Karnataka High Court
Maruti vs Manjunath on 18 February, 2025
1
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
DATED THIS THE 18TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE C.M. POONACHA
REGULAR SECOND APPEAL No.5659 OF 2009 (DEC/INJ)
BETWEEN
MARUTI
S/O SHIDDAPPA KALAL
AGED ABOUT 50 YEARS,
OCC:BUSINESS
R/O HANGAL
HAVERI DIST 581110
...APPELLANT
(BY SRI DINESH M KULKARNI, ADVOCATE(NOC))
AND
1 . MANJUNATH
S/O MAILARAPPA MALI
AGED ABOUT 56 YEARS,
OCC:BUSINESS
R/AT HANGAL NOW AT MALAGI
MUNDHGOD TALUK
HAVERI DISTRICT 581110
2 . MALLANNA GOUNDA
S/O AYYANA GOUDA
VEERANNA GOUDAR
AGED ABOUT 43 YEARS,
OCC: AGRICULTURE
R/T KOPPARA SIKOPPA
HANGAL TALUK
HAVERI DISTRICT 581110
...RESPONDENTS
(BY SRI MAHESH WODEYAR, ADVOCATE FOR R2
R1 IS SERVED)
2
THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGEMENT &
DECREE DTD:24/08/2009 PASSED IN R.A.NO:61/2008 ON THE FILE OF
THE DISTRICT AND SESSIONS JUDGE, (FAST TRACK COURT) HAVERI,
DISMISSING THE APPEAL AGAINST THE JUDGEMENT AND DECREE
DTD:19-04-2008 IN O.S.NO.12/2004 ON THE FILE OF THE CIVIL JUDGE
(SR.DN) & JMFC., HANGAL, DISMISSING THE SUIT FILED FOR
DECLARATION AND INJUNCTION AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 18.12.2024 COMING ON FOR PRONOUNCEMENT THIS
DAY, THE COURT DELIVERED THE FOLLOWING:-
CORAM: HON'BLE MR JUSTICE C.M. POONACHA
CAV JUDGMENT
The present second appeal is filed under Section 100 of the
Code of Civil Procedure, 19081 by the plaintiff challenging the
judgment and decree dated 24.08.2009 passed in R.A.No.61/2008
by District and Sessions Judge (Fast Track Court), Haveri2 and the
judgment and decree dated 19.4.2008 passed in OS No.12/2004
by the Civil Judge (Sr.Dn) and JMFC, Hangal3, wherein the suit for
declaration and injunction has been dismissed by the Trial Court
which has been affirmed by the first appellate Court.
2. The parties will be referred to as per their ranking
before the Trial Court for the sake of convenience.
Hereinafter referred to as 'CPC'
Hereinafter referred to as the 'first appellate Court'
Hereinafter referred to as the 'trial Court'
3. It is the case of the plaintiff that property bearing
Sy.No.314/B, plot No.20 measuring 11 guntas (TMC No.4487)4
originally belonged to one Hanamanthappa Rajappa Chikkannavar
and it was part of property bearing Sy.No.314/1 which totally
measured 7 acres 29 guntas. That out of the said property, an
extent of 4 acres was converted to non agricultural purpose on
27.3.1981 and at that time, it was bearing Sy.No.314/1A, plot
No.21 measuring 11 guntas. The suit property is described in
para 2 of the plaint as Sy.No.314/B, plot No.20 measuring 11
guntas and given TMC No.4487. The boundaries have also been
mentioned. That the suit property was sold by the original owners
to defendant No.1 on 25.5.1981 for a total sale consideration of
`4,000/- and the possession was handed over on the same day.
That defendant No.1 vide registered Sale Deed dated 13.4.1983
sold the said property for a total sale consideration of `9,000/- to
one Shyam Kalal and possession was also handed over on the said
date, consequent to which, the name of Shyam Kalal was entered
in the revenue records in respect of TMC No.4487 Plot No.20. That
thereafter the said Shyam Kalal sold the suit property to the
Hereinafter referred to as the 'suit property'
plaintiff for sale consideration vide registered Sale Deed dated
5.4.1989. That the plaintiff was also put in possession of the said
property and the name of the plaintiff has been entered in the
municipal records. That the plaintiff has also paid development
charges in respect of the suit property.
