Smt. Shobha Devi Sarada, vs Smt. Kokutla Jayalakshmi
2023 Latest Caselaw 2938 Tel

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                                                                  PSS, J.
                                                            S.A.No.263 of 2004



        HONOURABLE SMT. JUSTICE P. SREE SUDHA

                  SECOND APPEAL No.263 OF 2004

JUDGMENT:

The present appeal has been filed against the judgment and

decree dated 31.12.2003 passed in A.S.No.38 of 2002 on the file of

VI Additional District & Sessions Judge (Fast Track Court), Nizambad

reversing the Judgment and decree dated 09.09.2002 in O.S.No.108 of

2001 on the file of Principal Junior Civil Judge, Nizambad, which was

filed for recovery of Suit claim of Rs.1,00,000/- with interest. The trial

Court after considering the oral and documentary evidence on both

sides, decreed the suit with costs for Rs.1,00,000/- in favour of

appellant/plaintiff with interest @ 6% per annum from the date of

suit, till the date of realisation.

2. Aggrieved by the Judgment and decree in O.S.No.108 of 2001

dated 09.09.2002, the defendant in the suit preferred an appeal in

A.S.No.38 of 2002 on the file of VI Additional District & Sessions

Judge (Fast Track Court), Nizambad and the same was allowed on

31.12.2003 by setting aside the Judgment and decree dated

09.09.2002 in O.S.No.108 of 2001 on the file of Principal Junior Civil

Judge, Nizambad. Aggrieved by the Judgment and decree dated

31.12.2003 in A.S.No.38 of 2002 on the file of VI Additional District &

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S.A.No.263 of 2004

Sessions Judge (Fast Track Court), Nizambad the plaintiff in the Suit

filed the present Second Appeal with the following substantive

questions of law:

a Whether the Lower Appellate Court is justified in allowing the Appeal when the law is well settled that the effect of a covenant for title is not to be get rid off except by the vendor indicating to the purchaser by use of clear and unambiguous expressions in the deed he did not mean to guarantee that he had a good title to the property and was entitled to convey the same and the Lower Appellate Court ought to have seen that the respondent/defendant did not indicate to the plaintiff/appellant in Ex.A2 that she did not guarantee that she had a good title to the property she sold to the appellant herein?

b Whether the Lower Appellate Court is justified in allowing the Appeal when under Section 55 (2) of Transfer of Property Act every sale for consideration carries with it a covenant for implied title and as the land agreed to be purchased by the appellant is meant for parks in the Master Plan of Nizambad Town, the respondent/defendant had no title to it?

c Whether the Lower Appellate Court is justified in allowing the Appeal when it is a case of clear dis-representation amounting to fraud on the part of the respondent/defendant and there is neither equity nor any other principle in allowing the respondent/defendant to get away with the fraud?

d Whether the Lower Appellate Court is justified in allowing the Appeal when Section 55 of Transfer of Property Act has no application to a case where vendor has no title whatsoever to the property sold and the respondent/defendant had no title to the property sold to the appellant herein?

e Whether the Lower Appellate Court is justified in allowing the Appeal when the respondent/defendant had defective/no title to the property sold to the appellant/plaintiff herein and the Appellant could not have detected the same?

PSS, J.

S.A.No.263 of 2004

3. The parties herein are referred as plaintiff and defendant as

arrayed in the trial Court for the sake of convenience.

4. As seen from the record, plaintiff in the suit entered into an

Agreement of Sale with the defendant on 31.01.2001 for purchase of

agricultural land in Survey No.3202/AA, measuring an extent of 23

guntas, situated at Nizambad sivar, near Sai Brindavan Colony,

Gurbabadi, Nizambad for a total sale consideration of Rs.8,42,000/-

and paid Rs.1,00,000/- as advance on the same day and agreed to pay

an amount of Rs.4,00,000/- on 08.02.2001 and the remaining sale

consideration on or before 28.02.2001. After payment of Rs.1,00,000/,

when the plaintiff enquired about the title of the defendant over the

suit property, she was informed that the suit property was effected by

Master Plan of Nizambad Town earmarked for the purpose of public

park. Later, plaintiff approached the defendant on 07.02.2001 and

informed the said fact. As the title of the defendant was not clear and

the land has been effected by Master plan, she has no intention to

purchase the land. Accordingly, she has not made payment of

Rs.4,00,000/- to the defendant. The defendant also admitted the same

and apologized for not mentioning the said fact at the time of

Agreement of Sale and promised for repayment of Rs.1,00,000/- but

PSS, J.

