Damodaran and others vs Sekharan and others

John Mathew, J.—Defendants 1 to 11 in O. S No, 273/8-1. Sub Court, Kozhikode are the appellants. This suit was originally filed at O. S. No. 191/78 before the Munsiff Court, Kozhikode as one for redemption and recovery of possession. The defendants contended that there was only an agreement to mortgage and so the suit for redemption was not maintainable. Thereupon the plaint was amended as one for recovery of possession. When the valuation was accordingly amended, the valuation exceeded the pecuniary jurisdiction of the Munsiff Court Accordingly the plaint was returned to the plaintiff, who presented it before the Sub Court That court granted a decree for recovery of possession of the plaint schedule properties That decree was confirmed by a learned Judge of this Court in A S. No 355/88 This appeal is directed against the said judgment. The plaintiff executed Ext. A18 (which is same as Ext. B12) agreement dated 19-7-1968 in favour of the 1st defendant and others agreeing to execute a usufructuary mortgage to respect of the plaint schedule property for a consideration of Rs. 2000/- in favour of the 1st defendant for six years and a simple mortgage to favour of the 2nd defendant, who is the wife of the 1st defendant for a consideration of Rs. 8000/- for a term of three years. On the date of Ext A18 plaintiff received Rs. 2700/-. The balance amount of Rs. 7300/- was to be paid within two monies of the agreement. The plaint schedule properties were put in the possession of the 1st defendant on the date of agreement Itself.

Defendants 3 to 11 are the children of defendants 1 and 2. Defendants 12 and 13 are the tenants in a shop building in the plaint schedule properties. Defendants 1 to 11 are residing in the building in the plaint schedule property. According to the plaintiff, he had not received the full amount mentioned in the agreement. However, to avoid unnecessary disputes be it conceding the receipt of the amount. Defendants are not entitled to retain possession of the properties. Accordingly the suit was filed for recovery of possession and for other reliefs.

Defendants 1 to 11 filed a joint written statement. According to them, in addition to Rs. 2,000/- paid by the 1st defendant, there is a total payment of Rs. 11,700.26 to the plaintiff. The defendants have effected valuable improvements in the property. They are also entitled to the benefit of Section 53A of the Transfer of Property Act. It was further contended that in 197l there was an agreement for sale of the plaint schedule properties to the defendants for a total consideration of Rs. 15,000/-. The defendants are prepared to pay the balance amount The plaintiff is not entitled to a decree for recovery of possession. In case recovery is ordered, the defendants are entitled to value of improvements as well as the amounts they have paid.

Plaintiff was examined as PW.1. The 3rd defendant was examined as DW.1. Plaintiff produced Exts. A1 to A28. Defendants produced Ext. B1 to B14, Exts C1 to C3 are the Commissioner''s reports and plan.

The trial court passed a decree In favour of the plaintiff for recovery of possession of the plaint schedule properties on deposit of Rs. 11,700,26. Means profits at the rate of Rs. 1,076/- per annum from the date of deposit was also allowed. The prayer of the defendants for a decree of specific performance was disallowed. In appeal a learned Judge of this Court confirmed the judgment and decree of the trial court. The points that arise in this appeal are the following: (i) Whether the defendants are entitled to the benefit of Section 53A of the Transfer of Property Act ? If so, what is the extent of that right ? (ii) are the defendants entitled to value of improvements ?

To claim the benefits u/s 53A of the Transfer of Property Act, the defendants will hove to satisfy the following conditions. (1) That the plaintiff has contracted to transfer for consideration any Immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. (2) That the transferee has. in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession continues in possession in part performance of the contract. (3) That the transferee has done some act in furtherance of the contract; and (4) That the transferee has performed or is willing to perform his part of the contract (See Nathulal v. Phoolchand. AIR 1970 SC 546) Regarding condition''s 1, 2, and 3, there is no substantial disagreement between the parties. By Ext A18(Ext. B12) agreement dated 19-7-1968 the plaintiff agreed to execute a mortgage as stated therein. The terms of the agreement are clear from the document itself. It is not disputed that possession of the property was given to the defendants. It is admitted that an amount of Rs. 2,000/- was paid on the date of agreement. According to the plaintiff, in order to avoid further controversies he is admitting payment of the entire consideration mentioned in the document. Regarding condition No. 4 as to whether the defendant has performed or is willing to perform his part of the contract, the plaintiff''s stand is that although he had not received the amount as per the agreement In order to avoid unnecessary dispute he is conceding the receipt of the amount. In Ext. A19 notice sent on behalf of the defendants the demand was for return of the amount or to give some documents In witness of the payment. This would throw some doubt about the readiness and willingness on the part of the defendants to perform their part of the contract. In Ext. A 19 there was no demand to execute the mortgage deed. The contention on behalf of the plaintiff is that there was no specific pleading by the defendants about their readiness and willingness to perform their part of the contract. However, in paragraph 10 of the written statement it was contended that defendants have already performed their part of the contract and therefore, there was no necessity to plead that they were ready and willing to perform their part of the contract. Therefore, according to the learned counsel for the defendants the 4th condition to claim the benefits u/s 53A of the T. P. Act is also satisfied.

