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A. Muthuswami Ayyar and anr. Vs. P.B. Loganatha Mudali and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1935Mad404
AppellantA. Muthuswami Ayyar and anr.
RespondentP.B. Loganatha Mudali and ors.
Cases ReferredThiruvenkatachariar v. Seshadri Aiyanger
Excerpt:
.....well to take a conveyance direct from shanmuga's heirs of whatever rights they could convey in the suit properties. 10. in the present state of the record and in view of the pleadings with which the parties went to trial it is difficult to say that either party has a better equity than the other; sadhar sardhar mahomed tahar 1934 mwn notes 1037, lays down that even if at the date of the suit by the legal owner the defendant in possession had an enforceable contract of sale in his favour he cannot rely upon that fact as a defence to the claim in ejectment, he could at best only apply for stay of the ejectment suit till he obtained specific performance of his contract in appropriate proceedings. venkataramier, that the other sections were intended to have retrospective operation, such..........well to take a conveyance direct from shanmuga's heirs of whatever rights they could convey in the suit properties. he accordingly obtained ex. f from them on 2oth march 1926. from about the beginning of 1922, sadagopa's position had been very embarrassed, with the claim of plaintiff 1 on the one side and of defendant 1 on the other, each trying to have evidence of possession with himself. the learned judge rightly finds that there has been a scramble for possession and it is not possible to say definitely who had possession. this suit was accordingly instituted by the plaintiff in 1929 on the footing that he had obtained possession by the end of 1921 and had perfected his title by the conveyance subsequently obtained from shanmuga's heirs, and with a view to obviate all interference.....
Judgment:

Varadachariar, J.

1. This is an appeal by defendants 1 and 2 against a decree in ejectment passed against them, in respect of the properties specified in Schedule A to the plaint and directing payment of a small sum of money representing the price of easuarina trees admittedly cut by them. Defendant 1 having died pending the appeal his son defendant 2 is continuing the appeal so far as the. legal title to the A schedule properties is concerned; the appellants claim title to it under Ex. 23 executed by the Official Assignee of Madras, on 27th March 1925, representing the estate of one Sadagopa Chetti.

2. The properties admittedly belonged, originally to one Shanmuga Mudali, father of defendants 4 and 5. This Shanmuga had entered into an agreement with Sadagopa, in January 1921, to sell these properties and also certain movables, for a total consideration of Rs. 15,000. Shanmuga had already borrowed Rs. 4,000 from Sadagopa on 14th January 1921 and given a promissory note therefor, Ex. 10-B. The evidence in the. case shows that Sadagopa had received a sum of Rs. 10,000 in December 1920 from plaintiff 1, Balakrishna; and having regard to the evidence as to the absence of other resources of Sadagopa, it is not unlikely that the sum of Rs. 4,000 lent to Shanmuga on 14th January 1921 came out of the Rs. 10,000 which Sadagopa had borrowed from Balakrishna. It is Balakrishna's ease that when this Rs. 10,000 was borrowed from him by Sadagopa, the latter had agreed to give by way of security certain lands which he was negotiating to purchase. It would however appear that at the date of the alleged loan he was thinking not of the plaint lands but of some lands in a place called Aruvam-bakkam. When however the Rs. 10,000 was not repaid and no security executed, Balakrishna filed a suit in April 1921 against Sadagopa (O.S. No. 417 of 1921, on the file of this Court), claiming that Sadagopa might be directed to perform his agreement in favour of the plaintiff by executing a mortgage deed for Rupees 10,000 over 'some suitable property belonging to him if he is possessed of any such property.'

3. When Sadagopa agreed to purchase the A schedule properties and other movables from Shanmuga for a sum of Rs. 15,000 he had to find the means to make up the purchase money; and he seems to have borrowed moneys from defendant 1 (who was a pleader at Poonamalee). The evidence shows that on 27th January 1921, defendant 1 advanced to Sadagopa about Rs. 5,000 (or Rs. 5,250) and it is not unlikely, as defendant 1 deposes, that the payment of Rs. 5,000 made to Shanmuga on 27th January 1921 in connexion with this arrangement of purchase was made out of the moneys received from defendant 1. The receipt Ex. 10-A dated 27th January 1921 purports to be a consolidated receipt for Rs. 9,000 in respect of that sale transaction, the Rs. 9,000 having been made up of Rs. 4,000 due under the promissory note dated 14 the January 1921 and the Rs. 5,000 received on 27th January 1921.

