H.R. Krishnan, J.
1. This is a second appeal by the plaintiff whose suit for the declaration of title and recovery of possession of a house in Mahidpur (about the identity of which there is no dispute) has been dismissed by both the lower Courts by judgments whose effect is concurrent though the emphasis is somewhat different. The points for decision before us are, firstly, whether all the relevant facts are so clearly on the record that the contesting defendant may be permitted to support the decision on the principle of part of performance under Section 53A of the Transfer of Property Act though he had not expressly pleaded it in either of the two lower Courts. Secondly, if the contesting defendant is not permitted to invoke Section 53A of the Transfer of Property Act, whether he has proved that his transferor Shafi Mohammad has got the house from the plaintiff by gift which need not be evidenced by a registered deed when it is by a Muslim. Thirdly, whether the plaintiff can be held to be barred by estoppel of out: of the two kinds (a) under Section 41 of the Transfer of Property Act by her having acquissed in Shafi Mohammad transferring the properly as the ostensible owner; or (b) by telling the transferee when he went to consult her, that Shafi Mohammad was the owner of the house and was competent to do what he liked with if.
2. The facts of the case are on the whole beyond controversy and at all events it would be proper to accept them as found by the lower appellate Court. The lower Courts have dismissed the suit under different and apparently alternative grounds to some extent by the general impression that the claim set up by the plaintiff with the obvious collusion and support of the transferor Shafi Mohammad is unconscionable and cannot be allowed on any principle of fair dealing. This not being sufficient, they have tried to fit this in with one or the other of the possible legal interpretations of the circumstances, and the contents of the unregistered deed D/1 to which the plaintiff and Shafi Mohammad were parties. They have had at places to labour to the decision, which is certainly correct; this is because they have overlooked Section 53A of the Transfer of Property Act which contains the equitable principles that are a complete answer to the plaintiff.
3. There used to live one Khudabax Rangrej in village Mahidpur. The house that is the subject matter of this litigation originally belonged to him, being in fact one of his three houses. The plaintiff is his daughter. At the time of his death in 1950 there was one Shafi Mohommad living with this Khudabax. His father also was named Khudabax; but that was another person. It is common around that Shafi Mohammad was unconnected with this family. However, Khudabax father of the plaintiff brought him up so that at the time of his (Khudabax's) death Shafi Mohommad was in the house. The plaintiff herself had been married at Indore and as usual was living most of the time with her husband. During the years preceding Khudabax's death Shan Mohommad had been entertaining hopes of getting something out of his foster-father's properties though there does not seem to have been any will or similar disposition in his favour.
The plaintiff being the only heir of Khudabax there were differences between her and Shafi Mohommad which however, were settled by mediation:- I say 'mediation' though at places in the evidence and the judgment the word 'arbitration' has been used, because the resultant disposal was by a document to which the plaintiff and Shafi Mohommad were parties and was not by any award. This is Ex. D/1 executed on 25-4-50, shortly after Khudabax's death which has been the subject matter of very lengthy arguments. The plaintiff seems at one stage to have denied having executed any such document but now it is established that she had, and had further implemented by relinquishing the houses, and taking the movables allotted to her by that agreement. The details are set out in the document itself and for our purposes we need only note that broadly speaking the immovable property that is, the three houses in Mahidpur, were given to Shafi Mohommad and all movable property among which gold and silver ornaments were the most important ones were taken by the plaintiff.
Certain debts payable by Khudabax were also taken over by Shafi Mohommad. Actually Shafi Mohommad was, during this short interval between Khudabax's death and the execution of this instrument, in actual possession of these houses and in control of the movable properties stored in one of them. After the settlement, the plaintiff took away the ornaments, and Shan Mohommad was in possession of the houses now as a result of this agreement or arrangement or whatever other name we might care to give this disposition. Its exact effect will be certainly investigated in course of this judgment.
4. Soon after Shafi Mohommad began to transfer these properties. It is said that he has sold the two other houses to other persons; but we are not concerned with those transactions. He mortgaged this house with the contesting defendant Shivnarayan. The deed was executed on 30-4-1952; the consideration was Rs. 1250 and the mortgagee was given possession. As a fact it has been found that this was a genuine transaction for consideration and that Shivnarayan the mortgagee continues to be in possession.
