IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.07.2008 C O R A M THE HONOURABLE MR.JUSTICE G.RAJASURIA A.S.No.359 of 1993 S.K.Anwerjan .. Appellant Vs. 1. C.Leelavathi 2. C.Srinivasa Rao (Died) .. Respondents 3. Ramesh Babu 4. L.K.Prasad 5. V.Ramesh RR3 to 5 impleaded as party respondents vide order of Court dated 22.11.2007 made in C.M.P.No.2228 of 2007 Appeal filed as against the judgment and decree dated 30.04.1990 passed in O.S.No.196 of 1985 on the file of the X Assistant Judge, City Civil Court, Madras. For Appellant :M/s.Hema Sampath,Sr.counsel for Ms.Pushpa Sathyanarayanan For respondents:Mr.S.B.S.Raman JUDGMENT
The unsuccessful plaintiff filed this appeal challenging and impugning the judgment and decree dated 30.04.1990 passed by the learned X Assistant Judge, City Civil Court, Madras. in O.S.No.196 of 1985, which was filed by the plaintiff as against the defendants for recovery of possession of the immovable property, viz., the flat, which is found described in the schedule of the plaint and for other consequential relief. For convenience sake, the parties are referred to here under according to their litigative status before the trial Court.
2. Tersely and briefly, the case of the plaintiff as stood exposited from the plaint could be portrayed thus:
(a) The Tamil Nadu Housing Board allotted flat No.17-B, Rajaram Colony, Kodambakkam, Madras-24 in favour of the plaintiff vide its letter No.H-III (4) 93103/75 dated 20.03.1976. Consequently, the plaintiff was put in possession of the said flat and he was making payments in monthly instalments to the Tamil Nadu Housing Board.
(b) The plaintiff undertook the venture of producing a Tamil film by name “Kai Pidithaval” for which, he was in need of funds. At that time, the first defendant approached the plaintiff for taking on lease, the latter’s flat. Since the plaintiff was in need of funds, he obtained a sum of Rs.24,000/- as loan from her and both of them entered into an agreement to sell relating to the flat, as no mortgage of the flat was possible in view of the fact that at that time, the Housing Board did not execute the sale deed in favour of the plaintiff. The first defendant also undertook to pay the monthly instalments of Rs.476/- to the Tamil Nadu Housing Board on behalf of the plaintiff. As on the date of putting D1 in possession of the suit property, it would have fetched easily a monthly rent of Rs.1000/-.
(c) Such an agreement to sell emerged only by way of security for the repayment of the said loan of Rs.24,000/-. Even as per that agreement, if the plaintiff would not be in a position to pay the sum of Rs.24,000/- borrowed as loan from the first defendant, he should convey the said flat to her, after getting sale deed from the Housing Board in his favour, and thereafter by executing a sale deed in her favour for a consideration equal to that of the market value prevailing at that time.
(d) D1 failed to honour the commitment in paying the instalments on behalf of the plaintiff to the Housing Board. Subsequently, D1 informed the plaintiff, through a letter, that she intends to shift her residence to Hyderabad (Andhra Pradesh) due to her inability to pay the monthly instalments. There was also a clause in the agreement to sell that if the D1 commits default in paying the instalments in favour of the Housing Board for two months consecutively, she should vacate and deliver vacant possession of the property and she also agreed to forego the instalments that might have been paid by her to the Housing Board, except her right of getting back the sum of Rs.24,000/- with interest at 18% p.a with effect from the date of her default, from the plaintiff.
(e) D1 committed default in paying instalments in favour of the Housing Board from May 1978. In fact, the plaintiff was constrained to pay the remaining instalments with penal interest and get the sale deed executed in his favour as on 04.05.1984. D1 expressing her inability to continue in possession, left the flat, but she had put D2 in possession, who is an Advocate by profession; the latter demanded a sum of Rs.24,000/-. After issuance of the lawyer’s notice, the plaintiff filed the suit as against the defendants for recovery of possession and for damages for the use and occupation of the flat and for other incidental reliefs.
3. Per contra, denying and refuting, challenging and impugning, the allegations/averments in the plaint, D2 filed the written statement, which was adopted by D1, the warp and woof of it, would run thus:
(i) The plaintiff was not regular in paying the instalments to the Tamil Nadu Housing Board. Hence, he was in need of some one’s financial assistance for paying the same. Promising that he would sell the flat in favour the first defendant, he obtained money from her, whereupon, the said agreement to sell emerged on 02.07.1977.
(ii) The loan transaction as alleged by the plaintiff is false. Under the said agreement to sell, D1 was put in possession of the suit property. For personal reasons, D1 shifted her residence from the suit flat to a place in Hyderabad during the year 1971, which was intimated to the plaintiff. Whereupon a tripartite agreement between the plaintiff, D1 and D2 emerged on 01.10.1979 and under it, D2 should pay to D1 a sum of Rs.40,000/- and thereupon D2 should step into the shoes of D1 so as to derive the benefit under the agreement to sell. As such, with effect from 01.10.1979 itself, such tripartite agreement came into force and D2 was put in possession of the plaintiff’s flat. Accordingly, the plaintiff is not entitled to claim any damages for his use and occupation from the defendants and prayed for the dismissal of the suit.
