Posted On by &filed under Andhra High Court, High Court.


Andhra High Court
Akula Madhava Rao And Anr. vs P. Rukmini Bai on 8 August, 1995
Equivalent citations: 1995 (3) ALT 61
Author: K Agarwal
Bench: K Agarwal, K Siddappa


JUDGMENT

K.M. Agarwal, J.

1. Being aggrieved by the affirming judgment and decree for declaration of title, possession and mesne profits (i.e., arrears of rent), passed by a learned single Judge of this Court, the defendants 1 and 2 in the suit, husband and wife by relationship, have preferred this Letters Patent Appeal.

2. Briefly stated, some of the brothers and /or nephews of the first appellant had on or about 10-10-1968 filed O.S.No. 177 of 1969 for partition of their joint Hindu family properties against the appellants and a few others, including the subject matter of the present suit, (in short, the “suit property”), as one of the items of such properties. During the pendency of this partition suit, the three disputed transactions between the parties in the present suit simultaneously came into being on 19-6-1969 in respect of the suit property. The first was a sale deed (Ex. A-l) for a consideration of Rs. 20,000/- by the second appellant in favour of the respondent. The second was a lease deed (Ex. A-2) in favour of the respondent by the first appellant and the third was an agreement to reconvey (Ex. B-l) executed by the respondent in favour of the second appellant. The partition suit was decreed by the trial Court on 3-11-1972, holding the suit property to be one of the properties of the joint family. In CCCA No. 49 of 1973 filed by the present defendants (sic. appellants) 1 and 2, the Respondent (Plaintiff) herein was allowed to be joined as the Respondent No. 14 in that appeal on the basis of her application under Order 1, Rule 10C.P.C. The appeal was dismissed on 2-11-1976 by a learned single Judge of this Court, whereupon both the parties in the present appeal preferred two separate Letters Patent Appeals, bearing Nos. 100 of 1977 and 101 of 1977. Both the appeals were allowed by a common judgment and decree, dated 18-10-1979 passed by a Division Bench of this Court. The Division Bench came to the conclusion that the suit property was the separate or self earned property of the second appellant herein and accordingly dismissed the suit for partition in so far as the suit property, (i.e., the house site 1-3-1063 and the building thereon), was concerned. The present respondent, thereafter, served the first appellant here in with a notice dated 19-2-1980, calling upon him to pay the arrears of rent for the past period of 3 years at the rate of Rs. 525/- per month and to vacate the suit property by 19-3-1980. After receipt of its reply, the respondent herein filed the present suit for the said reliefs based on the sale deed (Ex. A-l) and the lease deed (Ex. A-2) dated 19-6-1969. The suit was resisted by the present appellants on the ground of want of consideration and on that of the alleged nominal nature of the sale deed, which according to them was not intended to be acted upon by the parties. The suit was decreed. The first appeal preferred by the defendants in the suit filed. Hence, this Letters Patent Appeal.

