Kerala High Court
R.C.Kumar vs P.Kumaran on 8 July, 2010
Author: P.Bhavadasan
Bench: P.Bhavadasan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
SA.No. 67 of 1997(G)
1. R.C.KUMAR
... Petitioner
Vs
1. P.KUMARAN
... Respondent
For Petitioner :SRI.K.G.GOURI SANKAR RAI
For Respondent :SRI.V.R.KESAVA KAIMAL
The Hon'ble MR. Justice P.BHAVADASAN
Dated :08/07/2010
O R D E R
P.BHAVADASAN, J.
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SA No.67 of 1997
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Dated 8th July 2010 Judgment The plaintiffs before the Munsiff's Court, Kasaragod, are the appellants.
2. During the pendency of the appeal, the first appellant died and his legal heirs have been brought on the party array as additional appellants 43 to 48. The first respondent also died and his legal heirs have been brought on the party array as additional respondents 8 to
17.
3. The suit was one for recovery of possession, on the strength of title and for mesne profits. Plaint A schedule property originally belonged to the branch of the family of late Poovamma, who obtained it under Ext.A1 partition deed dated 09.01.1950. At the relevant time, the properties were outstanding on lease with one Mr.Thyampu Belchapada on chalageni lease. It seems that SA 67/97 2 a compromise was entered into between the tenant and Poovamma as a consequence of which, the properties were surrendered to Poovamma. But, in fact, the assignment deed was taken in the name of the father-in- law of the first plaintiff, who is the first defendant in the suit. Consequent on the death of Poovamma, the plaintiffs stepped into her shoes. According to the plaintiffs, the first defendant did not get any rights as a consequence of the assignment deed in his name and it was a benami transaction. The property always continued to be in the possession of Poovamma and she was in actual management of the same. But, the first defendant moved the Land Tribunal and obtained a purchase certificate in his name. The plaintiffs took up the matter in appeal as AA No.614/82. The Appellate Authority set aside the order of the Land Tribunal and dismissed the OA filed by the first defendant. The said order was confirmed in revision by this Court. Pointing out that the defendants are continuing in illegal possession of the property, the suit was laid. SA 67/97 3
4. The first defendant resisted the suit, pointing out that the allegations in the plaint are untrue and that he is the actual owner of the property. He has assigned portions of the property to strangers and they are in possession of the same. On the basis of these contentions, he prayed for dismissal of the suit.
5. The Trial Court raised necessary issues for consideration. Evidence consists of Exts.A1 to A11 produced by the plaintiff and Exts.B1 to B12 produced from the side of the defendant. Exts.C1 and C2 are the commissioner's reports. The defendants had DW1 examined.
6. The Trial Court, in view of the Benami Transactions (Prohibition) Act, 1988, held against the plaintiffs and also took the aid of the fact that the alienees were bona fide purchasers. The suit was thus dismissed. The plaintiffs took up the matter in appeal. The Appellate Court found that since the Benami Transactions (Prohibition) Act has no retrospective effect, it does not SA 67/97 4 affect the pending proceedings. The finding of the Trial Court in that regard was held to be incorrect. However, the lower Appellate Court took the aid of S.41 of the Transfer of Property Act to save the alienations made by the first defendant in favour of other defendants. Aggrieved by the said Judgment and decree, the appellants have preferred this appeal.
7. The substantial questions of law raised in this appeal are as follows :
A. Has not the Lower Appellate Court committed an error of law in its interpretation of the provisions of Section 41 and 52 of the T.P.Act. If so, are the decisions of the courts below sustainable ?
B. Where a person executes a sale deed after his right and possession of the property sold is disputed by persons interested in the property; can the sale be protected by the provisions of Section 41 of T.P.Act. If not, are SA 67/97 5 not the purchases made by defendants 2 to 6 invalid ?