4. A sale deed drawn up on 31st January 1921 (Ex. 10 in the case), purported to split up the agreement so far as it related to the land from the rest of it relating to the movables, and it was made out for a sum of Rs. 5,000 only as representing the price of the lands. For some reason, or other, Ex 10 was not completed by registration and the matter was allowed to drop there Sadagopa seems to have had some business transactions with defendant 1 in the course of which he received further advances from him; and it is said that by June 1921, a sum of about Rs. 11,000 was due from Sadagopa to defendant 1. It is defendant l's case that on the June 1921 a statement of account showing these balances was drawn up and this has been filed as Ex. 12 in the case. This account-statement wound up with the following words:

We shall get the sale deeds of 14 acres odd in Nekkondrum (the plaint A schedule lands) from Mr. V.V. Shanmuga Mudaliar in your name and deliver it to you We have already given you the title deeds of the lands registered till now.

5. This is signed by Sadagopa Chetty and a partner of his called Shiva Rao. This is on plain paper and the lower Court has felt some doubt as to the date when it came into existence. We do not think it necessary for the purposes of this appeal to deal with that question. The plaintiff's suit (O.S. No. 417 of 1921, was compromised by the execution of Ex. B on 5th October 1921 and amongst its provisions the following clause is material for the purposes of this suit:

whereas the party hereto of the first part (i.e.,) Sadagopa, has entered into an agreement for the purchase of about 12 acres of dry lands situated in the village of Nekkundrum... from Shanmuga Mudaliarand whereas a sum of Rs. 1,500 is still due to Shanmuga aforesaid by the party hereto of the first part to enable him to obtain the sale-deed ... the party hereto of the second part (Balakrishna) fbould pay a sum of Rs. 1,500 to Shanmuga Mudali aforesaid and have the sale-deed executed in favour of the party hereto of the second part and the party hereto of the first part will intimate to Shanmuga aforesaid of this agreement and request him to execute the sale-deed in favour of the party hereto of the second part. The party hereto of the second part hereby agrees to pay a sum of Rs. 1,500 to Shanmuga aforesaid and get the sale-deed of the lands referred to in his favour and then withdraw the suit.

6. It appears from defendant l's evidence that about the beginning of November 1921, plaintiff 1 met defendant 1 and told him about Ex. B and it is only thereafter that defendant 1 took steps to issue notices through his vakil both to plaintiff 1 and to Sadagopa insisting upon his own rights. That notice is not on the record but the reply of plaintiff 1 thereto is Ex. 4 dated 10th November 1921. The learned Subordinate Judge is of opinion that there is nothing to show that at the date of Ex B plaintiff 1 had any knowledge of Ex 12, but, just as in the case of Ex. 12, we do not think it is necessary for the purposes of this appeal to canvass this question of notice either. From November 1921 Sadagopa had been playing a very dubiou9 part, apparently because he found himself in difficulties and he could not satisfy either plaintiff 1 or defendant 1. Shortly after the date of Ex. B, when Sadagopa failed to cary out another of the terms of Ex. B, plaintiff 1 filed another suit against Sadagopa for a sum of Rs. 5,000 (O.S. No. 1152 of 1921) and on foot of the decree obtained therein, he got Sadagopa ajudicated an insolvent in 1923. The question then came up, before the Official Assignee, as to what the respective rights of plaintiff 1 and defendant 1 were, as each put forward his own claim. It is however noteworthy that from the beginning defendant 1 had only claimed to be a creditor of Sadagopa. He had admittedly taken a pronote for the sum of Rs. 5,000 advanced to Sadagopa in January 1921; and even Ex. 12 purports to be only a settlement of a debtor and creditor account as between defendant 1 and Sadagopa. Likewise, when defendant 1 put forward his claim before the Official Assignee by Ex. H-13, his claim was that he was entitled to recover from the insolvent and out of the properties agreed to be transferred to him and certain other properties transferred to him security, a sum of Rs. 11,000 odd with interest up to 25th April 1913. In an appended statement of account he showed how this Rs. 11,000 and odd was made up and added that he had a letter of security dated 5th June 1921 (apparently referring to Ex. 13) in respect of the Nekkundrum properties signed by the insolvent and Siva Rao.