3. Before we embark upon the main question involved in this appeal, let us see the pleadings of the parties. According to the respondent (Plaintiff), she purchased from the second appellant (Second Defendant) the “Double storeyed premises bearing Municipal No. 1-3-1063, consisting of a plot of land admeasuring 386 square yards and building constructed thereon which is having a ground floor, first floor and an incomplete second floor, situate at Kavadiguda, Hyderabad,” (i.e., the suit property) for a sum of Rs. 20,000/- by a registered sale deed dated 19-6-1969 (Ex. A-l). On the same day the first appellant (first defendant), who happened to be the husband of the second appellant, took the entire suit property on a monthly rent of Rs. 525/- as per lease deed dated 19-6-1969 (Ex A-2), The appellants, thereafter, took a loan of Rs. 20,000/- from the respondent by executing two separate pronotes of Rs. 10,000/- each and on their request, the respondent agreed to reconvey the suit property in their favour for a sum of Rs. 40,000/- as per the terms and conditions of the agreement dated 15-6-1972. Then she made a reference to the partition suit between the family members of the appellants and the stand taken by the appellants while defending mat suit. It was asserted that in that suit, the “learned Third Additional Judge came to the conclusion that the Sale Deed executed by the second defendant herein in favour of the plaintiff herein, and the Agreement and receipt are got up documents and they were sham and nominal documents brought into existence.” The finding was said to be erroneous and not binding on the respondent herein, as she was not a party to that suit. In appeal (CCCA No. 49 of 1973) filed by the present appellants, she was brought on record as Respondent No. 14- It was alleged that the appeal in partition suit was dismissed by a learned Single Judge of this Court with certain modifications in the findings recorded by the trial Court. “The Hon’ble High Court came to the conclusion that the vacant site No. 1-3-1063 must be held to have been purchased in the name of the seventh defendant for and on behalf of the joint family but the money for the construction on the said vacant site did not come out of the joint family funds, but from some other sources. But the Hon’ble single Judge held that the house was constructed on a site owned by the joint family in spite of the opposition and protest of the other co-owners, during the pendency of the suit, it should be treated as an item of joint family property. The Hon’ble Single Judge however, held in so far as this Plaintiff was concerned as she got herself impleaded only in the appeal for the purpose of safeguarding her rights it would be open to her to ask for working out her equities during the final decree proceedings in the Trial Court.” A reference to Letters Patent Appeal Nos. 100 of 1977 and 101 of 1977 was then made and, thereafter, asserted that the appeals were allowed “by a Bench of the learned Judges of the High Court on 18th October, 1979holdingthattheSiteNo. 1-3-1063 and the building constructed thereon namely, the plaint schedule property do not constitute joint Hindu family property and are, therefore, not liable for partition. The learned Judges held that the material on record disclosed that the second defendant herein borrowed money for the construction of the building and sold the property to the plaintiff herein and that the disputed Site No. 1-3-1063 was purchased by the second defendant herein exclusively for herself and that the plaintiff therein failed to prove that it was a benami transaction.” Ultimately she proceeded to state her reasons for filing the present suit. To quote her own words from the plaint:

“After the suit in the Court of the IIIrd Additional Judge went against the defendants, the first defendant stopped payments of rent to the plaintiff The plaintiff could not do anything in the matter, till she succeeded in the High Court and when the Appeal was allowed in her favour, she gave notice to the first defendant, calling upon him to vacate the plaint schedule property and to pay the dues for the last three years as the rents for the previous years, became time barred. The first defendant gave a reply with false allegations claiming that the plaintiff had no means to purchase the plaint schedule property and further claiming that the rental deed executed by him on 19-6-1969 was a sham and nominal document and that his wife the second defendant was the real owner (of the property) and that she was continuing in possession of the property and was collecting the rents in her own right, and that the documents were executed because of the litigation in O.S.No. 177 of 1969. This defendant also relied on the observation of the Trial Court in O.S.No. 177 of 1969 that the sale deed and reconveyance deed were sham and nominal and that the plaintiff had no means to purchase the property and that the consideration for the sale deed was hopelessly inadequate and that all the documents are sham and nominal.”

It was asserted that by their conduct and on their failure to exercise their right under the agreement for reconveyance, the appellants herein lost their right as tenants under the lease agreement. Accordingly she claimed declaration of her title over the suit property, possession thereof and mesne profits to the tune of Rs. 18,900-00, equivalent to three years rent at the rate of Rs. 525/- per month.

4. The suit was resisted by the appellants herein. The nature of their defence is indicated by the plaint pleadings themselves. The “additional fact that they stated was about the initial agreement for reconveyance (Ex. B-l) executed by the respondent in favour of the second appellant on 19-6-1969, i.e., simultaneously with the alleged sale dead (Ex. A-l) and the lease deed (Ex. A-2) dated 19-6-1969. According to them, they had to exercise their right to get the suit property reconveyed within a period of 3 years from 19-6-1969 on payment of a sum of Rs. 30,000/-. The time was extended by another period of 3 years from the date of execution of the second agreement for reconveyance dated 15-6-1972. The amount stipulated for being paid at the time of reconveyance was also alleged to have been enhanced from Rs. 30,000/- to Rs. 40.000/-. They attacked the sale deed on the ground that it was not duly executed and also on that of want of consideration. It was alleged to be a sham transaction. The lease agreement and the agreements for reconveyance were also denied as sham transactions. All the documents were alleged to have been brought into existence with a view to defeat the claim of the plaintiffs in the partition suit that the suit property was also an item of joint Hindu family property.

