest of the property that is excluding mill and house, the plaintiffs have already been given possession. The lower appellate court has granted a conditional decree to the effect that on deposit of Rs.65,000/- alone, possession will be given to the 1st plaintiff of R.S.A Nos.1116 & 1137/2013 18 the house and mill. As regards the interest, the lower appellate court had adjusted the amount towards the damages for the user and the occupation of the building which is not assailed in this appeal.
28. For the above reasons, this Court finds no ground to interfere with the finding of the lower appellate court that Ext.A4 is a valid document and the plaintiffs are entitled to the relief sought for by them in O.S.No.18/1997. Both the courts below were also justified in holding that the plaintiff in O.S.No.72/2000 could not succeed. It has been rightly found that with the execution of Ext.A4, title of the property has passed and cancellation deed serves no purpose.
In the result, these appeals are without merits and they are liable to be dismissed. I do so confirming the judgment and decree of the court below.
Sd/-
P.BHAVADASAN JUDGE smp //True Copy // P.A. to Judge.