4. It is the further case of the plaintiff that in the year
1994 as per the order of the Director of Land Records, KGP was
done and said Sy.No.314/1A was give new No.314/B and in that
survey number totally 32 plots were laid and plot No.21 i.e., RS
No.314/1A was numbered as RS 314/1B, Plot No.20. That in view
of the variation in the number, the plaintiff requested the legal
representatives of the original owner to get the Rectification Deed
executed since the name of defendant No.1 was appearing in the
revenue records. Hence, it was agreed that the original owner
should execute a Rectification Deed in favour of defendant No.1
and thereafter, defendant No.1 should execute the Rectification
Deed in favour of Shyam Kalal and thereafter, Shaym Kalal in
favour of the plaintiff. That accordingly, the Rectification Deed was
executed by the legal representatives of the original owner in
favour of defendant No.1 on 29.11.2003 and the Sale Deed dated
29.5.2009 in favour of defendant No.1 was corrected. It is the
further case of plaintiff that defendant No.1 as per the agreement,
did not execute any Rectification Deed in favour of Shyam Kalal,
but in collusion, he executed a Sale Deed in favour of defendant
No.2 on 26.5.2004 and on the strength of the said Sale Deed,
defendant No.2 interfered with the lawful possession of the
plaintiff. Hence, the plaintiff filed the suit for declaration and
injunction.
5. Defendant No.1 entered appearance through his
counsel and filed written statement denying the plaint averments.
Further, he admitted the description of the suit property. The
conversion of the suit property to non agricultural purpose on
27.3.1981 was also admitted, as also the fact that the property
was sold on 25.5.1981 to defendant No.1 for a total sale
consideration of `4,000/- and that the said defendant was also put
in possession of the property. He further admitted that on
13.4.1983 the defendant No.1 sold the suit property to one
Shyam Kalal for a total sale consideration of `9,000/- to pay off
the bank loan. It is the case of the said defendant that the said
sale was a conditional one i.e., out of the sale consideration
amount, a sum of `5,000/- was to be paid to the bank towards
the loan amount drawn by him, but the said Shyam Kalal did not
pay the amount to the bank as agreed. Hence, it is contended that
possession was not handed over to the said Shyam Kalal. It is
further denied that the plaintiff has paid development charges and
the suit property is given TMC No.4487, plot No.20. It is also
denied that in the year 1993, the name of the plaintiff has been
entered in the municipal records.
6. It is admitted by defendant No.1 that as per the
directions of the Director of Land Records, as per ME No.3592, 32
plots were laid and in the said process RS No.314/1A plot No.21
was converted into R.S.No.314/B, plot No.20. It is contended that
in the said process, the defendant No.1 has paid `15,000/- and
hence, as per the Rectification Deed, defendant No.1 is the owner
of the suit property and the said Shyam Kalal has no authority to
sell the property as he did not comply with the conditions of the
Sale Deed.
7. It is further contended that as per the Rectification
Deed, defendant No.1 alone is the owner of the suit property and
got every right to dispose of the said property and hence, he sold
the suit property to defendant No.2 on 26.5.2004 and re-paid the
bank loan. It is further contended that the plaintiff has not
included the original owners and Shyam Kalal as parties to the
suit. Hence, the suit is bad for non joinder of necessary parties. It
is also contended that alternatively defendant Nos.1 has become
owner by adverse possession. It is further contended that
defendant No.2 is a bonafide purchaser for value. Hence, the
defendant No.1 sought for dismissal of the suit.
8. Defendant No.2 has filed a memo adopting the written
statement filed by defendant No.1.
9. Consequent to the pleadings of the parties, the Trial
Court framed the following issues:
1) "Whether the plaintiff proves, he has become owner
of suit property as per sale deed dated 5-4-1989 as
contended?
2) Whether plaintiff proves his possession over suit
property as on date of suit?
3) Whether plaintiff further proves that sale deed dated
26-5-2004 executed by defendant No.1 in favour of
defendant No.2 pertaining to suit property is not binding on
him?
4) Whether defendant proves that suit is barred by
time?
5) Whether defendant No.1 proves that he has become
owner of suit property by adverse possession as
contended?
6) Whether defendant No.1 further proves that, sale
deed executed by him in favour of Shyam Kalal dated 13-
4-1983 is only for security and never intended to be acted
upon?
7) Whether defendant No.2 proves that, he is a
bonafide purchaser of suit property for valuable
consideration?
8) Whether plaintiff is entitle for declaration and
injunction as prayed for?
9) What order or decree?"
10. The plaintiff examined himself as PW.1 and a witness
as PW.2. Exs.P1 to P17 have been marked in evidence. Defendant
No.1 examined himself as DW.1 and two witnesses as DWs.2 and
3. Exs.D1 to D23 have been marked in evidence. The Trial Court
by its judgment and decree dated 19.4.2008, dismissed the suit.
11. Being aggrieved, the plaintiff preferred R.A.
No.61/2008. The defendants entered appearance before the first
appellate Court and contested the same. The first appellate Court
framed the following points for consideration:
(i) Whether plaintiff/appellant proves that he acquired
the title to the suit schedule property, through a registered
sale deed dated 5.4.1989 executed by Shyam Kalal, and
further the sale deed dated 26.5.2004 executed by
defendant No.1 in favour of defendant No.2 in respect of
the same property is not binding on him?