7. Plaintiff 1, on the other hand, took a somewhat different line, shortly after Ex. B he had tendered the balance of Rs. 1,500 to Shanmuga, but, for some reason not disclosed on the record, Shanmuga would not receive the money or execute the sale-deed. Sadagopa did not succeed in bringing about the execution of the sale-deed and Shanmuga died, shortly afterwards. On Sadagopa's insolvency therefore plaintiff 1 had to put forward his claim before the Official Assignee (Ex. 2). He claimed to be a creditor for the amount decreed to him in O.S. No. 1152 of 1921; but with reference to Ex. B which settled the claim in O.S. No. 417 of 1921, plaintiff 1 stated that he was entitled to certain moveable properties and,

to a conveyance from Shanmuga Mudali in respect of certain lands in Nekkundrum, which the insolvent contracted to buy, on payment by me to Shanmuga of Rs. 1,500. I do not hereby prove for a dividend in respect of these items, but make it known that I have other claims than for a divided.

8. On such investigation as he could make, the Official Assignee took the view that defendant 1 stood in the position of a prior charge holder and that plaintiff 1 was in the position of a subsequent charge holder; and as defendant 1, through his counsel, offered to take a conveyance from the Official Assignee (as representing Sadagopa's estate) of the Schedule A properties and the benefit of the contract between Sadagopa and Shanmuga for the conveyance thereof the Official Assignee executed Ex. 23 to defendant 1. It must be mentioned in passing that Ex. 23 expressly states that the Official Assignee had called upon Shanmuga (meaning apparently Shanmuga's heirs) to execute in his favour a conveyance of the properties but that Shanmuga had declined to do so until payment was made of a sum of Rs. 1.500 alleged to be due to him by the insolvent. The document purports to be a conveyance not only of the legal title (which in one view was considered to have vested in Sadagopa already) but also the benefit of the contract of the insolvent with Shanmuga Mudali. Though defendant 1 obtained this transfer on 27th March 19/5 he has taken no further steps to obtain any document of formal transfer from Shanmuga's heirs nor to have it tried whether their claim for a further payment of Rs. 1,500 was well founded or not.

9. Plaintiff J. did not accept the correctness of the view taken by the Official Assignee. He was apparently advised that he would do well to take a conveyance direct from Shanmuga's heirs of whatever rights they could convey in the suit properties. He accordingly obtained Ex. F from them on 2oth March 1926. From about the beginning of 1922, Sadagopa's position had been very embarrassed, with the claim of plaintiff 1 on the one side and of defendant 1 on the other, each trying to have evidence of possession with himself. The learned Judge rightly finds that there has been a scramble for possession and it is not possible to say definitely who had possession. This suit was accordingly instituted by the plaintiff in 1929 on the footing that he had obtained possession by the end of 1921 and had perfected his title by the conveyance subsequently obtained from Shanmuga's heirs, and with a view to obviate all interference with his possession by defendant 1 plaintiff 1 asked for an injunction but in the alternative, 'he also claimed possession in respect of the Schedule A properties. A portion of the Schedule A properties has been shown in Schedule 0 to the plaint. These items had been brought to sale by a mortgagee from Shanmuga, in execution of a decree obtained in the Poonamallee District Munsif's Court (O.S. No. 335 of 1923), Having regard to the uncertainly of the title to these properties, at the time when these properties were brought to sale in execution of the mortgage decree, plaintiff, himself purchased them in the execution sale, and though he was claiming that he was in possession all along, he applied for and obtained formal. delivery of possession though Court, as Court sale purchase. But defendant 1 applied for re-delivery and as that was granted by the executing Court plaintiff 1 filed O.S. No. '409 of 1926, on the file of the Poonamallee District Munsif's Court in respect of the C schedule properties. The suit was dismissed by the District Munsif's Court and the appeal against it was heard and decided by the Sub-Court along with the main suit, O.S. No. 3 of 1929. In the view that the learned Subordinate Judge took in O.S. No. 3 of 1929 he also allowed the appeal against 409 of 1926. A.S. No. 2 of 1933 has been filed against the decree in O.S. No. 3 of 1929 and S.A. No. 227 of 1933 against the decree of the lower appellate Court in the appeal from the District Munsif's Court.

