Madras High Court
S. Rajavelu vs M.P. Chandrasekaran on 26 February, 2014
Author: G.M. Akbar Ali
Bench: G.M. Akbar Ali
IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 26. 02.2014 CORAM : THE HONOURABLE Mr.JUSTICE G.M. AKBAR ALI Civil Miscellaneous Appeal No.113 of 2013 and MP Nos.1,3 and 4 of 2013 S. Rajavelu .. Appellant vs 1.M.P. Chandrasekaran 2.A. Kulandaivelu ... Respondents Civil Miscellaneous Appeal filed against the judgment and decree dated 17.12.2012 made in R.E.A.No.7 of 2011 in R.E.P No.104 of 2010 in O.S.No.23 of 2010 on the file of Principal District Court, Namakkal. For Appellant : Mr.AR.L. Sundaresan, Senior Counsel for Mr.N. Manokaran For 1st respondent : Mr.T.V. Ramanujam Senior Counsel for Mr.C. Jagadish For 2nd respondent : Mr.R. Subramanian JUDGMENT
Civil Miscellaneous Appeal filed against the judgment and decree dated 17.12.2012 made in R.E.A. No.7 of 2011 in R.E.P No.104 of 2010 in O.S.No.23 of 2010 on the file of Principal District Court, Namakkal.
2. The appellant is a third party, who has filed an application under Order Rule 21 Rule 97 and 99 r/w 151 of CPC making a claim over the suit property, which is the subject matter of an execution petition filed by the first respondent for delivery of possession.
3. The brief facts of the case are as follows:
A property to an extent of 0.37 1/3 cents comprised in old S.F.43/1, New T.S.No.92/2C and 92/2D, Kumarapalayam Village, Namakkal District belong to the Appellant. On 21.3.2003, he executed a registered settlement deed in favour of his mother, Palaniammal. A portion of the property viz., 9000 sq.ft was settled. On 6.9.2007, the Appellant and his mother Palaniammal, jointly executed a sale deed in favour of the second respondent, for a sum of Rs.4,50,000/-. An extent of 0.37 1/3 cents was sold. This comprises in TS No.92/2B, 2C and 2D. A Rectification deed was executed on 12.6.2009 deleting TS No.92/2B as it was irrelevant.
4. According to the Appellant, the Second respondent was not able to sell or develop the property and therefore, requested the appellant to repurchase the property. Therefore, on 14.7.2009, he repurchased the property from the second respondent under a registered sale deed. The sale amount was Rs.4,75,000/-, Rs.25,000/- over and above of the earlier sale consideration. This sale is disputed by the respondents.
5. According to the respondents, on 10.6.2009, the second respondent entered into a sale agreement with the first respondent in respect of 33 cents out of 0.37 1/3 cents in the same survey number.
6. A registered usufructuory mortgage was also created by the second respondent in favour of one Gnana Manikandan on 8.9.2009 for a sum of Rs.20,00,000/-being the mortgage amount for the entire extent.
7. Dispute arose between the appellant and the second respondent regarding the ownership of the property. The appellant filed a suit in OS No.286 of 2009 before the District Munsif Court, Tiruchengode against the second respondent and the said Gnana Manikandan. The suit was filed on 16.11.2009. The suit was filed to declare the usurfructuory mortgage as void and not binding and for consequential permanent injunction. On 1.12.2009, an interim injunction was granted.
8. In the mean time, pursuant to the sale agreement dated 10.6.2009, a suit in OS.No.23 of 2010 was filed on the file of District Court, Namakkal by the first respondent against the second respondent for specific performance of the contract. The suit was filed on 12.2.2010. An ex-parte decree was passed on 28.4.2010. The first respondent filed execution proceedings in E.P.No.58 of 2010 on 16.7.2010. On 16.9.2010, the interim injunction obtained by the appellant in O.S.No.286/2009 was made absolute.
