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Kovvuri Satyanarayanamurthi and ors. Vs. Tetali Pydayya and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1943Mad459; (1943)1MLJ219
AppellantKovvuri Satyanarayanamurthi and ors.
RespondentTetali Pydayya and ors.
Cases Referred and Sree Rajah Vasi Reddi v. Malleia Lakshminarasimham
Excerpt:
.....and was residing with his parents and had actually executed a. if therefore the transaction in favour of venkayya was for consideration as it has been found to be and sooramma is held to be the ostensible owner of the property with the express or implied consent of the first plaintiff, the only question is whether venkayya had acted in good faith and whether he had taken reasonable care to ascertain that she had power to make the transfer. vi) in favour of venkayya should be held to have been effected with his consent as well before the terms of section 41 can be held to apply. the interpretation that section 41 required that the transaction to be binding upon the real owners must have been entered into with their consent did not find favour with mulla in his well-known commentary on..........representatives could not be allowed to deny the truth of that representation to the extent of his share. venkayya had been persuaded by kamaraju's conduct or representations to believe that sooramma, the benamidar was the real owner of the property and had acted upon that belief to his detriment. in this view he and after him his representatives must be held to have been estopped from asserting his or their title against the bona fide transferee from the ostensible owner and could not be permitted to disclose the real nature of the transaction to the extent of kamaraju's share. discussing a case where representations even if erroneous would estop the party making them their lordships of the privy council cited in sarat chunder dey v. gopal chunder laha the following statement of the.....
Judgment:

Abdur Rahman, J.

1. The other question as to the benami or fictitious nature of certain transactions having been, as I would show later, concluded by a finding of fact arrived at by the lower appellate Court the only real question to decide in this second appeal is whether Section 41 of the Transfer of Property Act and Section 115 of the Indian Evidence Act can afford any protection to the appellants-defendants 1 and 2 and if so, to what extent

2. The plaintiffs and the defendants 4 and 5 in the suit out of which this appeal has arisen are the sons of one Kamaraju who died some years ago. Their mother, Sooramma figures as the third defendant in the present litigation. A sale deed in respect of item 1 out of the properties described in the plaint schedule was executed on the 12th April, 1910, in her favour (Ex. A). The second item in the plaint schedule is a seventeenth share in a rice mill while items 3 and 7 are houses and house sites purchased by the third defendant on the 22nd September, 1918, from her husband her husband Kamaraju acting for himself and on behalf of his minor sons plaintiffs 2 and 3 and defendant 4) and the first plaintiff (Ex. A-1). All the seven items were first of all mortgaged by Soorarmna, the 3rd defendant, in favour of Venkayya (lather of the present defendants 1 and 2) for a sum of Rs. 4,000 on the 6th June, 1919 (Ex. X). This was discharged by the 17th August, 1931 and we are no longer concerned with it During the pendency of this mortgage, another mortgage was created by Sooramma in respect of the seven items of the property in favour of Venkayya, the previous mortgagee on the 11th June, 1921 (Ex. VI). This was for a sum of Rs. 12,000. It appears from this deed that the money was borrowed for purchasing certain properties evidenced by Ex. I, Ex. II, and Ex. XI, the properties so purchased having been also given as security along with the seven items covered by the first mortgage Ex. X. ' ..

3. A suit was instituted by Venkayya during his lifetime on the basis of the mortgage deed (Ex. VI) in the Court of the Subordinate Judge of Rajahmundry (O. S. No. 43 of 1932). Venkayya died during the pendency of this suit and the defendants 1 and 2 were brought on record as his legal representatives. This suit was decreed. In execution of that decree, the seven items of the property mentioned above were sold and purchased by these defendants, through Court. But when they attempted to take possession, they were resisted by the plaintiffs and the defendants 4 and 5 on the ground that the properties were their joint family properties, that Ex. A was benami, that Ex. A-1 was fictitious and that their mother Sooramma had consequently no right to effect any valid mortgage in respect of those properties. As the execution Court was satisfied that the resistance was occasioned by the sons of Sooramma without any just cause, it directed the obstruction to be removed and the defendants 1 and 2 to be put into possession of the property purchased by them in execution. This led to the institution of the suit under Order 21, Rule 103, Civil Procedure Code. It was dismissed by the first Court but was decreed by the lower appellate Court in regard to item one of the property (covered by Ex. A) as the plaintiffs' allegations in regard to the benami nature of the transaction were held to have been established. The defendants 1 and 2 (the decree-holders in O.S. No. 43 of 1932) have consequently preferred the present appeal in regard to that item of the property while the plaintiffs and the defendants 4 and 5 have filed cross-objections in regard to the other remaining items.

