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K.S. Rm. Ramanathan Chetty and ors. Vs. T.K.V. Ramasami Chetty and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1916Mad627(2); 32Ind.Cas.5
AppellantK.S. Rm. Ramanathan Chetty and ors.
RespondentT.K.V. Ramasami Chetty and ors.
Cases ReferredAsmatunnessa Khatum v. Harendra Lal Biswas
Excerpt:
transfer of property act (iv of 1882), sections 54 and 118 - unregistered deed of exchange--acquiescence--title, whether passes--estoppel--construction of statute. - - if there had been such a contract, their lordships were of opinion that it would have been a good defence as the defendants might call on the transferor's heir to supplement the contract and this, though the suit was brought more than twelve years after the date of the alleged transfer. the learned vakil for the appellant invoked the aid of the well-known principle that there can be no estoppel against law. courts will then be creating a title which the legislature has distinctly negatived. krishnaswami aiyar referred to the dictum of lord kingsdown in the well known case of ramsden v. 214.'as i understand this judgment,..........allowed to prevail against a statutory right. there are many instances in which parties have been held entitled to equities, using that term in the sense of estoppel although, as pointed out by jenkins, c.j., in municipal corporation of bombay v. secretary of state 7 bom. l.r. 27, the two rights are distinct. even against a statute, equity may be relied upon in certain cases. the provision in the statute may be directory and not mandatory. equity will relieve against its strict enforcement. certain penalties may be held in terrorem with a view to the prompt obedience of the statutory rule. equity will help to relieve the rigour of the law in such cases. under a rule of law, time may not be of the essence of the contract. here is room for the application of equity. apart from these and.....
Judgment:

John Wallis, C.J.

1. In this ease, the parties by an unregistered agreement, Exhibit B, dated 4th March 1908, agreed for mutual convenience to an exchange of certain plots of land, forming part of their adjoining house sites. Exhibit B shows that the agreement was come to in the presence of mediators, and the effect of the oral evidence is that it was these mediators who settled the amount of the cash payment to be made by the 1st defendant to the 1st plaintiff to equalize matters, but Exhibit B is in terms an agreement signed by the parties and we see no sufficient reason for treating it, as the Subordinate Judge has done, as an award or proceeding and as such, it is exempt from the provisions of the Registration Act. It is therefore, necessary to deal with the plaintiff's claim, that owing to this want of registration, he is entitled to recover back the land given by him in exchange to the defendant, even though the defendant has erected on the land one of the walls of his new house which has cost over Rs. 40,000 and the removal of the wall would bring down the house, and although nearly a year after the exchange, when the defendant was beginning to build, the plaintiff objected to the extent of the land awarded to him in exchange and obtained a further payment of Rs. 525 from the defendant. The parties have since quarrelled and it is scarcely denied that the plaintiff's object in bringing the suit is rather to injure the defendant than to benefit himself. It is, however, argued that in default of registration, the land remained the property of the plaintiff as, under the Transfer of Property Act, the transfer could only be made by registered instrument and that the defendant is not entitled to the benefit of any of the equities which English Courts raise in such a case against the application of the Statute of Frauds. As observed in Maddison v. Alderson 52 L.J.Q.B. 737, that Statute did not make the transaction itself void whereas it is contended that was the effect of the Transfer of Property Act and the Full Bench decision of this Court [Kurri Veerareddi v. Kurri Bapireddi 16 M.L.J. 395 was relied on. It was held in that case, when the price had been paid and possession delivered but the sale-deed had not been registered, that the vendor was entitled to get back the property and that the contract to sell, afforded no defence even though the defendant's right to sue for specific performance, was not barred at the institution of the suit. White, C.J., arrived at this conclusion with some hesitation having regard to the observations of their Lordships of the Judicial Committee in Immudipatam Thirugnana Kondama Naih v. Periya Dorasami 24 M.K 377, and it may be necessary when the time comes to consider how far the decision of the Full Bench can be reconciled with the very general language used by their Lordships in the more recent case of Mahomed Musa v. Aghore Kumar Ganguli 28 Ind. Cas. 930; 21 C.L.J. 231; 19 C.W.N. 250; (1915) M.W.N. 621; 17 Bom. L.R.420, though no doubt the transaction there in question took place before the passing of the Transfer of Property Act and the effect of its provisions is not referred to in the judgment. But assuming Kurri Veerareddi v. Kurri Bapireddi 29 M.K 336; 16 M.L.J. 395, to be correctly decided, I am net prepared to hold that it involves the proposition that where there is no registered document, no amount of acquiescence on the part of the transferor will bar his right to get back the property within statutory period. Where a lessee for a limited term erects buildings on the land and the lessor stands by and says nothing, it was no doubt held in Ramsaden v. Dyson 12 Jur. 506; 14 W.R. 926 and Beni Ram v. Kundan Lal 1 Bom. L.R. 400Sar. P.C.J. 523, that the mere acquiescence of the lessor, will not debar him from recovering the land at the expiry of the term. In Immudipatam Thirugana Kondama Naik v. Peria Dorasami 24 M.K 377, the plaintiff sued in the year 1895 for a declaration of his title and for redemption. The mortgage in 1882 by the plaintiff's father in favour of the mortgagees provided that on redemption, the property should be handed over to the contesting defendant; but their Lordships found, not only that there was no registered transfer as required by the Transfer of Property Act, but that it was not proved that there was any valid contract by the plaintiff's father to make the transfer to the defendants. If there had been such a contract, their Lordships were of opinion that it would have been a good defence as the defendants might call on the transferor's heir to supplement the contract and this, though the suit was brought more than twelve years after the date of the alleged transfer. The present case is undoubtedly much stronger. Not only was there a contract to exchange, but it was fully performed and long afterwards, the plaintiff stood by and acquiesced in the defendant's building and obtained a further payment from him. In these circumstances, putting aside the conveyance altogether, I think the plaintiff is estopped. Key, J., in MacManus v. Cooke 35 Ch. D. 681 cited an old case Anon 2 Eq. C. Ab. 522, which is both brief and apposite: 'Short v. Taylor, in Lord Somer's time, was cited, which was, Short built a fine house; Taylor began to build another; but laid part of his foundation upon Short's land. Short seeing this, did not forbid him but on the contrary very milch encouraged it; and when the house was built, he brought an action; and Lord Somer granted an injunction.' The plaintiff's conduct in this case has been far worse than that of Short. It is clear, observes Key, J., in McManus v. Cooke 35 Ch. D. 681 citing this case, that if a man builds a house partly on his neighbour's land, and the neighbour acquiesces in this being done, Courts of Equity will interfere to prevent him from disturbing it. Assuming Kurri Veerareddi v. Kurri Bapireddi 29 M. K 336, to be rightly decided, I do not think it prevents us from applying this rule in India, or obliges Us to countenance a purely vexatious suit such as this. I may also refer to Plimmer v. Mayor of Wellington 53 L.J.P.C. 104; 49 J.P. 116 and Attorney -General of Southern Nigera v. Holt and Company (1915) A.C. 599, which were cited before us as supporting the same view. I would, therefore, uphold the decree though on different grounds and dismiss the appeal with costs. In the result, the appeal is dismissed with costs.