9. On 3.12.2010, the first respondent obtained a sale executed by the Principal District Judge, Namakkal in EP No.58 of 2010. Subsequently, EP No.104 of 2010 was filed by the first respondent for delivery of possession. The appellant, having come to know about such proceedings, has filed EA No.7 of 2011 under Order 21 Rule 97 CPC objecting the delivery and also to set aside an order recording possession. The said EA No.7 of 2011 was dismissed and the parties are before this court on appeal.
10. The main contention of the appellant is that he has repurchased the property by a sale deed dated 14.7.2009 and therefore, the second respondent has no right or title either to mortgage the property to a third party or to enter into a sale agreement with the first respondent and the proceedings initiated by the first respondent was collusive.
11. On the other hand, the stand taken by the second respondent is that what was intended to be conveyed under the sale deed dated 14.7.2009 was only an extent of 4 1/3 cents and not 37 1/3 cents. According to the respondents, there was an error in the survey number in sale deed dated 6.9.2007 and the second respondent approached the appellant to rectify the error. The appellant agreed with a condition that the second respondent should re-convey 4 1/3 cents which was agreed by the second respondent. As agreed, a sale deed was prepared on 14.7.2009 in the presence of the second respondent conveying only 4 1/3 cents. However, the appellant has subsequently inserted another stamp paper as if the entire extent of 37 1/3 cents had been conveyed. According to them, the sale deed dated 14.7.2009 was obtained by fraud and the second appellant is entitled to alienate the property.
12. On this pleadings, the witnesses were examined and documents were marked and the learned Principal District Judge, who was also the Executing Court, dismissed the EA No.7 of 2011 for the following reasons:
(i) Ex.P.31 dated 14.7.2009 was executed to sell an extent of 4 1/3 cents only, and not 37 1/3 cents.
(ii) Serial No.5654 is found missing while preparing Ex.P.31, therefore the sale deed is not a genuine one.
(iii) Original of Ex.P.31 was not produced and it creates doubt. Ex.P.31 is a notary attested Xerox Copy.
(iv) Two witnesses cited in Ex.P.31 were not examined, but R.W.3 who drafted Ex.P.31 deposed against the appellant Rajavel.
Against which, the present appeal.
13. Mr.AR.L. Sundaresan, the learned Senior Counsel appearing for the appellants submitted that the sale dated 14.7.2009 by the second respondent in favour of the appellant was not denied but the only dispute is whether it is for the entire extent of 37 1/3 cents or 4 1/3 cents.
14. The learned Senior Counsel pointed out that the conduct of the respondents would go to show that the sale was effected for the entire extent in favour of the appellant. According to the learned Senior Counsel, after the execution on 14.7.2009, the respondents were trying to grab the property which ended up with police complaint, legal notice, public propagandas and involvement of Chairman of Municipality, Kumarapalayam, which ultimately ended up with filing of the suit by the appellant on 16.11.2009, where injunction was granted. The learned senior counsel wondered if it is the case that in the seventh month the second respondent had sold only 4 1/3 cents, he would not have executed a mortgage for the entire extent of 371/3 cents.
15. The learned Senior counsel also pointed out that by executing an unregistered sale agreement dated 10.6.2009, agreeing to sell only 33 cents to the first respondent, the intention of the respondents is exposed which culminated into filing of suit and obtaining an exparte decree.
16. Yet another point raised by the learned Senior Counsel is that when a sale was registered as early as on 14.7.2009, a mortgage was registered on 8.9.2009 and a suit was pending from 16.11.2009, the first respondent has filed a suit for specific performance without impleading the persons who have interest in the property. Therefore, the decree obtained by fraud is nullified and executing court is wrong in disallowing the claim of the appellant.