The plaint proceeded on the basis Chat the defendants were enjoying the property after the agreement, on which date an amount of Rs. 2,000/-was paid to the plaintiff. In the plaint there was no admission regarding any other payment towards the consideration mentioned in Ext A18. However, as P.W.I the plaintiff admitted the payments mentioned in Ext B1 receipt dated 26-11-1968. In Ext. B1 it was stated that the plaintiff received from the 1st defendant in several installments an amount of Rs. 7,450/- for discharging his debts. That receipt also mentions that the accounts for repairing the house was handed over to the plaintiff and that after verification the plaintiff will send a letter regarding that amount. Although in Ext. B no specific date regarding the payments was mentioned, the plaintiff old not set up any case that the payments were made beyond the two months stipulated in Ext. A18. So much so, the contention of learned counsel for the defendants is that the defendant was not bound to prove the exact dates of payments or that the payments were made within two months of Ext. A18, especially because there was an averment in the written statement that the defendant performed their part of the contract. Even when the plaintiff admitted payment of consideration, which according to him was in order to avoid unnecessary disputes, he did not contend that the payments were beyond the period fixed in Ext. A18 Under the circumstances of this case we are inclined to accept the contention of the learned counsel for the defendants that the fourth condition to claim benefits u/s 53A of the Transfer of Property Act s also satisfied.

However, this will not affect the final decision of the learned Judge. According to us, even in case it is taken that the defendants paid the amounts within time, the defendants are not entitled to any relief u/s 53A of the T. P Act. Under Ext. A18. the plaintiff agreed to execute a usufructuary mortgage of the plaint schedule property in favour of the 1st defendant for six years for a consideration of Rs. 2, 000/- and also simple mortgage in favour of the 2nd defendant for three years for a consideration of Rs. 8,000/-. The date of that agreement was 19-7-1968. Admittedly the defendants were given possession of the property. They have already enjoyed the property for more than the period mentioned in the agreement. Even in case mortgage was executed, now they are liable to surrender the property to the plaintiff after setting the accounts. They will not get any right under the agreement tatter than what right they could have obtained if the mortgage itself was executed. What Section 53A provides is that if the conditions mentioned in Section 53A of the T. P. Act exists, the transferor shall be debarred from enforcing against the transferee any right other than a right expressly provided by the terms of the contract. Therefore, if the agreement was to grant a lease, the lessee could not resist the demand for rent. The lessees can enforce the terms of the contract and claim rent. (See Radha Charon Das v. Pravabathi Dassi - 1959 (63) CWN 535).

In this case the maximum right the defendants can have is only a mortgage right and that also for the period mentioned in the agreement. Merely because of the non-execution of the mortgage deed the defendants will not be entitled to get any additional right by virtue of Section 53A of the T. P. Act. The words ''other than a right expressly provided by the terms of the contract'' have to be understood in this context. In case the agreement was only to convey part of the right over the Immovable property, the defendants can by relying on Section 53A of the act claim only that part of the right and nothing more. Certainly in case the agreement was to convey full rights over the property, the defendants will be entitled to claim full rights by relying on Section 53A. (See Ram Pratap Kayan v. The National Petroleum Go. Ltd. AIR(37) 1950 Calcutta 23 and Muralidhar Kulthia v. Sm. Tara Dy - AIR 1953 Calcutta 349). In other words, in the case of an agreement to execute a mortgage for a definite period under which possession was handed over to the defendant, if the conditions of Section 53A of the T. P. Act are satisfied the, defendant will be entitled to get all the rights under the mortgage which was agreed to be executed. The claim of the defendants to continue In possession after the expiry of that period relying on Section 53A of the T. P. Act is not at all warranted by that provision. The general law of mortgages or the rights and liabilities of the mortgagor and mortgagee are not modified or abrogated by Section 53A of the T. P. Act. The maximum benefit that the defendant can claim is only that of a mortgagee for the period mentioned. in the agreement There is no necessity of a provision in the agreement for recovery on the expiry of the period. The right of recovery is governed by the law relating to mortgages. That this is the real scope of the section is clear from the following passage in the report of Law Commission of India chaired by Justice P. B. Gajendragadkar, former Chief Justice of India (Law Commission of India Seven thirty Report on The Transfer of Property Act, 1882 - Page 316 Para.49.8):

Ingredients-It will be useful to draw attention to the important ingredients of the section. We are deliberately stating them below in language which does not purport to adhere necessarily to the actual wording of the section -

(1) There should be a contract for the transfer of immovable property.