C. Where a transaction is hit by Section 52 of the T.P.Act, can that transaction be saved by Section 41 of the T.P.Act. If not, are not the purchases made by defendants 2 to 6, pending settlement of the rights of the plaintiffs and defendant in OA No.701/1973, hit by Section 52 of the T.P.Act ?
D. Have not the courts below committed an error of law in holding that defendants 2 to 6 or any one of them are bona fide purchaser for valid consideration. Are not the finding therein bad for want of pleading and legal evidence ?
E. On the facts and circumstances of the case, are the decisions of the courts below sustainable ?
SA 67/97 6
8. The learned counsel for the appellants pointed out that the lower Appellate Court was not justified in relying on S.41 of the Transfer of Property Act to come to the aid of the first defendant and his alienees. That provision can have no application to the facts of the case. It was after the passing of the order in the OA that the alienations were made by the first defendant. The appellants herein who were the respondents in the OA had contested the matter. Therefore, it is clear that there was no consent on the part of the plaintiffs for the alienations made by the first defendant. According to the learned counsel, S.41 can have no application to the facts of the case.
9. The learned counsel for the contesting respondents pointed out that it was after due enquiry that the assignees took assignment of the properties of the first defendant and they were bona fide purchasers. So, their interests have to be protected under S.41 of the Transfer of Property Act. The question is whether S.41 can be invoked SA 67/97 7 to save the alienations made by the first defendant.
10. Before going into the above question, one fact may be noticed. In the light of the finding made by the lower Appellate Court, the Benami Transaction (Prohibition) Act can have no application to the facts of the case. It follows that Poovamma was the owner of the property. If that be so, on her death, her rights devolved on the plaintiffs. This fact is not disputed.
11. It is contended that he has no title. The first defendant is in actual possession of the properties and therefore, no reliefs can be granted to the plaintiffs, it is submitted.
12. The above contention is also not correct. In AA No.614/82, which arose from OA No.701/73 filed by the first plaintiff and others, there is a clear finding that the first defendant had never obtained possession of the property. In CRP No.214/1984 filed before this Court, the said finding of the Appellate Authority was confirmed. SA 67/97 8
13. The result is that it has been held that the first defendant has not obtained neither title nor possession of the property by virtue of the benami document in his name.
14. The question that now arises for consideration is whether S.41 can have any application to the facts of this case. S.41 of the Transfer of Property Act reads as follows :
"Transfer by ostensible owner - Where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it ; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith."
SA 67/97 9
In order to invoke Section 41 of the Transfer of Property Act, the transferee must establish that -
(1) the transferor was the ostensible owner of the properties.
(2) the transfer was with the consent express or implied of the real owner.
(3) that the transferee paid considerations. (4) they acted in good faith.
(5) transfer was after taking reasonable care to ascertain that the transferor had power to transfer.
15. A reading of S.41 of the Transfer of Property Act makes it clear that the real owner must have, by his consent express or implied held out the ostensible owner as the owner of the property. If, by words or conduct, he holds out the ostensible owner as the real owner, he cannot question the legality of the Act to the prejudice of those who acted in good faith. In order to create ostensible ownership, the real owner must in some manner, be privy SA 67/97 10 to it. If it is shown that the transferee had an opportunity to know that the real owners were not holding out the ostensible owner as the real owner, they do not get the protection of the provision.
16. The issue has been considered in the decision reported in Gurbaksh Singh v. Nikka Singh (AIR 1963 SC 1917) wherein it was held as follows :
"Section 41 is an exception to the general rule that a person cannot confer a better title than he has. Being an exception, the onus certainly is on the transferor to show that the transferor was the ostensible owner of the property and that he had, after taking reasonable care to ascertain that the transferor had power to make the transfer, acted in good faith.
Where the facts establish beyond doubt that the purchaser had the knowledge that the title of his transferor was in dispute and he had taken a risk in purchasing the same, it is not possible to SA 67/97 11 hold that he had purchased the property in good faith."