4. Having heard learned Counsel for the defendants-appellants in regard to the benami nature of the transaction covered by Ex. A, I am of opinion that the finding in regard to that question is purely one of fact and cannot be questioned in this appeal. The promissory notes which formed the consideration for the sale deed (Ex. A) have been, although described in the sale deed to be in favour of Sooramma now found to be in favour of Kamaraju and there being no presumption as to advancement in India, the sale deed must be, in the absence of anything else that would suggest to the contrary, found to be benami in character. There is no force, therefore, in the contention that the property covered by Ex. A belonged to Sooramma herself.

5. It was, however, contended by Mr. Somasundaram, learned Counsel for the appellants, that the transaction covered by Ex. A could not be avoided as Sooramma was with the consent, express or implied, of Kamaraju and his sons, the ostensible owner of the property described therein and that the mortgage was taken by Venkayya not only for consideration but also in good faith and after he had taken reasonable care to ascertain that she had the power so to do. This contention has no force in regard to the second and third plaintiffs and defendants 4 and 5 as the first three were minors at the time when the mortgage (Ex. VI) was effected in favour of Venkayya and the fifth defendant had not been even born then. Under the terms of the section, the ostensible owner must be found to have been holding the property in his or in her name with the consent, express or implied, of the persons interested in it. And when those persons consist of minors, and one of them is found not to have been born at the time of the mortgage, this consent without which the provisions of Section 41 cannot be attracted, must be found to be wanting. It was so held by their Lordships of the Privy Council in Shankar v. Daooji Misir . The appellants' contention should be, for that reason, repelled to that extent. As for Kamaraju's share in the property which he owned during his lifetime the lower appellate Court has failed to consider the effect his consent must be held to have on the mortgage to the extent of that share. It was found by the learned Subordinate Judge--and the finding was not questioned by the learned District Judge--that the transactions covered not only by Ex. VI but also by Ex. X were brought about by Kamaraju himself. It must not be overlooked that Kamaraju was a member of the joint family (in fact he was the kartha) at the time and if the transactions were brought about by him as appears to be the case, he would have been, if alive, estopped from objecting to the validity of the mortgage--at least so far as his own share was concerned. That would be so under the clear terms of Section 115 of the Indian Evidence Act. If Kamaraju had by his acts and representations in going to Venkayya and asking him to advance a loan on the security of these properties caused him to believe that it was owned by Sooramma and to advance the money to her upon such belief, the former (i.e., Kamaraju) or his representatives could not be allowed to deny the truth of that representation to the extent of his share. Venkayya had been persuaded by Kamaraju's conduct or representations to believe that Sooramma, the benamidar was the real owner of the property and had acted upon that belief to his detriment. In this view he and after him his representatives must be held to have been estopped from asserting his or their title against the bona fide transferee from the ostensible owner and could not be permitted to disclose the real nature of the transaction to the extent of Kamaraju's share. Discussing a case where representations even if erroneous would estop the party making them their Lordships of the Privy Council cited in Sarat Chunder Dey v. Gopal Chunder Laha the following statement of the general principle by Lord Campbell, L.C., which was made with the full concurrence of Lord Kingsdown in the case of Cairncross v. Lorimer 3 H.L.C. 829 .

