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G. Govindaraju Mudaliar Vs. Vinayak Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 1515 of 1959
Judge
Reported inAIR1963Mad310; (1963)1MLJ234
ActsTransfer of Property Act, 1882 - Sections 53A
AppellantG. Govindaraju Mudaliar
RespondentVinayak Mudaliar and ors.
Appellant AdvocateT.T. Vijayaraghavan, Adv.
Respondent AdvocateS. Ramanujachariar and ;C.P. Rajagopala Iyengar, Advs.
DispositionAppeal dismissed
Cases Referred and Shah Mahammad Usuf v. Shaw Habit
Excerpt:
property - part performance - section 53a of transfer of property act, 1882 - whether section 53-a apply to agreement signed by manager of hindu joint family on behalf of other members of family - doctrine of part performance equitable doctrine designed to relieve rigour of law and provide when agreement for transfer falls short of requirements laid down by law - not necessary for 'x' to sign document on behalf of his brothers - admittedly 'x' manager of undivided joint family and property agreed to be sold was joint family property - if it is held that in transaction of similar nature all brothers should sign document purpose of equitable 'doctrine of part performance' would be defeated - held, section 53-a applicable to transaction entered into by manager of hindu undivided family.....venkatadri, j.1. this second appeal has been referred to a bench as it raises a question of general importance, namely, whether section 53-a of the transfer of property act would apply to art agreement signed by a manager of a hindu joint family on behalf of other members of the family without describing himself as such. the short facts that are necessary for the disposal of this interesting question are the following: the suit property originally belonged to one krishnaswami mudaliar and his three sons swammatna, damodara and pinagapani. krishnaswami mudaliar and his eldest son swaminatha executed an usufructuary mortgage in favour of one sundararajan. sundararajan, the usufructuary mortgagee, entered into an agreement to assign hismortgage rights to jeeevaratnammal (the 2nd defendant in.....
Judgment:

Venkatadri, J.

1. This second appeal has been referred to a Bench as it raises a question of general importance, namely, whether Section 53-A of the Transfer of Property Act would apply to art agreement signed by a manager of a Hindu joint family on behalf of other members of the family without describing himself as such. The short facts that are necessary for the disposal of this interesting question are the following: The suit property originally belonged to one Krishnaswami Mudaliar and his three sons Swammatna, Damodara and Pinagapani. Krishnaswami Mudaliar and his eldest son Swaminatha executed an usufructuary mortgage in favour of one Sundararajan. Sundararajan, the usufructuary mortgagee, entered into an agreement to assign hismortgage rights to Jeeevaratnammal (the 2nd defendant in the suit) and Chellammal, the wives of the first defendant in the suit for a sum of Rs. 240 on 19-2-1940. After the death of Krishnaswami Mudaliar, Swaminatha, his eldest son, executed an agreement Ex. B-8 to sell the suit property to Jeevarathnammal and Chellammal subject to the rights of the usufructuary mortgagee and decree debt in favour of one Ayyavu Naidu. Later in pursuance of the agreement entered into with Sundararajan, Jeevaratnammal and Chellammal got an assignment of the mortgage rights on 94-1940 from Sundararajan. Swaminatha evaded andfailed to execute a regular sale-deed in favour of Jeevaratnammat and Cheliammal as per his agreement entered into with them on 5-4-1940. On the other hand, Swaminatha and his two brothers entered into a separate transaction by way of a sale of the very same property in favour of the 4th defendant on 25-3-1946 for a sum of Rs. 1000. The 4th defendant in his turn sold the property for a sumof Rs. 2500 to the plaintiff by a registered sale deed Ex. A-3 on 11-12-1948. The plaintiff has filed the present suit for a declaration of his title to the property by reason of his purchase under Ex. A-3 and for directing the defendants to deliver possession of the suit property to him.