4. The plaintiff filed a reply statement gainsaying and controverting the allegations as set out in the written statement.
5. D2 in O.S.NO.196/85 filed a separate suit in O.S.No.7112/86 before the same Court for specific performance of the said agreement to sell. Issues were framed in the suits. During joint trial, on the side of the plaintiffs, P.Ws.1 to 4 were examined and Ex.A1 and Ex.A10 were marked. On the side of the defendants D.Ws.1 to 7 were examined and Exs.B1 to Ex.B19 were marked. Ultimately, the trial Court dismissed both the suits.
6. Being aggrieved by and dissatisfied with the judgement and decree of the trial Court in dismissing the original suit of the plaintiff, this appeal has been filed on various grounds, the quintessence of them would run thus:
(i) The judgement and decree of the trial Court is against law, weight of evidence and all probabilities of the case.
(ii) While dismissing the suit O.S.No.7112/86 filed for specific performance by Srinivasa Rao, the lower Court should have decreed the suit of the appellant/plaintiff herein, viz., Anwerjan.
(iii) The trial Court erred in finding that Ex.P8 was barely an agreement to sell.
(iv) The trial Court dismissed the original suit No.196/85 of Anwerjan on the ground of limitation without applying the law properly and also ignoring the fact that 12 years’ limitation period was available for Anwerjan to file the suit for recovery of possession of the flat.
(v) Ex.B8 emerged only by way of security for the repayment of the said loan of Rs.24,000/- but the said fact was ignored by the lower court.
(vi) The trial Court failed to note the contradicting versions of the defendant’s witnesses relating to Ex.B8. DW3’s witness was wrongly relied on by the plaintiff.
(vii) Ex.B8 was opposed to public policy and also Section 23 of the Contract Act.
(viii) The deposition of DW1 and DW3 were not considered by the trial Court properly.
(ix) The evidence on record were not considered by the trial Court in adjudging the case.
(x) The trial Court ignored the significance of Ex.A 50.
(xi) Exs.23, 24, 28 and 29 were not considered properly by the trial Court.
(xii) The trial Court failed to note that Exs.37 to 40 evinced that the plaintiff was not at all in Madras on the date of the alleged emergence of tripartite agreement.
(xiii) Accordingly, he prayed for setting aside the judgment and decree of the trial Court and for dismissing the suit in O.S.No.196 of 1985 in toto.
7. The points for consideration are as to:
(i) What is the status of the newly added respondents, namely, Ramesh Babu, L.K.Prasad and V.Ramesh consequent upon the death of Srinivasa Rao in this appeal?
(ii) Whether the dismissal of the appeal 22/93, filed by Srinivasa Rao, on 31.10.2000 would constitute an embargo as resjudicata for the newly added respondents to defend this appeal, as the ones representing the deceased Srinivasa Rao?
(iii)Whether the agreement to sell (Ex.A51) is valid as per law? and whether the plea of Srinivasa Rao that D1-Leelavathy transferred her right in the agreement to sell, which emerged between D1-Leelavathy and the plaintiff, in his favour orally, as per the oral tripartite agreement, among the plaintiff, D1 and D2, is true and legally tenable?
(iv) Whether the trial Court was justified in dismissing the suit on the ground of limitation?
(v) Whether the maxim “in pari delicto potior est conditio possidentis” is applicable in this case?
(vi) Whether there is any infirmity in the judgement and decree of the trial Court?
Point No.1:
8. A resume of the happenings that took place during the pendency of this appeal could be set out thus:-
During the pendency of this appeal, the second respondent-Srinivasa Rao died, whereupon, C.M.P.No.2228 of 2007 was filed. My learned predecessors dealt with the matter and on 22.11.2007 ordered as under:-
“3. A memo has been filed on behalf of the second respondent, intimating his counsel that the second respondent, namely, V.Srinivasa Rao died on 22.12.2006 at Guntur. On the information given in the memo, steps have been taken and this petition has been filed, wherein this Court ordered notice to the respondents on 21.7.2007 returnable on 6.8.2007.
4.Heard the learned counsel on both sides. Learned counsel for the petitioner and the learned counsel appearing on behalf of the proposed respondents have no objection this petition being ordered without prejudice to the rights of the parties.
5. In view of the submission made by the learned counsel on either side and as the death of the second respondent has been brought to the notice of this Court, this petition for impleading respondents 2 to 4 herein as respondents 3 to 5 in the appeal stands ordered without prejudice to the rights of the parties.”
9. As such, in view of the above order passed by my predecessor, now before this Court, in the place of deceased second respondent-V.Srinivasa Rao, the respondents Ramesh Babu, L.K.Prasad and V.Ramesh are representing and on their behalf, their learned counsel submitted his argument.