5. Having narrated the relevant facts and pleadings of the parties, we now proceed to examine their rival contentions before us. The first contention that was raised before us by the learned counsel for the appellants was about due execution of the various documents on which the respondent relied on in support of her case. He made a reference to Section 60(2) of the Registration Act of 1908 and also cited certain authorities to submit that the proof of registration of a document is no proof about its due execution. On principle, we agree with this proposition of law, but we do not agree with his further submission that the sale deed (Ex. A-1) was not proved to have been executed by the second appellant, because the appellants themselves admitted that the sale deed was first prepared and, thereafter, signed by the second appellant. Reference to some other sections of the Evidence Act in connection with the said submission made by the learned counsel was wholly irrelevant and, therefore, we do not consider it necessary to deal with them.

6. It was next argued by the learned counsel for the appellants that the alleged sale deed (Ex. A-l) was void for want of consideration. In the sale deed, there is no doubt a recital to the effect that the consideration of Rs. 20,000/- was paid by the vendee and received by the vendor and, therefore, there arises a presumption about passing on of the consideration, but according to the learned counsel, it is a rebuttal presumption and that presumption has been rebutted in present case. Here we find substance in the contention. Section 54 of the Transfer of Property Act defines “sale” as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised; but it was not a case of the respondent that the price was to be paid on a future date. Her specific case was that the consideration was paid to the vendor on the date of sale. Section 92 of the Evidence Act excludes oral evidence for the purpose of contradicting, varying, adding to, or subtracting from the terms of a written contract; but proviso (1) to that section permits any person to prove “want or failure of consideration” so as to invalidate any document. As held in Rakkiyana v. Chinnu, it is even open to establish by evidence that the consideration was really different from the consideration recited in the deed, as it is not a term of the sale deed. So let us see if the appellants were successful in showing want of consideration in the present case.

7. It is true that the burden was on the appellants to prove want of consideration for the sale, deed (Ex. A-l), but in the peculiar facts and circumstances of the present case, which we are shortly going to mention, it was the duty of the respondent to place some reliable evidence, apart from the recitals of the sale deed, to prove that the amount mentioned in the document as sale consideration was actually paid by her. In the sale deed (Ex. A-l), two contradictory recitals about the mode or manner of payment of consideration were made. To reproduce from the sale deed, “the entire amount of a consideration of Rs. 20.000/- has been paid by the purchaser to the vendor and received by the vendor in cash in the presence of the Registrar, Hyderabad at the time of Registration of this sale deed. That the vendor hereby admits and acknowledges the receipt of the whole amount of consideration of Rs. 20,000/- in cash and also passed a receipt for the same separately”. One meaning may be that the consideration was paid in the presence of the Registrar, which was acknowledged by the vendor not only in the sale deed, but also by executing a separate receipt in favour of the purchaser; but the respondent did not dispute that the consideration was not paid in the presence of the Registrar. The sale deed also does not contain any endorsement of the Registrar about payment of sale consideration in his presence. Accordingly the other possible interpretation would be that the sale consideration was privately paid, which was acknowledged by the vendor and for which a separate receipt was also given to the purchaser. In this state of affairs, we feel that it was necessary for the respondent to explain why the sale consideration was not paid in the presence of the Registrar, and also prove payment of consideration privately by production of the alleged receipt given by the vendor, or by production of any other reliable evidence. This she failed to do. Secondly, in her plaint pleadings, the respondent specifically alleged that ‘ the appellants were questioning her capacity to raise or possess the huge amount of Rs. 20,000/- so as to enable her to pay the sale consideration. Not only this, in their written statement the appellants reiterated mat the respondent had no capacity to pay the sale consideration. Under these circumstances, a duty was cast on the respondent to clear the doubt by cogent evidence about the source from which she supplied the sale consideration, Oral evidence adduced on behalf of the respondent about payment of the sale consideration is worthless, because there also no source is disclosed. Srinivasulu, the husband of the respondent was examined as P.W. 1. He did not say that the sale consideration was provided by him. He admittedly maintained account books, but they were not produced, naturally because the money was not given by him. Under these circumstances, it is doubtful if any consideration was really paid by the respondent for the suit property alleged to have been sold to her.

