Ammani vs Jagannatha Reddi and Others

Oldfield, J.—The 4th defendant, the appellant, relied on an oral sale on the 4th May 1901, the date of her unregistered document, Exhibit I,

executed by the 1st defendant; the plaintiff on a registered sale-deed, Exhibit A, executed on the 5th May 1908 by the 1st and 2nd defendants.

The question is whether on the latter date the plaintiff''s vendors had any title to convey; and the answer to it depends u/s 54 of the Transfer of

Property Act on whether the 4th defendant''s oral sale included a delivery of the property sold, that is, whether the 1st defendant placed the 4th

defendant in possession.

The 4th defendant relied primarily on an alleged delivery to her of the property at the Monigar''s house at the time of the execution of Exhibit I

and her alleged enjoyment from that date. The learned District Judge has found some difficulty in applying the authorities he cited to these

allegations. But their result seems to us plain, that proof of a formal delivery of the property by the seller is unnecessary, if there is proof that

possession passed to the buyer and that it did so with the assent, express or implied, of the seller and in connection with and to give effect to the

contract of sale.

In this case the 4th defendant relied on the delivery to her in the Monigar''s house at the execution of Exhibit I and on enjoyment from its date or,

in the alternative, on enjoyment from some later date as given in connection with the sale. Our attention has been called to the District Judge''s

observation that there is really no evidence that the 4th defendant obtained possession on the date of Exhibit I. But, as he also set out fully the

evidence as to what happened in the Monigar''s house and as to enjoyment, we understand him to mean only that there was no evidence of value.

His conclusion on the former point is not stated distinctly. But it is clear from the tenor of his judgment that he concurred in the District Munsif''s

decision that the delivery in the Monigar''s house (whatever its effect) and enjoyment from the date of Exhibit I were not proved.

The first point for decision is then, whether the 4th defendant was placed in possession at any later date before the 5th May 1908. The learned

District Judge, no doubt, referred at the end of his judgment to her failure to prove that the land was delivered to her. But he had already referred

to the ample evidence on the plaintiff''s side that she had been in possession for only three or four years prior to November 1910"" and, as the

plaintiff admitted the 4th defendant''s possession, this must be taken as expressing his conclusion. His judgment is dated the 8th August 1911, and

there is, therefore, no finding on the essential point, whether possession was obtained by the 4th defendant before or after Exhibit A. If she did not

prove that it was so obtained, she must fail. If she did prove this, it will be necessary for the District Judge to decide in the light of the foregoing

whether the transfer of possession to her fulfilled the other requisites above referred to.

We accordingly call for findings on the following issues:

(1) Is it proved that the 4th defendant obtained possession before the 5th May 1908?

(2) If she did so, did she do so with the assent, express or implied, of the 1st defendant, and in connection with, and to give effect to, the contract

of sale between them?

On the first of these issues no fresh evidence is necessary since the question was tried fully in the Court of first instance.

We have been asked in Civil Miscellaneous Petition No. 2458 of 1913 to admit in evidence here or to direct the admission by the District Court

at the remand hearing of a document tendered there but not admitted at the hearing of the appeal. There is nothing before us to explain the 4th

defendant''s failure to make this document evidence at the trial in the Court of first instance. The only affidavit is one by the clerk of the 4th

defendant''s Vakil to the effect that the document was tendered in the District Court; but there is nothing as to the clerk''s means of knowledge. In

the circumstances the document cannot be admitted, and Civil Miscellaneous Petition No. 2458 of 1913 must be dismissed with costs.

It is not clear that the point raised by the second issue remanded has been considered by either Court. On it any fresh evidence, which may be

adduced, should be taken and considered.

The findings should be submitted within six weeks from the date of. this order and ten days will be allowed for filing objections.

Tvabji, J.

I agree.