10. The learned Senior counsel for the appellant would contend that the learned counsel, who appeared for the deceased Srinivasa Rao filed memo dated 12.7.2007, which is extracted hereunder for ready reference:
“Counsel for the 2nd respondent is informed that the 2nd respondent the above named Mr.V.Srinivasa Rao died on 22.12.2006 at Guntur. Under his Last Will and Testament made and executed at Chinnakondrapadu Village, Pratipadu Mandalam, Guntur District, Andhra Pradesh, the said 2nd respondent has appointed (1) Mr.Ramesh Babu, son of V.Ramadas, No.65, 8th Street, 6th Cross, Vaishnavi Nagar, Thirumullaivoyal, Chennai-109 and (2) Mr.L.K.Prasad, son of Dr.L.Veera Rao, of Chinakondrapadu Village, Pratipadu Mandalam, Guntur District as his executors. It is prayed that notice in the appeal be issued to the said Executors.
Dated at Chennai this the 12th day of July 2007.”
whereupon, the said newly added respondents have been added without in any way the appellant admitting or acknowledging that they are the legal representatives of the deceased Srinivasa Rao. However, only for the purpose of proceeding with the appeal, they have been added, as per Order XXII Rule 4-A of C.P.C.; and those newly added respondents cannot canvas any right under the said Will, which was not admittedly probated, even though the suit property is situated within Chennai city and that as per Section 213 of the Indian Succession Act, the said Will cannot be relied on by the Court for any purpose.
11. In support of her proposition, the learned Senior counsel for the appellant cited various decisions and therefore, it is just and necessary to refer to them:
(i) 2001 4 Civil Law Journal 209 -Bangali Singh and another vs. Ramanuj Sharma- A excerpt from the decision in would rund thus:
“5. . . . . . . .In this connection I am to refer to Order XXII, Rule 4-A CPC, where it has been laid down that if, in any suit it shall appear to the Court that there is no legal representative of the party who died during the pendency of the suit, the Court may on the application of any party to the suit proceed in absence of a person representing the state of the deceased person, or may by order appoint the Administrator-General, or an officer of the Court of such other person as it thinks fit to represent the estate of the deceased person or order subsequently given or made in the suit shall bind the estate of the deceased person to the same extent as he would have been bound if a personal representative of the deceased person had been a party to the suit. This rule was added by amending Act 104 of 1976. The aforesaid provisions makes it abundantly clear that a suit may be allowed to proceed even in the absence of the deceased plaintiff or defendant by a person who is appointed by the Court to represent the estate of the deceased plaintiff or defendant and the suit may be continued by that person and a judgement and decree may be passed. This judgement and decree will bind the estate of the deceased. That means the estate of the deceased will be protected by the judgement and decree passed by the Court. So, the spirit behind substitution is that interest of the original plaintiff or defendant who dies during the pendency of the suit and who is to be represented by the substituted plaintiff may be protected. This is the inherent spirit behind substitution. So, when the original plaintiff Daro Kuer, had filed a suit seeking setting aside of the alleged deed of gift executed by her in favour of the defendant of the suit, the legal representative whoever may be shall be entitled to continue the suit and protect the interest of the original plaintiff. If the suit is allowed to abate, the interest of the original plaintiff shall become extinct and the defendants of the suit shall be holding the suit land under illegal right. Normally when estate of any person is without any heir the property goes to the State by escheat but when suit abates and the defendant of a particular suit is allowed to hold the suit land illegally even the State cannot take the property of the deceased plaintiff by escheat. So, guiding principle behind substitution as mentioned in the amending Rule 4-A, Order XXII, C.P.C.is that the suit must be allowed to be continued by a legal representative in order to protect the interest of the original plaintiff and to protect the interest of the original plaintiff and to protect his or her estate from being usurped by unauthorised person. So, I do not think that the decree passed by the Trial Court was bad or the decree confirmed by the appellate Court was also vitiated by any illegality. The decree passed in the instant suit would, therefore, be a decree in favour of the original plaintiff Daro Kuer and not in favour of the substituted plaintiff. Now I shall herein below consider when Ramanuj Sharma acquired any right being the legal representative of Daro Kuer by virtue of the decree passed by the lower Courts. In this Connection I am to refer to a decision cited by the defendant’s Lawyer as in AIR 1971 Kerala Page 270(Geevarghese and another v. Issahak George and others). . . . .
6. . . . .. .However, if it was declared by the Court by its decree that right of the plaintiff remained unaffected that may amount to the declaration that the substituted plaintiff Ramanuj Sharma had also acquired title to the suit property. In this connection, I am of the opinion that of course, the decree in the present form might indicate that the right of the substituted plaintiff in the suit land remanded unaffected. However, of course the substituted plaintiff would derive no title, right and any interest n the suit land by virtue of the unprobated Will although he might act as legal representative to continue the suit. So, it is made clear here and it is observed that the substituted plaintiff Ramanuj Sharma shall derive no right, title and any interest over the suit property by seeking the cancellation of the deed of gift, as decree by the two lower Courts. It is the original plaintiff whose right and title of the suit property shall remain unaffected by the decree granted by the two lower Courts.”