8. Last but not the least is the question about the nature of the alleged transaction: whether it was an out and out sale, or a nominal transaction. Before we proceed to decide the question, let us examine if on the face of the apparent tenor of the document and the bar against oral evidence contained in Section 92 of the Evidence Act, it is possible to do so. In Abdul v. Arlin, AIR 1926 Rangoon 94 the Rangoon High Court considered a case where the defendant denied the alleged agreement to take the land on lease, but admitted the execution of the lease deed, but alleged that to protect his property from creditors he had transferred his land benami to the name of the plaintiff and that the document was made in furtherance of this benami transaction; it was held that in effect his case was that there was no agreement of lease at all and that the deed was merely a fiction. He was therefore not debarred from producing oral evidence of this allegauon. Evidence may be given-firstly to show that there was no disposition at all. The rule operates only when there was been in fact a disposition, the whole of which was meant by the intention of parties to be embodied in the form of document. Similarly in a case where a husband admitted that he executed a deed of gift in favour of his wife but alleged that he had no intention of giving away the property and that in short he had no animus contra hendi when he executed the deed of gift, it was held in hid. Azim v. Md. Saadat Ali, AIR 1931 Oudh 177 that evidence to prove such a defence is admissible and does not voilate the provisions of Section 92. In the Full Bench decision of the Nagpur High Court in Asaram v. Ludheshwar, AIR 1938 Nagpur 335 Digby, J. while considering the argument that oral evidence is not admissible to show that two executed documents were the result of previous negotiations and a previous illegal agreement, said :”In reply to this I would quote from leake on Contracts, Edn. 4, Page 551:

“Though the contract is apparently valid in form or matter, extrinsic evidence is always admissible in variance of or in addition to the contract to show that the transaction is illegal and therefore void, even in the case of a convenant or contract under seal.”

Vivian Bose, J., as he then was, though did not accept the conclusions of Digby, J., agreed with him that “the two deeds of sale and surrender must be regarded as colourabl e and that when one looks behind them to the real transaction which the parties intended to effect we find that they tried (1) to effect a sale of the entire rights which the transferor possessed in the property ……..and (2) that they deliberately, separated the considerations for these two different objects.” Repelling the argument that in view of Section 92 of the Evidence Act, the Court is powerless to look behind a transaction which has been reduced to writing and determine its real nature, he said:

“…..All that Section 92 excludes is oral evidence to contradict, vary, add to or subtract from the terms of a contract which has been reduced to writing. It does not preclude a party from showing that the writing was not really the contract between the parties but was only a fictitious or colourable device which cloaked something else.”

In Rakkiyana v. Chinnu (1 supra), the Madras High Court also held that it is open to a person to prove that he executed a sale deed benami in favour of B in order to defeat the claims of a creditor. In such a case, the question really is not one under Section 92 of the Evidence Act regarding proof of a collateral oral agreement under which B was to hold the property for the benefit of the transferor, but a case where the transferor sought to establish by attendant circumstances that he did not intend by his deed to dispose of the beneficial interest in the property to the transferee. As pemted out by the Kerala High Court in Ouseph Chacko v. Raman Nair, even after the enforcement of the Benami Transactions (Prohibition) Act, 1988 and, inspite of the prohibition contained in Section 4 thereof, a right under the general law for a declaration from a Court of Law that a transaction is fictitious, sham or nominal and that it has not been acted upon and was never intended to be acted, is not taken away by the Benami Transactions (Prohibition) Act. That right survives, because a sham transaction is not benami. In Gangabai v. Chliabubai, the Supreme Court also said :

“…..It is clear to us that the bar imposed by Sub-section (1) of Section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub-section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham document. Sucha a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral evidence is admissible to show that the document executed was. never, intended to operate as an agreement but that some other agreement altogether, not recorded in the statement, was entered into between the parties.”

