IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 24.04.2007
Coram
The Honourable Mrs.Justice PRABHA SRIDEVAN
S.A. No.2006 of 2003
and
CMP. No.18309 of 2003
D.Arumuga Nadar ...Appellant
Vs
1. K.Muthulakshmi
2. P.Kandaswamy ...Respondents
Second Appeal against the judgment decree of the
learned 4th Additional Judge, City Civil Court, Chennai
dated 17.7.2003 made in A.S.No. 134/01 reversing that of the
learned 16th Assistant City Civil Judge, Chennai dated
21.3.2000 made in O.S.No.6778/93.
For Appellant : Mr.B.Subramanian
For Respondent : Mr.S.Jayaram, Senior counsel for Mr.Y.K.Rajagopal.
JUDGMENT
The following substantial questions of law were framed
at the time of admission:
(i) Whether the Lower Appellate Court
was right in holding that the rule of
estoppel embodied in Section 41 of the
Transfer of Property Act will not apply
to the present case?
(ii) Whether the Lower Appellate Court
was right in holding that the principles
of caveat emptor will preclude the
appellant from seeking protection under
Section 41 of the Transfer of Property
Act?
(iii) Whether the Lower Appellate Court
was right in holding that the claim of
the appellant, that he became a lessee
under the second respondent only will
prevent him from claiming that the
conduct of the first respondent will
prevent her from suing for possession?
(iv) Whether the Lower Appellate Court
was right in holding that the precedents
cited by the appellant will not apply to
a case of a lease?
2. The appellant who is the defendant resists the suit
for recovery of possession on the ground that the husband of
the respondent had leased the property to him and allowed
him to construct the superstructure and the respondent had
acquiesced with the same. The respondent’s case that there
was no acquiescence has been accepted by the lower Court.
3. The respondent owns the suit property by virtue of
the settlement deed document No.3994/1974 dated 30-09-1974
by which her sister had settled the property on her. She
has been the Matron in the Air-force and has been posted
away from Madras for several years. Taking advantage of her
absence the second respondent, her husband had leased out
the property without authority to the appellant. Since the
first respondent has not permitted such lease, the
appellant’s presence is that of a trespasser. The appellant
had also obtained electricity connection illegally. The
first respondent had issued notice to the Commissioner
Corporation and other officials that there should be no
mutation of records in favour of the appellant. To her
letter written to the Electricity Board she received a reply
that there has been a decision in O.S.No.684 of 1988 that
the appellant is the lawful tenant in respect of the suit
property. It is only thereafter that the first respondent
came to know about some arrangement between the appellant
and the second respondent. The first respondent came to
understand from the records in that suit that a decree for
injunction has been passed against the second respondent her
husband. The alleged document of lease was not produced.
Any arrangement between the appellant and the second
respondent will not bind the first respondent and therefore,
the suit was filed for declaration and recovery of
possession. After issuing a notice on 08-04-1992 to which a
reply was given b the appellant on 24-05-1992. The second
respondent remained ex-parte. The appellant resisted the
suit mainly denying the title of the first respondent in the
suit property. According to the appellant he had no
knowledge of the alleged settlement dated 13-09-1974.
According to the appellant, the first respondent had never
enjoyed the suit property and had no right to the same. The
second respondent had denied that the first respondent was
employed in the Air-Force and that taking advantage of her
absence the second respondent had leased out the property to
the appellant. The first respondent is fully aware of the
construction of the superstructure by the appellant. The
appellant is not a trespasser but a lawful tenant. When the
second respondent admitted to throw out the appellant, he
filed O.S.No.624 of 1978 and a decree for injunction was
granted in his favour. Against that, the second respondent
filed O.S.No.370 of 1991, which was dismissed. After
realising that it was not possible the appellant/the first
respondent by abusing the process of law had filed the
present suit. All the other allegations in the plaint were
denied. The Trial Court dismissed the suit holding that the
appellant is a tenant and the first respondent is not
entitled to recover possession. The aggrieved first
respondent filed the appeal. In the appeal, the first
respondent’s title to the suit property was declared and the
suit was decreed as prayed for and now the second defendant
in the suit who claims to be the tenant under the first
respondent’s husband has filed this appeal.
4. The learned counsel for the appellant submitted that
this is a case where the conduct of the parties would
clearly establish that the first respondent herein knew
fully well that her husband had leased out the property to
the appellant herein. In fact, that has even been pleaded in
the plaint. Thereafter, the respondents attempted to throw
the appellant out. A suit was filed, followed by an appeal
and both in the suit and appeal, the husband/first
respondent lost. The finding is that the super structure on
the property was put up only by the appellant. After having
failed, the second respondent had chosen to file a suit for
declaration of title and recovery of possession.
5. The learned counsel for the appellant would submit
that in 1988, the respondent had given a complaint objecting
to the construction put up by the appellant and for five
years, there was silence and only thereafter, the suit was
filed. The respondent was waiting in the wings to see the
outcome of the suit filed by the husband and only when she
knew that the suit met with failure, she filed her suit.