The doctrine will apply, which is to be found, I believe in the laws of all civilised nations, that if a man either by words or by conduct has intimated that he consents to an act which has been done, and that he will offer no opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to that from which they otherwise might have abstained he cannot question the legality of the act he had so sanctioned, to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct. I am of opinion that generally speaking, if a party having an interest to prevent an act being done has full notice of it having been done, and acquiesces in it so as to induce a reasonable belief that he consents to it, and the position of others is altered by their giving credit to his sincerity, he has no more right to challenge the act to their prejudice than he would have had if it had been done by his previous license.

and observed that

these words were used with reference mainly to acts indicating only subsequent consent to an appointment which had been made, and which might have been objected to when originally made; but they apply a fortiori in a case like the present, where the person estopped was a party to the transaction itself, which he, or others taking title from him seek to challenge after a considerable interval of time.

6. For this limited purpose, I need not even go into Section 41 of the Transfer of Property Act and it is unnecessary for me to see whether the conditions necessary to attract the provisions of that section exist so far as Kamaraju's share is concerned. Section 41 after all is another species of estoppel when the representation is not made directly to the represented but when it consists in making it possible for the ostensible owners to mislead those with whom they are dealing on account of the special position of vantage in which they were placed, by the conduct, express or implied, of the real owners.

7. The question in regard to the first plaintiff cannot, however, be brought within the ambit of Section 115 of the Indian Evidence Act for there is no evidence on the record that he had at any time before the 'execution of the mortgage (Ex. VI) met Venkayya or made any representations to the effect that the property, comprised in the mortgage deed Ex. VI, belonged to his mother. Even the appellants do not allege that fact in paragraph 13 of their written statement. They confine themselves to the statement that the plaintiffs and defendants 4 and 5 ' knew of the mortgages in favour of these defendants.' The lower appellate Court has not discussed the question whether the first plaintiff was a major at the time of the execution of the mortgage (Ex. VI) or a minor although it seems to have assumed that all the sons of Kamaraju were minors at the time. This is however incorrect. The sale deed (Ex. A-1) was executed by the first plaintiff as a major on the 22nd September, 1918, and there is nothing on the record to show that he was not so on that date. It is highly improbable that if he were only a lad of 14 or 15 in 1918 as he attempted to make it out in his deposition in this case the Sub-Registrar would have admitted it (.0 registration. Moreover, the first plaintiff admitted in his statement as P.W. 5 that he was 7 or 8 years old when the sale deed Ex. A was executed in his mother's favour on the 12th April, 1910. That would show that be was born in 1902 or 1903. Even if that statement is to be believed he must be found to have attained majority before the mortgage Ex. VI was executed. I have discussed this question as the matter was not considered by the lower appellate Court. My finding must therefore be, that the first plaintiff was a major before the date of Ex. VI and that he knew that the sale deed of the first item of property in suit (Ex. A) stood in the name of his mother and that she was consequently the ostensible owner of that property. His subsequent conduct in making two payments of Rs. 2,000 to Venkayya on two occasions in April, 1928 and 1929 (Ex. VII and Ex. VII-A) towards the mortgage deed Ex. VI on behalf of his mother, although not relevant to show that he knew of it at the time when it was executed, would show to a large extent that he had in spite of what he swore to the contrary, known on the dates on which he made the endorsements on Ex. VI that she had mortgaged the property in her own name and that he had no desire to challenge her action. If Kamaraju had brought about this transaction--as he seems to have done--if the mortgage Ex. VI was effected to buy property for the family, as Ex. I, Ex. II and Ex. XI clearly indicate, if the first plaintiff was a major and was residing with his parents and had actually executed a. sale deed in his mother's favour on the 22nd September, 1918, it is difficult to believe that the first plaintiff did not know that the first item of property stood in his mother's name. If therefore the transaction in favour of Venkayya was for consideration as it has been found to be and Sooramma is held to be the ostensible owner of the property with the express or implied consent of the first plaintiff, the only question is whether Venkayya had acted in good faith and whether he had taken reasonable care to ascertain that she had power to make the transfer.