17. In the decision reported in Kanchedilal v. Kanhai (AIR 1932 Nagpur 165), it has been held as follows :
"A person cannot be said to be an ostensible owner with the consent of the true owner on the basis of an entry in the revenue papers when the ostensible owner's name was entered in the revenue papers in the face of the opposition of the true owner, and was only entered as he was in possession at the time. A transferee from such person in possession cannot be protected as if he would have taken reasonable care to ascertain the right of the transferor he would have found that the right was contested." SA 67/97 12
18. In the decision reported in Velutha Kunju v. Neelakantan Nair (1950 KLT 23), it is held as follows :
"The learned counsel for the appellant also contended that he is entitled to protection under Section 41 of the Transfer of Property Act. The section reads thus - 'where with the consent, express or implied of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it, provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make transfer, has acted in good faith.' For the application of Section 41, 2 conditions must be satisfied (1) the ostensible owner who has no real title must be clothed with the igsignia of ownership with the consent SA 67/97 13 express or implied of the real owner, (2) the person purchasing for value from the ostensible owner should take reasonable care to ascertain that his transferor has authority to transfer. We have therefore, to see how far the evidence on record helps defendant No.1. The counsel for the appellant contended that mutation has been effected in his favour that plaintiff has not objected to it and that the conduct of the plaintiff must have induced defendant No.1 to believe that defendant No.2 had the power to transfer. PW1 swears that he objected to the mutation as soon as he came to know of it. This apart, we do not think it right to hold in favour of defendant No.1 on the ground that mutation has been effected in his name. We find support for the position we take, in the decision in Khwaja Afzal v. Mohammad Saheb (1936 Nag.214 at
216). The following is the gist of the decision - SA 67/97 14
Where an ostensible owner transfers the property in order to give valid title to the purchaser as against real owner, consideration and good faith alone are not sufficient. He must also establish that he made reasonable enquiries; an entry in the revenue papers in itself is not sufficient to constitute the basis of enquiries.' We have already adverted to the fact that defendant No1 did not get Ext.B sale deed in favour of his vendor defendant No.2 along with his sale deed Ext.I, defendant No.1 when he is examined as PW3, admits that at the time of the execution of Ext.I. The document writer demanded the title deeds and that the 2nd defendant said it was missing.
'...................................'. This apart, if he made an enquiry in the registry office, he could have easily found out the sale deed Ext.A dated SA 67/97 15 2.611.1117 in favour of the plaintiff. The facts aforesaid do not indicate good faith in defendant No.1 There is also the concurrent finding of the lower courts that defendant No.1 did not get possession under Ext.I and that his possession is only through trespass. For the reasons stated above, we do not think that defendant No1 is entitled to any protection under Section 41 of the Transfer of Property Act."
19. In the decision reported in Manikchand v. Gangadhar (AIR 1961 Bombay 288), it is held as follows :
"Mr.Chitale has finally argued that his clients would be protected under Section 41 of the Transfer of Property Act because, according to him, Kesarichand was an ostensible owner during the period that he obtained a decree in his favour in Regular Civil Suit No.1602 of 1947, which was confirmed by the District Court and SA 67/97 16 which only came to be reversed in second Appeal No.1170 of 1953 which was decided on 28th march 1956. Mr. Chitale has also pointed out that during this period, Kesarichand was able to evict the prior tenants of Gangadhar and therefore, so far as the appellants are concerned, they would be entitled to protection under S.41 of the Transfer of Property Act. In the first instance, the appellants being transferees pendente lite cannot take the advantage of section 41. Secondly, in no sense, can Kesarichand be described as an ostensible owner with the consent express or implied of Gangadhar. The appellants, therefore, would not be entitled to protection under S.41 of the Transfer of Property Act, on the ground that they have entered into possession as tenants bona fide without being aware of the rights of Gangadhar. I may point out that though such a SA 67/97 17 contention appears to have been raised in paragraph 3 of the written statement by opponent No.6 Chandulal (Exhibit 40) there was no issue on that point or does it appear that that contention was pressed in the lower court."