2. The suit is resisted by the defendants on theground that the plaintiff's vendor had full knowledge of the prior agreement Ex. B-8, that the sale in favour of the 4th defendant (Ex. A-1) was a nominal transaction and assuch the 4th defendant had no title to the property, me defendants 1 to 3 got into possession of the property in pursuance of Ex. B-8 in part performance thereof and the suit is therefore not maintainable and is liable to be dismissed.

3. On these pleadings the parties went to trial, mesuit was at first dismissed by the trial court, but that decision was reversed on appeal. Defendants 1 to 3 tookthe matter on second appeal to the High Court and the High Court remanded the case to the trial court for fresh disposal. When the suit came for trial after remand the trial court found that Swaminatha and his two brothers constituted members of the Hindu joint family, that the agreement Ex. B-8 was executed while Swaminatha and Ms two brothers were living as members of a joint family, that the purpose of the agreement was to discharge the mortgage debt binding on the family, that Swaminatha as the manager of the family was competent to deal with, the property for consideration and necessity, that in pursuance of the agreement Ex. B-8 the defendants 1 to 3 were put in possession of the property and that they are entitled to invoke Section 53-A of the Transfer of Property Act. The trial court accordingly dismissed the suit. The lower appellate court agreeing with the findings of the trial court dismissed the appeal preferred by the plaintiff. The plaintiff has preferred this second appeal against the judgment and decree of the lower courts and has raised an interesting question of law whether Section 53-A would be applicable to the facts of this case when Swaminatha alone has executed Ex. B-8 in favour of the 2nd defendant and another without making any reference in the document to his status in the family or as on behalf of the family.

4. The doctrine of part performance is an equitable doctrine designed to relieve the rigour of the law and provide a remedy when a transfer or an agreement for transfer falls short of the requirements laid down by the law. In England the doctrine was developed by the Equity Courts. In a modified form it has been recognised statutorily in India being embodied in Section 53-A of the Transfer of Property. Act. The section is a new one and was introduces by the Amending Act of 1929. Section 53-A so far as it is relevant for our purpose is as follows :

'Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereor, or the transferee, being already in possession, continues in possession is part performance of the contract and has done some acts in furtherance of the contract.'

5. The question that has to be considered in this appeal, is, what is the interpretation to be given to the words 'writing signed by him or on his behalf' occurring in this section. These words have been interpreted recently by various High Courts.

6. To start with, we may begin with the decision of our High Court. These words came up for interpretation before a Bench of this court consisting of Wadsworth and Patanjali Sastri JJ., in Subrahmanyam v. Subba Rao : AIR1944Mad337 . In that case the facts are the following : The plaintiff's mother and guardian entered into an agreement to sell the suit lands to the defendants for the purpose of discharging certain debts due by the deceased father of the plaintiff. In pursuance or that agreement the purchasers were put in possession of the suit properties. It is common ground that the transferees discharged the mortgage debts binding on the family. Subsequently the mother refused to execute a registered sale deed. Taking advantage of this circumstance, the plaintiff in that suit who was still a minor through his mother filed a suit for possession of the suit properties attacking the sale as not binding on him, as there was no necessity for his guardian to sell the land for discharging the debts, which could have been liquidated out of the Income of the large extent of immoveable property left by his father. The Courts below gave a finding that the plaintiff's father had left a large amount of debts which could not have been discharged from the income of the family properties and that it was necessary and beneficial to sell tome of them for the purpose. The trial Court held that Section 53-A of the Transfer of Property Act was applicable to the transaction in question and barred the plaintiff's claim. But the lower appellate Court took the view that an agreement for sale of a minor's property by his guardian was void and that its performance did not fall within Section 53-A of the Transfer of Property Act and was no valid defence to an action brought by the minor to recover the property. When the matter came up in a second appeal, Patanjan Sastri J. who delivered the judgment of the Bench, observed at p. 150 (of Mad LJ).: (at pp. 339-340 of AIR) :

'Where a guardian contracts to transfer immoveable property belonging to his minor ward, can it be said that the minor is the 'transferor' within the meaning of the section? The term clearly refers back to the opening words of the section and must we think be taken to signify the person who 'contracts to transfer'. It must be remembered that the doctrine of part performance rests on the ground of fraud which is personal and has been held to apply only to the party who, having entered into a contract and permitted the obligee to act on the faith of it as if 11 were legally perfect, seeks to resile from it on the ground of its imperfect execution.'

