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Madras High Court
Sivaprakasam vs Ilangovan on 6 August, 2010
       

  

  

 
 
 In the High Court of Judicature at Madras
Dated:   06.08.2010
Coram:
The Honourable Mr. Justice R.SUBBIAH

Second Appeal  No.174 of 2002
and C.M.P.No.1356 of 2002 

Sivaprakasam						..Appellant


					..vs..

1. Ilangovan, rep.by Power Agent
   Sundaramoorthy
2. Jaganathan
3. Vellasamy						..Respondents

	Second Appeal under section 100 of Civil Procedure Code  filed against the  judgment and decree  dated 19.10.2001 in A.S.No.59 of 2001 on the file of Principal  Sub Court, Mayiladuthurai, confirming the  judgment and decree dated 22.11.2000  in O.S.No.116 of 1996  on the file of  District Munsif Court, Sirkali.

	For Appellant     :  Mr.S.Sounthar

	For Respondents   :  Mr.A.Muthukumar for R1


JUDGMENT

The unsuccessful 1st defendant is the appellant. This Second Appeal is directed against the decree and judgment dated 19.10.2001 passed by the learned Principal Subordinate Judge, Mayiladuthurai, in A.S.No.59 of 2001, whereby the decree and judgment dated 22.11.2000 passed by the learned District Munsif, Sirkali, in O.S.No.116 of 1996 were confirmed.

2. The 1st respondent herein is the plaintiff, who filed the suit in O.S.No.116 of 1996 on the file of District Munsif Court, Sirkali, against the appellant and respondents 2 and 3 herein as defendants 1 to 3, to hand over the possession of the suit property and also for future mesne profits.

3. The case of the plaintiff, as stated in the plaint, is as follows:-

The 1st defendant is the paternal uncle of the plaintiff. The suit property is the self acquired property of the grandfather of the plaintiff, viz., Govindasamy Padayachi, who had two sons Kanagasabai Padayachi (father of the plaintiff) and Sivaprakasam, who is the 1st defendant. The said Govindasamy Padayachi exectued a Will dated 25.02.1989, in which the suit property described as ‘A’ Schedule, was bequeathed to the plaintiff absolutely. The said Govindasamy Padayachi died on 02.03.1990 and therefore, the Will had come into existence after his death. As per the terms of the Will dated 25.02.1989, the suit property had to be managed by the 1st defendant and whenever the plaintiff makes a demand, the 1st defendant should surrender possession of the suit property to the plaintiff. The plaintiff is residing at Singapore. When the plaintiff’s father came over to India and orally demanded possession of the suit properties from the 1st defendant on 19.03.1996, he did not comply with his demand. Hence, the plaintiff issued a legal notice dated 23.03.1996 calling upon the 1st defendant to surrender possession of the suit properties, but the 1st defendant sent a reply dated 26.03.1996 with false allegations stating that the plaintiff had no right to own the properties in India and he had not authorised his father to make the demand on his behalf and for which, the plaintiff sent a rejoinder dated 02.04.1996, but the 1st defendant had not surrendered possession of the suit properties. Hence, the plaintiff was forced to file the suit as against the 1st defendant and also defendants 2 and 3, who were in possession of the suit properties under some arrangement with the 1st defendant, to surrender possession of the suit properties and put the plaintiff in possession of the same and to pay future mesne profits.

4. The said suit was resisted by the 1st defendant by taking a defence that the plaintiff is a citizen of Singapore and as such, he is not entitled to hold the property in India and it is a violation of the provisions of the Foreign Exchange Regulation Act, 1973. As per the Will, the 1st defendant had to manage the suit properties till a demand is made by the plaintiff; but so far, no valid demand was made by the plaintiff and the father of the plaintiff is not entitled to demand possession of the suit properties nor can he obtain possession. Moreover, in the year 1993, when the plaintiff and his mother came to India, they informed to the 1st defendant that they were not in need of the suit properties and the father of the plaintiff has also informed him that he can take the properties absolutely. Thus, the suit may be dismissed.

5. On the basis of the above said pleadings, the trial court has framed eight issues and in order to prove the case of the plaintiff, the power agent of the plaintiff was examined as P.W.1 and Exs.A-1 to A-7 were marked and on the side of the defendants,the 1st defendant was examined as D.W.1 besides examining two other witnesses as D.Ws.2 and 3 and Ex.B-1 was marked. The trial court, on a consideration of the entire evidence on record both oral and documentary, has decreed the suit with a direction to the plaintiff to file an application under Order 20 Rule 12 C.P.C. for future mesne profits. As against the judgment of the trial court, the 1st defendant filed an appeal in A.S.No.59 of 2001 on the file of Principal Sub Court, Mayiladuthurai, wherein the appeal was dismissed by confirming the judgment of the trial court. Aggrieved by the judgment of the appellate

court, the 1st defendant has filed this present second appeal.