(ii) Whether the sale deed executed by defendant No.1
in favour of Shyam Kalal on 13.4.1983 is void as per the
provisions of section 32 and 33 of Karnataka Co-Operative
Societies Act?
(iii) Whether the judgment and decree of the trial Court
is illegal and as such calls for interference in this appeal?
(iv) To what decree or order?"
12. The first appellate Court by its judgment and decree
dated 24.08.2009 dismissed the appeal and confirmed the
judgment and decree passed by the Trial Court. Being aggrieved,
the present second appeal is filed.
13. This Court by order dated 26.8.2011 admitted the
above appeal and framed the following substantial questions of
law:
(i) Whether in the facts and circumstances of the case,
are the Courts below justified in holding that the sale deeds
in favour of the plaintiff as per Exs.P1 & P2 do not provide
for and create a charge and can the Courts infer that such
charge exists without specific creating of the same and is
hit by Section 31 and 32 of the Karnataka Co-Operative
Societies Act?
(ii) Whether in the facts and circumstances of the case,
are the Courts below justified in holding that the sale deeds
in favour of the plaintiff as per Ex.P1 and P2 are hit by
Section 31 and 32 of the Karnataka Co-Operative Societies
Act?
14. Learned counsel for the appellant/plaintiff Sri Dinesh
M.Kulkarni, vehemently contends that admittedly defendant No.1
executed the registered Sale Deed dated 13.4.1983 in favour of
Shyam Kalal and having regard to Section 54 of the Transfer of
Property Act, 18825 the suit property has stood conveyed to the
said purchaser notwithstanding the fact that the entire sale
consideration has not been paid. He further contends that Section
32 of the Karnataka Co-operative Societies Act, 19596 would be
attracted only vis-à-vis the claims of the society and the said
claims having been paid, the conveyance of the suit property by
virtue of the Sale Deed dated 13.4.1983 would not in any manner
stand affected. He further contends that the Trial Court as well as
the first Appellate Court have erred in recording a finding that
since the sale consideration under the Sale Deed dated 13.4.1983
has not been paid, the title to the suit property has not been
conveyed, which is contrary to Section 54 of the TP Act. He
further contends that the plaintiff has adequately proved his case,
Hereinafter referred to as 'TP Act'
Hereinafter referred to as 'Societies Act'
having purchased the property from said Shyam Kalal, who was
the purchaser from defendant No.1 and hence, the suit of the
plaintiff for declaration ought to be decreed. Hence, he seeks for
allowing of the above appeal and granting of the reliefs sought
for.
15. Per contra, learned counsel Sri Mahesh Wodeyar
appearing for the respondents/defendants vehemently contends
that in the Sale Deed dated 13.4.1983, the purchaser i.e., Shyam
Kalal was required to pay the total sale consideration of `9,000/-,
which admittedly has not been paid. That the said Shyam Kalal
took the contention that the sum of `5,000/- which he was
required to pay to the bank towards the loan amount has been
taken by defendant No.1, two days after execution of the Sale
Deed which has not been proved. He further contends that having
regard to Section 32(3) of the Societies Act and having regard to
the fact that as on the date of the Sale Deed dated 13.4.1983, the
suit property having been mortgaged with the society, the
conveyance made by the said Sale Deed dated 13.4.1983 is void.
He further contends that the Societies Act being a special law
would prevail over the general law. He further contends that the
plaintiff has failed to prove that he is the absolute owner of the
suit property and hence, he seeks for dismissal of the above
appeal.
16. Both the learned counsels have relied upon various
judgments, which shall be considered during the course of this
judgment to the extent that the same are necessary for
adjudicating the questions that arise for consideration in this
appeal.
17. The submissions of both the learned counsels have
been considered and the records have been perused including the
records of the Trial Court and the first appellate Court.
18. Before considering the contentions put forth by both
the learned counsels, it is necessary to notice the findings
recorded by the Trial Court and the first appellate Court.