10. In the present state of the record and in view of the pleadings with which the parties went to trial it is difficult to say that either party has a better equity than the other; we have therefore to rest out decision in the appeal only on the validity of the legal title respectively pleaded by the parties. Whatever the position might have been at the time when the suit was instituted, the question of legal title has now been placed beyond all doubt by recent decisions of the Privy Council holding that under the Transfer of Property Act (as it stood prior to 1930) the doctrine of part performance had no place whatever. Their Lordships' latest pronouncement in 1934 M W N Notes Khan Bahadur Mian Pir Buse v. Sadhar Sardhar Mahomed Tahar 1934 MWN Notes 1037, lays down that even if at the date of the suit by the legal owner the defendant in possession had an enforceable contract of sale in his favour he cannot rely upon that fact as a defence to the claim in ejectment, he could at best only apply for stay of the ejectment suit till he obtained specific performance of his contract in appropriate proceedings. In this state of the law, it must be held that neither Satagopa nor the Official Assignee became the owner of Schedule A properties and that neither the agreement between Satagopa and defendant 1 (even if accompanied by transfer of possession) nor the sale deed Ex. 23 conveyed title to defendant 1. Shanmuga, and after him his sons, defendants 4 and 5, continued to be the legal owners, and the latter have conveyed] their title to plaintiff, by Ex. E. On this footing the decree of the lower Court is right.

11. On behalf of the appellants, Mr. Venkataramier sought to invoke the benefit of Section 53-A, T.P. Act (as amended by Act 20 of 1929. He conceded that a Division Bench of this Court in Manji and Mooji Brothers v. Shanmvgam Pillai 1932 Mad 734, has taken the view that that section is not retrospective; but he submitted that the observations in that-case on this point were obiter, because the suit was one for damages and not. in ejectment and the appellate Court,. notwithstanding these observations, confirmed the decision of the trial Court, on, another point. He also contended that in holding against the retrospective-operation of that provision, the learned Judges did not give sufficient weight to the circumstance that Section 16, of the Amending Act specifically singled out particular provisions of the Act for the exclusion, of the principle of retrospective operation. Mr. Venkataramier admitted that the view expressed in Manji and Moolji Brothers v. Shanmvgam Pillai 1932 Mad 734 case had been followed by a single' Judge of the Allahabad High Court in Gouri Shankar v. Gopal Das 1934 All 701. He drew our attention to the fact that a single Judge of the Bombay High Court (sitting on the original side) has taken a different view, in Sulaimal v. Patell 1933 Bom 381. He also drew our attention to another judgment of a. single Judge of the Allahabad High Court reported in Gajadhar Misir v. Bechan Chamar 1934 All 768, where Bennett, J. took a qualified view on the question of the retrospective operation of the section. It is sufficient, for our present purpose to say that even-according to this qualified, view of Bennet, J, the appellants in this case cannot get the benefit of the operation of Section 53-A, T.P. Act. Assuming, for the sake of argument, that the specific mention of particular sections in the 1st part of Section 16, Amending Act, lends some support to the argument of Mr. Venkataramier, that the other sections were intended to have retrospective operation, such operation is clearly excluded, in respect of suits pending on the date of fee scorning into, force of the Act (1st April 1930), by the concluding words of Clause D of Section 16.

12. This is the view taken by Bennet, J. and, we have no hesitation in agreeing, with11 it to this extent. The inapplicability. new legislation to pending proeeding rests on a well recognised exception to the rule of retrospective operation and where the language of the new Act makes it clear, as the concluding moras of Section 16, Clause D., do that the rights of parties to pending suits should be decided as if the new Act had not been missed, there is no scope whatever for be application of the rule of retrospective operation. We feel confirmed in this view by the fact that in the latest case before the Judicial Committee, 1934 M.W.N. Notes 1037 (1), a like defence under Section 53-A was open, but was not thought of. In that case, the action was pending before the appellate Court, (in the Judicial Commissioner's Court. Sind) when the new Act came into force. It is true that the Judicial Committee did not in terms deal with the question of retrospective operation, but their Lordships directly advert to the new legislation and refer to it as a partial importation of the English law into India and we may certainly take it that neither the learned Counsel who argued the case before their Lordships nor their Lordships believed that this new legislation applied to pending suits. We must therefore overrule the contention that the appellants are entitled to the benefit of the application of Section 53(A), T.P. Act.