17. The learned counsel relied on the following case laws:
(i) 2003 (8) SCC 752 R.V.E. Venkatachala Gounder vs Arulmigu Viswesaraswami & V.P. Temple and Another
(ii) 2009 5 SCC 713 (Vimal Chand Ghevarchand Jain and others vs Ramakant Eknath Jadoo)
(iii) 2011 1 CTC 337 (S.M. Sivasami vs Nagammal and 5 others)
18. On the other hand, Mr.T.V. Ramanujam, learned Senior Counsel for the first respondent would submit that the appellant has failed to produce the original sale deed dated 14.7.2009 before the court and only a Notary attested xerox copy was filed when a series allegation of fraud is alleged against the appellant. According to the learned Senior Counsel, the appellant had purchased the stamp papers of Rs.5000/- denominations and Rs.20/- denominations and all the stamp papers are serially numbered from 5646 to 5658; while typing from sl.no.5646, the description of the property was typed originally stating 4 1/3 cents out of 37 1/3 cents and the portion referring 4 1/3 cents ought to have been in the stamp paper, serialised as 5654, but what is available is only Sl.No.5655. There is no explanation for the missing of Sl.No.5654 which is according to the respondents, the appellant has clandestinely replaced only to show that the entire extent has been sold. The learned Senior Counsel pointed out that when an extent of 4 1/3 cents was alone sold to the appellant by the respondent, the second respondent is entitled to enter into a sale agreement with the first respondent for the remaining 33 cents and accordingly, for a non performance of a contract, a suit for specific performance was filed and decreed. The learned counsel pointed out that the executing court had analysed the evidence and found the fraud played by the appellant and dismissed the claim petition.
19. The learned Senior counsel further pointed out that when a claim is made under Order 21 Rule 97 of CPC, the appellant has to prove his title and he cannot find fault with the respondents' title. The learned senior counsel further pointed out that the appellant has also not produced the original sale deed as best evidence and whereas, the respondents have examined the scribe to prove that the appellant had taken away the stamp paper which contained the correct extent and inserted the present stamp paper as if the entire extent has been sold.
20. The learned Senior counsel relied on the following case laws:
(i) 1999 (4) SCC 350, (Arumugham (dead) by Lrs and others vs Sundarambal and another)
(ii) 95 LW 708 (P. Thangavelu vs R. Dhanalakshmi Ammal and other,
(iii) 2002 3 CTC 462 (Kumari Anandan vs Dr.T. Balamukunda Rao ((died) and 3 others
(iv) 2011 (1) LW 647 (Munusamy and 4 others vs Vengadachalam and 10 others
21. Mr.R. Subramaniam, learned counsel for the second respondent would submit that the appellant had played fraud while purchasing the property and also pointed out that the sale consideration for 37 1/3 cents of land was shown only as Rs.4,75,000/- when the value of the property in 2009 was much more higher. He also pointed out that the appellant has not produced the unspent stamp paper which would have proved that Sl.No.5654 was replaced by the next serial number.
22. Heard and perused the materials available on record.
23. The dispute revolves upon the sale deed dated 14.7.2009. Though a point was raised that the appellant has failed to produce the original sale deed, pending appeal, he has filed a petition in MP No.4/2013, producing the original sale deed. The explanation given is that the document was impounded by the registering authorities and only on filing of the writ petition, the same was released and therefore, filed as an additional document under Order 41 Rule 27 CPC.
24. Whether an original document or attested copy was produced, the dispute is that the appellant claims that the second respondent has sold the entire 37 1/3 cents under this document. On the contrary, the claim of the respondents is that what was intended to sell was 4 1/3 cents, however, the appellant has played fraud in removing one stamp paper from the document and inserted the present stamp paper which gives an effect as if the entire extent has been sold and thereby, it is not a genuine sale deed.
25. To understand the dispute precisely, it is relevant to refer the evidence of the record keeper of the Sub Registrar Office,Erode, who was examined as R.W.4. According to him, on 13.7.2009, six numbers of Rs.5000/- denominations stamp papers and 7 numbers of Rs.20/- denominations stamp papers were sold. Stamp papers of Rs.5000/-denominations were serialised from 5646 to 5651 and Rs.20/-denominations were serialised from 5652 to 5658. All the Rs.5000/-denominations stamp papers were used which are page from 1 to 6 in the sale deed dt.14.09.2009. Sl.no. 5652 of Rs.20/- denomination starts from page 7. Page 8 contains the description of the property which is typed in serial no.5653. Page 9 is the continuation of the description and page No.10 is the last page which contains the signatures of the parties and witnesses and their scribe.