20. In the decision reported in Kulameethian Pillai v. Padmanabha Pillai (1956 KLT SN 6 (C.No.14), it is held as follows :
"S.41 applies only if the following conditions are satisfied :- (i) the transferor was the owner of the property with the consent of the persons interested, (ii) the transfer must be for consideration and (iii) the transferee must have acted in good faith after taking reasonable care to ascertain that the transferor had power to make the transfer. As regards the first condition, what the section requires is that the transferor must have become an ostensible owner of the property with the consent, express or implied of SA 67/97 18 the persons interested in the property. The persons interested in the property mentioned in the section are those who are so interested at the time when the transferor becomes the ostensible owner and not those who may be interested in the property at the time when such ostensible owner transfers it."
21. The transactions involved in this case are covered by Exts.B2, B3, B4 and B5. Among these, Exts.B2 and B3 are after the date of passing the orders in OA No.701/1973 and before the filing of the appeal before the Appellate Authority. Exts.B4 and B5 are during the pendency of the appeal before the Appellate Authority.
` 22. One of the essential ingredients to attract S.41 is that the transferee should establish that there was consent express or implied of the plaintiffs who are interested in the property and that they held out the first defendant to be the real owner and acting on that basis, they have entered into the transactions with the first SA 67/97 19 defendant in good faith.
23. It is seen that the appellants herein had specifically disputed the right of the first defendant to get assignment of the property under S.72B of the Kerala Land Reforms Act in the OA filed by the first defendant. They had clearly shown that they have not given consent either express or implied to the first defendant to act as ostensible owner. It is true that the alienees say that they had consulted the lawyer, who advised them that since final orders have been passed in the OA and since no appeal has been filed within the stipulated time, there was no harm in purchasing the property.
24. That is quite different form saying that S.41 applies to the facts of the case. When the OA was opposed by the respondents therein who are the plaintiffs and the appellants herein, it became clear that they were opposing the claim made by the first defendant. Therefore, in the light of the decisions cited above, S.41 can have no application to the facts of the case.
SA 67/97 20
25. The learned counsel appearing for the assignees from the first defendant contended that the tenant could not have surrendered the property to the landlord and so, as on 01.01.1970, the title vests in the State. Therefore, it is submitted that the plaintiffs are not entitled to any relief.
26. Though the argument is attractive, it was never raised before any of the courts below. In fact, the alienees relied on the order in OA in favour of the first defendant. As already noted, the first defendant has been held to have neither possession nor title to the suit property. Therefore, this issue does not arise for consideration.
27. Apart from all the above facts, the alienees of the first defendant had got assignment of the properties before the order in OA No.701/73 had become final. Considering the facts and circumstances of the case, it could not be said that the acts of the alienees from the first defendant were in good faith.
SA 67/97 21
28. It is seen that the first defendant had put up a house in the property during the pendency of the suit. As regards the value of improvements is concerned, the Trial Court has held that the defendants are not entitled to claim any value of improvements. There is no proof regarding the quantum of improvements that is claimed by the plaintiffs. It is therefore, clear that the judgment and decree of the courts below cannot be sustained and the plaintiffs are entitled to succeed in the suit.
29. In the result, this appeal is allowed. The judgment and decree of the courts below are set aside. The plaintiffs are entitled to recover the plaint A schedule property from defendants 1 to 6. Defendants 1 to 6 shall surrender vacant possession of the property to the plaintiffs within three months from the date of this Judgment, failing which, the plaintiffs will be entitled to get recovery of possession through court. Any structure/(s) put up by the SA 67/97 22 first defendant or his alienees may be removed. There will be no order as to costs.
P.BHAVADASAN, JUDGE
sta
SA 67/97 23