12. A perusal of the said judgement would highlight the fact that an unprobated Will cannot be presumed to service for any purpose before the Court to derive any title by the newly added respondents, who could only on behalf of the deceased participate in the proceedings. But for their presence, the Court should proceed in any of the other modes contemplated under Order XXII, Rule 4-A.
13. At this juncture, it is just and necessary to extract hereunder Order XXII, Rule 4-A C.P.C:
“Order XXII, Rule 4-A.Procedure where there is no legal representative If in any suit, it shall appear to the court that any party who has died during the pendency of the suit has no legal representative the Court may, on the application of any party to the suit, proceed in the absence of a person representing the estate of the deceased person, or may by order appoint the Administrator General, or an officer of the Court or such other person as it thinks fit to represent the estate of the deceased person for the purpose of the suit and any judgment or order subsequently given or made in the suit shall bind the estate of the deceased person to the same extent as he would have been bound if a person had been a party to the suit.”
14. A perusal of the above would indicate the relevant procedure to be adopted in the event of no one could be located for representing the interest of the deceased.
15. Here, in this case, since the learned counsel, who appeared on behalf of the deceased filed the memo, highlighting the said newly added three respondents as executors of the Will, the Court is justified in citing them in the party array. As such, I am in complete agreement with the view expressed by the Patna High Court in the judgement reported in 2001 4 Civil Lar Journal 209 -Bangali Singh and another vs. Ramanuj Sharma, cited supra.
16. An excerpt from one other decision cited by the learned Senior counsel for the plaintiff reported in “2001 Vol.103(4) Bom.L.R.540 GULABBEN WD/O CHIMANLAL MANIAR & OTHERS VS. NARENDRA BALCHANDRA AND OTHERS would run thus:-
“7. . . . . On plain language of this provision it would appear that any party to the suit could have taken recourse to this Rule, nay was duty-bound to do so. While doing so, it was enough for the plaintiffs to assert that deceased defendant No.1 had not left behind any heir or legal representative to represent his estate so as to invoke this rule. The application filed by the petitioners does make this assertion. Moreover the evidence let in during trial would also fortify this position, as contended by the petitioners. But the Court below has erroneously recorded that there is nothing before the Court that no heir and legal representative were left by defendant No.1 after her death. This finding is therefore rightly critized by the learned counsel for the petitioners being an error apparent on the face of the record. I find substance in the said submission. In other words, the Court below has applied wrong test while deciding the application in question. Once this finding is reversed, as a necessary corollary, it would follow that the trial Court will have to re-examine the matter in the context of scope of rule 4A coupled with procedural requirement under sub-rule (2) of Rule 4A. While doing so, the Curt below shall also bear in mind the effect of sub rule (4) of Rule 4 which postulates that the Court whenever it thinks fit may exempt the plaintiff from the necessity of substituting the legal representatives of any such defendant who has failed to file written statement or who, having filed it, has failed to appear and contest the suit at the hearing; and judgment may, in such a case, be pronounced against the said defendant notwithstanding the death of such defendant and shall have the same force and effect as before the death took place. It is not in dispute that the deceased defendant No.1 had not filed written statement in the suit, therefore, in terms of Rule 4(4) the plaintiffs were additionally entitled to claim that they could be exempted from the necessity of substituting the legal representatives, in which case the order of abatement of suit as against such defendant was unwarranted and impertinent.
9. In the circumstances the only appropriate order that could be passed is to remit the matter to the trial Court to re-examine the application in the context of requirements of sub-rule (4) of rule 4 as well as rule 4A of Order XXII of the Code of Civil Procedure.
10. The Argument advanced on behalf of the respondents that the petitioners-plaintiffs had failed to move for setting aside the order passed on 16.9.1992 is of no avail. In my view, the application in question, as is evident from the assertion made therein was taken out only after evidence was let in before the trial Court and which would go to show that the deceased defendant No.1 has not left behind any heir or legal representative. In the changed situation the said application was filed by the plaintiffs and therefore, it would be wholly in appropriate to non-suit the plaintiffs on the ground that no steps have been taken for setting aside the order date 16.9.1992. in my view, the observations made by the trial Court in its order dated 30.8.1995 will have to be understood int he context of fact situation which has come on record. Needless to mention that the order of abatement is not so sacrosanct or inviolable that the same cannot be altered at a subsequent point of time inspite of sufficient cause being shown by the plaintiffs or any other party to the suit. If the party to the suit is able to satisfy the Court that the requirements of Rule 4A or Rule 4(4) are attracted in a given case then the Court may in its inherent powers pass appropriate orders including an order of setting aside abatement on such ground. If the aforesaid rules permit prosecution of the suit in absence of legal representatives of the deceased party, and yet the judgement passed would bind the estate of such deceased party, then surely it would be preposterous to contend that suit against such a person would abate law. Both these situations would be antithesis to each other. In my view it would defeat the legislative intent behind the Amendment Act of 1976.”