Seshagiri Aiyar, J.

2. I have the misfortune to differ from the learned Chief Justice. The main facts are not in dispute. By a deed dated the 4th March 1908, there was an exchange of building sites between the 1st plaintiff and the 1st defendant. The 1st defendant erected a wall on the exchanged site and put up a substantial building. This suit was instituted in 1911 for recovery of the site after removing the building on it. The case for the plaintiff is that as the deed was not registered, no title passed to the plaintiff. The Subordinate Judge held that the document was not a deed of exchange and that the real exchange was effected by the award of arbitrators. Mr. Krishnaswami Aiyar, for the respondent, drew our attention to the evidence on this point. We feel no hesitation in holding that the document is a deed of exchange and that there is no satisfactory evidence to prove that the arbitrators gave an award as to the exchange. The evidence does not show that there was any antecedent dispute relating to the exchange. There is no reference in writing. On the evidence, it is clear that all the mediators were called upon who were to fix the price to be paid by the defendant as he was taking a larger extent than the plaintiff obtained from him. The evidence on the side of the plaintiff is clear and consistent and we accept that, as being more in accordance with the probabilities of the case. We cannot accept the finding of the Subordinate Judge on this point.

3. The question of law arising on these facts is whether the plaintiff is not entitled to recover possession, because of his conduct in allowing the 1st defendant to erect a substantial building at a great cost. There can be no doubt that the plaintiff has no merits and his conduct has not been above board. Still if the law is in his favour, the Court will not be justified in refusing him relief.