Learned counsel submitted that it is hardly believable that
the first respondent would not have known about the
proceedings initiated by the husband when it has been proved
by documentary and oral evidence that the husband and the
wife live together in the suit property. The learned counsel
submitted that the finding of the lower court with regard to
Section 41 of the Transfer of Property Act was totally
erroneous.
6. The learned counsel also submitted that the court
ought to have seen the effect of the judgment obtained by
the appellant against the husband of the respondent. The
learned counsel relied on the following decisions
(a) In 1993 (4) SCC 349 (GURU AMARJIT SINGH v. RATTAN
CHAND), wherein the Supreme Court dealt with the
circumstances in which Section 111 (g)(1) Transfer of
Property Act would apply;
(b) In AIR 1965 MADRAS 318 (ACC LTD v. RAMAKRISHNA),
where the Division Bench of this Court, applying the
doctrine of equitable estoppel, held that the owner is
estopped from recovering possession because of his conduct
and is not entitled to damages for the portion occupied by
trespasser.
(c) In AIR 1981 MADRAS 220 (R.S.MUTHUSWAMI GOUNDER v.
A.ANNAMALAI), it was held that the plaintiff could have come
to know in time about the defendant putting up construction
on the suit land, had he cared to find out and the principle
of acquiescence would applied and plaintiff was therefore
entitled only to a decree for compensation.
(d) In AIR 1977 MADRAS 342 (S.PALANIVELU v.
K.VERADAMMAL), it was held that there was construction by a
trespasser and acquiescence by owner while the trespasser
built on the trespassed land and it was held that owner
shall be compensated for the value of the trespassed
portion.
(e) In 1957 (II) MLJ 603, (KUTTAPPA NAIR v.
KUTTISANKARAN NAIR), it has been held that the equitable
doctrine of estoppel embodied in Section 41 of the Transfer
of Property Act would apply.
(f) In AIR 1979 SUPREME COURT 553 (SYED ABDUL KHADER v.
RAMI REDDY), it was held that Section 41 of the Transfer of
Property Act provides that where with the consent, express
or implied, of the person interested in immovable property,
a person is the ostensible owner of such property and
transfers the same for consideration, the transfer shall not
be voidable on the ground that the transferor was not
authorised to make it.
(g) In AIR 1999 MAD 435 (S.GOVINDARASU UDAYAR v.
PATTU), admissibility of judgments not inter partes was
considered.
7. The learned senior counsel appearing for the
respondent would submit that in the case on hand, no
interference is warranted in the second appeal. The learned
counsel submitted that even assuming without admitting that
the appellant did not know that the second respondent was
the real owner of the property, as soon as the notice
Ex.A30, which is dated 28.4.92 was issued, the appellant
ought to have known who was the real owner and since it was
a case of total denial, it is not open to him now to invoke
Section 41 of the Transfer of Property Act or say that the
husband had, with the consent and authority of the first
respondent, implied or express, inducted the appellant as a
lessee in the suit property. The learned senior counsel
submitted that the respondent had proved her title and
therefore, she is entitled for possession.
8. The trial court dismissed the suit and aggrieved,
the first respondent filed an appeal and succeeded. The
prayer is for declaration of title. The learned counsel for
the respondents relied on Ex.A1, which is the settlement
deed dated 30.9.74. The first respondent has given evidence
as P.W.1. She has stated that her sister had settled the
property on her as per Ex.A1. According to her, she had
served at various places in the Army from 27.2.63 to 24.5.94
and she had marked Ex.A13 to show the places where she had
served. The appellant entered possession on 18.1.88. She had
given a complaint and she had also given a complaint to the
Commanding Officer, Ex.A3. There was no licence for running
a firewood shop and again, in the letters to the Electricity
Board under Ex.A8 to A11, it was pleaded that electricity
connection should not be given. According to her, as she had
been serving in various places, she could not immediately
file a suit for recovery of possession. On consideration of
oral and documentary evidence, the Appellate Court came to
the conclusion that the suit property belonged to the first
respondent.
9. The next question is whether she is entitled to
recovery of possession. The learned counsel for the
appellant relied on the various judgments wherein the
principle of acquiescance was applied to deny the relief of
possession and compensation was awarded. But in this case,
the appellant himself has stated that the respondent was
nowhere in the picture and had never seen her. In Ex.A31,
which is the reply to Ex.A30, the following the sentences
from Ex.A31 are relied :
“…. In the first instance he wish
to bring to your notice that at no time
he became a tenant under your client. He
has not at all seen a lady with name
Muthulakshmi alleged to be the owner of
the land wherein my client has put up
superstructure at his own cost……………..
While that is so my client is not
able to understand who is the said
Muthulakshmi for whom you have issued the
notice.