17. As such, the said decision also would highlight the same proposition as posited supra. Hence, I am of the considered opinion that trite the proposition of law is that unprobated Will relating to the property situated in Chennai city, cannot be looked into for any purpose. However, those newly added parties are only allowed to proceed with the appeal, for the purpose of comprehensively deciding finally the issues involved in this case and I make it clear that they cannot derive any personal benefit over the suit property. Accordingly the first point is decided.
18. Point No.2 the learned Senior counsel for the appellant would advance her argument that A.S.No.22 of 1993, which was filed by Srinivasa Rao, challenging the dismissal of his suit O.S.No.7112 of 1986 for specific performance of the said agreement to sell, was dismissed for default; no steps were taken to get the appeal restored by anyone on his behalf; as a sequela, in such a case the decision of the lower Court in O.S.No.7112 of 1986 dismissing Srinivasa Rao’s claim for specific performance would operate as resjudicata as against the newly added respondents in this appeal to defend this appeal in any manner whatsoever.
19. However, the learned counsel for the newly added respondents would submit that absolutely there is no embargo for the newly added respondents in defending this appeal effectively on all Courts.
20. At this juncture my mind is redolent with the following decisions:
(i) An extract from the decision reported in AIR 1966 SC 1332 [Sheodan Singh vs. Daryao Kunwar] would run thus:
“20. … … … Where the trial Court has decided two suits having common issues on the merits and there are two appeals therefrom and one of them is dismissed on some preliminary ground, like limitation of default in printing with the result that the trial Court’s decision stands confirmed, the decision of the appeal court will be res judicata and the appeal Court must be deemed to have heard and finally decided the matter. In such a case the result of the decision of the appeal court is to confirm the decision of the trial Court given on merits, and if that is so the decision of the appeal court will be res judicata whatever may be the reason for the dismissal. ….”
(ii) An extract from the decision reported in 2001(1)M.L.J. 212 [Renganayaki and another vs. K.R.Renganatha Mudaliar] would run thus:
“11. … … …. it can safely be concluded that where two connected suits have been tried together and the findings recorded in one of the suits have become final, in the absence of an appeal, the appeal preferred against the findings recorded in the other suit would definitely be barred by the principles of res judicata.”
(iii) An extract from the decision reported in 2001(4)CTC 297 [K.A.Perumalsamy vs. A.Kandasamy and another] would run thus:
“11. … … … There is a clear finding against the appellant in respect of the other two suits also and when once the appellant failed to prefer any appeal against the other two judgments, naturally the present appeal also would be barred on the principles of res judicata. In support of his contention, reliance is placed upon the decision reported in Premier Tyres Ltd., v. Kerala State Road Transport Corporation, 1993 Supp (2) SCC 146, wherein it was observed that where two connected suits tried together and finding recorded in one suit became final in absence of appeal, appeal preferred against the finding recorded in the other suit would be barred by res judicata. The same view has been reiterated in Lonankutty v. Thomman and another, AIR 1976 SC 1645, Sheodan Singh v. Daryao Kunwar AIR 1996 SC 1332 and Vediammal and others v. M.Kandasamy and others 1997 TI NJ 96. In view of the decisions, it is patently clear that the principle of res judicata is also applicable to the case on hand. The courts below have rightly appreciated the contentions raised by the appellant and there is no illegality or infirmity calling for any interference.”
21. As such, a mere perusal of the aforesaid precedents would highlight that for whatever reason, an appeals is dismissed, including the one on the ground of default, certainly it would operate as resjudicata, in the connected appeal. The fact remains that the lower Court passed common judgement in O.S.No.196/85 and in O.S.7112/86. Issues were framed in both the matters, separately. However, a bare perusal of those issues and the pleadings would evince that in the suit O.S.No.196 of 1985 filed by the plaintiff/appellant herein for recovery of suit the property and in the suit O.S.No.711 of 1986 filed by Srinivasa Rao for specific performance, the real controversy and the apple of discord and the facts involved are one and the same.
22. It is not as though the suit filed by the plaintiff for delivery of possession is based on a different set of facts from the suit filed by Srinivasa Rao for specific performance. Both constituted two sides of a coin. In both the suits, the respective plaintiffs claim substantive reliefs based on the same set of facts, which element should not be lost sight of. To the risk of repetition, without being tautalogous, I would hold that if the facts and evidence relating to the dismissed appeal are different from the one involved in this appeal, then the plea of resjudicata would not be attracted. But on the other hand, the above narration of facts in both the suits would unambiguously and unequivocally highlight the fact that the facts and evidence required in both the cases are one and the same and understanding the said factor alone, the trial did conduct a joint trial and did render a common judgement. The newly added respondents are really in a catch-22 situation, from which they cannot wriggle out. Hence, I am of the considered opinion that the newly added respondents are precluded from even defending this appeal on behalf of the deceased Srinivasa Rao, in view of the embargo operating as against them, on the basis of the principle of resjudicata, as envisaged under Section 11 of C.P.C. Accordingly, point No.2 is answered.