9. Having seen that Section 92 of the Evidence Act does not prevent evidence being let in to show the sham or nominal nature of the sale transaction, see Ratanlal v. Bandulal, AIR 1953 Hyderabad 174 let us examine as to how the question whether a sale deed is real or sham can be decided. In Tirupathi v. Lakshmana, the Madras High Court held:

“…….In my opinion, whether a sale deed was a sham and simulated one not intended to convey any title or whether it was real one intended to pass title to the transferee thereunder depends upon the ‘animus transferendi’ at the time when the parties entered into the transaction and each case has to be decided with reference to the* documents &. the surrburtding circumstances.”

In Udya Chand Dutt v. Saibal Son, it was con tended before the Supreme Court that one of the main indications which would show whether the transaction in question was one of loan and the document of sale was executed by way of security or that the transaction was an out and out sale of the property is whether the consideration appearing in the document appears to be too low. .If, the consideration is too low, it would indicate that the transaction could not have been one of sale. If the consideration is fair or reasonable, it would indicate that the transaction was one of sale.” The other indication of a sale would be that the possession after the transaction would pass to the vendee and not be retained with the vendor in the absence of special circumstances. Though the appeal by Special Leave was dismissed by the Supreme Court on the ground that no interference into the finding of the fact was called for the aforesaid contention was not rejected or held as untenable. In the context of these authorities, we are of the view that the following matters may be taken into account while considering or deciding the real nature of the disputed sale deed (Ex. A-l):

(i) The pleadings and the contents of the various disputed documents.

(ii) Failure and/or adequacy or inadequacy of sale consideration.

(iii) And the surrounding circumstances.

10. We may recollect that simultaneously on 19-6-1969 three documents were executed by and between the parties to this appeal in respect of one and the same property, (i.e., the suit property), “consisiting of a plot of land admeasuring 386 square yards, and building constructed thereon which is having a ground, floor, first floor and an incomplete second floor.” (Plaint pleadings). For the- reasons stated, we have doubted in Paragraph 7 of this judgment, if the consideration was really paid by the vendee to the vendor. Even otherwise, the alleged consideration of Rs. 20,000/- appeared to be too below the market price of the suit property consisting of a plot of land measuring 386 square yards with double storeyed building and incomplete second floor. On the date of suit, the respondent knew that the appellants were alleging about the inadequacy of sale consideration and, therefore, she had specifically pleaded in her plaint that: “It is denied that the consideration for the sale was inadequate in view of the fact that there was an agreement of reconveyance under which the plaintiff agreed to reconvey the property”. Yet she took no steps to lead any evidence to prove the market price of the suit property at the relevant time. Her husband Srinivasulu (P.W. 1) specifically stated in his cross-examination that: “I cannot give the market value qf the suit house at the time of Ex. A-1”. He further admitted, “I cannot say if the market value of suit house on the date of the suit was Rs. 3 lakhs and it was Rs. 90,000/- at the time of Ex. A-1”. Not only this, as pointed out by the respondent in her plaint, the Trial Court in the partition suit, the learned single Judge in first appeal arising out of that suit and the Division Bench of this Court in Letters Patent Appeals against the Judgment of the learned single Judge doubted .the genuineness of the sale deed (Ex/A-1), though on different grounds. The Trial Court in partition suit held it and the other two documents as “got up documents and they, were sham and nominal documents brought into existence.” (Plaint pleadings). The learned single Judge held the vacant site to be that of the joint: family, but “the money for the construction on the vacant site did not come Out of the joint family funds, but from some other sources”, indicating thereby a loan transaction. In the common judgment in Letters Patent Appeal Nos. 100/77 and 101/77, the Division Bench specifically held that the “material on record disclosed that the second defandant here in, (i.e., the present Appellant No. 2), borrowed money for the construction of the building”. (Plaint pleadings). TO sum up, the sale of the suit property in favour of the respondent herein is shrouded by suspicion from the very beginning.