As already stated, my client has nothing
to do with your client. Hence, the
question of vacating and handing over
vacant possession of your client nor
payment of Rs.750/- per month does not
arise. ”
So according to him, he had never seen the defendant. The
appellant D.W.1 in his evidence stated as follows :
VERNACULAR (TAMIL) PORTION DELETED
10. Except for one sentence where he had stated, @thjp
gyjlit thlif tNypj;jpUf;fpwhh;@, the case of the appellant
herein is one of total denial of the first respondent’s
right. The learned counsel for the appellant would
vehemently argue that this is not a case where there can be
a forfeiture of the lease by denial of title since the
plaintiff had filed a suit alleging that he was a
trespasser. The documentary and oral evidence extracted
above would go against the appellant not in the context of
forfeiture of lease, but because this clearly goes to show
that the appellant cannot invoke the principle of implied
authority. It is now his case that the real owner, viz., the
first respondent had consented to her husband leasing out
the property to the appellant. Then he would first have to
admit that it is the first respondent who is the owner of
the property, if he has to succeed on the ground that the
first respondent being a real owner had acquiseced to his
construction of the superstructure. Then he will not only
have to admit that the first respondent is the real owner,
but also that she had seen the superstructure come up and
had not lifted her little finger. Whereas this is a case
where he claims he has never seen the lady, namely
Muthulakshmi and she has never been in Madras. The first
respondent’s stand is she has all along objected to the
appellant’s continuance in possession. While that is so, it
is clear that even if he had pleaded that the first
respondent had acquiesced, he has not proved the same
because his oral evidence goes against that stand. Though in
the written statement he has stated that the first
respondent is fully aware that the land has been leased out
to this defendant, in para 10, he had stated that the
plaintiff is not entitled to get possession from the
defendant as she has nothing to do with the suit property.
11. The learned counsel for the appellant would submit
that para 10 should be construed to mean that she has
nothing to do with his character as a tenant. It is
difficult to place this construction on the pleading. When
it is a case that she is not entitled to get possession, it
only means that he denies that she is the owner of the
property and therefore not entitled to get possession.
Though there were pleadings in the written statement and in
the additional written statement that she was aware of the
construction, in the face of his oral evidence that she was
not the owner and had never seen her, this would destroy his
case of acquiescence and implied consent.
12. In P. John Chandy and Co. (P) Ltd. v. John P.
Thomas,(2002) 5 SCC 90 , at page 97 as regards acquiesence
it is held that, “inaction in every case does not
necessarily lead to an inference of implied consent or
acquiescence. …. To establish implied consent there has to
be something more than mere inaction or lack of initiative
on the part of the landlord.”
13. In Canara Bank v. Canara Sales Corpn., (1987) 2 SCC
666 , at page 677 the Supreme Court held,
“In order to sustain a plea of acquiescence, it is
necessary to prove that the party against whom the said plea
is raised, had remained silent about the matter regarding
which the plea of acquiescence is raised, even after knowing
the truth of the matter.”
14. In Suraj Rattan Thirani v. Azamabad Tea Co.
Ltd.,(1964) 6 SCR 192, it is held, “In order that Section 41
of the Transfer of Property Act could be attracted, the
respondents should prove that Ismail was the ostensible
owner of the property with the consent of his co-sharers and
besides that they took reasonable care to ascertain whether
Ismail had the power to make a transfer.”
15. In Gurbaksh Singh v. Nikka Singh,1963 Supp (1) SCR
55, the Supreme Court held, “The general rule is that a
person cannot confer a better title than he has. This
section is an exception to that rule. Being an exception the
onus certainly is on the transferee to show that the
transferor was the ostensible owner of the property and that
he had, after taking reasonable care to ascertain that the
transferor had power to make the transfer, acted in good
faith. In this case the facts are tell-tale and they
establish beyond doubt that the appellant had the knowledge
that the title of his transferor was in dispute and he had
taken a risk in purchasing the same.”
16. Section 41 of the Transfer of Property Act reads
thus: “Where, with the consent, express or implied, of the
persons interested in immoveable property, a person is the
ostensible owner of such property and transfers the same for
consideration, the transfer shall not be voidable on the
ground that the transferor was not authorised to make it:
provided that the transferee, after taking reasonable care
to ascertain that the transferor had power to make the
transfer, has acted in good faith.”
17. In the above circumstances, the judgment obtained
by the husband is also of not of any use to the appellant.
Whatever the husband might have done, the appellant was not
able to prove that it was done with the implied authority or
consent of the first respondent. The first respondent has
established the title and it is not correct to state that
the lower appellate court had on a wrong appreciation of
Section 41, had come to its conclusion. A reading of the
judgment of the Appellate Court shows that it had rejected
the plea of the appellant that the lease was created by the
husband of the first respondent with her consent.
18. In these circumstances, none of the substantial
questions of law arise for consideration. Hence, the second
appeal is dismissed.
19. The learned counsel for the appellant prays for
time to handover possession of the property. The appellant
shall file an undertaking to the effect that he will hand
over possession on or before October 23, 2007, i.e., within
a period of six months from this date and that he will not
create any further encumbrance or a third party interest in
the suit property. This undertaking shall be filed into the
court on the reopening day, i.e. on 4.6.2007, after serving
a copy thereof to the first respondent. On such filing of
the undertaking, the first respondent shall not be entitled
to execute the decree till the expiry of the above said
period and if no such undertaking is filed, the respondent
will be entitled to act as per law.
bg
To
1. The 4th Additional Judge
City Civil Court
Chennai
2. The 16th Assistant City Civil Judge
Chennai
[PRV/10424]