19. The Trial Court while dismissing the suit has recorded
the following findings:
i. It is specifically contended by defendant
No.1 that as per the terms of the Sale Deed,
out of the sale consideration of `9,000/-
defendant No.1 has already received `2,000/-
and hence he has to receive `2,000/- at the
time of registration and `5,000/- was to be
paid to the co-operative bank which was the
outstanding balance on the property;
ii. It is the contention of defendant No.1
that Shyam Kalal has failed to pay `5,000/- to
the co-operative Society and that the
defendant thought that arrears of due has
been paid by Shyam Kalal as per the terms of
the Sale Deed. That only in the year 1992, he
came to know that the due was not paid by
Shaym Kalal, hence the co-operative bank
issued notice to defendant No.1 to attach his
movable and immovable property;
iii. That upon a notice issued by defendant
No.1 to Shaym Kalal, the same was replied to
by him stating that within 2 to 3 days from
the Sale Deed, defendant No.1 has personally
came to Shaym Kalal and collected the
amount of `5,000/- in the presence of two
panchas and hence, he is not liable to pay the
amount. It is the specific case of defendant
No.1 that Shyam Kalal has not paid `5,000/-
as per the terms of the contract and he has
not acquired title under the Sale Deed dated
13.4.1983;
iv. The contents of Ex.P2 - Sale Deed
clearly goes to show that the entire
consideration of `9,000/- was not received by
defendant No.1 on the date of execution of
the document. So unless the entire amount
was paid as per the terms, the proprietary
right in the suit property will not be invested
on in favour of Shyam Kalal;
v. Shyam Kalal admits that he has not paid
`5,000/- to the bank. But he contends that
within 2 days defendant No.1 came to him
and personally took `5,000/- in the presence
of panchas;
vi. It is quite clear that in the year 1991,
defendant No.1 has received attachment
notice from the bank and then he came to
know about the non payment of the arrears.
But Shaym Kalal has given reply (Ex.P14) and
according to Shyam Kalal he has paid
`5,000/- on 2.5.1982 in the presence of
panchas. If he proves about payment of
`5,000/-, only then the Sale Deed would be
valid and Shyam Kalal will get proprietary
right, otherwise no title has been passed on to
Shyam Kalal as per Sale Deed dated
13.4.1983;
vii. Shyam Kalal (PW.2) has stated in his
cross- examination that he paid the amount in
the presence of one M.H.Kalal and Ramanna
Chikkannavar;
viii. It is admitted that Shyam Kalal has not
obtained receipt from defendant No.1 and
there was no difficulty for Shyam Kalal to take
receipt from defendant No.1 if at all he has
paid `5,000/- as contended by him.
Admittedly, there is a condition in Ex.P2 that
`5,000/- was the bank arrears for which the
property was mortgaged and admittedly the
condition was that Shyam Kalal should pay
the arrears of `5,000/- and obtain receipt
from the bank. Due to non compliance of
condition mentioned in Ex.P2, the proprietary
right has not passed on to Shyam Kalal. This
fact goes to show that at the time when
Shyam Kalal had executed the Sale Deed in
favour of the plaintiff, he was not at all having
any right, title or interest in the suit property
because Ex.P2 has not been complied with;
ix. That unless the amount has been paid
by the said Shyam Kalal, the Sale Deed will
become void as per the provisions of Section
32 of the Karnataka Co-operative Societies
Act;
x. Clause (2) of Section 32 of the
Karnataka Co-operative Societies Act,1959
states that when there is a charge of co-
operative society on any particular property,
except previous permission in writing to the
co-operative society, sale deed cannot be
executed;
xi. When Shyam Kalal has himself has not
got any right over the suit property, he cannot
dispose of the suit property in favour of
plaintiff No.1 by virtue of Ex.P1. It was the
bounden duty of the plaintiff to get correction
Deed from his vendor i.e., Shyam Kalal, but
on this point plaintiff contends that the plots
were given new number in the year 1994 and
the name of defendant No.1 still appears in
the revenue records and under Ex.P3 by the
parties that they should execute Correction
Deed in favour of defendant No.1;
xii. The documents produced by defendant
goes to show the legal representatives of
Chikkannavar have executed correction
deed in favour of defendant No.1 but
defendant No.1 did not execute correction
deed in favour of Shyam Kalal;
xiii. The revenue records clearly disclose that
there was a Urban Co-operative Bank,
Bhoja, which is evident from the record of
rights (Ex.D20 and Ex.D21);
xiv. D12 goes to show that after discharge of
entire loan, the bank has executed
relinquishment deed in favour of defendant
No.1, wherein, the mortgage of property to
the bank is also mentioned;
xv. The mortgage was executed in favour of
Urban Co-operative Bank with respect to
`5,000/- on 4.9.1981 i.e., prior to Sale
Deed in favour of Shyam Kalal and after
receipt of entire amount they have
executed the discharge deed. This clearly
goes to show that on the date of execution
of the Sale Deed in favour of Shyam Kalal
the property was already mortgaged to the
Hangal Urban Co-Operative Bank;
xvi. Further, Ex.D13 which is corresponding to
Ex.P8 clearly goes to show that after giving
new number, original owner have executed
correction deed in favour of defendant
No.1;
xvii. The documents clearly goes to show that at
the time of execution of the Sale Deed in
the year 2003, defendant No.1 was having
valid title over the suit property and as he
has transferred for valid consideration. On
the other hand, it is already held that
Shyam Kalal has violated the terms of the
Sale Deed, has not obtained any title on
the suit property. So his Sale Deed in
favour of plaintiff will not have any validity
or any sanctity in the eye of law.