When this decision was taken on appeal to the Privy Council their Lordships of the Judicial Committee in subrahmanyam v. Subba Rao, reversed the decision of this Court and held,

'Where the mother of Hindu minor enters into a contract for sale of immoveable property belonging to the minor, on his behalf, and the contract is one which it is within her competence as guardian to enter into, so as to Bind the minor by it and the contract is for the benefit of the minor, the minor is the person who most aptly answers the description of 'the transferor' in the sense in which these words are used in Section 53-A. It follows, therefore, that in such a case, he is debarred by the section from obtaining the relief by way of possession against the transferee who has been let into possession in pursuance of the contract and who has performed his part of the contract.'

Just before the Judicial Committee made their above pronouncement of the law on this subject, Satyanarayana Rao J. in Rattayya v. Chandrayya : AIR1948Mad526 followed the view taken by Patanjalj Sastri J. in : AIR1944Mad337 :

'The language of Section 53-A is not that the contract should be signed 'by him or must be. deemed to have been signed on his behalf. The language is 'signed by him or on his behalf. The statute therefore requires the actual signature of somebody who is the plaintiff or by come one on his behalf. If it is merely a question or inferring that the signature was on behalf of others also, the section, in my opinion, would have no application and the language should have been 'signed by him or on his behalf or deemed to have been signed on his behalf.'

This opinion is certainly against the pronouncement of the Judicial Committee.

7. Though the law is clearly laid down by the Judicial Committee, Krishnaswami Nayudu J. in an unreporteddecision Chinnayya v. Ramamurthi, S. A. No. 2695 of 1949 followed the decision of Satyanarayana Rao J., in : AIR1948Mad526 holding that the decision of the Privy Council would not apply to the facts or the case before him. The facts in S. A. No. 2695 of 1949 are briefly these. A father and one of his sons entered into an agreement with the defendants to sell property admittedly belonging to the joint family. Subsequently the other sons filed a suit to eject the defendants on the ground that they had become entitled to the suit properties under a family partition. The defendants raised a contention that in pursuance of an agreement with the plaintiff's father and one of their brothers the defendants were in possession of the suit properties and invoxed Section 53-A of the Transfer of Property Act as a bar to the suit. Krishnaswami Nayudu J. pointed out that the agreement in that case did not purport to be signed on behalf of the plaintiffs, that the plaintiffs were not mentioned in the agreement at all, that the agreement was signed by their father and their brother and as such there was no indication in the document that it was on behalf of any others than the executants. The learned Judges expresses his view thus :

'The principles of Hindu law as to the nature of the acts of the manager of a Hindu joint family on the minors and other members of the family cannot be sought in support in construing Section 53-A and thus extend its application to cases, which are not strictly governed by the said provision.'

With great respect to the learned Judge, we are of opinion that the view expressed by him is too wide an interpretation of the words 'signed by him or on his behalf.'

8. The words 'writing signed by him or on his behalf' came up for interpretation before a Bench of the Andhra Pradesh High Court consisting of Chandra Reddy C. J. and Mohd. Ahmed Ansari J. in Satyanarayanamurty v. Subrahmanyam, : AIR1959AP534 . The short facts in that case are : the plaintiffs and the defendants formed members, of a joint Hindu family. Defendants 1 to 3, the first plaintiff and the minor second plaintiff by his father and guardian executed a simple mortgage in favour of one Lachanna. On the same day, they executed another Simple mortgage for a similar sum in favour of one Sathiraju, subsequently they entered into agreements of sale in favour of the mortgagees. Later the plaintiffs filed a suit for partition and for possession after declaring that the transactions entered into in favour of the defendants would not be binding on them. It was contended that Section 53-A of the Transfer of Property Act prevented the plaintiffs from asserting any title to the properties in dispute. The question for determination by the Bench was whether Section 53-A of the Transfer of Property Act would apply to the transaction in that case. Chandra Reddy C. J. delivering the judgment of the Bench, observed at page 536 :

'It is true that an agreement of sale made by ma manager of the family would bind all the persons provided it is for the benefit of the family and would affect me interests of each of them, as under Hindu law, the manager is vested with authority to represent the family and to do all acts on its behalf, so long as they are not detrimental to its interests. But these considerations are irrelevant in construing Section 53-A which bars a person who has contracted to sell property by writing 'signed by him or on his behalf.'