5. About two years later the plaintiff brought the present suit as the sole heir of the original owner seeking to recover possession of the property on the averment that the transferor from whom Shivnarayan had taken the mortgage had no right or title in it and was no more than a trespasser. Shivnarayan naturally contested and sought to make out that Shafi Mohommad was the real owner because of the deed already referred to which he had shown to the transferee at the time of the transfer and had passed on to him as evidence of his title. The real snag about this instrument is that it is not registered though ostensibly the transaction is one disposing of immovable property worth more than Rs. 100. Shivnarayan was aware of it and did in Paragraph II of his written statement plead as an alternative that the plaintiff had permitted Shaft Mohommad to behave as the ostensible owner and was therefore not' competent to challenge the transfer made by him which he--the transferee--accepted in good faith and after the due inquiry.
Shafi Mohomad as could be expected, supported the plaintiff's case. This, however, is of little consequence as neither Court has based its judgment upon anything that Shafi Mohommad has done or said in this connection. The suit was dismissed and the plaintiff went up in appeal.
6. The appellate Court has considered every aspect of the case except the applicability of Section 53A of the Transfer of Property Act. On the one hand it felt that the plaintiff's stand was quite unconscionable; on the other it was aware of the difficulty created by the non-registration of D/1. It persuaded itself that really the house had been gifted by the plaintiff to Shafi Mohommad--a transfer that could be effected in the circumstances by mere word of mouth without any deed, If Shafi Mohommad was the owner by virtue of the gift, the plaintiff had no case and the transferee from Shafi Mohommad could successfully resist even though transferor had himself begun to collude with the plaintiff. As an alternative the appellate Court also accepted the theory of ostensible ownership of Shafi. The entire conduct of the plaintiff according to the trial Court was one of open acquiescence of Shafi's giving himself out as the owner. The contesting defendant tried in course of the evidence to make out yet another ground, a case of estoppel against the plaintiff by express representation as set out in Section 115 of the Evidence Act.
His story was that before taking the mortage he went to the plaintiff at Indore and asked her if he could take the transfer from Shafi and was advised in reply that Shafi was the owner and he could certainly go ahead. However, this had not been put to the plaintiff herself when she was a witness and had not been expressly pleaded. Accordingly, the appellate Court did not base any of its findings on this aspect of the defence. However, holding that Shafi was the owner by gift and in the alternative was the ostensible owner with the full acquiescence of the plaintiff it decided that the transfer was valid and the transferee had title as mortgagee. Accordingly, the plaintiff's appeal was also dismissed.
7. As the foregoing account would show all the relevant facts were before both the lower Courts. Besides supporting the judgment of the first appellate Court, the contesting defendant-respondent sought permission to urge before this Court that the case of the plaintiff is neatly met by the doctrine of part performance contained in Section 53A of the Transfer of Property Act. The only difficulty for the defendant is the non-registration of the instrument D/l by which Shafi got title to this house; if he, the transferee could show that Shafi was the equitable owner by part performance and that this part performance is a good defence, that alone would be sufficient to dispose of the suit. As against it, the plaintiff-appellant has urged, firstly, that this is a new defence which cannot be allowed at this stage and, secondly, even if it can be allowed, the instrument D/1 does not transfer any property to Shafi Mohommad even by relinquishment.
Question No. 1:
8. Whether a party should be allowed to raise a new ground of defence at late stage is a general question. Where it is a new ground of law pure and simple, Courts always allow it subject of course to the other party's being heard. Where it is a ground based on new facts, Courts do not usually allow it unless there is strong case for remand for further evidence or fresh issues on facts and the like. But where it is a mixed question, there may be some difficulty. The purely legal aspects of the mixed question can without difficulty be canvassed at any stage, but often they are based on facts. If the facts themselves are pre-existent on the record there should be no difficulty in permitting the party to raise a ground, which has not been expressly pleaded at the appropriate stage. In fact, it is only loose usage to call this a new ground; it is only a new legal interpretation of the facts already on record and fully noticed by both parties. This problem is of frequent occurrence and has been discussed in some rulings. The one reported in Pannalal v. Labhchand, AIR 1955 Madh-B 49, is typical:
'In a case where the defendant has stated in his written statement all the facts on which he bases his defence without deducing his legal position properly from those facts, it would not be right to reject the defence merely because the defendant has not properly appreciated the law bearing on the facts set out by him. Where the plea arises upon the pleadings and upon the record of the case, it is not only competent but expedient in the interest of justice to entertain the plea. The question whether the party has or has not established it is entirely different.'