8. But before I go into that question, I might advert to the interpretation which was attempted to be placed on Section 41 of the Transfer of Property Act by Mr. Umamaheswaram, learned Counsel for the respondents. He contended that not only must Sooramma be found to have been the ostensible owner with the express or implied consent of the first plaintiff but that the mortgage deed (Ex. VI) in favour of Venkayya should be held to have been effected with his consent as well before the terms of Section 41 can be held to apply. In support of this interpretation, he relied on certain observations of Sulaiman and Pullan, JJ., in Shafiq-ullah Khan v. Sami-ullah Khan I.L.R.(1929) All. 139. But I find that this interpretation was not accepted by another, Bench of the same Court in Fazal Hussain v. Muhammad Kazim I.L.R.(1933) All. 582 and was regarded to be in the nature of an obiter. The interpretation that Section 41 required that the transaction to be binding upon the real owners must have been entered into with their consent did not find favour with Mulla in his well-known commentary on the Transfer of Property Act (2nd edition) where the observations in the case of Shafiq-ullah Khan v. Sami-ullah Khan I.L.R.(1929) All. 139 were adversely criticised and it was pointed out that the section would apply when the person, who, with the consent, express or implied, of the real owner, was in the real position of the ostensible owner and made a transfer of which the real owner was unaware. The same view was taken by Tek Chand, J., in Jesa Ram v. Ghulam A.I.R. 1936 Lah. 816. I find myself in respectful agreement with what was said by the learned Judges of the Allahabad High Court in Fazal Hussain's case I.L.R.(1933) All. 582 or what was observed by Tek Chand, J., in Jesa Ram's case A.I.R. 1936 Lah. 816 and hold that in order to attract the provisions of Section 41 of the Transfer of Property Act, it is unnecessary that the defendants must also have shown that the mortgage by Sooramma in favour of Venkayya was executed with the first plaintiff's knowledge and consent--his knowledge that Sooramma was the ostensible owner of the property before Ex. VI came into existence being enough for the purposes, of this section.

9. Nothing has been said by the lower appellate Court or by learned Counsel for the respondents that would lead me to suspect the bona fides of the transaction. The only question then is whether Venkayya can be, in the circumstances of this case, held to have taken 'reasonable care to ascertain that the transferor had power to make the transfer.' As observed by the learned Judges in Fazal Hussain's case (1933) I.L.R. 56 All. 582. (P.C.) :

no hard and fast rules can be laid down as regards the extent to which a transferee from the ostensible owner should take reasonable care to ascertain that the transferor had power to make the transfer.

Each case would have to depend on its own circumstances. According to the learned Judges in this case,

the only test that can be laid down is that the transferee should show that he acted like a reasonable man of business and with ordinary prudence.

In order to ascertain what would have been reasonable care in the circumstances of the case, it is not easy to ignore that the mortgage deed--which by the way was a second one executed by Sooramma the first one being Ex. X--was being executed by her with the active support of Kamaraju who was the kartha of the family. Had Kamaraju not been referred to, in spite of his having been alive, by Venkayya when the mortgage was taken, the position would have been very different. But once it is found that the mortgage Ex. VI was being brought about by Kamaraju himself as he had brought about the previous mortgage Ex. X, and the mortgage deed contained a statement (although not found to be true now) that the promissory notes in consideration of which the sale deed Ex. A was executed were in favour of Sooramma and the money under them had been due to her, the only inquiry which could be, in the circumstances of the case regarded to have been proper was from Kamaraju himself and inasmuch as Kamaraju was bringing about this transaction, there was nothing to suggest any reasonable doubt that Sooramma was the real owner of the property and had a right to effect the mortgage. The fact that she was mortgaging it for the purpose of purchasing certain other property (Ex. I, Ex. II and Ex. XI) and that Venkayya was required to pay the money to the vendors himself was a further circumstance which could not but have influenced an ordinary prudent man and a reasonable man of business to come to the conclusion that Sooramma was the real owner of the property and was by taking the loan from him adding to the family wealth and thus promoting its interests. These circumstances are in my opinion amply sufficient to bring the case within the purview of Section 41 of the Transfer of Property Act and establish such bona fides and reasonable care as are required by that section. From the decision of their Lordships in Sarat Chunder Dey's case Cal to which I have already referred, it appears that the only ground taken in second appeal before the High Court was that the plaintiff could not recover the property as his assignors Ahmed Hussein and Rahimurmissa were estopped from disputing the validity of the hiba in favour of Arju Bibi. The High Court had disallowed this contention. In overruling the decision of the High Court on this point, their Lordships observed at p. 308:

