Karnataka High Court
Smt H Lalitamma W/O Veema Reddi vs V Venkateshul S/O Late V Mareppa on 19 August, 2014
R
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
Dated this the 19th day of August, 2014
Before
THE HON'BLE MR JUSTICE HULUVADI G RAMESH
Regular Second Appeals 5244 / 2010 c/w Cross Objection 54
/ 2010 c/w 5249 / 2010
Between
In RSA 5244/2010
1 Smt H Lalithamma, 40 yrs
W/o Vema Reddi
2 Vemareddi, 50 yrs
S/o Veerabhadragouda
Attender in Engineering College
Both are R/o # 131, LIG, KHB Colony
Netaji Nagar, Bellary Appellants
(By Sri V P Kulkarni, Adv.)
And
V Venkateshulu, 60 yrs
S/o late V Mareppa
Ex-Driver of KSRTC & Mine Owner
R/o Plot # 4, Veeraanna Gowda Colony
Near Bellary Club, Cantonment, Bellary Respondent
(By Sri B S Kamate, Adv.)
2
In Cross Objection 54/2010
V Venkateshulu, 60 yrs
S/o late V Mareppa
Ex-Driver of KSRTC & Mine Owner
R/o Plot # 4, Veeraanna Gowda Colony
Near Bellary Club, Cantonment
Bellary Cross Objector
(By Sri B S Kamate, Adv.)
And
1 Vemareddi, 50 yrs
S/o Veerabhadragouda
Attender in Engineering College
2 Smt H Lalithamma, 40 yrs
W/o Vema Reddi
Both are R/o # 131, LIG, KHB Colony
Netaji Nagar, Bellary Respondents
(By Sri V P Kulkarni, Adv.)
In RSA 5249/2010
Smt H Lalithamma, 40 yrs
W/o Vema Reddi
R/o # 131, LIG, KHB Colony
Netaji Nagar, Bellary Appellant
(By Sri V P Kulkarni, Adv.)
3
And
V Venkateshulu, 60 yrs
S/o late V Mareppa
Ex-Driver of KSRTC & Mine Owner
R/o Plot # 4, Veeraanna Gowda Colony
Near Bellary Club, Cantonment
Bellary Respondent
(By Sri B S Kamate, Adv.)
Second 10.2.2010 in RA 134/2008 and RA 133/2008 by the
Fast Track Court Appeals are filed under S.100, CPC praying to set
aside the judgment dated II, Bellary
Cross Objection is filed under O 41 R 22, CPC praying to set
aside the judgment dated 10.2.2010 in RA 134/2008 so far as it relates
to ordering refund of consideration amount plus the installments paid
to KHB and the interest amount to 2nd respondent, etc.
Second Appeals & Cross Objection coming on for hearing this
day, the Court delivered the following:
JUDGMENT
These two appeals and cross objection arise out of the order passed by the Fast Track Court, Bellary in RA 133/2008 and 134/2008 which arises out of the common order passed by the II Addl. Civil Judge, (Sr.Dvn.), Bellary in OS 97/2005 and 420/2005. Parties are 4 referred to as per the reference made in this appeal as appellants and respondent.
Respondent Venkateshulu/plaintiff has filed cross objection 54/2010 in RSA 5244/2010. Two appeals are filed by the appellants who is the agreement holder in respect of the suit property which is said to be a house which was allotted to the respondent. Initial deposit of Rs.5,000/- was to be paid and thereafter the agreed installments to be paid by the lessee/purchaser i.e., the respondent. It appears, after allotment in favour of the respondent by the Karnataka Housing Board (KHB for short) way back in the year 1989, there was an agreement entered into between the plaintiff and the defendant i.e., appellant and the respondent. Appellant / Lalithamma filed a suit for specific performance in OS 420/2005 subsequently on filing of the suit for declaration and possession by the respondent/plaintiff in OS 97/2005. According to the appellant, in respect of the house property which was allotted in favour of the respondent by the KHB, as the respondent was a driver in profession he could not take care of the property and also to stay in the house, appellant having paid a consideration of 5 Rs.9,000/- to the respondent, having occupied the property went on paying the installments till conclusion. However, the case of the respondent is, he was paying the installments, there is also an admission of the husband of the appellant herself in some other proceedings with respect to payment of installments in the suit filed by this respondent against some other person for injunction. Accordingly, stating that it is the respondent who has paid the installments and accordingly, after completion of the period of non- alienation, though a sale agreement was executed, after the year 2000 (date of last installment paid), this appellant ought to have come and got executed the sale deed within three years thereafter. However, she filed a suit for specific performance in the year 2005 as such, the suit is not maintainable. With this contention, defendant filed written statement in OS 420/2005. In OS 97/2005 the stand of the respondent is, since he was moving from place to place, he had given possession of the property on such execution of the sale deed by the KHB on payment of last installment. When he filed a suit for declaration and possession, as a counter blast appellant has filed a suit for specific performance. Both the courts below having held that suit is barred by 6 limitation, dismissed the suit of the plaintiff/appellant and decreed the suit filed by the respondent.