26. However, after page No.8 in sl.no.5653, page no.9 should be on the stamp paper of sl.no.5654. But what is available is sl.no.5655. Page 8 reads as follows:
brhj;J tpguk;
ehkf;fy; gjpt[ khtl;lk; Jiz gjpt[ tl;lk; jpUr;br';nfhL tl;lk; bfhkhughisak; mf;fputwhuk; fpuhkk; igkhc&; bek;gh; 9 fe;jtl;lhd;jhh; g{kp giHa rh;nt bek;gh; 43-1 ,jpy; efusit go Ward B.Block.51.T.S.No.92/2C.2Dy; brhj;Jf;F brf;Fge;jp 30yp';!; mfy bjd;tly; bry;Yk; bghJ tz;o ghijf;Fk; (fpHf;F) fU:h; uh$uj;jpdk; g{kpf;Fk; (bjw;F) v!;/uh$ntY g{kpf;Fk; (tlf;F) n$/nf/nf/tifawhtpw;w g{kpf;Fk; (nkw;F) ,jd; kj;jpapYs;s g[/V/0/37/1-3 tptrha g{kp page 9 starts as follows:
g{uht[k; igkhc&; bek;gh; tplg;gl;Ls;s rfy bghJ tz;o ghijapYk; nkw;go brhj;Jf;F Ml;fs; nghf tut[k; fhy;eilfs; tz;o thfd';fs; Xl;of; bfhz;L nghf tut[k; bghJ jl el nuhL ghj;jpa';fSk; rfy <!;bkz;L ghj;jpa';fs;; rfpjKk; nrh;e;J fpuak;/ ic& brhj;J bfhkhughisak; efuhl;rp vy;iyf;Fs; giHa thh;L 1 g[J thh;L 5 thRfp efhpy; cs;sJ/ ic& brhj;jpid fpuak; bgWk; jpU/v!;/uh$ntY ,d;nw RthjPdk; bgw;W ,g;gj;jpuj;jpy; ifbaGj;J bra;Js;shh;/ ic& epyj;jpy;//////////
27. However, according to respondents, after the last line in page No.8 which ends up with ,jd; kj;jpapYs;s g[.V 0.37 1/3 tptrha g{kp and the next sentence at page 9 should start with apy; 4 1/3 rdl and continued by the rest of the recitals in page 9. This page has been allegedly replaced by the appellant and the present page starts g{uht[k; - meaning the entire extent of 37 1/3 cents. The scribe was examined as R.W.5 on the side of the respondents. According to him, on 14.7.2009, the appellant came to his office and produced six 5000/-denomination stamp papers and four Rs.20/-denomination stamp papers and requested to type a sale deed for an extent of 4 1/3 cents and he typed accordingly. He further states that the appellant and the second respondent were discussing about the mode of payment and went to the adjacent room and after half an hour, appellant alone came and told him that the sale is for the entire 37 1/3 cents and gave a stamp paper and he accordingly, typed the present page No.9.
28. The appellant has not examined any person to speak about the execution of the sale deed though, there were two attesting witnesses. He has also not produced either sl.No.5654 or the remaining stamp papers of sl.no. 5657 and 5658.
29. The non-examination of the witnesses to the document coupled with non production of the remaining stamp papers had created a strong doubt in the mind of the trial court which is now also advocated before this court.
30. In 1999 (4) SCC 350, (Arumugham (dead) by Lrs and others vs Sundarambal and another) the Hon'ble Supreme Court has held as follows:
16. On the question of burden of proof we are of the view that even assuming that burden of proof is relevant in the context of the amended provision of Section 100 CPC, the same would not be relevant when both sides had adduced evidence. It would be relevant only if a person on whom the burden of proof lay failed to adduce any evidence altogether.