xviii. Hence, I am of the opinion that plaintiff
has failed to prove that at the time of the
execution of Ex.P1, Shyam Kalal was
having right, title or interest over the suit
property and by virtue of Ex.P1 i.e., Sale
Deed on 05.04.1989, plaintiff has become
owner of suit property ;
xix. Plaintiff has failed to show that he is in
possession of the suit property as on date of
suit;
xx. At the time of execution of Sale Deed of
2003, the defendant was having valid title
of the suit property and he has transferred
for valid consideration and as per defendant
No.1, it is stated that the arrears of bank
loan to the extent of Rs.1,00,000/- to
Rs.2,00,000/- has been paid by defendant
No.2 and the remaining amount of
Rs.2,00,000/-was paid by defendant No.1 in
cash. So the Sale Deed of 2003 is supported
by valid consideration. On the other hand, it
is already held that Shyam Kalal has
violated the terms of the Sale Deed and has
not obtained any title on the suit property,
so his Sale Deed in favour of the plaintiff is
not having validity or any sanitity in the eye
of law;
xxi. Hence, Sale Deed in favour of defendant
No.2 is binding on all people including
plaintiff.
20. The First Appellate Court, while considering the appeal
of the plaintiff has recorded the following findings:
i. Admittedly, no receipt has been issued
by defendant No.1 for having received the
sum of `5,000/- from Shyam Kalal. Defendant
No.1 has denied the receipt of the said sum
from Shyam Kalal;
ii. At this juncture, it is to be noted that
the said Shyam Kalal - PW.2 in his chief
examination stated that after two days of the
registration of the Sale Deed, he paid the said
amount to the defendant in the presence of
two panchas;
iii. PW.2 also admitted that he received
the notice as per Ex.P13 issued by defendant
No.1 to him. In Ex.P13, it is clearly
mentioned that there was a condition in the
Sale Deed dated 13.4.1983, that Shyam Kalal
has to discharge the bank loan of `5,000/-,
but the bank authorities came to attach his
house on the ground that the bank loan is not
discharged and as in the year 1991, the
outstanding loan was `12,000/- and the said
sum has not been discharged by Shyam Kalal
as per the terms and conditions of the Sale
Deed;
iv. PW.2 has issued a reply as per Ex.P14
wherein he has stated that he paid the sum of
`5,000/- to the defendant No.1 on 2.5.1983 in
the presence of panchas and the defendant
No.1 has received the sum by stating that he
himself has discharged the bank loan;
v. At this juncture, it is to be noted that
when there is a specific condition in the Sale
Deed, that the said Shyam Kalal has to
discharge the bank loan of `5,000/- and to get
the receipt and when admittedly he has not
discharged the said loan and when there is no
proof regarding the payment of the said sum
of `5,000/- to the defendant No.1, it is not
possible to believe the contention of plaintiff
that the said Shyam Kalal has paid the sum of
`5,000/- to the defendant No.1 as per the
terms and conditions of the Sale Deed;
vi. One of the important condition of sale
is passing of consideration to the vendor. If
the consideration is not passed, the sale will
become invalid and the title will not pass to
the purchaser. When admittedly, the Sale
Deed in favour of Shyam Kalal by defendant
No.1 is a conditional Sale Deed, and when it is
proved that the said condition is not fulfilled
by the purchaser, certainly the purchaser will
not get any right, title or interest over the suit
property;
vii. It is an admitted fact, that on the date
of execution of the Sale Deed by defendant
No.1 as per Ex.P2 in favour of Shyam Kalal,
he has got right, title and interest over the
suit property and he was also in possession of
the suit property. Admittedly, the defendant
No.1 has sold the suit property in favour of
defendant No.2 after discharging the loan on
the said property for valid consideration
through a registered Sale Deed;
viii. It is an admitted fact that on the date
of execution of sale deed by defendant No.1
as per Ex.P2 in favour of Shyam Kalal, he has
got right, title and interest over the suit
property and he was also in possession of the
suit property. Since it is proved that the sale
deed executed by defendant No.1 in favour of
Shyam Kalal as per Ex.P2 is not a valid sale
and title does not pass to the said Shyam
Kalal, the said title remains with the
defendant No.1;
ix. Admittedly, the defendant N.1 has sold
the suit property in favour of defendant No.2
after discharging the loan on the said property
for valid consideration through a registered
sale deed. So, the defendant No.2 has
acquired the right, title and interest over the
suit property through the said sale deed dated
26.5.2004. So the said sale deed is certainly
binding on the plaintiff also;
x. In the instant case admittedly the suit
property was mortgaged to Co-operative Bank
and there was a charge on the said property
on the date of alienation in favour of Shyam
Kalal. So the alienation in favour of Shyam
Kalal is void;
xi. In view of the provisions of Sections 32
and 33 of the Karnataka Co-operative
Societies Act also the sale in favour of Shyam
Kalal is void as he does not acquire any right,
title or interest over the suit property;
xii. When Shyam Kalal himself has no right
to alienate the suit property, the sale deed
executed by said Shaym Kalal in favour of the
plaintiff is also void and the plaintiff also will
not any get right, title or interest;
21. Having regard to the contentions put forth by both the
learned counsel and the findings of both the Courts, a further
substantial question of law arises for consideration as to, "whether
the findings of both the Courts that the Sale Deed dated
13.4.1983 (Ex.P2) is invalid and not having sanctity in the eye of
law, is just and proper having regard to Section 54 of the T.P.