The suit filed by the appellant herein for specific performance and also the suit filed for declaration before the trial court, both were clubbed together and thereafter evidence was let in. Referring to various decisions of the Apex Court and also the legal position, the trial court although held that appellant is in possession of the suit property but on the point of limitation, non-suited this appellant and ordered for declaration and for delivery of possession in favour of the respondent.
As per the finding of the courts below regarding possession is concerned, it is held to be in possession of this appellant. So far as payment of installments is concerned, as per the contention of the respondent - cross objector, it is he who paid as is admitted by the husband of the appellant herself as such, admitted fact need not be proved even though it is in a different proceeding and accordingly contended, the finding of both the courts below regarding payment of 7 installments has to be reversed. With these pleadings, parties are before this Court.
The finding of both the courts below in respect of possession is, it is in the hands of the appellant and it is also the case of the respondent that appellant has been given possession by virtue of the agreement entered into during 1989. Now the agreement forms the basis to hold when cause of action arises and when limitation commences and whether suit filed by the appellant is on time as per the terms of the contract.
It appears, this respondent is a man belonging to schedule caste. Also, according to the stand taken by the appellant, she filed the suit within the period of limitation as per the definition of Art.54 of the Limitation Act. On the other hand, stand taken by the respondent is, in the year 2000 sale agreement has been executed and thereafter, the appellant ought to have got the sale deed executed in stead, she filed a suit in the year 2005 that too after the respondent filed a suit for 8 declaration and for possession. Both the parties have relied upon the decision of the Apex Court to stand by their contentions.
The contention of the appellant herein is, filing of the suit is very much within the period of limitation as per the terms of the agreement and that has to be taken into consideration and the agreement also provides for non-alienation clause. Execution of the sale deed in favour of the appellant comes into effect only after completion of 180 months as is provided in clause 3 of the agreement. According to the respondent, as per the terms of the contract, it is from the date of execution of the sale agreement within two years sale deed ought to have been executed under Art..54 of the Limitation Act. Since she has not come forward to get the sale deed executed within three years, both the courts below in a concurrent finding have decided the case against the appellant. It appears, the finding rendered by the trial court is based on some of the documents produced which favours the respondent i.e., installments being paid by the appellant / plaintiff in OS 420/2005. Of course, this is a matter of interpretation as to the evidence let in by the husband of the plaintiff in a separate proceeding. 9
The substantial questions of law that arise for consideration are Whether both the courts below are justified in holding that suit is barred by limitation as against the recitals in the agreement; Whether the payment of installments/premium is by the appellant and the consequence of it ;
Whether S.20 of the Specific Relief Act favours the appellant in view of the concurrent finding rendered by both the courts below regarding payment of installments by the appellant is concerned.
Heard the counsel representing the parties.
It appears plaintiff and defendants (in OS 420/2005) are family friends . There is allotment of house by the KHB in favour of the respondent who in turn has entered into an agreement in the year 1989 with the appellant with a specific understanding that the advance of Rs.9,000/- has to be paid by the appellant to the respondent as consideration also subject to the condition that the appellant shall go on pay the installments while occupying the suit property. With this agreement/condition, parties also entered trial and both the courts 10 below favoured this appellant so far as possession and payment of installment is concerned. The argument advanced on behalf of the respondent regarding payment of installment is concerned is, might be there is an admission but the fact remains that in view of the documentary evidence produced by the appellant themselves before the courts below, the documentary evidence prevails over other evidence. Might be there is admission in some context in the suit filed by the respondent against a third person/neighbor, for injunction as there was encroachment, to defend the case. It appears respondent who was the plaintiff in the suit for injunction would have deposed in such a fashion to support the case of the respondent in a separate suit. This probabilises the fact that respondent was paying installments as the stand of the respondent has been disputed by the fact of producing all the receipts. Both the courts below are shown to have properly appreciated the material on record in view of the documentary evidence produced to stand by the case of the plaintiff as to the occupation of the property and also payment of installments towards clearance of the arrears/monthly installments to the KHB. So the payment of consideration is not by the respondent but it is by the 11 appellant/plaintiff. Now the consideration is being passed on though it is by the plaintiff on behalf of the respondent as per the agreement. This is a specific case of agreement entered into between the parties with an imperfect title. Respondent had only imperfect title. As per the Regulations of the KHB, sale deed has to be executed after payment of last installment after ten years. Under Regulation 14 of the KHB Regulations the site/house allotted shall not be conveyed or alienated by sale, transfer, mortgage, gift