31. In 95 LW 708 (P. Thangavelu vs R. Dhanalakshmi Ammal and other, the Division Bench of this Court held that 32. .... We do not, therefore, see any need to go into the further question whether the executors had ceased to be executors and had become trustees and whether the Probate Court could go into the question of title in the proceedings before it. The plaintiff can succeed in the suit for declaration under the plaint as amended only on the basis of a valid title to the property. If he did not have any title to the property, then he cannot pick holes in the title of the defendants and try to succeed. That the plaintiff can succeed only on the basis of the proof of his own allegation in the plaint as regards his title and he cannot succeed by picking holes in the title of the defendants is too well established to need citation of any authority. The plaintiff having failed to make out a case of valid title to the suit property cannot succeed in getting a declaration as prayed for in the plaint. The suit was rightly dismissed by the trial court, and the confirmation of the decree by this Court cannot be open to any interference.
32. In 2002 3 CTC 462 (Kumari Anandan vs Dr.T. Balamukunda Rao ((died) and 3 others ) the Division Bench of this Court held 23. However viewed, the evidence offered by the plaintiff in support of his case is not credible and the plaintiff cannot merely on the strength of some contradictions in the defendants' case deprive the defendants of a valuable property in the heart of the city of Madras, which today is worth several millions. So far as the second defendant is concerned it is abundantly clear that he had, at no point of time, authorised his brother to sell his share to the plaintiff. The plaintiff who has asserted that the first defendant had such authority has not produced any document to substantiate the assertion.
33. In 2011 (1) LW 647 (Munusamy and 4 others vs Vengadachalam and 10 others), the learned Single Judge of this court held that in a proceedings under Order 21 Rule 97, before questioning the validity of the decree obtained by the decree holder, the obstructor has to prove that he has got an enforceable right or interest in the property.
34. As stated earlier, the execution of the sale deed dated 14.7.2009 is not in dispute. What was in dispute is the extent of land sold. Since the respondents have disputed a registered document, the onus is upon them to prove that there was fraud played on them.
35. In 2009 5 SCC 713 (Vimal Chand Ghevarchand Jain and others vs Ramakant Eknath Jadoo)the Hon'ble Supreme Court held 22. The deed of sale being a registered one and apparently containing stipulations of transfer of right, title and interest by the vendor in favour of the vendee, the onus of proof was upon the defendant to show that the said deed was, in fact, not executed or otherwise does not reflect the true nature of transaction.
36. 2011 1 CTC 337 (S.M. Sivasami vs Nagammal and 5 others) a Division Bench of this court (where I am also a party) has held 14. Section 91 and 92 of Indian Evidence Act completely bars any party to set up a case that consideration for a sale is more than what is mentioned in the conveyance or in the contract. Evidence cannot be admitted to vary the provisions of the sale and as to the amount fixed as consideration i.e.,, where the price as fixed in the Sale Deed (Ex.A.7) is Rs.4,000/- oral evidence to the effect that the consideration was really Rs.50,000/- cannot be given.
37. 2009 5 LW 883 (M.B. Subramaniam vs A. Ramasamy Gounder and Others), a learned single Judge of this court held,
14. These averments unmistakably indicate conveying of title to the property absolutely for consideration as outlined; by virtue of the sale, the purchasers were put in possession of the property conveyed, became entitled to the custody of the sale deed and other documents and enjoyment of the property. These factors satisfy all the requirements of absolute sale. No recital in Exhibit C is brought to our notice to indicate any contra-intention. What is, however, argued is that out of the consideration, a sum of Rs. 3235 remained unpaid; that the mortgage loan under Sudhbharna Bond dated 29-7-1946 was not discharged and that the registration receipt was retained by the vendors so it is manifest that the intention of the parties was that the title would not pass to the purchaser on execution and registration of Exhibit C. We are not impressed by this submission. It appears that in the State of Bihar, a practice is prevalent that when the whole or part of a sale consideration is due or any other obligation is undertaken by the vendee, then on execution and registration of the sale deed by the vendor, title to the property, the subject-matter of the sale, does not pass ta khubzul badlain, that is, until there is exchange of equivalent and in such a case registration receipt is retained by the vendor, which on payment of consideration due or on fulfilment of the obligation by the vendee is endorsed in his favour or if the sale deed has already been received by the vendor, then the sale deed is delivered to the vendee. Even so, this only shows that such agreements are common in that part of the country but it is essentially a matter of intention of the parties which has to be gathered from the document itself but if the document is ambiguous, then from the attending circumstances, subject to the provisions of Section 92 of the Evidence Act.