One can find similar pronouncements by other High Courts also. I am always in favour of entertaining a plea even if it is new, if it is one directly emerging from the facts on record or as found by the lower appellate Court as the last forum for questions of fact. Certainly, the other party should be given opportunity and care should be taken that this is not made a pretext for an interested party taking his case entirely over new ground. But where the facts are patent, merely because the party has been clumsy in presenting its legal implications in the lower Courts I would not obstruct its placing a new legal interpretation on the facts on record even in second appeal.
9. The real question is, whether the wording of D/1 and the conduct of the two parties at that time, show that there was part performance by both and that Shafi Mohommad, and after him the contesting defendant as the person claiming under him are entitled to resist the suit on the principle of part performance. In detail the problems are, firstly, whether that instrument is an agreement to transfer, one party agreeing to hand over the movables and the other agreeing to relinquish her claim to the immovable property; secondly, whether they have performed their respective parts without the instrument being registered. The contention of the plaintiff is that the instrument was not an agreement to transfer at all as there was nothing to be transferred at that time. It was either a family settlement or a bare clarification of doubtful rights without there being any passing of rights from one party to another.
Actually quite a number of rulings have been cited to show that a settlement of conflicting claims or a clarification of doubtful rights such as often happens in family disputes is really no agreement to transfer whether by handing over or by relinquishment. For example, in Mt. Mahadei Kunwar v. Padarath Chaube, AIR 1937 All 578 (FB), the position was that the agreement concerned did not convey property from one member of the family to another but only embodied an acknowledgment of each other's rights. It was accordingly held that there being no transfer. Section 53A had no application. In fact, tbe real question there was regarding the admissibility into evidence of the agreement in spite of the non-registration, Similarly, in the case reported in U.P. Government v. Church Missionary Trust Association Ltd. London and Allahabad, AIR 1948 Oudh 54, the compromise was in clarification of doubtful claims. The position was not materially different from a compromise of a dispute within the family, of the type mentioned in the Allahabad case above, where tbe parties clearly acknowledged the rights of one another which they had been disputing beforehand. There is no doubt that in a settlement or compromise of this nature there is no transfer of property and S. 53A would not come in.
10. But we cannot generalise from this to the effect that whenever there is a compromise or settlement between parties claiming property there cannot be a transfer. Whether a settlement or compromise is one in clarification of doubtful rights or in mutual acknowledgment of the parties' respective rights or one in which there is actual transfer is a question of fact to be answered with due regard to the circumstances of each case and the actual effect of the compromise. In the instant case, for example, there was no doubt as to the claims of the parties. Each was claiming everything. Whether the claim was genuine or not is not the problem at this stage. Each was claiming and there was a give and take, one actually taking some of the properties and at the same time relinquishing others and the latter in his turn taking what the former had relinquished and handing over what he had agreed to part with. I fail to understand why this cannot be a transfer simply because some other types of compromise and settlements had been discussed in other cases whose principles are no doubt good as far as they go.
11. A position similar to the one here arose in the Madras case reported in Somepalli Mutyalu v. C. Veerayya, AIR 1946 Mad 452. There one of the parties to a settlement gave up a claim to recover a sum of money from the other in consideration of the latter's giving up the right to certain property which he claimed through his wife. It was held that this was a case oftransfer by relinquishment and attracted Section 53A.
A transfer obviously can be in different forms, but the essence of the transaction is that the title to certain property which till that moment has vested in one of the parties goes to the other. It might even be that there is no handing over or physical delivery of possession because transferee 'being already in possession may continue to be so in part performance of the contract' acquiring by this transaction a new title valid against the transferee. In the instant case for example, in pursuance of the arrangement the plaintiff who was claiming all the properties, relinquished her claim to the houses and took ornaments and other movables and Shafi Mohommad for his part, gave up the movables and ornaments and continued in possession of the houses now in accordance with the arrangement and in exercise of the title he had acquired by the relinquishment by the plaintiff. It is certainly a case falling within the scope of Section 53A. There was no doubt or ambiguity of the terms of the contract which had been reduced to writing. There is also implementation' by both parties, the one relinquishing her title to the houses and the other handing over the movables. The facts actually are not at all in dispute.