S.A.No.263 of 2004

failed to do so, as such plaintiff issued legal notice on 12.02.2001 to

the defendant to cancel the agreement of sale dated 31.01.2001 and

the defendant got issued reply notice on 16.02.2001 and failed to

repay the said amount and thus plaintiff filed a Suit for recovery of

Rs.1,00,000/-.

5. The defendant filed the written statement stating that plaintiff

has already verified her title in the Revenue records and in the

Municipal Office and after satisfying with title, she paid Rs.1,00,000/-,

but when the plaintiff has to pay Rs.4,00,000/- on 08.02.2001, she

came with a plea that title is not clear. Plaintiff agreed to purchase the

land for agricultural purpose, but not as urban property for house

sites. The defendant was not aware that the suit property was covered

by Master Plan or not. The Suit land was free from all encumbrances

and there was no defect in title and nobody knows when the Master

Plan will be implemented. Plaintiff has not verified the title on

06.02.2001 and not approached the defendant on 07.02.2001 and she

was not entitled to cancel the agreement of sale unilaterally. The

plaintiff has to file a separate suit for cancellation of agreement of sale

by paying required Court Fee on Rs.8,48,000/- and thus, the Suit

itself is not maintainable and the Court has no jurisdiction to

entertain the Suit.

PSS, J.

S.A.No.263 of 2004

6. Plaintiff executed General Power of Attorney in favour of her

husband. So also defendant executed General Power of Attorney in

favour of her husband. The trial Court examined P.Ws.1 & 2 and

marked Exs.A1 to A6 on behalf of the plaintiff. D.Ws.1 & 2 were

examined on behalf of the defendant, but no document was marked on

her behalf.

7. There is no dispute regarding the fact that agreement of sale was

entered between the parties on 31.01.2001 and defendant agreed to

sell the property for total sale consideration of Rs.8,42,000/- and paid

Rs.1,00,000/- as advance on the same day and agreed to pay the

balance amount in two (2) instalments i.e., on 08.02.2001 and on

28.02.2001. The plaintiff contended that after payment of the advance

amount, she enquired in the office of Municipal Council, Nizambad

and came to know that land was covered by Master Plan earmarked

for the purpose of public park, as such she requested the defendant

for return of advance amount of Rs.1,00,000/-, but the defendant

contended that there is no defect in the title. The plaintiff ought to

have verified about the title much prior to the agreement of sale and

thus, now she is not entitled to cancel the agreement of sale

unilaterally. Defendant contended that she has to file a Suit for

cancellation of agreement of sale before claiming the refund of

PSS, J.

S.A.No.263 of 2004

Rs.1,00,000/-, but the trial Court relied upon the citation held

between Champalal and another Vs. Roopa and others; AIR 1963

Rajastan 8, in which, it was held that

"...Where a seller is guilty of a failure to disclose a material defect in the property sold by him to the buyer and the former is aware of such defect and the latter is not or of which defect the latter could not be aware with ordinary care, then such an omission or failure on the part of the seller must be held to be fraudulent and where in such a case the buyer stands deprived of the possession of the property sold to him, then it is open to him to bring a suit against the seller for return of the purchase money which the buyer has paid to the seller, and it further seems to me that he may also claim interest by way of damages on such purchase money. This remedy is in dependent of a suit for rescission of the sale-deed;..."

8. Town Planning Officer was examined as PW2 and he stated that

suit schedule land was earmarked for park in the Master Plan. Once

the land is earmarked for the park, Municipal Council will not grant

permission unless a separate permission is obtained from the

Government through Municipal Council for change of use. Such

permission for change of use is granted by the Government on the

recommendation of the Municipal Council and the Director, Town &

Country Planning, only on verification of the documents of the owner.

Unless such change of use is obtained from the Government,

permission will not be granted for layout of house-sites. He further

stated that the Suit Schedule Property was partly earmarked for park

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S.A.No.263 of 2004

in the Master Plan. Unless a Sub-Division is made by bifurcating the

subject land, he cannot say to what extent the subject land comes

under the Master Plan. He further submitted that defendant has not

submitted any application for change of use of the Suit land.