Act?"
22. The submissions of both the learned counsels have
also been heard on the said substantial question of law.
23. It is clear and forthcoming from the aforementioned
that admittedly, the defendant No.1, was the owner of the suit
property having acquired title to the same vide registered Sale
Deed dated 25.5.1981 (Ex.P1). Further it is not in dispute that
vide the Sale Deed dated 13.4.1983 (Ex.P2), the defendant No.1
conveyed the suit property to Shyam Kalal, for a total sale
consideration of `9,000/-. The defendant No.1 acknowledged
receipt of a sum of `2,000/-. Shyam Kalal was required to pay
`5,000/- to the bank towards discharge of the loan of defendant
No.1 and the balance sale consideration of `2,000/- was payable.
24. It is relevant to note that as on date of execution of
Sale Deed dated 13.04.1983 (Ex.P2), the property was mortgaged
in favour of the Hangal Urban Co-operative Bank7. It is
forthcoming that since the loan to the bank was not repaid, the
bank got issued notice dated 25.01.92 (Ex.D14) and auction
notices were also issued as per Ex.D15 to Ex.D17.
25. The plaintiff in support of his case has examined
Shyam Kalal as PW.2, who was stated that within one week of
execution of Sale Deed (Ex.P2), the defendant No.1 collected
`5,000/-. That Shyam Kalal was required to pay the said sum of
`5,000/- to the bank and that Shyam Kalal paid the said amount
to defendant No.1 in the presence of two witnesses. However,
Shyam Kalal admits that he has not taken any receipt from
Hereinafter referred to as the 'bank'
defendant No.1 for having paid said `5,000/- nor has the
witnesses who were allegedly present at the time he paid the said
amount been examined.
26. It is further forthcoming that the bank executed
Relinquishment Deed dated 26.05.2004 (Ex.D12) acknowledging
that the entire amount due has been paid and discharged the suit
property from the mortgage created in respect of loan availed by
defendant No.1. It is further relevant to notice here that on the
same date, the defendant No.1 executed registered Sale Deed
dated 26.05.2004 (Ex.D13) conveying the suit property in favour
of defendant No.2.
27. It is the vehement contention of the learned counsel
for the appellant that in the legal notice dated 18.1.1992 (Ex.P13)
issued by defendant No.1 to Shyam Kalal, he admits the Sale
Deed dated 13.04.1983 (Ex.P2) as well as the consideration
stipulated under the said document, and having regard to Section
54 of the TP Act, it is contended that the sale having taken place
vide registered Sale Deed (Ex.P2), if the sale price has not been
paid, the same will not affect the transfer of title and the re-
course open to the vendor is to sue for recovery of sale price.
Hence, it is contended that the findings of both the Courts that the
Sale Deed dated 13.04.1983 (Ex.P2) is null and void is erroneous
and liable to be interfered with. It is further contended that
notwithstanding the aspect regarding admission of the entire sale
consideration not having been paid, having regard to the fact that
defendant No.1 has admittedly executed the Sale Deed dated
13.4.1983 in favour of Shyam Kalal, the suit property has stood
conveyed in favour of the said Shyam Kalal. In this context, it is
relevant to notice Section 54 of the TP Act, which states as
follows:
"54. "Sale" defined.--
"Sale" is a transfer of ownership in exchange for a price
paid or promised or part-paid and part-promised.
Sale how made.--Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees
and upwards, or in the case of a reversion or other
intangible thing, can be made only by a registered
instrument.
In the case of tangible immoveable property of a value less
than one hundred rupees, such transfer may be made
either by a registered instrument or by delivery of the
property.
Delivery of tangible immoveable property takes place when
the seller places the buyer, or such person as he directs, in
possession of the property.
Contract for sale.--A contract for the sale of immoveable
property is a contract that a sale of such property shall
take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on
such property."