But inquiry, or indeed any anxiety as to the title of Arju Bibi to grant the mortgage as proprietor in virtue of the hiba in her favour was made quite unnecessary by the representation and conduct of Ahmed who was (so far as his share of the property was concerned) the sole person having a title or interest to challenge the validity of the hiba, and to object to the granting of the mortgage which he himself signed and delivered in exchange for the money paid to him.

If Kamaraju was the kartha of the family as he was and there was nothing to suggest that he was acting in any manner adversely to the interests of the family, his participation with Sooramma in bringing about the transaction should, in my view, make anyn further in any further inquiry unnecessary and the further demand for the production of the original promissory note, in consideration of which the sale deed Ex. A was executed, on which stress was laid by Mr. Umamaheswaram, not essential. There was nothing to suggest that after being satisfied, they were preserved by either the vendor or the vendee.

10. I am, for the above reasons, of opinion that the first plaintiff is not entitled to question the validity of the mortgage in favour of Venkayya. The first plaintiff's share in the property was both on the date of the mortgage and on the date of the suit one-fifth. He is one of the five brothers who are parties to this action.

11. The question then is as to what should be regarded to be Kamaraju's share. Mr. Somasundaram contends that inasmuch as the fifth defendant was not born at the time when the mortgage Ex. VI was executed, Kamaraju's share should also be held to be one-fifth as he had only four sons living at the time. In support of this contention he relied on the principle of the decisions in Chinnu Pillai v. Kalimuthu Chetti : (1911)21MLJ246 and Sree Rajah Vasi Reddi v. Malleia Lakshminarasimham : AIR1940Mad9691 , to the latter of which I was a party. It was held in these cases that the alienee of the interest of a Hindu coparcener is entitled to enforce his claim against the share to which the alienor was entitled at the time of the alienation undiminished by any birth or death in the family subsequent to the date of the alienation. No objection was taken by the learned Counsel for the respondents as to this proposition but he urged that this principle could not be applied to cases of equitable protection afforded to a party under Section 41 of the Transfer of Property Act. He argues that in so far as the vendor's share was one-sixth at the time of his death and if Kamaraju were alive, the sons could claim five-sixth share in the property, Kamaraju's share must be held to be one-sixth under the circumstances and not one-fifth. I am, however, not impressed with this contention as in my view not only according to the above decisions the principles of which do, in my opinion, apply to the present case but also according to the words used in Section 41 of the Transfer of Property Act, the title of the alienee has to be considered with reference to the date of the transfer which could not be avoided by him or by his legal representatives--either heirs or survivors--if the other conditions of that section are found to have been complied with. If Kamaraju had one-fifth share on the date of the transfer the fact that he had one or more sons subsequently born to him and his share was accordingly diminished would not be, in my judgment, material. It is the alienation made by him which cannot be successfully challenged and that transfer was apparently that of one-fifth.

12. For the above reasons the appeal must be accepted to the extent of two-fifths' share in the first item of the property covered by Ex. A. To that extent the decree of the lower appellate Court will be modified both in regard to the property and as to the mesne profits. The appellants will receive and pay proportionate costs according to their success and failure in all the Courts.

13. As for the cross-objections, I find no force in them as they are concluded by concurrent findings of both the Courts. Mr. Umamaheswaram urged that the lower appellate Court failed, in spite of its decision in regard to the item covered by Ex. A in favour of the plaintiffs, to consider that Sooramma's income could not have been sufficient to enable her to acquire other properties under Ex. A-1. But I do not agree that the lower appellate Court was unmindful of that fact. Sooramma had admittedly some property of her own and there is nothing to suggest that she could have no funds to make the other purchases. The finding by the lower appellate Court on this point is one of fact and it is not open to me to interfere with it in second appeal. The cross-objections fail and are dismissed with costs.

14. Leave to appeal refused.


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