In compliance with the above order of this Court, the District Judge of South Arcot submitted the following

Findings--* * * *

My finding on the 1st issue remanded is that the 4th defendant did obtain possession of the southern half of the field, i.e., the suit land, and was

in possession of it at least from 1902, the date of the earliest katchat, Exhibit III, that she was probably in possession prior to that date and that she

probably got into possession shortly after the execution of Exhibit I.

With regard to the 2nd issue, I see no reason for not accepting the 4th defendant''s evidence that she took possession shortly after the

execution of Exhibit I with the express consent of 1st and 2nd defendants given at the time when Exhibit 1 was executed; but if it is held that it is

open to me to record such a finding, on the ground that the general tenor of my predecessor''s judgment shows that he found that permission to

occupy the suit land was not given at the time when Exhibit I was executed, then my finding on the 2nd issue remanded is that it must be presumed

that the 4th defendant got into possession of the suit land about 1902, if not earlier, with the implied consent of both the 1st and 2nd defendants as

their vendee, in the absence of any explanation on behalf of her vendors, on whose evidence the plaintiff relies, as to how she got into possession

except as their vendee.

In the result my findings on both the issues remanded are in 4th defendant''s favour.

This second appeal coming on for hearing on the 30th April 1914 after the receipt of the findings called for by order of this Court dated 4th

November 1913 and having stood over for consideration till the 27th July 1914, the Court delivered the following.

JUDGMENT

Oldfield, J.

The learned District Judge''s findings on the issue remanded are in 4th defendant''s favour. It is now, however, argued that they do not entitle

her to a decree, unless it is proved that plaintiff, claiming under a registered document, had notice of the prior unregistered conveyance to her. The

question of notice was not raised at the last hearing of the appeal, and, therefore, no issue regarding it was remanded. But in the circumstances of

the case and in view of the course of pleading we think that plaintiff should be permitted to raise it. Krishnamma v. Suranna 3 M.L.J. 54 is

authority in favour of plaintiff''s contention and in spite of the considerations referred to in the judgment which my learned brother is about to

deliver, is binding on us. The question of fact involved has not been considered by either of the lower Courts, and we must, therefore, remand the

following issue for a finding:

Whether at the date of Exhibit A, the plaintiff had notice of the transfer to the 4th defendant by Exhibit I.

Fresh evidence may be taken. The finding should be submitted within six weeks and seven days will be allowed for filing objections.

Tyabji, J.

The plaintiff and 4th defendant are rival claimants to a piece of land, which is ""of a value less than Rs. 100."" On the 4th of May 1901, the 4th

defendant purchased the land from its last admitted owners and was according to the finding, which we accept, put into possession of it. The sale-

deed evidencing this transaction is unregistered (Exhibit I). Seven years after, on 5th May 1908 the plaintiff became the ostensible purchaser of the

same land by a registered instrument, Exhibit A.

The plaintiff relies upon Section 50 of the Indian Registration Act to oust the 4th defendant.

Section 50 of the Registration Act, omitting the portions that are not material and incorporating in it Section 18, Clause (a), to which it refers,

runs as follows:

Every document...which purports or operates to create...any right title or interest...of a value less than Rs. 100 to or in Immovable property (in this

case Exhibit A.)...shall, if duly registered, take effect as regards the property comprised therein against every unregistered document (in this case

Exhibit I) relating to the same property, and not being a decree or order, whether such unregistered document he of the same nature as the

registered document or not.

The 4th defendant resists the plaintiff''s claim on the strength of. the following paragraph of Section 54 of the Transfer of Property Act:

In the case of tangible Immovable property of a value less than one hundered rupees, such transfer (i.e., a sale) may be made by delivery of the

property.

The interpretation of these sections of the law is settled by a long series of decisions. In Bimaraz v. Papaya 3 M. 46 decided prior to the

passing of the Transfer of Property Act, it was pointed out that Section 48 of the Registration Act prevents an oral agreement or declaration

(followed by possession) from being postponed in effect to a registered document. So that an oral sale followed by delivery of possession is not

defeated by a subsequent sale through a registered document. But Section 48 of the Registration Act does not (so it was held) similarly save the

operation of a sale made not orally but by an unregistered document. The startling result is referred to in the decision: an unregistered written

instrument not requiring registration, followed by possession, has less effect than an oral declaration or agreement so followed.

