THE HON'BLE SRI JUSTICE A.VENKATESHWARA REDDY
APPEAL SUIT NO.1062 OF 2017
JUDGMENT:
This appeal suit is directed against the judgment and decree dated 04.06.2012 in O.S.No.710 of 2006 on the file of the learned V Additional District Judge (Fast Track Court), Ranga Reddy District at L.B.Nagar.
2. The plaintiff has filed the Original Suit in O.S.No.710 of 2006 to declare that the sale deeds document bearing Nos.7907 of 2005, 7908 of 2005, 7909 of 2005 and 7910 of 2005, all dated 17.06.2005, executed by defendant No.1 in favour of defendant Nos.2 and 3, as null and void and to grant such other reliefs as the Court may deem fit.
3. The trial Court has decreed the suit of the plaintiff as prayed for declaring the sale deeds stated above as null and void. Feeling aggrieved by the said judgment and decree, the defendant Nos.2 and 3 have preferred this appeal on the following grounds:
AVR,J AS_1062_2017 Page 2 of 17
(a) The lower Court has failed to give an opportunity to the defendants to cross-examine PW1.
Though the evidence affidavit of PW1 sent to the address of learned counsel for the defendants was returned with the endorsement 'addressee left', the Court below has treated it as proper service and recorded cross-examination as 'nil'.
(b) The trial Court ought to have made efforts for service of evidence affidavit of PW1 on the defendants.
(c) The suit is decreed only on the evidence of PW1 which is not tested with cross-examination by the defendants.
(d) The defendant Nos.2 and 3 were not parties to the suit in O.S.No.69 of 2005 filed by the plaintiff against the defendant No.1 for recovery of money and that they were not aware of the orders in I.A.No.1117 of 2005 about attachment before judgment but the trial Court has failed to appreciate all these aspects.
(e) The trial Court failed to consider that the defendant Nos.2 and 3 are bonafide purchasers, not having knowledge of proceedings in O.S.No.69 of 2005 and that the judgment and decree impugned was passed declaring the documents Exs.A5 to A8 as null and void and it is liable to be set aside.
AVR,J AS_1062_2017 Page 3 of 17
4. Heard learned counsel for the appellants / defendant Nos.2 and 3 and learned counsel for the plaintiff. The submissions made on either side have received due consideration of this Court.
5. For the sake of convenience, the parties hereinafter referred to as plaintiff and defendants, as they were arrayed in the Original Suit.
6. The plaintiff has filed the Original Suit in O.S.No.710 of 2006 against the defendant Nos.1 to 3 for cancellation of registered sale deeds bearing document Nos.7907 of 2005 to 7910 of 2005, all dated 17.06.2005. The defendant No.1 remained absent and was set ex-parte. Defendant Nos.2 and 3 filed their Written Statements, issues were settled, but when the trial commenced, evidence affidavit of PW1 was filed, there was no representation on behalf of defendants and the trial Court has made several efforts for service of evidence affidavit of PW1 on the defendant Nos.2 and 3, who were contesting the Original Suit by filing Written Statements. As there was no representation, evidence affidavit of PW1 was also AVR,J AS_1062_2017 Page 4 of 17 sent by learned counsel for the plaintiff to the learned counsel for the defendants by registered post. Inspite of this fact, as the defendant Nos.2 and 3 failed to turn up, cross-examination of PW1 was recorded as 'nil' and Exs.A1 to A9 documents were marked. Relying on the oral and documentary evidence, the trial Court has decreed the suit of the plaintiff declaring the above said sale deeds as null and void and not binding on the plaintiff.