6. At the time of admission of the second appeal, this Court framed the following substantial questions of law for consideration:

(1) Whether the respondent/plaintiff is entitled to claim possession of suit property in law, without coming back to India which is a condition precedent prescribed in Ex.A-2 Will ?

(2) Whether the Courts below erred in construing the meaning of bequeathing clause found in the Will ?

(3) Whether the suit claim is hit by the provisions of Foreign Exchange Regulation Act, since the 1st respondent is a citizen of foreign State ?

7. Learned counsel appearing for the appellant/1st defendant submitted that as per the terms of the Will Ex.A-2 dated 25.02.1989, the appellant should manage the suit properties till a valid demand is forthcoming from the 1st respondent/plaintiff. The 1st respondent is a citizen of Singapore. It has been specifically stated in Ex.A-2 that the properties should be managed by the appellant and the possession should be handed over to the 1st respondent after he returned to India from Singapore. Thus, by relying upon the said clause found in the Will, the learned counsel contended that only if a demand is made by the plaintiff after returning from Singapore, the possession of the properties should be handed over to him and till such time, the appellant is permitted to manage the properties. The legal notice sent by the father of the plaintiff cannot be construed as a valid demand for handing over possession of the suit properties as per the terms of the Will marked as Ex.A-2. Moreover, the legal notice was issued by the father of the plaintiff himself and no authority was given by the plaintiff to his father to make such a demand and above all, as per the terms of the Will, the demand can be made by the 1st respondent only when he returns from Singapore. Therefore, unless a valid demand is made, the appellant need not surrender possession. That apart, when the 1st respondent is a Singapore citizen, he cannot hold property in his name in India without the sanction from the Reserve Bank of India. Hence, the suit filed by the plaintiff was hit by the provisions of the Foreign Exchange Regulation Act, 1973 and the same is liable to be dismissed.

8. It is further submitted by the learned counsel for the appellant/1st defendant that originally the suit was filed by the 1st respondent through his father as the power agent and the power deed was not marked as a document; but subsequently, pending suit, the plaintiff has given power to one G.Sundaramoorthy and the said power deed was marked as Ex.A-1 and the same was executed only at Singapore. Therefore, it cannot be construed as a valid power deed. Under such circumstances, the suit is liable to be dismissed. In support of his contentions, the learned counsel has also relied upon the judgments reported in (2001) 1 M.L.J.188 (SAHRUVAN NACHIAR ..vs.. V.S.MOHAMMED HUSSAIN MARACAIAR) and 2001-1-L.W.161 (R.SAMBASIVAM ..vs.. THANGAVELU DHANABAGYAM).

9. Per contra, the learned counsel for the 1st respondent/ plaintiff submitted that there is no pre-condition under the Will that only if the 1st respondent returned to India from Singapore, the possession of the properties had to be handed over to him by the appellant. On the other hand, the tone of the Will would reveal that till a demand is made by the 1st respondent, the properties have to be managed by the appellant. Therefore, it is incorrect to state that there is no valid demand. It could be seen from the evidence of D.W.1 that the appellant came to India in the year 1996 along with his parents and in 1997 the plaintiff’s father came to India and made a demand to the appellant, which would show that there was a persistent demand on the side of the 1st respondent to hand over the possession of the properties and no cross-examination was done with regard to the power deed and hence, at this length

of time, it cannot be said that the power deed is not a valid one.

10. It is further submitted by the learned counsel for the 1st respondent that even if there is a violation of the provisions of the Foreign Exchange Regulation Act, that person can only be penalised as per the provisions of the said Act and there is no provision in the said Act to make the transaction as void nor can it be said that no title to the property passed on to the purchaser. When that be the legal position, the appellant has no locus standi to raise such a defence.

11. Heard the learned counsel for the parties and perused the materials on record.

12. There is no dispute by both sides with regard to the relationship of the appellant and the 1st respondent. It is the case of the 1st respondent/plaintiff that the suit properties were the self acquired properties of his grandfather Govindasamy Padayachi and he bequeathed the suit properties to the 1st respondent as ‘A’ Schedule properties in the Will marked as Ex.A-2. Since the 1st respondent was residing at Singapore, in the said Will, it was provided that the properties should be managed by the appellant, the paternal uncle of the plaintiff and after the plaintiff’s return from Singapore to India, the possession of the properties should be handed over to him. The 1st respondent’s father sent a legal notice dated 23.03.1996 marked as Ex.A-3 demanding possession of the suit properties on behalf of his son, the plaintiff. But, according to the appellant, the said notice was sent by the plaintiff’s father without any authority given by the plaintiff and unless the plaintiff returns to India and makes a valid demand, as per the terms of the Will, he need not surrender the possession of the suit properties. It is the further submission of the appellant that since the 1st respondent is a citizen of Singapore, he cannot hold properties in his name in India since the same would amount to the violation of the provisions of the Foreign Exchange Regulation Act. In view of the submissions made by the learned counsel on either side, the question that arises for consideration in this appeal is, whether there was a valid demand on the side of the plaintiff for handing over possession of the suit properties by the appellant and as a citizen of Singapore, whether the 1st respondent cannot hold the properties in India, which would entitle the appellant to deny surrender of possession ?