(2) The contract should be in writing signed by the party sought to be charged therewith and from it the terms should be ascertainable with reasonable certainty.

(3) The transferee should, in part performance of the contract,

(a) take possession, or

(b) continue in possession and do some act in furtherance of the contract.

(4) The transferee should perform, or be willing to perform, his part of the bargain as contained to the writing.

(5) The application of the doctrine should not affect the right of a transferee for consideration without notice of the contract or of the part performance thereof.

Subject to these conditions and reservations. The effect of the section is that notwithstanding that the transaction has not been completed according to law, all rights and liabilities under the contract should arise and be enforceable as between the parties to the contract and persons claiming under them-

(underlining ours)

Therefore, it has to be examined whether under the mortgage which was agreed to be executed, the defendants are entitled to resist the claim for surrender of possession of the property. If they are not entitled to continue in possession as per the terms of the mortgage, they are not entitled to continue is possession applying Section 53A of the Transfer of property Act. The Supreme Court has in Sardar Govindrao Mahadik and Another Vs. Devi Sahai and Others, held as follows:

31...The acts claimed to be in part performance must be unequivocally referable to the preexisting contract and the acts of part performance must unequivocally point in the direction of the existence of contract and evidencing implementation of performance of contract...Therefore, the correct view in India would be, look at that writing that is offered as a contract for transfer for consideration of any immovable property and then examine the acts said to have been done in furtherance or the contract and find out whether there is a real nexus between the contract and the acts pleaded as in part performance so that to refuse relief would be perpetuating the fraud of the party who after having taken advantage or benefit of the contract backs out and pleads non registration as defence, a defence analogous to S.4 of the Statute of Frauds.

(See also Ayyankunhi Anandiravan v. Krishnan Anandiravan & another-AIR (37) 1950 TC 81 and Bheema Reddi Jeedikanti Ram Reddi Vs. Salla Venkat Reddy,

In this case the defendants were in possession of the property for more than the period stipulated. They cannot have any grievance that by the non-execution of the mortgage deed, they were unable to continue in possession for the period stipulated in the agreement to execute the mortgage. We do not find anything against this view in the rulings cited by the learned counsel for the defendants viz, Mukandi Ram Sant Ram and others v, Executive Engineer, Sangrur Circle and others (AIR 1956 PEPSU 40) and Vidyacharan Shukla v Khubchand Baghel and others - (AIR 1964 SC 1099). We hold that the defendants cannot claim a right higher than what is provided in the ultimate document agreed to be executed, by invoking Section 53A of the T. P. Act. Therefore, we hold that the defendants are not entitled to defend their possession u/s 53A of the T. P. Act. We, therefore, confirm the finding of the trial court and that of the learned Judge, though on different grounds.

Point No. (ii) - Claim for value of improvements : In paragraph 16 of the written statement the defendants contended that apart from the mortgage amount they are entitled to value of improvements effected by them. According to the plaintiff, on the date of filing of the suit viz 26-5-1978 in the property there were no improvements of the defendants. Ext. A25 is a Commissioner''s report when the suit was pending before the Munsiff Court. The date of inspection was 28-5-1978. On I. A. 1586/78 the court passed an order of injunction on 25-7-1978 restraining the defendants from effecting improvements in the property. That order of Injunction was subsisting till 19-2-1981, on which date the Sub Court restricted the order as one against committing waste. A perusal of the evidence. In this case will show that all the improvements were made by the defendants after the order of injunction and in violation of the said order. Therefore, the contention on behalf of the plaintiff is that the defendants are not entitled to value of improvements.

In paragraph 5 of the written statement value of improvements Act was claimed under the Compensation for Tenants Improvements Act 29/1958. It was also contended that defendants had effected Improvements in the house in the property. u/s 2(d)(iii) of the said Act, a person who comes into possession into possession of land belonging to another person and makes improvements thereon in the bona fide belief that he is entitled to make such improvements, is a tenant u/s 4 tenant is entitled to compensation for improvements. Therefore, in order to claim value of improvements defendants will have to plead and prove that the improvements were effected in the bona fide belief that they were entitled to make such improvements. in paragraph 5 of the written statement the defendants referred to Ext. B1 letter dated 29-11-1968 to contend that they have made Improvements in the building worth Rs 7,450/-. It was also contended that the plaintiff had given permission to effect improvements and on that basis defendants had effected improvement in the property. There is no averment that the defendants effected improvements in the bona fide belief that they were entitled to make such improvements. In any view of the case, there is no evidence that the defendants effected any improvements in the bona fide belief that they were entitled to effect improvements. On the other hand, according to the 3rd defendants who was examined as D. W. 1 (Page 16), they are not claiming value of improvements as a tenant (kudiyan). According to him improvements were effected as per the consent to the plaintiff and at co-owner of the property. The improvements were effected from 1968 onwards. Defendants have not maintained any accounts for the expenditure in that connection. He also deposed that there is no evidence to prove the period during which the improvements were effected There is no specific pleading or evidence regarding the nature of value of improvements.