11. In her plaint pleadings, the respondent did not say a word about the initial Agreement of Reconveyance executed along with the sale deed and the lease deed (in 19-6-1969. She ought to have explained as to why the second appellant was required to pay a sum of Rs. 30,000/-for reconveyance, when the sale consideration for Ex. A 1 was only Rs. 20,000/-. This was necessary in view of her stand that subsequent to the date of sale deed (Ex. A-l), the appellants had taken a loan of Rs. 20,t)00/- by executing two separate pronotes and, therefore, they had agreed to pay a sum of Rs. 40,000/-, (made up of sale consideration of Rs. 20,000/-and the loan of Rs. 20,000/-) fore conveyance of the property as per the second Agreement for Reconveyance dated 15-6-1972. From this, it may be deduced that on the date of sale, the appellants were indebted to the tune of Rs. 20,000/- and as a security for repayment of the loan, Ex. A-l sale deed was nominally executed. A further sum of Rs. 10,000/- might have been advanced by the respondent or her husband on the date of the alleged sale and that might have been secured by providing for payment of Rs. 30,000/- at the time of reconveyance as per the initial Agreement for Reconveyance dated 19-6-1969. It might not have been shown or included in the sale consideration of the sale deed (E; , A-l) for various reasons, one such reason being the motive to save additional stamp duty on the sale deed. This may also be treated as one of the several circumstances to hold that the sale deed was a nominal document, not intended to be acted upon by the parties and that it was a loan transaction. This inference gets support from the fact that respondent herself pleaded that subsequent to the date of sale, a sum of Rs. 20,000/- was advanced as loan to the appellants; Date or dates of loan were not disclosed by the respondent. She did not file the pronotes most probably because the one pronote might have shown loan dated 19-6-1969 and the second might have shown loan dated 15-6-1972; i.e., the dates on which the two Agreements for Reconveyance were executed.

12. It may be argued on behalf of the respondent that no such plea of loan transaction was raised by the appellants in their written statement and, therefore, the transaction cannot be looked into as a loan transaction; but as held by Vivian Bose, J., as he then was, in the Full Bench decision of the Nagpur High Court in Asaram v. Ludheshrvar (4 supra):

“……It has repeatedly been held that pleadings in the mofussil are not to be construed too strictly and while I am not prepared to allow unlimited license, if a point has been taken in substance and has been properly understood and properly, tried, then I do not think an Appellate Court would be warranted in throwing out an otherwise good claim on that ground alone.”

In essence, the plea of the appellants was that the alleged transaction of sale was no sale at all, as it was not intended to be acted upon by the parties. It was alleged to be a nominal and sham transaction. Whether it was intended to serve the collateral purpose of security for repayment of loan, or was a device to defeat the claim of the plaintiffs in the partition-suit, is immaterial. The main question is whether it was intended to be acted upon by the parties and for deciding that question, all such attending circumstances, which may be helpful in arriving at a just conclusion may be looked into. In other words, though the plea of loan was not raised, there are materials to indicate that it was a loan transaction and those materials are supplied by the respondent herself by her plaint pleadings and the documents executed by her and referred to hereinbefore.

13. Though in the plaint pleadings, it was asserted by the respondent that the appellants paid rent of the suit property for a few years, her husband as P.W.I was unable to say for bow many years the rent was paid. He further said, “We did not apply for mutation of municipal records since Ex. A-l. We never paid either house tax till, now, or water or current charges”. In his examination in chief, P.W. 1 stated that “when we purchased the suit house, the second floor was incomplete. I, completed the second floor after I purchased it with my funds.” In cross-examination, he said, “I do not have bills of purchase as to building material, but I showed the expenditure in my account”, but the account books were not produced. If the second floor was constructed by the respondent or her husband, they would have naturally insisted for increase in the rent reserved under the lease deed (Ex. A-2). The respondent also owed an explanation as to how the respondent or her husband completed the second floor of the house, when as per Clause 6 of the lease agreement, “the tenant is entitled to undertake necessary repairs, additions and alterations to the building and white washing and colouring etc., at his own expenses to suit his needs and necessities and that of his tenants or sub-tenants”. Further, the appellants might have been liable to pay the minicipal taxes etc. under the lease agreement, but what prevented the respondent from getting her name mutated in municipal records for all these long years, if the transaction was really mat of sale?