28. Further, learned counsel for the appellant relied upon
the judgment of the Hon'ble Supreme Court in the case of
Bishundeo Narain Rai v. Anmol Devi8 wherein the Hon'ble
Supreme Court has held as follows:
"11.......... A combined reading of Section 8 and Section
54 of the Transfer of Property Act suggests that though
on execution and registration of a sale deed, the
ownership and all interests in the property pass to the
transferee, yet that would be on the terms and conditions
embodied in the deed indicating the intention of the
parties. It follows that on execution and registration of a
sale deed, the ownership title and all interests in the
property pass to the purchaser unless a different intention
is either expressed or necessarily implied which has to be
proved by the party asserting that title has not passed on
registration of the sale deed. Such intention can be
gathered by intrinsic evidence, namely, from the
averments in the sale deed itself or by other attending
circumstances subject, of course, to the provisions of
Section 92 of the Evidence Act, 1872."
(emphasis supplied)
29. There is no dispute as to the proposition that having
regard to Section 54 of the TP Act, consequent to the registration
of the absolute Sale Deed, in the event, the sale consideration has
AIR 1998 SC 3006
not been paid, the recourse open to the vendor is to sue for
recovery of the Sale price and the title of the property conveyed
under the said Sale Deed will in no manner be impaired/affected.
Hence the findings of the Trial Court and the First Appellate Court
that since the total sale consideration has not been paid by Shyam
Kalal to defendant No.1, the property has not been conveyed by
defendant No.1 to Shyam Kalal is erroneous and liable to be
interfered with. The substantial question of law framed at para
21 hereinabove is answered in the negative.
30. It is the contention of the learned counsel for the
respondents/defendants that said Shyam Kalal not having paid the
dues that were payable to the bank and defendant No.1 having
been notified by the bank of the dues payable to it, defendant
Nos.1 and 2 have paid and cleared the dues payable to the bank
and discharged the mortgage in favour of the bank and the bank
has executed Relinquishment Deed dated 26.5.2004 (Ex.D12) . It
is the further contention of the respondents/defendants that
previous owner having executed the Rectification Deed dated
29.11.2003 (Ex.D13) in favour of defendant No.1 and defendant
No.1 having retained title to the suit property, conveyed the same
vide registered Sale Deed dated 26.5.2004 (Ex.D12) to defendant
No.2.
31. In this context, it is relevant to note that the
Relinquishment Deed dated 26.5.2004 (Ex.D12) could at best be
construed as a document, wherein the bank has acknowledged
receipt of the amounts due and payable to it in respect of the loan
availed by defendant No.1 and the mortgage created in favour of
the bank has stood discharged, since the bank did not have any
right or title in the suit property except for the mortgage created
in its favour for the loan advanced by it.
32. Detailed submissions have been made by both the
learned counsels and findings have been recorded by both the
Courts with regard to Sections 32 and 33 of the Societies Act. It is
sought to be contended by the learned counsel for the respondent
that having regard to the fact that the Sale Deed dated 13.4.1983
(Ex.P2) executed by defendant No.1 in favour of Shyam Kalal as
also the subsequent Sale Deed dated 4.4.1989 (Ex.P4) executed
by Shyam Kalal in favour of the plaintiff having been executed
during the subsistence of the mortgage in favour of the bank and
having regard to Sections 31, 32 and 33 of the Societies Act, the
transfer during the subsistence of the mortgage is void. It is also
contended that the Societies Act being a special enactment, the
same prevails over the general law.
33. The said contention put forth on behalf of the
respondents/defendants as also the scope and applicability of
Sections 31, 32 and 33 of the Societies Act as well as the
judgments relied on by both the learned counsels in that regard
need not be gone into having regard to the fact that as on
26.5.2004 the mortgage in faovur of the bank stood discharged
and the bank has also executed the Relinquishment Deed dated
26.5.2004 (Ex.D12) evidencing the same. By virtue of Sections
31, 32 and 33 of the Societies Act, it was the bank which was
entitled to seek to invalidate any transfer made by the owner
during the subsistence of the mortgage. In any event, the said
question need not be gone into since as on that date of the suit,
i.e., 21.6.2004, the mortgage stood discharged.
34. It is forthcoming that as on the date of the Sale Deed
dated 13.4.1983 (Ex.P2) executed by defendant No.1 in favour of
Shyam Kalal as also as on the date of the Sale Deed dated
4.4.1989 (Ex.P4) i.e., sale of the suit property by Shyam Kalal in
favour of plaintiff, although mortgage in favour of the bank was
subsisting, the said conveyance, at best could be subject to the
mortgage that was in favour of the bank. The debt due and
payable to the bank having been paid and the said mortgage
having been discharged on 26.5.2004, there is no impediment in
the conveyance of the absolute right, title and interest in the suit
property by virtue of the Sale Deed dated 13.4.1983 (Ex.P2) and
4.4.1989 (Ex.P4).
35. With regard to possession, the Trial Court has framed
issue No.2 and while considering issue Nos.1 and 2, the Trial Court
recorded a finding that the plaintiff has failed to prove that he has
become owner of the suit property as on the date of the Sale
Deed dated 4.4.1989 (Ex.P4) since the plaintiff failed to
demonstrate that his vendor i.e., Shyam Kalal was having any
right, title and interest over the suit property as on the said date.