7. Be it stated that the plaintiff has initially filed O.S.No.69 of 2005 against defendant No.1 before the learned Principal District Judge, Ranga Reddy District along with I.A.No.1117 of 2005 seeking attachment before judgment of immovable property i.e. land admeasuring Ac.8.00 guntas, situated in Kistapur Village of Medchal Mandal, Ranga Reddy District wherein the learned Principal District Judge, Ranga Reddy District directed the defendant No.1 to furnish security for a sum of Rs.37,36,690/- by order dated 28.04.2005 and adjourned the matter to 07.06.2005 and that on 07.06.2005 the defendant No.1 without furnishing any security, filed a counter in I.A.No.1117 of 2005. It appears on the very AVR,J AS_1062_2017 Page 5 of 17 same day M/s.South Indian Bank, M.G.Road Branch, Secunderabad has filed implead petition under Order 1, Rule 10 of Civil Procedure Code (for short 'CPC') stating that the said land was mortgaged to their bank by the 1st defendant and that they have already initiated proceedings vide O.A.No.25 of 2005. In the meanwhile, defendant No.1 has clandestinely entered into agreement of sale and executed registered documents bearing Nos.7907 of 2005 to 7910 of 2005 in favour of defendant Nos.2 and 3 in respect of the entire suit schedule property. The defendant Nos.2 and 3 were also aware of the said fact. Defendant No.1 with the sole intention to defeat the claim of the plaintiff brought the sale deeds into existence. While the suit was pending, the plaintiff has caused some other enquiries and he has come to know that the defendant No.1 has deposited amounts with other companies such as Barath Petroleum Corporation and as such the learned Principal District Judge, Ranga Reddy District at L.B.Nagar has passed prohibitory orders for release of the amounts payable to defendant No.1. Though the orders were communicated to the defendants, there was no response.
AVR,J AS_1062_2017 Page 6 of 17 In such circumstances, the plaintiff has filed the present suit for cancellation of the above said four registered sale deeds.
8. As stated above, the defendant No.1 remained absent, he was set ex-parte, whereas defendant Nos.2 and 3 have filed their Written Statements alleging that they have no knowledge of the plaintiff's partnership firm or the Memorandum of Understanding dated 26.04.2001 between the plaintiff and defendant No.1 or the filing of earlier suit in O.S.No.69 of 2005 and the prohibitory orders in IA No.1117 of 2005 on the file of the learned Principal District Judge of Ranga Reddy District at L.B.Nagar.
9. It is further stated by learned counsel for the appellants that the defendant Nos.2 and 3 are the bonafide purchasers for a valuable consideration and that the earlier proceedings were suppressed by the defendant No.1. These defendants were not aware of any publication made by the plaintiff in the newspapers cautioning the general public not to enter into any transaction in respect of the suit schedule property, stated above.
AVR,J AS_1062_2017 Page 7 of 17
10. It is further stated by learned counsel for the appellants that after verification of the original sale deeds with M/s.South Indian Bank defendant Nos.2 and 3 have paid entire outstanding amount to the Bank and accordingly, defendant No.1 has executed registered sale deeds in favour of defendant Nos.2 and 3 on 17.06.2005. It is further urged on behalf of these defendants that they have also paid Rs.4,00,000/- and odd on behalf of defendant No.1 towards the amount due to the employees of defendant No.1 and there is no cause of action for filing the suit.
11. Basing on the above pleadings, following issues were settled before the trial Court:
(1) Whether the sale deeds bearing Nos.7907, 7908, 7909 and 7910 of 2005 all dated 17.06.2005 executed in favour of the defendant Nos.2 and 3 are null and void?
(2) To what relief?
12. During trial, PW1 was examined, Exs.A1 to A9 documents were marked but inspite of granting ample opportunity, the contesting defendants i.e. defendant Nos.2 AVR,J AS_1062_2017 Page 8 of 17 and 3 failed to cross-examine the witness and the evidence affidavit sent to the defendants' counsel was returned with the endorsement 'addressee left', thereafter, the plaintiff's evidence was closed. The trial Court on appreciating the oral evidence of PW1 and the contents of Exs.A1 to A9 held that the sale of suit land in favour of the defendant Nos.2 and 3 by the 1st defendant is hit by Section 53(A) of Transfer of Property Act (for short 'TP Act') and that the defendant Nos.2 and 3 failed to establish that they are the bonafide purchasers of the same for valuable consideration.
13. The trial Court further held that the defendant No.1 clandestinely executed the sale deeds in question in favour of defendant Nos.2 and 3 only to defeat the interest of the plaintiff and that during pendency of the suit in O.S.No.69 of 2005 execution of the said sale deeds by the defendant No.1 in favour of the defendant Nos.2 and 3 in view of the prohibitory orders in I.A.No.1117 of 2005 is illegal and hit by Section 53(A) of TP Act and as such all the defendants are liable to account for the suit filed in AVR,J AS_1062_2017 Page 9 of 17 O.S.No.69 of 2005. Accordingly, the suit was decreed as prayed for.