Thus, in order to attract Section 53-A, it is essential that the contract must be signed by him or expressly on his behalf.

That section cannot come into play where the writing 19 deemed to have been signed on his behalf. That covers only two cases namely, where the plaintiff has actually signed or where someone who has been specifically authorised has signed on his behalf. If the language was 'signed by him, or on his behalf or deemed to have been signed by him,' it would have been permissible to import such actions into the section. As it is, the signature must be by the contracting party or by some one on his behalf.'

9. The learned Chief Justice followed the decision in : AIR1948Mad526 and also the unreported decision of Krishnaswami Nayudu J. in S. A. No. 2695 of 1959 already referred, to. With great respect, we are unable to agree with the proposition or law laid down by the learned Chief Justice of the Andnra Pradesh High Court. We may however state that it does not appear from a reading of the judgment of the Bench that the decision of the Privy Council in was brought to the notice of the learned Judges.

10. It is settled law that so long as the members of the family remain undivided the father of the family if alive or, in his absence, the senior member of the family Is entitled to manage the joint family. He is entitled to full possession of the joint family properties and is absolute in its management. He has the power and right to represent the family in all transactions relating to it. He has got power over the income of the joint family properties. Ha has got a right to alienate the joint family properties for legal necessity or benefit of the estate. He is entitled to contract debts for family purposes. He can give full discharge and has power to acknowledge debts. He can refer a dispute to arbitration or he can himself compromise the dispute. The manager of the joint Hindu family is competent either to sell or to mortgage the family property on the ground of justifying necessity whether it is for paymentof debts binding on the family or to pay off the claims of the Government on account of land revenue cess or taxes, or for the maintenance of the members of the family, or for the purpose of defraying the expenses of the family, such is the power of the manager of the Hindu joint family. When he enters into a contract or an agreement to sell a property he is acting not only on behalf of himself but alsoon behalf of the members of the family.

11. The question whether in such transactions Section 53-A Is applicable or not has been discussed by Gajendragadkar, J., now the Judge of the Supreme Court in Ranchhod v. Manubai, : AIR1954Bom153 . The learned Judge observed at p.156 :

'Similarly, where a manager enters into a contract for sale of immovable property belonging to the family for a legal necessity, specific performance of the said contract can be obtained by the purchaser against all the coparceners of the family. If that be so, if the manager had let into possession the intending purchaser under the contract of sale, he would be entitled to protect his possession on the ground of part performance provided of course all the other conditions of Section 53-A are satisfied. This would be so even though the other coparceners cannot be said to claim under the manager.'

The learned Judge made the above observations while deciding the question whether a reversioner could be said to be a person claiming under the widow after whose death he succeeds by reversion and whether in a suit brought by him he could plead that Section 53-A is not applicable to a transaction entered into by the widow during her lifetime. The facts in that case are the following: The suit house originally belonged to to one Bhila, who died leaving behindhim his widow Chhabbai and two sisters Banabai and Manubai. The widow Chhababai entered into a contract of sale in regard to the suit house. The intending purchaser entered into possession of the suit property. After a few months the widow died. On her death, the two surviving sisters of Bhila sold the property to the plaintiff. The plaintiff filed the suit to recover possession of the property. His claim was resisted by the defendant (purchaser) who was in possession of the property on the ground that Section 53-A would protect his rights. It was contended before the learned Judges or the Bombay High Court that the reversioner was not bound by the contract of sale made by the Hindu widow, me learned Judge while discussing this question considered the nature of the widow's estate and referred to the following observations of Lord Shaw in Janaki Ammal v. Narayana-swami Aiyer, AIR 1916 PC 117 in regard to the position of the Hindu widow (at page 159)

'(the widow's right) is of the nature of a right of property; her position is that of the owner. Her powers in that character are, however, limited, but.....so long as she is alive, no one has any vested interest in the succession.'

