Asharam and Another vs Bhanwarlal

S.N. Modi, J.—This is a second appeal by the plaintiffs Asharam and Kishanlal in a suit for redemption. Both the courts below have dismissed the suit.

The relevant facts lie within a narrow compass and they are stated as follows. The property in suit was owned by plaintiff No. 1 Asharam. In Smt. year 2005 he borrowed a sum of Rs,300/- from the defendant-respondent & executed a usufructuary mortgage of the suit property in security thereof. Subsequently, by a deed dated 9-5-49 the suit property was sold by Asharam to plaintiff No. 2 Kishan''al. On 21-8-64 the plaintiff-appellants brought a suit for redemption of the mortgage alleging that the defendant had declined to redeem the mortgage. The defendant-respondent resisted the suit and alleged that subsequent to the mortgage, by agreement dated 18-6-43 (Jeth Sudi 12, smt. ypar 2004), plaintiff No. 1, Asharam agreed to sell the said property to him for Rs. 850/-, and after adjusting the mortgage amount of Rs. 300/- he (defendant) received Rs. 550/- in cash from him (plaintiff No. 1) Both the courts below have held that the agreement dated 18-6-48 entitled the defendant to the benefit of doctrine of part performance and dismissed the suit. Hence this appeal.

Mr. A.L. Mehta, the learned advocate for the appellants, urges that the courts below have over-ruled the proviso to Section 53A of the Transfer of Property Act which reads as under:

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

It is alleged that mere proof of fact that on account of the agreement to sell, the character of the defendant''s possession changed from that of a mortgagee to that of a plaintiff was not sufficient to attract the doctrine of part performance contained in Section 53A of the Transfer of Property Act. In order to disentitle the plaintiffs to the relief of redemption it was further necessary for the defendant to prove that the subsequent transferee, namely, plaintiff No. 2 had notice of the agreement dated 18-6-48. It is urged that since the defendant failed to discharge the burden, the courts below committed a gross error in dismissing the plaintiff''s suit, Mr. A.L. Mehta in support of his above contention has placed reliance on Malla Sasirekhamma Vs. Garbham Suramma, & Smt. Prova Rani Adhikari Vs. Smt. Lalit Mohini Mitra,

I have heard learned Counsel for the parties and, in my opinion, there is no substance in the above contention. The cases cited by Mr. A.L. Mehta do not help him. In none of the cases cited by him it was specifically laid down that the burden of proving that the subsequent transferee had notice of the prior contract lay on the defendant. Apart from that, it appears that the attention of the learned Judges who decided those cases was not invited to the provision of Section 3 of the Transfer of Property Act. Section 3 of the said Act defines the expression "a person is said to have notice". This definition reads as under:

A person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful absentation from an inquiry or search which he ought to have made or gross negligence, he would have known it.

Explanations II and III to the above definition run as under:

Explanation II--Any person acquiring any immovable property or any interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.

Explanation III--A person shall be deemed to have bad notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material.

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.

The Transfer of Property Act thus contemplates three kinds of notices, namely, (1) actual notice, (2) constructive or implied notice (that is, when, but for wilful absentation from an inquiry or search which he ought to have made, or '' gross negligence, he would have known it) and (3) notice to agent. In the present case, the subsequent transferee, plaintiff No. 2, must be taken to have implied notice of the agreement dated 18-6-48 and of the part performance thereof because he would have had actual notice as to the title of the defendant but for his wilful absentation from an enquiry at the time of purchasing the property which was admittedly in possession of the defendant. Title includes the right arising out of the part performance. Under the proviso to Section 53A of the Transfer of Property Art, the plaintiff Kishanlal therefore, cannot be heard to deny notice of the title of the defendant under which the latter held the property. He will be deemed to have notice unless otherwise proved as to the title of the defendant. No other point was pressed before me.

The appeal fails and it is dismissed with costs.