4. The Full Bench decision of this Court in Kurri Veerareddi v. Kurri Bapireddi 29 M.K 336 lays down that if the party resisting possession has no statutory or prescriptive title, he cannot rely on equities to resist the suit. Mr. Krishnaswami Aiyar contended that this decision must be taken to have been overruled by the decision of the Judicial Committee in Mahomed Musa v. Aghore Kumar Ganguli 28 Ind. Cas. 930; 17 M.L.T. 143; (1915) M.W.N. 621; 17 Bom. L.R.420. I am unable to agree with this contention. In the case before their Lordships, there was a compromise in a suit. The compromise with reference to certain portions of it, should have been registered. This was not done. But in pursuance of the terms, the parties were placed in possession and dealt with the properties as owners. Their Lordships held that even although the razinama and the decree taken together were considered to be defective or inchoate as elements making up a final and validly concluded agreement for the extinction of the equity of redemption, the actings of parties has been such as to supply all such defects.' Before the Transfer of Property Act, the law did not prescribe any formalities for conferring title. Under the old Registration Regulations and Acts, if a document of a particular description was in writing but not registered, it was not receivable in evidence. Therefore, the document commented upon by their Lordships, was not ipso facto invalid, only it was not receivable in evidence. To such a case, the decisions which construed the Statute of Frauds in England were held applicable. As pointed out by Mr. Srinivasa Aiyangar, the reference in the judgment of the Judicial Committee in Maddison v. Alderson 8 A.C. 467 shows that their Lordships were not considering cases for which the Statute has prescribed a particular form for conferring title. The judgment of some of the noble Lords in that case would seem to show that the principle of equitable estoppel can apply only to executory contracts and not to executed contracts. See specially the judgment of Lord Blackburn. I do not think that the Judicial Committee intended to lay down that even where a Statute enjoins that title would pass only if certain formalities are complied with, conduct and acting can be relied upon to supplement an inchoate title. Section 54 of the Transfer of Property Act says that a 'transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of reversion or other intangible thing, can be made only by a registered instrument.' The second clause of Section 118 is 'A transfer of property in completion of an exchange, can be made only in the manner provided for the transfer of such property by sale.' The use of the word 'only' in these sections excludes the possibility of title being acquired within the statutory period by any other process. I feel no doubt that their Lordships of the Judicial Committee did not intend to override statutory requirements by their observations. Their Lordships have always held with reference to Indian enactments that the essence of a Code is to be exhaustive.' See Balkishen Das v. W.F. Legge 22 A.D 149; Dhanipal Das v. Maneshar Bakhsh Singh 28 A.K 570; 4 C.L.J. 1; 8 Bom. L.R. 491; 10 C.W.N. 849; Gokul Mandar v. Pudmanund Singh 4 Bom. L.R. 793; Webb v. Maepherson 5 Bom. L.R. 838; Mulraj Khatau v. Vishwanath Prabhuram Vaidya 17 Ind. Cas. 627; 24 M.L.J. 6. I am, therefore, of opinion that Kurri Veerareddi v. Kurri Bapireddi 29 M.k 336 is unaffected by Mahomed Musa v. Aghore Kumar Ganguli 28 Ind. Cas. 930