23. However, for the purpose of comprehensively deciding the appeal, I proceed to decide other substantive points also on merits.
24. Point No.3: The quintessence of the case of the plaintiff is that owing to his financial constraints and cash strapped situation, he borrowed a sum of Rs.24,000/- from D1-Leelavathy and in consideration of the same, he allowed her to occupy the suit property, subject to the condition that she need not pay monthly rents to the plaintiff instead she had to pay the monthly dues to the Housing Board, which allotted the suit property in favour of the plaintiff; inasmuch as the plaintiff at the time of emergence of Ex.A51 was only an allottee under the Housing Board concerning the suit property and hence, he could not mortgage the suit property in favour of D1 and realising all these facts, Ex.51-Agreement to sell emerged only as a security for the re-payment of a sum of Rs.24,000/- by the plaintiff in favour of D1.
25. It is also the case of the plaintiff that subsequently D1 left the premises after committing default in payment of instalments to the Housing Board. However, D1 had put D2 in possession of the suit property under her and that he refused to vacate the suit property.
26. Per contra, the gist and kernal of the case of D2 is that he stepped into the shoes of D1 under Ex.B51, based on a tripartite agreement, to which the plaintiff, D1 and D2 were parties; D2 paid all the remaining instalments ever since he got into the possession of the suit property as per the tripartite agreement and it was the plaintiff, who committed default in performing his part of contract under the agreement to sell, as envisaged under Ex.A51.
27. Indubitably and incontrovertibly, the plaintiff and D1, as per Ex.A.51, entered into an agreement to sell relating to the suit property. It is the contention of the plaintiff that the said agreement to sell is not in stricto senso an agreement to sell, but a mere security for the re-payment of the loan amount of Rs.24,000/- without interest. Whereas, D2 would contend that it was an agreement to sell and the plaintiff committed default in performing his part of the contract even though D2 is not at fault.
28. It is also the contention of the plaintiff that the said agreement to sell is not an enforceable contract for the reason that as on the date of entering into such agreement to sell, the plaintiff was not the owner of the suit property and furthermore, there was an embargo for the plaintiff to effect transfer in any manner. Whereas, the learned counsel for D2 would argue that if at all there is any breach of conditions imposed by the Housing Board under the terms of allotment, it is for the Housing Board to take action and not for the plaintiff to veer round and take pleas quite antithetical to what he committed himself in black and white in the agreement to sell.
29. At this juncture Section 23 of the Indian Contract Act could be re-produced hereunder for ready referrence:
“Section 23.What considerations and objects are lawful, and what not.- The consideration or object of an agreement is lawful, unless-
it is forbidden by law, or
is of such a nature that, if permitted, it would defeat the provisions of any law; or
is fraudulent; or
involves or implies injury to the person or property of another; or
the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.”(emphasis supplied)
30. Here the Housing Board is admittedly a statutory body. As per the Rules and Regulations of the said statutory body, the allottee of a house should not transfer the property before the sale Deed is executed in his/her favour. It is therefore crystal clear that such statutory body’s Rules and Regulations could rightly be treated as part of law and moreover, the terms and conditions imposed as per the Rules and Conditions would have legal sanctity of its own and any contract, in violation of it could rightly be taken as against the public policy, as per Section 23 of the Indian Contract Act. If any decision is rendered, otherwise, it would amount to giving a premium to those violators/allottees of the Housing Board, to violate the law pragmatically with impugnity, and ultimately, the Housing Board’s statutory object in rendering service to the public would be rendered otiose and nugatory.
31. The learned counsel for D2 would argue that even though Housing Board is a statutory body, its Rules and Regulations and terms and conditions cannot be equated to the level of legal provisions and accordingly, press into service Section 23 of the Indian Contract Act.
32. The cumulative reading of the various clauses in Section 23 of the Contract Act would clearly highlight that any contract, which is fraudulent, if permitted, it would defeat the provisions of any law or public policy. So the object of Section 23 of the Indian Contract Act should be seen and it is apparently clear from the wordings therein that clandestine and shrewd way of entering into contract so as to subvert the purpose of a statutory body’s service to the public should be rendered with. A fortiori the very agreement to sell itself, in my considered opinion, is void abinitio.
33. To the risk of repetition, I would also hold that as already held supra under point No.2, the suit filed by D2 for specific performance of the agreement to sell was dismissed and the subsequent appeal filed as against it also was dismissed and as such, D2 and the persons representing him also are precluded from contending otherwise.
34. It is the contention of the plaintiff that the right, if any, under the agreement to sell is an actionable claim and it could be transferred only as contemplated under the transfer of Property Act by virtue of a written document and not otherwise. Hence, it is just and necessary to extract Section 130 of the Transfer of Property Act:
“130. Transfer of actionable claim.-(1) The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instruments, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided by given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have ben entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor’s consent to such suit or proceedings and without making him a party thereto.”