9. Plaintiff contended that she purchased the suit land for the

purpose of construction of the house, but it was clearly mentioned in

the agreement of sale that the suit land was the agricultural land. The

defendant stated that the purpose of the purchase was never

mentioned by the plaintiff. The Suit land was sold by her to the

plaintiff only for agricultural purpose. She did not know about the

Master Plan, as such she has not informed the same to the plaintiff.

Therefore it cannot be said as a defect of title. Plaintiff to avoid the

balance amount on 08.02.2001, got issued legal notice under Ex.A4

on 12.02.2001 and defendant also issued reply under Ex.A5 dated

16.02.2001.

10. The learned counsel for the defendant mainly contended that

Rs.1,00,000/- is to be forfeited, as plaintiff was failed to pay the

balance within the time, but the clause of forfeiture was not

mentioned in the agreement of sale.

PSS, J.

S.A.No.263 of 2004

11. The main issue before this Court is whether the plaintiff is

entitled for refund of Rs.1,00,000/- in view of cancellation of the sale

deed as the suit schedule property was covered in the Master Plan of

Municipal Council. If at all plaintiff knows about the defect of the suit

schedule property, she ought not to have entered into agreement of

sale with the defendant and will not pay Rs.1,00,000/- on the date of

agreement. Therefore the argument of the defendant counsel that

plaintiff was aware of the same cannot be accepted. As the plaintiff

intended to purchase the property paid Rs.1,00,000/- on the date of

agreement i.e., 31.06.2001, but on enquiry in the Municipal Office

regarding the title of the land on 06.02.2001, she came to know about

the Master Plan and took the copy of the same. Later, she approached

the defendant and informed the same and defendant also obliged and

agreed to return the advance amount of Rs.1,00,000/-. Whereas

defendant stated that she never met her and never promised her to

return the same and Clause V of the agreement of sale reads as

follows:

The Vendor hereby covenants with the purchaser that in future if due defect in its right or title, the purchaser are put to any loss or suffer any damage or loose possession of the agricultural lands or any damage so sustained by the purchaser at its own costs.

PSS, J.

S.A.No.263 of 2004

Whether the defendant knows about the earmarking of land in the

Master Plan or not is not known. As per the evidence of PW2 the Suit

schedule property was partly included in the Master Plan and he

cannot say the extent unless it is Sub-Divided by way of bifurcation.

12. Plaintiff stated that she intended to purchase the land for house

construction and later she came to know that it was included in the

Master Plan and the same was allotted for the purpose of park, as

such she decided not to purchase the suit schedule property.

Accordingly, she issued legal notice on 12.02.2001, in which she

stated regarding the purchase of suit schedule property. Immediately

after receiving the legal notice, defendant ought to have returned

Rs.1,00,000/- earnest money, but in her reply notice she stated that

she forfeited the said amount and also stated that she was ready and

willing to receive the balance sale consideration and to execute the

registered sale deed, as such plaintiff was constrained to file suit for

recovery of amount.

13. The purpose of purchase of the land need not to be mentioned in

the agreement of sale, as there is no dispute regarding the payment of

Rs.1,00,000/- by the plaintiff to the defendant. This Court finds that

the Judgment of the trial Court in granting amount with interest @ 6%

per annum from the date of the Suit till the date of realisation is just

PSS, J.

S.A.No.263 of 2004

and proper, but the first appellate Court erred in dismissing the same.

Therefore, this Court finds that it is just and reasonable to set aside

the Judgment of the first Appellate Court, confirming the Judgment

and decree dated 09.09.2002 in O.S.No.108 of 2001 passed by the

learned Principal Junior Civil Judge, Nizambad.

14. In the result, the Second Appeal is allowed by setting aside the

Judgment and decree dated 31.12.2003 in A.S.No.38 of 2002 passed

by the first appellate Court and confirmed the Judgment and decree

dated 09.09.2002 in O.S.No.108 of 2001 passed by the learned

Principal Junior Civil Judge, Nizambad. There shall be no order as to

costs.

As a sequel, miscellaneous applications pending, if any, shall

stand closed.

____________________________ JUSTICE P. SREE SUDHA

Dt.06-10-2023.

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PSS, J.

S.A.No.263 of 2004

HONOURABLE SMT. JUSTICE P. SREE SUDHA

SECOND APPEAL No.263 OF 2004

Dt.06.10.2023

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