12. In course of her evidence, the plaintiff has asserted that Shafi Mohommad was her licensee. This was of course in keeping with her denial to have entered into any such agreement; but this has been disproved and it has been found that she did execute it.
13. The benefit of Section 53A goes not only to the party to the transfer for consideration, but also to one who is claiming under that party. In the instant case the contract for the mutual consideration as already set out was performed by the plaintiff and Shafi Mohommad. After it is performed and Shafi Mohommad becomes the equitable owner of the house, he transfers it to the contesting defendant and incidentally makes over to him the unregistered instrument D/1 which embodies the terms of the contract which had been performed in part by both the parties. Thus, the contesting defendant is not claiming under the party to the original agreement a right in respect of this property which he has taken and continued in possession. The foregoing discussion would show thai the doctrine of part performance was a complete answer to the suit and it could have been disposed on that basis.
Question No. 2:
14. However, the lower Courts while feeling that the plaintiff's claim was unconscionable and non-maintainable and having overlooked S. 53A, as it were, groping to find the exact legal basis on which they could dispose of the controversy. The first appellate Court has thought of the two alternatives. The first, that there was a gift of this house by the plaintiff to Shafi Mohommad; this cannot be accepted. No doubt, she relinquished her title in the houses in favour of Shafi Mohommad, but that was not a gift. It was in fact an arrangement on mutual consideration a quid pro quo as it were, which by its very nature excludes a gift. A gift properly so called implies, among other elements, the animus of giving away, that is to say, on the part of the donor of parting with his property without any consideration from the other. Even when there are mutual gifts as In the well-known instance of hiba-bilaiwaz under the Muslim Law, it is not a case of balancing of consideration but of two voluntary gifts which happened one after the other. By the nature of mis transaction it cannot be called a gift.
Question No. 3:
15. The Court itself has not taken seriously the contesting defendant's story of the plaintiff's being estopped under Section 115 of the Evidence Act by her advising him to take the property when he went and consulted her. Anyway, it is not in the pleadings or the suggestion put to the plaintiff during cross-examination.
16. No doubt, there is a case for arguing that the plaintiff had by her own conduct acquiesced in the transferor Shafi Mohommad acting as the ostensible owner. As far as it goes, it would come under Section 41 of the Transfer of Property Act. This is what the first appellate Court has found and has given as the alternative reason for the dismissal of the suit. It is however weaker statement of the contesting defendant's case than one under Section 53A. Whereas under Section 41 he is only the ostensible owner, under the other section he is really the equitable owner whose position is as strong as the legal owner's in so far as he wants to defend his title. At the same time under Section 41, the position is strong enough for the contesting defendant because it is the conduct of the plaintiff as evidenced by the transaction set out in D/1 that enabled the transferor to act openly as the owner. As for the transferee's exercise of good faith and reasonable care these are borne out by his taking possession of the document D/1, and learning from all the persons concerned that as a result of mediation this was executed, and that the plaintiff on the one hand relinquished her right in the houses and the transferor Shafi Mohommad on the other gave up the movable properties.
It is however unnecessary to enter into any lengthy discussion about the propriety of applying Section 41 to the case because in my opinion the contesting defendant is more effectively protected by Section 53A, he being the transferee of a person who in his turn has got the title in the property by part performance.
17. The foregoing discussion shows that the plaintiff tries to take advantage of the fact that the arrangement between herself and Shafi Mohommad though implemented by both ofthem by appropriate overt acts and reduced toa clear document, had not been registered. Sincethe contesting defendant is only defending histitle, he can successfully resist the suit. I wouldtherefore hold that the suit was rightly dismissed and dismiss the second appeal also. Theplaintiff-appellant shall pay the contesting defendant-respondent the costs of this appeal andpleaders fee according to rules.