13. With regard to the first ground raised by the learned counsel for the appellant, it is the case of the appellant that unless a demand is made by the 1st respondent himself after return to India, he need not hand over the possession of the suit properties. But, on a reading of the contents of Ex.A-2, Will, I find that the intention of the testator is that the properties should reach the hands of the plaintiff and till such time, the appellant had to manage the same. The relevant portion of the Will reads as follows:

“///////vd; $Ptjpirf;Fk; gpwF ,jdoapy; ‘A’ bc&l;a{ypy; fz;l brhj;ij vd; K:j;jkfd; tapw;Wg;ngud; jw;rkak; rp’;fg;g{hpy; ,Uf;Fk; fdfrig kfd; ,s’;nfhtd; mile;J rh;tRje;j[pukha; Mz;L mDgtpj;Jf;bfhs;s ntz;oaJ/ mtd; rp’;fg;g{hpy; ,Ue;J vd; $Ptjpirf;Fk; gpwF tuhky; ,Ue;jhy; mtDf;F tplg;gl;l brhj;Jf;fis vd; ,isakfd; rptg;gpufhrk; guhkhpj;J te;J ic&goahd; tUk;bghGJ ic&goahd; trk; tpl;Ltplntz;oaJ/ /////@

From the above, I do not find any condition that only on return from Singapore, the possession of the properties has to be handed over to the 1st respondent/plaintiff. Though a submission was made by the learned counsel for the appellant that so far no demand was made by the 1st respondent directly, in my considered opinion, the very factum of filing of the suit itself would show that the demand was made by the 1st respondent to get possession of the properties. Even D.W.1 had admitted in his cross examination that,
” ///////mLj;j gazkhf 1997y; te;jhh;fs;/ mg;nghJ fdfrig kl;Lk;jhd; te;jhh;/ vd;dplk; te;J nfl;lhh;/ ehd; brhj;jpid nghf;fpak; itj;J xU tUlk; MfpwJ/ ehd; mij 2 tUl’;fspy; kPl;L jUtjhf brhd;ndd;/ mth; clnd juntz;Lk; vd;W nfl;lhh;/ mth; nfl;ljw;F nghf;fpak; vd;Wk; bfhLf;fKoahJ vd;Wk; brhd;ndd;/ kPl;lgpwF fdfrigaplk; bfhLf;ftpy;iy////@
Therefore, the evidence on record would show that there is persistent request from the side of the plaintiff and his family members for the delivery of possession of the properties, whereas the appellant is evading to deliver the same on some pretext. Therefore, I am not inclined to accept the submission of the learned counsel for the appellant that there is no valid demand.

14. So far as the next fold of submission is concerned, the learned counsel for the appellant submitted that as a foreign citizen, the 1st respondent/plaintiff cannot hold property at India without the permission of the Reserve Bank of India. In support of his contention, he has also relied upon the judgment reported in (2001) 1 M.L.J.188 (supra),, wherein it has been held as follows:

“12. The learned counsel for the defendants contended that the Bombay High Court dealt with Sec.31 of the Act in its decision in Joaquim Mascarenhas Fluza v. Smt.Jaime Rebello and another, (1989) 66 Company Cases 349. In the above decision, the Bombay High Court has held as follows:

“The principle laid down in the said section is, inter alia, that a foreigner shall not hold any immovable property situate in India unless with the previous general or special permission of the Reserve Bank or after making a declaration of the holding as required in sub-Sec.(4). The dictionary meaning of the word “hold” as given in The Shorter Oxford English Dictionary is “to have or keep as one’s own; to own as property; to be in possession or enjoyment of”. In other words, the word “hold” embraces both the title and possession. This was otherwise the view taken by the Supreme Court in Handique’s case, (1966) 60 I.T.R.216. In fact, it was observed in the said case that the expresison “holds” appearing in the Assam Agricultural Income-tax Act includes a two-fold idea of the actual possession of a thing and also of being invested with a legal title. Though this observation was made in connection with the said Act, the fact remains that the view taken is harmonious with the dictionary meaning of the said word. The wording of sub-Secs.(1) and (4) of the Act does not justify or warrant the giving of a different meaning to the word “hold” or “holding” occurring therein and, as such, the said word is to be construed as meaning having title to or possession of any immovable property.