5. The next branch of the argument of Mr. Krishnaswami Aiyar relates to estoppel. If I understood him aright, he does not claim that the conduct of the plaintiff has given him a title to the property; his position is that Courts should not afford relief to the plaintiff as he is not entitled to it by reason of his conduct. In other words, although in law the plaintiff has a title to recover, Courts should reject his claim on grounds of equity. Before I deal with the cases quoted by the learned Vakil, I shall refer to the principle which this contention seems to offend. The learned Vakil for the appellant invoked the aid of the well-known principle that there can be no estoppel against law. I shall state what, in my opinion, are the uses and limitations of this rule before applying it to the present case. The rule of estoppel is one of evidence. It ought not to be allowed to prevail against a statutory right. There are many instances in which parties have been held entitled to equities, using that term in the sense of estoppel although, as pointed out by Jenkins, C.J., in Municipal Corporation of Bombay v. Secretary of State 7 Bom. L.R. 27, the two rights are distinct. Even against a Statute, equity may be relied upon in certain cases. The provision in the Statute may be directory and not mandatory. Equity will relieve against its strict enforcement. Certain penalties may be held in terrorem with a view to the prompt obedience of the statutory rule. Equity will help to relieve the rigour of the law in such cases. Under a rule of law, time may not be of the essence of the contract. Here is room for the application of equity. Apart from these and similar instances, in my opinion, no principle of equity or estoppel should be allowed to prevail against a plain and mandatory provision of law. Where the law says, as in the present case, that title can be acquired only in a particular way, there is no room for the application of the doctrine of estoppel. The effect of holding otherwise, would be to override legislation. Courts will then be creating a title which the Legislature has distinctly negatived. Whatever may be the position in England before the Judicature Act, when equitable relief was given along with and often in opposition to common law remedies, I do not think the Courts in this country have power to nullify legislative provisions. The authorities in this country support this proposition. Chidambara Chettiar v. Vaidilinga Padayachi 30 Ind. Cas. 408; Dinrai Chandra Base v. Srimati Hari Dasi Vein 29 Ind. Cas. 290; Jagadbandhu Saha v. Radha Krishna Pal 4 Ind. Cas. 414. Mr. Krishnaswami Aiyar referred to the dictum of Lord Kingsdown in the well known case of Ramsden v. Dyson 1 H.L. 129. The actual decision in that case was that as no expectation was held out to the tenant, the landlord was not estopped. Lord Kingsdown dissented from the conclusion of the other noble Lords. The argument before the House of Lords was directed to showing that by the conduct of the landlord, an equity was created in favour of the tenant. No question of statutory command or prohibition had to be dealt with in that case. I do not think the pronouncements of Lord Kingsdown and of the other noble Lords are relevant to cases where the Courts are asked to act in direct contravention of enacted law. Attorney-General of Southern Nigera v. John Kolt and Company, Liverpool (1915) A.C. 599, is not really against this view. In that case, the respondents had acquired by a grant from the Crown certain lands of which the sea was the boundary. As a result of the erection of protective works by them, a strip of land accreted to that already possessed by them. The Crown claimed this accretion. It was conceded that ordinarily the accretion would go to the Crown; but it was contended that having agreed to give access to the sea by the original grant, the Crown was estopped from laying claim to this piece of land so as to derogate from the right already granted. This contention was upheld. At page 620, their Lordships say: 'In truth and substance what was done was to protect the land, to guard against invasion of the sea as a destructive force, and to conserve it for the use of the properties as an invaluable mercantile adjunct thereto. Further, so far as the Crown is concerned, it is recognized by law that it is the duty of the Crown to protect land from the incursions of the sea, and if, in the circumstances of the present case, a license had been granted and duly accorded to the respondents to reclaim, as was done, that license would have been in entire accord not only with the right of the subject but with the duty of the Crown. This principle is in accord with the law laid down in Attorney-General v Tomline 14 Ch. D. 58 and principally with the opinion of Fry, J., at the trial [Attorney. General v. Tomline (1878) 12 Ch. D. 214 and Cotton L.J., in the Court of Appeal [Attorney. General v. Tomline (1878) 12 Ch. D. 214.' As I understand this judgment, the Judicial Committee were inclined to think that the grant of land implied a license to reclaim as well. The reference to Lyon v. Fishmonger's Company I.A.C. 5 L.T. 569 and other cases shows that their Lordships were prepared to presume from the nature of the grant a right in the respondents as grantees to erect walls in the foreshore in order that the benefits arising from the original grant may be properly enjoyed. One other observation may be made with reference to this case. No question of statutory title as in the present appeal, arose in it. Sarat Chunder Dey v. Gopal Chunder Laha 19 I.A. 203 was much relied upon by the respondent. In that case, the title-deed was in the name of the mother. The son had allowed her to deal with the property. The son's property pissed under the Court sale to the plaintiff and the defendant claimed title under the mother by virtue of another Court sale on the mortgage created by her. It was found that the mother was only a benamidar for the son. Their Lordships of the Judicial Committee held that the son would have been estopped from questioning his mother's dealings as she had the ostensible title in her to the property, and that consequently persons claiming under the son, were similarly estopped. I fail to see how this case affords any help to the respondent. The estoppel pleaded, related to the claim as' real owner against a person, having prima facie the statutory title. The other cases quoted, do not require any detailed examination. I am of opinion that the plaintiff was not estopped from suing to re-cover the property. I further agree with the contention of the learned Vakil for the appellant that Section 115, which has been held to be exhaustive of the law in India [Asmatunnessa Khatum v. Harendra Lal Biswas 12 C.W.N. 721, does not cover this case. However reprehensible the conduct of the plaintiff may be, there is no suggestion in the evidence that at the time the defendant erected his house on this land, he was aware that he alone had title to the property and not the defendant. The plaintiff has no doubt taken advantage of the infirmity in the defendant's title; but it is not shown that he was aware of this infirmity when building operations commenced and intentionally led the defendants into the belief that he had a valid title. The truth seems to be that until about the time of the suit, both parties believed that a good title had been secured by the document of 1908. In this view, the plaintiff cannot be said to be estopped from claiming the property. See In re Barrow's case 14 Ch. D. 432.

6. The only other point is whether the plaintiff should be allowed to recover the property without paying substantial, compensation to the defendant. Under the Transfer of Property Act, there is no question that the option should be given to the transferor to elect either to convey the property validly or to pay compensation. Mr. Srinivasa Aiyangar says that his client elects the latter alternative. He also contended that the Act in terms would not apply to the present case. Section 51 of the Transfer of Property Act speaks of the transferee of immoveable property making improvements. Without expressing any opinion whether the term transferee' would apply to persons who have obtained invalid transfers, I think the principle of the section governs the present case. The plaintiff, in my opinion, must pay substantial damage before he is given a decree for possession. As the question has not been dealt with by the Court of first instance, the Subordinate Judge should be allowed to return a finding on the 4th issue in the view 1 have taken of the case. The proper course will, no doubt, be to appoint an expert Commissioner to determine the extent of the damage that is likely to accrue and to give an estimate of the compensation to be paid.


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