On the facts found by the Courts below the learned Judges were of opinion that the agreement to sell the property was perfectly valid because it was justified by legal necessity. They proceeded to observe at page 156:

'. . . .We would prefer to hold that the reversioner who succeeds to the estate claims the estate under the widow inasmuch as a valid contract for sale of the property made by her for a legal necessity binds her. The position of the Hindu widow 'qua' the reversioner may perhaps be compared to that of the executor or trustee on the one hand and the legatee under a will or the beneficiary under a trust. Analogy may perhaps be drawn between the case of a manager contracting to sell the property of the family and the members of the family who are bound by such a contract if it is properly made by the manager within his authority.'

In the end the learned Judges held that the reversioners were bound by the contract of sale and that the purchaser from the widow was entitled to rely upon the provisions of Section 53-A of the Transfer of Property Act.

12. This decision has been followed by another Bench of the Bombay High Court in Labhchand v. Sharitabi, : AIR1961Bom215 , where the facts are : one Sankarlal agreed to sell the suit property to one Yakub, husband of the defendant. A draft sale deed embodying all the terms of the contract was duly signed by Sanharial and possession of the field, that is the suit property, was delivered by sankarlal to Yakub at the time of the execution of the draft sale deed. This sale deed was however not registered on account of the sudden death of Sankarlal. The purchaser was however in possession of the property till his lifetime and thereafter his widow remained in possession. The two sons of Sankarlal and his widow contended that the suit property was ancestral property belonging to the joint family and there was no legal necessity for Sankarlal to sell the property. The defendant pleaded among other things that her possession was protected under Section 53-A of the Transfer of Property Act. It was contended on behalf of the defendant before the Bench that on a true construction of the expression 'signed on his behalf' the transaction in question has been signed on behalf of the appellants 1 and 2 by Sankarlal who was the manager of the joint family inasmuch as he had authority to alienate the property in its entirety because the alienation was justified by existence of a legal necessity. On the other hand, it was contended on behalf of the plaintiff that the document on its face showed thatSankarlal had signed it only on his own behalf, that he did not say that he was executing the document as the karta of the joint family or that he was signing the document on hisbehalf as well as on behalf of his two sons, appellants 1and 2, and that strict construction must be placed on the expression 'signed on his behalf' inasmuch as Section 53-A does not create a right but only affords a shield againstdispossession. They relied on the decisions in AIR 1948 Mad 526 and : AIR1959AP534 . After referring to these decisions the Bench observed (at page 217):--

'With utmost respect we find it difficult to put such a strict construction on Section 53-A of the Act as that would, in our opinion, defeat the intention of the Legislature.'

On the other hand, the Bench followed the Privy Councildecision in , and laid down two tests fordetermining the person who most aptly answers the description of 'the transferor' in the sense in which the wordsare used in Section 53-A. The Bench observed:

'The test then that has to be applied in each case is whether the contract was binding on the person andcould have been specifically enforced against him. Other test is whether if the transaction had been completed by a duly executed and registered deed of transfer the transfer would have been binding on the person concerned. It we get the answer in the affirmative, to both these questions, then the person answers the description of 'the transferor' within the meaning of Section 53-A of the Act.'