Hence, the Trial Court has recorded a finding that the plaintiff has
failed to show his possession over the suit property. Further, the
Trial Court has noticed that there is a temporary shed on the suit
property and both the plaintiff and defendant No.1 contended that
they have stored their waste material in the same. Hence, the
Trial Court recorded a finding that both the parties have failed to
convincingly prove the same. Further, the Trial Court has
recorded a finding that since defendant No.2 has title over the suit
property, it is presumed that defendant No.2 is in possession of
the suit property.
36. The First Appellate Court while considering the aspect
regarding possession has held that since the plaintiff has failed to
demonstrate that he has acquired any right over the suit property,
it is not possible to believe that possession was delivered by his
vendor to him. The First Appellate Court has also held that mere
entry of the name of the plaintiff and Shyam Kalal in the
panchayath records and payment of development charges will not
give any right to the plaintiff.
37. It is forthcoming that defendant No.1 had conveyed
the suit property absolutely to Shyam Kalal vide registered Sale
Deed dated 13.4.1983 (Ex.P2) and a finding having been recorded
herein that mere non payment of sale consideration would not in
any manner invalidate the conveyance made in favour of Shyam
Kalal and the said Shyam Kalal having executed a registered Sale
Deed dated 4.4.1989 (Ex.P4) in favour of the plaintiff, it is clear
that the plaintiff is the absolute owner of the suit property.
38. Learned counsel for the appellant/plaintiff by placing
reliance on the tax paid receipts (Ex.P15 to P17) and the payment
of development charges (Ex.P5) has contended that the plaintiff is
in possession of the suit property. It is also sought to be
contended that defendant No.1 not having retained any right over
the suit property, the question of recording a finding that
defendant No.1 is in possession of the suit property does not
arise.
39. It is relevant to note that defendant No.1 has
conveyed the suit property to Shyam Kalal vide registered Sale
Deed dated 13.4.1983 (Ex.P2) which also discloses that he has
handed over possession of the same and the said Shyam Kalal
having executed the registered Sale Deed dated 4.4.1989 (Ex.P4)
in favour of the plaintiff and it is also averred that possession of
the suit property is handed over as per the said document.
40. It is clear and forthcoming from the aforementioned
that the title of the suit property having been conveyed in favour
of the plaintiff and the plaintiff having produced the tax paid
receipts and document for having paid the development charges
and defendant No.1 not having retained any right, title or interest
over the suit property, the question of disbelieving the case of the
plaintiff that he is in possession of the suit property does not
arise.
41. Although it is the vehement contention of the learned
counsel for the respondents/defendants that by virtue of the
mortgage created in favour of the bank and by virtue of
renumbering of the suit property and the Rectification Deed dated
29.11.2003 (Ex.D13) having been executed by the erstwhile
owners in favour of defendant No.1, who in turn having executed
the registered Sale Deed dated 25.5.2004 (Ex.D12) in favour of
defendant No.2, defendant No.2 is the absolute owner of the suit
property, it is relevant to note that defendant No.1 having
executed the registered Sale Deed dated 13.4.1983 (Ex.P2) in
favour of Shyam Kalal, the question of defendant No.1 retaining
any manner of right, title or interest in the suit property does not
arise.
42. The execution of the Relinquishment Deed dated
29.11.2003 (Ex.D13) by the erstwhile owners in favour of
defendant No.1 would not vest defendant No.1 with any title to
the suit property since neither the bank nor the erstwhile owners
had any manner of right, title and interest over the suit property
as on the date of the execution of the said documents.
43. In view of the discussion made above, substantial
question of law Nos.1 and 2 are answered in the negative. The
relief sought for by the plaintiff in the suit is required to be
granted. Hence, the following:
ORDER
i. The above appeal is allowed;
ii. The judgment and decree dated 24.08.2009
passed in R.A.No.61/2008 by District and
Sessions Judge (Fast Track Court), Haveri, is set
aside;
iii. The judgment and decree dated 19.4.2008
passed in OS No.12/2004 by the Civil Judge
(Sr.Dn) and JMFC, Hangal, is set aside;
iv. The suit in OS No.12/2004 on the file of Civil
Judge (Sr.Dn) and JMFC, Hangal, is decreed with
costs as follows:
a. The plaintiff is declared to be the absolute
owner in possession and enjoyment of the
suit property having purchased the same vide
registered Sale Deed dated 5.4.1989;
b. It is further declared that the Sale Deed
dated 26.5.2004 executed by defendant No.1
in favour of defendant No.2 will not bind the
plaintiff or the suit property;
c. The defendants are restrained from
interfering with the plaintiff's peaceful
possession and enjoyment of the suit
property.
SD/-
(C.M. POONACHA)
JUDGE
BS/pmp/nd