14. Learned counsel for the appellants/defendant Nos.2 and 3 strenuously contends that no opportunity was given to the contesting defendants to cross-examine PW1 and it is an ex-parte decree and that though the defendants have filed their written statement, they were not allowed either to cross-examine PW1 or to adduce their evidence and that they are bonafide purchasers for valuable consideration. Further submits that they are not parties to the suit in O.S.No.69 of 2005 nor they were aware of the orders in I.A.No.1117 of 2005 and prayed to remand the matter to the trial Court for disposal afresh.
15. Per contra, learned counsel for the plaintiff would submit that the defendants are acting clandestinely to defeat the interest of the plaintiff. Defendant No.1 was aware of prohibitory orders passed in I.A.No.1117 of 2005 and in-fact on 07.06.2005 he has filed counter and executed all the four sale deeds in question in favour of the defendant Nos.2 and 3 despite prohibitory orders without AVR,J AS_1062_2017 Page 10 of 17 furnishing security. He would further contend that as per Section 64 of CPC any such private alienations, when the attachment order was in force, shall be void as against all claims enforceable under the attachment and that if the suit is remanded for fresh disposal, it will cause further delay resulting prejudice to the plaintiff.
16. Undisputedly the conditional attachment order passed in IA No.1117 of 2005 was in force as on the date of execution of all these four sale deeds as in Exs.A5 to A8 and that the defendant Nos.2 and 3 are not the parties to the proceedings in O.S.No.69 of 2005, wherein South Indian Bank has filed implead petition stating that the property covered under Exs.A5 to A8 was mortgaged long back and they have initiated proceedings before the Debts Recovery Tribunal. In such circumstances, whether defendant Nos.2 and 3 were aware of such prohibitory orders passed in I.A.No.1117 of 2005 is a question to be decided on merits. But in the case on hand, these defendant Nos.2 and 3 having filed the Written Statement did not pursue the matter and they failed to give instructions to their counsel to cross-examine PW1 in AVR,J AS_1062_2017 Page 11 of 17 O.S.No.710 of 2006 nor did they enter into the witness box to speak the contents of the Written Statement filed by them on oath to establish that they were not aware of the orders in IA No.1117 of 2005 and that they are bonafide purchasers for valuable consideration and they have verified the original sale deeds of the defendant No.1 in South Indian Bank and after discharging the loan amount to the bank the sale deeds were executed. Equally there is no evidence on behalf of the defendants to show that they have paid certain amounts to the employees of defendant No.1 on his behalf as pleaded in their Written Statement.
17. Learned counsel appellants relied on the principles laid in the following decisions:
(i) Robin Thapa Vs. Rohit Dora1.
(ii) N.Mohan Vs. R.Madhu2.
18. Perused the principles laid in the above
decisions. In Robin Thapa case (1st supra) the Hon'ble
Supreme Court held that ordinarily, a litigation is based on adjudication on the merits of contentions of the parties and 1 AIR 2019 SC 3225 2 AIR 2020 SC 41 AVR,J AS_1062_2017 Page 12 of 17 the litigation should not be terminated by default, either of the plaintiff or the defendant. The cause of justice does require that as far as possible, adjudication be done on merits.
19. In N.Mohan case (2nd supra) in a suit for recovery of money decreed ex-parte, the appellant/ defendant has filed appeal challenging the decree with a delay condonation application. It appears the High Court has dismissed the said application on the ground that in the earlier proceedings under Order 9, Rule 13 of CPC the appellant had stated the same reason to set aside the ex- parte decree and such reasons were not accepted by the trial Court pointing out that the appellant has chosen belatedly to file the first appeal. On such dismissal of the delay condonation petition by the High Court, the Apex court has held that the appellant deserves an opportunity to put-forth his defence in the suit but to avail this opportunity he must deposit the balance amount as a condition precedent for condonation of delay.
AVR,J AS_1062_2017 Page 13 of 17
20. Per contra, learned counsel for the plaintiff relied on the principles laid in C.S.Mani (Deceased) by LR C.S.Dhanapalan Vs. B.Chinnasamy Naidu (Deceased) through LRs3 wherein the Apex court in paragraph No.27 held that once the attachment before judgment is ordered it continuous till the property was sold in public auction. Consequently any sale by the judgment debtor during substance of attachment is void in so far as the decree obtained by the appellant is concerned.