38. Therefore, the burden is upon the second respondent to prove what was intended to be sold was only 4 1/3 cents and the appellant has played a fraud without their knowledge.
39. The evidence of the scribe has to be weighed. First of all, the scribe has not endorsed his name or his signature in the disputed document. In fact, an endorsement is made to the effect as if it is prepared by the vendor and the second respondent has signed. An attempt was made while cross examining the appellant that R.W.5 was the scribe who typed the disputed document. But he has denied the suggestion. According to him, the vendor has prepared and typed the document.
40. At the outset, the evidence of R.W.5 is unworthy.
41. As far as the non production of Sl.No.5654 is concerned, there cannot be any presumption in favour of the respondents. The learned Senior counsel who appeared for the appellant pointed out that the last page of the document viz., page No.10 was typed in sl.no.5656 and therefore, the balance sheets will be sl.nos.5657 and 5658. Had it been the position that page no.9 has been typed in 5654 and page no.10 has been typed in sl.no.5655, the remaining sheets would be 5656, 5657 and 5658. Since the allegation is the removal of sl.no.5654, it should have been replaced by any one of the stamp papers which bears the sl.no.5656, 5657 and 5658 and not by sl.no.5655 because that would have already typed for page no.10.
42. There is a force in the argument of the learned Senior counsel. According to the second respondent, who was examined as R.W.3 and the scribe, examined as R.W.5, the appellant had handed over 4 nos of Rs.20/- denomination stamp papers and the sale deed was typed for the sale of 4 1/3 cents. This 4 1/3 cents was typed in page no.9. The appellant returned back to the scribe and asked him to prepare a sale deed for the entire extent and according to the respondents, page No.9 was replaced . That being so, it should have been replaced only by sl.no.5656 or 5657 or 5658 and not by 5655 which is disputed now.
43. Yet another point was raised stating that the value of extent 37 1/3 was much higher than the value shown at Rs.4,80,000/- in the document. In other words, it is stated that what was agreed to be sold was only 4 1/3 cents for total consideration of 4,80,000/-.
44. It is to be noted that the scribe was cross examined at this point and he would state that when the extent was changed to 37 1/3 cents he has not pointed out that the value has to be added accordingly. In any event, the document has also been registered. If the property is under valued, it is for the Registration Department to proceed.
45. Admittedly, a registered mortgage was created on 8.9.2009. This document would show that the total extent is 37 1/3 cents. If it is true that the first respondent had intended to sell only 4 1/3 cents on 14.7.2009 and subsequent to that, he would have encumbered only 33 cents and not the entire extent.
46. It is on evidence that after execution of the disputed sale deed on 14.7.2009 the parties are in loggerhead and allegations and counter allegations of cheating has been traded against each other and in any event, the conduct of the second respondent creating a mortgage on 8.9.2009 and the first respondent filing a suit for specific performance on the strength of a sale agreement without adding the mortgagee or the appellant as party would show that the second respondent has taken a quixotic method of settling the score. The conduct of the parties both the appellant and the respondent would show that there should have been clandestine transactions between the parties and all these execution of the documents, cancellations, re-conveyance, mortgage, sale agreement are only to secure the clandestine transactions between the parties. The second respondent seems to be the person to be blamed.