Applying the above two tests to the instant case it may be noticed that at the time of the transaction Swaminatna and his brothers were undivided. Swaminatna was the manager of the Hindu joint family. He entered into an agreement to sell the suit property for the purpose of discharging the debts, admittedly family debts binding innature. In pursuance of that agreement he put the purchaser in possession of the suit property. He has got aright under law to enter into such transactions not only on behalf of himself but on behalf of the members of the family. He can execute an agreement of sale and put the purchaser in possession. Having regard to all the circumstances, Swaminatha is the person who aptly answers the description of the 'transferor' in the sense in which these words are used in Section 53-A. Further, as pointed out by the Bench in : AIR1961Bom215 , we should place a liberalconstruction on the expression 'signed on his behalf' in Section 53-A of the Act and such a liberal construction would advance the carrying out into effect the intention of theLegislature underlying the provisions of that section.

13. Similarly in Balaram Jairam v. Kewalram, Niyogi J. had occasion to interpret Section 53-A of the Transfer of Property Act. In that case a suit was brought by two brothers against the purchaser from the widow of their deceased brother. The brothers claimed the property on the ground that they were reversioners to the estate of their brother. In dealing with the position of a reversioner, the learned Judge observed (at page 399):

'It is clear that a reversioner has to take the estate as it stands on the widow's death subject to such of her acts as are binding on it. If her acts bind the property, theymust bind the reversioner in the same manner and to thesame extent as the acts of any absolute owner would bind his heir. A reversioner may not be her heir but is certainly her successor. The widow's estate indeed terminates with the death of the widow and it does not devolve on the reversioner; nevertheless he is bound by her acts which lawfully affect the property. To the extent that he is so bound, he becomes a person claiming 'under' her. On this view,the purchaser will, no doubt, have to prove legal necessity before proving the sale but inasmuch as the two are inseparable, he must be allowed to prove the sale .....If so, it ought to be open to the purchaser to pray in aid the equity doctrine of part performance to make good any formal defect in the widow's transfer in so far as it is binding on herself. Section 53-A of the Transfer of Property Act uses the words 'the transferor or any person claiming under him shall be debarred.'

After reviewing the entire case law on the subject, we are or opinion that Section 53-A of the Transfer of Property Act is applicable to the instant case. The findings of the lower Courts are that the property is joint family property, that Swaminatha and his brothers were undivided at the time of the transaction, that Swaminatha was the manager of the family, that Swaminatha entered into an agreement with the predecessor of the defendant to sell the suit property and in pursuance of the agreement he put them into possession of the property. The plaintiff cannot plead in the circumstances of this case that Section 53-A is not applicable, as Swaminatha has not signed the document on behalf of his brothers. On the facts of this case, it is not necessary for Swaminatha to sign the document on behalf of his brothers, because admittedly he is the manager of the undivided joint family and the property agreed to be sold is joint family property. If we hold that in a transaction of similar nature all the brothers should sign the document the very purpose for which the equitable doctrine of part performance is inserted in the Transfer of Property Act would be defeated. Otherwise the very manager of the Hindu joint family after obtaining the consent of his brothers to alienate the property may set up his own brothers later to claim the property contending that Section 53-A will not apply to the transaction in question. That is not the intention of the legislature. We are of the view that Section 53-A is applicable to a transaction entered into by the manager of a Hindu undivided family, whereby he alienates joint family property for binding purposes and for legal necessity.

14. The learned counsel for the respondents contends that the appellant should not be allowed to raise the question of the applicability of Section 53-A, because while remanding the suit for fresh disposal, Ramaswami Gounder J. observed,

'If the Courts should find that Swaminatha executed the agreement Ex. B-8 as the manager of the family and for necessity then of course the first defendant and his wives will be entitled to resist the plaintiff's claim in respect of the entirety of the property,'

15. The learned counsel cited the decisions in Bisal Nath v. Taranath Deb, AIR 1923 Cal 385 and Shah Mahammad Usuf v. Shaw Habit, 1919 Mad WN 662 : AIR 1920 Mad 900 for the proposition of law that where the High Court in its order of remand decides certain questions, the decision on such questions cannot be reopened in appeal to the High Court after remand. We do not however think it necessary to deal with this contention, as we have decided on the facts of this case that Section 53-A of the Transfer of Property Act is applicable to the instant case.

16. In the result, the appeal is dismissed. No costs.


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