21. Reverting back to the facts of the case on hand, the plaintiff has filed suit for recovery of money against the defendant No.1 alone in O.S.No.69 of 2005 wherein the defendant Nos.2 and 3 are not parties but the South Indian Bank has filed an implead petition. Be it stated that as per the orders in I.A.No.1117 of 2005 conditional attachment was ordered under Order 38, Rule 5 of CPC for furnishing security towards the suit claim but instead of furnishing surety, the 1st defendant herein, who is the sole defendant in O.S.No.69 of 2005, has filed counter on 06.07.2005 and thereafter on 17.06.2005 executed all the four sale deeds 3 (2010) 9 Supreme Court Cases 513 AVR,J AS_1062_2017 Page 14 of 17 in question in favour of the defendant Nos.2 and 3 herein. They are claiming to be the bonafide purchasers alleging that they were not aware of the proceedings in O.S.No.69 of 2005 and the prohibitory orders and that they verified the title of the 1st defendant with the originals in South Indian Bank, having satisfied with the title of defendant No.1, paid the entire sale consideration and obtained sale deeds as in Exs.A5 to A8 in original. They have also paid some other amounts, as such, the sale deeds executed in their favour on 17.06.2005 are not liable for cancellation.
22. In such facts and circumstances of the case since the evidence of PW1 is not tested with the cross- examination on behalf of defendant Nos.2 and 3 and also they did not adduce any evidence on their behalf, considering the principles laid in the above decisions, I find some justification in the request made by learned counsel for the appellants/defendants. However, considering the fact that Original Suit is pending for the last more than one and half decade and the plaintiff could not realize any amount and also considering the principles laid by the Apex court in the decision second cited supra and that the AVR,J AS_1062_2017 Page 15 of 17 suit is not filed for recovery of amount and it is only filed to declare the said sale deeds i.e. Exs.A5 to A8 as null and void as they were executed when the prohibitory orders in I.A.No.1117 of 2005 in O.S.No.69 of 2005 were in force and that these defendants failed to cross-examine PW1 and could not adduce their own evidence in this suit, I am inclined to set aside the judgment and decree dated 04.06.2012 in O.S.No.710 of 2006. However considering the fact that Original Suit is filed in the year 2006 and initially the plaintiff has filed O.S.No.69 of 2005 and after obtaining decree Execution petition is also filed, I am inclined to direct the trial Court to dispose of the Original Suit in O.S.No.710 of 2006 within six months from the date of receipt of copy of the judgement.
23. In the result, the appeal suit is allowed, the judgment and decree impugned dated 04.06.2012 in O.S.No.710 of 2006 is hereby set aside and the Original Suit is remanded to the trial Court for a fresh disposal by giving opportunity to the defendant Nos.2 and 3 to cross- examine PW1 and also giving an opportunity to the plaintiff to adduce further evidence, if any and after closure of AVR,J AS_1062_2017 Page 16 of 17 plaintiff's evidence, to give opportunity to the defendant Nos.2 and 3 to adduce their evidence if any, and thereafter to dispose of the matter on merits within six months from the date of receipt of copy of this judgment.
Be it stated that since subsequent to disposal of the Original Suit judicial districts were carved out in the State and the suit schedule property i.e. land admeasuring Ac.8.00 guntas, Kistapur Village of Medchal Mandal, Ranga Reddy District is now forming part of Medchal-Malkajgiri District, the learned Principal District Judge, Medchal- Malkajgiri District at Malkajgiri shall make every endeavour to dispose of the Original Suit within six months from the date of receipt of copy of this judgment. Both the parties to the suit shall co-operate for expeditious disposal of the Original Suit as directed and they shall appear before the learned Principal District Judge, Medchal- Malkajgiri District at Malkajgiri on 14.12.2022 for receiving the directions of the trial Court as to further the proceedings as indicated above.
AVR,J AS_1062_2017 Page 17 of 17 However, in the circumstances of the case, there shall be no order as to the costs. Miscellaneous applications, if any pending, shall stands closed.
________________________________ A.VENKATESWHARA REDDY, J Dated : 24-11-2022 abb