47. Obtaining a sale deed in pursuance to decree in a suit for specific performance is no doubt a valid title but subject to the title possessed by the vendor. It is well settled that any transaction prior to a suit for specific performance is not hit by lis pendens and the transaction done during the proceedings alone is affected by the doctrine of lis pendens.
48. In a suit for specific performance, whether the subsequent purchaser to the agreement is a necessary party was considered by the Hon'ble Supreme court in many judgments. Sec.19(b) of the Specific relief act provides that specific performance of a contract may be enforced against any person claiming under the defendant by the title arising subsequently to the contract except a transferee for value who has paid his money in good faith and without notice of the original contract. In (2013 (5) SCC 397 (Thomson Press (India) Ltd vs Nanak Builders & Investors P.Ltd. & Others the Hon'ble supreme Court held, The second aspect which the proposed judgment succinctly deals with is the effect of a sale pendete lite. The legal position in this regard is also fairly well settled. A transfer pendete lite is not illegal ipso jure but remains subservient to the pending litigation. In Nagubai Ammal & Ors. v. B. Shama Rao & Ors. AIR 1856 SC 593, this Court while interpreting Section 52 of the Transfer of Property Act observed:
The words so as to affect the rights of any other party thereto under any decree or order which may be made therein", make it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order. It is in this view that transfers pendente lite have been held to be valid and operative as between the parties thereto. To the same effect is the decision of this Court in Vinod Seth v. Devinder Bajaj (2010) 8 SCC 1 where this Court held that Section 52 does not render transfers affected during the pendency of the suit void but only render such transfers subservient to the rights as may be eventually determined by the Court. The following passage in this regard is apposite:
42. It is well settled that the doctrine of lis pendens does not annul the conveyance by a party to the suit, but only renders it subservient to the rights of the other parties to the litigation. Section 52 will not therefore render a transaction relating to the suit property during the pendency of the suit void but render the transfer inoperative insofar as the other parties to the suit. Transfer of any right, title or interest in the suit property or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit. The decision of this Court in A. Nawab John & Ors. v. V.N. Subramanyam (2012) 7 SCC 738 is a recent reminder of the principle of law enunciated in the earlier decisions. This Court in that case summed up the legal position thus:
18 ..The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court.
49. The legal principles would show that any transfer pending proceedings, is subject to the result of the suit, except a transfer prior to the suit, but, subsequent to the contract. Under section 19(b) of the Specific Relief Act, the transferee has a right to establish his bonafide. When the vendors title has already been passed on to a transferee prior to suit, the court cannot again direct the vendor to execute a sale in favour of the agreement holder, but can direct the transferee to be a party in executing such sale. Therefore, the transferee, either before lis or during lis, is a necessary party for an effective decree.
50. In the case on hand, the first respondent cannot plead ignorance of the earlier transfer by a registered sale deed and an encumbrance by way of mortgage over the suit property. When a transferee has a valid title, which is obtained prior to suit, and when he was also not made as a party, his title is a good title against the title obtained in pursuance to the specific performance of the contract as the sale is directed to be effected by a party who has already passed the title to a third party.
51. The only claim of the respondent is that the sale deed dated 14.7.2009 is obtained by fraud and when it is not proved, then the purchaser's title becomes absolute. Even assuming, the sale agreement dated 10.6.2009 between the respondents, is true and genuine, the decree obtained by the first respondent without making the appellant as a party is not binding on the appellant. The four reasons given by the executing court can not be sustained. Therefore, the claim of the appellant under order 21 Rule 97 is proved and the order of the executing court is liable to be set aside.
52. In the result, Civil Miscellaneous Appeal is allowed and R.E.A No.7 of 2011 is allowed. No costs. Consequently connected MP is closed.
02.2014 Index:yes website:yes To Principal District Court, Namakkal.
G.M. AKBAR ALI,J., sr Pre-Delivery Judgment in CMA No.113 of 2013 26-02-2014