14. In his deposition, the husband of the respondent (P.W. 1) stated, “We purchased vacant house under Ex. A-l. There are three mulgies in the ground floor. They were also vacant then”. But in the lease agreement (Ex. A-2), recitals to the contrary are made. In Clause 3 of that agreement, the first appellant as tenant was “authorised and permitted to let or sub-let the said building, Mulgies or any portion thereof to any person he likes or to continue the present tenants and as such is entitled to collect rents from them”. The respondent had become the land-lord of the tenants existing on the date of sale deed by operation of law, but they were treated as the tenants of the appellants. The lease agreement gave liberty to the tenant “to continue the tenancy on the conditions above stipulated even after the expiry of the (initial lease) period”.

15. All Municipal demands were made to and satisfied by the appellants. There is absolutely no evidence on record to show, that the respondent ever exercised her right of ownership over the suit property ever since the date of her alleged purchase in the year 1969 at any time prior to her notice dated 19-2-1980 and the date of the present suit. She was also not in actual physical possession of the suit property ever since the date of the alleged purchase. The sale deed (Ex. A-l), or the lease deed (Ex. A-2) did not say that the existing tenants would become the tenants of the purchaser, instead the Vendor’s husband was allowed to collect and appropriate the rent from the existing tenants as his own income. As per plaint pleadings, the respondent had derived knowledge of the partition suit between the family members of the appellants, but she did not intervene during the trial of the suit. She approached the appellate Court only after the partition suit was decreed, maybe at the instance of the appellants. The cumulative effect of all these facts and circumstances is the irresistible conclusion that the sale deed (Ex. A-l) did not represent the real intention of the parties and that it was not intended to be acted upon by them.

16. If the sale deed fails, the other two documents, purporting to be lease deed and Reconveyance Agreement dated 19-6-1969 and the further Reconveyance Agreement dated 15-6-1972 would also fail as fictitious documents. They might have been executed to justify the possession of the appellants over the suit property and to safeguard the interest and /or the title of the real owners of the property against possible misuse of the nominal sale deed by the sham purchaser. Some other reason for bringing them into existence is also possible, but it does not appear necessary to probe any further in that regard for the purpose of deciding the present dispute.

17. Now we come to the last submission made on behalf of the respondent. According to the learned counsel for the respondent, if the appellants did not treat or consider the sale to be real transaction and, therefore, not binding on the second appellant (the vendor), she ought to have filed a suit for cancellation of the sale deed. That having not been done, the appellants cannot be allowed to go back the recitals of the sale deed. In support of her contention, the learned counsel for the respondent cited two decisions of the Calcutta High Court in A.E.G. Carapiet v. A.Y, Derderian, AIR 1951 Calcutta 359 and Atin Bose v. Heavy Engineering Corporation Ltd., .

18. We find no substance in the contention. Firstly, the learned counsel for the respondent appears to have mis-cited the authorities, because the Calcutta cases do not appear to deal with the point raised before us. Secondly, the argument appeared to be mis-conceived and /or mis-directed in the present case. According to us, only in such cases where a sale is challenged on the ground of fraud, coercion, or undue influence; and/or on some such other grounds, the person alleging sale as void on such grounds is required to file a suit for cancellation of the sale deed and so long as the sale deed is not cancelled by a Court of competent Jurisdiction, it continues to be a valid document. But in a case of the present nature, where the plea is that there was no sale at all, it is not necessary for the party setting up such a plea to file a suit for cancellation of any such fictitious document.

19. The learned single Judge of this Court, or the trial Court did not examine the case in its proper perspective and, therefore, both the Courts appear to have come to a wrong conclusion. Accordingly for the reasons aforesaid, we are of the view that the judgment and decree passed by the learned single Judge of this Court and those of the trial Court deserve to be set aside.

20. In the result, this Letters Patent appeal succeeds and if is hereby allowed. The Judgment and decree of the learned single Judge and those of the trial Court are, set aside. In the facts and circumstances of the case,; both the parties are directed to bear their costs as incurred throughout.


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