35, At first place, it appears that the definition of actionable claim is relating to movable property only and not relating to immovable property. The learned Senior counsel for the plaintiff/appellant would argue that the right accrues under an agreement to sell is only a movable right and as such, it would attract Section 130 of the Transfer of Property Act.
36. In support of her contention, she also cited the following decisions:
(i) AIR 1928 PRIVY COUNCIL 174 – SAKALAGUNA NAYUDU AND ANOTHER VS. CHINNA MUNUSSWAMI NAYAKAR. An excerpt from this would run thus:
“The only further question is whether the benefit of the contract had been effectually assigned to the plaintiff before the suit was instituted. It was argued on behalf of the appellant-defendants that on the insolvency of Venkatasubrahmanya the property of the joint family, including the benefit of the above mentioned contact, vested in the Official Assignee, and that the benefit of the contract never was assigned to the plaintiff. On the other hand, it was argued on behalf of the plaintiff that on the insolvency of Venkatasubrahmanya the joint family property remained in the joint family subject to any action which the Official Assignee might take to get possession of Venkatasubrahmanya’ share. In view of the facts of this case their Lordships do not think it necessary to enter upon the consideration of this question or to decide which of the above mentioned contentions is correct, because whichever of them be adopted, their Lordships are of opinion that the plaintiff must succeed.
If the first of the above-mentioned contentions be adopted, the plaintiff is entitled to rely on the conveyance of 27th February 1916; by which the Official Assignee conveyed all the right, title and interest of the insolvent, Venkatasubrahmanya in the village to Krishnasami. It is clear on the evidence that this conveyance, though taken in the name of Krishnasami, was on behalf of, and for the benefit of, the plaintiff, who had supplied part of the money paid to the Official Assignee and who had already purchased the village and the benefit of the contract dated 27th January 1891, for valuable consideration. Krishnasami had at the time of the conveyance by the Official Assignee no interest in the village or the contract as was subsequently acknowledged by his widow and heir.
If the second of the above-mentioned contentions be adopted, then the deed of 12th May 1910, by which Krishnasamy conveyed the village and assigned the benefit of the contract of 27th January 1891 to the plaintiff’s title and his right to sue for the enforcement of the said contract.
Their Lordships, therefore, are of opinion that whichever of the above mentioned contentions be adopted, the benefit of the contract had become vested in the plaintiff before the institution of the suit, and the plaintiff, having made an adequate tender of the amount specified in the contract at the time mentioned therein, was entitled to call upon the defendants, the sons and heirs of Venkatapathi, for a conveyance of the property. Their Lordships are of opinion that the decree of the High Court, dated 5th March 1925, was correct, and that this appeal should be dismissed with costs. They will humbly advise His Majesty accordingly.”
(ii) AIR 1919 MADRAS 1076 SEETHARAMA AYYAR AND ANOTHER VS. NARAYANASWAMI PILLAI AND ANOTHER, an excerpt from this would run thus:
“S.62, Contract Act, covers cases in which the liability of a debtor to pay to his original creditor is extinguished because of a new contract by which he has made himself liable to a third person. But S.130, T.P.Act, provides for transfer of choses-in-action by the person to whom the amount is due to a third person. It does not deal with cases of transfer of the liability of a debtor to somebody else. The debtor, it is well established, cannot transfer his liability without the consent of his creditor. We are therefore of opinion that the Subordinate Judge’s judgement is wrong and liable to be set aside as it proceeds upon an erroneous view of the law. We set aside the judgement of the Subordinate Judge and restore the decree of the District Munsif with costs here and in the Court below.”
37. As such, a bare perusal of the above said precedents and the provisions of law extracted would show that even the right accrued under the agreement to sell is an actionable claim and any transfer would attract an instrument in writing as per Section 130 of the Transfer of Property Act.
38. I am also of the considered opinion that in the present day context mostly people stoop down to any level of uttering out falsehood for the purpose of getting things done. The courts also should be aware of those happenings in society and take a pragmatic view and insist upon written documents and any decision to the contrary would add fuel to the fire in the exiting situation that is prevailing in the Society. As such, I am of the considered opinion that a written instrument is required to transfer the right accrued under an agreement to sell. Over and above that there is also one another crucial fact, which could be set out thus.
39. I have also called upon both sides to advance arguments based on Section 53 of the Transfer of Property Act.
40. Section 53 of the Transfer of the Transfer of Property Act is re-produced hereunder:
“53. Fraudulent transfer.-(1) every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.
Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.
A suit instituted by a creditor (which term include a decree holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors.
(2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.”
41. A bare perusal of it would clearly highlight that a written document is required, if an agreement to sell contemplates that the proposed purchaser should be put in possession of the subject matter of the agreement to sell even before the sale deed fructifies. It is therefore obvious and axiomatic that when part performance is envisaged in an agreement to sell, it should be in writing and as a corollary, sequel and logical sequence of it, if any transfer of such interest by the proposed purchaser under such an agreement to sell should also be only by virtue of a written agreement. When the law itself, without mincing words, stipulates that at the first instance itself there should be a written instrument envisaging part performance, then the subsequent transfer also should be in writing and it cannot be oral.