13. Mr. Venkataramier raised a plea of estoppel, but we had some difficulty in following that argument; a particular form of estoppel was pleaded in para. 18 of the written statement and raised as issue 5 in the case. This has been found against by the Court below and Mr. Venkataramier did not press it in that form. He contended that when the matter was pending before the Official assignee Shanmuga's heirs only claimed a charge on the properties for Rs. 1,500; that this claim clearly implied that they never claimed to be owners of the property and that as defendants 1 took a conveyence from the Official Assignee in the light of these representations, Shanmuga's heir (and plaintiff 1 as vender from them) must be held to be estopped from asserting that they were the owners. No such case has been put forward and for obvious reasons could not be put forward. The only document relied on for the purpose is Ex. J-2 but that is dated long after Ex. 23. Further in this case defendant 1 was in possession of all material information and he-knew every stage in the history of this transaction from at least the middle of 1921, and there can be no question of any estoppel by reason of any representations, whether express or implied to a1 person who knew all the facts. In view; of the state of the law at the time about the application of the rule of part performance in this country, the parties may not have been very clear in their conceptions as to their respective legal rights; but no representations on matters of law will constitute any basis for estoppel.

14. It is sufficient to refer in this connexion, to Mohori Bibee v. Dharmodas Ghose (1903) 30 Cal 539, Jagwant Singh v. Silan Singh (1899) 21 All 285, Rajambal Ammal v. Shanmuga Mudaliar 1923 Mad 11; Venkatachala v. Arunthavathachi 1923 Mad 568 and Swaminatha Iyer v. Swaminatha Iyer 1927 Mad 458. A third argument of Mr. Venkataramier was founded on Section 91,. Trusts Act, and the decision of this Court in Thiruvenkatachariar v. Seshadri Bapi Reddi 1917 Mad 190 . That decision was given at a time when the Full Bench decision in Kurri Veera Reddi v. Kurrir Bapi Reddi (1906) 29 Mad 336 laid down the rule now adopted by the Privy Council case, viz., that in the absence of a registered deed of conveyance the doctrine of part performance cannot be-availed of in this country. In Thiruvenkatachariar v. Seshadri Aiyangar 1917 Mad 190 ons of the learned Judges-was inclined to restrict the operation of the Pull Bench judgment to the facts of that case and hold that in the case of a transferee from the original vendor with notice of a prior contract, the reasoning of the Pull Bench ought not to be applied. It is very doubtful if the other learned Judge was prepared to concur in that line of reasoning. There was also this additional circumstance in that case, viz., a subsequent registered conveyance by the contracting party in favour of the original promise who was also in possession : and the judgment of Sreenivasa Aiyangar, J., is to some extent based upon that fact.

15. That circumstance is not available in the present case because defendant 1 had taken a transfer only from the Official Assignee and not from Shanmuga or his heirs. Further if the principle of Section 91,' Trusts Act, is to be invoked, the question as to notice and as to the degree of default of the vendor and the vendee respectively will become material and these questions have not been properly raised or dealt with in the Court below. Having regard to the reasoning of the recent Privy Council cases it is not by any means certain, whether the view taken in Thiruvenkatachariar v. Seshadri Aiyanger 1917 Mad 190 can be safely followed in cases where there is not the additional fact present in that case, viz., of the execution of a registered conveyance, though of a later date in favour of the promisee. Issue 6 in the case raised the question whether the sale by defendants 4 and 5 to the plaintiff was invalid, but the reasons therefor, as gathered from para 21 of the written statement have nothing to do with the point now sought to be raised. We are therefore unable to give any relief to the appellant on the basis of Section 91, Trusts Act.

16. In the last, resort, Mr. Venkataramier claimed that his client should at least be held entitled to a charge on the properties, as standing in the shoes of Sadagopa Chetty by reason of Ex. 23. Ex. 23 is not in terms a transfer of any lien but transfers the benefit of the contract between Sadagopa and Shanmuga. It can hardly be contended that the 1st defendant would be entitled to a charge if he did not care or had not been ready to carry out the contract between Sadagopa and Shanmuga. As we have already indicated, it is clear from the correspondence that, from September 1921, Shanmuga had been insisting that si sum of Ks. 1,500 remained due to him and till it was paid he was not prepared to carry out the contract. This is specifically referred to in Ex. XXIII. Nevertheless the 1st defendant took the view that no money whatsoever was due as balance of sale price and therefore he neither offered to pay Rs. 1,500 nor took any proper proceedings to have that matter settled between himself and Shanmuga's heirs. Even in the present suit this point was not definitely put in issue and the materials on record will not enable us to deal satisfactorily with this aspect of defendant l's claim. We therefore prefer to leave that question alone, because even if that claim is well founded, it would afford no defence to the ,claim for possession in this suit. The appeal therefore fails and is dismissed with costs of the plaintiffs-respondents.


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