Sub-Sec.(1) of Sec.31 as already stated, inter alia, provides that no person who is not a citizen of India shall, except with the previous general or special permission of the Reserve Bank acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India. Therefore, it becomes clear from the said provision of law that a foreign national cannot hold any immovable property situate in India whatever is the means by which the said property comes to him”.

13. The Bombay High Court has held that the word “hold” is to be construed as meaning having title to or in possession of any immovable property. I agree with the view expressed in the above decision. It becomes clear that a foreigner shall not hold any immovable property situate in India unless with the previous permission of the Reserve Bank of India. The plaintiff, as trustee, is in possession of suit properties and is maintaining them. The plaintiff has not stated that he has obtained permission from Reserve Bank of India to hold immovable property as contemplated under Sec.31. The recitals in Ex.A-4 settlement deed contemplate actual possession of the properties by the trustee and maintaining them by keeping accounts. The plaintiff, as British citizen, cannot hold any immovable property as trustee in India”

15. In 2001-1-L.W.161 (supra), it has been held as follows:

“12. Now, I will come to the effect of Section 31 of Foreign Exchange Regulation Act. In ILR 1987 (2)) Punjab & Haryana 96 (Piara Singh v.Jagtar Singh), very same question came for consideration. In paras 10 and 11 of the Judgment, it is held thus,
“10. I have given my thoughtful consideration to the argument but do not find any merit in it. In order to decide the matter, it is necessary to read relevant portion of the said sub-section (1) of Section 31 of the Act which is as follows:-

Sec.31(1). “No person who is not a citizen of India and no company (other than a banking company) which is not incorporated under any law in force in India or in which the non-resident interest is more than forty percent, shall, except with the previous general or special permission of the Reserve Bank, acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India:

Provided that nothing in this sub-section shall apply to the acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years”.

11. It is true that the section provides that without the previous permission of the Reserve Bank, a person who is not a citizen of India, cannot acquire property, but it does not provide that if some one purchases any property the title therein does not pass to him. What the Act provides is that if a person contravenes Section 31 and some other sections, he can be penalized under Section 50 and can also be prosecuted under Section 56. However, there is no provision in the Act which makes transaction void or says that no title in the property passes to the purchaser in case there is contravention of the provision of sub-sections (1) of Section 31. Section 63 contains a proviso regarding confiscation of certain properties but it does not contain any provision for confiscation if there is breach of the provisions of sub-section (1) of Section 31. Therefore, the property purchased in contravention of sub-section (1) of Section 31 is also not liable to confiscation. In the circumstances, it cannot be held that the plaintiffs are not entitled to obtain possession of the property or recover damages for its use and occupation”.

From the above decision also it is clear that landlords herein have acquired valid title and when they became landlords, entitled to receive rent from the tenant. Section 31 of Foreign Exchange Regulation Act is not having the effect of nullifying the transfer and the purchasers are also getting good title to the property”.

16. A reading of the judgment in 2001-1-L.W.161 would show that if a person contravenes the provisions of section 31, he can be penalised under sections 50 and 56, but it will not invalidate the passing of title to the purchaser of the property. From the dictum laid down in the said judgment, it is clear that the 1st respondent can have a valid title to the properties even if there is a violation of the provisions of the Foreign Exchange Regulation Act and it is for the concerned authorities to take action against him if there is any violation in holding the properties in India under the said Act. In my considered opinion, the appellant has no locus standi to take a defence under the provisions of the Act. So far as this case is concerned, we have to see whether there is a valid demand on the side of the plaintiff. The evidence on record would show that there is a valid demand . Hence, I am of the opinion that both the courts below have correctly appreciated the evidence and the documents adduced by the parties. The concurrent findings of the courts below reflect the evidence on record. The reasonings and findings do not suffer from any infirmity and I find no question of law involved in this matter, warranting this Court to interfere with the concurrent findings of the courts below.

For the reasons stated above, the second appeal fails and is dismissed. No costs. Consequently, connected C.M.P.is closed.

Index: Yes.						06.08.2010
Internet: Yes.
gl


To

1) The District Munsif,
   Sirkali.
   

2) The Principal Subordinate Judge,
   Mayiladuthurai.

   

Copy to:
The Record Keeper,
V.R.Section,
High Court,Madras.












	R.SUBBIAH, J.,,
			gl






Pre-delivery judgment in Second Appeal  No.174 of 2002











	06.08.2010

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