There is intrinsic evidence in the reports Ext. C1 and C2 that Improvements in the property were effected after the order of injunction. The Commissioner who filed Ext. C1 report inspected the property on 21-11-1983 and 28-11-1983. In Ext. C1 it was reported that 31 coconut plants were in flood condition and may yield within two years. The defendants took out another commission apparently because the Commissioner who filed Ext C1 report expired. For preparing that report namely. Ext. C2 the Commissioner inspected the property on 13-3-1988. Schedule 3 to that report gives improvements effected by the defendants. There were 30 coconut trees which were non-bearing among other trees which are mainly of spontaneous origin. It is well known that coconut trees will begin to yield at least 7 or 8 years after they are planted. The injunction order in this suit was passed on 25-7-1978. So much so, if the trees were planted before that date, it would have started yielding at least by 1986 or 1987 The circumstance that on 13-3-1988 the trees were not yielding probabilises the case of the plaintiff that the trees were planted after the order of injunction. There is another circumstance also to support this conclusion. Ext A25 is the report of a Commissioner, who inspected the property when this suit was pending in the Munsiff''s Court. No doubt, there is a contention that Ext. A23 should not be relied upon since that Commissioner was not examined. The plaintiff who proved Ext. A25 was not cross-examined about that report. Ext. A25 report was prepared for assessing the damages caused to the trees and also to ascertain the age of the trees in the plaint schedule property etc. A comparison of the coconut trees in Ext. A25 and Ext. C2 will show that on the date of inspection of the Commissioner who filed Ext. A25 namely, 28-5-1978 the trees reported to have been planted by the defendants were not in existence. This is another indication to show that the defendants planted the coconut trees after the order of injunction.

It is well settled that effecting improvements in violation of an order of injunction cannot be said to be a bona fide act Under the circumstances of this case it cannot be said that the defendants made improvements in the bona fide belief that they were entitled to make such improvement. So much so, they cannot be treated as coming within the definition of ''tenant'' u/s 2(d)(iii) of the Compensation for Tenants improvements Act, in this connection it may also be observed that when on behalf of the defendants Ext. A19 notice was issued to the plaintiff on 21-8-1970, they had no case that they had effected any improvements in the property as if they were tenants. However, when Ext. A24 notice was issued on behalf of the defendants on 29-10-1976 claiming an oral agreement for sale, it was mentioned that the defendants had effected improvements in the property as tenants. The alleged oral agreement for sale was in 1972. However, in evidence D. W. 1 claimed that they had effected improvements as co-owners. In case there was any such oral agreement for sale, the Improvements if any, effected could not be as tenants, but only as a purchaser who was put in possession of the properties under the agreement. This is another circumstance to hold that the improvements were not made bona fide.

Another aspect may also be relevant in this connection. The extent of the property is 33.12 cents with a residential building and shop rooms. There were already 11 coconut trees In the property at the time of the agreement. The Commissioner''s reports show that there are now 41 coconut trees. This will amount to over plantation as mentioned in Section 16 of the Act Such an improvement cannot be termed as bona fide improvement-

As early as on 26-11-1968 when Ext. B1 letter was sent by the plaintiff, he had admitted that the defendants had handed over to the plaintiff the accounts for repairing of the house. As P.W. 1 the plaintiff stated that out of the amount of Rs. 10,000/- Rs. 7,450/- was paid in cash. Although he did not admit the amount of Rs. 4,256/- as the expense for repairs, in order to avoid further controversies he admitted receipt of Rs. 11,700/- and odd (see page 6 of P. W 1). In schedule III of Ext. C2 Commissioner''s report the value of Improvements to the building was fixed as Rs. 7,850/-. All the improvements like electrification of the house, purchase of motor, construction of water-tank and construction of a latrine were of the year 1972. It is only probable that the cost of those constructions/repairs was taken into account in arriving at the total amount of Rs. 11,700/-. The value of electrical fittings as well as motor etc must have been considerably reduced by this time namely, after a period of about 20 years.

Taking into consideration the above facts and circumstances, we hold that the defendants are not entitled to any value of improvements. Learned counsel for the appellants argued only the above said two points namely, benefits u/s 53A of the T. P. Act and the claim for value of improvements No other point was urged in this appeal against the first appeal.

There is no Merit in this appeal. If is accordingly dismissed. Parties A are directed to bear their respective costs.