This result is the more startling because (as it is said in the case cited) a written instrument is but an oral declaration committed to writing.

Hence where there is a written instrument followed by delivery of possession, ex hypothesi, there are three stages: (1) the oral declaration (2), the

written instrument and (3) delivery of possession. But the Court apparently proceeded on the basis that the existence of the second stage prevents

its being said that there is an oral declaration followed by delivery of possession within the terms of Section 48 of the Indian Registration Act.

That decision was pronounced in 1881. The next year the Transfer of Property Act was passed, The effect of the two Acts was considered in

a very elaborate manner by a Full Bench of Calcutta in Narain Chunder Chuckerbutty v. Dataram Roy 10 C.L.R. 241 and of Madras in

Krishnamma v. Suranna 16 M.K 148. In these cases it was argued in effect that assuming that the interpretation of the Registration Act, Section

50, demanded the startling result which was referred to in Bimaraz v. Papaya 3 M. 46 that difficulty was removed by the Transfer of Property Act

Section 54, inasmuch as Section 54 does not refer either to an oral declaration or to an unregistered document, but provides for a transfer of

property by delivery of possession alone without referring to the consideration whether immediately prior to the delivery of possession there was

merely oral agreement or a documentary instrument. In other words, accepting the interpretation put in Bimaraz v. Papaya 3 M.K 46 upon

Sections 48 and 50 of the Registration Act, it was argued that the Legislature had by Section 54 of the Transfer of Property Act provided that an

unregistered instrument followed by delivery shall not have less effect than an oral declaration so followed. This argument was supported on the

ground that the Transfer of Property Act completes the transfer by delivery alone, that after the ownership of any property is vested in one person,

another person cannot without the consent of the then owner transfer its ownership to a third: and that in this way the provisions of Section 54 of

the Transfer of Property Act protected a person with an unregistered written instrument to whom the property-had been delivered no less

effectively than Section 43 of the Registration Act protected one to whom the properties were orally transferred. See Mr. Justice Prinsep''s

dissenting judgment in Narain Chunder Chuckerbutty v. Dataram Roy 10 C.L.R. 241 and Krishnamma v. Suranna 3 M.L.J. 54. This argument,

however, has not found acceptance. It has been held that the title given by Section 54 of the Transfer of Property Act to an unregistered holder is

liable to be defeated under the rule of priority by a valid later sale or mortgage evidenced by a duly registered document. See Krishnamma v.

Suranna 3 M.L.J. 54. On the other hand, it was also held that if the subsequent transferee with a registered deed has notice of the existing

unregistered transfer, then the registered deed gives its holder no priority. Fuzludeen Khan v. Fakir Mahomed Khan 4 C.L.R. 257; Narain

Chunder Chuckerbutty v. Dataram Pay 10 C.L.R. 241; Bimaraz v. Papaya 3 M.K 46; Khiali Ram v. Himmata 5 A.L.J. 607.

The rules of law as propounded in the decisions above referred to may be stated in the following terms:

In the case of Immovable property of a less value than Rs. 100 (1) an oral transfer (without any document) followed by delivery of possession

confers upon the transferee an indefeasible title to the interest transferred Section 48 of, Registration Act, Bimaraz v. Papaya 3 M. K46;

Krishnamma v. Suranna 3 M.L.J. 54.

(2) A sale or mortgage evidenced by a written but unregistered instrument, if followed by delivery of the property, transfers the ownership of or an

interest in the property, but the title or interest so created is liable to be defeated, by the vendor subsequently selling or mortgaging the same

property by a registered instrument Section 50 of the Registration Act, Bimaraz v. Papaya 3 M.K 46 Krishnamma v. Suranna 3 M.L.J. 54.