or otherwise by the allottee for a period of ten years and during that period, even if he pays the amount much earlier i.e., the entire sale consideration is paid by the allottee as a lessee much in advance before 10 years, the right of the lessee/purchaser is in the form of a lease cum sale. If the execution of the sale agreement initially is by way of lease cum sale, sale deed will be executed after ten years. As per the events during 1989 this deed has been signed in favour of the respondent by the KHB. It appears something would have transpired between the appellant and the respondent though as friends, having conveyed title. Either because of misunderstanding or reasons known to them, dispute arose between them and the plaintiff sought for a declaration and possession in 12 respect of suit properties on the ground that the sale deed was executed to him by the KHB in the year 2000 itself and this appellant did not come forward to get the sale deed executed. Despite the fact there were certain documents between the appellant and the respondent, taking a stand that appellant is only a licensee to continue in possession and also he paid the installments, accordingly the courts below sought to declare that he is the person entitled for possession and also he is the title holder in view of the very admission of the husband of the plaintiff in OS 420/2005 as regards payment of installments is concerned. Of course, this aspect has been negated by the courts below. However, both the courts below tried to favour this respondent taking into consideration the date of execution of the sale deed i.e., during 2000 stating that suit was filed for specific performance by the appellant way back in the year 2005 i.e., after lapse of three years of limitation as per Art..54 of the Limitation Act and that suit is barred by limitation. As against this, these second appeals.
13
Now we are dealing with the interpretation of the contents of the agreement as well as the provisions of the Limitation Act. What is being noted is, there is a specific clause mentioned in the agreement entered into between the appellant and the respondent - one is, sale deed would be executed in favour of the appellant by the respondent soon after he gets the sale deed executed from the KHB. Further, in the lease cum agreement in fravour of the respondent by the KHB at Ex.P1, under clause 1 the lessee/purchaser is put in possession of the property and the lessee purchaser shall occupy the same as a lessee thereon for a period of 180 months from 3.6.1989 or in the event of the total cost as finally determined by the Board being paid in a shorter period for a period of 120 months. All the amounts paid by the lessee towards the price of the property shall during the period of lease be held by the lessor as security for due performance of terms and conditions of this agreement. In clause (3) it is specifically stated that lessee has no right to alienate the property or create any encumbrance of charge thereon whatsoever or otherwise dispose of the property during the period of lease/purchase and the lessee shall not be entitled to claim title thereto until full value of the property 14 inclusive of interest thereon is paid and the property duly conveyed to him.
The agreement executed by the lessee in favour of the respondent originally was in the form of lease for a period 180 months and in the case on hand, as per the events, sale deed was executed in favour of the respondent on completion of 120 months i.e., during 2000 the sale deed was got executed as such, limitation starts from 2000 within a period of three years as per S.54 of the Limitation Act . According to the plaintiff in OS 97/2005, appellant did not exercise this right to get the sale deed executed much less the suit filed by her is beyond the period of limitation. Accordingly, both the courts have held that the suit is barred by limitation and also it is his submission that the period of 180 months mentioned is the outer limit before which already sale deed was executed in favour of the plaintiff during 2000 itself by the KHB. . The appellant did not come forward to get the sale deed executed as such, it is barred by limitation and question of outer limit of 180 months for lease would not remain as a 15 condition to extend the time of limitation in so far as getting the sale deed executed is concerned.
Per contra, counsel for the appellant submitted that the lease period would continue up to 180 months even though the sale deed is executed during 2000. Also he submitted, as per the admission of PW 1 himself, non-alienation clause is provided as per the stipulation in the agreement between the KHB and himself which is for a period of 180 months. Accordingly, it is submitted execution of the sale deed much earlier to it is of no consequence rather as per the understanding between the appellant and the respondent in a separate agreement for sale i.e., after completion of 180 months only he is entitled to get the sale deed executed and not during the period of non-alienation as is provided by the agreement between the lessor and the lessee - KHB and the respondent and in such an event, it was a voidable/void contract at the option of the lessor as such, that period also should be reckoned for the purpose of limitation and accordingly, sought to contend that even the three judges bench of the Apex Court in Civil Appeal 4190/2001 has referred the matter to a larger bench to 16 determine the issue of commencement of limitation and as to mentioning of the word 'date' in the Limitation Act. As per Art..54 to the Schedule of the Limitation Act reference has been made regarding the word 'date' as the specific date to be mentioned and accordingly contended that period has to be reckoned after completion of 180 months to determine the lease and, execution of the sale deed much prior to that is inconsequential and limitation has to be calculated after the expiry of the non-alienation period and not from the date of execution of the sale deed by the lessor to the lessee.