42. Here, indubitably, unequivocally and unassailably, Ex.A51 would envisage part performance and thereby attracted Section 53-A of the Transfer of Property Act and the alleged transfer of interest of D1 in favour of D2, as per the alleged tripartite agreement, should have been in writing, but it was not so. Hence, the plea of D2 is untenable.
43. The learned counsel for the newly added respondents would develop his argument that inasmuch as such oral transfer was effected with the consent of the plaintiff, no written instrument was required.
44. I am of the considered opinion that the alleged consent or no consent would not change the legal position as set out supra by me. The distinction sought to be made by the learned counsel for the newly added respondents amounts to tweedledum and tweedledee, to wit, illusory.
45. There is also one another point involved in this case as to whether D2 proved the very tripartite agreement itself. No doubt evidence was adduced on the side of D2 to highlight that there was some meeting among the said three persons, namely, the plaintiff, D1 and D2. But, absolutely there is no convincing explanation as to why it was not reduced into writing. Much time would not have been taken to make an endorsement in the earlier agreement to sell itself, about the said tripartite agreement. For which, the learned counsel would try to expound by submitting that the subsequent conduct of the parties could be seen as incontrovertible D2 continued to pay the instalments and the benefit was enjoyed by the plaintiff and that he could not veer round and take pleadings quite antithetical to what actually he acquiesced to. No doubt, the subsequent circumstances would demonstrate the real intention of the parties to an agreement. But, in this case D2 was in occupation of the suit property and it was no wonder that he paid monthly instalments, as found set out in the pass-book-B13. By that alone D2 had acquired no right over the suit property as claimed by him. Accordingly, point No.(iii) is decided in favour of the appellant.
46. Point No.(iv): As regards limitation, the trial Court simply held that the suit filed by the plaintiff is barred by limitation, as he did not file it within three years. The trial Court has not referred to any provision of law in support of its decision. It is quite axiomatic that an owner of immovable property could file a suit within twelve years’ and for that matter even beyond 12 years also, such a suit could be filed, so long as the defendants have not acquired title over it. Learned counsel for D2 would argue that for suing, consequent upon breach of contract, only three years’ period is contemplated. Here, the suit filed by the plaintiff is not based upon any mere breach of contract. It is an admitted fact that the plaintiff alone had substantive right over the suit property and he filed the suit for recovery of possession, ignoring the agreement to sell, which is void. The Courts’ findings also are to the effect that the said agreement to sell is void and there was no transfer of interest under the said agreement to sell by D1 in favour of D2 and in such a case, the plea of limitation is a mis-conceived one and accordingly point No.iv is decided that the suit is not barred by limitation also.
47. Point No.v: D2 is not proved to have been put in possession by the plaintiff directly under some illegal contract and he was not given any ostensible right also over the suit property. The very tripartite agreement alleged to have emerged has not been proved and even no right was got transferred in favour of D2. To the risk of repetition, I would highlight that the plaintiff, on the strength of earlier allotment of the suit property by the Housing Board and on the strength of sale deed executed by the Housing Board in his favour filed the suit against D2, who is virtually a stranger to the plaintiff and in such a case, the view of the trial Court in using the maxim in parie delicto potior est conditio possidentis is totally untenable and accordingly this point is decided in favour of the appellant and as against the defendants.
48. Point No.vi: In the result, the judgement and decree of the trial Court is set aside and the original suit is decreed to the effect that the plaintiff is entitled to obtain delivery of possession of the suit property and correspondingly, the respondents shall put the appellant/plaintiff in possession of the suit property subject to the condition that the plaintiff/appellant shall deposit the sum of Rs.24,000/-(Rupees Twenty four thousand only) in the lower Court within a period of two months, if not already deposited, from the date of receipt of a copy of this judgement. Even thereafter, if there is any delay on the part of the respondents in putting the plaintiff/appellant in possession of the suit property, then it is for the plaintiff/appellant to file a separate application claiming damages for use and occupation before the trial Court, as per Order 20 Rule 12 of C.P.C. and the trial Court is at liberty to assess the quantum of damages for use and occupation from the date of deposit of the said sum of Rs.24,000/- (twenty four thousand) by the plaintiff.
48. Regarding the claim for past damages for use and occupation as well as claim for damages and use and occupation up to the date of such deposit, the prayer of the plaintiff/appellant is rejected on the ground that the plaintiff/appellant has been retaining the sum of Rs.24,000/-(twenty four thousand) all along.
Accordingly, this appeal is partly allowed. No costs.
Msk 29.07.2008 Note to Office: Issue order on 1.8.2008 To The X Assistant Judge, City Civil Court, Madras. G.RAJASURIA,J Pre-delivery Judgement in A.S.No.359 of 1993 29.07.2008