(3) The right of the unregistered transferee is not defeated by a registered transferee who had notice of the prior unregistered transfer. Krishnamma

v. Suranna 3 M.L.J. 54 Fuzuldeen Khan v. Fakir Mahomed Khan 4 C.L.R. 257.

Though the law seems now to be settled by the decisions after so much doubt and difference of opinion, I cannot help joining in the desire

expressed by more than one of the learned Judges who have had to interpret Sections 48 and 00 of the Registration Act and Section 54 of the

Transfer of Property Act that the Legislature should make the law explicit so as to make it not only free from doubt, but also easy of reference. It

may be assumed that the interpretation put upon the Acts by the Judges whose opinion has prevailed has been accepted by the Legislature, in spite

of the anomaly referred to in Bimaraz v. Papaya 3 M.K 46 and by Prinsep, J., in Narain Chunder Chuckerbutty v. Dataram Roy 10 C.L.R. 241

and the hardship caused by interpreting Section 54 of the Transfer of Property Act in such a way that though ownership may be transferred to the

vendee under the section, yet the title of the transferee is so precarious as to depend upon the honesty or vigilance of an entire stranger, and of a

person who has no interest left in the property transferred. But in any case it is not satisfactory that the rules of law relating to transfer of property

should have to be discovered by a laborious examination of decisions. If the title obtained by delivery of the property u/s 54 of the Transfer of

Property Act is subject to be defeated in the manner above referred to and that defeasance can itself be prevented by notice, it is surely laying a

trap for the unwary to leave these important provisions of the law unexpressed in the Act.

The law being as I understand it, the 4th defendant''s title to the property depends upon the question whether the plaintiff had notice of the sale

to the 4th defendant prior to Exhibit A on which the plaintiff relies.

There is no finding on this question. It is true that the District Judge refers to the fact that ""the 1st defendant as P.W. No. 4 says that the plaintiff

knew of his having executed the sale-deed, Exhibit 1, to 4th defendant and of his alleged subsequent refusal to sell the land to her."" This fact and

the fact that the 4th defendant has been found to have been an possession may furnish evidence of notice (as pointed out in the cases to which I

have referred), but as the rights of the parties depend entirely on this issue, it will be desirable to have it considered after the parties have had an

opportunity of adducing evidence on it. I, therefore, agree in the order proposed by my, learned brother.

In compliance with the above order of remand, the District Judge of South Arcot submitted the following

Finding.

I am asked to submit a finding on the following issue:

Whether at the date of Exhibit A, the plaintiff had notice of the transfer to the 4th defendant by Exhibit I.

* * * * *

I find on the evidence of D.W. No. 4 and D.W. No. 5 as well as on the evidence of plaintiff''s own witness P.W. No. 4 coupled with the fact

that plaintiff was the owner of the land just south of the suit land and must have known of 4th defendant''s possession of the suit land for many

years prior to Exhibit A, that the plaintiff had notice of the transfer to 4th defendant by Exhibit I prior to the date of Exhibit A.

This second appeal coming on for final hearing after the return of the finding of the lower Appellate Court called for by order of this Court

dated 27th July 1914, the Court delivered the following

JUDGMENT

We accept the lower Appellate Court''s finding; 4th defendant''s appeal is allowed; the suit as against her is dismissed with costs throughout.

Her costs will be recovered from the plaintiff and defendants Nos. 1, 2 and 3. The plaintiff has throughout claimed in the alternative possession or a

refund of half the purchase-money paid by him from defendants Nos. 1, 2 and 3. Defendants Nos. 1, 2 and 3 have not opposed this claim. The

plaintiff must, therefore, be given a decree for Rs. 43 with interest at 6 per cent, from 6th May 1908 to date of realisation. Defendants Nos. 1, 2

and. 3 will pay the plaintiff''s costs throughout.