As per S.43 of the Transfer of Property Act, the transaction entered into between the appellant and the respondent is with an imperfect title. When the title of the respondent is perfected the agreement holder can file a suit for specific performance. Since the sale deed is executed in the year 2000 in favour of the respondent by the Karnataka Housing Board and thereafter since also there was a non-alienation clause provided in the agreement itself by the lessor, the suit filed by the appellant is within three years of the expiry of fifteen years, also from the date of lease of the property as per the 17 condition stipulated in the lease deed and when the entire amount of sale consideration is paid by the appellant on behalf of the respondent and also the respondent having parted possession by virtue of the subsequent agreement with an imperfect title in favour of the appellant, then he cannot take a U turn and say that contract is not enforceable and that the suit is hit by limitation.
Now the pertinent question to be answered is regarding commencement of point of limitation whether it is from the date of execution of the sale deed as per the interpretation between the KHB and the respondent and that forms the basis to create alienable interest in favour of the respondent to execute the absolute sale deed without there being encumbrance or any condition being imposed. In the case on hand what is being stated in clause 1 of the agreement between the lessor and the lessee is with respect to the period of 180 months and also the non-alienation clause. Might be the sale deed would be executed in the beginning in favour of the respondent/lessee from the KHB immediately after completion of 120 months or ten years but further more with regard to non-alienation of the property is 18 concerned, the intentment of the legislation has to be interpreted as a strict interpretation at times. The very intenment of the legislation is to provide houses to the houseless persons, with that view when houses are allotted to persons on priority bass to eligible persons, it was intended that property be enjoyed by the lessee for a period of fifteen years. Of course, it is not as if it is to be enjoyed for a life time or for ever even after the sale deed is executed in favour of the lessee. But at times there would be difficulty for the lessee or some other contingency would be there or for some other reason he intends to dispose of the property. The intentment of the legislation has to be taken note of as to why such a condition was imposed. In respect of similar social legislation especially in case of grant of land in favour of SC/ST persons by the government, specific provision is imposed as period of non-alienation to overcome the intentment to see that property so allotted for the benefit of person should not be abused or misused by way of alienating the property. Such conditions are imposed as a reasonable restraint and also it is mandated that the very alienation prior to completion of non-alienation period and such transactions are deemed to be void and any such transaction if it has 19 taken place, necessarily becomes a void transaction and that sale also will not confer title on the purchaser of the property even if it is purchased at the instance of the lessee himself so as to enable to get back the property by way of getting the sale deed declared as being null and void in view of the non-alienation clause. Here, whether the limitation commences immediately after the sale deed is executed in favour of the lessee respondent or whether as is provided in the lease agreement between the KHB and the respondent herein as lessee, and there is also a clause that during the period of 180 months there shall not be alienation - this, according to my opinion, has to be the date to be reckoned for the period of alienation that is, after completion of 180 months and thereafter, if the suit is not filed for specific performance and if the appellant did not get the sale deed executed then of course, it would be observed as suit is barred by limitation but in the context, the very intention of the legislature and the purpose for which the KHB has allotted the property in favour of the respondent is that the allottee/lessee could enjoy the property for a period of fifteen years though sale deed is executed in his favour much earlier. In that context, it has to be held that the finding of both the courts 20 below on the point of limitation is perverse and without understanding the entire gamut of the case and also the condition imposed by the Housing Board on the lessee/respondent against whom there was a condition of restraint not to alienate the property. In that view of the matter, while exercising discretion under S.20 of the Specific Relief Act, the appeals filed by the appellant has to be allowed, also in view of the fact it is concurrently held by the courts below based on the documentary evidence produced by the appellant as to payment of installments is concerned, that also has to be held in favour of the appellant and respondent has to be non-suited. To meet out the ends of justice and equity, appellant shall pay a sum of Rs.2 lakhs to the respondent within six months and the respondent shall execute the sale deed since he has perfected his title and also the period of non- alienation i.e., 180 months is over as on today.
Accordingly, the substantial questions of law are answered. Both the appeals are allowed. The suit filed by the plaintiff in OS 420/2005 is decreed directing the respondent to execute to sale deed 21 in favour of the plaintiff/appellant. The cross-objection filed is dismissed.
Sd/-
Judge An